B-11383, JUNE 29, 1942, 21 COMP. GEN. 1132

B-11383, JUNE 29, 1942, 21 COMP. GEN. 1132

MOTOR TRUCK SPECIFICATIONS - GUARANTY PROVISIONS IN THE ABSENCE OF A FEDERAL SPECIFICATION COVERING HEAVY-DUTY TRUCKS, THERE MAY BE INCLUDED IN FUTURE SPECIFICATIONS FOR SUCH TYPE OF TRUCK A PERFORMANCE, ETC., GUARANTY PROVISION WHICH IS MORE DRASTIC THAN THE GENERAL GUARANTY PROVISIONS INCLUDED IN FEDERAL SPECIFICATION NO. KKK-T- 716 APPLICABLE TO A DIFFERENT TYPE OF TRUCK, IF IT BE ADMINISTRATIVELY DETERMINED THAT SUCH A PROVISION IS NECESSARY TO THE GOVERNMENT'S INTEREST, AND PROVIDED THAT ITS INCLUSION DOES NOT TEND TO RESTRICT COMPETITION UNDULY OR TO INCREASE UNNECESSARILY THE COST OF THE TRUCKS. 20 COMP. GEN. 836, MODIFIED. A REQUIREMENT IN INVITATIONS FOR BIDS ON HEAVY-DUTY TRUCKS THAT THE SUCCESSFUL BIDDER POST A BOND EQUAL TO 100 PERCENT OF THE AMOUNT OF THE CONTRACT AS A GUARANTEE THAT THE TRUCKS WILL CONFORM TO SPECIFICATIONS AND WILL PERFORM SATISFACTORILY FOR 1 YEAR APPARENTLY WOULD INCREASE UNNECESSARILY THE COST OF THE TRUCKS, SO THAT SUCH A BOND SHOULD NOT BE REQUIRED UNLESS THERE IS A REASON TO BELIEVE THAT THE SUCCESSFUL BIDDER MAY BE OTHER THAN A REPUTABLE MANUFACTURER AND THAT THE BOND IS NECESSARY TO PROTECT THE GOVERNMENT'S INTEREST.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, JUNE 29, 1942:

THERE HAS BEEN CONSIDERED A LETTER OF APRIL 13, 1942, FROM THE ACTING SECRETARY OF THE INTERIOR, AS FOLLOWS:

RECONSIDERATION OF YOUR DECISION B-11383 DATED MAY 31, 1941, TO SECRETARY ICKES IS REQUESTED BECAUSE, FOR REASONS PRESENTED HEREIN, THE DEPARTMENT DOES NOT AGREE THAT THE GUARANTEE CONTAINED IN FEDERAL SPECIFICATION KKK-T -716 FOR TRUCKS, MOTOR, GASOLINE (1,000-POUND PAYLOAD), ( FOUR WHEELS--- TWO REAR WHEEL DRIVE) IS APPLICABLE TO OR SUFFICIENT FOR TRUCKS OF THE TYPE OR CLASS PURCHASED UNDER THE SUBJECT CONTRACT. HOWEVER, IN COMPLIANCE WITH YOUR DECISION THE PARAGRAPHS RELATIVE TO THE SUBJECT PERFORMANCE GUARANTY HAVE NOT BEEN INCLUDED IN INVITATIONS FOR BIDS ON TRUCKS, AND THE GUARANTIES REQUIRED IN ALL DEPARTMENTAL STANDARD SPECIFICATIONS FOR TRUCKS HAVE BEEN CHANGED TO COMPLY WITH AND TO REFER TO THE PARAGRAPH INCLUDED IN SECTION B-3 OF FEDERAL SPECIFICATION KKK-T-716.

THERE ARE THREE FEDERAL SPECIFICATIONS FOR TRUCKS, I.E., KKK-T 701A, 706 AND 716, WHICH WILL BE REFERRED TO AS 701A, 706 AND 716. INCLUDED IN PARAGRAPH B-3, IN 701A, THERE IS STATED: "IF ANY OTHER GUARANTY IS DESIRED THE DEPARTMENT SHALL SO STATE IN LIEU OF THIS PARAGRAPH.' IN 706 THERE IS NO REFERENCE MADE TO A GUARANTY, BUT IN 716 THE GUARANTY TO BE REQUIRED IS DEFINITELY STATED, WITH NO PROVISION FOR CHANGE. THROUGHOUT 716, UNLIKE THE OTHER FEDERAL SPECIFICATION FOR TRUCKS, THERE ARE NO PROVISIONS TO PERMIT CHANGES TO OR MODIFICATIONS OF ANY PART OF THE SPECIFICATION.

ACCORDING TO REPORTS OF THE TWO REPRESENTATIVES OF THIS DEPARTMENT WHO ATTENDED THE SEVERAL MEETINGS OF THE MOTOR VEHICLE COMMITTEE, FEDERAL SPECIFICATIONS EXECUTIVE COMMITTEE, AT WHICH MEETINGS THIS SPECIFICATION WAS COMPILED, WHICH LATER WAS ISSUED IN APPROVED FORM AS 716, IT WAS THE INTENTION OF THAT COMMITTEE TO DEVELOP SEVERAL FEDERAL SPECIFICATIONS FOR TRUCKS OF DIFFERENT COMMERCIAL TONNAGE RATINGS OF WHICH THIS WAS TO BE THE FIRST. AS EXPLAINED TO THE COMMITTEE BY THE LATE CHAIRMAN, THE NEED FOR THESE SPECIFICATIONS WAS TO PROVIDE THE SMALLER DIVISIONS OF THE GOVERNMENT WITH DEFINITE SPECIFICATIONS FOR TRUCKS WHERE SUCH DIVISIONS HAVE NO FACILITIES TO DETERMINE THE REQUIREMENTS NECESSARY TO AMPLIFY 701A. ACCORDING TO THE MINUTES OF THE MEETING HELD ON APRIL 6, 1937, IT WAS RESOLVED THE COMMITTEE PREPARE FOUR DISTINCT SPECIFICATIONS, ONE TO COVER THE 1/2-TON TRUCKS; ONE FOR THE 3/4- TO 1-TON TRUCKS; ONE FOR THE LIGHT 1 1/2-TON TRUCKS; AND ONE COMBINED SPECIFICATION TO COVER ALL OTHER TYPES OF VEHICLES FOR ORDINARY AS WELL AS SPECIAL SERVICES WITH NOTATIONS EXPLAINING TO WHICH PARAGRAPHS THE SPECIFICATIONS APPLY. THIS LAST SPECIFICATION IN REALITY WAS INTENDED TO BE A PAMPHLET OF INSTRUCTIONS ON HOW TO AMPLIFY 701A AND TO INCLUDE A LIST OF OPTIONAL EQUIPMENT WHICH MAY BE SPECIFIED FOR DIFFERENT SERVICE REQUIREMENTS, PARTICULARLY FOR THE HEAVIER AND MORE POWERFUL TRUCKS. NO FURTHER MEETINGS WERE EVER CALLED AFTER THE FINAL APPROVAL BY THAT COMMITTEE OF THE SPECIFICATION COVERING THE 1/2-TON TRUCK.

STRENUOUS OBJECTIONS BY THE TWO REPRESENTATIVES OF THIS DEPARTMENT ATTENDING THOSE MEETINGS WERE PRESENTED TO THE EXCLUSION FROM THIS SPECIFICATION OF ALL PROVISIONS FOR MODIFICATIONS, BECAUSE IT WAS CONSIDERED THE REQUIREMENTS CONTAINED IN THIS SPECIFICATION WERE BASED ENTIRELY ON THE THEN CURRENT MODELS OF THE COMMERCIALLY TERMED 1/2-TON TRUCKS, AND CONSEQUENTLY MIGHT REQUIRE REVISION TO CARE FOR FUTURE DEVELOPMENTS. THE TITLE OF THE SPECIFICATION TECHNICALLY LIMITS THE OFFERING TO TRUCKS WHICH, INCLUDING THE BODY EQUIPMENT SPECIFIED, ARE DESIGNED AND CONSTRUCTED FOR A PAY LOAD CAPACITY, INCLUDING THE DRIVER, OF EXACTLY ONE THOUSAND POUNDS. THE EFFECT OF THIS REQUIREMENT WOULD BE TO VOID THE GUARANTY IF A GREATER PAYLOAD IS CARRIED, EVEN THOUGH THE TRUCK PURCHASED HAS A RATED CAPACITY FOR THE GREATER LOAD IMPOSED.

IN REALITY THE TRUCK CHASSIS OF THE SATISFACTORY 1/2-TON TRUCKS ARE DESIGNED AND GUARANTEED BY THE MANUFACTURER FOR VARYING PAYLOADS, DEPENDING UPON THE BODY AND OPTIONAL EQUIPMENT SPECIFIED AND ALSO UPON THE SEVERITY OF THE SERVICE FOR WHICH THE TRUCK IS INTENDED. THE PAYLOAD CAPACITY VARIES FROM 800 TO OVER 1,500 POUNDS.

UPON COMPLETION OF THE TENTATIVE SPECIFICATION BY THE MOTOR VEHICLE COMMITTEE, THE SPECIFICATION WAS SUBMITTED TO THE SEVERAL MANUFACTURERS OF THE COMMERCIALLY TERMED 1/2-TON TRUCKS FOR COMMENT. OBJECTIONS WERE RECEIVED FROM SOME MANUFACTURERS TO A 1-YEAR GUARANTY. THEREFORE, THE GUARANTY FINALLY ADOPTED WAS A COMPROMISE. TO THE STANDARD GUARANTY OF THE AUTOMOBILE MANUFACTURERS ASSOCIATION WAS ADDED THE LAST SENTENCE OF PARAGRAPH B-3B, IN 716, WHICH READS: "HE SHALL FURTHER GUARANTEE THE TRUCK AGAINST FAULTY DESIGN DEVELOPING DURING A PERIOD OF ONE (1) YEAR OR EIGHT THOUSAND (8,000) MILES ROAD TRAVEL, WHICHEVER CONDITION SHALL FIRST OCCUR THAT RESULTS IN RECURRING MAINTENANCE AND PART OR UNIT REPLACEMENT BEING REQUIRED.'

THIS GUARANTY, CONTAINED IN 716 AND NOW A PART OF ALL STANDARD SPECIFICATIONS FOR TRUCKS, PRACTICALLY LIMITS THE GUARANTY PERIOD TO THE LIMITS OF ROAD TRAVEL STATED BECAUSE MOST OF THE TRUCKS IN OPERATION BY THE SEVERAL BUREAUS OF THIS DEPARTMENT WILL EXCEED BY FAR 4,000 MILES OF ROAD TRAVEL IN THREE MONTHS. IT IS CONSIDERED THE UNQUALIFIED GUARANTY SHOULD INCLUDE NOT LESS THAN 10,000 MILES AND THE QUALIFIED GUARANTY NOT LESS THAN 40,000 MILES OF ROAD TRAVEL TO BE COMPARABLE TO THE 3 MONTHS AND 1 YEAR TIME PERIODS RESPECTIVELY.

IN REPLY TO PROCUREMENT DIVISION CIRCULAR LETTER NO. 319, THE ACTING PURCHASING OFFICER WROTE THE BRANCH OF SUPPLY, PROCUREMENT DIVISION, TREASURY DEPARTMENT, ON OCTOBER 18, 1938, BRIEFLY CRITICIZING FEDERAL SPECIFICATION KKK-T-716, AND SUBMITTING REASONS WHY THIS FEDERAL SPECIFICATION WAS NOT APPLICABLE FOR USE BY THIS DEPARTMENT. A COPY OF THIS LETTER IS ENCLOSED.

GENERALLY THE MANUFACTURERS OF THE HEAVIER, MORE POWERFUL TRUCKS COMMERCIALLY GUARANTEE THEIR TRUCKS FOR LONGER PERIODS THAN DO THE MANUFACTURERS OF THESE LIGHT TRUCKS. IN 1939 THE DIAMOND T MOTOR CAR COMPANY, BY MEANS OF NATIONAL ADVERTISING, INTRODUCED ITS PRESENT GUARANTY OF 100,000 MILES OR ONE FULL YEAR, WHICH EVER OCCURS FIRST. THIS COMMERCIAL GUARANTY WAS INTENDED TO APPLY PARTICULARLY TO SUCH TRUCKS USED FOR GENERAL FREIGHT TRANSPORTATION WHERE EACH SUCH TRUCK IN OPERATION TRAVELS TWO HUNDRED TO OVER THREE HUNDRED MILES IN AN EIGHT-HOUR DAY. SINCE THEN, OTHER MANUFACTURERS HAVE EXTENDED THE TIME PERIOD OF THEIR GUARANTY. NO OBJECTION HAS BEEN OFFERED BY ANY MANUFACTURER TO THE REQUIREMENT OF A GUARANTY FOR ONE YEAR, WHICH WAS CONTAINED IN EACH DEPARTMENTAL SPECIFICATION FOR THE HEAVIER, MORE POWERFUL TRUCKS, AND WHICH IS CONTAINED IN THE SUBJECT PERFORMANCE GUARANTY. FOR THIS REASON IT IS CONSIDERED THAT 716 IS BASED NOT ONLY ON CONSTRUCTION OF THE THEN CURRENT MODELS, BUT THAT THE GUARANTY IS BASED PRIMARILY ON THE THEN MERCHANDISING METHODS EMPLOYED BY CERTAIN OF THE TRUCK MANUFACTURERS. FACT, IT IS CONSIDERED THAT THE GUARANTY TO BE REQUIRED, ESPECIALLY FOR EQUIPMENT SUCH AS TRUCKS, TRACTORS, ROAD MACHINERY, POWER SHOVELS, ETC., DEPENDS GREATLY UPON THE SERVICE TO BE REQUIRED, THE ANTICIPATED OPERATING LIFE, AND THE STURDINESS OF THE EQUIPMENT TO BE PURCHASED, AND EVEN UPON THE RELATIVE EFFICIENCY OF MANUFACTURING METHODS EMPLOYED BY THE DIFFERENT MANUFACTURERS. THEREFORE, IT IS CONSIDERED THAT THE GUARANTY TO BE REQUIRED FOR ANY EQUIPMENT FOR A PARTICULAR SERVICE, IS FOR ADMINISTRATIVE DECISION IN EACH INSTANCE AND SHOULD NOT BE LIMITED IN A FEDERAL SPECIFICATION.

WHEN THE WASHINGTON REPRESENTATIVE OF THE INTERNATIONAL HARVESTER COMPANY INFORMALLY PROTESTED TO THE ACTING PURCHASING OFFICER OF THIS DEPARTMENT TO THE SUBJECT PERFORMANCE GUARANTY INCLUDED IN INVITATION NO. 5809, TO WHICH LATER A FORMAL PROTEST WAS SUBMITTED TO YOUR OFFICE, HE OBJECTED ONLY TO THE PART OF THE FIRST PARAGRAPH WHICH STATES: "EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS CONTRACT, ALL DISPUTES CONCERNING QUESTIONS OF FACTS ARISING UNDER THIS CONTRACT SHALL BE DECIDED BY THE CONTRACTING OFFICER SUBJECT TO WRITTEN APPEAL BY THE CONTRACTOR WITHIN 30 DAYS TO THE HEAD OF THE DEPARTMENT CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES THERETO.' HE MADE NO OBJECTION TO ANY OTHER TERM OR PART OF THIS PERFORMANCE GUARANTY.

HE FURTHER STATED THAT THE INTERNATIONAL HARVESTER COMPANY WOULD REFUSE TO SUBMIT BIDS ON ANY INVITATIONS WHICH INCLUDED THE ABOVE PROVISION, BECAUSE THE OFFICIALS OF THAT COMPANY CONSIDERED, SHOULD A CONTROVERSY ARISE,"THE HEAD OF THE DEPARTMENT" WOULD BE UNABLE TO RENDER AN UNBIASED DECISION. THE RECORDS OF THE PURCHASING OFFICE DISCLOSE THAT THIS COMPANY SUBMITTED BIDS ON INVITATIONS NUMBERS 7273 AND 7317, EACH OF WHICH CONTAINED THE SUBJECT PERFORMANCE GUARANTY, INCLUDING THE QUOTED PROVISION, AND THAT COMPANY WAS AWARDED CONTRACTS I-1-IND-23462 AND 23473 RESPECTIVELY, EACH FOR $6,020.52.

UNTIL THE RECEIPT OF THE FORMER COMPTROLLER GENERAL'S DECISION A 67692, DATED FEBRUARY 6, 1936, CERTAIN INVITATIONS INCLUDED A SIMILAR PERFORMANCE GUARANTY WHICH CONTAINED, IN PLACE OF THE QUOTED REQUIREMENT, THE STATEMENT: "THE SOLE JUDGE OF A PERFORMANCE OF THE TRUCKS WILL BE THE PURCHASING OFFICER OF THE INTERIOR DEPARTMENT OR HIS DESIGNATED REPRESENTATIVE.' AFTER RECEIPT OF THIS DECISION, THE PERFORMANCE GUARANTY WAS REWORDED, AND HAS SINCE BEEN USED IN ITS PRESENT FORM.

FROM THE RESULTS OF BIDS RECEIVED ON INVITATIONS WHICH HAVE AND WHICH HAVE NOT INCLUDED THIS PERFORMANCE GUARANTY FOR IDENTICAL EQUIPMENT, THERE APPEARS TO BE NO GREAT DIFFERENCE IN THE QUOTATIONS OFFERED; THAT IS, IT IS NOT APPARENT THAT A BIDDER MATERIALLY INCREASES THE QUOTATIONS SUBMITTED BECAUSE OF THE INCLUSION OF THE PERFORMANCE GUARANTY. COMPARABLE TO THE BIDS RECEIVED ON THE SUBJECT INVITATION, THERE GENERALLY IS A GREAT VARIANCE IN THE QUOTATIONS SUBMITTED BY THE DIFFERENT BIDDERS ON ANY ONE INVITATION. THIS DOES NOT INDICATE, IN ANY WAY, THAT CERTAIN BIDDERS HAVE MATERIALLY INCREASED THEIR QUOTATIONS OWING TO THE GUARANTY REQUIRED.

THE ADVERTISED LIST PRICES ON THE MAKES AND MODELS OF EQUIPMENT OFFERED VARY AS MUCH, IF NOT MORE, THAN THE QUOTATIONS SUBMITTED IN THE BIDS.

IN THE SUBJECT INVITATION ON PAGE 5 UNDER THE ITEM DESCRIPTION THERE WAS INCLUDED AN ADDITIONAL REQUIRED GUARANTY WHICH READS:

THE BIDDER MAY OFFER, IN PLACE OF THE CENTER DIFFERENTIAL SPECIFIED UNDER D-10, AN AUTOMATIC LOCKING DIFFERENTIAL, OR A MEANS CHANGING THE PROPORTION OF TORQUE TO THE DRIVING AXLES, PROVIDED THE PERFORMANCE BOND REQUIRED ON PAGE 4 OF THIS ADVERTISEMENT SHALL INCLUDE A GUARANTEE OF THE CENTER DIFFERENTIAL OR EQUALIZING MEANS FOR A PERIOD OF TIME FROM THE ACCEPTANCE OF THE TRUCK UNTIL THE CENTER DIFFERENTIAL SHALL HAVE OPERATED FOR A PERIOD OF 18 MONTHS WITHOUT THE REPLACEMENT OF ANY PART THEREOF DUE TO FAILURE OR EXCESSIVE WEAR, AND ALL SUCH REPLACEMENTS SHALL BE FURNISHED BY THE CONTRACTOR FREE F.O.B. ASHFORD, WASHINGTON.

THIS SPECIAL GUARANTY WAS CONSIDERED NECESSARY BECAUSE THERE IS A GREAT DIFFERENCE IN THE DESIGN AND, THEREFORE, IT APPEARS THERE IS A CONSIDERABLE DIFFERENCE IN THE EFFICIENCY OF THE SEVERAL MECHANISMS WHICH COULD BE OFFERED BY DIFFERENT BIDDERS. THIS GUARANTY WAS CONSIDERED EQUITABLE BECAUSE, WITH DUE CARE, THE TRUCK CHASSIS, EXCEPT FOR THE ENGINE, SHOULD RENDER SERVICE FOR NOT LESS THAN FIVE YEARS WITHOUT EXCESSIVE WEAR. IT WAS ALSO CONSIDERED THAT IF A MANUFACTURER WOULD NOT GUARANTEE HIS MECHANISM FOR THE REQUIRED EIGHTEEN MONTHS, THE GOVERNMENT SHOULD NOT BE COMPELLED TO ACCEPT A TRUCK FITTED WITH SUCH A DIFFERENTIAL OR TORQUE DISTRIBUTOR BECAUSE THE EFFICIENCY OF THIS TYPE OF TRUCK, ESPECIALLY WHEN TRAVELING ON UNIMPROVED RUTTED ROADS, DEPENDS GREATLY UPON THE EFFICIENCY OF THIS PARTICULAR COMPONENT PART. NO BIDDER OR TRUCK MANUFACTURER OR MANUFACTURER OF THIS COMPONENT PART OF THE TRUCK OBJECTED TO THIS SPECIAL GUARANTY.

IN RESPONSE TO A REQUEST FOR A REPORT ON THE OPERATION OF THE TORQUE DIVIDER FITTED IN THE TRUCK FURNISHED BY THE AUTOCAR SALES AND SERVICE COMPANY, WHICH WAS PLACED IN SERVICE ON SEPTEMBER 12, 1940, THE ACTING SUPERINTENDENT OF MOUNT RAINER NATIONAL PARK REPORTED BY MEMORANDUM DATED NOVEMBER 14, WHICH READS:

"YOUR MEMORANDUM OF NOVEMBER 4 REQUESTS INFORMATION AS TO THE OPERATION OF THE TRUCK PURCHASED FROM THE AUTOCAR SALES AND SERVICE COMPANY ON ORDER NO. F-6181; CONTRACT NO. I-1-P-12670.

"WHEN THIS TRUCK WAS FIRST RECEIVED IT CONTINUALLY SLIPPED OUT OF SECOND GEAR. A NEW TORQUE DIVIDER ASSEMBLY WAS FURNISHED WHICH DID NOT CORRECT THE TROUBLE. THE CONCERN THEN FURNISHED A DIVIDER WHICH WAS BUILT TO ELIMINATE THIS DIFFICULTY, AND SINCE INSTALLATION NO FURTHER TROUBLE HAS BEEN ENCOUNTERED. THE BILLING FOR THESE TWO DIVIDERS WAS $515.87 AND $548.78 RESPECTIVELY, AND ALL WAS FURNISHED AT NO COST TO THE GOVERNMENT. "AS STATED ABOVE, SINCE THE SECOND TORQUE DIVIDER WAS FURNISHED AND INSTALLED THE TRUCK HAS BEEN VERY SATISFACTORY IN OPERATION, AND HAS SHOWN NO SIGNS OF WEAR. THE GEARS HAVE NOT BEEN REMOVED FOR CLOSE INSPECTION AS IT WOULD ENTAIL QUITE A LITTLE WORK TO DO SO. THE TRUCK IS OPERATING SO SATISFACTORILY IT DOES NOT SEEM ADVISABLE TO TEAR IT DOWN FOR CLOSE INSPECTION.

THE SPEEDOMETER READING TO DATE IS 11,211 MILES.

IT IS DEBATABLE WHETHER THE CONTRACTOR WOULD HAVE MADE TWO REPLACEMENTS OF THE TORQUE DIVIDER IF THIS SPECIAL GUARANTY HAD NOT BEEN INCLUDED IN THE INVITATION AND CONTRACT. THIS SPECIAL GUARANTY REQUIRED REPLACEMENT AT NO COST TO THE GOVERNMENT F.O.B. ASHFORD, WASHINGTON. THE GUARANTY IN 716 REQUIRING REPLACEMENT OF DEFECTIVE PARTS GENERALLY IMPOSES THE TRANSPORTATION COST ON THE GOVERNMENT OF SUCH PARTS FROM THE FACTORY TO THE DESTINATION WHERE THE TRUCK IS IN OPERATION. IT WAS ANTICIPATED BY THE ACTING PURCHASING OFFICER FOR THE DEPARTMENT THAT THE PARTICULAR MAKE AND MODEL OF TORQUE DIVIDER WHICH WAS FURNISHED MIGHT RENDER UNSATISFACTORY SERVICE; AND IT WAS KNOWN THAT IF FAILURE OCCURRED, REPLACEMENT PARTS COULD NOT BE OBTAINED LOCALLY NOR FROM THE FACTORY OF THE CONTRACTOR, BUT WOULD HAVE TO BE SHIPPED FROM THE FACTORY OF THE MANUFACTURER OF THIS PARTICULAR COMPONENT PART. IT IS EVIDENT REPLACEMENTS WERE MADE PROMPTLY BY THE CONTRACTOR AT NO COST TO THE GOVERNMENT.

THERE HAVE BEEN MANY INSTANCES IN WHICH PROMPT ADJUSTMENT HAS BEEN EFFECTED WHEN THE SUBJECT PERFORMANCE GUARANTY HAS BEEN INCLUDED IN THE CONTRACT AND WHEN THE EQUIPMENT OFFERED HAS NOT COMPLIED WITH THE SPECIFICATIONS, OR AFTER THE EQUIPMENT HAS BEEN IN USE FOR SEVERAL MONTHS AND HAS NOT PROPERLY PERFORMED THE SERVICE REQUIRED. THE "CONDITIONS" PRINTED ON THE U.S. STANDARD FORM 33 ( REVISED) PROVIDE FOR PROPER ACTION TO BE TAKEN IN DEFAULT OR FAILURE OF THE CONTRACTOR TO MAKE DELIVERY OF THE EQUIPMENT, BUT DO NOT PROVIDE FOR ACTION TO BE TAKEN SUBSEQUENT TO ACCEPTANCE AND PAYMENT IN CASE THE EQUIPMENT WHICH HAS BEEN FURNISHED FAILS ADEQUATELY TO PERFORM THE SERVICE FOR WHICH THE EQUIPMENT WAS PURCHASED. FOR THIS REASON, IT IS CONSIDERED WHEN INVITATIONS ARE ISSUED FOR EXPENSIVE COMPLICATED EQUIPMENT, SUCH AS FOUR-WHEEL-DRIVE TRUCKS UNDER 706, OR SIX-WHEEL, FOUR-REAR-WHEEL-DRIVE TRUCKS UNDER 701A, THE PURCHASING OFFICER MAY, AND PROPERLY SHOULD INCLUDE A REQUIRED GUARANTY THAT THE TRUCKS FURNISHED SHALL PERFORM SATISFACTORILY FOR A PERIOD OF NOT LESS THAN ONE YEAR OR FOR AN ESTIMATED MILEAGE COMPARABLE TO ONE YEAR'S SERVICE. THE PERFORMANCE GUARANTY TO WHICH PROTEST HAS BEEN MADE SHOULD BE ACCEPTABLE TO ALL BIDDERS BECAUSE IN ORDER TO TERMINATE MINOR CONTROVERSIES WHICH ARISE AND WHICH ARE NOT COVERED BY THE GUARANTY CONTAINED IN 716, THE DECISION OF THE SECRETARY OR HIS APPOINTED REPRESENTATIVE SHOULD BE FINAL ON ALL MATTERS OF FACT.

THOUGH THE GUARANTY REQUIRED IN ALL DEPARTMENTAL STANDARD SPECIFICATIONS FOR TRUCKS HAS BEEN CHANGED TO COMPLY WITH YOUR DECISION, REQUEST IS MADE THAT YOUR DECISION BE RECONSIDERED IN VIEW OF THE IMPORTANT FACTS HEREIN SUBMITTED.

IT IS TO BE UNDERSTOOD, OF COURSE, THAT IT IS NOT A DUTY OR FUNCTION OF THIS OFFICE TO DRAFT THE GUARANTY OR OTHER PROVISIONS WHICH ARE TO BE INCLUDED IN SPECIFICATIONS COVERING THE PURCHASES OF EQUIPMENT OR SUPPLIES FOR THE VARIOUS DEPARTMENTS OF THE GOVERNMENT. SUCH RESPONSIBILITY PRIMARILY IS A FUNCTION OF THE FEDERAL SPECIFICATION BOARD, PROCUREMENT DIVISION, TREASURY DEPARTMENT, AND/OR THE PARTICULAR ADMINISTRATIVE OFFICE MAKING THE PURCHASE IN THE EVENT AN APPLICABLE FEDERAL SPECIFICATION HAS NOT BEEN FORMULATED. THE DUTY AND RESPONSIBILITY OF THIS OFFICE IN THAT RESPECT IS TO DETERMINE THE QUESTION AS TO WHETHER SPECIFICATIONS WHICH HAVE BEEN DRAFTED BY ADMINISTRATIVE DEPARTMENTS ARE UNDULY RESTRICTIVE OF COMPETITION OR OTHERWISE UNAUTHORIZED--- THIS QUESTION BEING ONE THAT GOES TO THE LEGALITY OF CONTRACTS AND THE USES OF APPROPRIATED MONEYS. SEE 17 COMP. GEN. 554; 18 COMP. GEN. 285, 579, AND 19 COMP. GEN. 673.

IN THE DECISION OF MAY 31, 1941, SUPRA, 20 COMP. GEN. 836, THERE WAS QUESTIONED BY THIS OFFICE A PROVISION IN INVITATION FOR BIDS NO. 5809, DATED JANUARY 26, 1940, WHICH HAD BEEN ISSUED BY YOUR DEPARTMENT FOR THE PURCHASE OF A TRUCK, SIX WHEEL--- FOUR REAR WHEEL DRIVE--- 2,000 GALLON OIL TANK BODY--- RATED GROSS VEHICLE WEIGHT 30,000 POUNDS, FOR THE NATIONAL PARK SERVICE, PURSUANT TO WHICH INVITATION CONTRACT NO. I 1-P- 12670 WAS ENTERED INTO ON APRIL 22, 1940, WITH THE AUTOCAR SALES AND SERVICE COMPANY FOR THE PURCHASE OF SAID TRUCK AT A PRICE OF $5,620, LESS A TRADE-IN ALLOWANCE OF $125, OR A NET PRICE OF $5,495. THE QUESTIONED PROVISION WAS CONTAINED IN THAT PART OF THE INVITATION FOR BIDS ENTITLED " SPECIAL BID CONDITIONS" AND PROVIDED, IN PERTINENT PART, AS FOLLOWS:

THE BIDDER GUARANTEES THAT THE MACHINE OR MACHINES BID ON WILL DO THE WORK REQUIRED AS SET FORTH IN " SERVICE REQUIREMENTS" WITHOUT UNDUE STRESS OR DELAY AND IN A SATISFACTORY MANNER, FOR A PERIOD OF AT LEAST ONE YEAR AFTER DATE OF ACCEPTANCE OF THE MACHINE OR MACHINES BY THE GOVERNMENT. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS CONTRACT, ALL DISPUTES CONCERNING QUESTIONS OF FACT ARISING UNDER THIS CONTRACT SHALL BE DECIDED BY THE CONTRACTING OFFICER SUBJECT TO WRITTEN APPEAL BY THE CONTRACTOR WITHIN 30 DAYS TO THE HEAD OF THE DEPARTMENT CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES THERETO. * * *

CONTRACTOR WILL BE REQUIRED TO POST A BOND EQUAL TO 100 PERCENT OF THE AMOUNT OF THE CONTRACT AS A GUARANTEE THAT THE EQUIPMENT DELIVERED UNDER THE CONTRACT WILL BE IN ACCORDANCE WITH THE SPECIFICATIONS AND WILL PERFORM TO THE SATISFACTION OF THE GOVERNMENT FOR A PERIOD OF ONE YEAR FROM DATE OF DELIVERY. SAID PROVISION WAS QUESTIONED IN THE DECISION OF MAY 31, 1941; SUPRA, FOR THE REASON THAT THE FACTS OF RECORD INDICATED THAT THE INCLUSION OF A GUARANTY PROVISION OF SUCH AN EXACTING NATURE WAS UNAUTHORIZED AS BEING CONTRARY TO THAT PROVIDED FOR IN FEDERAL SPECIFICATION NO. KKK-T-716, THE GENERAL GUARANTY PROVISIONS OF WHICH SPECIFICATION--- ALTHOUGH BEING DESIGNED PRIMARILY FOR THE PURCHASE OF FOUR WHEEL TRUCKS--- TWO REAR WHEEL DRIVE, OF 1,000-POUND PAYLOAD CAPACITY --- WERE BELIEVED TO HAVE BEEN INTENDED TO COVER THE PURCHASE OF TRUCKS GENERALLY BY THE DEPARTMENTS OF THE GOVERNMENT. THE PERTINENT PROVISIONS OF SAID SPECIFICATION 716 REQUIRE THAT THE SUCCESSFUL BIDDER SHALL GUARANTEE THAT THE TRUCK FURNISHED WILL BE SUITABLE FOR THE WORK TO BE PERFORMED, AND WILL GUARANTEE THE TRUCK AGAINST DEFECTIVE WORKMANSHIP AND MATERIAL FOR A PERIOD OF 90 DAYS OR FOR 4,000 MILES OF ROAD TRAVEL, AND AGAINST FAULTY DESIGN DEVELOPING DURING A PERIOD OF ONE YEAR, OR 8,000 MILES OF ROAD TRAVEL. IN CONNECTION THEREWITH, IT WAS STATED IN THE DECISION OF MAY 31, 1941, THAT THERE APPEARED TO BE NO PERCEIVABLE REASON WHY THE GENERAL GUARANTY PROVISIONS OF SPECIFICATION NO. 716 COULD NOT BE USED TO MEET EVERY PARTICULAR AND ESSENTIAL NEED OF THE NATIONAL PARK SERVICE IN THE PURCHASE OF TRUCKS, OR WHY SUCH GUARANTY PROVISIONS SHOULD NOT BE INCLUDED IN SPECIFICATIONS COVERING THE PURCHASES OF TRUCKS TO THE EXCLUSION OF THE MORE DRASTIC AND EXACTING GUARANTY REQUIREMENT CONTAINED IN THE SPECIAL BID CONDITIONS OF INVITATION NO. 5809, SUPRA.

ALSO, IT WAS STATED IN THE DECISION OF MAY 31, 1941, THAT THE GUARANTY PROVISION CONTAINED IN THE QUESTIONED INVITATION APPARENTLY SERVED TO LIMIT AND RESTRICT COMPETITION AND RESULTED IN EXCESS COST TO THE GOVERNMENT, AS WAS EVIDENCED BY THE FACT THAT WHILE CIRCULAR LETTERS WERE SENT TO 51 DEALERS, ONLY THREE BIDS WERE RECEIVED; AND BY THE FURTHER FACT THAT AN OTHERWISE ACCEPTABLE LOW BID WAS REJECTED FOR THE SOLE REASON THAT SAID LOW BIDDER REFUSED TO SUBSCRIBE TO THE GUARANTY PROVISION CONTAINED IN THE SPECIAL BID CONDITIONS OF THE INVITATION, RESULTING IN AN AWARD TO THE HIGHEST BIDDER AT AN EXCESS COST TO THE GOVERNMENT OF APPROXIMATELY 12 PERCENT. ON THAT STATE OF FACTS, YOU WERE INFORMED THAT THE SPECIAL BID CONDITIONS SHOULD BE ELIMINATED FROM FUTURE INVITATIONS FOR BIDS COVERING THE PURCHASE OF TRUCKS FOR YOUR DEPARTMENT.

UPON RECONSIDERATION OF THE MATTER IN THE LIGHT OF THE FACTS NOW SET FORTH IN THE ACTING SECRETARY'S LETTER OF APRIL 13, SUPRA, IT APPEARS DOUBTFUL, AS IS STATED THEREIN, WHETHER IT MAY BE SAID THAT THE GENERAL GUARANTY PROVISIONS OF SPECIFICATION NO. 716 WERE INTENDED BY THE FEDERAL SPECIFICATION BOARD TO APPLY TO THE PURCHASE OF TRUCKS GENERALLY BY GOVERNMENT DEPARTMENTS, REGARDLESS OF THE SIZE OR TYPE OF THE TRUCK. OTHER WORDS, WHILE THE FACTS OF RECORD AT THE TIME OF THE DECISION OF MAY 31, 1941, SUPRA, JUSTIFIED THE CONCLUSION STATED IN SAID DECISION, NAMELY, THAT THE GENERAL GUARANTY PROVISIONS OF SPECIFICATION NO. 716 APPARENTLY WERE INTENDED FOR APPLICATION IN THE PURCHASE OF ALL TYPES OF TRUCKS, IT NOW APPEARS FROM THE ACTING SECRETARY'S LETTER OF APRIL 13 THAT SUCH WAS NOT THE INTENTION OF THE FEDERAL SPECIFICATION BOARD, BUT THAT AT THE TIME SPECIFICATION NO. 716 WAS DRAFTED, IT WAS INTENDED BY THE BOARD TO BE APPLICABLE TO THE PURCHASE OF FOUR WHEEL TRUCKS, ONLY--- TWO REAR WHEEL DRIVE--- WITH A 1,000-POUND PAYLOAD CAPACITY. ACCORDINGLY, IT MAY BE CONCLUDED THAT IN VIEW OF THE EVIDENCE NOW OF RECORD THE GENERAL GUARANTY PROVISIONS OF SPECIFICATION NO. 716 WERE NOT INTENDED OR REQUIRED TO BE USED IN THE PURCHASE OF THE TYPE OF TRUCK COVERED BY INVITATION NO. 5809, SUPRA, ALSO, THERE APPEARS TO BE NO OTHER FEDERAL SPECIFICATION WHICH APPLIES DIRECTLY TO SUCH TYPE OF TRUCK.

THEREFORE, THIS OFFICE WILL NOT OBJECT TO THE INCORPORATION BY YOUR DEPARTMENT, IN FUTURE INVITATIONS FOR THE PURCHASES OF HEAVIER AND MORE EXPENSIVE TYPES OF TRUCKS AND SIMILAR EQUIPMENT, OF A PROVISION REQUIRING BIDDERS TO GUARANTEE THE SATISFACTORY PERFORMANCE OF SUCH EQUIPMENT FOR A PERIOD OF ONE YEAR, OR FOR THE NUMBER OF MILES IT IS ESTIMATED THAT THE EQUIPMENT WILL TRAVEL DURING THE PERIOD OF A YEAR, IF IT BE DETERMINED BY YOUR DEPARTMENT THAT THE USE OF SUCH A PROVISION IS NECESSARY TO PROTECT THE INTEREST OF THE UNITED STATES AND TO INSURE THAT REPLACEMENT OF DEFECTIVE PARTS WILL BE MADE PROMPTLY BY CONTRACTORS; AND PROVIDED THAT THE INCLUSION OF SUCH A PROVISION IN INVITATIONS DOES NOT TEND TO RESTRICT COMPETITION UNDULY OR TO INCREASE UNNECESSARILY THE COST OF THE EQUIPMENT TO THE GOVERNMENT.

WITH RESPECT TO THIS LATTER OBJECTION, IT NOW APPEARS FROM THE RECORD, AS IS STATED IN THE ACTING SECRETARY'S LETTER OF APRIL 13, SUPRA, THAT THE INTERNATIONAL HARVESTER COMPANY, WHOSE BID ON INVITATION NO. 5809, SUPRA, WAS REJECTED, DID NOT TAKE EXCEPTION TO THAT PART OF THE SPECIAL GUARANTY PROVISION, SUPRA, REQUIRING BIDDERS TO GUARANTEE THE SATISFACTORY PERFORMANCE OF THE EQUIPMENT FOR AT LEAST A YEAR, BUT THAT THE OBJECTION OF SAID BIDDER WAS DIRECTED TO THE STIPULATION THAT THE DECISION OF THE CONTRACTING OFFICER, OR, ON APPEAL, THE DECISION OF THE HEAD OF THE DEPARTMENT, WAS TO BE FINAL AND CONCLUSIVE ON ALL DISPUTES CONCERNING QUESTIONS OF FACT. FURTHERMORE, IT NOW APPEARS THAT SAID BIDDER APPARENTLY HAS AGREED TO ABIDE BY THE TERMS OF SUCH PROVISION AS IT DID NOT TAKE EXCEPTION TO A SIMILAR PROVISION IN A SUBSEQUENT INVITATION FOR THE PURCHASE OF EQUIPMENT ON WHICH IT WAS THE SUCCESSFUL BIDDER. ALSO, IT DOES NOT APPEAR THAT ANY OTHER MANUFACTURER OF THESE HEAVIER, MORE EXPENSIVE AND MORE COMPLEX TYPE OF TRUCKS AND SIMILAR EQUIPMENT HAS TAKEN EXCEPTION EITHER TO THE PROVISION STIPULATING THAT THE DETERMINATION OF THE CONTRACTING OFFICER AND/OR THE HEAD OF THE DEPARTMENT SHALL BE FINAL ON DISPUTES CONCERNING QUESTIONS OF FACT. AND THERE IS NO EVIDENCE OF RECORD DEFINITELY SHOWING THAT IN THE PAST BIDDERS HAVE INCREASED THEIR PRICES BEYOND WHAT THEY OTHERWISE WOULD BE BUT FOR THE INCLUSION OF THE GUARANTY PROVISION IN THE SPECIAL BID CONDITIONS.

HOWEVER, THE PROVISION IN THE SPECIAL BID CONDITIONS REQUIRING THE SUCCESSFUL BIDDER TO POST A BOND EQUAL TO 100 PERCENT OF THE AMOUNT OF THE CONTRACT AS A GUARANTEE THAT THE EQUIPMENT DELIVERED WILL BE IN ACCORDANCE WITH SPECIFICATIONS AND THAT IT WILL PERFORM TO THE SATISFACTION OF THE GOVERNMENT FOR A PERIOD OF ONE YEAR, WOULD APPEAR TO INCREASE UNNECESSARILY THE COST OF EQUIPMENT TO THE GOVERNMENT, SINCE BIDDERS UNDOUBTEDLY INCLUDE THE COST OF SUCH PERFORMANCE BONDS IN THEIR BID PRICES, AND THE MANUFACTURERS OF THE HEAVIER TYPE OF TRUCKS AND OTHER SIMILAR EQUIPMENT PURCHASED BY YOUR DEPARTMENT GENERALLY ARE REPUTABLE CONCERNS WHICH HAVE BEEN IN BUSINESS FOR A NUMBER OF YEARS, AND PRESUMABLY WILL REPLACE ANY DEFECTIVE PARTS PROMPTLY, AS IS EVIDENCED BY THE EXAMPLE CITED IN THE ACTING SECRETARY'S LETTER OF APRIL 13, SUPRA. ACCORDINGLY, IT ORDINARILY WOULD NOT APPEAR TO BE NECESSARY TO HAVE BIDDERS ON THIS TYPE OF EQUIPMENT FURNISH A PERFORMANCE BOND, AT LEAST IN THE FULL AMOUNT OF THE CONTRACT PRICE, UNLESS YOUR DEPARTMENT HAS REASON TO BELIEVE THAT THE SUCCESSFUL BIDDER MAY BE OTHER THAN A REPUTABLE MANUFACTURER AND THAT THE PROTECTION OF THE GOVERNMENT'S INTEREST WOULD SEEM TO REQUIRE SUCH A PERFORMANCE BOND.