B-197868 L/M, JUL 30, 1980

B-197868 L/M: Jul 30, 1980

Additional Materials:

Contact:

Julie Matta
(202) 512-4023
MattaJ@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WAS FOR THE STUDY AND A REPORT ON ITS RESULTS. SHERIDAN MAY HAVE BEEN PAID MORE THAN THE SERVICES WERE WORTH. THAT BIAS MAY HAVE BEEN A FACTOR IN CEQ'S CHOICE OF THE CONTRACTOR. A COPY OF WHICH IS ENCLOSED. SHERIDAN WITHOUT COMPETITION WAS IMPROPER. THE PURCHASE ORDERS WERE ISSUED PURSUANT TO SECTION 203(E) OF THE ENVIRONMENTAL QUALITY IMPROVEMENT ACT OF 1970 (ACT). ITS MINIMUM NEEDS CAN BE SATISFIED ONLY BY SERVICES WHICH ARE UNIQUE. OR WHERE TIME IS OF THE ESSENCE AND ONLY ONE KNOWN SOURCE CAN MEET THE GOVERNMENT'S NEEDS WITHIN THE REQUIRED TIME FRAME. SHERIDAN IS A SKILLED RESEARCHER. WE HAVE STATED THAT A DESIRED SOURCE'S SUPERIOR QUALIFICATIONS AND EXPERTISE DO NOT ALONE JUSTIFY A SOLE SOURCE PROCUREMENT.

B-197868 L/M, JUL 30, 1980

PRECIS-UNAVAILABLE

JESSE HELMS, UNITED STATES SENATE:

WE REFER TO YOUR LETTERS TO OUR OFFICE DATED FEBRUARY 19, AND APRIL 7, 1980, ENCLOSING CORRESPONDENCE BETWEEN THE AMERICAN MOTORCYCLIST ASSOCIATION AND THE COUNCIL ON ENVIRONMENTAL QUALITY (CEQ). YOU REQUEST THAT WE REVIEW THE ISSUANCE OF TWO SOLE-SOURCE PURCHASE ORDERS BY THE CEQ TO MR. DAVID SHERIDAN IN CONNECTION WITH A STUDY ON "OFF ROAD VEHICLES ON PUBLIC LANDS." THE FIRST ORDER, FOR $10,000, WAS FOR THE STUDY AND A REPORT ON ITS RESULTS; THE SECOND PURCHASE ORDER, FOR $6,500, REQUIRED THAT THE CONTRACTOR REVISE THE STUDY BY TAKING INTO ACCOUNT PUBLIC AND CEQ COMMENT ON THE ORIGINAL REPORT.

YOU SUGGEST THAT THE SELECTION OF MR. SHERIDAN VIOLATED THE PROCUREMENT STATUTES AND REGULATIONS REQUIRING COMPETITION FOR GOVERNMENT CONTRACTS; THAT MR. SHERIDAN MAY HAVE BEEN PAID MORE THAN THE SERVICES WERE WORTH; AND THAT BIAS MAY HAVE BEEN A FACTOR IN CEQ'S CHOICE OF THE CONTRACTOR.

TO FACILITATE OUR REVIEW, WE REQUESTED THAT CEQ SUBMIT A REPORT ON THIS MATTER, A COPY OF WHICH IS ENCLOSED. ON THE BASIS OF THAT REPORT AND THE MATERIAL PROVIDED WITH YOUR LETTERS, WE BELIEVE THAT THE ISSUANCE OF THE ORDER TO MR. SHERIDAN WITHOUT COMPETITION WAS IMPROPER.

THE PURCHASE ORDERS WERE ISSUED PURSUANT TO SECTION 203(E) OF THE ENVIRONMENTAL QUALITY IMPROVEMENT ACT OF 1970 (ACT), 42 U.S.C. SEC. 4372(E) (1976), WHICH AUTHORIZES THE DIRECTOR OF THE OFFICE OF ENVIRONMENTAL QUALITY (WHICH PROVIDES THE CEQ'S PROFESSIONAL AND ADMINISTRATIVE STAFF AND SUPPORT) "TO CONTRACT *** WITH INDIVIDUALS WITHOUT REGARD TO SECTION 529 OF TITLE 31 AND SECTION 5 OF TITLE 41 IN CARRYING OUT HIS FUNCTIONS." 31 U.S.C. SEC. 529 ESTABLISHES A PROHIBITION AGAINST THE ADVANCE OF PUBLIC MONEY. 41 U.S.C. SEC. 5 REQUIRES A GOVERNMENT AGENCY TO CONDUCT ITS PROCUREMENTS BY MEANS OF FORMAL ADVERTISING WITH LIMITED EXCEPTIONS.

REGARDING CEQ'S FAILURE TO COMPETE THE REQUIREMENT, 41 U.S.C. SEC. 260 PROVIDES THAT ANY LAW WHICH AUTHORIZES AN EXECUTIVE AGENCY TO PROCURE PROPERTY OR SERVICES WITHOUT REGARD TO 41 U.S.C. SEC. 5 SHALL BE CONSTRUED TO AUTHORIZE A PROCUREMENT BY NEGOTIATION UNDER 41 U.S.C. SEC. 252(C)(15), ONE OF 15 EXCEPTIONS TO THE REQUIREMENT FOR FORMAL ADVERTISING. HOWEVER, THE STATUTORY AUTHORITY TO NEGOTIATE A CONTRACT DOES NOT ITSELF ALSO CONFER AUTHORITY ON THE AGENCY TO PROCURE ITS REQUIREMENTS ON A SOLE- SOURCE BASIS. FEDERAL JUDICIAL CENTER, 58 COMP.GEN. 350 (1979), 79-1 CPD 206; SEE 51 COMP.GEN. 57, 61 (1971). IN THIS RESPECT, OUR REVIEW OF THE LEGISLATIVE HISTORY OF THE ENVIRONMENTAL QUALITY IMPROVEMENT ACT OF 1970 FAILS TO INDICATE THAT CONGRESS INTENDED TO EXEMPT CEQ FROM THE REQUIREMENTS FOR COMPETITIVE NEGOTIATION.

NONETHELESS, OUR OFFICE HAS RECOGNIZED THAT AN AGENCY MAY MAKE A NON COMPETITIVE AWARD WHERE, FOR EXAMPLE, ITS MINIMUM NEEDS CAN BE SATISFIED ONLY BY SERVICES WHICH ARE UNIQUE, OR WHERE TIME IS OF THE ESSENCE AND ONLY ONE KNOWN SOURCE CAN MEET THE GOVERNMENT'S NEEDS WITHIN THE REQUIRED TIME FRAME. SEE DIE MESH CORPORATION, B-190421, JULY 14, 1978, 78-2 CPD 36. SUCH A JUSTIFICATION DOES NOT APPEAR TO BE PRESENT IN THIS CASE. FOR EXAMPLE, THE CEQ REPORT SIMPLY STATES THAT MR. SHERIDAN IS A SKILLED RESEARCHER, WRITER AND EDITOR WITH "IMPRESSIVE EXPERIENCE WITH ENERGY, LAND MANAGEMENT AND SCIENTIFIC ISSUES ***. BECAUSE OF HIS FAMILIARITY WITH FEDERAL AGENCIES AND LAND MANAGEMENT ISSUES AND HIS SKILL AT TECHNICAL RESEARCH AND WRITING, THE CEQ NEGOTIATED WITH MR. SHERIDAN." THE REPORT ALSO JUSTIFIES MR. SHERIDAN'S QUALIFICATIONS BECAUSE HE HAD ASSISTED THIS OFFICE ON VARIOUS AUDIT REPORTS (AS A CONSULTANT ON THE PAYROLL) DEALING WITH ENERGY AND RELATED DISCIPLINES. WE HAVE STATED THAT A DESIRED SOURCE'S SUPERIOR QUALIFICATIONS AND EXPERTISE DO NOT ALONE JUSTIFY A SOLE SOURCE PROCUREMENT, SINCE THEY DO NOT NECESSARILY PRECLUDE THE EXISTENCE OF OTHER QUALIFIED SOURCES WHICH WERE NOT SOLICITED WHICH COULD HAVE SATISFIED THE GOVERNMENT'S NEEDS. LEO KANNER ASSOCIATES, B-182340, APRIL 4, 1975, 75-1 CPD 205.

WE THEREFORE CONCLUDE THAT THE INFORMATION BEFORE US DOES NOT PROVIDE AN ADEQUATE SOLE-SOURCE JUSTIFICATION, I.E., THE CEQ SHOULD HAVE OBTAINED ITS NEEDS THROUGH THE USE OF COMPETITIVE NEGOTIATION PROCEDURES. NONETHELESS, THESE CONTRACTS HAVE BEEN FULLY PERFORMED AND THE GOVERNMENT HAS RECEIVED THE BENEFIT OF THE CONTRACTOR'S EFFORTS. ALSO IT APPEARS THAT THE CONTRACTOR ACCEPTED THE AWARD IN GOOD FAITH. WE THEREFORE DO NOT BELIEVE THAT ANY REMEDIAL ACTION WITH RESPECT TO THESE CONTRACTS IS APPROPRIATE AT THIS TIME.

YOU HAVE ALSO RAISED A QUESTION WITH RESPECT TO THE CONTRACT PRICE AND THE LIMITATION OF 31 U.S.C. SEC. 529. THE STATUTE IS INTENDED TO PROHIBIT PAYING CONTRACTORS FOR SERVICES WHICH HAVE NOT BEEN RECEIVED TO AVOID THE POSSIBILITY OF GOVERNMENT LOSS IN THE EVENT THE CONTRACTOR, AFTER RECEIPT OF FULL PAYMENT, FAILS TO PERFORM ITS CONTRACT OBLIGATIONS. 57 COMP.GEN. 25 (1977), 77-2 CPD 319. IT DOES NOT DEAL WITH THE REASONABLENESS OF THE PRICE AGREED TO BY THE PARTIES FOR EFFORTS REQUIRED UNDER THE CONTRACT, WHICH IS FOR DETERMINATION BY THE CONTRACTING OFFICER PRIOR TO AWARD. THIS RESPECT, WE HAVE NO INFORMATION UPON WHICH TO MAKE A JUDGMENT AS TO THE VALUE OF THE SERVICES RENDERED.

WITH RESPECT TO THE ISSUE OF MR. SHERIDAN'S OBJECTIVITY, WE NOTE THAT IN ITS REPORT ON THE MATTER CEQ STATES THAT MR. SHERIDAN "HAD NO PREDISPOSITION ON THE ISSUES"; THAT HE HAD LITTLE PRIOR CONTACT WITH THE SUBJECT OF OFF-ROAD VEHICLES; AND THAT THE CEQ DID NOT GIVE ANY DIRECTIVES TO MR. SHERIDAN REGARDING POINTS OR CONCLUSIONS TO BE MADE IN THE REPORT. CEQ ALSO POINTS OUT THAT WHEN CEQ CIRCULATED THE INITIAL STUDY, COMMENTS BY THE AMERICAN MOTORCYCLIST ASSOCIATION WERE SOLICITED AND CONSIDERED. ON THIS RECORD, WE HAVE NO BASIS TO CONCLUDE THAT MR. SHERIDAN WAS LESS THAN OBJECTIVE ON THE ISSUE OF OFF-ROAD VEHICLES.

WE TRUST THAT OUR LETTER IS RESPONSIVE TO YOUR REQUEST.