B-175797, JUN 20, 1972

B-175797, JUN 20, 1972

BID PROTEST - FEDERAL SUPPLY SERVICE PROCUREMENT - STATUTORY MAXIMUM ORDER LIMITATION CONCERNING THE PROTEST OF WORD PROCESSING PRODUCTS, INC; AGAINST A PROCUREMENT OF OFFICE MACHINES BY THE NATIONAL LABOR RELATIONS BOARD FROM THE ITEL CORPORATION UNDER A FEDERAL SUPPLY SERVICE CONTRACT. ALTHOUGH THE SUBJECT CONTRACT IS IN EXCESS OF THE $10,000 MAXIMUM ORDER LIMITATION IMPOSED BY AMENDMENT NO. 3 TO THE FEDERAL SUPPLY SCHEDULE FOR GROUP 74, PART 1, OFFICE MACHINES, ISSUED ON NOVEMBER 1, 1971, SINCE THE MACHINES WERE SCHEDULED FOR DELIVERY IN APRIL, 1972, NO ACTION ON THE PRESENT PROCUREMENT IS FEASIBLE. HOWEVER, THE BOARD IS BEING ADVISED OF THE NECESSITY FOR FOLLOWING PRESCRIBED PROCEDURES IN FUTURE PROCUREMENTS.

TO WORD PROCESSING PRODUCTS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 24, 1972, WITH ENCLOSURES, RELATIVE TO A PROCUREMENT OF OFFICE MACHINES BY THE NATIONAL LABOR RELATIONS BOARD FROM THE ITEL CORPORATION UNDER PURCHASE ORDERS NOS. 72-809 AND 72-810, DATED DECEMBER 28, 1971, AND FEDERAL SUPPLY SCHEDULE CONTRACT NO. GS-00S-896-36 WITH THE ITEL CORPORATION, COVERING THE PERIOD JULY 1, 1971, THROUGH JUNE 30, 1972.

YOU CONTEND THAT PURCHASE ORDER NO. 72-809 EXCEEDED THE MAXIMUM ORDER LIMITATION OF THE APPLICABLE FEDERAL SUPPLY SCHEDULE CONTRACT FOR FSC GROUP 74, PART 1, OFFICE MACHINES, FSC CLASS 7430, SPECIAL ITEM NO. 47 23, AND THAT PURCHASE ORDER NO. 72-809 SHOULD BE CANCELED ON THE BASIS THAT SUCH ACTION WOULD BE IN THE BEST INTERESTS OF THE UNITED STATES.

PURCHASE ORDER NO. 72-809 PROVIDED FOR THE PURCHASE OF EIGHT ITEL MODEL 852 MACHINES, DESCRIBED IN THE COMPANY'S CATALOG AS A WORD PROCESSOR SYSTEM, AND EIGHT ITEL MODEL 800 MACHINES, DESCRIBED IN THE CATALOG AS AN AUXILIARY READER. PURCHASE ORDER NO. 72-810, PROVIDED FOR A THREE-MONTH RENTAL OF 10 ITEL MODEL 853 MACHINES, DESCRIBED IN THE CATALOG AS A BARRISTER WORD PROCESSOR SYSTEM, 10 ITEL MODEL 800 AUXILIARY READERS, AND RIBBON SHIFTS FOR THE RENTED MODEL 853 MACHINES.

IT IS REPORTED BY THE NATIONAL LABOR RELATIONS BOARD THAT IN MAY 1966 THE BOARD BEGAN AN ELECTRONIC PRINTING PROGRAM TO ACCELERATE THE ISSUANCE OF BOUND VOLUMES OF DECISIONS AND ORDERS, AND TO CREATE A DATA BASIS FOR A COMPREHENSIVE LEGAL INFORMATION RETRIEVAL SYSTEM COORDINATED WITH A MORE EFFICIENT SYSTEM FOR REPETITIVE TYPING. EQUIPMENT ORIGINALLY PURCHASED FOR THE PROGRAM BEGAN TO MALFUNCTION SOMETIME IN 1969. IN CONJUNCTION WITH THE DEVELOPMENT OF PLANS TO REPLACE THAT EQUIPMENT, THE BOARD CONDUCTED A YEAR-LONG STUDY OF EQUIPMENT THEN ON THE FEDERAL SUPPLY SCHEDULE. AFTER LOOKING AT AND CONSIDERING MANY MACHINES INCLUDING YOUR PRODUCT, THE BOARD DECIDED TO PURCHASE ITEL MODEL 852 MACHINES. RENTAL OF THE MORE COMPLEX ITEL MODEL 853 MACHINES SEEMED MORE FEASIBLE THAN PURCHASE.

WHEN THE BOARD RECEIVED INFORMATION IN MARCH 1972 THAT ITEL WOULD DISCONTINUE THE MANUFACTURE OF ITS OFFICE EQUIPMENT LINE, CONSIDERATION WAS IMMEDIATELY GIVEN TO THE RANGE OF ALTERNATIVES OPEN IN VIEW OF THE PENDING PROCUREMENT. AFTER A REPORTEDLY EXTENSIVE REVIEW OF THE PROSPECTS OF ADAPTING TO OTHER AVAILABLE EQUIPMENT, PROCEEDING WITH THE PENDING PROCUREMENT OR CONTINUING TO STRUGGLE WITH THE OUTWORN ORIGINAL EQUIPMENT, THE BOARD CONCLUDED THAT THE GREATEST ADVANTAGE TO THE GOVERNMENT WOULD BE OBTAINED BY PROCEEDING WITH THE PENDING PROCUREMENT. ITEL CORPORATION PROVIDED WRITTEN ASSURANCES FOR LONG RANGE SERVICE ALTHOUGH IT PLANNED TO DISCONTINUE THE MANUFACTURE OF ITS OFFICE EQUIPMENT LINE.

THE BOARD CONSIDERED THAT THIS PROCUREMENT WAS NOT SUBJECT TO COMPETITIVE BID PROCEDURES BECAUSE THE CONTRACTOR WAS SELECTED FROM THE FEDERAL SUPPLY SCHEDULE (FSS). YOU WERE ADVISED THAT PURCHASE ORDER NO. 72-809 WAS A BLANKET PURCHASE ORDER FOR THE FURNISHING OF EQUIPMENT AT A TOTAL COST OF $47,200, THAT THE FSS CONTRACT LIMITATION OF THIS TYPE OF EQUIPMENT IS $10,000 FOR ANY SINGLE ITEM AND $75,000 FOR ANY OTHER, AND THAT THE PURCHASE TRANSACTION WAS PROPER AND IN THE BEST INTEREST OF THE GOVERNMENT SINCE, UNDER THE PROVISIONS OF THE BLANKET PURCHASE ORDERS, MAXIMUM DISCOUNT ADVANTAGES ACCRUE TO THE PURCHASER WHERE HIGH QUANTITY PURCHASE NEEDS OBTAIN. YOU WERE ADVISED THAT THE EDITYPER EQUIPMENT WHICH YOU PROPOSED TO FURNISH WAS FOUND TO BE LACKING IN THE PROGRAM CAPABILITY NECESSARY TO EFFECTIVELY SUPPORT THE BOARD'S OPERATING REQUIREMENTS.

IT APPEARS THAT THE NATIONAL LABOR RELATIONS BOARD'S REFERENCE TO A $75,000 ORDER LIMITATION WAS BASED UPON ONE OF THE SPECIAL PROVISIONS USED BY THE GENERAL SERVICES ADMINISTRATION IN THE SOLICITATION OF OFFERS FOR THE FURNISHING OF OFFICE MACHINES DURING THE FISCAL YEAR 1972, JULY 1, 1971, THROUGH JUNE 30, 1972, ON A PURCHASE OR RENTAL BASIS. IT WAS PROVIDED THAT THE TOTAL DOLLAR VALUE OF ANY ORDER WHICH MAY BE PLACED UNDER CONTRACTS RESULTING FROM THE SOLICITATION "MAY VARY FROM $2,500 TO $75,000," AND IT APPEARS THAT, FOR AN ITEM SUCH AS THE ITEL MODEL 852 WORD PROCESSOR SYSTEM, THE LIMITATION OF $75,000 WAS INTENDED FOR APPLICATION IN THE ABSENCE OF THE NEGOTIATION OF ANY OTHER LIMITATION DURING THE PERIOD OF THE FEDERAL SUPPLY SCHEDULE CONTRACT WITH THE ITEL CORPORATION. HOWEVER, BY AMENDMENT NO. 3 TO THE FEDERAL SUPPLY SCHEDULE FOR GROUP 74, PART 1, OFFICE MACHINES, ISSUED ON NOVEMBER 1, 1971, A MAXIMUM ORDER LIMITATION OF $10,000 WAS ESTABLISHED FOR A GROUP OF ITEMS INCLUDING PURCHASE OF THE COMPANY'S WORD PROCESSOR MACHINES AND AUXILLIARY EQUIPMENT SUCH AS THE ITEL MODEL 800 AUXILLIARY READER. THE NET PRICE OF THE ITEL MODEL 852 IS $4,890.60. HENCE, THE MAXIMUM ORDER LIMITATION APPLICABLE TO THE PURCHASE OF THE ITEL MODEL 852 MACHINES WAS EXCEEDED WHEN EIGHT OF SUCH MODELS WERE ORDERED BY THE NATIONAL LABOR RELATIONS BOARD. SINCE THE MACHINES WERE SCHEDULED FOR DELIVERY DURING THE MONTH OF APRIL 1972, NO ACTION WITH RESPECT TO THE PROCUREMENT IS FEASIBLE. HOWEVER, WE ARE ADVISING THE BOARD OF THE NECESSITY FOR FOLLOWING PRESCRIBED PROCEDURES IN THE CASE OF PURCHASES FROM FEDERAL SUPPLY SCHEDULES IN EXCESS OF THE MAXIMUM ORDER LIMITATION.