B-156023, JUL. 2, 1965

B-156023, JUL. 2, 1965

TO THE SECRETARY OF DEFENSE:

FORWARDED HEREWITH FOR CONSIDERATION IN YOUR DEPARTMENT ARE COPIES OF OUR LETTERS OF TODAY TO THE SECRETARY OF THE ARMY AND TO DAVID H. PEIREZ, ATTORNEY FOR HAMMARLUND MANUFACTURING COMPANY AND TRW ELECTRONIC COMPONENTS DIVISION OF THOMPSON RAMO WOOLDRIDGE, INC., CONCERNING A PROTEST AGAINST A SALE BY THE ARMY ELECTRONICS COMMAND, THROUGH THE BENDIX CORPORATION, OF CERTAIN SURPLUS SPECIAL TOOLING. ALSO ENCLOSED IS A COPY OF MR. PEIREZ'S LETTER OF FEBRUARY 8, 1965, STATING THE GROUNDS OF THE PROTEST.

AS STATED IN OUR LETTER TO THE SECRETARY OF THE ARMY, WE QUESTION WHETHER THE PROCEDURES PRESCRIBED AND FOLLOWED IN THIS CASE ARE ADEQUATE TO ASSURE THE BEST RETURN TO THE GOVERNMENT, AND WE SUGGEST THAT CONSIDERATION BE GIVEN TO APPROPRIATE REVISION OF THE PERTINENT PORTIONS OF THE ARMED SERVICES PROCUREMENT REGULATION SO THAT THE PARTY IN POSSESSION OF SUCH PROPERTY WOULD NORMALLY BE GIVEN AN OPPORTUNITY TO SUBMIT A BID OR OFFER THEREFOR.

ADDITIONALLY, WHILE THE DISPOSAL OF SURPLUS PROPERTY UNDER THE PROVISIONS OF ASPR SECTION 8 IS CURRENTLY AUTHORIZED, WE QUESTION WHETHER THE PROCEDURES DESIGNED FOR THE DISPOSITION OF CONTRACTOR INVENTORY UPON TERMINATION OF A CONTRACT, WHERE PROMPT SETTLEMENT OF TERMINATION CLAIMS MAY BE A FACTOR, ARE EQUALLY APPROPRIATE FOR THE DISPOSAL OF ALL GOVERNMENT-OWNED SURPLUS PROPERTY WHICH MAY BE IN THE POSSESSION OF CONTRACTORS OR SUBCONTRACTORS AS A RESULT OF COMPLETED CONTRACTS. YOU MAY THEREFORE WISH TO CONSIDER WHETHER DETERMINATIONS AS TO THE POTENTIAL UTILITY OF SUCH PROPERTY SHOULD PROPERLY BE BASED SOLELY UPON THE ADVICE OF THE PRIME CONTRACTOR, WHERE SOME OR ALL OF THE PROPERTY HAS BEEN USED BY AND IS IN THE POSSESSION OF SUBCONTRACTORS.