Competitive Bidding Out

Competitive Bidding Out

Donald Nelson changed the whole Army procurement policy last week. Reason: he wants to help more small firms get in on the war effort, wants the U.S. to get full advantage of their facilities.

To do so he slaughtered the Army's most sacred cow, competitive bidding. Henceforth, the Army and all other procurement agencies must place their contracts by negotiation, not by competition. Speed of delivery, says Nelson's order, not price, shall be the main consideration. Small manufacturers are to have first go at simple, standard articles. The little fellow owning suitable machinery, with minimum need for additions, gets first call on small contracts.

Two men who did much to persuade Nelson to drop competitive bidding are obstreperous Frederick Adams Virkus, Illinois president of the National Small Businessmen's Association and big, balding, conservative Milton Van Slyck, industrial editor of the Chicago Journal of Commerce.

Virkus made a big noise all through the corridors of WPB. Van Slyck quietly dug up the figures for his newspaper. Typical case cited by Van Slyck: some 120 small manufacturers got together as the Chicago Defense Association, Inc., lost three months getting their anti-trust clearance, financial status and ability okayed by Washington,.finally got a chance to bid on an $18,000,000 parachute flare order.

Then came more trouble. Being unfamiliar with Government contracts, they showed a tentative price of $30 to a Chicago Ordnance officer. The Lieutenant looked at the figure, gasped, told them it was much too low. So they revised it to $42, added $6 more when the size of the order was cut. When the bids were opened, the pool's bid was rejected as $1 too high, despite the fact that they had all the needed equipment ready and could start work right away, whereas one of the successful bidders had to build a complete addition to handle the contract.

Morris H. Siegel, who made himself a national reputation as an insurance counselor by his radio attacks on high-cost life-insurance policies, failed to convince a New York jury that he was libeled when a Metropolitan Life branch manager called him a swindler. His $10,000 suit was decided against him-but he still has two other damage actions, totaling $1,000,000, pending against various insurance companies.

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