A-35985, MAY 5, 1931, 10 COMP. GEN. 501

A-35985: May 5, 1931

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ADVERTISING - SPECIFICATIONS - SUPPLEMENTAL PROPOSALS THE PROCEDURE OF MAKING CHANGES IN SPECIFICATIONS AFTER PROPOSALS ARE RECEIVED AND OPENED AND THEN REPEATEDLY REQUESTING SUPPLEMENTAL PROPOSALS FROM THE BIDDERS SHOULD BE DISCONTINUED AS NOT IN ACCORDANCE WITH LAW AND UNFAIR TO BIDDERS WITH THE PROBABILITY THAT COMPETITION ON GOVERNMENT PROJECTS WILL BE DISCOURAGED. TO THE EFFECT THAT ON THE BASIS OF THE FACTS THEN BEFORE THIS OFFICE THERE WAS NO AUTHORITY TO ENTER INTO A CONTRACT WITH THE N. SUBMITTING ADDITIONAL INFORMATION WITH RESPECT TO THE MATTER AND REPORTING THAT THE CONTRACT FOR THE WORK WAS SIGNED ON MARCH 28. IT APPEARS THAT WHEN THE WORK WAS ORIGINALLY ADVERTISED ON DECEMBER 12.

A-35985, MAY 5, 1931, 10 COMP. GEN. 501

ADVERTISING - SPECIFICATIONS - SUPPLEMENTAL PROPOSALS THE PROCEDURE OF MAKING CHANGES IN SPECIFICATIONS AFTER PROPOSALS ARE RECEIVED AND OPENED AND THEN REPEATEDLY REQUESTING SUPPLEMENTAL PROPOSALS FROM THE BIDDERS SHOULD BE DISCONTINUED AS NOT IN ACCORDANCE WITH LAW AND UNFAIR TO BIDDERS WITH THE PROBABILITY THAT COMPETITION ON GOVERNMENT PROJECTS WILL BE DISCOURAGED, RESULTING IN THE END IN HIGHER COSTS TO THE UNITED STATES. SPECIFICATIONS SHOULD BE CONSERVATIVELY DRAFTED SO AS TO BRING THE COST OF THE PROJECT WITHIN THE AVAILABLE FUNDS THEREFOR, MAKING CHANGES IN THE SPECIFICATIONS UNNECESSARY.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, MAY 5, 1931:

THERE HAS BEEN RECEIVED IN REFERENCE TO DECISION DATED APRIL 16, 1931, TO THE EFFECT THAT ON THE BASIS OF THE FACTS THEN BEFORE THIS OFFICE THERE WAS NO AUTHORITY TO ENTER INTO A CONTRACT WITH THE N. P. SEVERIN CO. FOR THE CONSTRUCTION OF THE BOSTON POST OFFICE BUILDING, YOUR LETTERS OF APRIL 18 AND 21, 1931, SUBMITTING ADDITIONAL INFORMATION WITH RESPECT TO THE MATTER AND REPORTING THAT THE CONTRACT FOR THE WORK WAS SIGNED ON MARCH 28, 1931, AND SURETY BOND GIVEN BY THE CONTINENTAL CASUALTY CO. IN THE AMOUNT OF $2,400,000 FOR THE FAITHFUL PERFORMANCE OF THE CONTRACT.

AS STATED IN THE DECISION OF APRIL 16, 1931, IT APPEARS THAT WHEN THE WORK WAS ORIGINALLY ADVERTISED ON DECEMBER 12, 1930, ALTERNATE BIDS WERE REQUESTED, BID NO. 1 WITH GRANITE TO THE THIRD STORY AND LIMESTONE FOR THE BALANCE OF THE BUILDING, AND BID NO. 2 WITH GRANITE FOR ALL OF THE STORIES. THERE WERE RECEIVED 14 PROPOSALS FOR DOING THIS WORK, EACH BIDDER SUBMITTING BIDS ON THE BASIS OF ALTERNATE NO. 1 AND ALTERNATE NO. 2. IT WAS REPORTED IN YOUR LETTER OF APRIL 11, 1931, AND IS REPEATED IN THE LETTER OF APRIL 18, 1931, THAT AFTER THESE PROPOSALS WERE RECEIVED, IT WAS CONCLUDED TO AGREE TO THE REQUEST OF THE "ENTIRE MASSACHUSETTS CONGRESSIONAL DELEGATION AS WELL AS OTHER NEW ENGLAND REPRESENTATIVES" AND CONSTRUCT THE BUILDING OF THE NATIVE STONE OF NEW ENGLAND, NAMELY, GRANITE, RATHER THAN LIMESTONE, AND THAT CERTAIN CHANGES WERE MADE IN THE SPECIFICATIONS WITH REQUEST TO EACH OF THE 14 BIDDERS THAT THEY SUBMIT A SUPPLEMENTAL BID BASED ON THE USE OF GRANITE WITH CERTAIN CHANGES AS TO FEATURES OF THE BUILDING HEREINAFTER MENTIONED. IT FURTHER APPEARS THAT 10 OF THE ORIGINAL BIDDERS SUBMITTED SUCH SUPPLEMENTAL BIDS AND IT WAS ADMINISTRATIVELY CONCLUDED THAT THE LOWEST OF SUCH SUPPLEMENTAL BIDS WAS IN EXCESS OF THE AVAILABLE FUNDS FOR THE CONSTRUCTION OF THE WORK, AND FURTHER CHANGES WERE MADE IN THE SPECIFICATIONS WITH A SECOND REQUEST TO THE BIDDERS TO SUBMIT SUPPLEMENTAL PROPOSALS. IT SEEMS THAT THIS TIME SEVEN OF THE ORIGINAL BIDDERS SUBMITTED SUCH SUPPLEMENTAL PROPOSALS, THAT OF N. P. SEVERIN CO. BEING THE LOWEST, IN THE SUM OF $4,648,900, AS COMPARED WITH ITS ORIGINAL PROPOSAL ON THE GRANITE BASIS OF $5,678,500.

IT IS STATED IN YOUR LETTER OF APRIL 21, 1931, THAT AN ESTIMATE OF THE VARIOUS ITEMS INVOLVED IN THE SUPPLEMENTAL BIDDING IS AS FOLLOWS:

TABLE

MAJOR CHANGES GRANITE AND FACING CHANGES ----------------------------- -- - $600,000.00 CARVING AND ORNAMENTATION CHANGED TO TERRA COTTA ----- ----- 135,000.00 BRONZE TO CAST IRON AND STEEL ---------------------- ------- 100,000.00 MARBLE OMISSION ----------------------------------- -------- 75,000.00

MINOR CHANGES GLAZED BRICK TO COMMON BRICK - ---------------------------- - 6,000.00 GLASS IN METAL PARTITION --- ------------------------------- 3,000.00PROMENADE TILE TO COMPOSITION ROOF ------------------------- 15,000.00 MARBLE FLOOR TO TERRAZZO -----------------------------------

5,000.00 OMIT FILL FOR TERRA COTTA FURRING ------------------------ - 8,000.00 MISCELLANEOUS CHANGES ----------------------------------- -- 9,800.00

956,800.00

IT IS FURTHER EXPLAINED THAT IT WAS ESTIMATED THE INITIAL EXPENSE IN PREPARING A PROPOSAL FOR THE CONSTRUCTION OF A BUILDING SUCH AS THE PROPOSED BOSTON POST OFFICE BUILDING WAS FROM $2,500 TO $10,000, TO EACH BIDDER, AND THAT THERE HAS BEEN FOLLOWED IN THE DEPARTMENT THE PRACTICE OF REQUESTING SUPPLEMENTAL PROPOSALS RATHER THAN THE REJECTION OF ALL PROPOSALS AND A READVERTISEMENT FOR THE WORK WHEN IT IS FOUND NECESSARY TO MAKE CHANGES IN ORDER TO SECURE A PROPOSAL WITHIN THE FUNDS AVAILABLE FOR THE CONSTRUCTION WORK. YOUR STATEMENT WITH RESPECT TO THIS MATTER IS AS FOLLOWS:

* * * IF, AFTER WORK HAS BEEN PLACED ON THE MARKET AND BEFORE AN AWARD CAN BE MADE, THE SITUATION ARISES THAT A BUILDING MUST BE REDESIGNED IN SOME OF ITS ESSENTIAL CHARACTERISTICS CALLING FOR ADDITIONAL STORIES OR RADICAL STRUCTURAL CHANGES SO THAT EXTENSIVE NEW WORK IS INVOLVED, OR THE ORIGINAL DRAWINGS AND SPECIFICATIONS MUST BE MORE OR LESS REVISED, IT IS OBVIOUS THAT THE ORIGINAL BIDS MUST BE REJECTED AND THE JOB RE-ADVERTISED, AFTER THE NECESSARY REVISIONS HAVE BEEN MADE. IT HAPPENS, HOWEVER, ON OCCASION, THAT A SET OF BIDS FOR A PARTICULAR JOB ARE SUCH THAT A CONTRACT CANNOT BE AWARDED FOR THE AMOUNT AVAILABLE FOR THE WORK, BUT A STUDY OF THE SPECIFICATIONS INDICATES THAT CHANGES IN THE FACING MATERIAL ON THE BUILDING, THE USE OF LESS EXPENSIVE METAL FOR SCREEN GRILL WORK OR DOORS, OR LIKE VARIATIONS WILL PROVIDE TO ALL INTENTS AND PURPOSES THE SAME BUILDING, HAVING THE SAME UTILITY AND THE SAME STRUCTURAL COMPLETENESS WITH THE SAME AVAILABLE FLOOR AREA AND THAT SUCH CHANGES WOULD PERMIT THE BUILDING TO BE CONSTRUCTED AT A LESSER COST THAN THE BEST OF THE BIDS RECEIVED. IN SUCH CASES, THE DEPARTMENT HAS FOLLOWED THE PRACTICE OF CALLING FOR SUPPLEMENTAL BIDS FROM ALL BIDDERS UNDER THE ORIGINAL BIDDING, AS OUTLINED IN YOUR DECISION OF AUGUST 9, 1926 (A-15241), AND FINDS THAT SUCH PROCEDURE IS ADVANTAGEOUS TO THE GOVERNMENT IN THE SAVING OF TIME AND EXPENSE. SUCH SUPPLEMENTAL BIDS ARE CALLED FOR ON THE BASIS OF ADDENDA TO THE SPECIFICATIONS ASKING FOR DEDUCTIONS FOR THE ITEMS SPECIFIED. NO NEW DRAWINGS ARE GENERALLY NECESSARY AND THE BIDDERS, HAVING ALREADY AVAILABLE THEIR ESTIMATE SHEETS ON WHICH THEY BASED THEIR ORIGINAL BIDS, ARE IN A POSITION TO MAKE DEDUCTIONS PROMPTLY AND AT LITTLE EXPENSE.

IF SUCH WORK WERE RE-ADVERTISED, IT WOULD MEAN ALL OF THE DELAY OF SIX WEEKS OR MORE NECESSARY FOR ADVERTISING NEW WORK, WITH LITTLE LIKELIHOOD OF ANY PRACTICAL ADVANTAGEOUS RESULT TO THE GOVERNMENT.

IN THE PRESENT CASE, THE BUILDING, AS BASED ON THE AWARDED CONTRACT,WILL BE SUBSTANTIALLY THE SAME STRUCTURE CALLED FOR IN THE ORIGINAL BIDDING. ITS STRUCTURAL FUNDAMENTALS WILL BE THE SAME, ITS LAY-OUT AND UTILITY WILL BE THE SAME AS ORIGINALLY CONTEMPLATED, AND ITS APPEARANCE WILL BE SUBSTANTIALLY IDENTICAL WITH THE ORIGINAL ELEVATIONS. NO NEW MATTER WAS ADDED BY THE ADDENDA AND IF NEW BIDS HAD BEEN CALLED FOR, THE BIDDERS WOULD HAVE HAD TO MAKE THEIR BIDS ON EXACTLY THE SAME PLANS AND SPECIFICATIONS AS ORIGINALLY, EXCEPT AS TO A DIFFERENT THICKNESS OF GRANITE AND A CHANGE TO TERRA-COTTA IN LIEU OF CARVING AND ORNAMENTATION OF THE EXTERIOR, THE ELIMINATION OF MARBLE WAINSCOTS IN CORRIDORS OF UPPER STORIES, THE DIFFERENCE IN COST BETWEEN IRON AND BRONZE FOR GRILL AND SCREEN WORK, AND CERTAIN MINOR ELEMENTS WHICH ARE ALSO IN THE NATURE OF DEDUCTIONS.

IT IS PROPER, IN THIS CONNECTION, TO REFER TO THE FACT THAT THERE WAS AN EFFORT MADE TO SECURE AN AMENDMENT TO THE FIRST DEFICIENCY APPROPRIATION BILL SO AS TO INCREASE THE ITEM OF $6,000,000 FOR THE CONSTRUCTION OF THE BOSTON POST OFFICE BUILDING TO $6,750,000 ON THE GROUND THAT THE BUILDING SHOULD BE CONSTRUCTED OF GRANITE, A STONE NATIVE TO NEW ENGLAND, RATHER THAN OF GRANITE TO THE THIRD STORY AND LIMESTONE ABOVE THE THIRD STORY, AS WAS PROPOSED BY THE TREASURY DEPARTMENT, AND THE DISCUSSION OF THE PROPOSED AMENDMENT IS CONTAINED IN 72 CONGRESSIONAL RECORD 5568 TO 6544, INCLUSIVE. AT THE CONCLUSION OF THE DEBATE, THE AMENDMENT WAS REJECTED BY A DECISIVE VOTE.

NOTWITHSTANDING THE DEFEAT OF THE PROPOSAL THAT ADDITIONAL FUNDS BE PROVIDED TO MAKE POSSIBLE THE USE OF GRANITE FOR THE ENTIRE STRUCTURE, IT IS UNDERSTOOD THAT TO SATISFY LOCAL DEMANDS IT WAS CONCLUDED BY YOUR DEPARTMENT TO MAKE CERTAIN SUBSTITUTIONS OF MATERIALS, ELIMINATIONS, ETC., WITHOUT CHANGING THE SIZE OR DIMENSIONS OF THE BUILDING, AND THEREBY REDUCE COSTS ON CERTAIN ITEMS AND EXPEND THESE SAVINGS UPON GRANITE FOR THE ENTIRE EXTERIOR INSTEAD OF LIMESTONE ABOVE THE THIRD STORY. IT NOW APPEARS FROM YOUR REPORTS TO THIS OFFICE THAT SUCH SUBSTITUTIONS, ELIMINATIONS, ETC., REDUCE COSTS APPROXIMATELY $1,000,000. IN OTHER WORDS, TO PERMIT THE USE OF GRANITE THROUGHOUT THERE HAS BEEN OTHERWISE TAKEN FROM THE BUILDING AS ORIGINALLY PLANNED AND SUBMITTED FOR BIDS, A VALUE APPROXIMATING $1,000,000. IN VIEW OF THE WELL-KNOWN FACT THAT AN APPROPRIATION GENERAL IN TERMS IS AVAILABLE ONLY TO ACQUIRE A NEED OF THE UNITED STATES, IT IS DIFFICULT TO UNDERSTAND HOW THERE CAN BE JUSTIFIED THE SPECIFYING IN THE STRUCTURE AS ORIGINALLY PLANNED AND SUBMITTED FOR BIDS, WHAT NOW APPEAR AS NONESSENTIALS APPROXIMATING $1,000,000 IN VALUE.

THE LETTING OF PUBLIC WORK IN THE MANNER FOLLOWED IN THIS CASE IS UNFAIR TO BIDDERS, MILITATES AGAINST THE INTERESTS OF THE UNITED STATES, AND IS OUT OF HARMONY WITH THE PURPOSES OF THE CONTROLLING STATUTES. THE LAW REQUIRES THAT THERE SHALL FIRST BE CLEARLY DISCLOSED, THROUGH PROPER PLANS AND SPECIFICATIONS, THE NEED OF THE UNITED STATES; THAT THERE SHALL BE FULL AND FREE COMPETITION IN BIDDING THEREON, AND THAT THE BID OF THE LOW RESPONSIBLE BIDDER SHALL BE ACCEPTED. THERE CAN BE ATTRACTED TO GOVERNMENT WORK THE BEST TALENT AND LOW BIDDING ENCOURAGED ONLY BY FAITHFUL OBSERVANCE OF THE LAW. IF THE ADMINISTRATIVE COURSE BE TO SPECIFY AND SEEK BIDS ON MORE THAN THE NEED OR IN EXCESS OF AVAILABLE FUNDS, WITH A PURPOSE, AFTER THE OPENING OF THE BIDS, TO MAKE ELIMINATIONS, CHANGES, ETC., AND TO REQUIRE FURTHER BIDS THEREON, PERHAPS THE WORK IS RENDERED LESS DIFFICULT FOR ADMINISTRATIVE OFFICIALS BUT THE BIDDING IS PERMITTED TO BECOME SO INVOLVED, IF NOT OPEN TO ABUSES, THAT LOW BIDDING IN THE FIRST INSTANCES, AS TO FUTURE PROJECTS, IS DISCOURAGED.

THE GOVERNMENT CAN EXPECT THE BEST RESULTS--- FAIR AND LOW BIDS BY CAPABLE AND RESPONSIBLE CITIZENS--- ONLY IF ITS FIXED PROCEDURE IS SUCH AS TO GIVE ASSURANCE THAT EACH PARTICULAR PROJECT HAS HAD SUCH MATURE STUDY AND CONSIDERATION BEFORE SUBMISSION FOR BIDS AS TO RENDER QUITE UNNECESSARY OTHER THAN POSSIBLY A FEW MINOR CHANGES--- AND NEVER SUCH WHOLE SUBSTITUTIONS, ELIMINATIONS, ETC., AS WERE MADE IN THE INSTANT CASE.

ACCEPTING THAT AFTER THE COST REDUCTION OF NEARLY $1,000,000, THROUGH SUBSTITUTION OF MATERIALS, ELIMINATIONS, ETC., AS DISCLOSED BY YOUR REPORTS TO THIS OFFICE, THE PROPOSED BUILDING REMAINS THE SAME IN SIZE AND DIMENSIONS AS ORIGINALLY BID UPON, AND WILL SERVE ALL PURPOSES OF THE GOVERNMENT AS WOULD THE STRUCTURE AS ORIGINALLY PLANNED, IN VIEW OF THE FACT THAT THE CONTRACT WAS ACTUALLY SIGNED MORE THAN A MONTH AGO AND IT IS UNDERSTOOD THE CONTRACTOR HAS PLACED SUBSTANTIAL ORDERS FOR MATERIALS, ETC., THIS OFFICE WILL WITHHOLD FURTHER OBJECTION. IT IS URGED, HOWEVER, THAT THE ADMINISTRATIVE PROCEDURE IN SUCH MATTERS BE PROMPTLY CORRECTED.