B-128297, OCT. 9, 1956

B-128297, OCT. 9, 1956

TO HAMILTON-EAGLES FUNERAL HOME:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 11, 1956, PROTESTING THE ACTION OF THE CONTRACTING OFFICER AT FORT BRAGG, NORTH CAROLINA, IN AWARDING CONTRACT NO. DA 31-001-AIII-1935, DATED JUNE 2, 1956, COVERING FUNERAL SERVICES FOR THE FISCAL YEAR ENDING JUNE 30, 1957, TO THE JERNIGAN -WARREN FUNERAL HOME, FAYETTEVILLE, NORTH CAROLINA.

THE SUBSTANCE OF YOUR PROTEST IS THAT IN THE EVALUATION OF THE BIDS THE CONTRACTING OFFICER WRONGFULLY TOOK INTO CONSIDERATION THE 2 PERCENT CASH DISCOUNT OFFERED BY THE SUCCESSFUL BIDDER FOR PAYMENT WITHIN 10 DAYS, THEREBY MAKING THE NET BID OF THE JERNIGAN-WARREN FUNERAL HOME $18,130, OR $160 LOWER THAN THE BID OF YOUR COMPANY ($18,390) ON THE TWO PRINCIPAL ITEMS OF SERVICES DESCRIBED AS ITEMS NOS. 1 AND 2 OF THE INVITATION, NO. QM/W) 31-001-56-148. IN YOUR LETTER OF JUNE 11, YOU REFER SPECIFICALLY TO ARTICLE 7 OF THE CONTRACT GENERAL PROVISIONS, WHICH STIPULATES, IN PART, THAT "PAYMENT FOR ACCEPTED PARTIAL DELIVERIES SHALL BE MADE WHENEVER SUCH PAYMENT WOULD EQUAL OR EXCEED EITHER $1,000 OR 50 PERCENT OF THE TOTAL AMOUNT OF THIS CONTRACT," AND YOU POINT OUT THAT, IF PAYMENTS WERE ACTUALLY MADE ON SUCH BASIS, NEITHER THE AMOUNTS INVOLVED NOR THE TIME NORMALLY CONSUMED IN THE PROCESSING OF THE NECESSARY PAPERS WOULD PERMIT THE MAKING OF PAYMENTS IN SUFFICIENT TIME TO TAKE ADVANTAGE OF THE 2 PERCENT DISCOUNT OFFERED BY THE CONTRACTOR FOR PAYMENT WITHIN 10 CALENDAR DAYS.

YOU FURTHER POINT OUT THAT, IN THE EVALUATION OF THE BIDS RECEIVED, THE CONTRACTING OFFICER FAILED TO TAKE INTO CONSIDERATION THE ITEM OF TRANSPORTATION, ITEM NO. 3 OF THE INVITATION, ON WHICH YOU QUOTED ONLY 25 CENTS PER MILE FOR TRANSPORTATION BEYOND THE CONTRACT RADIUS OF 30 MILES, AS COMPARED TO THE CONTRACTOR'S QUOTATION OF 40 CENTS PER LOADED MILE.

CONCERNING YOUR CONTENTION THAT THE CASH DISCOUNT OFFERED BY THE SUCCESSFUL BIDDER SHOULD NOT HAVE BEEN TAKEN INTO CONSIDERATION IN THE EVALUATION OF THE BIDS RECEIVED, THE EXPRESS AUTHORITY FOR THE CONSIDERATION OF SUCH DISCOUNTS FOR EVALUATION PURPOSES IS CONTAINED IN ARTICLE 7, TERMS AND CONDITIONS OF THE INVITATION, WHICH PROVIDES:

"7. DISCOUNTS.--- (A) PROMPT-PAYMENT DISCOUNTS WILL BE INCLUDED IN THE EVALUATION OF BIDS, PROVIDED THE PERIOD OF THE OFFERED DISCOUNT IS SUFFICIENT TO PERMIT PAYMENT WITHIN SUCH PERIOD IN THE REGULAR COURSE OF BUSINESS UNDER THE DELIVERY, INSPECTION, AND PAYMENT PROVISIONS OF THE INVITATION AND BID.'

ARTICLE 7 (B) PROVIDES, IN SUBSTANCE, THAT TIME, IN CONNECTION WITH THE DISCOUNTS OFFERED, SHALL BE COMPUTED EITHER FROM DATE OF DELIVERY AND ACCEPTANCE OF THE CONTRACT SERVICES, OR FROM DATE OF RECEIPT BY THE GOVERNMENT OF THE CONTRACTOR'S CORRECT AND PROPERLY CERTIFIED INVOICE OR VOUCHER, WHICHEVER IS LATER. THE QUESTION OF WHETHER THE PAYMENTS UNDER THIS TYPE OF CONTRACT NORMALLY CAN BE EFFECTUATED WITHIN 10 CALENDAR DAYS, COMPUTED IN THE MANNER PRESCRIBED ABOVE, HAS BEEN THOROUGHLY INVESTIGATED BY THE RESPONSIBLE ADMINISTRATIVE OFFICIALS, AND IN A REPORT DATED AUGUST 28, 1956, PREPARED BY THE CONTRACTING OFFICER, IT IS STATED:

"1. AS EVIDENCE OF THE INTENT OF THE GOVERNMENT TO TAKE ADVANTAGE OF DISCOUNTS OFFERED UNDER CONTRACTS FOR THE CARE OF REMAINS, THERE ARE ATTACHED CONFORMED COPIES OF VOUCHERS COVERING PAYMENT FOR SERVICES RENDERED UNDER DELIVERY ORDERS NO. 1 THROUGH NO. 41, CONTRACT NO. DA 31- 001-AIII-1742 WITH THE JERNIGAN-WARREN FUNERAL HOME, FAYETTEVILLE, NORTH CAROLINA, DURING FISCAL YEAR 1956. THESE DELIVERY ORDERS, WITH THE EXCEPTION OF NO. 7 AND NO. 24, WERE ISSUED BY THE CONTRACTING OFFICER, FORT BRAGG, N.C. AND PAID BY THE FINANCE AND ACCOUNTING OFFICER, FORT BRAGG, N.C., APPLICABLE DISCOUNTS BEING TAKEN IN EACH INSTANCE. DELIVERY ORDERS NO. 7 AND NO. 24 WERE ISSUED BY THE CONTRACTING OFFICER, POPE AIR FORCE BASE, UNDER THE JOINT-USE CONTRACT PREPARED BY THE CONTRACTING OFFICER, FORT BRAGG, N.C. DISCOUNTS WERE NOT TAKEN UNDER THESE TWO DELIVERY ORDERS FOR THE REASON THAT THE CONTRACTING OFFICER, POPE AIR FORCE BASE INADVERTENTLY ENTERED THE DISCOUNT TERMS ON THE DELIVERY ORDERS AS "NET" INSTEAD OF "2 PERCENT 10 DAYS" AS SHOWN IN THE CONTRACT. THE CONTRACTING OFFICER, POPE AIR FORCE BASE, HAS ADVISED THAT CORRECTIVE ACTION WILL BE TAKEN AND THE AMOUNT OF DISCOUNT RECOVERED FROM THE CONTRACTOR, SINCE PAYMENT WAS MADE WITHIN THE 10-DAY DISCOUNT PERIOD.'

A REFERENCE TO THE 41 VOUCHERS REFERRED TO CONFIRMS THE CONTRACTING OFFICER'S ASSERTION THAT, EXCEPT FOR THE TWO PAYMENTS ON WHICH THE DISCOUNTS WERE INADVERTENTLY OVERLOOKED, ALL OF THE REMAINING PAYMENTS FOR FUNERAL SERVICES RENDERED BY THE CONTRACTOR DURING THE PRIOR FISCAL YEAR ENDING JUNE 30, 1956, WERE MADE WITHIN THE 10-DAY DISCOUNT PERIOD SPECIFIED IN THE CONTRACT, THUS CLEARLY ESTABLISHING THAT THE VOUCHERS CAN READILY BE PROCESSED FOR PAYMENT WITHIN 10 DAYS AFTER RENDITION OF THE ORDERED SERVICES.

YOUR REFERENCE TO THE PAYMENT PROVISIONS RECITED IN ARTICLE 7 OF THE CONTRACT "GENERAL PROVISIONS," PROVIDING FOR THE MAKING OF PAYMENTS ON "PARTIAL DELIVERIES" WHEN THE AMOUNT INVOLVED EQUALS OR EXCEEDS $1,000 OR 50 PERCENT OF THE TOTAL AMOUNT OF THE CONTRACT, IS NOT PROPER, SINCE, OBVIOUSLY, THIS PARTICULAR CLAUSE HAS RELATION TO CONTRACTS CALLING FOR THE DELIVERY OF DEFINITE QUANTITIES OF SUPPLIES OR MATERIALS, AND NOT TO CONTINUING CONTRACTS FOR THE RENDITION OF SERVICES AS REQUIRED, EACH SERVICE CONSTITUTING A SEPARATE AND ENTIRE TRANSACTION. IN THIS CONNECTION, YOU WILL OBSERVE THAT ARTICLE 7 ALSO PROVIDES THAT THE CONTRACTOR SHALL BE PAID UPON THE SUBMISSION OF PROPERLY CERTIFIED INVOICES OR VOUCHERS FOR SUPPLIES DELIVERED "OR SERVICES RENDERED AND ACCEPTED," AS HERE. THUS, IT IS APPARENT THAT PAYMENTS BECOME DUE UNDER THE CONTRACT ON EACH COMPLETE FUNERAL SERVICE OR OPERATION RENDERED BY THE CONTRACTOR UPON THE ORDER OF THE GOVERNMENT.

FINALLY, THE FACT THAT TRANSPORTATION SERVICES OF THE KIND CALLED FOR UNDER ITEM NO. 3 OF THE CONTRACT WERE NOT CONSIDERED FOR EVALUATION PURPOSES WOULD MAKE NO MATERIAL DIFFERENCE IN THE AWARDING OF THE CONTRACT SINCE, ACCORDING TO AVAILABLE RECORDS, THE TRAVEL PER LOADED MILE AMOUNTED TO ONLY 338 MILES DURING THE PRIOR FISCAL YEAR, WHICH WOULD ACCOUNT FOR A NET DIFFERENCE OF ONLY $50.70 IN THE NET BID PRICES OF YOURS AND THE ACCEPTED BID. WHILE IT IS RECOGNIZED THERE IS NO RELIABLE CRITERION FOR ESTIMATING THE MILEAGE BEYOND THE 30-MILE RADIUS SPECIFIED IN THE CONTRACT, THERE IS LITTLE LIKELIHOOD OF THE MILEAGE BEING SO GREAT AS TO CAUSE YOU TO BE THE ULTIMATE LOW BIDDER BY REASON OF YOUR LOWER MILEAGE RATE.

IN THE CIRCUMSTANCES, AS HEREINBEFORE RELATED, WE FIND NO PROPER BASIS FOR DISTURBING THE ACTION OF THE CONTRACTING OFFICER.