A-54083, MARCH 1, 1934, 13 COMP. GEN. 233

A-54083: Mar 1, 1934

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TIE BIDS - SELECTION BY LOT - VIOLATION OF THE ANTITRUST LAWS WHERE THERE ARE SEVERAL. OR MORE THAN ONE LOW BID IN THE SAME AMOUNT AND THERE IS NO CHOICE AS TO QUALITY AMONG THE SEVERAL OFFERINGS OF THE LOW BIDDERS SUBMITTING IDENTICAL BIDS AS TO PRICE. IS ONE FOR THE DETERMINATION OF THE FEDERAL TRADE COMMISSION AND/OR THE DEPARTMENT OF JUSTICE. IN A CASE WHERE SEVERAL IDENTICAL LOW PROPOSALS FOR THE SAME QUALITY OF MATERIALS WERE RECEIVED AND THE CONTRACTOR WAS SELECTED BY DRAWING LOTS. IS RESPECTFULLY SOLICITED. IS ONE FOR THE DETERMINATION OF THE FEDERAL TRADE COMMISSION AND/OR THE DEPARTMENT OF JUSTICE. IT IS SUGGESTED THAT IF THERE BE ANY ADMINISTRATIVE DOUBT WITH RESPECT THERETO. THE SECOND QUESTION IS ONE INVOLVING THE USES OF APPROPRIATED MONEYS FOR PAYMENT TO THE BIDDER SELECTED BY LOT FROM A NUMBER OF BIDDERS SUBMITTING IDENTICAL LOW BIDS FOR THE DELIVERY OF MATERIAL OR SUPPLIES OF EQUAL QUALITY AND IS PROPERLY FOR DETERMINATION HERE.

A-54083, MARCH 1, 1934, 13 COMP. GEN. 233

TIE BIDS - SELECTION BY LOT - VIOLATION OF THE ANTITRUST LAWS WHERE THERE ARE SEVERAL, OR MORE THAN ONE LOW BID IN THE SAME AMOUNT AND THERE IS NO CHOICE AS TO QUALITY AMONG THE SEVERAL OFFERINGS OF THE LOW BIDDERS SUBMITTING IDENTICAL BIDS AS TO PRICE, NOR ANY OTHER DETERMINING FACTOR SUCH AS DIFFERENCE IN TRANSPORTATION COSTS OF DELIVERY, THERE APPEARS NO LEGAL OBJECTION TO THE SELECTION OF ONE OF THE BIDS BY DRAWING LOTS FOR THE AWARD OF THE CONTRACT. THE QUESTION AS TO WHETHER THE SUBMISSION OF IDENTICAL BIDS BY ALL OR SEVERAL BIDDERS CONSTITUTES SUCH EVIDENCE OF VIOLATION OF THE ANTITRUST LAWS, RELATING TO CONSPIRACIES, MONOPOLIES, AND MONOPOLISTIC PRACTICES JUSTIFYING RESORT TO JUDICIAL PROCEEDINGS, IS ONE FOR THE DETERMINATION OF THE FEDERAL TRADE COMMISSION AND/OR THE DEPARTMENT OF JUSTICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, MARCH 1, 1934:

THERE HAS BEEN RECEIVED, PRESUMABLY BY YOUR DIRECTION, A LETTER DATED FEBRUARY 27, 1934, FROM A. D. BAILEY, JR., ACTING SPECIAL AGENT IN CHARGE, DIVISION OF INVESTIGATIONS, FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, AS FOLLOWS:

THE ATTENTION OF THIS OFFICE HAS BEEN CALLED TO THE AWARD OF A CONTRACT BY ONE OF THE FEDERAL DEPARTMENTS, IN A CASE WHERE SEVERAL IDENTICAL LOW PROPOSALS FOR THE SAME QUALITY OF MATERIALS WERE RECEIVED AND THE CONTRACTOR WAS SELECTED BY DRAWING LOTS.

THE OPINION OF THE COMPTROLLER GENERAL, RELATIVE TO THE LEGALITY OR REGULARITY OF THIS PROCEDURE, AND SUCH SUGGESTIONS AS HE MAY DESIRE TO MAKE RELATIVE TO ALTERNATIVE PROCEDURE, IS RESPECTFULLY SOLICITED.

THE SUBMISSION INVOLVES TWO QUESTIONS: (1) WHETHER THE SUBMISSION OF SEVERAL IDENTICAL LOW BIDS CONSTITUTES SUFFICIENT EVIDENCE OF VIOLATION BY SUCH BIDDERS OF THE ANTITRUST LAWS, INCLUDING THE PROHIBITION IN SECTION 3 (A) OF THE ACT OF JUNE 16, 1933, 48 STAT. 196, OF MONOPOLIES AND MONOPOLISTIC PRACTICES AS TO REQUIRE OFFICIAL ACTION; AND (2) WHETHER SELECTION MAY BE MADE BY LOT AS BETWEEN SEVERAL IDENTICAL LOW BIDS OFFERING MATERIAL OF EQUAL QUALITY, ETC., TO THE UNITED STATES.

THE FIRST QUESTION AS TO WHETHER THE SUBMISSION OF IDENTICAL BIDS BY ALL OR SEVERAL BIDDERS CONSTITUTES SUCH EVIDENCE OF VIOLATION OF THE ANTITRUST LAWS, RELATING TO CONSPIRACIES, MONOPOLIES, AND MONOPOLISTIC PRACTICES JUSTIFYING RESORT TO JUDICIAL PROCEEDINGS, IS ONE FOR THE DETERMINATION OF THE FEDERAL TRADE COMMISSION AND/OR THE DEPARTMENT OF JUSTICE. IT IS SUGGESTED THAT IF THERE BE ANY ADMINISTRATIVE DOUBT WITH RESPECT THERETO, THERE BE SUBMISSION OF THE BIDS AND FACTS TO THESE LAW-ENFORCING AGENCIES OF THE GOVERNMENT CHARGED WITH THE ADMINISTRATION OF THE ANTITRUST LAWS.

THE SECOND QUESTION IS ONE INVOLVING THE USES OF APPROPRIATED MONEYS FOR PAYMENT TO THE BIDDER SELECTED BY LOT FROM A NUMBER OF BIDDERS SUBMITTING IDENTICAL LOW BIDS FOR THE DELIVERY OF MATERIAL OR SUPPLIES OF EQUAL QUALITY AND IS PROPERLY FOR DETERMINATION HERE. WHERE THERE ARE SEVERAL, OR MORE THAN ONE LOW BID IN THE SAME AMOUNT IN SUCH A CASE AND THERE IS NO CHOICE AS TO QUALITY AMONG THE SEVERAL OFFERINGS OF THE LOW BIDDERS SUBMITTING IDENTICAL BIDS AS TO PRICE, NOR ANY OTHER DETERMINING FACTOR SUCH AS DIFFERENCE IN TRANSPORTATION COSTS OF DELIVERY, THERE APPEARS NO LEGAL OBJECTION TO THE SELECTION OF ONE OF THE BIDS BY DRAWING LOTS FOR THE AWARD OF THE CONTRACT. SUCH PROCEDURE SHOULD NOT BE USED WHERE THE MATERIAL OFFERED BY THE SEVERAL LOW BIDDERS IS NOT OF EQUAL QUALITY BUT THAT IDENTICAL LOW BID OFFERING MATERIAL OF THE BEST QUALITY SHOULD BE SELECTED.