B-128486, OCT. 2, 1956

B-128486: Oct 2, 1956

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TO ARTHUR LAZARUS COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 29. IN YOUR LETTER YOU STATED THAT YOUR BID WAS IN THE AMOUNT OF $26. IT IS REPORTED THAT THE FEDERAL CIVIL DEFENSE ADMINISTRATION HAD NOT ENTERED INTO A CONTRACT WITH THE STATE OF MICHIGAN FOR THE CONDUCT OF A SURVIVAL PLAN PROJECT UNTIL AUGUST 16. CD-SP-57-5 WAS ENTERED INTO. THE STATE OF MICHIGAN ADVISED THE FEDERAL CIVIL DEFENSE ADMINISTRATION THAT IT HAD INITIATED WORK ON THE PROJECT IN QUESTION AND REQUESTED TO BE REIMBURSED FOR SUCH EXPENSES AS WERE PROPER FOR REIMBURSEMENT. IT IS REPORTED FURTHER THAT ALTHOUGH THE FEDERAL CIVIL DEFENSE ADMINISTRATION IS NOT A PARTY TO SUCH CONTRACTS AWARDED BY A STATE. IT REVIEWS THE CONTRACTS TO DETERMINE WHETHER THE PROPOSED CONTRACTOR IS QUALIFIED TO PERFORM THE PORTION OF THE PROJECT INVOLVED AND THAT THE CONTRACT ADEQUATELY PROVIDES FOR THE CONDUCT OF THAT PORTION OF THE PROJECT IN ACCORDANCE WITH THE APPLICABLE REGULATIONS.

B-128486, OCT. 2, 1956

TO ARTHUR LAZARUS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1956, WITH ENCLOSURES, PROTESTING AGAINST THE ACTION OF THE MICHIGAN OFFICE OF CIVIL DEFENSE IN AWARDING TO ANOTHER BIDDER A CONTRACT FOR A PHASE I STUDY OF THE NATIONAL SURVIVAL PLAN APPLICABLE TO MICHIGAN. IN YOUR LETTER YOU STATED THAT YOUR BID WAS IN THE AMOUNT OF $26,000 BUT THAT THE ACTING CIVIL DEFENSE DIRECTOR AT LANSING ADVISED YOU THAT HE HAD RECOMMENDED ACCEPTANCE OF A BID OF $50,000. YOU STATED, ALSO, THAT THE AWARD--- WHICH REQUIRED THE APPROVAL OF THE FEDERAL CIVIL DEFENSE ADMINISTRATION--- HAD BEEN MADE.

IN RESPONSE TO REQUESTS BY THIS OFFICE, THE FEDERAL CIVIL DEFENSE ADMINISTRATION HAS FURNISHED REPORTS IN THE MATTER. IT IS REPORTED THAT THE FEDERAL CIVIL DEFENSE ADMINISTRATION HAD NOT ENTERED INTO A CONTRACT WITH THE STATE OF MICHIGAN FOR THE CONDUCT OF A SURVIVAL PLAN PROJECT UNTIL AUGUST 16, 1956, AND THAT A CONTRARY STATEMENT IN HOUSE REPORT NO. 2946, 84TH CONGRESS, CAN BE ATTRIBUTED ONLY TO A MISTAKE OF FACT. ON THAT DATE, AFTER EXTENDED NEGOTIATIONS, NEGOTIATED CONTRACT NO. CD-SP-57-5 WAS ENTERED INTO, PROVIDING FOR PAYMENT TO THE STATE OF MICHIGAN FOR APPROVABLE EXPENSES NOT TO EXCEED $68,700, SUCH EXPENSES TO INCLUDE ONLY THOSE INCURRED IN ACCORDANCE WITH FEDERAL CIVIL DEFENSE ADMINISTRATION SURVIVAL PLAN REGULATIONS (32 CFR PART 1805), FEDERAL CIVIL DEFENSE ADMINISTRATION SURVIVAL PLAN MANUAL, M27-1, AND THE PROVISIONS OF THE CONTRACT. IN THE COURSE OF NEGOTIATIONS, THE STATE OF MICHIGAN ADVISED THE FEDERAL CIVIL DEFENSE ADMINISTRATION THAT IT HAD INITIATED WORK ON THE PROJECT IN QUESTION AND REQUESTED TO BE REIMBURSED FOR SUCH EXPENSES AS WERE PROPER FOR REIMBURSEMENT.

IT IS REPORTED FURTHER THAT ALTHOUGH THE FEDERAL CIVIL DEFENSE ADMINISTRATION IS NOT A PARTY TO SUCH CONTRACTS AWARDED BY A STATE, IT REVIEWS THE CONTRACTS TO DETERMINE WHETHER THE PROPOSED CONTRACTOR IS QUALIFIED TO PERFORM THE PORTION OF THE PROJECT INVOLVED AND THAT THE CONTRACT ADEQUATELY PROVIDES FOR THE CONDUCT OF THAT PORTION OF THE PROJECT IN ACCORDANCE WITH THE APPLICABLE REGULATIONS, MANUAL, AND CONTRACT PROVISIONS ABOVE REFERRED TO.

THE FEDERAL CIVIL DEFENSE ADMINISTRATION EXPRESSES ITS UNDERSTANDING THAT THE STATE OF MICHIGAN ENGAGED A MANAGEMENT CONSULTANT FIRM TO ASSIST IN THE PROJECT, BUT THAT THE CONTRACT WAS TERMINATED AND THAT A NEW CONTRACT PROBABLY WOULD BE AWARDED IN THE NEAR FUTURE COVERING PART OF THE PROJECT WORK, SUCH NEW CONTRACT TO BE SUBMITTED TO THE FEDERAL CIVIL DEFENSE ADMINISTRATION FOR REVIEW PRIOR TO EXECUTION.

IT IS REPORTED THAT IN FURNISHING FINANCIAL ASSISTANCE TO STATES FOR THE CONDUCT OF SURVIVAL PLAN PROJECTS THE FEDERAL CIVIL DEFENSE ADMINISTRATION REQUIRES THE STATE TO FOLLOW ITS OWN CONTRACTING STATUTES, REGULATIONS, AND PROCEDURES, IN THE EVENT THAT IT ENTERS INTO A CONTRACT FOR THE PERFORMANCE OF ANY WORK OR SERVICES IN CONNECTION WITH THE PROJECT. ACCORDINGLY, ARTICLE IV OF CONTRACT NO. CD-SP-57-5 PROVIDES:

"SUBCONTRACTS. UPON PRIOR WRITTEN APPROVAL OF THE GOVERNMENT THAT THE PROVISIONS OF THE PARTICULAR SUBCONTRACT ARE CONSISTENT WITH THE TERMS OF THIS AGREEMENT AND THAT THE SPECIFIC SUBCONTRACTOR INVOLVED IS QUALIFIED TO PERFORM THE SERVICES REQUIRED, PORTIONS OF THIS CONTRACT MAY BE SUBCONTRACTED PURSUANT TO AND CONSISTENT WITH THE STATUTES, PROCEDURES AND REGULATIONS GOVERNING THE LETTING OF CONTRACTS BY THE CONTRACTORS.'

THE FEDERAL CIVIL DEFENSE ADMINISTRATION STATES FURTHER THAT IT HAS REQUESTED THE STATE OF MICHIGAN, IN THE EVENT IT DESIRES TO SUBCONTRACT ANY FUTURE WORK UNDER THE PROJECT, TO FURNISH EVIDENCE THAT THE STATES CONTRACTING PROCEDURES AND REGULATIONS WERE FOLLOWED IN THE AWARD OF THE CONTRACT.

IN VIEW OF THE FOREGOING, THERE APPEARS NO PROPER BASIS FOR FURTHER ACTION BY THIS OFFICE IN THE MATTER.