B-9318, APRIL 22, 1940, 19 COMP. GEN. 887

B-9318: Apr 22, 1940

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THE MONETARY RETURN TO THE UNITED STATES FROM THE RESTAURANT CONCESSION IN THE NATIONAL ZOOLOGICAL PARK IS ONLY ONE OF SEVERAL CONSIDERATIONS WHICH NECESSARILY ARE INVOLVED IN SELECTING THE CONCESSIONAIRE. 1940: I HAVE YOUR LETTER OF MARCH 26. AS FOLLOWS: THE PRESENT FRAME RESTAURANT BUILDING IN THE NATIONAL ZOOLOGICAL PARK IS IN BAD CONDITION. A CONTRACT HAS BEEN AWARDED FOR THE ERECTION OF A NEW BUILDING WHICH WILL BE OF PERMANENT CONSTRUCTION AND WILL BE IN HARMONY WITH THE PERMANENT BUILDINGS FOR ANIMALS IN THE PARK. THE PRESENT CONCESSIONAIRE OF THE RESTAURANT IS MR. WHO IS OPERATING UNDER A THREE-YEAR CONTRACT ENDING JUNE 30. WHICH IS CONSIDERED A VERY GOOD PRICE. THERE IS UNCERTAINTY AS TO THE TIME THE NEW RESTAURANT BUILDING WILL BE READY FOR OCCUPANCY.

B-9318, APRIL 22, 1940, 19 COMP. GEN. 887

CONCESSIONS - ADVERTISING REQUIREMENTS THE PROPOSAL OF THE RESTAURANT CONCESSIONAIRE IN THE NATIONAL ZOOLOGICAL PARK TO PAY, FOR THE PRIVILEGE OF OPERATING THE RESTAURANT DURING THE NEXT FISCAL YEAR, THE SAME PRICE AS STATED IN HIS PRESENT AGREEMENT, PLUS THE EXPENSE OF MOVING INTO A NEW BUILDING TO BE ERECTED, MAY NOT BE ACCEPTED WITHOUT FIRST ASCERTAINING, BY ADVERTISING FOR BIDS, THAT NO PROSPECTIVE CONCESSIONAIRE WOULD PAY A HIGHER PRICE. THE MONETARY RETURN TO THE UNITED STATES FROM THE RESTAURANT CONCESSION IN THE NATIONAL ZOOLOGICAL PARK IS ONLY ONE OF SEVERAL CONSIDERATIONS WHICH NECESSARILY ARE INVOLVED IN SELECTING THE CONCESSIONAIRE, BUT A COMPARISON OF THE VALUE OF THE FINANCIAL RETURN WITH THE VALUE OF OTHER CONSIDERATIONS SHOULD BE MADE ONLY AFTER THE MAXIMUM FINANCIAL RETURN HAS BEEN DETERMINED BY ADVERTISING FOR BIDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY, SMITHSONIAN INSTITUTION, APRIL 22, 1940:

I HAVE YOUR LETTER OF MARCH 26, 1940, AS FOLLOWS:

THE PRESENT FRAME RESTAURANT BUILDING IN THE NATIONAL ZOOLOGICAL PARK IS IN BAD CONDITION, AND A CONTRACT HAS BEEN AWARDED FOR THE ERECTION OF A NEW BUILDING WHICH WILL BE OF PERMANENT CONSTRUCTION AND WILL BE IN HARMONY WITH THE PERMANENT BUILDINGS FOR ANIMALS IN THE PARK, INCLUDING THOSE ERECTED IN RECENT YEARS, SUCH AS THE REPTILE HOUSE, THE SMALL MAMMAL HOUSE AND THE PACHYDERM HOUSE.

THE PRESENT CONCESSIONAIRE OF THE RESTAURANT IS MR. SIDNEY W. LEECH, WHO IS OPERATING UNDER A THREE-YEAR CONTRACT ENDING JUNE 30, 1940. HE PAYS FOR THE CONCESSION THE AMOUNT OF $9,012.00 PER ANNUM, WHICH IS CONSIDERED A VERY GOOD PRICE. MR. LEECH HAS MAINTAINED THE SERVICE IN THIS RESTAURANT MOST SATISFACTORILY, SERVING GOOD MEALS AND REFRESHMENTS AT REASONABLE PRICES AND HANDLING LARGE CROWDS OR SPECIAL GROUPS OF PATRONS IN AN EFFICIENT MANNER.

THERE IS UNCERTAINTY AS TO THE TIME THE NEW RESTAURANT BUILDING WILL BE READY FOR OCCUPANCY, BUT IT IS THOUGHT THAT IT WILL NOT BE COMPLETED UNTIL WELL INTO THE NEXT FISCAL YEAR. IT IS NOT THOUGHT PROBABLE THAT INTELLIGENT COMPETITIVE BIDDING CAN BE SECURED FOR THIS CONCESSION AT THE NEW SITE UNTIL THE NEW BUILDING IS COMPLETED AND READY FOR OCCUPANCY. MR. LEECH IS WILLING TO EXTEND HIS PRESENT CONTRACT FOR ONE YEAR AND TO BEAR THE EXPENSE ENTAILED IN MOVING FROM THE PRESENT RESTAURANT INTO THE NEW BUILDING.

I RESPECTFULLY REQUEST PERMISSION TO EXTEND THE PRESENT CONTRACT WITH MR. LEECH UNTIL JUNE 30, 1941, AS I THINK IT WOULD BE TO THE BEST INTEREST OF THE ZOO AND THE ZOO-GOING PUBLIC TO DO SO.

THE MATTER OF THE RESTAURANT CONCESSION AT THE NATIONAL ZOOLOGICAL PARK HAS BEEN PRESENTED FOR CONSIDERATION BY THIS OFFICE ON SEVERAL OCCASIONS IN THE PAST. BY LETTER OF MARCH 19, 1929, YOU REQUESTED DECISION AS TO WHETHER YOU WERE AUTHORIZED TO RENEW FOR 1 YEAR A CONTRACT THEN IN EFFECT, WHICH HAD BEEN RENEWED ANNUALLY FOR SEVERAL YEARS PRIOR TO THAT TIME. YOU STATED THAT THE HOLDER OF THE CONTRACT HAD BEEN RENDERING SATISFACTORY SERVICE AND THAT IT SEEMED DESIRABLE TO RENEW HIS CONTRACT RATHER THAN UNDERTAKE COMPETITIVE BIDDING. YOU WERE INFORMED IN DECISION OF APRIL 4, 1929, A-23158, THAT:

THE POLICY OF THE GOVERNMENT IN THE MATTER OF REQUIRING ADVERTISING AND COMPETITION IN THE LETTING OF ALL GOVERNMENT CONTRACTS--- REGARDLESS OF WHETHER THE SUBJECT MATTER OF THE CONTRACT IS TO BE ACQUIRED OR DISPOSED OF--- EXCEPT WHERE OTHERWISE SPECIFICALLY PROVIDED BY STATUTE, IS NOW WELL ESTABLISHED BY LEGISLATIVE ENACTMENTS AND DECISIONS OF THE COURTS AND ACCOUNTING OFFICERS. WHILE IT IS NOT REQUIRED THAT CONCESSIONS BE LET TO THE HIGHEST BIDDER WITHOUT REGARD TO OTHER CONSIDERATIONS, SUCH AS THE RESPONSIBILITY OF THE HIGHEST BIDDER, THE CONVENIENCE TO THE PUBLIC, ETC., THESE CONSIDERATIONS ARE NOT SO PARAMOUNT AS TO JUSTIFY THE EXCLUSION OF EFFORTS TO SECURE THE BEST PRICES OBTAINABLE BY INVITING BIDS THEREFOR WITH APPROPRIATE STIPULATIONS AS TO WHAT WILL BE REQUIRED OF BIDDERS. WHERE, AFTER ADVERTISING AND COMPETITION HAS BEEN HAD, IT IS THE VIEW OF THE ADMINISTRATIVE OFFICE CONCERNED THAT THE CONCESSION SHOULD BE AWARDED TO OTHER THAN THE HIGHEST BIDDER, THE MATTER SHOULD BE SUBMITTED TO THIS OFFICE BEFORE AN AWARD IS MADE WITH A COMPLETE REPORT AS TO THE FACTS INVOLVED AND THE REASONS FOR PROPOSING TO ACCEPT OTHER THAN THE HIGHEST BID.

BY LETTER OF APRIL 18, 1930, YOU REQUESTED APPROVAL OF A PROPOSAL TO ADVERTISE FOR BIDS FOR THE RESTAURANT CONCESSION FOR 3-YEAR PERIODS. IS SIGNIFICANT THAT AT THE DATE OF YOUR LAST-MENTIONED LETTER THE RESTAURANT CONCESSIONAIRE WAS PAYING A FEE OF $225.50 PER MONTH WHEREAS THE FEE PAYABLE UNDER THE CONTRACT WHICH YOU HAD THERETOFORE REQUESTED PERMISSION TO RENEW WAS ONLY $125 PER MONTH. BY DECISION OF MAY 17, 1930, A-23158, YOU WERE INFORMED THERE WAS NO LEGAL OBJECTION TO THE AWARD OF A CONTRACT COVERING THE CONCESSION FOR A 3-YEAR PERIOD.

THE MATTER WAS AGAIN PRESENTED FOR CONSIDERATION BY YOUR LETTER OF MAY 7, 1934, WHEREIN YOU REQUESTED DECISION AS TO WHETHER YOU MIGHT EXTEND FOR THE PERIOD JULY 1, 1934, TO JUNE 30, 1936, A CONTRACT UNDER THE TERMS OF WHICH MR. SIDNEY W. LEECH HELD THE PRIVILEGE OF OPERATING THE PARK RESTAURANT IN CONSIDERATION FOR PAYMENT OF A FEE OF $4,212 FOR THE FISCAL YEAR ENDING JUNE 30, 1934. YOU WERE INFORMED BY DECISION OF MAY 16, 1934, A-23158, A-55475, THAT THE CASE WAS GOVERNED BY THE SAME CONSIDERATIONS STATED IN THE ABOVE-QUOTED PORTION OF THE DECISION OF APRIL 4, 1929, AND THAT THE CONTRACT WITH MR. LEECH MIGHT NOT LEGALLY BE EXTENDED FOR ANY PERIOD AFTER JUNE 30, 1934, THE EXPIRATION DATE FIXED BY THE TERMS OF SAID CONTRACT.

AGAIN, BY YOUR LETTER OF JUNE 18, 1937, THERE WAS PRESENTED YOUR REQUEST FOR DECISION AS TO WHETHER YOU MIGHT ACCEPT THE BID OF MR. SIDNEY W. LEECH TO PAY $9,012 PER ANNUM FOR THE PRIVILEGE OF OPERATING THE PARK RESTAURANT FOR THE 3-YEAR PERIOD JULY 1, 1937, TO JUNE 30, 1940, NOTWITHSTANDING ANOTHER BIDDER HAD AGREED TO PAY $9,120 PER ANNUM FOR THE SAME PRIVILEGE. IN DECISION OF JUNE 25, 1937, A-87008, YOU WERE INFORMED AS FOLLOWS:

IT APPEARS THAT MR. LEECH FIRST OBTAINED THE CONCESSION HERE INVOLVED BY SUBMITTING A BID OF $4,212, THE HIGHEST OF THREE BIDS RECEIVED, FOR THE FISCAL YEAR 1934; THAT, AS A RESULT OF COMPETITIVE BIDDING, HE OBTAINED THE CONCESSION FOR THE 3-YEAR PERIOD ENDING JUNE 30, 1937, AT THE PRICE OF $6,006 PER YEAR, AND THAT HIS BID FOR THE NEXT 3-YEAR PERIOD IS $9,012 PER YEAR. THEREFORE, THERE WOULD APPEAR TO BE NO ROOM FOR DOUBT THAT IT IS IN THE INTEREST OF THE GOVERNMENT TO AWARD SUCH CONCESSIONS ONLY AFTER ADVERTISING AND ON A COMPETITIVE BASIS.

HOWEVER, THE HIGHEST BID RECEIVED AS A RESULT OF THE PRESENT ADVERTISING IS ONLY $108 A YEAR HIGHER THAN MR. LEECH'S BID, AND WHILE IT HAS NOT BEEN ESTABLISHED THAT THE HIGH BIDDER COULD NOT OR WOULD NOT RENDER SATISFACTORY SERVICE IF AWARDED THE CONCESSION, IN VIEW OF THE SMALL DIFFERENCE BETWEEN THE TWO BIDS AND THE FACT THAT THE PRIMARY OBJECT IN AWARDING THE CONCESSION IS TO OBTAIN SATISFACTORY SERVICE FOR THE VISITORS OF THE ZOOLOGICAL PARK RATHER THAN THE PRODUCTION OF REVENUE, THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE AWARD OF THE CONTRACT IN THE PRESENT INSTANCE TO MR. LEECH IF, IN THE EXERCISE OF YOUR ADMINISTRATIVE DISCRETION, YOU DETERMINE THAT SUCH ACTION IS IN THE INTEREST OF THE GOVERNMENT.

BRIEFLY SUMMARIZING THE RESULTS SECURED FROM COMPETITIVE BIDDING FOR THIS PARTICULAR CONCESSION, IT WILL BE NOTED THAT IN 1928 THE CONTRACT WAS LET FOR A FEE OF $125 PER MONTH, OR $1,500 PER YEAR; THAT BIDS RECEIVED IN 1929 RESULTED IN A FEE OF $225.50 PER MONTH, OR $2,706 PER YEAR; THAT IN 1933 A CONTRACT MADE FOR THE FISCAL YEAR 1934 PROVIDED FOR A FEE OF $4,212 PER YEAR WHICH WAS INCREASED TO $6,006 PER YEAR FOR THE SUCCEEDING 3-YEAR PERIOD AND TO $9,012 PER YEAR FOR THE 3-YEAR PERIOD ENDING WITH THE FISCAL YEAR 1940. IN VIEW OF THE FACT THAT THE RETURN TO THE GOVERNMENT FROM THE CONCESSION APPEARS TO HAVE INCREASED MANY TIMES OVER UNDER A SYSTEM OF COMPETITIVE BIDDING, THE PROPRIETY OF CONTINUING THAT SYSTEM CAN HARDLY BE CONTROVERTED.

AS INDICATED BY THE ABOVE-QUOTED PORTIONS OF THE DECISIONS OF APRIL 4, 1929, AND JUNE 25, 1937, THIS OFFICE IS NOT UNMINDFUL OF THE FACT THAT THE MONETARY RETURN TO THE UNITED STATES FROM THE CONCESSION IS ONLY ONE OF SEVERAL CONSIDERATIONS WHICH NECESSARILY ARE INVOLVED IN SELECTING THE CONCESSIONAIRE; AND, IN THE DECISION OF JUNE 25, 1937, THIS OFFICE ACCEPTED YOUR DETERMINATION THAT OTHER FACTORS OUTWEIGHED THE SMALL DIFFERENCE IN MONETARY RETURN THERE INVOLVED. IT IS APPARENT, HOWEVER, THAT A TRUE COMPARISON OF THE VALUE OF THE FINANCIAL RETURN FROM THE CONCESSION WITH THE VALUE OF OTHER CONSIDERATIONS WHICH ARE INVOLVED CAN BE MADE ONLY AFTER THE MAXIMUM FINANCIAL RETURN HAS BEEN DETERMINED BY ADVERTISING FOR BIDS.

IT IS TO BE PRESUMED THAT THE CONCESSION, WHEN HOUSED IN A NEW AND PERMANENT STRUCTURE CONTAINING BETTER AND MORE MODERN FACILITIES AND PROVIDING MORE ATTRACTIVE SURROUNDINGS THAN THE PRESENT BUILDING AFFORDS, WILL BE OF GREATER VALUE TO THE HOLDER THEREOF, AND THAT SUCH INCREASED VALUE WILL BE REFLECTED IN THE BIDDING FOR THE PRIVILEGE OF OPERATING THE PARK RESTAURANT IN THE PROPOSED NEW BUILDING. FOR THAT REASON IT WOULD APPEAR INADVISABLE TO LINK THE BIDDING FOR THE CONCESSION IN THE TWO BUILDINGS FOR A LENGTHY PERIOD. HOWEVER, THERE WOULD APPEAR TO BE NO REASON WHY THERE SHOULD NOT BE ISSUED INVITATIONS -- SETTING FORTH AS FULLY AS POSSIBLE A DESCRIPTION OF THE NEW BUILDING AND THE APPROXIMATE DATE WHEN IT WILL BE READY FOR OCCUPANCY--- FOR BIDS FOR THE CONCESSION FOR THE FISCAL YEAR 1941, RATHER THAN FOR A 3 YEAR PERIOD. THE ACCEPTANCE OF MR. LEECH'S PROPOSAL TO OPERATE THE RESTAURANT FOR THE FISCAL YEAR 1941 AT THE PRICE STATED IN HIS PRESENT AGREEMENT, PLUS THE EXPENSE OF MOVING INTO THE NEW BUILDING, WITHOUT FIRST ASCERTAINING THAT NO OTHER PROSPECTIVE CONCESSIONAIRE WOULD PAY A HIGHER PRICE, IS NOT AUTHORIZED.

IF THERE BE REASON TO BELIEVE THAT THE NEW BUILDING WILL BE READY FOR OCCUPANCY WITHIN A FEW MONTHS AFTER THE END OF THE PRESENT FISCAL YEAR, THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO PERMITTING MR. LEECH TO CONTINUE TO OPERATE THE RESTAURANT IN THE OLD BUILDING UNDER THE TERMS OF HIS PRESENT CONTRACT DURING THAT TIME, PROVIDED BIDS FOR THE CONCESSION IN THE NEW BUILDING ARE SOLICITED WHEN IT IS READY FOR OCCUPANCY.