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GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS - WITHDRAWN BECAUSE RESOLICITATION CANNOT BE EFFECTIVELY IMPLEMENTED BEFORE EXPIRATION OF CONTRACT RECOMMENDED FOR RESOLICITATION IN PRIOR DECISION AND NORMAL PROCUREMENT CYCLE ON UPGRADED SPECIFICATION IS ABOUT TO BEGIN. HEW IS ADVISED THAT PRIOR RECOMMENDATION NEED NOT BE FOLLOWED. 53 COMP. IS DIRECTED AGAINST THE CORRECTIVE ACTION WHICH WE RECOMMENDED. THE TERMINATION WAS TO BE EFFECTED UNDER THE PARAGRAPH OF THE RFP ENTITLED "DISCONTINUANCE OF USE AND RENTAL" WHICH ALLOWS THE GOVERNMENT TO TERMINATE UPON 30 DAYS NOTICE AND FULFILL ITS OBLIGATION UNDER THE CONTRACT BY PAYMENT OF THE RENTAL FOR THE 30-DAY PERIOD. THE ORIGINAL CONTRACT WAS AWARDED ON JUNE 22.

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B-179047, DEC 16, 1974, 54 COMP GEN 483

GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS - WITHDRAWN BECAUSE RESOLICITATION CANNOT BE EFFECTIVELY IMPLEMENTED BEFORE EXPIRATION OF CONTRACT RECOMMENDED FOR RESOLICITATION IN PRIOR DECISION AND NORMAL PROCUREMENT CYCLE ON UPGRADED SPECIFICATION IS ABOUT TO BEGIN, HEW IS ADVISED THAT PRIOR RECOMMENDATION NEED NOT BE FOLLOWED. 53 COMP. GEN. 895, MODIFIED.

IN THE MATTER OF LINOLEX SYSTEMS, INC., DECEMBER 16, 1974:

THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) HAS REQUESTED RECONSIDERATION OF OUR DECISION OF JUNE 4, 1974, 53 COMP. GEN. 895, IN THIS MATTER WHEREIN WE RECOMMENDED RESOLICITATION OF REQUEST FOR PROPOSALS (RFP) NO. 42-73-HEW-OS FOR INSTALLATION AND MAINTENANCE OF A TERMINAL DATA COLLECTION SERVICE BECAUSE OF CERTAIN DEFECTS IN THE EVALUATION OF OFFERS UNDER THE RFP.

THE REQUEST FOR RECONSIDERATION DOES NOT CHALLENGE THE CORRECTNESS OF OUR DECISION OF JUNE 4, 1974, BUT IS DIRECTED AGAINST THE CORRECTIVE ACTION WHICH WE RECOMMENDED. OUR DECISION RECOMMENDED THAT THE REQUIREMENT BE RESOLICITED AND AFTER THE RESOLICITATION, THE CONTRACT AWARDED IMPROPERLY BE TERMINATED AND A NEW CONTRACT AWARDED. THE TERMINATION WAS TO BE EFFECTED UNDER THE PARAGRAPH OF THE RFP ENTITLED "DISCONTINUANCE OF USE AND RENTAL" WHICH ALLOWS THE GOVERNMENT TO TERMINATE UPON 30 DAYS NOTICE AND FULFILL ITS OBLIGATION UNDER THE CONTRACT BY PAYMENT OF THE RENTAL FOR THE 30-DAY PERIOD, THEREBY LIMITING THE COSTS OF TERMINATION USUALLY INCURRED UNDER THE STANDARD TERMINATION FOR CONVENIENCE CLAUSE.

THE ORIGINAL CONTRACT WAS AWARDED ON JUNE 22, 1973, FOR 1 YEAR WITH A 1- YEAR OPTION. ON JANUARY 30, 1974, A CONTRACT AMENDMENT WAS ISSUED WHICH EXTENDED THE CONTRACT FOR AN ADDITIONAL 6 MONTHS TO ASSURE A SYSTEMS LIFE OF 2 YEARS. THIS WAS MADE NECESSARY BECAUSE OF THE 60-DAY DELAY IN INSTALLATION OF THE TERMINALS CONTAINED IN THE DELIVERY SCHEDULE OF THE RFP. WE NOTE THAT THIS ACTION CURED THE DEFECT POINTED OUT IN OUR DECISION OF JUNE 4, 1974, REGARDING THE 36-DAY RENTAL CREDIT OFFERED BY SYCOR, INC., THE SUCCESSFUL OFFEROR UNDER THE RFP. UNDER THE ORIGINAL CONTRACT PERIOD HEW WOULD NOT HAVE RECEIVED THE BENEFIT OF THIS CREDIT NOTWITHSTANDING THE FACT THAT IT WAS EMPLOYED IN THE EVALUATION OF OFFERS. THIS WAS BECAUSE NO EQUIPMENT WOULD HAVE BEEN IN USE FOR 24 MONTHS PRIOR TO THE EXPIRATION OF THE CONTRACT.

ONE OF THE GROUNDS UPON WHICH HEW HAS REQUESTED RECONSIDERATION, AS STATED IN ITS LETTER OF JULY 22, 1974, IS THAT IT WILL TAKE APPROXIMATELY 15 MONTHS TO RESOLICIT AND TO INSTALL THE NEW CONTRACTOR'S EQUIPMENT (IF SYCOR IS NOT THE SUCCESSFUL OFFEROR). THIS WOULD ONLY SHORTEN THE EXISTING CONTRACT BY 2 MONTHS WHILE CAUSING DISRUPTION OF THE SYSTEM AND FORFEITING THE 36-DAY RENTAL CREDIT FOR A NUMBER OF THE TERMINALS. SECONDLY, BASED ON THE EXPERIENCE GAINED UNDER THE FIRST YEAR OF OPERATION OF THE SYSTEM, HEW DESIRES TO MAKE CERTAIN CHANGES IN THE SPECIFICATIONS TO UPGRADE THE EQUIPMENT. THEREFORE BY RESOLICITING ON THE ORIGINAL SPECIFICATION, HEW WILL BE PROCURING SYSTEMS WHICH WILL NOT MEET ITS NEEDS.

BECAUSE OF THE DELAYS OCCASIONED IN THE DEVELOPMENT OF THIS MATTER AS A RESULT OF A REQUEST BY LINOLEX FOR EXTENSION OF THE TIME ALLOWED FOR THE SUBMISSION OF ITS COMMENTS ON THE REQUEST FOR RECONSIDERATION AND VARIOUS CONFERENCES AT HEW WITH LINOLEX IN AN ATTEMPT TO REACH A COMPROMISE AGREEMENT, SO MUCH TIME HAS PASSED THAT ABOUT 1 YEAR REMAINS IN THE CONTRACT WITH SYCOR. THEREFORE, USING HEW'S TIME FRAME FOR A REPROCUREMENT ACTION AND PHASING IN OF A NEW CONTRACTOR'S EQUIPMENT, THE PRESENT CONTRACT WOULD EXPIRE BEFORE THE RESOLICITATION WOULD BE EFFECTIVELY IMPLEMENTED.

IN ANY EVENT, WE HAVE BEEN INFORMALLY ADVISED BY HEW THAT THE SOLICITATION FOR THE CONTRACT TO FOLLOW THE PRESENT CONTRACT EXPIRATION WILL BE ISSUED AROUND JANUARY 1, 1975, WITH AWARD CONTEMPLATED BY MARCH 1, 1975.

IN VIEW OF THE FACT THAT THE NORMAL REPROCUREMENT CYCLE IS ABOUT TO BEGIN AND DUE TO THE TIME CONSTRAINTS WHICH MAKE OUR INITIAL RECOMMENDATION IMPOSSIBLE TO MEET, WE HEREBY WITHDRAW THE RECOMMENDATION FOR RESOLICITATION OF THE PRESENT CONTRACT MADE IN OUR JUNE 4 DECISION, 53 COMP. GEN. 895, AND ARE SO ADVISING THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91- 510, 31 U.S.C. SEC. 1172 (1970).

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