A-11757, NOVEMBER 5, 1925, 5 COMP. GEN. 330

A-11757: Nov 5, 1925

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ADVERTISING - ACCEPTANCE OF OTHER THAN THE LOWEST BID - QUALITY THE ACCEPTANCE OF OTHER THAN THE LOWEST BID IS NOT AUTHORIZED SIMPLY BECAUSE THE SUPPLIES OR MATERIALS OFFERED ARE OF A BETTER QUALITY THAN THOSE OFFERED BY THE LOWEST BIDDER. UNLESS QUALITY WAS MADE THE DETERMINING FACTOR IN THE ACCEPTANCE OR REJECTION OF THE BIDS AND IT WAS SO STATED. THE PROPOSALS SPECIFYING THE QUALITY REQUIRED FOR GOVERNMENT NEEDS IN ORDER THAT ALL BIDDERS MAY HAVE EQUAL OPPORTUNITY TO OFFER SUPPLIES OR MATERIALS WHICH MEET THE SPECIFICATIONS. 1925: I HAVE YOUR LETTER OF OCTOBER 28. SPECIFYING THAT THE MATERIAL WAS TO BE NOT LESS THAN THREE-PLY. FOURTEEN PROPOSALS WERE RECEIVED AT PRICES RANGING FROM 13 3/4 CENTS TO 19 1/2 CENTS PER FOOT.

A-11757, NOVEMBER 5, 1925, 5 COMP. GEN. 330

ADVERTISING - ACCEPTANCE OF OTHER THAN THE LOWEST BID - QUALITY THE ACCEPTANCE OF OTHER THAN THE LOWEST BID IS NOT AUTHORIZED SIMPLY BECAUSE THE SUPPLIES OR MATERIALS OFFERED ARE OF A BETTER QUALITY THAN THOSE OFFERED BY THE LOWEST BIDDER, UNLESS QUALITY WAS MADE THE DETERMINING FACTOR IN THE ACCEPTANCE OR REJECTION OF THE BIDS AND IT WAS SO STATED; I.E., THE PROPOSALS SPECIFYING THE QUALITY REQUIRED FOR GOVERNMENT NEEDS IN ORDER THAT ALL BIDDERS MAY HAVE EQUAL OPPORTUNITY TO OFFER SUPPLIES OR MATERIALS WHICH MEET THE SPECIFICATIONS. ACCEPTANCE OF OTHER THAN THE LOWEST BID MAY BE AUTHORIZED WHERE THE QUALITY OFFERED BY THE LOWEST BIDDER DID NOT MEET THE REQUIREMENTS AS SPECIFIED.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, NOVEMBER 5, 1925:

I HAVE YOUR LETTER OF OCTOBER 28, 1925, AS FOLLOWS:

UNDER DATE OF AUGUST 15TH LAST, THIS DEPARTMENT ISSUED AN ADVERTISEMENT FOR THE PURCHASE OF 1,002 FEET OF 1 1/4 INCH RADIATOR HOSE, SPECIFYING THAT THE MATERIAL WAS TO BE NOT LESS THAN THREE-PLY, CUT THREE FEET TO A SECTION AND REQUIRING THE BIDDER TO SUBMIT A FOUR INCH SAMPLE ON OR BEFORE THE TIME SET FOR THE OPENING OF THE BIDS. AS A RESULT OF THIS ADVERTISEMENT, FOURTEEN PROPOSALS WERE RECEIVED AT PRICES RANGING FROM 13 3/4 CENTS TO 19 1/2 CENTS PER FOOT. THE SAMPLES SUBMITTED BY THE VARIOUS DEALERS WERE REFERRED TO THE BUREAU OF STANDARDS WITH THE REQUEST THAT THEY MAKE SUCH TESTS AS WERE FOUND PRACTICABLE, AND THAT THEY ADVISE THIS DEPARTMENT OF THE RESULT. THE REQUEST ON THE BUREAU OF STANDARDS WAS BASED ON COMPLAINTS RECEIVED FROM POSTMASTERS THAT RADIATOR HOSE PREVIOUSLY FURNISHED HAD BEEN VERY UNSATISFACTORY, IN MANY INSTANCES LASTING LESS THAN ONE DAY. A COPY OF THE REPORT SUBMITTED BY THE BUREAU OF STANDARDS, IN WHICH IT IS INDICATED THAT ONLY TWO SAMPLES WERE CONSIDERED ACCEPTABLE, IS INCLOSED.

THE CINCINNATI RUBBER MANUFACTURING COMPANY, WHOSE SAMPLE RECEIVED THE BEST RATING, IS NINTH ON THE LIST OF BIDDERS, WHILE THE UNITED AND GLOBE RUBBER COMPANY, WHOSE MATERIAL IS RATED AS NEXT BEST, IS THIRTEENTH ON THE LIST.

IT MAY BE STATED HERE THAT THIS HOSE IS INSTALLED IN SMALL SECTIONS OF APPROXIMATELY FOUR INCHES AND THAT THE COST OF THE MATERIAL IS NEGLIGIBLE IN COMPARISON TO THE LABOR INVOLVED IN THE REMOVAL AND INSTALLATION OF SAME.

IT IS REQUESTED THAT YOU ADVISE THIS DEPARTMENT WHETHER UNDER THE CIRCUMSTANCES AN AWARD MAY PROPERLY BE MADE TO THE CINCINNATI RUBBER MANUFACTURING COMPANY. IN VIEW OF THE LAPSE OF TIME OCCASIONED TO SOME EXTENT BY THE TEST CONDUCTED BY THE BUREAU OF STANDARDS, IT WOULD BE APPRECIATED IF YOUR DECISION IN THE MATTER CAN BE EXPEDITED.

THE MATTER OF THE ACCEPTANCE OF OTHER THAN THE BID OF THE LOWEST RESPONSIBLE BIDDER HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS BY THIS OFFICE AND THE REQUIREMENTS WITH RESPECT THERETO WERE STATED IN DECISION OF MARCH 8, 1924, 3 COMP. GEN. 604, AS FOLLOWS:

THE ACCEPTANCE BY AN ADMINISTRATIVE OFFICER OF OTHER THAN THE LOWEST BID WOULD ORDINARILY NOT BE QUESTIONED IF THE REASONS ASSIGNED FOR THAT ACTION APPEARED SATISFACTORY, BUT THE ACTION IN THAT RESPECT BY ADMINISTRATIVE OFFICERS IS NOT CONCLUSIVE OF THE ACCOUNTING OFFICE. IT APPEARS, THEREFORE, THAT A SATISFACTORY AUDIT OF THE EXPENDITURES, WHETHER PURSUANT TO FORMAL OR INFORMAL CONTRACTS, REQUIRES AT LEAST AN AFFIRMATIVE SHOWING THAT THE LOWEST BID WAS ACCEPTED, OR, IF OTHERWISE, A DETAILED STATEMENT OF THE REASONS FOR ACCEPTING OTHER THAN THE LOWEST BID.

THE INFORMATION THUS CONSIDERED NECESSARY MAY BE PROVIDED EITHER BY FURNISHING THE ACCEPTED PROPOSAL AND ALL REJECTED PROPOSALS OR COPIES THEREOF, OR BY FURNISHING THE ACCEPTED PROPOSAL AND AN ABSTRACT OF REJECTED PROPOSALS, OR BY A CERTIFICATE ON THE VOUCHER BY ONE HAVING KNOWLEDGE OF THE FACTS THAT THE LOWEST BID, ATTACHED OR OTHERWISE DEPOSITED, WAS THE LOWEST BID, IF THAT BE A FACT, OR IF THE FACT BE OTHERWISE, A DETAILED STATEMENT AS TO THE REASONS FOR ACCEPTING OTHER THAN THE LOWEST BID. SUCH REQUIREMENT APPEARS TO BE REASONABLE AND IS DEEMED NECESSARY TO A PROPER AUDIT OF THE EXPENDITURES. * * *

THE PURPOSE OF THE STATUTES REQUIRING COMPETITION IS PRIMARILY TO GIVE THE UNITED STATES THE ADVANTAGE OF THE LOWEST AVAILABLE PRICE FOR THE MATERIAL OR THE SERVICE DESIRED AND PRESUPPOSES THE ACCEPTANCE OF THE LOWEST BID CONFORMING TO THE STIPULATED CONDITIONS. THERE MAY BE REASONS WHY THE LOWEST BID IS NOT DESIRED TO BE ACCEPTED. HOWEVER, A HIGHER BID MAY NOT PROPERLY BE ACCEPTED AND HIGHER COST BE THUS PAID UNLESS THE REASONS FOR THE REJECTION OF A LOWER BID ARE OF SUCH MATERIAL CHARACTER AS TO FULLY WARRANT SUCH ACTION AND SUPPORT THE HIGHER AMOUNT TO BE PAID. COMPETITIVE BIDDERS AS WELL AS THE PUBLIC IN GENERAL ARE CONCERNED IN THE ACCEPTANCE OF THE LOWEST BID AND IF IT APPEARS THAT THE REJECTION IS UPON INSUFFICIENT FACTS, THERE ARISES A PROPER QUESTION FOR THE CONSIDERATION OF THIS OFFICE OF THE ADMINISTRATIVE ACTION IN ACCEPTING THE HIGHER BID.

THERE IS NO DOUBT THAT IT WOULD NOT BE IN THE INTEREST OF THE UNITED STATES TO PURCHASE SUPPLIES OF AN INFERIOR GRADE OR SUPPLIES AS TO WHICH THERE IS DOUBT AS OF THEIR QUALITY OR DURABILITY. BUT THERE MUST BE EQUALITY OF BIDDING--- ALL BIDS MUST BE ASKED UPON THE SAME CONDITIONS TO AFFORD PROPER COMPARISON OF BIDS. THE QUALITY REQUIRED FOR GOVERNMENT NEEDS SHOULD BE SPECIFIED IN ORDER THAT ALL BIDDERS MAY HAVE EQUAL OPPORTUNITY TO OFFER SUPPLIES OR MATERIALS WHICH MEET THE REQUIREMENTS SO SPECIFIED. THAT IS, IF QUALITY IS TO BE A DETERMINING FACTOR IN THE ACCEPTANCE OR REJECTION OF A PARTICULAR BID, IT MUST BE SO STATED AND BIDS NOT FULLY OFFERING THE QUALITY SPECIFIED ARE NOT REQUIRED TO BE ACCEPTED, BUT IF THE QUALITY SPECIFIED IS OFFERED, A HIGHER BID MAY NOT BE ACCEPTED ON THE GROUND THAT IT OFFERS A BETTER QUALITY THAN THAT SPECIFIED.

THE FACTS AS TO THIS CONDITION OF BIDDING HAVE NOT BEEN GIVEN IN THE MATTER HERE PRESENTED. APPARENTLY THE NUMBER OF PLY OF THE HOSE WAS SPECIFIED, AND BIDS OFFERING THE STIPULATED PLY ARE FOR CONSIDERATION ON THIS BASIS AS TO WHICH IS THE LOWEST. IF, HOWEVER, QUALITY OF PLY WAS FOR CONSIDERATION ASIDE FROM THE ORDINARY REQUIREMENTS OF A PLY, QUALITY IN THIS RESPECT WAS A DETERMINING FACTOR, AND IF IT WAS SO SPECIFIED, AND THE HOSE OFFERED AT THE LOWER BID DID NOT OFFER SUCH QUALITY, YOU ARE AUTHORIZED TO ACCEPT THE LOWEST BID MEETING THE QUALITY SPECIFIED. OTHERWISE, AS TO QUALITY HAVING BEEN SPECIFIED, ACCEPTANCE OF OTHER THAN THE LOWEST BID IS NOT AUTHORIZED, BUT THERE WOULD BE FOR ADMINISTRATIVE CONSIDERATION THE QUESTION OF ASKING NEW BIDS UNDER WHICH THE REQUIREMENTS AS TO QUALITY WILL BE FULLY SPECIFIED.