B-46197, DECEMBER 28, 1944, 24 COMP. GEN. 476

B-46197, DECEMBER 28, 1944, 24 COMP. GEN. 476

BOOKS OF REFERENCE - PROCUREMENT BY LEASE AN AUTHORIZATION IN AN APPROPRIATION FOR THE "PROCUREMENT," AND NOT MERELY THE "PURCHASE AND EXCHANGE," OF BOOKS OF REFERENCE, SUCH AS THE " REGISTER OF DIRECTORS AND EXECUTIVES," PERMITS THE ACQUISITION OF THE USE OF SUCH BOOKS BY LEASE, WHICH LEASE MAY INCLUDE A REQUIREMENT FOR THE RETURN OF THE BOOKS UPON THE EXPIRATION OF THE LEASE, WHERE SUCH LIMITED USE WILL SATISFY THE REQUIREMENTS OF THE PARTICULAR GOVERNMENT AGENCY SUBSCRIBING THEREFOR. 6 COMP. GEN. 157, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, DECEMBER 28, 1944:

I HAVE YOUR LETTER OF DECEMBER 6, 1944 ( CC. WJH), AS FOLLOWS:

REFERENCE IS MADE TO CONTRACT TPS-67580 ENTERED INTO JUNE 19, 1944, WITH STANDARD AND POOR'S CORPORATION, FOR FURNISHING VARIOUS PUBLICATIONS INCLUDING THE " REGISTER OF DIRECTORS AND EXECUTIVES," ITEM 35-G-1175-300, DURING THE PERIOD JULY 1, 1944 TO JUNE 30, 1945.

THERE WAS FORWARDED TO THE PROCUREMENT DIVISION OF THIS DEPARTMENT BY THE CHIEF CLERK OF YOUR OFFICE A COPY OF HIS LETTER DATED OCTOBER 10, 1944 TO THE CONTRACTOR OBJECTING TO THE PROVISION IN THE CONTRACT RESTRICTING SUBSCRIPTIONS TO THE REGISTER TO A LEASE BASIS, CITING 6 COMP. GEN. 157, AND STATING THAT THE CONTRACT IS OBJECTIONABLE FOR INDEFINITENESS.

THE REGISTER WAS SUBSCRIBED TO FOR MANY YEARS BY THE VARIOUS DEPARTMENTS UNDER SEPARATE CONTRACTS. THE REGISTER WAS PLACED ON THE SCHEDULE OF PERIODICALS FOR THE FISCAL YEAR 1941 FOR USE BY THE TREASURY DEPARTMENT AND BY SUCH OTHER GOVERNMENT AGENCIES AS MIGHT DESIRE TO PROCURE IT. IN THE FOLLOWING FISCAL YEAR, 1942, THE REGISTER WAS INCLUDED IN THE GENERAL SCHEDULE OF SUPPLIES, AS ITEM 35-G-1175 241, AND HAS BEEN ON THE GENERAL SCHEDULE EVER SINCE.

EACH YEAR THE CONTRACTOR REFUSED TO SELL THE VOLUME AND INSISTED UPON A LEASE ARRANGEMENT. THE REASON ASSERTED BY THE CONTRACTOR HAS BEEN THAT IT MUST TAKE EVERY PRECAUTION TO AVOID THE REGISTER'S FALLING INTO THE HANDS OF PERSONS WHO MIGHT USE IT FOR PURPOSES OTHER THAN INTENDED, SUCH AS THE COMPILATION OF A MAILING LIST FOR SOLICITATIONS, DONATIONS, ETC. A DEFINITE ASSURANCE TO THAT EFFECT MUST BE GIVEN BY THE CONTRACTOR TO ALL DIRECTORS AND EXECUTIVES WHO GRANT PERMISSION TO INCLUDE THEIR NAMES IN THE LIST. AS A FURTHER PRECAUTION, EACH VOLUME IS REGISTERED IN NEW YORK OFFICE OF THE CONTRACTOR TO FACILITATE ITS RECALL UPON EXPIRATION OR CANCELLATION OF THE LEASE AGREEMENT. MOREOVER, IT IS ESTIMATED THAT THE VOLUME IS 40 PERCENT WORTHLESS, FOR THE PURPOSES OF MOST AGENCIES, AT THE EXPIRATION OF EACH YEAR.

IN THE DECISION REFERRED TO, 6 COMP. GEN. 157, THERE WAS CONSIDERED THE LEASING OF ATLASES WHICH--- AT LEAST IN 1926--- WERE RELATIVELY OF MORE PERMANENT VALUE, AND NOTHING APPEARS IN THE DECISION WHICH WOULD INDICATE A REFUSAL, OR JUSTIFICATION FOR A REFUSAL, ON THE PART OF THE CONTRACTOR TO AGREE TO AN OUTRIGHT SALE OF THE ATLASES.

WITH RESPECT TO THE TERMS OF THE AGREEMENT UNDER WHICH THE REGISTER IS LEASED, THERE APPEARS IN THE GENERAL SCHEDULE A BRIEF DESCRIPTION OF THE SERVICE FOLLOWED BY THE WORDS "LEASE BASIS.' THE CONDITIONS OF THE "LEASE BASIS" ARE MORE FULLY SET FORTH IN A SEPARATE DOCUMENT (COPY HEREWITH) WHICH IS ATTACHED TO THE INSIDE COVER OF EACH VOLUME.

ADMITTEDLY, THE LEGAL EFFICACY OF A DOCUMENT SO MADE A PART OF THE AGREEMENT IS OPEN TO SOME QUESTION SINCE THE GOVERNMENT--- THE PARTY CHARGED WITH COMPLIANCE WITH ITS TERMS--- IS NOT A SIGNATORY. HOWEVER, THE PROCUREMENT DIVISION AND THE SEVERAL DEPARTMENTS AND AGENCIES OF THE GOVERNMENT THAT HAVE BEEN SUBSCRIBING TO THIS SERVICE HAVE BEEN AWARE OF THE CONDITIONS FOR MANY YEARS.

TO OBVIATE THE POSSIBILITY OF FUTURE MISUNDERSTANDINGS, IT IS PROPOSED TO MAKE THE CONDITIONS A DEFINITE PART OF THE CONTRACT BY AMENDMENT,ELIMINATING THE RESERVATION TO THE CONTRACTOR OF THE RIGHT TO TERMINATE THE LEASE AGREEMENT PRIOR TO EXPIRATION OF THE LEASE PERIOD. THIS THE CONTRACTOR HAS ORALLY AGREED TO DO WITH RESPECT TO GOVERNMENT SUBSCRIPTIONS. THE GENERAL SCHEDULE WOULD THEN BE SUPPLEMENTED TO SHOW THE REVISED LEASE BASIS CONDITIONS.

THE REGISTER SERVES A DEFINITE NEED OF THE GOVERNMENT DEPARTMENTS AND SINCE THE CONTRACTOR, WHICH IS THE SOLE SOURCE OF SUPPLY, HAS BEEN UNWILLING TO AGREE TO FURNISH THE REGISTER UPON ANY OTHER THAN A LEASE BASIS, IT IS REQUESTED THAT FAVORABLE CONSIDERATION BE GIVEN TO PERMITTING THE CONTINUANCE OF THE ITEM ON THE GENERAL SCHEDULE OF SUPPLIES UPON SUCH BASIS, SUBJECT TO EFFECTING THE CHANGES OUTLINED ABOVE.

IN THE DECISION (6 COMP. GEN. 157) REFERRED TO BY YOU, IT WAS HELD (QUOTING FROM THE SYLLABUS):

THE APPROPRIATION FOR THE PURCHASE OR EXCHANGE OF LAW BOOKS, BOOKS OF REFERENCE, ETC., IS NOT AUTHORITY FOR ENTERING INTO CONTRACTS UNDER WHICH THE GOVERNMENT WOULD BE OBLIGATED AT THE TIME OF RECEIVING THE BOOK, ETC., TO EXCHANGE IT AT A FUTURE DATE AT A NOMINAL PRICE FIXED BY THE DEALERS.

SUBSCRIBING TO OR LEASING ATLASES FOR A FIXED PRICE PAYABLE IN ADVANCE IS NOT AUTHORIZED.

SAID DECISION PASSED UPON THE RIGHT OF THE SECRETARY OF THE INTERIOR TO PROCURE ATLASES IN A MANNER OTHER THAN BY "PURCHASE OR EXCHANGE" AND, AS INDICATED ABOVE, IT WAS HELD THAT THE AUTHORITY TO PURCHASE CONSTITUTED NO AUTHORITY TO LEASE. THAT DECISION DID NOT HOLD THAT GOVERNMENT DEPARTMENTS OR OTHER INDEPENDENT ESTABLISHMENTS MIGHT NOT LEASE ATLASES OR OTHER BOOKS OF REFERENCE PROVIDED THEY HAD AN APPROPRIATION AVAILABLE FOR LEASING SUCH SUPPLIES AS DISTINGUISHED FROM THEIR PURCHASE. FOR EXAMPLE, THE APPROPRIATIONS OF THE GENERAL ACCOUNTING OFFICE FORMERLY PROVIDED FOR THE "PURCHASE AND EXCHANGE" OF BOOKS BUT, BEGINNING WITH THE FISCAL YEAR 1942, ACT OF APRIL 5, 1941, 55 STAT. 112, THE LANGUAGE WAS CHANGED TO AUTHORIZE "PROCUREMENT AND EXCHANGE" OF LAW BOOKS AND BOOKS OF REFERENCE. THE WORD "PROCUREMENT" IS MUCH BROADER IN SCOPE THAN THE WORD "PURCHASE" AND PERMITS THE ACQUISITION OF LAW BOOKS AND BOOKS OF REFERENCE BY THIS OFFICE, OR BY ANY OTHER OFFICE HAVING SIMILAR AUTHORITY, EITHER BY PURCHASE OR BY LEASE, INCLUDING THE REQUIREMENT FOR THE RETURN OF THE VOLUMES UPON EXPIRATION OF THE LEASE WHERE SUCH LIMITED USE WILL SATISFY THE REQUIREMENTS OF THE PARTICULAR GOVERNMENT AGENCY SUBSCRIBING THEREFOR.

CONTRACT NO. TPS-67580, EXECUTED MAY 18, 1944, BETWEEN THE PROCUREMENT DIVISION AND THE STANDARD AND POOR'S CORPORATION CONSISTED OF THE BID OF THE CONTRACTOR TO FURNISH " REGISTER OF DIRECTORS AND EXECUTIVES, WITH GEOGRAPHICAL SECTION (LEASE BASIS); ANNUALLY WITH QUARTERLY REVISIONS," AT $60 PER YEAR, WHICH BID WAS DULY ACCEPTED. WHILE THE TERMS OF THE LEASE ARE NOT RECITED ON THE SCHEDULE, ANY REQUISITION FOR SUCH ITEM NECESSARILY WAS SUBJECT TO THE LEASE TERMS OFFERED BY THE CONTRACTOR AND WHICH ARE PRINTED ON THE INSIDE COVER OF EACH VOLUME, AS FOLLOWS:

THIS BOOK IS THE PROPERTY

OF

STANDARD AND POOR'S CORPORATION

345 HUDSON ST. - - NEW YORK

AND

IS LEASED TO THE HOLDER UNDER

THE FOLLOWING CONDITIONS:

1. THAT THE ANNUAL REGISTER OF DIRECTORS AND EXECUTIVES AND GEOGRAPHICAL SUPPLEMENT SHALL REMAIN THE PROPERTY OF STANDARD AND POOR'S CORPORATION AND SHALL BE RETURNED TO A PROPERLY DESIGNATED REPRESENTATIVE OF SAID COMPANY UPON THE ISSUANCE AND DELIVERY OF A SUBSEQUENT EDITION, OR UPON EXPIRATION OR CANCELLATION OF THE LEASE AGREEMENT.

2. THAT STANDARD AND POOR'S CORPORATION RESERVES THE RIGHT TO TERMINATE THE LEASE AGREEMENT AT ANY TIME AND RECALL THE REGISTER UPON MAKING REFUND OF UNEARNED FEES PAID.

IN THE CIRCUMSTANCES, THERE IS NO OBJECTION TO THE CONTINUED CARRYING OF THE QUESTIONED ITEM ON THE GENERAL SUPPLY SCHEDULE, BUT IT WOULD APPEAR ADVISABLE HEREAFTER, TO PUBLISH THE LEASE TERMS ON THE GENERAL SCHEDULE IN ORDER THAT THE RESPECTIVE GOVERNMENT AGENCIES MAY HAVE ADVANCE NOTICE OF THE CONDITIONS ATTACHING TO THE FURNISHING OF THE PARTICULAR REFERENCE BOOKS.