B-157025, JAN. 28, 1966, 45 COMP. GEN. 456

B-157025: Jan 28, 1966

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- THE DISTRICT IS NOT SUBJECT TO THE SMALL BUSINESS ACT. - IS NOT RESTRICTIVE OF COMPETITION AND IS IN THE BEST INTERESTS OF THE DISTRICT. TAKING INTO ACCOUNT THAT CONTRACT PRICES ARE SUBJECT TO INCREASE UPON ISSUANCE OF A NEW CATALOGUE. THE PROCUREMENT WAS INITIATED PURSUANT TO INVITATION. WHEREIN IT IS STATED THAT: * * * INVITATION TO BID IS DESIGNED TO RESULT IN A CONTRACT WHICH WILL ENABLE THE DISTRICT TO ECONOMICALLY AND EFFICIENTLY SUPPLY INSTITUTIONALIZED AND OTHER WARDS OF THE DISTRICT WITH ESSENTIAL WEARING APPAREL AND FOOTWEAR. AS WELL AS TO PROVIDE A SINGLE SUPPLY SOURCE FOR CERTAIN OTHER ITEMS ENUMERATED IN THE SCHEDULE WHICH ARE GENERALLY NEEDED TO MEET DAY-TO-DAY OPERATING REQUIREMENTS OF ALL DISTRICT AGENCIES.

B-157025, JAN. 28, 1966, 45 COMP. GEN. 456

DISTRICT OF COLUMBIA - CONTRACTS - REQUIREMENTS CONTRACT PROPRIETY THE DISTRICT OF COLUMBIA UNSUCCESSFUL IN DRAWING SPECIFICATIONS, PROCURING, STORING, AND DISTRIBUTING LOW VALUED WELFARE ITEMS WITHIN THE FRAMEWORK OF SECTION 3709, REVISED STATUTES (41 U.S.C. 5), THE USE OF A "CATALOGUE" REQUIREMENTS CONTRACT METHOD OF PURCHASING THAT LIMITS BIDDING TO FIRMS ABLE TO SUPPLY THE FULL LINE OF ITEMS INCLUDED IN ONE OR MORE OF THE CATEGORIES LISTED IN THE INVITATION FOR BIDS, IN LIEU OF A SEMIANNUAL PROCUREMENT METHOD FAVORING SMALL BUSINESS--- THE DISTRICT IS NOT SUBJECT TO THE SMALL BUSINESS ACT, 15 U.S.C. 631--- IS NOT RESTRICTIVE OF COMPETITION AND IS IN THE BEST INTERESTS OF THE DISTRICT, ELIMINATING THE EXCESSIVE COSTS OF OPEN-MARKET PURCHASES, STORAGE, AND SURPLUS INVENTORIES; HOWEVER, BEFORE ENTERING INTO ANY FUTURE ,CATALOGUE" REQUIREMENTS CONTRACT, A COMMON BASIS FOR EVALUATING BIDS REQUIRES THAT SPECIFICATIONS LIST THE QUALITY OF CATALOGUE ITEMS, AND THAT THE METHOD OF EVALUATION CONSIDER CATALOGUE PRICES AND NOT DISCOUNTS OFFERED, TAKING INTO ACCOUNT THAT CONTRACT PRICES ARE SUBJECT TO INCREASE UPON ISSUANCE OF A NEW CATALOGUE.

TO LANDIS, COHEN AND SINGMAN, JANUARY 28, 1966:

IN YOUR CORRESPONDENCE OF JUNE 17, AUGUST 31, SEPTEMBER 15 AND 17, 1965, YOU PROTEST, ON BEHALF OF THE NATIONAL SMALL BUSINESS ASSOCIATION, AGAINST THE ACTION OF THE DISTRICT OF COLUMBIA IN AWARDING A REQUIREMENTS CONTRACT FOR VARIOUS ITEMS TO SEARS, ROEBUCK AND COMPANY. THE PROCUREMENT WAS INITIATED PURSUANT TO INVITATION, BID, AND CONTRACT (SUPPLY) NO. 84-000-5- 0556-KM, WHEREIN IT IS STATED THAT:

* * * INVITATION TO BID IS DESIGNED TO RESULT IN A CONTRACT WHICH WILL ENABLE THE DISTRICT TO ECONOMICALLY AND EFFICIENTLY SUPPLY INSTITUTIONALIZED AND OTHER WARDS OF THE DISTRICT WITH ESSENTIAL WEARING APPAREL AND FOOTWEAR, AS WELL AS TO PROVIDE A SINGLE SUPPLY SOURCE FOR CERTAIN OTHER ITEMS ENUMERATED IN THE SCHEDULE WHICH ARE GENERALLY NEEDED TO MEET DAY-TO-DAY OPERATING REQUIREMENTS OF ALL DISTRICT AGENCIES. IT IS THE FURTHER INTENT OF THIS CONTRACT TO MINIMIZE THE NEED FOR CARRYING ITEMS IN INVENTORY DUE TO EXTREMELY LIMITED WAREHOUSING FACILITIES IN DISTRICT OF COLUMBIA AGENCIES, AND TO MINIMIZE OBSOLESCENCE OF ARTICLES PURCHASED WHICH BECAUSE OF THE GREAT VARIETY OF SIZES, STYLES, TYPES, AND COLORS OF ITEMS REQUIRED, IT IS IMPOSSIBLE TO PREDICT THE NEED ACCURATELY FOR EXTENSIVE PERIODS.

IN THE SUBJECT INVITATION THE DISTRICT PROPOSED TO OBLIGATE ITSELF THROUGH MARCH 14, 1966, TO PURCHASE ANTICIPATED REQUIREMENTS DESCRIBED BY THE GENERAL CATEGORIES OF ARTICLES LISTED BELOW:

TABLE

ARTICLES ESTIMATED PURCHASES WEARING

APPAREL $350,000 FOOTWEAR

75,000 HARDWARE

25,000 ELECTRICAL SUPPLIES 40,000 ELECTRICAL

APPLIANCES 6,000

THE FIRST TWO GROUPS REPRESENTED THE DISTRICT'S CLOTHING AND FOOTWEAR REQUIREMENTS FOR WELFARE PURPOSES, WHILE THE LAST THREE GROUPS WERE INCLUDED AS AN AUGMENTATION OF THE DISTRICT'S SMALL PURCHASE PROCEDURES TO SATISFY DAY-TO-DAY OPERATING NEEDS.

ONLY FIRMS WHICH PUBLISHED A GENERAL SALES CATALOGUE OFFERING A FULL LINE OF ALL TYPES AND SIZES OF ONE OR MORE OF THE GENERAL CATEGORY OF ARTICLES LISTED ABOVE, AND LOCAL FIRMS HAVING SUBSTANTIAL STOCKS AND PRICE RECORDS FOR SUCH ARTICLES, WERE INVITED TO BID. THE INVITATION PROVIDED THAT THE CONTRACT OR CONTRACTS WOULD BE SUBJECT TO TERMINATION BY EITHER PARTY UPON 60 DAYS WRITTEN NOTICE AND WOULD:

* * * BE AWARDED TO THE BIDDER OFFERING THE BEST DISCOUNT FROM EITHER HIS CATALOGUE PRICES OR HIS POSTED SALE PRICES OF THE ITEMS INVOLVED SUBJECT TO ANALYSIS BY THE DISTRICT TO ASSURE THAT THE BEST DISCOUNT OFFERED BY THE BIDDER SHALL APPLY TO HIS PUBLISHED CATALOGUE AND ANY OTHER SPECIAL SALES BULLETINS OR NEWSPAPER ADVERTISING HE PUBLISHES DURING THE TERM OF THE CONTRACT. THIS WOULD INCLUDE ANY NEWSPAPER OR OTHER ADVERTISING PUBLISHED BY OR FOR VENDORS BIDDING ON THIS INVITATION WHO DO NOT PUBLISH CATALOGUES.

THE PRICES IN THE CATALOGUE OR OTHER SALES DOCUMENTS WERE TO REMAIN IN EFFECT ONLY DURING THE DATES SPECIFIED ON SUCH DOCUMENTS. DELIVERIES WERE REQUIRED TO BE MADE WITHIN 10 TO 30 DAYS, DEPENDING ON THE AMOUNT ORDERED.

THE INVITATION WAS SENT TO 76 VENDORS, INCLUDING SUCH FIRMS AS SEARS, ROEBUCK AND COMPANY, GENERAL ELECTRIC COMPANY, WESTINGHOUSE ELECTRIC CORPORATION, J. C. PENNEY COMPANY, MONTGOMERY WARD AND COMPANY, G. C. MURPHY COMPANY, AND SPIEGEL, INC. IT INVITED BIDS UPON A "FULL LINE" OF ONE OR MORE OF THE FIVE CATEGORIES OF ARTICLES, AND STATED THAT CLOTHING SHOULD BE LABELED IN ACCORDANCE WITH THE WOOL PRODUCTS LABELING ACT, 15 U.S.C. 68 NOTE, AND THE TEXTILE FIBER PRODUCTS IDENTIFICATION ACT, 15 U.S.C. 70 NOTE, AND ELECTRICAL PRODUCTS SHOULD BE APPROVED BY A NATIONALLY RECOGNIZED LABORATORY. IT ALSO CONTAINED A CLAUSE PROVIDING THAT THE SUPPLIES "SHALL BE NEW AND OF THE BEST QUALITY AND THE WORKMANSHIP SHALL BE OF THE HIGHEST GRADE.' HOWEVER, THE INVITATION WAS SILENT WITH RESPECT TO ANY MORE SPECIFIC CHARACTERISTICS OF THE ITEMS INCLUDED IN THE CATEGORIES OF ARTICLES ON WHICH BIDDERS WERE EXPECTED TO MAKE THEIR OFFERS.

SIX BIDS WERE RECEIVED, AND WERE EVALUATED FOR ACTUAL COST, QUALITY AND RANGE OF SIZES AND STYLES BY SELECTING AT RANDOM AND INSPECTING SIX ITEMS FROM EACH OF THE LISTED CATEGORIES AS OFFERED BY THE SIX BIDDERS. SEARS WAS FOUND TO OFFER THE LOWEST ACTUAL COST ON 22 ITEMS, WHILE MURPHY WAS LOW ON 7 ITEMS. SEARS WAS CONSIDERED THE BEST BIDDER FOR EACH OF THE FIVE CATEGORIES, AND ACCORDINGLY, ON MAY 21, 1965, WAS AWARDED A CONTRACT FOR THE ENTIRE REQUIREMENT. WE UNDERSTAND THAT CATALOGUES WERE NOT DISTRIBUTED AND ARTICLES WERE NOT ACTUALLY ORDERED UNTIL ABOUT JULY 1, 1965, AND THAT THE CONTRACT IS PRESENTLY SCHEDULED TO TERMINATE ON MARCH 14, 1966.

PROCUREMENT BY THE DISTRICT OF COLUMBIA IS GOVERNED BY SECTION 3709, REVISED STATUTES OF THE UNITED STATES, AS AMENDED, 41 U.S.C. 5, WHICH PROVIDES THAT, EXCEPT IN CERTAIN ENUMERATED CIRCUMSTANCES, ALL CONTRACTS OVER $2,500 FOR SUPPLIES OR SERVICES "SHALL BE MADE BY ADVERTISING ... FOR PROPOSALS ...' THE DISTRICT REPORTS THAT SEVERAL PAST ATTEMPTS TO DEAL WITH THE PROBLEM OF DRAWING SPECIFICATIONS, PROCURING, STORING, AND DISTRIBUTING LOW VALUED WELFARE ITEMS, WITHIN THE FRAMEWORK OF R.S. 3709, HAVE BEEN UNSUCCESSFUL.

THE DISTRICT ALSO REPORTS THAT IT FIRST TRIED TO USE ITS OWN OPEN END TERM CONTRACTS TO PURCHASE ALL WELFARE CLOTHING AND FOOTWEAR NEEDS, AND THEN ATTEMPTED TO PURCHASE THESE ITEMS, WHICH ARE PRODUCED AND SUPPLIED IN VARIETIES OF TYPES, SIZES, AND SHAPES OR STYLES, THROUGH THE GENERAL SERVICES ADMINISTRATION'S FEDERAL SUPPLY SCHEDULE. THE DISTRICT FOUND THESE APPROACHES IMPRACTICAL BECAUSE THE ANTICIPATED WELFARE NEEDS REPRESENTED TOO SMALL A QUANTITY FOR DEALERS TO PROFITABLY SUPPLY ON A CALL BASIS, AND THEREFORE, BIDS WERE NOT RECEIVED ON ALL ITEMS. MOREOVER, THE SUPPLIERS WHO DID BID WERE GENERALLY UNWILLING TO COMMIT THEMSELVES TO ANY BETTER DELIVERY SCHEDULE THAN 60 TO 90 DAYS AFTER THE RECEIPT OF AN ORDER. SUCH A DELIVERY SCHEDULE WAS REGARDED AS UNSUITABLE FOR MEETING THE SEASONAL CLOTHING NEEDS OF THE DISTRICT'S WELFARE CHILDREN. ADDITION, A CONSIDERABLE AMOUNT OF TIME IS REQUIRED TO ANALYZE BIDS, EXAMINE SAMPLES, AND AWARD CONTRACTS.

THE DISTRICT THEN TRIED TO ESTIMATE ITS CONSOLIDATED WELFARE NEEDS AND PURCHASE THEM SEMIANNUALLY BY FORMAL ADVERTISING. HOWEVER, SUCH PURCHASES INVOLVED DRAWING OR REVISING AN UPDATING SPECIFICATIONS FOR 432 ITEMS, EACH TO BE FURNISHED IN A FULL RANGE OF COLORS, STYLES AND SIZES. NO ITEM GENERATED AN ANNUAL EXPENDITURE OF AS MUCH AS $1,000. ADDITIONALLY, MORE THAN A THOUSAND SAMPLES WERE EXAMINED TO INSURE COMPLIANCE WITH SPECIFICATIONS AND DISTRICT NEEDS AS TO QUALITY, SUITABILITY, VARIETY, SIZE AND STYLE RANGES, AND COLOR SELECTIONS. FURTHERMORE, THE SEMIANNUAL PURCHASE ON THE BASIS OF ESTIMATED FUTURE NEEDS NECESSARILY RESULTED IN CONSIDERABLE STORAGE AND CLERICAL EXPENSE. IN ADDITION, THE DISTRICT WAS UNABLE TO ARRIVE AT RELIABLE ESTIMATES OF FUTURE NEEDS, AND THEREFORE FOUND ITSELF ON THE ONE HAND STORING GARMENTS AND SHOES FOR WHICH NO ONE HAD ANY NEED, AND ON THE OTHER, SENDING WELFARE PERSONNEL ON SHOPPING MISSIONS TO LOCAL STORES TO BUY ARTICLES FOR WHICH A NEED HAD NOT BEEN ANTICIPATED. IT IS REPORTED THAT PURCHASES ON THE OPEN MARKET TO MEET IMMEDIATE AND UNANTICIPATED NEEDS WHICH HAD NOT BEEN INCLUDED IN THE SEMIANNUAL PURCHASES, ACCOUNTED FOR OVER HALF OF THE DISTRICT'S WELFARE EXPENDITURES. THESE SMALL QUANTITY PROCUREMENTS WERE MADE WITHOUT ADVERTISING AND GENERALLY AT RETAIL PRICES. THE HARDWARE, ELECTRICAL SUPPLIES AND APPLIANCES NOW LISTED IN THE SEARS CONTRACT ALSO PREVIOUSLY INVOLVED THE PURCHASE OF THOUSANDS OF SMALL ITEMS WHICH WERE OBTAINED UNDER THE DISTRICT'S SMALL PURCHASE PROGRAM TO MEET DAY-TO DAY NEEDS.

THE DISTRICT THEREFORE CONCLUDED THAT DRAWING SPECIFICATIONS, INSPECTING SAMPLES, STORING BULK PURCHASES FOR ESTIMATED NEEDS, AND DISTRIBUTING STORED AND OPEN MARKET PURCHASES, RESULTED IN SUCH EXCESSIVE COSTS AS TO RENDER SEMIANNUAL PROCUREMENTS OF CONSOLIDATED WELFARE NEEDS IMPRACTICAL. IT STATES THAT THE SEARS CONTRACT WILL PROVIDE BETTER QUALITY AND GREATER VARIETY OF WELFARE GOODS THAN OBTAINED THROUGH THE SEMIANNUAL PURCHASES, AND THAT ALTHOUGH THE COST OF THE ARTICLES THEMSELVES IS EXPECTED TO BE SLIGHTLY HIGHER, TOTAL COSTS, INCLUDING ADMINISTRATIVE, CLERICAL AND STORAGE COSTS, WHICH ARE BELIEVED TO HAVE PREVIOUSLY EXCEEDED THE COST OF THE ARTICLES THEMSELVES, WILL BE SUBSTANTIALLY REDUCED AS A RESULT OF USING THE "CATALOGUE" METHOD OF PURCHASING REQUIREMENTS.

UNDER THE PREVIOUS METHOD OF SEMIANNUAL PROCUREMENT, SPECIFICATIONS WERE PUBLISHED FOR, AND BIDS WERE INVITED ON, INDIVIDUAL ITEMS. IT IS THE DISTRICT'S DEPARTURE FROM THIS METHOD OF PROCUREMENT, AND ITS ADOPTION OF ONE WHICH REQUIRES BIDDERS TO OFFER A FULL LINE OF ALL ITEMS WITHIN CERTAIN CATEGORIES, WHICH GIVES RISE TO YOUR COMPLAINT ON BEHALF OF THE SMALL BUSINESS FIRMS REPRESENTED BY YOUR CLIENT. YOU DO NOT APPEAR TO CONTEST THE DISTRICT'S POSITION THAT IT IS NOT SUBJECT TO THE SMALL BUSINESS ACT, 15 U.S.C. 631. HOWEVER, YOU MAINTAIN THAT THE "CATALOGUE" CONTRACT WITH SEARS WAS NOT AWARDED PURSUANT TO THE RULES OF COMPETITIVE BIDDING ESTABLISHED UNDER R.S. 3709, AND THEREFORE IS INVALID. SPECIFICALLY, YOU CONTEND THAT THE CATALOGUE METHOD OF PROCUREMENT UNDERMINES THE INTENT AND EFFECTIVENESS OF THE SYSTEM OF COMPETITIVE BIDS, BECAUSE SUCH METHOD ELIMINATES FROM COMPETITION THOSE FIRMS WHICH ARE UNABLE TO SUPPLY A "FULL LINE" OF ITEMS. YOU ALSO ARGUE THAT THE SUBJECT INVITATION WAS IMPROPER BECAUSE IT FAILED, FOR REASONS TO BE DISCUSSED LATER IN THE DECISION, TO PROVIDE AN ADEQUATE BASIS FOR DETERMINING WHICH OF THE ,CATALOGUE" BIDS WAS MOST ADVANTAGEOUS TO THE DISTRICT.

WHILE COMPETITION IN THIS PROCUREMENT HAS BEEN RESTRICTED TO THOSE FIRMS WHICH CAN SUPPLY A FULL LINE OF ONE OR MORE OF THE FIVE CATEGORIES LISTED IN THE INVITATION, A REASONABLE RESTRICTION UPON COMPETITION DOES NOT IN ITSELF VIOLATE THE RULE OF COMPETITIVE BIDDING THAT ALL BIDDERS SHOULD HAVE AN EQUAL OPPORTUNITY TO BID ON A COMMON BASIS, IF IT CAN BE SHOWN THAT THE RESTRICTION IS NECESSARY TO THE BEST INTEREST OF THE PROCURING AGENCY. THUS, OUR OFFICE HAS UPHELD RESTRICTIONS ON COMPETITION BY APPROVING QUALIFIED PRODUCTS AND TWO STEP METHODS OF PROCUREMENTS AS CONSISTENT WITH GOVERNMENT NEEDS AND THEREFORE NOT UNDULY RESTRICTIVE. COMP. GEN. 809; 40 ID. 35. WE BELIEVE THAT THE SOLICITATION OF BIDS ONLY FROM FIRMS WHICH CAN SUPPLY A NUMBER OF SPECIFIED SUPPLIES OR SERVICES (E.G., FROM BUILDING CONTRACTORS RATHER THAN FROM THE SEVERAL SUBCONTRACTORS THEY MAY EMPLOY) IS NOT UNDULY RESTRICTIVE OF COMPETITION WHERE THE GOODS OR SERVICES EXHIBIT A REASONABLY GERMANE RELATIONSHIP EACH TO THE OTHERS.

FROM THE FACTS REPORTED BY THE DISTRICT OF COLUMBIA IT APPEARS THAT THREE METHODS OF PROCURING WELFARE NEEDS HAVE BEEN TRIED AND FOUND UNSATISFACTORY. FURTHER, THE PREVIOUS PRACTICE OF SEMIANNUAL PROCUREMENTS FOR WELFARE NEEDS, AND THE DISTRICT'S INABILITY TO ACCURATELY ESTIMATE ITS CLOTHING AND SHOE NEEDS FOR WELFARE RECIPIENTS, HAS RESULTED IN ADDED EXPENDITURES FOR STORAGE SPACE AND SURPLUS ITEMS WHICH WILL BE REDUCED BY ORDERING ITS NEEDS FROM THE SEARS CATALOGUE ONCE EACH WEEK. IT IS REPORTED THAT IN MANY CASES ITEMS MAY BE DELIVERED DIRECT TO THE RECIPIENT WITHOUT ADDITIONAL CHARGE, THUS FARTHER REDUCING STORAGE EXPENSES. FURTHERMORE, THE CATALOGUE METHOD OF PROCUREMENT WILL ELIMINATE THE ADDITIONAL COST ASSOCIATED WITH PREVIOUSLY HAVING PURCHASED ON THE OPEN MARKET, OFTEN WITH NO COMPETITION, 50 PERCENT OF THE WELFARE NEEDS AND ALL OF THE SMALL QUANTITY OPERATING NEEDS REPRESENTED BY THE NONWELFARE "CATEGORIES.'

IN VIEW OF THE ABOVE, IT WOULD APPEAR THAT THE BENEFITS, WHICH THE DISTRICT ANTICIPATES FROM GROUPING ITS WELFARE AND OPERATING NEEDS INTO ONLY FIVE CATEGORIES AND AWARDING A CONTRACT, OR CONTRACTS, ON THAT BASIS, ARE SUCH AS TO SUPPORT A CONCLUSION THAT PROCUREMENT ON THAT BASIS WOULD BE IN THE DISTRICT'S BEST INTEREST. WHILE IT IS APPARENT THAT THE CATEGORIES COULD HAVE BEEN BROKEN DOWN FURTHER (E.G., MEN-S, WOMEN-S, AND CHILDREN'S "WEARING APPAREL AND FOOTWEAR"), AND THAT ADDITIONAL BIDDERS MAY HAVE BEEN PERMITTED TO COMPETE THEREUNDER, WE ARE UNABLE TO CONCLUDE THAT ANY SUCH FURTHER BREAKDOWN WAS REQUIRED, OR THAT THE BROADER CATEGORIES SET OUT IN THE IFB DID NOT CONSTITUTE REASONABLE GROUPINGS OF THE ITEMS COMPRISING THE DISTRICT'S NEEDS. IT IS THEREFORE OUR OPINION THAT THE RESTRICTION OF BIDDING TO THOSE FIRMS WHICH COULD SUPPLY A FULL LINE OF THE ITEMS INCLUDED IN ONE OR MORE OF THE FIVE CATEGORIES LISTED IN THE IFB WAS NOT UNDULY RESTRICTIVE OF COMPETITION.

YOU ASSERT SEVERAL REASONS FOR ALLEGING THAT THE IFB DID NOT PROVIDE AN ADEQUATE BASIS FOR DETERMINING WHICH OF THE "CATALOGUE" BIDS WAS MOST ADVANTAGEOUS TO THE DISTRICT. SPECIFICALLY, YOU SAY THAT (1) THE SPECIFICATIONS FOR THIS PROCUREMENT ARE TOO BROAD AND INDEFINITE TO PROVIDE A COMMON BASIS FOR EVALUATING BIDS, BECAUSE THE QUALITY OF THE CATALOGUE ITEMS WHICH ARE INCLUDED IN THE LISTED CATEGORIES IS NOT SPECIFIED; (2) THE METHOD OF EVALUATION PUBLISHED IN THE IFB WAS BASED ONLY ON THE DISCOUNT OFFERED BY BIDDERS, AND DID NOT CONSIDER THE CATALOGUE PRICE ON WHICH THE ULTIMATE SELLING PRICE TO THE GOVERNMENT WAS BASED; AND (3) THE DISTRICT DID NOT TAKE INTO ACCOUNT THE FACT THAT THE CONTRACT PRICES WERE SUBJECT TO INCREASE UPON THE ISSUANCE OF A NEW CATALOGUE. WE ARE IN SUBSTANTIAL AGREEMENT WITH YOUR POSITION ON THESE POINTS, AND WE ARE THEREFORE INSTRUCTING THE DISTRICT TO CORRECT CERTAIN DEFICIENCIES IN THESE AREAS PRIOR TO ENTERING INTO ANY FUTURE "CATALOGUE" CONTRACT. WHETHER FUTURE CONTRACTS OF THIS TYPE WILL BE FORMALLY ADVERTISED OR NEGOTIATED WOULD APPEAR TO DEPEND UPON WHETHER THE DISTRICT CAN JUSTIFY ANY FAILURE TO CORRECT SUCH DEFICIENCIES. WITH RESPECT TO THE PRESENT CONTRACT, THE DISTRICT'S STUDY OF RANDOMLY SELECTED ITEMS FROM EACH CATEGORY APPEARS TO HAVE BEEN DESIGNED TO ASSURE THAT THE OFFERED GOODS WERE OF AN ACCEPTABLE QUALITY, TO ASSIGN SOME COMPETITIVE RELATIONSHIP BETWEEN PRICE AND QUALITY, AND TO GUARANTEE THAT THE LOWEST DISCOUNT BID WAS ALSO THE LOWEST PRICE BID FOR THE DESIRED QUALITY. VIEW THEREOF, WE ARE NOT DISPOSED TO TAKE FURTHER ACTION WITH RESPECT TO THE CURRENT SEARS CONTRACT. SEE 17 COMP. GEN. 789, INVOLVING SIMILARLY DEFECTIVE SPECIFICATIONS.