A-99709, DECEMBER 7, 1938, 18 COMP. GEN. 512

A-99709, DECEMBER 7, 1938, 18 COMP. GEN. 512

CONTRACTS - MANUFACTURER AND REGULAR DEALER DETERMINATIONS - ADMINISTRATIVE RESPONSIBILITY AND WALSH-HEALEY ACT STIPULATION INCLUSION REQUIREMENTS THE QUESTION WHETHER A PARTICULAR BIDDER IS OR IS NOT THE MANUFACTURER OF, OR A REGULAR DEALER IN, THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT TO BE MANUFACTURED OR USED IN THE PERFORMANCE OF A CONTRACT IS FOR ADMINISTRATIVE DETERMINATION, AND, IF ADMINISTRATIVELY DETERMINED THAT A BIDDER IS SO QUALIFIED, THIS OFFICE IS NOT REQUIRED TO OBJECT, IF, WHERE APPLICABLE, THE MANUFACTURER OR REGULAR DEALER, ETC., STIPULATIONS OF SECTION 1 OF THE ACT OF JUNE 30, 1936, 49 STAT. 2036, ARE INSERTED IN THE CONTRACT AND THE CONTRACTOR AGREES THERETO WITHOUT QUALIFICATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, DECEMBER 7, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 29, 1938, AS FOLLOWS:

UNDER DATE OF SEPTEMBER 27, 1938, THE WASHINGTON QUARTERMASTER DEPOT ISSUED INVITATION FOR BIDS NO. 950-39-64 FOR FURNISHING STEEL FURNITURE, WALNUT GRAIN, HOUSEHOLD TYPE, FOR OFFICERS' AND NONCOMMISSIONED OFFICER'S QUARTERS.

FOUR (4) BIDS WERE RECEIVED IN RESPONSE TO THE ABOVE INVITATION AS FOLLOWS:

TABLE.

LUMP SUM, LUMP SUM,

F.O.B. F.O.B.

ORIGIN DESTINATION

BIDDER:

DOEHLER METAL FURNITURE COMPANY ------ $91,109.20 $92,391.80

EQUIPMENT AND FURNITURE CORP. -------- 155,752.54 161,611.95

E. F. MAHADY COMPANY ----------------- 152,852.50 158,852.50

SIMMONS COMPANY ---------------------- 95,874.67 98,391.62

THE FIRST THREE BIDDERS INDICATED IN THEIR BIDS THAT THEY WERE BIDDING AS REGULAR DEALERS WHEREAS, THE FOURTH BIDDER INDICATED THAT IT WAS BIDDING AS A MANUFACTURER.

PARAGRAPH 9A OF THE QUARTERMASTER CORPS TENTATIVE SPECIFICATIONS NO. 373- E, WHICH WAS INCORPORATED IN THE INVITATION, READS AS FOLLOWS:

"EACH BIDDER SHALL STATE THE LOCATION OF HIS FACTORY, OR FACTORIES, WHERE IT WILL BE NECESSARY TO INSPECT ANY PART OF THE FURNITURE DURING THE PROCESS OF MANUFACTURE. THIS REQUIREMENT DOES NOT APPLY TO SUCH ITEMS AS ARTIFICIAL LEATHER, HARDWARE, MIRRORS, LACQUER, ETC., WHICH WILL BE INSPECTED AS THEY ARE BEING USED. NO AWARD WILL BE MADE TO ANY MANUFACTURER WHO CANNOT SUBMIT EVIDENCE SATISFACTORY TO THE QUARTERMASTERGENERAL THAT HE IS FULLY QUALIFIED FINANCIALLY TO CARRY OUT THE CONTRACT AND THAT HE HAS, UNDER HIS OWNERSHIP AND MANAGEMENT ADEQUATE FACTORY, EQUIPMENT, AND SKILLED PERSONNEL FOR THE PURPOSE, NOR TO ANY MANUFACTURER WHO HAS NOT HAD AT LEAST THREE (3) YEARS' EXPERIENCE IN MANUFACTURING THE SAME HIGH GRADE CLASS OF FURNITURE AS IS REQUIRED BY THESE SPECIFICATIONS. THE AWARD WILL BE MADE BY ITEM OR ITEMS AS THEY APPEAR IN BIDDING SHEET AND NOT FOR INDIVIDUAL PIECES OF FURNITURE.

"/1) PROOF OF QUALIFICATIONS AS REQUIRED ABOVE SHALL BE SUBMITTED WITH BID.' IT DEVELOPS THAT THIS PARAGRAPH (9A) WAS INSERTED IN THE SPECIFICATIONS THROUGH ERROR ON THE PART OF THE ISSUING OFFICE. IT WAS THE INTENT TO INSURE BY THIS PARAGRAPH THE FINANCIAL AND TECHNICAL RESPONSIBILITY OF A CONTRACTOR WHICH WAS ADEQUATELY PROVIDED FOR IN THE INVITATION IN THAT THE REPRESENTATIONS AND STIPULATIONS PURSUANT TO PUBLIC ACT NO. 846, 74TH CONGRESS, WERE ATTACHED AND MADE A PART OF THE INVITATION.

THE QUESTION HAS ARISEN AS TO WHETHER THE LOW BIDDER, THE DOEHLERMETAL FURNITURE COMPANY, NC., HAS COMPLIED WITH THE ESSENTIAL REQUIREMENTS OF PARAGRAPH 9A, AS QUOTED ABOVE. YOUR ATTENTION IN THIS CONNECTION IS INVITED IN PARTICULAR TO CERTAIN STATEMENTS CONTAINED IN A LETTER FROM THIS BIDDER, DATED OCTOBER 18, 1938, AND LETTERS FROM THE METAL OFFICE FURNITURE COMPANY AND THE HARTER CORPORATION, DATED OCTOBER 25, 1938, AND OCTOBER 26, 1938, RESPECTIVELY, WHICH ACCOMPANIED THE BID OF THE DOEHLER COMPANY. THESE STATEMENTS ARE EXTRACTED BELOW.

LETTER FROM DOEHLER METAL FURNITURE COMPANY, INC., DATED OCTOBER 18, 1938, TO THE CONTRACTING OFFICER:

"FOR A NUMBER OF YEARS WE HAVE BEEN QUALIFIED AS MANUFACTURERS IN OUR DEALINGS WITH VARIOUS FEDERAL GOVERNMENT DEPARTMENTS AND AGENCIES, BUT SINCE THE INCEPTION OF THE WALSH-HEALEY ACT, WE HAVE BEEN INSTRUCTED BY THE DEPARTMENT OF LABOR THAT THE TECHNICAL REQUIREMENTS OF THEIR ADMINISTRATION OF THE ACT REQUIRED THAT WE QUALIFY OURSELVES AS "REGULAR DEALERS.' IN OUR OPINION WE ARE MANUFACTURERS IN A CERTAIN SENSE OF THE WORD SINCE WE OWN OUR OWN VALUABLE TOOLS AND DIES, PATENTS, DESIGNS, MAINTAIN EXTENSIVE STOCKS AND PARTS AND COMPLETED FURNITURE AT OUR OWN EXPENSE, SHIPPED FROM PLANTS IN OUR OWN NAME AND DISTRIBUTE THROUGH A SYSTEM OF REGULAR DEALERS EXCEPT ON FEDERAL GOVERNMENT BUSINESS. THE PLANTS IN WHICH THESE PRODUCTS ARE FABRICATED AND ASSEMBLED WHILE NOT DIRECTLY OWNED BY US, ARE CLOSELY FINANCIALLY ASSOCIATED WITH US AND DO NOT MANUFACTURE THESE ARTICLES FOR ANY OTHER ORGANIZATION THAN OURSELVES.'

LETTER FROM METAL OFFICE FURNITURE COMPANY DATED OCTOBER 25, 1938:

"THIS IS TO CERTIFY THAT WE FABRICATE VARIOUS ARTICLES OF METAL BEDROOM FURNITURE AND METAL DINING ROOM FURNITURE FOR THE DOEHLER METAL FURNITURE COMPANY, INC., OF NEW YORK CITY; THAT WE CARRY STOCK OF CERTAIN ITEMS IN THESE CLASSIFICATIONS FOR THIS COMPANY AND THAT WE HAVE FREQUENTLY MANUFACTURED SPECIALLY DESIGNED ARTICLES FOR BOTH THESE CATEGORIES FOR THE DOEHLER METAL FURNITURE COMPANY DURING THE PAST SIX YEARS WHICH THEY HAVE SOLD TO SUCH UNITS OF THE FEDERAL GOVERNMENT AS THE U.S. ARMY, U.S. NAVY, THE PANAMA CANAL, ETC.

"DUE TO CERTAIN FINANCIAL ARRANGEMENTS AND SALES AGREEMENTS EXISTING BETWEEN DOEHLER METAL FURNITURE COMPANY AND OUR ORGANIZATION, WE PRODUCE ARTICLES OF METAL BEDROOM FURNITURE AND METAL DINING ROOM FURNITURE EXCLUSIVELY FOR THEM AND CONSEQUENTLY THEY ARE ENTERING THIS BID UNDER THEIR OWN NAME FOR SUCH ITEMS IN THE ABOVE INVITATION FOR STEEL FURNITURE AS ARE WITHIN OUR MANUFACTURING RANGE.'

LETTER FROM THE HARTER CORPORATION, DATED OCTOBER 26, 1938:

"THIS IS TO CERTIFY THAT WE FABRICATE VARIOUS ARTICLES OF METAL BEDROOM FURNITURE AND METAL DINING ROOM FURNITURE FOR THE DOEHLER METAL FURNITURE COMPANY, INC., OF NEW YORK CITY; THAT WE CARRY STOCK OF CERTAIN ITEMS IN THESE CLASSIFICATIONS FOR THIS COMPANY AND THAT WE HAVE FREQUENTLY MANUFACTURED SPECIALLY DESIGNED ARTICLES FOR BOTH THESE CATEGORIES FOR THE DOEHLER METAL FURNITURE COMPANY DURING THE PAST SIX YEARS WHICH THEY HAVE SOLD TO SUCH UNITS OF THE FEDERAL GOVERNMENT AS THE U.S. NAVY, U.S. ARMY, THE PANAMA CANAL, ETC.

"DUE TO CERTAIN FINANCIAL ARRANGEMENTS AND SALES AGREEMENTS EXISTING BETWEEN DOEHLER METAL FURNITURE COMPANY AND OUR ORGANIZATION, WE PRODUCE ARTICLES OF METAL BEDROOM FURNITURE AND METAL DINING ROOM FURNITURE EXCLUSIVELY FOR THEM AND CONSEQUENTLY WILL ENTER OUR BID THROUGH THEM FOR SUCH ITEMS IN THE ABOVE INVITATION FOR STEEL FURNITURE AS ARE WITHIN OUR MANUFACTURING RANGE.'

IN VIEW OF THE FOREGOING THIS DEPARTMENT IS OF THE OPINION THAT THE BID OF THE DOEHLER COMPANY MEETS THE ESSENTIAL REQUIREMENTS OF PARAGRAPH 9A OF THE SPECIFICATIONS, AS WELL AS ALL OTHER REQUIREMENTS OF THE INVITATION, AND THAT AWARD MAY PROPERLY BE MADE TO THAT COMPANY.

YOUR OPINION AS TO THE PROPRIETY OF THE PROPOSED AWARD WOULD BE APPRECIATED.

ANY CONTRACT TO BE AWARDED IN THIS CASE MUST CONTAIN THE STIPULATIONS SET FORTH UNDER SUBPARAGRAPHS (A) TO (E), INCLUSIVE, OF SECTION 1 OF THE ACT OF JUNE 30, 1936, 49 STAT. 2036, AND THE CONTRACTOR MUST AGREE THERETO WITHOUT QUALIFICATION. THE QUESTION AS TO WHETHER ANY PARTICULAR BIDDER IS OR IS NOT THE MANUFACTURER OF OR A REGULAR DEALER IN THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT TO BE MANUFACTURED OR USED IN THE PERFORMANCE OF THE CONTRACT ON WHICH A BID IS SUBMITTED IS FOR ADMINISTRATIVE DETERMINATION. IF IT BE ADMINISTRATIVELY DETERMINED THAT THE LOW BIDDER IN THIS INSTANCE IS THE MANUFACTURER OF OR A REGULAR DEALER IN THE ARTICLES TO BE COVERED BY THE CONTRACT AND WILL AGREE WITHOUT QUALIFICATION TO THE STIPULATIONS ABOVE REFERRED TO, THEN, IN VIEW OF THE FACTS REPORTED IN THE ABOVE-QUOTED LETTER, THIS OFFICE IS NOT REQUIRED TO OBJECT--- BECAUSE OF THE REQUIREMENT IN PARAGRAPH 9A OF THE SPECIFICATIONS QUOTED IN YOUR LETTER, SUPRA, WITH RESPECT TO EXPERIENCE IN MANUFACTURING- -- TO THE PROPOSED AWARD TO SUCH LOW BIDDER.