Evening star., 1940-01-02
0ne-Fourth Of Bids
Received by U. 5. for
Supplies Identical
Revelation to Monopoly
Probers May Bring
Curb on Collision

Approximately one-fourth OF the
bids received for Government sup
plies In 1898 were identical, accord
ing to survey by the Procurement
Division Of the Treasury placed
among the exhibits of the Federal
Monopoly Committee today.
The report. covering As Federal
agencies, disclosed the prevalence OF
such a bidding practice over the Pc
riod from December, 1887, to No
vember, 1888.
"In dollar value" the investiga-
tors found, more than 10 per cent
Of Federal purchases made in this
period were of items on which iden-
tical bids were received by the vari-
Gus Federal purchasing agencies"
The survey showed that Of $780,
044 1870 expended under competitive
bidding during that period. $87,-
1885, 6,426 went for the purchase OF
items which were offered at the
same prices by the bidders. These
figures did not include $53 1856, ,755
spent for contract services-such as
electricity, telephone. gas, water and
drayage-where the rates are regu-
lated by Federal, State or local legis-
lation.
Legislation Proposed.
1t was predicted today that the
Monopoly Committee would recon-
mend at this session legislation to
stop collusive bidding for Federal
business.
The survey under supervision Of
the Procurement Division disclosed
that of 331 ,85l bids opened by Fed
eral purchasing agencies in 1888.
76,705, or about "a per cent, quoted
identical prices.
The Procurement Division, with
out attempting to assess the relative
importance of factors which tend
to encourage the practice of identi-
cal bidding" thus summarized COM
ments by agencies contributing to
the investigation:
The adoption of industrial stand
ards relating chiefly to quality, size,
finish and performance, and the
utilization of standardized manu-
featuring machinery and materials
have the effect of reducing varia-
tions in production costs.
Legislation of whatever sort
which provides for marketing
agreements or for minimum resale
prices, tends to result in identical
prices. Illustrative among these
laws were mentioned State milk
control laws. the Agricultural Mar
keting Act and the National Btu
minous Coal Act
Few Advantages Seen.
Fair practice agreements in in
dustries tend to produce identical
prices.
Price control or leadership by
single or by few leading manu-
facturers in any given industry
tends to cause identical prices. If in
existence, outright price agreements
between purchasers would produce
the same result.
Trade associations are believed
to have tendency to foster prac-
) tices which bring about identical
prices. Among such practices may
be mentioned Cd the adoption of
price schedules; ca the allotment
of sales territory among members
of the association, based on produc-
ton facilities, geographical restric-
tions, transportation limitations or
other basis"
Only out of "a Federal agencies
commenting saw any advantage in
identical bidding
Remedies Suggested.
The affected agencies were asked
to suggest how to bring about the
abolition of the practice of identical
bidding and preserve the principle of
open and unrestricted competition" "
Among the suggestions were that
designated authority investigate
all reports of collusion in bidding on
Government contracts; that invita-
tions for bids be circulated more
widely; that bidders be required to
certify that their offers are not the
result of agreement with any other
bidder; that the Government avoid
specifying materials subject to pat
ents or other monopolistic control
when substitutes are available;
that some bids might be asked
fob. at the point of shipment,
without revealing the destination. -
The summary concluded:
If existing laws do not prohibit
identical bidding and If it is not pos
sible to have enacted such a law
which would be ruled valid, it would
appear that identical bidding will
always be a thorn in the Govern
ment's side"