B-12466, JUNE 18, 1941, 20 COMP. GEN. 903

B-12466, JUNE 18, 1941, 20 COMP. GEN. 903

CONTRACTS - RESTRICTIVE SPECIFICATIONS - MOTOR VEHICLE REPAIR AND SERVICE A REQUIREMENT IN SPECIFICATIONS COVERING THE REPAIR AND SERVICING OF GOVERNMENT AUTOMOBILES THAT THE CONTRACTOR MAINTAIN A REPAIR AND SERVICE SHOP AUTHORIZED AND APPROVED BY THE MANUFACTURER OF THE PARTICULAR MAKE AUTOMOBILE INVOLVED IS UNDULY RESTRICTIVE OF COMPETITION AND, THEREFORE, UNAUTHORIZED. WHILE SPECIFICATIONS FOR AUTOMOBILE REPAIR AND SERVICE SHOULD BE SO DRAWN AS TO AFFORD OPPORTUNITY OF COMPETITION OF ALL WITHOUT REGARD TO WHETHER THEY MAINTAIN A REPAIR SHOP AUTHORIZED AND APPROVED BY THE MANUFACTURER OF THE PARTICULAR MAKE AUTOMOBILE INVOLVED, A LOW BID NEED NOT BE ACCEPTED IF, AFTER AN IMPARTIAL ADMINISTRATIVE INVESTIGATION, IT IS FOUND THAT BY REASON OF LACK OF EXPERIENCE, ABILITY, OR ADEQUATE EQUIPMENT, THE LOW BIDDER IS NOT QUALIFIED TO PERFORM THE CONTRACT. WHERE OTHER THAN THE LOW BID IS ACCEPTED, THERE MUST BE PRESENTED FACTS-- - NOT MERE ADMINISTRATIVE CONCLUSIONS--- TO SUPPORT THE ACTION TAKEN, AND A BARE STATEMENT THAT A BID WAS REJECTED SOLELY BECAUSE IT DID NOT CONFORM TO A SPECIFICATION WHICH IS IN ITSELF UNAUTHORIZED, OBJECTIONABLE, AND UNDULY RESTRICTIVE OF COMPETITION, DOES NOT CONSTITUTE A JUSTIFICATION FOR THE ACCEPTANCE OF AN OTHERWISE ACCEPTABLE LOW BID.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, JUNE 18, 1941:

THERE HAS BEEN BROUGHT TO MY ATTENTION CONTRACT NO. W-461-ENG-9313, MARCH 1, 1940, WITH LANER-PONTIAC COMPANY, INC., KANSAS CITY, MO., FOR FURNISHING LABOR AND MATERIALS FOR REPAIRING AND SERVICING GOVERNMENT OWNED PONTIAC AUTOMOBILES IN KANSAS CITY, MO., FOR THE PERIOD FROM MARCH 1, 1940, TO FEBRUARY 28, 1941, IN THE AMOUNT OF $1,250 FOR THE ESTIMATED QUANTITY SPECIFIED, TOGETHER WITH CERTAIN CORRESPONDENCE RELATIVE THERETO PASSING BETWEEN THE AUDIT DIVISION OF THIS OFFICE AND THE OFFICE OF THE CHIEF OF ENGINEERS.

THE " SPECIFICATIONS FOR SERVICES TO, REPAIR OF, AND REPAIR PARTS FOR PONTIAC AUTOMOBILES AT KANSAS CITY, MO.' ACCOMPANYING THE INVITATION FOR BIDS AND ATTACHED TO THE CONTRACT, PROVIDED, INSOFAR AS HERE MATERIAL, AS FOLLOWS:

1. * * *

(B) IT IS THE SPIRIT AND INTENT OF THIS CONTRACT TO SECURE REPAIRS AND SERVICES FOR GOVERNMENT-OWNED PONTIAC AUTOMOBILES IN A WORKMANLIKE MANNER AND IN A REASONABLE LENGTH OF TIME FOR EACH REPAIR JOB.

2. COMMENCEMENT, PROSECUTION, AND COMPLETION.--- THIS CONTRACT SHALL BECOME EFFECTIVE MARCH 1, 1940, AND WILL TERMINATE FEBRUARY 28, 1941. TERMINATION PRIOR TO THAT DATE MAY BE EFFECTED AS PROVIDED IN ARTICLE 5 OF THE CONTRACT UPON AN ADMINISTRATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE SERVICES RENDERED BY THE CONTRACTOR ARE NOT SATISFACTORY, ARE NOT BEING PERFORMED WITHIN A REASONABLE LENGTH OF TIME, OR ARE NOT IN ACCORDANCE WITH THE SPIRIT AND INTENT OF THE CONTRACT.

9. LABOR.--- (A) ALL OPERATIONS UNDER THIS CONTRACT WILL BE PERFORMED IN A WORKMANLIKE MANNER BY JOURNEYMAN MECHANICS WHO ARE THOROUGHLY FAMILIAR WITH THE TYPE AND MAKE OF CAR BEING REPAIRED. THE WORK WILL BE ACCEPTED WHEN REPAIRS HAVE BEEN COMPLETED TO THE SATISFACTION OF THE CONTRACTING OFFICER.

(C) IN NO CASE SHALL THE AMOUNT OF LABOR CHARGED FOR ANY REPAIR JOB EXCEED THE NUMBER OF HOURS SHOWN BY THE CURRENT PUBLISHED MANUFACTURERS' FLAT-RATE CHART OR MANUAL OF SERVICE OPERATIONS IN EFFECT ON THE DATE SUCH OPERATIONS WERE PERFORMED. * * *

10. REPAIR PARTS.--- ALL PARTS NECESSARY FOR THE ACCOMPLISHMENT OF REPAIRS AUTHORIZED UNDER THIS CONTRACT WILL BE FURNISHED BY THE CONTRACTOR AT THE PRICE SHOWN IN THE MANUFACTURER'S PUBLISHED PRICE LIST IN EFFECT ON THE DATE OF PURCHASE LESS THE DISCOUNT STATED IN THE CONTRACT. ONLY GENUINE REPAIR PARTS AS SUPPLIED BY THE MAKERS OF THE EQUIPMENT BEING REPAIRED, OR BY THE MAKERS OF THE ACCESSORIES INSTALLED THEREON, WILL BE USED IN THE REPAIR OF ANY VEHICLE UNDER THIS CONTRACT. ALL REPAIR PARTS SHALL BE NEW, UNUSED, AND FREE FROM DEFECTS, EXCEPT THAT EXCHANGE ITEMS MAY, WHEN SO AUTHORIZED BY THE CONTRACTING OFFICER, BE FACTORY RECONDITIONED ITEMS.

1. GUARANTY.--- THE CONTRACTOR SHALL GUARANTEE ALL WORK PERFORMED UNDER THE CONTRACT AGAINST DEFECTIVE WORKMANSHIP FROM THE TIME OF ACCEPTANCE BY THE CONTRACTING OFFICER (WHICH WILL BE THE DATE THE REPAIRED OR SERVICED VEHICLE IS DELIVERED TO THE CONTRACTING OFFICER AT THE CONTRACTOR'S SHOP) FOR A PERIOD OF THIRTY (30) DAYS. ANY WORKMANSHIP PROVING DEFECTIVE WITHIN THAT TIME SHALL BE PROMPTLY CORRECTED BY, OR AT THE EXPENSE OF, THE CONTRACTOR AND TO THE SATISFACTION OF THE CONTRACTING OFFICER.

12. EQUIPMENT AND LIABILITY OF THE CONTRACTOR.--- (A) THE CONTRACTOR SHALL MAINTAIN AN AUTHORIZED PONTIAC REPAIR SHOP OF THE APPROVED TYPE FOR THE REPAIR AND SERVICING OF PONTIAC AUTOMOBILES. HE SHALL HAVE AND MAINTAIN SUITABLE MODERN EQUIPMENT NECESSARY FOR THE SATISFACTORY EXECUTION OF ANY REPAIR JOB WHETHER OF MAJOR OR MINOR PROPORTIONS, ALL GAGES AND CHECKING TOOLS NECESSARY TO MAKE PRECISION ADJUSTMENTS WHEN REQUIRED, AND ALL SPECIAL REPAIR TOOLS NECESSARY TO MAKE PRECISION ADJUSTMENTS WHEN REQUIRED, AND ALL SPECIAL REPAIR TOOLS DESIGNED FOR THE PROPER SERVICING OF THE VEHICLE BEING REPAIRED OR SERVICED. THE CONTRACTOR'S BUILDINGS, EQUIPMENT, FACILITIES, ETC., SHALL BE KEPT CLEAN, SAFE, AND IN FIRST-CLASS WORKING CONDITION TO THE SATISFACTION OF THE CONTRACTING OFFICER.

ARTICLE 5 REFERRED TO IN PARAGRAPH NO. 2 ABOVE WAS THE PARAGRAPH RELATIVE TO DELAYS--- DAMAGES INCORPORATED IN U. S. STANDARD FORM NO. 32--- CONTRACT ( SUPPLIES), APPROVED JUNE 18, 1935.

INVITATIONS TO BID WERE SENT TO SIX DEALERS, THREE BIDS WERE RECEIVED, THE LOW BID OF FOURTEENTH AND BALTIMORE GARAGE IN THE AMOUNT OF $975 WAS REJECTED, AND THE CONTRACT WAS AWARDED TO LANER-PONTIAC COMPANY, INC., IN THE AMOUNT OF $1,250--- AN EXCESS COST TO THE GOVERNMENT OF $275 FOR THE ESTIMATED QUANTITY OF WORK TO BE DONE--- AS THE "LOWEST BIDDER MAINTAINING AN AUTHORIZED PONTIAC REPAIR SHOP AS REQUIRED BY THE SPECIFICATIONS.'

IN CONNECTION WITH THE EXAMINATION OF THE CONTRACT IN THIS OFFICE, THE AUDIT DIVISION UNDER DATE OF JUNE 20, 1940, ADDRESSED A LETTER TO THE CHIEF OF ENGINEERS REQUESTING AN EXPLANATION AS TO THE NECESSITY FOR SPECIFYING AN AUTHORIZED PONTIAC REPAIR SHOP IN THE ADVERTISED SPECIFICATIONS, TOGETHER WITH A STATEMENT AS TO WHY IT WOULD NOT HAVE BEEN TO THE INTEREST OF THE GOVERNMENT TO HAVE ACCEPTED THE LOW BID, CITING 14 COMP. GEN. 859. IN REPLY THERE WAS TRANSMITTED BY FOURTH INDORSEMENT OF AUGUST 10, 1940, FROM THE OFFICE OF THE CHIEF OF ENGINEERS, A REPORT OF THE DISTRICT ENGINEER, KANSAS CITY, MO., IN SECOND INDORSEMENT OF JULY 30, 1940, STATING THAT PREVIOUS EXPERIENCE OF THE KANSAS CITY ENGINEER OFFICE WITH CONTRACTORS WHO DID NOT OPERATE AUTHORIZED SHOPS HAD BEEN UNSATISFACTORY, DUE TO LACK OF ABILITY OF REPAIRMEN OR LACK OF EQUIPMENT, SETTING FORTH CERTAIN ADVANTAGES CONSIDERED TO BE DERIVED FROM CONTRACTING WITH "AUTHORIZED" REPAIR SHOPS, EXPLAINING THAT THE LOW BID WOULD NOT HAVE BEEN ACCEPTABLE FOR REASONS THEREIN ASSIGNED AND EXPRESSING THE BELIEF THAT THE REQUIREMENT THAT THE CONTRACTOR MAINTAIN AN AUTHORIZED REPAIR SHOP OF THE APPROVED TYPE WAS NOT UNDULY RESTRICTIVE OF COMPETITION FOR THE REASON THAT IN THE CASE IN QUESTION THE TWO BIDDERS MAINTAINING AUTHORIZED SHOPS BID DIFFERENT PRICES FOR SKILLED MECHANICS' LABOR AND DIFFERENT CASH DISCOUNTS FOR PROMPT PAYMENT, AND THAT "THERE ARE AT LEAST FIVE SUCH SHOPS IN GREATER KANSAS CITY.'

BY LETTER DATED JANUARY 15, 1941, THE AUDIT DIVISION OF THIS OFFICE NOTIFIED THE CHIEF OF ENGINEERS IN PART AS FOLLOWS:

PLEASE BE ADVISED THAT WHILE THIS OFFICE WILL NOT FURTHER QUESTION OTHERWISE PROPER PAYMENTS UNDER THE CURRENT CONTRACT, THE INCLUSION IN SPECIFICATIONS COVERING THE REPAIR AND SERVICING OF AUTOMOBILES FOR THE GOVERNMENT OF A REQUIREMENT THAT THE CONTRACTOR MUST MAINTAIN AN "AUTHORIZED" REPAIR SHOP OF AN "APPROVED TYPE FOR THE REPAIR AND SERVICING OF" ANY PARTICULAR MAKE OF VEHICLE IS UNAUTHORIZED AND SHOULD BE OMITTED FROM ALL SUCH SIMILAR SPECIFICATIONS IN THE FUTURE. IN THIS CONNECTION ATTENTION IS INVITED TO 14 COMP. GEN. 859; 15 ID. 1023, AND A-67891, OCTOBER 21, 1936. THAT LETTER WAS REFERRED BY THE OFFICE OF THE CHIEF OF ENGINEERS TO THE DIVISION ENGINEER, MISSOURI RIVER DIVISION, KANSAS CITY, MO., FOR COMMENT, AND BY FIFTH INDORSEMENT OF MARCH 10, 1941, THERE WAS TRANSMITTED TO HIS OFFICE A THIRD INDORSEMENT OF THE DISTRICT ENGINEER, KANSAS CITY, MO., DATED FEBRUARY 19, 1941, IN PART AS FOLLOWS:

2. THE POLICY OF INCLUDING THE AUTHORIZED SHOP REQUIREMENTS IN SPECIFICATIONS FOR AUTOMOBILE REPAIR WORK WAS ADOPTED BY THIS OFFICE ONLY AFTER IT WAS FOUND BY ACTUAL EXPERIENCE THAT THIS WAS THE ONLY WAY IN WHICH THE GOVERNMENT COULD MAKE CERTAIN OF OBTAINING SATISFACTORY WORK AT A REASONABLE COST. PRIOR TO THE INCLUSION OF THIS REQUIREMENT IN SPECIFICATIONS, RELIANCE HAD BEEN PLACED IN THE USUAL PROVISION OF THE SPECIFICATIONS REQUIRING THE CONTRACTOR TO GUARANTEE HIS USUAL PROVISION OF THE SPECIFICATIONS REQUIRING THE CONTRACTOR TO GUARANTEE HIS WORK, AND IN A PROVISION PROHIBITING THE CONTRACTOR FROM CHARGING MORE TIME TO ANY REPAIR JOB THAN THE NUMBER OF HOURS SHOWN BY THE CURRENT PUBLISHED MANUFACTURER'S FLAT-RATE CHART OR MANUAL OF SERVICE OPERATIONS IN EFFECT ON THE DATE THE WORK WAS PERFORMED. HOWEVER, THESE PROVISIONS ALONE WERE FOUND TO BE INSUFFICIENT TO FULLY PROTECT THE GOVERNMENT AGAINST LOSS DUE TO POOR WORKMANSHIP, AS THEY DID NOT PROVIDE PROTECTION AGAINST LOSS ARISING FROM THE REPEATED TYING UP OF VEHICLES DUE TO INEFFICIENT REPAIR WORK. SUCH LOSS OF OPERATING TIME OF GOVERNMENT VEHICLES, DUE TO IMPROPER REPAIRS, WAS ACTUALLY EXPERIENCED UNDER SEVERAL CONTRACTS FOR REPAIR WORK ENTERED INTO WITH FIRMS NOT MAINTAINING AUTHORIZED REPAIR SHOPS.

3. IT IS FURTHER SUBMITTED THAT INSPECTION BY THE GOVERNMENT PRIOR TO AWARD OF CONTRACT WILL NOT, IN ALL CASES, ELIMINATE DIFFICULTIES OF THE TYPE REFERRED TO IN PARAGRAPH 2, ABOVE. WHILE SUCH INSPECTION WILL REVEAL, IN A GENERAL WAY, THE EXTENT OF THE PROPOSED CONTRACTOR'S EQUIPMENT AND EXPERIENCE, IT MAY NOT BE POSSIBLE FOR GOVERNMENT PERSONNEL TO DETERMINE WHETHER SUCH EQUIPMENT IS SUITABLE FOR PERFORMING HIGHLY SPECIALIZED OPERATIONS ON A PARTICULAR MAKE OF AUTOMOBILE OR WHETHER THE PERSONNEL OF THE PROPOSED CONTRACTOR HAS HAD SUFFICIENT EXPERIENCE IN THE VARIOUS KINDS OF SPECIALIZED REPAIR WORK WHICH MAY BE REQUIRED UNDER THE CONTRACT.

4. IT IS GENERALLY RECOGNIZED THAT THE CONTINUAL DEVELOPMENT AND IMPROVEMENT OF MODERN AUTOMOTIVE EQUIPMENT HAS RESULTED IN AN EVER GROWING NEED FOR THE PERFORMANCE OF HIGHLY SPECIALIZED ADJUSTMENTS AND REPAIR SERVICES WITH SPECIAL TOOLS DESIGNED FOR USE ON THE PARTICULAR MAKE OF VEHICLE CONCERNED. THIS OFFICE IS THEREFORE OF THE OPINION THAT IT WILL BECOME INCREASINGLY IMPORTANT IN THE FUTURE THAT REPAIR SERVICES BE PROCURED FROM AN AUTHORIZED REPAIR SHOP IN ORDER TO ASSURE THAT THE SERVICES WILL BE PERFORMED WITH TOOLS AND EQUIPMENT SPECIFICALLY DESIGNED FOR THE JOB AT HAND AND IN THE MANNER PRESCRIBED BY THE MANUFACTURER OF THE VEHICLE BEING REPAIRED. IN THIS CONNECTION, ATTENTION IS INVITED TO THE FACT THAT NOT ONLY IS AN AUTHORIZED REPAIR SHOP REGULARLY SUPPLIED BY THE MANUFACTURER WITH SHOP MANUALS, MONTHLY SERVICE BULLETINS, AND COMPLETE, UP-TO DATE SCHEDULES OF ALL SERVICE OPERATIONS, BUT ALSO ITS MECHANICS ARE PERIODICALLY GIVEN TRAINING UNDER FACTORY PERSONNEL IN REGULAR SERVICE SCHOOLS AND UNDER ACTUAL SERVICING CONDITIONS.

5. AN ADDITIONAL ADVANTAGE ACCRUING TO THE GOVERNMENT THROUGH THE REPAIR OF AUTOMOBILES AT AUTHORIZED REPAIR SHOPS, AND ONE WHICH ALSO MAY ASSUME GREATER IMPORTANCE IN THE FUTURE, CONCERNS THE MANUFACTURERS' WARRANTY OF NEW AUTOMOTIVE EQUIPMENT. INCLOSED IS A COPY OF A RECENT BULLETIN PERTAINING TO WARRANTY ADJUSTMENTS ISSUED BY THE PONTIAC MOTOR DIVISION, GENERAL MOTORS SALES RP., PONTIAC, MICHIGAN, WHICH PROVIDES, IN ADDITION TO ADJUSTMENTS UNDER THE STANDARD 90-DAY OR 4,000-MILE WARRANTY, FOR REPLACEMENT OF DEFECTIVE PARTS WITHIN TWELVE MONTHS AFTER DELIVERY OF THE EQUIPMENT, OR BEFORE IT HAS BEEN DRIVEN 12,000 MILES, WHICHEVER EVENT SHALL OCCUR FIRST. THIS WARRANTY APPLIES TO 1941 PASSENGER CARS, AND ALSO, IN CERTAIN RESPECTS, TO 1940 MODELS. * * * IT WILL BE NOTED FROM THE INCLOSED BULLETIN THAT THE MANUFACTURERS' WARRANTY "SHALL NOT APPLY TO ANY VEHICLE WHICH SHALL HAVE BEEN REPAIRED OR ALTERED OUTSIDE OF AN AUTHORIZED PONTIAC SERVICE STATION IN ANY WAY SO AS IN THE JUDGMENT OR THE MANUFACTURER TO AFFECT ITS STABILITY AND RELIABILITY, NOR WHICH HAS BEEN SUBJECT TO MISUSE, NEGLIGENCE OR ACCIDENT.'

6. IT WAS POINTED OUT IN THE 2D INDORSEMENT OF THIS OFFICE DATED JULY 30, 1940, REFERRED TO IN THE BASIC COMMUNICATION, THAT THE AUTHORIZED SHOP REQUIREMENT DOES NOT ELIMINATE COMPETITIVE BIDDING. AS FURTHER EVIDENCE OF THIS FACT, THERE IS INCLOSED A COPY OF AN ABSTRACT OF BIDS OPENED IN THIS OFFICE ON FEBRUARY 3, 1941, UNDER INVITATION NO. 461-41-155, FOR FURNISHING LABOR AND REPAIR PARTS FOR REPAIR OF CHEVROLET AUTOMOBILES AND TRUCKS AT KANSAS CITY, MISSOURI. THE INVITATION FOR BIDS IN THIS CASE, WHICH WAS ISSUED PRIOR TO RECEIPT OF THE 2D INDORSEMENT HEREON, INCLUDES THE AUTHORIZED SHOP REQUIREMENT, AND IT WILL BE NOTED THAT THREE BIDS, EACH FOR A DIFFERENT TOTAL AMOUNT AND EACH CONTAINING A DIFFERENT HOURLY RATE FOR LABOR, WERE RECEIVED.

7. IT IS BELIEVED THAT THE AUTHORIZED SHOP REQUIREMENT IS NO MORE RESTRICTIVE OF COMPETITION THAN A TECHNICAL SPECIFICATION OF THE TYPE COMMONLY USED IN INVITATIONS FOR BIDS ON MATERIALS AND SUPPLIES WHEREIN THE ARTICLE TO BE PURCHASED IS LIMITED TO A SPECIFIC TYPE AND TO A MINIMUM STANDARD OF QUALITY AND WORKMANSHIP REQUIRED TO MEET A PARTICULAR NEED OF THE GOVERNMENT. THE COMPTROLLER GENERAL HAS REPEATEDLY HELD THAT SPECIFICATIONS MAY BE WRITTEN SO AS TO OBTAIN FOR THE GOVERNMENT MATERIALS, SUPPLIES, AND SERVICES NEEDED FOR ITS EFFICIENT OPERATION.

8. WITH REFERENCE TO THE DECISIONS OF THE COMPTROLLER GENERAL MENTIONED IN THE BASIC LETTER, IT IS BELIEVED THAT THE CASES COVERED IN 14 COMP. GEN. 859 AND 15 COMP. GEN. 1023 ARE NOT PARALLEL TO THE CONTRACT HERE IN QUESTION. THE DECISION IN 14 COMP. GEN. 859 HAD REFERENCE TO A METHOD OF PROCUREMENT WITHOUT ADVERTISING, AND IN 15 COMP. GEN. 1023 THE APPROVAL OF FACILITIES OF BIDDERS BY THE PURCHASING AGENCY PRIOR TO THE OPENING OF BIDS WAS THE SUBJECT. IN THE CASE OF THIS OFFICE, ADVERTISING REQUIREMENTS WERE MET, AND ALL BIDDERS MAINTAINING AUTHORIZED REPAIR SHOPS RECEIVED CONSIDERATION WITHOUT APPROVAL OF THEIR FACILITIES PRIOR TO THE OPENING OF BIDS. NO COMMENT CAN BE MADE REGARDING THE APPLICABILITY OF COMP. GEN. A-67891, OCTOBER 21, 1936, TO THE INSTANT CASE, AS THIS OFFICE DOES NOT HAVE A COPY OF THAT DECISION. 9. PENDING DECISION ON THE MATTER IN QUESTION, INFORMATION IS REQUESTED AS TO WHAT ACTION SHOULD BE TAKEN WITH RESPECT TO AWARD ON THE INVITATION REFERRED TO IN PARAGRAPH 6, ABOVE, AS WELL AS TO AWARD ON A SIMILAR INVITATION (ALSO INCLUDING THE AUTHORIZED SHOP REQUIREMENT) COVERING REPAIRS TO PONTIAC AUTOMOBILES, UNDER WHICH BIDS WERE OPENED IN THIS OFFICE ON FEBRUARY 4, 1941. IN THE EVENT IT BECOMES NECESSARY TO READVERTISE THESE PROCUREMENTS WITH THE AUTHORIZED SHOP REQUIREMENT OMITTED, IT IS DESIRED TO ISSUE THE REVISED INVITATIONS FOR BIDS AT THE EARLIEST POSSIBLE DATE, AS PRESENT CONTRACTS IN BOTH INSTANCES EXPIRE FEBRUARY 28, 1941.

THE SAID FIFTH INDORSEMENT OF MARCH 10, 1941, TRANSMITTING THE ABOVE TO THIS OFFICE IS AS FOLLOWS:

1. INVITING ATTENTION TO THE COMMENTS OF THE DISTRICT ENGINEER IN THE THIRD INDORSEMENT HEREON IN RESPONSE TO THE BASIC LETTER. THIS OFFICE CONCURS IN CONCLUSIONS OF THE CONTRACTING OFFICER.

2. IT IS RECOMMENDED THAT NO FURTHER OBJECTION BE TAKEN TO THE INCLUSION OF A PROVISION SIMILAR TO THAT UNDER CONSIDERATION IN THE BASIC LETTER IN FUTURE INVITATIONS TO BID ON THE REPAIR OF MACHINES. THE MANUFACTURERS OF AUTOMOBILES HAVE ESTABLISHED AUTHORIZED SERVICE STATIONS OPERATED ON A HIGH STANDARD OF QUALITY SO THAT THEIR PRODUCTS MAY RENDER THE MOST EFFICIENT AND ECONOMICAL PERFORMANCE TO THE END THAT OWNERS WILL SECURE A PROPER RETURN FOR THEIR INVESTMENT AND WHEN IN NEED OF OTHER SIMILAR AUTOMOTIVE EQUIPMENT WILL BE INCLINED TO LOOK WITH FAVOR UPON THE SAME MAKE OF CARS. ANYONE WHO IS ACCUSTOMED TO TAKING A MODERN AUTOMOBILE TO THE USUAL RUN OF ,GENERAL" AUTOMOBILE REPAIR SHOPS (USUALLY OPERATED FROM AN ALLEY LOCATION AND WITH LITTLE OR NOT MODERN SHOP EQUIPMENT) WILL BE IMPRESSED WITH THE EFFICIENT AND THOROUGH (AND IN QUITE LESS TIME, SELDOM REQUIRING OTHER VISITS FOR "ADJUSTMENTS") MANNER THE JOB IS DONE AT A FACTORY AUTHORIZED REPAIR SHOP. THE DIFFERENCE IS DUE IN PART TO SPECIAL INSTRUCTIONS AND EQUIPMENT FURNISHED TO, OR REQUIRED TO BE INSTALLED IN AUTHORIZED SERVICE STATIONS BY THE MANUFACTURER OF THE CAR TO BE REPAIRED. OPERATORS OF AUTHORIZED SERVICE STATIONS ARE USUALLY FACTORY SALES REPRESENTATIVES, WHICH IS FURTHER EVIDENCE OF THEIR INTEREST IN THE CORRECT OPERATION OF THE PARTICULAR CAR. IT SHOULD BE POINTED OUT THAT REPEATED VISITS TO REPAIR SHOPS FOR FURTHER ADJUSTMENTS AFTER A JOB HAS BEEN DONE ARE THE MOST COSTLY ITEM OF THE REPAIR JOB. SUCH TRIPS TIE UP THE CARS FOR ADDITIONAL PERIODS OF TIME TOGETHER WITH GOVERNMENT OPERATORS AND OTHER GOVERNMENT PERSONNEL IN CHARGE OF SUCH MATTERS.

3. THE DISTRICT ENGINEER, KANSAS CITY, MISSOURI, HAS BEEN INSTRUCTED TO PROCEED WITH THE AWARD UNDER THE BIDS RECEIVED FEBRUARY 3, 1941 (INVITATION NO. 461-41-155, SEE PARAGRAPHS 6 AND 9 OF THE THIRD INDORSEMENT) IN VIEW OF THE FACT THAT THE INVITATION WAS ISSUED PRIOR TO RECEIPT OF BASIC LETTER AND NEED FOR SUCH A CONTRACT IS ESSENTIAL, PARTICULARLY IN VIEW OF THE ADDITIONAL DEFENSE WORK NOW ASSIGNED TO THE CORPS OF ENGINEERS.

IT HAS BEEN HELD CONSISTENTLY AND REPEATEDLY BY THE COURTS AND THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT THE PROVISIONS OF SECTION 3709, REVISED STATUTES, CONTEMPLATE FREE AND OPEN COMPETITION UPON THE ACTUAL NEEDS--- WHAT IS REQUIRED, NOT WHAT MAY BE DESIRED--- OF THE GOVERNMENT, WITH OPPORTUNITY FOR ALL QUALIFIED PERSONS TO COMPETE AND WITH ACCEPTANCE OF THE LOWEST RESPONSIBLE BID, IN ORDER THAT EACH QUALIFIED CITIZEN ASPIRING TO GOVERNMENT BUSINESS MAY BE GIVEN THE OPPORTUNITY FOR A BARGAIN, AND THE GOVERNMENT MAY ENJOY THE BENEFITS WHICH FLOW FROM OPEN COMPETITION TO THE END THAT ITS NEEDS MAY BE SUPPLIED AT THE MOST REASONABLE PRICES AVAILABLE. THE RULE IS SO WELL RECOGNIZED THAT IT NEEDS NO CITATION, NOR SHOULD IT REQUIRE REPETITION.

THE ACTUAL NEED OF THE ENGINEER CORPS IN THIS CASE WAS THE FURNISHING OF ALL LABOR, MATERIALS, AND REPAIR PARTS, AND PERFORMING ALL WORK NECESSARY FOR THE REPAIRING AND SERVICING OF GOVERNMENT-OWNED PONTIAC AUTOMOBILES AT KANSAS CITY, MO., IN A WORKMANLIKE MANNER AND IN A REASONABLE LENGTH OF TIME FOR EACH REPAIR JOB. THE SPECIFICATIONS SO REQUIRED WHILE PARAGRAPH 2 SPECIFICALLY STIPULATED THAT THE CONTRACT COULD BE TERMINATED AT ANY TIME PRIOR TO ITS EXPIRATION DATE UPON ADMINISTRATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE SERVICES RENDERED BY THE CONTRACTOR WERE NOT SATISFACTORY, WERE NOT BEING PERFORMED IN A REASONABLE LENGTH OF TIME, OR WERE NOT IN ACCORD WITH THE SPIRIT AND INTENT OF THE CONTRACT, AND ARTICLE 5 OF THE CONTRACT MADE PROVISION FOR THE PROTECTION OF THE GOVERNMENT FROM A MONETARY STANDPOINT IN THE EVENT OF SUCH TERMINATION. EVERY PERSON, FIRM, CORPORATION, OR CONCERN EQUIPPED AND QUALIFIED TO PERFORM THE WORK AND RENDER THE SERVICE AS PRESCRIBED AND REQUIRED BY THE INVITATION FOR BIDS WAS ENTITLED TO AN OPPORTUNITY TO COMPETE FOR THE BUSINESS IN HAND, IF OTHERWISE ACCEPTABLE, IRRESPECTIVE OF ANY CONTRACTUAL ASSOCIATION WITH THE MANUFACTURER OF THE PONTIAC AUTOMOBILE OR THE STAMP OF APPROVAL AND AUTHORIZATION OF SAID MANUFACTURER.

IF IT BE CONCEDED FOR ARGUMENT THAT SOME ADVANTAGES MAY FLOW FROM CONTRACTING ONLY WITH ,AUTHORIZED" PONTIAC REPAIR SHOPS, AND THAT SUCH A PRACTICE MIGHT SERVE TO RELIEVE THE CONTRACTING OFFICER IN MATERIAL MEASURE OF IRKSOME INVESTIGATION AND ONEROUS RESPONSIBILITY IN THE MATTER, SUCH CONSIDERATIONS ARE NOT SUFFICIENT TO JUSTIFY DISREGARD OF STATUTORY REQUIREMENTS AND ESTABLISHED PRINCIPLES IN CONTRACTING FOR THE NEEDS OF THE UNITED STATES. NO DOUBT THERE ARE THROUGHOUT THE COUNTRY MANY "GENERAL" AUTOMOBILE REPAIR SHOPS (USUALLY OPERATED FROM AN ALLEY LOCATION AND WITH LITTLE OR NO MODERN SHOP EQUIPMENT) AS SUGGESTED IN THE FIFTH INDORSEMENT, SUPRA, AND THE GOVERNMENT WOULD NOT BE REQUIRED TO CONTRACT ITS REPAIR AND MAINTENANCE WORK TO SUCH SHOPS OVER AN EXTENDED PERIOD OF TIME FOR THE SOLE REASON THAT THE BID OF SUCH A SHOP WAS LOW. ON THE OTHER HAND, IT IS EQUALLY TRUE THAT THERE ARE MANY AUTOMOBILE REPAIR SHOPS MAINTAINING COMPLETE UP-TO-DATE EQUIPMENT AND EMPLOYING QUALIFIED AUTOMOBILE MECHANICS CAPABLE OF PERFORMING SATISFACTORY REPAIR WORK AND RENDERING SATISFACTORY SERVICE UPON PRACTICALLY ANY ORDINARY MAKE OR MODEL OF AUTOMOBILE, THE AVERAGE MOTOR VEHICLE NOT BEING OF SUCH COMPLICATED, INTRICATE OF DISTINCTIVE MECHANISM AS TO REQUIRE THE SERVICES OF A SEPARATELY TRAINED "SPECIALIST" TO PUT AND KEEP IT IN ENTIRELY SATISFACTORY OPERATING CONDITION. IT IS NOT UNDERSTOOD THAT THE PONTIAC AUTOMOBILE IS ANY EXCEPTION TO THIS RULE, AND CERTAINLY IT WOULD APPEAR REASONABLE TO ASSUME THAT IN A COMMUNITY SUCH AS KANSAS CITY, MO., WITH A METROPOLITAN AREA POPULATION OF APPROXIMATELY 400,000 OR MORE, AS WELL AS IN OTHER SIMILAR COMMUNITIES THROUGHOUT THE UNITED STATES, THERE ARE NUMEROUS UP-TO-DATE GARAGES AND AUTOMOBILE REPAIR SHOPS MODERNLY EQUIPPED AND ADEQUATELY MANNED TO DO SATISFACTORY WORK UPON THE PONTIAC OR ANY OTHER STANDARD MAKE OF AUTOMOBILE, NOTWITHSTANDING SUCH SHOPS ARE NOT "AUTHORIZED" PONTIAC REPAIR SHOPS "OF THE APPROVED TYPE FOR THE REPAIR AND SERVICING OF PONTIAC AUTOMOBILES"--- OR ANY OTHER PARTICULAR MAKE OF VEHICLE--- AND THERE WOULD APPEAR TO BE NO AUTHORITY IN LAW AND NO BASIS IN REASON FOR AN ADMINISTRATIVE UNDERTAKING TO SHUT THE DOOR OF COMPETITION UPON SUCH CONCERNS MERELY BECAUSE THEY DO NOT BEAR THE SEAL OF APPROVAL OF A PARTICULAR AUTOMOBILE MANUFACTURER.

IN DECISION OF MAY 29, 1935, 14 COMP. GEN. 859, THERE WAS CONSIDERED A PROPOSAL OF THE THEN SECRETARY OF WAR TO ENTER INTO SEPARATE AGREEMENTS WITH THE MANUFACTURERS OF NUMEROUS MAKES OF VEHICLES IN USE IN THE CIVILIAN CONSERVATION CORPS WHEREBY SAID MANUFACTURERS WOULD UNDERTAKE TO FURNISH REPAIR PARTS AT STIPULATED PRICES, TO FIX LABOR PRICES TO BE CHARGED BY THEIR AUTHORIZED REPRESENTATIVES IN A GIVEN COMMUNITY, AND TO DETERMINE THE APPROXIMATE TIME TO BE REQUIRED FOR ANY OPERATION OF REPAIR OR RENOVATION ON THE AUTOMOBILES MANUFACTURED BY THEM. THE CONCLUSION WAS REACHED THAT THERE WAS NOT AUTHORITY FOR SUCH AGREEMENTS AND IT WAS STATED THAT---

IT IS MANIFEST THAT SUCH CONTRACTS WOULD GIVE TO THE AUTHORIZED REPRESENTATIVES OF THE MANUFACTURERS A MONOPOLY ON THE REPAIR AND SUPPLY BUSINESS FOR THE POSSIBLY THOUSANDS OF AUTOMOBILES IN USE BY THE CIVILIAN CONSERVATION CORPS, CUTTING OFF ALL OTHERS--- NO MATTER HOW READY, ABLE, AND RESPONSIBLE--- FROM ANY OPPORTUNITY TO COMPETE FOR THIS GOVERNMENT BUSINESS, AND AT THE SAME TIME DEPRIVE THE GOVERNMENT OF THE BENEFITS FLOWING FROM FREE COMPETITION. * * *

THE SITUATION HERE IS CLOSELY ANALOGOUS TO THE ONE THERE CONSIDERED, FOR WHILE THERE MAY BE A SEMBLANCE OF COMPETITION BETWEEN AUTHORIZED REPRESENTATIVES OF A PARTICULAR MANUFACTURER IN COMMUNITIES WHERE THERE ARE MORE THAN ONE SUCH AUTHORIZED REPRESENTATIVE, THE ULTIMATE RESULT WOULD BE THAT SAID REPRESENTATIVES AS BETWEEN THEMSELVES WOULD HAVE A MONOPOLY ON THE REPAIR AND SUPPLY BUSINESS FOR GOVERNMENT-OWNED AUTOMOBILES OF THE PARTICULAR MAKE INVOLVED, TO THE EXCLUSION OF AND WITHOUT FEAR OR POSSIBILITY OF COMPETITION FROM ANY OTHERS, HOWEVER READY, ABLE AND RESPONSIBLE. IT NEED HARDLY BE SUGGESTED THAT SUCH A PRACTICE IMMEDIATELY OPENS THE DOOR TO COLLUSIVE BIDDING AND POSSIBLE FRAUD UPON THE GOVERNMENT. OF COURSE, IN A COMMUNITY WHERE A MANUFACTURER HAS ONLY ONE AUTHORIZED REPRESENTATIVE, SUCH A STIPULATION IN THE SPECIFICATIONS WOULD NECESSARILY GIVE SUCH SINGLE REPRESENTATIVE AN UNCHALLENGED MONOPOLY OF THE BUSINESS.

IN A DECISION OF MAY 23, 1936, 15 COMP. GEN. 1023, THERE WAS CONSIDERED A PROPOSAL OF THE SECRETARY OF COMMERCE TO INCLUDE IN ADVERTISEMENT FOR BIDS FOR THE OVERHAUL OF AIRCRAFT ENGINES FOR THE BUREAU OF AIR COMMERCE A PROVISION THAT "ONLY THE BIDS OF THE ORIGINAL MANUFACTURER OF THE ENGINE OR REPAIR STATIONS APPROVED BY THE BUREAU OF AIR COMMERCE FOR ENGINE REPAIRS AND OVERHAUL AND WHICH HAVE AMPLE EQUIPMENT AND EXPERIENCE FOR THE PURPOSE WILL BE CONSIDERED.' IT WAS THERE STATED---

THE PURPOSES AND PROVISIONS OF SECTION 3709, REVISED STATUTES, REQUIRE THAT SPECIFICATIONS BE SO DRAWN THAT THERE MAY BE FREE AND OPEN COMPETITION AMONG QUALIFIED PERSONS AND CONCERNS WHO DESIRE TO BID FOR GOVERNMENT BUSINESS. THE INCLUSION IN SPECIFICATIONS OF THE PROVISION SUGGESTED BY YOU WOULD RESULT IN MAKING APPROVAL BY THE BUREAU OF AIR COMMERCE PRIOR TO THE SUBMISSION OF BIDS A CONDITION PRECEDENT TO THE RIGHT OF A CITIZEN TO MAKE A PROPOSAL FOR ENGINE REPAIRS AND OVERHAUL ON AIRPLANES, NO MATTER HOW AMPLE MAY BE THE EQUIPMENT AND HOW BROAD THE EXPERIENCE AND ABILITY OF THE BIDDER TO PERFORM THE SERVICE REQUIRED. IS, OF COURSE, THE DUTY OF THE ADMINISTRATIVE DEPARTMENT OR INDEPENDENT AGENCY INVOLVED TO INVESTIGATE THE RESPONSIBILITY AND ABILITY OF A LOW BIDDER BEFORE AWARD OF A CONTRACT, AND IF THE FACTS JUSTIFY DETERMINATION THAT, OWING TO LACK OF ABILITY, EXPERIENCE, FACILITIES, OR FINANCIAL RESOURCES OR BACKING, SUCH LOW BIDDER IS NOT COMPETENT TO PERFORM THE WORK INVOLVED, THE UNITED STATES IS NOT REQUIRED TO ACCEPT THE LOWEST BID RECEIVED. HOWEVER, THERE APPEARS NO STATUTORY AUTHORITY FOR LIMITING COMPETITION TO BIDDERS WHO HAVE PREVIOUSLY RECEIVED THE APPROVAL OF THE BUREAU OF AIR COMMERCE IN ANY OR ALL OF THESE RESPECTS. * * *

THE INCLUSION OF THE PROVISION HERE UNDER CONSIDERATION THAT "THE CONTRACTOR SHALL MAINTAIN AN AUTHORIZED PONTIAC (OR OTHER) REPAIR SHOP OF THE APPROVED TYPE FOR THE REPAIR AND SERVICING OF PONTIAC (OR OTHER) AUTOMOBILES" IS EVEN MORE OBJECTIONABLE THAN THE STIPULATION THERE PROPOSED, FOR THAT STIPULATION AT LEAST CONTEMPLATED PREVIOUS INSPECTION AND DETERMINATION BY AN AUTHORIZED, QUALIFIED AND PRESUMABLY COMPETENT REPRESENTATIVE OF THE BUREAU OF AIR COMMERCE AS TO THE ABILITY, EQUIPMENT, EXPERIENCE, AND FACILITIES OF A BIDDER, WHILE THE SUBJECT PROVISION REQUIRES NO SUCH DETERMINATION BY ANY REPRESENTATIVE OF THE GOVERNMENT, THE CONDITION PRECEDENT TO THE RIGHT TO BID BEING THE MAINTENANCE OF A REPAIR AND SERVICE SHOP AUTHORIZED AND APPROVED BY THE MANUFACTURER OF THE VEHICLE INVOLVED, THUS LEAVING TO THE MANUFACTURER OF THE VEHICLE ITSELF THE DETERMINATION AS TO WHAT PERSONS OR CONCERNS ARE TO BE ACCEPTED AS ELIGIBLE BIDDERS FOR GOVERNMENT BUSINESS OF THE KIND INVOLVED.

AS TO THE SUGGESTION THAT THE "MANUFACTURER'S WARRANTY" OF NEW AUTOMOTIVE EQUIPMENT RENDERS REPAIR OF AUTOMOBILES IN AUTHORIZED REPAIR SHOPS IMPORTANT AND THAT IT "MAY ASSUME GREATER IMPORTANCE IN THE FUTURE," IT IS TO BE OBSERVED THAT THE STANDARD 90-DAY OR 4,000-MILE WARRANTY, WITH THE PROVISION SET OUT IN THE LAST SENTENCE OF PARAGRAPH 5 IN THE ABOVE-QUOTED REPORT THAT IT SHALL NOT APPLY TO VEHICLES WHICH SHALL HAVE BEEN REPAIRED OR ALTERED OUTSIDE OF AN AUTHORIZED PONTIAC SERVICE STATION "IN ANY WAY SO AS IN THE JUDGMENT OF THE MANUFACTURER TO AFFECT ITS STABILITY AND RELIABILITY" HAS BEEN USED BY THE AUTOMOTIVE INDUSTRY SINCE NOVEMBER 1931, BUT HAS NOT HERETOFORE BEEN INVOKED OR SUGGESTED AS REQUIRING OR JUSTIFYING PATRONAGE OF AUTHORIZED REPAIR SHOPS, ALONE, TO THE EXCLUSION OF ALL OTHERS FROM COMPETITION FOR AUTOMOBILE SERVICE AND REPAIR WORK FOR THE GOVERNMENT. AS STATED ABOVE, IN THE PRESENT INSTANCE INVITATIONS TO BID WERE SENT TO SIX DEALERS AND THREE BIDS WERE RECEIVED, ONLY TWO OF WHICH MET THE "AUTHORIZED" REPAIR SHOP REQUIREMENT. IT WAS ADMINISTRATIVELY STATED THAT THERE WERE FIVE AUTHORIZED AND APPROVED PONTIAC REPAIR SHOPS IN " GREATER KANSAS CITY.' IT APPEARS HARDLY REASONABLE TO CONTEND THAT THERE ARE NO MORE THAN FIVE CONCERNS IN KANSAS CITY EQUIPPED AND QUALIFIED TO REPAIR AND SERVICE PONTIAC AUTOMOBILES, EVEN THOUGH OTHERS THAN THE SELECT FEW MAY NOT BEAR THE STAMP OF APPROVAL OF THE MANUFACTURER.

AS POINTED OUT IN FIFTH INDORSEMENT ABOVE, OPERATORS OF AUTHORIZED SERVICE STATIONS USUALLY ARE FACTORY SALES REPRESENTATIVES FOR THE MAKE OF CAR THEY ARE "AUTHORIZED" TO REPAIR, AND IT NATURALLY IS TO THE COMMON INTEREST OF BOTH DEALER AND MANUFACTURER--- THE LATTER OF WHOM USUALLY MANUFACTURES MOST IF NOT ALL REPAIR PARTS FOR THE VEHICLE, AND FREQUENTLY THE TOOLS FOR USE THEREWITH--- THAT THERE BE OFFERED TO THE PURCHASING PUBLIC SUCH INDUCEMENTS AS MAY BE POSSIBLE TO PATRONIZE GARAGES AND REPAIR SHOPS OPERATED BY THE SALES REPRESENTATIVES, FOR THE MORE THE PATRONAGE, THE MORE THE PROFIT ALIKE TO MANUFACTURER AND DEALER AND, AS SUGGESTED IN FIFTH INDORSEMENT ABOVE, THE PATRONS OF THE REPAIR SHOP "WHEN IN NEED OF OTHER SIMILAR AUTOMOTIVE EQUIPMENT WILL BE INCLINED TO LOOK WITH FAVOR UPON THE SAME MAKE OF CARS.' BUT SUCH INDUCEMENTS ARE PRIMARILY IN THE INTEREST OF THE MANUFACTURER AND THE DEALER AND DESIGNED TO STRENGTHEN THEIR HOLD UPON THE PUBLIC, AND ARE NOT FOR CONTROLLING CONSIDERATION IN ADVERTISING OR AWARDING CONTRACTS FOR SERVICE AND REPAIRS ON GOVERNMENT- OWNED VEHICLES.

REFERRING TO THE OPINION EXPRESSED THAT THE PROVISION IN QUESTION "DOES NOT ELIMINATE COMPETITIVE BIDDING" BECAUSE TWO BIDS COMPLYING WITH THE REQUIREMENT WERE RECEIVED IN THIS CASE AND THREE IN ANOTHER REFERRED TO IN PARAGRAPH 6 OF THE ABOVE REPORT, IT HAS BEEN HELD IN DECISIONS OF THIS OFFICE THAT TO CONFINE INVITATIONS TO BID TO A LIMITED OR MEAGER FEW OF THOSE IN POSITION AND QUALIFIED TO SUPPLY THE NEEDS OF THE GOVERNMENT IS NOT A COMPLIANCE WITH THE REQUIREMENTS, INTENT AND PURPOSE OF SECTION 3709, REVISED STATUTES. 16 COMP. GEN. 485, 486-87. LITTLE AND LIMITED COMPETITION ADMINISTRATIVELY SO CIRCUMSCRIBED AS TO ADMIT BUT THE FAVORED FEW AND EXCLUDE THE MANY OTHERWISE QUALIFIED TO PARTICIPATE DOES NOT CONSTITUTE THE COMPETITION CONTEMPLATED BY THE STATUTE. IT IS, OF COURSE, EQUALLY TRUE THAT WHEN SPECIFICATIONS ARE SO CLOSELY DRAWN THAT ONLY A SMALL NUMBER OF OTHERWISE QUALIFIED BIDDERS CAN MEET THEM, CIRCULATION OF INVITATIONS FOR BIDS IS AN IDLE GESTURE, 16 COMP. GEN. 207, 209, SINCE ALL BIDDERS WHO CAN NOT COMPLY WITH THE RESTRICTIVE PROVISIONS OF THE SPECIFICATIONS, NO MATTER HOW ELIGIBLE OTHERWISE, ARE FORECLOSED THEREBY.

THE NEED OF THE GOVERNMENT IN THIS AND SIMILAR CASES WAS AND IS THE SERVICING AND REPAIR OF VARIOUS MAKES OF AUTOMOBILES ACCEPTABLY AND SATISFACTORILY, AND THE ABILITY OF A BIDDER TO DISCHARGE THE OBLIGATION OF A CONTRACT TO THAT END IS DEPENDENT UPON HIS OR ITS OWN EQUIPMENT AND ABILITY FOR THE PURPOSE, AND NOT UPON THE STAMP OF APPROVAL OF THE MANUFACTURER OF A PARTICULAR MAKE OR MODEL OF AUTOMOBILE. HENCE, THERE APPEARS NO AUTHORITY FOR INCLUSION IN INVITATIONS FOR BIDS OF THE RESTRICTIVE PROVISION UNDER DISCUSSION. PROPER PROCEDURE REQUIRES THAT THE ACTUAL NEEDS OF THE GOVERNMENT BE FAIRLY STATED IN BROAD TERMS, AND THAT THE WIDEST PUBLICITY POSSIBLE BE GIVEN TO INVITATIONS FOR BIDS AND ALL QUALIFIED PERSONS AFFORDED OPPORTUNITY TO COMPETE, WITHOUT REFERENCE TO THE APPROVAL OR AUTHORIZATION OF A PARTICULAR MANUFACTURER. IT MAY BE SAID THAT THE SPECIFICATIONS HERE IN QUESTION, AFTER ELIMINATING ALL REFERENCE TO THE APPROVAL OR AUTHORIZATION OF THE PONTIAC COMPANY, WOULD APPEAR TO BE SUFFICIENTLY RESTRICTIVE TO DISCOURAGE IRRESPONSIBLE AND ILL- EQUIPPED BIDDERS FOR IT SPECIFIED WITH PARTICULARITY THE EQUIPMENT WHICH A BIDDER WOULD BE REQUIRED TO POSSESS AND MAINTAIN IN ORDER TO DISCHARGE SATISFACTORILY THE OBLIGATION OF A CONTRACT SUCH AS HERE INVOLVED.

THERE IS NOTED THE STATEMENT IN THE FIFTH INDORSEMENT ABOVE THAT THE DISTRICT ENGINEER, KANSAS CITY, MO., HAD BEEN INSTRUCTED TO PROCEED WITH AWARD UNDER THE BIDS MENTIONED IN PARAGRAPHS 6 AND 9 OF HIS REPORT, THE REASON ASSIGNED FOR SUCH ACTION BEING THAT THE INVITATIONS WERE ISSUED PRIOR TO RECEIPT OF THE LETTER FROM THIS OFFICE OF JANUARY 15, 1941, AND THAT "NEED FOR SUCH A CONTRACT IS ESSENTIAL, PARTICULARLY IN VIEW OF THE ADDITIONAL DEFENSE WORK NOW ASSIGNED TO THE CORPS OF ENGINEERS.' IT HAS BEEN HELD THAT THE QUESTION AS TO WHETHER SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION IS ONE WHICH GOES TO THE LEGALITY OF THE CONTRACT AND OF THE USES OF APPROPRIATED MONEYS, AND IS NOT FOR DETERMINATION BY THE PURCHASING AGENCY INVOLVED. 13 COMP. GEN. 315; 16 ID. 404, 410; ID. 497, 499; 18 ID. 579, 580. THE RECORD HERE INDICATES THAT THE LETTER FROM THIS OFFICE OF JANUARY 15, 1941, TO THE EFFECT THAT THE SPECIFICATION IN QUESTION WAS UNAUTHORIZED WAS RECEIVED IN THE OFFICE OF THE CHIEF OF ENGINEERS, JANUARY 18, 1941, AND FORWARDED TO THE DIVISION ENGINEER, KANSAS CITY, MO; UNDER FIRST INDORSEMENT OF JANUARY 28, 1941; THAT IT WAS RECEIVED IN THAT OFFICE FEBRUARY 1, 1941, AND TRANSMITTED TO THE DISTRICT ENGINEER, KANSAS CITY BY INDORSEMENT OF FEBRUARY 3, 1941. PRESUMABLY, IT WAS RECEIVED BY THAT OFFICER NOT LATER THAN THE FOLLOWING DAY, FEBRUARY 4. BIDS COVERING REPAIR AND SERVICE OF CHEVROLET AUTOMOBILES FOR THE ENSUING YEAR WERE OPENED IN THE OFFICE OF THE DISTRICT ENGINEER ON FEBRUARY 3, 1941, AND THOSE FOR LIKE SERVICES FOR PONTIAC VEHICLES WERE OPENED FEBRUARY 4. IN NEITHER CASE DID THE THEN CURRENT CONTRACT EXPIRE UNTIL FEBRUARY 28, 1941. IT WOULD APPEAR, THEREFORE, THAT THERE WAS SUFFICIENT TIME FOR REJECTION OF ALL PENDING BIDS AND READVERTISEMENT OF THE ACTUAL NEEDS OF THE GOVERNMENT FOR THE PURPOSE TO BE SERVED WITH THE ELIMINATION OF THE OBJECTIONABLE FEATURE IN QUESTION, AND PROPER ADMINISTRATIVE PROCEDURE SO REQUIRED.

WHILE, UNDER ALL THE CIRCUMSTANCES, THIS OFFICE WILL NOT WITHHOLD APPROVAL OF OTHERWISE PROPER PAYMENTS UNDER CURRENT CONTRACTS AS AWARDED SOLELY BY REASON OF THE INCLUSION OF THE RESTRICTIVE REQUIREMENT FOR AUTHORIZED REPAIR SHOPS APPROVED BY THE MANUFACTURERS OF THE RESPECTIVE VEHICLES, YOU ARE INFORMED THAT SUCH REQUIREMENT IS UNDULY RESTRICTIVE OF COMPETITION AND UNAUTHORIZED, AND SHOULD BE OMITTED FROM ALL SIMILAR INVITATIONS ISSUED SUBSEQUENT TO THE DATE OF THIS DECISION; AND ALL PENDING INVITATIONS, IF ANY, SHOULD BE AMENDED IN CONFORMITY HEREWITH. THE PROCEDURE SHOULD BE AS OUTLINED IN 15 COMP. GEN. 1023. THAT IS TO SAY, INVITATIONS FOR BIDS AND SPECIFICATIONS FOR SUCH WORK SHOULD BE SO DRAWN AS TO AFFORD ALL QUALIFIED PERSONS AND CONCERNS EQUAL OPPORTUNITY TO COMPETE WITHOUT REGARD TO WHETHER OR NOT THEY MAINTAIN AN AUTHORIZED REPAIR SHOP APPROVED BY THE MANUFACTURER OF THE SPECIFIED MAKE OF AUTOMOBILE, AND THE INVITATIONS SHOULD BE GIVEN WIDE CIRCULATION AND PUBLICITY. IF, AFTER BIDS ARE OPENED, IMPARTIAL ADMINISTRATIVE INVESTIGATION SHOULD DISCLOSE FACTS SUFFICIENT TO ESTABLISH THAT A LOW BIDDER, BY REASON OF LACK OF EXPERIENCE, ABILITY, OR ADEQUATE EQUIPMENT AND FACILITIES IS NOT QUALIFIED TO DISCHARGE SATISFACTORILY A CONTRACT ENTERED INTO, THE REJECTION OF THE BID WOULD BE AUTHORIZED--- OTHERWISE NOT. MOREOVER, IN CASE OF ACCEPTANCE OF OTHER THAN THE LOW BID, THERE MUST BE PRESENTED FACTS--- NOT MERE ADMINISTRATIVE CONCLUSIONS--- TO SUPPORT THE ACTION TAKEN. THE BARE STATEMENT THAT A BID DID NOT CONFORM TO A SPECIFICATION WHICH IS IN ITSELF UNAUTHORIZED, OBJECTIONABLE AND UNDULY RESTRICTIVE OF COMPETITION, AND WAS REJECTED SOLELY FOR THAT REASON, DOES NOT CONSTITUTE A FACT JUSTIFYING ACCEPTANCE OF OTHER THAN AN OTHERWISE ACCEPTABLE LOW BID, 3 COMP. GEN. 604.