principle is mandatory on offices in the field is stated in each class schedule. Samples of many items covered by these contracts are maintained. for examination by agencies contemplating purchase and also as a standard against which deliveries may be compared. The approval of items for inclusion within the General Schedule of Supplies is a responsibility of the Director of Procurement and is based on probable demand as well as on the character of the item itself. Items for such consideration are usually developed within the Procurement Division in its normal activities but also frequently through recommendations of the using agencies. The General Schedule of Supplies activity is a major feature of Government procurement and not only saves the using agencies the labor, cost, and delay incident to individual advertising, but assures appropriate price and quality standards, and facilitates inspection of deliveries. Some 50,000 principal items are covered by these contracts, and purchases made from them by Government agencies aggregate about $60,000,000 annually. The majority of term contracts are those which are included in the General Schedule of Supplies. However, some term contracts are made for the use of but one agency; e. g., for the Procurement Division in replenishing its warehouse stock so as to establish a source of supply for an item on which new stock is expected to be required frequently. Open market (spot) purchases.-These are definite quantity transactions, initiated by orders from requisitioning offices, for items which are not covered by General Schedule of Supplies or other term contracts. Such a purchase may be a buy of very simple character; it may be the procurement of a single piece of special apparatus, such as a complete dental office on an auto trailer unit; it may represent a consolidation of orders from 2 or 3 agencies for the same item; or it may represent a large purchase of a common article, as for instance, 980 trucks for 1 agency. Many of these transactions are actions to which the specialized facilities of a large buying organization, such as personnel particularly qualified in specification and inspection work, can be advantageously applied. Stock-Under this activity, commodities of most common use (standard foodstuffs, office supplies, janitor's materials, etc.) are warehoused in the Procurement Division Building to meet such requirements of all agencies in the District of Columbia area and also to supply many field activities. About 1,800 different items, inventorying at approximately $600,000, are thus made available for immediate delivery. Issues aggregate over $3,500,000 annually. Purchase of stock by the Procurement Division warehouse is initiated by a special requisition originating in the warehouse. The purchasing of such requirements may be affected either by (a) ordering from an existing term contract, or (b) establishing a term contract so as to provide a suitable source for reordering, or (c) making a spot purchase where replenishment is not imminent or potentially frequent. Items are added as new demands are established, and discontinued as diminished use indicates. Issue of stock from the warehouse is a simple withdrawal transaction, initiated by an acceptable requisition. Procurement Procedure. Purchase against a term contract.-This type of transaction, whether against a General Schedule or other term contract, is a simple action involving only the drawing of an official order and related documents, under a routine as stated in paragraphs 7 to 13 of the procurement steps discussed immediately following. Negotiation of a contract. This type of transaction follows a fixed procedure designed to assure, in conformance with statutory and administrative requirements, timely deliveries complying with the specifications and other terms of the purchase contract. This fundamental applies whether the transaction relates to the negotiation of a General Schedule, or other term contract, or to a spot purchase. The full course of a procurement transaction is represented by a spot purchase, which includes all steps from the preparation of specifications, invitation, award, issue of purchase order, inspection, payment detail, and various intermediate and subsequent documentation or action. In the case of a term contract negotiation (General Schedule of Supplies or otherwise) the Procurement Division action is completed when the award is made and potential users are informed, ordinarily by issue of a covering section of the General Schedule of Supplies as a basis for issue of purchase order and related documents independently by the using agency. The following presents, in order of their occurrence, the principal steps taken in a complete purchase transaction. Certain minor variations as to style of documents, number and distribution of copies, etc., which occur in practice, are not included in this statement of fundamentals. Principal steps.-1. Mailing list: Timely procurement of satisfactory commodities requires knowledge of dependable sources of supply. In the Procurement Division such information is available through the maintenance of a current mailing list sufficiently comprehensive to assure offers on a competitive basis. Accordingly, a feature of every transaction maturing into an invitation to bid is the establishment from the mailing list of that group of potential bidders applicable to the commodity involved. Access to such a mailing list simplifies observance of the statutory requirements for advertising. 2. Requisition: Upon receipt, this originating authority is recorded, reviewed as to its general sufficiency and authenticity and referred to the commodity group responsible for buying the particular commodity involved. 3. Invitation to bid: An invitation to bid is a request for quotations on supplies. Its preparation is of fundamental importance and first in order of attention. Each invitation includes several standard features, important among which are: (1) General conditions which stipulate observance of applicable statutory requirements, such as those fixing hours and wages, those prohibiting child labor, and those providing restrictions to insure delivery of goods of American origin; and also include provision by which, in the event of contractor's default, the Government may purchase in the open market and hold the contractor responsible for any resulting loss; (2) special instructions or conditions that relate to the particular transaction, i. e., packing, handling, delivery, etc.; and (3) the specifications which set forth fully the qualities required, which detail of description always includes citation of a Federal Specification, in whole or in part, where such specification is applicable. The preparation of an invitation to bid is accordingly a specialized function. 4. Bid opening and tabulation: Bid opening is public and begins aɩ the time specified in the invitation. A clear announcement is made of the identity of the invitation and of the offer of each bidder, as to price, discount, and other basic information. Following the public reading, the bids are tabulated in such manner as to present those common elements which are necessary for consideration in readily comparable arrangement. 5. Award: All bids received on a given invitation, together with their tabulation, are next examined by the commodity group under whose supervision the transaction is being conducted. It evaluates the various offers and determines which of those meeting all requirements is the lowest in price. Award is then made to the bidder so qualifying. 6. Guaranty: Performance guaranties may be required in the case of certain term (indefinite quantity) contracts, or in connection with spot purchases, where the sum involved exceeds $2,000. Such guaranties are in amounts representing a schedule percentage of the probable aggregate amount involved. Bid guaranties evidencing the good faith of bidders may also be required. In lieu of sureties executed on standard forms provided for those purposes, certified checks or Federal obligations may be accepted. The steps discussed in sections 1 to 6 preceding cover the major phases of procurement so far as the negotiation of term contracts is concerned, the final action in such transactions being the circularization of the results through notice in the class of the General Schedule of Supplies affected, or otherwise where the General Schedule is not involved. Procurement procedure involving spot transactions necessarily requires additional steps, such as order placement and other actions, as follows: 7. Purchase order ticket: In order to facilitate the issuance of properly worded purchase orders and related documents, the commodity group details on a "Purchase Order Ticket" all information essential to adequate description, delivery conditions, etc., for the guidance of the typing pool which handles the mechanics of document preparation. 8. Routing: Since shipment of Federal property must be on Government bills of lading, when a purchase is made f. o. b. shipping point the traffic section is required to furnish appropriate routing. 9. Purchase orders: With the information supplied on the purchase order ticket and the routing, the purchase order is drawn and forwarded to the responsible commodity group for examination and signature. Purchase orders are prepared in multiple copy, the various carbons being distributed to an approved list of accounting and administrative offices. 10. Delivery invoice: An invoice on which delivery is to be acknowledged is prepared coincidental with the issue of the purchase order. Under one procedure followed the delivery invoice is a separate document, while under another it is a part of the multiple-form purchase order. Under both practices, however, copies are supplied to the con signee and to administrative or accounting offices in accordance with a fixed distribution list. 11. Bill of lading: Where the purchase is made f. o. b. shipping point, covering Government bill of lading is prepared in multiple copy and distributed under standard instructions. 12. Inspection: Except in unusual transactions, as where in large purchases inspection is made in process or at shipping point, consignees are responsible for the examination of deliveries and for reporting the result of such examination. Official acknowledgment that delivery meets contract requirements must in all cases be on file before payment may be recommended. 13. Payment: The vendor's bill may be submitted on the regular Government voucher form or on the firm stationery. It must include certifications as to compliance with those conditions (as to American origin, observance of wages and hours laws, etc.) cited on the reverse of the purchase order which are applicable to the transaction. Upon receipt in the accounting office, the vendor's bill is associated with a copy of the purchase order, the contract and evidence of acceptable delivery. It is then audited and, if in order, available discount is taken and the account forwarded to a disbursing office for payment. In concluding this brief explanation of Government procurement practices, it should be mentioned that when public exigencies require immediate delivery, as for the protection of life or property, purchases may be made without observance of the requirement governing competition, but payments covering such transactions must be supported by evidence justifying the noncompliance. PROCUREMENT METHODS AND PROCEDURES OF UNITED STATES NAVY DEPARTMENT 4 The Bureau of Supplies and Accounts. The Navy, one of the largest of the procurement agencies of the Federal Government, in general, adheres to a centralized purchasing system. The Bureau of Supplies and Accounts, under the direction of the Paymaster General of the Navy, is the Navy's central purchasing office for supplies and materials. The common requirements of the various naval activities are consolidated, prepared into schedules or invitations to bid and purchased in quantity lots for delivery to the major activities. The Bureau of Supplies and Accounts acts administratively on requisitions for materials which are to be purchased by offices located elsewhere than in Washington. Purchases in the so-called field usually comprise items found necessary to meet a specific project (as distinguished from standard supplies for general issue), articles required to meet an emergency, products of a perishable nature, and articles required in such small quantities that consolidated procurement would not be justified. Thus the Bureau of Supplies and Accounts is the centralized purchasing agency and either procures directly or has supervision over the purchase of all materials required by the Navy, except The Bureau of Yards and Docks prepares schedules, open bids, and makes contracts for public rooms (i. e. buildings, drydocks, etc.) involving both labor and material in construction. The Bureau of Ordnance purchases ammunition, arms, and gun forgings. The Judge Advocate General of the Navy, in conjunction with the Bureau of Ships, contracts for the construction of ships at private shipyards. The Marine Corps performs all its own purchase functions. Navy requirements. The general range of the Navy's requirements can best be presented by the following list of standard classes into which the Navy supplies are segregated for accounting and storekeeping purposes. Acids, chemicals, cleaning compounds, soaps, etc. Automotive and railroad supplies. Belting, gaskets, hose, leather, packing, and rubber. Boilers, engines, etc. Boat and ship supplies. Boats, life rafts, etc. Material obtained from the U. S. Navy Department. |