A-80529, SEPTEMBER 16, 1936, 16 COMP. GEN. 258

A-80529: Sep 16, 1936

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ONLY THREE BIDS PROPOSING TO OPERATE ON A NATION-WIDE BASIS WERE RECEIVED. WHICH WERE RECEIVED IN ACCORDANCE WITH A GENERAL INVITATION TO BID MAILED TO ELEVEN MOVING AND STORAGE COMPANIES AND THE U.S. THERE IS ALSO ATTACHED ALL COPIES OF CORRESPONDENCE BETWEEN W. IT WILL BE NOTED THAT THE BIDDERS OPERATE IN A VERY SMALL AREA ON THEIR OWN ACCOUNT AND THAT THEY WILL HAVE TO RELY ON ASSOCIATION CONTACTS TO PERFORM THE SERVICES TO BE CONTRACTED FOR ON A NATION WIDE BASIS. IT APPEARS THAT THE TWO COMPETITORS HAVE APPROXIMATELY THE SAME NUMBER OF WAREHOUSES AVAILABLE IN THE DIFFERENT STATES OF THE UNION. SOME OF WHICH ARE FIREPROOF AND SOME ARE NOT. ALL OF THE WAREHOUSES INCLUDED ON THE ROSTERS ARE OWNED OR OPERATED BY MEMBERS OF THE ASSOCIATIONS WITH WHICH THE BIDDERS ARE AFFILIATED.

A-80529, SEPTEMBER 16, 1936, 16 COMP. GEN. 258

CONTRACTS - SPECIFICATIONS - NATION-WIDE SERVICES ADVERTISED SPECIFICATIONS INVOLVING THE REPOSSESSION AND STORAGE OF REPOSSESSED EQUIPMENT BY THE FEDERAL HOUSING ADMINISTRATION, REQUIRING EVIDENCE OF ABILITY TO RENDER SERVICE ON A NATION-WIDE BASIS EITHER THROUGH WHOLLY OR PARTLY OWNED BRANCHES AND SUBSIDIARIES OR AFFILIATES, IN CONNECTION WITH WHICH, AFTER WIDE ADVERTISEMENT, ONLY THREE BIDS PROPOSING TO OPERATE ON A NATION-WIDE BASIS WERE RECEIVED, MAY NOT BE MADE THE BASIS OF CONTRACT AWARDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, SEPTEMBER 16, 1936:

THERE HAS BEEN RECEIVED A LETTER OF SEPTEMBER 9, 1936, FROM THE PURCHASING AND PROPERTY OFFICER, FEDERAL HOUSING ADMINISTRATION, AS FOLLOWS:

WE ATTACH HERETO, FOR YOUR CONSIDERATION AND DECISION IN ADVANCE OF AWARD, ORIGINAL COPY OF BIDS RECEIVED FROM THE ALLIED VAN LINES, INC., OF NEW YORK CITY; THE FRED SALT COMPANY AND LYON VAN STORAGE COMPANY OF LOS ANGELES, CALIFORNIA; W. L. BYRNES, INC., OF NEW YORK CITY AND THE BYRNES BROTHERS WAREHOUSES, INC., OF NEW YORK CITY, WHICH WERE RECEIVED IN ACCORDANCE WITH A GENERAL INVITATION TO BID MAILED TO ELEVEN MOVING AND STORAGE COMPANIES AND THE U.S. GOVERNMENT ADVERTISER. THERE IS ALSO ATTACHED ALL COPIES OF CORRESPONDENCE BETWEEN W. L. BYRNES, INC., BYRNES BROTHERS WAREHOUSES, INC., AND THE FEDERAL HOUSING ADMINISTRATION WITH REFERENCE TO CERTAIN CHARGES AND COUNTER-CHARGES MADE BY THESE COMPANIES WITH RESPECT TO THE QUALIFICATIONS OF EACH TO PERFORM THE SERVICES COVERED IN OUR SPECIFICATIONS.

IT WILL BE NOTED THAT THE BIDDERS OPERATE IN A VERY SMALL AREA ON THEIR OWN ACCOUNT AND THAT THEY WILL HAVE TO RELY ON ASSOCIATION CONTACTS TO PERFORM THE SERVICES TO BE CONTRACTED FOR ON A NATION WIDE BASIS. FROM THE ROSTERS SUBMITTED BY W. L. BYRNES AND BYRNES BROTHER WAREHOUSES, C., IT APPEARS THAT THE TWO COMPETITORS HAVE APPROXIMATELY THE SAME NUMBER OF WAREHOUSES AVAILABLE IN THE DIFFERENT STATES OF THE UNION, SOME OF WHICH ARE FIREPROOF AND SOME ARE NOT. WITH THE EXCEPTION OF ONE OR TWO WAREHOUSES LOCATED IN THE IMMEDIATE VICINITY OF THEIR INDIVIDUAL OPERATIONS, ALL OF THE WAREHOUSES INCLUDED ON THE ROSTERS ARE OWNED OR OPERATED BY MEMBERS OF THE ASSOCIATIONS WITH WHICH THE BIDDERS ARE AFFILIATED.

A DECISION IS RESPECTFULLY REQUESTED AS TO WHETHER OR NOT AWARD MAY BE MADE TO W. L. BYRNES, INC., NEW YORK CITY, FOR ITEM I AND FOR THAT PART OF ITEM III WHICH PERTAINS TO THE STORAGE OF THE EQUIPMENT OUTLINED UNDER ITEM I AND TO THE BYRNES BROTHERS WAREHOUSES, INC., OF NEW YORK CITY FOR ITEM II AND THAT PART OF ITEM III WHICH WOULD PERTAIN TO THE STORAGE OF EQUIPMENT OUTLINED UNDER ITEM II.

THE SPECIFICATIONS OF MAY 29, 1936, FOR BIDS TO BE OPENED JUNE 22, 1936, WHICH ARE REPORTED TO HAVE BEEN SENT TO 11 MOVING AND STORAGE COMPANIES AND PUBLISHED IN THE UNITED STATES GOVERNMENT ADVERTISER, REQUESTED BIDS UNDER ITEM I FOR DISCONNECTING AND REMOVING MECHANICAL OR ICE REFRIGERATORS AND THE PERFORMANCE OF SUCH ADDITIONAL SERVICE AS PUMPING REFRIGERATORS DOWN, SHUTTING OFF VALVES, REPACKING SHELVES AND TRAYS; DISCONNECTING AND REMOVING ELECTRIC WASHERS, IRONS, COOKING RANGERS, HEATING STOVES, BEVERAGE COOLERS, DISHWASHING MACHINES AND ALL UNIT INSTALLATIONS OF EQUIPMENT AND PROPERTY WHICH WERE NOT PERMANENTLY ATTACHED OR BUILT IN THE REAL PROPERTY AND WHICH MIGHT BE REPOSSESSED BY THE FEDERAL HOUSING ADMINISTRATION IN THE 48 STATES AND THE DISTRICT OF COLUMBIA WITH THE REMOVAL, PICK-UP, AND HAULING FROM PLACE OF REMOVAL TO A WAREHOUSE OF THE CONTRACTOR NEAREST TO SUCH PLACE OF REMOVAL. ITEM II SIMILARLY REQUESTED BIDS FOR DISCONNECTING AND REMOVING OIL BURNERS, FURNACES, AIR-CONDITIONING UNITS, WATER HEATERS, AND OTHER ITEMS OF EQUIPMENT AND MACHINERY ATTACHED TO THE BUILDINGS WHICH MIGHT BE REPOSSESSED BY THE FEDERAL HOUSING ADMINISTRATION AND THE TRANSPORTATION OF SUCH EQUIPMENT TO THE WAREHOUSE OF THE CONTRACTOR NEAREST TO THE PLACE OF REMOVAL OR PICK UP, WHILE ITEM III REQUESTED BIDS FOR THE STORAGE, ETC., OF ALL OF SUCH EQUIPMENT WITH ACCESS THERETO FOR RECONDITIONING AND CLEANING AND FOR PURPOSES OF INSPECTION. THE SPECIFICATIONS PROVIDED THAT

THE BIDDER SHALL SUBMIT SATISFACTORY EVIDENCE OF ABILITY TO RENDER THE FOREGOING SERVICES IN EACH OF THE FORTY-EIGHT STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA EITHER THROUGH WHOLLY OR PARTLY OWNED BRANCHES AND SUBSIDIARIES OR AFFILIATES.

THE RESULT OF SUCH ADVERTISING BEING, AS STATED, THE RECEIPT OF ONLY FOUR BIDS AND WITH ONLY THREE PROPOSING TO OPERATE ON A NATION-WIDE BASIS.

THIS OFFICE HELD IN DECISION OF JANUARY 20, 1936, A-69891, THAT THE SECRETARY OF THE TREASURY WAS NOT JUSTIFIED IN GIVING ONE CONCERN A MONOPOLY OF DRAYAGE SERVICES IN 2,915 CITIES OF THE UNITED STATES. THERE THE PROPOSED CONCERN HAD ITS OWN BRANCHES IN 2,915 CITIES, WHILE HERE IT IS ADMITTED THAT NONE OF THE BIDDERS OPERATES EXCEPT IN A VERY SMALL AREA ON ITS OWN ACCOUNT AND THAT EACH WOULD HAVE TO RELY ON ASSOCIATION CONTACTS TO PERFORM THE SERVICE ON A NATION-WIDE BASIS.

THERE MIGHT BE SOME BASIS FOR CONTRACTING WITH ONE CONCERN FOR THE RENDITION OF THIS SERVICE ON A STATE-WIDE BASIS IN SOME OF THE STATES WHICH DO NOT COVER TOO LARGE A TERRITORY OR ARE NOT SO THICKLY POPULATED, BUT THERE IS NO BASIS FOR CONTRACTING WITH ONE OR TWO CONCERNS, AS PROPOSED, FOR SUCH SERVICES ON A NATION-WIDE SCALE, THOUGH, DOUBTLESS, IT MIGHT BE MORE CONVENIENT FROM AN ADMINISTRATIVE STANDPOINT TO DO SO. EVEN ASSUMING THAT ANY OF THE THREE CONCERNS SUBMITTING BIDS ON A NATION-WIDE BASIS COULD FUNCTION EXPEDITIOUSLY THROUGH ITS ASSOCIATES AND AFFILIATES IN THE VARIOUS STATES AND LOCALITIES THROUGHOUT THE UNITED STATES WHERE THE FEDERAL HOUSING ADMINISTRATION MAY BE UNDER THE NECESSITY OF REPOSSESSING EQUIPMENT--- AN ASSUMPTION WHICH IS OPEN TO GRAVE DOUBT--- THERE IS NO LEGAL JUSTIFICATION FOR GIVING ONE OR TWO CONCERNS A MONOPOLY OF SAID SERVICE AND EXCLUDING OTHER CONCERNS PROPERLY EQUIPPED AND WILLING TO RENDER SUCH SERVICE ON A STATE OR LESSER SCALE.

WITHOUT CONSIDERING OTHER QUESTIONS WHICH MAY BE INVOLVED, YOU ARE ADVISED THAT THIS OFFICE WOULD NOT BE JUSTIFIED IN APPROVING THE CONTRACT AS PROPOSED WITH W. L. BYRNES, INC., AND BYRNES BROS. WAREHOUSES, INC.