B-155111, NOV. 24, 1964

B-155111: Nov 24, 1964

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TO CASH REGISTER SALES AND SERVICE COMPANY: FURTHER REFERENCE IS MADE TO YOUR CORRESPONDENCE OF AUGUST 31. THE RECORD SHOWS THAT PURCHASE REQUEST AND COMMITMENT FORM NO. 18 109- 40010-65 WAS SUBMITTED TO THE PURCHASING AND CONTRACTING OFFICER ON MAY 11. IT WAS CONCLUDED THAT IT WAS MORE ADVANTAGEOUS FOR THE GOVERNMENT TO USE THE FEDERAL SUPPLY SCHEDULE CONTRACT. IT WAS NOTED THAT YOUR FIRM DID NOT SERVICE ONE OF THE TYPES OF MACHINES IN USE AT THE INSTALLATION. IN THIS CONNECTION YOUR ATTENTION IS INVITED TO SECTION 5-104 OF THE ARMED SERVICES PROCUREMENT REGULATION WHEREIN IT PROVIDES FOR THE OPTIONAL USE OF FEDERAL SUPPLY SCHEDULES FOR OFFICE MACHINE RENTAL. REPAIR AND MAINTENANCE PROVIDING THAT THE CONTRACTING OFFICER FIRST ASSURES HIMSELF THAT USE OF THE SCHEDULE IS REASONABLY JUSTIFIABLE AS BEING MORE ADVANTAGEOUS TO THE GOVERNMENT THAN A PURCHASE FROM OTHER SOURCES.

B-155111, NOV. 24, 1964

TO CASH REGISTER SALES AND SERVICE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR CORRESPONDENCE OF AUGUST 31, 1964, CRITICIZING CERTAIN CONTRACTING PRACTICES AT FORT HOLABIRD IN CONNECTION WITH AN AWARD OF A MAINTENANCE CONTRACT TO THE NATIONAL CASH REGISTER COMPANY FOR FISCAL YEAR 1965.

THE RECORD SHOWS THAT PURCHASE REQUEST AND COMMITMENT FORM NO. 18 109- 40010-65 WAS SUBMITTED TO THE PURCHASING AND CONTRACTING OFFICER ON MAY 11, 1964. THIS PURCHASE REQUEST RECOMMENDED THAT THE ANNUAL MAINTENANCE CONTRACT FOR OFFICE MACHINES BE AWARDED TO THE NATIONAL CASH REGISTER COMPANY UNDER THEIR FEDERAL SUPPLY SERVICES CONTRACT GS 00S-49623. BASED UPON A COMPARISON OF PRICES AND SERVICES OFFERED UNDER THE FEDERAL SUPPLY SERVICE CONTRACT AND THE CONTRACT AWARDED TO YOUR FIRM FOR MAINTENANCE FOR FISCAL YEAR 1964, IT WAS CONCLUDED THAT IT WAS MORE ADVANTAGEOUS FOR THE GOVERNMENT TO USE THE FEDERAL SUPPLY SCHEDULE CONTRACT. SPECIFICALLY, IT WAS NOTED THAT YOUR FIRM DID NOT SERVICE ONE OF THE TYPES OF MACHINES IN USE AT THE INSTALLATION, AND THAT CONSIDERING THE ADMINISTRATIVE COST OF AWARDING A SEPARATE CONTRACT FOR SERVICING THAT TYPE, THE OVERALL COST ON A PER INSPECTION BASIS WOULD BE LOWER UNDER THE FEDERAL SUPPLY CONTRACT. IN THIS CONNECTION YOUR ATTENTION IS INVITED TO SECTION 5-104 OF THE ARMED SERVICES PROCUREMENT REGULATION WHEREIN IT PROVIDES FOR THE OPTIONAL USE OF FEDERAL SUPPLY SCHEDULES FOR OFFICE MACHINE RENTAL, REPAIR AND MAINTENANCE PROVIDING THAT THE CONTRACTING OFFICER FIRST ASSURES HIMSELF THAT USE OF THE SCHEDULE IS REASONABLY JUSTIFIABLE AS BEING MORE ADVANTAGEOUS TO THE GOVERNMENT THAN A PURCHASE FROM OTHER SOURCES, PRICE, DELIVERY, SERVICE AND ADMINISTRATIVE EXPENSE CONSIDERED. OF COURSE, IF A PURCHASING OFFICER HAS ACTUAL KNOWLEDGE THAT A CONTEMPLATED PURCHASE COULD BE MADE MORE ADVANTAGEOUSLY FROM A SOURCE OTHER THAN A NONMANDATORY SUPPLY SCHEDULE, EVEN AFTER ALLOWING FOR THE COST OF ADVERTISING AND OTHER ADMINISTRATIVE EXPENSE, HIS USE OF THE SCHEDULE MIGHT BE SUBJECT TO QUESTION. B-146334, JULY 31, 1961. IN THE PRESENT CASE, WHILE IT MIGHT HAVE BEEN PREFERABLE TO SOLICIT A QUOTATION FROM YOUR FIRM, SINCE THE AWARD APPEARS TO HAVE BEEN MADE IN GOOD FAITH AND IN ACCORDANCE WITH THE ASPR PROVISION QUOTED ABOVE, WE FIND NO BASIS TO QUESTION ITS VALIDITY.

IT IS CONCEDED THAT FAILURE TO NOTIFY YOUR COMPANY THAT THE GOVERNMENT DID NOT INTEND TO RENEW ITS CONTRACT FOR 1964 AND MR. WHITEHURST'S OVERSIGHT IN FAILING TO RETURN YOUR CALL WAS CONTRARY TO BOTH GOOD BUSINESS PRACTICES AND COMMUNITY RELATIONS. WE TRUST YOU WILL ENCOUNTER NO SIMILAR TREATMENT IN THE FUTURE.