B-176395, JUN 15, 1973, 52 COMP GEN 941

B-176395: Jun 15, 1973

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CONTRACTS - FEDERAL SUPPLY SCHEDULE - TO OTHER THAN LOW BIDDER OR OFFEROR - JUSTIFICATION ALTHOUGH SELECTION FROM MULTIPLE SOURCES AVAILABLE UNDER A FEDERAL SUPPLY SCHEDULE (FSS) IS WITHIN THE JURISDICTION OF A PROCURING AGENCY BECAUSE IT BEST KNOWS ITS NEEDS. NONETHELESS THE AGENCY IS REQUIRED TO COMPLY WITH PARAGRAPH 5-106 OF THE ARMED SERVICES PROCUREMENT REGULATION. AN AGENCY THAT ISSUED A REQUEST FOR QUOTATIONS (RFQ) TO FSS SUPPLIERS FOR THE RENTAL OF COPIER MACHINES WHICH DID NOT CLEARLY STATE THE VARIATIONS FROM THE COPIERS AVAILABLE FROM FSS SOURCES AND PLACED A DELIVERY ORDER FOR FOREIGN-MADE COPIERS WITH THE LOW OFFEROR UNDER THE RFQ WHOSE FSS PRICE LIST IS NOT THE LOWEST SHOULD HAVE INCLUDED A JUSTIFICATION FOR THE ORDER IN THE CONTRACT FILE TO THE EFFECT THE LOWER-PRICED COPIERS WOULD NOT DO AND PROCURING THE HIGHER PRICED COPIERS WAS NECESSARY.

B-176395, JUN 15, 1973, 52 COMP GEN 941

CONTRACTS - FEDERAL SUPPLY SCHEDULE - TO OTHER THAN LOW BIDDER OR OFFEROR - JUSTIFICATION ALTHOUGH SELECTION FROM MULTIPLE SOURCES AVAILABLE UNDER A FEDERAL SUPPLY SCHEDULE (FSS) IS WITHIN THE JURISDICTION OF A PROCURING AGENCY BECAUSE IT BEST KNOWS ITS NEEDS, NONETHELESS THE AGENCY IS REQUIRED TO COMPLY WITH PARAGRAPH 5-106 OF THE ARMED SERVICES PROCUREMENT REGULATION. THEREFORE, AN AGENCY THAT ISSUED A REQUEST FOR QUOTATIONS (RFQ) TO FSS SUPPLIERS FOR THE RENTAL OF COPIER MACHINES WHICH DID NOT CLEARLY STATE THE VARIATIONS FROM THE COPIERS AVAILABLE FROM FSS SOURCES AND PLACED A DELIVERY ORDER FOR FOREIGN-MADE COPIERS WITH THE LOW OFFEROR UNDER THE RFQ WHOSE FSS PRICE LIST IS NOT THE LOWEST SHOULD HAVE INCLUDED A JUSTIFICATION FOR THE ORDER IN THE CONTRACT FILE TO THE EFFECT THE LOWER-PRICED COPIERS WOULD NOT DO AND PROCURING THE HIGHER PRICED COPIERS WAS NECESSARY; SHOULD HAVE TIMELY SUBMITTED REQUIRED BUY AMERICAN INFORMATION; AND SHOULD IF IT CONTINUES TO USE THE RFQ PROCEDURE TO UP-DATE INFORMATION, CLARIFY ITS REQUIREMENTS SO SUPPLIERS UNABLE TO CONFORM WILL BE SPARED THE TIME AND EXPENSE OF RESPONDING TO AN RFQ.

TO THE SECRETARY OF THE AIR FORCE, JUNE 15, 1973:

REFERENCE IS MADE TO LETTER OF APRIL 16, 1973, REFERENCE LGPM, AND PRIOR CORRESPONDENCE, FROM THE CHIEF, CONTRACT MANAGEMENT DIVISION, DIRECTORATE OF PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, CONCERNING THE PROTEST OF APECO CORPORATION AGAINST THE ISSUANCE OF A DELIVERY ORDER BY PROCUREMENT OFFICIALS AT RICHARDS GEBAUR AIR FORCE BASE, MISSOURI (HEREINAFTER R-G), FOR RENTAL OF COPIER MACHINES DURING FISCAL YEAR 1973. THE ORDER WAS ISSUED ON JULY 1, 1972, FOR THE RENTAL OF SIX LOW-SPEED AND EIGHT HIGH-SPEED COPIERS FROM THE A. B. DICK COMPANY UNDER ITS FEDERAL SUPPLY SCHEDULE (FSS) CONTRACT GS-00S-06921.

R-G ISSUED REQUEST FOR QUOTATIONS (RFQ)(DD FORM 1155) NO. F23608-72-Q 0438 ON APRIL 24, 1972, FOR INFORMATION ON ELECTROSTATIC COPIER MACHINES (FEDERAL SUPPLY CATALOG GROUP 36, PART IV, CLASS 3610 EQUIPMENT) AVAILABLE FOR RENTAL UNDER EXISTING GENERAL SERVICES ADMINISTRATION CONTRACTS. RENTAL OF THIS EQUIPMENT FROM FSS SOURCES IS NOT MANDATORY. SEE PARAGRAPH 5-102.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). HOWEVER, THE DECISION WAS MADE TO UTILIZE THE FSS AND R-G ISSUED THE RFQ TO 13 FSS SUPPLIERS, 10 OF WHOM RESPONDED WITH QUOTATIONS. R-G DETERMINED THAT EIGHT OF THESE, INCLUDING APECO, DID NOT MEET THE PERFORMANCE REQUIREMENTS SET FORTH IN THE RFQ. A. B. DICK AND SAVIN BUSINESS MACHINES COMPANY OFFERED FOREIGN-MADE COPIERS WHICH WERE FOUND TO MEET THE REQUIREMENTS AND THE ORDER WAS PLACED WITH A. B. DICK, WHOSE PRICE WAS LOWER. THE TOTAL PRICE OF THE ORDER AS $10,118.40.

THE PROTEST IS DIRECTED AT THE LIST OF REQUIREMENTS, AND AT THREE REQUIREMENTS IN PARTICULAR: BOTH THE LOW- AND HIGH-SPEED COPIERS WERE, FIRST, REQUIRED TO HAVE "PAPER LENGTH SELECTION FROM 5 1/2 IN. TO 14 1/2 IN." (THE SELECTION REQUIREMENT) AND, SECOND, TO BE ABLE TO PRODUCE "700 TO 800 COPIES PER ROLL-18#-20# LIGHT WEIGHT PAPER" (THE NUMBER OF COPIES REQUIREMENT). THE ROLLS OF PAPER REFERRED TO ARE 8 INCHES WIDE. THUS THE COPIERS WERE BASICALLY REQUIRED TO BE ABLE TO PRODUCE SIZES OF COPIES RANGING FROM 5 1/2 BY 8 INCHES TO 14 1/2 BY 8 INCHES. HOWEVER, IT IS NOT CLEAR WHAT SIZE OR SIZES OF COPIES ARE REQUIRED TO BE PRODUCED AT THE RATE OF 700-800 PER ROLL. THE THIRD CONTROVERTED REQUIREMENT IS THAT THE HIGH- SPEED COPIER BE ABLE TO PRODUCE 26-30 COPIES PER MINUTE (THE SPEED REQUIREMENT). THE SIZE OR SIZES OF COPIES REQUIRED TO BE PRODUCED AT THIS RATE ARE NOT SPECIFIED.

THE PROTESTANT HAS PRESENTED NUMEROUS OBJECTIONS CONCERNING THE MEANING AND APPLICATION GIVEN BY THE R-G OFFICIALS TO THESE REQUIREMENTS. BELIEVE ITS PROTEST IS ESSENTIALLY GROUNDED UPON THREE CONTENTIONS: THAT THE REQUIREMENTS WERE UNCLEAR, THAT THEY WERE UNDULY RESTRICTIVE OR DID NOT REPRESENT THE MINIMUM NEEDS OF THE AGENCY, AND THAT, IN ANY EVENT, APECO'S COPIERS WERE IN CONFORMITY WITH THEM. THERE IS MERIT TO THE ALLEGATION THAT THE REQUIREMENTS WERE UNCLEAR. AS TO THE SELECTION REQUIREMENT, THERE IS NO INDICATION HOW THE OPERATOR IS TO SELECT THE SIZES OF COPIES - WHETHER BY DIALING, BY MANUALLY INSERTING A DIFFERENT SIZE ROLL OF PAPER, OR OTHERWISE. AS TO THE NUMBER OF COPIES AND SPEED REQUIREMENTS, AS ALREADY NOTED, THERE IS NO INDICATION WHAT SIZE OR SIZES OF COPIES ARE INVOLVED. FURTHERMORE, IT IS REASONABLE THAT APECO DID NOT REQUEST ANY CLARIFICATION OF THE REQUIREMENTS, SINCE THE RECORD SHOWS THAT THE PROTESTANT HAD BEEN ISSUED THE DELIVERY ORDER FOR THE PREVIOUS YEAR, FISCAL YEAR 1972, UNDER THE SAME LIST OF REQUIREMENTS. R-G HAS STATED, WITHOUT OFFERING FURTHER EXPLANATION, THAT THE 1972 ORDER WAS ISSUED ERRONEOUSLY AND, THEREFORE, THERE IS NO INCONSISTENCY IN THE FACT THAT APECO'S COPIERS WERE FOUND NOT TO BE IN CONFORMITY WITH THE SAME REQUIREMENTS FOR FISCAL YEAR 1973.

THE ONLY JUSTIFICATION IN THE RECORD FOR THESE REQUIREMENTS IS A MEMORANDUM DATED JUNE 13, 1972, WHICH ANTEDATES THE DELIVERY ORDER. THIS WAS THE DAY BEFORE A. B. DICK WAS NOTIFIED THAT IT WAS TO RECEIVE THE ORDER. THIS MEMORANDUM LISTS VARIOUS OFFICES WHICH CALLED FOR THE SELECTION REQUIREMENTS. HOWEVER, WE NOTE THAT THE REQUESTING ORGANIZATION DID NOT CALL FOR THE CAPABILITY TO PRODUCE COPIES FROM 5 1/2 TO 14 1/2 INCHES IN LENGTH, BUT ONLY THAT THE MACHINES BE CAPABLE OF PRODUCING COPIES 5 1/2 INCHES LONG AND COPIES 14 1/2 INCHES LONG. ALSO, THE NUMBER OF COPIES REQUIREMENT IS STATED AS BEING "OVER 700 COPIES OF 8 X 10 1/2 SIZE PER ROLL OF PAPER," THE JUSTIFICATION BEING THAT THIS FEATURE WOULD ELIMINATE A MAJOR WASTE OF TIME INVOLVED IN CHANGING THE PAPER ROLLS. MENTION IS MADE OF THE SPEED REQUIREMENT. THE CONTRACTING OFFICER HAS STATED THAT THE CONTENTS OF THE MEMORANDUM CONSTITUTED A RESPONSE TO A QUERY TO THE REQUESTING ORGANIZATION TO REVIEW AND CONFIRM ITS REQUIREMENTS. ALTHOUGH NO EXPLANATION HAS BEEN GIVEN WHY THE INFORMATION IN THE JUNE 13, 1972, MEMORANDUM COULD NOT HAVE BEEN ASSEMBLED AND INCLUDED IN THE CONTRACT FILE BEFORE THE RFQ WAS ISSUED, THERE IS NO REASON TO QUESTION THE VERACITY OF ITS CONTENTS AND WE ARE SATISFIED THAT IT ESTABLISHES A NEED FOR COPIERS WHICH WOULD PRODUCE 5 1/2, 10 1/2 AND 14 1/2 BY 8-INCH COPIES AND OVER 700 COPIES PER ROLL OF THE 10 1/2 BY 8-INCH SIZE. HOWEVER, NO NEED HAS BEEN ESTABLISHED FOR THE SPEED REQUIREMENT.

IN VIEW OF THE NEEDS OF THE REQUESTING ORGANIZATION AS INDICATED ABOVE, R -G'S DETERMINATION NOT TO RENT THE APECO COPIERS WAS PROPER. THE REQUESTING ORGANIZATION NEEDED COPIERS WHICH COULD PRODUCE OVER 700 8 BY 10 1/2 INCH SIZE COPIES PER ROLL. R-G'S POSITION ON THIS POINT, CONFIRMED BY EXAMINATION OF THE AUTHORIZED FEDERAL SUPPLY SCHEDULE AND PRICE LIST, IS THAT APECO'S COPIERS WILL PRODUCE ONLY 600 "LETTER SIZE" COPIES PER ROLL. AS TO THE LENGTH SELECTION REQUIREMENT, THE PROTESTANT CONTENDED IN ITS NOVEMBER 9, 1972, LETTER TO OUR OFFICE THAT IT COULD MEET THIS REQUIREMENT BY A "GEAR ADJUSTMENT." IT DOES NOT APPEAR FROM THE RECORD THAT APECO MADE THIS CLAIM AT THE TIME IT WAS INFORMED THAT IT WOULD NOT RECEIVE THE PURCHASE ORDER. R-G STATES THAT THE ONLY OFFERS MADE BY APECO IN THIS REGARD WERE THAT THE SELECTION REQUIREMENT COULD BE MET BY CHANGING THE PAPER ROLLS OR BY UTILIZING TWO MACHINES IN EACH LOCATION INSTEAD OF ONE. WE SEE NO BASIS ON THE RECORD TO CHALLENGE R-G'S DETERMINATION THAT APECO'S OFFERS WERE UNACCEPTABLE BECAUSE CHANGING THE PAPER ROLLS WOULD BE UNDULY BURDENSOME TO THE OPERATORS AND THAT R-G'S OFFICES LACK SUFFICIENT SPACE TO HOUSE TWO MACHINES. FURTHER, WE CANNOT REGARD APECO'S UNSUBSTANTIATED ALLEGATION CONCERNING "GEAR ADJUSTMENT," MADE MORE THAN 4 MONTHS AFTER THE PURCHASE ORDER WAS ISSUED, AS OVERRIDING R-G'S DETERMINATION OF NONCONFORMITY WITH THE LENGTH SELECTION REQUIREMENT. ALSO, IT IS NOTED THAT THE AUTHORIZED FEDERAL SUPPLY SCHEDULE AND PRICE LIST SHOWS THAT THE MAXIMUM COPY SIZE WHICH APECO'S COPIERS WILL PRODUCE IS 8 1/2 BY 14 INCHES, WHICH FALLS SHORT OF THE 14 1/2 INCH REQUIREMENT.

IN A DECISION INVOLVING SELECTION FROM MULTIPLE SOURCES UNDER A FEDERAL SUPPLY SCHEDULE, OUR OFFICE REITERATED ITS VIEW THAT DETERMINATIONS AS TO THE NEEDS OF AN AGENCY AND WHICH PRODUCTS MEET THOSE NEEDS ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY AND WITH WHICH WE WILL NOT INTERFERE UNLESS THEY CLEARLY APPEAR TO INVOLVE BAD FAITH OR ARE NOT BASED UPON SUBSTANTIAL EVIDENCE. B-168499, JANUARY 20, 1970. THE PRESENT CASE, WE CANNOT SAY THAT THE CONTRACTING OFFICIALS FAILED TO MEET THIS STANDARD IN DECIDING TO RENT COPIERS FROM A. B. DICK RATHER THAN FROM APECO. ACCORDINGLY, APECO'S PROTEST IS DENIED. HOWEVER, THE MATTERS DISCUSSED ABOVE DEMONSTRATE A FAILURE TO COMPLY WITH THE PROPER PROCEDURES AND A NEED FOR IMPROVEMENTS IN R-G'S METHOD OF PROCURING SUCH SERVICES. PROCEDURES FOR SELECTION AMONG MULTIPLE SOURCES ON A FEDERAL SUPPLY SCHEDULE ARE PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 5- 106. ASPR 5-106 PROVIDES:

(A) GENERAL. CERTAIN OF THE FEDERAL SUPPLY SCHEDULES, LISTED IN 5 102.3, PROVIDES SEVERAL SOURCES FOR CERTAIN REQUIREMENTS. ADDITIONALLY, SOME SUCH SCHEDULES INDICATE THAT MULTIPLE SOURCES ARE PROVIDED TO MAKE AVAILABLE A SELECTION OF SUPPLIES OR SERVICES TO MEET A SPECIFIC OR AN UNUSUAL REQUIREMENT. WHEN ORDERS IN EXCESS OF $250 ARE PLACED AT OTHER THAN THE LOWEST SCHEDULE PRICE, THE PURCHASING OFFICE SHALL INCLUDE IN THE CONTRACT FILE A MEMORANDUM CONTAINING THE FACTS JUSTIFYING THE ORDER. THE JUSTIFICATION MAY BE BASED ON CONSIDERATIONS SUCH AS DELIVERY TIME AND ADMINISTRATIVE EXPENSE. WHEN THE ORDER IS TO FULFILL A SPECIFIC OR AN UNUSUAL NEED, IT SHALL, IN ADDITION TO ANY OTHER BASIS FOR JUSTIFICATION, STATE THE UNUSUAL OR SPECIFIC REQUIREMENTS SUCH AS DIFFERENCES IN PERFORMANCE CHARACTERISTICS, AND COMPATIBILITY WITH EXISTING EQUIPMENT OR SYSTEMS.

(B) PROCUREMENT OF ARTICLES OF FOREIGN ORIGIN FOR USE IN THE UNITED STATES. WHEN PURCHASE OF AN ITEM OF FOREIGN ORIGIN IS SPECIFICALLY REQUIRED, THE USING ACTIVITY SHALL FURNISH THE PROCURING ACTIVITY SUFFICIENT INFORMATION TO PERMIT THE DETERMINATIONS REQUIRED BY SECTION VI TO BE MADE.

EXAMINATION OF APECO'S AUTHORIZED FEDERAL SUPPLY SCHEDULE AND PRICE LIST FOR 1972 REVEALS THAT APECO'S RENTAL PRICE FOR EACH COPIER WAS LOWER THAN A. B. DICK'S. THEREFORE, THE PURCHASE ORDER WAS PLACED AT OTHER THAN THE LOWEST SCHEDULE PRICE AND A FACTUAL JUSTIFICATION OF THE ORDER WAS REQUIRED TO BE INCLUDED IN THE CONTRACT FILE. WHILE THE JUNE 13, 1972, MEMORANDUM SERVES TO JUSTIFY SOME OF THE REQUIREMENTS IT DOES NOT SATISFY THE INQUIRY WHETHER A. B. DICK COPIERS DID, IN FACT, MEET THE REQUIREMENTS; WHETHER APECO COPIERS DID NOT MEET ACTUAL NEEDS; AND WHY RENTAL FROM A. B. DICK WAS JUSTIFIED ALTHOUGH APECO'S RENTAL PRICE WAS LOWER. WE BELIEVE THAT THE FAILURE TO COMPILE A TIMELY FACTUAL JUSTIFICATION WAS A PROCEDURAL DEPARTURE FROM THE REGULATION. SEE, IN THIS REGARD, 46 COMP. GEN. 713(1967). IN ADDITION, THE RECORD SHOWS THAT THE "BUY AMERICAN" DETERMINATION REQUIRED BY ASPR SECTION VI WAS NOT MADE UNTIL AFTER THE DELIVERY ORDER WAS ISSUED.

THE APRIL 16, 1973, SUPPLEMENTARY REPORT STATES THAT R-G USES THE RFQ PROCEDURE TO ASSURE THAT UP-TO-DATE INFORMATION IS OBTAINED ON THE AVAILABILITY OF EQUIPMENT FROM FSS SUPPLIERS, SINCE THERE MAY BE SOME DELAY BEFORE PROCURING ACTIVITIES ARE INFORMED OF AMENDMENTS TO THE SCHEDULES, AND ALSO TO OBTAIN MORE DETAILED PRICE INFORMATION THAN IS PROVIDED IN THE SCHEDULES AND PRICE LISTS. IN THE EVENT THAT R-G WISHES TO CONTINUE TO USE THIS PROCEDURE, ITS LIST OF REQUIREMENTS SHOULD BE CLARIFIED TO INDICATE HOW PAPER LENGTH SELECTION IS TO BE ACCOMPLISHED, AND WHAT SIZE OR SIZES OF COPIES ARE REQUIRED TO BE PRODUCED AT THE RATE OF 700-800 COPIES PER ROLL, AND WHAT SIZES ARE TO BE PRODUCED AT THE RATE OF 26-30 COPIES PER MINUTE ON THE HIGH-SPEED COPIER. THIS IS NECESSARY SO THAT PROSPECTIVE SUPPLIERS CAN BE ADEQUATELY INFORMED AS TO WHETHER THEIR EQUIPMENT MEETS R-G'S NEEDS. SUPPLIERS WHOSE EQUIPMENT IS NONCONFORMING, AS WAS THE CASE WITH EIGHT OF 10 SUPPLIERS HERE, MAY THUS BE SPARED THE TIME AND EXPENSE INVOLVED IN PREPARING A RESPONSE TO THE RFQ.