We believe that the Corporation's complaint about the time required for review of our Small Business Circulars to find procurements of interest is more apparent than real. Our mailing lists are already broken down into 20 commodity classifications, and subscribers receive only those Circulars and Bulletins which include items which are within the commodity groups in which they have indicated an interest. To assist U.S. suppliers in determining whether any of their particular products are included in a Circular, the first page of each Circular also indexes the items which it contains. A further breakdown of our mailing list to the specific product level, and individual mailings to interested firms would be excessively costly and is a practical impossibility. The description of the items to be purchased, and their specifications, are prepared by the foreign importers—not AID. We believe it is understandable that importers in the relatively unsophisticated and developing nations of the world will describe the items they wish to buy in terms of the equipment they know or have seen exhibited locally. Descriptions of an item by such importers in terms of Federal specifications is a practical impossibility. During the hearings which were held on May 15 and July 31, AID witnesses expressed the belief that since AID finances purchases which are made by foreign importers and does not itself procure, a small business setaside program for AID's commercial import programs is impracticable, would interfere with the accomplishment of the primary mission charged to AID by the Congress, and might result in an overall loss of exports by the United States. We have agreed, however, to re-examine the practicability of adopting a set-aside program and will report our findings as soon as the review has been completed. PEROXIDE & SPECIALTIES CO. Hon. JAMES C. CORMAN, PEROXIDE & SPECIALTIES Co., Chairman, Subcommittee on Government Procurement, House Small Business Committee, Rayburn House Office Building, Washington, D.C. DEAR MR. CORMAN: First, let me commend you for the fine representation you provide for both California and the Nation. Your leadership as a Congressman has shown us that, so long as we continue to elect officials of your caliber, we need not worry over the future of our country. We write with particular reference to the hearings, scheduled to begin May 15 under your chairmanship, concerning American small business participation in the procurement of goods and services financed with AID funds. Through our own limited experience, we find this is, indeed, an area which deserves further study. Our company has developed to the point where we feel we can now competitively bid on hydrogen peroxide requirements for foreign countries, especially Vietnam. We are on a mailing list to receive AID Small Business Circulars announcing commodity requirements for countries involved in the AID program. A sample of this Circular is enclosed for your ready reference. Herein lies our problem. We have, from time to time, submitted bids for hydrogen peroxide as announced in this circular. However, as of yet, we have no idea whatever whether our bids are even looked at by the people requesting these bids. We do not know if our bids are, in fact, competitive, or whether we are merely wasting our time and effort drawing up such bids. We have corresponded with AID in Vietnam requesting this information, and as of yet have had nothing from them in response. A copy of our letter to AID in Vietnam is also enclosed. We seek no special favors. We merely seek a chance to compete on equal terms. We have been awarded several contracts with the Defense Supply Agency and are confident our prices are competitive. However, when contracts with the DSA are awarded, we are fully informed by DSA as to who has been awarded the contract and at what price. This information is valuable and necessary to us, if we are to continue supplying the government's needs at the lowest possible cost. Should the opportunity arise during the hearings, we would appreciate your finding out the following information: 1. Is a standard bid form or fascimile available to small business firms? If so, how may these be obtained from AID? 2. Can a small business find out, on a particular bid, who was awarded the contract and at what price? How? 3. What methods are used to announce award of these bids? The State Department must be spending a great deal of money to publish the "Trade Opportunities for American Suppliers" and without a follow-up program, we feel a great waste of time and money is involved. We would appreciate receiving a copy of the hearings once they have been published, and thank you for your efforts on behalf of American small business. Sincerely yours, RONALD C. PLOUGH, General Manager. P.S. If you wish, please feel free to make this letter a part of your hearings. (339) APRIL 17, 1969. Subject: Bids for AID small business program. Commercial Import Program, In care of the American Embassy, Saigon, Vietnam. DEAR SIRS: 1. By way of background, Peroxide & Specialties Company is a small business primarily concerned with the manufacturing of hydrogen peroxide in different strengths. 2. We have recently become interested in bidding on hydrogen peroxide needs in Vietnam as announced in various AID Small Business Circulars. Enclosed is a sample of an offer we made, reference item 23, AID-S.B.C.-69-87. 3. Since we are relatively inexperienced in bidding on commodities such as these within the AID program, we would be interested in obtaining any information you may have concerning bid format and procedures as may be established for these programs. 4. We would also be interested in any information you may have concerning the award of such bids. This would help us in determining whether or not it is feasible for us to continue bidding on such items, especially if our bids are nowhere near the awarded contract price. 5. Your assistance in this matter will be deeply appreciated. Sincerely yours, GEORGE B. GARDNER, Office Manager. PEROXIDE & SPECIALTIES CO. A very high percentage of the items which appear in the AID Small Business Circulars represent solicitations of offers and quotations by foreign commercial importers who are buying either for their own use or for resale. In this respect, they are the same as the thousands of manufacturers and retailers in the United States who purchase raw materials for fabrication into the products which they themselves manufacture, or who purchase material or end products for resale. As in the case of their American counterparts, their procurement is based on informal negotiation following review of the offers and quotations received. Thus, there is no standard bid form. Unlike procurement made by the Defense Supply Agency under formal Invitations for Bid, with award to the lowest responsive bidder, the buyer is free, under informal negotiated procurement, to accept the offer which he considers most advantageous for his purposes. We can appreciate the desire of American firms which have made offers or bids to foreign importers to learn the outcome of the procurement action. While the dissemination of such information is customary when U.S. Government agencies are procuring under formal Invitations for Bid, this is not necessarily the practice in the case of commercial buyers in the United States, and is probably rarely so in the case of foreign purchasers, particularly when procurement is based on the informal solicitation of offers or quotations. We believe that it would be an unreasonable burden on foreign importers, many of whom themselves are small business firms and must pay for their purchases in full, to require that they inform each responding American supplier of the outcome of their procurement action. We hope to be able to fill this information gap ourselves, however, by periodically publishing award information in the near future. A copy of our Mission's response of June 21 to Mr. Gardner's letter of April 17 is attached for inclusion in the record. JUNE 21, 1969. PEROXIDE & SPECIALTIES CO., 1400 Carroll Avenue, San Francisco, Calif. GENTLEMEN: In reference to your letter of April 17, 1969, we hope that following information will be of interest to you: The bid submitted, reference item 23, AID-SBC 69-87, is essentially adequate, but we would like to suggest that you include the time period that the offer is valid. The bid that received the award for OSB 927.226 was the lowest of five bids under $5,500 (C&F prices). This bid was as follows: US$239/MT (16 MT). Total $3,824 1, 161 129 69 5, 184 We would like to add, however, that there are a few instances when the lowest bidder may not receive the award. This occurs when the importer states clearly valid reasons for not choosing the lowest bidder. Among such reasons that receive consideration are the following: 1. The product is superior to other brands, and the importer's business requires a superior product. 2. There is evidence to indicate that the supplier of the lowest bid is unreliable. If you desire to continue bidding on such items, you may find it helpful to appoint an agent in Saigon. Information concerning this may be obtained from the Commercial Attache. We appreciate your interest in the Commercial Import Program and hope that you will continue to participate. Sincerely yours, W. VON SPIEGELFELD, Chief, Commodity Analysis Branch, Commercial Import Program. RETZLOFF CHEMICAL CO. Re AID-financed purchases. RETZLOFF CHEMICAL CO., HOUSE SMALL BUSINESS COMMITTEE, 2361 Rayburn House Office Building, Washington, D.C. GENTLEMEN: Your invitation to write to the Committee regarding our views and recommendations concerning reference matter was received, and herein we answer as follows: (1) Set aside quotas should be based on Schedule B-AID commodity code numbers. (either 7 or 10 digit numbers) (2) In order to qualify as a small business, not only the exporter, but also the manufacturer or manufacturers of the end products or components of the commodity to a minimum of 50% of its value, should be required to be small business concerns. We would also like to point out that due to the lower profit of exports as compared with domestic sales, from the paper work involved (more than twice as much under AID), to the lack of proper organization for direct export, to the hazards of foreign trade, to natural inertia and to several other reasons, reference program may not be as successful as expected unless : "Some other incentives are added to promote exporting among small business concerns, for example: To exempt from federal income tax the first $100,000.00 worth of their profits, per year, resulting from export operations whether it is under an AID program or not." If we can be of any further assistance, please let us know. Respectfully yours, GABRIEL DE CUADRA, Coordinator, International Operations. RETZLOFF CHEMICAL Co. During the hearings which were held on May 15 and July 31, AID witnesses expressed the belief that since AID finances purchases which are made by foreign importers and does not itself procure, a small business set-aside program for AID's commercial import programs is impracticable, would interfere with the accomplishment of the primary mission charged to AID by the Congress, and might result in an overall loss of exports by the United States. We have agreed, however, to re-examine the practicability of adopting a set-aside program and will report our findings as soon as the review has been completed. The proposal to provide special incentives to small business exporting firms in the form of tax exemptions is a matter which is not within the purview of AID. (342) |