A-92127, MARCH 29, 1938, 17 COMP. GEN. 789

A-92127: Mar 29, 1938

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LEAVING ADMINISTRATION OFFICERS FREE TO "SHOP AROUND" AMONG THE OFFERINGS AND SELECT THAT WHICH IS ADMINISTRATIVELY CONSIDERED PREFERABLE WITHOUT REGARD TO COMPARATIVE PRICES OR THE ACTUAL NEEDS OF THE GOVERNMENT IS NOT A COMPLIANCE WITH THE REQUIREMENTS OF THE STATUTE. 1938: THERE IS BEFORE THIS OFFICE FOR AUDIT A VOUCHER EVIDENCING PAYMENT OF $2. BIDDERS WILL BE REQUIRED TO VISIT THE BUILDING AND ASCERTAIN FROM THE DRAWING AND INSPECTION OF THE FRAMES ALREADY INSTALLED WHAT IS REQUIRED. TEN BIDS AND ALTERNATE BIDS WERE RECEIVED FROM FOUR BIDDERS WHO SUBMITTED SAMPLES OF THE MATERIALS THEY PROPOSED TO FURNISH UNDER THEIR RESPECTIVE BIDS. THE BIDS AND SAMPLES WERE FORWARDED TO THE POST OFFICE DEPARTMENT WITH RECOMMENDATION BY THE POSTMASTER OF HONOLULU.

A-92127, MARCH 29, 1938, 17 COMP. GEN. 789

CONTRACTS - SPECIFICATIONS - NECESSITY OF DEFINITE REQUIREMENTS THE PROVISIONS OF SECTION 3709, REVISED STATUTES, REQUIRE THAT PURCHASES BE MADE AFTER FREE AND OPEN COMPETITION BASED UPON ADVERTISED SPECIFICATIONS WHICH SET FORTH CLEARLY AND ACCURATELY THE MINIMUM NEEDS OF THE GOVERNMENT FOR THE PURPOSES TO BE SERVED AND ADMITTING ALL BIDDERS TO COMPETITION UPON AN EQUAL FOOTING IN THE LIGHT OF SUCH DEFINITE SPECIFICATIONS, AND MERELY INVITING BIDDERS TO DISPLAY THEIR WARES, LEAVING ADMINISTRATION OFFICERS FREE TO "SHOP AROUND" AMONG THE OFFERINGS AND SELECT THAT WHICH IS ADMINISTRATIVELY CONSIDERED PREFERABLE WITHOUT REGARD TO COMPARATIVE PRICES OR THE ACTUAL NEEDS OF THE GOVERNMENT IS NOT A COMPLIANCE WITH THE REQUIREMENTS OF THE STATUTE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE POSTMASTER GENERAL, MARCH 29, 1938:

THERE IS BEFORE THIS OFFICE FOR AUDIT A VOUCHER EVIDENCING PAYMENT OF $2,875 TO BAILEY FURNITURE COMPANY, LTD., BY THE POSTMASTER AT HONOLULU, HAWAII, FOR FURNISHING AND INSTALLING DRAPES, LAMBREQUINS, TASSELS, AND CORDS ON THE FRAMES IN COURT ROOMS NOS. 1 AND 2 IN THE FEDERAL BUILDING, HONOLULU, UNDER UNNUMBERED CONTRACT CONSISTING OF A BID DATED NOVEMBER 12, 1936, AND ACCEPTANCE DATED DECEMBER 30, 1936.

THE RECORD SHOWS THAT THE INVITATION MERELY CALLED FOR BIDS FOR FURNISHING THE MATERIALS AND MAKING THE INSTALLATION AND SPECIFIED AS FOLLOWS:

DRAPES TO BE MADE OF SUNFAST BLUE VELOUR, LINED AND INTER-LINED, SILK FRINGES ON LAMBREQUINS, SILK TASSELS AND CORDS; THESE FASTENED SECURELY TO FRAMES, BRONZE ROSETTES OF SIZE AND TYPE SHOWN ON, AND TO BE PLACED AS INDICATED ON DRAWING 204-A.

BIDDERS WILL BE REQUIRED TO VISIT THE BUILDING AND ASCERTAIN FROM THE DRAWING AND INSPECTION OF THE FRAMES ALREADY INSTALLED WHAT IS REQUIRED, AND MUST FURNISH A SAMPLE OF THE MATERIAL PROPOSED TO FURNISH UNDER THIS CONTRACT.

TEN BIDS AND ALTERNATE BIDS WERE RECEIVED FROM FOUR BIDDERS WHO SUBMITTED SAMPLES OF THE MATERIALS THEY PROPOSED TO FURNISH UNDER THEIR RESPECTIVE BIDS. THE BIDS AND SAMPLES WERE FORWARDED TO THE POST OFFICE DEPARTMENT WITH RECOMMENDATION BY THE POSTMASTER OF HONOLULU, THAT TWO LOWER BIDS IN THE AMOUNTS OF $2,275 AND $2,810 BE REJECTED AND AWARD BE MADE TO BAILEY FURNITURE CO., LTD., AT THE PRICE OF $2,875, OR $600 IN EXCESS OF THE LOW BID. THE POSTMASTER WAS REQUESTED BY RADIO MESSAGE OF DECEMBER 8, 1936, TO EXPLAIN HIS RECOMMENDATION FOR REJECTION OF THE LOW BIDS, TO WHICH HE REPLIED AS FOLLOWS:

REPLY YOUR RADIO TODAY LOWEST BID SUBMITTED FOR COURTROOM DRAPES DID NOT STRICTLY SPEAKING COMPLY WITH SPECIFICATIONS ISSUED BY THIS OFFICE AS SAMPLE OF MATERIAL ACCOMPANYING IT WAS OF VERY CHEAP QUALITY AND WOULD NOT FURNISH APPROPRIATE APPEARANCE (STOP) SAMPLE OF MATERIAL FOR THIRD LOWEST BID WHICH WAS RECOMMENDED FOR ACCEPTANCE MUCH SUPERIOR TO EITHER LOWEST OR SECOND LOWEST AND DRAPES OF THIS MATERIAL AT THIS PRICE WOULD GIVE THE GOVERNMENT GREATEST VALUE FOR EXPENDITURE INVOLVED (STOP) DRAPERY SAMPLES FORWARDED TO YOU WITH MY LETTER EIGHTEENTH ULTIMO (STOP) MUST BE CONSIDERED THAT VARIOUS BIDS WERE BASED ON VARIOUS SAMPLES FURNISHED BY THE INDIVIDUAL BIDDERS AND NOT ON ONE SAMPLE OF STANDARD QUALITY FURNISHED BY GOVERNMENT WITH INVITATION TO BID ACCORDINGLY.

THE POSTMASTER AT HONOLULU WAS AUTHORIZED TO ACCEPT THE BID OF BAILEY FURNITURE CO., LTD., IN THE AMOUNT OF $2,875, IT BEING STATED ON THE AUTHORIZATION THAT "THE QUOTATION REFERRED TO IS THIRD LOWEST AND BEST RECEIVED * * *.'

IN REPLY TO OFFICE LETTER OF SEPTEMBER 16, 1937, THE FOURTH ASSISTANT POSTMASTER GENERAL REPORTED THAT HIS BUREAU DID NOT HAVE ANY SAMPLES OR SPECIFICATIONS TO FURNISH BIDDERS IN ORDER TO ACQUAINT THEM WITH THE NEEDS OF THE GOVERNMENT AND, AS SHOWN ABOVE, THE "BIDS WERE BASED ON VARIOUS SAMPLES FURNISHED BY THE INDIVIDUAL BIDDERS AND NOT ON ONE SAMPLE OF STANDARD QUALITY FURNISHED BY GOVERNMENT WITH INVITATIONS TO BID ACCORDINGLY.'

IF IT BE CONCEDED THAT THE MATERIALS OFFERED UNDER THE TWO LOWER BIDS WERE OF SUCH INFERIOR QUALITY AS TO RENDER THEM UNSUITABLE FOR THE NEEDS OF THE GOVERNMENT FOR THE PURPOSE TO BE SERVED--- WHICH HAS NOT BEEN SHOWN --- IT IS OBVIOUS THAT THE WHOLE PROCEDURE IN CONNECTION WITH THE TRANSACTION WAS IRREGULAR AND IN CONTRAVENTION OF ESTABLISHED AND RECOGNIZED PRINCIPLES APPLICABLE TO PURCHASES FOR THE GOVERNMENT. IT HAS BEEN HELD UNIFORMLY BY THE ACCOUNTING OFFICERS THAT THE PROVISIONS OF SECTION 3709, REVISED STATUTES, REQUIRE THAT PURCHASES BE MADE AFTER FREE AND OPEN COMPETITION, BASED UPON ADVERTISED SPECIFICATIONS WHICH SET FORTH CLEARLY AND ACCURATELY THE MINIMUM NEEDS OF THE GOVERNMENT FOR THE PURPOSES TO BE SERVED, AND ADMITTING ALL BIDDERS TO COMPETITION UPON AN EQUAL FOOTING IN THE LIGHT OF SUCH DEFINITE SPECIFICATIONS. WHEN GOVERNMENT NEEDS ARE SO ADVERTISED THE LOW RESPONSIBLE BID OFFERING MATERIALS, ETC., MEETING THE ADVERTISED SPECIFICATIONS IS FOR ACCEPTANCE. MERELY INVITING BIDDERS TO DISPLAY THEIR WARES, AS WAS VIRTUALLY DONE IN THIS CASE, LEAVING ADMINISTRATIVE OFFICERS FREE TO "SHOP AROUND" AMONG THE OFFERINGS AND SELECT THAT WHICH IS ADMINISTRATIVELY CONSIDERED AS PREFERABLE, WITHOUT REGARD TO COMPARATIVE PRICES OR THE ACTUAL NEEDS OF THE GOVERNMENT IS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF THE STATUTE. THE SOLE PURPOSE FOR REQUIRING SUBMISSION OF SAMPLES IN ANY INSTANCE IS TO AFFORD THE PURCHASING OFFICERS AN OPPORTUNITY TO DETERMINE WHETHER WHAT IS PROPOSED TO BE FURNISHED COMPLIES WITH THE SPECIFICATIONS AS ADVERTISED. 17 COMP. GEN. 409. DECISIONS OF THE COURTS ARE TO THE SAME EFFECT. HANNAN V. BOARD OF EDUCATION, 30 LRANS 214, AND DECISIONS THERE CITED; SCOTT V. UNITED STATES, 44 CT.CLS. 524; O BRIEN V. CARNEY, 6 FED.SUPP. 761-2.

MANIFESTLY, THE PROCEDURE HERE FOLLOWED WAS NOT IN CONFORMITY WITH THE REQUIREMENTS OF THE STATUTE, THE ESTABLISHED AND RECOGNIZED RULE, OR THE DECISIONS OF THE COURTS.

UNDER ALL THE CIRCUMSTANCES, THIS OFFICE WILL NOT NOW FURTHER QUESTION THIS TRANSACTION BUT CONSIDERATION WILL BE GIVEN TO REPORTING THE TRANSACTION TO THE CONGRESS AS IN VIOLATION OF LAW, PURSUANT TO SECTION 312 (C), ACT OF 1921, 42 STAT. 26.