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B-163985, AUG. 27, 1968

B-163985 Aug 27, 1968
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D. BAKER: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 6. THE INVITATION IN QUESTION WAS ISSUED MARCH 27. A CONTRACT PURSUANT TO THE INVITATION IN QUESTION WAS AWARDED. IS BASED ON THE CONTENTION THAT GSA ALLOWED THE REQUIREMENTS FOR PLASTIC BAGS TO ACCUMULATE IN ORDER TO CIRCUMVENT THE MAXIMUM ORDER LIMITATION OF $15. IT IS A RELATIVELY EASY MATTER TO CIRCUMVENT THE MAXIMUM ORDER LIMITATION CLAUSE. WE ARE ADVISED BY GSA THAT ALTHOUGH IT WOULD BE POSSIBLE TO CONSOLIDATE PURCHASE ORDERS OF SEVERAL REGIONAL OFFICES. SUCH A PROCEDURE WAS NOT FOLLOWED IN THE INSTANT PROCUREMENT. NOR IS IT FOLLOWED IN ANY OTHER SIMILAR SITUATION. THE SUBJECT INVITATION FOR PLASTIC BAGS WAS ISSUED BY THE CENTRAL OFFICE IN ORDER TO REPLENISH RESERVE STOCKS AT CLEAR FIELD AND SHELBY.

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B-163985, AUG. 27, 1968

TO MR. D. BAKER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1968, REQUESTING RECONSIDERATION OF OUR DECISION OF MAY 29, 1968, WHICH DENIED YOUR PREVIOUS PROTEST AGAINST THE ALLEGED CIRCUMVENTION OF THE GENERAL SERVICES ADMINISTRATION'S (GSA) OBLIGATION TO COMPLY WITH YOUR REQUIREMENTS CONTRACT GS-07S-12082, BY ITS ISSUANCE OF INVITATION FOR BIDS NO. FPNGA-M- 04709-A-4-17-68.

THE INVITATION IN QUESTION WAS ISSUED MARCH 27, 1968, FOR A DEFINITE QUANTITY CONTRACT FOR POLYETHYLENE PLASTIC BAGS AS FOLLOWS: 4500 CARTONS OF BAGS FOR THE DEPOT AT SHELBY, OHIO, AND 4000 CARTONS OF BAGS FOR THE DEPOT AT CLEAR FIELD, UTAH.

OUR DECISION OF MAY 29, 1968, B-163985, DENIED YOUR PROTEST, BECAUSE "PURCHASE OF THE BAGS ON THIS BASIS, AT THE CONTRACT PRICES, WOULD RESULT IN ORDERS OF $18,405 AND $17,560 FOR THE TWO ITEMS, RESPECTIVELY, BOTH OF WHICH WOULD EXCEED THE SINGLE ITEM LIMITATION OF $15,000 IMPOSED BY YOUR CONTRACT'S SPECIAL PROVISIONS, PARAGRAPH 5.' SHORTLY AFTER THIS DECISION, A CONTRACT PURSUANT TO THE INVITATION IN QUESTION WAS AWARDED.

YOUR ADDITIONAL PROTEST, AS STATED IN YOUR LETTER OF JUNE 6, 1968, IS BASED ON THE CONTENTION THAT GSA ALLOWED THE REQUIREMENTS FOR PLASTIC BAGS TO ACCUMULATE IN ORDER TO CIRCUMVENT THE MAXIMUM ORDER LIMITATION OF $15,000. YOU ALSO POINT OUT THAT IF ONE REGIONAL GSA OFFICE HAS THE AUTHORITY TO MAKE PURCHASES FOR SEVERAL OTHER REGIONAL OFFICES, IT IS A RELATIVELY EASY MATTER TO CIRCUMVENT THE MAXIMUM ORDER LIMITATION CLAUSE.

WE ARE ADVISED BY GSA THAT ALTHOUGH IT WOULD BE POSSIBLE TO CONSOLIDATE PURCHASE ORDERS OF SEVERAL REGIONAL OFFICES, SUCH A PROCEDURE WAS NOT FOLLOWED IN THE INSTANT PROCUREMENT, NOR IS IT FOLLOWED IN ANY OTHER SIMILAR SITUATION. THE SUBJECT INVITATION FOR PLASTIC BAGS WAS ISSUED BY THE CENTRAL OFFICE IN ORDER TO REPLENISH RESERVE STOCKS AT CLEAR FIELD AND SHELBY, WHICH ARE MAINTAINED FOR THE PURPOSE OF MEETING EMERGENCIES AND INSURING A CONTINUED SUPPLY FOR CRITICAL PROGRAMS. THESE RESERVE STOCKS ARE PHYSICALLY SEPARATED FROM THE REGULAR STOCKS WHICH ARE PROCURED BY THE REGIONAL OFFICES UNDER REQUIREMENTS CONTRACTS. THE PROCEDURE FOR REPLENISHMENT OF RESERVE AND REGULAR STOCKS IS SET FORTH IN GSA ORDERS, FSS P. 2900.3 CHANGE 8 WHICH STATES:

"30.1 STOCK REPLENISHMENT.

"A. REGIONALLY CONTROLLED ITEMS WILL BE REPLENISHED BY THE REGIONS IN ACCORDANCE WITH THE REQUIREMENTS OF THE PROGRAM WHICH THE RESERVES SUPPORT.

"B. CENTRALLY CONTROLLED ITEMS WILL BE REPLENISHED BY OR AS DIRECTED BY THE NATIONAL INVENTORY CONTROL CENTER.'

THE INVITATION IN QUESTION WAS ISSUED PURSUANT TO DIRECTION OF THE DIRECTOR OF THE INVENTORY MANAGEMENT DIVISION DATED JANUARY 30, 1968, WHICH RECITED A NEED FOR REPLENISHMENT OF THE DEPLETED RESERVE STOCKS DUE TO HIGH ACTIVITY IN THE ITEM.

REQUIREMENTS CONTRACTS ARE BASICALLY INTENDED TO PROVIDE A CONVENIENT METHOD OF PROCURING RELATIVELY MODEST QUANTITIES OF SUPPLIES TO MEET CURRENT NEEDS AS THEY ARISE. THEY ARE NOT APPROPRIATE WHEN THE NEED FOR AN ITEM IS SO LARGE THAT BETTER PRICES AND TERMS MAY BE OBTAINED THROUGH DEFINITE QUANTITY CONTRACT. SINCE THE REQUIREMENT FOR REPLENISHMENT OF THE CENTRALLY CONTROLLED STOCK WAS IN EXCESS OF THE SINGLE ORDER LIMITATION OF YOUR CONTRACT, IT WOULD HAVE BEEN IMPROPER TO CIRCUMVENT THE LIMITATION BY SPLITTING THE ORDER INTO SMALLER UNITS TO COME WITHIN THE LIMITATION. SEE B-159493, MARCH 28, 1967.

BASED ON THE FOREGOING, NO EVIDENCE OF GSA'S VIOLATION OF YOUR REQUIREMENTS CONTRACT IS FOUND, AND OUR DECISION OF MAY 29, 1968, IS THEREFORE AFFIRMED.

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