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B-161075, JAN. 8, 1968

B-161075 Jan 08, 1968
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CONTRACTS - FEDERAL SUPPLY SERVICE - HIGHER PRICED EQUIPMENT DECISION TO COVEX CORPORATION CONCERNING PURCHASE OF HIGHER PRICED TONER FOR COPY MACHINES THAN IS AVAILABLE UNDER MULTIPLE-AWARD FSS CONTRACTS. THE PURCHASE OF OTHER THAN THE LOWEST PRICED TONER ON THE FEDERAL SUPPLY SCHEDULE FOR USE IN COPY MACHINE WHILE THE AGENCY IS TESTING FOR COST- COMPARISON PURPOSES OF VARIOUS BRANDS OFFERED APPEARS JUSTIFIED UNDER PAR. 101-26.408-2. SINCE A NEW SPECIFICATION IS BEING DRAFTED. PURCHASE OF A HIGHER PRICED TONER IS NOT SUBJECT TO OBJECTION. TO COVEX CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 9. IN WHICH YOU CONTEND THAT THE SUCCESSFUL RESULTS OF TESTS CONDUCTED ON YOUR TONER BY THE PUBLIC HEALTH SERVICE HAVE NOT BEEN FORWARDED TO THE PROCUREMENT OFFICE.

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B-161075, JAN. 8, 1968

CONTRACTS - FEDERAL SUPPLY SERVICE - HIGHER PRICED EQUIPMENT DECISION TO COVEX CORPORATION CONCERNING PURCHASE OF HIGHER PRICED TONER FOR COPY MACHINES THAN IS AVAILABLE UNDER MULTIPLE-AWARD FSS CONTRACTS. THE PURCHASE OF OTHER THAN THE LOWEST PRICED TONER ON THE FEDERAL SUPPLY SCHEDULE FOR USE IN COPY MACHINE WHILE THE AGENCY IS TESTING FOR COST- COMPARISON PURPOSES OF VARIOUS BRANDS OFFERED APPEARS JUSTIFIED UNDER PAR. 101-26.408-2, F.P.M. REGS. ON THE BASIS OF TESTS OF TWO BRANDS THAT REVEAL A WIDE DIFFERENCE IN COST. SINCE A NEW SPECIFICATION IS BEING DRAFTED, AND IN VIEW OF THE TESTS, PURCHASE OF A HIGHER PRICED TONER IS NOT SUBJECT TO OBJECTION.

TO COVEX CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 9, 1967, IN WHICH YOU CONTEND THAT THE SUCCESSFUL RESULTS OF TESTS CONDUCTED ON YOUR TONER BY THE PUBLIC HEALTH SERVICE HAVE NOT BEEN FORWARDED TO THE PROCUREMENT OFFICE. AS A RESULT, YOU STATE THAT THE NATIONAL INSTITUTES OF HEALTH IS NOT PURCHASING THE LOWEST PRICED TONER AVAILABLE UNDER MULTIPLE-AWARD FEDERAL SUPPLY SCHEDULE CONTRACTS.

WE HAVE BEEN ADVISED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE THAT ON JUNE 16, 1967, THE DIVISION OF PROCUREMENT AND MATERIEL MANAGEMENT, OFFICE OF THE SURGEON GENERAL, PUBLIC HEALTH SERVICE (PHS), INITIATED A TESTING PROGRAM OF SEVERAL TONERS AVAILABLE ON MULTIPLE-AWARD FEDERAL SUPPLY SCHEDULE CONTRACTS. UNDER THIS PROGRAM, WHICH IS STILL IN PROGRESS, A NEWLY INSTALLED XEROX MODEL 914 COPIER IS BEING USED FOR THE TESTS UNDER CLOSELY CONTROLLED CONDITIONS. TEST OF THE TONERS IS BEING CONDUCTED UNDER NORMAL DAY-TO-DAY OPERATING CONDITIONS. ONE EMPLOYEE IS RESPONSIBLE FOR ASSURING THAT ONLY THE SPECIFIC TONER BEING TESTED IS USED; THAT THE REFLECTION EQUIPMENT AND DRUM ARE KEPT CLEAN; THAT THE SAME TYPE OF PAPER IS USED THROUGHOUT; AND THAT METER READINGS ARE TAKEN AND RECORDED PRIOR TO BEGINNING A TEST OF A DIFFERENT TONER.

PHS REPORTS THAT CLARITY AND NUMBER OF COPIES OBTAINED FROM 16 ONE QUARTER POUND PACKAGES (ONE CARTON) OF EACH TONER ARE THE PRINCIPAL ELEMENTS INVOLVED IN THE TESTS. IN ADDITION, THE EFFECT, IF ANY, OF THE VARIOUS TONERS ON THE EQUIPMENT, SUCH AS LEAKAGE OF TONER AND CONTAMINATION OF DRUMS, BELTS AND OTHER PARTS, IS NOTED.

PHS HAS, TO DATE, COMPLETED TESTS OF COVEX AND ANKOFAX TONERS. THE COVEX TEST WAS COMPLETED ON JULY 31, 1967. WE HAVE BEEN ADVISED THAT BOTH TONERS PROVIDED EXCELLENT COPIES DURING THE TESTS AND DID NOT HARM THE EQUIPMENT. EQUAL QUANTITIES OF COVEX AND ANKOFAX TONERS PROVIDED 27,021 AND 50,157 SATISFACTORY COPIES, RESPECTIVELY. FOR COPY-COST CALCULATION PURPOSES, PHS USED THE PUBLISHED SCHEDULE PRICES EFFECTIVE AS OF JULY 31, 1967, FOR 16 ONE-QUARTER POUND CONTAINERS (ONE CARTON) OF COVEX AND ANKOFAX TONERS OF $65.80 AND $68, RESPECTIVELY. THESE PRICES ARE BASED ON A SINGLE ORDER OF 42 CARTONS, THE AVERAGE MONTHLY TONER USAGE AT NATIONAL INSTITUTES OF HEALTH. CALCULATIONS REVEALED THAT THE COST PER COPY DURING THE TEST USING COVEX TONER WAS ?00243 WHILE THE COST PER COPY UNDER TEST CONDITIONS USING ANKOFAX TONER WAS ?001355. BASED ON THE ABOVE COSTS PER COPY, THE PRODUCTION OF 50,157 COPIES ON THE XEROX 914 COPIER USING COVEX TONER WOULD COST $121.88 COMPARED WITH AN ACTUAL COST OF $68 EXPERIENCED DURING THE TEST OF PRODUCING 50,127 COPIES USING ANKOFAX TONER.

PHS IS PRESENTLY TESTING A TONER DISTRIBUTED BY THE NASHUA CORPORATION AND INTENDS TO TEST XEROX TONER, THOUGH USERS OF THAT PRODUCT INDICATE THAT A MINIMUM OF 40,000 COPIES CAN BE PRODUCED ON THE XEROX MODEL 914 COPIER USING 16 ONE-QUARTER POUND PACKAGE OF XEROX TONER. PHS PLANS TO RUN A SECOND TEST OF THE COVEX PRODUCT BECAUSE OF THE GREAT VARIANCE BETWEEN THE TOTAL NUMBER OF COPIES PRODUCED BY EQUAL QUANTITIES OF COVEX AND ANKOFAX TONERS. THE TESTING PROGRAM OF VARIOUS TONERS AT PHS WILL BE CONTINUED UNTIL A NEED FORTESTING NO LONGER EXISTS.

THE ABOVE-MENTIONED COPY-COST COMPARISON OF COVEX AND ANKOFAX TONERS BASED ON RESULTS OBTAINED TO DATE DURING THE PHS TONER TEST PROGRAM APPEARS TO JUSTIFY THE PURCHASE BY NATIONAL INSTITUTES OF HEALTH OF OTHER THAN THE LOWEST PRICED TONER. PARAGRAPH 101-26.408-2 OF THE FEDERAL PROPERTY MANAGEMENT REGULATIONS PROVIDES IN PERTINENT PART AS FOLLOWS:

"EACH PURCHASE MADE FROM A MULTIPLE-AWARD SCHEDULE BY AGENCIES REQUIRED TO USE SUCH SCHEDULES SHALL BE MADE AT THE LOWEST DELIVERED PRICE AVAILABLE UNDER THAT SCHEDULE, UNLESS THE ORDERING AGENCY FULLY JUSTIFIES THE PURCHASE OF A HIGHER PRICED ITEM. * * *"

IT APPEARS THAT THE PURCHASE OF OTHER THAN THE LOWEST PRICED TONER IS JUSTIFIABLE UNDER THE ABOVE-CITED PARAGRAPH BASED ON COMPARATIVE PERFORMANCE OF COVEX AND ANKOFAX TONERS UNDER TEST CONDITIONS AND THE COMPARATIVE PRICES OF THE TWO COMMODITIES.

IN VIEW OF THE ABOVE, WE DO NOT THINK THAT THE ACTION TAKEN BY PHS IS SUBJECT TO QUESTION BY OUR OFFICE. WE HAVE BEEN ADVISED THAT THE GENERAL SERVICES ADMINISTRATION HAS DEVELOPED A DRAFT SPECIFICATION FOR A TONER WHICH WILL BE READY FOR COORDINATION WITH INDUSTRY EARLY IN 1968, AND THAT AN INTERIM SPECIFICATION WILL BE ISSUED AS SOON AS POSSIBLE THEREAFTER.

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