B-124386, JUL. 8, 1955

B-124386: Jul 8, 1955

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MARITIME ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF JUNE 14. ENUMERATING SIX TRANSACTIONS CONTEMPLATED IN CONNECTION WITH THE PROPOSED SALE OF TWO MARINER VESSELS TO THE OCEANIC STEAMSHIP COMPANY AND REQUESTING ADVICE AS TO WHETHER WE AGREE THAT IT IS UNNECESSARY FOR THE MARITIME ADMINISTRATION TO FOLLOW THE PROCEDURE OF COMPETITIVE BIDDING IN THE SALE OF THE TWO VESSELS. 26 ARE STILL AVAILABLE FOR SALE AND THAT. IT IS CLEAR THAT THE GOVERNMENT COULD NOT ANTICIPATE A BID FOR THEIR PURCHASE IN EXCESS OF THE MINIMUM PRICE DETERMINED UNDER SECTION 705. THE ONLY BID RECEIVED WAS THAT OF THE COMPANY WHOSE INTEREST IN THE VESSELS PROMPTED THEIR BEING OFFERED FOR SALE AND WAS AT THE PRESCRIBED MINIMUM PRICES.

B-124386, JUL. 8, 1955

TO THE ADMINISTRATOR, MARITIME ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 14, 1955, ENUMERATING SIX TRANSACTIONS CONTEMPLATED IN CONNECTION WITH THE PROPOSED SALE OF TWO MARINER VESSELS TO THE OCEANIC STEAMSHIP COMPANY AND REQUESTING ADVICE AS TO WHETHER WE AGREE THAT IT IS UNNECESSARY FOR THE MARITIME ADMINISTRATION TO FOLLOW THE PROCEDURE OF COMPETITIVE BIDDING IN THE SALE OF THE TWO VESSELS.

IN OUR DECISION OF DECEMBER 2, 1954, B-118991, 34 COMP. GEN. 271, WE CONCURRED IN YOUR PLAN TO ESTABLISH, PURSUANT TO SECTION 705 OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1195, UNIFORM MINIMUM SALES PRICES FOR ALL MARINER VESSELS, BASED UPON A WEIGHTED AVERAGE OF THEIR ESTIMATED FOREIGN CONSTRUCTION COSTS OVER THE PERIOD COVERED BY THE CONSTRUCTION CONTRACTS.

YOU REPORT THAT OF THE 35 MARINERS ORIGINALLY CONSTRUCTED, 26 ARE STILL AVAILABLE FOR SALE AND THAT, WITH NO KNOWN OR INDICATED DEMAND FOR THE PURCHASE OF THESE VESSELS AT THE PRESENT TIME, IT IS CLEAR THAT THE GOVERNMENT COULD NOT ANTICIPATE A BID FOR THEIR PURCHASE IN EXCESS OF THE MINIMUM PRICE DETERMINED UNDER SECTION 705. FURTHER, YOU CITE THE RECENT OFFER BY MARITIME ADMINISTRATION OF FOUR MARINERS FOR SALE BY COMPETITIVE BIDDING. THE ONLY BID RECEIVED WAS THAT OF THE COMPANY WHOSE INTEREST IN THE VESSELS PROMPTED THEIR BEING OFFERED FOR SALE AND WAS AT THE PRESCRIBED MINIMUM PRICES.

IT CONSISTENTLY HAS BEEN HELD THAT ADVERTISING FOR COMPETITIVE BIDS IS NOT REQUIRED WHERE IT WILL ACCOMPLISH NO USEFUL PURPOSE. 28 COMP. GEN. 470.

IN VIEW OF THE REPORTED SITUATION NOW PREVAILING WITH REGARD TO THE SUPPLY OF AND DEMAND FOR THE MARINERS, AND INASMUCH AS UNIFORM MINIMUM PRICES HAVE BEEN ESTABLISHED FOR THE VESSELS, WE AGREE THAT AN INVITATION AT THIS TIME FOR COMPETITIVE BIDDING ON THE TWO MARINERS WOULD SERVE NO USEFUL PURPOSE. ACCORDINGLY, WE WILL INTERPOSE NO OBJECTION TO THE PROPOSED NEGOTIATION OF THE SALE OF THE TWO MARINERS TO THE OCEANIC STEAMSHIP COMPANY.

HOWEVER, SINCE THE FACTUAL SITUATION IN EACH CASE NECESSARILY DETERMINES THE NEED FOR COMPLYING WITH THE COMPETITIVE BIDDING REQUIREMENTS, WE MUST RESTRICT OUR APPROVAL OF THE NEGOTIATED SALE TO THE INSTANT CASE.