B-210490, FEB 7, 1983

B-210490: Feb 7, 1983

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SINCE THERE IS NO EVIDENCE THAT THE AGENCY HAD ACTUAL KNOWLEDGE THAT ANOTHER SOURCE WOULD BE LESS COSTLY. THE ADMINISTRATOR OF GENERAL SERVICES IS AUTHORIZED TO TAKE THIS CONTRACTING APPROACH WHEN HE DETERMINES THAT SO DOING IS ADVANTAGEOUS TO THE GOVERNMENT IN TERMS OF ECONOMY. WE HAVE BEEN INFORMALLY ADVISED THAT THE FBI IS A NON-MANDATORY USER OF THE FEDERAL SUPPLY SCHEDULE FOR ELECTRON MICROSCOPES. GSA'S REGULATIONS STATE THAT SUCH AN AGENCY IS ENCOURAGED TO USE SCHEDULE CONTRACTS AS A PRIMARY SOURCE OF SUPPLY. WHICH OUR OFFICE WILL NOT QUESTION ABSENT A CLEAR SHOWING OF ABUSE OF DISCRETION. WHICH WAS CANCELED BASICALLY DUE TO THE IMMINENT EXPIRATION OF FUNDING. WE POINT OUT THAT THE CANCELLATION OF A SOLICITATION IS PROPER WHERE THE LOSS OF FUNDING IS IMMINENT.

B-210490, FEB 7, 1983

DIGEST: EVEN THOUGH CONTRACTING AGENCY HAD ISSUED AN RFP FOR AN ELECTRON MICROSCOPE, WHICH IT THEN CANCELED BEFORE NEGOTIATIONS BEGAN DUE TO AN IMMINENT LACK OF FUNDING, GAO DOES NOT OBJECT TO THE AGENCY'S SUBSEQUENT DECISION TO PURCHASE THE ITEM FROM A CONTRACTOR ON A NON MANDATORY FEDERAL SUPPLY SCHEDULE, RATHER THAN ISSUE ANOTHER COMPETITIVE SOLICITATION, SINCE THERE IS NO EVIDENCE THAT THE AGENCY HAD ACTUAL KNOWLEDGE THAT ANOTHER SOURCE WOULD BE LESS COSTLY, OR OTHERWISE ABUSED ITS DISCRETION.

AMRAY INC.:

AMRAY INC. PROTESTS THE FEDERAL BUREAU OF INVESTIGATION'S (FBI) PURCHASE OF AN ELECTRON MICROSCOPE FROM A FEDERAL SUPPLY SCHEDULE CONTRACTOR UNDER A REQUIREMENTS CONTRACT WITH THE GENERAL SERVICES ADMINISTRATION (GSA) THAT PERMITS, BUT DOES NOT MANDATE, THE FBI TO PLACE PURCHASE ORDERS WITH THE CONTRACTOR. AMRAY ALLEGES THAT THE FBI ORIGINALLY HAD ISSUED A REQUEST FOR PROPOSALS WHICH INCLUDED THE REQUIREMENT FOR THE ELECTRON MICROSCOPE AND WHICH, AMRAY HAD COMPLAINED, ESTABLISHED UNDULY RESTRICTIVE AND OTHERWISE IMPROPER SPECIFICATIONS. AMRAY STATES THAT THE FBI CANCELED THE SOLICITATION BECAUSE IT LACKED SUFFICIENT TIME TO CONDUCT NEGOTIATIONS AND TO MAKE AN AWARD BEFORE THE END OF FISCAL YEAR 1982 (WHEN THE AVAILABILITY OF FUNDS FOR THE CONTRACT PRESUMABLY WOULD EXPIRE). AMRAY COMPLAINS THAT THE FBI SUBSEQUENTLY REFUSED TO NEGOTIATE WITH THE FIRM, AND INSTEAD PLACED A PURCHASE ORDER WITH THE SCHEDULE CONTRACTOR.

WE SUMMARILY DENY THE PROTEST.

GSA ENTERS INTO REQUIREMENTS CONTRACTS FOR ITEMS COMMONLY USED BY THE GOVERNMENT AND LISTS THE CONTRACTORS ON FEDERAL SUPPLY SCHEDULES. FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR) SEC. 101-26.402 (PUBLISHED IN 41 C.F.R. SEC. 101-26.402 (1982)). THE CONTRACTS AND THE SCHEDULES SPECIFY WHICH AGENCIES MUST ISSUE DELIVERY ORDERS TO CONTRACTORS LISTED ON A PARTICULAR SCHEDULE (MANDATORY USER AGENCIES) AND WHICH AGENCIES MAY DO SO (NON-MANDATORY USERS). THE ADMINISTRATOR OF GENERAL SERVICES IS AUTHORIZED TO TAKE THIS CONTRACTING APPROACH WHEN HE DETERMINES THAT SO DOING IS ADVANTAGEOUS TO THE GOVERNMENT IN TERMS OF ECONOMY, EFFICIENCY, OR SERVICE. 40 U.S.C. SEC. 481(A) (SUPP. IV 1980).

WE HAVE BEEN INFORMALLY ADVISED THAT THE FBI IS A NON-MANDATORY USER OF THE FEDERAL SUPPLY SCHEDULE FOR ELECTRON MICROSCOPES. GSA'S REGULATIONS STATE THAT SUCH AN AGENCY IS ENCOURAGED TO USE SCHEDULE CONTRACTS AS A PRIMARY SOURCE OF SUPPLY, EXCEPT WHERE THE AGENCY HAS "ACTUAL KNOWLEDGE" THAT IT CAN PROCURE THE ITEM AT A PRICE MORE ADVANTAGEOUS TO THE GOVERNMENT, AFTER ALLOWING FOR THE BURDENS AND COST OF A NEW PROCUREMENT. FPMR SEC. 101-26.401-5(B).

IN LIGHT OF THIS, WE VIEW THE DECISION WHETHER TO PLACE AN ORDER WITH A NON-MANDATORY SCHEDULE CONTRACTOR, OR TO PROCEED WITH A SOLICITATION, AS A BUSINESS JUDGMENT FOR THE CONTRACTING OFFICER, WHICH OUR OFFICE WILL NOT QUESTION ABSENT A CLEAR SHOWING OF ABUSE OF DISCRETION. SEE FIRE APPARATUS SERVICE, B-192370, AUGUST 22, 1979, 79-2 CPD 142. AN ABUSE OF DISCRETION MIGHT EXIST, FOR EXAMPLE, WHERE THE AGENCY PURCHASES FROM A SCHEDULE CONTRACTOR EVEN THOUGH THE AGENCY KNOWS IT CAN PROCURE THE ITEM AT A LOWER OVERALL COST. THE MERE FACT, HOWEVER, THAT THE FBI HAD INITIATED A COMPETITIVE PROCUREMENT, WHICH WAS CANCELED BASICALLY DUE TO THE IMMINENT EXPIRATION OF FUNDING, PROVIDES NO BASIS FOR THIS OFFICE TO FIND THAT THE CONTRACTING OFFICER SUBSEQUENTLY ABUSED HIS DISCRETION BY UTILIZING THE FEDERAL SUPPLY SCHEDULE AS AUTHORIZED BY GSA. IN THIS REGARD, WE POINT OUT THAT THE CANCELLATION OF A SOLICITATION IS PROPER WHERE THE LOSS OF FUNDING IS IMMINENT. SEE A.R.F.PRODUCTS, INC., 56 COMP.GEN. 201 (1976), 76-2 CPD 541; WHAT-MAC CONTRACTORS, INC., B-190241, MARCH 3, 1978, 78-1 CPD 164.

THE PROTEST IS DENIED.