B-123491, APRIL 27, 1955, 34 COMP. GEN. 551

B-123491, APRIL 27, 1955, 34 COMP. GEN. 551

ADVERTISING - NECESSITY OR NONNECESSITY - LEASING OF VEHICLES THE HIRE OF VEHICLES UNDER AN AGREEMENT NEGOTIATED WITHOUT COMPETITIVE BIDDING ON THE BASIS THAT THE LESSOR WAS THE ONLY SOURCE OF SUPPLY, WHEN THERE ARE AT LEAST THREE OTHER CONCERNS WHICH LEASE VEHICLES ON A NATIONWIDE SCALE, IS CONTRARY TO THE ADVERTISING REQUIREMENTS OF SECTION 3709, REVISED STATUTES, AND SUCH AGREEMENT IS THEREFORE VOID.

COMPTROLLER GENERAL CAMPBELL TO THE SECRETARY OF THE INTERIOR, APRIL 27, 1955:

OUR ATTENTION HAS BEEN DIRECTED TO AN " AGREEMENT BY AND BETWEEN D. L. PETERSON AND THE UNITED STATES DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS, FOR THE LEASING OF VEHICLES," CONTRACT NO. 14-20-650 186, ENTERED INTO BY THE ACTING COMMISSIONER, BUREAU OF INDIAN AFFAIRS, ON SEPTEMBER 10, 1954.

THE AGREEMENT WAS NEGOTIATED WITHOUT COMPETITIVE BIDDING ON THE BASIS THAT THE LESSOR WAS THE ,ONLY SOURCE OF SUPPLY" AND, THEREFORE, CAME WITH EXCEPTION (3) OF SECTION 3709, REVISED STATUTES, AS AMENDED, 41 U.S.C. 5. SINCE IT IS ADMITTED THAT THERE ARE AT LEAST THREE OTHER CONCERNS WHICH LEASE VEHICLES ON A NATIONWIDE SCALE, IT SEEMS EVIDENT THAT THE INSTANT LESSOR CANNOT BE CONSIDERED AS THE ONLY SOURCE OF SUPPLY.

IN RESPONSE TO AN INFORMAL REQUEST FOR ANY FURTHER JUSTIFICATION FOR NONCOMPLIANCE WITH THE ADVERTISING REQUIREMENTS OF SECTION 3709, REVISED STATUTES, THE ASSISTANT COMMISSIONER, BUREAU OF INDIAN AFFAIRS, BY LETTER OF APRIL 18, 1955, CONTENDS THAT ADVERTISING IN THIS CASE WOULD SERVE NO USEFUL PURPOSE. REFERENCE IS MADE TO A FEW DECISIONS OF THE ACCOUNTING OFFICERS AND OPINIONS OF THE ATTORNEY GENERAL WHEREIN IT WAS CONCLUDED THAT ADVERTISING WOULD SERVE NO USEFUL PURPOSE. IN THOSE CASES, IT WAS CLEAR BEYOND ANY REASONABLE DOUBT THAT ADVERTISING WOULD BE A FRUITLESS EFFORT. FURTHERMORE, IN MOST OF THOSE CASES, THERE ACTUALLY HAD BEEN FORMAL ADVERTISING WITH NO RESULTS. IN THE PRESENT CASE THERE WAS NO ADMINISTRATIVE DETERMINATION OF THE CONDITIONS UNDER WHICH THE GOVERNMENT DESIRED TO LEASE THE VEHICLES AND A SOLICITATION OF BIDS ON THAT BASIS.

THE COURTS AND ACCOUNTING OFFICERS OF THE GOVERNMENT HAVE FREQUENTLY AND CONSISTENTLY HELD THAT SECTION 3709, REVISED STATUTES, WAS DESIGNED TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT BUSINESS, TO SECURE TO THE GOVERNMENT THE BENEFITS WHICH FLOW FROM COMPETITION, TO PREVENT UNJUST FAVORITISM BY REPRESENTATIVES OF THE GOVERNMENT IN MAKING PURCHASES FOR PUBLIC ACCOUNT, AND TO PREVENT COLLUSION AND FRAUD IN PROCURING SUPPLIES OR LETTING CONTRACTS.

COMPETITION IS ADMITTEDLY AVAILABLE IN THE HIRING OF VEHICLES. CONSEQUENTLY, THE PURPOSES OF THE ADVERTISING STATUTE CAN BE ACCOMPLISHED. PRICE ALONE IS NOT DETERMINATIVE OF WHETHER THERE SHOULD OR SHOULD NOT BE ADVERTISING AND, EVEN IF IT WERE ESTABLISHED THAT LOWER PRICES WERE OBTAINABLE BY THE PROCEDURE NOW IN EFFECT, THAT WOULD NOT, IN ITSELF, JUSTIFY A DISREGARD OF THE LEGISLATIVE MANDATE THAT "ALL PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES," SUBJECT TO CERTAIN ENUMERATED EXCEPTIONS,"BE MADE AFTER ADVERTISING.'

SINCE THIS LEASE WAS NEGOTIATED WITHOUT COMPETITIVE BIDDING CONTRARY TO THE PROVISIONS OF SECTION 3709, REVISED STATUTES, WE HAVE NO ALTERNATIVE BUT TO CONSIDER IT VOID. ACCORDINGLY, ALL SERVICES OR TRANSACTIONS UNDER THE LEASE SHOULD BE TERMINATED IMMEDIATELY.