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13 COMP. GEN. 284

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American Government

13 COMP. GEN. 284

Comptroller General of the United States
April 19, 1934

A-53405, A-54540, APRIL 19, 1934, 13 COMP. GEN. 284

SPECIFICATIONS - RESTRICTIVE CONDITIONS - BIDS THE CLEAR PURPOSE OF SECTION 3709, REVISED STATUTES, IS TO REQUIRE ADVERTISEMENT OF THE NEEDS OF THE UNITED STATES TO BE IN SUCH TERMS AS TO PERMIT FULL AND FREE COMPETITION BY ALL QUALIFIED BIDDERS, IN ORDER THAT THE USE OF APPROPRIATIONS MAY BE RESTRICTED TO THE ACQUIRING OF ACTUAL GOVERNMENT NEEDS, TO SECURE SUCH NEEDS AT THE LOWEST COSTS, AND TO GUARD AGAINST INJUSTICE, FAVORITISM, COLLUSION, GRAFT, ETC., IN THE TRANSACTING OF THE PUBLIC BUSINESS. THE TERMS OF SECTION 3709, REVISED STATUES, ARE NOT SATISFIED BY ADVERTISED SPECIFICATIONS FOR MOTOR TRUCKS WHICH CONTAIN EITHER SUCH RESTRICTIVE PROVISIONS OR SUCH DETAIL REGARDING MECHANICAL CONSTRUCTION, PARTS, ETC., NOT SHOWN TO BE NECESSARY TO MEET THE ACTUAL NEEDS OF THE UNITED STATES, AS TO EXCLUDE FROM BIDDING AND CONSIDERATION ALL BUT THE PARTICULAR VEHICLE DESIRED OR ALL BUT THE FAVORED FEW. IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR A PLAN WHEREBY MOTOR VEHICLES FOR THE USE OF THE GOVERNMENT MAY BE ACQUIRED THROUGH THE PURCHASE OF PARTS MANUFACTURED AS THE RESULT OF SPECIFICATIONS PERMITTING FULL AND FREE COMPETITION BY ALL THOSE QUALIFIED FOR THE MANUFACTURE OF MOTOR PARTS, AND FOR THE ASSEMBLING THEREOF IF NOT DONE BY THE GOVERNMENT, THERE ARE FOR PURCHASING UNDER SECTION 3709, REVISED STATUTES, COMMERCIAL MAKES OF TRUCKS WITHOUT MODIFICATION. IF THERE IS NEED FOR SOME PARTICULAR AND UNUSUAL GOVERNMENT USE REQUIRING A SPECIAL TYPE OF EQUIPMENT OR CONSTRUCTION DIFFERING FROM THE COMMERCIAL MAKES ON THE MARKET, THERE SHOULD BE DISCLOSED IN THE SPECIFICATIONS THE JOB TO BE DONE, THE PARTICULAR AND UNUSUAL USE INVOLVED, AND THERE SHOULD BE STIPULATED THE TESTS TO BE REQUIRED IN ORDER THAT THERE MAY BE COMPETITION IN PROVIDING THE NECESSARY EQUIPMENT MORE ECONOMICALLY, BUT THE ADMINISTRATIVE OFFICE GENERALLY SHOULD NOT ATTEMPT TO DESCRIBE IN THE SPECIFICATIONS THE MECHANICAL DETAIL THOUGHT TO BE REQUIRED. POSSIBILITY OF AN ADVANCE IN PRICE DOES NOT JUSTIFY ACCEPTING BIDS FOR MOTOR VEHICLES FOR GOVERNMENT USE IRREGULARLY MADE OR SO MADE AS NOT TO HAVE AFFORDED OPPORTUNITY FOR FULL AND FREE COMPETITIVE BIDDING ON THE ACTUAL AND DISCLOSED NEEDS OF THE GOVERNMENT. WHERE THERE HAS BEEN DELAY IN THE ACCEPTANCE OF BIDS UNTIL THE PERIOD STIPULATED IN THE BIDS FOR ACCEPTANCE HAS EXPIRED AND THE LOW BIDDERS HAVE REFUSED TO EXTEND THE PERIOD IN WHICH THEIR BIDS MAY BE ACCEPTED, APPROPRIATIONS MAY NOT BE ORDINARILY CHARGED WITH THE AMOUNT OF HIGHER BIDS FOR THE DELIVERY OF THE EQUIPMENT. METHOD OF DISTRIBUTION AND/OR PLACES OF DELIVERY, THAT IS, F.O.B. PLANT AND F.O.B. STATION NEAREST PLACE OF INITIAL USE, ARE FACTORS PROPERLY FOR INCLUSION ON SPECIFICATIONS FOR BIDS ON MOTOR VEHICLES FOR THE USE OF THE GOVERNMENT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, APRIL 19, 1934:

CONSIDERATION HAS BEEN GIVEN THE VARIOUS ADVERTISED SPECIFICATIONS TRANSMITTED WITH YOUR LETTERS OF MARCH 21 AND 24, 1934, WHICH MAY BE TABULATED AS FOLLOWS:

TABLE

INV. NO. DATE DATE BIDS ARTICLES

ADVERTISEMENT OPENED ART. 34-9 ---- 1-5-34 1-15-34 10 TRACTORS. 398-34- 72 ---- 12-27-33 1-23-34 194 1 1/2 T. TRUCKS. 398-34-75 ---- 1- 2-34 1-23 -34 834 1 1/2-T. TRUCKS. 398-34-76 ---- 1- 3-34 1-23-34 8 MEDIUM AND ONE LARGE PASSENGER

AUTOS. 398-34-78 ---- 1- 6-34 1-22-34 2,055 1 1/2-T. TRUCKS. 398-34-79 ---- 1- 9-34 1-24-34 14 7 1/2 T. TRUCKS.

421 2 1/2-T. TRUCKS. 398-34-80 ---- 1-11-34 1-23-34 53 5-PASS. AUTOS.

424 1/2-T. TRUCKS. 398-34-83 ---- 1-13-34 1-29-34 371 1/2-T. TRUCKS.

12 PASS. TRUCKS.

242 1 1/2-T. TRUCKS.

180 1 1/2-T. TRUCKS. 398-34-84 ---- 1-16-34 1-31-34 841 1/2-T. TRUCKS. 398-34-85 ---- 1-16-34 1-31-34 2 1/2-T. TRUCKS.

WHILE THE BIDS WERE SUBMITTED AND OPENED LATE IN JANUARY, THERE HAS BEEN MUCH DELAY IN ACTION THEREON DUE LARGELY TO CERTAIN GRAND JURY AND CONGRESSIONAL INVESTIGATIONS, PROTESTS, ETC., AND THE RECORD SUBMITTED BY YOU HAS BEEN EXAMINED TO DETERMINE WHETHER THE APPROPRIATION PROPOSED TO BE CHARGED MAY NOW LAWFULLY BE SO EMPLOYED IN THE CIRCUMSTANCES APPEARING.

THE MAJOR DIFFICULTIES ARISE FROM THE SPECIFICATIONS EMPLOYED IN SOLICITING BIDS. THEY ARE, AS TO EACH CLASS OF VEHICLES UNDER CONSIDERATION, IN MUCH DETAIL. IN SUCH DETAIL, IN FACT, AS TO MECHANICAL CONSTRUCTION, PARTS, ETC., AS TO AFFORD ROOM FOR THE FREQUENTLY ASSERTED CRITICISM THAT THROUGH SO STIPULATING AS TO NONESSENTIAL MECHANICAL ELEMENTS COMPETITION IS PRACTICALLY ELIMINATED AND AWARD MADE CERTAIN FOR A PARTICULAR PRODUCT.

THIS IS NOT A NEW DIFFICULTY. RATHER, IT SEEMS AN EVER-GROWING ONE. THE TENDENCY TOWARD MINUTENESS IN STIPULATING WHAT WILL BE ACCEPTABLE IN MECHANICAL CONSTRUCTION, ETC., HAS BEEN INCREASINGLY APPARENT DURING RECENT YEARS. IN THE EARLIER STAGES THIS SEEMED ATTRIBUTABLE TO AN ADMINISTRATIVE WISH TO STANDARDIZE TO THE EXTENT POSSIBLE WITHOUT LEGISLATIVE AUTHORITY. LATER IT SEEMED A PLAN TO ENCOURAGE INDUSTRY TO BUILD STANDARD EQUIPMENT MORE IN CONFORMITY WITH THE ENGINEERING VIEW OF ADMINISTRATIVE OFFICIALS. IT IS NOW OPENLY ASSERTED THAT IT IS DUE IN SOME MEASURE, AT LEAST, TO HIGH-PRESSURE SALESMANSHIP AND A PURPOSE TO FAVOR PARTICULAR CONCERNS.

WHATEVER MAY BE THE REASON THE TENDENCY IS IN THE WRONG DIRECTION IF THE GOVERNMENT IS TO CONTINUE TO LOOK TO INDUSTRY TO MEET ITS NEEDS THROUGH SUPPLYING AUTOMOTIVE EQUIPMENT ASSEMBLED IN WHOLE OR IN SUBSTANTIAL PART.

IT IS APPRECIATED THAT THE PROBLEM IS NOT FREE FROM ADMINISTRATIVE DIFFICULTIES AND THAT THERE IS RESPONSIBILITY TO SECURE AUTOMOTIVE EQUIPMENT THAT WILL REASONABLY SERVE THE GOVERNMENT'S NEEDS. BUT THIS RESPONSIBILITY MUST BE DISCHARGED WITHIN THE LAW AND IT IS KNOWN TO ALL THAT APPROPRIATIONS ARE AVAILABLE ONLY TO ACQUIRE THAT WHICH IS NEEDED, AS DISTINGUISHED FROM THAT WHICH MAY BE DESIRED, AND THAT SECTION 3709, REVISED STATUTES, REQUIRES SUCH NEED BE SO DESCRIBED AS TO PERMIT FULL AND UNRESTRICTED COMPETITION IN BIDDING THEREON, WITH AWARD TO THE LOWEST RESPONSIBLE BIDDER.

THE CLEAR PURPOSE OF THE LAW IN THIS REGARD IS TO RESTRICT THE USES OF APPROPRIATIONS TO THE ACQUIRING OF ACTUAL GOVERNMENT NEEDS; TO SECURE SUCH NEEDS AT THE LOWEST COST; AND TO GUARD AGAINST INJUSTICE, FAVORITISM, COLLUSION, GRAFT, ETC., IN THE TRANSACTING OF THE PUBLIC BUSINESS.

THROUGH STIPULATING IN SUFFICIENT DETAIL AS TO MECHANICAL CONSTRUCTION, PARTS, ETC., THERE CAN BE EXCLUDED FROM BIDDING AND CONSIDERATION ALL BUT THE PARTICULAR VEHICLE DESIRED, OR BY EMPLOYING SLIGHTLY LESS DETAIL THE FIELD CAN BE SO RESTRICTED AS TO EXCLUDE ALL BUT THE FAVORED FEW WITH OPPORTUNITY RESULTING FOR COLLUSION AND EXCESSIVE PRICES. SO STIPULATING ACTUALLY OPERATES (1) TO PREFER A PARTICULAR VEHICLE OR TYPE OF VEHICLE TO THE DISADVANTAGE OR EXCLUSION OF OTHER STANDARD TYPES POSSIBLY EQUAL OR SUPERIOR IN ACTUAL OPERATION ON THE PARTICULAR WORK TO BE DONE, TO THE VEHICLE OR TYPE OF VEHICLE SO PREFERRED, OR (2) TO REQUIRE DEVIATION FROM STANDARD TYPES BY EXACTING CHANGES IN MECHANICAL CONSTRUCTION; REQUIRING INCLUSION OF OTHER DEVICES; EXCLUSION OF CERTAIN PARTS STANDARD TO THE PARTICULAR TYPE FOR WHICH DESIGNED; OR SUBSTITUTION OF OTHER PARTS OR DEVICES FOR SUCH STANDARD PARTS, AS PER SPECIFICATION DICTATION, OR, WHEN CARRIED TO ITS FULLEST EXTENT (3) TO ABANDON STANDARD TYPES AND REQUIRE CONSTRUCTION IN ACCORDANCE WITH GOVERNMENT SPECIFICATIONS.

THE FIRST IS CLEARLY CONTRARY TO LAW, VIOLATES EVERY PURPOSE OF THE APPLICABLE LAW, AND MAKES POSSIBLE COMMISSION OF EVERY WRONG INTENDED TO BE PREVENTED.

THE SECOND IS AS OBJECTIONABLE AS THE FIRST IN ITS POSSIBILITIES FOR RESTRICTING COMPETITION, PERMITTING FAVORITISM AND OTHER WRONGDOING, BUT LACKS THE SINGLE VIRTUE POSSIBLE UNDER THE FIRST--- THE LIKELIHOOD THAT THE VEHICLE ACQUIRED WILL IN ALL PROBABILITY BE ONE OF THE STANDARD TYPES DEVELOPED BY COMPETENT AUTOMOTIVE ENGINEERS AND SUCCESSFULLY SERVING IN COMMERCIAL USES AND THUS WILL ACTUALLY OPERATE. THE AUTOMOTIVE INDUSTRY HAS ADVANCED TO SUCH STATE THAT THERE ARE NOW MANY STANDARD TYPES OR MAKES, TRUCKS AND PASSENGER CARRYING VEHICLES, CONSTANTLY AND SATISFACTORILY SERVING THE PUBLIC IN LARGE NUMBERS, AND MANY OF EACH TYPE IN USES EXTRAORDINARILY SEVERE. THE SPECIFICATIONS TO WHICH THESE VEHICLES ARE BUILT HAVE BEEN WORKED OUT AND ADOPTED AFTER EXHAUSTIVE RESEARCH AND TESTS BY THE BEST AUTOMOTIVE ENGINEERS IN THE WORLD. THEY ARE NOT, OF COURSE, IDENTICAL IN CONSTRUCTION OR DESIGN. COMPETITION HAS REQUIRED CONSTANT PROGRESS, CONSTANT IMPROVEMENT, BUT EACH STANDARD TYPE HAS UNDOUBTEDLY BEEN PLANNED AND DEVELOPED WITH EACH PART SO DEVISED AND CONSTRUCTED AS TO PRODUCE THE BEST RESULT IN ASSOCIATION WITH OTHER PARTS LIKEWISE DEVISED AND CONSTRUCTED IN HARMONY WITH THE BASIC PLAN. THESE MANY PARTS WHEN ASSEMBLED INTO A VEHICLE GIVE EFFECT TO THE BASIC PLAN AND, IF THE PLAN BE WELL CONCEIVED, THERE IS PRODUCED A BALANCED WHOLE TO COMPETE WITH LIKE EFFORTS OF OTHER EQUALLY CAPABLE ENGINEERING TALENT DESIGNED TO ACCOMPLISH SIMILAR RESULTS AND TO SERVE THE PUBLIC AT LEAST EQUALLY WELL, BUT POSSIBLY EMPLOYING DIFFERENT BASIC PLANS. WHILE THE MANY PARTS EMPLOYED TOGETHER AND AS INTENDED PRODUCE A BALANCED WHOLE, IT DOES NOT NECESSARILY FOLLOW THAT CERTAIN PARTS SELECTED FROM ONE STANDARD TYPE WILL GIVE EQUALLY SATISFACTORY RESULTS IF EMPLOYED IN ANOTHER STANDARD TYPE, AND EVEN IF SUCH METHOD OF STIPULATING MECHANICAL CONSTRUCTION, PARTICULAR PARTS, ETC., WERE OTHERWISE UNOBJECTIONABLE, SUCH METHOD DEPRIVES THE GOVERNMENT OF OPPORTUNITY TO BENEFIT BY THE BEST THAT AUTOMOTIVE ENGINEERS EMPLOYED BY INDUSTRY ARE ACCOMPLISHING IN THE BUILDING OF BALANCED VEHICLES DESIGNED TO GIVE SUCH LONG, SATISFACTORY AND ECONOMICAL SERVICE AS TO DESERVE PUBLIC APPROVAL AND WIDE USE. FURTHERMORE, SUCH METHOD PROVIDES INSUFFICIENT ASSURANCE THAT EQUIPMENT SO CONSTRUCTED WILL SUCCESSFULLY AND SATISFACTORILY FUNCTION OR PERFORM THE WORK REQUIRED TO BE DONE.

AS TO THE THIRD, THIS OFFICE HAS HERETOFORE SUGGESTED THAT IF THE WAR DEPARTMENT CANNOT ACQUIRE ITS ACTUAL NEEDS IN AUTOMOTIVE EQUIPMENT THROUGH SO DESCRIBING THE PARTICULAR OR CHARACTER OF WORK TO BE PERFORMED AND STIPULATING SUCH TESTS AS MAY BE REASONABLY NECESSARY TO ESTABLISH ABILITY TO PERFORM, ECONOMY OF OPERATION, AND OTHER MATERIAL CONSIDERATIONS, AND THEN PERMITTING FULL AND FREE COMPETITION THEREON, AS REQUIRED BY LAW, THAT IS, SO AS TO PERMIT BIDDING AND SUBMISSION FOR TESTS WITH RESPECT TO ALL STANDARD TYPES OF THE PARTICULAR CLASS OF VEHICLE INVOLVED, CONSIDERATION MIGHT BE GIVEN TO DEVISING A PLAN WHEREBY THE DEPARTMENT WOULD ACCEPT FULL RESPONSIBILITY THROUGH STIPULATING ALL MECHANICAL AND CONSTRUCTION DETAILS AND SECURE FULL COMPETITION ON THE BUILDING OF ASSEMBLED EQUIPMENT CONSTRUCTED TO SUCH SPECIFICATIONS OR ON THE SEVERAL PARTS WITH ASSEMBLING TO BE DONE BY THE GOVERNMENT. WHILE TO EMPLOY SUCH A PLAN WOULD REQUIRE SPECIFIC LEGISLATIVE AUTHORITY, IF THERE ACTUALLY IS INABILITY TO SO DESCRIBE THE NEED--- THE CHARACTER OF WORK ON WHICH THE VEHICLES ARE TO BE EMPLOYED--- AND TO PRESCRIBE TESTS WHEREBY TO DETERMINE THE MATTER OF ABILITY TO PERFORM AS REQUIRED TO DO THE WORK, AND SO AS TO PERMIT COMPETITIVE BIDDING TO SUPPLY SUCH NEED, BIDDING BY ALL LEGALLY QUALIFIED TO BID AND WITH RESPECT TO ALL STANDARD TYPES OF THE PARTICULAR CLASS INVOLVED, WITH TESTING AS AFORESAID, THEN PERHAPS THE CONDITION SHOULD HAVE THE CONSIDERATION OF THE CONGRESS.

IT IS POSSIBLE, OF COURSE, THAT FOR SOME PARTICULAR AND UNUSUAL GOVERNMENT USE A SPECIAL TYPE OF EQUIPMENT OR SPECIAL TYPE OF CONSTRUCTION MAY BE NECESSARY, BUT IN SUCH CASE IT IS THE JOB TO BE DONE--- THE PARTICULAR AND UNUSUAL USE INVOLVED--- THAT IS FOR DISCLOSING IN ORDER THAT THERE MAY BE COMPETITION IN PROVIDING THE NECESSARY EQUIPMENT MOST ECONOMICALLY. IT IS NEEDLESSLY HAZARDOUS AND NOT IN THE PUBLIC INTEREST FOR ADMINISTRATIVE OFFICIALS TO ASSUME THE RESPONSIBILITY OF DETERMINING IN ADVANCE AND STIPULATING THE INTRICACIES OF MECHANISM AND CONSTRUCTION THAT ALONE WILL BE ACCEPTABLE. THEN, TOO, THE MATTERS OF EVER-CHANGING PERSONNEL AND THE DIVERGENCE OF VIEWS FREQUENTLY ARISING BETWEEN THE GROUPS REPRESENTING THE DIFFERENT BRANCHES OF THE MILITARY SERVICE, POSSIBLY NECESSITATING COMPROMISES, NO DOUBT WOULD OPERATE TO PLACE THE WAR DEPARTMENT AT SOME DISADVANTAGE IN ATTEMPTING TO TAKE THE PLACE OF OR TO COMPETE WITH LONG ESTABLISHED AND HIGHLY EFFICIENT ENGINEERING OFFICES MAINTAINED BY THE INDUSTRY AND PROVIDED EVERY MEANS AND FACILITY NECESSARY TO ACCOMPLISHMENT OF THE BEST ENGINEERING RESULTS.

IN CONNECTION WITH AN EFFORT APPARENTLY INTENDED TO RESTRICT AND DISCOURAGE THE STIPULATING OF NONESSENTIALS IN SPECIFICATIONS FOR TRUCKS, PASSENGER-CARRYING MOTOR VEHICLES, ETC., THERE WAS WORKED OUT BY A GROUP OF ADMINISTRATIVE OFFICERS, WHO SECURED, IT IS UNDERSTOOD, THE ADVICE OF EMINENT AUTOMOTIVE ENGINEERS, CERTAIN SPECIFICATIONS WHICH WERE ISSUED AS STANDARD SPECIFICATIONS KKK-T-701, ON DECEMBER 13, 1932, EFFECTIVE JUNE 15, 1933. WHILE APPARENTLY IN UNNECESSARY DETAIL IN SOME RESPECTS, YET EVIDENTLY A LONG STEP TOWARD SECTION 3709, REVISED STATUTES, THIS OFFICE FELT JUSTIFIED IN ENCOURAGING ADOPTION, HOPEFUL NOT ONLY TO BETTER EXISTING CONDITIONS BUT TO ASSIST A TENDENCY WHICH SEEMED MOVING IN THE RIGHT DIRECTION. THERE IS NEEDED BUT A GLANCE TO SEE HOW LITTLE WAS THE INFLUENCE EXERTED BY STANDARD SPECIFICATIONS KKK-T-701, OVER THE SPECIFICATIONS DRAFTED AND EMPLOYED IN THE INSTANT MATTERS.

IN INVITING BIDS IN THE MATTERS HERE UNDER CONSIDERATION THERE WAS NOT DESCRIBED THE WORK OR EVEN THE GENERAL CHARACTER OF THE WORK TO BE PERFORMED BY USE OF THE AUTOMOTIVE EQUIPMENT TO BE PURCHASED, NOR WERE TESTS PROVIDED FOR WHEREBY TO ASCERTAIN WHETHER VEHICLES TENDERED WOULD DO THE WORK, OR WHICH WOULD OPERATE THEREON MOST ECONOMICALLY. RATHER THERE WERE STIPULATED IN CONSIDERABLE DETAIL MATTERS OF MECHANICAL CONSTRUCTION, PARTS, DEVICES, ETC., WITH NO FACTS IN RELATION TO THE WORK TO BE DONE, OR OTHERWISE, SHOWING NEED OR JUSTIFICATION THEREFOR, AND THUS THERE WAS FOR BIDDING UPON THE ADMINISTRATIVE CONCLUSION AS TO HOW THE EQUIPMENT SHOULD BE CONSTRUCTED RATHER THAN ON AUTOMOTIVE EQUIPMENT THAT WOULD MOST ECONOMICALLY, AND SURELY, SERVE THE ACTUAL NEED.

IT WAS CERTAIN OF THE RESTRICTIVE STIPULATIONS APPEARING IN THESE SPECIFICATIONS, ESPECIALLY FOR THE SMALLER-TYPE VEHICLES, THAT SUPPLIED THE BASIS FOR RECENT ACCUSATIONS, THAT BY SO STIPULATING NO PUBLIC INTEREST WAS SERVED BUT RATHER COMPETITION WAS DEFEATED AND CERTAIN PRIVATE INTERESTS WERE FAVORED. WHILE A GRAND JURY INVESTIGATION RESULTED IN NO INDICTMENTS, AND IT IS THUS TO BE ACCEPTED, THERE WAS FOUND NO CRIMINAL INTENT; SO LONG AS SUCH METHOD OF STIPULATING IS CONTINUED, THERE REMAINS THE BASIS FOR CRITICISM--- AND THIS IN ADDITION TO THE LEGAL OBJECTIONS HEREINBEFORE POINTED OUT.

IT HAS BEEN ADMINISTRATIVELY SUGGESTED THAT REJECTION OF BIDS AND ADVERTISING WILL RESULT IN HIGHER COSTS DUE TO THE FACT THAT PRICES ARE ON THE ADVANCE. WHILE THE NEEDS OF THE GOVERNMENT ARE TO BE ACQUIRED MOST ECONOMICALLY, WHAT IS "MOST ECONOMICALLY" IS FOR ASCERTAINMENT BY OPEN AND UNRESTRICTED COMPETITIVE BIDDING ON THE ACTUAL AND DISCLOSED NEED. WHILE PRICES MAY HAVE ADVANCED SINCE THE BIDDING TO THE EXTENT THERE WAS NOT AFFORDED OPPORTUNITY FOR FULL COMPETITIVE BIDDING ON ACTUAL AND DISCLOSED NEEDS, THERE SEEMS AVAILABLE NO SURE MEANS OF ASCERTAINING WHAT BETTER BIDS MIGHT HAVE BEEN SECURED OR MAY NOW BE SECURED OTHER THAN THROUGH READVERTISING ON A PROPER AND LAWFUL BASIS. A SAVING MADE IN SOME CIRCUMSTANCE MAY ULTIMATELY PROVE TO BE AN EXPENSIVE ECONOMY.

THE DELAYS THAT HAVE OCCURRED SINCE THE BIDDING HAVE BEEN DUE TO PUBLIC NECESSITY--- GRAND JURY AND CONGRESSIONAL INVESTIGATIONS. THE 60-DAY PERIOD ORIGINALLY RESERVED FOR ACTION ON SUCH BIDS EXPIRED LONG AGO. CERTAIN OF THE BIDDERS SUBMITTED A 15-DAY EXTENSION AND UPON THE EXPIRATION THEREOF, AT LEAST SOME OF THEM, IT IS UNDERSTOOD, MADE A FURTHER EXTENSION, AND IT IS ASSUMED THESE EXTENSIONS ARE NOW AVAILABLE. THESE EXTENSIONS, WHILE POSSIBLY MADE WITH THE BEST OF INTENT, DO NOT TEND TO SUPPORT THE ADMINISTRATIVE VIEW THAT READVERTISING WILL RESULT IN HIGHER COSTS. BUT ASIDE FROM CONJECTURE AS TO WHAT THE RESULT OF REBIDDING ON PROPER SUBMISSIONS WILL BE, NO GOOD REASON IS SEEN WHY THE INDUSTRY SHOULD BE REQUIRED TO ABSORB INCREASED COSTS DUE TO DELAYS OCCASIONED BY SPECIFICATIONS BRINGING ABOUT GRAND JURY AND CONGRESSIONAL INVESTIGATIONS.

AN ANALYSIS OF THE SUBMITTED RECORDS DISCLOSES THAT CERTAIN OF THE SPECIFICATIONS PRODUCED NO BIDS COMPLYING THEREWITH, THUS NECESSITATING READVERTISING.

IN OTHER INSTANCES THE LOW BID HAS NOT BEEN EXTENDED SO AS NOW TO BE AVAILABLE. WHILE CERTAIN LOW BIDS APPEAR TO BE ADMINISTRATIVELY REGARDED AS FOR REJECTION DUE TO IMPROPER CONDUCT ON THE PART OF AN AGENT, BUT NOT APPARENTLY INVOLVING THE PRICE BID, AND, IN THIS CONNECTION ACCEPTING SUCH VIEW AS JUSTIFIED, THE FACT REMAINS THAT THE BIDS WERE LOW. ACCEPTANCE OF ANY BID REMAINING, EVEN IF NOW AVAILABLE THROUGH EXTENSION, WOULD BE, ON THE PRESENT RECORD, AN EXCESSIVE USE OF THE APPROPRIATION.

YOUR LETTER OF APRIL 9, 1934, WITH RESPECT TO OTHER CONTEMPLATED PURCHASES, ADVISES THAT ONE RESTRICTIVE PROVISION APPEARING IN CERTAIN OF THE SPECIFICATIONS HERE INVOLVED HAS BEEN ADMINISTRATIVELY DETERMINED AS UNNECESSARY AND "WILL NO LONGER BE INCLUDED IN SPECIFICATIONS FOR MOTOR VEHICLES.'

IN OTHER INSTANCES IT APPEARS THE ADMINISTRATIVE PURPOSE TO REJECT LOW BIDS AND ACCEPT HIGHER BIDS APPARENTLY BECAUSE OF THE FAILURE OF LOW BIDDERS TO AGREE TO CHANGES IN THEIR STANDARD TYPES AS REQUIRED BY THE SPECIFICATIONS--- FOR WHICH REQUIREMENTS THERE APPEAR OF RECORD NO JUSTIFYING REASON, NO NEED OF THE SERVICE.

CERTAIN OF THE PASSENGER-CARRYING MOTOR PROPELLED VEHICLES INVOLVED APPEAR TO CALL FOR PAYMENTS IN EXCESS OF THE LIMIT FIXED BY THE ECONOMY LAW, SECTION 3 OF THE ACT OF MARCH 3, 1933, 47 STAT. 1513.

BIDS UPON TRACTORS APPEAR IDENTICAL IN AMOUNT, AND THIS AFTER ONE REJECTION FOR THAT REASON AND READVERTISING. IN THIS CONNECTION THERE APPEARS FOR YOUR CONSIDERATION WHETHER THERE ARE FACTS FOR REPORTING BY YOU TO THE FEDERAL TRADE COMMISSION AND/OR THE DEPARTMENT OF JUSTICE AS INVOLVING POSSIBLY VIOLATION OF THE ANTITRUST LAWS OR SECTION 3 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 196.

WITH RESPECT TO THE MATTER OF PERMITTING SEPARATE BIDS FOR CHASSIS AND TRUCK BODIES WITH AN ALTERNATE FOR FURNISHING THE TRUCK COMPLETE, WHICH HAS BEEN A SUBJECT OF PROTEST, YOU HAVE REPORTED:

THE WAR DEPARTMENT IS GIVING CAREFUL CONSIDERATION TO THE MATTER OF ISSUING CALLS FOR ALTERNATIVE BIDS FOR FURNISHING TRUCK CHASSIS AND BODIES SEPARATELY. IT IS QUESTIONABLE WHETHER SUCH PROCEDURE, IF ADOPTED, WILL REDUCE THE ULTIMATE COST TO THE GOVERNMENT OF THE COMPLETED VEHICLE. INSPECTION COSTS WILL BE GREATLY INCREASED AND ADDITIONAL STEPS WILL BE REQUIRED PRELIMINARY TO QUANTITY PRODUCTION, SUCH FOR EXAMPLE AS THE FURNISHING OF A SAMPLE CHASSIS AND BODY ASSEMBLED AS A COMPLETE VEHICLE IN ORDER TO DEMONSTRATE THAT THESE TWO UNITS ARE ADAPTED TO EACH OTHER. THE PRACTICE AND EXPERIENCE OF THE POST OFFICE DEPARTMENT IN THIS CONNECTION IS OF VALUE AND IS BEING UTILIZED BY THE WAR DEPARTMENT. HOWEVER, THE PRACTICAL PROBLEMS OF THE TWO DEPARTMENTS ARE ESSENTIALLY DIFFERENT AND THE WHOLE MATTER IS ONE REQUIRING FURTHER STUDY, WITH A VIEW TO ITS POSSIBLE ADOPTION IN FUTURE PURCHASES.

IT WOULD SEEM THAT ONE WAY, AND POSSIBLY THE SURE WAY, TO SECURE THE INFORMATION NECESSARY TO COST ASCERTAINMENT WOULD BE TO REQUEST AND SECURE BIDS ON SUCH BASIS, AND THEREFROM DETERMINE WHETHER THE ASSEMBLING COSTS INVOLVED WOULD LEAVE TO THE GOVERNMENT ANY MARGIN OF ADVANTAGE OVER ACQUIRING THE TRUCKS COMPLETE.

THERE SEEMS, ALSO, A POSSIBILITY OF EFFECTING A SAVING IN SOME INSTANCES THROUGH REQUIRING ALTERNATE BIDS WITH RESPECT TO DELIVERY; THAT IS, F.O.B. PLANT AND F.O.B. STATION NEAREST PLACE OF INITIAL USE. WHERE IT HAS BEEN DETERMINED APPROXIMATELY WHERE THE VEHICLES TO BE ACQUIRED ARE TO BE USED, IT WOULD SEEM THAT METHODS OF DISTRIBUTION OR DELIVERY MIGHT BE SUCH AND POSSIBLY SO VARIED THAT IN SOME INSTANCES THE LOW BID WOULD BE ONE INCLUDING DELIVERY; WHILE IN OTHER INSTANCES, F.O.B. PLANT WOULD BE MOST ADVANTAGEOUS.

THIS OFFICE MAY NOT ALLOW CREDIT FOR PAYMENTS MADE ON AWARDS BASED UPON SPECIFICATIONS CONTAINING STIPULATIONS OF THE NATURE HEREIN DISCUSSED, UNLESS EACH SUCH STIPULATION BE FULLY JUSTIFIED OF RECORD HERE BY FACTS ARISING FROM THE PUBLIC NEED. IT NECESSARILY FOLLOWS THAT ON THE RECORD NOW HERE IT MUST BE HELD THAT THE APPROPRIATION PROPOSED TO BE CHARGED IS NOT AVAILABLE FOR PAYMENTS RESTING UPON THE SPECIFICATIONS EMPLOYED AND THE BIDS SUBMITTED THEREON. IF IT IS BELIEVED ANY OF THE SPECIFICATIONS MAY BE SO JUSTIFIED, THE FACTS, UPON SUBMISSION, WILL BE GIVEN PROMPT CONSIDERATION.



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