B-149733, OCT. 4, 1962

B-149733, OCT. 4, 1962

TO THE PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 30, 1962, FURNISHING A REPORT AS REQUESTED IN OUR LETTER TO YOU OF AUGUST 22, 1962, ON THE PROTEST MADE BY THE ATTORNEYS FOR MARSDEN, INC., WASHINGTON, D.C., AND THE INDEX SALES CORPORATION, CHICAGO, ILLINOIS, AGAINST THE AWARD OF ANY CONTRACT UNDER AN INVITATION FOR BIDS ISSUED ON AUGUST 10, 1962, BY THE GOVERNMENT PRINTING OFFICE (JACKET 653496 HEW-PHS-78), COVERING A PROPOSED PURCHASE OF 321,700 INDEX TAB DIVIDERS FOR LOOSELEAF BINDERS.

THE INVITATION WAS BASED UPON A REQUISITION RECEIVED ON AUGUST 2, 1962, FROM THE PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, SHOWING REQUIREMENT OF DELIVERY OF 321,700 INDEX TAB DIVIDERS TO VARIOUS DESTINATIONS AS PER SAMPLE OR EQUAL. THE SAMPLE CONSISTED OF A SET OF THREE DIP TYPE "KEYLOID" DIVIDERS AND THE REQUISITION INCLUDED A REQUIREMENT THAT THE TAB AND TAB EDGE EXTENDING ACROSS THE 8-INCH SIDE OF THE DIVIDER BE ACETATE REINFORCED ALONG THE COMPLETE EDGE, EQUAL TO SAMPLE. THE REQUISITION ALSO SPECIFIED THAT THE LETTERS "OP" BE PRINTED IN BLACK INK ON THE FACE OF THE BLUE TABS FOR 124,700 OF THE REQUISITIONED DIVIDERS.

MARSDEN, INC., IS THE GOVERNMENT REPRESENTATIVE FOR THE INDEX SALES CORPORATION, CHICAGO, ILLINOIS, WHICH CONCERN RECEIVED AN AWARD OF A CURRENT FEDERAL SUPPLY SCHEDULE "CALL" CONTRACT FOR DELIVERY OF PLASTIC LAMINATED REINFORCED INDEX TAB DIVIDERS TO BE IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION UU-I-00370 (GSA-FSS) OF DECEMBER 18, 1961. THE INTERIM FEDERAL SPECIFICATION PROVIDES FOR THE ALTERNATE USE OF THE DIP STRIP METHOD OR THE PLASTIC LAMINATED REINFORCED METHOD OF CONSTRUCTION. THE INTERIM FEDERAL SPECIFICATION ALSO SETS FORTH THAT "EACH TAB OF THE SAME OR DIFFERENT COLORS AND PRINTING, IS USED FOR A SPECIAL CAPTION * * * IN IDENTIFICATION, TECHNICAL AND PERFORMANCE MANUALS AND HANDBOOKS, COVERING REGULATIONS, INSTRUCTIONS, ETC., SUCH AS HOSPITAL CHARTS, SUBMARINE AND AIRCRAFT INSTRUCTIONS.'

UPON RECEIPT OF THE REQUISITION FROM THE PUBLIC HEALTH SERVICE THE GOVERNMENT PRINTING OFFICE VERBALLY REQUESTED ADVICE FROM THE PUBLIC HEALTH SERVICE AS TO WHETHER IT WOULD ACCEPT EITHER A DIP TYPE "KEYLOID" DIVIDER OR A PLASTIC LAMINATED REINFORCED TYPE OF DIVIDER. THE GOVERNMENT PRINTING OFFICE WAS ADVISED THAT THE DIVIDERS MUST BE THE SAME AS THE "KEYLOID" SAMPLE. THE INVITATION OF AUGUST 10, 1962, WAS ISSUED WITH THE UNDERSTANDING THAT A WRITTEN JUSTIFICATION FOR THE PURCHASE OF DIP TYPE INDEX TAB DIVIDERS WOULD BE FURNISHED. THE BID OPENING DATE HAS BEEN DELAYED PENDING OUR CONSIDERATION OF THE PROTEST MADE AGAINST THE ALLEGED RESTRICTIVE SPECIFICATIONS MADE A PART OF THE INVITATION.

ON AUGUST 15, 1962, THE PUBLIC HEALTH SERVICE FORWARDED TO THE GOVERNMENT PRINTING OFFICE A MEMORANDUM FROM THE EXECUTIVE OFFICER, DIVISION OF HOSPITALS, SETTING FORTH THE JUSTIFICATION FOR REQUISITIONING INDEX TAB DIVIDERS TO BE PRODUCED ONLY BY THE DIP STRIP METHOD. IT IS STATED IN THE MEMORANDUM THAT, PRIOR TO THE ADOPTION IN 1953 OF THE PRESENT PATIENT CHART TAB DIVIDER, A STUDY WAS CONDUCTED TO FIND A DIVIDER WHICH WOULD STAND UP UNDER THE CONSTANT USAGE TO WHICH CLINICAL FILES ARE SUBJECTED; THAT, AFTER CAREFUL STUDY OF ITS USAGE WITH THE HELP AND ADVICE FROM THE GOVERNMENT PRINTING OFFICE, THE PUBLIC HEALTH SERVICE DECIDED ON THE DIVIDER NOW IN USE; THAT THE PRESENT DIVIDER HAS A REINFORCED PLASTIC EDGE ALONG THE TABBED EDGE, THUS GIVING STRENGTH TO THE ENTIRE LOWER EDGE WHERE CONSIDERABLE WEAR IS EXPERIENCED; THAT THE DIVIDERS HAVE PROVED TO BE EMINENTLY SATISFACTORY DURING THE SEVERAL YEARS OF USE; AND THAT THEY WERE ORDERED THROUGH THE GOVERNMENT PRINTING OFFICE UNTIL THE ITEM WAS PLACED ON SCHEDULE THROUGH THE FACILITIES OF THE GENERAL SERVICES ADMINISTRATION. IT IS FURTHER STATED THAT THE ITEM IS NO LONGER ON THE GENERAL SERVICES ADMINISTRATION SCHEDULE. WITH REFERENCE TO THE PROBABILITY THAT THE COST OF PURCHASING THE DIP TYPE "KEYLOID" DIVIDERS WOULD BE CONSIDERABLY IN EXCESS OF PURCHASING THE PLASTIC LAMINATED REINFORCED TYPE, THE MEMORANDUM SETS FORTH THAT A COMPARISON OF COSTS IS ONLY ONE FIGURE AND DOES NOT REFLECT THE COST INVOLVED IN REPLACEMENT OF TORN, DOG-EARED GUIDES AND THE TIME WASTED BY PROFESSIONAL AND CLERICAL PERSONNEL IN REPAIRING OR REPLACING WORNOUT GUIDES.

IN A LETTER DATED AUGUST 6, 1962, TO THE GOVERNMENT PRINTING OFFICE, MR. W. J. MARSDEN, PRESIDENT OF MARSDEN, INC., PROTESTED THE RESTRICTIVE CHARACTER OF THE REQUISITION AND INVITED ATTENTION TO THE FACT THAT ON THREE PREVIOUS REQUISITIONS BY OTHER AGENCIES THE GOVERNMENT PRINTING OFFICE WAS SUCCESSFUL IN HAVING THE REQUISITIONS CHANGED TO PERMIT THE ACCEPTANCE OF INDEX TAB DIVIDERS PRODUCED EITHER BY THE DIP STRIP METHOD OR THE PLASTIC LAMINATED REINFORCED METHOD OF CONSTRUCTION. HIS LETTER ALLEGES THAT BEFORE ISSUING INTERIM FEDERAL SPECIFICATION UU-I-00370 (GSA- FSS) OF DECEMBER 18, 1961, THE GENERAL SERVICES ADMINISTRATION MADE TEST OF THE TEAR STRENGTH AND OTHER FEATURES OF LAMINATED AND DIP TABS; AND THAT THE RESULTS OF SUCH TESTS WERE VERY SIMILAR TO THE RESULTS OF TESTS "WHICH WE OURSELVES MADE AND WHICH PROVED THAT LAMINATED TABS INCREASED THE TEAR RESISTANCE ABOUT 66 2/3 PERCENT, WHEREAS THE INCREASED TEAR RESISTANCE ON THE DIP TAB WAS ONLY 25 PERCENT.' CONCERNING PULL TESTS MADE ON THE HOLES OF THE FOLDOVER BINDING MARGIN, THE INCREASED TEAR RESISTANCE FOR THE LAMINATED TAB WAS STATED TO BE 100 PERCENT AS COMPARED TO THE INCREASED TEAR RESISTANCE OF ONLY 30 PERCENT FOR THE DIP TABS.

THE ATTORNEYS FOR MARSDEN, INC., AND THE INDEX SALES CORPORATION HAVE QUESTIONED THE PROCEDURE ADOPTED BY THE PUBLIC HEALTH SERVICE ON THE GROUND THAT PRINTING OF THE LETTERS OF "OP" ON A PORTION OF THE REQUISITIONED INDEX TAB DIVIDERS APPEARED TO HAVE BEEN REQUIRED AS A MEANS OF OBTAINING SUPPLIES OF A PREFERRED TYPE WHICH COULD NOT OTHERWISE BE PROCURED BY DIRECT PURCHASE UNDER ESTABLISHED COMPETITIVE BIDDING PROCEDURES. HOWEVER, THE PUBLIC PRINTER IS AUTHORIZED BY SECTION 225 AND 227 OF TITLE 44, U.S.C. TO PURCHASE VARIOUS PAPER STOCK ITEMS COMMONLY USED BY TWO OR MORE GOVERNMENT AGENCIES APPARENTLY WITHOUT REGARD TO ANY REQUIREMENT FOR PRINTING ON THE SUPPLIES DESIRED BY THE REQUISITIONING AGENCY, AND YOUR LETTER INDICATES THAT THE GOVERNMENT PRINTING OFFICE WOULD NOT UNDERTAKE TO MAKE A CONTRACT FOR THE BENEFIT OF ANOTHER AGENCY WHICH WOULD BE CLEARLY IN VIOLATION OF THE ADVERTISING STATUTES OR OF THE FEDERAL PROCUREMENT REGULATIONS MADE APPLICABLE FOR THE PROCUREMENT OF SUPPLIES FOR THE VARIOUS EXECUTIVE AGENCIES OF THE GOVERNMENT.

SECTION 253 (A) OF TITLE 41, U.S.C. PROVIDES THAT WHENEVER ADVERTISING IS REQUIRED THE SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FULL AND FREE COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF TYPES OF PROPERTY AND SERVICES NECESSARY TO MEET THE REQUIREMENTS OF THE AGENCY CONCERNED. CONSISTENT WITH SUCH PROVISION OF LAW AND 40 U.S.C. 487, THE GENERAL SERVICES ADMINISTRATION WAS FROM TIME TO TIME PROMULGATED FORMAL SPECIFICATIONS OF BOTH A FINAL AND TEMPORARY NATURE WITH A VIEW TOWARD ELIMINATING ANY UNNECESSARY TECHNICAL REQUIREMENT FOR SUPPLIES OF A TYPE WHICH ARE MANUFACTURED BY VARIOUS CONCERNS BUT WHICH MAY DIFFER IN CERTAIN MATERIAL RESPECTS. ALSO, SECTION 1-1.307-1 (B) OF THE FEDERAL PROCUREMENT REGULATIONS, WHICH WERE ISSUED BY THE GENERAL SERVICES ADMINISTRATION, PROVIDES THAT:

"PURCHASE DESCRIPTIONS USED IN COMPETITIVE PROCUREMENTS SHALL NOT SPECIFY A PRODUCT HAVING FEATURES WHICH ARE PECULIAR TO THE PRODUCT OF ONE MANUFACTURER, PRODUCER, OR DISTRIBUTOR, AND THEREBY PRECLUDE CONSIDERATION OF A PRODUCT OF ANOTHER COMPANY, UNLESS IT HAS BEEN DETERMINED THAT THOSE PARTICULAR FEATURES ARE ESSENTIAL TO THE GOVERNMENT'S REQUIREMENTS, AND THAT SIMILAR PRODUCTS OF OTHER COMPANIES LACKING THOSE FEATURES WOULD NOT MEET THE MINIMUM REQUIREMENTS FOR THE ITEM.'

THE FEDERAL PROCUREMENT REGULATIONS PROVIDE THAT FEDERAL SPECIFICATIONS SHALL BE USED BY ALL EXECUTIVE AGENCIES IN THE PROCUREMENT OF SUPPLIES AND SERVICES COVERED BY SUCH SPECIFICATIONS. HOWEVER, THERE ARE STATED EXCEPTIONS TO THE MANDATORY USE OF THE SPECIFICATIONS AND WITH RESPECT TO INTERIM FEDERAL SPECIFICATIONS, IT IS PROVIDED IN SECTION 1-1.305-4 OF THE REGULATIONS THAT:

"INTERIM FEDERAL SPECIFICATIONS ARE FOR OPTIONAL USE. ALL AGENCIES ARE URGED TO MAKE MAXIMUM USE OF INTERIM FEDERAL SPECIFICATIONS AND TO SUBMIT STATEMENTS OF SUGGESTED CHANGES TO THE ASSIGNED AGENCY FOR CONSIDERATION IN FURTHER DEVELOPMENT OF THE SPECIFICATIONS FOR PROMULGATION AS FEDERAL SPECIFICATIONS.'

WE HAVE RECEIVED AN ADDITIONAL PROTEST FROM THE ATTORNEYS FOR MARSDEN, INC., AND THE INDEX SALES CORPORATION CONCERNING SUBSEQUENT INVITATIONS FOR BIDS ISSUED BY THE GOVERNMENT PRINTING OFFICE BASED UPON REQUISITIONS FOR INDEX TAB DIVIDERS PRODUCED BY THE DIP STRIP METHOD OF CONSTRUCTION. WE ARE ADVISED BY ONE OF YOUR REPRESENTATIVES THAT ACTION ON THOSE PROPOSED PROCUREMENTS WILL BE HELD IN ABEYANCE UNTIL AFTER WE HAVE RENDERED A DECISION ON THE INVITATION OF AUGUST 10, 1962.

HAVING REGARD FOR THE ABOVE-CITED LAW AND REGULATIONS IT IS CLEAR THAT AN AGENCY MAY PURCHASE A SPECIFIC PRODUCT WHEN IT DETERMINES THAT THE FEATURES OF THAT PRODUCT ARE ESSENTIAL TO ITS REQUIREMENTS. THEREFORE, THE SOLE QUESTION FOR DETERMINATION IS WHETHER THE PUBLIC HEALTH SERVICE HAS JUSTIFIED ITS ACTION IN DETERMINING THAT ONLY THE DIP TYPE "KEYLOID" DIVIDER WILL MEET ITS NEEDS. THIS OFFICE HAS NO WAY OF DETERMINING, EXCEPT FROM ADMINISTRATIVE REPORTS, WHETHER PARTICULAR FEATURES OF A MANUFACTURED ARTICLE, SUCH AS INVOLVED HERE, ARE OR ARE NOT REASONABLY NECESSARY FOR THE NEEDS TO BE FILLED. WE FEEL THAT THE PUBLIC HEALTH SERVICE HAS FURNISHED NO SUBSTANTIAL FACTS AS A BASIS FOR THE DETERMINATION THAT ONLY THE DIP TYPE DIVIDERS ARE CAPABLE OF SATISFYING THE REQUIREMENTS. THE JUSTIFICATION FOR PURCHASING ONLY DIP TYPE DIVIDERS IS BASED GENERALLY ON THE FACT THAT THE DIVIDERS HAVE IN THE PAST PROVEN TO BE EMINENTLY SATISFACTORY. INSOFAR AS THE RECORD SHOWS THE PUBLIC HEALTH SERVICE HAS NEVER USED THE LAMINATED TYPE OF DIVIDER EVEN FOR THE PURPOSE OF COMPARING THE TWO TYPES. ON THE OTHER HAND, THE GENERAL SERVICES ADMINISTRATION, THE AGENCY WHICH IS RESPONSIBLE FOR DRAFTING FEDERAL SPECIFICATIONS FOR USE BY ALL EXECUTIVE AGENCIES, HAS ADVISED US INFORMALLY THAT TESTS HAVE SHOWN THAT THE PLASTIC LAMINATED REINFORCED TYPE OF TAB DIVIDER WILL MEET THE ESSENTIAL NEEDS OF EXECUTIVE AGENCIES FOR ALL INTENDED PURPOSES AND THAT THERE IS NO BASIS FOR ANY SUPPOSITION THAT A DIVIDER OF SUCH CONSTRUCTION IS NOT EQUAL TO ONE PRODUCED BY THE DIP STRIP METHOD.

ON THE BASIS OF THE RECORD BEFORE US WE BELIEVE THAT AN ADVERTISEMENT RESTRICTING A PROCUREMENT OF INDEX TAB DIVIDERS TO THE "KEYLOID" TYPE WOULD BE UNDULY RESTRICTIVE OF COMPETITION AND, THEREFORE, IMPROPER.

ACCORDINGLY, WE ARE OF THE OPINION THAT THE RESTRICTIVE ADVERTISEMENT OF AUGUST 10, 1962, SHOULD BE CANCELED AND THAT SIMILAR ACTION SHOULD BE TAKEN WITH REGARD TO THE OTHER REQUISITIONS WHICH SPECIFY ONLY THE DIP STRIP METHOD OF MANUFACTURING INDEX TAB DIVIDERS FOR LOOSELEAF BINDERS.