A-15907, OCTOBER 30, 1926, 6 COMP. GEN. 311

A-15907: Oct 30, 1926

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CONTRACTS - EVIDENCE OF LOWEST BID A SATISFACTORY AUDIT OF EXPENDITURES PURSUANT TO FORMAL OR INFORMAL CONTRACTS REQUIRES AN AFFIRMATIVE SHOWING THAT THE LOWEST BID WAS ACCEPTED AND IN CASES WHERE THE LOWEST BID HAS BEEN ACCEPTED THE CERTIFICATE OF A RESPONSIBLE ADMINISTRATIVE OFFICIAL HAVING KNOWLEDGE OF THE FACTS IN THE MATTER WHEN PLACED UPON THE CONTRACT WILL BE ACCEPTED BY THE GENERAL ACCOUNTING OFFICE AS SUFFICIENT EVIDENCE AS TO THE ACCEPTANCE THEREOF. WHERE OTHER THAN THE LOWEST BID IS ACCEPTED A DETAILED STATEMENT AS TO THE REASONS FOR THE ACCEPTANCE THEREOF ACCOMPANIED BY AN ABSTRACT OF ALL BIDS SHOULD BE FORWARDED WITH THE CONTRACT TO THE GENERAL ACCOUNTING OFFICE FOR AUDIT. IF NO ABSTRACT OF BIDS IS MADE.

A-15907, OCTOBER 30, 1926, 6 COMP. GEN. 311

CONTRACTS - EVIDENCE OF LOWEST BID A SATISFACTORY AUDIT OF EXPENDITURES PURSUANT TO FORMAL OR INFORMAL CONTRACTS REQUIRES AN AFFIRMATIVE SHOWING THAT THE LOWEST BID WAS ACCEPTED AND IN CASES WHERE THE LOWEST BID HAS BEEN ACCEPTED THE CERTIFICATE OF A RESPONSIBLE ADMINISTRATIVE OFFICIAL HAVING KNOWLEDGE OF THE FACTS IN THE MATTER WHEN PLACED UPON THE CONTRACT WILL BE ACCEPTED BY THE GENERAL ACCOUNTING OFFICE AS SUFFICIENT EVIDENCE AS TO THE ACCEPTANCE THEREOF. WHERE OTHER THAN THE LOWEST BID IS ACCEPTED A DETAILED STATEMENT AS TO THE REASONS FOR THE ACCEPTANCE THEREOF ACCOMPANIED BY AN ABSTRACT OF ALL BIDS SHOULD BE FORWARDED WITH THE CONTRACT TO THE GENERAL ACCOUNTING OFFICE FOR AUDIT. IF NO ABSTRACT OF BIDS IS MADE, THE BIDS THEMSELVES SHOULD BE FORWARDED. 5 COMP. GEN. 556, MODIFIED.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 30, 1926:

THERE ARE FOR CONSIDERATION THE REQUIREMENTS OF THIS OFFICE, IN ORDER THAT A PROPER AUDIT OF EXPENDITURES MAY BE MADE, WITH RESPECT TO THE FURNISHING OF EVIDENCE SHOWING THAT THE LOWEST BID WAS ACCEPTED IN COMPLIANCE WITH THE LAW.

IN DECISION OF MARCH 8, 1924, 3 COMP. GEN. 605, IT WAS SAID:

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 ON THE ACCOUNTING OFFICE. IT APPEARS, THEREFORE, THAT A SATISFACTORY AUDIT OF 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 ACCEPTED 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; THEREFORE THE ITEMS HERE IN QUESTION WILL BE CONTINUED IN SUSPENSION FOR A REASONABLE PERIOD OF TIME AWAITING RECEIPT OF THE NECESSARY INFORMATION.

IN DECISION OF JULY 31, 1924, IT WAS SAID:

IF ALL THE BIDS, OR COPIES THEREOF, ACCOMPANY THE VOUCHER, OR IF THE VOUCHER IS ACCOMPANIED BY AN ABSTRACT OF BIDS, THERE MUST BE A SHOWING OF THE REASONS THEREFOR IF OTHER THAN THE LOWEST BID WAS ACCEPTED. IF ALL THE BIDS, OR COPIES THEREOF, DO NOT ACCOMPANY THE VOUCHER, AND IF THE VOUCHER IS NOT ACCOMPANIED BY AN ABSTRACT OF BIDS, THERE MUST BE AN AFFIRMATIVE SHOWING--- A CERTIFICATE BY THE OFFICER AUTHORIZING THE MAKING OF PURCHASE BEING SATISFACTORY--- THAT THE LOWEST BID WAS ACCEPTED, OR, IF OTHERWISE, A DETAILED STATEMENT OF THE REASONS FOR ACCEPTING OTHER THAN THE LOWEST BID SHOULD BE FURNISHED.

THE PROPOSED CERTIFICATE "THAT THE LOWEST, MOST SATISFACTORY BID HAD BEEN ACCEPTED" WOULD BE THE STATEMENT OF A CONCLUSION AND FOR THAT REASON WOULD NOT MEET THE REQUIREMENTS OF THIS OFFICE; WHAT IS REQUIRED IS A STATEMENT OF THE FACTS AND CONDITIONS UPON WHICH THE ACTION IN MAKING A PARTICULAR PURCHASE WAS BASED, THAT BEING NECESSARY TO DETERMINE WHETHER THE AWARD HAD BEEN MADE TO THE LOWEST SATISFACTORY BIDDER AS REQUIRED BY LAW.

THE DECISIONS QUOTED, SUPRA, WERE MODIFIED BY DECISION OF JANUARY 30, 1926, 5 COMP. GEN. 556, WHEREIN IT WAS HELD IN PART THAT AN ABSTRACT OF BIDS OR THE BIDS THEMSELVES SHOULD ACCOMPANY ALL AGREEMENTS SUBMITTED TO THIS OFFICE REGARDLESS OF WHETHER OR NOT THE LOWEST BID WAS ACCEPTED. WAS FURTHER HELD THAT:

THE CERTIFICATE OF AN OFFICIAL HAVING KNOWLEDGE OF THE FACTS IN ANY CASE HAS BEEN AND MAY CONTINUE TO BE TAKEN BY THIS OFFICE AS EVIDENCE THAT AWARD WAS MADE TO THE LOWEST BIDDER OR LOWEST RESPONSIBLE BIDDER, IN THE ABSENCE OF THE BIDS OR AN ABSTRACT THEREOF, ONLY IN EXCEPTIONAL CASES, WHEN SUCH STATEMENT IS CORROBORATED BY THE CONTRACT PAPERS OR THE VOUCHER, OR INFORMATION OR EVIDENCE OTHERWISE OBTAINED * * *.

IT IS NOT THE PURPOSE OF THIS OFFICE TO EXACT OF ADMINISTRATIVE DEPARTMENTS AND ESTABLISHMENTS REQUIREMENTS NOT NECESSARY TO AN ASCERTAINMENT THAT THE LAWS HAVE BEEN DULY FOLLOWED AND THE INTERESTS OF THE UNITED STATES FULLY PROTECTED.

AFTER FULL CONSIDERATION OF THE MATTER, BOTH FROM A LEGAL AND PRACTICAL STANDPOINT, IT IS CONCLUDED THAT THE REQUIREMENTS TO BE OBSERVED ARE AS FOLLOWS:

1. WHERE THE LOWEST BID AS TO PRICE IS ACCEPTED--- THAT IS TO SAY, WHERE THE LOWEST BIDDER IS DETERMINED FROM THE PRICE ALONE, NO OFFSETTING OR EQUALIZING ELEMENTS BEING FOR CONSIDERATION--- AND THERE IS FURNISHED A CERTIFICATE TO THAT EFFECT BY A RESPONSIBLE ADMINISTRATIVE OFFICER HAVING PERSONAL KNOWLEDGE OF THE FACTS, NEITHER THE REJECTED BIDS NOR AN ABSTRACT OF THE BIDS NEED BE FORWARDED TO THIS OFFICE WITH THE CONTRACT.

2. IN ALL CASES WHERE OTHER THAN THE LOWEST BID AS TO PRICE IS ACCEPTED, THERE SHOULD BE FORWARDED TO THIS OFFICE WITH THE CONTRACT A DETAILED STATEMENT GIVING IN FULL THE REASONS FOR THE ACCEPTANCE THEREOF, TOGETHER WITH AN ABSTRACT OF ALL BIDS RECEIVED. IF NO ABSTRACT OF BIDS IS MADE THE BIDS THEMSELVES SHOULD BE FORWARDED.

3. EXCEPT IN THOSE CASES IN WHICH THE REJECTED BIDS ARE REQUIRED BY LAW TO BE FILED IN THE RETURNS OFFICE OF THE DEPARTMENT OF THE INTERIOR, ALL REJECTED BIDS WILL BE RETAINED IN THE ADMINISTRATIVE OFFICES AND KEPT AVAILABLE FOR INSPECTION BY DULY AUTHORIZED REPRESENTATIVES OF THIS OFFICE, AND BE FORWARDED TO THIS OFFICE UPON REQUEST THEREFOR WHEN REQUIRED IN INDIVIDUAL CASES.

THE DECISION OF JANUARY 30, 1926, 5 COMP. GEN. 556, IS MODIFIED ACCORDINGLY.