PROCUREMENT METHODS AND PROCEDURES OF THE PROCUREMENT DIVISION, UNITED STATES TREASURY DEPARMENT 3 Major Functions of the Procurement Division. The Procurement Division, United States Treasury Department, is charged with the determination of policies and methods of procurement, warehousing, and distribution of Government property, facilities, machinery, equipment, stores, and supplies; the performance of all activities incident to the purchase in definite quantities of those supplies for which requirements can be anticipated and consolidated; the negotiation of contracts for those supplies of the departments and establishments for which requirements cannot be consolidated in definite quantity purchase but for which common contracts can be made with advantage to the Government; and the warehousing and distribution to the departments and establishments of supplies maintained as stock items in the Procurement Division building. In addition to these definite purchasing and warehousing functions, the Procurement Division is responsible for (a) The preparation and maintenance of the Federal Standard Stock Catalog, involving the analysis of commodity records so as to develop uniformity of nomenclature, to provide standard arrangement for storage and issue of warehoused stock, to assign precise designations for individual items, and to establish and maintain uniformity in the cataloging of supplies; (b) The preparation and maintenance of Federal Specifications; (c) The coordination of all matters pertaining to contract forms and general policies pertaining to contract procedure; (d) The coordination of the Government's freight, express, and other traffic activities within the continental limits of the United States; (e) The coordination and supervision of the disposition of surplus property in Washington and in the field, and of property seized and forfeited under the Federal Alcohol Act and the Liquor Law Repeal and Enforcement Act of 1935, and firearms seized and forfeited under the National Firearms Act; and (f) The maintenance of an accounting activity to clear vendors' bills in payment for deliveries made on Procurement Division orders, to effect reimbursement to the Procurement Division's capital account for purchases made for other Federal agencies, and to maintain financial records of the business of the Procurement Division. The principal procurement operations are the negotiation of term contracts and actual purchasing, or procurement otherwise, as by transfer of surplus property, of supplies used in various Government Material obtained from the Procurement Division, U. S. Treasury Department, Washington, D. C. establishments, exclusive of realty, and also excluding the requirements of the Army, Navy, and Marine Corps. This centralization of procurement responsibility is based on the fact that large quantity procurement, made possible through consolidation. of requirements of various Federal activities, offers certain economies and advantages to the Government consumer, important among which are Minimizing overhead cost by eliminating the duplication which attaches to the large volume of small purchases represented by one term contract or purchase of a corresponding consolidated procurement; Standardization of character and quality of requirements through study of actual needs and establishment of standards accordingly, as reflected by adequate specifications; Lowest prices consistent with proper standards and a competitive market; and Better opportunity to apply effective inspection practices. These general functions of the Procurement Division are accomplished in part by delegation of authority to certain other agencies and in part by actual handling of details through this division and its field offices. The fundamental of competition which governs all procurement negotiations is that proposals must be invited from a wide field of potential suppliers and award must be made to the lowest responsible bidder meeting the specifications and conditions. In the case of relatively small purchases, exemption from strict observance of this rule is given by statute, such exemptions varying with different appropriations from $50 to $300. "Procurement" as applied to the activity of the Procurement Division has a broad meaning. It includes, together with certain related activities, two particular features: (1) The contractual function under which sources of supply for standard materials are established for terms up to 1 year, and (2) actual purchasing either from established term contracts or in the open market. Specialization of functions. Standard nomenclature.-All supplies purchased by the Government are precisely identified and cataloged according to a prearranged system to assure the use throughout the Government service of standard commodity nomenclature, to facilitate the establishment of uniform records and promote comparable analyses thereof, and to provide a uniform plan for storage. As of January 1, 1940, about 500,000 items have been so cataloged. Classes. This large commodity field is treated under "classes" of related articles. There are about 60 such "classes"; e. g., "Class 5Flags and bunting," "Class 58-Railway, dock, and fire-fighting apparatus." Item identification.-The identification of the individual item consists first of the number of the class, followed by the initial letter of the article, then the number which is assigned to the article itself, supplemented by subordinate numbers or letters as the elaboration by types or size requires. Thus, 1 ounce glass-stoppered bottles, of a certain description, in lots of one dozen would be "57-B-7530-(a)"; in gross lots it would be "57-B-7530-(b)," etc. Commodity groups. As a matter of practical operation, the handling of the technical activities of contracting and purchasing is organized so that related commodity classes are associated and assigned to groups of specialists, hereafter identified as "Commodity groups, ," whose interests are concentrated on items within their respective fields. This arrangement promotes expert knowledge and skillful treatment in perfecting specifications, in effecting adjustment, in buying against account in the event of failure of timely or acceptable delivery, and in handling other details relating to the transactions. There are a number of such commodity groups, one handling, for instance, class 29 (toilet articles and all accessories, outfits, and parts), class 51 (acids; chemicals; drugs; gases; soaps; abrasive materials; cleaning, cutting, and polishing compounds), and class 57 (hospital, laboratory, and surgical apparatus; and all accessories, outfits, parts, and supplies). The following is a list of items contracted for by the Procurement Division: Acids; chemicals; drugs; gases; soaps; abrasive materials; cleaning, cutting, and polishing compounds. Agricultural implements and all accessories, outfits, and parts. Airplane accessories. Ammunition; ammunition details; blasting-apparatus; bombs. Arms, small; and all accessories, outfits, and parts. Athletic equipment, recreational apparatus, sporting goods, special wearing apparel. Bakeshop and kitchen apparatus and utensils: Aluminum utensils; galley gear; tinware; and all accessories, outfits, and parts. Bathroom and toilet fixtures; and all accessories, outfits, and parts. Bolts, nuts, rivets, screws, washers. Books, blueprints, charts, drawings, libraries, maps, newspapers, periodicals, professional publications, etc. Boots; shoes; leather and rubber clothing. Brooms, brushes. Building materials: Asphalt, brick, cement, glass, granite, gravel, lime, millwork, roofing material, sand, stone, tar, tiling, etc. Caps; hats; gloves; men's and women's furnishings. Cordage: Hemp; jute; oakum; twine; including manufactured articles. Dry goods: Bedding, buttons, curtains, cushions, draperies, findings, floor coverings, linoleum, oilcloth, textiles, trimmings, upholstery materials, yarns, etc. Duck; canvas; tentage; including manufactured articles. Engine room and fire room fittings, supplies, and tools. Flags, bunting. Food: Groceries, ice, provisions, subsistence. Forage; bulbs and roots; plants, shrubs, and trees; seeds. Fuel: Charcoal, coal, coke, dust fuels, gas, gasoline, oil (fuel), wood, etc. Furniture. Gaskets; hose; packing; rubber (sheet and strip); hose fittings; tubing (flexible); including manufactured articles. Hardware (builder's general). Hospital, laboratory, and surgical apparatus; and all accessories, outfits, parts, and supplies. Instruments of precision of all accessories, outfits, and parts. Leather: Belting, harness, saddlery, including manufactured leather articles. Lighting apparatus (nonelectric) and all accessories, outfits, and parts. Lumber; timber; (barrels, boxes, cases, crates) wooden; railroad ties; including manufactured lumber. Machinery and equipment. Metal in bars (flat, hexagon, octagon, round, square); billets, ingots, pigs, slabs. Metal in plates and sheets. Metal shapes (angles, channels, half-rounds, I-beams, T's, Z's, etc.); structural metal. Motor vehicles; bicycles; trailers; and all accessories, outfits, and parts. Office equipment: Adding machines, cash registers, file cases, numbering machines, typewriters, etc. Oils (illuminating and lubricating), greases, and all lubricants. Pipe fittings. Pipes, tubes, tubing (nonflexible). Pumps and their parts. Radio and sound-signal apparatus and all accessories, outfits, and parts. Railway, dock, and yard equipment; including fire-fighting (and meteorological) apparatus. Rope, wire; and wire, bare; including manufactured articles. Stationery Bags, paper; books, blank; boxes, paper; cartons; drafting-room, office, and printer's supplies. Tableware (barracks, crews' mess, hotel, hospital, officer's mess, ship-saloon): Aluminum ware; chinaware; glassware; silver ware. Textile clothing; knitted goods. Tobacco products: Cigars; cigarettes; and all accessories, outfits, Toilet articles and all accessories, outfits, and parts. Tools, machine (bending rolls; drop hammers; drills; grinders; Vehicles (animal- and hand-drawn); and all accessories, outfits, and parts. Inspection. Stress is laid on the importance of inspection. Without competent inspection, all of the effort of careful specification writing and attention to other details designed to assure compliance with the requirements would be fruitless. Rigid examination of deliveries prior to acceptance and payment is the vital and concluding step of procurement. Occasionally, in connection with orders placed by the Procurement Division, it is necessary to send inspectors to examine deliveries in the field or to inspect commodities in the process of manufacture. The Procurement Division inspection facilities are available to other Government agencies upon request. A pamphlet entitled "Directory of Inspection Services and Testing Laboratories of the Federal Government," prepared in collaboration with the National Bureau of Standards, has been made available to Government purchasing offices. Deliveries to Procurement Division.-All commodities received in the Procurement Division Building are inspected as to quality and quantity by trained personnel. With many commodities, qualitative inspection is accomplished promptly in the Procurement Division, either on the basis of the expert knowledge of the inspectors or through chemical or physical tests made in the inspection laboratory. Where the simpler technical facilities available in this Division are inadequate to an exhaustive analysis that may be necessary the inspection office arranges for appropriate tests through the National Bureau of Standards, the United States Department of Agriculture or elsewhere. In either case an authoritative inspection is accomplished. Field deliveries.-Normally deliveries outside of Washington must be inspected by the consignee, for which purpose data is supplied as a basis for checking on the acceptability of the commodity received. In some instances this information is in the form of a copy of the invitation to bid; in others it may be the detail given in the General Schedule of Supplies or on the delivery invoice supplied by the purchasing officer. Frequently, in the case of General Schedule items, a delivery sample may be forwarded to the Procurement Division in Washington for comparison with the official sample so as to determine acceptability. Character of Procurement Transactions. Procurement, as organized in the Procurement Division, may be either (1) the negotiation of a term contract; or (2) the purchase of a definite quantity in the open market, hereafter referred to as a "spot" purchase; or (3) a stock (warehouse) transaction, the distinctions between which are explained as follows: General Schedule of Supplies (term contracts).—Under this category term contracts are negotiated for many thousands of items in regular use by several agencies; e. g., furniture, chemicals, hardware, auto parts, etc. These engagements are usually made for a 1 year term, though occasionally market conditions make it necessary to accept proposals for a shorter period. New contracts are made annually for each item so long as general demand is sustained. Items found to be inactive are dropped. Detail as to commodities so placed under contract is circularized to all Federal agencies for their independent use by a catalog entitled "General Schedule of Supplies." This catalog contains all information essential for ordering purposes and cites the conditions of the contract. It is issued in sectional form by classes. The issue of the various classes is staggered so as to spread the work involved evenly over the year and thus avoid the congestion which would be apt to occur if the whole publication were made as one volume on any one date. Items covered by the General Schedule of Supplies may not be purchased by Government offices in Washington from sources other than prescribed in the schedule, and the degree to which the same 272496-41-No. 24-18 |