B-179038, FEB 13, 1974

B-179038: Feb 13, 1974

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DECISION THAT THERE IS NO BASIS TO DISTURB AWARD TO LOW BIDDER FOR STENOGRAPHIC SERVICES WHERE COST OF TRANSCRIPTS TO PUBLIC. WHICH WERE NOT INCLUDED IN EVALUATION. WERE NOT EXORBITANT. IS AFFIRMED. SINCE THE ICC IS PRESENTLY REVIEWING ITS CONTRACTING PROCEDURES. NO FURTHER ACTION BY GAO IS PRESENTLY REQUIRED. FOR THE REASON STATED BELOW OUR DECISION IS AFFIRMED. CSA'S INITIAL PROTEST URGED THAT METROPOLITAN'S BID WAS NONRESPONSIVE SINCE THE PRICE OF $.30 PER PAGE FOR DUPLICATING SERVICES TO OTHERS WAS IN EXCESS OF THE "ACTUAL COST OF DUPLICATION" AS THAT TERM IS USED IN SECTION 11 OF PUBLIC LAW 92-463. CSA ALSO QUESTIONED WHETHER PARAGRAPH 9 OF THE "INFORMATION TO BIDDERS" WHICH STATED THAT THE PRICES FOR THE DUPLICATING SERVICES WOULD ONLY BE EVALUATED TO THE EXTENT THAT SUCH RATES ARE NOT EXORBITANT WAS ADEQUATE IN VIEW OF THE STATUTORY REQUIREMENT THAT SUCH SERVICES BE PROVIDED AT THE "ACTUAL COST OF DUPLICATION.".

B-179038, FEB 13, 1974

DECISION THAT THERE IS NO BASIS TO DISTURB AWARD TO LOW BIDDER FOR STENOGRAPHIC SERVICES WHERE COST OF TRANSCRIPTS TO PUBLIC, WHICH WERE NOT INCLUDED IN EVALUATION, WERE NOT EXORBITANT, IS AFFIRMED. CONTRACTOR'S OBLIGATION TO CHARGE PUBLIC NO MORE THAN ACTUAL COST FOR TRANSCRIPTS MAY BE ENFORCED BY AGENCY AS CONTRACT ADMINISTRATION MATTER. SINCE THE ICC IS PRESENTLY REVIEWING ITS CONTRACTING PROCEDURES, NO FURTHER ACTION BY GAO IS PRESENTLY REQUIRED.

TO CSA REPORTING CO.:

BY LETTER OF OCTOBER 19, 1973, CSA REPORTING SERVICE (CSA) REQUESTED RECONSIDERATION OF OUR DECISION OF OCTOBER 4, 1973, CONCERNING ITS PROTEST RELATIVE TO THE AWARD OF A CONTRACT TO METROPOLITAN REPORTING SERVICE, INCORPORATED (METROPOLITAN), UNDER INVITATION FOR BIDS NO. ICC 73-1, ISSUED BY THE INTERSTATE COMMERCE COMMISSION (ICC). IN OUR LETTER OF OCTOBER 4, 1973, TO THE ICC, WE FOUND NO BASIS FOR DISTURBING THE AWARD MADE WHICH IN EFFECT DENIED CSA'S PROTEST. FOR THE REASON STATED BELOW OUR DECISION IS AFFIRMED.

BRIEFLY, CSA'S INITIAL PROTEST URGED THAT METROPOLITAN'S BID WAS NONRESPONSIVE SINCE THE PRICE OF $.30 PER PAGE FOR DUPLICATING SERVICES TO OTHERS WAS IN EXCESS OF THE "ACTUAL COST OF DUPLICATION" AS THAT TERM IS USED IN SECTION 11 OF PUBLIC LAW 92-463, OCTOBER 6, 1972. CSA ALSO QUESTIONED WHETHER PARAGRAPH 9 OF THE "INFORMATION TO BIDDERS" WHICH STATED THAT THE PRICES FOR THE DUPLICATING SERVICES WOULD ONLY BE EVALUATED TO THE EXTENT THAT SUCH RATES ARE NOT EXORBITANT WAS ADEQUATE IN VIEW OF THE STATUTORY REQUIREMENT THAT SUCH SERVICES BE PROVIDED AT THE "ACTUAL COST OF DUPLICATION."

WE FOUND NO BASIS TO QUESTION THE AWARD SINCE METROPOLITAN'S BID WAS LOW FOR THE STENOGRAPHIC SERVICES AND THE ICC DETERMINED THAT METROPOLITAN'S CEILING PRICES FOR THE DUPLICATING SERVICES WERE NOT EXORBITANT.

HOWEVER, WE RAISED THE QUESTION WHETHER THE PROCEDURE UTILIZED, WHICH HAD THE EFFECT OF INSULATING THE PRICES FOR DUPLICATING SERVICES FROM THE MARKET PLACE, ADEQUATELY PROTECTED THE PUBLIC AGAINST PAYING HIGH PRICES FOR DUPLICATING SERVICES. WE RECOMMENDED THAT THE ICC GIVE CAREFUL CONSIDERATION TO ALTERNATE PROCEDURES FOR PROCURING SUCH SERVICES IN THE FUTURE. BY LETTER OF OCTOBER 19, 1973, THE ICC ADVISED OUR OFFICE THAT ITS CONTRACTING PROCEDURES WERE BEING REVIEWED TO DETERMINE WHAT CHANGES, IF ANY, MIGHT BE BENEFICIAL.

CSA'S LETTER OF OCTOBER 19, 1973, TAKES ISSUE WITH THE FOLLOWING STATEMENT IN OUR DECISION:

"*** IT IS ALSO REPORTED THAT METROPOLITAN RECOGNIZES THAT THE PRICES BID FOR DUPLICATING SERVICES ARE MAXIMUM CHARGES ONLY AND THAT YOUR AGENCY WILL INSURE THAT THE ACT'S PROVISIONS ARE GIVEN EFFECT."

CSA ARGUES THAT THE IMPLICATION IN THE STATEMENT THAT THE ICC WILL POLICE THE CONTRACTOR'S SALES OF TRANSCRIPTS TO THE PUBLIC IS INCONSISTENT WITH PARAGRAPH 16 OF THE IFB SPECIFICATIONS WHICH STATES THAT THE ICC WILL HAVE NO CONTROL OVER TRANSACTIONS BETWEEN THE PURCHASER AND THE CONTRACTOR. CSA ALSO URGES THAT OUR OFFICE SHOULD PROVIDE CLEAR STANDARDS TO THE ICC AND OTHER FEDERAL AGENCIES AS TO HOW SECTION 11 OF THE ACT IS TO BE APPLIED TO THE BIDDING PROCESS.

PARAGRAPH 16 OF THE SPECIFICATIONS, REFERRED TO IN CSA'S LETTER, PROVIDES IN PERTINENT PART:

"STRICT OBSERVANCE SHALL BE GIVEN TO ALL THE PROVISIONS OF THIS CONTRACT IN REGARD TO THE SALE OF TRANSCRIPTS, BUT ALL TRANSACTIONS IN REGARD THERETO SHALL BE BETWEEN THE PURCHASER AND THE CONTRACTOR, AND THE COMMISSION SHALL EXERCISE NO CONTROL THERE OVER; EXCEPT IN THOSE CASES OF ACTS BY THE CONTRACTOR CONTRARY TO THOSE SPECIFICATIONS OR THE TERMS OF THE AGREEMENT OF WHICH THEY ARE A PART ***."

THE SCHEDULE ON PAGES 2 AND 3 OF THE SOLICITATION CLEARLY ADVISED THAT THE PRICE FOR THE DUPLICATING SERVICE TO OTHERS WAS THE "MAXIMUM COST." NOTATION AT THE BOTTOM OF THE BIDDING SCHEDULE ON PAGE 3 OF THE SOLICITATION PROVIDED THAT THE AMOUNT BID FOR ITEMS 2, 4, 6 AND 9, THE ITEMS RELATING TO DUPLICATING SERVICES TO OTHERS, COULD NOT EXCEED THE COST OF DUPLICATION PLUS A REASONABLE FACTOR FOR OVERHEAD AND PROFIT.

PARAGRAPH 6 OF THE "INFORMATION TO BIDDERS" ADVISED BIDDERS OF THE PROPOSED AMENDMENT OF SECTION 1002.1 OF THE ICC'S GENERAL RULES AND REGULATIONS TO PROVIDE FOR THE PURCHASE OF TRANSCRIPTS BY THE PUBLIC FROM THE OFFICIAL REPORTER AT "ACTUAL COST TO THE OFFICIAL REPORTER" AND THAT "THIS AMOUNT MAY INCLUDE REASONABLE OVERHEAD AND PROFIT BUT MAY NOT INCLUDE ANY OF THE ORIGINAL COST OF TRANSCRIPTION." THE EFFECT OF THESE PROVISIONS OF THE SOLICITATION IS TO IMPOSE AN OBLIGATION ON THE CONTRACTOR NOT TO CHARGE THE PUBLIC MORE THAN THE ACTUAL COSTS OF THE DUPLICATING SERVICES, AND IF THE ACTUAL PRICE OF SUCH SERVICES IS LESS THAN THE CEILING PRICE, THEN THE LESSER AMOUNT MUST BE CHARGED. THE ICC COULD, THEREFORE, TAKE APPROPRIATE ACTION TO ENFORCE THIS OBLIGATION IN THE ADMINISTRATION OF METROPOLITAN'S CONTRACT UNDER THE EXCEPTION IN PARAGRAPH 16 OF THE SPECIFICATIONS. WE HAVE INDICATED THAT THE ICC IS PRESENTLY REVIEWING ITS PROCUREMENT PROCEDURES TO DETERMINE WHAT IMPROVEMENTS, IF ANY, MAY BE MADE TO FUTURE SOLICITATIONS FOR THE TYPES OF SERVICES CONSIDERED HERE AND WE HAVE REQUESTED THAT WE BE ADVISED OF THE ACTION TAKEN. SINCE ICC IS PROCEEDING IN ACCORDANCE WITH THE RECOMMENDATION IN OUR LETTER OF OCTOBER 4, 1973, WE DO NOT BELIEVE THAT ANY FURTHER ACTION BY OUR OFFICE IS REQUIRED AT THIS TIME.