A-70109, MAY 6, 1936, 15 COMP. GEN. 964

A-70109: May 6, 1936

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IS FOR DETERMINATION. WHEN BIDS HAVE BEEN SOLICITED AND ACCEPTED INVOLVING AMOUNTS WITHIN THE EXEMPTION. THE ORIGINALS ARE FOR FILING WITH THE GENERAL ACCOUNTING OFFICE IN ACCORDANCE WITH GENERAL REGULATIONS. 1936: REFERENCE IS HAD TO LETTERS DATED DECEMBER 12. CREDIT FOR THE ITEMS WAS WITHHELD BECAUSE THERE WAS NO SHOWING THAT THE REQUIREMENTS OF THE LAW WITH RESPECT TO ADVERTISING HAD BEEN COMPLIED WITH. THAT IS. WHERE THE AGGREGATE AMOUNT OF A PURCHASE IS NOT IN EXCESS OF $100. THE FOLLOWING IS QUOTED FROM THE LETTER OF DECEMBER 12. 1935: * * * THE PURCHASES REFERRED TO WERE MADE IN THIS MANNER NOT "MERELY TO AVOID COMPLIANCE WITH THE ACT OF JUNE 5. " BUT BECAUSE IT WAS THE MOST ECONOMICAL TO THE GOVERNMENT.

A-70109, MAY 6, 1936, 15 COMP. GEN. 964

ADVERTISING - BIDS - PURCHASES LESS THAN AMOUNTS EXEMPTED BY LAW WHETHER MORE ADVANTAGEOUS TO THE GOVERNMENT TO SOLICIT BIDS IN CONNECTION WITH PURCHASES LESS IN AMOUNT THAN THE AMOUNT EXEMPTED BY LAW FROM THE STATUTORY REQUIREMENT FOR COMPETITIVE BIDDING, SUCH AS ACT OF JANUARY 12, 1927, 44 STAT. 936, AUTHORIZING THE DEPARTMENT OF THE INTERIOR TO MAKE PURCHASES IN THE OPEN MARKET WHEN THE AGGREGATE AMOUNT DOES NOT EXCEED $100, AND THE LENGTH OF THE PERIOD TO BE COVERED, IS FOR DETERMINATION, IN THE FIRST INSTANCE, BY THE ADMINISTRATIVE OFFICE, BUT WHEN BIDS HAVE BEEN SOLICITED AND ACCEPTED INVOLVING AMOUNTS WITHIN THE EXEMPTION, THE ORIGINALS ARE FOR FILING WITH THE GENERAL ACCOUNTING OFFICE IN ACCORDANCE WITH GENERAL REGULATIONS, NO. 51, 5 COMP. GEN. 1059, AS AMENDED.

COMPTROLLER GENERAL MCCARL TO HENRY ROE CLOUD, SUPERINTENDENT AND SPECIAL DISBURSING AGENT, MAY 6, 1936:

REFERENCE IS HAD TO LETTERS DATED DECEMBER 12, 1935, JANUARY 7, AND JANUARY 14, 1936, FROM THE ACTING SUPERINTENDENT, HASKELL INSTITUTE,REGARDING THE ACTION OF THIS OFFICE IN WITHHOLDING CREDIT IN YOUR FEBRUARY 1935 ACCOUNT FOR PAYMENTS MADE TO GLEED BROTHERS, LAWRENCE, KANSAS, ON VOUCHERS NOS. 1163, 1187, 1236, AND 1269, REPRESENTING PURCHASES IN EACH CASE OF SIX CASES OF EGGS ON THE DATES AND IN THE AMOUNTS AS SHOWN: JANUARY 24, $47.70; JANUARY 30, $47.70; FEBRUARY 6, $49.50; FEBRUARY 13, $49.50; FEBRUARY 20, $48. CREDIT FOR THE ITEMS WAS WITHHELD BECAUSE THERE WAS NO SHOWING THAT THE REQUIREMENTS OF THE LAW WITH RESPECT TO ADVERTISING HAD BEEN COMPLIED WITH.

THE LETTERS FROM THE ACTING SUPERINTENDENT, QUOTED IN PART BELOW, REQUEST INFORMATION AS TO THE PROPER PROCEDURE IN MAKING PURCHASES AS ABOVE, THAT IS, WHERE THE AGGREGATE AMOUNT OF A PURCHASE IS NOT IN EXCESS OF $100, REFERENCE BEING MADE TO A PROVISION IN THE ACT OF JANUARY 12, 1927, 44 STAT. 936 (U.S.C. TITLE V, SECTION 496).

THE FOLLOWING IS QUOTED FROM THE LETTER OF DECEMBER 12, 1935:

* * * THE PURCHASES REFERRED TO WERE MADE IN THIS MANNER NOT "MERELY TO AVOID COMPLIANCE WITH THE ACT OF JUNE 5, 1924, 43 STAT. 392," BUT BECAUSE IT WAS THE MOST ECONOMICAL TO THE GOVERNMENT. WE ARE INFORMED BY THE PRODUCE COMPANIES IN THIS VICINITY THAT THEIR PRICES ON EGGS WOULD NECESSARILY BE HIGHER IF THEY WERE REQUIRED TO BID ON A MONTH'S SUPPLY RATHER THAN ON A WEEK-SUPPLY. FOR THIS REASON ONLY, WE ASKED FOR BIDS EACH WEEK. OUR APPROPRIATION IS SO SMALL THAT WE MUST NECESSARILY ECONOMIZE WHEREVER POSSIBLE.

IN THE LETTER OF JANUARY 7, 1936, IT WAS STATED:

COMPETITIVE BIDS WERE INVITED ON THE SUPPLIES PURCHASED ON THESE VOUCHERS BUT NO CONTRACTS WERE ENTERED INTO. IN EACH INSTANCE THE SUPPLIES WERE ORDERED FROM THE FIRM MAKING THE LOWEST BID. THE ORIGINALS OF THESE BIDS ARE ATTACHED TO OUR COPIES OF THE VOUCHERS AND I AM ENCLOSING HEREWITH COPIES OF THE BIDS WHICH I TRUST WILL BE SUFFICIENT TO REMOVE THE EXCEPTION.

THE LETTER OF JANUARY 14, 1936, IS IN PERTINENT PART AS FOLLOWS:

IT IS OUR UNDERSTANDING THAT IF AN AWARD IS MADE ON A BID WHICH DOES NOT EXCEED $100.00, SAID BID DOES NOT HAVE TO BE COMPLETED AND A CONTRACT PREPARED. IT IS ALSO OUR UNDERSTANDING THAT THIS ACCEPTED BID IS TO BE ATTACHED TO OUR COPY OF THE DISBURSEMENT VOUCHER AND NUMBER TWO OF THE METHOD OF ADVERTISING INDICATED ON THE VOUCHER, TO SHOW THAT BIDS WERE INVITED. IF THIS PROCEDURE IS NOT CORRECT, PLEASE ADVISE WHAT THE PROPER DISPOSITION IS FOR ACCEPTED BIDS WHICH DO NOT EXCEED $100.00 AND WHICH DO NOT CONSTITUTE CONTINUOUS SERVICE. MUST A REGULAR CONTRACT BE PREPARED AND A COPY FILED WITH YOUR OFFICE IN THE RETURNS FILE? WE ARE CONTINUALLY HAVING BIDS OF THIS KIND AND WE WILL APPRECIATE IT IF YOU WILL INFORM US WHAT THE PROPER METHOD IS FOR HANDLING SUCH CASES.

THE ACT OF JANUARY 12, 1927 (44 STAT. 936), SUPRA, RELATIVE TO PURCHASES NOT IN EXCESS OF $100, READS AS FOLLOWS:

THE PURCHASE OF SUPPLIES AND EQUIPMENT OR THE PROCUREMENT OF SERVICES FOR THE DEPARTMENT OF THE INTERIOR, THE BUREAUS AND OFFICES THEREOF, HOWARD UNIVERSITY, AND THE COLUMBIA INSTITUTION FOR THE DEAF, AT THE SEAT OF GOVERNMENT, AS WELL AS THOSE LOCATED IN THE FIELD OUTSIDE THE DISTRICT OF COLUMBIA, MAY BE MADE IN OPEN MARKET WITHOUT COMPLIANCE WITH SECTIONS 3709 AND 3744 OF THE REVISED STATUTES OF THE UNITED STATES, IN THE MANNER COMMON AMONG BUSINESS MEN, WHEN THE AGGREGATE AMOUNT OF THE PURCHASE OR THE SERVICE DOES NOT EXCEED $100 IN ANY INSTANCE.

THERE WAS A SIMILAR PROVISION IN THE ACT OF JUNE 5, 1924, CITED IN THE LETTER OF DECEMBER 12, SUPRA.

PRIOR TO THE ENACTMENT OF THIS PROVISION THE DEPARTMENT OF THE INTERIOR WAS NOT AUTHORIZED TO PURCHASE ON PROPOSAL AND ACCEPTANCE (3 COMP. GEN. 314). THE PROPER ADMINISTRATIVE PROCEDURE IN THE INTERIOR DEPARTMENT AS TO SINGLE PURCHASES AGGREGATING LESS THAN $100 HAS BEEN INDICATED IN NUMEROUS DECISIONS OF THIS OFFICE (4 COMP. GEN. 159; ID. 453; ID. 788; 5 ID. 41).

WHERE, AS IN THE PRESENT INSTANCE, BIDS HAVE BEEN SOLICITED AND AWARD MADE, THERE IS CREATED A CONTRACTUAL OBLIGATION BINDING ON BOTH PARTIES (SEE 3 COMP. GEN. 143; 9 ID. 387), AND THE ORIGINAL ACCEPTED BIDS SHOULD BE ATTACHED TO THE ORIGINAL VOUCHERS TOGETHER WITH A PROPERLY EXECUTED STANDARD FORM NO. 1036, IN ACCORDANCE WITH GENERAL REGULATIONS, NO. 51, OF JUNE 18, 1926 (5 COMP. GEN. 1059 AND 1060), AS AMENDED BY SUPPLEMENTS NO. 1 (6 COMP. GEN. 877), NO. 3 (7 COMP. GEN. 851), AND NO. 6 (10 COMP. GEN. 571). (IN THIS CONNECTION SEE 3 COMP. GEN. 604 AND 6 ID. 311.)

IT IS TO BE OBSERVED THAT THE VOUCHERS IN THE PRESENT CASE INDICATE ON THE FACE THEREOF THAT PURCHASE WAS MADE AFTER ADVERTISING AS "STATED IN NO. 2 OF "METHOD OF OR ABSENCE OF ADVERTISING" SHOWN ON REVERSE HEREOF," WHEREAS THE REVERSE SIDE OF THE VOUCHER SHOWS THAT THE PURCHASE WAS MADE WITHOUT ADVERTISING IN ACCORDANCE WITH THE ACT OF JANUARY 12, 1927 (44 STAT. 936).

IT IS TO BE UNDERSTOOD THAT IT IS FOR THE ADMINISTRATIVE OFFICE TO DECIDE IN THE FIRST INSTANCE AS TO WHETHER IT WILL BE MORE ADVANTAGEOUS TO THE GOVERNMENT TO MAKE SINGLE PURCHASES WITH OR WITHOUT SOLICITING OR ACCEPTING BIDS WHERE THE AMOUNT OF A PURCHASE IS LESS THAN THE AMOUNT EXEMPTED BY LAW, AND, ALSO, WHETHER OR NOT IT WOULD BE ADVANTAGEOUS TO SOLICIT BIDS TO COVER THE NEEDS FOR A LONGER PERIOD. IN EITHER CASE, WHEN BIDS HAVE BEEN SOLICITED AND ACCEPTED, THE ORIGINALS ARE FOR FILING WITH THE GENERAL ACCOUNTING OFFICE IN ACCORDANCE WITH THE PROVISIONS OF GENERAL REGULATIONS 51, SUPRA. THEREFORE, THE COPIES NOW SUBMITTED ARE NOT ACCEPTABLE AND MUST BE REPLACED BY THE ORIGINALS, WHICH IT APPEARS ARE ON FILE IN YOUR OFFICE, BEFORE CREDIT CAN BE ALLOWED ON THE ITEMS IN QUESTION.