Request for an Advance Decision

A Director of Procurement requested an advanced decision as to the propriety of purchasing certain items from the Army and Air Force Exchange Service (AAFES), a nonappropriated fund instrumentality. AAFES is capable of supplying through its regular supply channels health and comfort items for kits which are distributed to Korean soldiers attached to the Army. The items are assembled into kits in Korea. The Director stated that AAFES would be an ideal source of supply because of its ability to buy in large quantities and its established transportation and warehouse system in Korea. He proposed to initiate a Basic Ordering Agreement with AAFES. The Army would continue to assemble the individual items into kits. GAO has held that obtaining goods and services from a nonappropriated fund instrumentality is tantamount to obtaining them from nongovernmental, commercial sources. GAO did not believe a sole-source procurement could be justified under the facts presented. Other sources can supply, and are presently supplying, these items. The fact that a particular concern may be able to perform a contract with greater ease or at less cost than any other concern does not justify a non-competitive procurement to the exclusion of others. The Director's explanation was an inadequate basis for a procurement of the items from AAFES.