A-18952, SEPTEMBER 23, 1927, 7 COMP. GEN. 230

A-18952: Sep 23, 1927

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ETC. - EXCHANGE OF OLD FOR NEW WHERE GOVERNMENT DEPARTMENTS AND ESTABLISHMENTS HAVE ON HAND ADDING MACHINES AND SIMILAR LABOR-SAVING DEVICES THEY MAY BE EXCHANGED FOR NEW MACHINES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5 OF THE ACT OF MARCH 4. 1927: IT HAS COME TO THE ATTENTION OF THIS OFFICE THAT SOME OF THE DEPARTMENTS OF THE GOVERNMENT ARE FOLLOWING AN ERRONEOUS AND UNAUTHORIZED PRACTICE IN THE APPLICATION OF THE PROVISION IN SECTION 5 OF THE ACT OF MARCH 4. AS AN INSTANCE OF THE PRACTICE REFERRED TO IT IS NOTED THAT RECENTLY ONE OF THE DEPARTMENTS WAS IN THE MARKET FOR THE PURCHASE OF A LARGE NUMBER OF ADDING MACHINES AND IN ITS REQUEST FOR BIDS THERE WAS A PROVISION AS FOLLOWS: BIDDER MUST FILE WITH HIS BID A LIST.

A-18952, SEPTEMBER 23, 1927, 7 COMP. GEN. 230

PURCHASES, TYPEWRITERS, ADDING MACHINES, ETC. - EXCHANGE OF OLD FOR NEW WHERE GOVERNMENT DEPARTMENTS AND ESTABLISHMENTS HAVE ON HAND ADDING MACHINES AND SIMILAR LABOR-SAVING DEVICES THEY MAY BE EXCHANGED FOR NEW MACHINES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5 OF THE ACT OF MARCH 4, 1915, 38 STAT. 1161, BIDS THEREON HAVING BEEN PREVIOUSLY REQUESTED AS REQUIRED BY SECTION 3709 OF THE REVISED STATUTES, AND WHERE THE CASH BID EXCEEDS THE EXCHANGE VALUE, SUCH BID MUST BE ACCEPTED AND THE PROCEEDS COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS IN COMPLIANCE WITH SECTION 3618 OF THE REVISED STATUTES.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 23, 1927:

IT HAS COME TO THE ATTENTION OF THIS OFFICE THAT SOME OF THE DEPARTMENTS OF THE GOVERNMENT ARE FOLLOWING AN ERRONEOUS AND UNAUTHORIZED PRACTICE IN THE APPLICATION OF THE PROVISION IN SECTION 5 OF THE ACT OF MARCH 4, 1915, 38 STAT. 1161, WHICH READS:

THAT THE EXECUTIVE DEPARTMENTS AND OTHER GOVERNMENT ESTABLISHMENTS AND ALL BRANCHES OF THE PUBLIC SERVICE MAY HEREAFTER EXCHANGE TYPEWRITERS, ADDING MACHINES, AND OTHER SIMILAR LABOR-SAVING DEVICES IN PART PAYMENT FOR NEW MACHINES USED FOR THE SAME PURPOSE AS THOSE PROPOSED TO BE EXCHANGED. * * *.

AS AN INSTANCE OF THE PRACTICE REFERRED TO IT IS NOTED THAT RECENTLY ONE OF THE DEPARTMENTS WAS IN THE MARKET FOR THE PURCHASE OF A LARGE NUMBER OF ADDING MACHINES AND IN ITS REQUEST FOR BIDS THERE WAS A PROVISION AS FOLLOWS:

BIDDER MUST FILE WITH HIS BID A LIST, IN QUADRUPLICATE, OF EXCHANGE ALLOWANCES WHICH HE WILL GIVE ON ADDING MACHINES NOW IN SERVICE. APPROXIMATELY 220 MACHINES WILL BE USED IN EXCHANGE.

CERTAIN DEALERS REQUESTED PERMISSION TO SUBMIT CASH BIDS FOR THE OLD ADDING MACHINES AND WERE ADVISED THAT SUCH A BID COULD NOT BE ENTERTAINED AS ONLY TRADE-IN ALLOWANCES ON THE PURCHASE OF NEW MACHINES COULD BE CONSIDERED; AND THIS OFFICE HAS BEEN ADVISED THAT SAID DEALERS WERE PREPARED TO SUBMIT HIGHER CASH BIDS FOR THE OLD MACHINES THAN THE ALLOWANCES OFFERED BY THE MANUFACTURERS.

IT WAS CLEARLY NOT THE PURPOSE OF THE CONGRESS BY THE PASSAGE OF THE ACT OF MARCH 4, 1915, 38 STAT. 1161, REFERRED TO HEREINBEFORE, TO PERMIT THE VARIOUS DEPARTMENTS TO MAKE SUCH EXCHANGES CONTRARY TO THE INTERESTS OF THE UNITED STATES.

IN DECISION OF NOVEMBER 13, 1923, 3 COMP. GEN. 304, THERE WAS CONSIDERED WHETHER IN THE PURCHASE OF CERTAIN PRESSES FOR USE IN THE BUREAU OF ENGRAVING AND PRINTING IT WAS PERMISSIBLE TO EXCHANGE THE OLD PRESSES FOR THE NEW ONES AT THE PRICES WHICH THE DEALERS FROM WHOM THE NEW EQUIPMENT WAS TO BE PURCHASED WERE WILLING TO ALLOW FOR THE OLD EQUIPMENT, AND IN THE COURSE OF SAID DECISION IT WAS SAID AND HELD:

* * * IT IS ASSUMED THAT YOU WILL OBTAIN COMPETITION AS CONTEMPLATED UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, IN THE MATTER OF ANY EQUIPMENT PURCHASES WHICH YOU MAY DEEM IT NECESSARY TO MAKE AND THAT YOU WILL OBTAIN THE BEST PRICE AVAILABLE FOR ANY OLD EQUIPMENT THE DISPOSITION OF WHICH IS IN THE INTEREST OF THE GOVERNMENT. * * *

IF THE LOWEST RESPONSIBLE BIDDER ON THE NEW EQUIPMENT TO BE PURCHASED WILL ALLOW AS MUCH OR MORE FOR THE OLD EQUIPMENT * * * THAN COULD BE OBTAINED THEREFOR FROM A SALE IN THE OPEN MARKET THERE IS NO LEGAL OBJECTION TO THE SALE OF SAID OLD EQUIPMENT TO SUCH BIDDER. * * * (SEE ALSO 5 COMP. GEN. 798.)

THE SAME PROCEDURE SHOULD BE FOLLOWED IN DISPOSING OF OLD AND ACQUIRING NEW ADDING MACHINES OR OTHER EQUIPMENT THE EXCHANGE OF WHICH IS AUTHORIZED BY LAW. THAT IS, TO SAY, WHERE THE LAW SPECIFICALLY AUTHORIZES AN EXCHANGE, THE AMOUNT ALLOWED FOR THE OLD EQUIPMENT WILL NOT BE CHARGED TO THE APPROPRIATION AND CARRIED TO MISCELLANEOUS RECEIPTS, 3 COMP. GEN. 606, BUT THE PROCEDURE TO BE FOLLOWED IN DETERMINING WHETHER IN SUCH CASES THERE SHOULD BE AN EXCHANGE OR A PURCHASE AND SALE IS REQUIRED, UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, AND IN THE INTERESTS OF THE UNITED STATES, SHOULD BE AS INDICATED IN 3 COMP. GEN. 304, AND 5 COMP. GEN. 798, AND IF THE CASH BIDS RECEIVED ON THE OLD EQUIPMENT EXCEED THE EXCHANGE ALLOWANCE OFFERED, SUCH CASH BIDS MUST BE ACCEPTED AND THE PROCEEDS THEREOF DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS IN COMPLIANCE WITH THE PROVISIONS OF SECTION 3618, REVISED STATUTES. IT IS ONLY IN THOSE CASES IN WHICH THE EXCHANGE ALLOWANCE EQUALS OR EXCEEDS THE AMOUNT THAT CAN BE OBTAINED IN CASH FOR THE OLD EQUIPMENT THAT AN EXCHANGE IS AUTHORIZED AND THE APPROPRIATION IS CHARGEABLE WITH ONLY THE DIFFERENCE BETWEEN THE COST OF THE NEW EQUIPMENT AND THE ALLOWANCE ON THE OLD.

WITH RESPECT TO EXCHANGES OF TYPEWRITING MACHINES IT IS PROPER THAT ATTENTION BE INVITED, ALSO, TO THE PROVISIONS IN THE ACT OF JANUARY 26, 1927, 44 STAT. 1030, AND DECISIONS OF MARCH 11, 1924, 3 COMP. GEN. 606, AND JULY 30, 1927, A-16378.