A-78315, JULY 18, 1936, 16 COMP. GEN. 43

A-78315, JULY 18, 1936, 16 COMP. GEN. 43

CONTRACTS - RESTRICTIVE AUTOMOBILE SPECIFICATIONS - READVERTISEMENT SPECIFICATIONS INVOLVING THE PURCHASE OF A NEW AUTOMOBILE AND EXCHANGE OF A USED CAR, SO DRAWN, WITHOUT NEED SHOWN, WITH REGARD TO PASSENGER CAPACITY, WEIGHT, WHEEL BASE, AND NUMBER OF CYLINDERS, AS TO FOLLOW CLOSELY THE SPECIFICATIONS OF THE ONLY AUTOMOBILE IN CONNECTION WITH WHICH A BID WAS RECEIVED AFTER PROPOSALS FORWARDED TO A NUMBER OF DEALERS AND POSTED IN PUBLIC PLACES, MAY NOT BE MADE THE BASIS OF AWARD, THERE NOT HAVING BEEN THE OPEN AND FREE COMPETITION CONTEMPLATED BY STATUTE, AND THE TURN-IN VALUE OF THE USED CAR BEING SUCH AS TO REQUIRE THE SOLICITATION OF SEPARATE CASH BIDS IN THE INTERESTS OF THE UNITED STATES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, JULY 18, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 11, 1936, WITH ENCLOSURES, AS FOLLOWS:

THERE ARE FORWARDED HEREWITH PROPOSALS RECEIVED FOR FURNISHING A SEVEN- PASSENGER AUTOMOBILE FOR USE OF THE DIRECTOR, CIVILIAN CONSERVATION WORK.

PAGE 5 OF PUBLIC, NO. 739, 74TH CONGRESS, EMERGENCY CONSERVATION WORK, PROVIDES FOR ,PASSENGER-CARRYING VEHICLES, ALSO THE PURCHASE (INCLUDING EXCHANGE) OF ONE AT NOT TO EXCEED $1,500.'

PROPOSALS WERE FORWARDED SEVEN DEALERS AND POSTED IN PUBLIC PLACES. BIDS WERE RECEIVED FROM ONLY ONE, THE GENERAL MOTORS CORPORATION, BUICK DIVISION, DETROIT, MICHIGAN. THE BID OF THE GENERAL MOTORS CORPORATION IS AS FOLLOWS: ONE SEVEN-PASSENGER AUTOMOBILE, IN ACCORDANCE WITH ACCOMPANYING

SPECIFICATIONS, F.O.B., WASHINGTON, D.C. -------------------- $1,562.79

FOR USE BY THE DIRECTOR OF CIVILIAN CONSERVATION WORK. PRICE F.O.B., MANUFACTURERS' PLANT, FLINT, MICHIGAN ---------- 1,496.75

UNABLE TO DELIVER FROM FLINT, MICH., AS UNIT NOT AVAILABLE. ALLOWANCE FOR ONE (1) LA SALLE SEDAN (1930), SERIAL NO.

603318, TO BE TURNED OVER AS PART PAYMENT -------------------- 35.00 NET COST, DEDUCTING ALLOWANCE FOR LA SALLE CAR, F.O.B.,

WASHINGTON, D.C. --------------------------------------------- 1,527.79

CASH FOR PURCHASE OF LA SALLE CAR OUTRIGHT.

THE AMOUNT ALLOWED FOR THE PURCHASE OF THIS MACHINE IS $1,500 (INCLUDING EXCHANGE).

THE GENERAL MOTORS CORPORATION, WHILE QUOTING A PRICE OF $1,496.75 F.O.B. MANUFACTURERS' PLANT, FLINT, MICHIGAN, STATE THEY ARE UNABLE TO DELIVER FROM FLINT, MICHIGAN,"AS UNIT NOT AVAILABLE.'

NO PRICE FOR DELIVERY F.O.B. WASHINGTON, D.C., WAS CALLED FOR IN THE PROPOSAL, AS IT WAS DEEMED TO THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT CAR AT MANUFACTURERS' PLANT. THE GENERAL MOTORS CORPORATION, HOWEVER, SUBMIT A PRICE OF $1,562.79 F.O.B. WASHINGTON, D.C., AND AN ALLOWANCE OF $35.00 FOR A LA SALLE SEDAN TO BE TURNED IN AS PART PAYMENT, MAKING THE COST F.O.B. WASHINGTON, D.C., $1,527.79.

JULY 28, 1934 (PAGE 83, VOLUME 14, DECISIONS OF THE COMPTROLLER GENERAL), YOU RENDERED A DECISION THAT---

"TRANSPORTATION COSTS OCCASIONED BY A GOVERNMENT PURCHASE OF MOTOR PROPELLED PASSENGER-CARRYING VEHICLE--- THAT IS, TRANSPORTATION COSTS INVOLVED IN DELIVERY THEREOF--- ARE NOT A PART OF THE ,COSTS" * * *.'

INFORMATION IS NOW REQUESTED AS TO WHETHER, IN VIEW OF THE FACT THAT THE COMPANY SUBMITS A PRICE OF $1,562.79 F.O.B. WASHINGTON, D. C., AND $1,496.75 F.O.B. MANUFACTURERS' PLANT, A DIFFERENCE OF $66.04, THE DEPARTMENT IS AUTHORIZED TO PLACE AN ORDER FOR THE CAR AT A COST OF $1,496.75 F.O.B. WASHINGTON, D.C., AND THE DIFFERENCE OF $31.04 (AFTER DEDUCTING THE ALLOWANCE OF $35.00 FOR THE OLD CAR) CHARGED AS TRANSPORTATION COST.

THE PLACING OF SUCH ORDER WOULD BE TO THE INTEREST OF THE GOVERNMENT, AS A CAR THAT SELLS FOR $1,845 F.O.B. FACTORY AND $2,198 F.O.B. WASHINGTON, D.C., WOULD BE OBTAINED AT A COST OF $1,496.75, OR $701.25 LESS THAN THE COMMERCIAL PRICE F.O.B. WASHINGTON, D.C.

THE CITED STATUTE AUTHORIZES THE PURCHASE OF ONE PASSENGER CARRYING VEHICLE AT NOT TO EXCEED $1,500, INCLUDING THE EXCHANGE VALUE OF ANY VEHICLE TRADED IN ON THE PURCHASE. HENCE, THE TOTAL PRICE OF THE VEHICLE TO BE PURCHASED (CASH TO BE PAID PLUS EXCHANGE VALUE OF THE VEHICLE TRADED IN) MUST NOT EXCEED $1,500.

THE DECISION OF THIS OFFICE QUOTED BY YOU AND DECISION TO YOU, A 55677, OF THE SAME DATE, WERE, IN EFFECT, THAT STATUTORY LIMITATIONS UPON PRICES TO BE PAID FOR VEHICLES FOR GOVERNMENT USE ARE NOT INCLUSIVE OF TRANSPORTATION COSTS, AND THAT WHEN OTHERWISE ACCEPTABLE PRICES, INCLUSIVE OF TRADE-IN VALUES, ARE WITHIN STATUTORY LIMITS OF PRICE, ACTUAL TRANSPORTATION COSTS MOST ADVANTAGEOUS TO THE GOVERNMENT MAY BE PAID IN ADDITION THERETO. IT WAS HELD, ALSO, IN SAID DECISIONS THAT PRICES SHOULD BE SOLICITED FOR DELIVERY BOTH F.O.B. GOVERNMENT DESTINATION AND F.O.B. POINT OF BIDDER'S SELECTION--- FACTORY OR OTHERWISE--- SO THAT THE GOVERNMENT, HAVING REGARD FOR LANDGRANT OR OTHER ADVANTAGES, MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST APPROPRIATED MONEYS. THIS FEATURE OF THE DECISIONS, SUPRA, WAS NOT FOLLOWED IN THIS INSTANCE, AND WHILE THERE IS NOTED YOUR STATEMENT THAT "IT WAS DEEMED TO THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT THE CAR AT MANUFACTURER'S PLANT," NO REASON IS ASSIGNED AND NONE IS APPARENT FOR SUCH ADMINISTRATIVE CONCLUSION. IT IS TO BE OBSERVED, MOREOVER, THAT THE LONE BID RECEIVED IN THIS INSTANCE IS NOT RESPONSIVE TO THE INVITATION IN THAT RESPECT, FOR WHILE THE INVITATION SOLICITED PRICES F.O.B. MANUFACTURER'S PLANT ONLY, THE BIDDER SUBMITTED A PRICE F.O.B. WASHINGTON, D.C., AND STATED THAT FACTORY DELIVERY WAS IMPOSSIBLE.

IN CONFORMITY WITH THE DECISIONS, SUPRA, THE PRICE OF $1,496.75 F.O.B. FACTORY, INCLUSIVE OF THE TRADE-IN ALLOWANCE ON THE USED VEHICLE, MIGHT BE ACCEPTED IN A PROPER CASE, AND IN ADDITION THERETO THERE MIGHT BE PAID OR REIMBURSED THE ACTUAL COST OF TRANSPORTATION FROM THE FACTORY TO WASHINGTON, D.C., BY THE ROUTE AND MEANS MOST ADVANTAGEOUS TO THE GOVERNMENT.

HOWEVER, THERE APPEAR FROM YOUR SUBMISSION OTHER FACTS PROPER FOR CONSIDERATION IN CONNECTION WITH THE TRANSACTION. IN THE FIRST PLACE, COMPARISON OF THE SPECIFICATIONS ACCOMPANYING THE INVITATION FOR BIDS WITH THE NOVEMBER 1935 NUMBER OF MOTOR MAGAZINE INDICATES THAT THE SPECIFICATION REQUIREMENTS OF 136-INCH WHEEL BASE, DRY VEHICLE WEIGHT OF 4,000 POUNDS, AND EIGHT CYLINDERS, VERY CLOSELY FOLLOW THE SPECIFICATION OF THE BUICK 90, AND RAISES A QUESTION AS TO WHETHER THE SPECIFICATIONS WERE DRAWN WITH PARTICULAR REFERENCE TO THAT CAR, TO THE EXCLUSION OF OTHER AUTOMOBILES REASONABLY COMPETITIVE WITHIN THE $1,500 PRICE LIMIT PROVIDED BY THE STATUTE. IT IS TO BE BORNE IN MIND THAT WHILE THE INSTANT STATUTE CONSTITUTES AN EXCEPTION TO THE SEVERAL $750 PRICE-LIMIT STATUTES, IT DOES NOT ABROGATE IN ANY MEASURE THE REQUIREMENT OF SECTION 3709, REVISED STATUTES, THAT THERE SHALL BE OPPORTUNITY FOR FULL AND FREE COMPETITION WITHIN THE CLASS OF AUTOMOBILES INVOLVED. FURTHERMORE, THE STATUTE AUTHORIZES THE PURCHASE OF A VEHICLE "AT NOT TO EXCEED $1,500.' THAT IS TO SAY, THE PRICE PRESCRIBED IS A MAXIMUM PRICE AND DOES NOT AUTHORIZE THE EXPENDITURE OF THAT AMOUNT IRRESPECTIVE OF THE NEEDS OF THE GOVERNMENT. MOTOR MAGAZINE CATALOGS 16 AUTOMOBILES RANGING IN LIST PRICE FROM $1,250 TO $1,999. SOME OF THESE CARS WOULD NOT MEET THE REQUIREMENT FOR A SEVEN-PASSENGER VEHICLE; OTHERS ARE DEFICIENT IN WEIGHT, AND OTHERS IN WHEEL BASE, WHILE STILL OTHERS HAVE ONLY SIX CYLINDERS. IT MAY BE SAID IN THIS CONNECTION THAT THE SERVICE REQUIREMENTS STATED IN THE SPECIFICATIONS FAIL TO DISCLOSE THE NECESSITY FOR AN EIGHT-CYLINDER AUTOMOBILE, AND THERE APPEARS NO REASON WHY A SUFFICIENTLY STURDY, ADEQUATELY POWERED SIX-CYLINDER AUTOMOBILE WOULD NOT ACCEPTABLY PERFORM EVERY REQUIREMENT OF THE STATED SERVICE. IN THE SECOND PLACE, IT APPEARS THAT THE INVITATION FOR BIDS OFFERED ONE LA SALLE SEDAN, 1930 MODEL, SERIAL NO. 603318, TO BE TURNED OVER AS PART PAYMENT. WHILE PROVISION WAS MADE IN THE INVITATION FOR A CASH BID FOR THE PURCHASE OF THE LA SALLE CAR OUTRIGHT, NO CASH BID WAS SUBMITTED AND THE TRADE-IN ALLOWANCE OFFERED WAS ONLY $35. IT WAS HELD IN 7 COMP. GEN. 230, ID. 685, THAT THE INTERESTS OF THE UNITED STATES REQUIRE THAT IN THE DISPOSITION OF USED EQUIPMENT THE BEST PRICE POSSIBLE BE OBTAINED; THAT SUCH EQUIPMENT SHOULD BE OFFERED FOR SALE AS REQUIRED BY SECTION 3709, REVISED STATUTES, AND THAT THE BEST PRICE OFFER SHOULD BE ACCEPTED, WHETHER CASH OR TRADE-IN ALLOWANCE. VIEW OF THE APPARENTLY SMALL AMOUNT OFFERED AS A TRADE-IN ALLOWANCE ON THE USED LA SALLE AUTOMOBILE IN THIS INSTANCE, IT DOES NOT APPEAR THE AMOUNT OFFERED IS THE BEST PRICE OBTAINABLE, AND THE BEST INTERESTS OF THE UNITED STATES WOULD REQUIRE THAT THE USED CAR BE ADVERTISED FOR SALE INDEPENDENTLY OF THE PURCHASE TRANSACTION.

IN THIS CONNECTION IT IS TO BE NOTED THAT THE DIRECTOR OF EMERGENCY CONSERVATION WORK WAS APPOINTED BY EXECUTIVE ORDER NO. 6101, APRIL 5, 1933, PURSUANT TO THE ACT OF MARCH 31, 1933 (48 STAT. 22). ACCORDINGLY QUESTION NATURALLY ARISES AS TO WHEN, WHERE, AND HOW THE 1930 USED LA SALLE SEDAN OFFERED FOR TRADE-IN ON THE PURCHASE OF A NEW CAR WAS ACQUIRED, AND IT IS REQUESTED THAT THIS OFFICE BE FURNISHED COMPLETE INFORMATION RELATIVE TO THIS MATTER.

SINCE IT APPEARS THAT THE SPECIFICATIONS UNDER CONSIDERATION WERE UNDULY RESTRICTIVE AND THAT NO COMPETITION WAS HAD, YOU ARE ADVISED THAT UPON THE FACTS NOW PRESENTED APPROPRIATED MONEYS WILL NOT BE AVAILABLE FOR PAYMENTS UNDER A CONTRACT ENTERED INTO WITH THE SOLE BIDDER UNDER THE INVITATION. THE FACT THAT THE GOVERNMENT MIGHT GET A GOOD BUY IN AN ISOLATED INSTANCE IS NOT SUFFICIENT TO JUSTIFY A DISREGARD OF STATUTORY PROVISIONS, AND IT WOULD APPEAR PROPER TO READVERTISE THE NEEDS OF THE GOVERNMENT UPON SPECIFICATIONS AFFORDING OPPORTUNITY FOR OPEN AND ACTUAL COMPETITION WITHIN THE CLASS OF AUTOMOBILES CONTEMPLATED BY THE STATUTE, AND TO ADVERTISE THE USED VEHICLE FOR SALE INDEPENDENT OF THE PURCHASE, GIVING ADEQUATE CIRCULATION TO SUCH ADVERTISEMENT.