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SECRETARY: REFERENCE IS MADE TO THE LETTERS OF JUNE 27. A COPY OF OUR DECISION ON THE MATTER IS ENCLOSED. PREPARED BY THE SAN ANTONIO AIR MATERIEL AREA INDICATES THAT ITEM 1 OF THIS PROCUREMENT IS APPARENTLY A COMMERCIAL PRODUCT. SPECIAL INFORMATION AND INSTRUCTION" PROVISIONS OF THE INVITATION PROVIDES THAT LIQUID NITROGEN REJECTED UNDER THE ITEM 2 SPECIFICATION MAY BE USED TO SATISFY ITEM 1 REQUIREMENTS PROVIDED THAT THE SPECIFICATIONS FOR ITEM 1 ARE MET OR EXCEEDED. THIS WOULD INDICATE THAT THE REQUIREMENTS UNDER ITEM 1 ARE NOT AS STRINGENT AS THE REQUIREMENTS UNDER ITEM 2 AND THAT THERE WILL BE NO COMMINGLING OF ITEMS. THE CONTENTION THAT A NUMBER OF NEW FACILITIES ARE BEING CONSTRUCTED IN THE AREA OF THE LANGLEY RESEARCH CENTER WHICH WILL BE ABLE TO PRODUCE ITEM 1 HAS NOT BEEN REFUTED.

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B-164525, FEB. 17, 1969

TO MR. SECRETARY:

REFERENCE IS MADE TO THE LETTERS OF JUNE 27, 1968, JULY 17, 1968, AND JANUARY 7, 1969, AFSPPCA, FURNISHING OUR OFFICE WITH REPORTS REGARDING THE PROTEST BY BURDETT OXYGEN COMPANY AGAINST THE MULTI-YEAR AWARD OF A CONTRACT UNDER AN INVITATION ISSUED BY KELLY AIR FORCE BASE, TEXAS, FOR THE PROCUREMENT OF PROPELLANT PRESSURIZING AGENT NITROGEN. A COPY OF OUR DECISION ON THE MATTER IS ENCLOSED.

A REVIEW OF THE REPORT OF NOVEMBER 1, 1968, PREPARED BY THE SAN ANTONIO AIR MATERIEL AREA INDICATES THAT ITEM 1 OF THIS PROCUREMENT IS APPARENTLY A COMMERCIAL PRODUCT. PART XVIII OF THE ,SPECIAL INFORMATION AND INSTRUCTION" PROVISIONS OF THE INVITATION PROVIDES THAT LIQUID NITROGEN REJECTED UNDER THE ITEM 2 SPECIFICATION MAY BE USED TO SATISFY ITEM 1 REQUIREMENTS PROVIDED THAT THE SPECIFICATIONS FOR ITEM 1 ARE MET OR EXCEEDED. THIS WOULD INDICATE THAT THE REQUIREMENTS UNDER ITEM 1 ARE NOT AS STRINGENT AS THE REQUIREMENTS UNDER ITEM 2 AND THAT THERE WILL BE NO COMMINGLING OF ITEMS. THE CONTENTION THAT A NUMBER OF NEW FACILITIES ARE BEING CONSTRUCTED IN THE AREA OF THE LANGLEY RESEARCH CENTER WHICH WILL BE ABLE TO PRODUCE ITEM 1 HAS NOT BEEN REFUTED. THEREFORE, IT SEEMS REASONABLE TO ASSUME THAT THE COST OF THIS ITEM MAY SUBSTANTIALLY DECLINE.

WHILE WE DO NOT HAVE SUFFICIENT INFORMATION TO CONCLUDE THAT THE MANUFACTURERS OF ITEM 1 WILL BE ABLE TO PRODUCE ITEM 2, IT IS INTERESTING TO NOTE THAT ALL OF THE BIDDERS QUOTED THE SAME PER TON PRICES FOR ITEMS 1 AND 2. IN THESE CIRCUMSTANCES, AS INDICATED IN OUR DECISION ON THE PROTEST, WE HAVE SOME QUESTION WHETHER AN ALL OR NONE PROCUREMENT OF BOTH ITEMS WAS THE MOST PRACTICABLE FORM OF PROCUREMENT.

IN VIEW OF THE ABOVE WE SUGGEST THAT A STUDY BE MADE TO DETERMINE IF IT MIGHT BE IN THE GOVERNMENT'S BEST INTERESTS NOT TO TAKE THE SECOND AND THIRD PROGRAM YEARS OF THIS PROCUREMENT AND TO READVERTISE FOR THESE REQUIREMENTS. THIS STUDY SHOULD ALSO INCLUDE CONSIDERATION WHETHER IT MIGHT BE IN THE GOVERNMENT'S BEST INTEREST NOT TO EXERCISE THE OPTION.

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