1 For payment of services rendered as evidenced by attached subvouchers. PAYEE'S CERTIFICATE I certify that the account stated hereon, as evidenced by the attached subvouchers, is correct and just that services have been rendered or tickets furnished as indicated, that payment has not been received, and that the charges are not in excess of those applicable thereto under (1) tariffs lawfully on file with any Federal or State transportation regulatory agency or (2) rates, fares and charges established pursuant to section 22 of the Interstate Commerce Act, as amended, or other equivalent contract, arrangement, or exemption from regulation. 63.4 153.4 PAYEE * When a voucher is signed in the name of a company or corporation, the name of the person writing the company or corporate name, as well as the capacity in which the person signs, must appear. For example: "A.B.C. Railway Co., per John Doe, Controller," or "Auditor," as the case may be. DIFFERENCES AMOUNT VERIFIED - CORRECT FOR ▸ VERIFIED BY PAID BY CHECK NO. ACCOUNTING CLASSIFICATION AMOUNT STANDARD FORM 1113 ALV 377 PRESCA BED BY GSA PL141 CFR) 101 41 MAR 18 1981 Cartwright INTERNATIONAL VAN LINES, INC. GENERAL OFFICE: 11901 CARTWRIGHT AVENUE, GRANDVIEW, MISSOURI 64030 (816) 763-2700 army 46249 DATE 2-11-81 Gentlemen: On 10-01-80 was our billing in the amount of $3,753.83 forwarded to you for payment. As of this date we do not show receipt of same. This account is now over 45 days past due, therefore, we would appreciate your remittance. Your immediate attention to this matter would be greatly appreciated. 1-213-688-5522 1-213-6885340 1-213-688-5355 this Sincerely yours, CARTWRIGHT INTERNATIONAL VAN LINES, INC. RECEIVED USAFAC Bobh. Attr. Stacey 257 181 stating your company, that you should biss the 4. Jaring Engineer- Dist if A World Headquarters 1⁄2 90053 11501 Cartwright Ave. Grandview, Missouri 64030 USA Telephone (816) 763-2700 TELEX: 42291 Cable CARTWRIGHT Member: B.AR/F.I.D.I/H.H.G.FA.A./H.H.G.F.T.B./I.A.T.A/L.A.C.M.A./M.W.AA./N.F.W.A. ADDITIONAL MATERIAL SUBMITTED BY MR. LOEB Our company has been invited to present its views concerning the possibility of teletype paper procurement being placed on a term contract basis. We are opposed to this procedure and will attempt to show that it operates against the Government's best interests. Permit us to approach the matter by analyzing four separate, but related areas. DO TERM CONTRACTS REDUCE PAPER WORK? A strong argument advanced for term contracts is that they reduce paper work on the part of the Government. Is this true? Our company presently holds term contracts on computing machine paper and cash register tape for several depots. In the six weeks these contracts have been in force, we have received eight separate purchase orders. These require eight separate requisitions, eight separate inspections, eight separate receiving procedures, and eight separate voucher procedures. In addition to this, the Government is required to collect and analyze monthly reports showing the status of each of these orders and inspectors are required to prepare and submit bi-monthly reports. Both reports are new and represent additional detail work. To emphasize how ridiculous this duplication of paper work can get, we have received different orders from the same depot within three days-all requiring extended duplication. In the face of this experience, can it really be claimed that term contracts result in less paper work for the Government? When compared with this experience, the method of procuring quarterly depot by depot, on an "all or none" basis, seems a model of efficiency. While it may require some forecasting of requirements, this cost is more than offset by reduced freight costs, inspection, requisitioning, receiving, and vouchering. DO TERM CONTRACTS SHIFT BURDENS OF FORECASTING, FINANCING, AND STORAGE? One of the most serious consequences of term contracts is the shifting of responsibility and economic burden from the Government to vendors. Let us see how this works. A. Under the term contract method of procurement individual depots are not required to forecast their needs item by item. This forecasting must be attempted, then, by vendors, for the nature of our industry is such that a short time limit precludes anything other than stockpiling all items on contract. Vendors cannot buy raw materials and produce order-by-order, therefore, they must try to forecast individual depot requirements item by item. This is a job that obviously a vendor is ill-equipped to do. To indicate how impossible it is for a vendor to forecast requirements, see exhibit "A" and note the extreme variations in purchasing from period to period. B. Realizing the difficulty in forecasting, the vendor must then prepare himself to fill orders that come in-not knowing when these orders will arrive, what items will be called for, or in what quantity. To accomplish this, he must buy and pay for vast amounts of raw materials. He must manufacture and place in storage large quantities of a wide variety of items-without absolute assurance that each or any will be ordered. At this point, it should be noted that Government specifications as to finish, size, construction and pack are generally different from those of the commercial market. This makes it almost impossible to sell Government specification items commercially at a profit. It must be emphasized that the risks involved in this procedure are very, very great. Is it proper that the Government require vendors to take such risks? C. In addition to the risks, this procedure forces a large financial burden on the vendor. He has to maintain big inventories of both raw materials and finished product. He has to store them for an unknown length of time. The capital and space required are vast. Is it the Government's intent to shift this economic burden to the vendor? If so, it seems to be contrary to the well known practice of aiding some business firms with free plants, accelerated write-offs, and other means of assist ance. DO TERM CONTRACTS TEND TO ENCOURAGE SMALL BUSINESS? In discussing this aspect of the problem, the technical definition of small business (fewer than 500 employees) must be discarded. We do not know of a single firm whose number of employees involved in our industry approaches 500. Despite this, there are one or two "giants" and the remaining plants are very small, having only a few machines and a small number of employees. These small plants are generally limited in capital and storage capacity. Term contracts, however, seem to demand large amounts of both capital and storage space-in such amounts as to make it all but impossible for the small plants to bid. It seems that term contracts will eliminate from bidding all but a handful of the "giants" of the industry. This treatment of small business seems contrary to publicized Government policy. DO TERM CONTRACTS RESULT IN LOWER PRICES? It is difficult to pin-point answers to this all-important question. But it seems that the only valid approach is one of long range effect. It appears certain that there will be fewer and fewer bidders on term contracts. We believe that there were fewer bidders on the second contract for computing machine paper than on the first one. It is possible that our company will not bid on the next one, for the reasons already discussed. We believe that the reduction in number of bidders will tend to cost the Government money in the form of higher prices that need be. Let us see how this works. Our company has supplied the Government with more than $250,000.00 worth of these items in five years. Obviously had we not been low bidder on this volume, the Government would have had to pay more. Extending this idea, it can be seen that eliminating many bidders such as ourselves will result in less competition and higher prices. Our company believes that in five years, we have saved the Government no less than $7,500.00 in direct savings by having been low bidder. Indirect savings are much greater, for the records show that prices dropped drastically when our company started bidding. Who can say what will happen to prices should we stop bidding? SUMMARY A number of things seem clear: (1) It is doubtful if the Government reduces paper work with term contracts; (2) Term contracts shift a huge forecasting, financial, and storage burden to vendors-a burden so great as to eliminate all but a few bidders; (3) Term contracts operate against small business; and (4) Elimination of bidders will result in reduced competition and higher prices. We recommend, instead, a system which will avoid these pitfalls. Quarterly procurement, on an "all or none" basis for each depot, accomplishes the following: (1) It reduces total paper work; (2) It requires the Government to assume responsibility for forecasting, financing, and storage, thereby broadening the base of potential bidders; (3) A broader base of bidders tends to help small business; and (4) Lower prices will result from more competition and more economically sized shipments. DECEMBER 29, 1960. GENERAL SERVICES ADMINISTRATION, Attention: Mr. Kendall. DEAR MR. KENDALL: We wish to call to your attention that invitation FNH6N271-A-1-6-61 was circulated based on interim spec. UU-T-00110 (Navy-S&A). As we did not have any prior knowledge of the existence of this interim spec., we have not had an opportunity to comment on the proposed changes. It is our opinion that vendors' comments should be considered before applying new specifications to contract inquiries. Several provisions in the interim spec. make us extremely reluctant to bid on contracts covered by it. This is because of a lack of clarity in some instances, and what we consider to be unnecessarily stringent inspection provisions in other instances. It is our judgment that the effect of these questioned provisions are to expose vendors excessively without enhancing quality. Such risks will tend to increase costs without improving the quality of the product shipped. Following are detailed explanations of our position on these questioned provisions: 1. Paragraph 4.5 stipulates rejection if any one roll fails the tests under 4.5.2, 4.5.3, and 4.5.4: We do not consider this reasonable, but cite the requirements under 4.4 as affording adequate protection to both the Government and vendors. This provision is particularly stringent when applied to 4.5.2, which deals with yardage requirements. It is conceivable that one roll a fraction of an inch short could cause rejection of 100,000 perfect rolls. This obviously would be unsound. We suggest instead an average of random samples, within stated limits. 2. Paragraphs 4.5.3 and 4.5.4 deal with requirements without providing an objective standard. We believe it essential that a clear definition be provided together with a method of measuring so that vendors and inspectors have an objective standard to use in quality control efforts. Such a definition and standard should be a part of the spec. before vendors are asked to bid on invitations so covered. Our company is of the opinion that the best interests of the Government will be served by modifying the spec. along the lines suggested. STATEMENT JANUARY 4, 1967. No one can disagree with Mr. Griffins statement, to wit: “Our goal is to supply merchandise made in accordance with customer requirements, and we expect that material offered under terms of a supply contract will comply with the requirements of that contract. It would be difficult for a supplier to have first hand knowledge that his product complies unless he himself provides for its testing and inspection. Our quality control program serves to assure our customers that the material they have requested meets their specifications; it is not intended to take the place of the suppliers quality control program". (I might interject that on a recently completed contract, covering scores of releases, over a period of a year, each tested and certified to be in compliance by a GSA approved commercial lab, each release was completely retested by a GSA lab before release for shipment. Not once was the test by the commercial lab found to be in error. This practice was pointed out to the Commissioner, but the procedure continued for the life of the contract.) We do disagree with the implementation of this aim. Why should the government operate under different caveats than general industry. A contractor is aware of the specification covering products on which he bids, and he is aware of the penalty of supplying goods which do not comply. A "responsible bidder” indeed should, and must assure himself that he is producing specification merchandise. The method however, should be his choice, and the penalty his if he cuts corners. The government philosophy has greatly changed over the years. Form R2-298 (March 1952) GSA-Special Conditions, states under paragraph I, "The cost of testing the first sample of an order or shipment shall be borne by G.S.A." In a letter to me dated July 13, 1960, Mr. George P. Miller, Chief Specifications and Standards Branch, Standardization Division, General Services Administration, says: "It will not be necessary to assume the burden of establishing a complete laboratory. You may use any laboratory acceptable to the government, including your suppliers. Generally the mill log submitted by them will be acceptable, however, the FSS will have to confirm that data reported on mill records are verifiable in the Q.C.D. laboratories, before it can accept converted papers you may wish to offer for acceptance. Until verification is found to be generally satisfactory, your shipments may not be accepted before the Q.C.D. has approved samples for shipment. However, after the Q.C.D. has established that mill log values on lots of paper that you certify are verifiable, the lots will be accepted with only occasional verification tests." The key to the whole problem of equitable relationship, depends upon interpretation of 5(e) of Form 32, which is amplified in 5(b) of Form 1424. As recently as 4 November, 1965, Mr. H. J. McIsaac, Chief Standardization Branch, Clothing and Organic Material Division, U.S. Army Laboratories, Natick, Massachusetts, wrote me: "In accordance with provisions of 4.1 and 4.2, it is not required that the end item supplier perform the testing of the base paper component. The end item supplier is however, responsible for assuring that the components meet the specifications requirements when sampled and tested as specified in paragraph 4.2.1.1. In lieu of testing the components himself, the end item supplier may rely on certified test results as submitted by the component suppliers". GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, Washington, D.C., February 16, 1967. Mr. DONALD J. LOEB, K-C Converters, Inc., Kansas City, Mo. Dear Mr. LoEB: Reference is made to your letter of January 25, 1967, regarding sampling and testing of teletypewriter paper in roll form in accordance with Federal Specification UU-P-00547h (SA); Paper, Teletypewriter, Roll. |