B-173966, JUN 1, 1972

B-173966, JUN 1, 1972

TRANSPORTATION - DIRECT PROCUREMENT METHOD - TRANSPORTATION OF HOUSEHOLD GOODS AND DRAYING SERVICES CONCERNING A CLAIM OF SPOKANE TRANSFER AND STORAGE CO. UNDER A CONTRACT WITH FAIRCHILD AFB FOR THE TRANSPORTATION OF HOUSEHOLD GOODS AND DRAYING SERVICES FROM SPOKANE TO COLVILLE, WASHINGTON. THE AIR FORCE HAS DETERMINED THAT THE SERVICES PERFORMED ARE, IN THE AGGREGATE, LESS COSTLY FOR THE GOVERNMENT AND SINCE THE CHARGES WERE COMPUTED ON A BASIS ACTUALLY INTENDED BY BOTH PARTIES, THE CLAIM MAY BE ALLOWED.

TO COLONEL W. J. MCMAHON:

IN YOUR LETTER OF AUGUST 11, 1971, YOU REQUEST A DECISION ON THE VALIDITY OF A CLAIM BY SPOKANE TRANSFER AND STORAGE CO. (HEREAFTER SPOKANE TRANSFER), FOR $2,868.24 FOR THE TRANSPORTATION FROM SPOKANE TO COLVILLE, WASHINGTON, OF HOUSEHOLD GOODS WEIGHING 5,624 POUNDS (GROSS) AND OWNED BY ONE JANET A. FICKE.

THE CHARGES CLAIMED ARE COMPOSED OF $224.96, BASED ON $4 PER GROSS HUNDREDWEIGHT PROVIDED IN ITEM NO. 15 OF CONTRACT NO. F-45613-71-C 0123, DATED DECEMBER 9, 1970, WITH SPOKANE TRANSFER, FOR UNPACKING AND PLACING OF HOUSEHOLD GOODS AT THE CONTRACTOR'S OR THE GOVERNMENT'S FACILITY AS DIRECTED BY CONTRACTING OFFICER, PLUS $2,643.28, BASED ON $1 PER GROSS HUNDREDWEIGHT PER LOADED MILE AS PROVIDED IN ITEM 25(C) OF THE CONTRACT FOR DRAYAGE FROM THE NORTH BORDER OF THE SPOKANE COUNTY LINE TO COLVILLE, STEVENS COUNTY, WASHINGTON, A DISTANCE OF 47 MILES BEYOND THE PRIMARY ZONE OF PERFORMANCE OF THE CONTRACT. YOU QUESTION THE VALIDITY OF THE CLAIM BECAUSE OF THE APPARENTLY EXORBITANT CHARGE OF $2,643.28 FOR DRAYING SERVICES ALONE.

YOU INDICATE IN YOUR LETTER THAT THE DIRECT PROCUREMENT METHOD RATHER THAN THE THROUGH GOVERNMENT BILL OF LADING (TGBL) METHOD WAS SELECTED AS THE METHOD TO BE USED TO TRANSPORT THESE HOUSEHOLD GOODS FROM VILSECK, GERMANY, TO THE UNITED STATES. WHEN THAT METHOD IS USED, ONLY THE TRANSPORTATION SERVICE IS PROVIDED BY COMMON CARRIERS AND THE REQUIRED MATERIALS (INCLUDING CONTAINERS) AND SERVICES INCIDENT TO THE PREPARATION, STORAGE, AND DRAYAGE OF THE SHIPMENT, COMMONLY CALLED PACK AND CRATE SERVICES, ORDINARILY ARE PROCURED BY CONTRACT FOLLOWING THE FORMAT CONTAINED IN SECTION XXII, PART 6, ARMED SERVICES PROCUREMENT REGULATION (ASPR). SEE CHAPTER 7, PERSONAL PROPERTY TRAFFIC MANAGEMENT REGULATION, DOD 4500.34-R, EFFECTIVE MAY 1, 1971, WHICH SUPERSEDED ARMY REGULATION 55- 356, IN EFFECT WHEN THE TRANSPORTATION OFFICER IN GERMANY MADE THE ARRANGEMENTS FOR THIS TRANSPORTATION.

THE ORIGINAL DESTINATION OF THE SHIPMENT WAS METALINE FALLS, WASHINGTON, A PLACE WITHIN THE AREA OF RESPONSIBILITY OF THE TRANSPORTATION OFFICE, FAIRCHILD AIR FORCE BASE, WASHINGTON. (THE CHANGE IN DESTINATION WHILE UNEXPLAINED IN THE RECORD DOES NOT SEEM MATERIAL HERE BECAUSE IT TOO IS WITHIN FAIRCHILD'S AREA OF RESPONSIBILITY.) SPOKANE TRANSFER HAD THE PACK AND CRATE CONTRACT WITH FAIRCHILD; IT IS A REQUIREMENTS CONTRACT AND THE IFB SET FORTH THREE SCHEDULES CALLING FOR SERVICES IN FOUR AREAS: SCHEDULE I COVERED COMPLETE OUTBOUND SERVICES; SCHEDULE II COVERED COMPLETE INBOUND SERVICES; SCHEDULE III COVERED INTRACITY AND INTRA-AREA TRANSPORTATION. THE BID WAS ACCEPTED FOR SCHEDULES I AND II, AREAS I AND II, ITEMS 1 THROUGH 28; AND SCHEDULE III, AREA I, ITEM 29.

AREA I IS COMPRISED OF SPOKANE COUNTY, WASHINGTON, AND AREA II INCLUDES GRANT COUNTY AND THAT PORTION OF ADAMS COUNTY NORTH OF STATE HIGHWAY 24 AND WEST OF STATE HIGHWAY 17 IN THE STATE OF WASHINGTON. COLVILLE IS LOCATED OUTSIDE AREAS I AND II IN STEVENS COUNTY.

ITEM 25 OF SCHEDULE II OF THE CONTRACT COVERS DRAYAGE BEYOND THE PRIMARY AREA OF PERFORMANCE IN CONNECTION WITH INBOUND SERVICES AND READS:

EST

"ITEM ANNUAL UNIT

NO. SUPPLIES/SERVICES/PRICES QUANTITY UNIT PRICE AMOUNT

SCHEDULE II

INBOUND SERVICES (CONT'D)

25. DRAYAGE. SERVICE UNDER THIS

ITEM SHALL INCLUDE DRAYAGE AS

REQUIRED BEYOND THE PERIMETER

OF THE ZONE OF PERFORMANCE FOR

THE PRIMARY SERVICE PERFORMED.

(SEE SPECIAL PROVISION #13).

GCWT

LOADED

AREA I MILE

(A) UNDER 500 LBS. 1000 " 2.00 2000.00

(B) 501 TO 1500 LBS. 500 " 1.50 750.00

(C) OVER 1500 LBS. 500 " 1.00 500.00"

SPECIAL PROVISION #13 READS:

"(C) DRAYAGE UNDER ITEMS #10 AND #25:

DRAYAGE BEYOND THE PERIMETER OF THE CONTRACT AREAS OF PERFORMANCE BUT WITHIN THE AREA OF RESPONSIBILITY OF THE TRANSPORTATION OFFICE, FAIRCHILD AIR FORCE BASE, (SEE SP-06) WILL BE PAID FOR AT A RATE PER GROSS CWT FOR EACH HIGHWAY MILE THE SHIPMENT IS MOVED. THIS CHARGE WILL BE IN ADDITION TO THE RATE FOR THE PRIMARY SERVICE PERFORMED AND WILL BE BASED ON THE SHORTEST PRACTICABLE ROUTE. NECESSARY DRAYAGE OF EMPTY GOVERNMENT CONTAINERS WILL NOT BE CONSIDERED AS CONTRIBUTING TO LOADED MILE CALCULATIONS BUT WILL BE TREATED IN THE SAME MANNER AS DRAYAGE AND/OR REPOSITIONING OF CONTAINERS UNDER OTHER ITEMS OF THIS CONTRACT AND THE FOREGOING PORTIONS OF THIS PROVISIONS."

THE CHARGES IN QUESTION, $2,643.28, WERE COMPUTED FROM ITEM 25(C): 5,624 POUNDS (OR 56.24 GCWT) X $1.00 $56.24 X 47 MILES.

IN YOUR LETTER YOU STATE:

"ALTHOUGH THE CONTRACT IN SCHEDULE II, ITEM 25, PROVIDES FOR COMPENSATION TO THE CONTRACTOR FOR DRAYAGE AS REQUIRED BEYOND THE PERIMETER OF THE ZONE OF PERFORMANCE OF THE PRIMARY SERVICE PERFORMED FOR SHIPMENTS OVER 1,500 LBS AT A UNIT PRICE OF $1.00 PER UNIT OF GCWT LOADED MILE, THERE APPEARS TO BE A MISUNDERSTANDING REGARDING THE APPLICATION OF THIS CLAUSE. THIS IS CAUSED BY THE ESTIMATED ANNUAL QUANTITY OF 500 GCWTS RESULTING IN A YEARLY ESTIMATED OF $500.00 ONLY."

IN RESPONSE TO OUR REQUEST FOR CLARIFYING INFORMATION THE BASE PROCUREMENT OFFICE AT FAIRCHILD SAID THAT THE CONTRACTING OFFICER INTERPRETS 25(C) THE SAME AS THE CONTRACTOR; I.E; AS MEANING THAT THE CHARGES APPLY TO THE TRANSPORTATION ON A LOADED HUNDRED-WEIGHT MILE (BASIS) FOR EACH MILE THAT A SHIPMENT IS TRANSPORTED BEYOND THE AREA OF PERFORMANCE.

THE PROCUREMENT OFFICE STATED THAT:

"THE EVOLUTION OF THE TRI-PART ITEM CAME FROM THE ORIGINAL SITUATION WHEN ONE PRICE WAS SOLICITED FOR DRAYAGE ON A GCWT BASIS AND THE BIDDERS SOMETIMES CAME IN WITH HIGH PRICES. QUESTIONING ELICITED THAT THEY CLAIMED THAT WHEN BIDDING THEY DID NOT KNOW WHETHER THEY WOULD BE TRANSPORTING A FOOT LOCKER AND USING A PICKUP TRUCK OR A VAN LOAD OF HOUSEHOLD GOODS REQUIRING 2 MEN. THE NEXT STEP WAS TO BREAK THE ITEM INTO INCREMENTS INDICATING THE TYPE OF EQUIPMENT THAT WOULD LOGICALLY BE USED. HOWEVER, TO PRECLUDE THAT THE HIGH PRICING CONDITION AGAIN COULD HAVE OCCURRED DUE TO MISTAKE RATHER THAN THROUGH INTENTION, THE FOLLOWING YEAR'S SOLICITATION (THE CONTRACT WE ARE NOW ADMINISTERING) WAS STRUCTURED DIFFERENTLY AS YOU MAY NOTE FROM THE ATTACHED PERTINENT PAGE OF THE SCHEDULE (ATTACHMENT 6). (ATTACHMENT 6 SHOWS THAT THE CURRENT CONTRACT PROVIDES FOR A CHARGE OF $3 PER VEHICLE LOADED MILE FOR SHIPMENTS WEIGHING OVER 1,500 POUNDS.) ... IN CONCLUSION *** THE OVERALL COST TO THE GOVERNMENT STILL IS THE LOWEST WHEN AWARD IS EVALUATED ON AN OVERALL AGGREGATE BASIS."

THE PROCUREMENT OFFICE INDICATED THAT THE ESTIMATED QUANTITIES WERE SUBMITTED TO IT BY THE TRANSPORTATION OFFICE AND THAT THE FORMAT FOR ITEM 25 OF SPOKANE TRANSFER'S CONTRACT WAS CONSTRUCTED TO PROVIDE MORE PRECISE INFORMATION TO BIDDERS IN ESTIMATING TRUCKING COSTS SO THAT MORE BALANCED BIDDING WOULD RESULT.

THE FAIRCHILD PROCUREMENT OFFICE ALSO REPORTED THAT THE CONTRACTOR WAS UNWILLING TO REDUCE HIS BID PRICES UNDER THE DRAYAGE ITEMS PRIMARILY BECAUSE HE HAD BID SEVERAL OTHER SMALL ITEMS AS "NO CHARGE" AND THAT WHEN HE HAD BID THE DRAYAGE HE WAS NOT AWARE OF THE ACTUAL DISTANCES HE WOULD BE CALLED UPON TO TRAVEL UNDER CERTAIN INDIVIDUAL CALLS.

IT THUS SEEMS CLEAR THAT THE CONSTRUCTION PLACED ON ITEM 25(C) BY THE PARTIES TO THE CONTRACT REFLECTS THEIR ACTUAL INTENT. IN THESE CIRCUMSTANCES AND IN VIEW OF THE EXPLANATION FURNISHED BY THE PROCUREMENT OFFICE, WE FIND NO BASIS TO QUESTION THE CONTRACT ON THAT POINT.

THE PROCUREMENT OFFICE AT FAIRCHILD HAS DETERMINED THAT SERVICES PERFORMED UNDER THE CONTRACT ARE, IN THE AGGREGATE, LESS COSTLY FOR THE GOVERNMENT; CORRECTIVE ACTION HAS BEEN TAKEN TO AVOID SIMILAR HIGH DRAYAGE CHARGES FOR THE FUTURE; THE SERVICES HAVE BEEN PERFORMED; AND THE CHARGES FOR THEM ARE CORRECTLY COMPUTED UNDER THE TERMS OF THE CONTRACT. ACCORDINGLY, THE HIGHER THAN NORMAL CHARGE FOR DRAYING SERVICE NEED NOT BE QUESTIONED IN THIS INSTANCE, AND THE CLAIM OF SPOKANE TRANSFER FOR $2,868.24 MAY BE PAID. TRANSPORT TOPICS, A TRANSPORTATION TRADE PUBLICATION, FOR SEPTEMBER 13, 1971, SHOWS SPOKANE TRANSFER AND STORAGE COMPANY HAS MOVED TO N. 117 NAPA, BOX 3181, SPOKANE, WASHINGTON 99220, AND IT IS SUGGESTED THAT PRIOR TO MAKING PAYMENT TO THAT COMPANY, YOU MAY WISH TO VERIFY THE ADDRESS TO WHICH THE SETTLEMENT SHOULD BE DIRECTED.

THE VOUCHER AND RELATED PAPERS ARE RETURNED.