B-131630, JUL. 26, 1957

B-131630, JUL. 26, 1957

TO IDEAL UNIFORM CAP CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 22, 1957, ACKNOWLEDGED MAY 3, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION NO. IFB-N140-827-57, ON THE GROUND THAT THE DISCOUNT OFFERED BY YOU SHOULD HAVE BEEN CONSIDERED IN EVALUATING YOUR BID, WHICH WAS, CONSIDERING THE DISCOUNT, THE LOWEST RECEIVED.

THE PERTINENT CLAUSE OF THE INVITATION (THE CONSTRUCTION OF WHICH IS THE BASIS OF YOUR PROTEST) PROVIDES AS FOLLOWS:

"PROMPT PAYMENT DISCOUNTS WILL BE CONSIDERED IN THE EVALUATION OF BIDS, PROVIDED THE MINIMUM PERIOD OF THE OFFERED DISCOUNT IS 10 DAYS WHEN DELIVERY AND ACCEPTANCE ARE AT POINT OF ORIGIN; 20 DAYS WHEN PRELIMINARY INSPECTION IS AT POINT OF ORIGIN BUT DELIVERY, FINAL INSPECTION AND ACCEPTANCE ARE AT A SINGLE POINT OF DESTINATION; AND 30 DAYS WHEN PRELIMINARY INSPECTION IS AT POINT OF ORIGIN BUT DELIVERY, FINAL INSPECTION AND ACCEPTANCE ARE AT MULTIPLE POINTS OF DESTINATION, OR WHEN COMPLETE INSPECTION, DELIVERY AND ACCEPTANCE ARE AT ONE OR MORE POINTS OF DESTINATION.'

THE DEPARTMENT OF THE NAVY STATES THAT, INASMUCH AS THE INVITATION CALLED FOR DELIVERY AND FINAL ACCEPTANCE OF THE SUPPLIES AT FOUR POINTS OF DESTINATIONS, THE CONTRACTING OFFICER DID NOT CONSIDER YOUR OFFER OF A 5 PERCENTUM DISCOUNT FOR PAYMENT WITHIN 20 DAYS IN EVALUATING YOUR BID AND AWARDED THE CONTRACT TO M. TANNEBAUM HEADWEAR CORPORATION.

YOU CONTEND THAT "EACH INDIVIDUAL SHIPMENT IS OFFERED FOR FINAL INSPECTION AT A SINGLE POINT OF DESTINATION" AND THAT THEREFORE YOUR DISCOUNT OFFER SHOULD HAVE BEEN CONSIDERED. YOU INTERPRET THE 30 DAY DISCOUNT PERIOD AS APPLYING ONLY "WHERE VARIOUS PARTS OF ONE SHIPMENT ARE DELIVERED TO VARIOUS DESTINATIONS FOR FINAL INSPECTION AND ACCEPTANCE.' IN SUPPORT OF YOUR INTERPRETATION, YOU CITE THE CLAUSE OF THE INVITATION REQUIRING SUBMISSION OF INVOICES TO EACH ACTIVITY RECEIVING A DELIVERY AND STATE THAT "SINCE DISCOUNTS ARE BASED ON EACH INDIVIDUAL INVOICE AND EACH INVOICE IS FOR MERCHANDISE OFFERED FOR FINAL INSPECTION AND ACCEPTANCE AT A SINGLE POINT OF DESTINATION, WE FEEL THAT OUR DISCOUNT WAS PROPERLY OFFERED.'

THE DEPARTMENT OF THE NAVY REPORT STATES, IN PERTINENT PART, AS FOLLOWS:

"WE DO NOT AGREE WITH THIS (YOUR) INTERPRETATION OF THE "DISCOUNTS" CLAUSE. IDEAL WOULD LIMIT THE APPLICATION OF WORDS "SINGLE POINT OF DESTINATION" AND "MULTIPLE POINTS OF DESTINATION" TO INDIVIDUAL SHIPMENTS UNDER THE CONTRACT; HOWEVER, NOTHING IN THE CLAUSE SUGGESTS SUCH A LIMITATION. THIS CLAUSE RELATES TO ALL THE SUPPLIES TO BE FURNISHED UNDER THE CONTRACT AS DO ALL THE OTHER CLAUSES IN THE INVITATION. "SINGLE POINT OF DESTINATION" MEANS ONE DESTINATION OF THE SUPPLIES PURCHASED. "MULTIPLE POINTS OF DESTINATION" REFERS TO SUPPLIES TO BE DELIVERED TO MORE POINTS OF DESTINATION THAN ONE. IN THIS INVITATION THE SUPPLIES WERE TO BE DELIVERED TO FOUR POINTS OF DESTINATION, WHICH IS CLEARLY A CASE OF "MULTIPLE POINTS OF DESTINATION.' THE FACT THAT EACH ACTIVITY MUST BE INVOICED DOES NOT DETERMINE THAT IT IS A SINGLE POINT OF DESTINATION. THE ACTION OF THE CONTRACTING OFFICER IN REFUSING TO CONSIDER THE DISCOUNT OFFERED BY IDEAL IN EVALUATING ITS BID IS CONSIDERED TO BE PROPER.

"THE PURPOSE OF THIS CLAUSE IS TO ESTABLISH DISCOUNT PERIODS WHICH WILL PERMIT THE PAYING ACTIVITIES TO TAKE ADVANTAGE OF THE DISCOUNTS OFFERED. WHEN SUPPLIES ARE TO BE DELIVERED TO MULTIPLE DESTINATIONS, AS IN THIS INVITATION, MORE TIME IS REQUIRED FOR RECEIPT OF INVOICES FROM THE VARIOUS DESTINATIONS AND PROCESSING OF INVOICES IN THE PAYING OFFICES, THAN IN CASES WHERE THE SUPPLIES ARE DELIVERED TO ONE DESTINATION POINT. THE DISCOUNT PERIODS WERE ESTABLISHED ON THE BASIS OF ACTUAL EXPERIENCE OVER A LONG PERIOD OF TIME IN PAYING INVOICES UNDER CONTRACTS WITH DISCOUNT PROVISIONS.'

FOR THE REASONS STATED IN THE NAVY REPORT, WE CONCUR IN THE CONTRACTING OFFICER'S CONSTRUCTION OF THE "DISCOUNT" CLAUSE OF THE INVITATION, AND CONCLUDE THAT THERE IS NO VALID BASIS UPON WHICH WE MAY OBJECT TO THE REFUSAL OF THE CONTRACTING OFFICER TO CONSIDER YOUR DISCOUNT OFFER IN THE EVALUATION OF YOUR BID.