A-30732, MARCH 7, 1930, 9 COMP. GEN. 387

A-30732: Mar 7, 1930

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WHICH WHEN ACCOMPLISHED ARE FOR FILING IN THE GENERAL ACCOUNTING OFFICE AS REQUIRED BY SECTION 3743. THERE HAS BEEN DISCLOSED A PROCEDURE THAT IS APPARENTLY BEING FOLLOWED IN THE PURCHASING OFFICE OF THE DISTRICT OF COLUMBIA. EXCEPTIONS HAVE BEEN TAKEN TO PAYMENTS MADE ON VOUCHERS 3185. ON WHICH PAYMENTS WERE MADE TO DIFFERENT CONCERNS IN EXCESS OF THE LIMIT OF $25 AUTHORIZED BY THE ACT OF MARCH 2. THE SUPPLIES FOR WHICH PAYMENTS WERE MADE WERE SECURED IN ACCORDANCE WITH SECTION 4 (B) AND (C) OF THE METHOD STATED ON THE REVERSE SIDE OF THE VOUCHERS. THAT IS. IT BEING IMPRACTICABLE TO SECURE COMPETITION" BECAUSE "THE ARTICLES ARE PATENTED OR COPYRIGHTED AND NOT ON SALE BY DEALERS. " AND "THERE IS ONLY ONE DEALER WITHIN A PRACTICABLE DISTANCE FROM WHOM THE ARTICLES CAN BE OBTAINED.

A-30732, MARCH 7, 1930, 9 COMP. GEN. 387

CONTRACTS - AMOUNTS - FORMAL AND INFORMAL - FILING IN GENERAL ACCOUNTING OFFICE THE PROVISIONS IN THE SEVERAL STATUTES AUTHORIZING CERTAIN DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS OF THE GOVERNMENT TO MAKE PURCHASES IN THE OPEN MARKET WITHOUT COMPLIANCE WITH SECTION 3709, REVISED STATUTES, WHEN FOR LESS THAN SPECIFIED AMOUNTS, DO NOT AUTHORIZE THE MAKING OF PURCHASES EXCEEDING THOSE AMOUNTS, EXCEPT IN CASE OF AN EMERGENCY, WITHOUT ENTERING INTO CONTRACTS THEREFOR, EITHER FORMAL OR INFORMAL, WHICH WHEN ACCOMPLISHED ARE FOR FILING IN THE GENERAL ACCOUNTING OFFICE AS REQUIRED BY SECTION 3743, REVISED STATUTES.

ACTING COMPTROLLER GENERAL GINN TO THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA, MARCH 7, 1930:

IN THE AUDIT OF THE ACCOUNTS OF J. R. LUSBY, DISBURSING OFFICER, DISTRICT OF COLUMBIA, FOR THE SECOND QUARTER, 1929, THERE HAS BEEN DISCLOSED A PROCEDURE THAT IS APPARENTLY BEING FOLLOWED IN THE PURCHASING OFFICE OF THE DISTRICT OF COLUMBIA, WITH RESPECT TO THE PROCURING OF PURCHASES EXCEEDING $25 IN AMOUNT, THAT APPEARS TO BE IN CONTRAVENTION OF LAW AND THE DECISIONS OF THIS OFFICE PRESCRIBING THE PROCEDURE TO BE FOLLOWED IN SUCH MATTER.

EXCEPTIONS HAVE BEEN TAKEN TO PAYMENTS MADE ON VOUCHERS 3185, 3243, 3457, 3461, 3493, 3548, 3552, OCTOBER, AND 8270, NOVEMBER, 1929, ACCOUNTS OF MR. LUSBY, ON WHICH PAYMENTS WERE MADE TO DIFFERENT CONCERNS IN EXCESS OF THE LIMIT OF $25 AUTHORIZED BY THE ACT OF MARCH 2, 1911, 36 STAT. 975, TO BE MADE IN THE OPEN MARKET WITHOUT ADVERTISING. AN EXAMINATION OF THESE VOUCHERS SHOWS THAT WITH THE EXCEPTION OF VOUCHER 8270, THE SUPPLIES FOR WHICH PAYMENTS WERE MADE WERE SECURED IN ACCORDANCE WITH SECTION 4 (B) AND (C) OF THE METHOD STATED ON THE REVERSE SIDE OF THE VOUCHERS, THAT IS,"WITHOUT ADVERTISING, IT BEING IMPRACTICABLE TO SECURE COMPETITION" BECAUSE "THE ARTICLES ARE PATENTED OR COPYRIGHTED AND NOT ON SALE BY DEALERS, BUT BY THE OWNERS OF THE PATENT OR COPYRIGHT OR THEIR AGENTS OR ASSIGNS ALONE, AT FIXED AND UNIFORM PRICE," AND "THERE IS ONLY ONE DEALER WITHIN A PRACTICABLE DISTANCE FROM WHOM THE ARTICLES CAN BE OBTAINED," AND THAT THE SUPPLIES FOR WHICH PAYMENT WAS MADE ON VOUCHER 8270 WERE SECURED IN ACCORDANCE WITH SECTION 5C OF THE METHOD STATED ON THE REVERSE OF THE VOUCHER, THAT IS,"WITHOUT ADVERTISING; UNDER AUTHORITY TO MAKE PURCHASES TO THE AMOUNT OF TWENTY-FIVE DOLLARS WITHOUT OBTAINING COMPETITION" AND "UNDER LESS FORMAL AGREEMENT.'

THE AMOUNTS PAID ON THE FOREGOING VOUCHERS RANGE FROM $63 TO $999.89, AND NO CONTRACTS EITHER FORMAL OR INFORMAL APPEAR TO HAVE BEEN ENTERED INTO COVERING THE SUPPLIES PAID FOR THEREON. THE MANNER IN WHICH THE SUPPLIES IN QUESTION WERE PROCURED AS INDICATED ON THE VOUCHERS, INDICATES THAT THERE EXISTS IN THE PURCHASING OFFICE OF THE DISTRICT OF COLUMBIA THE VIEW THAT WHEN FOR ANY REASON THE ADVERTISING FOR COMPETITIVE BIDS FOR THE FURNISHING OF SUPPLIES FOR THE DISTRICT OF COLUMBIA MAY BE DISPENSED WITH, THERE IS NO NECESSITY FOR WRITTEN CONTRACTS FOR SUCH SUPPLIES, EVEN THOUGH THE VALUE OF THE SUPPLIES EXCEEDS $25 IN AMOUNT.

WHILE UNDER THE ACT OF MARCH 2, 1911, IF THE AGGREGATE OF THE PURCHASES TO BE MADE OR SERVICES TO BE RENDERED DOES NOT EXCEED $25 IN AMOUNT, AND WHEN THERE EXISTS AN EMERGENCY IN THE SERVICE THAT WILL NOT ADMIT OF DELAY INCIDENT TO ADVERTISING, OR IF COMPETITION CAN NOT BE SECURED BY ADVERTISING, DUE TO THE PROPRIETARY NATURE OF THE ARTICLES DESIRED, OR FOR OTHER LIKE REASONS, THE NECESSITY FOR ADVERTISING AS REQUIRED BY SECTION 3709, REVISED STATUTES, MAY LEGALLY BE DISPENSED WITH, THERE IS NO AUTHORITY FOR THE MAKING OF PURCHASES UNDER SUCH CIRCUMSTANCES, UNLESS THERE EXISTS AN ACTUAL EMERGENCY, WHEN SUCH PURCHASES EXCEED $25 IN AMOUNT WITHOUT A WRITTEN CONTRACT THEREFOR, EITHER FORMAL CONTRACT OR PROPOSAL AND ACCEPTANCE. IN OTHER WORDS IT IS ONLY IN CASES OF ACTUAL EMERGENCIES OF AUTHORIZED OPEN MARKET PURCHASES OF LESS THAN $25 THAT THE FILING OF WRITTEN EVIDENCE OF THE TERMS OF THE CONTRACTS IN SOME FORM IS NOT REQUIRED.

SECTION 3743, REVISED STATUTES, REQUIRES THAT ALL CONTRACTS TO BE MADE BY VIRTUE OF ANY LAW AND REQUIRING THE ADVANCE OF MONEY IN ANY MANNER CONNECTED WITH THE SETTLEMENT OF PUBLIC ACCOUNTS SHALL BE DEPOSITED WITH THE ACCOUNTING OFFICERS OF THE GOVERNMENT WITHIN 90 DAYS AFTER THEIR RESPECTIVE DATES, AND IN 9 COMP. GEN. 46, IT WAS SAID THE PURPOSE OF THIS SECTION OF LAW IS TO PROVIDE THE BASIS FOR THE AUDIT OF EXPENDITURES MADE IN FULFILLMENT OF GOVERNMENT OBLIGATIONS; THAT IT IS FUNDAMENTAL THAT THERE BE WRITTEN EVIDENCE OF ALL GOVERNMENT OBLIGATIONS ON WHICH PAYMENTS ARE TO BE MADE SO THAT THE GOVERNMENT BE NOT IN THE POSITION OF RELYING UPON THE MEMORY OR RECOLLECTION OF SOME OFFICER OR EMPLOYEE TO ESTABLISH THE TERMS OF ITS OBLIGATIONS; AND THAT IT IS THIS WRITTEN EVIDENCE THAT IS REQUIRED TO BE FILED IN THIS OFFICE FOR USE IN THE AUDIT AND SETTLEMENT OF CLAIMS AND ACCOUNTS. SEE ALSO 5 COMP. GEN. 130.

WITH RESPECT TO THE PAYMENT MADE ON VOUCHER 8270, IT APPEARS THAT THE PURCHASES WERE MADE UNDER AN INFORMAL AGREEMENT BY REASON OF THE FACT THE COST OF EACH OF THE ARTICLES PROCURED WAS LESS THAN $25, BUT IT IS NOTED THAT THE ORDER OR ORDERS FOR THE ARTICLES PAID FOR ON THAT VOUCHER WERE GIVEN THE SAME DAY TO THE SAME CONCERN. IN THIS CONNECTION ATTENTION IS INVITED TO 5 COMP. GEN. 41, HOLDING, WITH REFERENCE TO INTERIOR DEPARTMENT PURCHASES, THAT THE LAW AUTHORIZING THAT DEPARTMENT TO MAKE PURCHASES NOT EXCEEDING $100 IN AMOUNT IN THE OPEN MARKET WITHOUT REGARD TO SECTIONS 3709 AND 3744, REVISED STATUTES, DID NOT AUTHORIZE A SUCCESSION OF SMALL PURCHASES MERELY TO AVOID COMPLIANCE WITH SAID SECTIONS OF THE REVISED STATUTES. THE SAME RULING APPLIES WITH EQUAL FORCE AND EFFECT TO PURCHASES MADE BY THE DISTRICT OF COLUMBIA WITHOUT ADVERTISING.

IN VIEW OF THE FOREGOING, IT MAY BE STATED THAT IN MAKING PURCHASES FOR THE NEEDS OF THE DISTRICT OF COLUMBIA, EXCEPT WHEN THE VALUE OF THE ARTICLE OR ARTICLES, DOES NOT EXCEED $25 IN AMOUNT OR WHEN THERE EXISTS AN ACTUAL EMERGENCY SUCH AS WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING, AND WRITTEN CONTRACT, THE TRANSACTION MUST BE EVIDENCED BY SOME FORM OF WRITTEN AGREEMENT, EITHER FORMAL CONTRACT OR LESS FORMAL AGREEMENT, SUCH AS PROPOSAL AND ACCEPTANCE, WHICH, WHEN ACCOMPLISHED, MUST BE FILED IN THIS OFFICE AS REQUIRED BY LAW.

THIS MATTER IS BROUGHT TO YOUR ATTENTION AT THIS TIME WITH THE OBJECT IN VIEW OF AFFORDING AN OPPORTUNITY FOR HAVING CORRECTED THE PRACTICE THAT APPEARS TO BE IN VOGUE IN THE PURCHASING OFFICE OF THE DISTRICT OF COLUMBIA IN NOT COMPLYING WITH THE CLEAR INTENT OF THE LAW AND WITH THE DECISIONS OF THIS OFFICE RESPECTING THE ENTERING INTO AND FILING IN THIS OFFICE OF FORMAL OR INFORMAL CONTRACTS COVERING THE PROCURING OF SUPPLIES WHEN THE VALUE OF SUCH SUPPLIES EXCEEDS $25 IN AMOUNT.

THE PAYMENTS MADE ON THE VOUCHERS ABOVE REFERRED TO, APPEARING NOT TO BE OBJECTIONABLE ON OTHER GROUNDS, THE DISBURSING OFFICER WILL BE GIVEN CREDIT IN HIS ACCOUNTS THEREFOR AND FOR SUCH OTHER LIKE EXPENDITURES THAT MAY BE MADE PRIOR TO THE DATE OF THIS LETTER BUT NOT THEREAFTER.