B-57857, JUNE 12, 1946, 25 COMP. GEN. 859

B-57857, JUNE 12, 1946, 25 COMP. GEN. 859

ADVERTISING - SUFFICIENCY - NATION-WIDE STENOGRAPHIC SERVICES THE ACTION OF PROCUREMENT OFFICIALS IN THE MATTER OF SOLICITING BIDS FOR NATION-WIDE STENOGRAPHIC REPORTING SERVICES BY SENDING CIRCULAR LETTERS TO ONLY FOUR FIRMS AND OF DENYING ONE PROSPECTIVE BIDDER THE PRIVILEGE OF BIDDING IS SO RESTRICTIVE OF COMPETITION AS TO CONSTITUTE A VIOLATION OF THE ADVERTISING FOR BIDS REQUIREMENTS OF SECTION 3709, REVISED STATUTES, AND CREDIT WILL BE WITHHELD IN THE RESPONSIBLE OFFICER'S ACCOUNT FOR ANY PAYMENTS WHICH MAY BE MADE UNDER A PURPORTED CONTRACT AWARDED IN RESPONSE TO SUCH SOLICITATION.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, NATIONAL MEDIATION BOARD, JUNE 12, 1946:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 23, 1946, WITH ENCLOSURES, RELATIVE TO THE PROTESTED AWARD BY THE NATIONAL MEDIATION BOARD OF A CERTAIN CONTRACT FOR THE FURNISHING OF NATION-WIDE STENOGRAPHIC SERVICES FOR THE FISCAL YEAR 1947.

IT APPEARS THAT BIDS WERE OPENED MAY 9, 1946, AND THE CONTRACT WAS LET AFTER ADVERTISING BY CIRCULAR LETTERS SENT TO FOUR FIRMS, ONE OF WHICH, FRANK M. WILLIAMS AND COMPANY, DID NOT SUBMIT A BID. IN A LETTER DATED MAY 15, 1946, QUOTED IN MY LETTER OF MAY 22, 1946, TO YOU, THE ACME REPORTING COMPANY, WASHINGTON, D.C., PROTESTED THE AWARD OF THE SUBJECT CONTRACT FOR THE REASON THAT THE SOLICITATION OF BIDS FROM ONLY FOUR COMPANIES WAS RESTRICTIVE OF COMPETITION AND CONTRARY TO THE LAW IN RESPECT TO THE ADVERTISING FOR NATION-WIDE STENOGRAPHIC REPORTING SERVICES, CITING 14 COMP. GEN. 667. ALSO, IT WAS ALLEGED BY THE ACME REPORTING COMPANY THAT, ALTHOUGH IT HAD MADE A SPECIFIC REQUEST IN WRITING BEFORE THE DATE OF OPENING OF BIDS THAT IT BE FURNISHED AN INVITATION, SUCH REQUEST WAS IGNORED BY THE NATIONAL MEDIATION BOARD.

YOUR REPORT IN THE MATTER IS, IN PERTINENT PART, AS FOLLOWS:

THE NATIONAL MEDIATION BOARD HAS ALWAYS FOLLOWED THE UNIFORM PRACTICE OF ADMINISTRATIVELY CHOOSING THOSE TO WHOM TO SEND REQUESTS TO BID ON OUR REPORTING REQUIREMENTS. SINCE THE RECEIPT OF COMPLAINT FROM THE ACME REPORTING COMPANY, WE HAVE CHECKED WITH FOUR OTHER GOVERNMENT AGENCIES IN WASHINGTON AND FIND THEY FOLLOW THE SAME PRACTICE. WE HAVE ALSO READ DECISION REFERRED TO BY THE ACME COMPANY AND DO NOT THINK THE IMPROPER STIPULATIONS PRESENTED IN THAT DECISION ARE PRESENT IN THE PROPOSAL SENT OUT BY THE NATIONAL MEDIATION BOARD.

IN THE FACE OF RISING COSTS OF LABOR AND MATERIAL, THE BOARD RECEIVED THE LOWEST BID IN ITS HISTORY OF 24 CENTS PER PAGE, WHICH IS AN AVERAGE OF 51 CENTS PER PAGE BELOW THE 1946 CONTRACT, AND IN ACCEPTING THIS LOW BID THE GOVERNMENT WILL BE SAVED APPROXIMATELY $20,000 ON A LIKE VOLUME OF BUSINESS FOR 1947.

INVESTIGATION HAS BEEN MADE OF THE LOW BIDDER AND THE BOARD FEELS THAT HE IS THOROUGHLY RESPONSIBLE IN EVERY PARTICULAR. SINCE SUCH SELECTION WAS MADE AND ACTED UPON IN GOOD FAITH, IT WOULD BE INCONSISTENT FOR THE BOARD TO NOW REOPEN BIDDING FOR THE 1947 REPORTING.

SECTION 3709, REVISED STATUTES, IS AS FOLLOWS:

ALL PURCHASES AND CONTRACTS FOR SUPPLIES OR SERVICES, IN ANY OF THE DEPARTMENTS OF THE GOVERNMENT, EXCEPT FOR PERSONAL SERVICES, SHALL BE MADE BY ADVERTISING A SUFFICIENT TIME PREVIOUSLY FOR PROPOSALS RESPECTING THE SAME, WHEN THE PUBLIC EXIGENCIES DO NOT REQUIRE THE IMMEDIATE DELIVERY OF THE ARTICLES, OR PERFORMANCE OF THE SERVICE. WHEN IMMEDIATE DELIVERY OR PERFORMANCE IS REQUIRED BY THE PUBLIC EXIGENCY, THE ARTICLES OR SERVICE REQUIRED MAY BE PROCURED BY OPEN PURCHASE OR CONTRACT, AT THE PLACES AND IN THE MANNER IN WHICH SUCH ARTICLES ARE USUALLY BOUGHT AND SOLD, OR SUCH SERVICES ENGAGED, BETWEEN INDIVIDUALS.

THE FOREGOING STATUTE WAS DESIGNED TO OBTAIN FOR THE GOVERNMENT THE MOST ADVANTAGEOUS PRICES IN FULFILLING ITS REQUIREMENTS AND TO SECURE TO ANY QUALIFIED BUSINESS CONCERN AN EQUAL OPPORTUNITY FOR OBTAINING THAT BUSINESS, THEREBY ELIMINATING ANY POSSIBILITY OF CHARGES OF FAVORITISM AND COLLUSION IN THE AWARD OF GOVERNMENT CONTRACTS. THE COURTS HAVE HELD THE REQUIREMENTS OF THE STATUTE MANDATORY AND THAT ANY PURPORTED CONTRACT UNDERTAKEN WITHOUT COMPLIANCE WITH ITS PROVISIONS IS VOID. SCHNEIDER V. UNITED STATES, 19 C. CLS. 547-51; PURCELL ENVELOPE COMPANY V. UNITED STATES, 51 C. CLS. 211-14. IN THE LATTER CASE IT WAS SAID:

* * * THIS COURT HAS HELD, EXCEPT IN CERTAIN CASES OF EXIGENCY, THAT ALL CONTRACTS BETWEEN INDIVIDUALS AND THE GOVERNMENT ARE VOID UNLESS THEY ARE MADE UPON ADVERTISEMENTS FOR PROPOSALS PREVIOUSLY PUBLISHED, AND THAT A COMPLIANCE WITH SUCH STATUTES IS A CONDITION PRECEDENT, UPON THE PERFORMANCE OF WHICH ONLY CAN A BINDING CONTRACT WITH THE GOVERNMENT BE MADE BY ITS OFFICERS. IT ACTS BY ITS PUBLIC OFFICERS, AND THEIR POWERS AND DUTIES ARE PRESCRIBED AND LIMITED BY LAWS WHICH THEY MUST FOLLOW.

THE STATUTE CONTEMPLATES OBEDIENCE TO ITS TERMS IN THEIR ENTIRETY, AND THE MERE FACT THAT AN INVITATION FOR BIDS HAS BEEN COMMUNICATED TO A NUMBER OF POSSIBLE BIDDERS IS NOT NECESSARILY SUFFICIENT TO ESTABLISH COMPLIANCE WITH THE REQUIREMENTS OF THE LAW. AS YOU STATE, THERE IS NOT INVOLVED IN THIS CASE THE IMPROPER CONTRACT STIPULATIONS CONSIDERED IN DECISION OF THIS OFFICE DATED MARCH 1, 1935, 14 COMP. GEN. 667. HOWEVER, IN ADDITION TO THE OBJECTIONABLE FEATURES OF THE SPECIFICATIONS TO WHICH ATTENTION THERE WAS CALLED, THERE ALSO WAS CONSIDERED THE REQUIREMENT THAT THE NEEDS OF THE SERVICE BE SO ADVERTISED AS TO REASONABLY ASSURE THE GOVERNMENT THE BENEFITS OF FULL AND FREE COMPETITION. IN THAT CASE, THERE WERE NINE BIDDERS UNDER A PROPOSAL COVERING NATION-WIDE STENOGRAPHIC REPORTING SERVICES, AND, AFTER OBSERVING THAT THE THEN CURRENT CLASSIFIED TELEPHONE DIRECTORY OF THE CITY OF WASHINGTON, D.C., LISTED APPROXIMATELY 70 STENOGRAPHIC REPORTERS, INCLUDING INDIVIDUALS, FIRMS, AND CORPORATIONS, THE COMPTROLLER GENERAL ADVISED THE ADMINISTRATIVE OFFICE INVOLVED THAT "EVERY REASONABLE EFFORT SHOULD BE MADE TO ADVISE LEADING STENOGRAPHIC REPORTERS NOT ONLY IN WASHINGTON, BUT ELSEWHERE THROUGHOUT THE COUNTRY, OF THE INVITATION FOR PROPOSALS.'

IN CONSIDERING THE PRESENT CASE, PARTICULARLY THE FACT THAT BIDS WERE SOLICITED FROM ONLY FOUR FIRMS, AND THE FACT, IF IT BE A FACT, THAT AT LEAST ONE PROSPECTIVE BIDDER WAS DENIED THE PRIVILEGE OF COMPETING FOR THE CONTRACT, THE CONCLUSION SEEMS INESCAPABLE THAT THE ACTION OF THE PROCUREMENT OFFICIALS OF THE NATIONAL MEDIATION BOARD IN THE MATTER WAS SO RESTRICTIVE OF COMPETITION AS TO CONSTITUTE A VIOLATION OF THE PROVISIONS OF SECTION 3709, REVISED STATUTES. THE FACT THAT OTHER GOVERNMENT AGENCIES MAY HAVE ADOPTED A SIMILAR POLICY OF SOLICITING BIDS FOR STENOGRAPHIC REPORTING SERVICES FROM A CHOSEN FEW SOURCES IS NOT FOR CONSIDERATION. NOR IS THERE FOR CONSIDERATION THE FACT THAT THE PURPORTED CONTRACT MIGHT PROVE MORE FAVORABLE TO THE GOVERNMENT THAN THE ONE COVERING THE FISCAL YEAR 1946. THERE CAN BE NO DOUBT THAT THE PRACTICE SUCH AS HERE FOLLOWED DEPRIVES THE GOVERNMENT AND QUALIFIED CONTRACTORS OF THE PROTECTION WHICH SECTION 3709, REVISED STATUTES, WAS DESIGNED TO AFFORD.

ACCORDINGLY, ASSUMING THE ABOVE-STATED FACTS TO BE TRUE, SINCE THE COURSE FOLLOWED IN ADVERTISING FOR BIDS IN THE INSTANT CASE CONSTITUTES A MANIFEST CONTRAVENTION OF SECTION 3709, REVISED STATUTES, YOU ARE ADVISED THAT CREDIT WILL BE WITHHELD IN THE RESPONSIBLE OFFICER'S ACCOUNT FOR ANY PAYMENTS MADE UNDER THE CONTRACT AS AWARDED.