B-229501, Apr 20, 1988, 88-1 CPD ***, Office of General Counsel

B-229501, Apr 20, 1988, 88-1 CPD ***, Office of General Counsel

PROCUREMENT - Special Procurement - Methods/Categories - Computer equipment/services - Contract awards - Authority delegation DIGEST: Where no maximum ordering limitation or cost ceiling is contained in either a requirements contract for desktop microcomputer systems or the Delegation of Procurement Authority issued by the General Services Administration for the contract, allegation that orders under the contract for $650,000,000 are unauthorized is without merit.

The Honorable Tony P. Hall, House of Representatives:

This is in response to your letter of December 9, 1987, requesting that we investigate the issues raised by Update Corporation in a letter to your office concerning the Air Force's acquisition of desktop microcomputer systems under requirements contract No. F19630-86-D-0002 with Zenith Data Systems. The contract was awarded for a period of 12 months with options for 2 additional years following a fully competitive procurement.

Update's letter incorporated a letter received from CPT Corporation, which alleged that notwithstanding the contract's maximum ordering limitation of $345,000,000, the Air Force had placed orders for $650,000,000.

The Air Force has provided us with a report on this issue. The documents furnished with the report indicate that the Air Force, on June 6, 1985, submitted an Agency Procurement Request (APR) to the General Services Administration (GSA) requesting a Delegation of Procurement Authority (DPA) for the purchase of the computers. The original DPA issued by GSA on June 28, 1985, stated that the contract could not be used to acquire more than 60,000 systems. After a second APR on September 17, 1985, from the Air Force requesting authority to purchase 90,000 systems, GSA issued a modification to the DPA on October 10, 1985, which removed the 60,000 limit but did not include any other limit on the number of systems to be acquired. A final APR on February 11, 1986, requested a new modification to the DPA allowing the contract to include requirements from the Office of the Secretary of Defense and other Department of Defense installations. The APR stated the Air Force's estimate of 90,000 systems that would be ordered at an estimated cost of $345 million. The DPA issued by GSA, however, did not contain either of these estimates or otherwise limit the quantity of systems or cost of the contract.

Update's letter states that an alleged maximum dollar value of $345 million for the contract has been exceeded. As discussed above, the DPA has no dollar value limitation. Furthermore, our review of the contract with Zenith indicates that the contract itself also does not state a maximum ordering limitation, and does not contain a cost ceiling. fact, the contract at section H.26 provides that more than 90,000 systems could be ordered over the 3 year life of the contract. In addition, the record indicates, and our informal contact with GSA confirms, that GSA views the Air Force's actions here as consistent with the terms of the DPA.

Accordingly, we believe that Update's allegations are without merit.