B-66029, MAY 15, 1947, 26 COMP. GEN. 881

B-66029: May 15, 1947

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REQUIRE BIDDERS TO STATE THE MAXIMUM PRICES AT WHICH COPIES OF TRANSCRIPTS WOULD BE SOLD TO THE PUBLIC AND PROVIDE THAT BIDS OFFERING BONUS PAYMENTS TO THE GOVERNMENT WILL NOT BE CONSIDERED OR ACCEPTED. AS FOLLOWS: WE HAVE REVISED THE BID INVITATIONS. WE ARE ENCLOSING COPIES OF THESE REVISED DOCUMENTS IN ORDER THAT PRIOR TO THEIR USE WE MAY RECEIVE THE BENEFIT OF SUCH COMMENT AS YOU MAY DEEM APPROPRIATE. THE PROVISIONS SET OUT IN THE ATTACHED DOCUMENTS REPRESENT THE CONDITIONS WHICH IN OUR CONSIDERED JUDGMENT WILL RESULT IN A CONTRACT MOST ADVANTAGEOUS TO THE GOVERNMENT. I BELIEVE THAT YOU WILL BE PARTICULARLY INTERESTED IN OUR CONCLUSION THAT OFFERS OF BONUS PAYMENTS TO THE GOVERNMENT FOR AWARD OF THE CONTRACT WILL NOT BE CONSIDERED.

B-66029, MAY 15, 1947, 26 COMP. GEN. 881

CONTRACTS - STENOGRAPHIC REPORTING SERVICES - NONCONSIDERATION OF BONUS OFFERS; ETC. INVITATIONS TO BID ON THE FURNISHING OF STENOGRAPHIC REPORTING SERVICES FOR THE FEDERAL COMMUNICATIONS COMMISSION AT NO COST TO THE GOVERNMENT MAY, WITH A VIEW TO SECURING LOWER PRICES TO THE GENERAL PUBLIC FOR COPIES OF TRANSCRIPTS OF PROCEEDINGS BEFORE THE COMMISSION, REQUIRE BIDDERS TO STATE THE MAXIMUM PRICES AT WHICH COPIES OF TRANSCRIPTS WOULD BE SOLD TO THE PUBLIC AND PROVIDE THAT BIDS OFFERING BONUS PAYMENTS TO THE GOVERNMENT WILL NOT BE CONSIDERED OR ACCEPTED; AND BIDS PROPERLY MAY BE EVALUATED ON THE BASIS, AMONG OTHERS, OF PROPOSED CHARGES TO THE PUBLIC. 18 COMP. GEN. 967, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION, MAY 15, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 1, 1947, AS FOLLOWS:

WE HAVE REVISED THE BID INVITATIONS, SPECIFICATIONS, AND CONTRACTS USED IN THE LETTING OF ANNUAL CONTRACTS FOR STENOGRAPHIC REPORTING SERVICE UPON THE BASIS OF OUR PAST ADMINISTRATIVE EXPERIENCE IN LETTING SUCH CONTRACTS, AND WE ARE ENCLOSING COPIES OF THESE REVISED DOCUMENTS IN ORDER THAT PRIOR TO THEIR USE WE MAY RECEIVE THE BENEFIT OF SUCH COMMENT AS YOU MAY DEEM APPROPRIATE. UNDER THE ENCLOSED BID SPECIFICATIONS OUR CONTRACT FOR STENOGRAPHIC REPORTING DURING THE FISCAL YEAR 1948 BOTH IN WASHINGTON AND ELSEWHERE WOULD BE AWARDED TO ONE REPORTER WHO WOULD PERFORM THE SERVICES DESCRIBED IN HE BID SPECIFICATIONS AT NO COST TO THE COMMISSION. MOREOVER, THE BIDDER WOULD BE REQUIRED TO STATE THE MAXIMUM PRICES AT WHICH COPIES OF TRANSCRIPTS WOULD BE SOLD TO THE PUBLIC, AND IN THE AWARD OF THE CONTRACT WE WOULD NOT CONSIDER OR ACCEPT OFFERS OF BONUS PAYMENTS TO THE GOVERNMENT FOR AWARD OF THE CONTRACT.

THE PROVISIONS SET OUT IN THE ATTACHED DOCUMENTS REPRESENT THE CONDITIONS WHICH IN OUR CONSIDERED JUDGMENT WILL RESULT IN A CONTRACT MOST ADVANTAGEOUS TO THE GOVERNMENT. I BELIEVE THAT YOU WILL BE PARTICULARLY INTERESTED IN OUR CONCLUSION THAT OFFERS OF BONUS PAYMENTS TO THE GOVERNMENT FOR AWARD OF THE CONTRACT WILL NOT BE CONSIDERED, SHOULD BE INCLUDED IN THE PROPOSED BID SPECIFICATIONS. IN SUBSTANCE, THIS IS THE SITUATION WITH WHICH WE ARE FACED. THE COST OF TRANSCRIPTS OF HEARINGS HELD BY THIS AGENCY IS QUITE HIGH FOR PRIVATE PARTIES AND AS A RESULT OF THIS MANY PARTIES AND OTHER INTERESTED PERSONS DO NOT PURCHASE SUCH TRANSCRIPTS EVEN THOUGH THEY ARE NEEDED IN THE PREPARATION OF MOTIONS, PROPOSED FINDINGS, AND OTHER STEPS TAKEN IN CASES BEFORE US. INSTEAD, THEY RELY UPON STUDY AND EXAMINATION OF THE COPY OF EACH OF THE TRANSCRIPTS IN THE PUBLIC RECORDS OF THE COMMISSION, AND BECAUSE OF THE GREAT NUMBER OF HEARINGS AND OTHER PROCEEDINGS NOW BEING HELD BY US, THE DEMANDS UPON US IN THIS REGARD HAVE INCREASED TO SO GREAT AN EXTENT THAT WE ARE NOW FACED WITH A MOST SERIOUS PROBLEM. FOR EXAMPLE, A CHECK FOR A RECENT WEEK INDICATED THAT APPROXIMATELY 500 PERSONS VISITED THE ROOM IN WHICH THESE RECORDS ARE KEPT FOR THE REVIEW AND STUDY OF TRANSCRIPTS AND RELATED DOCUMENTS IN WHICH THEY WERE INTERESTED. THIS SERVICING OF REQUESTS, AND THE NECESSARY DUTIES INCIDENTAL THERETO, SUCH AS THE KEEPING OF APPROPRIATE RECORDS, HAS REQUIRED THE FULL TIME OF THREE COMMISSION EMPLOYEES, IN ADDITION TO THE PART-TIME ASSISTANCE OF OTHER MEMBERS OF OUR STAFF. IT IMPOSES A BURDEN UPON US WHICH BECAUSE OF THE EXCEPTIONALLY HEAVY WORK LOAD THAT WE NOW HAVE AND OUR RELATIVELY LIMITED STAFF, FUNDS, AND AVAILABLE SPACE, WE ARE NOT IN A POSITION TO BEAR.

IN OUR VIEW AND UPON THE BASIS OF INFORMATION RECEIVED BY US IN THE COURSE OF CONSIDERING THIS PROBLEM, ONE OF THE STEPS NECESSARY FOR MEETING THE SITUATION DESCRIBED ABOVE IS THE LETTING OF OUR CONTRACT FOR STENOGRAPHIC REPORTING SERVICES UPON CONDITIONS THAT WILL BEST ASSURE THE AVAILABILITY OF COPIES OF THE TRANSCRIPTS OF HEARINGS AT A PRICE TO THE PUBLIC LOWER THAN THAT PREVIOUSLY IN EFFECT. IT IS OUR BELIEF THAT IN THIS WAY WE CAN ENCOURAGE SUBSTANTIALLY THE MORE GENERAL PURCHASE OF TRANSCRIPTS BY APPLICANTS AND OTHER PARTIES HAVING AN INTEREST IN COMMISSION PROCEEDINGS. IT MAY BE NOTED THAT MANY OF THE APPLICANTS BEFORE US ARE PERSONS OF LIMITED MEANS, INCLUDING A NUMBER OF EX- SERVICEMEN, WHO ARE ENDEAVORING TO GET A START IN THE FIELD OF RADIO BROADCASTING. IT IS OUR EXPECTATION THAT THE REFUSAL TO CONSIDER BONUS OFFERS AND THE REQUIREMENT THAT MAXIMUM PRICES TO THE PUBLIC BE STATED IN THE BIDS, WILL GO FAR TOWARDS MAKING TRANSCRIPTS AVAILABLE TO THE INTERESTED PARTIES AT A SUBSTANTIALLY LOWER PRICE, WITH A REMISSION FOR USE OF COMMISSION RECORDS AND FACILITIES DESCRIBED ABOVE. FURTHERMORE, THROUGH THE PLAN DESCRIBED ABOVE, THIS WILL BE ACCOMPLISHED UNDER CONDITIONS WHICH WILL NEVERTHELESS ASSURE THE COMMISSION OF STENOGRAPHIC REPORTING SERVICE AT NO COST TO THE GOVERNMENT. IT IS OUR CONSIDERED JUDGMENT UPON A REVIEW OF THE VARIOUS FACTORS INVOLVED THAT FOR THE REASONS INDICATED ABOVE THE ATTACHED BID SPECIFICATIONS ARE CLEARLY TO THE ADVANTAGE OF THE GOVERNMENT.

THE MATTER OF THE CONSIDERATION OF BONUS PAYMENTS OFFERED BY STENOGRAPHIC REPORTING COMPANIES TO SECURE AWARD OF CONTRACTS HAS BEEN THE SUBJECT OF SEVERAL DECISIONS OF THIS OFFICE. IT CONSISTENTLY HAS BEEN HELD THAT WHERE, IN CONNECTION WITH A BID FOR FURNISHING SUCH SERVICES, A BIDDER OFFERS A BONUS PAYMENT AS ADDITIONAL CONSIDERATION FOR THE AWARD TO IT OF THE CONTRACT, SUCH BONUS PAYMENTS NECESSARILY MUST BE CONSIDERED IN MAKING THE AWARD OF THE CONTRACT. 18 COMP. GEN. 967; B-51504 OF AUGUST 17, 1945. HOWEVER, IN EACH OF THE CITED CASES, THERE WAS RECOGNIZED THE RIGHT OF THE ADMINISTRATIVE OFFICE TO SPECIFY IN THE INVITATION TO BID, ISSUED IN CONNECTION WITH THE MATTER, MAXIMUM PRICES AT WHICH COPIES OF THE TRANSCRIPT MIGHT BE SOLD BY THE REPORTER TO THE GENERAL PUBLIC, IN ORDER TO INSURE THAT THE PUBLIC WOULD NOT BE CHARGED EXORBITANT PRICES. FURTHERMORE, AN EXAMINATION OF THE MATTERS CONSIDERED IN SAID DECISIONS DISCLOSES THAT IN EACH INSTANCE THERE WAS INVOLVED A QUESTION OF THE AWARD OF A CONTRACT ON THE BASIS OF INVITATIONS TO BID WHICH PREVIOUSLY HAD BEEN ISSUED BY THE AGENCY INVOLVED AND WHICH CONTAINED NOTHING TO INDICATE THAT BIDS OFFERING BONUS PAYMENTS TO THE GOVERNMENT FOR THE AWARD OF THE CONTRACT WOULD NOT BE ACCEPTABLE TO THE GOVERNMENT. OBVIOUSLY, WHEN CONSIDERATION WAS HAD FOR THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, WITH RESPECT TO COMPETITIVE BIDDING FOR GOVERNMENT CONTRACTS, THERE APPEARED NO ALTERNATIVE TO THE CONCLUSION THAT THE OFFER OF BONUS PAYMENTS HAD TO BE CONSIDERED IN CONNECTION WITH THE AWARD OF THE CONTRACTS.

THE COMMUNICATIONS ACT OF 1934, 48 STAT. 1064, AS AMENDED, 47 U.S.C. 151, CREATING THE FEDERAL COMMUNICATIONS COMMISSION, SETS FORTH THE PURPOSES OF THE ACT AS FOLLOWS:

* * * REGULATING INTERSTATE AND FOREIGN COMMERCE IN COMMUNICATION BY WIRE AND RADIO SO AS TO MAKE AVAILABLE, SO FAR AS POSSIBLE, TO ALL PEOPLE OF THE UNITED STATES A RAPID, EFFICIENT, NATION-WIDE, AND WORLDWIDE WIRE AND RADIO COMMUNICATION SERVICE WITH ADEQUATE FACILITIES AT REASONABLE CHARGES * * *. IT HAS BEEN HELD THAT THE FEDERAL COMMUNICATIONS COMMISSION IS AN ADMINISTRATIVE AGENCY, SET UP TO PROTECT THE PUBLIC INTEREST IN COMMUNICATIONS AND TO DETERMINE THE RIGHTS OF THE PEOPLE OF THE UNITED STATES TO HAVE THE BEST POSSIBLE RADIO SERVICE. SCRIPPS-HOWARD RADIO V. FEDERAL COMMUNICATIONS COMMISSION, 316 U.S. 4, 86 L.ED. 1229; BLACK RIVER VALLEY BROADCASTS V. MCNINCH, 101 F.2D 235; CERTIORARI DENIED 307 U.S. 623; 83 L. ED. 1501. THE COMMUNICATIONS ACT OF 1934, SUPRA REQUIRES THAT HEARINGS BE HELD BY THE COMMISSION FOR THE PURPOSE, AMONG OTHERS, OF LICENSING COMMUNICATION SERVICES; OF ESTABLISHING RATES TO BE CHARGED FOR SUCH SERVICES; OF INCREASING OR DECREASING RATES TO BE CHARGED; OF PRESCRIBING RULES AND REGULATIONS FOR THE OPERATION OF SUCH SERVICES; OF CONSIDERING THE SUSPENSION OF LICENSES FOR CAUSE; AND OF ISSUING PERMITS FOR THE CONSTRUCTION OF RADIO STATIONS, BASED UPON PUBLIC CONVENIENCE.

THUS, NOT ONLY ARE THE MATTERS INVOLVED IN SUCH HEARINGS OF INTEREST TO THE GENERAL PUBLIC BUT, IN FACT, IT IS EVIDENT THAT A WIDER DISTRIBUTION TO THE GENERAL PUBLIC OF COPIES OF TRANSCRIPTS OF HEARINGS WOULD BE DESIRABLE IN SEEKING TO ATTAIN, TO THE HIGHEST DEGREE POSSIBLE, THE FULFILLMENT OF THE STATED PURPOSES OF THE ACT.

UNDER SUCH CIRCUMSTANCES AND IN VIEW OF THE ADMINISTRATIVE DETERMINATION THAT THE SALE TO THE GENERAL PUBLIC OF COPIES OF TRANSCRIPTS AT LOWER PRICES, BASED UPON THE REFUSAL ON THE PART OF THE COMMISSION TO ENTERTAIN OR CONSIDER BIDS SUBMITTED WHICH CONTAIN OFFERS OF BONUS PAYMENTS TO THE GOVERNMENT, WOULD BEST SERVE THE PURPOSES FOR WHICH THE FEDERAL COMMUNICATIONS COMMISSION WAS CREATED, THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO THE ISSUANCE OF INVITATIONS TO BID FOR STENOGRAPHIC REPORTING SERVICES ON THE BASIS PROPOSED.

WITH RESPECT TO THE FORM OF INVITATION TO BID PROPOSED TO BE ISSUED, A COPY OF WHICH WAS TRANSMITTED WITH YOUR LETTER, IT IS SUGGESTED THAT THE PROVISION PRECLUDING THE CONSIDERATION OF BIDS OFFERING BONUS PAYMENTS TO THE GOVERNMENT, AS CONTAINED IN PARAGRAPH 7 OF INFORMATION FOR BIDDERS, BE EMPHASIZED, EITHER BY CAPITALIZATION OR UNDERLINING; THAT THE LAST PART OF PARAGRAPH 8 THEREOF BE REVISED TO PROVIDE SPECIFY THAT BIDS WILL BE EVALUATED ON THE BASIS OF THE PROPOSED CHARGES TO THE PUBLIC, TOGETHER WITH OTHER PERTINENT FACTORS; AND THAT PARAGRAPH K OF THE SPECIFICATIONS, AUTHORIZING THE COMMISSION TO TERMINATE THE CONTRACT UNDER CERTAIN STIPULATED CIRCUMSTANCES, BE REVISED TO INCLUDE AUTHORITY FOR THE TERMINATION OF THE CONTRACT AND/OR THE COLLECTION OF DAMAGES IN THE EVENT OF THE FAILURE OR REFUSAL ON THE PART OF THE CONTRACTOR TO PROVIDE COPIES OF THE TRANSCRIPTS TO ALL PERSONS APPLYING THEREFOR AT THE STIPULATED PRICES, OR OF THE SALE BY THE CONTRACTOR OF COPIES OF SUCH TRANSCRIPTS AT PRICES IN EXCESS OF THOSE STIPULATED.

SUBJECT TO THE FOREGOING QUALIFICATIONS, THE FORM OF INVITATION TO BID PROPOSED TO BE ISSUED WOULD NOT APPEAR TO BE OBJECTIONABLE.