B-120045, AUGUST 18, 1954, 34 COMP. GEN. 74

B-120045, AUGUST 18, 1954, 34 COMP. GEN. 74

CONTRACTS - AWARDS - NEGOTIATIONS - ARMED SERVICES PROCUREMENT ACT, 1947 - EMERGENCIES - SOLE SOURCE PROCUREMENT A NEGOTIATED CONTRACT FOR RADIOSONDES WHICH WAS ENTERED INTO ON FEBRUARY 26, 1954, WITH CONTRACTOR AS SOLE SOURCE OF SUPPLY, WHEN THE NECESSITY FOR SUCH PROCUREMENT WAS KNOWN IN NOVEMBER, 1953, WAS AN IMPROPER PROCUREMENT IN THE ABSENCE OF A SHOWING WHY OTHER SOURCES OF SUPPLY COULD NOT HAVE BEEN CONTRACTED IN THE INTERVENING TIME, BUT INASMUCH AS THE CONTRACT WAS AWARDED PURSUANT TO THE NEGOTIATION WITHOUT ADVERTISING PROVISIONS OF SECTION 2 (C) (1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, THE AWARD CONSUMMATED A VALID AND BINDING CONTRACT.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF THE ARMY, AUGUST 18, 1954:

REFERENCE IS MADE TO LETTER DATED JULY 19, 1954, WITH ENCLOSURES, FROM THE DEPUTY UNDER SECRETARY OF THE ARMY, FURNISHING THE REPORT REQUESTED BY THIS OFFICE RELATIVE TO THE PROTEST BY GAROD RADIO CORPORATION AGAINST THE AWARD OF A CONTRACT MADE BY THE SIGNAL CORPS SUPPLY AGENCY TO THE STANDARD COIL PRODUCTS COMPANY, INC., FOR 20,623 RADIOSONDES AN/AMT-3.

THE REPORT SHOWS THAT THE CONTRACT WAS ENTERED INTO PURSUANT TO SECTION 2 (C) (1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 21, ON THE BASIS OF THE DETERMINATION BY THE CONTRACTING OFFICER, APPROVED BY THE SIGNAL CORPS FACILITIES ALLOCATION COMMITTEE ON FEBRUARY 26, 1954, THAT THE PROCUREMENT SHOULD BE NEGOTIATED WITH THE STANDARD COIL PRODUCTS COMPANY AS THE SOLE SOURCE OF SUPPLY SINCE THERE WAS INSUFFICIENT LEAD TIME FOR ANOTHER SOURCE TO MEET DELIVERY REQUIREMENTS.

IT APPEARS THAT, PRIOR TO THE PROCUREMENT HERE INVOLVED, THERE WAS NEGOTIATED A CONTRACT DATED APRIL 3, 1953, WITH STANDARD COIL FOR THE FURNISHING OF 18,019 RADIOSONDES AT A UNIT PRICE OF $106.22, FOR DELIVERY AT THE RATE OF 1,400 UNITS A MONTH BEGINNING JULY 1953, AND EXTENDING THROUGH JULY 1954.

ON NOVEMBER 10, 1953, THE AIR FORCE REQUESTED AN ADDITIONAL 20,623 RADIOSONDES TO FULFILL A REQUIREMENT FOR 2,500 UNITS A MONTH BEGINNING MAY 1954, IT BEING REPRESENTED THAT THE REQUIREMENT WAS URGENT. BUT IT WAS NOT UNTIL FEBRUARY 25, 1954, THAT THE CONTRACTING OFFICER RECOMMENDED, AND THE REVIEWING COMMITTEE APPROVED, THE NEGOTIATION OF A CONTRACT FOR THE ADDITIONAL QUANTITY OF 20,623 UNITS AS A SOLE SOURCE PROCUREMENT. NEGOTIATIONS WITH STANDARD COIL FOR FURNISHING THE ADDITIONAL UNITS WERE BEGUN ON MARCH 5, 1954, AND THE CONTRACTOR'S PROPOSAL TO FURNISH THE UNITS AT A PRICE OF $98.66 EACH WAS ACCEPTED BY THE CONTRACTING OFFICER ON APRIL 9, 1954, THE RESULTING AWARD BEING EFFECTED BY A SUPPLEMENTAL AGREEMENT TO THE EXISTING CONTRACT WITH STANDARD COIL DATED APRIL 3, 1953.

THE DEPUTY UNDER SECRETARY, UPON REVIEW OF THE RECORD, CONCLUDES THAT GAROD HAS A JUSTIFIABLE BASIS FOR CRITICIZING THE PROCUREMENT. POINTING TO THE CONSIDERABLE AMOUNT OF TIME EXPENDED IN ADMINISTRATIVE ACTION BETWEEN NOVEMBER 1953 AND FEBRUARY 25, 1954, WHEN THE CONTRACTING OFFICER MADE HIS SOLE SOURCE DETERMINATION, AND THE ABSENCE OF A SHOWING AS TO WHY OTHER SOURCES OF SUPPLY COULD NOT HAVE BEEN CONTACTED DURING THAT TIME, THE DEPUTY UNDER SECRETARY STATES HE DOES NOT CONCUR IN THE DECISION OF THE CONTRACTING OFFICER AND THE REVIEWING COMMITTEE THAT THE METHOD OF PROCUREMENT WAS PROPER UNDER THE CIRCUMSTANCES.

I AM IN FULL ACCORD WITH THE VIEW OF THE DEPUTY UNDER SECRETARY AS TO THE IMPROPRIETY OF THE PROCUREMENT. BUT, SINCE THE CONTRACT WAS AWARDED PURSUANT TO SECTION 2 (C) (1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, WHICH AUTHORIZES THE NEGOTIATION OF CONTRACTS WITHOUT ADVERTISING, I RELUCTANTLY AGREE WITH THE DEPUTY UNDER SECRETARY THAT THE AWARD MADE TO STANDARD COIL ON APRIL 9, 1954, CONSUMMATED A VALID AND BINDING CONTRACT. THUS, THE CONTRACT MAY ONLY BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT IN ACCORDANCE WITH ITS "TERMINATION CLAUSE.' IN THAT CONNECTION, IT IS STATED IN THE LETTER OF JULY 19 THAT YOUR DEPARTMENT PROPOSES, SUBJECT TO THE APPROVAL OF THIS OFFICE, TO TERMINATE THE SUPPLEMENTAL AGREEMENT IN A MANNER WHICH WOULD MINIMIZE TERMINATION COSTS, TO ENTER INTO A REPLACEMENT CONTRACT AFTER FULL COMPETITION AMONG ALL KNOWN SOURCES, AND TO UTILIZE FORMAL ADVERTISING FOR THE PROCUREMENT.

YOU ARE ADVISED THAT IF YOUR DEPARTMENT SHOULD DETERMINE THAT TERMINATION OF THE SUPPLEMENTAL AGREEMENT IS IN THE BEST INTEREST OF THE GOVERNMENT, NO OBJECTION THERETO WILL BE INTERPOSED BY THIS OFFICE, THAT BEING A MATTER PRIMARILY FOR ADMINISTRATIVE DECISION. 18 COMP. GEN. 826; 20 COMP. GEN. 358.