Books and Documents > Medical Department of the U.S. Army in the World War, Volume III, Finance & Supply
CHAPTER V
ADVERTISING FOR BIDS
As noted elsewhere, the laws and regulations governing the purchase of supplies for the Military Establishment require that information concerning the articles and quantities to be purchased be made public. The prescribed publicity was obtained by advertisements inserted in newspapers and other periodicals; by circulars of advertisement sent to prospective bidders and posted in public places such as post offices, courthouses, and other Federal buildings; by written and telephonic requests for quotations; and by other means. Advertisements in daily newspapers did not appear daily as a rule, but a sufficient number of insertions appeared at stated intervals during the period preceding the closing of the bids to insure adequate circulation of the information. In the more formal methods of advertising, a day and hour is specified, prior to which offers will be received. The time which is required to elapse between the original issue of the advertisement and the date set for the closing of bids varies between 10 and 60 days, according to the class of articles, the quantity, and the urgency of the need for them.1 If the need be very urgent periods of less than 10 days may be authorized. In its purchases the Medical Department very rarely resorted to newspaper advertising for bids. The circular of advertisement was customarily used for purchases of supplies in quantity, and written and telephonic requests for quotations for purchases in small quantities
As the daily business of the purchasing bureaus increased, the original requirement that all public supplies be purchased after advertising became onerous and irksome, especially in the routine of small purchases. The delay incident to this requirement was often very inconvenient and relief was sought. The stringency was relieved in 1906 by the authority to make purchases inaniounts less than $500 according to commercial practice and without advertising.2 This enactment permitted the less formal methods of obtaining quotations just mentioned.
The basic law which required advertising as a necessary preliminary to the purchase of supplies contained also a proviso whereby that requirement could he dispensed with in time of public emergency. In April, 1917, the Secretary of War decided that such an emergency existed within the meaning of this law and authorized the purchase of supplies without advertising.3
This, however, in so far as it concerned the Medical Department, changed only the method of communicating the need to the prospective bidders, who under conditions then existing were necessarily the manufacturers. It was manifest at that time that only by every manufacturer of the articles required
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producing to his utmost capacity could the quantities needed be furnished within the time available. The extent of the need for medical and hospital supplies was fully presented at a meeting of manufacturers held in Washington, April 9, 1917. The requirements by commodities were furnished the executive committees of the respective associations of manufacturers of the commodities involved. These committees, with the exception of the pharmaceutical manufacturers, undertook to distribute those requirements among the members of their associations in accordance with their abilities to produce. The prices to be paid for the articles were furnished the purchasing officers by the manufacturers either directly or, more commonly, through the committee. The manufacturers of pharmaceuticals desired the publicity to be given through advertising in the customary manner, but for smaller quantities at comparatively frequent intervals, in order that the drug market would not be upset.
The placing of orders for supplies through manufacturers` committees as originally constituted failed to meet the approval of Congress and the method was discontinued. Advertising as a preliminary to the purchase of supplies was thereupon resumed by the Medical Department, and the requirement was observed during the remainder of the war. Full publicity, early in August, 1918, was required by the War Department to be given to proposed purchases and to award of contracts by the various supply bureaus. This decision was the result of the following proviso in the appropriation act approved July 9, 1918: 4
Provided, That where practicable to do so, no work be done on contract made under or by authority of any provision of this act on or under a percentage or cost-plus percentage basis, nor shall any contract, where circumstances so permit, be let involving more than $1,000 until at least the responsible competing contractors shall have been notified and considered in connection with such contract, and all contracts to be awarded to the lowest responsible bidder, the Government reserving the right to reject any and all bids.
Such publicity, however, could not be used indiscriminately without disclosing information which would be of value to the enemy. To prevent this each bureau was required to furnish the director of purchases and supplies a list of all the articles purchased by it and to indicatethereon those articles concerning which the information usually contained in circulars of advertisement to the trade would be of substantial military value to the enemy and the reasonstherefor. The names of all articles which were determined by the military intelligence division of the General Staff as being likely to convey such information to the enemy were deleted and the censored list returned to the supply bureau originating it. Thereafter whenever articles on the censored list were to be purchased circular proposals were issued and the full publicity required was given to the purchase. If any doubt arose about the propriety of publicity of the quantities, specifications, or other details concerning an article on the censored list the circulars were not issued until cleared by the military intelligence division. There was the possibility that, even after the bids had been opened, information might be conveyed by making public the award. To prevent this the abstract of bids and proposed awards were cleared through the military intelligence division, after which full publicity was given.5
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FORM OF CIRCULAR ADVERTISEMENT
Among other forms required by the Medical Department one had been provided for circular advertisements, or circular proposals, as they were often called. This form was used by hospitals when purchases requiring advertisement were authorized to be made locally. It was not prescribed for depot use. At each depot a somewhat different form of circular had developed as a result of individual experiences in the purchase of supplies, but the differences were not material. The general arrangement and requirements of this form are shown in that of the general purchasing office, Medical Department, which appears below. The conditions and instructions stated in these circulars varied with the commodity being purchased. As a rule, during the war, each circular was limited to a single commodity or to two or three at most. This arrangement made distribution more convenient. The pages containing the stipulation or conditions were mimeographed or multigraphed except for the date and number, which were added as needed. The schedule for each commodity was prepared separately for the convenience of the bidders. Separate circulars according to commodity required little if any more time for preparation than a consolidated schedule.
GENERAL PURCHASING OFFICE, MEDICAL DEPARTMENT, UNITED STATES ARMY
Unit F, Wing 3, Seventh and B Streets NW., Washington, D. C.
To be opened 10 am., June 20, 1918. Circular No. 3.
The Medical Department of the Army requires the materials on the attached lists in the quantities indicated. Bids submitted should quote prices f.o.b. cars or f.a.s. wharf (at the option of the Government), in the city in which contractor` s works are located, and must state the amounts that can be delivered in 30, 60, 90 days from date of notice of award. Bids for any part of any or all items will be considered.
Quotations must be submitted in duplicate and must be mailed in time to reach this office by the time set for opening.
Bidder` s name .......................................................................................................
Office address .............................................................................
.....................................
[Signature of responsible officer of firm.]
Address of factory ..............................................................................
CONDITIONS AND INSTRUCTIONS
1. Proposals will be received for one or more of the items specified.
2. The Government reserves the right to reject any or all bids or any part thereof; also, in accepting a bid, to order less quantities of any or all items than those specified, or with the bidder` s consent, greater quantities, not exceeding, however, in any one item, an increase of 50 per cent.
3. The net price is to be stated, per bottle, pound, or other unit, as indicated after each item, after all deductions for cash or any discount.
4. Excess space in bottles containing pills and tablets must be filled with cotton, clipped paper, or other suitable material.
5. In view of present shipping and economic conditions, the former regulations requiring shipping cases to be made of ¾ inch material will not be adhered to where the contractor is able to furnish a lighter container which shall be of sufficient strength and rigidity to transport supplies in good condition and withstand reshipment.
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6. The price is to include all necessary bottles, tins, cartons, boxes, packings, etc., and delivery f. o. b. works. The containers and packings are to be new and of uniform and appropriate make and size. Each shipping package must be marked with the number of the purchase (or contract) order, the name of the contractor, and a list showing the exact contents of the package; these marks are necessary for identification.
7. Articles bought on sample must be equal to it. The quality and character of preliminary samples will be ascertained by such tests as the Government may choose, conducted by its officers. The quality and character of all articles delivered under awards made under this circular will be ascertained by similar tests of samples taken by the Government at random from lots delivered. Drugs and medicines for which a standard is established by the latest edition of the United States Pharmacopeia must be in accordance therewith. Other articles must conform to the specifications. All articles will be subjected to rigid inspection before acceptance.
8. Preference will be given to articles of domestic production or manufacture, conditions (if quality and price (including in the price of foreign production and manufacture the duty thereon) being equal.
9. Each proposal should give the place of business and post office address of the bidder, with county, State or Territory, and should be signed by the bidder with his usual signature in full.
10. A proposal by a person who affixes to his signature the word President," \u0018 Secretary,` ` Agent,\u001d or other designation without disclosing his principal is the proposal of the individual. That by a corporation should be signed with the name of the corporation, followed by the signature of the responsible officer authorized to bind it in the matter. That by a firm should be signed with the firm name by one of the Inembers of the firm.
11. No erasures, alterations, or additions should be made in the specifications. Bidders may submit alternate proposals or make explanations by letter filed with their proposals in the blank spaces on the latter. On items specifying alternate packing, bidders must state contaiuier they propose to furnish. Prices quoted opposite the items without qualifications or remark will be understood as for the identical articles listed.
12. Bidders must state the time when they propose to make deliveries on each and every item.
13.When the amount accepted under any bid exceeds $500, and delivery there under is not to be immediate, the bidder will be required to enter into formal contract, and in proper cases to give bond, with good and sufficient sureties, to secure its performance.
14. Transfers of contracts, or of interests in contracts, are prohibited by law.
15. Proposals must be in the possession of the officer addressed before the hour appointed for the opening. No responsibility will attach to the officer for the premature opening of any proposal not so indorsed as to clearly show its character.
16. Proposals received prior to the time of opening will be securely kept. The officer whose duty it is to open them will decide when that time has arrived, and no proposal received thereafter will be considered except that when a proposal arrives by mail after the time fixed for opening, but before the award is made and it is clearly shown that the non-arrival on time was due solely to delays in the mails for which the bidder was not responsible, such proposals will be received and considered.
17. Bidders must, if called upon by the awarding officer, furnish satisfactory evidence before the award is made, of their ability to carry their proposals into effect.
18. Before the time for opening bids any bidder may, without prejudice, withdraw from competition by giving written notice of his decision to the officer holding his bid, and when his bid is reached at the opening it will be returned to him or his authorized agent unread.
19. All tablets must conform to the following general specifications: Tablets must be well made, of uniform size, and accurate as to quantity of active ingredients. They must be of medium friability, neither too fragile for rough handling in transportation nor so hard as to powder with difficulty, and equal to the standard in every respect. When furnished in bulk they must be well packed in suitable tin containers.
20. All items advertised as per sample\u001d can be examined at this office.
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21. Samples, when required, or when voluntarily forwarded by the bidders when they propose to furnish articles other than advertised for, must be furnished free of all expense to the Government and must be forwarded in time to reach this office prior to the opening of the bids. A duplicate memorandum invoice will be prepared, one copy to be packed with the samples and the other copy to be inclosed with the proposal. This office will not be responsible for samples unless such invoice is furnished. Samples will, upon request, be returned at the expense of the bidders, except that in any case the right is reserved to destroy any samples submitted whenever it may be considered necessary to do so for the purpose of testing, and no allowance will be made for such samples. Samples must be plainly marked with the name of the dealer and the number of item to which they pertain. Samples must not be inclosed with proposals.
22. Alternate proposition may be submitted. Variations from standard goods or specified packings must be cited.
FORM OF BID
It will be observed from this form that the circular became a bid, or proposal, when the bidder entered his quotations and times of delivery in the appropriate columns opposite the article or articles he proposed to furnish, modifying the quantities to suit his ability if unable to undertake the entire amount, and signing his name in the space provided for that purpose.
DISPOSITION OF BIDS RECEIVED
In conformity with the general regulations already quoted, the bids were securely kept until the time specified in them for the opening. When that hour had arrived the bids were opened in the presence of such bidders as desired to be present. The abstract of them was made and consideration given to the matter of award. When the award had been made and the contracts signed, one copy of the bid was forwarded to the returns office, Department of the Interior, together with the copy of the contract required by that office.6 The other copy was retained until the contract had been fulfilled, when it was destroyed.
AWARDS
The law contemplated that the award should be made to the lowest responsible bidder. This principle was followed, as a rule, in the purchase of pharmaceuticals because the specifications were definite and the standard thoroughly well known to the trade. For other articles the principle was followed as far as practicable. The low bidder does not always bid on the article specified in the circular and his bid can not be accepted for that reason. During the World War it seldom happened that any one manufacturer could furnish the entire quantity within the time limit fixed by the military conditions, and it became necessary to divide the award among several or all the bidders on some particular article. If the quantities were such as to require the combined efforts of all the bidders and there were no other sources of supply, no discretion was necessary in making the award; every one received all he could produce. But in cases where production exceeded the requirements it was necessary to determine whether the award should be made to the lowest bidder or otherwise. Until the summer of 1918 the making of awards had been left entirely to the judgment of the purchasing officers in the depots. They were generally supervised by the officer in charge. After production had
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been speeded up during 1917, and especially after industry had been divided by the War Industries Board into essential and nonessential, competition for bids became more keen. There was a tendency to criticize awards when not made to the lowest bidder. It happened not infrequently that the new bidders were not qualified by experience or equipment to produce the articles upon which they bid and it was necessary to reject their bids. To overcome this criticism, instructions were issued by the Surgeon General in July, 1918, to the purchasing agencies of the Medical Department directing that boards of award be appointed.7 These boards were to be composed of two or more qualified officers to whom all bids entailing an outlay of more than $500 were to be submitted for consideration and approval before the purchase order was placed. These boards were appointed at the depots in New York City, Washington, St. Louis, and San Francisco, and in the general purchasing office in Washington, and continued to function until the need for purchases was ended by the armistice.
REFERENCES
(1) Act of July 5, 1884 (22 Stats. 109).
(2) Act of June 6, 1906 (34 Stats. 258).
(3) G .O. No. 49, War Department, April 28, 1917.
(4) Act of July 9, 1918 (40 Stats. 845).
(5) Supply Circular No. 75, Purchase and Supply Branch, Purchase, Storage, and Traffic Division, General Staff, August 3, 1918. Subject: Publicity of War Department contracts and awards.
(6) Section 3744, Revised Statutes.
(7) Letter from the Surgeon General to the officer in charge, Field Medical Supply Depot, Washington, D. C., July 11, 1918. Subject: Appointment of board of awards. On file, Finance and Supply Division, S. G. O., 713 Misc./59.
