B-167405, OCT. 3, 1969

B-167405: Oct 3, 1969

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WHICH WAS SOLICITED TO TAKE 3.25-INCH BUT ALSO ACCOMMODATED 5-INCH REEL. AFTER ADJUTANT GENERAL'S OFFICE (AGO) HAD REQUESTED AND WAS REFUSED WAIVER OF MANDATORY FSS REQUIREMENT. IS DENIED RELIEF SINCE QUESTION IS NOT MANDATORY FSS REQUIREMENT. IS DENIED RELIEF SINCE QUESTION IS NOT WHETHER RECORDER REQUESTED WAS ON FSS. BIDDER UNDER FSS IS NOT PRECLUDED FROM OFFERING ITEM THAT EXCEEDS AS WELL AS SATISFIES GOVT.'S REQUIREMENTS. PROCUREMENT UNDER FSS WAS MANDATORY REGARDLESS OF MERITS OF ANY OFF-SCHEDULE ITEM. TO GOVERNMENT MARKETING SERVICES: REFERENCE IS MADE TO YOUR LETTER OF JUNE 30. REQUESTED A WAIVER FROM THE FEDERAL SUPPLY SERVICE IN ORDER TO PROCURE YOUR CRAIG MODEL 2106 TAPE RECORDER AS IT WAS NOT AMONG THOSE LISTED ON THE FEDERAL SUPPLY SCHEDULE (FSS).

B-167405, OCT. 3, 1969

FEDERAL SUPPLY SCHEDULE--MANDATORY USE REQUIREMENT PROTESTANT OBJECTING TO PROCUREMENT OF TAPE RECORDER FROM FEDERAL SUPPLY SCHEDULE (FSS), WHICH WAS SOLICITED TO TAKE 3.25-INCH BUT ALSO ACCOMMODATED 5-INCH REEL, AS OFFERED BY PROTESTANT, AFTER ADJUTANT GENERAL'S OFFICE (AGO) HAD REQUESTED AND WAS REFUSED WAIVER OF MANDATORY FSS REQUIREMENT, IS DENIED RELIEF SINCE QUESTION IS NOT MANDATORY FSS REQUIREMENT, IS DENIED RELIEF SINCE QUESTION IS NOT WHETHER RECORDER REQUESTED WAS ON FSS, BUT WHETHER ANY RECORDER ON FSS MET AGO REQUIREMENTS. SINCE SCHEDULE ITEM MET AGO NEEDS, AND BIDDER UNDER FSS IS NOT PRECLUDED FROM OFFERING ITEM THAT EXCEEDS AS WELL AS SATISFIES GOVT.'S REQUIREMENTS, PROCUREMENT UNDER FSS WAS MANDATORY REGARDLESS OF MERITS OF ANY OFF-SCHEDULE ITEM, AND PROTESTANT'S LOWER PRICE WOULD NOT JUSTIFY WAIVER EXCEPT UNDER SPECIAL CIRCUMSTANCES, NOT HERE PRESENT.

TO GOVERNMENT MARKETING SERVICES:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 30, 1969, PROTESTING A PROCUREMENT MADE FOR THE ADJUTANT GENERAL'S OFFICE (AGO) OF 288 PORTABLE TAPE RECORDERS FROM THE 3M COMPANY RATHER THAN FROM THE FIRM YOU REPRESENT, CRAIG CORPORATION.

THE AGO, BY LETTER DATED MAY 22, 1969, REQUESTED A WAIVER FROM THE FEDERAL SUPPLY SERVICE IN ORDER TO PROCURE YOUR CRAIG MODEL 2106 TAPE RECORDER AS IT WAS NOT AMONG THOSE LISTED ON THE FEDERAL SUPPLY SCHEDULE (FSS), FSC GROUP 58, PART III, SECTION A. THE AGO SELECTED THIS MODEL PRIMARILY BECAUSE IT COULD ACCOMMODATE A 5-INCH REEL WHILE THE CRAIG TAPE RECORDER LISTED ON THE FSS COULD ONLY ACCOMMODATE A 3.25 INCH REEL.

THE FEDERAL SUPPLY SERVICE DETERMINED THAT THE 3M COMPANY EQUIPMENT LISTED ON THE SCHEDULE AS CLASS 1 MET THE REQUIREMENTS OF THE AGO SINCE IT ACCOMMODATED A 5-INCH REEL AS WELL AS THE 3.25-INCH REEL. THEIR DECISION WAS BASED ON THE SPECIAL PROVISIONS GOVERNING PROCUREMENT UNDER THIS SCHEDULE.

PARAGRAPH 1 OF THE SPECIAL PROVISIONS OF THE SCHEDULE INVOLVED, FSC GROUP 58, PART III, SECTION A, MAKES IT MANDATORY THAT ALL GOVERNMENT DEPARTMENTS, WHICH INCLUDES THE AGO, USE THIS SCHEDULE WHEN PROCURING THE ITEMS IT COVERS.

PARAGRAPH 2, FSC GROUP 58, PART III, SECTION A, ALLOWS AN INCLUDED DEPARTMENT TO OBTAIN A WAIVER WHEN THERE ARE SPECIAL NEEDS WHICH CANNOT BE FILLED BY FSS LISTED ITEMS. THE FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR) SEC. 101-26.401-3 SETS OUT THE CRITERIA TO BE USED IN JUDGING WHETHER THERE ARE SPECIAL NEEDS OR NOT. IT PROVIDES:

"AGENCIES REQUIRED TO USE FSS CONTRACTS SHALL OBTAIN NEEDED ITEMS FROM THIS SOURCE IN LIEU OF PROCURING SIMILAR ITEMS FROM OTHER SOURCES WHEN THE FSS ITEM WILL ADEQUATELY SERVE THE REQUIRED FUNCTIONAL PURPOSE;,

THE QUESTION HERE IS NOT WHETHER THE TAPE RECORDER REQUESTED BY AGO WAS ON THE SCHEDULE, BUT WHETHER ANY RECORDER ON THE FSS MET AGO REQUIREMENTS. IF ONE DID THEN PROCUREMENT UNDER THE FSS IS MANDATORY, REGARDLESS OF THE MERITS OF ANY OFF-SCHEDULE TAPE RECORDER.

THE ESTABLISHMENT OF A FSS AS MANDATORY UPON THE DEPARTMENT OF DEFENSE IS A DELIVERATE AND CONSIDERED DETERMINATION BY THE DEPARTMENTS CONCERNED THAT THE ARTICLES LISTED THEREIN WILL ADEQUATELY SERVE THEIR NEEDS. THE GRANTING OF WAIVERS, EXCEPT WHERE THE ITEMS ON THE SCHEDULE CAN CLEARLY BE SHOWN NOT TO MEET THE NEEDS OF THE USING ACTIVITY, IS NOT ONLY CONTRARY TO THE CITED REGULATION AND SCHEDULE PROVISION, BUT MAY GIVE RISE TO THE APPEARANCE OF FAVORITISM, STRIKING AT THE VERY FOUNDATION OF THE COMPETITIVE BIDDING SYSTEM.

YOU CONTEND THAT AGO COULD MAKE NO PROCUREMENT FROM THE FSS AS NONE OF THE LISTED ITEMS MET THEIR SPECIFICATIONS. THIS WOULD MEAN THAT AGO REQUIRED NEW OR ADDITIONAL FEATURES NOT CURRENTLY AVAILABLE ON THOSE ITEMS LISTED IN THE SCHEDULE. THIS WAS NOT THE CASE, HOWEVER, AS THE ADDITIONAL FEATURE DESIRED BY AGO WAS THE ABILITY TO ACCOMMODATE A 5 INCH REEL AND THERE WERE TWO TAPE RECORDERS LISTED WHICH HAD THIS FEATURE. THUS AGO WAS REQUIRED TO PROCURE THE LISTED ITEM RATHER THAN THE OFF-SCHEDULE TAPE RECORDER THAT YOU OFFERED.

ALTHOUGH THE 3M COMPANY EQUIPMENT WAS SOLICITED TO ACCOMMODATE A 3.25- INCH REEL IT EXCEEDED THE REQUIRED SPECIFICATIONS BY ALSO BEING ABLE TO HANDLE A 5-INCH REEL. SPECIFICATIONS SUCH AS THOSE INVOLVING THE ABILITY TO HANDLE REELS OF A PARTICULAR SIZE, LIKE THOSE INVOLVING TAPE RECORDER OPERATING SPEEDS, ARE MINIMUM REQUIREMENTS. THESE SPECIFICATIONS IN NO WAY PRECLUDE A BIDDER FROM OFFERING A PRODUCT THAT EXCEEDS AS WELL AS SATISFIES THE GOVERNMENT'S REQUIREMENTS.

IT APPEARS FROM THE COPY OF THE OFFER THAT YOU SUBMITTED TO OUR OFFICE, WHICH IS IDENTICAL TO THE ONE MENTIONED BY THE GSA, THAT YOUR TOTAL PRICE TO THE AGO WAS $44.95. HOWEVER, A LOWER PRICE WOULD NOT JUSTIFY THE FAILURE TO USE THE SCHEDULE WHEN OTHERWISE PROPER. THE USE OF THE FSS IS CALCULATED TO LOWER THE COSTS OF PROCUREMENT TO THE GOVERNMENT BY INCREASING THE VOLUME PER INVITATION WHILE DECREASING THE NUMBER OF PROCUREMENTS NECESSARY. THE SCHEDULE METHOD OF CONTRACTING IS USED, IN THE BEST INTEREST OF THE GOVERNMENT, TO SIMPLIFY THE PURCHASE PROCESSES FOR COMMONLY USED ITEMS WHICH ARE READILY AVAILABLE THROUGH THE DISTRIBUTION SYSTEMS OF THE RESPECTIVE INDUSTRIES WITHOUT THE NECESSITY OF DEFINITE QUANTITY CONSOLIDATED BUYING OR HANDLING THROUGH A GOVERNMENT WAREHOUSE SYSTEM.

WHILE INDIVIDUAL OFF-SCHEDULE PURCHASES MAY IN SOME INSTANCES APPEAR TO OFFER ADVANTAGES, THEY DO NOT JUSTIFY DEPARTURE FROM A SYSTEM WHICH HAS BEEN DETERMINED TO BE THE MOST EFFECTIVE OVERALL. NOWHERE IN THE FPMR IS THERE ANY PROVISION FOR WAIVER OF THE MANDATORY FSS SOLELY ON THE BASIS THAT THE ITEM CAN BE SECURED AT A LESSER PRICE ELSEWHERE EXCEPT WHEN THERE ARE SPECIAL CIRCUMSTANCES, NOT PRESENT IN THIS CASE.