B-166808, JUN. 16, 1969

B-166808: Jun 16, 1969

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PRESIDENT: REFERENCE IS MADE TO YOUR LETTER OF APRIL 23. YOU HAVE PROTESTED THE AWARD TO OUR OFFICE BECAUSE YOU UNDERSTAND FEDERAL FUNDS ARE INVOLVED AND YOUR COMPANY SUBMITTED THE LOWEST PROPOSAL FOR THE SERVICES. THE DEPARTMENT OF LABOR IS SATISFIED WITH THE SELECTION. THE DEPARTMENT HAS OBSERVED THAT IN ADDITION TO THE FOREGOING YOUR COMPANY HAS OFFERED FOR ITS USE OF CERTAIN MICROMATION EQUIPMENT WHERE IT IS NOT BEING USED FOR THE MISSOURI AGENCY A REIMBURSEMENT OF $20 PER HOUR FOR A MINIMUM OF 40 HOURS PER MONTH THROUGH JUNE 30. THE DEPARTMENT HAS INDICATED THAT THERE IS NOT SUFFICIENT INFORMATION AVAILABLE FROM WHICH IT COULD BE CONCLUDED WHAT THE POTENTIAL REBATE WOULD BE FROM EITHER COMPANY AND THAT THIS ITEM WAS THEREFORE OMITTED FROM THE COMPARISON.

B-166808, JUN. 16, 1969

TO MR. DONALD G. HOGAN, PRESIDENT:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 23, 1969, PROTESTING THE AWARD BY THE MISSOURI DIVISION OF EMPLOYMENT SECURITY TO MCDONNELL AUTOMATION COMPANY OF A CONTRACT FOR COMPUTER SERVICES FOR PROCESSING JOB BANK INFORMATION IN SAINT LOUIS.

YOU HAVE PROTESTED THE AWARD TO OUR OFFICE BECAUSE YOU UNDERSTAND FEDERAL FUNDS ARE INVOLVED AND YOUR COMPANY SUBMITTED THE LOWEST PROPOSAL FOR THE SERVICES.

OUR OFFICE HAS ASCERTAINED THAT THE UNITED STATES DEPARTMENT OF LABOR SELECTED THE CITY OF SAINT LOUIS FOR THE JOB BANK PROGRAM AND AUTHORIZED THE MISSOURI DIVISION OF EMPLOYMENT SECURITY TO IMPLEMENT THE SYSTEM. FOLLOWING THE AUTHORIZATION, THE MISSOURI DIVISION OF EMPLOYMENT SECURITY NEGOTIATED FOR DATA PROCESSING SERVICES WITH SEVERAL CONCERNS, INCLUDING YOUR COMPANY. THE STATE PURCHASING OFFICER APPROVED THE SELECTION OF MCDONNELL AUTOMATION ON APRIL 16, 1969.

THE DEPARTMENT OF LABOR IS SATISFIED WITH THE SELECTION. THE DEPARTMENT HAS PROVIDED THE FOLLOWING COMPARISON OF COSTS BASED ON 1 YEAR COVERAGE:

"COMPARISON OF COST (1 YEAR) (FN 1)

MCDONNELL AUTOMATION DATA CENTRAL

COMPANY INC.

--------------------- ------------- INITIAL CONVERSION

$2,660 $2,000 DAILY KEY PUNCHING (FN 2) 47,250 46,250 COMPUTER RENTAL (4 HRS. PER

DAY) (FN 3) 99,000 90,000 MICROMATION OPERATOR

(2 HRS. PER DAY) (FN 4) --- 5,000 DELIVERY SERVICES

(3 TRIPS PER DAY) --- 5,280 (FN 5)

$148,910 $148,530 FOOTNOTE 1. BASED ON AVERAGE OF 250 WORK DAYS PER YEAR. FOOTNOTE 2. QUOTED RATES PER DAY. FOOTNOTE 3. QUOTED RATES PER HOUR. FOOTNOTE 4. QUOTED RATES PER HOUR. FOOTNOTE 5. ESTIMATED COSTS OF DELIVERY SERVICE -$440 PER MONTH.'

THE DEPARTMENT HAS OBSERVED THAT IN ADDITION TO THE FOREGOING YOUR COMPANY HAS OFFERED FOR ITS USE OF CERTAIN MICROMATION EQUIPMENT WHERE IT IS NOT BEING USED FOR THE MISSOURI AGENCY A REIMBURSEMENT OF $20 PER HOUR FOR A MINIMUM OF 40 HOURS PER MONTH THROUGH JUNE 30, 1969, SUBJECT TO NEGOTIATION FOR THE BALANCE OF THE CONTRACT TERM, AND THAT MCDONNELL HAS ONLY PROVIDED FOR A $5 AN HOUR REBATE FOR EACH HOUR IT USES THE EQUIPMENT FOR OTHER THAN JOB BANK PURPOSES DURING THE 12 MONTH PERIOD OF THE CONTRACT. HOWEVER, THE DEPARTMENT HAS INDICATED THAT THERE IS NOT SUFFICIENT INFORMATION AVAILABLE FROM WHICH IT COULD BE CONCLUDED WHAT THE POTENTIAL REBATE WOULD BE FROM EITHER COMPANY AND THAT THIS ITEM WAS THEREFORE OMITTED FROM THE COMPARISON.

ALTHOUGH YOUR COMPANY'S PROPOSAL IS THE LOWEST BASED ON THE COMPARISON TABLE SET FORTH ABOVE, THE DEPARTMENT HAS STATED THAT MCDONNELL HAS SEVERAL ON PREMISE COMPUTER SYSTEMS AVAILABLE AS BACKUP EQUIPMENT IN THE EVENT OF ANY EQUIPMENT FAILURE AND THAT THE PROTECTION THE BACKUP EQUIPMENT PROVIDES FOR THE JOB BANK OPERATION JUSTIFIES THE AWARD TO MCDONNELL.

IT IS OUR UNDERSTANDING THAT GRANTS OF FEDERAL FUNDS FOR THE JOB BANK PROGRAM ARE PROVIDED TO THE STATE UNDER THE WAGNER-PEYSER ACT, 29 U.S.C. 49, ET SEQ. SECTION 49D (B) OF TITLE 29 OF THE UNITED STATES CODE IMPOSES UPON THE SECRETARY OF LABOR THE AUTHORITY TO CERTIFY THE AMOUNTS THAT EACH STATE SHALL RECEIVE FOR THE PROPER AND EFFICIENT ADMINISTRATION OF ITS PUBLIC EMPLOYMENT OFFICES. SECTION 601.5 OF TITLE 20 OF THE CODE OF FEDERAL REGULATIONS PROVIDES THE CONDITIONS AND CIRCUMSTANCES UNDER WHICH THE SECRETARY OF LABOR MAY WITHHOLD CERTIFICATION AND PAYMENTS OF GRANTS TO THE STATES. FURTHER, OUR OFFICE AND THE COURTS HAVE HELD THAT THE GRANTOR UNDER SOMEWHAT SIMILAR STATUTORY AUTHORITY HAS THE PRIMARY AUTHORITY TO DETERMINE WHETHER A GRANTEE HAS ACTED PROPERLY IN PARTICULAR CIRCUMSTANCES. SEE B-161570, JANUARY 29, 1968, AND DECISIONS CITED THEREIN. AS INDICATED ABOVE, THE GRANTOR, THE DEPARTMENT OF LABOR, HAS REVIEWED THE AWARD OF THE CONTRACT BY THE STATE AND IS SATISFIED THAT IT WAS PROPER. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.