B-145772, SEPTEMBER 1, 1961, 41 COMP. GEN. 177

B-145772: Sep 1, 1961

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CONTRACTS - NEGOTIATION - ADMINISTRATIVE DETERMINATION THE NEGOTIATION OF A CONTRACT BY THE SMITHSONIAN INSTITUTION FOR THE INSTALLATION OF A RADIO LECTURE SYSTEM IN SEVERAL MUSEUM GALLERIES WITH ONE OF SEVERAL SUPPLIERS WHOSE SYSTEM AND TECHNICAL CAPABILITIES WERE DETERMINED TO BE THE BEST FOR THE PURPOSE BASED ON ACTUAL DEMONSTRATION AND TRIAL OF EQUIPMENT OF ALL THE OFFERORS WILL NOT BE CONSIDERED CONTRARY TO LAW OR REGULATION. FIVE SUPPLIERS WERE INVITED TO INSTALL AND DEMONSTRATE THEIR PRODUCTS IN SELECTED GALLERIES OF THE MUSEUM. FOUR SUCH INSTALLATIONS WERE MADE FOR TRIAL PERIODS. AS A RESULT OF THESE DEMONSTRATIONS YOU HAVE CONCLUDED THAT THE EXPERIENCE AND CAPABILITY OF THE INSTALLER IS EQUAL IN IMPORTANCE TO THE KIND OF EQUIPMENT USED AND THAT SPECIFICATIONS TO ASSURE THE SUCCESSFUL PERFORMANCE OF THE SYSTEM WOULD BE BASED IN LARGE MEASURE ON THE CAPABILITY AND EXPERIENCE OF THE INSTALLER.

B-145772, SEPTEMBER 1, 1961, 41 COMP. GEN. 177

CONTRACTS - NEGOTIATION - ADMINISTRATIVE DETERMINATION THE NEGOTIATION OF A CONTRACT BY THE SMITHSONIAN INSTITUTION FOR THE INSTALLATION OF A RADIO LECTURE SYSTEM IN SEVERAL MUSEUM GALLERIES WITH ONE OF SEVERAL SUPPLIERS WHOSE SYSTEM AND TECHNICAL CAPABILITIES WERE DETERMINED TO BE THE BEST FOR THE PURPOSE BASED ON ACTUAL DEMONSTRATION AND TRIAL OF EQUIPMENT OF ALL THE OFFERORS WILL NOT BE CONSIDERED CONTRARY TO LAW OR REGULATION, THE INSTALLATION OF THE EQUIPMENT HAVING A DIRECT AND SPECIFIC RELATIONSHIP TO THE FURTHERANCE OF THE PURPOSES AND OBJECTIVES OF THE SMITHSONIAN--- THE INCREASE AND DIFFUSION OF KNOWLEDGE-- - AS PROVIDED IN THE ACT OF AUGUST 10, 1846, 20 U.S.C. 41, RATHER THAN TO MERELY ADMINISTRATIVE OR HOUSEKEEPING FUNCTIONS OF THE SMITHSONIAN SIMILAR TO THOSE OF OTHER GOVERNMENT AGENCIES.

TO THE SECRETARY, SMITHSONIAN INSTITUTION, SEPTEMBER 1, 1961:

YOUR LETTER DATED MAY 3, 1961, ADVISES THAT THE INSTITUTION PLANS AN INITIAL INSTALLATION OF A RADIO LECTURE SYSTEM IN FIVE GALLERIES OF THE MUSEUM OF NATURAL HISTORY, WITH SUBSEQUENT EXPANSIONS TO INCLUDE 30 GALLERIES. TO ASSESS THE ADVANTAGES OF OPERATION, MAINTENANCE, INSTALLATION AND GENERAL QUALITY OF THE VARIOUS RADIO LECTURE SYSTEMS AVAILABLE, FIVE SUPPLIERS WERE INVITED TO INSTALL AND DEMONSTRATE THEIR PRODUCTS IN SELECTED GALLERIES OF THE MUSEUM, AND FOUR SUCH INSTALLATIONS WERE MADE FOR TRIAL PERIODS. AS A RESULT OF THESE DEMONSTRATIONS YOU HAVE CONCLUDED THAT THE EXPERIENCE AND CAPABILITY OF THE INSTALLER IS EQUAL IN IMPORTANCE TO THE KIND OF EQUIPMENT USED AND THAT SPECIFICATIONS TO ASSURE THE SUCCESSFUL PERFORMANCE OF THE SYSTEM WOULD BE BASED IN LARGE MEASURE ON THE CAPABILITY AND EXPERIENCE OF THE INSTALLER.

FOR THESE REASONS YOU STATE THE BELIEF THAT COMPETITION UNDER NORMAL BIDDING PROCEDURES CANNOT BE EXPECTED TO PRODUCE THE QUALITY OF PERFORMANCE REQUIRED FOR THE SYSTEM, BUT THAT ON THE BASIS OF THE TRIAL DEMONSTRATIONS A CONTRACT SHOULD BE NEGOTIATED FOR THE INSTALLATION, AND YOU INQUIRE WHETHER THE TRIALS MAY BE CONSIDERED TO CONSTITUTE COMPETITION WITHIN THE MEANING AND INTENT OF APPLICABLE REGULATIONS.

IN A SEPARATE DECISION TO YOU OF THIS DATE (B-145878) WE HAD OCCASION TO CONSIDER THE UNIQUE CHARACTER AND STATUS OF THE SMITHSONIAN INSTITUTION AND CONCLUDED THAT THE DISCRETIONARY POWERS OF THE BOARD OF REGENTS WITH RESPECT TO THE MANAGEMENT AND CONTROL OF THE BUILDINGS OF THE INSTITUTION ARE NOT SUBJECT TO THE STATUTES GENERALLY APPLICABLE TO GOVERNMENT BUILDINGS. IT WOULD APPEAR THAT THE PROPOSED RADIO LECTURE SYSTEM IS DIRECTLY RELATED TO AND IN AID OF THE PRESENTATION OF THE MUSEUM EXHIBITS TO THE PUBLIC AND, THEREFORE, INVOLVES THE EXERCISE OF THE PRIMARY TRUST FUNCTIONS OF THE INSTITUTION--- NAMELY,"THE INCREASE AND DIFFUSION OF KNOWLEDGE AMONG MEN.' ACT OF AUGUST 10, 1846, 20 U.S.C. 41. IN VIEW THEREOF WE BELIEVE THAT THE DETERMINATION OF THE MEANS AND THE SELECTION OF THE CONTRACTOR TO BE EMPLOYED WOULD BE CLEARLY WITHIN THE DISCRETION OF THE REGENTS, IF THE INSTALLATION WERE TO BE CHARGED TO THE INCOME FROM THE TRUST FUNDS OF THE INSTITUTION.

HOWEVER, IT IS UNDERSTOOD THAT THE COST OF THE LECTURE SYSTEM IS TO BE CHARGED TO FUNDS APPROPRIATED BY THE CONGRESS AND, IN THE ABSENCE OF ANY CONTRARY PROVISION IN THE APPROPRIATION ACT, WE MUST ASSUME THAT IT WAS NOT INTENDED BY THE CONGRESS THAT SUCH FUNDS SHOULD BE EXPENDED WITHOUT REGARD TO THE GENERAL PROVISIONS OF LAW GOVERNING THE DISPOSITION OF GOVERNMENT FUNDS.

IT IS UNDERSTOOD THAT YOUR DESIRE TO NEGOTIATE A CONTRACT IS BASED UPON THE CONCLUSION, RESULTING FROM THE TRIAL DEMONSTRATIONS, THAT THE TECHNICAL ABILITIES AND SKILLS OF ONE OF THE POTENTIAL SOURCES, IN CONJUNCTION WITH THE PARTICULAR EQUIPMENT USED BY IT, ARE SO FAR SUPERIOR TO THOSE DEMONSTRATED BY THE OTHERS THAT ONLY BY EMPLOYMENT OF THAT SOURCE CAN THE MOST DESIRABLE AND EFFECTIVE RESULTS BE OBTAINED. WHILE THIS OFFICE HAS FREQUENTLY HELD THAT UNDER THE STATUTES GOVERNING GOVERNMENT PROCUREMENT GENERALLY, APPROPRIATED FUNDS ARE AVAILABLE FOR EXPENDITURE ONLY TO THE EXTENT NECESSARY TO MEET THE ACTUAL NEEDS OF THE GOVERNMENT SERVICE, WE ALSO HAVE RECOGNIZED THAT THE PURCHASING AGENCIES HAVE THE RIGHT TO DETERMINE THE NEEDS OF THE SERVICE AND THEIR DETERMINATIONS MADE IN GOOD FAITH AND ON REASONABLE GROUNDS ARE NOT ORDINARILY QUESTIONED. NEEDS CAN BE ADEQUATELY SUPPLIED ONLY BY ONE SOURCE, ADVERTISING FOR BIDS WILL SERVE NO USEFUL PURPOSE, AND THIS IS AN EXCEPTION TO THE ADVERTISING REQUIREMENTS OF SECTION 3709 OF THE REVISED STATUTES (41 U.S.C. 5) AND OF SECTION 302 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (41 U.S.C. 252 (C) ).

THE PROCEDURE FOLLOWED IN THIS INSTANCE IS SIMILAR TO THAT APPROVED BY OUR OFFICE IN A DECISION TO ONE OF YOUR PREDECESSORS, A-45491, NOVEMBER 22, 1932, IN CONNECTION WITH THE AWARD OF CONTRACTS FOR THE EXECUTION OF PAINTINGS FOR AN EXHIBIT AT THE CHICAGO CENTURY OF PROGRESS EXPOSITION. CONSIDERING THAT PRECEDENT AND ALSO THE FACT THAT THE CONTEMPLATED RADIO LECTURE SYSTEM HAS DIRECT AND SPECIFIC RELATIONSHIP TO THE FURTHERANCE OF THE PURPOSES AND OBJECTIVES OF THE SMITHSONIAN RATHER THAN TO MERELY ADMINISTRATIVE OR HOUSEKEEPING FUNCTIONS WHICH WOULD BE THE SAME AS THOSE OF ANY OTHER GOVERNMENT INSTRUMENTALITY, WE CONCLUDE THAT THE PROPOSED NEGOTIATION OF A CONTRACT WITH THE OFFEROR WHOSE SYSTEM AND TECHNICAL CAPABILITIES HAVE BEEN DETERMINED BY YOU TO BE BEST QUALIFIED TO ACCOMPLISH YOUR PURPOSE WILL NOT BE CONSIDERED CONTRARY TO ANY PERTINENT LAW OR REGULATION.