B-179969, FEB 7, 1974, 53 COMP GEN 572

B-179969: Feb 7, 1974

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THE SUBSEQUENT PARTIAL TERMINATION FOR DEFAULT AND THE REPROCUREMENT OF THE ITEM FROM ANOTHER SOURCE IS NOT A PROPER MATTER FOR PROTEST TO THE GENERAL ACCOUNTING OFFICE SINCE THE IRS ACTIONS TAKEN TO INSURE THAT ITS REQUIREMENTS WOULD BE SATISFIED WAS A MATTER OF CONTRACT ADMINISTRATION. INSTALLATION AND ACCEPTANCE OF ALL UNITS WAS TO BE ACCOMPLISHED BY JANUARY 1. A CHANGE REQUIRING DELAYS IN ITS PROGRAMS FOR TAX PROCESSING WAS CONSIDERED TO BE UNACCEPTABLE. IT IS AMPEX'S POSITION THAT IRS SHOULD BE REQUIRED TO SATISFY ITS REQUIREMENTS FOR THIS EQUIPMENT FROM THE MANDATORY GSA REQUIREMENTS CONTRACT CURRENTLY IN EFFECT AND THAT ANY OTHER PROCUREMENT ACTION BE HALTED. AMPEX HAS PROTESTED THAT THE DEFAULT TERMINATION ACTION BY IRS WAS IMPROPER AND SHOULD BE RESCINDED.

B-179969, FEB 7, 1974, 53 COMP GEN 572

CONTRACTS - PROTESTS - AUTHORITY TO CONSIDER - REPROCUREMENT DUE TO REQUIREMENTS CONTRACT DEFAULT WHERE THE INTERNAL REVENUE SERVICE (IRS) PLACED PURCHASE ORDERS FOR MEMORY UNITS WITH THE PROTESTER UNDER A MANDATORY REQUIREMENTS CONTRACT IT HELD WITH THE GENERAL SERVICES ADMINISTRATION, THE SUBSEQUENT PARTIAL TERMINATION FOR DEFAULT AND THE REPROCUREMENT OF THE ITEM FROM ANOTHER SOURCE IS NOT A PROPER MATTER FOR PROTEST TO THE GENERAL ACCOUNTING OFFICE SINCE THE IRS ACTIONS TAKEN TO INSURE THAT ITS REQUIREMENTS WOULD BE SATISFIED WAS A MATTER OF CONTRACT ADMINISTRATION, THE PROPRIETY OF WHICH MUST BE RESOLVED BY THE CONTRACTING PARTIES PURSUANT TO ANY APPLICABLE CONTRACT PROVISION RATHER THAN BY THE GENERAL ACCOUNTING OFFICE.

IN THE MATTER OF AMPEX CORPORATION, FEBRUARY 7, 1974:

BACKGROUND

ON JUNE 29 AND AUGUST 30, 1973, THE INTERNAL REVENUE SERVICE (IRS) ISSUED PURCHASE ORDERS FOR A TOTAL OF SEVEN 256 K CORE MEMORY UNITS PURSUANT TO MANDATORY REQUIREMENTS CONTRACT, NO. GS-00C-00052, HELD BY AMPEX CORPORATION (AMPEX) WITH THE GENERAL SERVICES ADMINISTRATION (GSA). INSTALLATION AND ACCEPTANCE OF ALL UNITS WAS TO BE ACCOMPLISHED BY JANUARY 1, 1974.

AS OF OCTOBER 15, 1973, IRS HAD RECEIVED CONFIRMATION ON ONLY FOUR OF THE SEVEN ORDERED UNITS. IRS' PLANNING AND PROGRAMMING HAD BEEN PREDICATED ON THE INSTALLATION OF SEVEN UNITS BY JANUARY 1, 1974. A CHANGE REQUIRING DELAYS IN ITS PROGRAMS FOR TAX PROCESSING WAS CONSIDERED TO BE UNACCEPTABLE. ACCORDINGLY, IRS DECIDED TO SOLICIT BY TELEPHONE A TEMPORARY LEASE, THROUGH JUNE 30, 1974, FOR THREE OF THE SEVEN UNITS FROM WHATEVER SOURCE AVAILABLE TO AVOID ANY DELAY IN TAX PROCESSING DURING THE 1974 PEAK PROCESSING PERIOD. IN ADDITION, ON OCTOBER 10, 1973, IRS TERMINATED FOR DEFAULT ITS ORDER FOR A PARTICULAR UNIT WHICH HAD BEEN DELIVERED BY AMPEX AND HAD FAILED TO PASS INSTALLATION TESTING.

IT IS AMPEX'S POSITION THAT IRS SHOULD BE REQUIRED TO SATISFY ITS REQUIREMENTS FOR THIS EQUIPMENT FROM THE MANDATORY GSA REQUIREMENTS CONTRACT CURRENTLY IN EFFECT AND THAT ANY OTHER PROCUREMENT ACTION BE HALTED. IN ADDITION, AMPEX STATES THAT THERE HAS BEEN NO DELEGATION OF PROCUREMENT AUTHORITY BY GSA TO IRS FOR OBTAINING EQUIPMENT FROM COMPETITORS OF AMPEX. ALSO, AMPEX HAS PROTESTED THAT THE DEFAULT TERMINATION ACTION BY IRS WAS IMPROPER AND SHOULD BE RESCINDED.

DECISION

THE RECORD ESTABLISHES THAT IRS OBTAINED FROM GSA A DELEGATION OF PROCUREMENT AUTHORITY TO OBTAIN FROM ANY AVAILABLE SOURCE A TEMPORARY LEASE FOR THREE UNITS ORIGINALLY ORDERED FROM AMPEX. THE RECORD ALSO INDICATES THAT THE GSA CONTRACTING OFFICER DOES NOT REQUIRE AN AGENCY WHICH HAS TERMINATED AN ORDER FOR DEFAULT TO OBTAIN A DELEGATION OF AUTHORITY TO REPROCURE THE ITEM. ONCE IRS PLACED ITS ORDERS FOR THE SEVEN UNITS WITH AMPEX FOR ALL OF ITS REQUIREMENTS, ANY SUBSEQUENT ADDITIONAL PROCUREMENT ACTIONS WERE TAKEN TO INSURE THAT ITS REQUIREMENTS WOULD BE SATISFIED AND WAS A MATTER OF CONTRACT ADMINISTRATION. THE PROPRIETY OF A DEFAULT TERMINATION MUST BE RESOLVED BY THE CONTRACTING PARTIES PURSUANT TO ANY APPLICABLE CONTRACT PROVISION AND IS NOT A PROPER MATTER FOR PROTEST TO GENERAL ACCOUNTING OFFICE.