B-161807, SEP. 7, 1967

B-161807: Sep 7, 1967

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THE RESTRICTION IN REQUIREMENTS TYPE CONTRACTS FOR PROCESSING MOTION PICTURE FILM THAT THE CONTRACTOR HAVE PROCESSING FACILITIES IN THREE OR MORE AREAS HAS BEEN JUSTIFIED ON THE BASIS OF THE NECESSITY FOR PROMPT DEVELOPMENT TO AVOID ADDITIONAL STANDBY COSTS AND FOR UNIFORMITY. STEPS ARE BEING TAKEN BY BOTH AGENCIES TO SATISFY THE NEEDS WITH LESS RESTRICTIVE SPECIFICATIONS SO AS TO BROADEN COMPETITION IN THE FUTURE. INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 12 AND 16. IT IS YOUR COMPLAINT THAT SUCH A REQUIREMENT HAS THE EFFECT OF RESTRICTING COMPETITION TO EASTMAN KODAK COMPANY SINCE IT IS THE ONLY FIRM HAVING PROCESSING FACILITIES IN ALL OF THE DESIGNATED AREAS. THE PUBLIC HEALTH SERVICE REPORTS THAT THE FILMS TO BE PROCESSED UNDER IFB NO. 193-67 ARE PRODUCED BY THE NATIONAL MEDICAL AUDIOVISUAL CENTER (NMAC) OF THE PHS AND ARE TO BE USED BY THE NATIONAL COMMUNICABLE DISEASE CENTER (NCDC) OF THE PHS.

B-161807, SEP. 7, 1967

BIDS - SPECIFICATIONS - RESTRICTIVE DECISION TO BYRON MOTION PICTURES, INC., RE RESTRICTIVE SPECIFICATIONS BY CERTAIN AGENCIES (PUBLIC HEALTH SERVICE AND DEPT. OF AGRICULTURE) IN REQUIREMENTS-TYPE CONTRACTS FOR PROCESSING FILM. THE RESTRICTION IN REQUIREMENTS TYPE CONTRACTS FOR PROCESSING MOTION PICTURE FILM THAT THE CONTRACTOR HAVE PROCESSING FACILITIES IN THREE OR MORE AREAS HAS BEEN JUSTIFIED ON THE BASIS OF THE NECESSITY FOR PROMPT DEVELOPMENT TO AVOID ADDITIONAL STANDBY COSTS AND FOR UNIFORMITY. HOWEVER, STEPS ARE BEING TAKEN BY BOTH AGENCIES TO SATISFY THE NEEDS WITH LESS RESTRICTIVE SPECIFICATIONS SO AS TO BROADEN COMPETITION IN THE FUTURE.

TO BYRON MOTION PICTURES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 12 AND 16, 1967, WITH ENCLOSURES, QUESTIONING THE PROPRIETY OF A REQUIREMENT IN GOVERNMENT INVITATIONS FOR BIDS (FOR PROCESSING EASTMAN MOTION PICTURE FILM) THAT THE CONTRACTOR PROVIDE FACILITIES FOR PROCESSING FILM IN THREE OR MORE SPECIFIED AREAS. AS EXAMPLES OF THE PRACTICE WHICH YOU QUESTION, YOU CITE PUBLIC HEALTH SERVICE (PHS) IFB NO. 193-67, AND DEPARTMENT OF AGRICULTURE IFB NO. INF-1-B-68. IT IS YOUR COMPLAINT THAT SUCH A REQUIREMENT HAS THE EFFECT OF RESTRICTING COMPETITION TO EASTMAN KODAK COMPANY SINCE IT IS THE ONLY FIRM HAVING PROCESSING FACILITIES IN ALL OF THE DESIGNATED AREAS.

THE PUBLIC HEALTH SERVICE REPORTS THAT THE FILMS TO BE PROCESSED UNDER IFB NO. 193-67 ARE PRODUCED BY THE NATIONAL MEDICAL AUDIOVISUAL CENTER (NMAC) OF THE PHS AND ARE TO BE USED BY THE NATIONAL COMMUNICABLE DISEASE CENTER (NCDC) OF THE PHS. THE NMAC REPORTS THAT THE REQUIREMENT FOR LOCATION OF THE PROCESSING FACILITIES NEAR THE SCENE OF FILMING IS TO EXPEDITE DEVELOPING IN ORDER TO MINIMIZE PRODUCTION COSTS BY IMMEDIATELY LEARNING THE RESULTS OF A FILMING SESSION AND DETERMINING WHETHER REFILMING IS NECESSARY. UNTIL THE RESULTS ARE LEARNED, OPERATING PERSONNEL, EQUIPMENT, STAGE SETTINGS, AND ACTORS MUST REMAIN ON LOCATION FOR A POSSIBLE REFILMING. EXPEDITIOUS FILM PROCESSING IS ALSO IMPORTANT IN FILMING LABORATORY METHODS AND TECHNIQUES AS CULTURES ARE FREQUENTLY USED WHICH TAKE A NUMBER OF DAYS TO PREPARE AND ARE RIGHT FOR PHOTOGRAPHING FOR ONLY A FEW HOURS. IT IS REPORTED THAT IN NUMEROUS INSTANCES FILM IS HAND CARRIED TO AND FROM THE FILM PROCESSING PLANT. THE NMAC ALSO REPORTS THAT ALL FOOTAGE IN EACH MOTION PICTURE MUST BE PROCESSED BY THE SAME PLANT FOR UNIFORMITY OF METHODS, TECHNIQUE, AND PRACTICES TO INSURE AN ACCEPTABLE QUALITY IN THE FINAL PRODUCTION.

HOWEVER, THE PHS DOES CONCEDE THAT NOT EVERY EFFORT HAS BEEN MADE TO GET UNIFORMITY OF FILM PROCESSING WHILE STILL OBTAINING MAXIMUM COMPETITION. THEREFORE, WE ARE ADVISED THAT EFFORTS ARE NOW BEING MADE TO DEVELOP DETAILED SPECIFICATIONS AND QUALITY CONTROL PROVISIONS FOR FUTURE PROCUREMENTS TO INSURE COMPARABILITY OF QUALITY OF FILMS DEVELOPED BY DIFFERENT CONTRACTORS AND TO ELIMINATE THE REQUIREMENT THAT THE CONTRACTOR HAVE PROCESSING FACILITIES IN THE VARIOUS AREAS.

THE DEPARTMENT OF AGRICULTURE REPORTS THAT IT HAS INCLUDED THE REQUIREMENT FOR LOCATION OF PROCESSING FACILITIES IN FOUR DIFFERENT GEOGRAPHIC AREAS IN INVITATIONS ISSUED BY IT BECAUSE THE PROCESSING MUST BE DONE WITH A MINIMUM LAPSE OF TIME BETWEEN PHOTOGRAPHING AND VIEWING AND APPROVING THE PROCESSED FILM BY THE DIRECTOR OF TECHNICAL ADVISOR. OTHERWISE, THE STAND-BY COSTS OF OPERATING PERSONNEL, ACTORS, SETS, AND RENTED EQUIPMENT WILL BE GREATLY INCREASED. IN ADDITION, THE DEPARTMENT REPORTS THAT THEY DID NOT BELIEVE BIDDERS WOULD BE INTERESTED IN BIDDING SEPARATELY ON THREE OF THE FOUR AREAS WHERE THEIR REQUIREMENTS ARE SMALL. THEY ALSO SUGGEST THAT SINCE THE INVITATION DOES NOT PRECLUDE SUBCONTRACTING, BIDDERS WITHOUT FACILITIES IN ALL THE REQUIRED AREAS COULD MEET THE REQUIREMENT BY SUBCONTRACTING WITH FIRMS IN THE NECESSARY LOCATIONS. THEY POINT OUT THAT THIS HAS BEEN DONE BY SOME FIRMS IN THE PAST.

AT ANY RATE, THE DEPARTMENT OF AGRICULTURE ADVISES THAT IN FUTURE PROCUREMENTS THEY WILL CONSIDER SEPARATE AWARDS FOR THE FOUR AREAS SO LONG AS THEIR TOTAL REQUIREMENTS CAN BE MET AT A REASONABLE PRICE.

THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT AND THE DETERMINATION WHETHER THE SUPPLIES OR SERVICES OFFERED MEET THE SPECIFICATIONS ARE MATTERS PRIMARILY FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY CONCERNED. 36 COMP. GEN. 51; 17 ID. 554. WHILE IT IS THE DUTY OF THIS OFFICE TO DETERMINE WHETHER SPECIFICATIONS AS WRITTEN ARE UNDULY RESTRICTIVE OF COMPETITION, IT APPEARS THAT THERE WAS SOME JUSTIFICATION FOR THE RESTRICTION IMPOSED BY THE AGENCIES IN THE INVITATIONS CITED BY YOU. NEVERTHELESS, BOTH AGENCIES RECOGNIZE THE FACT THAT IT MAY BE POSSIBLE TO SATISFY THEIR NEEDS WITH LESS RESTRICTIVE SPECIFICATIONS AND HAVE STATED THEIR INTENTION TO BROADEN COMPETITION IN FUTURE PROCUREMENTS BY REVISING THE SPECIFICATIONS. THESE CIRCUMSTANCES, FURTHER ACTION BY OUR OFFICE DOES NOT APPEAR NECESSARY.