B-31930, FEBRUARY 18, 1943, 22 COMP. GEN. 817

B-31930: Feb 18, 1943

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IT IS IMPRACTICABLE TO OBTAIN WRITTEN QUOTATIONS OR WRITTEN CONFIRMATIONS OF PURCHASE ORDERS FOR COMMODITIES. THIS OFFICE WILL ACCEPT PURCHASE ORDERS BASED UPON ORAL QUOTATIONS AS A SUFFICIENT COMPLIANCE WITH THE CONTRACT-FILING REQUIREMENTS OF SECTION 3743. SETTING FORTH THE CONDITIONS UNDER WHICH THE PURCHASE WAS MADE. IT IS EXPECTED THAT ADVERTISING WILL BE RESORTED TO EXCEPT WHEN NOT REQUIRED UNDER SECTION 3709. THAT WRITTEN QUOTATIONS WILL BE OBTAINED. AS FOLLOWS: REPORTS ARE BEING RECEIVED FROM VETERANS ADMINISTRATION HOSPITALS TO THE EFFECT THAT DUE TO FOOD SHORTAGES THEY ARE UNABLE TO SECURE COMPETITIVE BIDS ON MAJOR ITEMS OF SUBSISTENCE SUCH AS BEEF. IN MANY INSTANCES THE VENDORS FROM WHOM THESE OPEN MARKET PURCHASES ARE MADE REFUSE TO GIVE WRITTEN QUOTATIONS OR TO SUBSCRIBE TO ANY FORM OF WRITTEN AGREEMENT.

B-31930, FEBRUARY 18, 1943, 22 COMP. GEN. 817

CONTRACT FILING REQUIREMENTS - ACCEPTABILITY OF PURCHASE ORDERS WITHOUT WRITTEN QUOTATIONS OR WRITTEN CONFIRMATIONS WHERE, DUE TO PRESENT MARKET CONDITIONS AND THE RESULTING RELUCTANCE OR INABILITY OF VENDORS TO COMMIT THEMSELVES TO ANY CONSIDERABLE EXTENT, IT IS IMPRACTICABLE TO OBTAIN WRITTEN QUOTATIONS OR WRITTEN CONFIRMATIONS OF PURCHASE ORDERS FOR COMMODITIES, SUCH AS SUBSISTENCE SUPPLIES, THIS OFFICE WILL ACCEPT PURCHASE ORDERS BASED UPON ORAL QUOTATIONS AS A SUFFICIENT COMPLIANCE WITH THE CONTRACT-FILING REQUIREMENTS OF SECTION 3743, REVISED STATUTES, PROVIDED THE PURCHASE ORDERS BE ACCOMPANIED BY STANDARD FORM NO. 1036 ( STATEMENT AND CERTIFICATE OF AWARD), OR A SIMILAR CERTIFICATE, SETTING FORTH THE CONDITIONS UNDER WHICH THE PURCHASE WAS MADE, BUT IT IS EXPECTED THAT ADVERTISING WILL BE RESORTED TO EXCEPT WHEN NOT REQUIRED UNDER SECTION 3709, REVISED STATUTES, AND THAT WRITTEN QUOTATIONS WILL BE OBTAINED, WHERE PRACTICABLE.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, FEBRUARY 18, 1943:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JANUARY 21, 1943, AS FOLLOWS:

REPORTS ARE BEING RECEIVED FROM VETERANS ADMINISTRATION HOSPITALS TO THE EFFECT THAT DUE TO FOOD SHORTAGES THEY ARE UNABLE TO SECURE COMPETITIVE BIDS ON MAJOR ITEMS OF SUBSISTENCE SUCH AS BEEF, MILK, BUTTER, EGGS AND POULTRY, AND THAT IN THE ABSENCE OF COMPETITION IT HAS BEEN NECESSARY TO SECURE THESE COMMODITIES IN THE OPEN MARKET ON A "HAND TO MOUTH" BASIS. MOST OF THE PURCHASES MADE EXCEED $50.00 AND DO NOT, THEREFORE, COME WITHIN THE PURVIEW OF THE ACT OF OCTOBER 10, 1940 ( PUBLIC NO. 842--- 76TH CONGRESS) WHICH PROVIDES THAT " SECTION 3709 OF THE REVISED STATUTES SHALL NOT BE CONSTRUED TO APPLY TO ANY PURCHASES OR SERVICES AUTHORIZED BY ANY APPROPRIATION ACTS FOR THE VETERANS ADMINISTRATION WHEN THE AGGREGATE AMOUNT INVOLVED DOES NOT EXCEED THE SUM OF $50.00.' IN MANY INSTANCES THE VENDORS FROM WHOM THESE OPEN MARKET PURCHASES ARE MADE REFUSE TO GIVE WRITTEN QUOTATIONS OR TO SUBSCRIBE TO ANY FORM OF WRITTEN AGREEMENT, BUT WILL ACCEPT PURCHASE ORDERS BASED ON VERBAL QUOTATIONS. THE QUESTION ARISES AS TO WHETHER TRANSACTIONS CONSUMMATED IN THIS MANNER, THAT IS, THE ISSUANCE OF A PURCHASE ORDER BASED ON VERBAL QUOTATIONS, WILL BE SUFFICIENT COMPLIANCE WITH SECTION 3743, REVISED STATUTES, WHICH REQUIRES THAT ALL CONTRACTS TO BE MADE, BY VIRTUE OF ANY LAW AND REQUIRING THE ADVANCE OF MONEY, OR IN ANY MANNER CONNECTED WITH THE SETTLEMENT OF PUBLIC ACCOUNTS SHALL BE DEPOSITED WITH THE ACCOUNTING OFFICERS OF THE GOVERNMENT.

YOU WILL, I AM SURE, APPRECIATE THE FACT THAT ADEQUATE FOOD MUST BE AVAILABLE AT ALL TIMES IN THE OPERATION OF HOSPITALS PROVIDED FOR VETERANS; THAT IT MUST BE PROCURED, WHETHER OR NOT VENDORS WILL SUBSCRIBE TO A WRITTEN AGREEMENT IN ADVANCE OF THE ISSUANCE OF A PURCHASE ORDER, AND IT OCCURS TO ME THAT THE ISSUANCE OF A PURCHASE ORDER, IN WHICH THERE IS INCORPORATED THE TERMS OF VERBAL QUOTATIONS, WOULD PROVIDE PROPER BASIS FOR THE AUDIT OF EXPENDITURES, WHICH WAS THE PURPOSE FOR THE ENACTMENT OF SECTION 3743, REVISED STATUTES.

YOUR EARLY ADVICE IN THE PREMISES WILL BE APPRECIATED.

THIS OFFICE APPRECIATES THE DIFFICULTY NOW BEING ENCOUNTERED BY GOVERNMENT PURCHASING OFFICERS IN OBTAINING CERTAIN COMMODITIES, INCLUDING SUBSISTENCE ITEMS, DUE TO EXISTING MARKET CONDITIONS AND THE RELUCTANCE OR INABILITY OF VENDORS TO COMMIT THEMSELVES TO ANY CONSIDERABLE EXTENT. REASON THEREOF SECTION 3743, REVISED STATUTES, MUST OF NECESSITY BE GIVEN A CONSTRUCTION CONSISTENT WITH THE PRACTICAL SITUATION RESULTING FROM THE MARKET CONDITIONS CAUSED BY THE NATIONAL EMERGENCY. AS YOU SUGGEST, A PURCHASE ORDER INCORPORATING THE TERMS OF A VERBAL QUOTATION WILL PROVIDE A BASIS FOR THE AUDIT BY THIS OFFICE OF THE EXPENDITURES, AND THE VENDOR'S ACQUIESCENCE IN THE PROVISIONS OF THE PURCHASE ORDER BY DELIVERY THEREUNDER AND THE PRESENTATION OF A CERTIFIED INVOICE OR VOUCHER WOULD SEEM TO MAKE DEFINITE, AND BINDING UPON THE PARTIES, THE TERMS OF THE AGREEMENT. THEREFORE, IF IT BE IMPRACTICABLE TO OBTAIN WRITTEN QUOTATIONS OR WRITTEN CONFIRMATIONS OF PURCHASE ORDERS ISSUED UNDER THE CIRCUMSTANCES DESCRIBED IN YOUR LETTER, THIS OFFICE WILL ACCEPT PURCHASE ORDERS BASED UPON ORAL QUOTATIONS AS A SUFFICIENT COMPLIANCE WITH SECTION 3743, REVISED STATUTES, SO LONG AS PRESENT EMERGENCY CONDITIONS CONTINUE TO EXIST. SUCH CASES, HOWEVER, THE PURCHASE ORDERS SHOULD BE ACCOMPANIED BY STANDARD FORM NO. 1036, OR A SIMILAR CERTIFICATE, SETTING FORTH THE CONDITIONS UNDER WHICH THE PURCHASE WAS MADE. IT IS UNDERSTOOD, OF COURSE, THAT ADVERTISING WILL BE RESORTED TO EXCEPT WHERE THE CIRCUMSTANCES ARE SUCH THAT IT IS NOT REQUIRED UNDER SECTION 3709, REVISED STATUTES, AND THAT WRITTEN QUOTATIONS WILL BE OBTAINED, WHERE PRACTICABLE.