B-206961(1),L/M, JUL 19, 1982, OFFICE OF GENERAL COUNSEL

B-206961(1),L/M: Jul 19, 1982

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WE ARE CONCERNED ABOUT THE LANGUAGE IN SECTION 52.214-10(B)(2). THE PROPOSED LANGUAGE IS TROUBLESOME BECAUSE IT MAY BE INTERPRETED TO MEAN THAT AWARD NEED NOT BE M DE TO THE LOWEST. WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE DIRECTOR. WE ALSO NOTE THAT WHILE THE AUDIT CLAUSE IS TO BE INSERTED IN CONTRACTS EXPECTED TO EXCEED $100. WE HAVE NO FURTHER COMMENTS TO OFFER.

B-206961(1),L/M, JUL 19, 1982, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

MR. WILLIAM J. MARAIST, OFFICE OF MANAGEMENT AND BUDGET:

BY LETTER DATED MARCH 24, 1982, YOU REQUESTED OUR COMMENTS ON PROPOSED FEDERAL ACQUISITION REGULATION (FAR) SECTION 14.201, FORMAL ADVERTISING- PREPARATION OF INVITATIONS FOR BIDS, AND SUBPART 47.3, TRANSPORTATION IN SUPPLY CONTRACTS. WE SUBMIT THE FOLLOWING COMMENTS.

WE NOTE AN INCONSISTENCY IN SECTION 14.201-6(1). THAT SECTION PRESENTLY BOTH ALLOWS AND REQUIRES USE OF A CLAUSE ENTITLED CONTRACT AWARD - FORMAL ADVERTISING - CONSTRUCTION IN ALL INVITATIONS FOR BIDS FOR CONSTRUCTION WORK NOT EXPECTED TO EXCEED $10,000. SECTION 52.214 18, WHICH SETS FORTH THE CLAUSE, CONTAINS THE SAME INCONSISTENCY.

WE ARE CONCERNED ABOUT THE LANGUAGE IN SECTION 52.214-10(B)(2). THAT SECTION PRESCRIBES A STANDARD CONTRACT AWARD CLAUSE TO BE INSERTED IN ALL INVITATIONS FOR BIDS EXCEPT THOSE FOR CONSTUCTION WORK. THE CLAUSE PROVIDES IN PART THAT:

OTHER THAN THE LOWEST BID ***." THE PROPOSED LANGUAGE IS TROUBLESOME BECAUSE IT MAY BE INTERPRETED TO MEAN THAT AWARD NEED NOT BE M DE TO THE LOWEST, RESPONSIVE, RESPONSIBLE BIDDER. THE CURRENT AWARD OF CONTRACT CLAUSE IN STANDARD FORM 33A DOES NOT INCLUDE THIS PHRASE. NOR DOES A SIMILAR CLAUSE, SET FORTH AT FAR SEC. 52.214-19, PERTAINING TO CONSTRUCTION CONTRACTS. WE RECOMMEND THAT THIS PHRASE BE ELIMINATED FROM FAR SEC. 52.214-10(B)(2).

WE NOTE THAT THE CLAUSE SET FORTH IN FAR SEC. 52.214-26, WHICH ALLOWS A CONTRACTING OFFICER TO AUDIT COST OR PRICING DATA SUBMITTED IN CONNECTION WITH MODIFICATIONS TO CERTAIN CONTRACTS AWARDED BY FORMAL ADVERTISING, LIMITS THE RIGHT OF THIS OFFICE TO AUDIT SUCH DATA TO INSTANCES IN WHICH MODIFICATIONS EXCEED $100,000. THE CURRENT PROVISIONS OF THE DEFENSE ACQUISITION REGULATION (DAR) AND THE FEDERAL PROCUREMENT REGULATIONS (FPR) CONTAIN THE SAME LIMITATION. SEE DAR SEC. 7-104.41 AND FPR SEC. 1-3.814- 2. WE BELIEVE THAT THIS OFFICE'S AUTHORITY TO VERIFY COST AND PRICING DATA INVOLVING MODIFICATIONS TO FORMALLY ADVERTISED CONTRACTS SHOULD BE COMMENSURATE WITH THAT OF THE AGENCIES. THUS, WE RECOMMEND THAT THE LIMITATION BE REMOVED FROM THE FAR. WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE DIRECTOR, DEFENSE ACQUISITION REGULATORY COUNCIL, AND THE DIRECTOR, FEDERAL PROCUREMENT REGULATIONS DIRECTORATE.

WE ALSO NOTE THAT WHILE THE AUDIT CLAUSE IS TO BE INSERTED IN CONTRACTS EXPECTED TO EXCEED $100,000, THE PRICE ADJUSTMENT CLAUSE AT FPR SEC. 52.214-27 USES THE MORE CURRENT $500,000 THRESHOLD. WE RECOMMEND THAT THE CURRENT THRESHOLD BE INCLUDED IN THE INSTRUCTIONS RELATING TO THE AUDIT CLAUSE.

WE DISAGREE WITH THE DECISION NOT TO INCLUDE A STANDARDIZED ADDITIVE OR DEDUCTIVE ITEMS CLAUSE IN THE FAR, SUCH AS THAT FOUND IN DAR SEC. 7 2003.28. IN THE PAST THE LACK STANDARDIZATION BETWEEN THE DAR AND FPR RESULTED IN INCONSISTENCIES AMONG THE AGENCIES IN DEALING WITH THIS PROBLEM. SEE H. M. BYARS CONSTRUCTION COMPANY, 54 COMP.GEN. 320 (1974), 74-2 CPD 233.

WE HAVE NO FURTHER COMMENTS TO OFFER.