A-61381, MAY 18, 1935, 14 COMP. GEN. 837

A-61381: May 18, 1935

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THE ESTABLISHED PROCEDURE OF ACQUIRING OFFICE SUPPLIES IS AS PROVIDED BY EXECUTIVE ORDER NO. 6166. 1935: THERE HAVE BEEN BROUGHT TO MY ATTENTION NINE VOUCHERS (NOS. 3146. IT APPEARS THE PURCHASES WERE MADE IN THE OPEN MARKET. WHICH PRICE IS $3.50 IN EXCESS OF THE COST OF FASTENERS CARRIED IN STOCK BY THE PROCUREMENT DIVISION. THE REASON GIVEN FOR NOT OBTAINING THESE ARTICLES THROUGH THE PROCUREMENT DIVISION WAS THAT. - THIS WAS AN EMERGENCY PURCHASE SINCE THE ACCO FASTENERS WERE NEEDED WITHIN A WEEK FOR THE PROPER CONDUCTING OF THE BUSINESS OF THE FEDERAL HOUSING ADMINISTRATION. THE REASON GIVEN FOR NOT OBTAINING THE SUPPLIES THROUGH THE PROCUREMENT DIVISION WAS THAT. THESE FASTENERS WERE NEEDED IMMEDIATELY FOR THE PROPER FUNCTIONING OF THE FEDERAL HOUSING ADMINISTRATION.

A-61381, MAY 18, 1935, 14 COMP. GEN. 837

FEDERAL HOUSING ADMINISTRATION - PURCHASE OF SUPPLIES GENERAL ORDER NO. 4, FEDERAL HOUSING ADMINISTRATION, ORDERS THAT IN THE INCURRING OF OBLIGATIONS AND THE PAYMENT OF EXPENDITURES THE ESTABLISHED GOVERNMENT PROCEDURE BE FOLLOWED. THE ESTABLISHED PROCEDURE OF ACQUIRING OFFICE SUPPLIES IS AS PROVIDED BY EXECUTIVE ORDER NO. 6166, FROM THE PROCUREMENT DIVISION, EXCEPT IN CASES OF PUBLIC EXIGENCY. THE DESIRE FOR DIFFERENT OR MORE EXPENSIVE ARTICLES OF OFFICE SUPPLIES OFFERS NO JUSTIFICATION FOR PURCHASES OTHER THAN PURSUANT TO LAW.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, MAY 18, 1935:

THERE HAVE BEEN BROUGHT TO MY ATTENTION NINE VOUCHERS (NOS. 3146, 5024, 9874, 10818, 10938, 11703, 11709, 11720, AND 12315), SUBMITTED TO THIS OFFICE FOR PREAUDIT APPROVAL, COVERING OFFICE FURNITURE AND SUPPLIES PURCHASED FOR USE IN THE OFFICE OF THE FEDERAL HOUSING ADMINISTRATION.

IT APPEARS THE PURCHASES WERE MADE IN THE OPEN MARKET--- IN MOST INSTANCES WITHOUT ADVERTISING--- INSTEAD OF OBTAINING THE ARTICLES FROM FIRMS LISTED IN THE GENERAL SCHEDULE OF SUPPLIES UNDER CONTRACT WITH THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, AS REQUIRED BY LAW. SEE ACT OF FEBRUARY 27, 1929, 45 STAT. 1341; SECTION 1 OF EXECUTIVE ORDER NO. 6166 OF JUNE 10, 1933.

VOUCHER 3146 COVERS THE PURCHASE OF 10,000 NO. 12 ACCO FASTENERS AT 52 1/2 CENTS PER HUNDRED, OR $52.50, WHICH PRICE IS $3.50 IN EXCESS OF THE COST OF FASTENERS CARRIED IN STOCK BY THE PROCUREMENT DIVISION. THE REASON GIVEN FOR NOT OBTAINING THESE ARTICLES THROUGH THE PROCUREMENT DIVISION WAS THAT---

THIS WAS AN EMERGENCY PURCHASE SINCE THE ACCO FASTENERS WERE NEEDED WITHIN A WEEK FOR THE PROPER CONDUCTING OF THE BUSINESS OF THE FEDERAL HOUSING ADMINISTRATION.

VOUCHER 5024 COVERS THE PURCHASE OF 5,000 NO. 22-L ACCO FASTENERS AT $8.25 PER THOUSAND, OR $41.25, BEING $11.25 IN EXCESS OF THE COST OF FASTENERS CARRIED IN STOCK BY THE PROCUREMENT DIVISION. THE REASON GIVEN FOR NOT OBTAINING THE SUPPLIES THROUGH THE PROCUREMENT DIVISION WAS THAT--

THESE FASTENERS WERE NEEDED IMMEDIATELY FOR THE PROPER FUNCTIONING OF THE FEDERAL HOUSING ADMINISTRATION. OUR EXPERIENCE WITH PROCUREMENT HAS SHOWN US THAT WE COULD NOT EXPECT DELIVERY BEFORE 30 DAYS. THEREFORE, THESE FASTENERS WERE PROCURED DIRECT FROM THE CONTRACTOR AT A PRICE OF ?825 PER HUNDRED WHICH SEEMS TO BE A JUST AND FAIR PRICE.

VOUCHERS 9874 AND 11703 COVER THE PURCHASES OF A FLAT-TOP WALNUT DESK, 66 BY 36 INCHES, AND A SOLID-WALNUT SWIVEL ARMCHAIR AT A COST OF $110 AND $28.50, RESPECTIVELY, WHILE THE GENERAL SCHEDULE OF SUPPLIES LISTS GENUINE -WALNUT FLAT-TOP DESK, 66 BY 36 INCHES, AT $32.47 AND SOLID-WALNUT ROTARY ARMCHAIR AT $13.06 NET, THE PRICES CHARGED ON THE VOUCHERS BEING $77.53 AND $15.44, RESPECTIVELY, IN EXCESS OF THE COST OF THESE PIECES OF FURNITURE IF PURCHASED THROUGH THE PROCUREMENT DIVISION. THE REASON GIVEN FOR OBTAINING THE ARTICLES OTHER THAN FROM THE PROCUREMENT DIVISION WAS "TO MATCH THE FURNITURE" ALREADY IN USE BY THE FEDERAL HOUSING ADMINISTRATION.

VOUCHERS 10818 AND 10938 COVER THE PURCHASES OF 650 BINDERS AT 45 CENTS EACH, OR $292.50, AND FIVE GROSS OF CALENDAR PADS AND STANDS AT $41.47 PER GROSS, OR $207.35. THE GENERAL SCHEDULE OF SUPPLIES LISTS SIMILAR ARTICLES AT 40 CENTS LESS 2 PERCENT 10 DAYS, OR $254.80 FOR 650 BINDERS, AND CALENDAR PAD AND STAND AT 12 CENTS LESS 1 PERCENT 10 DAYS, OR $85.54 FOR FIVE GROSS, THE EXCESS COSTS BEING $37.70 AND $121.81, RESPECTIVELY. THE REASON GIVEN FOR NOT OBTAINING THESE SUPPLIES THROUGH THE PROCUREMENT DIVISION WAS THAT NO AWARD HAD BEEN MADE AT THE TIME OF ISSUING THE PURCHASE ORDERS. THE RECORDS OF THIS OFFICE INDICATE, HOWEVER, THAT FOR BOTH BINDERS AND CALENDARS AWARDS WERE ON FILE EFFECTIVE JANUARY 1, 1935, WHEREAS THE VOUCHERS SHOW THE PURCHASE ORDERS WERE DATED FEBRUARY 2 AND 7, WITH DELIVERIES FEBRUARY 9 AND 18, 1935, RESPECTIVELY.

VOUCHER 11709 COVERS THE PURCHASE OF FIVE GROSS OF PENCILS AT $5.40 PER GROSS, OR $27, AND THE REASON STATED FOR MAKING THE PURCHASE IN THE OPEN MARKET IS "THAT THE PENCILS ON SCHEDULE WERE TRIED AND FOUND TO BE IMPRACTICABLE.' ON THE GENERAL SCHEDULE OF SUPPLIES, ITEM 53-P 29775 COVERS VARIOUS CLASSES OF PENCILS AT DIFFERENT PRICES, SOME OF THE PRICES BEING BELOW THE AMOUNTS ABOVE CHARGED AND OTHER PRICES THE SAME AS THE AMOUNTS ABOVE CHARGED. THE RECORD DOES NOT CONTAIN SUFFICIENT INFORMATION ON WHICH TO MAKE A COMPARISON. IN RESPONSE TO THE PREAUDIT DIFFERENCE STATEMENT, REFERENCE IS MADE TO SECTION (B), FEDERAL HOUSING ADMINISTRATION GENERAL ORDER NO. 4, WHICH READS AS FOLLOWS:

(B) EVERY PURCHASE INVOLVING AN EXPENDITURE IN EXCESS OF $100 SHALL BE MADE AFTER ADVERTISING FOR BIDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3709 OF THE REVISED STATUTES EXCEPT:

(1) WHERE THE EXIGENCY OF THE SERVICE REQUIRES THE IMMEDIATE DELIVERY OF THE ARTICLES THAT WILL NOT ADMIT OF THE DELAY INCIDENT TO ADVERTISING;

(2) WHERE THERE IS ONLY ONE SOURCE OF SUPPLY; AND

(3) WHERE FOR ANY OTHER REASON IT IS IMPRACTICABLE TO SECURE COMPETITION.

THIS SECTION MUST BE CONSTRUED IN THE LIGHT OF THE STATUTE UNDER WHICH IT WAS PROMULGATED, ACT OF JUNE 27, 1934 (48 STAT. 1246), QUOTED IN THE ORDER AS FOLLOWS:

* * * THE ADMINISTRATOR MAY DELEGATE ANY OF THE FUNCTIONS AND POWERS CONFERRED UPON HIM UNDER THIS TITLE AND TITLES II AND III TO SUCH OFFICERS, AGENTS, AND EMPLOYEES AS HE MAY DESIGNATE OR APPOINT, AND MAY MAKE SUCH EXPENDITURES (INCLUDING EXPENDITURES FOR PERSONAL SERVICES AND RENT AT THE SEAT OF GOVERNMENT AND ELSEWHERE, FOR LAW BOOKS AND BOOKS OF REFERENCE, AND FOR PAPER, PRINTING, AND BINDING) AS ARE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS TITLE AND TITLES II AND III, WITHOUT REGARD TO ANY OTHER PROVISIONS OF LAW GOVERNING THE EXPENDITURE OF PUBLIC FUNDS. ALL SUCH COMPENSATION, EXPENSES, AND ALLOWANCES SHALL BE PAID OUT OF FUNDS MADE AVAILABLE BY THIS ACT.

WHILE THE ACT VESTS IN THE ADMINISTRATOR, IN SOME RESPECTS, VERY BROAD POWERS, SUCH POWERS ARE LIMITED IN SO FAR AS EXPENDITURES ARE CONCERNED TO SUCH AS ARE NECESSARY TO CARRY OUT THE PROVISIONS OF THE ACT.

GENERAL ORDER NO. 4 FURTHER PROVIDES:

ALTHOUGH THE PROVISIONS OF THE LAW SUPRA PROVIDE WIDE LATITUDES REGARDING THE EXPENDITURES MADE ON ACCOUNT OF THE FEDERAL HOUSING ADMINISTRATION, IT IS ORDERED THAT IN THE INCURRING OF OBLIGATIONS AND THE PAYMENT OF EXPENDITURES THAT THE ESTABLISHED GOVERNMENT PROCEDURES BE FOLLOWED SO FAR AS PRACTICABLE IN EACH INSTANCE. * * *

THERE CAN BE NO QUESTION "THAT THE ESTABLISHED GOVERNMENT PROCEDURE" IN ACQUIRING OFFICE SUPPLIES IS AS PROVIDED IN EXECUTIVE ORDER NO. 6166, DATED JUNE 10, 1933, NAMELY, THROUGH THE PROCUREMENT DIVISION, EXCEPT IN CASES OF PUBLIC EXIGENCY REQUIRING SUCH IMMEDIATE DELIVERY AS COULD NOT BE EFFECTED IN PURCHASES FROM THE SCHEDULED CONTRACTOR.

THE VARIOUS REASONS OFFERED FOR MAKING THE PURCHASES IN THE OPEN MARKET RATHER THAN IN ACCORDANCE WITH LAW SHOW NO EXIGENCY. RATHER THE STATEMENTS INDICATE MERELY A DESIRE FOR A MORE EXPENSIVE OR DIFFERENT ARTICLE THAN OFFERED THROUGH THE PROCUREMENT DIVISION, RATHER THAN ANY NECESSITY IN CARRYING OUT THE PROVISIONS OF THE ACT. SUCH A DESIRE FOR A DIFFERENT STYLE OR QUALITY, OR THE STATEMENT THAT THE PENCILS SUCH AS USED THROUGHOUT THE GOVERNMENT SERVICE ARE IMPRACTICABLE FOR USE BY THE FEDERAL HOUSING ADMINISTRATION, OFFERS NO JUSTIFICATION FOR PURCHASING OTHERWISE THAN PURSUANT TO LAW. 5 COMP. GEN. 755 AND CASES CITED THEREIN.

ACCORDINGLY, THE VOUCHERS IN QUESTION WILL NOT BE CERTIFIED FOR PAYMENT ON THE PRESENT RECORD.