A-65592, OCTOBER 9, 1935, 15 COMP. GEN. 286

A-65592: Oct 9, 1935

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NOR MAY A PROVISION BE INCLUDED IN CONTRACTS FOR SUPPLIES THAT DELIVERIES WILL NOT BE ACCEPTED OF PRODUCTS OF A DEBARRED BIDDER. AS FOLLOWS: THERE IS ENCLOSED HEREWITH COPY OF LETTER OF AUGUST 19. WERE STAMPING MEAT PRODUCTS WITH COUNTERFEIT STAMPS TO INDICATE INSPECTION BY THE DEPARTMENT OF AGRICULTURE WHICH WAS CONSIDERED SUFFICIENT TO JUSTIFY THE TEMPORARY DEBARMENT OF THIS CONCERN UNTIL IT COULD BE DETERMINED BY FURTHER INVESTIGATION WHETHER OTHER IRREGULARITIES ARE INVOLVED. VETERANS' ADMINISTRATION FACILITIES HAVE BEEN ADVISED OF THE DEBARMENT OF JOHN MINDER AND SONS. THAT NOTWITHSTANDING THE DEBARMENT OF THIS CONCERN THEY ARE CONTINUING TO DO BUSINESS INDIRECTLY WITH THE VETERANS' ADMINISTRATION WHICH.

A-65592, OCTOBER 9, 1935, 15 COMP. GEN. 286

CONTRACTS - DEBARRED BIDDER'S PRODUCTS DELIVERED BY ANOTHER CONTRACTOR PRODUCTS OF A DEBARRED BIDDER, CONFORMING IN EVERY RESPECT TO THE ADVERTISED SPECIFICATIONS, MAY NOT BE REJECTED IF OFFERED BY A CONTRACTOR ENTIRELY INDEPENDENT OF THE DEBARRED BIDDER, NOR MAY A PROVISION BE INCLUDED IN CONTRACTS FOR SUPPLIES THAT DELIVERIES WILL NOT BE ACCEPTED OF PRODUCTS OF A DEBARRED BIDDER.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, OCTOBER 9, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 19, 1935, AS FOLLOWS:

THERE IS ENCLOSED HEREWITH COPY OF LETTER OF AUGUST 19, 1935, TO JOHN MINDER AND SONS, INC., 101 BARCLAY STREET, NEW YORK CITY, N.Y., ADVISING THIS CONCERN OF THEIR TEMPORARY DEBARMENT BECAUSE OF CERTAIN IRREGULARITIES ON THEIR PART IN THE PERFORMANCE OF A CONTRACT TO FURNISH PACKING HOUSE AND DAIRY PRODUCTS TO THE VETERANS' ADMINISTRATION FACILITY, NORTHPORT, L.I., DURING THE MONTH OF JULY 1935.

A RECENT INVESTIGATION DISCLOSED THAT JOHN MINDER AND SONS, INC. WERE STAMPING MEAT PRODUCTS WITH COUNTERFEIT STAMPS TO INDICATE INSPECTION BY THE DEPARTMENT OF AGRICULTURE WHICH WAS CONSIDERED SUFFICIENT TO JUSTIFY THE TEMPORARY DEBARMENT OF THIS CONCERN UNTIL IT COULD BE DETERMINED BY FURTHER INVESTIGATION WHETHER OTHER IRREGULARITIES ARE INVOLVED.

VETERANS' ADMINISTRATION FACILITIES HAVE BEEN ADVISED OF THE DEBARMENT OF JOHN MINDER AND SONS, INC., AND INSTRUCTED TO MAKE NO FURTHER PURCHASES FROM THIS FIRM BUT IT HAS DEVELOPED, AS INDICATED IN THE ENCLOSED COPY OF TELEGRAM OF SEPTEMBER 16, 1935, FROM THE MANAGER, VETERANS' ADMINISTRATION FACILITY, NORTHPORT, L.I., THAT NOTWITHSTANDING THE DEBARMENT OF THIS CONCERN THEY ARE CONTINUING TO DO BUSINESS INDIRECTLY WITH THE VETERANS' ADMINISTRATION WHICH, OF COURSE, IS DEFEATING THE PURPOSE OF DEBARMENT.

IT WILL BE APPRECIATED IF YOU WILL ADVISE WHETHER IN THE ABSENCE OF A COVERING CONTRACT PROVISION THE VETERANS' ADMINISTRATION MAY PROPERLY REFUSE DELIVERY FROM A CONTRACTOR OF PRODUCTS ORIGINATING IN THE PLANT OF A DEBARRED BIDDER AND, IF NOT, WHETHER A PROVISION TO ACCOMPLISH THIS END MAY PROPERLY BE INCLUDED IN CONTRACTS FOR SUPPLIES.

WHILE YOUR LETTER REFERS TO THE "TEMPORARY DEBARMENT" OF JOHN MINDER AND SONS, INC., IT APPEARS FROM THE COPIES OF NOTICE TO THE CONTRACTOR AND TO THE MANAGERS OF THE VARIOUS FACILITIES THAT THE DEBARMENT IS FOR AN INDEFINITE PERIOD. THIS IS NOT IN ACCORDANCE WITH MY DECISION OF OCTOBER 17, 1934, TO YOU (14 COMP. GEN. 313-315), AND SHOULD BE CORRECTED TO CONFORM TO SAID DECISION.

AS TO THE MATTER OF REFUSING DELIVERY OF PRODUCTS OF A DEBARRED BIDDER, WHICH PRODUCTS ARE OFFERED BY ANOTHER CONTRACTOR, THERE WOULD BE NO LEGAL BASIS FOR REFUSING DELIVERY OF SUCH PRODUCTS IF THE PRODUCTS OFFERED CONFORM IN EVERY RESPECT TO THE ADVERTISED SPECIFICATIONS; AND THERE WOULD APPEAR NO AUTHORITY FOR INCLUDING IN CONTRACTS A PROVISION TO THE EFFECT THAT NO DELIVERIES WILL BE ACCEPTED OF PRODUCTS OF A DEBARRED BIDDER. IS TO BE UNDERSTOOD, OF COURSE, THAT IF THE CONTRACTOR SHOULD INDULGE IN THE PRACTICE OF DELIVERING OR ATTEMPTING TO DELIVER INFERIOR PRODUCTS OR PRODUCTS BEARING FORGED OR COUNTERFEIT INSPECTION STAMPS, THE CONTRACTOR WOULD LIKEWISE BE SUBJECT TO DEBARMENT. HOWEVER, IF THE CONTRACTOR IS A REGULAR AND RESPONSIBLE DEALER IN ITS OWN RIGHT, AND NOT MERELY AN AGENT, REPRESENTATIVE, SUBSIDIARY OR SUCCESSOR OF THE DEBARRED CONTRACTOR, DELIVERIES OF PRODUCTS COMPLYING WITH THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, PROPERLY INSPECTED, STAMPED AND CERTIFIED, MAY NOT BE REJECTED MERELY BECAUSE THE PRODUCTS HAD BEEN OBTAINED FROM A FIRM THAT HAD BEEN DEBARRED BECAUSE OF FRAUDULENT OR IMPROPER PRACTICES.

THE QUESTIONS PRESENTED IN YOUR LETTER ARE ANSWERED IN THE NEGATIVE.

THE FACTS SUBMITTED WOULD SEEM TO INDICATE THAT THERE HAS BEEN SOME LAXITY ON THE PART OF THE RESPONSIBLE OFFICIALS AT THE VETERANS' ADMINISTRATION FACILITY IN QUESTION, IN THE MATTER OF THE ACCEPTANCE OF FOOD PRODUCTS. ALSO, THAT UNDER THE PRESENT PROCEDURE OF INSPECTION THERE IS NO WAY TO DETERMINE WHO MADE THE INSPECTION OR WHETHER THERE WAS, IN FACT, ANY INSPECTION BY RESPONSIBLE REPRESENTATIVES OF THE UNITED STATES. IN THIS CONNECTION ATTENTION IS INVITED TO THAT PART OF THE INVESTIGATOR'S PRELIMINARY REPORT OF AUGUST 13, 1935, WHEREIN IT IS STATED:

IT IS ALSO BELIEVED THAT STEPS SHOULD BE TAKEN TO PREVENT, SO FAR AS POSSIBLE, THE MISUSE OF THE VETERANS' ADMINISTRATION STAMP WHICH IS USED FOR STAMPING MEAT. THE STAMP IN USE AT THE PRESENT TIME HAS NO CODE NUMBER WHICH WOULD ENABLE THE B.A.E. TO IDENTIFY THE INSPECTOR THAT STAMPED ANY PARTICULAR ORDER OF MEAT. IT IS A STAMP WHICH CAN BE DUPLICATED VERY EASILY. THE MATTER OF FURNISHING A STAMP THAT WILL IDENTIFY THE INSPECTOR AND BE VERY DIFFICULT TO DUPLICATE WAS DISCUSSED WITH MR. KIDD, CHIEF, PROCUREMENT DIVISION, AND MR. MCCARTHY, B.A.E. REPRESENTATIVE, AND MR. MCCARTHY FURNISHED MR. KIDD WITH A DRAWING OF A STAMP WHICH HE SEEMED TO THINK WOULD BE VERY HARD TO DUPLICATE.

IT WOULD SEEM PROPER TO ADOPT A PROCEDURE OF INSPECTION OF SUCH PRODUCTS WHEREBY EACH INSPECTOR WOULD BE HELD RESPONSIBLE FOR THE USE OF HIS STAMP AND THE STAMP WOULD BE SUCH THAT IT COULD NOT EASILY BE DUPLICATED AND THE INSPECTOR COULD BE IDENTIFIED THEREBY.