A-60986, MAY 15, 1935, 14 COMP. GEN. 832

A-60986: May 15, 1935

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CONTRACTS - SPECIFICATIONS - AUTOMOBILES WHERE THE NEED OF THE GOVERNMENT IS FOR AUTOMOBILES IN A RECOGNIZED COMPETITIVE PRICE. A SPECIFICATION REQUIRING A MINIMUM PISTON DISPLACEMENT WHICH EXCLUDES COMPETITION WITHIN THAT CLASS IS NOT AUTHORIZED. WHERE VARIOUS MAKES OF AUTOMOBILES IN THE SAME RECOGNIZED COMPETITIVE CLASS ARE IN USE BY A DEPARTMENT OF THE GOVERNMENT. NOTHING LESS THAN ACTUAL FACTS BASED UPON A COMPREHENSIVE SURVEY AND STUDY OF THE COMPARATIVE PERFORMANCE OF SUCH VARIOUS MAKES OF AUTOMOBILES IN USE WOULD JUSTIFY THE CONCLUSION THAT AN ENGINE WITH THE MINIMUM CUBIC INCH PISTON DISPLACEMENT IN SUCH COMPETITIVE CLASS WOULD NOT BE SATISFACTORY FOR THE GENERAL CHARACTER OF SERVICE TO BE RENDERED BY AUTOMOBILES OF THE CLASS TO WHICH THE SPECIFICATIONS ARE DIRECTED.

A-60986, MAY 15, 1935, 14 COMP. GEN. 832

CONTRACTS - SPECIFICATIONS - AUTOMOBILES WHERE THE NEED OF THE GOVERNMENT IS FOR AUTOMOBILES IN A RECOGNIZED COMPETITIVE PRICE, QUALITY, AND CAPACITY CLASS, A SPECIFICATION REQUIRING A MINIMUM PISTON DISPLACEMENT WHICH EXCLUDES COMPETITION WITHIN THAT CLASS IS NOT AUTHORIZED. WHERE VARIOUS MAKES OF AUTOMOBILES IN THE SAME RECOGNIZED COMPETITIVE CLASS ARE IN USE BY A DEPARTMENT OF THE GOVERNMENT, NOTHING LESS THAN ACTUAL FACTS BASED UPON A COMPREHENSIVE SURVEY AND STUDY OF THE COMPARATIVE PERFORMANCE OF SUCH VARIOUS MAKES OF AUTOMOBILES IN USE WOULD JUSTIFY THE CONCLUSION THAT AN ENGINE WITH THE MINIMUM CUBIC INCH PISTON DISPLACEMENT IN SUCH COMPETITIVE CLASS WOULD NOT BE SATISFACTORY FOR THE GENERAL CHARACTER OF SERVICE TO BE RENDERED BY AUTOMOBILES OF THE CLASS TO WHICH THE SPECIFICATIONS ARE DIRECTED. APPROPRIATED MONEYS OF THE UNITED STATES MAY NOT LAWFULLY BE CHARGED WITH PAYMENTS UNDER A CONTRACT AWARDED UPON SPECIFICATIONS SO NARROWLY DRAWN AS TO ELIMINATE REAL COMPETITION AS CONTEMPLATED BY SECTION 3709, REVISED STATUTES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, MAY 15, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 2, 1935, WITH INCLOSURES, AS FOLLOWS:

REFERENCE YOUR LETTER OF APRIL 19, 1935, IN WHICH YOU STATE THAT NO REPLY HAS BEEN RECEIVED TO YOUR LETTER OF MARCH 27, 1935, IN WHICH WAS QUOTED A LETTER FROM THE FARGO MOTOR CORPORATION, PROTESTING CERTAIN APPARENTLY RESTRICTIVE PROVISIONS IN INVITATION FOR BIDS NUMBER 398-35 112, YOU ARE INFORMED THAT A REPLY TO THIS COMMUNICATION WAS FORWARDED YOU GIVING A REPORT OF THE MATTER PROTESTED, TOGETHER WITH A COPY OF THE SPECIFICATIONS, UNDER DATE OF APRIL 17, 1935.

THERE ARE NOW INCLOSED A COPY OF THE ABSTRACT OF ALL BIDS RECEIVED AND A COPY OF THE ADVERTISED SPECIFICATIONS, AS YOU REQUESTED IN YOUR LETTER OF APRIL 19TH.

THE INVITATION FOR BIDS NO. 398-35-112, ISSUED BY THE PURCHASING AND CONTRACTING OFFICER, CAMP HOLABIRD, MARYLAND, WAS FOR THE DELIVERY OF 3,950 LIGHT CHASSIS 1 1/2 TON TRUCKS WITH CARGO BODY, IN ACCORDANCE WITH UNITED STATES ARMY TENTATIVE SPECIFICATIONS CCC-LP-91 601, DATED FEBRUARY 21, 1935, ATTACHED TO THE INVITATION FOR BIDS.

SECTION C OF THE SPECIFICATIONS UNDER WHICH BIDS WERE SOLICITED, COVERING SERVICE REQUIREMENTS, PROVIDED:

C-3. LOAD DATA.--- TO CARRY FOURTEEN (14) MEN INCLUDING THE DRIVER; OR A 3,000 POUND PAYLOAD INCLUDING THE DRIVER; AND FUEL, LUBRICANTS, WATER, TOOLS, AND TIRE CHAINS; AND IN ADDITION TO TRAIL, WHEN REQUIRED, A LOAD OF 3,000 POUNDS SUPPORTED ON TWO (2) WHEELS. REPORTS COVERING SERVICE USE UNDER REQUIRED OPERATING CONDITIONS DEMONSTRATE THAT THE VEHICLES FOR THE C.C.C. HAVING ENGINES OF LESS THAN TWO HUNDRED FIVE (205) CUBIC INCH PISTON DISPLACEMENT WILL NOT BE SATISFACTORY FOR THE SERVICE REQUIRED OF THESE VEHICLES.

RELATIVE TO THE MINIMUM PISTON DISPLACEMENT REQUIRED, YOUR LETTER OF APRIL 17, 1935, STATED AS FOLLOWS:

* * * THESE SPECIFICATIONS WERE SO DRAWN THAT IN SECTION C THEREOF THERE WAS CAREFULLY SET FORTH THE JOB TO BE DONE BY THE TRUCKS ADVERTISED FOR. IN SECTION D, WHICH SUPPLIED THE SPECIFICATIONS FOR THE VEHICLES, NO LIMITING FACTORS CONCERNING THE SIZE OR POWER OF THE ENGINE WERE INCLUDED, BUT BIDDERS WERE LEFT TO OFFER MOTORS WHICH WOULD PERFORM THE JOB AS SET FORTH IN SECTION C.

IT WOULD APPEAR FROM THE ABOVE TO BE THE IMPRESSION OF YOUR DEPARTMENT THAT SINCE THE STIPULATION FOR MINIMUM PISTON DISPLACEMENT OF 205 CUBIC INCHES APPEARED IN SECTION C, OUTLINING SERVICE REQUIREMENTS, RATHER THAN IN SECTION B, DEALING WITH MECHANICAL SPECIFICATIONS, THE PROVISION WAS NOT OBJECTIONABLE. AS STATED IN MY LETTER TO YOU OF APRIL 30, 1935, A- 60924, IRRESPECTIVE OF ITS PLACE IN THE SPECIFICATIONS, THE REQUIREMENT FOR AN ENGINE OF 205-INCH PISTON DISPLACEMENT WAS RESTRICTIVE AND OBJECTIONABLE IN THAT IT INFORMED BIDDERS THAT ENGINES OF LESS PISTON DISPLACEMENT WOULD NOT BE SATISFACTORY FOR THE SERVICE REQUIRED. IN THE FACE OF SUCH A STATEMENT, IT WOULD BE IDLE FOR ANY BIDDER TO OFFER AN ENGINE OF LESS PISTON DISPLACEMENT WITH ANY EXPECTATION OF HAVING ITS BID ACCEPTED.

IN THIS CONNECTION, THIS OFFICE HAS HAD OCCASION TO CONSIDER THREE SETS OF SPECIFICATIONS TO WHICH PROTEST HAS BEEN MADE BY THE FARGO MOTOR CORPORATION AS BEING RESTRICTIVE, ALL ISSUED BY THE PURCHASING AND CONTRACTING OFFICER, CAMP HOLABIRD, MD., AT APPROXIMATELY THE SAME TIME, AS FOLLOWS:

SPECIFICATIONS NG-LP-91-503 AND 515, FEBRUARY 19, 1935, INVITATION FOR BIDS 398-35-110, CALLING FOR DELIVERY OF 160 1 1/2-TON LIGHT CHASSIS TRUCKS AND 440 LIGHT CHASSIS 1 1/2-TON TRUCKS WITH CARGO BODY, FOR USE OF THE NATIONAL GUARD. IN THESE SPECIFICATIONS IT WAS STATED THAT THE TRUCKS WOULD BE REQUIRED TO HAVE A PAY LOAD CARRYING CAPACITY OF 3,000 POUNDS, AND TO BE CAPABLE IN ADDITION TO TOWING A TRAILER OF 4,200 POUNDS GROSS LOAD CAPACITY.

SPECIFICATIONS CCC-LP-91-602, FEBRUARY 20, 1935, INVITATION FOR BIDS 398- 35-113, COVERING DELIVERY OF 520 AMBULANCES, LIGHT FIELD TYPE, FOR USE OF THE CIVILIAN CONSERVATION CORPS. THE SPECIFICATIONS CALLED FOR A GROSS LOAD-CARRYING CAPACITY OF 2,400 POUNDS, AND IT WAS STATED THAT THE AMBULANCES WOULD BE REQUIRED TO SUITABLY TRANSPORT A VARIED LOAD RANGING FROM 1 TO 10 PATIENTS.

SPECIFICATIONS CCC-LP-91-601, FEBRUARY 21, 1935, INVITATION FOR BIDS 398- 35-112 (THE SPECIFICATIONS HERE UNDER CONSIDERATION) COVERING DELIVERY OF 3,950 1 1/2-TON LIGHT CHASSIS TRUCKS WITH CARGO BODIES FOR USE OF THE CIVILIAN CONSERVATION CORPS. THE SPECIFICATIONS REQUIRED A LOAD CARRYING CAPACITY OF 3,000 POUNDS AND CONTAINED THE FOLLOWING:

C-3. LOAD DATA.--- TO CARRY FOURTEEN (14) MEN INCLUDING THE DRIVER; OR A 3,000-POUND PAY LOAD INCLUDING THE DRIVER; AND FUEL, LUBRICANTS, WATER, TOOLS, AND TIRE CHAINS; AND IN ADDITION, TO TRAIL, WHEN REQUIRED, A LOAD OF 3,000 POUNDS SUPPORTED ON TWO (2) WHEELS. * * *

IT WILL BE SEEN THAT IN ONE CASE THE ENGINE WAS REQUIRED TO TRANSPORT A LOAD OF 2,400 POUNDS, IN ANOTHER A LOAD OF 6,000 POUNDS, AND IN THE THIRD A LOAD OF 7,200 POUNDS, YET THE PISTON DISPLACEMENT REQUIRED IN ALL THREE SETS OF SPECIFICATIONS IS IDENTICAL, WITHOUT REGARD TO THE DISPARITY IN LOAD CAPACITY REQUIRED.

THE SPECIFICATIONS STATED THAT THE REQUIREMENT OF A MINIMUM PISTON DISPLACEMENT OF 205 CUBIC INCHES WAS BASED ON "REPORTS" COVERING SERVICE USE UNDER REQUIRED OPERATING CONDITIONS. HOWEVER, THERE IS AND HAS BEEN NO SHOWING TO THIS OFFICE AS TO WHERE, WHEN, BY WHOM OR TO WHOM SUCH REPORTS WERE MADE, OR ON WHAT FACTS SUCH REPORTS WERE BASED. THE REPORTS MENTIONED MAY HAVE BEEN MEAGRE OR UNCONSIDERED, OR MERE CONCLUSIONS BASED UPON ISOLATED INSTANCES OF UNSATISFACTORY SERVICE IN THE CASE OF A VERY SMALL NUMBER OF TRUCKS OF A GIVEN MAKE. THERE ARE A LARGE NUMBER OF CIVILIAN CONSERVATION CORPS CAMPS THROUGHOUT THE COUNTRY AND IT IS THE UNDERSTANDING OF THIS OFFICE THAT THERE ARE IN USE IN CONNECTION WITH SUCH CAMPS, THOUSANDS OF TRUCKS OF VARIOUS MAKES. NOTHING LESS THAN ACTUAL FACTS BASED UPON A COMPREHENSIVE SURVEY AND STUDY OF THE COMPARATIVE PERFORMANCE OF THE VARIOUS MAKES OF TRUCKS IN USE WOULD JUSTIFY THE CONCLUSION THAT AN ENGINE WITH A LESS CUBIC INCH PISTON DISPLACEMENT THAN 205 CUBIC INCHES WOULD NOT BE SATISFACTORY FOR THE GENERAL CHARACTER OF SERVICE TO BE RENDERED BY 1 1/2-TON TRUCKS.

AN EXAMINATION OF THE ABSTRACT OF BIDS FORWARDED WITH YOUR LETTER OF MAY 2, DISCLOSES THAT IN RESPONSE TO THE INVITATION, FOUR BIDS WERE RECEIVED AS FOLLOWS:

CHART INTERNATIONAL HARVESTER COMPANY OF AMERICA ------------------ $888.56 REO MOTOR CAR COMPANY ------------------------------------- -- 853.05 STEWART MOTOR CORPORATION ------------------------------- ---- 1,230.32 GENERAL MOTORS CORPORATION (CHEVROLET DIVISION) ------- ------ 719.88

THE FARGO MOTOR CO. APPARENTLY DID NOT BID FOR THE REASON THAT THE DODGE KH-30 AUTOMOBILE WAS EXCLUDED BY THE SPECIFICATIONS FOR A MINIMUM PISTON DISPLACEMENT OF 205 CUBIC INCHES AND ITS LARGER ENGINE WITH 217-CUBIC-INCH DISPLACEMENT COULD NOT BE OFFERED IN COMPETITION WITH THE CHEVROLET AT A PROFITABLE PRICE. IT WILL BE SEEN THAT THE NEXT BID WAS MORE THAN 18 PERCENT HIGHER THAN THAT OF THE CHEVROLET CORPORATION, WHILE THE HIGHEST BID WAS MORE THAN 70 PERCENT IN EXCESS THEREOF.

THE SPECIFICATIONS OF THE TRUCKS OFFERED BY OTHER BIDDERS ARE NOT BEFORE THIS OFFICE, BUT THE DISPARITY IN THE BID PRICES IS SUFFICIENT TO INDICATE THAT THE OTHER TRUCKS OFFERED WERE IN A HIGHER CLASS THAN THE MINIMUM SPECIFICATION REQUIRED. IT IS A RECOGNIZED FACT THAT WITH THE GROWTH OF THE AUTOMOBILE INDUSTRY AND THE MULTIPLICATION OF USES TO WHICH THE AUTOMOBILE IS TURNED THERE HAS GROWN THE PRACTICE AMONG AUTOMOBILE MAKERS OF MANUFACTURING WHAT ARE KNOWN AS ,COMPETITIVE CLASSES OF MACHINES.' THAT IS TO SAY THAT THE VARIOUS MANUFACTURERS OF AUTOMOBILES MANUFACTURE MACHINES IN A CERTAIN PRICE, QUALITY, AND CAPACITY CLASS TO COMPETE WITH THE PRODUCTS OF RIVAL MANUFACTURERS. SUCH CLASSES ARE USUALLY DISTINCT FROM EACH OTHER AND VARY SUBSTANTIALLY IN PRICE ACCORDING TO THE TYPE OF SERVICE FOR WHICH THEY ARE INTENDED AND FITTED. WITHIN A SINGLE CLASS, SO FAR AS POWER AND PERFORMANCE ARE CONCERNED, THERE IS LITTLE TO CHOOSE BETWEEN THE VARIOUS MAKES OF MACHINES WHICH TRADE RIVALRY HAS PRODUCED, AND SELDOM MORE THAN A FEW DOLLARS DIFFERENCE IN PRICE. SUCH FEATURES AS MAY DISTINGUISH ONE MAKE OF AUTOMOBILE FROM ANOTHER IN ITS RECOGNIZED CLASS ARE LARGELY MATTERS OF SUPERFICIAL EQUIPMENT APPEALING TO THE PERSONAL PREFERENCE OF THE INDIVIDUAL AND HAVING LITTLE BEARING ON PERFORMANCE CAPACITY. IT IS NOT TO BE CONSIDERED THAT WITHIN A GIVEN CLASS THE VARIATION OF A VERY FEW INCHES MORE OR LESS IN PISTON DISPLACEMENT WOULD MAKE SUFFICIENT DIFFERENCE IN ACTUAL PERFORMANCE AS TO JUSTIFY THE EXCLUSION OF ANY MAKE OF MACHINE IN THE RECOGNIZED COMPETITIVE CLASS TO WHICH THE SPECIFICATIONS ARE DIRECTED.

IN THE PRESENT INSTANCE, THE SPECIFICATIONS APPEAR TO HAVE BEEN DRAWN, WITHOUT REFERENCE TO THE ACTUAL REQUIREMENTS OF THE SERVICE, SUFFICIENTLY NARROW TO EXCLUDE THE DODGE KH-30 WITH A 201.3-CUBIC-INCH PISTON DISPLACEMENT; SUFFICIENTLY BROAD TO ADMIT THE CHEVROLET WITH A PISTON DISPLACEMENT OF 207 CUBIC INCHES, AND SUFFICIENTLY LOW TO PREVENT MANUFACTURERS AND DEALERS IN OTHER MAKES OF AUTOMOBILES FROM COMPETING ON AN EQUAL OR NEARLY EQUAL BASIS. IN OTHER WORDS, THE SPECIFICATIONS APPEAR TO HAVE BEEN DRAWN FOR THE PURPOSE OF PURCHASING CHEVROLET TRUCKS WITHOUT ANY REAL COMPETITION AS CONTEMPLATED AND REQUIRED BY THE LAW.

ACCORDINGLY, IT APPEARING THAT AWARD OF A CONTRACT UNDER THE RESTRICTIVE SPECIFICATIONS UNDER CONSIDERATION WAS IN CONTRAVENTION OF THE SPIRIT AND PURPOSE OF SECTION 3709, REVISED STATUTES, I FIND AND DECIDE THAT APPROPRIATED MONEYS OF THE UNITED STATES MAY NOT LAWFULLY BE CHARGED WITH PAYMENTS UNDER SUCH CONTRACT. A-56755, AUGUST 23, 1934.