B-130545, MAY 9, 1957

B-130545: May 9, 1957

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TO THE SECRETARY OF DEFENSE: WE ARE ADVISED THAT COPIES OF OUR LETTER DATED APRIL 2. OTHER COMPANIES WITH WHICH ROBERT TRIPP ROSE WAS ASSOCIATED AT ONE TIME OR ANOTHER. HAVE BEEN SENT TO YOU AND TO THE SECRETARIES OF THE ARMY. THE ANSWERS GIVEN TO SOME OF THE QUESTIONS PRESENTED BY THE SUBCOMMITTEE DURING THE HEARINGS INDICATE THAT CONSIDERATION WILL BE GIVEN TO CORRECTION IN THE MILITARY ESTABLISHMENTS OF CERTAIN UNDESIRABLE CONTRACTUAL PRACTICES POINTED UP BY THE INVESTIGATION OF THIS MATTER. WE ARE PARTICULARLY CONCERNED AT THIS TIME. IT IS UNDERSTOOD THAT THIS CONTRACT WAS AWARDED UNDER AN INVITATION FOR BIDS ISSUED BY THE ARMY QUARTERMASTER DEPOT. THE FIRST OF WHICH WAS UNFAVORABLE AND THE SECOND OF WHICH INDICATED THAT THE BIDDER PROBABLY COULD NOT MEET THE ADVERTISED DELIVERY SCHEDULE.

B-130545, MAY 9, 1957

TO THE SECRETARY OF DEFENSE:

WE ARE ADVISED THAT COPIES OF OUR LETTER DATED APRIL 2, 1957, TO THE CHAIRMAN OF THE MILITARY OPERATIONS SUBCOMMITTEE, COMMITTEE ON GOVERNMENT OPERATIONS, HOUSE OF REPRESENTATIVES, CONCERNING CERTAIN QUESTIONS WHICH HAD ARISEN IN CONNECTION WITH THE SUBCOMMITTEE'S INQUIRY INTO VARIOUS MILITARY PROCUREMENT MATTERS RELATING TO WYNN ENTERPRISES, INC., AND OTHER COMPANIES WITH WHICH ROBERT TRIPP ROSE WAS ASSOCIATED AT ONE TIME OR ANOTHER, HAVE BEEN SENT TO YOU AND TO THE SECRETARIES OF THE ARMY, NAVY AND AIR FORCE. THE CHAIRMAN OF THE SUBCOMMITTEE HAS ALSO INDICATED THAT ANY ACTION WHICH WE MIGHT TAKE IN REGARD TO THE CONTRACTS AWARDED TO THE WYNN COMPANIES SHOULD BE PROCEEDED WITH, WITHOUT AWAITING FURTHER ACTION OR REPORT BY THE SUBCOMMITTEE.

THE ANSWERS GIVEN TO SOME OF THE QUESTIONS PRESENTED BY THE SUBCOMMITTEE DURING THE HEARINGS INDICATE THAT CONSIDERATION WILL BE GIVEN TO CORRECTION IN THE MILITARY ESTABLISHMENTS OF CERTAIN UNDESIRABLE CONTRACTUAL PRACTICES POINTED UP BY THE INVESTIGATION OF THIS MATTER, AND WE SHALL APPRECIATE A REPORT AS TO ANY SUCH ACTION.

WE ARE PARTICULARLY CONCERNED AT THIS TIME, HOWEVER, WITH THE QUESTION OF THE VALIDITY OF THE AWARD OF A CURRENT DEPARTMENT OF THE ARMY CONTRACT TO WYNN ENTERPRISES, INC., CONTRACT NO. DA-36-030-QM 8923, DATED NOVEMBER 13, 1956.

IT IS UNDERSTOOD THAT THIS CONTRACT WAS AWARDED UNDER AN INVITATION FOR BIDS ISSUED BY THE ARMY QUARTERMASTER DEPOT, PHILADELPHIA, PENNSYLVANIA, AFTER TWO PRE-AWARD SURVEYS, THE FIRST OF WHICH WAS UNFAVORABLE AND THE SECOND OF WHICH INDICATED THAT THE BIDDER PROBABLY COULD NOT MEET THE ADVERTISED DELIVERY SCHEDULE. IT FURTHER APPEARS THAT THE DELIVERY REQUIREMENTS OF THE CONTRACT WERE NOT IN ACCORDANCE WITH THE TERMS OF THE INVITATION, AND THAT AT THE TIME OF THE AWARD TWO-THIRDS OF THE STOCK IN THE CONTRACTING CORPORATION WAS OWNED BY MRS. ROBERT TRIPP ROSS, WIFE OF AN ASSISTANT SECRETARY OF DEFENSE. IN THIS CONNECTION, IT APPEARS THAT, FOR ALL PRACTICAL PURPOSES, THE AWARD WAS MADE TO THE WIFE OF A GOVERNMENT OFFICIAL OCCUPYING A MAJOR ADMINISTRATIVE OR POLICY MAKING POSITION. THE OPINION WAS EXPRESSED IN OUR ANSWER TO THE SIXTH QUESTION PRESENTED BY THE CHAIRMAN OF THE HOUSE SUBCOMMITTEE THAT SUCH A CONTRACT WOULD BE REPUGNANT TO PUBLIC POLICY. AS STATED IN THAT ANSWER, THE OFFICIAL'S POSITION WOULD IN ITSELF TEND TO CREATE A BASIS FOR AN INFERENCE OR APPEARANCE OF FAVORITISM IN THE MAKING OF THE AWARD OR THE CONTRACT. THE QUESTION OF FAVORITISM WOULD SEEM TO BE PARTICULARLY INVOLVED IN ANY CASE WHERE, AS HERE, THE FIRST PRE-AWARD SURVEY OF THE BIDDER'S FACILITIES IS NEGATIVE, AND A SECOND SURVEY REPORT RECOMMENDS AN AWARD SUBJECT TO CERTAIN CONDITIONS FAVORABLE TO THAT BIDDER.

IN THE CIRCUMSTANCES, IT IS REQUESTED THAT WE BE ADVISED AT THE EARLIEST PRACTICABLE DATE AS TO WHAT ACTION HAS BEEN TAKEN OR IS PROPOSED TO BE TAKEN IN THESE MATTERS. WE SHOULD ALSO APPRECIATE AN EXPRESSION OF THE VIEWS OF YOUR DEPARTMENT AS TO THE VALIDITY OF THE AWARD IN QUESTION AND AS TO THE STATUS OF AND EXTENT OF PERFORMANCE UNDER THE CONTRACT.