A-50815, SEPTEMBER 7, 1933, 13 COMP. GEN. 76

A-50815, SEPTEMBER 7, 1933, 13 COMP. GEN. 76

CONTRACTS - SPECIFICATIONS - MILK LICENSES AND AGREEMENTS ADVERTISED SPECIFICATIONS AND CONTRACTS FOR THE PURCHASE OF MILK IN THE CHICAGO MILK SHED AREA MAY CONTAIN REQUIREMENTS THAT THE CONTRACTOR SHALL COMPLY WITH THE LICENSE AND MILK SHED AGREEMENT FOR THE CHICAGO AREA APPROVED BY THE SECRETARY OF AGRICULTURE, AS PROVIDED IN THE ACT OF MAY 12, 1933, 48 STAT. 35, AND THAT IN EVENT OF VIOLATION THEREOF THE CONTRACT SHALL BE CANCELED AND THE CONTRACTOR AND HIS SURETY SHALL BE LIABLE FOR ANY EXCESS COST OCCASIONED THE UNITED STATES THROUGH PURCHASE OF THE MILK ELSEWHERE.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, SEPTEMBER 7, 1933:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 30, 1933, AS FOLLOWS:

PURSUANT TO THE AGRICULTURAL ADJUSTMENT ACT, APPROVED MAY 12, 1933, THE SECRETARY OF AGRICULTURE, ON JULY 28, 1933, ISSUED A LICENSE FOR MILK--- CHICAGO MILK SHED--- EFFECTIVE ON AND AFTER 12:01 P.M. EASTERN STANDARD TIME AUGUST 1, 1933.

I HAVE THE HONOR TO REQUEST YOUR ADVICE (1) WHETHER THE VETERANS' ADMINISTRATION MAY ACCEPT BIDS FOR THE DELIVERY OF MILK AND CREAM AT VETERANS' ADMINISTRATION HOSPITALS WITHIN SAID AREA AT PRICES LESS THAN THE WHOLESALE PRICE SCHEDULE AS SET FORTH IN LICENSE SERIES--- LICENSE NO. 1 (FORM M-2/--- ISSUED BY THE AGRICULTURAL ADJUSTMENT ADMINISTRATION OF THE DEPARTMENT OF AGRICULTURE, AND (2) WHETHER IN ADVERTISING FOR BIDS IT WOULD BE PROPER TO INSERT THE FOLLOWING:

"BIDS NOT IN CONFORMITY WITH PROVISIONS OF MARKETING AGREEMENT FOR MILK AND CREAM, CHICAGO MILK SHED, PROMULGATED BY THE SECRETARY OF AGRICULTURE UNDER AUTHORITY OF THE AGRICULTURAL ADJUSTMENT ACT OF MAY 12, 1933, AS AMENDED, WILL NOT BE CONSIDERED.'

THE SPECIFICATIONS FOR BIDS FOR FURNISHING MILK AND CREAM TO THE VETERANS' ADMINISTRATION HOSPITAL IN CHICAGO SHOULD CONTAIN A NOTIFICATION TO ALL BIDDERS SUBSTANTIALLY AS FOLLOWS:

THE ATTENTION OF ALL BIDDERS IS INVITED TO THE FACT THAT THE CONTRACT TO BE ENTERED INTO FOR DELIVERY OF THE MILK AND CREAM TO THE VETERANS' ADMINISTRATION HOSPITALS, AS HEREIN STATED, WILL CONTAIN A STIPULATION THAT: "THE CONTRACTOR SHALL COMPLY WITH ALL PROVISIONS OF THE MARKETING AGREEMENT FOR MILK, CHICAGO MILK SHED, ENTERED INTO BETWEEN THE SECRETARY OF AGRICULTURE AND CERTAIN CONTRACTING PRODUCERS AND CONTRACTING DISTRIBUTORS AND LICENSE FOR MILK--- CHICAGO MILK SHED -- ISSUED JULY 28, 1933, BY THE SECRETARY OF AGRICULTURE, EFFECTIVE AUGUST 1, 1933, WITHOUT REGARD TO WHETHER THE CONTRACTOR IS HIMSELF A PARTY TO THE SAID MARKETING AGREEMENT FOR MILK, CHICAGO MILK SHED. IF THE CONTRACTOR FAILS TO COMPLY WITH THE PROVISION OF THE MARKETING AGREEMENT FOR MILK, CHICAGO MILK SHED, AND LICENSE FOR MILK, CHICAGO MILK SHED, THE GOVERNMENT MAY BY WRITTEN NOTICE TO THE CONTRACTOR TERMINATE THE CONTRACTOR'S RIGHT TO PROCEED WITH THE CONTRACT AND PURCHASE IN THE OPEN MARKET, OR OTHERWISE, THE UNDELIVERED PORTION OF THE MILK AND CREAM COVERED BY THIS CONTRACT, AND THE CONTRACTOR AND HIS SURETY SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY: PROVIDED, THAT THE DETERMINATION OF THE ADMINISTRATOR OF VETERANS' AFFAIRS OF ANY FAILURE OF THE CONTRACTOR TO COMPLY WITH THE TERMS OF THE MARKETING AGREEMENT FOR MILK, CHICAGO MILK SHED, AND THE LICENSE FOR MILK, CHICAGO MILK SHED, SHALL BE FINAL AND CONCLUSIVE ON THE CONTRACTOR.'

THE FOREGOING PROVISIONS TO BE INSERTED IN THE ADVERTISED SPECIFICATIONS FOR PROPOSALS, WITH CORRESPONDING STIPULATIONS IN THE CONTRACT TO BE ENTERED INTO WITH THE ACCEPTED BIDDER, ARE SUGGESTED IN LIEU OF THE ONE STATED IN YOUR LETTER OF AUGUST 30, 1933, FOR THE REASON THAT IN THE INTEREST OF UNIFORMITY THE PROCEDURE FOR PURCHASING MILK AND CREAM SHOULD FOLLOW SUBSTANTIALLY THE PROCEDURE STATED IN EXECUTIVE ORDER NO. 6246,DATED AUGUST 10, 1933, FOR PURCHASING OTHER SUPPLIES. SEE DECISION DATED AUGUST 31, 1933 (A-50713), 13 COMP. GEN. 65. ALSO, THE ADVERTISED SPECIFICATIONS SHOULD CLEARLY STATE THE REQUIREMENTS TO BE MET BY THE CONTRACTOR AND ENFORCED BY THE GOVERNMENT SO THAT BIDS MAY BE SUBMITTED ACCORDINGLY, AND THE REQUIREMENT SHOULD BE CONTAINED IN THE CONTRACT FOR ENFORCEMENT.

CONTRACTORS WITH THE UNITED STATES FOR DELIVERY OF MILK AND CREAM IN THE AREA IN QUESTION SHOULD COMPLY WITH THE MARKETING AGREEMENT FOR MILK AND THE LICENSE ISSUED BY THE SECRETARY OF AGRICULTURE, AND PROVISION IS MADE IN THE LICENSE FOR INSPECTION, ETC., BY THE SECRETARY OF AGRICULTURE, OR HIS DULY AUTHORIZED REPRESENTATIVE, IN ORDER TO DETERMINE WHETHER THERE HAS BEEN SUCH COMPLIANCE, ALL IN ACCORDANCE WITH THE AUTHORITY ON HIM CONFERRED IN THE ACT OF MAY 12, 1933, 48 STAT. 35. SEE ECONOMY DAIRY CO., INC., V. WALLACE, SECRETARY OF AGRICULTURE, EQUITY NO. 50658, AND BECK V. WALLACE, SECRETARY OF AGRICULTURE, EQUITY NO. 50659, DECIDED AUGUST 29, 1933, BY THE SUPREME COURT OF THE DISTRICT OF COLUMBIA, REFUSING TO GRANT INJUNCTION AND DISMISSING THE BILLS OF COMPLAINT BROUGHT TO RESTRAIN THE ENFORCEMENT OF THE LICENSE AND AGREEMENT IN QUESTION FOR THE CHICAGO AREA. SUCH DETERMINATIONS MADE BY THE SECRETARY OF AGRICULTURE OR HIS DULY AUTHORIZED REPRESENTATIVES OF ANY FACTS RESPECTING VIOLATIONS OF THE LICENSE AND MILK AGREEMENTS PRESUMABLY WILL BE AVAILABLE TO THE ADMINISTRATOR OF VETERANS' AFFAIRS SUPPLEMENTED, IF NEED BE, BY SUCH FURTHER FACTS AS MAY BE DEEMED NECESSARY OR DESIRABLE.