B-161296, MAY 23, 1967

B-161296: May 23, 1967

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TO MCCLELLAND AND BAREFOOT: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 13. THE SUBJECT CONTRACT IS FOR SERVICING VENDING MACHINES FOR THE MARINE CORPS EXCHANGE AT CAMP LEJEUNE FOR A THREE-YEAR PERIOD. - ARE TO BE SERVICED UNDER THE CONTRACT. WHICH WAS AWARDED AFTER FIVE OFFERS WERE RECEIVED AND EVALUATED. YOU CONTEND THAT THE CONTRACT IS NOT IN THE BEST INTEREST OF THE EXCHANGE AS IT WILL RESULT IN A LOSS OF $63. THIS CONCLUSION IS APPARENTLY BASED ON THE PREMISE THAT SEPARATE CONTRACTS FOR EACH TYPE OF VENDING MACHINE WOULD INCREASE THE MONETARY RETURN TO THE EXCHANGE. ALTHOUGH YOU HAVE NOT STATED ANY FACTS IN SUPPORT OF THIS ARGUMENT. THE MARINE CORPS REPORTS THE FOLLOWING: "INFORMATION AVAILABLE AT THIS HEADQUARTERS INDICATES THAT THE CONTRACT AWARD WAS BASED ON AN ANALYSIS OF PROPOSALS RECEIVED WHICH REVEALED THAT NO SIGNIFICANT MONETARY ADVANTAGE WOULD ACCRUE TO THE MARINE CORPS EXCHANGE.

B-161296, MAY 23, 1967

TO MCCLELLAND AND BAREFOOT:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 13, 1967, PROTESTING ON BEHALF OF CANTEEN COMPANY OF EASTERN CAROLINA AGAINST THE AWARD OF A CONTRACT TO AUTOMATIC SERVICE COMPANY BY THE MARINE CORPS EXCHANGE SERVICE DIVISION, SUPPLY DEPARTMENT, CAMP LEJEUNE, NORTH CAROLINA, UNDER REQUEST FOR QUOTATIONS NO. MCX 5-1-4-67.

THE SUBJECT CONTRACT IS FOR SERVICING VENDING MACHINES FOR THE MARINE CORPS EXCHANGE AT CAMP LEJEUNE FOR A THREE-YEAR PERIOD. THREE TYPES OF VENDING MACHINES--- CANDY, CIGARETTES, AND COFFEE/HOT CHOCOLATE--- ARE TO BE SERVICED UNDER THE CONTRACT, WHICH WAS AWARDED AFTER FIVE OFFERS WERE RECEIVED AND EVALUATED.

YOU CONTEND THAT THE CONTRACT IS NOT IN THE BEST INTEREST OF THE EXCHANGE AS IT WILL RESULT IN A LOSS OF $63,000. THIS CONCLUSION IS APPARENTLY BASED ON THE PREMISE THAT SEPARATE CONTRACTS FOR EACH TYPE OF VENDING MACHINE WOULD INCREASE THE MONETARY RETURN TO THE EXCHANGE, ALTHOUGH YOU HAVE NOT STATED ANY FACTS IN SUPPORT OF THIS ARGUMENT.

WITH RESPECT TO EVALUATION OF THE OFFERS RECEIVED, THE MARINE CORPS REPORTS THE FOLLOWING:

"INFORMATION AVAILABLE AT THIS HEADQUARTERS INDICATES THAT THE CONTRACT AWARD WAS BASED ON AN ANALYSIS OF PROPOSALS RECEIVED WHICH REVEALED THAT NO SIGNIFICANT MONETARY ADVANTAGE WOULD ACCRUE TO THE MARINE CORPS EXCHANGE, DURING THE PROPOSED THREE YEAR CONTRACT PERIOD, BY AWARDING INDIVIDUAL CONTRACTS FOR EACH OF THE THREE TYPES OF VENDING MACHINES CONCERNED; CANDY, CIGARETTES, AND COFFEE/HOT CHOCOLATE. IT WAS THE OPINION OF THE STAFF MEMBERS WHO ANALYZED THE PROPOSALS AND OF THE CONTRACTING OFFICER THAT ANY SLIGHT PROFIT INCREASE WHICH MAY ACCRUE TO THE EXCHANGE BY AWARDING THREE SEPARATE CONTRACTS COULD NOT OFFSET THE OBVIOUS SUPERVISION, CONTROL, AND MAINTENANCE ADVANTAGES TO THE EXCHANGE, AND TO THE MARINE CORPS, THAT WOULD ACCRUE FROM A SINGLE CONTRACT AWARD.'

THE MARINE CORPS REPORTS THAT OFFERS WERE SOLICITED, EVALUATED, AND THE CONTRACT AWARDED IN ACCORDANCE WITH THE ARMED SERVICES EXCHANGE REGULATIONS (ASER), DEPARTMENT OF DEFENSE DIRECTIVE 1330.9, AS IMPLEMENTED BY MARINE CORPS ORDER P 4066.13A, MARINE CORPS EXCHANGE MANUAL. ADDITION TO PRESCRIBING CERTAIN BROAD POLICIES WITH RESPECT TO THE OPERATION OF ARMED SERVICES EXCHANGES, LEAVING DETAILED PROCEDURES AND INSTRUCTIONS FOR IMPLEMENTATION IN THE REGULATIONS OF THE RESPECTIVE MILITARY DEPARTMENTS, THE ASER ALSO PROVIDES THAT THE EXCHANGES SHALL BE OPERATED WITH NONAPPROPRIATED FUNDS.

ALTHOUGH THE EXCHANGE IS AN INSTRUMENTALITY OF THE GOVERNMENT, IT IS OPERATED WITH NONAPPROPRIATED FUNDS AND IS THEREFORE NOT SUBJECT TO THE REQUIREMENTS IMPOSED BY THE PROCUREMENT STATUTES AND REGULATIONS APPLICABLE TO GOVERNMENT PROCUREMENT FROM APPROPRIATED FUNDS. SEE 10 U.S.C. 2303 (2). NOR ARE ITS ACTIVITIES SUBJECT TO AUDIT BY THE GENERAL ACCOUNTING OFFICE.

THEREFORE, WE HAVE NO JURISDICTION TO RENDER AN AUTHORITATIVE DECISION IN THE MATTER AND ARE NOT IN A POSITION TO BE OF ANY FURTHER ASSISTANCE TO YOU.