A-18206, MAY 11, 1927, 6 COMP. GEN. 733

A-18206: May 11, 1927

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" IS NOT A COMPLIANCE WITH THE PROVISIONS OF SECTION 3709. WHERE ONLY ONE DEALER WAS INVITED TO BID IN CONNECTION WITH THE PROPOSED PURCHASE. THE DEFECT IN THIS METHOD OF SECURING BIDS IS NOT CURED BY THE FACT THAT AN INFORMAL SURVEY OF THE AUTOMOBILE MARKET PREVIOUSLY MADE DISCLOSED THAT THE PRICE OF THE MACHINE SPECIFIED WAS LOWER THAN THAT OF ANY OTHER MAKE OF THE TYPE DESIRED. WHEREIN CREDIT WAS DISALLOWED FOR $1. CREDIT FOR THE ITEM WAS DISALLOWED BECAUSE OF FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 3709. THERE WERE NO PARTICULAR SPECIFICATIONS WITH WHICH THE BIDDER WAS TO COMPLY. WHICH WAS ACCEPTED UNDER DATE OF OCTOBER 5. THAT NO OTHER BIDS WERE RECEIVED NOR WERE OTHER BIDDERS FORMALLY INVITED TO SUBMIT BIDS ON OTHER MAKES.

A-18206, MAY 11, 1927, 6 COMP. GEN. 733

ADVERTISING - BIDS - AUTOMOBILES - PARTICULAR MAKE AND MODEL THE NAMING, IN AN INVITATION FOR BIDS, OF A PARTICULAR MAKE AND MODEL OF AUTOMOBILE, ALTHOUGH FOLLOWED BY THE WORDS "OR EQUAL," IS NOT A COMPLIANCE WITH THE PROVISIONS OF SECTION 3709, REVISED STATUTES, AS TO ADVERTISING, WHERE ONLY ONE DEALER WAS INVITED TO BID IN CONNECTION WITH THE PROPOSED PURCHASE, AND THE DEFECT IN THIS METHOD OF SECURING BIDS IS NOT CURED BY THE FACT THAT AN INFORMAL SURVEY OF THE AUTOMOBILE MARKET PREVIOUSLY MADE DISCLOSED THAT THE PRICE OF THE MACHINE SPECIFIED WAS LOWER THAN THAT OF ANY OTHER MAKE OF THE TYPE DESIRED.

DECISION BY COMPTROLLER GENERAL MCCARL, MAY 11, 1927:

W. A. BIRMINGHAM, SPECIAL DISBURSING AGENT, UNITED STATES VETERANS' BUREAU, HAS REQUESTED REVIEW OF SETTLEMENT NO. K-3789-V, WHEREIN CREDIT WAS DISALLOWED FOR $1,054, BEING THE AMOUNT PAID TO S. A. STEPHENS (INC.) ON VOUCHER NO. 614, OCTOBER, 1926, AS THE PURCHASE PRICE OF ONE DODGE SEDAN, TYPE B, BUSINESS MODEL. CREDIT FOR THE ITEM WAS DISALLOWED BECAUSE OF FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 3709, REVISED STATUTES.

IT APPEARS THAT UNDER DATE OF OCTOBER 2, 1926, THE REGIONAL MANAGER OF THE UNITED STATES VETERANS' BUREAU, BUFFALO, N.Y., ACTING IN CONFORMITY WITH AUTHORITY CONTAINED IN LETTER OF SEPTEMBER 29, 1926, FROM THE ACTING CHIEF, SUPPLY DIVISION OF THE SAID BUREAU, SENT AN ADVERTISEMENT TO S. A. STEPHENS (INC.), REQUESTING SAID COMPANY TO BID ON ONE DODGE SEDAN, TYPE B, BUSINESS MODEL, AND CERTAIN EQUIPMENT. THERE WERE NO PARTICULAR SPECIFICATIONS WITH WHICH THE BIDDER WAS TO COMPLY. IN RESPONSE TO SAID ADVERTISEMENT THE SAID S. A. STEPHENS (INC.) SUBMITTED A BID OF $1,054, WHICH WAS ACCEPTED UNDER DATE OF OCTOBER 5, 1936; THAT NO OTHER BIDS WERE RECEIVED NOR WERE OTHER BIDDERS FORMALLY INVITED TO SUBMIT BIDS ON OTHER MAKES.

THE ADVERTISEMENT SENT TO THE SAID S. A. STEPHENS (INC.), NAMED THE PARTICULAR MAKE AND MODEL OF CAR DESIRED AND WAS FOLLOWED BY THE PHRASE "OR EQUAL.' IT IS TO BE NOTED, HOWEVER, THAT THE LETTER OF SEPTEMBER 29, 1926, SUPRA, AUTHORIZING THE PURCHASE ALSO SPECIFICALLY NAMED THE PARTICULAR MAKE OF AUTOMOBILE "SEDAN, DODGE, TYPE B, BUSINESS MODEL, OR EQUAL," WITH A FURTHER PROVISION THAT "A CAR OF A MAKE OTHER THAN THAT SPECIFIED ABOVE SHALL NOT BE PURCHASED WITHOUT SPECIFIC AUTHORITY FROM CENTRAL OFFICE.'

THE CIRCUMSTANCES ATTENDING THE PURCHASE OF THE PARTICULAR MAKE OF AUTOMOBILE AND THE REASONS THEREFOR ARE SET FORTH IN A LETTER FROM THE DISBURSING OFFICER DATED MARCH 8, 1927, AS FOLLOWS:

DURING AUGUST, 1926, I BECAME CONVINCED THAT IT WOULD BE NECESSARY THAT THIS REGIONAL OFFICE BE FURNISHED WITH A MORE SUITABLE CAR. I CAREFULLY ANALYZED THE SITUATION IN ORDER TO DEFINITELY DETERMINE WHAT TYPE OF CAR COULD BE BEST UTILIZED CONSIDERING THE REQUIREMENTS AND HAVING IN MIND AT ALL TIMES THAT IT WAS ESSENTIAL TO SECURE SUCH CAR AT THE LOWEST POSSIBLE PRICE FOR THE GOVERNMENT. ATTENTION IS DRAWN TO MY LETTER DATED AUGUST 17, 1926, PARAGRAPH 2, COPY OF WHICH IS ATTACHED HERETO, SETTING FORTH THE NEEDS OF THIS OFFICE, AND YOU ARE ADVISED THAT THE FACTS AS CITED IN SUCH LETTER WERE TAKEN INTO CONSIDERATION IN ARRIVING AT MY DECISION THAT A SEDAN WOULD BE NEEDED. SUCH TYPE OF CAR WOULD ENABLE THIS BUREAU TO TRANSACT OFFICIAL BUSINESS AND TO TRANSPORT CLAIMANTS WITHOUT SUBJECTING THEM TO DISCOMFORTS AND WITHOUT ENDANGERING THEIR HEALTH OR THE HEALTH OF EMPLOYEES WHO IN THE SEVERE MONTHS OF WINTER WOULD FIND IT NECESSARY TO USE THE CAR FOR OFFICIAL BUSINESS.

HAVING BECOME DEFINITELY SATISFIED AS TO THE TYPE OF CAR WHICH WOULD BE NOT ONLY THE MOST USEFUL BUT WOULD GIVE THE MOST SERVICE DURING ALL PERIODS OF THE YEAR, I SURVEYED THE CAR MARKET IN BUFFALO, CONTACTING THE SEVERAL DEALERS IN THE VARIOUS MAKES OF AUTOMOBILES. I FOUND THAT THE FOLLOWING AGENCIES HANDLED SEDANS WHICH COULD BE UTILIZED BY THIS OFFICE TO ADVANTAGE, AND QUOTE BELOW THE PRICES GIVEN ME ON THE SEVERAL CARS MENTIONED:

CHART

BUICK ------------------------------------------- $1,360

OLDSMOBILE -------------------------------------- 1,115

DODGE ------------------------------------------- 1,054

HUDSON ------------------------------------------ 1,140

OAKLAND ----------------------------------------- 1,340

AFTER HAVING SURVEYED THE MARKET AS ABOVE DESCRIBED, I FOUND THAT THE DODGE AGENCY HANDLED THE SEDAN TYPE OF CAR AND FURTHER, THAT THE PRICE QUOTED ON SUCH CAR WAS THE LOWEST PRICE RECEIVED BY ME FROM THE SEVERAL AGENCIES. ON AUGUST 17, 1926, I FORWARDED TO THE PERSONAL ATTENTION OF THE DIRECTOR OF THIS BUREAU LETTER REFERRING TO REQUISITION ATTACHED THERETO, SETTING FORTH THE NEEDS OF THIS REGIONAL OFFICE AND ADVISING THAT THIS OFFICE COULD UTILIZE TO ADVANTAGE A DODGE SEDAN. THE REQUISITION WAS CONSIDERED BY THE DIRECTOR AND I RECEIVED LETTER DATED SEPTEMBER 29, 1926, AUTHORIZING THE PURCHASE OF A CAR AT A COST NOT TO EXCEED $1,060. COPY OF THIS LETTER IS ATTACHED HERETO AND IT WILL BE NOTED THAT IT AUTHORIZES THE PURCHASE OF "1 SEDAN, DODGE TYPE B BUSINESS MODEL OR EQUAL.'

WHEN THIS AUTHORIZING LETTER WAS RECEIVED FROM CENTRAL OFFICE I AGAIN SURVEYED THE FIELD AND FOUND THAT THE SITUATION HAD NOT CHANGED AND THAT THE CARS CITED ABOVE WERE ALL MORE EXPENSIVE THAN THE DODGE SEDAN. FURTHER, I ASCERTAINED THAT THERE WAS BUT ONE AGENCY HANDLING THIS TYPE OF CAR IN BUFFALO AND VICINITY. IN ORDER THAT IT MIGHT BE A MATTER OF RECORD, PROPOSAL FORM WAS FORWARDED TO S. A. STEPHENS (INC.), AGENCY FOR THE DODGE CARS IN BUFFALO AND THE CAR IN QUESTION WAS DESCRIBED. OCTOBER 5, 1926, PURCHASE ORDER WAS ISSUED AND SEDAN WAS DELIVERED TO THIS OFFICE.

IT IS NOTED THAT THE COMPTROLLER GENERAL HAS STATED AS FOLLOWS IN THE ABOVE-CITED SUSPENSION:

"FROM INFORMATION SHOWN IT APPEARS THAT NO COMPETITION WAS SECURED IN THIS CASE BECAUSE THERE IS ONLY ONE DEALER IN DODGE BROTHERS CARS IN OR NEAR BUFFALO, N.Y.'

IT IS TRUE THAT THERE IS BUT ONE DEALER IN DODGE BROTHERS CARS IN OR NEAR BUFFALO, N.Y., AND IT WAS, THEREFORE, IMPOSSIBLE TO OBTAIN COMPETITION IN SO FAR AS THE DODGE SEDAN WAS CONCERNED. MEMORANDUM WAS ATTACHED TO THE VOUCHER WHEN FORWARDED STATING THAT IT WAS IMPOSSIBLE TO OBTAIN COMPETITION BECAUSE THERE WAS BUT ONE DODGE DEALER. THIS MEMORANDUM WAS MEANT TO DISCLOSE REASON FOR NOT HAVING OBTAINED BIDS FROM MORE THAN ONE DODGE DEALER, AND AS STATED ABOVE PROPOSAL FORM WAS FORWARDED TO S. A. STEPHENS (INC.) FOR PURPOSE OF RECORD. HOWEVER, IT WILL BE SEEN FROM THE FOREGOING PARAGRAPH THAT PRIOR TO THE TIME THAT THE DODGE CAR WAS REQUISITIONED AS WELL AS SUBSEQUENT TO THE TIME THAT AUTHORITY FROM CENTRAL OFFICE WAS RECEIVED, COMPETITION WAS OBTAINED BY ME WITH A VIEW OF OBTAINING THE LOWEST POSSIBLE PRICE FOR THE GOVERNMENT. IT WILL BE SEEN, THEREFORE, THAT EVERYTHING POSSIBLE WAS DONE BY ME TO COMPLY WITH THE SPIRIT OF THE STATUTE IN QUESTION. I TOOK THIS PERSONAL INTEREST IN THIS MATTER INASMUCH AS IT WAS AN IMPORTANT PURCHASE AND I DESIRED TO OBTAIN, NOT ONLY THE MOST SUITABLE CAR BUT ALSO THE MOST REASONABLE ONE FOR THIS BUREAU.

IT IS FURTHER NOTED, THAT THE COMPTROLLER GENERAL HAS STATED AS FOLLOWS:

"ALSO, THE SPECIFICATIONS DRAWN UP ON THE PROPOSAL PREVENT THE SECURING OF COMPETITION.'

THE SPECIFICATIONS QUOTED IN THE FORM OF PROPOSAL ATTACHED TO THE VOUCHER WERE THE SAME SPECIFICATIONS AS THOSE SHOWN IN THE LETTER OF AUTHORITY RECEIVED FROM OUR WASHINGTON OFFICE AND YOU WILL NOTE FURTHER IN THE PROPOSAL, IT IS STATED THAT THIS IS STANDARD EQUIPMENT AND IS FURNISHED WITH ALL DODGE CARS OF THIS TYPE AND, THEREFORE, WAS NOT SUPPLEMENTARY TO THE CAR ITSELF. FURTHER, YOU ARE ADVISED THAT AT THE TIME I REVIEWED THE MARKET PRIOR TO THE REQUISITIONING AND PURCHASING OF THE CAR, I DID NOT CITE SPECIFICATIONS TO ANY DEALER WHICH WOULD BE SUCH AS TO RESTRICT COMPETITION, BUT, RATHER OBTAINED BIDS ON THEIR STANDARD CAR AS FURNISHED.

IN MAKING REQUISITION FOR AN AUTOMOBILE AND REQUESTING AUTHORITY TO PURCHASE THE DODGE CAR THE REGIONAL MANAGER STATES IN HIS LETTER OF AUGUST 17, 1926, THAT:

THE FORD HAS BEEN IN CONSTANT DAILY USE FOR THE PAST TWO YEARS. WEATHER AND ROAD CONDITIONS PERMITTING, IT IS USED BY EMPLOYEES OF THE OFFICE WHILE TRAVELING ON OFFICIAL BUSINESS IN SOME OF OUR OUTLYING TERRITORY. ENDEAVORS HAD ALSO BEEN MADE FOR THE USE OF THIS CAR BY THE TRAVELING CLAIMS AND RATING BOARD, BUT UNLESS THE PERSONALLY OWNED CAR OF ONE OF THE MEMBERS OF THE BOARD WERE PLACED AT THEIR DISPOSAL IT WAS FOUND MOST INCONVENIENT TO MAKE ANY EXTENDED TRIPS IN THE FORD.

IN ADDITION TO THIS, THE FORD HAD ON SEVERAL OCCASIONS BEEN USED IN LIEU OF ENGAGING A HOSPITAL AMBULANCE AND INCURRING A CHARGE THEREFOR. HOWEVER, DUE TO THE DISCOMFORTS SUFFERED BY CLAIMANTS AS A RESULT OF EVEN VERY SHORT TRIPS IN A CAR OF THIS TYPE, IT HAS BEEN AND STILL IS NECESSARY THAT EITHER DOCTOR WOODWARD'S (REGIONAL MEDICAL OFFICER) OR MY PERSONALLY OWNED CAR BE PLACED AT THE BUREAU'S DISPOSAL IN ORDER THAT SUCH CLAIMANTS AS REQUIRE MOTOR TRANSPORTATION BE ASSURED OF SAME WITHOUT SUBJECTING THE BUREAU TO CRITICISM NOR THE CLAIMANT TO ANY ADDED DISCOMFORTS, AND YET ELIMINATE THE INCURRING OF ANY EXPENSE ON ACCOUNT OF AMBULANCE SERVICE.

WHILE THE INCLOSED MECHANICAL INSPECTION REPORT DOES NOT JUSTIFY CONDEMNING THE FORD, YET IT CAN FULLY BE APPRECIATED THAT THIS TYPE OF CAR CAN NOT SATISFACTORILY FILL THE NEEDS OF THIS OFFICE. WHAT IS REQUIRED AND COULD BE UTILIZED TO EVERY ADVANTAGE IS A DODGE SEDAN SUCH AS COVERED BY THE REQUISITION, PARTICULARLY SINCE NO MOTOR VEHICLES ARE ASSIGNED TO EITHER THE ROCHESTER SUBSTATION OR THE SYRACUSE SUBOFFICE. IN THIS CONNECTION, IT MIGHT BE WELL TO STATE THAT WITH THE CONTEMPLATED REMOVAL OF THE PRESENT CLAIMS ACTIVITIES OF THE SYRACUSE OFFICE, AN ITINERANT CLAIMS AND RATING BOARD WILL IN ALL PROBABILITY BE REQUIRED TO VISIT, AT INTERVALS, THAT TERRITORY.

ALTOGETHER, THE MECHANICAL CONDITION, THE DISCOMFORTS AND THE GENERAL APPEARANCE OF THE FORD ARE SUCH AS TO BE SOMEWHAT IN CONFLICT WITH THE OTHER STANDARDS WHICH THIS OFFICE ENDEAVORS TO MAINTAIN.

IN THIS INSTANCE IT MUST BE UNDERSTOOD THAT THE BUDGET ALLOTMENT APPROVED FOR THIS OFFICE IS NOT SUFFICIENT TO COVER THIS REQUISITION, AND IT WOULD, THEREFORE, BE NECESSARY TO SECURE AN ADDITIONAL ALLOTMENT FROM CENTRAL OFFICE.

SECTION 3709, REVISED STATUTES, PROVIDES THAT ALL PURCHASES AND CONTRACTS FOR SUPPLIES IN ANY OF THE DEPARTMENTS OF THE GOVERNMENT, EXCEPT FOR PERSONAL SERVICES AND EXCEPT IN CASES OF EMERGENCY, SHALL BE MADE AFTER ADVERTISING A SUFFICIENT TIME PREVIOUSLY RESPECTING SAME. IT HAS BEEN FREQUENTLY HELD BY THE COURTS AND BY THE ACCOUNTING OFFICERS OF THE UNITED STATES THAT THE PROVISIONS OF THE STATUTE ARE DESIGNED TO GIVE ALL MANUFACTURERS, ETC., EQUAL RIGHT TO COMPETE FOR GOVERNMENT BUSINESS, TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM COMPETITION, TO PREVENT UNJUST FAVORITISM BY REPRESENTATIVES OF THE GOVERNMENT IN MAKING PURCHASES ON PUBLIC ACCOUNT, AND TO PREVENT COLLUSION AND FRAUD IN PROCURING SUPPLIES AND LETTING CONTRACTS. 22 COMP. DEC. 302; 5 COMP. GEN. 712.

IT HAS BEEN HELD BY THE ACCOUNTING OFFICERS THAT THE NAMING OF A PARTICULAR MAKE OF AUTOMOBILE OR OTHER EQUIPMENT, ETC., IN AN ADVERTISEMENT FOR PROPOSALS TO THE EXCLUSION OF OTHERS OF SIMILAR AND EQUAL QUALITY IS NOT A COMPLIANCE WITH THE PROVISIONS OF SAID STATUTE. GENERALLY WHEN, IN ORDER TO DESCRIBE AN ARTICLE, ETC., NEEDED, IT IS NECESSARY TO NAME THE MAKE, IT SHOULD BE FOLLOWED BY THE QUALIFYING PHRASE "OR EQUAL.' WHILE THE PROPOSAL IN THE INSTANT MATTER DID CONTAIN THE QUALIFYING PHRASE "OR EQUAL," THERE IS NO SHOWING THAT A CAR OF A LOWER PRICE WOULD NOT HAVE BEEN EQUAL IN SO FAR AS MEETING THE GOVERNMENT'S NEEDS WAS CONCERNED. THEREFORE IT CAN NOT BE SAID THAT THE PROCEDURE FOLLOWED IS A COMPLIANCE WITH THE PROVISIONS OF THE SAID STATUTE, OR THE NUMEROUS DECISIONS OF THIS OFFICE WHEREIN THE PROVISIONS OF THE SAID STATUTE HAVE BEEN CONSIDERED AND CONSTRUED. IN SO FAR AS THE FACTS OF RECORD DISCLOSE THERE IS INDICATED MERELY A DESIRE FOR A PARTICULAR MAKE OF AUTOMOBILE.

IN CONSIDERING THE PROVISIONS OF THE SAID STATUTE THE UNITED STATES SUPREME COURT, IN THE CASE OF PURCELL ENVELOPE COMPANY V. UNITED STATES, 249 U.S. 313, 318, SAID:

* * * THERE MUST BE A POINT OF TIME AT WHICH DISCRETION IS EXHAUSTED. THE PROCEDURE FOR THE ADVERTISING FOR BIDS FOR SUPPLIES OR SERVICES TO THE GOVERNMENT WOULD ELSE BE A MOCKERY--- A PROCEDURE, WE MAY SAY, THAT IS NOT PERMISSIVE BUT REQUIRED. (SECTION 3709, REV.STATS.) BY IT THE GOVERNMENT IS GIVEN THE BENEFIT OF THE COMPETITION OF THE MARKET AND EACH BIDDER IS GIVEN THE CHANCE FOR A BARGAIN. IT IS A PROVISION, THEREFORE, IN THE INTEREST OF BOTH GOVERNMENT AND BIDDER, NECESSARILY GIVING RIGHTS TO BOTH AND PLACING OBLIGATIONS ON BOTH. AND IT IS NOT OUT OF PLACE TO SAY THAT THE GOVERNMENT SHOULD BE ANIMATED BY A JUSTICE AS ANXIOUS TO CONSIDER THE RIGHTS OF THE BIDDER AS TO INSIST UPON ITS OWN. * * *

IN DECISION OF MAY 7, 1926, 5 COMP. GEN. 898, IT WAS SAID:

THE TELEGRAM AUTHORIZATION SHOWS THE PURCHASE WAS AUTHORIZED OF A PARTICULAR DEALER WITHOUT ANY ATTEMPT TO ASCERTAIN WHETHER OTHER DEALERS COULD FURNISH TRUCKS EQUIPPED FOR THIS SERVICE AT A LESSER PRICE THAN THE ALBERTSON MOTOR CO. AGREED TO FURNISH DODGE TRUCKS, AND SUCH AN INQUIRY MIGHT ALSO HAVE DISCLOSED A LARGER ALLOWANCE THAN $600 FOR THE TWO OLD DODGE CARS. THE APPARENT PROBABILITY THAT ONLY ONE DEALER OR MANUFACTURER COULD FURNISH A TRUCK THAT WOULD MEET THE GOVERNMENT'S REQUIREMENTS, OR THAT NO OTHER DEALER OR MANUFACTURER COULD FURNISH SUCH A TRUCK AT AS LOW A PRICE AS THE DEALER FROM WHOM IT IS PROPOSED TO MAKE THE PURCHASE OFFERS TO FURNISH IT, IS NOT CONTROLLING OF THE MATTER AS TO WHETHER THE PROVISIONS OF SECTION 3709 ARE FOR APPLICATION. * * * SEE ALSO 5 COMP. GEN. 963, 966. IT WILL THUS BE SEEN THAT COMPETITION MUST BE FREE AND UNRESTRICTED; THAT IS, OPEN TO ALL DEALERS, ETC., ON THE BASIS OF EQUALITY AND SHOULD BE INVITED ON COMMON GROUND. THERE IS NO COMPETITION UNLESS BIDDING IS DONE ON THE SAME BASIS. UNITED STATES V. PAN AMERICAN PETROLEUM COMPANY, 6 FED.REP./2D) 43, 68, AFFIRMED 9 FED.REP./2D) 761, 770. UNITED STATES V. ELLICOTT, 223 U.S. 524, 543.

FOR THE REASONS HEREIN STATED AND IN VIEW OF THE FACT THAT THE PURCHASE IN THIS CASE WAS MADE SUBSEQUENT TO THE DECISION OF MAY 7, 1926, 5 COMP. GEN. 898, AND IN APPARENT DISREGARD OF THE PRINCIPLES ANNOUNCED THEREIN AND THE PRINCIPLES ANNOUNCED IN NUMEROUS OTHER DECISIONS OF THIS OFFICE, WITH REFERENCE TO SUCH PURCHASES, THE SETTLEMENT DISALLOWING CREDIT FOR THE AMOUNT PAID BY THE DISBURSING OFFICER IN QUESTION IS SUSTAINED.