A-19811, OCTOBER 24, 1927, 7 COMP. GEN. 282

A-19811: Oct 24, 1927

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WHERE IT IS ESTABLISHED AS A FACT THAT SUCH PARTS ARE PROPRIETARY TO THE MANUFACTURER OF THE MACHINERY IN QUESTION. THAT THE MANUFACTURER IS THE SOLE DISTRIBUTOR THEREOF. 1927: I HAVE YOUR LETTER OF SEPTEMBER 7. THE MACHINERY OR TOOLS AS A UNIT ARE PURCHASED AFTER ADVERTISING UNDER BROAD SPECIFICATIONS ADMITTING WIDE COMPETITION. IN VIEW OF THE KEEN COMPETITION THERE ARE TOOLS OF MANY DIFFERENT MANUFACTURERS IN USE THROUGHOUT THE SERVICE FOR THE SAME PURPOSE. WITH THIS VARIETY OF MACHINERY AND TOOLS IN USE IT IS IMPOSSIBLE TO ANTICIPATE THE NEED FOR REPLACEMENT PARTS AND TO STOCK THOSE PARTS TO MEET ALL CONTINGENCIES. THE CONDITIONS UNDER WHICH SUCH PROPRIETARY ARTICLES ARE PURCHASED ARE SET FORTH IN ARTICLES 1607 AND 1610 OF NAVY REGULATIONS 1920.

A-19811, OCTOBER 24, 1927, 7 COMP. GEN. 282

PURCHASES - ADVERTISING - SPARE PARTS THE FACT THAT SPARE PARTS RELATE TO A PARTICULAR MAKE OF MACHINERY DOES NOT ALONE PERMIT THEIR PURCHASE FROM THE MANUFACTURER WITHOUT ADVERTISING; BUT WHERE IT IS ESTABLISHED AS A FACT THAT SUCH PARTS ARE PROPRIETARY TO THE MANUFACTURER OF THE MACHINERY IN QUESTION, THAT THE MANUFACTURER IS THE SOLE DISTRIBUTOR THEREOF, AND THAT THEY CAN NOT BE PURCHASED ELSEWHERE, THUS ELIMINATING THE QUESTION OF COMPETITION, THEY MAY BE PROCURED WITHOUT ADVERTISING, THEIR PROPRIETARY CHARACTER MAKING THE PURCHASE AN EXCEPTION TO THE REQUIREMENTS OF SECTION 3709 OF THE REVISED STATUTES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE NAVY, OCTOBER 24, 1927:

I HAVE YOUR LETTER OF SEPTEMBER 7, 1927, AS FOLLOWS:

IN THE MAINTENANCE AND UPKEEP OF SHOP MACHINERY, PNEUMATIC AND OTHER HAND TOOLS IT FREQUENTLY BECOMES NECESSARY TO BUY REPAIR PARTS TO REPLACE THOSE WORN OUT OR BROKEN IN SERVICE. THE MACHINERY OR TOOLS AS A UNIT ARE PURCHASED AFTER ADVERTISING UNDER BROAD SPECIFICATIONS ADMITTING WIDE COMPETITION. IN VIEW OF THE KEEN COMPETITION THERE ARE TOOLS OF MANY DIFFERENT MANUFACTURERS IN USE THROUGHOUT THE SERVICE FOR THE SAME PURPOSE. WITH THIS VARIETY OF MACHINERY AND TOOLS IN USE IT IS IMPOSSIBLE TO ANTICIPATE THE NEED FOR REPLACEMENT PARTS AND TO STOCK THOSE PARTS TO MEET ALL CONTINGENCIES.

WHILE THE MACHINERY OR TOOL AS A UNIT MAY NOT BE PATENTED OR THE MACHINE AS A UNIT AND CAN BE OBTAINED ONLY FROM THAT SOURCE. THE PARTS MUST BE OF THE SAME DESIGN AND CONSTRUCTION AND OF THE SAME PHYSICAL AND CHEMICAL CHARACTERISTICS TO INSURE SATISFACTORY OPERATION OF THE MACHINE OR TOOL.

THE CONDITIONS UNDER WHICH SUCH PROPRIETARY ARTICLES ARE PURCHASED ARE SET FORTH IN ARTICLES 1607 AND 1610 OF NAVY REGULATIONS 1920. PARAGRAPH 402 OF THE MANUAL OF THE SUPPLY CORPS PRESCRIBES THE NATURE AND WORDING OF THE CERTIFICATE NECESSARY TO CARRY THAT PROCEDURE INTO EFFECT. WHERE IT IS CONCLUSIVELY SHOWN FROM A REASONABLE AND LOGICAL VIEWPOINT THAT THE ARTICLE CALLED FOR AND NO OTHER WILL MEET THE SPECIFIC REQUIREMENTS OF THE SERVICE IT IS THE PRACTICE TO BUY SUCH ARTICLES PROPRIETARY.

REPAIR PARTS FOR PNEUMATIC TOOLS--- SCALING HAMMERS, CHIPPING HAMMERS, CALKING HAMMERS, ELECTRIC DRILLS, ETC.--- FALL WITHIN THIS GROUP. THESE TOOLS ARE PURCHASED UNDER SPECIFICATIONS ADMITTING COMPETITION ON THE PRODUCTS OF ALL MANUFACTURERS OF SUCH TOOLS. WHILE THE TOOLS OF SEVERAL MANUFACTURERS MAY POSSESS THE SAME GENERAL CHARACTERISTICS AND PRODUCE THE SAME RESULTS, EACH MACHINE OR UNIT IS OF AN INDIVIDUAL DESIGN AND CONSTRUCTION. THE PARTS OF MACHINES OF TWO OR MORE MANUFACTURERS ARE NOT INTERCHANGEABLE ONE WITH THE OTHER NOR WILL ONE MANUFACTURER UNDERTAKE TO MANUFACTURE REPLACEMENT PARTS FOR MACHINERY OR TOOLS MADE BY A COMPETITOR. EVEN THOUGH THE PARTS MAY NOT BE PATENTED AND IF IT WERE POSSIBLE TO DESCRIBE THE MATERIAL BY A SPECIFICATION TO ADMIT COMPETITION THERE WOULD BE NO GUARANTY OF SATISFACTORY OPERATION, MAKING IT IMPOSSIBLE TO CENTER RESPONSIBILITY FOR THE FAILURE OF A REPLACEMENT PART TO FUNCTION PROPERLY.

BECAUSE OF THE UNCERTAIN NEEDS AND THE URGENCY WHEN A NEED DOES ARISE, AND AS A GUARANTY OF PERFORMANCE UPON DELIVERY, IT IS THE PRACTICE TO BUY SUCH REPAIR PARTS PROPRIETARY FROM THE ORIGINAL MANUFACTURER OF THE MACHINERY OR TOOL.

BECAUSE OF THE CAPITAL REQUIRED TO STOCK SUCH REPAIR PARTS AND THE UNCERTAINTY OF A CASH RETURN THESE REPAIR PARTS ARE NOT STOCKED BY SEALERS. FOR THIS REASON THESE PARTS CAN BE OBTAINED ONLY FROM THE MANUFACTURER OF THE TOOL FOR WHICH THEY ARE REQUIRED.

REFERENCE MAY BE HAD TO CONTRACTS NOS-104, NOS-105, NOS-234, NOS 353, AND NOS-526, COVERING REPAIR PARTS FOR PNEUMATIC TOOLS FOR THE FISCAL YEAR 1927. THESE CONTRACTS ARE BASED UPON THE MANUACTURERS' STANDARD PRICE LISTS WITH COMMERCIAL TRADE DISCOUNTS.

THE BUREAU OF SUPPLIES AND ACCOUNTS OF THE NAVY DEPARTMENT IS NOW NEGOTIATING CONTRACTS WITH THE RESPECTIVE PNEUMATIC TOOL MANUFACTURERS FOR THE FISCAL YEAR 1928, EMBODYING THEREIN TERMS AND CONDITIONS SIMILAR TO THOSE GOVERNING CONTRACTS OF PREVIOUS YEARS. THAT NO QUESTION MAY ARISE LATER ON, YOUR ADVANCE DECISION IS REQUESTED AS TO WHETHER PAYMENTS WILL BE ALLOWED IN THE ACCOUNTS OF DISBURSING OFFICERS UNDER CONTRACTS FOR REPAIR PARTS OF THIS CHARACTER MADE DIRECT WITH THE MANUFACTURERS OF REPAIR PARTS WITHOUT ADVERTISEMENT AND WITHOUT COMPETITION.

SECTION 3709, REVISED STATUTES, PROVIDES:

ALL PURCHASES AND CONTRACTS FOR SUPPLIES OR SERVICES, IN ANY OF THE DEPARTMENTS OF THE GOVERNMENT, EXCEPT FOR PERSONAL SERVICES, SHALL BE MADE BY ADVERTISING A SUFFICIENT TIME PREVIOUSLY FOR PROPOSALS RESPECTING THE SAME, WHEN THE PUBLIC EXIGENCIES DO NOT REQUIRE THE IMMEDIATE DELIVERY OF THE ARTICLES, OR PERFORMANCE OF THE SERVICE. * * *

IT HAS BEEN HELD THAT SAID SECTION 3709 DOES NOT REQUIRE ADVERTISING WHERE ADVERTISING CAN ACCOMPLISH NO USEFUL PURPOSE, AS IN THE PURCHASE OF PATENTED OR COPYRIGHTED ARTICLES. 1 COMP. GEN. 748; 5 ID. 963; SEE ALSO 17 OP.ATTY.GEN. 84.

IN CONSIDERING THE QUESTION OF PURCHASE OF PATENTED OR COPYRIGHTED ARTICLES WITHOUT ADVERTISING A FORMER COMPTROLLER OF THE TREASURY IN 2 COMP. DEC. 632, AT PAGE 634, SAID:

* * * WHEN PATENTED OR COPYRIGHTED ARTICLES CAN NOT BE PURCHASED FROM THE TRADE GENERALLY, BUT ONLY FROM THE MANUFACTURER OR OWNER OF THE PATENT OR OF THE COPYRIGHT, IT IS CLEAR THAT NO COMPETITION IN FURNISHING SUCH ARTICLES CAN EXIST, AND THEREFORE THE PURCHASE OF SUCH ARTICLES IS NOT WITHIN THE PROVISIONS OF SECTION 3709 (REVISED STATUTES). * * *

IN CONSIDERING THE QUESTION OF PURCHASES WITHOUT ADVERTISING A FORMER COMPTROLLER OF THE TREASURY IN 14 COMP. DEC. 328, AT PAGE 331, SAID:

IF THE PATTERN OF LAMP STANDARDS PURCHASED WAS SELECTED MERELY BECAUSE THAT PATTERN WAS PREFERRED TO OTHERS WHICH WERE OBTAINABLE, I DO NOT THINK IT WOULD BE A SUFFICIENT REASON FOR NOT ADVERTISING FOR PROPOSALS THAT THE FIRM OF WHICH PURCHASED WAS THE ONLY ONE WHICH HAD THAT PATTERN. BUT IF THIS PARTICULAR PATTERN WAS THE ONLY ONE THAT WAS IN FACT SUITABLE FOR THE PURPOSE FOR WHICH IT WAS REQUIRED, AND THERE WAS ONLY ONE DEALER WHO COULD FURNISH IT, I THINK THIS STATE OF FACTS WOULD JUSTIFY ITS PURCHASE WITHOUT ADVERTISING.

SEE ALSO 22 COMP. DEC. 302.

IT IS UNDERSTOOD FROM THE FACTS SET FORTH IN YOUR LETTER THAT THE REPAIR PARTS NEEDED FOR THE MACHINERY, TOOLS, ETC., ARE PROPRIETARY TO THE MANUFACTURER OF THE PARTICULAR MACHINE; THAT THE MANUFACTURER IS THE SOLE DISTRIBUTOR OF THE SPARE PARTS NEEDED TO REPLACE THOSE WORN OR BROKEN PARTS OF A PARTICULAR MACHINE; AND THAT THEY CAN NOT BE PURCHASED FROM DEALERS IN GENERAL AND ARE THEREFORE NOT ARTICLES FOR THE FURNISHING OF WHICH THERE COULD BE ANY COMPETITION BETWEEN THE PARTICULAR MANUFACTURER AND OTHER DEALERS. WHERE SUCH FACTS APPEAR THE PURCHASE OF THE SAID SPARE PARTS MAY BE MADE WITHOUT ADVERTISING, THE PROPRIETARY CHARACTER OF THE SAID PARTS MAKING THE PURCHASE AN EXCEPTION TO THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, AND THE FACTS WITH REFERENCE TO THE PURCHASE MAY PROPERLY BE SET FORTH AS WAS DONE IN THE CONTRACTS FOR SUCH ARTICLES FOR THE FISCAL YEAR 1927.

IT IS OBSERVED THAT THE PRESENT SUBMISSION SETS FORTH THAT THE TOOLS"ARE PURCHASED UNDER SPECIFICATIONS ADMITTING COMPETITION ON THE PRODUCTS OF ALL MANUFACTURERS OF SUCH TOOLS.' THE PURCHASE OF TOOLS MUST ACCORDINGLY BE THROUGH ADVERTISING FOR PROPOSALS. THE FACT THAT THE SPARE PARTS RELATE TO A PARTICULAR MAKE OF MACHINERY DOES NOT ALONE PERMIT THE PURCHASE OF THE SPARE PARTS FROM SUCH MAKER OF THE MACHINERY. THE GENERAL RULE MUST BE TO ADVERTISE FOR PROPOSALS AND IT MUST BE SHOWN BY FACTS HOW IT WAS ASCERTAINED THAT NONE OTHER THAN THE MAKER OF OF THE MACHINERY COULD FURNISH THE SPARE PARTS. SEE IN THIS CONNECTION DECISION OF THIS OFFICE SEPTEMBER 20, 1927, A-11456, 73 MS. 663, WHERE IT APPEARED THAT PROPOSALS FOR SPARE PARTS COULD BE OBTAINED FROM OTHER THAN THE PARTICULAR MAKER OF THE ENGINE THERE UNDER CONSIDERATION.