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Representative BARDEN. And in your auditing you charged it up against them and in their auditing they made no exception? Mr. Tulloss. That is right. Representative BARDEN. Isn't that correct? Mr. TULLOSS. Yes.
Representative BARDEN. There is such a thing as two honest men differing in opinion, isn't that correct?
Mr. Tulloss. Yes, sir; but there was this further problem; we had no authority to draw the line between 1 cent and a million dollars. Now you have provided that line, by exempting all purchases under $500, and that makes our audit very much simpler, and I think, if I may so comment on the law, I think it is a proper authority extended to the Tennessee Valley Authority. We have recommended it in other cases.
Representative BARDEN. That is all.
Representative WOLVERTON. My questions are necessarily confined to your report of 1934, for the reason that the reports for subsequent years are not available to the committee at this time. That is, they are not-it is regrettable that we don't have some independent audit that would make the information available to us that might be the basis for questioning similar to this which is based on the report of 1934.
Now, do you have sufficient knowledge of the facts ascertained by your auditors for 1935, and '36 and '37 to inform us whether there are still exceptions of this character being made by the General Accounting Office to the procedure being followed by the T. V. A. with respect to low bidders?
Mr. Tulloss. Yes, sir; we still have these exceptions.
Representative WOLVERTON. Then, notwithstanding the passage of the amendment which has been read'into the record, as having been passed in the year 1935, the situation still presents itself where the T. V. A. is still unwilling to conform to the statute requiring bids and sale to lowest bidders, as interpreted by the General Accounting Office?
Mr. Tulloss. Yes, sir; we are still-or we are now in disagreement as to the meaning of the amendment just read.
Representative WOLVERTON. Are you able to state from such information as you may have with you today to what extent or in what amount your exceptions have been in the year 1935, '36, '37, and '38, as far as we have gone?
Mr. Tulloss. I do not know, sir.
Representative WOLVERTON. Is it possible for this committee to have that information?
Mr. Tulloss. I think maybe we are assembling such information now; it is not ready.
Representative WOLVERTON. It would be helpful if we could find the extent to which you are still in disagreement with them, to the end that if the committee feels that it is a wise principle of business that a department should advertise for bids and sell to the lowest responsible bidder, that we may find it necessary to write some other kind of an amendment which will endeavor to make that principle effective.
It is hard for me to realize why it isn't effective, even without any law; it is so basic in our municipal and other governmental bodies. I say, will it be possible for us to have that information? Mr. TULLOSS. I think that we will have it; yes, sir. We are working on it, at the office, now.
Representative JENKINS. Has this amendment been read into the record that you are talking about, this amendment as to which there is disagreement? Mr. Tulloss. Yes, sir; I just read it in the record.
Representative JENKINS. If you find it there, would you read it again?
Senator Schwartz. Wouldn't it be helpful to put the original statute, 3709, in, that we have been operating under before? I would like to have that read into the record.
Representative WOLVERTON. If the committee had the opportunity, they might determine that the correspondence that had passed between the General Accounting Office and the T. V. A. with respect to this important matter should be made a part of the record. It is in this report, and I have had the opportunity to read it.
Representative BARDEN. If it is in the report, and the report is available, why put it in the record ?
Mr. BIDDLE. I think most of the correspondence, as the witness said the other day, is already in that long letter from the Comptroller General's office, and is a part of the record itself. In addition to that, when the comptroller of the T. V. A. is called, he will add to
any other correspondence which he may wish. I think that it is now in the actual record itself very fully.
Representative WOLVERTON. I think it is very helpful to have it. Mr. BIDDLE. Yes, sir.
Senator SCHWARTZ. I would like to put in the record section 5 of the Revised Statute 3709:
5. Advertisements for proposals for purchases and contracts for supplies or services for departments of Government. Except as otherwise provided by law all purchases and contracts for supplies or services, in any of the departments of the Government, and purchases of Indian supplies, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same, when the public exigencies do not require the immediate delivery of the articles, or performance of the service. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract, at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals.
And I just wanted to ask you one question. Presuming that you do advertise and
the bids come in and the material man who makes the low bid is, in the judgment of the purchasing officer, because of his past performances or some other reason, not the best bidder, as well as the low bidder, would the purchasing department have any discretion about the two bids? Mr. Tulloss. Yes, sir.
Senator ScHWARTZ. If for any of those reasons they concluded that the lower bidder should not be accepted, then if they did accept some other bid, that would be equivalent to accepting it in the open
market, notwithstanding the fact that some bid had been presented, wouldn't it?
Mr. Tulloss. It might even-if there were a number of bidders, it might mean the elimination of the low bidder, but the competition would still remain as to the other bidders, the next lowest bidder should then be considered. In other words, if there was a good reason to eliminate the low one, the next low one.
Senator SchwARTZ. If they accepted the next lowest bidder, there would be no necessity under the circumstances for readvertising, would there?
Mr. Tulloss. That is right.
Mr. BIDDLE. How about identical bids of which there are a good many? That is a difficult problem, isn't it?
Mr. Tulloss. I do not recall what the decisions of the Comptroller General have been with reference to identical bids. There has been some feeling, I believe, that they were not very good bids. It looked very much like getting together of the parties who would otherwise bid independently, and bidding the same price, so that there would be no competition.
Senator SCHWARTZ. A great number of other private corporations which control their product in which they deal, by a strange coincidence they have quite frequently submitted the same bid on very complicated and large orders, regardless of where they are located.
Mr. Tulloss. Yes, sir.
Mr. BIDDLE. Where there is one bid by reason of the fact that only one corporation is qualified to make the bid, does the Comptroller General accept or reject it on the ground that the clause with respect to competition has not been fulfilled?
Mr. Tulloss. If there has been a fair opportunity for competition such as advertising, or circulars, and the like, and we receive only one bid, there is no question raised.
Representative JENKINS. Let us have the amendment, now.
Mr. Tulloss. The amendment is section 9 (b) of the Tennessee Valley Authority Act as amended by the act of August 31, 1935, as follows:
All purchases and contracts for supplies or services, except for personal services made by the Corporation, shall be made after advertising, in such manner and at such times sufficiently in advance of opening bids, as the board shall determine to be adequate to insure notice and opportunity for competition: Provided, That advertisement shall not be required when (1) an emergency requires immediate delivery of the supplies or performance of the services; or (2) repair parts, accessories, supplemental equipment, or services are required for supplies or services previously furnished or contracted for; or (3) the aggregate amount involved in any purchase of supplies or procurement of services does not exceed $500; in which cases such purchases of supplies or procurement of services may be made in the open market in the manner common among business men: Provided further, That in comparing bids and in making awards the board may consider such factors as relative quality and adaptability of supplies or services, the bidder's financial responsibility, skill, experience, record of integrity in dealing, ability to furnish repairs and maintenance services, the time of delivery or performance offered, and whether the bidder has complied with the specifications.
Representative JENKINS. That in effect repeals what the Senator read, that doesn't actually repeal what the Senator said?
Mr. TULLOSS. No, I don't understand it to be more than an amendment.
Senator SCHWARTZ. As a matter of fact, it includes a good deal of the language of the original statute and isn't it largely declaratory of the practice that prevails generally in departments when they come to consider bids submitted?
Mr. Tulloss. In a large measure, I think that that is true. Representative JENKINS. Let us get the facts about this now. Usually an act like this recites in exact language, or else in language where an irresistible implication is found, that it repeals the previous statement. Now, what is the fact about that? It is largely the same language, and it surely was intended to repeal the other statute.
Representative BARDEN. Isn't this the case: It just enlarges upon that idea in the original statute, where it leaves the question of public necessity.
Representative JENKINS. It might, Mr. Congressman, but if as a matter of fact, somewhere, in the preamble, or in the law of which it is a part, it makes special reference to repeal this, then, of course, the repeal is complete.
Representative BARDEN. If it repealed it, it wouldn't be an amendment.
Representative JENKINS. It could be designated as an amendment.
Representative WOLVERTON. An amendment repeals insofar as it is inconsistent with the original act.
Representative BARDEN. There is nothing inconsistent in it.
Representative JENKINS. You can pass an amendment to a law and amend-take an act that has 30 sections in it, you pass a general amendment, and you leave the first 10 sections and say nothing about it and you come down to the end, and seek to amend the last 20 sections, and you come to the end and you say specifically, most good draftsmen would say specifically that sections from 10 on are repealed.
Representative BARDEN. I was looking at it just as though it was a law in itself, a complete statute.
Representative JENKINS. We aren't able to decide this right now, but somebody ought to bring that information, and the point that I am trying to make is this: That these two big organizations ought not to have a dispute about something that is patent, and if it is patent, this committee could tell whether it is patent as well as they can. We have all of the facts before us, and if either one of them is to blame we can fix the blame.
Representative BARDEN. May I ask this: When your department and some other department gets into disagreement, who referees it? Or do you just keep on fighting?
Mr. Tulloss. I am afraid that we just keep on fighting, in most cases.
Representative BARDEN. That doesn't help the situation much, does it?
Mr. Tulloss. Well, the law contemplates that the decision of the Comptroller General in such matters will be conclusive upon the executive branch.
Representative BARDEN. I will agree with you that that is the Comptroller's idea about it.
Mr. Tulloss. I think that that is written into the law, if you please. It is in section 304 of the Budget and Accounting Act.
Representative BARDEN. Well, isn't that the point of difference, principally, between you and the T. V. A. comptroller?
Mr. Tulloss. Yes; one of them.
Representative BARDEN. Well, now, I am just wondering, if the Attorney General or someone couldn't be a referee between you? We aren't getting anywhere by just fighting it out.
Mr. TULLOSS. The Congress is really the referee.
I may again advert to the numerous amendments to section 3709, by reason of the heads of the departments and establishments, they bave gone to Congress and laid the matter before Congress, and Congress has made exceptions to the law, thereby removing the exceptions that we have taken.
We recognize that practice right along. We do not enter into the case, or participate in reporting to Congress whether or not the recommendation of the department is sound, unless the Congress should call upon us for a report. In other words, there is a constant flow, you might say, of appeals to Congress from the action of the General Accounting Office.
Representative BARDEN. I am not picking on your department; I am for you.
Mr. Tulloss. We are used to being picked on.
Senator SCHWARTZ. There is no affirmative declaration in the original statute that the lowest bid must be accepted; it says that they shall advertise for bids, and if that is true, why, then, it is also true that if there is a reasonable ground for not accepting the low bid, some of which have been specified in the amendment to the Tennessee Act, why, then, the bid that is not the lowest bid might be accepted and still be a reasonable proposition.
Mr. Tulloss. Yes, sir; we try to carry out the idea of what would be prudent, in good business, and protecting the interests of the United States, so that even if there wasn't such a law, I do not doubt but what the Accounting Office would still raise the question as to whe her or not there shouldn't be competition and acceptance of the low bid.
Senator SCHWARTZ. As to the exceptions that you have listed hereand I am not finding any fault with it-did you make an investigation of the various bidders or the circumstances as to why the lowest bid was not accepted in a particular case, or did the T. V. A. furnish you with their reasons or excuse for not taking the low bid?
Mr. Tulloss. The exceptions, many of them, were made from the vouchers, without knowledge as to what the reasons were. Others, we did have access to the reasons for accepting the other than the low bid, and undoubtedly there were a number of cases where no exception was taken because the reason was satisfactory.
Representative JENKINS. I have just one question there: As I listened to the reading of that amendment, I concluded that that amendment is self-sufficient to cover all purchases by the T. V. A.