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Mr. BROWNSON. When these bids came in, under the old system, these envelopes were piled up in your "in" basket. What kind of system did you have for sorting the bids out and putting them in a safe and taking care of them!

Mr. QUEEN. We did not put them in a safe. I opened all of the envelopes and straightened them out and fixed them all alphabetically for tabulation, and threw the envelopes away.

Mr. BROWNSON. And it would have been possible, with the interest of the Retort Pharmaceutical Co. at hand, to change their bids right there. The mistake is not initialed. You do not know who erased it and changed it, do you?

Miss QUEEN. I do not recall having passed the bid that way. It is very strange to me. I do not understand.

Mr. BROWNSON. It was very strange to the subcommittee investigators also.

Miss QUEEN. I cannot explain it. As a rule I do not accept anything with an erasure, especially if it is not initialed.

Mr. BROWNSON. In this particular case we have the erasure not initialed. We have no way of knowing whether that bid was actually erased and changed in the offices of the Retort Pharmaceutical Co. when they were making it out, or where it was changed, do we?

Miss QUEEN. No. I cannot prove that right now.

Mr. BROWNSON. How many invitations to bid would you have had out at one time in 1951 ?

Miss QUEEN. As many as came in, and that is indicated on the tabulation. It is also indicated on the 1489.

Mr. BROWNSON. I mean for all the things for which you were responsible for purchase.

Miss QUEEN. What was your question?

Mr. Brownson. How many different contracts might you have bids coming in on?

Miss QUEEN. It would depend upon how many bidders there were.

Mr. Brownson. I mean just in an ordinary day. When this contract came in you were not taking bids on hexylresorcinol alone; you were taking bids on all kinds of things.

Miss QUEEN. Not necessarily. We usually do not have more than one closing per day.

Mr. BROWNSON. Suppose that somebody in Chicago bid on this hexylresorcinol. He cannot fiendishly calculate the postal delivery so that the letter will arrive there on the morning of the day that you are going to open it, so he is going to mail it in a bit in advance; is he not?

Miss QUEEN. Possibly.

Mr. BROWNSON. He wants to be safe. So in your “in” basket, you have a lot of different bids coming in on different kinds of items, and again different contracts all at once; do you not?

Miss QUEEN. That is right.

Mr. BROWNSON. And what I want to know is, were those sorted out every hour, or every couple of hours, the ones that you were going to open that day? How did you handle that?

Miss QUEEN. I would sort them according to the invitation-to-bid number, and put them in the folder where they belonged. If I were ready to work on the case I would open the bid.

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Mr. BROWNSON. You would take them out of your basket; you would look at the bid number on the outside and put them in the proper basket?

Miss QUEEN. Either sealed or opened.

Mr. BROWNson. I think that you testified that sometimes you do open bids before the closing day?

Miss QUEEN. I did if I was ready to work on them. I very often would prepare my tabulation in advance if I was ready to work on the case.

Mr. JUDD. Did it ever occur to you there might be a little hazard in opening up sealed bids ahead of the time for closing!

Miss QUEEN. As far as I was concerned, there was no hazard because I do an honest job.

Mr. JUDD. As a matter of business practice?

Miss QUEEN. If somebody was prowling around the building and would get into my basket, I cannot account for that.

Mr. JUDD. If you were in our position what would you think? We have to take the people's money away from them for taxes and it is spent by you people. You are honest and you know you are honest, but there are literally thousands of these purchasing agents in the Government. There might be one occasionally that might not be honest. Do you not think that it was a little hazardous to allow purchasing agents to open up bids before the closing date whereby the information in the bids might conceivably get to a competitor who is going to put his bid in a little later?

Miss QUEEN. It could have been hazardous; yes.

Mrs. ST. GEORGE. While we are on that subject, do you not think it is quite possible some such individual might have taken that very sheet we were looking at and made that erasure?

Miss QUEEN. I do not know.
Mrs. St. GEORGE. That would be a possibility?
Miss QUEEN. Our files were not under lock and key.
Mrs. ST. GEORGE. That is what I mean.
Miss QUEEN. Anybody could come in.
Mrs. St. GEORGE.Those files are now probably under lock and key?

Miss QUEEN. They are now. All the bids are in the bid room and we keep them under lock and key.

Mr. Judd. Do you have any idea how many millions of the taxpayers' money is spent or allocated or awarded through your office?

Miss QUEEN. Yes.
Mr. JUDD. How much?
Miss QUEEN. Do you want an actual figure?
Mr. JUDD. An estimate. Is it in the hundreds of millions ?
Miss QUEEN. No.
Mr. JUDD. This first contract is a little minor contract, $200,000.

Miss QUEEN. I once added it up for 1 year, when somebody wanted an estimate of what I spent, and I think that I added up to $10 million for a period of a year. I do not remember what year.

Mr. JUDD. This is a relatively small contract for one country, Indochina. We are doing this for some 52 countries around the world. It is a rather small item at that, $200,000.

Miss QUEEN. I am only one person and I can handle only a maximum amount of work. I am only one person.

Mr. BROWNSON. You have stated, and your records indicate that some of these particular cases concerning the Retort Pharmaceutical Co. actually were processed many, many days after the opening day.

Miss QUEEN. You mean the awards were made.

Mr. BROWNSON. Yes. During all that period of time these things were just lying around in the open files. That was true under the old setup?

Miss QUEEN. They were in the cabinet I have where my bids were.
Mr. BROWNSON. In the cabinet where anybody had access to it?
Miss QUEEN. If anyone got into the room; yes.

Mr. Judd. They did not have to be changed before the closing date; they could be changed after the closing date.

Mr. Brownson. To members of industry, some of these Government contracts are pretty high stakes.

Miss QUEEN. At that time we did not have the restricted closing of files that we have now.

Mr. BROWNSON. I would like to ask somebody from the GSA to prepare for the subcommittee as an exhibit a step-by-step listing of the procedures which were followed at the time this Retort Pharmaceutical case came in in 1 column, and in the other column the procedures followed today, so we can have in 1 exhibit something that would give us a comparison, and with citations as to the regulations that would be encountered in each of those cases.

It seems to me from your testimony, Miss Queen, there has been a commendable tightening up of this procedure, but I am like Dr. Judd, I am utterly aghast at these large contracts, which could have meant success or failure, profit or loss to these business firms, lying around loose where they could be changed beforehand or afterward. It seems to me it exposed the loyal employees of the GSA on all types of potential temptation. It is a system that no employee should be asked to work under.

Miss QUEEN. That system does not exist any more.
Mr. Judd. It wastes the taxpayers' money if they get inferior goods.

Mr. BROWNSON. I am very pleased that the system has been corrected. I think that is commendable, but by the same token I think this case is illustrative of how bad a Government system can get before it does get corrected, and therefore it has a great deal of value as an example,

Mr. Judd. I would like to have our staff get together something for our hearings on how many hundreds of millions, or how many billions a year are awarded in contracts, or spent under contracts awarded, in this fashion through the GSA.

Mr. BROWNSON. We asked for that this morning, Dr. Judd. We particularly asked for a breakdown of the amount of GSA contracts, and the general types that were awarded through the normal open bid, competitive method, and the so-called negotiated method.

Mr. JUDD. I would like to know how many people there are like Miss Queen doing this work who have a similar responsibility. I think everyone is an opportunity for trouble to develop, a potential opportunity, and I just wonder how many there are.

Mrs. St. GEORGE. I would like to join you, Mr. Chairman, in saying that I am greatly relieved that this system has been changed because I think that it subjects people like Miss Queen to considerable penalties and difficulties if these files are just open and lying around so that any unscrupulous person who wants to, can get hold of them. It is very evident that this could have been done.

Mr. BROWNson. I am also impressed by the difference in the handling. I was at the Customs and Naturalization Building awhile ago,

, and to get into the building you have to sign in. Everything is behind wire netting. There are all types of files in different compartments because they realize they are dealing with potential dynamite in the admissibility of citizens to the United States, and this is so completely different.

Mrs. ST. GEORGE. There is nothing so easily destroyed as a scrap of paper.

Mr. Judd. The system was such you could not find out if wrong was being done, and the loyal people had no means of defending themselves if anything went wrong.

Mrs. ST. GEORGE. And it is for the protection of the employees as much as anyone else.

Mr. BROWNSON. The last question I would like to ask is this: What sort of system do you have now! You have spoken of your files, each one of the files having a different contract number, and when the contracts come in you put them in either opened or unopened.

Miss QUEEN. They have a l'equisition number, and there is not a contract until an award is made.

Mr. BROWNSON. Is there on each of the file envelopes the date that contracts are going to close ?.

Miss QUEEN. Yes. The invitation number that is set up has the closing date as a part of the invitation number.

Mr. BROWNSON. How about the period we are talking about?
Miss Queen. It is in the upper right-hand corner right here.

Mr. Brownsox. You are putting them all in the file. What is there that would stop you from putting a letter you might get today in the files when the invitation-to-bid period closed last night?

Miss QUEEN. I did not accept any bids after bid closing.
Mr. BROWNSON. I am trying to work out the system you used.
Miss QUEEN. It went back to the bidder then.

Mr. Brownsox. What system did you use? Here you have numbers on the filing basket.

Miss QUEEN. I do not think we ever had more than one closing a day. My basket was emptied every day and the bids were put in the folder.

Mr. BROWNSON. What is there that would stop some individual from slipping another bid into that folder that came in late?

Miss QUEEN. Nothing at all. It was not under lock and key.

Mr. Judd. You did not, but you could have. You did not receive those that came after the closing date, but you could have.

Miss QUEEN. I could have; yes.

Mr. WILLIAMS. You were a grade 7 in November 1951, when the contracts here under discussion were let.

Miss QUEEN. I think so. I would have to look up to see when I was promoted to a 9.

Mr. WILLIAMS. Could you give us some estimate? Was it within the last year that you went up to grade 9?

Mr. PEED. She has been a grade 9 for several years.
Miss QUEEN. I did not think it was more than a year.

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Mr. WILLIAMS. You are purchasing pharmaceuticals, and you purchased in one year $10 million worth of goods? Miss

QUEEN. Approximately. Mr. WILLIAMS. Do you have any specialties, or products that were just assigned to you to purchase, or was it anything that might come in ?

Miss QUEEN. Our purchasing division is divided into branches, and they are designated by the commodities that are assigned to them. Our branch is No. 2, which is responsible for all classes 57 and 51. Drugs come under 51.

Mr. Brownson. Are there any other people that buy pharmaceuticals besides you in the agency?

Miss QUEEN. For the FOA, Mrs. Falvey and I are the only ones in Branch 2 that buy drugs. Because of the large volume of drugs and the inadequate staff we have, many other people are buying drugs.

Mr. WILLIAMS. You buy chemicals?

Miss QUEEN. Yes; agricultural pesticides, textiles, seeds, everything but the kitchen sink.

Mr. WILLIAMS. All those are on the low-bid basis?
Miss QUEEN. The low bid if there is competition.
Mr. BROWNSON. You are a grade 9?
Miss QUEEN. Yes.
Mr. BROWNSON. What does a GS-9 get a year?
Miss QUEEN. The minimum salary I am not sure.
Mr. WILLIAMS. About $5,000.
Miss QUEEN. I think it starts at about $5,000.

Mr. WILLIAMS. The system was changed. Was it your experience with the prior system that brought you to a realization you should change the system of filing these bids, or how did that evolve?

Miss QUEEN. I think the change in system was the result of a survey made by the survey officer from the Administration Division. They took our opinion and it was my recommendation that the change be made as far as my work was concerned.

I think the central office is probably responsible. What they did was to put us under the exact same procedure that the Federal Supply Purchases do on the domestic picture, so we operated exactly on the same procedure as the domestic purchasing operates on, insofar as it is applicable.

Mr. BROWNSON. Did any person acting for you, the Retort Pharmaceutical Co., the Cole Laboratories, or acting in their behalf, ever communicate with you between the closing of the bids and the awarding of the six hexylresorcinol contracts to the Retort Pharmaceutical Co?

Miss QUEEN. Bidders invariably called up the day the bids closed to find out how they stood. The answer is no information until an award is made, we are sorry.

Mr. BROWNSON. You can say as part of your sworn testimony that nobody acting for the Retort Pharmaceutical Co., the Cole Laboratories, or in their behalf, communicated with you and received any information ?

Miss QUEEN. I cannot say that they did not communicate, but they did not receive any information until an award was made.

Mr. Judd. Do you have the date when this new change went into effect, the new system went into effect?

Miss QUEEN. November 13, 1952.

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