A-83501, FEBRUARY 19, 1937, 16 COMP. GEN. 777

A-83501: Feb 19, 1937

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ADVERTISING - SPARE PARTS - PROPRIETARY EQUIPMENT ADVERTISING IS REQUIRED IN CONNECTION WITH THE PURCHASE OF SPARE PARTS FOR EQUIPMENT. NOTWITHSTANDING THE EQUIPMENT IS THE PRODUCT OF A PARTICULAR MANUFACTURER. EXCEPT WHERE PURCHASE IS OTHERWISE PROVIDED FOR BY STATUTE. AS FOLLOWS: THERE HAVE BEEN RECEIVED YOUR LETTERS OF OCTOBER 28TH. PURCHASES WERE MADE IN EACH OF THE ABOVE CASES IN THE OPEN MARKET WITHOUT ADVERTISING. THESE PARTS ARE PROPRIETARY TO THE MANUFACTURERS OF THE PARTICULAR MACHINERY AND EQUIPMENT AND CANNOT BE PROCURED FROM DEALERS IN GENERAL. THEY ARE NOT ARTICLES FOR THE FURNISHING OF WHICH THERE COULD BE ANY COMPETITION. IT IS THE DUTY OF OUR PURCHASING DEPARTMENT TO PROCURE SUPPLIES AT A MINIMUM COST WITH A MAXIMUM SERVICE.

A-83501, FEBRUARY 19, 1937, 16 COMP. GEN. 777

ADVERTISING - SPARE PARTS - PROPRIETARY EQUIPMENT ADVERTISING IS REQUIRED IN CONNECTION WITH THE PURCHASE OF SPARE PARTS FOR EQUIPMENT, NOTWITHSTANDING THE EQUIPMENT IS THE PRODUCT OF A PARTICULAR MANUFACTURER, EXCEPT WHERE PURCHASE IS OTHERWISE PROVIDED FOR BY STATUTE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GENERAL PURCHASING OFFICER, THE PANAMA CANAL, FEBRUARY 19, 1937:

THERE HAS BEEN RECEIVED YOUR REPORT OF DECEMBER 11, 1936, AS FOLLOWS:

THERE HAVE BEEN RECEIVED YOUR LETTERS OF OCTOBER 28TH, NOVEMBER 24TH, AND NOVEMBER 25, 1936 (REFERENCE A-ELP-CE), WITH RESPECT TO PURCHASES MADE BY THE PANAMA CANAL WITHOUT ADVERTISING UNDER THE FOLLOWING CONTRACTS:

CHART

PCLW-18634. WESTINGHOUSE ELECTRIC AND MANUFACTURING COMPANY,

PCLW-19378. WESTINGHOUSE ELECTRIC AND MANUFACTURING COMPANY,

PCLW-19191. INGERSOLL-RAND COMPANY,

PCLW-19433. INGERSOLL-RAND COMPANY,

PCLW-19451. INGERSOLL-RAND COMPANY,

PCLW-19457. INGERSOLL-RAND COMPANY,

PCLW-19470. INGERSOLL-RAND COMPANY,

PCLW-19370. AMERICAN AUTOMATIC ELECTRIC SALES COMPANY,

PCLW-19538. AMERICAN AUTOMATIC ELECTRIC SALES COMPANY,

PCLW-19326. GENERAL MOTORS EXPORT COMPANY.

AS STATED IN THE CONTRACTS AND NOTED IN YOUR LETTERS, PURCHASES WERE MADE IN EACH OF THE ABOVE CASES IN THE OPEN MARKET WITHOUT ADVERTISING; IT BEING IMPRACTICABLE TO SECURE COMPETITION BECAUSE MATERIAL ORDERED CONSISTED OF REPAIR PARTS FOR EQUIPMENT IN USE MANUFACTURED BY THE ABOVE CONTRACTORS. IN VIEW OF THE DECISIONS OF YOUR OFFICE (7 COMP. GEN. 282 AND 14 COMP. GEN. 859), YOU REQUEST FURTHER EXPLANATION OF THE ABSENCE OF ADVERTISING.

THE REPAIR PARTS PROCURED UNDER THE ABOVE CONTRACTS CONSISTED OF---

(A) ELECTRICAL PARTS FOR GRADERS AND HOUSEHOLD RANGES MANUFACTURED BY THE WESTINGHOUSE ELECTRIC AND MANUFACTURING COMPANY.

(B) PARTS FOR ROCK DRILLS, ELECTRICAL PROPELLING EQUIPMENT FOR TUG BOATS, PAVING BREAKERS, JACK HAMMERS, AND AIR COMPRESSORS MANUFACTURED BY THE INGERSOLL-RAND COMPANY.

(C) PARTS FOR AUTOMATIC TELEPHONES MANUFACTURED BY THE AMERICAN AUTOMATIC ELECTRIC SALES COMPANY;

(D) PARTS FOR CHEVROLET MOTOR VEHICLES MANUFACTURED BY THE GENERAL MOTORS EXPORT COMPANY.

THESE PARTS ARE PROPRIETARY TO THE MANUFACTURERS OF THE PARTICULAR MACHINERY AND EQUIPMENT AND CANNOT BE PROCURED FROM DEALERS IN GENERAL. THEY ARE NOT ARTICLES FOR THE FURNISHING OF WHICH THERE COULD BE ANY COMPETITION, AND ADVERTISING UNDER THESE CIRCUMSTANCES WOULD ACCOMPLISH NO USEFUL PURPOSE.

IT IS THE DUTY OF OUR PURCHASING DEPARTMENT TO PROCURE SUPPLIES AT A MINIMUM COST WITH A MAXIMUM SERVICE, HAVING IN MIND THE BEST INTERESTS OF THE UNITED STATES GOVERNMENT. EXPERIENCE OVER A PERIOD OF YEARS HAS DEMONSTRATED THE FUTILITY OF REPEATEDLY ADVERTISING FOR PARTS FOR SPECIALIZED EQUIPMENT SUCH AS IS COVERED BY THE CONTRACTS WITH THE WESTINGHOUSE ELECTRIC AND MANUFACTURING COMPANY, THE INGERSOLL-RAND COMPANY, THE AMERICAN AUTOMATIC ELECTRIC SALES COMPANY, AND THE GENERAL MOTORS EXPORT COMPANY. THE PARTS ARE MADE FROM PATTERNS AND SPECIFICATIONS PECULIARLY CHARACTERISTIC TO THE EQUIPMENT TO WHICH THEY PERTAIN; THEY ARE PROPRIETARY TO THE MANUFACTURER OF THE EQUIPMENT, AND THE MANUFACTURER IS THE SOLE DISTRIBUTOR. PARTS FOR EQUIPMENT MANUFACTURED BY ONE CONCERN ARE NOT INTERCHANGEABLE ON EQUIPMENT MANUFACTURED BY OTHERS, AND MANUFACTURERS DO NOT PRODUCE PARTS FOR EQUIPMENT MADE BY COMPETITORS. FURTHERMORE, IT WOULD BE IMPOSSIBLE FOR A PROCURING AGENCY TO PREPARE MINUTE SPECIFICATIONS FOR THE THOUSANDS OF PARTS CHARACTERISTIC TO SPECIALIZED MACHINERY AND EQUIPMENT.

UNTIL RELATIVELY RECENT YEARS THE NEEDS FOR CHEVROLET PARTS WERE ADVERTISED FOR UNDER CIRCULAR INVITATIONS AND BIDS WERE RECEIVED REPEATEDLY FROM ONLY THE MANUFACTURER. AFTER FOLLOWING THIS PROCEDURE FOR A CONSIDERABLE PERIOD OF TIME, IT WAS DETERMINED THAT ADVERTISING WOULD SERVE NO USEFUL PURPOSE AND ADVERTISEMENT FOR THESE PARTS WAS ALSO DISCONTINUED WITH THE RESULTANT SAVINGS OF CONSIDERABLE EXPENSE IN THE PREPARATION OF INVITATIONS FOR BIDS AND WORK RELATING THERETO.

THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, WITH RESPECT TO ADVERTISING FOR THE PURCHASE OF SPARE PARTS HAVE BEEN STATED IN 7 COMP. GEN. 282 AND 14 ID. 859, REFERRED TO IN YOUR ABOVE-QUOTED LETTER, AND IT CANNOT BE ASSUMED, IN THE ABSENCE OF ADVERTISING, THAT NO ONE EXCEPT THE MANUFACTURER OF THE PARTICULAR EQUIPMENT MAY SUBMIT A BID FOR FURNISHING SPARE PARTS. SPARE PARTS TO EQUIPMENT ARE NOT INFREQUENTLY CARRIED IN STOCK BY DEALERS, JOBBERS, AND OTHERS, AND IN SOME INSTANCES, SPARE PARTS ARE MANUFACTURED BY OTHERS THAN THE MANUFACTURERS OF THE EQUIPMENT. SECTION 3709, REVISED STATUTES, DOES NOT PERMIT OF ANY DISCRETION IN THIS MATTER, AND IF IT BE THE BELIEF OF THE PANAMA CANAL THAT IT SHOULD HAVE AUTHORITY TO PURCHASE SPARE PARTS WITHOUT ADVERTISING, THE MATTER WOULD APPEAR TO BE FOR PRESENTING TO THE CONGRESS WITH A VIEW TO OBTAINING LEGISLATION SIMILAR TO THAT OBTAINED BY THE POST OFFICE DEPARTMENT IN THE ACT OF JUNE 30, 1930, 46 STAT. 838, AS FOLLOWS:

THAT WHENEVER MOTOR-TRUCK PARTS ARE NEEDED BY THE POST OFFICE DEPARTMENT IN THE OPERATION OF MOTOR TRUCKS, THE POSTMASTER GENERAL IS HEREBY AUTHORIZED TO ENTER INTO AGREEMENTS WITH TRUCK MANUFACTURERS FOR THE PURCHASE OF SUCH TRUCK PARTS AT A PRICE NOT EXCEEDING THE TRUCK MANUFACTURER'S LIST PRICE, LESS REGULAR DISCOUNTS, WITHOUT ADVERTISING UNDER SUCH ARRANGEMENTS AS IN THE OPINION OF THE POSTMASTER GENERAL WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT.

THE MANDATORY TERMS OF SECTION 3709, REVISED STATUTES, MAY NOT BE DISREGARDED BY PURCHASING OFFICERS IN THE ABSENCE OF AUTHORITY SIMILAR TO THAT CONTAINED IN THE ABOVE-QUOTED ACT OF JUNE 30, 1930, IN THE PURCHASE OF SPARE PARTS, AND IN THE ABSENCE OF SUCH AUTHORITY, YOU ARE ADVISED THAT THIS OFFICE MAY NOT APPROVE CHARGES AGAINST APPROPRIATED MONEYS FOR ANY PURCHASES MADE UNDER THE ABOVE REFERRED TO OR SIMILAR CONTRACTS ENTERED INTO WITHOUT ADVERTISING.