B-133044, NOV. 24, 1965

B-133044, NOV. 24, 1965

TO THE HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS ADMINISTRATION:

BY LETTER DATED NOVEMBER 2, 1965, YOU REQUESTED OUR DECISION AS TO WHETHER THE VETERANS ADMINISTRATION MAY PROCURE COMMERCIAL LAUNDRY SERVICES FROM AN EDUCATIONAL INSTITUTION THROUGH NEGOTIATION, RATHER THAN BY FORMAL ADVERTISING, PROCEDURES.

THE CIRCUMSTANCES INVOLVED IN YOUR REQUEST ARE AS STATED AS FOLLOWS:

"IN CONNECTION WITH THE PLANNING OF A PROPOSED HOSPITAL, A SURVEY OF POSSIBLE SOURCES OF LAUNDRY SERVICE WAS CONDUCTED REVEALING THAT NO COMMERCIAL SOURCE COULD PROVIDE SERVICE AT A PRICE WHICH WAS CONSIDERED REASONABLE. AN ADJACENT UNIVERSITY MEDICAL SCHOOL HAS INDICATED THAT IF THE VETERANS ADMINISTRATION DESIRES TO PROCURE LAUNDRY SERVICES FROM THE UNIVERSITY THEIR PROJECTED LAUNDRY FACILITY COULD BE EXPANDED TO PROVIDE SUFFICIENT CAPACITY AND IT IS ESTIMATED THAT THE COST OF LAUNDRY SERVICE PROCURED FROM THE UNIVERSITY WOULD BE SUBSTANTIALLY LESS THAN SUCH SERVICE COULD BE PROCURED FROM COMMERCIAL SOURCES.'

YOU MAKE REFERENCE TO 41 U.S.C. 252 (C) (5) WHICH AUTHORIZES THE NEGOTIATION OF CONTRACTS FOR SERVICES WITHOUT FORMAL ADVERTISING IF "FOR ANY SERVICE TO BE RENDERED BY ANY UNIVERSITY, COLLEGE OR OTHER EDUCATIONAL INSTITUTION," AND OBSERVE THAT LITERALLY READ, BOTH THE STATUTE AND ITS IMPLEMENTING REGULATION AT FEDERAL PROCUREMENT REGULATIONS (FPR) 1-3.205 WOULD PERMIT THE NEGOTIATION OF CONTRACTS FOR ANY SERVICE TO BE RENDERED BY AN EDUCATIONAL INSTITUTION, INCLUDING COMMERCIAL SERVICES, AS WELL AS EDUCATIONAL, TRAINING AND RESEARCH SERVICES. IN THIS CONNECTION, YOU ADVISE THAT THE ADMINISTRATION IS NOT UNMINDFUL OF THE LEGISLATIVE HISTORY OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICE ACT OF 1949 NOR OF THE EXAMPLES FOR APPLICATION OF THIS NEGOTIATION AUTHORITY SET OUT IN FPR 1 3.205 (A) WHICH, TO SOME EXTENT, LEND WEIGHT TO A CONCLUSION THAT SUCH AUTHORITY IS LIMITED TO THE NEGOTIATION OF CONTRACTS FOR TRAINING, EDUCATIONAL, AND RESEARCH SERVICES, AND THAT IT DOES NOT EXTEND TO COMMERCIAL SERVICES THAT MIGHT BE PROVIDED BY EDUCATIONAL INSTITUTIONS.

WE ARE INCLINED TO THE VIEW THAT 41 U.S.C. 252 (C) (5) DOES NOT PROVIDE AUTHORITY FOR NEGOTIATION OF A LAUNDRY SERVICE CONTRACT WITH A MEDICAL SCHOOL WHICH IS ADJACENT TO THE PROPOSED HOSPITAL. IN ADDITION TO S.REPT.NO. 475, 81ST CONGRESS, 1ST SESSION, CITED BY YOU, THE COGNIZABLE SENATE COMMITTEE, IN REPORTING ON THE PROPOSED FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, STATED ON PAGE 19 OF S.REPT. NO. 338, 81ST CONGRESS, 1ST SESSION, THAT:

"THIS PARAGRAPH (NO. 5) WOULD PERMIT NEGOTIATION OF CONTRACTS FOR TECHNICAL ASSISTANCE, EXPERT STUDY AND THE APPLICATION OF SPECIALIZED KNOWLEDGE TO BE PERFORMED BY ANY UNIVERSITY, COLLEGE, OR OTHER EDUCATIONAL INSTITUTION. THIS WOULD COVER MATTERS WHICH MIGHT NOT CLEARLY QUALIFY AS EXPERIMENTAL, DEVELOPMENTAL, OR RESEARCH WORK UNDER PARAGRAPH (10) OF THIS SECTION (NOW PARAGRAPH 11).'

THIS STATEMENT WAS REPEATED ON PAGE 70 OF THE 1959 COMPILATION AND ANALYSIS OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT PREPARED BY THE GENERAL SERVICES ADMINISTRATION FOR USE OF THE SENATE COMMITTEE ON GOVERNMENT OPERATIONS.

WE, THEREFORE, ARE OF THE VIEW THAT THE PHRASE "ANY SERVICE" AS USED IN THE STATUTE AND REGULATIONS HAS REFERENCE ONLY TO THOSE SPECIALIZED, NONCOMMERCIAL SERVICES DELINEATED ABOVE WHICH ARE CUSTOMARILY PERFORMED BY EDUCATIONAL INSTITUTIONS. FOR THESE REASONS, WE MUST CONCLUDE THAT THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252 (C) (5) IS NOT APPLICABLE TO THE CONTEMPLATED PROCUREMENT.