A-68690, DECEMBER 19, 1935, 15 COMP. GEN. 544

A-68690: Dec 19, 1935

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CONTRACTS - SPECIFICATIONS - BITUMINOUS COAL CONSERVATION ACT OF 1935 A CONTRACT FOR THE PURCHASE OF PROVISIONS IS NOT A CONTRACT "FOR ANY PUBLIC WORK. SHALL CONTAIN A PROVISION THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL IN THE CARRYING OUT OF SUCH CONTRACT FROM ANY BUT A CODE MEMBER. BIDS HAVE BEEN SUBMITTED IN SOME OF WHICH THE PROVISION HAS NOT BEEN DELETED AND THE CONTRACT HAS NOT YET BEEN AWARDED THERE SHOULD BE REJECTION OF ALL BIDS AND READVERTISEMENT. AS FOLLOWS: REFERENCE IS MADE TO CIRCULAR LETTER NO. 123. COPY OF THIS CIRCULAR LETTER IS ENCLOSED AS A MATTER OF CONVENIENCE. THERE IS TRANSMITTED A PROPOSAL OF SWIFT AND COMPANY. THE CONTRACTOR AGREES THAT HE WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF THIS CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE BITUMINOUS COAL CODE SET OUT IN ACCORDANCE WITH SECTION 4 OF SAID ACT AS CERTIFIED TO BY THE NATIONAL BITUMINOUS COAL COMMISSION.'.

A-68690, DECEMBER 19, 1935, 15 COMP. GEN. 544

CONTRACTS - SPECIFICATIONS - BITUMINOUS COAL CONSERVATION ACT OF 1935 A CONTRACT FOR THE PURCHASE OF PROVISIONS IS NOT A CONTRACT "FOR ANY PUBLIC WORK, OR SERVICE" WITHIN THE MEANING OF THE BITUMINOUS COAL CONSERVATION ACT OF AUGUST 30, 1935, 49 STAT. 1007, REQUIRING THAT GOVERNMENT CONTRACTS FOR ANY PUBLIC WORK, OR SERVICE, SHALL CONTAIN A PROVISION THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL IN THE CARRYING OUT OF SUCH CONTRACT FROM ANY BUT A CODE MEMBER, AND THE DELETION BY A BIDDER OF SUCH PROVISION IN A PROPOSAL FOR THE PURCHASE OF DAIRY PRODUCTS DOES NOT JUSTIFY REJECTION OF THE BID. THE PROVISION PROHIBITING CONTRACTORS FROM PURCHASING BITUMINOUS COAL FROM OTHER THAN A BITUMINOUS COAL CONSERVATION ACT CODE MEMBER IN CARRYING OUT A GOVERNMENT CONTRACT SHOULD BE OMITTED FROM INVITATIONS TO BID IN MAKING PURCHASES OF PROVISIONS IN THE FUTURE. WHERE, HERETOFORE, BIDS HAVE BEEN SUBMITTED IN SOME OF WHICH THE PROVISION HAS NOT BEEN DELETED AND THE CONTRACT HAS NOT YET BEEN AWARDED THERE SHOULD BE REJECTION OF ALL BIDS AND READVERTISEMENT. IN PURCHASES OF THE CLASSES TO WHICH THE PROHIBITIVE PROVISION APPLIES, DELETION OF THE PROVISION JUSTIFIES DISREGARDING THE BID IN MAKING AWARD.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, DECEMBER 19, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 4, 1935, AS FOLLOWS:

REFERENCE IS MADE TO CIRCULAR LETTER NO. 123, DATED OCTOBER 2, 1935, OF THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, DEALING WITH STIPULATIONS TO BE MADE A PART OF CONTRACTS FOR THE PURCHASE OF COAL AND OF CONTRACTS FOR PUBLIC WORK OR SERVICE, PURSUANT TO THE BITUMINOUS COAL CONSERVATION ACT (PUBLIC--- NO. 402---, 74TH CONGRESS, APPROVED AUGUST 30, 1935). COPY OF THIS CIRCULAR LETTER IS ENCLOSED AS A MATTER OF CONVENIENCE.

IN THIS CONNECTION, THERE IS TRANSMITTED A PROPOSAL OF SWIFT AND COMPANY, EVANSVILLE, INDIANA, TO FURNISH BUTTER AND CHEESE TO THE UNITED STATES NARCOTIC FARM, LEXINGTON, KENTUCKY, DURING THE MONTH OF DECEMBER 1935. SWIFT AND COMPANY SUBMITTED THE ONLY PROPOSAL RECEIVED FOR FURNISHING ITEMS 10, 11, 14, 15, 16, AND 18 IN RESPONSE TO THIS INVITATION TO BID. THE PROPOSAL FORM CONTAINS THE FOLLOWING PROVISION, PRESCRIBED IN PROCUREMENT DIVISION CIRCULAR LETTER NO. 123, WHICH HAS BEEN STRICKEN OUT BY SWIFT AND COMPANY:

"IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14 (B) OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935 (PUBLIC--- NO. 402---, 74TH CONGRESS, APPROVED AUGUST 30, 1935), THE CONTRACTOR AGREES THAT HE WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF THIS CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE BITUMINOUS COAL CODE SET OUT IN ACCORDANCE WITH SECTION 4 OF SAID ACT AS CERTIFIED TO BY THE NATIONAL BITUMINOUS COAL COMMISSION.'

AS SWIFT AND COMPANY IS THE ONLY BIDDER ON THE SPECIFIED ITEMS, YOUR DECISION IS REQUESTED AS TO WHETHER THE BID OF SWIFT AND COMPANY SHOULD BE REJECTED, ON THE BASIS OF THIS DELETION, AND NEW PROPOSALS SOLICITED, OR WHETHER IT MAY BE ACCEPTED AS SUBMITTED.

FOR GUIDANCE IN FUTURE CASES, YOUR DECISION IS ALSO REQUESTED ON THE FOLLOWING QUESTION: WHERE THERE IS MORE THAN ONE BIDDER AND THE LOWEST BIDDER HAS DELETED THE PROVISION IN QUESTION, MAY THE BID OF THE NEXT LOWEST BIDDER WHO HAS AGREED TO THE PROVISION BE ACCEPTED?

IT WILL BE NOTED THAT THE PROPOSAL OF SWIFT AND COMPANY IS FOR THE FURNISHING OF SUPPLIES DURING THE MONTH OF DECEMBER, AND FOR THAT REASON AN EARLY DECISION IN THE MATTER WILL BE APPRECIATED.

CIRCULAR LETTER NO. 123, DATED OCTOBER 2, 1935, APPEARS TO HAVE BEEN PROMULGATED PURSUANT TO AND FOR THE PURPOSE OF EFFECTUATING THE PROVISIONS AND REQUIREMENTS OF CERTAIN SECTIONS OF THE ACT OF AUGUST 30, 1935 (49 STAT. 1007), SECTION 14 (B) OF WHICH PROVIDES:

(B) EACH CONTRACT MADE BY THE UNITED STATES, OR ANY DEPARTMENT OR AGENCY THEREOF, WITH A CONTRACTOR FOR ANY PUBLIC WORK, OR SERVICE, SHALL CONTAIN A PROVISION THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF SUCH CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE CODE SET OUT IN SECTION 4 OF THIS ACT AS CERTIFIED TO BY THE NATIONAL BITUMINOUS COAL COMMISSION.

THE PROVISION IS REQUIRED IN EACH CONTRACT "FOR ANY PUBLIC WORK, OR SERVICE.' SUCH PROVISION IS NOT REQUIRED IN CONTRACTS FOR THE PURCHASE OF BUTTER AND CHEESE OR OTHER PROVISIONS. A CONTRACT FOR THE PURCHASE OF PROVISIONS IS NOT A CONTRACT "FOR ANY PUBLIC WORK, OR SERVICE.'

ACCORDINGLY, THERE APPEARS NO LEGAL OBJECTION TO ACCEPTANCE OF THE BID OF SWIFT AND CO. AS SUBMITTED.

IN MAKING PURCHASES OF PROVISIONS IN THE FUTURE, THE PROVISION IN QUESTION SHOULD BE OMITTED FROM THE INVITATIONS. AND IN SUCH PURCHASES WHERE BIDS HAVE BEEN SUBMITTED HERETOFORE IN SOME OF WHICH THE PROVISION HAS NOT BEEN DELETED, AND THE CONTRACT HAS NOT YET BEEN AWARDED, ALL THE BIDS SHOULD BE REJECTED AND THE NEEDS OF THE GOVERNMENT READVERTISED IN ORDER THAT ALL THE BIDS MAY BE SUBMITTED ON THE SAME BASIS.

IN CONTRACTS OF THE CLASSES TO WHICH THE PROVISION ABOVE QUOTED APPLIES BIDS IN WHICH THE PROVISION HAS BEEN DELETED ARE TO BE DISREGARDED IN MAKING THE AWARD.