B-161717, AUGUST 25, 1967, 47 COMP. GEN. 135

B-161717: Aug 25, 1967

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1967: REFERENCE IS MADE TO YOUR PROTEST BY LETTER DATED MAY 8. YOU CONTEND THAT THE JUSTIFICATION FOR THE PURCHASE OF THE HIGHER PRICED IBM EQUIPMENT IS UNFAIR. IN THAT THE SIZE OF THE COMPETING COMPANIES WAS A MAJOR FACTOR IN INFLUENCING THE PURCHASE OF THE IBM EQUIPMENT. THAT IS. YOU ARE SMALL BUSINESS WITH ONLY FOUR SERVICE TECHNICIANS TO HANDLE THE SERVICING OF YOUR EQUIPMENT IN THE SAN FRANCISCO AREA AS OPPOSED TO IBM. YOU STATE THAT NO MAKE OF MACHINE WAS EVALUATED TO DETERMINE WHETHER IT WOULD PERFORM SATISFACTORILY AT THE HOSPITAL. WHOSE NAMES WERE FURNISHED TO THE PROCURING OFFICE AS REFERENCES. THAT WHILE USERS OF IBM EQUIPMENT IN THE HOSPITAL WERE CONSULTED CONCERNING THE PERFORMANCE OF IBM EQUIPMENT.

B-161717, AUGUST 25, 1967, 47 COMP. GEN. 135

CONTRACTS - FEDERAL SUPPLY SCHEDULE - TO OTHER THAN THE LOW BIDDER - JUSTIFICATION THE PURCHASE OF DICTATING EQUIPMENT UNDER A MULTIPLE-AWARD FEDERAL SUPPLY SCHEDULE CONTRACT FROM OTHER THAN THE LOW BIDDER JUSTIFIED ON THE BASIS OF A HIGHER TRADE-IN VALUE, MORE EXTENSIVE AND DEPENDABLE MAINTENANCE AND REPAIR SERVICE, THAT THE EQUIPMENT WOULD BETTER SERVE THE ACTUAL NEEDS OF THE USING AGENCY, AND THAT ONE FEATURE OF THE EQUIPMENT ALONE WOULD RESULT IN A COST SAVING WHICH WOULD ABSORB THE PRICE DIFFERENCE WITHIN A FEW YEARS, A SAVING THAT WOULD CONTINUE IN SUBSEQUENT YEARS, SATISFIES THE REQUIREMENTS OF PARAGRAPH 101-26.408-3 OF THE FEDERAL PROPERTY MANAGEMENT REGULATION, AND THE PURCHASE MORE ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, COMES WITHIN THE CONTEMPLATION OF 41 U.S.C. 253 (B).

TO STENOCORD DICTATION SYSTEMS, AUGUST 25, 1967:

REFERENCE IS MADE TO YOUR PROTEST BY LETTER DATED MAY 8, 1967, ADDRESSED TO THE FEDERAL TRADE COMMISSION, AGAINST THE PURCHASE BY THE UNITED STATES PUBLIC HEALTH SERVICE HOSPITAL, SAN FRANCISCO, CALIFORNIA, UNDER A MULTIPLE-AWARD FEDERAL SUPPLY SERVICE CONTRACT, OF DICTATING EQUIPMENT FROM THE INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) AT A PRICE APPROXIMATELY $4,000 HIGHER THAN THE PRICE OF YOUR EQUIPMENT AVAILABLE UNDER THE SAME CONTRACT.

YOU CONTEND THAT THE JUSTIFICATION FOR THE PURCHASE OF THE HIGHER PRICED IBM EQUIPMENT IS UNFAIR, IN THAT THE SIZE OF THE COMPETING COMPANIES WAS A MAJOR FACTOR IN INFLUENCING THE PURCHASE OF THE IBM EQUIPMENT, THAT IS, YOU ARE SMALL BUSINESS WITH ONLY FOUR SERVICE TECHNICIANS TO HANDLE THE SERVICING OF YOUR EQUIPMENT IN THE SAN FRANCISCO AREA AS OPPOSED TO IBM, WHICH HAS 28 SERVICE TECHNICIANS IN THE SAME AREA. IN ADDITION, YOU STATE THAT NO MAKE OF MACHINE WAS EVALUATED TO DETERMINE WHETHER IT WOULD PERFORM SATISFACTORILY AT THE HOSPITAL; THAT NONE OF THE CUSTOMERS PREVIOUSLY SUPPLIED BY YOU AND BY IBM, WHOSE NAMES WERE FURNISHED TO THE PROCURING OFFICE AS REFERENCES, VOICED ANY COMPLAINTS CONCERNING EITHER IBM OR STENOCORD EQUIPMENT; AND THAT WHILE USERS OF IBM EQUIPMENT IN THE HOSPITAL WERE CONSULTED CONCERNING THE PERFORMANCE OF IBM EQUIPMENT, NO SIMILAR SURVEY WAS MADE WITH RESPECT TO THE STENOCORD EQUIPMENT, WHICH, YOU ASSERT HAS BEEN IN USE IN THE UNITED STATES PUBLIC HEALTH SERVICE DENTAL HEALTH CLINIC IN SAN FRANCISCO.

THE PURCHASE IN QUESTION, COVERING BOTH INDIVIDUAL AND CENTRALIZED DICTATING EQUIPMENT, WAS MADE UNDER ORDER NO. 2164, DATED APRIL 26, 1967, IN THE TOTAL AMOUNT OF $15,315, LESS A TRADE-IN ALLOWANCE IN THE AMOUNT OF $110.00 ON OBSOLETE EQUIPMENT.

THE FILE MADE AVAILABLE TO OUR OFFICE BY THE SURGEON GENERAL OF THE UNITED STATES INCLUDES CORRESPONDENCE EXCHANGED BETWEEN YOU AND THE GENERAL SERVICES ADMINISTRATION (GSA) CONCERNING THE PURCHASE. IN A LETTER DATED MAY 8 TO GSA, YOU CONTENDED THAT THE PURCHASE OF THE HIGHER PRICED IBM EQUIPMENT VIOLATED FEDERAL PROPERTY MANAGEMENT REGULATION (FPMR) 101-26.408 RELATING TO PROCUREMENTS UNDER MULTIPLE AWARD CONTRACTS OF THE FEDERAL SUPPLY SERVICE. BY LETTER DATED MAY 12, GSA ADVISED YOU THAT THERE IS NO PROHIBITION IN THE REGULATION AGAINST THE PURCHASE OF OTHER THAN THE LOWEST PRICED ITEM ON A FEDERAL SUPPLY SCHEDULE, AND THAT WHILE A JUSTIFICATION MUST BE ISSUED BY THE PURCHASING AGENCY FOR PROCUREMENT OF A HIGHER PRICED ITEM, GSA DOES NOT REVIEW OR EVALUATE THE PARTICULAR JUSTIFICATION AND THEREFORE HAS NO AUTHORITY TO INVESTIGATE THE PURCHASE IN QUESTION. THE FILE ALSO INCLUDES DOCUMENTATION SETTING FORTH THE JUSTIFICATION FOR THE HOSPITAL PROCUREMENT ACTION, THE SUBSTANCE OF WHICH IS DISCUSSED BELOW.

PRIOR TO MAKING THE PURCHASE, THE USING ACTIVITY, THE MEDICAL RECORD SERVICE OF THE HOSPITAL, REVIEWED ITS NEEDS. DICTATING EQUIPMENT IS USED BY HOSPITAL PHYSICIANS TO RECORD CASE DATA, THE TRANSCRIPTION OF WHICH MAY BE DEFERRED FOR SOMETIME BUT THE RECORDING OF WHICH IS DESIRABLE WHILE THE CASES ARE FRESH IN THE MINDS OF THE PHYSICIANS. ONE OF THE MAIN CONSIDERATIONS WAS THE QUALITY OF THE RECORDINGS, SINCE THE TRANSCRIBERS WORK WITH THE EQUIPMENT 8 HOURS A DAY, 5 DAYS A WEEK. EXPERIENCE WITH PREVIOUSLY PROCURED EQUIPMENT SHOWED THAT, ASIDE FROM MECHANICAL PROBLEMS AND POOR SERVICE, THE RECORDINGS WERE AFFECTED BY SURFACE NOISE, CLIPPING, LACK OF CLARITY AND DOUBLE DICTATION, WHICH ENTAILED ADDITIONAL TYPING TIME AND BACKLOGS AMONG OTHER DISADVANTAGES. FROM THIS STANDPOINT, IT WAS DETERMINED THAT EQUIPMENT USING A MAGNETIC BELT FOR RECORDING WAS MORE ADVANTAGEOUS THAN EQUIPMENT USING MAGNETIC TAPE AND AN EMBOSSED BELT. THEREFORE, CONSIDERATION WAS LIMITED TO THE MAGNETIC BELT TYPE OF EQUIPMENT MANUFACTURED BY IBM, BY U.S. AUDIO AND COPY CORPORATION (GRAY) AND BY YOU.

A REPRESENTATIVE OF THE USING ACTIVITY VISITED VARIOUS LOCAL GOVERNMENT AND OTHER MEDICAL INSTITUTIONS AT WHICH ALL THREE MAKES OF EQUIPMENT WERE IN USE, THE PERFORMANCE OF THE STENOCORD EQUIPMENT BEING OBSERVED AT THE STANFORD UNIVERSITY MEDICAL CENTER, PALO ALTO, CALIFORNIA. IN EACH CASE, THE REPRESENTATIVE DISCUSSED WITH EACH USER THE PERFORMANCE FEATURES AND ANY PROBLEMS WITH THE PARTICULAR TYPE OF EQUIPMENT. THE FOLLOWING GENERAL CONCLUSIONS WERE REACHED:

"ALL THREE SYSTEMS OFFER THE FOLLOWING FEATURES IN COMMON ON THE INDIVIDUAL DICTATING UNITS - GOOD TONE QUALITY, -ERROR FREE DICTATION-, INDEX CONTROL ON MICROPHONE, BUILT IN CONSOLE SPEAKER FOR CONFERENCE PLAYBACK, INSTANT AUDIBLE SCANNING, REVIEW OF DICTATION, VOLUME AND TUNING CONTROL, AND END OF BELT WARNING SIGNALS. ON THE INDIVIDUAL TRANSCRIBING UNITS ALL THREE OFFER SPEED, VOLUME AND TONE CONTROL, AUDIBLE SCANNING AND UNIFORM BACK SPACING. IBM AND GRAY OFFER FINE LINE TUNING. THE IBM UNIT HAS INDEPENDENT VOLUME AND TONE CONTROL WHICH IS MORE EFFICIENT. IN THE CENTRALIZED DICTATING SYSTEM ALL THREE SYSTEMS ARE COMPATIBLE WITH THE EXISTING WIRING, ALL OFFER PLAYBACK AND REVIEW, AUTOMATIC RECYCLING, END OF DICTATION LOCKOUT AND END OF BELT WARNING SIGNALS FOR DICTATOR AND MACHINE ATTENDANT.'

SPECIFIC DIFFERENCES IN MAJOR AREAS WERE REPORTED AS FOLLOWS:

1. LENGTH OF RECORDINGS: STENOCORD - 12 MINUTES; GRAY AND IBM - 14 MINUTES. IN THIS CONNECTION, THE GRAY AND IBM RECORDERS AUTOMATICALLY LOCK OUT FURTHER DICTATION UNTIL A NEW BELT IS INSERTED ANY TIME DICTATION IS COMPLETED WITHIN THE "END ZONE" OF A BELT, SUCH ZONE BEING 5 MINUTES FOR IBM AND 4 MINUTES FOR GRAY, A FEATURE WHICH IS CONSIDERED TO BE ADVANTAGEOUS IN ELIMINATING USE OF THE SHORT END OF A BELT AND NECESSITATING CONTINUATION OF DICTATION ON SEPARATE BELTS AND THE ATTENDANT NEED FOR THE TIME CONSUMING OPERATION BY THE SUPERVISOR OF SCANNING AND COMBINING THE CONTINUATIONS.

2. BELT LOADING: IBM AND STENOCORD OFFER A SIMPLE ONE-HAND BELT CHANGE, AND THERE ARE SIGNALS TO INDICATE THAT THE BELT IS PROPERLY LOADED. GRAY HOWEVER, OFFERS A BELT LOADING AND UNLOADING TRAY WHICH WORKS WELL ONLY WHEN THE BELT IS NEW AND NOT FLATTENED AND WHICH PRESENTS LOADING DIFFICULTIES AFTER THE BELT HAS BEEN FLATTENED.

3. ERASE MAGNETS: STENOCORD'S MAGNETIC BAR FOR MANUAL ERASE IS NOT CONSIDERED TO BE THE BEST PROCEDURE. IBM'S ERASE MAGNET IS BUILT INTO THE TRANSCRIBER AND REQUIRES A TWO-STEP OPERATION TO PREVENT UNINTENTIONAL ERASING OF THE BELT; ALSO, THE ERASE MAGNET IS SHIELDED SO THAT WHEN IT IS NOT IN ERASE POSITION THE BELT CANNOT TOUCH IT. GRAY'S ERASE MAGNET IS LIKEWISE BUILT INTO ITS MACHINE BUT IS NOT SHEILDED, AND SHOULD THE BELT BE REMOVED FROM THE MACHINE INCORRECTLY, SUCH AS BY LIFTING TOO HIGH, THE ERASE MAGNET WILL ERASE A STRIPE ACROSS THE BELT.

4. INDEX SLIPS: STENOCORD AND GRAY USE A SENSITIZED INDEX SLIP WITH A SMOOTH WAXY SURFACE, WHICH IS DIFFICULT TO WRITE ON, WHICH MUST BE INSERTED INDIVIDUALLY INTO THE RECORDER AT THE TIME THE BELT IS CHANGED, AND WHICH IS EASILY MARKED BY A FINGERNAIL OR PAPER CLIP. THE SIMILARITY BETWEEN SUCH AN ACCIDENTAL MARKING AND THE SCRATCH MARK MADE BY THE RECORDER TO INDICATE CORRECTIONS OR END OF DICTATION ON THE INDEX SLIP ARE CONFUSING TO THE TRANSCRIBER. THE IBM INDEX SLIP IS SMALL BUT STURDY AND PROVIDES SPACE FOR RECORDING PERTINENT IDENTIFYING INFORMATION ON A SURFACE THAT IS EASY TO WRITE ON, AND CORRECTIONS AND END OF DICTATION ARE POSITIVE INDEXING MARKED BY A PERFORATION. IN ADDITION, THE IBM RECORDER IS CAPABLE OF BEING MODIFIED SO THAT THE PERFORATIONS DENOTING CORRECTIONS WILL BE ROUGH AND THUS EASILY DETECTIBLE BY A BLIND TRANSCRIPTIONIST BY TOUCH.

5. CORRECTION FEATURES: ALL THREE MAKES OF INDIVIDUAL DICTATING UNITS OFFER "ERROR-FREE" DICTATION. WITH RESPECT TO CENTRALIZED DICTATING SYSTEMS, BOTH STENOCORD AND IBM EMPLOY TELEPHONE DIALING CONTROL OVER INDEXING FOR SECRETARIAL INSTRUCTIONS AND CORRECTIONS. GRAY, HOWEVER, HAS A CORRECTION FEATURE WHICH IS NOT DESIRABLE BECAUSE OF DIFFICULTY OF OPERATION AND OTHER REASONS NOT PERTINENT TO YOUR PROTEST.

6. VOICE ACTUATED DICTATION: THE STENOCORD AND GRAY MACHINES STOP AFTER A SHORT INTERVAL WHEN THERE IS A PAUSE IN DICTATION, AND THE RECORDER STARTS AGAIN AFTER THE RETURN OF THE "READY TONE" WHEN DICTATION IS RESUMED, THUS LEAVING GAPS IN THE DICTATION AND CAUSING A CERTAIN AMOUNT OF CLIPPING. ON THE IBM MACHINE, THE RECORDER REMAINS STATIONARY WHEN IT IS IN USE BUT NO VOICE ACTUATES THE SOUND HEAD; THE SOUND HEAD, IN TURN,"KICKS BACK" FOR EVERY COMPLETE REVOLUTION OF THE BELT (6 SECONDS) FOR A TOTAL OF 10 REVOLUTIONS UNLESS THE VOICE OPERATED RELAY IS ACTUATED; AND AT THE END OF 60 SECONDS (10 REVOLUTIONS) THE BELT STOPS TURNING UNTIL THE SOUND HEAD IS ACTUATED BY SPEAKING INTO THE RECEIVER, A FEATURE WHICH ASSURES UNINTERRUPTED DICTATION THROUGHOUT THE RECORDING WITH NO CLIPPING AND THUS SAVES TIME FOR THE TRANSCRIBER.

IN ADDITION TO THE FOREGOING, THE USING ACTIVITY'S REPRESENTATIVE TOOK NOTE OF THE FEATURES FOR CONFERENCE RECORDING ON EACH MAKE OF EQUIPMENT AND VARIOUS OTHER FEATURES AND HAS MADE THE FOLLOWING PERTINENT COMMENTS CONCERNING THE SUPERIORITY OF THE IBM EQUIPMENT:

"1. THE IBM UNIT HAS A POSITIVE INTERLOCK ON THE MICROPHONE OF THE INDIVIDUAL DICTATING UNITS WHICH PREVENTS DICTATING IN THE LISTENING POSITION. THE DICTATE AND REVIEW ARE CONTROLLED BY SEPARATE BUTTONS. THE GRAY AND STENOCORD EQUIPMENT THEY ARE CONTROLLED BY A SINGLE BUTTON AND THERE IS NO LOCK. THIS MAKES IT QUITE EASY TO DICTATE WHILE IN THE LISTENING POSITION, THUS DICTATING OVER PREVIOUS DICTATION. 2. DUAL ACTION FOOT OR HAND CONTROL FOR TRANSCRIBING UNITS. 3. THE MOST OUTSTANDING FEATURE OFFERED BY ANY OF THE TRANSCRIBING MACHINES IS THE AUTOMATIC WORD RECALL OFFERED EXCLUSIVELY BY THE IBM UNIT. THE FOOT PEDAL OFFERS THE ADVANTAGE OF PERMITTING THE TRANSCRIPTIONIST TO AUTOMATICALLY HEAR THE LAST FEW WORDS WHICH HAVE BEEN TYPED BY SIMPLY LIFTING HER FOOT OFF THE PEDAL. THE TRANSCRIPTIONIST HAS THE OPTION OF SELECTING FOR REVIEW, THE LAST 2-4 WORDS, OR 4-6 WORDS, WHICHEVER IS MOST APPLICABLE TO HIS TYPING SPEED AND EXPERIENCE. THIS FEATURE FREQUENTLY ELIMINATES HAVING TO USE THE BACKSPACE WHERE YOU GET 10-12 WORDS YOU MUST LISTEN TO. IT IS A MEASURED SEQUENCE REVIEW WHICH HELPS THE TRANSCRIPTIONIST MAINTAIN THE CONTINUITY OF THOUGHT AND DOES NOT INTERRUPT THE CONTINUITY OF TYPING AND TRANSCRIBING SPEED FOR INEXPERIENCED TRANSCRIPTIONISTS. THIS FEATURE ALONE HAS BEEN FOUND TO INCREASE EFFICIENCY BY 15-20 PERCENT. AT AN INCREASE IN EFFICIENCY OF 10 PERCENT FOR FOUR TRANSCRIPTIONISTS AT AN AVERAGE SALARY OF $5,000 PER YR., THIS WOULD BE A SAVINGS OF $2,000 PER YR OR $20,000 FOR 10 YRS. EVEN AT 5 PERCENT IT WOULD BE AN ANNUAL SAVINGS OF $1,000 AND $10,000 FOR 10 YRS.'

BECAUSE OF THE EXTENSIVE USE OF THE EQUIPMENT, THE FACTOR OF MAINTENANCE AND REPAIR SERVICE WAS GIVEN PARTICULAR ATTENTION. GRAY WAS FOUND TO HAVE ONLY ONE EMPLOYEE WHO COULD PROPERLY REPAIR AND SERVICE ITS EQUIPMENT, THEREBY REQUIRING RESERVICING AFTER REPAIRS BY OTHER EMPLOYEES AND RESULTING IN AN AVERAGE OF 4 TO 5 SERVICE CALLS A MONTH AND LOSS OF TIME DUE TO NONUSE OF THE EQUIPMENT, INCLUDING NEW EQUIPMENT, INSTALLED AS RECENTLY AS AUGUST 1966. STENOCORD'S EQUIPMENT, WHICH HAS BEEN IN USE FOR ONE YEAR, WAS FOUND TO REQUIRE AN AVERAGE OF 1 OR 2 SERVICE CALLS A MONTH, AND THE SERVICE WAS PROMPT AND SATISFACTORY. IBM'S SERVICE RECORD WAS FOUND TO BE EXCELLENT; HOWEVER, THE NEED FOR SERVICE HAS BEEN VERY INFREQUENT, AND NO TIME HAS BEEN LOST THROUGH FAILURE OF EQUIPMENT, WHICH HAS BEEN IN USE FOR MORE THAN THREE YEARS ALREADY AND IS PRESENTLY OPERATED 24 HOURS DAILY.

WITH RESPECT TO TRADE-IN ALLOWANCES, IBM EQUIPMENT WAS SHOWN TO HAVE THE HIGHEST TRADE-IN VALUE ON THE MARKET, THE ALLOWANCE FOR MACHINES PURCHASED SEVEN YEARS AGO FOR $375 AND $395 BEING $200 TODAY.

BASED ON SUCH CONSIDERATIONS AND FOR THE ADDITIONAL REASON THAT ANY NEW ADVANCES IN IBM EQUIPMENT ARE INCORPORATED IN PREVIOUSLY PURCHASED EQUIPMENT WITHOUT EXTRA CHARGE, IT WAS DETERMINED THAT THE NEEDS OF THE USING ACTIVITY COULD BEST BE MET BY THE IBM EQUIPMENT, AND THEREFORE THE PURCHASE ORDER WAS ISSUED TO IBM.

FPMR 101-26.408-3 RELATING TO MULTIPLE-AWARD FEDERAL SUPPLY SCHEDULE CONTRACTS, READS AS FOLLOWS:

"SEC. 101-26.408-3 JUSTIFICATIONS.

"/A) JUSTIFICATIONS OF PURCHASES MADE AT PRICES OTHER THAN THE LOWEST DELIVERED PRICE AVAILABLE SHOULD BE BASED ON SPECIFIC OR DEFINITE NEEDS WHICH ARE CLEARLY ASSOCIATED WITH THE ACHIEVEMENT OF PROGRAM OBJECTIVES. MERE PERSONAL PREFERENCE CANNOT BE REGARDED AS AN APPROPRIATE BASIS FOR A JUSTIFICATION. JUSTIFICATIONS SHOULD BE CLEAR AND FULLY EXPRESSED. RECITAL OF OR REFERENCE TO ONE OF THE FACTORS SET FORTH IN PARAGRAPH (B) OF THIS SEC. 101-26.408-3 IS NOT SUFFICIENT. "/B) THE FOLLOWING EXAMPLES ILLUSTRATE FACTORS THAT MAY BE USED IN SUPPORT OF JUSTIFICATIONS, WHEN USED WITH ASSERTIONS THAT ARE FULLY SET FORTH AND DOCUMENTED.

"/1) SPECIAL FEATURES OF ONE ITEM, NOT PROVIDED BY COMPARABLE ITEMS, ARE REQUIRED IN EFFECTIVE PROGRAM PERFORMANCE.

"/2) AN ACTUAL NEED EXISTS FOR SPECIAL CHARACTERISTICS TO ACCOMPLISH IDENTIFIED TASKS.

"/3) IT IS ESSENTIAL THAT THE ITEM SELECTED BE COMPATIBLE WITH ITEMS OR SYSTEMS ALREADY EXISTING WITHIN USING OFFICES.

"/4) TRADE-IN CONSIDERATIONS FAVOR A HIGHER PRICED ITEM AND PRODUCE THE LOWEST NET COST. "/5) TIME OF DELIVERY IN TERMS OF ACTUAL NEED CANNOT BE MET BY A LOWER PRICED CONTRACTOR.

"/6) JUSTIFICATIONS WHICH INCORPORATE FEATURES OF THE FOLLOWING EXAMPLES MUST BE BASED ON OBJECTIVE FACTORS WHICH ADEQUATELY ESTABLISH THE ADVANTAGES INHERENT IN PURCHASE OF THE HIGHER PRICED ITEM WHEN:

"/I) PROBABLE LIFE OF THE ITEM SELECTED, AS COMPARED TO THAT OF A COMPARABLE ITEM AT A LOWER COST, IS SUFFICIENTLY GREATER SO THAT THE ADDITIONAL PURCHASE PRICE IS ECONOMICALLY WARRANTED.

"/II) WARRANTY CONDITIONS OF A HIGHER PRICED ITEM ARE SUFFICIENTLY ADVANTAGEOUS TO JUSTIFY THE ADDED COST.

"/III) GREATER MAINTENANCE AVAILABILITY, LOWER OVERALL MAINTENANCE COSTS, OR THE ELIMINATION OF PROBLEMS ANTICIPATED WITH RESPECT TO MACHINES OR SYSTEMS, ESPECIALLY AT ISOLATED USE POINTS, WILL PRODUCE LONGRUN SAVINGS GREATER THAN THE DIFFERENCE IN PURCHASE PRICES.'

FROM THE FOREGOING, IT IS EVIDENT THAT THE PROCURING ACTIVITY GAVE CONSIDERATION TO NUMEROUS FACTORS IN REACHING ITS DECISION AS TO WHICH MAKE OF DICTATING EQUIPMENT TO PURCHASE; THAT THERE WAS OBSERVATION OF EACH MAKE OF EQUIPMENT IN ACTUAL USE; AND THAT USERS OF THE EQUIPMENT WERE CONSULTED CONCERNING PERFORMANCE AND FEATURES. FURTHER, WHILE THE STENOCORD EQUIPMENT WAS FOUND TO BE GENERALLY ACCEPTABLE AND THE REPORT ON ITS SERVICE WAS FAVORABLE, THERE WERE SEVERAL AREAS IN WHICH THE STENOCORD EQUIPMENT WOULD NOT MEET THE NEEDS OF THE USING ACTIVITY, SUCH AS THE ABSENCE OF A "LOCKOUT" FEATURE TO PRECLUDE THE USE OF THE BELT FOR NEW DICTATION WHEN LESS THAN 4 MINUTES RECORDING TIME IS LEFT ON THE BELT; A MAGNETIC BAR FOR MANUAL ERASE RATHER THAN A BUILT-IN ERASE MAGNET WITH A SHIELD TO PREVENT UNINTENTIONAL ERASING; SENSITIZED INDEX SLIPS WHICH ARE DIFFICULT TO WRITE ON AND SUBJECT TO MARKING BY A FINGERNAIL OR PAPER CLIP, WHICH MARKING MAY BE CONFUSED WITH CORRECTIONS AND END OF DICTATION MARKS MADE BY THE RECORDER; AND THE CLIPPING WHICH ACCOMPANIES PAUSES BETWEEN DICTATION. IN ADDITION, ALTHOUGH THERE IS NO INDICATION IN THE RECORD AS TO THE EXPECTED LIFE OF EITHER THE STENOCORD OR THE IBM EQUIPMENT, IT IS REPORTED THAT THE USE OF THE AUTOMATIC WORD RECALL ON THE IBM EQUIPMENT WILL RESULT IN A SAVING, WHICH AT $2,000 ANNUALLY WILL ABSORB THE $4,000 DIFFERENCE BETWEEN THE PRICE OF THE IBM EQUIPMENT AND THE LOWER PRICE OF THE STENOCORD EQUIPMENT WITHIN TWO YEARS OR AT $1,000 ANNUALLY WILL ABSORB SUCH DIFFERENCE WITHIN FOUR YEARS, AND SUCH SAVING WOULD CONTINUE IN SUBSEQUENT YEARS. THERE IS NO INDICATION THAT IBM WAS ACCORDED PREFERENCE BECAUSE OF ITS STATUS AS A LARGE BUSINESS CONCERN.

IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THE JUSTIFICATION SATISFIES THE REQUIREMENTS OF FPMR 101-26.408-3 AND THAT THE PURCHASE AS MADE WAS THE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, AS CONTEMPLATED BY 41 U.S.C. 253 (B). ACCORDINGLY, WE SEE NO LEGAL BASIS FOR OBJECTION TO THE AWARD TO IBM, AND, THEREFORE, YOUR PROTEST IS DENIED.