B-131036, SEP. 30, 1965

B-131036: Sep 30, 1965

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO THE LETTER OF AUGUST 31. IT IS THE POSITION OF THIS OFFICE THAT NO FORMAL CONTRACTS ARE REQUIRED FOR THE PROCUREMENT BY FEDERAL AGENCIES OF PUBLIC UTILITY SERVICES OF ORDINARY COMMERCIAL TYPES WHERE THE RATES AND TERMS OF SUCH SERVICES ARE FIXED OR ADJUSTED BY A PUBLIC REGULATORY BODY. WE THEREFORE ACCEPT YOUR DETERMINATION THAT THEY ARE ADVANTAGEOUS TO THE GOVERNMENT IN TERMS OF ECONOMY. WE HAVE NO COMMENTS OR SUGGESTIONS WITH RESPECT TO THE PROVISIONS OF THE PROPOSED NEW PART. EXCEPT TO SUGGEST THAT SECTION 1-36.205-3 BE REVISED TO ELIMINATE THE REQUIREMENT FOR EXTENDED NEGOTIATIONS FOR A BILATERAL CONTRACT FOR SERVICES WHERE THE BASIS OF THE REFUSAL TO EXECUTE SUCH A CONTRACT IS THAT THE APPLICABLE REGULATIONS OR SERVICE SCHEDULES PRESCRIBED OR APPROVED BY THE PUBLIC REGULATORY BODY HAVING JURISDICTION PROHIBIT OR ARE INCONSISTENT WITH EXECUTION THEREOF.

B-131036, SEP. 30, 1965

TO HONORABLE LAWSON B. KNOTT, JR. ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO THE LETTER OF AUGUST 31, 1965, FROM YOUR ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION, REQUESTING OUR COMMENTS ON A PROPOSED PART 1-36 TO THE FEDERAL PROCUREMENT REGULATIONS DEALING WITH PROCUREMENT OF PUBLIC UTILITY SERVICES.

AS YOU MAY KNOW, IT IS THE POSITION OF THIS OFFICE THAT NO FORMAL CONTRACTS ARE REQUIRED FOR THE PROCUREMENT BY FEDERAL AGENCIES OF PUBLIC UTILITY SERVICES OF ORDINARY COMMERCIAL TYPES WHERE THE RATES AND TERMS OF SUCH SERVICES ARE FIXED OR ADJUSTED BY A PUBLIC REGULATORY BODY. HOWEVER, THE PROPOSED REGULATIONS APPEAR TO BE WITHIN THE SCOPE OF THE AUTHORITY CONFERRED UPON YOU BY SECTION 201 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF JUNE 30, 1949, 63 STAT. 383, AND WE THEREFORE ACCEPT YOUR DETERMINATION THAT THEY ARE ADVANTAGEOUS TO THE GOVERNMENT IN TERMS OF ECONOMY, EFFICIENCY, OR SERVICE.

WE HAVE NO COMMENTS OR SUGGESTIONS WITH RESPECT TO THE PROVISIONS OF THE PROPOSED NEW PART, EXCEPT TO SUGGEST THAT SECTION 1-36.205-3 BE REVISED TO ELIMINATE THE REQUIREMENT FOR EXTENDED NEGOTIATIONS FOR A BILATERAL CONTRACT FOR SERVICES WHERE THE BASIS OF THE REFUSAL TO EXECUTE SUCH A CONTRACT IS THAT THE APPLICABLE REGULATIONS OR SERVICE SCHEDULES PRESCRIBED OR APPROVED BY THE PUBLIC REGULATORY BODY HAVING JURISDICTION PROHIBIT OR ARE INCONSISTENT WITH EXECUTION THEREOF. IN SUCH CASES WE SEE NO APPARENT REASON WHY THE PROCUREMENT SHOULD NOT BE AUTHORIZED TO BE MADE AS PRESCRIBED BY SECTION 1-36.205-1, UNLESS THE SERVICES TO BE PROCURED ARE SUBSTANTIALLY DIFFERENT IN CHARACTER OR QUANTITY FROM ANY CLASS ESTABLISHED BY THE UTILITY'S PUBLICLY APPROVED TARIFFS.