A-78662, SEPTEMBER 28, 1936, 16 COMP. GEN. 318

A-78662: Sep 28, 1936

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GOVERNMENT PURCHASES - SOURCES OF SUPPLY - ASCERTAINMENT BY ADVERTISING WHETHER A PARTICULAR MANUFACTURER IS THE ONLY ONE WHO CAN MEET THE ACTUAL NEEDS OF THE UNITED STATES IS FOR THE DETERMINATION BY ADVERTISING FOR BIDS ON SPECIFICATIONS SETTING FORTH SUCH NEEDS. WERE. 1936: YOUR ATTENTION IS INVITED TO CONTRACT NO. THE STANDARD FORM 1036 FILED WITH THE CONTRACT DISCLOSED THAT AWARD WAS MADE WITHOUT ADVERTISING BUT FAILED TO SHOW THE REASONS FOR SUCH PROCEDURE AND IN VIEW THEREOF THIS OFFICE IN LETTER OF JUNE 10. REQUESTED THAT AN EXPLANATION BE FURNISHED SHOWING WHY THE CONTRACT WAS ENTERED INTO WITHOUT ADVERTISING. IN REPLY THERE WAS RECEIVED LETTER OF JUNE 15. FROM THE STATE PROCUREMENT OFFICER AS FOLLOWS: THIS OFFICE IS IN RECEIPT OF YOUR LETTER OF JUNE 10.

A-78662, SEPTEMBER 28, 1936, 16 COMP. GEN. 318

GOVERNMENT PURCHASES - SOURCES OF SUPPLY - ASCERTAINMENT BY ADVERTISING WHETHER A PARTICULAR MANUFACTURER IS THE ONLY ONE WHO CAN MEET THE ACTUAL NEEDS OF THE UNITED STATES IS FOR THE DETERMINATION BY ADVERTISING FOR BIDS ON SPECIFICATIONS SETTING FORTH SUCH NEEDS, AND NOT BY CONCLUSIONS OR OPINIONS FORMED OR OBTAINED OTHERWISE BY CONTRACTING OFFICERS. CREDIT MAY NOT BE ALLOWED FOR PAYMENTS MADE IN CONNECTION WITH PURCHASES OF BITUMASTIC ENAMEL UNDER A CONTRACT BASED UPON SPECIFICATIONS WHICH, ALTHOUGH SUCH AS ANY RELIABLE MANUFACTURER OR DEALER COULD COMPLY WITH, WERE, NEVERTHELESS, BECAUSE OF THE ADMINISTRATIVE OFFICERS' OPINION AS TO SOLE SOURCE, RESTRICTED TO ONE DEALER.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, SEPTEMBER 28, 1936:

YOUR ATTENTION IS INVITED TO CONTRACT NO. ER-TPS-21-20911, DATED MARCH 24, 1936, WITH THE WAILES DOVE HERMISTON CORPORATION COVERING THE PURCHASE OF 44 TONS OF BITUMASTIC ENAMEL.

THE STANDARD FORM 1036 FILED WITH THE CONTRACT DISCLOSED THAT AWARD WAS MADE WITHOUT ADVERTISING BUT FAILED TO SHOW THE REASONS FOR SUCH PROCEDURE AND IN VIEW THEREOF THIS OFFICE IN LETTER OF JUNE 10, 1936, REQUESTED THAT AN EXPLANATION BE FURNISHED SHOWING WHY THE CONTRACT WAS ENTERED INTO WITHOUT ADVERTISING. IN REPLY THERE WAS RECEIVED LETTER OF JUNE 15, 1936, FROM THE STATE PROCUREMENT OFFICER AS FOLLOWS:

THIS OFFICE IS IN RECEIPT OF YOUR LETTER OF JUNE 10, 1936, REGARDING CONTRACT NUMBERED ER-TPS-21-20911 ENTERED INTO MARCH 24, 1936, WITH THE WAILES DOVE HERMISTON CORP., NEW YORK, COVERING BITUMASTIC ENAMEL. YOU REQUEST AN EXPLANATION SHOWING WHY THIS CONTRACT WAS ENTERED INTO WITHOUT ADVERTISING. PLEASE BE ADVISED THAT THIS COMPANY IS THE ONLY MANUFACTURER OF THIS TYPE OF MATERIAL WHICH WILL MEET THE SPECIFICATIONS AND REQUIREMENTS OF THE DEPARTMENT OF WATER SUPPLY, GAS AND ELECTRIC, OF THE CITY OF NEW YORK.

FROM PAST EXPERIENCE THIS OFFICE IS FAMILIAR WITH THE FACT THAT THE ABOVE NAMED COMPANY IS THE ONLY MANUFACTURER OF ACCEPTABLE MATERIAL OF THIS NATURE. THIS OFFICE HAS CONTACTED VARIOUS PUBLIC UTILITIES WHO ARETHE LARGEST USERS OF THIS TYPE OF MATERIAL AND WE HAVE CONFIRMED WITH THEM THE FACT THAT THE ENAMEL OFFERED BY THE WAILES DOVE HERMISTON CORP. IS BY FAR THE BEST AVAILABLE FOR THIS PARTICULAR USAGE. IT IS A MATTER OF RECORD THAT OTHER TYPES OF BITUMASTIC PRODUCTS GIVE OFF FUMES WHICH MAKE IT IMPOSSIBLE FOR MEN TO WORK.

IN REPLY TO THE THIRD PARAGRAPH OF YOUR LETTER, IT IS OUR OPINION THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY OBTAINING BIDS FROM MANUFACTURERS ONLY FOR THIS TYPE OF COMMODITY. IN FACT, THIS MATERIAL TO OUR KNOWLEDGE IS NOT SOLD THROUGH JOBBERS. IT CAN READILY BE APPRECIATED THAT IF AN AWARD WERE MADE TO AN UNSCRUPULOUS JOBBER, HE COULD NOT FURNISH A SATISFACTORY PRODUCT AND WOULD, NO DOUBT, DEFAULT ON CONTRACT BY FURNISHING MATERIAL THAT WOULD NOT MEET THE SPECIFICATIONS OR REQUIREMENTS.

WE TRUST THAT THE ABOVE INFORMATION WILL BE SUFFICIENT FOR YOUR NEEDS.

THE LAW, 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 COMPETITION MUST BE ON AN EQUAL BASIS AND ON COMMON GROUND.

A CASE SIMILAR TO THE ONE HERE INVOLVED WAS BROUGHT TO YOUR ATTENTION IN MY DECISION OF AUGUST 21, 1936, AND YOU WERE ADVISED THAT IN VIEW OF THE FACT THAT THE PROCEDURE FOLLOWED WAS IN VIOLATION OF THE PROVISIONS OF SECTION 3709, REVISED STATUTES, CREDIT WOULD NOT BE ALLOWED FOR ANY PAYMENTS FOR THE PIPE PROTECTION MATERIALS UNDER THE AWARD AS MADE.

IN THE PRESENT CASE THE ENAMEL WAS COVERED BY SPECIFICATIONS WITH WHICH ANY RELIABLE MANUFACTURER OR DEALER COULD COMPLY. NOTWITHSTANDING THIS, ONLY ONE MANUFACTURER WAS GIVEN AN OPPORTUNITY TO BID. THAT IS TO SAY, NOTWITHSTANDING THE FACT THAT THE MATERIALS WAS DESCRIBED BY SPECIFICATIONS, THERE WAS NO EFFORT WHATEVER TO OBTAIN COMPETITIVE BIDS--- NO ADVERTISING WHATEVER.

IT IS TO BE UNDERSTOOD, OF COURSE, THAT CONCLUSIONS OR OPINIONS OF CONTRACTING OFFICERS THAT ONLY ONE MANUFACTURER CAN COMPLY WITH THE SPECIFICATIONS MAY NOT BE ACCEPTED AS CONTROLLING IN SUCH MATTERS. THERE MUST BE A SHOWING AS TO HOW IT WAS DETERMINED THAT A PARTICULAR MANUFACTURER IS THE ONLY CONCERN THAT CAN SUBMIT A BID. THE ONLY PRACTICABLE WAY OF DETERMINING THIS IS BY ADVERTISING FOR BIDS ON SPECIFICATIONS SO DRAWN AS TO SET FORTH WHAT CAN BE SHOWN TO BE THE ACTUAL NEEDS OF THE UNITED STATES AND WITHOUT ANY UNNECESSARY PARTICULARIZATION.

IT IS APPRECIATED THAT THE MATTER OF PURCHASING EQUIPMENT, SUPPLIES, ETC., IS NOT FREE FROM ADMINISTRATIVE DIFFICULTIES AND THAT THERE IS A RESPONSIBILITY ON THE ADMINISTRATIVE AND CONTRACTING OFFICERS TO SECURE MATERIAL SUCH AS HERE INVOLVED THAT WILL REASONABLY SERVE THE NEEDS. BUT THIS RESPONSIBILITY MUST BE DISCHARGED WITHIN THE LAW. IT HAS LONG BEEN THE ESTABLISHED RULE THAT APPROPRIATED MONEYS ARE AVAILABLE ONLY TO ACQUIRE THAT WHICH IS NEEDED AS DISTINGUISHED FROM THAT WHICH MAY BE DESIRED, AND THAT SECTION 3709, REVISED STATUTES, REQUIRES SUCH NEEDS BE SO DESCRIBED AS TO PERMIT FULL AND UNRESTRICTED COMPETITION IN BIDDING THEREON WITH AWARD TO THE LOWEST RESPONSIBLE BIDDER.

IN REGARD TO THE PROVISIONS WITH RESPECT TO MANUFACTURERS, YOUR ATTENTION IS INVITED TO DECISION OF FEBRUARY 14, 1931, 10 COMP. GEN. 369, 371.

THE EXISTING RECORD IN THIS CASE IS SUCH THAT CREDIT MAY NOT BE ALLOWED FOR PAYMENTS TO THE WAILES DOVE HERMISTON CORPORATION UNDER THE AWARD AS MADE.