B-175458(1), JUL 6, 1972

B-175458(1): Jul 6, 1972

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ALTHOUGH "IN-HOUSE" PROCUREMENTS ARE GENERALLY BASED ON A COMPARATIVE COST ANALYSIS. GAO HAS PREVIOUSLY HELD THAT SUCH DETERMINATIONS ARE NOT SUBJECT TO QUESTION IN TERMS OF LEGAL RIGHTS AND RESPONSIBILITIES. 42 COMP. TO DREDGING CONTRACTORS ASSOCIATION OF CALIFORNIA: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE PROPOSED PROCUREMENT OF A 12-INCH CUTTER HEAD DREDGE FOR USE ON REACH 1 OF THE TEHAMA-COLUSA CANAL. YOUR PROTEST IS BASED UPON THE CONTENTION THAT THE WORK THE BUREAU INTENDS TO PERFORM WITH THE DREDGE COULD BE MORE ECONOMICALLY PERFORMED BY A COMMERCIAL DREDGING CONTRACTOR. THE DECISION TO PERFORM THE WORK "IN-HOUSE" RATHER THAN "CONTRACT-OUT" WAS MADE WITHOUT COMPARING COSTS OF THE RESPECTIVE MEANS OF PERFORMING THE WORK.

B-175458(1), JUL 6, 1972

BID PROTEST - "IN HOUSE" PROCUREMENT - PROPRIETY OF DECISION DENYING THE PROTEST OF THE DREDGING CONTRACTORS ASSOCIATION OF CALIFORNIA AGAINST THE PROPOSED PROCUREMENT OF A DREDGE BY THE BUREAU OF RECLAMATION FOR USE IN THE OPERATION OF A SALMON SPAWNING COMPLEX. ALTHOUGH "IN-HOUSE" PROCUREMENTS ARE GENERALLY BASED ON A COMPARATIVE COST ANALYSIS, PARAGRAPH 5E OF OMB CIRCULAR A-76 PERMITS SUCH PROCUREMENT UPON THE AGENCY'S DETERMINATION THAT RELIANCE ON A PRIVATE CONTRACTOR WOULD DISRUPT THE SUCCESSFUL ACCOMPLISHMENT OF ITS PROGRAM. HERE, THE BUREAU'S DECISION APPEARS REASONABLE AND, IN ANY EVENT, GAO HAS PREVIOUSLY HELD THAT SUCH DETERMINATIONS ARE NOT SUBJECT TO QUESTION IN TERMS OF LEGAL RIGHTS AND RESPONSIBILITIES. 42 COMP. GEN. 640, 642 (1963). ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO DREDGING CONTRACTORS ASSOCIATION OF CALIFORNIA:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE PROPOSED PROCUREMENT OF A 12-INCH CUTTER HEAD DREDGE FOR USE ON REACH 1 OF THE TEHAMA-COLUSA CANAL, CENTRAL VALLEY PROJECT, CALIFORNIA, PURSUANT TO SOLICITATION NO. (D) J-33,404-A, ISSUED BY THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR.

YOUR PROTEST IS BASED UPON THE CONTENTION THAT THE WORK THE BUREAU INTENDS TO PERFORM WITH THE DREDGE COULD BE MORE ECONOMICALLY PERFORMED BY A COMMERCIAL DREDGING CONTRACTOR. FURTHERMORE, YOU CONTEND THAT, CONTRARY TO THE POLICY SET FORTH IN OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A-76, REVISED, AUGUST 30, 1967, THE DECISION TO PERFORM THE WORK "IN-HOUSE" RATHER THAN "CONTRACT-OUT" WAS MADE WITHOUT COMPARING COSTS OF THE RESPECTIVE MEANS OF PERFORMING THE WORK.

IN ITS REPORT TO OUR OFFICE DATED JUNE 8, 1972, THE DEPARTMENT OF THE INTERIOR POINTS OUT THAT WHILE PARAGRAPH 5E OF CIRCULAR A-76 REQUIRES A COMPARATIVE COST ANALYSIS TO JUSTIFY A DECISION TO PERFORM "IN-HOUSE" A COMMERCIALLY AVAILABLE SERVICE, PARAGRAPH 5A ALLOWS A GOVERNMENT AGENCY TO PERFORM SUCH SERVICE FOR ITSELF IF IT IS DETERMINED AFTER A REVIEW OF THE FACTS THAT RELIANCE UPON A COMMERCIAL SOURCE WILL DISRUPT THE SUCCESSFUL ACCOMPLISHMENT OF ITS PROGRAM. THE PROGRAM INVOLVED HERE IS THE OPERATION OF A SALMON FISH SPAWNING COMPLEX WHICH IS AN INTEGRAL PART OF THE INITIAL REACH OF THE CANAL. THE ADMINISTRATIVE REPORT INCLUDES THE FOLLOWING EXPLANATION OF THE PROGRAM:

"*** THE PROCEDURES NECESSARY FOR THE SATISFACTORY OPERATION OF THE FISH SPAWNING FACILITIES WERE DETERMINED JOINTLY BY THE BUREAU AND BOTH THE FEDERAL AND STATE REPRESENTATIVES WITH EXPERTISE IN BIOLOGICAL SCIENCES AND EXPERIENCE IN PROPAGATION OF SALMON. DURING THIS PROCESS, IT WAS DETERMINED A DREDGE WOULD BE NECESSARY TO REMOVE FROM TIME TO TIME THE SEDIMENT CONTAINED IN THE WATER DIVERTED FROM THE RIVER CONSISTING OF FINE -GRAINED MATTER WHICH, DUE TO THE VERY LOW VELOCITY OF THE WATER, SLOWLY SETTLES OUT IN THE ESPECIALLY PROVIDED BASIN. ***"

"THE SPECIAL SEQUENCE AND TIMING OF FISH SPAWNING IS SUCH THAT THE OPERATIONS OF THE FISH FACILITIES MUST BE UNDER THE CONTROL OF THE GOVERNMENT AND CANNOT BE DISRUPTED. THIS INCLUDES THE OPERATION OF THE DREDGE, WHICH DUE TO THE UNCERTAINTY IN THE TIMING OF THE DEPOSITION AND THE AMOUNT OF SEDIMENT, MUST BE AVAILABLE BUT OPERATE ONLY WHEN NEEDED TO REMOVE THE ACCUMULATION OF DEPOSITED SEDIMENTS. SUCH CONDITIONS MAKE THE WORK UNSUITABLE FOR PERFORMANCE BY CONTRACT. ***"

IN THIS CONNECTION, THE DEPARTMENT REPORTS THAT THE INTENDED PURCHASE OF THE DREDGE FOR USE IN THE PROGRAM WAS INCLUDED IN THE BUREAU'S BUDGET REQUEST WHICH WAS REVIEWED BY OFFICIALS OF THE DEPARTMENT OF THE INTERIOR AND OFFICE OF MANAGEMENT AND BUDGET AND SUBSEQUENTLY APPROVED BY THE CONGRESS. WE BELIEVE THE REPORT SETS OUT A REASONABLE BASIS, CONSISTENT WITH THE PROVISIONS OF CIRCULAR A-76, FOR THE ADMINISTRATIVE ACTION TAKEN.

IN ANY CASE, WE CONSIDERED A SIMILAR CONTENTION BASED UPON THE PROVISIONS OF THE PREDECESSOR OF REVISED OMB CIRCULAR A-76, AND STATED AT 42 COMP. GEN. 640, 642 (1963):

"*** THE PROPRIETY OF A DETERMINATION BY AN EXECUTIVE AGENCY AS TO WHETHER SERVICES OR PRODUCTS SHOULD BE OBTAINED UNDER CONTRACT WITH PRIVATE ENTERPRISE OR THROUGH THE USE OF GOVERNMENT-OWNED FACILITIES IS NOT A MATTER PERMITTING OF A RULING IN TERMS OF LEGAL RIGHTS AND RESPONSIBILITIES. WE THEREFORE FIND NO LEGAL BASIS FOR OBJECTION TO THE PROPOSED ADMINISTRATIVE ACTION, AND WE MUST DECLINE TO RULE UPON THE POLICY QUESTION INVOLVED, WHICH WE DEEM TO BE A MATTER FOR RESOLUTION WITHIN THE EXECUTIVE BRANCH."

SEE ALSO B-171920(1), SEPTEMBER 2, 1971, AND B-170079, SEPTEMBER 15, 1970. THEREFORE, WE FIND NO BASIS TO OBJECT TO THE ADMINISTRATIVE ACTION IN THIS CASE.