B-135249, MAR. 11, 1958

B-135249, MAR. 11, 1958

TO MR. GLENN C. PARMELEE, DIRECTOR, SUPPLY SERVICE, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 14, 1958, WITH ENCLOSURES, FILE 1340, SUBMITTING FOR OUR DECISION THE QUESTION AS TO WHETHER THE FORESTON COAL COMPANY, INC., MAY BE PERMITTED TO INCREASE ONE OF THE BID PRICES QUOTED BY THE CORPORATION UNDER VETERANS ADMINISTRATION INVITATION NO. M9-1-58, IN VIEW OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID.

IN RESPONSE TO INVITATION NO. M9-1-58, ISSUED ON JANUARY 13, 1958, BY THE MARKETING DIVISION FOR FURLS, SUPPLY SERVICE, VETERANS ADMINISTRATION, THE FORESTON COAL COMPANY, INC., OFFERED TO FURNISH, AMONG OTHERS, ITEM NO. 78, COVERING AN ESTIMATED 2,200 NET TONS OF BITUMINOUS COAL IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH IN APPLICABLE SCHEDULES, ETC., ON A DELIVERED AND STORED BASIS, TO THE VETERANS ADMINISTRATION HOSPITAL, WEST ROXBURY, MASSACHUSETTS, DURING THE PERIOD FROM APRIL 1, 1958, THROUGH MARCH 31, 1959, AT A TOTAL UNIT PRICE OF $11.58 PER NET TON. THE CORPORATION PROPOSED TO SHIP THE COAL FROM THE MID PENN NO. 5 MINE AT MADERA, PENNSYLVANIA, AND THE UNIT PRICE PER TON SHOWED A BREAKDOWN OF $5.75 A NET TON AT THE MINE PLUS A FREIGHT RATE OF $5.83 PER NET TON. ANOTHER BID WAS SUBMITTED BY THE FORESTON COAL COMPANY, INC., ON ITEM NO. 78 OFFERING SHIPMENT OF THE 2,200 NET TONS FROM THE BURTON MINE, SUMMERSVILLE, WEST VIRGINIA, ON A DELIVERED AND STORED BASIS, AT A TOTAL PRICE OF $14.18 PER NET TON. THIS BID INCLUDED A UNIT PRICE BREAKDOWN OF $6.50 PER NET TON AT THE MINE, $5.98 PER NET TON FREIGHT RATE AND $1.70 PER NET TON FOR TRUCKING. ON FEBRUARY 10, 1958, THE FORESTON COAL COMPANY, INC., CONTACTED THE CONTRACTING OFFICER BY TELEPHONE AND ADVISED THAT THERE WAS OMITTED FROM ITS BID ON THE COAL FROM THE MID PENN NO. 5 MINE A TRUCKING CHARGE OF $1.70 PER NET TON. BY A LETTER DATED FEBRUARY 10, 1958, THE CORPORATION AFFIRMED ITS TELEPHONE CONVERSATION AND POINTED OUT THAT THERE HAD BEEN INCLUDED IN THE OTHER BID WHICH IT SUBMITTED FOR ITEM NO. 78 FOR SHIPMENT FROM THE BURTON MINE AN AMOUNT OF $1.70 PER NET TON TO COVER THE COST OF TRUCKING. THE FORESTON COAL COMPANY, INC., ALSO STATED IN ITS LETTER, AS FOLLOWS:

"HOWEVER, IN MAKING OUR BID TO COVER THE MID PENN NO. 5 MINE COAL WE SHOWED PRICE OF $5.75 N.T. AT THE MINE, AND WE SHOWED FREIGHT RATE OF $5.83 N.T. WHICH, INCIDENTALLY, IS INCORRECT AND SHOULD HAVE BEEN $5.62 N.T. THEN, BY AN OVERSIGHT ON THE PART OF ONE OF OUR CLERKS WE OMITTED TO SHOW THE TRUCKING PRICE OF $1.70 N.T., TO MEET YOUR REQUIREMENTS ON A DELIVERED AND STORED PRICE.

"WE ARE SURE YOU WILL UNDERSTAND THAT THERE WAS NO INTENT IN WRONGDOING BUT SIMPLY AN HONEST ERROR AND, THEREFORE, WE APPEAL TO YOU TO EVALUATE OUR MID PENN NO. 5 BID ON A DELIVERED AND STORED BASIS, USING PRICE OF COAL AS BID OF $5.75 N.T. AND THE TRUE FREIGHT RATE OF $5.62, PLUS THE TRUCKING PRICE ALREADY SHOWN OF $1.70 N.T., MAKING A DELIVERED AND STORED PRICE OF $13.07 T.'

THE SOLE QUESTION FOR CONSIDERATION HERE APPEARS TO BE WHETHER THE RECORD ADEQUATELY SUPPORTS THE ALLEGATION THAT THE FORESTON COAL COMPANY, INC., FULLY INTENDED TO INCLUDE A TRUCKING CHARGE OF $1.70 PER NET TON ON ALL COAL SHIPPED FROM THE MID PENN NO. 5 MINE. IN THIS CONNECTION IT SEEMS THAT THE CORPORATION IS RELYING ENTIRELY ON THE FACT THAT THERE WAS INCLUDED IN ITS OTHER BID ON ITEM NO. 78 FOR COAL FROM THE BURTON MINE A TRUCKING CHARGE OF $1.70 PER NET TON. HOWEVER, THERE IS ALSO NOTED THE FACT THAT IN YOUR LETTER OF FEBRUARY 14, 1958, YOU REPORT THAT THE AMOUNT OF $5.83 PER NET TON, WHICH WAS INCLUDED IN THE BID OF THE FORESTON COAL COMPANY, INC., AS THE FREIGHT RATE, IS THE APPLICABLE FREIGHT RATE FROM MADERA, PENNSYLVANIA, SITE OF THE MID PENN NO. 5 MINE TO WEST ROXBURY, MASSACHUSETTS--- NOT ROXBURY, MASSACHUSETTS--- AS SHOWN IN P.R.R. FREIGHT TARIFF 3011-B, AA-I.C.C. 2800. THERE ALSO IS NOTED THE CORPORATION'S STATEMENT IN ITS LETTER OF FEBRUARY 10, 1958, WHICH REFERS TO THE FREIGHT RATE THAT WAS INCLUDED IN ITS BID OF $5.83 PER NET TON--- ESTABLISHED AS THE APPLICABLE RATE FROM MADERA TO WEST ROXBURY--- AS BEING IN ERROR AND THAT THIS RATE SHOULD HAVE BEEN $5.62 PER NET TON, WHICH YOU REPORT IS THE APPLICABLE FREIGHT RATE FROM MADERA TO ROXBURY.

ADMITTEDLY, THE RECORD FAILS TO REVEAL ANY REAL PLAUSIBLE BASIS AS TO WHY THE FORESTON COAL COMPANY, INC., WOULD HAVE DIFFERENTIATED AS TO THE TRUCKING ASPECTS OF THE TWO BIDS ON ITEM NO. 78, BUT WHEN THERE IS CONSIDERED THE FOREGOING, TOGETHER WITH THE FACT THAT SHIPMENT FROM THE MID PENN NO. 5 MINE IN PENNSYLVANIA WAS TO BE MADE VIA THE PENNSYLVANIA RAILROAD, WHEREAS THE BALTIMORE AND OHIO IS DESIGNATED AS THE CARRIER FOR THE COAL FROM THE BURTON MINE IN WEST VIRGINIA--- SCHEDULE NO. 1 OF THE INVITATION SHOWS THE RAILROAD POINT OF DELIVERY AS WEST ROXBURY, MASSACHUSETTS (NY, NH AND H RR/--- WHEREIN THERE VERY READILY MIGHT BE INVOLVED CERTAIN SUBSTANTIAL SHIPPING ADVANTAGES OR DISADVANTAGES IN TIME SCHEDULES, RATES, CONNECTIONS, ETC., WE DO NOT FEEL THAT THE RECORD ESTABLISHES, BEYOND DOUBT, THE INTENTION OF THE FORESTON COAL COMPANY, INC., AT THE TIME OF THE PREPARATION OF ITS BID, TO SHIP THE COAL BY RAIL ONLY TO ROXBURY, MASSACHUSETTS, AND TO INCLUDE A TRUCKING CHARGE OF $1.70 PER NET TON FOR DELIVERY AND STORAGE CHARGES FROM THAT POINT TO THE HOSPITAL.

ACCORDINGLY, A CORRECTION OF THE SUBJECT BID PROPERLY MAY NOT BE AUTHORIZED. HOWEVER, IN VIEW OF THE CIRCUMSTANCES REPORTED IN THIS PARTICULAR CASE, THAT PART OF THE BID FOR ITEM NO. 78 MAY BE DISREGARDED.