B-164798, AUG. 27, 1968

B-164798: Aug 27, 1968

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 2. THE PROCUREMENT WAS FOR GRAPHIC ART SERVICES AND THE CONTRACT WAS AWARDED ON JUNE 28. THE CONTRACT IS FOR THE PERIOD JULY 1. IT IS REPORTED THAT THIS FIXED-PRICE. JOB-ORDER-TYPE CONTRACT IS AWARDED EACH YEAR BY THE NAVY ON A COMPETITIVE BASIS TO THE FIRM OFFERING THE LOWEST OVERALL PRICE SINCE IT PROVIDES THE NAVY WITH A READY SOURCE FOR GRAPHIC ARTS SERVICES ON AN INDIVIDUAL JOB-ORDER BASIS FOR THE FISCAL YEAR. IN RESPONSE TO THE INVITATION THE FOLLOWING SIX BIDS WERE RECEIVED: BIDDER PRICE WITH DISCOUNT 1. 263.50 YOU INDICATE THAT THERE WAS A DISPARITY BETWEEN THE PRICES BID BY THE THREE LOW BIDDERS IN RESPONSE TO THE IFB AND THE PRICES THESE BIDDERS LISTED ON THE GSA SCHEDULE FOR REGION 3.

B-164798, AUG. 27, 1968

TO STILL PHOTO PRODUCTIONS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 2, 1968, ALLEGING THAT IN RESPONSE TO INVITATION FOR BIDS (IFB) NO. N00024-68-B-7688, ISSUED MAY 29, 1968, BY THE NAVAL SHIP SYSTEMS COMMAND, CERTAIN COMPANIES SUBMITTED BIDS AT PRICES APPROXIMATELY 40 PERCENT LESS THAN THEIR HOURLY RATES ESTABLISHED ON THE GENERAL SERVICES ADMINISTRATION (GSA) SCHEDULE FOR REGION 3. YOU REQUEST THAT WE INVESTIGATE THE MATTER BECAUSE YOU BELIEVE THAT AN INEQUITY EXISTS BETWEEN THE PRICES FOR THE SAME SERVICES BID IN RESPONSE TO THE IFB AND THE PRICES LISTED BY THE BIDDERS ON GSA SCHEDULE FOR REGION 3.

THE PROCUREMENT WAS FOR GRAPHIC ART SERVICES AND THE CONTRACT WAS AWARDED ON JUNE 28, 1968, TO INDUSTRIAL TECHNOLOGICAL ASSOCIATES, INC. (ITA), AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER. THE CONTRACT IS FOR THE PERIOD JULY 1, 1968, THROUGH JUNE 30, 1969, AND PROVIDES FOR THE FURNISHING OF GRAPHIC ARTS SERVICES COVERING DESIGN ART, FINISHED ILLUSTRATIONS, PRODUCTION ART AND PREPARATION OF SLIDES FOR PROJECTION, WITH ASSOCIATED SERVICES, NOT TO EXCEED A TOTAL AMOUNT OF $175,000. IT IS REPORTED THAT THIS FIXED-PRICE, JOB-ORDER-TYPE CONTRACT IS AWARDED EACH YEAR BY THE NAVY ON A COMPETITIVE BASIS TO THE FIRM OFFERING THE LOWEST OVERALL PRICE SINCE IT PROVIDES THE NAVY WITH A READY SOURCE FOR GRAPHIC ARTS SERVICES ON AN INDIVIDUAL JOB-ORDER BASIS FOR THE FISCAL YEAR.

IN RESPONSE TO THE INVITATION THE FOLLOWING SIX BIDS WERE RECEIVED:

BIDDER PRICE WITH DISCOUNT

1. ITA $1,256.20

2. JANDS' INC. 1,295.61

3. MANLOADING AND MANAGEMENT ASSOCIATES, INC. 1,373.06

4. LEBMAN-SCAFFA ART AND PHOTOGRAPHY, INC. 2,205.17

5. COMMERCIAL ART STUDIOS 2,244.58

6. STILL PHOTO PRODUCTIONS, INCORPORATED 2,263.50 YOU INDICATE THAT THERE WAS A DISPARITY BETWEEN THE PRICES BID BY THE THREE LOW BIDDERS IN RESPONSE TO THE IFB AND THE PRICES THESE BIDDERS LISTED ON THE GSA SCHEDULE FOR REGION 3.

IT IS REPORTED THAT A REVIEW OF THE PROCUREMENT BY THE NAVY IN THE LIGHT OF YOUR ALLEGATION OF ,INEQUITY" ESTABLISHES THAT THE PRICES QUOTED IN THE GSA SCHEDULE HAVE NO APPLICATION TO PRICES SUBMITTED IN RESPONSE TO THE INSTANT INVITATION. FURTHER, THE GSA SCHEDULE SPECIFICALLY EXCLUDES THE DEPARTMENT OF DEFENSE FROM MANDATORY COVERAGE. IT IS FURTHER REPORTED THAT THE GSA SCHEDULE HAS NO RELEVANCE AS A GUIDE-LINE FOR PROCUREMENTS SUCH AS HERE INVOLVED.

THE IFB CALLS FOR A BASIC ORDERING AGREEMENT FOR THE RENDERING OF SERVICES BY THE CONTRACTOR DURING FISCAL YEAR 1969 NOT TO EXCEED IN TOTAL COST $175,000. ON THE EXPECTATION OF SECURING A LARGE NUMBER OF ORDERS FROM THE NAVY OVER THE YEAR A PROSPECTIVE CONTRACTOR MAY WELL OFFER PRICES LOWER THAN THOSE FOR A SINGLE JOB ORDER. IN CONTRAST, THE GSA SCHEDULE COVERS SEPARATE SMALL JOBS, OFTEN ONE OF A KIND. ORDERS IN EXCESS OF $10,000 ARE EXCLUDED FROM THE GSA SCHEDULE.

AGAIN, THE GSA SCHEDULE GIVES PRICES FOR BROAD CATEGORIES COVERING VARIOUS TYPES OF WORK THAT ARE REALLY QUITE DIFFERENT AND REQUIRE VARYING AMOUNTS OF SKILL AND EFFORT. FOR EXAMPLE, ITEM 3 OF THE GSA SCHEDULE COVERS SUCH WORK AS DESIGN, LAYOUTS, COMPREHENSIVES AND ILLUSTRATIONS FOR WHICH ITA SCHEDULE PRICE IS $6.05. IN CONTRAST, UNDER THE BASIC ORDERING AGREEMENT COVERED BY THE IFB EACH CATEGORY IS BROKEN DOWN INTO SPECIFIC WORK SEGMENTS, EACH SEPARATELY PRICED. FOR EXAMPLE, THE GSA SCHEDULE DEFINES COMPREHENSIVES VERY LOOSELY AS FOLLOWS:

"COMPREHENSIVES - COMPREHENSIVES INCLUDE FINAL PENCIL OR BRUSH PLANS TO FULL SIZE AND SHOULD BE IN SUCH DETAIL AS TO BEAR CLOSE RESEMBLANCE TO THE FINISHED PRODUCT.' WHEREAS, THE IFB BASIC ORDERING AGREEMENT DEFINES THEM PRECISELY AS FOLLOWS: "COMPREHENSIVES: ONE COLOR OR MULTI-COLOR, SINGLE- PAGE OR MULTI-PAGE FINISHED LAYOUTS SHOWING SIZE, SHAPE, TONAL DENSITY, COLOR, AND PLACEMENT OF ILLUSTRATIONS, COMPONENTS OF ILLUSTRATIONS, AND/OR COPY. THESE COMPREHENSIVES ARE TO BE A FACSIMILE OF THE END PRODUCT (A PRESENTATION OR EXHIBIT).' THUS THE PRICES OF THE THREE BIDDERS IN QUESTION UNDER THE IFB AND THE PRICES OF THESE BIDDERS UNDER THE GSA SCHEDULE DO NOT CONSTITUTE DIFFERENT PRICES FOR THE SAME SERVICES. RATHER, THE SERVICES ARE THEMSELVES DIFFERENT.

IN VIEW OF THE EXPLANATION FURNISHED BY THE ADMINISTRATIVE AGENCY, WE SEE NO LEGAL BASIS FOR QUESTIONING EITHER THE PRICES QUOTED OR THE CONTRACT AWARDED IN RESPONSE TO THE INVITATION.