From the earliest years of our nation’s history, the military has relied on contracting to support its missions. Effective administration of these contracts has been vitally important to the wellbeing and success of our warfighters. It has helped ensure that contractors met their contractual requirements for cost, schedule, and technical performance. To a large extent, the success of any procurement action has and continues to hinge on how well it is administered during its performance.
Revolutionary War
In June 16, 1775, the Second Continental Congress passed a resolution providing for a quartermaster general. Washington appointed the first Quartermaster General on August 14, 1775. The same day it also provided for a Commissary General to acquire supplies for the troops – but there was little supervisory control. Under this system the Quartermaster General and Commissary General would buy, store, transport, and distribute needed goods. The Army depended upon commissaries, attached to the Army, to purchase and issue the needed rations. The commissariat system continued until 1781.
By the end of 1781, the new Superintendent of Finance has assumed complete direction of the subsistence procurement. He entered into contracts to supply the Army with rations and later clothing and wood. The first clothing contract, awarded for 1785 to the firm Thomas Lawrence and Jacob Morris of New York, included a provision for inspecting the clothing.
The contract system drew heavy criticism as problems arose. Contractors often sold tainted provisions at inflated prices and failed to maintain adequate reserves. In June 1781 Congress appointed John Paul Jones to command the 74-gun ship America while the ship was under construction at Portsmouth, New Hampshire. Jones served as “SUPSHIP” until November 5, 1782, when Congress transferred ownership to France to compensate that government for a ship it has lost in support of the American Revolution. Jones later reported, “The most disagreeable service to which I was assigned during the whole course of the Revolution was to supervise the slow construction of this ship.”
Early Procurement Under the Constitution
The Constitution contained no specific provisions for contracting but the implied power of the executive to enter into contracts was inherent in the concept of sovereignty.
In 1789, Congress created the Department of War and the Treasury Department, and both departments contracted for troop food and clothing. In 1792, in the first law regulation federal procurement, Congress authorized the Treasury Department to make all purchases for the War Department. In 1795 Congress created within the Treasury Department the Office of Purveyor of Public Supplies with the authority to procure all articles of supply for the Army and Navy. Three years later, Congress reversed itself, authorizing the War and Navy department to procure their own supplies. The Purveyor of Public Supplies continued to execute all contracts except those for subsistence, which the Secretary of War handled directly. The practice of soliciting bids by public advertisement and awarding contracts to the lowest bidders had become routine.
War of 1812
In March 1812, Congress abolished the Office of Purveyor of Public Supplies and created the Office of the Commissary General of Purchases under the direction of the Secretary of War. The Quartermaster Department was established to aid the Secretary of War in buying, inspecting, and distributing military equipment. Neither the Quartermaster General nor the Commissary General were responsible for subsistence, which was still procured through contracts. Throughout the War of 1812, the contract system for subsistence failed miserably. There was almost a total lack of accountability.
In 1818, Congress abolished the contract system for subsistence that had been in place since 1781, and returned to the commissariat system. As a result, the delivery of rations improved and costs diminished.
From 1815 to 1860, the contracting process became more structured. The military departments imposed more formal contracting procedures to ensure accountability and reasonable prices, for both the Army and the Navy.
Civil War
The Civil War tested the contracting process, and it barely passed. The supply departments were called upon to provide for a force many times the size of the small prewar Army. The contracting process had been carefully structured from the 1820s to the 1850s to ensure accountability and competition. But the war overloaded the purchasing infrastructure, which lacked experienced officers to supervise the system. There were an unprecedented number of scandals in the midst of overwhelming demand for food, weapons, and other supplies.
Early in 1861, Congress had reiterated the basic policy that had long governed procurement. It had enacted legislation requiring that all contracts for supplies and services in any governmental department were to be made by advertising for proposals, allowing a sufficient time for submission of bids, and making the award to the lowest bidder. For the first three years of the war, depot quartermasters or quartermasters in the field procured supplies either under contract or, in and emergency, by open-market purchase.
Well aware that the war provided opportunities for swindling the government, on June 2, 1862, Congress enacted legislation to discourage fraud by the supply officers entrusted with the making of contracts. By end of the war, all who might be considered influential in connection with contracts, contractors, inspectors, and quartermasters had been brought under the restrictions and penalties set forth in the laws passed by Congress. Actual enforcement however appears to have been limited.
