A-51737, NOVEMBER 29, 1933, 13 COMP. GEN. 159

A-51737, NOVEMBER 29, 1933, 13 COMP. GEN. 159

CONTRACTS - CODES OF FAIR COMPETITION - COMPLIANCE UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, CONTRACTS FOR SUPPLYING THE NEEDS OF THE VARIOUS ACTIVITIES OF THE GOVERNMENT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY LAW, ARE REQUIRED TO BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER AFTER PROPER ADVERTISING. SUCH CONTRACTS MAY THE PERFORMANCE THEREOF AND TO THE ACTION TO BE TAKEN IN THE EVENT OF NONCOMPLIANCE THEREWITH, BUT THE APPLICABLE APPROPRIATION WOULD NOT BE AVAILABLE FOR PAYMENTS UNDER A CONTRACT AWARDED TO OTHER THAN THE LOWEST RESPONSIBLE BIDDER, BECAUSE OF ANY ASSUMPTION OR ADMINISTRATIVE DETERMINATION THAT THE PRICE QUOTED BY THE LOW BIDDER WAS SO LOW THAT THE BIDDER VIOLATED A CODE IN SUBMITTING SUCH BID. A BID AS MADE IS THE RESPONSIBILITY OF THE BIDDER AND THE QUESTION OF WHETHER A BIDDER IN SUBMITTING ITS BID VIOLATED SOME CODE APPROVED PURSUANT TO THE PROVISIONS OF SECTION 3 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 196, AND THEREBY BECAME SUBJECT TO THE FINE PRESCRIBED IN PARAGRAPH (F) OF SAID SECTION IS FOR JUDICIAL DETERMINATION AND NOT FOR CONSIDERATION BY THE PURCHASING OR CONTRACTING OFFICER IN THE AWARDING OF A CONTRACT. IF A SITUATION WITH RESPECT TO THE APPLICABILITY OF ANY CODE PROVISION HAS SO CHANGED SINCE THE DATE OF OPENING OF THE BIDS, THAT ANY OF THE BIDDERS MAY FEEL THAT A CONTRACT AWARDED NOW ON THE BASIS OF ITS BID AS THEN SUBMITTED WOULD INVOLVE A VIOLATION OF ANY PROVISION OF THE APPLICABLE CODE, SUCH BID MAY BE WITHDRAWN, OR ALL BIDS MAY BE REJECTED AND THE GOVERNMENT'S NEEDS READVERTISED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, NOVEMBER 29, 1933:

I HAVE YOUR LETTER OF NOVEMBER 23, 1933, AS FOLLOWS:

UNDER DATE OF NOVEMBER 4, IN RESPONSE TO YOUR LETTER OF OCTOBER 26, 1933, (A-51737), I TRANSMITTED TO YOU THE FACTS AND CIRCUMSTANCES REGARDING A PROPOSED BID OF THE NORTHWEST MOTOR COMPANY OF BETHESDA, MARYLAND, UNDER PROPOSAL U.S.D.A. NO. 5155.

UNDER DATE OF NOVEMBER 10, YOU ADVISED ME THAT UNTIL IT IS ESTABLISHED THAT ONE SUBJECT TO A DULY APPROVED CODE OF FAIR COMPETITION HAS VIOLATED ITS PROVISIONS, IT IS TO BE ASSUMED THAT THE PROVISIONS OF THE CODE WILL BE DULY OBSERVED. CONFORMABLY WITH YOUR DECISION, THE MATTER WAS SUBMITTED TO THE ADMINISTRATOR OF THE NATIONAL RECOVERY ADMINISTRATION FOR ADVICE AS TO WHETHER THE FORD MOTOR COMPANY HAD VIOLATED ANY PROVISIONS OF THE CODE OF FAIR COMPETITION FOR THE AUTOMOBILE MANUFACTURING INDUSTRY.

I AM NOW IN RECEIPT OF A LETTER FROM THE ADMINISTRATOR, DATED NOVEMBER 15, IN WHICH THE DEPARTMENT IS ADVISED THAT TO THE EXTENT OF THE ADMINISTRATION'S INFORMATION, THE FORD MOTOR COMPANY HAS, SAVE IN RESPECT OF CERTAIN TECHNICAL PARTICULARS WHICH ARE CONSIDERED IMMATERIAL, COMPLIED SATISFACTORILY WITH THE CODE OF FAIR COMPETITION FOR THE AUTOMOBILE MANUFACTURING INDUSTRY. TO THAT EXTENT THE DEPARTMENT WOULD APPEAR TO BE AUTHORIZED, UNDER YOUR DECISION, TO AWARD THE BID TO THE NORTHWEST MOTOR COMPANY OF BETHESDA, MARYLAND, EXCEPT FOR THE FACT THAT THE ADMINISTRATOR NOW RAISES THE FURTHER QUESTION AS TO THE PROBABLE VIOLATION BY THE NORTHWEST MOTOR COMPANY OF ARTICLE IV B, SECTIONS 1 AND 2 OF THE MOTOR RETAIL CODE, FOR THE REASON THAT THE BID OF THE NORTHWEST MOTOR COMPANY IS PROBABLY BELOW THE MINIMUM SET BY THE MOTOR VEHICLE RETAIL CODE. IN VIEW OF THE QUESTION NOW RAISED, I HAVE TO REQUEST THAT YOU ADVISE ME WHETHER I AM AUTHORIZED TO AWARD THE BID TO THE NORTHWEST MOTOR COMPANY OF BETHESDA, MARYLAND, IF THAT COMPANY'S BID IS IN FACT BELOW THE MINIMUM SET BY THE MOTOR VEHICLE RETAIL CODE.

THE QUESTION WHICH YOU STATE HAS BEEN RAISED BY THE ADMINISTRATOR FOR INDUSTRIAL RECOVERY IS NOT FOR ADMINISTRATIVE CONSIDERATION IN THE AWARDING OF A CONTRACT. THE BID AS MADE IS A RESPONSIBILITY OF THE BIDDER. UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, CONTRACTS FOR SUPPLYING THE NEEDS OF THE VARIOUS ACTIVITIES OF THE GOVERNMENT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY LAW, ARE REQUIRED TO BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER AFTER PROPER ADVERTISING; AND WHILE SUCH CONTRACTS MAY CONTAIN SUITABLE PROVISIONS RELATIVE TO COMPLIANCE WITH APPLICABLE CODES IN THE PERFORMANCE THEREOF AND TO THE ACTION TO BE TAKEN UNDER THE CONTRACT IN THE EVENT OF NONCOMPLIANCE THEREWITH, THE APPLICABLE APPROPRIATION WOULD NOT BE AVAILABLE FOR PAYMENTS UNDER A CONTRACT AWARDED TO OTHER THAN THE LOWEST RESPONSIBLE BIDDER BECAUSE OF ANY ASSUMPTION OR ADMINISTRATIVE DETERMINATION THAT THE PRICE QUOTED BY THE LOW BIDDER WAS SO LOW THAT THE BIDDER VIOLATED A CODE IN SUBMITTING SUCH BID.

THE QUESTION AS TO WHETHER A BIDDER IN SUBMITTING ITS BID VIOLATED SOME CODE APPROVED PURSUANT TO THE PROVISIONS OF SECTION 3 OF THE NATIONAL INDUSTRIAL RECOVERY ACT AND THEREBY BECAME SUBJECT TO THE FINE PRESCRIBED IN PARAGRAPH (F) OF SAID SECTION IS FOR JUDICIAL DETERMINATION AND NOT FOR CONSIDERATION BY THE PURCHASING OR CONTRACTING OFFICER IN THE AWARDING OF A CONTRACT.

IF THE SITUATION WITH RESPECT TO THE APPLICABILITY OF ANY CODE PROVISION HAS SO CHANGED SINCE OCTOBER 21, 1933, THE DATE OF OPENING OF THE BIDS IN THE INSTANT MATTER, THAT ANY OF THE BIDDERS MAY FEEL THAT A CONTRACT AWARDED NOW ON THE BASIS OF ITS BID AS THEN SUBMITTED WOULD INVOLVE A VIOLATION OF ANY PROVISION OF THE APPLICABLE CODE, SUCH BID MAY BE WITHDRAWN, OR BETTER, ALL BIDS SHOULD BE REJECTED AND THE GOVERNMENT'S NEEDS READVERTISED.