B-141229, DEC. 16, 1959

B-141229: Dec 16, 1959

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OUR DECISION IS REQUESTED AS TO WHETHER THE DISTRICT MAY PROPERLY ACCEPT THE OFFER MADE BY THE FORD MOTOR COMPANY. WHICH WAS SPECIFICALLY MADE APPLICABLE TO THE DISTRICT OF COLUMBIA BY SECTION 18 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946. WHILE THE CASH CONSIDERATION FOR THE PROPOSED ARRANGEMENT IS ONLY $2. THE VALUE OF THE SURRENDERED CARS IS A PART OF THE TOTAL CONSIDERATION FOR THE AGREEMENT AND MUST BE CONSIDERED A PART OF "THE AMOUNT INVOLVED" WITHIN THE MEANING OF 41 U.S.C. 5. IT IS APPARENT THAT THE VALUE OF THE SURRENDERED CARS ALONE WOULD BE FAR IN EXCESS OF THE $2. ATTENTION IS INVITED TO 28 COMP.

B-141229, DEC. 16, 1959

TO THE HONORABLE ROBERT E. MCLAUGHLIN:

BY LETTER OF NOVEMBER 1O, 1959, HONORABLE DAVID B. KARRICK, AS ACTING PRESIDENT, BOARD OF COMMISSIONERS, REQUESTED OUR DECISION AS TO WHETHER THE DISTRICT OF COLUMBIA MAY ENTER INTO AN AGREEMENT WITH THE FORD MOTOR COMPANY REGARDING THE ACQUISITION BY THE DISTRICT OF COLUMBIA OF LINCOLN AUTOMOBILES.

THE LETTER STATES THAT THREE LINCOLNS, PURCHASED UNDER AUTHORITY CONTAINED IN THE 1959 DISTRICT OF COLUMBIA APPROPRIATION ACT, REQUIRED EXCESSIVE REPAIRS, AND AS A CONSEQUENCE, THE DISTRICT OF COLUMBIA PROCUREMENT OFFICER APPROACHED THE FORD MOTOR COMPANY TO SEEK A REMEDY. THE FORD MOTOR COMPANY PROPOSED AN ARRANGEMENT WHEREBY IT WOULD PROVIDE THE DISTRICT OF COLUMBIA WITH THREE NEW FULLY EQUIPPED LINCOLNS EACH YEAR AT A NET COST OF $750 PER CAR, PLUS THE EXCHANGE OF CARS FURNISHED THE PREVIOUS YEAR, STARTING WITH THE RETURN OF THE THREE LINCOLNS PRESENTLY OWNED BY THE DISTRICT. EACH NEW CAR DELIVERED EACH YEAR WOULD RECEIVE SPECIAL INSPECTION AT THE ASSEMBLY PLANT AND AT THE DELIVERY DESTINATION IN WASHINGTON, D.C., BY COMPETENT TECHNICAL PERSONNEL OF THE COMPANY, AND WOULD BE PROVIDED WITH A 90-DAY GUARANTEE. THE DISTRICT WOULD OBTAIN TITLES TO THE NEW CARS DELIVERED EACH YEAR AND SURRENDER TO THE COMPANY THE TITLES TO THE CARS FURNISHED THE PRIOR YEAR. OUR DECISION IS REQUESTED AS TO WHETHER THE DISTRICT MAY PROPERLY ACCEPT THE OFFER MADE BY THE FORD MOTOR COMPANY.

THE PROPOSED AGREEMENT AROSE FROM DISCUSSIONS AND NEGOTIATIONS BETWEEN THE COMPANY AND THE DISTRICT IN CONNECTION WITH THE EXCESSIVE REPAIRS ON THE LINCOLNS PRESENTLY OWNED BY THE DISTRICT OF COLUMBIA, AND THERE HAS BEEN NO ADVERTISING FOR SUCH AN AGREEMENT. SECTION 3709, REVISED STATUTES, AS AMENDED, 41 U.S.C. 5, WHICH WAS SPECIFICALLY MADE APPLICABLE TO THE DISTRICT OF COLUMBIA BY SECTION 18 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, 60 STAT. 811, 5 U.S.C. 73B-4, PROVIDES THAT, UNLESS OTHERWISE PROVIDED IN THE APPROPRIATION CONCERNED OR OTHER LAW, PURCHASES OR CONTRACTS FOR SUPPLIES OR SERVICES MAY BE MADE OR ENTERED INTO ONLY AFTER ADVERTISING FOR PROPOSALS, EXCEPT WHERE THE AMOUNT INVOLVED IN ANY ONE CASE DOES NOT EXCEED $2,500 AND OTHER EXCEPTIONS NOT HERE PERTINENT. WHILE THE CASH CONSIDERATION FOR THE PROPOSED ARRANGEMENT IS ONLY $2,250 PER YEAR, THE AGREEMENT ALSO REQUIRES THE SURRENDER TO THE COMPANY ANNUALLY OF THREE LINCOLNS APPROXIMATELY ONE YEAR OLD. OBVIOUSLY, THE VALUE OF THE SURRENDERED CARS IS A PART OF THE TOTAL CONSIDERATION FOR THE AGREEMENT AND MUST BE CONSIDERED A PART OF "THE AMOUNT INVOLVED" WITHIN THE MEANING OF 41 U.S.C. 5. IT IS APPARENT THAT THE VALUE OF THE SURRENDERED CARS ALONE WOULD BE FAR IN EXCESS OF THE $2,500 LIMITATION FOR NEGOTIATING CONTRACTS AND, HENCE, THE DISTRICT OF COLUMBIA HAS NO AUTHORITY UNDER 41 U.S.C. 5 TO ENTER INTO AN AGREEMENT SUCH AS THAT PROPOSED WITHOUT ADVERTISING FOR BIDS. SINCE NO AUTHORITY TO NEGOTIATE THIS AGREEMENT HAS BEEN FOUND IN THE APPROPRIATION CONCERNED OR OTHER LAW, THE DISTRICT OF COLUMBIA CANNOT ACCEPT THE OFFER MADE BY THE FORD MOTOR COMPANY WITHOUT ADVERTISING FOR BIDS.

MOREOVER, THE PROPOSED AGREEMENT PURPORTS TO REQUIRE THE DISTRICT OF COLUMBIA TO PURCHASE THREE NEW LINCOLNS EACH YEAR APPARENTLY FOR AN INDEFINITE PERIOD OF YEARS. SECTION 16 (A) OF THE ADMINISTRATIVE EXPENSES ACT, 1946, 60 STAT. 810, 5 U.S.C. 78 (A), SPECIFICALLY MADE APPLICABLE TO THE DISTRICT OF COLUMBIA BY SECTION 18 OF THAT ACT, SUPRA, PROHIBITS THE PURCHASE OF AUTOMOBILES UNLESS SPECIFICALLY AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. ALSO SECTIONS 3732 AND 3679, REVISED STATUTES, AS AMENDED, 41 U.S.C. 11 AND 31 U.S.C. 665, RESPECTIVELY, AS WELL AS SECTION 1-808 OF THE DISTRICT OF COLUMBIA CODE, 1951 EDITION, PROHIBIT INVOLVEMENT IN CONTRACTS OR OBLIGATIONS BEYOND THE EXTENT AND AVAILABILITY OF EXISTING APPROPRIATIONS UNLESS OTHERWISE AUTHORIZED BY LAW. THERE HAS BEEN FOUND NO PROVISION OF LAW SPECIFICALLY AUTHORIZING CONTRACTS OF THIS CHARACTER. WHILE SUCH A CONTRACT, IF PROPERLY ADVERTISED, COULD BE MADE ON AN ANNUAL BASIS WITH A PROVISION FOR AN AFFIRMATIVE RENEWAL EACH YEAR CONTINGENT UPON THE AVAILABILITY OF APPROPRIATIONS AND AUTHORITY TO PURCHASE AUTOMOBILES OF THIS NATURE, THE ACCEPTANCE THEREOF ON SUCH A BASIS BY THE FORD MOTOR COMPANY OR ANOTHER WOULD OF COURSE BE STRICTLY WITHIN ITS DISCRETION. SEE B-88974, NOVEMBER 10, 1949; 28 COMP. GEN. 553. ATTENTION IS INVITED TO 28 COMP. GEN. 495 AND DECISIONS CITED THEREIN WITH RESPECT TO THE DISCRETION ALLOWED IN PURCHASING AUTOMOBILES FOR USE BY THE HEAD OF AN OFFICE AND THE NECESSITY OF OBTAINING CASH BIDS AS WELL AS TRADE-IN ALLOWANCES ON AUTOMOBILES BEING DISPOSED OF IN CONNECTION WITH THE PROCUREMENT OF NEW AUTOMOBILES.

ANY CONTRACT OR AGREEMENT FOR THE DISPOSITION OF THE LINCOLNS NOW OWNED BY THE DISTRICT OF COLUMBIA AND THEIR REPLACEMENT BY NEW VEHICLES MUST CONFORM TO THE REQUIREMENTS SET OUT ABOVE.