A-17207, MARCH 3, 1927, 6 COMP. GEN. 563

A-17207, MARCH 3, 1927, 6 COMP. GEN. 563

ADVERTISING - BIDS - AIR MAIL SERVICE AN ADVERTISING FOR BIDS FOR RATES FOR AIR MAIL CARRYING UPON DEFINITELY STATED WEIGHTS, WITH SPECIFIED LESS-PERCENTAGES OF BASIC BID FOR SPECIFIED GREATER WEIGHTS, FURNISHES A BASIS OF BIDDING OPEN TO ALL, CERTAIN AND EXACT IN ITS SUBJECT MATTER, AND, HAVING REGARD TO THE NEWNESS OF THE UNDERTAKING, APPEARS TO BE IN THE INTEREST OF THE UNITED STATES. A NOTICE OR CIRCULAR TO BE ATTACHED TO A TYPEWRITTEN ADVERTISEMENT FOR BIDS, WHICH IS TO BE DISPLAYED IN POST OFFICES, SHOULD HAVE ITS SUBSTANCE EMBODIED IN THE ADVERTISEMENT, ALTHOUGH IT WOULD BE PROPER TO CALL SPECIAL ATTENTION THERETO BY SEPARATE ATTACHED NOTICE.

COMPTROLLER GENERAL MCCARL TO THE SECOND ASSISTANT POSTMASTER GENERAL, MARCH 3, 1927:

I HAVE YOUR LETTER OF FEBRUARY 11, 1927, AS FOLLOWS:

IN CONNECTION WITH THE POLICY OF THIS DEPARTMENT TO TURN OVER TO PRIVATE OPERATION THE GOVERNMENT-OPERATED AIR-MAIL SERVICE BETWEEN NEW YORK AND CHICAGO, I AM ENCLOSING HEREWITH FOR YOUR PERUSAL AND SUCH COMMENT AS YOU MAY DESIRE TO MAKE, A COPY OF THE ADVERTISEMENT, TOGETHER WITH A SAMPLE PROPOSAL BLANK AND SAMPLE CIRCULAR.

WITH FURTHER REFERENCE TO THE ABOVE, I WOULD LIKE TO ASK THAT YOU BE SO KIND AS TO FURNISH AN INTERPRETATION OF WHETHER OR NOT THE POSTMASTER GENERAL HAS THE PREFERENCE OF MAKING AN AWARD OF CONTRACT FOR THE ABOVE SERVICE WITHOUT THE FORMALITY OF ISSUING AN ADVERTISEMENT. THIS QUESTION HAS PERHAPS SOME MERIT ATTACHED TO IT BY REFERENCE TO THE WORDING OF PUBLIC NO. 359, 68TH CONGRESS, ACT OF FEBRUARY 2, 1925, SEC. 4, READING IN PART,"THAT THE POSTMASTER GENERAL IS AUTHORIZED TO CONTRACT WITH ANY INDIVIDUAL, FIRM, OR CORPORATION * * *; " AND ALSO WITH PART OF SEC. 5 OF THE AFOREMENTIONED LAW, READING,"THAT THE POSTMASTER GENERAL MAY MAKE SUCH RULES, REGULATIONS, AND ORDERS AS MAY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ACT.'

WITH REFERENCE TO YOUR REQUEST FOR COMMENTS ON THE ADVERTISEMENT, PROPOSAL BLANK, AND CIRCULAR, I SUBMIT THE FOLLOWING:

I WOULD SUGGEST THAT IN THE NEXT TO LAST PARAGRAPH ON PAGE 2 AND AT THE BOTTOM OF PAGE 3 OF THE ADVERTISEMENT THE WORDS "ANY AND" BE INSERTED BEFORE THE WORD "ALL," SO AS TO RESERVE THE RIGHT TO REJECT ANY AND ALL BIDS.

UNLESS THERE IS SPECIFIC STATUTORY AUTHORITY FOR THE DEPARTMENT TO IMPOSE FINES OR MAKE DEDUCTIONS FOR DELAYS OF A CONTRACTOR IN DELIVERY OF MAIL, I WOULD SUGGEST THAT THE EIGHTH PARAGRAPH ON PAGE 4 OF THE ADVERTISEMENT INDICATE DEFINITELY THE CIRCUMSTANCES UNDER WHICH DEDUCTIONS WILL BE MADE FOR DELAYS AND THE AMOUNT OF SUCH DEDUCTIONS.

I WOULD SUGGEST THAT THE NINTH PARAGRAPH ON PAGE 4 OF THE ADVERTISEMENT BE OMITTED. IF THERE BE AUTHORITY OF LAW FOR SUBLETTING SUCH CONTRACTS THIS PARAGRAPH IS SUPERFLUOUS, AND IF THERE BE NO SUCH AUTHORITY IT IS MISLEADING.

I WOULD SUGGEST THAT, IN THE PROPOSAL FORM,"AS AMENDED BY THE ACT OF JUNE 3, 1926," BE INSERTED AFTER THE REFERENCE TO THE ACT OF FEBRUARY 2, 1925, AND ALSO THAT THE STATEMENT AS TO THE RATE BE MADE MORE SPECIFIC; THAT IS, AS TO WHETHER THE RATE PER POUND IS PER MILE OR PER TRIP, AND IF PER TRIP, AS TO WHETHER THE SAME RATE IS TO BE CHARGED FOR MAIL CARRIED ALL THE WAY BETWEEN NEW YORK AND CHICAGO AS FOR MAIL TAKEN ON OR PUT OFF AT INTERMEDIATE POINTS ON SAID ROUTE.

AS THE PROVISIONS OF THE SECOND PARAGRAPH OF THE CIRCULAR CONSTITUTE A NECESSARY CONDITION OF ANY BID, IT WOULD SEEM ADVISABLE TO INSERT SAID PROVISIONS IN THE ADVERTISEMENT.

I WOULD ALSO CALL ATTENTION THAT IN THE ADVERTISEMENT UNDER THE HEADING "THE CONTRACT WILL BE MADE ON THE FOLLOWING BASIS," PAGE 3, THERE APPEARS A CLAUSE IN CONNECTION WITH THE RIGHT TO REJECT BIDS "TO AWARD THE CONTRACT TO THAT BIDDER THOUGHT TO BE BEST SUITED FOR THE CARRYING ON OF THE CONTRACT IN QUESTION.' THERE IS A DISCRETION IN THE POSTMASTER GENERAL IN AWARDING BIDS, BUT IT IS A LEGAL DISCRETION AND MUST BE BASED UPON TANGIBLE FACTS IN SUBSTANCE PRESENTING NO ALTERNATIVE TO ACCEPTING THE PARTICULAR BID IN THE INTERESTS OF THE UNITED STATES, AND I MAY SUGGEST THAT THE QUOTED CLAUSE IS TOO INDEFINITE AND GENERAL TO FORM A BASIS UPON WHICH AN AWARD MAY BE MADE AND IT SHOULD BE MODIFIED OR OMITTED FROM THE ADVERTISEMENT FOR BIDS.

THE ADVERTISEMENT WHICH HAS BEEN GIVEN CONSIDERATION HERE IS IN TYPEWRITTEN FORM FOR DISPLAY AT POST OFFICES. THERE APPEARS ALSO A SEPARATE TYPEWRITTEN NOTICE WHICH IT IS UNDERSTOOD IS TO BE ATTACHED TO THE ADVERTISEMENT, WHICH STATES THAT AN ADVERTISEMENT HAS BEEN ISSUED INVITING PROPOSALS FOR THE TRANSPORTATION OF AIR MAIL UNDER CONTRACT BETWEEN CERTAIN POINTS AND THAT "EVERY BIDDER MUST STATE THE RATE AT WHICH HE WILL TRANSPORT UP TO AND INCLUDING 1,500 LBS. EACH CALENDAR DAY, WITH THE UNDERSTANDING THAT AS THE POUNDAGE INCREASES FROM THIS FIGURE ON, THE RATE PAID HIM WILL DECREASE AS PER THE FOLLOWING SCALE. NO BID WILL BE CONSIDERED THAT DOES NOT COMPLY WITH THIS REQUIREMENT; 1,501 LBS. TO 2,000 LBS., LESS 5 PERCENT OF BASIC BID; 2,001 LBS TO 2,500 LBS., LESS 10 PERCENT OF BASIC BID; 2,501 LBS. TO 3,000 LBS., LESS 15 PERCENT OF BASIC BID; 3,001 LBS. TO 3,500 LBS., LESS 20 PERCENT OF BASIC BID; 3,501 LBS. TO 4,000 LBS., LESS 25 PERCENT OF BASIC BID; 4,001 LBS. TO 4,500 LBS., LESS 30 PERCENT OF BASIC BID; 4,501 LBS. TO 5,000 LBS., LESS 35 PERCENT OF BASIC BID; 5,001 LBS. AND UPWARD, LESS 40 PERCENT OF BASIC BID.'

TREATING THIS SEPARATE SHEET AS A NOTICE, ITS SUBSTANCE, PARTICULARLY WITH RESPECT TO THE FOREGOING, IS SUCH THAT I MAY SUGGEST IT SHOULD BE EMBODIED IN THE ADVERTISEMENT, ALTHOUGH PROPER ENOUGH TO ALSO CALL SPECIFIC ATTENTION THERETO BY THE SEPARATE NOTICE. THE PLAN SET FORTH WOULD OPERATE TO FURNISH A BASIS OF BIDDING OPEN TO ALL, AND CERTAIN AND DEFINITE IN ITS SUBJECT MATTER. HAVING REGARD TO THE NEWNESS OF THE UNDERTAKING, IT WOULD APPEAR TO BE IN THE INTEREST OF THE UNITED STATES SO THAT AS THE SERVICE GROWS THE BENEFITS WILL ACCRUE TO THE UNITED STATES AS WELL AS TO THE CONTRACTOR, AND I SEE NOTHING THEREIN IN CONFLICT WITH THE LAW.

I HAVE RECEIVED FROM THE POSTMASTER GENERAL FOR MY DECISION THE QUESTION REFERRED TO IN THE SECOND PARAGRAPH OF YOUR LETTER, WHETHER THE POSTMASTER GENERAL MAY AWARD A CONTRACT FOR AIR MAIL SERVICE WITHOUT ADVERTISING. VIEW OF THAT SUBMISSION THE QUESTION WAS ANSWERED IN A SEPARATE DECISION OF MARCH 1, 1927, 6 COMP. GEN. 557, TO THE POSTMASTER GENERAL.