A-55157, AUGUST 27, 1934, 14 COMP. GEN. 168

A-55157: Aug 27, 1934

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ONE OF WHICH IS OWNED AND CONTROLLED BY THE OTHER. THE BUSINESS IS DONE FOR THE BENEFIT OF SUCH OTHER CORPORATION WITH THE CORPORATE IDENTITIES OF THE TWO CORPORATIONS BEING RETAINED MERELY FOR TRADE PURPOSES. 1934: THERE WAS RECEIVED YOUR LETTER OF JUNE 25. AS FOLLOWS: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 25. THERE IS ENCLOSED FOR YOUR INFORMATION A CONFIDENTIAL REPORT OF DUN AND BRADSTREET. WHICH SETS FORTH THE RELATIONSHIP BETWEEN THE STANDARD FLAG AND MANUFACTURING COMPANY AND THE COLLEGEVILLE FLAG AND MANUFACTURING COMPANY AND YOU WILL NOTE THE FOLLOWING STATEMENTS ARE MADE IN THIS REPORT: "SOME BUYING AND SELLING IS BEING DONE BY STANDARD FLAG AND MFG. THE PRINCIPAL PURCHASES AND SALES ARE MADE BY THE COLLEGEVILLE FLAG AND MFG.

A-55157, AUGUST 27, 1934, 14 COMP. GEN. 168

ADVERTISING - BIDS - COMPETITION - BIDDERS - SUBSIDIARIES BIDS SHOULD NOT BE RECEIVED IN RESPONSE TO ADVERTISED SPECIFICATIONS FROM TWO CORPORATIONS, ONE OF WHICH IS OWNED AND CONTROLLED BY THE OTHER, AND THE BUSINESS IS DONE FOR THE BENEFIT OF SUCH OTHER CORPORATION WITH THE CORPORATE IDENTITIES OF THE TWO CORPORATIONS BEING RETAINED MERELY FOR TRADE PURPOSES. NO BIDDER SHOULD BE PERMITTED THE ADVANTAGE OF DOUBLE BIDDING.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, AUGUST 27, 1934:

THERE WAS RECEIVED YOUR LETTER OF JUNE 25, 1934, AS FOLLOWS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 25, 1934, (A-55157), REQUESTING CERTAIN INFORMATION CONCERNING THE BIDS OF THE COLLEGEVILLE FLAG AND MANUFACTURING COMPANY AND THE STANDARD FLAG AND MANUFACTURING COMPANY FOR FURNISHING FLAGS TO THE VETERANS' ADMINISTRATION.

THERE IS ENCLOSED FOR YOUR INFORMATION A CONFIDENTIAL REPORT OF DUN AND BRADSTREET, INC., WHICH SETS FORTH THE RELATIONSHIP BETWEEN THE STANDARD FLAG AND MANUFACTURING COMPANY AND THE COLLEGEVILLE FLAG AND MANUFACTURING COMPANY AND YOU WILL NOTE THE FOLLOWING STATEMENTS ARE MADE IN THIS REPORT:

"SOME BUYING AND SELLING IS BEING DONE BY STANDARD FLAG AND MFG. CO. INITS OWN NAME, BUT THE PRINCIPAL PURCHASES AND SALES ARE MADE BY THE COLLEGEVILLE FLAG AND MFG. CO., INC., THE IDENTITY OF THE TWO COMPANIES BEING RETAINED FOR TRADE REASONS. ANY BUSINESS DONE BY EITHER COMPANY IS FOR THE BENEFIT OF COLLEGEVILLE FLAG AND MFG. CO., WHICH GUARANTEES THE ACCOUNTS OF STANDARD FLAG AND MFG. CO. THE MANUFACTURING AND MECHANICAL WORK IS ALL BEING DONE BY COLLEGEVILLE FLAG AND MFG. CO., INC. THERE ARE APPROXIMATELY 175 EMPLOYEES.

"PLANT IS AT COLLEGEVILLE, MONTGOMERY COUNTY, PA. THE OFFICE AT 716 CHESTNUT STREET, PHILADELPHIA, IS RETAINED AT WHICH ADDRESS THE CHAIRMAN AND MANAGER MAKES HIS HEADQUARTERS, WHICH CONTINUES TO BE THE HEADQUARTERS OF STANDARD FLAG AND MFG. CO.'

IT IS NOT KNOWN WHY THESE TWO CONCERNS CONTINUE TO SUBMIT SEPARATE BIDS FOR FLAGS AND IT IS REQUESTED THAT YOU ADVISE WHETHER, IN VIEW OF THEIR RELATIONSHIP, ONLY ONE OF THEM SHOULD BE PERMITTED TO BID OR WHETHER, IN THE EVENT BOTH OF THEM BID, THEIR BIDS SHOULD BE REJECTED.

THE COLLEGEVILLE FLAG AND MANUFACTURING CO. AND THE STANDARD FLAG AND MANUFACTURING CO. SHOULD BE INFORMED AS TO THE SUBSTANCE OF THE INFORMATION IN POSSESSION OF THE UNITED STATES THAT THE TWO COMPANIES WERE MERGED IN OCTOBER 1932; THAT WHILE THE NAME OF THE STANDARD FLAG AND MANUFACTURING CO. APPEARS TO HAVE BEEN RETAINED POSSIBLY FOR TRADE PURPOSES, THE PRINCIPAL PURCHASES AND SALES APPEAR TO HAVE BEEN MADE BY THE COLLEGEVILLE FLAG AND MANUFACTURING CO. WHICH GUARANTEES THE ACCOUNTS OF THE STANDARD FLAG AND MANUFACTURING CO.; AND THAT INASMUCH AS NO BIDDER SHOULD BE PERMITTED THE ADVANTAGE OF DOUBLE BIDDING HEREAFTER AND WHILE SUCH ARRANGEMENT EXISTS, THE VETERANS' ADMINISTRATION WILL DECLINE TO CONSIDER BIDS SUBMITTED BY BOTH COMPANIES AS IN COMPETITION WITH EACH OTHER AND WITH OTHER BIDDERS; AND THAT BIDS SHOULD BE HEREAFTER SUBMITTED TO THE VETERANS' ADMINISTRATION IN THE NAME OF ONE OR THE OTHER OF SAID CONCERNS, AND PROBABLY THE PRINCIPAL CONCERN, THE COLLEGEVILLE FLAG AND MANUFACTURING CO. ..END :