B-128289, JUL. 19, 1956

B-128289: Jul 19, 1956

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO LETTER DATED JUNE 11. THE INFORMATION SUBMITTED IN YOUR LETTER AND ITS ENCLOSURES SHOWS THAT IN JULY 1955 AN INVESTIGATION WAS INITIATED OF ALLEGED IRREGULARITIES OF MR. IT APPEARS FROM THE REPORT OF THIS INVESTIGATION THAT WHILE HE WAS STILL EMPLOYED AS A RANGE MANAGER AND REGARDED AS THE GOVERNMENT REPRESENTATIVE FOR CONTRACT PURPOSES. RUDDER WAS AN UNDISCLOSED PRINCIPAL UNDER A CONTRACT FOR CONSTRUCTION OF A DIKE PIT AND OIL WELL DAM IN HIS DISTRICT AWARDED TO HIS BROTHER-IN LAW. THAT AT A TIME WHEN THE CONTRACT WORK WAS ONLY PARTIALLY PERFORMED RUDDER TENDERED HIS RESIGNATION AS A RANGE MANAGER WHICH WAS ADMINISTRATIVELY ACCEPTED.

B-128289, JUL. 19, 1956

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER DATED JUNE 11, 1956, FROM YOUR DEPARTMENT, REQUESTING ADVICE AS TO WHETHER MR. HENRY RUDDER, JR., NOW DOING BUSINESS AS THE LOS CERRITOS CATTLE AND CONSTRUCTION COMPANY, MAY BE DEBARRED AS A BIDDER FOR CONTRACTS WITH YOUR DEPARTMENT FOR A PERIOD OF THREE YEARS.

THE INFORMATION SUBMITTED IN YOUR LETTER AND ITS ENCLOSURES SHOWS THAT IN JULY 1955 AN INVESTIGATION WAS INITIATED OF ALLEGED IRREGULARITIES OF MR. RUDDER WHILE EMPLOYED BY THE BUREAU AS A RANGE MANAGER AT FARMINGTON, NEW MEXICO. IT APPEARS FROM THE REPORT OF THIS INVESTIGATION THAT WHILE HE WAS STILL EMPLOYED AS A RANGE MANAGER AND REGARDED AS THE GOVERNMENT REPRESENTATIVE FOR CONTRACT PURPOSES, RUDDER WAS AN UNDISCLOSED PRINCIPAL UNDER A CONTRACT FOR CONSTRUCTION OF A DIKE PIT AND OIL WELL DAM IN HIS DISTRICT AWARDED TO HIS BROTHER-IN LAW; THAT AT A TIME WHEN THE CONTRACT WORK WAS ONLY PARTIALLY PERFORMED RUDDER TENDERED HIS RESIGNATION AS A RANGE MANAGER WHICH WAS ADMINISTRATIVELY ACCEPTED, WHEREUPON RUDDER ASSUMED ACTIVE CHARGE OF THE CONTRACT WORK. IT APPEARS FURTHER THAT FOLLOWING COMPLETION OF THIS CONTRACT IN A MANNER ACCEPTABLE TO THE BUREAU THE TOTAL CONTRACT PROCEEDS OF APPROXIMATELY $5,000 MADE PAYABLE TO HIS BROTHER-IN-LAW BY CHECK DATED AUGUST 23, 1955, WERE ULTIMATELY RECEIVED BY RUDDER.

IT IS STATED IN YOUR LETTER THAT YOUR DEPARTMENT REGARDS RUDDER'S BEHAVIOR, PARTICULARLY AS TO HIS CONTRACT ACTIVITIES WHILE IN AN EMPLOYEE STATUS, AS UNETHICAL, AND THAT THE INVESTIGATIVE FINDINGS WERE REFERRED TO THE DEPARTMENT OF JUSTICE FOR CONSIDERATION AS TO POSSIBLE CRIMINAL VIOLATION. THE DEPARTMENT OF JUSTICE HAS SINCE ADVISED THAT THE CRIMINAL FILE HAS BEEN CLOSED WITHOUT ACTION.

IT IS ALSO STATED IN YOUR LETTER THAT, SUBSEQUENT TO THE COMPLETION OF THE DIKE AND DAM CONTRACT, RUDDER QUALIFIED AS THE LOW BIDDER ON ANOTHER BUREAU OF LAND MANAGEMENT CONSTRUCTION PROJECT AT A CONTRACT PRICE OF $26,896.30, AND THAT THIS CONTRACT WAS AWARDED TO HIM, TRADING AS THE LOS CERRITOS CATTLE AND CONSTRUCTION COMPANY, ON SEPTEMBER 21, 1955. IT IS STATED FURTHER IN YOUR LETTER THAT RUDDER ALSO SUBMITTED A LOW BID OF $86,025.18 ON AN ADDITIONAL BUREAU CONSTRUCTION PROJECT AND THAT A CONTRACT FOR THIS PROJECT WAS ENTERED INTO ON OCTOBER 12, 1955, AND THE WORK IS IN PROGRESS.

DEBARMENT OF BIDDERS UNDER CIRCUMSTANCES AND CONDITIONS BELIEVED TO BE NECESSARY TO THE ADMINISTRATION OF GOOD GOVERNMENT HAS LONG BEEN THE SUBJECT OF CONCERN AND CONSIDERATION BY THE CONGRESS AND BY ADMINISTRATIVE AND ACCOUNTING OFFICERS. CF. 7 COMP. GEN. 547; 9 ID. 23; 14 ID. 313; 15 ID. 149; 17 ID. 877; 33 ID. 63. GENERAL REGULATION 15 ISSUED JUNE 17, 1954, BY THE GENERAL SERVICES ADMINISTRATION DETAILS THE STATUTES WHICH HAVE PROVIDED FOR DEBARMENT ACTION AND SETS OUT CERTAIN CAUSES AND CONDITIONS APPLICABLE TO DEBARMENT DETERMINATIONS BY EXECUTIVE AGENCIES. POLICIES AND PROCEDURES RELATING TO THE DEBARMENT OF BIDDERS ALSO ARE PRESCRIBED IN THIS REGULATION, AND PROVISION IS MADE FOR THE ESTABLISHMENT BY EXECUTIVE AGENCIES OF APPROPRIATE INTERNAL PROCEDURES AND METHODS FOR APPLICATION TO DEBARMENT DETERMINATIONS. IT IS UNDERSTOOD, HOWEVER, THAT THIS REGULATION HAS NOT BEEN IMPLEMENTED BY EITHER THE BUREAU OF LAND MANAGEMENT OR YOUR DEPARTMENT.

FROM A CAREFUL REVIEW AND CONSIDERATION OF THE FACTS AND CIRCUMSTANCES SUBMITTED WITH YOUR LETTER IT IS SEEN THAT THE SUGGESTED ACTION IS NOT BASED ON ANY OF THE CAUSES AND CONDITIONS SPECIFIED IN GENERAL REGULATION 15, AND WE ARE OF THE VIEW THAT IT IS NOT JUSTIFIED BY THE PRESENT RECORD. CERTAIN BEHAVIOR OF RUDDER WHILE A BUREAU EMPLOYEE HAS BEEN ADMINISTRATIVELY DETERMINED UNETHICAL AND POSSIBLY IN VIOLATION OF PROVISIONS OF THE CRIMINAL CODE. FOR UNETHICAL CONDUCT RUDDER WAS SUBJECT, AS AN EMPLOYEE, TO DISCIPLINARY ACTION. UPON ACCEPTANCE OF RUDDER'S RESIGNATION, HOWEVER, THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE WITH ITS ATTENDANT RESPONSIBILITIES NECESSARILY TERMINATED. THE DIKE AND DAM CONTRACT WAS SATISFACTORILY COMPLETED AND NO ACTION WAS TAKEN ON THE POSSIBLE CRIMINAL VIOLATIONS REPORTED TO THE DEPARTMENT OF JUSTICE. THE BUREAU HAS AWARDED TWO ADDITIONAL CONTRACTS TO RUDDER DOING BUSINESS AS THE LOS CERRITOS CATTLE AND CONSTRUCTION COMPANY AND THE RELATIONS UNDER THESE CONTRACTS APPARENTLY HAVE BEEN SATISFACTORY. IT WOULD SEEM REASONABLE TO CONCLUDE, THEREFORE, THAT THE COMPANY IS RESPONSIBLE AND ABLE TO SUCCESSFULLY PERFORM ITS CONTRACTS. CF. 26 COMP. GEN. 676, 30 ID. 235.