A-33986, NOVEMBER 4, 1930, 10 COMP. GEN. 206

A-33986: Nov 4, 1930

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PURCHASES - UNITED STATES PENITENTIARY PRODUCTS THERE IS NO REQUIREMENT IN THE ACT OF MAY 27. ADVERTISEMENTS OF DEPARTMENTS AND ESTABLISHMENTS ARE NOT CONCLUSIVE OF THE REQUIREMENTS OF SUCH DEPARTMENTS AND ESTABLISHMENTS AND WHEN ANY DISPUTE ARISES BETWEEN THE DEPARTMENT OF JUSTICE AND THE PURCHASING OFFICERS OF OTHER DEPARTMENTS AS TO EITHER THE PRICE OR SUITABILITY OR CHARACTER OF PENITENTIARY PRODUCTS TO MEET THE NEEDS OF THE PURCHASING DEPARTMENT. SUCH DISPUTED QUESTIONS OF FACT ARE TO BE DETERMINED BY ARBITRATION. WAS ISSUED SEPTEMBER 22. EACH CONTAINING THE SAME NUMBER OF HANDLES AS THERE ARE BROOM HEADS IN THE CASES.' * * * * * * * * * * * * * * (TABLE OMITTED) * * * * * * * * * * * * * * IN RESPONSE TO A SEPARATE INQUIRY SEPTEMBER 20.

A-33986, NOVEMBER 4, 1930, 10 COMP. GEN. 206

PURCHASES - UNITED STATES PENITENTIARY PRODUCTS THERE IS NO REQUIREMENT IN THE ACT OF MAY 27, 1930, 46 STAT. 391, THAT PURCHASES BY OTHER DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT BE MADE FROM THE UNITED STATES PENITENTIARIES AT PRICES IN EXCESS OF CURRENT MARKET PRICES. ADVERTISEMENTS OF DEPARTMENTS AND ESTABLISHMENTS ARE NOT CONCLUSIVE OF THE REQUIREMENTS OF SUCH DEPARTMENTS AND ESTABLISHMENTS AND WHEN ANY DISPUTE ARISES BETWEEN THE DEPARTMENT OF JUSTICE AND THE PURCHASING OFFICERS OF OTHER DEPARTMENTS AS TO EITHER THE PRICE OR SUITABILITY OR CHARACTER OF PENITENTIARY PRODUCTS TO MEET THE NEEDS OF THE PURCHASING DEPARTMENT, SUCH DISPUTED QUESTIONS OF FACT ARE TO BE DETERMINED BY ARBITRATION, AS PROVIDED IN THE ACT OF MAY 27, 1930, 46 STAT. 391.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, NOVEMBER 4, 1930:

THERE HAS BEEN RECEIVED YOUR SUBMISSION OF OCTOBER 27, 1930, AS FOLLOWS:

SECTION 7 OF THE ACT OF CONGRESS DIRECTING THE FEDERAL DEPARTMENTS TO PURCHASE THE PRODUCTS OF THE PRISON INDUSTRIES (H.R. 7412: PUB. 271), PROVIDES FOR THE "* * * PURCHASE AT NOT TO EXCEED CURRENT MARKET PRICES, SUCH PRODUCTS * * * AS MEET THEIR REQUIREMENTS * * *. ANY DISPUTES AS TO PRICE, * * * SUITABILITY OR CHARACTER OF THE PRODUCTS * * * SHALL BE ARBITRATED BY A BOARD CONSISTING OF THE COMPTROLLER GENERAL OF THE UNITED STATES, THE SUPERINTENDENT OF SUPPLIES OF THE GENERAL SUPPLY COMMITTEE, AND THE CHIEF OF THE UNITED STATES BUREAU OF EFFICIENCY, OR THEIR REPRESENTATIVES. THE DECISION OF SAID BOARD SHALL BE FINAL AND BINDING UPON ALL PARTIES.'

THE INCLOSED CIRCULAR ADVERTISEMENT M-NY-31-35, FOR BRUSHES, WAS ISSUED SEPTEMBER 22, 1930, BY THE PURCHASING AND CONTRACTING OFFICER FOR THE MEDICAL DEPARTMENT AT THE NEW YORK GENERAL DEPOT (BIDS TO BE OPENED OCTOBER 8, 1930). THIS CIRCULAR INCLUDES THE FOLLOWING ITEM:

"800 EACH (74520) BROOMS, HAIR, LONG HANDLE; (HAIR FLOOR SWEEPS); AS PER U.S. ARMY SPECIFICATIONS NO. 30-26A; EACH BROOM HEAD TO BE SPRINKLED WITH NAPHTHALENE AND PACKED IN A SEPARATE CARTON, CASES TO CONTAIN UNIFORM QUANTITIES OF NOT MORE THAN 100 CARTONS; HANDLES TO BE SECURELY PACKED IN BUNDLES; BURLAPPED, EACH CONTAINING THE SAME NUMBER OF HANDLES AS THERE ARE BROOM HEADS IN THE CASES.'

* * * * * * * * * * * * * * (TABLE OMITTED) * * * * * * * * * * * * * *

IN RESPONSE TO A SEPARATE INQUIRY SEPTEMBER 20, 1930, THE PURCHASING AND CONTRACTING OFFICER FOR THE MEDICAL DEPARTMENT HAS RECEIVED THE FOLLOWING BID FROM THE PURCHASING AND SALES AGENT, DEPARTMENT OF JUSTICE, WHOSE LETTER OF OCTOBER 3, 1930, IS INCLOSED:

"* * * WE CAN SUPPLY THESE FROM OUR LEAVENWORTH BRUSH FACTORY INVOICING THEM TO YOU AT $20.40 PER DOZEN. THEY ARE MADE UP IN ACCORDANCE WITH U.S. GOVERNMENT SPECIFICATION 400A. YOU ARE ADVISED THAT WE DO NOT SUPPLY LONG HANDLES FOR FLOOR SWEEPS. * * *"

IT WILL BE NOTED THAT THE PRICE QUOTED BY THE DEPARTMENT OF JUSTICE IS APPROXIMATELY 80 PERCENT HIGHER THAN THE LOWEST BID RECEIVED IN RESPONSE TO THE CIRCULAR ADVERTISEMENT AND, IN ADDITION, REQUIRES THE MEDICAL DEPARTMENT TO ASSUME THE EXPENSE OF TRANSPORTATION FROM LEAVENWORTH, KANSAS, TO SUPPLY DEPOT AT BROOKLYN, NEW YORK, AND TO PURCHASE IN THE COMMERCIAL MARKET THE NECESSARY LONG HANDLES, THEREBY ADDING FURTHER TO THE COST OF THE COMPLETE ITEM.

IN VIEW OF THE FACT THAT THE PRISON INDUSTRY AT FORT LEAVENWORTH IS UNABLE TO FURNISH THE COMPLETE ITEM REQUIRED BY THE MEDICAL DEPARTMENT OF THE ARMY, DECISION IS REQUESTED WHETHER THE PORTION OF THE ITEM WHICH THE PRISON INDUSTRY IS ABLE TO FURNISH, I.E., THE BRUSHES ONLY, SHALL BE PURCHASES THEREFROM AND THE BALANCE OF THE ITEM, I.E., THE LONG HANDLES, PURCHASED IN THE COMMERCIAL MARKET.

IF DECISION ON THE ABOVE QUESTION BE IN THE AFFIRMATIVE, IT IS RECOMMENDED THAT THE PRICE TO BE PAID FOR THE BRUSHES ALONE BE ARBITRATED BY THE BOARD DESIGNATED IN THE ACT CREATING THE PRISON INDUSTRIES.

THE MOST SATISFACTORY AND APPARENTLY THE ONLY RELIABLE METHOD FOR DETERMINING FROM THE GOVERNMENT'S STANDPOINT CURRENT MARKET PRICES IS BY ADVERTISING THE NEEDS OF THE GOVERNMENT AND SECURING COMPETITION THEREON. AS YOU HAVE POINTED OUT IN THE SUBMISSION, THE PRICES QUOTED FOR THE BRUSH PART OF THE BROOM, DELIVERED F.O.B. FORT LEAVENWORTH, BY THE UNITED STATES PENITENTIARY IS APPROXIMATELY 80 PERCENT HIGHER THAN THE LOWEST BID RECEIVED FOR DELIVERY OF THE ENTIRE BROOM--- BOTH BRUSH AND HANDLE--- DELIVERED TO THE UNITED STATES AT THE BROOKLYN GENERAL DEPOT. THERE IS NO REQUIREMENT IN THE ABOVE REFERRED TO ACT OF MAY 27, 1930, THAT THE VARIOUS DEPARTMENTS AND ESTABLISHMENTS PURCHASE FROM THE UNITED STATES PENITENTIARY AT PRICES EXCEEDING THE CURRENT MARKET PRICES. HOWEVER, ASIDE FROM THIS FEATURE OF THE MATTER, WHICH IS NOT DETERMINATIVE OF THE ISSUE SUBMITTED IN THIS CASE, A TENDER OF THE UNITED STATES PENITENTIARY OF BRUSHES WHEN THE ADVERTISED REQUIREMENT IS FOR BOTH BRUSHES AND HANDLES; THAT IS FOR THE COMPLETE BROOM, IS NOT THE TENDER OF A PRODUCT MEETING THE WAR DEPARTMENT'S ADVERTISED REQUIREMENT. A BROOM IS NOT COMPLETE WITHOUT A HANDLE AND IT HAS NOT BEEN SHOWN THAT HANDLES PURCHASED UNDER THE GENERAL SUPPLY SCHEDULE, AS SUGGESTED IN LETTER OF OCTOBER 3, 1930, FROM THE PURCHASING AND SALES AGENT OF THE DEPARTMENT OF JUSTICE, OR ELSEWHERE, WOULD FIT THE ASSUMING THAT THE HANDLES WOULD FIT OR COULD BE MADE TO FIT THE BRUSHES SO MANUFACTURED, THE QUESTION REMAINS WHETHER THE BRUSHES OBTAINABLE FROM THE UNITED STATES PENITENTIARY WOULD MEET THE ACTUAL REQUIREMENTS OF THE WAR DEPARTMENT NOTWITHSTANDING THE ADVERTISEMENT WAS FOR BOTH THE BRUSHES AND HANDLES--- THAT IS, FOR BROOMS. UNDER THE TERMS OF THE STATUTE, THE ADVERTISEMENT IS NOT CONCLUSIVE OF THE REQUIREMENT. THIS PRESENTS A QUESTION OF FACT WHICH THIS OFFICE IS NOT AUTHORIZED TO DECIDE. SHOULD ANY DISPUTE ARISE BETWEEN THE WAR DEPARTMENT AND THE DEPARTMENT OF JUSTICE AS TO THE SUITABILITY OF THE BRUSHES TO MEET THE NEEDS OF THE WAR DEPARTMENT FOR BROOMS AS WELL AS TO THE PRICE TO BE PAID THEREFOR, SAID DISPUTE WILL BE FOR DETERMINATION BY THE BOARD OF ARBITRATION DESIGNATED IN SECTION 7 OF THE ACT OF MAY 27, 1930. SHOULD SUCH DISPUTE ARISE, THE SPECIFIC ISSUE OR ISSUES JOINED SHOULD BE STATED AND EACH OFFICIAL DESIGNATED IN THE ACT OF MAY 27, 1930, AS THE BOARD OF ARBITRATORS, SHOULD BE NOTIFIED SO THAT THEY MAY ARRANGE FOR HEARING AND DETERMINING THE DISPUTE, OR DESIGNATE REPRESENTATIVES TO DO SO, AS AUTHORIZED IN SAID SECTION.