A-15545, SEPTEMBER 24, 1926, 6 COMP. GEN. 210

A-15545: Sep 24, 1926

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WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $215.45 PAID ON VOUCHER 57 OF THE JULY. SEALED PROPOSALS WERE REQUESTED FOR INSTALLING A NEW WATER SUPPLY AT THE UNITED STATES POST OFFICE BUILDING AT BATAVIA. IN RESPONSE TO THIS REQUEST TWO PROPOSALS WERE RECEIVED. THE CONTRACT WAS AWARDED TO STEELE AND TORRANCE CO. NOTWITHSTANDING IT WAS THE HIGHER BIDDER. WHO AT THE TIME WAS ENGAGED IN BUYING HAY. WAS NOT A LICENSED PLUMBER. WAS SAID BY THE CUSTODIAN NEVER TO HAVE BEEN ENGAGED IN THE LINE OF WORK REQUIRED. THAT THE CUSTODIAN "VERY MUCH DOUBTED" HIS CAPABILITY OF PERFORMING THE WORK. (2) THAT THE WORK REQUIRED WAS OF A HIGHLY TECHNICAL CHARACTER AND INVOLVED CONSIDERABLE RESPONSIBILITY AND THAT THE AMOUNT OF THE PROPOSAL OF THE LOWER BIDDER SHOWED BEYOND DOUBT THAT HE DID NOT UNDERSTAND THE NATURE OR THE EXTENT OF THE WORK. (3) THAT ON ACCOUNT OF THE UNSERVICEABLE CONDITION OF THE WELL ON THE PREMISES WHICH CONSTITUTED THE SUPPLY OF WATER.

A-15545, SEPTEMBER 24, 1926, 6 COMP. GEN. 210

ADVERTISING, ACCEPTANCE OF OTHER THAN LOWEST BID - INEXPERIENCE OF LOWEST BIDDER SECTION 3709, REVISED STATUTES, REQUIRES THE ACCEPTANCE OF BIDS MOST ADVANTAGEOUS TO THE UNITED STATES, AND A BID OBLIGATING THE GOVERNMENT TO PAY MORE THAN TWICE THE AMOUNT OF THE LOWEST BID FOR THE INSTALLATION OF A NEW WATER SUPPLY AT A POST OFFICE MAY NOT BE ACCEPTED ON THE GROUND THAT THE LOWEST BIDDER HAPPENED NOT TO BE ENGAGED IN THE LINE OF WORK ADVERTISED FOR.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, SEPTEMBER 24, 1926:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 28, 1926, REQUESTING REVIEW OF SETTLEMENT C-42327-T, DATED JULY 28, 1926, WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $215.45 PAID ON VOUCHER 57 OF THE JULY, 1925, ACCOUNT OF J. L. SUMMERS, DISBURSING CLERK FOR THE TREASURY DEPARTMENT REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT PAID TO STEELE AND TORRANCE CO., BATAVIA, N.Y., FOR INSTALLING AND CONNECTING WATER SERVICE FROM THE CITY WATER MAINS, AND THE AMOUNT FOR WHICH C. H. SAGE, BY HIS PROPOSAL DATED SEPTEMBER 26, 1924, AGREED TO FURNISH THE SERVICE.

IT APPEARS THAT ON SEPTEMBER 12, 1924, SEALED PROPOSALS WERE REQUESTED FOR INSTALLING A NEW WATER SUPPLY AT THE UNITED STATES POST OFFICE BUILDING AT BATAVIA, N.Y., FROM THE CITY WATER MAINS IN ACCORDANCE WITH CERTAIN DRAWINGS AND SPECIFICATIONS, AND IN RESPONSE TO THIS REQUEST TWO PROPOSALS WERE RECEIVED, ONE FROM STEELE AND TORRANCE CO. AND THE OTHER FROM C. H. SAGE. THE FORMER OFFERED TO FURNISH THE SERVICE SPECIFIED IN THE PROPOSAL FOR $415 AND THE LATTER FOR $199.55. THE CONTRACT WAS AWARDED TO STEELE AND TORRANCE CO., NOTWITHSTANDING IT WAS THE HIGHER BIDDER, AND THE REASONS STATED FOR THIS ACTION MAY BE SUMMARIZED AS FOLLOWS:

(1) THAT THE LOWER BIDDER, WHO AT THE TIME WAS ENGAGED IN BUYING HAY,WAS NOT A LICENSED PLUMBER; WAS SAID BY THE CUSTODIAN NEVER TO HAVE BEEN ENGAGED IN THE LINE OF WORK REQUIRED; AND THAT THE CUSTODIAN "VERY MUCH DOUBTED" HIS CAPABILITY OF PERFORMING THE WORK.

(2) THAT THE WORK REQUIRED WAS OF A HIGHLY TECHNICAL CHARACTER AND INVOLVED CONSIDERABLE RESPONSIBILITY AND THAT THE AMOUNT OF THE PROPOSAL OF THE LOWER BIDDER SHOWED BEYOND DOUBT THAT HE DID NOT UNDERSTAND THE NATURE OR THE EXTENT OF THE WORK.

(3) THAT ON ACCOUNT OF THE UNSERVICEABLE CONDITION OF THE WELL ON THE PREMISES WHICH CONSTITUTED THE SUPPLY OF WATER, AND OF THE LATENESS OF THE SEASON, RELIEF SHOULD BE EXPEDITED.

(4) THAT THE COMPETENCY OF BIDDERS IS FOR DETERMINATION BY THE ADMINISTRATIVE RATHER THAN THE ACCOUNTING OFFICERS.

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 SERVICE DESIRED, AND PRESUPPOSES THE ACCEPTANCE OF THE LOWEST BID CONFORMING TO THE STIPULATED CONDITIONS, HENCE 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 TOFULLY 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. COMP. GEN. 330.

THE REASONS GIVEN FOR THE AWARD TO THE HIGHER BIDDER ARE NOT SUFFICIENT TO WARRANT THE ACTION TAKEN. THE REQUIREMENTS GOVERNING THE SERVICES TO BE FURNISHED WERE CLEARLY SPECIFIED, PROVIDING THAT THE MANNER OF MAKING THE CONNECTION TO THE STREET MAIN, THE KIND OF PIPE USED, AND THE METHOD OF LAYING IT SHOULD BE IN ACCORDANCE WITH THE REGULATIONS OF THE CITY AND WATER DEPARTMENT, THE REQUEST FOR PROPOSALS NOT STIPULATING THAT BIDS FROM LICENSED PLUMBERS ONLY WOULD BE CONSIDERED. IT MUST, THEREFORE, BE ASSUMED THAT IN PROPOSING TO PERFORM THE SERVICE "IN ACCORDANCE WITH SPECIFICATIONS AND DRAWING," MR. SAGE WAS PREPARED TO SECURE THE SPECIFIED MATERIAL AND TO ENGAGE THE SERVICES OF WORKMEN CAPABLE OF PERFORMING THE WORK SO AS TO MEET THE REQUIREMENTS OF THE CITY REGULATIONS. THE FACT THAT HE WAS ENGAGED IN BUYING HAY WAS NOT OF ITSELF A DISQUALIFICATION FOR THE JOB HE PROPOSED TO EXECUTE, AND IF THE AMOUNT OF HIS BID WAS SO LOW THAT THE SERVICES COULD BE FURNISHED ONLY AT A LOSS TO HIM THAT WAS A MATTER WITH WHICH THE UNITED STATES WAS NOT CONCERNED. A-12939, MAY 7, 1926.

WITH RESPECT TO THE URGENCY OF THE MATTER, REPRESENTED AS ANOTHER OF THE CONSIDERATIONS INFLUENCING THE ACCEPTANCE OF THE HIGHER BID, IT IS NOTED THAT THE MATTER OF TIME WAS NOT MENTIONED IN THE REQUEST FOR PROPOSALS NOR IN THE ACCEPTANCE OF THE PROPOSAL OF STEELE AND TORRANCE CO., AND IT HAS NOT BEEN SHOWN THAT MR. SAGE COULD NOT HAVE EXECUTED THE SERVICE AS PROMPTLY AS DID THE ACCEPTED BIDDER. IT IS ALSO NOTED THAT ALTHOUGH THE REQUEST FOR PROPOSALS WAS DATED SEPTEMBER 12, 1924, THE AWARD WAS NOT MADE UNTIL DECEMBER 22, 1924, AND THE SERVICES NOT COMPLETED UNTIL MAY 21, 1925. FURTHERMORE, AN UNEXPLAINED FEATURE OF THE TRANSACTION IS THAT ALTHOUGH THE TIME LIMIT FOR RECEIVING PROPOSALS WAS FIXED AS 3 P.M., SEPTEMBER 27, 1924, THE ACCEPTED PROPOSAL OF STEELE AND TORRANCE CO. IS DATED OCTOBER 22, 1924. SEE THE DECISION OF THE ENGLISH HOUSE OF LORDS IN REX V. ROBERTS (1925), A.C. 578, 816, UPHOLDING THE AUTHORITY OF AN AUDITOR TO REVIEW AND DISALLOW PAYMENTS MADE BY ADMINISTRATIVE OFFICERS UNDER A STATUTE WHICH PERMITTED SAID OFFICERS TO MAKE PAYMENTS AS THEY "MAY THINK FIT.' IT WAS THERE CONTENDED, AS HERE, THAT THE MATTER WAS ONE OF ADMINISTRATIVE DISCRETION, AND THE COURT SAID, AMONG OTHER THINGS, THAT IF SUCH WAS THE LAW:

* * * THE AUDITOR COULD NOT EXAMINE AT ALL INTO PRICES PAID FOR THE GOODS PURCHASED. EXTRAVAGANT EXPENDITURE ON PERMITTED OBJECTS WOULD RECEIVE AN ABSOLUTE CHARTER OF IMMUNITY, AND A STATUTORY BODY, STRICTLY TIED UP IN ONE DIMENSION, WOULD BE FREE TO MOVE TO INFINITY IN ANOTHER. * * * THE PURPOSE, HOWEVER, OF THE WHOLE AUDIT IS TO INSURE WISE AND PRUDENT ADMINISTRATION AND TO RECOVER FOR THE COUNCIL'S FUNDS MONEY THAT SHOULD NOT HAVE BEEN TAKEN OUT OF THEM. * * * HIS MISSION IS TO INQUIRE IF THERE IS ANY EXCESS OVER WHAT IS REASONABLE. I DO NOT FIND ANY WORDS LIMITING HIS FUNCTIONS MERELY TO THE CASE OF BAD FAITH, OR OBLIGING HIM TO LEAVE THE RATE PAYERS UNPROTECTED FROM THE EFFECTS ON THEIR POCKETS OF HONEST STUPIDITY OR IMPRACTICAL IDEALISM.