B-21437, NOVEMBER 24, 1941, 21 COMP. GEN. 482

B-21437: Nov 24, 1941

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

EVEN THOUGH THE PRICES IN CERTAIN INSTANCES ARE IN EXCESS OF THOSE CHARGED BY COMMERCIAL FIRMS. 1941: THERE IS ENCLOSED HEREWITH A COPY OF A LETTER FROM THE CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS DATED OCTOBER 7. YOUR DECISION IS REQUESTED ON THE QUESTION PRESENTED AS TO WHETHER PURCHASES OF ARTICLES OTHER THAN THOSE CHARGEABLE TO ANNUAL APPROPRIATIONS FOR UPKEEP AND MAINTENANCE OF THE NAVY ARE TO BE CONSIDERED MANDATORY UNDER THE ACT OF JUNE 25. WHISK BROOMS ARE ARTICLES WHICH MAY BE PROCURED FOR EITHER OF TWO PURPOSES. THE PURCHASES DO NOT COME UNDER THE STATUTE CITED BUT MAY BE MADE IN OPEN MARKET WHEN SUCH PROCEDURE WILL RESULT IN MINIMIZING THE RESULTANT CHARGES TO PERSONAL FUNDS OF ENLISTED MEN.

B-21437, NOVEMBER 24, 1941, 21 COMP. GEN. 482

BLIND-MADE PRODUCTS - GOVERNMENT AGENCY PURCHASE REQUIREMENTS THE REQUIREMENTS OF SECTION 3 OF THE ACT OF JUNE 25, 1938, THAT, UNDER SPECIFIED CONDITIONS, BROOMS, MOPS, AND OTHER SUITABLE COMMODITIES PROCURED BY OR FOR ANY FEDERAL DEPARTMENT OR AGENCY BE PROCURED FROM NON- PROFIT-MAKING AGENCIES FOR THE BLIND, MUST BE OBSERVED BY THE NAVY DEPARTMENT IN PROCURING FOR RESALE TO NAVY ENLISTED MEN COMMODITIES OF THE KIND DESCRIBED IN SAID ACT, EVEN THOUGH THE PRICES IN CERTAIN INSTANCES ARE IN EXCESS OF THOSE CHARGED BY COMMERCIAL FIRMS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, NOVEMBER 24, 1941:

THERE IS ENCLOSED HEREWITH A COPY OF A LETTER FROM THE CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS DATED OCTOBER 7, 1941, RELATIVE TO PROCUREMENT OF ARTICLES INCLUDED IN THE SCHEDULE OF BLIND-MADE PRODUCTS.

YOUR DECISION IS REQUESTED ON THE QUESTION PRESENTED AS TO WHETHER PURCHASES OF ARTICLES OTHER THAN THOSE CHARGEABLE TO ANNUAL APPROPRIATIONS FOR UPKEEP AND MAINTENANCE OF THE NAVY ARE TO BE CONSIDERED MANDATORY UNDER THE ACT OF JUNE 25, 1938, 52 STAT. 1196 ( U.S.C. TITLE 41, SEC. 46- 48).

WHISK BROOMS ARE ARTICLES WHICH MAY BE PROCURED FOR EITHER OF TWO PURPOSES, I.E., AS "BROOMS, MOPS, AND OTHER SUITABLE COMMODITIES" CHARGED TO ANNUAL APPROPRIATIONS FOR UPKEEP AND MAINTENANCE OF THE NAVY, OR FOR PERSONAL ACCOUTREMENT PURPOSES PURCHASED THROUGH A FUND LARGELY SELF- SUPPORTING BUT ACQUIRED FOR RESALE TO INDIVIDUALS.

IT WOULD APPEAR THAT IN THIS LATTER CATEGORY, I.E., WHEN PURCHASED FOR RESALE, THE PURCHASES DO NOT COME UNDER THE STATUTE CITED BUT MAY BE MADE IN OPEN MARKET WHEN SUCH PROCEDURE WILL RESULT IN MINIMIZING THE RESULTANT CHARGES TO PERSONAL FUNDS OF ENLISTED MEN.

THE LETTER OF OCTOBER 7, 1941, FROM THE CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS, IS, IN PERTINENT PART, AS FOLLOWS:

2. THE SCHEDULE OF BLIND-MADE PRODUCTS SETTING FORTH ARTICLES FOR WHICH PROCUREMENT FROM INDUSTRIES FOR THE BLIND IS MANDATORY UNDER THE REFERENCE, INCLUDES WHISK BROOMS. THIS ITEM IS OBTAINED LARGELY BY THE NAVY BY PURCHASE THROUGH THE CLOTHING AND SMALL STORES FUND, AND CARRIED IN THE CLOTHING AND SMALL STORES ACCOUNT FOR SALE TO NAVAL PERSONNEL. EXCEPT FOR EXPENDITURES ON ACCOUNT OF GRATUITOUS ISSUES AS INITIAL OUTFITS TO RECRUITS, THE CLOTHING AND SMALL STORES FUND IS REQUIRED TO BE SELF- SUPPORTING, AND THE COST OF STOCK FOR SALE TO INDIVIDUALS MUST BE FULLY COVERED BY THE SELLING PRICE.

3. THIS BUREAU, THEREFORE, CONSIDERS IT IMPERATIVE THAT EVERY EFFORT BE MADE TO OBTAIN ARTICLES OF CLOTHING AND SMALL STORES TO ESTABLISHED SPECIFICATIONS AT THE LOWEST POSSIBLE COST IN ORDER TO MINIMIZE RESULTANT CHARGES TO PERSONAL FUNDS OF ENLISTED MEN. WITH THIS IN VIEW, DECISION IS REQUESTED AS TO WHETHER OR NOT, IN THE LIGHT OF THE SUBJECT ACT, THIS BUREAU MAY CONSIDER THE REGULATIONS AND SCHEDULE OF BLIND-MADE PRODUCTS BASED THEREON NONMANDATORY WITH RESPECT TO PURCHASE OF ARTICLES REQUIRED FOR RESALE TO INDIVIDUALS, AS DISTINGUISHED FROM ARTICLES REQUIRED FOR MAINTENANCE AND UPKEEP OF THE NAVY WHICH ARE CHARGEABLE TO ANNUAL APPROPRIATIONS.

4. IN PRACTICE, THIS BUREAU WOULD DESIRE TO PURCHASE ANY SUCH ARTICLE IN THE OPEN MARKET, WHEN IT IS DETERMINED THAT A LOWER PRICE MAY BE OBTAINED BY THIS METHOD, BUT TO ORDER FROM THE INDUSTRIES FOR THE BLIND WHEN OPEN- MARKET PURCHASE OFFERS NO ADVANTAGE AS TO PRICE.

THE ACT OF JUNE 25, 1938, 52 STAT. 1196, PROVIDES---

THAT THERE IS HEREBY CREATED A COMMITTEE TO BE KNOWN AS THE COMMITTEE ON PURCHASES OF BLIND-MADE PRODUCTS (HEREINAFTER REFERRED TO AS THE " COMMITTEE") TO BE COMPOSED OF A PRIVATE CITIZEN CONVERSANT WITH THE PROBLEMS INCIDENT TO THE EMPLOYMENT OF THE BLIND AND A REPRESENTATIVE OF EACH OF THE FOLLOWING GOVERNMENT DEPARTMENTS: THE NAVY DEPARTMENT, THE WAR DEPARTMENT, THE TREASURY DEPARTMENT, THE DEPARTMENT OF AGRICULTURE, THE DEPARTMENT OF COMMERCE, AND THE DEPARTMENT OF THE INTERIOR. THE MEMBERS OF THE COMMITTEE SHALL BE APPOINTED BY THE PRESIDENT, SHALL SERVE WITHOUT ADDITIONAL COMPENSATION, AND SHALL DESIGNATE ONE OF THEIR NUMBER TO BE CHAIRMAN.

SEC. 2. IT SHALL BE THE DUTY OF THE COMMITTEE TO DETERMINE THE FAIR MARKET PRICE OF ALL BROOMS AND MOPS AND OTHER SUITABLE COMMODITIES MANUFACTURED BY THE BLIND AND OFFERED FOR SALE TO THE FEDERAL GOVERNMENT BY ANY NON-PROFIT-MAKING AGENCY FOR THE BLIND ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR OF ANY STATE, TO REVISE SUCH PRICES FROM TIME TO TIME IN ACCORDANCE WITH CHANGING MARKET CONDITIONS, AND TO MAKE SUCH RULES AND REGULATIONS REGARDING SPECIFICATIONS, TIME OF DELIVERY, AUTHORIZATION OF A CENTRAL NON-PROFIT MAKING AGENCY TO FACILITATE THE DISTRIBUTION OF ORDERS AMONG THE AGENCIES FOR THE BLIND, AND OTHER RELEVANT MATTERS OF PROCEDURE AS SHALL BE NECESSARY TO CARRY OUT THE PURPOSES OF THIS ACT: PROVIDED, THAT NO CHANGE IN PRICE SHALL BECOME EFFECTIVE PRIOR TO THE EXPIRATION OF FIFTEEN DAYS FROM THE DATE ON WHICH SUCH CHANGE IS MADE BY THE COMMITTEE.

SEC. 3. ALL BROOMS AND MOPS AND OTHER SUITABLE COMMODITIES HEREAFTER PROCURED IN ACCORDANCE WITH APPLICABLE FEDERAL SPECIFICATIONS BY OR FOR ANY FEDERAL DEPARTMENT OR AGENCY SHALL BE PROCURED FROM SUCH NON-PROFIT- MAKING AGENCIES FOR THE BLIND IN ALL CASES WHERE SUCH ARTICLES ARE AVAILABLE WITHIN THE PERIOD SPECIFIED AT THE PRICE DETERMINED BY THE COMMITTEE TO BE THE FAIR MARKET PRICE FOR THE ARTICLE OR ARTICLES SO PROCURED: PROVIDED, THAT THIS ACT SHALL NOT APPLY IN ANY CASES WHERE BROOMS AND MOPS ARE AVAILABLE FOR PROCUREMENT FROM ANY FEDERAL DEPARTMENT OR AGENCY AND PROCUREMENT THEREFROM IS REQUIRED UNDER THE PROVISIONS OF ANY LAW IN EFFECT ON THE DATE OF ENACTMENT OF THIS ACT, OR IN CASES WHERE BROOMS AND MOPS ARE PROCURED FOR USE OUTSIDE CONTINENTAL UNITED STATES.

THE REQUIREMENT OF SECTION 3 OF THE QUOTED ACT, THAT MOPS AND BROOMS AND OTHER SUITABLE COMMODITIES BE PROCURED FROM NON-PROFIT-MAKING AGENCIES FOR THE BLIND WHERE SUCH AGENCIES ARE ABLE TO FURNISH THEM UNDER THE CONDITIONS SPECIFIED IN THE ACT, IS SPECIFICALLY MADE APPLICABLE TO PROCUREMENT BY ANY FEDERAL DEPARTMENT OR AGENCY AS WELL AS TO PROCUREMENTS FOR ANY FEDERAL DEPARTMENT OR AGENCY. FURTHERMORE, SUCH REQUIREMENT IS NOT LIMITED BY THE TERMS OF THE ACT TO CASES WHERE THE COST OF THE COMMODITIES ULTIMATELY WOULD BE BORNE BY THE GOVERNMENT, BUT, RATHER, IT IS MADE APPLICABLE "IN ALL CASES" WHERE THE COMMODITIES ARE PROCURABLE UNDER THE CONDITIONS SPECIFIED. MOREOVER, THE LANGUAGE EMPLOYED IN THE ACT IS SO CLEAR AS TO BE FREE FROM ANY AMBIGUITY WHICH WOULD PERMIT, BY INTERPRETATION OR CONSTRUCTION, A DEPARTURE FROM THE PLAIN REQUIREMENTS OF THE ACT.

I HAVE TO ADVISE, THEREFORE, THAT THE REQUIREMENTS OF SECTION 3 OF THE ACT OF JUNE 25, 1938, MUST BE OBSERVED IN THE PROCUREMENT BY THE NAVY DEPARTMENT OF THE COMMODITIES DESCRIBED IN SAID ACT, EVEN IN CASES WHERE THE COST OF SUCH COMMODITIES ULTIMATELY WILL BE BORNE BY ENLISTED MEN OF THE NAVY.

SECTION 2 OF THE ABOVE-QUOTED ACT PROVIDES THAT IT SHALL BE THE DUTY OF THE COMMITTEE ON PURCHASES OF BLIND-MADE PRODUCTS TO DETERMINE THE FAIR MARKET PRICE OF ALL BROOMS AND MOPS AND OTHER SUITABLE COMMODITIES MANUFACTURED BY THE BLIND AND OFFERED FOR SALE TO THE FEDERAL GOVERNMENT BY ANY NON-PROFIT-MAKING AGENCY FOR THE BLIND ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR OF ANY STATE, AND TO REVISE SUCH PRICES FROM TIME TO TIME IN ACCORDANCE WITH CHANGING MARKET CONDITIONS. OF COURSE, THE FACT THAT WHISK BROOMS MAY IN CERTAIN INSTANCES BE PURCHASED FROM COMMERCIAL FIRMS AT PRICES BELOW THOSE FIXED BY THE SAID COMMITTEE FOR BLIND-MADE WHISK BROOMS DOES NOT ESTABLISH THAT THE PRICES SO FIXED ARE IN EXCESS OF THE FAIR MARKET VALUE OF THE BLIND-MADE WHISK BROOMS. HOWEVER, IN THIS CONNECTION, NOTE THE STATEMENTS IN THE DEBATE IN THE HOUSE OF REPRESENTATIVES ( CONGRESSIONAL RECORD, VOL. 83, PART 8, PP. 9110-9116) ON THE BILL, S. 2819, 75TH CONGRESS, 3D SESSION, WHICH LATER BECAME THE ACT OF JUNE 25, 1938, SUPRA, TO THE EFFECT THAT BLIND-MADE MOPS AND BROOMS COULD BE SUCCESSFULLY MANUFACTURED AND SOLD BY NON-PROFIT-MAKING AGENCIES FOR THE BLIND AT PRICES BELOW THOSE CHARGED BY COMMERCIAL ENTERPRISES. IT IS BELIEVED THAT PAYMENT OF THE PRICES FIXED FOR WHISK BROOMS BY THE COMMITTEE ON PURCHASES OF BLIND-MADE PRODUCTS WILL WORK A HARDSHIP ON THE ENLISTED MEN OF THE NAVY FOR WHOM SUCH ARTICLES ARE PURCHASED, IT IS SUGGESTED THAT THE MATTER MAY BE BROUGHT TO THE ATTENTION OF THE COMMITTEE FOR APPROPRIATE ACTION BY THE NAVY DEPARTMENT'S REPRESENTATIVE ON SAID COMMITTEE.