A-56726, OCTOBER 17, 1934, 14 COMP. GEN. 313

A-56726: Oct 17, 1934

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THE FACT THAT A BIDDER IN A PREVIOUS TRANSACTION RENDERED UNSATISFACTORY SERVICE OR FURNISHED SUPPLIES NOT IN ACCORDANCE WITH THE SPECIFICATIONS OR SUBMITTED AN IRREGULAR BID IS NOT ALONE A VALID REASON FOR CONTINUED REFUSAL THEREAFTER TO GIVE CONSIDERATION TO BIDS FOR FURNISHING SUPPLIES. THE REQUIREMENT THAT ALL BIDS BE ACCOMPANIED BY A GUARANTEE AND THAT THE CONTRACT WHEN AWARDED BE SUPPORTED BY A BOND IS INTENDED TO PROTECT THE UNITED STATES FROM ANY LOSS OR DAMAGE THAT MIGHT BE SUSTAINED BECAUSE OF DEFAULT OR FAILURE OF A CONTRACTOR. THERE MAY BE CASES IN WHICH DEBARMENT OF A BIDDER IS NECESSARY AND PROPER. WHERE THERE IS A REASONABLE SHOWING THAT THE INTERESTS OF THE UNITED STATES REQUIRE THE DEBARMENT OF A BIDDER.

A-56726, OCTOBER 17, 1934, 14 COMP. GEN. 313

ADVERTISING - BIDDERS - DEBARMENT AS A GENERAL RULE AND IN GIVING EFFECT TO THE PROVISIONS OF SECTION 3709, REVISED STATUTES, ALL BIDS SHOULD BE RECEIVED AND GIVEN CONSIDERATION ON AN EQUAL BASIS. THE FACT THAT A BIDDER IN A PREVIOUS TRANSACTION RENDERED UNSATISFACTORY SERVICE OR FURNISHED SUPPLIES NOT IN ACCORDANCE WITH THE SPECIFICATIONS OR SUBMITTED AN IRREGULAR BID IS NOT ALONE A VALID REASON FOR CONTINUED REFUSAL THEREAFTER TO GIVE CONSIDERATION TO BIDS FOR FURNISHING SUPPLIES, ETC. THE REQUIREMENT THAT ALL BIDS BE ACCOMPANIED BY A GUARANTEE AND THAT THE CONTRACT WHEN AWARDED BE SUPPORTED BY A BOND IS INTENDED TO PROTECT THE UNITED STATES FROM ANY LOSS OR DAMAGE THAT MIGHT BE SUSTAINED BECAUSE OF DEFAULT OR FAILURE OF A CONTRACTOR. THERE MAY BE CASES IN WHICH DEBARMENT OF A BIDDER IS NECESSARY AND PROPER, AND WHERE THERE IS A REASONABLE SHOWING THAT THE INTERESTS OF THE UNITED STATES REQUIRE THE DEBARMENT OF A BIDDER, THE ADMINISTRATIVE ACTION IN THIS RESPECT WILL NOT BE QUESTIONED, PROVIDED THE LENGTH OF TIME OF SUCH DEBARMENT IS DEFINITELY STATED AND NOT UNREASONABLE, AND THE REASONS FOR THE DEBARMENT--- WITH A STATEMENT OF THE SPECIFIC INSTANCES OF THE BIDDER'S DERELICTION--- ARE MADE OF RECORD AND A COPY THEREOF FURNISHED THE BIDDER AND THE GENERAL ACCOUNTING OFFICE.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, OCTOBER 17, 1934:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF JULY 19, 1934, TRANSMITTING CORRESPONDENCE IN CONNECTION WITH THE DEBARMENT OF JAMES GOOD, INC., FROM BIDDING ON VETERANS' ADMINISTRATION REQUIREMENTS.

IT APPEARS THAT BY LETTER DATED JULY 19, 1934, THE DIRECTOR OF SUPPLIES, VETERANS' ADMINISTRATION, ADVISED JAMES GOOD, INC., THAT IT WAS PERMANENTLY DEBARRED FROM SUBMITTING BIDS ON VETERANS' ADMINISTRATION REQUIREMENTS.

IT APPEARS THAT BY LETTER DATED JULY 19, 1934, THE DIRECTOR OF SUPPLIES, VETERANS' ADMINISTRATION, ADVISED JAMES GOOD, INC., THAT IT WAS PERMANENTLY DEBARRED FROM SUBMITTING BIDS ON VETERANS' ADMINISTRATION REQUIREMENTS, THE REASONS THEREFOR BEING SET FORTH IN THE SAID LETTER AS FOLLOWS:

INFORMATION HAS BEEN RECEIVED FROM THE FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF AGRICULTURE, THAT ANALYSIS OF SAMPLES TAKEN FROM A CONSIGNMENT OF SODIUM BORATE, U.S.P., WHICH YOU FURNISHED TO THE VETERANS' ADMINISTRATION SUPPLY DEPOT, PERRY POINT, MARYLAND, ON OUR ORDER 3-VB- 16981 DOES NOT CONFORM TO THE PURITY REQUIREMENTS OF THE UNITED STATES PHARMACOPOEIA WITH WHICH YOU AGREED TO COMPLY, IN THAT THE BORATE CONTAINS NOT LESS THAN 50 PARTS PER MILLION OF ARSENIC CALCULATED AS ARSENIC TRIOXIDE IN LIEU OF NOT MORE THAN 10 PARTS PER MILLION, THE MAXIMUM PERMITTED BY THE UNITED STATES PHARMACOPOEIA.

THIS IS THE SECOND INSTANCE IN THE COURSE OF YOUR DEALINGS WITH THE VETERANS' ADMINISTRATION IN WHICH YOU HAVE BEEN SERIOUSLY GUILTY OF NEGLIGENCE IN CONFORMING TO YOUR OBLIGATIONS OF SUPPLYING DRUGS MEETING THE PURITY REQUIREMENTS OF YOUR CONTRACT. AS YOU WILL RECALL, UNDER DATE OF OCTOBER 25, 1928, YOU WERE DEBARRED FROM BIDDING ON VETERANS' BUREAU REQUIREMENTS IN VIEW OF YOUR CARELESSNESS IN FURNISHING SODIUM BICARBONATE, U.S.P., MIXED WITH THE POISONOUS INSECTICIDE, SODIUM FLUORIDE.

YOU ARE, THEREFORE, INFORMED THAT YOU ARE PERMANENTLY DEBARRED FROM BIDDING ON VETERANS' ADMINISTRATION REQUIREMENTS.

THE RECORDS OF THIS OFFICE DISCLOSE THAT UNDER DATE OF OCTOBER 15, 1928, THERE WAS FORWARDED TO THIS OFFICE A COPY OF YOUR LETTER OF THE SAME DATE TO JAMES GOOD, INC., ADVISING THE SAID BIDDER THAT, IN VIEW OF THE MATTERS SET FORTH THEREIN, IT WOULD BE NECESSARY TO REMOVE ITS NAME PERMANENTLY FROM THE LIST OF BIDDERS FOR SUPPLYING THE UNITED STATES VETERANS' BUREAU. SINCE THAT TIME, HOWEVER, IT APPEARS THAT BIDS HAVE BEEN RECEIVED FROM JAMES GOOD, INC., FOR THE FURNISHING OF VARIOUS ITEMS OF DRUGS AND MEDICAL SUPPLIES AND THERE ARE NOW ON FILE IN THIS OFFICE NUMEROUS CONTRACTS WITH SAID COMPANY WHICH, INSOFAR AS THE RECORDS SHOW, HAVE BEEN SATISFACTORILY COMPLETED WITH THE ONE EXCEPTION SET FORTH IN YOUR LETTER OF JULY 19, 1934.

THE DECISIONS OF THIS OFFICE HAVE BEEN THAT, IN GIVING EFFECT TO SECTION 3709, REVISED STATUTES, AND AS A GENERAL RULE, ALL BIDS SHOULD BE RECEIVED AND GIVEN CONSIDERATION ON AN EQUAL BASIS. THE FACT THAT A BIDDER IN A PREVIOUS TRANSACTION RENDERED UNSATISFACTORY SERVICE OR FURNISHED SUPPLIES NOT IN ACCORDANCE WITH THE SPECIFICATIONS OR SUBMITTED AN IRREGULAR BID IS NOT ALONE A VALID REASON FOR CONTINUED REFUSAL THEREAFTER TO GIVE CONSIDERATION TO BIDS FOR FURNISHING SUPPLIES, ETC. THE REQUIREMENT THAT ALL BIDS BE ACCOMPANIED BY A GUARANTEE AND THAT THE CONTRACT WHEN AWARDED BE SUPPORTED BY A BOND IS INTENDED TO PROTECT THE UNITED STATES FROM ANY LOSS OR DAMAGE THAT MIGHT BE SUSTAINED BECAUSE OF DEFAULT OR FAILURE OF A CONTRACTOR.

IT IS RECOGNIZED, HOWEVER, THAT THERE MAY BE CASES IN WHICH DEBARMENT OF A BIDDER IS NECESSARY AND PROPER, AND IT HAS BEEN HELD THAT WHEN THERE IS A REASONABLE SHOWING THAT THE INTERESTS OF THE UNITED STATES REQUIRE THE DEBARMENT OF A BIDDER, THIS OFFICE WILL NOT QUESTION THE ADMINISTRATIVE ACTION WITH RESPECT THERETO, PROVIDED THE LENGTH OF TIME OF SUCH DEBARMENT IS DEFINITELY STATED AND NOT UNREASONABLE, AND THE REASONS FOR THE DEBARMENT--- WITH A STATEMENT OF THE SPECIFIC INSTANCES OF THE BIDDER'S DERELICTION--- ARE MADE OF RECORD AND A COPY THEREOF FURNISHED THE BIDDER AND THIS OFFICE. 7 COMP. GEN. 547; DECISION OF FEBRUARY 29, 1932, A- 40777. SEE ALSO MY DECISION TO YOU OF SEPTEMBER 12, 1934, A-54770, INVOLVING THE PROPOSED PERMANENT DEBARMENT OF THE MORRIS FRUIT AND PRODUCE CO.

IT IS REALIZED, OF COURSE, THAT THE MATTER OF FURNISHING DRUGS--- ESPECIALLY THOSE CONTAINING POISON--- INVOLVES GREATER RESPONSIBILITY THAN IN THE FURNISHING OF ORDINARY SUPPLIES, ETC., BUT IT IS ASSUMED SUCH DRUGS ARE, AS A MATTER OF PRECAUTION, ALWAYS TESTED IN ADVANCE OF RELEASE FOR USE, AND THERE APPEARS NO REASON WHY THE RULES GENERALLY FOR APPLICATION TO THE DEBARMENT OF BIDDERS SHOULD NOT BE OBSERVED.

THE REASONS ASSIGNED FOR PROPOSED PERMANENT DEBARMENT OF JAMES GOOD, INC. --- FAILURE IN TWO INSTANCES OVER A PERIOD OF APPROXIMATELY 6 YEARS TO FURNISH SUPPLIES CONFORMING TO THE STRICT REQUIREMENTS OF THE SPECIFICATIONS--- DO NOT APPEAR SUFFICIENT TO JUSTIFY SUCH DRASTIC ACTION. HOWEVER, IN THE CIRCUMSTANCES APPEARING, OBJECTION WILL NOT BE RAISED TO THE DEBARMENT PROVIDED THE PERIOD BE REDUCED TO 1 YEAR FROM JULY 19, 1934.