B-143239, SEP. 11, 1967

B-143239, SEP. 11, 1967

CONTRACTS - FEDERAL SUPPLY SERVICE - CONTRACTORS USE DECISION TO GSA RE PROPOSED REVISION OF SUBPART 1-5.9 FEDERAL PROCUREMENT REGS. RE USE OF GSA SUPPLY SOURCES BY CONTRACTORS AND SUBCONTRACTORS IN PERFORMING GOVT. COST-REIMBURSEMENT CONTRACTS AND OTHER TYPES OF CONTRACTS WHERE SUBSTANTIAL PORTION OF CONTRACT IS OF A COST-REIMBURSEMENT NATURE. WE HAVE ADVOCATED THAT GSA SUPPLY SOURCES SHOULD BE MADE AVAILABLE ON ALL TYPES OF NEGOTIATED CONTRACTS WHERE SUBSTANTIAL SAVINGS WILL RESULT (SEE B -132992, 2/9/65; B-146975, 4/30/65, AND B-146975, 5/13/65.) THE PROPOSED REVISION WOULD EXPAND THE USE AND IS APPROVED.

TO MR. KNOTT:

THIS IS IN RESPONSE TO THE LETTER DATED MAY 31, 1966, FROM YOUR DEPUTY GENERAL COUNSEL, REQUESTING OUR VIEWS ON A PROPOSED REVISION OF SUBPART 1- 5.9 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) REGARDING THE USE OF GENERAL SERVICES ADMINISTRATION SUPPLY SOURCES BY CONTRACTORS AND SUBCONTRACTORS IN PERFORMING GOVERNMENT COST REIMBURSEMENT CONTRACTS AND OTHER TYPES OF CONTRACTS WHERE A SUBSTANTIAL DOLLAR PORTION OF CONTRACTORS' CONTRACTS IS OF A COST REIMBURSEMENT NATURE.

IN SEVERAL REPORTS TO THE CONGRESS WE HAVE ADVOCATED THAT GSA SUPPLY SOURCES SHOULD BE MADE AVAILABLE TO CONTRACTORS ON ALL TYPES OF NEGOTIATED CONTRACTS WHERE SUBSTANTIAL SAVINGS WILL RESULT. (SEE B 132992, FEBRUARY 9, 1965; B-146975, APRIL 30, 1965; AND B-146975, MAY 13, 1965.) HOWEVER, OUR VIEWS WERE NOT FULLY ACCEPTED BY ALL THE AGENCIES CONCERNED. YOUR PROPOSED REVISION WOULD EXPAND THE USE OF GSA SUPPLY SOURCES BY GOVERNMENT CONTRACTORS AND WE, THEREFORE, APPROVE OF THE REVISION. IT MAY BE THAT GSA SUPPLY SOURCES COULD WELL BE USED BY CONTRACTORS IN CASES NOT CURRENTLY COVERED, AND WE RESERVE THE RIGHT TO MAKE RECOMMENDATIONS IN THIS AREA AS EXPERIENCE IS GAINED.