B-135556, JUL. 16, 1958

B-135556, JUL. 16, 1958

TO HONORABLE RAYMOND BLATTENBERGER, PUBLIC PRINTER, GOVERNMENT PRINTING OFFICE:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1958, AS SUPPLEMENTED BY REPRESENTATIVES OF YOUR OFFICE IN CONFERENCES HELD ON APRIL 17 AND JULY 11, 1958, WITH REPRESENTATIVES OF OUR OFFICE CONCERNING THE LEGALITY OF A PROPOSED PRINTING PROCUREMENT PROGRAM WHICH YOU PLAN TO INITIATE IN THE INTEREST OF REDUCING THE STAFF WORK AND ELAPSED TIME CURRENTLY NEEDED TO CONTRACT FOR MANY OF YOUR PRINTING AND BINDING REQUIREMENTS.

IN YOUR LETTER YOU STATE THAT FOR SOME TIME DURING WORLD WAR II AND FOR A PERIOD DURING THE KOREAN CONFLICT, THE GOVERNMENT PRINTING OFFICE CONTRACTED FOR PRINTING AND BINDING REQUIREMENTS ON A NEGOTIATED BASIS. THE MAJORITY OF THESE CONTRACTS WERE NEGOTIATED THROUGH THE USE OF ,STANDARD RATE CONTRACTS" UNDER THEN EXISTING LEGAL AUTHORITY AND ALLOWED THE PLACEMENT OF ORDERS WITH A MINIMUM OF STAFF WORK AND ELAPSED TIME. SINCE YOU NOW BELIEVE THAT NO LEGAL AUTHORITY EXISTS FOR SUCH NEGOTIATION YOU PROPOSE TO ESTABLISH CONTRACTS SIMILAR IN DESIGN AND OPERATION TO THE "STANDARD RATE CONTRACTS," BUT BASED ON COMPETITIVE BIDS. THIS WOULD BE ACCOMPLISHED BY SENDING TO A LIST OF PROSPECTIVE BIDDERS A SCHEDULE OF "BASIC" OR "FUNDAMENTAL" PRICES FOR EACH OPERATION. THE BIDDERS WOULD BE ASKED TO BID AGAINST THESE "BASIC" PRICES BY SUBMITTING A PERCENTAGE FIGURE TO BE ADDED TO OR DEDUCTED FROM THE BASIC PRICES IN THEIR ENTIRETY; THE BIDDER COULD ALSO CHOOSE TO BID THE "BASIC" PRICE WITHOUT CHANGE. ALL NORMAL PROCEDURES AND SAFEGUARDS FOR RECEIVING, RECORDING, OPENING, AND ABSTRACTING OF COMPETITIVE BIDS WOULD BE USED. IN THE EVENT TIE BIDS WERE RECEIVED YOU STATE THAT THEY WOULD BE LISTED INITIALLY BY THE DRAWING OF LOTS; HOWEVER, AWARDS TO THE LISTED TIE BIDDERS WOULD BE OFFERED IN ROTATION; FIRST JOB TO BE OFFERED TO THE FIRST-LISTED TIE BIDDER; SECOND JOB TO BE OFFERED TO THE SECOND-LISTED TIE BIDDER, ETC., RETURNING TO THE FIRST-LISTED TIE BIDDER AFTER ALL THE TIME BIDDERS HAVE RECEIVED AN OFFER. YOU STATE THAT IF THE PLAN PROPOSED IS APPROVED IT WILL BE PUT INTO OPERATION ON AN EXPERIMENTAL BASIS COVERING SMALL REQUIREMENTS OF $2,500 OR LESS UNDER CONTRACTS OF A RELATIVELY SHORT TERM OF SIX MONTHS.

THE DRAFT OF THE PROPOSED TERMS AND CONDITIONS OF THE CONTRACT WHICH ACCOMPANIED YOUR LETTER PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"PLACEMENT OF WORK: IN PLACING WORK UNDER THIS CONTRACT, THE GOVERNMENT PRINTING OFFICE WILL FIRST COMMUNICATE WITH A CONTRACTOR TO DETERMINE WHETHER OR NOT AT THAT TIME HE IS WILLING TO ACCEPT ONE OR MORE DESCRIBED ORDERS FOR SPECIFIED QUANTITIES UNDER THE TERMS OF THIS CONTRACT. EACH JOB WILL BE OFFERED TO THE LOW BIDDER FIRST, THE NEXT LOW BIDDER SECOND, AND SO ON UNTIL THE JOB HAS BEEN ACCEPTED. FREIGHT WILL BE A FACTOR IN DETERMINING THE LOW BIDDER. JOBS WILL BE OFFERED TO TIE BIDDERS, IF THEIR NAMES ARE REACHED IN THE LISTING, FIRST TO THE BIDDER WHOSE NAME WAS DRAWN FIRST, THE NEXT JOB TO THE BIDDER WHOSE NAME WAS DRAWN SECOND, AND SO ON IN ROTATION.

"THE CONTRACTOR MAY ACCEPT OR DECLINE WITHOUT AFFECTING HIS STATUS UNDER THE CONTRACT. HOWEVER, CONTINUED DECLINATION BY A CONTRACTOR MAY BE CAUSE FOR REMOVAL FROM THE LISTING, ACCORDING TO THE JUDGMENT OF THE GOVERNMENT PRINTING OFFICE. WHEN THE CONTRACTOR ACCEPTS, A FORMAL PURCHASE ORDER WILL BE ISSUED. EACH CONTRACTOR, UPON DECLINATION OF AN OFFER, SHALL CONFIRM SUCH DECLINATION IN WRITING. THE ONLY VALID REASONS SHALL BE INABILITY TO MANUFACTURE AND/OR INABILITY TO MEET THE DELIVERY SCHEDULE.

"QUANTITY.--- THE QUANTITY TO BE PROCURED UNDER THIS CONTRACT IS UNCERTAIN, THEREFORE NO DEFINITE COMMITMENTS WILL BE MADE TO ANY CONTRACTOR. THE AMOUNT OF SUCH WORK NECESSARILY DEPENDS UPON FACTORS THAT CANNOT BE ASCERTAINED IN ADVANCE. THE UNITED STATES GOVERNMENT WILL NOT BE LIABLE ON ANY CONTRACT OTHER THAN FOR THE AMOUNT ACTUALLY ORDERED.'

WE SEE NO LEGAL OBJECTIONS TO THE SOLICITATION OF BIDS IN THE MANNER PROPOSED SINCE IT APPEARS THAT SUCH METHOD AFFORDS PROBABLE BIDDERS AN OPPORTUNITY TO BID AND GIVES THE GOVERNMENT THE ADVANTAGE OF ALL AVAILABLE COMPETITION AS REQUIRED BY LAW. THE PROCEDURE DOES NOT, HOWEVER, CONTEMPLATE THE AWARD OF A CONTRACT TO THE LOWEST RESPONSIBLE BIDDER AFTER RECEIPT OF THE BIDS. CONSEQUENTLY, WE BELIEVE THE PROCEDURE WOULD DEFEAT THE ESTABLISHED RULE THAT GOVERNMENT PURCHASES MUST BE MADE FROM THE LOWEST RESPONSIBLE BIDDER. FURTHERMORE, SINCE IT APPEARS THAT MULTIPLE AWARDS ARE CONTEMPLATED WE BELIEVE THAT THE PROCEDURE PROPOSED WOULD BE OBJECTIONABLE ON THE GROUNDS THAT THE AWARDS WOULD NOT EFFECT BINDING CONTRACTS.

ON THE OTHER HAND WE BELIEVE THAT IF THE PROPOSED PROCEDURE WERE AMENDED IN THE FOLLOWING MANNER THE OBJECTIONABLE FEATURES WOULD BE REMOVED. SUGGEST THAT THE CLAUSES ENTITLED ,PLACEMENT OF WORK" AND "QUANTITY" BE ELIMINATED AND THAT THERE BE SUBSTITUTED THE FOLLOWING: ,MULTIPLE AWARDS: THE CONTRACTS THAT WILL BE AWARDED AS THE RESULT OF THIS INVITATION ARE TO COVER THE NEEDS OF THE GOVERNMENT PRINTING OFFICE FOR THE PERIOD FROM ---- --------- TO --------------. THE GOVERNMENT PRINTING OFFICE AGREES TO PLACE AN ORDER FOR ALL ITS REQUIREMENTS WITH THE LOW BIDDER AND THE LOW BIDDER WILL BE OBLIGATED TO DELIVER ALL SUPPLIES OF THE KIND CONTRACTED FOR EXCEPT IN THOSE INSTANCES WHERE THE LOW BIDDER IS UNABLE TO MANUFACTURE AND MEET THE DELIVERY SCHEDULE. FREIGHT WILL BE A FACTOR IN DETERMINING THE LOW BIDDER. IT IS IMPOSSIBLE TO DETERMINE THE EXACT REQUIREMENTS AND NEEDS OF THE GOVERNMENT RELATING TO THESE SUPPLIES; THEREFORE, THE OBLIGATION OF THE GOVERNMENT PRINTING OFFICE IN THE CASE OF OTHER THAN THE LOWEST BID WILL BE LIMITED TO THE QUANTITIES NEEDED IN EXCESS OF QUANTITIES ACCEPTED BY THE LOWEST BIDDER.

PLACEMENT OF WORK: IN PLACING WORK UNDER THESE CONTRACTS, THE GOVERNMENT PRINTING OFFICE WILL FIRST COMMUNICATE WITH THE LOW BIDDER TO DETERMINE WHETHER OR NOT AT THAT TIME HE CAN ACCEPT ONE OR MORE ORDERS FOR SPECIFIED QUANTITIES FOR DELIVERY WITHIN THE TIME REQUIRED BY THE GOVERNMENT. THE GOVERNMENT WILL BE OBLIGATED TO OFFER EACH JOB TO THE LOW BIDDER FIRST, THE NEXT LOW BIDDER SECOND, AND SO ON UNTIL THE JOB HAS BEEN ACCEPTED. THE LOW BIDDER AND EACH SUCCESSIVE NEXT LOW BIDDER SHALL BE OBLIGATED TO ACCEPT THE JOB EXCEPT WHEN HE IS UNABLE TO MANUFACTURE AND MEET THE DELIVERY SCHEDULE. JOBS WILL BE OFFERED TO TIE BIDDERS, IF THEIR NAMES ARE REACHED IN THE LISTING, FIRST TO THE BIDDER WHOSE NAME WAS DRAWN FIRST, THE NEXT JOB TO THE BIDDER WHOSE NAME WAS DRAWN SECOND, AND SO ON IN ROTATION. WHEN THE CONTRACTOR ACCEPTS, A FORMAL PURCHASE ORDER WILL BE ISSUED. EACH CONTRACTOR, UPON DECLINATION OF AN OFFER, SHALL CONFIRM SUCH DECLINATION IN WRITING. THE ONLY VALID REASON FOR DECLINING AN ORDER SHALL BE INABILITY TO MANUFACTURE AND MEET THE DELIVERY SCHEDULE.'

UNDER THE AMENDED CLAUSE THERE WOULD BE CREATED AN OBLIGATION ON THE PART OF THE GOVERNMENT TO PURCHASE ALL OF ITS NEEDS FOR A SPECIFIED ITEM OR ITEMS FROM THE LOW BIDDER AND THE LOW BIDDER WOULD BE OBLIGATED TO FURNISH ALL THE SUPPLIES NEEDED AND ORDERED BY THE GOVERNMENT EXCEPT IN THOSE CASES WHERE THE CONTRACTOR WOULD NOT BE IN A POSITION TO MANUFACTURE AND MEET THE DELIVERY SCHEDULE. UPON DECLINATION OF THE LOW BIDDER TO ACCEPT AN ORDER THE GOVERNMENT WOULD THEN BE OBLIGATED TO ORDER FROM THE NEXT LOW BIDDER WHO WOULD BE OBLIGATED TO DELIVER IF HE COULD MANUFACTURE AND MEET THE DELIVERY REQUIREMENTS OF THE GOVERNMENT AND THIS PROCEDURE WOULD CONTINUE UNTIL THE ORDER WAS ACCEPTED.

WE AGREE, AS YOU INDICATE, THAT THE PROCEDURE SHOULD BE INSTITUTED ON A TRIAL BASIS SUBJECT TO LATER REVIEW SINCE CERTAIN PROBLEMS MAY ARISE WHICH ARE NOT NOW APPARENT.