B-151274, JUN. 11, 1963

B-151274: Jun 11, 1963

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IT HAS COME TO OUR ATTENTION THAT NEGOTIATED PROCUREMENTS ARE BEING INITIATED PRIOR TO ISSUANCE OF THE DETERMINATIONS AND FINDINGS DESCRIBED IN 10 U.S.C. 2310. THIS PROCEDURE APPARENTLY IS CONSIDERED TO BE JUSTIFIED ON THE BASIS OF 10 U.S.C. 2304 (2). READING AS FOLLOWS: "* * * (III) DETERMINATIONS AND FINDINGS THAT MAY BE REQUIRED BEFORE A CONTRACT IS ENTERED INTO BY NEGOTIATION. * * *.' "/B) NO CONTRACT SHALL BE ENTERED INTO AS A RESULT OF NEGOTIATION UNLESS OR UNTIL THE FOLLOWING REQUIREMENTS HAVE BEEN SATISFIED: (II) ANY NECESSARY DETERMINATIONS AND FINDINGS PRESCRIBED IN SECTION III. HAVE BEEN MADE. MAY HAVE BEEN JUSTIFIABLE PRIOR TO ENACTMENT OF PUBLIC LAW 87-653. IT IS OUR OPINION THAT SUCH CONSTRUCTION IS NO LONGER PROPER.

B-151274, JUN. 11, 1963

TO THE SECRETARY OF DEFENSE:

DURING THE COURSE OF OUR INVESTIGATIONS OF PROCUREMENTS BY THE DEPARTMENT OF THE NAVY, IT HAS COME TO OUR ATTENTION THAT NEGOTIATED PROCUREMENTS ARE BEING INITIATED PRIOR TO ISSUANCE OF THE DETERMINATIONS AND FINDINGS DESCRIBED IN 10 U.S.C. 2310. THIS PROCEDURE APPARENTLY IS CONSIDERED TO BE JUSTIFIED ON THE BASIS OF 10 U.S.C. 2304 (2), WHICH DEFINES "NEGOTIATE" TO MEAN "MAKE WITHOUT FORMAL ADVERTISING," AND UPON THE LANGUAGE OF ASPR 3 -000 (III) AND 3 102 (B) (II), READING AS FOLLOWS:

"* * * (III) DETERMINATIONS AND FINDINGS THAT MAY BE REQUIRED BEFORE A CONTRACT IS ENTERED INTO BY NEGOTIATION, * * *.'

"/B) NO CONTRACT SHALL BE ENTERED INTO AS A RESULT OF NEGOTIATION UNLESS OR UNTIL THE FOLLOWING REQUIREMENTS HAVE BEEN SATISFIED:

(II) ANY NECESSARY DETERMINATIONS AND FINDINGS PRESCRIBED IN SECTION III, PART 3, HAVE BEEN MADE; * * *.'

WHILE A CONSTRUCTION OF 10 U.S.C. 2302 (2), WHICH WOULD REQUIRE DETERMINATIONS AND FINDINGS AS PREREQUISITES ONLY TO THE "MAKING" OR "ENTERING INTO" OF NEGOTIATED CONTRACTS, MAY HAVE BEEN JUSTIFIABLE PRIOR TO ENACTMENT OF PUBLIC LAW 87-653, IT IS OUR OPINION THAT SUCH CONSTRUCTION IS NO LONGER PROPER. THUS, IT MUST BE NOTED THAT SECTION (A) OF PUBLIC LAW 87-653 NOW REQUIRES THE USE OF FORMAL ADVERTISING WHENEVER FEASIBLE AND PRACTICABLE. FURTHER, BY REFERENCE TO THE REQUIREMENTS FOR DETERMINATIONS AND FINDINGS WHICH ARE DESCRIBED IN 10 U.S.C. 2310, AS AMENDED BY SECTION (F) OF PUBLIC LAW 87-653, SECTION (A) OF THAT LAW CLEARLY INDICATES THAT NEGOTIATION MAY BE SUBSTITUTED FOR FORMAL ADVERTISING ONLY WHEN WRITTEN FINDINGS, SETTING OUT FACTS AND CIRCUMSTANCES CLEARLY INDICATING THAT USE OF FORMAL ADVERTISING WOULD NOT BE FEASIBLE OR PRACTICABLE, HAVE BEEN MADE BY THE APPROPRIATE OFFICIAL OF THE CONTRACTING AGENCY.

ADDITIONALLY, SECTION (C) OF PUBLIC LAW 87-653 ADDED A NEW SUBSECTION (G) TO 10 U.S.C. 2304, WHICH, WITH CERTAIN STATED EXCEPTIONS, REQUIRES THE SOLICITATION OF PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED, AND FURTHER REQUIRES THAT WRITTEN OR ORAL DISCUSSION BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. THE LEGISLATIVE HISTORY OF THESE PROVISIONS CLEARLY INDICATES THAT SECTION (C) OF PUBLIC LAW 87-653 WAS INTENDED TO IMPLEMENT AND CLARIFY THE DEFINITION OF "NEGOTIATE" WHICH WAS INCORPORATED INTO 10 U.S.C. 2302 (2) AS A RESULT OF THE 1956 CODIFICATION OF THE ARMED SERVICES PROCUREMENT ACT OF 1947. SEE PAGE 5, HOUSE REPORT NO. 1638, TO ACCOMPANY H.R. 5532, 87TH CONGRESS, WHERE THE FOLLOWING EXPLANATION APPEARS:

"THE PROBLEM HAS USUALLY BEEN ONE OF INTERPRETING WHAT WAS MEANT BY

"NEGOTIATION.'

"THIS WORD IS NOT DEFINED IN THE STATUTE. BUT THE WORD DOES HAVE A MEANING IN COMMON PARLANCE. IT IS THAT WHEN NEGOTIATIONS ARE INVITED AND PROPOSALS ARE OFFERED, THERE SHOULD BE WRITTEN OR ORAL DISCUSSIONS.

"IT IS A SALUTORY AND WORKABLE LAW WHICH MEETS ALL REQUIREMENTS FOR NEGOTIATION; IF NOT BY LANGUAGE, AT LEAST BY DEFINITION.'

IT IS THEREFORE OUR OPINION THAT THE TERM "NEGOTIATE" IN 10 U.S.C. 2302 (2) MUST NOW BW READ IN CONJUNCTION WITH 10 U.S.C. 2304 (G) TO INCLUDE THE SOLICITATION OF PROPOSALS AND THE CONDUCT OF WRITTEN OR ORAL DISCUSSIONS, WHEN SUCH DISCUSSIONS ARE REQUIRED BY 10 U.S.C. 2304 (G), AS WELL AS THE "MAKING" OR "ENTERING INTO" OF A CONTRACT.

THE ISSUANCE OF A REQUEST FOR PROPOSALS, IN LIEU OF AN INVITATION FOR BIDS NECESSARILY PRESUPPOSES A DETERMINATION THAT NEGOTIATION IS BEING, OR WILL BE, SUBSTITUTED FOR FORMAL ADVERTISING. IT THEREFORE IS OUR FURTHER OPINION THAT 10 U.S.C. 2304 (A) MUST BE READ IN CONJUNCTION WITH 10 U.S.C. 2310 AS REQUIRING WRITTEN DETERMINATIONS AND FINDINGS AS PREREQUISITES TO THE ISSUANCE OF A REQUEST FOR PROPOSALS.

WE SUGGEST THAT YOUR IMMEDIATE CONSIDERATION BE GIVEN TO AMENDING THE ARMED SERVICES PROCUREMENT REGULATION TO REQUIRE WRITTEN DETERMINATIONS AND FINDINGS PRIOR TO THE ISSUANCE OF REQUESTS FOR PROPOSALS.