COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D.C. 200548 B-171563 MARIO WI On Decmber 13, 1970, you sent us a letter from Mr. Vincent P. ReusSngwhich questioned the propfiety of the Government-ownedCincinnati.~~~~~~.~~~~S~~~~~-machine,,by.the S~I~ti~~~E~r~~~Cornpany. m~~p~~~-gg"-~~~~~~~ You requested -‘zbto the sitmtion that weif to detene it warrants an extensive investigation. We discussed this sale with Southern Electronic Engineering Comm, the selling agent; the Defense Contract-Administration Services Region, Atlanta, which was responsible for administering the sale; Department of Defense officials; Mr. Michael P. Reusing of Tucker Tool and Dye Campany;and Mr. Vincent P. Reusing of' NewYork. We reviewed surplus sales regulations and instructions and the bidding and sales records pertinent to this case. The milling machine was manufactured by the Cincinnati Milling and Grinding Machine Company and cost $49,279. ~l21ou.gh the property record showed 1953 as the date of manufacture, Southern Electronic E%@.neeringCanrpsnyadvised us that the machine was actually manu- factured in 194-6or 1947. They stated that this type of machine, ' which traces or mills according to patterns, is no longer mauu- factured. Newer models use tapes for mil.Eng operations. They stated that the machine was no longer dependable for milling and had been used only for drilling holes. According to the property records, repairing, rebuildiug or overhauling the machine would cost $35,ooo. On April 3, 1970, the Defense& Center, which controls all Government-owned idle industrial equipment in the hands of defense contractors, authorized the Defense Contract Admini- stration Services Region, Atlanta, to dispose of the milling machine locally. On July 22, 197'0, Southern Electronic Engineering Company was advised to sell the millings machine using formal bid procedures provided in Armed Services Procurement Regulation (Para. 24.206.2). 50TH ANNlVERSARY 1921- 1971 [cE77 B-171563 The bidders' list furnished to Southern Electronic Engineering Campany contained the names of 16 firms throughout the United States which previously had shown interest in b@ng surplus machinery. On September 30, 1970, Southern Electronic Engineering Company requested bids from all the firms on the list plus two others. Neither Square Service Corporation, the successful bidder, nor Tucker Tool and Die Compsny were on the biddersa list--they apparently learned about the sale through other channels. The invitation for bids specified that sealed bids would be opened at 4:30 p.m ., on October 19, 1970, and that a bid deposit equal to 20 percent of the bid price was required with each bid, Southern Electronic Engineering Company representatives opened the sealed bids on October 19, 1970, in the presence of a Government representative, who witnessed the bid opening and signed the abstract of bids, as required by the Armed Services Procurement Regulation. According to the bid abstract, the following responses were received. iz?2E!x Response' Mickleburgh Machinery Company, Inc., Pennsylvania No bid Campbell-Sorensen,Michigan $2,086 Square Service Corporation, New Jersey $2,180 The Tumpane Company of Georgia $1,720 Machinery Systems Corporation, New York No bid A representative from Ctipbell-Sorensen, the second highest bidder, was also present at the bid opening. On October 21, 1970, an official of the Defense Contract Admini- stration Services Region, Atlanta, approved the sale to the highest bidder, the Square Service Corporation. A representative of Square Service Corporation took delivery of the milling machine on October 26, 1970. The net proceeds of the sale were received on October 28, 1970. In our opinion, the sale was conducted in accordance with Govern- ment regulations and was made to the highest bidder. In accordance with discussions with your office, we plan no further work on this case. Sincerely yours, Assistant of the United States The Honorable William Proxmire United States Senate
Sale of Surplus Government-Owned Milling Machine
Published by the Government Accountability Office on 1971-03-10.
Below is a raw (and likely hideous) rendition of the original report. (PDF)