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TO THE PUBLIC PRINTER: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 9. IT IS ADMINISTRATIVELY REPORTED THAT INVITATIONS WERE MAILED TO TWENTY SUPPLIERS INVITING BIDS ON A CONTRACT FOR TABULATING MACHINE PAPER FOR THE PERIOD BEGINNING WITH THE DATE OF AWARD AND ENDING NOVEMBER 30. FURTHER PROVIDED THAT THE SHIPMENTS WERE TO BE MADE ON GOVERNMENT BILLS OF LADING F.O.B. IT WAS REQUIRED TO SUBMIT A SEPARATE BID FOR EACH PLANT. NINE BIDS WERE RECEIVED AND OPENED AT 11 A.M. INC. 1 IT WAS DETERMINED THAT THE ARNOLD BUSINESS FORMS COMPANY BID WAS NON-RESPONSIVE BECAUSE ITS QUOTATIONS WERE MADE "F.O.B. IT WAS ALSO DETERMINED THAT THE BIDS OF LEWIS BUSINESS FORMS. WERE NONRESPONSIVE BECAUSE ITS QUOTATIONS FOR EACH OF THE FOUR CITIES OF MANUFACTURE WERE STATED AS FOLLOWS: CHART PRICE PER LOADED CONSOLIDATOR* * BASIS - F.O.B.

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B-160858, FEB. 24, 1967

TO THE PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 9, 1967, REQUESTING A DECISION CONCERNING THE RESPONSIVENESS OF TWO BIDS SUBMITTED UNDER GOVERNMENT PRINTING OFFICE (GPO) PROGRAM NO. 373.

IT IS ADMINISTRATIVELY REPORTED THAT INVITATIONS WERE MAILED TO TWENTY SUPPLIERS INVITING BIDS ON A CONTRACT FOR TABULATING MACHINE PAPER FOR THE PERIOD BEGINNING WITH THE DATE OF AWARD AND ENDING NOVEMBER 30, 1967. THE SPECIFICATIONS PROVIDED THAT THE GPO WOULD DETERMINE THE LOWEST BIDDING CONTRACTOR AND THE SEQUENCE OF OTHER CONTRACTORS FOR EACH PRINT ORDER, USING THE PRICE QUOTATIONS OF EACH ELIGIBLE CONTRACTOR AND ADDING TRANSPORTATION COSTS OF THE FINISHED PRODUCT TO ALL DESTINATIONS, AND FURTHER PROVIDED THAT THE SHIPMENTS WERE TO BE MADE ON GOVERNMENT BILLS OF LADING F.O.B. CONTRACTOR'S CITY. IF THE BIDDER HAD MORE THAN ONE PLANT IT PROPOSED TO USE, IT WAS REQUIRED TO SUBMIT A SEPARATE BID FOR EACH PLANT, CLEARLY INDICATING PLANT LOCATION. NINE BIDS WERE RECEIVED AND OPENED AT 11 A.M., DECEMBER 27, 1966, AS FOLLOWS:

CHART

COMPANY NO. OF PLANT LOCATIONS

WALTON PRINTING CORPORATION 2

STAR FORMS, INC. 1

POTTER PRESS 1

MOORE BUSINESS FORMS, INC. 10

DUPLEX PRODUCTS, INC. 3

O. L. SCHILFFARTH AND COMPANY 1

ALLIED EGRY. BUSINESS SYSTEMS 3

LEWIS BUSINESS FORMS, INC. 4

ARNOLD BUSINESS FORMS, INC. 1 IT WAS DETERMINED THAT THE ARNOLD BUSINESS FORMS COMPANY BID WAS NON-RESPONSIVE BECAUSE ITS QUOTATIONS WERE MADE "F.O.B. OUR PLANT, HAGERSTOWN, MARYLAND.' IT WAS ALSO DETERMINED THAT THE BIDS OF LEWIS BUSINESS FORMS, INC. WERE NONRESPONSIVE BECAUSE ITS QUOTATIONS FOR EACH OF THE FOUR CITIES OF MANUFACTURE WERE STATED AS FOLLOWS:

CHART

PRICE PER LOADED CONSOLIDATOR*

* BASIS - F.O.B. CONYERS, GEORGIA PLANT

* BASIS - F.O.B. HARAHAN, LOUISIANA PLANT

* BASIS - F.O.B. ASHLAND, VIRGINIA PLANT

* BASIS - F.O.B. JACKSONVILLE, FLORIDA PLANT IN A LETTER DATED JANUARY 3, 1967, THE GPO NOTIFIED THE ARNOLD BUSINESS FORMS COMPANY THAT ITS QUOTATION WAS AN EXCEPTION TO THE SPECIFICATIONS WHICH MADE ITS BID NONRESPONSIVE. ON JANUARY 4, 1967, THE GPO NOTIFIED LEWIS BUSINESS FORMS, INC., THAT ITS BIDS WERE EXCEPTIONS TO THE SPECIFICATIONS AND, THEREFORE, NONRESPONSIVE. BOTH COMPANIES APPEALED THE ADMINISTRATIVE ACTION TAKEN BY THE GPO AND THE QUESTION IS SUBMITTED TO THIS OFFICE PRIOR TO ANY AWARD BEING MADE UNDER THE INVITATION. IT IS STATED THAT GPO'S REASON FOR STIPULATING "F.O.B. CONTRACTOR'S CITY" WAS TO AVOID POSSIBLE ADDITIONAL COSTS IF CARTAGE OR OTHER CHARGES WERE TO ACCRUE, SUCH AS HAULING TO A FREIGHT SIDING; OR IF THE PLANT DID NOT HAVE PLATFORM FACILITIES NECESSARY TO LOADING CARRIERS; OR IF THE PLANT ACCESS AREAS WERE SUCH THAT THEY WOULD NOT ACCOMMODATE TRAILER TRUCKS.

THE COMPETITIVE BIDDING STATUTES REQUIRE THAT AWARDS OF GOVERNMENT CONTRACTS BE MADE TO THOSE RESPONSIBLE BIDDERS WHO SUBMIT THE LOWEST RESPONSIVE BIDS.

THE ORDINARY BUSINESS SIGNIFICANCE OF THE TERM "F.O.B.' IS THAT THE SELLER WILL DELIVER THE GOODS AT THE DESIGNATED POINT "WITHOUT A CHARGE FOR PRIOR TRANSPORTATION SERVICE.' BROOKS-SCANLON CO. V. ILLINOIS CENTRAL RAILROAD CO., 257 F. 235, 237; 18 COMP. GEN. 938. IN HARDINGE CO., INC. V. EIMCO CORP., 266 PAC.2D. 494, THE COURT STATED (PAGE 495):

"* * * THE ABBREVIATION F.O.B. FOR "FREE ON BOARD" IS WELL KNOWN FOR ITS COMMERCIAL SIGNIFICANCE AND IS QUITE GENERALLY ACCEPTED BY THE COURTS WITHOUT PROOF. IT DENOTES THE DUTY OF THE SELLER TO DELIVER THE GOODS FREE FROM ALL CHARGES ON BOARD THE VEHICLES OF THE CARRIER, HARMAN V. WASHINGTON FUEL CO., 228 ILL. 298; 81 N.E. 1017; THAT GOODS ARE TO BE DELIVERED AT A CERTAIN PLACE F.O.B. MEANS THAT THEY WILL BE DELIVERED TO A CARRIER AT THAT PLACE FREE OF DRAYAGE CHARGES, ETC. MUSKEGON CURTAIN-ROLL CO. V. KEYSTONE MFG.CO. 135 PA. 132, 19 A. 1008. * * *" FURTHER, THE WORDS "FREE ON BOARD" ARE DEFINED IN BOUVIER'S LAW DICTIONARY AS FOLLOWS:

"A PHRASE APPLIED TO THE SALE OF GOODS WHICH DENOTES THAT THE SELLER HAS CONTRACTED FOR THEIR DELIVERY ON THE VESSEL, CARS, ETC., WITHOUT COST TO THE BUYER FOR PACKING, PORTAGE, CARTAGE, AND THE LIKE.'

WHERE THE INVITATION SPECIFIES DELIVERY "F.O.B. CONTRACTOR'S CITY" THE GOVERNMENT CAN REQUIRE DELIVERY ANYWHERE IN THE CITY WITHOUT CHARGE TO THE GOVERNMENT. WHERE THE BIDDER LIMITS THE DELIVERY TO "F.O.B. PLANT," THE BIDDER HAS RESTRICTED THE LIABILITY WHICH THE INVITATION SOUGHT TO OBTAIN.

IT MUST BE CONCLUDED, THEREFORE, THAT THE USE OF THE WORK "PLANT" IN CONJUNCTION WITH THE DESIGNATION OF THE F.O.B. POINT SET FORTH IN THE QUESTIONED BIDS WAS A DEPARTURE COMMON TO BOTH BIDS AND RENDERED THEM NONRESPONSIVE IN THAT THE BIDDERS' LIABILITY FOR DRAYAGE COSTS WERE LIMITED THEREBY. SINCE THE POINT OF DELIVERY AFFECTS PRICES, SUCH DEPARTURE GOES TO THE SUBSTANCE OF THE BID AND FAILURE TO QUOTE ON THE BASIS CONTEMPLATED BY THE INVITATION IS GROUND FOR REJECTION OF THE BIDS AS NONRESPONSIVE. THIS IS A GENERAL RULE AND IS APPLICABLE REGARDLESS OF WHETHER THE INVITATION CONTAINS A SPECIFIC WARNING IN THIS REGARD. ACCORDINGLY, THE BIDS OF BOTH ARNOLD AND LEWIS SHOULD BE REJECTED AS NONRESPONSIVE.

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