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B-180063 1 (1974-04-05)

handle is hein.gao/gaobaafbb0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 PROCUREMENT AND SYSTEMS ACQUISITION DIVISION APR 5 1974 B-180063 The Honorable Arthur F. Sampson Administrator, General Services Administrat ion Dear Mr. Sampson: We have examined certain companies' practices in selling to the Federal Government. Typically these prac- tices involve offers of premiums, such as small electrical appliances, as an inducement to employees to purchase the companies' products. The Wisconsin Department of Justice's investigations of premiums given by chemical companies to municipal employees have resulted in 22 convictions on 100 felony counts of bribery and extortion as of February 8, 1974. Additional investigations being conducted in several other States have established that the practice is wide- spread within local governments. In reviewing the purchasing activities at 11 Federal installations and contracts for selected chemical products placed on the Federal Supply Schedules, we found 28 in- stances in which premiums were offered to Federal purchasing agents through brochures or catalogs. (See example en- closed.) In our test we did not find that the Federal em- ployees accepted the premiums. Of course it is difficult to determine whether procurement personnel have accepted premiums. Under the circumstances it would seem appropriate for your agency to advise Federal purchasing offices of the sell- ing practices used by some suppliers and caution them as to the penalties involved in accepting such gifts. Also, you may wish to consider obtaining information on transactions with chemical suppliers at selected purchasing offices to assess whether further action is warranted. -7 i4

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