A-78624, AUGUST 21, 1936, 16 COMP. GEN. 171

A-78624: Aug 21, 1936

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AS FOLLOWS: REFERENCE IS MADE TO YOUR LETTER OF JULY 22ND. IT WILL BE NOTED IN ENCLOSURE (H) THAT THE BITUMASTIC ENAMEL SPECIFIED ON THE REQUISITION WAS A PROPRIETARY ITEM AND THEREFORE THE MATTER WAS REFERRED TO THE WORKS PROGRESS ADMINISTRATION FOR DETERMINATION THAT PROPRIETARY ENAMEL WAS REQUIRED OR AUTHORIZED. IT WILL BE NOTED THAT ADMINISTRATIVE APPROVAL OF THE PROPRIETARY ITEM. WAS GIVEN. INVITATION NO. 15370 WAS ISSUED BY THE STATE PROCUREMENT OFFICER OF NEW JERSEY ON JUNE 30TH. IT WAS DETERMINED THAT IN VIEW OF THE REQUIREMENT FOR A PROPRIETARY PRODUCT AND THE APPROVAL FOR SUCH PURCHASE BY THE WORKS PROGRESS ADMINISTRATION. THE STATE PROCUREMENT OFFICER WAS INSTRUCTED TO READVERTISE.

A-78624, AUGUST 21, 1936, 16 COMP. GEN. 171

ADVERTISING - BIDS - PROPRIETARY PRODUCTS CREDIT MAY NOT BE ALLOWED FOR PAYMENTS FROM APPROPRIATED MONEYS FOR PROPRIETARY PRODUCT MANUFACTURED AND OFFERED FOR SALE BY ONLY ONE CONCERN, IN THE ABSENCE OF A SHOWING THAT NO OTHER CONCERN COULD FURNISH MATERIALS MEETING THE NEEDS OF THE UNITED STATES, ADVERTISING IN SUCH A CASE BEING A MERE USELESS PROCEDURE, AND NOT A COMPLIANCE WITH SECTION 3709, REVISED STATUTES, REQUIRING PURCHASES AFTER ADVERTISING FOR COMPETITIVE BIDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, AUGUST 21, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 8, 1936, AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF JULY 22ND, A-78624, RELATIVE TO THE PROTEST FILED WITH YOUR OFFICE BY THE BARRETT COMPANY IN CONNECTION WITH INVITATION NO. 15370A FOR THE SUPPLY OF PIPE PROTECTION MATERIALS ISSUED BY THE STATE PROCUREMENT OFFICER OF NEW JERSEY.

IT WILL BE NOTED IN ENCLOSURE (H) THAT THE BITUMASTIC ENAMEL SPECIFIED ON THE REQUISITION WAS A PROPRIETARY ITEM AND THEREFORE THE MATTER WAS REFERRED TO THE WORKS PROGRESS ADMINISTRATION FOR DETERMINATION THAT PROPRIETARY ENAMEL WAS REQUIRED OR AUTHORIZED. IT WILL BE NOTED THAT ADMINISTRATIVE APPROVAL OF THE PROPRIETARY ITEM, BITUMASTIC ENAMEL, WAS GIVEN, AS INDICATED IN ENCLOSURE (I) AS ESTABLISHED BY THE INFORMATION CONTAINED IN THE ENCLOSURE (J).

DUE TO THE URGENT REQUIREMENT FOR THE MATERIAL, INVITATION NO. 15370 WAS ISSUED BY THE STATE PROCUREMENT OFFICER OF NEW JERSEY ON JUNE 30TH. THE LETTER OF THIS OFFICE, DATED JUNE 25TH (ENCLOSURE B) AUTHORIZED PURCHASE OF THE PROPRIETARY PRODUCT. IT APPEARS THAT THE STATE PROCUREMENT OFFICER IN ERROR SPECIFIED BITUMASTIC ENAMEL,"WAILES DOVE HERMISTON OR EQUAL AS APPROVED," IN HIS INVITATION NO. 15370. (ENCLOSURE E), IT WAS DETERMINED THAT IN VIEW OF THE REQUIREMENT FOR A PROPRIETARY PRODUCT AND THE APPROVAL FOR SUCH PURCHASE BY THE WORKS PROGRESS ADMINISTRATION, ALL BIDS SHOULD BE REJECTED, AND THE STATE PROCUREMENT OFFICER WAS INSTRUCTED TO READVERTISE, WHICH WAS DONE UNDER

IT WILL BE FURTHER NOTED THAT THE BID OF THE BARRETT COMPANY, ALTHOUGH MADE ON INVITATION NO. 15370A, CONTAINED THE ADDITION "OR EQUAL" AND "MAKE QUOTING ON BARRETT.'

IN VIEW OF THE FACT THAT INVITATION NO. 15370A WAS DEFINITELY FOR THE PURCHASE OF A PROPRIETARY PRODUCT, BITUMASTIC ENAMEL, AS MANUFACTURED BY WAILES DOVE HERMISTON CORPORATION, THE BID OF THE BARRETT COMPANY WAS REJECTED, AS IT PROPOSED TO FURNISH A PRODUCT OTHER THAN AS SPECIFIED.

IN VIEW OF THE FACT THAT THE REQUIREMENT OF A PROPRIETARY PRODUCT APPEARS TO HAVE BEEN ESTABLISHED AND APPROVED BY THE WORKS PROGRESS ADMINISTRATION, IT IS THE OPINION OF THIS OFFICE THAT IT WAS IN ORDER TO PURCHASE A PROPRIETARY PRODUCT, AND TO REJECT THE BID OF THE BARRETT COMPANY, WHICH DID NOT PROPOSE TO FURNISH THE ENAMEL IN ACCORDANCE WITH SPECIFICATIONS.

IT IS NOT THE RESPONSIBILITY OF THIS OFFICE TO DETERMINE THE NEEDS WITH RESPECT TO PIPE PROTECTION MATERIALS. IT IS, HOWEVER, THE RESPONSIBILITY OF THIS OFFICE TO SEE THAT THE LAW WITH RESPECT TO SUCH MATTERS IS COMPLIED WITH AND THAT CREDIT BE NOT ALLOWED FOR APPROPRIATED MONEYS EXPENDED IN THE PROCUREMENT OF SUPPLIES IN VIOLATION OF THE STATUTES APPLICABLE THERETO.

SECTION 3709, REVISED STATUTES, REQUIRES THAT ALL PURCHASES OF SUPPLIES, EQUIPMENT, MATERIALS, ETC., EXCEPT IN THE CASE OF EMERGENCY, BE MADE AFTER ADVERTISING FOR COMPETITIVE BIDS. THE NUMEROUS DECISIONS OF THE COURTS AND OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT COMPETITION MUST BE ON AN EQUAL BASIS AND ON COMMON GROUND. (SEE PARTICULARLY UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND UNITED STATES V. PAN AMERICAN PETROLEUM COMPANY, 6 FED./2D) 43, 68.)

IT HAS BEEN HELD, ALSO, THAT UNDER EXISTING LAW GOVERNING THE PURCHASE OF EQUIPMENT, SUPPLIES, MATERIALS, ETC., FOR THE GOVERNMENT THE CONTROLLING ELEMENT IS THE JOB TO BE DONE, THE WORK NECESSARY TO BE ACCOMPLISHED. THE REQUEST FOR BIDS SHOULD FAIRLY REFLECT THE ACTUAL NEED THROUGH SPECIFICATIONS OR OTHERWISE, AND THE LOWEST PRICED ARTICLE THAT WILL ANSWER THE NEEDS IS THAT AUTHORIZED TO BE PURCHASED AT PUBLIC EXPENSE.

IT MAY BE STATED AS A GENERAL PROPOSITION THAT BIDDERS ARE REQUIRED TO AND THE SPECIFICATIONS ACCOMPANYING SAME, AND BIDS NOT SUBMITTED IN ACCORDANCE THEREWITH OR BIDS THAT DO NOT MEET THE REQUIREMENTS AS SET FORTH IN THE SPECIFICATIONS MAY, UNDER CERTAIN CIRCUMSTANCES AND UPON A PROPER SHOWING OF THE FACTS INVOLVED, BE REJECTED.

IN THE ADVERTISEMENT ON WHICH BIDS WERE ASKED IN THIS CASE, THE PROSPECTIVE BIDDERS WERE NOT ADVISED AS TO THE ACTUAL NEEDS OF THE UNITED BITUMASTIC) MANUFACTURED AND OFFERED FOR SALE BY ONLY ONE CONCERN--- THE EVIDENT PURPOSE BEING TO PREVENT COMPETITION.

IT HAS BEEN HELD REPEATEDLY THAT THE NAMING OF A PARTICULAR MAKE OF ARTICLE, IN AN ADVERTISEMENT FOR PROPOSALS TO THE EXCLUSION OF OTHER ARTICLES OF SIMILAR OR EQUAL QUALITY, IS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF THE STATUTE; AND THAT WHEN, IN ORDER TO INDICATE THE FOLLOWED BY THE QUALIFYING PHRASE "OR EQUAL.' BY THE PROCUREMENT OFFICER UNDER DATE OF JUNE 30, 1936, ADVISED PROSPECTIVE BIDDERS THAT "WAILES DOVE HERMISTON OR EQUAL AS APPROVED" WAS WHAT WAS REQUIRED. BUT ALL BIDS RECEIVED IN RESPONSE THERETO WERE REJECTED AND NEW BIDS WERE ASKED, ELIMINATING THE WORDS "OR EQUAL" AND SPECIFYING ONLY THE PARTICULAR PROPRIETARY MATERIAL "WAILES DOVE HERMISTON.' THE RECORD DISCLOSES, ALSO, THAT THIS ACTION OF THE PROCUREMENT OFFICER IN ASKING FOR BIDS ON THE PARTICULAR MAKE HAD THE APPROVAL OF THE SPECIAL ASSISTANT TO THE DIRECTOR OF PROCUREMENT. IT THUS APPEARS THAT THE PARTICULAR PROPRIETARY PRODUCT, MANUFACTURED AND SOLD EXCLUSIVELY BY ONE CONCERN, HAD BEEN SELECTED IN ADVANCE OF ADVERTISING AS THE MATERIAL THAT WOULD BE PURCHASED REGARDLESS OF MATERIALS OFFERED BY OTHER BIDDERS AND AT A LOWER PRICE. CONSEQUENTLY, THE ADVERTISING IN THIS CASE WAS A USELESS PROCEDURE. AS TO THE DESIRE FOR MATERIALS MANUFACTURED BY A PARTICULAR CONCERN, YOUR ATTENTION IS INVITED TO DECISION OF JUNE 7, 1926, 5 COMP. GEN. 963, 966, WHEREIN IT WAS SAID:

THE FACTS OF RECORD DO NOT DISCLOSE, AND YOU DO NOT STATE, THAT THE PARTICULAR ENGINES MADE BY THE WISCONSIN MOTOR MANUFACTURING CO., ARE THE ONLY ENGINES THAT WILL IN FACT ANSWER THE PURPOSES FOR WHICH THEY ARE REQUIRED. THERE IS NO AUTHORITY OF LAW FOR THE STANDARDIZATION OF SUCH EQUIPMENT BY THE COAST GUARD, AND THE FACT THAT NUMEROUS TESTS HAVE BEEN MADE BY BOARDS APPOINTED FOR THE PURPOSE OF MAKING INVESTIGATIONS WITH A VIEW OF STANDARDIZATION DOES NOT OPERATE TO TAKE THE MATTER FROM UNDER THE PROVISIONS OF SECTION 3709, REVISED STATUTES, SUPRA. IT MAY ALSO BE STATED THAT EXPERIENCE WITH A PARTICULAR ENGINE DOES NOT JUSTIFY EXCLUDING BIDDERS OFFERING OTHER MAKES OF ENGINES. SUCH A COURSE WOULD RESULT IN ESTABLISHING PERMANENTLY BUT ONE MAKE OF MACHINERY OR EQUIPMENT WITHOUT GIVING TRIAL TO POSSIBLE IMPROVEMENTS THROUGH OTHER MAKES. IT APPEARS THAT WHAT IS NEEDED IS NOT AN ENGINE OF A PARTICULAR MAKE BUT AN ENGINE THAT WILL MEET CERTAIN PERFORMANCE REQUIREMENTS OF THE UNITED STATES COAST GUARD SERVICE. THE DESIRE FOR A PARTICULAR MAKE OF ENGINE IS NOT OF ITSELF SUFFICIENT JUSTIFICATION FOR THE PURCHASE OF SAID MAKE TO THE EXCLUSION OF OTHERS IF THE OTHERS ARE EQUALLY ADAPTABLE TO THE NEEDS OF THE SERVICE. 5 COMP. GEN. 546.

SEE ALSO 11 COMP. GEN. 264.

WHILE THERE ACCOMPANIES YOUR LETTER A COPY OF A REPORT DATED MAY 15, 1936, FROM THE CHIEF ENGINEER, BUREAU OF WATER, JERSEY CITY, N.J., TO THE EFFECT THAT THE WAILES DOVE HERMISTON PRODUCT HAD BEEN FOUND SATISFACTORY AND THAT CERTAIN PIPE COATING JOBS IN VARIOUS CITIES HAD BEEN FOUND UNSATISFACTORY BUT THERE IS NO SHOWING THAT NO CONCERN OTHER THAN WAILES DOVE HERMISTON CORPORATION COULD FURNISH SATISFACTORY MATERIALS IF GIVEN AN OPPORTUNITY TO BID. ON THE OTHER HAND, THE BARRETT COMPANY SPECIFICALLY STATES THAT: SPECIALIZED EXPERIENCE:

SINCE 1854 THE BARRETT COMPANY HAS SPECIALIZED IN MANUFACTURING WATERPROOFING PRODUCTS FOR TUNNELS, DAMS, SUBWAYS, AND OTHER UNDERGROUND STRUCTURES. THESE EIGHTY-TWO YEARS OF EXPERIENCE ENABLED BARRETT TO BRING SPECIALIZED KNOWLEDGE TO THE PROBLEM OF PROTECTING WATER LINES AND RESULTED IN THE DEVELOPMENT OF BITUMINOUS ENAMEL COATING AND LINING MATERIALS ESPECIALLY DESIGNED TO PROVIDE DEPENDABLE AND ECONOMICAL PROTECTION.

NOWHERE IN THE RECORD IS THERE ANY SUGGESTION THAT THIS STATEMENT ON THE PART OF SAID COMPANY IS NOT CORRECT.

THE RECORD DOES NOT DISCLOSE HOW OR ON WHAT BASIS THE SPECIAL ASSISTANT TO THE DIRECTOR OF PROCUREMENT MADE THE DETERMINATION THAT WAILES DOVE HERMISTON BITUMASTIC WAS THE ONLY PIPE PROTECTION MATERIAL THAT WOULD ANSWER THE NEEDS AND SERVE THE PURPOSE OF THE JOB TO BE ACCOMPLISHED IN THIS INSTANCE. FURTHERMORE, THERE IS NO AUTHORITY IN THE SPECIAL ASSISTANT TO THE DIRECTOR OF PROCUREMENT OR ANY OTHER OFFICER OR EMPLOYEE OF THE UNITED STATES TO ISSUE INSTRUCTIONS OR APPROVE A PROCEDURE IN ADVERTISING FOR BIDS THAT IS IN DIRECT CONTRAVENTION OF THE LAW AND THE DECISIONS OF THIS OFFICE IN SUCH MATTERS.

IN CONNECTION WITH THE ADMINISTRATIVE DETERMINATION IN SUCH MATTERS AS HERE PRESENTED YOUR ATTENTION IS INVITED TO THE CASE OF THE UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313, 318, WHEREIN IT WAS SAID:

* * * THERE MUST BE A POINT OF TIME AT WHICH DISCRETION IS EXHAUSTED. THE PROCEDURE FOR THE ADVERTISING FOR BIDS FOR SUPPLIES OR SERVICES TO THE GOVERNMENT WOULD ELSE BE A MOCKERY--- A PROCEDURE, WE MAY SAY, THAT IS NOT PERMISSIVE BUT REQUIRED (SEC. 3709. REV.STAT.). BY IT THE GOVERNMENT IS GIVEN THE BENEFIT OF THE COMPETITION OF THE MARKET AND EACH BIDDER IS GIVEN THE CHANCE FOR A BARGAIN. IT IS A PROVISION, THEREFORE, IN THE INTEREST OF BOTH GOVERNMENT AND BIDDER, NECESSARILY GIVING RIGHTS TO BOTH AND PLACING OBLIGATIONS ON BOTH. AND IT IS NOT OUT OF PLACE TO SAY THAT THE GOVERNMENT SHOULD BE ANIMATED BY A JUSTICE AS ANXIOUS TO CONSIDER THE RIGHTS OF THE BIDDER AS TO INSIST UPON ITS OWN. AND, WE REPEAT, THERE MUST BE SOME POINT AT WHICH DISCRETION CEASES AND OBLIGATION TAKES ITS PLACE. * * *

IT IS NOT APPARENT ON WHAT BASIS IT COULD SERIOUSLY BE CONTENDED THAT SUCH A PROCEDURE AS WAS FOLLOWED IN THIS CASE IS IN THE INTERESTS OF THE UNITED STATES OR FAIR TO BIDDERS. ACCORDINGLY, I HAVE TO ADVISE THAT, ON THE PRESENT RECORD, CREDIT MAY NOT BE ALLOWED FOR ANY PAYMENTS FROM APPROPRIATED MONEYS FOR THE PIPE PROTECTION MATERIALS PURCHASED UNDER AN AWARD MADE PURSUANT TO THE ADVERTISEMENT HERE IN QUESTION.

THE RECORD DISCLOSES, ALSO, THAT A SIMILAR SITUATION EXISTS WITH REFERENCE TO SPECIFICATIONS RECENTLY ISSUED BY THE STATE PROCUREMENT OFFICER, MONTGOMERY, ALA., AND THE STATE PROCUREMENT OFFICER, LOS ANGELES, CALIF. WHAT HAS BEEN SAID WITH RESPECT TO THE PURCHASE BY THE STATE PROCUREMENT OFFICER, NEWARK, N.J., IN THIS INSTANCE, IS EQUALLY APPLICABLE TO THE PROPOSED PURCHASES FOR ALABAMA AND CALIFORNIA.