GENERAL SERVICES ADMINISTRATION - USE OF "RENTAL OF SPACE" FUNDS FOR
LUMP-SUM PAYMENTS FOR INITIAL ALTERATIONS TO LEASED PREMISES.:
THE FORMER ADMINISTRATOR OF GENERAL SERVICES HAS REQUESTED OUR
DECISION ON THE PROPRIETY OF THE GENERAL SERVICES ADMINISTRATION (GSA)
MAKING LUMP-SUM PAYMENTS FOR INITIAL SPACE ALTERATIONS IN LEASED
PREMISES FROM A 1977 APPROPRIATION AVAILABLE FOR RENTAL OF SPACE
(RENTAL), RATHER THAN FROM AN APPROPRIATION AVAILABLE FOR ALTERATIONS
AND MAJOR REPAIRS (ALTERATIONS). THE ADMINISTRATOR ADVISES THAT THE
PROBLEM AROSE ONLY DURING FISCAL YEAR 1977, WHEN THE ALTERATIONS BUDGET
WAS EXHAUSTED AND THE RENTAL BUDGET HAD A SURPLUS. FOR THE REASONS SET
FORTH BELOW, WE CONCLUDE THAT THE USE OF RENTAL FUNDS FOR LUMP-SUM
ALTERATION PAYMENTS WAS IMPROPER.
RENTAL AND ALTERATIONS ACTIVITIES ARE FUNDED OUT OF THE FEDERAL
BUILDING FUND (FUND), ESTABLISHED BY SECTION 210(F)(1) OF THE FEDERAL
PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED (ACT), 40
U.S.C. SEC. 490 (F)(1) (1976). MONIES DEPOSITED INTO THE FUND ARE
AVAILABLE FOR EXPENDITURES FOR REAL PROPERTY MANAGEMENT AND RELATED
ACTIVITIES IN SUCH AMOUNTS AS ARE SPECIFIED IN ANNUAL APPROPRIATIONS
ACTS, 40 U.S.C. SEC. 490(F)(2).
UNDER THE HEADING "FEDERAL BUILDINGS FUND", THE FISCAL YEAR 1977
APPROPRIATION ACT APPROPRIATED TO THE ADMINISTRATOR THE FUNDS FOR RENTAL
AND FOR ALTERATIONS ACTIVITIES AS FOLLOWS;
"THE REVENUES AND COLLECTIONS DEPOSITED INTO A FUND PURSUANT TO
SECTION 210(F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT
OF 1949, AS AMENDED (40 U.S.C. 490(F)), SHALL BE AVAILABLE FOR NECESSARY
EXPENSES OF REAL PROPERTY MANAGEMENT AND RELATED ACTIVITIES NOT
OTHERWISE PROVIDED FOR *** IN THE AGGREGATE AMOUNT OF $1,130,755,000 OF
WHICH
"*** (2) NOT TO EXCEED $60,700,000, WHICH SHALL REMAIN AVAILABLE
UNTIL EXPENDED FOR ALTERATIONS AND MAJOR REPAIRS; *** (4) NOT TO EXCEED
$473,200,000 FOR RENTAL OF SPACE ***"
TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATION ACT,
1977, PUBLIC LAW NO. 94-363, JULY 14, 1976, 90 STAT. 963, 970-971.
THE GSA TAKES THE POSITION THAT, FOR FY 1977, INITIAL SPACE
ALTERATIONS, UPON ENTERING INTO A LEASE, COULD PROPERLY BE FOUNDED OUT
OF EITHER OF THESE APPROPRIATIONS. THERE ARE TWO METHODS FOR PAYING FOR
SUCH ALTERATIONS. ONE IS TO AMORTIZE THEIR COST OVER THE LIFE OF THE
LEASE, MAKING THE COST PART OF THE RENTAL CONSIDERATION. THE OTHER IS
TO MAKE A LUMP-SUM PAYMENT TO THE LESSOR OR TO SOME OTHER ENTITY. GSA
BELIEVES THAT THE CHOICE OF THESE METHODS FOR ANY PARTICULAR BUILDING IS
THE RESPONSIBILITY OF THE APPROPRIATE GSA OPERATING OFFICIAL.
GSA STATES, AND WE AGREE, THAT THERE IS NO QUESTION BUT THAT LUMP-SUM
PAYMENTS FOR INITIAL SPACE ALTERATIONS IN LEASED PREMISES WERE PROPERLY
PAYABLE FROM THE ALTERATIONS APPROPRIATION AND THAT INITIAL SPACE
ALTERATIONS IN LEASED PREMISES WHICH ARE AMORTIZED OVER THE LIFE OF THE
LEASE WERE PROPERLY PAYABLE FROM THE RENTAL APPROPRIATIONS. THE
QUESTION IS WHETHER THE RENTAL APPROPRIATION WAS AVAILABLE FOR LUMP-SUM
PAYMENTS FOR INITIAL SPACE ALTERATIONS IN LEASED PREMISES AS WELL.
THE QUESTION ARISES BECAUSE IN FISCAL YEAR 1977, THE COMMISSIONER OF
THE PUBLIC BUILDINGS DIVISION AUTHORIZED, FOR THAT YEAR ONLY, THE USE OF
THE RENTAL APPROPRIATION TO MAKE LUMP-SUM PAYMENTS FOR ALTERATIONS. GSA
CONTENDS THAT THIS DECISION, WHILE NOT FREE FROM DOUBT, IS LEGALLY
SUPPORTABLE. IN AN ENCLOSURE TO THE ADMINISTRATOR'S LETTER, GSA
ANALYZES A NUMBER OF OUR DECISIONS AND CONCLUDES THAT THIS CASE IS
DIFFERENT FROM ANY WE HAVE PREVIOUSLY DECIDED. THE MEMORANDUM STATES:
"THERE ARE 2 APPROPRIATIONS EQUALLY AVAILABLE TO GSA FOR THE
ACQUISITION OF INITIAL TENANT ALTERATIONS IN LEASED SPACE.
"RENTAL OF SPACE - IF THE COST OF THE ALTERATIONS IS TO BE AMORTIZED
OVER THE LIFE OF THE LEASE.
"ALTERATIONS AND MAJOR REPAIRS - IF THE COST OF THE ALTERATIONS IS TO
BE PAID FOR A LUMP-SUM BASIS."
GSA NOTES THAT FUNDS APPROPRIATED ARE REQUIRED TO BE APPLIED SOLELY
TO THE OBJECTS FOR WHICH THEY ARE MADE AND FOR NO OTHERS, 31 U.S.C. SEC.
628 (1976). GSA STATES,
"TO HOLD THAT RENTAL OF SPACE BUDGET ACTIVITY IS NOT AVAILABLE FOR
ALTERATIONS PAID FOR ON A LUMP-SUM BASIS, THE WORD 'OBJECTS' IN 31
U.S.C. SEC. 628 *** HAS TO BE EXPANDED TO INCLUDE THE METHOD OF PAYMENT
AS WELL AS WHAT WAS BEING PROCURED."
IN OTHER WORDS, GSA BELIEVES THAT BOTH FUNDS ARE EQUALLY AVAILABLE TO
FUND INITIAL SPACE ALTERATIONS (THE OBJECT), AND, ACCORDING TO OUR
DECISIONS, "THE DETERMINATION OF THE ADMINISTRATIVE OFFICER CONCERNED AS
TO WHICH APPROPRIATION SHALL BE USED FOR SUCH PURCHASES WILL NOT BE
QUESTIONED." THE SUBMISSION THEN CITES 10 COMP. GEN. 440 (1931) AND 23
ID. 827 (1944) FOR SUPPORT.
WE DISAGREE THAT THOSE DECISIONS ARE APPLICABLE IN THIS CASE. THE
"OBJECT" FOR WHICH THE RENTAL APPROPRIATION IS MADE IS THE PROCUREMENT
OF RENTED SPACE; ITS PURPOSE IS TO LEASE SPACE ALREADY AVAILABLE FOR
GOVERNMENT OCCUPANCY. SHOULD A POTENTIAL LANDLORD HAVE SPACE WHICH CAN
BE CONVERTED TO MEET THE GOVERNMENT'S NEEDS, THAT PERSON CAN ENTER INTO
A RENTAL ARRANGEMENT WITH GSA UNDER WHICH HE AGREES TO MEET THE SPACE
AND FACILITIES NEEDS. THAT PERSON WILL PRESUMABLY OFFER TO RENT THE
SPACE AT A RATE WHICH WILL RECOVER, AMONG OTHER THINGS, HIS ALTERATION
EXPENSES.
ON THE OTHER HAND, THE ALTERATIONS APPROPRIATIONS IS MADE, AMONG
OTHER THINGS, FOR THE "OBJECT" OF PAYING FOR ALTERATIONS TO LEASED
PROPERTY. AS DISTINGUISHED FROM THE RENTAL SITUATION IN WHICH THE
LANDLORD WILL MAKE THE ALTERATIONS, THE CHANGES IN PROPERTY CAN BE DONE
UNDER THE ALTERATION APPROPRIATION BY THE LANDLORD OR BY CONTRACT
BETWEEN GSA AND OTHER CONTRACTORS. BY USING THIS METHOD, GSA RENTS
PROPERTY WHICH WILL, WITH ALTERATION, MEET ITS NEEDS AT THE MOST
ADVANTAGEOUS TERMS AND PRICE POSSIBLE, FUNDING THE LEASE PAYMENTS FROM
THE RENTAL APPROPRIATION. IT THEN SUPERINTENDS NECESSARY ALTERATIONS
UNDER THE MOST ADVANTAGEOUS TERMS AND PRICE AVAILABLE, FUNDING THE
ALTERATIONS OUT OF THE ALTERATIONS APPROPRIATION.
THE CONGRESS, IN APPROPRIATION ACTS, BEGINNING WITH FY 1978, HAS MADE
EXPLICIT THIS DIFFERENCE BETWEEN PAYING FOR THE RENTAL OF SPACE, EVEN IF
PART OF THE RENTAL PRICE HAS BEEN SET BY THE LANDLORD TO RECOVER THE
COST OF ALTERATIONS, AND PAYING FOR ALTERATIONS SEPARATELY FROM ANY
RENTAL PAYMENTS. HOWEVER, EVEN IN FY 1977, THE CONGRESS PROVIDED
SEPARATE FUNDS FOR RENTAL OF SPACE AND FOR ALTERATIONS AND MAJOR
REPAIRS. UNLIKE THE CASES CITED, THE TWO APPROPRIATIONS WERE MADE FOR
ENTIRELY DIFFERENT PURPOSES AND ARE NOT "EQUALLY AVAILABLE" FOR INITIAL
ALTERATIONS. 31 U.S.C. SEC. 628.
GSA THEREFORE HAD NO AUTHORITY TO USE THE RENTAL APPROPRIATION FOR
ALTERATIONS THE COSTS OF WHICH WERE NOT AMORTIZED OVER THE TERM OF THE
LEASE. IT MAY ONLY BE USED FOR RENTAL PAYMENTS AND RELATED COSTS. PUT
ANOTHER WAY, WE CONCLUDE THAT LUMP-SUM PAYMENTS FOR INITIAL ALTERATIONS
IN LEASED PREMISES MUST BE FUNDED FROM THE ALTERATIONS APPROPRIATION.
GSA ADVISES THAT IF WE RULE THAT RENTAL FUNDS SHOULD NOT HAVE BEEN
USED FOR THIS KIND OF PAYMENT, THERE MAY HAVE BEEN A VIOLATION OF THE
ANTI-DEFICIENCY ACT, 31 U.S.C. SEC. 665 (1965), IN ONE OR MORE GSA
REGIONS. THE VIOLATION, IF ANY, WOULD ARISE FROM A SHIFTING OF AMOUNTS
FROM THE RENTAL APPROPRIATION TO THE ALTERATION APPROPRIATION, RESULTING
IN OBLIGATIONS IN THE ALTERATION APPROPRIATION IN EXCESS OF EXISTING
REGIONAL ALLOTMENTS. ONLY A COMPLETE AUDIT OF ALL OBLIGATIONS WILL
DISCLOSE THE EXISTENCE OF A VIOLATION. GSA NOTES THAT THE REGIONS WHERE
THE TECHNICAL VIOLATIONS OCCURRED, IF THERE ARE ANY, WOULD HAVE BEEN
FOLLOWING THE INSTRUCTIONS OF THE CENTRAL GSA OFFICE. GSA ALSO STATES
THAT THE CENTRAL OFFICE HAD AT THAT TIME AND STILL HAS SUFFICIENT
UNOBLIGATED BALANCES IN THE ALTERATIONS APPROPRIATION TO ABSORB ALL SUMS
EXPENDED IN FISCAL YEAR 1977 FROM THE RENTAL APPROPRIATION FOR LUMP-SUM
PAYMENTS FOR INITIAL ALTERATIONS IN LEASED PREMISES.
THE ANTI-DEFICIENCY ACT PROVIDES THAT NO OFFICER OR EMPLOYEE OF THE
UNITED STATES SHALL MAKE OR AUTHORIZE ANY OBLIGATION OR EXPENDITURE IN
EXCESS OF THE AMOUNT AVAILABLE EITHER IN THE APPLICABLE APPROPRIATION OR
IN EXCESS OF FUNDS MADE AVAILABLE THROUGH APPORTIONMENT OR
REAPPORTIONMENT, INCLUDING ADMINISTRATIVE DIVISION AND SUBDIVISION. 31
U.S.C. SECS. 665(A) AND (H). IT IS TRUE THAT MONIES MADE AVAILABLE FOR
EXPENDITURE FROM THE FUND FOR ALTERATIONS AND MAJOR REPAIRS IN ANNUAL
APPROPRIATION ACTS REMAIN AVAILABLE UNTIL EXPENDED. THIS DOES NOT MEAN,
HOWEVER, THAT WHEN THE TOTAL AMOUNT AVAILABLE FOR A SPECIFIC PURPOSE IN
A GIVEN YEAR IS EXHAUSTED, AND OBLIGATIONS IN EXCESS OF THAT AMOUNT ARE
IMPROPERLY INCURRED, THE RESULTING VIOLATION OF THE ANTI-DEFICIENCY ACT
CAN BE REDRESSED BY ADMINISTRATIVE ALLOCATIONS OF MONIES NORMALLY
CHARGEABLE TO THE AMOUNTS MADE AVAILABLE IN SUBSEQUENT FISCAL YEARS.
IF, AS GSA STATES, "AT THAT TIME" - I.E., FY 1977 - THERE WAS A
SUFFICIENT BALANCE IN THE ALTERATIONS ACCOUNT AT THE CENTRAL OFFICE SO
THAT THE ADMINISTRATIVE ALLOCATION COULD HAVE BEEN AMENDED TO MAKE MORE
FUNDS AVAILABLE TO A PARTICULAR REGIONAL OFFICE FOR THE ALTERATIONS
IMPROPERLY CHARGED TO THE RENTAL APPROPRIATION, WE WILL NOT NOW OBJECT
TO SUCH AN AMENDMENT AS AN ACCOUNTING ADJUSTMENT, ALTHOUGH THERE WAS
STILL A TECHNICAL VIOLATION OF THE ANTI-DEFICIENCY ACT. HOWEVER, ONCE
THE TOTAL AMOUNT OF FUNDS AVAILABLE IN FY 1977 FOR ALTERATIONS AND MAJOR
REPAIRS IS EXHAUSTED, NO FURTHER ADJUSTMENTS CAN BE MADE. IF, AFTER
AUDITING THE TRANSACTIONS FOR FISCAL YEAR 1977 BETWEEN THE RENTAL
APPROPRIATION AND THE ALTERATIONS APPROPRIATION, THERE ARE STILL
EXPENDITURES MADE DURING FY 1977 WHICH EXCEED FY 1977 AVAILABLE FUNDS, A
VIOLATION OF THE ANTI-DEFICIENCY ACT HAS OCCURRED WHICH SHOULD BE
REPORTED BY GSA TO THE CONGRESS.
B-114808, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
SECTIONS 1(C) AND 4(C)(2) OF PUB. L. NO. 95-348 AMENDED LAWS
PERTAINING TO GUAM AND VIRGIN ISLANDS TO PERMIT PREPAYMENT BY U.S.
TREASURY TO TERRITORIAL TREASURIES OF ESTIMATES OF MONEYS TO BE
COLLECTED FROM CERTAIN TAXES, DUTIES, AND FEES. WHILE THE PREPAYMENT
PROVISIONS CONSTITUTE PERMANENT AUTHORITY FOR THE PROGRAM, THEY DO NOT
CONSTITUTE PERMANENT INDEFINITE APPROPRIATIONS SINCE THE INTENT TO MAKE
AN APPROPRIATION MAY NOT BE INFERRED BUT MUST BE STATED EXPLICITLY IN
THE STATUTE.
REMISSION TO GUAM AND VIRGIN ISLANDS OF ESTIMATES OF MONEYS TO BE
COLLECTED FOR TAXES, DUTIES AND FEES.:
THE ASSISTANT DIRECTOR, ACCOUNTING OPERATIONS, FISCAL SERVICE,
DEPARTMENT OF THE TREASURY, HAS REQUESTED OUR OPINION ON WHETHER
SECTIONS 1(C) AND 4(C)(2) OF PUB. L. NO. 95-348 (AUGUST 18, 1978), 92
STAT. 487, CAN BE CONSIDERED PERMANENT INDEFINITE APPROPRIATIONS. FOR
THE REASONS THAT FOLLOW, WE CONCLUDE THEY MAY NOT.
PUBLIC LAW NO. 95-348 AUTHORIZES APPROPRIATIONS FOR CERTAIN INSULAR
AREAS OF THE UNITED STATES INCLUDING GUAM AND THE VIRGIN ISLANDS.
SECTION 1(C) OF THE ACT, WHICH AMENDED SECTION 30 OF THE ORGANIC ACT OF
GUAM, 48 U.S.C. SEC. 1421H (1976), PROVIDES IN PERTINENT PART:
"BEGINNING AS SOON AS THE GOVERNMENT OF GUAM ENACTS LEGISLATION
ESTABLISHING A FISCAL YEAR COMMENCING ON OCTOBER 1 AND ENDING ON
SEPTEMBER 30, THE SECRETARY OF THE TREASURY, PRIOR TO THE COMMENCEMENT
OF ANY FISCAL YEAR, SHALL REMIT TO THE GOVERNMENT OF GUAM THE AMOUNT OF
DUTIES, TAXES, AND FEES WHICH THE GOVERNOR OF GUAM WITH THE CONCURRENCE
OF THE GOVERNMENT COMPTROLLER OF GUAM, HAS ESTIMATED WILL BE COLLECTED
IN OR DERIVED FROM GUAM UNDER THIS SECTION DURING THE NEXT FISCAL YEAR
***. THE SECRETARY OF THE TREASURY SHALL DEDUCT FROM OR ADD TO THE
AMOUNTS SO REMITTED THE DIFFERENCE BETWEEN THE AMOUNT OF DUTIES, TAXES,
AND FEES ACTUALLY COLLECTED DURING THE PRIOR FISCAL YEAR AND THE AMOUNT
OF SUCH DUTIES, TAXES, AND FEES AS ESTIMATED AND REMITTED AT THE
BEGINNING OF THAT PRIOR FISCAL YEAR, ***."
SECTION 4(C)(2) OF THE ACT IS SUBSTANTIALLY THE SAME FOR THE VIRGIN
ISLANDS.
THE PREPAYMENT PROVISIONS WOULD APPLY TO COLLECTIONS WHICH ARE NOT
COVERED DIRECTLY INTO THE TERRITORIAL TREASURIES, SUCH AS FEDERAL INCOME
TAXES PAID BY UNITED STATES CITIZENS RESIDING IN THE TERRITORIES. UNDER
CURRENT PROCEDURES, SUCH AMOUNTS ARE PAID OVER TO THE TERRITORIAL
TREASURIES QUARTERLY BY THE U.S. TREASURY. ACCORDING TO THE TREASURY
DEPARTMENT, THE COLLECTIONS NEVER ACTUALLY ENTERED THE U.S. TREASURY,
AND APPROPRIATIONS WERE THEREFORE NOT NEEDED, AND IN FACT WERE NOT MADE,
TO PERMIT REMISSION TO THE TERRITORIES. THE PREPAYMENT PROVISIONS WOULD
NOT APPLY TO DUTIES AND FEES "COLLECTED IN OR DERIVED FROM" THE
TERRITORIES WHICH ARE DEPOSITED DIRECTLY INTO THE TREASURIES OF THE
RESPECTIVE TERRITORIES.
SECTIONS 1(C) AND 4(C)(2) WILL REQUIRE A CHANGE IN THE CURRENT
PROCEDURES. THEY PROVIDE THAT, AFTER GUAM AND THE VIRGIN ISLANDS
CONFORM THEIR FISCAL YEARS TO THAT OF THE UNITED STATES, ESTIMATED
AMOUNTS OF SUCH MONIES ARE TO BE REMITTED TO THOSE TERRITORIES PRIOR TO
COLLECTION. THE ESTIMATES ARE TO BE MADE BY THE GOVERNORS OF GUAM AND
THE VIRGIN ISLANDS WITH THE CONCURRENCE OF THE COMPTROLLERS OF THOSE
TERRITORIES. PRESUMABLY, THE AMOUNTS ACTUALLY COLLECTED IN THE
PRECEDING YEAR, IN GREAT MEASURE, WILL DETERMINE THE AMOUNT OF THE
ESTIMATES FOR ANY GIVEN YEAR.
A LEGAL MEMO FROM THE DEPARTMENT OF THE TREASURY SUBMITTED WITH ITS
REQUEST CONCLUDED THAT APPROPRIATIONS WERE "NECESSARY TO THE EXTENT THAT
A WITHDRAWAL FROM THE U.S. TREASURY IS NECESSARY TO MAKE THE FIRST
YEAR'S WHOLE OR A PART OF ANY SUBSEQUENT YEAR'S ADVANCE." THE MEMO THEN
WENT ON TO DISCUSS WHETHER THE PREPAYMENT PROVISIONS CONSTITUTED
PERMANENT INDEFINITE APPROPRIATIONS AND, ALTHOUGH NOTING THAT THE ADVICE
WAS NOT "CONCLUSIVE," STATED:
"THUS, LOGICALLY ALL INDICATIONS TO THE CONTRARY NOTWITHSTANDING, THE
CONGRESS MUST HAVE INTENDED AND MUST BE CONSTRUED TO HAVE MADE A
PERMANENT INDEFINITE APPROPRIATION OF SUCH AMOUNTS AS MAY INITIALLY, AND
FROM TIME TO TIME, EXCEED MONEYS COLLECTED AND, THUS, REPRESENT AN
ADVANCE."
WE AGREE THAT THE PREPAYMENT TO GUAM AND THE VIRGIN ISLANDS AT THE
BEGINNING OF EACH FISCAL YEAR BASED ON ESTIMATES OF FUTURE COLLECTIONS
REQUIRES AN APPROPRIATION BEFORE MONEYS CAN BE DRAWN FROM THE TREASURY.
FURTHER, WE WOULD AGREE THAT CONGRESS PROBABLY DID NOT ANTICIPATE THAT
APPROPRIATIONS WOULD BE NEEDED IN ORDER TO IMPLEMENT THE PREPAYMENT
PROVISIONS. NEVERTHELESS, BASED ON OUR REVIEW OF THE STATUTORY
LANGUAGE, LEGISLATIVE HISTORY, AVAILABLE PRECEDENT, AND THE MATERIAL
SUBMITTED BY TREASURY, WE MUST CONCLUDE THAT SECTIONS 1(C) AND 4(C)(2)
DO NOT CONSTITUTE PERMANENT INDEFINITE APPROPRIATIONS.
THERE IS LITTLE LEGISLATIVE HISTORY ON THE PREPAYMENT PROVISIONS. IN
THE HOUSE FLOOR DEBATE ON JUNE 5, 1978, CONGRESSMAN BURTON SAID:
"CERTAIN TAXES COLLECTED FOR THESE GOVERNMENTS WILL BE ESTIMATED AND
PREPAID BY THE UNITED STATES TO THESE GOVERNMENTS, RATHER THAN MAKING
SUCH PAYMENTS AFTER COLLECTION." 124 CONG. REC. H4969 (DAILY ED. JUNE 5,
1978).
ON AUGUST 3, 1978, DURING THE SENATE DEBATE, SENATOR JACKSON STATED:
"THIS PREPAYMENT DOES NOT INCLUDE ANY MONEYS WHICH GO DIRECTLY UPON
COLLECTION INTO THE TREASURY OF GUAM, AND IS DESIGNED TO COMPENSATE GUAM
FOR INTEREST AND CASH FLOW IMPACTS ON THOSE FUNDS WITHHELD BY THE
SECRETARY OF THE TREASURY UPON COLLECTION UNTIL SOME FUTURE POINT." ID.,
S12423 (DAILY ED. AUG. 3, 1978).
THE PROVISIONS WERE ALSO DISCUSSED IN A STATEMENT BY THE DIRECTOR OF
THE OFFICE OF TERRITORIAL AFFAIRS, DEPARTMENT OF THE INTERIOR, IN A
HEARING ON S. 2821 BEFORE THE SENATE COMMITTEE ON ENERGY AND NATURAL
RESOURCES ON JULY 18, 1978. (THE PREPAYMENT PROVISION IN S. 2821
CONTAINED A FIVE-YEAR LIMITATION, WHICH WAS SUBSEQUENTLY REMOVED.) THE
DIRECTOR SAID:
"SECTION 1(C) CONCERNS SECTION 30 OF THE GUAM ORGANIC ACT, THE
PROVISION UNDER WHICH CERTAIN FEDERAL DUTIES, TAXES, AND FEES COLLECTED
IN GUAM ARE COVERED INTO THE TREASURY OF GUAM. AS A PRACTICAL MATTER,
SECTION 30 PRINCIPALLY INVOLVES THE PAYMENT TO GUAM OF FEDERAL INCOME
TAXES, COLLECTED BY THE UNITED STATES, AND PAID BY UNITED STATES
CITIZENS IN GUAM. THE TAXPAYERS, IN TURN, ARE VERY LARGELY MILITARY
PERSONNEL AND OTHER FEDERAL EMPLOYEES. SUCH TAXES ARE NOW PAID OVER TO
GUAM BY THE U.S. ON A QUARTERLY BASIS AFTER THEY ARE ACTUALLY RECEIVED.
SECTION 1(C) WOULD PERMIT THEM TO BE PAID OVER AT THE BEGINNING OF THE
FISCAL YEAR, ON THE BASIS OF ESTIMATES OF LIKELY COLLECTIONS, WITH THE
ESTIMATES TO BE MADE BY THE GOVERNOR WITH THE CONCURRENCE OF THE FEDERAL
COMPTROLLER. ADJUSTMENTS FOR ERRORS IN THE ESTIMATES WOULD BE MADE THE
FOLLOWING YEAR. THE AUTHORITY CONTAINED IN SECTION 1(C) WOULD CONTINUE
FOR FIVE YEARS, AND WOULD BE CONTINGENT UPON GUAM'S ADOPTION OF THE U.S.
FISCAL YEAR OF OCTOBER 1 THROUGH SEPTEMBER 30. GUAM, LIKE THE VIRGIN
ISLANDS, CONTINUES TO UTILIZE THE FORMER U.S. FISCAL YEAR OF JULY 1
THROUGH JUNE 30." HEARING ON S. 2821 BEFORE THE SENATE COMMITTEE ON
ENERGY AND NATURAL RESOURCES, 95TH CONG., 2D SESS. 19-20 (1978).
THE UNITED STATES CONSTITUTION REQUIRES "APPROPRIATIONS MADE BY LAW"
BEFORE MONEYS CAN BE DRAWN FROM THE TREASURY. U.S. CONST., ART. 1, SEC.
9, CL. 7. SECTION 627 OF TITLE 31 OF THE UNITED STATES CODE REQUIRES
THAT SUCH APPROPRIATIONS BE MADE IN SPECIFIC TERMS:
"NO ACT OF CONGRESS AFTER JUNE 30, 1906, SHALL BE CONSTRUED TO MAKE
AN APPROPRIATION OUT OF THE TREASURY OF THE UNITED STATES *** UNLESS
SUCH ACT SHALL IN SPECIFIC TERMS DECLARE AN APPROPRIATION TO BE MADE
***."
IN ADDITION, 1 U.S.C. SEC. 105 (1976) PROVIDES:
"THE STYLE AND TITLE OF ALL ACTS MAKING APPROPRIATIONS FOR THE
SUPPORT OF GOVERNMENT SHALL BE AS FOLLOWS: 'AN ACT MAKING
APPROPRIATIONS (HERE INSERT THE OBJECT) FOR THE YEAR ENDING SEPTEMBER 30
(HERE INSERT THE CALENDAR YEAR).'"
THUS, THE MAKING OF AN APPROPRIATION IS NOT TO BE INFERRED BUT MUST
BE EXPRESSLY STATED. THIS PRINCIPLE IS EVEN MORE IMPORTANT IN THE CASE
OF A PERMANENT APPROPRIATION. IN 21 COMP. GEN. 46, 49 (1941), WE QUOTED
THE FOLLOWING PRINCIPLE FROM AN EARLIER DECISION OF THE COMPTROLLER OF
THE TREASURY:
"'AS TO APPROPRIATIONS WHICH REMOVE FROM ANNUAL SCRUTINY OF CONGRESS
THE USE OF PUBLIC MONEY, THE RULE OF CONSTRUCTION MUST NECESSARILY BE,
THAT IF THEY CAN EXIST BY INFERENCE AT ALL, THE LANGUAGE FROM WHICH SUCH
INFERENCE IS DRAWN MUST BE CLEAR AND CONCLUSIVE. THIS IS ESSENTIAL, TO
PRESERVE THE CONTROL OF CONGRESS OVER APPROPRIATIONS. PERMANENT
INDEFINITE APPROPRIATIONS, AS A GENERAL RULE, ARE AGAINST THE SPIRIT OF
THE CONSTITUTION.'" (1 FIRST COMP. DEC. 141, 144 (1880).
THE LANGUAGE OF SECTIONS 1(C) AND 4(C)(2) DOES NOT EXPRESSLY
ESTABLISH APPROPRIATIONS. IF SUCH A CONCLUSION IS TO BE DRAWN, IT CAN
BE INFERRED ONLY FROM THE WORDS "SHALL REMIT," AND WE DO NOT THINK THIS
IS SUFFICIENT TO SATISFY 31 U.S.C. SEC. 627 AND 1 U.S.C. SEC. 105.
WHILE IT IS TRUE THAT PERMANENT LEGISLATION MAY BE DEDUCED FROM WORDS OF
FUTURITY, EVEN IN ANNUAL APPROPRIATION ACTS (SEE, E.G., 21 COMP. GEN. AT
48), THE WORDS OF FUTURITY HERE - "THE SECRETARY OF THE TREASURY SHALL
REMIT TO THE GOVERNMENT OF GUAM THE AMOUNT OF DUTIES, TAXES AND FEES
WHICH THE GOVERNOR OF GUAM *** HAS ESTIMATED WILL BE COLLECTED ***" IN
OUR OPINION MERELY ESTABLISH PERMANENT AUTHORITY FOR THE PROGRAM RATHER
THAN A PERMANENT INDEFINITE APPROPRIATION.
IN A RECENT DECISION B-160998, APRIL 13, 1978, WE FOUND THAT SECTION
11 OF THE FEDERAL FIRE PREVENTION AND CONTROL ACT OF 1974, 15 U.S.C.
SEC. 2210(C)(1976), DID CONSTITUTE A PERMANENT INDEFINITE APPROPRIATION.
SECTION 11 PROVIDES FOR PAYMENT OF CLAIMS TO FIRE SERVICES OR THEIR
PARENT JURISDICTIONS BY THE SECRETARY OF THE TREASURY "FROM MONEYS IN
THE TREASURY NOT OTHERWISE APPROPRIATED." ANOTHER SECTION OF THAT ACT
AUTHORIZED ANNUAL APPROPRIATIONS TO IMPLEMENT ITS PROVISIONS EXCEPT FOR
SECTION 11. READING THE TWO SECTIONS TOGETHER, WE CONCLUDED THAT
SECTION 11 WAS AN APPROPRIATION, INDEFINITE IN AMOUNT. THE KEY LANGUAGE
WAS THE PHRASE "FROM MONEYS *** NOT OTHERWISE APPROPRIATED," A CLEAR
INDICATION OF THE INTENT TO MAKE AN APPROPRIATION, WHICH IS NOT PRESENT
IN THIS CASE. THUS, B-160998 DOES NOT PROVIDE AUTHORITY FOR A CONTRARY
RESULT HERE.
IN SUM, ALTHOUGH WE THINK THAT SECTIONS 1(C) AND 4(C)(2) OF PUB. L.
NO. 95-348 DO ESTABLISH PERMANENT AUTHORITY FOR FUTURE APPROPRIATIONS,
WE CONCLUDE THAT THEY DO NOT ESTABLISH PERMANENT INDEFINITE
APPROPRIATIONS. THUS, THE DEPARTMENT OF THE TREASURY CANNOT REMIT FUNDS
TO GUAM AND THE VIRGIN ISLANDS UNDER THESE SECTIONS UNTIL CONGRESS MAKES
APPROPRIATIONS FOR THAT PURPOSE.
B-152603, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROPERTY OWNED BY THE DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY
(RLA), WHICH WAS AN AGENCY OF THE UNITED STATES PRIOR TO ADOPTION OF THE
DISTRICT HOME RULE ACT, WAS "PROPERTY OWNED BY THE UNITED STATES" FOR
PURPOSES OF THE ADDITIONAL HOUSE OFFICE BUILDING ACT OF 1955, 69 STAT.
41, REQUIRING THAT SUCH PROPERTY IN CERTAIN AREAS BE CONVEYED TO
ARCHITECT OF THE CAPITOL ON REQUEST WITHOUT REIMBURSEMENT. HOME RULE
ACT MADE RLA AN INSTRUMENTALITY OF THE DISTRICT. SAME PROPERTY CAN NO
LONGER BE CONSIDERED AS "OWNED BY THE UNITED STATES." 43 COMP. GEN. 485
(1963) DISTINGUISHED.
APPLICABILITY OF ADDITIONAL HOUSE OFFICE BUILDING ACT OF 1955, TO
DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY PROPERTY:
THIS DECISION IS IN RESPONSE TO AN INQUIRY FROM THE ARCHITECT OF THE
CAPITOL, ASKING WHETHER, UNDER THE RATIONALE OF OUR DECISION AT 43 COMP.
GEN. 485 (1963), THE DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY
(RLA) CAN BE COMPELLED TO TRANSFER CERTAIN PROPERTY TO WHICH IT HOLDS
TITLE TO THE ARCHITECT WITHOUT REIMBURSEMENT OR TRANSFER OF FUNDS,
PURSUANT TO SECTION 1202(A) OF THE ADDITIONAL HOUSE OFFICE BUILDING ACT
OF 1955 (1955 ACT) APPROVED APRIL 22, 1955, 69 STAT. 41, 40 U.S.C. SEC.
175 NOTE. FOR THE REASONS STATED BELOW, THE ANSWER IS NO.
SECTION 1202(A) OF THE 1955 ACT PROVIDES FOR ACQUISITION OF VARIOUS
PROPERTIES BY THE ARCHITECT. WITH REGARD TO PROPERTY LOCATED WHERE THE
PARCEL HERE IN QUESTION IS LOCATED, THE ACT STATES:
"*** ANY REAL PROPERTY OWNED BY THE UNITED STATES AND LOCATED SOUTH
OF INDEPENDENCE AVENUE IN THE VICINITY OF THE CAPITOL GROUNDS SHALL UPON
REQUEST OF THE ARCHITECT OF THE CAPITOL, MADE WITH THE APPROVAL OF THE
HOUSE OFFICE BUILDING COMMISSION, BE TRANSFERRED TO THE JURISDICTION AND
CONTROL OF THE ARCHITECT OF THE CAPITOL WITHOUT REIMBURSEMENT OR
TRANSFER OF FUNDS. ***"
IN OUR DECISION AT 43 COMP. GEN. 485 (1963), WE HELD THAT PROPERTY
LOCATED SOUTH OF INDEPENDENCE AVENUE IN THE VICINITY OF THE CAPITOL
GROUNDS, THE TITLE OF WHICH WAS IN THE RLA, COULD BE TRANSFERRED WITHOUT
COST TO THE ARCHITECT UNDER THIS PROVISION. WE SAID THAT:
"*** THE AGENCY (RLA) 'IN SPITE OF ITS NAME AND LIMITED AREA OF
OPERATION' HAS JUDICIALLY BEEN HELD TO BE A FEDERAL AGENCY AS
DISTINGUISHED FROM A DISTRICT OF COLUMBIA AGENCY FOR PURPOSES OF THE
FEDERAL TORT CLAIMS ACT, 28 U.S.C. 2671, ET SEQ., GODDARD V. DISTRICT OF
COLUMBIA REDEVELOPMENT LAND AGENCY, 287 F.2D 343 (1961). WE SEE NO
REASON WHY A SIMILAR VIEW OF THE AGENCY'S STATUS SHOULD NOT BE ADOPTED
IN THE PRESENT CONTEXT. THEREFORE, IT IS OUR VIEW THAT SQUARE 639 FALLS
WITHIN THE TERM 'REAL PROPERTY OWNED BY THE UNITED STATES' AS USED IN
THE ADDITIONAL HOUSE OFFICE BUILDING ACT OF 1955.
"IT IS NOTED THAT THE GENERAL COUNSEL OF THE AGENCY IN A MEMORANDUM
DATED DECEMBER 7, 1956, TO THE THEN EXECUTIVE DIRECTOR OF THE AGENCY
STATED, IN EFFECT, THAT IN HIS OPINION EVEN THOUGH TECHNICALLY THE
AGENCY MUST ACQUIRE TITLE TO PROPERTY IN ITS OWN NAME, NEVERTHELESS SUCH
PROPERTY IS CONSIDERED TO BE OWNED BY THE UNITED STATES WITHIN THE
MEANING OF THE ADDITIONAL HOUSE OFFICE BUILDING ACT OF 1955." 43 COMP.
GEN. 486-487.
THE PROPERTY HERE IN QUESTION (DESCRIBED AS SQUARE 582, LOT 49
DESIGNATED AS PARCEL 36; AND SQUARE 640, LOT 70, DESIGNATED PARCEL 43)
IS LOCATED SOUTH OF INDEPENDENCE AVENUE IN THE VICINITY OF THE CAPITOL,
AND WAS ACQUIRED ABOUT THE SAME TIME AS THE PROPERTY WHICH WAS DISCUSSED
IN OUR DECISION ABOVE. THUS, UNLESS THE STATUS OF THIS PROPERTY HAS
CHANGED FROM "PROPERTY OWNED BY THE UNITED STATES," IT TOO WOULD BE
SUBJECT TO THE PROVISIONS OF SECTION 1202(A) OF THE 1955 ACT.
RLA WAS ESTABLISHED BY SECTION 4 OF THE DISTRICT OF COLUMBIA
REDEVELOPMENT ACT OF 1945 (REDEVELOPMENT ACT) (APPROVED AUGUST 2, 1946,
60 STAT. 793, AS A BODY CORPORATE OF PERPETUAL DURATION GOVERNED BY A
FIVE-MEMBER BOARD OF DIRECTORS. TWO MEMBERS WERE APPOINTED BY THE
PRESIDENT AND THREE MEMBERS WERE APPOINTED BY THE DISTRICT COMMISSIONERS
SUBJECT TO CONFIRMATION BY THE SENATE. (REORGANIZATION PLAN NO. 4 OF
1968 TRANSFERRED THE PRESIDENT'S POWER OF APPOINTMENT OF BOARD MEMBERS
TO THE COMMISSIONER OF THE DISTRICT OF COLUMBIA.)
SINCE OUR EARLIER DECISION, SECTION 4 OF THE REDEVELOPMENT ACT HAS
BEEN AMENDED BY SECTIONS 201(A)-(C) OF THE DISTRICT OF COLUMBIA
SELF-GOVERNMENT AND GOVERNMENTAL REORGANIZATION ACT OF 1973 (HOME RULE
ACT) (PUB. L. NO. 93-198, DECEMBER 24, 1973, 87 STAT. 778). THE HOME
RULE ACT ESTABLISHES THE RLA -
"*** AS AN INSTRUMENTALITY OF THE DISTRICT OF COLUMBIA GOVERNMENT,
*** COMPOSED OF FIVE MEMBERS APPOINTED BY THE MAYOR OF THE DISTRICT OF
COLUMBIA *** WITH THE ADVICE AND CONSENT OF THE COUNCIL OF THE DISTRICT
OF COLUMBIA ***." D.C. CODE 5-703(A) (SUPP. IV, 1977).
MOREOVER, ALTHOUGH THE RLA REMAINS A "BODY CORPORATE OF PERPETUAL
DURATION" (D.C. CODE 5-703(B) (SUPP. IV, 1977)), THE DISTRICT OF
COLUMBIA MAY DISSOLVE IT, ELIMINATE THE BOARD OF DIRECTORS, OR TAKE ANY
OTHER ACTION WITH RESPECT TO ITS POWERS AND DUTIES WHICH THE DISTRICT
CONSIDERS NECESSARY AND APPROPRIATE. ID.
BY VIRTUE OF THESE PROVISIONS, RLA HAVING NOW BECOME AN
INSTRUMENTALITY OF THE DISTRICT, PROPERTY RIGHTS HELD BY RLA PRIOR TO
THE HOME RULE ACT IN ITS OWN NAME WOULD NOW BE CONSIDERED TO BE VESTED
IN THE DISTRICT OF COLUMBIA. ALTHOUGH THE ACT DOES NOT EXPRESSLY SO
PROVIDE, THAT IS ITS EFFECT.
THEREFORE, IN OUR OPINION PARCELS 36 AND 43 MAY NO LONGER BE
CONSIDERED PROPERTY "OWNED BY THE UNITED STATES" FOR THE PURPOSE OF THE
1955 ACT, AND THUS THE RATIONALE OF 43 COMP. GEN. 485 (1963) DOES NOT
APPLY.
B-166506-O.M., AUG 7, 1979
HEADNOTES-UNAVAILABLE
SUBJECT:
DRAFT OF A PROPOSED REPORT - EPA SHOULD SEEK LEGISLATION REQUIRING
ALL STATES TO ACCEPT RESPONSIBILITY FOR THE SAFE DRINKING WATER PROGRAM
- (CED-79-19) - B-166506-O.M.
DIRECTOR, CED:
WE HAVE REVIEWED THE DRAFT REPORT CONCERNING PROPOSALS TO AMEND THE
SAFE DRINKING WATER ACT (ACT) TO MAKE ITS IMPLEMENTATION MORE EFFECTIVE.
WE HAVE DISCUSSED OUR CONCLUSIONS WITH MEMBERS OF YOUR STAFF AND, AT
THEIR REQUEST, HAVE SET THEM FORTH BELOW.
REFLECTING THAT AGENCY'S POSITION, THE REPORT STATES THAT THE
ENVIRONMENTAL PROTECTION AGENCY (EPA) IS REQUIRED BY THE ACT TO OPERATE
DRINKING WATER AND HEALTH PROGRAMS IN THOSE STATES THAT CANNOT OR WILL
NOT OPERATE THEM, AND ON INDIAN LANDS OVER WHICH STATES DO NOT HAVE
JURISDICTION. (SEE PAGE I, 5, 14, 16 OF THE DRAFT REPORT.) WE DO NOT
BELIEVE THERE IS A LEGAL BASIS FOR THIS STATEMENT.
CONGRESS PASSED THE SAFE DRINKING WATER ACT, 42 U.S.C. SECS. 300F ET
SEQ. (1976), TO INSURE THAT WATER SYSTEMS THROUGHOUT THE NATION MEET
CERTAIN MINIMUM NATIONAL HEALTH STANDARDS. EPA IS REQUIRED TO ISSUE
DRINKING WATER REGULATIONS TO ASSURE THE HEALTHFUL QUALITY OF DRINKING
WATER. THE PURPOSE OF THE STATUTE'S ENFORCEMENT PROVISIONS, WITH WHICH
WE ARE HERE CONCERNED, IS TO ASSURE THAT THE QUALITY OF THE NATION'S
DRINKING WATER SUPPLIES ARE IN CONFORMITY WITH THE REQUIREMENTS OF THE
ACT AND EPA'S IMPLEMENTING REGULATIONS.
THE CONGRESS EXPECTED THAT THE STATES WOULD UNDERTAKE THE
RESPONSIBILITY TO ENFORCE THE REGULATIONS. THE LEGISLATIVE HISTORY,
H.R. REP. NO. 1185, 93RD CONG., 2ND SESS. 21 (1974), STATES:
"IT IS THE COMMITTEE'S INTENT THAT STATES AND PUBLIC WATER SYSTEMS
TAKE THE PRIMARY RESPONSIBILITY FOR INSURING THE SAFETY OF THE NATION
DRINKING WATER SUPPLIES. WHILE FEDERAL STANDARD SETTING AND BACK-UP
ENFORCEMENT IS AUTHORIZED, THE COMMITTEE IS HOPEFUL THAT STATE AND
FEDERAL COOPERATION WILL BE THE RULE AND THAT THE STATES WILL TAKE THE
LEAD IN ADOPTING STANDARDS, REVIEWING COMPLIANCE STRATEGY, AND WHERE
NECESSARY BRINGING ENFORCEMENT ACTIONS."
THE ACT LISTS FIVE REQUIREMENTS WHICH A STATE MUST MEET BEFORE THE
ADMINISTRATOR CAN GRANT IT PRIMARY ENFORCEMENT RESPONSIBILITY (CALLED
"PRIMACY" IN THE REPORT) OVER ITS PUBLIC WATER SYSTEMS. 42 U.S.C. SEC.
300G-2. BY REGULATION, EPA HAS EXPANDED THESE REQUIREMENTS TO 15. 40
C.F.R. SEC. 142.10 (1978).
THE REPORT, IN OUR VIEW, CONFUSES TWO DIFFERENT ACTIVITIES IN
DEFINING "PRIMACY": THE ENFORCEMENT OF THE PRIMARY DRINKING WATER
REGULATIONS AND THE STATE'S OPERATION OF A REGULATORY ENFORCEMENT
PROGRAM. EPA HAS "BACKUP" RESPONSIBILITY FOR ENFORCING ITS REGULATIONS.
IF A STATE DESIRES TO ASSUME ENFORCEMENT RESPONSIBILITY, QUALIFYING IT
FOR GRANTS, IT MUST UNDERTAKE THE PROGRAM PRESCRIBED IN EPA'S
REGULATIONS. THIS PROGRAM IS MORE EXTENSIVE THAN CORRECTING REGULATORY
VIOLATIONS AS THEY COME TO THE STATE'S ATTENTION. A STATE MUST, FOR
EXAMPLE, PERFORM PERIODIC SANITARY SURVEYS AND REVIEW DESIGN PLANS AND
SPECIFICATIONS OF WATER SYSTEMS. IN EFFECT, THEN, EPA'S PRIMARY
ENFORCEMENT RESPONSIBILITIES ARE MORE LIMITED THAN THE STATE'S PRIMARY
ENFORCEMENT RESPONSIBILITIES.
ALTHOUGH STATES ARE NOT REQUIRED TO ADOPT PRIMACY PROGRAMS, THEY ARE
STRONGLY ENCOURAGED TO DO SO. EPA PROVIDES TECHNICAL AND FINANCIAL
ASSISTANCE TO THOSE STATES WHICH HAVE, OR ARE IN THE PROCESS OF
ESTABLISHING, A PRIMACY PROGRAM. 42 U.S.C. SEC. 300J-1 (1978); 42
U.S.C. SEC. 300J-2 (1978). IF, DESPITE THESE INCENTIVES, A STATES DOES
NOT ASSUME PRIMACY, EPA BELIEVES IT IS REQUIRED TO DO SO. WE DISAGREE.
IN THIS REGARD, NO PROVISION IN THE ACT EXPLICITLY MANDATES THE EPA
TO ASSUME THE ROLE ASSIGNED TO THE STATES IF THE STATES DO NOT. THE
PROVISIONS OF THE ACT PROVIDE THE ADMINISTRATOR WITH MANY OF THE POWERS
STATES MUST HAVE BEFORE THEY CAN ASSUME PRIMACY. SEE E.G. 42 U.S.C.
SEC. 300G-3 (1978); 42 U.S.C. SEC. 300J-4(A)(1978); 42 U.S.C. SEC.
300J-4(B)(1)(1978); 42 U.S.C. SEC. 300I(A) (1978). HOWEVER, ONE CANNOT
INFER FROM THESE PROVISIONS THAT EPA MUST UNDERTAKE THE OPERATION OF A
STATE-TYPE PRIMARY ENFORCEMENT PROGRAM IN THOSE STATES WHICH ARE UNABLE
OR UNWILLING TO ACCEPT THAT RESPONSIBILITY. THE ACT AND ITS LEGISLATIVE
HISTORY EXPLICITLY STATE THAT WHEN EPA FINDS VIOLATIONS OF ITS DRINKING
WATER REGULATIONS, ITS REMEDY IS IN COURT, NOT IN OPERATING A STATE'S
ENFORCEMENT PROGRAM. COMPARE, FOR EXAMPLE, CONGRESS' HANDLING OF
UNDERGROUND WATER DRINKING SYSTEMS (SOMETHING NOT COVERED BY THIS
REPORT), 42 U.S.C. SEC. 300H. THERE, WHEN A STATE DOES NOT SUBMIT AN
APPROPRIATE UNDERGROUND INJECTION CONTROL PROGRAM, EPA IS REQUIRED TO
PRESCRIBE, BY REGULATION, A PROGRAM FOR THAT STATE AND TO COMMENCE A
CIVIL ACTION IN COURT IF THE STATE FAILS TO ENFORCE THE PROGRAM. 42
U.S.C. SEC. 300H-1(C) AND H-2. THUS, EVEN WHEN EPA IS AUTHORIZED TO
PRESCRIBE A STATE PROGRAM, CONGRESS DID NOT PROVIDE FOR IT TO OPERATE
THE PROGRAM WHEN THE STATE DOES NOT.
THE QUESTION REMAINS AS TO WHETHER THE EPA HAS THE AUTHORITY, AS
OPPOSED TO THE RESPONSIBILITY, TO ASSUME PRIMARY ENFORCEMENT AUTHORITY
IN THOSE STATES WHICH EITHER DO NOT HAVE OR ARE NOT PROPERLY
IMPLEMENTING THE ENFORCEMENT PROGRAM.
THE REPORT STATES THAT AS OF JUNE 1979, EPA HAS ASSUMED PRIMACY FOR
36,200 WATER SYSTEMS IN 7 STATES WHICH FOR SEVERAL REASONS HAVE DECIDED
NOT TO IMPLEMENT AN APPROPRIATE ENFORCEMENT PROGRAM OF THEIR OWN. EPA
IS THEN CRITICIZED FOR NOT IMPLEMENTING A PROGRAM AS EXTENSIVE AS THAT
OF STATES WITH PRIMACY. HOWEVER, WE FEEL THAT CONGRESS DID NOT INTEND
THAT EPA ASSUME THIS RESPONSIBILITY. FIRST, AS YOUR STAFF NOTES, OTHER
STATES MAY QUESTION WHETHER THEY SHOULD EXPEND THEIR RESOURCES ON THIS
PROGRAM WHEN EPA WILL IMPLEMENT IT (PROVIDED IT GETS THE NECESSARY
FUNDING FROM CONGRESS) IF THEY DO NOT. SECOND, AS NOTED IN THE REPORT,
THE COST OF A NATIONWIDE, FEDERALLY FUNDED AND OPERATED PRIMACY PROGRAM
FOR 250,000 DIFFERENT WATER SYSTEMS WOULD BE PROHIBITIVE.
EPA'S ROLE UNDER THE SAFE DRINKING WATER ACT WAS INTENDED, IN OUR
VIEW, TO BE MORE LIMITED. IT IS TRUE THAT UNDER THE ACT, THE
ADMINISTRATOR HAS THE AUTHORITY TO PERFORM EACH OF THE FUNCTIONS HE
REQUIRES OF THE STATES BEFORE HE GRANTS THEM PRIMARY ENFORCEMENT
RESPONSIBILITY. HE CAN EXERCISE THIS AUTHORITY BOTH IN STATES WHICH DO
AND STATES WHICH DO NOT HAVE PRIMACY. FOR EXAMPLE, HE CAN ENTER SYSTEMS
SUBJECT TO THE ACT FOR INSPECTION AND TESTING. 42 U.S.C. SEC.
300J-4(B). HE CAN TAKE ANY MEASURES THOUGHT NECESSARY TO PROTECT THE
PUBLIC WHEN A SYSTEM POSES AN IMMINENT DANGER TO ITS HEALTH. 42 U.S.C.
SEC. 300I(A). HE CAN COMMENCE A CIVIL ACTION (AFTER GIVING THE PROPER
AUTHORITIES A CHANCE TO CORRECT THE SITUATION IN STATES WITH PRIMACY)
WHEN HE FINDS A PUBLIC WATER SYSTEM IN VIOLATION OF NATIONAL DRINKING
WATER REGULATIONS. 42 U.S.C. SEC. 300G-3.
THESE PROVISIONS SHOULD BE READ IN LIGHT OF THE INTENTION OF CONGRESS
THAT THE STATES ARE TO THE PRIMARY ENFORCERS OF THE ACT. THE EPA'S ROLE
SHOULD BE ONE OF OVERSIGHT AND SUPERVISION, WITH BACK-UP ENFORCEMENT
RESPONSIBILITY. FOR EXAMPLE, THE SECTION AUTHORIZING THE ADMINISTRATOR
TO TEST AND INSPECT SYSTEMS SUBJECT TO THE ACT SHOULD BE READ AS
PROVIDING THE ADMINISTRATOR WITH THE ABILITY TO MAKE SURE THROUGH
SELECTIVE TESTING THAT THE STATES ARE PROPERLY IMPLEMENTING THEIR
ENFORCEMENT PROGRAMS, TO SUPPLEMENT A STATE'S ENFORCEMENT PROGRAM WHILE
IT IS IN THE PROCESS OF OBTAINING PRIMACY AND TO EMPOWER EPA TO ENTER
SYSTEMS WHICH IT HAS REASON TO BELIEVE ARE VIOLATING ITS DRINKING WATER
REGULATIONS. NOTHING IN THE ACT'S LEGISLATIVE HISTORY INDICATES ANY
CONGRESSIONAL INTENT THAT EPA, FOR EXAMPLE, PERFORM SYSTEMATIC
MONITORING OF ALL THE SYSTEMS IN STATES WHICH DO NOT HAVE PRIMACY.
ALSO, ACCORDING TO THE REPORT, EPA BELIEVES THE "ACT INTENDED THAT
EPA WOULD HAVE PRIMARY ENFORCEMENT RESPONSIBILITY FOR DRINKING WATER
SYSTEMS ON MOST INDIAN LANDS." THIS CONCLUSION PROBABLY STEMS FROM THE
FACT THAT NO PROVISION IN THE ACT COVERS THE OPERATION OF A STATE-TYPE
ENFORCEMENT PROGRAM ON THOSE LANDS. WE CANNOT AGREE WITH THIS
CONTENTION EITHER: NOTHING IN THE ACT OR ITS LEGISLATIVE HISTORY
SUGGESTS THAT EPA MUST ASSUME THIS RESPONSIBILITY. SECTION 300J-6 IS
THE ONLY PART OF THE ACT WHICH REFERS TO INDIAN LANDS. IT READS IN ITS
ENTIRETY:
"(C)(1) NOTHING IN THE SAFE DRINKING WATER AMENDMENTS OF 1977 SHALL
BE CONSTRUED TO ALTER OR EFFECT THE STATUS OF AMERICAN INDIAN LANDS OR
WATER RIGHTS NOR TO WAIVE ANY SOVEREIGNTY OVER INDIAN LANDS GUARANTEED
BY TREATY OR STATUTE.
"(2) FOR THE PURPOSES OF THIS CHAPTER THE TERM 'FEDERAL AGENCY' SHALL
NOT BE CONSTRUED TO REFER TO OR INCLUDE ANY AMERICAN INDIAN TRIBE, NOR
TO THE SECRETARY OF THE INTERIOR IN HIS CAPACITY AS TRUSTEE OF INDIAN
LANDS."
THIS SECTION CANNOT BE READ AS A MANDATE TO THE EPA TO CARRY OUT
PRIMACY PROGRAMS ON INDIAN LANDS OVER WHICH STATES DO NOT HAVE
JURISDICTION. WE UNDERSTAND FROM YOUR STAFF THAT AS A PRACTICAL MATTER,
EPA ASSUMED PRIMARY RESPONSIBILITY ON INDIAN LANDS IN ACCORDANCE WITH AN
INTERAGENCY AGREEMENT BETWEEN IT AND THE INDIAN HEALTH SERVICE,
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE. IF SO, THE REPORT SHOULD
SO STATE AND REFERENCES TO EPA'S STATUTORY RESPONSIBILITY TO OPERATE A
STATE-TYPE ENFORCEMENT PROGRAM ON INDIAN LANDS SHOULD BE DELETED.
AS WE HAVE DISCUSSED WITH YOUR STAFF, AT THIS TIME WE SEE NO POINT IN
ARGUING WITH EPA OVER ITS AUTHORITY. THE REPORT ADDRESSES PROBLEMS IN
THE SAFE DRINKING WATER ACT WHICH MUST BE RESOLVED BY LEGISLATION AND
THE ISSUE OF EPA'S ROLE CAN BE HANDLED IN THAT LEGISLATION.
THE BASIC POINT OF THE REPORT REMAINS: SEVERAL STATES HAVE REFUSED
TO ASSUME PRIMARY ENFORCEMENT RESPONSIBILITY AND THE PEOPLE IN THOSE
STATES PRESUMABLY DO NOT HAVE THE SAME DEGREE OF PROTECTION AS PEOPLE
LIVING IN STATES WITH PRIMACY. COMPOUNDING THE PROBLEM, EPA HAS NEITHER
THE CLEAR STATUTORY AUTHORITY NOR THE MONEY AND MANPOWER TO OPERATE THE
KIND OF ENFORCEMENT PROGRAM EXPECTED OF THE STATES.
THE PROBLEM IS THAT CONGRESS HAS NOT EXPRESSED ITSELF CLEARLY
CONCERNING STATES WHO WILL NOT OR CANNOT ASSUME PRIMACY. THE ACT ITSELF
DOES NOT CONTAIN SUFFICIENT INCENTIVES OR DISINCENTIVES TO PROD THE
STATES TO ACCEPT THAT RESPONSIBILITY. (IN FACT, YOUR STAFF INFORMALLY
ADVISES US THAT MANY MORE STATES ARE EXPECTED TO DROP OUT OF THE
PROGRAM.) CITING THE EXAMPLE, AMONG OTHERS, OF SECTION 176 OF THE CLEAN
AIR ACT, 42 U.S.C. SEC. 7506, THE REPORT CONCLUDES THAT MORE
DISINCENTIVES ARE NEEDED. WE HAVE NO LEGAL OBJECTION TO THIS
RECOMMENDATION.
THE PROPOSED INTERIM MEASURE, AS SUGGESTED BY THE AGENCY, THAT EPA BE
AUTHORIZED TO USE THOSE GRANT FUNDS WHICH NORMALLY WOULD HAVE BEEN
ALLOCATED TO A STATE HAD IT ASSUMED PRIMACY IN ORDER TO OPERATE ITS OWN
STATE-TYPE ENFORCEMENT PROGRAM MAY BE IMPLEMENTED ONLY IF CONGRESS
ENACTS LEGISLATION SPECIFICALLY AUTHORIZING THE USE OF FUNDS
APPROPRIATED FOR GRANTS FOR THAT PURPOSE. THUS, EPA WILL NEED DO MORE
THAN REASSESS THE RESOURCES NEEDED FOR THE OPERATION OF THIS PROGRAM:
IT WILL NEED TO SEEK SPECIFIC AUTHORITY TO USE THE FUNDS IN THIS MANNER.
IN ADDITION TO THE SECOND RECOMMENDATION, THEREFORE, YOU MAY WISH TO
SUGGEST TO THE CONGRESS THAT IT DECIDE, THROUGH THE ENACTMENT OF
LEGISLATION, THE ROLE IT EXPECTS EPA TO ASSUME, AT LEAST UNTIL, IF EVER,
THE DISINCENTIVES YOU RECOMMEND ARE ENACTED AND FULLY EFFECTIVE.
IN CONCLUSION, WHILE WE DISAGREE WITH SOME OF THE LEGAL POSITIONS
TAKEN IN THE DRAFT REPORT, WE HAVE INFORMALLY ADVISED YOUR STAFF THAT,
PROVIDED A NUMBER OF PARAGRAPHS ARE REWRITTEN, THE REPORT DRAWING, IN
ITS ESSENCE, THE SAME CONCLUSIONS AND MAKING THE SAME RECOMMENDATIONS,
CAN BE ISSUED. WE WILL BE HAPPY TO HELP MAKE ANY NECESSARY REVISIONS.
B-188770, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE REQUEST FOR PROPOSALS (RFP) INFORMED OFFERORS THAT
ALTERNATE FEATURES WOULD BE CONSIDERED IN PROPOSAL EVALUATION AND
ENCOURAGED PROPOSERS TO "PRESENT CREATIVE USES OF SYSTEMS" AND "STRIVE
FOR EXCELLENCE IN ARCHITECTURAL DESIGN" BEYOND SPECIFIED MINIMUM QUALITY
STANDARDS, RFP ADEQUATELY ADVISED OFFERORS THAT DESIGN INITIATIVES
EXCEEDING MINIMUM REQUIREMENTS WOULD BE ACCORDED ADDITIONAL EVALUATION
POINTS.
2. DESPITE PROTESTER'S LOWER OFFERED PRICE, GAO FINDS NOTHING
OBJECTIONABLE IN AWARD TO OFFEROR WHO HAD HIGHER PRICED PROPOSAL WHERE
AWARD IS BASED UPON LOWEST COST PER TECHNICAL QUALITY POINT RATIO,
OFFEROR'S PROPOSAL IS TECHNICALLY SUPERIOR AND RFP ADVISES OFFERORS OF
USE OF COST PER QUALITY POINT RATIO.
3. CLAIM FOR PROPOSAL PREPARATION COSTS ON BASIS THAT OFFEROR WAS
INDUCED TO SUBMIT PROPOSAL BECAUSE AGENCY FAILED TO STATE PROCUREMENT
INVOLVED NONAPPROPRIATED FUNDS IS DENIED SINCE EVEN IF AGENCY WAS
REQUIRED TO OR TRADITIONALLY SO INFORMED OFFERORS, FAILURE TO DO SO WAS
AT MOST DUE TO INADVERTENCE OR MERE NEGLIGENCE. TO RECOVER CLAIMANT
MUST SHOW THAT AGENCY SOLICITED PROPOSAL IN BAD FAITH OR CONSIDERED
PROPOSAL IN ARBITRARY OR CAPRICIOUS MANNER.
FORTEC CONSTRUCTORS:
FORTEC CONSTRUCTORS (FORTEC) PROTESTS THE AWARD OF A CONTRACT UNDER
REQUEST FOR PROPOSALS (RFP) NO. DACA21-77-R-0080, ISSUED BY THE U.S.
ARMY CORPS OF ENGINEERS (CORPS), SAVANNAH DISTRICT AND, IN ADDITION,
REQUESTS PROPOSAL PREPARATION COSTS. THE RFP SOLICITED PROPOSALS FOR
THE DESIGN AND CONSTRUCTION OF A COMMISSARY AT FORT STEWART, GEORGIA.
BASICALLY, FORTEC QUESTIONS THE AWARD OF A CONTRACT TO A HIGHER PRICED
OFFEROR IN LIGHT OF WHAT FORTEC BELIEVES WAS THE LIMITED DESIGN FREEDOM
ACCORDED OFFERORS BY THE RFP. FOR THE FOLLOWING REASONS WE ARE DENYING
THE PROTEST AS WELL AS THE CLAIM FOR PROPOSAL PREPARATION COSTS.
WE INITIALLY DISMISSED THIS PROTEST UPON RECEIPT OF ADVICE FROM THE
CORPS THAT NONAPPROPRIATED FUNDS WERE INVOLVED IN THIS PROCUREMENT,
BECAUSE THIS OFFICE DOES NOT SETTLE NONAPPROPRIATED FUND ACCOUNTS.
FORTEC CONSTRUCTORS, B-188770, APRIL 14, 1977, 77-1 CPD 260. HOWEVER,
UPON RECONSIDERATION, WE HELD THAT THE COMMISSARY SURCHARGE FUNDS USED
WERE APPROPRIATED AND SUBJECT TO OUR SETTLEMENT AUTHORITY. FORTEC
CONSTRUCTORS - RECONSIDERATION, 57 COMP. GEN. 311 (1978), 78-1 CPD 153.
THIS DECISION DEALS WITH THE MERITS OF FORTEC'S PROTEST.
IN ITS INITIAL REPORT ON THE MERITS, THE CORPS CONTENDED AMONG OTHER
THINGS THAT FORTEC'S PROTEST WAS UNTIMELY. HOWEVER, THE CORPS IGNORED
THIS ISSUE WHEN FORTEC FIRST SUBMITTED ITS PROTEST IN APRIL 1977 AND
INSTEAD CHOSE TO RELY ON THE JURISDICTIONAL ARGUMENT THAT
NONAPPROPRIATED FUNDS WERE INVOLVED. AT THIS POINT, IN VIEW OF THE
PROTRACTED HISTORY OF THIS CASE AND BECAUSE THE RECORD HAS BEEN FULLY
DEVELOPED, WE BELIEVE IT WOULD BE APPROPRIATE TO PROCEED WITHOUT
QUESTIONING THE TIMELINESS OF FORTEC'S PROTEST.
THE RFP SOLICITED PROPOSALS THROUGH A DESIGN AND COST COMPETITION ON
A FIRM-FIXED PRICE "TURNKEY" BASIS. OFFERORS WERE SPECIFICALLY ADVISED
THAT THE ARMY RESERVED THE RIGHT TO MAKE AN AWARD OF A CONTRACT TO OTHER
THAN THE PROPOSER SUBMITTING THE LOWEST PRICED OFFER.
THE RFP ALSO ADVISED OFFERORS THAT $5,559,372 WAS THE TOTAL AMOUNT
AVAILABLE FOR COMMITMENT TO THE CONTRACT, THAT OTHER DESIRABLE FEATURES
EXCEEDING RFP REQUIREMENTS COULD BE SUBMITTED "AS LONG AS AWARD CAN BE
MADE WITHIN ESTABLISHED CONTRACT FUNDS," AND THAT ALTERNATE FEATURES
WOULD BE CONSIDERED IN PROPOSAL EVALUATION.
THE RFP INSTRUCTIONS PROVIDED THAT:
"PROPOSAL EVALUATION CRITERIA. PROPOSAL EVALUATION WILL CONSIDER
BOTH TECHNICAL QUALITY AND COST. THE MAJOR TECHNICAL EVALUATION AREAS,
IN ORDER OF DECREASING IMPORTANCE ARE AS FOLLOWS:
ARCHITECTURAL
INTERIOR DESIGN
LANDSCAPE DESIGN
GRAPHIC DESIGN
CONSTRUCTION TIME
"PROPOSALS WILL BE REVIEWED TO DETERMINE COMPLIANCE WITH MINIMUM
REQUIREMENTS OF THE RFP AND NUMERICAL QUALITY RATINGS WILL BE ASSIGNED
FOR EACH DESIGN FACTOR. QUALITY RATINGS MAY BE ASSIGNED FOR ANY
SEPARATELY PRICED DESIRABLE FEATURES WHICH EXCEED THE REQUIREMENTS OF
THE RFP. AFTER THE QUALITY RATINGS OF PROPOSALS HAVE BEEN DETERMINED,
THEIR RELATIVE VALUE IN TERMS OF PROPOSED PRICE WILL BE ESTABLISHED BY
MEANS OF A PRICE/QUALITY RATIO:
$ PRICE = $PER QUALITY POINT
QUALITY RATING
"THE PRICE/QUALITY RATIO WILL BE CONSIDERED ONLY AS A STATISTICAL
INDICATOR IN COMPARING TECHNICAL QUALITY WITH PROPOSAL PRICES. CONTRACT
AWARD WILL BE MADE ON THE BASIS OF PRICE PER QUALITY POINT AND OTHER
TECHNICAL SALIENT FACTORS IN THE PROPOSAL, CONSIDERED IN THE
GOVERNMENT'S BEST INTEREST."
IN ADDITION, THE RFP LISTED AND EXPLAINED THE SUBCRITERIA INCLUDED
UNDER EACH OF THE MAJOR CRITERIA, AND INDICATED WHICH OF THE SUBCRITERIA
WOULD RECEIVE THE GREATEST EVALUATION EMPHASIS. HOWEVER, THE PRECISE
NUMERICAL POINT BREAKDOWN WAS NOT DISCLOSED.
THE CORPS, IN EVALUATING PROPOSALS, ASSIGNED A MINIMUM OF 6,000
QUALITY POINTS TO A PROPOSAL WHICH MET THE MINIMUM REQUIREMENTS OF THE
RFP. AN ADDITIONAL TOTAL OF 2,000 POINTS WAS AVAILABLE FOR A CREATIVE
DESIGN OR OTHER DESIRABLE FEATURES OFFERED WHICH EXCEEDED THE MINIMUM
RFP REQUIREMENTS. AWARD WAS MADE TO THE OFFEROR RECEIVING THE LOWEST
DOLLAR PER QUALITY POINT ($/Q.P.) RATIO, OBTAINED BY DIVIDING THE TOTAL
NUMBER OF TECHNICAL QUALITY POINTS INTO THE OFFEROR'S PROPOSED FIXED
PRICE.
FIFTEEN PROPOSALS WERE RECEIVED IN RESPONSE TO THE RFP, WITH THE
FOLLOWING PERTINENT RESULTS:
OFFEROR PRICE QUALITY POINTS RATIO
IRA H. HARDIN $4,584,436 7,353 623.48
X (LOWEST PRICE) 4,176,900 6,193 674.46
FORTEC 4,468,000 6,310 708.08
AWARD WAS MADE TO HARDIN.
FORTEC CONTENDS THAT THE RFP DID NOT ALLOW FOR MAJOR DESIGN
INNOVATIONS AND DID NOT PLACE OFFERORS ON NOTICE THAT A SUBSTANTIAL
PORTION OF THE TOTAL AVAILABLE TECHNICAL POINTS WOULD BE ASSIGNED FOR
DESIGN FEATURES EXCEEDING THE MINIMUM REQUIREMENTS OF THE RFP. IN
FORTEC'S VIEW, THE PLANS AND SPECIFICATIONS OF THE RFP ARE SO DETAILED
THAT "THEY LEAVE ONLY MINUTIA FOR 'DESIGN' BY EACH BIDDER." THUS, FORTEC
BELIEVES THE ARMY COULD CONSIDER TECHNICAL DESIGN INNOVATION ONLY TO A
LIMITED EXTENT AND THAT AWARD SHOULD HAVE BEEN BASED PRIMARILY ON PRICE.
THE RECORD DOES NOT SUPPORT FORTEC'S POSITION. WE BELIEVE THAT
SEVERAL QUESTIONS AND ANSWERS DURING A PREPROPOSAL CONFERENCE (WHICH
FORTEC ATTENDED), IN CONJUNCTION WITH THE LANGUAGE OF THE RFP INDICATE
THAT OFFERORS HAD A WIDER LATITUDE IN PREPARING THEIR TECHNICAL
PROPOSALS THAN FORTEC INDICATES. FOR EXAMPLE, QUESTIONS RELATING TO
DESIGN AND CONSTRUCTION WERE RAISED AND ANSWERED AS FOLLOWS:
Q. "SHOULD WE MATCH EXTERIOR MATERIALS ON THE POST EXCHANGE AND HOW
MUCH VARIATION IS DESIRED IN EXTERIOR DESIGN?"
A. "(BRICK TYPE IS SPECIFIED) TO MATCH THE BRICK USED ON THE
ADJACENT PX BUILDING. PAGE 3-1 *** REQUIRES THE EXTERIOR DESIGN AND
SELECTION OF MATERIALS TO BE COMPATIBLE WITH THE ADJACENT PX BUILDING
*** BUT NOT MATCH. SUPERIORITY OF EXTERIOR DESIGN WILL BE ONE OF THE
BASES FOR EVALUATION."
Q. "IS REINFORCED CONCRETE, LOAD BEARING, TILT WALL EXTERIOR WALL
CONSTRUCTION ACCEPTABLE?"
A. "WALL CONSTRUCTION IS ONLY LIMITED BY THE RFP PERFORMANCE
CRITERIA AND THE REQUIREMENT THAT THEY BE FACED WITH BRICK."
Q. "ARE ANY SPECIFIC ENERGY CONSERVATION GUIDELINES TO BE FOLLOWED?"
A. "NO."
Q. "IS THERE A PREFERENCE FOR A SPECIFIC DECOR THEME AT INTERIOR
ELEVATIONS?"
A. "NO. THIS IS A DESIGN OPPORTUNITY."
Q. "WHAT KINDS OF CEILING SYSTEMS ARE REQUIRED?"
A. "THE MINIMUM IS STATED (IN THE RFP). OTHER SYSTEMS OR
CONFIGURATIONS WOULD BE EVALUATED AS PART OF INTERIOR DESIGN."
THESE ANSWERS SUGGEST TO US THAT OFFERORS WERE CLEARLY INFORMED THAT
WITHIN THE REQUIREMENTS OF THE SPECIFICATIONS, THEY HAD BROAD LATITUDE
IN THE DESIGN AND CONSTRUCTION OF THE FACILITY. MOREOVER, THE RFP
STATED THAT:
*** FROM AN ARCHITECTURAL AND LANDSCAPE DESIGN STANDPOINT, THE RFP
DESCRIBES THE FUNCTIONAL SCOPE AND MINIMUM QUALITY STANDARDS OF THE
COMMISSARY FACILITY. HOWEVER, IN HIS SUBMITTAL, THE PROPOSER IS
ENCOURAGED TO PRESENT CREATIVE USES OF SYSTEMS AND MATERIALS WITHIN THE
SCOPE AND STANDARDS REQUIRED BY THE RFP. THE PROPOSER IS ALSO
ENCOURAGED TO STRIVE FOR EXCELLENCE IN ARCHITECTURAL DESIGN. THIS
REQUIRES A COMMITMENT BY PROPOSERS AS WELL AS THE GOVERNMENT TO
ARCHITECTURAL QUALITY, WHICH INCLUDES THE PHYSICAL LINKAGE OF
ARCHITECTURE TO THE SURROUNDING COMMUNITY, AND THE DETAILS OF DESIGN
THAT AFFECT THE BUILDING'S USERS. SPECIAL EMPHASIS SHOULD BE PLACED ON
THE QUALITY OF THE ARCHITECTURAL DESIGN ***."
WE FIND THAT THIS RFP, WHICH FULLY ADVISED OFFERORS THAT THE RFP
DESCRIBES A "MINIMUM QUALITY STANDARD," THAT QUALITY RATINGS MAY BE
ASSIGNED FOR DESIRABLE FEATURES WHICH EXCEED THE REQUIREMENTS OF THE
RFP, AND THAT OFFERORS ARE "ENCOURAGED TO PRESENT CREATIVE USES OF
SYSTEMS" AND "TO STRIVE FOR EXCELLENCE IN ARCHITECTURAL DESIGN," PLACED
PROSPECTIVE OFFERORS ON NOTICE THAT DESIGN INITIATIVES BEYOND THE
MINIMUM REQUIREMENTS OF THE RFP WOULD BE ACCORDED ADDITIONAL POINTS.
SEE AUTOMATED SYSTEMS CORPORATION, B-184835, FEBRUARY 23, 1976, 76-1 CPD
124. WE BELIEVE IT WOULD HAVE BEEN UNREASONABLE FOR OFFERORS TO ASSUME,
IN LIGHT OF THE RFP STATEMENT AND EVALUATION CRITERIA, THAT ONE PROPOSAL
OFFERING SIGNIFICANT DESIGN FEATURES BEYOND THAT OF ANOTHER PROPOSAL
WOULD NOT RECEIVE A HIGHER RATING. SEE DIGITAL EQUIPMENT CORPORATION,
B-183614, JANUARY 14, 1976, 76-1 CPD 21.
FORTEC ALSO QUESTIONS HOW ANY PROPOSAL IN THIS AREA COULD BE SO MUCH
BETTER THAN ANOTHER THEREBY WARRANTING THE ADDITIONAL EXPENDITURE
ASSOCIATED WITH HARDIN'S PROPOSAL. IN THIS REGARD, THE RECORD SHOWS
THAT THE EVALUATORS FOUND SUBSTANTIAL VARIATIONS IN THE PROPOSALS
SUBMITTED WITH RESPECT TO EXTERIOR DESIGN TREATMENT (THE RFP ONLY
REQUIRED THE NEW BUILDING BE "COMPATIBLE" WITH EXISTING STRUCTURES),
INTERNAL LIGHTING, AIR CONDITIONING, HEATING AND REFRIGERATION SYSTEMS,
ENERGY CONSERVATION CONCEPTS, STRUCTURAL SYSTEMS, LANDSCAPE DESIGN, ETC.
HARDIN WAS CLEARLY VIEWED AS SUPERIOR OVERALL AS 5 OF THE 6 EVALUATORS
SCORED HARDIN'S TECHNICAL PROPOSAL HIGHER THAN ANY OTHER PROPOSAL.
IN LIGHT OF THAT TECHNICAL SUPERIORITY, AND THE USE OF THE
PRICE/QUALITY RATIO FORMULA, THE VALIDITY OF WHICH WE HAVE RECOGNIZED,
SEE, E.G., TGI CONSTRUCTION CORPORATION, ET AL., 54 COMP. GEN. 775
(1975), 75-1 CPD 167; NHA HOUSING, INC., B-179196, APRIL 24, 1974, 74-1
CPD 211, WE PERCEIVE NOTHING OBJECTIONABLE IN AN AWARD TO AN OFFEROR
PROPOSING TO GIVE THE GOVERNMENT THE MOST FOR ITS MONEY. THE PROPRIETY
OF MAKING AN AWARD ON THE BASIS OF OTHER THAN LOW PRICE IN THIS TYPE OF
NEGOTIATED PROCUREMENT IS, OF COURSE, WELL ESTABLISHED. SEE SHAPELL
GOVERNMENT HOUSING, INC. AND GOLDRICH AND KEST, INC., 55 COMP. GEN. 839
(1976), 76-1 CPD 161; BELL AEROSPACE COMPANY, 55 COMP. GEN. 244 (1975),
75-2 CPD 168.
PROPOSAL PREPARATION COSTS
AN OFFEROR'S ENTITLEMENT TO THE COSTS OF PREPARING ITS OFFER ARISES
FROM THE GOVERNMENT'S RESPONSIBILITY IN CONSIDERING PROPOSALS SUBMITTED
IN RESPONSE TO A SOLICITATION. SCOT, INCORPORATED, B-189345, AUGUST 1,
1978, 78-2 CPD 82. THE STANDARD IS WHETHER THE GOVERNMENT'S CONDUCT WAS
ARBITRARY AND CAPRICIOUS TOWARDS THE BIDDER/OFFEROR. KECO INDUSTRIES,
INC., 492 F. 2D 1200 (CT. CL. 1974). HERE THE CLAIMANT SEEKS TO
CHARACTERIZE THE GOVERNMENT'S ACTION AS ARBITRARY AND CAPRICIOUS BECAUSE
THE RFP DID NOT IDENTIFY THE SOURCE OF THE PROJECT FUNDING AS BEING A
NONAPPROPRIATED FUND PROCUREMENT.
SPECIFICALLY, FORTEC ALLEGES THAT IF IT HAD BEEN APPRISED THAT THE
SOLICITATION INVOLVED NONAPPROPRIATED FUNDS, IT WOULD NOT HAVE SUBMITTED
A PROPOSAL. FORTEC MAINTAINS IT WOULD NOT HAVE SUBMITTED A BID FOR A
NONAPPROPRIATED FUND PROCUREMENT SINCE THIS TYPE OF PROCUREMENT IS "NOT
SUBJECT TO STANDARD PROCEDURES, INCLUDING REVIEW BY (THE GENERAL
ACCOUNTING) OFFICE." ADDITIONALLY, FORTEC ALLEGES THAT THE PROCURING
AGENCY CUSTOMARILY IDENTIFIES IN ITS SOLICITATION WHETHER
NONAPPROPRIATED FUNDS ARE INVOLVED AND THE FAILURE TO DO SO WAS SUCH
"THAT THE AGENCY IN MISREPRESENTING THE SOLICITATION WAS RESPONSIBLE FOR
SUCH ARBITRARY AND CAPRICIOUS ACTION WITH RESPECT TO A BASIC RIGHT OF
FORTEC AS WILL SUPPORT REIMBURSEMENT OF FORTEC'S BID PREPARATION COSTS."
THUS FORTEC CLAIMS THAT EVEN THOUGH THIS OFFICE ULTIMATELY CONCLUDED
THAT APPROPRIATED FUNDS WERE INVOLVED IN THE SOLICITATION, THE AGENCY
TREATED THE PROCUREMENT FROM THE OUTSET AS A NONAPPROPRIATED FUND
PROCUREMENT, "CONTROVERTED" GAO'S JURISDICTION AND MADE IMMEDIATE AWARD
TO HARDIN, THUS DEPRIVING FORTEC OF "ITS RIGHT TO A MEANINGFUL REVIEW NO
LESS THAN IF THE SOLICITATION HAD IN FACT INVOLVED APPROPRIATED FUNDS."
WE ARE, OF COURSE, UNAWARE OF THE PRIVATE BUSINESS JUDGMENTS WHICH
ANY FIRM MIGHT MAKE WITH RESPECT TO PREPARING A PROPOSAL IN AN ATTEMPT
TO OBTAIN THE AWARD OF A GOVERNMENT CONTRACT, WHETHER THE SOURCE OF THE
PROJECT FUNDING IS APPROPRIATED OR NONAPPROPRIATED. THE RESPONSIBILITY
FOR THESE DECISIONS MUST REST WITH THE OFFEROR, AND IF IN ITS JUDGMENT
IT DOES NOT CHOOSE TO COMPETE FOR NONAPPROPRIATED FUND CONTRACTS, IT
COULD EASILY DETERMINE THE SOURCE OF THE FUNDS BY REQUESTING SUCH
INFORMATION FROM THE CONTRACTING OFFICER. WE ARE AWARE OF NO STATUTE OR
REGULATION WHICH REQUIRES AN AGENCY TO ADVISE OFFERORS OF THE PRECISE
SOURCE OF THE FUNDS AVAILABLE FOR OBLIGATION. THE CITATION OF AN
APPROPRIATION IN AN RFP OR CONTRACT IS BASICALLY FOR ADMINISTRATIVE
PURPOSES; AN ERRONEOUS CITATION CONFERS NO RIGHTS ON A PROSPECTIVE
CONTRACTOR.
MOREOVER, EVEN IF THE AGENCY'S STANDARD PRACTICE WAS TO ADVISE
PROSPECTIVE OFFERORS OF NONAPPROPRIATED FUND PROCUREMENTS, AS ALLEGED,
(A MATTER WHICH THE AGENCY DISPUTES), THE OMISSION OF THE REFERENCE TO
NONAPPROPRIATED FUNDS WOULD APPEAR TO BE THE RESULT OF SIMPLE
NEGLIGENCE, AS THERE IS NO EVIDENCE IN THE RECORD TO SUGGEST THAT THE
AGENCY INTENTIONALLY SOUGHT TO MISLEAD OFFERORS CONCERNING THE SOURCE OF
THE FUNDS. MERE NEGLIGENCE OR LACK OF DUE DILIGENCE DOES NOT, STANDING
ALONE, RISE TO THE LEVEL OF BAD FAITH OR ARBITRARY OR CAPRICIOUS ACTION.
AIRFLOTE, INCORPORATED, B-179197, NOVEMBER 4, 1974, 74-2 CPD 236; SEE
ABS DUPLICATORS, INC., RECONSIDERATION (SECOND), B-187604, JUNE 30,
1977, 77-1 CPD 464; CF. GROTON PIPING CORPORATION AND THAMES ELECTRIC
COMPANY (JOINT VENTURE)-CLAIM FOR BID PREPARATION COSTS, B-185766, JUNE
3, 1977, 77-1 CPD 389, WHERE WE DENIED BID PREPARATION COSTS TO A FIRM
WHICH RECEIVED AN INVITATION FOR BIDS WHICH MISTAKENLY CONTAINED A SMALL
BUSINESS SET-ASIDE RESTRICTION. THE JOINT VENTURE, A SMALL BUSINESS
CONCERN, WAS THE SECOND LOW BIDDER; THE LOW BIDDER/AWARDEE, A LARGE
BUSINESS. THERE MUST BE A SHOWING OF WILLFUL ACTION OR GROSS NEGLIGENCE
BY THE GOVERNMENT. MORGAN BUSINESS ASSOCIATES, B-188387, MAY 16, 1977,
77-1 CPD 344. SEE ALSO FIBER MATERIALS, INC., 57 COMP. GEN. 527 (1978),
78-1 CPD 422; WILLIAM D. FREEMAN, M.D., B-191050, FEBRUARY 10, 1978,
78-1 CPD 120; A.R.F. PRODUCTS, INC., 56 COMP. GEN. 201 (1976), 76-2
CPD 541; AMPEX CORPORATION, ET AL., B-183739, NOVEMBER 14, 1975, 75-2
CPD 304.
THE PROTEST AND THE CLAIM FOR PROPOSAL PREPARATION COSTS ARE DENIED.
B-193103, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST IS MOOT WHERE, EVEN IF SUSTAINED, PROTESTER WOULD BE UNABLE
TO PERFORM ACCORDING TO TERMS OF ITS OFFER.
CANDID REALTY, INC.:
CANDID REALTY, INC. (CANDID), HAS PROTESTED THE REJECTION OF ITS
OFFER OF REALTY FOR LEASING BY THE GENERAL SERVICES ADMINISTRATION (GSA)
UNDER SOLICITATION FOR OFFERS (SFO) NO. GS-05B-12832.
ON DECEMBER 29, 1977, GSA ISSUED THE SUBJECT SFO TO PROCURE LEASING
SPACE TO HOUSE THE GREAT LAKES ENVIRONMENTAL RESEARCH LABORATORY,
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), UNITED STATES
DEPARTMENT OF COMMERCE.
AFTER MONTHS OF DELAY, CANDID WAS FORCED TO EXTEND ITS OPTION FOR
LAND CONTROL REGARDING THE OFFERED PARCEL FROM MAY 5 THROUGH JULY 5,
1978, AND THEN FROM JULY 5 FOR A "REASONABLE PERIOD." ON OCTOBER 4,
1978, WITH AWARD NOT EXPECTED UNTIL DECEMBER, CANDID FILED ITS PROTEST
WITH OUR OFFICE ON THE GROUNDS OF GSA'S DELAY AND ITS FAILURE TO NOTIFY
OFFERORS OF THE REASONS FOR DELAY. FINALLY, GSA REJECTED ALL OFFERS ON
NOVEMBER 22, 1978, TO REEXAMINE ITS SPECIFICATIONS IN LIGHT OF EXECUTIVE
ORDER NO. 12,072, 43 FED. REG. 36,869 (1978), AND MATERIAL CHANGES IN
THE USER AGENCY'S REQUIREMENTS.
THE RECORD INDICATES THAT ON SEPTEMBER 25, 1978, CANDID RECEIVED
NOTICE THAT ITS OPTION HAD BEEN CANCELED AND ITS EARNEST MONEY DEPOSIT
ON THE SITE LAND FORFEITED. UNDER THESE CIRCUMSTANCES, EVEN IF WE WERE
TO SUSTAIN THE PROTEST, CANDID WOULD BE UNABLE TO PERFORM ACCORDING TO
THE TERMS OF ITS OFFER. CONSEQUENTLY, OUR OFFICE CONSIDERS THE MATTER
MOOT. MATANUSKA TELEPHONE ASSOCIATION, INC.; INTERIOR TELEPHONE
COMPANY, B-179500, JULY 25, 1974, 74-2 CPD 55.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-193362, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WG-10 EMPLOYEE CLAIMS RETROACTIVE TEMPORARY PROMOTION AND BACKPAY FOR
DETAIL TO HIGHER-GRADED POSITION. CLAIM CAN BE ALLOWED IN PART BECAUSE
NEW EVIDENCE INDICATES THAT EMPLOYEE WAS TWICE DETAILED TO AN
ESTABLISHED HIGHER-GRADED POSITION AND PERFORMED DUTIES OF THE HIGHER
GRADE. EMPLOYEE'S SECOND DETAIL CAN ONLY BE CONSIDERED AFTER EXPIRATION
OF NEW 120-DAY PERIOD. THE FIRST DETAIL IS PARTIALLY TIME BARRED UNDER
31 U.S.C. SEC. 71A.
HERMAN G. WEEKS - CLAIM FOR BACKPAY FOR DETAIL TO HIGHER-GRADED
POSITION:
THIS ACTION CONCERNS AN APPEAL BY MR. HERMAN G. WEEKS FROM A DENIAL
BY OUR CLAIMS DIVISION OF HIS CLAIM FOR A RETROACTIVE TEMPORARY
PROMOTION AND BACKPAY. MR. WEEKS' CLAIM SHOULD BE ALLOWED ON THE BASIS
OF NEW EVIDENCE.
MR. WEEKS STATES THAT HE PERFORMED THE DUTIES OF A WG-11 EMPLOYEE
FROM APRIL 1968 THROUGH AUGUST 1972, IN THE ELECTRONICS DIVISION, WARNER
ROBINS AIR LOGISTIC CENTER. THUS, HE CONTENDS HE WOULD BE ENTITLED TO A
TEMPORARY PROMOTION AND BACKPAY ON THE BASIS OF OUR TURNER-CALDWELL
DECISIONS, 55 COMP. GEN. 539 (1975), AND 56 ID. 427 (1977), WHICH HELD
THAT EMPLOYEES ARE ENTITLED TO TEMPORARY PROMOTIONS FOR EXTENDED DETAILS
TO HIGHER-LEVEL POSITIONS, PROVIDED THEY MEET CERTAIN REQUIREMENTS.
A PORTION OF MR. WEEKS' CLAIM IS BARRED FROM OUR CONSIDERATION AS
UNTIMELY FILED UNDER THE BARRING ACT, 31 U.S.C. SEC. 71A (1976). MR.
WEEKS DOES NOT DISPUTE THIS. OUR CLAIMS DIVISION DENIED MR. WEEKS'
CLAIM BECAUSE THE EMPLOYING AGENCY MAINTAINED THAT THE DUTIES HE
PERFORMED WERE AT ALL TIMES THOSE OF A WG-10 EMPLOYEE. IN ADDITION, MR.
WEEKS HAD FAILED TO PROVIDE SUFFICIENT EVIDENCE TO SHOW THAT HE WAS, IN
FACT, DETAILED TO A HIGHER-GRADED POSITION.
IN SUPPORT OF HIS PRESENT APPEAL, MR. WEEKS HAS FURNISHED THIS OFFICE
A COPY OF A COMPUTER PRINTOUT AS EVIDENCE OF HIS PERFORMANCE OF WG-11
DUTIES. HIS EMPLOYING AGENCY ALSO SENT ADDITIONAL INFORMATION IN
RESPONSE TO OUR REQUEST FOR AN EXPLANATION OF THE SIGNIFICANCE OF THE
PRINTOUT. A LETTER OF JANUARY 16, 1978, IN RESPONSE TO MR. WEEKS'
CLAIM, AND SIGNED BY THE CHIEF, MAINTENANCE POSITION MANAGEMENT UNIT,
CIVILIAN PERSONNEL BRANCH, WARNER ROBINS AIR LOGISTICS CENTER STATES IN
PERTINENT PART THAT:
"SUBJECT: CLAIM FOR BACKPAY
"C. WAS THE CLAIMANT DETAILED TO AN ESTABLISHED, CLASSIFIED
POSITION?
(XX) YES ( ) NO ( ) UNABLE TO DETERMINE
"D. THE ESTABLISHED, CLASSIFIED POSITION(S) TO WHICH CLAIMANT WAS
DETAILED WAS/WERE:
"DATE TITLE, SERIES, POSITION
FROM TO & GRADE NUMBER ORGANIZATION
21 APR 68 9 JAN 73 RADAR-TELEVISION MDIEB-E 34 MDIEB
REPAIRER,
WG-2657-11
10 JAN 73 30 AUG 73 ELECTRONICS MECHANIC, MIP-8 MIPEB
WG-2614-11
"E. POSITIONS TO WHICH CLAIMANT WAS OFFICIALLY ASSIGNED DURING
PERIOD OF CLAIM:
"DATE TITLE, SERIES, PSN
FROM TO & GRADE POSN NR ORGN SENS FC AFSC
21 APR 68 20 MAR 71 RADAR REPAIRER MDIEB-39 MDIEB S 2750 32350
WB-2657-10
21 MAR 71 23 JUN 73 RADAR REPAIRER MIPEB-12 MIPEB S 2762 32350
WB-2657-10
24 JUN 73 30 AUG 73 ELECTRONICS MIP-9 MIPEB S 2762 32651A"
MECHANIC
WG-2614-10
THUS, THE AGENCY'S RECORDS SUPPORT MR. WEEKS' CONTENTION THAT HE WAS
IN FACT DETAILED TO AN ESTABLISHED, CLASSIFIED HIGHER-GRADED POSITION.
THE CHIEF, DIRECTORATE OF MAINTENANCE, STATES THAT HIS CERTIFICATION
OF MR. WEEKS' PERFORMANCE OF DUTIES FOR THE PERIOD JUNE 15, 1971, TO
AUGUST 30, 1973, WAS MISINTERPRETED. HE SAYS THAT:
"*** AFTER REVIEWING MY CERTIFICATION, IT STATED THAT MR. WEEKS DID
PERFORM THE DUTIES HE INDICATED ON THE ASG-15 T.V. ALTHOUGH IN HIS
STATEMENT MR. WEEKS REFERRED TO THIS WORK AS WG-11, IT HAD IN FACT BEEN
CLASSIFIED AT THE WG-10 LEVEL. THAT IS THE REASON FOR MY STATEMENT THAT
THE GRADE LEVEL WOULD BE DETERMINED BY POSITION MANAGEMENT.
"*** THE TARGET POSITION COMPUTER (TPC) WORK HAD BEEN CLASSIFIED AT
THE WG-11 LEVEL HOWEVER MR. WEEKS DID NOT PERFORM THIS LEVEL WORK ON THE
TPC. THERE WAS NO CERTIFICATION THAT HE PERFORMED WORK ON THIS ITEM."
THE LETTER FROM THE CHIEF, DIRECTORATE OF MAINTENANCE, INDICATES A
DISCREPANCY AS TO THE WORK PERFORMED BY MR. WEEKS AND ITS PROPER
CLASSIFICATION. THE RECORD SHOWS THAT MR. WEEKS WAS OFFICIALLY ASSIGNED
AS A RADAR REPAIRER, WB-10, FROM APRIL 1968 TO JUNE 1973, AND A WG-10
ELECTRONICS MECHANIC FROM JUNE 1973 TO AUGUST 1973. HE WAS DETAILED AS
A RADAR-TELEVISION REPAIRER, WG-11, FROM APRIL 21, 1968, TO JANUARY 9,
1973, AND AS AN ELECTRONICS MECHANICS, WG-11, FROM JANUARY 10 TO AUGUST
30, 1973. THE DEPARTMENT OF THE AIR FORCE POSITION DESCRIPTION FOR A
RADAR-TELEVISION REPAIRER INDICATES THAT THE EMPLOYEE'S DUTIES AND
RESPONSIBILITIES CONSIST, INTER ALIA, OF OPERATING AND MAINTAINING A
T.V. LOOP MOCKUP TO PERFORM OPERATIONAL TESTS ON ASG-15 T.V. COMPONENTS.
THESE DUTIES CORRESPOND TO THOSE PERFORMED BY MR. WEEKS. FURTHER, MR.
WEEKS HAS FURNISHED SIGNED AFFIDAVITS FROM HIS FELLOW EMPLOYEES WHICH
ATTEST TO HIS PERFORMANCE OF DUTIES WHICH CORRESPOND TO THAT OF A WG-11,
RADAR-TELEVISION REPAIRER, AS WELL AS TO THE DUTIES AND RESPONSIBILITIES
OF A WG-11, ELECTRONICS MECHANIC. FURTHER, MR. WEEKS' COMPUTERIZED
"EXPERIENCE BRIEF" INDICATES THAT HE WAS DETAILED FROM AUGUST 1969 TO
AUGUST 1973 AND ACQUIRED THE SKILLS OF A WG-11, ELECTRONICS MECHANIC
DURING THAT PERIOD. IT ALSO DOES NOT SEEM PLAUSIBLE THAT AN AGENCY
WOULD DETAIL AN EMPLOYEE TO A HIGHER-GRADED POSITION WITHOUT THE
EXPECTATION THAT THE EMPLOYEE WOULD PERFORM HIGHER-GRADED DUTIES. THUS,
THE RECORD TAKEN AS A WHOLE INDICATES THAT MR. WEEKS DID IN FACT PERFORM
THE HIGHER-GRADED DUTIES TO WHICH HE WAS ASSIGNED DURING THE PERIOD IN
QUESTION.
MR. WEEKS WAS DETAILED MORE THAN ONE TIME AND EACH DETAIL IS TREATED
AS A SEPARATE PERSONNEL ACTION FOR THE PURPOSE OF OF APPLYING OUR
TURNER-CALDWELL DECISIONS, SUPRA. THUS, MR. WEEKS' SECOND DETAIL AS AN
ELECTRONICS MECHANIC CAN ONLY BE CONSIDERED AS TO THAT PORTION AFTER THE
EXPIRATION OF 120 DAYS FROM JANUARY 10, 1973, TO THE END OF THE DETAIL.
FRED T. LARSEN, B-186711, APRIL 17, 1979. THE FIRST DETAIL CAN BE
CONSIDERED ONLY AS TO THAT PORTION THAT IS NOT TIME BARRED BY 31 U.S.C.
SEC. 71A (1976).
ACCORDINGLY, THE CLAIM MAY BE PAID CONSISTENT WITH THE ABOVE
DISCUSSION IF OTHERWISE PROPER.
B-194321, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. A DEPARTMENT OF THE INTERIOR (DOI) CERTIFYING OFFICER, MAY
CERTIFY A VOUCHER SIGNED BY THE UNITED STATES GOVERNMENT COMPTROLLER FOR
AMERICAN SAMOA TO REIMBURSE THE GOVERNMENT OF AMERICAN SAMOA FOR PAYMENT
FOR OFFICE SUPPLIES AND TELEPHONE SERVICES PURCHASED FOR THE UNITED
STATES GOVERNMENT COMPTROLLER'S OFFICE, IN VIEW OF THE GOVERNMENT
COMPTROLLER'S ACKNOWLEDGEMENT THAT THE SUPPLIES AND SERVICES WERE
RECEIVED.
2. FEDERAL ADMINISTRATIVE FUNDS MAY NOT BE ADVANCED TO THE
GOVERNMENT OF AMERICAN SAMOA IN ANTICIPATION OF FUTURE PURCHASES OF
SUPPLIES AND SERVICES TO BE MADE BY AMERICAN SAMOA ON BEHALF OF THE
UNITED STATES GOVERNMENT COMPTROLLER, IN THE ABSENCE OF SPECIFIC
LEGISLATIVE AUTHORITY. THE ECONOMY ACT, 31 U.S.C. SEC. 686 (1976) WHICH
AUTHORIZES ADVANCE PAYMENTS, APPLIES ONLY TO TRANSACTIONS BETWEEN
FEDERAL GOVERNMENT DEPARTMENTS OR ESTABLISHMENTS.
REIMBURSEMENT OF THE GOVERNMENT OF AMERICAN SAMOA FOR MONIES IT PAID
FOR OFFICE SUPPLIES AND TELEPHONE SERVICES FOR THE UNITED STATES
GOVERNMENT COMPTROLLER FOR AMERICAN SAMOA:
A CERTIFYING OFFICER OF THE DEPARTMENT OF THE INTERIOR (DOI) HAS
REQUESTED AN OPINION ON THE PROPRIETY OF CERTIFYING FOR PAYMENT A
VOUCHER FOR REIMBURSEMENT OF THE GOVERNMENT OF AMERICAN SAMOA (AMERICAN
SAMOA) FOR $4,312.12. THE PAYMENTS WERE MADE BY AMERICAN SAMOA FOR
SUPPLIES AND SERVICES PROCURED BY IT, FOR THE USE OF THE UNITED STATES
GOVERNMENT COMPTROLLER FOR AMERICAN SAMOA. THE CERTIFYING OFFICER IS
CONCERNED BECAUSE "INITIAL EXAMINATION OF CLAIMS AND SUBSEQUENT
DISBURSEMENT WERE PERFORMED BY LOCAL GOVERNMENT EMPLOYEES FROM LOCAL
REVENUES." HE QUESTIONS WHETHER HE MAY RELY ON THE ADEQUACY OF THE
EXAMINATION OF CLAIMS PERFORMED BY THE LOCAL GOVERNMENT.
ASSUMING WE FIND THAT THE VOUCHER MAY BE CERTIFIED FOR PAYMENT, THE
CERTIFYING OFFICER ALSO ASKS WHETHER FEDERAL ADMINISTRATIVE FUNDS MAY BE
ADVANCED TO AMERICAN SAMOA IN ANTICIPATION OF FUTURE PURCHASES, UNDER AN
ARRANGEMENT SIMILAR TO ADVANCES BETWEEN FEDERAL AGENCIES UNDER THE
ECONOMY ACT, 31 U.S.C. SEC. 686 (1976).
ACCORDING TO DOI, THE GOVERNMENT COMPTROLLER ASKED AMERICAN SAMOA TO
PROCURE AND PURCHASE OFFICE SUPPLIES, AND SERVICES SUCH AS FURNITURE,
AUTOMOBILE RENTALS, AND TELEPHONE SERVICE FOR HIS OFFICE. AMERICAN
SAMOA THEN PROCURED THESE ITEMS FROM PRIVATE SOURCES OR, AS WAS THE CASE
WITH THE TELEPHONE SERVICES, PROVIDED THEM ITSELF AND PAID FOR THEM WITH
ITS OWN MONIES. AFTER THE SUPPLIES AND SERVICES WERE PROVIDED, A
VOUCHER WAS PREPARED, PRESUMABLY BY THE GOVERNMENT COMPTROLLER'S OFFICE,
IDENTIFYING GENERALLY THE PURCHASES MADE AND THE SUPPLIES AND SERVICES
RECEIVED.
THE PORTION OF THE VOUCHER WHICH CONSTITUTES A CERTIFICATION BY AN
AUTHORIZED ADMINISTRATIVE OR CERTIFYING OFFICER THAT "THE ABOVE ARTICLES
WERE RECEIVED AND ACCEPTED OR THE SERVICES PERFORMED AS STATED AND
SHOULD BE CHARGED TO THE APPROPRIATIONS AND/OR FUNDS AS INDICATED BELOW
..." WAS SIGNED BY THE GOVERNMENT COMPTROLLER, MR. S. D. JONES, JR. MR.
JONES IS APPARENTLY NOT AN AUTHORIZED CERTIFYING OFFICER.
THE VOUCHERS AND ASSOCIATED INVOICES WERE THEN SENT TO DOI IN
WASHINGTON, D.C., FOR CERTIFICATION BY AN AUTHORIZED CERTIFYING OFFICER.
UPON CERTIFICATION, IF WE AGREE THAT IT IS PROPER, AMERICAN SAMOA WILL
BE REIMBURSED FROM MONIES APPROPRIATED TO DOI'S OFFICE OF TERRITORIAL
AFFAIRS, FOR, AMONG OTHER THINGS, ADMINISTRATIVE EXPENSES OF THE UNITED
STATES GOVERNMENT COMPTROLLER FOR AMERICAN SAMOA. PUB. L. NO. 95-465,
92 STAT. 1288-89 (1978). IT IS THE CERTIFYING OFFICER IN THE OFFICE OF
THE SECRETARY OF THE INTERIOR TO WHOM THE VOUCHER WAS PRESENTED WHO HAS
SUBMITTED THIS MATTER FOR ADVANCE DECISION.
WITH RESPECT TO THE FIRST QUESTION, WE CONCLUDE, IN THIS INSTANCE,
THAT THE DOI CERTIFYING OFFICER MAY PROPERLY CERTIFY THE QUESTIONED
VOUCHER IF IT IS OTHERWISE PROPER.
ORGANIC LEGISLATION HAS NEVER BEEN ENACTED BY CONGRESS FOR AMERICAN
SAMOA, AS IT HAS BEEN FOR OTHER UNITED STATES TERRITORIES. SINCE 1929
RESPONSIBILITY FOR THE ADMINISTRATION OF THE ISLANDS HAS RESIDED WITH
THE PRESIDENT OR THE PRESIDENT'S APPOINTEE. 48 U.S.C. SEC. 1661(C)
(1976). IN 1951 THAT RESPONSIBILITY WAS CONFERRED UPON THE SECRETARY OF
THE INTERIOR WHO IS EMPOWERED TO "TAKE SUCH ACTION AS MIGHT BE NECESSARY
AND APPROPRIATE ... FOR THE ADMINISTRATION OF CIVIL GOVERNMENT IN
AMERICAN SAMOA." EXEC. ORDER NO. 10264, 16 FED. REG. 6419 (1951), 48
U.S.C. SEC. 1662 NOTE (1976). PURSUANT TO SECRETARY OF THE INTERIOR
ORDER NO. 3009 (42 FED. REG. 48398-99, SEPT. 23, 1977), THE POSITION OF
UNITED STATES GOVERNMENT COMPTROLLER FOR AMERICAN SAMOA WAS ESTABLISHED
IN THE OFFICE OF THE SECRETARY OF THE INTERIOR. THE GOVERNMENT
COMPTROLLER IS A FEDERAL EMPLOYEE, WHOSE OFFICE IS FUNDED, AS NOTED
ABOVE, WITH APPROPRIATIONS TO DOI.
THE FACT THAT THE GOODS OR SERVICES WERE INITIALLY PROCURED AND PAID
FOR BY AMERICAN SAMOA IS NOT AN IMPEDIMENT TO CERTIFICATION. AMERICAN
SAMOA IS HERE IN THE POSTURE OF A CONTRACTOR PROVIDING SERVICES AND
SUPPLIES TO THE UNITED STATES. THE DOI CERTIFYING OFFICER IS NOT TO
RELY ON THE ADMINISTRATIVE ACTIONS OF AMERICAN SAMOA, BUT HE MAY CERTIFY
THE VOUCHER IF, AS IS THE CASE HERE, A RESPONSIBLE UNITED STATES
OFFICIAL - THE GOVERNMENT COMPTROLLER - HAS VERIFIED THE RECEIPT OF THE
GOODS OR SERVICES.
HAD THE GOVERNMENT COMPTROLLER (OR HIS REPRESENTATIVE) NOT
ACKNOWLEDGED RECEIPT OF THE SUPPLIES AND SERVICES, CERTIFICATION WOULD
NOT BE CONSISTENT WITH THE RESPONSIBILITIES OF CERTIFYING OFFICERS
DESCRIBED IN 31 U.S.C. SECS. 82C AND 82F. HOWEVER, THE GOVERNMENT
COMPTROLLER'S STATEMENTS ATTESTING THAT THE GOODS WERE RECEIVED AND THE
SERVICES PERFORMED MAY BE RELIED UPON AS A BASIS FOR CERTIFICATION OF
THE VOUCHER.
ALTHOUGH WE HAVE NO OBJECTION TO THE METHOD USED TO PROCURE THE
SUPPLIES AND SERVICES UNDER THE CIRCUMSTANCES DESCRIBED, WE KNOW OF NO
AUTHORITY FOR DOI TO ADVANCE FEDERAL ADMINISTRATIVE FUNDS TO AMERICAN
SAMOA UNDER AN ARRANGEMENT SIMILAR TO ADVANCES BETWEEN FEDERAL AGENCIES
UNDER THE ECONOMY ACT, FOR FUTURE PURCHASES OF OFFICE SUPPLIES AND
SERVICES FOR THE GOVERNMENT COMPTROLLER'S OFFICE. SINCE ADVANCE
PAYMENTS ARE PROHIBITED UNLESS AUTHORIZED BY STATUTE, (31 U.S.C. SEC.
529 (1976)), THE ARRANGEMENT PROPOSED BY THE CERTIFYING OFFICER IS NOT
AUTHORIZED. AMERICAN SAMOA IS NOT COVERED BY THE ECONOMY ACT, THAT ACT
BEING LIMITED TO "ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT
OF THE GOVERNMENT, OR ANY BUREAU OR OFFICE THEREOF ..." 31 U.S.C. SEC.
686 (1976).
B-194364, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST FILED WITH OUR OFFICE WITHIN 10 WORKING DAYS AFTER BASIS
FOR PROTEST IS KNOWN (AGENCY'S REFUSAL TO REFER QUESTION OF PROTESTER'S
RESPONSIBILITY TO SBA) IS TIMELY PURSUANT TO OUR BID PROTEST PROCEDURES,
4 C.F.R. SEC. 20.2(B)(2) (1979).
2. WHERE SOLICITATION CALLS FOR INFORMATION CONCERNING BIDDER'S
COLLEGE EDUCATION, PROFESSIONAL EXPERIENCE AND THOROUGH KNOWLEDGE OF
SCIENTIFIC LITERATURE, SUCH INFORMATION PERTAINS SOLELY TO BIDDER'S
RESPONSIBILITY.
3. AGENCY DETERMINATION THAT SMALL BUSINESS CONCERN DOES NOT HAVE
CAPACITY TO PERFORM REQUIRED WORK MUST BE REFERRED TO SBA FOR
CONSIDERATION UNDER CERTIFICATE OF COMPETENCY PROCEDURE, SINCE
APPLICABLE LAW AND REGULATIONS NO LONGER ALLOW EXCEPTION TO THIS
REQUIREMENT BASED ON URGENCY. AGENCY'S FAILURE TO DO SO WAS CONTRARY TO
SMALL BUSINESS ACT, 15 U.S.C. SEC. 637(B)(7) (1976), AS AMENDED BY PUB.
L. NO. 95-89.
4. TIME LIMITATIONS OF BID PROTEST PROCEDURES ARE NOT APPLICABLE TO
CLAIMS FOR BID PREPARATION COSTS IN TIMELY PROTESTS. ACCORDINGLY, SUCH
CLAIM CAN BE RAISED BY PROTESTER DURING CONSIDERATION OF PROTEST.
5. PROTEST PROSECUTION COSTS ARE NOT RECOVERABLE AGAINST AGENCY.
6. CLAIM FOR BID PREPARATION COSTS IS DENIED SINCE AGENCY FAILURE TO
SUBMIT MATTER TO SBA, ALTHOUGH IT VIOLATED SMALL BUSINESS ACT, WAS NOT,
IN THIS INSTANCE, ARBITRARY AND CAPRICIOUS BUT BASED UPON ERRONEOUS
BELIEF THAT REFERRAL WAS NOT NECESSARY ON BASIS OF URGENCY AND SBA'S
CONCURRENCE THEREIN.
MARTEL LABORATORIES, INC.:
MARTEL LABORATORIES, INC. (MARTEL), A SMALL BUSINESS, PROTESTS THE
AWARD OF TWO CONTRACTS UNDER INVITATION FOR BIDS (IFB) NO. FSE43-9-61-53
ISSUED ON JANUARY 16, 1979, BY THE DEPARTMENT OF COMMERCE, NATIONAL
MARINE FISHERIES SERVICE (COMMERCE), FOR FIELD INVESTIGATION REPORTS ON
PERMIT APPLICATIONS, WITHIN THE STATE OF FLORIDA, HAVING A POTENTIAL
IMPACT ON FISHERY RESOURCES AND THEIR HABITAT.
THE IFB DIVIDED THE PROJECT INTO 11 ITEMS, BY COUNTIES, AND PERMITTED
THE BIDDERS TO SUBMIT BIDS ON ANY OR ALL OF THE ITEMS. PARAGRAPH 20 -
BIDDER QUALIFICATION, UNDER SOLICITATION INSTRUCTIONS AND CONDITIONS,
PROVIDED:
"*** BIDDER MUST MEET THE FOLLOWING REQUIREMENTS OR EQUIVALENT, IN
ORDER TO QUALIFY FOR THIS CONTRACT:
"A) BACCALAURATE DEGREE IN BIOLOGICAL SCIENCE WITH EMPHASIS ON MARINE
AND/OR ESTUARINE ECOLOGY FROM AN ACCREDITED UNIVERSITY.
"B) AT LEAST 2 YEARS PROFESSIONAL EXPERIENCE IN APPLIED ESTUARINE OR
MARINE ECOLOGY, EITHER FIELD SURVEYS OR RESEARCH.
"C) THOROUGH KNOWLEDGE OF SCIENTIFIC LITERATURE DEALING WITH
ESTUARINE AND MARINE ECOSYSTEMS IN THE SOUTHEASTERN U.S., PARTICULARLY
THAT RELATING TO HUMAN IMPACTS."
BID OPENING WAS HELD, AS SCHEDULED, ON FEBRUARY 13, 1979. ON
FEBRUARY 15 MARTEL WAS INFORMED THAT IT WAS THE APPARENT LOW BIDDER ON
FOUR ITEMS IF MULTIPLE AWARDS WERE MADE AND APPARENT LOW OVERALL BIDDER
IF ONLY ONE CONTRACT WAS AWARDED. HOWEVER, COMMERCE REQUESTED
ADDITIONAL INFORMATION CONCERNING MARTEL'S PROPOSED PERSONNEL TO
DEMONSTRATE THAT THEY SATISFY THE QUALIFICATIONS SET FORTH BY PARAGRAPH
20, SUPRA. ON THE FOLLOWING DAY COMMERCE RECEIVED SUCH INFORMATION,
WHICH IT DETERMINED INADEQUATE, AND, CONSEQUENTLY, MADE A REQUEST FOR
PERMISSION TO SPEAK WITH MR. THOMAS DAHL, MARTEL'S APPARENT PRIMARY
INVESTIGATOR. SHORTLY THEREAFTER, A TELEPHONE INTERVIEW WAS HELD WITH
MR. DAHL WHO WAS ADVISED OF THE "UNFAVORABLE OUTCOME," AND, THEN, IN A
DIFFERENT TELEPHONE CALL COMMERCE EXPLAINED ITS RATIONALE, WHY MARTEL
DID NOT MEET THE REQUIREMENTS OF PARAGRAPH 20, TO ANOTHER REPRESENTATIVE
OF MARTEL. WE NOTE THAT COMMERCE IN ITS SUMMARY OF THE LATTER TELEPHONE
CALL STATES THAT THE CONVERSATION "WAS ENDED WITH A PROMISE TO GET BACK
WITH (MARTEL) REGARDING OUR DECISION."
SUBSEQUENTLY, MARTEL, IN TWO LETTERS DATED FEBRUARY 19 (BOTH
HAND-DELIVERED TO COMMERCE), EXPRESSED ITS CONCERN REGARDING THE
PROCEDURES UTILIZED BY COMMERCE IN ASSESSING MARTEL'S TECHNICAL
COMPETENCE. THE TENOR OF THESE LETTERS WAS THAT MARTEL WAS CAPABLE OF
PERFORMING THE WORK AS SPECIFIED AND WAS EXTREMELY UPSET WITH ANY
SUPPOSITION THAT MARTEL MIGHT DEFAULT. ALSO, MARTEL REQUESTED THAT
COMMERCE SEND MARTEL'S BID TO THE SMALL BUSINESS ADMINISTRATION (SBA)
FOR A CERTIFICATE OF COMPETENCY (COC) DETERMINATION. WE ARE AWARE THAT
IN ONE OF THE AFOREMENTIONED LETTERS MARTEL STATED THAT IT ENTERED A
PROTEST WITH OUR OFFICE. HOWEVER, THIS PROVED NOT TO BE THE CASE AND
THE RECORD IS NOT CLEAR AS TO WHY SUCH WAS INCLUDED IN THE LETTER. ON
MARCH 1 MARTEL WAS ADVISED THAT ITS BID HAD NOT AND WOULD NOT BE
SUBMITTED TO THE SBA. THEN, MARTEL BY LETTER DATED MARCH 9, AND
RECEIVED ON MARCH 12, PROTESTED TO OUR OFFICE.
MARTEL'S POSITION IS THAT COMMERCE SHOULD HAVE SUBMITTED MARTEL'S BID
TO THE SBA FOR A COC DETERMINATION. MARTEL SUPPORTS ITS POSITION BY
ARGUING THAT PARAGRAPH 20 CONCERNS A BIDDER'S RESPONSIBILITY NOT BID
RESPONSIVENESS AS ARGUED BY COMMERCE. MOREOVER, MARTEL CONTENDS THAT
REFERRAL TO SBA FOR A COC DETERMINATION IS NONDISCRETIONARY. ALSO,
MARTEL OBJECTS TO COMMERCE'S AWARD OF THE CONTRACTS NOTWITHSTANDING ITS
PROTEST TO OUR OFFICE. INITIALLY MARTEL REQUESTED THAT THE CONTRACTS BE
TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. HOWEVER, IN LIGHT OF
THE FACT THAT PERFORMANCE OF BOTH CONTRACTS, AS OF JUNE 1, WAS CLOSE TO
COMPLETION, MARTEL HAS WITHDRAWN THIS REQUEST AND NOW ASKS FOR
REIMBURSEMENT OF ITS BID PREPARATION COSTS ($465) AND ITS PROTEST
PROSECUTION COSTS ($1,680), WHICH INCLUDES COSTS OF (A) FILING THE
PROTEST, (B) ACCUMULATING AND REVIEW OF RELEVANT MATERIAL, (C) FILING
COMMENTS, (D) ATTENDING CONFERENCE AND (E) LEGAL FEES.
AT THE CONFERENCE, HELD IN OUR OFFICE ON JUNE 1, 1979, COMMERCE, FOR
THE FIRST TIME, QUESTIONED THE TIMELINESS OF THE INSTANT PROTEST.
COMMERCE ARGUES THAT MARTEL HAD KNOWLEDGE OF THE BASIS FOR PROTEST,
COMMERCE'S REVIEW OF MARTEL'S TECHNICAL COMPETENCE, ON FEBRUARY 19,
1979. IN SUPPORT OF ITS ARGUMENT, COMMERCE POINTS TO THE FOLLOWING
STATEMENT MADE BY MARTEL IN A FEBRUARY 19 LETTER:
"THE IRREGULAR AND UNFAIR PROCEDURES BEING USED BY YOUR OFFICE TO
REVIEW MARTEL'S TECHNICAL COMPETENCE HAS CAUSED US TO ENTER A BID
PROTEST TO THE GENERAL ACCOUNTING OFFICE AS OF FEBRUARY 19, 1979."
THEREFORE, COMMERCE CONTENDS THAT SINCE SECTION 20.2 (B)(2) OF OUR
BID PROTEST PROCEDURES (PROCEDURES), 4 C.F.R. PART 20 (1979), REQUIRES A
PROTEST TO "BE FILED NO LATER THAN 10 (WORKING) DAYS AFTER THE BASIS FOR
PROTEST IS KNOWN, OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER,"
MARTEL'S PROTEST FILED ON MARCH 12 IS UNTIMELY. MOREOVER, COMMERCE
BELIEVES THAT IN LIGHT OF THE ABOVE STATEMENT, "MARTEL CANNOT NOW DENY
THAT IT HAD KNOWLEDGE OF THE BASIS FOR ITS PROTEST *** ON FEBRUARY 19,
1979."
IN THE ALTERNATIVE, COMMERCE ARGUES THAT MARTEL IS QUESTIONING THE
PROPRIETY OF PARAGRAPH 20 AND IS THEREFORE UNTIMELY PURSUANT TO SECTION
20.2(B)(1) OF OUR PROCEDURES SINCE MARTEL DID NOT PROTEST PRIOR TO BID
OPENING. COMMERCE'S ARGUMENT IS BASED ON ITS CONTENTION THAT IT WAS
APPARENT FROM THE FACE OF THE IFB THAT COMMERCE WAS TREATING BIDDER
QUALIFICATIONS (PARAGRAPH 20) DIFFERENTLY FROM RESPONSIBILITY FACTORS
SINCE SUCH FACTORS WERE SET FORTH IN A SEPARATE PARAGRAPH, NUMBER 22.
PARAGRAPH 22 - BASIS OF AWARD PROVIDES:
"BIDS WILL BE ACCEPTED ON ONE, ALL OR ANY COMBINATION OF GEOGRAPHICAL
AREAS AS SET FORTH IN THE SCHEDULE (PAGE 10). AWARD WILL BE MADE TO
THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR
BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER
FACTORS CONSIDERED. RESPONSIBILITY WILL BE DETERMINED BY THE FOLLOWING
FACTORS:
"A) HAVE ADEQUATE FINANCIAL RESOURCES OR THE ABILITY TO OBTAIN THEM.
"B) BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED PERFORMANCE
SCHEDULE.
"C) HAVE A SATISFACTORY RECORD OF PERFORMANCE.
"D) HAVE A SATISFACTORY RECORD OF INTEGRITY AND BUSINESS ETHICS.
"E) BE OTHERWISE QUALIFIED AND ELIGIBLE TO RECEIVE AN AWARD UNDER
APPLICABLE LAWS AND REGULATIONS.
"F) ANY OTHER FACTOR DEEMED RELEVANT BY THE CONTRACTING OFFICER."
NOTWITHSTANDING THE TIMELINESS ARGUMENTS, COMMERCE ARGUES THAT ITS
TREATMENT OF PARAGRAPH 20 AS AN ISSUE OF RESPONSIVENESS WAS A "RATIONAL
ACTION." IN SUPPORT OF ITS POSITION, COMMERCE CONTENDS:
"THE CONTRACTOR MUST HAVE THE NECESSARY QUALIFICATIONS TO ENABLE IT
TO CONDUCT A RAPID SURVEY AND ACCURATELY DISCERN FROM ITS FIELD
OBSERVATIONS THE ECOLOGICAL EFFECTS OF THE PROPOSED PROJECT UPON THE
RESOURCES AND THEIR HABITAT. THIS ABILITY TO DISCERN THE IMPLICATIONS
OF THE PROJECT RESTS DIRECTLY UPON THE EDUCATION, TRAINING, EXPERIENCE,
KNOWLEDGE OF THE LITERATURE, AND THE PROFESSIONAL JUDGMENT OF THE
CONTRACTOR.
"RECOGNIZING THAT THE PRODUCT OF THIS PROCUREMENT WAS NOT THE REPORTS
PER SE, BUT RATHER THE TECHNICAL QUALIFICATIONS OF THE CONTRACTORS
PERSONNEL, THE CONTRACTING OFFICER AND NMFS TECHNICAL PERSONNEL
FASHIONED THE REQUIRED BIDDER QUALIFICATIONS NECESSARY TO ACHIEVE THE
REQUIRED END PRODUCT.
"A CLOSE EXAMINATION OF THE PROCUREMENT SHOWS THAT IT CAN BEST BE
DESCRIBED AS AN ADVERTISED PROFESSIONAL SERVICES CONTRACT. NMFS WAS NOT
BUYING THE FIELD INVESTIGATION REPORTS AS A PRODUCT BUT WAS INSTEAD
PROCURING THE PROFESSIONAL QUALIFICATIONS AND EXPERTISE OF THE
SUCCESSFUL BIDDER. SINCE THE BIDDER QUALIFICATIONS WERE THE ESSENTIAL
CHARACTERISTICS OF THE PRODUCT BEING PROCURED THE CONTRACTING OFFICER
RATIONALLY DETERMINED THAT THESE CHARACTERISTICS WERE OF A
RESPONSIVENESS NATURE."
WITH RESPECT TO THE CHANGE IN RELIEF SOUGHT BY MARTEL, COMMERCE
BELIEVES THAT MARTEL, KNOWING THE SHORT PERFORMANCE PERIOD OF THE
CONTRACT AND THAT AWARD WAS MADE TO OTHER BIDDERS, CANNOT NOW REVISE ITS
REQUEST SINCE "IT WAS INCUMBENT UPON (MARTEL) TO INCLUDE ALL OF ITS
POSSIBLE REMEDIES IN ITS ORIGINAL FILING WITH GAO."
ALSO, WE NOTE THAT ON FEBRUARY 20, 1979, COMMERCE MADE A FORMAL
DETERMINATION THAT "MARTEL IS NOT RESPONSIVE TO THE IFB BECAUSE NONE OF
THE PERSONNEL OFFERED HAVE THE REQUISITE QUALIFICATIONS TO BE CONSIDERED
FOR AWARD OF A CONTRACT." COMMERCE BASED THIS DECISION ON ITS FINDING
THAT:
"THE QUALIFICATION STATEMENTS SUBMITTED BY MARTEL WITH ITS BID AND BY
SUPPLEMENT ON 2/16/79 DO NOT SHOW THAT THE PERSONNEL PROPOSED TO DO THE
WORK HAVE THE REQUISITE QUALIFICATIONS B) AND C) ABOVE." SEE PARAGRAPH
20, SUPRA.
THEN, COMMERCE MADE A DETERMINATION THAT RECEIPT OF THE FIELD
INVESTIGATION REPORTS WAS URGENTLY NEEDED TO ENABLE COMMERCE TO REPLY TO
THE CORPS OF ENGINEERS AND THUS REDUCE THE POSSIBILITY OF ADVERSE
CHANGES TO THE WETLANDS. CONSEQUENTLY, COMMERCE AWARDED THE CONTRACTS
WITHOUT REFERRING MARTEL'S MATERIAL OR THAT OF ANY OTHER DISAPPOINTED
BIDDER TO THE SBA FOR A COC.
WITH RESPECT TO THE TIMELINESS ISSUE, WE DISAGREE WITH COMMERCE'S
ARGUMENTS. ON FEBRUARY 19, MARTEL, IN TWO LETTERS, OBJECTED TO WHAT IT
CHARACTERIZED AS COMMERCE'S IRREGULAR BID EVALUATION PROCEDURES FOR
ASSESSING ITS TECHNICAL COMPETENCE AND REQUESTED THAT ITS BID BE
SUBMITTED TO THE SBA FOR A COC DETERMINATION. IT IS APPARENT THAT THE
CATALYST FOR THESE LETTERS WAS COMMERCE'S TELEPHONE INTERVIEW, DESCRIBED
BY MARTEL AS "A THREE-QUESTION QUIZ," WITH MR. DAHL. NEVERTHELESS, IT
IS CLEAR FROM MARTEL'S LETTERS THAT MARTEL'S PRIMARY CONCERN WAS HAVING
COMMERCE SUBMIT THE QUESTION OF ITS RESPONSIBILITY TO THE SBA, AND,
THUS, FINALLY SETTLE THIS MATTER. MOREOVER, WE NOTE THAT MARTEL'S
LETTERS DO NOT QUESTION THE PROPRIETY OF PARAGRAPH 20 NOR SET FORTH ANY
SPECIFIC COMPLAINT CONCERNING COMMERCE'S BID EVALUATION. IT APPEARS
THAT MARTEL, IN ITS LETTERS, WAS EXPRESSING ITS FRUSTRATION WITH
COMMERCE AND PUSHING FOR SBA'S RESOLUTION OF THIS MATTER. WHY MARTEL
MENTIONED THAT IT PROTESTED TO OUR OFFICE IS UNCLEAR, BUT THAT DOES NOT
ALTER THE THRUST OF THE LETTERS. IN ADDITION, MARTEL IN ITS JUNE 5
RESPONSE TO THE CONFERENCE, WHEN SPECIFICALLY ADDRESSING THE TIMELINESS
ISSUE, STATED:
"IT WAS THE FAILURE TO REFER THE MATTER TO SBA THAT IS *** THE BASIS
FOR THE GAO PROTEST UNDER CONSIDERATION. MARTEL DID NOT BECOME AWARE OF
*** (COMMERCE'S) DECISION NOT TO SEEK AN SBA REVIEW UNTIL A TELEPHONE
CONVERSATION OF MARCH 1, 1979 WITH THE *** CONTRACTING OFFICER."
THE RECORD IS CLEAR THAT MARCH 1 IS THE FIRST TIME MARTEL WAS TOLD
THAT COMMERCE WOULD NOT BE SUBMITTING THE QUESTION OF ITS RESPONSIBILITY
TO THE SBA. BASED ON THE FOREGOING, THE PROTEST RECEIVED IN OUR OFFICE
ON MARCH 12 WAS TIMELY FILED WITHIN 10 WORKING DAYS OF THE DATE UPON
WHICH THE GROUNDS FOR PROTEST WERE KNOWN.
CONCERNING MARTEL'S OBJECTION TO THE AWARD OF THE CONTRACTS
NOTWITHSTANDING ITS PROTEST TO OUR OFFICE, WE ARE ADVISED THAT THE
CONTRACTS WERE AWARDED ON FEBRUARY 26, 1979. THEREFORE, SINCE MARTEL'S
PROTEST WAS NOT FILED UNTIL MARCH 12, AWARD OF THE CONTRACTS WAS MADE
PRIOR TO MARTEL'S PROTEST TO OUR OFFICE.
THE MAIN ISSUE IN THIS PROTEST IS WHETHER THE QUESTION OF MARTEL'S
RESPONSIBILITY SHOULD HAVE BEEN SUBMITTED TO THE SBA FOR A COC
DETERMINATION. IN OTHER WORDS, DOES PARAGRAPH 20, SUPRA, REFER TO
RESPONSIBILITY, ABILITY OR CAPACITY TO PERFORM ALL OF THE CONTRACT'S
REQUIREMENTS WITHIN THE LIMITATIONS PRESCRIBED IN THE INVITATION, OR IS
IT CONCERNED WITH THE RESPONSIVENESS OF A BID, WHETHER A BIDDER HAS
UNEQUIVOCABLY OFFERED TO PROVIDE THE REQUESTED PERFORMANCE IN TOTAL
CONFORMANCE WITH THE TERMS AND SPECIFICATIONS OF THE INVITATION? SEE J.
BARANELLO AND SONS, 58 COMP. GEN. ___ (B-192221, MAY 9, 1979), 79-1 CPD
322.
FOR THE REASONS THAT FOLLOW, WE FIND THAT PARAGRAPH 20, SUPRA, REFERS
TO RESPONSIBILITY. IT IS WELL SETTLED THAT SOLICITATION PROVISIONS
REQUIRING THE SUBMISSION OF INFORMATION NECESSARY TO DETERMINE
COMPLIANCE WITH SPECIFIED BIDDER EXPERIENCE REQUIREMENTS, WHICH INCLUDES
FORMAL TRAINING, PERTAIN SOLELY TO THE BIDDERS' RESPONSIBILITY AND THAT
SUCH INFORMATION NEED NOT BE SUBMITTED WITH THE BID BUT MAY BE FURNISHED
UP TO THE TIME OF AWARD. THERMAL CONTROL, INC., B-190906, MARCH 30,
1978, 78-1 CPD 252. THIS IS SO REGARDLESS OF SOLICITATION LANGUAGE
REQUIRING INCLUSION OF THE INFORMATION FOR THE BID TO BE RESPONSIVE,
BECAUSE A CONTRACTING AGENCY CANNOT MAKE A MATTER OF RESPONSIBILITY INTO
A QUESTION OF RESPONSIVENESS BY THE TERMS OF THE SOLICITATION. HAUGHTON
ELEVATOR DIVISION, RELIANCE ELECTRIC COMPANY, 55 COMP. GEN. 1051, 1055
(1976), 76-1 CPD 294; 52 COMP. GEN. 389, 391-392 (1972). THEREFORE,
CLAUSES "A" (BACCALAUREATE DEGREE) AND "B" (PROFESSIONAL EXPERIENCE)
PERTAIN TO A BIDDER'S RESPONSIBILITY. WITH RESPECT TO CLAUSE "C"
(THOROUGH KNOWLEDGE OF SCIENTIFIC LITERATURE) WE CONCLUDE THAT SUCH ALSO
REFERS TO A BIDDER'S RESPONSIBILITY. IT IS CLEAR THAT WHETHER A BIDDER
HAS A THOROUGH KNOWLEDGE OF THESE FACTORS HAS A DIRECT BEARING ON THE
BIDDER'S OVERALL CAPACITY TO PERFORM THE PROSPECTIVE CONTRACT.
IN ANY EVENT, THE RECORD INDICATES THAT MARTEL, AS REQUIRED,
SUBMITTED, WITH ITS BID, A BIDDER'S QUALIFICATION SHEET WHICH LISTED
SEVEN OF MARTEL'S SENIOR BIOLOGISTS AVAILABLE FOR THIS PROJECT AND THEIR
EDUCATION, ECOLOGICAL EXPERIENCE, KNOWLEDGE OF SCIENTIFIC LITERATURE AND
YEARS OF PROFESSIONAL EXPERIENCE. ALSO, WE NOTE THAT MARTEL'S BID DID
NOT TAKE ANY EXCEPTIONS TO THE REQUIREMENTS SET FORTH IN THE IFB.
THEREFORE, MARTEL'S BID WAS RESPONSIVE AND THE ONLY QUESTION REMAINING
WAS MARTEL'S RESPONSIBILITY.
THE QUESTION OF A SMALL BUSINESS CONCERN'S RESPONSIBILITY IS REQUIRED
TO BE REFERRED TO THE SBA PURSUANT TO THE SMALL BUSINESS ACT, 15 U.S.C.
SEC. 637(B) (7) (1976), AS AMENDED BY PUB. L. NO. 95-89, 91 STAT. 557,
EFFECTIVE AUGUST 4, 1977. UNDER THIS ACT, THE SBA IS EMPOWERED TO
CERTIFY CONCLUSIVELY TO GOVERNMENT PROCUREMENT OFFICIALS WITH RESPECT TO
ALL ELEMENTS OF RESPONSIBILITY. SEE COM-DATA, INC., B-191289, JUNE 23,
1978, 78-1 CPD 459. UNTIL RECENTLY, THE FEDERAL PROCUREMENT REGULATIONS
(FPR) PERMITTED AN EXCEPTION TO THIS STATUTORY REQUIREMENT BASED ON
URGENCY SO LONG AS A LEVEL ABOVE THAT OF THE CONTRACTING OFFICER
CONCURRED IN THE DECISION TO MAKE AWARD TO OTHER THAN THE LOW BIDDER.
SEE FPR SEC. 1-1.708-2(A)(1) (1964 ED. AMEND. 174). HOWEVER, THE SMALL
BUSINESS ACT, AS AMENDED BY PUB. L. NO. 95-89, MAKES NO EXCEPTION FOR
URGENCY AS A GROUND FOR NOT REFERRING THE QUESTION OF A SMALL BUSINESS'
RESPONSIBILITY TO THE SBA. THEREFORE, EFFECTIVE JUNE 14, 1978, FPR WAS
AMENDED TO ELIMINATE THE URGENCY EXCEPTION IT HAD PREVIOUSLY ALLOWED.
SEE FPR SEC. 1-1.708-2(A)(1) (1964 ED. AMEND. 192).
CLEARLY, THEN, COMMERCE, AFTER HAVING ESSENTIALLY DETERMINED THAT
MARTEL WAS NOT RESPONSIBLE, HAD NO BASIS FOR NOT REFERRING THE QUESTION
OF MARTEL'S RESPONSIBILITY TO THE SBA. HOWEVER, IN VIEW OF THE PRESENT
STAGE OF THE PROCUREMENT, WE CANNOT REQUEST THAT COMMERCE SEND MARTEL'S
BID TO THE SBA FOR ITS CONSIDERATION OF WHETHER ISSUANCE OF A COC IS
APPROPRIATE IN THIS CASE SINCE TO DO SO WOULD ONLY BE AN ACADEMIC
EXERCISE AND SERVE NO USEFUL PURPOSE. NONETHELESS, BY SEPARATE LETTER
WE ARE POINTING OUT TO THE SECRETARY OF COMMERCE THE DEFICIENCIES IN
THIS PROCUREMENT TO PREVENT A RECURRENCE IN THE FUTURE.
IN REGARD TO MARTEL'S REVISION OF THE RELIEF IT SEEKS, COMMERCE HAS
OBJECTED ESSENTIALLY ON THE GROUNDS THAT SUCH REVISION IS UNTIMELY. WE
DISAGREE. THE TIME LIMITATIONS FOUND IN OUR PROCEDURES DO NOT APPLY TO
BID PREPARATION CLAIMS. SEE GENERALLY: SCOT, INCORPORATED, 57 COMP.
GEN. 119, 124 (1977) 77-2 CPD 425 - WHEREIN WE SUSTAINED A PROTEST, BUT
WERE UNABLE TO GRANT REMEDIAL AID, AND ADVISED THE PROTESTER THAT WE
WOULD CONSIDER A CLAIM FOR BID PREPARATION COSTS IF SUBMITTED AND
PROPERLY DOCUMENTED AS TO THE AMOUNT. HOWEVER, WE WILL ONLY CONSIDER
SUCH CLAIMS IN CONNECTION WITH TIMELY PROTESTS. DWC LEASING COMPANY,
B-186481, NOVEMBER 12, 1976, 76-2 CPD 404.
CONCERNING MARTEL'S REQUEST FOR PROTEST PROSECUTION COSTS, WE HAVE
HELD THAT THE COSTS OF PURSUING A PROTEST ARE NOT COMPENSABLE.
DOCUMENTATION ASSOCIATES - CLAIM FOR PROPOSAL PREPARATION COSTS,
B-190238, JUNE 15, 1978, 78-1 CPD 437. ACCORDINGLY, MARTEL'S CLAIM FOR
SUCH COSTS IS DENIED.
WITH RESPECT TO MARTEL'S REQUEST FOR BID PREPARATION COSTS, WE HAVE
HELD THAT SUCH COSTS MAY NOT BE RECOVERED UNLESS THE AGENCY'S ACTIONS
WERE ARBITRARY AND CAPRICIOUS TOWARDS THE BIDDER-CLAIMANT. MORGAN
BUSINESS ASSOCIATES, B-188387, MAY 16, 1977, 77-1 CPD 344. HOWEVER, NOT
EVERY IRREGULARITY WILL GIVE RISE TO THE RIGHT TO BE COMPENSATED FOR THE
EXPENSES OF UNDERTAKING THE BIDDING PROCESS. T&H COMPANY, 54 COMP. GEN.
1021 (1975), 75-1 CPD 345. THERE IS A SECOND REQUIREMENT APPLIED BY OUR
OFFICE THAT THE COMPLAINED-OF AGENCY ACTIONS DEPRIVED THE
BIDDER-CLAIMANT OF AN AWARD TO WHICH IT WAS OTHERWISE ENTITLED. UNITED
POWER & CONTROL SYSTEMS, INC.; DEPARTMENT OF THE NAVY - RECONSIDERATION
B-184662, DECEMBER 27, 1978, 78-2 CPD 436; MORGAN BUSINESS ASSOCIATES,
SUPRA.
IN KECO INDUSTRIES, INC. V. UNITED STATES, 492 F.2D 1200, 1204 (1974
CT. CL.), THE COURT, WHILE AMPLIFYING ITS POSITION THAT THE ULTIMATE
STANDARD IS WHETHER THE AGENCY WAS ARBITRARY OR CAPRICIOUS, STATED THAT
A "PROVEN VIOLATION OF PERTINENT STATUTES OR REGULATIONS CAN, BUT NEED
NOT NECESSARILY, BE A GROUND FOR RECOVERY." HERE, IT IS CLEAR THAT
COMMERCE'S FAILURE TO SUBMIT THIS MATTER TO THE SBA DID VIOLATE THE
SMALL BUSINESS ACT, SUPRA. THUS, THE QUESTION BEFORE US IS WHETHER SUCH
VIOLATION WAS ARBITRARY AND CAPRICIOUS. THE RECORD DISCLOSES THAT
COMMERCE CONTACTED THE SBA CONCERNING THIS ISSUE, ALTHOUGH THE REASONING
IS NOT CLEAR SINCE IT APPARENTLY BELIEVED THE BID NONRESPONSIVE. AS A
RESULT, COMMERCE ADVISES THAT "SBA EXPRESSED AN INTEREST IN BEING GIVEN
AN OPPORTUNITY TO REVIEW THE CASE BUT STATED THAT THE MATTER WOULD NOT
BE REFERRED TO THEM IF THE FILE WAS DOCUMENTED AS TO URGENCY OF AWARD
***." UNDER THESE CIRCUMSTANCES, WE FIND THAT COMMERCE'S ACTION WAS NOT
ARBITRARY AND CAPRICIOUS BUT BASED UPON ITS AND SBA'S ERRONEOUS BELIEF
THAT REFERRAL TO SBA WAS NOT REQUIRED.
ACCORDINGLY, MARTEL'S CLAIM FOR BID PREPARATION COSTS IS DENIED.
B-194412, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ORIGINAL SOLICITATION INDICATING WHERE ONLY 1 OF 2 REQUIRED
VEHICLES WOULD BE USED WAS NOT AMBIGUOUS BECAUSE IT WAS AMENDED TO
INDICATE WHERE OTHER VEHICLE WOULD BE USED.
2. EVEN THOUGH SOLICITATION DID NOT STATE THE TOTAL NUMBER OF
REQUIRED MANHOURS, SOLICITATION DID NOT CONCEAL THE REQUIREMENT FOR
GUARD MOUNT TIME WHERE AMENDMENT EXPLICITLY STATED THAT CONTRACTOR WAS
RESPONSIBLE FOR WAGES DUE EMPLOYEES FOR TIME SPENT PRIOR TO EACH SHIFT
IN TRAINING AND POSTING OF GUARDS.
3. PROTESTER FAILED TO MAKE CLEAR SHOWING THAT REQUIREMENT FOR DAILY
TRAINING IS UNREASONABLE.
4. SOLICITATION IS NOT AMBIGUOUS BECAUSE AN ERRONEOUS PROVISION IN
THE ORIGINAL SOLICITATION WAS DELETED AND REVISED BY AMENDMENT AND A
SUBSEQUENT AMENDMENT REVISED ONLY THAT PORTION OF THE EARLIER AMENDMENT
WHICH REMAINED INCONSISTENT. IT WAS NOT NECESSARY TO AGAIN REVISE IN
THE LATEST AMENDMENT THE INCONSISTENT PROVISION IN THE ORIGINAL
SOLICITATION WHICH HAD BEEN DELETED BY EARLIER AMENDMENT.
AMERICAN MUTUAL PROTECTIVE BUREAU: AMERICAN PROTECTIVE BUREAU HAS
PROTESTED ANY CONTRACT AWARD UNDER SOLICITATION DAKF03-79-B-0005, FOR
ARMED SECURITY GUARD SERVICE AT FORT MACARTHUR, CALIFORNIA.
ESSENTIALLY, THE PROTESTER ARGUES THAT THE SOLICITATION IS AMBIGUOUS
IN CERTAIN RESPECTS AND THAT IT PROVIDES FOR UNNECESSARY WORK. FOR THE
REASONS STATED BELOW, WE REJECT EACH OF THE PROTESTER'S ARGUMENTS.
THE BIDDING SCHEDULE CONSISTED OF SEVEN ITEMS, SIX GUARD POSTS, WHICH
WERE REQUIRED TO BE PRICED INDIVIDUALLY ON A MONTHLY BASIS, AND A
SEVENTH ITEM FOR ADDITIONAL SERVICES ON A MANHOUR BASIS.
AMBIGUITY REGARDING USE OF VEHICLES
THE PROTESTER ARGUES THAT THE SOLICITATION IS DEFECTIVE BECAUSE THE
SPECIFICATION CALLS FOR THE CONTRACTOR TO FURNISH 2 MOTORIZED VEHICLES
(SPECIFICATION SECTION F-9(D)) BUT MERELY SPECIFIES THE USE OF ONLY ONE
VEHICLE AT POST NUMBER 3 (SPECIFICATION SECTION F-14(C)). BECAUSE THE
SOLICITATION REQUIRED BID PRICES TO BE FURNISHED FOR EACH POST AND THE
POST DESCRIPTIONS INDICATED THE USE OF ONLY ONE VEHICLE, THE PROTESTER
ARGUES IT WAS IMPOSSIBLE TO PROPERLY BID FOR FURNISHING TWO VEHICLES.
IN OUR OPINION, AMENDMENT 7 TO THE SOLICITATION ADEQUATELY CLARIFIED
WHERE THE TWO VEHICLES WOULD BE USED. THE ORIGINAL SOLICITATION
PROVIDED FOR THE USE OF 1 VEHICLE AT POST NUMBER 3 AND AMENDMENT 7
FURTHER PROVIDED THAT "POST NUMBER 1 PERSONNEL WILL UTILIZE ONE (1) OF
THE CONTRACTOR FURNISHED VEHICLES." WE THEREFORE SEE NO REASON WHY THE
PROTESTER WAS UNABLE TO PROPERLY BID THE FURNISHING OF TWO VEHICLES, ONE
EACH AT POSTS 1 AND 3.
AMBIGUITY REGARDING GUARD MOUNT TIME
THE PROTESTER ARGUES THAT THE REQUIREMENT IN THE SOLICITATION FOR
PROVIDING "TRAINING DAILY FOR 15 MINUTES PRIOR TO EACH SHIFT" REQUIRES
THE PAYMENT OF TIME AND ONE-HALF FOR THE ADDITIONAL 15 MINUTES AND
EFFECTIVELY INCREASES THE COST OF THE CONTRACT BY $98000, A SUBSTANTIAL
"BIDDER COST" WHICH IS NOT DISCLOSED TO BIDDERS. PRIOR TO BID OPENING
IT REQUESTED THE CONTRACTING OFFICER TO AMEND THE SOLICITATION TO
PROVIDE FOR A TOTAL NUMBER OF MANHOURS SO THAT THE ADDITIONAL GUARD
MOUNT HOURS WOULD BE EVIDENT TO BIDDERS. THE PROTESTER ALSO STATES THAT
ITS EXPERIENCE AS THE INCUMBENT CONTRACTOR INDICATES THAT THE
REQUIREMENT FOR GUARD MOUNT TIME IS UNNECESSARY AND WASTEFUL,
PARTICULARLY FOR THE ENTIRE CONTRACT PERIOD.
IN OUR OPINION, THE PROTESTER'S CHARACTERIZATION OF THE GUARD MOUNT
TIME AS A "HIDDEN COST" IS UNWARRANTED EVEN THOUGH THE SOLICITATION DID
NOT INDICATE THE TOTAL NUMBER OF MANHOURS REQUIRED. IN THIS CONNECTION,
AMENDMENT 7 PROVIDED THE FOLLOWING ADDITIONAL GUIDANCE:
"THE 15 MINUTE TRAINING PERIOD INCLUDES TRAINING AND THE POSTING OF
ALL GUARDS. THE CONTRACTOR IS RESPONSIBLE FOR WAGES DUE TO EMPLOYEES
FOR THE TIME SPENT IN THE 15 MINUTE TRAINING PERIOD PRIOR TO EACH
SHIFT."
IN THE CIRCUMSTANCES, THE ABSENCE OF A STATEMENT CONCERNING THE TOTAL
NUMBER OF REQUIRED MANHOURS DID NOT EFFECTIVELY CONCEAL THE GUARD MOUNT
TIME AND SHOULD NOT HAVE MISLED BIDDERS.
AS TO THE NEED FOR INCURRING THE ADDITIONAL EXPENSE OF DAILY
TRAINING, THE AGENCY CONSIDERS THE ESTABLISHMENT OF THIS NEW REQUIREMENT
TO BE VERY IMPORTANT BUT HAS REDUCED FROM 4 HOURS TO 2 HOURS THE
REQUIREMENT IN THE PRIOR YEAR CONTRACT FOR TRAINING CLASS PRIOR TO
EMPLOYMENT AND THE REQUIREMENT FOR MONTHLY CLASSROOM INSTRUCTION. IN
OUR OPINION, THE REQUIREMENT IS NOT RESTRICTIVE OF COMPETITION AND THE
PROTESTER HAS NOT MADE A CLEAR SHOWING THAT THE REQUIREMENT FOR DAILY
TRAINING IS UNREASONABLE. THIS OBJECTION, THEREFORE, IS DENIED. METIS
CORP., 54 COMP. GEN. 612 (1975), 75-1 CPD 44.
AMBIGUITY REGARDING POST NUMBER 5
THE PROTESTER ARGUES THAT IT WAS UNCLEAR WHETHER POST 5 WAS TO BE
MANNED FOR 8 HOURS OR 24 HOURS. PRIOR TO ANY AMENDMENT THE SOLICITATION
PROVIDED IN SECTIONS F-2 AND F-14(E) THAT POST 5 WAS REQUIRED TO BE
MANNED 24 HOURS A DAY. HOWEVER, THIS AMENDMENT REVISED SECTION F-14(E)
TO PROVIDE FOR MANNING POST 5 ON AN 8-HOUR BASIS, WHICH WAS INCONSISTENT
WITH REVISED SECTION F-2 PROVIDING FOR 24 HOUR MANNING. SUBSEQUENTLY,
AMENDMENT 7 ADDRESSED THIS INCONSISTENCY AND REVISED SECTION F-2 TO
INDICATE THAT POST 5 WAS REQUIRED TO BE MANNED ON AN 8-HOUR BASIS.
IN OUR OPINION, UPON ISSUANCE OF AMENDMENT 7 THERE WAS NO LONGER ANY
INCONSISTENCY AND IT WAS CLEAR THAT POST 5 WAS REQUIRED TO BE MANNED ON
AN 8-HOUR BASIS.
NEVERTHELESS, THE PROTESTER ARGUES AN AMBIGUITY EXISTED BECAUSE
AMENDMENT 7 DID NOT PURPORT TO CHANGE SECTION F-14(E) OF THE ORIGINAL
SOLICITATION, WHICH HAD CALLED FOR MANNING POST 5 ON A 24-HOUR BASIS AND
BECAUSE POST 5 WAS CURRENTLY BEING MANNED 24 HOURS A DAY. WE FIND NO
MERIT TO THE PROTESTER'S POSITION BECAUSE THE REQUIREMENT FOR 24 HOUR
MANNING IN SECTION F-14(E) OF THE ORIGINAL SOLICITATION HAD BEEN DELETED
AND REVISED TO 8 HOURS BY AMENDMENT 4. IT WAS UNNECESSARY TO AGAIN
REVISE THE ORIGINAL SOLICITATION IN THIS REGARD. MOREOVER, THE FACT
THAT EXISTING CONTRACT REQUIREMENTS WERE CHANGED FOR FUTURE PERIODS
SHOULD NOT HAVE MISLED THE PROTESTER.
THE PROTEST IS DENIED.
B-194447, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CIVIL SERVICE COMMISSION RESTORED EMPLOYEE TO POSITION AT OLD DUTY
STATION BECAUSE DEFECTIVE REDUCTION-IN-FORCE PROCEDURES HAD LED TO
EMPLOYEE'S TRANSFER TO NEW DUTY STATION. BUT COMMISSION'S ACTION DID
NOT CONVERT NEW DUTY STATION FROM PERMANENT TO TEMPORARY STATUS.
CONSEQUENTLY, EMPLOYEE IS NOT ENTITLED TO TRAVEL EXPENSES AT NEW DUTY
STATION.
WILLIAM H. BUCHENHORST - TRAVEL EXPENSES - ERRONEOUS TRANSFER:
THIS DECISION RESPONDS TO THE APPEAL OF MR. WILLIAM H. BUCHENHORST,
WHO AS AN EMPLOYEE OF THE GENERAL SERVICES ADMINISTRATION (GSA) CLAIMS
TRAVEL EXPENSES BECAUSE OF AN UNJUSTIFIED CHANGE OF HIS PERMANENT DUTY
STATION. THE CLAIM WAS DENIED BY OUR CLAIMS DIVISION'S SETTLEMENT
CERTIFICATE NO. Z-2773305, MAY 1, 1978.
THE ISSUE IS WHETHER MR. BUCHENHORST IS ENTITLED TO TRAVEL EXPENSES
FOR WORK AT THE PERMANENT DUTY STATION TO WHICH, ACCORDING TO THE CIVIL
SERVICE COMMISSION, HE HAD BEEN IMPROPERLY TRANSFERRED BECAUSE OF HIS
AGENCY'S FAILURE TO FOLLOW REDUCTION-IN-FORCE (RIF) PROCEDURES.
MR. BUCHENHORST'S POSITION OF PERSONNEL MANAGEMENT SPECIALIST AT
GSA'S REGION 3 OFFICE IN THE PHILADELPHIA, PENNSYLVANIA, AREA WAS
ABOLISHED, AND MR. BUCHENHORST WAS NOTIFIED ON NOVEMBER 4, 1976, THAT HE
WOULD BE SUBJECT TO A RIF EFFECTIVE DECEMBER 7, 1976. THE REASON GIVEN
WAS THE REORGANIZATION OF REGION 3'S PERSONNEL DIVISION AND TRANSFER OF
A PART OF ITS FUNCTION TO WASHINGTON, D.C. BECAUSE OF THE RIF HE
ACCEPTED AN OFFER OF A TRANSFER TO WASHINGTON, D.C., AS A EMPLOYEE
RELATIONS SPECIALIST, EFFECTIVE DECEMBER 7, 1976. HE REPORTED FOR DUTY
IN WASHINGTON, D.C., ON JANUARY 5, 1977. HE MAINTAINED HIS FAMILY
RESIDENCE IN MICKLETON, NEW JERSEY, WHILE WORKING IN WASHINGTON, AND HE
FREQUENTLY COMMUTED TO MICKLETON FROM WASHINGTON. ON AUGUST 11, 1977,
HE WAS RESTORED TO HIS FORMER POSITION IN PHILADELPHIA RETROACTIVE TO
DECEMBER 7, 1976, BECAUSE THE CIVIL SERVICE COMMISSION DETERMINED THAT
REGION 3 HAD FAILED TO FOLLOW TRANSFER OF FUNCTION PROCEDURES IN
CONNECTION WITH THE RIF.
THERE IS NO DOUBT THAT GSA INTENDED THAT WASHINGTON, D.C., BE MR.
BUCHENHORST'S NEW PERMANENT DUTY STATION AT THE TIME OF HIS TRANSFER.
HE CONTINUED WORKING IN WASHINGTON FOR APPROXIMATELY 8 MONTHS, AND
CLEARLY DURING THIS TIME IT WAS CONSIDERED HIS WORKPLACE FOR AN
INDEFINITE, RATHER THAN TEMPORARY PERIOD. IN SIMILAR CIRCUMSTANCES, WE
HAVE HELD THAT THE LATER-DETERMINED ILLEGALITY OF THE PERSONNEL ACTION
RESULTING IN A TRANSFER DID NOT RESULT IN CONVERTING THE NEW DUTY
STATION FROM A PERMANENT TO TEMPORARY STATUS FOR THE PURPOSE OF
ENTITLEMENT TO TRAVEL EXPENSES. SEE JIMMY MORRIS, B-188358, AUGUST 10,
1977, AND MARIE R. STREETER, B-191056, JUNE 5, 1978.
ACCORDINGLY, OUR CLAIMS DIVISION'S SETTLEMENT DENYING MR.
BUCHENHORST'S CLAIM IS SUSTAINED.
B-194810, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST CONCERNING AGENCY'S REFUSAL TO CONSIDER LATE MODIFICATION
OF OTHERWISE ACCEPTABLE PROPOSAL IS TIMELY BECAUSE IT WAS FILED WITHIN
10 DAYS OF NOTICE OF PROPOSAL REJECTION.
2. AGENCY PROPERLY REJECTED LATE MODIFICATION FROM OFFEROR WHERE
INITIAL PROPOSAL WAS NOT ACCEPTABLE AND BEST AND FINAL OFFER WAS
RECEIVED LATE.
BLUE CROSS OF MARYLAND, INC.:
BLUE CROSS OF MARYLAND, INC. (BLUE CROSS), PROTESTS THE REFUSAL OF
THE DEPARTMENT OF DEFENSE, OFFICE OF CIVILIAN HEALTH AND MEDICAL PROGRAM
OF THE UNIFORMED SERVICES (OCHAMPUS) TO CONSIDER BLUE CROSS' LATE
MODIFICATION OF ITS PROPOSAL, AND THE AWARD OF A CONTRACT TO
PENNSYLVANIA BLUE SHIELD (BLUE SHIELD), ON REQUEST FOR PROPOSALS (RFP)
MDA 906-78-R-0015 FOR DEVELOPMENT AND IMPLEMENTATION OF AN OCHAMPUS
FISCAL INTERMEDIARY SYSTEM FOR MARYLAND.
ON MARCH 19, 1979, OCHAMPUS REQUESTED BLUE CROSS TO CORRECT CERTAIN
DEFICIENCIES IN ITS INITIAL PROPOSAL AND TO SUBMIT A BEST AND FINAL
OFFER BY APRIL 2. BLUE CROSS INDICATES THAT IT RESPONDED TO THIS
REQUEST ON MARCH 30. DUE TO AN AIRLINE STRIKE OCHAMPUS DID NOT RECEIVE
BLUE CROSS' BEST AND FINAL OFFER UNTIL FOUR DAYS AFTER THE APRIL 2 DUE
DATE. APPARENTLY, BLUE CROSS LEARNED ON THE DUE DATE BY TELEPHONE
CONVERSATION WITH THE AGENCY THAT ITS BEST AND FINAL OFFER HAD NOT BEEN
RECEIVED AND ON APRIL 3 IT SENT OCHAMPUS ANOTHER MODIFICATION OF ITS
PROPOSAL WHICH CORRECTED ALL DEFICIENCIES AND LOWERED ITS BID PRICE TO
$6.50 PER CLAIM. ON APRIL 30 OCHAMPUS AWARDED THE CONTRACT TO BLUE
SHIELD AT A BID PRICE OF $7.00 PER CLAIM.
OCHAMPUS CONTENDS THAT THIS PROTEST IS UNTIMELY UNDER OUR BID PROTEST
PROCEDURES, WHICH REQUIRE THAT PROTESTS BE FILED WITH EITHER GAO OR THE
PROCURING AGENCY WITHIN 10 DAYS AFTER THE BASIS FOR PROTEST IS KNOWN. 4
C.F.R. SEC. 20.2(B)(2)(1979). OCHAMPUS ARGUES THAT BLUE CROSS SUBMITTED
AN UNSOLICITED PROPOSAL MODIFICATION ON APRIL 3 BECAUSE IT HAD BEEN
INFORMED BY THE CONTRACTING OFFICER THAT OCHAMPUS WOULD NOT CONSIDER ITS
BEST AND FINAL OFFER OF MARCH 30 WHICH WAS NOT RECEIVED ON TIME. THE
AGENCY ARGUES THAT ITS REFUSAL TO CONSIDER THE LATE BEST AND FINAL IS
THE BASIS FOR THE PROTEST. SINCE BLUE CROSS KNEW ON APRIL 3 THAT ITS
BEST AND FINAL OFFER WOULD NOT BE CONSIDERED, OCHAMPUS STATES THAT THE
PROTEST FILED WITH THIS OFFICE ON MAY 8 IS UNTIMELY.
IN RESPONSE, BLUE CROSS STATES THAT, PURSUANT TO A SOLICITATION
PROVISION, IT COULD MODIFY ITS PROPOSAL ANY TIME PRIOR TO AWARD, AND
THEREFORE IT IS PROTESTING OCHAMPUS' REFUSAL TO CONSIDER ITS APRIL 3
MODIFICATION, NOT THE REFUSAL TO CONSIDER ITS BEST AND FINAL OFFER.
SINCE BLUE CROSS STATES THAT IT DID NOT LEARN UNTIL APRIL 30 THAT ITS
LATE MODIFICATION WAS NOT CONSIDERED, WE BELIEVE ITS PROTEST FILED
WITHIN 10 DAYS OF THAT DATE IS TIMELY.
BLUE CROSS ARGUES THAT OCHAMPUS WAS REQUIRED TO CONSIDER THE LATE
MODIFICATION UNDER SEC. C-19A OF THE RFP, WHICH PROVIDES:
"*** A LATE MODIFICATION OF AN OTHERWISE SUCCESSFUL PROPOSAL WHICH
MAKES ITS TERMS MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT
ANY TIME IT IS RECEIVED AND MAY BE ACCEPTED."
BLUE CROSS ARGUES THAT ITS INITIAL PROPOSAL WAS "AN OTHERWISE
SUCCESSFUL PROPOSAL" BECAUSE ITS PRICE WAS LOWER THAN THE AWARD PRICE.
IT BELIEVES ITS DEFICIENCIES WERE MINOR OR IN ANY EVENT CURED IN ITS
APRIL 3 MODIFICATION, AND IT NOTES THAT OCHAMPUS HAD SCHEDULED A
PREAWARD VISIT TO BLUE CROSS TO DISCUSS THE FINAL ARRANGEMENTS FOR
CONTRACT AWARD. THUS BLUE CROSS ARGUES THAT OCHAMPUS' REFUSAL TO
CONSIDER ITS LATE MODIFICATION WHICH MADE THE OFFER MORE FAVORABLE TO
THE GOVERNMENT VIOLATED THE RFP AND INVALIDATED THE AWARD TO BLUE
SHIELD.
THE PURPOSE OF SEC. C-19A IS TO ALLOW THE GOVERNMENT TO ACCEPT MORE
FAVORABLE TERMS FROM THE LOW OFFEROR THAT WILL BE AWARDED THE CONTRACT.
IF THE GOVERNMENT ELECTS TO CONSIDER A LATE MODIFICATION RECEIVED FROM
AN OTHERWISE ACCEPTABLE LOW OFFEROR, OTHER OFFERORS MAY NOT COMPLAIN
BECAUSE THEIR RELATIVE STANDING IS NOT AFFECTED.
HOWEVER, A LATE MODIFICATION MAY ONLY BE ACCEPTED PURSUANT TO THE
SUBJECT PROVISION IF THE OFFER IS ACCEPTABLE AS ORIGINALLY SUBMITTED.
SEE KING-FISHER COMPANY, B-192480, NOVEMBER 3, 1978, 78-2 CPD 321. THE
PROTESTER'S INITIAL PROPOSAL WAS NOT ACCEPTABLE, AND ITS DEFICIENCIES
COULD NOT BE CURED BY A LATE MODIFICATION TO MAKE IT ACCEPTABLE. WE
BELIEVE THAT OCHAMPUS REASONABLY REQUIRED BLUE CROSS TO RESPOND TO THE
NUMEROUS DEFICIENCIES NOTED IN THE AGENCY'S MARCH 19 REQUEST FOR BEST
AND FINAL OFFERS. FOR EXAMPLE, BLUE CROSS' FAILURE TO COMMIT ITSELF TO
RFP PROVISIONS ON LIQUIDATED DAMAGES, FINANCIAL MANAGEMENT AND THE
CONFIDENTIALITY OF FILES, AND OCHAMPUS' OBJECTIONS TO ASPECTS OF BLUE
CROSS' PROPOSED SUBCONTRACT CANNOT BE DISMISSED AS MINOR DEFICIENCIES.
SEE DUBIE-CLARK COMPANY, B-186918, AUGUST 26, 1976, 76-2 CPD 194.
OCHAMPUS PROPERLY REFUSED TO CONSIDER THE LATE MODIFICATION SINCE BLUE
CROSS HAD NOT TIMELY SUBMITTED AN "OTHERWISE SUCCESSFUL PROPOSAL" THAT
COULD BE MODIFIED UNDER SEC. C-19A. THE PROTEST IS DENIED.
B-195335, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST FILED MORE THAN 10 DAYS AFTER RECEIPT OF SOLICITATION
CANCELLATION NOTICE IS UNTIMELY.
2. WHERE PROTEST IS FILED UNTIMELY, GAO WILL NOT CONSIDER CLAIM FOR
BID PREPARATION COSTS BASED UPON ISSUES RAISED IN PROTEST.
TAMP CORPORATION:
TAMP CORPORATION (TAMP) PROTESTS THE DEPARTMENT OF THE ARMY'S
REJECTION OF ITS BIDS AND CANCELLATION OF INVITATIONS FOR BIDS (IFB)
NOS. DAKF61-79-B-0017 AND DAKF61-79-B-0018 ALLEGEDLY FOR NO COMPELLING
REASON. IF TAMP IS NOT AWARDED THE CONTRACTS UNDER THE ABOVE-MENTIONED
IFB'S, IT CLAIMS BID PREPARATION COSTS.
THE SOLICITATIONS WERE FOR MESS ATTENDANT AND VALET SERVICES. THE
MESS ATTENDANT SERVICES WERE TO COVER THE PERIOD FROM APRIL 21 UNTIL
SEPTEMBER 9, AND THE VALET SERVICES WERE TO BE COMPLETED BY JUNE 2.
BECAUSE OF THE SHORT PERFORMANCE PERIOD AND THE DELAYS ENCOUNTERED IN
DETERMINING TAMP'S RESPONSIBILITY, THE SOLICITATIONS WERE CANCELLED WHEN
THE ARMY CONCLUDED THAT NO AWARD COULD BE MADE BEFORE JULY 15.
BY LETTER DATED MAY 24, 1979, RECEIVED MAY 29, TAMP WAS INFORMED THAT
THE CONTRACTING OFFICER MADE A DECISION TO CANCEL BOTH IFB'S AND TO
PERFORM THE WORK IN-HOUSE.
SECTION 20.2(B)(2) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20
(1978), PROVIDES THAT "PROTESTS SHALL BE FILED NOT LATER THAN 10
(WORKING) DAYS AFTER THE BASIS FOR PROTEST IS KNOWN OR SHOULD HAVE BEEN
KNOWN, WHICHEVER IS EARLIER."
SINCE TAMP DID NOT FILE A PROTEST WITH EITHER THE AGENCY OR OUR
OFFICE UNTIL JULY 2, MORE THAN 10 DAYS AFTER THE BASIS OF THE PROTEST
WAS KNOWN (MAY 29), THE PROTEST IS UNTIMELY AND NOT FOR CONSIDERATION BY
OUR OFFICE.
WITH REGARD TO TAMP'S CLAIM FOR BID PREPARATION COSTS, WE HAVE HELD
THAT OUR OFFICE WILL NOT CONSIDER A CLAIM FOR BID OR PROPOSAL
PREPARATION COSTS BASED UPON ISSUES RAISED IN AN UNTIMELY PROTEST. SEE
MILAIR, INC., B-191424, JULY 20, 1978, 78-2 CPD 55.
THEREFORE, THE PROTEST AND CLAIM ARE DISMISSED.
B-195344, AUG 7, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
THERE IS NO BASIS FOR GAO TO DIRECT AWARD TO SMALL BUSINESS CONCERN
FOUND NONRESPONSIBLE BY CONTRACTING OFFICER SINCE QUESTION OF VALIDITY
OF SUCH DETERMINATION MUST BE REFERRED TO SMALL BUSINESS ADMINISTRATION
FOR CONSIDERATION UNDER CERTIFICATE OF COMPETENCY PROCEDURES.
BRIMSTONE EQUIPMENT CO.:
BRIMSTONE EQUIPMENT CO. (BRIMSTONE) PROTESTS THE AWARD OF ANY
CONTRACT TO OTHER THAN ITSELF UNDER REQUEST FOR PROPOSALS NO.
F09603-79-R-0611, ISSUED BY WARNER ROBBINS AIR FORCE BASE (AIR FORCE),
GEORGIA.
BRIMSTONE CONTENDS THAT THE AIR FORCE IS BEING UNREASONABLE IN
REQUIRING BRIMSTONE TO APPLY TO THE SMALL BUSINESS ADMINISTRATION FOR A
CERTIFICATE OF COMPETENCY (COC). BRIMSTONE ARGUES THAT THE AIR FORCE
HAS PERFORMED POSITIVE PREAWARD SURVEYS ON ITS FIRM IN THE PAST AND THAT
THERE HAS BEEN NO COOPERATION ON THE PART OF THE AIR FORCE IN
DETERMINING BRIMSTONE'S RESPONSIBILITY FOR THE INSTANT PROCUREMENT.
THEREFORE, BRIMSTONE REQUESTS THAT OUR OFFICE DIRECT THE AIR FORCE TO
MAKE AN AWARD TO IT.
THE COC REQUIREMENT STEMS FROM THE STATUTORY PROTECTION AFFORDED
SMALL BUSINESSES WHEN A CONTRACTING OFFICER DETERMINES THAT SUCH A
CONCERN IS NOT A RESPONSIBLE BIDDER. 15 U.S.C. SEC. 637(B)(7) (1976),
AS AMENDED BY PUB. L. NO. 95-89, SEC. 501, 91 STAT. 561 (1977).
WHENEVER A CONTRACTING OFFICER MAKES SUCH A DETERMINATION WITH RESPECT
TO A SMALL BUSINESS HE MUST REFER THE MATTER TO THE SBA, WHICH HAS
CONCLUSIVE AUTHORITY TO DECIDE THE QUESTION BY ISSUING OR DENYING A COC.
R&O INDUSTRIES, INC., B-188476, MARCH 25, 1977, 77-1 CPD 215.
WE GENERALLY DO NOT REVIEW THOSE SBA DETERMINATIONS UNLESS THERE IS A
PRIMA FACIE SHOWING OF FRAUD OR THAT INFORMATION VITAL TO A
RESPONSIBILITY DETERMINATION HAS NOT BEEN CONSIDERED; SEE OLD HICKORY
SERVICES, B-192906.2, FEBRUARY 9, 1979, 79-1 CPD 92; JBS CONSTRUCTION
COMPANY, B-187574, JANUARY 31, 1977, 77-1 CPD 79.
IN VIEW THEREOF, THERE IS NO BASIS FOR OUR OFFICE TO TAKE THE ACTION
REQUESTED AND THE PROTEST IS DISMISSED.
B-192752, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. REQUEST FOR INCREASE IN PRICE OF CONTRACT AWARDED BY FEDERAL
GRANTEE BECAUSE OF ALLEGED MISTAKE IN BID BY SUBCONTRACTOR IS DENIED
WHERE RECORD SHOWS CONTRACTOR ACCEPTED AWARD WITHOUT RESERVATION AFTER
GRANTEE HAD BEEN PLACED ON NOTICE OF MISTAKE CLAIM, SO THAT LEGALLY
BINDING CONTRACT RESULTED.
2. CLAIMANTS' REQUEST FOR INFORMAL CONFERENCE IN CONNECTION WITH
REQUEST FOR POST-AWARD MISTAKE IN BID CLAIM UNDER CONTRACT AWARDED BY
FEDERAL GRANTEE IS DENIED SINCE CONFERENCE WOULD SERVE NO USEFUL PURPOSE
IN LIGHT OF RECORD WHICH SHOWS CLAIMANTS ARE NOT ENTITLED TO RELIEF AS A
MATTER OF LAW.
CONTRA COSTA ELECTRIC, INC. - RECONSIDERATION; CARL W. OLSON AND
SONS CO.:
CONTRA COSTA ELECTRIC, INC. (CONTRA COSTA) AND CARL W. OLSON AND SONS
CO. (OLSON) REQUEST RECONSIDERATION OF OUR DECISION, CONTRA COSTA
ELECTRIC, INC., B-192752, SEPTEMBER 27, 1978, 78-2 CPD 239, IN WHICH WE
DECLINED TO REVIEW CONTRA COSTA'S REQUEST FOR CORRECTION OF A MISTAKE IN
ITS BID SUBMITTED TO A PRIME CONTRACTOR FOR ELECTRICAL SUBCONTRACT WORK
UNDER A CONTRACT FUNDED BY FEDERAL GRANT. IT HAS BEEN OUR PRACTICE NOT
TO REVIEW MATTERS INVOLVING THE AWARD OF SUBCONTRACTS BY A PRIME
CONTRACTOR TO A FEDERAL GRANTEE.
IN DECLINING TO CONSIDER CONTRA COSTA'S REQUEST FOR BID CORRECTION,
WE NOTED THAT A MISTAKE IN BID CLAIM HAD NOT BEEN FILED WITH THIS OFFICE
BY THE PRIME CONTRACTOR. NEVERTHELESS, ON THE RECORD BEFORE US, WE
OBSERVED THAT THE PRIME CONTRACTOR APPARENTLY ACCEPTED AWARD OF THE
CONTRACT AT ITS ORIGINAL PRICE WITHOUT COMPLAINT OR RESERVATION.
CONTRA COSTA NOW REQUESTS RECONSIDERATION OF THAT DECISION ON THE
GROUND THAT THE REQUEST TO GAO FOR RELIEF "WAS MADE WITH THE CONSENT AND
APPROVAL OF AND IN COOPERATION WITH THE PRIME CONTRACTOR," AND THAT THE
REQUEST WAS "THROUGH AND FOR THE BENEFIT OF THE PRIME CONTRACTOR" AND
SHOULD BE CONSIDERED "AS AT ITS REQUEST." IN ADDITION, OLSON ARGUES THAT
IT WAS NEVER ADVISED THAT IT COULD RESERVE ITS RIGHT TO ASSERT BID
MISTAKE AND OBTAIN CORRECTION AFTER AWARD AND THAT PRIOR TO AWARD THE
GRANTEE DID NOT SEEK VERIFICATION OR OTHERWISE DEAL WITH OLSON'S REQUEST
FOR BID CORRECTION.
THE RECORD BEFORE US, BOTH IN OUR PRIOR DECISION AND NOW, DISCLOSES
THAT, PRIOR TO AWARD, CONTRA COSTA DISCOVERED IT HAD MADE A MATHEMATICAL
ERROR IN ITS BID TO OLSON FOR THE ELECTRICAL WORK. CONTRA COSTA
PROMPTLY BROUGHT THIS TO THE ATTENTION OF OLSON AND THE GRANTEE. OLSON
ALSO BROUGHT THE ERROR TO THE ATTENTION OF THE GRANTEE'S CONTRACT
AWARDING OFFICIALS PRIOR TO AWARD. SUBSEQUENTLY, HOWEVER, THE GRANTEE
AWARDED THE CONTRACT TO OLSON, WHICH ACCEPTED THE CONTRACT AT ITS
ORIGINAL PRICE WITHOUT COMPLAINT OR RESERVATION OF ANY RIGHT TO OBTAIN
CORRECTION.
WE DO REVIEW THE PROPRIETY OF PRIME CONTRACT AWARDS MADE BY A FEDERAL
GRANTEE. SEE 40 FED. REG. 42406; LAMETTI & SONS, INC., 55 COMP. GEN.
413 (1975), 75-2 CPD 265. SINCE OLSON HAS JOINED CONTRA COSTA IN ITS
RECONSIDERATION REQUEST, WE NOW HAVE BEFORE US A MISTAKE IN BID CLAIM BY
A GRANTEE'S PRIME CONTRACTOR. THE RECORD, HOWEVER, INDICATES THAT OLSON
IS NOT ENTITLED TO ANY RELIEF. A CONTRACTOR MAY BE HELD TO HAVE AGREED
TO ABSORB AN ERROR BY ACCEPTING AWARD AT A MISTAKEN BID PRICE WITHOUT
RESERVATION. MASSMAN V. UNITED STATES, 102 CT. CL. 699, 60 F. SUPP.
635, CERT. DENIED, 325 U.S. 866 (1945) AND 39 COMP. GEN. 405 (1959).
HERE OLSON ACCEPTED THE AWARD WITHOUT RESERVATION. ALTHOUGH OLSON MAY
NOT HAVE BEEN INFORMED OF ITS RIGHTS TO MAKE SUCH A RESERVATION, WE ARE
NOT AWARE OF ANY REQUIREMENT THAT IT BE SO INFORMED. CONSEQUENTLY,
OLSON AND THEREFORE CONTRA COSTA ARE NOT ENTITLED TO RELIEF FROM THE
GRANTEE.
WE REACH THIS CONCLUSION WITHOUT HONORING CONTRA COSTA'S AND OLSON'S
REQUEST FOR AN INFORMAL CONFERENCE "IN ORDER TO EFFECTIVELY RECONSTRUCT
THE CIRCUMSTANCES UNDER WHICH THE BID OF CARL W. OLSON AND SONS WAS
SUBMITTED." WE BELIEVE SUCH A CONFERENCE WOULD SERVE NO USEFUL PURPOSE
SINCE THE PARTIES' AGREEMENT THAT OLSON ULTIMATELY ACCEPTED THE AWARD AT
A MISTAKEN BID PRICE WITHOUT RESERVATION IS LEGALLY DISPOSITIVE OF THE
MATTER. SEE THE VOLPE CONSTRUCTION CO., INC. - RECONSIDERATION,
B-189280, AUGUST 8, 1977, 77-2 CPD 93.
THE COMPLAINT IS DENIED.
B-193146, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ABILITY OF AWARDEE TO COMPLY WITH TECHNICAL REQUIREMENTS OF
SOLICITATION IS NOT REVIEWABLE BY GAO SINCE IT INVOLVES CHALLENGE TO
CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF AWARDEE'S
RESPONSIBILITY.
2. WHETHER ITEM BEING FURNISHED BY AWARDEE ACTUALLY COMPLIES WITH
CONTRACT SPECIFICATIONS IS MATTER OF CONTRACT ADMINISTRATION WHICH IS
RESPONSIBILITY OF PROCURING ACTIVITY, NOT GAO.
THE PERKIN-ELMER CORPORATION:
THE PERKIN-ELMER CORPORATION (PERKIN-ELMER) PROTESTS THE CONTRACT
AWARD TO ELECTRONIC CONTROLS, INC. (ELECTRONIC CONTROLS), BY THE DEFENSE
LOGISTICS AGENCY (DLA) UNDER INVITATION FOR BIDS (IFB) NO.
DLA900-78-B-0979. THE SOLICITATION WAS FOR THE SUPPLY OF LINEAR
PRECISION VARIABLE RESISTORS (POTENTIOMETERS) FOR USE BY THE NAVY IN
SHIPBOARD WEAPONS FIRE CONTROL SYSTEMS.
PERKIN-ELMER CONTENDS THAT THE POTENTIOMETERS BID BY ELECTRONIC
CONTROLS DEVIATE SUBSTANTIALLY FROM THE IFB REQUIREMENTS AND, THEREFORE,
ELECTRONIC CONTROLS WAS NONRESPONSIVE TO THE SOLICITATION.
SPECIFICALLY, PERKIN-ELMER ASSERTS THAT ELECTRONIC CONTROLS'
POTENTIOMETERS FAIL TO MEET THE REQUIREMENTS OF NOTE 26 OF BUORD DRAWING
2162815, REVISION "C," IN THE SOLICITATION. NOTE 26 PROVIDED AS
FOLLOWS:
"TURNS SHALL BE CONTINUOUS WITH NO STOPS. WHEN ONE CYCLE HAS BEEN
COMPLETED, A NEW CYCLE SHALL START. THERE SHALL BE 10 TURNS BETWEEN CW
AND CCW TERMINALS AND MIN. 90 OVER-TRAVEL AT EACH END. THERE SHALL BE
NO MORE THAN 12 MECHANICAL TURNS FOR A COMPLETE CYCLE."
PERKIN-ELMER CLAIMS THAT ELECTRONIC CONTROLS' POTENTIOMETERS CONTAIN
STOPS WHICH ARE LOCATED AT THE BEGINNING OF THE FIRST ROTATION OF THE
DEVICE'S SHAFT AND SOMEWHERE NEAR THE TWELFTH ROTATION OF THIS SHAFT.
FURTHER, PERKIN-ELMER ALLEGES THAT ELECTRONIC CONTROLS' POTENTIOMETERS
HAVE MORE THAN 12 SHAFT ROTATIONS IN A COMPLETE ELECTRICAL CYCLE.
ACCORDING TO PERKIN-ELMER, THE VOLTAGE OUTPUT OF A POTENTIOMETER IS 0
PERCENT OF THE VOLTAGE INPUT AT ONE END OF THE DEVICE'S SHAFT ROTATION
AND 100 PERCENT OF THE VOLTAGE INPUT AT THE OTHER END OF THE SHAFT
ROTATION. TO TRAVERSE A COMPLETE CYCLE, PERKIN-ELMER ARGUES THAT IT IS
NECESSARY TO BEGIN AT 0-PERCENT OUTPUT; TRAVERSE TO 100-PERCENT OUTPUT;
AND, THEN, EITHER CONTINUE SHAFTER ROTATION ONWARD TO 0 PERCENT OR
REVERSE SHAFT ROTATION BACK TO 0 PERCENT. IN ORDER TO MEET THE
FOREGOING DEFINITION OF A CYCLE, PERKIN-ELMER AVERS THAT IT IS NECESSARY
IN ELECTRONIC CONTROLS' DEVICES TO ROTATE THE SHAFT A MINIMUM OF 10
TURNS IN ONE DIRECTION AND A MINIMUM OF 10 TURNS IN ANOTHER DIRECTION,
THUS MAKING 20 TOTAL TURNS.
DLA STATES THAT ELECTRONIC CONTROLS INSERTED IN ITS BID, AS REQUESTED
BY THE SOLICITATION, THAT IT WAS OFFERING ITS PART NUMBER 1062ACX1 AND
INDICATED THAT IT WAS MANUFACTURED IN COMPLETE CONFORMANCE WITH THE
SOLICITATION SPECIFICATIONS. DLA INFORMS US THAT THIS PART NUMBER WAS
AN APPROVED ITEM OF SUPPLY. DLA FURTHER STATES THAT ELECTRONIC
CONTROLS' BID DID NOT CONTAIN ANY DEVIATIONS FROM THE IFB TERMS AND
CONDITIONS. THUS, DLA TAKES THE POSITION THAT ELECTRONIC CONTROLS WAS,
AS LOW BIDDER, LEGALLY ENTITLED TO THE AWARD OF A CONTRACT SINCE THE
COMPANY UNQUALIFIEDLY OFFERED TO MEET ALL SOLICITATION REQUIREMENTS AND
THERE WAS NOTHING ON THE FACE OF THE COMPANY'S BID LIMITING, REDUCING,
OR MODIFYING ITS OBLIGATION TO PERFORM IN ACCORDANCE WITH THE
SOLICITATION'S TERMS AND CONDITIONS.
DLA ALSO POINTS OUT THAT ELECTRONIC CONTROLS' ABILITY TO COMPLY WITH
THE IFB SPECIFICATIONS WAS SPECIFICALLY EVALUATED DURING ITS PREAWARD
SURVEY OF THAT COMPANY. ELECTRONIC CONTROLS WAS DIRECTLY QUERIED AS TO
WHETHER ITS POTENTIOMETERS MET THE REVISION "C" REQUIREMENTS OF BUORD
DRAWING 2162815. ELECTRONIC CONTROLS RESPONDED TO DLA'S QUESTION IN A
LETTER DATED AUGUST 15, 1978. ELECTRONIC CONTROLS SPECIFICALLY STATED
IN THIS LETTER THAT THE TURNS OF ITS POTENTIOMETERS ARE CONTINUOUS WITH
NO STOPS FOR 10 TURNS BETWEEN CW AND CCW TERMINALS. ELECTRONIC CONTROLS
ALSO STATED UNEQUIVOCALLY THAT ITS POTENTIOMETERS HAD NO MORE THAN 12
MECHANICAL TURNS IN A COMPLETE CYCLE.
BASED ON THE INFORMATION RECEIVED FROM ELECTRONIC CONTROLS AND BASED
ON THE TECHNICAL COMMENT ON THIS INFORMATION FROM THE COGNIZANT
ENGINEERING SUPPORT ACTIVITY, THE CONTRACTING OFFICER DETERMINED THAT
ELECTRONIC CONTROLS' POTENTIOMETER DID, IN FACT, MEET THE IFB
SPECIFICATIONS AND WAS AN ACCEPTABLE ITEM OF SUPPLY FOR NAVY USE. IN
VIEW OF THE FOREGOING, DLA ARGUES THAT THIS PROTEST SHOULD NOT BE
CONSIDERED ON THE MERITS BY US SINCE IT CHALLENGES FACTORS USED BY THE
CONTRACTING OFFICER IN MAKING HIS AFFIRMATIVE DETERMINATION OF
RESPONSIBILITY AND AWARDING A CONTRACT TO ELECTRONIC CONTROLS. SEE
CENTRAL METAL PRODUCTS, INCORPORATED SOLICITATION NO. M2-40-74, 54 COMP.
GEN. 66 (1974), 74-2 CPD 64.
THERE IS A DEFINITE DISTINCTION BETWEEN QUESTIONS RELATED TO BID
RESPONSIVENESS AND THOSE CONCERNED WITH BIDDER RESPONSIBILITY. AS WE
STATED IN 49 COMP. GEN. 553 (1970), AT PAGE 556:
"*** THE TEST TO BE APPLIED IN DETERMINING THE RESPONSIVENESS OF A
BID IS WHETHER THE BID AS SUBMITTED IS AN OFFER TO PERFORM, WITHOUT
EXCEPTION, THE EXACT THING CALLED FOR IN THE INVITATION, AND UPON
ACCEPTANCE WILL BIND THE CONTRACTOR TO PERFORM IN ACCORDANCE WITH ALL
THE TERMS AND CONDITIONS THEREOF. UNLESS SOMETHING ON THE FACE OF THE
BID, OR SPECIFICALLY A PART THEREOF, EITHER LIMITS, REDUCES OR MODIFIES
THE OBLIGATION OF THE PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE
WITH THE TERMS OF THE INVITATION, IT IS RESPONSIVE. ***"
RESPONSIBILITY, ON THE OTHER HAND, CONCERNS A BIDDER'S ABILITY TO
PERFORM ITS OBLIGATIONS UNDER THE TERMS OF ITS SUBMITTED BID. NEW HAVEN
AMBULANCE SERVICE, INC., B-190223, MARCH 22, 1978, 78-1 CPD 225.
SINCE NOTHING ON THE FACE OF ELECTRONIC CONTROLS BID LIMITED, REDUCED
OR MODIFIED ITS OBLIGATION UNDER THE IFB, ITS BID WAS RESPONSIVE.
TO THE EXTENT THE PROTEST RELATES TO ELECTRONIC CONTROLS'
RESPONSIBILITY, WE DO NOT REVIEW AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY EXCEPT WHERE THE PROTESTER ALLEGES FRAUD ON THE PART OF
PROCURING OFFICIALS OR WHERE THE SOLICITATION CONTAINS DEFINITIVE
RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. CENTRAL
PRODUCTS, INCORPORATED SOLICITATION NO. M2-40-74, SUPRA. NEITHER
EXCEPTION APPLIES HERE.
WHETHER ELECTRONIC CONTROLS HAS IN FACT PERFORMED IN ACCORDANCE WITH
THE CONTRACT AWARDED UNDER THE IFB IS A MATTER OF CONTRACT
ADMINISTRATION. CONTRACT ADMINISTRATION IS THE FUNCTION AND
RESPONSIBILITY OF THE PROCURING ACTIVITY AND SUCH MATTERS ARE NOT FOR
RESOLUTION UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1979).
SMI (WATERTOWN), INC., B-188174, FEBRUARY 8, 1977, 77-1 CPD 98. IN ANY
EVENT, DLA ADVISES THAT ELECTRONIC CONTROLS COMPLETED PERFORMANCE UNDER
THE AWARDED CONTRACT AND THAT ALL THE POTENTIOMETERS DELIVERED BY
ELECTRONIC CONTROLS WERE ACCEPTED AND PAID FOR BY THE GOVERNMENT.
THE PROTEST IS DENIED.
B-193752, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
REQUEST FOR RECONSIDERATION DOES NOT DEMONSTRATE ERRORS OF LAW IN
PRIOR DECISION WHICH DENIED PROTEST THAT RFP SHOULD BE CANCELED. PRIOR
DECISION IS AFFIRMED.
CARDION ELECTRONICS - REQUEST FOR RECONSIDERATION:
CARDION ELECTRONICS HAS REQUESTED RECONSIDERATION OF OUR DECISION
WHICH DENIED ITS PROTEST CONCERNING REQUEST FOR PROPOSALS (RFP) NO.
LGM-8-7247, ISSUED BY THE FEDERAL AVIATION ADMINISTRATION (FAA) (CARDION
ELECTRONICS, B-193752, JUNE 8, 1979, 58 COMP. GEN. ___, 79-1 CPD 406).
CARDION ALLEGES ERRORS OF LAW IN THE DECISION.
CARDION, WHICH DID NOT SUBMIT A PROPOSAL, HAD PROTESTED THAT THE
CHANGES IN THE GOVERNMENT'S REQUIREMENTS REFLECTED IN AN AMENDMENT TO
THE RFP WERE SO SUBSTANTIAL THAT THE FAA SHOULD HAVE CANCELED THE RFP
AND RESOLICITED. CARDION STRESSED ITS VIEW THAT THE CUMULATIVE EFFECT
OF THE CHANGES WAS TO GREATLY REDUCE THE RISK INVOLVED IN CONTRACT
PERFORMANCE. OUR DECISION POINTED OUT INITIALLY THAT INSOFAR AS THE
CHANGES WERE READILY AND OBJECTIVELY QUANTIFIABLE, IT WAS BY NO MEANS
OBVIOUS WHY THEY SHOULD BE REGARDED AS SO SUBSTANTIAL AS TO WARRANT A
COMPLETE REVISION OF THE SOLICITATION (I.E., CANCELLATION AND
RESOLICITATION). WE FURTHER STATED:
"INSOFAR AS THE ALLEGED SUBSTANTIAL NATURE OF THE CHANGES IS PREMISED
ON THE PROTESTER'S PERCEPTION OF THE REDUCED RISK THEY ENTAIL, IT MUST
BE NOTED THAT AN INDIVIDUAL PROSPECTIVE CONTRACTOR'S PERCEPTION OF THE
RISK IS OF NO ESPECIAL CONCERN TO THE GOVERNMENT. THE GOVERNMENT'S
CONCERN IS WHETHER ITS MINIMUM NEEDS WILL BE SATISFIED AT A REASONABLE
PRICE. SEE COMTEN, INC., B-186983, DECEMBER 8, 1976, 76-2 CPD 468,
AFFIRMED, 77-1 CPD 173. WHEN THE GOVERNMENT ISSUES A SOLICITATION, IT
IS REQUIRED TO PROVIDE A CLEAR STATEMENT OF ITS REQUIREMENTS SO THAT ALL
OFFERORS WILL BE COMPETING ON AN EQUAL BASIS (FIBER MATERIALS, INC., 54
COMP. GEN. 735 (1975), 75-1 CPD 142) BUT THE GOVERNMENT MAKES NO
GUARANTEE THAT EACH OFFEROR WILL BE FACING THE SAME DEGREE OF RISK; ONE
OFFEROR, DUE TO ITS SUPERIOR EXPERIENCE OR RESOURCES, MAY WELL ENJOY A
COMPETITIVE ADVANTAGE OVER ANOTHER. TELOS COMPUTING, INC., SUPRA. WE
SEE LITTLE MERIT, THEREFORE, IN THE IDEA THAT THE SUBSTANTIAL NATURE OF
CHANGES IN AN RFP SHOULD BE JUDGED IN TERMS OF AN INDIVIDUAL PROSPECTIVE
OFFEROR'S PERCEPTION OF THEIR EFFECT ON RISK.
"*** IF A PROSPECTIVE OFFEROR BELIEVES THE TERMS OF THE RFP INVOLVE
TOO MUCH RISK, IT HAS A CHOICE OF EITHER SUBMITTING A PROPOSAL IN
RESPONSE TO THE RFP, OR PROTESTING PRIOR TO THE CLOSING DATE FOR RECEIPT
OF INITIAL PROPOSALS AND SPECIFICALLY CHALLENGING THOSE AREAS OF THE RFP
IT BELIEVES SHOULD BE CHANGED. WE AGREE WITH WILCOX'S COMMENTS TO THE
EFFECT THAT THE GOVERNMENT CANNOT CONDUCT ITS NEGOTIATED PROCUREMENTS ON
A 'START AND STOP' BASIS, WITH PROCUREMENTS BEING HALTED AS VARIOUS
NONOFFERORS CHANGE THEIR MINDS ABOUT THE DEGREE OF RISK."
INITIALLY, CARDION CHALLENGES THIS PORTION OF THE DECISION, AND CITES
DEFENSE ACQUISITION REGULATION (DAR) SEC. 3-805.4(B) (1976 ED.) IN
SUPPORT OF ITS POSITION. WHILE THIS REGULATION IS NOT APPLICABLE TO FAA
PROCUREMENTS, WE RELIED ON IT IN OUR PRIOR DECISION IN THE ABSENCE OF
ANY DIRECTLY APPLICABLE PROVISION IN THE FEDERAL PROCUREMENT
REGULATIONS. IT PROVIDES IN PERTINENT PART:
"*** NO MATTER WHAT STAGE THE PROCUREMENT IS IN, IF A CHANGE OR
MODIFICATION IS SO SUBSTANTIAL AS TO WARRANT COMPLETE REVISION OF A
SOLICITATION, THE ORIGINAL SHOULD BE CANCELED AND A NEW SOLICITATION
ISSUED. IN SUCH CASES, THE NEW SOLICITATION SHOULD BE ISSUED TO ALL
FIRMS ORIGINALLY SOLICITED, ANY FIRMS ADDED TO THE ORIGINAL MAILING LIST
AND ANY OTHER QUALIFIED FIRMS."
CARDION MAINTAINS DAR SEC. 3-805.4(B) INDICATES THAT THE PERSPECTIVE
OF A COMPANY IN ITS POSITION IS A PROPER ONE FROM WHICH TO JUDGE THE
"SUBSTANTIALITY" OF CHANGES IN AN RFP, BECAUSE IT IS CERTAINLY A
QUALIFIED FIRM WITH RESPECT TO THIS PROCUREMENT. IN THIS REGARD, WE
BELIEVE THE PORTION OF THE REGULATION RELIED ON BY CARDION MERELY
DESCRIBES WHO SHOULD RECEIVE COPIES OF A NEW SOLICITATION AFTER THE
CONTRACTING AGENCY HAS MADE A DETERMINATION THAT CHANGES IN THE ORIGINAL
RFP WERE SO SUBSTANTIAL AS TO WARRANT ITS CANCELLATION. WE DO NOT
BELIEVE THE LANGUAGE OF THE REGULATION SUPPORTS THE INTERPRETATION
CARDION ADVANCES.
CARDION'S REQUEST FOR RECONSIDERATION GOES ON TO ARGUE AT SOME LENGTH
THAT THE ABOVE-QUOTED PORTION OF OUR DECISION IS ERRONEOUS. IN THIS
REGARD, SECTION 20.9(A) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20
(1979) REQUIRES THAT A REQUEST FOR RECONSIDERATION SPECIFY ERRORS OF LAW
AND THE LEGAL GROUNDS UPON WHICH REVERSAL OR MODIFICATION OF THE
DECISION IS WARRANTED. SEE ALSO CORBETTA CONSTRUCTION COMPANY OF
ILLINOIS, INC., 55 COMP. GEN. 972, 975 (1976), 76-1 CPD 240, WHERE WE
QUOTED FROM B-168673, OCTOBER 26, 1970, AS FOLLOWS:
"'WHILE THIS OFFICE WILL RECONSIDER ITS DECISIONS WHEN IT IS ALLEGED
THAT THEY ARE BASED UPON ERROR OF FACT OR LAW, SUCH ALLEGATIONS MUST BE
SUPPORTED BY EVIDENCE, IN THE FORM OF DOCUMENTATION OR CITATIONS TO
CONTROLLING ADMINISTRATIVE OR JUDICIAL PRECEDENT, WHICH WILL
CONVINCINGLY ILLUSTRATE HOW AND WHY OUR CONCLUSIONS ARE WRONG.'"
ASIDE FROM DAR SEC. 3-805.4(B), SUPRA, CARDION HAS CITED NO LEGAL
AUTHORITIES IN SUPPORT OF ITS ARGUMENTS. IN EFFECT, CARDION IS MERELY
EXPRESSING ITS DISAGREEMENT WITH OUR ANALYSIS WITHOUT OFFERING ANY
AUTHORITY TO DEMONSTRATE ERRORS OF LAW IN OUR DECISION. IN THESE
CIRCUMSTANCES, WE DO NOT BELIEVE ANY FURTHER DISCUSSION OF THE
ABOVE-QUOTED PORTION OF OUR DECISION IS CALLED FOR.
FINALLY, CARDION CONTENDS THAT OUR DECISION UNREASONABLY DISREGARDED
THE AUTHORITY OF AMERICAN AIR FILTER COMPANY, INC., 57 COMP. GEN. 285
(1978), 78-1 CPD 136, ALSO 57 COMP. GEN. 567 (1978), 78-1 CPD 443, AND
KENT WATKINS & ASSOCIATES, INC., B-191078, MAY 17, 1978, 78-1 CPD 377.
THESE DECISIONS, WHICH WE CITED AND DISCUSSED IN OUR EARLIER
DECISION, DEAL WITH THE SUBJECT OF WHETHER A MODIFICATION TO A CONTRACT
CHANGES IT SO SUBSTANTIALLY THAT THE WORK COVERED BY THE MODIFICATION
SHOULD BE OBTAINED BY A NEW PROCUREMENT. WE BELIEVE OUR EARLIER
DECISION (AT PP. 21-23) ADEQUATELY EXPLAINED THE DIFFERENCES BETWEEN
THIS LINE OF AUTHORITY AND THE CASES DEALING WITH THE QUESTION WHETHER
CHANGES TO AN RFP ARE SO SUBSTANTIAL AS TO WARRANT ITS CANCELLATION. IN
ADDITION, WE POINTED OUT (PP. 23-24) THAT THE RATIONALE OF AMERICAN AIR
FILTER AND KENT WATKINS, EVEN IF APPLIED IN THE PRESENT INSTANCE,
OFFERED NO SUPPORT FOR CARDION'S CASE, AND CARDION HAS NOT CONTESTED OUR
ANALYSIS. THEREFORE, WE BELIEVE NO FURTHER DISCUSSION OF THIS ISSUE IS
NECESSARY.
IN VIEW OF THE FOREGOING, WE DO NOT BELIEVE CARDION HAS DEMONSTRATED
ERRORS OF LAW IN OUR PRIOR DECISION, AND THAT DECISION IS ACCORDINGLY
AFFIRMED.
B-193764, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. A MEMBER OF THE ARMY RESERVE IS NOT ENTITLED TO REIMBURSEMENT FOR
MEDICAL EXPENSES FOR SURGERY PERFORMED BY A PRIVATE PHYSICIAN WHERE
PROPER AUTHORIZATION FOR SUCH SURGERY WAS NOT OBTAINED.
2. A MEMBER OF THE ARMY RESERVE IS NOT ENTITLED TO RESUMPTION OF
DISABILITY PAY AND ALLOWANCES WHERE MEMBER WAS NOT DETERMINED BY
MILITARY MEDICAL AUTHORITY TO BE INCAPABLE OF PERFORMING MILITARY DUTY.
3. A MEMBER RECEIVING DISABILITY PAY UNDER 37 U.S.C. 204(G) IS NOT
IN AN ACTIVE DUTY STATUS. ACCORDINGLY MEDICAL CARE FOR DEPENDENTS IS
NOT AUTHORIZED.
WILLIAM D. FITZGERALD:
THIS ACTION IS IN RESPONSE TO AN APPEAL BY WILLIAM D. FITZGERALD OF A
SETTLEMENT BY OUR CLAIMS DIVISION DENYING HIS CLAIM FOR PAY AND
ALLOWANCES AND MEDICAL EXPENSES FOR THE PERIOD OCTOBER 21, 1972, TO
APRIL 1, 1974, ARISING OUT OF AN INJURY HE INCURRED WHILE ON ACTIVE DUTY
FOR TRAINING. MR. FITZGERALD IS ALSO CLAIMING REIMBURSEMENT FOR MEDICAL
EXPENSES INCURRED BY HIS WIFE DURING THE PERIOD HE WAS RECEIVING
DISABILITY PAY. THE CLAIMS DIVISION DENIED THE CLAIM, FINDING THAT MR.
FITZGERALD FAILED TO EMPLOY PROPER CHANNELS IN SEEKING PAY AND
ALLOWANCES AND CIVILIAN MEDICAL ATTENTION. FOR THE REASONS SET FORTH
BELOW, WE AGREE.
WILLIAM D. FITZGERALD WHILE PERFORMING ACTIVE DUTY FOR TRAINING
SUFFERED A SERIOUS ANKLE INJURY IN A PARACHUTING INCIDENT ON JANUARY 19,
1972. THE MEMBER WAS TREATED FOR THE INJURY AT LONG BEACH NAVAL
HOSPITAL. IN ORDER TO FACILITATE THE HEALING OF THE ANKLE, MILITARY
DOCTORS INSERTED THREE METAL PINS INTO THE INJURED ANKLE. THE MEMBER
WAS TREATED AS AN OUTPATIENT FROM THE DATE OF INJURY THROUGH OCTOBER 20,
1972.
IN OCTOBER 1972 THE MEMBER ELECTED TO UNDERGO AN ELECTIVE MINOR
SURGICAL PROCEDURE IN A MILITARY FACILITY IN ORDER TO HAVE THE PINS
REMOVED FROM HIS ANKLE. HOWEVER, THE MEMBER SUFFERED AN ALLERGIC
REACTION TO THE ANESTHESIA ADMINISTERED TO HIM AND THE OPERATION WAS
CANCELLED. AT THIS TIME, THE MEMBER REFUSED TO HAVE THE OPERATION
RESCHEDULED FOR THE FOLLOWING WEEK.
ON OCTOBER 20, 1972, A MILITARY DOCTOR DISCHARGED THE MEMBER, STATING
THAT NO FURTHER MEDICAL TREATMENT WAS NECESSARY AND THAT THE MEMBER WAS
"FIT FOR FULL, UNRESTRICTED DUTY INCLUDING AIRBORNE TRAINING." THE
DOCTOR CONCLUDED THAT THE PINS "DID NOT COMPROMISE THE HEALED FRACTURE
AND WERE IN NO WAY DISABLING." HE INDICATED THAT THE PINS COULD BE
RETAINED OR REMOVED, IF DESIRED, AS AN ELECTIVE MINOR PROCEDURE.
THE RECORD INDICATES THAT THE MEMBER WAS DETERMINED TO BE FIT FOR
DUTY ON THE DATE OF HIS DISCHARGE FROM THE HOSPITAL ON OCTOBER 20, 1972.
IN MAY 1973, MILITARY MEDICAL OFFICIALS AGAIN STATED THAT HE WAS "FIT
FOR AIRBORNE TRAINING"; HE SUCCESSFULLY COMPLETED 2 WEEKS' AIRBORNE
TRAINING ON AUGUST 21, 1973; AND HE CONTINUED PERFORMING INACTIVE DUTY
FOR TRAINING UNTIL DECEMBER 1973.
THERE IS EVIDENCE IN THE RECORD THAT THE MEMBER WAS INFORMED DURING
THIS PERIOD THAT IF HIS PHYSICAL CONDITION CHANGED HE WAS TO NOTIFY HIS
UNIT COMMANDER FOR APPROPRIATE MEDICAL REFERRAL.
ON DECEMBER 16, 1973, THE MEMBER REPORTED TO GENERAL HOSPITAL,
BELL-CALIFORNIA, FOR A DIVER-AIRBORNE PHYSICAL. AT THIS TIME, IT WAS
DETERMINED BY MILITARY DOCTORS THAT THE MEMBER WAS QUALIFIED FOR
RETENTION IN THE ARMY RESERVE, BUT THAT HE WAS NOT QUALIFIED FOR
AIRBORNE OR DIVING DUTIES UNTIL THE PINS IN HIS ANKLE WERE REMOVED.
THE MEMBER HAD THE PINS SURGICALLY REMOVED BY A PRIVATE PHYSICIAN ON
DECEMBER 26, 1973. IN REQUESTING COMPENSATION FOR MEDICAL EXPENSES, PAY
AND ALLOWANCES, THE MEMBER TOLD HIS UNIT COMMANDER THAT HE HAD THE
SURGERY PERFORMED BY A PRIVATE PHYSICIAN BECAUSE HE FELT THAT MILITARY
FACILITIES WERE SUBSTANDARD.
THE MEMBER WAS NEVER FORMALLY RELEASED BY THE PRIVATE PHYSICIAN. HIS
LAST TREATMENT WAS ON MARCH 13, 1974.
THERE ARE TWO DISTINCT ISSUES FOR DETERMINATION IN THIS CASE. FIRST,
WHETHER MR. FITZGERALD IS ENTITLED TO REIMBURSEMENT FOR EXPENSES HE
INCURRED IN HAVING SURGERY PERFORMED BY A PRIVATE PHYSICIAN; SECOND,
WHETHER MR. FITZGERALD IS ENTITLED TO PAY AND ALLOWANCES FOR THE PERIOD
AFTER IT WAS DETERMINED HE WAS FIT FOR DUTY.
PURSUANT TO 10 U.S.C. SEC. 3721(2) A MEMBER OF THE ARMY RESERVE IS
ENTITLED TO HOSPITAL BENEFITS PROVIDED BY LAW OR REGULATION FOR A MEMBER
OF THE REGULAR ARMY IF SUCH MEMBER IS DISABLED IN THE LINE OF DUTY BY
INJURY WHILE SO EMPLOYED.
ARMY REGULATION (AR) 40-3, CHAPTER 17, IN EFFECT AT THE TIME,
PROVIDES THAT MEMBERS OF THE ARMY RESERVE MAY OBTAIN MEDICAL CARE FROM
CIVILIAN SOURCES AT ARMY EXPENSE WHEN SUCH CARE IS PROPERLY AUTHORIZED.
PROPER AUTHORIZATION MUST BE OBTAINED, EXCEPT IN EMERGENCIES OR WHEN
THERE IS NO GOVERNMENT MEDICAL FACILITY AVAILABLE.
IN THE INSTANT CASE, THE MEMBER DID NOT OBTAIN PROPER AUTHORIZATION
TO HAVE SURGERY CONDUCTED BY A CIVILIAN PHYSICIAN. THE OPERATION WAS
NOT "AN EMERGENCY" BECAUSE THE MEMBER HAD SUFFICIENT TIME TO REQUEST
PROPER AUTHORIZATION BEFORE HIS SURGERY. FURTHER, THERE IS NO EVIDENCE
THAT A GOVERNMENT MEDICAL FACILITY WAS UNAVAILABLE. CONSEQUENTLY, THE
EXPENSES AND HOSPITAL CHARGES INCURRED IN HAVING SURGERY PERFORMED BY A
PRIVATE PHYSICIAN MAY NOT BE REIMBURSED. SEE B-185887, OCTOBER 15,
1977.
MR. FITZGERALD RECEIVED PAY AND ALLOWANCES FROM THE DATE OF HIS
INJURY THROUGH OCTOBER 20, 1972, WHEN HE WAS RELEASED FROM CARE BY A
MILITARY DOCTOR. HIS CLAIM FOR PAY AND ALLOWANCES IS FOR THE PERIOD
FROM OCTOBER 21, 1972, THROUGH APRIL 1, 1974.
UNDER 37 U.S.C. 204(G)(2) A MEMBER OF THE ARMY RESERVE IS ENTITLED TO
THE PAY AND ALLOWANCES PROVIDED BY LAW OR REGULATION FOR A MEMBER OF THE
REGULAR ARMY IF SUCH MEMBER IS DISABLED FROM INJURY IN THE LINE OF DUTY
WHILE SO EMPLOYED. SEE ALSO 10 U.S.C. 3687(2).
PARAGRAPH 80254(D)(3) OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND
ALLOWANCES ENTITLEMENTS MANUAL (DODPM) IN EFFECT AT THE TIME, PROVIDES
THAT A MEMBER'S ENTITLEMENT TO PAY AND ALLOWANCES WHILE DISABLED
TERMINATES UPON RELEASE OR RESTORATION TO MILITARY DUTY. ALSO, IN OUR
DECISION 52 COMP. GEN. 99 (1972), WE HELD THAT DISABILITY PAY TERMINATES
UPON A DETERMINATION BY PROPER MEDICAL AUTHORITY THAT THE MEMBER HAS
RECOVERED SUFFICIENTLY TO PERFORM NORMAL MILITARY DUTIES OR WHEN
ACTUALLY RESTORED TO NORMAL MILITARY DUTIES, WHICHEVER OCCURS FIRST.
IN THIS CASE, A MILITARY PHYSICIAN DETERMINED THAT THE MEMBER WAS
ABLE TO RETURN TO DUTY ON OCTOBER 21, 1972, AND THIS FINDING WAS
SUFFICIENT TO TERMINATE DISABILITY PAY AND ALLOWANCE IN ACCORDANCE WITH
THE DODPM CITED ABOVE.
NO EVIDENCE HAS BEEN PRESENTED INDICATING THAT MR. FITZGERALD
REQUIRED ANY ADDITIONAL MEDICAL ATTENTION IN CONNECTION WITH HIS ANKLE
INJURY BETWEEN OCTOBER 22, 1972, AND DECEMBER 16, 1973. WE HAVE LONG
HELD THAT MEMBERS HAVE AN OBLIGATION TO KEEP THE MILITARY INFORMED OF
THEIR DISABILITY STATUS IF THEY EXPECT TO CONTINUE ENTITLEMENT TO PAY
AND ALLOWANCES FOR INCAPACITATION. SEE 47 COMP. GEN. 716 (1968); 52
COMP. GEN. 99 (1972). THE RECORD DOES NOT REVEAL THAT THE MEMBER EVER
NOTIFIED HIS UNIT COMMANDER DURING THIS PERIOD THAT HE WAS HAVING
PHYSICAL PROBLEMS. IN FACT, AS NOTED ABOVE, THE RECORD INDICATES THAT
THE MEMBER ENGAGED IN RESERVE ACTIVITIES DURING THIS TIME. THUS, HIS
CLAIM FOR COMPENSATION FOR THIS PERIOD MUST BE DENIED.
IN CONNECTION WITH MR. FITZGERALD'S CLAIM FOR PAY AND ALLOWANCES FOR
THE PERIOD DECEMBER 16, 1973, TO MARCH 13, 1974, TABLE 8-2-4 OF THE
DODPM PROVIDES IN PART THAT IF THERE IS A SUBSEQUENT REOCCURRENCE OF A
DISABILITY, AND THE MEMBER IS UNFIT FOR HIS NORMAL MILITARY DUTY PER
MEDICAL AUTHORITY, HE IS ENTITLED TO ACTIVE DUTY PAY AND ALLOWANCES AND
MEDICAL BENEFITS COMMENSURATE WITH THE REGULAR FORCES.
WE HAVE HELD THAT RESUMPTION OF DISABILITY PAYMENTS AND ALLOWANCES IS
PROPER IF A MEMBER SUFFERS A RECURRENCE OF ANY INJURY AND IT IS
DETERMINED THAT THE MEMBER'S CONDITION RELATES TO AN ORIGINAL IN LINE OF
DUTY INJURY SO AS TO REQUIRE HOSPITALIZATION OR IF HIS DISABILITY IS
OTHERWISE CONTEMPORANEOUSLY DETERMINED BY PROPER MEDICAL AUTHORITY TO BE
SUCH AS TO CLEARLY PRECLUDE THE PERFORMANCE OF MILITARY DUTY. 52 COMP.
GEN. 667 (1973).
IN THIS REGARD, WE HAVE ALSO HELD THAT WHERE A RECORD FAILS TO
ESTABLISH THAT A MEMBER PROMPTLY NOTIFIED THE PROPER MILITARY
AUTHORITIES AND KEPT THEM ADVISED CURRENTLY CONCERNING HIS CONDITION, A
BASIS FOR DENIAL OF PAY AND ALLOWANCES MAY EXIST. SEE 52 COMP. GEN. 99
(1972).
IN MR. FITZGERALD'S CASE, HE NOTIFIED HIS UNIT COMMANDER AFTER THE
SURGERY HAD BEEN PERFORMED BY A CIVILIAN DOCTOR. WHILE IT APPEARS THAT
ARMY PERSONNEL INVOLVED COULD HAVE BEEN MORE SPECIFIC IN DIRECTING AND
PROCESSING HIS CASE, HE DID NOT MAKE ANY ATTEMPT TO HAVE HIS CASE
EVALUATED BY THE PROPER SERVICE MEDICAL AUTHORITIES. UNDER THESE
CIRCUMSTANCES IT IS OUR VIEW THAT PAYMENT OF PAY AND ALLOWANCES FOR THE
PERIOD DECEMBER 17, 1973, THROUGH MARCH 13, 1974, MAY NOT BE AUTHORIZED.
CORRESPONDENCE FROM MR. FITZGERALD'S COUNSEL INDICATES THAT HE IS
ALSO CLAIMING REIMBURSEMENT FOR MEDICAL EXPENSES INCURRED BY HIS WIFE.
THIS CLAIM IS BASED ON THE ASSUMPTION THAT THE MEMBER WAS IN AN ACTIVE
DUTY STATUS DURING THE PERIOD JANUARY 19 THROUGH OCTOBER 21, 1972, SINCE
HE WAS RECEIVING PAY AND ALLOWANCES. IF HE HAD BEEN IN THAT STATUS HIS
WIFE WOULD HAVE BEEN ENTITLED TO MEDICAL BENEFITS.
ALTHOUGH A RESERVE MEMBER WHO IS INJURED IN THE LINE OF DUTY IS
ENTITLED TO PAY AND ALLOWANCES DURING THE PERIOD OF HIS DISABILITY BY
VIRTUE OF 37 U.S.C. 204(G)(2), SUCH ENTITLEMENT DOES NOT CONFER AN
ACTIVE DUTY STATUS ON THE MEMBER. SEE 54 COMP. GEN. 33, 37 (1974).
THUS, SINCE MR. FITZGERALD IS NOT CONSIDERED TO BE IN AN ACTIVE DUTY
STATUS WHILE RECEIVING PAY AND ALLOWANCES UNDER 37 U.S.C. 204(G)(2) HIS
DEPENDENTS ARE NOT ENTITLED TO THE MEDICAL BENEFITS UNDER CHAPTER 55,
TITLE 10, UNITED STATES CODE.
ACCORDINGLY THE SETTLEMENT OF OUR CLAIMS DIVISION DENYING HIS CLAIM
MUST BE SUSTAINED.
B-193963, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. NONMANDATORY USER OF FSS CONTRACT IS FREE TO USE MULTIPLE-AWARD
FSS SOURCES IN LIEU OF SINGLE SOURCE CONTRACTS WHERE ONLY PARTICULAR
ITEM ON MULTIPLE-AWARD SCHEDULE MEETS ITS MINIMUM NEEDS.
2. PROTESTER'S DISAGREEMENT WITH AGENCY'S DECISION ESTABLISHING
MOL'S FOR MULTIPLE-AWARD CONTRACTS IS NOT BASIS TO DISTURB DECISION
SINCE PROTESTER HAS NOT SHOWN THAT AGENCY ACTED UNREASONABLY OR IN
VIOLATION OF REGULATION.
BAKER MANUFACTURING COMPANY, INC.:
BAKER MANUFACTURING COMPANY, INC. (BAKER), PROTESTS ANY AWARD FOR
WALL UNITS UNDER SOLICITATION NO. FEFP-S1-0039-N-6-14-78 ISSUED BY THE
GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE (GSA). THE
PROTESTER CONTENDS THAT NEGOTIATED MULTIPLE-AWARD SCHEDULES SHOULD NOT
BE USED TO PROCURE THESE WALL UNITS WHEN THERE ARE COMPETITIVE (SINGLE
SOURCE) SCHEDULES AVAILABLE FOR ALMOST THE IDENTICAL ITEM. IN ADDITION,
THE PROTESTER CONTENDS THAT THE USE OF A $100,000 MAXIMUM ORDER
LIMITATION (MOL) FOR THESE MULTIPLE AWARD SCHEDULES IS TOO HIGH AND
SHOULD BE REDUCED TO SOMETHING LESS THAN $25,000. FOR THE REASONS SET
OUT BELOW, THE PROTEST IS DENIED.
BAKER CURRENTLY HOLDS THE COMPETITIVELY AWARDED (SINGLE SOURCE)
CONTRACT FOR FEDERAL SUPPLY SCHEDULE (FSS) 71 PART VII B (METAL FRAME
DORMITORY FURNITURE) AND IS PROTESTING THE USE IN THIS PROCUREMENT OF
MULTIPLE-AWARD SCHEDULE CONTRACTS FOR FSS 71 PART XIX (CONTEMPORARY WALL
UNITS FOR OFFICE USE). IN BAKER'S OPINION, THE PURCHASING AGENCY - THE
AIR FORCE - IS MISUSING THE MULTIPLE-AWARD SCHEDULE PART XIX BY
PROCURING WALL UNITS FOR USE AS DORMITORY FURNITURE WHICH BAKER BELIEVES
ARE INTENDED TO BE USED EXCLUSIVELY AS OFFICE FURNITURE. IN OTHER
WORDS, BAKER BELIEVES THAT ANY PURCHASE ORDER FOR THESE WALL UNITS
SHOULD BE MADE UNDER PART VII B BECAUSE NOT ONLY IS THE FURNITURE
AVAILABLE UNDER THAT PART DESIGNED SPECIFICALLY FOR DORMITORY USE, BUT
THE CONTRACT FOR THAT PART WAS ALSO AWARDED COMPETITIVELY THEREBY
GUARANTEEING BETTER QUALITY AND BETTER PRICE.
WHILE CONCEDING THAT THERE IS A NEED TO INTRODUCE AND TEST NEW
STYLES, TECHNIQUES, AND MATERIALS, BAKER MAINTAINS THAT THIS SHOULD NOT
BE DONE AT THE EXPENSE OF COMPETITIVELY AWARDED CONTRACTS WHICH PROVIDE
SIMILAR ITEMS. BAKER ARGUES, THEREFORE, THAT IF THE GOVERNMENT INTENDS
TO PURCHASE THE WALL UNITS AVAILABLE UNDER PART XIX, THESE PROCUREMENTS
SHOULD BE TREATED, IF ANYTHING, ON THE SCALE OF A SMALL DEMONSTRATION
PROJECT WITH THE MOL FOR THAT PART SET AT SOMETHING LESS THAN $25,000
RATHER THAN AT THE $100,000 MOL ESTABLISHED FOR THE COMPETITIVELY
AWARDED CONTRACTS SUCH AS UNDER FSS 71, PART VII B. MOREOVER, BAKER
CONTENDS THAT BOTH THOSE WHO HOLD THE CONTRACTS UNDER PART XIX AND THOSE
WHO MIGHT PURCHASE WALL UNITS UNDER THAT PART SHOULD BE CAUTIONED THAT
PART XIX IS INTENDED EXCLUSIVELY FOR OFFICE USE AND THE SALE OF THESE
UNITS FOR OTHER THAN OFFICE USE MAY REQUIRE TERMINATION OF THE CONTRACT.
FINALLY, BAKER ARGUES THAT ALL MULTIPLE-AWARD CONTRACTS WHICH OFFER
WALL UNITS FOR HOUSING PURPOSES AND WHICH ALSO CONFLICT WITH
COMPETITIVELY AWARDED (SINGLE SOURCE) CONTRACTS OFFERING SIMILAR ITEMS
SHOULD BE RESTRICTED TO TEST LEVEL MOL'S OF $5,000 FOR SINGLE ITEMS AND
$10,000 FOR MULTIPLE ITEMS.
GSA, HOWEVER, DISAGREES WITH BAKER'S VARIOUS CONTENTIONS. IT POINTS
OUT THAT THE DEPARTMENT OF DEFENSE (DOD) IS NOT A MANDATORY USER OF FSS
71, PART VII B. GSA ARGUES, THEREFORE, THAT DOD HAS THE OPTION OF
PURCHASING THE WALL UNITS FROM EITHER PART VII B OR PART XIX DEPENDING
UPON ITS NEEDS. AS TO DETERMINING WHAT THOSE NEEDS ARE, GSA ARGUES THAT
AN AGENCY IS ACCORDED A REASONABLE RANGE OF JUDGMENT AND DISCRETION AND
THAT AS A GENERAL RULE OUR OFFICE WILL NOT QUESTION THE AGENCY'S
DETERMINATION UNLESS THERE IS A CLEAR SHOWING THAT THE DETERMINATION HAS
NO REASONABLE BASIS. IN LIGHT OF THIS, GSA CONTENDS THAT THE BURDEN IS
ON BAKER TO PROVE AFFIRMATIVELY THAT THE AIR FORCE ERRED IN ITS
DETERMINATION OF ITS MINIMUM NEEDS. IN GSA'S OPINION, BAKER HAS FAILED
TO MEET THIS BURDEN SINCE IT HAS NOT PRESENTED ANY INFORMATION
CONTRADICTING THE AIR FORCE'S DECISION TO PURCHASE WALL UNITS FROM PART
XIX.
REGARDING BAKER'S CONTENTION THAT THE MOL ON PART XIX IS TOO HIGH,
GSA MAINTAINS THAT THE MOL'S FOR BOTH PART VII B AND PART XIX WERE SET
IN ACCORDANCE WITH THE APPLICABLE REGULATION. IT NOTES THAT THERE IS NO
PROVISION, AS BAKER SUGGESTS, FOR ESTABLISHING A MOL ON THE BASIS OF
WHETHER THE CONTRACT IS GOING TO BE AWARDED COMPETITIVELY - THAT IS,
SINGLE SOURCE - OR AS A MULTIPLE AWARD. MOREOVER, GSA BELIEVES THAT
BAKER'S TEST IDEA IS IMPRACTICAL SINCE THE GOVERNMENT WOULD LOSE THE
BENEFITS OF THE DISCOUNT STRUCTURE AND AS A RESULT LOSE MONEY.
ESSENTIALLY, BAKER'S PROTEST QUESTIONS THE USE OF MULTIPLE-AWARD
CONTRACTS WHEN THERE ARE SINGLE SOURCE CONTRACTS AVAILABLE WHICH OFFER
ALMOST THE IDENTICAL ITEM. IN THAT TYPE OF SITUATION, BAKER BELIEVES
THAT THE PROCURING AGENCY SHOULD HAVE TO PURCHASE THE ITEM FROM THE
HOLDER OF THE SINGLE SOURCE CONTRACT.
WE THINK THE REAL QUESTION HERE IS WHETHER THE AIR FORCE NEEDS WALL
UNITS DESIGNED TO SPECIFICATIONS ESTABLISHED FOR DORMITORY FURNITURE OR
FOR THOSE ESTABLISHED FOR OFFICE FURNITURE, RATHER THAN THE AIR FORCE'S
STATUS AS A FSS USER. WE BELIEVE THIS IS SO BECAUSE EVEN A MANDATORY
USER IS NOT REQUIRED TO PURCHASE A PARTICULAR ITEM UNDER THE FSS WHERE
IT DOES NOT MEET ITS NEEDS. IN THIS CONNECTION, IT IS WELL SETTLED THAT
THE DETERMINATION OF THE MINIMUM NEEDS OF AN AGENCY IS PROPERLY THE
RESPONSIBILITY OF THE CONTRACTING AGENCY. HARRIS DATA COMMUNICATION,
INC., B-192384, JANUARY 8, 1979, 79-1 CPD 7; QUEST ELECTRONICS,
B-193541, MARCH 27, 1979; 79-1 CPD 205. MOREOVER, WE HAVE RECOGNIZED
THAT GOVERNMENT PROCUREMENT OFFICIALS WHO ARE FAMILIAR WITH THE
CONDITIONS UNDER WHICH SUPPLIES AND EQUIPMENT HAVE BEEN AND WILL BE USED
ARE GENERALLY IN THE BEST POSITION TO KNOW WHAT THOSE MINIMUM NEEDS ARE.
GTE SYLVANIA INCORPORATED, B-192985, JANUARY 25, 1979, 79-1 CPD 53.
THUS, OUR OFFICE WILL NOT QUESTION AN AGENCY'S DETERMINATION OF ITS
MINIMUM NEEDS UNLESS THERE IS A CLEAR SHOWING THAT THE DETERMINATION HAS
NO REASONABLE BASIS. QUEST ELECTRONICS, SUPRA; DICTAPHONE CORPORATION,
B-192305, DECEMBER 22, 1978, 78-2 CPD 431. THE BURDEN OF PROOF FOR SUCH
A SHOWING RESTS UPON THE PROTESTER. BELL & HOWELL CORPORATION;
REALIST, INC., B-193301, FEBRUARY 6, 1979, 79-1 CPD 82.
THE CRITICAL FACTOR IS NOT THE GENERAL PURPOSE FOR WHICH THE WALL
UNITS ARE DESIGNED, AS BAKER CONTENDS, BUT WHETHER ONLY THOSE AVAILABLE
UNDER PART XIX MEET THE AIR FORCE'S MINIMUM NEEDS. THE AIR FORCE HAS
DETERMINED THAT ONLY THE WALL UNITS AVAILABLE UNDER PART XIX SATISFY ITS
MINIMUM NEEDS. BAKER HAS NOT PRESENTED ANY EVIDENCE WHICH SHOWS THAT
THE AIR FORCE'S DETERMINATION OF ITS MINIMUM NEEDS IS UNREASONABLE.
THEREFORE, THE AIR FORCE CAN PURCHASE WALL UNITS DESIGNED FOR OFFICES
AND USE THEM AS DORMITORY FURNITURE WITHOUT VIOLATION OF BAKER'S FSS
CONTRACT FOR DORMITORY WALL UNITS. HOWEVER, IT SHOULD BE POINTED OUT
THAT ONCE A NONMANDATORY USER ELECTS TO USE THE FEDERAL SUPPLY SCHEDULE
IT MAY NOT PURCHASE ANY ITEM AVAILABLE ON THE SCHEDULE, BUT ONLY THE
LOWEST PRICED ITEM WHICH MEETS ITS MINIMUM NEEDS.
BAKER HAS ALSO ARGUED THAT ANY MULTIPLE-AWARD CONTRACT WHICH OFFERS
WALL UNITS THAT CONFLICT WITH SINGLE SOURCE CONTRACTS OFFERING SIMILAR
ITEMS SHOULD BE RESTRICTED TO TEST LEVEL MOL'S OF $5,000 FOR SINGLE
ITEMS AND $10,000 FOR MULTIPLE ITEMS. HOWEVER, BAKER HAS NOT SHOWN THAT
IN ESTABLISHING THE MOL'S IN QUESTION GSA HAS ACTED UNREASONABLY OR IN
VIOLATION OF ANY REGULATION. UNDER THESE CIRCUMSTANCES, WE SEE NO BASIS
FOR QUESTIONING THE MOL SIZE. SEE IDAHO FOREST INDUSTRIES, INC.,
B-189676, DECEMBER 27, 1977, 77-2 CPD 504.
THE PROTEST IS DENIED.
B-194237, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHETHER CONTRACTOR WILL DELIVER ITEM IN ACCORDANCE WITH
SPECIFICATIONS CONTAINED IN IFB IS NOT MATTER OF RESPONSIVENESS BUT IS A
MATTER RELATING TO BIDDER'S RESPONSIBILITY. GAO DOES NOT REVIEW
AFFIRMATIVE DETERMINATION OF RESPONSIBILITY IN THE ABSENCE OF SHOWING OF
FRAUD OR ALLEGATIONS THAT DEFINITIVE RESPONSIBILITY CRITERIA IN
SOLICITATION WERE MISAPPLIED.
2. REQUIREMENT IN IFB SPECIFICATION THAT PRODUCT OFFERED SATISFY
CERTAIN LIFE CYCLE TESTS DOES NOT CONSTITUTE DEFINITIVE RESPONSIBILITY
CRITERION THE APPLICATION OF WHICH WOULD BE REVIEWED BY GAO.
EXIDE POWER SYSTEMS DIVISION, ESB, INC.:
EXIDE POWER SYSTEMS DIVISION, ESB INCORPORATED (EXIDE) PROTESTS THE
AWARD OF A CONTRACT TO RAMAK INDUSTRIES, DIVISION OF EQUIPMENT
ENGINEERING COMPANY (RAMAK) UNDER INVITATION FOR BIDS (IFB) DLA
400-79-B-0604 FOR STORAGE BATTERIES. FOR THE REASONS STATED BELOW THE
PROTEST IS DISMISSED.
THE IFB PROVIDED THAT THE REQUIRED BATTERIES SHOULD BE IN ACCORDANCE
WITH FEDERAL SPECIFICATION WB-113B DATED AUGUST 7, 1970 AND MILITARY
STANDARD MS15367, REV. B, DATED JUNE 29, 1964, PART NUMBER MS15367-1.
THE SPECIFICATION REQUIRED THE BATTERIES TO PASS CERTAIN LIFE CYCLE
TESTS.
RAMAK, AS PART OF ITS LOW BID, STATED THAT IT WAS THE MANUFACTURER OF
THE ITEM OFFERED AS "RAMAK MODEL 18-75-13 450 AH." THE IFB INCORPORATED
BY REFERENCE A "MASTER SOLICITATION." CLAUSE C1 THEREOF, ENTITLED
"COMPLIANCE WITH SPECIFICATIONS", PROVIDES:
"WHERE ITEMS ARE DESCRIBED IN THE SCHEDULE OF THIS SOLICITATION BY
DETAILED SPECIFICATIONS, ANY REFERENCE BY THE BIDDER/OFFEROR TO BRAND OR
TRADE NAMES OR MODEL NUMBERS OR TO BID OR OFFER SAMPLES NOT SOLICITED BY
THIS SOLICITATION WILL BE ASSUMED TO MEAN THAT THE ITEM SO REFERENCED
CONFORMS TO THE SPECIFICATION OR WILL BE MODIFIED TO CONFORM TO THE
SPECIFICATION, UNLESS IT IS CLEAR FROM THE BID/OFFER OR THE ACCOMPANYING
PAPERS THAT THE BIDDER/OFFEROR INTENDS TO QUALIFY THE BID/OFFER.
PRODUCTS DELIVERED UNDER ANY RESULTING CONTRACT SHALL CONFORM TO THE
SPECIFICATIONS CITED IN THIS SOLICITATION."
IN ADDITION, SECTION I OF THE IFB ENTITLED "MANDATORY CONTRACTOR
INSPECTION SYSTEM" CLAUSE 2 PROVIDES:
"CONTRACTOR INSPECTION RESPONSIBILITY
THE CONTRACTOR IS RESPONSIBLE FOR CONTROLLING PRODUCT QUALITY AND FOR
OFFERING FOR ACCEPTANCE TO THE GOVERNMENT ONLY THOSE ITEMS OR LOTS OF
ITEMS CONFORMING TO CONTRACTUAL REQUIREMENTS. ***"
EXIDE FIRST CONTENDS THAT RAMAK IS INCAPABLE OF SUPPLYING A BATTERY
WHICH WILL PASS THE LIFE CYCLE TESTS AND THEREFORE, THAT RAMAK'S BID WAS
NONRESPONSIVE IN THAT THE ITEM OFFERED WOULD NOT MEET THE PERFORMANCE
SPECIFICATIONS OF SPECIFICATION WB-113B. WE DO NOT AGREE.
BY SUBMITTING ITS UNQUALIFIED BID, RAMAK BECAME BOUND, IF AWARDED THE
CONTRACT, TO PROVIDE ITEMS WHICH WOULD MEET THE REQUIREMENTS OF WB-113B.
UNLESS SOMETHING ON THE FACE OF THE BID LIMITS, REDUCES OR MODIFIES THE
OBLIGATION OF A PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE WITH THE
INVITATION, THE BID MUST BE CONSIDERED RESPONSIVE. SCIENCE
APPLICATIONS, INC., B-193479, MARCH 8, 1979, 79-1 CPD 167. THUS RAMAK'S
BID MUST BE CONSIDERED RESPONSIVE.
THE PROTESTER'S ALLEGATION ACTUALLY RELATES TO RAMAK'S
RESPONSIBILITY, AND IN THIS RESPECT EXIDE CONTENDS THAT THE LIFE CYCLE
TESTING REQUIREMENTS OF THE SPECIFICATIONS CONSTITUTED DEFINITIVE
RESPONSIBILITY CRITERIA WHICH RAMAK CANNOT MEET. BY SO CONTENDING, ESB
SEEKS TO BRING ITS PROTEST WITHIN AN EXCEPTION TO OUR GENERAL POLICY OF
NOT REVIEWING AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY BY AN AGENCY.
INTERSTATE COMMERCE COMMISSION - RECONSIDERATION, B-193693, JUNE 11,
1979, 79-1 CPD 409. HOWEVER, DEFINITIVE RESPONSIBILITY CRITERIA ARE
SOLELY CONCERNED WITH THE QUALIFICATIONS OF A BIDDER, NOT OF THE ITEM
OFFERED. SUCH SPECIAL STANDARDS OF RESPONSIBILITY LIMIT THE CLASS OF
BIDDERS TO THOSE MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE
QUALIFICATIONS NECESSARY FOR ADEQUATE CONTRACT PERFORMANCE, E.G.,
MINIMUM EXPERIENCE REQUIREMENTS. AMERICAN ATHLETIC EQUIPMENT DIVISION,
AMF INCORPORATED, B-193283, MARCH 29, 1979, 79-1 CPD 216. IN THE
PRESENT CASE, THE SPECIFICATION'S TESTING REQUIREMENTS CONCERN
QUALIFICATION OF THE BATTERY, NOT THE SUPPLIER. THUS WE CANNOT AGREE
WITH EXIDE THAT DEFINITIVE RESPONSIBILITY CRITERIA ARE PRESENT.
HERE THE CONTRACTING OFFICER, AFTER RECEIVING ADVICE FROM HIS
TECHNICAL PERSONNEL THAT RAMAK'S BATTERY HAD PREVIOUSLY MET THE TESTING
REQUIREMENTS OF SPECIFICATION WB-113B, DETERMINED THAT RAMAK COULD BE
EXPECTED TO FURNISH BATTERIES AS REQUIRED BY THE SPECIFICATIONS AND WAS
OTHERWISE A RESPONSIBLE BIDDER. SINCE THERE ARE NO CIRCUMSTANCES
PRESENT UNDER WHICH WE WOULD REVIEW THAT DETERMINATION, THE PROTEST OF
EXIDE IS DISMISSED.
B-194714.2, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST ALLEGING IMPROPER REJECTION OF BID FILED WITH GAO MORE
THAN 10 DAYS AFTER INITIAL ADVERSE AGENCY ACTION ON PROTEST TO AGENCY IS
UNTIMELY. ALTHOUGH PROTESTER CONTINUED TO PROTEST TO AGENCY RATHER THAN
APPEAL TO GAO, IT NEVERTHELESS IS REQUIRED TO FILE PROTEST WITH GAO
AFTER NOTIFICATION OF INITIAL ADVERSE AGENCY ACTION.
2. PROTESTER MAY NOT DELAY FILING OF PROTEST WITH GAO PENDING
DEBRIEFING WHERE GROUNDS FOR PROTEST WERE WELL KNOWN PRIOR TO
DEBRIEFING.
OSWEGO PACKAGE BOILER COMPANY, CYCLOTHERM DIVISION:
OSWEGO PACKAGE BOILER COMPANY, CYCLOTHERM DIVISION (CYCLOTHERM)
PROTESTS THE REJECTION OF ITS BID FOR STEAM HEATING BOILERS UNDER
INVITATION FOR BIDS CG-915025-A, ISSUED BY THE UNITED STATES COAST
GUARD. THE COAST GUARD FOUND CYCLOTHERM'S BID NONRESPONSIVE BECAUSE IT
OMITTED A PRICE FOR ONE ITEM AND DEVIATED FROM THE DELIVERY SCHEDULE
SPECIFIED IN THE SOLICITATION.
CYCLOTHERM TIMELY PROTESTED THIS DECISION TO THE COAST GUARD BY
LETTER OF APRIL 12, 1979 WHEREIN THE FIRM REQUESTED WRITTEN ADVICE OF
THE AGENCY'S REASON FOR REJECTION AND A "FORMAL HEARING." BY LETTER OF
APRIL 18, THE COAST GUARD EXPLAINED ITS DECISION AND INFORMED CYCLOTHERM
THAT ITS REQUEST FOR AWARD ABEYANCE COULD NOT BE CONSIDERED. A MEETING
BETWEEN CONTRACTING OFFICIALS AND CYCLOTHERM CONCERNING THE PROTEST WAS
HELD ON MAY 11. CYCLOTHERM SUBSEQUENTLY PROTESTED TO OUR OFFICE ON MAY
18.
FOR THE FOLLOWING REASONS, WE BELIEVE CYCLOTHERM'S PROTEST IS
UNTIMELY UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1979).
A PROTEST MUST BE FILED WITH THE CONTRACTING AGENCY OR GAO WITHIN 10
DAYS AFTER THE BASIS FOR PROTEST IS KNOWN. 4 C.F.R. SEC. 20.2(B)(2).
WHEN A PROTEST IS FILED INITIALLY WITH A CONTRACTING AGENCY, A
SUBSEQUENT PROTEST TO GAO MUST BE FILED WITHIN 10 DAYS AFTER THE
PROTESTER HAS ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF INITIAL ADVERSE AGENCY
ACTION ON ITS PROTEST. 4 C.F.R. SEC. 20.2(A). THE COAST GUARD'S APRIL
18 LETTER INFORMED CYCLOTHERM OF THE DETAILS OF THE BID REJECTION, IN
EFFECT DENIED CYCLOTHERM'S PROTEST AND WAS INITIAL ADVERSE AGENCY
ACTION. SINCE CYCLOTHERM'S PROTEST TO OUR OFFICE WAS NOT FILED WITHIN
10 DAYS OF NOTICE OF ADVERSE AGENCY ACTION ON ITS PROTEST TO THE AGENCY,
IT IS UNTIMELY.
ALTHOUGH CYCLOTHERM APPARENTLY CONTINUED TO SEEK CLARIFICATION OF THE
COAST GUARD'S DECISION AT THE AGENCY LEVEL, IT WAS NEVERTHELESS REQUIRED
TO FILE A PROTEST WITH GAO AFTER NOTIFICATION OF INITIAL ADVERSE AGENCY
ACTION. MR. SCRUB CAR WASH SYSTEMS, INC., B-186586, JULY 9, 1976, 76-2
CPD 29. GENERALLY A PROTESTER MAY REASONABLY WITHHOLD FILING A PROTEST
WITH THIS OFFICE UNTIL IT HAS HAD A DEBRIEFING FROM THE CONTRACTING
AGENCY TO LEARN WHY ITS BID WAS NOT CONSIDERED FOR AWARD. BUT WHERE A
POTENTIAL PROTESTER HAS BEEN SUFFICIENTLY INFORMED OF THE BASIS FOR
REJECTION PRIOR TO ANY DEBRIEFING, WE WILL NOT PERMIT A DELAY IN FILING
THE PROTEST PENDING THE DEBRIEFING SINCE NO APPARENT USEFUL PURPOSE IS
SERVED. INFORMATICS, INC., B-188564, APRIL 18, 1977, 77-1 CPD 272.
ACCORDINGLY, WE CONCLUDE THAT CYCLOTHERM'S PROTEST IS UNTIMELY AND
NOT FOR CONSIDERATION ON THE MERITS.
B-195042, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE, WHO WAS PRESENT AT DELIVERY OF HIS CHILD IN ACCORDANCE WITH
LAMAZE METHOD OF PREPARED CHILDBIRTH, CLAIMS SICK LEAVE SHOULD BE
SUBSTITUTED FOR ANNUAL LEAVE GRANTED BY AGENCY. SICK LEAVE IS
APPROPRIATE ONLY WHEN CIRCUMSTANCES SPECIFICALLY MEET THE CRITERIA
CONTAINED IN THE REGULATIONS. EMPLOYEE'S CLAIM FOR SUBSTITUTION OF SICK
LEAVE FOR ANNUAL LEAVE IS DISALLOWED SINCE HE DID NOT UNDERGO MEDICAL
TREATMENT AND HE WAS NOT INCAPACITATED FOR DUTY AS REQUIRED BY
REGULATIONS. SEE 5 C.F.R. SEC. 630.401.
WILLIAM STUART - APPROVAL OF SICK LEAVE:
IS AN EMPLOYEE ENTITLED TO SICK LEAVE WHEN HE IS ABSENT FROM DUTY TO
BE PRESENT WITH HIS WIFE DURING LABOR AND DELIVERY UNDER THE LAMAZE
METHOD OF PREPARED CHILDBIRTH?
COUNSEL FOR THE NATIONAL TREASURY EMPLOYEES UNION (NTEU) HAS
REQUESTED A DECISION ON BEHALF OF MR. WILLIAM STUART, AN EMPLOYEE OF THE
INTERNAL REVENUE SERVICE'S (IRS) BROOKHAVEN SERVICE CENTER, HOLTSVILLE,
NEW YORK. MR. STUART CLAIMS THAT HE SHOULD HAVE BEEN GRANTED SICK LEAVE
BY IRS RATHER THAN ANNUAL LEAVE UNDER THE CIRCUMSTANCES STATED BELOW.
MR. STUART REQUESTED SICK LEAVE IN ADVANCE ON MARCH 23, 1979,
PURSUANT TO CIVIL SERVICE COMMISSION (NOW OFFICE OF PERSONNEL
MANAGEMENT) REGULATIONS IN TITLE 5 OF THE CODE OF FEDERAL REGULATIONS,
SECTION 630.402 (1978). THE REQUEST STATED THAT HIS WIFE WAS EXPECTING
A CHILD AND THAT THEY WOULD "BE USING THE LAMAZE METHOD OF PREPARED
CHILDBIRTH, IN WHICH THE HUSBAND TAKES AN ACTIVE PART IN THE BIRTH
PROCESS ACTING AS A COACH TO THE MOTHER." SINCE HIS PRESENCE WAS
REQUIRED DURING LABOR AND DELIVERY, HE REQUESTED SICK LEAVE FOR THAT
PERIOD. THE REQUEST WAS SUPPORTED BY A DOCTOR'S CERTIFICATE WHICH
STATED THAT MR. STUART "WILL COACH HIS WIFE THROUGH LABOR AND DELIVERY
AND HE MUST BE PRESENT FOR THE ENTIRE PROCESS."
MR. STUART'S REQUEST FOR ADVANCE APPROVAL OF SICK LEAVE WAS DENIED BY
THE IRS' BROOKHAVEN SERVICE CENTER ON THE GROUND THAT SICK LEAVE MAY
ONLY BE USED IF THE EMPLOYEE HIMSELF IS ILL OR UNDERGOING MEDICAL
TREATMENT. MR. STUART'S SUBSEQUENT GRIEVANCE WAS REJECTED BY IRS ON
APRIL 18, 1979, SINCE THE USE OF SICK LEAVE WOULD CONTRAVENE THE FEDERAL
PERSONNEL MANUAL. ON APRIL 30, 1979, MR. STUART'S WIFE GAVE BIRTH TO A
CHILD AND THE LAMAZE METHOD WAS USED.
THE NTEU LETTER TO US ON BEHALF OF THE CLAIMANT REFERS TO 5 C.F.R.
SEC. 630.401 (1978) WHICH STATES IN PERTINENT PART:
"AN AGENCY SHALL GRANT SICK LEAVE TO AN EMPLOYEE WHEN THE EMPLOYEE:
"(A) RECEIVES MEDICAL, DENTAL, OR OPTICAL EXAMINATION OR TREATMENT;
"(B) IS INCAPACITATED FOR THE PERFORMANCE OF DUTIES BY SICKNESS,
INJURY, OR PREGNANCY AND CONFINEMENT ***."
THE NTEU SAYS THAT THE CITED REGULATIONS DO NOT PRECLUDE THE GRANTING
OF SICK LEAVE TO MR. STUART BECAUSE (1) HE WAS INCAPACITATED TO PERFORM
HIS DUTIES DUE TO PREGNANCY AND CONFINEMENT FOR WHICH SICK LEAVE IS
ALLOWED UNDER 5 C.F.R. SEC. 630.401(B), AND (2) HIS PRESENCE AT THE
BIRTH OF HIS CHILD WAS PART OF A "MEDICAL TREATMENT" FOR WHICH SICK
LEAVE IS ALLOWED UNDER 5 C.F.R. SEC. 630.401(A). THE UNION ASSERTS THAT
IT IS OF NO MOMENT THAT HE WAS NOT CARRYING THE CHILD HIMSELF BECAUSE
THE LAMAZE METHOD RECOGNIZES THE FACT THAT THE FATHER HAS A CONTINUING
AND ESSENTIAL ROLE IN THE BIRTH PROCESS ITSELF AND THE MEDICAL TREATMENT
IS NECESSARY TO FULFILL THE GOALS OF THE LAMAZE METHOD.
WE BELIEVE THAT THE RESULT IN THE PRESENT CASE IS CONTROLLED BY THE
SICK LEAVE REGULATION AS INTERPRETED IN CHARLES T. TURNER, B-181686,
SEPTEMBER 2, 1975, PUBLISHED AT 55 COMP. GEN. 183, AND THAT MR. STUART'S
REQUEST FOR SICK LEAVE MUST BE DISALLOWED.
IN TURNER, THE EMPLOYEE REQUESTED SICK LEAVE BECAUSE HE HAD BEEN UP
ALL NIGHT WITH HIS SICK WIFE AND NEEDED REST. HE GRIEVED THE AGENCY'S
DECISION TO CHARGE HIS ABSENCE TO ANNUAL LEAVE. THE ARBITRATOR AGREED
WITH HIM ON THE BASIS THAT HE HAD BEEN INCAPACITATED FOR DUTY. BECAUSE
THE CIVIL SERVICE COMMISSION HAD THE DUTY UNDER 5 U.S.C. SEC. 6311 TO
ISSUE REGULATIONS ON SICK LEAVE, WE ASKED THE COMMISSION WHETHER THE
ARBITRATOR'S AWARD CONFLICTED WITH THE REGULATIONS IN 5 C.F.R. SEC.
630.401. THE COMMISSION STATED THAT IT "HAS CONSISTENTLY INTERPRETED
THIS REGULATION TO MEAN THAT SICK LEAVE IS APPROPRIATE FOR USE ONLY WHEN
THE CIRCUMSTANCES SPECIFICALLY AND LITERALLY MEET THE CRITERIA CONTAINED
IN THE REGULATION." FURTHER, THE COMMISSION STATED THAT THE GENEROUS
AMOUNTS OF ANNUAL LEAVE GRANTED TO FEDERAL EMPLOYEES WERE AUTHORIZED BY
LAW WITH THE UNDERSTANDING THAT THEY WERE MEANT FOR MORE THAN VACATIONS,
I.E., ANNUAL LEAVE WAS ALSO TO BE USED FOR A VARIETY OF PERSONAL AND
EMERGENCY REASONS, SUCH AS TAKING A FAMILY MEMBER TO A DOCTOR OR A
HOSPITAL OR CARING FOR A FAMILY MEMBER WHO IS ILL. 55 COMP. GEN. 183,
AT 185. WE AGREED WITH THE COMMISSION.
IN THE PRESENT CASE, IT IS CLEAR THAT THE CIRCUMSTANCES OF MR.
STUART'S ABSENCE FROM DUTY DO NOT SPECIFICALLY AND LITERALLY MEET THE
CRITERIA CONTAINED IN THE REGULATION. ALTHOUGH HIS PRESENCE AT THE
BIRTH MAY HAVE BEEN AN ESSENTIAL PART OF THE CHILDBIRTH METHOD USED, MR.
STUART DID NOT RECEIVE MEDICAL TREATMENT AS REQUIRED BY SUBSECTION (A)
OF 5 C.F.R. SEC. 630.401. HIS WIFE RECEIVED THE TREATMENT AND HE WAS
THERE TO ASSIST. WE TAKE OFFICIAL NOTICE OF THE FACT THAT BABIES ARE
OFTEN BORN WITHOUT THE FATHER BEING PRESENT. LIKEWISE, MR. STUART WAS
NOT INCAPACITATED FOR DUTY FOR ANY OF THE REASONS LISTED IN SUBSECTION
(B) OF THE REGULATION, NAMELY SICKNESS, INJURY, OR PREGNANCY AND
CONFINEMENT. IN FACT HE WAS NOT "INCAPACITATED" AT ALL AS SHOWN BY HIS
ADVANCE REQUEST FOR SICK LEAVE. HE VOLUNTARILY CHOSE TO BE AWAY FROM
DUTY TO BE WITH HIS WIFE AND, COMMENDABLE AS THIS MAY BE, IT DOES NOT
QUALIFY HIM FOR SICK LEAVE. HIS SITUATION IS ESSENTIALLY NO DIFFERENT
THAN THE EMPLOYEE WHO TRANSPORTS HIS WIFE OR CHILD TO A HOSPITAL OR WHO
CARES FOR A SICK WIFE OR CHILD. IN BOTH EXAMPLES THE EMPLOYEE IS
REQUIRED TO USE ANNUAL LEAVE ACCORDING TO THE CIVIL SERVICE COMMISSION.
THE ONLY SITUATIONS IN WHICH THE COMMISSION'S REGULATION PERMITS SICK
LEAVE WHEN THE EMPLOYEE HIMSELF IS NOT EITHER INCAPACITATED OR RECEIVING
TREATMENT ARE DESCRIBED IN 5 C.F.R. SECS. 630.401(C) AND (D). UNDER
THOSE PROVISIONS SICK LEAVE IS GRANTED IF THE EMPLOYEE CARES FOR A
FAMILY MEMBER WHO HAS A CONTAGIOUS DISEASE OR IF THE EMPLOYEE WOULD
JEOPARDIZE THE HEALTH OF OTHERS BECAUSE OF EXPOSURE TO CONTAGIOUS
DISEASE. WE BELIEVE THAT IF FURTHER REASONS FOR GRANTING SICK LEAVE ARE
TO BE ALLOWED, IT WILL HAVE TO BE DONE BY AMENDMENT TO 5 C.F.R. SEC.
630.401, NOT BY DECISION.
ACCORDINGLY, THERE IS NO BASIS UPON WHICH TO DIRECT SUBSTITUTION OF
MR. STUART'S ANNUAL LEAVE FOR SICK LEAVE AND HIS CLAIM FOR SUCH
SUBSTITUTION IS DISALLOWED.
B-195271, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE COURT HAS DENIED PRELIMINARY INJUNCTION AND ISSUES RAISED
IN PROTEST ARE STILL PENDING BEFORE COURT OF COMPETENT JURISDICTION, IN
CONNECTION WITH REQUEST FOR PERMANENT RELIEF, GAO WILL NOT CONSIDER
MATTER.
2. EVEN IF CASE IS DISMISSED BY COURT WITHOUT PREJUDICE GAO WILL NOT
CONSIDER PROTEST SINCE IT WAS FILED UNTIMELY.
SADDLEBACK MOUNTAIN RADIOLOGIC MEDICAL GROUP:
SADDLEBACK MOUNTAIN RADIOLOGIC MEDICAL GROUP PROTESTS THE AWARD OF A
CONTRACT BY THE DEPARTMENT OF THE AIR FORCE TO MARCH RADIOLOGY MEDICAL
CORPORATION UNDER INVITATION FOR BIDS NO. F0460579-B-0028. THE
PROCUREMENT IS FOR PROFESSIONAL RADIOLOGICAL SERVICES AT MARCH AIR FORCE
BASE, CALIFORNIA.
SADDLEBACK CONTENDS THAT ITS FIRM HAD CLEARLY DEMONSTRATED ITS
RESPONSIBILITY AND SHOULD HAVE BEEN AWARDED THE CONTRACT AS THE LOWEST
RESPONSIVE AND RESPONSIBLE BIDDER. SADDLEBACK ALSO FILED FOR JUDICIAL
RELIEF IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA. A HEARING REGARDING A REQUEST FOR A PRELIMINARY INJUNCTION
WAS HELD ON JULY 16, 1979. WE HAVE BEEN INFORMED BY SADDLEBACK THAT THE
REQUEST WAS DENIED. THE ISSUES RAISED BY SADDLEBACK'S PROTEST ARE STILL
BEFORE THE COURT, WHERE PERMANENT RELIEF IS BEING SOUGHT.
WE HAVE HELD THAT A RULING ON A PRELIMINARY INJUNCTION IS NOT OF
ITSELF A FINAL ADJUDICATION ON THE MERITS. OPTIMUM SYSTEMS, INC.,
B-187560, AUGUST 31, 1977, 77-2 CPD 165.
IT IS THE POLICY OF OUR OFFICE, HOWEVER, NOT TO DECIDE MATTERS WHERE
THE ISSUES INVOLVED ARE BEFORE A COURT OF COMPETENT JURISDICTION UNLESS
THE COURT EXPECTS, REQUESTS OR EXPRESSES AN INTEREST IN RECEIVING OUR
DECISION. THE GEORGE SOLLITT CONSTRUCTION COMPANY, B-190743, JANUARY 9,
1978, 78-1 CPD 17. IN THE PRESENT CASE, THE COURT HAS NOT EXPRESSED
SUCH AN INTEREST.
WE POINT OUT HOWEVER THAT IF A CASE PENDING IN COURT IS DISMISSED
WITHOUT PREJUDICE AND THE PROTEST HAS BEEN FILED IN A TIMELY MANNER WITH
OUR OFFICE, WE WILL CONSIDER THE MERITS OF THE PROTEST. OPTIMUM
SYSTEMS, INC., SUPRA. HOWEVER, IN THE PRESENT CASE, SADDLEBACK'S
PROTEST WAS FILED UNTIMELY SINCE IT WAS RECEIVED IN OUR OFFICE MORE THAN
10 DAYS AFTER THE AGENCY'S DENIAL OF THE PROTEST, 4 C.F.R. SEC. 20.2(A)
(1978).
THEREFORE, THE PROTEST IS DISMISSED.
B-195353, B-195354, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST TO GAO THAT IS TIME/DATE STAMPED AS RECEIVED MORE THAN 1
MONTH AFTER POSTAGE METER POSTMARK, AND THEREFORE MORE THAN 10 WORKING
DAYS AFTER BASIS FOR PROTEST WAS KNOWN, IS UNTIMELY AND NOT FOR
CONSIDERATION, SINCE IT WAS SENT BY REGULAR MAIL, AND THERE IS NO
EVIDENCE OF EARLIER RECEIPT AT GAO. FACT THAT CONTRACTING ACTIVITY
RECEIVED COPY FROM PROTESTER 2 DAYS AFTER MAILING IS NOT RELEVANT, SINCE
"FILING" OF PROTEST FOR TIMELINESS PURPOSES MEANS RECEIPT AT GAO.
NATIONAL DESIGNERS, INC.:
BY LETTERS OF MAY 30, 1979, NATIONAL DESIGNERS, INC. (NATIONAL),
PROTESTS THE AWARD BY THE DEPARTMENT OF THE NAVY OF CONTRACTS UNDER
SOLICITATIONS N00140-79-D-0740 AND NOO140-79-R-1757.
THE LETTERS WERE SENT TO THIS OFFICE BY ORDINARY FIRST CLASS MAIL
WITH A MAY 30, 1979, POSTAGE METER "POSTMARK," I.E., NO UNITED STATES
POSTAL SERVICE POSTMARK APPEARED ON THE ENVELOPES. IN ADDITION, THEY
WERE ADDRESSED SIMPLY TO THE "UNITED STATES GENERAL ACCOUNTING OFFICE,
WASHINGTON, D. C., 20548," WITH NO INDICATION THAT THEY CONTAINED ANY
DOCUMENTS RELATING TO A BID PROTEST. FINALLY, THE PROTESTS WERE
RECORDED BY THE GAO INDEX AND FILES SECTION TIME/DATE STAMP AS RECEIVED
ON JULY 6, 1979. OBVIOUSLY, NATIONAL WAS AWARE OF THE BASES FOR ITS
PROTESTS NO LATER THAN THE DATE OF ITS LETTERS, MAY 30.
OUR BID PROTEST PROCEDURES REQUIRE THAT PROTESTS OF THIS NATURE BE
FILED "NOT LATER THAN 10 (WORKING) DAYS AFTER THE BASIS FOR PROTEST IS
KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER," 4 C.F.R. SEC.
20.2(B)(2) (1979), AND DEFINE "FILED" AS "RECEIPT IN THE GENERAL
ACCOUNTING OFFICE" FOR PROTESTS DIRECTED TO THIS OFFICE FOR RESOLUTION.
4 C.F.R. SEC. 20.2 (B)(3) (1979). FURTHER, THE PROCEDURES REQUIRE THAT
THE PROTESTS "MUST BE IN WRITING AND ADDRESSED TO THE GENERAL COUNSEL
***." 4 C.F.R. SEC. 20.1(B) (1979); THE REASON FOR THIS SPECIFIC
ADDRESSING REQUIREMENT IS TO ASSURE PROTESTERS THAT MAIL RECEIVED BY THE
GAO MAILROOM WILL BE PROPERLY DISPATCHED TO THE OFFICE WITHIN GAO
RESPONSIBLE FOR HANDLING THESE MATTERS. NONETHELESS, WE WILL CONSIDER A
PROTEST AS HAVING BEEN TIMELY RECEIVED IF IT CAN BE SHOWN BY APPROPRIATE
DOCUMENTARY EVIDENCE TO HAVE BEEN PHYSICALLY PRESENT IN GAO ON TIME.
SEE LINGUISTIC SYSTEMS, INCORPORATED, 58 COMP. GEN. 403 (1979), 79-1 CPD
250. THUS, THE AFOREMENTIONED TIME/DATE STAMP IS CONSIDERED PRIMA FACIE
EVIDENCE OF THE TIME OF RECEIPT OF A BID PROTEST AT GAO, AND ABSENT
AFFIRMATIVE EVIDENCE TO THE CONTRARY TO SHOW ACTUAL EARLIER RECEIPT, THE
TIME/DATE STAMP CONTROLS. ID.
WE NOTE HERE THAT WE HAVE BEEN INFORMALLY ADVISED THAT COPIES OF THE
LETTERS WERE IN FACT RECEIVED BY THE CONTRACTING ACTIVITY ON JUNE 1.
HOWEVER, SINCE THEY WERE DIRECTED TO GAO, NOT THE NAVY, THE CONTRACTING
AGENCY'S RECEIPT IS NOT RELEVANT TO THE TIMELINESS ISSUE. 4 C.F.R. SEC.
20.2(B)(3) (1979); SEE FRED M. COX, INC., B-191265, MARCH 3, 1978, 78-1
CPD 169.
IN VIEW OF THE SUBSTANTIAL DISPARITIES BETWEEN THE POSTAGE METER
DATE, RECEIPT BY THE AGENCY, AND OUR RECEIPT, WE HAVE INVESTIGATED
WHETHER THERE WAS ANY EVIDENCE OF EARLIER RECEIPT IN OUR OFFICE, OR
WHETHER OUR OWN MAILROOM PROCEDURES MAY HAVE CONTRIBUTED TO THE DELAY.
OUR INVESTIGATION INDICATED THAT MAIL RECEIVED IN THE GAO MAILROOM
WITHOUT A SPECIFIC ADDRESS IS ACCUMULATED FOR NO MORE THAN 1 WEEK BEFORE
IT IS OPENED AND READ TO DETERMINE, IF POSSIBLE, THE APPROPRIATE
RECIPIENT; AS OF JUNE 28, 1979, NO BACKLOG OF UNOPENED MAIL EXISTED;
AND ON JULY 5, THE MAIL IN QUESTION WAS OPENED, AND WAS PROMPTLY
DISPATCHED (THIS IS CONSISTENT WITH THE JULY 6 TIME/DATE STAMP). THUS,
THERE IS NO EVIDENCE THAT THE PROTEST WAS PHYSICALLY PRESENT IN GAO
PRIOR TO JUNE 28. THE LATE RECEIPT THEREFORE WOULD APPEAR TO HAVE BEEN
CAUSED OUTSIDE GAO.
THE TIME LIMITATIONS PRESCRIBED IN OUR BID PROTEST PROCEDURES ARE NOT
WAIVABLE TECHNICALITIES. AS A CONSEQUENCE, WE HAVE STRICTLY ENFORCED
THEM, AND HAVE DISMISSED PROTESTS AS UNTIMELY WITHOUT ANY CONSIDERATION
OF THEIR MERITS WHEN THE FILING DEADLINES HAVE NOT BEEN MET. LINQUISTIC
SYSTEMS, INCORPORATED, SUPRA.
WITH REGARD TO THE ABOVE, BECAUSE WE RECOGNIZED THAT AN INDETERMINATE
AMOUNT OF TIME WILL NECESSARILY TRANSPIRE BETWEEN THE DISPATCH OF A
PROTEST AND ITS RECEIPT AT GAO, OUR PROCEDURES SPECIFICALLY CAUTION
FIRMS THAT "PROTESTS SHOULD BE TRANSMITTED OR DELIVERED IN THE MANNER
WHICH WILL ASSURE THE EARLIEST RECEIPT," AND PROVIDE FOR THE
CONSIDERATION OF PROTESTS WHICH ARE UNTIMELY FILED AS LONG AS THEY ARE
"SENT BY CERTIFIED MAIL NOT LATER THAN THE FIFTH DAY, OR BY MAILGRAM NOT
LATER THAN THE THIRD DAY, PRIOR TO THE FINAL DATE FOR FILING ***." 4
C.F.R. SEC. 20.2(B)(3) (1979). THUS, WHERE, AS HERE, A FIRM ELECTS TO
USE THE REGULAR MAIL TO TRANSMIT A PROTEST, IT MUST BE DEEMED TO ACCEPT
THE RISK OF DELAY IN DELIVERY.
ACCORDINGLY, THE PROTESTS MUST BE CONSIDERED TO HAVE BEEN FILED IN
OUR OFFICE FOR PURPOSES OF OUR PROCEDURES' FILING REQUIREMENTS ON JULY
6. SINCE THEY THEREFORE ARE UNTIMELY, THEY ARE NOT FOR CONSIDERATION ON
THE MERITS, AND ARE DISMISSED.
B-195453, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST AGAINST ALLEGED IMPROPRIETIES IN RFP FILED 10 MINUTES AFTER
CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS IS UNTIMELY AND NOT FOR
CONSIDERATION.
DUN'S MARKETING SERVICES:
DUN'S MARKETING SERVICES (DUN'S) PROTESTS AGAINST ALLEGED
IMPROPRIETIES IN REQUEST FOR PROPOSALS (RFP) NO. 79-7, ISSUED BY THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION.
DUN'S CONTENDS THAT THE SOLICITATION IS RESTRICTIVE IN NATURE AND NOT
IN THE BEST INTEREST OF THE GOVERNMENT. THE CLOSING DATE FOR RECEIPT OF
INITIAL PROPOSALS WAS SET FOR 4:00 P.M., JULY 16, 1979. DUN'S PROTEST
TO OUR OFFICE WAS HANDCARRIED AND RECEIVED AT 4:10 P.M., JULY 16.
SECTION 20.2(B)(1) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20
(1978), PROVIDES, IN PERTINENT PART, AS FOLLOWS:
"PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF
SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE
FOR RECEIPT OF INITIAL PROPOSALS SHALL BE FILED PRIOR TO BID OPENING OR
THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS. ***"
SINCE DUN'S PROTEST WAS FILED (RECEIVED) WITH OUR OFFICE 10 MINUTES
AFTER THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS, DUN'S PROTEST
IS UNTIMELY AND NOT FOR CONSIDERATION. SOMERVELL & ASSOCIATES, LTD.,
B-192426, AUGUST 18, 1978, 78-2 CPD 132, AFFIRMED SEPTEMBER 18, 1978,
78-2 CPD 208.
THE PROTEST IS DISMISSED.
B-195522, AUG 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST FILED WITH GAO MORE THAN 10 DAYS AFTER NOTIFICATION OF DENIAL
OF PROTEST TO AGENCY IS UNTIMELY AND NOT FOR CONSIDERATION.
ALLIED RESOURCES, INC.:
ALLIED RESOURCES, INC. (ARI) PROTESTS THE AWARD OF CONTRACT NO. F
34650-79-BM010 BY THE DEPARTMENT OF THE AIR FORCE (AIR FORCE) FOR
AUDIOVISUAL SERVICES AT TINKER AIR FORCE BASE, OKLAHOMA. WE MUST REJECT
THE PROTEST BECAUSE IT WAS NOT TIMELY FILED WITH THIS OFFICE.
ARI PROTESTS THAT BURKE ENTERPRISES (BURKE), THE LOW BIDDER FOR THE
CONTRACT, IS NONRESPONSIVE. A SIMILAR PROTEST WAS INITIALLY FILED WITH
THE AIR FORCE WHEN BURKE UNDERBID ARI FOR THE CONTRACT AT TINKER AIR
FORCE BASE BY 26 PERCENT. ARI ARGUED TO THE AIR FORCE THAT BURKE WAS
NEITHER A RESPONSIVE NOR A RESPONSIBLE BIDDER AND IN A LETTER DATED JUNE
26, 1979, THE AIR FORCE DENIED ARI'S PROTEST.
OUR BID PROTEST PROCEDURES PROVIDE THAT:
"IF A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING AGENCY,
ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED WITHIN 10
DAYS OF FORMAL NOTIFICATION OF OR ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF
INITIAL ADVERSE AGENCY ACTION WILL BE CONSIDERED ***." 4 C.F.R. 20.2(A)
(1979).
BECAUSE ARI'S PROTEST WAS FILED WITH (RECEIVED BY) OUR OFFICE NEARLY
ONE MONTH AFTER THE DATE OF THE AIR FORCE'S LETTER REJECTING ARI'S
PROTEST, WE MUST CONCLUDE THAT THE PROTEST TO THIS OFFICE WAS NOT FILED
WITHIN 10 DAYS AFTER ARI'S RECEIPT OF THE AGENCY'S DENIAL. THE PROTEST,
THEREFORE, IS UNTIMELY AND WILL NOT BE CONSIDERED. SEE WILTRON COMPANY,
B-194194, MARCH 12, 1979, 79-1 CPD 173.
THE PROTEST IS DISMISSED.
B-189462, AUG 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PRIOR DECISION IS AFFIRMED WHERE PROTESTER SUBMITS NO FACTS,
ARGUMENTS OR POINTS OF LAW NOT PREVIOUSLY CONSIDERED AND REQUEST FOR
RECONSIDERATION REVEALS NO ERROR OR FACT OF LAW IN PRIOR DECISION.
2. WHERE EVALUATORS DO NOT PERCEIVE PROPOSED BUT UNVERIFIED COST
SAVINGS AS DEFICIENCY, BUT SPECULATIVE NATURE OF PROPOSED COST SAVING IS
LATER POINTED OUT TO SELECTION OFFICIAL BY SOURCE SELECTION ADVISORY
COUNCIL, AGENCY MAY BUT IS NOT REQUIRED TO REOPEN NEGOTIATIONS TO ENABLE
OFFEROR TO ATTEMPT TO SUPPORT PROPOSED SAVINGS.
3. ALTHOUGH EVALUATION SCORING OF PROPOSALS MAY HAVE ENHANCED WEIGHT
OF ONE SUBCRITERION BEYOND THAT INDICATED IN SOLICITATION, SUCH
DEVIATION IS NOT SIGNIFICANT BECAUSE NON-SELECTION OF PROTESTER WAS DUE
MORE TO OVERALL RISK ASSOCIATED WITH ITS PROPOSAL THAN TO EVALUATION OF
THAT SUBCRITERION.
BURNS AND ROE TENNESSEE, INC. - RECONSIDERATION:
BURNS AND ROE TENNESSEE, INC. (BRT), REQUESTS RECONSIDERATION OF OUR
DECISION IN BURNS AND ROE TENNESSEE, INC., B-189462, JULY 12, 1978, 78-2
CPD 57, DENYING ITS PROTEST OF AN AWARD TO ARO, INC. (ARO), BY THE
ARNOLD ENGINEERING DEVELOPMENT CENTER (AEDC), ARNOLD AIR FORCE STATION,
TENNESSEE. WE HELD THAT THE AWARD OF A COST-TYPE CONTRACT TO ARO, THE
INCUMBENT CONTRACTOR, WAS RATIONALLY FOUNDED AND WAS CONSISTENT WITH THE
EVALUATION FACTORS OF THE SOLICITATION. ALTHOUGH WE HAVE REASON TO
QUESTION THE EVALUATION PROCESS AT THE INITIAL STAGES WE ARE UNABLE TO
CONCLUDE THAT ANY DISCREPANCY IN THE EVALUATION MATERIALLY AFFECTED THE
SELECTION. WE THEREFORE SUSTAIN OUR DECISION ON RECONSIDERATION.
PROTESTER'S OBJECTIONS
BRT CHALLENGES THE EVALUATION OF CONTRACTOR CHANGE-OVER COSTS TO THE
AIR FORCE FOR PERSONNEL BENEFITS OWED INCUMBENT'S EMPLOYEES. THE
PROTESTER POINTS OUT THAT THE AEDC CONTRACT IS THE LARGEST SOURCE OF
EMPLOYMENT IN THE AREA AND STATES ITS BELIEF THAT ARO AND ITS PARENT
COMPANY HAVE ONLY LIMITED ABILITY TO ABSORB PERSONNEL FROM THE AEDC
OPERATION. IT ARGUES THAT ONLY A SMALL PERCENTAGE OF THE INCUMBENT'S
EMPLOYEES WOULD NOT BE RETAINED BY A NEW AEDC CONTRACTOR AND THE ACTUAL
LIABILITY TO THE AIR FORCE WOULD BE LESS THAN ESTIMATED. IN ADDITION,
BRT BELIEVES THAT POSSIBLE UNION NEGOTIATION PROBLEMS SHOULD NOT HAVE
BEEN IDENTIFIED AS A PROBLEM BY THE SOURCE SELECTION EVALUATION BOARD
(SSEB) BECAUSE OF THE FIRM'S ALLEGED EXTENSIVE EXPERIENCE IN UNION
NEGOTIATIONS. BRT ALSO DISAGREES WITH THE AIR FORCE'S VIEW THAT BRT'S
MANAGEMENT TEAM WAS UNTRIED. IT STATES THAT THESE INDIVIDUALS HAVE
KNOWN EACH OTHER FOR 20 YEARS AND "HAVE WORKED TOGETHER, EACH IN HIS OWN
DISCIPLINE, ON MANY PROJECTS WITHIN NASA" AND THAT THE PRESIDENT OF BRT,
A RETIRED AIR FORCE GENERAL, PREVIOUSLY WORKED WITH ONE OF THE KEY
PERSONS PROPOSED.
FINALLY, BRT DISAGREES WITH THE AIR FORCE'S CONCERN ABOUT BRT'S
FAILURE TO SHOW PRECISELY HOW IT WOULD ACHIEVE COST SAVINGS IF AWARDED
THE CONTRACT. THE PROTESTER POINTS OUT THAT THE AIR FORCE RECOGNIZED
BRT'S "EXCELLENT FINANCIAL MANAGEMENT SYSTEM," AND THAT IN CONTRAST THE
EVALUATORS NOTED A "SHORTAGE OF SIGNIFICANT INNOVATIVE APPROACHES IN THE
ARO PROPOSAL." BRT BELIEVES THE AIR FORCE OR THIS OFFICE SHOULD HAVE
INQUIRED ABOUT PROPOSED COST SAVINGS PRIOR TO REACHING ANY CONCLUSIONS.
FOR THE MOST PART BRT HAS PRESENTED NO FACTS OR ARGUMENTS WHICH WERE
NOT PREVIOUSLY CONSIDERED. IT HAS NOT SPECIFIED ANY ERRORS OF LAW IN
OUR INITIAL DECISION. BRT DISAGREES WITH THE SOURCE SELECTION DECISION
THAT WAS MADE AND WITH THE CONCLUSIONS REACHED IN OUR DECISION. AS FOR
BRT'S CONTENTION THAT THIS OFFICE SHOULD HAVE INQUIRED ABOUT PROPOSED
COST SAVINGS, IT SHOULD BE NOTED THAT IT IS NOT OUR FUNCTION TO EVALUATE
PROPOSALS. WE REVIEW PROCUREMENTS TO DETERMINE WHETHER AN AWARD OR
PROPOSED AWARD OF A CONTRACT COMPLIES WITH STATUTORY, REGULATORY OR
OTHER LEGAL REQUIREMENTS. THUS, OUR CONCERN WAS WITH THE VALIDITY OF
WHAT THE AIR FORCE HAD DONE, AND NOT WITH WHETHER BRT COULD HAVE BETTER
JUSTIFIED ITS PROPOSED COST SAVINGS.
IT IS CLEAR THAT THE SSEB DID NOT PERCEIVE BRT'S PROPOSED BUT
UNVERIFIED COST SAVINGS AS A DEFICIENCY IN ITS PROPOSAL NEGOTIATIONS.
THE RECORD ONLY SHOWS THAT IT WAS LATER IN THE SELECTION PROCESS - AFTER
PROPOSALS HAD BEEN EVALUATED, WEAKNESSES POINTED OUT, AND BEST AND FINAL
OFFERS RECEIVED - THAT THE SOURCE SELECTION ADVISORY COUNCIL (SSAC)
BECAME UNCONVINCED OF THE PROPOSED COST SAVINGS AND POINTED THIS OUT TO
THE SOURCE SELECTION AUTHORITY (SSA). WHILE NEGOTIATIONS COULD HAVE
BEEN REOPENED TO EXPLORE THIS MATTER FURTHER WITH BRT, THERE WAS NO
REQUIREMENT TO DO SO UNDER THE FACTS OF THIS CASE. SEE GENERALLY
ELECTRONIC COMMUNICATIONS, INC., 55 COMP. GEN. 636 (1976), 76-1 CPD 15;
52 COMP. GEN. 198, 206 (1972).
NEVERTHELESS, WE CONSIDER THE ISSUES RAISED IN THE INITIAL PROTEST AS
SIGNIFICANT, PARTICULARLY IN VIEW OF THE LONG TERM INCUMBENCY OF ARO.
THIS, TOGETHER WITH OUR DESIRE TO ASSURE OURSELVES OF THE VALIDITY OF
THE PROCUREMENT PROCESS UTILIZED, LED US TO PERFORM AN ON-SITE AUDIT
REVIEW OF THE EVALUATION PROCESS. THIS REVIEW RAISED SOME QUESTIONS
CONCERNING THE EVALUATION BY THE SSEB. ALTHOUGH, AS DISCUSSED BELOW,
THE EVALUATION WAS INCONSISTENT WITH THE RFP IN ONE RESPECT WE FIND NO
BASIS TO CONCLUDE THAT THE SELECTION DECISION WAS AFFECTED BY THIS
DEVIATION OR THAT THE SELECTION PROCESS WAS OTHERWISE TAINTED.
OUR AUDITORS DISCOVERED THAT THE AEDC PROCUREMENT FILES CONTAINED TWO
SETS OF SSEB SCORE SHEETS FOR BRT, THE FIRST SET BASED ON BRT'S PROPOSAL
TO EMPLOY THE INCUMBENT'S WORK FORCE AND THE SECOND SET BASED ON THE
DETAILED MANNING AND "SKILL MIX BREAKOUTS" FURNISHED BY BRT IN
COMPLIANCE WITH AN AIR FORCE REQUEST. BRT WAS SCORED HIGHER ON THE
FIRST EVALUATION; ARO OUTSCORED BRT ON THE SECOND EVALUATION.
THIS DUAL SCORING RESULTING FROM THE ABSENCE FROM BRT'S INITIAL
PROPOSAL OF SUFFICIENT MANNING DATA FOR SSEB EVALUATION. APPARENTLY TO
FACILITATE THE INITIAL SCORING, THE SSEB CHAIRMAN DIRECTED THE
EVALUATORS TO SCORE THE BRT PROPOSAL IN THE "MANNING" AND
"QUALIFICATIONS OF PERSONNEL" CATEGORIES ON THE BASIS OF ARO'S FISCAL
YEAR 1977 MANNING ALLOCATIONS AND THEN, AFTER BRT RESPONDED TO AN AIR
FORCE REQUEST TO CLARIFY ITS INTENDED MANNING ALLOCATIONS, TO RESCORE
THE BRT PROPOSAL IF THE ORIGINAL SCORES WERE DETERMINED NOT TO BE VALID.
BRT'S DETAILED MANNING BREAKDOWN WAS OF CONCERN TO THE SSEB EVALUATORS;
CONSEQUENTLY, THEY DID RESCORE THE BRT PROPOSAL. ALTHOUGH THE ORIGINAL
SSEB INSTRUCTIONS WERE TO RESCORE ONLY THE "MANNING" AND
"QUALIFICATIONS" CATEGORIES, THE "UNDERSTANDING OF THE JOB" AND
"SOUNDNESS OF APPROACH" CATEGORIES WERE ALSO REGRADED. SINCE PROPOSED
MANNING COULD IMPACT IN THESE OTHER AREAS, THE SSEB'S REEVALUATION OF
THOSE AREAS WAS APPROPRIATE AS IT IS NOT IMPROPER TO PENALIZE AN OFFEROR
IN EACH EVALUATION CATEGORY AFFECTED BY A PARTICULAR PROPOSAL
DEFICIENCY. IROQUOIS RESEARCH INSTITUTE, 55 COMP. GEN. 787, 792-3
(1976), 76-1 CPD 123; SEE ALSO ELECTRONIC COMMUNICATIONS, INC., SUPRA;
GTE/IS FACILITIES MANAGEMENT CORPORATION, B-186391, SEPTEMBER 7, 1977,
77-2 CPD 176.
THUS, WHILE OUR AUDITORS NOTED THAT THE MERE EXISTENCE OF TWO SETS OF
EVALUATION SCORES COULD ALLOW AN AGENCY TO INFLUENCE THE SELECTION
PROCESS BY SELECTING THE PARTICULAR SET TO BE USED, WE FIND THERE IS A
PLAUSIBLE BASIS BOTH FOR THE EXISTENCE OF THE TWO DISPARATE SETS AND FOR
THE AIR FORCE'S USE OF THE SECOND SET SINCE IT WAS THE SECOND ROUND OF
SCORING THAT WAS MORE RELEVANT TO THE DETAILS OF WHAT BRT PROPOSED. IN
ANY EVENT, IT APPEARS UNLIKELY THAT THE SELECTION DECISION WAS
SIGNIFICANTLY AFFECTED BY THE USE OF ONE SET OF SCORES RATHER THAN THE
OTHER SINCE THE RECORD SHOWS THAT THE SSEB'S SCORING WAS NOT A CENTRAL
CONCERN OF EITHER THE SSAC OR THE SSA.
OUR AUDIT FINDINGS ALSO INDICATE THAT SOME SCORES ON THE DRAFT
EVALUATION SCORE SHEETS HAD BEEN CHANGED. WHEN ASKED, SOME EVALUATORS
COULD NOT REMEMBER WHETHER THEY HAD MADE THE CHANGES, SOME STATED THEY
HAD APPROVED THE CHANGES BUT OTHERS STATED THEY HAD NOT CHANGED THE
DRAFT SCORE SHEETS. NEVERTHELESS, THE FINAL, OFFICIAL SCORE SHEETS WERE
SIGNED BY THE ORIGINAL EVALUATORS AND WE THEREFORE MUST ASSUME THAT THE
SCORES STATED THEREON ACCURATELY REPRESENTED THEIR FINAL OPINIONS.
THE DISCREPANCY BETWEEN THE RFP AND THE EVALUATION SCORING CONCERNS
THE WEIGHT GIVEN TO MANNING. FOR SEVERAL EVALUATION AREAS - TECHNICAL,
MANAGEMENT AND SUPPORT - THE RFP LISTED MANNING AS THE LEAST IMPORTANT
OF THE EVALUATION SUBCRITERIA. HOWEVER, THIS ORDER OF IMPORTANCE WAS
NOT FOLLOWED IN THE NUMERICAL SCORING OF THE SUPPORT AREA. FOR MANY OF
THE SUPPORT TASKS EVALUATED, THE MAXIMUM ATTAINABLE SCORES FOR MANNING
WERE AS HIGH OR HIGHER THAN FOR AT LEAST ONE OTHER SUBCRITERION WHICH
THE RFP LISTED AS BEING MORE IMPORTANT. THIS RESULTED FROM EITHER THE
ASSIGNMENT OF THE SAME WEIGHT TO MANNING AS WAS ASSIGNED TO OTHER
SUBCRITERIA OR THE USE OF A FIV-POINT RAW SCORE CEILING FOR THE MORE
IMPORTANT SUBCRITERION (THE FIRST THREE EVALUATION FACTORS -
UNDERSTANDING THE JOB, SOUNDNESS OF APPROACH AND QUALIFICATIONS OF
PERSONNEL - COULD BE SCORED AS ONLY UNACCEPTABLE OR ACCEPTABLE (WITH
SCORES OF EITHER ZERO OR FIVE POINTS) IN 87 OF THE 120 TASKS WHICH WERE
SCORED), WHILE MANNING COULD RECEIVE A RAW SCORE OF UP TO TEN. (MANNING
COULD BE SCORED AS UNACCEPTABLE TO EXCEPTIONAL (ZERO TO TEN POINTS) IN
36 OF THE 40 TASKS.) IN ADDITION, THE SSEB TRANSLATED ITS SCORES INTO
NARRATIVE FORM WHICH RESULTED IN THOSE TASKS WHICH WERE SCORED ZERO OR
FIVE BEING DESCRIBED AS "UNACCEPTABLE" OR "ACCEPTABLE," RESPECTIVELY.
THUS, AN OFFEROR'S PROPOSAL WHICH OFFERED MORE THAN WHAT WAS NEEDED WITH
REGARD TO SUCH TASKS COULD BE DESCRIBED AS NO BETTER THAN "MEETS
STANDARDS" WHILE AN EXCEPTIONAL SCORE ON THE ONE TO TEN SCALE USED FOR
EVALUATING MANNING COULD HAVE BEEN DESCRIBED AS "EXCEPTIONAL."
UPON RECEIPT OF THE SSEB'S REPORT AND SCORES, THE SSAC CONDUCTED ITS
OWN EVALUATIONS, REVISED THE SSEB'S SCORES TO REFLECT ITS OWN
INDEPENDENT EVALUATION AND APPLIED RELATIVE WEIGHTS AS BETWEEN THE ITEMS
BEING EVALUATED. IT THEN COLOR CODED THE SCORES USING DIFFERENT COLORS
FOR "EXCEEDS STANDARDS/EXCEPTIONAL," "MEETS STANDARDS," "BELOW
STANDARDS" AND "UNACCEPTABLE." ALTHOUGH THE SSA RECEIVED THE SSAC'S
COLOR CODED SCORES, THE SSAC'S SEPARATE NARRATIVE ANALYSIS, THE SSEB'S
SUMMARY REPORT TO THE SSAC AND THE PROPOSALS, HE WAS NOT FURNISHED THE
SSEB'S NUMERICAL SCORES. IT IS UNCLEAR WHETHER THE SSA KNEW THAT A
NARRATIVE EVALUATION AND COLOR CODING OF A TASK "MEETS STANDARDS" COULD
REPRESENT THE MAXIMUM SCORE OBTAINABLE FOR A GIVEN TASK.
THIS EVALUATION METHOD SUGGESTS THAT MANNING MAY HAVE RECEIVED
GREATER EMPHASIS IN THE SUPPORT AREA THAN REASONABLY COULD HAVE BEEN
ANTICIPATED FROM THE RFP'S RANKING OF MANNING AS THE LEAST IMPORTANT
SUBCRITERION. THIS DISCREPANCY, HOWEVER, BECOMES LESS SIGNIFICANT WHEN
PLACED IN PERSPECTIVE. THE SUPPORT AREA ITSELF WAS LISTED IN THE
SOLICITATION AS THIRD IN ORDER OF IMPORTANCE OF THE FIVE MAJOR CRITERIA
FOR EVALUATION. THE SSEB'S EVALUATIONS ON THE MORE IMPORTANT TECHNICAL
AND MANAGEMENT AREAS REFLECT NO UNDUE WEIGHT GIVEN TO MANNING WITHIN
THOSE AREAS. MOREOVER, WHILE THE SSEB REPORTED HIGHER SCORES FOR BRT
THAN FOR ARO IN THE TECHNICAL AND MANAGEMENT AREAS, THE SSAC DID NOT
AGREE THAT THE BRT PROPOSAL WAS SUPERIOR IN THOSE AREAS. ALTHOUGH OUR
AUDITORS SUGGEST THAT THE LOW SCORES ASSIGNED TO BRT IN THE SUPPORT AREA
COULD HAVE INFLUENCED THE SSAC TO DOWNGRADE THE BRT PROPOSAL IN THE
TECHNICAL AREA, SSAC'S PROPOSAL ANALYSIS REPORT REFLECTS MORE OF A
CONCERN WITH THE OVERALL RISK ASSOCIATED WITH THE BRT PROPOSAL THAN WITH
PARTICULAR ELEMENTS OF MANNING. AS DISCUSSED IN OUR INITIAL DECISION,
THE SSAC'S PRIMARY CONCERNS WERE THAT BRT'S PROPOSED MANAGEMENT
PERSONNEL HAD NOT PREVIOUSLY FUNCTIONED TOGETHER AS A TEAM AND THAT
BRT'S PROMISED COST SAVINGS LACKED SPECIFIC BACKUP. ACCORDINGLY, WE
FIND NO LEGAL JUSTIFICATION FOR TAKING EXCEPTION TO THE AWARD ON THE
BASIS OF THIS EVALUATION DEFICIENCY.
WE RECOGNIZE THAT BRT DOES NOT AGREE WITH THE SSAC'S (AND ULTIMATELY
THE SSA'S) RISK ASSESSMENT, AND WE HAVE CONSIDERED WHETHER CERTAIN RISKS
ASSOCIATED WITH AWARDING BRT THE CONTRACT WERE IMPROPERLY OVEREMPHASIZED
IN THE SOURCE SELECTION PROCESS. OUR AUDIT FINDINGS INDICATE THAT SOME
FACTORS ASSOCIATED WITH MANNING, IN ADDITION TO BEING SPECIFICALLY
EVALUATED AND SCORED, WERE STATED SEPARATELY AS RISKS. FOR EXAMPLE,
INAPPROPRIATE MANNING LEVELS AND SKILL MIXES WERE CONSIDERED INDICATIONS
OF A LACK OF UNDERSTANDING THE WORK OR THE LACK OF A SOUND APPROACH TO
THE JOB. AS INDICATED ABOVE, IT IS NEITHER UNUSUAL NOR IMPROPER FOR A
DEFICIENCY OR WEAKNESS IN ONE EVALUATION AREA TO BE REFLECTED IN OTHER,
RELATED EVALUATION AREAS AS WELL. MOREOVER, WHILE OTHER AGENCIES MIGHT
NOT HAVE VIEWED THE RISKS AS THE AIR FORCE DID, WE AGAIN POINT OUT THAT
SELECTION OFFICIALS MUST BE PERMITTED TO EXERCISE DISCRETION IN THESE
MATTERS. IN REVIEWING BID PROTESTS IT IS THE FUNCTION OF THIS OFFICE TO
DETERMINE WHETHER THE SELECTION WAS ARBITRARY WITHOUT IMPOSING OUR OWN
DISCRETIONARY JUDGMENT UPON THE PROCURING AGENCIES. OUR INTENSIVE
REVIEW DOES NOT INDICATE THAT THE SELECTION WAS ARBITRARY; RATHER, WE
FIND THAT IT WAS REASONABLE AND ESSENTIALLY CONSISTENT WITH THE
SOLICITATION.
OUR CONCLUSION IN THIS CASE SHOULD NOT BE TAKEN AS AN INDICATION THAT
AN INCUMBENT CONTRACTOR IS GENERALLY ASSURED OF CONTINUED AWARDS. AS A
PRACTICAL MATTER, OF COURSE, AN INCUMBENT CONTRACTOR WITH A GOOD
PERFORMANCE RECORD GENERALLY MAY HAVE A SIGNIFICANT COMPETITIVE
ADVANTAGE OVER OTHERS AND THE PROCURING AGENCY IS NOT REQUIRED TO
EQUALIZE COMPETITION IN A PARTICULAR PROCUREMENT BY CONSIDERING THE
COMPETITIVE ADVANTAGES ACCRUING TO THE INCUMBENT. SEE, E.G., HOUSTON
FILMS, INC., B-184402, DECEMBER 22, 1975, 75-2 CPD 404. CONSEQUENTLY, A
NON-INCUMBENT SHOULD NOT EXPECT TO "UNSEAT" AN INCUMBENT CONTRACTOR
MERELY ON THE STRENGTH OF ITS UNSUPPORTED PROMISES; RATHER, PROMISES OF
COST SAVINGS AND IMPROVED MANAGEMENT TECHNIQUES SHOULD BE SUPPORTED WITH
SPECIFIC INFORMATION AND EXAMPLES OF WHERE SUCH SAVINGS OR TECHNIQUES
HAVE BEEN REALIZED OR APPLIED SUCCESSFULLY ON OTHER PROJECTS. WHILE
PROVIDING SUCH INFORMATION IS NO GUARANTEE THAT A NON-INCUMBENT'S
PROMISED PERFORMANCE WILL COMPARE FAVORABLY WITH THAT OF AN INCUMBENT'S,
IT DOES OFFER THE SOURCE SELECTION OFFICIAL A BASIS UPON WHICH THE
NON-INCUMBENT COULD BE CHOSEN FOR AWARD. BRT'S PROPOSAL WAS FOUND
LACKING IN THIS REGARD.
NONETHELESS, WE THINK THE AIR FORCE WOULD HAVE DONE WELL TO APPROACH
THIS PROCUREMENT SOMEWHAT DIFFERENTLY. UNLIKE THE TYPICAL PROCUREMENT,
THIS ONE INVOLVED A COMPETITION FOR A CONTRACT WHICH HAD BEEN HELD (AND
AWARDED SOLE-SOURCE) BY ONE FIRM FOR MORE THAN 25 YEARS. IT ALSO
INVOLVED A LARGE CONTRACT - AN AVERAGE OF $100 MILLION ANNUALLY FOR
THREE YEARS PLUS TWO ONE-YEAR OPTION PERIODS. THE SCOPE OF THE CONTRACT
WAS SUCH THAT AN OFFEROR WOULD REASONABLY BE EXPECTED TO HAVE TO EXPEND
CONSIDERABLE TIME, EFFORT, AND MONEY JUST TO PREPARE A MEANINGFUL
PROPOSAL. THESE SOMEWHAT UNUSUAL CIRCUMSTANCES COULD HAVE REASONABLY
SUGGESTED TO POTENTIAL OFFERORS THAT THE AIR FORCE WAS SEEKING AND
BELIEVED IT COULD OBTAIN VIABLE ALTERNATIVES TO THE INCUMBENT, AND THAT
THE TRADITIONAL NATURAL ADVANTAGES OF INCUMBENCY WOULD NOT BE A SERIOUS
IMPEDIMENT TO OFFERORS WILLING TO COMPETE AGAINST THE INCUMBENT.
THIS WAS NOT THE CASE, HOWEVER, AS THE AIR FORCE EVALUATION AND
SELECTION PROCESS DID INDEED REWARD ARO'S INCUMBENCY. IN THE EVALUATION
PHASE, THE RFP AND SSEB INSISTED ON DETAILED MANNING PORTRAYALS EVEN
THOUGH THE INCUMBENT WAS CLEARLY IN THE BEST POSITION TO FURNISH THAT
INFORMATION. IN THE SELECTION PHASE, THE SSA WAS CONCERNED WITH THE
RISKS INVOLVED IN CHANGING CONTRACTS AND IN RELYING ON THE UNSUPPORTED
PROMISE OF THE ONE CHALLENGER TO THE INCUMBENT TO ACHIEVE COST SAVINGS.
WHILE, AS WE HAVE PREVIOUSLY STATED, THESE CONCERNS WERE WITHIN THE
SSA'S DISCRETIONARY AUTHORITY, THEY DID MAKE IT THAT MUCH MORE DIFFICULT
- IF NOT IMPOSSIBLE - FOR BRT TO EMERGE AS THE WINNER. UNDER THESE
PARTICULAR CIRCUMSTANCES, WE BELIEVE THE PROCUREMENT PROCESS WOULD HAVE
BEEN BETTER SERVED HAD THE RFP GIVEN POTENTIAL OFFERORS SOME INDICATION
OF WHAT IT WOULD TAKE TO UNSEAT THE INCUMBENT, E.G., HOW MUCH BETTER
THAN THE INCUMBENT'S PROPOSAL A COMPETITOR'S WOULD HAVE TO BE BEFORE THE
AIR FORCE WOULD BE WILLING TO RISK CHANGING CONTRACTORS. ALTERNATIVELY,
WE THINK THE AIR FORCE COULD HAVE STRUCTURED ITS EVALUATION SCHEME
SOMEWHAT DIFFERENTLY SO THAT PROPOSED MANNING WOULD NOT HAVE BEEN
EVALUATED IN A WAY THAT COULD ONLY AID THE INCUMBENT.
THE FACT REMAINS, HOWEVER, THAT THE RECORD DOES NOT ESTABLISH THAT
THE SELECTION OF ARO WAS IMPROPER, THAT THERE WERE ANY SERIOUS
DEFICIENCIES IN THE SELECTION PROCESS, OR THAT OUR PRIOR DECISION
DENYING THE PROTEST WAS ERRONEOUS. THAT DECISION IS AFFIRMED.
B-193412, AUG 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
TRANSFERRED EMPLOYEE SUBMITTED TWO CLAIMS ON SAME DATE FOR
SUBSISTENCE WHILE OCCUPYING TEMPORARY QUARTERS, ONE FOR HIMSELF WHILE
OCCUPYING TEMPORARY QUARTERS AT NEW STATION FROM MARCH 1 TO MAY 3, 1977,
AND ONE FOR WIFE AND TWO CHILDREN AT OLD STATION FROM MAY 2 TO MAY 30,
1977. HE IS ENTITLED TO SUBSISTENCE FROM MAY 1 TO MAY 30, 1977.
EMPLOYEE MAY CLAIM FOR PERIOD WHEN HE OCCUPIES TEMPORARY QUARTERS BY
HIMSELF OR WHEN HIS FAMILY VACATES OLD RESIDENCE. ALSO, HE MAY CLAIM
SUBSISTENCE FOR FAMILY FOR PERIOD WHEN HE IS AWAY FROM HIS STATION ON
TEMPORARY DUTY, RECEIVES PER DIEM, AND IS NOT ENTITLED TO SUBSISTENCE.
RONALD H. BROWN - COMPUTATION OF SUBSISTENCE EXPENSES WHILE OCCUPYING
TEMPORARY QUARTERS:
MR. RONALD H. BROWN, SPECIAL AGENT, UNITED STATES SECRET SERVICE, HAS
APPEALED THE DISALLOWANCE BY OUR CLAIMS DIVISION OF HIS CLAIM FOR
SUBSISTENCE OF HIS FAMILY WHILE THEY OCCUPIED TEMPORARY QUARTERS FROM
MAY 1 TO MAY 30, 1977, INCIDENT TO HIS TRANSFER OF STATION. THE APPEAL
INVOLVES TWO QUESTIONS: (1) WHETHER AN EMPLOYEE IS REQUIRED TO CLAIM
SUBSISTENCE EXPENSES WHILE OCCUPYING TEMPORARY QUARTERS ONLY FOR THE
30-DAY PERIOD THAT BEGINS WHEN HE OCCUPIES TEMPORARY QUARTERS AT HIS NEW
STATION EVEN IF HIS FAMILY REMAINS AT THE RESIDENCE AT HIS OLD STATION;
AND (2) WHETHER AN EMPLOYEE MAY RECEIVE SUBSISTENCE EXPENSES FOR HIS
FAMILY WHILE HE IS AWAY FROM HIS STATION ON A TEMPORARY DUTY ASSIGNMENT
AND IS PAID PER DIEM. FOR THE REASONS STATED BELOW, WE ANSWER THE FIRST
QUESTION IN THE NEGATIVE AND THE SECOND QUESTION IN THE AFFIRMATIVE.
THE ANSWERS TO THE TWO QUESTIONS INCREASE MR. BROWN'S ENTITLEMENT TO
REIMBURSEMENT, AND OUR CLAIMS DIVISION WILL ISSUE A SETTLEMENT FOR THE
AMOUNT DUE IF THE CLAIM IS OTHERWISE PROPER.
MR. BROWN WAS TRANSFERRED FROM ATLANTA, GEORGIA, TO WASHINGTON, D.C.,
AND WAS AUTHORIZED 30 DAYS SUBSISTENCE WHILE OCCUPYING TEMPORARY
QUARTERS. HE OCCUPIED TEMPORARY QUARTERS AT HIS NEW STATION FROM MARCH
1 TO MAY 3, 1977, EXCEPT FOR PERIODS OF TEMPORARY DUTY AWAY FROM HIS
STATION. HE ALSO WAS AWAY FROM WASHINGTON ON TEMPORARY DUTY FROM MAY 4
TO JUNE 15, 1977. HIS FAMILY REMAINED IN ATLANTA SINCE HE WAS UNABLE TO
SELL HIS HOUSE AT THE TIME OF HIS TRANSFER. AFTER THE HOUSE WAS SOLD,
THE FAMILY OCCUPIED TEMPORARY QUARTERS IN ATLANTA FROM MAY 1, 1977,
UNTIL THE MIDDLE OF JUNE 1977 WHEN MR. BROWN'S RESIDENCE AT HIS NEW
STATION BECAME AVAILABLE FOR OCCUPANCY.
MR. BROWN SUBMITTED A VOUCHER CLAIMING SUBSISTENCE WHILE HE OCCUPIED
TEMPORARY QUARTERS FROM MARCH 1 TO MAY 3, 1977, AT HIS NEW STATION. HE
ALSO SUBMITTED A VOUCHER CLAIMING SUBSISTENCE WHILE HIS FAMILY OCCUPIED
TEMPORARY QUARTERS IN ATLANTA BETWEEN MAY 1 AND MAY 30, 1977. THE
SECRET SERVICE HELD THAT MR. BROWN'S ENTITLEMENT BEGAN ON MARCH 1, 1977,
WHEN HE FIRST OCCUPIED TEMPORARY QUARTERS, AND ENDED ON MAY 5, 1977, THE
EXPIRATION OF THE OCCUPANCY OF TEMPORARY QUARTERS FOR 30 DAYS BY MR.
BROWN OR HIS FAMILY, EXCLUSIVE OF PERIODS WHEN MR. BROWN WAS AWAY FROM
WASHINGTON ON TEMPORARY DUTY ASSIGNMENTS AND WAS PAID PER DIEM IN LIEU
OF SUBSISTENCE. THE PAYMENT FOR THE FAMILY FROM MAY 1 TO MAY 5, 1977,
WAS AT THE RATE FOR THE LAST 10 DAYS OF THE TEMPORARY QUARTERS PERIOD.
MR. BROWN'S CLAIM FOR ADDITIONAL TEMPORARY QUARTERS SUBSISTENCE EXPENSES
(TQSE) FROM MAY 6 TO MAY 30, 1977, WAS THEN SENT TO OUR OFFICE.
OUR CLAIMS DIVISION DISALLOWED THE CLAIM BECAUSE FEDERAL TRAVEL
REGULATIONS (FPMR 101-7) PARAGRAPH 2-5.2F (1973) PROVIDES THAT THE
PERIOD OF ELIGIBILITY FOR TQSE SHALL RUN CONSECUTIVELY AND CONCURRENTLY
FOR BOTH THE EMPLOYEE AND MEMBERS OF HIS IMMEDIATE FAMILY AND ON THE
RECORD BEFORE IT THE PERIOD OF ELIGIBILITY EXPIRED ON MAY 5, 1977. MR.
BROWN HAS APPEALED THE DISALLOWANCE ON THE GROUND THAT, HAD HE NOT BEEN
ON TEMPORARY ASSIGNMENT FOR THE GOVERNMENT, HE COULD HAVE CLAIMED
SEPARATE QUARTERS FOR THE MAY PERIOD SINCE HE AND HIS FAMILY DID NOT
MOVE INTO THEIR NEW HOUSE UNTIL THE MIDDLE OF JUNE 1977.
WE HAVE RECEIVED NEW EVIDENCE CONCERNING THIS CLAIM. THE SECRET
SERVICE HAS FORWARDED US A COPY OF THE VOUCHER ON WHICH MR. BROWN
CLAIMED TQSE FOR 28 DAYS FROM MARCH 1 TO MAY 3, 1977, WHEN HE OCCUPIED
TEMPORARY QUARTERS AT HIS NEW STATION. AN OFFICIAL OF THE SERVICE HAS
ALSO ADVISED US INFORMALLY THAT MR. BROWN WAS PROBABLY INFORMED THAT HE
COULD NOT CLAIM TQSE FOR HIS FAMILY WHEN HE WAS ON TEMPORARY DUTY AND
PAID PER DIEM.
PARAGRAPH 2-5.2E OF THE FTR PROVIDES THAT IN ORDER TO BE ELIGIBLE FOR
THE TEMPORARY QUARTERS ALLOWANCE, THE PERIOD OF USE OF SUCH QUARTERS FOR
WHICH A CLAIM FOR REIMBURSEMENT IS MADE MUST BEGIN NOT LATER THAN 30
DAYS FROM THE DATE THE EMPLOYEE REPORTED FOR DUTY AT HIS NEW OFFICIAL
STATION, OR IF NOT BEGUN DURING THIS PERIOD, NOT LATER THAN 30 DAYS FROM
THE DATE THE FAMILY VACATES THE RESIDENCE AT THE OLD OFFICIAL STATION.
WE HAVE CONSTRUED PRIOR SIMILAR REGULATIONS AS GIVING THE EMPLOYEE THE
DISCRETION TO CLAIM THE ALLOWABLE 30-DAY PERIOD OF HIS CHOICE.
B-177842, MARCH 27, 1973. THEREFORE, MR. BROWN HAD THE OPTION OF
CLAIMING TQSE WITHIN 30 DAYS OF HIS ARRIVAL AT HIS NEW STATION OR WITHIN
30 DAYS AFTER HIS FAMILY VACATED THE OLD RESIDENCE. HOWEVER, HE IS
STRICTLY LIMITED TO ONE 30-DAY PERIOD. SEE FTR PARA. 2-5.2F WHICH WAS
CITED BY OUR CLAIMS DIVISION.
CONCERNING THE QUESTION WHETHER AN EMPLOYEE MAY CLAIM TQSE FOR HIS
FAMILY WHEN HE IS AWAY FROM HIS STATION ON TEMPORARY DUTY AND PAID PER
DIEM, WE HAVE HELD UNDER SIMILAR PRIOR TRAVEL REGULATIONS THAT HE MAY DO
SO. B-170336, OCTOBER 29, 1970; AND B-171715, FEBRUARY 24, 1971. THE
EMPLOYEE, OF COURSE, CANNOT RECEIVE SUBSISTENCE EXPENSES FOR HIMSELF FOR
THE SAME DAYS ON WHICH HE RECEIVES A PER DIEM PAYMENT INCIDENT TO
OFFICIAL TRAVEL. THUS, MR. BROWN'S RECEIPT OF A PER DIEM ALLOWANCE
INCIDENT TO TEMPORARY DUTY AWAY FROM HIS OFFICIAL DUTY STATION DOES NOT
AFFECT HIS CLAIM FOR SUBSISTENCE FOR HIS FAMILY AND DOES NOT, WITHOUT
MORE, PREVENT ALLOWANCE OF HIS CLAIM.
IN THE INSTANT CASE, THE RECORD NOW SHOWS THAT MR. BROWN SUBMITTED
HIS TWO CLAIMS FOR TQSE ON THE SAME DAY, JUNE 24, 1977, AND THE SECRET
SERVICE APPARENTLY PROCESSED THE CLAIMS BELIEVING THAT HIS PERIOD OF
ELIGIBILITY HAD TO BEGIN ON MARCH 1, 1977, AND THAT HE COULD NOT CLAIM
TQSE FOR HIS FAMILY WHILE HE WAS AWAY FROM HIS STATION ON TEMPORARY
DUTY. HOWEVER, AS INDICATED ABOVE, THE EMPLOYEE HAS THE OPTION OF
EITHER CLAIMING TQSE WHEN HE BEGINS TO OCCUPY TEMPORARY QUARTERS OR WHEN
HIS FAMILY VACATES ITS RESIDENCE AT THE OLD STATION; AND AN EMPLOYEE
MAY CLAIM TQSE FOR HIS FAMILY ALTHOUGH HE IS PAID PER DIEM WHILE ON
TEMPORARY DUTY AWAY FROM HIS OFFICIAL DUTY STATION. THUS, THE SECRET
SERVICE SHOULD HAVE ADVISED MR. BROWN TO SUBMIT HIS CLAIM FOR THE PERIOD
MORE ADVANTAGEOUS TO HIM. THIS PERIOD WAS FROM MAY 1 TO MAY 30, 1977,
SINCE THE RECORD SHOWS HE HAD A WIFE AND TWO CHILDREN.
IN VIEW OF THE ABOVE, OUR CLAIMS DIVISION WILL PROCESS A SETTLEMENT
FOR THE ADDITIONAL AMOUNT DUE UNDER THIS DECISION IF THE CLAIM IS
OTHERWISE PROPER. THE SETTLEMENT WILL REIMBURSE MR. BROWN FOR HIS
FAMILY'S REASONABLE SUBSISTENCE EXPENSES FROM MAY 1 TO MAY 30, 1977, AND
HIS EXPENSES FROM MAY 1 TO MAY 3, 1977. FROM THIS AMOUNT THE PREVIOUS
PAYMENT FOR TQSE FROM MARCH 1 TO APRIL 30, 1977, WILL BE DEDUCTED.
B-193693, AUG 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. UPON RECONSIDERATION, GAO WILL CONSIDER INFORMATION AVAILABLE TO
PROCURING ACTIVITY CONCERNING ITS LEGITIMATE NEEDS NOT SUBMITTED DURING
PENDENCY OF PROTEST.
2. WHERE LEGITIMATE NEEDS OF GOVERNMENT CAN BE SATISFIED FROM ONLY
SINGLE SOURCE, LAW DOES NOT REQUIRE THAT THOSE NEEDS BE COMPROMISED IN
ORDER TO OBTAIN COMPETITION.
LANIER BUSINESS PRODUCTS, INC. - RECONSIDERATION:
IN THE MATTER OF LANIER BUSINESS PRODUCTS, INC., B-193693, APRIL 3,
1979, 79-1 CPD 232, WE SUSTAINED LANIER'S PROTEST BECAUSE THE INTERSTATE
COMMERCE COMMISSION (ICC) HAD FAILED TO SHOW A NEED FOR THE BACKGROUND
MODE DUPLICATING REQUIREMENT (SPECIFICATION 6) AND THE SUBSCRIPT,
SUPERSCRIPT ON SCREEN DISPLAY REQUIREMENT (SPECIFICATION 12) FOR TEXT
PROCESSING EQUIPMENT. WE RECOMMENDED REVISION OF THE SPECIFICATIONS AND
RESOLICITATION.
THE ICC REQUESTED RECONSIDERATION OF OUR DECISION AND SUBMITTED
DETAILED INFORMATION CONCERNING THE PROPRIETY OF ITS SPECIFICATIONS. WE
WITHDREW OUR RECOMMENDATION; HOWEVER, WE SUGGESTED THAT THE ICC REVIEW
THE NEED FOR THE "ON SCREEN" REQUIREMENT BEFORE IT UTILIZES IT AGAIN FOR
ANY FUTURE PROCUREMENT. INTERSTATE COMMERCE COMMISSION -
RECONSIDERATION, B-193693, JUNE 11, 1979.
LANIER BUSINESS PRODUCTS, INC. (LANIER), NOW REQUESTS RECONSIDERATION
OF OUR JUNE 11, 1979, DECISION. IN URGING RECONSIDERATION, LANIER
STATES THAT THE DETAILED SUPPORT SUBMITTED BY THE ICC WAS NOT NEW
MATERIAL. IN FACT, THE RATIONALE FOR THE SPECIFICATIONS PROVIDED BY THE
ICC WAS SUBMITTED IN CONJUNCTION WITH ANOTHER PROTEST FILED BY LANIER,
I.E., LANIER BUSINESS PRODUCTS, INC., ET AL., B-192432, FEBRUARY 9,
1979, 79-1 CPD 88. HENCE, THE ICC FAILED TO COMPLY WITH THE BID PROTEST
PROCEDURES FOR RECONSIDERATION SINCE THE ICC'S INFORMATION WAS
PREVIOUSLY CONSIDERED. SEE 4 C.F.R. SEC. 20.9(A) (1979).
LANIER MAKES THE FOLLOWING ARGUMENTS. NOTWITHSTANDING THE ICC'S
FAILURE TO COMPLY WITH THE BID PROTEST PROCEDURES, THE COMPTROLLER
GENERAL CONSIDERED THE MATERIAL AND REVERSED HIS DECISION. IN SO DOING,
THE COMPTROLLER GENERAL COMMITTED A GROSS ERROR OF LAW. IN EFFECT, THE
COMPTROLLER GENERAL HAS ANNOUNCED TWO DIFFERENT RULES FOR CONSIDERING
REQUESTS FOR RECONSIDERATION. THE ONLY PRECEDENT CITED BY THE
COMPTROLLER GENERAL FOR THIS DOUBLE STANDARD IS A CASE WHICH CONTAINS NO
LEGAL RATIONALE FOR SUCH A DISCRIMINATING PRACTICE AND WHICH ALLOWS
FEDERAL AGENCIES AS MANY OPPORTUNITIES AS THEY NEED TO SUBSTANTIATE
THEIR POSITIONS REGARDING A PROTEST. SEE THE RAYMOND CORPORATION; AIR
FORCE - REQUESTS FOR RECONSIDERATION, B-188277, SEPTEMBER 16, 1977, 77-2
CPD 197. A PROTESTER IS DENIED THIS OPPORTUNITY. IF THIS IS THE RULE,
THE BID PROTEST PROCEDURES SHOULD BE REVISED TO REFLECT THIS DOUBLE
STANDARD.
EVEN IF THE ICC HAS THE RIGHT TO HAVE THE RECORD REOPENED - PURSUANT
TO SOME UNWRITTEN RULE - LANIER CONTENDS THAT ICC'S SUBMISSION DOES NOT
SUPPORT ITS ASSERTION THAT SPECIFICATION 6 IS NOT UNDULY RESTRICTIVE.
THE COMPTROLLER GENERAL SIMPLY ACCEPTED THE ICC'S STATEMENT REGARDING
SPECIFICATION 6 AT FACE VALUE WHEN IN FACT IMPARTIAL ICC EXPERTS FOUND
THAT THE SPECIFICATION WAS UNDULY RESTRICTIVE. FURTHER, THE COMPTROLLER
GENERAL DID NOT CONSIDER LANIER'S EARLIER ALLEGATION THAT ONLY THE
AWARDEE COULD SUBMIT A RESPONSIVE BID.
FOR THE REASONS STATED BELOW, LANIER'S REQUEST FOR RECONSIDERATION IS
DENIED.
CONTRARY TO LANIER'S ASSERTION, THE DATA SUBMITTED BY THE ICC IN
SUPPORT OF ITS REQUEST FOR RECONSIDERATION WAS NOT PREVIOUSLY CONSIDERED
BY THIS OFFICE IN CONNECTION WITH LANIER'S PROTEST OF THE ICC
SPECIFICATIONS. THE SPECIFIC DATA SUBMITTED BY THE ICC IN SUPPORT OF
ITS REQUEST FOR RECONSIDERATION WAS AVAILABLE DURING THE PENDENCY OF
LANIER'S PROTEST OF ICC'S SPECIFICATIONS BUT ICC DID NOT SUBMIT IT. IT
MAY HAVE BEEN SUBMITTED IN CONNECTION WITH ANOTHER PROTEST FILED BY
LANIER CONCERNING SPECIFICATIONS UTILIZED BY AN ICC CONSULTING FIRM, BUT
IT WAS NOT PART OF THE RECORD REGARDING LANIER'S PROTEST OF THE ICC
SPECIFICATIONS SET FORTH IN ICC SOLICITATION NO. 79B-0001.
UPON RECONSIDERATION, OUR OFFICE WILL CONSIDER DATA PROVIDED BY THE
PROCURING ACTIVITY CONCERNING ITS LEGITIMATE NEEDS WHICH WAS AVAILABLE
BUT NOT SUBMITTED BY THE PROCURING ACTIVITY DURING OUR CONSIDERATION OF
A PROTEST. WHILE THIS IS AN EXCEPTION TO THE BID PROTEST PROCEDURES, WE
DO SO BECAUSE WE DO NOT BELIEVE THAT A CONTRACTING AGENCY SHOULD HAVE TO
PURCHASE SOMETHING NOT MEETING ITS NEEDS SIMPLY BECAUSE IT HAS FAILED TO
FURNISH A BASIS SUPPORTING ITS NEEDS WHEN ONE DOES EXIST. ALTHOUGH THE
EXCEPTION IS NOT STATED IN THE BID PROTEST PROCEDURES, THE PRACTICE HAS
BEEN ESTABLISHED BY PRIOR DECISIONS. SEE CITATIONS IN INTERSTATE
COMMERCE COMMISSION - RECONSIDERATION, SUPRA.
WHEN THE NEED FOR THE REQUIREMENTS IN A SOLICITATION IS
UNSUBSTANTIATED, WE WILL FIND THAT THE SOLICITATION IS DEFECTIVE AND,
EVEN THOUGH BIDS HAVE BEEN OPENED, A NEW SOLICITATION WITH PROPER
SUBSTANTIATION MUST BE ISSUED. WHERE THE CONTRACTING AGENCY HAD A BASIS
FOR THE REQUIREMENTS WHICH IT DID NOT RELY UPON, IT MIGHT UTILIZE THAT
BASIS IN ISSUING A NEW SOLICITATION AND, IF PROPER, THE SOLICITATION
WOULD STAND. IN PERMITTING THE CONTRACTING AGENCY TO FURNISH THE
SUBSTANTIATION IN SUPPORT OF THE ORIGINAL SOLICITATION, THERE IS AVOIDED
AN UNNECESSARY PROCESS WHICH MIGHT TURN THE PROCUREMENT INTO AN AUCTION
IF THERE WAS A PROPER BASIS FOR THE ORIGINAL SOLICITATION. THEREFORE,
WE BELIEVE IT WAS APPROPRIATE FOR US TO PERMIT THE ICC TO FURNISH A
JUSTIFICATION FOR THE SOLICITATION AFTER THE ORIGINAL DECISION.
WE NEITHER ACCEPTED THE ICC'S STATEMENT REGARDING THE REASONABLENESS
OF ITS SPECIFICATIONS AT FACE VALUE NOR DID WE DISREGARD THE STATEMENT
OF THE ICC'S EXPERTS. ON THE CONTRARY, OUR ANALYSIS INDICATED THAT THE
SIMULTANEOUS UTILIZATION OF BACKGROUND AND FOREGROUND MODES AS REQUIRED
BY SPECIFICATION 6 WOULD HELP ACHIEVE THE ICC'S STATED OBJECTIVE OF
MAKING THE WRITTEN COMMUNICATIONS PROCESS MORE EFFICIENT.
AS INDICATED, LANIER CONTENDS THAT ONLY THE AWARDEE COULD SUBMIT A
RESPONSIVE BID. ASSUMING ARGUENDO THAT THIS ASSERTION IS CORRECT, IT IS
OF NO CONSEQUENCE. IN THIS REGARD, WE HAVE HELD THAT WHERE THE
LEGITIMATE NEEDS OF THE GOVERNMENT CAN BE SATISFIED FROM ONLY A SINGLE
SOURCE, THE LAW DOES NOT REQUIRE THAT THOSE NEEDS BE COMPROMISED IN
ORDER TO OBTAIN COMPETITION. CALIFORNIA MICROWAVE, INC., B-180954,
SEPTEMBER 24, 1974, 74-2 CPD 181; JOHNSON CONTROLS, INC., B-184416,
JANUARY 2, 1976, 76-1 CPD 4.
BASED ON THE FOREGOING, OUR DECISION OF JUNE 11, 1979, IS SUSTAINED.
B-191297, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CIVILIAN EMPLOYEE OF AIR FORCE ATTENDING TRAINING COURSE AT CHANUTE
AFB MAY NOT BE REIMBURSED FOR COMMERCIAL LODGING WHEN HE CHOSE NOT TO
OCCUPY GOVERNMENT QUARTERS. REGULATIONS IMPLEMENTING PUBLIC LAW 95-111,
91 STAT. 908, STATE EMPLOYEE MAY NOT BE REIMBURSED FOR COMMERCIAL
QUARTERS UNLESS HE OBTAINS STATEMENT FROM THE COMMANDING OFFICER AT
TRAINING CENTER SAYING OCCUPATION OF GOVERNMENT QUARTERS WAS IMPRACTICAL
AND EMPLOYEE DID NOT OBTAIN SUCH STATEMENT.
JERRY CARDINAL:
THIS DECISION RESPONDS TO THE LETTER OF DECEMBER 15, 1978, REFERENCE
1041-RE-03, FROM MR. JAMES M. PEIRCE, PRESIDENT, NATIONAL FEDERATION OF
FEDERAL EMPLOYEES, AND DESIGNATED REPRESENTATIVE OF MR. JERRY CARDINAL,
AN AIR FORCE CIVILIAN EMPLOYEE AT MINOT AIR FORCE BASE. MR. PEIRCE
PRESENTS MR. CARDINAL'S CLAIM FOR REIMBURSEMENT OF COMMERCIAL LODGING
EXPENSES INCIDENT TO A TRAINING ASSIGNMENT. FOR THE REASONS BELOW, WE
DISALLOW THE CLAIM.
BRIEFLY, MR. CARDINAL WAS ASSIGNED TO CHANUTE AIR FORCE BASE (AFB)
FROM NOVEMBER 9 UNTIL NOVEMBER 29, 1977, FOR TRAINING. HE WAS ASSIGNED
QUARTERS ON THE BASE, BUT AFTER ONE NIGHT MOVED TO A NEARBY HOLIDAY INN
BECAUSE HE FELT THE GOVERNMENT QUARTERS WERE SUBSTANDARD. HIS HOME BASE
COMMANDING OFFICER, COLONEL KENNETH L. HOLDEN, TOLD HIM THAT IF HE
COULD, HE WOULD AUTHORIZE PER DIEM TO COVER OCCUPATION OF COMMERCIAL
QUARTERS. HOWEVER, MR. CARDINAL NEVER OBTAINED A STATEMENT FROM THE
COMMANDING OFFICER AT CHANUTE AFB THAT OCCUPATION OF QUARTERS WAS
IMPRACTICABLE.
SECTION 853 OF PUBLIC LAW 95-111, SEPTEMBER 21, 1977, 91 STAT. 908,
PROVIDES THAT NONE OF THE FUNDS OF THE DEPARTMENT OF DEFENSE FOR FISCAL
YEAR 1978 ARE AVAILABLE TO PAY LODGING EXPENSES OF ANY PERSON ON
OFFICIAL BUSINESS AWAY FROM HIS DESIGNATED HEADQUARTERS WHEN ADEQUATE
GOVERNMENT QUARTERS ARE AVAILABLE, BUT NOT OCCUPIED BY SUCH PERSON.
PARAGRAPH C1055 OF VOLUME 2, JOINT TRAVEL REGULATIONS (CH. 146,
EFFECTIVE OCTOBER 1, 1977), STATES THE CONDITIONS UNDER WHICH AN
EMPLOYEE MAY BE REIMBURSED FOR OCCUPATION OF COMMERCIAL QUARTERS.
"1. GENERAL. ALTHOUGH AN EMPLOYEE MAY NOT BE REQUIRED TO UTILIZE
GOVERNMENT QUARTERS, WHEN ADEQUATE GOVERNMENT QUARTERS ARE AVAILABLE BUT
NOT USED, THE PAYMENT OF THE QUARTERS PORTION OF THE PER DIEM OR ACTUAL
EXPENSE ALLOWANCES OF ANY EMPLOYEE ON TEMPORARY DUTY AWAY FROM HIS
DESIGNATED POST OF DUTY MAY NOT BE MADE EXCEPT UNDER THE FOLLOWING
CONDITIONS:
"2. WHEN THE COMMANDING OFFICER (OR DESIGNATED REPRESENTATIVE)
RESPONSIBLE FOR GOVERNMENT QUARTERS AT THE TEMPORARY DUTY OR DELAY POINT
FURNISHES A STATEMENT TO THE EFFECT THAT UTILIZATION OF GOVERNMENT
QUARTERS WAS IMPRACTICABLE ***.
"2. EFFECT OF ABSENCE OF STATEMENT. IN THE ABSENCE OF A STATEMENT
ISSUED UNDER THE PROVISIONS OF SUBPAR. 1 OR UNLESS THE NONAVAILABILITY
OF ADEQUATE GOVERNMENT QUARTERS CAN BE ASCERTAINED BY REFERENCE TO A
PUBLICATION ISSUED BY THE UNIFORMED SERVICE CONCERNED, IT SHALL BE
ASSUMED THAT ADEQUATE GOVERNMENT QUARTERS WERE AVAILABLE ON ANY DAY FOR
WHICH THE EMPLOYEE FAILS TO SUBMIT AN APPROPRIATE STATEMENT ***
INDICATING THAT SUCH QUARTERS WERE NOT AVAILABLE OR NOT UTILIZED ON THAT
DATE. ***"
THE ABOVE REGULATIONS REQUIRE THE EXEMPTING STATEMENT TO BE ISSUED BY
THE COMMANDING OFFICER AT THE TEMPORARY DUTY STATION, NOT THE HOME BASE
COMMANDING OFFICER. THUS, COLONEL HOLDEN'S ADVICE TO MR. CARDINAL TO
OCCUPY COMMERCIAL QUARTERS DOES NOT AMOUNT TO AN AUTHORIZATION TO DO SO.
IN THIS CONNECTION COLONEL HOLDEN STATED THAT HE TOLD MR. CARDINAL THAT
IF IT WERE WITHIN HIS PURVIEW HE WOULD PERMIT HIM TO MOVE OFF BASE AND
COLLECT PER DIEM AT THE NONAVAILABILITY-OF-QUARTERS RATE.
UNDER THE REGULATIONS IMPLEMENTING PUBLIC LAW 95-111 THE
DETERMINATION AS TO WHETHER GOVERNMENT QUARTERS ARE ADEQUATE IS VESTED
IN THE COMMANDING OFFICER WHO HAS JURISDICTION OVER THOSE QUARTERS.
ALTHOUGH WE WOULD NOT CONDONE A PRACTICE OF REQUIRING EMPLOYEES TO
RESIDE IN OBVIOUSLY UNHEALTHY OR INADEQUATE ROOMS, WE CANNOT SUBSTITUTE
OUR JUDGMENT FOR THE AIR FORCE COMMANDING OFFICER IN THIS MATTER. SINCE
MR. CARDINAL DID NOT OBTAIN A STATEMENT FROM THE COMMANDING OFFICER AT
CHANUTE AFB THAT THE QUARTERS ASSIGNED WERE NOT ADEQUATE, THERE IS NO
ENTITLEMENT TO REIMBURSEMENT OF THE COMMERCIAL LODGING EXPENSES.
IN VIEW OF THE ABOVE, MR. CARDINAL'S CLAIM IS DISALLOWED.
B-193773, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. COMPLIANCE WITH SPECIAL EXPERIENCE REQUIREMENTS AFFECTED
RESPONSIBILITY OF BIDDER AND NOT RESPONSIVENESS OF SUBMITTED BID; HENCE
REFERRAL TO SMALL BUSINESS ADMINISTRATION (SBA) OF QUESTION OF SMALL
BUSINESS' COMMPLIANCE WITH REQUIREMENTS WAS APPROPRIATE UNDER
CERTIFICATE OF COMPETENCY (COC) PROCEDURE.
2. STATEMENT OF REPRESENTATIVE OF SMALL BUSINESS CONCERN THAT
CONCERN DID NOT MEET MINIMUM EXPERIENCE REQUIREMENTS DID NOT EXCUSE
REFERRAL OF QUESTION OF BIDDER'S COMPLIANCE WITH REQUIREMENTS TO SBA
UNDER COC PROCEDURE SINCE: (A) PROCUREMENT REGULATION MANDATES REFERRAL
AND DOES NOT CONTAIN EXCEPTION FOR SITUATIONS WHERE BIDDER OFFERS
SUBJECTIVE OPINION THAT IT DOES NOT COMPLY WITH REQUIREMENTS; (B) AFTER
REFERRAL TO SBA BIDDER ACTIVELY SOUGHT COC; AND (C) BIDDER'S SUBJECTIVE
JUDGMENT ON COMPLIANCE WITH REQUIREMENTS IS NOT DECISIVE SINCE
RESOLUTION OF QUESTION OF COMPLIANCE REQUIRES KNOWLEDGE OF LEGAL
PRECEDENT.
3. GAO PERCEIVES NO DENIAL OF PROCEDURAL FAIRNESS IN PROTEST AGAINST
SBA COC DECISION NOTWITHSTANDING SBA'S REFUSAL TO DISCLOSE TO PROTESTER
SPECIFIC RATIONALE FOR DECISION SINCE: (A) BID PROTEST PROCEDURES, 4
C.F.R. PART 20 (1979), GENERALLY AFFORD PROTESTER AND INTERESTED PARTIES
A REASONABLE OPPORTUNITY TO PRESENT THEIR POSITIONS; (B) PROTESTER HAS
NOT SPECIFICALLY REQUESTED RELEASE OF RATIONALE FROM SBA; AND (C)
PROTESTER AND INTERESTED PARTIES HAVE BEEN FURNISHED COPIES OF ARMY'S
SUMMARY OF SBA RATIONALE.
4. GAO'S REVIEW STANDARD CONCERNING PROTEST OF ISSUANCE OF COC
INVOLVING COMPLIANCE WITH SPECIAL EXPERIENCE REQUIREMENTS IS LIMITED TO
FRAUD ON PART OF SBA OR TO FAILURE OF SBA TO CONSIDER VITAL INFORMATION.
SINCE PROTESTERS' ARGUMENTS ARE CONCERNED WITH INFORMATION WHICH WAS OF
RECORD BEFORE SBA AREAS IS CONSIDERED BENEFICIAL, BUT NOT MANDATORY, NOR
CAN IT BE SUBSTITUTED FOR THE ABOVE-CITED FOUR (4) AREAS. THESE AREAS
ARE: EMERGENCY ROOMS, INTENSIVE CARE, CARDIAC CATHETERIZATION, AND
ISOLATION."
U.S. EAGLE, INC.; RELIABLE BUILDING MAINTENANCE COMPANY:
OF THE SEVEN BIDS OPENED ON OCTOBER 23, 1978, TWO BIDS WERE REJECTED
BECAUSE OF BID BOND DEFICIENCIES. OF THE REMAINING BIDS, PACIFIC'S BID
WAS THE LOWEST; EAGLE'S BID WAS SECOND LOWEST.
THE CONTRACTING OFFICER REPORTS THAT ON NOVEMBER 6 HE REQUESTED A
PREAWARD SURVEY ON PACIFIC TO DETERMINE WHETHER THE COMPANY WAS A
RESPONSIBLE CONCERN ESPECIALLY CONSIDERING THE EXPERIENCE REQUIREMENT
SET FORTH IN THE IFB. WHILE THE SURVEY WAS BEING MADE, EAGLE PROTESTED
TO THE ARMY ANY AWARD TO PACIFIC ON THE GROUNDS THAT THE COMPANY DID NOT
POSSESS THE NECESSARY EXPERIENCE; BY LETTER OF DECEMBER 8, EAGLE ALSO
FILED A PROTEST WITH OUR OFFICE.
AFTER THE SURVEY WAS MADE OF THE COMPANY, THE SURVEY TEAM RECOMMENDED
TO THE CONTRACTING OFFICER THAT NO AWARD BE MADE BECAUSE THE TEAM FOUND
(AS REPORTED BY THE CONTRACTING OFFICER) THAT "PACIFIC DID NOT MEET THE
EXPERIENCE REQUIREMENT OF A MINIMUM OF 12 MONTHS SPECIALIZED EXPERIENCE
WITHIN THE LAST 36 MONTHS."
BECAUSE OF THIS INFORMATION, THE CONTRACTING OFFICER FOUND THAT
PACIFIC WAS NOT A RESPONSIBLE CONCERN ON DECEMBER 18, 1978. SHORTLY
AFTER THIS DATE, PACIFIC MAILED A DECEMBER 26 PROTEST TO OUR OFFICE.
THE LETTER STATED THE "FAILURE OF PACIFIC TO TECHNICALLY SATISFY THE
(IFB EXPERIENCE REQUIREMENT) DOES NOT RENDER PACIFIC'S BID
NON-RESPONSIVE OR PACIFIC A NON-RESPONSIBLE BIDDER."
BY LETTER OF JANUARY 9, 1979, THE CONTRACTING OFFICER REFERRED THE
QUESTION OF PACIFIC'S COMPETENCY TO PERFORM THE CONTRACT TO SBA
"PURSUANT TO (DEFENSE ACQUISITION REGULATION) DAR SEC. 1-705.4" WHICH
PROVIDES:
"1-705.4 CERTIFICATES OF COMPETENCY
"(A) SBA HAS STATUTORY AUTHORITY TO CERTIFY THE COMPETENCY OF ANY
SMALL BUSINESS CONCERN AS TO ALL ELEMENTS OF RESPONSIBILITY INCLUDING,
BUT NOT LIMITED TO, CAPABILITY, COMPETENCY, CAPACITY, CREDIT, INTEGRITY,
PERSEVERANCE, AND TENACITY EXCEPT REGULATORY REQUIREMENTS UNDER THE
JURISDICTION OF OTHER FEDERAL AGENCIES. CONTRACTING OFFICERS SHALL
ACCEPT SBA CERTIFICATES OF COMPETENCY AS CONCLUSIVE OF A PROSPECTIVE
CONTRACTOR'S RESPONSIBILITY ***
"(C) IF A BID OR PROPOSAL OF A SMALL BUSINESS CONCERN IS TO BE
REJECTED BECAUSE THE CONTRACTING OFFICER HAS DETERMINED THE CONCERN TO
BE NONRESPONSIBLE, THE MATTER SHALL BE REFERRED TO THE APPROPRIATE SBA
FIELD OFFICE HAVING THE AUTHORITY TO PROCESS THE REFERRAL IN THE
GEOGRAPHICAL AREA INVOLVED."
THE DOCUMENTS FORWARDED TO THE SBA CLEARLY REVEALED THAT THE ONLY
REASON THE CONTRACTING OFFICER FOUND PACIFIC TO BE NOT RESPONSIBLE WAS
THE CONCERN'S FAILURE TO MEET THE IFB EXPERIENCE REQUIREMENT.
ON LEARNING OF THE REFERRAL, PACIFIC WITHDREW ITS PROTEST BEFORE OUR
OFFICE.
THEREAFTER, IN LATE FEBRUARY 1979, THE SBA INFORMED THE ARMY THAT IT
HAD CERTIFIED PACIFIC TO BE COMPETENT TO PERFORM THE CONTRACT IN
QUESTION. THERE WAS NO INDICATION, HOWEVER, IN THE SBA'S LETTER TO THE
ARMY AS TO THE REASONING OR FINDINGS WHICH LED THE SBA TO CONCLUDE THAT
PACIFIC WAS "COMPETENT" WITH RESPECT TO THE IFB'S EXPERIENCE
REQUIREMENT. THUS, THE ARMY SPECIFICALLY REQUESTED SBA TO FURNISH IT
WITH "ALL COPIES OF SIGNIFICANT DATA DEVELOPED BY (THE SBA CONCERNING
ITS DECISION)."
WHILE THE ARMY'S REQUEST WAS PENDING AT SBA, WE RECEIVED A FEBRUARY
15 LETTER OF PROTEST FROM EAGLE THAT THE ARMY HAD IMPROPERLY REFERRED
THE QUESTION OF PACIFIC'S COMPETENCY TO THE SBA; AND THAT SBA HAD NO
"JURISDICTION TO PASS ON THE MATTER AS PACIFIC *** DOES NOT HAVE THE
EXPERIENCE REQUIRED"; AND THAT "SBA CANNOT WAIVE THE SPECIFICATIONS."
BY LETTER OF MARCH 19, THE SBA FORWARDED THE REQUESTED DOCUMENTS TO
THE ARMY WITH THE RESTRICTION THAT "THESE DOCUMENTS ARE NOT TO BE
DISCLOSED TO EAGLE OR ANY OTHER PERSON OR ENTITY OUTSIDE THE
GOVERNMENT." TO OUR KNOWLEDGE, EAGLE HAS NOT CONTESTED THIS RESTRICTION
BY FILING A REQUEST FOR THE DOCUMENTS FROM SBA - THE AGENCY HAVING
PRIMARY INTEREST IN THE DOCUMENTS.
IN MAY OF THIS YEAR, THE ARMY FORWARDED ITS REPORT ON PACIFIC'S
FEBRUARY 15 PROTEST.
THE ARMY'S REPORT NOTED THAT THE "CONTRACTING OFFICER HAS ELECTED TO
ABIDE BY SBA'S ISSUANCE OF THE COMPETENCY CERTIFICATE TO PACIFIC ON THE
BASIS OF INFORMATION CONTAINED IN THE MARCH 19 SBA LETTER TO THE ARMY."
THE ARMY FURTHER OBSERVED:
"WITH REGARD TO THE (SBA) DETERMINATION MADE IN THIS CASE WE OBSERVE
THAT THE FILE SHOWS THAT PACIFIC HAS PERFORMED CUSTODIAL SERVICES SINCE
1961 AND HAS HAD A LONG RECORD OF SATISFACTORY PERFORMANCE. HOWEVER,
ITS LAST HOSPITAL HOUSEKEEPING CONTRACT IS SAID TO BE ABOUT FIVE YEARS
AGO (1973-1974). ALTHOUGH IT MAY BE AVAILABLE IN THE SBA FILES, THE
ADMINISTRATIVE REPORT DOES NOT REFLECT THE SPECIFIC EXPERIENCE IN MONTHS
AND/OR YEARS AT NAMED HOSPITALS RELIED ON BY THE SBA IN REACHING ITS
DETERMINATION THAT PACIFIC SATISFIES THE SPECIFIC EXPERIENCE CRITERIA OF
OPERATING A HOSPITAL HOUSEKEEPING PROGRAM FOR 12 OF THE PREVIOUS 36
MONTHS (TP 1.13). THE FILE ALSO DOES NOT REFLECT HOW THE OFFICERS OF
THE CORPORATION POSSESS SUCH EXPERIENCE OR ITS EQUIVALENT. IN FACT, MR.
ELLIS, THE PRESIDENT OF PACIFIC, IN A LETTER TO THE PROCUREMENT DIVISION
OF 8 NOVEMBER 1978, STATED THAT 'WE FIND THAT OUR MOST RECENT CORPORATE
EXPERIENCE DOES NOT FALL WITHIN THE THREE (3) YEARS LIMIT, ALTHOUGH WE
CAN AND DO MEET ALL OTHER REQUESTED REQUIREMENTS.'
"IT IS OUR VIEW, HOWEVER, THAT QUALIFICATIONS OF MR. REDFERN, THE
EXECUTIVE HOUSEKEEPER WHO WILL BE HIRED BY PACIFIC, ARE CONSIDERED
SUFFICIENT TO SATISFY THE EXPERIENCE REQUIREMENTS OF TP 1.13. IT IS
OBSERVED THAT MR. REDFERN HAS HAD SEVEN (7) YEARS' EXPERIENCE AS AN
EXECUTIVE HOUSEKEEPER. IN THIS CONNECTION THE EXECUTIVE HOUSEKEEPER IS
THE MOST IMPORTANT PERSON WORKING UNDER THE CONTRACT. HE ACTS FOR THE
CONTRACTOR, SUPERVISES AND TRAINS THE HOUSEKEEPING EMPLOYEES AND INSURES
EFFECTIVE COMPLIANCE WITH ALL THE PROVISIONS IN THE CONTRACT. AS SUCH
IT IS OUR VIEW THAT IN THIS INSTANCE, IT IS NOT IMPROPER TO CONSIDER THE
EXPERIENCE OF THE EXECUTIVE HOUSEKEEPER IN EXAMINING THE CONTRACTOR'S
OVERALL EXPERIENCE LEVEL. THUS WE CONSIDER THAT PACIFIC SATISFIES THE
DEFINITIVE EXPERIENCE CRITERIA SET OUT IN TP 1.13."
FINALLY, THE ARMY REQUESTED OUR OFFICE "TO EXPRESS ITS OPINION AS TO
WHETHER IT WILL ASSUME JURISDICTION *** TO ASSURE THAT THE EVIDENCE USED
BY THE SBA TO SUPPORT ITS DETERMINATION SATISFIES THE DEFINITIVE
CRITERIA SET OUT IN A SOLICITATION, ESPECIALLY WHERE THE SBA DECISION
OVERRULES A CONTRACTING OFFICER'S NONRESPONSIBILITY DETERMINATION."
THE DAY BEFORE THE ARMY TRANSMITTED ITS REPORT TO OUR OFFICE, WE
ISSUED A DECISION WHICH INVOLVED A SIMILAR FACTUAL SITUATION TO THAT OF
THE PRESENT PROTEST, NAMELY: SBA ISSUANCE OF A CERTIFICATE OF
COMPETENCY (COC) TO A BIDDER WHO HAD PREVIOUSLY BEEN FOUND TO BE
NONRESPONSIBLE FOR FAILURE TO COMPLY WITH A SPECIAL EXPERIENCE STANDARD.
THAT DECISION, J. BARANELLO AND SONS, 58 COMP. GEN. ___, B-192221, MAY
9, 1979, 79-1 CPD 322, WAS MADE AVAILABLE TO THE INVOLVED PARTIES FOR
THEIR COMMENTS.
ANALYSIS
THE ISSUES EAGLE RAISES ABOUT THE PROPRIETY OF THE ARMY'S REFERRAL OF
THE QUESTION OF PACIFIC'S COMPETENCY TO THE SBA ARE RESOLVED THROUGH
REFERENCE TO THE APPLICABLE DAR PROVISIONS, NOTED ABOVE, WHICH
DEMONSTRATE, IN OUR VIEW, THE PROPRIETY OF THE REFERRAL.
FIRST OF ALL, THERE CAN BE NO QUESTION THAT THE EXPERIENCE
REQUIREMENT RELATES TO THE CONCEPT OF RESPONSIBILITY WHICH, AS COMMONLY
UNDERSTOOD, RELATES TO A PROPOSED CONTRACTOR'S APPARENT ABILITY OR
CAPACITY TO PERFORM THE CONTRACT'S REQUIREMENTS. FOR EXAMPLE, DAR SEC.
1-903.2(A)(I) (DAC NO. 76-15, JUNE 1978) LISTS "EXPERIENCE" AS AN
ADDITIONAL STANDARD OF RESPONSIBILITY FOR APPROPRIATE PROCUREMENTS. IN
THIS PERSPECTIVE, "EXPERIENCE" - OR ANY OTHER ELEMENT OF RESPONSIBILITY
- HAS NOTHING TO DO WITH A BIDDER'S COMMITMENT TO PERFORM THE
GOVERNMENT'S WORK REQUIREMENTS WHICH INVOLVES THE CONCEPT OF
RESPONSIVENESS.
WHETHER PACIFIC MET THE EXPERIENCE REQUIREMENT WAS, THUS, A MATTER OF
RESPONSIBILITY WHICH, UNDER DAR SEC. 1-705.4(C), NOTED ABOVE, HAD TO BE
REFERRED TO SBA BY MANDATE OF EXISTING REGULATION. MOREOVER, THE
REFERRAL PROVISION IN QUESTION DOES NOT CONTAIN AN EXCEPTION FOR THOSE
SITUATIONS IN WHICH THE SMALL BUSINESS CONCERN, AS HERE, DOES NOT
INITIALLY QUESTION THE ADVERSE FINDING. ON THIS POINT, WE NOTE, IN
RESPONSE TO ARGUMENT MADE BY EAGLE, THAT, ALTHOUGH PACIFIC INITIALLY
STATED IT "DID NOT SATISFY THE MINIMUM (OFFEROR'S) EXPERIENCE
REQUIREMENT," THE COMPANY DID NOT OBJECT TO THE REFERRAL OF THE QUESTION
OF ITS COMPETENCY TO SBA; MOREOVER, PACIFIC ACTIVELY SOUGHT A COC FROM
SBA AFTER THE REFERRAL HAD BEEN MADE. FINALLY, IT IS OBVIOUS THAT
BIDDERS' SUBJECTIVE JUDGMENTS AS TO WHETHER THEY ARE RESPONSIBLE ARE NOT
DECISIVE - NOR SHOULD THEY BE - SINCE THE RESOLUTION OF RESPONSIBILITY
QUESTIONS REQUIRES KNOWLEDGE OF LEGAL PRECEDENT. THUS, WE FIND THE
REFERRAL OF THE QUESTION OF PACIFIC'S COMPETENCY TO BE APPROPRIATE UNDER
EXISTING PROCEDURES.
NEXT, EAGLE ARGUES THAT SBA'S REFUSAL TO DISCLOSE ITS DOCUMENTS WHICH
SUPPORT THE PACIFIC COC AFFECTS "DUE PROCESS RIGHTS" IN ITS PROTEST
BEFORE OUR OFFICE. WE HAVE REFUTED SIMILAR ARGUMENTS IN PRIOR
DECISIONS. AS WE STATED IN SYSTEMS RESEARCH LABORATORIES, INC.,
RECONSIDERATION, B-186842, MAY 5, 1978, 78-1 CPD 341:
"SRL ARGUES THAT DATA NOT RELEASABLE TO THE PROTESTER OR ANOTHER
INTERESTED PARTY FOR REBUTTAL MUST BE REJECTED AS EVIDENCE TO SUPPORT
THE CASE AND THAT TO DO OTHERWISE IS TO DENY THE PROCEDURAL DUE PROCESS
RIGHTS OF THE NONPROPONENT. WE DO NOT AGREE WITH SRL'S ASSESSMENT OF
OUR TREATMENT OF SUCH CASES UNDER OUR BID PROTEST PROCEDURES.
"THE RESOLUTION OF BID PROTESTS BY THIS OFFICE IS AN ADMINISTRATIVE
PROCEDURE DISTINCT FROM THE CONDUCT OF LITIGATION IN THE COURTS. OUR
BID PROTEST AUTHORITY IS BASED UPON OUR AUTHORITY TO ADJUST AND SETTLE
ACCOUNTS AND TO CERTIFY BALANCES IN THE ACCOUNTS OF ACCOUNTABLE OFFICERS
UNDER 31 U.S.C. SECS. 71, 74 (1970). *** NEITHER OF THESE SECTIONS
PRESCRIBES THE FORM OR PROCEDURE IN WHICH BID PROTESTS ARE TO BE
RESOLVED. WE ARE OF THE VIEW THAT TO WHATEVER EXTENT DUE PROCESS IS
REQUIRED UNDER THESE SECTIONS, PROCEDURES AFFORDING THE PROTESTER AND
INTERESTED PARTIES A REASONABLE OPPORTUNITY TO PRESENT THEIR CASE ARE A
SATISFACTORY AND FAIR METHOD. *** FURTHERMORE, WE DO NOT CONSIDER IT
NECESSARY TO SATISFY DUE PROCESS REQUIREMENTS IN ADMINISTRATIVE
PROCEEDINGS OF THIS NATURE THAT A PARTY BE APPRISED OF ALL OF THE
INFORMATION IN THE RECORD. ***
"OUR BID PROTEST PROCEDURES ARE INTENDED TO PROVIDE FAIR AND
EQUITABLE PROCEDURAL STANDARDS FOR THE PROTECTION OF ALL PARTIES TO A
PROTEST. NOTICE OF THE PROTEST IS REQUIRED TO BE GIVEN TO ALL BIDDERS
OR PROPOSERS WHICH APPEAR TO HAVE A 'SUBSTANTIAL AND REASONABLE PROSPECT
OF RECEIVING AN AWARD IF THE PROTEST IS DENIED.' 4 C.F.R. SEC. 20.3(A)
(1977). THE AGENCY IS REQUIRED TO SUBMIT A REPORT RESPONSIVE TO THE
PROTEST TO THIS OFFICE WITH COPIES TO THE PROTESTER AND INTERESTED
PARTIES. 4 C.F.R. SEC. 20.2(C) (1977). THE PROTESTER AND INTERESTED
PARTIES ARE ENTITLED TO EXAMINE AND COMMENT ON THE AGENCY REPORT. 4
C.F.R. SEC. 20.3(D) (1977).
"A PROTESTER OR OTHER PARTY DENIED ACCESS TO DOCUMENTS FURNISHED TO
THIS OFFICE BY AN AGENCY MAY SEEK DISCLOSURE OF THOSE DOCUMENTS UNDER
THE PROVISIONS OF THE FOIA. WHERE, AS HERE, THE RECORDS SOUGHT TO BE
DISCLOSED ARE AGENCY RECORDS, WE HAVE HELD THAT THIS OFFICE IS WITHOUT
AUTHORITY UNDER THE FOIA TO DETERMINE WHAT RECORDS MUST BE RELEASED AND
THE PROTESTER MUST MAKE APPLICATION TO THE AGENCY FOR RELEASE OF THE
DOCUMENTS. *** ONCE A PARTY HAS SOUGHT DISCLOSURE FROM THE AGENCY AND
BEEN DENIED, HIS SOLE REMEDY IS BY SUIT IN THE UNITED STATES DISTRICT
COURT. *** A PROTESTER MAY MAKE AND WE MAY HONOR A REQUEST THAT OUR
OFFICE WITHHOLD ACTION ON THE PROTEST DURING THE PENDENCY OF AN FOIA
REQUEST. *** WHERE A REQUEST TO WITHHOLD ACTION IS DENIED BY OUR
OFFICE, THE PARTY MAY STILL SEEK RECONSIDERATION OF OUR DECISION ON THE
PROTEST ON THE BASIS OF NEW INFORMATION OBTAINED THROUGH ITS FOIA
REQUEST. 4 C.F.R. SEC. 20.9 (1977).
"WE THINK THAT THIS PROCEDURES AFFORDS ALL PARTIES BOTH REASONABLE
NOTICE AND AN OPPORTUNITY TO BE HEARD AND WE ARE SATISFIED THAT THESE
PROCEDURES ARE FAIR. *** IN THESE CIRCUMSTANCES, WE PERCEIVE NO DENIAL
OF PROCEDURAL FAIRNESS ***."
IN ANY EVENT, EAGLE AND PACIFIC HAVE BEEN FURNISHED WITH A COPY OF
THE ARMY'S SUMMARY OF THE SBA'S RATIONALE FOR THE COC DECISION. THIS
SUMMARY REVEALS, TO SOME EXTENT, THE SBA POSITION. THUS, EAGLE HAS SOME
KNOWLEDGE OF SBA'S REASONING FOR ISSUING THE COC; THIS FACT FURTHER
UNDERCUTS, AS A PRACTICAL MATTER, EAGLE'S "LACK OF DUE PROCESS"
ARGUMENT. MOREOVER, EAGLE HAS NOT, TO OUR KNOWLEDGE, REQUESTED THE
DOCUMENTS IN QUESTION FROM THE SBA.
NEXT, EAGLE MAKES SEVERAL ARGUMENTS AS TO WHY SBA'S DECISION AS
SUMMARIZED BY THE ARMY IS ERRONEOUS, WHY THE ARMY HAS ERRONEOUSLY
CONCURRED IN THE SBA'S DECISION, WHY THE ARMY'S CONCURRENCE DEPARTS FROM
PRACTICE ON PRIOR PROCUREMENTS AND WHY FAIRNESS TO BIDDERS DEMANDS THAT
THE DECISION NOT BE GIVEN EFFECT. ALL THESE ARGUMENTS ARE DIRECTLY OR
INDIRECTLY PREMISED ON THE ASSUMPTION THAT OUR REVIEW STANDARD OF THE
SBA DECISION WOULD BE THE SAME AS IF WE WERE REVIEWING THE QUESTION OF A
BIDDER'S COMPLIANCE WITH A SPECIAL EXPERIENCE REQUIREMENT WHERE THE SBA
WAS NOT INVOLVED. EAGLE'S PREMISE IS ERRONEOUS.
IN THE BARANELLO DECISION, SUPRA, WHICH ALSO INVOLVED THE QUESTION OF
A SMALL BUSINESS' COMPLIANCE WITH A SPECIAL EXPERIENCE REQUIREMENT, WE
CONCLUDED THAT WHERE "NO QUESTION OF FRAUD IS INVOLVED (IN SBA'S
ISSUANCE OF A COC), (GAO'S ROLE IN REVIEWING A PROTEST AGAINST THE COC'S
ISSUANCE) WOULD BE LIMITED TO SUGGESTING THAT THE PROCURING AGENCY
RECONSIDER ITS DECISION IF THE RECORD INDICATES THAT CERTAIN VITAL
INFORMATION BEARING ON A SMALL BUSINESS BIDDER'S RESPONSIBILITY HAD NOT
BEEN CONSIDERED BY SBA." ALTHOUGH EAGLE ATTEMPTS TO DISTINGUISH
BARANELLO FROM THE PRESENT CASE MAINLY THROUGH AN ARGUMENT WHICH
CONTRASTS THE DIFFERENCE IN THE WORDING OF THE EXPERIENCE CLAUSES
INVOLVED, WE CONCLUDE THAT BARANELLO IS APPLICABLE TO THE PRESENT CASE
TO THE EXTENT IT ANNOUNCES THE STANDARD OF OUR OFFICE IN REVIEWING A
PROTEST AGAINST THE SBA'S ISSUANCE OF A COC FOR A PROCUREMENT WHICH
REQUIRED A BIDDER TO MEET CERTAIN MINIMUM EXPERIENCE REQUIREMENTS.
ESSENTIALLY, THEREFORE, OUR REVIEW OF THE ISSUANCE OF THE COC IS
LIMITED UNDER BARANELLO TO FRAUD ON THE PART OF SBA, WHICH HAS BEEN
NEITHER ALLEGED NOR SHOWN HERE, OR TO FAILURE OF THE SBA TO CONSIDER
VITAL INFORMATION BEARING ON PACIFIC'S RESPONSIBILITY. EAGLE DOES NOT
CITE ANY INFORMATION WHICH THE SBA FAILED TO CONSIDER AND DOES NOT ARGUE
THAT SBA WAS UNAWARE OF THE EXPERIENCE REQUIREMENT; INSTEAD, EAGLE
MERELY MAKES ARGUMENTS ABOUT INFORMATION WHICH WAS OF RECORD BEFORE SBA.
THUS, EAGLE'S ARGUMENTS ARE IRRELEVANT TO OUR REVIEW STANDARD AND WILL
NOT BE FURTHER CONSIDERED.
SINCE UNDER OUR REVIEW STANDARDS WE CANNOT QUESTION THE SBA'S
DECISION, WE ALSO CANNOT QUESTION THE ARMY'S CONCURRENCE IN THAT
DECISION.
IN RESPONSE TO ARMY'S REQUEST FOR AN OPINION ON WHETHER WE WILL
ESPECIALLY REVIEW SBA COC DECISIONS CONCERNING BIDDERS' COMPLIANCE WITH
SPECIAL EXPERIENCE REQUIREMENTS, WE NOTE THAT THE REVIEW STANDARD FOR
SBA COC DECISIONS AS ANNOUNCED IN BARANELLO AND IN THIS DECISION WILL
AFFORD SOME REVIEW OF THESE DECISIONS. GIVEN THE PRESENT COC SCHEME,
HOWEVER, WE ARE PROHIBITED FROM ANY MORE INTENSIVE REVIEW.
RELIABLE BUILDING MAINTENANCE COMPANY PROTEST
RELIABLE BUILDING MAINTENANCE COMPANY (RELIABLE) HAS ALSO PROTESTED
THE SBA'S COC DECISION AND THE ARMY'S CONCURRENCE IN THE DECISION.
ESSENTIALLY, RELIABLE SAYS IT FELT IT WOULD NOT COMPLY WITH THE SPECIAL
EXPERIENCE REQUIREMENTS; CONSEQUENTLY, THE COMPANY DID NOT BID FOR THE
CONTRACT. FURTHER, RELIABLE ARGUES THAT THE SBA DECISION HERE
EFFECTIVELY ALLOWS A DEVIATION FROM THESE REQUIREMENTS AND SHOULD NOT BE
PERMITTED.
WE VIEW THESE ARGUMENTS AS CLOSELY RELATED TO THE ONES ADVANCED BY
EAGLE. SPECIFICALLY, RELIABLE IS CONTESTING THE REASONABLENESS OF THE
SBA DECISION BUT DOES NOT SHOW THAT THE DECISION WAS THE RESULT OF FRAUD
OR THAT THE SBA FAILED TO TAKE INTO CONSIDERATION VITAL INFORMATION
BEARING ON PACIFIC'S COMPETENCY. AS NOTED ABOVE, WE CANNOT QUESTION THE
SBA'S DECISION UNDER THESE REVIEW STANDARDS.
PROTEST DENIED.
B-193843; B-193843.2; B-193843.3, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. AGENCY PROPERLY REJECTED BIDS OF APPARENT LOW BIDDER AND SECOND
LOW BIDDER AS NONRESPONSIVE WHERE MANNING CHARTS ACCOMPANYING BIDS
INDICATED THAT BIDDERS WOULD NOT COMPLY WITH MINIMUM MANNING REQUIREMENT
OF INVITATION FOR BIDS (IFB).
2. GAO WILL NOT ADDRESS OBJECTIONS OF AWARDEE TO AGENCY'S DECISION
NOT TO RENEW AWARDEE'S CONTRACT WHICH AGENCY BELIEVES WAS IMPROPERLY
AWARDED, BECAUSE IFB SHOULD NOT HAVE CONTAINED OPTION PROVISIONS AND ANY
EXERCISE OF OPTION WOULD BE IMPROPER. UNDER DEFENSE ACQUISITION
REGULATION OPTION PROVISIONS ARE NOT TO BE INCLUDED IN SOLICITATION
WHERE SERVICES BEING PURCHASED, SUCH AS FOOD SERVICES, ARE READILY
AVAILABLE ON THE OPEN MARKET.
3. IN ABSENCE OF EVIDENCE CLEARLY ESTABLISHING A SUBSTANTIAL ADVERSE
IMPACT ON COMPETITION, GAO WILL NOT OBJECT TO AGENCY'S CONTINUED USE OF
MINIMUM MANNING REQUIREMENTS IN EFFORT TO ENSURE ADEQUATE SERVICE.
PALMETTO ENTERPRISES, INC., ET AL.:
THIS DECISION IS IN RESPONSE TO PROTESTS FILED BY PALMETTO
ENTERPRISES, INC. (PALMETTO) AND INDUSTRIAL MAINTENANCE SERVICES, INC.
(IMS) AGAINST THE AWARD OF A CONTRACT TO INDUSTRIAL CATERING COMPANY,
INC., DIVISION OF MERRILL'S RESTAURANT, INC. (INDUSTRIAL), UNDER
INVITATION FOR BIDS (IFB) NO. DABT15-79-B-0001, ISSUED BY THE DEPARTMENT
OF THE ARMY (ARMY), AS WELL AS A PROTEST FILED BY INDUSTRIAL CONCERNING
THE ARMY'S DECISION NOT TO RENEW ITS CONTRACT AFTER THE INITIAL CONTRACT
PERIOD ENDS ON SEPTEMBER 30, 1979.
THE IFB WAS ISSUED BY THE ARMY ON NOVEMBER 20, 1978, FOR FOOD
SERVICES AT FORT BENJAMIN HARRISON, INDIANA. BIDDERS WERE REQUIRED TO
SUBMIT BIDS FOR AN INITIAL NINE MONTH PERIOD RUNNING FROM JANUARY 1,
1979 TO SEPTEMBER 30, 1979, AND FROM TWO ONE-YEAR OPTION PERIODS. THE
IFB ALSO PROVIDED THAT OPTION PRICES WOULD BE EVALUATED IN DETERMINING
THE LOW BID.
IMS SUBMITTED THE APPARENT LOW BID OF $2,343,187.69, WHILE PALMETTO
AND INDUSTRIAL SUBMITTED BIDS OF $2,673,610.94 AND $2,727,796.25,
RESPECTIVELY. HOWEVER, BECAUSE BOTH IMS'S AND PALMETTO'S MANNING CHARTS
INDICATED THAT LESS THAN THE FULL NUMBER OF EMPLOYEES REQUIRED TO BE ON
DUTY IN CERTAIN POSITIONS BY THE IFB WOULD IN FACT BE ON DUTY, THEIR
BIDS WERE REJECTED AS NONRESPONSIVE. ACCORDINGLY, THE ARMY AWARDED THE
CONTRACT TO INDUSTRIAL AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.
AFTER LEARNING OF THE AWARD TO INDUSTRIAL, BOTH PALMETTO AND IMS
FILED PROTESTS CHALLENGING THE REJECTION OF THEIR RESPECTIVE BIDS.
PALMETTO ASSERTED THAT IT INTENDED TO COMPLY WITH THE MINIMUM MANNING
REQUIREMENTS OF THE IFB AND THAT THE UNFILLED SLOTS FOR VARIOUS
POSITIONS IN ITS MANNING CHARTS WERE INTENDED TO REPRESENT BREAK PERIODS
FOR THE PERSONNEL FILLING THOSE POSITIONS. IMS, LIKEWISE, INDICATED
THAT IT LEFT CERTAIN SLOTS IN ITS MANNING CHARTS EMPTY TO REFLECT BREAK
PERIODS FOR THE PERSONNEL FILLING THOSE POSITIONS. IMS FURTHER
INDICATED THAT IT INTENTIONALLY LEFT OTHER SLOTS EMPTY BECAUSE THE
NATURE OF THE WORK REQUIRED TO BE PERFORMED DID NOT NECESSITATE
PERSONNEL BEING ON DUTY FOR THE PERIOD REQUIRED BY THE IFB.
NEVERTHELESS, IMS MAINTAINED THAT IT INTENDED TO UTILIZE AN AMOUNT OF
MANHOURS IN EXCESS OF THE MINIMUM REQUIRED BY THE IFB AND THAT THE COST
IMPACT OF ITS MANNING "SHORTAGES" WAS MINOR AND SHOULD NOT HAVE AFFECTED
ITS STANDING AS THE LOW BIDDER.
THEREAFTER, THE ARMY FILED A REPORT WITH OUR OFFICE CONCERNING THE
PROTESTS OF IMS AND PALMETTO. IN ITS REPORT THE ARMY ARGUED THAT THE
BIDS OF IMS AND PALMETTO WERE PROPERLY REJECTED AS NONRESPONSIVE BECAUSE
THE MANNING CHARTS ACCOMPANYING THE BIDS REVEALED THAT THE BIDDERS
PROPOSED NOT TO COMPLY WITH THE MINIMUM MANNING REQUIREMENTS OF PART II,
SECTION F OF THE IFB. HOWEVER, THE ARMY CONCEDED THAT UPON CLOSER
EXAMINATION IT HAD DETERMINED THAT THE AWARD TO INDUSTRIAL WAS IMPROPER
BECAUSE INDUSTRIAL'S BID ALSO FAILED TO COMPLY WITH THE MINIMUM MANNING
REQUIREMENTS OF THE IFB. SPECIFICALLY, THE ARMY NOTED THAT INDUSTRIAL'S
BID INDICATED THAT IT WOULD NOT HAVE EITHER A PROJECT MANAGER OR AN
ASSISTANT PROJECT MANAGER ON DUTY ON THE WEEKENDS BETWEEN 5:30 A.M. AND
6:30 A.M. AS REQUIRED BY THE IFB. CONSEQUENTLY, THE ARMY ADVISED US
THAT IT WOULD NOT RENEW INDUSTRIAL'S CONTRACT WHEN THE INITIAL CONTRACT
PERIOD ENDS ON SEPTEMBER 30, 1979, AND WOULD RESOLICIT NEEDS. THE ARMY
FURTHER ADVISED US THAT UPON RESOLICITATION THE IFB WOULD "SPECIFY THE
EXACT NUMBER OF PERSONNEL FOR THE NAMED POSITIONS AND THE EXACT HOURS TO
BE WORKED" AND "THAT LUNCH PERIODS ARE CONSIDERED NON-WORK PERIODS AND
THAT BREAK TIME IS CONSIDERED TIME WORKED" IN ORDER TO AVOID ANY
CONFUSION ON THE PART OF THE BIDDERS IN THE FUTURE.
SUBSEQUENTLY, INDUSTRIAL FILED A PROTEST WITH OUR OFFICE OBJECTING TO
THE ARMY'S DECISION NOT TO RENEW ITS CONTRACT AFTER THE INITIAL CONTRACT
PERIOD ENDS ON SEPTEMBER 30, 1979.
PALMETTO DISAGREES WITH THE ARMY'S OPINION THAT ITS BID WAS
NONRESPONSIVE. PALMETTO IN ESSENCE MAINTAINS THAT ITS BID DID NOT TAKE
EXCEPTION TO THE MINIMUM MANNING REQUIREMENTS OF THE IFB AND THAT THE
REJECTION OF ITS BID WAS DUE TO THE CONTRACTING OFFICER'S ARBITRARY AND
UNREASONABLE DETERMINATION THAT THE MINIMUM MANNING REQUIREMENTS
REQUIRED THAT PERSONNEL ACTUALLY BE ON DUTY DURING THE HOURS SPECIFIED
AND THAT EMPLOYEES ON REST OR LUNCH BREAKS WOULD NOT BE CONSIDERED AS
BEING ON DUTY. PALMETTO FURTHER ARGUES THAT THE CONTRACTING OFFICER
SEEMINGLY IGNORED THE LANGUAGE OF PART I, SECTION D OF THE IFB WHICH
PROVIDED:
"IN DETERMINING A BIDDER'S RESPONSIBILITY, THE BIDDER'S MANNING
CHARTS MUST ENSURE THAT THE TOTAL HOURS OFFERED ARE NOT LESS THAN THE
REQUIRED MINIMUM STAFFING."
NEVERTHELESS, PALMETTO CONCEDES THAT THE ARMY'S DECISION TO RESOLICIT
ITS NEEDS IS THE MOST ACCEPTABLE REMEDY IN VIEW OF THE CONFUSION
SURROUNDING THE MINIMUM MANNING REQUIREMENTS. ADDITIONALLY, PALMETTO
URGES US TO DIRECT THE ARMY TO REEXAMINE THE USEFULNESS OF MINIMUM
MANNING REQUIREMENTS AND MANNING CHARTS IN FOOD SERVICE PROCUREMENTS IN
LIGHT OF RECENT TRENDS AWAY FROM THE USE OF MANNING CHARTS BY THE NAVY
AND THE AIR FORCE. IN THIS REGARD, PALMETTO MAINTAINS THAT THE USE OF
CHARTS IN EFFECT DESTROYS COMPETITION AND ACTUALLY PENALIZES RESPONSIBLE
CONTRACTORS WHO, THROUGH EXPERIENCE AND GOOD MANAGEMENT SKILLS, ARE ABLE
TO PROVIDE SATISFACTORY PERFORMANCE WITH A LIGHTER WORKLOAD THAN THE
REQUIRED MINIMUM.
ON THE OTHER HAND, IMS OBJECTS TO THE ARMY'S DECISION TO RESOLICIT
ITS NEEDS AFTER INDUSTRIAL'S CONTRACT ENDS ON SEPTEMBER 30, 1979. IMS
CONTENDS THAT IT WAS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER (FOR THE
REASONS ARGUED IN ITS INITIAL PROTEST SUBMISSIONS) AND THAT IT IS
ENTITLED TO AN AWARD UNDER THE IFB. IMS MAINTAINS THAT THE ARMY'S
PROPOSED REMEDY IS NEITHER THE REMEDY IT SOUGHT "NOR IS IT FAIR AND
EQUITABLE."
INDUSTRIAL LIKEWISE OBJECTS TO THE ARMY'S DECISION TO RESOLICIT ITS
NEEDS. IN THIS REGARD, INDUSTRIAL ASSERTS THAT THE "SHORTAGE" RESULTING
FROM ITS FAILURE TO SCHEDULE A PROJECT MANAGER OR AN ASSISTANT PROJECT
MANAGER BETWEEN 5:30 A.M. AND 6:30 A.M. ON WEEKENDS AMOUNTS TO ONLY 2
MANHOURS OUT OF THE REQUIRED 2850.5 MANHOURS PER WEEK AND THEREFORE WAS
A MINOR IRREGULARITY WHICH COULD HAVE BEEN WAIVED UNDER DEFENSE
ACQUISITION REGULATION (DAR) SEC. 2-405 OR ALTERNATIVELY TREATED AS A
MISTAKE UNDER DAR SEC. 2-406.4.
WE AGREE THAT THE BIDS OF IMS AND PALMETTO WERE NONRESPONSIVE.
A BID IS NONRESPONSIVE UNLESS AS SUBMITTED IT CONSTITUTES AN OFFER TO
PERFORM, WITHOUT EXCEPTION, THE EXACT THING CALLED FOR IN THE IFB, AND
UPON ACCEPTANCE WILL BIND THE BIDDER TO PERFORM IN ACCORDANCE WITH ALL
THE MATERIAL TERMS AND CONDITIONS OF THE IFB. IN OTHER WORDS, IF
SOMETHING ON THE FACE OF THE BID, OR SOMETHING SPECIFICALLY MADE A PART
THEREOF, EITHER LIMITS, REDUCES OR MODIFIES THE OBLIGATION OF THE
PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE WITH THOSE TERMS, THE
BID IS NONRESPONSIVE. SEE 49 COMP. GEN. 553, 556 (1970).
UNDER THE TERMS OF THE IFB, A BIDDER WAS REQUIRED TO MAN VARIOUS
POSITIONS WITH A MINIMUM NUMBER OF EMPLOYEES DURING CERTAIN SPECIFIED
HOURS. FOR EXAMPLE, PART II, SECTION F 4 E PROVIDED IN PART:
"THE CONTRACTOR SHALL PROVIDE AS A MINIMUM WORKFORCE WHICH SHALL
APPLY TO BOTH A FOUR SERVING LINE AND A TWO SERVING LINE:
"(1) ONE COMPETENT PROJECT MANAGER WHO SHALL BE AUTHORIZED TO ACT FOR
THE CONTRACTOR AND BE RESPONSIBLE FOR THE ACCOMPLISHMENT OF ALL WORK
ASSIGNMENTS OF ALL TASKS AND FUNCTIONS AND COORDINATION OF ALL REQUIRED
SERVICES SPECIFIED AND/OR ORDERED UNDER THE TERMS OF THIS CONTRACT, AND
"(2) ONE ASSISTANT PROJECT MANAGER. THE PROJECT MANAGER AND/OR THE
ASSISTANT PROJECT MANAGER SHALL BE ON DUTY DURING ALL OPERATING HOURS
(0530 TO 1800) HOURS.
"(9) ONE FIRST COOK BETWEEN THE HOURS OF 0400-1830 ON WEEKDAYS AND
0630-1700 HOURS ON WEEKENDS AND HOLIDAYS.
"(14) A SANITARIAN (KITCHEN ONLY) DURING THE HOURS 0500-1800 ON
WEEKDAYS AND 0800-1630 HOURS ON WEEKENDS AND HOLIDAYS TO CLEAN KITCHEN
AND ADVISE MANAGEMENT ON PRACTICES NOT CONFORMING WITH MEDICAL
STANDARDS."
WE BELIEVE IT IS CLEAR THAT THE IFB REQUIRED THAT THE SPECIFIED
MINIMUM NUMBER OF EMPLOYEES ACTUALLY BE WORKING DURING THE HOURS
SPECIFIED AND THAT AN EMPLOYEE TAKING A REST OR LUNCH BREAK WOULD NOT BE
CONSIDERED AS BEING ON DUTY. THE PURPOSE OF MINIMUM MANNING
REQUIREMENTS OR LEVELS IS TO ENSURE THAT THE CONTRACTOR PROVIDES
ADEQUATE SERVICE UNDER THE CONTRACT. BY THEIR VERY NATURE, MINIMUM
MANNING LEVELS RELATE TO EMPLOYEES WHO ARE ACTUALLY ON DUTY AND NOT
THOSE WHO ARE UNAVAILABLE FOR WORK. THE MANNING CHARTS ACCOMPANYING
BOTH IMS'S AND PALMETTO'S BIDS INDICATED IN VARYING DEGREES THAT LESS
THAN THE FULL NUMBER OF EMPLOYEES REQUIRED TO BE ON DUTY WOULD IN FACT
BE ON DUTY. ALTHOUGH IT IS NOT CLEAR PRECISELY WHY THE MANNING CHARTS
WERE REQUIRED (THE IFB SUGGESTS BOTH THAT A FAILURE TO SUBMIT A MANNING
CHART WITH THE BID WOULD RESULT IN A NONRESPONSIVE BID AND THAT THE
MANNING CHARTS WOULD BE USED IN DETERMINING A BIDDER'S RESPONSIBILITY),
WE HAVE HELD THAT INFORMATION SUBMITTED WITH A BID WHICH IS INTENDED TO
REFLECT ON BIDDER RESPONSIBILITY MAY NONETHELESS RENDER A BID
NONRESPONSIVE WHEN IT INDICATES THAT THE BIDDER DOES NOT INTEND TO
COMPLY WITH A MATERIAL IFB REQUIREMENT. TEST DRILLING SERVICE CO.,
B-189682, SEPTEMBER 15, 1977, 77-2 CPD 193. THUS, EVEN IF THE MANNING
CHARTS WERE INTENDED FOR USE IN DETERMINING BIDDER RESPONSIBILITY, SINCE
HERE THOSE MANNING CHARTS REFLECTED DEVIATIONS FROM THE IFB
REQUIREMENTS, WE BELIEVE THE CONTRACTING OFFICER PROPERLY VIEWED THE
BIDS AS NONRESPONSIVE.
WE DO NOT BELIEVE IT IS NECESSARY TO ADDRESS INDUSTRIAL'S OBJECTIONS
CONCERNING THE ARMY'S DECISION NOT TO RENEW ITS CONTRACT. UNDER DAR
SEC. 1-1502 (B)(I), OPTION PROVISIONS ARE NOT TO BE INCLUDED IN
SOLICITATIONS IF "THE SUPPLIES OR SERVICES BEING PURCHASED ARE READILY
AVAILABLE ON THE OPEN MARKET." IN THIS REGARD, IT IS WELL ESTABLISHED
THAT THE FOOD SERVICES INDUSTRY IS A HIGHLY COMPETITIVE ONE IN WHICH A
LARGE NUMBER OF FIRMS COMPETE FOR FOOD SERVICES CONTRACTS WITH VARIOUS
GOVERNMENT ACTIVITIES. CONSEQUENTLY, WE DO NOT BELIEVE THAT ARMY
PROPERLY INCLUDED OPTION PROVISIONS IN THE IFB AND ANY EXERCISE OF THOSE
OPTION PROVISIONS WOULD BE IMPROPER. SEE SAFEMASTERS COMPANY, INC., 58
COMP. GEN. 225 (1979), 79-1 CPD 38.
FINALLY, WITH RESPECT TO PALMETTO'S REQUEST THAT WE DIRECT THE ARMY
TO REEXAMINE THE USEFULNESS OF DETAILED MINIMUM MANNING REQUIREMENTS IN
VIEW OF THEIR ALLEGED ANTICOMPETITIVE IMPACT ON FOOD SERVICES CONTRACTS,
WE NOTE THAT WE HAVE PREVIOUSLY FOUND THE USE OF MINIMUM MANNING
REQUIREMENTS IN ADVERTISED PROCUREMENTS TO BE PERMISSIBLE, SEE
INDUSTRIAL MAINTENANCE SERVICES, INC., ET AL., B-189303, B-189425,
DECEMBER 15, 1977, 77-2 CPD 466, AND IN THE ABSENCE OF EVIDENCE CLEARLY
ESTABLISHING A SUBSTANTIAL ADVERSE IMPACT ON COMPETITION, WE SEE NO
REASON TO QUESTION THE CONTINUED USE OF MINIMUM MANNING REQUIREMENTS
WHICH THE AGENCY BELIEVES IS NEEDED TO ENSURE ADEQUATE SERVICE.
WE DO AGREE THAT THE IFB SHOULD HAVE BEEN CLEARER, HOWEVER, TO ENSURE
THAT ALL BIDDERS UNDERSTOOD EXACTLY WHAT THEIR OBLIGATIONS WOULD BE
UNDER THE MINIMUM MANNING REQUIREMENTS AND WE ARE SO ADVISING THE
SECRETARY OF THE ARMY. WE ARE ALSO ADVISING THE SECRETARY THAT FUTURE
SOLICITATIONS FOR FOOD SERVICES SHOULD NOT CONTAIN OPTION PROVISIONS IN
ACCORDANCE WITH DAR SEC. 1-1502 (B)(I).
THE PROTESTS ARE DENIED.
B-194381, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PAYMENT OF AN EXTRA DAY'S PER DIEM IS AUTHORIZED TO A MEMBER OF THE
UNIFORMED SERVICES WHO MAY BE CONSIDERED TO BE IN A TRAVEL STATUS FOR
THE EXTRA TIME REQUIRED TO TAKE ADVANTAGE OF A REDUCED EXCURSION AIR
FARE SINCE THE INCREASED TRAVEL TIME DID NOT INTERFERE WITH THE
PERFORMANCE OF HIS OFFICIAL DUTIES BECAUSE HE TRAVELED ON A NONWORK DAY,
IT WAS NOT SOLELY FOR PERSONAL CONVENIENCE, AND THE COST OF THE EXTRA
PER DIEM WAS MORE THAN OFFSET BY THE SAVINGS TO THE GOVERNMENT THROUGH
USE OF THE EXCURSION FARE.
DR. ALEXANDER W. TEASS, USPHS:
THE QUESTION PRESENTED UPON A REQUEST FOR AN ADVANCE DECISION FROM
THE PUBLIC HEALTH SERVICE IS WHETHER AN EXTRA DAY'S PER DIEM MAY BE PAID
TO A PUBLIC HEALTH SERVICE OFFICER WHO DEPARTED A DAY EARLY ON TEMPORARY
DUTY TO TAKE ADVANTAGE OF AN EXCURSION AIR FARE WHICH RESULTS IN A NET
SAVING TO THE GOVERNMENT. THE QUESTION IS ANSWERED YES.
THE REQUEST WAS PRESENTED BY THE DIRECTOR, FINANCIAL MANAGEMENT
OFFICE, PUBLIC HEALTH SERVICE, CENTER FOR DISEASE CONTROL, ATLANTA,
GEORGIA.
ALEXANDER W. TEASS, PH. D., A COMMISSIONED OFFICER OF THE PUBLIC
HEALTH SERVICE, WAS AUTHORIZED TRAVEL FOR TEMPORARY DUTY WITH
APPROXIMATE TRAVEL DATES OF SEPTEMBER 10 AND SEPTEMBER 15, 1978, FOR
DEPARTURE AND RETURN. BY DEPARTING ON SEPTEMBER 9, SATURDAY (A NON-WORK
DAY), DR. TEASS EFFECTED A SAVINGS OF $63 IN AIR FARE BUT INCURRED AN
ADDITIONAL DAY OF TRAVEL TIME FOR WHICH HE CLAIMS $35 PER DIEM.
AS A COMMISSIONED OFFICER OF THE PUBLIC HEALTH SERVICE, DR. TEASS'
TRAVEL ALLOWANCES ARE PROVIDED UNDER 37 U.S.C. 404 (1976) AND VOLUME 1
OF THE JOINT TRAVEL REGULATIONS (1 JTR).
THE PERTINENT STATUTE, 37 U.S.C. 404(A)(1), PROVIDES THAT UNDER
REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A MEMBER OF THE
UNIFORMED SERVICES IS ENTITLED TO TRAVEL AND TRANSPORTATION ALLOWANCES
FOR TRAVEL PERFORMED UNDER ORDERS UPON A CHANGE OF PERMANENT STATION OR
WHEN AWAY FROM HIS DESIGNATED POST OF DUTY. IN ACCORD WITH THIS
AUTHORITY, PARAGRAPH M3050-1, 1 JTR, PROVIDES THAT MEMBERS ARE ENTITLED
TO TRAVEL AND TRANSPORTATION ALLOWANCES ONLY WHILE ACTUALLY IN A "TRAVEL
STATUS" AND THAT THEY SHALL BE DEEMED TO BE IN SUCH STATUS WHILE
PERFORMING TRAVEL AWAY FROM THEIR PERMANENT DUTY STATION, UPON PUBLIC
BUSINESS, PURSUANT TO COMPETENT TRAVEL ORDERS, INCLUDING NECESSARY
DELAYS EN ROUTE INCIDENT TO THE MODE OF TRAVEL, AND PERIODS OF NECESSARY
TEMPORARY DUTY.
IT IS WELL ESTABLISHED THAT LEGAL RIGHTS AND LIABILITIES IN REGARD TO
PER DIEM AND OTHER TRAVEL ALLOWANCES VEST AS AND WHEN THE TRAVEL IS
PERFORMED BY THE MEMBER UNDER HIS ORDERS. ALSO, ORDERS MAY NOT BE
REVOKED OR MODIFIED RETROACTIVELY SO AS TO INCREASE OR DECREASE THE
RIGHTS WHICH HAVE BECOME FIXED UNDER THE APPLICABLE STATUTES OR
REGULATIONS UNLESS ERROR IS APPARENT ON THE FACE OF THE ORDERS, OR ALL
THE FACTS AND CIRCUMSTANCES CLEARLY DEMONSTRATE THAT SOME PROVISION
PREVIOUSLY DETERMINED AND DEFINITELY INTENDED HAD BEEN OMITTED THROUGH
ERROR OR INADVERTENCE IN PREPARING THE ORDERS. 23 COMP. GEN. 713, 716
(1944); 24 ID. 439 (1944). SEE ALSO 44 COMP. GEN. 405 (1965).
IT LONG HAS BEEN THE GENERAL RULE THAT ORDERS DIRECTING TRAVEL OR
TEMPORARY DUTY FOR AN APPROXIMATE PERIOD OF TIME DO NOT CONSTITUTE
AUTHORITY FOR THE PAYMENT OF TRAVEL ALLOWANCES FOR A MATERIALLY LONGER
PERIOD IN THE ABSENCE OF ADDITIONAL COMPETENT ORDERS EXTENDING THE
PERIOD. B-175250, JUNE 1, 1972. SEE ALSO 38 COMP. GEN. 513 (1959).
OUR DECISION B-167567, AUGUST 18, 1969, REFERRED TO IN THE SUBMISSION
INVOLVED THE CLAIM OF A CIVILIAN EMPLOYEE OF THE GOVERNMENT WHOSE TRAVEL
ORDERS SPECIFICALLY AUTHORIZED HIM EXTRA TEMPORARY DUTY TIME TO SECURE
AN EXCURSION FARE SINCE THE SAVINGS IN TRAVEL COSTS WOULD MORE THAN
OFFSET THE INCREASED PER DIEM COST. IN THAT CASE WE AUTHORIZED PAYMENT,
NOTING THAT THE EMPLOYEE HAD ACTED PRUDENTLY AND THE TRAVEL ORDERS HAD
PROVIDED FOR THE EXTRA PER DIEM. THE DIRECTOR, FINANCIAL MANAGEMENT
OFFICE, SUGGESTS THAT THAT DECISION COULD BE APPLIED IN THIS CASE SINCE
DR. TEASS ACTED PRUDENTLY, TRAVELED ON A NON-WORK DAY, AND SAVED THE
GOVERNMENT MONEY. HE ALSO INDICATES THAT IT WAS NOT KNOWN WHEN THE
TRAVEL ORDERS WERE ISSUED THAT THE EXCURSION FARE WAS AVAILABLE. THE
IMPLICATION IS THAT HAD IT BEEN KNOWN THE ORDERS WOULD HAVE AUTHORIZED
TRAVEL A DAY EARLIER.
THE LATITUDE WHICH IS PROVIDED TO CIVILIAN EMPLOYEES OF THE FEDERAL
GOVERNMENT IN THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7) (MAY 1973) TO
TAKE ADVANTAGE OF SPECIAL OR REDUCED FARES WHEN IT CAN BE DETERMINED IN
ADVANCE THAT SUCH TRAVEL IS BENEFICIAL TO THE GOVERNMENT, PAR. 1-3.4B OF
THE FTR, HAS NOT BEEN SPECIFICALLY SET FORTH IN 1 JTR FOR MEMBERS OF THE
UNIFORMED SERVICES. HOWEVER, IT IS OUR VIEW THAT SIMILAR RULES SHOULD
APPLY TO MEMBERS OF THE UNIFORMED SERVICES.
THE TRAVEL TIME REQUIRED TO TAKE ADVANTAGE OF SPECIAL OR REDUCED
FARES MUST BE VIEWED IN LIGHT OF THE SAVINGS TO THE GOVERNMENT. IF IT
CAN BE SHOWN THAT THE INCREASED TRAVEL TIME WILL NOT INTERFERE WITH THE
PERFORMANCE OF OFFICIAL BUSINESS, IS NOT SOLELY FOR PERSONAL
CONVENIENCE, AND THE COST OF THE EXTRA PER DIEM WHEN ADDED TO THE COST
OF THE SPECIAL OR REDUCED FARES DOES NOT EXCEED WHAT THE GOVERNMENT
WOULD HAVE BEEN REQUIRED TO PAY HAD THE SPECIAL OR REDUCED FARES NOT
BEEN USED, THE MEMBER SHOULD BE CONSIDERED TO BE IN A TRAVEL STATUS FOR
THE REQUIRED EXTRA TIME. ORDINARILY SUCH A DETERMINATION SHOULD BE MADE
IN ADVANCE AND STATED IN THE TRAVEL ORDER.
IN THE PRESENT CASE DEPARTURE OF DR. TEASS, 1 DAY EARLY ON SEPTEMBER
9 (A NON-WORK DAY FOR HIM) TO TAKE ADVANTAGE OF AN EXCURSION FARE WAS
NOT UNREASONABLE SINCE THERE IS NO SHOWING THAT THE EARLY DEPARTURE WAS
SOLELY FOR HIS PERSONAL CONVENIENCE NOR DID IT INTERFERE WITH HIS
OFFICIAL DUTIES. FROM THE GOVERNMENT'S STAND-POINT HE ACTED PRUDENTLY
SINCE THE EARLY DEPARTURE SAVED THE GOVERNMENT MONEY.
ACCORDINGLY, THE VOUCHER SUBMITTED MAY BE CERTIFIED FOR PAYMENT IF
OTHERWISE CORRECT.
B-194471, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE EVENTUAL HIGH AGGREGATE BIDDER DECREASED PRICE ON ONE TIMBER
SPECIES (BUT NOT BELOW WRITTEN PRICE BID) DURING ORAL AUCTION CONTRARY
TO PROVISION IN FOREST SERVICE MANUAL, SINCE THIS DID NOT PREJUDICE
OTHER BIDDERS AND REJECTION OF ALL BIDS AND RESOLICITATION WOULD NOT
BENEFIT COMPETITION, AWARD, IF OTHERWISE PROPER, SHOULD BE MADE TO HIGH
BIDDER.
LAKESIDE CORPORATION; MCGREW BROTHERS SAW MILLS, INC.:
THE FOREST SERVICE, WINEMA NATIONAL FOREST (REGION 6), CONDUCTED A
TIMBER SALE ON MARCH 19, 1979. ON THAT DATE, THE WRITTEN BIDS RECEIVED
ON THE SALE WERE OPENED AND IMMEDIATELY THEREAFTER A SALES AUCTION WAS
CONDUCTED AMONG THOSE BIDDERS WHO HAD SUBMITTED ACCEPTABLE WRITTEN BIDS
AND WHO DESIRED TO PARTICIPATE IN THE AUCTION. EIGHT BIDDERS SUBMITTED
WRITTEN BIDS; THREE OF THOSE BIDDERS PARTICIPATED IN THE AUCTION.
DURING THE AUCTION, MCGREW BROTHERS SAW MILLS, INC. (MCGREW), DECREASED
ITS BID PRICE ON ONE OF THE THREE TIMBER SPECIES BEING OFFERED, ALTHOUGH
THE DECREASE WAS NOT BELOW ITS ORIGINAL WRITTEN BID PRICE AND THE
RESULTING MCGREW AGGREGATE PRICE ON ALL THREE SPECIES WAS GREATER THAN
THE PREVIOUS AGGREGATE PRICE IT HAD BID. THIS CHANGE WAS REMARKED UPON
AT THAT TIME, BUT WHEN THE AUCTION PARTICIPANTS WERE ASKED IF THEY
OBJECTED TO THIS MANNER OF BIDDING NO OBJECTIONS WERE MADE. AT LEAST
ONCE DURING THE LATER BIDDING ANOTHER FIRM DECREASED ITS BID PRICE ON
ONE SPECIES, AND AGAIN NO OBJECTIONS WERE RAISED. MCGREW EVENTUALLY WON
THE AUCTION BY SUBMITTING THE HIGHEST AGGREGATE PRICE FOR ALL THREE
SPECIES.
ON MARCH 23, THE LAKESIDE CORPORATION (LAKESIDE), A BIDDER WHO HAD
NOT PARTICIPATED IN THE AUCTION PORTION OF THE PROCUREMENT, PROTESTED
AGAINST THE AWARD OF ANY CONTRACT BECAUSE OF ALLEGED IMPROPER BIDDING
PROCEDURES. THE REASON FOR THE PROTEST IS A PROVISION (SEC. 2431.59 -
2, TITLE 2400) IN THAT PORTION OF THE FOREST SERVICE MANUAL SPECIFICALLY
REGARDING TIMBER SALES IN THE PACIFIC NORTHWEST REGION (IN WHICH THE
WINEMA NATIONAL FOREST IS LOCATED) WHICH READS:
"AN ORAL AUCTION BID CANNOT BE ACCEPTED UNLESS IT RESULTS IN A HIGHER
TOTAL BID THAN THE PREVIOUS BID. EVEN THOUGH HIS TOTAL BID MAY BE
HIGHER THAN THE PREVIOUS BID, A BIDDER MAY NOT REDUCE HIS BID FOR A
SPECIES OR SPECIES GROUP WHILE RAISING THE BID ON ANOTHER SPECIES OR
SPECIES GROUP."
MCGREW HAS ENTERED A COUNTER PROTEST AGAINST THE CANCELLATION OF THE
SALE.
THE FOREST SERVICE HAS MADE NO FINAL DECISION ON THE ISSUE. IT DOES
BELIEVE FOR THREE REASONS THAT IT HAS THE AUTHORITY TO REJECT ALL BIDS
UNDER THE CIRCUMSTANCES AND TO RESOLICIT THE SALE. FIRST, IT IS
BELIEVED THAT UNDER 36 C.F.R. SEC. 223.7(A) (1978) THE SECRETARY OF
AGRICULTURE (AND, THROUGH A DELEGATION, THE REGIONAL FORESTER) HAS THE
AUTHORITY TO REJECT ALL BIDS ON TIMBER SALES AS LONG AS THE REJECTION IS
NOT ARBITRARY OR CAPRICIOUS. SECOND, THE FOREST SERVICE MANUAL, WHILE
NOT HAVING THE FORCE OF LAW, MUST BE GIVEN SUBSTANTIAL WEIGHT AND TO
IGNORE ITS RULES ON ORAL AUCTIONS WOULD MAKE THESE RULES MEANINGLESS.
FINALLY, IT IS BELIEVED THAT TO PERMIT BIDDING IN THE MANNER THAT
OCCURRED HERE WOULD BE PREJUDICIAL TO OTHER BIDDERS SINCE IT COULD
CREATE CONFUSION IN THE BIDDING PROCESS.
AS REGARDS THE FIRST CONTENTION, THE CANCELLATION OF ALL BIDS AND THE
RESOLICITATION OF A PROCUREMENT MAY BE DONE ONLY IF A COMPELLING REASON
FOR SUCH A COURSE OF ACTION EXISTS. THE INTERMOUNTAIN COMPANY,
B-182794, JULY 8, 1975, 75-2 CPD 19. AS REGARDS THE SECOND AND THIRD
CONTENTIONS OF THE FOREST SERVICE, NAMELY, THE REASONS WHICH ARE TO
CONSTITUTE THAT "COMPELLING REASON," WE DO NOT BELIEVE THESE ARE
SUFFICIENT TO PERMIT CANCELLATION IN THIS INSTANCE. TO CONSTITUTE A
COMPELLING REASON, THERE SHOULD BE A SHOWING THAT (1) BIDDERS WERE
PREJUDICED BY THE DEFECTIVE PROCEDURE AND (2) COMPETITION WAS AFFECTED.
DICKSON FOREST PRODUCTS, INCORPORATED, B-191906(1), NOVEMBER 1, 1978,
78-2 CPD 314.
AS REGARDS THE LATTER FACTOR, THE MANNER OF BIDDING ADOPTED HERE HAD
NO AFFECT ON COMPETITION - IT DID NOT STOP PARTICIPATION IN THE AUCTION
AND IT WAS NOT OBJECTED TO BY THE PARTICIPANTS. IN FACT, AS NOTED
ABOVE, ANOTHER OF THE THREE PARTICIPANTS IN THE AUCTION LATER FOLLOWED
MCGREW'S PROCEDURE. THE THIRD PARTICIPANT RECOGNIZED THE PROCEDURE AS
THE KIND USED IN CALIFORNIA. THE FINAL ROUNDS OF THE AUCTION FINISHED
WITH THE PARTICIPANTS BIDDING INCREASING PRICES. THUS, IT IS NOT
APPARENT THAT THE MANNER OF BIDDING WAS CONFUSING TO ANY OF THE
PARTICIPANTS OR THAT ANY BIDDER DID NOT HAVE AN OPPORTUNITY TO OFFER AN
INTENDED BID.
AS REGARDS THE FIRST FACTOR, FOR THE REASONS STATED ABOVE, NO
PREJUDICE TO BIDDERS OCCURRED. FURTHER, MCGREW SUBMITTED THE HIGHEST
WRITTEN AND ORAL BID. IF ANY POTENTIAL PREJUDICE EXISTS, IT WOULD BE
THE PREJUDICE THAT WOULD RESULT TO MCGREW IF ALL BIDS WERE REJECTED AND
THE SALE WERE RESOLICITED AFTER MCGREW WAS SUCCESSFUL IN THE PRIOR
AUCTION. WHILE WE APPRECIATE THE CONCERN OF THE FOREST SERVICE IN
HAVING ITS AUCTION POLICY FOLLOWED, TO DO SO IN THIS CASE AT THIS TIME
WOULD BE EMPHASIZING FORM OVER SUBSTANCE.
THEREFORE, IF THE MCGREW BID IS OTHERWISE ACCEPTABLE, AWARD SHOULD BE
MADE TO MCGREW.
ACCORDINGLY, THE MCGREW PROTEST IS SUSTAINED AND THE LAKESIDE PROTEST
IS DENIED.
B-194523, AUG 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST THAT SPECIFICATIONS WERE PROPRIETARY AND IN VIOLATION OF
UNIFORM BUILDING CODE, FILED AFTER BID OPENING, IS UNTIMELY BECAUSE
THESE ALLEGED PROBLEMS WERE APPARENT FROM FACE OF SOLICITATION AND
PROTEST BASED ON SUCH ALLEGED DEFECTS MUST BE FILED PRIOR TO BID
OPENING.
2. PROTESTER ALLEGED THAT AWARDEE WAS PERMITTED TO MODIFY ITS
PRODUCT AND DEVIATE FROM SPECIFICATIONS, WHILE PROTESTER'S BID WAS NOT
CONSIDERED BECAUSE OF DEVIATION. AGENCY HAS DENIED ALLEGATION AND
PROTESTER HAS PRESENTED NO EVIDENCE TO PROVE ITS ALLEGATION. THEREFORE,
PROTESTER HAS FAILED TO CARRY BURDEN OF AFFIRMATIVELY PROVING
ALLEGATION.
NGC INVESTMENT & DEVELOPMENT CORPORATION, D.B.A. NIEMAN GLASS &
PAINT:
NGC INVESTMENT & DEVELOPMENT CORPORATION, D.B.A. NIEMAN GLASS & PAINT
(NGC), HAS PROTESTED THE AWARD OF A CONTRACT TO ALUMINUM MARTS, INC.,
FOR WINDOW REPLACEMENT AT ST. PAUL ISLAND, ALASKA, UNDER INVITATION FOR
BIDS (IFB) NO. NASO-279-00131, ISSUED BY THE NATIONAL OCEANIC AND
ATMOSPHERIC ADMINISTRATION (NOAA), DEPARTMENT OF COMMERCE.
NGC HAS ALLEGED THAT THE SPECIFICATIONS ARE PROPRIETARY AND THAT THEY
DO NOT MEET THE UNIFORM BUILDING CODE (UBC) PROVISIONS CONCERNING
EMERGENCY EGRESS. NGC ALSO ALLEGES THAT ALUMINUM MARTS IS NOW UNFAIRLY
BEING PERMITTED TO ALTER ITS WINDOW TO DEVIATE FROM THE SPECIFICATIONS,
WHILE NGC'S ALTERNATE BID WAS NOT CONSIDERED, EVEN THOUGH IT WAS LOW,
BECAUSE IT DEVIATED FROM THE SPECIFICATIONS.
NGC'S COMPLAINTS CONCERNING THE PROPRIETARY NATURE OF THE
SPECIFICATIONS AND THEIR ALLEGED FAILURE TO MEET UBC REQUIREMENTS ARE
UNTIMELY AND WILL NOT BE CONSIDERED. THESE ALLEGED IMPROPRIETIES WERE
APPARENT FROM THE FACE OF THE SOLICITATION. SECTION 20.2(B) (1) OF OUR
BID PROTEST PROCEDURES, 4 C.F.R. SEC. 20.2(B)(1) (1979), REQUIRES
PROTEST BASED ON SUCH IMPROPRIETIES TO BE FILED PRIOR TO THE DATE OF BID
OPENING. HERE, BID OPENING WAS MARCH 21, 1979, AND NGC'S PROTEST WAS
FILED ON APRIL 3, 1979.
REGARDING NGC'S ALLEGATION THAT ALUMINUM MARTS IS BEING PERMITTED TO
DEVIATE FROM THE SPECIFICATIONS BY MODIFYING ITS WINDOWS, NOAA STATED IN
ITS RESPONSE THAT ALUMINUM MARTS PRESENTED ITS PRODUCT FOR INSPECTION
PRIOR TO AWARD, THAT THE PRODUCT MET THE SPECIFICATIONS, AND THAT
ALUMINUM MARTS WILL NOT BE MODIFYING ITS WINDOWS. IN LETTERS OF MAY 8
AND JUNE 13, 1979, NGC DID NOT DISPUTE THIS ASSERTION. CONSEQUENTLY, WE
ASSUME THAT NGC NO LONGER BELIEVES THAT ALUMINUM MARTS IS BEING
PERMITTED TO MODIFY ITS WINDOW. EVEN IF NGC STILL MAINTAINS THAT
ALLEGATION, WHERE THE ONLY EVIDENCE WITH RESPECT TO A DISPUTED QUESTION
OF FACT CONSISTS OF CONTRADICTORY ASSERTIONS BY THE PROTESTER AND THE
AGENCY, THE PROTESTER HAS FAILED TO CARRY THE BURDEN OF AFFIRMATIVELY
PROVING ITS ALLEGATION. AERO-DRI CORPORATION, B-192274, OCTOBER 26,
1978, 78-2 CPD 304.
ACCORDINGLY, THE PROTEST IS DENIED.
B-193445, AUG 1, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. COMMON CARRIER IS NOT LIABLE FOR COSTS OF X-RAYING SHIPMENT OF
ROCKET MOTORS AT DESTINATION TO DETERMINE WHETHER THEY WERE DAMAGED
WHILE IN POSSESSION OF COMMON CARRIER FOR TRANSPORTATION.
2. SETTLEMENTS OF COMPTROLLER GENERAL ARE NOT DECISIONS AND ARE NOT
CONSIDERED PRECEDENTS FOR FUTURE DISBURSEMENTS OF PUBLIC MONEY.
3. UNDER GAO REGULATIONS REQUESTS FOR RECONSIDERATION OF CLAIMS
DIVISION SETTLEMENTS MUST BE SUBMITTED BY HEAD OF AGENCY CONCERNED.
DEPARTMENT OF THE AIR FORCE:
THIS DECISION INVOLVES THE LIABILITY OF A COMMON CARRIER FOR THE
COSTS OF X-RAYING A SHIPMENT OF ROCKET MOTORS AT DESTINATION TO
DETERMINE WHETHER THEY WERE DAMAGED WHILE IN THE POSSESSION OF THE
COMMON CARRIER FOR TRANSPORTATION. IT RESPONDS TO TWO LETTERS DATED
OCTOBER 4, 1978, FILE ACFTF/7654, FROM THE HEADQUARTERS AIR FORCE
ACCOUNTING AND FINANCE CENTER (FINANCE CENTER) REQUESTING
RECONSIDERATION OF TWO CERTIFICATES OF SETTLEMENT DATED SEPTEMBER 8,
1978, IN WHICH OUR CLAIMS DIVISION ALLOWED TWO CLAIMS OF PACIFIC
INTERMOUNTAIN EXPRESS (PIE) INVOLVING THOSE X-RAY COSTS, EACH FOR
$3,821.34.
WE AFFIRM THE TWO CLAIMS DIVISION SETTLEMENTS AND DECIDE THAT THE
COMMON CARRIER IS NOT LIABLE FOR THE X-RAY COSTS. WE ALSO ADVISE THE
SECRETARY OF THE AIR FORCE THAT UNDER OUR REGULATIONS REQUESTS FOR
RECONSIDERATION OF CLAIMS DIVISION SETTLEMENTS MUST BE SUBMITTED BY THE
HEAD OF THE AGENCY CONCERNED.
IN DECEMBER 1974, GOVERNMENT DRIVERS OPERATING GOVERNMENT TRACTORS
TRANSPORTED JET THRUST UNITS (ROCKET MOTORS) ON GOVERNMENT-OWNED,
MULTI-STAGE TRAILERS EQUIPPED WITH AIR BAG SUSPENSION SYSTEMS FROM
MCCLELLAN AIR FORCE BASE, CALIFORNIA, TO SACRAMENTO, CALIFORNIA, WHERE
THE MOTORS WERE DELIVERED ON THE TRAILERS TO THE FACILITIES OF PIE, A
MOTOR COMMON CARRIER, FOR DELIVERY TO HILL AIR FORCE, UTAH. FOUR
MOTORS, WEIGHING 108,000 POUNDS, WERE DELIVERED TO THE CARRIER ON
GOVERNMENT BILL OF LADING (GBL) NO. K-5155422 ON DECEMBER 12, 1974, AND
FOUR, WEIGHING 110,000 POUNDS, WERE DELIVERED ON GBL NO. K-5155459 ON
DECEMBER 13, 1974.
THE ROCKET MOTORS, EACH VALUED AT OVER $211,000, ARE DELICATE UNITS
CONTAINING PROPELLANTS. EACH UNIT BECOMES A COMPONENT OF A MISSILE,
WHICH WHEN ASSEMBLED IS VALUED AT MILLIONS OF DOLLARS. IF THE
PROPELLANT ENCASEMENT IS IN A CRACKED CONDITION WHEN FIRED, THE ENTIRE
MISSILE IS DESTROYED. BECAUSE OF THEIR SUSCEPTIBILITY TO DAMAGE DURING
MOVEMENT, SPECIAL TRAILERS WITH AIR BAG SUSPENSION SYSTEMS ARE FURNISHED
BY THE GOVERNMENT TO TRANSPORT THE UNITS ON THE HIGHWAY. THE AIR BAGS
WHEN PROPERLY INFLATED ARE INTENDED TO CUSHION THE UNITS FROM ROAD
SHOCKS.
THE AIR FORCE HAS INFORMED CARRIERS OF THE DELICATE NATURE OF THE
ROCKET MOTORS, AND INSTRUCTS CARRIERS' PERSONNEL HOW TO PROPERLY INFLATE
THE SPECIAL TRAILER SUSPENSION SYSTEM.
WHEN THESE UNITS ARRIVED AT DESTINATION THE AIR BAGS ON THE TRAILERS
WERE FLAT. TO ASSEMBLE THE UNITS WITH THE MISSILES UNDER THESE
CIRCUMSTANCES WOULD JEOPARDIZE THE MISSILES UPON FIRING. THE ONLY
METHOD OF INSPECTING THE UNITS FOR DAMAGE IS BY X-RAY; THE UNITS
HANDLED BY PIE WERE X-RAYED BY THE GOVERNMENT AT A COST OF $3,821.34 FOR
EACH SHIPMENT. NO DAMAGE TO THE UNITS WAS DISCOVERED.
FOR EACH SHIPMENT THE FINANCE CENTER SET OFF $3,821.34 FROM FREIGHT
CHARGES OTHERWISE DUE THE CARRIER TO RECOVER EXPENSES INCURRED IN
X-RAYING THE MOTORS, WHICH THE FINANCE CENTER ALLEGES WAS REQUIRED BY
THE FAILURE OF PIE TO MAINTAIN AIR IN THE TRAILERS' SUSPENSION BAGS
DURING TRANSPORTATION. PIE'S CLAIMS FOR $3,821.34 ON EACH SHIPMENT WERE
ALLOWED IN THE CERTIFICATES OF SETTLEMENT OF SEPTEMBER 8, 1978.
PIE CONTENDS IN EFFECT THAT EVEN IF THE CARGO WAS IN GOOD CONDITION
WITH AIR BAGS INFLATED WHEN THE TRAILERS WERE DELIVERED TO THE CARRIER
AT ORIGIN, THERE IS NO CARRIER LIABILITY FOR THE EXPENSES OF INSPECTION
WHEN THE SHIPMENTS WERE DELIVERED AT DESTINATION WITH THE AIR BAGS FLAT.
WE MUST AGREE WITH PIE.
THE RULE OF A COMMON CARRIER'S STRICT LIABILITY, THAT IS, LIABILITY
FOR LOSS OR DAMAGE WITHOUT A SHOWING OF NEGLIGENCE, HAS NO APPLICABILITY
TO THE FACTS OF THIS CASE. THE ABSENCE OF INJURY OR HARM TO THE UNITS
IS FATAL TO ANY CLAIM FOR COMPENSATORY DAMAGES. EVEN PROOF OF THE
CARRIER'S NEGLIGENCE IN FAILING TO MAINTAIN THE AIR BAGS IN A INFLATED
CONDITION DURING TRANSPORTATION AND PROOF THAT THE CARRIER KNEW OF THE
DELICATE NATURE OF THE CARGO WOULD NOT AID THE GOVERNMENT IN AN ACTION
SEEKING COMPENSATORY DAMAGES.
LITIGATION SEEKING DAMAGES AGAINST PIE WOULD REQUIRE THE GOVERNMENT
TO ESTABLISH A PRIMA FACIE CASE OF CARRIER LIABILITY. THE SUPREME COURT
IN MISSOURI PACIFIC R.R. V. ELMORE & STAHL, 377 U.S. 134 (1964)
ARTICULATED THE ELEMENTS NECESSARY FOR A PRIMA FACIE CASE. AMONG OTHER
ELEMENTS, IT IS ESSENTIAL TO SHOW DELIVERY OF THE PROPERTY AT
DESTINATION BY THE CARRIER IN A DAMAGED CONDITION. THE RESULTS OF THE
X-RAY INSPECTION, INSTEAD OF ESTABLISHING THE CARRIER'S LIABILITY,
ABSOLVE THE CARRIER. THE INSPECTION FOUND NO DAMAGE.
A BASIC PRINCIPLE UNDERLYING COMMON LAW REMEDIES IS THAT THEY AFFORD
ONLY COMPENSATION FOR THE INJURY SUFFERED. ILLINOIS CENTRAL R.R. V.
CRAIL, 281 U.S. 57 (1930). UNDER SECTION 20(11) OF THE INTERSTATE
COMMERCE ACT, 49 U.S.C. 20(11), MADE APPLICABLE TO MOTOR CARRIERS BY
SECTION 217 OF THE ACT, 49 U.S.C. 317, A COMMON CARRIER IS LIABLE "FOR
THE FULL ACTUAL LOSS, DAMAGE OR INJURY ***." MISSOURI PACIFIC R.R. V.
ELMORE & STAHL, SUPRA. ACTUAL DAMAGE IS SYNONYMOUS WITH COMPENSATION
FOR PURPOSES OF THE COMMON LAW REMEDY. 25 C.J.S. 2D DAMAGES SEC. 2.
THE LEGAL CONCEPT OF ACTUAL LOSS OR DAMAGE UNDER SECTION 20(11) (IN
TERMS OF INJURY AND HARM) WAS CLARIFIED IN MISSOURI PACIFIC R.R. V. H.
ROUW CO., 258 F.2D 445 (5TH CIR. 1958). THE COURT THERE EMPHASIZED THAT
THE "MARKET VALUE RULE" DOVE-TAILS WITH THE RULE PERMITTING RECOVERY OF
COMPENSATORY DAMAGES ONLY. 258 F.2D AT 447. THE "MARKET VALUE RULE"
REFERS TO THE MEASURE OF DAMAGES. THE MEASURE OF DAMAGES, WITHIN THE
MEANING OF SECTION 20(11) OF THE ACT, IS THE DIFFERENCE BETWEEN THE
VALUE OF THE PROPERTY IN THE CONDITION IN WHICH THE PROPERTY SHOULD HAVE
ARRIVED AND ITS MARKET VALUE IN THE CONDITION IT DID ARRIVE. GULF,
COLORADO & SANTA FE RY. V. TEXAS PACKING CO., 244 U.S. 31, 37 (1917).
THERE IS NO WAY TO DETERMINE THE MEASURE OF DAMAGES HERE BECAUSE THE
FINANCE CENTER HAS SHOWN NO INJURY OR HARM TO THE ROCKET MOTORS.
THE FACT THAT PIE HAD KNOWLEDGE OF THE DELICATE NATURE OF THE CARGO
AND THE NEED FOR KEEPING THE AIR BAGS INFLATED RELATES TO THE QUESTION
OF WHETHER THE CARRIER HAD A LEGAL DUTY TO MAINTAIN THE SUSPENSION
SYSTEM AND WHETHER THE DUTY WAS BREACHED, THEREBY INCURRING A LEGAL
WRONG. WE HAVE RESERVATIONS OVER ANY CONTENTION THAT SUCH A LEGAL DUTY,
THE BREACH OF WHICH WOULD CONSTITUTE A LEGAL WRONG, COULD EXIST IN THE
ABSENCE OF A SPECIAL COVENANT IN THE CONTRACT OF CARRIAGE SHOWING THAT
THE CARRIER, IN EXCHANGE FOR ADDITIONAL CONSIDERATION, SPECIALLY
PROMISED TO KEEP THE AIR BAGS INFLATED. COMPARE JOHNSON V. BEKINS
MOVING & STORAGE CO., 389 P.2D 109 (IDAHO, 1964), CERT. DEN. 379 U.S.
913. BUT EVEN IF A LEGAL WRONG COULD BE ESTABLISHED, THE GOVERNMENT
WOULD BE IN NO BETTER LEGAL POSITION UNDER THE FACTS OF THIS CASE
BECAUSE TO RECOVER DAMAGES (MONEY), IT MUST BE SHOWN THAT DAMAGE (INJURY
OR HARM) RESULTED FROM THE WRONG (BREACH OF THE DUTY). 22 AM. JUR. 2D.
DAMAGES SEC. 2.
EXPENSES OF INSPECTION TO DETERMINE WHETHER PROPERTY WAS DAMAGED
WHILE IN POSSESSION OF A COMMON CARRIER IS BEYOND THE GRASP OF COMMON
CARRIER LIABILITY. TO HOLD A CARRIER LIABLE FOR SUCH UNFORESEEABLE
EXPENSES IT WOULD BE NECESSARY TO DRAFT A COVENANT SHOWING THAT
LIABILITY FOR COSTS OF INSPECTION WERE CLEARLY CONTEMPLATED BY THE
PARTIES AS THE MEASURE OF DAMAGES RESULTING FROM A BREACH OF A COVENANT
TO KEEP A TRAILER'S AIR BAGS INFLATED. KRAUSS V. GREENBARG, 137 F.2D
569, 570 (3RD CIR. 1943), CERT. DEN. 320 U.S. 791, REH. DEN. 320 U.S.
815 (1943).
IN THE OCTOBER 4 LETTERS THE FINANCE CENTER REFERS TO EACH SETTLEMENT
AS A "DECISION" WHICH IT BELIEVES WOULD HAVE AN ADVERSE IMPACT ON THE
GOVERNMENT CLAIM COLLECTION ACTIVITIES IN A NUMBER OF SIMILAR SHIPMENTS.
SETTLEMENTS OF THE COMPTROLLER GENERAL OF THE UNITED STATES ARE NOT
DECISIONS AND ARE NOT CONSIDERED PRECEDENTS FOR FUTURE DISBURSEMENTS OF
PUBLIC MONEY, 43 COMP. GEN. 788 (1964); THEY MAY NOT BE LAWFULLY
REVISED BY ANY OFFICER OF THE AGENCY CONCERNED. 14 COMP. GEN. 572
(1935); SEE, ALSO, 39 COMP. GEN. 886 (1960). ABSENT A TIMELY-FILED
REQUEST FOR RECONSIDERATION, PAYMENT SHOULD BE MADE IN ACCORDANCE WITH
THE CERTIFICATE OF SETTLEMENT.
ALTHOUGH THE REQUEST FOR RECONSIDERATION WAS TIMELY, IT WAS NOT IN
ACCORD WITH OUR REGULATIONS WHICH AT 4 C.F.R. 32.1 (1978) PROVIDE:
"SETTLEMENTS MADE PURSUANT TO 31 U.S.C. 71 WILL BE REVIEWED (A) IN
THE DISCRETION OF THE COMPTROLLER GENERAL UPON THE WRITTEN APPLICATION
OF (1) A CLAIMANT WHOSE CLAIM HAS BEEN SETTLED OR (2) THE HEAD OF THE
DEPARTMENT OR GOVERNMENT ESTABLISHED TO WHICH THE CLAIM OR ACCOUNT
RELATES, OR (B) UPON MOTION OF THE COMPTROLLER GENERAL AT ANY TIME."
FURTHERMORE, OUR REGULATIONS REQUIRE THAT APPLICATIONS FOR REVIEW STATE
THE ERRORS WHICH THE APPLICANT BELIEVES HAVE BEEN MADE AND WHICH FORM
THE BASIS FOR THE REQUEST. 4 C.F.R. 32.2 (1978). BUT THE OCTOBER 4
LETTERS MERELY EXPAND ON THE MATERIAL PRESENTED TO OUR CLAIMS DIVISION
IN THE FINANCE CENTER'S ADMINISTRATIVE REPORTS DATED JUNE 4, 1977.
HOWEVER, SINCE THE FINANCE CENTER STATES THAT THESE SETTLEMENTS WOULD
AFFECT MANY OTHER SIMILAR CASES, WE REVIEWED THEM ON OUR OWN MOTION. 4
C.F.R. 32.1(B) (1978).
B-194222, AUG 1, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. DECISION IS AFFIRMED ON RECONSIDERATION SINCE PROTESTER HAS NOT
SHOWN THAT PRIOR DECISION WAS BASED ON ERRORS OF FACT OR LAW.
2. ALLEGATION CONCERNING IFB DEFICIENCY FILED AFTER BID OPENING IS
UNTIMELY AND NOT FOR CONSIDERATION ON MERITS.
BOGUE ELECTRIC MANUFACTURING COMPANY - RECONSIDERATION:
BOGUE ELECTRIC MANUFACTURING COMPANY (BOGUE) REQUESTS RECONSIDERATION
OF OUR DECISION IN BOGUE ELECTRIC MANUFACTURING COMPANY, B-194222, JUNE
18, 1979, WHERE WE FOUND BOGUE'S PROTEST, ALLEGING: (1)
NONRESPONSIBILITY OF ITS COMPETITOR; (2) TECHNICAL DEFICIENCY IN THE
SOLICITATION (IFB); AND (3) VIOLATION OF PROPRIETARY RIGHTS, LACKED
MERIT, SINCE IT: (1) IN PART CONCERNED MATTERS WHICH WE DO NOT REVIEW;
(2) IN PART WAS UNTIMELY FILED; AND (3) DID NOT PRESENT THE INFORMATION
AND EVIDENCE NECESSARY TO SUBSTANTIATE ITS CASE. WE ARE AFFIRMING THAT
DECISION BECAUSE BOGUE'S REQUEST HAS NOT DEMONSTRATED THAT OUR PRIOR
DECISION WAS BASED ON ERRORS OF FACT OR LAW.
BOGUE NOW ARGUES THAT THE IFB OUGHT TO HAVE REQUIRED FIRST ARTICLE
TESTING. IN OUR VIEW, THIS IS A VARIATION OF BOGUE'S PRIOR ARGUMENT
THAT THE IFB WAS TECHNICALLY DEFICIENT. IN ANY EVENT, SINCE BOGUE'S
PROTEST OF THE OMISSION OF FIRST ARTICLE TESTING FIRST APPEARS IN ITS
JULY 3, 1979, REQUEST FOR RECONSIDERATION, IT IS UNTIMELY AND NOT FOR
OUR CONSIDERATION ON THE MERITS.
BOGUE ALSO REITERATES ITS EARLIER UNTIMELY ARGUMENT THAT THE DRAWING
PACKAGE ACCOMPANYING THE IFB WAS INCOMPLETE. ON THIS BASIS, BOGUE
CONTENDS THAT:
"IT IS, THEREFORE, IMPOSSIBLE FOR A DCAS (DEFENSE CONTRACT
ADMINISTRATION SERVICES) REPRESENTATIVE, OR ANY OTHER GOVERNMENT
REPRESENTATIVE TO REVIEW *** (ITS COMPETITOR'S) ABILITY TO PERFORM
WITHOUT SUCH DRAWINGS."
THE AGENCY POINTED OUT IN ITS REPORT THAT ALTHOUGH THE IFB DID NOT
REQUIRE A FIRST ARTICLE TEST SAMPLE, IT DID REQUIRE PRODUCTION LOT TEST
SAMPLES. IF BOGUE THOUGHT THIS INADEQUATE, IT SHOULD HAVE PROTESTED THE
MATTER PRIOR TO THE DECEMBER 1, 1978, BID OPENING IN ORDER TO BE TIMELY,
FOR, AS WE NOTED IN OUR PRIOR DECISION, WITH REGARD TO BOGUE'S
ALLEGATION THAT THE DRAWING PACKAGE WAS DEFICIENT, PROTESTS BASED UPON
ALLEGED IMPROPRIETIES IN A SOLICITATION WHICH ARE APPARENT PRIOR TO BID
OPENING MUST BE FILED PRIOR TO BID OPENING. 4 C.F.R. SEC. 20.3(B)(1)
(1979).
ACCORDINGLY, OUR DECISION OF JUNE 18, 1979, IS AFFIRMED.
B-194279, B-194284, AUG 1, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTESTS AGAINST AWARD OF SMALL BUSINESS SET-ASIDE CONTRACT WILL NOT
BE CONSIDERED BECAUSE MATERIAL ISSUES INVOLVED ARE BEFORE OR MAY BE
CONSIDERED BY COURT OF COMPETENT JURISDICTION, AND COURT HAS NOT
EXPRESSED INTEREST IN GAO DECISION.
DYNETERIA, INC; JETS, INC.:
DYNETERIA, INC. (DYNETERIA), AND JETS, INC. (JETS), HAVE PROTESTED
AGAINST THE AWARD OF A SMALL BUSINESS SET-ASIDE CONTRACT BY THE
DEPARTMENT OF THE NAVY, NAVAL FACILITIES ENGINEERING COMMAND (NAVY), TO
P&B SERVICES, INC. (P&B), FOR BASE OPERATING SERVICES AT THE NAVAL
SUBMARINE SUPPORT BASE, KINGS BAY, GEORGIA, UNDER REQUEST FOR PROPOSALS
(RFP) NO. N62467-78-R-0694.
FOLLOWING THE DETERMINATION OF THE SEATTLE REGIONAL OFFICE OF THE
SMALL BUSINESS ADMINISTRATION (SBA), THAT P&B WAS A SMALL BUSINESS,
DYNETERIA AND JETS PROTESTED TO OUR OFFICE AGAINST THE PROPOSED AWARD TO
P&B AND APPEALED THE SBA SIZE DETERMINATION. IN ADDITION, DYNETERIA
FILED SUIT IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH
CAROLINA (DYNETERIA, INC. V. BOYER, CIVIL ACTION NO. 79-425), SEEKING TO
ENJOIN AWARD UNDER THE RFP UNTIL ITS PROTEST AND APPEAL WERE RESOLVED.
AFTER A HEARING ON MARCH 19, 1979, AT WHICH THE INJUNCTIVE RELIEF WAS
DENIED, THE NAVY MADE A DETERMINATION AND FINDINGS OF URGENCY PURSUANT
TO DEFENSE ACQUISITION REGULATION SECS. 1-703(B)(3)(IV) AND
2-407.8(B)(3) (1976 ED.), ON THE BASIS OF WHICH AWARD WAS MADE TO P&B ON
MARCH 21, 1979. THE ACTION WAS DISMISSED UPON MOTION OF THE PLAINTIFF
BY ORDER OF THE COURT DATED APRIL 20, 1979.
THE PROTESTERS ESSENTIALLY CONTEND THAT P&B WAS NOT ELIGIBLE FOR
AWARD, THAT THE AWARD WAS THEREFORE IMPROPER, AND THAT THE NAVY SHOULD
TERMINATE P&B'S CONTRACT. THE PROTESTERS ASSERT THAT P&B IS AFFILIATED
WITH PAN AMERICAN WORLD AIRWAYS (PAN AM), A LARGE BUSINESS CONCERN;
THAT THE NAVY CONSIDERED PAN AM'S EXPERIENCE, CAPABILITY AND FINANCIAL
CAPACITY IN EVALUATING P&B'S PROPOSAL; THAT P&B WAS ADVISED OF AND
GIVEN AN OPPORTUNITY TO CORRECT DEFICIENCIES IN ITS PROPOSAL, ALTHOUGH
THE PROTESTERS WERE NOT GIVEN THE SAME INFORMATION AND OPPORTUNITY; AND
THAT THE BOND SUBMITTED WITH P&B'S PROPOSAL WAS DEFECTIVE, REQUIRING
REJECTION OF THE PROPOSAL.
DURING THE COURSE OF THE PROTESTS, THE SBA SIZE APPEALS BOARD
REVERSED THE REGIONAL OFFICE IN A DECISION OF MAY 11, 1979, HOLDING THAT
P&B IS ENGAGED IN A JOINT VENTURE WITH PAN AM ON THE PROPOSAL, THAT THE
FIRMS ARE AFFILIATED FOR THE PROCUREMENT, AND THAT P&B IS THEREFORE
OTHER THAN SMALL FOR THE PURPOSE OF THE PROCUREMENT IN QUESTION. THE
BOARD DENIED P&B'S REQUEST FOR RECONSIDERATION OF THE DECISION.
THE NAVY SUBSEQUENTLY ADVISED THE PROTESTERS THAT NOTWITHSTANDING THE
SBA SIZE APPEALS BOARD'S DECISION, IT WAS NOT OBLIGATED TO TERMINATE
P&B'S CONTRACT. DYNETERIA THEN SOUGHT JUDICIAL RELIEF FROM THE
DISMISSAL ORDER ON THE BASIS OF SBA'S MAY 11 DECISION AND
REPRESENTATIONS MADE BY THE NAVY TO THE COURT AT THE MARCH 19 HEARING.
THE COURT VACATED THE DISMISSAL ORDER AND RESTORED THE CASE TO THE TRIAL
CALENDAR ON MAY 31, 1979. AT A HEARING HELD ON JULY 2, 1979, THE COURT
GRANTED JETS' MOTION TO INTERVENE AND THE PLAINTIFFS' MOTION TO FILE AN
AMENDED COMPLAINT; THE DEFENDANTS HAVE 60 DAYS TO ANSWER THE AMENDED
COMPLAINT.
THE PLAINTIFFS' AMENDED COMPLAINT RECITES THE FACT THAT THEIR
PROTESTS TO OUR OFFICE ALLEGE, INTER ALIA, THAT P&B WAS INELIGIBLE FOR
THE CONTRACT AWARDED BECAUSE THE FIRM'S BOND WAS DEFECTIVE AND BECAUSE
P&B WAS ENGAGED IN A JOINT VENTURE WITH PAN AM. THE COMPLAINT FURTHER
ASSERTS THAT CONTRARY TO THE PARTIES' AGREEMENT AT THE MARCH 19 HEARING
THAT IN THE EVENT OUR OFFICE AND/OR SBA DETERMINED P&B WAS INELIGIBLE
FOR AWARD, THE NAVY WOULD IMMEDIATELY TERMINATE THE CONTRACT AND AWARD A
CONTRACT TO THE NEXT LOW RESPONSIVE, RESPONSIBLE BIDDER, THE NAVY HAS
NOT DONE SO. THE PLAINTIFFS' SEEK INJUNCTIVE RELIEF REQUIRING THE NAVY
TO TERMINATE P&B'S CONTRACT, DECLARATORY JUDGMENT AS TO THEIR RIGHTS
CONCERNING THE AWARD OF A CONTRACT FOR THE WORK, AND SUCH OTHER RELIEF
AS THE COURT DEEMS PROPER.
THE PRINCIPAL ISSUES NOW BEFORE THE COURT, WHETHER P&B BY REASON OF
ITS SIZE STATUS OR BOND WAS INELIGIBLE FOR AWARD AND WHETHER THE NAVY
MUST TERMINATE P&B'S CONTRACT, ARE ESSENTIALLY THE SAME AS THOSE RAISED
BY THE PARTIES IN THEIR PROTESTS. IT IS OUR POLICY NOT TO RENDER A
DECISION WHERE THE MATERIAL ISSUES INVOLVED ARE BEFORE A COURT OF
COMPETENT JURISDICTION, UNLESS THE COURT EXPRESSES AN INTEREST IN
RECEIVING OUR DECISION. 4 C.F.R. SEC. 20.10 (1979); KET, INCORPORATED,
B-191949, JANUARY 18, 1979, 79-1 CPD 28. WHILE THE ISSUES CONCERNING
EVALUATION OF P&B'S PROPOSAL HAVE NOT BEEN SPECIFICALLY SUBMITTED TO THE
COURT, WE BELIEVE THAT THE ISSUES BEFORE THE COURT ARE SO INTERTWINED
WITH THOSE RAISED HERE AND THE RELIEF SOUGHT IS SO SIMILAR THAT THIS
MIGHT RESULT IN THE COURT'S CONSIDERATION OF THE MATTER. ROGER J. AU &
SON, INC., B-193030, APRIL 25, 1979, 79-1 CPD 287; SEE FRONTIER SCIENCE
ASSOCIATES, INC. - RECONSIDERATION, B-192654, DECEMBER 26, 1978, 78-2
CPD 433. THESE ISSUES MAY, HOWEVER, BE APPROPRIATE FOR FUTURE
CONSIDERATION BY THIS OFFICE DEPENDING UPON THE OUTCOME OF THE
PROTESTERS' SUIT. U.S. EAGLE, INC., B-188330, JULY 18, 1977, 77-2 CPD
34. CF. ROGER J. AU & SON, INC., SUPRA.
IN LIGHT OF THE ABOVE AND IN CONSIDERATION OF THE FACT THAT THE COURT
HAS NOT INDICATED AN INTEREST IN OUR VIEWS AND THE AMENDED COMPLAINT
DOES NOT REQUEST RELIEF PENDING RESOLUTION OF THE PROTESTS BY OUR
OFFICE, WE WILL TAKE NO FURTHER ACTION ON THE MATTER.
THE PROTESTS ARE DISMISSED.
B-195080, AUG 1, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE SPREAD AMONG BID PRICES RECEIVED WAS UNIFORM, DIFFERENCE
BETWEEN LOW AND SECOND LOW BID PRICES WAS MERE 16.5 PERCENT, AND
CONTRACTING OFFICER BELIEVED LOW BIDDER WAS ALREADY IN PRODUCTION OF THE
ITEM - WITH ITS ATTENDANT ECONOMIES - CONSTRUCTIVE NOTICE OF POSSIBLE
MISTAKE IN BID DID NOT EXIST.
2. GAO HAS NO JURISDICTION TO REVIEW DENIAL OF CLAIM BY GOVERNMENT
AGENCY UNDER PUBLIC LAW 85-804.
MAXIMUM PRECISION METAL PRODUCTS, INC.:
SIX BIDDERS RESPONDED TO INVITATION FOR BIDS NO. DAAE07-77-B-0077
ISSUED BY THE UNITED STATES ARMY TANK-AUTOMOTIVE MATERIEL READINESS
COMMAND (TARCOM) ON DECEMBER 20, 1976, FOR 107 IDLER WHEEL ARMS, NSN
2530-00-722-3637, BY SUBMITTING THE FOLLOWING BIDS:
OFFEROR UNIT PRICE TOTAL PRICE
MAXIMUM PRECISION METAL
PRODUCTS, INC. (MAXIMUM) $482 $51,574
OFFEROR B 582 62,274
OFFEROR C 840 89,880
OFFEROR D 850 90,950
OFFEROR E 928 99,296
OFFEROR F 1,205 128,935
MAXIMUM RECEIVED THE AWARD, CONTRACT NO. DAAE07-77-C-0186, ON
FEBRUARY 16, 1977. DELIVERY WAS SCHEDULED FOR AUGUST 5, 1978.
ON OCTOBER 4, 1977, OVER 7 MONTHS AFTER THE CONTRACT HAD BEEN
AWARDED, MAXIMUM NOTIFIED THE CONTRACTING ACTIVITY THAT IT HAD MADE A
MISTAKE IN COMPUTING ITS UNIT PRICE OF $482. IT ADVISED THAT A UNIT
PRICE OF $614 SHOULD HAVE BEEN BID AND THAT A UNIT PRICE OF $893 WAS THE
BEST PRICE THE CONTRACTING ACTIVITY COULD EXPECT TO FIND ANYWHERE AT
THAT TIME. MAXIMUM SUGGESTED, THEREFORE, THAT THE AWARD PRICE TO IT BE
INCREASED OR, IN THE ALTERNATE, THAT THE CONTRACT BE TERMINATED ON A "NO
COST" BASIS. MAXIMUM SUBMITTED ITS PRICING SHEET FOR THE PROCUREMENT,
THE ORIGINAL WORKSHEETS USED IN COMPUTING A PRIOR SUCCESSFUL BID WHICH
HAD RESULTED IN ITS RECEIVING THE AWARD OF CONTRACT NO. DAAE07-76-C-3498
(THESE WORKSHEETS WERE USED AS THE BASIS FOR COMPUTING ITS BID FOR THE
PROCUREMENT PRESENTLY IN QUESTION), THE STATEMENT OF AN EMPLOYEE
REGARDING THE MISTAKE, AND AN ANALYSIS OF WHY A CORRECTION OF THE
MISTAKE SHOULD BE ALLOWED. IN ESSENCE, IT IS THE POSITION OF MAXIMUM
THAT THE CONTRACTING OFFICER, IN VIEW OF ALL THE CIRCUMSTANCES
SURROUNDING THIS PROCUREMENT AND THE PROCUREMENT HISTORY OF THE ITEM,
SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF A POSSIBLE MISTAKE IN BID
AND, THEREFORE, SHOULD HAVE REQUESTED MAXIMUM TO VERIFY ITS BID PRICE.
BECAUSE VERIFICATION WAS NOT REQUESTED, MAXIMUM BELIEVES IT SHOULD BE
GRANTED RELIEF. IT IS NOTED BY A MAXIMUM NOTATION THAT THE SECOND LOW
BID ON THIS PROCUREMENT WAS SUBMITTED BY A DELINQUENT CONTRACTOR, A FACT
THAT, WE PRESUME, IS INTENDED TO CAST DOUBT ON THE VALIDITY OF THAT BID
PRICE.
INITIALLY, THE MAXIMUM REQUEST FOR RELIEF WAS CONSIDERED BY
HEADQUARTERS, TARCOM. RELIEF WAS DENIED. OUR OFFICE RECEIVED THE
REQUEST FOR RELIEF THROUGH DEPARTMENT OF DEFENSE AND CONGRESSIONAL
CHANNELS, AND WE WERE ASKED FOR OUR OPINION ON THE MATTER. THE ISSUES
BEFORE US ARE WHETHER THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE
OF A POSSIBLE MISTAKE IN BID, A FACT WHICH WOULD HAVE REQUIRED A PROPER
REQUEST FOR BID VERIFICATION, AND, IF NOT, WHETHER RELIEF MAY BE GRANTED
UNDER PUBLIC LAW 85-804 (CODIFIED AT 50 U.S.C. SEC. 1431 (1976) (AND
IMPLEMENTED BY PARAGRAPH 17-204.3 OF THE DEFENSE ACQUISITION REGULATION
(1976 ED.)).
WE NOTE THAT THE PROCUREMENT HISTORY FOR THIS ITEM SHOWS A MAY 1976
PURCHASE OF 239 ITEMS AT A UNIT PRICE OF $595, A DECEMBER 1975 PURCHASE
OF 148 ITEMS AT $693 EACH, AND AN APRIL 1975 PURCHASE OF 434 ITEMS AT A
UNIT PRICE OF $640. THE MAY 1976 PURCHASE WAS MADE FROM MAXIMUM
(CONTRACT NO. DAAE07-76-C-3498), AND PURSUANT TO THE OPTION FOR
INCREASED QUANTITIES CLAUSE IN THE CONTRACT THE AMOUNT OF THE PURCHASE
WAS INCREASED DURING 1976 BY AN ADDITIONAL 196 ITEMS.
IT IS THE POSITION OF THE CONTRACTING OFFICER THAT NO CONSTRUCTIVE
NOTICE EXISTED AS TO A POSSIBLE MISTAKE IN MAXIMUM'S BID IN VIEW OF THE
MERE 16.5-PERCENT DIFFERENCE BETWEEN THE LOW AND SECOND LOW BIDS.
FURTHER, IT IS STATED THAT THE CONTRACTING OFFICER KNEW THAT MAXIMUM HAD
RECEIVED CONTRACT NO. DAAE07-76-C-3498 FOR THE SAME ITEM AND HE THUS
BELIEVED THAT ANY MAXIMUM PRICE FOR THE ITEM WOULD BE LOWER THAN IT
MIGHT BE OTHERWISE SINCE MAXIMUM ALREADY WOULD BE IN PRODUCTION OF THE
ARMS. THE CONTRACTING OFFICER, IT APPEARS, HAD NO KNOWLEDGE THAT
MAXIMUM WAS NOT ACTUALLY IN PRODUCTION AT THE TIME OF THE INSTANT AWARD.
MAXIMUM DEFAULTED ON CONTRACT NO. -3498 IN 1977.
THE GENERAL RULE AS TO A MISTAKE IN BID ALLEGED AFTER AWARD IS THAT
THE BIDDER MUST BEAR THE CONSEQUENCES OF A MISTAKE UNLESS THE MISTAKE IS
MUTUAL OR THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF
THE ERROR PRIOR TO AWARD. REACTION INSTRUMENTS, INC., B-189168,
NOVEMBER 30, 1977, 77-2 CPD 424; BOISE CASCADE ENVELOPE DIVISION,
B-185340, FEBRUARY 10, 1976, 76-1 CPD 86; PORTA-KAMP MANUFACTURING
COMPANY, INC., 54 COMP. GEN. 545 (1974), 74-2 CPD 393. NO VALID OR
BINDING CONTRACT IS CONSUMMATED WHERE THE CONTRACTING OFFICER KNEW OR
SHOULD HAVE KNOWN OF THE PROBABILITY OF ERROR, BUT FAILED TO TAKE PROPER
STEPS TO VERIFY THE BID PRICE. IN THE INSTANT CASE THE QUESTION IS
SIMPLY WHETHER OR NOT CONSTRUCTIVE NOTICE EXISTED SINCE ACTUAL NOTICE
DID NOT EXIST. THE TEST FOR CONSTRUCTIVE NOTICE IS REASONABLENESS -
WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE THERE
ARE FACTORS WHICH COULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND
OF THE CONTRACTING OFFICER. MORTON SALT COMPANY - ERROR IN BID,
B-188392, APRIL 19, 1977, 77-1 CPD 273.
WE BELIEVE THAT THE DECISION TO MAKE AWARD TO MAXIMUM WITHOUT
REQUESTING VERIFICATION OF THE BID PRICE WAS REASONABLE UNDER THE
CIRCUMSTANCES. THE RANGE OF BID PRICES WITH WHICH THE CONTRACTING
OFFICER WAS FACED AFTER BID OPENING WAS EXCEEDINGLY UNIFORM IN ITS
SPREAD EVEN THOUGH THE DIFFERENCE BETWEEN THE HIGH AND LOW BIDS WAS
GREAT. THUS THE SPREAD OF PRICES DID NOT OPERATE TO CAUSE THE MAXIMUM
PRICE TO STAND APART FROM THE OTHERS AND THUS TO APPEAR ON ITS FACE TO
BE IN ERROR. SECOND, THE DIFFERENCE BETWEEN THE MAXIMUM BID PRICE AND
THAT OF THE NEXT LOW BIDDER WAS ONLY 16.5 PERCENT, A DIFFERENCE WHICH BY
ITSELF IS NOT SUFFICIENT TO INDICATE AN ERROR IN BID. SEE J.B.L.
CONSTRUCTION CO., INC., B-191011, APRIL 18, 1978, 78-1 CPD 301, AND JULY
19, 1978, 78-2 CPD 49. FINALLY, THE CONTRACTING OFFICER BELIEVED THAT
MAXIMUM WAS ALREADY IN PRODUCTION ON ITS CONTRACT NO. -3498 AND
APPARENTLY (WHICH WE FIND REASONABLE) THAT DUE TO ENSUING ECONOMIES
DECIDED TO REDUCE ITS PRIOR PRICE OF $595 TO $482.
AS REGARDS RELIEF UNDER PUBLIC LAW 85-804, WE HAVE NO JURISDICTION TO
REVIEW THE DENIAL (AS WAS DONE HERE) OF CLAIMS BY GOVERNMENT AGENCIES
UNDER THIS STATUTE. SEE EDFIELD RESEARCH, INC., B-185709, JUNE 28,
1976, 76-1 CPD 413.
ACCORDINGLY, WE BELIEVE THAT CONTRACT NO. DAAE07-77-C-0186 IS VALID
AND BINDING ON ALL THE PARTIES THERETO, AND THE RELIEF REQUESTED BY
MAXIMUM MAY NOT BE GRANTED.
B-195405, AUG 1, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST AGAINST SMALL BUSINESS SIZE STANDARD CLASSIFICATION IN
SOLICITATION IS NOT FOR CONSIDERATION BY GAO SINCE SBA SIZE APPEALS
BOARD IS CLEARLY ESTABLISHED AS SOLE ADJUDICATOR OF SIZE STANDARD
ISSUES.
PACIFIC DIVING INDUSTRIES, INC.:
PACIFIC DIVING INDUSTRIES, INC. (PACIFIC), PROTESTS THE SMALL
BUSINESS SIZE STANDARD CLASSIFICATION IN SOLICITATION NO.
N00024-79-R-4321(Q), ISSUED BY THE NAVAL SEA SYSTEMS COMMAND. THE
PROCUREMENT IS TO CLEAN A SHIP'S HULL OF ALL FORMS OF MARINE GROWTH.
THE SIZE STANDARD FOR THE PROCUREMENT IS "THE AVERAGE ANNUAL RECEIPTS
OF THE CONCERN AND ITS AFFILIATES FOR THE PRECEDING THREE FISCAL YEARS
NOT IN EXCESS OF $9,000,000." PACIFIC CONTENDS THAT THE SIZE STANDARD
SHOULD BE $2,000,000.
PURSUANT TO 15 U.S.C. SEC. 637(B)(6) (1976) THE SMALL BUSINESS
ADMINISTRATION (SBA) HAS BEEN GRANTED CONCLUSIVE AUTHORITY TO DETERMINE
A SMALL BUSINESS CONCERN'S SIZE STATUS FOR PROCUREMENT PURPOSES. IN
VIEW OF THIS RESPONSIBILITY, SBA HAS PROMULGATED REGULATIONS HAVING THE
FORCE AND EFFECT OF LAW. 13 C.F.R. PART 121 (1979).
SECTION 121.3-8, "DEFINITION OF SMALL BUSINESS FOR GOVERNMENT
PROCUREMENT," STATES IN PART:
"*** THE DETERMINATION OF THE APPROPRIATE CLASSIFICATION OF A PRODUCT
OR SERVICE SHALL BE MADE BY THE CONTRACTING OFFICER. BOTH
CLASSIFICATION AND THE APPLICABLE SIZE STANDARD *** SHALL BE SET FORTH
IN THE SOLICITATION AND SUCH DETERMINATION OF THE CONTRACTING OFFICER
SHALL BE FINAL UNLESS APPEALED IN THE MANNER PROVIDED IN SEC. 121.3-6.
***"
PURSUANT TO SECTION 121.3-6(A) THE SIZE APPEALS BOARD HAS THE
AUTHORITY TO REVIEW APPEALS FROM DETERMINATIONS MADE UNDER SEC. 121.3-8
AND SHALL MAKE FINAL DECISIONS AS TO WHETHER SUCH DETERMINATION SHOULD
BE AFFIRMED, REVERSED, OR MODIFIED.
SECTION 121.3-6(B)(1)(III) PROVIDES THAT AN APPEAL MAY BE FILED WITH
THE SBA SIZE APPEALS BOARD BY ANY CONCERN OR INTERESTED PARTY WHICH HAS
BEEN ADVERSELY AFFECTED BY A DECISION OF A CONTRACTING OFFICER REGARDING
CLASSIFICATION. THE TIME FOR FILING AN APPEAL IS SET FORTH IN SECTION
121.3-6(B)(3)(II).
THE OPPORTUNITY FOR RECONSIDERATION IS PROVIDED FOR IN SECTION
121.3-6(G)(5) WHICH STATES THAT THE SIZE APPEALS BOARD DECISION SHALL
CONSTITUTE THE FINAL ADMINISTRATIVE REMEDY OF SBA. THE PROVISIONS OF 13
C.F.R. SECS. 121.3-8 AND 121.3-6(B)(3)(II) ARE REPEATED IN DEFENSE
ACQUISITION REGULATION SEC. 1-703(C)(1) AND (2) (1976 ED.). WHEN THE
SBA REGULATIONS ARE VIEWED IN CONJUNCTION WITH 15 U.S.C. SEC. 637(B)(6)
AND DAR, THEY CLEARLY ESTABLISH THE SIZE APPEALS BOARD AS THE SOLE
ADJUDICATOR OF SIZE STANDARD ISSUES. SEE DYNAMIC INTERNATIONAL, INC.,
B-185337, JANUARY 5, 1976, 76-1 CPD 11.
THEREFORE, THE PROTEST IS DISMISSED.
B-193034, JUL 31, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
ACTION EMPLOYEES WHO TRAIN VISTA VOLUNTEERS AT THEIR HEADQUARTERS ARE
FREQUENTLY REQUIRED TO TAKE MEALS WITH VOLUNTEERS AND TO REMAIN
OVERNIGHT. MEALS CONSTITUTE AN INTRINSIC PART OF TRAINING SESSIONS AND
DIRECTOR, ACTION, HAS DETERMINED THAT ROUND-THE-CLOCK SUPERVISION IS
REQUIRED FOR TRAINING. SINCE AGENCY HEAD IS AUTHORIZED BY DOMESTIC
VOLUNTEER SERVICE ACT OF 1973 TO TRAIN VISTA VOLUNTEERS AND TO PROVIDE
SUPERVISION, TECHNICAL ASSISTANCE, AND OTHER SUPPORT, THE NECESSARY
EXPENSES INCURRED FOR MEALS AND LODGINGS AT HEADQUARTERS BY EMPLOYEES
WHO TRAIN VISTA VOLUNTEERS MAY BE REIMBURSED.
ACTION - SUBSISTENCE EXPENSES AT HEADQUARTERS OF EMPLOYEES CONDUCTING
TRAINING:
THIS DECISION RESPONDS TO A REQUEST REGARDING THE STATUTORY AUTHORITY
OF ACTION TO REIMBURSE ITS EMPLOYEES FOR THE COST OF MEALS AND LODGINGS
INCURRED IN CONNECTION WITH OFFICIAL TRAINING DUTIES PERFORMED AT THEIR
OFFICIAL DUTY STATIONS. THE QUESTION TO BE DECIDED IS WHETHER THE
EMPLOYEES GIVING THE TRAINING ("TRAINERS") MAY BE REIMBURSED IN LIGHT OF
THE GENERAL RULE THAT THE SUBSISTENCE EXPENSES OF EMPLOYEES AT THEIR
PERMANENT DUTY STATIONS ("HEADQUARTERS") MAY NOT BE PAID BY THE
GOVERNMENT.
IN ACCORDANCE WITH THE AUTHORITY GRANTED BY THE DOMESTIC VOLUNTEER
SERVICE ACT OF 1973, AS AMENDED, PUBLIC LAW 93-113, CODIFIED AT 42
U.S.C. SEC. 4951 ET SEQ., ACTION ADMINISTERS A VARIETY OF DOMESTIC
VOLUNTEER PROGRAMS, INCLUDING VOLUNTEERS IN SERVICE TO AMERICA (VISTA).
SECTION 102 OF THE ACT GIVES THE DIRECTOR OF ACTION THE AUTHORITY TO
OPERATE THE VISTA PROGRAM BY RECRUITING, SELECTING, AND TRAINING PERSONS
TO SERVE IN FULL-TIME VOLUNTEER PROGRAMS. UNDER SECTION 105(B) OF THAT
ACT, THE DIRECTOR IS AUTHORIZED TO "*** PROVIDE VOLUNTEERS SUCH LIVING,
TRAVEL (INCLUDING TRAVEL TO AND FROM PLACES OF TRAINING), AND LEAVE
ALLOWANCES, AND SUCH HOUSING *** TRANSPORTATION, SUPERVISION, TECHNICAL
ASSISTANCE, AND SUCH OTHER SUPPORT AS HE DEEMS NECESSARY AND APPROPRIATE
TO CARRY OUT THE PURPOSE AND PROVISIONS OF THIS PART ***." PURSUANT TO
THIS AUTHORITY, ACTION REQUIRES ALL POTENTIAL VISTA VOLUNTEERS TO
UNDERGO TRAINING, USUALLY LIMITED TO 3 DAYS, AT VARIOUS LOCATIONS
THROUGHOUT THE UNITED STATES. THE TRAINING FREQUENTLY IS HELD WITHIN
THE CONFINES OF AN OFFICIAL DUTY STATION OF THE AGENCY.
DUE, IN PART, TO THE BREVITY OF THE TRAINING PERIOD, EXTENSIVE
PARTICIPATION BY THE VOLUNTEERS AND STAFF EMPLOYEES ASSIGNED TO TRAIN
AND SUPERVISE THEM IS REQUIRED DURING THE NORMAL 3-DAY PERIOD OF
TRAINING. HENCE, THE TRAINERS ARE FREQUENTLY REQUIRED TO REMAIN
OVERNIGHT AT THE TRAINING FACILITY AND TO TAKE MEALS WITH THE VOLUNTEERS
DURING THE TRAINING SESSIONS. THE MEALS ARE INTRINSIC PARTS OF THE
TRAINING SESSIONS AND INFORMATION IS OFTEN PRESENTED TO THE TRAINING
PARTICIPANTS DURING THE MEALS. AT OTHER TIMES, THE TRAINERS ARE
REQUIRED TO REMAIN WITH THE VOLUNTEERS IN ORDER TO BE AVAILABLE TO
RESPOND TO THE MANY INQUIRIES WHICH ARISE DURING THE FORMAL TRAINING
SESSIONS.
AS INDICATED ABOVE, THE GENERAL RULE IS THAT THE SUBSISTENCE EXPENSES
OF CIVILIAN EMPLOYEES AT THEIR OFFICIAL DUTY STATIONS ARE PERSONAL TO
THE EMPLOYEES AND, IN THE ABSENCE OF SPECIFIC AUTHORITY, MAY NOT BE
PROVIDED AT GOVERNMENT EXPENSE REGARDLESS OF ANY UNUSUAL WORKING
CONDITIONS INVOLVED. 53 COMP. GEN. 457 (1974). SEE FEDERAL TRAVEL
REGULATIONS, PARAGRAPH 1-7.6(A), FPMR 101-7 (MAY 1973). HOWEVER, WITH
REGARD TO THE TRAINING OF CIVILIAN EMPLOYEES, THE GOVERNMENT EMPLOYEES
TRAINING ACT, PUBLIC LAW 85-507, JULY 7, 1958, AS CODIFIED IN TITLE 5,
UNITED STATES CODE, PROVIDES IN SECTION 4109(A)(2) THAT THE HEAD OF AN
AGENCY MAY:
"PAY OR REIMBURSE THE EMPLOYEE FOR, ALL OR A PART OF THE NECESSARY
EXPENSES OF THE TRAINING *** INCLUDING AMONG THE EXPENSES THE NECESSARY
COSTS OF -
"(F) OTHER SERVICES OR FACILITIES DIRECTLY RELATED TO THE TRAINING OF
THE EMPLOYEE."
THE IMPLEMENTING REGULATIONS STATE THAT "THE HEAD OF AN AGENCY SHALL
DETERMINE WHICH EXPENSES CONSTITUTE NECESSARY TRAINING EXPENSES UNDER
SECTION 4109 OF TITLE 5, UNITED STATES CODE." 5 C.F.R. SEC. 410.601.
AS TO THE EMPLOYEES WHO RECEIVE TRAINING, WE HAVE HELD THAT THE
GOVERNMENT EMPLOYEES TRAINING ACT CONSTITUTES THE SPECIFIC AUTHORITY
NECESSARY TO OVERCOME THE PROHIBITION AGAINST PAYING FOR EMPLOYEES'
MEALS AND LODGINGS AT THEIR HEADQUARTERS. SEE 50 COMP. GEN. 610
(1971), AND 39 ID. 119 (1959).
THE CLOSELY RELATED QUESTION OF THE PAYMENT OF MEALS AND LODGING
EXPENSES INCURRED BY THE EMPLOYEES GIVING THE TRAINING HAS BEEN
DISCUSSED GENERALLY IN 48 COMP. GEN. 185 (1968). THERE, AN EMPLOYEE
COORDINATOR OF A SEMINAR, CONDUCTED FOR THE PURPOSE OF TRAINING
EMPLOYEES OF THE INTERNATIONAL AGRICULTURAL DEVELOPMENT SERVICE, HAD
PAID FOR THE MEALS OF NON-GOVERNMENT EMPLOYEE GUEST SPEAKERS AS WELL AS
THE MEALS OF CERTAIN EMPLOYEES OF THE SERVICE WHO ATTENDED THE SEMINAR.
HIS EXPENSES IN FURNISHING THE MEALS TO THE NON-GOVERNMENT EMPLOYEE
SPEAKERS WERE AUTHORIZED UNDER 5 U.S.C. SEC. 4109 AS AN EXPENSE OF THE
TRAINING. MOREOVER, SINCE ONE OF THE GOVERNMENT EMPLOYEES ADDRESSED A
DINNER AND EVENING SESSION, WE HELD THAT "HIS PARTICIPATION IN THE MEAL
WAS A NECESSARY INCIDENT TO PROVIDING THE TRAINING." FURTHER, IT
APPEARED THAT TRAINING WAS CONDUCTED DURING MEAL SESSIONS. HENCE, THE
COST OF HIS MEALS WAS REIMBURSABLE UNDER THE TRAINING ACT. COMPARE
B-168774, SEPTEMBER 2, 1970.
SIMILARLY, AS SHOWN ABOVE, THE APPLICABLE PROVISIONS OF THE DOMESTIC
VOLUNTEER SERVICE ACT OF 1973 AUTHORIZE THE DIRECTOR, ACTION, TO PROVIDE
TRAINING TO VISTA VOLUNTEERS AND IN CONNECTION THEREWITH, TO PROVIDE THE
VOLUNTEERS SUCH SUPERVISION, TECHNICAL ASSISTANCE, AND SUCH OTHER
SUPPORT AS HE DEEMS NECESSARY AND APPROPRIATE. AS STATED ABOVE WE HAVE
HELD THAT THE GOVERNMENT EMPLOYEES TRAINING ACT AUTHORIZES AGENCIES TO
REIMBURSE THE SUBSISTENCE EXPENSES OF TRAINEES AT HEADQUARTERS AND THAT
THE SUBSISTENCE EXPENSES OF A GOVERNMENT EMPLOYEE TRAINER IS A NECESSARY
TRAINING EXPENSE. IN VIEW OF THESE HOLDINGS WE DO NOT SEE ANY REASON
WHY THE SUBSISTENCE EXPENSES INCURRED BY A GOVERNMENT EMPLOYEE TRAINER
AT HEADQUARTERS SHOULD NOT BE PAID IN THE SAME MANNER AS THOSE OF A
TRAINEE. THEREFORE, WE BELIEVE THAT THE AUTHORITY GIVEN TO THE
DIRECTOR, ACTION, BY THE DOMESTIC VOLUNTEER SERVICE ACT TO TRAIN
VOLUNTEERS MUST LIKEWISE BE CONSTRUED TO PERMIT THE AGENCY TO REIMBURSE
THE SUBSISTENCE EXPENSES OF ITS EMPLOYEES, AT HEADQUARTERS, NECESSARILY
INCURRED BY THEM IN TRAINING VISTA VOLUNTEERS.
IN THE PRESENT CASE, SINCE THE DIRECTOR OF ACTION HAS DETERMINED THAT
ROUND-THE-CLOCK SUPERVISION IS REQUIRED FOR TRAINING VISTA VOLUNTEERS
AND SINCE MEALS CONSTITUTE AN INTRINSIC PART OF THE TRAINING SESSIONS,
WE FIND THAT PARTICIPATION BY STAFF EMPLOYEES, AS TRAINERS, IS A
NECESSARY INCIDENT TO PROVIDING THE TRAINING. ACCORDINGLY, THE
NECESSARY EXPENSES INCURRED FOR MEALS AND LODGINGS AT HEADQUARTERS BY
ACTION EMPLOYEES IN TRAINING VISTA VOLUNTEERS, UNDER THE DESCRIBED
CIRCUMSTANCES, MAY BE REIMBURSED.
B-194144, JUL 31, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. CANCELLATION OF CONTRACT AWARDED TO OTHER THAN LOW BIDDER DUE TO
APPLICATION OF ERRONEOUS FREIGHT RATE TO LOW BIDDER'S BID BY GOVERNMENT
IS NOT APPROPRIATE WHERE GOVERNMENT'S ERROR WAS NOT DUE TO ANY ACTION OF
AWARDEE AND AWARDEE WAS NOT ON NOTICE OF SUCH ERROR, SINCE SUCH AWARD IS
NOT "PLAINLY OR PALPABLY ILLEGAL."
2. TERMINATION OF CONTRACT FOR CONVENIENCE OF GOVERNMENT IS
RECOMMENDED SINCE THERE IS NO URGENT NEED FOR DELIVERY OF REMAINING
QUANTITY (70 PERCENT OF CONTRACT AMOUNT) AND COST OF TERMINATION TO
GOVERNMENT DOES NOT OUTWEIGH INTEREST OF PROTECTING INTEGRITY OF
COMPETITIVE SYSTEM. REMAINING QUANTITY SHOULD BE AWARDED TO PROTESTER.
STOTT BRIQUET COMPANY, INC., A DIVISION OF LAKEHEAD INDUSTRIES:
STOTT BRIQUET COMPANY, INC., A DIVISION OF LAKEHEAD INDUSTRIES
(STOTT) HAS PROTESTED THE AWARD OF A CONTRACT TO HUSKY INDUSTRIES, INC.
(HUSKY), BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR A QUANTITY OF
BRIQUETTES UNDER INVITATION FOR BIDS (IFB) NO. 10PN-HMD-6653. STOTT
MAINTAINS THAT IT RATHER THAN HUSKY WAS THE LOW BIDDER. IN THIS REGARD
STOTT ASSERTS THAT GSA APPLIED THE WRONG FREIGHT RATES TO ITS BID OF
$43,496.25 AND THAT IF PROPERLY EVALUATED ITS BID WOULD HAVE BEEN
$52,111.50, NOT $63,341.25 AS IT WAS INITIALLY EVALUATED. (HUSKY'S BID
WAS EVALUATED AT $57,364.50 - BASE BID OF $48,562.50 PLUS FREIGHT RATE
EVALUATION FACTOR OF $8,802.)
GSA ACKNOWLEDGES THAT STOTT WAS THE LOW BIDDER AND SHOULD HAVE BEEN
AWARDED THE CONTRACT. GSA STATES THAT WHEN EVALUATING STOTT'S F.O.B.
ORIGIN BID OF $43,496.25 IT MISTAKENLY APPLIED THE HIGHER RATE FOR
CHARCOAL BRIQUETTES RATHER THAN THE LOWER RATE FOR PETROLEUM BRIQUETTES.
GSA FURTHER STATES THAT THE MISTAKE WAS CAUSED BY ITS FAILURE TO NOTICE
THAT UNDER THE IFB THE BRIQUETTES COULD BE CHARCOAL, LIGNITE OR
PETROLEUM RATHER THAN JUST CHARCOAL. (ALTHOUGH THE IFB WAS ENTITLED
"DEFINITE QUANTITY CONTRACT FOR FSC 9110 - BRIQUETTES, CHARCOAL," THE
SPECIFICATIONS STATED THAT THE BRIQUETTES COULD BE MADE OF CHARCOAL,
LIGNITE, OR PETROLEUM.) HOWEVER, GSA URGES THAT STOTT'S PROTEST BE
DISMISSED AS UNTIMELY BECAUSE NOTICE OF THE AWARD TO HUSKY WAS PUBLISHED
IN THE COMMERCE BUSINESS DAILY ON JANUARY 25, 1979, YET STOTT DID NOT
PROTEST TO OUR OFFICE UNTIL FEBRUARY 15, 1979. SEE 4 C.F.R. SEC.
20.2(B)(2).
INASMUCH AS GSA ACKNOWLEDGES THAT STOTT WAS THE LOW BIDDER AND SHOULD
HAVE BEEN AWARDED THE CONTRACT, WE DO NOT BELIEVE THE TIMELINESS OF
STOTT'S PROTEST IS RELEVANT. CONSEQUENTLY, THE ONLY QUESTIONS WHICH
REMAIN ARE WHETHER THE AWARD WAS "PLAINLY OR PALPABLY ILLEGAL"
(PERMITTING THE CONTRACT TO BE CANCELED WITHOUT THE GOVERNMENT INCURRING
LIABILITY), OR IF IT IS NOT "PLAINLY OR PALPABLY ILLEGAL," WHETHER IT
WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO TERMINATE HUSKY'S
CONTRACT UNDER THE TERMINATION FOR CONVENIENCE PROVISIONS OF THE
CONTRACT. IN THIS REGARD WE AGREE WITH GSA THAT WHERE, AS HERE, AN
AWARD WAS MADE TO OTHER THAN THE LOW BIDDER DUE TO THE APPLICATION OF
ERRONEOUS FREIGHT RATES BY THE GOVERNMENT WITHOUT THE KNOWLEDGE OF THE
AWARDEE AND WAS NOT OTHERWISE DUE TO ANY ACTION OF THE AWARDEE, THE
AWARD IS NOT "PLAINLY OR PALPABLY ILLEGAL." SEE 52 COMP. GEN. 215, 218,
SUPRA.
A DECISION TO RECOMMEND CONTRACT TERMINATION INVOLVES THE
CONSIDERATION OF SEVERAL FACTORS, INCLUDING, BUT NOT LIMITED TO, THE
DEGREE OF PREJUDICE TO OTHER BIDDERS OR THE INTEGRITY OF THE COMPETITIVE
BIDDING SYSTEM, THE GOOD FAITH OF THE PARTIES, THE EXTENT OF
PERFORMANCE, THE COST TO THE GOVERNMENT, AND THE URGENCY OF THE
PROCUREMENT. SEE SYSTEM DEVELOPMENT CORPORATION, B-191195, AUGUST 31,
1978, 78-2 CPD 159, AND CASES CITED THEREIN. IN THIS REGARD GSA
INDICATES THAT IT HAS ALREADY ACCEPTED TWO OUT OF SEVEN CAR LOADS OF
BRIQUETTES AND THE REMAINING QUANTITY HAS BEEN CAR-LOADED AND IS READY
FOR SHIPMENT. GSA FURTHER INDICATES THAT BASED ON INFORMATION SUPPLIED
TO IT BY HUSKY, TERMINATION COSTS WOULD TOTAL $14,531. CONSEQUENTLY,
GSA BELIEVES THAT TERMINATION FOR CONVENIENCE WOULD NOT BE IN THE BEST
INTERESTS OF THE GOVERNMENT. WE DO NOT AGREE.
FIRST, IT APPEARS THAT THERE IS NO URGENT NEED FOR DELIVERY OF THE
REMAINING QUANTITY OF BRIQUETTES. IN FACT GSA HAS HELD UP SHIPMENT OF
THE REMAINING BRIQUETTES FOR OVER THREE MONTHS WHILE IT TESTED HUSKY'S
BRIQUETTES TO DETERMINE WHETHER THEY WERE IN COMPLIANCE WITH THE
SPECIFICATIONS AND, AFTER DETERMINING THE BRIQUETTES WERE NOT, WHILE IT
DECIDED WHETHER TO TERMINATE HUSKY'S CONTRACT FOR DEFAULT. (TO DATE NO
SUCH DECISION HAS BEEN MADE.) SECONDLY, WE DO NOT BELIEVE THE COST TO
THE GOVERNMENT TO TERMINATE THE CONTRACT OUTWEIGHS THE INTEREST OF THE
GOVERNMENT IN PROTECTING THE INTEGRITY OF THE COMPETITIVE BIDDING
SYSTEM. ACCORDINGLY, WE ARE RECOMMENDING THAT GSA TERMINATE HUSKY'S
CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT AND AWARD A CONTRACT TO
STOTT FOR THE REMAINING QUANTITY, UNLESS GSA CONCLUDES THAT TERMINATION
OF THE CONTRACT FOR DEFAULT IS WARRANTED. IN THAT CASE, WE ARE
RECOMMENDING THAT GSA CONSIDER AWARDING THE REPROCUREMENT CONTRACT TO
STOTT.
PROTEST SUSTAINED.
B-194580, JUL 31, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ALLEGATION THAT AGENCY'S PROPOSED PURCHASE OF TELEPHONE EQUIPMENT
IS CONTRARY TO OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR A-76,
OFFICE OF TELECOMMUNICATIONS POLICY (OTP) CIRCULAR NO. 13 AND DEPARTMENT
OF DEFENSE DIRECTIVE 4100.15 IS NOT FOR CONSIDERATION UNDER GAO BID
PROTEST PROCEDURES BECAUSE DETERMINATION IS MATTER OF EXECUTIVE POLICY.
2. AGENCY'S DETERMINATION TO PURCHASE TELEPHONE EQUIPMENT AND NOT TO
CONSIDER LEASE OF EQUIPMENT IS NOT UNDULY RESTRICTIVE OF COMPETITION
WHERE GOVERNMENT OWNERSHIP AND MAINTENANCE IS NECESSARY IN CASE OF
NATURAL DISASTER (FLOOD CONDITIONS) OR NATIONAL EMERGENCY.
ST. JOSEPH TELEPHONE & TELEGRAPH COMPANY:
ST. JOSEPH TELEPHONE & TELEGRAPH COMPANY (ST. JOSEPH) PROTESTS ANY
AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) DACW01-79-B-0085,
ISSUED BY THE CORPS OF ENGINEERS. THE IFB REQUESTED BIDS FOR THE
PURCHASE OF A PRIVATE AUTOMATIC BRANCH EXCHANGE (PABX) TELEPHONE SYSTEM
FOR THE JIM WOODRUFF POWERHOUSE, FLORIDA. BID OPENING HAS BEEN
POSTPONED PENDING RESOLUTION OF THIS PROTEST.
ST. JOSEPH MAINTAINS THAT THE IFB UNDULY RESTRICTS COMPETITION BY
EXCLUDING FIRMS, LIKE ITSELF, WHICH WOULD OFFER TO LEASE AND MAINTAIN,
RATHER THAN SELL, THE EQUIPMENT TO THE CORPS. ST. JOSEPH ALSO CONTENDS
THAT THE CORPS' DETERMINATION TO BUY THE EQUIPMENT (CORPS OWNERSHIP) IS
INCONSISTENT WITH THE POLICY REQUIREMENTS OF OFFICE OF MANAGEMENT AND
BUDGET (OMB) CIRCULAR A-76, DEPARTMENT OF DEFENSE (DOD) DIRECTIVE
4100.15, AND OFFICE OF TELECOMMUNICATIONS POLICY (OTP) CIRCULAR NO. 13.
FOR THE FOLLOWING REASONS WE DISMISS THE OBJECTION BASED ON THE POLICY
REQUIREMENTS OF THE REFERENCED CIRCULARS AND DIRECTIVE AND DENY THE
REMAINDER OF THE PROTEST.
OMB CIRCULAR A-76, DOD DIRECTIVE 4100.15 AND OTP CIRCULAR NO. 13
ESTABLISH GOVERNMENT POLICY OUTLINING WHEN THE GOVERNMENT SHOULD RELY ON
THE PRIVATE SECTOR TO PROVIDE SUPPLIES AND SERVICES WHICH THE GOVERNMENT
MIGHT OTHERWISE PROVIDE ITSELF. IN THIS CONNECTION, THE CORPS ARGUES
THAT THIS CASE FALLS WITHIN AN ENUMERATED EXCEPTION TO OMB CIRCULAR A-76
WHICH MANDATES THAT "GOVERNMENT FUNCTIONS" SUCH AS THE REGULATION OF
"NAVIGABLE RIVERS AND OTHER NATURAL RESOURCES" MUST BE PERFORMED BY
GOVERNMENT PERSONNEL. WE HAVE REPEATEDLY HELD THAT DETERMINATIONS MADE
UNDER THESE AUTHORITIES, SUCH AS, TO OPERATE AND MAINTAIN EQUIPMENT WITH
GOVERNMENT PERSONNEL, ARE MATTERS OF EXECUTIVE POLICY WHICH ARE OUTSIDE
THE SCOPE OF THE BID PROTEST DECISION-MAKING PROCESS. RAND INFORMATION
SYSTEMS, B-192608, SEPTEMBER 11, 1978, 78-2 CPD 189. THIS PORTION OF
THE PROTEST, THEREFORE, IS DISMISSED.
WE WILL CONSIDER, HOWEVER, WHETHER THE IFB LIMITING THE PROCUREMENT
TO PURCHASE OF EQUIPMENT WAS UNDULY RESTRICTIVE. SEE GENERAL TELEPHONE
COMPANY OF CALIFORNIA (GTC), B-189430, JULY 6, 1978, 78-2 CPD 9. WHILE
THE CORPS IS REQUIRED TO SECURE THE MAXIMUM PRACTICABLE COMPETITION ON
ITS PROCUREMENTS, THE DETERMINATION OF ITS MINIMUM NEEDS AND THE METHODS
OF ACCOMMODATING THEM ARE MATTERS FOR THE CORPS, AND ARE NOT SUBJECT TO
LEGAL OBJECTION BY THIS OFFICE UNLESS THE PROTESTER CLEARLY SHOWS THAT
THE AGENCY'S JUDGMENT IS UNREASONABLE AND RESULTED IN AN UNDUE
RESTRICTION ON COMPETITION. GTC, SUPRA.
HERE, THE CORPS DETERMINED THAT IT WAS ESSENTIAL THAT THE GOVERNMENT
OWN RATHER THAN LEASE THE EQUIPMENT. THE CORPS EXPLAINS THAT IN TIMES
OF NATIONAL EMERGENCY OR NATURAL DISASTER (FLOOD CONTROL PERIODS), THE
GOVERNMENT MUST HAVE EXCLUSIVE ACCESS TO AND CONTROL OVER THIS FACILITY
AND EQUIPMENT BECAUSE THE FACILITY WILL SERVE AS A DISASTER CONTROL
COMMAND POST AT SUCH TIME. THEREFORE, THE CORPS SPECIFICALLY REQUIRED
THAT THE BIDDER TRAIN GOVERNMENT PERSONNEL IN THE OPERATION AND
MAINTENANCE OF THE EQUIPMENT. THE CORPS ADVISES THAT IN A LEASING
SITUATION, THE GOVERNMENT WOULD HAVE NO SUPERVISORY CONTROL OVER THE
LESSOR'S EMPLOYEES AND THESE EMPLOYEES MIGHT REFUSE TO COME TO THE
FACILITY. ALTHOUGH THE OPERATING FACILITIES WILL BE ACCESSIBLE TO
ESCORTED NON-FEDERAL EMPLOYEES, UNDER NO CIRCUMSTANCES WILL NON-FEDERAL
EMPLOYEES BE PERMITTED IN THE RADIO AND MICROWAVE FACILITIES. IN THIS
CONNECTION, THE CORPS STATES THAT IF A NON-FEDERAL EMPLOYEE NEEDED A
GOVERNMENT ESCORT, THIS WOULD, ESPECIALLY IN TIMES OF NATIONAL
EMERGENCY, TAKE GOVERNMENT PERSONNEL AWAY FROM OTHER IMPORTANT DUTIES.
THEREFORE, THE CORPS REQUIRES GOVERNMENT PERSONNEL TO OPERATE AND
MAINTAIN THE EQUIPMENT.
THE PROTESTER CITES PENINSULA TELEPHONE AND TELEGRAPH CO., B-192171,
MARCH 14, 1979, 58 COMP. GEN. ___, 79-1 CPD 176 AS CONTROLLING. IN THAT
CASE, THE AGENCY REQUESTED OFFERS FOR THE PURCHASE OF A NEW
COMMUNICATIONS SYSTEM. WE HELD THAT A SOLICITATION WHICH DID NOT PERMIT
CONSIDERATION OF OFFERS TO LEASE EQUIPMENT NEEDED FOR AN ENTIRELY NEW
SYSTEM WAS UNDULY RESTRICTIVE WHERE THE AGENCY'S DETERMINATION TO
PRECLUDE A LEASING ARRANGEMENT WAS BASED SOLELY ON AN EARLIER ANALYSIS
OF COMPARATIVE COST TO UPGRADE AN EXISTING SYSTEM. WE STATED THAT:
"*** ANTICIPATED PRICING MAY NOT BE ASSERTED AS A DEFENSE TO A
RESTRICTIVE SPECIFICATION WHERE AT LEAST ONE OFFEROR ASSERTS THAT HE CAN
AND WILL OFFER A LOWER PRICE IF PERMITTED TO DO SO."
UNLIKE THE SITUATION IN PENINSULA, THE CORPS DOES NOT REST ITS
DECISION ON AN INCONCLUSIVE COMPARATIVE COST ANALYSIS OF PURCHASING OR
LEASING THE EQUIPMENT. RATHER, THE CORPS RELIES ON THE NEED TO MAINTAIN
COMPLETE CONTROL OVER THE FACILITY AND EQUIPMENT IN PERFORMING A
GOVERNMENTAL FUNCTION DURING TIMES OF NATIONAL EMERGENCY AND NATURAL
DISASTER.
WE HAVE PREVIOUSLY HELD THAT AN AGENCY'S DESIRE TO OWN RATHER THAN
LEASE TELEPHONE EQUIPMENT IS NOT LEGALLY OBJECTIONABLE WHEN IT IS BASED
ON A NEED TO MAINTAIN A CORPS OF GOVERNMENT PERSONNEL TRAINED IN THE
OPERATION AND MAINTENANCE OF SUCH EQUIPMENT IN CASE OF AN EMERGENCY
(COMBAT READINESS). GENERAL TELEPHONE COMPANY OF CALIFORNIA, SUPRA.
ST. JOSEPH PROPOSES ONLY TO USE ITS OWN PERSONNEL RATHER THAN ALLOW
GOVERNMENT PERSONNEL TO MAINTAIN THE SYSTEM. UNDER THE CIRCUMSTANCES OF
THIS CASE, THEREFORE, WE MUST CONCLUDE THAT THE CORPS HAS A LEGITIMATE
BASIS UPON WHICH TO RESTRICT THIS PROCUREMENT TO A PURCHASE ONLY
PROCUREMENT.
ALTHOUGH THE PROTESTER STATES THAT IT COULD MEET THE ON-CALL
MAINTENANCE AND SECURITY REQUIREMENTS OF THE CORPS, ST. JOSEPH HAS NOT
SHOWN THAT THE CORPS' DETERMINATION TO PURCHASE RATHER THAN LEASE THE
EQUIPMENT BASED ON ITS NEED TO MAINTAIN COMPLETE CONTROL OVER THE
EQUIPMENT INCLUDING MAINTENANCE BY GOVERNMENT PERSONNEL IS UNREASONABLE.
PRECLUDING ONE OR MORE POTENTIAL OFFERORS FROM A PARTICULAR
COMPETITION DOES NOT RENDER THE COMPETITION UNDULY RESTRICTIVE IF THE
SPECIFICATIONS REPRESENT THE LEGITIMATE NEEDS OF THE GOVERNMENT.
MEMOREX CORPORATION, B-187497, MARCH 14, 1977, 77-1 CPD 187. WE BELIEVE
THE AGENCY HAS STATED A REASONABLE BASIS FOR REQUIRING DIRECT CONTROL OF
THE EQUIPMENT.
THE PROTEST IS DENIED.
B-194957.2, JUL 31, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PRIOR DECISION DISMISSING PROTEST AS UNTIMELY IS AFFIRMED AND
PROTEST WILL NOT BE CONSIDERED SINCE MATTER DOES NOT RAISE A
"SIGNIFICANT" ISSUE WITHIN MEANING OF BID PROTEST PROCEDURES.
2. WHERE INITIAL PROTEST IS UNTIMELY, TIMELY RECEIPT OF PROTESTER'S
COMMENTS ON AGENCY REPORT DOES NOT PROVIDE A BASIS TO ISSUE DECISION ON
MERITS.
BUCKS COUNTY ASSOCIATION FOR THE BLIND - RECONSIDERATION:
BUCKS COUNTY ASSOCIATION FOR THE BLIND (BUCKS COUNTY) REQUESTS
RECONSIDERATION OF OUR DECISION BUCKS COUNTY ASSOCIATION FOR THE BLIND,
B-194957, JUNE 28, 1979, 79-1 CPD 471, DISMISSING ITS PROTEST AS
UNTIMELY. FOR THE REASONS THAT FOLLOW, WE FIND NO BASIS FOR
RECONSIDERATION.
IN ITS INITIAL PROTEST, BUCKS COUNTY PROTESTED ANY AWARD OF CONTRACTS
BY THE DEFENSE LOGISTICS AGENCY UNDER INVITATIONS FOR BIDS
DLA-13H-79B-8440 AND DLA-13H-79B-8465. BUCKS COUNTY ARGUED THAT THE
DEPARTMENT OF LABOR WAGE RATE DETERMINATION PURSUANT TO THE SERVICE
CONTRACT ACT OF 1965 (SCA), 41 U.S.C. 351 ET SEQ. (1976), SHOULD HAVE
SPECIFIED A UNIFORM NATION-WIDE RATE RATHER THAN THE DIFFERENT RATES
PREVAILING IN THE LOCALITIES WHERE THE SERVICES WOULD BE PERFORMED. IN
ADDITION, BUCKS COUNTY PROTESTED THAT THE JOB CLASSIFICATIONS UTILIZED
IN THE SOLICITATIONS WERE NOT UNIFORM IN NUMBER OR TITLE FOR THE
DIFFERENT SECTIONS OF THE COUNTRY.
BUCKS COUNTY NOW CONTENDS THAT ITS PROTEST SHOULD HAVE BEEN
CONSIDERED ON ITS MERITS BECAUSE THE PROTEST RAISES ISSUES SIGNIFICANT
TO PROCUREMENT PRACTICE AND PROCEDURE AND THEREFORE SHOULD BE
RECONSIDERED IN ACCORDANCE WITH SEC. 20.2(C) OF OUR BID PROTEST
PROCEDURES (PROCEDURES), 4 C.F.R. PART 20 (1979).
SECTION 20.2(C) OF OUR PROCEDURES DOES PERMIT, AMONG OTHER THINGS,
CONSIDERATION OF UNTIMELY PROTESTS WHERE ISSUES SIGNIFICANT TO
PROCUREMENT PRACTICES ARE RAISED. THE SIGNIFICANT ISSUE EXCEPTION IS
LIMITED TO MATTERS WHICH ARE OF WIDESPREAD INTEREST TO THE PROCUREMENT
COMMUNITY. WE HAVE HELD THAT WHERE A PROTEST INVOLVES ISSUES WHICH HAVE
BEEN CONSIDERED IN PRIOR DECISIONS, SUCH ISSUES ARE NOT "SIGNIFICANT."
SEE JONES & GUERRERO CO., INCORPORATED, B-192328, OCTOBER 23, 1978, 78-2
CPD 296. THE USE OF LOCAL VERSUS NATIONWIDE WAGE RATE DETERMINATIONS BY
THE DEPARTMENT OF LABOR HAS BEEN CONSIDERED IN PAST DECISIONS OF OUR
OFFICE. SEE 53 COMP. GEN. 370 (1973); THE CAGE COMPANY OF ABILENE,
INC., 57 COMP. GEN. 549 (1978), 78-1 CPD 430; THE CAGE COMPANY OF
ABILENE, INC., B-189335, JULY 26, 1978, 78-2 CPD 72. THEREFORE, THE
SAME ISSUE IS NOT "SIGNIFICANT" WITHIN THE MEANING OF 20.2(C) OF OUR
PROCEDURES, SUPRA.
ALTHOUGH WE HAVE NOT DIRECTLY ADDRESSED THE PROPRIETY OF UTILIZING
JOB CLASSIFICATIONS THAT VARY IN TITLE AND NUMBER IN SOLICITATIONS FOR
THE SAME WORK IN DIFFERENT REGIONS OF THE COUNTRY, WE BELIEVE THAT THIS
ISSUE DOES NOT RAISE A "SIGNIFICANT" QUESTION. THE JOB CLASSIFICATIONS
INCLUDED IN THE SOLICITATIONS FOR DIFFERENT REGIONS OF THE COUNTRY
APPARENTLY REFLECT THE SERVICE EMPLOYEES THAT ARE CUSTOMARILY EMPLOYED
IN THE PARTICULAR REGION. IF ANY SERVICE EMPLOYEES HAVE BEEN OMITTED,
DEPARTMENT OF LABOR REGULATIONS PROVIDE AN ORDERLY METHOD BY WHICH SUCH
OMITTED EMPLOYEES CAN BE APPROPRIATELY CLASSIFIED AND AFFORDED SCA
PROTECTION. SEE 29 C.F.R. 4.6(B)(1978); MIDWEST SERVICE AND SUPPLY
CO. AND MIDWEST ENGINE INCORPORATED, B-191554, JULY 13, 1978, 78-2 CPD
34.
BUCKS COUNTY ALSO ARGUES THAT SINCE IT FILED A TIMELY RESPONSE TO THE
AGENCY REPORT IN THIS CASE, THE MERITS OF THE PROTEST SHOULD HAVE BEEN
CONSIDERED. WHERE THE INITIAL PROTEST IS UNTIMELY, A TIMELY RECEIPT OF
COMMENTS ON AN AGENCY REPORT DOES NOT PROVIDE A BASIS FOR OUR OFFICE TO
ISSUE A DECISION ON THE MERITS. BERZ AMBULANCE SERVICE, INC., B-187349,
JUNE 8, 1977, 77-1 CPD 411; DEL NORTE TECHNOLOGY, INC., B-182318,
JANUARY 27, 1975, 75-1 CPD 53. THEREFORE, IT WOULD BE INAPPROPRIATE FOR
OUR OFFICE TO CONSIDER ON THE MERITS THE UNTIMELY PROTEST IN THIS CASE,
SINCE THE EFFECT OF IGNORING THE UNTIMELINESS COULD BE TO UNDERMINE THE
BID PROTEST PROCEDURES.
THEREFORE, OUR JUNE 28, 1979 DECISION IS AFFIRMED.
B-195369, JUL 31, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST CONCERNING SMALL BUSINESS STATUS OF LOW BIDDER IS BY LAW
MATTER FOR DECISION BY SBA AND NOT FOR CONSIDERATION BY GAO.
LU-SAN ENTERPRISES, INC.:
LU-SAN ENTERPRISES, INC. (LU-SAN), A SMALL BUSINESS, PROTESTS THE
PROPOSED AWARD OF A CONTRACT BY THE GENERAL SERVICES ADMINISTRATION
(GSA) TO THE LOW BIDDER, KENTUCKY BUILDING MAINTENANCE, INC. (KENTUCKY),
UNDER SOLICITATION NO. 2PBC-DD-19,474. THE PROCUREMENT IS FOR
JANITORIAL AND ELEVATOR OPERATION SERVICES AND IS SET ASIDE FOR SMALL
BUSINESS.
LU-SAN CONTENDS THAT KENTUCKY DOES NOT MEET THE APPROPRIATE SIZE
STANDARD ESTABLISHED FOR THIS SOLICITATION AND THEREFORE IS NOT A SMALL
BUSINESS.
UNDER 15 U.S.C. SEC. 637(B) (1976), THE SMALL BUSINESS ADMINISTRATION
IS EMPOWERED TO CONCLUSIVELY DETERMINE MATTERS OF SMALL BUSINESS SIZE
STATUS FOR FEDERAL PROCUREMENT AND SALES PURPOSES AND THESE
DETERMINATIONS ARE NOT SUBJECT TO GAO REVIEW. CARDAN COMPANY, B-193839,
JANUARY 31, 1979, 79-1 CPD 76; ADVANCE BUILDING MAINTENANCE CO.,
B-193819, JANUARY 30, 1979, 79-1 CPD 72. UNDER THE APPLICABLE
REGULATIONS, A PROTEST AGAINST THE SIZE STATUS OF ANOTHER BIDDER SHOULD
BE SENT, IN A TIMELY MANNER, TO THE CONTRACTING OFFICER RESPONSIBLE FOR
THE PROCUREMENT, WHO IN TURN SHALL PROMPTLY FORWARD IT TO THE SBA
DISTRICT OFFICE WHICH SERVES THE GEOGRAPHICAL AREA WHERE THE PROTESTED
CONCERN IS LOCATED. FEDERAL PROCUREMENT REGULATIONS SEC. 1-1.703-2
(1964 ED. AMEND. 192).
WE NOTE THAT LU-SAN HAS REFERRED THE MATTER TO THE CONTRACTING
OFFICER AS REQUIRED. THEREFORE, THE PROTEST IS DISMISSED.
B-191336, JUL 30, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST CONCERNING WHETHER PROCUREMENT SHOULD BE NEGOTIATED OR
ADVERTISED, THE FORMATS USED TO ISSUE RFP AND AMENDMENTS THERETO AND
OTHER MATTERS THAT CONCERN ALLEGED IMPROPRIETIES IN THE SOLICITATION ARE
UNTIMELY RAISED UNDER OUR BID PROTEST PROCEDURES WHEN FILED AFTER THE
CLOSING DATE SET FOR RECEIPT OF PROPOSALS.
2. WHERE TECHNICAL EVALUATION OF PROPOSALS DISCLOSED NO MATERIAL
DIFFERENCES WHICH JUSTIFIES AWARD ON BASIS OF TECHNICAL SUPERIORITY,
AWARD ON BASIS OF LOWEST ESTIMATED PRICE WAS PROPER AND IN ACCORDANCE
WITH SOLICITATION AWARD CRITERIA.
3. AGENCY'S USE OF LETTER, RATHER THAN STANDARD FORM PRESCRIBED BY
REGULATIONS, TO AMEND RFP IS A PROCEDURAL RATHER THAN A SUBSTANTIVE
DEFECT WHICH IS NOT PREJUDICIAL TO AGENCY OR ANY OFFEROR WHEN ALL
OFFERORS ARE NOTIFIED OF THE CHANGES MADE AND ACKNOWLEDGE THEM IN BEST
AND FINAL OFFER.
4. COMMUNICATION WITH ONE OFFEROR AFTER RECEIPT OF "BEST AND FINAL"
OFFERS TO RESOLVE MINOR INFORMALITIES AND APPARENT CLERICAL MISTAKES IN
OFFEROR'S PROPOSAL WAS NOT CONDUCT OF DISCUSSIONS WITH THE OFFEROR WHICH
NECESSITATED DISCUSSIONS WITH OTHER OFFEROR IN COMPETITIVE RANGE.
TELEPROMPTER OF SAN BERNADINO, INC.:
TELEPROMPTER OF SAN BERNADINO, INC. (TELEPROMPTER), PROTESTS THE
AWARD OF A FRANCHISE AGREEMENT FOR A 10 YEAR TERM TO FOLEY AND
ASSOCIATES, INCORPORATED (FOLEY) FOR A CABLE TELEVISION (CATV) SYSTEM AT
NORTON AIR FORCE BASE, CALIFORNIA UNDER REQUEST FOR PROPOSALS (RFP)
F04607-77-R9097.
TELEPROMPTER, THE INCUMBENT FRANCHISE HOLDER, ASSERTS THAT THE AIR
FORCE FAILED TO AWARD THE FRANCHISE AGREEMENT ON THE BASIS OF THE
CRITERIA CONTAINED IN THE RFP AND THE PROVISIONS OF THE DEFENSE
ACQUISITION REGULATION (DAR) AND THAT THE RFP AND THE NEGOTIATIONS WITH
THE OFFERORS CONTAINED NUMEROUS DEFICIENCIES WHICH PREJUDICED
TELEPROMPTER. TELEPROMPTER REQUESTS THIS OFFICE TO DECLARE THE AWARD TO
FOLEY INVALID AND TO DIRECT THE AIR FORCE TO AWARD THE FRANCHISE TO
TELEPROMPTER OR CONDUCT A NEW SOLICITATION CONSISTENT WITH LAW AND
REGULATIONS. THE THRUST OF THE PROTEST CENTERS ON TELEPROMPTER'S BELIEF
THAT THE AIR FORCE ERRED IN AWARDING THE FRANCHISE ON THE BASIS OF PRICE
AFTER IT CONCLUDED THAT THE SYSTEMS AND FEATURES PROPOSED BY BOTH
OFFERORS WERE, ON BALANCE, ESSENTIALLY EQUAL.
FOR THE REASONS SET FORTH HEREIN, THE PROTEST IS DISMISSED IN PART
AND DENIED IN PART.
BACKGROUND
THE RFP INCORPORATED THE REQUIREMENTS OF A DRAFT REVISION OF AIR
FORCE REGULATION (AFR) 70-3 WHICH SETS FORTH POLICIES AND PROCEDURES FOR
CATV SYSTEMS ON AIR FORCE INSTALLATIONS. THE AUTHORITY FOR THE AWARD OF
THESE FRANCHISE AGREEMENTS IS CONTAINED IN 16 U.S.C. 420 (1976) AND 43
U.S.C. 961 (1976). THESE STATUTES AUTHORIZE THE HEADS OF FEDERAL
DEPARTMENTS TO GRANT EASEMENTS ON FEDERAL REAL PROPERTY, INCLUDING
MILITARY RESERVATIONS, FOR, INTER ALIA, TELEVISION AND OTHER FORMS OF
COMMUNICATIONS FACILITIES. IN THE CASE OF CATV FRANCHISES, THE MAJORITY
OF THE FEES PROPOSED WILL BE BORNE BY THE SUBSCRIBERS TO THE CATV
SERVICE, I.E., OCCUPANTS OF ON AND OFF-BASE HOUSING, AIRMEN'S
DORMITORIES AND BACHELOR OFFICERS' QUARTERS, WITH A PORTION PAYABLE BY
THE GOVERNMENT FOR SERVICES RENDERED TO APPROPRIATED FUND ACTIVITIES.
ELEVEN FIRMS WERE SOLICITED BUT ONLY PROPOSALS FROM FOLEY AND
TELEPROMPTER WERE RECEIVED. ORAL DISCUSSIONS WERE HELD WITH BOTH
OFFERORS, AFTER WHICH "BEST AND FINAL" OFFERS WERE REQUESTED. CHANGES
IN THE SOLICITATION NECESSITATED SECOND "BEST AND FINAL" (COST) OFFERS
WHICH WERE RECEIVED AS FOLLOWS:
ESTIMATED 10 YR.
ITEM AMOUNT NUMBER TOTAL
1. USER FEE PER MONTH
FOR INITIAL OUTLETS 381
FOLEY $6.85 $313,182
TELEPROMPTER 7.00 320,040
2. USER FEE PER MONTH
FOR ADDITIONAL OUT- 163 LETS
FOLEY 1.50 29,340
TELEPROMPTER 1.80 35,208
3. CONNECTION FEE
(INITIAL HOOKUP) A. INDIVIDUAL 1
RESIDENCES
FOLEY 14.50 14.50
TELEPROMPTER 14.15 14.15 B. DORMITORIES 19
FOLEY 5.00 95.00
TELEPROMPTER 14.15 268.85
ESTIMATED 10 YR.
ITEM AMOUNT NUMBER TOTAL
4. CONNECTION FEES 10
FOR ADDITIONAL OUTLETS
FOLEY $5.00 $5.00*
TELEPROMPTER 9.55 95.55
5. RECONNECTION FEE
FOR SERVICE PRE- VIOUSLY TERMINATED A. RESIDENCES 2085
FOLEY 5.00 5.00*
TELEPROMPTER 9.55 19,911.75 B. DORMITORIES 295
FOLEY 3.00 885.00
TELEPROMPTER 9.55 2,817.25
6. CONNECTION FEE FOR 5
RELOCATION OF OUTLET
FOLEY 5.00 25.00
TELEPROMPTER 9.55 47.75
TOTALS
FOLEY $354,016.50(FN1)
TELEPROMPTER $378,403.30
TERMINATION CHARGES FOR WHICH THE GOVERNMENT WOULD BE RESPONSIBLE IN
THE EVENT OF A TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT WERE
SPECIFIED BY FOLEY TO BE $49,903.00, AND BY TELEPROMPTER AS $90,454.32.
BY THE TERMS OF THE TERMINATION FOR CONVENIENCE CLAUSE, THESE CHARGES
WERE TO REPRESENT AN AMOUNT "NOT TO EXCEED THE FIXED INSTALLATION COSTS
FOR THE CATV SYSTEM" LESS SALVAGE VALUE, AND WERE TO BE REDUCED BY A SUM
EQUAL TO 1/120TH OF THE TOTAL FOR EACH MONTH THE FRANCHISE AGREEMENT WAS
IN "FULL SERVICE" PRIOR TO THE DATE OF TERMINATION.
IN ADDITION TO FOLEY'S APPARENT FAILURE TO EXTEND ITS UNIT PRICES FOR
ITEMS 4 AND 5(A) BY THE ESTIMATED QUANTITIES SET FORTH IN THE
SOLICITATION, WHICH THE AIR FORCE ASSUMED WAS THE RESULT OF A "CLERICAL
ERROR," FOLEY REPRESENTED ITS TERMINATION CHARGES TO BE "THE AMOUNT OF
NET REVENUE LOSS WHICH WOULD OCCUR" IF THE CONTRACT WERE TERMINATED FOR
THE CONVENIENCE OF THE GOVERNMENT, WHILE ITS PREVIOUSLY SUBMITTED DATA
SHOWED THE TERMINATION CHARGE AS BEING BASED ON THE INSTALLATION COSTS.
FOLEY ALSO FAILED TO INDICATE THE TELEPHONE NUMBER FOR ITS REPAIR
SERVICE. THUS ON THE SAME DATE BEST AND FINAL OFFERS WERE RECEIVED, THE
AIR FORCE CONTACTED FOLEY BY TELEPHONE TO CLEAR UP "THESE MINOR
IRREGULARITIES." FOLEY'S RESPONSE, WHICH WAS ACCEPTABLE TO THE AIR
FORCE, WAS LATER CONFIRMED IN WRITING.
THE AIR FORCE ACCEPTED FOLEY'S CORRECTED PROPOSAL BECAUSE IT OFFERED
"CONSIDERABLE REDUCTION IN ALL AREAS OF COST WHICH WILL BE PASSED ON TO
MILITARY PERSONNEL AND THEIR FAMILIES" AND "THE OTHER FACTORS LISTED IN
THE BASIS OF AWARD DO NOT OUTWEIGH THE AMOUNT OF THE DIFFERENCE IN
ESTIMATED TOTAL (ITEMS 1-6)." AWARD WAS MADE TO FOLEY FOR THE TEN YEAR
TERM BEGINNING JUNE 15, 1978. TELEPROMPTER FILED ITS PROTEST SUBSEQUENT
TO THE DATE OF AWARD.
UNTIMELY ISSUES
THE PROTESTER HAS RAISED A NUMBER OF ISSUES WHICH RELATE TO THE
SOLICITATION PACKAGE ITSELF. THESE INCLUDE THE AUTHORITY UNDER WHICH
THE PROCUREMENT WAS NEGOTIATED, WHETHER THE PROCUREMENT SHOULD HAVE BEEN
FORMALLY ADVERTISED, THE FORM USED TO MAKE CHANGES IN THE SOLICITATION,
AND THE ABSENCE OF SOME INDICATION OF THE RELATIVE IMPORTANCE OF THE
LISTED EVALUATION FACTORS.
IT IS CLEAR THAT ALL OF THESE ISSUES INVOLVE ALLEGED IMPROPRIETIES IN
THE SOLICITATION WHICH WERE APPARENT PRIOR TO THE DATE SET FOR RECEIPT
OF PROPOSALS. PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN A
SOLICITATION APPARENT PRIOR TO THE CLOSING DATE FOR PROPOSALS MUST BE
FILED PRIOR TO THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS. 4 C.F.R.
20.2(B)(1) (1978). AS THIS PROTEST WAS FILED AFTER CONTRACT AWARD,
THESE ISSUES ARE UNTIMELY AND WILL NOT BE CONSIDERED ON THEIR MERITS.
AAI CORPORATION, B-192346, NOVEMBER 3, 1978, 78-2 CPD 320.
HOWEVER, WE NOTE THAT THE ALLEGED DEFICIENCY IN THE EVALUATION
CRITERIA IS SIMILAR TO THE DEFICIENCY WE FOUND IN FRONTIER BROADCASTING
COMPANY, D/B/A CABLE COLORVISION, 53 COMP. GEN. 676 (1974), 74-1 CPD
138. THE AIR FORCE ACKNOWLEDGES THAT THE DEFICIENT EVALUATION CRITERIA
USED IN THAT CASE WERE NOT COMPLETELY CHANGED AS RECOMMENDED IN
FRONTIER, BUT ADVISES THAT THE DEFICIENCY WILL BE CORRECTED WHEN REVISED
AIR FORCE REGULATION 70-3, WHICH SETS FORTH THE EVALUATION FACTORS TO BE
INCLUDED IN SOLICITATIONS FOR THIS TYPE OF SERVICE, IS ISSUED.
PROPOSAL EVALUATION
TELEPROMPTER ASSERTS THAT THE EVALUATION CRITERIA SET FORTH IN THE
RFP WERE NOT PROPERLY APPLIED. THE CRITERIA WERE SET FORTH AS FOLLOWS:
"A. AWARD SHALL, AS A GENERAL RULE, BE MADE TO THAT RESPONSIBLE,
RESPONSIVE OFFEROR SUBMITTING THE LOWEST PRICE IN THE BLANK IN SCHEDULE
A (CATV CONTRACTOR'S FEES) ENTITLED 'ESTIMATED TOTAL (ITEMS 1-6),'
EXCEPT THAT AWARD MAY BE MADE TO OTHER THAN THE LOWEST OFFEROR IF
JUSTIFIED BY MATERIAL DIFFERENCES IN THE CONFIGURATIONS OF THE PROPOSED
SYSTEMS, THE QUALITY OF THE EQUIPMENT OFFERED, THE NATURE OF
SUPPLEMENTARY SERVICES OFFERED, REPAIR CAPABILITIES, OR THE DEMANDS THAT
WILL BE MADE WITH REGARD TO GOVERNMENT-FURNISHED PROPERTY, AND THE
GOVERNMENT'S LIABILITY UPON TERMINATION FOR CONVENIENCE OF THE
GOVERNMENT."
THUS, THE EVALUATION CRITERIA MADE PRICE THE MOST SIGNIFICANT FACTOR
IN DETERMINING AWARD UNLESS THERE WERE MATERIAL DIFFERENCES BETWEEN THE
PROPOSALS IN CERTAIN DESIGNATED AREAS.
TELEPROMPTER BELIEVES THAT THERE WERE SUCH DIFFERENCES, AND THAT ITS
PROPOSAL DID NOT RECEIVE SUFFICIENT CREDIT FOR THOSE NON-COST FACTORS.
FOR EXAMPLE, TELEPROMPTER ASSERTS THAT INSUFFICIENT CONSIDERATION WAS
GIVEN IN THE EVALUATION OF THE SUPPLEMENTARY (PREMIUM PROGRAMMING)
SERVICE IT OFFERED FOR SUBSCRIBERS KNOWN AS HOME BOX OFFICE (HBO). HBO,
FOR AN ADDITIONAL MONTHLY FEE AND ONE-TIME CONNECTION CHARGE, ALLOWS
SUBSCRIBERS TO RECEIVE RECENTLY RELEASED MOTION PICTURES AND OTHER
SPECIAL PROGRAMMING. TELEPROMPTER CLAIMS THAT APPROXIMATELY 33 PERCENT
OF THE INDIVIDUAL SUBSCRIBERS TO ITS CATV SYSTEM AT NORTON ALSO
SUBSCRIBE TO HBO WHICH IT BELIEVES INDICATES A HIGH DEGREE OF ACCEPTANCE
AND DEMAND FOR THIS SUPPLEMENTARY SERVICE. TELEPROMPTER ALSO CLAIMS
THAT ITS EXISTING CATV SYSTEM AT NORTON IS IN GENERAL TECHNICALLY EQUAL
TO THE SYSTEM PROPOSED BY FOLEY AND TECHNICALLY SUPERIOR IN THAT IT IS
"SHADOW-TRUNKED" (DUAL CABLE) WHILE FOLEY'S IS NOT. TELEPROMPTER ALSO
ASSERTS IT HAS A "SUPERIOR" REPAIR CAPABILITY, AND THAT THERE ARE
ADVANTAGES TO ITS SYSTEM STEMMING FROM FEDERAL COMMUNICATIONS COMMISSION
(FCC) SURVEILLANCE OF ITS SYSTEM. WE FIND NO MERIT TO THESE
CONTENTIONS.
AMONG OTHER THINGS, THE TECHNICAL REQUIREMENTS OF THE RFP SPECIFIED
THE FOLLOWING:
"IF THE CATV SYSTEM IS BEING INTRODUCED ON THE BASE FOR THE FIRST
TIME OR IS BEING SUBSTANTIALLY REBUILT, THE SYSTEM SHALL EMPLOY THE
'HUB' CONCEPT *** (AND) *** SHALL BE CONSTRUCTED WITH DUAL OUTGOING
PLANT AS A MINIMUM."
AS THE INCUMBENT FRANCHISEE, TELEPROMPTER PROPOSED TO CONTINUE THE
OPERATION OF ITS EXISTING SYSTEM WITHOUT MODIFICATION. THAT SYSTEM IS
AN EXTENSION OF THE CATV SYSTEM IN OPERATION IN THE NEARBY SAN BERNADINO
AREA AND IS ADMITTEDLY NOT CONFIGURED ON THE "HUB" CONCEPT. ON THE
OTHER HAND, FOLEY, AS REQUIRED BY THE SPECIFICATIONS, PROPOSED THE
INSTALLATION OF A SYSTEM CONFIGURED IN THAT MANNER.
IN EVALUATING PROPOSALS, THE AIR FORCE CONCLUDED THAT FOLEY'S SYSTEM
CONFIGURATION WAS SUPERIOR TO THAT PROPOSED BY TELEPROMPTER AND THUS
GAVE FOLEY A HIGHER RATING FOR THIS ASPECT OF THE PROPOSAL. THE AIR
FORCE POSITION IS THAT THE "HUB" SYSTEM CONFIGURATION IS MORE DESIRABLE
"FOR QUALITY OF RECEPTION, SERVICE, AND OTHER FACTORS."
TELEPROMPTER CHALLENGES THE "SUPERIORITY" OF THE HUB CONFIGURATION AT
THIS PARTICULAR LOCATION, CLAIMING IT MAY BE APPROPRIATE FOR REMOTE
LOCATIONS, BUT NOT WHEN THE MILITARY BASE IS LOCATED IN A "HIGHLY URBAN
AREA" WHICH HAS AN EXISTING NON-HUB SYSTEM. TELEPROMPTER MAINTAINS THAT
THE QUALITY OF THE RECEPTION AT NORTON WITH ITS SYSTEM WOULD BE EQUAL TO
"THE ACCEPTABLE SIGNAL RECEIVED IN THE URBAN COMMUNITY." IN ANY EVENT,
TELEPROMPTER CLAIMS THAT THE LANGUAGE OF THE SPECIFICATIONS (QUOTED
ABOVE) MAKES IT CLEAR "THAT A SYSTEM ALREADY 'IN PLACE' WAS TO BE
CONSIDERED, IN ALL RESPECTS, AS HAVING ALL OF THE DESIRED
CHARACTERISTICS NECESSARY FOR COMPLETE COMPLIANCE WITH THE RFP."
WITH RESPECT TO THE QUALITY OF "RECEPTION, SERVICE, AND OTHER
FACTORS," TELEPROMPTER HAS OFFERED NOTHING BEYOND ITS BASE ASSERTIONS
THAT THE "QUALITY OF RECEPTION" WOULD REMAIN EQUAL TO THE SIGNAL
RECEIVED IN THE CIVILIAN COMMUNITY TO REBUT THE AIR FORCE CONTENTIONS
THAT THE HUB CONFIGURATION IS SUPERIOR TO THE BASE SYSTEM OFFERED BY
TELEPROMPTER. UNDER THESE CIRCUMSTANCES, WE HAVE NO BASIS TO CONCLUDE
THAT THE AIR FORCE TECHNICAL EVALUATION WAS INCORRECT. THE
RESPONSIBILITY FOR SUCH EVALUATIONS RESTS PRIMARILY WITH THE PROCURING
ACTIVITY CONCERNED, AND THE ACTIVITY'S DETERMINATION WILL ORDINARILY BE
ACCEPTED BY THIS OFFICE UNLESS IT IS CLEARLY SHOWN TO BE UNREASONABLE.
SEE SRG PARTNERSHIP, PC, 56 COMP. GEN. 721 (1977), 77-1 CPD 438. IN THE
ABSENCE OF ANY MEANINGFUL EVIDENCE TO THE CONTRARY, WE ARE UNABLE TO
CONCLUDE THAT THE AIR FORCE EVALUATION WAS NOT REASONABLE.
WE ALSO DO NOT AGREE THAT THE AIR FORCE WAS BOUND TO CONSIDER
TELEPROMPTER'S IN-PLACE SYSTEM AS HAVING "ALL OF THE DESIRED
CHARACTERISTICS NECESSARY FOR COMPLETE COMPLIANCE WITH THE RFP." WE
INTERPRET THIS CONTENTION TO MEAN THAT THE IN-PLACE SYSTEM CONFIGURATION
MUST BE CONSIDERED AN EQUAL OF ANY SYSTEM PROPOSED BY A COMPETING FIRM
SIMPLY BECAUSE THE INCUMBENT WAS NOT REQUIRED TO REBUILD OR REPLACE IT.
WE BELIEVE SUCH A CONTENTION IS NOT REASONABLE UNDER THE EVALUATION
CLAUSE, WHICH ADVISED OFFERORS THAT MATERIAL DIFFERENCES IN THE
CONFIGURATIONS OF THE PROPOSED SYSTEMS WOULD BE CONSIDERED IN THE
EVALUATION OF PROPOSALS. THAT PORTION OF THE CLAUSE, WOULD, IN OUR
VIEW, BE ESSENTIALLY MEANINGLESS IF A NON-INCUMBENT WERE NOT ABLE TO
DERIVE THE BENEFIT OF THAT WHICH IS CONSIDERED TO BE A MATERIALLY
SUPERIOR CONFIGURATION MERELY BECAUSE THE INCUMBENT CHOSE TO REMAIN WITH
ITS PRESENT SYSTEM. THUS, WHILE AN INCUMBENT WAS NOT REQUIRED TO
REPLACE OR REBUILD ITS SYSTEM, IT WAS NOT PROHIBITED FROM DOING SO IF IT
BELIEVED THAT WOULD ENHANCE ITS COMPETITIVE POSITION. TELEPROMPTER'S
INTERPRETATION WOULD, IN EFFECT, "FREEZE" THE COMPETITIVE POSITION OF
ITS COMPETITORS TO A LEVEL EQUAL TO ITS OWN, WITH NO INVESTMENT ON ITS
PART. WE FIND NO MERIT TO THIS POSITION.
WITH RESPECT TO THE DUAL CABLE ISSUE, THE CONTRACTING OFFICER'S
REPORT INDICATES THAT THE DUAL CABLE FEATURE WAS PROPOSED BY FOLEY, AND
TELEPROMPTER HAS NOT TAKEN ISSUE WITH THAT ASPECT OF THE REPORT. WE
THEREFORE SEE NO PURPOSE IN FURTHER CONSIDERING THIS ISSUE.
TELEPROMPTER'S ASSERTION THAT IT SHOULD HAVE BEEN RECOGNIZED FOR ITS
SUPERIOR REPAIR CAPABILITY IS BASED ON THE CATV SERVICE IT PROVIDED
UNDER ITS PRIOR FRANCHISE. OTHER THAN REFERRING TO THAT PRIOR SERVICE,
HOWEVER, TELEPROMPTER AGAIN HAS OFFERED NOTHING CONCRETE TO INDICATE
THAT IN FACT IT WAS SUPERIOR TO FOLEY IN THIS AREA. WHILE THE ADEQUACY
OF TELEPROMPTER'S REPAIR SERVICE HAS NOT BEEN QUESTIONED, THE RECORD
SHOWS THAT FOLEY'S PROPOSED REPAIR CAPABILITY WAS ALSO DEEMED
SATISFACTORY ON THE BASIS OF FOLEY'S PROPOSAL TO "SET UP" AN OFFICE IN
THE NORTON AREA AND TO MAN THAT OFFICE ON AN AROUND-THE-CLOCK (24 HOUR)
BASIS AFTER THE SYSTEM WAS IN OPERATION. IN THIS REGARD, TELEPROMPTER
HAS NOT AFFIRMATIVELY DEMONSTRATED THAT FOLEY'S PROPOSED METHOD OF
PROVIDING REPAIR SERVICES WILL RESULT IN SERVICE INFERIOR TO ITS OWN.
LIKEWISE, WE ARE NOT PERSUADED BY TELEPROMPTER'S CLAIM THAT THE
CONTRACTING OFFICER SHOULD HAVE CONSIDERED THAT ITS SYSTEM IS SUBJECT TO
UNSPECIFIED FCC SURVEILLANCE WHILE FOLEY'S IS NOT; OR THAT THE "LOCAL
GOVERNMENT" (SAN BERNADINO) REVIEW OF ITS CIVILIAN SYSTEM SOMEHOW
IMPLIES SUPERIOR PERFORMANCE OF THE TELEPROMPTER SYSTEM.
FIRST OF ALL, CONTRARY TO TELEPROMPTER'S GENERALIZED AND UNSUPPORTED
ASSERTIONS, FOLEY CLAIMS THAT IT IS SUBJECT TO THE FCC'S TECHNICAL
STANDARDS SO THAT THE AIR FORCE WILL APPARENTLY DERIVE THE BENEFIT OF
FCC REGULATIONS TO THAT EXTENT. IN ADDITION, FOLEY POINTS OUT, AND WE
AGREE, THAT THE AIR FORCE IS CAPABLE OF REGULATING THE OPERATION OF THE
NORTON CATV SYSTEM WITHOUT THE BENEFIT OF THE ASSISTANCE OF THE CITY OF
SAN BERNADINO - WHICH WE MIGHT ADD IS NOT EVEN IMPLICITLY REQUIRED BY
THE SPECIFICATIONS.
OF MAJOR CONCERN TO TELEPROMPTER WAS THE AIR FORCE FAILURE TO GIVE IT
SIGNIFICANT CREDIT FOR THE HBO FEATURE AS A SUPPLEMENTARY SERVICE.
ALTHOUGH NOT DEFINED IN THE SOLICITATION, "SUPPLEMENTARY SERVICES"
ARE GENERALLY UNDERSTOOD TO BE SPECIAL TYPE PROGRAMMING NOT AVAILABLE ON
REGULAR TELEVISION CHANNELS. THIS WOULD INCLUDE THE "PREMIUM"
PROGRAMMING SERVICES SUCH AS THE HBO SERVICE AVAILABLE TO SUBSCRIBERS
FROM TELEPROMPTER UNDER ITS PRIOR FRANCHISE. HBO IS NOT "PRODUCED" BY
TELEPROMPTER, AND IT, LIKE OTHER SUCH PROGRAMMING, IS PURCHASED BY CATV
FIRMS FROM OTHER COMPANIES AND MADE AVAILABLE TO SUBSCRIBERS AT THEIR
OPTIONS FOR A PREMIUM OVER AND ABOVE REGULAR MONTHLY SUBSCRIPTION RATES.
SUCH SERVICES ARE CLEARLY NOT AVAILABLE EXCLUSIVELY FROM TELEPROMPTER.
TELEPROMPTER'S "BEST AND FINAL" OFFER ALLUDED TO THE AVAILABILITY OF
ITS HBO SERVICE TO INDIVIDUAL SUBSCRIBERS AND THE BENEFITS TO BE DERIVED
THEREFROM. THE PROPOSAL ASSERTED THAT "THIS IS A MAJOR ADVANTAGE THAT
SHOULD BE GIVEN STRONG WEIGHT IN THE EVALUATION OF OUR PROPOSAL." WE
NOTE, HOWEVER, THAT THE TELEPROMPTER OFFER DID NOT COMMIT ITSELF TO
CONTINUE HBO AND DID NOT SPECIFY THE TERMS UNDER WHICH HBO WOULD BE
PROVIDED. PRESUMABLY TELEPROMPTER WOULD CONTINUE HBO, AS THE SERVICE
PROVIDES IT WITH ADDITIONAL REVENUES, ALTHOUGH UNDER THE TERMS OF ITS
OFFER WAS NOT LEGALLY REQUIRED TO DO SO. THUS, IF IT DESIRED,
TELEPROMPTER COULD APPARENTLY DISCONTINUE THE SERVICE AFTER AWARD,
CHANGE TO ANOTHER PREMIUM PROGRAMMING PACKAGE, AND MODIFY ITS USER
CHARGES OR CONNECTION FEES. THIS "OFFER" WAS THUS ILLUSORY, IN OUR
OPINION, AS IT CONTAINED NO TERMS AND CONDITIONS AND WAS NOT THEREFORE
SUSCEPTIBLE OF ACCEPTANCE BY THE GOVERNMENT. CORBIN ON CONTRACTS SECS.
11, 16 (1963).
WE NOTE THAT FOLEY ALSO VAGUELY "OFFERED" TO PROVIDE SOME UNSPECIFIED
"PREMIUM PROGRAMMING" AS "CUSTOMER REQUIREMENTS DICTATE." THIS "OFFER"
WAS SIMILARLY LEGALLY DEFECTIVE.
NOTWITHSTANDING THE LACK OF MEANINGFUL OFFERS FOR THESE SUPPLEMENTAL
SERVICES, THE RECORD SHOWS THAT THE CONTRACTING OFFICER "WEIGHED THIS
FACTOR SOMEWHAT IN FAVOR OF TELEPROMPTER" BECAUSE ITS HBO WAS ALREADY
AVAILABLE AND WAS BEING FURNISHED TO ABOUT 1/3 OF THE CATV SUBSCRIBERS
AT NORTON. WE CANNOT SAY THAT TELEPROMPTER WAS ENTITLED TO MORE.
TELEPROMPTER ALSO CONTENDS THAT THE CONTRACTING OFFICER FAILED TO
CONSIDER ADDITIONAL COSTS THAT COULD BE ASSOCIATED WITH THE FOLEY
PROPOSAL. TELEPROMPTER BELIEVES THE EXISTING CATV SUBSCRIBERS MIGHT BE
REQUIRED TO BEAR THOSE COSTS AS A RESULT OF A CHANGE OF CONTRACTORS
BECAUSE IT BELIEVES FOLEY WAS NOT LEGALLY PRECLUDED FROM CHARGING THOSE
SUBSCRIBERS FOR INSTALLATION COSTS, WHILE THE EXISTING SUBSCRIBERS TO
THE TELEPROMPTER SYSTEM WOULD NOT HAVE TO BEAR THOSE COSTS IF
TELEPROMPTER WERE AWARDED THE CONTRACT. SIMILARLY, TELEPROMPTER ASSERTS
THAT THE CURRENT SUBSCRIBERS TO ITS HBO SERVICE COULD BE CHARGED
ADDITIONAL CONNECTION FEES FOR ANY PREMIUM PROGRAMMING WHICH FOLEY MIGHT
EVENTUALLY OFFER.
TELEPROMPTER'S FIRST ASSERTION STEMS FROM THE LETTER AMENDMENT TO THE
RFP BY WHICH THE CONTRACTING OFFICER SOUGHT TO PRECLUDE CHARGING CURRENT
SUBSCRIBERS FOR INSTALLATION COSTS. THE CONTRACTING OFFICER, BY LETTER,
REQUESTED NEW BEST AND FINAL OFFERS FROM BOTH OFFERORS BECAUSE OF ERRORS
DISCOVERED IN THE RFP SUBSEQUENT TO THE TIME ORIGINAL BEST AND FINAL
OFFERS WERE RECEIVED. THAT LETTER MODIFIED CERTAIN CLAUSES IN THE RFP,
REPLACED CERTAIN PAGES OF THE RFP, AND CONTAINED THE FOLLOWING:
"*** CORRECTIONS TO THE REQUEST FOR PROPOSALS ARE FORWARDED WITH THIS
LETTER AND NEW BEST AND FINAL OFFERS ARE REQUESTED.
"WITH REGARD TO ITEMS 3, 4, AND 5 ON SCHEDULE A *** A CURRENT
SUBSCRIBER WILL NOT BE CONSIDERED TO BE AN INITIAL HOOKUP OR
RECONNECTION TO A CATV SYSTEM MERELY BECAUSE OF THE TRANSITION FROM THE
EXCITING CATV FRANCHISE *** TO THE NEW CATV FRANCHISE AGREEMENT ***. NO
CONNECTION FEE IS EARNED UNLESS A SUBSCRIBERS RECEIVER, PREVIOUSLY NOT
CONNECTED TO A CATV SYSTEM, BECOMES CONNECTED TO A CATV SYSTEM.
"REQUEST THAT YOU CONSIDER THE ABOVE INFORMATION AND SUBMIT YOUR BEST
AND FINAL OFFER TO INCLUDE RESUBMITTING THE FOLLOWING:
A. SCHEDULE A"
NO FURTHER "AMENDMENTS" WERE MADE TO THE RFP, I.E., NO STANDARD FORM
(SF) 30 (THE PRE-PRINTED FORM SPECIFIED FOR USE TO AMEND RFPS AND
CONTRACTS) WAS ISSUED. TELEPROMPTER ESSENTIALLY BELIEVES THAT THE AIR
FORCE'S FAILURE TO ISSUE A SF 30 SOMEHOW ELIMINATED THE LEGALLY BINDING
EFFECT OF THE ABOVE QUOTED PROVISIONS SO THAT FOLEY COULD CHARGE
EXISTING SUBSCRIBERS.
DAR 3-505 ENVISIONS THAT RFP AMENDMENTS WILL BE ISSUED ON SF 30. ON
OCCASION, HOWEVER, AGENCIES WILL AMEND SOLICITATIONS BY OTHER MEANS.
SEE, E.G., B-167892(1), NOVEMBER 18, 1969; ILC DOVER, B-182104,
NOVEMBER 29, 1974, 74-2 CPD 301; CF., BELL AEROSPACE COMPANY, 55 COMP.
GEN. 244 (1975), 75-2 CPD 168. GENERALLY, THE FAILURE TO UTILIZE THE SF
30 IS A PROCEDURAL DEFECT RATHER THAN A SUBSTANTIVE ONE, PROVIDED THAT
ALL POTENTIAL OFFERORS ARE ADVISED OF THE CHANGES MADE. B-167892(1),
SUPRA. HERE, USE OF SF 30 WOULD HAVE ACCOMPLISHED NOTHING MORE THAN WAS
DONE BY USING THE LETTER AMENDMENT. SF 30 PROVIDES FOR IDENTIFICATION
OF THE SOLICITATION, THE DATE OF THE AMENDMENT, THE ISSUING ACTIVITY,
ETC. THE IDENTICAL REQUIREMENTS WERE INCLUDED IN THE LETTER, ALBEIT IN
A DIFFERENT FORMAT. MOREOVER, BOTH TELEPROMPTER AND FOLEY ACKNOWLEDGED
THE LETTER, AND WE BELIEVE THAT ACKNOWLEDGEMENT IN THE BEST AND FINAL
OFFER CLEARLY WOULD BIND FOLEY TO ITS CONTENTS.
IMPROPER NEGOTIATIONS
TELEPROMPTER ASSERTIONS IN THIS REGARD ARE BASED UPON A LETTER FROM
THE AIR FORCE TO FOLEY, WHICH TELEPROMPTER CONSIDERS CONSTITUTED
DISCUSSIONS BETWEEN FOLEY AND THE AIR FORCE, THEREBY NECESSITATING A NEW
ROUND OF "BEST AND FINAL" OFFERS. THE LETTER REQUESTED FOLEY TO PROVIDE
INFORMATION TO CORRECT MINOR IRREGULARITIES IN ITS OFFER.
THE FIRST IRREGULARITY INVOLVED APPARENT EXTENSION ERRORS IN ITEMS 4
AND 5A OF SCHEDULE A. WHEN THE PROPOSED CONNECTION CHARGES OF $5 EACH
FOR THESE TWO ITEMS ARE MULTIPLIED BY THE ESTIMATED QUANTITIES FOR THE
10-YEAR PERIOD, THE EXTENSIONS FOR ITEMS 4 AND 5A ARE $50 AND $10,425,
RESPECTIVELY INSTEAD OF THE $5 EACH ERRONEOUSLY SHOWN. FOLEY VERIFIED
THAT THERE WERE TYPOGRAPHICAL ERRORS IN ITEMS 4 AND 5A IN THAT THERE
WERE ERRORS IN THE EXTENDED PRICES FOR THE TWO ITEMS.
DAR 3-805.5 (1976 ED.), AS AMENDED BY DEFENSE PROCUREMENT CIRCULAR
76-7, APRIL 29, 1977 PROVIDES AS FOLLOWS:
"(A) CONTRACTING OFFICERS SHALL EXAMINE ALL PROPOSALS *** FOR MINOR
INFORMALITIES OR IRREGULARITIES AND MISTAKES ***.
"(B) MINOR INFORMALITIES OR IRREGULARITIES AND APPARENT CLERICAL
MISTAKES SHALL BE RESOLVED SUBSTANTIALLY AS PRESCRIBED IN 2-405 AND
2-406.2, RESPECTIVELY, AND COMMUNICATIONS WITH OFFERORS REQUIRED TO
RESOLVE SUCH MATTERS SHALL NOT BE CONSIDERED DISCUSSIONS ***. HOWEVER,
IF RESULTING CLARIFICATION PREJUDICES THE INTEREST OF OTHER OFFERORS,
AWARD MAY NOT BE MADE WITHOUT DISCUSSIONS WITH ALL OFFERORS WITHIN THE
COMPETITIVE RANGE."
DAR 2-406.2 PROVIDES:
"ANY CLERICAL MISTAKE APPARENT ON THE FACE OF A BID PROPOSAL MAY BE
CORRECTED BY THE CONTRACTING OFFICER PRIOR TO AWARD, IF THE CONTRACTING
OFFICER HAS FIRST OBTAINED FROM THE BIDDER WRITTEN *** VERIFICATION OF
THE BID ACTUALLY INTENDED. ***"
WE BELIEVE THAT THERE WAS AN APPARENT CLERICAL MISTAKE ON THE FACE OF
FOLEY'S OFFER AND THAT THE CONTRACTING OFFICER SOUGHT APPROPRIATE
RESOLUTION OF THE MATTER. THE UPWARD CORRECTION OF FOLEY'S OFFER DID
NOT PREJUDICE THE INTEREST OF TELEPROMPTER AS FOLEY'S TOTAL PRICE
REMAINED WELL BELOW THAT OF TELEPROMPTER'S. IF ANYTHING, THE CORRECTION
ENHANCED TELEPROMPTER'S COMPETITIVE POSITION SINCE IT NARROWED THE COST
DIFFERENCE BETWEEN THE PROPOSALS. WE FIND THE CORRECTION OF THE
CLERICAL ERRORS IN FOLEY'S OFFER TO HAVE BEEN IN ACCORDANCE WITH DAR
3-805.5 AND 2-406.2. SEE FORDEL FILMS, INC., B-186841, OCTOBER 29,
1976, 76-2 CPD 370.
THE SECOND IRREGULARITY IN FOLEY'S "BEST AND FINAL" OFFER CONCERNED
THE TERMINATION FOR CONVENIENCE PROVISION OF THE RFP. A BREAKDOWN OF
THE STATED COSTS BY ITEMS WAS REQUIRED TO BE SUBMITTED WITH THE OFFER.
IN ITS FIRST "BEST AND FINAL" OFFER, FOLEY SUBMITTED A BREAKDOWN OF ITS
FIXED INSTALLATION COSTS AND INSERTED IN CLAUSE 27(B) THE AMOUNT OF
$49,903 AS THE TOTAL. IN ITS SECOND "BEST AND FINAL" OFFER, FOLEY
INDICATED THE $49,903 TO REPRESENT NET REVENUE LOSS IT WOULD SUFFER IF
THE CONTRACT WERE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. THE
CONTRACTING OFFICER REQUESTED VERIFICATION THAT THE AMOUNT STATED
REPRESENTED AN AMOUNT NOT TO EXCEED FIXED INSTALLATION COST FOR THE CATV
SYSTEM LESS SALVAGE VALUE AS PREVIOUSLY INDICATED IN FOLEY'S COST
BREAKDOWN SUBMITTED WITH THE FIRST "BEST AND FINAL" OFFER. FOLEY
PROVIDED THE VERIFICATION REQUESTED.
WE DO NOT BELIEVE THE STATEMENT ADDED BY FOLEY TO ITS "BEST AND
FINAL" OFFER REPRESENTED A MATERIAL CHANGE. THE AMOUNT STATED WAS
CLEARLY SUBSTANTIATED BY THE COST BREAKDOWN SUBMITTED WITH THE FIRST
OFFER AND DID NOT CHANGE WITH THE SECOND OFFER. WE THINK IT IS CLEAR
THAT FOLEY'S RESPONSE DID NOT REPRESENT A CHANGE TO ITS PROPOSAL SUCH
THAT ANOTHER ROUND OF NEGOTIATIONS WAS REQUIRED. SEE, E.G., ENSIGN
BICKFORD COMPANY, B-180844, AUGUST 14, 1974, 74-2 CPD 97.
THE THIRD IRREGULARITY WAS FOLEY'S FAILURE TO INDICATE THE LOCATION
WHERE AGENTS OF THE CONTRACTOR RESPONSIBLE FOR MAKING REPAIRS COULD BE
CONTACTED AS REQUIRED BY THE RFP. IN ITS REPLY TO THE AIR FORCE'S
REQUEST, FOLEY SUPPLIED A TELEPHONE NUMBER AT WHICH REPAIR CALLS WOULD
BE RECEIVED.
WE THINK THIS CLEARLY INVOLVED A MINOR INFORMALITY. FOLEY OBLIGATED
ITSELF TO PROVIDE THE REQUIRED REPAIR SERVICE AND TO HAVE PERSONNEL
AVAILABLE 24 HOURS PER DAY. THE ABSENCE OF THE TELEPHONE NUMBER DID NOT
VITIATE THAT OBLIGATION. THUS, WE BELIEVE THE ABSENCE OF THE TELEPHONE
NUMBER WAS MERELY A MATTER OF FORM WHICH PROPERLY COULD BE CORRECTED
THROUGH THE TYPE OF CLARIFICATION REQUEST ENVISIONED BY DAR 3-805.5(B).
THUS, WE DO NOT FIND THAT THE AIR FORCE CONDUCTED NEGOTIATIONS
IMPROPERLY.
FOR THE FOREGOING REASONS, THE PROTEST IS DISMISSED IN PART AND
DENIED IN PART.
FN1 SUBSEQUENTLY CORRECTED BY EXTENDING UNIT PRICES AS FOLLOWS:
ITEM 4 - $50.00, ITEM 5(A) $10,425.00, CORRECTED TOTAL $364,471.50.
B-194794, JUL 30, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST FILED AFTER CLOSING DATE FOR RECEIPT OF PROPOSALS
ALLEGING IMPROPRIETIES IN SOLICITATION IS UNTIMELY. EVEN IF PROTEST WAS
MADE PRIOR TO CLOSING DATE, AGENCY'S CONSIDERATION OF PROPOSALS DESPITE
CONCERNS EXPRESSED BY PROTESTER WAS INITIAL ADVERSE AGENCY ACTION AND
PROTEST FILED WITH GAO NEARLY TWO MONTHS AFTER THAT DATE IS UNTIMELY.
2. PROTEST OF AGENCY'S DETERMINATION THAT ALTERNATE PROPOSAL WAS NOT
ACCEPTABLE IS DENIED WHERE PROTESTER FAILS TO SHOW AGENCY DETERMINATION
IS WITHOUT A REASONABLE BASIS.
DAYTON AIRCRAFT PRODUCTS:
DAYTON AIRCRAFT PRODUCTS (DAYTON) PROTESTS THE AWARD OF A CONTRACT
UNDER REQUEST FOR PROPOSALS (RFP) F04606-79-R-0311 TO GAYSTON
CORPORATION (GAYSTON). THE RFP WAS ISSUED ON FEBRUARY 7, 1979, BY THE
DEPARTMENT OF THE AIR FORCE WITH A CLOSING DATE OF MARCH 9, 1979.
DAYTON MAINTAINS THAT AWARD WAS NOT MADE TO THE LOWEST QUALIFIED
OFFEROR.
THE RFP, A PROCUREMENT RESTRICTED TO QUALIFIED SOURCES, CALLED FOR
THE DELIVERY OF 1,716 STATIC DISCHARGERS, NSN 5920-00-462-1121, AND
IDENTIFIED THE DISCHARGER AS PART NUMBER 611-1008-HE. PARAGRAPH D-3 OF
THE RFP LISTED DAYTON AND GAYSTON AS QUALIFIED SOURCES OF THE PART
NUMBER. THE AIR FORCE RECEIVED THREE PROPOSALS IN RESPONSE TO THE RFP.
GAYSTON SUBMITTED AN OFFER OF $8.69 PER UNIT. DAYTON-GRANGER AVIATION,
INC. (DAYTON-GRANGER) SUBMITTED A PROPOSAL FOR A QUALIFIED ITEM
(DAYTON-GRANGER PART NUMBER 16315) AT $9.90 PER UNIT. DAYTON, AN
AFFILIATE OF DAYTON-GRANGER, SUBMITTED AN ALTERNATE PROPOSAL, OFFERING
AN ITEM NOT PREVIOUSLY QUALIFIED (DAYTON PART NUMBER 16410) AT $7.88 PER
UNIT. THE AIR FORCE EVALUATED DAYTON'S ALTERNATE PROPOSAL, FOUND THE
OFFERED ITEM TO BE AN UNACCEPTABLE REPLACEMENT FOR THE REQUIRED ITEM,
AND MADE CONTRACT AWARD TO GAYSTON ON APRIL 17, 1979.
DAYTON MAINTAINS THAT GAYSTON IS NOT A QUALIFIED SOURCE FOR THE
DISCHARGER SINCE PART NUMBER 611-1008-HE HAS ONLY BEEN MANUFACTURED BY
GRANGER ASSOCIATES, A FIRM WHOSE PRODUCT LINE WAS ACQUIRED BY
DAYTON-GRANGER IN 1976, AND BY DAYTON-GRANGER. THE AIR FORCE QUESTIONS
WHETHER THIS ISSUE WAS TIMELY FILED BECAUSE IT WAS APPARENT FROM THE
SOLICITATION THAT GAYSTON WAS CONSIDERED A QUALIFIED SOURCE AND THE
PROTEST WAS FILED AFTER THE TIME FOR SUBMISSION OF INITIAL PROPOSALS,
THE DEADLINE FOR PROTESTING SUCH MATTERS. SEE 4 C.F.R. 20.2(B)(1)
(1979). HOWEVER, DAYTON ASSERTS THAT IT PROTESTED BY TELEPHONE ON
FEBRUARY 20, 1979, THAT THE ITEM DESCRIPTION WHICH LIMITED OFFERS
EXCLUSIVELY TO THE DAYTON PRODUCT (DAYTON-GRANGER PART NUMBER 16315) WAS
INCONSISTENT WITH PARAGRAPH D-3 OF THE RFP THAT IDENTIFIED BOTH DAYTON
AND GAYSTON AS QUALIFIED SOURCES. THE AIR FORCE AGREES THAT A PHONE
CONVERSATION OCCURRED BETWEEN A DAYTON OR DAYTON-GRANGER REPRESENTATIVE
AND THE CONTRACTING OFFICER CONCERNING THE ITEM DESCRIPTION, BUT IT DID
NOT CONSTRUE IT AS A PROTEST.
EVEN IF DAYTON PROTESTED BY PHONE, ITS SUBSEQUENT PROTEST TO THE
GENERAL ACCOUNTING OFFICE IS UNTIMELY. SECTION 20.2(A) OF OUR BID
PROTEST PROCEDURES, 4 C.F.R. SEC. 20.2(A), PROVIDES, IN PERTINENT PART
THAT:
"*** IF A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING
AGENCY, ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED
WITHIN 10 DAYS OF FORMAL NOTIFICATION OF OR ACTUAL OR CONSTRUCTIVE
KNOWLEDGE OF INITIAL ADVERSE AGENCY ACTION WILL BE CONSIDERED ***."
"ADVERSE AGENCY ACTION" IS DEFINED TO INCLUDE ANY ACTION OR INACTION
ON THE PART OF A CONTRACTING AGENCY WHICH IS PREJUDICIAL TO THE POSITION
TAKEN IN A PROTEST FILED WITH AN AGENCY. 4 C.F.R. SEC. 20.0(B). IN
THIS CASE, ASSUMING THE PHONE CONVERSATION CONSTITUTED A PROTEST
INITIALLY "FILED" WITH THE AIR FORCE, PLATTSBURGH LAUNDRY AND DRY
CLEANING CORP., ET AL., 54 COMP. GEN. 29 (1974), 74-2 CPD 27, THE
INITIAL ADVERSE AGENCY ACTION WAS THE RECEIPT OF PROPOSALS ON MARCH 9,
1979, DESPITE THE CONCERNS EARLIER EXPRESSED BY DAYTON. GENERAL LEASING
CORPORATION - RECONSIDERATION, B-193527, MARCH 9, 1979, 79-1 CPD 170.
SINCE DAYTON'S PROTEST TO OUR OFFICE WAS NOT FILED UNTIL MAY 3, 1979,
NEARLY TWO MONTHS LATER, THE PROTEST IS UNTIMELY. ACCORDINGLY, THIS
BASIS OF DAYTON'S PROTEST IS DISMISSED.
DAYTON'S PROTEST ALSO SUGGESTS THAT THE AIR FORCE IMPROPERLY REJECTED
ITS LOW ALTERNATIVE OFFER UNDER THE RFP. THE RECORD DISCLOSES THAT
DAYTON-GRANGER CONTACTED AIR FORCE PROCUREMENT OFFICIALS ON FEBRUARY 20,
1979 ABOUT THIS MATTER AND WAS ADVISED THAT DAYTON COULD SUBMIT A
SEPARATE PROPOSAL ON THIS ITEM WHICH WOULD BE EVALUATED IN ORDER TO
DETERMINE IF THE OFFERED PARTS WERE ACCEPTABLE. AFTER THE PROPOSALS
WERE RECEIVED, THE CONTRACTING OFFICER REQUESTED A TECHNICAL EVALUATION
OF THIS PROPOSAL FROM AIR FORCE ENGINEERS. THE TECHNICAL EVALUATION
FOUND THAT DAYTON PART NUMBER 16410 WAS NOT AN ACCEPTABLE REPLACEMENT
FOR THE ACCEPTABLE DAYTON-GRANGER PART NUMBER 16315 SINCE THE FORMER
PART IS TESTED BY STATISTICAL SAMPLING RATHER THAN BY 100 PERCENT
INSPECTION AND THE PART "IS PRIMARILY USED IN A SUBSONIC ENVIRONMENT"
RATHER THAN "A SUITABLE ITEM FOR SUPERSONIC AIRCRAFT."
A PROCURING ACTIVITY HAS WIDE DISCRETION IN DETERMINING WHETHER A
PROPOSAL MEETS ITS ACTUAL MINIMUM NEEDS. BAYTRON SYSTEMS CORPORATION,
B-192329, JULY 24, 1978, 78-2 CPD 67. IN OUR OPINION, THE SOLICITATION
CLEARLY CONTEMPLATED THAT ALL OFFERORS SUBMIT PRODUCTS THAT WERE
PREVIOUSLY QUALIFIED. PRODUCT PREQUALIFICATION IN A SOLICITATION GOES
TO THE ESSENCE OF A PROCUREMENT. 43 COMP. GEN. 707 (1964). THE RECORD
SHOWS THAT DAYTON'S ALTERNATE ITEM HAD NOT BEEN QUALIFIED AND THAT TIME
DID NOT PERMIT QUALIFICATION TESTING PRIOR TO AWARD. ACCORDINGLY, ITS
ALTERNATE OFFER WAS PROPERLY REJECTED AS UNACCEPTABLE. SEE 50 COMP.
GEN. 691 (1971).
THE PROTEST IS DENIED.
B-194922, B-194922.2, JUL 30, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST AGAINST AWARDEE'S RESPONSIBILITY IS DISMISSED, SINCE GAO WILL
NOT REVIEW AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY EXCEPT IN
CIRCUMSTANCES NOT APPLICABLE HERE.
THE CHARLES LOWE COMPANY, REPRESENTING TECNAVAL S.R.L.:
THE CHARLES LOWE COMPANY, REPRESENTING TECNAVAL S.R.L. (TECNAVAL),
PROTESTS THE AWARD OF A CONTRACT BY THE NAVAL FACILITIES ENGINEERING
COMMAND TO LA MECCANICA NAVALE UNDER SOLICITATION NO. N62745-79-R-0064
FOR THE OPERATION AND MAINTENANCE OF MUSE GENERATORS IN NAPLES, ITALY.
PARAGRAPH C.8 OF THE SOLICITATION REQUIRED THAT AN OFFEROR'S PROPOSAL
INCLUDE A MANNING CHART CONTAINING A PERSONNEL STAFFING PLAN, AND A
PHASE-IN PLAN DESCRIBING IN DETAIL A SCHEDULE FOR HIRING, TRAINING, AND
FULL AND COMPLETE MANNING OF ALL OPERATIONS. THE PARAGRAPH FURTHER
PROVIDED THAT THE CONTRACTING OFFICER COULD REQUIRE THE CONTRACTOR TO
MEET THE STAFFING LEVEL SHOWN IN THE MANNING CHART IF PERFORMANCE FELL
BELOW ACCEPTABLE STANDARDS, AND THAT THE CONTRACTOR WAS IN ANY EVENT
RESPONSIBLE FOR SUPPLYING SUFFICIENT PERSONNEL TO MAINTAIN SATISFACTORY
PERFORMANCE. TECNAVAL CONTENDS THAT NOTWITHSTANDING ANY REPRESENTATIONS
REFLECTED IN THE MANNING CHART SUBMITTED BY LA MECCANICA NAVALE, THE
AWARDEE IN FACT LACKS THE QUALIFIED PERSONNEL, AS WELL AS THE ADEQUATE
FACILITIES, TO MEET THE CONTRACTUAL REQUIREMENTS.
THE QUESTION OF WHETHER AN OFFEROR HAS THE APPARENT ABILITY TO
PERFORM IN ACCORDANCE WITH THE REQUIREMENTS OF A SOLICITATION INVOLVES
THE FIRM'S RESPONSIBILITY. DEFENSE ACQUISITION REGULATION (DAR) SECTION
1, PART 9 (1976 ED.). AWARD OF THE CONTRACT TO LA MECCANICA NAVALE
NECESSARILY INVOLVED AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, DAR
SEC. 2-407.2 (1976 ED.), AND OUR OFFICE WILL NOT REVIEW A PROTEST
AGAINST SUCH A DETERMINATION UNLESS EITHER FRAUD ON THE PART OF
PROCURING OFFICIALS IS ALLEGED, OR THE SOLICITATION CONTAINS DEFINITIVE
RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. MEYERS
INDUSTRIES, INC., B-192128, JULY 21, 1978, 78-2 CPD 60. NEITHER
EXCEPTION IS APPLICABLE HERE.
FURTHER, WHETHER OR NOT LA MECCANICA NAVALE IN FACT PROVIDES THE
STAFF AND FACILITIES NECESSARY TO PERFORM IN ACCORDANCE WITH THE
CONTRACT REQUIREMENTS IS A MATTER OF CONTRACT ADMINISTRATION, AND ALSO
IS NOT FOR OUR CONSIDERATION.
THE PROTEST IS DISMISSED.
B-194979.2, JUL 30, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
THIRTY DAY TIME LIMIT FOR APPEALING TO AGENCY HEAD ANY ADVERSE
CONTRACTING OFFICER'S DECISION UNDER STANDARD CONTRACT DISPUTES CLAUSE
IS NOT APPLICABLE TO APPEALS TAKEN TO CONTRACTING OFFICER'S DENIAL OF
BID PROTEST RELATING TO CONTRACT FORMATION. GAO BID PROTEST PROCEDURES
ARE APPLICABLE TO A PROTEST FILED INITIALLY WITH CONTRACTING AGENCY AND
SUBSEQUENTLY APPEALED TO GAO.
CENTRAL AIR SERVICE - RECONSIDERATION:
CENTRAL AIR SERVICE (CENTRAL) REQUESTS RECONSIDERATION OF OUR
DECISION IN CENTRAL AIR SERVICE, B-194979, JUNE 27, 1979, 79-1 CPD 462,
DISMISSING AS UNTIMELY ITS PROTEST REGARDING THE REJECTION OF CENTRAL'S
BID AS NONRESPONSIVE BY THE DEPARTMENT OF AGRICULTURE (AGRICULTURE)
UNDER INVITATION FOR BIDS NO. 49-79-01.
CENTRAL ARGUES THAT ITS PROTEST WAS TIMELY BECAUSE IT APPEALED THE
CONTRACTING OFFICER'S INITIAL DENIAL TO THE AGENCY HEAD WITHIN 30 DAYS
IN ACCORDANCE WITH THE PROCEDURES STATED IN THE STANDARD CONTRACT
DISPUTES CLAUSE CONTAINED IN THE SOLICITATION. MOREOVER, THE PROTESTER
CONTENDS THAT ITS APPEAL UNDER THE DISPUTES CLAUSE PROCEDURES WAS ACTED
ON AND DENIED BY ANOTHER AGRICULTURE OFFICIAL WHO ALSO ADVISED THE
PROTESTER OF THE PROCEDURES FOR APPEALING TO GAO.
THE DISPUTES CLAUSE APPLIES TO DISPUTES ARISING ONCE THE CONTRACT IS
AWARDED AND HAS NO APPLICATION TO BID PROTEST MATTERS INVOLVING
QUESTIONS OF CONTRACT FORMATION. AS CENTRAL WAS NOT AWARDED THE
CONTRACT, IT COULD NOT PROPERLY PROCEED UNDER THE CONTRACT CLAUSE NOR
COULD ITS BASIS FOR PROTEST HAVE ARISEN UNDER THE CONTRACT. THUS, GAO
BID PROTEST PROCEDURES PUBLISHED AT 4 C.F.R. PART 20 ET SEQ. WERE
APPLICABLE TO CENTRAL'S PROTEST WHICH WAS FILED INITIALLY WITH THE
CONTRACTING AGENCY AND SUBSEQUENTLY APPEALED TO GAO. THE FACT THAT ITS
"APPEAL" UNDER THE DISPUTES CLAUSE WAS ACTED ON BY ANOTHER AGENCY
OFFICIAL DOES NOT EXCUSE THE PROTESTER'S FAILURE TO APPEAL THE INITIAL
ADVERSE AGENCY ACTION ON THE PROTEST AS REQUIRED BY OUR PROCEDURES.
ANNAPOLIS TENNIS LIMITED PARTNERSHIP, B-189571, JUNE 5, 1978, 78-1 CPD
412; MR. SCRUB CAR WASH SYSTEMS, INC., B-186586, JULY 9, 1976, 76-2 CPD
29.
CONSEQUENTLY, WE FIND CENTRAL HAS NOT SHOWN THAT OUR PRIOR DECISION
WAS BASED ON ANY ERROR OF FACT OR LAW, AND THAT DECISION IS AFFIRMED.
B-193134, JUL 27, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
BANK'S ALLEGED MODIFICATION OF TERMS OF LOAN GUARANTEED BY SMALL
BUSINESS ADMINISTRATION (SBA), WHEREBY BANK AGREED TO GRANT BORROWER
ADDITIONAL TIME TO BEGIN REPAYING PRINCIPAL AND INTEREST ON LOAN, WAS
NOT LEGALLY EFFECTIVE WITH RESPECT TO SBA, SINCE BANK NEITHER REQUESTED
NOR RECEIVED SBA'S PRIOR WRITTEN APPROVAL OF SUCH MODIFICATION AS
REQUIRED BY AUTHORIZATION AND GUARANTY AGREEMENT BETWEEN SBA AND BANK.
THEREFORE, IN ACCORDANCE WITH B-181432, MARCH 13, 1975 AND SUBSEQUENT
OPINIONS UPHOLDING THAT DECISION, SBA'S REFUSAL TO PURCHASE THE LOAN WAS
CORRECT, SINCE SBA HAS NO AUTHORITY TO ACCEPT PAYMENT OF GUARANTEE FEE
AFTER DEFAULT BY BORROWER.
HERGET NATIONAL BANK OF PEKIN, ILLINOIS - SMALL BUSINESS
ADMINISTRATION GUARANTEED LOAN:
THIS IS IN RESPONSE TO A REQUEST FROM THE COUNSEL FOR THE HERGET
NATIONAL BANK (HNB) OF PEKIN, ILLINOIS, FOR OUR OFFICE TO REVIEW THE
DECISION OF THE SMALL BUSINESS ADMINISTRATION (SBA) NOT TO PURCHASE AN
SBA-GUARANTEED LOAN MADE BY HNB. IN DENYING ANY LIABILITY UNDER THE
TERMS OF THE GUARANTY AGREEMENT, SBA RELIED ON OUR DECISION, B-181432,
MARCH 13, 1975, IN WHICH WE HELD THAT SBA COULD NOT PURCHASE A
GUARANTEED LOAN IF THE REQUIRED GUARANTY FEE HAD NOT BEEN PAID BY THE
LENDER BEFORE THE LOAN WENT INTO DEFAULT OR IF THE LENDER HAD REASON TO
BELIEVE A DEFAULT WAS IMMINENT. FOR THE REASONS SET FORTH HEREAFTER, WE
AGREE WITH SBA'S DETERMINATION.
AS RECOGNIZED IN THE REQUEST, HNB IS NOT ENTITLED AS A MATTER OF LAW
TO A FORMAL DECISION FROM OUR OFFICE. SEE 31 U.S.C. SEC. 74, 82D
(1976); B-181432, NOVEMBER 12, 1975; B-181432, APRIL 5, 1979. HOWEVER
SINCE SBA'S REFUSAL TO PURCHASE THIS LOAN WAS BASED ON OUR DECISION OF
MARCH 13, 1975, WE WILL CONSIDER THE ARGUMENTS SET FORTH ON BEHALF OF
HNB.
BASED ON THE INFORMATION CONTAINED IN THE LETTER FROM HNB'S COUNSEL,
AS WELL AS THE INFORMATION WE WERE PROVIDED BY SBA, THE FACTS CONCERNING
THIS MATTER APPEAR TO BE AS FOLLOWS. ON JULY 5, 1973, SBA ISSUED AN
AUTHORIZATION APPROVING HNB'S REQUEST FOR AN SBA GUARANTEE OF A PROPOSED
LOAN IN THE AMOUNT OF $53,000 TO MR. AND MRS. JOHN VAGEN TO OPEN THE
PEKIN ELECTRONIC STORE.
THE NOTE GIVEN BY THE BORROWERS TO HNB WAS DATED JULY 21, 1973. THE
SBA AUTHORIZATION PROVIDED THAT MONTHLY INTEREST INSTALLMENTS OF $375.00
WOULD COMMENCE ONE MONTH FROM THE DATE OF THE NOTE. IT FURTHER PROVIDED
THAT MONTHLY INSTALLMENTS OF $1133.00 EACH, REPRESENTING COMBINED
PRINCIPAL AND INTEREST PAYMENTS WOULD COMMENCE 4 MONTHS FROM THE DATE OF
THE NOTE. THE NOTE CONTAINED IDENTICAL TERMS.
THE LOAN, MOST OF WHICH WAS TO BE USED TO PURCHASE INVENTORY WAS
DISBURSED AS FOLLOWS:
SEPTEMBER 12, 1973 - $25,000
SEPTEMBER 20, 1973 - 6,000
SEPTEMBER 21, 1973 - 4,800
OCTOBER 18, 1973 - 4,000
JANUARY 22, 1974 - 7,000
OCTOBER 10, 1974 - 4,000
DECEMBER 5, 1975 - 2,200
THE LAST TWO DISBURSEMENTS WERE NOT MADE IN ACCORDANCE WITH THE TERMS
OF THE AUTHORIZATION, WHICH REQUIRED THAT NO DISBURSEMENT COULD BE MADE
LATER THAN 12 MONTHS FROM THE DATE OF THE AUTHORIZATION UNLESS WITH
PRIOR WRITTEN CONSENT OF SBA.
IT APPEARS THAT HNB FORMALLY NOTIFIED SBA OF EACH DISBURSEMENT AS IT
WAS MADE ON THE SBA FORM PROVIDED FOR THIS PURPOSE. HNB ALLEGES THAT
THE FUNDS WERE DISBURSED IN THIS MANNER BECAUSE THE BORROWER DID NOT
RECEIVE ALL THE INVENTORY (WHICH WAS TO HAVE BEEN DELIVERED WITHIN 3
MONTHS OF THE DATE OF THE NOTE) UNTIL MARCH 1974, APPROXIMATELY 8 MONTHS
FROM THE DATE OF THE NOTE.
THE BANK FURTHER ALLEGES THAT SINCE THE INVENTORY DID NOT ARRIVE
UNTIL MARCH, THE BORROWER'S CASH FLOW DID NOT WARRANT PAYMENTS PRIOR TO
APRIL. ACCORDINGLY, HNB AGREED TO GIVE THE BORROWERS UNTIL APRIL 4,
1974, TO MAKE THE FIRST PAYMENT ON THE LOAN.
ON APRIL 4, 1974, THE BORROWER PAID HNB ALL INTEREST THAT HAD ACCRUED
ON THE MONIES DISBURSED BY THE BANK UP TO THAT POINT ($46,800). THEN,
BEGINNING ON APRIL 19, 1974, AND CONTINUING THROUGH MARCH 21, 1978, THE
BORROWER MADE REGULAR MONTHLY PAYMENTS - PRINCIPAL AND INTEREST - "WITH
PRECISION." HNB DID NOT PAY SBA THE REQUIRED GUARANTEE FEE ON THIS LOAN
UNTIL MARCH 25, 1975. IN APRIL 1978, HNB ADVISED SBA THAT THE BORROWER
HAD FILED FOR BANKRUPTCY, LEAVING AN UNPAID BALANCE ON THE LOAN OF
$12,850.30. SBA DENIED HNB'S CLAIM ON THE GROUNDS THAT IT HAD NOT PAID
THE GUARANTEE FEE ON THIS LOAN PRIOR TO THE BORROWER'S DEFAULT WHICH
OCCURRED WHEN THE BORROWER FAILED TO MAKE THE PAYMENTS DUE FROM DECEMBER
21, 1973 TO MARCH 21, 1974. (IN MAKING THIS DETERMINATION SBA
APPARENTLY MISREAD THE TERMS OF THE NOTE, WHICH ACTUALLY PROVIDED THAT
THE FIRST COMBINED PRINCIPAL AND INTEREST PAYMENT WAS TO BECOME DUE 4
MONTHS FROM THE DATE OF THE NOTE ON NOVEMBER 21, 1973.)
THE DECISION OF MARCH 13, 1975, UPON WHICH SBA RELIED HAS BEEN
CONSISTENTLY AND REPEATEDLY UPHELD IN SUBSEQUENT OPINIONS ISSUED BY OUR
OFFICE. SEE B-181432, NOVEMBER 12, 1975; B-181432, AUGUST 15, 1977;
B-181432, JULY 7, 1978; B-181432, OCTOBER 20, 1978; B-181432, APRIL 5,
1979; AND B-181432, MAY 21, 1979. IN THE OCTOBER 20, 1978 DECISION,
WHICH RESULTED FROM A REQUEST BY SBA THAT WE RECONSIDER OUR ORIGINAL
DECISION, WE INSTEAD EXPANDED UPON THAT DECISION. SPECIFICALLY, WE HELD
THAT PARAGRAPH 2 OF SBA'S BLANKET GUARANTEE AGREEMENT, WHICH HAD BEEN
THE PRIMARY BASIS FOR OUR ORIGINAL DECISION, WAS A MATERIAL AND
UNAMBIGUOUS CONDITION PRECEDENT TO SBA'S GUARANTEE. FURTHERMORE, WE
HELD THAT, AS A GENERAL PROPOSITION, SBA HAD NOT WAIVED THAT PROVISION
AND COULD NOT BE ESTOPPED FROM ENFORCING IT. OUR VIEW OF THE BASIC
LEGAL ISSUES INVOLVED HERE IS NO DIFFERENT.
HNB DID NOT PAY THE GUARANTEE FEE ON THIS LOAN IN ACCORDANCE WITH THE
PROVISIONS OF THE GUARANTEE AGREEMENT, WHICH PROVIDES THAT THE FEE
SHOULD BE PAID WITHIN 5 DAYS OF FIRST DISBURSEMENT OF THE LOAN. THE FEE
WHICH SHOULD HAVE BEEN PAID BY SEPTEMBER 17, 1973 - 5 DAYS AFTER THE
DATE OF THE FIRST $25,000 DISBURSEMENT - WAS NOT PAID UNTIL MARCH 25,
1975. IN OUR DECISION, B-181432, MARCH 13, 1975, WE HELD THAT LENDERS
COULD MAKE LATE PAYMENTS OF THE FEE - AFTER THE 5 DAY PERIOD - AND
THEREBY REVIVE SBA'S GUARANTEE, PROVIDED THE LOAN WAS NOT YET IN DEFAULT
OR LIKELY TO BE IN DEFAULT.
THE PRIMARY ARGUMENT MADE ON BEHALF OF HNB, HOWEVER, IS THAT OUR
EARLIER DECISIONS ARE NOT APPLICABLE BECAUSE THIS BORROWER WAS NOT IN
DEFAULT OR LIKELY TO BE IN DEFAULT AT THE TIME THE GUARANTEE FEE WAS
PAID TO SBA ON MARCH 24, 1975, SINCE HNB HAD AGREED TO "POSTPONE" THE
DISBURSEMENTS TO, AS WELL AS THE REPAYMENTS FROM, THE BORROWER. THE
BANK CONTENDS THAT THESE ACTIONS WERE JUSTIFIED IN LIGHT OF SBA'S
REQUIREMENT THAT LENDERS INSURE THAT LOAN PROCEEDS ONLY BE USED BY THE
BORROWER FOR THE PURPOSES SPECIFIED IN THE AUTHORIZATION. THUS, SINCE
THE LOAN FUNDS WERE TO BE USED PRIMARILY TO PAY FOR INVENTORY, WHICH WAS
NOT DELIVERED UNTIL MARCH 1974, HNB ARGUES THAT IT WAS JUSTIFIED IN
WITHHOLDING FUNDS UNTIL THE INVENTORY ARRIVED. HNB FURTHER MAINTAINS
THAT EVEN THOUGH HNB DID NOT REQUIRE THE BORROWER TO MAKE ANY PAYMENTS
BEFORE APRIL 1974, AND SO DID NOT CONSIDER THE BORROWER'S "FAILURE" TO
MAKE PAYMENTS BEFORE THAT DATE AS A DEFAULT, ANY SUCH DEFAULT THAT DID
OCCUR WAS CURED WHEN THE BORROWER MADE THE APRIL 4, 1974, PAYMENT OF ALL
ACCRUED UNPAID INTEREST ON THE MONIES RECEIVED UP TO THAT POINT.
IN THE PRESENT CASE, THE RECORD, INCLUDING ALL OF THE CORRESPONDENCE
OF SBA WITH HNB AND THE ACTUAL REPAYMENT RECORD, TENDS TO SUPPORT HNB'S
CONTENTION THAT IT DID NOT CONSIDER THIS LOAN TO BE IN DEFAULT UNTIL
APRIL 1978, WHEN THE BORROWER FILED FOR BANKRUPTCY. HOWEVER, EVEN
ASSUMING THAT TO BE THE CASE, THE MATTER IS NOT RESOLVED. SINCE HNB WAS
CLEARLY DELINQUENT IN PAYING THE FEE, SBA WAS WITHOUT AUTHORITY TO
ACCEPT THE FEE AND HONOR ITS GUARANTEE IF, IN FACT, THE LOAN WAS IN
DEFAULT WHEN THE FEE WAS PAID, WHETHER OR NOT HNB BELIEVED THAT TO BE
THE CASE.
THERE IS NO WRITTEN EVIDENCE IN THE RECORD TO SUBSTANTIATE HNB'S
CLAIM THAT THE TERMS OF THE LOAN, SPECIFICALLY THE REPAYMENT SCHEDULE,
HAD BEEN CHANGED BY MUTUAL AGREEMENT BETWEEN IT AND THE BORROWER.
MOREOVER, HNB NEITHER REQUESTED NOR RECEIVED SBA'S PRIOR WRITTEN
APPROVAL OF ANY CHANGES IN THE TERMS OF THIS LOAN. SBA'S AUTHORIZATION,
WHICH SETS FORTH SBA'S APPROVAL OF HNB'S REQUEST FOR A GUARANTEE SAYS
THAT:
"NO PROVISION STATED HEREIN SHALL BE WAIVED WITHOUT PRIOR WRITTEN
CONSENT OF SBA. THE LOAN SHALL BE ADMINISTERED AS PROVIDED IN THE
GUARANTY AGREEMENT."
THE GUARANTEE AGREEMENT, THE TERMS OF WHICH ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE AUTHORIZATION, IS EVEN MORE SPECIFIC
WHEN IT STATES:
"SBA SHALL EITHER AUTHORIZE THE GUARANTY OR DECLINE IT, BY WRITTEN
NOTICE TO THE LENDER. ANY CHANGE IN THE TERMS OR CONDITION STATED IN
THE LOAN AUTHORIZATION SHALL BE SUBJECT TO PRIOR WRITTEN APPROVAL BY
SBA. AN APPROVED LOAN WILL NOT BE COVERED BY THIS AGREEMENT UNTIL
LENDER SHALL HAVE PAID THE GUARANTY FEE FOR SAID LOAN AS PROVIDED IN
PARAGRAPH 5 OF THIS AGREEMENT."
IN ACCORDANCE WITH A SEPARATE PROVISION IN THE GUARANTY AGREEMENT,
HNB DID NOTIFY SBA IN WRITING OF ALL DISBURSEMENTS ON THE LOAN AS SOON
AS THEY WERE MADE. ARGUABLY, EVEN THOUGH THE NOTE REQUIRED INTEREST
PAYMENTS TO BEGIN AUGUST 21, 1973, 1 MONTH FROM THE DATE OF THE NOTE,
SBA MUST HAVE KNOWN AT LEAST CONSTRUCTIVELY THAT THE BORROWER COULD NOT
HAVE BEEN CONSIDERED IN DEFAULT UNTIL AFTER THE FIRST DISBURSEMENT WAS
MADE ON SEPTEMBER 12, 1973, SINCE THE BORROWER WAS NOT LEGALLY OBLIGATED
TO PAY INTEREST ON MONEY THAT HAD NOT YET BEEN RECEIVED.
IN THIS CONNECTION, THE PROVISION IN THE NOTE REQUIRING THE BORROWER
TO COMMENCE INTEREST PAYMENTS 1 MONTH FROM THE DATE OF THE NOTE WOULD
ONLY MAKE SENSE IF AT LEAST THE INITIAL DISBURSEMENT WAS TO BE MADE NO
LATER THAN 1 MONTH FROM THE DATE OF THE NOTE. THERE IS, HOWEVER, NO
SUCH REQUIREMENT. THE LANGUAGE OF THE AUTHORIZATION GIVES HNB UP TO 6
MONTHS FROM THE DATE OF THE AUTHORIZATION, OR UNTIL JANUARY 5, 1973, TO
MAKE THE FIRST DISBURSEMENT, AND DOES NOT PRESCRIBE A PARTICULAR TIME
FOR EXECUTION OF THE NOTE. SIMILARLY, THE AMOUNTS TO BE PAID MONTHLY,
SPECIFIED IN THE AUTHORIZATION AND THE NOTE, ARE APPARENTLY BASED ON THE
ASSUMPTION THAT THE FULL $53,000 WOULD HAVE BEEN DISBURSED ON THE DATE
OF THE NOTE, EVEN THOUGH THE AUTHORIZATION EXPRESSLY ACKNOWLEDGES THAT
THERE MAY BE MULTIPLE DISBURSEMENTS OVER A 1-YEAR PERIOD.
SBA APPARENTLY ASSUMED, IN ITS JUNE 27, 1978, LETTER TO HNB, THAT
INTEREST AND PRINCIPAL PAYMENTS WERE DUE IN THE AMOUNTS AND AT THE TIMES
SPECIFIED IN THE NOTE, REGARDLESS OF THE FACT THAT DISBURSEMENT OF THE
FULL AMOUNT HAD NOT BEEN MADE WHEN THE PAYMENTS WERE FIRST DUE. HNB
DISPUTES THIS. WE FIND IT UNNECESSARY TO RESOLVE THIS DISPUTE BECAUSE,
EVEN ASSUMING THAT PAYMENTS WERE DUE BASED NOT ON THE DATE AND AMOUNTS
IN THE NOTE BUT ON THE DATES AND AMOUNTS OF THE DISBURSEMENTS, THE
BORROWER WAS IN DEFAULT BEFORE THE GUARANTEE FEE WAS PAID.
WE WOULD AGREE THAT, WITH RESPECT TO THE INTEREST ANY DEFAULT THAT
MIGHT HAVE OCCURRED BEFORE APRIL 4, 1974, WAS CURED BY THE PAYMENT ON
THAT DATE OF ALL ACCRUED UNPAID INTEREST. HOWEVER, THE SAME CANNOT BE
SAID OF THE BORROWER'S DEFAULT IN FAILING TO MAKE THE REQUIRED PRINCIPAL
PAYMENTS. THE BORROWER'S FAILURE TO MAKE PRINCIPAL PAYMENTS CANNOT BE
"EXCUSED" OR EXPLAINED ON THE SAME GROUNDS AS HIS FAILURE TO COMMENCE
INTEREST PAYMENTS AS SPECIFIED.
AS SUGGESTED ABOVE, CONSTRUING ANY AMBIGUITY AS TO WHEN PAYMENTS WERE
TO BEGIN IN FAVOR OF THE BORROWER, THE TERMS OF THE NOTE AS WRITTEN
WOULD AT THE VERY LEAST HAVE REQUIRED THE BORROWER TO COMMENCE MONTHLY
PAYMENTS OF PRINCIPAL (AND INTEREST) ON JANUARY 12, 1974, NO LATER THAN
4 MONTHS FROM THE DATE OF THE FIRST DISBURSEMENT. THUS, THE BORROWER
WAS IN DEFAULT ON THE PRINCIPAL AMOUNT OF THE LOAN, SINCE HE DID NOT
MAKE THE FIRST PRINCIPAL PAYMENT UNTIL MORE THAN 3 MONTHS LATER - ON
APRIL 19, 1974. ALTHOUGH THE BORROWER CONTINUED TO MAKE ALL PRINCIPAL
AND INTEREST PAYMENTS ON A REGULAR MONTHLY BASIS FROM APRIL 19, 1973,
UNTIL MARCH 21, 1978, THE DEFAULT WAS A CONTINUING ONE SINCE THE
"MISSED" PAYMENTS (WHICH, AT A MINIMUM INCLUDED THOSE DUE FOR THE MONTHS
OF JANUARY, FEBRUARY, AND MARCH), WERE NEVER MADE UP BY THE BORROWER.
MOREOVER, WHATEVER MODIFICATION OF THE BASIC LOAN AGREEMENT MAY HAVE
BEEN ATTEMPTED BETWEEN HNB AND THE BORROWER TO "POSTPONE" THE BORROWER'S
OBLIGATION TO MAKE THE COMBINED PRINCIPAL AND INTEREST PAYMENTS, IT IS
OUR VIEW THAT ANY SUCH MODIFICATION WAS NOT LEGALLY EFFECTIVE, AT LEAST
SO FAR AS SBA WAS CONCERNED, SINCE SBA DID NOT GIVE PRIOR WRITTEN
CONSENT AS REQUIRED BY THE AUTHORIZATION.
THEREFORE, THE BORROWER'S FAILURE TO MAKE PRINCIPAL PAYMENTS AS
REQUIRED DID CONSTITUTE A DEFAULT, FOR THE PURPOSE OF DETERMINING SBA'S
OBLIGATION ON ITS GUARANTEE. MOREOVER, THIS DEFAULT WAS NEVER CURED BY
THE BORROWER AND CONTINUED UNTIL HNB REQUESTED SBA TO PURCHASE THE LOAN
IN 1978. ACCORDINGLY, WE AGREE WITH SBA'S DETERMINATION THAT THIS LOAN
WAS NOT COVERED BY THE GUARANTEE WHEN THE BORROWER DEFAULTED AND SHOULD
NOT HAVE BEEN PURCHASED BY SBA.
B-193565, JUL 27, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
FEDERAL PROCUREMENT REGULATIONS SEC. 1-4.1103-1(C)(3) PERMITS
AGENCIES TO PLACE ORDERS FOR AUTOMATED DATA PROCESSING EQUIPMENT UNDER
SCHEDULE CONTRACTS, AND WITHOUT DELEGATION OF PROCUREMENT AUTHORITY
(DPA) FROM GENERAL SERVICES ADMINISTRATION, WHEN PURCHASE PRICE IS LESS
THAN $300,000. HERE, AGENCY PLACEMENT OF SUCH ORDER WAS IMPROPER, SINCE
PURCHASE PRICE EXCEEDED $300,000.
XEROX CORPORATION:
XEROX CORPORATION (XEROX) HAS PROTESTED THE PLACEMENT OF AN ORDER FOR
THE LEASE OF A HIGH SPEED PRINTER BY THE DEPARTMENT OF COMMERCE (DOC)
WITH THE INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) UNDER ITS
AUTOMATED DATA PROCESSING (ADP) SCHEDULE CONTRACT WITH THE GENERAL
SERVICES ADMINISTRATION (GSA).
XEROX CONTENDS THAT FEDERAL PROCUREMENT REGULATIONS (FPR) TEMPORARY
DOC ARGUES, HOWEVER, THAT PARAGRAPH 1-4.1107-6(B)(3) OF THE
REGULATION PERMITS THE USE OF ADP SCHEDULE CONTRACTS FOR THE CONTINUED
LEASE OR RENTAL OF INSTALLED EQUIPMENT EVEN IF THE PURCHASE PRICE
EXCEEDS $300,000 SO LONG AS A CENTRAL PROCESSING UNIT (CPU) IS NOT
INVOLVED. THAT PARAGRAPH PROVIDES THAT:
"(3) ADP SCHEDULE CONTRACTS MAY BE USED FOR THE CONTINUED LEASE OR
RENTAL OF INSTALLED EQUIPMENT AND SOFTWARE EXCEPT THAT THE CONTINUED
LEASE OF AN INSTALLED CENTRAL PROCESSING UNIT (CPU) OR AN ADP SYSTEM
THAT INCLUDES A CPU IS SUBJECT TO THE FOLLOWING:
"(I) REQUIREMENTS SHALL BE SYNOPSIZED IN ACCORDANCE WITH PARAGRAPH
(C) OF THIS SEC. 1-4.1107-6. AND
"(II) A SPECIFIC DELEGATION OF PROCUREMENT AUTHORITY PURSUANT TO SEC.
1-4.1104 IS OBTAINED BEFORE ISSUING THE RENEWAL ORDER WHERE THE SCHEDULE
PURCHASE PRICE EXCEEDS $300,000 WHEN THE EQUIPMENT IS AVAILABLE FROM A
SOURCE OTHER THAN THE SCHEDULE CONTRACT."
DOC NOTES THAT A CPU IS NOT INVOLVED HERE AND, THEREFORE, USE OF ADP
SCHEDULE CONTRACTS WAS PROPER.
SINCE GSA PROMULGATED THE REGULATION IN QUESTION, IT WAS ASKED TO
PROVIDE COMMENTS ON THE PROTEST. IT IS GSA'S POSITION THAT DOC HAS
APPLIED THE INCORRECT SECTION OF THE REGULATION. ACCORDING TO GSA, THE
SECTION CITED BY DOC APPLIES ONLY TO CONTRACTS FOR THE CONTINUED LEASE
OR RENTAL OF INSTALLED EQUIPMENT, NOT TO SITUATIONS WHERE THE INSTALLED
EQUIPMENT IS BEING REPLACED, AS IT IS HERE. RATHER, GSA STATES, THE
CORRECT SECTION OF THE REGULATION TO BE APPLIED IN THIS SITUATION IS FPR
SEC. 1-4.1103-1(C)(3), WHICH PROVIDES THAT AGENCIES:
"*** MAY PROCURE ADPE WITHOUT PRIOR APPROVAL OF GSA PROVIDED:
"(C) THE PROCUREMENT WILL OCCUR BY PLACING A PURCHASE/DELIVERY ORDER
AGAINST A GSA SCHEDULE CONTRACT (SEE 1-4.1107-6) PROVIDED THAT:
"(3) WHEN AN ADTS/ADP SCHEDULE CONTRACT IS UTILIZED, THE TOTAL
PURCHASE PRICE OF THE ITEMS COVERED BY THE ORDER DOES NOT EXCEED
$300,000. (NOTE: EVEN THOUGH THE ITEMS ARE TO BE RENTED OR LEASED, THE
PURCHASE PRICE SHALL BE USED TO DETERMINE IF THE DOLLAR VALUE OF THE
ORDER FALLS WITHIN THE $300,000 THRESHOLD) ***."
THIS SECTION DOES NOT PERMIT USE OF ADP SCHEDULE CONTRACTS WHEN THE
PURCHASE PRICE OF THE ITEMS EXCEEDS $300,000, EVEN THOUGH THE ITEMS ARE
TO BE LEASED RATHER THAN PURCHASED. IN SUCH SITUATIONS, THE PROCURING
AGENCY MUST OBTAIN A DELEGATION OF PROCUREMENT AUTHORITY FROM GSA AND
MUST FOLLOW THE APPROPRIATE FPR PROVISIONS.
GSA ALSO PROVIDED OUR OFFICE WITH THE FOLLOWING FACTS. AFTER PLACING
THE ORDER, DOC CONTACTED GSA CONCERNING THE NEED FOR A DELEGATION OF
PROCUREMENT AUTHORITY (DPA) IN NOVEMBER 1978. AT THAT TIME, GSA ADVISED
DOC THAT A DPA WAS NOT REQUIRED. HOWEVER, IN MID-JANUARY 1979, GSA
REVIEWED THE TRANSACTION, CHANGED ITS POSITION AND INFORMALLY ADVISED
DOC THAT A DPA WAS NECESSARY. ON MARCH 27, 1979, GSA FORMALLY NOTIFIED
DOC THAT IT WAS WITHOUT AUTHORITY TO PROCEED WITH THE ACQUISITION UNTIL
"AN APPROPRIATE DPA WAS OBTAINED AND THE EQUIPMENT SELECTED IN
ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE FEDERAL PROCUREMENT
REGULATIONS." DOC REQUESTED A DPA ON MAY 22, 1979. GSA IS HOLDING
ACTION ON THE REQUEST IN ABEYANCE UNTIL RESOLUTION OF THIS PROTEST.
THE VIEW OF GSA IS ENTITLED TO SIGNIFICANT WEIGHT BECAUSE IT
PROMULGATED THE REGULATION, AND BECAUSE IT HAS STATUTORY RESPONSIBILITY
FOR GOVERNMENT ADP PROCUREMENT. CONTROL DATA CORPORATION, B-186501,
FEBRUARY 2, 1977, 77-1 CPD 83; COMDISCO, INC., 54 COMP. GEN. 196
(1974), 74-2 CPD 152. IN ADDITION, OUR INTERPRETATION OF THE
REGULATIONS IS IN AGREEMENT WITH GSA'S. ACCORDINGLY, WE FIND THAT DOC'S
ACTIONS IN PROCURING THE PRINTERS WERE IMPROPER, AND THE PROTEST IS
SUSTAINED.
WE HAVE BEEN ADVISED THAT WHILE THE EQUIPMENT HAS BEEN ORDERED, IT
HAS NOT BEEN DELIVERED OR INSTALLED. THEREFORE, WE RECOMMEND THAT GSA
RULE ON DOC'S PENDING REQUEST FOR A DPA AND THAT DOC TAKE WHATEVER
ACTION IS NECESSARY AS A RESULT OF GSA'S DETERMINATION.
B-194380, JUL 27, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE ISSUE RAISED IN REQUEST FOR RECONSIDERATION OF GAO DECISION IS
ALSO PRESENTED TO CONTRACT APPEALS BOARD, GAO DECLINES TO CONSIDER
REQUEST SINCE FIRM MAY NOT ARGUE SAME ISSUE IN TWO FORUMS. IN ANY
EVENT, EVIDENCE OFFERED BY FIRM IS SELF-SERVING IN NATURE AND WOULD NOT
BE ACCEPTABLE BASIS FOR RECONSIDERATION OF PRIOR DECISION.
SOUTHERN WOOD PIEDMONT COMPANY - RECONSIDERATION:
THE SOUTHERN WOOD PIEDMONT COMPANY (SOUTHERN WOOD) REQUESTS THAT WE
RECONSIDER OUR DECISION IN DEPARTMENT OF THE INTERIOR, B-194380, APRIL
17, 1979, 79-1 CPD 271. THE CONTRACTING OFFICER HAD RECEIVED FROM THE
LOW BIDDER (SOUTHERN WOOD) A VERIFICATION OF ITS BID PRICE AFTER
INFORMING SOUTHERN WOOD THAT VERIFICATION WAS REQUESTED DUE TO THE LARGE
DIFFERENCE BETWEEN THE LOW BID PRICE AND THE NEXT LOW BIDDER'S PRICE.
BECAUSE OF THIS, WE HELD THAT THE RESULTANT CONTRACT WAS VALID AND
BINDING NOTWITHSTANDING SOUTHERN WOOD'S POSTAWARD ALLEGATION OF A
MISTAKE IN BID. THE AGENCY HAD REFERRED THE MATTER TO OUR OFFICE FOR A
DECISION.
SOUTHERN WOOD CONTENDS THAT THE CONTRACTING ACTIVITY - CONTRARY TO
THE LATTER'S ASSERTION - DID NOT FULFILL ITS VERIFICATION DUTY IN THAT
THE ACTIVITY DID NOT ADVISE THE FIRM OF THE POSSIBILITY OF A MISTAKE AND
THE REASONS THEREFOR AND OFFERS AS EVIDENCE THE TESTIMONY OF A WITNESS -
A SALES MANAGER OF SOUTHERN WOOD - TO THE VERIFICATION REQUEST.
SOUTHERN WOOD STATES THAT IT HAS FILED AN APPEAL UNDER THE DISPUTES
CLAUSE OF THE CONTRACT WITH THE CONTRACT APPEALS BOARD OF THE DEPARTMENT
OF THE INTERIOR "OVER THE FACTS SURROUNDING THE MISTAKE AND OUR BID,
***." THE GOVERNMENT FILED A MOTION FOR DISMISSAL, AND THE CASE IS
CURRENTLY PENDING. SINCE WE DO NOT BELIEVE THAT A FIRM SHOULD BE
ALLOWED TO PURSUE THE SAME MATTER BEFORE TWO FORUMS - IN THIS CASE, OUR
OFFICE AND THE BOARD - WE MUST DECLINE TO CONSIDER THE REQUEST FOR
RECONSIDERATION. GTE SYLVANIA, INCORPORATED, B-192985, JANUARY 25,
1979, 79-1 CPD 53.
IN ANY EVENT, AND MERELY FOR INFORMATION PURPOSES, WE HAVE HELD THAT
EVIDENCE SUBMITTED BY AN EMPLOYEE OF A FIRM REQUESTING US TO RENDER A
DECISION FAVORABLE TO ITSELF IS SELF-SERVING IN NATURE AND UNACCEPTABLE
AS IT IS NOT EVIDENCE DERIVED INDEPENDENTLY OF THAT FIRM. P. W. PARKER,
INC., B-190286, JANUARY 6, 1978, 78-1 CPD 12; RODERICK CONSTRUCTION,
B-193116, JANUARY 30, 1979, 79-1 CPD 69.
BECAUSE OF THE ABOVE, THE REQUEST FOR A CONFERENCE ON THE MATTER IS
DENIED.
B-194552, JUL 27, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. FAILURE OF BIDDER TO ACKNOWLEDGE RECEIPT OF IFB AMENDMENT WHICH
REPEATED, BUT DID NOT CHANGE, IFB REQUIREMENTS WAS PROPERLY WAIVED AS
MINOR INFORMALITY SINCE BIDDER IS BOUND TO REQUIREMENTS OF IFB EVEN
THOUGH AMENDMENT WAS NOT ACKNOWLEDGED.
2. GAO DISMISSES PROTEST AGAINST AFFIRMATIVE DETERMINATION OF LOW
BIDDER'S RESPONSIBILITY WHERE AWARD WAS PRECEDED BY FAVORABLE PREAWARD
SURVEY, ABSENT EVIDENCE OF FRAUD OR OTHER CIRCUMSTANCES NOT APPLICABLE
HERE.
GILLETTE INDUSTRIES, INC., D/B/A LA CROSSE GARMENT MFG. CO.:
GILLETTE INDUSTRIES, INC. (GILLETTE), D/B/A LA CROSSE GARMENT
MANUFACTURING CO., PROTESTS THE AWARD TO CECILE INDUSTRIES, INC.
(CECILE), UNDER INVITATION FOR BIDS (IFB) NO. DLA 100-79-B-0442, ISSUED
BY THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA,
PENNSYLVANIA. GILLETTE CONTENDS THAT CECILE'S BID IS NONRESPONSIVE FOR
FAILING TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 1 TO THE IFB PRIOR TO
BID OPENING. GILLETTE IS OF THE VIEW THAT THE AMENDMENT HAD AN EFFECT
ON PRICE AND DELIVERY DATES. GILLETTE ALSO CONTENDS THAT CECILE IS A
NONRESPONSIBLE BIDDER.
THE SUBJECT IFB, A 100-PERCENT SMALL BUSINESS SET-ASIDE, CALLED FOR
FURNISHING SLEEPING BAGS. BIDS WERE OPENED APRIL 5, 1979, AND OF THE
EIGHT FIRMS BIDDING, THE LOW EVALUATED BID WAS SUBMITTED BY CECILE IN
THE AMOUNT OF $1,780,852.24. THE SECOND LOW BID WAS SUBMITTED BY
GILLETTE IN THE AMOUNT OF $1,798,622.50.
THE CONTRACTING OFFICER STATES THAT THE AMENDMENT WAS ISSUED TO
CORRECT SEVERAL MINOR ADMINISTRATIVE ERRORS WHICH OCCURRED DURING THE
ISSUANCE OF THE SUBJECT IFB AND THAT CECILE'S FAILURE TO ACKNOWLEDGE
RECEIPT OF THE AMENDMENT WAS PROPERLY WAIVED AS A MINOR INFORMALITY IN
ACCORDANCE WITH DEFENSE ACQUISITION REGULATION (DAR) SEC. 2-405(IV)(B)
(1976 ED.) WHICH PERMITS WAIVER WHERE:
"*** THE AMENDMENT CLEARLY WOULD HAVE NO EFFECT OR MERELY A TRIVIAL
OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, DELIVERY, OR THE
RELATIVE STANDING OF THE BIDDERS ***."
AMENDMENT 0001 ADDED THE FOLLOWING LANGUAGE TO PAGE 18 OF THE IFB
(THE SCHEDULE): "PRICES OFFERED WILL BE BASED ON FOB DESTINATION AND
MUST INCLUDE THE VALUE OF MATERIAL TO BE FURNISHED BY THE GOVERNMENT."
THE CONTRACTING OFFICER STATES THAT SUCH LANGUAGE IS USUALLY INCLUDED IN
THE PORTION OF AN IFB WHICH PROVIDES GOVERNMENT-FURNISHED MATERIAL TO BE
USED BY THE CONTRACTOR, BUT THE OMISSION OF THAT LANGUAGE FROM THE
SUBJECT IFB WAS IMMATERIAL HERE SINCE THE SUBJECT MATTER WAS DISCUSSED
IN OTHER IFB PROVISIONS. WITH RESPECT TO THE FIRST PORTION OF THE ADDED
LANGUAGE, THE CONTRACTING OFFICER POINTS TO PAGE 18 OF THE IFB WHICH
INDICATES THAT ONLY F.O.B. DESTINATION BIDS ARE CONTEMPLATED. PAGE 16
IS REFERRED TO WHICH REVEALS THAT CLAUSE D26 "DESIGNATION OF F.O.B.
POINT" IS APPLICABLE AND THIS CLAUSE MAKES IT CLEAR THAT ANY BIDS
OFFERED ON ANY BASIS OTHER THAN THAT SPECIFIED IN THE IFB WILL BE
REJECTED AS NONRESPONSIVE. MOREOVER, WE OBSERVE THAT CLAUSES INVOLVING
F.O.B. ORIGIN WERE NOT INCORPORATED BY REFERENCE INTO THE IFB. UNDER
THESE CIRCUMSTANCES, WE BELIEVE THAT BIDS ON AN F.O.B. DESTINATION BASIS
WERE ALREADY REQUIRED BY THE IFB AND THE AMENDMENT ADDED NOTHING IN THIS
REGARD.
PAGE 12 OF THE IFB CONTAINED CLAUSE C94 - "PROVISIONS RELATING TO
MATERIAL TO BE FURNISHED BY THE GOVERNMENT (C&T BAILMENT SYSTEM)" -
WHICH INFORMED BIDDERS THAT OFFERED PRICES MUST CONTAIN THE VALUE OF
MATERIAL TO BE FURNISHED BY THE GOVERNMENT. PARAGRAPH "E" OF THAT
CLAUSE PROVIDES THAT UPON DELIVERY OF END ITEMS, AN ADMINISTRATIVELY
DETERMINED RATE (IN THIS INSTANCE $22.92 PER UNIT) WILL BE DEDUCTED FROM
THE CONTRACT PRICE AND APPLIED TO COVER THE VALUE OF THE GOVERNMENT
MATERIAL AND THE BALANCE OF THE CONTRACT PRICE WILL BE PAID TO THE
CONTRACTOR. REGARDLESS OF THE AMOUNT OF GOVERNMENT MATERIAL USED, THE
UNIT COST TO THE GOVERNMENT OF EACH ITEM ACCEPTED INCLUDING GOVERNMENT
MATERIAL WAS NOT PERMITTED TO EXCEED THE CONTRACT UNIT PRICE FOR THE
ITEM. PARAGRAPH Q(B) OF THAT CLAUSE FURTHER PROVIDES THAT "TRADE
DISCOUNTS OFFERED OR DISCOUNTS CONSIDERED TRADE DISCOUNTS IN ACCORDANCE
WITH CLAUSE D13, 'DISCOUNT LIMITATION,' WILL BE COMPUTED ON THE BASIS OF
THE FULL PRICE OFFERED, WHICH INCLUDES THE OFFEROR'S ESTIMATED VALUE OF
GOVERNMENT MATERIAL FURNISHED UNDER THE CLOTHING AND TEXTILE BAILMENT
SYSTEM." WE AGREE WITH THE CONTRACTING OFFICER THAT, SINCE THESE
PROVISIONS OF THE IFB REQUIRED BIDDERS TO INCLUDE IN THEIR PRICES THE
VALUE OF GOVERNMENT-FURNISHED MATERIAL, THE INFORMATION CONTAINED IN THE
AMENDMENT WITH REGARD TO THIS REQUIREMENT WAS DUPLICATIVE AND NOT
ESSENTIAL.
AS TO THE REMAINDER OF AMENDMENT 0001, WHICH RELATES TO THE DELIVERY
SCHEDULE FOR COMPLETED END ITEMS AS SET FORTH ON PAGES 28 AND 29 OF THE
IFB, WE CONCUR IN THE CONTRACTING OFFICER'S CONCLUSION THAT THE ADDED
LANGUAGE ONLY RESTATED REQUIREMENTS ALREADY IN THE IFB. THE CHANGE IN
THE WORD "DESCRIPTION" TO "DESTINATION" IS MINOR SINCE THE DESTINATIONS
OF THE DELIVERY INCREMENTS ARE IDENTIFIED ON THOSE SAME PAGES. ALSO,
SINCE THE DELIVERY INCREMENTS AND QUANTITIES ARE SET FORTH ON PAGES 28
AND 29 OF THE IFB, THE OTHER INFORMATION ADDED BY THE AMENDMENT IS
MERELY A SUMMARY OF THE STATED DELIVERY SCHEDULE. THE CONTRACTING
OFFICER REPORTS THAT WHILE THE LANGUAGE OF THE AMENDMENT AS IT RELATES
TO THE END ITEM DELIVERY SCHEDULE WOULD SEEM TO PERMIT A 30-DAY DELIVERY
ACCELERATION PERIOD NOT SIMILARLY AVAILABLE UNDER THE TERMS OF THE
SCHEDULE APPEARING ON PAGES 28 AND 29, THAT SAME 30-DAY PERIOD IS
PROVIDED FOR UNDER THE TERMS OF CLAUSE H52 "DELIVERY REQUIREMENTS,"
INCORPORATED BY REFERENCE ON PAGE 22 OF THE IFB.
BASED ON THE ABOVE, WE BELIEVE THAT GILLETTE'S FAILURE TO ACKNOWLEDGE
RECEIPT OF THE AMENDMENT WAS PROPERLY WAIVED AS A MINOR INFORMALITY. WE
HAVE HELD THAT WHERE, AS HERE, AN AMENDMENT DOES NO MORE THAN REPEAT
WHAT IS ALREADY IN THE IFB, SO THAT A BIDDER IS BOUND TO ALL MATERIAL
REQUIREMENTS WITHOUT REGARD TO THE AMENDMENT, THE FAILURE TO ACKNOWLEDGE
THE AMENDMENT DOES NOT REQUIRE BID REJECTION. SEE INDUSTRIAL
MAINTENANCE SERVICES, INC., B-190975, MAY 2, 1978, 78-1 CPD 339.
GILLETTE'S SECOND BASIS OF PROTEST IS THAT CECILE IS A NONRESPONSIBLE
BIDDER. THE CONTRACTING OFFICER REPORTS THAT A FAVORABLE PREAWARD
SURVEY PRECEDED THE AWARD TO THAT FIRM. WE DO NOT REVIEW SUCH PROTESTS
UNDER OUR BID PROTEST PROCEDURES EXCEPT WHERE FRAUD BY PROCURING
OFFICIALS IS SHOWN, OR IN OTHER CIRCUMSTANCES WHICH ARE NOT APPLICABLE
HERE. MARS SIGNAL LIGHT COMPANY, B-193942, MARCH 7, 1979, 79-1 CPD 164.
FOR THE REASONS STATED, THE PROTEST IS DENIED IN PART AND DISMISSED
IN PART.
B-194980, JUL 27, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST MAY BE DECIDED WITHOUT AGENCY REPORT WHERE IT IS APPARENT
FROM SUBMISSION THAT PROTEST IS WITHOUT LEGAL MERIT.
2. LOW BID IS NONRESPONSIVE AND NOT FOR CONSIDERATION WHERE BIDDER'S
CORPORATE SURETY WAS NOT LISTED IN TREASURY CIRCULAR 570 AS REQUIREMENT
IN SOLICITATION FOR ADEQUATE SURETY IS MATERIAL TO BID AND FAILURE TO
PROVIDE APPROVED SURETY MAY NOT BE WAIVED OR EXCUSED.
S. T. C. CONSTRUCTION COMPANY:
S.T.C. CONSTRUCTION COMPANY (STC) HAS PROTESTED THE REJECTION OF ITS
BID SUBMITTED UNDER IFB NO. 4450-79-A-R ISSUED BY THE NATIONAL PARKS
SERVICE, DEPARTMENT OF THE INTERIOR.
IT IS CLEAR FROM STC'S SUBMISSION THAT ITS PROTEST IS WITHOUT LEGAL
MERIT AND, THEREFORE, WE HAVE NOT OBTAINED AN AGENCY REPORT BEFORE
REACHING OUR DECISION. KLEAN-VU MAINTENANCE, INC. B-194054, FEBRUARY
22, 1979, 79-1 CPD 126.
ACCORDING TO STC'S SUBMISSION, ITS LOW BID IS NOT BEING CONSIDERED
FOR AWARD BECAUSE THE CORPORATE SURETY ON ITS BID BOND WAS NOT LISTED IN
TREASURY DEPARTMENT CIRCULAR 570, ENTITLED "COMPANIES HOLDING
CERTIFICATES OF AUTHORITY AS ACCEPTABLE SURETIES ON FEDERAL BONDS AND AS
ACCEPTABLE REINSURING COMPANIES." STC ARGUES THAT ITS BID BOND AS
SUBMITTED IS ADEQUATE, THAT AN HONEST MISTAKE WAS MADE IN NOT UTILIZING
A SURETY ON THE APPROVED LIST AND THAT IT IS WILLING TO SUBSTITUTE A BID
BOND SIGNED BY AN APPROVED SURETY FOR THE OBJECTIONABLE BOND. ALSO, STC
STATES THAT BIDDERS WERE NOT PUT ON ADEQUATE NOTICE OF THE REQUIREMENT
THAT THE SURETY BE ON THE APPROVED LIST.
IN ALPHA SIGMA INVESTMENT CORP., B-194629.2, MAY 17, 1979, 79-1 CPD
360, WE CONSIDERED ALL OF THE ISSUES PRESENTED BY STC HERE, BASED ON A
SIMILAR FACTUAL SITUATION, AND FOUND THE BID TO BE NONRESPONSIVE. IN
THAT DECISION, WE NOTED THAT FAILURE TO PROVIDE AN ACCEPTABLE BID
GUARANTEE WILL RENDER A BID NONRESPONSIVE AND THAT THE FAILURE MAY NOT
BE WAIVED OR EXCUSED EXCEPT IN LIMITED CIRCUMSTANCES, NOT APPLICABLE
HERE. 46 COMP. GEN. 11 (1966).
IN ALPHA, SUPRA, REGARDING THE CONTENTION THAT THE BID DOCUMENTS DID
NOT SUFFICIENTLY ALERT BIDDERS TO THE REQUIREMENT, WHILE NOTING THE LACK
OF MENTION OF CIRCULAR 570 IN THE SOLICITATION, WE OBSERVED:
"STANDARD FORM 21, TO WHICH THE PROTESTER REFERS, STATES THAT THE BID
MUST BE ACCOMPANIED BY A 'GOOD AND SUFFICIENT SURETY.' THIS LANGUAGE
PUTS THE POTENTIAL BIDDER ON NOTICE THAT NOT EVERY SURETY WILL BE
CONSIDERED ADEQUATE, AND THE BURDEN AT THIS POINT IS ON THE BIDDER TO
DETERMINE WHETHER ITS BONDING COMPANY IS ACCEPTABLE TO THE GOVERNMENT.
FURTHER, SF 22, INSTRUCTIONS TO BIDDERS, WHICH SUPPLEMENTS SF 21, STATES
AT PARAGRAPH NUMBER FOUR,
"'*** FAILURE TO FURNISH THE BID GUARANTEE IN PROPER FORM AND AMOUNT
*** MAY BE CAUSE FOR REJECTION OF THE BID.'
"THE REQUIREMENT TO PROVIDE AN ACCEPTABLE SURETY IS STATED ON THE
FORMS WHICH ASI RECEIVED. IT IS INCUMBENT UPON THE WOULD-BE BIDDER TO
DETERMINE WHICH OF THE SURETIES AVAILABLE ARE ACCEPTABLE TO THE
GOVERNMENT. TO DO SO, THE BIDDER WOULD HAVE TO LOOK OUTSIDE THE FOUR
CORNERS OF THE FORMS. CHEMICAL TECHNOLOGY, INC., (B-192893, DECEMBER
27, 1978, 78-2 CPD 438). ASI, BY CONSULTING THE FEDERAL PROCUREMENT
REGULATIONS IN THIS REGARD, WOULD HAVE LEARNED OF THE EXISTENCE OF A
CONVENIENT LIST OF ACCEPTABLE SURETIES, TREASURY CIRCULAR 570. SINCE
THE REGULATIONS ARE ACCESSIBLE TO ALL BIDDERS, IT IS NOT UNREASONABLE TO
EXPECT THAT BIDDERS IN NEED OF INFORMATION TO SUPPLEMENT THE PROVIDED
FORMS WOULD CHECK THAT SOURCE. ASI'S FAILURE TO DO SO RESULTED IN IT
FURNISHING A BOND FROM A SURETY THAT APPARENTLY IS UNACCEPTABLE TO THE
GOVERNMENT, AND ITS BID THEREFORE IS NONRESPONSIVE. SINCE THE BID WAS
NONRESPONSIVE, ASI MAY NOT NOW AMEND IT TO MAKE IT RESPONSIVE.
PERMITTING SUCH AN AMENDMENT WOULD BE CONTRARY TO ESTABLISHED
COMPETITIVE PROCUREMENT PROCEDURES. NEWPORT SHIP YARD, INC., B-191703,
MAY 25, 1978, 78-1 CPD 400; FPR SEC. 1-2.406-3(A) (1964 ED. AMEND.
165)."
ACCORDINGLY, THE PROTEST IS SUMMARILY DENIED.
B-194658, JUL 26, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE PROTESTER (INCUMBENT CONTRACTOR) WAS NOT SOLICITED, BIDS
NEED NOT BE REJECTED SINCE THERE IS NO EVIDENCE OF DELIBERATE OR
CONSCIOUS ATTEMPT TO PRECLUDE PROTESTER FROM BIDDING AND PROTESTER DOES
NOT QUESTION REASONABLENESS OF BIDS OR WHETHER SIGNIFICANT EFFORT WAS
MADE TO OBTAIN COMPETITION.
2. GAO DOES NOT CONDUCT INVESTIGATIONS AS PART OF BID PROTEST
FUNCTION FOR PURPOSE OF ESTABLISHING VALIDITY OF SPECULATIVE
ALLEGATIONS; PROTESTER HAS BURDEN OF PROVING SUCH ALLEGATIONS.
MID-AMERICA FOOD SERVICE, INC.:
MID-AMERICA FOOD SERVICE, INC. (MID-AMERICA), PROTESTS THE PROPOSED
AWARD OF A CONTRACT TO ANOTHER FIRM BY THE DEPARTMENT OF THE ARMY, FORT
LEAVENWORTH, KANSAS, UNDER INVITATION FOR BIDS (IFB) NO.
DABT19-79-B-0020. MID-AMERICA CONTENDS THAT ITS FIRM WAS NOT SOLICITED
FOR THE FOOD SERVICE CONTRACT DESPITE THE FACT THAT IT HAS PROVIDED HOT
MEALS TO THE ARMED FORCES EXAMINING AND ENTRANCE STATION (AFEES) SINCE
JUNE 1, 1978. MID-AMERICA ARGUES THAT AN AWARD OF A CONTRACT, AS
PRESENTLY SOLICITED, WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT
AND WOULD VIOLATE FUNDAMENTAL PRINCIPLES OF FAIRNESS TO THE INCUMBENT
CONTRACTOR. MID-AMERICA FURTHER STATES THAT IT HAS AN "ESTABLISHED
HISTORY OF SUPERIOR SERVICE AT A COMPETITIVE PRICE" ON THE PRESENT
CONTRACT. MID-AMERICA REQUESTS RESOLICITATION OF THE IFB SO THAT IT CAN
SUBMIT A BID ON THE SUBJECT PROCUREMENT.
THE IFB WAS ISSUED ON MARCH 7, 1979, AND BID OPENING WAS SCHEDULED
FOR APRIL 6. ON APRIL 10 AN ARMY REPRESENTATIVE CONTACTED MID-AMERICA
AND INQUIRED WHY IT HAD NOT SUBMITTED A BID FOR THE FOOD SERVICE
CONTRACT SINCE AFEES HAD BEEN SATISFIED WITH ITS PAST PERFORMANCE. BY
REASON OF THIS PHONE CALL MID-AMERICA LEARNED THAT BIDS HAD BEEN ISSUED
BUT IT HAD NOT RECEIVED ANY NOTICE OF THIS. MID-AMERICA SUBSEQUENTLY
CONTACTED THE CONTRACTING OFFICER AND LEARNED THAT THE BIDS HAD BEEN
OPENED AND THAT PREPARATIONS FOR AWARDING THE CONTRACT WERE BEING MADE.
THE ARMY REPORTS THAT ALL SIX FIRMS ON THE BIDDER'S MAILING LIST WERE
SOLICITED AND THE REQUIREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS
DAILY (CBD). THREE FIRMS NOT ON THE MAILING LIST REQUESTED COPIES OF
THE SOLICITATION. THE ARMY FURTHER REPORTS THAT MID-AMERICA NEVER WAS
ON THE MAILING LIST. IT APPEARS THAT MID-AMERICA RECEIVED THE PREVIOUS
SOLICITATION, UNDER WHICH IT WAS THE SUCCESSFULL BIDDER, FROM A THIRD
PARTY. IN ANY EVENT THE ARMY IS REVISING ITS MAILING LIST PROCEDURES SO
THAT ALL FIRMS PARTICIPATING IN A PROCUREMENT WILL BE ADDED THERETO.
THREE BIDS WERE RECEIVED. THE LOWEST PRICE OFFERED WAS $2.50 PER
MEAL. MID-AMERICA'S CURRENT CONTRACT PRICE IS $2.58 PER MEAL.
WE HAVE HELD IN NUMEROUS DECISIONS THAT WHERE ADEQUATE COMPETITION
RESULTED IN REASONABLE PRICES AND WHERE THERE WAS NO DELIBERATE OR
CONSCIOUS INTENT ON THE PART OF THE PROCURING AGENCY TO PRECLUDE A
BIDDER FROM COMPETING, BIDS NEED NOT BE REJECTED SOLELY BECAUSE A BIDDER
(EVEN THE INCUMBENT CONTRACTOR) DID NOT RECEIVE A COPY OF THE IFB.
WICHITA BEVERAGE, INC., D/B/A/ PEPSI-COLA AND SEVEN-UP BOTTLING COMPANY,
B-191205, JULY 6, 1978, 78-2 CPD 11. OUR OFFICE HAS ALSO HELD THAT
ADEQUATE COMPETITION IS NORMALLY OBTAINED WHEN COMPETITIVE BIDS HAVE
BEEN RECEIVED. RELIABLE ELEVATOR CORP., B-191061, APRIL 27, 1978, 78-1
CPD 330.
MID-AMERICAN ARGUES THAT IT SHOULD BE AFFORDED RELIEF SIMILAR TO THAT
SANCTIONED IN SCOTT GRAPHICS, INCORPORATED; PHOTOMEDIA CORPORATION
(SCOTT), B-183274, MAY 19, 1975, 75-1 CPD 302, AND IN PLATTSBURGH
LAUNDRY AND DRY CLEANING CORP.; NU ART CLEANERS LAUNDRY (PLATTSBURGH),
B-180380, JULY 15, 1974, 74-2 CPD 27. WE DISAGREE, SINCE BOTH DECISIONS
ARE CLEARLY DISTINGUISHABLE ON THE FACTS FROM THE INSTANT PROTEST. IN
SCOTT NOT ONLY WAS THE INCUMBENT NOT ON THE MAILING LIST, BUT THE
PROCUREMENT WAS NEVER SYNOPSIZED IN THE CBD. MOREOVER, THERE WERE ONLY
A SMALL NUMBER OF MANUFACTURERS CAPABLE OF MAKING THE REQUIRED
MICRO-PHOTOGRAPHIC DUPLICATING FILMS AND IN PREVIOUS PROCUREMENTS THE
LOW BID USUALLY CAME FROM ONE OF THOSE MANUFACTURERS. FURTHER, ONE OF
THE LIMITED NUMBER OF MANUFACTURERS WAS NOT SOLICITED. WE CONCLUDED
THAT THERE WAS MERIT IN THE AGENCY'S CONTENTION THAT THE CUMULATIVE
EFFECT OF THE ABOVE FACTORS HAD TAINTED THE COMPETITION. CONSEQUENTLY
WE INTERPOSED NO OBJECTION TO THE AGENCY'S DECISION TO CANCEL AND
RESOLICIT THE REQUIREMENT. IN PLATTSBURG THE AGENCY DELIBERATELY FAILED
TO FURNISH THE INCUMBENT WITH A COPY OF THE SOLICITATION. MOREOVER THE
REQUIREMENT WAS NOT SYNOPSIZED IN THE CBD. FINALLY ONLY THREE SOURCES
WERE SOLICITED. WE THEREFORE RECOMMENDED CANCELLATION AND
RESOLICITATION OF THE REQUIREMENT.
MID-AMERICA HAS ALSO REQUESTED THAT GAO PERFORM A FULL INVESTIGATION
OF THE CIRCUMSTANCES SURROUNDING ITS FAILURE TO RECEIVE A COPY OF THE
SOLICITATION AND THE REASON BEHIND THE ISSUANCE OF THE SOLICITATION
THREE TO FOUR WEEKS PRIOR TO THE TIME IT WAS PREVIOUSLY ISSUED. UNLESS
SUCH AN INVESTIGATION IS CONDUCTED, MID-AMERICA ASSERTS THAT IT CANNOT
BE SURE THE FAILURE TO SOLICIT IT WAS INADVERTENT.
WE DO NOT CONDUCT INVESTIGATIONS AS PART OF OUR BID PROTEST FUNCTION
FOR THE PURPOSE OF ESTABLISHING THE VALIDITY OF A PROTESTER'S
SPECULATIVE ALLEGATIONS. MISSION ECONOMIC DEVELOPMENT ASSOCIATION,
B-182686, AUGUST 2, 1976, 76-2 CPD 105. IN OUR VIEW, MID-AMERICA HAS
FAILED TO PRESENT THE INFORMATION AND EVIDENCE NECESSARY TO SUBSTANTIATE
ITS SPECULATIVE ASSERTION THAT THE FAILURE TO SOLICIT MAY HAVE RESULTED
FROM OTHER THAN INADVERTENCE. KURZ-KASCH, INC., B-192604, SEPTEMBER 8,
1978, 78-2 CPD 181.
ACCORDINGLY, THE PROTEST IS DENIED.
B-175155, JUL 25, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CONGRESS APPROPRIATED LUMP-SUM FOR GRANTS "OF WHICH $75 MILLION SHALL
BE AVAILABLE" FOR RAIL SERVICE OPERATING PAYMENTS (RSOP). BEFORE
APPROPRIATION WAS OBLIGATED, NEW FORMULA, ALLOCATING SUMS TO "NON-RAIL
FIXED GUIDEWAYS" BASED ON AMOUNT OF RSOP, WAS ENACTED. AGENCY MUST
HONOR $75 MILLION FOR RSOP BUT IS NOT REQUIRED TO ALLOCATE LUMP-SUM
ACCORDING TO NEW OR OLD FORMULA: OLD FORMULA WAS REPEALED AND NEW
FORMULA, BY ITS TERMS, APPLIES TO APPROPRIATIONS PURSUANT TO
AUTHORIZATION THEREIN. AGENCY IS THEREFORE NOT REQUIRED TO FUND
ALLOCATION TO NON-RAIL FIXED GUIDEWAYS.
RAIL SERVICE OPERATING PAYMENTS APPROPRIATION FY 1979 - APPLICABLE
ALLOCATION FORMULA:
THIS DECISION IS IN RESPONSE TO A LETTER FROM THE CHAIRMAN AND FIVE
MEMBERS OF THE HOUSE COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION,
REQUESTING OUR OPINION ON WHAT THE LETTER TERMED "A CONFLICT IN
STATUTORY INTERPRETATION." THE CONFLICT IS OVER THE METHOD TO DISTRIBUTE
$75 MILLION, WHICH WAS EARMARKED FROM WITHIN A LARGER APPROPRIATION FOR
URBAN FORMULA GRANTS TO THE URBAN MASS TRANSPORTATION ADMINISTRATION
(UMTA), DEPARTMENT OF TRANSPORTATION, FOR "RAIL SERVICE OPERATING
PAYMENTS."
THE SUBSTANTIVE LEGISLATIVE AUTHORITY GOVERNING THE DISTRIBUTION OF
THESE FUNDS AT THE TIME THE APPROPRIATION WAS ENACTED WAS REPEALED 10
WEEKS LATER. A NEW DISTRIBUTION FORMULA, MUCH BROADER IN SCOPE, WAS
ENACTED AT THAT TIME. THE QUESTION IS WHETHER THAT NEW FORMULA APPLIES
TO THE EARLIER ENACTED APPROPRIATION IN WHOLE, IN PART, OR ONLY
PROSPECTIVELY.
A. LEGISLATIVE BACKGROUND
THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATION
ACT, 1979, PUB. L. 95-335, APPROVED AUGUST 4, 1978, 92 STAT. 444,
APPROPRIATED FUNDS FOR URBAN FORMULA GRANTS AS FOLLOWS:
"FOR NECESSARY EXPENSES FOR URBAN FORMULA GRANTS AS AUTHORIZED BY THE
URBAN MASS TRANSPORTATION ACT OF 1964, AS AMENDED, *** $553,500,000, OF
WHICH *** $75 MILLION SHALL BE AVAILABLE FOR RAIL SERVICE OPERATING
PAYMENTS, TO REMAIN AVAILABLE UNTIL SEPTEMBER 30, 1982."
AT THE TIME THE APPROPRIATION WAS ENACTED, THE APPLICABLE AUTHORITY
IN THE URBAN MASS TRANSPORTATION ACT OF 1964, AS AMENDED, WAS SECTION
18. IT AUTHORIZED A MAXIMUM OF $20 MILLION TO PROVIDE ASSISTANCE TO
"STATES, LOCAL PUBLIC BODIES AND AGENCIES THEREOF" FOR SUPPORT OF
OPERATION OF RAIL PASSENGER SERVICE. THE FUNDS WERE TO BE DISTRIBUTED
IN ACCORDANCE WITH A FORMULA, THE MAIN INGREDIENT OF WHICH WAS THE
NUMBER OF PASSENGER MILES ATTRIBUTABLE TO EACH ELIGIBLE RAIL PASSENGER
SERVICE.
A FEW MONTHS BEFORE ENACTMENT OF THE APPROPRIATION ACT, THE SENATE
BANKING COMMITTEE REPORTED A NEW AUTHORIZATION BILL FOR TRANSIT
LEGISLATION. (S. 2441, MAY 15, 1978). IT PROPOSED REPEAL OF SECTION
18, DISCUSSED ABOVE, AND SUBSTITUTION OF A GREATLY EXPANDED PROGRAM OF
URBAN FORMULA GRANTS NOT LIMITED TO COMMUTER RAIL SERVICES. ON MAY 20,
1978, THE HOUSE COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION ALSO
COMPLETED ACTION ON A NEW AUTHORIZATION BILL FOR THE TRANSIT PROGRAM
(TITLE III OF H.R. 11733), WHICH, WHILE IT RETAINED SECTION 18, WOULD
HAVE GREATLY EXPANDED ITS SCOPE.
ALTHOUGH DIFFERENCES BETWEEN HOUSE AND SENATE VERSIONS OF THE
AUTHORIZING LEGISLATION WERE NOT RESOLVED UNTIL OCTOBER 14, 1978, WHEN
THE CONFERENCE COMMITTEE SUBMITTED ITS REPORT ON H.R. 11733 (H.R. REP.
NO. 95-1797, P. 132), BOTH HOUSE AND SENATE COMMITTEES ON APPROPRIATIONS
WERE AWARE, AT THE TIME THE APPROPRIATION WAS UNDER CONSIDERATION, THAT
SIGNIFICANT CHANGES IN THE URBAN FORMULA GRANT PROGRAM WERE PENDING.
THE HOUSE APPROPRIATIONS COMMITTEE, WHICH WAS PROPOSING A SEPARATE
CATEGORICAL APPROPRIATION OF $75 MILLION FOR COMMUTER RAIL OPERATIONS,
SPECIFICALLY REFERRED IN ITS REPORT TO "AUTHORIZING LEGISLATION PROPOSED
BY THE DEPARTMENT (WHICH) WOULD HAVE INCLUDED THESE SUBSIDIES AS PART OF
THE REGULAR FORMULA GRANT PROGRAM." H.R. REP. NO. 95-252, JUNE 1, 1978,
P. 46. THE SENATE, WHICH DID NOT FAVOR A SEPARATE APPROPRIATION FOR
RAIL SERVICE OPERATING PAYMENTS, JUSTIFIED ITS POSITION BY POINTING OUT:
"UNDER THE PROVISIONS OF PENDING TRANSIT LEGISLATION, S. 2441, THIS
PROGRAM IS ABSORBED INTO THE URBAN FORMULA GRANTS APPROPRIATION." S.
REP. NO. 95-938, JUNE 19, 1978, P. 33.
THE SURFACE TRANSPORTATION ASSISTANCE ACT OF 1978 (STAA), PUB. L.
95-599, 92 STAT. 2689, WAS ENACTED ON NOVEMBER 6, 1978. SECTION 312(C)
OF THAT ACT REPEALED SECTION 18 OF THE UMTA AS AMENDED. SECTION 304(A)
OF THE STAA AMENDED SECTION 5 OF THE UMTA TO RESTRUCTURE THE AUTHORITIES
FOR CONSTRUCTION AND OPERATING SYSTEMS FOR URBAN MASS TRANSIT PROGRAMS
AND THE FORMULAS UNDER WHICH EACH PROGRAM'S FUNDS MUST BE APPORTIONED.
OF PARTICULAR IMPORTANCE IS A NEW FORMULA FOR DISTRIBUTION OF FUNDS FOR
CONSTRUCTION AND OPERATING GRANTS "FOR PROJECTS UNDER THIS SUBSECTION
INVOLVING COMMUTER RAIL OR OTHER FIXED GUIDEWAY SYSTEMS." SECTION
5(A)(3)(A) OF UMTA, AS AMENDED.
"FIXED GUIDEWAY," AS DEFINED BY SECTION 308(B) OF THE STAA, MEANS:
"A PUBLIC TRANSPORTATION FACILITY USING A SEPARATE RIGHT-OF-WAY FOR
THE EXCLUSIVE USE OF PUBLIC TRANSPORTATION SERVICE. IT INCLUDES FIXED
RAIL, AUTOMATED GUIDEWAY TRANSIT, AND EXCLUSIVE FACILITIES FOR BUSES AND
OTHER HIGH OCCUPANCY VEHICLES."
UNLIKE THE OTHER DISTRIBUTION FORMULAS FOR PROJECTS UNDER SECTION 5
OF UMTA, WHICH ARE BASED LARGELY ON RELATIVE POPULATION DENSITY, THE
"COMMUTER RAIL OR OTHER FIXED GUIDEWAY SYSTEMS" FORMULA APPORTIONS
TWO-THIRDS OF THE TOTAL AMOUNT APPROPRIATED FOR THIS PURPOSE TO
URBANIZED AREAS OR PARTS THEREOF ON THE BASIS OF A RATIO INVOLVING
COMMUTER RAIL TRAIN MILES AND COMMUTER RAIL ROUTE MILES. THE REMAINING
ONE-THIRD WOULD BE DISTRIBUTED ON THE BASIS OF A RATIO INVOLVING FIXED
GUIDEWAY SYSTEM ROUTE MILES.
THE IMPORTANT DIFFERENCE BETWEEN THE DISTRIBUTION FORMULA IN
EXISTENCE AT THE TIME OF THE APPROPRIATION (FORMER SECTION 18) AND THE
NEW FORMULA IN SECTION 5(A)(3)(A) IS THAT THE FORMER CONSIDERED ONLY
RAIL SERVICE PASSENGER MILES WHILE THE LATTER INCLUDES AN ADDITIONAL
NON-RAIL COMPONENT, FIXED GUIDEWAY SYSTEMS. AGAIN, THE QUESTION IS
WHICH FORMULA TO USE.
DISCUSSION
UMTA'S POSITION IS SET FORTH IN A NOTICE PUBLISHED IN THE FEDERAL
REGISTER (43 FED. REG. 58,935, DECEMBER 18, 1978), IN NUMEROUS LETTERS
TO CONGRESSMEN WHO WERE INVOLVED WITH EITHER THE APPROPRIATION ACT OR
THE AUTHORIZATION ACT - OR BOTH - AND IN A COMPREHENSIVE LETTER WITH
ATTACHMENTS TO THIS OFFICE, IN WHICH UMTA EXPLORES SEVERAL ALTERNATIVE
LEGAL POSITIONS AND EXPLAINS ITS FINAL CHOICE.
AS WE UNDERSTAND UMTA'S POSITION, IT BELIEVES THAT IT IS NOT REQUIRED
TO APPLY A NEW SECTION 5(A)(3)(A) FORMULA TO DISTRIBUTION OF THE $75
MILLION EARMARKED IN THE APPROPRIATION FOR RAIL SERVICE OPERATING
PAYMENTS. IT POINTS OUT THAT THE FORMULA IS EXPRESSLY STATED TO APPLY
TO "SUMS APPROPRIATED PURSUANT TO SUBPARAGRAPH (B) OF THIS PARAGRAPH."
SUBPARAGRAPH (B) IS AN AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEARS
1979 THROUGH 1982. UMTA IS OF THE VIEW THAT SINCE THE $75 MILLION WAS
PART OF AN APPROPRIATION ACT PASSED 3 MONTHS BEFORE ENACTMENT OF THE
STAA, IT CANNOT POSSIBLY BE CONSIDERED TO BE "APPROPRIATED PURSUANT TO
SUBPARAGRAPH (B)."
ON THE OTHER HAND, UMTA CONTENDS THAT THE OLD SECTION 18 FORMULA IS
EQUALLY INAPPLICABLE. THE $75 MILLION WAS NOT INTENDED TO IMPLEMENT THE
EXISTING ASSISTANCE PROGRAMS SINCE BOTH APPROPRIATIONS COMMITTEES WERE
WELL AWARE THAT SIGNIFICANT CHANGES IN THE PROGRAM WERE PENDING IN THE
AUTHORIZATION COMMITTEES. MOREOVER, UMTA SAYS, SECTION 18 HAS BEEN
REPEALED, AND TO CONSTRUE THE $75 MILLION APPROPRIATION AS BEING SUBJECT
TO THE REPEALED PROGRAM "WOULD THWART THE EXPRESS INTENT OF THE
APPROPRIATION COMMITTEES TO FUND A RAIL PROGRAM IN 1979 ***."
UMTA'S SOLUTION IS TO REGARD THE APPROPRIATION AS "FREE STANDING" -
I.E., AS NOT BEING SUBJECT TO EITHER FORMULA - FOR THE REASONS EXPLAINED
ABOVE. IT WOULD THEN USE ITS BEST JUDGMENT AND APPLY ONLY SO MUCH OF
THE NEW FORMULA AS CONTAINS THE FACTORS FOR RAIL OPERATING ASSISTANCE
PAYMENTS. INSTEAD OF UTILIZING THESE FACTORS - COMMUTER RAIL TRAIN
MILES AND COMMUTER RAIL ROUTE MILES - FOR TWO-THIRDS OF THE $75 MILLION
APPROPRIATION, IT WOULD DISTRIBUTE THE ENTIRE $75 MILLION IN THIS
MANNER, MAKING NO APPORTIONMENT OF FUNDS FOR NON-RAIL FIXED GUIDEWAY
SYSTEMS UNTIL THE CONGRESS HAS ENACTED FUTURE APPROPRIATIONS FOR THIS
PURPOSE.
THE MEMBERS OF THE HOUSE COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION
WHO REQUESTED THIS DECISION DO NOT AGREE WITH THIS INTERPRETATION. IT
IS THEIR VIEW THAT:
"WHEN CONGRESS ACTED ON OCTOBER 15 BY AGREEING TO THE CONFERENCE
REPORT ON P.L. 95-599 WHICH SET OUT IN SECTION 304(A) THE AFOREMENTIONED
APPORTIONMENT FORMULA, IT ACTED IN FULL COGNIZANCE OF THE PRIOR
LEGISLATIVE ACTION IN THE DEPARTMENT OF TRANSPORTATION APPROPRIATION,
AND IN OUR VIEW, THIS CLEARLY STATES FINAL CONGRESSIONAL THOUGHT AND
INTENT ON THE ISSUE."
THEY THUS BELIEVE THAT THE $75 MILLION SHOULD BE APPORTIONED IN
STRICT ACCORDANCE WITH THE NEW FORMULA, INCLUDING THE NON-RAIL FACTORS.
THIS SAME ARGUMENT - THAT THE CONFEREES ON THE BILL WHICH BECAME THE
STAA WERE WELL AWARE OF THE TERMS OF THE PRIOR DOT APPROPRIATION ACT -
WAS USED BY TWO OTHER MEMBERS OF THE CONGRESS TO SUPPORT THE OPPOSITE
VIEW; THAT THE CONGRESS ONLY INTENDED TO FUND RAIL SERVICE ASSISTANCE,
AND EXPECTED A REQUEST FOR A SUPPLEMENTAL APPROPRIATION TO BE SUBMITTED
FOR THE FIXED GUIDEWAY SYSTEMS PROGRAM.
WE BELIEVE THE NEW FORMULA SHOULD NOT BE APPLIED IN ITS ENTIRETY TO
THE $75 MILLION SET-ASIDE. THE $75 MILLION WHICH IS SET ASIDE FROM THE
TOTAL $553,500,000 1979 APPROPRIATION FOR URBAN FORMULA GRANTS IS ONLY
AVAILABLE, BY ITS TERMS, FOR RAIL SERVICE OPERATING PAYMENTS. THE
SECTION 5 FORMULA INCLUDES A FACTOR FOR NON-RAIL FIXED GUIDEWAY SYSTEMS.
FUNDING NON-RAIL FIXED GUIDEWAY SYSTEMS FROM THE $75 MILLION WOULD
CONTRAVENE THE EXPRESS TERMS OF THE APPROPRIATION.
AS EXPLAINED ABOVE, THE NEW APPORTIONMENT FORMULA APPLIES TO "SUMS
APPROPRIATED PURSUANT TO SUBPARAGRAPH (B)" OF PARAGRAPH 5(A) (3). THE
FORMULA IS THEREFORE NOT NECESSARILY CONTROLLING AS TO THE $75 MILLION
APPROPRIATED BEFORE THE ENACTMENT OF THE AUTHORIZATION IN SUBPARAGRAPH
(B), AND, HENCE, NOT PURSUANT THERETO.
BECAUSE SECTION 18 WAS REPEALED BY THE SURFACE TRANSPORTATION
ASSISTANCE ACT OF 1978 AND BECAUSE THE FORMULA IN SECTION 5 APPLIES ONLY
TO MONIES APPROPRIATED PURSUANT TO THE NEW LAW (I.E., SUBPARAGRAPH (B)
OF PARAGRAPH 5(A)(3)), NEITHER OF THE FORMULAS IS CLEARLY APPLICABLE TO
THE $75 MILLION. AS WE SAID EARLIER, UMTA'S SOLUTION TO THE PROBLEM IS
TO ALLOCATE THE $75 MILLION ACCORDING TO THE PORTIONS OF THE NEW FORMULA
WHICH DISTRIBUTE MONIES BASED ON COMMUTER RAIL FACTORS, ON THE THEORY
THAT THE NEW FORMULA SHOULD BE APPLIED TO THE EXTENT IT IS CONSISTENT
WITH THE TERMS OF THE APPROPRIATION. DISTRIBUTION OF FUNDS FOR NON-RAIL
FIXED GUIDEWAY SYSTEMS WOULD THEREFORE NOT TAKE PLACE WITH RESPECT TO
THE $75 MILLION SET-ASIDE. THE FULL $75 MILLION WOULD BE DISTRIBUTED
ACCORDING TO THE PARTS OF THE SECTION 5 FORMULA WHICH DEAL WITH COMMUTER
RAIL OPERATIONS, AND NON-RAIL FIXED GUIDEWAY OPERATIONS WOULD NOT BE
FUNDED FROM THIS APPROPRIATION. UMTA BELIEVES THAT THIS SOLUTION IS THE
ONLY ONE THAT "RESPONSIBLY RESOLVES THE AMBIGUITY BETWEEN THE
APPROPRIATION ACT AND THE AUTHORIZATION ACT SO THAT THE INTENTION OF
CONGRESS TO FUND THE PROGRAM CAN BE SATISFIED." UNDER THE CIRCUMSTANCES,
WE CANNOT SAY THAT UMTA'S POSITION IS UNREASONABLE. ACCORDINGLY, SINCE
IT MORE CLOSELY CONFORMS TO THE APPARENT INTENT OF THE CONGRESS IN
ENACTING THE APPROPRIATION, WE WOULD NOT BE REQUIRED TO OBJECT TO UMTA'S
PROPOSED ALLOCATION.
OF COURSE, UMTA IS NOT BY LAW PRECLUDED FROM FUNDING NON-RAIL FIXED
GUIDEWAYS BY ALLOCATING A TOTAL OF $112.5 MILLION TO SECTION 5(A)(3).
TO DO SO, HOWEVER, WOULD PROVIDE LESS FUNDING THAN THE APPROPRIATIONS
COMMITTEES INTENDED FOR PURPOSES OF SECTIONS 5(A)(2) OR 5(A)(4), OR
BOTH, AND PROVIDING FUNDING FOR NON-RAIL FIXED GUIDEWAYS APPARENTLY WAS
NOT INTENDED BY THOSE COMMITTEES.
B-195032, JUL 25, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
SALARY OF EMPLOYEE, WHO HAD BEEN PAID AT GRADE GS-4 PRIOR TO
RESIGNATION, WAS SET AT GS-3, STEP 1 ON REEMPLOYMENT. THE EVIDENCE
PRESENTED DOES NOT ESTABLISH THAT THE PERSONNEL OFFICER ERRED IN
APPLYING THE LOWER RATE AT THE TIME OF REEMPLOYMENT IN ACCORDANCE WITH
THE BROAD DISCRETION GIVEN HIM IN THE APPLICABLE REGULATIONS.
ACCORDINGLY CLAIM FOR RETROACTIVE ADJUSTMENT OF COMPENSATION MUST BE
DENIED.
MRS. VIRGINIA A. RAWLINGS - HIGHEST PREVIOUS RATE ON REEMPLOYMENT:
THIS ACTION IS THE RESULT OF AN APPEAL FROM A SETTLEMENT OF OUR
CLAIMS DIVISION DATED OCTOBER 12, 1978, WHICH DISALLOWED THE CLAIM OF
MRS. VIRGINIA A. RAWLINGS. MRS. RAWLINGS IS CLAIMING AN INCREASE IN
SALARY RETROACTIVE TO HER REEMPLOYMENT IN 1965 WITH THE DEPARTMENT OF
THE ARMY FOLLOWING A BREAK IN SERVICE OF 3-1/2 YEARS.
WE AGREE WITH THE CONCLUSION REACHED BY THE CLAIMS DIVISION FOR THE
FOLLOWING REASONS.
MRS. RAWLINGS RESIGNED FROM HER POSITION AS A GS-4, WITH THE
DEPARTMENT OF THE ARMY ON AUGUST 18, 1961. ON JANUARY 25, 1965, SHE
RECEIVED A TEMPORARY APPOINTMENT AS A GS-2, WITH THE INTERNAL REVENUE
SERVICE. SHE RESIGNED FROM THAT POSITION ON SEPTEMBER 16, 1965, AND WAS
REEMPLOYED BY THE DEPARTMENT OF THE ARMY ON SEPTEMBER 17, 1965, AS A
GS-3, STEP 1. SINCE SHE HAD BEEN A GS-4 AT THE TIME OF HER RESIGNATION
ON AUGUST 18, 1961, IT IS MRS. RAWLINGS' CONTENTION THAT UPON
REEMPLOYMENT AS A GS-3 SHE WAS ENTITLED TO BE PLACED AT A HIGHER STEP IN
THE GS-3 GRADE.
THE ARMY AND OUR CLAIMS DIVISION DENIED HER CLAIM ON THE BASIS THAT
AT THE TIME OF HER REEMPLOYMENT IT WAS THE POLICY OF THE ACTIVITY WHERE
SHE WAS EMPLOYED TO PLACE INDIVIDUALS IN THE FIRST STEP OF THE GRADE IN
WHICH EMPLOYED EVEN IN THE CASE OF AN INDIVIDUAL WHO HAD BEEN PREVIOUSLY
EMPLOYED AT A HIGHER RATE.
THE PERTINENT ARMY REGULATION, CIVILIAN PERSONNEL REGULATION, CPR P.
3.1, PARA. 1-2C, JULY 8, 1963, PROVIDED AS FOLLOWS:
"C. WHEN NECESSARY TO OBTAIN DESIRED SERVICES OR WHEN OTHERWISE
DETERMINED TO BE IN THE BEST INTERESTS OF THE DEPARTMENT OF THE ARMY,
APPOINTING OFFICERS MAY FIX THE SALARY OF AN EMPLOYEE, WHO HAS
PREVIOUSLY SERVED AT A RATE ABOVE HIS LAST EARNED RATE, AT ANY STEP RATE
OF THE GRADE TO WHICH ASSIGNED WHICH IS NOT IN EXCESS OF HIS HIGHEST
PREVIOUS RATE (PARS. 1-4B AND 1-8). GENERALLY, THE GRADE IN WHICH SUCH
HIGHER FORMER RATE WAS EARNED SHOULD HAVE BEEN HELD FOR A SUFFICIENT
PERIOD OF TIME TO REPRESENT AN ACTUAL EARNING LEVEL. PRIOR TO UTILIZING
SUCH HIGHER FORMER RATE, THE APPOINTING OFFICER MUST MAKE A
DETERMINATION THAT THE EMPLOYEE'S QUALIFICATIONS AND KNOWN OR PRESUMED
PROFICIENCY JUSTIFY THE PROPOSED RATE. IN ADDITION, THERE MUST BE A
DETERMINATION THAT SUCH ACTION WOULD NOT SERVE TO PLACE THE EMPLOYEE ON
A BASIS SUBSTANTIALLY DIFFERENT FROM OTHER EMPLOYEES OF EQUAL OR
SUPERIOR PROFICIENCY SERVING IN SIMILAR OR IDENTICAL POSITIONS."
STATEMENTS IN THE RECORD INDICATE THAT AT THE TIME OF MRS. RAWLINGS'
REEMPLOYMENT A DETERMINATION WAS MADE BY THE APPOINTING OFFICER ON THE
BASIS OF HER EMPLOYMENT WITH THE INTERNAL REVENUE SERVICE THAT SHE WAS
QUALIFIED ONLY FOR THE ENTRY LEVEL IN THE GRADE IN WHICH SHE WAS HIRED.
SUBSEQUENTLY AT THE TIME OF HER PROMOTION TO GS-4 CONSIDERATION WAS ALSO
GIVEN TO WHETHER SHE WOULD QUALIFY FOR A HIGHER LEVEL. HOWEVER, IT WAS
DETERMINED THAT SHE SHOULD ONLY RECEIVE A NORMAL PROMOTION INCREASE.
IN CASES INVOLVING THE HIGHEST PREVIOUS RATE OF COMPENSATION THE
STATUTORY AUTHORITY FOR ESTABLISHING BASIC PAY RATES IS 5 U.S.C. 5334.
THIS PROVISION AUTHORIZES THE ESTABLISHMENT OF BASIC PAY RATES TO BE
ACCOMPLISHED IN ACCORDANCE WITH REGULATIONS PROMULGATED BY THE CIVIL
SERVICE COMMISSION (NOW OFFICE OF PERSONNEL MANAGEMENT). THOSE
REGULATIONS IN TURN GRANT DISCRETIONARY AUTHORITY TO THE VARIOUS
AGENCIES TO APPLY THE HIGHEST PREVIOUS RATE SO THAT AN INDIVIDUAL UPON
REEMPLOYMENT MAY BE PAID ABOVE THE MINIMUM RATE OF THE GRADE TO WHICH
APPOINTED BASED ON PRIOR EMPLOYMENT AT A HIGHER RATE.
THE DEPARTMENTAL REGULATIONS STATE THAT A DETERMINATION TO APPLY THE
HIGHEST PREVIOUS RATE WILL BE MADE BY THE PERSONNEL OFFICER INVOLVED.
ON THE EVIDENCE PRESENTED TO US, WE CANNOT CONCLUDE THAT THE APPOINTING
OFFICER ERRED IN 1965 IN ESTABLISHING MRS. RAWLINGS' RATE OF
COMPENSATION AT GS-3, STEP 1, IN ACCORDANCE WITH THE DISCRETIONARY
PROVISIONS IN THE ARMY REGULATIONS IN EFFECT AT THAT TIME.
THE FACT THAT OTHER INDIVIDUALS RECEIVED THE BENEFIT OF THE HIGHEST
PREVIOUS RATE RULE WHEN REEMPLOYED SOME YEARS AFTER MRS. RAWLINGS WAS
REEMPLOYED HAS NO BEARING ON HER CLAIM SINCE THE REGULATIONS IN FORCE
PROVIDED DISCRETIONARY AUTHORITY TO THE EMPLOYING AGENCY TO APPLY THAT
RULE BASED ON A VARIETY OF CIRCUMSTANCES EXISTING AT THE TIME OF
REEMPLOYMENT.
ACCORDINGLY, THE ACTION OF OUR CLAIMS DIVISION IN DENYING THE CLAIM
MUST BE SUSTAINED.
B-193604, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. RECORD SUPPORTS CONCLUSION THAT OFFEROR WAS MISLED INTO
REASONABLE BELIEF THAT ONLY TWO DEFICIENCIES REMAINED IN AMENDED
PROPOSAL WHERE LIST OF FIVE DEFICIENCIES UPON WHICH DISCUSSIONS WERE
BASED OMITTED SOME DEFICIENCIES AND SHOWED THREE OTHERS TO BE CLEARED BY
AMENDMENT.
2. WE CANNOT STATE UNEQUIVOCALLY THAT PROTESTER WAS NOT PREJUDICED
WHERE PROTESTER WAS MISLED CONCERNING SOME DEFICIENCIES AND NOT ADVISED
OF OTHERS FOR WHICH PROTESTER WAS ASSESSED APPROXIMATELY 31 POINTS OUT
OF TOTAL OF 35 DEDUCTED, AND WHERE EVALUATION SCORES OF PROTESTER AND
AWARDEE DIFFER BY ONLY 12 POINTS OUT OF 1,000. PROTEST IS SUSTAINED.
DYNALECTRON CORPORATION; SERV-AIR, INC.:
THE DYNALECTRON CORPORATION (DYNALECTRON) AND SERV-AIR, INC.
(SERV-AIR), A SUBSIDIARY OF E-SYSTEMS, INC., HAVE PROTESTED THE AWARD OF
A CONTRACT TO NORTHROP WORLDWIDE AIRCRAFT SERVICES (NORTHROP) FOR
AIRCRAFT MAINTENANCE AT FORT BLISS, TEXAS. FOR THE REASONS STATED
BELOW, WE SUSTAIN THE PROTEST AND RECOMMEND THAT THE OPTION FOR
ADDITIONAL YEAR TERMS NOT BE EXERCISED.
IN JUNE 1978 THE PROCUREMENT DIVISION AT FORT BLISS ISSUED A REQUEST
FOR PROPOSALS (RFP) FOR THE MAINTENANCE AND SERVICING OF THE FIXED AND
ROTARY WING AIRCRAFT ASSIGNED TO VARIOUS UNITS ON THE BASE. THE RFP
CONTEMPLATED THE AWARD OF A COST-PLUS-FIXED-FEE (CPFF) CONTRACT FOR AN
INITIAL TERM OF 1 YEAR WITH TWO OPTION YEARS AND ADVISED OFFERORS THAT
TECHNICAL FACTORS WOULD BE MORE IMPORTANT THAN COST IN THE EVALUATION OF
PROPOSALS. THE GOVERNMENT RESERVED THE RIGHT TO ACCEPT OTHER THAN THE
LOWEST COST PROPOSAL.
A TECHNICAL EVALUATION BOARD (THE BOARD) REVIEWED THE FOUR PROPOSALS
SUBMITTED IN RESPONSE TO THE SOLICITATION OVER THE PERIOD AUGUST 16-18,
RESULTING IN AN INITIAL SCORING OF PROPOSALS AND ADVICE TO THE
CONTRACTING OFFICER OF THE RESULTS. ON AUGUST 31 AN AMENDMENT TO THE
RFP WAS ISSUED TO ALL OFFERORS REFLECTING A MINOR CHANGE IN THE
ORGANIZATIONAL ALIGNMENT AND SUPPORT CAPABILITY OF ONE OF THE UNITS ON
THE BASE AND CHANGING THE INITIAL TERM OF THE CONTRACT TO BE AWARDED
FROM 1 YEAR TO 10 MONTHS. OFFERORS WERE GIVEN UNTIL SEPTEMBER 15 TO
AMEND THEIR PROPOSALS TO REFLECT THESE CHANGES. DYNALECTRON
INCORPORATED CERTAIN ADDITIONAL CHANGES IN ITS AMENDED PROPOSAL WHICH
ADDRESSED SOME OF THE DEFICIENCIES WHICH THE BOARD HAD FOUND IN
DYNALECTRON'S PROPOSAL. THERE IS NO EVIDENCE THAT THE BOARD EVALUATED
THESE AMENDMENTS AT ANY TIME PRIOR TO DISCUSSIONS. ON SEPTEMBER 7 THE
CONTRACTING OFFICER REQUESTED CLARIFICATION FROM THE BOARD REGARDING ITS
FINDINGS CONCERNING TWO OF THE PROPOSALS, SPECIFICALLY POINTING OUT TO
THE BOARD THE REQUIREMENT OF DEFENSE ACQUISITION REGULATION (DAR)/ASPR
SEC. 3-805.3 (1976 ED.) THAT OFFERORS BE ADVISED DURING NEGOTIATIONS OF
DEFICIENCIES IN THEIR PROPOSALS, TO WHICH THE BOARD RESPONDED WITH MORE
DETAILS. ON OCTOBER 17 THE BOARD AGAIN REVIEWED ALL OF THE PROPOSALS AT
THE REQUEST OF THE CONTRACTING OFFICER TO INSURE THAT A CONSISTENT
REVIEW HAD BEEN MADE OF ALL FOUR PROPOSALS.
PROPOSALS WERE SCORED ON THE BASIS OF 1,000 POINTS, ALLOCATED 600
POINTS TO TECHNICAL FACTORS AND 400 POINTS TO COST FACTORS. RESULTS OF
THE INITIAL EVALUATION WERE AS FOLLOWS:
TECH. COST TOTAL
NORTHROP 587 378 965
DYNALECTRON 569 393 962
HAWTHORNE 563 398 961
SERV-AIR 519 378 897
NEGOTIATIONS WERE HELD WITH ALL OFFERORS ON OCTOBER 31, 1978. BEST
AND FINAL OFFERS WERE SUBMITTED ON NOVEMBER 9, 1978.
THE BOARD EVALUATED THE BEST AND FINAL OFFERS, BUT DID NOT CHANGE ITS
INITIAL SCORES ON THE BASIS THAT ALTHOUGH EACH OFFEROR HAD MADE POSITIVE
CHANGES IN ITS PROPOSAL, THE IMPROVEMENTS WERE PROPORTIONAL AND DID NOT
JUSTIFY A CHANGE IN THE RANKINGS. THE COST EVALUATION SCORES WERE
CHANGED, WITH THE FINAL RESULTS AS FOLLOWS:
TECH. COST TOTAL CPFF PRICE
NORTHROP 587 390 977 $988,948
DYNALECTRON 569 396 965 928,650
HAWTHORNE 563 398 961 952,986
SERV-AIR 519 390 909 776,451
THE CONTRACT WAS AWARDED TO NORTHROP ON NOVEMBER 17.
ON NOVEMBER 30 DYNALECTRON FILED A PROTEST WITH OUR OFFICE CONTESTING
THE PROPRIETY OF THE ARMY'S EVALUATION OF PROPOSALS. DYNALECTRON ALSO
CONTENDED THAT THE DIFFERENCE BETWEEN THE TECHNICAL SCORES AWARDED TO
DYNALECTRON AND NORTHROP WAS INSIGNIFICANT AND THAT THE PROPOSALS SHOULD
HAVE BEEN CONSIDERED TECHNICALLY EQUAL AND AWARD MADE TO DYNALECTRON ON
THE BASIS OF ITS LOWER COST. AFTER A DECEMBER 13 DEBRIEFING,
DYNALECTRON SUPPLEMENTED ITS PROTEST TO INCORPORATE ALLEGATIONS THAT NO
MEANINGFUL DISCUSSIONS WERE HELD DURING NEGOTIATIONS. IN CONNECTION
WITH THIS LAST MATTER, DYNALECTRON STATES THAT IT WAS ADVISED DURING THE
DEBRIEFING OF DEFICIENCIES IN ITS PROPOSAL WHICH WERE NOT MENTIONED
DURING ORAL DISCUSSIONS.
IN THIS CONNECTION, THE RECORD SHOWS THAT AT ORAL DISCUSSIONS HELD ON
OCTOBER 31, THE ARMY PROVIDED DYNALECTRON WITH THE FOLLOWING LIST OF
DEFICIENCIES IN ITS TECHNICAL PROPOSAL:
"TECHNICAL REVIEW QUESTIONS
"DYNALECTRON CORPORATION
"1. IN THE AREAS OF CONCEPT AND MANPOWER AS IT RELATES TO FIXED WING
AIRCRAFT, IT IS FELT THERE COULD BE SOME IMPROVEMENTS IN THIS AREA.
"2. IT WAS CONSIDERED AS INAPPROPRIATE FOR THE PRODUCTION CONTROL
FUNCTION TO BE COMPLETELY REMOVED FROM THE MAINTENANCE DEPARTMENT.
"3. THE ABILITY OF THE PROPOSED MANAGER TO SUPERVISE BOTH SUPPLY AND
PRODUCTION CONTROL SECTIONS WAS QUESTIONED.
"4. THE DIRECT LABOR STRENGTH IS CONSIDERED LESS THAN OPTIMUM FOR
PERFORMANCE OF MAINTENANCE SUPPORT.
"5. MIL I 45208A IS REQUIRED IN LIEU OF MIL Q 9858A."
DYNALECTRON INDICATES THAT IT INTERPRETED THE "CLEARED BY AMENDMENT"
LANGUAGE FOLLOWING EACH OF THE FIRST THREE QUESTIONS TO INDICATE THAT
THE CHANGES IT SUBMITTED WITH ITS PROPOSAL REVISIONS OF SEPTEMBER 15 HAD
SATISFIED THE GOVERNMENT'S OBJECTIONS IN THESE THREE AREAS AND THAT THEY
WERE NO LONGER DEFICIENCIES. IN ITS BEST AND FINAL OFFER, DYNALECTRON
MENTIONS ONE SIGNIFICANT EVENT, THE REHIRING OF A KEY STAFF MEMBER AFTER
THE DATE OF ITS SEPTEMBER 15 PROPOSAL REVISIONS, AND OTHERWISE REFERS
ONLY TO ITS SEPTEMBER 15 REVISIONS IN ITS RESPONSES TO THE FIRST THREE
QUESTIONS; DYNALECTRON'S RESPONSE TO THE FOURTH QUESTION, WHICH WAS NOT
"CLEARED BY AMENDMENT," INCORPORATES A CHANGE IN PERSONNEL STRENGTH, A
REVISED MANNING AND ORGANIZATION CHART, AND A DISCUSSION OF THE COST
BENEFITS AND EFFICIENCIES WHICH WOULD RESULT FROM THE RETENTION OF
DYNALECTRON PERSONNEL. AS THE INCUMBENT, DYNALECTRON RESPONDED THAT ITS
CURRENT PROCEDURES AND MANUALS COMPLIED WITH MILITARY SPECIFICATION
MIL-I-45208A IN ANSWER TO QUESTION NO. 5.
AT THE DEBRIEFING HELD ON DECEMBER 13, THE ARMY ADVISED DYNALECTRON
THAT ITS PROPOSAL WAS DOWNGRADED FOR WHAT WERE CONSIDERED DEFICIENCIES
IN THE FOLLOWING AREAS:
1. WEAKNESS IN THE AREA OF CURRENT AND PAST CONTRACT EXPERIENCE.
2. INDIRECT PERSONNEL STRENGTH WEAKNESS.
3. UNREALISTIC DIRECT COST.
4. WEAKNESS IN PROPOSAL FOR TRAINING OF PERSONNEL.
DYNALECTRON ASSERTS THAT NONE OF THESE DEFICIENCIES WERE DISCUSSED
DURING NEGOTIATIONS AND HAS PRESENTED A SWORN AFFIDAVIT TO THAT EFFECT
FROM ONE OF ITS ATTENDING OFFICIALS. THE CONTRACTING OFFICER DISAGREES
AND STATES THAT ALL OF THESE MATTERS WERE DISCUSSED DURING NEGOTIATIONS
AND THAT DYNALECTRON WAS AFFORDED THE OPPORTUNITY TO UPGRADE ITS
PROPOSAL WITH RESPECT TO THOSE MATTERS BEFORE THE PRESENTATION OF BEST
AND FINAL OFFERS.
SERV-AIR FILED ITS PROTEST WITH OUR OFFICE ON DECEMBER 27, 1978,
AFTER A DEBRIEFING ON DECEMBER 14. SERV-AIR ALLEGES THAT IT ALSO WAS
ADVISED FOR THE FIRST TIME IN THE DEBRIEFING OF CERTAIN DEFICIENCIES IN
ITS PROPOSAL. SERV-AIR ALSO PROTESTED THE ARMY'S COST EVALUATION,
CONTENDING THAT IT WAS AT LEAST QUESTIONABLE, AND RAISED OTHER
CONTENTIONS SIMILAR TO THOSE EXPRESSED BY DYNALECTRON. THE ARMY
CONTENDS THAT SERV-AIR'S OBJECTIONS TO ITS ORAL DISCUSSIONS ARE UNTIMELY
UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1978), BECAUSE IN
ITS PROTEST TO OUR OFFICE SERV-AIR ACKNOWLEDGED THAT IT RECOGNIZED AT
THE TIME OF ITS ORAL DISCUSSIONS THAT THEY WERE "TOTALLY MEANINGLESS"
BUT THAT IT DECLINED TO PROTEST AT THAT TIME TO PRESERVE "GOOD RELATIONS
WITH OUR PROSPECTIVE CUSTOMER."
THE PROVISIONS OF DAR SEC. 3-805.3(A) (1976 ED.) REQUIRE THAT
OFFERORS BE ADVISED OF DEFICIENCIES IN THEIR PROPOSALS. GENERALLY, ONCE
DISCUSSIONS ARE INITIATED WITH AN OFFEROR, THE PROCURING AGENCY MUST
POINT OUT ALL DEFICIENCIES IN THAT OFFEROR'S PROPOSAL WHERE THE
APPLICABLE REGULATION SO REQUIRES. CHECCHI AND COMPANY, B-187982, APRIL
4, 1977, 77-1 CPD 232; TELEDYNE INET, B-180252, MAY 22, 1974, 74-1 CPD
279. WE HAVE HELD THAT REQUESTS FOR CLARIFICATION OR AMPLIFICATION OR
OTHER STATEMENTS MADE DURING ORAL DISCUSSIONS WHICH LEAD OFFERORS INTO
AREAS OF THEIR PROPOSALS THAT ARE UNCLEAR ARE SUFFICIENT TO ALERT
OFFERORS TO DEFICIENCIES IN THEIR PROPOSALS. E-SYSTEMS, INC., B-191346,
MARCH 20, 1979, 79-1 CPD 192; SERV-AIR, INC., B-189884, SEPTEMBER 25,
1978, 78-2 CPD 223; HOUSTON FILMS, INC., B-184402, DECEMBER 22, 1975,
75-2 CPD 404; 53 COMP. GEN. 382 (1973). WE HAVE REGARDED AS DEFICIENT
NEGOTIATIONS WHICH LED AN OFFEROR REASONABLY TO BELIEVE THAT A PROBLEM
AREA HAD BEEN CLEARED UP DURING ORAL DISCUSSIONS BECAUSE OF THE LACK OF
SPECIFIC IDENTIFICATION OF A PROPOSAL WEAKNESS. CHECCHI AND COMPANY,
SUPRA.
AT THE OUTSET, WE OBSERVE THAT THE LIST OF DEFICIENCIES PROVIDED TO
DYNALECTRON AT ITS ORAL DISCUSSIONS IS A GENERALIZED COMPOSITE OF THE
MAJORITY OF THE SPECIFIC DEFICIENCIES FOUND BY THE BOARD IN ITS
EVALUATION OF DYNALECTRON'S INITIAL PROPOSAL. IN THIS CONNECTION, THE
BOARD PENALIZED DYNALECTRON MOST HEAVILY IN THE AREAS OF CONCEPT OF
OPERATIONS - DEFINED ESSENTIALLY AS THE OFFEROR'S REALISM AND ABILITY TO
RELATE ALL REQUIREMENTS INTO A SINGLE OPERATION, ORGANIZATIONAL
STRUCTURE - PRIMARILY A FUNCTION OF THE OFFEROR'S PROPOSED LINES OF
AUTHORITY AND STAFFING, AND UNREALISTIC DIRECT COST - TRACEABLE TO
CONCERN OVER DYNALECTRON'S DIRECT LABOR STAFFING LEVEL. DYNALECTRON WAS
ALSO ASSESSED SIGNIFICANT POINTS FOR A PERCEIVED LACK OF EXPERIENCE IN
THE MAINTENANCE OF FIXED AND ROTARY WING AIRCRAFT AND IN PAST AND
PRESENT GOVERNMENT CONTRACTS, ITS PROPOSED INDIRECT AND DIRECT PERSONNEL
STRENGTHS, AND ITS PROPOSED LEVELS OF SUPERVISION. THE BOARD DEDUCTED
FEWER POINTS IN OTHER AREAS SUCH AS TRAINING.
WE DO NOT THINK THAT DYNALECTRON WAS ADVISED OF ALL OF THESE
DEFICIENCIES. WE HAVE LISTENED TO A TAPE RECORDING OF SERV-AIR'S
DISCUSSIONS WITH THE ARMY, OBTAINED BY SERVAIR FROM THE ARMY THROUGH A
FREEDOM OF INFORMATION ACT REQUEST, WHICH DISCLOSES THAT THE ARMY
CONDUCTED DISCUSSIONS BY PERMITTING EACH OFFEROR TO ASK QUESTIONS BASED
ON THE LIST OF DEFICIENCIES PROVIDED TO EACH OFFEROR AT THE OPENING OF
DISCUSSIONS. IN THIS CONNECTION, WE NOTE THAT THE LIST OF DEFICIENCIES
PROVIDED TO DYNALECTRON MAKES NO REFERENCE TO WEAKNESSES IN EITHER
TRAINING OR EXPERIENCE, EITHER OF WHICH MAY HAVE BEEN CORRECTABLE
THROUGH THE SUBMISSION OF ADDITIONAL INFORMATION OR CLARIFICATION, AND
THAT THE MAJORITY OF THE AREAS IN WHICH DYNALECTRON'S PROPOSAL WAS
DOWNGRADED ARE RELATED TO THE FIRST THREE OF THE DEFICIENCIES NAMED ON
DYNALECTRON'S LIST, EACH OF WHICH WAS NOTED AS "CLEARED BY AMENDMENT."
WE BELIEVE THAT THESE NOTATIONS LULLED DYNALECTRON INTO THE REASONABLE
BELIEF THAT EACH OF THESE THREE AREAS HAD BEEN IMPROVED TO THE ARMY'S
SATISFACTION BY ITS SEPTEMBER 15 PROPOSAL MODIFICATION AND REGARD IT AS
HIGHLY IMPROBABLE THAT EVEN THE MOST ASTUTE OFFEROR WOULD HAVE PURSUED A
LINE OF QUESTIONING WHICH WOULD HAVE LED IT TO DISCOVER THE RELATED
WEAKNESSES UNDERLYING THESE DEFICIENCIES OR TO CONSIDER FURTHER CHANGES
IN ITS PROPOSAL CONCERNING THE LISTED AREAS. WE REGARD THE CUMULATIVE
EFFECT OF THE NOTATIONS APPENDED TO SOME ITEMS ON DYNALECTRON'S LIST OF
DEFICIENCIES AND THE OMISSION OF OTHER ITEMS FROM THE LIST, COUPLED WITH
DYNALECTRON'S TREATMENT OF ITS BEST AND FINAL OFFER, AS PERSUASIVE
EVIDENCE THAT DYNALECTRON WAS MISLED INTO BELIEVING THAT THE ONLY
DEFICIENCIES REMAINING IN ITS PROPOSAL WERE THOSE REPRESENTED BY THE
LAST TWO STATEMENTS ON ITS LIST OF DEFICIENCIES AND THAT THE ADDITIONAL
DEFICIENCIES WERE NOT DISCLOSED. WE CONCLUDE THAT THE ARMY FAILED TO
CONDUCT MEANINGFUL NEGOTIATIONS WITH DYNALECTRON.
WE HAVE IN PAST CASES DECLINED TO RECOMMEND REMEDIAL ACTION WHERE THE
RECORD AFFIRMATIVELY DEMONSTRATED THAT A PROTESTER SUFFERED NO PREJUDICE
AS THE RESULT OF A FAILURE TO CONDUCT MEANINGFUL NEGOTIATIONS. IN
CHECCHI AND COMPANY, SUPRA, WE DECLINED TO RECOMMEND REMEDIAL ACTION
WHERE THE RECORD SHOWED THAT EVEN WITH PROPER ADVICE OF A DEFICIENCY
WHICH THE PROTESTER HAD BEEN LED TO BELIEVE HAD BEEN RESOLVED, THE
PROTESTER WOULD HAVE BEEN UNABLE TO IMPROVE ITS PROPOSAL SUFFICIENTLY TO
BE ENTITLED TO AWARD. AND, IN HOUSTON FILMS, INC., SUPRA, WE DECLINED
TO RECOMMEND REMEDIAL ACTION BECAUSE THE COST IMPACT ON THE PROTESTER'S
PROPOSAL RESULTING FROM BEING MISLED BY A QUESTION ASKED DURING
DISCUSSIONS WAS NOT SO GREAT THAT ITS ABSENCE WOULD HAVE ENTITLED THE
PROTESTER TO AWARD OF THE CONTRACT.
IN THIS CASE, HOWEVER, DYNALECTRON AND NORTHROP WERE SEPARATED IN
THEIR TECHNICAL AND COST EVALUATION SCORES BY A MERE 12 POINTS OUT OF A
TOTAL OF 1,000. WE NOTE ALSO THAT APPROXIMATELY TWO-THIRDS OF THE TOTAL
OF 35 POINTS WHICH DYNALECTRON WAS ASSESSED APPEAR TO BE ATTRIBUTABLE TO
THE FIRST THREE OF DYNALECTRON'S LISTED DEFICIENCIES AND RELATED AREAS,
WHILE AN ADDITIONAL 7 POINTS WERE ASSESSED FOR EXPERIENCE DEFICIENCIES
WHICH ARE NOT RELATED TO ANY OF THE LISTED DEFICIENCIES. IN THESE
CIRCUMSTANCES, AND ABSENT FINAL EVALUATION SCORES WHICH MIGHT PROVIDE A
BASIS FOR COMPARISON, WE CANNOT STATE UNEQUIVOCALLY THAT DYNALECTRON WAS
NOT PREJUDICED BY THE ARMY'S FAILURE TO CONDUCT MEANINGFUL NEGOTIATIONS.
THE PROTEST IS SUSTAINED. BECAUSE THE FIRST YEAR OF PERFORMANCE IS
ALMOST COMPLETED, WE RECOMMEND THAT THE OPTIONS FOR ADDITIONAL YEARS NOT
BE EXERCISED.
BECAUSE WE ARE SUSTAINING DYNALECTRON'S PROTEST ON THE BASIS THAT THE
ARMY FAILED TO CONDUCT MEANINGFUL DISCUSSIONS, WE WILL NOT CONSIDER THE
OTHER ISSUES RAISED. WE WILL, HOWEVER, COMMENT ON SERV-AIR'S ALLEGATION
THAT THE COST EVALUATION APPEARS QUESTIONABLE. WE NOTE IN THIS
CONNECTION THAT ALTHOUGH THE CONTRACT PRICE ANALYST DETERMINED EACH
OFFEROR'S PROPOSED COSTS TO BE REALISTIC WHEN CONSIDERED IN CONJUNCTION
WITH PROPOSED STAFFING REQUIREMENTS AND OTHER ASSOCIATED COSTS, THE LOW
AND HIGH COST OFFERORS, SERV-AIR AND NORTHROP RESPECTIVELY, RECEIVED
IDENTICAL SCORES ON THEIR COST EVALUATIONS DESPITE A DIFFERENCE IN THEIR
TOTAL ESTIMATED COSTS OF APPROXIMATELY $212,000. EVEN IF WE ADJUST
THESE TWO OFFEROR'S PROPOSED STAFFING LEVELS TO CONFORM TO THE ARMY'S
ESTIMATE, USED BY THE ARMY AS THE PRIMARY INDEX OF COST REALISM FOR
WHICH BOTH SERV-AIR AND NORTHROP WERE ASSESSED 10 POINTS, AND MEASURE
THE COST IMPACT OF THE ADJUSTMENTS ON THE BASIS OF THE HIGHEST COST PER
STAFF-MEMBER PROPOSED BY ANY OFFEROR, THE COST DIFFERENCE BETWEEN THESE
PROPOSALS IS STILL ON THE ORDER OF $60,000. WE THINK THAT THERE IS AN
INCONSISTENCY IN THIS SUBSTANTIAL COST DIFFERENCE, THE DETERMINATION
THAT THESE OFFEROR'S COSTS ARE REALISTIC, AND THEIR IDENTICAL COST
EVALUATION SCORES. WE SUGGEST THAT GREATER ATTENTION BE PAID TO THE
METHODS USED IN THE COST EVALUATION OF PROPOSALS WHEN THIS REQUIREMENT
IS AGAIN SOLICITED.
BY LETTER OF TODAY, WE ARE ADVISING THE SECRETARY OF THE ARMY OF OUR
RECOMMENDATION.
THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE
TAKEN. THEREFORE, WE ARE FURNISHING COPIES TO THE SENATE COMMITTEES ON
GOVERNMENTAL AFFAIRS AND APPROPRIATIONS AND THE HOUSE COMMITTEES ON
GOVERNMENT OPERATIONS AND APPROPRIATIONS IN ACCORDANCE WITH SECTION 236
OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31 U.S.C. SEC. 1176
(1976), WHICH REQUIRES THE SUBMISSION OF WRITTEN STATEMENTS BY THE
AGENCY TO THE COMMITTEES CONCERNING THE ACTION TAKEN WITH RESPECT TO OUR
RECOMMENDATION.
B-193614, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PRIOR DECISION WILL NOT BE RECONSIDERED BECAUSE REQUEST FOR
RECONSIDERATION DOES NOT SPECIFY FACTUAL OR LEGAL GROUNDS FOR
MODIFICATION OR REVERSAL.
LANIER BUSINESS PRODUCTS, INC.:
LANIER BUSINESS PRODUCTS, INC. (LANIER), REQUESTS RECONSIDERATION OF
OUR DECISION IN DICTAPHONE CORPORATION, B-193614, JUNE 13, 1979, WHICH
CONCLUDED THAT WHERE THE ISSUANCE OF A PURCHASE ORDER DOES NOT IN ITSELF
ESTABLISH A BASIS OF PROTEST AND WHERE THE RECORD DOES NOT DISCLOSE WHEN
THE PROTESTER FIRST LEARNED OF THE BASIS OF PROTEST, ANY DOUBT IS
RESOLVED IN THE PROTESTER'S FAVOR AND OUR OFFICE CONSIDERS THE PROTEST
TO BE TIMELY FILED.
LANIER STATES THAT DICTAPHONE'S FORMAL PROTEST OF THIS PROCUREMENT
WAS MADE APPROXIMATELY 40 WORKING DAYS AFTER THE ISSUANCE OF THE ORDER.
LANIER BELIEVES THAT IT IS LUDICROUS THAT DICTAPHONE DID NOT KNOW OF
THIS ACTION BEFORE THAT TIME. LANIER ALSO STATES THAT IN THE VERY
HIGHLY COMPETITIVE DICTATING EQUIPMENT INDUSTRY LANIER AND ITS
COMPETITORS ARE FOLLOWING EQUIPMENT PROCUREMENTS ON ALMOST A DAILY
BASIS. LANIER CONCLUDES THAT DICTAPHONE "SHOULD HAVE KNOWN" ITS BASIS
OF PROTEST MUCH EARLIER.
REQUESTS FOR RECONSIDERATION MUST CONTAIN A DETAILED STATEMENT OF THE
FACTUAL AND LEGAL GROUNDS UPON WHICH MODIFICATION OR REVERSAL IS DEEMED
WARRANTED, SPECIFYING ANY ERRORS OF LAW MADE OR INFORMATION NOT
PREVIOUSLY CONSIDERED. 4 C.F.R. SEC. 20.9(A) (1979). SINCE LANIER HAS
NOT PROVIDED ANY INFORMATION THAT WAS NOT PREVIOUSLY CONSIDERED,
LANIER'S CURRENT STATEMENT DOES NOT SHOW THAT OUR EARLIER DECISION WAS
ERRONEOUS. THEREFORE, WE MUST DECLINE TO RECONSIDER OUR JUNE 13, 1979,
DECISION. DATA PATHING INC. - RECONSIDERATION, B-188234, JULY 11, 1977,
77-2 CPD 14.
B-193788, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CONTRACT MODIFICATION MAY NOT BE REFORMED TO INCREASE CONTRACT PRICE
ON BASIS OF MUTUAL MISTAKE BECAUSE OF CONTRACTOR'S NEGLIGENCE IN FAILING
TO INFORM AGENCY OF TWO ITEMS OF INCURRED COSTS DURING NEGOTIATION AND
PRIOR TO EXECUTION OF MODIFICATION.
MCDONALD & LITTLE:
MCDONALD & LITTLE (M&L) REQUESTS THE REFORMATION OF CONTRACT
MODIFICATION NO. 6 UNDER CONSUMER PRODUCT SAFETY COMMISSION CONTRACT NO.
CPSC-C-76-0065 TO INCREASE THE PRICE OF SUCH MODIFICATION BY $10,092.
THE REQUEST FOR REFORMATION IS BASED UPON AN ASSERTED MUTUAL MISTAKE IN
THE NEGOTIATION OF THE MODIFICATION BECAUSE OF THE FAILURE TO CONSIDER
TWO COSTS WHICH HAD BEEN INCURRED PRIOR TO THE EXECUTION OF THE
MODIFICATION.
FOR THE REASONS INDICATED BELOW, WE WILL NOT GRANT REFORMATION SINCE
M&L HAS NOT SHOWN THAT A MUTUAL MISTAKE WAS MADE TO JUSTIFY SUCH RELIEF.
THE CONSUMER PRODUCT SAFETY COMMISSION (CPSC) ISSUED REQUEST FOR
PROPOSALS NO. CPSC-P-76-612 FOR THE "PLANNING AND DEVELOPMENT OF A
NATIONWIDE PUBLIC SERVICE ADVERTISING CAMPAIGN ON PRODUCT SAFETY
AWARENESS AND EDUCATION" ON OCTOBER 23, 1975. M&L WAS THE SUCCESSFUL
OFFEROR AND WAS AWARDED THE CONTRACT ON JUNE 28, 1976. THE CONTRACT IS
A COST-PLUS-FIXED-FEE (CPFF) TYPE CONTRACT AND, AS ORIGINALLY EXECUTED,
M&L WAS TO BE REIMBURSED A TOTAL OF $358,880 (ESTIMATED COST OF $334,880
PLUS FIXED FEE OF $24,000). HOWEVER, DURING THE COURSE OF PERFORMANCE,
SIX MODIFICATIONS WERE EXECUTED TO REFLECT CHANGES TO THE ORIGINAL
REQUIREMENTS. AS OF MODIFICATION NO. 5 (EFFECTIVE AUGUST 25, 1977), THE
AMOUNT TO BE PAID M&L HAD RISEN TO $459,652.31 (ESTIMATED COST OF
$434,754.49 PLUS FIXED FEE OF $24,897.82). THE ALLEGED MISTAKE WHICH
FORMS THE BASIS FOR M&L'S CLAIM OCCURRED DURING THE NEGOTIATIONS FOR
MODIFICATION NO. 6.
THESE NEGOTIATIONS WERE CONDUCTED DURING AUGUST 1977. THE
MODIFICATION WAS CONDITIONALLY EXECUTED BY M&L ON OCTOBER 12, 1977, WAS
FINALLY EXECUTED ON NOVEMBER 17, 1977, BY CPSC, AND CONTAINED THE
FOLLOWING LANGUAGE:
"THE CEILING ESTABLISHED FOR TOTAL DIRECT LABOR AND INDIRECT COSTS IS
HEREBY DELETED. IN CONSIDERATION FOR DELETION OF THIS CEILING, THE
CONTRACTOR UNDERSTANDS AND AGREES THAT (1) NO COSTS NOR FEE SHALL BE
BILLED FOR BY THE CONTRACTOR OR REIMBURSED BY THE GOVERNMENT IN EXCESS
OF THE AMOUNT OF $487,652.31 AND THAT (2) ALL WORK SPECIFIED IN
MODIFICATIONS NOS. 1 THROUGH 6 SHALL BE COMPLETED."
ACCORDING TO M&L, THE PURPOSE OF THIS MODIFICATION WAS "TO ESTABLISH
A FINAL ESTIMATED COST WHEREBY M&L WOULD BE REIMBURSED FOR ALL COSTS
INCURRED IN PERFORMING THE WORK, AS AMENDED, AND TO ESTABLISH THE
CORRESPONDING FIXED FEE." M&L QUESTIONS WHETHER A FIXED CEILING WAS
NEGOTIATED. M&L SUBMITTED CERTAIN DOCUMENTS TO CPSC IN AUGUST 1977
WHICH AT THE TIME M&L BELIEVED INCLUDED ALL COSTS WHICH HAD BEEN AND
WOULD BE INCURRED IN THE PERFORMANCE OF THE CONTRACT. M&L MAINTAINS
THAT TWO COST CATEGORIES WHICH HAD BEEN NECESSARY FOR THE PERFORMANCE OF
THE CONTRACT WERE INADVERTENTLY OMITTED FROM THESE DOCUMENTS. THE FIRST
ITEM WAS FOR THE COST ($7,300) OF A RESEARCH TRACKING STUDY PERFORMED BY
AN M&L SUBCONTRACTOR WHICH M&L SAYS HAD BEEN COMPLETED AND SUBMITTED TO
CPSC IN AUGUST 1977, BUT WAS NOT BILLED TO THE AGENCY UNTIL LATE
SEPTEMBER 1977. THE OTHER ITEM OMITTED FROM M&L'S COST ESTIMATES WAS
FOR TALENT AND TRAVEL EXPENSE COSTS ($2,792) FOR THE INDIVIDUAL ACTING
AS THE SPOKESPERSON FOR THE CPSC "HOME SAFE HOME CAMPAIGN." M&L CLAIMS
THAT BOTH THESE COSTS WERE IN EFFECT APPROVED BY CPSC BEFORE AUGUST 1977
AND WERE ONLY LEFT OUT OF THE NEGOTIATIONS BECAUSE BOTH PARTIES WERE
UNAWARE THAT M&L HAD FAILED TO INCLUDE THEM IN ITS COST ESTIMATES.
BASED ON THIS, THEREFORE, M&L ARGUES THAT THERE HAS BEEN A MUTUAL
MISTAKE WHICH SHOULD BE CORRECTED BY REFORMING THE CONTRACT TO INCREASE
THE ESTIMATED COST BY $10,092.
CPSC STATES THAT ITS INTENT IN NEGOTIATING MODIFICATION NO. 6 WAS
NOT, AS M&L INDICATES, TO REIMBURSE M&L FOR ALL ITS COSTS IN PERFORMING
THE CONTRACT PLUS ESTABLISH THE APPROPRIATE FIXED FEE, BUT RATHER TO:
(1) NEGOTIATE AND FUND AN OVERRUN OF THE CONTRACT; (2) RELEASE M&L FROM
A CEILING AMOUNT OF $114,055.30 FOR TOTAL DIRECT LABOR AND INDIRECT
COSTS; AND (3) AS CONSIDERATION FOR THE RELEASE OF THIS CEILING,
NEGOTIATE A NEW CEILING FOR THE ENTIRE CONTRACT (LATER FIXED AT
$487,652.31) BEYOND WHICH AMOUNT M&L WOULD BEAR THE RISK OF ANY
ADDITIONAL COSTS. IN SUPPORT OF THIS POSITION, CPSC NOTES THE
ABOVE-QUOTED LANGUAGE FROM MODIFICATION NO. 6.
HAVING STATED ITS INTENT IN NEGOTIATING MODIFICATION NO. 6, CPSC
PRESENTS A NUMBER OF REASONS FOR DENYING THE REQUEST FOR REFORMATION.
FIRST, IT ARGUES THAT, CONTRARY TO BOTH COMMERCIAL AND GOVERNMENT
CONTRACT PRINCIPLES, REFORMATION WOULD REQUIRE THE GOVERNMENT TO
RELINQUISH A RIGHT (THE CEILING ON THE TOTAL CONTRACT PRICE) WHICH IT
HAD OBTAINED IN NEGOTIATION AS CONSIDERATION FOR RELINQUISHING ANOTHER
RIGHT (THE CEILING ON DIRECT LABOR AND INDIRECT COSTS). FURTHER, CPSC
STATES THAT IF A NEW CEILING HAD NOT BEEN NEGOTIATED, M&L WOULD HAVE
INCURRED APPROXIMATELY $25,000 IN DIRECT LABOR AND INDIRECT COSTS WHICH
THE GOVERNMENT WOULD NOT HAVE BEEN REQUIRED TO REIMBURSE. CPSC
CONTENDS, THEREFORE, THAT BEFORE MODIFICATION NO. 6 WAS NEGOTIATED M&L
FACED THE LIKELIHOOD OF SUFFERING AN ACTUAL LOSS ON THE CONTRACT, BUT
NOW, SINCE THE PARTIES HAVE AGREED TO THE MODIFICATION, DENIAL OF THE
REQUESTED RELIEF WILL ONLY HAVE THE EFFECT OF REDUCING THE AMOUNT OF
M&L'S PROFIT.
CPSC ALSO ARGUES THAT BASED ON THE DOCUMENTS M&L SUBMITTED TO SHOW
ITS ESTIMATED COSTS, THE AGENCY HAD NO REASON TO BELIEVE THAT M&L HAD
FAILED TO INCLUDE THE COST OF THE SUBCONTRACTOR TRACKING STUDY OR PART
OF THE TALENT AND TRAVEL EXPENSE COSTS. IN THE AGENCY'S OPINION, THE
BURDEN IS ON THE CONTRACTOR IN THIS SITUATION, NOT THE GOVERNMENT, TO
INSURE THAT IT HAS ACCOUNTED FOR ALL ITS COSTS. CPSC ALSO DENIES M&L'S
CONTENTION THAT HAD BOTH PARTIES BEEN AWARE OF THE OMISSIONS CPSC WOULD
HAVE READILY AGREED TO THEIR INCLUSION IN THE ESTIMATED COST ESTABLISHED
BY MODIFICATION NO. 6. CPSC MAINTAINS THAT THIS IS MERE CONJECTURE ON
M&L'S PART SINCE HAD M&L PROPOSED $10,000 MORE IN COSTS CPSC WOULD HAVE
MOST LIKELY TAKEN A HARDER NEGOTIATION POSITION. LASTLY, CPSC ALSO
REJECTS M&L'S ARGUMENT THAT HAD THE PARTIES INTENDED M&L TO ASSUME THE
RISK FOR ANY AND ALL COSTS BEYOND THE MODIFIED CONTRACT PRICE THE
MODIFICATION WOULD HAVE STATED SO IN CLEAR AND UNAMBIGUOUS LANGUAGE. IN
THE AGENCY'S OPINION, SUCH LANGUAGE DOES APPEAR ON PAGE 6 OF THE
MODIFICATION WHERE A CEILING OF $487,652.31 IS ESTABLISHED FOR THE
COMPLETION OF ALL WORK SPECIFIED IN MODIFICATIONS NOS. 1 THROUGH 6.
FROM THE FACTS PRESENTED, IT IS APPARENT THAT A MISTAKE HAS BEEN
MADE. HOWEVER, NOT EVERY MISTAKE IN THE FORMATION OF A CONTRACT IS A
BASIS FOR REFORMATION. SEE 17 AM. JUR. 2D CONTRACTS 146 (1964). THE
PURPOSE OF REFORMATION IS TO MAKE A MISTAKEN WRITING CONFORM TO THE
AGREEMENT WHICH THE PARTIES ACTUALLY MADE; IT IS NOT AVAILABLE FOR THE
ENFORCEMENT OF TERMS TO WHICH ONE OF THE PARTIES NEVER CONSENTED. BLAKE
CONSTRUCTION COMPANY, INC., B-187386, NOVEMBER 15, 1976, 76-2 CPD 414.
REFORMATION OF A CONTRACT IS AUTHORIZED WHERE BY REASON OF MUTUAL
MISTAKE THE CONTRACT DOES NOT REFLECT THE ACTUAL AGREEMENT OF THE
PARTIES, AND IT CAN BE ESTABLISHED WHAT THE AGREEMENT, WAS, OR WOULD
HAVE BEEN, HAD THE MISTAKE NOT BEEN MADE. 39 COMP. GEN. 660 (1960); 30
COMP. GEN. 220 (1950); ACTION REQUEST FOR REFORMATION OF CONTRACTS,
B-190620, JANUARY 6, 1978, 78-1 CPD 13; REFORMATION OF CONTRACT,
B-183926, JUNE 19, 1975, 75-1 CPD 373.
ALTHOUGH M&L QUESTIONS WHETHER A FIXED CEILING WAS ESTABLISHED AND
ARGUES THAT THERE HAS BEEN A MUTUAL MISTAKE, THE ABOVE RECORD SUPPORTS
CPSC'S DENIAL. THE RECORD INDICATES THAT MODIFICATION NO. 6 CLEARLY
ESTABLISHED A CEILING, AND THAT CPSC REASONABLY EXPECTED THE
NEGOTIATIONS TO ENCOMPASS ALL OF M&L'S ESTIMATED COSTS. FURTHERMORE,
M&L HAS ADMITTED THAT IT WAS UNAWARE ITSELF AT THE TIME IT SUBMITTED THE
DOCUMENTS OUTLINING ITS COST ESTIMATES THAT THE TWO COST CATEGORIES IN
QUESTION HAD NOT BEEN INCLUDED. THUS, OTHER THAN ITS BELIEF THAT AT THE
TIME NEGOTIATIONS WERE CONDUCTED CPSC WAS OR SHOULD HAVE BEEN AWARE THAT
THESE TWO COSTS OF PERFORMANCE WERE NOT INCLUDED IN THE ESTIMATES, M&L
HAS NOT PRESENTED ANY EVIDENCE WHICH SHOWS THAT CPSC HAD ACTUAL OR
CONSTRUCTIVE KNOWLEDGE THAT THE TWO ITEMS WERE OMITTED FROM THE COST
ESTIMATE. IN THIS REGARD, WE ATTACH SIGNIFICANCE TO THE AGENCY'S
NOTATION OF THE RELATIVELY SMALL AMOUNTS OF THE OMITTED COSTS AS OPPOSED
TO APPLICABLE CONTRACT COSTS - $7,300 VS. $394,556 IN COSTS TO DATE, AND
$2,792 VS. $73,000 IN COSTS FOR FINAL CAMPAIGN. WE ALSO NOTE THE LENGTH
OF TIME WHICH THE CONTENTS OF THE ALLEGEDLY DEFICIENT MODIFICATION WERE
KNOWN TO M&L AND NOT SUBJECTED TO QUESTION. SEE BLAKE CONSTRUCTION,
COMPANY, INC., SUPRA.
IN LIGHT OF THIS, WE BELIEVE THAT MODIFICATION NO. 6 REFLECTS
PRECISELY THE AGREEMENT WHICH THE PARTIES INTENDED, AND THAT THE FAILURE
TO INCLUDE THE TWO ADDITIONAL COST ITEMS IN THE AGREEMENT WAS DUE
ENTIRELY TO M&L'S OWN NEGLIGENCE. SEE BLAKE CONSTRUCTION COMPANY, INC.,
SUPRA. CONSEQUENTLY, M&L'S CLAIM MAY NOT BE ALLOWED.
B-193851, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST FILED WITH GAO MORE THAN 10 WORKING DAYS AFTER RECEIPT BY
PROTESTER OF NOTIFICATION OF INITIAL ADVERSE AGENCY ACTION ON PROTEST
FILED WITH AGENCY IS UNTIMELY AND NOT FOR CONSIDERATION ON THE MERITS.
CROSBY AND OVERTON, INC.:
CROSBY AND OVERTON, INC. (C&O) PROTESTS THE AWARD OF A CONTRACT UNDER
REQUEST FOR PROPOSALS (RFP) NO. 00406-78-R-0956 FOR CLEANING OF AN
UNDERGROUND PETROLEUM TANK AND THE REMOVAL AND DISPOSAL OF OILY WASTE
SLUDGE ON THE BASIS THAT ISSUANCE OF AN AMENDMENT AND REOPENING OF
NEGOTIATIONS WAS UNNECESSARY AND PREJUDICIAL.
ON THE CLOSING DATE, SEPTEMBER 19, 1978, OFFERS WERE RECEIVED ONLY
FROM C&O AND NORTHWEST TANK SERVICE (NORTHWEST). HOWEVER SINCE BOTH
OFFERS EXCEEDED THE ESTIMATED COST OF THE PROCUREMENT CITED IN THE
PURCHASE REQUEST, ADDITIONAL FUNDS WERE REQUESTED.
WHILE AWAITING THE REQUESTED FUNDS IT BECAME KNOWN TO THE CONTRACTING
OFFICER THAT THE AMOUNT OF SLUDGE TO BE REMOVED WAS APPROXIMATELY TWICE
THE 1,000 BARRELS STATED IN THE SOLICITATION. ACCORDINGLY, ON NOVEMBER
2, 1978, BOTH C&O AND NORTHWEST WERE NOTIFIED THAT BEST AND FINAL
OFFERS, BASED UPON REMOVAL OF 2,000 BARRELS, MUST BE RECEIVED BY
NOVEMBER 9. IN ADDITION BOTH OFFERORS WERE INFORMED OF THE ONLY
AUTHORIZED DISPOSAL SITE.
SINCE THE REQUESTED ADDITIONAL FUNDS HAD NOT BEEN AUTHORIZED BY
NOVEMBER 9, BOTH C&O AND NORTHWEST WERE REQUESTED TO EXTEND THEIR LATEST
OFFERS TO DECEMBER 19.
THEREAFTER, NORTHWEST INQUIRED WHETHER BARRELS (DRUMS) WERE REQUIRED
TO REMOVE AND DISPOSE OF THE SLUDGE SINCE IT UNDERSTOOD THAT THE
DISPOSAL SITE REQUIRED BURIAL IN DRUMS BECAUSE OF POSSIBLE LEAKAGE OF
LIQUID TOXIC MATERIAL. THE CONTRACTING OFFICER ASCERTAINED FROM
OFFICIALS AT THE TANK SITE THAT THE SOLICITATION INCORRECTLY STATED THAT
THE CONTENTS OF THE TANK CONTAINED 50 PERCENT LIQUID, AND THAT THERE
WOULD BE NO LIQUID WASTE SINCE THE WATER HAD BEEN DRAINED FROM THE OILY
SLUDGE. SINCE NO WATER SHOULD DRAIN FROM THE SLUDGE AT THE DISPOSAL
SITE, THE SITE OWNER WOULD NOT REQUIRE CONTAINERS FOR BURIAL OF THE
SLUDGE. ACCORDINGLY, THE CONTRACTING OFFICER DECIDED ON NOVEMBER 15 TO
REOPEN NEGOTIATIONS AND ISSUE A CLARIFYING AMENDMENT, WHICH STATED:
"THE FOLLOWING INFORMATION IS ISSUED FOR CLARIFICATION PURPOSES:
REMOVAL AND DISPOSAL OF SLUDGE IS NOT REQUIRED TO BE IN BARRELS BUT
MAY BE TRANSPORTED AND DISPOSED OF IN ANY TYPE OF CONTAINER THAT MEETS
FEDERAL, STATE AND LOCAL REGULATIONS."
BOTH FIRMS WERE GIVEN THE OPPORTUNITY TO SUBMIT SECOND BEST AND FINAL
OFFERS, IN LIGHT OF THIS INFORMATION, WHICH OFFERS WERE DUE DECEMBER 11.
C&O IMMEDIATELY PROTESTED TO THE CONTRACTING OFFICER THE REOPENING OF
NEGOTIATIONS, ASSERTING THAT THE CLARIFICATION WAS UNNECESSARY AND
PREJUDICIAL TO ITS NOVEMBER 9, 1978 OFFER. C&O FURTHER ALLEGED THAT
SOMEONE IN ITS ORGANIZATION HAD REVEALED ITS OFFER TO NORTHWEST. (THIS
ALLEGATION WAS NOT LATER PURSUED BEFORE OUR OFFICE.)
ON NOVEMBER 22, THE REQUESTED ADDITIONAL FUNDS WERE RECEIVED, BUT
AWARD WAS NOT MADE PENDING RESPONSE TO C&O'S PROTEST. ON NOVEMBER 30,
THE CONTRACTING OFFICER ADVISED C&O THAT IN HIS OPINION THE
CLARIFICATION WAS NECESSARY SINCE IT COULD HAVE MORE THAN A TRIVIAL
EFFECT ON PRICE, AND THAT ALL OFFERORS SHOULD COMPETE ON A COMMON
UNDERSTANDING OF THE SPECIFICATIONS. (THE SECOND ROUND OF BEST AND
FINAL OFFERS WAS RECEIVED AS SCHEDULED: C&O'S PRICE REMAINED UNCHANGED
WHILE NORTHWEST REDUCED ITS PRICE AND BECAME THE LOW OFFEROR.)
C&O, AFTER RECEIVING THE CONTRACTING OFFICER'S LETTER OF NOVEMBER 30,
TOOK ISSUE WITH HIS CONCLUSIONS IN A LETTER DATED DECEMBER 5. BY LETTER
DATED DECEMBER 27, THE CONTRACTING OFFICER AFFIRMED HIS EARLIER
CONCLUSIONS AND AGAIN DENIED C&O'S PROTEST. ON DECEMBER 29, AWARD WAS
MADE TO NORTHWEST.
OUR REVIEW OF THE CORRESPONDENCE BETWEEN THE PARTIES, CONTAINED IN
THE NAVY'S REPORT, SHOWS THAT ALTHOUGH C&O'S PROTEST TO THE AGENCY WAS
TIMELY FILED, ITS SUBSEQUENT PROTEST TO OUR OFFICE WAS NOT. SECTION
20.2(D) OF OUR BID PROTEST PROCEDURES (4 C.F.R. 20.2(A)(1978)) PROVIDES
IN RELEVANT PART:
"*** IF A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING
AGENCY, ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED
WITHIN 10 DAYS OF FORMAL NOTIFICATION OF OR CONSTRUCTIVE KNOWLEDGE OF
INITIAL ADVERSE AGENCY ACTION WILL BE CONSIDERED. ***"
C&O RECEIVED THE AGENCY'S INITIAL REJECTION OF ITS PROTEST SOME TIME
PRIOR TO DECEMBER 5, 1978. IN ADDITION, THE SECOND ROUND OF BEST AND
FINAL OFFERS WAS RECEIVED AS SCHEDULED ON DECEMBER 11. HOWEVER, C&O
THEN ENGAGED IN FURTHER CORRESPONDENCE WITH THE NAVY, RATHER THAN
PROTESTING TO OUR OFFICE. ONLY AFTER THE SECOND DENIAL BY THE NAVY DID
C&O PROTEST TO OUR OFFICE, AS A RESULT OF WHICH WE DID NOT RECEIVE THE
PROTEST UNTIL JANUARY 8, 1979. THIS WAS MORE THAN 10 DAYS AFTER INITIAL
ADVERSE AGENCY ACTION. ALTHOUGH THE NAVY'S CONTINUING CORRESPONDENCE
WITH C&O MAY HAVE CONTRIBUTED TO THE DELAY IN THE FILING WITH THIS
OFFICE, WE HAVE HELD THAT UNDER SUCH CIRCUMSTANCES THE DATE OF THE
ORIGINAL NOTIFICATION DETERMINES THE TIMELINESS OF FILING.
HARNISCHFEGER CORPORATION, B-192629, OCTOBER 11, 1978, 78-2 CPD 269;
MURPHY ANDERSON VISUAL CONCEPTS - RECONSIDERATION, B-191850, JULY 31,
1978, 78-2 CPD 79.
THE PROTEST IS DISMISSED.
B-193929, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
IN RESPONSE TO REQUEST FOR RECONSIDERATION OF PRIOR DECISION
UPHOLDING CANCELLATION OF IFB CAUSED BY LACK OF AGENCY FUNDS, GAO
CLARIFIES DECISION. DECISION WAS BASED SOLELY ON AGENCY'S UNQUESTIONED
LEGAL RIGHT TO CANCEL SOLICITATION IN THIS CIRCUMSTANCE IRRESPECTIVE OF
OTHER QUESTIONS CONCERNING VALIDITY OF GOVERNMENT COST ESTIMATE FOR IFB
WORK, REASONABLENESS OF PROTESTER'S BID, AND GENUINENESS OF AGENCY
INTENTION TO REVISE IFB SPECIFICATIONS FOR FUTURE BIDDING.
CONSEQUENTLY, PRIOR DECISION IS AFFIRMED.
SOMERS CONSTRUCTION COMPANY, INC. - RECONSIDERATION:
BY LETTER OF JUNE 20, 1979, SOMERS CONSTRUCTION COMPANY, INC.
(SOMERS), REQUESTED RECONSIDERATION OF OUR DECISION IN SOMERS
CONSTRUCTION COMPANY, INC., B-193929, APRIL 24, 1979, 79-1 CPD 217. OUR
DECISION DENIED SOMER'S PROTEST AGAINST THE CANCELLATION OF INVITATION
FOR BIDS (IFB) DACA31-79-B-0009 ISSUED BY THE DEPARTMENT OF THE ARMY,
CORPS OF ENGINEERS, FOR A CORROSION CONTROL FACILITY AT DOVER AIR FORCE
BASE, DELAWARE.
BACKGROUND
SOMERS SUBMITTED THE LOW BID OF $10,451,266 UNDER THE IFB; SOMERS'
BID, HOWEVER, WAS SUBSTANTIALLY HIGHER THAN BOTH THE GOVERNMENT ESTIMATE
($8,139,100) AND THE FUNDS AUTHORIZED ($8,481,000) FOR THE WORK.
BECAUSE OF THESE FACTS THE ARMY CANCELED THE IFB.
SOMERS' PROTEST AGAINST THE CANCELLATION ESSENTIALLY COMPLAINED THAT
THE ARMY WAS REMISS IN FAILING TO SECURE ADDITIONAL FUNDS AFTER BID
OPENING TO SUPPORT AN AWARD TO SOMERS; MOREOVER, SOMERS INSISTED THAT
IF GOVERNMENT FUNDING FOR THE PROJECT WAS NOT INCREASED OR IF
SIGNIFICANT CHANGES IN THE SCOPE OF THE WORK WERE NOT MADE, ANY FUTURE
IFB FOR THE WORK WOULD ALSO HAVE TO BE CANCELED.
WE CONCLUDED THAT THE ARMY'S DECISION TO CANCEL THE IFB WAS NOT
SUBJECT TO LEGAL QUESTION. THIS WAS SO BECAUSE THE INTERNAL MANAGEMENT
OF AN AGENCY'S FUNDS GENERALLY DEPENDS ON JUDGMENT CONCERNING WHICH
PROJECTS AND ACTIVITIES SHOULD RECEIVE GREATER (OR LESSER) AMOUNTS OF
FUNDS. ADDITIONALLY, WE COULD NOT QUESTION THE ARMY'S STATED POSITION
THAT THE "PROJECT IS BEING REDESIGNED IN AN ATTEMPT TO INSURE THAT
RESPONSIVE COMPETITIVE BIDS WITHIN THE FUNDS AVAILABLE ARE RECEIVED UPON
RESOLICITATION."
REQUEST FOR RECONSIDERATION
SOMERS SAYS THAT THE PROJECT IN QUESTION WAS RECENTLY REBID AND THAT
THE "LOW BID WAS AGAIN APPROXIMATELY $2,000,000 ABOVE THE GOVERNMENT
ESTIMATE, A VIRTUALLY IDENTICAL REPEAT OF THE SITUATION THAT EXISTED
UPON RECEIPT OF BIDS THE FIRST TIME." SOMERS FURTHER SAYS THAT THE
RESULTS OF THE REBIDDING SHOW THAT "THERE WAS LITTLE OF CONSEQUENCE IN
THE WAY OF REDESIGN WHICH HAD A BEARING ON THE COST OF THE FACILITY."
FINALLY, SOMERS ARGUES THAT THE RESULTS OF THE REBIDDING SHOW THAT THE
ARMY WAS INCORRECT IN ITS INSISTENCE ON THE VALIDITY OF THE ARMY
ESTIMATE FOR THE ORIGINAL IFB AND IN ITS RELATED JUDGMENT THAT SOMERS'
LOW BID ON IFB-0009 WAS UNREASONABLY HIGH. (BOTH OF THESE ARMY
POSITIONS WERE QUESTIONED BY SOMERS IN ITS ORIGINAL PROTEST; HOWEVER,
WE FOUND IT UNNECESSARY TO CONSIDER THE VALIDITY OF THESE POSITIONS IN
VIEW OF OUR CONCLUSION THAT THE LACK OF FUNDS TO SUPPORT AN AWARD TO
SOMERS, IN ITSELF, JUSTIFIED CANCELING THE IFB.)
ANALYSIS
TO THE EXTENT THAT SOMERS BELIEVES OUR ORIGINAL DECISION UPHOLDING
THE IFB CANCELLATION WAS BASED ON ASSUMPTIONS ABOUT THE ARMY'S REDESIGN
OF SPECIFICATIONS FOR FUTURE BIDDING, WE CLARIFY OUR PRIOR DECISION BY
REJECTING SOMERS' NOTION. ACTUALLY, THE DECISION WAS BASED SOLELY ON
THE ARMY'S UNQUESTIONED LEGAL RIGHT TO CANCEL THE SOLICITATION BECAUSE
OF LACK OF FUNDS IRRESPECTIVE OF THE DISPUTES OVER THE VALIDITY OF THE
GOVERNMENT'S ESTIMATE AND THE REASONABLENESS OF SOMERS' BID. THERE IS
NOTHING IN SOMERS' PRESENT REQUEST WHICH CHANGES THIS FUNDAMENTAL
CONCLUSION. OUR REMARK CONCERNING THE ARMY'S INTENT TO REVISE ITS
SPECIFICATIONS FOR FUTURE BIDDING WAS MEANT ONLY TO CONVEY OUR REASONING
FOR NOT RECOMMENDING CORRECTIVE ACTION.
PRIOR DECISION AFFIRMED.
B-194009, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
UNDER 15 U.S.C. SEC. 637(B)(7), SMALL BUSINESS ADMINISTRATION (SBA)
HAS AUTHORITY TO ISSUE OR DENY CERTIFICATE OF COMPETENCY (COC) AND GAO
GENERALLY WILL NOT REVIEW SBA DETERMINATION, ABSENT PRIMA FACIE SHOWING
OF FRAUD OR WILLFUL DISREGARD OF FACTS.
SMI/NEW YORK; SWEEPSTER, INC.:
SWEEPSTER, INC., (SWEEPSTER) PROTESTS THE REFUSAL OF THE SMALL
BUSINESS ADMINISTRATION (SBA) TO ISSUE IT A CERTIFICATE OF COMPETENCY
(COC) IN CONNECTION WITH INVITATION FOR BIDS (IFB) DLA 700-79-B-0078, A
SMALL BUSINESS SET-ASIDE, ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY
CENTER, DEFENSE LOGISTICS AGENCY (DLA).
PREVIOUSLY SMI/NEW YORK, A DIVISION OF CAELTER INDUSTRIES, INC.,
(SMI), THE SECOND LOW BIDDER, PROTESTED ANY AWARD TO SWEEPSTER ON THE
BASIS THAT SWEEPSTER WOULD NOT FURNISH A "COMMERCIAL PRODUCT OF THE
MANUFACTURER'S LATEST DESIGN" AS REQUIRED BY THE SPECIFICATIONS.
THIS ALLEGATION OF NONRESPONSIBILITY WAS CONCURRED IN BY THE
CONTRACTING OFFICER AND, AS REQUIRED, HE REFERRED THE MATTER TO THE
SMALL BUSINESS ADMINISTRATION (SBA). SBA ALSO DETERMINED THAT SWEEPSTER
WOULD NOT BE ABLE TO COMPLY WITH THAT SPECIFICATION PROVISION AND
DECLINED TO ISSUE A (COC).
THE SBA IN ESSENCE AFFIRMED THE CONTRACTING OFFICER'S CONCLUSION THAT
SWEEPSTER'S LATEST DESIGN OF ITS COMMERCIAL PRODUCT COULD NOT MEET THE
SPECIFICATION REQUIREMENTS WITHOUT MODIFICATIONS. SINCE THE ITEM HAD
NOT BEEN COMMERCIALLY MARKETED WITH THESE MODIFICATIONS, THE USING
AGENCY (THE AIR FORCE) OBJECTED TO THE PURCHASE OF THE ITEM, FORESEEING
PROBLEMS WITH RELIABILITY, AND ADEQUACY OF TECHNICAL DATA AND PARTS
SUPPORT. SWEEPSTER CONTENDS THAT THE CHANGES TO BE MADE TO ITS PRODUCT
WERE MORE IN THE NATURE OF "CUSTOMER OPTIONS" THAN "MODIFICATIONS", THAT
THE AIR FORCE'S APPREHENSIONS ARE UNFOUNDED, AND THAT THE SBA IMPROPERLY
DECLINED TO ISSUE THE COC BECAUSE IT DID NOT CORRECTLY INTERPRET
SPECIFICATION REQUIREMENTS.
THE SBA HAS THE AUTHORITY TO MAKE FINAL DISPOSITION OF QUESTIONS
CONCERNING THE RESPONSIBILITY OF A SMALL BUSINESS CONCERN TO RECEIVE AND
PERFORM A SPECIFIC GOVERNMENT CONTRACT. 15 U.S.C. SEC. 637(B)(7)
(1976), AS AMENDED BY PUB.L. 95-89, SEC. 501, 91 STAT. 561, AUGUST 4,
1977. OUR OFFICE GENERALLY WILL NOT REVIEW SUCH SBA DETERMINATIONS
UNLESS THE PROTESTER HAS MADE A PRIMA FACIE SHOWING OF FRAUD OR WILLFUL
DISREGARD OF FACTS. OLD HICKORY SERVICES, B-192906.2, FEBRUARY 9, 1979,
79-1 CPD 92; SEE ALSO SPECIALTY TOOLS, INC., B-193980, APRIL 15, 1979,
79-1 CPD 239; SEMCO, INC., B-192623, AUGUST 28, 1978, 78-2 CPD 147.
WHILE WE HAVE REQUESTED SBA TO REOPEN A CASE WHERE INFORMATION
MATERIALLY AFFECTING THE DETERMINATION OF NONRESPONSIBILITY WAS NOT
TAKEN INTO CONSIDERATION, HERE IT APPEARS SBA WAS FULLY AWARE OF ALL THE
RELEVANT FACTS. CF. HARPER ENTERPRISES, 53 COMP. GEN. 496 (1974), 74-1
CPD 31.
ACCORDINGLY, THE SWEEPSTER PROTEST IS DISMISSED. SMI'S PROTEST IS
DISMISSED AS MOOT.
B-194692, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
(1) ALLOTMENT PAYMENTS FROM AN ARMY MEMBER'S PAY MADE TO HIS SPOUSE
IN A COMMUNITY PROPERTY STATE ARE CONSIDERED TO BE ASSETS OF THE
COMMUNITY IN WHICH THE MEMBER HAS AN INTEREST. SINCE THE MEMBER HAS A
DIRECT INTEREST IN THE PAYMENTS HE IS NOT ENTITLED TO BE REIMBURSED FOR
THE MONEY ERRONEOUSLY DEDUCTED FROM HIS PAY AND PAID TO HIS WIFE IN
ORDER TO PAY A VOLUNTARY SUPPORT ALLOTMENT ALTHOUGH THE MEMBER TOOK THE
NECESSARY STEPS TO DISCONTINUE THE ALLOTMENT.
(2) ALLOTMENT PAYMENTS FROM AN ARMY MEMBER'S PAY MADE TO HIS FORMER
SPOUSE IN A COMMUNITY PROPERTY STATE AFTER THE SPOUSE AND THE MEMBER ARE
DIVORCED INURE TO THE BENEFIT OF THE SPOUSE'S SEPARATE ESTATE. IT CAN
NO LONGER BE SAID THAT THE MEMBER HAS AN INTEREST IN THE PAYMENTS.
SINCE THE MEMBER WAS NOT AT FAULT FOR THE CONTINUANCE OF THE ALLOTMENT
PAYMENTS AND TOOK ALL THE NECESSARY STEPS TO DISCONTINUE THE ALLOTMENT,
THE MEMBER IS NOT LIABLE FOR THE PAYMENTS MADE AFTER THE DIVORCE AND IS
ENTITLED TO BE REIMBURSED FOR THEM. THE FORMER SPOUSE IS LIABLE FOR
THEM AND THEY SHOULD BE COLLECTED FROM HER.
SERGEANT RICHARD C. RUSHING, USA:
THE ISSUE IN THIS CASE IS WHETHER SERGEANT RICHARD C. RUSHING, USA,
IS ENTITLED TO REIMBURSEMENT OF $3,000 DEDUCTED FROM HIS MILITARY PAY
ACCOUNT IN ORDER TO PAY A VOLUNTARY ALLOTMENT FOR THE SUPPORT OF HIS
WIFE AFTER HE HAD REQUESTED THAT THE ALLOTMENT BE STOPPED. WE CONCLUDE
THAT SERGEANT RUSHING IS ENTITLED TO REIMBURSEMENT ONLY FOR THE
ALLOTMENT PAYMENTS MADE AFTER THE DATE OF HIS DIVORCE, AND ONLY TO THE
EXTENT THAT HE WAS NOT REIMBURSED BY HIS WIFE.
THE QUESTION ARISES AS A RESULT OF SERGEANT RUSHING'S LETTER OF MARCH
30, 1979, APPEALING A SETTLEMENT ISSUED BY OUR CLAIMS DIVISION ON
SEPTEMBER 28, 1978, DENYING HIS CLAIM FOR REIMBURSEMENT.
ON AUGUST 29, 1977, SERGEANT RUSHING EXECUTED TWO SEPARATE DA FORMS
1341, TO DISCONTINUE ALLOTMENTS IN THE AMOUNT OF $25 AND $500, EFFECTIVE
SEPTEMBER 1, 1977. THE ALLOTMENTS WERE PAYABLE TO HIS THEN WIFE, TINA
A. RUSHING (NOW TINA A. ROSS), FOR HER SUPPORT. SERGEANT RUSHING'S
END-OF-MONTH PAY VOUCHER FOR SEPTEMBER 1977, REFLECTED THE $25 ALLOTMENT
AS BEING STOPPED. THE $500 ALLOTMENT, HOWEVER, CONTINUED TO BE PAID FOR
THE NEXT SIX MONTHS WITH THE APPROPRIATE DEDUCTIONS MADE FROM SERGEANT
RUSHING'S PAY. DURING THESE SIX MONTHS, SERGEANT RUSHING SUBMITTED 3
ADDITIONAL REQUESTS TO STOP THE ALLOTMENT. DUE TO OVERSIGHTS BY THE
CLERKS WHO POST THE RECORDS NONE OF THE STOP ALLOTMENT AUTHORIZATIONS
BECAME EFFECTIVE. THE FINAL PAYMENT WAS MADE FOR THE PERIOD ENDING
FEBRUARY 28, 1978, ONLY AFTER THE ARMY WAS INFORMED THAT SERGEANT
RUSHING AND HIS WIFE WERE DIVORCED ON JANUARY 16, 1978. SERGEANT
RUSHING WAS SUBSEQUENTLY REIMBURSED BY HIS EX-WIFE FOR THE $500 SHE
RECEIVED ON MARCH 1, 1978.
THE GENERAL RULE IN SITUATIONS SUCH AS THIS IS THAT WHERE AN
ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID AND THE SERVICE
MEMBER WAS NOT AT FAULT, THE PAYEE OR RECIPIENT, NOT THE SERVICE MEMBER,
IS LEGALLY LIABLE TO REFUND THE PAYMENT. 33 COMP. GEN. 309, 313-314
(1954). THUS, IT WOULD FOLLOW THAT IN ADDITION TO NOT BEING LIABLE THE
SERVICE MEMBER WOULD BE ENTITLED TO A REFUND OF THE MONEY DEDUCTION FROM
HIS PAY. THE MEMBER, HOWEVER, WOULD NOT BE ENTITLED TO A REFUND IF HE
HAD AN INTEREST IN, OR THE PROCEEDS FROM THE ALLOTMENT INURED TO HIS
BENEFIT. SEE MATTER OF OLLIE N. MARSHALL, B-193400, JANUARY 31, 1979;
MATTER OF NEAL B. BATTS, JR., B-185820, FEBRUARY 11, 1977; 37 COMP.
GEN. 218 (1957). COMPARE 49 COMP. GEN. 361 (1969).
THE RECORD INDICATES THAT SERGEANT RUSHING AND HIS SPOUSE WERE
RESIDENTS OF THE STATE OF TEXAS AND THAT THEY REMAINED HUSBAND AND WIFE
WITHOUT ANY FORMAL OR LEGAL SEPARATION UNTIL JANUARY 16, 1978. AS LEGAL
RESIDENTS OF TEXAS, THE MEMBER AND HIS SPOUSE WERE SUBJECT TO THE LAWS
OF THAT STATE AS THEY RELATED TO THEIR PROPERTY RIGHTS. SEE: MATTER OF
NEAL B. BATTS, JR., SUPRA AND AUTHORITIES CITED THEREIN. THE STATE OF
TEXAS IS A COMMUNITY PROPERTY STATE.
ACCORDING TO THE LAWS OF TEXAS, COMMUNITY PROPERTY CONSISTS OF THE
PROPERTY OTHER THAN SEPARATE PROPERTY ACQUIRED BY EITHER SPOUSE DURING
MARRIAGE. SEE: TEX. FAM. CODE ANN. SEC. 5.01(B) (VERNON). IN THE
CASE OF STERRETT V. STERRETT, 228 S.W. 2D 341 (CT. APP., TEX. 1950),
THE TEXAS COURT OF APPEALS STATED THAT AN ALLOTMENT PAID BY THE UNITED
STATES GOVERNMENT TO A SERVICEMAN'S WIFE WAS PART OF THE SERVICEMAN'S
COMPENSATION FOR SERVICES RENDERED AND WAS THEREFORE PROPERTY OF THE
COMMUNITY. IT FOLLOWS THAT THE MONEY ERRONEOUSLY PAID TO SERGEANT
RUSHING'S WIFE WAS PART OF HIS COMPENSATION FOR SERVICES RENDERED TO THE
ARMY AND WAS, UNDER TEXAS LAW, A PART OF THE COMMUNITY ESTATE. SEE:
MATTER OF NEAL B. BATTS, JR., SUPRA.
THEREFORE, EVEN THOUGH PAYMENT OF THE MONEY IN QUESTION TO THE WIFE
WAS NOT AUTHORIZED BY SERGEANT RUSHING, UNDER THE LAW OF TEXAS SUCH
PAYMENTS WERE IN THE NATURE OF COMMUNITY PROPERTY ASSETS IN WHICH HE HAD
A DIRECT INTEREST. CF. STERRETT V. STERRETT, SUPRA. SINCE SERGEANT
RUSHING HAD AN INTEREST IN THE PAYMENTS HE IS NOT ENTITLED TO BE
REIMBURSED THE MONEY DEDUCTED FROM HIS PAY AND ERRONEOUSLY PAID TO HIS
WIFE PRIOR TO THEIR DIVORCE.
AS WAS STATED ABOVE, SERGEANT RUSHING AND TINA RUSHING WERE DIVORCED
ON JANUARY 16, 1978. AT THIS TIME, THE DISTRICT COURT OF DALLAS COUNTY,
TEXAS, 254TH JUDICIAL DISTRICT DIVIDED THE COMMUNITY PROPERTY. THUS,
ANYTHING EARNED OR ACQUIRED BY SERGEANT RUSHING OR HIS EX-WIFE AFTER THE
DATE OF THE DIVORCE BECAME THEIR SEPARATE PROPERTY.
THE RECORD INDICATES THAT TINA RUSHING RECEIVED ALLOTMENT PAYMENTS
FOR THE MONTHS OF JANUARY AND FEBRUARY 1978 AFTER THE DATE OF THE
DIVORCE. DURING THIS TIME ALL ALLOTMENT PAYMENTS RECEIVED BY TINA
RUSHING INURED TO THE BENEFIT OF HER SEPARATE ESTATE AND SERGEANT
RUSHING HAD NO INTEREST IN THESE PAYMENTS. SINCE THERE IS EVERY
INDICATION THAT SERGEANT RUSHING WAS NOT AT FAULT FOR THE CONTINUANCE OF
THE ALLOTMENT PAYMENTS AND HE HAD TAKEN ALL THE STEPS NECESSARY TO
DISCONTINUE THE ALLOTMENT, HE IS NOT TO BE CONSIDERED LIABLE FOR THE
LAST TWO ALLOTMENT PAYMENTS.
SERGEANT RUSHING HAS BEEN REIMBURSED BY TINA RUSHING FOR THE
ALLOTMENT CHECK SHE RECEIVED COVERING THE MONTH OF FEBRUARY 1978.
THEREFORE, HE IS ONLY ENTITLED TO BE REIMBURSED FOR THE ALLOTMENT
PAYMENT FOR THE MONTH OF JANUARY 1978. HOWEVER, IN JANUARY 1978,
SERGEANT RUSHING WAS IN RECEIPT OF BASIC ALLOWANCE FOR QUARTERS (BAQ) AT
THE WITH DEPENDENT RATE. SINCE AFTER JANUARY 16, 1978, HE DID NOT HAVE
A DEPENDENT, HE WAS NOT ENTITLED TO BAQ AT THE WITH DEPENDENT RATE AFTER
THAT DATE. THEREFORE, SERGEANT RUSHING IS ENTITLED TO BE REIMBURSED THE
AMOUNT OF THE ALLOTMENT PAID TO TINA RUSHING FOR THE MONTH OF JANUARY
1978, LESS THE EXCESS BAQ HE RECEIVED FOR JANUARY 17-31, 1978. HE WILL
RECEIVE A SETTLEMENT FOR THAT AMOUNT IN DUE COURSE.
TINA RUSHING IS LIABLE FOR THE ERRONEOUS JANUARY ALLOTMENT PAYMENT
SHE RECEIVED AND APPROPRIATE COLLECTION ACTION SHOULD BE TAKEN TO
RECOVER THAT AMOUNT.
THE CLAIMS DIVISION SETTLEMENT IS MODIFIED IN ACCORDANCE WITH THE
ABOVE.
B-194726, JUL 24, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHEN AN EMPLOYEE OF A FEDERAL AGENCY TRANSFERRED TO A POSITION IN A
VETERANS ADMINISTRATION (VA) FACILITY, HER COMPENSATION WAS SET AT A
STEP OF THE GRADE LOWER THAN PREVIOUSLY HELD. USE OF HIGHEST PREVIOUS
RATE RULE BY AN AGENCY IN SETTING A PAY RATE ON TRANSFER IS
DISCRETIONARY. WHERE VA REGULATIONS GOVERNING EMPLOYEE COMPENSATION
PROVIDE THAT USE OF RULE IS INAPPLICABLE IF HIGHER RATE WAS EARNED IN
NON-VA POSITIONS, THE EMPLOYEE IS NOT ENTITLED TO HAVE THE RATE USED IN
SETTING HER NEW PAY RATE.
MARIE BARNA:
THIS ACTION IS IN RESPONSE TO A LETTER FROM MS. MARIE BARNA, AN
EMPLOYEE OF THE VETERANS ADMINISTRATION (VA), REQUESTING A REVIEW OF A
SETTLEMENT BY OUR CLAIMS DIVISION DATED DECEMBER 19, 1978, WHICH
DISALLOWED HER CLAIM FOR RETROACTIVE STEP INCREASE AND BACKPAY.
THE FILE IN MS. BARNA'S CASE SHOWS THAT SHE WAS EMPLOYED BY THE VA
FROM NOVEMBER 1950 UNTIL SEPTEMBER 1956. SHE THEREAFTER WAS EMPLOYED BY
THE INTERNAL REVENUE SERVICE (IRS) AND ATTAINED GRADE GS-5, STEP 9. IN
FEBRUARY 1974, SHE WAS REEMPLOYED BY THE VETERANS ADMINISTRATION
HOSPITAL, CLEVELAND, OHIO, AS A PAYROLL CLERK, AND WAS AUTHORIZED TO
RECEIVE COMPENSATION AT THE GRADE GS-5, STEP 4 LEVEL.
SECTION 5334 OF TITLE 5, UNITED STATES CODE, AUTHORIZES THAT CIVIL
SERVICE COMMISSION (NOW OFFICE OF PERSONNEL MANAGEMENT) TO PROVIDE
REGULATIONS GOVERNING THE RATE OF PAY THAT AN EMPLOYEE MAY RECEIVE UPON
TRANSFER, APPOINTMENT, REAPPOINTMENT, REEMPLOYMENT OR REINSTATEMENT.
THOSE REGULATIONS ARE FOUND IN TITLE 5, CODE OF FEDERAL REGULATIONS.
SUBPARAGRAPH 531.203(C) OF THOSE REGULATIONS STATES THAT WHEN AN
EMPLOYEE IS REEMPLOYED, THAT AGENCY, UNDER REGULATIONS PRESCRIBED BY
THEM, MAY PAY THE EMPLOYEE AT ANY RATE OF HIS GRADE WHICH DOES NOT
EXCEED HIS HIGHEST PREVIOUS RATE.
THOSE REGULATIONS DO NOT REQUIRE AGENCIES TO USE THE HIGHEST PREVIOUS
RATE WHEN SETTING THE PAY RATE OF A REEMPLOYED OR TRANSFERRED EMPLOYEE
NOR USE A PAY RATE THAT EVEN APPROXIMATES THAT HIGHER RATE. IT MERELY
ESTABLISHES A CEILING AS TO THE PERMISSIBLE RATE PAYABLE BY THE AGENCY
AND AUTHORIZES THE AGENCY TO REGULATE FURTHER.
DEPARTMENTAL REGULATIONS GOVERNING RATES OF COMPENSATION FOR
EMPLOYEES OF THE VA ARE CONTAINED IN THE VETERANS ADMINISTRATION
PERSONNEL POLICY MANUAL. PART I, CHAPTER 531, SECTION B, THEREOF,
ENTITLED "DETERMINING RATE OF BASIC COMPENSATION", PROVIDES IN
SUBPARAGRAPH 4E(7):
"(7) TRANSFERS. CONSISTENT WITH THE LIMITATIONS OF NON-VA SERVICE,
SET FORTH IN SUBPARAGRAPH C ABOVE, THE EARNED RATE RULE WILL NOT
ROUTINELY BE APPLIED IN EFFECTING TRANSFER FROM ANOTHER AGENCY ***.
RATHER, THE RATE TO BE SELECTED WITHIN THE GRADE SHALL BE THAT WHICH IN
THE AUTHORIZING OFFICER'S JUDGMENT BEST REPRESENTS EQUITY TO THE
EMPLOYEE ***. THE HIGHEST PREVIOUS RATE, IF OTHERWISE APPROPRIATE IN
THE JUDGMENT OF THE AUTHORIZING OFFICIAL, SHALL BE SELECTED ONLY IF ***
IT *** MEETS THE *** CRITERIA SPECIFIED IN SUBPARAGRAPH D ABOVE."
SUBPARAGRAPH 4C REFERRED TO, PROVIDES THAT FOR THE PURPOSE OF
ESTABLISHING THE APPROPRIATE RATE OF PAY FOR THE GRADE EMPLOYED, THE
HIGHEST PREVIOUS RATE RULE "SHALL APPLY ONLY TO RATES RECEIVED IN
GENERAL SCHEDULE POSITIONS HELD IN VA ON OR AFTER OCTOBER 15, 1963 ***."
THAT PROVISION AUTHORIZES, HOWEVER, THAT SALARY RATES IN NON-VA
POSITIONS MAY BE TAKEN INTO ACCOUNT IF IN THE JUDGMENT OF THE
AUTHORIZING OFFICER IT IS APPROPRIATE TO DO SO, "BUT NO RIGHT IS VESTED
IN THE EMPLOYEE TO RECEIVE A RATE BASED ON SUCH CRITERIA".
SUBPARAGRAPH 4D PROVIDES IN PART:
"D. CRITERIA FOR APPLICATION OF EARNED RATE RULE. THE EARNED RATE
RULE HIGHEST PREVIOUS RATE WILL BE CONTROLLING ONLY WHERE THE RECORD
INDICATES, IN THE AUTHORIZING OFFICIAL'S JUDGMENT, THAT THE EXPERIENCE
GAINED IN THE POSITION ON WHICH THE RATE IS PROPOSED TO BE BASED WAS OF
SUCH QUALITY AND DURATION THAT THE INDIVIDUAL'S TOTAL QUALIFICATIONS
WERE LIKELY THEREBY TO HAVE BEEN ENHANCED. ***
"(3) WHERE AN AFFIRMATIVE DETERMINATION CANNOT BE MADE FOR
APPLICATION OF EARNED RATE RULE *** A SALARY RATE SHALL BE SELECTED AT
ANY LOWER LEVEL WITHIN THE GRADE ***. THE RATE SELECTED *** SHALL BE
THAT WHICH IN THE AUTHORIZING OFFICIAL'S JUDGMENT BEST REPRESENTS EQUITY
TO THE EMPLOYEE AND THE VA ***."
THUS, UNDER THE REGULATIONS, SINCE MS. BARNA'S ONLY FEDERAL
EMPLOYMENT AFTER 1963 WAS NOT WITH THE VA, SHE WAS NOT ENTITLED AS A
MATTER OF RIGHT TO USE THAT SALARY RATE FOR HIGHEST PREVIOUS RATE
PURPOSES UPON REEMPLOYMENT WITH OR TRANSFER TO THE VETERANS
ADMINISTRATION HOSPITAL FROM IRS. THE FILE, HOWEVER, DOES INDICATE THAT
IN COMPLIANCE WITH THE LAST PART OF SUBPARAGRAPH 4C AND THE CRITERIA
LISTED IN SUBPARAGRAPH 4D, THE NON-VA EXPERIENCE SHE HAD WAS TAKEN INTO
ACCOUNT WHEN SHE WAS EMPLOYED BY THE VA IN 1974 AND HER STEP RATE WAS
SET.
SO LONG AS AGENCY REGULATIONS AS WRITTEN ARE CONSISTENT WITH THE LAW
AND COMPLIED WITH BY THE APPROPRIATE ADMINISTRATIVE OFFICIALS, THERE IS
NO LEGAL BASIS UPON WHICH THIS OFFICE MAY CHALLENGE ACTIONS
ADMINISTRATIVELY TAKEN THEREUNDER.
ACCORDINGLY, THE ACTION TAKEN BY OUR CLAIMS DIVISION DISALLOWING THE
CLAIM, IS SUSTAINED.
B-192132, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
BUREAU OF INDIAN AFFAIRS IS NOT RESPONSIBLE FOR DEBTS TO PRIVATE
CREDITORS INCURRED BY ITS CONTRACTOR, DINE, INC., WHERE THERE WAS NO
EXPRESS COMMITMENT BY THE BUREAU TO GUARANTEE PAYMENT OF DINE'S DEBTS.
DINE, INC. - LIABILITY FOR DEBTS.:
THE FORMER COMMISSIONER OF INDIAN AFFAIRS HAS REQUESTED OUR OPINION
ON WHETHER THE BUREAU OF INDIAN AFFAIRS IS LIABLE FOR VARIOUS DEBTS
INCURRED BY DINE, INC., A GENERAL CONTRACTOR OF THE BUREAU.
THE BUREAU ENTERED INTO COST REIMBURSABLE CONTRACTS WITH DINE FOR
FISCAL YEARS 1972 AND 1973 BY WHICH DINE AGREED TO CONDUCT THE
EDUCATIONAL PROGRAM FOR NAVAJO CHILDREN AT ROUGH ROCK DEMONSTRATION
SCHOOL IN CHINLE, ARIZONA. DINE HAD OPERATED THE SCHOOL ON A "GRANT
AWARD CONTRACT" FOR THE THREE PREVIOUS FISCAL YEARS. WHILE OPERATING
THE SCHOOL, DINE INCURRED OBLIGATIONS IN EXCESS OF THE AMOUNTS OF ITS
CONTRACT, AND BECAME HEAVILY INDEBTED TO SEVERAL GOVERNMENTAL AND
NONGOVERNMENTAL CREDITORS. THE BUREAU DID NOT RENEW THE CONTRACT WITH
DINE WHEN IT EXPIRED AT THE END OF FISCAL YEAR 1973, INSTEAD CONTRACTING
WITH A NEW CORPORATION TO OPERATE THE SCHOOL. DINE IS CURRENTLY
INSOLVENT AND THE BUREAU IS CONCERNED ABOUT POSSIBLE LIABILITY FOR THE
CORPORATION'S DEBTS.
THE RECORD BEFORE US CONTAINS A COPY OF THE FISCAL YEAR 1973 CONTRACT
BETWEEN THE BUREAU AND DINE, (CONTRACT NO. N00 C 1420 5718, DATED AUGUST
15, 1972.) ALTHOUGH THE FISCAL YEAR 1972 CONTRACT IS NOT IN THE RECORD,
WE ASSUME THAT ITS TERMS ARE SIMILAR TO THOSE OF THE 1973 CONTRACT.
THE 1973 CONTRACT BETWEEN THE BUREAU AND DINE WAS A COST
REIMBURSEMENT TYPE CONTRACT. SECTION 316 PROVIDED THAT THE BUREAU WOULD
PAY DINE AN AMOUNT NOT TO EXCEED $925,257.00 OF WHICH $136,375.00 WAS TO
BE IN THE FORM OF GOODS AND SERVICES.
SUBSECTION (C) OF SECTION 316 STATED THAT FOR THE PURPOSES OF
REIMBURSEMENT, DINE WOULD SUBMIT MONTHLY INVOICES SHOWING THE COST IT
INCURRED IN CARRYING OUT THE CONTRACT, ALONG WITH RECEIPTS FOR PAYMENT.
THE EXPENDITURES WERE TO BE CODED TO IDENTIFY THEM WITH ITEMS IN THE
BUDGET FOR THE OPERATION OF THE SCHOOL, WHICH WAS MADE A PART OF THE
CONTRACT.
THE CONTRACT ALSO CONTAINED A PROVISION FOR AN "ADVANCE PAYMENT" OF
$200,000 TO DINE. THE PROCEDURES BY WHICH THE ADVANCE PAYMENT WAS TO BE
MADE WERE SET FORTH IN SECTION 332, WHICH WAS ADDED TO THE CONTRACT WHEN
THE ADVANCE PAYMENT WAS APPROVED. THIS SECTION REQUIRED THAT DINE
SEGREGATE THE ADVANCE PAYMENT FROM ITS OTHER CORPORATE FUNDS BY PLACING
IT IN A SPECIAL BANK ACCOUNT FROM WHICH FUNDS COULD BE WITHDRAWN ONLY
WITH THE APPROVAL OF THE CONTRACTING OFFICER OR HIS REPRESENTATIVE.
THOSE SUPPLYING GOODS OR SERVICES TO PRIME GOVERNMENT CONTRACTORS ARE
CONSIDERED SUBCONTRACTORS. THERE IS GENERALLY NO CONTRACTUAL
RELATIONSHIP BETWEEN A SUBCONTRACTOR AND THE GOVERNMENT. THERE IS THUS
NO LEGAL WAY THE SUBCONTRACTOR CAN ASSERT A CLAIM AGAINST THE UNITED
STATES BASED ON THE FAILURE OF THE PRIME CONTRACTOR TO PAY FOR SUPPLIES
OR SERVICES, UNLESS THE GOVERNMENT HAS EXPRESSLY AGREED TO ASSUME AN
OBLIGATION TO PAY. SEE PUTNAM MILLS CORP. V. UNITED STATES, 202 CT. CL.
1, 479 F.2D 1334, 1337 (1973); WARRIOR CONSTRUCTORS, INC. V. HARDERS,
INC., 387 F.2D 727, 729 (5TH CIR. 1967); BEACON CONSTRUCTION CO. V.
PREPAKT CONCRETE CO., 375 F.2D 977, 981 (1ST CIR. 1967); JOHNSON CORP.,
B-180591, JAN. 17, 1975; 52 COMP. GEN. 377, 381 (1972); 32 COMP. GEN.
174, 175 (1952). THE FACT THAT THE GOVERNMENT MAY HAVE BEEN
INSTRUMENTAL IN INDUCING THE SUBCONTRACTOR TO PERFORM ITS CONTRACT IS
NOT ENOUGH BY ITSELF TO ESTABLISH THE ASSUMPTION OF AN OBLIGATION TO
PAY. JOHNSON CORP., SUPRA; B-171255, SEPT. 3, 1971.
IN THIS CASE, THE RECORD CONTAINS NO EVIDENCE OF A DIRECT COMMITMENT
BY THE BUREAU TO GUARANTEE THE PAYMENT OF DINE'S DEBTS. THE FACT THAT
DINE HAD A COST REIMBURSEMENT TYPE CONTRACT WITH THE BUREAU DOES NOT
ESTABLISH ANY COMMITMENT ON THE PART OF THE GOVERNMENT TO PAY DINE'S
CREDITORS. THE GOVERNMENT'S CONTRACTUAL OBLIGATIONS TO REIMBURSE PRIME
CONTRACTORS FOR COSTS EXTENDS ONLY TO THE PRIME CONTRACTOR AND NOT TO
ANY SUBCONTRACTOR WITH WHOM THE PRIME MAY HAVE DEALT. B-175550, DEC.
19, 1972.
AS WE STATED ABOVE, THE 1973 DINE CONTRACT PROVIDED FOR AN ADVANCE
PAYMENT OF $200,000. ADVANCE PAYMENT PROVISIONS ARE A CONTRACT
FINANCING TOOL DESIGNED TO FACILITATE THE PERFORMANCE OF A GOVERNMENT
CONTRACT BY PROVIDING WORKING CAPITAL TO ALLOW THE CONTRACTOR TO MEET
CURRENTLY MATURING DEBTS ARISING THROUGHOUT THE PERFORMANCE OF THE
CONTRACT. THE ADVANCE PAYMENT AGREEMENT IN THE DINE CONTRACT AND THE
SPECIAL BANK ACCOUNT DESIGNED TO IMPLEMENT IT CONSTITUTED A FINANCING
ARRANGEMENT BETWEEN DINE AND THE BUREAU AND DID NOT CREATE ANY DIRECT
COMMITMENT ON THE PART OF THE BUREAU TO DINE'S CREDITORS.
SOME OF DINE'S DEBTS TO NONGOVERNMENTAL CREDITORS WERE INCURRED PRIOR
TO FISCAL YEAR 1972, DURING WHICH TIME DINE WAS OPERATING THE ROUGH ROCK
SCHOOL UNDER A "GRANT AWARD CONTRACT". THE RECORD DOES NOT INDICATE THE
NATURE OF THE "GRANT AWARD CONTRACT" OR ITS TERMS. HOWEVER, UNLESS IT
CONTAINED A SPECIFIC PROVISION BY WHICH THE BUREAU ASSUMED AN OBLIGATION
TO INSURE THAT DINE'S CREDITORS WERE PAID, WE CAN CONCEIVE OF NO BASIS
UPON WHICH THE BUREAU CAN BE LIABLE FOR THESE DEBTS.
WE CONCLUDE THAT THE BUREAU OF INDIAN AFFAIRS IS NOT RESPONSIBLE FOR
ANY OF THE UNPAID DEBTS TO PRIVATE CREDITORS INCURRED BY DINE, INC.
B-192619, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE WAS NOTIFIED WHILE ON HOME LEAVE OF OFFER TO TRANSFER FROM
NEWFOUNDLAND TO THE AZORES. HE ACCEPTED OFFER AND RETURNED TO OLD
STATION TO ARRANGE TRANSPORTATION OF HOUSEHOLD GOODS AND COMPLETE
PROCESSING OF TRANSFER. HE ALSO TRAVELED TO SECOND LOCATION UNDER
AMENDED HOME-LEAVE ORDERS. ALTHOUGH EMPLOYEE IS ENTITLED TO ONLY ONE
HOME-LEAVE TRIP BETWEEN OVERSEAS TOURS UNDER 5 U.S.C. SEC. 5728(A), HE
SHOULD BE REIMBURSED TRAVEL EXPENSES INCURRED NOT TO EXCEED CONSTRUCTIVE
COSTS OF ONE ROUND TRIP BETWEEN NEWFOUNDLAND AND SECOND HOME-LEAVE
LOCATION (AUTHORIZED BY ORIGINAL ORDERS) AND FROM THERE TO NEW STATION
SINCE AGENCY REQUIRED HIM TO RETURN TO OLD STATION.
JOHN B. WILLIS, JR. - OVERSEAS TOUR RENEWAL AGREEMENT TRAVEL - HOME
LEAVE:
CAPTAIN THOMAS H. CECIL, USAF, ACCOUNTING AND FINANCE OFFICER,
HEADQUARTERS 1605TH AIR FORCE WING (MAC), APO NEW YORK, REQUESTS AN
ADVANCE DECISION WHETHER PAYMENT OF CERTAIN TRAVEL EXPENSES INCIDENT TO
HOME LEAVE MAY BE MADE TO JOHN B. WILLIS, JR., A FORMER TEACHER AT THE
NAVY DEPENDENT SCHOOL, ARGENTIA, NEWFOUNDLAND, CANADA. THE REQUEST WAS
FORWARDED BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE
WHICH ASSIGNED IT PDTATAC CONTROL NO. 78-28.
A TRAVEL AUTHORIZATION DATED JUNE 1, 1977, WAS ISSUED TO COVER THE
HOME-LEAVE TRAVEL OF MR. WILLIS, HIS WIFE, AND SON, TO MARIPOSA,
CALIFORNIA, AND RETURN. MR. WILLIS DEPARTED HIS PERMANENT DUTY STATION
AT ARGENTIA, NEWFOUNDLAND, ON JUNE 16, 1977, AND ARRIVED AT KITTYHAWK,
NORTH CAROLINA, AN INTERMEDIATE LEAVE POINT, ON JUNE 25, 1977. WHILE AT
KITTYHAWK, MR. WILLIS RECEIVED NOTIFICATION OF A REASSIGNMENT OFFER TO
LAJES FIELD, AZORES. HE ACCEPTED THE REASSIGNMENT, AND ON JUNE 29,
1977, DEPARTED KITTYHAWK TO RETURN TO NEWFOUNDLAND. THE AIR FORCE
REPORTS THAT MR. WILLIS WAS REQUIRED TO RETURN TO NEWFOUNDLAND TO SHIP
HIS HOUSEHOLD GOODS AND COMPLETE CHANGE-OF-STATION PROCESSING. HOWEVER,
THERE IS NOTHING IN THE RECORD TO INDICATE THAT HE WAS REQUIRED TO
DEPART KITTYHAWK IMMEDIATELY.
AT THE TIME OF HIS RETURN TO NEWFOUNDLAND, MR. WILLIS HAD NOT
COMPLETED HIS RENEWAL AGREEMENT TRAVEL. WHILE AT NEWFOUNDLAND, MR.
WILLIS' RENEWAL AGREEMENT TRAVEL ORDERS WERE AMENDED ON JULY 8, 1977, TO
CHANGE THE NEW OFFICIAL STATION FROM NEWFOUNDLAND TO LAJES FIELD,
AZORES. THE AMENDED TRAVEL ORDERS AUTHORIZED RENEWAL AGREEMENT TRAVEL
FROM NEWFOUNDLAND TO MARIPOSA, CALIFORNIA, AND RETURN TO LAJES FIELD,
AZORES, PORTUGAL. AFTER COMPLETING OUT-PROCESSING AT NEWFOUNDLAND, MR.
WILLIS DEPARTED UNDER HIS AMENDED ORDERS AND TRAVELED TO DALLAS, TEXAS,
BEFORE REPORTING TO THE AZORES.
THE DEPARTMENT OF THE AIR FORCE HAS PAID MR. WILLIS HIS TRAVEL
ALLOWANCES FROM NEWFOUNDLAND, TO THE AZORES VIA TEXAS. MR. WILLIS HAS
ALSO SUBMITTED A VOUCHER FOR REIMBURSEMENT FOR HIS ORIGINAL TRAVEL FROM
NEWFOUNDLAND TO KITTYHAWK, NORTH CAROLINA, AND RETURN. THE ACCOUNTING
AND FINANCE OFFICER QUESTIONS WHETHER, UNDER THE CIRCUMSTANCES
DESCRIBED, MR. WILLIS MAY BE PAID FOR THE RENEWAL AGREEMENT TRAVEL
BETWEEN NEWFOUNDLAND AND KITTYHAWK, AND RETURN.
SECTION 5728(A) OF TITLE 5 OF THE UNITED STATES CODE (1976) PROVIDES
THAT AN AGENCY SHALL PAY THE ROUND-TRIP TRAVEL EXPENSES OF AN EMPLOYEE
AND HIS IMMEDIATE FAMILY FROM HIS POST OF DUTY OUTSIDE THE CONTINENTAL
UNITED STATES TO HIS PLACE OF ACTUAL RESIDENCE AT THE TIME OF
APPOINTMENT OR TRANSFER TO THE POST OF DUTY, AFTER HE HAS SATISFACTORILY
COMPLETED AN AGREED PERIOD OF SERVICE OUTSIDE THE CONTINENTAL UNITED
STATES FOR THE PURPOSE OF TAKING LEAVE PRIOR TO SERVING ANOTHER TOUR OF
DUTY AT THE SAME OR ANOTHER OVERSEAS POST UNDER A NEW WRITTEN AGREEMENT
ENTERED INTO BEFORE DEPARTING FROM THE OVERSEAS POST. HOWEVER, THE COST
PAYABLE BY THE GOVERNMENT FOR TRAVEL TO AN ALTERNATE LOCATION IS
RESTRICTED TO THE COST ACTUALLY INCURRED AND MAY NOT EXCEED THE
CONSTRUCTIVE COST TO THE PLACE OF ACTUAL RESIDENCE. 46 COMP. GEN. 675,
677 (1977).
WE BELIEVE HE IS ENTITLED TO MORE THAN THE AIR FORCE HAS PAID HIM.
WHEN HE ACCEPTED THE OFFER, THE AGENCY REQUIRED HIM TO RETURN TO
NEWFOUNDLAND TO ARRANGE THE TRANSPORTATION OF HIS HOUSEHOLD GOODS AND
COMPLETE THE CHANGE-OF-STATION PROCESSING. ALSO, MR. WILLIS PERFORMED
THE TRAVEL IN QUESTION PURSUANT TO A PROPER HOME-LEAVE TRAVEL
AUTHORIZATION. UNDER SUCH CIRCUMSTANCES HE IS ENTITLED TO REIMBURSEMENT
OF HOME-LEAVE TRAVEL EXPENSES TO THE EXTENT ALLOWABLE BY LAW AND THE
REGULATIONS. HOWEVER, WE DO NOT BELIEVE THE AUTHORIZATION IN THE
ABOVE-CITED STATUTE FOR ONE HOME-LEAVE ROUND TRIP OF AN OVERSEAS
EMPLOYEE REASONABLY MAY BE EXTENDED TO COVER TRAVEL EXPENSES FOR A
SECOND HOME-LEAVE TRIP BEFORE THE EMPLOYEE HAS SERVED AN ADDITIONAL
OVERSEAS TOUR OF DUTY.
ACCORDINGLY, THE VOUCHER SHOULD BE PROCESSED AND MR. WILLIS SHOULD BE
REIMBURSED FOR HIS TRAVEL EXPENSES NOT TO EXCEED THE CONSTRUCTIVE COST
OF ONE ROUND TRIP BETWEEN NEWFOUNDLAND AND TEXAS, AND THE CONSTRUCTIVE
COST OF A TRIP FROM NEWFOUNDLAND TO THE AZORES. ALSO, AN APPROPRIATE
DEDUCTION SHOULD BE MADE FOR PAYMENTS PREVIOUSLY MADE AND FOUND NOT TO
BE REIMBURSABLE.
B-193137, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEES ARE ENTITLED TO PER DIEM AT A TEMPORARY DUTY STATION A
SHORT DISTANCE BEYOND THE BOUNDARIES OF A MILITARY BASE WHICH IS THEIR
PERMANENT DUTY STATION WHERE THE AGENCY DETERMINED THAT EMPLOYEES SHOULD
REMAIN AT THAT PLACE OVERNIGHT TO PROVIDE AN IMPROVED WORK ENVIRONMENT
TO COMPLETE A SPECIAL TASK. IN THE CIRCUMSTANCES MILEAGE AND THE COST
OF A ROOM IN WHICH OFFICIAL BUSINESS WAS TRANSACTED ARE ALSO
REIMBURSABLE AS TRAVEL EXPENSES.
RODNEY B. SORKIN - CLAIM FOR PER DIEM, MILEAGE AND ROOM RENTAL AT TDY
NEAR PERMANENT DUTY STATION:
THE ISSUES PRESENTED IN THIS CASE ARE WHETHER PER DIEM, MILEAGE AND
RENTAL OF CONFERENCE ROOMS MAY BE AUTHORIZED FOR CIVILIAN EMPLOYEES OF
THE NATIONAL SECURITY AGENCY WHO ATTENDED A RETREAT TYPE CONFERENCE
LOCATED 5 MILES FROM THEIR DUTY STATION. THE ANSWER ON ALL THREE
MATTERS IS IN THE AFFIRMATIVE. THE REQUEST FOR AN ADVANCE DECISION FROM
THE NATIONAL SECURITY AGENCY WAS FORWARDED HERE BY THE DEPARTMENT OF
DEFENSE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE (PDTATAC
CONTROL NO. 78-38).
MR. RODNEY B. SORKIN, AN EMPLOYEE OF THE NATIONAL SECURITY AGENCY,
DEPARTMENT OF DEFENSE, LOCATED AT FORT GEORGE G. MEADE, MARYLAND, WAS
AUTHORIZED TO ATTEND A CONFERENCE AT A MOTEL IN DORSEY, MARYLAND,
LOCATED 5 MILES FROM THE SITE OF HIS OFFICIAL DUTY STATION. PER DIEM,
MILEAGE AND RENTAL OF CONFERENCE ROOM WERE AUTHORIZED IN TRAVEL ORDERS
ISSUED ON APRIL 24, 1978.
THE CONFERENCE AT DORSEY OCCURRED ON APRIL 26, AND 27, 1978. THE
PURPOSE OF THE CONFERENCE WAS TO DISCUSS AN ONGOING PROJECT, THE CURRENT
AND PROJECTED PROBLEMS IN COMPLETING THE PROJECT AND BECOMING
OPERATIONAL BY THE TARGET DATE. THE CONFEREES INITIALLY MET IN
CONFERENCE ROOMS AVAILABLE TO THEM AT THEIR NORMAL PLACE OF DUTY TO
DISCUSS CLASSIFIED TOPICS; AFTER WHICH, THE PARTICIPANTS RELOCATED THE
CONFERENCE TO THE HOLIDAY INN MOTEL 5 MILES AWAY TO DISCUSS
NONCLASSIFIED TOPICS. IT WAS APPARENTLY DETERMINED BY SOMEONE WITH
AUTHORITY TO AUTHORIZE TRAVEL THAT THE PARTICIPANTS SHOULD GET AWAY FROM
THEIR NORMAL WORK ENVIRONMENT, TELEPHONES, INTERRUPTIONS, ETC., TO MAKE
THE MEETINGS MEANINGFUL AND PRODUCTIVE. THE PARTICIPANTS WERE
PERFORMING ESSENTIALLY THE SAME TYPE DUTIES THAT THEY WERE RESPONSIBLE
FOR ON A DAY-TO-DAY BASIS. ALTHOUGH THE MOTEL AT WHICH THE CONFERENCE
WAS HELD WAS OUTSIDE THE EMPLOYEE'S DUTY STATION THE DISTANCE TRAVELED
TO AND FROM THE CONFERENCE SITE BY MR. SORKIN AND OTHER PARTICIPANTS - 6
TO 17 MILES - WERE NO GREATER THAN THE DISTANCES THE PARTICIPANTS
NORMALLY TRAVEL FROM THEIR RESIDENCE TO THEIR WORK SITE. IN SEVERAL
INSTANCES, THE DISTANCE TRAVELED WAS LESS THAN THEIR NORMAL DAILY
TRAVEL.
WHEN AN EMPLOYEE IS ASSIGNED TO A NEARBY TEMPORARY DUTY POST IT IS
WITHIN ADMINISTRATIVE DISCRETION TO PERMIT SUCH EMPLOYEE AN ALLOWANCE
FOR MILEAGE WITHOUT A DEDUCTION OR THE DISTANCE HE WOULD NORMALLY TRAVEL
BETWEEN HIS HOME AND HEADQUARTERS, AND IRRESPECTIVE OF WHETHER HE
PERFORMS DUTY AT HIS HEADQUARTERS ON THAT DAY. OFFICIALS ARE TO GIVE
DUE CONSIDERATION TO THE INTERESTS OF BOTH THE GOVERNMENT AND THE
EMPLOYEE. B-189061, MARCH 15, 1978, AND CASES CITED; AND B-184175,
JUNE 8, 1979. SINCE THE MILEAGE WAS AUTHORIZED ON THE TEMPORARY DUTY
TRAVEL ORDERS BY THE NATIONAL SECURITY AGENCY, THE CLAIM FOR MILEAGE MAY
BE PAID IF OTHERWISE CORRECT.
THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7) (MAY 1973) SPECIFICALLY
AUTHORIZE REIMBURSEMENT FOR THE RENTAL OF ROOMS FOR OFFICIAL BUSINESS
(FTR PARA. 1-9.1B) AND WHERE THE ROOMS HAVE BEEN OBTAINED BY AN
EMPLOYEE, UPON PRESENTATION OF RECEIPTS OR EXPLANATION ON A VOUCHER (FTR
PARA. 1-11.3C(8)) THE EMPLOYEE MAY BE REIMBURSED FOR THE EXPENDITURE. A
MEETING ROOM FOR THE TRANSACTION OF OFFICIAL BUSINESS WAS RENTED BY MR.
SORKIN WHILE IN A TRAVEL STATUS (AS DETERMINED BELOW). THEREFORE, HE
MAY BE REIMBURSED FOR SUCH RENTAL IN THE AMOUNT SHOWN ON THE VOUCHER AND
ACCOMPANYING RECEIPTS IF OTHERWISE CORRECT.
THE AUTHORITY FOR THE PAYMENT OF A PER DIEM ALLOWANCE TO EMPLOYEES
TRAVELING ON OFFICIAL BUSINESS AWAY FROM THEIR DESIGNATED POST OF DUTY
IS CONTAINED IN 5 U.S.C. SEC. 5702 (1976) AND THE IMPLEMENTING
REGULATIONS CONTAINED IN PART 7, CHAPTER 1 OF THE FTR. UNDER THE
PROVISIONS OF FTR PARA. 1-7.6A, AN EMPLOYEE MAY NOT BE PAID PER DIEM AT
HIS PERMANENT DUTY STATION NOR AT HIS PLACE OF ABODE FROM WHICH HE
COMMUTES DAILY TO HIS OFFICIAL DUTY STATION.
IN 24 COMP. GEN. 179 (1944) A CLAIM FOR PER DIEM WAS ALLOWED WHERE
THE EMPLOYEE'S DUTY STATION WAS WASHINGTON, D.C., AND THE TEMPORARY DUTY
WAS JUST ACROSS THE DISTRICT OF COLUMBIA BORDER AT COLLEGE PARK,
MARYLAND. IN THAT DECISION WE STATED THAT THE QUESTION OF WHETHER THE
PERFORMANCE OF DUTY WITHIN A FEW MILES OF THE HEADQUARTERS OFFICE
CONSTITUTES A TRAVEL STATUS DEPENDS UPON THE FACTS IN THE CASE, SUCH AS
THE TIME NECESSARILY ABSENT FROM HEADQUARTERS ON OFFICIAL BUSINESS AND
THE AVAILABILITY OF TRANSPORTATION BETWEEN HEADQUARTERS AND THE
TEMPORARY DUTY STATION. IN 24 COMP. GEN. 179, THE SYLLABUS READS:
"WHERE AN EMPLOYEE'S DUTY AT A TEMPORARY STATION A DISTANCE BEYOND
THE CORPORATE LIMITS OF HIS OFFICIAL STATION REQUIRED HIS PRESENCE THERE
DURING SUCH HOURS AS TO RENDER DAILY TRAVEL BETWEEN THE TEMPORARY
STATION AND HIS HOME OR OFFICIAL STATION IMPRACTICABLE, THUS PUTTING HIM
TO GREATER SUBSISTENCE EXPENSE THAN ORDINARILY INCURRED AT HEADQUARTERS,
THE EMPLOYEE MAY BE CONSIDERED AS HAVING BEEN IN A TRAVEL STATUS DURING
THE PERIOD OF TEMPORARY DUTY, ENTITLING HIM TO PER DIEM *** AT THE RATE
STIPULATED IN HIS TRAVEL ORDERS, WHICH IS COMMENSURATE WITH THE
ADDITIONAL EXPENSE INCURRED. ***"
ALSO, IN MATTER OF JON C. GEIST, B-189731, JANUARY 3, 1978, IT WAS
HELD THAT PER DIEM COULD BE PAID TO AN EMPLOYEE WHO STAYED AT A MOTEL
WITHIN COMMUTING DISTANCE OF HIS DUTY STATION SINCE IT HAD BEEN
DETERMINED THAT WORK REQUIREMENTS AT THE TEMPORARY DUTY LOCATION DID NOT
PERMIT THE EMPLOYEE TO RETURN HOME.
AUTHORIZING TEMPORARY DUTY TRAVEL EXPENSES IN CASES WHERE THE
TEMPORARY DUTY LOCATION IS NEAR BUT NOT AT THE HEADQUARTERS OF THE
TRAVELER IS PRIMARILY FOR ADMINISTRATIVE DETERMINATION. SINCE PER DIEM
WAS AUTHORIZED BY AN APPROPRIATE OFFICIAL IN THIS CASE, PAYMENT OF
TRAVEL COSTS AS AUTHORIZED IN LAW AND REGULATION IS APPROPRIATE.
ACCORDINGLY MR. SORKIN'S CLAIM FOR MILEAGE, REIMBURSEMENT FOR MEETING
ROOM RENTAL, AND PER DIEM MAY BE PAID, IF OTHERWISE CORRECT.
B-193623, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CUSTOMS INSPECTOR STATIONED AT BLAINE, WASHINGTON CLAIMS OVERTIME
COMPENSATION FOR TRAVEL TIME FROM STATION THROUGH CANADA TO PERFORM
TEMPORARY DUTY AT POINT ROBERTS, WASHINGTON. HE IS NOT ENTITLED TO
OVERTIME COMPENSATION. DRIVING WAS NOT PERFORMED DURING REGULAR TOUR OF
DUTY. ALSO, DRIVING ON HARD-SURFACED ROADS, ALTHOUGH THROUGH ALLEGEDLY
HIGH CRIME AREAS, DOES NOT CONSTITUTE TRAVEL UNDER ARDUOUS CONDITIONS.
EARL MATCHETT - OVERTIME COMPENSATION WHILE IN TRAVEL STATUS:
THIS ACTION CONCERNS THE APPEAL OF MR. EARL MATCHETT, A CUSTOMS
INSPECTOR STATIONED AT BLAINE, WASHINGTON, FROM THE DISALLOWANCE OF HIS
CLAIM FOR OVERTIME COMPENSATION FOR TRAVEL DURING NON-DUTY HOURS IN 1975
FROM BLAINE TO A TEMPORARY DUTY ASSIGNMENT AT POINT ROBERTS, WASHINGTON
BECAUSE HIS TRAVEL TIME DID NOT MEET THE CRITERIA FOR OVERTIME PAYMENT
SET OUT UNDER 5 U.S.C. SEC. 5542(B)(2). HE APPEALS THE DISALLOWANCE BY
OUR CLAIMS DIVISION ON THE BASIS THAT HE WAS ENTITLED TO PAY FROM THE
TIME HE LEFT HIS PERMANENT DUTY STATION UNTIL HE RETURNED TO IT BECAUSE:
(1) THE OVERTIME WAS REGULARLY SCHEDULED, OFFICIALLY ORDERED AND
APPROVED; AND, (2) THE TRAVEL WAS PERFORMED UNDER ARDUOUS CONDITIONS.
FOR REASONS DISCUSSED BELOW, WE DISALLOW MR. MATCHETT'S APPEAL AND
SUSTAIN OUR CLAIMS DIVISION'S DECISION.
THE TRAVEL MR. MATCHETT PERFORMED WAS BETWEEN HIS PERMANENT DUTY
STATION AND POINT ROBERTS, A CUSTOMS INSTALLATION LOCATED 26 MILES FROM
BLAINE ON A PENINSULA ACCESSIBLE BY HIGHWAY ONLY THROUGH CANADA. THE
POINT REMAINS OPEN 24 HOURS A DAY AND REQUIRES THREE SHIFTS OF
INSPECTORS. SINCE IT HAS STAFFING PROBLEMS, INSPECTORS FROM BLAINE
PROVIDE RELIEF FOR ITS REGULAR INSPECTORS. EACH BLAINE INSPECTOR
TRAVELS TO THE POINT FOR TEMPORARY DUTY ABOUT 21 TIMES A YEAR.
AT THE OUTSET, WE NOTE THAT MR. MATCHETT BELIEVES THAT HIS POSITION
WAS IMPROPERLY CLASSIFIED AS EXEMPT FROM THE PROVISIONS OF THE FAIR
LABOR STANDARDS ACT (FLSA), 29 U.S.C. SECS. 201-19 (1976). WE SHALL
NOT, HOWEVER, CONSIDER HIS CLAIM UNDER THE FLSA SINCE HE IS AN EXEMPT
EMPLOYEE AND PROTESTS AGAINST SUCH CLASSIFICATION CAN BE REFERRED ONLY
TO THE OFFICE OF PERSONNEL MANAGEMENT. SEE B-51325, OCTOBER 7, 1976.
MR. MATCHETT CONTENDS THAT HE IS ENTITLED TO OVERTIME FOR THE TIME
SPENT DRIVING FROM BLAINE TO POINT ROBERTS AND THE RETURN TRIP BECAUSE
HE BELIEVES HE WAS ACTUALLY ASSIGNED A TEN-HOUR SHIFT. HE STATES THAT
THIS SHIFT WAS REGULARLY SCHEDULED, OFFICIALLY ORDERED AND APPROVED, AND
HE WAS ISSUED A TRAVEL AUTHORIZATION NUMBER. THE ADMINISTRATIVE REPORT
SHOWS, ON THE CONTRARY, THAT CUSTOMS ASSIGNED ONLY REGULAR EIGHT-HOUR
SHIFTS. MOREOVER, THE CLAIMANT HAS SUBMITTED NO EVIDENCE THAT CUSTOMS
ORDERED HIM TO WORK TEN-HOUR SHIFTS WHICH INCLUDED DRIVING TIME. TITLE
5, SEC. 6101(B)(2) OF THE UNITED STATES CODE PROVIDES:
"TO THE MAXIMUM EXTENT PRACTICABLE, THE HEAD OF AN AGENCY SHALL
SCHEDULE THE TIME TO BE SPENT BY AN EMPLOYEE IN A TRAVEL STATUS AWAY
FROM HIS OFFICIAL DUTY STATION WITHIN THE REGULARLY SCHEDULED WORKWEEK
OF THE EMPLOYEE."
THIS STATUTE, HOWEVER, PERMITS AN AGENCY TO EXERCISE DISCRETION AS TO
WHETHER TRAVEL MAY BE SCHEDULED WITHIN THE EMPLOYEE'S WORKWEEK. WHEN
THE EMPLOYEE'S REGULARLY SCHEDULED DUTIES INVOLVE ASSIGNMENTS TO WHICH
HE COMMUTES FROM HIS HEADQUARTERS, WE DO NOT CONSIDER THE IMPOSITION ON
HIS PRIVATE LIFE SIGNIFICANTLY DIFFERENT FROM THE TRAVEL REQUIRED TO AND
FROM HIS REGULAR DUTY STATION. THEREFORE, WE DO NOT FIND SUCH TRAVEL
TIME COMPENSABLE UNDER 5 U.S.C. SEC. 5542(B)(2). 52 COMP. GEN. 446, 449
(1973).
MR. MATCHETT FURTHER CLAIMS THAT THE COMMUTING FROM BLAINE TO POINT
ROBERTS WAS UNDER ARDUOUS CONDITIONS BECAUSE OF INCLEMENT WEATHER, AND
BECAUSE HE OFTEN DROVE ALONE AT NIGHT THROUGH AN AREA THAT HE CLAIMS THE
ROYAL CANADIAN MOUNTED POLICE RECOGNIZED AS A "HIGH RISK ACCIDENT AREA."
THE QUESTION OF WHETHER AN EMPLOYEE'S TRAVEL IS PERFORMED UNDER ARDUOUS
CONDITIONS MUST BE DETERMINED FROM THE FACTS OF THE INDIVIDUAL CLAIM,
AND ARDUOUS CONDITIONS MUST BE DISTINGUISHED FROM HAZARDOUS ONES,
B-163654, JUNE 22, 1971.
IN THE PRESENT CASE, THE AGENCY REPORTS THAT THE TRAVEL WAS PERFORMED
OVER EXPRESSWAYS, FOUR-LANE HIGHWAYS, AND ASPHALT ROADS, AND THAT THE
DRIVER DID NOT ENCOUNTER UNUSUALLY SEVERE WEATHER CONDITIONS. MR.
MATCHETT HAS ALLEGED THAT THE DRIVING WAS THROUGH HIGH-CRIME AREAS.
HOWEVER, HE HAS NOT PRESENTED ANY EVIDENCE TO SHOW THAT THERE WAS ANY
PARTICULAR DANGER TO HIM OR ANY OTHER MOTORIST DRIVING ON THE
HARD-SURFACED ROADS INVOLVED IN THIS CASE. THUS, THE CONDITIONS UNDER
WHICH MR. MATCHETT DROVE DO NOT MEET THE "ARDUOUS CONDITIONS" TEST OF 5
U.S.C. SEC. 5542 (B)(2)(B)(III), AND NO PAYMENT MAY BE MADE UNDER THAT
PROVISION. SEE 41 COMP. GEN. 82 (1961).
FINALLY, MR. MATCHETT STATES THAT HE HAS NOT BEEN REIMBURSED FOR THE
COST OF INSURING THE GOVERNMENT VEHICLE THAT HE DROVE THROUGH CANADA.
SINCE THIS WAS NOT PART OF HIS ORIGINAL CLAIM OR SPECIFICALLY CLAIMED ON
APPEAL, WE WILL NOT CONSIDER IT HERE, BUT REFER HIM TO FEDERAL TRAVEL
REGULATION (TEMP. REG. FPMR A-11, SUPP. 4, ATTACHMENT A) PARA.
1-9.1C(3) (1977) AND SUGGEST THAT HE CLAIM THIS AMOUNT FROM HIS AGENCY.
IN VIEW OF THE ABOVE, WE SUSTAIN THE DISALLOWANCE OF MR. MATCHETT'S
CLAIM.
B-194398.1, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST ALLEGING IMPROPRIETIES IN SOLICITATION FILED SUBSEQUENT
TO CLOSING DATE FOR RECEIPT OF OFFERS IS UNTIMELY UNDER BID PROTEST
PROCEDURES. MOREOVER, ISSUES RAISED DO NOT JUSTIFY MAKING EXCEPTION TO
TIMELINESS RULES WHICH PERMIT CONSIDERATION OF UNTIMELY PROTESTS WHERE
ISSUES ARE "SIGNIFICANT" TO PROCUREMENT PRACTICES.
2. WHERE RECORD INDICATES PROPOSAL EVALUATION WAS IN ACCORDANCE WITH
ESTABLISHED CRITERIA AND WAS BASED ON REASONED JUDGMENT OF EVALUATORS,
PROTEST BASED ON OFFEROR'S DISAGREEMENT WITH EVALUATORS IS DENIED
BECAUSE DETERMINATION OF RELATIVE MERITS OF PROPOSAL IS RESPONSIBILITY
OF PROCURING AGENCY AND WILL NOT BE DISTURBED UNLESS SHOWN TO BE
ARBITRARY OR CONTRARY TO STATUTES AND REGULATIONS.
INDUSTRIAL TECHNOLOGICAL ASSOCIATES, INC.:
INDUSTRIAL TECHNOLOGICAL ASSOCIATES, INC. (INDUSTRIAL) PROTESTS THE
AWARD OF A CONTRACT TO ANY FIRM OTHER THAN IT UNDER REQUEST FOR
PROPOSALS (RFP) SBA-7(I)MA-79-1 TO PROVIDE MANAGEMENT AND TECHNICAL
ASSISTANCE SERVICES FOR AREA 32 - REGION V AND AREA 26 - CITY OF
CLEVELAND. THE SOLICITATION FOR AREA 32 - REGION V WAS SUBSEQUENTLY
CANCELED AND INDUSTRIAL HAS WITHDRAWN ITS PROTEST FOR THAT SOLICITATION.
THE SOLICITATION, ISSUED NOVEMBER 13, 1978, PROVIDED THAT EACH
PROPOSAL WOULD BE EVALUATED ON A POINT SYSTEM PURSUANT TO CERTAIN
FACTORS SET FORTH IN THE SOLICITATION. CLOSING DATE WAS DECEMBER 15,
1978.
IN ITS PROTEST RECEIVED IN GAO ON MARCH 30, 1979, INDUSTRIAL REFERRED
TO THE RFP'S PROGRAM SPECIFICATIONS, WHICH PROJECTED THAT 90 PERCENT OF
THE BOOKKEEPING AND ACCOUNTING SERVICES CALLED FOR WOULD BE APPROPRIATE
FOR A JUNIOR ACCOUNTANT, AND THAT THERE WOULD BE FEW INSTANCES REQUIRING
THE ABILITIES OF SENIOR, OR CPA, ACCOUNTING EXPERTISE. INDUSTRIAL
STATES IT HAS HAD THE OPPOSITE EXPERIENCE AND SUGGESTS THAT IT
DISREGARDED THE RFP'S ADVICE IN PRICING ITS OFFER, WHICH CONTEMPLATED
THE USE OF "MATURE CPAS, PUBLIC ACCOUNTANTS, AND BUSINESS EXECUTIVES
PLUS *** OTHER SENIOR CONSULTANTS ***." THEREFORE, INDUSTRIAL ARGUES,
THIS PORTION OF THE RFP WAS NOT IN THE BEST INTERESTS OF THE GOVERNMENT.
INDUSTRIAL ALSO CONTENDS THAT THE RFP WAS DEFECTIVE IN THAT IT REQUIRED
OFFERORS TO INCLUDE UNCERTAIN TRAVEL AND PER DIEM COSTS WITHIN THEIR
FIXED PRICE PER TASK DAY.
OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1978), PROVIDE IN
SECTION 20.2(B)(1):
"PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF
SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE
FOR RECEIPT OF INITIAL PROPOSALS SHALL BE FILED PRIOR TO BID OPENING OR
THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS."
THEREFORE, IF INDUSTRIAL THOUGHT THE RFP ERRONEOUSLY CONTEMPLATED THE
USE OF JUNIOR ACCOUNTANTS OR IMPROPERLY REQUIRED OFFERORS TO FACTOR
HIGHLY SPECULATIVE COSTS INTO THEIR FIXED PRICE PROPOSALS, IT WAS
REQUIRED TO FILE ITS PROTEST PRIOR TO THE CLOSING DATE FOR RECEIPT OF
INITIAL PROPOSALS, DECEMBER 15, 1978. INDUSTRIAL'S PROTEST WAS NOT
RECEIVED IN GAO UNTIL MARCH 30, 1979. THUS THE PROTEST MUST BE
CONSIDERED UNTIMELY AND NOT FOR CONSIDERATION ON THE MERITS. THE ART
PRODUCTION COMPANY, B-191470, APRIL 5, 1978, 78-1 CPD 273; DEERE &
COMPANY, B-189136(1), JUNE 28, 1977, 77-1 CPD 460.
INDUSTRIAL CONTENDS THAT OUR OFFICE COULD CONSIDER THE PROTEST EVEN
IF UNTIMELY, UNDER THE "SIGNIFICANT ISSUE EXCEPTION" PROVIDED IN 4
C.F.R. SEC. 20.2(C) (1978). THIS SECTION PERMITS CONSIDERATION OF
UNTIMELY PROTESTS WHERE ISSUES SIGNIFICANT TO PROCUREMENT PRACTICES OR
PROCEDURES ARE RAISED. HOWEVER, THE SIGNIFICANT ISSUE EXCEPTION IS
LIMITED TO ISSUES WHICH ARE OF WIDESPREAD INTEREST TO THE PROCUREMENT
COMMUNITY AND IS EXERCISED SPARINGLY SO THAT THE TIMELINESS STANDARDS DO
NOT BECOME MEANINGLESS. ABC CLEANING SERVICE, INC., B-190406, FEBRUARY
27, 1978, 78-1 CPD 158. WE SEE NOTHING IN THIS CASE TO WARRANT INVOKING
THIS EXCEPTION.
INDUSTRIAL FURTHER CONTENDS THAT SBA'S EVALUATORS ERRED IN THEIR
EVALUATION OF INDUSTRIAL'S CAPABILITY. INDUSTRIAL DOESN'T SPECIFY HOW
SUCH ERRORS WERE MADE. IT MERELY ASSERTS THAT IT WAS PERFECTLY CAPABLE
OF PERFORMING AND SHOULD HAVE RECEIVED A CONTRACT.
IN RESOLVING CASES IN WHICH A PROTESTER, AS HERE, CHALLENGES THE
VALIDITY OF A TECHNICAL EVALUATION, IT IS NOT THE FUNCTION OF OUR OFFICE
TO EVALUATE PROPOSALS IN ORDER TO DETERMINE WHICH SHOULD HAVE BEEN
SELECTED FOR AWARD. THE DETERMINATION OF THE RELATIVE MERITS OF
PROPOSALS IS THE RESPONSIBILITY OF THE PROCURING AGENCY, SINCE IT MUST
BEAR THE BURDEN OF ANY DIFFICULTIES INCURRED BY REASON OF A DEFECTIVE
EVALUATION. ACCORDINGLY, WE HAVE HELD THAT PROCURING OFFICIALS ENJOY A
REASONABLE DEGREE OF DISCRETION IN THE EVALUATION OF PROPOSALS AND SUCH
DISCRETION MUST NOT BE DISTURBED UNLESS SHOWN TO BE ARBITRARY OR IN
VIOLATION OF THE PROCUREMENT STATUTES AND REGULATIONS. AIRPORT
MANAGEMENT SYSTEMS, INC., B-190296, MAY 25, 1978, 78-1 CPD 395. WE WILL
NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE PROCURING AGENCY BY MAKING
AN INDEPENDENT DETERMINATION. JOHN M. COCKERHAM & ASSOCIATES, INC.;
DECISION PLANNING CORPORATION, B-193124, MARCH 14, 1979, 79-1 CPD 180.
A REVIEW OF THE RECORD INDICATES THAT THE EVALUATION WAS CONDUCTED IN
ACCORDANCE WITH THE STATED CRITERIA IN THE SOLICITATION, AND THAT
INDUSTRIAL WAS SCORED LOWER THAN OTHER OFFERORS AND PROPOSED OTHER THAN
THE LOW PRICE.
ACCORDINGLY, THE PROTEST IS DISMISSED IN PART AND DENIED IN PART.
B-194574.6, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
BECAUSE REQUEST FOR RECONSIDERATION SPECIFIES NO ERRORS OF LAW OR
INFORMATION NOT PREVIOUSLY CONSIDERED AND SINCE COURT ACTION WILL
CONSTITUTE FINAL ADJUDICATION OF ISSUES RAISED, GAO DENIES REQUEST TO
AMEND PRIOR DISMISSAL AND TO HOLD PROTESTS IN ABEYANCE UNTIL FINAL COURT
ACTION.
SEAFARERS, ET AL. - RECONSIDERATION:
THE FOUR NAMED PARTIES IN THE MATTER OF SEAFARERS INTERNATIONAL UNION
OF NORTH AMERICA; COVE SHIPPING, INC.,; HUDSON WATERWAYS CORPORATION;
ZAPATA TANKSHIPS, INC. (SEAFARERS, ET AL.), B-194574.2; B-194574.3;
B-194574.4; B-194574.5, JUNE 21, 1979, 79-1 CPD ___, HAVE REQUESTED
RECONSIDERATION OF THAT DECISION. WE DISMISSED THE PROTEST BECAUSE THE
BASES THEREFOR ARE IN LITIGATION BEFORE THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA AND THE COURT, IN DENYING PLAINTIFFS'
MOTION FOR A PRELIMINARY INJUNCTION, DID NOT INDICATE ANY INTEREST IN
OBTAINING OUR DECISION. THIS ACTION WAS TAKEN IN ACCORDANCE WITH OUR
BID PROTEST PROCEDURES, 4 C.F.R. SEC. 20.10 (1979).
THE PARTIES NOW ASK THAT WE AMEND OUR DECISION TO HOLD THE PROTESTS
IN ABEYANCE UNTIL A FINAL COURT DECISION IS RENDERED IN THESE MATTERS.
HOWEVER, THE REQUEST FOR RECONSIDERATION SPECIFIES NO ERRORS OF LAW OR
INFORMATION NOT PREVIOUSLY CONSIDERED. MOREOVER, WE SEE NO REASON TO
GRANT THE REQUEST BECAUSE A FINAL COURT ACTION HERE WOULD TAKE
PRECEDENCE OVER ANY ACTION BY THIS OFFICE, BARRING US FROM FURTHER
CONSIDERATION. SEE PULLMAN STANDARD, INC. - RECONSIDERATION, B-190254,
JANUARY 11, 1978, 78-1 CPD 22.
THEREFORE, THE REQUEST FOR RECONSIDERATION IS DENIED.
B-194961, JUL 23, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. CLAIM FOR REFUND OF COSTS RECOVERED BY AIR FORCE FOR EXCESS
WEIGHT OF HOUSEHOLD GOODS SHIPPED IN CONNECTION WITH PERMANENT CHANGE OF
STATION MAY NOT BE ALLOWED IN ABSENCE OF EVIDENCE SHOWING AGENCY
DETERMINATION TO BE CLEARLY IN ERROR.
2. QUESTION WHETHER AND TO WHAT EXTENT AUTHORIZED WEIGHTS HAVE BEEN
EXCEEDED IN SHIPMENT OF HOUSEHOLD EFFECTS BY MEMBERS OF THE UNIFORMED
SERVICES IS CONSIDERED TO BE MATTER PRIMARILY FOR ADMINISTRATIVE
DETERMINATION AND ORDINARILY WILL NOT BE QUESTIONED IN ABSENCE OF
EVIDENCE SHOWING IT TO BE CLEARLY IN ERROR.
WOODROW F. BELLAMY:
WOODROW F. BELLAMY, MSGT., USAF, REQUESTS REVIEW OF THE SETTLEMENT OF
OUR CLAIMS DIVISION DENYING A CLAIM FOR REFUND OF $415.07 RECOVERED BY
THE AIR FORCE FOR EXCESS COSTS ASSOCIATED WITH THE SHIPMENT OF MEMBER'S
HOUSEHOLD GOODS UPON PERMANENT CHANGE OF STATION FROM MACDILL AIR FORCE
BASE, FLORIDA (MACDILL).
PURSUANT TO PERMANENT CHANGE OF STATION ORDERS SGT. BELLAMY'S
HOUSEHOLD GOODS WERE PICKED UP ON JUNE 25, 1974, AND ONE LOT, SHOWN ON
THE BILL OF LADING AS WEIGHING 7,700 POUNDS, WAS TRANSPORTED FROM
MACDILL TO AVIANO AIR BASE, ITALY, UNDER GOVERNMENT BILL OF LADING (GBL)
NO. K-5518163. A SECOND SHIPMENT, WEIGHING 2,500 POUNDS, WAS
TRANSPORTED FROM MACDILL TO SWEETWATER, TENNESSEE, UNDER GBL NO.
K-5518143, DATED JUNE 19, 1974. HE WAS AUTHORIZED TO SHIP 8,500 POUNDS
ON SPECIAL ORDER AA-3031, DATED JUNE 4, 1974. THE TWO SHIPMENTS
EXCEEDED HIS AUTHORIZED WEIGHT ALLOWANCE AND HE WAS CHARGED EXCESS COSTS
OF $415.07 FOR AN ADJUSTED EXCESS WEIGHT OF 756 POUNDS.
SGT. BELLAMY ALLEGES THAT WHEN THE PLASTIC-LINED SHIPPING CRATE,
WHICH WAS SUPPOSEDLY WATERPROOF AND CONTAINED FIVE CARPETS, WAS OPENED
AT DESTINATION IN ITALY WATER POURED OUT OF THE CRATE. WHEN THE GOODS
WERE PICKED UP AT HIS RESIDENCE THEY WERE TRANSPORTED TO THE CARRIER'S
WAREHOUSE FOR CRATING THE FOLLOWING DAY. ON THE FOLLOWING DAY, JUNE 26,
10.74 INCHES OF RAIN FELL IN MACDILL AS EVIDENCED BY A STATEMENT OF THE
USAF CHIEF FORECASTER USED WITH HIS CLAIM FOR DAMAGE IN TRANSIT. SGT.
BELLAMY CHALLENGES THE WEIGHT SHOWN ON THE GBL ALLEGING THAT EITHER THE
CRATE WAS FULL OF WATER WHEN THE CARPETS WERE PACKED OR THAT THE CARPETS
WERE IN THE CRATE WITH THE TOP OFF WHILE IT WAS RAINING AND THAT "IT IS
OBVIOUS THAT THE CRATE HAD NOT BEEN SEALED WHICH MEANS IT HAD NOT BEEN
WEIGHED BEFORE THE WATER WAS ALLOWED TO ENTER." THE EXCESS WEIGHT IS
THEREFORE ALLEGED TO HAVE BEEN RAINWATER IN THE CRATE.
A REWEIGH WAS NOT REQUESTED AT DESTINATION BECAUSE THE CARRIER'S
WEIGHT ESTIMATE OF 7,900 POUNDS TOTAL WAS CONSIDERABLY LESS THAN THE
MEMBER'S AUTHORIZED WEIGHT, AND THE AIR FORCE DID NOT NOTIFY SGT.
BELLAMY OF THE EXCESS WEIGHT UNTIL 18 MONTHS AFTER SHIPMENT.
SECTION 406 OF TITLE 37, UNITED STATES CODE, PROVIDES FOR THE
TRANSPORTATION OF HOUSEHOLD EFFECTS OF MEMBERS OF THE UNIFORMED SERVICES
TO AND FROM SUCH PLACES AND WITHIN SUCH WEIGHT ALLOWANCES AS MAY BE
PRESCRIBED BY THE SECRETARIES CONCERNED. IMPLEMENTING REGULATIONS
PUBLISHED IN CHAPTER 8, VOLUME 1 OF THE JOINT TRAVEL REGULATIONS,
PROVIDE THAT HOUSEHOLD GOODS OF MEMBERS MAY BE TRANSPORTED AT GOVERNMENT
EXPENSE WITHIN PRESCRIBED WEIGHT ALLOWANCES, AND THAT ANY EXCESS WEIGHT
WILL BE TRANSPORTED AT THE OWNER'S EXPENSE.
THE QUESTION OF WHETHER AND TO WHAT EXTENT AUTHORIZED WEIGHTS HAVE
BEEN EXCEEDED BY THE SHIPMENT OF HOUSEHOLD EFFECTS IS CONSIDERED TO BE A
MATTER PRIMARILY FOR ADMINISTRATIVE DETERMINATION AND ORDINARILY WILL
NOT BE QUESTIONED IN THE ABSENCE OF EVIDENCE SHOWING IT TO BE CLEARLY IN
ERROR. SEE B-192618, NOVEMBER 9, 1978; B-190541, NOVEMBER 28, 1977,
AND B-189388, AUGUST 23, 1977.
THE SUGGESTION BY SGT. BELLAMY THAT RAINWATER ENTERED THE PACKAGE AT
THE TIME OF THE PACKING OF THE HOUSEHOLD EFFECTS AND WAS PRESENT IN THE
PACKING AT THE TIME OF WEIGHING, THEREBY ACCOUNTING FOR THE EXCESS
WEIGHT, IS UNSUPPORTED BY ANY SUBSTANTIAL EVIDENCE. CONSEQUENTLY, HE
MAY NOT BE RELIEVED OF LIABILITY FOR THE EXCESS SHIPPING COSTS.
THE DISALLOWANCE OF THE CLAIM IS SUSTAINED.
B-193745, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE IFB REQUIRES BIDDER TO FURNISH LETTER WITH BID EXPLAINING ANY
MODIFICATION OF BIDDER'S STANDARD MODEL, AND WHERE BID WITHOUT LETTER
OFFERS MODEL HAVING PARAMETERS DIFFERENT FROM PARAMETERS OF SAME MODEL
PREVIOUSLY FURNISHED, BID IS RESPONSIVE, SINCE MODEL PROPOSED IS WITHIN
SCOPE OF IFB'S DEFINITION OF STANDARD COMMERCIAL PRODUCT BECAUSE
BIDDER'S LITERATURE SHOWS THAT SOME PARAMETER FLEXIBILITY IS INHERENT IN
NATURE OF STANDARD MODEL.
MATHEWSON CORPORATION:
MATHEWSON CORPORATION, M&T HARBORMASTER DIVISION (M&T), PROTESTS THE
NAVY'S PROPOSED AWARD OF A CONTRACT TO MARITIME INDUSTRIES LTD.
(MARITIME), UNDER INVITATION FOR BIDS (IFB) N00123-79-B-0480 ISSUED BY
THE NAVAL REGIONAL CONTRACTING OFFICE (NRCO), LONG BEACH, CALIFORNIA.
M&T PROTESTS ON THE SINGLE GROUND THAT MARITIME'S BID IS NONRESPONSIVE
BECAUSE MARITIME FAILED TO ENCLOSE, WITH ITS BID, A LETTER EXPLAINING
ALTERATIONS WHICH IT WOULD MAKE IN ITS STANDARD MODEL L-295 OVERSTERN
PROPULSION UNIT (L-295).
THE IFB SOUGHT: (1) FOUR 4,500 POUND THRUST, DIESEL PROPULSION
UNITS; (2) A 1-YEAR COMMERCIAL WARRANTY; AND (3) TECHNICAL DATA IN
ACCORDANCE WITH MILITARY SPECIFICATION (MILSPEC) MIL-P-15916E AS AMENDED
BY SECTION "F" OF THE IFB. THE PROPULSION UNITS ARE EXTREMELY LARGE
DIESEL-DRIVEN OUTBOARD ENGINES USED IN MOVING OTHERWISE NONPROPELLED
FLOATING EQUIPMENT, SUCH AS PONTOONS AND BARGES.
AT BID OPENING, THE FOLLOWING BIDS WERE RECEIVED:
BIDDER TOTAL PRICE
(LESS TRANSPORTATION)
MARITIME $300,740
M&T 380,079
SCHOTTEL OF AMERICA, INC. 516,960
THE NAVY REPORTS THAT THE THREE BIDDERS ARE THE ONLY KNOWN SUPPLIERS
OF THE PROPULSION UNITS AND HAVE COLLECTIVELY MET THE NAVY'S
REQUIREMENTS FOR MANY YEARS.
THE PRESENT CONTROVERSY CENTERS ABOUT THE MEANING TO BE ASCRIBED TO
THE FOLLOWING IFB AND MILSPEC PROVISIONS:
"(IFB)
"COMPLIANCE WITH SPECIFICATIONS
"IT IS THE RESPONSIBILITY OF THE BIDDER/OFFEROR TO DETERMINE WHETHER
THE SUPPLIES PROPOSED TO BE FURNISHED UNDER THIS SOLICITATION CONFORM TO
ALL THE REQUIRED SPECIFICATIONS. ACCORDINGLY, THE BIDDER/OFFEROR
WARRANTS THAT THE DESIGNATED ITEMS CONFORMS TO ALL THE SPECIFICATIONS
CONTAINED HEREIN, UNLESS IT IS SPECIFICALLY STATED IN THE BID/PROPOSAL
WHEREIN THE OFFERED ARTICLE DIFFERS FROM THE SPECIFICATIONS.
"NOTE: AWARD WILL BE MADE ON A FIXED PRICE SUPPLY CONTRACT FOR ONLY
A STANDARD MODEL OR A STANDARD MODEL WITH MODIFICATIONS, WHICH MUST BE
EXPLAINED IN DETAIL IN A LETTER SUBMITTED WITH THE BID. THIS IS NOT TO
BE A DESIGN OR DEVELOPMENT EFFORT."
"(MISPEC)
"3.3 STANDARD COMMERCIAL PRODUCT. THE PROPELLING UNIT SHALL, AS A
MINIMUM, BE IN ACCORDANCE WITH THE REQUIREMENTS OF THIS SPECIFICATION
AND SHALL BE THE MANUFACTURER'S STANDARD COMMERCIAL PRODUCT WITH ANY
ADDED FEATURES NEEDED TO COMPLY WITH THE REQUIREMENTS. ADDITIONAL OR
BETTER FEATURES WHICH ARE NOT SPECIFICALLY PROHIBITED BY THIS
SPECIFICATION, BUT WHICH ARE A PART OF THE MANUFACTURER'S STANDARD
COMMERCIAL PRODUCT, SHALL BE INCLUDED IN THE PROPELLING UNIT BEING
FURNISHED. STANDARD COMMERCIAL PRODUCT IS A PRODUCT WHICH HAS BEEN OR
WILL BE SOLD ON THE COMMERCIAL MARKET THROUGH ADVERTISEMENTS OR
MANUFACTURER'S CATALOGS, OR BROCHURES, AND REPRESENTS THE LATEST
PRODUCTION MODELS."
IN ITS LETTER OF APRIL 30, 1979, MARITIME STATED THAT THE L-295 WAS
THE SAME AS PREVIOUSLY SUPPLIED THE NAVY, IN 1976-77, WITH THE EXCEPTION
OF SMALLER ENGINES, CLUTCHES AND PROPELLERS, AND A WIDTH REDUCTION "FROM
ITS PRESENT 69 INS. TO 63 INS." MARITIME GENERALLY CONTENDS THAT IN ITS
INDUSTRY IT IS "MEANINGLESS TO TALK OF ANY PARTICULAR SUPPLIED VERSION
OF ANY MODEL AS 'STANDARD'" PRINCIPALLY BECAUSE EACH UNIT IS IN SOME WAY
CUSTOMIZED TO FIT EACH CUSTOMER'S PARTICULAR REQUIREMENTS. FOR EXAMPLE,
MARITIME REPORTS THAT OVER THE PAST 10 YEARS IT HAS SOLD L-295 UNITS
WITH CATERPILLAR, CUMMINS, DORMAN AND GENERAL MOTORS DIESEL ENGINES. IT
HAS SOLD L-295 UNITS WHICH ARE 74 INCHES WIDE AS WELL AS UNITS WHICH ARE
69 INCHES WIDE. WITHOUT ALTERING THE BASIC DESIGN PRINCIPLES OF THE
L-295, MARITIME STATES THAT IT CAN REDUCE THE UNIT'S WIDTH DOWN TO 59
INCHES.
M&T, ON THE OTHER HAND, ARGUES THAT THE REDUCTION FROM THE PREVIOUSLY
SUPPLIED 69 INCHES TO 63 INCHES CONSTITUTES A MODIFICATION OF THE L-295
AND THAT A DETAILED DESCRIPTION OF SUCH A MODIFICATION HAD TO ACCOMPANY
MARITIME'S BID IN ORDER FOR THE BID TO BE RESPONSIVE.
WE DO NOT AGREE. SINCE MARITIME'S BID NEITHER LIMITED, REDUCED NOR
MODIFIED ITS OBLIGATION TO PERFORM, IT MUST BE CONSIDERED RESPONSIVE.
53 COMP. GEN. 396 (1973).
FURTHERMORE, WE BELIEVE THAT SECTION "F" OF THE IFB (DESCRIPTION AND
SPECIFICATIONS), TOGETHER WITH THE FIRST PARAGRAPH OF THE IFB'S
"COMPLIANCE WITH SPECIFICATIONS" REQUIREMENT, SET OUT ABOVE, CLEARLY
INCORPORATE BY REFERENCE THE MILSPEC'S REQUIREMENT FOR A STANDARD
COMMERCIAL PRODUCT WHICH IS ALSO SET OUT ABOVE. IN OUR OPINION, THAT
REQUIREMENT, WHICH PERMITS INCLUSION OF "ADDITIONAL OR BETTER FEATURES
WHICH ARE NOT SPECIFICALLY PROHIBITED BY *** THE SPECIFICATION, BUT
WHICH ARE A PART OF THE MANUFACTURER'S STANDARD COMMERCIAL PRODUCT," IS
SUFFICIENTLY BROAD TO ENCOMPASS THE ALTERATION IN THE WIDTH OF THE
UNITS. MOREOVER, MARITIME'S DESCRIPTIVE LITERATURE IS CONSISTENT WITH
ITS CLAIM THAT SOME DEGREE OF PARAMETER FLEXIBILITY IS INHERENT IN THE
NATURE OF ITS STANDARD MODEL: FOR EXAMPLE, THE HORSEPOWER RANGE IS
DESCRIBED AS BEING "UP TO 364 HP AT 1800 RPM;" PROPELLER DIAMETER IS "TO
44 IN./112CM"; MAXIMUM LEG LENGTHS ARE SPECIFIED; MAXIMUM LEG LIFT IS
SPECIFIED; MAXIMUM STEERING ROTATION RATES ARE SPECIFIED; APPROXIMATE
WEIGHT (INCLUDING THE ENGINE) IS SPECIFIED. ONE SHEET OF THE
DESCRIPTIVE LITERATURE SETS OUT PRICIPAL DIMENSIONS. ON THAT SHEET THE
WIDTH IS DESCRIBED AT "68-1/2"MAX." THESE PARAMETERS STATE THE OUTSIDE
LIMITS OF THE L-295. THEY DO NOT SPECIFY EXACT ABSOLUTES WHICH ARE
SIMULTANEOUSLY THE MINIMUM AND THE MAXIMUM. IN VIEW OF THE ABOVE, WE
BELIEVE THAT A 63-INCH-WIDE L-295 IS MARITIME'S STANDARD MODEL WITHIN
MEANING OF THE SPECIFICATIONS.
SINCE A 63-INCH-WIDE L-295 IS MARITIME'S STANDARD MODEL, MARITIME WAS
NOT OFFERING A "STANDARD MODEL WITH MODIFICATIONS" AS THAT TERM IS USED
IN THE IFB. CONSEQUENTLY, THERE IS NO BASIS UPON WHICH WE CAN OBJECT TO
THE NAVY'S PROPOSED AWARD TO MARITIME.
ACCORDINGLY, THE PROTEST IS DENIED.
B-193831, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. EMPLOYEE WHO RECEIVED ERRONEOUS OVERPAYMENTS FROM JANUARY 1969 TO
MARCH 1977 WHEN INSURANCE PREMIUMS WERE NOT DEDUCTED FROM HIS PAY FOR
FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) COVERAGE, MAY BE GRANTED
A PARTIAL WAIVER OF THE GOVERNMENT'S RESULTING CLAIM AGAINST HIM FOR THE
OVERPAYMENTS HE RECEIVED PRIOR TO AUGUST 1973, SINCE UNTIL THEN HE HAD
NO REASON TO SUSPECT HE HAD THE INSURANCE COVERAGE. HOWEVER, WHEN HE
WAS NOTIFIED IN AUGUST 1973 THAT HE HAD FEGLI COVERAGE, HE TOOK NO
CORRECTIVE ACTION, AND THIS FAULT ON HIS PART BARS WAIVER OF THE
OVERPAYMENTS HE RECEIVED THEREAFTER.
2. CLAIM OF THE GOVERNMENT AGAINST AN EMPLOYEE ARISING OUT OF
OVERPAYMENTS HE RECEIVED WHEN FEDERAL GROUP LIFE INSURANCE (FEGLI)
PREMIUMS WERE NOT DEDUCTED FROM HIS PAY, MAY NOT BE WAIVED ON THE BASIS
OF THE EMPLOYEE'S CONTENTIONS THAT HE DID NOT WANT FEGLI COVERAGE AND
RECEIVED NO BENEFITS FROM IT. HIS BENEFICIARY WOULD HAVE BEEN PAID THE
LIFE INSURANCE HAD HE DIED DURING THE PERIOD OF FEGLI COVERAGE, AND
THEREFORE IT IS NOT INEQUITABLE TO REQUIRE HIM TO PAY FOR THE INSURANCE
PROTECTION PROVIDED.
JACK A. SHEPHERD - WAIVER - NONDEDUCTION OF INSURANCE PREMIUMS:
MR. JACK A. SHEPHERD, SSN 000-00-4377, REQUESTS RECONSIDERATION OF
THE ACTION TAKEN BY OUR CLAIMS DIVISION ON JUNE 28, 1978, GRANTING ONLY
PARTIAL WAIVER OF THE GOVERNMENT'S CLAIM AGAINST HIM ARISING OUT OF
ERRONEOUS OVERPAYMENTS OF WAGES HE RECEIVED BETWEEN JANUARY 1969 AND
MARCH 1977, INCIDENT TO HIS EMPLOYMENT AS A NATIONAL GUARD TECHNICIAN.
IN VIEW OF THE APPLICABLE PROVISIONS OF LAW AND REGULATION WE SUSTAIN
THE CLAIMS DIVISION ACTION.
IT APPEARS THAT IN DECEMBER 1968 MR. SHEPHERD WAS EMPLOYED AS A
TECHNICIAN AT GENERAL MITCHELL AIR NATIONAL GUARD BASE, MILWAUKEE,
WISCONSIN, AND HIS STATUS WAS THAT OF A WISCONSIN STATE EMPLOYEE.
PURSUANT TO THE NATIONAL GUARD TECHNICIANS ACT OF 1968, PUBLIC LAW
90-486, APPROVED AUGUST 13, 1968, 82 STAT. 755, HIS STATUS WAS CHANGED
TO THAT OF A FEDERAL EMPLOYEE EFFECTIVE JANUARY 1, 1969. AT THAT TIME A
UNITED STATES CIVIL SERVICE COMMISSION STANDARD FORM 50, "NOTIFICATION
OF PERSONNEL ACTION," WAS ISSUED ANNOUNCING HIS APPOINTMENT TO THE
FEDERAL POSITION OF AIRCRAFT MAINTENANCE TECHNICIAN, GRADE WB-12, STEP
3.
MR. SHEPHERD BECAME ELIGIBLE FOR FEDERAL EMPLOYEES GROUP LIFE
INSURANCE (FEGLI) AS THE RESULT OF HIS CONVERSION TO FEDERAL STATUS, AND
ITEM 9 OF THE INITIAL STANDARD FORM 50 SHOWED THAT HE HAD FEGLI
COVERAGE. MR. SHEPHERD STATES THAT HE INITIALLY INDICATED IN WRITING
THAT HE WISHED TO HAVE SUCH INSURANCE COVERAGE, BUT HE THEN CHANGED HIS
MIND AND TOLD HIS SUPERVISOR THAT HE WANTED TO CANCEL HIS COVERAGE. HE
ASSUMED THAT THE SUPERVISOR WOULD TAKE CARE OF THE MATTER, AND THERE IS
SOME INDICATION THAT A NEW ELECTION FORM WAS THEN PREPARED. HOWEVER,
HIS DESIRE TO CANCEL HIS COVERAGE WAS NOT COMMUNICATED TO THE
RESPONSIBLE TECHNICIAN PERSONNEL OFFICE LOCATED IN MADISON, WISCONSIN,
AND FEGLI COVERAGE WAS CONTINUED FOR HIM IN ACCORDANCE WITH HIS INITIAL
WRITTEN ELECTION. NEVERTHELESS, THE LOCAL CIVILIAN PAYROLL CLERK IN
MILWAUKEE, WHO WAS APPARENTLY AWARE OF MR. SHEPHERD'S ATTEMPT TO CANCEL
THE INSURANCE COVERAGE, DID NOT DEDUCT THE FEGLI PREMIUMS FROM HIS
WAGES. THUS, MR. SHEPHERD RECEIVED THE LIFE INSURANCE COVERAGE WITHOUT
PAYING THE REQUIRED PREMIUMS.
EFFECTIVE AUGUST 5, 1973, MR. SHEPHERD WAS REASSIGNED TO THE POSITION
OF AIRCRAFT MECHANIC (CREW CHIEF), GRADE WG-12, STEP 4. ON AUGUST 2,
1973, A NEW STANDARD FORM 50 WAS ISSUED TO DOCUMENT THIS POSITION
REASSIGNMENT. ITEM 9 OF THE FORM SHOWED THAT HE STILL HAD FEGLI
COVERAGE. ALTHOUGH MR. SHEPHERD WAS GIVEN A COPY OF THE FORM, HE LATER
STATED THAT HE DID NOT PAY ANY SPECIAL ATTENTION TO IT, AND HE TOOK NO
CORRECTIVE ACTION.
THE ERROR WAS NOT DISCOVERED BY ACCOUNTING AND FINANCE OFFICIALS
UNTIL MARCH 3, 1977. IT WAS THEN DETERMINED THAT BECAUSE MR. SHEPHERD
HAD RECEIVED FEGLI COVERAGE BETWEEN JANUARY 1969 AND MARCH 1977 WITHOUT
ANY PREMIUMS BEING DEDUCTED FROM HIS WAGES, HE HAD BEEN ERRONEOUSLY
OVERPAID IN THE TOTAL AMOUNT OF $960.11.
AFTER HE WAS NOTIFIED OF THE GOVERNMENT'S $960.11 CLAIM AGAINST HIM,
MR. SHEPHERD APPLIED FOR A WAIVER OF THAT CLAIM. HE STATED THAT HE HAD
NOT WANTED THE FEGLI COVERAGE, AND HE CERTIFIED THAT HE WAS NOT AWARE OF
THE FACT THAT HE WAS BEING OVERPAID BETWEEN JANUARY 1969 AND MARCH 1977.
THE AIR FORCE ACCOUNTING AND FINANCE CENTER SUBSEQUENTLY FORWARDED MR.
SHEPHERD'S WAIVER REQUEST TO OUR CLAIMS DIVISION FOR CONSIDERATION.
AS PREVIOUSLY INDICATED, OUR CLAIMS DIVISION GRANTED ONLY A PARTIAL
WAIVER. IN SUBSTANCE, IT WAS CONCLUDED THAT IN THE CIRCUMSTANCES MR.
SHEPHERD MIGHT HAVE HAD NO REASON TO KNOW HE WAS BEING OVERPAID BETWEEN
JANUARY 1, 1969, AND THE PAY PERIOD ENDING JULY 21, 1973, AND WAIVER WAS
GRANTED AS TO THE GOVERNMENT'S CLAIM AGAINST HIM FOR THE ERRONEOUS
PAYMENTS HE RECEIVED DURING THAT PERIOD, AN AMOUNT TOTALLING $430.12.
HOWEVER, WAIVER WAS DENIED AS TO THE BALANCE OF THE OVERPAYMENTS,
TOTALLING $529.99, WHICH WERE MADE FROM AND AFTER THE PAY PERIOD ENDING
AUGUST 4, 1973. THE DENIAL WAS BASED ON THE FACT THAT MR. SHEPHERD HAD
BEEN NOTIFIED BY THE STANDARD FORM 50 ISSUED ON AUGUST 2, 1973, THAT HE
HAD FEGLI COVERAGE. IT WAS CONCLUDED THAT HIS FAILURE TO TAKE
CORRECTIVE ACTION AT THAT TIME PLACED HIM IN THE POSITION OF BEING AT
LEAST PARTIALLY AT FAULT IN THE MATTER, SO THAT WAIVER OF THE BALANCE
WAS UNWARRANTED.
IN REQUESTING RECONSIDERATION, MR. SHEPHERD HAS EXPRESSED THE BELIEF
THAT HE SHOULD PROPERLY HAVE BEEN GRANTED A WAIVER OF THE TOTAL AMOUNT
OF THE CLAIM AGAINST HIM. IN SUBSTANCE, HE POINTS OUT THAT HE IS
INEXPERIENCED IN PERSONNEL MATTERS, AND HE SAYS HE THOUGHT THE PURPOSE
OF THE STANDARD FORM 50 ISSUED IN AUGUST 1973 WAS SOLELY TO EFFECT A
POSITION CHANGE. HE SUGGESTS THAT HE THEREFORE HAD NO REASON TO PAY ANY
PARTICULAR ATTENTION TO ALL OF THE ENTRIES ON THAT FORM. HE CONTENDS
THAT THE ERROR COULD NOT HAVE BEEN DETECTED BY AN EXAMINATION OF THE
INFORMATION CONTAINED IN HIS REGULAR LEAVE AND EARNINGS STATEMENTS, AND
HE ASSERTS HE SHOULD NOT BE CHARGED WITH NOTICE OF THE ERROR RELATING TO
THE INSURANCE PREMIUMS SOLELY ON THE BASIS OF THE AUGUST 2, 1973
STANDARD FORM 50 RELATING TO A POSITION CHANGE. IN ADDITION, HE SAYS HE
DID NOT WANT THE INSURANCE COVERAGE AND RECEIVED NO BENEFIT FROM IT.
FURTHER, HE STATES THAT HE IS A LOYAL AND DEDICATED EMPLOYEE, HAS NEVER
BEFORE BEEN SUBJECTED TO COLLECTION ACTION, AND HAS ACTED IN GOOD FAITH
IN THE MATTER. AN INDORSEMENT SUBMITTED BY AIR NATIONAL GUARD
AUTHORITIES INDICATES THAT MR. SHEPHERD IS AN OUTSTANDING EMPLOYEE. THE
OPINION IS ALSO EXPRESSED THAT MR. SHEPHERD, LIKE THE VAST MAJORITY OF
PERSONNEL EMPLOYED IN MAINTENANCE POSITIONS, COULD NOT REASONABLY BE
EXPECTED TO HAVE MUCH INTEREST OR EXPERIENCE IN ADMINISTRATIVE MATTERS.
IT IS SUGGESTED THAT MR. SHEPHERD SHOULD NOT HAVE BEEN EXPECTED TO KNOW
OF THE ERROR UNTIL IT WAS EVENTUALLY DISCOVERED IN MARCH 1977 BY THOSE
HAVING EXPERTISE IN SUCH MATTERS, AND THAT A COMPLETE WAIVER OF THE
GOVERNMENT'S CLAIM WOULD THEREFORE BE APPROPRIATE.
THE AUTHORITY FOR THE WAIVER OF CLAIMS FOR OVERPAYMENTS TO FEDERAL
EMPLOYEES OF PAY AND ALLOWANCES OF MORE THAN $500 IS CONTAINED IN 5
U.S.C. SEC. 5584 (1976). THAT SECTION PROVIDES THAT WHERE COLLECTION OF
SUCH A CLAIM WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE
BEST INTERESTS OF THE UNITED STATES, IT MAY BE WAIVED IN WHOLE OR IN
PART BY THE COMPTROLLER GENERAL OF THE UNITED STATES UNLESS:
"*** IN HIS OPINION, THERE EXISTS IN CONNECTION WITH THE CLAIM, AN
INDICATION OF FRAUD, MISREPRESENTATION; FAULT, OR LACK OF GOOD FAITH ON
THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING A WAIVER OF THE CLAIM ***"
"FAULT," AS USED IN THIS STATUTORY PROVISION AND A SIMILAR WAIVER LAW
APPLICABLE TO MEMBERS OF THE UNIFORMED SERVICES, IS CONSIDERED TO EXIST
IF IT IS DETERMINED THAT THE CONCERNED INDIVIDUAL SHOULD HAVE KNOWN THAT
AN ERROR EXISTED BUT FAILED TO TAKE ACTION TO HAVE IT CORRECTED. SEE 4
C.F.R. SEC. 91.5 (1978); AND 56 COMP. GEN. 943 (1977). IF AN EMPLOYEE
HAS RECORDS WHICH, IF REVIEWED, WOULD INDICATE AN OVERPAYMENT, AND THE
EMPLOYEE FAILS TO REVIEW SUCH DOCUMENTS FOR ACCURACY OR OTHERWISE FAILS
TO TAKE CORRECTIVE ACTION HE IS NOT WITHOUT FAULT AND WAIVER WILL BE
DENIED. SEE MATTER OF ARTHUR WEINER, B-184480, MAY 20, 1976; AND
MATTER OF JOHN J. DOYLE, B-191295, JULY 7, 1978. THUS, IF AN EMPLOYEE
IS GIVEN A STANDARD FORM 50 SHOWING HE HAS FEGLI COVERAGE BUT HIS
REGULAR LEAVE AND EARNINGS STATEMENTS SHOW THAT THE NECESSARY INSURANCE
PREMIUM DEDUCTIONS ARE NOT BEING MADE, THE EMPLOYEE HAS NOTICE OF AN
ERROR AND IS ORDINARILY CONSIDERED TO BE AT LEAST PARTIALLY AT FAULT IN
THE MATTER IF HE FAILS TO TAKE CORRECTIVE ACTION. DOYLE, SUPRA.
IN THE PRESENT CASE, IT APPEARS THAT IN JANUARY 1969 MR. SHEPHERD WAS
FURNISHED A COPY OF HIS STANDARD FORM 50 SHOWING THAT HE HAD FEGLI
COVERAGE, BUT THE LEAVE AND EARNINGS STATEMENTS HE SUBSEQUENTLY RECEIVED
SHOWED THAT NO INSURANCE PREMIUMS WERE BEING DEDUCTED FROM HIS WAGES.
NEVERTHELESS, IN VIEW OF HIS RELATIVE INEXPERIENCE IN PERSONNEL MATTERS
AND HIS STATEMENT THAT HE THOUGHT THE INSURANCE COVERAGE WOULD BE
CANCELED ON THE BASIS OF HIS CONVERSATION WITH HIS SUPERVISOR, WE
CONCLUDE THAT HE MIGHT NOT REASONABLY HAVE BEEN EXPECTED TO NOTICE THE
ERROR AT THAT TIME.
HOWEVER, WHEN A NEW STANDARD FORM 50 WAS ISSUED ON AUGUST 2, 1973,
SHOWING THAT HE STILL HAD FEGLI COVERAGE, HE WAS THEN PROVIDED WITH
DEFINITE WRITTEN NOTICE OF AN ERROR IN HIS PERSONNEL AND PAY RECORDS.
WITH RESPECT TO THE SUGGESTION MADE THAT HE HAD NO REASON TO EXAMINE
THAT FORM, WE MUST POINT OUT THAT EVERY FEDERAL EMPLOYEE, REGARDLESS OF
HIS EXPERIENCE, INTERESTS, OR WORK SPECIALTY, HAS A DUTY TO EXAMINE HIS
OWN PERSONNEL AND PAY RECORDS WHEN THEY ARE FURNISHED TO HIM, AND TO
ASCERTAIN WHETHER ALL OF THE ENTRIES ARE CORRECT. THEREFORE, WE HAVE NO
ALTERNATIVE BUT TO CONCLUDE THAT MR. SHEPHERD'S FAILURE TO EXAMINE THE
AUGUST 2, 1973 STANDARD FORM 50 AND TO TAKE CORRECTIVE ACTION AT THAT
POINT PLACED HIM IN THE POSITION OF BEING AT LEAST PARTIALLY AT FAULT IN
THE MATTER.
WITH REGARD TO MR. SHEPHERD'S SUGGESTION THAT HE DID NOT WANT FEGLI
COVERAGE, RECEIVED NO BENEFIT FROM IT, AND SHOULD THEREFORE HAVE NO
OBLIGATION TO PAY FOR IT, WE NOTE THAT HIS BENEFICIARY WOULD HAVE BEEN
PAID THE LIFE INSURANCE HAD HE DIED DURING THE PERIOD AFTER HE ELECTED
COVERAGE EVEN THOUGH NO PREMIUM PAYMENTS WERE DEDUCTED FROM HIS WAGES.
WE DO NOT BELIEVE IT IS AGAINST EQUITY AND GOOD CONSCIENCE TO REQUIRE
HIM TO PAY FOR THE LIFE INSURANCE PROTECTION PROVIDED. COMPARE MATTER
OF PHILLIP M. ROBINSON, B-190175, SEPTEMBER 27, 1978.
FINALLY, WITH RESPECT TO THE COMMENTS SUBMITTED INDICATING THAT MR.
SHEPHERD IS AN HONEST, DEDICATED, LOYAL EMPLOYEE, WE WISH TO EMPHASIZE
THAT THERE IS NO INDICATION OF ANY FRAUD, MISREPRESENTATION OR BAD FAITH
ON HIS PART IN THIS MATTER. HOWEVER, AS PREVIOUSLY INDICATED, HE HAD A
DUTY TO EXAMINE THE STANDARD FORM 50 THAT WAS FURNISHED TO HIM ON AUGUST
2, 1973, AND TO CHECK ALL OF THE ENTRIES FOR ACCURACY. HIS "FAULT" IN
NOT PERFORMING THAT DUTY BARS WAIVER OF THE GOVERNMENT'S CLAIM FOR
RECOUPMENT OF THE OVERPAYMENTS HE RECEIVED AFTER THAT DATE.
ACCORDINGLY, WE SUSTAIN THE ACTION TAKEN BY OUR CLAIMS DIVISION IN
GRANTING WAIVER OF THE GOVERNMENT'S $960.11 CLAIM AGAINST MR. SHEPHERD
IN THE PARTIAL AMOUNT OF $430.12, BUT DENYING WAIVER AS TO THE BALANCE
OF $529.99.
B-193883, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. AWARD OF INDEFINITE QUANTITIES CONTRACT FOR ENGINEERING SERVICES
TO FIRM OFFERING LOWER EVALUATED PRICE WAS PROPER NOTWITHSTANDING
PROTESTER'S HIGHER INITIALLY EVALUATED TECHNICAL SCORE SINCE SELECTION
OFFICIAL DETERMINED THAT HIGHER SCORE DID NOT REFLECT SIGNIFICANT
DIFFERENCE IN TECHNICAL MERIT AND DID NOT WARRANT ACCEPTANCE OF HIGHER
SCORED PROPOSAL IN VIEW OF HIGHER COST ASSOCIATED THEREWITH.
2. NEITHER POSSIBILITY OF A BUY-IN NOR ALLEGATION OF EXCESSIVELY LOW
BID PROVIDES BASIS TO CHALLENGE AWARD.
3. PROCURING ACTIVITY IS NOT REQUIRED TO WITHHOLD AWARD BASED ONLY
ON KNOWLEDGE THAT PROTEST MIGHT BE FILED.
4. AGENCY DELAY IN SUBMITTING REPORT TO GAO DOES NOT JUSTIFY
DISREGARDING SUBSTANTIVE INFORMATION CONTAINED IN REPORT.
WHEELER INDUSTRIES, INC.:
WHEELER INDUSTRIES, INC. (WHEELER) PROTESTS AWARD OF AN INDEFINITE
QUANTITIES (TIME AND MATERIALS) CONTRACT TO ADVANCED MARINE ENTERPRISES,
INC. (AME) FOR ENGINEERING AND TECHNICAL SUPPORT SERVICES WHICH MAY BE
ORDERED BY THE DAVID W. TAYLOR NAVAL SHIP RESEARCH AND DEVELOPMENT
CENTER (TAYLOR) TO SUPPORT THE ADVANCED HYDROFOIL PROGRAM. THE RFP WAS
ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, WASHINGTON NAVY YARD
(NAVY) AS REQUEST FOR PROPOSALS (RFP) NO. N00600-77-R-1004.
WHEELER COMPLAINS THAT THE NAVY DID NOT EVALUATE PROPOSALS AS
REQUIRED BY THE RFP EVALUATION CRITERIA, AND INSTEAD, SUBSTITUTED PRICE
AS THE PRINCIPAL AWARD CRITERION. THE SOLICITATION STATED THAT AWARD
WAS TO BE BASED ON TECHNICAL QUALIFICATION AND PRICE, WITH PRICE BEING
ASSIGNED APPROXIMATELY ONE QUARTER THE WEIGHT GIVEN ALL TECHNICAL
FACTORS. WHEELER'S PROPOSAL WAS 70.9 PERCENT MORE EXPENSIVE THAN WAS
AME'S.
AS WHEELER POINTS OUT, TAYLOR TECHNICAL PERSONNEL INITIALLY
RECOMMENDED THAT WHEELER RECEIVE THE AWARD. THIS RECOMMENDATION WAS
REJECTED BY NAVY CONTRACTING PERSONNEL, EVEN THOUGH TAYLOR'S INITIAL
TECHNICAL EVALUATION ASSIGNED WHEELER A 15 PERCENT BETTER TECHNICAL
SCORE THAN AME. TAKING PRICE INTO CONSIDERATION, WHEELER ONLY
MARGINALLY OUTSCORED AME, BY A WEIGHTED SCORE OF 0.8588 TO 0.8226.
IN VIEW OF THE RELATIVELY SMALL DIFFERENCE IN WEIGHTED SCORES AND THE
SIGNIFICANT DIFFERENCE IN PRICES, CONTRACTING PERSONNEL CLOSELY REVIEWED
THE TECHNICAL EVALUATION. THEY FOUND LITTLE ACTUAL DIFFERENCE BETWEEN
THE TWO FIRM'S TECHNICAL QUALIFICATIONS, BUT CONCLUDED THAT WHEELER'S
HIGHER SCORE REFLECTED ITS EXPERIENCE AS THE INCUMBENT. IN THE MOST
HEAVILY WEIGHTED CATEGORY OF PERSONNEL QUALIFICATIONS, WHEELER ONLY
SLIGHTLY OUTSCORED AME AND BOTH OFFERORS RECEIVED THE SAME SCORE IN THE
MANAGEMENT PLAN AREA. THE ONLY AREAS IN WHICH WHEELER OUTSCORED AME BY
MORE THAN 4 PERCENT WERE CORPORATE EXPERIENCE AND MANAGEMENT EXPERIENCE.
WHEELER ATTAINED NEAR PERFECT SCORES IN THESE AREAS. HOWEVER, TAYLOR'S
TECHNICAL EVALUATION SHOWS THAT AME'S CORPORATE EXPERIENCE AND ITS
MANAGEMENT EXPERIENCE WERE ALSO ACCEPTABLE. BECAUSE AME WOULD GAIN
EQUIVALENT EXPERIENCE WITHIN THE FIRST SIX MONTHS, AND SINCE AME'S
PROPOSAL REFLECTED AN ACCEPTABLE LEVEL OF EXPERIENCE, THE CONTRACTING
OFFICER DISCOUNTED THE ADDITIONAL POINTS ATTRIBUTABLE TO WHEELER'S
INCUMBENCY AND MADE AWARD TO AME.
ALTHOUGH TECHNICAL POINT RATINGS ARE USEFUL AS GUIDES FOR INTELLIGENT
DECISION-MAKING IN THE PROCUREMENT PROCESS, TOO MUCH RELIANCE SHOULD NOT
BE PLACED ON THEM. WHETHER A GIVEN POINT SPREAD BETWEEN TWO COMPETING
PROPOSALS INDICATES A SIGNIFICANT SUPERIORITY OF ONE PROPOSAL OVER
ANOTHER DEPENDS UPON THE FACTS AND CIRCUMSTANCES OF EACH PROCUREMENT.
52 COMP. GEN. 686, 690 (1973); COMPUTER DATA SYSTEMS, INC., B-187892,
JUNE 2, 1977, 77-1 CPD 384; SEE ALSO GREY ADVERTISING, INC., 55 COMP.
GEN. 1111 (1976), 76-1 CPD 325 AND CASES CITED THEREIN. EVEN WHEN POINT
SCORES AND TECHNICAL EVALUATION RATINGS ARE INDICATIVE OF THE TECHNICAL
SUPERIORITY OF ONE PROPOSAL OVER ANOTHER SELECTION OFFICIALS ARE NOT
BOUND BY RECOMMENDATIONS MADE BY A TECHNICAL EVALUATION PANEL. GREY
ADVERTISING, INC., SUPRA; BELL AEROSPACE COMPANY, 55 COMP. GEN. 244
(1975), 75-2 CPD 168; TRACOR JITCO, INC., 54 COMP. GEN. 896 (1975),
75-1 CPD 253.
RECOGNIZING THIS, WE HAVE PREVIOUSLY UPHELD SOURCE SELECTION
OFFICIALS' DETERMINATIONS THAT TECHNICAL PROPOSALS WERE ESSENTIALLY
EQUAL DESPITE AN EVALUATION POINT SCORE DIFFERENTIAL OF AS MUCH AS 15.8
PERCENT AND DESPITE AN EVALUATION PANEL'S RECOMMENDATION THAT AWARD BE
MADE TO THE OFFEROR WITH THE HIGHEST TECHNICAL RATING. GREY
ADVERTISING, INC., SUPRA; B-173137(1), OCTOBER 8, 1971. MOREOVER, IN
DETERMINING WHICH PROPOSAL SHOULD BE ACCEPTED FOR AWARD, AN AGENCY MAY
ATTACH WEIGHT TO THE FACT THAT THE INCUMBENT'S TECHNICAL SCORE REFLECTS
ADVANTAGES INHERENT IN ITS INCUMBENCY, RATHER THAN TECHNICAL MERIT.
BUNKER RAMO CORPORATION, 56 COMP. GEN. 712 (1977), 77-1 CPD 427. AWARD
SHOULD NOT BE BASED ON THE DIFFERENCE IN TECHNICAL MERIT SCORE PER SE,
BUT SHOULD REFLECT THE PROCURING AGENCY'S CONSIDERED JUDGMENT OF THE
SIGNIFICANCE OF THAT DIFFERENCE. 52 COMP. GEN. 358, 365 (1972). IN
OTHER WORDS, THE SELECTION OFFICIAL MUST DETERMINE WHAT A DIFFERENCE IN
EVALUATION POINT SCORES MIGHT MEAN IN TERMS OF PERFORMANCE AND WHAT IT
WOULD COST THE GOVERNMENT TO TAKE ADVANTAGE OF IT. GREY ADVERTISING,
INC., SUPRA. THIS DOES NOT MEAN THAT THE WEIGHTED EVALUATION CRITERIA
ARE CHANGED OR IGNORED, SINCE THE IMPORTANCE OF PRICE IS ALWAYS
ACCENTUATED WHEN APPLICATION OF OTHER FACTORS DO NOT, IN THE GOOD FAITH
JUDGMENTS OF SOURCE SELECTION OFFICIALS, CLEARLY IDENTIFY ONE PROPOSAL
AS MOST ADVANTAGEOUS TO THE GOVERNMENT. SEE, E.G. GREY ADVERTISING,
SUPRA, AT 1124 AND CASES CITED THEREIN.
THUS, WE FIND THE AWARD WAS NOT INCONSISTENT WITH THE RFP EVALUATION
CRITERIA.
WHEELER ALSO BELIEVES THAT AME IS ATTEMPTING TO "BUY-IN" BY OFFERING
EXCEEDINGLY LOW PRICES. HOWEVER, THE POSSIBILITY OF A BUY-IN DOES NOT
PROVIDE A BASIS UPON WHICH AWARD MAY BE CHALLENGED. NORTH AMERICAN
SIGNAL CO. - RECONSIDERATION, B-190972, AUGUST 4, 1978, 78-2 CPD 87;
CONSOLIDATED ELEVATOR COMPANY, B-190929, MARCH 3, 1978, 78-1 CPD 166.
ALTHOUGH WHEELER ALSO QUESTIONS THE PROPRIETY OF THE AWARD, BECAUSE
THE NAVY WAS AWARE THAT A PROTEST MIGHT BE FILED, NO PROTEST WAS PENDING
AT THE TIME AWARD WAS MADE AND THERE IS NO REQUIREMENT TO WITHHOLD AWARD
IN SUCH CIRCUMSTANCES. CF. DEFENSE ACQUISITION REGULATION (DAR) SEC.
2-407.8(B) (1976 ED.).
FINALLY, WHEELER COMPLAINS THAT THE NAVY UNNECESSARILY DELAYED BEFORE
SUBMITTING ITS REPORT TO OUR OFFICE. OUR BID PROTEST PROCEDURES, 4
C.F.R. 20.3(C), INDICATE THAT WE WILL REQUEST THAT AN AGENCY REPORT ON A
BID PROTEST BE SUBMITTED AS EXPEDITIOUSLY AS POSSIBLE. THE RULE
REFLECTS OUR VIEW THAT A 25 WORKING DAY PERIOD IS USUALLY SUFFICIENT.
WE NOTE THAT APPROXIMATELY TWO AND ONE-HALF MONTHS ELAPSED BETWEEN OUR
JANUARY 16, 1978 REQUEST AND THE NAVY'S REPORT OF APRIL 3, 1978, AND WE
ARE AWARE OF NO JUSTIFIABLE REASON FOR THIS DELAY. HOWEVER, WE SEE NO
BASIS FOR DISREGARDING A REPORT WHICH HAS BEEN RECEIVED, OR TO SUSTAIN A
PROTEST ON AN INADEQUATE RECORD. AMERICAN APPRAISAL ASSOCIATES, INC.,
B-191421, SEPTEMBER 13, 1978, 78-2 CPD 197. IN ANY EVENT, IN VIEW OF
OUR CONCLUSIONS IN THIS MATTER THE PROTESTER WAS NOT PREJUDICED BY THE
DELAY OR THE AWARD ACTION.
THE PROTEST IS DENIED.
B-194226, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST FILED MORE THAN 10 WORKING DAYS AFTER BASIS FOR PROTEST
IS KNOWN IS UNTIMELY UNDER GAO BID PROTEST PROCEDURES.
2. WHEN ISSUE RAISED IS NOT "SIGNIFICANT" WITHIN MEANING OF GAO BID
PROTEST PROCEDURES, OTHERWISE UNTIMELY PROTEST MAY NOT BE CONSIDERED ON
MERITS.
B&D SUPPLY COMPANY OF ARIZONA, INC.:
B&D SUPPLY COMPANY OF ARIZONA, INC. (B&D), PROTESTS THE AWARD OF A
CONTRACT TO THE HATFIELD PLUMBING SUPPLY CO., INC. (HATFIELD), UNDER
REQUEST FOR PROPOSALS (RFP) NO. F04605-78-R-0018 ISSUED BY THE UNITED
STATES AIR FORCE (AIR FORCE) FOR THE PURPOSE OF SOLICITING PROPOSALS FOR
THE OPERATION OF A CONTRACTOR OPERATED CIVIL ENGINEERING SUPPLY STORE AT
MARCH AIR FORCE BASE, CALIFORNIA. B&D CONTENDS THAT CERTAIN TERMS IN
HATFIELD'S PROPOSAL WERE QUALIFICATIONS NOT PERMITTED UNDER THE
PROVISIONS OF THE RFP AND THAT BY PERMITTING HATFIELD TO QUALIFY ITS
PROPOSAL THE CONTRACTING OFFICER PREJUDICED THE COMPETITIVE POSITION OF
THE OTHER OFFERORS. HOWEVER, FOR THE REASONS INDICATED BELOW, B&D'S
PROTEST IS DISMISSED AS UNTIMELY.
THE RFP WAS ISSUED ON MAY 19, 1978. AFTER A PERIOD OF NEGOTIATIONS,
BEST AND FINAL OFFERS WERE RECEIVED FROM SIX OFFERORS ON SEPTEMBER 15,
1978. THESE WERE THEN EVALUATED AND HATFIELD'S PROPOSAL WAS ACCEPTED.
ON NOVEMBER 9, 1978, THE UNSUCCESSFUL OFFERORS WERE NOTIFIED OF THIS
RESULT. THE CONTRACTING OFFICER THEN RECEIVED A LETTER FROM B&D ON
DECEMBER 1, 1978, REQUESTING INFORMATION UNDER THE FREEDOM OF
INFORMATION ACT CONCERNING THE CONTRACT AWARD. B&D ASKED FOR THE
RELEASE OF THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY,
THE NEGOTIATION MEMORANDUM, AND SECTION "E," PARTS I, II AND III, FROM
THE SUCCESSFUL PROPOSAL. BY LETTER OF DECEMBER 15, 1978, THE AIR FORCE
NOTIFIED B&D THAT SECTION "E" WAS RELEASABLE AND THAT A COPY WOULD BE
FURNISHED UPON RECEIPT OF THE REQUIRED PROCESSING FEE. PAYMENT OF THIS
FEE WAS RECEIVED ON JANUARY 11, 1979, AND A COPY WAS THEN MAILED TO B&D.
ON FEBRUARY 2, 1979, THE CONTRACTING OFFICER RECEIVED A LETTER
ACKNOWLEDGING RECEIPT OF THE MATERIAL ALREADY PROVIDED AND REQUESTING
ADDITIONAL INFORMATION. THE CONTRACTING OFFICER RESPONDED TO THIS
REQUEST ON FEBRUARY 8, 1979. IT WAS NOT, HOWEVER, UNTIL FEBRUARY 27,
1979, THAT B&D FILED A PROTEST WITH OUR OFFICE.
IN ITS INITIAL SUBMISSION TO OUR OFFICE, B&D ALLEGES THAT THE AIR
FORCE ALLOWED HATFIELD TO QUALIFY ITS PROPOSAL BY PERMITTING IT TO BASE
ITS PRICE FOR SOME ITEMS ON MINIMUM ORDER AMOUNTS. ACCORDING TO B&D,
THERE IS NO PROVISION IN THE RFP THAT ALLOWS MINIMUM ORDER QUANTITIES
AND THAT THIS ALSO VIOLATES THE RFP'S DELIVERY REQUIREMENT SINCE IF THE
AIR FORCE DOES NOT PURCHASE THE MINIMUM ORDER AMOUNT, THE PRICE IS THEN
CALCULATED ON THE BASIS OF FOB ORIGIN RATHER THAN FOB DESTINATION AS
PROVIDED BY THE RFP. B&D BELIEVES THAT HATFIELD GAINED AN UNFAIR
ADVANTAGE OVER THE OTHER OFFERORS FROM THIS ACTION SINCE IT WAS ABLE TO
QUOTE A LOWER PRICE BECAUSE OF LARGER VOLUME PURCHASES. THEREFORE, B&D
REQUESTS THAT WE DETERMINE WHETHER THE EVALUATION PROCEDURES USED HERE
WERE PROPER.
THE AIR FORCE, ON THE OTHER HAND, DOES NOT ADDRESS THE MERITS OF
B&D'S PROTEST SINCE IT BELIEVES THAT THE PROTEST IS UNTIMELY. ACCORDING
TO THE AIR FORCE, B&D KNEW OR SHOULD HAVE KNOWN THE BASIS FOR ITS
PROTEST NO LATER THAN THE DATE ON WHICH IT RECEIVED THE COPY OF SECTION
"E" OF HATFIELD'S PROPOSAL. SINCE THIS WAS MAILED TO B&D ON JANUARY 11,
1979, THE AIR FORCE BELIEVES THAT B&D SHOULD HAVE BEEN AWARE OF THE
BASIS FOR ITS PROTEST NO LATER THAN JANUARY 18, 1979. BASED ON THIS,
THEREFORE, THE AIR FORCE CONCLUDES THAT B&D'S PROTEST, FILED WITH OUR
OFFICE ON FEBRUARY 27, 1979, IS MANIFESTLY LATE.
B&D CONCEDES THAT ITS PROTEST COULD BE CONSIDERED UNTIMELY UNDER OUR
BID PROTEST PROCEDURES. HOWEVER, IT ARGUES THAT INITIALLY IT BELIEVED
THAT IT COULD RESOLVE THE DISPUTE BY DEALING DIRECTLY WITH THE
CONTRACTING OFFICIALS AT MARCH AIR FORCE BASE; BUT AFTER NOT RECEIVING
WHAT IT CONSIDERED SATISFACTORY ANSWERS, B&D THEN DECIDED TO FILE A
PROTEST WITH OUR OFFICE. IN ADDITION, B&D ARGUES THAT ITS PROTEST
RAISES SIGNIFICANT ISSUES WHICH MAY BE CONSIDERED UNDER OUR BID PROTEST
PROCEDURES EVEN IF THE PROTEST IS UNTIMELY.
OUR BID PROTEST PROCEDURES REQUIRE THAT A PROTEST BE FILED WITH THE
CONTRACTING AGENCY OR WITH OUR OFFICE NOT LATER THAN 10 WORKING DAYS
AFTER THE BASIS FOR PROTEST IS KNOWN. 4 C.F.R. SEC. 20.2 (1979). B&D
LEARNED OR SHOULD HAVE LEARNED THE GROUNDS OF ITS PROTEST UPON THE
RECEIPT OF SECTION "E" AND THE OTHER INFORMATION THAT IT REQUESTED IN
DECEMBER 1978. ALTHOUGH THE SPECIFIC DATE OF THIS RECEIPT IS NOT
APPARENT FROM THE RECORD, THIS INFORMATION WAS CLEARLY IN B&D'S
POSSESSION PRIOR TO ITS LETTER OF JANUARY 31, 1979, REQUESTING
ADDITIONAL INFORMATION FROM THE CONTRACTING OFFICER. UNDER THESE
CIRCUMSTANCES, IT IS OBVIOUS THAT B&D'S PROTEST OF FEBRUARY 27, 1979,
WAS NOT FILED WITHIN THE REQUIRED TIME PERIOD. THEREFORE, THE PROTEST
IS UNTIMELY FILED AND AS A GENERAL RULE NOT FOR CONSIDERATION ON THE
MERITS. SEE VECTOR ENTERPRISES, INC., B-193770, JANUARY 29, 1979, 79-1
CPD 61.
YET, AS B&D POINTS OUT, OUR BID PROTEST PROCEDURES DO PERMIT
CONSIDERATION OF UNTIMELY PROTESTS WHEN ISSUES "SIGNIFICANT TO
PROCUREMENT PRACTICES OR PROCEDURES" ARE INVOLVED. 4 C.F.R. SEC.
20.2(C) (1979). HOWEVER, THE SIGNIFICANT ISSUE EXCEPTION IS LIMITED TO
ISSUES WHICH ARE OF WIDESPREAD INTEREST TO THE PROCUREMENT COMMUNITY AND
IS EXERCISED SPARINGLY SO THAT THE TIMELINESS STANDARDS DO NOT BECOME
MEANINGLESS. EGLEN HOVERCRAFT, INCORPORATED, B-193050, JANUARY 22,
1979, 79-1 CPD 39; MIL-AIR, INC., B-191424, JULY 20, 1978, 78-2 CPD 55.
IN THIS CONNECTION, WE HAVE HELD THAT A PROTEST INVOLVING ISSUES THAT
HAVE BEEN CONSIDERED IN PRIOR DECISIONS DOES NOT PRESENT "SIGNIFICANT"
ISSUES WITHIN THE MEANING OF 4 C.F.R. SEC. 20.2(C). JONES & GUERRERO
CO., INCORPORATED, B-192328, OCTOBER 23, 1978, 78-2 CPD 296.
B&D ARGUES THAT THE CONTRACTOR-OPERATED CIVIL ENGINEERING SUPPLY
STORE CONCEPT IS A DEPARTMENT OF DEFENSE-WIDE SYSTEM AND THAT THERE ARE
PRESENTLY AT LEAST 19 SOLICITATIONS SIMILAR TO THE ONE UNDER DISCUSSION
AT VARIOUS STAGES OF THE PROCUREMENT PROCESS WITH AT LEAST 15 MORE TO BE
ISSUED DURING THIS CALENDAR YEAR. BASED ON THIS, B&D BELIEVES THAT THE
ISSUES RAISED IN ITS PROTEST ARE "SIGNIFICANT" SINCE THE SAME EVALUATION
PROCEDURE USED HERE MAY BE USED IN THESE OTHER PROCUREMENTS RESULTING IN
FAR GREATER COSTS TO THE GOVERNMENT. THE ACTUAL ISSUE RAISED BY B&D'S
PROTEST IS WHETHER ALL OFFERORS WERE TREATED EQUALLY IN THE EVALUATION
OF THEIR PROPOSALS SINCE, IN B&D'S OPINION, HATFIELD ALONE WAS PERMITTED
TO QUALIFY ITS PROPOSAL BY BASING ITS PRICE FOR SOME ITEMS ON MINIMUM
ORDER AMOUNTS. YET, WE NOTE THAT IN A LETTER DATED SEPTEMBER 1, 1978,
THE AIR FORCE MODIFIED THE RFP BY AUTHORIZING MINIMUM ORDER AMOUNTS FOR
CERTAIN ITEMS. CONSEQUENTLY, IN THE ABSENCE OF ALLEGED MISCONDUCT OR
BAD FAITH ON THE PART OF THE AIR FORCE, WE BELIEVE THAT THE TYPE OF
ISSUE RAISED - THE EQUAL TREATMENT OF OFFERORS - IS ONE THAT OUR OFFICE
HAS CONSIDERED MANY TIMES BEFORE. SEE, E.G., HOMEMAKER HEALTH AIDE
SERVICES, B-188914, SEPTEMBER 27, 1977, 77-2 CPD 230. THEREFORE, B&D
HAS NOT RAISED A "SIGNIFICANT" ISSUE, AND ITS OTHERWISE UNTIMELY PROTEST
MAY NOT BE CONSIDERED ON THE MERITS. VECTOR ENTERPRISES, INC., SUPRA;
JONES & GUERRERO CO., INCORPORATED, SUPRA.
PROTEST DISMISSED.
B-194398(2), JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. POSSIBILITY OF BUY-IN PROVIDES NO BASIS UPON WHICH AWARD OF
CONTRACT MAY BE CHALLENGED. REJECTION OF PROPOSAL FOR TOO LOW PRICE OR
INABILITY TO PERFORM REQUIRES DETERMINATION OF NONRESPONSIBILITY, AND
THIS OFFICE NO LONGER REVIEWS AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY ABSENT CIRCUMSTANCES NOT PRESENT HERE.
2. WHERE PROTESTER'S HIGHER-PRICED PROPOSAL RECEIVED LESS POINTS
BOTH OVERALL AND IN TECHNICAL AREA THAN DID AWARDEE'S PROPOSAL, AWARD
APPEARS TO BE CONSISTENT WITH EVALUATION CRITERIA WHICH WEIGHTED COST AT
ONLY 30 PERCENT OF TOTAL EVALUATION.
MORGAN MANAGEMENT SYSTEMS, INC.:
MORGAN MANAGEMENT SYSTEMS, INC. (MORGAN), PROTESTS AWARD OF A
CONTRACT TO DECISION SCIENCES CORPORATION (DSC) UNDER REQUEST FOR
PROPOSALS (RFP) SBA-7(I)-MA-79-1 ISSUED BY THE SMALL BUSINESS
ADMINISTRATION. THE SOLICITATION REQUESTED PROPOSALS FOR PROVIDING
MANAGEMENT AND TECHNICAL ASSISTANCE SERVICES IN VARIOUS GEOGRAPHICAL
AREAS TO ELIGIBLE INDIVIDUALS OR ENTERPRISES.
MORGAN ALLEGES THAT DSC'S OFFERS TO PROVIDE SERVICES IN THREE AREAS
WERE EACH A "BUY-IN" AND QUESTIONS WHETHER IT CAN DELIVER THE REQUIRED
SERVICES AT SUCH LOW PRICES.
WE HAVE HELD THAT THE POSSIBILITY OF A "BUY-IN" OR THE SUBMISSION OF
A BELOW-COST BID IS NOT A PROPER BASIS UPON WHICH TO CHALLENGE THE
VALIDITY OF A CONTRACT. RKFM PRODUCTS CORPORATION, B-190313, AUGUST 7,
1978, 78-2 CPD 94. WHETHER AN OFFEROR WILL BE ABLE TO PERFORM AT ITS
OFFERED PRICE INVOLVES A MATTER OF RESPONSIBILITY. THUS, REJECTION OF
AN OFFER AS EXTREMELY LOW GENERALLY REQUIRES A DETERMINATION THAT THE
OFFEROR IS NONRESPONSIBLE. CONSOLIDATED ELEVATOR COMPANY, B-190929,
MARCH 3, 1978, 78-1 CPD 166. HERE SBA FOUND DSC TO BE RESPONSIBLE.
THIS OFFICE NO LONGER REVIEWS PROTESTS AGAINST AFFIRMATIVE
DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD IS SHOWN ON THE
PART OF THE PROCURING OFFICIALS OR THE SOLICITATION CONTAINS DEFINITIVE
RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN MET. CENTRAL
METAL PRODUCTS, INC., 54 COMP. GEN. 66 (1974), 74-2 CPD 64. NEITHER
EXCEPTION IS ALLEGED IN THIS CASE.
MORGAN ALSO QUESTIONS WHETHER ITS PROPOSAL RECEIVED "FULL
CONSIDERATION" IN VIEW OF THE FACT THAT PRICE WAS ESTABLISHED AS WORTH
ONLY 30 PERCENT OF THE EVALUATION. THE RECORD SHOWS THAT FOR EACH OF
THE THREE AREAS AWARDED TO DSC, MORGAN WAS NOT RANKED HIGHER THAN THIRD
IN TOTAL SCORE AND IN EACH INSTANCE SCORED CONSIDERABLY BELOW DSC IN THE
TECHNICAL EVALUATION. THUS, THE RECORD DOES NOT ESTABLISH THAT MORGAN'S
PROPOSAL WAS NOT EVALUATED PROPERLY.
MORGAN ALSO REQUESTS THAT WE SUPPLY IT WITH EVALUATION SUMMARY SHEETS
WHICH THE AGENCY CONSIDERS RESTRICTED. SINCE THE EVALUATION SHEETS ARE
SBA RECORDS, THE PROTESTER MUST APPLY TO THAT AGENCY FOR RELEASE OF THE
DOCUMENTS UNDER THE FREEDOM OF INFORMATION ACT (FOIA), 5 U.S.C. SEC. 552
(1976). E-SYSTEMS, INC., B-191346, MARCH 20, 1979, 79-1 CPD 192.
THE PROTEST IS DENIED.
B-194434, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST AGAINST AWARD OF CONTRACT ALLEGING THAT PRINCIPAL OF FIRM
IS RETIRED EMPLOYEE OF PROCURING ACTIVITY AND PROHIBITED BY STATUTE FROM
SEEKING CONTRACTS AT THIS TIME WITH AGENCY AND THAT FIRM LACKS
CAPABILITY TO PERFORM CONTRACT IS DISMISSED. ISSUES RAISED BY PROTEST
ARE FOR REVIEW AND RESOLUTION BY DEPARTMENT OF JUSTICE, PROCURING
ACTIVITY AND DEPARTMENT OF LABOR, RESPECTIVELY, NOT GAO.
2. PROTESTER'S ALLEGATIONS OF IRREGULARITIES IN AGENCY'S AWARD AND
ADMINISTRATION OF 1977 CONTRACTS ARE UNTIMELY PROTESTS AGAINST CONTRACTS
AWARDED AND CONCERN MATTERS OF CONTRACT ADMINISTRATION NOT FOR
RESOLUTION UNDER GAO BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1978).
3. PROTESTER'S REQUEST FOR INFORMATION TO SUBSTANTIATE PROTEST
SHOULD BE PURSUED UNDER FREEDOM OF INFORMATION ACT (FOIA), 5 U.S.C. SEC.
552 (1976); GAO HAS NO AUTHORITY UNDER FOIA TO DETERMINE WHAT
INFORMATION PROCURING ACTIVITY MUST DISCLOSE.
CACCIAMANI BROS.:
CACCIAMANI BROS. (CACCIAMANI) HAS PROTESTED AGAINST THE AWARD OF
CONTRACT NO. N62472-79-D-4556 BY THE DEPARTMENT OF THE NAVY, NAVAL
FACILITIES ENGINEERING COMMAND (NAVY), TO ALVIN SCHEINFELDT
(SCHEINFELDT) FOR CRANE MAINTENANCE SERVICE AT THE PHILADELPHIA NAVAL
SHIPYARD.
THE NAVY'S REQUIREMENTS WERE INITIALLY SOLICITED UNDER INVITATION FOR
BIDS (IFB) NO. N62472-78-B-4597 (IFB-4597), WHICH WAS CANCELED AFTER BID
OPENING BECAUSE THE NAVY DETERMINED THAT THE IFB SPECIFICATIONS WERE NOT
CLEAR AS TO THE WORK REQUIREMENTS. DEFENSE ACQUISITION REGULATION (DAR)
SEC. 2-404.1(B)(I) (1976 ED.). THE REQUIREMENTS WERE RESOLICITED UNDER
IFB NO. N62472-79-B-4556 (IFB-4556). THREE BIDS WERE RECEIVED AT THE
BID OPENING ON FEBRUARY 20, 1979; SCHEINFELDT WAS THE LOW BIDDER AND
CACCIAMANI, THE SECOND LOW BIDDER. AFTER A PREAWARD EVALUATION, AWARD
WAS MADE TO SCHEINFELDT ON MARCH 2, 1979.
CACCIAMANI CONTENDS THAT BECAUSE MR. SCHEINFELDT RETIRED FROM THE
NAVY IN 1978, HE WAS PROHIBITED FROM SEEKING CONTRACTUAL WORK WITH THE
NAVY FOR A PERIOD OF 2 YEARS AFTER HIS RETIREMENT AND BID ON THE
AFOREMENTIONED SOLICITATIONS IN VIOLATION OF THE CONTROLLING PROCUREMENT
REGULATIONS. THE PROTESTER FURTHER ASSERTS THAT SCHEINFELDT LACKS
ADEQUATE STAFF, EXPERIENCE AND EQUIPMENT TO PERFORM THE CONTRACT, IN
VIOLATION OF THE REQUIREMENTS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT,
41 U.S.C. SEC. 35 (1976).
WE MUST DECLINE TO CONSIDER SCHEINFELDT'S ELIGIBILITY UNDER THE
WALSH-HEALEY ACT. THE RESPONSIBILITY FOR DETERMINING WHETHER A BIDDER
IS QUALIFIED AS A REGULAR DEALER OR MANUFACTURER RESTS INITIALLY WITH
THE CONTRACTING OFFICER AND IS SUBJECT TO REVIEW BY THE SECRETARY OF
LABOR, NOT BY THE GENERAL ACCOUNTING OFFICE. SEE, E.G., CORBIN SALES
CORPS., B-181454, OCTOBER 29, 1975, 75-2 CPD 261; F & H MANUFACTURING
CORP., B-183491, APRIL 29, 1975, 75-1 CPD 266.
TO THE EXTENT THE PROTESTER QUESTIONS SCHEINFELDT'S CAPABILITY TO
PERFORM THE WORK, THE PROTEST RAISES THE ISSUE OF THE BIDDER'S
RESPONSIBILITY. IN THIS CONNECTION, THE AWARD TO SCHEINFELDT IMPORTS AN
AFFIRMATIVE DETERMINATION OF THE FIRM'S RESPONSIBILITY. DAR SEC. 1-902
(1976 ED.); ADVERTISING DISTRIBUTORS OF WASHINGTON, INC., B-187070,
FEBRUARY 15, 1977, 77-1 CPD 111. OUR OFFICE DOES NOT REVIEW AFFIRMATIVE
RESPONSIBILITY DETERMINATIONS, ABSENT A SHOWING OF FRAUD, OR WHEN THE
SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY
HAVE NOT BEEN MET. RANDALL MANUFACTURING COMPANY, INC.
(RECONSIDERATION), B-185363, JANUARY 26, 1976, 76-1 CPD 44; SEE CENTRAL
METAL PRODUCTS, 54 COMP. GEN. 66, 67 (1974), 74-2 CPD 64. BECAUSE
CACCIAMANI'S PROTEST DOES NOT INVOLVE EITHER OF THE CONDITIONS REQUISITE
TO OUR REVIEW OF THE NAVY'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY,
WE WILL NOT CONSIDER THIS GROUND OF THE PROTEST ON THE MERITS.
WE BELIEVE THAT IN QUESTIONING THE PROPRIETY OF MR. SCHEINFELDT'S
STATUS AS A BIDDER/CONTRACTOR, THE PROTESTER REFERS RATHER TO THE
PROHIBITION CONTAINED IN 18 U.S.C. SEC. 281 (1976), WHICH IS A CRIMINAL
STATUTE. THE ENFORCEMENT OF CRIMINAL STATUTES AND INVESTIGATION OF
ALLEGED CRIMINAL VIOLATIONS ARE THE PREROGATIVE OF THE DEPARTMENT OF
JUSTICE, TO WHICH SUCH ALLEGATIONS SHOULD BE REFERRED. LOCAL F76,
INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, B-194084, MARCH 28, 1979,
79-1 CPD 209.
THE PROTESTER CITES AS EVIDENCE OF IRREGULARITIES IN THE CRANE
MAINTENANCE PROCUREMENTS THE NAVY'S ACTIONS CONCERNING CONTRACTS AWARDED
TO CACCIAMANI AND OTHER FIRMS IN 1977. INSOFAR AS THE PROTESTER TAKES
EXCEPTION TO CONTRACTS PREVIOUSLY AWARDED TO ITS COMPETITORS, PROTESTS
AGAINST THOSE AWARDS AT THIS TIME ARE CLEARLY UNTIMELY FILED AND NOT FOR
CONSIDERATION ON THE MERITS. 4 C.F.R. SEC. 20.2 (1978). CACCIAMANI'S
OBJECTIONS TO THE AMOUNT AND TYPE OF PURCHASE ORDERS PLACED UNDER THESE
CONTRACTS AND THE PERFORMANCE OR DEFAULT OF OTHER CONTRACTORS CONSTITUTE
MATTERS OF CONTRACT ADMINISTRATION WHICH ARE NOT FOR RESOLUTION UNDER
OUR BID PROTEST PROCEDURES. SEE, E.G., D.C. ELECTRONICS, B-184266,
MARCH 8, 1976, 76-1 CPD 160; HARDING POLLUTION CONTROLS CORPORATION,
B-182899, FEBRUARY 6, 1976, 76-1 CPD 77. WE WILL, HOWEVER, RETAIN THIS
INFORMATION FOR POSSIBLE CONSIDERATION IN CONNECTION WITH OUR AUDIT
FUNCTIONS.
WE NOTE THAT IN COMMENTING UPON THE REPORT THE NAVY SUBMITTED IN
RESPONSE TO THE PROTEST, 4 C.F.R. SEC. 20.3 (1978), CACCIAMANI REQUESTED
INFORMATION IN SUPPORT OF ITS POSITION. THE BURDEN IS ON THE PROTESTER,
NOT GAO, TO OBTAIN THE INFORMATION NECESSARY TO SUBSTANTIATE ITS CASE;
SUCH REQUESTS SHOULD BE PURSUED THROUGH THE DISCLOSURE REMEDY AVAILABLE
TO THE PROTESTER UNDER THE FREEDOM OF INFORMATION ACT, 5 U.S.C. SEC. 552
(1976). OUR OFFICE HAS NO AUTHORITY UNDER THE ACT TO DETERMINE WHAT
INFORMATION OTHER GOVERNMENT AGENCIES MUST DISCLOSE, DYNATREND, INC.,
B-192038, JANUARY 3, 1979, 79-1 CPD 4; AUGMENTATION INCORPORATED,
B-185137, MARCH 16, 1976, 76-1 CPD 179, AND CACCIAMANI'S REMEDY WAS TO
APPEAL TO THE SECRETARY OF THE NAVY OR TO A COURT OF COMPETENT
JURISDICTION. 5 U.S.C. SEC. 552(A)(4) (1976).
IN VIEW OF THE FACT THAT THE PROTEST RAISES ISSUES WHICH ARE NOT
REVIEWABLE BY THIS OFFICE, THE PROTESTER'S REQUEST FOR A CONFERENCE ON
THE MERITS OF THE PROTEST PURSUANT TO 4 C.F.R. SEC. 20.7(A) (1978) IS
DENIED BECAUSE IT WOULD SERVE NO USEFUL PURPOSE.
THE PROTEST IS DISMISSED.
B-194590, JUL 20, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
SINCE PROTESTER (INCUMBENT CONTRACTOR) DOES NOT QUESTION GENUINENESS
OF COMPETITOR'S COMMITMENTS TO HIRE PROTESTER'S EMPLOYEES IN EVENT OF
AWARD, GAO CANNOT OBJECT TO PROPOSED USE OF EMPLOYEES UNDER PROCUREMENT
LAW PRINCIPLES. TO EXTENT PROTESTER'S COMPLAINT OF UNFAIR BUSINESS
PRACTICES REGARDING OBTAINING OF COMMITMENTS RELATES TO CLAIM FOR MONEY
DAMAGES FROM PRIVATE PARTY, ALLEGATION OF CRIMINAL CONDUCT, OR CONTRACT
ADMINISTRATION, MATTER IS NOT FOR GAO'S REVIEW.
LING ELECTRONICS, INC.:
LING ELECTRONICS, INC. (LING), HAS PROTESTED THE PROPOSED AWARD OF A
CONTRACT TO KEPPCO UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
(NASA) REQUEST FOR PROPOSALS (RFP) MSF-C-8-1-9-AL-00121 ISSUED BY
NASA/MARSHALL SPACE FLIGHT CENTER FOR ONSITE MAINTENANCE AND REPAIR
SERVICES (INCLUDING ASSOCIATED SPARE PARTS REQUIREMENTS) ON
GOVERNMENT-OWNED LING AND MB ELECTRONICS EQUIPMENT.
NASA INFORMS US THAT LING (THE INCUMBENT CONTRACTOR FOR THE SERVICES)
AND KEPPCO SUBMITTED THE ONLY PROPOSALS UNDER THE RFP. BOTH COMPANIES,
IN NASA'S VIEW, DEMONSTRATED A "VERY HIGH DEGREE OF TECHNICAL CAPABILITY
WHICH FULLY MET THE RFP REQUIREMENTS" AND FULLY SATISFIED "ALL OTHER
FACTORS," INCLUDING "FINANCIAL CONDITION" AND "PAST PERFORMANCE." SINCE
KEPPCO'S PROPOSED FIXED PRICE WAS $46,540 LOWER THAN LING'S PROPOSED
FIXED PRICE AND BECAUSE NASA SAW NO APPRECIABLE DIFFERENCE IN THE TOTAL
ESTIMATED COST OF SPARE PARTS FROM THE TWO OFFERORS, NASA SELECTED
KEPPCO FOR THE CONTRACT.
LING'S PROTEST
(1) NASA FAILED TO TAKE INTO ACCOUNT THE LING SPARE PARTS DISCOUNT
WHICH IS NOT AVAILABLE TO OTHER OFFERORS.
(2) SINCE THE OWNER OF KEPPCO WAS EMPLOYED BY LING THROUGH JUNE 1978,
KEPPCO AND THE OWNER HAVE NO PREVIOUS BUSINESS EXPERIENCE OR HISTORY ON
WHICH "EVALUATION AND GUARANTEE OF PERFORMANCE" CAN BE BASED. MOREOVER,
SINCE KEPPCO IS NEWLY FORMED LING WILL REQUIRE PAYMENT FOR STANDARD
PARTS ON A CASH-ON-DELIVERY BASIS AND PAYMENT IN ADVANCE FOR SPECIAL
PARTS.
(3) KEPPCO ENGAGED IN UNFAIR BUSINESS PRACTICES IN SECURIG THE AWARD
OF THE CONTRACT. FOR EXAMPLE, KEPPCO PROPOSED TO HIRE CURRENT LING
EMPLOYEES TO DO THE WORK. IT WAS INCONSISTENT FOR NASA TO EVALUATE
PROPOSALS ON THE ASSUMPTION THAT EITHER COMPETITOR WOULD OFFER THE SAME
LABOR FORCE. FURTHER, LING RAISES THE QUESTION WHETHER THE LABOR RATES
PROPOSED BY KEPPCO MAY BE ACCEPTED BY NASA "IN LIEU OF FRINGE BENEFITS
SUCH AS HEALTH AND INSURANCE, HOLIDAYS, VACATION AND PAID LEAVES, AND
RETIREMENT WHICH ARE SPECIFIED IN THE RFP AND INCLUDED IN ANY RESULTANT
CONTRACT."
NASA RESPONSE
(1) NASA DID TAKE INTO ACCOUNT LING'S DISCOUNT; HOWEVER, IN ORDER
FOR LING'S DISCOUNT TO OFFSET THE LOWER KEPPCO PRICE, NASA WOULD HAVE TO
ORDER APPROXIMATELY $1 MILLION IN LING PARTS. BY CONTRAST, THE
GOVERNMENT'S ESTIMATE OF PARTS COST IS $67,200 BASED ON PRIOR YEARS'
EXPERIENCE.
(2) THE RFP EVALUATION CRITERIA CONCERNING FINANCIAL CAPABILITY AND
PAST PERFORMANCE, UNDER WHICH LING QUESTIONS KEPPCO'S EVALUATION, WERE
INCLUDED AS UNSCORED "OTHER FACTORS." KEPPCO WAS QUESTIONED REGARDING
FINANCES AND THE RESPONSE WAS SATISFACTORY. AS FOR BUSINESS PRACTICES
AND HISTORY, THE OWNER OF KEPPCO HAS LONG BEEN ASSOCIATED WITH LING IN
PERFORMING THE REQUIREMENTS OF THIS PROCUREMENT. THIS ASSOCIATION WAS
CONSIDERED TO BE ADEQUATE EVIDENCE OF HIS CAPABILITIES IN REGARD TO
THESE REQUIREMENTS.
(3) LING'S COMMENT REGARDING UNFAIR BUSINESS PRACTICES AND UNFAIR
COMPETITION IS CONSIDERED TO BE A MATTER STRICTLY BETWEEN THE COMPANIES
AND IS NOT GERMANE TO THE SELECTION.
ANALYSIS
(KEYED TO THE ABOVE-NUMBERED PROTEST GROUNDS AND RESPONSES)
(1) WE CANNOT QUESTION NASA'S EVALUATION AND LING HAS NOT REBUTTED
SAME.
(2) BASED ON OUR REVIEW OF THE RECORD, LING HAS PRESENTED NO BASIS
FOR US TO QUESTION NASA'S EVALUATION OF THE "OTHER FACTORS" IN QUESTION.
(3) CONTRACTING OFFERORS ARE NOT PREVENTED UNDER PROCUREMENT LAW
PRINCIPLES FROM PROPOSING TO HIRE EMPLOYEES OF OTHER CONCERNS TO PERFORM
GOVERNMENT CONTRACT WORK. CF. INFORMATICS, INC., 57 COMP. GEN. 217
(1978), 78-1 CPD 53. CONSEQUENTLY, IT IS PERMISSIBLE UNDER PROCUREMENT
LAW PRINCIPLES FOR COMPETING OFFERORS GENERALLY TO PROPOSE ESSENTIALLY
THE SAME LABOR FORCE AS APPARENTLY WAS THE CASE HERE.
THE RFP INFORMED OFFERORS THAT THE "DEGREE OF (A PROPOSED EMPLOYEE'S)
COMMITMENT TO EMPLOYMENT BY PROPOSER" WOULD BE EVALUATED. LING DOES NOT
QUESTION THE GENUINENESS OF KEPPCO'S EMPLOYEE COMMITMENTS. INSTEAD,
LING APPARENTLY BELIEVES THAT KEPPCO'S OBTAINING OF THE COMMITMENTS WAS
AN ACT GIVING RISE TO CIVIL OR CRIMINAL LIABILITY AND THAT KEPPCO'S
PROPOSED LABOR HOUR COST FIGURE DOES NOT SUBSTANTIATE ITS COMMITMENTS
BECAUSE REQUIRED FRINGE BENEFITS MAY NOT BE INCLUDED.
TO THE EXTENT LING INSISTS THAT KEPPCO IS LIABLE FOR MONETARY DAMAGES
ARISING FROM THESE COMMITMENTS, LING'S REMEDY IS IN THE COURTS AND NOT
BEFORE OUR OFFICE SINCE THESE COMMITMENTS INVOLVE DISPUTES BETWEEN
PRIVATE PARTIES ONLY. TO THE EXTENT LING BELIEVES THESE COMMITMENTS MAY
INVOLVE CRIMINAL LAW VIOLATIONS, THE MATTER IS FOR THE APPROPRIATE LAW
ENFORCEMENT AUTHORITIES AND NOT OUR OFFICE.
AS TO LING'S SUGGESTION THAT KEPPCO'S PROPOSED LABOR HOUR COST
NECESSARILY MEANS THAT CERTAIN REQUIRED FRINGE BENEFITS WILL NOT BE
PROVIDED, IT IS SUFFICIENT TO POINT OUT THAT THE AWARDEE IS
CONTRACTUALLY COMMITTED TO PROVIDE THOSE BENEFITS. THE ACTUAL
ENFORCEMENT OF THIS CONTRACTUAL COMMITMENT IS A MATTER OF CONTRACT
ADMINISTRATION WHICH IS THE RESPONSIBILITY OF THE AGENCY RATHER THAN OUR
OFFICE.
PROTEST DENIED IN PART AND DISMISSED IN PART.
B-194131, JUL 19, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
MEMBER OF NATIONAL ARTHRITIS ADVISORY BOARD WHO MUST HIRE AN
ATTENDANT TO CARE FOR HER ARTHRITIC CHILD WHEN SHE ATTENDS OFFICIAL
ACTIVITIES OF THE BOARD MAY BE REIMBURSED THE COST OF SUCH EXPENSES BY
THE BOARD. IN VIEW OF THE STATUTORY REQUIREMENT THAT ONE OF THE BOARD
MEMBERS BE THE PARENT OF A CHILD WHO HAS ARTHRITIS SUCH EXPENSE MAY BE
CONSIDERED ESSENTIAL TO THE BOARD CARRYING OUT ITS ADVISORY FUNCTIONS
UNDER 42 U.S.C. SEC. 289C-7.
NATIONAL ARTHRITIS ADVISORY BOARD - EXPENSES FOR ATTENDANTS FOR
ARTHRITIC CHILD OF A BOARD MEMBER:
MR. WILLIAM E. PLUNKETT, EXECUTIVE DIRECTOR OF THE NATIONAL ARTHRITIS
ADVISORY BOARD (BOARD) ASKS WHETHER THE BOARD MAY REIMBURSE ONE OF ITS
MEMBERS FOR THE EXPENSES OF AN ATTENDANT FOR HER ARTHRITIC CHILD WHILE
SHE IS ATTENDING OFFICIAL MEETINGS AND ACTIVITIES OF THE BOARD.
THE BOARD WAS ESTABLISHED UNDER SECTION 103 OF THE ARTHRITIS,
DIABETES, AND DIGESTIVE DISEASE AMENDMENTS OF 1976, PUBLIC LAW 94-562,
OCTOBER 19, 1976, 90 STAT. 2646 (42 U.S.C. 289C-7 (1976)). THE
RESPONSIBILITIES OF THE BOARD INCLUDE THE REVIEW AND EVALUATION OF THE
IMPLEMENTATION OF THE ARTHRITIS PLAN FORMULATED UNDER SECTION 3(G) OF
THE NATIONAL ARTHRITIS ACT OF 1974, PUBLIC LAW 93-640, JANUARY 4, 1975,
88 STAT. 2219. IN ADDITION, THE BOARD MAKES RECOMMENDATIONS TO
CONGRESS, THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, AND THE HEADS
OF OTHER APPROPRIATE FEDERAL AGENCIES WITH RESPECT TO THE ARTHRITIS PLAN
AND THE GUIDELINES, POLICIES, AND PROCEDURES OF FEDERAL PROGRAMS
RELATING TO ARTHRITIS.
SUBSECTION 289C-7(A)(4) OF TITLE 42, UNITED STATES CODE, PROVIDES
THAT FOUR MEMBERS OF THE GENERAL PUBLIC SHALL BE APPOINTED TO THE BOARD
ONE OF WHOM SHALL BE THE PARENT OF A CHILD WHO HAS ARTHRITIS. MR.
PLUNKETT ADVISES THAT THIS BOARD MEMBER IS THE PARENT OF A CHILD WITH
JUVENILE RHEUMATOID ARTHRITIS. THE CONDITION OF THE CHILD REQUIRES THAT
SOMEONE BE IN ATTENDANCE AT ALL TIMES. ONE PARENT CANNOT MEET THIS
REQUIREMENT. THUS, WHEN THE MEMBER IS IN ATTENDANCE AT ACTIVITIES AND
MEETINGS OF THE BOARD SHE HAS BEEN INCURRING THE EXPENSES OF A QUALIFIED
ATTENDANT FOR HER CHILD. WE HAVE BEEN ASKED WHETHER THE BOARD MAY
REIMBURSE THE MEMBER FOR SUCH EXPENSES.
WE HAVE HELD THAT THE FACT THAT AN EMPLOYEE OR HIS FAMILY WOULD NOT
HAVE HAD AN OCCASION TO INCUR THE EXPENSE OF A SITTER FOR HIS CHILD AT
HIS PERMANENT DUTY STATION BUT FOR THE PERFORMANCE OF OFFICIAL TRAVEL IS
NOT A SUFFICIENT BASIS FOR SHIFTING THE EXPENSES TO THE GOVERNMENT.
SEE: B-162466, SEPTEMBER 27, 1967. HOWEVER, THE ATTENDANT'S SERVICES
UNDER CONSIDERATION HERE ARE DISTINGUISHABLE AS THEY RELATE TO THE
SPECIAL NEEDS OF AN ARTHRITIC CHILD WHERE THE LAW EXPRESSLY REQUIRES
THAT THE INDIVIDUAL PERFORMING THE OFFICIAL TRAVEL BE THE PARENT OF A
CHILD WHO HAS ARTHRITIS.
IN DECISION B-189010, AUGUST 15, 1977, WE HELD THAT THE ARCHITECTURAL
AND TRANSPORTATION BARRIERS COMPLIANCE BOARD COULD PAY THE EXPENSES OF
HIRING AN ATTENDANT FOR A HANDICAPPED MEMBER OF THE NATIONAL ADVISORY
COMMITTEE ON AN ACCESSIBLE ENVIRONMENT INCIDENT TO HIS ATTENDING
PERIODIC OFFICIAL MEETINGS. WE DETERMINED THAT SUCH EXPENSES WERE
ESSENTIAL TO ACCOMPLISH THE ADVISORY FUNCTIONS OF THE COMMITTEE UNDER
ITS STATUTORY AUTHORITY, 29 U.S.C. SEC. 792(A) (1976), IN VIEW OF THE
STATUTORY REQUIREMENT THAT A MAJORITY OF THE COMMITTEE MEMBERS BE
HANDICAPPED.
AS NOTED ABOVE, THE CONGRESS HAS CHARGED THE BOARD WITH THE
RESPONSIBILITY OF ADVISING THE CONGRESS AND FEDERAL AGENCIES REGARDING
THE IMPLEMENTATION OF THE ARTHRITIS PLAN AND FEDERAL PROGRAMS RELATING
TO ARTHRITIS. IN REQUIRING THAT ONE OF THE BOARD MEMBERS HAVE AN
ARTHRITIC CHILD THE CONGRESS HAS DETERMINED THAT THE ADVICE OF SUCH AN
INDIVIDUAL IS NECESSARY TO ENABLE THE BOARD TO PROPERLY CARRY OUT ITS
RESPONSIBILITIES. IN LIGHT OF THIS LEGISLATIVE MANDATE AND SINCE THE
BOARD MEMBER MUST HIRE AN ATTENDANT FOR HER ARTHRITIC CHILD IN ORDER TO
BE ABLE TO ATTEND BOARD MEETINGS AND OTHER OFFICIAL FUNCTIONS, THE
EXPENSE INVOLVED MAY PROPERLY BE VIEWED AS NECESSARY IN CARRYING OUT THE
BOARD'S ADVISORY FUNCTIONS UNDER 42 U.S.C. 289C-7. ACCORDINGLY, THE
BOARD MAY PAY THE COSTS OF AN ATTENDANT FOR THE MEMBER'S ARTHRITIC CHILD
WHEN SHE IS ABSENT FROM HER RESIDENCE INCIDENT TO HER ATTENDANCE AT
OFFICIAL BOARD ACTIVITIES. SUCH EXPENSES MAY NOT EXCEED THE CUSTOMARY
COSTS THE BOARD MEMBER INCURS FOR SUCH SERVICES WHEN SHE IS AWAY FROM
HER CHILD.
B-194845, JUL 19, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROCURING AGENCY MAY PROPERLY REJECT A BID AS NONRESPONSIVE WHEN
THE DESCRIPTIVE LITERATURE ACCOMPANYING A BID SHOWS THAT THE OFFERED
ITEM DOES NOT CONFORM TO THE SPECIFICATIONS.
2. PROTESTER'S OBJECTIONS TO SPECIFICATION'S REQUIREMENT FOR CELL
DOOR CLUTCH MECHANISM FILED AFTER BID OPENING ARE UNTIMELY AND NOT FOR
CONSIDERATION ON THE MERITS.
3. DESCRIPTIVE LITERATURE CLAUSE IN IFB WHICH REQUIRES LITERATURE
WHICH "FULLY ILLUSTRATES AND DESCRIBES THE MAJOR DEVICES AND COMPONENTS
OF THE SYSTEM" DOES NOT ADEQUATELY ADVISE BIDDERS OF THE NATURE AND
EXTENT OF DATA REQUIRED AND DOES NOT COMPLY WITH FEDERAL PROCUREMENT
REGULATIONS (FPR) 1-2.202-5. GAO RECOMMENDS AGENCY CONFORM ITS
DESCRIPTIVE LITERATURE PROVISION TO FPR AND GAO DECISIONS.
STEWART-DECATUR SECURITY SYSTEMS, INC.:
THE DEPARTMENT OF JUSTICE, BUREAU OF PRISONS (BUREAU) ISSUED
INVITATION FOR BIDS (IFB) 133-12412 FOR THE REPLACEMENT OF CELL DOORS
AND LOCKING DEVICES FOR THE UNITED STATES PENITENTIARY, LEWISBURG,
PENNSYLVANIA. THE BID OF STEWART-DECATUR SECURITY SYSTEMS, INC.
(STEWART), WAS REJECTED AS NONRESPONSIVE BECAUSE IT DID NOT CONFORM TO
THE SPECIFICATION FOR A CLUTCH MECHANISM TO CONTROL THE MOTOR WHICH
WOULD OPERATE THE SLIDING CELL DOORS.
THE PROTESTER MAINTAINS THAT ITS SYSTEM IS EQUAL IN PERFORMANCE TO
ONE WHICH OPERATES WITH A CLUTCH AND THAT ITS BID, THEREFORE, IS
RESPONSIVE.
THE IFB UNAMBIGUOUSLY REQUIRED THAT THE CELL DOOR BE EQUIPPED WITH A
CLUTCH MECHANISM. THE IFB SPECIFIED:
"2.02 FABRICATION AND MANUFACTURER
"A. OPERATING AND LOCKING MECHANISMS
"5. EACH SLIDING DOOR SHALL BE OPERATED BY AN INDIVIDUAL ELECTRIC
MOTOR ***. THE MOTOR SHALL OPERATE THROUGH A CLUTCH AND SUITABLE
MECHANICAL DRIVE ***. THE CLUTCH SHALL BE DESIGNED TO SLIP AT A
RESISTANT PRESSURE OF APPROXIMATELY 40 POUNDS. ***"
WHILE THE IFB REQUIRED BIDDERS TO SUBMIT DESCRIPTIVE LITERATURE WITH
THEIR BIDS, THIS DID NOT, AS THE PROTESTER SEEMS TO CONTEND, MODIFY THE
IFB'S OTHERWISE CLEAR REQUIREMENT FOR A CLUTCH MECHANISM. THE PURCHASE
DESCRIPTION DID NOT INDICATE, AS IN THE CASE OF BRAND NAME OR EQUAL
PROCUREMENTS, THAT AN EQUIVALENT PRODUCT MEETING SPECIFIED SALIENT
CHARACTERICTICS WOULD BE ACCEPTABLE.
A BID MAY BE REJECTED AS NONRESPONSIVE WHEN THE DESCRIPTIVE
LITERATURE ACCOMPANYING A BID SHOWS THAT THE OFFERED ITEM DOES NOT
CONFORM TO THE SPECIFICATION REQUIREMENTS. A. L. LEFTHERIOTIS LTD.,
B-190720, MARCH 30, 1978, 78-1 CPD 251. HERE, THE PROTESTER'S DRAWINGS
AND DESCRIPTIVE LITERATURE SHOWED THAT ITS CELL DOOR OPERATING AND
LOCKING DEVICE DID NOT USE A CLUTCH MECHANISM BUT INSTEAD UTILIZED
ELECTRONIC MEANS TO CONTROL THE OPERATING PRESSURE OF THE CELL DOOR.
THEREFORE, THE BUREAU PROPERLY REJECTED STEWART'S BID AND MADE AWARD TO
THE NEXT LOW BIDDER. 46 COMP. GEN. 315 (1966).
THE PROTESTER ARGUES THAT THE CLUTCH MECHANISM IS NOT GENERALLY USED
IN THE INDUSTRY AND THAT ITS SYSTEM HAS BEEN WIDELY USED ON MANY
PROJECTS. WE CONSTRUE THIS BASIS FOR PROTEST AS ONE AGAINST THE
SPECIFICATIONS THEMSELVES, I.E., THAT THE IFB'S REQUIREMENT FOR A CLUTCH
MECHANISM IS UNDULY RESTRICTIVE OF COMPETITION AND DOES NOT REPRESENT
THE CURRENT STATE-OF-THE-ART IN THE INDUSTRY.
HOWEVER, OUR BID PROTEST PROCEDURES REQUIRE THAT PROTESTS BASED UPON
ALLEGED DEFECTS OR IMPROPRIETIES IN THE SOLICITATION WHICH ARE APPARENT
BEFORE BID OPENING MUST BE FILED PRIOR TO BID OPENING. 4 C.F.R. SEC.
20.2(B)(1) (1979). INASMUCH AS STEWART DID NOT RAISE ANY OBJECTIONS TO
THE SPECIFICATION'S CLEAR REQUIREMENT FOR A CLUTCH MECHANISM UNTIL AFTER
BID OPENING, ITS PROTEST ON THIS GROUND IS UNTIMELY AND WILL NOT BE
CONSIDERED ON THE MERITS.
ALTHOUGH WE HAVE DENIED STEWART'S PROTEST, WE OBSERVE THAT THE
DESCRIPTIVE LITERATURE PROVISION IN THE IFB WAS DEFECTIVE. WHILE THE
CLAUSE STATED THAT THE LITERATURE WAS REQUIRED TO FULLY ILLUSTRATE AND
DESCRIBE "MAJOR DEVICES AND COMPONENTS," AND THAT "FAILURE TO SUBMIT
THIS DESCRIPTIVE LITERATURE WITH A BID SHALL CONSTITUTE CAUSE TO REJECT
THAT BID FOR CONSIDERATION," WE THINK THIS DOES NOT FULLY COMPLY WITH
THE REQUIREMENTS OF FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.202-5(D).
WHERE, AS HERE, DESCRIPTIVE DATA IS REQUIRED FOR DETERMINING THE
RESPONSIVENESS OF A BID RATHER THAN THE RESPONSIBILITY OF THE BIDDER,
THE IFB MUST CLEARLY ESTABLISH THE NATURE AND EXTENT OF THE DATA
REQUIRED, THE PURPOSE OF THE DATA, AND WHETHER ALL OF THE DETAILS OF THE
DATA WILL BE CONSIDERED AN INTEGRAL PART OF THE AWARDED CONTRACT. 38
COMP. GEN. 59 (1958); 46 COMP. GEN. 315, SUPRA.
WE HAVE HELD THAT THE MERE RECITAL IN THE DESCRIPTIVE LITERATURE
CLAUSE OF BROAD CATEGORIES OF SUBJECTS (E.G., "DESIGN, MATERIALS,
COMPONENTS AND PERFORMANCE CHARACTERISTICS"), WHICH ARE LISTED IN FPR
1-2.202-5(D)(1) AS EXAMPLES OF GENERAL SUBJECTS WHICH MIGHT REQUIRE
DESCRIPTION, DOES NOT PROVIDE FOR A COMMON EVALUATION OF BIDS BECAUSE IT
DOES NOT PUT BIDDERS ON NOTICE OF WHAT DETAIL IS ESSENTIAL TO MAKE THEIR
BIDS RESPONSIVE. 46 COMP. GEN. 1, 5 (1966); ID. 315, SUPRA. ALTHOUGH
THE DEFECT DID NOT PREJUDICE THE PROTESTER, WE ARE RECOMMENDING THAT THE
BUREAU CONFORM ITS DESCRIPTIVE LITERATURE PROVISION TO THE FEDERAL
PROCUREMENT REGULATIONS AND DECISIONS OF OUR OFFICE.
THE PROTEST IS DENIED.
B-195252, JUL 19, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
A FORMER NAVY OFFICER'S DEBT RESULTING FROM AN ERRONEOUS PAYMENT OF
BASIC ALLOWANCE FOR SUBSISTENCE WHEN AN ACCOUNTING ERROR IN PLACING A
DECIMAL POINT RESULTED IN AN OVERPAYMENT IN EXCESS OF $1,000 IN HIS PAY
AT DISCHARGE MAY NOT BE WAIVED SINCE HE KNEW OR SHOULD HAVE KNOWN FROM
THE SIZE OF THE OVERPAYMENT AND THE FACT THAT HE WAS RECEIVING AN
ESTIMATED PAYMENT THAT AN ERROR HAD BEEN MADE. SUCH KNOWLEDGE ON HIS
PART CARRIED WITH IT AN OBLIGATION TO BRING THE MATTER TO THE ATTENTION
OF THE APPROPRIATE OFFICIALS AND TO RETURN THE EXCESS SUM OR TO SET IT
ASIDE FOR REFUND AT SUCH TIME AS THE ACCOUNTING ERROR WAS CORRECTED.
EDWARD R. HOLLYFIELD:
THE ISSUE PRESENTED IN THIS CASE UPON AN APPEAL OF OUR CLAIMS
DIVISION'S DENIAL OF A WAIVER IS WHETHER WAIVER OF AN ERRONEOUS PAYMENT
OF BASIC ALLOWANCE FOR SUBSISTENCE (BAS) MAY BE GRANTED UNDER 10 U.S.C.
2774 (1976) IN THE CIRCUMSTANCES DESCRIBED. THE ANSWER IS NO SINCE WE
FIND THAT THE RECIPIENT OF THE OVERPAYMENT SHOULD HAVE BEEN AWARE OF THE
STRONG POSSIBILITY HE HAD BEEN OVERPAID AND SHOULD HAVE BEEN PREPARED TO
REFUND THE AMOUNT DUE.
MR. EDWARD R. HOLLYFIELD, A FORMER LIEUTENANT IN THE UNITED STATES
NAVY, WHILE SERVING ON ACTIVE DUTY WAS ENTITLED TO RECEIVE BAS FROM JULY
1, 1975, THROUGH SEPTEMBER 12, 1975, THE DATE OF HIS SCHEDULED
SEPARATION FROM THE NAVY, A TOTAL OF $121.24. THROUGH AN ADMINISTRATIVE
ERROR THERE WAS A SHIFT IN THE DECIMAL POINT AND HE WAS ERRONEOUSLY
CREDITED WITH $1,212.48 ON HIS FINAL PAY RECORD. THIS RESULTED IN AN
OVERPAYMENT OF $1,091.24 AT THE TIME OF HIS SEPARATION WHICH WAS LATER
REDUCED TO $795.80 DUE TO A CREDIT OF ADDITIONAL PAY AND ALLOWANCES
FOUND DUE HIM. MR. HOLLYFIELD ACTUALLY RECEIVED $3,773.46 AS A FINAL
PAYMENT OF PAY AND ALLOWANCES UPON DISCHARGE. THE ERRONEOUS PAYMENT
RESULTED FROM AN ADMINISTRATIVE ERROR WITH NO INDICATION OF FRAUD, OR
MISREPRESENTATION ON THE PART OF THE MEMBER OR ANY OTHER PERSON HAVING
AN INTEREST IN THE MATTER.
MR. HOLLYFIELD ASSERTS THAT HIS PAY RECORDS WERE MAILED TO THE NAVY
FINANCE CENTER, CLEVELAND, BEFORE HIS DISCHARGE AND THAT WHEN HE
RECEIVED A CHECK IN A LUMP SUM FOR ALL OF HIS UNPAID PAY AND ALLOWANCES,
HE WAS UNAWARE THAT HE HAD BEEN OVERPAID THE SUM OF $1,091.24. IT WAS
NOT UNTIL SEVERAL MONTHS LATER, MARCH 1976, UPON INQUIRING ABOUT A CLAIM
FOR ARREARS OF PAY FOR THE PERIOD SEPTEMBER 13 TO SEPTEMBER 19, 1975, A
PERIOD IN WHICH HIS SEPARATION FROM THE NAVY WAS DELAYED BY A MEDICAL
EXAMINATION, THAT THE ERRONEOUS PAYMENT WAS BROUGHT TO HIS ATTENTION.
MR. HOLLYFIELD ACKNOWLEDGES, HOWEVER, THAT THE FINAL PAYMENT HE RECEIVED
EXCEEDED THE MAXIMUM HE HAD EXPECTED BY ALMOST $500. WE ALSO NOTE THAT
AT THE TIME OF HIS DISCHARGE HE SIGNED A STATEMENT ACKNOWLEDGING THAT
THE PAYMENT HE RECEIVED WAS AN ESTIMATED AMOUNT, AND THAT FINAL PAYMENT
OR COLLECTION ACTION WOULD BE MADE BY THE NAVY FINANCE CENTER.
SECTION 2774 OF TITLE 10, UNITED STATES CODE (1976) AUTHORIZES THE
COMPTROLLER GENERAL TO WAIVE CERTAIN CLAIMS -
"*** THE COLLECTION OF WHICH WOULD BE AGAINST EQUITY AND GOOD
CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES ***"
HOWEVER, THE LAW ALSO PROVIDES THAT THE COMPTROLLER GENERAL MAY NOT
EXERCISE THAT WAIVER AUTHORITY -
"IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN
INDICATION OF *** FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE MEMBER
***"
WE INTERPRET THE WORD "FAULT" AS USED IN 10 U.S.C. 2774, AS INCLUDING
SOMETHING MORE THAN A PROVEN OVERT ACT OR OMISSION BY THE MEMBER. THUS,
WE CONSIDER FAULT TO EXIST IF IN LIGHT OF ALL THE FACTS IT IS DETERMINED
THAT THE MEMBER SHOULD HAVE KNOWN THAT AN ERROR EXISTED AND TAKEN ACTION
TO HAVE IT CORRECTED. THE STANDARD WE EMPLOY IS TO DETERMINE WHETHER A
REASONABLE PERSON SHOULD HAVE BEEN AWARE THAT HE WAS RECEIVING PAYMENT
IN EXCESS OF HIS PROPER ENTITLEMENTS. B-191757, JULY 24, 1978.
AT THE TIME OF HIS DISCHARGE MR. HOLLYFIELD WAS SERVING AS AN OFFICER
(0-3) AND HAD COMPLETED 7 YEARS, 3 MONTHS AND 5 DAYS OF ACTIVE DUTY.
CONSIDERING HIS OFFICER STATUS AND THE LENGTH OF HIS SERVICE IT IS NOT
UNREASONABLE TO ASSUME THAT HE KNEW OR SHOULD HAVE KNOWN HIS APPROXIMATE
PAY ENTITLEMENT AND SHOULD HAVE RECOGNIZED WHEN HE RECEIVED HIS FINAL
PAY AND ALLOWANCES THAT HE HAD BEEN OVERPAID, PARTICULARLY WHEN THE SIZE
OF THE NET OVERPAYMENT WAS $795.80. IT WOULD APPEAR THAT MR. HOLLYFIELD
HAD SOME IDEA THAT HE HAD RECEIVED AN OVERPAYMENT SINCE HE CLAIMS THAT
HE HAD BEEN EXPECTING BETWEEN $3,000-$3,300 AS A FINAL PAYMENT, AND HE
ACKNOWLEDGED AT THE TIME OF DISCHARGE THAT HE WAS RECEIVING ONLY AN
ESTIMATED PAYMENT SUBJECT TO LATER CORRECTION BY THE FINANCE CENTER. IT
WAS THEREFORE INCUMBENT UPON HIM TO BRING THIS MATTER TO THE ATTENTION
OF THE PROPER OFFICIALS SINCE EVEN BY HIS OWN CALCULATIONS THE FINAL
PAYMENT OF $3,773 WAS $473 MORE THAN THE MAXIMUM HE INDICATES HE HAD
EXPECTED. THIS HE DID NOT DO. THEREFORE, WE CANNOT CONCLUDE THAT HE
WAS NOT WITHOUT FAULT IN THE MATTER FOR NOT REPORTING THE SUSPECTED
OVERPAYMENT. AT THE VERY LEAST HE SHOULD HAVE SET THE AMOUNT ASIDE FOR
REFUND AT SUCH TIME AS THE ACCOUNTING ERROR WAS CORRECTED. SEE
B-183460, MAY 28, 1975, AND B-191757, SUPRA. IN THESE CIRCUMSTANCES THE
FACT ALONE THAT MR. HOLLYFIELD MAY INCUR SOME FINANCIAL HARDSHIP IN
REPAYING THE DEBT IS NOT SUFFICIENT FOR US TO AUTHORIZE WAIVER.
ACCORDINGLY, THE ACTION TAKEN BY OUR CLAIMS DIVISION DENYING WAIVER
IS SUSTAINED, AND MR. HOLLYFIELD SHOULD MAKE PROMPT ARRANGEMENTS TO
SETTLE HIS DEBT.
B-193535, JUL 18, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
TRANSFERRED EMPLOYEE CLAIMS REIMBURSEMENT FOR LOAN ORIGINATION FEE
INCIDENT TO PURCHASE OF HOME AT NEW LOCATION. CHARGES CONTAINED IN SUCH
LUMP SUM MAY BE REIMBURSED IF EXCLUDABLE FROM FINANCE CHARGES UNDER
TRUTH IN LENDING ACT BY REGULATION Z, 12 C.F.R. 226.4(E), AND ITEMIZED
TO SHOW THE PORTION OF FEE, ALLOCABLE TO EACH ALLOWABLE ITEM. IN
ABSENCE OF SPECIFIC INFORMATION AS TO AMOUNT OF LOAN ORIGINATION FEE
ALLOCABLE TO OTHERWISE REIMBURSABLE ITEMS, PAYMENT MAY NOT BE MADE.
MR. JOHN R. HUGHES, JR.:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR AN ADVANCE DECISION
SUBMITTED BY MR. JOHN HOUSTON, AUTHORIZED CERTIFYING OFFICER, FIELD
FINANCE OFFICE, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, ON THE
QUESTION AS TO THE PROPRIETY OF MAKING PAYMENT ON A VOUCHER IN THE
AMOUNT OF $250, IN FAVOR OF MR. JOHN R. HUGHES, JR., AN EMPLOYEE OF THAT
AGENCY, FOR CERTAIN REAL ESTATE EXPENSES INCURRED INCIDENT TO HIS
OFFICIAL CHANGE OF STATION IN 1978.
THE SUBMISSION SHOWS THAT ON TRANSFER, MR. HUGHES PURCHASED A HOME AT
HIS NEW STATION. INCIDENT TO THAT PURCHASE, MR. HUGHES FILED A CLAIM
FOR EXPENSES TOTALLING $445.80. THE LISTED ITEMS IN THE VOUCHER WERE:
LOT SURVEY - $55; RECORDING FEES - $16; LENDERS COVERAGE, TITLE
INSURANCE - $124.80; AND LOAN ORIGINATION FEE - $250. IN RESPONSE, THE
ADMINISTRATIVE OFFICE ALLOWED PAYMENT ON JUNE 23, 1978, FOR $195.80, BUT
DISALLOWED PAYMENT FOR THE LOAN ORIGINATION FEE, NOTING TO MR. HUGHES
THAT IN ORDER FOR ANY PORTION OF THAT FEE TO BE REIMBURSABLE, AN
ITEMIZATION OF EXPENSES MAKING UP THAT FEE WOULD BE REQUIRED.
MR. HUGHES ATTEMPTED TO SECURE A BREAKDOWN OF THE ITEMS AND COSTS
FROM THE LENDING INSTITUTION. THEY ADVISED HIM THAT THE FEE IN QUESTION
WAS NOT AN INTEREST CHARGE, BUT RATHER IT WAS A FEE COVERING THEIR LOAN
PROCESSING, INCLUDING A CREDIT REPORT AND APPRAISAL, BUT THEY WOULD BE
UNABLE TO ITEMIZE THE COSTS FOR EACH. FURTHER EFFORTS TO SECURE THE
REQUIRED ITEMIZATION WERE UNSUCCESSFUL.
PARAGRAPH 2-6.2 OF THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7, MAY
1973) PROVIDES IN PART:
"D. MISCELLANEOUS EXPENSES. THE FOLLOWING EXPENSES ARE REIMBURSABLE
WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES *** FHA OR VA FEE
FOR LOAN APPLICATION, COSTS OF PREPARING CREDIT REPORTS, MORTGAGE AND
TRANSFER TAXES, STATE REVENUE STAMPS, AND SIMILAR FEES AND CHARGES. ***
INTEREST ON LOANS, POINTS, AND MORTGAGE DISCOUNTS ARE NOT REIMBURSABLE.
*** NOTWITHSTANDING THE ABOVE, NO FEE, COST, CHARGE, OR EXPENSE IS
REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE
UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, AND
REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM. ***"
THE PERTINENT PARTS OF REGULATION Z, 12 C.F.R. 226.4 (1977), STATE AS
FOLLOWS:
"226.4 DETERMINATION OF FINANCE CHARGE.
"(A) GENERAL RULE. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE
AMOUNT OF THE FINANCE CHARGE IN CONNECTION WITH ANY TRANSACTION SHALL BE
DETERMINED AS THE SUM OF ALL CHARGES, PAYABLE DIRECTLY OR INDIRECTLY BY
THE CUSTOMER, AND IMPOSED DIRECTLY OR INDIRECTLY BY THE CREDITOR AS AN
INCIDENT TO OR AS A CONDITION OF THE EXTENSION OF CREDIT, WHETHER PAID
OR PAYABLE BY THE CUSTOMER, THE SELLER, OR ANY OTHER PERSON ON BEHALF OF
THE CUSTOMER TO THE CREDITOR OR TO A THIRD PARTY, INCLUDING ANY OF THE
FOLLOWING TYPES OF CHARGES;
"(2) SERVICE, TRANSACTION, ACTIVITY, OR CARRYING CHARGE.
"(3) LOAN FEE, POINTS, FINDER'S FEE, OR SIMILAR CHARGE.
"(E) EXCLUDABLE CHARGES, REAL PROPERTY TRANSACTIONS. THE FOLLOWING
CHARGES IN CONNECTION WITH ANY REAL PROPERTY TRANSACTION, PROVIDED THEY
ARE BONA FIDE, REASONABLE IN AMOUNT, AND NOT FOR THE PURPOSE OF
CIRCUMVENTION OR EVASION OF THIS PART, SHALL NOT BE INCLUDED IN THE
FINANCE CHARGE WITH RESPECT TO THAT TRANSACTION:
"(1) FEES OR PREMIUMS FOR TITLE EXAMINATION, ABSTRACT OF TITLE, TITLE
INSURANCE, OR SIMILAR PURPOSES AND FOR REQUIRED RELATED PROPERTY
SURVEYS.
"(2) FEES FOR PREPARATION OF DEEDS, SETTLEMENT STATEMENTS, OR OTHER
DOCUMENTS.
"(3) AMOUNTS REQUIRED TO BE PLACED OR PAID INTO AN ESCROW OR TRUSTEE
ACCOUNT FOR FUTURE PAYMENTS OF TAXES, INSURANCE, AND WATER, SEWER, AND
LAND RENTS.
"(4) FEES FOR NOTARIZING DEEDS AND OTHER DOCUMENTS.
"(5) APPRAISAL FEES.
"(6) CREDIT REPORTS."
REGULATION Z EXPRESSLY CATEGORIZES LOAN FEES AS FINANCE CHARGES
INCIDENT TO OR AS A CONDITION OF THE EXTENSION OF CREDIT BY A LENDER.
OUR POSITION THAT LOAN ORIGINATION FEES ARE FINANCE CHARGES UNDER THE
REGULATION AND, THEREFORE, NOT REIMBURSABLE, IS LONG-STANDING AND BASED
ON THE RATIONALE THAT A FEE OF THIS TYPE WITHOUT REFERENCE TO THE EXTENT
OF SERVICES ACTUALLY PERFORMED BY THE LENDER IS MORE IN THE NATURE OF A
CHARGE FOR THE HIRE OF MONEY THAN IT IS A CHARGE FOR COSTS CUSTOMARY
SERVICES PERFORMED IN THE COURSE OF SETTLEMENT AND PROCESSING A LOAN.
SEE B-183972, APRIL 16, 1976. THUS, WHERE IT IS CLAIMED THAT A LOAN
ORIGINATION FEE IS LEVIED TO REIMBURSE THE LENDER FOR COSTS OF SPECIFIC
SERVICES PERFORMED, WE REQUIRE AN ITEMIZATION OF THOSE CHARGES IN ORDER
TO INSURE THAT REIMBURSEMENT IS AUTHORIZED ONLY FOR THOSE CHARGES WHICH
ARE NOT A PART OF FINANCE CHARGES. B-184703, APRIL 30, 1976.
IN THE PRESENT CASE, WHILE IT HAS BEEN INDICATED THAT CERTAIN
SERVICES, OTHERWISE REIMBURSABLE, WERE INCLUDED IN THE $250 FEE, THE
COSTS ATTRIBUTABLE TO THOSE REIMBURSABLE ITEMS WERE NOT STATED. THUS,
IN THE ABSENCE OF SUCH SPECIFIC INFORMATION, WE ARE UNABLE TO SEPARATE
REIMBURSABLE ITEMS FROM THOSE WHICH ARE NONREIMBURSABLE, OR DETERMINE
WHETHER THE CHARGES FOR OTHERWISE REIMBURSABLE ITEMS ARE REASONABLE.
ACCORDINGLY, BASED ON THE RECORD BEFORE US, THE AMOUNT CLAIMED BY MR.
HUGHES MAY NOT BE PAID.
B-194433, JUL 18, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
NUCLEAR REGULATORY COMMISSION REQUESTED ADVANCE DECISION ON PAYMENT
FOR JAZZ ENSEMBLE THAT PERFORMED AT EEO SPECIAL EMPHASIS PROGRAM. OUR
DECISION B-191737, JANUARY 5, 1979. 58 COMP. GEN. 202, ESTABLISHED RULE
THAT CERTAIN LIVE ARTISTIC PRESENTATIONS ASSOCIATED WITH EEO PROGRAMS
WOULD BE CONSIDERED AS EMPLOYEE ENTERTAINMENT AND NOT ALLOWED,
REGARDLESS OF CHARACTERIZATION BY SPONSORING AGENCY. HOWEVER, THAT
DECISION EXEMPTED EXPENDITURES PRIOR TO THE DECISION FROM THE RULE.
BECAUSE NRC HAD ISSUED ITS PURCHASE ORDER PRIOR TO ACTUAL KNOWLEDGE OF
CITED DECISION PAYMENT MAY BE MADE IN THIS CASE.
NUCLEAR REGULATORY COMMISSION - LIVE ENTERTAINMENT FOR NATIONAL BLACK
HISTORY MONTH:
THE DIRECTOR, DIVISION OF ACCOUNTING, OFFICE OF THE CONTROLLER,
NUCLEAR REGULATORY COMMISSION (NRC), REQUESTED AN ADVANCE DECISION ON
WHETHER HE MAY USE APPROPRIATED FUNDS TO PAY A VOUCHER REPRESENTING
COSTS INCURRED BY THE NRC OFFICE OF EQUAL EMPLOYMENT OPPORTUNITY (EEO)
FOR THE SERVICES OF A JAZZ ENSEMBLE THAT PERFORMED IN AN AGENCY EEO
PROGRAM ON FEBRUARY 15, 1979.
DURING THE SECOND HALF OF 1978, THE NRC EEO OFFICE BEGAN PLANNING A
PROGRAM IN OBSERVANCE OF BLACK HISTORY MONTH. REPRESENTATIVES OF THAT
OFFICE DISCUSSED ITS PLANS WITH THE LEGAL STAFF OF THE NRC TO DETERMINE
WHETHER IT COULD USE APPROPRIATED FUNDS TO HIRE A BAND TO PERFORM IN THE
PROPOSED PROGRAM. THE LEGAL STAFF VERBALLY ADVISED THE NRC EEO OFFICE
IN LATE NOVEMBER OR DECEMBER 1978 AND IN A WRITTEN MEMORANDUM DATED
JANUARY 3, 1979, THAT IT WAS OF THE OPINION THE ANTICIPATED EXPENDITURE
WAS LEGALLY JUSTIFIED.
RELYING ON THE LEGAL ADVICE IT RECEIVED, NRC'S EEO STAFF PROCEEDED TO
ORGANIZE A BLACK HISTORY MONTH PROGRAM. ON FEBRUARY 1, 1979, PURSUANT
TO THAT OFFICE'S REQUEST, THE NRC'S DIVISION OF CONTRACTS ISSUED A
PURCHASE ORDER TO PROCURE THE SERVICES OF THE JAZZ ENSEMBLE FOR THE
PROGRAM. ACCORDING TO THE DIRECTOR OF THE DIVISION OF ACCOUNTS:
"ON FEBRUARY 14, 1979, SHORTLY AFTER THIS PURCHASE ORDER WAS
PRESENTED TO THE NRC'S DIVISION OF ACCOUNTING FOR RECORDING AS AN
OBLIGATION OF NRC'S APPROPRIATED FUNDS, THE DIVISION OF ACCOUNTING
RECEIVED FROM GAO, PURSUANT TO OUR REQUEST, COPIES OF C. G. DECISIONS
B-191737 DATED JANUARY 5, 1979, (ATTACHMENT C) AND B-193661 DATED
JANUARY 19, 1979, (ATTACHMENT D). THESE OPINIONS VIEWED THE MUSICAL
ACTIVITIES CONTRACTED FOR IN CONNECTION WITH SIMILAR EEO PROGRAMS
CONDUCTED BY THE BUREAU OF MINES AND THE EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION AS THE PROCUREMENT OF ENTERTAINMENT FOR FEDERAL EMPLOYEES
AND, AS SUCH, WERE DETERMINED NOT TO BE PROPER EXPENDITURES OF
APPROPRIATED FUNDS."
THE BAND PERFORMED ON FEBRUARY 15, 1979. OUR DECISION WAS ISSUED TWO
DAYS AFTER THE NRC LEGAL OPINION OF JANUARY 3. AS NOTED, NRC'S DIVISION
OF ACCOUNTING KNEW OF OUR DECISION BY FEBRUARY 14. THE NRC LEGAL STAFF
STATES THAT IT DID NOT BECOME AWARE OF THE DECISION UNTIL FEBRUARY 15,
1979, THE DAY OF THE PROGRAM. ON FEBRUARY 27, 1979, THE LEGAL STAFF
ADVISED THE EEO OFFICE THAT LIVE PERFORMANCES INCIDENT TO EEO PROGRAMS
COULD NO LONGER BE LEGALLY JUSTIFIED AND THE EARLIER CONTRARY OPINION
HAD BEEN SUPERSEDED. THE EEO OFFICE WAS CAUTIONED TO COORDINATE ANY
PROPOSED APPROPRIATED FUND EXPENDITURES FOR SPECIAL EMPHASIS PROGRAMS
WITH THE NRC LEGAL STAFF.
NEVERTHELESS, IN A MARCH 2, 1979, MEMORANDUM THE NRC LEGAL STAFF
ADVISED THE NRC CONTROLLER'S OFFICE THAT PAYMENT FOR THE JAZZ ENSEMBLE
COULD BE MADE. IN ARRIVING AT THIS CONCLUSION, THE LEGAL STAFF POINTED
OUT THAT IN AN EARLIER DECISION, 51 COMP. GEN. 797 (1972), WE HAD
PERMITTED THE BUREAU OF PUBLIC DEBT, DEPARTMENT OF THE TREASURY, TO
EXPEND APPROPRIATED FUNDS FOR A MONTHLY SUBSCRIPTION FOR MUZAK COMPANY
INCENTIVE MUSIC SERVICES IN THE CENTRAL WORK AREA OF THAT
ORGANIZATION'S-WASHINGTON, D.C. OFFICE. THE INFERENCE DRAWN BY THE
LEGAL STAFF WAS THAT CERTAIN KINDS OF ENTERTAINMENT ARE PERMISSIBLE,
DESPITE OUR HOLDING IN THE BUREAU OF MINES DECISION. ON THIS BASIS, THE
LEGAL STAFF RATIONALIZED THAT PAYMENT FOR THE JAZZ ENSEMBLE WAS
JUSTIFIED AND COULD BE MADE. BECAUSE OF AN APPARENT CONFLICT OF
OPINION, THE CONTROLLER'S OFFICE SOUGHT AN ADVANCE DECISION FROM THIS
OFFICE.
THE NRC LEGAL STAFF MISINTERPRETED THE HOLDING OF OUR BUREAU OF MINES
DECISION AND THE HOLDING IN 51 COMP. GEN. 797, SUPRA, CONCERNING
INCENTIVE MUSIC SERVICES. THESE DECISIONS CONCERN ENTIRELY DIFFERENT
SUBJECT MATTERS, ALTHOUGH THEY BOTH INVOLVE MUSIC. ON THE ONE HAND, THE
BUREAU OF MINES DECISION DEALT WITH A ONE-TIME LIVE PERFORMANCE OF SHORT
DURATION BY MUSICIANS AS PART OF A SPECIAL PROGRAM FOR FEDERAL EMPLOYEES
WHO WERE AWAY FROM THE WORK SITE. PUBLIC PERFORMANCES OF THIS TYPE ARE
GENERALLY DEFINED AS ENTERTAINMENT. PEOPLE V. KLAW, 106 N.Y.S. 341,
351 (1907). ON THE OTHER HAND, THE INCENTIVE MUSIC SERVICE IS RECORDED
MUSIC PROVIDED ON A CONTINUOUS BASIS AT THE WORK SITE TO INCREASE
EMPLOYEE PRODUCTIVITY.
OUR BUREAU OF MINES DECISION IS APPLICABLE TO THE INSTANT CASE. WE
RESTATED THERE THE LONG ESTABLISHED RULE THAT IN THE ABSENCE OF SPECIFIC
AUTHORITY, AN AGENCY MAY NOT USE ITS FUNDS TO PROCURE ENTERTAINMENT. WE
AFFIRMED IN THAT DECISION THAT THIS RULE APPLIES, AS IN ALL OTHER
SITUATIONS, TO THE PROCUREMENT OF ENTERTAINMENT SUCH AS LIVE MUSIC AND
ARTISTIC PRESENTATIONS INCIDENT TO SPECIAL EMPHASIS EEO PROGRAMS EVEN
WHEN CHARACTERIZED BY THE AGENCY AS TRAINING ACTIVITIES.
IN OUR DECISION, 58 COMP. GEN. 202 (JANUARY 5, 1979) WE CONSIDERED A
VARIETY OF ACTIVITIES PUT ON BY THE BUREAU OF MINES FOR NATIONAL
HISPANIC HERITAGE WEEK. INCLUDED, FOR EXAMPLE, WERE A 1-HOUR
LECTURE-DEMONSTRATION OF SOUTH AMERICAN FOLK MUSIC BY TWO MUSICIANS FROM
ARGENTINA AND A 2-HOUR LUNCH TIME CONCERT ON THE FOLLOWING DAY BY 12
MUSICIANS AND A GUEST SINGER FROM PUERTO RICO WHICH WAS HELD IN THE
PLAZA OUTSIDE THE BUREAU'S OFFICES. THOSE AND OTHER ACTIVITIES WERE
DEFENDED BY THE BUREAU AS EMPLOYEE TRAINING." WE STATED:
"WHEN WE ANALYZE WITHIN THE CONTEXT OF OUR DECISIONS THE ARTISTIC
PRESENTATIONS WHICH WERE COMPONENTS OF THE BUREAU OF MINES HISPANIC
WEEK, THEY SEEM VERY SIMILAR TO THE KINDS OF ACTIVITIES WHICH WE HAVE
CONSISTENTLY CHARACTERIZED IN THE PAST AS 'ENTERTAINMENT.' WE RECOGNIZE
THAT THERE MAY BE SOME CONFUSION REGARDING THE KINDS OF ACTIVITIES WHICH
ARE AUTHORIZED TO COMMEMORATE HISPANIC WEEK AND SIMILAR OCCASIONS, OR
WHICH COULD BE CARRIED OUT UNDER ANY AGENCY'S EEO PROGRAM, AND THAT SOME
AGENCIES IN THE PAST HAVE EXPENDED APPROPRIATED FUNDS TO PROVIDE
ENTERTAINMENT CHARACTERIZED AS TRAINING IN CONNECTION WITH EEO PROGRAMS.
WHILE WE ACCEPT WITHOUT QUESTION PAST AGENCY CHARACTERIZATIONS THAT
THIS ENTERTAINMENT TYPE ACTIVITY WAS EEO TRAINING OR, AT LEAST, AN
AUTHORIZED PART OF ITS EEO PROGRAM AND WE WILL NOT TAKE EXCEPTION TO ANY
SUCH PAST EXPENDITURES BY THE BUREAU OF MINES OR OTHER AGENCIES, WE FEEL
THAT NO SIMILAR EXPENDITURES IN THE FUTURE SHOULD BE INCURRED UNLESS
MADE IN STRICT CONFORMANCE WITH STATUTE OR APPLICABLE CIVIL SERVICE
COMMISSION REGULATIONS."
IN OUR DECISION OF JANUARY 3, 1979, WE RECOGNIZED THAT IN THE PAST
AGENCIES HAD EXPENDED FUNDS FOR ENTERTAINMENT THAT WAS CHARACTERIZED AS
EEO TRAINING AND PROVIDED AN EXEMPTION FOR SUCH EXPENDITURES. BECAUSE
OF THE QUESTION, PRIOR TO OUR DECISION OF JANUARY 3, 1979, AS TO WHETHER
THIS TYPE OF EXPENDITURE WAS PAYABLE FROM APPROPRIATED FUNDS AND THE
FACT THAT NRC, ON ADVICE OF ITS LEGAL STAFF, HAD ISSUED ITS PURCHASE
ORDER PRIOR TO ACTUAL KNOWLEDGE OF OUR DECISION WE WILL NOT OBJECT TO
PAYMENT IN THIS PARTICULAR CASE.
B-194505, JUL 18, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHILE DISPUTES OVER AGENCY DECISIONS TO PERFORM WORK IN-HOUSE
GENERALLY INVOLVE POLICY MATTERS FOR EXECUTIVE BRANCH RESOLUTION,
AGENCY'S SOLICITING OF BIDS TO BE COMPARED WITH IN-HOUSE COST ESTIMATE
TO DETERMINE IF CONTRACT WILL BE AWARDED, FOLLOWED BY FAULTY OR
MISLEADING COST COMPARISON, IS VIEWED BY GAO AS DETRIMENTAL TO
PROCUREMENT SYSTEM. HOWEVER, ALLEGATION THAT SUCH MISLEADING COMPARISON
WAS MADE WILL NOT BE CONSIDERED WHERE PROTEST IS UNTIMELY.
2. UNDER GAO BID PROTEST PROCEDURES, BASIS FOR PROTEST ARISES WHEN
FACTUAL GROUNDS OF PROTEST BECAME KNOWN TO PROTESTER, NOT WHEN PROTESTER
SUBSEQUENTLY RECEIVES ADVICE OR INFORMATION INDICATING THAT FACTS
PROVIDE BASIS FOR PROTEST. CONSEQUENTLY, PROTEST FILED MORE THAN 10
DAYS AFTER FACTUAL BASIS FOR PROTEST WAS KNOWN BUT WITHIN 10 DAYS OF
PROTESTER'S RECEIPT OF ADVICE THAT IT HAD GROUNDS FOR VIABLE PROTEST IS
UNTIMELY.
CROWN LAUNDRY AND DRY CLEANERS, INC.:
CROWN LAUNDRY AND DRY CLEANERS, INC. (CROWN) FILED A PROTEST WITH
THIS OFFICE ON APRIL 3, 1979, OBJECTING TO THE INCLUSION OF ERRONEOUS
INFORMATION IN IFB F22600-79-B-0007, ISSUED BY KEESLER AIR FORCE BASE,
MISSISSIPPI. THE IFB, FOR LAUNDRY AND DRY CLEANING SERVICES, PROVIDED
THAT THE SOLICITATION COULD BE CANCELED IF THE LOWEST BID WAS MORE THAN
THE GOVERNMENT ESTIMATE OF THE COST OF PROVIDING THE SERVICES ITSELF.
SINCE CROWN'S BID, THE ONLY ONE SUBMITTED, OFFERED A PRICE HIGHER THAN
THE AIR FORCE ESTIMATE, THE AGENCY CANCELED THE SOLICITATION BY
AMENDMENT DATED JANUARY 22, 1979. THE LAUNDRY AND CLEANING SERVICES ARE
PRESENTLY BEING PROVIDED IN-HOUSE BY THE AIR FORCE.
CROWN CONTENDS THAT ITS BID WAS OVERPRICED AS A RESULT OF ITS
RELIANCE UPON ERRONEOUSLY HIGH RATES STATED IN THE SOLICITATION FOR
HEALTH AND RETIREMENT BENEFITS SERVICE EMPLOYEES WOULD RECEIVE IF
DIRECTLY EMPLOYED BY THE AIR FORCE, AND REQUESTS RESOLICITATION USING
THE CORRECT RATES. THE AIR FORCE, ADMITTING THAT THE IFB CONTAINED
ERRONEOUSLY HIGH RATES FOR FEDERAL HEALTH AND RETIREMENT BENEFITS,
CONTENDS THAT CROWN'S PROTEST IS UNTIMELY BECAUSE IT WAS NOT FILED
WITHIN 10 WORKING DAYS OF CANCELLATION OF THE SOLICITATION AND ARGUES
THAT THE ERROR SHOULD NOT HAVE AFFECTED CROWN'S BID AS THE BENEFITS
WHICH THE CONTRACTOR MUST PAY WERE ESTABLISHED BY THE DEPARTMENT OF
LABOR PURSUANT TO THE SERVICE CONTRACT ACT OF 1965, AS AMENDED, 41
U.S.C. 251 ET SEQ. (1976).
GENERALLY, WE REGARD A DISPUTE OVER AN AGENCY DECISION TO PERFORM
WORK IN-HOUSE RATHER THAN TO CONTRACT OUT FOR THOSE SERVICES AS
INVOLVING A POLICY MATTER TO BE RESOLVED WITHIN THE EXECUTIVE BRANCH.
SEE, E.G., GENERAL TELEPHONE COMPANY OF CALIFORNIA, B-189430, JULY 6,
1978, 78-2 CPD 9. WHEN, HOWEVER, AN AGENCY UTILIZES THE PROCUREMENT
SYSTEM TO AID IN ITS DECISIONMAKING, SPELLING OUT IN A SOLICITATION THE
CIRCUMSTANCES UNDER WHICH THE GOVERNMENT WILL AWARD/NOT AWARD A
CONTRACT, WE BELIEVE IT WOULD BE DETRIMENTAL TO THE SYSTEM IF, AFTER THE
AGENCY INDUCES THE SUBMISSION OF BIDS, THERE IS A FAULTY OR MISLEADING
COST COMPARISON WHICH MATERIALLY AFFECTS THE DECISION AS TO WHETHER A
CONTRACT WILL BE AWARDED. KAHOE ENTERPRISES INCORPORATED, B-183866,
JUNE 17, 1976, 76-1 CPD 389.
ALTHOUGH THE PROTESTER SUGGESTS THAT SUCH A MISLEADING COMPARISON
RESULTED HERE BECAUSE OF ERRONEOUS DATA IN THE IFB, WE WILL NOT CONSIDER
THE PROTEST BECAUSE WE AGREE WITH THE AIR FORCE THAT THE PROTEST IS
UNTIMELY. THE AIR FORCE REPORTS THAT THE PROTESTER HAD BEEN GIVEN AN
OPPORTUNITY TO EXAMINE THE IN-HOUSE COST ESTIMATE AND WAS PROVIDED A
COPY OF THAT ESTIMATE, SO THAT IT KNEW OR SHOULD HAVE KNOWN OF GROUNDS
FOR PROTEST WHEN IT RECEIVED THE JANUARY 22 NOTICE OF IFB CANCELLATION.
CROWN DOES NOT DISPUTE THOSE FACTS, BUT MERELY ASSERTS THAT IT DID NOT
LEARN IT HAD A VALID PROTEST UNTIL ITS REPRESENTATIVE VISITED WASHINGTON
ON MARCH 27. BY THAT WE ASSUME THE PROTESTER MEANS HE SOUGHT AND
RECEIVED ADVICE THAT THE FACTS WARRANTED A PROTEST.
OUR BID PROTEST PROCEDURES REQUIRE THAT A PROTEST BE FILED WITHIN 10
DAYS OF WHEN A PROTESTER KNOWS OR SHOULD KNOW OF THE "BASIS FOR
PROTEST." SEE 4 C.F.R. SEC. 20.2(B) (1979). ONE OF THE PURPOSES OF
THAT 10-DAY RULE IS TO ALLOW POTENTIAL PROTESTERS A REASONABLE
OPPORTUNITY TO DETERMINE IF THEY WISH TO PROTEST. SCHRECK INDUSTRIES,
INC., B-194818, JUNE 13, 1979, 79-1 CPD ___. IN OTHER WORDS, UPON
LEARNING OF FACTS WHICH COULD BE THE BASIS FOR PROTEST, A POTENTIAL
PROTESTER HAS 10 WORKING DAYS FROM THAT TIME TO OBTAIN WHATEVER WRITTEN
OR ORAL INFORMATION OR ADVICE IT WANTS AND TO FILE A PROTEST IF IT SO
DESIRES. SCHRECK INDUSTRIES, INC., SUPRA. TO ALLOW A POTENTIAL
PROTESTER TO SIT BACK, SEEK ADVICE OR INFORMATION SOME TIME AFTER THE
FACTUAL BASIS FOR PROTEST ARISES, AND THEN FILE A PROTEST WOULD SUBVERT
THE INTENT OF THE TIMELINESS PROVISIONS OF OUR PROCEDURES, WHICH IS TO
REMOVE, WITHIN A REASONABLE TIME, THE CLOUD OF UNCERTAINTY WHICH HANGS
OVER ANY PROCUREMENT WHICH IS SUBJECT TO PROTEST. CONSEQUENTLY, WE VIEW
THE "BASIS FOR PROTEST" AS ARISING WHEN THE FACTUAL BASIS OF A PROTEST
BECOMES KNOWN, RATHER THAN WHEN A POTENTIAL PROTESTER LATER LEARNS OR IS
ADVISED THAT THOSE FACTS ARE PROTESTABLE.
IN THIS CASE, THE PROTEST WAS FILED ON APRIL 3, WELL AFTER THE
PROTESTER RECEIVED THE JANUARY 22 AMENDMENT AND THE AIR FORCE ESTIMATE.
ACCORDINGLY, WE VIEW THE PROTEST AS UNTIMELY AND, CONTRARY TO THE
PROTESTER'S CONTENTION, DO NOT FIND THE CASE APPROPRIATE FOR REVIEW
UNDER THE SIGNIFICANT ISSUE EXCEPTION TO OUR TIMELINESS RULES. SEE 4
C.F.R. SEC. 20.2(C). THE PROTEST THEREFORE IS DISMISSED.
WE POINT OUT THAT, AS THE AIR FORCE STATES, RATES WHICH APPEARED IN
THE IFB WERE APPLICABLE ONLY TO IN-HOUSE WORK AND WERE NOT THE RATES TO
WHICH CROWN WOULD HAVE BEEN SUBJECT HAD A CONTRACT BEEN AWARDED, SO THAT
THE COMPUTATION OF CROWN'S BID SHOULD NOT HAVE BEEN DIRECTLY AFFECTED BY
THE ERROR.
B-194940, JUL 18, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE IS NOT ENTITLED TO REIMBURSEMENT FOR COST OF SHIPPING HER
PRIVATELY OWNED VEHICLE FROM OVERSEAS TO BALTIMORE, MARYLAND. SECTION
901 OF THE MERCHANT MARINE ACT OF 1936, 46 U.S.C. SEC. 1241(A) (1976),
MAKES USE OF AMERICAN FLAG SHIPS MANDATORY UNLESS IT CAN BE PROVEN THAT
IT WAS NECESSARY TO USE A FOREIGN FLAG SHIP. LACK OF KNOWLEDGE
CONCERNING THIS LAW AND REGULATION CONCERNING IMPLEMENTATION OF THIS ACT
DOES NOT RELIEVE THE EMPLOYEE FROM HER OBLIGATION TO PAY FOR
TRANSPORTING HER PRIVATELY OWNED VEHICLE ON A FOREIGN FLAG VESSEL WHEN
AMERICAN FLAG SHIPS WERE AVAILABLE.
JOYCE T. JAMISON:
MS. JOYCE T. JAMISON APPEALS OUR CLAIMS DIVISION'S DISALLOWANCE OF
HER CLAIM REIMBURSEMENT OF THE COST OF SHIPPING HER PRIVATELY OWNED
VEHICLE (POV) FROM OVERSEAS TO THE UNITED STATES ON A FOREIGN FLAG
CARRIER INCIDENT TO HER SEPARATION AS A CIVILIAN EMPLOYEE.
HAVING COMPLETED AN ASSIGNMENT AS A CIVILIAN SCHOOL TEACHER FOR THE
UNITED STATES AIR FORCE IN ENGLAND, MS. JAMISON RETURNED TO THE UNITED
STATES FOR SEPARATION. BEFORE DEPARTING SHE MADE ARRANGEMENTS FOR
SHIPMENT OF HER POV WHICH, ALTHOUGH NOT AUTHORIZED THEN, WAS
SUBSEQUENTLY AUTHORIZED BY AN AMENDMENT TO HER TRAVEL ORDERS. MS.
JAMISON'S ARRANGEMENT FOR SHIPMENT WAS MADE WITH A FOREIGN FLAG CARRIER
WHO DELIVERED HER POV TO BALTIMORE, MARYLAND, FROM SOUTHAMPTON, ENGLAND.
THE RECORD DISCLOSES THAT MS. JAMISON MADE ARRANGEMENTS FOR SHIPMENT
OF HER POV WITHOUT CONTACTING A TRANSPORTATION OFFICER AND THAT UNITED
STATES FLAG CARRIERS WERE AVAILABLE AND DEPARTING WEEKLY DURING THE TIME
OF MS. JAMISON'S SHIPMENT. MS. JAMISON ALLEGES THAT SHE WAS UNAWARE OF
THE REQUIREMENT THAT HER POV SHOULD BE TRANSPORTED BY A U.S. FLAG
CARRIER AND THAT SHE WAS NOT ADVISED BY THE CIVIL PERSONNEL OFFICE
(CPO), MILDENHALL, TO THIS EFFECT. SHE ALSO ALLEGES THAT THERE WAS NO
BAD FAITH ON HER PART AND THAT SHE WOULD HAVE SOLD THE AUTOMOBILE RATHER
THAN TRANSPORT IT OVERSEAS AT HER OWN COST.
SECTION 901 OF THE MERCHANT MARINE ACT OF 1936, 46 U.S.C. SEC.
1241(A) (1976), PROVIDES:
"ANY OFFICER OR EMPLOYEE OF THE UNITED STATES TRAVELING ON OFFICIAL
BUSINESS OVERSEAS OR TO OR FROM ANY OF THE POSSESSIONS OF THE UNITED
STATES SHALL TRAVEL AND TRANSPORT HIS PERSONAL EFFECTS ON SHIPS
REGISTERED UNDER THE LAWS OF THE UNITED STATES WHERE SUCH SHIPS ARE
AVAILABLE UNLESS THE NECESSITY OF HIS MISSION REQUIRES THE USE OF A SHIP
UNDER A FOREIGN FLAG: PROVIDED, THAT THE COMPTROLLER GENERAL OF THE
UNITED STATES SHALL NOT CREDIT ANY ALLOWANCE FOR TRAVEL OR SHIPPING
EXPENSES INCURRED ON A FOREIGN SHIP IN THE ABSENCE OF SATISFACTORY PROOF
OF THE NECESSITY THEREFOR."
WE HAVE CONSISTENTLY HELD THAT THE WORDING OF SECTION 901 MAKES THE
USE OF AMERICAN FLAG SHIPS MANDATORY AND RESTRICTS THE USE OF FOREIGN
FLAG SHIPS TO THOSE SITUATIONS WHERE IT CAN BE SATISFACTORILY PROVED
THAT THE USE OF THE FOREIGN FLAG SHIP WAS NECESSARY. DISTRICT
CONTAINERIZED EXPRESS, B-188186, APRIL 21, 1977; ALLIED VAN LINES,
INC., B-180861, JUNE 7, 1974. MERE INCONVENIENCE TO THE EMPLOYEE,
REASONABLE DELAYS AND MINOR ECONOMIES ARE NOT FACTORS WHICH NORMALLY
JUSTIFY PREFERENCE FOR A FOREIGN FLAG SHIP OVER THOSE OPERATING UNDER
THE AMERICAN FLAG. 31 COMP. GEN. 351, 356 (1952). GENERALLY, THE
NECESSITY FOR USE OF A FOREIGN FLAG SHIP MEANS THAT AN AMERICAN FLAG
SHIP EITHER WAS NOT AVAILABLE OR COULD NOT PERFORM THE NECESSARY
SERVICES.
FURTHERMORE, 2 JOINT TRAVEL REGULATIONS PARA. C11006-1 (CHANGE 137,
MARCH 1, 1977) STATES:
"SHIPMENT OF PRIVATELY OWNED MOTOR VEHICLES AT GOVERNMENT EXPENSE MAY
BE AUTHORIZED BY COMMERICAL MEANS IF AVAILABLE AT REASONABLE RATES AND
UNDER REASONABLE CONDITIONS OR BY GOVERNMENT SHIP ON A SPACE-REQUIRED
BASIS. MODE OF SHIPMENT WILL BE DETERMINED BY THE TRANSPORTATION
OFFICER EFFECTING THE SHIPMENT. THE PROCEDURES FOR SHIPMENT WILL BE IN
ACCORDANCE WITH REGULATIONS OF THE SERVICE CONCERNED."
THERE IS NO EVIDENCE THAT MS. JAMISON CONTACTED A TRANSPORTATION
OFFICER AS REQUIRED BY THE CITED REGULATION. ALSO, THERE IS SUBSTANTIAL
EVIDENCE THAT AMERICAN FLAG SHIPS COULD HAVE TRANSPORTED HER POV BACK TO
THE UNITED STATES AND MS. JAMISON HAS SUPPLIED NO EVIDENCE TO THE
CONTRARY. THE FACT THAT MS. JAMISON WAS UNAWARE OF THE PERTINENT LAW
AND REGULATION DOES NOT PERMIT REIMBURSEMENT OF THE SHIPPING CHARGES.
PARTIES DEALING WITH THE GOVERNMENT ARE CHARGED WITH KNOWLEDGE OF AND
ARE BOUND BY STATUTES AND LAWFULLY PROMULGATED REGULATIONS. SEE
DISTRICT CONTAINERIZED EXPRESS, SUPRA.
IN A SIMILAR CASE, AN EMPLOYEE OF THE UNITED STATES, WHO WAS
RETURNING FROM GERMANY FOR SEPARATION, RECEIVED AUTHORIZATION FOR
TRANSPORTATION OF HIS POV BUT THE GOVERNMENT TRANSPORTATION OFFICER
WRONGLY REFUSED TO AUTHORIZE ITS SHIPMENT BY GOVERNMENT VESSEL. THE
EMPLOYEE ENGAGED A FOREIGN FLAG SHIP FOR SHIPMENT OF HIS AUTOMOBILE
NOTWITHSTANDING THAT THREE AMERICAN FLAG VESSELS WERE AVAILABLE.
ALTHOUGH AN ERROR WAS COMMITTED BY A REPRESENTATIVE OF THE GOVERNMENT,
THE FINANCIAL LIABILITY FOR USE OF A FOREIGN FLAG SHIP IN CONTRAVENTION
OF 46 U.S.C. SEC. 1241(A) IS PLACED BY LAW UPON THE EMPLOYEE WHO MAY NOT
BE REIMBURSED FOR THE COST OF SHIPPING HIS POV BY FOREIGN FLAG VESSEL.
B-160229, NOVEMBER 7, 1966, AND JULY 1, 1968.
ACCORDINGLY, THE DISALLOWANCE OF MS. JAMISON'S CLAIM FOR
REIMBURSEMENT FOR TRANSPORTATION OF HER POV BY A FOREIGN FLAG VESSEL IS
SUSTAINED.
B-189652, JUL 17, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. FEDERAL TORT CLAIMS ACT (FTCA), AS AMENDED, REPEALED ACT OF JUNE
24, 1946, 60 STAT. 304, INSOFAR AS IT AUTHORIZED ALASKA RAILROAD (ARR)
TO SETTLE TORT CLAIMS COGNIZABLE UNDER FTCA. TORT CLAIMS ARISING FROM
1975 TRAIN COLLISION WHICH WERE ADMINISTRATIVELY SETTLED BY ARR FOR
AMOUNTS GREATER THAN $2,500 BUT LESS THAN $100,000 ARE THEREFORE PAYABLE
FROM PERMANENT APPROPRIATION ESTABLISHED BY 31 U.S.C. SEC. 724A RATHER
THAN FROM ARR FUNDS.
2. ALTHOUGH ARR DID NOT FOLLOW PROCEDURES SET FORTH IN 28 C.F.R.
PART 14 FOR A NUMBER OF CLAIMS ARISING FROM 1975 RAILROAD COLLISION AND
PAID SEVERAL FROM ITS OWN FUNDS, SINCE THE CLAIMS COULD HAVE BEEN PAID
FROM PERMANENT APPROPRIATION IF PROPERLY PRESENTED, IN THIS INSTANCE
REIMBURSEMENT WILL BE PERMITTED, EXCEPT FOR PAYMENTS IN EXCESS OF
$100,000. SINCE PERMANENT APPROPRIATION CONTAINED IN 31 U.S.C. SEC.
724A WAS NOT AVAILABLE FOR PAYMENTS IN EXCESS OF $100,000 AT TIME AWARDS
WERE MADE, REIMBURSEMENT FOR THESE PAYMENTS, IF DESIRED, MUST BE
OBTAINED FROM CONGRESS.
ALASKA RAILROAD - ADMINISTRATIVE SETTLEMENT OF TORT CLAIMS:
THIS DECISION TO THE SECRETARY OF TRANSPORTATION CONCERNS THE SOURCE
OF FUNDS FOR PAYMENT OF TORT CLAIMS ADMINISTRATIVELY SETTLED BY THE
ALASKA RAILROAD (ARR). THE QUESTION IS WHETHER THESE CLAIMS ARE PAYABLE
FROM THE PERMANENT INDEFINITE APPROPRIATION ESTABLISHED BY 31 U.S.C.
SEC. 724A OR FROM ARR FUNDS. FOR THE REASONS THAT FOLLOW, WE CONCLUDE
THAT AWARDS IN EXCESS OF $2,500 ARE PAYABLE FROM THE PERMANENT
APPROPRIATION.
FEDERAL AGENCIES ARE AUTHORIZED TO SETTLE TORT CLAIMS
ADMINISTRATIVELY UNDER THE FEDERAL TORT CLAIMS ACT. 28 U.S.C. SEC. 2672
(1976). AWARDS OF $2,500 OR LESS MUST BE PAID BY THE AGENCY INVOLVED
FROM ITS OWN APPROPRIATIONS. AWARDS GREATER THAN $2,500 ARE PAID
PURSUANT TO 31 U.S.C. SEC. 724A, WHICH PROVIDES IN PERTINENT PART:
"THERE ARE APPROPRIATED, OUT OF ANY MONEY IN THE TREASURY NOT
OTHERWISE APPROPRIATED, SUCH SUMS AS MAY BE NECESSARY FOR THE PAYMENT,
NOT OTHERWISE PROVIDED FOR, AS CERTIFIED BY THE COMPTROLLER GENERAL, OF
FINAL JUDGMENTS, AWARDS, AND COMPROMISE SETTLEMENTS, WHICH ARE PAYABLE
IN ACCORDANCE WITH THE TERMS OF SECTION 2414, 2517, 2672, OR 2677 OF
TITLE 28 ***."
PRIOR TO MAY 4, 1977, THE PERMANENT APPROPRIATION WAS LIMITED TO
AWARDS NOT IN EXCESS OF $100,000. THE $100,000 LIMITATION WAS REMOVED
BY PUB. L. NO. 95-26 (MAY 4, 1977), 91 STAT. 61, 96. THE APPROPRIATION
IS THUS NOW AVAILABLE TO PAY AWARDS OVER $2,500 WITHOUT REGARD TO
AMOUNT, UNLESS PAYMENT IS "OTHERWISE PROVIDED FOR."
THE CLAIMS IN QUESTION AROSE FROM A COLLISION ON JULY 5, 1975,
INVOLVING TWO ARR TRAINS. ALTHOUGH THERE ARE A NUMBER OF RELATED
CLAIMS, WE WILL SUMMARIZE TWO FOR PURPOSES OF ILLUSTRATION - MARION L.
LACH AND ANTHONY ANZEVINO, ADMINISTRATOR OF THE ESTATE OF ANTOINETTE
ANZEVINO. IN LATE 1976, A FEDERAL TORT CLAIMS ACT VOUCHER IN FAVOR OF
MARION L. LACH IN THE AMOUNT OF $91,453.66 WAS SUBMITTED TO OUR CLAIMS
DIVISION BY ARR AND WAS CERTIFIED FOR PAYMENT. SUBSEQUENTLY, ARR SOUGHT
REIMBURSEMENT FROM THE PERMANENT APPROPRIATION FOR $8,235.81, NOT
INCLUDED IN THE VOUCHER, APPARENTLY PAID BY ARR ON BEHALF OF CLAIMANT
LACH PRIOR TO THE TORT CLAIM SETTLEMENT, FOR SUCH ITEMS AS NECESSARY
TRANSPORTATION, LODGING, AND MEDICAL SERVICES. THE ANZEVINO CLAIM, A
WRONGFUL DEATH CLAIM, WAS SETTLED IN THE AMOUNT OF $152,000 AND PAID BY
ARR IN 1976. A MEMORANDUM FROM THE ARR CHIEF COUNSEL, DATED MARCH 25,
1976, STATES THAT THE "ALASKA RAILROAD IS AUTHORIZED TO PAY THIS AMOUNT
UNDER THE AUTHORITY OF THE ACT OF JUNE 24, 1946, 60 STAT. 304." ARR NOW
SEEKS REIMBURSEMENT FOR THIS PAYMENT ALSO.
OUR CLAIMS DIVISION SOUGHT ADVICE ON WHETHER THERE WAS LEGAL
AUTHORITY TO COMPLY WITH ARR'S REQUEST, USING THE LACH CLAIM AS A
REFERENCE CASE. IN A MEMORANDUM TO THE CLAIMS DIVISION DATED SEPTEMBER
28, 1977, THE OFFICE OF GENERAL COUNSEL CONCLUDED THAT THERE WAS NO
LEGAL BASIS FOR THE REQUESTED REIMBURSEMENTS, FOR THE FOLLOWING REASONS:
"THE RAILROAD'S REQUEST FOR REIMBURSEMENT OF THE AMOUNTS PAID FROM
ITS APPROPRIATIONS MUST BE DENIED FOR TWO REASONS. FIRST, AND MOST
FUNDAMENTALLY, THE ACT APPROVED JUNE 24, 1946, CH. 465, 60 STAT. 304,
MAKES FUNDS AVAILABLE FOR OPERATIONS OF THE ALASKA RAILROAD AVAILABLE
FOR, INTER ALIA, 'PAYMENT OF CLAIMS FOR LOSSES AND DAMAGES ARISING FROM
ITS OPERATIONS ***.' WE HAVE RECOGNIZED THAT THIS ACT AUTHORIZES THE
RAILROAD TO PAY FROM ITS APPROPRIATIONS CLAIMS IN THE NATURE OF TORT
DAMAGES. ***
"THE ACT OF JUNE 24, 1946, IS STILL IN EFFECT, AND WE FIND NO
INDICATION THAT IT HAS BEEN SUPERSEDED BY THE STATUTORY PROVISIONS WHICH
GENERALLY GOVERN PAYMENT OF TORT CLAIM SETTLEMENTS. THUS 31 U.S.C. SEC.
724A MAKES THE JUDGMENT APPROPRIATION AVAILABLE FOR PAYMENT 'NOT
OTHERWISE PROVIDED FOR' OF JUDGMENTS, AWARDS AND COMPROMISE SETTLEMENTS
'PAYABLE IN ACCORDANCE WITH THE TERMS OF' 28 U.S.C. SEC. 2672 (1970)
(AGENCY TORT CLAIMS ACT SETTLEMENTS). IN SHORT, IT APPEARS THAT THE
1946 ACT MAKES THE RAILROAD'S APPROPRIATIONS AVAILABLE FOR PAYMENT OF
TORT CLAIMS SETTLEMENTS TO THE EXCLUSION OF THE JUDGMENT APPROPRIATION.
"IN ANY EVENT, EVEN IF THE 1946 ACT DID NOT APPLY, THE PAYMENTS HERE
INVOLVED WOULD NOT BE REIMBURSABLE FROM THE JUDGMENT APPROPRIATION SINCE
THEY ARE NOT 'PAYABLE IN ACCORDANCE WITH THE TERMS OF' 28 U.S.C. SEC.
2672, AS REQUIRED BY 31 U.S.C. SEC. 724A, SUPRA. AS NOTED PREVIOUSLY,
THESE PAYMENTS WERE MADE PRIOR TO AND INDEPENDENT OF THE ULTIMATE
FEDERAL TORT CLAIMS ACT SETTLEMENTS. IT DOES NOT APPEAR THAT EITHER THE
RAILROAD OR THE INJURED PARTIES CONSIDERED SUCH PAYMENTS TO CONSTITUTE
TORT CLAIMS ACT SETTLEMENTS AS SUCH; NOR DID THEY COMPLY WITH THE
PROCEDURAL REGULATIONS FOR TORT CLAIMS ACT SETTLEMENTS. SEE 28 C.F.R.
SECS. 14.1 ET SEQ. (1976)."
THE ACT OF JUNE 24, 1946, 60 STAT. 304, PROVIDES THAT -
"FUNDS AVAILABLE FOR THE OPERATION OF THE ALASKA RAILROAD SHALL BE
AVAILABLE FOR MAINTENANCE AND OPERATION OF RIVER STEAMERS AND OTHER
BOATS ON THE YUKON RIVER AND ITS TRIBUTARIES IN ALASKA; FOR PURCHASE OF
STORES FOR RESALE; AND FOR PAYMENT OF CLAIMS FOR LOSSES AND DAMAGES
ARISING FROM OPERATIONS, INCLUDING CLAIMS OF EMPLOYEES OF THE RAILROAD
FOR LOSS AND DAMAGE RESULTING FROM WRECK OR ACCIDENT ON SAID RAILROAD,
NOT DUE TO NEGLIGENCE OF THE CLAIMANT, LIMITED TO CLOTHING AND OTHER
NECESSARY PERSONAL EFFECTS USED IN CONNECTION WITH HIS DUTIES AND NOT
EXCEEDING $100 IN VALUE."
IN VIEW OF THIS STATUTE, A QUESTION AROSE WHETHER ADMINISTRATIVE TORT
SETTLEMENTS BY ARR WERE PAYABLE AT ALL FROM THE PERMANENT APPROPRIATION.
TO FINALLY RESOLVE THE ISSUE, WITH RESPECT TO BOTH THE REQUESTED
REIMBURSEMENTS AND FUTURE SETTLEMENTS, COMMENTS WERE SOLICITED FROM THE
DEPARTMENT OF TRANSPORTATION (DOT).
THE DOT GENERAL COUNSEL RESPONDED, ASSERTING THAT THE PERMANENT
APPROPRIATION WAS THE PROPER SOURCE OF PAYMENT FOR THE FOLLOWING
REASONS:
(1) THE "LOSSES AND DAMAGES" LANGUAGE IN THE 1946 STATUTE SHOULD BE
CONSTRUED AS LIMITED TO "CLAIMS FOR PROPERTY DAMAGE ARISING FROM A
CONTRACT." THE RAILROAD INDUSTRY, DOT POINTS OUT, HAS HISTORICALLY
DISTINGUISHED BETWEEN THE TERMS "LOSS AND DAMAGE" AND "INJURY TO
PERSON." ARR REPORTS THAT "IT HAS ALWAYS MAINTAINED SEPARATE ACCOUNTS
FOR 'LOSS AND DAMAGE' (FREIGHT AND BAGGAGE) AND FOR 'TORT CLAIMS'
LIMITED TO $2,500 (INJURY TO PERSON AND UNCHECKED PROPERTY.)"
(2) TO THE EXTENT THAT THE 1946 STATUTE AUTHORIZED THE PAYMENT OF
TORT CLAIMS, IT WAS REPEALED BY THE FEDERAL TORT CLAIMS ACT.
DOT FURTHER ASSERTS THAT REIMBURSEMENT FOR THOSE PAYMENTS MADE BY ARR
PRIOR TO THE FEDERAL TORT CLAIMS ACT SETTLEMENTS (E.G., THE $8,235.81 TO
CLAIMANT LACH) SHOULD NOT BE PRECLUDED BY ARR'S FAILURE TO PROCEED IN
ACCORDANCE WITH APPLICABLE REGULATIONS (28 C.F.R. PART 14). DOT STATES
IN THIS CONNECTION:
"THE ACTIONS OF THE ARR IN PROMPTLY SETTLING AND PAYING THESE LODGING
AND MEDICAL BILLS UNQUESTIONABLY SAVED THE GOVERNMENT SUBSTANTIAL SUMS
OF MONEY. UNFORTUNATELY, THE NEED FOR IMMEDIATE ACTION DID NOT PERMIT
THE ARR TO FOLLOW THE PROCEDURES FOR FTCA SETTLEMENTS (28 C.F.R. 14) IN
MAKING SUCH PAYMENTS. THE INTENT OF THESE PROCEDURAL REGULATIONS IS TO
PROTECT THE INTERESTS OF THE GOVERNMENT BY HAVING THE DEPARTMENT OF
JUSTICE OR GAO, AS THE CASE MAY BE, REVIEW THE MERITS OF TORT CLAIMS
AGAINST THE GOVERNMENT BEFORE PAYMENTS ARE MADE FROM THE JUDGMENT
APPROPRIATION. SUCH REVIEW HAS OR WILL BE MADE IN THIS INSTANCE, FULLY
MEETING THE SUBSTANTIVE REQUIREMENTS OF THE REGULATIONS."
ALTHOUGH WE AGREE THAT THERE IS SOME MERIT TO DOT'S ARGUMENT THAT THE
TERM "LOSSES AND DAMAGES" AS USED IN THE ARR STATUTE REFERS ONLY TO
PROPERTY DAMAGE, WE DOUBT THAT THERE IS SUFFICIENT BASIS TO CONCLUDE
THAT IT MUST BE GIVEN THAT MEANING AS A MATTER OF LAW. SEE, E.G., THE
SUPREME COURT'S USE OF THE TERM IN MICHIGAN CENTRAL R.R. CO. V.
VREELAND, 227 U.S. 59, 68 (1913). IN ANY EVENT, WE NEED NOT RESOLVE
THAT ISSUE SINCE WE CONCLUDE THAT THE FEDERAL TORT CLAIMS ACT DID REPEAL
THE ARR STATUTE TO THE EXTENT OF TORT CLAIMS.
THE FEDERAL TORT CLAIMS ACT WAS ORIGINALLY ENACTED AS TITLE IV OF THE
LEGISLATIVE REORGANIZATION ACT OF 1946, PUB. L. NO. 601, 79TH CONG., 60
STAT. 812, 842. PART 2 OF THE ORIGINAL ACT, 60 STAT. 843, SUBSEQUENTLY
CODIFIED AT 28 U.S.C. SEC. 2672, AUTHORIZED AGENCY HEADS TO SETTLE AND
PAY TORT CLAIMS, WITH CERTAIN EXCEPTIONS, NOT IN EXCESS OF $1,000.
REPEALER PROVISIONS WERE CONTAINED IN SECTION 424, 60 STAT. 846-47.
SUBSECTION 424(A), CITED BY DOT AS HAVING REPEALED THE ACT OF JUNE 24,
1946, PROVIDES:
"ALL PROVISIONS OF LAW AUTHORIZING ANY FEDERAL AGENCY TO CONSIDER,
ASCERTAIN, ADJUST, OR DETERMINE CLAIMS ON ACCOUNT OF DAMAGE TO OR LOSS
OF PROPERTY, OR ON ACCOUNT OF PERSONAL INJURY OR DEATH, CAUSED BY THE
NEGLIGENT OR WRONGFUL ACT OR OMISSION OF ANY EMPLOYEE OF THE GOVERNMENT
WHILE ACTING WITHIN THE SCOPE OF HIS OFFICE OR EMPLOYMENT, ARE HEREBY
REPEALED IN RESPECT OF CLAIMS COGNIZABLE UNDER PART 2 OF THIS TITLE AND
ACCRUING ON AND AFTER JANUARY 1, 1945, INCLUDING, BUT WITHOUT
LIMITATION, THE PROVISIONS GRANTING SUCH AUTHORIZATION NOW CONTAINED IN
THE FOLLOWING LAWS: ***."
IN THE ENSUING LIST OF LAWS SPECIFICALLY REPEALED, THE ACT OF JUNE
24, 1946 IS NOT MENTIONED. HOWEVER, SUBSECTION 424(B) FURTHER PROVIDES:
"NOTHING CONTAINED HEREIN SHALL BE DEEMED TO REPEAL ANY PROVISION OF
LAW AUTHORIZING ANY FEDERAL AGENCY TO CONSIDER, ASCERTAIN, ADJUST,
SETTLE, DETERMINE, OR PAY ANY CLAIM ON ACCOUNT OF DAMAGE TO OR LOSS OF
PROPERTY OR ON ACCOUNT OF PERSONAL INJURY OR DEATH, IN CASES IN WHICH
SUCH DAMAGE, LOSS, INJURY, OR DEATH WAS NOT CAUSED BY ANY NEGLIGENT OR
WRONGFUL ACT OR OMISSION OF AN EMPLOYEE OF THE GOVERNMENT WHILE ACTING
WITHIN THE SCOPE OF HIS OFFICE OR EMPLOYMENT, OR ANY OTHER CLAIM NOT
COGNIZABLE UNDER PART 2 OF THIS TITLE."
THE QUESTION THUS BECOMES WHETHER THE TORT CLAIMS PAID BY THE ARR ARE
COGNIZABLE UNDER PART 2 OF THE FTCA.
"COGNIZABLE" IN LAW HAS BEEN DEFINED AS "CAPABLE OF BEING TRIED OR
EXAMINED BEFORE A DESIGNATED TRIBUNAL." STATE V. WILMOT, 4 P.2D 363, 364
(IDAHO 1931). A LEGISLATIVE GRANT TO A COURT OF SUBJECT MATTER
JURISDICTION OFTEN INVOLVES BOTH A LIMIT ON THE NATURE OF THE CASE AND A
MONETARY LIMIT. THEREFORE, IN DETERMINING WHETHER A CLAIM IS COGNIZABLE
BEFORE A COURT, OR BY ANALOGY, BEFORE AN AGENCY, BOTH THE CHARACTER OF
THE CLAIM AND THE SUM IN DISPUTE MUST BE CONSIDERED. SEE 40 OP. ATTY.
GEN. 527, 529-30 (1947).
THE FTCA PROVIDED AN EXCLUSIVE STATUTORY REMEDY FOR AGENCY
SETTLEMENTS OF TORT CLAIMS AGAINST THE UNITED STATES. 28 U.S.C. SEC.
2679(A) (1976). THUS, AFTER ITS ENACTMENT, THE LOSSES AND DAMAGES PART
OF THE ALASKA RAILROAD STATUTE WAS REPEALED FOR TORT CLAIMS UP TO
$1,000, AUTHORITY TO SETTLE CLAIMS ABOVE THAT AMOUNT NOT BEING REPEALED
SINCE THEY WERE NOT THEN COGNIZABLE UNDER PART 2 OF THE FTCA.
SUBSEQUENTLY, THE MONETARY LIMITATION IN PART 2 TWICE HAS BEEN RAISED;
ONCE, IN 1959 TO $2,500, AND AGAIN IN 1966 TO $25,000 WITHOUT PRIOR
APPROVAL OF THE ATTORNEY GENERAL AND TO AN UNLIMITED AMOUNT WITH THE
ATTORNEY GENERAL'S APPROVAL. ALTHOUGH THE STATUTES PROVIDING FOR THE
MONETARY INCREASES WERE NOT ACCOMPANIED BY A SPECIFIC REPEALER, THE
LANGUAGE OF SECTION 424(A), REPEALING ALL STATUTES EMPOWERING FEDERAL
AGENCIES TO MAKE TORT CLAIM SETTLEMENTS "COGNIZABLE UNDER PART 2," MUST
BE CONSTRUED CONSISTENTLY WITH THESE INCREASES. SINCE TORT CLAIMS IN AN
UNLIMITED AMOUNT ARE NOW "COGNIZABLE" UNDER PART 2, WE CONCLUDE THAT THE
LOSS AND DAMAGES PROVISION OF THE ALASKA RAILROAD STATUTE, INSOFAR AS IT
AUTHORIZED THE SETTLEMENT OF TORT CLAIMS, HAS BEEN REPEALED COMPLETELY.
THUS, TORT CLAIMS AGAINST THE ARR CANNOT BE PAID UNDER THE AUTHORITY OF
THAT STATUTE BUT RATHER MUST BE PAID PURSUANT TO THE FTCA AND RELEVANT
PROCEDURES.
AS NOTED PREVIOUSLY, DOT HAS SUGGESTED THAT THE ARR'S FAILURE TO
FOLLOW THE PROCEDURAL REQUIREMENTS OF 28 C.F.R. PART 14 IS ESSENTIALLY
IMMATERIAL SINCE THE INTENT OF THE REGULATIONS IS TO PROTECT THE
INTERESTS OF THE GOVERNMENT BY HAVING THE DEPARTMENT OF JUSTICE OR GAO
REVIEW THE MERITS OF THE CLAIMS PRIOR TO PAYMENT. THIS IS NOT CORRECT.
OUR FUNCTION UNDER 31 U.S.C. SEC. 724A IS TO CERTIFY THE AWARDS FOR
PAYMENT. IF A VOUCHER SUBMITTED FOR PAYMENT UNDER 28 U.S.C. SEC. 2672
AND 28 C.F.R. PART 14 IS PROPER ON ITS FACE, IF IT PRESENTS A CLAIM
COGNIZABLE UNDER THE FTCA, AND IF THERE IS NO QUESTION ABOUT THE SOURCE
OF FUNDS FOR PAYMENT OUR CERTIFICATION FUNCTION IS LARGELY MINISTERIAL.
IT DOES NOT EXTEND TO REVIEWING THE "MERITS" OF AN AWARD. THUS, THE
SAFEGUARDING OF THE GOVERNMENT'S INTERESTS IS DEPENDENT NOT ON A REVIEW
OF THE MERITS BY GAO BUT ON STRICT COMPLIANCE WITH THE REGULATIONS BY
THE ADJUDICATING AGENCY.
ALTHOUGH THE ARR DID NOT FOLLOW THE PROPER PROCEDURES IN A NUMBER OF
THESE CASES, SINCE THE SOURCE OF PAYMENT MAY HAVE BEEN UNCLEAR TO THE
RAILROAD AND THE CLAIMS COULD HAVE BEEN PAID UNDER 31 U.S.C. SEC. 724A
IF PROPERLY PRESENTED, IN THIS INSTANCE WE WILL PERMIT REIMBURSEMENT
CONSISTENT WITH 28 U.S.C. SEC. 2672 AND 31 U.S.C. SEC. 724A FOR BOTH THE
VOLUNTARY PRE-SETTLEMENT CLAIMS AND SETTLEMENT CLAIMS IN EXCESS OF
$2,500 BUT UNDER $100,000. CLAIMS SETTLED FOR $2,500 OR LESS, OF
COURSE, MUST BE PAID BY ARR. OUR ANSWER IS DIFFERENT WITH RESPECT TO
PAYMENTS IN EXCESS OF $100,000, SUCH AS THE ANZEVINO CLAIM. SINCE THE
PERMANENT APPROPRIATION WAS NOT AVAILABLE FOR PAYMENTS IN EXCESS OF
$100,000 AT THE TIME THE PAYMENTS WERE MADE, THERE IS NO BASIS FOR USING
IT NOW TO REIMBURSE THE RAILROAD. IF THE RAILROAD DESIRES REIMBURSEMENT
FOR THE PAYMENTS IN EXCESS OF $100,000, IT MUST SEEK THE FUNDS FROM THE
CONGRESS.
WE EMPHASIZE THAT OUR DECISION IS NOT TO BE CONSIDERED PRECEDENT FOR
SIMILAR REQUESTS FOR REIMBURSEMENT FROM THE ALASKA RAILROAD OR FROM
OTHER FEDERAL AGENCIES. IF, IN THE FUTURE, FEDERAL AGENCIES DO NOT
COMPLY WITH THE REQUIREMENTS OF THE FEDERAL TORT CLAIMS ACT AND RELEVANT
PROCEDURES, WE WILL NOT CERTIFY THE CLAIMS FOR PAYMENT.
B-192210, JUL 17, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. A NAVY ENLISTED MAN RECEIVED A GENERAL DISCHARGE DUE TO HIS
FRAUDULENT ENLISTMENT AND WAS NOT ENTITLED TO RECEIVE ACCRUED PAY AND
ALLOWANCES. BECAUSE THE BASIS OF WITHHOLDING PAY AND ALLOWANCES IS THAT
THE ENLISTMENT WAS FRAUDULENT AND NOT THAT THE DISCHARGE WAS LESS THAN
HONORABLE, THE UPGRADING OF THE DISCHARGE TO HONORABLE BY THE NAVY
DISCHARGE REVIEW BOARD WITHOUT ALTERING THE FACT THAT THE ENLISTMENT WAS
FRAUDULENT DOES NOT ENTITLE THE MEMBER TO RECEIVE THE ACCRUED PAY AND
ALLOWANCES.
2. A MILITARY MEMBER'S CLAIM FOR PAY AND ALLOWANCES ACCRUES UPON
DISCHARGE AND MUST BE FILED IN THE GENERAL ACCOUNTING OFFICE WITHIN THE
TIME SPECIFIED IN 31 U.S.C. SEC. 71A OR BE FOREVER BARRED FROM OUR
CONSIDERATION. THUS, A CLAIM FOR PAY AND ALLOWANCES WHICH ACCRUED UPON
A MEMBER'S DISCHARGE IN 1954 AND WHICH WAS NOT RECEIVED IN GAO UNTIL
1971 IS BARRED.
3. A CLAIM FOR KOREAN CONFLICT ERA MUSTERING-OUT PAY MUST HAVE BEEN
FILED WITH THE SECRETARY OF THE SERVICE CONCERNED BEFORE JULY 17, 1959,
TO BE PAID. WHERE THERE IS NO EVIDENCE OF SUCH A FILING, A CLAIM FOR
SUCH PAY MAY NOT BE PAID. 38 U.S.C. SEC. 2104 (1958).
ALVIN G. VAVERKA, JR.:
MR. ALVIN G. VAVERKA, JR., HAS REQUESTED RECONSIDERATION OF OUR
CLAIMS DIVISION'S DISALLOWANCE OF HIS CLAIM FOR ARREARS OF PAY AND
ALLOWANCES WHICH HE BELIEVES DUE AS THE RESULT OF A CHANGE IN THE TYPE
OF DISCHARGE HE RECEIVED FROM THE NAVY IN 1969. SINCE, ALTHOUGH THE
TYPE OF DISCHARGE WAS CHANGED, THE REASON FOR IT (FRAUDULENT ENLISTMENT)
WAS NOT CHANGED, WE MUST SUSTAIN THE DISALLOWANCE OF THE CLAIM.
HAVING COMPLETED THREE PERIODS OF ENLISTMENT IN THE NAVY OR THE NAVY
RESERVE BETWEEN 1943 AND 1968 WITH BREAKS OF SEVERAL YEARS BETWEEN EACH
ENLISTMENT, MR. VAVERKA COMMENCED A FOURTH ENLISTMENT ON AUGUST 30,
1968. ON JUNE 13, 1969, HE RECEIVED A GENERAL DISCHARGE ON THE BASIS
THAT HE HAD FRAUDULENTLY ENTERED INTO THIS ENLISTMENT BY FAILING TO
REVEAL CERTAIN INFORMATION THAT WOULD HAVE PREVENTED HIS ENLISTMENT.
SINCE, IN EFFECT, HIS ENLISTMENT WAS VOIDED DUE TO THE FRAUD, MR.
VAVERKA WAS NOT ENTITLED TO ANY ACCRUED PAY AND ALLOWANCES WHICH WERE
UNPAID AT THE TIME THE FRAUD WAS DETERMINED ALTHOUGH HE WAS ENTITLED TO
RETAIN ANY PAYMENTS HE HAD RECEIVED. SUBSEQUENTLY, AS A RESULT OF MR.
VAVERKA'S REQUEST FOR REVIEW OF HIS GENERAL DISCHARGE, HE WAS INFORMED
IN SEPTEMBER 1970 THAT THE SECRETARY OF THE NAVY HAD APPROVED THE
RECOMMENDATION OF THE NAVY DISCHARGE REVIEW BOARD TO CHANGE HIS
DISCHARGE "TO HONORABLE BY REASON OF CONVENIENCE OF THE GOVERNMENT." SEE
10 U.S.C. SEC. 1553 (1970); 32 C.F.R. SECS. 724.1-724.31 (1970).
BASED ON THIS CHANGE IN HIS DISCHARGE, MR. VAVERKA FILED A CLAIM FOR:
1. PAY AND ALLOWANCES FROM MAY 29, 1969, TO JUNE 13, 1969;
2. RECOMPUTED LONGEVITY PAY TAKING INTO ACCOUNT HIS TIME FOR THE
FOURTH ENLISTMENT;
3. ACCUMULATED LEAVE;
4. MUSTERING-OUT PAY; AND
5. INTEREST ON ALL MONEY DUE FROM THE DATE OF DISCHARGE.
AS TO WHETHER THE CHANGING OF MR. VAVERKA'S DISCHARGE FROM GENERAL TO
HONORABLE WILL ALLOW PAYMENT OF HIS CLAIM, WE HAVE CONSISTENTLY HELD
THAT UNDER A FRAUDULENT ENLISTMENT IT IS NOT THE NATURE OF THE DISCHARGE
BUT RATHER THE REASON BEHIND THE CHANGE IN DISCHARGE STATUS WHICH IS
DETERMINATIVE OF THE ISSUE. FOR EXAMPLE, IN 30 COMP. GEN. 18 (1950), WE
CONSIDERED A CASE WHERE AN INDIVIDUAL RECEIVED A GENERAL DISCHARGE
BECAUSE HIS ENLISTMENT WAS FRAUDULENT BY REASON OF CONCEALMENT OF HIS
POLICE RECORD. WHEN THE MEMBER'S DISCHARGE WAS CHANGED TO HONORABLE, WE
RULED THAT HE WAS STILL NOT ENTITLED TO RECEIVE PREVIOUSLY WITHHELD PAY
AND ALLOWANCES BECAUSE THE CHANGE IN DISCHARGE STATUS DID NOT CHANGE THE
CHARACTER OF THE ENLISTMENT.
THE LEGAL PRINCIPLE UNDERLYING THIS RESULT IS THAT THE DISCHARGE OF A
MILITARY MEMBER FOR A FRAUDULENT ENLISTMENT CONSTITUTES AN AVOIDANCE OF
THE CONTRACT OF ENLISTMENT, AND THE PERSON IS NOT ENTITLED TO PAY AND
ALLOWANCES FOR ANY PERIOD SERVED UNDER THE FRAUDULENT ENLISTMENT. 31
COMP. GEN. 357, 359 (1952), AND 54 COMP. GEN. 291, 293 (1974).
THEREFORE, EVEN IF IT HAD BEEN POSSIBLE TO INITIALLY GIVE THE CLAIMANT
AS HONORABLE DISCHARGE, HE WOULD STILL HAVE NOT BEEN ENTITLED TO ACCRUED
PAY AND ALLOWANCES SINCE THE NATURE OF THE DISCHARGE WOULD NOT HAVE
ALTERED THE FRAUDULENT NATURE OF THE ENLISTMENT. 31 COMP. GEN. 357, AND
B-122440, JUNE 8, 1955. IT IS ONLY WHEN THE CHANGE IN THE DISCHARGE IS
BROUGHT ABOUT BECAUSE THE RECORD IS CORRECTED TO SHOW THAT THE
ENLISTMENT WAS NOT FRAUDULENT THAT THE MEMBER IS ENTITLED TO RECEIVE THE
ACCRUED PAY AND ALLOWANCES. SEE B-188041, APRIL 22, 1977.
WE HAVE EXAMINED THE RECORDS OF THE DISCHARGE REVIEW BOARD REGARDING
THE CHANGE IN MR. VAVERKA'S DISCHARGE AND FIND THAT ALTHOUGH THE BOARD
SAW FIT TO DETAIL CERTAIN EXTENUATING CIRCUMSTANCES, THE BOARD DID NOT
FIND THAT THE CHARACTER OF THE ENLISTMENT WAS OTHER THAN FRAUDULENT. TO
CHANGE THE RECORD TO SHOW THAT THE REASON FOR MR. VAVERKA'S DISCHARGE
WAS OTHER THAN FRAUDULENT ENLISTMENT WOULD APPEAR TO REQUIRE ACTION BY
THE NAVY BOARD FOR THE CORRECTION OF MILITARY RECORDS. 10 U.S.C. SEC.
1552 (1976). WITHOUT SUCH A CHANGE IN THE RECORD THERE IS NO AUTHORITY
TO PAY MR. VAVERKA ANY ADDITIONAL AMOUNTS ACCRUED UNDER THAT ENLISTMENT.
FINALLY, IN THE RECENT SUBMISSIONS IN SUPPORT OF MR. VAVERKA'S CLAIM,
THERE IS SUPPLIED, FOR THE FIRST TIME, INFORMATION WHICH INDICATES THAT
APPARENTLY CERTAIN BASES OF HIS CLAIM (E.G., PORTION OF ACCRUED LEAVE
AND MUSTERING-OUT PAY) AROSE FROM HIS ACTIVE SERVICE FROM SEPTEMBER 6,
1950, TO NOVEMBER 16, 1951, DURING THE KOREAN CONFLICT.
AS TO THE MUSTERING-OUT PAY, APPARENTLY HE REFERS TO SUCH PAY
AUTHORIZED FOR KOREAN CONFLICT SERVICE UNDER TITLE V OF THE ACT OF JULY
16, 1952, 66 STAT. 688-691, AS AMENDED, CODIFIED AT 38 U.S.C. SECS.
2101-2105 (1958). HOWEVER, UNDER 38 U.S.C. SEC. 2104, ASSUMING HE WAS
OTHERWISE ENTITLED, HE MUST HAVE FILED AN APPLICATION FOR THE
MUSTERING-OUT PAY BEFORE JULY 17, 1959, WITH THE NAVY. 37 COMP. GEN.
475 (1958). THE RECORD BEFORE US DOES NOT SHOW THAT MR. VAVERKA TIMELY
FILED SUCH AN APPLICATION.
CONCERNING PAYMENT FOR LEAVE ACCRUED DURING THE 1950-1951 PERIOD,
SINCE THAT SERVICE WAS COMPLETED DURING AN ENLISTMENT FROM WHICH THE
CLAIMANT WAS DISCHARGED ON JULY 31, 1954, THIS PORTION OF MR. VAVERKA'S
CLAIM ACCRUED ON THE DAY OF DISCHARGE IN 1954. AT THAT TIME AND UNTIL
HIS CLAIM WAS FIRST RECEIVED IN THE GENERAL ACCOUNTING OFFICE (DECEMBER
21, 1970), THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31 U.S.C.
71A (1970) PROVIDED THAT ANY CLAIM AGAINST THE UNITED STATES COGNIZABLE
BY THE GENERAL ACCOUNTING OFFICE MUST BE RECEIVED IN THAT OFFICE WITHIN
10 YEARS FROM THE DATE IT FIRST ACCRUED OR BE FOREVER BARRED. SINCE HIS
CLAIM WAS FIRST RECEIVED IN THE GENERAL ACCOUNTING OFFICE IN 1970, THAT
PORTION IS BARRED FROM CONSIDERATION. THEREFORE, ANY PORTION OF MR.
VAVERKA'S CLAIM ARISING FROM HIS SERVICE IN KOREA IS BARRED FROM OUR
CONSIDERATION.
ACCORDINGLY, THE SETTLEMENT OF OUR CLAIMS DIVISION IS SUSTAINED.
B-193083, JUL 17, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ARMY DISCRETIONARY DETERMINATION THAT APPLICATION OF BUY AMERICAN
ACT IS NOT IN THE PUBLIC INTEREST IS NOT REVIEWABLE BY GAO.
2. MEMORANDUM OF UNDERSTANDING BETWEEN UNITED STATES AND SWITZERLAND
CONSTITUTES BASIS FOR WAIVER OF BUY AMERICAN ACT.
KEUFFEL & ESSER COMPANY:
KEUFFEL & ESSER COMPANY (K&E) PROTESTS THE AWARD TO WILD HEERBRUGG, A
SWISS FIRM, OF A CONTRACT TO SUPPLY 100 THEODOLITES UNDER INVITATION FOR
BIDS (IFB) NO. DAAK01-78-B-1447, ISSUED BY THE U.S. ARMY TROOP SUPPORT
AND AVIATION MATERIEL READINESS COMMAND, ST. LOUIS, MISSOURI (ARMY).
WILD HEERBRUGG IS THE LOW BIDDER IF PREFERENCE IS NOT GIVEN TO
DOMESTIC BIDS UNDER THE BUY AMERICAN ACT (41 U.S.C. 10A-D (1976)) AND
K&E IS THE LOW BIDDER WITH THE APPLICATION OF THE BUY AMERICAN
EVALUATION CRITERIA. K&E ESSENTIALLY CONTENDS THAT THE ARMY HAS NO
AUTHORITY TO AWARD THE CONTRACT ON THE BASIS OF A WAIVER OF THE BUY
AMERICAN ACT.
A MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE UNITED STATES AND
SWITZERLAND PROVIDES THAT IN ORDER TO OFFSET SUBSTANTIAL PURCHASES BY
THE SWISS GOVERNMENT FROM U.S. SOURCES, THE DEPARTMENT OF DEFENSE (DOD)
WILL ATTEMPT TO PLACE CONTRACTS ON A COMPETITIVE BASIS WITH SWISS
INDUSTRIES. IN THIS CONNECTION, THE MOU STATES:
"IF *** SWISS INDUSTRY OFFERS ITEMS WHICH CAN MEET VALID U.S.
DEFENSE PROCUREMENT ON A COMPETITIVE BASIS, *** THE DOD *** WILL ***
PROVIDE FOR WAIVER TO THE EXTENT PERMITTED UNDER 'BUY NATIONAL'
LEGISLATION AND REGULATIONS."
THE RECORD SHOWS THAT THE ARMY SUBMITTED WILD HEERBRUGG'S LOW BID TO
THE OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (RESEARCH, DEVELOPMENT
AND ACQUISITION) FOR THE DETERMINATION WHETHER IT WOULD BE IN THE PUBLIC
INTEREST TO WAIVE THE RESTRICTIONS OF THE BUY AMERICAN ACT. A WAIVER
WAS GRANTED BASED ON THE ASSISTANT SECRETARY'S DETERMINATION THAT
REJECTION OF THE SWISS CONCERN'S LOW BID WOULD BE INCONSISTENT WITH THE
PUBLIC INTEREST. CONSEQUENTLY, THE ARMY AWARDED THE CONTRACT TO WILD
HEERBRUGG.
THE BUY AMERICAN ACT AT 41 U.S.C. SEC. 10A STATES THAT "*** UNLESS
THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED SHALL
DETERMINE IT TO BE INCONSISTENT WITH THE PUBLIC INTEREST ***," ARTICLES
ACQUIRED FOR PUBLIC USE SHALL HAVE BEEN MINED, PRODUCED, AND
MANUFACTURED IN THE UNITED STATES.
K&E ARGUES THAT WAIVER OF THE APPLICATION OF THE BUY AMERICAN ACT IS
NOT IN THE PUBLIC INTEREST. K&E ASSERTS THAT THE WAIVER IGNORES THE
GOVERNMENT POLICY TO ALLEVIATE BALANCE OF TRADE DEFICIT PROBLEMS, THE
POLICY TO ALLEVIATE CHRONIC UNEMPLOYMENT PROBLEMS PARTICULARLY IN LABOR
SURPLUS AREAS, AND THE POLICY OF SEEKING MAINTENANCE OF DOMESTIC
SUPPLIERS OF CRITICAL DEFENSE ITEMS.
UNDER THE BUY AMERICAN ACT THE DETERMINATION OF WHETHER A PARTICULAR
PURCHASE FROM A DOMESTIC SOURCE IS INCONSISTENT WITH THE PUBLIC INTEREST
IS A MATTER OF DISCRETION VESTED IN THE HEAD OF THE DEPARTMENT OR AGENCY
CONCERNED. THIS DECISION, WHICH OFTEN REQUIRES THE BALANCING OF
CONFLICTING POLICIES, IS NOT SUBJECT TO REVIEW BY OUR OFFICE. BROWN
BOVERI CORPORATION, 56 COMP. GEN. 596 (1977), 77-1 CPD 328; MAREMONT
CORPORATION, 55 COMP. GEN. 1362 (1976), 76-2 CPD 181; 41 COMP. GEN. 70,
73 (1961). THEREFORE, WE DO NOT QUESTION THE ARMY'S DISCRETION IN
DETERMINING THAT THE BUY AMERICAN ACT SHOULD NOT BE APPLIED TO THIS
PROCUREMENT.
K&E ADDITIONALLY ASSERTS THAT THE SECRETARY OF DEFENSE HAD NO
AUTHORITY TO ENTER INTO THE MOU, AND THAT ANY OFFSET AMOUNT PROVIDED FOR
IN THE MOU HAS BEEN EXCEEDED PRIOR TO THE BID OPENING DATE. IN THIS
CONNECTION, THE RECORD SHOWS THAT THE SECRETARY OF DEFENSE PROPERLY
CONCLUDED THE MOU WITH THE APPROVAL OF THE SECRETARY OF STATE. IN
ADDITION, SUBSEQUENT TO K&E'S ASSERTION REGARDING THE LIMITS OF THE
OFFSET AMOUNT, THE ARMY PROVIDED THE PROTESTER AND THIS OFFICE WITH THE
MOST RECENT COMPUTATION OF THE OFFSET DATA, WHICH INDICATES THAT THE
OFFSET OBJECTIVE HAS NOT BEEN EXCEEDED. WE BELIEVE THAT THE MOU BETWEEN
THE UNITED STATES AND SWITZERLAND CONSTITUTES A VALID BASIS FOR WAIVING
THE BUY AMERICAN ACT.
THE PROTEST THEREFORE IS DENIED.
B-193289, JUL 17, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PUBLIC HEALTH SERVICE DOCTOR WHO RETIRED ON APRIL 1, 1974, AND TURNED
HIS HOUSEHOLD GOODS OVER TO CARRIER UNDER GOVERNMENT BILL OF LADING
(GBL) ON MAY 29, 1975, APPEALS DETERMINATION OF INDEBTEDNESS. AGENCY
ESTABLISHED INDEBTEDNESS OF $18,174.23 REPRESENTING VALUE OF GBL SINCE
HIS HOUSEHOLD GOODS WERE NOT TURNED OVER TO CARRIER WITHIN 1 YEAR
FOLLOWING HIS RELIEF FROM ACTIVE DUTY AS REQUIRED BY 37 U.S.C. 406(G)
AND JOINT TRAVEL REGULATIONS PARA. M8260 (JULY 1, 1972). SINCE DR.
RAUSCH DOES NOT QUALIFY UNDER ANY OF THE EXCEPTIONS TO THE 1-YEAR
LIMITATION, HE IS INDEBTED FOR THE VALUE OF THE GBL. FURTHERMORE, THE
INDEBTEDNESS MAY NOT BE CONSIDERED FOR WAIVER UNDER 10 U.S.C. SEC. 2774
(1976).
DR. ROBERT L. RAUSCH - SHIPMENT OF HOUSEHOLD GOODS UPON RELEASE FROM
ACTIVE DUTY:
THIS ACTION CONCERNS THE APPEAL OF DR. ROBERT L. RAUSCH FROM AN
AGENCY DETERMINATION THAT HE WAS LIABLE FOR THE EXPENSE OF SHIPPING HIS
HOUSEHOLD GOODS FROM FAIRBANKS, ALASKA, TO SASKATOON, SASKATCHEWAN,
CANADA, INCIDENT TO HIS RELEASE FROM ACTIVE DUTY WITH THE PUBLIC HEALTH
SERVICE ON MARCH 31, 1974, AND HIS RETIREMENT ON APRIL 1, 1974. UPON
REVIEW OUR CLAIMS DIVISION CONCURRED WITH THE AGENCY DETERMINATION.
DR. RAUSCH RETIRED FROM THE PUBLIC HEALTH SERVICE (SERVICE) ON APRIL
1, 1974. HIS HOUSEHOLD GOODS WERE TURNED OVER TO A CARRIER UNDER A
GOVERNMENT BILL OF LADING (GBL) ON MAY 29, 1975. ALTHOUGH THE GBL WAS
DATED MARCH 6, 1975, THE SERVICE FOUND DR. RAUSCH INDEBTED FOR
$18,174.23 SINCE THE HOUSEHOLD GOODS WERE NOT TURNED OVER TO THE CARRIER
FOR SHIPMENT WITHIN 1 YEAR FOLLOWING HIS RELIEF FROM ACTIVE DUTY, AS
REQUIRED BY 1 JOINT TRAVEL REGULATIONS (JTR) PARA. M8260 (JULY 1, 1972).
DR. RAUSCH ARGUES THAT THE DELAY IN PRESENTING HIS HOUSEHOLD GOODS TO
THE CARRIER WAS DUE TO CONDITIONS BEYOND HIS CONTROL. SPECIFICALLY, HE
STATES THAT THE LONG, SEVERE ALASKAN WINTER AND THE MELTING OF THE SNOW
DURING THE MONTH OF APRIL COMBINED TO RENDER HIS DRIVEWAY, WHICH HE
DESCRIBES AS LONG, NARROW AND STEEP, IMPASSABLE TO A LARGE MOVING
COMPANY VAN UNTIL THE MIDDLE OF MAY. UPON LEARNING THAT IT WOULD NOT BE
FEASIBLE TO ATTEMPT THE MOVEMENT OF HIS HOUSEHOLD GOODS UNTIL MAY, DR.
RAUSCH CONTACTED THE TRANSPORTATION OFFICER AT THE ALASKA NATIVE MEDICAL
CENTER, ANCHORAGE, AND ADVISED HER OF THE CIRCUMSTANCES. HE REPORTS
THAT SHE DID NOT FORESEE ANY PROBLEM SINCE THE GBL HAD BEEN ISSUED
BEFORE THE EXPIRATION OF THE 1-YEAR TIME LIMITATION.
SECTION 406(G), TITLE 37, UNITED STATES CODE, PROVIDES THAT, UNDER
UNIFORM REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A MEMBER
WHO IS RETIRED IS, NOT LATER THAN 1 YEAR FROM THE DATE HE IS SO RETIRED,
EXCEPT AS PRESCRIBED IN REGULATIONS BY THE SECRETARIES CONCERNED,
ENTITLED TO TRANSPORTATION FOR HIS DEPENDENTS, BAGGAGE, AND HOUSEHOLD
EFFECTS TO THE HOME SELECTED BY HIM.
PARAGRAPH M8260 (JULY 1, 1972) OF THE JOINT TRAVEL REGULATIONS
PROMULGATED BY THE SECRETARIES PURSUANT TO 37 U.S.C. 406(G) PROVIDES
THAT THE HOUSEHOLD GOODS OF A MEMBER WHO IS RETIRED MUST BE TURNED OVER
TO A TRANSPORTATION OFFICER OR CARRIER FOR SHIPMENT WITHIN 1 YEAR
FOLLOWING TERMINATION OF ACTIVE DUTY.
THUS, THE LAW AND REGULATIONS IMPOSE A 1-YEAR TIME LIMIT FOR SHIPMENT
OF HOUSEHOLD GOODS AT GOVERNMENT EXPENSE FROM THE DATE OF THE MEMBER'S
TERMINATION OF ACTIVE SERVICE, UNLESS HE COMES WITHIN THE EXCEPTIONS
PRESCRIBED IN THE REGULATIONS. THE SECRETARIES HAVE ISSUED REGULATIONS
EXTENDING THE 1-YEAR LIMITATION IN THE CASE OF PERSONS IN A RETIRED
STATUS WHO ARE UNDERGOING HOSPITALIZATION OR MEDICAL TREATMENT OR
SCHOOLING OR TRAINING AT THE TIME OF RETIREMENT OR DURING THE 1-YEAR
PERIOD AFTER RETIREMENT. SEE 46 COMP. GEN. 764 (1967). DR. RAUSCH DOES
NOT QUALIFY UNDER ANY OF THE EXCEPTIONS THAT WERE IN FORCE AT THE TIME
OF HIS RETIREMENT.
REGARDING DR. RAUSCH'S STATEMENT THAT HE WAS MISINFORMED BY THE
TRANSPORTATION OFFICER AT THE ALASKA NATIVE MEDICAL CENTER, IT IS CLEAR
THAT AN EMPLOYEE'S ENTITLEMENTS ARE GOVERNED BY APPLICABLE STATUTE OR
REGULATION AND ABSENT ANY STATUTORY PROVISION FOR RELIEF SUCH RIGHTS
CANNOT BE ENLARGED BY THE UNAUTHORIZED ACTS OF ADMINISTRATIVE OFFICIALS.
MATTER OF DR. KEITH A. BAKER, B-186758, MARCH 23, 1977.
WE NOTE THAT THE JTR WAS AMENDED EFFECTIVE AUGUST 1, 1976, BY THE
ADDITION OF A NEW SUBPARAGRAPH M8260-6 TITLED "OTHER DESERVING CASES."
THE NEW REGULATION AUTHORIZED THE SECRETARY CONCERNED TO GRANT AN
EXTENSION TO THE 1-YEAR TIME LIMITATION WHERE AN UNEXPECTED EVENT BEYOND
THE CONTROL OF THE MEMBER HAS OCCURRED WHICH PREVENTED HIM FROM MOVING
WITHIN THE ALLOWABLE PERIOD. IN B-194599, MAY 22, 1979, WE HELD THAT
THE AUTHORITY UNDER JTR PARA. M8260 (NOW M8262-6) MAY NOT BE EXERCISED
WHERE THE 1-YEAR TIME LIMITATION HAD EXPIRED PRIOR TO AUGUST 1, 1976,
THE EFFECTIVE DATE OF THE CHANGE INCORPORATING THAT SUBPARAGRAPH INTO
THE JTR. ACCORDINGLY, DR. RAUSCH'S CASE MAY NOT BE CONSIDERED UNDER
THAT REGULATION.
WE ARE NOT AWARE OF ANY OTHER PROVISION THAT WOULD AUTHORIZE PAYMENT
OF DR. RAUSCH'S HOUSEHOLD GOODS TRANSPORTATION EXPENSES. FINALLY, DR.
RAUSCH'S INDEBTEDNESS MAY NOT BE CONSIDERED FOR WAIVER ACTION UNDER 10
U.S.C. SEC. 2774 (1976), WHICH AUTHORIZES THE WAIVER OF ERRONEOUS
PAYMENTS OF ANY PAY OR ALLOWANCES OTHER THAN TRAVEL AND TRANSPORTATION
ALLOWANCES.
IN VIEW OF THE ABOVE WE AFFIRM THE DETERMINATION THAT DR. RAUSCH IS
INDEBTED TO THE UNITED STATES FOR THE EXPENSES OF SHIPPING HIS HOUSEHOLD
GOODS.
B-193837, JUL 17, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. A CIVILIAN EMPLOYEE OF A DOD AGENCY INCURRED A REAL ESTATE
EXPENSE (UNEXPIRED LEASE COST) ON TRANSFER TO AN OVERSEAS PERMANENT DUTY
STATION. HE MAY NOT BE REIMBURSED FOR SUCH COST, NOTWITHSTANDING
ASSERTION THAT THE TIMING OF THE TRANSFER WAS FOR THE CONVENIENCE OF THE
GOVERNMENT, SINCE 5 U.S.C. 5724A PERMITS REIMBURSEMENT ONLY WHERE BOTH
OLD AND NEW STATIONS ARE IN THE UNITED STATES, PUERTO RICO OR CANAL
ZONE.
2. A DEFENSE DEPARTMENT CIVILIAN EMPLOYEE AUTHORIZED TO TRANSPORT
HIS POV AT GOVERNMENT EXPENSE ON A OVERSEAS PERMANENT CHANGE OF STATION,
UNDER PARA. C11004-4 OF THE JOINT TRAVEL REGULATIONS IS PRECLUDED BY THE
REGULATION FROM COMMERCIAL SHIPMENT OF THE VEHICLE BETWEEN PORT AND DUTY
STATION. HOWEVER, UNDER FEDERAL TRAVEL REGULATIONS AND THAT PARAGRAPH
MILEAGE MAY BE PAID BETWEEN PORT AND DUTY STATION REGARDLESS OF THE
METHOD OF TRANSPORTATION USED.
MR. LOUIS DE BEER:
THIS ACTION IS IN RESPONSE TO A LETTER DATED DECEMBER 18, 1978
(REFERENCE SERIAL: N41/534), WITH ENCLOSURES, FROM THE CHIEF, FINANCE
AND ACCOUNTING, CENTRAL SECURITY SERVICE, NATIONAL SECURITY AGENCY
(NSA), REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING
PAYMENT ON A VOUCHER IN FAVOR OF MR. LOUIS DE BEER, AN EMPLOYEE OF NSA,
REPRESENTING REIMBURSEMENT FOR CERTAIN EXPENSES INCURRED BY HIM INCIDENT
TO AN OVERSEAS PERMANENT CHANGE-OF-STATION ASSIGNMENT IN 1978. THIS
CORRESPONDENCE WAS FORWARDED TO THIS OFFICE BY ENDORSEMENT OF THE PER
DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE DATED DECEMBER 29,
1978, AND HAS BEEN ASSIGNED CONTROL NO. 78-51.
THE SUBMISSION STATES THAT THE EMPLOYEE PERFORMED PERMANENT CHANGE OF
STATION TRAVEL FROM FORT GEORGE G. MEADE, MARYLAND, TO FRANKFURT,
GERMANY, UNDER AUTHORITY OF TRAVEL ORDER NO. TP8 A0692, DATED MARCH 7,
1978. ITEM 15 OF THOSE ORDERS AUTHORIZED THE SHIPMENT OF HIS PRIVATELY
OWNED VEHICLE (POV). AMONG THE EXPENSES FOR WHICH REIMBURSEMENT WAS
CLAIMED INCIDENT TO THIS TRAVEL AND DISALLOWED BY NSA, WAS THE
EMPLOYEE'S COST TO HAVE ANOTHER INDIVIDUAL PICK UP HIS POV AT THE PORT
OF DEBARKATION, BREMERHAVEN, GERMANY, AND DELIVER IT TO HIM AT HIS
OFFICIAL DUTY STATION, FRANKFURT, GERMANY. THE OTHER EXPENSE ITEM WAS
FOR ONE-HALF MONTH'S RENT AT HIS OLD DUTY STATION WHICH HE LOST ON
TRANSFER.
WITH REGARD TO THE UNEXPIRED LEASE EXPENSE, THE SUBMISSION STATES
THAT DISALLOWANCE WAS BASED ON THE FACT THAT THE ITEM WAS A REAL ESTATE
EXPENSE AND THAT THE APPLICABLE LAWS AND REGULATIONS DO NOT PERMIT
REIMBURSEMENT WHEN EITHER THE OLD OR THE NEW DUTY STATION ARE IN A
FOREIGN COUNTRY. IN RESPONSE, THE CLAIMANT ADVANCED THE THEORY THAT THE
PURPOSE OF HIS PERMANENT CHANGE OF STATION TRAVEL AT THAT PARTICULAR
TIME WAS TO ENSURE ADEQUATE TRANSITION BETWEEN THE INDIVIDUAL WHO HE WAS
REPLACING AND HIMSELF. THEREFORE, IT IS ARGUED THAT HIS UNEXPIRED LEASE
COST WAS INCURRED FOR THE CONVENIENCE OF THE GOVERNMENT AND IS THEREFORE
REIMBURSABLE.
THE PROVISIONS OF LAW GOVERNING THESE MATTERS ARE CONTAINED IN 5
U.S.C. 5724A, SUBSECTION (A) OF WHICH PROVIDES IN PART:
"(A) UNDER *** REGULATIONS *** FUNDS AVAILABLE TO AN AGENCY FOR
ADMINISTRATIVE EXPENSES ARE AVAILABLE FOR THE REIMBURSEMENT *** OF THE
FOLLOWING EXPENSES OF AN EMPLOYEE ***
"(4) EXPENSES OF THE SALE OF THE RESIDENCE (OR THE SETTLEMENT OF AN
UNEXPIRED LEASE) OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A
HOME AT THE NEW OFFICIAL STATION REQUIRED TO BE PAID BY HIM WHEN THE OLD
AND THE NEW OFFICIAL STATIONS ARE LOCATED WITHIN THE UNITED STATES, ITS
TERRITORIES OR POSSESSIONS, THE COMMONWEALTH OF PUERTO RICO, OR THE
CANAL ZONE. ***"
REGULATIONS ISSUED PURSUANT TO THE FOREGOING ARE CONTAINED IN CHAPTER
14 OF VOLUME 2 OF THE JOINT TRAVEL REGULATIONS (JTR) AND SET FORTH THE
ABOVE-QUOTED LANGUAGE IN SUBPARAGRAPH C14000-1.1., THEREOF.
ADDITIONALLY, PARAGRAPH C1400-1, ENTITLED "EXCLUSIONS" PROVIDES IN PART:
"THE PROVISIONS OF THIS CHAPTER (14) DO NOT APPLY TO THE FOLLOWING:
"2. AN EMPLOYEE TRANSFERRED FROM OR TO A DUTY POST OUTSIDE THE
UNITED STATES, COMMONWEALTH OF PUERTO RICO, OR THE CANAL ZONE:"
SINCE THE STATUTE SPECIFICALLY PROHIBITS REIMBURSEMENT FOR THIS
EXPENSE, THE QUESTION OF CONVENIENCE OF THE GOVERNMENT IS NOT REACHED.
WE ARE UNAWARE OF ANY OTHER PROVISIONS OF LAW OR REGULATION UNDER WHICH
THE CLAIMED UNEXPIRED LEASE EXPENSE MAY BE PAID.
REGARDING POV TRANSPORTATION COSTS, THE SUBMISSION STATES THAT UNDER
PROVISIONS OF THE JTR'S, AN EMPLOYEE IS NOT AUTHORIZED TO SHIP HIS POV
FROM A VEHICLE PORT OF DEBARKATION TO HIS NEW PERMANENT DUTY STATION.
IT GOES ON TO STATE THAT PARAGRAPH C11004-4 OF THESE REGULATIONS DOES,
HOWEVER, AUTHORIZE REIMBURSEMENT OF ONE-WAY TRANSPORTATION COST AND
ONE-WAY MILEAGE, BUT NO PER DIEM, WHEN THE EMPLOYEE IS REQUIRED TO MAKE
A SEPARATE TRIP TO THE PORT TO PICK UP HIS VEHICLE AND RETURN TO HIS NEW
DUTY STATION. THE CLAIMANT, RATHER THAN PERSONALLY PICKING UP THE
VEHICLE, HIRED ANOTHER INDIVIDUAL TO PICK IT UP AT BREMERHAVEN AND DRIVE
IT TO FRANKFURT FOR A FEE OF $50.
THE AGENCY DISALLOWANCE OF THAT ITEM WAS FOR THE REASON THAT THE
JTR'S DO NOT PROVIDE FOR REIMBURSEMENT ON THAT BASIS, EXPRESSING THE
VIEW THAT THE APPLICABLE LANGUAGE SEEMS TO AUTHORIZE REIMBURSEMENT ONLY
WHEN THE EMPLOYEE PERSONALLY PERFORMS THE TRAVEL.
BASED ON THE FOREGOING, THE FOLLOWING QUESTIONS ARE ASKED:
"A. MAY THE $50.00 CLAIMED FOR DELIVERY OF THE VEHICLE BE PAID?
"B. IF THE CLAIM IS APPROVED FOR PAYMENT, WAS THE APPROVAL BASED ON
THE FACT THAT THE METHOD USED WAS COST EFFECTIVE TO THE GOVERNMENT?
"C. IF THE ANSWERS TO THE PRECEDING QUESTIONS ARE IN THE
AFFIRMATIVE, COULD REIMBURSEMENT BE MADE TO EMPLOYEES WHO HAVE HAD A
GERMAN TRANSPORT COMPANY PICK UP THEIR VEHICLE AND DELIVER IT TO THEIR
DUTY STATION?"
THE AUTHORITY FOR THE TRANSPORTATION OF A PRIVATELY OWNED VEHICLE AT
GOVERNMENT EXPENSE IS DERIVED FROM 5 U.S.C. 5727(B). THIS AUTHORITY IS
IMPLEMENTED BY THE FEDERAL TRAVEL REGULATIONS (FTR) (FPMR 101-7, AS
AMENDED) AND FOR DEPARTMENT OF DEFENSE EMPLOYEES, CHAPTER 11 OF VOLUME 2
OF THE JTR'S.
PARAGRAPH C11004-4 OF VOLUME 2 OF THE JTR'S, CITED IN THE SUBMISSION,
PROVIDES IN PERTINENT PART:
"4. MOVEMENT FROM PORTS. AN EMPLOYEE IS NOT ENTITLED TO SHIP HIS
PRIVATELY OWNED MOTOR VEHICLE FROM A VEHICLE PORT FACILITY TO HIS NEW
PERMANENT DUTY STATION. WHEN AN EMPLOYEE MAKES A SEPARATE TRIP TO A
PORT TO RECLAIM HIS VEHICLE, PER DIEM IS NOT ALLOWABLE BUT ONE-WAY
TRANSPORTATION COSTS AND ONE-WAY MILEAGE AT THE RATE PRESCRIBED IN PAR.
C4651-2A ARE AUTHORIZED.
THE TOTAL OF THE ONE-WAY TRANSPORTATION COST AND ONE-WAY MILEAGE PAID
BY THE GOVERNMENT MAY NOT EXCEED THE COST OF SHIPPING THE PRIVATELY
OWNED VEHICLE FROM THE PORT INVOLVED TO THE EMPLOYEE'S NEW PERMANENT
DUTY STATION. ***"
UNDER THE FTR AN EMPLOYEE WHO IS AUTHORIZED TO HAVE HIS AUTOMOBILE
TRANSPORTED TO HIS OVERSEAS DUTY STATION MAY HAVE TRANSPORTATION
AUTHORIZED FOR ALL OR PART OF THE DISTANCE BETWEEN ORIGIN AND
DESTINATION. ALSO, IF DRIVING THE AUTOMOBILE FOR ALL OR PART OF THE
DISTANCE BETWEEN AUTHORIZED ORIGIN AND DESTINATION IS FEASIBLE THE
EMPLOYEE MAY BE RESTRICTED TO REIMBURSEMENT ON A MILEAGE BASIS.
PARAGRAPH 2-10.4C OF THE FTR AUTHORIZES HEADS OF AGENCIES TO
DETERMINE THAT AN EMPLOYEE SHOULD BE EXPECTED TO DRIVE HIS AUTOMOBILE.
IF DRIVEN, THE USUAL REIMBURSEMENT IS ON A MILEAGE BASIS AS PROVIDED IN
2-2.3 OF THOSE REGULATIONS. ALTHOUGH THE PROVISION CONTEMPLATES THAT
THE EMPLOYEE OR A MEMBER OF HIS FAMILY WILL DRIVE THE AUTOMOBILE, WE
VIEW THAT RESTRICTION AS A PAYMENT LIMITATION RATHER THAN A REQUIREMENT
THAT THE TRANSPORTATION BE PERFORMED IN THIS SPECIFIC MANNER. THAT
REGULATION ALSO PROVIDES FOR PAYING THE COST OF A TRIP TO THE PORT TO
PICK UP THE AUTOMOBILE IF THAT IS REQUIRED.
UNDER THAT BASIC AUTHORITY PARAGRAPH C11004-4, 2 JTR, IS VIEWED AS
THE DETERMINATION AUTHORIZED BY PARAGRAPH 2-10.4C, FTR - THAT DRIVING AN
AUTOMOBILE BETWEEN THE PORT AND THE ORIGIN OR DESTINATION IS FEASIBLE.
IT FOLLOWS THAT REIMBURSEMENT ON A MILEAGE BASIS AS PROVIDED FOR IN THE
FTR IS AUTHORIZED WHEN THE EMPLOYEE DOES NOT MAKE A SPECIFIC TRIP TO THE
PORT TO DELIVER OR PICK UP THE AUTOMOBILE.
ACCORDINGLY, WHILE THE ACTUAL COST FOR DELIVERY OF THE AUTOMOBILE MAY
NOT BE REIMBURSED THE CLAIMANT MAY BE PAID MILEAGE FOR THE
TRANSPORTATION OF HIS AUTOMOBILE FROM BREMERHAVEN TO FRANKFURT. THE
ONLY LIMITATIONS ON MILEAGE PAID ARE THAT IT SHALL BE AS PROVIDED IN
PARAGRAPH 2-2.3 OF THE FTR AND SHALL NOT EXCEED THE COMMERCIAL
TRANSPORTATION COST. SUCH PAYMENT IS CONSIDERED AS AUTHORIZED BY THE
APPLICABLE REGULATION REGARDLESS OF THE MEANS USED BY THE EMPLOYEE TO
SECURE TRANSPORTATION OF THE VEHICLE.
THE QUESTIONS PRESENTED ARE ANSWERED ACCORDINGLY.
B-194391, JUL 16, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
GAO HAS NO AUTHORITY UNDER 28 U.S.C. SEC. 2410(E) TO ISSUE
CERTIFICATE RELEASING RIGHT OF REDEMPTION ACCRUING TO SMALL BUSINESS
ADMINISTRATION (SBA) UNDER 28 U.S.C. SEC. 2410(C) ON BEHALF OF MORTGAGEE
WHO PURCHASED PROPERTY AT FORECLOSURE SALE. STATUTE DOES NOT APPLY
SINCE MORTGAGEE AFTER PURCHASE IS NO LONGER A LIENHOLDER BUT OWNS
PROPERTY IN FEE SIMPLE. HOWEVER, UNDER 15 U.S.C. SEC. 634, SBA MAY
RELEASE RIGHT OF REDEMPTION IN CONSIDERATION OF MONETARY PAYMENT BY
PROPERTY OWNER.
SMALL BUSINESS ADMINISTRATION - RELEASE OF RIGHT OF REDEMPTION:
THE SMALL BUSINESS ADMINISTRATION (SBA) HAS ASKED US TO ISSUE A
CERTIFICATE OF RELEASE OF A LIEN UNDER 28 U.S.C. SEC. 2410(E)(1976) IN
THE CIRCUMSTANCES DESCRIBED BELOW. FOR THE REASONS THAT FOLLOW, WE
CONCLUDE THAT 28 U.S.C. SEC. 2410(E) IS INAPPLICABLE TO THE SITUATION
PRESENTED, BUT THAT THE GOVERNMENT'S INTEREST MAY BE TERMINATED WITHOUT
RESORT TO THAT STATUTE.
SBA HELD A SECOND MORTGAGE ON CERTAIN REAL ESTATE IN INDIANA,
ORIGINALLY OWNED BY THOMAS H. LOOPER AND JANICE L. LOOPER. THE SENIOR
MORTGAGE WAS HELD BY SHELBY FEDERAL SAVINGS AND LOAN (SHELBY). THE
LOOPERS APPARENTLY DEFAULTED ON THEIR MORTGAGE AND SHELBY INITIATED
FORECLOSURE PROCEEDINGS. THE RECORD INDICATES THAT SHELBY WAS THE
HIGHEST BIDDER AT THE FORECLOSURE SALE, PURCHASING THE PROPERTY FOR THE
AMOUNT OF ITS JUDGMENT. THE UNITED STATES MARSHALL THEN DEEDED THE
PROPERTY TO SHELBY IN FEE SIMPLE ABSOLUTE.
THE UNITED STATES RETAINS A RIGHT OF REDEMPTION UNDER 28 U.S.C. SEC.
2410(C)(1976) WHICH PROVIDES IN PERTINENT PART, "WHERE A SALE OF REAL
ESTATE IS MADE TO SATISFY A LIEN PRIOR TO THAT OF THE UNITED STATES, THE
UNITED STATES SHALL HAVE ONE YEAR FROM THE DATE OF SALE WITHIN WHICH TO
REDEEM." IN ORDER TO CONCLUDE A PROSPECTIVE SALE OF THE PROPERTY, SHELBY
HAS TENDERED $100 TO SBA IN CONSIDERATION FOR RELEASE OF THE
GOVERNMENT'S RIGHT OF REDEMPTION. SBA HAS TENTATIVELY ACCEPTED THE
PAYMENT, SUBJECT TO GAO'S APPROVAL "PURSUANT TO 28 U.S.C. SEC.
2410(E)."
IN THE CIRCUMSTANCES PRESENTED, GAO HAS NO AUTHORITY TO ISSUE A
CERTIFICATE OF RELEASE PURSUANT TO 28 U.S.C. SEC. 2410(C). THE STATUTE
PROVIDES THAT THE COMPTROLLER GENERAL MAY ISSUE A CERTIFICATE RELEASING
A GOVERNMENT LIEN, OTHER THAN A TAX LIEN, ON ANY REAL OR PERSONAL
PROPERTY UPON THE REQUEST OF A SENIOR LIENHOLDER, PROVIDED CERTAIN
SPECIFIC CONDITIONS HAVE BEEN MET. ALTHOUGH IT IS UNCLEAR WHETHER A
STATUTORY RIGHT OF REDEMPTION MAY BE CONSTRUED AS A LIEN FOR PURPOSES OF
THE STATUTE, THERE IS NO NEED TO RESOLVE THAT QUESTION HERE. RATHER, IT
IS DISPOSITIVE THAT SHELBY IS NOW A FEE SIMPLE OWNER OF THE PROPERTY,
RATHER THAN THE HOLDER OF A SENIOR LIEN INTEREST. THE DEFAULT JUDGMENT
OF FORECLOSURE COMPLETELY TERMINATED SHELBY'S MORTGAGE LIEN ON THE
PROPERTY. WE HAVE CONSISTENTLY HELD THAT A CERTIFICATE OF RELEASE MAY
NOT BE ISSUED TO THE PROPERTY OWNER. FOR EXAMPLE, IN OUR DECISION
B-165746, DECEMBER 26, 1968, WE STATED:
"OUR OFFICE HAS NO AUTHORITY TO ISSUE A CERTIFICATE OF RELEASE OF
LIENS OF THE UNITED STATES UNDER THE ABOVE-QUOTED STATUTORY PROVISION
EXCEPT UPON THE CONDITIONS EXPRESSLY STIPULATED THEREIN. ONE OF THE
CONDITIONS EXPRESSLY STIPULATED IS THAT THE APPLICANT 'HAS A LIEN' UPON
THE PROPERTY. WHERE, AS IN THIS CASE, THE APPLICANT BECOMES THE OWNER
OF THE PROPERTY BEFORE THE ISSUANCE OF THE RELEASE, THE APPLICANT NO
LONGER HAS A LIEN UPON THE PROPERTY SO THAT THE AFOREMENTIONED CONDITION
STIPULATED IN THE STATUTE NO LONGER EXISTS. IN THE ABSENCE OF SUCH
CONDITION, OUR OFFICE IS WITHOUT AUTHORITY TO ISSUE A CERTIFICATE OF
RELEASE. SEE 17 COMP. GEN. 180 AND 30 ID. 268."
WHILE A CERTIFICATE OF RELEASE IS INAPPROPRIATE FOR THE REASONS
STATED ABOVE, AND ALTHOUGH GAO HAS NO AUTHORITY TO WAIVE THE
GOVERNMENT'S RIGHT OF REDEMPTION (SEE B-165746, DECEMBER 26, 1968), THE
ISSUE OF WHETHER SBA CAN ACCEPT THE $100 CHECK FROM SHELBY IN
CONSIDERATION FOR RELEASING THE GOVERNMENT'S RIGHT OF REDEMPTION MAY BE
RESOLVED WITHOUT RESORT TO THE PROVISIONS OF 28 U.S.C. SEC. 2410(E).
WE HAVE BEEN INFORMALLY ADVISED BY SBA THAT THE SECOND MORTGAGE, FROM
WHICH THE RIGHT OF REDEMPTION AROSE, WAS GIVEN TO SBA TO SECURE A DIRECT
BUSINESS LOAN PURSUANT TO 15 U.S.C. SEC. 636 (1976). 15 U.S.C. SEC.
634(B)(2)(1976) PROVIDES THAT THE ADMINISTRATOR OF SBA HAS THE FOLLOWING
POWERS.
"*** UNDER REGULATIONS PRESCRIBED BY HIM, (THE ADMINISTRATOR MAY)
ASSIGN OR SELL AT PUBLIC OR PRIVATE SALE, OR OTHERWISE DISPOSE OF FOR
CASH OR CREDIT, IN HIS DISCRETION AND UPON SUCH TERMS AND CONDITIONS AND
FOR SUCH CONSIDERATION AS THE ADMINISTRATOR SHALL DETERMINE TO BE
REASONABLE, ANY EVIDENCE OF DEBT, CONTRACT, CLAIM, PERSONAL PROPERTY, OR
SECURITY ASSIGNED TO OR HELD BY HIM IN CONNECTION WITH THE PAYMENT OF
LOANS GRANTED UNDER THIS CHAPTER, AND TO COLLECT OR COMPROMISE ALL
OBLIGATIONS ASSIGNED TO OR HELD BY HIM AND ALL LEGAL OR EQUITABLE RIGHTS
ACCRUING TO HIM IN CONNECTION WITH THE PAYMENT OF SUCH LOANS UNTIL SUCH
TIME AS SUCH OBLIGATIONS MAY BE REFERRED TO THE ATTORNEY GENERAL FOR
AUIT OR COLLECTION."
THEREFORE, IT APPEARS THAT THE ADMINISTRATOR HAS DISCRETIONARY
AUTHORITY TO ACCEPT PAYMENT IN EXCHANGE FOR RELEASE OF THE ONE-YEAR
RIGHT OF REDEMPTION.
AS MENTIONED ABOVE, THE RECORD INDICATES THAT SBA IS NOW IN
POSSESSION OF A CHECK FOR $100 RECEIVED FROM SHELBY. A QUESTION REMAINS
CONCERNING THE PROPER DISPOSITION OF THOSE FUNDS, IF THEY ARE IN FACT
RETAINED BY SBA. THE GENERAL RULE IS THAT, UNLESS AN AGENCY HAS
SPECIFIC STATUTORY AUTHORITY TO THE CONTRARY, FUNDS RECEIVED "FROM
WHATEVER SOURCE FOR THE USE OF THE UNITED STATES" MUST BE DEPOSITED IN
THE TREASURY AS MISCELLANEOUS RECEIPTS. 31 U.S.C. SEC. 484 (1976).
THIS RULE DOES NOT APPLY IF AN AGENCY HAS A REVOLVING FUND AND THE
STATUTORY AUTHORITY TO DEPOSIT RECEIPTS INTO IT. ACCORDING TO 15 U.S.C.
SEC. 636(C)(1976), IF THE UNDERLYING LOAN WAS MADE PURSUANT TO SECTION
636(B)(1), 636(B)(2), 636(B)(4), 636(B)(5), 636(B)(6), 636(B)(7),
636(B)(8), OR 636(C)(2), THE $100 SHOULD BE DEPOSITED IN SBA'S DISASTER
LOAN REVOLVING FUND AS A RECEIPT ARISING OUT OF THE TRANSACTION. IF THE
LOAN WAS MADE PURSUANT TO SECTION 636(A), 636(B)(3), 636(E), 636(H), OR
636(I), THE $100 SHOULD BE DEPOSITED IN SBA'S BUSINESS LOAN AND
INVESTMENT REVOLVING FUND. THUS, THE $100 MAY BE DEPOSITED IN THE
APPROPRIATE REVOLVING FUND IF THE UNDERLYING LOAN IS COVERED BY 15
U.S.C. SEC. 633(C), SUPRA, OR A SIMILAR STATUTORY PROVISION. OTHERWISE
IT MUST BE DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS.
WE UNDERSTAND FROM INFORMAL DISCUSSIONS WITH SBA THAT THE QUESTION
HAS BECOME MOOT WITH RESPECT TO THE SHELBY SITUATION. SBA HAS ADVISED
US, HOWEVER, THAT OUR DECISION IS STILL DESIRED, USING THE FACTS OF THE
SHELBY CASE FOR PURPOSES OF ILLUSTRATION, TO PROVIDE GUIDANCE FOR
SIMILAR SITUATIONS THAT MAY ARISE IN THE FUTURE.
B-195576 O.M. (C), JUL 16, 1979
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
COMPTROLLER GENERAL:
WE ARE FORWARDING THE FILES RELATIVE TO THE CLAIM OF MS. JEWELL FORD,
MR. RUFUS WILLIAMS, MS. MABEL MARLOWE, MR. BRUCE PYLES, MS. MARLENE
RICE, AND MS. PHYLLIS SCOOPMIRE FOR RETROACTIVE TEMPORARY PROMOTIONS
WITH BACK PAY BASED ON OVERLONG DETAILS TO HIGHER GRADED POSITIONS.
ALL OF THESE CLAIMS INVOLVE DETAILS TO POSITIONS CLASSIFIED AT MORE
THAN ONE GRADE ABOVE THE GRADE OF THE CLAIMANTS' APPOINTED POSITIONS.
ADDITIONALLY, THESE DETAILS WERE TO POSITIONS IN DIFFERENT JOB SERIES
THAN THE INDIVIDUALS' APPOINTED POSITIONS. THE FACTUAL SITUATIONS
INVOLVED IN THE INDIVIDUAL CASES ARE AS FOLLOWS.
MS. FORD, A GS-301-4, MEDICAL APPOINTMENT CLERK, WAS ASSIGNED THE
DUTIES OF A GS-1410-7, MEDICAL LIBRARIAN POSITION DURING JULY 1973, DUE
TO THE ABSENCE OF THE INCUMBENT PENDING DISABILITY RETIREMENT. HER
DETAIL CONTINUED THROUGH JANUARY 4, 1974, WITH THE PERIOD OCTOBER 15 TO
DECEMBER 14, 1973 BEING OFFICIALLY RECOGNIZED AT THE TIME. UNDER
ARTICLE 20.13 OF THE APPLICABLE NEGOTIATED AGREEMENT SHE WOULD BE
ENTITLED TO PROMOTION ON THE 61ST DAY OF HER DETAIL IF SHE WAS QUALIFIED
FOR SUCH A PROMOTION. SEE B-180311, OCTOBER 4, 1974, AND B-183937, JUNE
23, 1977. HER AGENCY STATES THAT SHE HAD NOT PREVIOUSLY HELD A HIGHER
GRADE THAN GS-4 AND THAT SHE DID NOT MEET THE QUALIFICATION REQUIREMENTS
FOR A GS-1410-7 MEDICAL LIBRARIAN POSITION.
MR. WILLIAMS, A GS-856-11, ELECTRONIC TECHNICIAN (RADIO), CLAIMS TO
HAVE BEEN DETAILED TO A GS-855-13, SUPERVISORY ELECTRONIC ENGINEER
(ELECTROMAGNETIC) POSITION FROM MARCH 1, 1971 TO OCTOBER 1974. HIS
AGENCY STATES THAT HE DID NOT MEET THE EDUCATIONAL OR PROFESSIONAL
REQUIREMENTS FOR PLACEMENT IN THE ENGINEERING JOB SERIES. THE PERIOD OF
HIS CLAIM PRIOR TO JANUARY 2, 1973 IS BARRED FROM CONSIDERATION FOR
PAYMENT BY 31 U.S.C. 71A.
MS. MARLOWE, WHO WAS APPOINTED AS A GS-301-4, PRODUCTION CONTROL
CLERK THROUGH DECEMBER 9, 1972, AND A GS-1152-4, PRODUCTION CONTROL AID
THROUGH FEBRUARY 28, 1973, HAS PROVIDED SF-172'S, CERTIFIED BY
MANAGEMENT OFFICIALS, STATING THAT SHE SERVED AS A GS-1152-9, PRODUCTION
CONTROLLER (AIRCRAFT) FOR THE PERIOD DECEMBER 11, 1971 TO FEBRUARY 28,
1973. THESE STATEMENTS REFER TO ATTACHED LISTS OF DUTIES. HER AGENCY
DISALLOWED HER CLAIM ON THE BASIS THAT IT CONSIDERED FULL PERFORMANCE OF
THE GS-9 DUTIES BY A CLERK TO BE IMPOSSIBLE IN THIS SITUATION. IT ALSO
STATED THAT CLASSIFICATION ANALYSIS OF THE DUTIES COVERED BY THE
ATTACHMENTS TO THE SF-172'S RESULTED IN ALLOCATION AS PRODUCTION
CONTROLLER, GS-1152-5.
MR. PYLES, WHO WAS A GS-462-9, FORESTRY TECHNICIAN, CLAIMS TO HAVE
BEEN DETAILED TO A GS-460-11 FORESTER POSITION DURING THE PERIODS JULY
12, 1971 TO OCTOBER 20, 1972, AND MAY 27, 1973 TO NOVEMBER 18, 1974, AND
TO A GS-462-11, SUPERVISORY FORESTRY TECHNICIAN POSITION FROM NOVEMBER
18, 1974, THE DATE THAT POSITION WAS CLASSIFIED, TO APRIL 27, 1975. THE
PERIOD OF HIS CLAIM PRIOR TO NOVEMBER 30, 1971 IS BARRED FROM
CONSIDERATION FOR PAYMENT BY 31 U.S.C. 71A. MR. PYLES HAS BEEN GRANTED
A RETROACTIVE TEMPORARY PROMOTION BY HIS AGENCY, TO THE GS-462-11
POSITION FROM MARCH 17, 1975, THE 121ST DAY AFTER THE POSITION WAS
CLASSIFIED, TO APRIL 27, 1975, THE DATE HIS DETAIL ENDED. HIS AGENCY
STATES THAT HE DOES NOT MEET THE QUALIFICATION REQUIREMENTS FOR THE
GS-460 JOB SERIES.
MS. RICE WAS DETAILED FROM HER GS-322-2, CLERK-TYPIST POSITION TO A
GS-990-5 CLAIMS EXAMINER (TYPING) POSITION FROM OCTOBER 25, 1974 TO
MARCH 25, 1975. HER AGENCY STATES THAT THE DETAIL POSITION WAS A MIXED
SERIES JOB, COMBINING THE GS-990 GENERAL CLAIMS EXAMINING SERIES AND THE
GS-963 LEGAL INSTRUMENTS EXAMINING SERIES. THE AGENCY QUESTIONS THE
PROPRIETY OF RECONSTITUTING THE DETAIL POSITION TO THE GS-3 GRADE LEVEL
BECAUSE IT BELIEVES THAT A POSITION AT THAT LEVEL COULD NOT BE PROPERLY
CLASSIFIED AS BELONGING TO EITHER JOB SERIES.
MS. SCOOPMIRE WAS ASSIGNED AND PERFORMED THE DUTIES OF DIRECTOR,
COMMUNITY HEALTH SERVICES FROM DECEMBER 6, 1976 TO AUGUST 13, 1977 AND
FROM JANUARY 4, 1978 TO JUNE 7, 1978. THE POSITION HAD BEEN CLASSIFIED
AS GS-601-13, COMMUNITY HEALTH SERVICES ADMINISTRATOR UNTIL DECEMBER 3,
1976, WHEN THE INCUMBENT OF THE POSITION RETIRED. ON THAT DATE THE
PREVIOUS POSITION DESCRIPTION WAS REPLACED BY ONE CLASSIFIED AS
GS-602-15, MEDICAL OFFICER (ADMINISTRATOR). MS. SCOOPMIRE DOES NOT
HAVE A DEGREE IN MEDICINE AND THEREFORE DOES NOT MEET THE QUALIFICATIONS
REQUIREMENTS FOR THE MEDICAL OFFICER POSITION.
B-189690, FEBRUARY 16, 1978, AS MODIFIED BY B-190174, APRIL 21, 1978,
PROVIDES INSTRUCTIONS CONCERNING RETROACTIVE TEMPORARY PROMOTIONS IN
INSTANCES WHERE EMPLOYEES HAVE BEEN DETAILED TO POSITIONS MORE THAN ONE
GRADE ABOVE THE GRADE OF THEIR APPOINTED POSITIONS, BUT THESE DECISIONS
CONSIDERED DETAILS TO POSITIONS IN THE SAME JOB SERIES AS THE EMPLOYEES'
APPOINTED POSITIONS. SEE ALSO B-191768, OCTOBER 2, 1978, AND
B-189367-O.M., NOVEMBER 28, 1978. IT WAS HELD IN B-189690, FEBRUARY 16,
1978, THAT "AN EMPLOYEE, WHO IS DETAILED TWO OR MORE GRADES ABOVE HIS
REGULAR GRADE, IS ENTITLED TO A RETROACTIVE TEMPORARY PROMOTION TO THE
HIGHEST GRADE TO WHICH HE COULD HAVE BEEN PROMOTED UNDER THE WHITTEN
AMENDMENT AND OTHER APPLICABLE REQUIREMENTS." HOWEVER, NONE OF THE CITED
DECISIONS HAS CONSIDERED WHAT POSITION THE EMPLOYEE SHOULD BE PROMOTED
TO OR WHAT PERSONNEL ACTION(S) ARE NECESSARY TO EFFECT THE PROMOTION.
ADDITIONAL INSTRUCTIONS FOR THE SETTLEMENT OF CLAIMS BASED ON
OVERLONG DETAILS ARE CONTAINED IN CSC BULLETIN NO. 300-40, WHICH STATES
AT PARAGRAPH 8C:
"WHEN AN EMPLOYEE IS DETAILED TO WORK OUTSIDE HIS OR HER REGULAR
POSITION, HE OR SHE DOES NOT HAVE TO MEET PLACEMENT REQUIREMENTS FOR
THAT POSITION. WHEN THE EMPLOYEE IS PROMOTED, WHETHER TEMPORARILY, OR
PERMANENTLY, STATUTORY AND COMMISSION REQUIREMENTS WHICH GOVERN
PROMOTIONS ARE TO BE APPLIED."
SINCE THE REQUIREMENTS FOR PLACEMENT IN THE POSITION TO WHICH
PROMOTED MUST BE APPLIED, IT IS NECESSARY TO DETERMINE NOT ONLY THE
GRADE LEVEL TO WHICH THE INDIVIDUAL IS TO BE PROMOTED, AS WAS THE CASE
IN THE CITED DECISIONS, BUT ALSO THE JOB SERIES OF THAT POSITION.
IF THE POSITION TO WHICH THE DETAILED EMPLOYEE IS TO BE RETROACTIVELY
PROMOTED IS IN THE SAME JOB SERIES AS THE POSITION TO WHICH DETAILED, IT
WOULD SEEM THAT SUCH ACTIONS COULD GENERALLY BE PROCESSED BY PREPARING A
STATEMENT OF DIFFERENCES "RECONSTITUTING" THE DETAIL POSITION AT A LOWER
GRADE (FILLING THE POSITION AT A GRADE LEVEL BELOW THE LEVEL WHICH THE
POSITION WAS CLASSIFIED AT THE TIME OF THE DETAIL). THIS, HOWEVER,
CREATES AN ADDITIONAL PROBLEM IN CERTAIN INSTANCES, AS THE DEPARTMENT OF
THE ARMY POINTS OUT IN THE MATTER OF MS. RICE. SINCE THE EMPLOYING
AGENCY IS RESPONSIBLE FOR THE PROPER CLASSIFICATION OF ITS POSITIONS AND
HAS JURISDICTION IN CLASSIFICATION MATTERS (WHICH THIS OFFICE DOES NOT
HAVE), IT REMAINS QUESTIONABLE FOR AGENCY CONTENDS? WE NOTE THAT MS.
RICE MIGHT BE ELIGIBLE FOR PROMOTION THIS OFFICE TO DIRECT THE AGENCY TO
RECONSTITUTE A POSITION IN SUCH A WAY THAT THE POSITION WOULD NOT BE
PROPERLY CLASSIFIED. WOULD SUCH A SITUATION PROHIBIT THE RETROACTIVE
PROMOTION OF THE EMPLOYEE AS THE TO GS-4 IN ACCORDANCE WITH THE GUIDANCE
FOUND AT PARAGRAPH S6-2C(1) OF CHAPTER 300 OF THE FEDERAL PERSONNEL
MANUAL.
IF, ON THE OTHER HAND, THE POSITION TO WHICH THE DETAILED EMPLOYEE IS
TO BE RETROACTIVELY PROMOTED IS IN THE SAME JOB SERIES AS THE EMPLOYEE'S
REGULAR POSITION, OTHER PROBLEMS WOULD ARISE. IN THE INSTANCES OF MR.
WILLIAMS AND MR. PYLES, THE EMPLOYEES WERE IN TECHNICAL POSITIONS AND
DID NOT MEET THE EDUCATIONAL REQUIREMENTS FOR PROMOTION TO ANY POSITION
IN THE DETAIL JOB SERIES; THEREFORE, PROMOTING THEM IN THEIR REGULAR
JOB SERIES WOULD CONSTITUTE DIFFERENT TREATMENT THAN HAS BEEN GIVEN TO
EMPLOYEES WHO WERE DETAILED TO POSITIONS IN DIFFERENT JOB SERIES THAT
WERE ONLY ONE GRADE ABOVE THE GRADE OF THE REGULAR POSITIONS AND WHOSE
CLAIMS HAVE BEEN DISALLOWED ON THE BASIS THAT THEY DID NOT MEET THE
EDUCATIONAL REQUIREMENTS FOR PROMOTION TO THE POSITIONS TO WHICH THEY
WERE DETAILED. ADDITIONALLY, MR. PYLE'S CLAIM PRESENTS THE PROBLEM THAT
THERE WAS NO POSITION, IN HIS APPOINTED JOB SERIES AND IN HIS
ORGANIZATIONAL UNIT TO WHICH HE COULD HAVE BEEN PROMOTED, UNTIL
APPROXIMATELY SIX MONTHS AFTER HIS SECOND DETAIL BEGAN. THEREFORE IT IS
DOUBTFUL THAT HE COULD BE RETROACTIVELY PROMOTED TO A POSITION IN EITHER
JOB SERIES AT AN EARLIER DATE THAN THE ONE ON WHICH HIS AGENCY HAS
ALREADY MADE HIS RETROACTIVE PROMOTION EFFECTIVE.
IN ADDITION TO THE QUESTIONS OF WHAT JOB SERIES THESE PROMOTIONS, IF
APPROPRIATE, ARE TO BE MADE TO, AND BY WHAT MECHANISM THEY SHOULD BE
MADE, THE MATTER OF MS. SCOOPMIRE RAISES THE QUESTION OF WHAT IS
CONSIDERED NECESSARY TO ESTABLISH A POSITION. WHILE IT APPEARS THAT THE
CIVIL SERVICE COMMISSION DID NOT ISSUE GENERAL GUIDELINES CONCERNING THE
ACTIONS NECESSARY TO ESTABLISH A POSITION, WHEN DEALING WITH THE NORMAL
LINE OF PROMOTION FOR THE PURPOSE OF MAKING TWO GRADE PROMOTIONS, IT DID
STATE, AT CHAPTER 300 OF THE FEDERAL PERSONNEL MANUAL, S6-2E(1)(B):
"WHETHER A POSITION EXISTS IS SOMETIMES A QUESTION IN THESE CASES.
FOR THIS REASON AGENCY INSTRUCTIONS SHOULD SPECIFY THE ACTION NECESSARY
TO ESTABLISH AND TO ELIMINATE A POSITION. IF AN AGENCY'S INSTRUCTIONS
DO NOT SPECIFY THE ACTION NECESSARY TO ESTABLISH A POSITION, THE
COMMISSION WILL CONSIDER THAT THE APPROVAL BY THE APPROPRIATE OFFICER OF
A REQUEST FOR ESTABLISHMENT OF THE POSITION (GENERALLY ON SF-52), WILL
CONSTITUTE EVIDENCE THAT THE POSITION HAS BEEN CREATED."
INFORMAL CONTACT WITH THE DEPUTY PERSONNEL OFFICER OF THE HEALTH
SERVICES ADMINISTRATION INDICATES THAT NEITHER THE PUBLIC HEALTH SERVICE
NOR THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE HAS WRITTEN
REGULATIONS FOR DETERMINING WHEN A POSITION MAY BE CONSIDERED
ESTABLISHED. HOWEVER, FOR THE PURPOSE OF SETTLEMENTS UNDER THE
TURNER-CALDWELL LINE OF DECISIONS, THEY HAVE BEEN USING THE DATE THAT A
POSITION WAS CLASSIFIED AS THE DATE IT WAS ESTABLISHED. THEREFORE WE
REQUEST INSTRUCTION CONCERNING WHETHER OR NOT THE ESTABLISHMENT OF A
POSITION REQUIRES THE PROCESSING OF AN ADDITIONAL ACTION, BEYOND THE
CLASSIFICATION OF A POSITION DESCRIPTION, FOR THE PURPOSE OF GRANTING
RELIEF UNDER THE TURNER-CALDWELL LINE OF DECISIONS, WHERE THE AGENCY
INVOLVED DOES NOT HAVE REGULATIONS GOVERNING THIS POINT. IT SHOULD BE
NOTED THAT THE REQUIREMENTS FOR ESTABLISHING A POSITION IN CASES WHERE
AN AGENCY DOES HAVE WRITTEN REGULATIONS IS THE TOPIC OF A SEPARATE
REFERRAL IN THE MATTER OF RICHARD H. TAYLOR AND JIMMIE R. BROWN (CLAIM
NUMBERS Z-2714314 & Z-2809199).
MS. MARLOWE'S CLAIM ALSO INVOLVES MORE THAN THE MERE MECHANICS OF HOW
A PROMOTION COULD BE PROCESSED. ALTHOUGH SHE HAS SUBMITTED
CERTIFICATION SIGNED BY HER SUPERVISORS THAT SHE PERFORMED GS-1152-9
WORK, THE CLASSIFICATION UNIT IN HER AGENCY CONTENDS THAT IT WOULD HAVE
BEEN IMPOSSIBLE FOR HER TO HAVE PERFORMED DUTIES AT THAT LEVEL AND THAT
THE DUTIES SHE PERFORMED WOULD BE PROPERLY CLASSIFIED AS GS-1152-5. DUE
TO THE DIFFERENCES IN THE STATEMENTS OF HER SUPERVISORS AND HER
PERSONNEL OFFICE, MS. MARLOWE'S ENTITLEMENT TO PROMOTION REMAINS
UNCERTAIN.
BECAUSE OF THE DOUBTFUL ISSUES INVOLVED, WE REFER THESE CLAIMS FOR
YOUR CONSIDERATION AND ADVICE.
INDORSEMENT
EVEN THOUGH AN EMPLOYEE MAY HAVE SATISFACTORILY PERFORMED THE DUTIES
OF A POSITION TO WHICH HE WAS DETAILED, HE MAY NOT RECEIVE A RETROACTIVE
TEMPORARY PROMOTION TO THAT POSITION BECAUSE OF IMPROPER DETAIL IF HE
DOES NOT HAVE THE REQUISITE EDUCATIONAL, PROFESSIONAL, OR EXPERIENCE
REQUIREMENTS FOR THAT POSITION. SEE EVELYN M. TAYLOR, B-195296, JANUARY
9, 1980; HERBERT T. FENTON, B-194896, DECEMBER 11, 1979; PATRICK L.
PETERS, B-189663, NOVEMBER 23, 1977; CHARLES E. REARDON, JR., B-194694,
NOVEMBER 23, 1979; AND MARK A. SCHAAF, B-195648, DECEMBER 13, 1979. AN
EMPLOYEE PLACED ON AN IMPROPER DETAIL MAY, HOWEVER, RECEIVE A PROMOTION
TO AN INTERVENING GRADE LEVEL BELOW THE GRADE LEVEL OF THE POSITION TO
WHICH HE WAS DETAILED IF HE MEETS THE NECESSARY QUALIFICATION
REQUIREMENTS OF THE INTERVENING POSITION. FRIEDMAN, BAKER, AND HOLMES,
B-189690, FEBRUARY 16, 1978; MARY LEE GROOVER, B-190174, APRIL 21,
1978; ROBERT RANN, B-191768, OCTOBER 2, 1978; AND MARIE L. LEBER,
B-194258, DECEMBER 27, 1979. IMPLICIT IN THESE ABOVE DECISIONS,
HOWEVER, IS THAT THE INTERVENING GRADE MUST BE IN THE SAME POSITION
SERIES AS THE POSITION TO WHICH THE EMPLOYEE WAS DETAILED.
CLASSIFICATION PRINCIPLES WOULD REQUIRE THAT AN EMPLOYEE WHO IS PROMOTED
TO AN INTERVENING GRADE LEVEL BECAUSE HE DOES NOT MEET ALL THE
REQUIREMENTS OF THE HIGHER GRADE TO WHICH HE WAS DETAILED, MUST BE
PROMOTED WITHIN THE SAME POSITION SERIES AS THE POSITION TO WHICH HE WAS
DETAILED. TO DO OTHERWISE WOULD BE TO CREATE A POSITION TOTALLY
UNRELATED TO THAT IN WHICH THE EMPLOYEE PERFORMED.
HOWEVER, FOR THE LIMITED PURPOSE OF PROVIDING TURNER-CALDWELL (55
COMP. GEN. 539 (1975)) RELIEF FOR IMPROPER DETAILS TO ESTABLISHED AND
CLASSIFIED HIGHER-LEVEL POSITIONS, THERE NEED NOT BE AN ESTABLISHED AND
CLASSIFIED POSITION AT THE INTERVENING LEVEL TO WHICH THE EMPLOYEE IS TO
BE PROMOTED. SEE FRIEDMAN, BAKER, AND HOLMES AND RANN ABOVE. IN RANN,
ALTHOUGH IT IS NOT EVIDENT FROM THE DECISION, THE SUBMISSION SHOWED
THERE WAS NO CLASSIFIED POSITION AT THE INTERVENING LEVEL FOR THE PERIOD
OF IMPROPER DETAIL. ACCORDINGLY, WHERE THERE IS NO ESTABLISHED AND
CLASSIFIED POSITION AT THE INTERVENING LEVEL IN THE RELEVANT POSITION
SERIES FOR WHICH AN EMPLOYEE IS OTHERWISE QUALIFIED, THE AGENCY
RESPONSIBLE FOR THE IMPROPER DETAIL MUST RECONSTITUTE THE POSITION TO
WHICH THE EMPLOYEE WAS DETAILED AT THAT INTERVENING LEVEL. THIS RESULT
IS NOT TO BE TAKEN AS A MODIFICATION OF THE GENERAL RULE THAT POSITIONS
MAY NOT BE RETROACTIVELY CLASSIFIED SINCE THE AGENCY SHOULD HAVE
RECONSTITUTED THE POSITION AT THE TIME OF DETAIL AND ITS PRESENT
CORRECTION OF THE RECORD MERELY REFLECTS WHAT IT SHOULD HAVE DONE AT THE
TIME OF DETAIL. SEE FRIEDMAN, BAKER, AND HOLMES, ABOVE.
SINCE MS. FORD ACKNOWLEDGES THAT SHE DID NOT MEET THE EDUCATION
AND/OR EXPERIENCE REQUIREMENTS IN THE CIVIL SERVICE COMMISSION'S (CSC)
STANDARDS FOR A GS-1410-7 MEDICAL LIBRARIAN POSITION, SHE IS NOT
ENTITLED TO A RETROACTIVE TEMPORARY PROMOTION TO THAT POSITION. SEE
TAYLOR AND FENTON ABOVE. WE NOTE, HOWEVER, THAT THERE IS A LIBRARIAN
TRAINEE, GS-5, POSITION IN THE SAME SERIES, 1410, AS THE MEDICAL
LIBRARIAN, GS-7, POSITION TO WHICH MS. FORD WAS DETAILED. THE RECORD
DOES NOT SHOW CONCLUSIVELY WHETHER MS. FORD ALSO LACKED THE
QUALIFICATIONS FOR THIS POSITION. THEREFORE, THE ARMY SHOULD BE
REQUESTED TO DETERMINE WHETHER MS. FORD MET THE CSC QUALIFICATIONS FOR A
GS-5 LIBRARIAN TRAINEE POSITION REGARDLESS OF WHETHER SUCH POSITION WAS
IN FACT IN EXISTENCE. IF SHE DID, SHE MAY RECEIVE A RETROACTIVE
TEMPORARY PROMOTION TO THAT POSITION FOR THE APPLICABLE PERIOD. IF THE
GS-5 LIBRARIAN TRAINEE POSITION DID NOT EXIST AT THE TIME, THE GS-7
MEDICAL LIBRARIAN POSITION SHOULD BE RECONSTITUTED DOWNWARDS TO THE GS-5
TRAINEE POSITION UNDER THE AUTHORITY GIVEN ABOVE.
SINCE THE ARMY REPORTS THAT MR. WILLIAMS DID NOT MEET THE EDUCATIONAL
OR PROFESSIONAL REQUIREMENTS FOR AN ELECTRONIC ENGINEER, HE MAY NOT BE
PROMOTED TO ANY GRADE LEVEL IN THIS POSITION SERIES AND HE, THEREFORE,
IS NOT ENTITLED TO A RETROACTIVE TEMPORARY PROMOTION AND HIS CLAIM
SHOULD BE DISALLOWED. SEE PETERS AND REARDON ABOVE.
IN MS. MARLOWE'S CASE WE HAVE BEEN INFORMED BY THE DEPARTMENT OF THE
AIR FORCE THAT THERE WAS INDEED A GS-1152-9, PRODUCTION CONTROLLER
POSITION ESTABLISHED AT THE TIME OF HER DETAIL BUT MS. MARLOWE DID NOT
HAVE THE QUALIFICATIONS FOR THAT POSITION. THE AIR FORCE ALSO SAYS A
GS-1152-05 POSITION DID NOT EXIST AT THE TIME OF MS. MARLOWE'S DETAIL
BUT MS. MARLOWE DID HAVE THE NECESSARY QUALIFICATIONS FOR SUCH A
GS-1152-05 POSITION HAD IT EXISTED. SINCE THERE NEED NOT BE AN
ESTABLISHED AND CLASSIFIED POSITION AT THE INTERVENING LEVEL TO WHICH
THE EMPLOYEE IS TO BE PROMOTED, MS. MARLOWE IS ENTITLED TO A RETROACTIVE
TEMPORARY PROMOTION TO THE GS-1152-05 POSITION. FRIEDMAN, BAKER, AND
HOLMES AND RANN ABOVE. HER CLAIM SHOULD BE ALLOWED FROM APRIL 9, 1972,
TO FEBRUARY 28, 1973, IF OTHERWISE PROPER.
THE RECORD SHOWS THAT MR. PYLES LACKS THE QUALIFICATIONS TO BE
PROMOTED TO A GS-460-11, FORESTER POSITION, AND THERE IS NOTHING TO
INDICATE THAT THERE WAS AN INTERVENING GRADE IN THAT SERIES FOR WHICH
MR. PYLES COULD QUALIFY. THEREFORE, HE IS NOT ENTITLED TO A RETROACTIVE
TEMPORARY PROMOTION AND HIS CLAIM SHOULD BE DISALLOWED. SEE PETERS AND
REARDON ABOVE.
WITH REGARD TO MS. RICE'S CLAIM, SINCE THE WHITTEN RESTRICTION ONLY
PROHIBITS HER FROM BEING PROMOTED MORE THAN TWO GRADE LEVELS, SHE IS
ELIGIBLE FOR A GS-4 POSITION. SEE 5 C.F.R. SEC. 300.602(C). SINCE THE
ARMY INDICATES THE GS-5 POSITION TO WHICH SHE WAS DETAILED MAY BE
RECONSTITUTED AT THE GS-4 LEVEL, SHE IS ENTITLED TO A RETROACTIVE
TEMPORARY PROMOTION TO THAT LEVEL. HER CLAIM IS FOR ALLOWANCE TO THE
EXTENT STATED HEREIN IF OTHERWISE PROPER.
FINALLY, MS. SCOOPMIRE'S CLAIM IS SIMILAR TO THAT MADE IN SCHAAF,
ABOVE, IN WHICH WE HELD THAT THE REQUIREMENT THAT THE EMPLOYEE HAVE A
MEDICAL DEGREE, WHICH HE LACKED, DISQUALIFIED HIM FROM RECEIVING A
RETROACTIVE TEMPORARY PROMOTION TO A HIGHER-LEVEL POSITION TO WHICH HE
HAD BEEN DETAILED. SINCE MS. SCOOPMIRE IS NOT A MEDICAL DOCTOR SHE IS
NOT ENTITLED TO A RETROACTIVE TEMPORARY PROMOTION TO THE GS-602-15,
MEDICAL OFFICER POSITION OR TO ANY OTHER GRADE LEVEL IN THAT SERIES.
THEREFORE, HER CLAIM IS FOR DISALLOWANCE.
B-193799, JUL 13, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
AN ARMY RESERVE OFFICER ON INDEFINITE ACTIVE DUTY ASSIGNED TO THE
SELECTIVE SERVICE SYSTEM WHO IS VOLUNTARILY RELIEVED FROM ACTIVE DUTY IN
THE ARMY AND IMMEDIATELY THEREAFTER IS VOLUNTARILY RECALLED TO ACTIVE
DUTY IN THE SAME GRADE IN THE ARMY RESERVE AND ASSIGNED TO THE ARMY
NATIONAL GUARD WITHOUT ANY BREAK IN SERVICE IS NOT ENTITLED TO PAYMENT
FOR ACCRUED LEAVE OR TRAVEL ALLOWANCES.
LIEUTENANT COLONEL RAYMOND J. BOHN:
THE ISSUE PRESENTED HERE UPON A REQUEST FOR AN ADVANCE DECISION FROM
THE FINANCE AND ACCOUNTING OFFICER AT FORT CARSON, COLORADO, IS WHETHER
AN ARMY RESERVE OFFICER ON INDEFINITE ACTIVE DUTY WHO IS RELIEVED FROM
ACTIVE DUTY VOLUNTARILY AND IS IMMEDIATELY THEREAFTER VOLUNTARILY
RECALLED TO ACTIVE DUTY AS AN ARMY RESERVE OFFICER IS ENTITLED TO BE
PAID ACCRUED ANNUAL LEAVE PURSUANT TO 37 U.S.C. 501 (1976) AND TRAVEL
ALLOWANCES IN THE CIRCUMSTANCES DESCRIBED. THE ANSWER ON PAYMENT OF
BOTH ACCRUED ANNUAL LEAVE AND TRAVEL ALLOWANCES IS NO. LIEUTENANT
COLONEL RAYMOND J. BOHN, 000-00-3964, WAS ORDERED TO ACTIVE DUTY FOR AN
INDEFINITE PERIOD AS AN ARMY RESERVE OFFICER AND ASSIGNED TO THE STATE
HEADQUARTERS OF THE SELECTIVE SERVICE SYSTEM IN BISMARCK, NORTH DAKOTA,
EFFECTIVE FEBRUARY 14, 1963. HE WAS VOLUNTARILY RELIEVED FROM ACTIVE
DUTY ON AUGUST 15, 1975, PURSUANT TO SECTION XX, CHAPTER 3, ARMY
REGULATION (AR) 635-100, AT WHICH TIME HE WAS PAID $4,376.04 FOR 60
DAYS' ACCRUED LEAVE AND $67.25 TRAVEL ALLOWANCES. ORDERS WERE ISSUED
DATED AUGUST 13, 1975, 2 DAYS PRIOR TO HIS RELEASE FROM ACTIVE DUTY,
RECALLING HIM TO ACTIVE DUTY EFFECTIVE AUGUST 16, 1975, ASSIGNING HIM TO
THE ARMY NATIONAL GUARD BUREAU WITH DUTY STATION IN BISMARCK, NORTH
DAKOTA. A DETERMINATION WAS LATER MADE BY THE FINANCE AND ACCOUNTING
OFFICER AT FORT CARSON, COLORADO, THAT COLONEL BOHN WAS ERRONEOUSLY PAID
FOR THE 60 DAYS' ACCRUED LEAVE AND THE TRAVEL ALLOWANCE. COLLECTION
ACTION WAS INITIATED IN MARCH 1976 AND COMPLETED MARCH 1977.
IN REQUESTING AN ADVANCE DECISION, THE FINANCE OFFICER HAS CITED OUR
DECISION OF 31 COMP. GEN. 668 (1952) AS POSSIBLE AUTHORITY FOR PAYMENT
OF THE ACCRUED LEAVE. THE CHIEF, FIELD SERVICE OFFICER OF THE ARMY
FINANCE AND ACCOUNTING CENTER, HAS CITED RULE 2, TABLE 4-4-2, DEPARTMENT
OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL (DODPM), AND
OUR DECISION 31 COMP. GEN. 387 (1952) AS THE AUTHORITY FOR DENYING
PAYMENT OF ACCRUED LEAVE TO COLONEL BOHN AND PARAGRAPH M4157-2, JOINT
TRAVEL REGULATIONS, VOLUME 1 (1 JTR) AS THE AUTHORITY FOR DENYING THE
TRAVEL ALLOWANCE.
UNDER THE PROVISIONS OF 37 U.S.C. 404(A)(3) A MEMBER OF THE UNIFORMED
SERVICES IS ENTITLED TO TRAVEL AND TRANSPORTATION ALLOWANCES UPON
SEPARATION FROM THE SERVICE OR RELEASE FROM ACTIVE DUTY. IMPLEMENTING
REGULATIONS ARE FOUND IN 1 JTR. PARAGRAPH M4157-2 PROVIDES THAT A
MEMBER WHO IS SEPARATED FROM THE SERVICE OR RELIEVED FROM ACTIVE DUTY
FOR THE EXPRESS PURPOSE OF CONTINUING ON ACTIVE DUTY IN THE SAME OR
ANOTHER STATUS IS NOT ENTITLED TO TRAVEL ALLOWANCES IN CONNECTION
THEREWITH. ALSO, COMPARE 42 COMP. GEN. 35 (1962). THEREFORE, THE
PAYMENT OF TRAVEL ALLOWANCES TO COLONEL BOHN IN THE CIRCUMSTANCES OF HIS
VOLUNTARY RELEASE FROM ACTIVE DUTY AND IMMEDIATE VOLUNTARY RECALL TO
ACTIVE DUTY ON ORDERS ISSUED 2 DAYS BEFORE HIS RELEASE FROM ACTIVE DUTY
WAS IN ERROR AND COLLECTION OF THE ERRONEOUS PAYMENT WAS PROPER.
THE STATUTORY AUTHORITY FOR LUMP-SUM PAYMENTS OF ACCRUED LEAVE IS 37
U.S.C. 501(B). IT PROVIDES IN PART THAT AN OFFICER WHO HAD ACCRUED
LEAVE TO HIS CREDIT AT THE TIME OF HIS DISCHARGE IS ENTITLED TO BE PAID
FOR THAT LEAVE; HOWEVER, SUCH PAYMENT MAY NOT BE MADE TO A MEMBER WHO
IS DISCHARGED FOR THE PURPOSE OF ACCEPTING AN APPOINTMENT IN HIS ARMED
FORCE IN WHICH CASE THE MEMBER CARRIES HIS ACCRUED LEAVE FROM ONE STATUS
TO THE OTHER IN HIS ARMED FORCE. SUBSECTION 501(A)(1)(B) OF TITLE 37
(1970) (NOW 37 U.S.C. 501(A)(2)) DEFINED THE TERM "DISCHARGE" AS USED IN
SUBSECTION 501(B) TO MEAN, IN THE CASE OF AN OFFICER, "SEPARATION OR
RELEASE FROM ACTIVE DUTY UNDER HONORABLE CONDITIONS."
PARAGRAPH 40401, DODPM, IMPLEMENTING 37 U.S.C. 501(B), PROVIDES THAT
A MEMBER WHO IS DISCHARGED UNDER HONORABLE CONDITIONS IS ENTITLED TO
PAYMENT FOR UNUSED ACCRUED LEAVE UNLESS HE CONTINUES ON ACTIVE DUTY
UNDER CONDITIONS WHICH REQUIRE ACCRUED LEAVE TO BE CARRIED FORWARD.
RULES 4 AND 5, TABLE 4-4-2 OF THAT MANUAL PROVIDE THE TWO CONDITIONS IN
WHICH RESERVE OFFICERS MAY BE PAID ACCRUED LEAVE ON RELEASE FROM ACTIVE
DUTY AND IMMEDIATELY REENTER ON ACTIVE DUTY. RULE 4 PROVIDES THAT
ACCRUED LEAVE IS PAYABLE TO A RESERVE OFFICER RELEASED FROM ACTIVE DUTY
UNDER HONORABLE CONDITIONS UNDER 10 U.S.C. 681 OR SIMILAR LAWS
AUTHORIZING RELEASE OF RESERVE OFFICERS AT CONVENIENCE OF THE
GOVERNMENT, NOT FOR THE PURPOSE OF REENTERING ACTIVE DUTY, AND WHO
IMMEDIATELY REENTERS ON ACTIVE DUTY. RULE 5 PROVIDES THAT ACCRUED LEAVE
IS PAYABLE TO A RESERVE OFFICER RELEASED FROM ACTIVE DUTY AT THE END OF
A SPECIFIED PERIOD OF TIME HE AGREED TO SERVE OR WAS OBLIGATED TO SERVE
AND WHO IMMEDIATELY REENTERS ON ACTIVE DUTY.
COLONEL BOHN'S CASE DOES NOT APPEAR TO FALL WITHIN EITHER OF THE
PROVISIONS OF RULE 4 OR 5 SINCE HE WAS NOT RELEASED FROM ACTIVE DUTY AT
THE EXPIRATION OF AN ACTIVE DUTY AGREEMENT AND, HE VOLUNTARILY APPLIED
FOR RELEASE FROM ACTIVE DUTY PURSUANT TO AR 635-100 AND VOLUNTARILY
RETURNED TO ACTIVE DUTY TO SERVE IN ANOTHER CAPACITY.
OUR DECISION 31 COMP. GEN. 668, TO WHICH THE FINANCE OFFICER REFERS
AS POSSIBLE AUTHORITY FOR PAYING COLONEL BOHN FOR HIS LEAVE, INVOLVED AN
ENLISTED MEMBER WHO WAS DISCHARGED TO ACCEPT A COMMISSION IN THE ARMY
AND WHO UPON BEING INVOLUNTARILY RELEASED FROM ACTIVE DUTY AS A
COMMISSIONED OFFICER, REENLISTED IN HIS PRIOR ENLISTED GRADE. IT WAS
HELD THAT HE WAS ENTITLED TO A LUMP-SUM PAYMENT FOR ACCRUED LEAVE SINCE
HIS INVOLUNTARY RELEASE FROM ACTIVE DUTY AS A COMMISSIONED OFFICER DID
NOT CONSTITUTE A DISCHARGE FOR THE PURPOSE OF ENTERING INTO AN
ENLISTMENT. THE TYPE OF RELEASE REFERRED TO IN THAT DECISION WOULD FALL
UNDER RULE 4 OF DODPM, TABLE 4-4-2, WHICH, AS IS NOTED ABOVE, DIFFERS
FROM COLONEL BOHN'S SITUATION.
INSTEAD, COLONEL BOHN'S SERVICE APPEARS TO HAVE BEEN OF THE TYPE
WHICH WE HAVE HELD DOES NOT ENTITLE A MEMBER TO PAYMENT FOR LEAVE. FOR
EXAMPLE, 35 COMP. GEN. 25 (1955) INVOLVED AN OFFICER WHO, WHILE SERVING
ON ACTIVE DUTY AS A RESERVE LIEUTENANT COLONEL IN THE ARMY, ACCEPTED AN
APPOINTMENT AS A REGULAR WARRANT OFFICER AND ABOUT 2 MONTHS LATER WAS
RELEASED FROM ACTIVE DUTY AS A LIEUTENANT COLONEL AND EFFECTIVE THE NEXT
DAY REVERTED TO HIS REGULAR WARRANT OFFICER GRADE ON ACTIVE DUTY. IN
THAT DECISION WE HELD THAT THE SERVICE WAS CONTINUOUS AND THE OFFICER
WAS NOT ENTITLED TO PAYMENT FOR ACCRUED LEAVE UPON HIS RELEASE FROM
ACTIVE DUTY AS A LIEUTENANT COLONEL. SEE ALSO B-176858, DECEMBER 12,
1973.
SIMILARLY, IN 31 COMP. GEN. 387, SUPRA, WE HELD THAT A REGULAR NAVY
OFFICER SERVING ON ACTIVE DUTY WHOSE COMMISSION WAS TERMINATED AND WHO
ON THE DAY FOLLOWING THE TERMINATION ACCEPTED A COMMISSION IN THE NAVAL
RESERVE AND CONTINUED ON ACTIVE DUTY WITHOUT A BREAK IN SERVICE WAS NOT
ENTITLED TO PAYMENT FOR ACCRUED LEAVE INCIDENT TO THE CHANGE IN STATUS.
SINCE COLONEL BOHN'S CALL TO ACTIVE DUTY ON JANUARY 31, 1963, WAS FOR
AN INDEFINITE PERIOD, HIS RELEASE ON AUGUST 15, 1975, FROM ACTIVE DUTY
WAS NOT A RELEASE AT THE EXPIRATION OF AN AGREED TERM OF SERVICE AS A
RESERVE OFFICER; NEITHER WAS HIS RELEASE AN INVOLUNTARY SEPARATION. IT
THEREFORE MUST BE DETERMINED THAT SUCH SERVICE WAS CONTINUOUS.
ACCORDINGLY, ON THE RECORD BEFORE US, IT IS OUR VIEW THAT HE WAS NOT
SEPARATED OR RELEASED FROM ACTIVE DUTY WITHIN THE MEANING OF 37 U.S.C.
501(A) AND (B) AND, THEREFORE, HE IS NOT ENTITLED TO PAYMENT FOR UNUSED
ACCRUED LEAVE. DODPM, TABLE 4-4-2, RULE 2. OF COURSE HE WAS ENTITLED
TO CARRY HIS ACCRUED LEAVE FORWARD WITH HIM IN HIS NEW ASSIGNMENT UNDER
THE AUGUST 13, 1975 ORDERS.
SINCE PAYMENT IS NOT AUTHORIZED, THE VOUCHER SUBMITTED IS BEING
RETAINED IN OUR OFFICE.
B-194842, JUL 13, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. FACT THAT INDIVIDUALS PARTICIPATED IN DRAFTING PROPOSAL AND MAY
BE POTENTIAL STAFF OF UNSUCCESSFUL OFFEROR IS INSUFFICIENT REASON TO
REGARD INDIVIDUALS AS "INTERESTED PARTY" UNDER BID PROTEST PROCEDURES.
2. WHERE MATTER WILL NOT BE CONSIDERED AS BID PROTEST, REQUEST FOR
CONFERENCE IS DENIED.
ELVIRA F. WILLIAMS, IRVING C. WILLIAMS, M.D., AND Y. B. B. BYAMUAGU
MUSHALA:
ELVIRA F. WILLIAMS, IRVING C. WILLIAMS, M.D., AND Y. B. B. BYAMUAGU
MUSHALA PROTEST THE AWARD OF A CONTRACT (NO. 79-042-1017) PURSUANT TO
REQUEST FOR PROPOSALS (RFP) NO. 79-12, ISSUED BY ACTION. THE RFP SOUGHT
PROPOSALS FOR THE STATESIDE TRAINING OF 25 PEACE CORPS VOLUNTEERS FOR
TANZANIA IN LANGUAGE, CROSS CULTURE AND HEALTH PROGRAMS.
THE GROUNDS FOR PROTEST ARE ESSENTIALLY THAT THE CONTRACT WAS
"WIRED," WHICH SUGGESTS FRAUD, THE UNEQUAL TREATMENT OF THE PROPOSERS,
AND ACTION'S REFUSAL TO ALLOW CLARIFICATION OF THE PROPOSAL IN WHICH THE
INDIVIDUALS WERE INVOLVED BY SUBMISSION OF MODIFICATIONS. THE
INDIVIDUALS HAVE REQUESTED A CONFERENCE ON THIS MATTER.
ACTION HAS ADVISED THAT:
"THE INDIVIDUALS *** DID NOT SUBMIT A PROPOSAL, ALTHOUGH THEY WERE
LISTED AS POTENTIAL STAFF IN THE PROPOSAL OF ONE OF THE UNSUCCESSFUL
OFFERORS."
BECAUSE OF THIS, IT IS ACTION'S POSITION THAT THE INDIVIDUALS ARE NOT
AN "INTERESTED PARTY" PURSUANT TO OUR BID PROTEST PROCEDURES
(PROCEDURES), 4 C.F.R. PART 20 (1979).
IN RESPONSE TO ACTION'S STATEMENTS, THE INDIVIDUALS STATE:
1. "WE ARE DEFINITELY AN 'INTERESTED' GROUP AND NOT 'SIMPLY'
POTENTIAL STAFF OF AN OFFEROR, AS ACTION/PEACE CORPS IS WELL AWARE. WE
CAME TOGETHER AS CONCERNED INDIVIDUALS TO DEVELOP AN EFFECTIVE AND
MEANINGFUL TRAINING PROGRAM FOR PEACE CORPS VOLUNTEERS GOING TO
TANZANIA. WE HAVE EXTENSIVE EXPERIENCE NOT ONLY IN TRAINING, BUT ALSO
IN AFRICAN AFFAIRS IN GENERAL, AND TANZANIAN AFFAIRS, SPECIFICALLY."
2. "WE ARE THE PRINCIPAL PROPONENTS OF THE NATIONAL COUNCIL OF NEGRO
WOMEN'S (NCNW) PROPOSAL RESPONDING TO RFP 79-12. WE INITIATED THE IDEA,
PLANNED THE PROGRAM, WROTE THE PROPOSAL, RECRUITED STAFF, AND IDENTIFIED
THE SIGHT, AMONG OTHER THINGS. IN FACT, IT WAS EARLY IN THE PROCESS
THAT THE PROJECT DIRECTOR CONTACTED ACTION/PEACE CORPS FOR ADVICE AND
ASSISTANCE. SHE WAS ADVISED TO SEEK AN ORGANIZATION TO SERVE AS 'GRANT
MANAGER,' SINCE WE HAD NO TRACT RECORD IN PEACE CORPS. NCNW WAS
APPROACHED IN THE FALL OF 1978 AND THAT ORGANIZATION VERY GRATEFULLY
ACCEPTED TO BE OUR 'GRANT MANAGER.'"
OUR PROCEDURES REQUIRE THAT A PARTY BE "INTERESTED" IN ORDER THAT ITS
PROTEST MAY BE CONSIDERED. 4 C.F.R. SEC. 20.1(A) (1979). IN
DETERMINING WHETHER A PROTESTER SATISFIES THE INTERESTED PARTY
CRITERION, CONSIDERATION IS GIVEN TO THE NATURE OF THE ISSUES RAISED AND
THE DIRECT OR INDIRECT BENEFIT OR RELIEF SOUGHT BY THE PROTESTER. ABC
MANAGEMENT SERVICES, INC., 55 COMP. GEN. 397 (1975), 75-2 CPD 245;
KENNETH R. BLAND, CONSULTANT, B-184852, OCTOBER 17, 1975, 75-2 CPD 242.
WE HAVE CONSIDERED AS TOO TENUOUS TO CONSTITUTE INTEREST THE MERE
EXPECTATION OF EMPLOYMENT OR OF SELECTION AS A SUBCONTRACTOR. THE
REASON FOR OUR DECLINING TO CONSIDER PROTESTS FILED BY PROSPECTIVE OR
ACTUAL EMPLOYEES OR SUBCONTRACTORS OF DISAPPOINTED OFFERORS IS THAT
THESE ARE NOT SUFFICIENTLY AFFECTED BY THE PROCUREMENT, PARTICULARLY
WHERE THE OFFEROR HAS NOT PROTESTED OR JOINED IN THE PROTEST.
ELEC-TROL, INC., 55 COMP. GEN. 730 (1977), 77-1 CPD 441; JOHN S.
CONNOLLY, PH.D, B-188832, B-188846, MAY 23, 1977, 77-1 CPD 359, AFF'D.
B-188832, B-188846, JULY 26, 1977, 77-2 CPD 52. IN THE LATTER CASE, A
POTENTIAL EMPLOYEE WHO WAS ONE OF THE WRITERS OF AN UNSUCCESSFUL
PROPOSAL WAS FOUND NOT TO BE AN "INTERESTED PARTY."
OUR REVIEW OF THE NCNW TECHNICAL PROPOSAL AND BUDGET DISCLOSES THAT
WHILE THE INDIVIDUALS HERE WOULD HAVE BEEN IN LEADERSHIP ROLES DURING
CONTRACT PERFORMANCE, THE NCNW IS THE REAL PARTY IN INTEREST. FOR
EXAMPLE, THE DIRECTOR, INTERNATIONAL DIVISION, NCNW, IS DESIGNATED THE
"PROJECT SUPERVISOR" WHO "WILL CONSULT, ADVISE AND SUPERVISE THE OVERALL
OPERATION OF THE PROGRAM, ***." ALSO, THE TECHNICAL PROPOSAL STATES THAT
THE NCNW, AS WELL AS THE INDIVIDUALS INVOLVED HERE, "MADE A MAJOR
INVESTMENT OF TIME AND RESOURCES IN PREPARING THE ACCOMPANYING PROPOSAL
***."
WE NOTE THAT THE NATIONAL COUNCIL OF NEGRO WOMEN HAS NEITHER
PROTESTED, NOR ADVISED OUR OFFICE THAT THE INDIVIDUALS REPRESENT THE
PROPOSER. IN VIEW OF THIS, WE CONCLUDE THAT THE DEVELOPMENT AND
CONSIDERATION OF THIS MATTER AS A BID PROTEST WOULD SERVE NO USEFUL
PURPOSE.
ACCORDINGLY, THE PROTEST IS DISMISSED.
SINCE THIS MATTER WILL NOT BE CONSIDERED AS A BID PROTEST, THE
REQUEST FOR A CONFERENCE IS DENIED. SEE AAI CORPORATION, B-192346,
NOVEMBER 3, 1978, 78-2 CPD 320.
B-195077, JUL 13, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST REGARDING NEGOTIATION DATE, FILED MORE THAN 10 DAYS AFTER
DATE WAS "UNILATERALLY IMPOSED" BY PROCURING AGENCY, IS UNTIMELY.
2. PROTEST ALLEGING THAT, DURING NEGOTIATIONS, PROCURING AGENCY
PLACED "INORDINATE RELIANCE" ON RESPONSES OF ONE INDIVIDUAL IS SUMMARILY
DENIED BECAUSE INDIVIDUAL IN QUESTION WAS AUTHORIZED TO NEGOTIATE FOR
OFFEROR AND, AT TIME OF EVALUATION, WAS PROPOSED PROJECT DIRECTOR.
THE LOUISIANA CENTER FOR THE PUBLIC INTEREST:
THE LOUISIANA CENTER FOR THE PUBLIC INTEREST (LCPI) PROTESTS THE
CANCELLATION OF A REQUEST FOR PROPOSALS FOR BI-REGIONAL ADVOCACY SERVICE
BY THE ADMINISTRATION ON AGING, DEPARTMENT OF HEALTH, EDUCATION, AND
WELFARE (HEW). AFTER NEGOTIATING WITH LCPI ON THE BASIS OF A
CONDITIONALLY ACCEPTABLE PROPOSAL, WHICH IT DETERMINED COULD NOT BE MADE
ACCEPTABLE, HEW CANCELED THE SOLICITATION, NO. 105-79-3007, BECAUSE NO
OTHER TECHNICALLY ACCEPTABLE PROPOSALS HAD BEEN SUBMITTED.
LCPI STATES THAT IT RECEIVED NOTICE OF THE CANCELLATION ON MAY 7,
1979; IT IMMEDIATELY INQUIRED ABOUT PROCEDURES FOR APPEALING HEW'S
DECISION TO CANCEL AND REQUESTED COPIES OF EVALUATION DOCUMENTS,
RECEIVING SOME ON MAY 22, 1979, AND THE REMAINDER ON MAY 31, 1979.
LCPI ALSO PROTESTS THE MANNER IN WHICH NEGOTIATIONS WERE CONDUCTED.
SPECIFICALLY, LCPI STATES THAT DISCUSSIONS WERE HELD ON MARCH 21, 1979,
A DATE WHEN ITS ATTORNEY COULD NOT ATTEND. THUS, LCPI ARGUES, IT WAS
DENIED THE "RIGHT TO BE REPRESENTED BY COUNSEL."
FOR THE FOLLOWING REASONS, WE ARE DISMISSING THE PROTEST IN PART AND
SUMMARILY DENYING THE REST.
THE PROTEST REGARDING THE DATE OF NEGOTIATIONS IS UNTIMELY. OUR
PROCEDURES REQUIRE THAT PROTESTS BE FILED - DEFINED AS RECEIVED - IN
THIS OFFICE WITHIN 10 DAYS AFTER THE BASIS FOR THEM IS KNOWN OR SHOULD
HAVE BEEN KNOWN, WHICHEVER IS EARLIER. 4 C.F.R. SEC. 20.2(B)(2)
(1979). LCPI DID NOT FILE ITS PROTEST UNTIL JUNE 5, 1979, MORE THAN 10
DAYS AFTER THE NEGOTIATION DATE WAS "UNILATERALLY IMPOSED" BY HEW. WE
NOTE, HOWEVER, THAT THERE IS NO RIGHT TO COUNSEL IN NEGOTIATION OF
GOVERNMENT CONTRACTS, AND THAT LCPI REJECTED TWO EARLIER DATES SUGGESTED
BY HEW.
LCPI FURTHER ALLEGES THAT, DURING NEGOTIATIONS, HEW PLACED
"INORDINATE RELIANCE" ON THE RESPONSES OF ITS EXECUTIVE DIRECTOR, THE
PROPOSED PROJECT DIRECTOR, AND EITHER EXCLUDED OR MISINTERPRETED REMARKS
BY THE PRESIDENT OF THE BOARD. LCPI STATES THAT THE EXECUTIVE DIRECTOR
RESIGNED ON MAY 3, 1979; IT THEREFORE URGES THAT THE SOLICITATION BE
REINSTATED AND NEGOTIATIONS BE REOPENED, SO THAT LCPI WILL BE ABLE TO
"CLARIFY AND CORRECT" ERRONEOUS ASSUMPTIONS MADE BY HEW.
ALTHOUGH WE CONSIDER THIS OBJECTION TIMELY (BECAUSE HEW'S OPINION OF
THE PROJECT DIRECTOR MAY NOT HAVE BEEN APPARENT UNTIL LCPI RECEIVED THE
EVALUATION DOCUMENTS), WE DO NOT BELIEVE THE ORGANIZATION HAS STATED A
VALID GROUND FOR PROTEST. IN ITS PROPOSAL, LCPI LISTED THE EXECUTIVE
DIRECTOR, AS WELL AS THE PRESIDENT OF THE BOARD, AS AUTHORIZED TO
NEGOTIATE. HEW CAN HARDLY BE FAULTED FOR NEGOTIATING WITH AN AUTHORIZED
SPOKESMAN OR FOR EVALUATING HIS ABILITY TO DIRECT A PROJECT WHEN, AT THE
TIME OF EVALUATION, HE WAS PROPOSED FOR THAT POSITION. HEW CANCELED THE
SOLICITATION ON APRIL 26, 1979, BEFORE THE INDIVIDUAL IN QUESTION
RESIGNED.
WE FIND LCPI'S PROTEST IS UNTIMELY IN PART AND WITHOUT LEGAL MERIT
OTHERWISE. SEE MURPHY ANDERSON VISUAL CONCEPTS, INC., B-191850, JUNE
15, 1978, 78-1 CPD 438. WE THEREFORE ARE DISMISSING IT IN PART AND
SUMMARILY DENYING THE REST WITHOUT BENEFIT OF A FULL REPORT FROM HEW.
ID., RECONSIDERATION, JULY 31, 1978, 78-2 CPD 79.
B-195258, JUL 13, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE HIGH BID WAS 5-1/4 TIMES SECOND HIGH BID, WHICH WAS CLOSELY
ALIGNED WITH NEXT HIGHEST BIDS, AND WHERE HIGH BID EXCEEDED ITEM'S
ACQUISITION PRICE BY 183 PERCENT, CONTRACTING OFFICER WAS ON
CONSTRUCTIVE NOTICE OF POSSIBLE MISTAKE AND SHOULD HAVE SOUGHT
VERIFICATION. IN THESE CIRCUMSTANCES, BIDDER WHO MISTAKENLY BID ON SALE
ITEM MAY HAVE CONTRACT RESCINDED.
HANAGRIFFS MACHINE SHOP, INC.:
THE DEFENSE LOGISTICS AGENCY HAS REQUESTED THE RESCISSION OF THE
CONTRACT AWARDED TO HANAGRIFFS MACHINE SHOP, INC. (HANAGRIFFS) UNDER
SALE NO. 31-9086 ISSUED BY THE DEFENSE PROPERTY DISPOSAL SERVICE,
MEMPHIS, TENNESSEE.
HANAGRIFFS SUBMITTED THE HIGH BID OF $13,752 FOR SALE ITEM 124 AND
AWARD WAS SUBSEQUENTLY MADE TO IT. UPON RECEIPT OF NOTICE OF AWARD,
HANAGRIFFS ALLEGED THAT IT INTENDED TO BID ON ITEM 123 RATHER THAN ITEM
124.
THE DEFENSE LOGISTICS AGENCY RECOMMENDS THAT THE CONTRACT BE
RESCINDED SINCE THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF
POSSIBLE ERROR IN BID AND SHOULD HAVE REQUESTED VERIFICATION PRIOR TO
AWARD. WE AGREE.
THE GENERAL PRINCIPLE APPLICABLE TO THIS CASE IS THAT A PURCHASER'S
UNILATERAL MISTAKE IN BID WILL NOT EXCUSE IT FROM A CONTRACT
SUBSEQUENTLY AWARDED UNLESS THE CONTRACTING OFFICER KNEW OR SHOULD HAVE
KNOWN OF THE MISTAKE. CORBIN ON CONTRACTS SEC. 610; WENDER PRESSES,
INC. V. UNITED STATES, 343 F.2D 961 (CT. CL. 1965); SALIGMAN V. UNITED
STATES, 56 F. SUPP. 505 (E.D. PENN. 1944); J.B.L. CONSTRUCTION CO.,
INC., B-191011, APRIL 18, 1978, 78-1 CPD 301. THERE IS NO EVIDENCE IN
THE PRESENT RECORD TO INDICATE THAT THE CONTRACTING OFFICER HAD ACTUAL
KNOWLEDGE OF ERROR. AS TO WHEN THE CONTRACTING OFFICER SHOULD BE
CHARGED WITH CONSTRUCTIVE NOTICE OF ERROR, THE TEST IS ONE OF
REASONABLENESS; WHETHER UNDER THE FACTS OF THE CASE THERE WERE ANY
FACTORS WHICH SHOULD HAVE RAISED THE POSSIBILITY OF ERROR IN THE MIND OF
THE CONTRACTING OFFICER. SEE MORTON SALT COMPANY - ERROR IN BID,
B-188392, APRIL 19, 1977, 77-1 CPD 273. THE POSSIBILITY OF ERROR MUST
BE SUFFICIENT TO REASONABLY REQUIRE THE CONTRACTING OFFICIAL TO MAKE AN
INQUIRY WHICH WOULD LEAD TO THE REQUISITE KNOWLEDGE. SEE WENDER
PRESSES, INC. V. UNITED STATES, SUPRA.
IN THE INSTANT CASE, HANAGRIFF'S BID OF $13,752 WAS 5.29 TIMES HIGHER
THAN THE NEXT HIGHEST BID OF $2,600. THE THIRD, FOURTH AND FIFTH
HIGHEST BIDS WERE $1,586, $1,550 AND $1,414, RESPECTIVELY. A GROUPING
OF BIDS BELOW A DISPROPORTIONATELY HIGH BID MAY SUGGEST THAT A MISTAKE
HAS BEEN MADE. GEORGE CONDODEMETRAKY, B-188105, MARCH 10, 1977, 77-1
CPD 182. HERE, THE CLOSE ALIGNMENT OF THE SECOND THROUGH FIFTH HIGHEST
BIDS EXAGGERATED THE DISPARITY BETWEEN THE TWO HIGHEST BIDS. WHEN ADDED
TO THE FACT THAT HANAGRIFF'S BID EXCEEDED THE ACQUISITION PRICE OF THE
ITEM BY 183 PERCENT, WE BELIEVE THAT THE CONTRACTING OFFICER WAS ON
NOTICE OF A POSSIBLE MISTAKE AND SHOULD HAVE REQUESTED VERIFICATION.
AIR AND POWER TOOLS COMPANY/A AND P INDUSTRIAL RENTALS, B-182996,
FEBRUARY 4, 1975, 75-1 CPD 81.
ACCORDINGLY, SALES CONTRACT NO. 31-9086-224 MAY BE RESCINDED AS
ADMINISTRATIVELY RECOMMENDED.
B-192958, JUL 12, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. BID THAT DOES NOT REDUCE, LIMIT, OR MODIFY REQUIREMENT THAT
PROSPECTIVE CONTRACTOR PROVIDE TAPES AND TRANSCRIPTS OF NEWS BROADCASTS
IN FOUR METROPOLITAN AREAS IS RESPONSIVE TO IFB.
2. ALLEGATION BASED ON EVIDENCE DISCOVERED AFTER BID OPENING BUT
PRIOR TO AWARD THAT PROSPECTIVE CONTRACTOR DOES NOT INTEND TO PERFORM IN
THE MANNER INDICATED IN ITS BID IS A MATTER THAT BEARS ON BIDDER
RESPONSIBILITY, NOT BID RESPONSIVENESS.
3. PROVISION REQUIRING PROSPECTIVE CONTRACTOR TO FURNISH "ACCEPTABLE
EVIDENCE" OF A COMMITMENT OR EXPLICIT ARRANGEMENT BETWEEN IT AND
SUBCONTRACTOR IN EVENT IT INTENDS TO USE SUBCONTRACTOR TO PERFORM WORK
CALLED FOR IN IFB RELATES TO MATTER OF BIDDER RESPONSIBILITY AND GENERAL
ACCOUNTING OFFICE WILL NOT REVIEW AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY EXCEPT UNDER CIRCUMSTANCES NOT APPLICABLE HERE.
4. ALLEGATION THAT AWARDEE HAS NEGLECTED ITS CONTRACTUAL DUTIES IS
MATTER OF CONTRACT ADMINISTRATION NOT FOR RESOLUTION UNDER GAO BID
PROTEST PROCEDURES.
5. PROTEST ASSERTING CONTRACT SHOULD BE CANCELED BECAUSE AWARDEE'S
BID CONTAINED MISREPRESENTATIONS OF FACT IS DENIED BECAUSE RECORD
INDICATES CONTRACTING OFFICER DID NOT RELY ON REPRESENTATIONS WHEN
MAKING CONTRACT AWARD.
RADIO TV REPORTS, INC.:
RADIO TV REPORTS, INC. (RADIO TV) PROTESTS THE AWARD OF A
REQUIREMENTS CONTRACT TO J. R. BIRMINGHAM COMPANY (BIRMINGHAM) BY THE
DEPARTMENT OF THE ARMY, DEFENSE SUPPLY SERVICE, UNDER INVITATION FOR
BIDS (IFB) MDA903-78-B-0128 FOR THE MONITORING OF RADIO AND TELEVISION
BROADCASTS EMANATING FROM THE GREATER WASHINGTON, D.C., NEW YORK,
CHICAGO, AND LOS ANGELES AREAS DURING THE PERIOD OCTOBER 1, 1978 THROUGH
SEPTEMBER 30, 1979. THE PROTESTER, THE SECOND LOW BIDDER AND INCUMBENT
CONTRACTOR, PRESENTS FOUR GROUNDS OF PROTEST: (1) BIRMINGHAM'S BID WAS
NONRESPONSIVE TO THE SOLICITATION, (2) BIRMINGHAM WAS NOT RESPONSIBLE;
(3) BIRMINGHAM HAS CONSPICUOUSLY AND CONTINUOUSLY NEGLECTED ITS
CONTRACTUAL OBLIGATIONS; AND (4) BIRMINGHAM'S BID CONTAINED
MISREPRESENTATIONS OF FACT SIGNIFICANT ENOUGH TO WARRANT CONTRACT
TERMINATION.
THE MATERIAL FACTS ARE NOT IN DISPUTE. THE IFB CALLED FOR FURNISHING
AUDIO RECORDINGS ON MAGNETIC TAPE AND TYPEWRITTEN TRANSCRIPTS OF
TELEVISION AND RADIO NEWS BROADCASTS EMANATING FROM THE FOUR
METROPOLITAN AREAS. THE SOLICITATION INDICATED THAT THE ARMY
ANTICIPATED AWARDING AN INDEFINITE QUANTITY REQUIREMENTS-TYPE CONTRACT
WITH WASHINGTON, D.C., BEING THE PRINCIPAL PLACE OF PERFORMANCE. THE
ARMY REQUIRED THAT THE SUCCESSFUL CONTRACTOR RECORD DAILY BROADCASTS OF
10 WASHINGTON RADIO STATIONS AND 7 TELEVISION STATIONS BETWEEN THE HOURS
OF 7 A.M. THROUGH 12 MIDNIGHT. THE ARMY FURTHER ESTIMATED THAT THE
CONTRACTOR WOULD BE REQUIRED TO FURNISH 24 AUDIO TAPE RECORDINGS OF
BROADCASTS IN THE CHICAGO AND NEW YORK AREAS, 450 TYPEWRITTEN
TRANSCRIPTS OF CHICAGO AND NEW YORK AUDIO RECORDINGS, AND COURIER
SERVICES FOR THEIR DELIVERY. THE ARMY REQUIRED DELIVERY OF THESE TAPES
IN WASHINGTON WITHIN 3 DAYS UNDER NORMAL CIRCUMSTANCES BUT WITHIN 2
HOURS UNDER URGENT CIRCUMSTANCES.
THE IFB REQUIRED EACH BIDDER TO FURNISH THE NECESSARY FACILITIES AS
MAY BE REQUIRED TO PERFORM THE SPECIFIED MONITORING, RECORDING, AND
TRANSCRIBING AND TO IDENTIFY THOSE FACILITIES BY LISTING THE ADDRESSES
OF FACILITIES IT INTENDED TO USE THAT WERE OWNED AND OPERATED BY THE
BIDDER OR HIS SUBCONTRACTORS. FURTHER, THE IFB CONTAINED THE FOLLOWING
INSTRUCTION:
"BY SUBMISSION OF THIS PROPOSAL, THE OFFEROR IS CERTIFYING THAT HE
HAS SUFFICIENTLY TRAINED PERSONNEL TO PERFORM THE WORK REQUIRED. IN
ADDITION TO THE MINIMUM STANDARDS FOR RESPONSIBLE CONTRACTORS, THE
FOLLOWING ADDITIONAL STANDARDS WILL APPLY: TO THE EXTENT THAT A
PROSPECTIVE CONTRACTOR PROPOSES TO PERFORM THE CONTRACT BY
SUBCONTRACTING ACCEPTABLE EVIDENCE OF HIS 'ABILITY TO OBTAIN' EXPERIENCE
AND PERTINENT SKILLS SHALL BE A COMMITMENT OR EXPLICIT ARRANGEMENT WHICH
MUST BE IN EXISTENCE PRIOR TO BEING AWARDED A CONTRACT UNDER THIS
SOLICITATION."
RADIO TV AND BIRMINGHAM EACH SUBMITTED BIDS IN RESPONSE TO THE IFB
AND THE LATTER WAS EVALUATED LOW BIDDER. IN ITS BID, BIRMINGHAM
PROMISED TO PERFORM ALL THE WORK REQUIRED AND FURTHER INDICATED THAT IT
INTENDED TO USE ITS OWNED AND OPERATED FACILITIES IN THE FOUR
METROPOLITAN AREAS FOR CONTRACT PERFORMANCE. HOWEVER, PRIOR TO AWARD,
THE ARMY LEARNED THAT BIRMINGHAM DID NOT OWN MONITORING, RECORDING, AND
TRANSCRIBING FACILITIES IN CHICAGO AND NEW YORK. WHEN QUESTIONED ABOUT
THIS, BIRMINGHAM PROVIDED THE ARMY'S PREAWARD SURVEY TEAM ADDRESSES IN
THE TWO CITIES, AND EXPLAINED IT HAD REPRESENTATIVES AT THOSE LOCATIONS
WHO COULD EASILY OBTAIN THE REQUISITE TAPES AND TRANSCRIPTS FROM THE
BROADCASTING STATIONS. ON THE BASIS OF THIS INFORMATION AND THE
KNOWLEDGE THAT THE PROSPECTIVE CONTRACTOR WOULD ONLY BE REQUIRED TO
FURNISH AN ESTIMATED 24 TAPE RECORDINGS FROM THE CHICAGO AND NEW YORK
AREAS OVER THE TERM OF THE CONTRACT, THE CONTRACTING OFFICER AWARDED
BIRMINGHAM THE CONTRACT ON SEPTEMBER 15, 1978. SUBSEQUENT TO AWARD, THE
ARMY LEARNED THAT BIRMINGHAM IN FACT HAD NO FACILITIES AT THE CHICAGO
AND NEW YORK ADDRESSES BIRMINGHAM PROVIDED.
WITH RESPECT TO THE FIRST ALLEGATION CONCERNING THE RESPONSIVENESS OF
BIRMINGHAM'S BID, THE PROTESTER ADMITS THAT BIRMINGHAM SUBMITTED A BID
THAT WAS FACIALLY RESPONSIVE TO THE TERMS AND CONDITIONS OF THE IFB. BY
THIS WE MEAN THE BID, AS SUBMITTED, DID NOT REDUCE, LIMIT, OR MODIFY THE
WORK REQUIREMENTS SET OUT IN THE SOLICITATION BUT, RATHER, WAS AN OFFER
TO PERFORM, WITHOUT EXCEPTION, THE EXACT THINGS CALLED FOR IN THE IFB.
UPON ACCEPTANCE BY THE ARMY, BIRMINGHAM WAS BOUND TO PERFORM IN
ACCORDANCE WITH THE IFB'S TERMS AND CONDITIONS. M-S AND ASSOCIATES,
B-183282, MAY 14, 1975, 75-1 CPD 296; CONTRA COSTA ELECTRIC, INC.,
B-190916, APRIL 5, 1978, 78-1 CPD 268.
RADIO TV CONTENDS, HOWEVER, THAT THE CONTRACT SHOULD BE TERMINATED
BECAUSE THE ARMY AWARDED THE CONTRACT KNOWING THAT BIRMINGHAM HAD NO
FACILITIES IN EITHER CHICAGO OR NEW YORK. IN SUPPORT OF ITS POSITION,
THE PROTESTER SUBMITS THAT THE FACTS IN THIS CASE ARE SUFFICIENTLY
SIMILAR TO THOSE IN B-159560, OCTOBER 7, 1966, WHERE WE RECOMMENDED A
CONTRACT BE CANCELED, TO WARRANT A SIMILAR RESULT. IN THAT CASE, THE
NAVY AWARDED A CONTRACT FOLLOWING ADVERTISEMENT FOR TRASH REMOVAL
SERVICES TO A COMPANY KNOWING THAT THE CONTRACTOR PLANNED TO USE A TRASH
COLLECTION METHOD WHICH DEVIATED FROM THE SPECIFICATIONS. WE DETERMINED
THAT ALTHOUGH THE CONTRACTOR'S BID APPEARED VALID ON ITS FACE,
CONTRACTING OFFICIALS, BY MAKING THE AWARD, IN EFFECT IMPROPERLY AGREED
TO WAIVE THE SPECIFICATIONS REQUIREMENTS FOR THE BENEFIT OF ONE BIDDER.
WE DO NOT BELIEVE THE PRESENT CASE IS SUFFICIENTLY ANALOGOUS TO
B-159560, SUPRA, TO WARRANT A SIMILAR RESULT, BECAUSE IN OUR VIEW, THERE
WAS NO GOVERNMENT WAIVER OF A SUBSTANTIVE CONTRACT PROVISION FOR THE
BENEFIT OF BIRMINGHAM. FOR EXAMPLE, THE IFB PROVISION QUOTED ABOVE
WHICH THE PROTESTER RELIES UPON FOR THE MOST PART AS HIS BASIS FOR
PROTEST DOES NOT REQUIRE THE CONTRACTOR TO PERFORM THE DESIRED SERVICES
EITHER THROUGH THE USE OF ITS OWN PERSONNEL OR BY SUBCONTRACT. IF, AS
BIRMINGHAM ALLEGES, THE MATERIALS CAN BE OBTAINED DIRECTLY FROM THE
BROADCASTERS WHO PRESUMABLY MAKE THE RECORDINGS FOR THEIR OWN PURPOSES,
WE BELIEVE NO SUBCONTRACTS ARE INVOLVED AND THE CLAUSE REQUIRING
EVIDENCE OF "A COMMITMENT OR SPECIFIC ARRANGEMENT" IS NOT CALLED INTO
PLAY.
WITH REGARD TO BIRMINGHAM'S RESPONSIBILITY, RADIO TV ASSERTS THAT
BIRMINGHAM IS NOT A RESPONSIBLE BIDDER AND DISPUTES BIRMINGHAM'S ABILITY
TO OBTAIN THE MATERIALS FROM THE NEW YORK OR CHICAGO BROADCASTERS. WE
HAVE TAKEN THE POSITION THAT WE WILL NOT REVIEW A CONTRACTING OFFICER'S
AFFIRMATIVE DETERMINATION OF RESPONSIBILITY IN THE ABSENCE OF AN
ALLEGATION OF FRAUD ON THE PART OF PROCURING OFFICIALS OR THE
SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY
HAVE NOT BEEN APPLIED. DATA TEST CORPORATION, 54 COMP. GEN. 499 (1974),
74-2 CPD 365; YARDNEY ELECTRONICS CORPORATION, 54 COMP. GEN. 509
(1974), 74-2 CPD 376. THIS POLICY WAS ADOPTED BY OUR OFFICE BECAUSE,
NORMALLY, RESPONSIBILITY DETERMINATIONS ARE BASED IN LARGE MEASURE ON
THE GENERAL BUSINESS JUDGMENT OF THE CONTRACTING OFFICER AND, BEING
SUBJECTIVE, ARE NOT READILY SUSCEPTIBLE TO REASONED REVIEW. CENTRAL
METAL PRODUCTS, INCORPORATED, 54 COMP. GEN. 66 (1974), 74-2 CPD 64.
THERE HAS BEEN NO ALLEGATIONS OF FRAUD AND IN OUR VIEW THERE ARE NO
DEFINITIVE RESPONSIBILITY CRITERIA CONTAINED IN THE SOLICITATION. THUS
WE FIND NO BASIS TO REVIEW THE CONTRACTING OFFICER'S AFFIRMATIVE
DETERMINATION OF RESPONSIBILITY IN THIS CASE.
THE PROTESTER'S THIRD GROUND OF PROTEST IS THAT BIRMINGHAM HAS
CONSPICUOUSLY AND CONTINUOUSLY NEGLECTED ITS CONTRACTUAL OBLIGATIONS.
THIS IS A MATTER OF CONTRACT ADMINISTRATION THAT IS NOT FOR RESOLUTION
UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1979), WHICH ARE
RESERVED FOR CONSIDERING WHETHER AN AWARD OR PROPOSED AWARD OF A
CONTRACT COMPLIES WITH APPLICABLE STATUTORY, REGULATORY, AND OTHER LEGAL
REQUIREMENTS. NICOLET TECHNOLOGY CORP., B-192895, SEPTEMBER 28, 1978,
78-2 CPD 244. ACCORDINGLY, WE WILL NOT CONSIDER THIS GROUND OF PROTEST
ON ITS MERITS.
RADIO TV'S LAST GROUND OF PROTEST IS THAT BIRMINGHAM'S CONTRACT
SHOULD BE CANCELED BECAUSE ITS BID CONTAINED MISREPRESENTATIONS OF FACT
CONCERNING THE EXISTENCE OF THE CHICAGO AND NEW YORK FACILITIES. WHILE
WE AGREE THAT THAT BIRMINGHAM MADE STATEMENTS IN ITS BID AND TO THE
PREAWARD SURVEY TEAM CONDUCTING THE RESPONSIBILITY INVESTIGATION THAT
WERE FACTUALLY INACCURATE, WE DO NOT BELIEVE, UNDER THE CIRCUMSTANCES
HERE, THAT CONTRACT CANCELLATION IS WARRANTED. THE RECORD INDICATES
THAT THE ARMY DID NOT CONSIDER BIRMINGHAM'S LACK OF MONITORING,
RECORDING, AND TRANSCRIBING FACILITIES IN CHICAGO AND NEW YORK TO BE OF
IMPORTANCE ONCE THE CONTRACTING OFFICER SATISFIED HIMSELF THAT
BIRMINGHAM HAD REPRESENTATIVES WHO COULD ADEQUATELY PERFORM THE REQUIRED
WORK. REGARDLESS OF THE REPRESENTATIONS, THEN, IT IS CLEAR THAT THE
CONTRACTING OFFICER DID NOT RELY ON THEM WHEN HE MADE THE AFFIRMATIVE
DETERMINATION THAT BIRMINGHAM WAS A RESPONSIBLE BIDDER.
THE PROTEST IS DENIED.
B-193759, JUL 12, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST THAT PROCUREMENT WAS IMPROPERLY RESTRICTED TO TWO FIRMS IS
DENIED WHERE PROCUREMENT WAS NEGOTIATED PURSUANT TO 10 U.S.C. SEC.
2304(A) (16), WHICH AUTHORIZES NEGOTIATED AWARDS TO FIRMS WHOSE
AVAILABILITY AS A MOBILIZATION BASE IS NECESSARY IN CASE OF NATIONAL
EMERGENCY AND RECORD INDICATES PROTESTER COULD NOT QUALIFY ITS PRODUCT
IN TIME TO MEET AGENCY DELIVERY REQUIREMENTS.
SAFT AMERICA, INC.:
SAFT AMERICA, INC. (SAFT) PROTESTS THE AWARD OF CONTRACTS ON A
RESTRICTED BASIS TO FOURDEE, DIVISION OF EMERSON ELECTRIC COMPANY
(FOURDEE) AND G.F. FEDON AND COMPANY (FEDON) BY U.S. ARMY REDSTONE
ARSENAL FOR 1727 TOW BATTERY ASSEMBLIES AND OPTION QUANTITIES.
THE PROTESTER CONTENDS THAT IT IS A QUALIFIED PRODUCER OF THE BATTERY
ASSEMBLY AND QUESTIONS THE ARMY'S DECISION TO RESTRICT THIS PROCUREMENT
TO FOURDEE AND FEDON IN LIGHT OF THE FIELD FAILURES EXPERIENCED WITH
THEIR PRODUCTS. IN ADDITION, THE PROTESTER BELIEVES THAT FOURDEE AND
FEDON ARE ESSENTIALLY A SINGLE COMPANY SINCE "THEY USE THE SAME
MANAGEMENT" AND OBTAIN COMPONENT CELLS FROM THE SAME SUPPLIER. SAFT,
THEREFORE, CONTESTS BOTH THE ARMY'S ASSERTION THAT ONLY TWO SOURCES
PRODUCE THE BATTERY ASSEMBLY AND THE ARMY'S BELIEF THAT IT IS
MAINTAINING TWO INDEPENDENT SOURCES THROUGH AWARDS TO FOURDEE AND FEDON.
THE PROTESTER ARGUES AN AWARD TO IT OF A PORTION OF THIS PROCUREMENT
WILL BETTER SERVE THE PURPOSE OF 10 U.S.C. SEC. 2304(A)(16) TO PROVIDE
FOR A MOBILIZATION BASE IN CASE OF A NATIONAL EMERGENCY. THE ARMY
RELIES ON THIS NEGOTIATION AUTHORITY FOR RESTRICTING THE PROCUREMENT.
UNDER 10 U.S.C. SEC. 2304(A)(16) CONTRACTS MAY BE NEGOTIATED AS AN
EXCEPTION TO THE RULES OF FORMAL ADVERTISING IN THOSE INSTANCES WHERE
THE SECRETARY (OR HIS DESIGNEE) DETERMINES THE FOLLOWING:
"*** IT IS IN THE INTEREST OF NATIONAL DEFENSE TO HAVE A PLANT, MINE,
OR OTHER FACILITY OR A PRODUCER, MANUFACTURER, OR OTHER SUPPLIER,
AVAILABLE FOR FURNISHING PROPERTY OR SERVICES IN CASE OF A NATIONAL
EMERGENCY; OR (B) THE INTEREST OF INDUSTRIAL MOBILIZATION IN CASE OF
SUCH AN EMERGENCY, OR THE INTEREST OF NATIONAL DEFENSE IN MAINTAINING
ACTIVE ENGINEERING, RESEARCH AND DEVELOPMENT WOULD OTHERWISE BE
SUBSERVED."
THE USE OF THIS NEGOTIATION AUTHORITY MUST BE SUPPORTED BY A
DETERMINATION AND FINDINGS (D&F) SIGNED BY THE SECRETARY,
UNDER-SECRETARY OR ANY ASSISTANT SECRETARY OF THE MILITARY DEPARTMENT.
DEFENSE ACQUISITION REGULATION (DAR) SECS. 3-302(VI) AND 1-201.15.
THE D&F AND A LENGTHY JUSTIFICATION STATEMENT WHICH SUPPORTS IT
INDICATE THAT FOURDEE AND FEDON HAVE BEEN THE PREVIOUS SUPPLIERS FOR THE
BATTERIES, THAT THE ARMY EXPENDED CONSIDERABLE EFFORT IN ASSISTING
FOURDEE TO ESTABLISH A PRODUCTION CAPABILITY, THAT FEDON AT THAT TIME
WAS A DIVISION OF FOURDEE BUT LATER BECAME INDEPENDENT, THAT
MOBILIZATION BASE REQUIREMENTS MANDATE THAT BOTH FIRMS MAINTAIN THEIR
PRODUCTION CAPACITY WITHOUT A BREAK, THAT THE ARMY ALSO DOES NOT HAVE AN
ADEQUATE TECHNICAL DATA PACKAGE THAT BY ITSELF COULD BE USED FOR
PRODUCTION OF ACCEPTABLE BATTERIES, THAT IT WOULD TAKE A NEW PRODUCER 18
TO 24 MONTHS TO MAKE INITIAL DELIVERY (AS OPPOSED TO THE FOUR TO FIVE
MONTH LEAD TIME EXPECTED OF FOURDEE AND FEDON), AND THAT CONSEQUENTLY NO
OTHER FIRM COULD MEET THE ARMY'S DELIVERY REQUIREMENTS.
THE PROTESTER HAS NOT PROVIDED CONVINCING EVIDENCE THAT THE ARMY'S
POSITION IS UNREASONABLE. ALTHOUGH THERE HAVE BEEN FIELD FAILURES WITH
PREVIOUSLY SUPPLIED UNITS, THE RECORD INDICATES THAT THE ARMY HAS WORKED
CLOSELY WITH FOURDEE AND FEDON TO REMEDY THE PROBLEM AND HAS MODIFIED
THE APPLICABLE SPECIFICATION ACCORDINGLY.
WE DO NOT BELIEVE THESE FAILURES THEREFORE SHOULD PRECLUDE THE ARMY
FROM CONTINUING TO REGARD FOURDEE AND FEDON AS VIABLE PRODUCERS FOR ITS
MOBILIZATION BASE. MOREOVER, AS INDICATED, FEDON, ALTHOUGH ONCE A
DIVISION OF FOURDEE, IS NOW AN INDEPENDENT COMPANY AND IN THAT
INDEPENDENT CAPACITY SUPPLIED THESE BATTERY ASSEMBLIES TO THE ARMY UNDER
A PRIOR CONTRACT.
WITH RESPECT TO SAFT'S BELIEF THAT IT IS QUALIFIED TO PRODUCE THE
BATTERY ASSEMBLIES, THE RECORD SHOWS THAT THE PROTESTER'S PRODUCTION
EXPERIENCE IS BASED ON A TECHNICAL DATA PACKAGE WHICH IT OBTAINED FROM
EMERSON ELECTRIC COMPANY IN 1975. SINCE THAT TIME, SEVERAL SIGNIFICANT
CHANGES HAVE BEEN MADE TO THE TECHNICAL DATA PACKAGE. THE ARMY REPORTS
THAT IN VIEW OF THE MAGNITUDE OF THE CHANGES IN THE TECHNICAL DATA
PACKAGE SINCE 1975, THE PROTESTER WOULD BE REQUIRED TO FURNISH A FIRST
ARTICLE SAMPLE PRODUCED TO THE REQUIREMENTS OF THE REVISED TECHNICAL
DATA PACKAGE. GOVERNMENT TESTING OF THE FIRST ARTICLE SAMPLE WOULD BE
NECESSARY BEFORE PRODUCTION OF THE ITEM COULD BEGIN. IN VIEW OF THE
TIGHT DELIVERY SCHEDULE FOR THIS ITEM, THE ARMY CONCLUDES THERE IS
INSUFFICIENT TIME FOR THIS PROCESS. ALTHOUGH SAFT ARGUES THAT IT COULD
FURNISH A FIRST ARTICLE QUICKLY AND MEET THE ARMY'S DELIVERY SCHEDULE
WITHOUT DIFFICULTY, IT HAS NOT, ON THIS RECORD, DEMONSTRATED THAT THE
ARMY'S POSITION IS INCORRECT. IN THIS REGARD, THE NEED FOR TESTING AND
THE TIME INVOLVED IN CONNECTION THEREWITH IS GENERALLY A MATTER WITHIN
THE COMPETENCE OF THE PROCURING AGENCY, AND THE AGENCY'S POSITION WILL
NOT BE DISTURBED IN THE ABSENCE OF CLEAR EVIDENCE INDICATING THE
POSITION IS UNREASONABLE. AERONAUTICAL INSTRUMENT AND RADIO COMPANY,
B-190920, OCTOBER 13, 1978, 78-2 CPD 219.
SAFT ALSO QUESTIONS THE ARMY'S WAIVER OF FIRST ARTICLE TESTING FOR
FOURDEE AND FEDON. SINCE, AS WE CONCLUDE, SAFT WAS PROPERLY EXCLUDED
FROM THIS COMPETITION, IT WAS NOT PREJUDICED BY THOSE WAIVERS. IN ANY
EVENT, WE HAVE CONSISTENTLY HELD THAT WAIVER OF FIRST ARTICLE TESTING IS
A MATTER OF ADMINISTRATIVE DISCRETION WHICH WILL NOT BE QUESTIONED
UNLESS THERE IS A CLEAR SHOWING THAT THE WAIVER WAS ARBITRARY OR
CAPRICIOUS. SEE HOMEXX INTERNATIONAL CORPORATION, B-192034, SEPTEMBER
22, 1978, 78-2 CPD 219. IN LIGHT OF THE HISTORY OF THESE BATTERY
ASSEMBLIES - THE FIELD FAILURES OF THE UNITS SUPPLIED UNDER THE PREVIOUS
SPECIFICATIONS FOLLOWED BY THE ARMY'S CLOSE WORK WITH THE TWO FIRMS AND
THE RESULTING SPECIFICATION CHANGE - WE DO NOT BELIEVE THAT THE WAIVERS
WERE ARBITRARY OR CAPRICIOUS.
THE PROTEST IS DENIED. HOWEVER, WE ARE POINTING OUT TO THE SECRETARY
OF THE ARMY THAT IN OUR VIEW THE NEGOTIATION AUTHORITY OF 10 U.S.C. SEC.
2304(A)(16) DOES NOT, AS A MATTER OF COURSE, JUSTIFY A PROCUREMENT
RESTRICTED TO ONE OR TWO FIRMS WHEN IT APPEARS THAT THE IMMEDIATE AND
MOBILIZATION-BASE REQUIREMENTS CAN BE MET BY OTHER SUPPLIERS. SEE 48
COMP. GEN. 199 (1968). IN THIS REGARD, WHILE WE BELIEVE THE ARMY
PROPERLY EXCLUDED SAFT FROM PARTICIPATING IN THIS PROCUREMENT, WE NOTE
THAT THE ARMY HAS INDICATED ITS INTEREST IN HAVING SAFT QUALIFY ITS
PRODUCT FOR FUTURE PROCUREMENTS. THIS IS CONSISTENT WITH THE STATUTORY
MANDATE FOR COMPETITION WHERE PRACTICABLE.
B-194294, JUL 12, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
BILL SUBMITTED BY EMPLOYEE FOR STORING GOVERNMENT VEHICLE IN HIS
DRIVEWAY WHILE AWAITING SALE OF VEHICLE BY GENERAL SERVICES
ADMINISTRATION MAY BE PAID ON QUANTUM MERUIT BASIS AS BENEFIT ACCEPTED
BY THE GOVERNMENT PROVIDED CERTIFYING OFFICER FINDS THAT LOCAL
ADMINISTRATOR HAD PROPER CONTRACTING AUTHORITY TO OBLIGATE GOVERNMENT TO
PAY FOR STORAGE OF VEHICLE OR, IF LOCAL ADMINISTRATOR LACKED SUCH
AUTHORITY, THAT HIS ACTION WAS RATIFIED BY A PROPER CONTRACTING
OFFICIAL.
JAMES M. ASHLEY - STORAGE FOR CHARGES OF GOVERNMENT AUTOMOBILE:
A FINANCE OFFICER, ANIMAL AND PLANT HEALTH INSPECTION SERVICE, UNITED
STATES DEPARTMENT OF AGRICULTURE, ASKS WHETHER JAMES M. ASHLEY, AN
EMPLOYEE OF THE SERVICE NOW RETIRED, MAY BE PAID $450 FOR STORING A
GOVERNMENT VEHICLE IN HIS DRIVEWAY FOR 5 MONTHS. (THE VEHICLE WAS
ACTUALLY STORED FOR 15 MONTHS, BUT MR. ASHLEY IS ONLY CLAIMING PAYMENT
FOR $450 AT $3 PER DAY, WHICH AMOUNTS TO 5 MONTHS' STORAGE.)
GOVERNMENT VEHICLE NO. V-05261 WAS ASSIGNED TO MR. ASHLEY FOR HIS
WORK AND HE WAS AUTHORIZED TO PARK THE AUTOMOBILE IN THE DRIVEWAY OF HIS
RESIDENCE IN ELKVIEW, WEST VIRGINIA. ON OCTOBER 12, 1977, MR. ASHLEY
WAS IN AN AUTOMOBILE ACCIDENT, AND HE HAD THE VEHICLE TOWED TO A REPAIR
GARAGE. BECAUSE OF EXTENSIVE DAMAGE TO THE GOVERNMENT VEHICLE AND THE
VEHICLE'S HIGH MILEAGE (82,000 MILES), AN ADMINISTRATIVE OFFICER OF THE
AGRICULTURE DEPARTMENT IN HYATTSVILLE, MARYLAND, DETERMINED THAT THE
AUTOMOBILE WAS TO BE SOLD AND NOT REPAIRED, AND ORDERED THE DAMAGED
VEHICLE TO BE TOWED FROM THE GARAGE TO MR. ASHLEY'S DRIVEWAY, TO BE HELD
THERE UNTIL ARRANGEMENTS COULD BE MADE TO SELL IT.
THE SALE WAS TO BE HANDLED BY THE GENERAL SERVICES ADMINISTRATION
(GSA), BUT THE ANIMAL AND PLANT HEALTH INSPECTION SERVICE WAS
RESPONSIBLE FOR THE AUTOMOBILE UNTIL THE SALE. WE HAVE BEEN ADVISED
THAT THE VEHICLE WAS TOWED TO MR. ASHLEY'S HOME BECAUSE NO
GOVERNMENT-OWNED SPACE WAS AVAILABLE FOR STORAGE. UNDER THE
CIRCUMSTANCES, THE PROCEDURE FOLLOWED BY THE ANIMAL AND PLANT HEALTH
INSPECTION SERVICE WAS TO STORE THE DAMAGED AUTOMOBILE ON THE PROPERTY
OF THE EMPLOYEE WHO HAD BEEN AUTHORIZED TO USE THE VEHICLE FOR WORK AND
WHO DROVE THE VEHICLE WHEN THE ACCIDENT OCCURRED.
THE GSA, CHARGED WITH RESPONSIBILITY FOR THE SALE OF THE VEHICLE,
ATTEMPTED TO SELL IT ON THREE OCCASIONS. EACH TIME THE BUYER DEFAULTED.
THE AUTOMOBILE REMAINED IN MR. ASHLEY'S DRIVEWAY FOR 15 MONTHS UNTIL
FINALLY SOLD TO MR. ASHLEY'S NEIGHBOR ON JANUARY 9, 1979. (MR. ASHLEY
RETIRED IN DECEMBER 1978.) ON JANUARY 18, 1979, MR. ASHLEY SUBMITTED A
BILL FOR $450, REPRESENTING STORAGE CHARGES FOR 5 MONTHS AT $3 PER DAY
FOR KEEPING THE VEHICLE IN HIS DRIVEWAY.
THERE IS NO EVIDENCE IN THE RECORD THAT ANY PROMISE OR AGREEMENT WAS
MADE TO MR. ASHLEY THAT HE WOULD RECEIVE MONEY FOR STORAGE OF THE
VEHICLE. ONE QUESTION SUGGESTED BY THIS RECORD IS WHETHER MR. ASHLEY
WAS PERFORMING VOLUNTARY SERVICE FOR THE GOVERNMENT IN STORING THE
AUTOMOBILE. TITLE 31 U.S.C. SEC. 665(B), STATES THAT:
"NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL ACCEPT VOLUNTARY
SERVICE FOR THE UNITED STATES OR EMPLOY PERSONAL SERVICE IN EXCESS OF
THAT AUTHORIZED BY LAW, EXCEPT IN CASES OF EMERGENCY INVOLVING THE
SAFETY OF HUMAN LIFE OR THE PROTECTION OF PROPERTY."
THIS SECTION CONSTITUTES A GENERAL PROHIBITION AGAINST THE ACCEPTANCE
OF VOLUNTARY SERVICE BY THE GOVERNMENT. THE STATUTE, HOWEVER,
CONTEMPLATES SERVICES FURNISHED ON THE INITIATIVE OF THE PARTY RENDERING
THEM, WITHOUT REQUEST FROM, OR AGREEMENT WITH, THE UNITED STATES. 7
COMP. GEN. 810 (1928).
IN THE INSTANT CASE, THE GOVERNMENT APPARENTLY DID HAVE A ROLE IN MR.
ASHLEY'S ASSUMPTION OF RESPONSIBILITY FOR THE AUTOMOBILE. THE STORAGE
WAS REQUESTED BY THE LOCAL ADMINISTRATOR AT HYATTSVILLE WHO, AS THE
RECORD INDICATES, WAS RESPONSIBLE FOR MAINTENANCE AND STORAGE OF THE
AUTOMOBILE UNTIL THE SALE BY GSA TOOK PLACE. THE SUBMISSIONS ALSO
INDICATE THAT NO GOVERNMENT PARKING WAS AVAILABLE, SO THAT IF MR. ASHLEY
DID NOT PROVIDE STORAGE SPACE, THE DEPARTMENT OF AGRICULTURE WOULD HAVE
HAD NO ALTERNATIVE BUT TO PAY FOR COMMERCIAL PARKING. UNQUESTIONABLY,
THE GOVERNMENT RECEIVED A BENEFIT BY HAVING MR. ASHLEY STORE THE
AUTOMOBILE.
THE COURTS AND OUR OFFICE HAVE RECOGNIZED THAT IN APPROPRIATE
CIRCUMSTANCES, PAYMENT MAY BE MADE FOR SERVICES RENDERED ON A QUANTUM
MERUIT BASIS (THE REASONABLE VALUE OF WORK OR LABOR). WHERE THIS RIGHT
TO PAYMENT ON A QUANTUM MERUIT BASIS IS RECOGNIZED, IT IS PREDICATED ON
THE THEORY THAT EVEN THOUGH NO FORMAL CONTRACT HAD BEEN EXECUTED, IT
WOULD BE UNJUST ENRICHMENT FOR THE GOVERNMENT TO ACCEPT THE BENEFITS
FROM ANOTHER PARTY'S LABOR WITHOUT RECOMPENSE, ASSUMING, OF COURSE, THAT
THE SERVICE RENDERED IS ONE WHICH THE GOVERNMENT HAD AUTHORITY TO
PROCURE. RECOVERY IS LIMITED "TO SUCH SUMS AS WILL REASONABLY
COMPENSATE THE PARTY." 40 COMP. GEN. 447, 451 (1961).
ACCORDINGLY, THIS CLAIM MAY BE PAID ON A QUANTUM MERUIT BASIS FOR THE
5 MONTHS REQUESTED, IF THE $3 A DAY RATE ON WHICH THE CLAIM IS BASED IS
NO MORE THAN THE USUAL OR GOING RATES FOR COMMERCIAL PARKING FACILITIES
IN THE REGION PROVIDED CERTAIN DETERMINATIONS ARE MADE. THE AGENCY MUST
DETERMINE THAT THE LOCAL ADMINISTRATOR HAD CONTRACTING AUTHORITY, AND
COULD OBLIGATE THE GOVERNMENT TO PAY FOR THE STORAGE OF THE VEHICLE OR,
IF THE LOCAL ADMINISTRATOR LACKED SUCH AUTHORITY, THAT HIS ACTION WAS
RATIFIED BY PROPER CONTRACTING OFFICIALS. UPON THIS SHOWING, THE CLAIM
FOR 5 MONTHS' STORAGE MAY BE PAID.
B-194729 L/M, JUL 12, 1979
HEADNOTES-UNAVAILABLE
OFFICE OF GENERAL COUNSEL
C. M. BONE, ACME PAINTING CO. INC.:
WE REFER TO YOUR LETTER OF JUNE 11, 1979, INQUIRING AS TO WHETHER YOU
WILL BE ALLOWED TO WORK AT ANY GOVERNMENT INSTALLATION WHILE EMPLOYED BY
ANOTHER COMPANY OR CORPORATION SINCE YOUR FIRM AND YOU, INDIVIDUALLY,
WERE PLACED ON THE DEBARRED BIDDERS LIST FOR VIOLATION OF THE
DAVIS-BACON ACT, 40 U.S. SEC. 276A (1976). YOU EXPRESS THE HOPE THAT
YOU WILL BE ABLE TO WORK FOR A FIRM IN WHICH YOU HOLD NO STOCK OR
INTEREST.
THE DAVIS-BACON ACT DEBARMENT OF YOU AND YOUR FIRM REQUIRES THAT NO
CONTRACT SHALL BE AWARDED TO YOU OR YOUR FIRM OR TO ANY FIRM,
CORPORATION, PARTNERSHIP, JOINT VENTURE OR ASSOCIATION, IN WHICH YOU OR
YOUR FIRM HAS AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF
PUBLICATION OF THE DEBARRED BIDDERS LIST CONTAINING THE NAMES OF YOU AND
YOUR FIRM.
IN LIGHT OF THE ABOVE REQUIREMENTS OF THE ACT, IT DOES NOT APPEAR
THAT THE AWARD OF A GOVERNMENT CONTRACT TO A FIRM WHICH HIRED YOU
STRICTLY AS AN EMPLOYEE AND IN WHICH YOU HAD NO STOCK, FINANCIAL OR
MANAGERIAL INTEREST WOULD BE OBJECTIONABLE.
DIGEST
IT DOES NOT APPEAR THAT AWARD OF GOVERNMENT CONTRACT TO FIRM THAT
HIRED DEBARRED CONTRACTOR STRICTLY AS EMPLOYEE WOULD BE OBJECTIONABLE
SINCE DAVIS-BACON ACT, UNDER WHICH CONTRACTOR WAS DEBARRED, ONLY
PROHIBITS AWARD OF GOVERNMENT CONTRACTS TO FIRMS IN WHICH DEBARRED
INDIVIDUAL HAS STOCK, FINANCIAL OR MANAGERIAL INTEREST.
B-194877, JUL 12, 1979
HEADNOTES-UNAVAILABLE
UNITED STATES GENERAL ACCOUNTING OFFICE
W. MICHAEL BLUMENTHAL, SECRETARY OF THE TREASURY:
THIS REPLIES TO THE REQUEST BY THE FISCAL ASSISTANT SECRETARY OF THE
DEPARTMENT OF THE TREASURY THAT RELIEF BE GRANTED UNDER 31 U.S.C. SEC.
82A-2 (1976) FOR THE ERRONEOUS PAYMENT OF $619.60, CHARGEABLE TO THE
ACCOUNT OF ROBERT PACHECO, FORMER DIRECTOR OF THE CHICAGO DISBURSING
CENTER. THE REQUEST RECITES THE REQUIRED FINDING THAT THE IMPROPER
PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF DUE CARE ON THE PART
OF MR. PACHECO. IT FURTHER STATES THAT SHOULD RELIEF BE GRANTED, THE
ERRONEOUS PAYMENT WILL BE CHARGED TO THE APPROPRIATION FOR SALARIES AND
EXPENSES, BUREAU OF GOVERNMENT FINANCIAL OPERATIONS. FOR THE REASONS
INDICATED BELOW, THE REQUESTED RELIEF IS GRANTED.
ON JANUARY 9, 1974, BASED ON A REQUEST BY THE VETERANS ADMINISTRATION
REGIONAL OFFICE IN CLEVELAND, OHIO, THE CHICAGO DISBURSING CENTER,
DEPARTMENT OF THE TREASURY, ISSUED EMERGENCY VETERANS ADMINISTRATION
EDUCATIONAL PAYMENTS TO DONALD A. LUNT AND DAVID L. MCDONALD. MR. LUNT
WAS SCHEDULED TO RECEIVE $104.40; MR. MCDONALD WAS TO RECEIVE $924.00.
HOWEVER, DURING THE PROCESSING OF THE CHECKS THE AMOUNTS WERE SWITCHED
AND A CHECK FOR $924.00 WAS ISSUED TO MR. LUNT AND A CHECK FOR $104.40
WAS ISSUED TO MR. MCDONALD. THE ERROR WAS DISCOVERED WHEN MR. MCDONALD
FILED A CLAIM OF NON-RECEIPT.
IT APPEARS FROM THE RECORD THAT A SUBORDINATE, RATHER THAN MR.
PACHECO, ACTUALLY PREPARED THE CHECKS. IT FURTHER APPEARS THAT MR.
PACHECO DID NOT PERSONALLY VERIFY THE AMOUNTS OF THE CHECKS BEFORE THEY
WERE ISSUED.
THE CHICAGO DISBURSING CENTER, ASSISTED BY THE VETERANS
ADMINISTRATION AND THE UNITED STATES SECRET SERVICE, ATTEMPTED TO
RECOVER THE OVERPAYMENT OF $819.60 FROM MR. LUNT. BETWEEN SEPTEMBER 3,
1975, AND APRIL 4, 1976, MR. LUNT REPAID $200 OF THE OVERPAYMENT,
LEAVING A BALANCE OF $619.60. MR. LUNT MADE NO ADDITIONAL PAYMENTS AND
FURTHER COLLECTION ATTEMPTS WERE UNSUCCESSFUL. A FINAL COLLECTION
LETTER SENT TO MR. LUNT ON AUGUST 17, 1978, WAS RETURNED BY THE POSTAL
SERVICE MARKED "UNDELIVERABLE." COLLECTION EFFORTS WERE THEN TERMINATED.
A DISBURSING OFFICER IS PERSONALLY LIABLE FOR DEFICIENCIES IN HIS
ACCOUNTS CAUSED BY ILLEGAL, IMPROPER, OR INCORRECT PAYMENTS. HOWEVER,
UNDER THE PROVISIONS OF 31 U.S.C. SEC. 82A-2 (1976), THIS OFFICE IS
AUTHORIZED TO GRANT RELIEF FROM LIABILITY UPON A DETERMINATION THAT THE
PAYMENT WAS "*** NOT THE RESULT OF BAD FAITH OR LACK OF DUE CARE ON THE
PART OF SUCH DISBURSING OFFICER ***." SEE GENERALLY, 54 COMP. GEN. 112
(1974).
IN APPLYING 31 U.S.C. SEC. 82A-2 TO INSTANCES IN WHICH A SUBORDINATE
ACTUALLY DISBURSES FUNDS RATHER THAN THE DISBURSING OFFICER HIMSELF, WE
HAVE GRANTED RELIEF UPON A SHOWING THAT THE DISBURSING OFFICER PROPERLY
SUPERVISED HIS SUBORDINATES BY MAINTAINING AN ADEQUATE SYSTEM OF
PROCEDURES AND CONTROLS TO AVOID ERRORS, AND TOOK STEPS TO SEE THAT THE
SYSTEM WAS EFFECTIVE AND BEING FOLLOWED. E.G., B-192109, OCTOBER 11,
1978; B-187180, SEPTEMBER 21, 1976.
THE MEMORANDUM OF FACTS ACCOMPANYING THE ASSISTANT SECRETARY'S
REQUEST STATES:
"PROCEDURES OUTLINED FOR VERICATION IN PART III, CHAPTER 2 OF THE
DIVISION OF DISBURSEMENT PROCEDURES MANUAL, HAVE PROVED TO BE EFFECTIVE
AND ALONG WITH THE PRESENCE OF TRAINED SUPERVISORS, ARE FELT TO BE
ADEQUATE FOR THE PROPER AND SECURE PROCESSING OF MISCELLANEOUS CHECKS.
THE MATTER AND THE NEED FOR CAREFUL ATTENTION TO THE VERIFICATION
PROCESS WERE DISCUSSED WITH THE APPLICABLE EMPLOYEES AND SUPERVISORS."
FROM THE RECORD, IT APPEARS THAT ROBERT PACHECO MAINTAINED AN
ADEQUATE SYSTEM DESIGNED TO AVOID ERRORS, AND THAT HE ADEQUATELY
SUPERVISED HIS SUBORDINATES SO THAT THE SYSTEM WAS FOLLOWED.
CONSIDERING THE SCOPE OF OPERATIONS OF THE CHICAGO DISBURSING CENTER,
MR. PACHECO CANNOT BE EXPECTED TO HAVE PERSONALLY INSPECTED EVERY CHECK
ISSUED. IN SHORT, THE ERROR WHICH RESULTED IN THE OVERPAYMENT IN THIS
INSTANCE WAS THE KIND THAT WILL OCCASIONALLY OCCUR IN EVEN THE MOST
CAREFULLY ESTABLISHED AND EFFICIENTLY SUPERVISED SYSTEM. ACCORDINGLY,
WE CONCLUDE THAT THE ERRONEOUS PAYMENT WAS NOT THE RESULT OF BAD FAITH
OR LACK OF DUE CARE ON THE PART OF MR. PACHECO.
WE ALSO FIND THAT THE DEPARTMENT OF THE TREASURY HAS PURSUED
DILIGENTLY THE COLLECTION OF THE CLAIM WITHIN THE MEANING OF 31 U.S.C.
SEC. 82-A. THE DECISION TO TERMINATE COLLECTION EFFORTS AGAINST MR.
LUNT APPEARS TO COMPLY WITH 31 U.S.C. SEC. 952(B) (1976), AND THE
PROCEDURES SET FORTH IN 4 C.F.R. SEC. 104.3.
FOR THE REASONS STATED, WE RELIEVE MR. ROBERT PACHECO, FORMER
DIRECTOR OF THE CHICAGO DISBURSING CENTER, FROM LIABILITY FOR THE
ERRONEOUS OVERPAYMENT OF $619.60 TO MR. DONALD A. LUNT.
B-194925, JUL 12, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE CONTRACTING OFFICER'S IMPROPER REJECTION OF LOW SMALL BUSINESS
BIDDER AS NONRESPONSIBLE WITHOUT REFERRING MATTER TO SMALL BUSINESS
ADMINISTRATION FOR CERTIFICATE OF COMPETENCY CONSIDERATION IS CURED BY
SUBSEQUENT REFERRAL TO SBA, PROTEST IS MOOT AND NEED NOT BE CONSIDERED,
AS SBA HAS CONCLUSIVE AUTHORITY TO DETERMINE MATTERS OF SMALL BUSINESS'
RESPONSIBILITY.
HORNE HEALTH CARE INC.:
HORNE HEALTH CARE INC. (HHCI), A SMALL BUSINESS AND THE LOW BIDDER
UNDER INVITATION FOR BIDS (IFB) NO. DABT-56-79-B-0020, ISSUED BY THE
DEPARTMENT OF THE ARMY FOR RADIOLOGICAL SERVICES AT DEWITT ARMY
HOSPITAL, PROTESTS ITS REJECTION AS NONRESPONSIBLE. A CONTRACT UNDER
THE SOLICITATION WAS AWARDED TO THE SECOND LOW BIDDER, ASSOCIATION OF
ALEXANDRIA RADIOLOGISTS (AAR), ON MAY 10, 1979.
THE ARMY CONCEDES THAT THE CONTRACTING OFFICER IMPROPERLY FAILED TO
REFER THE NONRESPONSIBILITY DETERMINATION TO THE SMALL BUSINESS
ADMINISTRATION (SBA) FOR CONSIDERATION UNDER ITS CERTIFICATE OF
COMPETENCY (COC) PROGRAM, AS REQUIRED BY THE SMALL BUSINESS ACT, 15
U.S.C. SEC. 637(B)(7) (1976), AS AMENDED BY PUB. L. NO. 95-89, 91 STAT.
557, EFFECTIVE AUGUST 4, 1977, AND THE IMPLEMENTING REGULATIONS AT
DEFENSE ACQUISITION REGULATION SEC. 1-705.4 (1976 ED.).
HOWEVER, THE ARMY ADVISES THAT IN RESPONSE TO THE PROTEST THE
REQUIRED REFERRAL HAS NOW BEEN MADE. THE ARMY STATES THAT SINCE THE
SERVICES ARE ESSENTIAL, AAR WILL CONTINUE CONTRACT PERFORMANCE UNTIL THE
SBA ACTS, AND THAT WHETHER THE CONTRACT WILL BE CONTINUED AFTER THAT
TIME WILL DEPEND ON THE NATURE OF THE ACTION. WE ASSUME THAT THIS MEANS
THAT IF A COC IS ISSUED AND HHCI WILL ACCEPT AWARD FOR THE BALANCE OF
THE CONTRACT TERM, THE CONTRACT WITH AAR WILL BE TERMINATED FOR THE
CONVENIENCE OF THE GOVERNMENT. IF A COC IS NOT ISSUED OR HHCI REFUSES
SUCH AN AWARD, NO FURTHER ACTION WILL BE REQUIRED. HATCHER WASTE
DISPOSAL, B-193065, MARCH 7, 1979, 79-1 CPD 157; THE FORESTRY ACCOUNT,
B-193089, JANUARY 30, 1979, 79-1 CPD 68. IN THIS CONNECTION, THE SBA IS
EMPOWERED TO CERTIFY CONCLUSIVELY TO GOVERNMENT PROCUREMENT OFFICIALS
WITH RESPECT TO ALL ELEMENTS OF A SMALL BUSINESS' RESPONSIBILITY. SEE
COM-DATA, INC., B-191289, JUNE 23, 1978, 78-1 CPD 459.
INASMUCH AS THE REFERRAL TO SBA MOOTS THE PROTEST, IT IS DISMISSED.
B-195106, JUL 12, 1979
HEADNOTES-UNAVAILABLE
UNITED STATES GENERAL ACCOUNTING OFFICE
PAUL H. TAYLOR, DEPARTMENT OF THE TREASURY:
YOUR LETTER OF JUNE 4, 1979 (REFERENCE G-DD:FS/MND), REQUESTS RELIEF
FROM LIABILITY FOR MR. ROBERT PACHECO FOR THE INCORRECT PAYMENT OF
$3,594.33 OF GOVERNMENT FUNDS FROM THE CHICAGO DISBURSING CENTER. MR.
PACHECO WAS THE DIRECTOR OF THE CHICAGO DISBURSING CENTER WHEN THE LOSS
OCCURRED. WE AGREE THAT MR. PACHECO SHOULD BE GRANTED RELIEF.
31 U.S.C. SEC. 82A-2(A) (1976) PROVIDES THE BASIS FOR GRANTING RELIEF
TO A DISBURSING OFFICER FOR THE INCORRECT PAYMENT OF GOVERNMENT FUNDS:
"WHENEVER (1) ANY DEFICIENCY EXISTS OR OCCURS IN THE OFFICIAL
DISBURSING ACCOUNTS OF ANY DISBURSING OFFICER OR FORMER DISBURSING
OFFICER OF ANY DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT OF THE
GOVERNMENT IN CONSEQUENCE OF THE MAKING OF ANY ILLEGAL, IMPROPER, OR
INCORRECT PAYMENT, AND (2) THE COMPTROLLER GENERAL OR ANY OFFICER OF THE
GENERAL ACCOUNTING OFFICE DESIGNATED BY THE COMPTROLLER GENERAL
DETERMINES, UPON HIS OWN MOTION OR UPON WRITTEN FINDINGS AND
RECOMMENDATIONS MADE BY THE HEAD OF THE DEPARTMENT, AGENCY, OR
INDEPENDENT ESTABLISHMENT CONCERNED, OR HIS DESIGNEES FOR THAT PURPOSE,
THAT SUCH PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF DUE CARE ON
THE PART OF SUCH DISBURSING OFFICER, THE COMPTROLLER GENERAL OR HIS
DESIGNEE IS AUTHORIZED IN HIS DISCRETION TO RELIEVE SUCH DISBURSING
OFFICER OF ACCOUNTABILITY AND RESPONSIBILITY, AND ALLOW CREDIT IN HIS
OFFICIAL DISBURSING ACCOUNTS, FOR SUCH DEFICIENCY. SUCH RELIEF MAY BE
DENIED IN ANY CASE IN WHICH THE COMPTROLLER GENERAL OR HIS DESIGNEE
DETERMINES THAT THE DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT
CONCERNED HAS NOT DILIGENTLY PURSUED COLLECTION ACTION IN ACCORDANCE
WITH PROCEDURES PRESCRIBED BY THE COMPTROLLER GENERAL."
THE DEPARTMENT RECOMMENDS TO US THAT MR. PACHECO SHOULD NOT BE HELD
LIABLE. THE RECORD ALSO INDICATES THAT THE DEPARTMENT HAS DILIGENTLY
PURSUED COLLECTION ACTION AS REQUIRED.
THERE WERE THREE SIGNIFICANT BREAKDOWNS THAT LED TO THE INCORRECT
PAYMENT. FIRST OF ALL, THE OVERPAYMENT RESULTED FROM THE ERRONEOUS
ISSUANCE OF A SECOND CHECK TO PATRICIA A. WRIGHT, INSTEAD OF PATRICIA W.
WRIGHT. DURING THE PRINTING OF THE CHECKS, THE MACHINE STOPPED. AFTER
REASSEMBLING THE CHECKS, THE MACHINE STARTED AND A CHECK FOR $1.56 WAS
PROPERLY ISSUED TO PATRICIA A. WRIGHT. HOWEVER, THE MACHINE FAILED TO
ADVANCE THE VOUCHER SCHEDULE CONTINUATION SHEET AND THE SECOND CHECK WAS
ALSO ISSUED TO PATRICIA A. WRIGHT. SECOND, THE CLERK FAILED TO NOTICE
THE ERROR DURING THE VERIFICATION PROCESS. THIRD, THE MOTHER OF THE
PERSON WHO WAS INCORRECTLY ISSUED THE CHECK STATES THAT WHEN SHE CALLED
THE DISBURSING OFFICE ABOUT THE CHECK, THE ERROR WAS NOT RECOGNIZED AND
THE RECIPIENT, WHO ALSO CALLED THE CIVIL SERVICE COMMISSION ABOUT THE
MATTER, WAS ADVISED TO CASH THE CHECK.
NONE OF THESE CIRCUMSTANCES WAS THE PROXIMATE RESULT OF BAD FAITH OR
LACK OF DUE CARE BY MR. PACHECO. THE RECORD INDICATES THAT HE FOLLOWED
ESTABLISHED PROCEDURES, AND PROPERLY INSTRUCTED AND SUPERVISED HIS
SUBORDINATES. THESE PROCEDURES DO NOT REQUIRE THE DISBURSING OFFICER TO
PERSONALLY INSPECT EACH CHECK PRIOR TO ISSUANCE. THE VOLUME OF WORK
PROCESSED BY THE CHICAGO DISBURSING CENTER (7.7 MILLION COPIES IN JULY
1974) PREVENTS THE DIRECTOR FROM REVIEWING EACH ITEM INDIVIDUALLY. THE
MISPLACEMENT OF A MIDDLE INITIAL IS THE KIND OF ERROR THAT OCCASIONALLY
ESCAPES NOTICE EVEN IN A PROPERLY ESTABLISHED AND SUPERVISED
VERIFICATION SYSTEM. THE DIRECTOR MUST RELY UPON HIS SUBORDINATES TO
WORK ACCURATELY. SEE B-187180, SEPTEMBER 21, 1976, B-192109, OCTOBER
11, 1978. FURTHER COLLECTION ACTION WAS TAKEN THROUGH REFERRAL TO THE
SECRET SERVICE WHICH REPORTED THAT THE DEBT WAS UNCOLLECTIBLE.
THEREFORE, UNDER THE AUTHORITY CONTAINED IN 31 U.S.C. SEC. 82A-2, WE
GRANT MR. PACHECO RELIEF FROM LIABILITY AS REQUESTED.
B-195215, JUL 12, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROPRIETY OF CONTRACTING AGENCY'S REJECTION OF PROTESTER'S BID
BECAUSE PROTESTER'S OPERATIONS MANAGER, WHO SIGNED BID, WAS ON DEBARRED
BIDDERS LIST FOR VIOLATION OF SERVICE CONTRACT ACT IS NOT FOR
CONSIDERATION BY GAO, SINCE SERVICE CONTRACT ACT PROVIDES THAT FEDERAL
AGENCY HEAD AND SECRETARY OF LABOR ARE TO ENFORCE ACT. SUCH ENFORCEMENT
POWERS INCLUDE MAKING DETERMINATIONS REGARDING AFFILIATIONS WITH
DEBARRED INDIVIDUALS AND FIRMS.
ENVIRO-DEVELOPMENT COMPANY:
BY LETTER OF JUNE 9, 1979, WITH ENCLOSURES, ENVIRO-DEVELOPMENT
COMPANY PROTESTED THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO
SOLICITATION NO. R3-0879-3, ISSUED BY THE FOREST SERVICE, UNITED STATES
DEPARTMENT OF AGRICULTURE.
THE ABOVE SOLICITATION CALLED FOR BIDS FOR TREE THINNING AND PILING
IN THE LINCOLN NATIONAL FOREST, NEW MEXICO. BIDS WERE OPENED ON MAY 25,
1979, AND ENVIRO-DEVELOPMENT WAS THE APPARENT LOW BIDDER. HOWEVER,
ENVIRO-DEVELOPMENT'S BID WAS SIGNED BY A MR. GENE WOOLBRIGHT WHO HAD, ON
MARCH 1, 1977, BEEN PLACED ON THE COMPTROLLER GENERAL'S DEBARRED BIDDERS
LIST FOR VIOLATION OF THE SERVICE CONTRACT ACT, 41 U.S.C. SEC. 351, ET
SEQ. (1976). THE ACT DIRECTS THAT NO CONTRACT SHALL BE AWARDED TO SUCH
PERSONS OR FIRMS, OR TO ANY FIRM, CORPORATION, PARTNERSHIP OR
ASSOCIATION IN WHICH SUCH PERSONS OR FIRMS HAVE A SUBSTANTIAL INTEREST,
UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF THE LIST
CONTAINING THE NAME OF SUCH PERSONS OR FIRMS.
THE FOREST SERVICE DETERMINED THAT MR. WOOLBRIGHT HAD A SUBSTANTIAL
INTEREST IN ENVIRO-DEVELOPMENT SINCE HE HAD SIGNED THE BID AND WAS
IDENTIFIED BY ENVIRO-DEVELOPMENT AS ITS OPERATIONS MANAGER. THIS WAS
THE BASIS FOR THE FOREST SERVICE'S REJECTION OF ENVIRO-DEVELOPMENT'S
BID. ENVIRO-DEVELOPMENT CONTENDS THAT MR. WOOLBRIGHT IS AN EMPLOYEE AND
NOTHING MORE.
THE QUESTION OF WHETHER MR. WOOLBRIGHT HAS A SUBSTANTIAL INTEREST IN
ENVIRO-DEVELOPMENT, THUS MAKING THAT FIRM INELIGIBLE FOR AWARD, IS NOT
FOR CONSIDERATION BY OUR OFFICE, SINCE THE SERVICE CONTRACT ACT PROVIDES
THAT THE FEDERAL AGENCY HEAD AND THE SECRETARY OF LABOR ARE TO ENFORCE
THE ACT. SUCH ENFORCEMENT POWERS INCLUDE MAKING DETERMINATIONS
REGARDING AFFILIATIONS WITH DEBARRED INDIVIDUALS OR FIRMS. SEE
INTEGRITY MANAGEMENT INTERNATIONAL, INC., B-187555, DECEMBER 21, 1976,
76-2 CPD 515, AND DYNETERIA, INC., B-186823, OCTOBER 18, 1976, 76-2 CPD
338. HOWEVER, THE FOREST SERVICE'S ACTION MAY BE APPEALED TO THE
DEPARTMENT OF LABOR WHICH, PURSUANT TO 41 U.S.C. SEC. 353(A) (1976) AND
SECTION 4.189 OF TITLE 29 OF THE CODE OF FEDERAL REGULATIONS, IS
IMPOWERED TO HOLD HEARINGS IN ORDER TO REVIEW SUCH AGENCY ACTIONS.
ACCORDINGLY, ENVIRO-DEVELOPMENT'S PROTEST IS DISMISSED.
B-192988, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE BID FORM PROVIDED SPACES FOR UNIT PRICES EXTENDED PRICES
AND A TOTAL PRICE AND AWARD ON BASIS OF TOTAL PRICE WAS PERMITTED, BID
SETTING FORTH PRICE FOR NONRECURRING COSTS ABOVE EXTENDED PRICES FOR
QUANTITIES TO BE INCREMENTALLY FUNDED CLEARLY REFLECTED INTENT SUCH
NONRECURRING COSTS SHOULD BE ADDED TO EXTENDED PRICE FOR FIRST QUANTITY
FUNDED. AS EXTENDED PRICE WAS READILY ASCERTAINABLE FROM BID AND TOTAL
PRICE WAS LOW, ACCEPTANCE OF BID AS RESPONSIVE WAS PROPER.
2. PROTEST ISSUES BASED UPON IMPROPRIETIES APPARENT ON FACE OF THE
IFB WILL NOT BE CONSIDERED BECAUSE PROTEST WAS NOT FILED BEFORE THE BID
OPENING DATE AS REQUIRED BY BID PROTEST PROCEDURES. ALTHOUGH UNTIMELY
ISSUES ARE NOT OF SUCH IMPORTANCE TO THE COMPETITIVE PROCUREMENT PROCESS
AS TO WARRANT CONSIDERATION UNDER THE SIGNIFICANT ISSUE EXCEPTION,
ALLEGATION OF ANTI-DEFICIENCY ACT VIOLATION MERITS COMMENT.
3. CONTRACT USING FUNDS WITHOUT FISCAL YEAR LIMITATION AND PROVIDING
FOR PURCHASE OF ADDITIONAL ITEMS ONLY IF FUNDS BECOME AVAILABLE IN
FUTURE AND AGENCY, AFTER DETERMINATION THAT IT IS IN INTEREST OF
GOVERNMENT TO DO SO, ALLOTS SUCH FUNDS TO CONTRACT DOES NOT VIOLATE THE
ANTI-DEFICIENCY ACT WHERE CONTRACTOR IS NOT REQUIRED BY CONTRACT OR
OTHERWISE TO PERFORM IN ADVANCE OF ALLOTMENT OF SUCH FUNDS.
HONEYWELL, INC.:
HONEYWELL, INC. (HONEYWELL), PROTESTS AWARD OF A CONTRACT TO BELL AND
HOWELL COMPANY (BELL) BY THE NAVAL AIR DEVELOPMENT CENTER, U.S. NAVY
(NAVY) UNDER INVITATION FOR BIDS (IFB) NO. N62269-78-50-80161.
HONEYWELL CONTENDS THAT BELL'S BID WAS NONRESPONSIVE, THE PROCUREMENT
VIOLATED 10 U.S.C. SEC. 2305 (1976), AND THE CONTRACT AWARDED VIOLATES
THE ANTI-DEFICIENCY ACT, 31 U.S.C. SECS. 665 AND 712(A) (1976) AND 41
U.S.C. SEC. 11 (1976) AS WELL AS THE DEFENSE ACQUISITION REGULATION
(DAR). FOR REASONS DISCUSSED BELOW, THIS PROTEST IS DENIED.
ALTHOUGH THE SECOND STEP OF THIS TWO-STEP FORMALLY ADVERTISED
PROCUREMENT REQUIRED PRICES FOR 15 DIFFERENT LINE ITEMS, THIS CASE
REQUIRES DISCUSSION OF ONLY LINE ITEM 1, WHICH CALLED FOR 21 SOUND
RECORDERS. THE IFB, AS AMENDED, STATED THAT FOR BIDDING PURPOSES, THE
BIDDER SHALL ASSUME THAT THE GOVERNMENT WILL FUND ITEM 1 AS FOLLOWS:
"J163 ESTIMATED FUNDING DATES
ITEM NUMBER FUNDING DATE
0001 4 EA EFFECTIVE DATE OF CONTRACT
1 EA 12 MONTHS AFTER EFFECTIVE DATE
OF CONTRACT
16 EA 1 NOV 1981"
THE IFB ALSO PROVIDED:
"IN THE EVENT FUNDS BECOME AVAILABLE IN A TIME WHICH SUBSTANTIALLY
DIFFERS FROM THE DATES SHOWN ABOVE, THE PARTIES TO THE CONTRACT RESERVE
THE RIGHT TO NEGOTIATE AN EQUITABLE ADJUSTMENT IN PRICE WHICH WILL BE
REFLECTED IN A SUPPLEMENTAL AGREEMENT TO THE CONTRACT. IT IS FURTHER
UNDERSTOOD AND AGREED BY THE PARTIES THAT THE GOVERNMENT NEED NOT FUND
ALL THE LINE ITEMS, IF TO DO SO IS NOT IN THE BEST INTERESTS OF THE
GOVERNMENT. IT IS FURTHER AGREED THAT THIS PROVISION DOES NOT WAIVE ANY
RIGHTS OF THE GOVERNMENT UNDER THE CLAUSE IN THE CONTRACT ENTITLED
'LIMITATIONS OF GOVERNMENT'S OBLIGATION'."
OPENING OF THE BIDS ON SEPTEMBER 15, 1978 REVEALED HONEYWELL'S TOTAL
BID (15 LINE ITEMS) WAS $4,300,000 AND BELL'S BID WAS $4,064,447. FOR
LINE ITEM 1, BELL'S EXTENDED BID PRICE FOR THE 21 RECORDERS WAS
$2,623,324 AND HONEYWELL'S PRICE WAS 2,573,233. IN THE SPACE ON THE
SCHEDULE PROVIDED FOR A UNIT PRICE, EACH REFERRED TO A SEPARATE
BREAKDOWN OF PRICES, AS FOLLOWS:
BELL
NON-RECURRING ENGINEERING
FOR DESIGN MODIFICATIONS $ 741,274
4 SSRS $91,654.00 EA 366,616
1 SSRS 98,070.00 EA 98,070
16 SSRS 88,758.50 EA 1,420,136
(TOTAL)($2,626,096)
HONEYWELL
4 SRRS $298,864. EA $1,195,456
1 SRRS $107,505. EA 107,505
16 SRRS $ 79,392. EA 1,270,272
(TOTAL) ($2,573,233)
THE SOLICITATION PERMITTED A SINGLE AWARD FOR ALL ITEMS, AND THE NAVY
AWARDED A CONTRACT TO BELL ON SEPTEMBER 22, 1978. ALTHOUGH THE CONTRACT
SPECIFIED A TOTAL CONTRACT PRICE OF $4,064,447, ONLY $1,246,157 WAS
ALLOTTED TO THE CONTRACT UNDER THE "LIMITATIONS OF GOVERNMENT'S
OBLIGATION" CLAUSE, INCLUDING $1,107,890 FOR ITEM 0001 (4 EA.). THE
NAVY CALCULATED THE $1,107,890 FOR ITEM 0001 BY ADDING BELL'S
NONRECURRING ENGINEERING COSTS OF $741,274 TO THE $366,616 QUOTED FOR
THE 4 UNITS.
HONEYWELL INITIALLY CONTENDS THAT THIS ALLOCATION OF NONRECURRING
COSTS TO THE FIRST 4 UNITS WAS UNWARRANTED BECAUSE THERE WAS NO EVIDENCE
IN THE BID TO INDICATE THAT THIS WAS INTENDED BY BELL. IT ASSERTS THAT
THERE ARE OTHER EQUALLY REASONABLE METHODS OF ALLOCATING THE
NONRECURRING COSTS, EACH OF WHICH WOULD ALSO HAVE REQUIRED THE
UNAUTHORIZED RESTRUCTURING OF BELL'S BID AND WOULD HAVE RESULTED IN A
UNIT PRICE NOT QUOTED BY BELL. HONEYWELL ARGUES THAT THE ALLOCATION
METHOD CHOSEN BY THE NAVY WAS MOST FAVORABLE TO BELL BECAUSE IT RESULTS
IN THE EARLIEST RECOVERY OF NON-RECURRING COSTS. HONEYWELL ALSO STATES
THAT IT COULD HAVE BID LOWER IF IT HAD BEEN PERMITTED TO BID
NONRECURRING COSTS AS A SEPARATE LINE ITEM TO BE ALLOCATED IN THE FIRST
UNIT OR UNITS PURCHASED. IT ARGUES THAT THE CONTRACT FUNDING COULD HAVE
BEEN ALLOCATED SOLELY TO THE SINGLE UNIT, THE 16 UNITS OR THE 4 UNITS,
DEPENDING UPON THE AMOUNT OF AVAILABLE FUNDS. IT BELIEVED THAT
COMPLIANCE WITH THE SOLICITATION'S FORMAT FORCED INCLUSION OF
NONRECURRING COSTS IN EACH OF THE ABOVE THREE CATEGORIES.
THE NAVY DISCLAIMS ANY AMBIGUITY IN THE IFB OR AS TO BELL'S INTENDED
BID FOR THE 4 UNITS FUNDED BECAUSE THE EXTENDED PRICE COULD BE
ACCURATELY ASCERTAINED FROM THE BID ITSELF. IN THE ALTERNATIVE, THE
NAVY ARGUES THAT IF THE SEPARATE PRICE FOR NONRECURRING COSTS WAS A
DEFICIENCY, IT WAS MERELY A MATTER OF FORM WHICH COULD BE WAIVED UNDER
DAR SEC. 2-405, AS HAVING NO EFFECT OR MERELY TRIVIAL OR NEGLIGIBLE
EFFECT ON PRICE, QUALITY, QUANTITY OR DELIVERY, WITHOUT PREJUDICE TO
HONEYWELL, THE ONLY OTHER BIDDER.
BELL POINTS OUT THAT ALTHOUGH NOT REQUIRED, BOTH BELL AND HONEYWELL
CHOSE TO PROVIDE PRICE BREAKDOWNS. IT ASSERTS THAT THE MORE MEANINGFUL
SUPPLEMENTARY INFORMATION PROVIDED BY BELL DOES NOT LOGICALLY LEAD TO
THE CONCLUSION THAT THE INVITATION OR BELL'S BID WAS AMBIGUOUS OR
OTHERWISE DEFECTIVE.
IN DETERMINING BELL'S EXTENDED PRICE FOR THE 4 UNITS THE NAVY
CONCLUDED THAT BELL INTENDED TO RECOUP ITS NONRECURRING COSTS ON THE
INITIAL 4 UNITS RATHER THAN OVER THE 21 UNITS. WE AGREE WITH THE NAVY'S
INTERPRETATION. MOREOVER, ALTHOUGH HONEYWELL STATES IT ALLOCATED
NONRECURRING COSTS OVER THE THREE QUANTITY CATEGORIES, ITS UNIT PRICE OF
$298,864 FOR THE 4 UNITS AS COMPARED TO $79,392 EACH FOR THE 16 UNITS
SUGGESTS THAT THE BULK OF ITS NONRECURRING COSTS WAS ADDED TO THE
PRODUCTION COSTS OF THE 4 UNITS. IT ALSO INDICATES, WE THINK, THAT
HONEYWELL DID NOT HAVE ANY SERIOUS CONCERN ABOUT THE NAVY FUNDING THE
CATEGORIES OUT OF SEQUENCE. IN ANY EVENT, AS THE IFB STATED THAT THE
ANTICIPATED FUNDING DATES FOR THE GROUPS OF 4, 1 AND 16, WERE THE
CONTRACT AWARD DATE, 12 MONTHS THEREAFTER AND NOVEMBER 1, 1981,
RESPECTIVELY, WE BELIEVE THE NAVY CLEARLY COMMITTED ITSELF TO THIS
SEQUENCE. THUS, WE CANNOT DETECT ANY PREJUDICE TO HONEYWELL.
IN TRULAND CORPORATION, B-190242, MARCH 8, 1978, 78-1 CPD 183, WHICH
HONEYWELL CITES, IT WAS IMPOSSIBLE TO DETERMINE FROM THE FACE OF THE BID
WHETHER TRULAND INTENDED TO INCLUDE OR EXCLUDE ITS PRICE FOR SPARE PARTS
FROM THE BASE PRICE. AS A RESULT, THE LOW BIDDER COULD NOT BE
DETERMINED WITH CERTAINTY. WE HELD THAT BECAUSE THIS AMBIGUITY AROSE
FROM THE "INARTFUL AND AMBIGUOUS" WORDING OF THE SOLICITATION,
CANCELLATION OF THE IFB WAS PROPER. WHILE THE SOLICITATION HERE SHOULD
HAVE PROVIDED INSTRUCTIONS FOR RECOVERY OF NONRECURRING COSTS, THE
FAILURE TO DO SO DID NOT RESULT IN ANY REASONABLE AMBIGUITY AS TO THE
BID PRICES INTENDED BY BELL OR HONEYWELL.
HONEYWELL CONTENDS THAT THE BELL CONTRACT MAY VIOLATE THE
ANTI-DEFICIENCY ACT BECAUSE THE NAVY ONLY HAS FUNDS FOR 4 OF THE 21
UNITS. IT ARGUES THAT IF THE CONTRACT IS ONLY FOR THE 4 UNITS FUNDED,
THE ADDITIONAL 16 UNITS WHICH MAY BE ORDERED UNDER THE CONTRACT ARE IN
THE NATURE OF OPTIONS WHICH, UNDER DAR 1-1505, MAY NOT BE EXERCISED BY
THE NAVY WITHOUT TESTING THE MARKET. IN HONEYWELL'S VIEW, THE NAVY IS
EITHER VIOLATING THE ANTI-DEFICIENCY ACT OR EVADING THE REQUIREMENT IN
DAR 1-322.2(C)(IV) FOR "UNIFORM UNIT PRICES" IN MULTI-YEAR REQUIREMENTS.
THE NAVY ARGUES THAT THIS ASPECT OF THE PROTEST IS UNTIMELY IN THAT
THE PROTESTER PARTICIPATED IN THE COMPETITION BUT DID NOT COMPLAIN OF
THE ALLEGED DEFECT IN THE SOLICITATION UNTIL ANOTHER BIDDER WAS REVEALED
TO BE LOW. WE AGREE THAT THIS ASPECT OF THE PROTEST IS UNTIMELY FOR THE
REASON STATED BY THE NAVY. 4 C.F.R. 20.2(B)(1). FURTHERMORE, WE
BELIEVE THESE ISSUES ARE NOT OF SUCH WIDESPREAD INTEREST AS TO WARRANT
CONSIDERATION UNDER THE SIGNIFICANT ISSUE EXCEPTION TO OUR PROCEDURES, 4
C.F.R. 20.2(C). HOWEVER, WE BELIEVE THAT THE QUESTION WHETHER THE
CONTRACT VIOLATES THE ANTI-DEFICIENCY ACT MERITS COMMENT.
UNDER THE "LIMITATION OF GOVERNMENT'S OBLIGATION" CLAUSE OF THE
CONTRACT THE GOVERNMENT IS ONLY OBLIGATED TO THE CONTRACTOR FOR THE
FUNDS ALLOTTED TO THE CONTRACT. AS INDICATED ABOVE, THE CLAUSE PROVIDES
THAT THE SUM OF $1,246,157 IS ALLOTTED TO THE CONTRACT, THAT THE
GOVERNMENT MAY FROM TIME TO TIME ALLOT ADDITIONAL FUNDS UNTIL THE TOTAL
CONTRACT PRICE IS ALLOTTED, AND THAT "THE GOVERNMENT WILL NOT HAVE ANY
FURTHER MONETARY OBLIGATION TO THE CONTRACTOR IN THE EVENT THAT NO
ADDITIONAL FUNDS BECOME AVAILABLE, THE 'TERMINATION FOR THE CONVENIENCE
OF THE GOVERNMENT' CLAUSE NOTWITHSTANDING." IN ADDITION, WE ARE ADVISED
BY THE NAVY THAT THE FUNDS COVERING THE CONTRACT ARE NOT FISCAL YEAR
FUNDS. THEREFORE, WE FIND NO BASIS TO CONCLUDE THAT THE CONTRACT
VIOLATES THE ANTI-DEFICIENCY ACT.
THE PROTEST IS DISMISSED IN PART AND DENIED AS TO THE REMAINDER.
B-193516, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
RULE THAT DOUBTS AS TO TIMELINESS OF PROTEST BE RESOLVED IN FAVOR OF
PROTESTER DOES NOT APPLY WHERE RECORD CLEARLY SHOWS PROTESTER WAS
INFORMED OF AGENCY POSITION MORE THAN 10 DAYS BEFORE PROTEST WAS FILED.
LANIER BUSINESS PRODUCTS, INC. - RECONSIDERATION:
LANIER BUSINESS PRODUCTS, INC. (LANIER) HAS ASKED FOR RECONSIDERATION
OF OUR DECISION IN LANIER BUSINESS PRODUCTS, INC., B-193516, JUNE 8,
1979, 79-1 CPD ___, WHERE WE DISMISSED ITS PROTEST AS UNTIMELY.
LANIER HAD OBJECTED TO A SOLE-SOURCE AWARD, ALLEGING THAT ITS
DOMESTICALLY MANUFACTURED EQUIPMENT WOULD MEET THE AIR FORCE'S
REQUIREMENTS. WE DISMISSED LANIER'S PROTEST BECAUSE IT WAS CLEAR FROM
THE PROTESTER'S SUBMISSIONS THAT IT DID NOT FILE ITS PROTEST WITH OUR
OFFICE WITHIN THE TIME LIMIT REQUIRED BY OUR PROCEDURES. SEE 4 C.F.R.
PART 20 (1979).
LANIER, CITING DICTAPHONE CORPORATION, B-193614, JUNE 13, 1979, 79-1
CPD ___, NOW CONTENDS THAT WHERE DOUBT EXISTS ABOUT THE TIMELINESS OF A
PROTEST, THE QUESTION SHOULD BE RESOLVED IN FAVOR OF THE PROTESTER. IN
THE ALTERNATIVE, THE PROTESTER ARGUES THE MATTER RAISES A SIGNIFICANT
ISSUE WHICH SHOULD BE CONSIDERED UNDER 4 C.F.R. 20.2(C) EVEN IF THE
PROTEST IS RULED UNTIMELY.
DICTAPHONE CORPORATION, SUPRA IS NOT APPLICABLE TO THIS CASE SINCE IT
IS CLEAR FROM THE RECORD THAT LANIER WAS INFORMED OF THE AGENCY'S
POSITION REGARDING THE AWARD TO ITS COMPETITOR MORE THAN 10 DAYS BEFORE
LANIER FILED ITS PROTEST. FURTHER, WE HAVE ALREADY RULED IN OUR PRIOR
DECISION THAT LANIER HAS NOT RAISED A SIGNIFICANT ISSUE WHICH SHOULD BE
CONSIDERED UNDER THE EXCEPTION TO OUR TIMELINESS RULES.
OUR PRIOR DECISION IS AFFIRMED.
B-194180, B-194181, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE EVIDENCE SHOWS THAT PROTEST AGAINST ALLEGED IMPROPRIETY IN
RFP WAS RECEIVED AT GAO BEFORE PROPOSALS WERE DUE, PROTEST IS TIMELY AND
WILL BE CONSIDERED ON MERITS NOTWITHSTANDING THAT PROTEST WAS NOT
TIME/DATE STAMPED AT GAO UNTIL AFTER SUCH TIME.
2. CONTRACTING AGENCY PROPERLY MAY RESTRICT PROCUREMENT OF PART FOR
MILITARY EQUIPMENT, TO BE USED FOR REPLENISHMENT OF STOCK, REPAIR, OR
REPLACEMENT, TO ORIGINAL MANUFACTURER'S PART OR IDENTICAL PRODUCT WHERE
GOVERNMENT HAS ONLY LIMITED RIGHTS IN DATA FOR ITEM OR WHERE
UNRESTRICTED DATA IN AGENCY'S POSSESSION IS NOT ADEQUATE TO CONDUCT
COMPETITIVE PROCUREMENT.
METAL ART, INC.:
METAL ART, INC., PROTESTS THE RESTRICTIVE NATURE OF REQUEST FOR
PROPOSALS (RFP) NOS. DLA700-79-R-0757 AND -0746, ISSUED BY THE DEFENSE
LOGISTICS AGENCY'S DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) FOR 50
BEVELED SEATS AND 390 WEARING RINGS, RESPECTIVELY. EACH SOLICITATION
IDENTIFIED THE ITEM BEING PROCURED BY REFERENCE TO CERTAIN
MANUFACTURERS' PART NUMBERS, AND REQUIRED THAT ANY PROPOSED ALTERNATE BE
SHOWN BY THE OFFEROR TO BE ESSENTIALLY IDENTICAL TO THE CITED PART.
METAL ART CONTENDS THAT DCSC SHOULD INSTEAD HAVE FURNISHED TECHNICAL
DRAWINGS OF THE ITEMS IN THE AGENCY'S POSSESSION TO POTENTIAL OFFERORS,
OR "REVERSE ENGINEERED" THEM FOR THE BENEFIT OF SUCH FIRMS, SO THAT THEY
COULD HAVE BEEN PROCURED ON A MORE COMPETITIVE BASIS. WE FIND NO MERIT
TO THE PROTESTER'S CONTENTIONS.
TIMELINESS
AS A PROTEST ISSUE, DCSC ARGUES THAT THE PROTESTS WERE UNTIMELY FILED
IN OUR OFFICE UNDER SECTION 20.2(B)(1) OF OUR BID PROTEST PROCEDURES, 4
C.F.R. PART 20 (1978), WHICH REQUIRES THAT A PROTEST AGAINST AN ALLEGED
IMPROPRIETY IN AN RFP BE FILED PRIOR TO THE TIME SET FOR THE RECEIPT OF
INITIAL PROPOSALS. PROPOSALS WERE DUE UNDER BOTH SOLICITATIONS BY 3
P.M. ON FEBRUARY 20, 1979, BUT METAL ART'S PROTESTS, FILED BY TELEX,
WERE NOT TIME/DATE STAMPED AS RECEIVED IN THE GENERAL ACCOUNTING OFFICE
(GAO) UNTIL FEBRUARY 21 AT 3:23 P.M.
HOWEVER, OUR TIME/DATE STAMP IS ONLY PRIMA FACIE EVIDENCE OF THE TIME
OF RECEIPT IN OUR OFFICE. SIGMA CONSULTANTS, INC., B-194706, MAY 14,
1979, 79-1 CPD 350. THE TELEX REGARDING RFP NO. -0757 INDICATES ON ITS
FACE THAT IT WAS RECEIVED AT THE TELEX MACHINE IN THE GAO BUILDING AT
11:28 A.M. ON FEBRUARY 19, AND THE ONE REGARDING RFP NO. -0746 INDICATES
RECEIPT AT 9:47 A.M. ON FEBRUARY 20. IN THIS CONNECTION, WE NOTE THAT
WASHINGTON'S BIRTHDAY FELL ON MONDAY, FEBRUARY 19, AND THAT BECAUSE OF A
HEAVY SNOWSTORM IN THE WASHINGTON, D.C., AREA, FEDERAL GOVERNMENT
OFFICES IN THE AREA, INCLUDING GAO, WERE ALSO CLOSED ON FEBRUARY 20
(ALTHOUGH OUR TELEX MACHINE COULD STILL RECEIVE COMMUNICATIONS).
IN VIEW OF THIS EVIDENCE OF RECEIPT PRIOR TO THE TIME SET FOR THE
RECEIPT OF INITIAL PROPOSALS, WE CONSIDER THE PROTESTS TO HAVE BEEN
TIMELY FILED IN ACCORDANCE WITH OUR PROCEDURES, AND WILL CONSIDER THEM
ON THE MERITS.
SOLICITATION NO. DLA 700-79-R-0757
THE SOLICITATION WAS ISSUED ON JANUARY 30, 1979, FOR 50 BEVELED SEATS
DESCRIBED BY REFERENCE TO AUTOMATIC SWITCH COMPANY PART NO. FV10-572-3.
THAT FIRM WAS THE ORIGINAL MANUFACTURER OF THE ITEM. CLAUSE C30 OF THE
SOLICITATION, ENTITLED "PRODUCTS OFFERED," REQUIRED THAT "PRODUCTS
OFFERED MUST EITHER BE IDENTICAL OR FUNCTIONALLY, PHYSICALLY,
MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH THE PRODUCT CITED IN
THE PROCUREMENT IDENTIFICATION DESCRIPTION ***." THE CLAUSE ALSO
PROVIDED THAT THE GOVERNMENT DID NOT HAVE DETAILED DRAWINGS FOR THE
REQUIREMENT AND, THEREFORE, A FIRM OFFERING AN ITEM ALLEGEDLY EQUAL IN
ALL MATERIAL RESPECTS TO THE CITED ONE HAD TO FURNISH SUFFICIENT DATA
REGARDING BOTH ITEMS TO ENABLE THE GOVERNMENT TO EVALUATE THE
ACCEPTABILITY OF THE FIRM'S PRODUCT.
METAL ART CONTENDS THAT DCSC DOES HAVE DRAWINGS FOR THE BEVELED SEATS
IN ITS POSSESSION, AND SHOULD HAVE FURNISHED THEM TO INTERESTED FIRMS SO
THAT THEY COULD MANUFACTURE AN IDENTICAL ITEM AND SUBMIT COMPETITIVE
PROPOSALS. METAL ART CONTENDS THAT THE EXISTENCE OF THE DRAWINGS IS
EVIDENCED BY THE FACT THAT DLA RECEIVED THREE OFFERS IN RESPONSE TO THE
SOLICITATION; METAL ART SUGGESTS THAT THE OFFERED PRODUCTS COULD NOT BE
EVALUATED AGAINST THE SPECIFIED PRODUCT WITHOUT SUCH DATA. METAL ART
ALSO CONTENDS THAT EVEN IF THE GOVERNMENT HAS ONLY "LIMITED" RIGHTS IN
THE DRAWINGS, IN WHICH CASE THE DRAWINGS COULD NOT BE THE BASIS FOR A
COMPETITIVE PROCUREMENT, SUCH CLASSIFICATION OF THE GOVERNMENT'S RIGHTS
WOULD BE IMPROPER. FINALLY, METAL ART ARGUES THAT IN ANY CASE DCSC
SHOULD, BY INSPECTION AND ANALYSIS, ATTEMPT TO "REVERSE ENGINEER" THE
ITEM, OR ALLOW METAL ART TO DO SO, IN ORDER THAT IT CAN BE PROCURED MORE
COMPETITIVELY.
DCSC STATES THAT ALTHOUGH IT HAS UNLIMITED RIGHTS IN DRAWINGS FOR THE
AUTOMATIC SWITCH COMPANY PART, THE DRAWINGS IT POSSESSES ARE NOT
SUITABLE FOR EITHER MANUFACTURE OR THE EVALUATION OF ALTERNATE OFFERS.
DCSC ASSERTS THAT THE DRAWINGS ARE ONLY MARGINALLY LEGIBLE; DO NOT SHOW
ALL NECESSARY DIMENSIONS; ARE 25 YEARS OLD; "HAVE NOT BEEN VERIFIED AS
BEING REPRESENTATIVE OF THE PARTS PRESENTLY BEING PROCURED;" AND ARE IN
PART OUTDATED. DCSC STATES THAT AN ATTEMPT WAS MADE TO VERIFY THE
DRAWINGS AND SUPPLY THE MISSING DIMENSIONS FROM STOCK, BUT NO STOCK WAS
AVAILABLE FOR SUCH PURPOSE. DCSC ALSO POINTS OUT THAT SINCE THE THREE
OFFERS RECEIVED WERE BASED ON THE IDENTIFIED PART NUMBER, DRAWINGS FOR
EVALUATION PURPOSES WERE NOT NECESSARY.
DCSC FURTHER STATES THAT IT DOES NOT HAVE THE RESOURCES FOR REVERSE
ENGINEERING, BUT THAT IT WOULD BE POSSIBLE TO SELL OR LOAN TO METAL ART
A SAMPLE OF THE ITEM FOR REVERSE ENGINEERING WHEN ONE IS AVAILABLE.
GOVERNMENT DID NOT HAVE DETAILED DRAWINGS FOR THE REQUIREMENT AND,
THEREFORE, A FIRM OFFERING AN ITEM ALLEGEDLY EQUAL IN ALL MATERIAL
RESPECTS TO THE CITED ONE HAD TO FURNISH SUFFICIENT DATA REGARDING BOTH
ITEMS TO ENABLE THE GOVERNMENT TO EVALUATE THE ACCEPTABILITY OF THE
FIRM'S PRODUCT.
METAL ART CONTENDS THAT DCSC DOES HAVE DRAWINGS FOR THE BEVELED SEATS
IN ITS POSSESSION, AND SHOULD HAVE FURNISHED THEM TO INTERESTED FIRMS SO
THAT THEY COULD MANUFACTURE AN IDENTICAL ITEM AND SUBMIT COMPETITIVE
PROPOSALS. METAL ART CONTENDS THAT THE EXISTENCE OF THE DRAWINGS IS
EVIDENCED BY THE FACT THAT DLA RECEIVED THREE OFFERS IN RESPONSE TO THE
SOLICITATION; METAL ART SUGGESTS THAT THE OFFERED PRODUCTS COULD NOT BE
EVALUATED AGAINST THE SPECIFIED PRODUCT WITHOUT SUCH DATA. METAL ART
ALSO CONTENDS THAT EVEN IF THE GOVERNMENT HAS ONLY "LIMITED" RIGHTS IN
THE DRAWINGS, IN WHICH CASE THE DRAWINGS COULD NOT BE THE BASIS FOR A
COMPETITIVE PROCUREMENT, SUCH CLASSIFICATION OF THE GOVERNMENT'S RIGHTS
WOULD BE IMPROPER. FINALLY, METAL ART ARGUES THAT IN ANY CASE DCSC
SHOULD, BY INSPECTION AND ANALYSIS, ATTEMPT TO "REVERSE ENGINEER" THE
ITEM, OR ALLOW METAL ART TO DO SO, IN ORDER THAT IT CAN BE PROCURED MORE
COMPETITIVELY.
DCSC STATES THAT ALTHOUGH IT HAS UNLIMITED RIGHTS IN DRAWINGS FOR THE
AUTOMATIC SWITCH COMPANY PART, THE DRAWINGS IT POSSESSES ARE NOT
SUITABLE FOR EITHER MANUFACTURE OR THE EVALUATION OF ALTERNATE OFFERS.
DCSC ASSERTS THAT THE DRAWINGS ARE ONLY MARGINALLY LEGIBLE; DO NOT SHOW
ALL NECESSARY DIMENSIONS; ARE 25 YEARS OLD; "HAVE NOT BEEN VERIFIED AS
BEING REPRESENTATIVE OF THE PARTS PRESENTLY BEING PROCURED;" AND ARE IN
PART OUTDATED. DCSC STATES THAT AN ATTEMPT WAS MADE TO VERIFY THE
DRAWINGS AND SUPPLY THE MISSING DIMENSIONS FROM STOCK, BUT NO STOCK WAS
AVAILABLE FOR SUCH PURPOSE. DCSC ALSO POINTS OUT THAT SINCE THE THREE
OFFERS RECEIVED WERE BASED ON THE IDENTIFIED PART NUMBER, DRAWINGS FOR
EVALUATION PURPOSES WERE NOT NECESSARY.
DCSC FURTHER STATES THAT IT DOES NOT HAVE THE RESOURCES FOR REVERSE
ENGINEERING, BUT THAT IT WOULD BE POSSIBLE TO SELL OR LOAN TO METAL ART
A SAMPLE OF THE ITEM FOR REVERSE ENGINEERING WHEN ONE IS AVAILABLE.
IT IS THE RESPONSIBILITY OF THE PROCURING ACTIVITY TO ESTABLISH ITS
MINIMUM NEEDS, AND WE WILL NOT DISPUTE THE JUDGMENT THAT THOSE NEEDS CAN
ONLY BE MET BY A PARTICULAR MANUFACTURER'S PART, OR THE BASIS FOR SUCH
JUDGMENT, UNLESS CLEARLY SHOWN BY THE OBJECTOR TO BE UNREASONABLE.
METAL ART, INC., B-192901, FEBRUARY 9, 1979, 79-1 CPD 91. WHERE THE
NEEDS OF THE GOVERNMENT CAN ONLY BE SATISFIED BY A SINGLE SOURCE THE
GOVERNMENT IS NOT REQUIRED TO COMPROMISE THOSE NEEDS IN ORDER TO OBTAIN
COMPETITION. JULIAN A. MCDERMOTT CORPORATION, B-191468, SEPTEMBER 21,
1978, 78-2 CPD 214.
IT IS NOT DISPUTED THAT, FOR WHATEVER REASON, DCSC LACKED DRAWINGS
THAT COULD FORM THE BASIS FOR THE MANUFACTURE OF THE REQUIREMENT. WHERE
ADEQUATE DATA IS NOT AVAILABLE TO AN AGENCY TO ENABLE IT TO CONDUCT A
MORE COMPETITIVE PROCUREMENT, WE WILL TAKE NO EXCEPTION TO AN AWARD
BASED ON THE DESIGNATED PART. SEE TECHNIARTS, B-193263, APRIL 9, 1979,
79-1 CPD 246. MOREOVER, WE HAVE NO BASIS TO QUESTION THE AGENCY'S
POSITION THAT IT LACKS THE RESOURCES TO REVERSE ENGINEER THE PART, AND
THAT IT DOES NOT HAVE ONE IN STOCK TO ALLOW THE PROTESTER TO DO SO. SEE
BIOMARINE INDUSTRIES, ET AL., B-180211, AUGUST 5, 1974, 74-2 CPD 78.
ACCORDINGLY, WE CANNOT OBJECT TO DCSC'S PRESENT PROCUREMENT METHOD.
HOWEVER, BASED ON THE RECORD WE ANTICIPATE THAT FOR PURPOSES OF FUTURE
PROCUREMENTS DCSC WILL USE A BEVELED SEAT DELIVERED UNDER THE PRESENT
CONTRACT EITHER TO UPGRADE ITS DRAWING, OR TO MAKE AVAILABLE TO
PROSPECTIVE OFFERORS FOR REVERSE ENGINEERING.
RFP NO. DLA700-79-R-0746
THIS SOLICITATION WAS ISSUED ON FEBRUARY 5, 1979, FOR 390 WEARING
RINGS FOR USE ON CENTRIFUGAL PUMPS AND MANUFACTURED UNDER ONE OF TWO
MANUFACTURER'S PART NUMBERS: WORTHINGTON PUMP CORPORATION (WORTHINGTON)
PART NO. 933806-5, AND RPS, INC., PART NO. 10046. THE SOLICITATION ALSO
CONTAINED CLAUSE C30, "PRODUCTS OFFERED."
AS IT DID WITH RESPECT TO RFP NO. -0757, METAL ART CONTENDS THAT
DRAWINGS FOR THE WEARING RINGS EXIST AT DCSC FOR PURPOSES OF A MORE OPEN
PROCUREMENT. METAL ART ALSO ARGUES THAT EVEN IF THE GOVERNMENT'S
POSITION IS THAT IT HAS ONLY LIMITED RIGHTS IN SUCH DRAWINGS, THAT
CLASSIFICATION IS IMPROPER ON THE FOLLOWING BASIS:
"*** AT LEAST ONE OTHER MANUFACTURER (RPS, INC.) HAS SUPPLIED A
PRODUCT WHICH IS AN ACCEPTABLE ALTERNATIVE TO THE WORTHINGTON
CORPORATION PRODUCT. ANY COMPETITIVE ADVANTAGE WHICH WORTHINGTON
CORPORATION OR RPS, INC., ENJOYED OVER THE OTHER BY VIRTUE OF HAVING
LIMITED RIGHTS IN THE TECHNICAL DATA HAS BEEN LESSENED BECAUSE OF THE
ACCEPTABILITY OF EITHER MANUFACTURER'S PART."
METAL ART FURTHER ARGUES THAT, IN ANY EVENT, IN VIEW OF THE
UNDERLYING PHILOSOPHY OF THE PROCUREMENT REGULATIONS TO ENCOURAGE AND
FOSTER COMPETITION THE GOVERNMENT'S INTEREST WOULD BEST BE SERVED BY
USING DATA THAT IT EVEN HAD ONLY LIMITED RIGHTS IN TO PROCURE THE
WEARING RINGS ON A MORE COMPETITIVE BASIS. FINALLY, THE PROTESTER AGAIN
SUGGESTS THAT DCSC REVERSE ENGINEER THE ITEM IF NECESSARY, OR AFFORD
METAL ART THE OPPORTUNITY TO DO SO.
DCSC STATES THAT THE REASON FOR DEFINING ITS REQUIREMENTS IN TERMS OF
THE TWO MANUFACTURERS' PART NUMBERS IS THAT THE GOVERNMENT HAS ONLY
LIMITED RIGHTS IN THE ONLY TWO DRAWINGS IN ITS POSSESSION UPON WHICH A
MORE COMPETITIVE PROCUREMENT COULD BE BASED. ALTHOUGH THE DRAWINGS CAN
BE USED TO COMPARE ALTERNATE PRODUCTS OFFERED, THEY CANNOT BE RELEASED
WITHOUT THE PERMISSION OF THE PARTIES THAT FURNISHED THEM. DEFENSE
ACQUISITION REGULATION (DAR) SEC. 9-201(C) (1976 ED.). DCSC POINTS OUT
THAT WHILE IT DOES HAVE UNRESTRICTED PARTS AND MATERIALS LISTS AND
IDENTIFICATION DRAWINGS FOR THE WEARING RINGS, NONE OF THESE DRAWINGS
ARE SUFFICIENT FOR A COMPETITIVE ACQUISITION. HOWEVER, IN RESPONSE TO
METAL ART'S PROTEST, DCSC HAS REQUESTED PERMISSION FROM WORTHINGTON AND
RPS, INC. TO RELEASE THEIR DRAWINGS, BUT THE FIRMS HAVE DECLINED TO
GRANT IT. THUS, ALTHOUGH IT WAS UNSUCCESSFUL, DCSC APPARENTLY MADE A
GOOD FAITH EFFORT TO OBTAIN THE NECESSARY DRAWINGS ON AN UNRESTRICTED
BASIS. UNDER THE CIRCUMSTANCES THE GOVERNMENT IS THEREFORE AUTHORIZED
BY DAR SEC. 1-313(C) TO PROCURE THE ITEMS FROM SOURCES THAT HAVE
SATISFACTORILY MANUFACTURED OR FURNISHED THEM IN THE PAST.
WITH RESPECT TO THE ABOVE, THE FACT THAT RPS, INC., CAN FURNISH AN
APPROVED ALTERNATE DOES NOT CHANGE THE NATURE OF THE GOVERNMENT'S
RIGHTS, SINCE THE RECORD SHOWS THAT IN A PRIOR PROCUREMENT WORTHINGTON'S
DRAWINGS IN DCSC'S POSSESSION WERE USED ONLY TO APPROVE RPS, INC.'S
PART.
REGARDING METAL ART'S SUGGESTION THAT THE REQUIREMENT BE REVERSE
ENGINEERED, DAR SEC. 1-304.2(B) PROVIDES THAT WHERE THERE IS NO OTHER
WAY FOR THE GOVERNMENT TO COMPETITIVELY PROCURE AN ITEM, REVERSE
ENGINEERING MAY BE USED BUT ONLY IF SIGNIFICANT COST SAVINGS CAN BE
REASONABLY DEMONSTRATED AND THE ACTION IS APPROVED BY THE HEAD OF THE
PROCURING ACTIVITY. IT IS DCSC'S POSITION THAT WHERE, AS HERE, THERE
ARE TWO INDEPENDENT SOURCES FOR THE ITEM AND COMPETITION THEREFORE IS
EVIDENT, THERE IS NO REASON TO BELIEVE THAT REVERSE ENGINEERING, IF
POSSIBLE, WOULD SIGNIFICANTLY REDUCE COSTS. SINCE WE HAVE NO BASIS TO
QUESTION THAT POSITION, THIS ASPECT OF THE PROTEST WILL NOT BE
CONSIDERED FURTHER. METAL ART, INC., SUPRA.
THERE IS OF COURSE NOTHING TO PREVENT METAL ART FROM SECURING EITHER
WORTHINGTON'S OR RPS'S WEARING RING FOR THE PURPOSE OF REVERSE
ENGINEERING THEM AND THEN OFFER TO SUPPLY THAT ITEM FOR EVALUATION UNDER
CLAUSE C30 IN ANY FUTURE PROCUREMENT.
THE PROTESTS ARE DENIED.
B-194790, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PRIOR DECISION IS AFFIRMED BECAUSE PROTESTER HAS NOT SHOWN THAT
DECISION DISMISSING PROTEST AS UNTIMELY WAS BASED ON ERROR OF FACT OR
LAW.
SIERRA RESEARCH CORPORATION - RECONSIDERATION:
SIERRA RESEARCH CORPORATION (SIERRA) REQUESTS RECONSIDERATION OF OUR
DECISION IN SIERRA RESEARCH CORPORATION, B-194790, JUNE 6, 1979, 79-1
CPD ___, REGARDING ALLEGED DEFECTS IN SOLICITATION N66032-78-R-0004,
ISSUED BY THE DEPARTMENT OF THE NAVY, AUTOMATIC DATA PROCESSING
SELECTION OFFICE (NAVY). OUR DECISION CONCLUDED THAT SIERRA'S PROTEST
WAS UNTIMELY BECAUSE AFTER IT FILED AN INITIAL PROTEST ON JANUARY 9,
1979 WITH THE NAVY, IT DID NOT FILE A SUBSEQUENT PROTEST WITH OUR OFFICE
UNTIL MAY 4, MORE THAN 10 DAYS AFTER THE CLOSING DATE FOR RECEIPT OF
INITIAL PROPOSALS.
UNDER OUR BID PROCEDURES, WHEN A PROTEST IS FILED INITIALLY WITH A
CONTRACTING AGENCY, A SUBSEQUENT PROTEST TO GAO MUST BE FILED WITHIN 10
DAYS AFTER THE PROTESTER HAS ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF INITIAL
ADVERSE AGENCY ACTION ON ITS PROTEST. 4 C.F.R. SEC. 20.2(A) (1979). AS
OUR PRIOR DECISION NOTED, EXPIRATION OF THE TIME FOR RECEIPT OF INITIAL
PROPOSALS WITHOUT CORRECTIVE ACTION BEING TAKEN IN RESPONSE TO A PROTEST
IS SUFFICIENT TO PLACE A PROTESTER ON NOTICE THAT HIS OBJECTIONS TO A
SOLICITATION HAVE BEEN REJECTED. GENERAL LEASING CORPORATION -
RECONSIDERATION, B-193527, MARCH 9, 1979, 79-1 CPD 170.
NEVERTHELESS, SIERRA SUGGESTS THAT IT DID NOT HAVE NOTICE OF INITIAL
ADVERSE AGENCY ACTION PRIOR TO APRIL 20. POINTING OUT THAT THE NAVY
ACKNOWLEDGED RECEIPT OF THE JANUARY 9 PROTEST BY ADVISING SIERRA THAT
THE SUGGESTED "REVISIONS ARE CURRENTLY BEING REVIEWED," SIERRA ARGUES
THAT IT WAS ENTITLED TO ASSUME THAT THE DISPUTED ISSUES WERE NEGOTIABLE.
ACCORDING TO SIERRA IT ONLY LEARNED OTHERWISE WHEN THE NAVY REQUESTED
THAT SIERRA CORRECT DEFICIENCIES IN ITS PROPOSAL.
WE DO NOT AGREE. THE NAVY'S JANUARY 10 ACKNOWLEDGMENT LETTER STATED
THAT REVISIONS WERE BEING CONSIDERED. SIERRA WAS NOT TOLD THAT
REVISIONS WOULD BE MADE. MOREOVER, THE JANUARY 10 LETTER EXTENDED THE
CLOSING DATE FOR RECEIPT OF PROPOSALS BY TWO MONTHS, FROM FEBRUARY 2 TO
APRIL 2, 1979, SUGGESTING THAT THE NAVY PLANNED TO REVIEW THE
SOLICITATION DEFECT BEFORE THE CLOSING DATE. WHEN THE NEW CLOSING DATE
FOR RECEIPT OF PROPOSALS ARRIVED NEARLY THREE MONTHS LATER WITHOUT THE
NAVY HAVING CORRECTED THE ALLEGED DEFECTS, SIERRA KNEW OR SHOULD HAVE
KNOWN THAT THE SOLICITATION WOULD NOT BE AMENDED. THIS, IN OUR OPINION,
WAS SUFFICIENT TO PLACE SIERRA ON CONSTRUCTIVE NOTICE OF ADVERSE AGENCY
ACTION ON ITS PROTEST.
CONSEQUENTLY, WE FIND SIERRA HAS NOT SHOWN THAT OUR PRIOR DECISION
WAS BASED ON ANY ERROR OF FACT OR LAW, AND THAT DECISION IS AFFIRMED.
B-195020, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
AN EMPLOYEE OF THE GOVERNMENT WAS THE INCUMBENT OF A POSITION WHICH
WAS REGRADED UPWARD INCIDENT TO AN AGENCY POSITION RECLASSIFICATION
AUDIT. SHE WAS RETAINED IN THAT POSITION BEYOND THE REASONABLE TIME
PERIOD DEFINED IN 53 COMP. GEN. 216 (1973). WHILE AN AGENCY MUST WITHIN
A REASONABLE TIME, PROMOTE AN INDIVIDUAL, IF QUALIFIED, OR REMOVE HIM
FROM THE POSITION, WHERE THE INDIVIDUAL IS NOT QUALIFIED FOR PROMOTION
TEMPORARY RETENTION BEYOND THE TIME PERIOD ALONE DOES NOT SERVE AS A
BASIS FOR RETROACTIVE TEMPORARY PROMOTION AND BACKPAY.
MS. CATHY G. PITTS:
THIS ACTION IS IN RESPONSE TO CORRESPONDENCE REQUESTING REVIEW OF THE
CLAIM OF MS. CATHY G. PITTS, FOR RETROACTIVE TEMPORARY PROMOTION AND
BACKPAY FOR THE PERIOD JUNE 1, 1977, TO DECEMBER 31, 1977, INCIDENT TO
HER EMPLOYMENT WITH THE DEPARTMENT OF THE ARMY.
THIS MATTER WAS THE SUBJECT OF A SETTLEMENT BY OUR CLAIMS DIVISION
DATED APRIL 10, 1979, WHICH DISALLOWED HER CLAIM FOR THE REASON THAT SHE
WAS NOT QUALIFIED FOR PROMOTION TO THE POSITION IN QUESTION.
THE FILE SHOWS THAT MS. PITTS WAS EMPLOYED IN THE POSITION OF SUPPLY
CLERK, GRADE GS-3. ON AUGUST 23, 1977, AS A RESULT OF A POSITION
CLASSIFICATION SURVEY, THE POSITION WHICH SHE OCCUPIED WAS RECLASSIFIED
TO THE GS-5 LEVEL. IN OCTOBER 1977 THE POSITION WAS ANNOUNCED UNDER
EXISTING COMPETITIVE PROCEDURES. MS. PITTS APPLIED FOR THE POSITION,
BUT WAS NOT RATED AS ONE OF THE QUALIFIED CANDIDATES DUE TO HER LACK OF
REQUIRED SPECIALIZED EXPERIENCE.
MS. PITTS WAS THE INCUMBENT PRIOR TO RECLASSIFICATION AND SHE
CONTINUED PERFORMING THE DUTIES OF THE POSITION UNTIL JANUARY 1, 1978,
WHEN SHE WAS OFFERED AND ACCEPTED REASSIGNMENT TO ANOTHER POSITION AS
SUPPLY CLERK, GS-3. THE RECORD IS SILENT AS TO WHY MS. PITTS WAS NOT
REASSIGNED TIMELY NOR IS THERE ANY INDICATION OF A CHANGE IN PROCEDURE
DESIGNED TO PRECLUDE REOCCURRENCE OF SUCH MISASSIGNMENTS. THEREAFTER
SHE MADE CLAIM FOR THE DIFFERENCE IN COMPENSATION BECAUSE SHE PERFORMED
THE DUTIES OF THE HIGHER GRADE POSITION, BUT HER CLAIM WAS
ADMINISTRATIVELY DISALLOWED. IN RESPONSE, MS. PITTS CONTENDS THAT SHE
IS ENTITLED TO A RETROACTIVE TEMPORARY PROMOTION AND BACKPAY SINCE SHE
WAS ALLOWED TO CONTINUE PERFORMING THE DUTIES OF THAT POSITION AFTER
RECLASSIFICATION AND THAT HER PERFORMANCE WAS RATED SATISFACTORY.
THE GENERAL RULE IN CASES OF THIS NATURE IS THAT AN EMPLOYEE OF THE
GOVERNMENT IS ENTITLED ONLY TO THE SALARY OF THE POSITION TO WHICH
ACTUALLY APPOINTED, REGARDLESS OF THE DUTIES ACTUALLY PERFORMED. WHEN
AN EMPLOYEE PERFORMS DUTIES NORMALLY PERFORMED BY ONE IN A GRADE LEVEL
HIGHER THAN THE ONE HELD, NO ENTITLEMENT TO THE SALARY OF THE HIGHER
LEVEL EXISTS UNTIL SUCH TIME AS THE INDIVIDUAL IS ACTUALLY PROMOTED TO
THAT LEVEL. SEE UNITED STATES V. MCLEAN, 95 U.S. 750 (1977); MOREY V.
UNITED STATES, 35 CT. CL. 603 (1900); JACKSON V. UNITED STATES, 42 CT.
CL. 39 (1906); DIANISH, ET AL. V. UNITED STATES, 183 CT. CL. 702
(1968); AND 52 COMP. GEN. 631 (1973).
THERE ARE, HOWEVER, SOME EXCEPTIONS TO THE GENERAL RULE, ONE OF WHICH
WAS THE SUBJECT OF DECISION 53 COMP. GEN. 216 (1973). IN THAT CASE AN
EMPLOYEE WHO WAS THE INCUMBENT OF A POSITION RECLASSIFIED FROM A GRADE
GS-12 TO A GRADE GS-13 LEVEL, MADE CLAIM FOR RETROACTIVE PROMOTION AND
SALARY DIFFERENTIAL BETWEEN THOSE GRADES. THE RECORD SHOWED THAT HE WAS
QUALIFIED FOR THE PROMOTION, BUT THE ADMINISTRATIVE OFFICE FAILED TO
PROMOTE HIM TIMELY. WE POINTED OUT THAT WHEN A POSITION HAS BEEN
RECLASSIFIED TO A HIGHER GRADE AN AGENCY MUST, WITHIN A REASONABLE TIME,
EITHER PROMOTE THE INCUMBENT, IF QUALIFIED, OR REMOVE HIM. IT WAS RULED
THAT REASONABLE TIME WAS TO BE CONSIDERED AS EXPIRING AT THE BEGINNING
OF THE FOURTH PAY PERIOD FOLLOWING THE DATE OF THE RECLASSIFICATION
ACTION.
THE QUESTION IN THE PRESENT CASE INVOLVES WHETHER MS. PITTS WAS
QUALIFIED FOR PROMOTION. UNDER THE THEN CIVIL SERVICE REGULATIONS, AN
INDIVIDUAL, IN ORDER TO QUALIFY FOR ADVANCEMENT TO SUPPLY CLERK, GS-4/5,
MUST HAVE 1 YEAR OF GENERAL EXPERIENCE AND 2 YEARS OF SPECIAL EXPERIENCE
OR IN LIEU OF A PORTION THEREOF, HAVE ACHIEVED A CERTAIN LEVEL OF
EDUCATION. UNDER THIS CRITERIA, IT WAS ADMINISTRATIVELY DETERMINED THAT
MS. PITTS DID NOT BECOME QUALIFIED FOR PROMOTION TO GRADE GS-5 UNTIL MAY
1978, 5 MONTHS AFTER SHE WAS REASSIGNED FROM THE POSITION IN QUESTION.
SINCE MS. PITTS COULD NOT BE PROMOTED AT ANY TIME BETWEEN AUGUST 23,
1977, AND DECEMBER 31, 1977, THE FACT THAT SHE WAS NOT REASSIGNED FROM
THAT POSITION UNTIL JANUARY 1, 1978, WELL AFTER THE CLOSE OF THE
BEGINNING OF THE FOURTH PAY PERIOD FOLLOWING RECLASSIFICATION OF THE
POSITION, DOES NOT SERVE AS A BASIS FOR ALLOWING HER CLAIM.
ACCORDINGLY, THE ACTION TAKEN BY OUR CLAIMS DIVISION IS SUSTAINED.
B-195036, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION CANNOT USE
APPROPRIATED FUNDS TO PURCHASE BUSINESS CARDS, SINCE SUCH CARDS ARE
PERSONAL IN NATURE AND NO SPECIFIC STATUTORY AUTHORITY ALLOWS NHTSA TO
PURCHASE THEM.
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION - BUSINESS CARDS:
IN A LETTER DATED MAY 2, 1979, MR. LLOYD OF REGION VIII OF THE
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION (NHTSA) REQUESTED OUR
OPINION AS TO THE PROPRIETY OF PURCHASING BUSINESS CARDS WITH
APPROPRIATED FUNDS. HE INFORMED US THAT ONE OF THE AGENCY'S EMPLOYEES
HAS EXTENSIVE CONTACT WITH PUBLIC, GOVERNMENT, AND BUSINESS OFFICIALS
WHO FREQUENTLY ASKED HIM TO LEAVE BUSINESS CARDS WITH HIS NAME, OFFICE
ADDRESS, AND TELEPHONE NUMBER. THE EMPLOYEE PURCHASED CARDS AT HIS OWN
EXPENSE AND SEEKS REIMBURSEMENT FOR THE COSTS. NHTSA HAS SO FAR
DISALLOWED REIMBURSEMENT.
THE LONG STANDING RULE HAS BEEN THAT THE "COST OF OFFICIAL CALLING
CARDS CONSTITUTES A PERSONAL RATHER THAN AN OFFICIAL EXPENSE OF THE
EMPLOYEE OR OFFICER FOR WHOSE USE THEY ARE PROCURED AND THAT SUCH COSTS
ARE NOT CHARGEABLE UNDER APPROPRIATED MONEY IN THE ABSENCE OF SPECIFIC
STATUTORY AUTHORITY THEREOF." 12 COMP. GEN. 565 (1933). THE EXPENSE IS
CONSIDERED PERSONAL IN NATURE, EVEN THOUGH IT IS INCURRED IN CONNECTION
WITH AN EMPLOYEE'S DUTIES. 41 COMP. GEN. 529 (1962).
FURTHER, UNDER 44 U.S.C. SEC. 1102(A) (1976), PRINTING MAY NOT BE
DONE UNLESS IT IS AUTHORIZED BY LAW AND NECESSARY TO THE PUBLIC
BUSINESS. THE GOVERNMENT PRINTING AND BINDING REGULATIONS, ISSUED IN
APRIL 1977, PARAGRAPH 20, STATE THAT:
"PRINTING OR ENGRAVING OF CALLING OR GREETING CARDS IS CONSIDERED TO
BE PERSONAL RATHER THAN OFFICIAL AND SHALL NOT BE DONE AT GOVERNMENT
EXPENSE."
THEREFORE, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, NHTSA MAY
NOT USE ITS APPROPRIATIONS TO PROCURE, OR TO REIMBURSE EMPLOYEES FOR
THEIR PERSONAL PURCHASES OF BUSINESS CARDS. WE FIND NO SPECIFIC
STATUTORY AUTHORIZATION FOR THE PRINTING OF BUSINESS CARDS FOR NHTSA.
NEITHER DO NHTSA'S APPROPRIATIONS FOR 1979 CONTAIN SUCH AUTHORIZATION.
ACT OF AUGUST 4, 1978, PUB. L. NO. 95-335, 92 STAT. 441.
ACCORDINGLY, NHTSA SHOULD CONTINUE DISALLOWING REIMBURSEMENT WITH
APPROPRIATED FUNDS FOR THE COSTS OF BUSINESS CARDS WHICH ITS EMPLOYEES
MAY CHOOSE TO OBTAIN FOR THEIR USE, EVEN IF THAT USE IS IN CONNECTION
WITH OFFICIAL AGENCY BUSINESS.
B-195123, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. SUPPLIER, WHO FURNISHED CARPETS AND DRAPES UNDER PURCHASE ORDERS
WHICH EXCEEDED GOVERNMENT EMPLOYEE'S CONTRACTUAL AUTHORITY, MAY BE PAID
ON QUANTUM MERUIT/QUANTUM VALEBAT BASIS, SINCE GOVERNMENT RECEIVED
BENEFIT AND ACTION HAS BEEN RATIFIED BY AUTHORIZED CONTRACTING OFFICIAL.
HOWEVER, PAYMENT IS LIMITED TO AMOUNT FOR WHICH AUTHORIZED CONTRACTING
OFFICER COULD HAVE CONTRACTED UNDER MANDATORY FEDERAL SUPPLY SCHEDULE
CONTRACT.
2. INTEREST CANNOT BE AUTHORIZED WHERE NO LAW REQUIRES PAYMENT AND
FIRST NOTICE OF INTEREST CHARGE APPEARS ON CLAIMANT'S INVOICES.
MATHEWS FURNITURE COMPANY:
THE BUREAU OF INDIAN AFFAIRS (BIA), UNITED STATES DEPARTMENT OF THE
INTERIOR, HAS REQUESTED A DECISION REGARDING THE PROPRIETY OF PAYING THE
INVOICES SUBMITTED BY MATHEWS FURNITURE COMPANY (MATHEWS) FOR CARPETING
AND DRAPES AT THE PUEBLO OF ZUNI.
BETWEEN OCTOBER 18, 1977, AND NOVEMBER 22, 1977, 18 SEPARATE PURCHASE
ORDERS WERE ISSUED BY BIA'S FIELD REPRESENTATIVE TO MATHEWS. THE FIELD
REPRESENTATIVE'S PROCUREMENT AUTHORITY WAS LIMITED TO $500. NINE
PURCHASE ORDERS WERE ISSUED TO MATHEWS ON OCTOBER 18, 1977, SEVEN ON
NOVEMBER 7, 1977, AND TWO ON NOVEMBER 22, 1977. WHILE NONE OF THE
INDIVIDUAL PURCHASE ORDERS WERE FOR MORE THAN $500, THE TOTAL OF THE 18
ORDERS WAS $8,064.04. THERE WAS A MANDATORY GENERAL SERVICES
ADMINISTRATION (GSA) FEDERAL SUPPLY SCHEDULE (FSS) CONTRACT IN EXISTENCE
AT THE TIME FROM WHICH THE CARPETS SHOULD HAVE BEEN PURCHASED. USING
THE GSA FSS CONTRACT, THE HIGHEST POSSIBLE COST FOR CARPET WOULD HAVE
BEEN $6,473.13, THOUGH NOT FOR THE EXACT TYPE CARPET SUPPLIED BY
MATHEWS. HOWEVER, BIA HAS GIVEN NO JUSTIFICATION AS TO WHY THE CARPET
AVAILABLE UNDER THE FSS CONTRACT WOULD NOT HAVE BEEN SUITABLE FOR ITS
NEEDS.
IT IS CLEAR FROM THE RECORD THAT THE PURCHASES FROM MATHEWS WERE
IMPROPER BECAUSE THE FIELD REPRESENTATIVE EXCEEDED HIS AUTHORITY BY
SPLITTING THE REQUIREMENTS AMONG THE SEVERAL PURCHASE ORDERS AND
IGNORING THE FSS CONTRACT.
ALTHOUGH THE UNITED STATES CANNOT BE BOUND BEYOND THE ACTUAL
AUTHORITY CONFERRED UPON ITS AGENTS BY STATUTE OR REGULATION, SEE UNITED
STATES V. CRANCE, 341 F.2D 161, 166 (1965), THE COURTS AND OUR OFFICE
HAVE RECOGNIZED THAT IN APPROPRIATE CIRCUMSTANCES PAYMENT MAY BE MADE
FOR SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF
WORK OR LABOR) OR FOR GOODS FURNISHED ON A QUANTUM VALEBAT BASIS (THE
REASONABLE VALUE OF GOODS SOLD AND DELIVERED). 40 COMP. GEN. 447, 451
(1961). RECOGNITION OF A RIGHT TO PAYMENT ON THIS BASIS, HOWEVER,
REQUIRES A SHOWING (1) THAT THE GOVERNMENT RECEIVED A BENEFIT AND (2)
THAT THE UNAUTHORIZED ACTION HAS BEEN EXPRESSLY OR IMPLIEDLY RATIFIED BY
AUTHORIZED CONTRACTING OFFICIALS OF THE GOVERNMENT. DEFENSE MAPPING
AGENCY, B-183915, JUNE 25, 1975, 75-2 CPD 15; THE SINGER COMPANY,
B-183878, JUNE 20, 1975, 75-1 CPD 406.
HERE THE GOVERNMENT RECEIVED A BENEFIT FROM THE PERFORMANCE BY
MATHEWS AND AN IMPLIED RATIFICATION MAY BE INFERRED FROM THE AUTHORIZED
CONTRACTING OFFICER'S NEGOTIATIONS WITH MATHEWS SEEKING A SETTLEMENT.
ANHEUSER-BUSCH, INC. B-192739, SEPTEMBER 29, 1978, 78-2 CPD 246.
ALTHOUGH ORDINARILY IN A QUANTUM MERUIT/QUANTUM VALEBAT SITUATION
PAYMENT WOULD BE THE REASONABLE VALUE, WHERE THE ITEM COULD HAVE BEEN
CONTRACTED UNDER THE FSS CONTRACT, PAYMENT IS RESTRICTED TO THE FSS
AMOUNT. 34 COMP. GEN. (1954) AND 30 ID. 23 (1950). SINCE FEDERAL
AGENCIES ARE REQUIRED TO PROCURE FROM THE FSS CONTRACTS, ANY AMOUNT OVER
THE FSS PRICE WOULD BE UNAUTHORIZED AND NOT FOR PAYMENT. 6 COMP. GEN.
824 (1927). THUS, NO CONTRACTING OFFICER HAS THE AUTHORITY TO PROCURE
AT OR RATIFY A PRICE HIGHER THAN THE FSS PRICE WHERE NO NEED HAS BEEN
ESTABLISHED FOR AN ITEM OTHER THAN THAT IN THE FSS SCHEDULE. THEREFORE,
MATHEWS MAY BE PAID $6,473.13 FOR THE CARPETS PLUS $650.45 FOR THE
DRAPES FOR A TOTAL OF $7,123.58.
REGARDING THE PAYMENT OF INTEREST ON MATHEWS' CLAIM, IT IS WELL
SETTLED THAT THE PAYMENT OF INTEREST BY THE GOVERNMENT ON ITS UNPAID
ACCOUNTS MAY NOT BE MADE EXCEPT WHERE IT IS STIPULATED BY CONTRACT OR IS
PROVIDED BY THE LAWS OF THE UNITED STATES. MR. LORENZO MOFFETT-LEASE
TERMINATION, B-170539, JULY 30, 1975, 75-2 CPD 64. NO LAW REQUIRES
INTEREST TO BE PAID IN THE CIRCUMSTANCES PRESENT HERE AND THE FIRST
NOTICE OF AN INTEREST CHARGE APPEARS ON MATHEWS' INVOICES. THEREFORE,
THE PAYMENT OF INTEREST CANNOT BE AUTHORIZED. MORRIS TILE DISTRIBUTORS,
INC., B-183628, MAY 8, 1975, 75-1 CPD 299.
B-195260, JUL 11, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. DIRECTOR, FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) MAY ENTER
INTO CONTRACT FOR RENTAL OF SPACE IN DISTRICT OF COLUMBIA PURSUANT TO
SECTION 21(B)(3) OF FEDERAL FIRE PREVENTION AND CONTROL ACT OF 1974, AS
AMENDED, (ACT), IN ORDER TO PROVIDE SPACE FOR ACTIVITIES FALLING UNDER
PURVIEW OF ACT, NOTWITHSTANDING PROHIBITION IN 40 U.S.C. SEC. 34, SINCE
ACT AUTHORIZES ADMINISTRATOR TO LEASE PROPERTY "WHEREEVER SITUATED."
2. FEMA MAY ENTER INTO MULTI-YEAR LEASE FOR SPACE TO HOUSE FIRE
PREVENTION AND CONTROL ACTIVITIES SINCE FUNDS PROVIDED TO CARRY OUT
PURPOSES OF ACT ARE APPROPRIATED WITHOUT FISCAL YEAR LIMITATION.
HOWEVER, TOTAL AMOUNT OF LEASE PAYMENTS MUST BE OBLIGATED AT TIME
CONTRACT IS MADE, ALTHOUGH PAYMENTS MAY BE MADE ON A MONTHLY BASIS.
FEDERAL EMERGENCY MANAGEMENT AGENCY - AUTHORITY TO RENT SPACE IN
DISTRICT OF COLUMBIA:
THE ACTING DIRECTOR, FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) HAS
RAISED THE FOLLOWING QUESTIONS FOR OUR DECISION:
1. WHETHER THE FEMA CAN ENTER INTO A CONTRACT FOR THE RENTAL OF
SPACE IN THE DISTRICT OF COLUMBIA PURSUANT TO THE LEASING AUTHORITY IN
SECTION 21(B)(3) OF THE FEDERAL FIRE PREVENTION AND CONTROL ACT OF 1974,
AS AMENDED (FIRE PREVENTION ACT), 15 U.S.C. SEC. 2218(B)(3) (1976),
NOTWITHSTANDING THE PROHIBITION IN 40 U.S.C. SEC. 34 (1976);
2. IF SO, WHETHER THE LEASE MAY BE FOR A MULTI-YEAR PERIOD; AND
3. WHETHER (IF THE LEASE IS FOR A MULTI-YEAR PERIOD) THE FEMA SHOULD
OBLIGATE FUNDS ON A MONTHLY BASIS, IN VIEW OF SECTIONS 21 AND 25 OF
OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-34 ON BUDGET
EXECUTION.
FOR REASONS WHICH ARE DISCUSSED BELOW, WE CONCLUDE THAT FEMA MAY USE
"NO-YEAR" APPROPRIATIONS TO ENTER INTO A MULTI-YEAR LEASE FOR THE RENTAL
OF SPACE, WHETHER SITUATED IN THE DISTRICT OF COLUMBIA OR NOT, BUT ONLY
FOR SPACE NECESSARY TO CARRY OUT ITS RESPONSIBILITIES UNDER THE FIRE
PREVENTION ACT. OBLIGATIONS FOR THE ENTIRE AMOUNT OF RENT DUE UNDER THE
AGREEMENT MUST BE RECORDED AT THE TIME THE AGREEMENT IS SIGNED.
THE FEDERAL EMERGENCY MANAGEMENT AGENCY WAS ESTABLISHED, EFFECTIVE
APRIL 1, 1979, BY EXECUTIVE ORDER NO. 12127, MARCH 31, 1979, AND
REORGANIZATION PLAN NUMBER 3 OF 1978, 43 FED. REG. 41943, SEPTEMBER 19,
1978. TRANSFERRED, AMONG OTHERS, WERE FUNCTIONS WHICH WERE VESTED IN
THE SECRETARY OF COMMERCE, THE ADMINISTRATOR AND DEPUTY ADMINISTRATOR OF
THE NATIONAL FIRE PREVENTION AND CONTROL ADMINISTRATION (U.S. FIRE
ADMINISTRATION), AND THE SUPERINTENDENT OF THE NATIONAL ACADEMY FOR FIRE
PREVENTION AND CONTROL.
UNDER SECTION 21(B)(3) OF THE FIRE PREVENTION ACT, 15 U.S.C. SEC.
2218(B)(3), SUPRA, THE ADMINISTRATOR OF THE U.S. FIRE ADMINISTRATION
(AND NOW FEMA) WAS GRANTED THE FOLLOWING POWER:
"(B) POWERS. - WITH RESPECT TO THIS ACT, THE ADMINISTRATOR IS
AUTHORIZED TO -
"(3) PURCHASE, LEASE, OR OTHERWISE ACQUIRE, OWN, HOLD, IMPROVE, USE,
OR DEAL IN AND WITH ANY PROPERTY (REAL, PERSONAL, OR MIXED, TANGIBLE OR
INTANGIBLE), OR INTEREST IN PROPERTY, WHEREVER SITUATED; AND SELL,
CONVEY, MORTGAGE, PLEDGE, LEASE, EXCHANGE, OR OTHERWISE DISPOSE OF
PROPERTY AND ASSETS; ***"
THE FIRST QUESTION IS WHETHER THE AUTHORITY GIVEN THE ADMINISTRATOR
UNDER 15 U.S.C. SEC. 2218(B)(3), SUPRA, TO LEASE SPACE "WHEREVER
SITUATED" IS SUFFICIENTLY SPECIFIC SO AS TO OVERCOME THE PROHIBITION
AGAINST THE RENTAL OF SPACE IN THE DISTRICT OF COLUMBIA IN THE ACT OF
MARCH 3, 1877, 40 U.S.C. SEC. 34 (1976). THE LATTER ACT PROVIDES:
"NO CONTRACT SHALL BE MADE FOR THE RENT OF ANY BUILDING, OR PART OF
ANY BUILDING, TO BE USED FOR THE PURPOSES OF THE GOVERNMENT IN THE
DISTRICT OF COLUMBIA, UNTIL AN APPROPRIATION THEREFOR SHALL HAVE BEEN
MADE IN TERMS BY CONGRESS, AND THIS CLAUSE SHALL BE REGARDED AS NOTICE
TO ALL CONTRACTORS OR LESSORS OF ANY SUCH BUILDING OR PART OF ANY
BUILDING."
THIS OFFICE HAS GENERALLY HELD THAT IN THE ABSENCE OF EXPRESS
AUTHORITY FOR THE RENTAL OF SPACE IN THE DISTRICT OF COLUMBIA, PAYMENT
FOR THE USE OF SUCH SPACE FROM APPROPRIATED FUNDS IS PROHIBITED UNLESS
THE GENERAL SERVICES ADMINISTRATION (GSA) ARRANGES FOR THE SPACE. THIS
IS IN ACCORD WITH OUR HOLDING THAT THE FEDERAL PROPERTY AND
ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. SEC.
490(H)(1) (1976) AUTHORIZES GSA TO ENTER INTO LEASING AGREEMENTS WITHIN
THE DISTRICT OF COLUMBIA FOR THE BENEFIT AND ACCOMODATION OF FEDERAL
AGENCIES AND THAT IF THE ADMINISTRATOR OF GSA AUTHORIZES THE FORMATION
OF A RENTAL AGREEMENT FOR SPACE IN THE DISTRICT OF COLUMBIA, THE
STATUTORY REQUIREMENT OF 40 U.S.C. SEC. 34, SUPRA, IS SATISFIED. SEE
B-159633, SEPTEMBER 10, 1974; B-159633, MAY 20, 1974; AND 55 COMP.
GEN. 1055, 1057 (1975).
THE ACTING DIRECTOR CONTENDS THAT EVEN IF WE FIND THAT FEMA LACKS
INDEPENDENT LEASING AUTHORITY IN THE DISTRICT OF COLUMBIA, A LETTER FROM
THE ADMINISTRATOR OF GSA ATTACHED TO THE SUBMISSION "SERVES AS HIS (THE
ADMINISTRATOR'S) AUTHORIZATION FOR THIS AGENCY'S ENTERING INTO SUCH A
LEASE." WE DO NOT AGREE THAT THE REFERENCED LETTER CONSTITUTES A
DELEGATION OF GSA'S AUTHORITY. HOWEVER, THE LETTER DOES APPEAR TO
RECOGNIZE THAT THE DIRECTOR OF FEMA MAY "ACQUIRE ITS OWN SPACE" BUT ONLY
FOR ACTIVITIES THAT FALL UNDER THE PURVIEW OF THE FIRE PREVENTION ACT.
ANY OTHER SPACE NEEDS, ACCORDING TO THE ADMINISTRATOR, MUST BE SATISFIED
BY GSA.
WE AGREE WITH THE ADMINISTRATOR'S ASSESSMENT OF FEMA'S AUTHORITY. IT
IS HARD TO IMAGINE ANY LANGUAGE MORE SPECIFIC THAN AN EXPRESS GRANT OF
AUTHORITY TO LEASE PROPERTY "WHEREVER SITUATED." ALTHOUGH THE
LEGISLATIVE HISTORY OF THE FIRE PREVENTION ACT IS TOTALLY SILENT ABOUT
THE REASONS FOR USING THE TWO QUOTED WORDS, ANY NORMAL, UNSTRAINED
READING OF THEM IN CONTEXT LEADS TO THE CONCLUSION THAT THE FEMA MAY
LEASE SPACE FOR FIRE PREVENTION ACT PURPOSES, WHETHER SUCH SPACE IS
LOCATED IN THE DISTRICT OF COLUMBIA OR ANYWHERE ELSE.
IT IS TRUE THAT THIS EXPRESS GRANT OF AUTHORITY IS NOT LOCATED IN AN
APPLICABLE APPROPRIATION ACT. HOWEVER, TO HOLD THAT THE PROHIBITION IN
40 U.S.C. SEC. 34 MUST THEREFORE STILL APPLY TO FEMA IS TO DEPRIVE THE
WORDS "WHEREVER SITUATED" IN FEMA'S ENABLING ACT OF ANY EFFECT. IN OUR
VIEW, THIS WOULD BE AN OVERLITERAL INTERPRETATION OF 40 U.S.C. SEC. 34,
AN INTERPRETATION WHICH WOULD VIOLATE A TIME-HONORED CANON OF STATUTORY
CONSTRUCTION THAT THE WORDS OF THE CONGRESS SHOULD NOT BE CONSTRUED IN A
WAY THAT WOULD RENDER THEM NULL AND VOID. MOREOVER, FEMA'S
APPROPRIATION (SEE QUOTED LANGUAGE, INFRA) IS AVAILABLE FOR ALL EXPENSES
NECESSARY TO CARRY OUT THE FIRE PREVENTION ACT, AND ONE OF THOSE
AUTHORIZED EXPENSES IS A LEASE OF SPACE WHEREVER THAT SPACE MAY BE
SITUATED. WE THEREFORE CONCLUDE THAT THE STATUTORY PROHIBITION AGAINST
LEASING SPACE IN THE DISTRICT OF COLUMBIA HAS BEEN OVERCOME.
WITH REGARD TO THE QUESTION RAISED ABOUT THE TERM OF THE LEASE, IT IS
OUR OPINION THAT THE FEMA MAY ENTER INTO A MULTI-YEAR LEASE FOR SPACE TO
HOUSE ITS FIRE PREVENTION AND CONTROL ACTIVITIES, BECAUSE APPROPRIATIONS
AVAILABLE TO THE NATIONAL FIRE PREVENTION AND CONTROL ADMINISTRATION
HAVE NO FISCAL YEAR LIMITATION. THE DEPARTMENTS OF STATE, JUSTICE AND
COMMERCE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATION ACT, 1979,
PUB. L. NO. 95-431, OCTOBER 10, 1978, WHICH INCLUDES THE
ADMINISTRATION'S APPROPRIATION, PROVIDES FOR NO-YEAR FUNDS AS FOLLOWS:
"FOR EXPENSES NECESSARY TO CARRY OUT THE PROVISIONS OF THE FEDERAL
FIRE PREVENTION AND CONTROL ACT OF 1974, AS AMENDED, $17,395,000, TO
REMAIN AVAILABLE UNTIL EXPENDED."
THEREFORE, AS LONG AS THERE ARE SUFFICIENT UNOBLIGATED FUNDS
AVAILABLE IN ITS APPROPRIATION FOR THIS PURPOSE FOR THE FULL TERM OF THE
LEASE, FEMA MAY CONSUMMATE ITS PROPOSED RENTAL ARRANGEMENT.
UPON ENTERING INTO THE MULTI-YEAR LEASE, HOWEVER, FEMA MUST OBLIGATE
OUT OF ITS NO-YEAR FUNDS THE RENTAL CHARGES FOR THE FULL TERM OF THE
LEASE. IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY (LIKE THAT
AVAILABLE TO THE GENERAL SERVICES ADMINISTRATION) TO ENTER INTO
MULTI-YEAR LEASES AND LIQUIDATE THE OBLIGATION OUT OF ANNUAL
APPROPRIATIONS, AN AGENCY MUST OBLIGATE THE FULL AMOUNT OF ITS
CONTRACTUAL OBLIGATIONS FROM CURRENTLY AVAILABLE FUNDS. THE OBLIGATION
ARISES AT THE TIME THE DEBT IS INCURRED - IN THIS CASE, AT THE TIME THE
LEASE IS SIGNED - AND MUST THEREFORE BE RECORDED PROMPTLY IN ACCORDANCE
WITH 31 U.S.C. SEC. 200. SEE 38 COMP. GEN. 81 (1958). HOWEVER, RENTAL
PAYMENTS CAN ONLY BE MADE AFTER THE SPACE HAS BEEN OCCUPIED AT SOME
REASONABLE INTERVAL, E.G., MONTHLY, OR AS OTHERWISE SPECIFIED IN THE
AGREEMENT, IN ORDER TO AVOID THE PROHIBITION AGAINST MAKING ADVANCE
PAYMENTS IN 31 U.S.C. SEC. 529.
B-193377, JUL 10, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE STATUTE (33 U.S.C. SEC. 624) PRECLUDES AWARD TO BIDDER WHOSE
PRICE IS MORE THAN 25 PERCENT IN EXCESS OF AGENCY ESTIMATE, REJECTION OF
ALL BIDS AND CANCELLATION OF INVITATION WAS PROPER SINCE PROTESTER'S LOW
BID WAS SUBSTANTIALLY MORE THAN 25 PERCENT ABOVE AGENCY ESTIMATE THAT
HAD BEEN REVISED EXTENSIVELY IN RESPONSE TO PROTESTER'S ALLEGATIONS OF
ERROR AND REVISED ESTIMATE HAS NOT BEEN SHOWN TO BE UNREASONABLE.
GAMM CONTRACTING COMPANY:
GAMM CONTRACTING COMPANY (GAMM) PROTESTS THE REJECTION OF ALL BIDS BY
THE ARMY CORPS OF ENGINEERS UNDER INVITATION FOR BIDS NO. DACW
17-78-B-0069 FOR THE ENLARGEMENT OF THE WIDNER EIGHT FOOT PROJECT, AT
MOORE HAVEN LOCK ON THE OKEECHOBEE WATERWAY - A RIVER AND HARBOR
IMPROVEMENT PROJECT LOCATED IN FLORIDA. ALL BIDS WERE REJECTED AS
REQUIRED BY 33 U.S.C. SEC. 624 (1976) FOR BEING MORE THAN 25 PERCENT IN
EXCESS OF THE GOVERNMENT ESTIMATE. CONSEQUENTLY, THE INVITATION WAS
CANCELED AND BIDDERS WERE ADVISED THAT THE WORK COVERED BY THE
INVITATION WOULD BE INCLUDED WITH OTHER WORK TO BE ADVERTISED AT A LATER
DATE.
GAMM, WHOSE BID OF $113,000 WAS THE LOWEST OF BIDS RANGING UPWARD TO
$225,100, CONTENDS THAT THE GOVERNMENT ESTIMATE OF $64,960 WAS
UNREASONABLY LOW.
GAMM PROVIDED NO SPECIFICS WITH ITS INITIAL ALLEGATION. AS A RESULT,
THE CORPS REVIEWED ITS ESTIMATE AND FOUND IT REASONABLE AND JUSTIFIED
EXCEPT FOR THE OMISSION OF A FOUR PERCENT SALES TAX ON THE MATERIAL TO
BE PURCHASED FOR THE CONSTRUCTION WORK. THE CORPS ESTIMATED THAT THE
OMISSION AMOUNTED TO ONLY $400.00, LEAVING THE REVISED ESTIMATE FAR
BELOW THE MINIMUM AMOUNT NECESSARY TO BRING GAMM'S BID WITHIN THE 25
PERCENT STATUTORY LIMITATION.
UPON BEING FURNISHED WITH A DETAILED BREAKDOWN OF THE CORPS'
ESTIMATE, GAMM SUPPLEMENTED ITS PROTEST BY TAKING EXCEPTION TO VARIOUS
OF THE CORPS' CALCULATIONS UNDER EACH OF THE FOUR ITEMS OF THE BIDDING
SCHEDULE: (1) MOBILIZATION AND DEMOBILIZATION, (2) EXCAVATION, (3)
PLASTIC FILTER CLOTH, AND (4) RIP RAP STONE.
BRIEFLY, GAMM ALLEGES THAT THE CORPS' ESTIMATE OF THREE DAYS FOR
MOBILIZATION AND DEMOBILIZATION IS UNREALISTIC AND SHOULD BE INCREASED
TO 10 DAYS; THAT NO FUNDS ARE ASSIGNED IN THE CORPS' ESTIMATE FOR LABOR
INVOLVED IN LOADING, TRANSPORTING AND UNLOADING THE TRANSPORT VEHICLES;
AND THAT THE CORPS' ESTIMATE "FAILS TO ALLOW SUFFICIENT CARTAGE." UNDER
THE SECOND ITEM, EXCAVATION, GAMM CONTENDS THE GOVERNMENT
UNREALISTICALLY ASSUMES A PRODUCTION RATE OF 880 CUBIC YARDS A DAY
WHEREAS A MORE REASONABLE RATE OF 600 CUBIC YARDS PER DAY IS MANDATED
BECAUSE WATER SATURATED SOIL MUST BE REMOVED. AT SUCH A RATE, GAMM
ARGUES THAT THE EXCAVATION WILL REASONABLY TAKE 43 DAYS RATHER THAN THE
33 DAYS ESTIMATED BY THE CORPS; GAMM FURTHER ARGUES THAT THE ESTIMATED
$2,000 FOR ENVIRONMENTAL PROTECTION FAILS TO INCLUDE LABOR COSTS OF AT
LEAST AN ADDITIONAL $2,000. CONCERNING THE THIRD ITEM, PLASTIC FILTER
CLOTH, GAMM ALLEGES THAT AN EXTRA 10 PERCENT IS REQUIRED FOR LAPPING AND
WASTAGE, AND THAT A FOUR PERCENT SALES TAX, LABOR COSTS, INSURANCE RATE,
AND A 13 PERCENT OVERHEAD CHARGE WERE OMITTED. FURTHER, GAMM CHARGES
THAT THE CORPS' ESTIMATE FOR RIP RAP STONE, WHICH IS COMPUTED IN CUBIC
YARDS, IS ERRONEOUSLY PREDICATED UPON AN ASSUMPTION THAT ONE CUBIC YARD
OF STONE CONSISTS OF APPROXIMATELY ONE TON OF THE MATERIAL WHEREAS A
CUBIC YARD ACTUALLY CONSISTS OF APPROXIMATELY TWO TONS. MOREOVER, THE
CORPS' ESTIMATE ALLEGEDLY ALLOWS INSUFFICIENT TIME FOR THIS ITEM AS WELL
AS INSUFFICIENT LABOR FOR SALVAGING THE STONE AND STOCKPILING THE RIP
RAP MATERIALS.
IN THIS REGARD, GAMM POINTS OUT THAT THE TOTAL TIME IN THE
GOVERNMENT'S ESTIMATE FOR COMPLETING THE ENTIRE PROJECT IS 56 CALENDAR
DAYS, WHICH CONSTITUTES BUT 37 PERCENT OF THE 150 DAYS ALLOWED BY THE
CONTRACT FOR PERFORMANCE OF THE EFFORT. GAMM CONTENDS THAT THIS FURTHER
BUTTRESSES ITS ARGUMENTS THAT THE TOTAL TIME ALLOTTED BY THE GOVERNMENT
ESTIMATE HAS BEEN UNDERSTATED. IN SUM, GAMM COMPUTES A REASONABLE COST
TO BE $111,326.31, THEREBY BRINGING ITS BID PRICE WELL WITHIN THE 25
PERCENT STATUTORY LIMITATION.
THE CORPS HAS FURNISHED A DETAILED RESPONSE TO EACH OF THESE
ALLEGATIONS. IT REMAINS UNCONVINCED THAT TEN DAYS ARE REQUIRED FOR
MOBILIZATION AND DEMOBILIZATION. THE CORPS DOES, HOWEVER, CONCUR THAT
CERTAIN COSTS PERTAINING TO THE MOVEMENT OF EMPTY LOWBOY TRANSPORTS WERE
OMITTED, AND THAT ITS ESTIMATE FAILED TO ACCOUNT FOR ASSEMBLY AND
DISASSEMBLY OF THE DRAGLINE, RESULTING IN AN ADDITIONAL $1,276. THE
CORPS REMAINS ADAMANT THAT ITS ESTIMATED COSTS INCLUDE ADEQUATE LABOR
FOR TRANSPORTATION AND TIME FOR CARTAGE OF EQUIPMENT.
AS FOR EXCAVATION, THE CORPS REJECTS THE ARGUMENT THAT 880 CUBIC
YARDS PER DAY IS AN UNREASONABLE FIGURE, AND CONTENDS THAT THE ESTIMATE
DOES ACCOUNT FOR REMOVAL OF WATER SATURATED MATERIAL. IT FURTHER
ADVISES THAT ABOUT 40 PERCENT OF THE MATERIAL TO BE EXCAVATED LIES ABOVE
THE MEAN LOW WATER LINE. THE AGENCY CONTENDS THAT ITS 880 CUBIC YARDS
PER DAY RATE REPRESENTS ITS BEST JUDGMENT IN TERMS OF JOB REQUIREMENTS
AND IT WILL NOT ALTER THIS ASSESSMENT UNLESS IT IS SHOWN TO BE
ABSOLUTELY UNSUPPORTABLE. THE CORPS REJECTS GAMM'S CONTENTION THAT
ENVIRONMENTAL PROTECTION COSTS SHOULD BE INCREASED BY $2,000, TAKING
EXCEPTION TO GAMM'S PREMISE THAT A SILT BARRIER IS REQUIRED. HOWEVER,
AFTER REVIEWING ITS ESTIMATE, THE CORPS CONCLUDES THAT ITS 16.67 PERCENT
OVERTIME FACTOR WAS PREDICATED UPON A 6-10 HOUR PER DAY WORKWEEK, WHILE
A 10 PERCENT OVERTIME FACTOR SHOULD HAVE BEEN USED SINCE THAT PERCENTAGE
WAS APPLICABLE TO THE 5-10 HOUR PER DAY WORKWEEK SET OUT IN THE PLAN OF
OPERATION. ACCORDINGLY, THE CORPS LOWERED THE OVERTIME FACTOR TO $850,
AND ITS ESTIMATE FOR THIS PORTION OF THE ITEM TO $11,958.
THE CORPS AGREES WITH GAMM'S ALLEGATION THAT THE PLASTIC FILTER CLOTH
ESTIMATE SHOULD BE INCREASED BY $2,151.41.
THE CORPS DOES NOT AGREE THAT ONE CUBIC YARD OF RIP RAP STONE WEIGHS
APPROXIMATELY TWO TONS, BUT HAS REVISED ITS ESTIMATE BASED UPON THE
PARTICULAR TYPE OF STONE QUARRIED IN SOUTHWEST FLORIDA, CONCLUDING THAT
SUCH STONE REQUIRES A 1.3 (AS OPPOSED TO 1.0) TON FACTOR PER CUBIC YARD,
AND THAT THE ESTIMATE SHOULD BE INCREASED BY 30 PERCENT TO $8,315. THE
CORPS FURTHER AGREES ITS ESTIMATE FAILS TO PROVIDE FOR REMOVAL AND
STOCKPILING OF EXISTING STONE IN THE PROJECT AREA, AND THAT INSUFFICIENT
TIME HAS BEEN ALLOWED FOR STONE PLACEMENT AS WELL AS REMOVAL AND
STOCKPILING. ACCORDINGLY, AN ADDITIONAL $1,337 FOR EQUIPMENT TIME AND
AN INCREASE OF $1,367 FOR LABOR IS REQUIRED, WITH SALES TAX AND OVERHEAD
MARKUP INCREASING THE ESTIMATED COST TO $15,654 OR $30.10 PER CUBIC
YARD.
WITH RESPECT TO THE DISCREPANCY BETWEEN THE COMPLETION TIME CONTAINED
IN THE GOVERNMENT ESTIMATE AND THE TIME ALLOTTED IN THE SOLICITATION FOR
CONTRACT PERFORMANCE, THE CORPS EXPLAINS THAT THE PERFORMANCE TIME SET
OUT IN ITS SOLICITATION WAS "AN OUTSIDE BALL PARK FIGURE" WHICH WAS
INTENDED TO BE CONSTRUED BY BIDDERS "MERELY AS A LOOSE GUIDELINE." IN
THIS CASE, THE CORPS BELIEVED THAT THE PROJECT COULD BE COMPLETED WITHIN
THREE MONTHS, BUT ADDED ANOTHER TWO MONTHS TO COVER MOBILIZATION TIME
AND TO PROVIDE A "SAFETY CUSHION" FOR WEATHER HAZARDS AND OTHER DELAYS.
IN COMPLETING THE ACTUAL GOVERNMENT ESTIMATE, HOWEVER, THE CORPS MADE
AN IN-DEPTH STUDY OF THE PROJECT AS OPPOSED TO THE PRELIMINARY REVIEW
CONDUCTED WHICH RESULTED IN THE SOLICITATION'S STATED COMPLETION TIME.
THE CORPS ALSO REPORTS THAT THE GOVERNMENT ESTIMATE DOES NOT INCLUDE
EITHER THE 30 DAY LEEWAY PERIOD ALLOWED FOR COMMENCING PERFORMANCE OR
THE PROJECT ESTABLISHMENT TIME (E.G. ESTABLISHING THE GROWTH OF GRASS AS
OPPOSED TO MERELY PLANTING THE GRASS SEED). THE CORPS SEES THE
GOVERNMENT ESTIMATE AS REFLECTING A REASONABLE TIME FOR ACTUAL CONTRACT
PERFORMANCE WHILE IT VIEWS THE SOLICITATION COMPLETION TIME IS A
GENEROUS FIGURE WHICH INCLUDES A MARGIN FOR ERROR AND OTHER
CONTINGENCIES.
IN SUMMARY, THE CORPS' REVIEW OF GAMM'S SPECIFIC CONTENTIONS HAS
RESULTED IN A NET UPWARD ADJUSTMENT OF THE GOVERNMENT ESTIMATE TO
$72,958. SINCE GAMM'S BID PRICE EXCEEDS $91,198, WHICH IS 25 PERCENT
MORE THAN THE REVISED ESTIMATE, THE BID, IN THE CORPS' VIEW, REMAINS
INELIGIBLE FOR AWARD.
WE FIND NO BASIS FOR DISAGREEING WITH THE CORPS. THE FACT THAT ALL
RESPONSIVE BIDS ARE SUBSTANTIALLY HIGHER THAN THE GOVERNMENT ESTIMATE
DOES NOT, BY ITSELF, ESTABLISH THE REASONABLENESS OF BIDDERS' PRICES AND
THE UNREASONABLENESS OF THE GOVERNMENT'S ESTIMATE. OTHERWISE, A
GOVERNMENT ESTIMATE COULD BE INVALIDATED WHENEVER A BIDDER'S PRICE IS
NOT IN LINE WITH THE ESTIMATE MERELY BY THE SUBMISSION OF A POSSIBLE
HYPOTHESIS WHICH MIGHT EXPLAIN ITS HIGHER BID. SEE SUPPORT CONTRACTORS,
INC., B-181607, MARCH 18, 1975, 75-1 CPD 160; GENERAL ELEVATOR COMPANY,
INC., B-190605, JUNE 12, 1978, 78-1 CPD 426, AND CITATIONS THEREIN.
HOWEVER, WHERE SUCH CIRCUMSTANCES DO OCCUR, AN AGENCY SHOULD BE ON
NOTICE OF A POSSIBLE ERROR IN ITS ESTIMATE AND SHOULD CAREFULLY REVIEW
THE ESTIMATE. GENERAL ELEVATOR COMPANY, INC., SUPRA; W.G. CONSTRUCTION
CORPORATION, B-188837, AUGUST 9, 1977, 77-2 CPD 100.
HERE, THE CORPS HAS DONE THAT AND FINDS THAT THE LOW BID STILL
EXCEEDED THE AWARDABLE RANGE PRESCRIBED BY 33 U.S.C. SEC. 624. OUR
REVIEW IS TO DETERMINE WHETHER THE ESTIMATE, AS REVISED, IS REASONABLE.
SEE OKC DREDGING INC., B-189507, JANUARY 18, 1978, 78-1 CPD 44;
DUROCHER DOCK AND DREDGE, INC., B-189704, MARCH 29, 1978, 78-1 CPD 241.
THE RECORD BEFORE US CONTAINS A DETAILED BREAKDOWN OF THE CORPS'
ORIGINAL ESTIMATE, SHOWING LABOR, MATERIALS, OVERHEAD, TAX, ETC., AND
THE CORPS REVISIONS TO THE ORIGINAL ESTIMATE. ALTHOUGH GAMM OBJECTS TO
SEVERAL PORTIONS OF THE CORPS' FINAL ESTIMATE, THE CORPS HAS ALSO
PROVIDED A REASONABLE EXPLANATION IN SUPPORT OF ITS REVISED ESTIMATE,
AND GAMM HAS NOT AFFIRMATIVELY SHOWN THAT ITS DATA, CALCULATIONS AND
PROPOSED ESTIMATE ARE CORRECT WHILE THOSE OF THE CORPS ARE INCORRECT.
DUROCHER DOCK & DREDGE, INC., SUPRA. THUS, ON THIS RECORD WE CANNOT
FIND THE CORPS' POSITION AND REVISED ESTIMATE TO BE UNREASONABLE AND
THEREFORE WE CANNOT CONCLUDE THAT THE CORPS' DECISION TO REJECT ALL BIDS
WAS IMPROPER.
THE PROTEST IS DENIED.
B-193452, JUL 10, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
TRANSFERRED EMPLOYEE WHO CLAIMS THE EQUIVALENT OF 2 MONTHS RENT AS A
LEASE TERMINATION EXPENSE MAY NOT BE REIMBURSED SINCE SHE HAS NOT
FURNISHED A COPY OF HER LEASE OR OTHER DOCUMENTATION SHOWING HER
OBLIGATION UNDER THE LEASE IN THE EVENT OF HER TERMINATION. SUBMISSION
OF CANCELLED CHECKS DOES NOT SATISFY DOCUMENTATION REQUIREMENT OF FTR
PARAGRAPH 2-6.2H.
MONA J. D. NOONAN - SETTLEMENT OF UNEXPIRED LEASE:
THIS DECISION IS IN RESPONSE TO AN APPEAL BY MS. MONA J. D. NOONAN
FROM THE SETTLEMENT CERTIFICATE ISSUED BY OUR CLAIMS DIVISION ON
SEPTEMBER 26, 1978, DENYING HER CLAIM FOR REIMBURSEMENT OF EXPENSES SHE
INCURRED IN SETTLING AN UNEXPIRED LEASE.
MS. NOONAN WAS TRANSFERRED FROM THE NAVAL AIR ENGINEERING CENTER IN
PHILADELPHIA, PENNSYLVANIA, TO THE NAVAL AIR STATION, LAKEHURST, NEW
JERSEY, AND WAS DIRECTED TO REPORT TO HER NEW DUTY STATION ON NOVEMBER
16, 1974. SHE WAS NOT INFORMED OF THIS TRANSFER UNTIL OCTOBER 1974 AND
THUS WAS UNABLE TO GIVE MORE THAN 1 MONTH NOTICE OF THE TERMINATION OF
THE LEASE ON HER APARTMENT AT HER OLD OFFICIAL STATION PRIOR TO THE DATE
OF HER TRANSFER. SHE CLAIMS THAT HER LEASE REQUIRED 90 DAYS NOTICE AT
TERMINATION OR, IN LIEU OF SUCH NOTICE, PAYMENT OF 3 MONTHS RENT PLUS
FORFEITURE OF THE SECURITY DEPOSIT OF $210. SHE STATES THAT IN ORDER TO
REDUCE THE COST OF TERMINATING THE LEASE SHE PAID RENT FOR DECEMBER AND
JANUARY, THUS COMPLYING WITH THE 90 DAYS NOTICE REQUIREMENT.
MS. NOONAN WAS INITIALLY REIMBURSED FOR THE 2 MONTHS RENT, WHICH
AMOUNTED TO $370, BUT THE NAVY REGIONAL FINANCE CENTER IN NORFOLK,
VIRGINIA, DIRECTED COLLECTION OF THAT AMOUNT UNLESS MS. NOONAN COULD
FURNISH A COPY OF THE LEASE TO SUBSTANTIATE PAYMENT. MS. NOONAN STATES
THAT IN APRIL 1972 SHE SIGNED TWO COPIES OF HER LEASE AND RETURNED THEM
BY MAIL TO THE MULTIHOME CORPORATION WHICH MANAGED HER APARTMENT
BUILDING. SHE HAS BEEN UNABLE, HOWEVER, TO OBTAIN A COPY OF THE LEASE.
IN SUBSTANTIATION OF HER CLAIM FOR LEASE TERMINATION EXPENSES, SHE HAS
SUBMITTED COPIES OF TWO CANCELLED CHECKS PAYABLE TO THE MULTIHOME
CORPORATION IN THE AMOUNTS OF $155 EACH FOR THE DECEMBER AND JANUARY
RENT ON HER OLD RESIDENCE TOGETHER WITH A DEPOSIT AND A RENT CHECK FOR
JANUARY ON HER NEW RESIDENCE IN NEW JERSEY.
OUR CLAIMS DIVISION UPHELD THE DETERMINATION OF THE NAVY REGIONAL
FINANCE CENTER STATING:
"PARAGRAPH 2-6.2H OF THE FEDERAL TRAVEL REGULATIONS DOES NOT ALLOW
REIMBURSEMENT FOR THESE EXPENSES WHEN THEY ARE NOT PROPERLY DOCUMENTED.
AS THESE REGULATIONS HAVE THE FORCE AND EFFECT OF LAW, WE MAY NOT MODIFY
OR WAIVE THEM. ACCORDINGLY, BASED ON COMPTROLLER GENERAL DECISION
B-184164 (COPY ENCLOSED), WE MAY NOT ALLOW YOUR CLAIM."
PARAGRAPH 2-6.2H OF THE FTR PROVIDES FOR PAYMENT OF LEASE TERMINATION
EXPENSES AS FOLLOWS:
"H. SETTLEMENT OF AN UNEXPIRED LEASE. EXPENSES INCURRED FOR
SETTLING AN UNEXPIRED LEASE (INCLUDING MONTH-TO-MONTH RENTAL) ON
RESIDENCE QUARTERS OCCUPIED BY THE EMPLOYEE AT THE OLD OFFICIAL STATION
MAY INCLUDE BROKER'S FEES FOR OBTAINING A SUBLEASE OR CHARGES FOR
ADVERTISING AN UNEXPIRED LEASE. SUCH EXPENSES ARE REIMBURSABLE WHEN (1)
APPLICABLE LAWS OR THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF
SETTLEMENT EXPENSES, (2) SUCH EXPENSES CANNOT BE AVOIDED BY SUBLEASE OR
OTHER ARRANGEMENT, (3) THE EMPLOYEE HAS NOT CONTRIBUTED TO THE EXPENSE
BY FAILING TO GIVE APPROPRIATE LEASE TERMINATION NOTICE PROMPTLY AFTER
HE HAS DEFINITE KNOWLEDGE OF THE TRANSFER, AND (4) THE BROKER'S FEES OR
ADVERTISING CHARGES ARE NOT IN EXCESS OF THOSE CUSTOMARILY CHARGED FOR
COMPARABLE SERVICES IN THAT LOCALITY. ITEMIZATION OF THESE EXPENSES IS
REQUIRED AND THE TOTAL AMOUNT SHALL BE ENTERED ON AN APPROPRIATE TRAVEL
VOUCHER. THIS VOUCHER MAY BE SUBMITTED SEPARATELY OR WITH A CLAIM THAT
IS TO BE MADE FOR EXPENSES INCIDENT TO THE PURCHASE OF A DWELLING. EACH
ITEM MUST BE SUPPORTED BY DOCUMENTATION SHOWING THAT THE EXPENSE WAS IN
FACT INCURRED AND PAID BY THE EMPLOYEE."
THIS REGULATION REQUIRES NOT ONLY DOCUMENTATION SHOWING THE LEASE
TERMINATION EXPENSE WAS IN FACT INCURRED AND PAID, BUT A SHOWING THAT
THE EMPLOYEE WAS OBLIGATED BY APPLICABLE LAW OR THE TERMS OF HIS LEASE
TO INCUR THE EXPENSE CLAIMED. THUS, IN B-184164, DECEMBER 8, 1975,
WHERE A TRANSFERRED EMPLOYEE FORFEITED A SECURITY DEPOSIT BECAUSE HE WAS
UNABLE TO GIVE THE REQUIRED NOTICE, HIS CLAIM FOR REIMBURSEMENT WAS
DENIED BECAUSE HE DID NOT FURNISH A COPY OF HIS LEASE. SIMILARLY, IN
B-174098, DECEMBER 8, 1971, AN EMPLOYEE WHO PRODUCED ONLY A CANCELLED
CHECK AS EVIDENCE OF LEASE TERMINATION EXPENSES, WAS DENIED
REIMBURSEMENT DUE TO LACK OF CORROBORATING EXCERPTS FROM THE LEASE OR
OTHER EVIDENCE THAT THE CHECKS WERE IN PAYMENT OF EXPENSES FOR WHICH HE
WAS LEGALLY OBLIGATED.
THE RECORD INDICATES THAT MS. NOONAN HAS BEEN UNABLE TO OBTAIN A COPY
OF HER LEASE NOTWITHSTANDING CONSIDERABLE EFFORT ON HER PART. UNDER THE
CIRCUMSTANCES, MS. NOONAN'S CLAIM MAY BE CONSIDERED BY THE DEPARTMENT OF
THE NAVY IF SHE WILL FURNISH A COPY OF THE STANDARD LEASE USED BY
MULTIHOME CORPORATION FOR THE APARTMENT BUILDING SHE OCCUPIED TOGETHER
WITH THAT CORPORATION'S CERTIFICATION THAT SHE HAD SUCH A LEASE. BASED
ON THE PRESENT RECORD, HOWEVER, SETTLEMENT BY OUR CLAIMS DIVISION
DISALLOWING MS. NOONAN'S CLAIM IS SUSTAINED.
B-194538, JUL 10, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST THAT CLAUSE IN 100-PERCENT SMALL BUSINESS SET-ASIDE
SOLICITATIONS, PERMITTING BIDDERS TO OFFER ITEMS PRODUCED OR
MANUFACTURED IN GREAT BRITAIN AND NORTHERN IRELAND, CIRCUMVENTS INTENT
AND PURPOSE OF SMALL BUSINESS SET-ASIDE IS BASED ON ALLEGED PATENT
SOLICITATION IMPROPRIETY. PROTEST IS UNTIMELY, SINCE SUCH PROTESTS MUST
BE FILED BEFORE BID OPENING DATE AND THIS PROTEST WAS NOT FILED UNTIL
AFTER BID OPENING.
A+P SURGICAL CO., INC.:
BY LETTER DATED APRIL 3, 1979, A+P SURGICAL CO., INC. (A+P),
PROTESTED THE AWARD OF ANY CONTRACTS TO MEDICAL DEVICES, INC. (MEDICAL
DEVICES), UNDER INVITATIONS FOR BIDS (IFB) NOS. DLA-120-79-B-0114,
-0618, AND -0914, ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER,
PHILADELPHIA, PENNSYLVANIA.
THE SOLICITATIONS WERE TOTAL SMALL BUSINESS SET-ASIDES. THEY ALSO
CONTAINED A "NOTICE OF POTENTIAL FOREIGN SOURCE COMPETITION" (CLAUSE
C76), WHICH STATED THAT BIDS OFFERING ITEMS PRODUCED OR MANUFACTURED IN
GREAT BRITAIN AND NORTHERN IRELAND WOULD BE EVALUATED WITHOUT
APPLICATION OF THE PRICE DIFFERENTIALS AND IMPORT DUTIES NORMALLY
APPLIED TO PRODUCTS OF FOREIGN ORIGIN UNDER THE BUY AMERICAN ACT.
A+P ARGUES THAT CLAUSE C76 ALLOWS THE REQUIREMENTS FOR SMALL BUSINESS
SET-ASIDES TO BE CIRCUMVENTED, BY PERMITTING THE USE OF FOREIGN
MANUFACTURING FACILITIES, AND THAT THE AWARDEE, MEDICAL DEVICES, IS
USING A FOREIGN MANUFACTURER AS PART OF ITS PRODUCTION PROCESS, THUS
CIRCUMVENTING THE SMALL BUSINESS REQUIREMENTS.
SECTION 20.2(B)(1) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. SEC.
20.2(B)(1) (1978), PROVIDES, IN PART, THAT:
"(B)(1) PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF
SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE
FOR RECEIPT OF INITIAL PROPOSALS SHALL BE FILED PRIOR TO BID OPENING OR
THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS."
SINCE BOTH THE NOTICE OF SMALL BUSINESS SET-ASIDE AND CLAUSE C76 WERE
IN ALL THREE SOLICITATIONS, THE BASIS OF A+P'S PROTEST WAS APPARENT FROM
READING THE SOLICITATIONS. THEREFORE, TO BE TIMELY, A+P'S PROTEST WOULD
HAVE TO HAVE BEEN FILED PRIOR TO THE DATES FOR BID OPENING IN EACH
SOLICITATION, NOVEMBER 9, 1978, JANUARY 20, 1979, AND MARCH 7, 1979.
A+P'S PROTEST WAS NOT FILED UNTIL APRIL 5, 1979, AND, THEREFORE, IS
UNTIMELY.
A+P CONTENDS THAT ITS PROTEST IS TIMELY BECAUSE IT COULD NOT PROTEST
UNTIL IT HAD DISCOVERED, PURSUANT TO THE FREEDOM OF INFORMATION ACT,
THAT MEDICAL DEVICES WAS USING FORGINGS MANUFACTURED IN IRELAND.
ACCORDING TO A+P, ITS PROTEST WAS FILED WITHIN 10 DAYS OF RECEIPT OF
THAT INFORMATION. THE BASIS OF A+P'S PROTEST, HOWEVER, IS THAT THE
SOLICITATIONS PERMITTED BIDDERS TO DO EXACTLY WHAT MEDICAL DEVICES DID.
A+P DID NOT NEED TO KNOW THAT MEDICAL DEVICES OR ANY OTHER BIDDER IN
FACT USED CLAUSE C76 IN ORDER TO FILE ITS PROTEST.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-194548, JUL 10, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROVISIONS IN HEW 1979 APPROPRIATION ACT PROVIDE HEW WITH
AUTHORITY TO MAKE ENTITLEMENT PAYMENTS TO STATES IN FINAL QUARTER OF
1979 FISCAL YEAR FOR BOTH AFDC AND MEDICAID AND CHARGE CORRESPONDING
1980 HEW APPROPRIATION IF, FOR ANY REASON, 1979 APPROPRIATIONS TO MEET
ENTITLEMENTS IN THOSE PROGRAMS ARE INSUFFICIENT. THIS INCLUDES
INSUFFICIENCY CAUSED BY HEW'S IMPLEMENTATION OF SECTION 201 OF ITS 1979
APPROPRIATION ACT, WHICH REDUCED HEW'S BUDGET AUTHORITY FOR FISCAL 1979
BY $1 BILLION TO BE ACHIEVED BY REDUCING FRAUD, ABUSE, AND WASTE, SINCE
HEW'S $831 MILLION REDUCTION OF AFDC AND MEDICAID WAS BASED ON PAST
STATE ERROR RATES AND DID NOT CORRECT, IDENTIFY, OR ELIMINATE IMPROPER
PAYMENTS.
2. STATUTORY LANGUAGE AND LEGISLATIVE HISTORY OF SECTION 201 OF 1979
HEW APPROPRIATION ACT, WHICH REDUCED HEW'S BUDGET AUTHORITY FOR FISCAL
1979 BY $1 BILLION, CLEARLY INDICATE THAT $1 BILLION REDUCTION WAS TO BE
ACHIEVED SOLELY BY REDUCING FRAUD, ABUSE, AND WASTE, AND WAS NOT
INTENDED, IN ANY WAY, TO AFFECT LEGITIMATE ENTITLEMENTS. THEREFORE, HEW
CAN USE ITS AUTHORITY TO "BORROW" FROM ITS 1980 APPROPRIATION TO REPLACE
FUNDS CUT FROM 1979 APPROPRIATION FOR AFDC AND MEDICAID IN HEW'S ATTEMPT
TO COMPLY WITH SECTION 201, IF SUCH ADDITIONAL FUNDS ARE NEEDED TO MAKE
ENTITLEMENT PAYMENTS TO STATES FOR THOSE PROGRAMS DURING FINAL QUARTER
OF 1979 FISCAL YEAR.
USE OF "BORROWING" AUTHORITY TO MEET AFDC AND MEDICAID ENTITLEMENTS:
THIS DECISION IS IN RESPONSE TO A REQUEST FROM THE ACTING SECRETARY
OF HEALTH, EDUCATION, AND WELFARE (HEW) FOR OUR OPINION ON HEW'S
AUTHORITY TO "BORROW" FROM ITS APPROPRIATION FOR FISCAL YEAR 1980 (NOT
YET ENACTED) TO MEET ENTITLEMENTS IN THE FINAL QUARTER OF THE PRESENT
FISCAL YEAR IN THE MEDICAID AND AID FOR DEPENDENT CHILDREN (AFDC)
PROGRAMS. AS EXPLAINED BY HEW -
"THE NEED FOR SUCH BORROWING ARISES FROM THE REDUCTIONS TO BE MADE BY
HEW IN THE GRANT AWARDS FOR THESE PROGRAMS FOR THE FOURTH QUARTER OF FY
1979 IN ORDER TO COMPLY WITH THE REQUIREMENTS OF SECTION 201 (REFERRED
TO AS THE 'MICHEL AMENDMENT') OF THE ACT (DEPARTMENTS OF LABOR AND
HEALTH, EDUCATION, AND WELFARE APPROPRIATION ACT, 1979, PUB. L. NO.
95-480, 92 STAT. 1567.)"
THE MICHEL AMENDMENT TO THE HEW APPROPRIATION ACT, 1979, READS AS
FOLLOWS:
"NOTHWITHSTANDING ANY OTHER PROVISION IN THIS ACT, THE TOTAL AMOUNT
OF BUDGET AUTHORITY PROVIDED IN THIS ACT FOR THE DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE IS HEREBY REDUCED IN THE AMOUNT OF
$1,000,000,000: PROVIDED, THAT THIS REDUCTION SHALL BE ACHIEVED BY THE
REDUCTION OF FRAUD, ABUSE, AND WASTE AS DEFINED AND CITED IN THE ANNUAL
REPORT, DATED MARCH 31, 1978, OF THE INSPECTOR GENERAL OF THE DEPARTMENT
OF HEALTH, EDUCATION, AND WELFARE: PROVIDED FURTHER, THAT THIS SECTION
SHALL NOT BE CONSTRUED TO CHANGE ANY LAW AUTHORIZING APPROPRIATIONS OR
OTHER BUDGET AUTHORITY IN THIS ACT."
INITIALLY, HEW TOOK THE POSITION THAT THE MICHEL AMENDMENT DID NO
MORE THAN RESTATE HEW'S "PREEXISTING LEGAL OBLIGATION" TO AVOID
EXPENDITURES FOR UNAUTHORIZED PURPOSES. UNDER THIS VIEW, THE AMENDMENT
SET A GOAL OF AT LEAST $1 BILLION IN "SAVINGS" TO BE ACHIEVED BY
REDUCING FRAUD, ABUSE, AND WASTE, BUT DID NOT ACTUALLY REDUCE THE AMOUNT
OF BUDGET AUTHORITY AVAILABLE TO HEW. AS A RESULT, FOR THE FIRST THREE
QUARTERS OF FY 1979, HEW PERMITTED ITS PROGRAMS TO SPEND AT A RATE
CONSISTENT WITH THEIR FULL LINE ITEM AMOUNTS.
IN APRIL, THIS OFFICE WAS ASKED BY BOTH THE CHAIRMAN AND THE RANKING
MINORITY MEMBER OF THE HOUSE SUBCOMMITTEE ON LABOR-HEW APPROPRIATIONS
FOR ITS INTERPRETATION OF THE MICHEL AMENDMENT. WE CONCLUDED THAT THE
MICHEL AMENDMENT DID REDUCE HEW'S 1979 BUDGET AUTHORITY BY $1 BILLION
(B-194548, MAY 7, 1979.) WE ALSO HELD THAT HEW HAD TO REALIZE THE
REDUCTION BY ELIMINATING THAT AMOUNT OF FRAUD, ABUSE, AND WASTE IN THE
PROGRAMS SPECIFIED IN THE INSPECTOR GENERAL'S REPORT FOR WHICH BUDGET
AUTHORITY WAS PROVIDED BY THE 1979 ACT. (AFDC AND MEDICAID ARE AMONG
THOSE PROGRAMS.)
THE OFFICE OF LEGAL COUNSEL, DEPARTMENT OF JUSTICE, RESPONDING TO A
REQUEST BY HEW, ALSO ISSUED AN OPINION, DATED JUNE 15, 1979, ON THE
MEANING OF THE MICHEL AMENDMENT. ALTHOUGH THE JUSTICE DEPARTMENT AGREED
WITH OUR CONCLUSION THAT THE MICHEL AMENDMENT DID EFFECT A $1 BILLION
REDUCTION IN BUDGET AUTHORITY WHICH HAD TO BE REALIZED FROM PROGRAMS
IDENTIFIED IN THE INSPECTOR GENERAL'S REPORT, IT FURTHER CONCLUDED THAT
HEW WAS LEGALLY REQUIRED TO MAKE THE $1 BILLION REDUCTION WHETHER OR
NOT, AS A PRACTICAL MATTER, IT COULD DO SO SOLELY BY CUTTING FRAUD,
WASTE, AND ABUSE, EVEN IF "THE REDUCTION IN APPROPRIATIONS SHOULD FORCE
CUTS IN LEGITIMATE PROGRAMS."
AFTER HEW RECEIVED THE JUSTICE DEPARTMENT OPINION, THE ACTING
SECRETARY ADVISED THE CHAIRMAN OF THE SENATE COMMITTEE ON LABOR-HEW
APPROPRIATIONS OF HEW'S DECISION -
"TO REDUCE BY $1 BILLION THE AMOUNTS THAT THE DEPARTMENT WOULD
OTHERWISE OBLIGATE DURING THE FOURTH QUARTER OF FISCAL YEAR 1979, IN
ORDER TO ASSURE HEW'S FULL COMPLIANCE WITH SECTION 201, AS IT HAS NOW
BEEN DEFINITIVELY INTERPRETED WITHIN THE EXECUTIVE BRANCH."
AS SPECIFIED IN HEW'S SUBMISSION TO US -
"(HEW) WILL WITHHOLD $169 MILLION IN OBLIGATIONAL AUTHORITY NOT
REQUIRED FOR THE BASIC EDUCATIONAL OPPORTUNITY GRANTS PROGRAM IN FY
1979. THIS SAVING IS A RESULT OF APPROVED MANAGEMENT ACTIONS INSTITUTED
IN 1978 TO REDUCE THE NUMBER OF INELIGIBLE STUDENTS.
"(HEW) WILL REDUCE THE TOTAL FOURTH QUARTER 1979 GRANT AWARDS TO
STATES FOR MEDICAID BY APPROXIMATELY $421 MILLION AND FOR AFDC BY
APPROXIMATELY $410 MILLION, FOR A TOTAL OF $831 MILLION. THESE
REDUCTIONS ARE BASED ON PAST PAYMENT ERROR RATES REPORTED BY THE STATES
FOR THOSE PROGRAMS."
HAVING DECIDED ON THESE ACTIONS, HEW NOW PROPOSES, IF WE APPROVE, TO
REPLACE THE $831 MILLION IN MEDICAID AND AFDC PAYMENTS BY USE OF ITS
SO-CALLED BORROWING AUTHORITY TO MAKE SUCH PAYMENTS TO STATES IN FISCAL
YEAR 1979 FROM FUNDS TO BE CHARGED AGAINST ITS APPROPRIATION FOR FISCAL
YEAR 1980. THE SPECIFIC QUESTION BEFORE US IS WHETHER IT MAY DO SO.
FOR AFDC, THE SPECIFIC "BORROWING" LANGUAGE IN THE 1979 APPROPRIATION
ACT IS AS FOLLOWS:
"FOR MAKING, AFTER JUNE 30 OF THE CURRENT FISCAL YEAR, PAYMENTS TO
STATES UNDER TITLES I, IV, X, XIV, AND XVI, RESPECTIVELY, OF THE SOCIAL
SECURITY ACT FOR THE LAST THREE MONTHS OF THE CURRENT FISCAL YEAR; AND
FOR MAKING AFTER JULY 31 OF THE CURRENT FISCAL YEAR, PAYMENTS FOR THE
FIRST QUARTER OF THE SUCCEEDING FISCAL YEAR; SUCH SUMS AS MAY BE
NECESSARY, THE OBLIGATIONS INCURRED AND THE EXPENDITURES MADE THEREUNDER
FOR PAYMENTS UNDER EACH OF SUCH TITLES TO BE CHARGED TO THE SUBSEQUENT
APPROPRIATIONS THEREFOR FOR THE CURRENT OR SUCCEEDING FISCAL YEAR.
"SUCH AMOUNTS AS MAY BE NECESSARY FROM THIS APPROPRIATION SHALL BE
AVAILABLE FOR GRANTS TO STATES FOR ANY PERIOD IN THE PRIOR FISCAL YEAR
SUBSEQUENT TO JUNE 30 OF THAT YEAR."
A SIMILAR PROVISION IS CONTAINED IN THE ACT FOR MEDICAID.
ALTHOUGH REFERRED TO FOR CONVENIENCE AS "BORROWING AUTHORITY," THE
PROVISIONS IN QUESTION ARE RATHER APPROPRIATIONS THAT MAKE AVAILABLE TO
HEW IN THE FINAL QUARTER OF THE CURRENT FISCAL YEAR SUCH AMOUNTS, IN
ADDITION TO THE AMOUNTS SPECIFICALLY APPROPRIATED THEREFOR, AS ARE
NEEDED BY HEW TO MAKE AFDC AND MEDICAID PAYMENTS TO THE STATES TO WHICH
THE STATES ARE ENTITLED BUT FOR WHICH THERE ARE INSUFFICIENT FUNDS IN
THE APPROPRIATION. THESE PROVISIONS AUTHORIZE "BORROWING" ONLY IN THE
SENSE OF REQUIRING HEW ULTIMATELY TO CHARGE ALL SUCH EXPENDITURES TO THE
CORRESPONDING APPROPRIATION FOR THE SUCCEEDING FISCAL YEAR.
WE HAVE BEEN ADVISED INFORMALLY BY HEW THAT IT HAS OFTEN SO USED
SIMILAR "BORROWING" AUTHORITY IN EARLIER APPROPRIATION ACTS. (IN FACT,
THE LAST SENTENCE IN THE QUOTED PROVISION SPECIFIES THAT FUNDS FOR AFDC
FOR FISCAL 1979 ARE AVAILABLE TO MAKE GRANTS TO STATES FOR THE FINAL
QUARTER OF FISCAL 1978.)
HOWEVER, HEW'S PROPOSED USE OF ITS "BORROWING" AUTHORITY IN THE
CIRCUMSTANCES DESCRIBED HERE RAISES AN ISSUE NOT PREVIOUSLY ENCOUNTERED.
HEW RECOGNIZED IN A NEWS RELEASE DATED JUNE 28, 1978 THAT "THE
EXISTENCE OF SUCH AUTHORITY TO DO WITH 1980 FUNDS WHAT WE CANNOT DO WITH
1979 FUNDS IS A DIFFICULT AND AS YET UNDETERMINED QUESTION."
AFDC AND MEDICAID ARE ENTITLEMENT PROGRAMS BY WHICH THE FEDERAL
GOVERNMENT IS OBLIGATED TO MAKE PAYMENTS TO STATES, ON THE BASIS OF A
STATUTORY FORMULA, REPRESENTING REIMBURSEMENT FOR A PORTION OF THE
PAYMENTS THE STATES MAKE TO ELIGIBLE RECIPIENTS IN THE TWO PROGRAMS.
(SEE 42 U.S.C. SECS. 603 AND 1396(B)(1976).) WE DO NOT DISPUTE HEW'S
CONTENTION THAT THE REDUCTIONS IT OTHERWISE INTENDS TO MAKE IN STATE
AFDC AND MEDICAID PAYMENTS IN THE FOURTH QUARTER OF THE CURRENT FISCAL
YEAR" WILL UNDOUBTEDLY LEAD TO A SHORT-FALL IN THE AMOUNTS AVAILABLE TO
MOST, IF NOT ALL, STATES FOR MEETING THEIR OBLIGATIONS UNDER THESE
PROGRAMS." IF THE ENTIRE $831 MILLION REDUCTION IN REIMBURSEMENTS TO THE
STATES RESULTED FROM THE ELIMINATION OF FRAUD, ABUSE, AND WASTE (IN
ACCORDANCE WITH OUR MAY 7, OPINION), AND THEREFORE AFFECTED ONLY
INELIGIBLE RECIPIENTS, IT WOULD BE DIFFICULT TO JUSTIFY THE USE OF FUNDS
"BORROWED" FROM HEW'S 1980 APPROPRIATION TO MAKE ASSISTANCE PAYMENTS FOR
SUCH OBVIOUSLY IMPROPER PURPOSES.
HOWEVER, IT SEEMS APPARENT THAT THE RELATIONSHIP BETWEEN THE ACTIONS
HEW HAS TAKEN - IN CUTTING GRANT AWARDS TO STATES ON THE BASIS OF PAST
STATE ERROR RATES IN THE AFDC AND MEDICAID PROGRAMS - AND REDUCING
IDENTIFIABLE FRAUD, ABUSE, AND WASTE IS MARGINAL AT BEST, SINCE SUCH AN
APPROACH DOES NOTHING TO CORRECT, IDENTIFY, OR ELIMINATE PAYMENTS TO
SPECIFIC INDIVIDUALS THAT MIGHT FALL INTO THOSE CATEGORIES. IN FACT,
THE SECRETARY'S AUTHORITY TO ASSESS FISCAL SANCTIONS, ON THE BASIS OF
ERROR RATE STATISTICAL DATA IS OF QUESTIONABLE LEGAL VALIDITY. IN AN
OPINION TO THE OVERSIGHT SUBCOMMITTEE, HOUSE WAYS AND MEANS COMMITTEE IN
CONNECTION WITH ITS HEARINGS ON AFDC QUALITY CONTROL PROGRAMS, OCTOBER
31 - NOVEMBER 3, 1975, WE STATED:
"*** WE AGREE WITH HEW THAT IT HAS THE RIGHT TO DISALLOW FEDERAL
PARTICIPATION IN SPECIFIC ERRONEOUS STATE PAYMENTS, WHICH ERRORS WERE
DISCLOSED THROUGH SAMPLE AUDITS BUT NOT ON THE BASIS OF ERRORS IMPUTED
FROM THE QUALITY CONTROL SYSTEM BUT NOT ACTUALLY IDENTIFIED."
IN MAKING THE $831 MILLION REDUCTION, HEW MAY HAVE BEEN ATTEMPTING TO
COMPLY WITH THE OPINION OF THE JUSTICE DEPARTMENT THAT THE $1 BILLION
REDUCTION HAD TO BE MADE WHETHER OR NOR ATTRIBUTABLE TO REDUCED FRAUD,
ABUSE, AND WASTE. IN ANY EVENT, HEW HAS RECOGNIZED THAT ITS ACTION "IS
AN UNJUST AND INEFFECTIVE REMEDY TO THE PROBLEM OF FRAUD AND WASTE IN
FEDERALLY-ASSISTED PROGRAMS, AND UNTIL RECEIPT OF THE JUSTICE
DEPARTMENT'S OPINION, "*** (IT HAD) STEADFASTLY RESISTED ITS ADOPTION."
AS RECOGNIZED IN OUR MAY 7 OPINION, CONGRESS DID NOT INTEND OR EXPECT
THAT THE MICHEL AMENDMENT WOULD ADVERSELY AFFECT ANY STATUTORY
ENTITLEMENT PROGRAMS OR CAUSE ANY RECIPIENT LEGALLY ENTITLED TO RECEIVE
ASSISTANCE FROM HEW TO BE DENIED SUCH ASSISTANCE. THE SECOND PROVISO
WAS EVIDENTLY INTENDED TO PROTECT LEGITIMATE ENTITLEMENTS. THE DEBATES
ON THE MICHEL AMENDMENT ARE REPLETE WITH STATEMENTS TO THIS EFFECT BY
NUMEROUS MEMBERS, INCLUDING CONGRESSMAN MICHEL, THE SPONSOR OF THE
AMENDMENT. (SEE 124 CONG. REC. H5172-75 (DAILY ED. JUNE 8, 1978); ALSO
SEE 124 CONG. REC. S15984 (DAILY ED. SEPTEMBER 25, 1978); AND 124 CONG.
REC. S18443 (DAILY ED. OCTOBER 12, 1978).)
SINCE THE LANGUAGE OF THE MICHEL AMENDMENT DOES NOT SPECIFICALLY
ADDRESS THE "BORROWING AUTHORITY" QUESTION, THE CONCLUSION THAT SUCH
AUTHORITY COULD NOT BE USED IN THESE CIRCUMSTANCES WOULD HAVE TO REST ON
LEGISLATIVE INTENT. AS SUGGESTED ABOVE, THE LANGUAGE AND THE
LEGISLATIVE HISTORY OF THIS PROVISION STRONGLY SUPPORT THE VIEW THAT
IMPLEMENTATION OF THE $1 BILLION REDUCTION WAS NOT INTENDED TO AFFECT
LEGITIMATE ENTITLEMENTS. THE USE OF THE "BORROWING" AUTHORITY WOULD
THEREFORE BE JUSTIFIED AS A MEANS OF COMPLYING WITH THE INTENT TO
PROTECT THOSE ENTITLED TO PAYMENTS FROM CUTS WHICH COULD NOT BE
IDENTIFIED AS REQUIRED TO ELIMINATE FRAUD, ABUSE, OR WASTE.
OUR MAY 7, OPINION RECOGNIZED THE DIFFICULTY FACING HEW IN COMPLYING
WITH THE MICHEL AMENDMENT AS WE INTERPRETED IT, IF HEW WERE UNABLE TO
REDUCE EXPENDITURES BY $1 BILLION SOLELY THROUGH THE ELIMINATION OF
IDENTIFIABLE WASTE, FRAUD, AND ABUSE: WE SAID:
"*** IN THAT CASE HEW WOULD PRESUMABLY BE IN VIOLATION OF EITHER THE
INITIAL CLAUSE OF SECTION 201 OR THE PROVISOS THEREIN. ENTERING INTO OR
SATISFYING OBLIGATIONS IN EXCESS OF THE $53.1 BILLION TOTAL OF BUDGET
AUTHORITY PROVIDED IN THE ACT WOULD BE A VIOLATION OF THE INITIAL
CLAUSE, WHILE REDUCING OBLIGATIONS BELOW THE LINE ITEM AMOUNTS
APPROPRIATED FOR THE SPECIFIED PROGRAMS FOR ANY REASON OTHER THAN THE
ELIMINATION OF FRAUD, ABUSE, OR WASTE WOULD BE A VIOLATION OF THE
PROVISOS.
"IN THIS CONNECTION, THE CONFERENCE REPORT DIRECTS THE SECRETARY TO
REPORT HIS PROGRESS IN ACHIEVING THE $1 BILLION REDUCTION TO THE
CONGRESS. SIMILARLY, ANY LACK OF PROGRESS OR INABILITY IN ACHIEVING THE
REQUIRED REDUCTION AS SPECIFIED SHOULD ALSO BE REPORTED TO CONGRESS, SO
THAT ANY FURTHER CONGRESSIONAL ACTION DEEMED NECESSARY CAN BE TAKEN."
IN LIGHT OF HEW'S GENUINE DILEMMA IN THIS REGARD, HEW'S USE OF THE
"BORROWING AUTHORITY OFFERS A REASONABLE ALTERNATIVE UNDER THE
CIRCUMSTANCES (ALBEIT AN IMPERFECT ONE IN THE LONG RUN SINCE THE PROBLEM
MAY ONLY BE DEFERRED UNTIL NEXT YEAR.)
FINALLY, WE ARE AWARE THAT CONGRESSIONAL ACTION HAS BEEN TAKEN IN
REGARD TO THIS MATTER. ON JUNE 26, 1979, THE SENATE ADOPTED AN
AMENDMENT TO THE SUPPLEMENTAL APPROPRIATIONS BILL FOR THE CURRENT FISCAL
YEAR SETTING FORTH THE "SENSE OF THE SENATE" THAT HEW SHOULD "BORROW"
FUNDS TO BE REPAID FROM ITS 1980 APPROPRIATION IN ORDER TO COMPLY WITH
THE PROVISIONS OF THE MICHEL AMENDMENT. 125 CONG. REC. S8496-8505
(DAILY ED. JUNE 26, 1979). THE NEW SECTION 304 OF THE SUPPLEMENTAL
APPROPRIATIONS BILL WAS ADOPTED BY THE SENATE IN APPARENT AFFIRMATION OF
A COLLOQUY ON THE PREVIOUS DAY AMONG THE CHAIRMAN OF THE APPROPRIATIONS
COMMITTEE AND SEVERAL SENATORS IN WHICH THE PARTICIPANTS AGREED THAT HEW
COULD USE ITS "BORROWING" AUTHORITY IN THESE CIRCUMSTANCES SO THAT
"ANYONE WHO IS LEGITIMATELY ENTITLED TO PAYMENTS" SHOULD GET THEM. 125
CONG. REC. S8367 (DAILY ED. JUNE 25, 1979). SIMILAR VIEWS WERE
EXPRESSED SHORTLY THEREAFTER IN THE HOUSE OF REPRESENTATIVES BY
CONGRESSMAN MICHEL, THE SPONSOR OF THE ORIGINAL AMENDMENT. 125 CONG.
REC. H5223 (DAILY ED. JUNE 27, 1979).
ACCORDINGLY, IF THE FUNDS FOR THE AFDC AND MEDICAID PROGRAMS IN
FISCAL 1979 ARE INADEQUATE TO MAKE ENTITLEMENT PAYMENTS TO STATES IN THE
FINAL QUARTER OF THE 1979 FISCAL YEAR, DUE TO HEW'S ATTEMPTS TO
IMPLEMENT THE MICHEL AMENDMENT, IT IS OUR OPINION THAT HEW DOES HAVE
LEGAL AUTHORITY PURSUANT TO THE CITED PROVISIONS TO MAKE SUCH PAYMENTS
FOR THAT PERIOD AND TO CHARGE SUCH OBLIGATIONS TO THE CORRESPONDING HEW
APPROPRIATION FOR THE 1980 FISCAL YEAR.
B-192242, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. AWARD OF FEDERAL SUPPLY SERVICE MULTIPLE AWARD CONTRACT DOES NOT
CONSTITUTE ACCEPTANCE OF CONTRACTOR'S ARTICLE AS SATISFYING MINIMUM
NEEDS OF AGENCIES ORDERING FROM FEDERAL SUPPLY SCHEDULE. EVEN IF
CONTRACTOR'S ARTICLE IS LOWEST PRICED ON SCHEDULE, AGENCIES MAY PURCHASE
HIGHER PRICED ARTICLE FROM SCHEDULE IF LOWEST PRICED ARTICLE DOES NOT
FULFILL AGENCY'S MINIMUM NEEDS.
2. GENERAL SERVICES ADMINISTRATION DID NOT BREACH FEDERAL SUPPLY
SERVICE MULTIPLE AWARD CONTRACT WITH CONTRACTOR OFFERING LOWEST PRICED
TREE MARKING PAINT WHERE ESTIMATED QUANTITY TERM IN SOLICITATION STATES
ONE FIGURE WHICH INCLUDES GOVERNMENT'S REQUIREMENTS FOR PAINT WITH AND
WITHOUT TRACER ELEMENT, AND WHERE MOST GOVERNMENT PURCHASES WERE FOR
HIGHER PRICED TRACER ELEMENT PAINT. LOWEST PRICED CONTRACTOR CLAIMS
ESTIMATE WAS MISLEADING. HOWEVER, SOLICITATION EXPRESSLY PROVIDES THAT
NO GUARANTEE IS GIVEN THAT ANY QUANTITIES WILL BE PURCHASED AND ALSO
PROVIDES THAT AGENCIES MAY PURCHASE HIGHER PRICED ARTICLE IF JUSTIFIED
UNDER FEDERAL PROPERTY MANAGEMENT REGULATION SEC. 101-26.408. PRESENCE
OF FEATURE, I.E., TRACER ELEMENT, IN HIGHER PRICED ARTICLE WHICH IS NOT
AVAILABLE IN LOWER PRICED ARTICLE PROVIDES SUCH JUSTIFICATION.
3. WHERE GENERAL SERVICES ADMINISTRATION (GSA) SOLICITED FEDERAL
SUPPLY SERVICE MULTIPLE AWARD CONTRACTS FOR GOVERNMENT'S REQUIREMENTS
FOR TREE MARKING PAINT, INCLUDING PAINT WITH TRACER ELEMENT, GAO
RECOMMENDS GSA DETERMINE POSSIBILITY OF DRAFTING SPECIFICATIONS FOR
TRACER ELEMENT PAINT AND FORMALLY ADVERTISING. IF IMPOSSIBLE, FUTURE
MULTIPLE AWARD SOLICITATIONS SHOULD MAKE IT CLEAR TO ALL PROSPECTIVE
CONTRACTORS THAT OFFERS FOR TRACER ELEMENT PAINT ARE SOLICITED.
MCCLANE ENTERPRISES - RECONSIDERATION:
MCCLANE ENTERPRISES (MCCLANE) REQUESTS RECONSIDERATION OF OUR
DECISION IN 57 COMP. GEN. 583 (1978) WHICH DENIED MCCLANE'S CLAIM FOR
BREACH OF FEDERAL SUPPLY SERVICE (FSS) CONTRACT NO. GS-10S-40749 ISSUED
BY THE GENERAL SERVICES ADMINISTRATION (GSA). THE CONTRACT WAS A
REQUIREMENTS-TYPE CONTRACT FOR FSC 80 CLASS 8010 TREE MARKING PAINT
LISTED ON A MULTIPLE AWARD FSS SCHEDULE. WE RULED IN THAT DECISION
THAT, SINCE GSA MADE NO PROMISE OR GUARANTEE TO MCCLANE WITH RESPECT TO
THE VOLUME OF SALES WHICH COULD BE EXPECTED BY MCCLANE, GSA DID NOT
BREACH MCCLANE'S CONTRACT DESPITE THE FACT THAT MCCLANE OVER A 7-MONTH
PERIOD ONLY RECEIVED ORDERS AMOUNTING TO APPROXIMATELY $1,000, WHEREAS
THE REQUEST FOR PROPOSALS (RFP) STATED PREVIOUS PURCHASES FOR A 6-MONTH
PERIOD THAT WOULD ANNUALIZE TO $860,000. WE CONCERNED OURSELVES WITH
THE PROPRIETY OF THE FOREST SERVICE, DEPARTMENT OF AGRICULTURE
(AGRICULTURE), ORDERING APPROXIMATELY $434,000 OF TREE MARKING PAINT
WHICH WAS PRICED HIGHER THAN MCCLANE'S PAINT. THE HIGHER PRICED PAINT,
PRODUCED BY NELSON PAINT CO. (NELSON), WAS ALSO LISTED ON THE FSS
SCHEDULE. THE NELSON PAINT CONTAINS A TRACER ELEMENT DEVELOPED
ESPECIALLY FOR GOVERNMENT USE. WE HELD THAT AGRICULTURE DID NOT BREACH
MCCLANE'S CONTRACT BECAUSE AGRICULTURE WAS NOT REQUIRED TO USE THE
SCHEDULE AND, IN ANY EVENT, AGRICULTURE JUSTIFIED THE PURCHASE OF HIGHER
PRICED NELSON PAINT IN ACCORDANCE WITH THE FEDERAL PROPERTY MANAGEMENT
REGULATION (FPMR) SEC. 101-26.408-2 (1964 ED. AMEND. E-190).
AGRICULTURE'S JUSTIFICATION WAS THE NELSON PAINT CONTAINS A UNIQUE
TRACER ELEMENT WHICH IDENTIFIES MARKED TREES TO THE GOVERNMENT.
IN THE REQUEST FOR RECONSIDERATION, MCCLANE CONTENDS THAT, BY
ENTERING INTO A CONTRACT WITH MCCLANE, GSA ACCEPTED THE PAINT DESCRIBED
IN MCCLANE'S CONTRACT AS SATISFYING ANY AND ALL NEEDS OF THE GOVERNMENT.
MCCLANE ALSO CONTENDS THAT IF GSA WAS AWARE OF SPECIAL NEED FOR PAINT
CONTAINING A TRACER ELEMENT, IT SHOULD HAVE ISSUED A SOLICITATION FOR
SUCH PAINT AND GIVEN OTHER SUPPLIERS BESIDES NELSON AN OPPORTUNITY TO
OFFER A TRACER ELEMENT PAINT.
MCCLANE'S FIRST CONTENTION REFLECTS A MISUNDERSTANDING OF THE FSS
MULTIPLE AWARD SCHEDULE. WHEN GSA NEGOTIATES MULTIPLE AWARD CONTRACTS,
IT CONTEMPLATES THAT THE PRODUCT OFFERED BY THE LOWEST PRICED CONTRACTOR
WILL NOT ALWAYS SATISFY THE MINIMUM NEEDS OF USING AGENCIES. SEE FPMR
SEC. 101-26.408. AS EXPLAINED IN OUR PREVIOUS DECISION, A MANDATORY
USER OF THE FSS SCHEDULE MUST ORDER FROM THE CONTRACTOR OFFERING THE
LOWEST PRICED PRODUCT ON THE SCHEDULE IF THAT PRODUCT FULFILLS THE
AGENCY'S MINIMUM NEEDS. FPMR SECS. 101-26.408-3 AND 101-26.408-4 (1964
ED. AMEND. E-190); SEE ART METAL - U.S.A., INC., B-190127, JULY 10,
1978, 78-2 CPD 27. IF THAT PRODUCT DOES NOT FULFILL THE AGENCY'S
MINIMUM NEEDS, THE AGENCY MAY PURCHASE THE LOWEST PRICED PRODUCT WHICH
DOES FULFILL ITS MINIMUM NEEDS EVEN THOUGH THAT PRODUCT IS OFFERED AT A
HIGHER PRICE. ID. THEREFORE, AS THE CONTRACT EXPRESSLY PROVIDES, NO
GUARANTEE IS GIVEN THAT ANY QUANTITIES WILL BE PURCHASED FROM ANY
PARTICULAR CONTRACTOR, EVEN THE LOWEST PRICED CONTRACTOR.
NONETHELESS, FSS MULTIPLE AWARD CONTRACTS ARE VALID, ENFORCEABLE
CONTRACTS. B-121926, B-122682, FEBRUARY 7, 1956. EVEN THOUGH NO
PARTICULAR CONTRACTOR IS GUARANTEED ANY QUANTITY OF PURCHASES, THE
GOVERNMENT DOES GUARANTEE THAT MANDATORY USERS WILL PROCURE THEIR
REQUIREMENTS FROM CONTRACTORS LISTED ON THE SCHEDULE AND THAT MANDATORY
USERS WILL DETERMINE THEIR REQUIREMENTS AND WHICH PRODUCT FULFILLS THEIR
MINIMUM NEEDS IN GOOD FAITH. SHADER CONTRACTORS, INC. & CITIZENS
NATIONAL BANK OF ORLANDO V. UNITED STATES, 149 CT. CL. 535, 276 F.2D 1
(1960); B-170812, FEBRUARY 5, 1971.
MCCLANE DOES NOT ALLEGE THAT ANY USER AGENCY DETERMINED ITS
REQUIREMENTS IN BAD FAITH. MCCLANE CONTENDS THAT THE RFP ESTIMATE WAS
MISLEADING. HOWEVER, THE ESTIMATE PROVISION INCLUDED IN THE RFP IN
CONFORMANCE WITH 41 C.F.R. SEC. 5A-73.210-2 (1977) MERELY STATED THE
AMOUNT OF PURCHASES MADE FROM THE PREVIOUS CONTRACTOR. NO
REPRESENTATION WAS MADE AS TO THE QUANTITY THAT WOULD BE PURCHASED FROM
ANY OF THE CLASS OF MULTIPLE AWARD CONTRACTORS OF WHICH MCCLANE WAS ONE.
THE DOLLAR AMOUNT OF PURCHASES FOR A PRIOR 6-MONTH PERIOD WAS NO
ESTIMATE OF WHAT FUTURE REQUIREMENTS WOULD BE FROM ANY PARTICULAR
CONTRACTOR. ALTHOUGH MCCLANE'S PRICE WAS THE LOWEST, THE RFP MULTIPLE
AWARD SECTION PROVIDED THAT ORDERING AGENCIES WOULD PLACE ORDERS AT
OTHER THAN THE LOWEST PRICE IF JUSTIFIED UNDER FPMR SEC. 101-26.408.
AMONG THE NUMBER OF BASES FOR JUSTIFICATION IN THE FPMR FOR AN ORDER AT
OTHER THAN THE LOWEST PRICE OBTAINABLE IS THAT ANOTHER PRODUCT HAS A
FEATURE NOT IN A COMPARABLE ITEM ON THE SCHEDULE. THEREFORE, WE DO NOT
FIND THE ESTIMATE TO BE MISLEADING.
REGARDING MCCLANE'S SECOND CONTENTION, ALTHOUGH GSA MIGHT HAVE BEEN
REMISS IN THE MANNER IN WHICH IT OBTAINED PRICING FOR TRACER ELEMENT
PAINT, THE FACT REMAINS THAT NELSON PAINT INCLUDED IN THE SCHEDULE
CONTAINED THE TRACER ELEMENT AND, AS INDICATED ABOVE, ORDERING AGENCIES
HAD A RIGHT TO CONSIDER THE TRACER ELEMENT IN SELECTING TREE MARKING
PAINT FROM THE SCHEDULE. THEREFORE, IT WAS PROPER FOR ANY AGENCY HAVING
A NEED FOR THE TRACER ELEMENT TO ORDER PAINT CONTAINING THAT ELEMENT
FROM THE SCHEDULE.
ACCORDINGLY, THE PRIOR DENIAL OF THE MCCLANE CLAIM IS SUSTAINED.
HOWEVER, IN A SEPARATE LETTER OF TODAY TO THE ACTING ADMINISTRATOR OF
GSA, WE ARE RECOMMENDING THAT GSA REVIEW THE SITUATION TO DETERMINE IF
IT SHOULD CONTINUE TO INCLUDE TREE MARKING PAINT CONTAINING A TRACER
ELEMENT IN MULTIPLE AWARD SCHEDULES.
GSA SHOULD FORMALLY ADVERTISE A CONTRACT FOR PAINT CONTAINING THE
UNIQUE TRACER ELEMENT, UNLESS IT IS IMPOSSIBLE TO DRAFT SPECIFICATIONS.
THE MULTIPLE AWARD CONTRACTS IN THIS CASE WERE NEGOTIATED PURSUANT TO
THE AUTHORITY OF 41 U.S.C. SEC. 252(C)(10) (1976), WHICH PROVIDES THAT
CONTRACTS MAY BE NEGOTIATED "FOR PROPERTY OR SERVICES FOR WHICH IT IS
IMPRACTICABLE TO SECURE COMPETITION." WE WOULD NOT QUESTION GSA'S
DECISION TO NEGOTIATE MULTIPLE AWARD CONTRACTS UNDER THE STATUTORY
EXCEPTION, UNLESS THAT DECISION WAS UNREASONABLE. ART METAL - U.S.A.,
INC., SUPRA. WE HAVE HELD THAT MERE DIFFICULTY IN DEVELOPING
SPECIFICATIONS IS NOT IN ITSELF A REASONABLE GROUND FOR NEGOTIATION AND
THAT NEGOTIATION IS ONLY AUTHORIZED WHEN THE DRAFTING OF SPECIFICATIONS
IS "PRACTICALLY IMPOSSIBLE." ART METAL - U.S.A., INC., SUPRA;
INFORMATICS, INC., B-190203, MARCH 20, 1978, 78-1 CPD 215; 52 COMP.
GEN. 458, 461 (1973); SEE FPR SEC. 1-3.210(A) (1964 ED. CIRC. 1). IF
THER IS A PROPER BASIS TO CONTINUE INCLUDING THE PAINT IN MULTIPLE AWARD
SCHEDULES, WE ARE RECOMMENDING THAT FUTURE SOLICITATIONS MAKE IT CLEAR
TO ALL PROSPECTIVE CONTRACTORS THAT OFFERS FOR TRACER ELEMENT PAINTS ARE
SOLICITED.
B-192961, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE, CLASSIFIED AS GRADE GS-13, ALLEGES THAT HE WAS DETAILED TO
GS-14 POSITION FOR 20 MONTHS AND WAS WRONGFULLY DENIED TEMPORARY
PROMOTION. HE CLAIMS RETROACTIVE PAY UNDER TURNER-CALDWELL, 56 COMP.
GEN. 427 (1976). HIS CLAIM IS DENIED. RECORD FAILS TO INDICATE
ESTABLISHMENT OF HIGHER GRADED POSITION TO WHICH EMPLOYEE WAS ASSIGNED.
THE PRINCIPLES OF TURNER-CALDWELL ALLOWING RETROACTIVE TEMPORARY
PROMOTIONS FOR DETAILS TO HIGHER GRADE POSITIONS, DO NOT APPLY WHERE THE
POSITION INVOLVED WAS NOT AN ESTABLISHED HIGHER GRADE POSITION.
CHARLES W. MCGINNIS - CLAIM FOR RETROACTIVE TEMPORARY PROMOTION AND
BACKPAY:
MR. CHARLES W. MCGINNIS HAS REQUESTED RECONSIDERATION OF OUR CLAIMS
DIVISION'S DENIAL ON JUNE 14, 1978, OF HIS CLAIM OF A RETROACTIVE
TEMPORARY PROMOTION. MR. MCGINNIS IS A FORMER EMPLOYEE OF THE
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW), AND HIS CLAIM IS
BASED ON AN ALLEGED DETAIL TO A GS-14 POSITION DURING THE PERIOD JANUARY
2, 1975, TO SEPTEMBER 12, 1976.
THE CLAIMANT ENTERED ON DUTY WITH THE DIVISION OF MANAGEMENT, SOCIAL
AND REHABILITATION SERVICE, HEW, ON DECEMBER 10, 1972, AT GRADE GS-13 IN
THE GS-501-13 FINANCIAL MANAGEMENT ADVISER POSITION. EFFECTIVE JANUARY
2, 1975, MR. MCGINNIS WAS ASSIGNED TO THE POSITION OF STATE GRANTS
ADVISER FOR PENNSYLVANIA. EFFECTIVE SEPTEMBER 12, 1976, MR. MCGINNIS
WAS REASSIGNED FROM HIS FINANCIAL MANAGEMENT POSITION (GS-501-13) TO THE
POSITION OF SUPERVISORY STATE GRANTS MANAGER (GS-501-13).
ON JULY 21, 1977, MR. MCGINNIS FILED A CLAIM WITH HEW FOR A
RETROACTIVE TEMPORARY PROMOTION TO GS-14 AND BACKPAY FOR THE PERIOD OF
JANUARY 2, 1975, TO SEPTEMBER 12, 1976, WHEN HE SERVED AS STATE GRANTS
ADVISER FOR PENNSYLVANIA. UPON REVIEW OF THE MATTER, HEW AUTHORITIES
CONCLUDED THAT THE ASSIGNMENT OF MR. MCGINNIS TO THE POSITION OF STATE
GRANTS ADVISER FOR PENNSYLVANIA DID NOT ALTER HIS POSITION OF RECORD NOR
DID IT RESULT IN ADDED DUTIES OR RESPONSIBILITIES THAT WERE NOT ALREADY
A PART OF HIS JOB AS SUPERVISORY GRANTS MANAGER, GS-13. FURTHER, IT WAS
CONCLUDED THAT HE WAS NOT ASSIGNED TO A NEW POSITION DESCRIPTION OR TO
HIGHER GRADED DUTIES.
MR. MCGINNIS DISAGREED WITH HEW'S DENIAL OF HIS CLAIM AND SUBMITTED
THE MATTER TO THE GENERAL ACCOUNTING OFFICE. OUR CLAIMS DIVISION
DISALLOWED HIS CLAIM ON JUNE 14, 1978, FOR THE REASON THAT THERE WAS NO
ESTABLISHED POSITION CLASSIFIED AT A HIGHER GRADE TO WHICH HE WAS
ACTUALLY DETAILED.
ON THIS APPEAL, MR. MCGINNIS CONTENDS THAT POSITION DESCRIPTION
NUMBER RFO-1004, GS-501-14, APPLIED TO THE POSITION IN QUESTION FROM AT
LEAST THE FALL OF 1972 AND THAT HIS PREDECESSOR AS GRANTS MANAGER FOR
PENNSYLVANIA SERVED UNDER RFO-1004 AS A GRADE GS-14. MR. MCGINNIS
MAINTAINS THAT, SINCE HE PERFORMED THE FULL RANGE OF DUTIES AND
RESPONSIBILITIES OF THE POSITION, HE SHOULD BE PAID AT THE SAME RATE AS
HIS PREDECESSOR.
THE DEPARTMENT HAS ADVISED US IN REFERENCE TO MR. MCGINNIS' APPEAL
THAT THE PERSON WHO SERVED AS GRANTS ADVISER FOR PENNSYLVANIA PRIOR TO
MR. MCGINNIS HAD BEEN REASSIGNED TO THE POSITION OF SPECIAL ASSISTANT TO
THE REGIONAL COMMISSIONER, SOCIAL AND REHABILITATION SERVICE, GS-301-14,
BEGINNING SEPTEMBER 1, 1974. HIS DUTIES INCLUDED SPECIAL ASSIGNMENTS
FOR THE REGIONAL COMMISSIONER, AS WELL AS CARRYING ON THE DUTIES
ASSOCIATED WITH BEING THE GRANTS MANAGER FOR PENNSYLVANIA. THE DUTIES
OF SPECIAL ASSISTANT EQUATED TO THE GS-14 LEVEL, AND THE ADDITIONAL
RESPONSIBILITY FOR PENNSYLVANIA HAD NO IMPACT ON HIS GRADE. THE
RESPONSIBILITY FOR PENNSYLVANIA WAS REASSIGNED TO MR. MCGINNIS ON
JANUARY 2, 1975, AND HIS PREDECESSOR LOST THIS RESPONSIBILITY AND
CONCENTRATED HIS EFFORTS ON HIS RESPONSIBILITY AS SPECIAL ASSISTANT TO
THE REGIONAL COMMISSIONER. AT THE SAME TIME, MR. MCGINNIS LOST HIS
PRIOR RESPONSIBILITY FOR THE DISTRICT OF COLUMBIA. THE HEW STATES THAT
THE POSITION DESCRIPTION REFERRED TO BY MR. MCGINNIS, POSITION
DESCRIPTION NUMBER RFO-1004, WAS NEVER ASSIGNED TO EITHER MR. MCGINNIS
OR HIS PREDECESSOR.
MR. MCGINNIS' CLAIM WAS CONSIDERED BY HEW AND THIS OFFICE UNDER THE
DECISION IN EVERETT TURNER AND DAVID L. CALDWELL, 55 COMP. GEN. 539
(1975), AFFIRMED AT 56 COMP. GEN. 427 (1977). WE HELD THEREIN THAT
EMPLOYEES DETAILED TO HIGHER GRADE POSITIONS FOR MORE THAN 120 DAYS,
WITHOUT PRIOR CIVIL SERVICE COMMISSION APPROVAL, ARE ENTITLED TO
RETROACTIVE TEMPORARY PROMOTIONS WITH BACKPAY FOR THE PERIOD BEGINNING
WITH THE 121ST DAY OF THE DETAIL UNTIL THE DETAIL IS TERMINATED.
SUBSEQUENTLY, IN MATTER OF MARIE GRANT, 55 COMP. GEN. 785 (1976) WE
RULED THAT THE TURNER-CALDWELL DECISION APPLIED RETROACTIVELY TO
EXTENDED DETAILS TO HIGHER GRADE POSITIONS. IN RECONSIDERATION OF
TURNER-CALDWELL, 56 COMP. GEN. 427 (1977), WE REAFFIRMED OUR EARLIER
DETERMINATION. WE HELD THAT, IN THE LIMITED CIRCUMSTANCES OF DETAIL IN
EXCESS OF 120 DAYS AN EMPLOYEE COULD RECEIVE BACKPAY, BUT THAT RULE WAS
PREDICATED UPON THE EMPLOYEE BEING DETAILED, FORMALLY OR INFORMALLY TO
AN ESTABLISHED HIGHER GRADE POSITION. SEE 56 COMP. GEN. AT 430. THUS,
ALTHOUGH AN EMPLOYEE MAY NOT BE ALLOWED BACKPAY FOR THE PERFORMANCE OF
DUTIES WHICH SHOULD BE CLASSIFIED AT A HIGHER GRADE, HE MAY BE GRANTED
BACKPAY IF HE IS DETAILED TO A HIGHER GRADE POSITION AND RETAINED IN
THAT DETAIL FOR A PERIOD IN EXCESS OF THE TIME PERMITTED IN THE
MANDATORY REGULATIONS OF THE CIVIL SERVICE COMMISSION.
THE CIVIL SERVICE COMMISSION HAS PROMULGATED IMPLEMENTING GUIDANCE
CONCERNING TURNER-CALDWELL, SUPRA, IN BULLETIN NO. 300-40 DATED MAY 25,
1977, SUBJECT: GAO DECISION AWARDING BACKPAY FOR RETROACTIVE TEMPORARY
PROMOTIONS OF EMPLOYEES ON OVERLONG DETAILS TO HIGHER GRADED JOBS
(B-183086). PARAGRAPH 4 OF THAT BULLETIN STATES: "FOR PURPOSES OF THIS
DECISION, THE POSITION MUST BE AN ESTABLISHED ONE, CLASSIFIED UNDER AN
OCCUPATIONAL STANDARD TO A GRADE OR PAY LEVEL." THIS STATEMENT
EMPHASIZES THAT THE CRUCIAL ASPECT IN THE TURNER-CALDWELL LINE OF CASES
IS THAT THE POSITION OR DUTIES TO WHICH AN EMPLOYEE IS DETAILED BE THOSE
OF AN ESTABLISHED AND CLASSIFIED POSITION. SEE ALSO MATTER OF ROSS AND
SQUIRE, 57 COMP. GEN. 536 (1978); AND MATTER OF PATRICK J. FLEMING,
B-191413, MAY 22, 1978.
AS INDICATED ABOVE, IT IS THE POSITION OF HEW THAT THE ASSIGNMENT OF
MR. MCGINNIS AS STATE GRANTS ADVISER FOR PENNSYLVANIA DID NOT ALTER HIS
POSITION OF RECORD NOR DID IT RESULT IN ADDED DUTIES OR RESPONSIBILITIES
THAT WERE NOT ALREADY A PART OF HIS JOB AS SUPERVISORY GRANTS MANAGER,
GS-13. THE DEPARTMENT HAS ALSO REBUTTED THE CLAIMANT'S ARGUMENT THAT
THE POSITION WAS CLASSIFIED AT THE GS-14 LEVEL. THUS, DESPITE THE FACT
THAT HIS PREDECESSOR WAS A GS-14, MR. MCGINNIS DID NOT FULFILL THE
DUTIES OF AN ESTABLISHED CLASSIFIED GS-14 POSITION. THEREFORE,
TURNER-CALDWELL IS NOT APPLICABLE TO HIS CLAIM, AND THERE IS NO
AUTHORITY TO GRANT MR. MCGINNIS RETROACTIVE TEMPORARY PROMOTION AND
BACKPAY.
ACCORDINGLY, MR. MCGINNIS' CLAIM IS DENIED AND THE ACTION TAKEN BY
OUR CLAIMS DIVISION IS SUSTAINED.
B-193396, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EVEN IF BID OF LARGE BUSINESS IS DISREGARDED IN LOOKING AT DISPARITY
AMONG BIDS RECEIVED UNDER SMALL BUSINESS SET-ASIDE, CIRCUMSTANCES WERE
NOT SUCH AS TO PLACE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE
PROBABILITY OF MISTAKE. THEREFORE, CONTRACT MAY NOT BE RESCINDED ON
BASIS OF MISTAKE IN BID ALLEGED AFTER AWARD.
HANDY TOOL & MANUFACTURING CO., INC.:
HANDY TOOL & MANUFACTURING CO., INC. (HANDY) HAS REQUESTED RESCISSION
OF A CONTRACT ON THE BASIS OF A MISTAKE IN BID ALLEGED AFTER AWARD. FOR
THE REASONS STATED BELOW WE BELIEVE THE CONTRACT MAY NOT BE RESCINDED.
INVITATION FOR BIDS (IFB) NO. DLA 700-77-B-1288 (TOTALLY SET ASIDE
FOR SMALL BUSINESS CONCERNS) WAS ISSUED AUGUST 18, 1977, FOR 1200 SPUR
GEARS. THE GEARS WERE DESCRIBED BY SIX DRAWINGS LISTED IN THE IFB
SCHEDULE, BUT NOT PHYSICALLY ATTACHED TO THE SOLICITATION. HANDY'S BID
WAS THE LOWEST RECEIVED. HANDY WAS NOT REQUESTED BY THE CONTRACTING
OFFICER TO CONFIRM ITS BID AND ON OCTOBER 31, 1977, IT WAS AWARDED
CONTRACT NO. DLA 700-78-C-0253. FIRST DELIVERY OF THE SPUR GEARS WAS TO
BE BY APRIL 29, 1978.
BY LETTER DATED APRIL 28, 1978, SIX MONTHS AFTER AWARD AND ONE DAY
BEFORE THE FIRST SCHEDULED DELIVERY, HANDY CONTACTED THE AGENCY ALLEGING
A MISTAKE IN BID. HANDY STATED THAT IT DID NOT HAVE ENOUGH TIME TO
OBTAIN THE DRAWINGS PRIOR TO THE BID OPENING DATE, SO IT BID IN
IGNORANCE OF THEM. UPON RECEIPT OF THE DRAWINGS AFTER AWARD, HANDY
SAID, IT "DISCOVERED MANY CLOSE TOLERANCES AND THAT THE GEARS REQUIRED
100 PERCENT FUNCTIONAL TESTING." HANDY'S ALLEGED MISTAKE WAS THAT IT
ELECTED TO BID BEFORE SEEING THE DRAWINGS, WHICH DESCRIBED AN ITEM MORE
DIFFICULT AND EXPENSIVE TO MANUFACTURE THAN HANDY ANTICIPATED.
HANDY ARGUES THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE
OF THE PROBABILITY OF ERROR, AND THEREFORE SHOULD HAVE REQUESTED HANDY
TO VERIFY ITS BID, IN VIEW OF THE FOLLOWING CIRCUMSTANCES: (1) THE
DRAWINGS INCORPORATED BY REFERENCE IN THE IFB SCHEDULE DESCRIBE A MUCH
MORE SOPHISTICATED ITEM THAN APPEARS FROM THE FACE OF THE SOLICITATION;
(2) THE ITEM IS AVAILABLE ONLY FROM THE SECOND LOW BIDDER, A LARGE
BUSINESS, MAKING SUSPECT ANY LOWER BID FROM A SMALL BUSINESS SUCH AS
HANDY; AND (3) THERE WERE MATERIAL DISCREPANCIES BETWEEN THE AMOUNT OF
HANDY'S BID AND THOSE OF OTHER BIDDERS, AS WELL AS PRIOR BIDS FOR THIS
ITEM.
DLA DENIED HANDY'S REQUEST FOR RELIEF, FINDING THAT THE INFORMATION
REASONABLY AVAILABLE TO THE CONTRACTING OFFICER DID NOT PLACE HER ON
CONSTRUCTIVE NOTICE OF ERROR. IT IS THIS DECISION WHICH HANDY HAS ASKED
US TO REVIEW. DLA HAS TERMINATED HANDY'S CONTRACT FOR DEFAULT WHILE THE
MATTER HAS BEEN BEFORE OUR OFFICE.
WE BELIEVE THE RECORD SUPPORTS THE AGENCY'S DENIAL OF RELIEF.
CONTRARY TO HANDY'S ARGUMENT, WE SEE NOTHING IN THE IFB SCHEDULE WHICH
WOULD INCREASE THE LIKELIHOOD OF BIDDER ERROR. THE SCHEDULE SET FORTH
THE ITEM'S PART NUMBER AND, FOLLOWING A FOUR-LINE ITEM DESCRIPTION,
PROVIDED THE ITEM MUST BE IN ACCORDANCE WITH SIX SPECIFICALLY IDENTIFIED
DRAWINGS. THE DRAWINGS WERE NOT INCLUDED WITH THE IFB BUT COULD BE
OBTAINED BY BIDDERS ON REQUEST. THERE DOES NOT APPEAR TO BE ANY
CONFLICT BETWEEN THE DRAWINGS AND THE ITEM DESCRIPTION IN THE IFB
SCHEDULE; RATHER, THE DRAWINGS EXPAND UPON THE GENERAL DESCRIPTION BY
SPELLING OUT PRECISE DIMENSIONAL AND OTHER REQUIREMENTS.
THE PLACING OF DETAILED SPECIFICATION REQUIREMENTS IN SEPARATE
DRAWINGS INCORPORATED BY REFERENCE IS A COMMONLY USED TECHNIQUE. WE DO
NOT BELIEVE IT CREATED ANY UNUSUAL RISK OF BIDDER ERROR.
HANDY ALSO ARGUES THAT THE GEARS ARE ONLY AVAILABLE FROM ONE
MANUFACTURER, DANA CORPORATION, A LARGE BUSINESS, WHICH SHOULD HAVE
HANDY. HOWEVER, OF THE EIGHT BIDDERS ON THIS SOLICITATION (INCLUDING
DANA) ONLY ONE, TRANSPORTATION PARTS OF NEW YORK, REPRESENTED ITSELF TO
BE A DEALER RATHER THAN A MANUFACTURER OF THE ITEM. PAST PROCUREMENTS
OF THE ITEM HAVE INCLUDED FIRMS OTHER THAN DANA. WE DO NOT BELIEVE
HANDY HAS ESTABLISHED THAT THE ITEMS ARE AVAILABLE ONLY FROM DANA.
FINALLY, HANDY ARGUES THAT DISCREPANCIES IN THE BID PRICES SHOULD
HAVE ALERTED THE CONTRACTING OFFICER TO THE PROBABILITY OF ERROR.
WHEN A MISTAKE IS ALLEGED AFTER AWARD OF A CONTRACT, OUR OFFICE WILL
GRANT RELIEF ONLY IF THE MISTAKE WAS MUTUAL - WHICH IS NOT THE CASE HERE
- OR IF THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF
A UNILATERAL ERROR PRIOR TO AWARD. NO VALID AND BINDING CONTRACT IS
CONSUMMATED WHERE THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF
THE PROBABILITY OF ERROR, BUT FAILED TO TAKE PROPER STEPS TO VERIFY THE
BID. WENDER PRESSES, INC. V. UNITED STATES, 343 F.2D 961 (CT. CL.
1965).
THE TEST FOR CONSTRUCTIVE NOTICE IS ONE OF REASONABLENESS; WHETHER
UNDER THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE THERE ARE
FACTORS WHICH SHOULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF
THE CONTRACTING OFFICER. 53 COMP. GEN. 30 (1973); UNITED SOUND, INC.,
B-187273, JANUARY 19, 1978, 78-1 CPD 50. GENERALLY, A CONTRACTING
OFFICER HAS NO REASON TO SUSPECT ERROR WHERE A LOW BID IS IN LINE WITH
OTHER BIDS RECEIVED AND WITH THE GOVERNMENT ESTIMATE. PAUL HOLM
COMPANY, INC., B-193911, MAY 2, 1979, 79-1 CPD 306.
AT THE TIME BETWEEN BID OPENING AND AWARD, THE CONTRACTING OFFICER
HAD ONLY A "TRAILER SHEET" WHICH GAVE THE PRIOR HISTORY FOR THIS ITEM'S
PROCUREMENT AS WELL AS THE GOVERNMENT'S ESTIMATED UNIT PRICE. THE
GOVERNMENT'S ESTIMATED PRICE WAS SHOWN AS $34.74 WHILE PRIOR PRICES
RANGED FROM A LOW OF $20.00 TO A HIGH OF $37.70. WE HAVE BEEN ADVISED
THAT IN RESPONSE TO THE PRIOR YEAR'S SOLICITATION FOR THIS ITEM, HANDY
SUBMITTED THE THIRD LOW BID OF $40.00; THE LOWEST BID WAS $32.03, AND
THE SECOND LOW WAS $35.44. (HANDY HAS CHOSEN NOT TO EXPLAIN WHETHER IT
CONSULTED THE DRAWINGS FOR THIS ITEM BEFORE BIDDING $40.00 THE PREVIOUS
YEAR, OR HOW IT ARRIVED AT ITS PRICE FOR THE CURRENT CONTRACT.)
UNDER THE PRESENT IFB, THE FOLLOWING BIDS WERE RECEIVED.
BIDDER UNIT PRICE
HANDY $31.80
DANA CORP. 36.77
TRANSPORTATION PARTS 42.44
NAPCO INDUSTRIES 55.65
ARJAY MACHINE CO. 64.00
ARBEE CORPORATION 80.93
JO-BAR MFG. CORP. 82.10
BACHAN AEROSPACE CORP. 128.90
HANDY'S BID, THEREFORE, WAS WITHIN THE RANGE OF RECENT YEARS'
CONTRACTS FOR THIS ITEM, WHERE UNIT PRICES FLUCTUATED BETWEEN $20.00 AND
$37.70. THE BID WAS 8.5 PERCENT BELOW THE GOVERNMENT ESTIMATE ($34.74)
AND 10.2 PERCENT LESS THAN THE MOST RECENT CONTRACT PRICE ($35.44).
HOWEVER, THAT CONTRACT WAS FOR ONE-THIRD THE QUANTITY INVOLVED HERE.
LOOKING AT THE OTHER BIDS RECEIVED, HANDY'S BID WAS 13.5 PERCENT BELOW
DANA'S SECOND LOW BID AND 33.4 PERCENT BELOW TRANSPORTATION PARTS' THIRD
LOW BID.
SINCE DANA IS A LARGE BUSINESS INELIGIBLE FOR AWARD UNDER THIS
PROCUREMENT, WE HAVE SERIOUS RESERVATIONS AS TO WHETHER ITS BID SHOULD
HAVE BEEN CONSIDERED BY THE CONTRACTING OFFICER IN LOOKING AT THE
DISPARITY IN PRICES. EVEN IF DANA'S BID IS DISREGARDED, HOWEVER, WE DO
NOT BELIEVE THE CIRCUMSTANCES OF THIS PROCUREMENT WERE SUCH THAT THE
CONTRACTING OFFICER SHOULD HAVE BEEN PLACED ON NOTICE OF THE PROBABILITY
OF ERROR. HANDY'S BID PRICE WAS WITHIN THE RANGE OF PAST PRICES FOR
THIS ITEM, IT WAS LESS THAN 10 PERCENT BELOW THE GOVERNMENT ESTIMATE AND
ABOUT 10 PERCENT BELOW THE MOST RECENT PRICE PAID FOR A SMALLER QUANTITY
OF THE ITEM. ALTHOUGH HANDY'S BID WAS APPROXIMATELY ONE-THIRD LESS THAN
THAT OF THE NEXT LOW SMALL BUSINESS CONCERN, WE DO NOT THINK THAT IS
DISPOSITIVE IN VIEW OF ALL THE INFORMATION BEFORE THE CONTRACTING
OFFICER WHICH SUGGESTS THAT HANDY REDUCED ITS PRICE TO BE MORE
COMPETITIVE.
SINCE THE BID WAS ACCEPTED BY THE GOVERNMENT IN GOOD FAITH AND
WITHOUT NOTICE OF A MISTAKE, EITHER ACTUAL OR CONSTRUCTIVE, A VALID AND
BINDING CONTRACT RESULTED. THUS, THERE IS NO LEGAL BASIS FOR GRANTING
THE RELIEF REQUESTED.
B-194154, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. IN NEGOTIATED SMALL PURCHASE WHICH ALL PARTIES TREATED AS
ADVERTISED PROCUREMENT, CONTRACTING OFFICER'S APPLICATION OF RULES
REGARDING RESPONSIVENESS AND AMBIGUOUS BIDS DOES NOT PROVIDE BASIS FOR
OVERTURNING AWARD, SINCE IT IS NOT CLEAR THAT PROTESTER WOULD HAVE
SUBMITTED WINNING PROPOSAL AND CONTRACTING OFFICER ACTED IN GOOD FAITH
IN APPLYING ADVERTISING RULES.
2. CLARIFICATION OF PRICE, IN NEGOTIATED SMALL PURCHASE, DOES NOT
CONSTITUTE AUCTION; TERM CONNOTES DIRECT PRICE COMPETITION BETWEEN
OFFERORS, NOT DISCUSSIONS BETWEEN OFFEROR AND GOVERNMENT IN WHICH
COMPETITIVE STANDING WITH REGARD TO PRICE IS NOT DISCLOSED.
DELORA HAIDLE - RECONSIDERATION:
DELORA HAIDLE, ONE OF THREE OFFERORS OF JANITORIAL SERVICES FOR THE
EUREKA, MONTANA, RANGER STATION UNDER A SOLICITATION ISSUED BY THE
FOREST SERVICE, REQUESTS RECONSIDERATION OF OUR DECISION OF APRIL 6,
1979.
ON THAT DATE, WE SUMMARILY DENIED MRS. HAIDLE'S PROTEST AGAINST AWARD
ON GROUNDS THAT HER BID HAD BEEN PROPERLY REJECTED AS NONRESPONSIVE. WE
ALSO FOUND HER PRICE TO BE AMBIGUOUS. SEE DELORA HAIDLE, B-194154,
APRIL 6, 1979, 79-1 CPD 243. FOR THE FOLLOWING REASONS, WE FIND NO
BASIS FOR OVERTURNING THE AWARD.
IN MRS. HAIDLE'S PROTEST AND OUR DECISION, THE SOLICITATION, NO.
R1-14-79-5, WAS ERRONEOUSLY REFERRED TO AS AN INVITATION FOR BIDS,
INDICATING PROCUREMENT BY FORMAL ADVERTISING. AFTER THE DECISION WAS
ISSUED, WE RECEIVED A FOREST SERVICE REPORT ON THE PROTEST WHICH REVEALS
THAT THIS WAS A NEGOTIATED PROCUREMENT UNDER THE AUTHORITY FOR SMALL
PURCHASES (UNDER $10,000). HOWEVER, ALL PARTIES TREATED IT AS IF IT
WERE AN ADVERTISED PROCUREMENT.
AS ISSUED ON JANUARY 5, 1979, THE SOLICITATION COVERED JANITORIAL
SERVICES FOR 12 MONTHS; MRS. HAIDLE MAILED A "SEALED BID" ON JANUARY
12, 1979, OFFERING TO PERFORM FOR A UNIT PRICE OF $350 A MONTH OR FOR A
TOTAL OF $4,200. ON JANUARY 15, 1979, THE FOREST SERVICE SHORTENED THE
CONTRACT PERIOD TO 11 MONTHS AND AMENDED THE SOLICITATION ACCORDINGLY.
MRS. HAIDLE STATES THAT WHEN SHE RECEIVED THE AMENDMENT, SHE
TELEPHONED THE CONTRACTING OFFICER, WHO TOLD HER SHE MUST ACKNOWLEDGE IT
IN WRITING BEFORE JANUARY 22, 1979 (THE CLOSING DATE FOR RECEIPT OF
INITIAL PROPOSALS), BUT THAT SHE SHOULD NOT WRITE A NEW FIGURE ON THE
AMENDMENT SHEET BECAUSE IT WOULD BE "CONFUSING AT TIME OF BID OPENING."
CONSEQUENTLY, MRS. HAIDLE STATES, SHE ATTEMPTED TO MAKE CLEAR WHAT HER
BID STOOD FOR BY RETURNING THE AMENDMENT WITH THE FOLLOWING NOTATION:
"PRESENT BID WILL STAND, BASED ON 11-MONTH CONTRACT.
"4,200 PER 12 MONTHS."
MRS. HAIDLE FURTHER STATES THAT SHE ASSUMED HER 12-MONTH PRICE WOULD
BE PRO-RATED, AND THAT SHE HAS LOST $3,850 ($350 X 11) IN INCOME THIS
YEAR BECAUSE THE FOREST SERVICE DID NOT CONSIDER HER BID, BUT AWARDED A
$4,100 CONTRACT TO THE NEXT-LOWEST OFFEROR.
IN OUR DECISION OF APRIL 6, 1979, WE STATED THAT MRS. HAIDLE'S BID
WAS NONRESPONSIVE BECAUSE IT FAILED TO CONFORM TO THE AMENDED
SOLICITATION, WHICH REQUIRED JANITORIAL SERVICES FOR 11 MONTHS. EVEN
ASSUMING MRS. HAIDLE'S NOTATION MEANT HER PRICE WOULD BE 11/12 OF
$4,200, WE ADDED, THE BID WAS PROPERLY REJECTED BECAUSE IT WAS SUBJECT
TO TWO REASONABLE INTERPRETATIONS, ONE RESPONSIVE AND THE OTHER
NONRESPONSIVE, AND COULD NOT BE EXPLAINED AFTER OPENING.
THE CONTRACTING OFFICER'S LOG OF HIS JANUARY 16, 1979, TELEPHONE
CONVERSATION WITH MRS. HAIDLE STATES.
"SHE TOLD ME SHE HAD RECEIVED AMENDMENT 1 BUT SHE HAD ALREADY
SUBMITTED A BID WHICH REFLECT A PRICE FOR 11 MOS., ALTHOUGH SCHEDULE OF
ITEMS STATED 12 MONTHS. ***"
THIS, WE BELIEVE, TENDS TO CONFIRM MRS. HAIDLE'S STATEMENT THAT SHE
EXPECTED HER UNIT PRICE TO BE PRO-RATED.
WE NOTE, MOREOVER, THAT THE REGULATIONS WHICH APPLY TO SMALL
PURCHASES, FEDERAL PROCUREMENT REGULATIONS (FPR) SECS. 1-3.600 - 603-2
(1964 ED.), PROVIDE FOR USE OF REQUESTS FOR QUOTATIONS, PERMIT THE
CONTRACTING OFFICER TO OBTAIN QUOTATIONS ORALLY, AND REQUIRE ONLY
"REASONABLE" COMPETITION, MEANING A SUFFICIENT NUMBER OF QUOTATIONS FROM
QUALIFIED SOURCES TO ASSURE THAT THE PROCUREMENT IS FAIR TO THE
GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. ID., SEC.
1-3.603-1(A)(1).
IF THE CONTRACTING OFFICER HAD BEEN AWARE OF AND/OR HAD FOLLOWED
THESE REGULATIONS, WHICH ARE EVEN MORE FLEXIBLE THAN THOSE FOR STANDARD
NEGOTIATED PROCUREMENTS, HE COULD HAVE ASKED MRS. HAIDLE TO CLARIFY HER
PRICE. SUCH CLARIFICATION WOULD NOT HAVE CONSTITUTED AN AUCTION,
BECAUSE IN NEGOTIATION, THAT TERM CONNOTES DIRECT PRICE COMPETITION
BETWEEN TWO OFFERORS, NOT DISCUSSIONS BETWEEN AN OFFEROR AND THE
GOVERNMENT WHEN THE OFFEROR'S COMPETITIVE STANDING WITH REGARD TO PRICE
IS NOT DISCLOSED. WASHINGTON SCHOOL OF PSYCHIATRY, B-192756, MARCH 14,
1979, 79-1 CPD 178 AT 11.
WE BELIEVE THE USE OF SOLICITATION FORMS WITH A BLANK FOR UNIT PRICES
ALSO CONTRIBUTED TO THE MISUNDERSTANDING. MRS. HAIDLE COMPLETED THE
UNIT PRICE, BUT WE NOTE THAT THE AWARDEE MERELY CIRCLED 12, WHICH
INDICATED THE NUMBER OF MONTHS ON THE SCHEDULE OF ITEMS, WROTE 11 ABOVE
IT, AND FILLED IN A TOTAL, $4,100, IGNORING UNIT PRICE.
UNFORTUNATELY, WE CANNOT BE CERTAIN, EXCEPT FROM MRS. HAIDLE'S
POST-AWARD PROTEST, WHAT PRICE SHE ACTUALLY INTENDED TO OFFER. WE DO
NOT FIND ANY EVIDENCE OF FRAUD OR INTENTIONAL MISCONDUCT ON THE PART OF
THE CONTRACTING OFFICER, WHO BELIEVED HE WAS CORRECT IN APPLYING THE
RULES REGARDING RESPONSIVENESS AND AMBIGUOUS BIDS TO THIS PROCUREMENT.
OUR PRIOR DECISION IS THEREFORE AFFIRMED.
BY LETTER OF TODAY, HOWEVER, WE ARE ADVISING THE SECRETARY OF
AGRICULTURE THAT IN FUTURE SMALL PURCHASES, THE FOREST SERVICE SHOULD
USE THE MORE INFORMAL METHODS OF NEGOTIATION PRESCRIBED BY THE
REGULATIONS.
B-194435, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
REJECTION OF ALL BIDS AND CANCELLATION OF IFB ON BASIS OF
UNREASONABLE PRICES IS PROPER WHERE PROTESTER'S BID IS 23 PERCENT HIGHER
THAN LOW NONRESPONSIVE BID, WHICH WAS ADJUSTED BY AGENCY TO REFLECT
INCREASED QUANTITIES IN UNACKNOWLEDGED AMENDMENT. CONTRACTING OFFICER'S
PARTIAL RELIANCE ON ERRONEOUS INFORMATION IN DECIDING TO CANCEL
PROCUREMENT IS INSUFFICIENT BASIS FOR CONCLUDING THAT PROTESTER'S BID
WAS IMPROPERLY DETERMINED TO BE UNREASONABLE WHERE SUBSEQUENTLY
DEVELOPED INFORMATION SUPPORTS THE DETERMINATION.
ESPEY MANUFACTURING AND ELECTRONICS CORPORATION:
ESPEY MANUFACTURING AND ELECTRONICS CORPORATION (ESPEY) PROTESTS THE
CANCELLATION OF INVITATION FOR BIDS (IFB) NO. N00140-78-B-1788, ISSUED
BY THE NAVY FOR TWO TYPES OF GLIDE SLOPE INDICATORS WITH SPARE PARTS
KITS.
ESPEY PROTESTS ON ESSENTIALLY TWO GROUNDS: (1) THAT, NOTWITHSTANDING
THE NAVY'S STATEMENTS TO THE CONTRARY, ALL BIDS WERE NOT REJECTED
BECAUSE OF THE UNREASONABLENESS OF THE PRICES; AND (2) THAT THERE WAS
NO BASIS UPON WHICH TO CONCLUDE THAT ESPEY BID AN UNREASONABLE PRICE.
THE GOVERNMENT ESTIMATE WAS $159,700. THE ESTIMATE WAS PREPARED TO
SUPPORT THE ORIGINAL PURCHASE REQUEST AND WAS NOT THEREAFTER MODIFIED
ALTHOUGH THE IFB WAS AMENDED SIX TIMES TO PROVIDE MISSING DRAWINGS, MAKE
TECHNICAL CLARIFICATIONS, UPDATE THE DRAWING PACKAGE, EXTEND OPENING
DATES, AND, FINALLY, INCREASE THE QUANTITY OF ONE TYPE OF GLIDE SLOPE
INDICATOR AND KIT FROM 7 TO 15.
THREE BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION. THE BID OF
CONNECTICUT VALLEY INDUSTRIES, INC. (CVII), WAS REJECTED AS
NONRESPONSIVE FOR FAILURE TO ACKNOWLEDGE THE SIXTH AMENDMENT WHICH
INCREASED THE QUANTITIES. THE NAVY INADVERTENTLY FAILED TO MAIL THE
AMENDMENT TO CVII. CVII'S BID OFFERED THE LOWEST UNIT PRICES FOR ALL
ITEMS SET FORTH IN THE ORIGINAL SOLICITATION. ESPEY'S BID WAS SECOND
LOW AND RESPONSIVE AT $298,000. THE THIRD LOW BID WAS $736,000.
HOWEVER, THIS WAS REDUCED TO $370,860 BY A LATE MODIFICATION.
THE NAVY REPORTS THAT THE CONTRACTING OFFICER WENT THROUGH THE
FOLLOWING PROCEDURES IN DETERMINING TO CANCEL AND RESOLICIT THE
PROCUREMENT: (1) THE ESPEY BID ($298,000) WAS COMPARED WITH THE
GOVERNMENT ESTIMATE ($159,000); (2) THE ESPEY BID WAS COMPARED WITH THE
"EXTENDED" CVII BID ($241,348.11) (REVISED QUANTITIES OF UNACKNOWLEDGED
AMENDMENT TIMES THE BID'S UNIT PRICES); AND (3) A PREVIOUS (MARCH 1977)
ESPEY UNIT PRICE BID ($1,950 FOR 41 UNITS) FOR A SIMILAR ITEM WAS
COMPARED WITH THE CURRENT ESPEY UNIT PRICE BID ($4,000 FOR 37 UNITS).
THE RECORD SHOWS THAT THE DECISION TO CANCEL THE IFB WAS BASED PRIMARILY
UPON THE DIFFERENCE BETWEEN THE ESPEY BID AND THE NONRESPONSIVE
"EXTENDED" BID OF CVII. IN REPORTING HIS DECISION TO CANCEL AND
READVERTISE TO THE NAVAL REGIONAL PROCUREMENT OFFICE, REVIEW BOARD
(BOARD), THE CONTRACTING OFFICER OBSERVED:
"*** IT IS CONSIDERED THAT THE SIGNIFICANT DIFFERENCE OF $56,651.00
IN THE SECOND LOW BIDDER PRICE WOULD MERIT CONSIDERATION FOR THE
CANCELLATION AND RE-SOLICITATION OF THIS PROCUREMENT. THIS DIFFERENCE
IS BASED ON THE NEGOTIATOR COMPUTING WHAT *** (CVII'S) BID PRICES WOULD
BE FOR THE INCREASED QUANTITIES USING THE BID UNIT PRICES VS. BID PRICES
OF *** (ESPEY).
"CONSIDERING THERE WAS NO DELIBERATE INTENT ON THE PART OF GOVERNMENT
TO PREJUDICE THIS PROCUREMENT AND IN THE BEST INTEREST OF THE GOVERNMENT
TO OBTAIN THE MOST REASONABLE PRICE, IT IS FELT THAT THE CANCELLATION
AND RE-SOLICITATION IS JUSTIFIED BASED ON THE PRICE DIFFERENCE REVEALED
IN THE PRESENT IFB AND FOR REASONS DETAILED ABOVE. IT IS THEREFORE
RECOMMENDED THAT APPROVAL BE GRANTED TO CANCEL IFB N00140-78-B-1788 AND
RESOLICIT WITH A TWENTY DAY OPENING DATE, ALL BIDDERS WHO WERE SOLICITED
OR REQUESTED A BID SET.
"THIS WAS DISCUSSED WITH OFFICE OF COUNSEL *** (ATTORNEY) WHO IS IN
AGREEMENT WITH THIS RECOMMENDED COURSE OF ACTION.
"REVIEWED BY COUNSEL: (X) YES ( ) NOT REQUIRED"
THESE REMARKS WERE FOLLOWED BY THE ATTORNEY'S HANDWRITTEN CONCURRENCE
WHICH READS:
"CONCUR
"CANCELLATION OF IFB ON BASIS THAT RESPONSIVE BIDS ARE AT
UNREASONABLE PRICE IS SUPPORTABLE.
*** (ATTORNEY)"
THE BOARD CONCURRED IN THE CONTRACTING OFFICER'S DECISION.
THE NAVY CONTENDS THAT ALL BIDS WERE REJECTED BECAUSE THE PRICES WERE
UNREASONABLE. ESPEY, HOWEVER, BECAUSE THE BOARD DOCUMENTS DO NOT USE
THE WORD "UNREASONABLE," URGES THAT THE "ACTUAL WRITINGS AND MEMORANDA
BEFORE ANY LAWYERS GOT INVOLVED" INDICATE THAT THE CANCELLATION WAS
BASED UPON PRICE DIFFERENCE AND NOT UNREASONABLENESS. ESPEY BELIEVES
THAT UNDERLYING THE CANCELLATION IS NOTHING MORE THAN THE NAVY'S DESIRE
TO MAKE AMENDS FOR FAILING TO MAIL THE FINAL AMENDMENT TO CVII. ESPEY
POINTS OUT THAT WHEN THE NAVY ORIGINALLY NOTIFIED IT OF THE REJECTION OF
ITS BID IT FAILED TO FURNISH ANY REASON FOR THE REJECTION.
WE DISAGREE WITH ESPEY. THE ABOVE-QUOTED FORM SHOWS THAT REVIEW BY
COUNSEL WAS A PREREQUISITE TO SUPPORT ANY FINAL BOARD ACTION ON THE
CANCELLATION APPARENTLY TO INSURE THAT BOARD ACTION HAS A LEGAL BASIS.
THE ATTORNEY'S HANDWRITTEN CONCURRENCE INDICATED THAT THE PROCUREMENT
COULD BE CANCELLED ON THE BASIS OF UNREASONABLE PRICE. IN ANY EVENT, IT
IS CLEAR TO US THAT AN UNREASONABLE PRICE DETERMINATION WAS INHERENT IN
THE CONTRACTING OFFICER'S AND BOARD'S DECISIONS TO CANCEL THE
PROCUREMENT AND THE CONTEMPORANEOUS DOCUMENTATION'S FAILURE TO INCLUDE
THE TERM "UNREASONABLE PRICE" IS OF NO CONSEQUENCE.
IN THE CONTRACTING OFFICER'S PRESENTATION TO THE BOARD, THE FOLLOWING
FACTUAL STATEMENTS WERE MADE TO SUPPORT THE RELEVANCE OF THE CVII BID
FOR PRICE REASONABLENESS PURPOSES:
"THE NEGOTIATOR HAS INFORMALLY REVIEWED *** (CVII'S) PERFORMANCE
HISTORY WITH DCASMA (DEFENSE CONTRACT ADMINISTRATION SERVICES MANAGEMENT
AREA) HARTFORD AND NAEC. THEY REPORTED THE COMPANY TO BE A SATISFACTORY
SOURCE OF SUPPLY.
"DCASMA ADVISES THAT THE COMPANY COMPLETED THEIR FOUR GOVERNMENT
CONTRACTS WITH LITTLE OR NO DELAY. CURRENTLY THEY HAVE A NAVY CONTRACT
FOR MICROFILM VIEWERS TOTALLING $2,380,000.00 AND TWO AIR FORCE
CONTRACTS FOR OVERHEAD PROJECTORS TOTALING $264,000.00 AND $381,000.00
RESPECTIVELY. NAEC REPRESENTATIVE *** HAS DEALT WITH THIS CONTRACTOR ON
CONTRACT N00156-78-C-1090 FOR LIGHTING CONTROL PANELS USED IN THE GLIDE
SLOPE SYSTEMS. THE CONTRACT TOTALLED $50,000.00 AND *** CVII DELIVERED
A SATISFACTORY PRODUCT. *** NAEC REPRESENTATIVE FEELS THAT WITH ***
CVII'S EXPERIENCE WITH OPTICS, THEY WOULD BE A SATISFACTORY SUPPLIER FOR
THE EQUIPMENT REQUIRED UNDER THIS IFB."
ESPEY REBUTTED THE ABOVE STATEMENTS AND ADVISED THAT THE $2,380,000
MICROFILM VIEWER CONTRACT WAS NOT AWARDED TO CVII BUT WAS INSTEAD
AWARDED TO A COMPANY HAVING A SIMILAR NAME. ESPEY BELIEVES THAT THE TWO
AIR FORCE CONTRACTS WERE ALSO AWARDED TO THE FIRM WITH THE SIMILAR NAME
BECAUSE THE CONTRACT NUMBERS INDICATE AWARD 2 YEARS PRIOR TO THE
INCORPORATION OF CVII. FINALLY, REGARDING THE $50,000 FOR LIGHTING
CONTROL PANELS WHICH WERE ALLEGED TO HAVE BEEN SATISFACTORILY DELIVERED,
ESPEY LEARNED THAT A MARCH 19, 1979, DELIVERY DATE HAD NOT BEEN MET.
THE NAVY ADMITS THAT ESPEY IS CORRECT IN THAT THE $2,380,000
MICROFILM VIEWER CONTRACT AND THE TWO AIR FORCE CONTRACTS WERE AWARDED
TO A FIRM OTHER THAN CVII. THE NAVY ALSO ADMITS THAT DELIVERY HAS NOT
BEEN MADE UNDER THE $50,000 LIGHTING CONTROL PANEL CONTRACT. HOWEVER,
THE NAVY NOTES THAT NONDELIVERY IS NOT ATTRIBUTABLE TO CVII BUT IS THE
RESULT OF A REQUIREMENT FOR SOURCE-CONTROLLED DRAWINGS AND DIFFICULTIES
WITH ONE VENDOR. THE NAVY POINTS OUT THAT THE CONTRACTING OFFICER'S
REPRESENTATIVE (THE CONTRACT NEGOTIATOR) MADE A GOOD-FAITH EFFORT TO
ASCERTAIN CVII'S STATUS AS A GOVERNMENT CONTRACTOR IN ORDER TO BETTER
DETERMINE WHAT WEIGHT TO ACCORD ITS NONRESPONSIVE BID IN MAKING A
PRUDENT BUSINESS DECISION REGARDING WHETHER OR NOT TO CANCEL. NEITHER
THE CONTRACTING OFFICER NOR THE CONTRACT NEGOTIATOR KNEW OR SUSPECTED
THAT DCASMA HAD FURNISHED PARTIALLY ERRONEOUS INFORMATION.
ALTHOUGH THE INITIAL INFORMATION UPON WHICH THE CANCELLATION WAS
BASED WAS NOT COMPLETELY ACCURATE, THE SUBSEQUENTLY DEVELOPED
INFORMATION, IN OUR OPINION, SUPPORTS THE CONTRACTING OFFICER'S RELIANCE
ON CVII'S "EXTENDED" BID PRICE IN DETERMINING WHETHER TO CANCEL THE
PROCUREMENT.
IN A RECENT CASE WE OBSERVED THAT:
"A DETERMINATION THAT A BID PRICE IS NOT REASONABLE IS A MATTER OF
ADMINISTRATIVE DISCRETION WHICH OUR OFFICE WILL NOT QUESTION UNLESS IT
IS UNREASONABLE OR THERE IS A SHOWING OF BAD FAITH OR FRAUD. SEE G.S.E.
DYNAMICS, INC., B-189329, FEBRUARY 13, 1978; SUPPORT CONTRACTORS, INC.,
B-181607, MARCH 18, 1975, 75-1 CPD 160. THE DETERMINATION MAY BE BASED
UPON COMPARISON WITH A GOVERNMENT ESTIMATE, PAST PROCUREMENT HISTORY,
CURRENT MARKET CONDITIONS, OR OTHER RELEVANT FACTORS, INCLUDING ANY
WHICH MAY HAVE BEEN DISCLOSED BY THE BIDDING. SEE G.S.E. DYNAMICS,
INC., SUPRA; WESTINGHOUSE ELECTRIC CORPORATION, 54 COMP. GEN. 699, 702
(1975), 75-1 CPD 112; 36 COMP. GEN. 364 (1956)." SCHOTTEL OF AMERICA,
INC., B-190546, MARCH 21, 1978, 78-1 CPD 220.
WE ALSO STATED IN SCHOTTEL THAT A CONTRACTING OFFICER'S DETERMINATION
REGARDING PRICE REASONABLENESS CAN BE BASED SOLELY ON A COMPARISON OF
THE BIDS RECEIVED WITH THE BID OF A NONRESPONSIVE BIDDER SUCH AS CVII.
HERE ESPEY'S BID IS 23 PERCENT HIGHER THAN CVII'S "EXTENDED"
NONRESPONSIVE LOW BID. WE HAVE UPHELD THE REJECTION OF ALL BIDS BECAUSE
OF UNREASONABLE PRICES WHERE THE LOW RESPONSIVE BID WAS ONLY 13 PERCENT
GREATER THAN A LOWER NONRESPONSIVE BID. SEE COLONIAL FORD TRUCK SALES,
INC., B-179926, FEBRUARY 19, 1974, 74-1 CPD 80.
ON THIS RECORD, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S
DECISION TO CANCEL THE IFB WAS UNREASONABLE UNDER OUR STANDARD OF
REVIEW.
WE NOTE THAT ESPEY HAS REQUESTED THAT THE NAVY DOCUMENT ITS FAILURE
TO MAIL THE SIXTH AMENDMENT TO CVII. WE AGREE WITH THE NAVY THAT SUCH
DOCUMENTATION IS IRRELEVANT IN THE CONTEXT OF THIS PROTEST SINCE ESPEY'S
ALLEGATION CONCERNING THIS ISSUE IS UNSUPPORTED BY THE RECORD.
ACCORDINGLY, THE PROTEST IS DENIED.
B-195049, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE FOREST SERVICE ERROR IN ESTIMATING ACREAGE COVERED BY TIMBER
SALE RESULTS IN APPROXIMATELY 45 PERCENT UNDERCUT, TIMBER SALE CONTRACT
MAY BE MODIFIED TO INDICATE ACREAGE ACTUALLY INVOLVED. OVERCHARGES
WHICH RESULTED FROM ERROR MAY BE REFUNDED.
DOUGLAS STUDS, INC.:
THE UNITED STATES DEPARTMENT OF AGRICULTURE FOREST SERVICE REQUESTS
REFORMATION OF THE PARK CREEK NO. 3 TIMBER SALE CONTRACT AWARDED TO
DOUGLAS STUDS, INC. (DOUGLAS). DOUGLAS WAS APPARENTLY OVERCHARGED FOR
THE TIMBER PURCHASE BECAUSE OF A MISCALCULATION OF THE ACREAGE CONTAINED
IN THE SALE.
THE PARK CREEK NO. 3 TIMBER SALE IN THE AMOUNT OF $26,255.67 WAS
AWARDED ON A LUMP-SUM PAYMENT BASIS FOR EACH OF 15 SEPARATE UNITS
CONTAINED IN THE SALE. THE CONTRACT INDICATES THAT THE FIFTEEN UNITS
COVER A TOTAL OF APPROXIMATELY 240 ACRES WITH ESTIMATED TOTAL SALE
VOLUME OF 1,121 MILLION BOARD FEET OF VARIOUS TIMBER SPECIES. SHORTLY
AFTER COMMENCING LOGGING OPERATIONS, DOUGLAS ADVISED THE FOREST SERVICE
OF ITS CONCERN THAT THE PARK CREEK NO. 3 SALE WAS GOING TO UNDERCUT.
SINCE OPERATIONS HAD JUST BEGUN, BOTH DOUGLAS AND THE FOREST SERVICE
DECIDED NOT TO TAKE ANY ACTION PENDING THE COMPLETION OF CUTTING IN SOME
OF THE UNITS. ON COMPLETION OF THE WORK, DOUGLAS ADVISED THE FOREST
SERVICE OF AN UNDERCUT OF APPROXIMATELY 45 PERCENT AND REQUESTED A
REFUND OF $11,662.10. THE FOREST SERVICE DENIED THIS REQUEST, STATING
IT WAS NOT AUTHORIZED TO MODIFY THE CONTRACT.
THE SALE IN QUESTION WAS PART OF THE FISCAL YEAR 1975 OFFERING
PROGRAM FOR THE RIO GRANDE NATIONAL FOREST. THE AGENCY EXPLAINS THAT
PRELIMINARY WORK ON THE SALE WAS BEGUN IN THE SPRING OF 1974 AND
COMPLETED AT THE END OF THAT YEAR. PRIOR TO THE COMPLETION OF "SALE
LAYOUT, MARKING, AND AREA AND VOLUME DETERMINATIONS," THE AGENCY
CONDUCTED A "SHOW-ME-TRIP" IN WHICH DOUGLAS PARTICIPATED. NO TRIPS WERE
CONDUCTED AFTER FINAL WORK ON THE SALE WAS COMPLETED, SO THAT DOUGLAS
APPARENTLY RELIED ON THE ACCURACY OF THE FOREST SERVICE SURVEYS AND
VOLUME ESTIMATES CONTAINED IN THE OFFERING.
IN RESPONSE TO DOUGLAS' REQUEST THAT THE FOREST SERVICE REVIEW THE
SITUATION, THE PARK CREEK TIMBER SALE VOLUMES WERE RECHECKED WHEREBY IT
WAS DETERMINED THAT THE ACREAGE IN THE CONTRACT WAS SIGNIFICANTLY
OVERSTATED. FOR EXAMPLE, AN ESTIMATED 240 ACRES WERE INCLUDED IN THE
SALE, BUT THE RECOMPUTATION SHOWED ONLY APPROXIMATELY 127 ACRES WERE
ACTUALLY COVERED. APPARENTLY THE ESTIMATED TIMBER VOLUME PER ACRE OVER
VARIOUS AREAS WAS ACCURATE.
IN PRIOR DECISIONS, WE HAVE PERMITTED MODIFICATION OF THE CONTRACT
PRICE WHERE THERE HAS BEEN AN ERRONEOUS REPRESENTATION OF A MATERIAL
FACT BY THE GOVERNMENT CONCERNING THE WORK TO BE DONE. FOR EXAMPLE, IN
L. Z. HIZER, B-188785, MAY 23, 1977, 77-1 CPD 357, WE PERMITTED
REFORMATION OF A TIMBER SALE CONTRACT WHERE THE TIMBER PURCHASER
ERRONEOUSLY RELIED ON AN INCORRECT VOLUME DESIGNATION MADE BY THE FOREST
SERVICE. THE LEGAL PRINCIPLES TO BE APPLIED IN THESE CASES IS AS
FOLLOWS:
"IT HAS BEEN HELD THAT WHERE, IN CONNECTION WITH A GOVERNMENT
CONTRACT, THE GOVERNMENT APPARENTLY NEGLIGENTLY MISSTATED A MATERIAL
FACT AND THEREBY MISLED THE PLAINTIFF TO ITS DAMAGE, AND WHERE THE
PLAINTIFF WAS NEGLIGENT IN NOT DISCOVERING THE MISSTATEMENT AND
ASCERTAINING FOR ITSELF WHAT THE FACTS WERE BEFORE SUBMITTING ITS BID,
THE POSITION OF THE PARTIES IS THAT OF PERSONS WHO HAVE MADE A MUTUAL
MISTAKE AS TO A MATERIAL FACT RELATING TO THE CONTRACT AND THE COURT
SHOULD THEREFORE, IN EFFECT, REFORM THE CONTRACT BY PUTTING THEM IN THE
POSITION THEY WOULD HAVE OCCUPIED BUT FOR THE MISTAKE. VIRGINIA
ENGINEERING CO., INC. V. THE UNITED STATES, 101 CT. CL. 516. THE
GENERAL RULE IS THAT A CONTRACT MADE THROUGH MUTUAL MISTAKE AS TO
MATERIAL FACTS MAY EITHER BE RESCINDED OR REFORMED. SEE 12 AM. JUR.,
CONTRACTS, SEC. 126 AND 17 C.J.S., CONTRACTS, SEC. 144. FURTHER, IT IS
AN ADDITIONAL RULE THAT MISTAKE ON ONE SIDE AND MISREPRESENTATION,
WHETHER WILFUL OR ACCIDENTAL, ON THE OTHER, CONSTITUTE A GROUND FOR
REFORMATION WHERE THE PARTY MISLED HAS RELIED ON THE MISREPRESENTATION
OF THE PARTY SEEKING TO BIND HIM. 76 C.J.S., REFORMATION OF
INSTRUMENTS, SECTION 29. RESTITUTION IN THESE CIRCUMSTANCES MAY BE
OBTAINED ON THE PREMISE THAT IT WOULD BE UNJUST TO ALLOW ONE WHO MADE
THE MISREPRESENTATION, THOUGH INNOCENTLY, TO RETAIN THE FRUITS OF A
BARGAIN WHICH WAS INDUCED, IN WHOLE OR IN PART, BY SUCH
MISREPRESENTATION. SEE WILLISTON ON CONTRACTS, REV. ED., SECTIONS 1500
AND 1509 AND THE CASES THEREIN CITED." L. Z. HIZER, SUPRA; SEE ALSO,
MORGAN ROOFING COMPANY, 54 COMP. GEN. 497 (1974), 74-2 CPD 358.
THIS CONTRACT MAY BE MODIFIED ON THE BASIS OF MUTUAL MISTAKE. IN HIS
REPORT TO THE FOREST SERVICE SUPERVISOR, THE TIMBER SALE OFFICER FOR THE
RIO GRANDE NATIONAL FOREST SUGGESTS FOUR ALTERNATIVE METHODS FOR
DETERMINING THE FINAL VOLUME OF THE SALE TO BE USED AS THE BASIS FOR
SATISFYING THIS CLAIM. IN PROVIDING RELIEF BY CONTRACT REFORMATION, THE
OBJECTIVE IS TO PLACE THE INJURED PARTY IN THE POSITION THEY WOULD HAVE
OCCUPIED BUT FOR THE MISTAKE IN THE SALE PREPARATION WORK. VIRGINIA
ENGINEERING CO. V. UNITED STATES, 101 CT. CL. 516 (1944). IT APPEARS
THAT THE TIMBER OFFICER'S RECOMMENDATION, ALTERNATIVE NO. 1, SATISFIES
THIS OBJECTIVE. IT DETERMINES THE VALUE OF THE TIMBER AND THE PROPER
SALE PRICE BY USING THE RECALCULATED ACREAGES, BUT STILL APPLIES THE
ORIGINAL PER ACRE VOLUMES BY SPECIES AND PAYMENT UNIT SINCE THEIR
VALIDITY ARE NOT AT ISSUE. HOWEVER, WE WOULD LIMIT THE REFUND TO
$11,662.10, THE AMOUNT CLAIMED BY DOUGLAS.
B-195287, JUL 9, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTESTER'S LATE BID WAS PROPERLY REJECTED BY CONTRACTING OFFICER
SINCE BID WAS SENT BY "SPECIAL DELIVERY" AND NOT BY CERTIFIED OR
REGISTERED MAIL, ABSENT SHOWING THAT BID WAS MISHANDLED BY AGENCY AFTER
ITS RECEIPT.
A&W PRODUCTS COMPANY, INC.:
A&W PRODUCTS COMPANY, INC. (A&W), PROTESTS THE REJECTION OF ITS BID
AS LATE BY THE GENERAL SERVICES ADMINISTRATION (GSA) UNDER INVITATION
FOR BIDS (IFB) NO. FCGO-E1-50153-A.
THE TIME SET FOR BID OPENING WAS 11:00 A.M., MAY 30, 1979. A&W SENT
ITS BID VIA THE UNITED STATES POSTAL SERVICE, BY "SPECIAL DELIVERY"
MAIL, TO GSA ON MAY 26, 1979, WHICH WAS GUARANTEED TO BE DELIVERED IN
TIME FOR BID OPENING. HOWEVER, A&W'S BID WAS NOT RECEIVED BY GSA UNTIL
4:22 P.M., SOME 4 HOURS AFTER BID OPENING.
A&W DOES NOT DISPUTE THE FACT THAT ITS BID WAS RECEIVED LATE.
HOWEVER, A&W CONTENDS THAT ITS BID SHOULD NOT BE REJECTED BECAUSE OF
MISHANDLING BY THE POSTAL SERVICE AND AWARD SHOULD BE MADE TO IT AS THE
LOWEST BIDDER.
STANDARD FORM (SF) 33A, "SOLICITATION INSTRUCTIONS AND CONDITIONS,"
WAS INCORPORATED INTO THE SOLICITATION. CLAUSE 7, "LATE BIDS,
MODIFICATIONS OF BIDS, OR WITHDRAWAL OF BIDS," OF SF33A STATES IN
PERTINENT PART:
"(A) ANY BID RECEIVED AT THE OFFICE DESIGNATED IN THE SOLICITATION
AFTER THE EXACT TIME SPECIFIED FOR RECEIPT WILL NOT BE CONSIDERED UNLESS
IT IS RECEIVED BEFORE AWARD IS MADE, AND EITHER:
"(1) IT WAS SENT BY REGISTERED OR CERTIFIED MAIL NOT LATER THAN THE
FIFTH CALENDAR DAY PRIOR TO THE DATE SPECIFIED FOR RECEIPT OF BIDS (E.G.
A BID SUBMITTED IN RESPONSE TO A SOLICITATION REQUIRING RECEIPT OF BIDS
BY THE 20TH OF THE MONTH MUST HAVE BEEN MAILED BY THE 15TH OR EARLIER),
OR
"(2) IT WAS SENT BY MAIL (OR TELEGRAM IF AUTHORIZED) AND IT IS
DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO
MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT
INSTALLATION."
IT IS OUR VIEW THAT THE REJECTION OF A&W'S BID BY THE CONTRACTING
OFFICER WAS PROPER. A&W'S BID, IN ORDER TO BE PROPERLY CONSIDERED,
SHOULD HAVE BEEN DELIVERED TO THE DESIGNATED OFFICE PRIOR TO THE TIME
SPECIFIED FOR BID OPENING, BUT IT WAS NOT RECEIVED UNTIL AFTER BID
OPENING. OUR OFFICE HAS CONSISTENTLY HELD THAT A BIDDER HAS THE
RESPONSIBILITY TO ASSURE TIMELY ARRIVAL OF ITS BID AND MUST BEAR THE
RESPONSIBILITY FOR ITS LATE ARRIVAL. LATE RECEIPT OF A BID WILL RESULT
IN ITS REJECTION UNLESS THE SPECIFIC CONDITIONS OF THE IFB ARE MET. H.
OLIVER WELCH & COMPANY, B-193870, FEBRUARY 9, 1979, 79-1 CPD 96.
UNDER THE TERMS OF THE IFB A LATE BID MAY BE CONSIDERED IF SENT BY
REGISTERED OR CERTIFIED MAIL IN THE MANNER OUTLINED ABOVE, WHICH IS NOT
THE CASE HERE, OR WHERE THE "LATE RECEIPT WAS DUE SOLELY TO MISHANDLING
BY THE GOVERNMENT INSTALLATION" ISSUING THE PROCUREMENT. THE POSTAL
SERVICE'S FAILURE TO DELIVER THE BID DOES NOT CONSTITUTE GOVERNMENT
MISHANDLING AT A GOVERNMENT INSTALLATION. KESSEL KITCHEN EQUIPMENT CO.,
INC., B-189447, OCTOBER 5, 1977, 77-2 CPD 271.
OUR OFFICE GENERALLY REQUESTS A REPORT FROM THE PROCURING AGENCY UPON
RECEIPT OF A BID PROTEST IN ACCORDANCE WITH OUR BID PROTEST PROCEDURES,
4 C.F.R. PART 20 (1978). HOWEVER, WHERE IT IS CLEAR FROM A PROTESTER'S
SUBMISSION THAT THE PROTEST IS LEGALLY WITHOUT MERIT, WE WILL DECIDE THE
MATTER ON THAT BASIS. H. OLIVER WELCH & COMPANY, SUPRA.
THEREFORE, THE PROTEST IS SUMMARILY DENIED.
B-192643, JUL 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE'S CLAIM FOR BACKPAY AND RESTORATION OF LEAVE FOR PERIOD OF
SUSPENSION AFTER HER ARREST ON CRIMINAL CHARGES BY CIVIL AUTHORITIES IS
DENIED, NOTWITHSTANDING SUBSEQUENT DISMISSAL OF CRIMINAL CHARGES, SINCE
THERE HAS BEEN NO FINDING BY APPROPRIATE AUTHORITY THAT SUSPENSION WAS
UNJUSTIFIED OR UNWARRANTED.
GLORIA MILLINER - BACKPAY AND RESTORATION OF LEAVE FOR PERIOD OF
SUSPENSION:
MISS GLORIA MILLINER THROUGH HER ATTORNEY, STANLEY H. MILLER, ESQ.,
REQUESTS RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT OF JULY 14,
1978, WHICH DENIED HER CLAIM FOR BACKPAY AND RESTORATION OF LEAVE
INCIDENT TO A PERIOD OF SUSPENSION FROM HER EMPLOYMENT BY THE DEPARTMENT
OF HEALTH, EDUCATION, AND WELFARE (HEW), SOCIAL SECURITY ADMINISTRATION
(SSA). THE DENIAL OF HER CLAIM IS SUSTAINED SINCE NEITHER SSA NOR THE
FEDERAL EMPLOYEE APPEAL AUTHORITY (FEAA) OF CIVIL SERVICE COMMISSION
(CSC) NOW OFFICE OF PERSONNEL MANAGEMENT HAS DETERMINED HER SUSPENSION
TO BE UNJUSTIFIED OR UNWARRANTED.
THE RECORD INDICATES THAT MISS MILLINER, AN SSA EMPLOYEE, WAS GIVEN
NOTICE ON MAY 5, 1976, OF A PROPOSED INDEFINITE SUSPENSION PENDING
INVESTIGATION OF HER ALLEGED MISCONDUCT AFTER HER ARREST ON CERTAIN
CRIMINAL CHARGES IN BALTIMORE ON APRIL 27, 1976. SHE WAS PLACED ON
INDEFINITE SUSPENSION FROM DUTY AND PAY STATUS EFFECTIVE MAY 10, 1976,
AND NOTIFIED OF HER RIGHT OF APPEAL OF THE SUSPENSION ACTION TO THE
FEAA. WE ARE UNAWARE OF ANY APPEAL TO HER SUSPENSION.
HER SUSPENSION REMAINED IN EFFECT FROM MAY 10, THROUGH SEPTEMBER 10,
1976, THE PERIOD FOR WHICH SHE CLAIMS BACKPAY AND LEAVE RESTORATION.
SHE WAS RETURNED TO DUTY AFTER THE CRIMINAL CHARGES IN BALTIMORE CITY
WERE DISMISSED. CERTAIN CHARGES WERE STILL PENDING IN BALTIMORE COUNTY;
HOWEVER, SSA DETERMINED THAT THIS DID NOT WARRANT CONTINUATION OF THE
SUSPENSION.
AFTER HER RETURN TO DUTY, MISS MILLINER WAS ADVISED BY LETTER OF
NOVEMBER 30, 1976, FROM SSA, THAT BASED ON A CAREFUL REVIEW OF HER CASE,
THERE WAS NO BASIS TO CONCLUDE THAT HER SUSPENSION WAS EITHER
UNJUSTIFIED OR UNWARRANTED. IN ADDITION, SHE WAS ADVISED THAT THERE HAD
BEEN NO FINDING BY THE FEAA THAT HER SUSPENSION WAS UNJUSTIFIED OR
UNWARRANTED AS A RESULT OF ANY APPEAL, AND THUS THERE WAS NO BASIS TO
GRANT HER BACKPAY OR LEAVE RESTORATION FOR THE PERIOD OF HER SUSPENSION.
ENTITLEMENT TO BACKPAY IS PROVIDED BY 5 U.S.C. 5596(B) (1976) WHICH
READS:
"(B) AN EMPLOYEE OF AN AGENCY WHO, ON THE BASIS OF AN ADMINISTRATIVE
DETERMINATION OR A TIMELY APPEAL, IS FOUND BY APPROPRIATE AUTHORITY
UNDER APPLICABLE LAW OR REGULATION TO HAVE UNDERGONE AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION THAT HAS RESULTED IN THE WITHDRAWAL OR
REDUCTION OF ALL OR A PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS OF
THE EMPLOYEE -
"(1) IS ENTITLED, ON CORRECTION OF THE PERSONNEL ACTION, TO RECEIVE
FOR THE PERIOD FOR WHICH THE PERSONNEL ACTION WAS IN EFFECT AN AMOUNT
EQUAL TO ALL OR ANY PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS, AS
APPLICABLE, THAT THE EMPLOYEE NORMALLY WOULD HAVE EARNED DURING THAT
PERIOD IF THE PERSONNEL ACTION HAD NOT OCCURRED ***."
THE APPROPRIATE AUTHORITY IN MISS MILLINER'S CASE WAS SSA WITH THE
RIGHT OF APPEAL TO THE FEAA. MATTER OF RICHARD E. BERGER, B-191814,
JANUARY 15, 1979. THE RECORD BEFORE US SHOWS NO APPEAL TO HER
SUSPENSION EITHER WITHIN SSA OR TO THE CSC ASSERTING AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION. AT THE TIME INVOLVED, THE CSC HAD THE
FUNCTION OF HEARING AND DECIDING APPEALS TO ADVERSE ACTIONS, INCLUDING
SUSPENSIONS FOR MORE THAN 30 DAYS. 5 U.S.C. 7501 (1976). 5 C.F.R. SEC.
752.203 (1976). BERGER, SUPRA.
SINCE AN APPROPRIATE AUTHORITY HAS NOT DETERMINED THAT MISS MILLINER
HAS UNDERGONE AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION INCIDENT TO
HER CLAIM, SHE IS NOT ENTITLED TO BACKPAY OR LEAVE RESTORATION. THE
DISALLOWANCE OF HER CLAIM BY OUR CLAIMS DIVISION IS SUSTAINED.
B-194190, JUL 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
BID WHICH FAILS TO ACKNOWLEDGE ADDENDUM HAVING SIGNIFICANT EFFECT ON
PRICE CANNOT BE WAIVED AS MINOR INFORMALITY OR IRREGULARITY AND IS
PROPERLY FOR REJECTION AS NONRESPONSIVE.
DECOR MAINTENANCE COMPANY, INC.:
DECOR MAINTENANCE COMPANY, INC. (DECOR), HAS PROTESTED THE AWARD OF A
1-YEAR CONTRACT FOR THE FURNISHING OF CUSTODIAL CLEANING SERVICES AT THE
DENVER FEDERAL CENTER TO YOUNG JANITORIAL SERVICES OF COLORADO SPRINGS,
INC. (YOUNG), UNDER INVITATION FOR BIDS (IFB) NO. 79-09-012, ISSUED BY
THE GENERAL SERVICES ADMINISTRATION (GSA).
DECOR SUBMITTED THE LOW BID. HOWEVER, DECOR'S BID WAS REJECTED AS
NONRESPONSIVE FOR FAILURE (1) TO INCLUDE THE BID GUARANTEE REQUIRED BY
THE SOLICITATION AND (2) TO ACKNOWLEDGE RECEIPT OF ADDENDUM NO. 1.
AWARD WAS MADE TO YOUNG, THE SECOND LOW BIDDER.
DECOR CONTENDS THAT IT COMPLIED WITH THE BID GUARANTEE REQUIREMENT.
EVEN IF WE ACCEPT DECOR'S CONTENTION, ITS BID WAS PROPERLY REJECTED AS
NONRESPONSIVE, SINCE DECOR FAILED TO ACKNOWLEDGE RECEIPT OF THE
ADDENDUM. THUS, WE DO NOT ADDRESS THE BID BOND ISSUE.
THE ADDENDUM ADDED 2,945 SQUARE FEET PLUS SEVEN OFFICES TO THE AREA
TO BE CLEANED. GSA HAS STATED THAT THE ADDENDUM WOULD HAVE MORE THAN A
MINIMAL EFFECT ON THE COST OF PERFORMANCE. DECOR DOES NOT DISAGREE WITH
THE GSA STATEMENT.
A BID WHICH FAILS TO ACKNOWLEDGE AN ADDENDUM HAVING A SIGNIFICANT
EFFECT ON PRICE CANNOT BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY
AND IS PROPERLY FOR REJECTION AS NONRESPONSIVE. CENTRAL DELIVERY
SERVICE, B-186413, AUGUST 4, 1976, 76-2 CPD 125.
ACCORDINGLY, THE PROTEST IS DENIED.
B-194905, JUL 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
CONTRACT PROVISION PROVIDING AIR FORCE WILL NOT BE LIABLE FOR PAYMENT
OF PENALTY OR INTEREST CHARGES TO UTILITY COMPANY DOES NOT RELIEVE THE
AIR FORCE OF OBLIGATION TO PAY LATE PAYMENT CHARGES WHEN THOSE CHARGES
ARE APPROVED BY STATE COMMISSION AS PART OF UTILITY'S TARIFF TO RECOUP
LOSSES ATTRIBUTABLE TO LATE PAYMENTS AND AIR FORCE HAS AGREED TO PAY
APPROVED TARIFF.
SOUTH CAROLINA ELECTRIC AND GAS COMPANY - LATE PAYMENT CHARGES.:
THE ACCOUNTING AND FINANCE OFFICE OF THE CHARLESTON AIR FORCE BASE,
SOUTH CAROLINA, (HIS REFERENCE: ACF (MR. JOHNK, 583-3387)), HAS
REQUESTED OUR OPINION ON THE PROPRIETY OF PAYING ARREARS AND LATE
PAYMENT CHARGES ON TWO CONTRACTS FOR UTILITIES SERVICES PROVIDED TO THE
UNITED STATES AIR FORCE, CHARLESTON AIR FORCE BASE, BY THE SOUTH
CAROLINA ELECTRIC AND GAS COMPANY (SCE&G).
SCE&G HAS ASSESSED THESE CHARGES ON THE AIR FORCE ACCOUNTS SINCE
FEBRUARY 1971 BUT THE AIR FORCE HAS REFUSED TO PAY THEM. THE SCE&G
MAINTAINS THAT THE LATE PAYMENT CHARGES ARE PART OF THE GENERAL TERMS
AND CONDITIONS OF SERVICE WHICH HAS BEEN APPROVED BY THE PUBLIC SERVICE
COMMISSION OF SOUTH CAROLINA (COMMISSION) AND ARE A PART OF THE
COMPANY'S TARIFF.
THE HQ MAC/OFFICE OF THE STAFF ADVOCATE (HQ MAC/SJA) AND SCE&G BASE
THEIR RESPECTIVE CONTENTIONS ON DIFFERENT PROVISIONS OF THE CONTRACTS.
HQ MAC/SJA RELIES PRIMARILY ON PARAGRAPH 4(C) WHICH STATES IN PERTINENT
PART THAT "ALL BILLS FOR SERVICE SHALL BE PAID WITHOUT PENALTY OR
INTEREST ..." SCE&G RELIES PRIMARILY ON PARAGRAPH 2 WHICH STATES IN
PERTINENT PART THAT THE GOVERNMENT WILL PAY FOR SERVICE AT THE
AUTHORIZED TARIFF RATE AND THAT "SERVICE FURNISHED UNDER THIS CONTRACT
SHALL BE SUBJECT TO REGULATION IN THE MANNER AND TO THE EXTENT
PRESCRIBED BY LAW OR BY ANY FEDERAL, STATE OR LOCAL REGULATORY
COMMISSION HAVING JURISDICTION." BY AN ORDER DATED JULY 1, 1970, THE
COMMISSION AUTHORIZED SCE&G TO ADOPT A PLAN AS PART OF ITS RATES WHEREBY
A ONE AND A HALF PERCENT "LATE PAYMENT CHARGE" WOULD BE ASSESSED ON ANY
PAST DUE AMOUNTS.
THE ISSUE IN THIS CASE INVOLVES THE CHARACTERIZATION OF THE LATE
PAYMENT CHARGES. PROVISION 4(C) EXPRESSLY FORBIDS THE PAYMENTS OF LATE
CHARGES IF THEY ARE CONSIDERED TO BE PENALTIES OR INTEREST.
SEVERAL JURISDICTIONS HAVE HELD THAT LATE PAYMENT CHARGES ARE NOT
"INTEREST." IN STATE EX REL. UTILITIES COMMISSION V. NORTH CAROLINA
CONSUMER COUNCIL, 18 N.C. APP. 717, 198 S.E. 2ND 98, 100, CERT. DENIED
284 N.C. 124 (1973), THE COURT STATED THAT "TO SAY THAT THE (LATE
PAYMENT) CHARGE IS UNRELATED TO RATES IS TO FAIL TO CONSIDER THE
REALITY." IT THEN QUOTED COFFELT V. ARK. POWER AND LIGHT CO., 248 ARK.
313, 451 S.W. 2ND 881, 883 (1970), REH. DENIED 27 APRIL 1970, WITH
APPROVAL:
"'THE LATE CHARGES, FAR FROM BEING AN EXACTION OF EXCESSIVE INTEREST
FOR THE LOAN OR FOREBEARANCE OF MONEY, IS IN FACT A DEVICE BY WHICH
CONSUMERS ARE AUTOMATICALLY CLASSIFIED TO AVOID DISCRIMINATION. ITS
EFFECT IS TO REQUIRE DELINQUENT RATEPAYERS TO BEAR, AS NEARLY AS CAN BE
DETERMINED, THE EXACT COLLECTION COSTS THAT RESULT FROM THEIR TARDINESS
IN PAYING THEIR BILLS.'"
SEE ALSO FERGUSON V. ELECTRIC POWER BD. OF CHATTANOOGA, TENN., 378
SUPP. 787, 790 (1974).
THIS OFFICE IN SEVERAL DECISIONS HAS ALSO STATED THAT SUCH PAYMENTS
ARE NOT INTEREST IF THEY ARE PART OF THE UTILITY'S RATE SCHEDULE BY
WHICH THE GOVERNMENT THROUGH ITS CONTRACT WITH THE UTILITY HAS AGREED TO
BE BOUND. IN THOSE CASES, WE HAVE AUTHORIZED PAYMENT. SEE B-173725,
SEPTEMBER 16, 1971; B-184962, NOVEMBER 14, 1975; AND B-188616, MAY 12,
1977. OF PARTICULAR RELEVANCE IS B-186494, SUPRA, IN WHICH WE CONCLUDED
THAT LATE PAYMENT CHARGES WERE PART OF THE UTILITY RATES PAYABLE UNDER A
CONTRACT PROVISION SIMILAR TO THE ONE IN PARAGRAPH 2 RATHER THAN A
PENALTY OR INTEREST CHARGE EXCLUDED UNDER A PROVISION SIMILAR TO THE ONE
IN PARAGRAPH 4(C). WE NOTED THAT THE UTILITY COMMISSION WHICH ALLOWED
THE UTILITY TO CHARGE A LATE PAYMENT FEE HAD CONCLUDED THAT THE RATES
WERE NOT PENAL OR ARBITRARY, AND WOULD ALLOW THE UTILITY TO RECOVER
COSTS EXPENDED IN CONNECTION WITH PAYMENT DELAYS.
THE RATIONALE OF THAT DECISION IS APPLICABLE HERE. AS PART OF THE
RATE SCHEDULE, THE SOUTH CAROLINA PUBLIC SERVICE COMMISSION AUTHORIZED
THE CHARGE UNDER DISPUTE IN THIS CASE FOR A SIMILAR REASON: "A MAXIMUM
OF ONE AND ONE HALF PERCENT (1 1/2%) MAY BE ADDED TO ANY UNPAID BALANCE
NOT PAID WITHIN 25-DAYS OF THE BILLING DATE TO COVER THE COST OF
COLLECTION AND IN CARRYING ACCOUNTS IN ARREARS." 26 CODE OF LAWS OF
SOUTH CAROLINA R103-439.3, LATE PAYMENT CHARGES, (1976).
WE CONCLUDE THAT THE 1 1/2 PERCENT LATE PAYMENT CHARGE IS NEITHER A
PENALTY NOR INTEREST AND PAYMENT OF THE CHARGE IS NOT PRECLUDED BY
PARAGRAPH 4(C) OF THE CONTRACT. RATHER THIS CHARGE IS PART OF THE
UTILITY'S GENERAL TERMS AND CONDITIONS WHICH WERE APPROVED BY THE
COMMISSION. THEREFORE, UNDER PARAGRAPH 2 OF THE CONTRACT, REQUIRING IT
TO PAY THE UTILITY'S AUTHORIZED RATES, THE AIR FORCE SHOULD PAY THESE
CHARGES.
THE SCE&G HAS OFFERED TO WRITE OFF CURRENT CHARGES IF THE CHARLESTON
BASE WOULD ACKNOWLEDGE ITS RESPONSIBILITY FOR ANY LATE PAYMENT CHARGES
INCURRED IN THE FUTURE. WE RECOMMEND THAT THE AIR FORCE ACCEPT THIS
OFFER.
B-195001, JUL 6, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE QUESTION OF SMALL BUSINESS BIDDER'S RESPONSIBILITY HAS BEEN
REFERRED TO SMALL BUSINESS ADMINISTRATION (SBA) FOR POSSIBLE ISSUANCE OF
CERTIFICATE OF COMPETENCY (COC), GAO WILL NOT CONSIDER PROTEST OF
FAILURE TO MAKE PROMPT AWARD TO PROTESTER SINCE SBA HAS STATUTORY
AUTHORITY TO CONCLUSIVELY DETERMINE RESPONSIBILITY OF SMALL BUSINESS
BIDDER.
SCHOTTEL OF AMERICA, INC.:
SCHOTTEL OF AMERICA, INC. (SCHOTTEL), A SMALL BUSINESS, PROTESTS THE
AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS (IFB)
NO. DACW69-79-B-0045, ISSUED BY THE U.S. ARMY CORPS OF ENGINEERS
(CORPS). SCHOTTEL, THE LOW BIDDER FOR THE PROCUREMENT, STATES THAT ON
TWO OCCASIONS THE CORPS HAS REQUESTED THAT SCHOTTEL EXTEND ITS BID
ACCEPTANCE PERIOD. THE PROTESTER MAINTAINS THAT THE CONTRACT SHOULD BE
AWARDED TO IT AS THE LOW, RESPONSIVE RESPONSIBLE BIDDER WITHOUT FURTHER
DELAY.
WE HAVE BEEN ADVISED BY THE CORPS THAT THE MATTER OF SCHOTTEL'S
RESPONSIBILITY HAS BEEN REFERRED TO THE SMALL BUSINESS ADMINISTRATION
(SBA) FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC).
UNDER ITS COC PROGRAM THE SBA HAS AUTHORITY TO CONCLUSIVELY DETERMINE
THAT A SMALL BUSINESS BIDDER IS RESPONSIBLE. 15 U.S.C. 637(B)(7)
(1976), AS AMENDED BY PUB. L. 95-89, 91 STAT. 553. THIS OFFICE HAS NO
AUTHORITY TO REVIEW SBA'S DETERMINATION, TO REQUIRE ISSUANCE OF A COC,
OR TO REOPEN A CASE WHEN A COC HAS BEEN DENIED. PRECISION ELECTRONICS
LABS, B-186751, OCTOBER 29, 1976, 76-2 CPD 369. THE AWARD SHOULD BE
FORTHCOMING IF AFTER DUE CONSIDERATION SBA ISSUES A COC.
THEREFORE, THE PROTEST IS DISMISSED.
B-195144.2, JUL 6, 1979
HEADNOTES-UNAVAILABLE
NOT BE CONSIDERED.
DIGEST:
PROTEST QUESTIONING AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WILL
MICROSURANCE, INC.:
MICROSURANCE, INC. (MICROSURANCE) PROTESTS THE AWARD OF A CONTRACT TO
MICROGRAPHICS INTERNATIONAL (MICROGRAPHICS) UNDER INVITATION FOR BIDS
(IFB) NO. SBSA N00383-79-B-0512. MICROSURANCE CONTENDS THAT
MICROGRAPHICS SHOULD HAVE BEEN FOUND NONRESPONSIBLE BECAUSE IT DOES NOT
POSSESS ON SITE THE EQUIPMENT OR TRAINED PERSONNEL NEEDED TO PERFORM THE
CONTRACT.
OUR OFFICE DOES NOT REVIEW PROTESTS WHICH QUESTION AFFIRMATIVE
DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD IS ALLEGED ON THE
PART OF THE PROCURING OFFICIAL OR THE SOLICITATION CONTAINS DEFINITIVE
RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. SEE
ASSOCIATED ELECTRONICS, INC., B-193859, MARCH 29, 1979, 79-1 CPD 218;
CENTRAL METAL PRODUCTS, INC., 54 COMP. GEN. 66 (1974), 74-2 CPD 64.
NEITHER EXCEPTION IS ASSERTED.
THEREFORE, THE PROTEST IS DISMISSED.
B-192298(1), JUL 5, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ALTHOUGH CONTRACT TERMS AND HANDBOOK GOVERNING ISSUANCE OF ORDERS
UNDER MULTIPLE AWARD SCHEDULE CONTRACT (MASC) IN GSA'S TELEPROCESSING
SERVICES PROGRAM DID NOT, AT TIME SUBJECT ORDER WAS ISSUED, REQUIRE
DISCLOSURE OF EVALUATION FACTORS, ONCE USER AGENCY DISCLOSES PROJECTED
DURATION OF ORDER WHICH IMPACTS ON COST EVALUATION, PRUDENCE DICTATES
THAT SUBSEQUENT CHANGES IN DURATION BE COMMUNICATED TO PARTICIPATING
VENDORS.
2. IT IS NOT PROPER FOR AGENCY TO EVALUATE OFFEROR'S BENCHMARK AS IF
IT COULD ORDER TWO COST ELEMENTS AT ONE PRICE LEVEL WHERE OFFEROR'S
PRICING LIMITS USE OF EACH PRICE LEVEL TO ONLY ONE PRICE ELEMENT.
3. ALTHOUGH PROTEST IS SUSTAINED, BEST INTEREST OF GOVERNMENT WOULD
NOT BE SERVED BY CANCELLATION OF ORDER UNDER MASC WHERE ONE DEFICIENCY
OCCURRED IN AREA NOT COVERED BY REGULATION, WHERE IT HAS NOT BEEN SHOWN
THAT OTHER DEFICIENCY IN COST EVALUATION CAUSED AWARDEE TO BE EVALUATED
AS LOW OFFEROR, AND WHERE SUBSTANTIAL PERFORMANCE HAS OCCURRED ON FINAL
OPTION PERIOD OF ORDER.
4. CLAIM BY PROTESTER FOR COST OF BENCHMARK IS DENIED BECAUSE
PROTESTER HAS NOT SHOWN THAT PROCUREMENT DEFICIENCIES WERE MOTIVATED BY
CAPRICE OR BAD FAITH AND THAT PROTESTER WAS DENIED AWARD TO WHICH IT WAS
OTHERWISE ENTITLED.
UNITED COMPUTING SYSTEMS, INCORPORATED:
UNITED COMPUTING SYSTEMS (UCS) PROTESTS THE ISSUANCE ON MAY 24, 1978,
OF A PURCHASE ORDER TO COMPUTER SCIENCES CORPORATION, INFONET DIVISION
(CSC) BY THE NAVAL ELECTRONIC SYSTEMS ENGINEERING CENTER (NAVY) PURSUANT
TO THE GENERAL SERVICES ADMINISTRATION'S (GSA) TELEPROCESSING SERVICES
PROGRAM (TSP). THE PURCHASE ORDER PROVIDES FOR SERVICES BETWEEN JUNE 1
AND SEPTEMBER 30, 1978 WITH AN OPTION TO RENEW FOR ANOTHER YEAR.
USC ARGUES THAT THE NAVY IMPROPERLY EVALUATED OFFERS BY USING A
SYSTEM LIFE AND DOLLAR CEILING AMOUNT WHICH WERE NOT SPECIFIED IN THE
REQUIREMENTS STATEMENT. IN THIS CONNECTION, THE PROTESTER COMPLAINS
THAT THE NAVY DID NOT FOLLOW THE PROPER PROCEDURES FOR MODIFYING ITS GSA
COMMERCIAL PROCUREMENT APPROVAL (GSA FORM 2068). UCS ALSO COMPLAINS
THAT NAVY IMPROPERLY EVALUATED BOTH ITS COSTS AND CSC'S COSTS. WE HAVE
RECEIVED AND CONSIDERED SUBMISSIONS REGARDING THE PROTEST FROM THE NAVY,
GSA AND CSC AS WELL AS THE PROTESTER.
THE PROTESTER, CSC AND OTHER FIRMS HAVE EACH ENTERED INTO A MULTIPLE
AWARD SCHEDULE CONTRACT (MASC) WITH GSA UNDER TSP. THE TSP IS THE
MANDATORY MEANS BY WHICH FEDERAL AGENCIES ACQUIRE TELEPROCESSING
SERVICES. SEE FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR), TEMPORARY
REGULATION E-47, AS AMENDED. UNDER THIS PROGRAM, USER AGENCIES WHICH
HAVE RECEIVED APPROVAL FROM GSA ON A FORM 2068 MAY PLACE ORDERS FOR
TELEPROCESSING SERVICES AGAINST THE MASC'S WHICH ARE NEGOTIATED BY GSA
AND PROVIDE GOVERNMENT-WIDE VOLUME DISCOUNTS.
THE MASC REQUIRES THAT SELECTING ACTIVITIES EVALUATE THE TECHNICAL
SERVICE FEATURES OF EACH MASC, ELIMINATE FROM CONSIDERATION THOSE THAT
DO NOT MEET THE ACTIVITIES' REQUIREMENTS, AND SELECT THE MASC OFFERING
THE LOWEST SYSTEM COST, PRICE AND OTHER FACTORS CONSIDERED.
HERE, THE NAVY OBTAINED FORM 2068 PURCHASE APPROVAL FROM GSA TO
ACQUIRE TELEPROCESSING SERVICES FROM OCTOBER 1, 1977 THROUGH SEPTEMBER
30, 1980. ON AUGUST 17, THE NAVY SENT AN INQUIRY TO 28 MASC FIRMS. THE
FIRMS WHICH MET THE MANDATORY REQUIREMENTS SET FORTH IN THE INITIAL
INQUIRY WERE INFORMED OF THE CRITERIA TO BE USED IN THE BENCHMARK
COMPETITION. THE NAVY DECIDED TO USE A BENCHMARK DESPITE THE FACT THAT
THE ESTIMATED SYSTEM LIFE AND ANNUAL COSTS WERE BELOW THE THRESHOLD
WHICH WOULD HAVE REQUIRED BENCHMARKING. FIVE FIRMS, INCLUDING THE
PROTESTER WERE BENCHMARKED. A COST ANALYSIS WAS PERFORMED USING THE
BENCHMARK RESULTS AND THE NAVY DETERMINED THAT CSC WOULD PROVIDE THE
LOWEST COST SERVICE.
INITIALLY, USC AN MASC CONTRACTOR, INSISTED THAT THE NAVY'S COST
EVALUATION WAS FLAWED IN FOUR OF THE SIX MONTHLY COST CATEGORIES
(MONTHLY COSTS WERE THE BASIS OF THE COST EVALUATION). IN RESPONSE TO
UCS'S PROTEST THE NAVY RECALCULATED THAT FIRM'S BENCHMARK AND AGREED
WITH UCS'S CALCULATIONS IN THE AREAS OF ON-LINE STORAGE AND TIMESHARING
CONNECT. THE NAVY DID NOT CHANGE ITS CALCULATION OF THE BULK TERMINAL
INPUT/OUTPUT COSTS. USC INDICATED THAT IT "WILL ALLOW THE NAVY'S
JUDGMENT TO STAND" IN THIS AREA.
USC STILL SEEMS TO OBJECT TO THE NAVY'S CALCULATION OF ITS CENTRAL
PROCESSOR UNIT (CPU) COSTS MAINTAINING THAT ITS CPU COSTS SHOULD BE $659
PER MONTH RATHER THAN THE $760 FIGURE USED BY THE AGENCY. HOWEVER,
BEYOND STATING THAT THE NAVY'S CALCULATIONS ARE A "VIOLATION OF THE
PROCEDURE STATED IN SCHEDULE N OF USC' TSP MANUAL" USC DOES NOT EXPLAIN
THE ALLEGED ERROR. THEREFORE WE CONCLUDE THAT THE NAVY'S CALCULATIONS
OF THESE COSTS WERE REASONABLE.
UCS'S MAIN COMPLAINT IS THAT WHILE THE ORIGINAL ANNOUNCEMENT OF THE
REQUIREMENTS SPECIFIED A SYSTEM LIFE OF 36 MONTHS, THE BENCHMARKS WERE
ACTUALLY EVALUATED ON THE BASIS OF A 14 MONTH SYSTEM LIFE. UCS INSISTS
THAT SUCH ACTION CONSTITUTES A BREACH OF A FUNDAMENTAL TENET OF FEDERAL
PROCUREMENT THAT ALL PROSPECTIVE CONTRACTORS MUST BE ADVISED IN ADVANCE
AS TO THE BASIS UPON WHICH OFFERS WILL BE EVALUATED AND THAT ANY CHANGES
IN THAT BASIS MUST BE COMMUNICATED TO ALL OFFERORS. THE PROTESTER
POINTS OUT THAT THE REDUCTION IN THE SYSTEM LIFE AND THE LOWERING OF THE
ESTIMATED VALUE FROM $80,000 TO $36,000 WAS ESPECIALLY PREJUDICIAL TO
UCS BECAUSE IT, LIKE ALL NONINCUMBENTS, WAS SUBJECT TO FIXED CONVERSION
COSTS OF $6,944 TO BE AMORTIZED OVER THE PROJECTED SYSTEM LIFE. THE
REDUCTION OF THE PROJECTED SYSTEM LIFE RESULTED IN HIGHER EVALUATED
TOTAL MONTHLY COSTS FOR UCS THAN FOR CSC, WHICH, AS THE INCUMBENT, WAS
NOT SUBJECT TO CONVERSION COSTS.
THE NAVY STATES THAT IT ORIGINALLY PLANNED TO ORDER 36 MONTHS OF
THESE SERVICES BUT DURING THE EVALUATION PROCESS THE CHIEF OF NAVAL
MATERIAL PROHIBITED THE PURCHASING ACTIVITY FROM ACQUIRING MORE THAN 14
MONTHS OF SERVICE. WHILE THE NAVY ADMITS THAT THE CHANGE FROM 36 TO 14
MONTHS AND THE CORRESPONDING LOWERING OF THE ESTIMATED VALUE OF THE
REQUIREMENT DID HAVE THE EFFECT OF DISPLACING UCS AS THE EVALUATED LOW
OFFEROR, IT ARGUES THAT THIS WAS AN INHERENT AND UNAVOIDABLE PART OF THE
ACQUISITION PROCESS AND NOTES THAT THE REGULATIONS IN FORCE AT THE TIME
THIS ORDER WAS PLACED WERE SILENT ON THE ISSUE OF COMMUNICATING
EVALUATION SCHEME CHANGES TO PROSPECTIVE CONTRACTORS.
GSA POINTS OUT THAT THE PROVISIONS OF THE MASC DO NOT REQUIRE
ORDERING ACTIVITIES TO DISTRIBUTE THE EVALUATION CRITERIA TO THE
CONTRACTORS BEING CONSIDERED FOR SELECTION. FURTHER, GSA POINTS OUT
THAT ITS GUIDELINES EFFECTIVE AT THE TIME, CONTAINED IN ITS SPECIAL
NOTICE CONCERNING THE TSP, APRIL 1977 DID NOT REQUIRE RELEASE OF THIS
INFORMATION.
ALTHOUGH THE MASC'S AND THE GSA GUIDELINES DID NOT REQUIRE THE NAVY
TO DISCLOSE THE BASIS FOR ITS COST EVALUATION, THE AGENCY DID INFORM ALL
THOSE CONCERNED THAT IT ANTICIPATED ORDERING SERVICES FOR 36 MONTHS.
ONCE THE NAVY UNDERTOOK TO INFORM VENDORS OF THIS SIGNIFICANT
REQUIREMENT, WHICH ASSUMED AN IMPORTANT ROLE IN THE COST EVALUATION, WE
BELIEVE THE NAVY SHOULD HAVE INFORMED THOSE VENDORS THAT THE REQUIREMENT
HAD BEEN CHANGED AND GIVEN THEM THE OPPORTUNITY TO RESPOND TO THAT
CHANGE. WE BELIEVE THE CHANGE IN THE ANTICIPATED DURATION PERIOD, WITH
ITS CONCOMITANT EFFECT ON PROPOSAL EVALUATION IN EFFECT CONSTITUTED A
CHANGE IN THE GROUND RULES OF THE PROCUREMENT AND THEREFORE SHOULD HAVE
BEEN COMMUNICATED TO THE VENDORS. SEE UNION CARBIDE CORPORATION, 55
COMP. GEN. 802 (1976), 76-1 CPD 134. IT IS SIGNIFICANT TO NOTE IN THIS
RESPECT THAT GSA HAS MODIFIED ITS GUIDELINES TO USER AGENCIES (SEE
HANDBOOK, TELEPROCESSING SERVICES PROGRAM, OCTOBER 1978) TO REQUIRE
NOTIFICATION TO POTENTIAL OFFERORS OF ANTICIPATED SYSTEM LIFE DURATION
AS WELL AS ANY SUBSEQUENT SIGNIFICANT CHANGES TO WHAT WAS INITIALLY
ANTICIPATED.
ALTHOUGH UCS'S COMPETITIVE POSITION WAS ADVERSELY AFFECTED AS A
RESULT OF THE CHANGE IN ANTICIPATED DURATION, IT IS NOT CLEAR THAT HAD
UCS BEEN INFORMED OF THIS CHANGE IT WOULD HAVE BEEN ABLE OR WILLING TO
AMEND ITS MASC TO REDUCE ITS PRICES IN OTHER AREAS TO MAKE UP FOR THE
INCREASED CONVERSION COST ASSESSMENT. IN THIS REGARD WE NOTE THAT PRICE
MODIFICATIONS UNDER A MASC MUST APPLY NOT TO JUST A PARTICULAR ORDER BUT
TO ALL ORDERS PLACED UNDER THE MASC. ON THE OTHER HAND, BECAUSE THE
NAVY DID NOT NOTIFY VENDORS THAT THE PREVIOUSLY DISCLOSED DURATION
PERIOD HAD BEEN CONSIDERABLY SHORTENED, UCS NEVER HAD THE OPPORTUNITY TO
CONSIDER WHETHER IT WANTED TO ENHANCE ITS COMPETITIVE POSITION UNDER
THOSE CIRCUMSTANCES BY AMENDING ITS MASC. WE THINK THIS WARRANTS
SUSTAINING THE PROTEST.
WE ARE ALSO CONCERNED WITH THE NAVY'S USE OF CSC'S PRICING PROFILES
IN THE BENCHMARK COST EVALUATION. CSC OFFERS FOUR PRICING LEVELS FOR
EACH OF THE MAJOR COST ELEMENTS WHICH MAKE UP THE TELEPROCESSING
SERVICE. THE BUYER IS PERMITTED TO SELECT ONE PRICE LEVEL FOR EACH COST
ELEMENT. GENERALLY THE BUYER WILL SELECT THE LOWEST PRICE LEVEL FOR THE
ELEMENT IT EXPECTS TO USE MOST. ALTHOUGH CSC APPARENTLY DOES NOT PERMIT
A CUSTOMER TO USE THE SAME LEVEL FOR TWO DIFFERENT ELEMENTS AND UCS
POINTS OUT THAT THE NAVY'S ORDER FOR CSC'S SERVICE IN FACT PRICES EACH
ELEMENT AT A SEPARATE PRICING LEVEL, THE NAVY EVALUATED CSC'S BENCHMARK
AS IF IT COULD ORDER TWO ELEMENTS AT ONE PRICE LEVEL.
THE NAVY STATES THAT IT MERELY USED THE OPTIMUM PRICING SCHEDULE IN
ITS EVALUATION, EXPLAINING THAT ALL OFFERORS INCLUDING UCS HAVE THEIR
BENCHMARKS SET UP FOR IDEAL PRICING CONDITIONS WHICH MAY NOT OCCUR IN AN
ACTUAL ORDER. THE NAVY MAINTAINS THAT BOTH THE OFFERS OF UCS AND CSC
WERE SUSCEPTIBLE TO SIMILAR DISCREPANCIES BETWEEN POTENTIAL AND ACTUAL
USE AND THAT EACH FIRM WAS PERMITTED TO COMPETE ON AN EQUAL BASIS.
THE PROBLEM WITH THE NAVY'S EVALUATION APPROACH IS THAT IT IGNORES
ACTUAL PRICING CONDITIONS AND UTILIZES PRICES THAT COULD NOT BE REALIZED
UNDER THE TERMS OF THE CONTRACT. SUCH AN APPROACH RAISES THE RISK THAT
THE EVALUATION WILL NOT ACCURATELY INDICATE THE LOWEST PROBABLE COST
OFFER. IN THIS CASE, HOWEVER, UCS, ALTHOUGH IT HAD AMPLE OPPORTUNITY TO
DO SO, HAS NOT SHOWN THAT THE DISCREPANCY CAUSED CSC TO BE EVALUATED AS
THE LOW OFFEROR. CONSEQUENTLY, WE ARE UNABLE TO CONCLUDE THAT THIS
DEFICIENCY WAS PREJUDICIAL TO UCS, AND WE FIND NOTHING IN THE RECORD
WHICH INDICATES THAT THE NAVY MADE OTHER THAN A GOOD FAITH ATTEMPT TO
EVALUATE EACH OFFEROR'S BENCHMARK ON WHAT IT BELIEVED WAS A REASONABLE
BASIS.
IN LIGHT OF THIS RECORD, WE DO NOT BELIEVE A RECOMMENDATION TO CANCEL
THE ORDER IS WARRANTED. THE DETERMINATION WHETHER TO SO RECOMMEND
INVOLVES THE CONSIDERATION OF SEVERAL FACTORS, INCLUDING BUT NOT LIMITED
TO THE SERIOUSNESS OF THE PROCUREMENT DEFICIENCY, THE DEGREE OF
PREJUDICE TO OTHER COMPETITORS, THE GOOD FAITH OF THE PARTIES, THE
EXTENT OF PERFORMANCE, COST TO THE GOVERNMENT, THE URGENCY OF THE
REQUIREMENT AND THE IMPACT OF A CANCELLATION ON THE USING ACTIVITIES'
OPERATIONS. SYSTEM DEVELOPMENT CORPORATION, B-191195, AUGUST 31, 1978,
78-2 CPD 159. IN THIS CASE WE NOTE THAT THE FIRST DEFICIENCY OCCURRED
IN AN AREA NOT SPECIFICALLY COVERED BY REGULATIONS AND THAT IT IS
SPECULATIVE WHETHER THE PROTESTER WOULD HAVE BEEN EVALUATED AS THE
LOWEST COST VENDOR HAD THE AGENCY PROPERLY NOTIFIED VENDORS OF THE
CHANGED REQUIREMENT OR EVALUATED THE BENCHMARK DIFFERENTLY. THERE ALSO
HAS BEEN NO SHOWING THAT THE NAVY ACTED OTHER THAN IN GOOD FAITH. WE
ARE ALSO AWARE THAT THE FINAL OPTION PERIOD OF THE ORDER IS IN ITS 9TH
MONTH OF PERFORMANCE. THUS, ALTHOUGH WE SUSTAIN THIS PROTEST, WE DO NOT
THINK IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE
ORDER ISSUED TO CSC.
UCS HAS CLAIMED THE COST OF PREPARING ITS BENCHMARK. THESE COSTS ARE
IN THE NATURE OF BID/PROPOSAL PREPARATION COSTS, REIMBURSEMENT OF WHICH
THIS OFFICE FIRST PERMITTED IN T&H COMPANY, 54 COMP. GEN. 1021 (1975),
75-1 CPD 345, WHERE WE ADOPTED THE STANDARD ANNOUNCED IN KECO
INDUSTRIES, INC. V UNITED STATES, 492 F.2D 1200 (CT. CL. 1974). THE
STANDARD IS WHETHER THE AGENCY'S ACTIONS WERE ARBITRARY AND CAPRICIOUS
TOWARDS THE CLAIMANT. A SECOND REQUIREMENT IS THAT THE AGENCY'S ACTIONS
DEPRIVE THE CLAIMANT OF AN AWARD TO WHICH IT WAS OTHERWISE ENTITLED.
SYSTEM DEVELOPMENT CORPORATION, SUPRA. UCS'S CLAIM FAILS UNDER BOTH
CRITERIA.
FIRST, IT DOES NOT APPEAR THAT UCS WOULD HAVE BEEN ISSUED AN ORDER
HAD THE DEFICIENCIES NOTED HEREIN NOT OCCURRED. SECOND, UCS HAS NOT
SHOWN THAT THE NAVY KNEW OR SHOULD HAVE KNOWN THAT ITS FAILURE TO INFORM
VENDORS OF THE DURATION CHANGE WAS IMPROPER OR THAT THE DEFICIENCIES IN
THIS PROCUREMENT RESULTED FROM CAPRICE OR BAD FAITH. INDEED, AT LEAST
WITH RESPECT TO THE FIRST DEFICIENCY, THE LACK OF REGULATORY GUIDANCE IN
THE AREA WOULD MAKE SUCH A FINDING UNLIKELY. IN THE ABSENCE OF A
FINDING OF BAD FAITH OR ARBITRARY ACTION, BID/PROPOSAL COSTS ARE NOT
AWARDED EVEN IF THE CLAIMANT HAD BEEN IN A POSITION TO RECEIVE AN AWARD
BUT DID NOT BECAUSE OF THE AGENCY'S MISTAKE OR INADVERTENCE. BASE
INFORMATION SYSTEMS, INC., B-186932, OCTOBER 25, 1978, 78-2 CPD 299.
THE PROTEST IS SUSTAINED. THE CLAIM IS DENIED.
B-194510, JUL 5, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE EQUAL ITEM DOES NOT CONFORM TO SALIENT CHARACTERISTICS OF
BRAND NAME PRODUCT, BID MUST BE REJECTED AS NONRESPONSIVE.
2. NONRESPONSIVE BID CANNOT BE ACCEPTED EVEN IF IT OFFERS GOVERNMENT
MONETARY SAVINGS, BECAUSE ACCEPTANCE OF SUCH BID WOULD BE CONTRARY TO
INTEGRITY OF COMPETITIVE BIDDING SYSTEM.
3. ONE PROCURING ACTIVITY'S DETERMINATION OF MINIMUM NEEDS IS NOT
DETERMINATIVE OF PROPRIETY OF ANOTHER PROCURING ACTIVITY'S MINIMUM
NEEDS.
SAVE-ON WHOLESALE PRODUCTS:
THE DEPARTMENT OF THE NAVY (NAVY) ISSUED INVITATION FOR BIDS (IFB)
NOO123-79-B-0520 FOR THE LEASE AND MAINTENANCE OF SEVEN CONTRACTOR-OWNED
SOFT-SERVE, ICE CREAM DISPENSERS, YUBI MODEL Y-200-A1, OR EQUAL, AND THE
FURNISHING OF ICE CREAM IN 5-GALLON STAINLESS STEEL CONTAINERS FOR 1
YEAR WITH 2-YEAR OPTIONS.
FIVE BIDS WERE SOLICITED. TWO BIDS WERE RECEIVED. SAVE-ON WHOLESALE
PRODUCTS (SOWP) SUBMITTED THE LOW BID. SOFT SWIRL CORPORATION (SOFT
SWIRL), THE INCUMBENT CONTRACTOR,SUBMITTED THE OTHER BID AND OFFERED THE
BRAND NAME DISPENSER. THE NAVY DETERMINED THAT SOWP DID NOT OFFER A
COMPLIANT DISPENSER AND, CONSEQUENTLY, ITS BID WAS REJECTED AS
NONRESPONSIVE. THE CONTRACT WAS AWARDED TO SOFT SWIRL.
IN ADVISING SOWP THAT ITS BID HAD BEEN REJECTED, THE NAVY STATED AS
FOLLOWS:
"EVALUATION WAS MADE ON THE BASIS OF YOUR BID AND DESCRIPTIVE
LITERATURE PROVIDED THERETO.
"IT IS DETERMINED THAT THE BID FAILS TO MEET THE SPECIFICATIONS OF
SECTIONS F-1 AND F-9.
"F-1 'STORAGE SPACE: NECESSARY SPACE TO PLACE UNDER CONSTANT
REFRIGERATION TWO (2) FIVE GALLON STAINLESS STEEL TANKS (PER HEAD) AND
KEPT AT A TEMPERATURE OF 32 TO 43 DEGREES FAHRENHEIT.'
"F-9 'THE CONTRACTOR WILL FURNISH SOFT SERVE LIQUID MIX IN FIVE (5)
GALLON STAINLESS STEEL TANKS FILLED, CHARGED AND SEALED UNDER CONTROLLED
CONDITIONS TO INHIBIT GROWTH OF BACTERIA.' THE TAYLOR MODEL 334 (WHICH
SOWP BID) IS A GRAVITY FED MACHINE WHERE RAW MIX MUST BE POURED IN BY
THE OPERATOR. THE SPECIFICATION (F-9) REQUIRES SEALED CANISTER,
PRESSURE FORCED-FED. ADDITIONALLY, THE TAYLOR MODEL 334, BY VIRTUE OF
ITS DESIGN, WILL NOT PERMIT THE USE AND STORAGE OF SEALED STAINLESS
STEEL CANISTERS, WHICH ARE FILLED AND STERILIZED AT THE DAIRY. (F-1)."
IN ITS REPORT TO OUR OFFICE, THE NAVY ALSO CONTENDS THAT THE TAYLOR
DISPENSER BID BY SOWP IS NOT COMPLIANT WITH BRAND NAME DIMENSIONS SET
OUT IN SALIENT CHARACTERISTIC F-2 OF THE IFB.
SOWP PROTESTED THE REJECTION OF ITS BID TO THE NAVY. THE NAVY DENIED
THE PROTEST.
SOWP SUBSEQUENTLY FILED A PROTEST WITH OUR OFFICE ALLEGING IN
SUBSTANCE THAT IT SHOULD HAVE BEEN AWARDED THE CONTRACT BECAUSE OTHER
NAVY FACILITIES USE THE TAYLOR DISPENSER MODEL 334 WHICH IT BID, AND
BECAUSE SOWP'S BID WAS LOW. SOWP, HOWEVER, DOES NOT TAKE ISSUE WITH THE
NAVY'S CONTENTIONS THAT ITS DISPENSER DID NOT MEET THREE SALIENT
CHARACTERISTICS OF THE BRAND NAME DISPENSER.
WE HAVE CONSISTENTLY HELD THAT WHERE, AS HERE, THE EQUAL ITEM BID
DOES NOT CONFORM TO THE SALIENT CHARACTERSTICS OF THE BRAND NAME
PRODUCT, THE BID MUST BE REJECTED AS NONRESPONSIVE. SEE, E.G., GENERAL
HYDRAULICS CORPORATION, B-181537, AUGUST 30, 1974, 74-2 CPD 133. THE
NONRESPONSIVE BID CANNOT BE ACCEPTED EVEN IF IT OFFERS THE GOVERNMENT
MONETARY SAVINGS, BECAUSE ACCEPTANCE OF SUCH A BID WOULD BE CONTRARY TO
THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. ED-MOR ELECTRIC CO.,
INC., B-187348, NOVEMBER 17, 1976, 76-2 CPD 431.
THE FACT THAT OTHER NAVY FACILITIES USE THE TAYLOR DISPENSER IS OF NO
CONSEQUENCE. ONE PROCURING ACTIVITY'S DETERMINATION OF ITS MINIMUM
NEEDS IS NOT DETERMINATIVE OF THE PROPRIETY OF ANOTHER PROCURING
ACTIVITY'S MINIMUM NEEDS. MAREMONT CORPORATION, 55 COMP. GEN. 1362
(1976), 76-2 CPD 181, AND CASES CITED THEREIN.
BASED ON THE FOREGOING, THE PROTEST IS DENIED.
B-195044, JUL 5, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
DETERMINATION TO CANCEL COMPETITIVE SOLICITATION AND SET ASIDE
PROCUREMENT UNDER SECTION 8(A) OF SMALL BUSINESS ACT, EVEN THOUGH HIGHER
PRICED CONTRACT MAY RESULT, IS MATTER FOR CONTRACTING AGENCY AND SBA AND
WILL NOT BE REVIEWED BY GAO IN ABSENCE OF SHOWING OF FRAUD OR BAD FAITH
ON PART OF GOVERNMENT OFFICIALS.
ARLANDRIA CONSTRUCTION CO., INC.:
ARLANDRIA CONSTRUCTION CO., INC. (ARLANDRIA), PROTESTS THE DEPARTMENT
OF THE ARMY'S (ARMY) DECISION TO CANCEL INVITATION FOR BIDS (IFB) NOS.
DAHC36-78-B-0108, DAHC3C-79-B-0010, AND DAHC3C-79-B-0015, AND TO SET
ASIDE THE PROCUREMENT FOR A MINORITY CONTRACTOR UNDER THE SMALL BUSINESS
ADMINISTRATION'S (SBA) "8(A)" PROGRAM.
EACH OF THE THREE SOLICITATIONS FOR THIS PROCUREMENT WAS CANCELED BY
THE CONTRACTING OFFICER BECAUSE OF PRICE UNREASONABLENESS. FOLLOWING
THESE CANCELLATIONS, A DECISION WAS MADE TO AWARD THE CONTRACT UNDER
SECTION 8(A) OF THE SMALL BUSINESS ACT. ARLANDRIA OBJECTS TO THE
NEGOTIATION OF THIS PROCUREMENT WITH A MINORITY CONTRACTOR BECAUSE IT
BELIEVES THAT THE FIRM'S INITIAL PROPOSAL UNDER THE 8(A) SET-ASIDE
EXCEEDS ARLANDRIA'S REJECTED BID PRICE.
SECTION 8(A) OF THE SMALL BUSINESS ACT AUTHORIZES THE SBA TO ENTER
INTO CONTRACTS WITH ANY GOVERNMENT AGENCY HAVING PROCUREMENT POWERS.
THE CONTRACTING OFFICER OF SUCH AGENCY IS AUTHORIZED "IN HIS DISCRETION"
TO LET THE CONTRACT TO THE SBA "UPON SUCH TERMS AND CONDITIONS" AS MAY
BE AGREED UPON BETWEEN THE SBA AND THE PROCURING AGENCY. 53 COMP. GEN.
143 (1973). THEREFORE, WE HAVE RECOGNIZED THAT THE DETERMINATION TO
CANCEL A COMPETITIVE SOLICITATION AND INITIATE A SET-ASIDE UNDER SECTION
8(A) IS A MATTER FOR THE CONTRACTING AGENCY AND THE SBA TO DECIDE.
ECHOLS ELECTRIC, INC., B-194123.2, APRIL 6, 1979, 79-1 CPD 242. IN VIEW
OF THE BROAD DISCRETION VESTED IN THE CONTRACTING OFFICER, WE DO NOT
REVIEW DETERMINATIONS TO SET ASIDE A PROCUREMENT UNDER SECTION 8(A)
UNLESS THE PROTESTER SHOWS FRAUD ON THE PART OF GOVERNMENT OFFICIALS OR
SUCH WILLFUL DISREGARD OF THE FACTS AS TO NECESSARILY IMPLY BAD FAITH.
DATA CONTROLS/NORTH, INC., B-192342, JULY 21, 1978, 78-2 CPD 62;
POLI-COM, INC., B-190030, MARCH 16, 1978, 78-1 CPD 211; CHEMICAL
TECHNOLOGY, INC., B-190165, JANUARY 18, 1978, 78-1 CPD 46. NO SUCH
SHOWING HAS BEEN MADE HERE.
THE FACT THAT AN 8(A) FIRM'S PRICE UNDER THE SET-ASIDE MAY BE HIGHER
THAN THE PROTESTER'S REJECTED BID PRICE IN THE CANCELED PRIOR
PROCUREMENTS IS NOT LEGALLY OBJECTIONABLE. UNDER THE 8(A) PROGRAM, IT
IS NOT UNUSUAL FOR CONTRACTS TO BE FUNDED IN AMOUNTS EXCEEDING PRICES
THAT WOULD BE OBTAINED THROUGH UNRESTRICTED COMPETITION. SEE, E.G.,
KINGS POINT MANUFACTURING COMPANY, INC., 54 COMP. GEN. 913 (1975), 75-1
CPD 264. SUCH 8(A) SET-ASIDE CONTRACTS ARE MADE IN ORDER TO ASSIST
SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SOCIALLY AND
ECONOMICALLY DISADVANTAGED PERSONS TO ACHIEVE A COMPETITIVE POSITION IN
THE MARKET PLACE. THE GOVERNMENT, BY INCREASING THE PARTICIPATION OF
SUCH FIRMS IN FEDERAL PROCUREMENTS, ANTICIPATES THAT THESE FIRMS
EVENTUALLY MAY BECOME SELF-SUFFICIENT, VIABLE BUSINESSES CAPABLE OF
COMPETING EFFECTIVELY IN UNRESTRICTED PROCUREMENTS. WHATEVER ADDITIONAL
PRICE THE GOVERNMENT MAY PAY WHEN IT UTILIZES 8(A) SET-ASIDES IS MERELY
THE COST OF FURTHERING THIS SOCIO-ECONOMIC GOAL. THUS, WE CANNOT VIEW
THE IFB CANCELLATIONS AS IMPROPER MERELY BECAUSE THE CONTRACTING AGENCY
VIEWED THE BIDS RECEIVED UNDER OPEN COMPETITION AS UNREASONABLY HIGH
EVEN THOUGH A HIGHER PRICED CONTRACT MAY BE AWARDED UNDER THE 8(A)
SET-ASIDE.
THE PROTEST IS DISMISSED.
B-195176, JUL 5, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
INCUMBENT CONTRACTOR'S PROTEST AGAINST CONTRACTING AGENCY'S
DETERMINATION NOT TO EXERCISE CONTRACT OPTION IS MATTER OF CONTRACT
ADMINISTRATION AND NOT FOR REVIEW BY GAO.
DELTA CONTRACTING CO.:
DELTA CONTRACTING CO. (DELTA) PROTESTS THE DEPARTMENT OF THE AIR
FORCE'S (AIR FORCE) FAILURE TO EXERCISE ITS OPTION UNDER CONTRACT NO.
F20603-78-C-0017.
THE CONTRACT IS FOR CUSTODIAL SERVICES FOR WURTSMITH AIR FORCE BASE.
THE CONTRACT WAS AWARDED TO DELTA FOR A 1-YEAR PERIOD WITH TWO 1-YEAR
EXTENSIONS AT THE OPTION OF THE GOVERNMENT.
WE HAVE HELD IN PRIOR DECISIONS THAT WHERE THE RECORD SHOWS THAT THE
OPTION PROVISIONS OF A CONTRACT ARE EXERCISABLE AT THE SOLE DISCRETION
OF THE GOVERNMENT, OUR OFFICE WILL NOT CONSIDER UNDER OUR BID PROTEST
PROCEDURES, 4 C.F.R. PART 20 (1978), THE INCUMBENT CONTRACTOR'S
CONTENTION THAT THE AGENCY SHOULD HAVE EXERCISED THOSE OPTIONS. C.G.
ASHE ENTERPRISES, 56 COMP. GEN. 397 (1977), 77-1 CPD 166.
THEREFORE, THE PROTEST IS DISMISSED.
B-193329, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. SOLICITATION FOR OFF-LINE INCREMENTAL PLOTTER WHICH WAS TO
INCLUDE PROGRAMMABLE CONTROLLER, RS-232 COMMUNICATIONS INTERFACE, AND
TAPE TRANSPORTS WITH "WRITE" CAPABILITY, BUT WHICH DID NOT EXPLAIN NEED
FOR SUCH FEATURES, LEFT UNCERTAIN WHETHER REQUIREMENTS WERE FULLY
DESCRIBED, BUT UNCERTAINTY WAS RESOLVED BY AGENCY'S WRITTEN ANSWERS
FURNISHED IN RESPONSE TO PROTESTER'S PREPROPOSAL QUESTIONS.
2. REQUIREMENT FOR RS-232 INTERFACE WAS NOT UNDULY RESTRICTIVE
BECAUSE NASA WAS JUSTIFIED IN BELIEVING THAT A STANDARD INDUSTRY
COMMUNICATIONS INTERFACE WAS NECESSARY TO ASSURE ADAPTABILITY OF
INCREMENTAL PLOTTING SYSTEM OVER 10-YEAR PROJECTED SERVICE LIFE.
MOREOVER, NASA ADVISED PROTESTER IN WRITING THAT ALTERNATIVE APPROACHES
TO PARTICULAR "ON-LINE" FEATURE WOULD BE CONSIDERED IF PROPOSED.
CALIFORNIA COMPUTER PRODUCTS, INC.:
CALIFORNIA COMPUTER PRODUCTS, INC. (CALCOMP) PROTESTS THE TERMS OF
RFP 3-744813, ISSUED BY THE NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION'S LEWIS RESEARCH CENTER (NASA) FOR AN OFF-LINE
INCREMENTAL PLOTTER SYSTEM. IN CALCOMP'S VIEW, NASA DID NOT PROVIDE
SUFFICIENT INFORMATION TO PERMIT PREPARATION OF A PROPOSAL. MOREOVER,
CALCOMP BELIEVES NASA INCLUDED REQUIREMENTS WHICH WERE UNDULY
RESTRICTIVE OF COMPETITION. WE FIND THE PROTEST IS WITHOUT MERIT.
AS USED IN THIS TYPE OF APPLICATION, PLOTTING SYSTEMS CONSIST OF
SEVERAL COMPONENTS WHICH PROCESS COMPUTER GENERATED DATA TO PRODUCE THE
DATA ON PAPER AS A GRAPHIC DISPLAY OR "PLOT." PLOTTING SYSTEMS SYSTEMS
CAN BE DESIGNED TO OPERATE IN AN "ON-LINE" OR "OFF-LINE" MODE. AN
ON-LINE SYSTEM IS ONE WHICH RECEIVES AND PROCESSES DATA WHILE CONNECTED
TO A SOURCE OR "HOST" SYSTEM, AS DISTINGUISHED FROM AN OFF-LINE SYSTEM
DESIGNED TO PROCESS INFORMATION WITHOUT BEING CONNECTED TO A HOST
SYSTEM. NASA TITLED THE SPECIFICATIONS FOR THIS PROCUREMENT, "OFF-LINE
INCREMENTAL PLOTTING SYSTEM."
ACCORDING TO NASA, IT SOUGHT TO REPLACE TWO FOURTEEN YEAR OLD 12-INCH
PLOTTERS WITH A SINGLE 12- AND 36-INCH MULTICOLOR SYSTEM. THE
SPECIFICATIONS DESCRIBE A SYSTEM CONSISTING OF TWO MAGNETIC TAPE
TRANSPORTS (TAPE RECORDING MACHINES) COUPLED TO TWO INCREMENTAL PLOTTERS
THROUGH A PROGRAMMABLE CONTROLLER. ALSO, THE CONTRACTOR IS TO PROVIDE
INDUSTRY COMPATIBLE FORTRAN BASED SOFTWARE FOR USE ON IBM 360/67 AND
UNIVAC 1100/42 EQUIPMENT. THIS WILL PERMIT NASA TO PREPARE MAGNETIC
TAPES TO BE READ BY THE PLOTTING SYSTEM.
AS STATED IN THE SPECIFICATIONS, THE PROGRAMMABLE CONTROLLER WAS TO
INCLUDE:
"1. AN OPERATOR'S CONSOLE TERMINAL, WITH A CHARACTER OUTPUT RATE OF
AT LEAST 30 CHARACTERS PER SECOND. THE OPERATOR'S TERMINAL WILL PERFORM
THE FUNCTIONS OF STARTING PLOTS, REQUESTING MULTIPLE PLOTS OF THE SAME
DATA, REQUESTING FILE SEARCHES OF A MAGNETIC TAPE FOR GIVEN PLOTS, AND
SERVING AS A SYSTEM PROGRAMMER'S AID DURING A REPROGRAMMING OR DEBUGGING
SESSION.
"2. RANDOM ACCESS MEMORY OF AT LEAST 16K WORDS (16 BIT WORDS) OR 32K
(8 BIT BYTES), TO INCLUDE THE OPERATING SYSTEM. THIS MEMORY SHALL BE
CAPABLE OF BEING EXPANDED TO AT LEAST 32K WORDS (64K BYTES) AT A LATER
DATE.
"3. AN ASYNCHRONOUS RS 232 COMMUNICATION INTERFACE OPERATING AT
SPEEDS UP TO 9600 BAUD. (AND)
"4. INTERFACES AND CABLING TO THE TWO MAGNETIC TAPE TRANSPORTS ***
AND THE TWO INCREMENTAL PLOTTERS ***."
AS CALCOMP EXPLAINS, IT HAS DESIGNED AND MANUFACTURED DIGITAL
PLOTTING SYSTEMS FOR MANY YEARS. IT MANUFACTURES BOTH OFF- AND ON-LINE
EQUIPMENT. IT MANUFACTURES EQUIPMENT COMPATIBLE WITH THE RS-232
INTERFACE. ALTHOUGH CALCOMP AGREES WITH NASA THAT THE RS-232-C
INTERFACE IS AN INDUSTRY STANDARD, SPECIFYING THE ELECTRICAL
CHARACTERISTICS AND SOME DATA FORMAT LIMITATIONS, IT ARGUES THAT THERE
ARE MANY DIFFERENT WAYS TO IMPLEMENT AND SUPPORT THE INTERFACE. WITHOUT
MORE DETAILED SPECIFICATIONS, CALCOMP PROTESTS, IT IS UNABLE TO PROPERLY
ASSESS THE HARDWARE AND SOFTWARE SUPPORT REQUIRED. CALCOMP ALSO ARGUES
THAT THE RS-232 SPECIFICATION IS UNDULY RESTRICTIVE ON ITS FACE AND
BECAUSE THE ONE FIRM WHICH SUBMITTED A PROPOSAL IS THE ONLY FIRM WITH AN
"OFF-LINE" PLOTTING SYSTEM WHICH AS PART OF THE CONTROLLER HAS "ON-LINE"
RS-232 CAPABILITY.
CALCOMP'S INITIAL REACTION TO NASA'S REQUIREMENTS WAS NOT
UNWARRANTED. CALCOMP ASSUMED THAT THE EQUIPMENT WAS MEANT TO SUPPORT
SOME KIND OF ON-LINE APPLICATION, A REASONABLE ASSUMPTION INASMUCH AS AN
INTERFACE IS USED TO COUPLE TWO PIECES OF EQUIPMENT THROUGH AN ON-LINE
CONNECTION. THE RS-232 REQUIREMENT WAS INCLUDED IN THE CONTROLLER
PORTION OF THE SPECIFICATION. CALCOMP ASSUMED THAT THE RS-232 INTERFACE
WAS REQUIRED TO BE AN INTEGRAL PART OF THE CONTROLLER. CONSEQUENTLY, IT
BELIEVED, THE RS-232 INTERFACE HAD TO PERMIT ON-LINE COMMUNICATION WITH
THE CONTROLLER.
WE ALSO BELIEVE IT WAS REASONABLE FOR CALCOMP TO QUESTION WHETHER THE
SPECIFICATIONS WERE COMPLETE. NOT ONLY DID NASA INSIST THAT THE
CONTROLLER BE PROGRAMMABLE, BUT THE SPECIFICATIONS STATED THAT:
"THE MAGNETIC TAPE TRANSPORTS WILL BE USED PRIMARILY TO READ PLOTTING
TAPES PREPARED ON THE HOST COMPUTERS. THEY WILL ALSO BE USED IN A
READ/WRITE CAPACITY BY THE SYSTEM PROGRAMMER IN FUTURE PROGRAM
DEVELOPMENT."
NASA DID NOT EXPLAIN WHAT OTHER USES THE TAPE TRANSPORTS WOULD BE PUT
TO OR WHAT FUTURE PROGRAM DEVELOPMENT WOULD REQUIRE. THE SPECIFICATIONS
ONLY STATED THAT THE GOVERNMENT INTENDED TO ACQUIRE MAGNETIC TAPE
UTILITY PROGRAMS AT A LATER DATE SHOULD THE NEED ARISE.
WE DO NOT FEEL, HOWEVER, THAT THE SPECIFICATIONS WERE UNDULY
RESTRICTIVE. MOREOVER, WE ALSO FEEL THAT NASA PROVIDED CALCOMP WITH
SUFFICIENT INFORMATION BEFORE THE INITIAL CLOSING DATE FOR RECEIPT OF
PROPOSALS SO THAT CALCOMP SHOULD HAVE BEEN ABLE TO UNDERSTAND NASA'S
ACTUAL REQUIREMENTS.
THE RS-232 INTERFACE PRESENTLY IS USED TO COUPLE A SUBSTANTIAL
PORTION OF THE EQUIPMENT USED AT THE LEWIS RESEARCH CENTER. BECAUSE THE
PLOTTING SYSTEM IS TO MEET NASA'S NEEDS OVER A PROJECTED 10-YEAR SYSTEM
LIFE, NASA BELIEVED CERTAIN FEATURES, INCLUDING THE RS-232 INTERFACE, A
SOFTWARE BASED ("PROGRAMMABLE") CONTROLLER, AND TAPE "WRITE" CAPABILITY,
WERE ESSENTIAL TO GIVE REASONABLE ASSURANCE THAT CHANGING APPLICATIONS,
OR ADVANCES IN THE STATE-OF-THE-ART, WOULD NOT RENDER THE SYSTEM
PREMATURELY OBSOLETE. THUS, IT APPEARS THE GENERAL RS-232 REQUIREMENT
MEETS A LEGITIMATE NASA NEED AND IS NOT UNDULY RESTRICTIVE OF
COMPETITION.
WITH RESPECT TO CALCOMP'S MORE SPECIFIC OBJECTION, NASA, RESPONDING
TO QUESTIONS FROM CALCOMP, EXPLAINED IN WRITING THAT IT ANTICIPATED
USING THE INTERFACE TO SUPPORT A GOVERNMENT-OWNED TELTRONIX 4014
GRAPHICS TERMINAL, AFFORDING NASA A "QUICK LOOK" CAPABILITY WITH WHICH
THE OPERATOR COULD PREVIEW OR VISUALLY DISPLAY A PLOT TO DETERMINE
WHETHER IT SHOULD BE PRINTED. NASA STATED THAT IT COULD CONCEIVE OF
OTHER POSSIBLE APPLICATIONS, INCLUDING AN EVENTUAL NEED TO ADD
ADDITIONAL PLOTTERS. NASA, HOWEVER, DID NOT INSIST THAT ITS
COMMUNICATIONS (INTERFACE) REQUIREMENT BE MET IN ANY ONE PARTICULAR WAY
(I.E. THROUGH THE CONTROLLER), BUT ADVISED CALCOMP THAT ALTERNATIVE
METHODS OF INTERFACING EQUIPMENT WOULD BE CONSIDERED IF PROPOSED.
FURTHER, WE BELIEVE THE WRITTEN ANSWERS FURNISHED CALCOMP, WITH
EXAMPLES OF POSSIBLE INTERFACE APPLICATIONS, ADEQUATELY EXPLAINED WHY
THE DESCRIBED REQUIREMENTS WERE NEEDED AND SHOULD HAVE REMOVED THE BASIS
FOR CALCOMP'S INITIAL ASSUMPTIONS. ALTHOUGH CALCOMP STILL COMPLAINS
THAT NASA DID NOT FULLY DESCRIBE THE TAPE TRANSPORT SYSTEM, NASA STATED
ITS ACTUAL REQUIREMENT IN FUNCTIONAL, AND WE BELIEVE, ADEQUATE TERMS.
THE TAPE TRANSPORTS WERE TO INTERFACE WITH THE CONTROLLER. THEY WERE
REQUIRED TO "READ AND WRITE 9-TRACK MAGNETIC TAPES AT 800 AND 1600
CHARACTERS PER INCH USING THE STANDARD IBM RECORDING FORMAT," PERMIT
TRANSFER RATES OF AT LEAST 20,000 CHARACTERS PER SECOND, HAVE OVERWRITE
PROTECTION, AND CONTAIN CERTAIN NORMAL TAPE CONTROL FUNCTIONS. WITHOUT
MORE, A SYSTEM INCLUDING TWO SUCH TRANSPORTS WAS ACCEPTABLE IF THE
TRANSPORTS WOULD PERMIT THE SYSTEM AS A WHOLE TO FUNCTION AS AN OFF-LINE
PLOTTER.
THE PROTEST IS DENIED.
B-193601, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
APPROPRIATED FUNDS MAY NOT BE USED TO PURCHASE "HOSPITALITY KITS"
SINCE EXPENDITURE IS PROHIBITED BY 10 U.S.C. 2387, AS IMPLEMENTED BY DOD
INSTRUCTION.
PURCHASE OF "HOSPITALITY KITS" BY THE NAVAL LEGAL SERVICE OFFICE:
THE U.S. NAVY FINANCE OFFICE, SAN FRANCISCO, CALIFORNIA, HAS
REQUESTED AN ADVANCE DECISION CONCERNING THE PROPRIETY OF CERTIFYING FOR
PAYMENT FROM APPROPRIATED FUNDS A VOUCHER IN FAVOR OF THE NAVY EXCHANGE
FOR $98.40.
THE ITEMS LISTED ON THE VOUCHER ARE KITCHEN UTENSILS WHICH THE NAVY
STATES WERE ACQUIRED TO ESTABLISH TWO NAVAL LEGAL SERVICE OFFICE (NLSO)
"HOSPITALITY KITS" AT THE GUAM NAVAL BASE FOR INCOMING OR DEPARTING
OFFICER AND ENLISTED PERSONNEL, BECAUSE THERE ARE NO OTHER MEANS
AVAILABLE TO PROVIDE THIS ASSISTANCE AND SERVICE TO THESE PERSONNEL AND
THEIR FAMILIES. THE KITS ARE TO BE LOANED TO THESE PERSONNEL ON A
CONTROLLED USE BASIS, AND WILL REMAIN THE PROPERTY OF THE NAVY. AS
FURTHER JUSTIFICATION FOR THIS PURCHASE, THE NLSO SAYS THAT:
"IN THE NEXT 10 MONTH PERIOD THERE WILL BE A TURNOVER OF ELEVEN
ASSIGNED INDIVIDUALS AND THEIR FAMILIES WITH REPLACEMENTS TO BE
DESIGNATED. THE GENERAL AVAILABILITY OF HOUSING FOR NEW ARRIVALS
RESULTS IN RAPID TERMINATION OF T.L.A. (TEMPORARY LODGING ALLOWANCE)
LEAVING THOSE INDIVIDUALS WITH NO READY MEANS SHORT OF EXPENSIVE
PURCHASES OF ITEMS ALREADY OWNED AND IN THEIR HHG (HOUSEHOLD GOODS).
DEPARTING PERSONNEL ARE SEVERELY LIMITED IN ENTITLEMENT TO TLA AND ARE
FREQUENTLY LEFT TO RESORT TO BEGGING AND BORROWING MINIMAL ESSENTIAL
ITEMS LIKE THOSE CONTAINED ON THIS VOUCHER."
THE NLSO PROPOSES PAYMENT OF THIS AMOUNT OUT OF ITS OPERATION AND
MAINTENANCE FUND.
UNDER 10 U.S.C. SEC. 2387 (1976) DEPARTMENT OF DEFENSE (DOD)
APPROPRIATIONS MAY NOT BE USED TO SUPPLY OR REPLACE TABLE LINEN, DISHES,
GLASSWARE, SILVER, AND KITCHEN UTENSILS FOR USE IN THE RESIDENCES ON
SHORE, OR QUARTERS ON SHORE, OF OFFICERS OF THE ARMED FORCES, EXCEPT
"UNDER REGULATIONS APPROVED BY THE SECRETARY OF DEFENSE AND PROVIDING
FOR UNIFORM PRACTICES AMONG THE ARMED FORCES UNDER HIS JURISDICTION."
REGULATIONS IMPLEMENTING THIS STATUTE ARE CONTAINED IN DOD INSTRUCTION
NO. 4165.43, DATED MARCH 27, 1975. THIS INSTRUCTION, ENTITLED
"PROVISION OF FURNISHINGS IN PERSONNEL QUARTERS," IS APPLICABLE TO "ALL
FURNISHINGS FOR GOVERNMENT QUARTERS, WHEREVER LOCATED AND HOWEVER
OBTAINED, AND FOR ALL NON-GOVERNMENT *** QUARTERS."
PARAGRAPH V(A) OF THE INSTRUCTION REPEATS THE PROHIBITION CONTAINED
IN 10 U.S.C. SEC. 2387 (1976), EXEMPTING ONLY INCUMBENTS OF CERTAIN
SPECIAL COMMAND POSITIONS, NOT RELEVANT HERE. IN ADDITION, FURNISHINGS
ALLOWED UNDER THE INSTRUCTION, AS DEFINED IN AN APPENDIX THEREOF,
SPECIFICALLY EXCLUDES "*** HOUSEHOLD GOODS, SUCH AS LINENS, CUTLERY,
SILVERWARE, DISHES AND KITCHEN UTENSILS ***."
IT MAY BE ARGUED THAT THE STATUTE AND THE INSTRUCTION APPEAR TO APPLY
ONLY TO THE INCLUSION OF KITCHEN UTENSILS IN THE FURNISHINGS OF THE
QUARTERS, AND NOT TO THE LOAN OF SUCH ITEMS TO PERSONNEL AS IS THE
METHOD CONTEMPLATED BY NLSO FOR DISTRIBUTING THE KITS. HOWEVER, WE
BELIEVE THAT THE INSTRUCTION WAS INTENDED TO PROHIBIT THIS PROCEDURE AS
WELL. IN ADDITION TO LISTING MAXIMUM ALLOWANCES OF FURNISHINGS TO BE
PROVIDED FOR VARIOUS QUARTERS, THE INSTRUCTION ALSO EXPRESSLY PROVIDES
FOR THE LOAN OF FURNISHINGS DIRECTLY TO PERSONNEL. PARAGRAPH IV(C)
PROVIDES THAT: "*** FURNISHINGS MAY ALSO BE PROVIDED ON A TEMPORARY
LOAN BASIS (OUTSIDE THE CONTINENTAL UNITED STATES) PENDING RECEIPT OF IN
TRANSIT PERSONALLY OWNED FURNIGHINGS WHEN DETERMINED ADVANTAGEOUS TO THE
GOVERNMENT ***." THIS IS ESSENTIALLY THE ARRANGEMENT PROPOSED BY NLSO
FOR DISTRIBUTING THE KITS ON LOAN. THIS PROVISION DOES NOT PROVIDE
AUTHORITY FOR DOING SO BECAUSE, AS NOTED ABOVE, FURNISHINGS IS DEFINED
TO EXCLUDE THE ITEMS CONTAINED IN THE KIT.
ACCORDINGLY, THE VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT AND THE
COPY OF IT WILL BE RETAINED HERE.
B-193828, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE AGENCY'S ACCEPTANCE VARIES FROM EXPRESS TERMS OF BIDDER'S
OFFER, NO VALID CONTRACT IS CONSUMMATED FOR SALE ITEM.
2. AGENCY MAY NOT REJECT HIGH AND REASONABLY PRICED BID FOR SALE
ITEM IN ABSENCE OF SOME DEFECT OR IMPROPRIETY IN COMPETITIVE BIDDING
PROCESS OR OTHER JUSTIFIABLE CAUSE.
3. AGENCY MAY NOT RELY ON UNAUTHORIZED AWARD FOR SALE ITEM AS BASIS
FOR OBTAINING MONEY FROM BIDDER IN EXCESS OF AMOUNT TO WHICH AGENCY
WOULD HAVE BEEN ENTITLED HAD PROPER AWARD BEEN MADE.
CLIMAX MOLYBDENUM COMPANY:
CLIMAX MOLYBDENUM COMPANY (CMC) REQUESTS MODIFICATION OF ITS CONTRACT
AWARDED UNDER INVITATION FOR BIDS (IFB) NO. ORES-255, ISSUED BY THE
GENERAL SERVICES ADMINISTRATION (GSA) FOR THE SALE OF VARIOUS LOTS OF
TUNGSTEN ORES AND CONCENTRATES FROM THE NATIONAL STOCKPILE.
THE SOLICITATION, AMONG OTHER THINGS, REQUIRED BIDDERS TO SPECIFY THE
ITEMS DESIRED, INCLUDING ANY ALTERNATES, BY ITEM NUMBER AND LOT NUMBER,
AND TO SPECIFY THE QUANTITY AND PRICE BID PER UNIT. TWO BIDS WERE
RECEIVED AND OPENED ON NOVEMBER 28, 1978. CMC'S BID, AS AMENDED, PER
SHORT TON UNIT (STU) OF TUNGSTEN TRIOXIDE (WO3), WAS, IN PERTINENT PART,
AS FOLLOWS:
UNIT OF
MEASURE PRICE BID
ITEM NO. LOT NO. (STU-W03) PER UNIT
GROUP I 989 12 3985.300 $126.11
GROUP II 992 15 3910.492 126.36
GROUP III 987 8 3918.750 127.11
GROUP IV 988 9 3914.350 128.36
GROUP V 993 16 3902.370 129.61
IN DESCENDING ORDER OF PREFERENCE, BIDDER IS WILLING TO PURCHASE UP
TO A TOTAL OF 4,000 STU'S FROM THE ABOVE GROUPS.
THE OTHER BIDDER, LI TUNGSTEN, OFFERED A UNIT PRICE OF $125.47 PER
STU.
IN ACCORDANCE WITH ITS USUAL PRACTICE, GSA COMPARED THE BIDS RECEIVED
WITH THE PRICES PUBLISHED IN BOTH THE LONDON METAL BULLETIN (LMB) AND
METALS WEEK (MW). THE FORMER PUBLISHES CURRENT MARKET PRICES FOR
TUNGSTEN TWICE A WEEK; THE LATTER DOES SO ON A WEEKLY BASIS. BECAUSE
LMB PRICES ARE CONSIDERED BY GSA TO REFLECT MORE FAIRLY THE CURRENT
WORLD MARKET PRICE OF TUNGSTEN, GREATER WEIGHT IS ATTACHED TO THE LMB
PRICES. FURTHER, SINCE MW IS ISSUED ON A WEEKLY BASIS, ITS PRICES ARE
NOT CONSIDERED AS TIMELY.
LMB QUOTED A PRICE RANGE OF $126.10 TO $134.26 PER STU OF WO3 ON
NOVEMBER 27, 1978, THE DAY BEFORE BID OPENING. MW'S PUBLISHED DOMESTIC
SPOT PRICES RANGED FROM $125.00 TO $132.00 FOR THE WEEK ENDING NOVEMBER
27, 1978. IN VIEW OF THE CURRENT LMB MARKET PRICES, GSA REJECTED LI
TUNGSTEN'S BID ON THE GROUND THAT ITS OFFERED PRICE OF $125.47 WAS
UNREASONABLY LOW.
CMC'S PRINCIPAL BID ON ITEM NO. 989 AND ITS ALTERNATE BIDS, IN
DESCENDING ORDER OF PREFERENCE, ON ITEM NOS. 992, 987, 988 AND 993 WERE
THE ONLY BIDS RECEIVED FOR THOSE ITEMS. FURTHER, CMC'S BIDS WERE ALL
WITHIN THE RANGE OF THE CURRENT LMB MARKET PRICES AND WERE CONSIDERED
REASONABLE BY GSA. HOWEVER, NOTWITHSTANDING CMC'S BID FOR THE ITEMS IN
DESCENDING ORDER OF PREFERENCE, GSA ESTABLISHED A MINIMUM ACCEPTABLE
PRICE ("CUT-OFF PRICE") OF $129.61 FOR THE TUNGSTEN AND MADE AWARD ON
DECEMBER 8, 1978 TO CMC AT THE HIGHEST ALTERNATE PRICE OF ITS LAST
PREFERENCE, I.E., ITEM NO. 993 AT $129.61.
ON DECEMBER 12, 1978, CMC REPRESENTATIVES ATTENDED A MEETING WITH GSA
OFFICIALS TO DISPUTE THE AWARD MADE FOR THAT ITEM AT THAT PRICE.
SUBSEQUENTLY, ON DECEMBER 15, 1978, GSA ISSUED A SHIPMENT ORDER FOR THE
TUNGSTEN, WHICH WAS "OUTLOADED" BY CMC ON DECEMBER 19, IN "MITIGATION OF
ITS DAMAGES." CMC WAS BILLED BY INVOICE DATED JANUARY 19, 1979, FOR THE
TOTAL BALANCE OF ITS HIGH BID PRICE ON ITEM NO. 993.
THE BASIS OF CMC'S PROTEST IS THAT GSA MADE AN UNAUTHORIZED AND
IMPROPER AWARD AT ITS HIGHEST ALTERNATE BID PRICE IN CONTRAVENTION OF
THE EXPRESS TERMS OF ITS BID, WHICH SPECIFIED THAT THE ITEMS WERE BID IN
DESCENDING ORDER OF PREFERENCE. FOR THE REASONS STATED BELOW, WE AGREE
WITH THE PROTESTER.
THE SOLICITATION'S GENERAL TERMS AND CONDITIONS PROVIDE:
"UNLESS OTHERWISE SPECIFIED *** BY THE BIDDER, (THE GOVERNMENT
RESERVES THE RIGHT) TO ACCEPT ANY ONE ITEM OR GROUP OF ITEMS IN THE BID,
AS MAY BE IN THE BEST INTEREST OF THE GOVERNMENT."
CMC, BY THE CLEAR TERMS OF ITS BID, EXPRESSLY LIMITED THE
GOVERNMENT'S POWER OF ACCEPTANCE OF THE BID ITEMS IN DESCENDING ORDER OF
PREFERENCE. THEREFORE GSA COULD NOT AWARD ITEM NO. 993 TO CMC UNLESS IT
AWARDED THE PRECEDING FOUR ITEMS TO ANOTHER BIDDER OR REASONABLY
DETERMINED THAT IT COULD NOT ACCEPT CMC'S BIDS ON THESE ITEMS BECAUSE
THEY WERE UNREASONABLY LOW. HOWEVER, CMC'S OFFER ON ITS PRINCIPAL BID
ITEM, NO. 989, WAS THE ONLY BID RECEIVED ON THAT ITEM AND, WE UNDERSTAND
FROM GSA, WAS VIEWED AS REASONABLY PRICED. ALTHOUGH WE ARE NOT AWARE OF
ANY REGULATIONS GOVERNING THIS ISSUE IN SALES, WE DO NOT BELIEVE THAT
GSA COULD REJECT SUCH A BID WITHOUT JUSTIFIABLE CAUSE SUCH AS SOME
DEFECT IN THE BID, SOLICITATION OR COMPETITIVE BIDDING PROCESS. SEE
GENERALLY FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-2.404-2 (1964 ED.
AMEND. 121). IT IS APPARENT, THEREFORE, THAT GSA'S ACCEPTANCE OF CMC'S
HIGHEST ALTERNATE PRICE VARIED FROM THE TERMS OF THE BIDDER'S EXPRESS
OFFER AND THUS DID NOT OPERATE AS A VALID ACCEPTANCE. CONSEQUENTLY, NO
CONTRACT CAME INTO EXISTENCE.
UNDER THE COMMON LAW, AN ACCEPTANCE VARYING FROM AN OFFER OPERATES AS
A REJECTION AND COUNTER-OFFER. RESTATEMENT OF CONTRACTS, SECS. 38 AND
60 (1932). HOWEVER, GOVERNMENT SALES INVITATIONS DO NOT CONTEMPLATE THE
REJECTION OF A REASONABLY PRICED HIGH OFFER OR THE MAKING OF A
COUNTER-OFFER BY THE SELLING AGENCY. FURTHER, EVEN IF WE WERE TO
CONSIDER GSA'S ACCEPTANCE AS A VALID COUNTER-OFFER, IT IS WELL
ESTABLISHED THAT THE ACCEPTANCE OF AN OFFER MUST BE CLEAR AND
UNEQUIVOCAL. LAURENCE HALL D/B/A HALCYON DAYS, B-189697, FEBRUARY 1,
1978, 78-1 CPD 91. CMC, IN FACT, DISPUTED THE AWARD AT THAT PRICE AND,
IN EFFECT, TOOK DELIVERY OF THE TUNGSTEN "UNDER PROTEST" AND IN
"MITIGATION OF ITS DAMAGES." AS A RESULT, IT CANNOT BE SAID THAT CMC, BY
ITS CONDUCT, ACCEPTED GSA'S COUNTER-OFFER BY TAKING POSSESSION OF THE
TUNGSTEN UNDER GSA'S SHIPMENT ORDER.
SINCE DELIVERY OF THE TUNGSTEN HAS BEEN COMPLETED, RESCISSION IS NO
LONGER FEASIBLE. IN SIMILAR CIRCUMSTANCES, WHERE NO VALID CONTRACT IS
CONSUMMATED, OUR OFFICE HAS RECOGNIZED THAT PAYMENT MAY BE MADE FOR
GOODS FURNISHED TO THE GOVERNMENT ON A QUANTUM VALEBANT BASIS (THE
REASONABLE VALUE OF GOODS SOLD AND DELIVERED). INTERNATIONAL HARVESTER
COMPANY, B-183424, APRIL 30, 1975, 75-1 CPD 272. HOWEVER, WE ARE NOT
AIDED IN THIS INSTANCE BY THE APPLICATION OF THE DOCTRINE OF QUANTUM
VALEBANT SINCE THE ENTIRE RANGE OF BIDS SUBMITTED BY CMC WAS REASONABLE
AND THEREFORE THE QUESTION OF WHAT PRICE CMC SHOULD PAY FOR THE TUNGSTEN
WOULD STILL REMAIN UNRESOLVED.
GSA'S ONLY CLAIM TO THE MONEY IN EXCESS OF CMC'S PRINCIPAL HIGH BID
ITEM IS ITS PURPORTED ACCEPTANCE OF THE HIGHEST ALTERNATE BID OF THE
LAST PREFERENCE ITEM, AN ACTION WHICH WE HAVE FOUND TO BE UNAUTHORIZED
AND IMPROPER. FURTHER, GSA WAS REQUIRED TO MAKE AWARD ON THE HIGHEST
BID WHICH IT WAS LEGALLY ENTITLED TO ACCEPT. WE DO NOT BELIEVE THAT GSA
SHOULD BE ALLOWED TO RELY ON AN IMPROPER AND UNAUTHORIZED ACT AS THE
BASIS FOR OBTAINING MONEY FROM A BIDDER IN EXCESS OF THE AMOUNT TO WHICH
IT WOULD HAVE BEEN LEGALLY ENTITLED HAD A PROPER AWARD BEEN MADE.
WE THEREFORE CONCLUDE THAT THIS CONTRACT SHOULD BE MODIFIED TO
REFLECT A CONTRACT PRICE OF $126.11 PER STU, CMC'S BID ON ITEM NO. 989,
WHICH SHOULD HAVE BEEN ACCEPTED BY GSA.
B-194011, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. DECISION AS TO WHETHER PROCUREMENT SHOULD BE SET ASIDE FOR SMALL
BUSINESS IS WITHIN PROVINCE OF CONTRACTING AGENCY.
2. PROTESTER'S CONTENTION THAT SOLICITATION REQUIREMENT THAT BIDDERS
QUOTE PRICES FOR ITEMS ON F.O.B. DESTINATION BASIS IS UNFAIR TO SMALL
BUSINESSES IS WITHOUT MERIT. SINCE SOLICITATION PROVIDES FOR MULTIPLE
AWARDS, GAO FINDS NOTHING IN SOLICITATION THAT WOULD PREVENT ANY
BUSINESS FIRM, LARGE OR SMALL, FROM QUOTING ON ASSUMPTION THAT IT WOULD
RECEIVE AWARDS ON ALL ITEMS TO BE SHIPPED TO SAME DESTINATION POINT.
3. CONTRACT USING AGENCY IS NOT REQUIRED TO EQUALIZE COMPETITION ON
A PARTICULAR PROCUREMENT BY CONSIDERING COMPETITIVE ADVANTAGE ACCRUING
TO FIRMS BECAUSE OF THEIR OWN PARTICULAR CIRCUMSTANCES.
PATRICIAN:
PATRICIAN (PATRICIAN) PROTESTS AWARD UNDER SOLICITATION NO.
FEFP-S1-0097-A ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES
ADMINISTRATION (GSA). THE SOLICITATION ANTICIPATES MULTIPLE AWARDS OF
INDEFINITE QUANTITY CONTRACTS FOR ITEMS OF OFFICE FURNITURE TO THE
EXECUTIVE BRANCH OF THE GOVERNMENT.
PATRICIAN STATES THAT CERTAIN ITEMS OF OFFICE FURNITURE WERE SET
ASIDE FOR SMALL BUSINESS COMPETITION ON THE PRECEDING PROCUREMENT. IN
THE INSTANT SOLICITATION, HOWEVER, SUCH SET ASIDE WAS DELETED.
PATRICIAN CHALLENGES THIS DELETION WHICH IT BELIEVES WAS THE RESULT OF A
FINDING BY GSA THAT THE SMALL BUSINESSES HAD QUOTED HIGHER PRICES ON
THESE ITEMS THAN THE PRICES OFFERED BY LARGE BUSINESS CONCERNS.
PATRICIAN ARGUES THAT THE PRICES IT HAS QUOTED IN THE PAST SHOULD BE
MORE THOROUGHLY ANALYZED. PATRICIAN, IN SUPPORT OF THIS ARGUMENT,
REFERS TO A TABULATION IT HAS MADE OF ITS PRICES ON THE PARTICULAR ITEMS
OVER THE LAST 4 YEARS AND THE APPLICABLE CONSUMER PRICE AND WHOLESALE
PRICE INDICES FOR THE ITEMS OVER THE SAME PERIOD. PATRICIAN CONTENDS
THAT THE TABULATION REVEALS THAT WHILE COSTS WERE RISING ALMOST 35
PERCENT, ITS PRICES HAVE ACTUALLY DECLINED ON ALMOST ALL OF THESE ITEMS
OF FURNITURE.
IN GENERAL, PATRICIAN BELIEVES THAT GSA HAS NOT BEEN AS VIGOROUS AS
IT OUGHT TO BE IN TRYING TO FIND SITUATIONS OR ITEMS OF FURNITURE WHERE
SMALL BUSINESS SET ASIDES WOULD BE APPROPRIATE. ACCORDING TO PATRICIAN,
MORE THAN 95 PERCENT OF THE FURNITURE MANUFACTURERS IN THE UNITED STATES
ARE SMALL BUSINESSES; YET, IN THE INSTANT PROCUREMENT GSA COULD NOT
FIND A SINGLE "SEATING" ITEM WHICH COULD BE SET ASIDE.
PATRICIAN ALSO CONTENDS THAT THE METHOD FOR QUOTING PRICES UNDER THE
SOLICITATION IS UNFAIR TO SMALL BUSINESSES. IN SUPPORT OF THIS
CONTENTION, PATRICIAN ALLEGES THAT, IN EFFECT, THE SOLICITATION REQUIRES
SMALL BUSINESSES TO QUOTE DELIVERED PRICES WHICH INCLUDE FREIGHT COSTS
WHILE, IN EFFECT, PERMITTING LARGE BUSINESSES TO CALCULATE THEIR FREIGHT
COSTS AND THEIR BID ON CARLOAD LOTS SINCE LARGE BUSINESSES ALONE CAN
"GANG ORDERS" TO ACHIEVE FREIGHT ECONOMICS. AS A SOLUTION TO THIS
ALLEGED INEQUALITY, PATRICIAN URGES THAT THE GOVERNMENT EITHER ORDER THE
ITEMS OF FURNITURE IT NEEDS IN CARLOAD LOTS OR, IF ORDERING LESS THAN A
CARLOAD, TO ORDER FREIGHT ON BOARD (F.O.B.) WITH FREIGHT COSTS BILLED AS
A SEPARATE ITEM.
THE DECISION WHETHER A PROCUREMENT SHOULD BE SET ASIDE IS WITHIN THE
AUTHORITY AND DISCRETION OF THE CONTRACTING AGENCY. PAR-METAL PRODUCTS,
INC., B-190016, SEPTEMBER 26, 1977, 77-2 CPD 227. MOREOVER, WHILE IT IS
THE POLICY OF THE GOVERNMENT TO AWARD A FAIR PROPORTION OF PURCHASES OF
SUPPLIES AND SERVICES TO SMALL BUSINESS, NEITHER THE PROVISIONS
CONTAINED IN THE FEDERAL PROCUREMENT REGULATION (FPR) NOR THE PROVISIONS
OF THE SMALL BUSINESS ACT (15 U.S.C. SEC. 631 ET SEQ.) MAKE IT MANDATORY
THAT THERE BE SET ASIDE FOR SMALL BUSINESS ANY PARTICULAR PROCUREMENT.
GROTON PIPING CORPORATION AND THAMES ELECTRIC COMPANY (JOINT VENTURE),
B-185755, APRIL 12, 1976, 76-1 CPD 247. CONSEQUENTLY, THIS OFFICE IS
GENERALLY RELUCTANT TO SECOND GUESS AN AGENCY'S DECISION NOT TO SET
ASIDE A PROCUREMENT AND HAS DECLINED TO CONSIDER PROTESTS AGAINST SUCH
DECISION. SEE FRANCIS AND JACKSON, ASSOCIATES, B-190023, JANUARY 31,
1978, 78-1 CPD 79, AND THE CASES CITED THEREIN. WE DO NOTE, HOWEVER,
THAT CERTAIN ITEMS UNDER THE SOLICITATION WERE SET ASIDE FOR SMALL
BUSINESSES. FURTHER, THREE TYPES OF CHAIRS WHICH PREVIOUSLY HAD BEEN
SET ASIDE WERE NOT BECAUSE THERE HAD BEEN ONLY ONE ELIGIBLE SMALL
BUSINESS BIDDER LAST YEAR.
WITH REGARD TO PATRICIAN'S CONTENTION OF UNFAIRNESS IN GSA'S METHOD
OF OBTAINING PRICE QUOTES FROM BIDDERS, THE SOLICITATION STATES THAT FOR
THE ITEMS COVERED BY PART I PRICES SHALL COVER DELIVERY TO GSA SUPPLY
DISTRIBUTION FACILITIES SPECIFIED IN THE ITEM LISTING PORTION. THE
SOLICITATION DOES PROVIDE SPACE IN BOTH THE PART I AND PART II SCHEDULES
FOR BIDDERS TO QUOTE THEIR F.O.B. ORIGIN PRICES FOR EACH ITEM OF
FURNITURE. HOWEVER, THE METHOD OF AWARD SECTIONS FOR BOTH PART I AND
PART II OF THE SOLICITATION STATE THAT F.O.B. ORIGIN WILL NOT BE
CONSIDERED IN THE EVALUATION OF OFFERS BUT THAT AWARDS ON AN F.O.B.
ORIGIN BASIS WILL BE MADE WHERE F.O.B. ORIGIN PRICES ARE REASONABLE.
THE F.O.B. ORIGIN PRICES GIVEN BY THE BIDDERS ARE FOR INFORMATIONAL
PURPOSES. THEY WILL BE USED BY GSA ONLY TO DETERMINE WHETHER TO AWARD
ON AN F.O.B. ORIGIN BASIS AS OPPOSED TO AN F.O.B. DESTINATION BASIS.
THE METHOD OF AWARD SECTIONS ALSO PROVIDE FOR MULTIPLE AWARDS. FOR
THE ITEMS COVERED BY THE PART I SCHEDULE, AWARD IS TO BE MADE
ITEM-BY-ITEM ON THE BASIS OF THE GOVERNMENT'S ESTIMATED PEAK MONTHLY
REQUIREMENTS TO THE LOW RESPONSIVE BIDDERS. FOR THE GROUPS OF ITEMS
LISTED IN THE PART II SCHEDULE, AWARD IS TO BE MADE IN THE AGGREGATE BY
GROUP FOR EACH OF THE THREE COMMERCIAL ZONES SPECIFIED BY THE
SOLICITATION. THE LOW AGGREGATE BIDDER IS DETERMINED BY MULTIPLYING THE
UNIT PRICE OFFERED ON EACH GROUP OF ITEMS BY THE ESTIMATED QUANTITY
NEEDED AND THEN ADDING "THE RESULTANT EXTENSIONS." AS TO THE INDIVIDUAL
ITEMS COVERED BY PART II, AWARD IS TO BE MADE ON AN ITEM-BY-ITEM BASIS
FOR EACH ZONE.
WE FAIL TO SEE FROM THE FOREGOING ANY UNFAIRNESS TO SMALL BUSINESSES.
BASICIALLY, THE DETERMINATION OF THE TERMS OF DELIVERY DEPENDS SOLELY
ON WHAT IS MOST ADVANTAGEOUS TO THE GOVERNMENT. FPR SEC. 1-19.202-7(A).
FURTHER, WE BELIEVE THAT ANY ADVANTAGE THAT A BIDDER MIGHT HAVE AS FAR
AS LOWER SHIPPING COSTS WOULD BE BECAUSE OF A FAVORABLE GEOGRAPHIC
LOCATION, SUCH AS BEING CLOSE TO SEVERAL GSA SUPPLY DISTRIBUTION
FACILITIES. ANY BIDDER'S FAVORABLE GEOGPAPHIC LOCATION WOULD, IN OUR
OPINION, BE COMPLETELY UNRELATED TO ITS STATUS AS EITHER A LARGE OR
SMALL BUSINESS.
FURTHERMORE, PATRICIAN HAS NOT EXPLAINED HOW LARGE BUSINESSES HAVE
THE ADVANTAGE OF BEING ABLE TO CALCULATE THEIR FREIGHT COSTS BASED ON
CARLOAD LOTS. WE RECOGNIZE THAT A BIDDER COULD LOWER ITS FREIGHT COSTS
FOR A PARTICULAR ITEM BY ASSUMING THAT IT WILL ALSO RECEIVE AWARDS FOR
THE OTHER ITEMS WHICH ARE TO BE SHIPPED TO THE SAME GSA SUPPLY
DISTRIBUTION POINT. FOR EXAMPLE, A BIDDER QUOTING ON AN ESTIMATED
QUANTITY OF STRAIGHT-LEG CHAIRS TO DENVER, COLORADO, COULD ASSUME THAT
IT WILL ALSO BE AWARDED CONTRACTS FOR ORDERS OF ROTARY CHAIRS, WITHOUT
ARMS AND ROTARY CHAIRS WITH ARMS TO DENVER, COLORADO, AND CALCULATE ITS
BID ACCORDINGLY. NEVERTHELESS, ALL BIDDERS, WHETHER LARGE OR SMALL, ARE
CAPABLE OF QUOTING PRICES ON THIS BASIS. WE FIND NOTHING IN THE
SOLICITATION THAT WOULD PREVENT A SMALL BUSINESS FROM QUOTING ON THE
ASSUMPTION IT WOULD RECEIVE AWARDS ON ALL THE ITEMS THAT ARE TO BE
SHIPPED TO THE SAME SUPPLY DISTRIBUTION POINT. OF COURSE, THERE IS NO
GUARANTEE TO ANY BIDDER, LARGE OR SMALL, THAT ORDERS WILL BE PLACED IN
CARLOAD LOTS. ORDERS ARE BASED ON DEMAND, WHICH MAY BE MORE OR LESS
THAN CARLOAD LOTS.
ALTHOUGH IT IS UNCLEAR, PATRICIAN ALSO APPEARS TO BE ARGUING THAT
LARGE BUSINESSES CAN COMBINE ITEMS OF GOVERNMENT-ORDERED FURNITURE WITH
THEIR COMMERCIAL FURNITURE ORDERS AND THUS HAVE FULL RAILROAD CAR LOTS.
WE BELIEVE THAT THIS COULD VERY WELL BE POSSIBLE FOR THE GSA SUPPLY
DISTRIBUTION POINTS THAT ARE MAJOR CITIES SUCH AS DENVER, COLORADO, OR
FORT WORTH, TEXAS. NEVERTHELESS, THE PURPOSE OF COMPETITIVE PROCUREMENT
IS NOT TO INSURE THAT ALL OFFERORS FACE THE SAME ODDS IN COMPETING FOR
GOVERNMENT CONTRACTS. IMBA, INCORPORATED, B-188364, B-187404, NOVEMBER
9, 1977, 77-2 CPD 356. WE HAVE CONSISTENTLY STATED THAT THE GOVERNMENT
IS NOT REQUIRED TO EQUALIZE COMPETITION ON A PARTICULAR PROCUREMENT BY
CONSIDERING THE COMPETITIVE ADVANTAGE ACCRUING TO FIRMS BECAUSE OF THEIR
OWN PARTICULAR CIRCUMSTANCES. SEE NATIONAL MOTORS CORPORATION; DIE
MESH CORPORATION; FUEL PROPULSION CORPORATION, B-189933, JUNE 7, 1978,
AND THE CASES CITED THEREIN.
THE TEST TO BE APPLIED IS WHETHER THE COMPETITIVE ADVANTAGE ENJOYED
BY A PARTICULAR OFFEROR IS THE RESULT OF A PREFERENCE OR UNFAIR ACTION
BY THE GOVERNMENT. SEE TELOS COMPUTING, INC., 57 COMP. GEN. 370 (1978),
78-1 CPD 235, AND THE CASES CITED THEREIN. THE RECORD HERE REVEALS NO
PREFERENCE OR UNFAIR ACTION ON THE PART OF GSA. THE FACT THAT A LARGE
BUSINESS MAY BE BETTER ABLE TO SHIP IN FULL RAILROAD CAR LOTS THAN A
SMALL BUSINESS IS SOLELY THE RESULT OF THAT BIDDER'S PARTICULAR BUSINESS
CIRCUMSTANCES.
THE PROTEST IS DENIED.
B-194202, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. ISSUES RAISED BY BIDDER'S PROTEST AFTER BID HAS EXPIRED WILL BE
DECIDED ON MERITS AS FILING OF PROTEST EVIDENCES INTENTION TO ACCEPT
AWARD IF PROTEST IS SUSTAINED.
2. WHERE BID INCLUDES CONDITION - 1-1/2-PERCENT SERVICE OR INTEREST
CHARGE FOR PAYMENTS MADE AFTER 30 DAYS - WHICH MATERIALLY AFFECTS PRICE,
BID MUST BE REJECTED AS NONRESPONSIVE.
3. POSSIBILITY THAT GOVERNMENT MIGHT REALIZE MONETARY SAVINGS IN
PARTICULAR PROCUREMENT IF MATERIAL BID DEFICIENCY IS WAIVED, IS
OUTWEIGHED BY IMPORTANCE OF MAINTAINING INTEGRITY OF COMPETITIVE BIDDING
SYSTEM.
KARI-VAC, INCORPORATED:
GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE (GSA), ISSUED
INVITATION FOR BIDS (IFB) NO. 9PN-155-78/LE WHICH SOLICITED FLOOR AND
CARPET SUPPLIES FOR A 1-YEAR PERIOD.
KARI-VAC, INCORPORATED'S (KARI-VAC), BID INCLUDED A 1-1/2-PERCENT
SERVICE OR INTEREST CHARGE (SERVICE CHARGE) FOR GOVERNMENT PAYMENTS MADE
AFTER 30 DAYS. KARI-VAC WAS ADVISED BY GSA THAT THE SERVICE CHARGE
COULD NOT BE ALLOWED, AND THE BID WAS REJECTED AS NONRESPONSIVE, EVEN
THOUGH KARI-VAC HAD REQUESTED THAT SUCH CHARGE BE DELETED FROM ITS BID.
THE INCLUSION OF A SERVICE CHARGE WOULD VIOLATE GSA'S PROCUREMENT POLICY
OR THAT SUCH INCLUSION WAS PROHIBITED AS A MATTER OF LAW. ALSO,
KARI-VAC ARGUES THAT IT WAS ADVISED BY THE CONTRACTING OFFICER TO
RESCIND THE SERVICE CHARGE. FINALLY, KARI-VAC STATES THAT OUR
ADJUDICATION OF THIS PROTEST SHOULD TAKE INTO CONSIDERATION THE AMOUNT
OF MONEY THAT KARI-VAC COULD SAVE THE GOVERNMENT.
GSA CONTENDS THAT THE ISSUES RAISED BY KARI-VAC'S PROTEST ARE MOOT
SINCE ALL BIDS EXPIRED PRIOR TO THE FILING OF THIS PROTEST. BECAUSE OF
THIS, CONTRACTING OFFICIALS INTEND TO READVERTISE THE REQUIREMENTS WHICH
ARE THE SUBJECT OF THE PROTEST. NEVERTHELESS, GSA CONTENDS THAT THE
INCLUSION OF A SERVICE CHARGE IN A BID RENDERS IT NONRESPONSIVE, CITING
50 COMP. GEN. 733 (1971). GSA ARGUES THAT THE BIDDER CANNOT DELETE THE
SERVICE CHARGE AFTER BID OPENING SINCE IT IS A MATERIAL CONDITION,
AFFECTING PRICE, AND TO ALLOW SUCH DELETION WOULD BE PREJUDICIAL TO THE
OTHER BIDDERS. GSA DOES NOT SPECIFICALLY RESPOND TO THE ALLEGATION THAT
KARI-VAC WAS ADVISED TO RESCIND THE SERVICE CHARGE. THE RECORD ONLY
PROVIDES A TELEPHONE MEMORANDUM THAT KARI-VAC WAS TOLD, AFTER BID
OPENING, THAT THE SERVICE CHARGE COULD NOT BE ALLOWED AND THAT KARI-VAC
WAS SENDING A LETTER DELETING SUCH CHARGE.
WITH RESPECT TO GSA'S CONTENTION THAT THE INSTANT PROTEST IS MOOT, WE
DISAGREE. GOVERNMENT CONTRACTORS, INC., B-193548, FEBRUARY 26, 1979,
79-1 CPD 133. CLEARLY, KARI-VAC'S PROTEST EVIDENCES AN INTENTION TO
ACCEPT THE AWARD IF THE PROTEST IS SUSTAINED; THEREFORE, WE WILL DECIDE
THE PROTEST ON THE MERITS.
UNDER FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-2.404-2(B) (1964
ED. AMEND. 121), A BID MUST BE REJECTED AS NONRESPONSIVE WHERE THE
BIDDER IMPOSES CONDITIONS WHICH MODIFY REQUIREMENTS OF THE IFB OR LIMIT
ITS LIABILITY TO OR LIMIT THE RIGHTS OF THE GOVERNMENT SO AS TO GIVE THE
BIDDER AN ADVANTAGE OVER OTHER BIDDERS. OBJECTIONABLE CONDITIONS MAY BE
DELETED UNDER THE REGULATION WHERE THEY DO NOT GO TO THE SUBSTANCE, AS
DISTINGUISHED FROM THE FORM, OF THE BID. A CONDITION GOES TO THE
SUBSTANCE OF THE BID WHEN IT AFFECTS PRICE, QUANTITY, QUALITY, OR
DELIVERY OF THE ITEMS OFFERED. FPR SEC. 1-2.405 (1964 ED. CIRC. 1)
PROVIDES THAT A BIDDER SHALL EITHER BE GIVEN AN OPPORTUNITY TO CURE ANY
DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY, OR THE
CONTRACTING OFFICER SHALL WAIVE SUCH DEFICIENCY. HOWEVER, THIS
PROVISION DEFINES A MINOR INFORMALITY OR IRREGULARITY AS AN IMMATERIAL
AND INCONSEQUENTIAL DEFECT WHEN ITS SIGNIFICANCE AS TO PRICE, QUANTITY,
QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE, THE CORRECTION OR WAIVER
OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. THE IFB IMPLEMENTED
THE ABOVE IN PARAGRAPH 10 OF STANDARD FORM 33-A. WHILE THE REGULATION
GIVES SOME EXAMPLES OF BID CONDITIONS JUSTIFYING REJECTIONS, CLEARLY,
THE EXAMPLES ARE NOT ALL INCLUSIVE AND SUCH MATTERS ARE CONSIDERED ON A
CASE-BY-CASE BASIS.
SINCE KARI-VAC'S BID INCLUDED A CONDITION MATERIALLY AFFECTING PRICE,
THE ABOVE PROHIBITS ITS DELETION OR WAIVER AND REQUIRES REJECTION OF THE
BID. OUR DECISION IN 50 COMP. GEN. 733, SUPRA, RELIED ON BY GSA,
INVOLVED AN ALMOST IDENTICAL BID CONDITION ("1-1/2 INTEREST PER MONTH ON
PAST DUE INVOICES") WHICH WE VIEWED AS JUSTIFYING REJECTING THE BID.
MOREOVER, EVEN THOUGH KARI-VAC ALLEGES THAT IT WAS ADVISED BY THE
CONTRACTING OFFICER THAT THE SERVICE CHARGE COULD BE DELETED (DENIED BY
THE AGENCY), A CONTRACTING OFFICER IS WITHOUT AUTHORITY TO MAKE A
NONRESPONSIVE BID RESPONSIVE BY WAIVING OR ALLOWING A BIDDER TO DELETE A
CONDITION AFFECTING PRICE. SEE JUANITA H. BURNS AND GEORGE M. SOBLEY (A
JOINT VENTURE), 55 COMP. GEN. 587 (1975), 75-2 CPD 400.
KARI-VAC HAS REQUESTED THAT OUR DECISION TAKE INTO ACCOUNT THE MONEY
THAT KARI-VAC COULD SAVE THE GOVERNMENT. HOWEVER, AS OUR DECISIONS
INDICATE, THE IMPORTANCE OF MAINTAINING THE INTEGRITY OF THE COMPETITIVE
BIDDING SYSTEM OUTWEIGHS THE POSSIBILITY THAT THE GOVERNMENT MIGHT
REALIZE A MONETARY SAVINGS IN A PARTICULAR PROCUREMENT IF A MATERIAL
DEFICIENCY IS WAIVED. A. D. ROE COMPANY, 54 COMP. GEN. 271 (1974), 74-2
CPD 194; CHEMICAL TECHNOLOGY, INC., B-192893, DECEMBER 27, 1978, 78-2
CPD 438.
ACCORDINGLY, KARI-VAC'S PROTEST IS DENIED.
B-194286.3, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
REQUEST THAT COMPETITOR BE EXCLUDED FROM COMPETITION BECAUSE
PROTESTER'S FORMER EMPLOYEES POSSESS TRADE SECRETS AND OTHER PRICING
INFORMATION RELATING TO THIS PROCUREMENT, IS ESSENTIALLY A DISPUTE
BETWEEN PRIVATE PARTIES AND IS NOT FOR CONSIDERATION UNDER GAO BID
PROTEST PROCEDURES.
COMPUTER SCIENCE CORPORATION:
COMPUTER SCIENCES CORPORATION, INFONET DIVISION (CSC), FILED A
PROTEST REQUESTING THAT ADP NETWORK SERVICES, INC. (ADP) BE EXCLUDED
FROM THE COMPETITION FOR REQUEST FOR PROPOSALS (RFP) N66032-78-R-0009,
ISSUED BY THE NAVY. CSC ALLEGES THAT ADP'S PARTICIPATION IN THIS
PROCUREMENT WILL IMPAIR THE INTEGRITY OF THE PROCUREMENT PROCESS BECAUSE
ADP INDUCED CSC OFFICIALS TO WORK FOR IT. THE PROTESTER ASSERTS THAT
THESE OFFICIALS POSSESS TRADE SECRETS AND OTHER "INFORMATION RELATING TO
CSC'S BIDDING STRATEGY AND TECHNICAL AND PRICE PROPOSALS (FOR THIS
PROCUREMENT.)" CSC HAS FILED A CIVIL ACTION IN THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, SEEKING, AMONG OTHER
THINGS, TO ENJOIN ADP AND THE DEFENDANT EMPLOYEES FROM USING THIS AND
OTHER INFORMATION ACQUIRED WHILE IN ITS EMPLOY.
IN AN ANALOGOUS SITUATION, A PROTESTER OBJECTED TO THE USE AND
DISCLOSURE OF THE PROTESTER'S COST AND PRICING INFORMATION BY ITS FORMER
EMPLOYEES WHO HAD FORMED A NEW CORPORATION. B. F. GOODRICH COMPANY,
B-192602, JANUARY 10, 1979, 79-1 CPD 11. WE CONCLUDED THAT THE CASE
INVOLVED A QUESTION OF ALLEGED IMPROPER BUSINESS PRACTICES RATHER THAN
ONE OF BIDDERS ATTEMPTING TO RESTRICT COMPETITION UNDER A GOVERNMENT
PROCUREMENT. AS SUCH, WE DECLINED TO CONSIDER THE MATTER.
THE SAME RATIONAL IS APPLICABLE HERE. WE BELIEVE THAT THIS CASE
INVOLVES A DISPUTE BETWEEN PRIVATE PARTIES CONCERNING ALLEGED UNFAIR
BUSINESS PRACTICES. THEREFORE, IT IS NOT FOR CONSIDERATION UNDER OUR
BID PROTEST PROCEDURES. CF. BINGHAM LTD., B-189306, OCTOBER 4, 1977,
77-2 CPD 263.
B-194492.2, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHEN FILED AFTER CLOSING DATE FOR RECEIPT OF PROPOSALS PROTEST
ALLEGING IMPROPRIETIES APPARENT ON FACE OF SOLICITATION IS UNTIMELY AND
NOT FOR CONSIDERATION ON THE MERITS.
2. REQUIREMENT IN DEFENSE ACQUISITION REGULATION (DAR) SEC.
3-508.2(B) THAT IDENTITY OF PROPOSED AWARDEE BE REVEALED PRIOR TO AWARD
TO PERMIT CHALLENGES TO ITS SMALL BUSINESS SIZE STATUS DOES NOT REQUIRE
PRE-AWARD ACCESS BY UNSUCCESSFUL OFFERORS TO PRICE PROPOSAL OF PROPOSED
AWARDEE.
3. GAO WILL NOT CONSIDER PROTEST QUESTIONING SMALL BUSINESS SIZE
STATUS OF LOW OFFEROR BECAUSE CONCLUSIVE AUTHORITY TO DETERMINE SIZE
STATUS OF BUSINESS CONCERNS LIES WITH SMALL BUSINESS ADMINISTRATION
(SBA).
RADIATION SYSTEMS, INC.:
RADIATION SYSTEMS, INC. (RADIATION) PROTESTS A CONTRACT AWARD TO DHV,
INC. BY MCCLELLAN AIR FORCE BASE, UNDER REQUESTS FOR PROPOSALS (RFP) NO.
F0460-79-R-0208, A TWO-STEP NEGOTIATED PROCUREMENT FOR ANTENNAS.
RADIATION STATES THAT IT IS THE LOW RESPONSIVE BIDDER IF PROPER
CONSIDERATION IS GIVEN TO ALL EVALUATION FACTORS SPECIFIED FOR THE
SECOND STEP OF THIS PROCUREMENT. HOWEVER, RADIATION HAS BEEN DENIED
ACCESS TO THE PROPOSAL SELECTED FOR AWARD AND IS NOT IN A POSITION TO
ARTICULATE SPECIFIC OBJECTIONS TO THE EVALUATION. IT FURTHER OBJECTS TO
THE AIR FORCE'S RELIANCE ON DEFENSE ACQUISITION REGULATION (DAR) SEC.
3-507.2(A) (1976 ED.) IN REFUSING RADIATION ACCESS BEFORE AWARD TO DHV'S
SECOND STEP PRICE PROPOSAL. MOREOVER, RADIATION BELIEVES THAT DAR SEC.
3-508.2(B) ENVISIONS "BONA FIDE NEGOTIATIONS" AND APPLIES ONLY TO
"CONVENTIONAL NEGOTIATED PROCUREMENTS." IT ARGUES THAT THIS NEGOTIATED
PROCUREMENT, WHICH LIMITS THE SECOND STEP COMPETITION TO PRICE ALONE,
CANNOT BE DESCRIBED AS "CONVENTIONAL." IT THEREFORE BELIEVES THAT PUBLIC
OPENING OF STEP-TWO PROPOSALS SHOULD HAVE OCCURRED AS REQUIRED IN
FORMALLY ADVERTISED PROCUREMENTS UNDER DAR 2-402.1. ALTHOUGH RADIATION
RECOGNIZES THAT THE TWO-STEP NEGOTIATED PROCEDURE IS AUTHORIZED BY AN
AIR FORCE SUPPLEMENT TO DAR (AFLC DAR SUP SEC. 3-805.2(B) (1975 ED.)),
IT ASSERTS THIS AUTHORIZATION DOES NOT CONVERT THE PROCUREMENT INTO A
"CONVENTIONAL" NEGOTIATED PROCUREMENT.
WHILE THE AIR FORCE AGREES THAT RADIATION'S PROPOSAL WAS RESPONSIVE,
IT DENIES THAT RADIATION'S PROPOSED PRICE WAS LOW WHEN EVALUATED IN
ACCORDANCE WITH ALL EVALUATION FACTORS. IT STATES THAT AFLC DAR
SUPPLEMENT SEC. 3-805.2(B) MERELY ASSIGNS THE NAME "TWO-STEP
NEGOTIATIONS" TO THE NEGOTIATION PROCEDURE DESCRIBED IN DAR SEC.
3-805.2(B), WHICH PERMITS PRICES TO BE SOLICITED ONLY FROM THOSE WHOSE
TECHNICAL PROPOSALS HAVE BEEN FOUND ACCEPTABLE AFTER DISCUSSIONS.
THE AIR FORCE HAS DENIED A REQUEST BY RADIATION UNDER THE FREEDOM OF
INFORMATION ACT (FOIA), 5 U.S.C. SEC. 552 ET SEQ. (1976), FOR ACCESS TO
THE STEP-ONE AND STEP-TWO PROPOSALS OF DHV. THIS OFFICE IS WITHOUT
AUTHORITY UNDER FOIA TO DIRECT, AS RADIATION REQUESTS, THE AIR FORCE TO
RELEASE THIS INFORMATION AND, IN VIEW OF THE AIR FORCE'S DENIAL,
RADIATION'S SOLE REMEDY IS BY SUIT IN THE UNITED STATES DISTRICT COURT.
DEWITT TRANSFER AND STORAGE COMPANY, 53 COMP. GEN. 533 (1974), 74-1 CPD
47.
RADIATION INSISTS SUCH INFORMATION IS NEEDED FOR ASSURANCE THAT THE
PROPOSALS WERE EVALUATED FAIRLY AND IN CONFORMANCE TO THE SOLICITATION.
GENERALLY, WHERE AN AGENCY HAS DENIED RELEVANT DOCUMENTS TO A PROTESTER,
WE WILL REVIEW SUCH DOCUMENTS IN OUR CONSIDERATION OF THE PROTEST.
E-SYSTEMS, INC., B-191346, MARCH 20, 1979, 79-1 CPD 192. AN IN CAMERA
REVIEW BY THIS OFFICE IS UNACCEPTABLE TO RADIATION.
TO THE EXTENT THAT RADIATION IS CONTENDING THIS TWO-STEP PROCUREMENT
SHOULD HAVE BEEN IMPLEMENTED UNDER PROCEDURES APPLICABLE TO FORMAL
ADVERTISING (DAR, SECTION II) RATHER THAN NEGOTIATIONS (SECTION III),
ITS PROTEST IS UNTIMELY UNDER SECTION 20.2 OF OUR BID PROTEST
PROCEDURES, 4 C.F.R. PART 20 (1979), WHICH REQUIRES THAT PROTESTS BASED
UPON ALLEGED IMPROPRIETIES APPARENT ON THE FACE OF THE SOLICITATION BE
FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS.
ON THE BASIS OF THE ORIGINAL REQUEST FOR TECHNICAL PROPOSALS,
RADIATION HAD NO REASONABLE GROUNDS TO BELIEVE THAT IT WOULD HAVE ACCESS
BEFORE AWARD TO THE TECHNICAL AND PRICE PROPOSALS OF ITS COMPETITORS.
IT WAS CLEAR ON THE FACE OF THE SOLICITATION THAT THE PROCUREMENT WAS A
NEGOTIATED ONE GOVERNED BY DAR, SECTION III WHICH DOES NOT PERMIT PUBLIC
OPENING OF TECHNICAL PROPOSALS OR THE DISCLOSURE OF PRICES BEFORE AWARD
"EXCEPT IN ACCORDANCE WITH 3-508." SEE DAR SEC. 3-507.2(A). TO PERMIT
CHALLENGE TO THE SMALL BUSINESS SIZE STATUS OF THE APPARENTLY SUCCESSFUL
OFFEROR, DAR SEC. 3-508.2(B) REQUIRES, AS A LIMITED EXCEPTION TO THE
NONDISCLOSURE RULE, THAT ONLY THE IDENTITY OF THE PROPOSED AWARDEE BE
REVEALED TO UNSUCCESSFUL OFFERORS "IN ANY PROCUREMENT INVOLVING A SMALL
BUSINESS SET-ASIDE TO BE PLACED THROUGH CONVENTIONAL NEGOTIATION."
RADIATION'S CONTENTION THAT A TWO-STEP NEGOTIATED PROCUREMENT IS NOT
A "CONVENTIONAL" PROCUREMENT WITHIN THE MEANING OF DAR SEC. 3-508.2(B)
IS NOT WELL FOUNDED. DAR SEC. 3-805.2(B) SPECIFICALLY RECOGNIZES THAT
UNPRICED TECHNICAL PROPOSALS MAY BE REQUIRED FIRST AND PRICE PROPOSALS
LATER SOLICITED ONLY FROM THOSE WHOSE TECHNICAL PROPOSALS, AFTER
DISCUSSIONS, HAVE BEEN FOUND ACCEPTABLE. SUCH PROCUREMENTS ARE NOT
UNIQUE OR UNUSUAL. SEE CONSOLIDATED DIESEL ELECTRIC COMPANY, B-193308,
FEBRUARY 14, 1979, 79-1 CPD 106; ANALOG HYBRID SYSTEMS, ET AL.,
B-182547, DECEMBER 3, 1974, 74-2 CPD 306; TEKTRONIX, INC., 53 COMP.
GEN. 632 (1974), 74-1 CPD 107.
WE BELIEVE THAT THE WORD "CONVENTIONAL" IS USED IN DAR SEC.
3-508.2(B) IN THE SAME SENSE AS IN DAR SEC. 1-706.2, WHICH PROVIDES THAT
CONTRACTS SET ASIDE FOR SMALL BUSINESS ENTERED INTO EITHER BY
CONVENTIONAL NEGOTIATION OR BY "SMALL BUSINESS RESTRICTED ADVERTISING"
ARE NEGOTIATED PROCUREMENTS. CROWN LAUNDRY AND CLEANERS, 58 COMP. GEN.
103 (1978), 78-2 CPD 370. AS INDICATED IN THE LATTER REGULATION,
CONVENTIONAL NEGOTIATION IS DISTINGUISHED FROM A SET-ASIDE PROCUREMENT
CONDUCTED UNDER RESTRICTED FORMAL ADVERTISING PROCEDURES, BOTH OF WHICH
ARE NEGOTIATED PROCUREMENTS CONDUCTED PURSUANT TO NEGOTIATION AUTHORITY
CITED THEREIN. WASHINGTON PATROL SERVICE, INC., ET AL., B-188375,
SEPTEMBER 21, 1977, 77-2 CPD 209; IRA GELBER FOOD SERVICES, INC.; T&S
SERVICE ASSOCIATES, INC., 54 COMP. GEN. 809 (1975), 75-1 CPD 186.
MOREOVER, WHERE PRICE PROPOSALS ARE SOLICITED ONLY FROM OFFERORS
WHOSE STEP-ONE TECHNICAL PROPOSALS HAVE BEEN DETERMINED TO MEET THE
MINIMUM NEEDS OF THE AGENCY, WE FIND NO LEGAL BASIS TO OBJECT TO AWARD
BEING MADE TO THE RESPONSIVE, RESPONSIBLE OFFEROR SUBMITTING THE LOWEST
EVALUATED PRICE BASED ON FACTORS SPECIFIED IN THE SOLICITATION.
AS ADDITIONAL GROUNDS FOR ITS PROTEST, RADIATION CONTENDS DHV, INC.
IS NOT A SMALL BUSINESS CONCERN. THIS IS NOT A MATTER FOR CONSIDERATION
BY THIS OFFICE SINCE 15 U.S.C. SEC. 637(B)(6) (1976) GIVES THE SMALL
BUSINESS ADMINISTRATION CONCLUSIVE AUTHORITY TO DETERMINE THE SMALL
BUSINESS SIZE STATUS OF A BUSINESS CONCERN FOR FEDERAL PROCUREMENT
PURPOSES. MANN'S CONSTRUCTION CO., B-191462(2), MARCH 29, 1978, 78-1
CPD 245.
THE PROTEST IS DISMISSED IN PART AND DENIED IN PART.
B-194970, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. CONTRACTING ACTIVITY ISSUED SEVERAL PURCHASE ORDERS FOR TYPING
SERVICES IN INTERIM BETWEEN RESIGNATION OF SOLE TYPIST AND HIRING OF
REPLACEMENT. RELATIONSHIP CREATED WAS TANTAMOUNT TO THAT OF
EMPLOYER-EMPLOYEE AND AS SUCH VIOLATED GENERAL RULE THAT PERSONAL
SERVICES SHOULD NOT BE OBTAINED ON CONTRACTUAL BASIS. VOUCHERS FOR
SERVICES RECEIVED MAY BE PAID DUE TO EXTENUATING CIRCUMSTANCES IN THIS
CASE.
2. VOUCHERS MAY BE PAID ON BASIS OF FACSIMILE SIGNATURE IF USE WAS
AUTHORIZED BY PERSON WHOSE NAME WAS IMPRINTED ON VOUCHER AND AGENCY
PROCEDURES PERMIT USE OF FACSIMILE SIGNATURE.
MANPOWER TEMPORARY SERVICES - PURCHASE ORDERS FOR TYPING SERVICES:
THIS DECISION IS IN RESPONSE TO A REQUEST DATED MAY 22, 1978, FROM AN
AUTHORIZED CERTIFYING OFFICER OF THE FISH AND WILDLIFE SERVICE, UNITED
STATES DEPARTMENT OF THE INTERIOR, FOR AN ADVANCE DECISION AS TO THE
ALLOWABILITY OF PAYMENT ON CLAIMS MADE BY MANPOWER TEMPORARY SERVICES
(MANPOWER) TOTALLING $521.58 PURSUANT TO PURCHASE ORDERS/VOUCHERS NOS.
SFWA 396112, SFWA 396115, AND SFWA 422785. THE CLAIMS WERE FOR TYPING
SERVICES PROVIDED THE GAINESVILLE FIELD STATION OF THE FISH AND WILDLIFE
SERVICE DURING THE PERIOD FROM MARCH THROUGH JUNE 1978, IN CONNECTION
WITH A PROJECT ENTITLED, "AN ANNOTATED BIBLIOGRAPHY OF THE FISH AND
WILDLIFE RESOURCES OF GALVESTON BAY, TEXAS."
THE ACTING PROJECT LEADER REPORTS THAT THE PROJECT HAD A DEADLINE OF
JULY 10, 1978, FOR THE FIRST DRAFT AND AMOUNTED TO APPROXIMATELY 500
PAGES OF TYPING. THE LABORATORY WAS WITHOUT A TYPIST DURING THIS
CRITICAL PERIOD OF TIME BECAUSE THE LABORATORY'S SOLE TYPIST HAD
RESIGNED AND A REPLACEMENT WAS NOT SCHEDULED TO BEGIN EMPLOYMENT UNTIL
THE SECOND WEEK OF JUNE 1978. THE AMOUNT OF WORK PRODUCED BY
RESEARCHERS AND RELATED TYPING VARIED DEPENDING UPON THE DIFFICULTY
EXPERIENCED IN COLLECTING THE NECESSARY INFORMATION. WHEN A SUFFICIENT
AMOUNT OF TYPING WAS REQUIRED, THE ACTING PROJECT LEADER WOULD HIRE A
FULL-TIME TYPIST FOR SUCH PURPOSE FROM MANPOWER. ACCORDING TO THE
ACTING PROJECT LEADER, IT WAS IMPOSSIBLE TO ACCURATELY PREDICT WHEN THE
SERVICES OF A TYPIST WOULD BE REQUIRED AND, THEREFORE, EVEN AN
"EMERGENCY 30-DAY HIRE" COULD NOT BE APPOINTED, SINCE SUCH APPOINTMENTS
REQUIRE AT LEAST A 30-DAY LEAD TIME. IT WAS IMPERATIVE THAT ALL
MATERIAL BE TYPED AS SOON AS AVAILABLE SINCE RESEARCHERS WOULD STILL
HAVE TO PROOFREAD THE MATERIAL AND INACCURACIES WOULD HAVE TO BE
CORRECTED BEFORE THE JULY 10 DEADLINE.
THE AUTHORIZED CERTIFYING OFFICER QUESTIONS THE PROPRIETY OF THE
VOUCHERS SUBMITTED FOR PAYMENT SINCE THE CONTRACTS WERE FOR PERSONAL
SERVICES. THE AUTHORIZED CERTIFYING OFFICER ALSO QUESTIONS THE
PROPRIETY OF PAYMENT UNDER TWO OF THE VOUCHERS SINCE THE PURCHASE ORDERS
BEAR ONLY THE RUBBER-STAMPED SIGNATURE OF THE CHIEF, GAINESVILLE FIELD
STATION. THE AUTHORIZED CERTIFYING OFFICER QUESTIONS WHETHER VOUCHERS
NOT BEARING ORIGINAL, HAND-WRITTEN SIGNATURES MAY PROPERLY BE PAID.
THE GENERAL RULE ESTABLISHED BY DECISIONS OF THIS OFFICE AND THE
CIVIL SERVICE COMMISSION (NOW THE OFFICE OF PERSONNEL MANAGEMENT) IS
THAT PERSONAL SERVICES MAY NOT BE OBTAINED ON A CONTRACTUAL BASIS AND
MUST BE PERFORMED BY PERSONNEL EMPLOYED IN ACCORDANCE WITH THE CIVIL
SERVICE AND CLASSIFICATION LAWS. HOWEVER, IN PRIOR CASES WHERE IT WAS
ADMINISTRATIVELY DETERMINED BY THE GOVERNMENT AGENCY INVOLVED THAT IT
WOULD BE SUBSTANTIALLY MORE ECONOMICAL, FEASIBLE, OR NECESSARY BY REASON
OF UNUSUAL CIRCUMSTANCES TO HAVE THE WORK PERFORMED BY NON-GOVERNMENT
PARTIES, AND THAT WAS CLEARLY DEMONSTRABLE, WE HAVE NOT OBJECTED TO THE
PROCUREMENT OF SUCH WORK THROUGH PROPER CONTRACT ARRANGEMENT. A "PROPER
CONTRACT" FOR SERVICES UNDER SUCH LANGUAGE HAS BEEN RECOGNIZED TO BE ONE
IN WHICH THE RELATIONSHIP ESTABLISHED BETWEEN THE GOVERNMENT AND THE
CONTRACT PERSONNEL IS NOT THAT OF EMPLOYER AND EMPLOYEE. SEE 51 COMP.
GEN. 561 (1972).
THE BASIC ISSUE IS WHETHER A CONTRACT CREATES WHAT IS TANTAMOUNT TO
AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE GOVERNMENT AND THE
EMPLOYEE OF THE CONTRACTOR. THE CRITERIA BY WHICH THIS RELATIONSHIP IS
JUDGED ARE THOSE SET FORTH IN 5 U.S.C. SEC. 2105(A) (1976), NAMELY, AS
TO WHETHER AN INDIVIDUAL IS:
1. APPOINTED IN THE CIVIL SERVICE BY A FEDERAL OFFICER OR EMPLOYEE,
2. ENGAGED IN THE PERFORMANCE OF A FEDERAL FUNCTION UNDER AUTHORITY
OF LAW OR AN EXECUTIVE ACT; AND
3. SUBJECT TO THE SUPERVISION OF A FEDERAL OFFICER OR EMPLOYEE WHILE
ENGAGED IN THE PERFORMANCE OF THE DUTIES OF HIS POSITION.
IN ORDER TO ASSIST AGENCIES TO DETERMINE WHETHER A CONTRACT
ESTABLISHES AN EMPLOYER-EMPLOYEE RELATIONSHIP, THE CIVIL SERVICE
COMMISSION HAS LISTED SIX ELEMENTS. THOSE ELEMENTS, WHICH ARE SET FORTH
IN FEDERAL PERSONNEL MANUAL LETTERS 300-8, DATED DECEMBER 12, 1967, AND
300-12, DATED AUGUST 20, 1968, ARE:
1. PERFORMANCE ON SITE.
2. PRINCIPAL TOOLS AND EQUIPMENT FURNISHED BY THE GOVERNMENT.
3. SERVICES ARE APPLIED DIRECTLY TO INTEGRAL EFFORTS OF AGENCIES OR
AN ORGANIZATIONAL SUBPART IN FURTHERANCE OF ASSIGNED FUNCTION OR
MISSION.
4. COMPARABLE SERVICES, MEETING COMPARABLE NEEDS, ARE PERFORMED IN
THE SAME OR SIMILAR AGENCIES USING CIVIL SERVICE PERSONNEL.
5. THE NEED FOR THE TYPE OF SERVICE PROVIDED CAN REASONABLY BE
EXPECTED TO LAST BEYOND 1 YEAR.
6. THE INHERENT NATURE OF THE SERVICE, OR THE MANNER IN WHICH IT IS
PROVIDED, REQUIRES DIRECTLY OR INDIRECTLY GOVERNMENT DIRECTION OR
SUPERVISION OF CONTRACTOR EMPLOYEES IN ORDER:
A. TO ADEQUATELY PROTECT THE GOVERNMENT'S INTEREST, OR
B. TO RETAIN CONTROL OF THE FUNCTION INVOLVED, OR
C. TO RETAIN FULL PERSONAL RESPONSIBILITY FOR THE FUNCTION SUPPORTED
IN A DULY AUTHORIZED FEDERAL OFFICIAL OR EMPLOYEE.
THE SIX ELEMENTS RELATE PRINCIPALLY TO THE THIRD STATUTORY CRITERION
CONCERNING SUPERVISION OF THE CONTRACTOR'S EMPLOYEE BY A FEDERAL OFFICER
OR EMPLOYEE. THAT IS, THE PROSCRIBED SUPERVISION IS FREQUENTLY
EVIDENCED BY THESE ELEMENTS. THE ABSENCE OF ANY ONE OR A NUMBER OF
THEM, HOWEVER, WOULD NOT MEAN THAT SUPERVISION IS NOT PERMITTED BY THE
CONTRACT, OR PRESENT IN THE ACTUAL WORK PERFORMANCE, BUT ONLY THAT THERE
IS LESS LIKELIHOOD OF ITS EXISTENCE. SEE KELLY SERVICES, INC.,
B-186700, JANUARY 19, 1977, 77-1 CPD 356.
IN APPLYING THE ABOVE TESTS TO THIS CASE, WE FIND THAT MANY OF THE
ELEMENTS ARE PRESENT. WHILE WE RECOGNIZE THAT THERE WERE NO DIRECT
APPOINTMENTS BY A FEDERAL OFFICER OR EMPLOYEE, THE EXISTENCE OF A RIGHT
TO SUPERVISE OR ACTUAL SUPERVISION WOULD BE EVIDENCE THAT SUCH
APPOINTMENTS SHOULD HAVE OCCURRED. THERE IS VERY LITTLE EVIDENCE
REGARDING THE AMOUNT OF SUPERVISION THE TYPISTS WERE ACTUALLY GIVEN.
HOWEVER, THE RESEARCHERS DIRECTED THE TYPISTS REGARDING CORRECTIONS,
CONSULTED WITH TYPISTS WHEN NECESSARY, AND THERE IS NO EVIDENCE IN THE
RECORD SHOWING THAT THE TYPISTS WERE NOT GIVEN DIRECTIONS AND
SUPERVISION BY AGENCY PERSONNEL. FURTHER, THE SERVICES WERE SUCH AS
NORMALLY REQUIRE THE PROSCRIBED SUPERVISION, AND THE AGENCY COULD HAVE
ASKED FOR REPLACEMENTS IF ANY OF THE TYPISTS HAD BEEN DETERMINED TO BE
UNSATISFACTORY. ACCORDINGLY, OUR VIEW IS THAT THE RELATIONSHIPS CREATED
HERE WERE TANTAMOUNT TO THAT OF EMPLOYER-EMPLOYEE.
IN THE PRESENT CASE, THESE SPECIFIC VOUCHERS MAY BE CERTIFIED FOR
PAYMENT IN VIEW OF THE EXTENUATING CIRCUMSTANCES AND BECAUSE THE FISH
AND WILDLIFE SERVICE APPARENTLY BELIEVES THE PERFORMANCE OF THE TYPISTS
TO HAVE BEEN SATISFACTORY AND THE PRICE FOR SUCH SERVICES TO HAVE BEEN
REASONABLE. KELLY SERVICES, INC., SUPRA. THE QUESTION OF THE PROPRIETY
OF ACCEPTANCE BY THE CERTIFYING OFFICER OF TWO PURCHASE ORDERS/VOUCHERS
WHICH HAVE ONLY A FACSIMILE SIGNATURE OF THE OFFICER AUTHORIZED TO
PROCURE THE SERVICE IN QUESTION IS LESS CLEAR.
AS USUALLY DEFINED IN AGENCY DIRECTIVES, A FACSIMILE SIGNATURE IS AN
IMPRESSION OF A SIGNATURE MADE BY A RUBBER STAMP, METAL PLATE, OR OTHER
MECHANICAL CONTRIVANCE. 40 COMP. GEN. 5, 6 (1960).
THE USE OF A FACSIMILE DEVICE IS NOT PROHIBITED PER SE IN ANY
REGULATIONS, DIRECTIVES, OR DECISIONS OF THIS OFFICE. IN FACT, WE NOTED
IN 33 COMP. GEN. 297 (1954) THAT A NUMBER OF COURTS HAVE RECOGNIZED THE
VALIDITY OF SUCH SIGNATURES. SEE E.G., TABAS V. EMERGENCY FLEET
CORPORATION, 9 F. 2D 648 (1926) AND HILL V. UNITED STATES, 288 F. 192
(1923). HOWEVER, AS WE POINTED OUT IN 33 COMP. GEN. 297, SUPRA, IN EACH
INSTANCE, THE SIGNER OF THE INVOICE HAD ADOPTED AND EXPRESSLY AUTHORIZED
THE USE OF HIS SIGNATURE.
IN B-150395, DECEMBER 21, 1962, WE AUTHORIZED A NAVY AVIATION SUPPLY
OFFICE TO ADOPT AN AUTOMATED PURCHASE ORDER SYSTEM, INCLUDING USE OF A
FACSIMILE SIGNATURE PLATE. WE BASED OUR DECISION, HOWEVER, ON OUR
EXAMINATION OF A STATEMENT OF PROCEDURES TO BE FOLLOWED FOR THE USE AND
CONTROL OF THE SIGNATURE PLATE, WHICH WAS ENCLOSED WITH THE REQUEST FOR
OUR APPROVAL. WE CONCLUDED THAT THE PROPOSED PROCEDURES WOULD
ADEQUATELY INSURE THAT THE PLATE WOULD NOT BE USED IMPROPERLY.
IN THE INSTANT CASE, WE HAVE NO WAY OF KNOWING WHETHER THE CHIEF,
GAINESVILLE FIELD STATION AUTHORIZED THE USE BY THE ACTING PROJECT
LEADER OF A RUBBER STAMP IMPRINTING HIS SIGNATURE, OR, IF HE DID,
WHETHER THIS PRACTICE IS PERMITTED BY DEPARTMENT REGULATIONS. IF THE
CERTIFYING OFFICER OBTAINS EVIDENCE AND IS SATISFIED ON BOTH THESE
POINTS, WE WOULD NOT OBJECT TO PAYMENT OF THE VOUCHERS SOLELY BECAUSE OF
THE USE OF A FACSIMILE SIGNATURE.
B-195115, JUL 3, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. DETERMINATION TO TERMINATE CONTRACT FOR DEFAULT IS MATTER OF
CONTRACT ADMINISTRATION FOR CONSIDERATION UNDER DISPUTES CLAUSE OF
CONTRACT AND NOT FOR RESOLUTION BY GAO.
2. ALLEGATIONS OF CRIMINAL NATURE CONCERNING IMPROPER PRACTICES BY
CONTRACTING AGENCY ARE FOR REFERRAL BY CONTRACTOR TO DEPARTMENT OF
JUSTICE FOR APPROPRIATE ACTION.
QES/QUALITY ENVIRONMENT SYSTEMS, INC.:
QES/QUALITY ENVIRONMENT SYSTEMS, INC. (QES), PROTESTS THE TERMINATION
OF CONTRACT NO. DACA21-76-C-0087 FOR DEFAULT BY THE UNITED STATES ARMY
CORPS OF ENGINEERS (ARMY).
QES CONTENDS THAT THE ARMY DELIBERATELY SABOTAGED THE CONTRACT BY
INCOMPETENCE, FRAUD, AND CONSPIRACY AND ARGUES THAT THE ARMY IS NOT
CAPABLE OF TAKING THE NECESSARY CORRECTIVE ACTION.
THE QUESTION OF WHETHER A CONTRACT SHOULD BE TERMINATED FOR DEFAULT
IS A MATTER OF CONTRACT ADMINISTRATION FOR CONSIDERATION UNDER THE
PROCEDURES SET FORTH IN THE DISPUTES CLAUSE OF THE CONTRACT IN QUESTION
AND NOT FOR RESOLUTION UNDER OUR BID PROTEST PROCEDURES, WHICH ARE
RESERVED FOR CONSIDERING WHETHER AN AWARD, OR PROPOSED AWARD, OF A
CONTRACT COMPLIES WITH THE STATUTORY, REGULATORY AND OTHER LEGAL
REQUIREMENTS. FARWEST SPECIAL PRODUCTS, B-193309; NOVEMBER 13, 1978,
78-2 CPD 342.
WE HAVE BEEN INFORMED BY THE ARMY THAT QES FILED AN APPEAL WITH THE
ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA) AND A DECISION HAS BEEN
RENDERED SUSTAINING THE ARMY'S DETERMINATION. A REQUEST FOR
RECONSIDERATION IS PRESENTLY BEFORE THE ASBCA.
THE ALLEGATIONS MADE BY QES CONCERNING IMPROPER PRACTICES BY THE ARMY
ARE OF A CRIMINAL NATURE AND ARE PROPERLY FOR REFERRAL BY QES TO THE
DEPARTMENT OF JUSTICE FOR WHATEVER ACTION IT DEEMS APPROPRIATE. SIMCO
ELECTRONICS, B-187152, AUGUST 31, 1976, 76-2 CPD 209.
THEREFORE, THE PROTEST IS DISMISSED.
B-193644, JUL 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
USE OF APPROPRIATED FUNDS BY MINE SAFETY AND HEALTH ADMINISTRATION
(MSHA) TO PAY TRAVEL AND SUBSISTENCE EXPENSES OF MINERS AND MINE
OPERATORS ATTENDING SAFETY AND HEALTH TRAINING SEMINARS IS PROHIBITED BY
31 U.S.C. SEC. 551, IN THE ABSENCE OF SPECIFIC AUTHORITY. MSHA HAS NO
SUCH AUTHORITY EITHER IN ITS ORGANIC LEGISLATION OR IN ITS
APPROPRIATIONS LANGUAGE. ALSO, 5 U.S.C. SEC. 5703 DOES NOT PROVIDE THE
NECESSARY AUTHORITY SINCE IT AUTHORIZES PAYMENT OF TRAVEL EXPENSES OF
NON-GOVERNMENT EMPLOYEES ONLY WHERE THEY ARE PROVIDING A DIRECT SERVICE
TO THE GOVERNMENT.
MINE SAFETY AND HEALTH ADMINISTRATION - PAYMENT OF TRAVEL EXPENSES AT
SEMINARS:
THE ASSISTANT SECRETARY FOR MINE SAFETY AND HEALTH, DEPARTMENT OF
LABOR, REQUESTED A DECISION ON WHETHER THE MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA) HAS AUTHORITY TO EXPEND APPROPRIATED FUNDS TO PAY
THE TRAVEL AND SUBSISTENCE EXPENSES OF NON-GOVERNMENT EMPLOYEES TO
ATTEND MINE SAFETY AND HEALTH TRAINING SEMINARS CONDUCTED BY MSHA. FOR
THE REASONS THAT FOLLOW, WE CONCLUDE THAT THE EXPENDITURES ARE NOT
AUTHORIZED.
MSHA HOLDS ITS SAFETY AND HEALTH TRAINING SEMINARS PURSUANT TO
AUTHORITY CONTAINED IN SECTION 502 OF THE FEDERAL COAL MINE HEALTH AND
SAFETY ACT OF 1969 (COAL ACT), AS AMENDED BY THE FEDERAL MINE SAFETY AND
HEALTH AMENDMENTS ACT OF 1977, PUB. L. NO. 95-164, NOVEMBER 9, 1977.
SECTION 502 PROVIDES IN PART AS FOLLOWS:
"(A) THE SECRETARY SHALL EXPAND PROGRAMS FOR THE EDUCATION AND
TRAINING OF OPERATORS AND AGENTS THEREOF, AND MINERS IN -
"(1) THE RECOGNITION, AVOIDANCE, AND PREVENTION OF ACCIDENTS OR
UNSAFE OR UNHEALTHFUL WORKING CONDITIONS IN COAL OR OTHER MINES; AND
"(2) IN THE USE OF FLAME SAFETY LAMPS, PERMISSIBLE METHANE DETECTORS,
AND OTHER MEANS APPROVED BY THE SECRETARY FOR DETECTING METHANE AND
OTHER EXPLOSIVE GASES ACCURATELY.
"(B) THE SECRETARY SHALL, TO THE GREATEST EXTENT POSSIBLE, PROVIDE
TECHNICAL ASSISTANCE TO OPERATORS IN MEETING THE REQUIREMENTS OF THIS
ACT AND IN FURTHER IMPROVING THE HEALTH AND SAFETY CONDITIONS AND
PRACTICES IN COAL OR OTHER MINES. ***"
MSHA'S TRAINING SEMINARS ARE USUALLY HELD AT THE REQUEST OF EITHER
MINE OPERATORS OR LABOR ORGANIZATIONS, AND ENCOMPASS THE REQUIREMENTS OF
HEALTH AND SAFETY REGULATIONS AND TECHNICAL MATTERS RELATED TO MINE
SAFETY AND HEALTH. THE ASSISTANT SECRETARY STATES THAT THE SEMINARS ARE
CONDUCTED AT SITES AWAY FROM THE MINES TO INTRODUCE A HIGH LEVEL OF
EFFICIENCY IN THE TRAINING PROCESS AND PROVIDE AN ENVIRONMENT THAT IS
CONDUCIVE TO INSTRUCTION. BECAUSE SEMINARS ARE HELD AWAY FROM THE
MINES, MSHA HAS BEEN SUBSIDIZING THE TRAVEL AND SUBSISTENCE EXPENSES OF
SOME OF THE PARTICIPANTS.
MSHA'S CURRENT SEMINAR PROGRAM IS BASED UPON THE RESEARCH AND
EXPERIENCE OF ITS PREDECESSOR AGENCIES, THE BUREAU OF MINES AND THE
MINING ENFORCEMENT AND SAFETY ADMINISTRATION (MESA), BOTH OF WHICH WERE
ORGANIZATIONAL COMPONENTS OF THE DEPARTMENT OF THE INTERIOR. THESE
PREDECESSOR AGENCIES BEGAN THE PRACTICE OF SUBSIDIZING THE TRAVEL AND
SUBSISTENCE EXPENSES OF SOME OF THE PARTICIPANTS SEVERAL YEARS AGO. IN
JANUARY, 1975, THE SOLICITOR, DEPARTMENT OF THE INTERIOR, AT MESA'S
REQUEST, ISSUED AN ADVISORY OPINION UPHOLDING THE LEGALITY OF SUCH
PAYMENTS. THE SOLICITOR'S OPINION WAS BASED ON THE THEN-CURRENT VERSION
OF THE COAL ACT, A SIMILAR PROVISION IN SECTION 15 OF THE FEDERAL METAL
AND NONMETALIC MINE SAFETY ACT, 30 U.S.C. SEC. 734 (1976) (REPEALED BY
PUB. L. NO. 95-164), AND ON THE DEPARTMENT'S APPROPRIATIONS LANGUAGE.
THE SOLICITOR'S OPINION ALSO RELIED ON THE PROVISIONS OF 5 U.S.C. SEC.
5703(C) (NOW 5 U.S.C. SEC. 5703), WHICH AUTHORIZES PER DIEM ALLOWANCES
FOR "INDIVIDUALS SERVING WITHOUT PAY."
SUBSEQUENTLY, WE ISSUED TWO DECISIONS - B-166506, JULY 15, 1975, AND
55 COMP. GEN. 750 (1976) - CONCERNING THE ENVIRONMENTAL PROTECTION
AGENCY'S (EPA) PAYMENT OF TRAVEL AND SUBSISTENCE EXPENSES FOR STATE
OFFICIALS ATTENDING THE NATIONAL SOLID WASTE MANAGEMENT ASSOCIATION
CONVENTION IN 1974. THOSE DECISIONS CONCLUDED THAT SUCH PAYMENTS
VIOLATED 31 U.S.C. SEC. 551, WHICH PROHIBITS THE USE OF PUBLIC FUNDS
FOR EXPENSES OF CONVENTIONS OR OTHER ASSEMBLAGES WITHOUT SPECIFIC
AUTHORITY. SECTION 551 PROVIDES AS FOLLOWS:
"UNLESS SPECIFICALLY PROVIDED BY LAW, NO MONEYS FROM FUNDS
APPROPRIATED FOR ANY PURPOSE SHALL BE USED FOR THE PURPOSE OF LODGING,
FEEDING, CONVEYING, OR FURNISHING TRANSPORTATION TO, ANY CONVENTIONS OR
OTHER FORM OF ASSEMBLAGE OR GATHERING TO BE HELD IN THE DISTRICT OF
COLUMBIA OR ELSEWHERE. THIS SECTION SHALL NOT BE CONSTRUED TO PROHIBIT
THE PAYMENT OF EXPENSES OF ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT IN
THE DISCHARGE OF HIS OFFICIAL DUTIES."
THE APPARENT CONFLICT BETWEEN THESE DECISIONS AND MSHA'S EXISTING
PRACTICE PROMPTED THE PRESENT REQUEST.
IN OUR DECISION B-166506, SUPRA, WE NOTED THAT THE PROHIBITION OF
SECTION 551 APPLIES UNLESS PAYMENT IS SPECIFICALLY PROVIDED BY LAW. BY
USING THE WORD "SPECIFICALLY," CONGRESS INDICATED THAT AUTHORITY TO PAY
TRAVEL AND SUBSISTENCE EXPENSES OF NON-GOVERNMENT EMPLOYEES ATTENDING
CONVENTIONS OR OTHER ASSEMBLAGES SHOULD NOT BE INFERRED FROM OTHER LAWS
BUT RATHER THAT THERE SHOULD BE A DEFINITE INDICATION IN AN ENACTMENT
THAT THE PAYMENT OF SUCH EXPENSES WAS CONTEMPLATED, INTENDED AND
AUTHORIZED. IN OUR DECISION, WE STATED THAT THIS REQUIREMENT IS NOT
SATISFIED MERELY BY SHOWING THAT AN AGENCY HAS LEGISLATIVE AUTHORITY TO
HOLD CONVENTIONS OR OTHER ASSEMBLAGES. THE SAME REASONING IS EQUALLY
APPLICABLE TO AUTHORITY TO TRAIN PRIVATE INDIVIDUALS. (EPA HAS TRAINING
AUTHORITY SIMILAR TO MSHA'S.) WE CITED 31 U.S.C. SEC. 552 AS AN EXAMPLE
OF AUTHORITY SUFFICIENT TO SATISFY SECTION 551.
OUR REVIEW OF MSHA'S LEGISLATION AND LANGUAGE CONTAINED IN THE
DEPARTMENT OF LABOR APPROPRIATION ACT, 1979, PUB. L. NO. 95-480 (OCTOBER
18, 1978), TITLE I, 92 STAT. 1567, HAS NOT UNCOVERED ANY PROVISION
SPECIFICALLY INDICATING THAT MSHA HAS AUTHORITY TO PAY SUCH EXPENSES.
SIMILARLY, THE LEGISLATIVE HISTORY OF THESE ENACTMENTS CONTAINS NO
INDICATION THAT CONGRESS INTENDED THAT MSHA SHOULD SUBSIDIZE THE TRAVEL
EXPENSES OF MINERS OR MINE OPERATORS WHO ATTEND MSHA TRAINING SEMINARS.
AS PREVIOUSLY INDICATED, THE 1975 INTERIOR SOLICITOR'S ADVISORY
OPINION ALSO RELIED ON 5 U.S.C. SEC. 5703(C). THE PRESENT VERSION OF 5
U.S.C. SEC. 5703, SIMILAR IN SUBSTANCE TO THE VERSION IN EFFECT AT THE
TIME OF THE SOLICITOR'S OPINION, PROVIDES AS FOLLOWS:
"AN EMPLOYEE SERVING INTERMITTENTLY IN THE GOVERNMENT SERVICE AS AN
EXPERT OR CONSULTANT AND PAID ON A DAILY WHEN-ACTUALLY-EMPLOYED BASIS,
OR SERVING WITHOUT PAY OR AT $1 A YEAR, MAY BE ALLOWED TRAVEL OR
TRANSPORTATION EXPENSES, UNDER THIS SUBCHAPTER, WHILE AWAY FROM HIS HOME
OR REGULAR PLACE OF BUSINESS AND AT THE PLACE OF EMPLOYMENT OR SERVICE."
THE SOLICITOR'S OPINION CORRECTLY POINTED OUT THAT, UNDER THE
PROVISIONS OF SECTION 5703(C), WE HAVE AUTHORIZED THE PAYMENT OF TRAVEL
EXPENSES FOR PRIVATE INDIVIDUALS SERVING WITHOUT PAY IN ORDER THAT THEY
COULD VISIT THE STAFFS OF VARIOUS AGENCIES AND CONFER ON MATTERS OF
IMPORTANCE TO THE GOVERNMENT. E.G., 27 COMP. GEN. 183 (1947) AND 39 ID.
55 (1959).
IN 55 COMP. GEN. 750, SUPRA, WE DISCUSSED THE RELATIONSHIP BETWEEN 5
U.S.C. SEC. 5703(C) AND 31 U.S.C. SEC. 551. THERE WE STATED:
"CHAPTER 57 OF TITLE 5 OF THE UNITED STATES CODE IS CONCERNED
PRIMARILY WITH THE AUTHORIZATION OF TRAVEL AND TRANSPORTATION EXPENSES
FOR GOVERNMENT EMPLOYEES AND AS A GENERAL RULE, AN AGENCY'S
APPROPRIATION FOR TRAVEL EXPENSES WOULD NOT BE AVAILABLE TO SUPPORT THE
TRAVEL OF ANYONE ELSE. SECTION 5703(C), QUOTED SUPRA, PROVIDES A
LIMITED EXCEPTION FOR 'DOLLAR A YEAR MEN' WHO, WHILE NOT GOVERNMENT
EMPLOYEES, ARE NEVERTHELESS SERVING THE GOVERNMENT. THUS, EVEN WITHOUT
CONSIDERING THE PROHIBITION IN 31 U.S.C. SEC. 551, THERE WAS NO
AUTHORITY TO USE EPA TRAVEL FUNDS TO PAY EXPENSES OF PERSONS WHO WERE
NEITHER GOVERNMENT EMPLOYEES NOR 'DOLLAR A YEAR MEN' UNDER THE EXCEPTION
PROVIDED BY SECTION 5703(C).
"THE RELATIONSHIP BETWEEN 5 U.S.C. SEC. 5703(C) AND 31 U.S.C. SEC.
551 HAS NEVER BEEN DISCUSSED IN ANY OF OUR PRIOR DECISIONS. HOWEVER, IF
EPA'S CONTENTION IS VALID, THEN SECTION 551 WOULD BE EFFECTIVELY
REPEALED TO THE EXTENT THAT A MEETING OR CONFERENCE IS ADMINISTRATIVELY
DETERMINED TO BE RELATED TO OFFICIAL AGENCY BUSINESS. ***
"WE HAVE REVIEWED THE LEGISLATIVE HISTORIES OF BOTH ACTS AND HAVE
FOUND NO EVIDENCE OF ANY CONGRESSIONAL INTENT TO IMPART TO SECTION
5703(C) THE SCOPE SUGGESTED BY EPA. RATHER, IT IS CLEAR FROM THE
LEGISLATIVE HISTORY - AND, IN FACT, IMPLICIT IN THE STATUTORY LANGUAGE -
THAT THIS AUTHORITY APPLIES ONLY TO PERSONS PERFORMING A DIRECT SERVICE
FOR THE GOVERNMENT, SUCH AS EXPERTS, CONSULTANTS, OR OTHER ADVISORS, TO
PERMIT TRAVEL TO CONFER WITH GOVERNMENT OFFICIALS IN CONNECTION WITH THE
PERFORMANCE OF THAT SERVICE. ***
"WE THUS DO NOT BELIEVE THAT SECTION 5703(C) WAS EVER INTENDED TO
ESTABLISH THE PROPOSITION THAT ANYONE MAY BE DEEMED A PERSON SERVING
WITHOUT COMPENSATION MERELY BECAUSE HE OR SHE IS ATTENDING A MEETING OR
CONVENTION, THE SUBJECT MATTER OF WHICH IS RELATED TO THE OFFICIAL
BUSINESS OF SOME FEDERAL DEPARTMENT OR AGENCY ***. WE BELIEVE THAT
BEING CALLED UPON TO CONFER WITH AGENCY STAFF ON OFFICIAL BUSINESS IS
DIFFERENT FROM ATTENDING A MEETING OR CONVENTION IN WHICH A DEPARTMENT
OR AGENCY IS ALSO INTERESTED. IN THIS CONTEXT, BOTH STATUTES MAY BE
CONSTRUED AND GIVEN EFFECT CONSISTENTLY."
IN LIGHT OF THE FOREGOING, WE DO NOT BELIEVE THAT MSHA HAS AUTHORITY
UNDER 5 U.S.C. SEC. 5703 TO PAY THE TRAVEL EXPENSES OF MINERS AND MINE
OPERATORS ATTENDING MINE SAFETY AND HEALTH TRAINING SEMINARS INASMUCH AS
THESE INDIVIDUALS ARE NOT PERFORMING A DIRECT SERVICE FOR THE
GOVERNMENT. USUALLY, THE SEMINARS ARE HELD AT THE REQUEST OF MINE
OPERATORS OR UNIONS, WHICH IS A CLEAR INDICATION THAT THE GOVERNMENT IS
NOT THE SOLE OR PRIMARY BENEFICIARY OF THE TRAINING.
IN SUM, WE BELIEVE THAT B-166506, JULY 15, 1975, AND 55 COMP. GEN.
750 ARE PRECISELY IN POINT AND THE RESULT IN THOSE DECISIONS IS EQUALLY
APPLICABLE HERE. IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, 31
U.S.C. SEC. 551 PROHIBITS THE USE OF APPROPRIATED FUNDS TO PAY TRAVEL
EXPENSES OF MINERS AND MINE OPERATORS ATTENDING MSHA TRAINING SEMINARS.
IF MSHA CONSIDERS SUCH PAYMENTS ESSENTIAL TO ITS MISSION ACCOMPLISHMENT,
SPECIFIC AUTHORIZING LEGISLATION SHOULD BE SOUGHT FROM THE CONGRESS.
B-194072, JUL 2, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
TRANSFERRED EMPLOYEE MAY NOT BE REIMBURSED LOAN ORIGINATION FEE
INCURRED INCIDENT TO PURCHASE OF HOME AT NEW OFFICIAL DUTY STATION SINCE
FEE IS FINANCE CHARGE WITHIN THE PURVIEW OF SECTION 106 OF TRUTH IN
LENDING ACT, TITLE I, PUB. L. 90-321, 15 U.S.C. SEC. 1605 (1976) AND
REGULATION Z, 12 C.F.R. SEC. 226.4(A) (1978) AND IS THUS NOT
REIMBURSABLE UNDER FEDERAL TRAVEL REGULATIONS (FPMR 101-7) PARAGRAPH
2-6.2D (MAY 1973).
RICHARD J. ELLIOTT - REAL ESTATE EXPENSES - LOAN ORIGINATION FEE:
THIS ACTION IS IN RESPONSE TO A LETTER DATED FEBRUARY 1, 1979, FROM
MR. R. A. HICKS, AN AUTHORIZED CERTIFYING OFFICER OF THE DEPARTMENT OF
THE INTERIOR. MR. HICKS REQUESTS OUR DECISION WHETHER HE MAY CERTIFY
FOR PAYMENT A VOUCHER SUBMITTED BY SPECIAL AGENT RICHARD J. ELLIOTT, AN
EMPLOYEE OF THE FISH AND WILDLIFE SERVICE. MR. ELLIOTT, WHO WAS
TRANSFERRED FROM ST. PAUL, MINNESOTA, TO COLUMBUS, OHIO, WITH A
REPORTING DATE OF OCTOBER 9, 1977, IS SEEKING REIMBURSEMENT OF A LOAN
ORIGINATION FEE OF $414 WHICH HE PAID WHEN HE PURCHASED A HOME AT HIS
NEW OFFICIAL STATION. THE AMOUNT WAS PREVIOUSLY DISALLOWED BY INTERIOR.
MR. ELLIOTT'S CLAIM WAS DISALLOWED BY THE DEPARTMENT OF THE INTERIOR
ON THE BASIS THAT THE LOAN ORIGINATION FEE REPRESENTED A FINANCE CHARGE
UNDER SECTION 106 OF THE TRUTH IN LENDING ACT, TITLE I, PUB. L. 90-321,
15 U.S.C. SEC. 1605 (1976) AND THE IMPLEMENTING REGULATION Z, 12 C.F.R.
SEC. 226.4(A) (1978), AND WAS THUS NOT REIMBURSABLE UNDER THE FEDERAL
TRAVEL REGULATIONS (FPMR 101-7) PARAGRAPH 2-6.2D (MAY 1973). THE
PERTINENT PART OF REGULATION Z PROVIDES:
"226.4 DETERMINATION OF FINANCE CHARGE.
"(A) GENERAL RULE. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE
AMOUNT OF THE FINANCE CHARGE IN CONNECTION WITH ANY TRANSACTION SHALL BE
DETERMINED AS THE SUM OF ALL CHARGES PAYABLE DIRECTLY OR INDIRECTLY BY
THE CREDITOR AS AN INCIDENT TO OR AS A CONDITION OF THE EXTENSION OF
CREDIT, WHETHER PAID OR PAYABLE BY THE CUSTOMER, THE SELLER, OR ANY
OTHER PERSON ON BEHALF OF THE CUSTOMER TO THE CREDITOR OR TO A THIRD
PARTY, INCLUDING ANY OF THE FOLLOWING TYPES OF CHARGES:
"(2) SERVICE, TRANSACTION, ACTIVITY, OR CARRYING CHARGE.
"(3) LOAN FEE, POINTS, FINDER'S FEE, OR SIMILAR CHARGE. ***"
UNDER PARAGRAPH 2-6.2D OF THE FEDERAL TRAVEL REGULATIONS,
REIMBURSEMENT OF EXPENSES INCURRED IN CONNECTION WITH THE SALE OR
PURCHASE OF A HOUSE DEPENDS ON WHETHER AN EXPENSE IS THE RESULT OF A
FINANCE CHARGE AS DEFINED IN THE TRUTH IN LENDING ACT (TILA) AND
REGULATION Z. THE PRIMARY PURPOSE OF THE TILA IS TO ASSURE A MEANINGFUL
DISCLOSURE OF CREDIT TERMS SO THAT A CONSUMER WILL BE ABLE TO COMPARE
MORE READILY THE VARIOUS CREDIT TERMS AVAILABLE TO HIM AND AVOID THE
UNINFORMED USE OF CREDIT. SEE 15 U.S.C. SEC. 1601. THEREFORE, THE
FINANCE CHARGE IS DEFINED SO AS TO DISTINGUISH BETWEEN CHARGES IMPOSED
AS PART OF THE COST OF OBTAINING CREDIT AND CHARGES IMPOSED FOR SERVICES
RENDERED IN CONNECTION WITH A PURCHASE OR SALE REGARDLESS OF WHETHER
CREDIT IS SOUGHT OR OBTAINED.
IT IS CLEAR THAT MR. ELLIOTT'S LOAN ORIGINATION FEE IS A FINANCE
CHARGE. IN A LETTER DATED MARCH 20, 1978, TO THE DEPARTMENT OF THE
INTERIOR, MR. CARL D. SALYERS, ASSISTANT VICE PRESIDENT OF STATE
SAVINGS, COLUMBUS, OHIO, WHICH HOLDS THE MORTGAGE ON MR. ELLIOTT'S
HOUSE, STATED THAT "THE DISALLOWED FEE OF $414 WITH REGARDS TO RICHARD
J. ELLIOTT IN NO WAY REPRESENTS POINTS, INTEREST, OR LOAN DISCOUNT.
THIS IS A STANDARD CLOSING COST CHARGED TO THE BORROWER IN THE CENTRAL
OHIO REGION BY THE FINANCIAL INSTITUTIONS. THESE CLOSING COSTS
REPRESENT THE TOTAL CHARGES NECESSARY TO CLOSE A MORTGAGE LOAN AT STATE
SAVINGS COMPANY." THE LOAN ORIGINATION FEE REFLECTS THE MORTGAGOR'S
ADMINISTRATIVE COSTS IN CONNECTION WITH MAKING THE LOAN AND IS THEREFORE
"INCIDENT TO *** THE EXTENSION OF CREDIT." PARAGRAPH 226.4 OF REGULATION
Z.
MR. ELLIOTT DOES NOT SPECIFICALLY CONTEND THAT THE LOAN ORIGINATION
FEE IS NOT A FINANCE CHARGE. RATHER HE ARGUES THAT THESE FEES SHOULD BE
REIMBURSED BECAUSE THE ECONOMIC CLIMATE HAS PLACED A FINANCIAL BURDEN ON
TRANSFERRED EMPLOYEES. SINCE LOAN ORIGINATION FEES ARE NOT REIMBURSABLE
UNDER THE CURRENT FTR PROVISION, MR. ELLIOTT'S ARGUMENT IS MORE
APPROPRIATELY DIRECTED TO THE GENERAL SERVICES ADMINISTRATION. THAT
AGENCY HAS RESPONSIBILITY FOR PROMULGATING THE FTR AND, AS A RESULT, ANY
CHANGE WOULD REQUIRE THE ACTION OF THE GSA ADMINISTRATOR.
ACCORDINGLY, THE RECLAIM VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT.
B-193057, JUNE 29, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. DECIDING WHETHER DIFFERENCE IN POINT SCORING IS SIGNIFICANT, OR
WHETHER TECHNICAL PROPOSALS ARE ESSENTIALLY EQUAL INVOLVES EXERCISE OF
JUDGMENT BY AGENCY. EVALUATION RECORD SUPPORTS AGENCY DETERMINATION
THAT SPREAD OF SIX POINTS BETWEEN TOP TWO PROPOSALS IS NOT SIGNIFICANT
AND THAT PROPOSALS ARE SUBSTANTIALLY EQUAL.
2. WHERE TWO OFFERORS ARE CONSIDERED TECHNICALLY EQUAL AND
DIFFERENTIAL BETWEEN ACCEPTABLE OFFERORS' COST ESTIMATES IS SLIGHT
PRUDENCE DICTATES THAT DETAILED COST ANALYIS BE MADE OF EACH PROPOSAL
AND THAT A CONTEMPORANEOUS RECORD OF ANALYSIS BE MADE AND KEPT.
3. RECORD DOES NOT SHOW THAT MEANINGFUL COST ANALYSIS WAS MADE WHERE
AGENCY DOES NOT EXPLAIN $2940 DIFFERENCE BETWEEN OFFERORS' ESTIMATE OF
SAME DIRECT COST ELEMENT BUT MAINTAINS THAT BOTH ESTIMATES ARE "DEEMED
REASONABLE" AND THERE IS EVIDENCE OF QUESTIONABLE "NORMALIZATION"
ANALYSIS OF ONE PROPOSAL. GAO RECOMMENDS THAT AGENCY AGAIN EVALUATE TWO
PROPOSALS USING MORE COMPREHENSIVE COST REALISM ANALYSIS AND AWARD
REMAINDER OF TERM TO PROTESTER IF ITS OFFER IS DETERMINED TO BE LOW.
FRANKLIN INSTITUTE RESEARCH LABORATORIES:
FRANKLIN INSTITUTE RESEARCH LABORATORIES (FRANKLIN), PROTESTS THE
AWARD OF A CONTRACT TO INFORMATICS INCORPORATED (INFORMATICS) ON
SEPTEMBER 29, 1978, UNDER REQUEST FOR PROPOSALS (RFP) NO. WA 78-C256
ISSUED BY THE ENVIRONMENTAL PROTECTION AGENCY (EPA). THE RFP, WHICH WAS
ISSUED ON JUNE 14, 1978, CONTEMPLATED A COST-PLUS-FIXED-FEE,
LEVEL-OF-EFFORT CONTRACT TO PROVIDE INFORMATION SUPPORT FOR EPA'S OFFICE
OF NOISE ABATEMENT AND CONTROL.
FRANKLIN COMPLAINS THAT THE AWARD SHOULD NOT HAVE BEEN MADE TO
INFORMATICS ON THE BASIS OF ITS LOW COST ESTIMATE SINCE FRANKLIN
RECEIVED THE HIGHEST TECHNICAL SCORE AND THE COST DIFFERENCE WAS SLIGHT.
FRANKLIN ALSO CONTENDS THAT EPA FAILED TO PERFORM A PROPER COST
ANALYSIS.
WE AGREE WITH EPA'S ACTIONS REGARDING THE TECHNICAL EVALUATION.
HOWEVER, WE FIND THAT A PROPER COST ANALYSIS WAS NOT MADE AND SUSTAIN
THE PROTEST ON THAT BASIS.
THE RFP PROVIDED THAT TECHNICAL PROPOSALS WERE TO BE POINT SCORED IN
THREE GENERAL CATEGORIES; TECHNICAL CAPABILITIES, SKILLS AND EQUIPMENT
AND DIRECTLY RELATED EXPERIENCE. COST PROPOSALS WERE NOT TO BE POINT
SCORED BUT THE RFP INDICATED THAT IF THERE WERE NO SIGNIFICANT
TECHNICAL, FINANCIAL OR MANAGEMENT DIFFERENCES COST COULD BE THE
DETERMINING FACTOR.
OF THE NINE PROPOSALS RECEIVED ON THE JULY 24 CLOSING DATE, FIVE,
INCLUDING FRANKLIN'S WITH A TECHNICAL SCORE OF 92 AND A COST ESTIMATE OF
$91,612 AND INFORMATICS' WITH A TECHNICAL SCORE OF 86 AND A COST
ESTIMATE OF $97,172, WERE INCLUDED IN THE COMPETITIVE RANGE. AFTER
DISCUSSIONS WERE HELD WITH THOSE FIVE FIRMS, BEST AND FINAL OFFERS WERE
RECEIVED ON SEPTEMBER 28. BOTH FRANKLIN AND INFORMATICS RETAINED THEIR
RESPECTIVE SCORES OF 92 AND 86 WHILE FRANKLIN'S COST ESTIMATE WAS
REDUCED TO $91,098 AND INFORMATICS' ESTIMATE REDUCED TO $88,040. EPA
CONSIDERED FRANKLIN AND INFORMATICS TO BE SUBSTANTIALLY EQUAL FROM A
TECHNICAL STANDPOINT AND AWARDED THE CONTRACT TO INFORMATICS BASED ON
ITS LOWER COST ESTIMATE.
FRANKLIN ASSERTS THAT BY VIRTUE OF ITS HIGHER SCORE ITS PROPOSAL WAS
TECHNICALLY SUPERIOR TO THE INFORMATICS PROPOOSAL AND SHOULD HAVE
RECEIVED THE AWARD. THE AGENCY REPLIES THAT DESPITE THE DISPARITY IN
SCORING THERE WAS NO SIGNIFICANT DIFFERENCE BETWEEN THE TECHNICAL
PROPOSALS AND NOTES THAT BOTH OFFERORS WER EITHER ABOVE AVERAGE OR
SUPERIOR IN "JUST ABOUT EACH EVALUATION CATEGORY." THE PROTESTER REMAINS
UNCONVINCED, ASSERTING THAT EPA MUST SUBSTANTIATE ITS POSITION BY AN
ANALYSIS OF THE EVALUATION AND A REVIEW OF THE EVALUATORS' COMMENTS.
FRANKLIN ALSO OBJECTS TO THE FACT THAT THE TECHNICAL EVALUATION
DOCUMENTS WERE NOT MADE AVAILABLE TO IT.
ALTHOUGH THE PROTESTER WAS NOT GIVEN ALL THE EVALUATION DOCUMENTS,
THEY HAVE BEEN MADE AVAILABLE TO THIS OFFICE. WE HAVE OFTEN HELD THAT
WE MAY PROPERLY CONSIDER RESTRICTED DOCUMENTS SUCH AS TECHNICAL
EVALUATIONS NOT FURNISHED THE PROTESTER. SYSTEMS RESEARCH LABORATORIES,
INC. - RECONSIDERATION, B-186842, MAY 5, 1978, 78-1 CPD 341. THE
DOCUMENTS SUBSTANTIATE EPA'S POSITION THAT BOTH FIRMS RECEIVED EITHER
ABOVE AVERAGE OR SUPERIOR RATINGS IN SUBSTANTIALLY ALL CATEGORIES. IN
ONLY ONE OF THE 15 RATING CATEGORIES, THAT OF ACCESS TO AUDIOVISUAL
MATERIALS, DID INFORMATICS RECEIVE A RATING OF "ADEQUATE." FURTHER, IN A
MEMORANDUM ENTITLED "SELECTION OF CONTRACTOR" THE CONTRACTING OFFICER
INDICATES THAT INFORMATICS' PROPOSAL "MEETS ALL OF GOVERNMENT'S
REQUIREMENTS." IN A MEMORANDUM PREPARED BY ONE OF THE EVALUATORS FOR THE
PURPOSE OF CONVEYING THE CONCLUSIONS OF THE EVALUATION PANEL TO THE
CONTRACTING OFFICER, BOTH INFORMATICS' AND FRANKLIN'S PROPOSALS ARE
CLASSIFIED AS "EXTREMELY RESPONSIVE." THERE IS NO MENTION OF A
DEFICIENCY IN INFORMATICS' PROPOSAL WHILE MINOR WEAKNESSES IN FRANKLIN'S
PROPOSAL ARE DISCUSSED.
DECIDING WHETHER A GIVEN DIFFERENCE IN POINT SCORING IS SIGNIFICANT,
OR WHETHER THE TECHNICAL PROPOSALS ARE ESSENTIALLY EQUAL DESPITE THE
DIFFERENCE IN POINT SCORING, INVOLVES THE EXERCISE OF JUDGMENT AND
DISCRETION ON THE PART OF THE CONTRACTING AGENCY. SEMCOR, B-188807,
NOVEMBER 28, 1977, 77-2 CPD 413. THE FINAL MERIT OF PROPOSALS IS
DETERMINED FROM A REVIEW OF TECHNICAL EVALUATION NARRATIVES, ADJECTIVE
RATINGS, AND OTHER RELEVENT INFORMATION IN ADDITION TO POINT SCORES.
MARINE MANAGEMENT SYSTEMS, INC., B-185860, SEPTEMBER 14, 1976, 76-2 CPD
241.
IN THE PRESENT CASE, WE HAVE REVIEWED ALL THE AVAILABLE DATA AND WE
CONCLUDE THAT EPA HAD A REASONABLE BASIS TO DETERMINE THAT A SPREAD OF
SIX POINTS IN THE SCORING OF THE TWO HIGHEST RANKED ACCEPTABLE PROPOSALS
WAS NOT SIGNIFICANT AND THAT THE PROPOSALS WERE ESSENTIALLY EQUAL.
FRANKLIN ARGUES THAT EPA FAILED TO CONDUCT THE TYPE OF COST ANALYSIS
REQUIRED BY THE FEDERAL PROCUREMENT REGULATIONS (FPR) AND OUR DECISIONS
AND CONTENDS THAT TO THE EXTENT AN ANALYSIS WAS PERFORMED, IT WAS
ILLOGICAL AND ARBITRARY. THE PROTESTER STATES THAT THE COST ANALYSIS
PERFORMED BY THE CONTRACTING OFFICER CONSISTED SOLELY OF A COMPARISON OF
INFORMATICS' AND FRANKLIN'S COST ESTIMATES, WHILE FPR SEC. 1-3.807-2
(1964 ED. AMEND. 103) AND OUR DECISIONS SUCH AS UNIVERSITY RESEARCH
CORPORATION, B-186311, AUGUST 26, 1976, 76-2 CPD 188, REQUIRE THAT A
"SHOULD COST" DETERMINATION BE MADE BASED ON COMPARISONS WITH PREVIOUS
COSTS INCURRED BY THE OFFERORS UNDER PRIOR CONTRACTS, PRIOR ESTIMATES OF
OTHER OFFERORS, A CURRENT COST ESTIMATE FROM OTHER POSSIBLE SOURCES OR
PRIOR ESTIMATES FROM HISTORICAL SOURCES. FPR SEC. 1-3.807-2(C)
PROVIDES:
"COST ANALYSIS IS THE REVIEW AND EVALUATION OF A CONTRACTOR'S COST OR
PRICING DATA *** IN ORDER TO FORM AN OPINION ON THE DEGREE TO WHICH THE
CONTRACTOR'S PROPOSED COSTS REPRESENT WHAT PERFORMANCE OF THE CONTRACT
SHOULD COST ***. IT INCLUDES THE APPROPRIATE VERIFICATION OF COST DATA,
THE EVALUATION OF SPECIFIC ELEMENTS OF COST, AND THE PROJECTION OF THESE
DATA TO DETERMINE THE EFFECT ON PRICES OF SUCH FACTORS AS:
'(I) THE NECESSITY FOR CERTAIN COSTS;
'(II) THE REASONABLENESS OF AMOUNTS ESTIMATED FOR THE NECESSARY
COSTS;
'(IV) THE BASIS USED FOR ALLOCATION OF OVERHEAD COSTS ***."
FURTHER, THE REGULATION STATES THAT, WHERE POSSIBLE, A COST ANALYSIS
SHOULD INCLUDE THE COMPARISON OF AN OFFEROR'S ESTIMATED COSTS WITH THOSE
ITEMS LISTED ABOVE BY THE PROTESTER.
EPA MAINTAINS THAT ITS ANALYSIS WAS BROAD ENOUGH TO SATISFY THE
REQUIREMENTS OF THE REGULATION AND SUFFICIENTLY ACCURATE TO ENABLE IT TO
CORRECTLY DETERMINE THAT FRANKLIN'S PERFORMANCE WOULD BE MORE COSTLY.
THE RECORD OF EPA'S COST ANALYSIS IS SOMEWHAT CONFUSING AS IT
CONSISTS OF TWO DESCRIPTIONS OF THE INITIAL COST ANALYSIS WHICH DIFFER
IN CERTAIN ASPECTS AND A SUPPLEMENTAL ANALYSIS.
THE FIRST DESCRIPTION IS CONTAINED IN THE CONTRACTING OFFICER'S
STATEMENT INCLUDED IN THE INITIAL REPORT SUBMITTED TO THIS OFFICE BY
EPA. IN THAT STATEMENT, THE CONTRACTING OFFICER EXPLAINS THAT A
DETAILED COST ANALYSIS WAS CONDUCTED WHICH REVEALED THAT THE
APPROXIMATELY $3,000 DIFFERENCE BETWEEN INFORMATICS' AND FRANKLIN'S COST
PROPOSALS WAS CENTERED IN SEVERAL DIRECT COST AREAS: (1) LONG DISTANCE
TELEPHONE CALLS, (2) SUBSCRIPTION COSTS AND (3) TRAVEL EXPENSES.
THE CONTRACTING OFFICER INDICATES THAT FRANKLIN'S ESTIMATE OF $2,600
FOR LONG DISTANCE TELEPHONE CALLS AS COMPARED TO NO ESTIMATED COSTS FOR
INFORMATICS WAS DUE TO THE FACT THAT FRANKLIN IS LOCATED IN
PHILADELPHIA, WHEREAS INFORMATICS IS BASED IN METROPOLITAN WASHINGTON
AND COULD CONTACT EPA BY LOCAL TELEPHONE. FURTHER, THE CONTRACTING
OFFICER STATES THAT FRANKLIN PROPOSED $3,000 FOR SUBSCRIPTION COSTS
WHILE INFORMATICS ONLY PROPOSED $60 BECAUSE AS THE INCUMBENT,
INFORMATICS ALREADY POSSESSED THE NEEDED SUBSCRIPTIONS. THE CONTRACTING
OFFICER ALSO CONSIDERED THE LACK OF TRAVEL EXPENSES IN FRANKLIN'S COST
PROPOSAL UNREALISTIC AS SOME "FACE-TO-FACE" CONTACT WAS DEEMED NECESSARY
FOR CONTRACT PERFORMANCE.
FINALLY, THE STATEMENT NOTES THAT AN ANALYSIS OF INFORMATICS' COST
PROPOSAL SHOWED THAT IT PROVIDED 4,160 TECHNICAL HOURS, WHICH EQUALED
THE GOVERNMENT LEVEL-OF-EFFORT ESTIMATE CONTAINED IN THE RFP AND
REVEALED THAT INFORMATICS' PROPOSAL WAS BASED ON CURRENT "COSTS AND COST
CENTER RATES" AS ACCEPTED BY THE EPA COST REVIEW AND POLICY OFFICE.
ALTHOUGH THE CONTRACTING OFFICER DID NOT PREPARE A CONTEMPORANEOUS
COST ANALYSIS MEMORANDUM, THE OVERALL EVALUATION DOCUMENTS DO REVEAL
THAT SOME ADDITIONAL CONSIDERATION WAS GIVEN TO FRANKLIN'S TECHNICAL
LEVEL-OF-EFFORT ESTIMATE. ONE MEMORANDUM EXPRESSES CONCERN THAT
FRANKLIN'S COSTS MAY BE HIGHER THAN ESTIMATED AS IT PROPOSED ONLY 3,690
HOURS WHILE ANOTHER MEMORANDUM MENTIONS THAT FRANKLIN'S COST ESTIMATE IS
QUESTIONABLE BECAUSE ONLY 4,070 HOURS OF TECHNICAL EFFORT WERE PROPOSED.
THE ISSUES RAISED BY THE PROTEST AS WELL AS THE DISCREPANCY IN THE
TREATMENT OF TECHNICAL HOURS LED EPA TO PERFORM AN ADDITIONAL, AFTER THE
FACT, COST ANALYSIS OF THE INFORMATICS AND FRANKLIN PROPOSALS. THIS
ANALYSIS PRIMARILY CONSISTS OF A DETAILED COMPARISON OF ESTIMATES
CONTAINED IN THE TWO COST PROPOSALS. IT SEEMS TO VERIFY THE REFERENCES
IN THE CONTRACTING OFFICER'S STATEMENT TO DIRECT COST VARIANCES IN THE
TELEPHONE, SUBSCRIPTION AND TRAVEL COST ESTIMATES.
MORE SIGNIFICANTLY, THIS SUPPLEMENTAL ANALYSIS INDICATES THAT
ALTHOUGH THE INITIAL ANALYSIS "NORMALIZED" FRANKLIN'S COST PROPOSAL BY
ADDING THE COST OF 470 HOURS OF TECHNICAL EFFORT TO THE PROTESTER'S
LEVEL-OF-EFFORT ESTIMATE, ONLY 90 HOURS WERE NEEDED TO BRING FRANKLIN'S
ESTIMATE IN LINE WITH THE GOVERNMENT ESTIMATE. DESPITE THIS ERROR, EPA
CONCLUDES THAT THE PROPER OFFEROR WAS CHOSEN BECAUSE THE DIFFERENCE IN
DIRECT COSTS INCLUDING TELEPHONE, SUBSCRIPTION AND CONSULTANT COSTS
STILL RESULTS IN INFORMATICS BEING THE LOWEST COST OFFEROR.
AFTER CONSIDERING THE PREVIOUS TWO VERSIONS OF THE COST ANALYSIS, WE
REQUESTED THAT THE CONTRACTING OFFICER PROVIDE THIS OFFICE WITH A
DETAILED RECONSTRUCTION OF HIS ORIGINAL ANALYSIS. IN THIS
RECONSTRUCTION, THE CONTRACTING OFFICER STATES THAT HE VERIFIED THE
OVERHEAD, GENERAL AND ADMINISTRATIVE AND LABOR RATES PROPOSED BY BOTH
OFFERORS WITH FILES REMAINED BY THE COST REVIEW BRANCH OF EPA AND WITH
THE DEFENSE CONTRACT AUDIT AGENCY. HE ALSO CHECKED INFORMATICS' DIRECT
COSTS WITH THOSE INCURRED UNDER ITS PRIOR CONTRACT WITH EPA FOR THESE
SERVICES AND COMPARED FRANKLIN'S COSTS WITH THOSE IN OTHER FRANKLIN
PROPOSALS. ALSO NOTED WAS THE LACK OF TRAVEL COSTS PROPOSED BY
FRANKLIN.
FINALLY, THE CONTRACTING OFFICER STATES THAT HE ANALYZED THE
PROFESSIONAL LEVEL-OF-EFFORT PROPOSED BY EACH FIRM AND NOTED THAT WHILE
INFORMATICS PROPOSED 4,160 HOURS, FRANKLIN ONLY PROPOSED 3,690 HOURS.
ALTHOUGH THE CONTRACTING OFFICER INDICATES THAT FRANKLIN PROPOSED 300
HOURS OF "FREE LANCE" LABOR AND 80 HOURS OF CONSULTANT TIME, HE DID NOT
CLASSIFY THE "FREE LANCE" LABOR AS PROFESSIONAL EFFORT. ACCORDINGLY, HE
ADDED ONLY THE 80 HOURS OF CONSULTANT TIME TO FRANKLIN'S ESTIMATE AND
CONCLUDED THAT FRANKLIN'S PROPOSED LEVEL OF EFFORT WAS 3,770 HOURS, 390
HOURS SHORT OF THE GOVERNMENT ESTIMATE.
THERE IS NO EXPLANATION WHY THIS RECONSTRUCTION MAKES NO MENTION OF
THE SUBSCRIPTION AND TELEPHONE COSTS, WHICH FIGURE PROMINENTLY IN THE
CONTRACTING OFFICER'S ORIGINAL STATEMENT AND THE SUPPLEMENTAL COST
ANALYSIS. ALSO UNEXPLAINED IS THE LACK OF REFERENCE IN THE CONTRACTING
OFFICER'S ORIGINAL STATEMENT TO ANY VERIFICATION OF FRANKLIN'S OVERHEAD
RATES, DIRECT COSTS OR LEVEL-OF-EFFORT ESTIMATE. ALSO THE RECORD
CONTAINS NO EXPLANATION OF THE DISCREPANCY BETWEEN THE STATEMENT IN THE
SUPPLEMENTAL ANALYSIS THAT 470 HOURS WERE USED TO "NORMALIZE" FRANKLIN'S
PROPOSAL AND THE STATEMENT BY THE CONTRACTING OFFICER IN HIS
RECONSTRUCTION THAT HE FOUND THE FRANKLIN PROPOSAL TO BE 390 HOURS SHORT
OF THE GOVERNMENT ESTIMATE.
THE PROTESTER INSISTS THAT THE RECORD SHOWS THAT AN ADEQUATE COST
ANALYSIS WAS NOT CONDUCTED AND URGES THAT WE IGNORE THE SUPPLEMENTAL
ANALYSIS AND SUBSEQUENT RECONSTRUCTION AS AFTER THE FACT
RATIONALIZATIONS ENTITLED TO NO WEIGHT. ALSO, FRANKLIN URGES TO THE
EXTENT ANY ANALYSIS WAS PERFORMED, IT WAS ERRONEOUS.
THE LACK OF ANY CONTEMPORANEOUS MEMORANDA REGARDING THE COST ANALYSIS
MAKES IT DIFFICULT FOR OUR OFFICE TO ASSESS ITS ADEQUACY. ALTHOUGH THE
PROTESTER URGES THAT WE IGNORE THE CONTRACTING OFFICER'S RECONSTRUCTION
AND THE SUPPLEMENTAL ANALYSIS, SINCE THAT RECONSTRUCTION, ALONG WITH THE
CONTRACTING OFFICER'S INITIAL STATEMENT, CONSTITUTES THE ONLY EVIDENCE
OF THE INITIAL EVALUATION, IT MUST BE CONSIDERED. THE SUPPLEMENTAL
ANALYSIS MAY NOT BE CONSIDERED AS EVIDENCE OF THE INITIAL COST ANALYSIS
BUT MAY BE CONSIDERED AS EVIDENCE ON THE ISSUE OF WHETHER THAT COST
ANALYSIS, IF IMPROPER, PREJUDICED THE PROTESTER.
FRANKLIN SPECIFICALLY CHALLENGES EPA'S FINDING THAT ITS $2,600
ESTIMATE FOR LONG DISTANCE TELEPHONE CALLS WAS DUE TO FRANKLIN'S
PHILADELPHIA LOCATION. FRANKLIN NOTES THAT IT HAS THREE OFFICES IN THE
WASHINGTON, D. C. AREA AND THAT IT HAS DIRECT TELEPHONE LINES TO THIS
AREA, THE COST OF WHICH ARE INCLUDED IN OVERHEAD. THE PROTESTER
EXPLAINS THAT THE $2,600 ESTIMATE IS COMPRISED OF TELEPHONE COSTS
RELATED TO THE ACCOMPLISHMENT OF VARIOUS TASKS UNDER THE CONTRACT AND
ARE NOT RELATED TO FRANKLIN'S LOCATION. THE PROTESTER CONTENDS THAT
INFORMATICS WILL HAVE TO INCUR SIMILAR EXPENSES.
EPA HAS NOT SPECIFICALLY RESPONDED TO FRANKLIN'S ARGUMENT. HOWEVER,
WE NOTE THAT THE CONTRACTING OFFICER'S RECONSTRUCTION, WHICH WAS
SUBMITTED AFTER THIS ISSUE WAS RAISED, OMITS THE LONG DISTANCE TELEPHONE
ESTIMATE AS A REASON FOR HIS CONCLUSION THAT FRANKLIN'S PROPOSAL
REPRESENTS A HIGHER COST APPROACH.
FURTHER, FRANKLIN DISPUTES EPA'S VIEW THAT ITS ESTIMATE OF $3,000 FOR
SUBSCRIPTION COSTS AS COMPARED TO $60 FOR INFORMATICS WAS DUE TO
INFORMATICS' INCUMBENCY. THE PROTESTER EXPLAINS THAT THE $3,000 WAS NOT
FOR SUBSCRIPTIONS BUT FOR THE PURCHASE OF DOCUMENTS WHICH ANY
CONTRACTOR, INCLUDING AN INCUMBENT, WILL HAVE TO PURCHASE TO PERFORM THE
CONTRACT.
AGAIN, EPA HAS NOT SPECIFICALLY RESPONDED, BUT IT HAS NOT INCLUDED
THIS ITEM IN ITS RECONSTRUCTED COST ANALYSIS.
THE PROTESTER ALSO DISAGREES WITH EPA'S ASSESSMENT THAT ITS FAILURE
TO INCLUDE A COST ESTIMATE FOR TRAVEL EXPENSES IS UNREALISTIC. FRANKLIN
STATES THAT IT INTENDS TO TRAVEL TO WASHINGTON, D. C. FOR MEETINGS BUT
ARGUES THAT ITS REPRESENTATIVES WILL TRAVEL WITH ITS COURIER WHO MAKES
WEEKLY TRIPS TO WASHINGTON, D. C. FRANKLIN DOES NOT BELIEVE THAT THESE
TRIPS WILL INVOLVE THE NEED FOR OVERNIGHT ACCOMODATIONS.
IN THIS INSTANCE, THE CONTRACTING OFFICER INCLUDED HIS DOUBTS ABOUT
FRANKLIN'S LACK OF AN ESTIMATE FOR TRAVEL COSTS IN HIS RECONSTRUCTION.
FINALLY, FRANKLIN STRONGLY OBJECTS TO EPA'S CONCLUSION THAT ITS
PROFESSIONAL LEVEL OF EFFORT ESTIMATE WAS INSUFFICIENT. FRANKLIN NOTES
THAT IN ITS INITIAL PROPOSAL IT INCLUDED A TOTAL PROFESSIONAL STAFF
EFFORT ESTIMATE OF 4,140 HOURS BUT WAS INFORMED DURING DISCUSSIONS THAT
EPA DID "NOT UNDERSTAND THE NEED FOR 200 HOURS OF DIRECTOR'S TIME." IN
RESPONSE TO THIS CONCERN, FRANKLIN REDUCED THESE HOURS, WHICH ARE
INCLUDED IN PROFESSIONAL EFFORT, SO THAT ITS TOTAL PROPOSED EFFERT WAS
CORRESPONDINGLY REDUCED TO 4,070 HOURS. FRANKLIN QUESTIONS THE
PROPRIETY OF EPA'S SUGGESTING THAT ITS PROFESSIONAL LEVEL OF EFFORT MAY
BE TOO HIGH IN A PARTICULAR AREA AND THEN PENALIZING FRANKLIN FOR
REDUCING ITS ESTIMATE. FRANKLIN ALSO OBJECTS TO EPA'S "NORMALIZING" THE
PROTESTER'S PROPOSED LEVEL OF EFFORT TO CONFORM WITH THE RFP ESTIMATE OF
4,160 HOURS IN THE FACE OF THE STATEMENT IN THE RFP THAT "THE LEVEL OF
EFFORT ESTIMATE IS PROVIDED FOR (THE OFFEROR'S) INFORMATION. AN
OFFEROR'S PROPOSAL SHALL REFLECT HIS OWN BEST ESTIMATE OF THE EFFORT
REQUIRED."
THE CONTRACTING OFFICER'S RECONSTRUCTION DOES INCLUDE A DESCRIPTION
OF THE METHOD USED TO "NORMALIZE" FRANKLIN'S PROFESSIONAL
LEVEL-OF-EFFORT ESTIMATE. ALTHOUGH THE RECORD CONTAINS NO EXPLANATION
FOR EPA'S QUESTIONING OF FRANKLIN'S PROPOSED HOURS FOR ITS DIRECTOR, WE
NOTE THAT IT IS NOT NECESSARILY INCONSISTENT FOR AN AGENCY TO VIEW AN
OFFEROR'S PROPOSED LEVEL-OF-EFFORT AS TOO HIGH IN A PARTICULAR CATEGORY
WHILE VIEWING THE TOTAL LEVEL-OF-EFFORT PROPOSED FOR ALL CATEGORIES AS
TOO LOW.
FPR 1-2.807-2(A) STRESSES THAT THE METHOD AND DEGREE OF COST ANALYSIS
IS DEPENDENT ON THE FACTS SURROUNDING THE PARTICULAR PROCUREMENT AND
PRICING SITUATION AND WE HAVE HELD THAT AN AGENCY'S EVALUATION OF
COMPETING COST PROPOSALS INVOLVES THE EXERCISE OF INFORMED JUDGMENT
WHICH THIS OFFICE WILL NOT DISTURB, EVEN WHERE THE RECORD DOES NOT
PROVIDE A FULL EXPLANATION OR RATIONALIZATION FOR COST DIFFERENCES
BETWEEN PROPOSALS, IF IT IS SUPPORTED BY A REASONABLE BASIS. GREY
ADVERTISING, INC., 55 COMP. GEN. 1111, 1133 (1976), 76-1 CPD 325.
HOWEVER, A COST REALISM DETERMINATION CANNOT BE PERMITTED TO STAND WHEN
IT APPEARS THAT THERE HAS BEEN LITTLE OR NO MEANINGFUL ANALYSIS,
PARTICULARLY WHERE CONTRACTOR SELECTION ULTIMATELY DEPENDS ON THAT COST
REALISM DETERMINATION. SEE JOULE TECHNICAL CORPORATION, B-192125, MAY
21, 1979, 58 COMP. GEN. ___, 79-1 CPD___.
IN THIS CASE, WE ARE UNABLE TO DETERMINE THAT A MEANINGFUL COST
ANALYSIS WAS EVER MADE OR THAT AN APPROPRIATE ANALYSIS WOULLD NOT HAVE
RESULTED IN AWARD TO FRANKLIN. IT IS CLEAR FROM EPA'S SUBMISSIONS THAT
THE CONTRACTING OFFICER VIEWED FRANKLIN'S PROPOSAL AS MORE COSTLY THAN
INFORMATICS' PROPOSAL AND "CONSIDERABLY HIGHER" IF TECHNICAL MAN-HOURS
"WERE ADDED TO BRING THEIR PROPOSAL UP TO THE SAME LEVEL AS ***
INFORMATICS." THE RECORD, HOWEVER, DOES NOT CLEARLY PROVIDE SUPPORT FOR
THAT VIEW, RATHER, IT SUGGESTS THE POSSIBILITY THAT THE CONTRACTING
OFFICER'S CONCLUSION WAS ARRIVED AT TOO HASTILY.
FOR EXAMPLE, THERE IS NO SATISFACTORY EXPLANATION FROM THE
CONTRACTING OFFICER REGARDING THE $2940 DIFFERENCE IN PROPOSED
SUBSCRIPTION COSTS. THE RECORD CONTAINS ONLY THAT OFFICER'S INITIAL
STATEMENT AND THE PROTESTER'S RESPONSE THAT THE DIFFERENCE CANNOT BE
RELATED TO INCUMBENCY. THE CONTRACTING OFFICER HAS FURNISHED NEITHER A
REBUTTAL TO THE PROTESTER'S POSITION NOR EXPLAINED WHY THERE OTHERWISE
IS A BASIS FOR THE DIFFERENCE. CERTAINLY, IF THE PROTESTER IS CORRECT,
THEN A PROPER COST REALISM DETERMINATION WOULD RESULT IN AN UPWARD
REVISION TO INFORMATICS' PROPOSAL COSTS; IF, ON THE OTHER HAND, THE
CONTRACTING OFFICER'S READY ACCEPTANCE OF INFORMATICS' $60 FIGURE AS
REALISTIC IS BASED ON HIS RECENT EXPERIENCE WITH THAT FIRM'S
PERFORMANCE, THEN A PROPER COST EVALUATION SHOULD RESULT IN A DOWNWARD
REVISION TO FRANKLIN'S PROPOSED COSTS SINCE WE WOULD NOT EXPECT THAT EPA
WOULD FUND THE PURCHASE OF DOCUMENTS NOT NECESSARY FOR CONTRACT
PERFORMANCE. THE CONTRACTING OFFICER, HOWEVER, REPORTS ONLY THAT BOTH
OFFERORS' DIRECT COST FIGURES WERE "DEEMED REASONABLE." MOREOVER, WE
HAVE SOME DOUBT AS TO THE PROPRIETY OF EPA'S "NORMALIZING" FRANKLIN'S
LEVEL-OF-EFFORT ESTIMATE BY MERELY ADDING ENOUGH HOURS TO EQUAL THE
ESTIMATE CONTAINED IN THE RFP WHEN THE RFP SPECIFICALLY STATES THAT THE
ESTIMATE IS TO BE USED ONLY AS A GUIDE. NO ANALYSIS WAS MADE AS TO
WHETHER FRANKLIN'S LEVEL OF EFFORT MAY HAVE BEEN ADEQUATE. THE
TECHNICAL EVALUATION, HOWEVER, WHICH RESULTED IN A HIGHER SCORE FOR
FRANKLIN THAN FOR INFORMATICS, SUGGESTS THAT FRANKLIN'S PROPOSED LEVEL
OF EFFORT WAS NOT A MAJOR CONCERN. OBVIOUSLY, IF THE COST DIFFERENTIAL
REPRESENTED BY PROPOSED SUBSCRIPTION COSTS AND THE NORMALIZATION OF THE
PROTESTER'S PROPOSAL DISAPPEARS, THE PERCEIVED COST ADVANTAGE OF THE
INFORMATICS PROPOSAL ALSO VANISHES.
WE THINK MUCH OF THE PROBLEM HERE ARISES FROM EPA'S READY RELIANCE ON
WHAT APPEARED IN THE COMPETING PROPOSALS IN LIEU OF PERFORMING A
DETAILED COST ANALYSIS. WHILE WE RECOGNIZE THAT MUCH LESS IN THE WAY OF
ANALYSIS MIGHT BE NECESSARY WHEN THE REALISM OF AN INCUMBENT
CONTRACTOR'S PROPOSAL IS BEING EVALUATED THAN MIGHT BE THE CASE FOR
PROPOSALS OF NON-INCUMBENTS, WE BELIEVE THAT IN A CASE SUCH AS THIS,
WHERE TWO OFFERORS ARE CONSIDERED TECHNICALLY EQUAL AND THE DIFFERENTIAL
BETWEEN THOSE ACCEPTABLE OFFERORS' COST ESTIMATES IS SLIGHT, PRUDENCE
DICTATES THAT A DETAILED COST ANALYSIS SHOULD BE MADE OF EACH SUCH
PROPOSAL AND THAT A CONTEMPORANEOUS RECORD OF THAT ANALYSIS BE MADE AND
KEPT. HERE THERE IS NO SUCH RECORD, AND IT APPEARS THAT SUCH AN
ANALYSIS WAS NOT MADE. AS A RESULT, WE CANNOT DETERMINE THAT EPA
REASONABLY FOUND THE INFORMATICS PROPOSAL TO BE LOWER IN ESTIMATED
COSTS. CONSEQUENTLY, WE ARE RECOMMENDING THAT EPA AGAIN EVALUATE THE
TWO PROPOSALS ON THE BASIS OF A MORE COMPREHENSIVE COST REALISM ANALYSIS
AND, ON THE BASIS OF THAT EVALUATION, EITHER AFFIRM THE AWARD TO
INFORMATICS OR TERMINATE THAT CONTRACT AND AWARD TO FRANKLIN FOR THE
REMAINDER OF THE CONTRACT TERM.
BY LETTER OF TODAY, WE ARE ADVISING THE ADMINISTRATOR, ENVIRONMENTAL
PROTECTION AGENCY OF OUR RECOMMENDATION. THIS DECISION CONTAINS A
RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN. THEREFORE, WE ARE
FURNISHING COPIES TO THE SENATE COMMITTEES ON GOVERNMENTAL AFFAIRS AND
APPROPRIATIONS AND THE HOUSE COMMITTEES ON GOVERNMENT OPERATONS AND
APPROPRIATIONS IN ACCORDANCE WITH SECTION 236 OF THE LEGISLATIVE
REORGANIZATION ACT OF 1970, 31 U.S.C. SEC. 1176 (1976), WHICH REQUIRES
THE SUBMISSION OF WRITTEN STATEMENTS BY THE AGENCY TO THE COMMITTEES
CONCERNING THE ACTION TAKEN WITH RESPECT TO OUR RECOMMENDATION.
THE PROTEST IS SUSTAINED.
B-193818, JUNE 29, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. GROUND OF PROTEST QUESTIONING AGENCY FINDING THAT CONCERN IS
RESPONSIBLE WILL NOT BE CONSIDERED BECAUSE GAO NO LONGER REVIEWS
RESPONSIBILITY FINDINGS, IN ABSENCE OF CERTAIN EXCEPTIONS NOT APPLICABLE
HERE.
2. BASED ON REVIEW OF RECORD, GAO CANNOT QUESTION PROCURING
ACTIVITY'S DECISIONS TO PERMIT WITHDRAWAL OF ERRONEOUS BID AND TO CANCEL
PART OF IFB BECAUSE OF RECEIPT OF UNREASONABLE PRICES.
MIL-SPEC CORPORATION; FRYER-KNOWLES, INC.:
MIL-SPEC CORPORATION (MSC) AND FRYER-KNOWLES, INC. (FKI), HAVE
PROTESTED THE AWARD OF A CONTRACT BY THE NAVAL SUPPLY CENTER, SAN DIEGO,
CALIFORNIA, TO AMERICAN MARINE DECKING SYSTEMS, INC. (AMDS), FOR THE
RENEWAL OF SHIPBOARD DECK COVERINGS UNDER LOTS 2, 3, AND 4 OF INVITATION
FOR BIDS (IFB) NOO244-78-B-T002. THE COMPANIES ALSO PROTEST THE
CANCELLATION OF LOT 1 OF THE IFB.
THE COMPANIES' GROUNDS OF PROTEST MAY BE SUMMARIZED, AS FOLLOWS:
(1) AMDS SHOULD HAVE BEEN CONSIDERED NONRESPONSIBLE FOR THE WORK IN
QUESTION BECAUSE OF THE COMPANY'S "PAST RECORD OF DISREGARDING
SPECIFICATIONS" AND THE COMPANY'S "APPARENT INTENT TO DISREGARD
SPECIFICATIONS IN THE PRESENT SOLICITATION" THROUGH SUBMISSION OF AN
EXCESSIVELY LOW BID.
(2) AMDS'S BID SHOULD HAVE BEEN REJECTED BECAUSE IT IS PREMISED ON
THE VIOLATION OF IFB CLAUSES B14 AND B16 RELATING TO "QUALIFIED
PRODUCTS" REQUIREMENTS. SPECIFICALLY, THE AWARDEE IS "DOING TO A
SIGNIFICANT EXTENT ITS OWN BLENDING AND MANUFACTURE OF MATERIALS" EVEN
THOUGH IT "IS NOT LISTED AS A (QUALIFIED PRODUCTS LIST) PLANT FOR
BLENDING OF MATERIALS."
(3) AMDS WAS GIVEN PREFERENTIAL TREATMENT BY BEING ALLOWED TO
WITHDRAW ITS BID ON LOT 1 WITH "APPARENT EASE" EVEN THOUGH AMDS'S
"PRICES ON ALL LOTS, INCLUDING LOT 1, WERE CONSISTENT IN THEIR RELATION
TO THE AVERAGE BID PRICES BY THE OTHER BIDDERS"; MOREOVER, AMDS'S
"PRICES ON LOT 1 ITEMS WERE VERY SIMILAR TO LOT II AND III ITEMS CALLING
*** FOR THE SAME TYPE OF WORK," YET NO MISTAKE CLAIM WAS MADE FOR LOTS
II AND III.
(4) THE NAVY'S DECISION TO CANCEL LOT 1 BECAUSE THE PROTESTER'S
PRICES WERE CONSIDERED UNREASONABLY HIGH IN COMPARISON WITH PRIOR
CONTRACTS' PRICES IS ERRONEOUS BECAUSE IT WAS BASED ON FAULTY
CONCLUSIONS DRAWN FROM A SURVEY OF FOUR PRIOR CONTRACTS. THE PRIOR
CONTRACTS - UNLIKE THE CONTEMPLATED CONTRACT FOR LOT 1 - WERE JOBS WHERE
THE CONTRACTOR WAS ABLE TO "ASCERTAIN THE CONDITIONS, AREA, AND OTHER
REQUIREMENTS *** PRIOR TO BIDDING," WHEREAS THE IFB HERE DID NOT PROVIDE
THIS OPPORTUNITY; MOREOVER, PRICES FOR THESE JOBS VARY DRASTICALLY
DEPENDING ON THE ACTUAL CONDITIONS INVOLVED.
THE NAVY HAS REPLIED TO THE ABOVE GROUNDS OF PROTEST, AS FOLLOWS:
(1) "CONTRACTOR FILES AT NSC SAN DIEGO REFLECT AN EXTENSIVE RECORD OF
SATISFACTORY PERFORMANCE BY AMDS.
"THE VARIATIONS IN BID PRICES *** DO NOT NECESSARILY LEAD TO A
CONCLUSION THAT THE LOW BIDDER INTENDS TO VIOLATE CONTRACT
SPECIFICATIONS. THE VARIATION MAY BE EXPLAINED BY (THE COMPANIES'
DIFFERING) PERCEPTION OF CONTRACT RISK, WILLINGNESS TO ACCEPT A HIGHER
DEGREE OF RISK IN CONTRACT PERFORMANCE, (AS WELL AS) A POSSIBLE 'BUY-IN'
SITUATION. IT IS THE CONTRACTING OFFICER'S OPINION THAT REASONABLE
STEPS WERE TAKEN TO DETERMINE THE REASONABLENESS OF AMDS' BID ***."
(2) "THE PROTESTER ALLEGES THAT AMDS IS 'PRESENTLY DOING TO A
SIGNIFICANT EXTENT ITS OWN BLENDING AND MANUFACTURE OF MATERIALS,' BUT
PROVIDES NO BASIS FOR THIS ALLEGATION. AS STIPULATED IN ITS BID, THE
QPL PRODUCTS BEING SUPPLIED BY AMDS UNDER THIS CONTRACT ARE VALID QPL
PRODUCTS MANUFACTURED BY CROSSFIELD PRODUCTS CORPORATION AND S. P. KISH
INDUSTRIES, INC., BOTH OF WHICH ARE LISTED ON QPL'S 3134-55 AND 3135-34.
THIS INFORMATION WAS CONFIRMED AS PART OF THE PRE-AWARD SURVEY
CONDUCTED BY DCASMA SAN DIEGO. THERE IS NO EVIDENCE TO SUPPORT THE
CONCLUSION THAT AMDS INTENDS TO EITHER MANUFACTURE OR BLEND QPL
MATERIALS IN VIOLATION OF THE CONTRACT SPECIFICATIONS. AMDS WILL BE
REQUIRED TO CONFORM FULLY TO THE CONTRACT REQUIREMENTS."
(3) "DAR PROVIDES IN 2-406.1 THAT 'AFTER THE OPENING OF BIDS, THE
CONTRACTING OFFICER SHALL EXAMINE ALL BIDS FOR MISTAKES. IN CASES OF
APPARENT MISTAKE, AND IN CASES WHERE THE CONTRACTING OFFICER HAS REASON
TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE, HE SHALL REQUEST FROM THE
BIDDER A VERIFICATION OF THE BID.' WHEN ASKED TO VERIFY ITS BID ON LOT
I, AMDS ALLEGED A MISTAKE IN BID AND REQUESTED CORRECTION THEREOF. DAR
2-406.3 PROVIDES THAT IN ORDER TO PERMIT CORRECTION, THE EVIDENCE MUST
BE CLEAR AND CONVINCING BOTH AS TO EXISTENCE OF THE MISTAKE AND AS TO
THE BID ACTUALLY INTENDED. WHILE THE EVIDENCE DID SUPPORT THE EXISTENCE
OF A MISTAKE, IT DID NOT, IN THE CONTRACTING OFFICER'S OPINION,
DEMONSTRATE IN A CLEAR AND CONVINCING MANNER, THE BID ACTUALLY INTENDED.
IN ACCORDANCE WITH DAR 2-406.3(A)(1), THE CONTRACTING OFFICER DID
PERMIT WITHDRAWAL OF THE BID, UPON THE BIDDER'S REQUEST. WITH RESPECT
TO THE AWARD OF LOTS II AND III, AMDS TWICE VERIFIED ITS BID ON LOTS II
AND III. THE CONTRACTING OFFICER VERIFIED THAT ITS BID PRICES ON LOTS
II AND III WERE IN LINE WITH PREVIOUS GOVERNMENT PROCUREMENT COSTS FOR
SIMILAR WORK AND MANUFACTURERS' COST ESTIMATES OF INSTALLATION."
(4) "DAR SECTION 2-404.9(B)(VI) PROVIDES, 'THE PRESERVATION OF THE
INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE
BEEN OPENED, AWARD MUST BE MADE TO THE RESPONSIBLE BIDDER WHO SUBMITTED
THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT
ALL BIDS AND CANCEL THE SOLICITATION ... IFB'S MAY BE CANCELLED AFTER
OPENING, BUT PRIOR TO AWARD WHEN ... THE CONTRACTING OFFICER DETERMINES
IN WRITING THAT ... (VI) ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT
UNREASONABLE PRICES.' AMDS REQUESTED CORRECTIONS OF ITS BID ON LOT I TO
$141,000. WHILE IT WAS NOT PERMITTED TO DO SO, A GOVERNMENT ESTIMATE
BASED ON PRIOR PROCUREMENTS INDICATED THAT THE PRICE WOULD HAVE BEEN IN
LINE WITH WORK ACCOMPLISHED BY THE PURCHASE ORDER METHOD OF PROCUREMENT.
THE NEXT LOWEST BID OF $331,000 WAS OVER 130 PERCENT MORE THAN THE
PROPOSED CORRECTED BID PRICES OF AMDS. A DETERMINATION WAS MADE,
THEREFORE, THAT THE SECOND LOW BID WAS UNREASONABLE AS TO PRICE AND THE
SOLICITATION WAS CANCELLED PURSUANT TO DAR 2-404.9(B)(VI). IT IS THE
CONTRACTING OFFICER'S OPINION THAT SUCH ACTION WAS REASONABLE AND
PROPER."
GAO ANALYSIS
(1) THE PROTESTERS ARGUE THAT AMDS SHOULD HAVE BEEN FOUND TO BE OTHER
THAN A RESPONSIBLE CONCERN. OUR OFFICE, HOWEVER, NO LONGER REVIEWS
AGENCY DECISIONS THAT FIND CONCERNS TO BE RESPONSIBLE IN THE ABSENCE OF
CERTAIN EXCEPTIONS WHICH ARE NOT APPLICABLE HERE. C.E. WYLIE
CONSTRUCTION COMPANY, B-192806, OCTOBER 11, 1978, 78-2 CPD 272.
MOREOVER, THE POSSIBILITY OF A "BUY-IN" OBTAINED THROUGH SUBMISSION OF
AN ALLEGEDLY EXCESSIVELY LOW BID DOES NOT JUSTIFY REJECTING THE
OTHERWISE ACCEPTABLE BID IN THE ABSENCE OF A FINDING - NOT PRESENT HERE
- THAT THE BID WOULD ADVERSELY AFFECT THE BIDDER. HARRIS MANAGEMENT
COMPANY, INC., B-193049, MAY 30, 1979, 79-1 CPD 382. CONSEQUENTLY, WE
WILL NOT REVIEW THIS GROUND OF PROTEST.
(2) WE CANNOT QUESTION THE NAVY'S RESPONSE TO THIS GROUND OF PROTEST.
(3) ALTHOUGH OUR OFFICE HAS RETAINED THE RIGHT OF REVIEW OF A
PROCURING AGENCY DECISION CONCERNING A MISTAKE ALLEGED AFTER BID OPENING
BUT PRIOR TO AWARD, THE PROCURING AGENCY'S DECISION AS TO THE WEIGHT TO
BE GIVEN THE EVIDENCE IN SUPPORT OF AN ALLEGED MISTAKE WILL NOT BE
QUESTIONED BY OUR OFFICE UNLESS THE DECISION IS UNREASONABLY FOUNDED.
53 COMP. GEN. 232, 235 (1973).
SINCE AMDS TWICE VERIFIED ITS BID ON LOTS 2 AND 3 AND THE COMPANY'S
PRICES WERE IN LINE WITH PREVIOUS NAVY COSTS FOR SIMILAR WORK, THE
PRICES BID BY THE COMPANY FOR THESE LOTS - ALTHOUGH MUCH LOWER THAN
OTHER PRICES BID - ARE IRRELEVANT TO THE QUESTION WHETHER THE NAVY
PROPERLY PERMITTED AMDS TO WITHDRAW ITS BID FOR LOT 1. SIMILARLY, SINCE
NO OTHER BIDDER CLAIMED ERROR IN ITS BID, THE PRICES BID BY OTHERS ARE
IRRELEVANT TO THE AMDS BID ERROR ON LOT 1 TO THE EXTENT AMDS SUBMITTED
CLEAR EVIDENCE OF THE ERROR.
BASED ON OUR REVIEW OF THE RECORD, WE CANNOT QUESTION THE PROCURING
ACTIVITY'S DECISION TO PERMIT AMDS TO WITHDRAW ITS BID IN VIEW OF THE
EVIDENCE SUBMITTED BY THE COMPANY WHICH SHOWS THAT AMDS OMITTED
"OVERHEAD, FIXED EXPENSES AND PROFIT" FROM ITS BID FOR THE ITEMS IN
QUESTION.
(4) OUR OFFICE HAS CONSISTENTLY RECOGNIZED THAT CONTRACTING OFFICERS
MAY PROPERLY EXERCISE A BROAD RANGE OF DISCRETION IN DECIDING WHETHER TO
CANCEL IFB'S BASED ON ANALYSIS OF PRICES BID. SEE ST. LOUIS SHIP,
B-191847, AUGUST 4, 1978, 78-2 CPD 89.
WE ARE NOT IN A POSITION TO QUESTION THE CONTRACTING OFFICER'S
ANALYSIS WHICH LED TO A CONCLUSION THAT ACCEPTABLE BIDS FOR LOT 1 WERE
UNREASONABLY PRICED. SPECIFICALLY, WE NOTE THE FINDING THAT THE
ACCEPTABLE BIDS EXCEEDED BY MORE THAN 130 PERCENT THE PROPOSED CORRECTED
BID OF AMDS - WHICH WAS IN LINE WITH PRICES PAID BY PURCHASE ORDER FOR
THE SAME OR SIMILAR WORK. NOR ARE WE ABLE TO QUESTION THE CONTRACTING
OFFICER'S IMPLICIT VIEW THAT PRIOR WORK WAS SUFFICIENTLY SIMILAR TO THE
WORK INVOLVED HERE THAT A PRICE COMPARISON OF PAST AND CURRENT WORK WAS
JUSTIFIED EVEN RECOGNIZING THAT THE WORK CONDITIONS INVOLVED WERE NOT
IDENTICAL.
PROTESTS DENIED.
B-194454, JUN 29, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. WHERE REQUEST FOR EXTENSION OF CLOSING DATE FOR RECEIPT OF
PROPOSALS BECAUSE OF ADVERSE WEATHER CONDITIONS IS DENIED, INTEGRITY OF
COMPETITIVE PROCUREMENT SYSTEM WOULD BE ADVERSELY AFFECTED IF LATE OFFER
IS THEREAFTER PERMITTED TO BE CONSIDERED.
2. AGENCY NEED NOT EXTEND CLOSING DATE FOR RECEIPT OF PROPOSALS
WHERE REASONS THEREFOR SHOW DECISION IS NOT ARBITRARY OR CAPRICIOUS.
3M BUSINESS PRODUCTS SALES, INC.:
3M BUSINESS PRODUCTS SALES, INC. (3M) PROTESTS THE SOCIAL SECURITY
ADMINISTRATION (SSA) REFUSAL TO EXTEND THE PROPOSAL DUE DATE FOR REQUEST
FOR PROPOSALS (RFP) 79-0033, A PROCUREMENT OF 30 AUTOMATED TEXT-EDITING
TERMINALS FOR THE OFFICE OF DATA SERVICES. THE BASIS FOR THE REQUESTED
EXTENSION WAS THE EXTREME ADVERSE WEATHER CONDITIONS ENCOUNTERED IN THE
WASHINGTON D.C. AREA DURING THE PERIOD IMMEDIATELY PRECEEDING THE DUE
DATE, WHICH 3M ASSERTS PRECLUDED IT FROM COMPLETING ITS PROPOSAL IN TIME
FOR THE SCHEDULED SUBMISSION.
THE PROPOSED PROCUREMENT WAS ANNOUNCED IN THE COMMERCE BUSINESS DAILY
ON OCTOBER 26, 1978, AND THE SOLICITATION WAS ISSUED TO 96 FIRMS ON
NOVEMBER 29, 1978. BECAUSE OF SEVERAL MINOR CHANGES IN THE TECHNICAL
AREA AND THE RECEIPT OF NUMEROUS VENDOR INQUIRIES, FIVE AMENDMENTS WERE
ISSUED EXTENDING THE CLOSING DATE FOR RECEIPT OF PROPOSALS FROM DECEMBER
29, 1978, TO FEBRUARY 21, 1979, AT 3:00 P.M. THE FIFTH AMENDMENT WAS
MAILED TO THE PROSPECTIVE OFFERORS ON FEBRUARY 8, 1979, SOME 13 CALENDAR
DAYS PRIOR TO THE EXTENDED CLOSING DATE. PROPOSALS WERE TO BE RECEIVED
AT SSA OFFICES IN BALTIMORE, MARYLAND.
A HEAVY SNOWSTORM STRUCK THE WASHINGTON/BALTIMORE AREA OVER THE
HOLIDAY WEEKEND PRECEEDING THE CLOSING DATE WHICH CAUSED THE GOVERNMENT
AND MANY PRIVATE CONCERNS TO REMAIN CLOSED UNTIL WEDNESDAY, FEBRUARY 21,
1979.
ON THE MORNING OF FEBRUARY 21, THE CONTRACT SPECIALIST RESPONSIBLE
FOR THE PROCUREMENT RECEIVED A PHONE CALL FROM THE REPRESENTATIVE OF 3M
WHO INQUIRED WHETHER THERE WOULD BE AN EXTENSION OF THE CLOSING DATE
BECAUSE OF THE SNOW EMERGENCY. THE CONTRACTING SPECIALIST REFUSED THE
REQUEST BECAUSE HE BELIEVED THAT 3M HAD ADEQUATE TIME TO PREPARE ITS
PROPOSAL AND A FURTHER EXTENSION TO ACCOMMODATE 3M WOULD CONSTITUTE AN
UNDUE ADVANTAGE OVER OFFERORS WHO SUBMITTED TIMELY PROPOSALS. IN THIS
RESPECT, THE RECORD INDICATES THAT THE CLOSING DATE HAD BEEN EXTENDED
FIVE TIMES FOR A TOTAL OF 7 1/2 WEEKS, THE REVISION CONTEMPLATED BY THE
5TH AMENDMENT REQUIRED ONLY A MINIMUM TIME TO COMPLETE, AND PROPOSALS
HAD ALREADY BEEN RECEIVED FROM FIVE OFFERORS. 3M ALLEGES THAT IT
RECEIVED THE 5TH AMENDMENT IN ITS WASHINGTON, D.C. OFFICES ON FRIDAY,
FEBRUARY 16, AND PLANNED TO FINALIZE ITS FIGURES ON THE FOLLOWING
MONDAY. HOWEVER, 3M ASSERTS ITS PERSONNEL WERE UNABLE TO REACH THEIR
OFFICE TO COMPLETE THE PROPOSAL BECAUSE OF THE DISRUPTION CAUSED BY THE
SNOWSTORM. THUS 3M CONTENDS THAT BECAUSE OF THE CIRCUMSTANCES THE
CLOSING DATE SHOULD HAVE BEEN EXTENDED, AS WAS DONE BY OTHER AGENCIES,
AND THAT ITS PROPOSAL SHOULD NOW BE ACCEPTED AND CONSIDERED.
WE FIND NO MERIT TO 3M'S REQUEST THAT ITS PROPOSAL BE CONSIDERED
BECAUSE OF THE EXTRAORDINARY WEATHER CONDITIONS EVEN THOUGH IT WAS NOT
SUBMITTED BY THE CLOSING TIME SPECIFIED IN THE RFP. WE BELIEVE THAT
MAINTENANCE OF GOVERNMENT PROCUREMENT STANDARDS ASSURING ALL POTENTIAL
OFFERORS THAT THEY WILL BE TREATED EQUALLY AND IMPARTIALLY IS OF GREATER
IMPORTANCE THAN REALIZING WHATEVER ADVANTAGE THAT MIGHT RESULT FROM
MAKING AN EXCEPTION IN A SINGLE PROCUREMENT. FALCON RESEARCH &
DEVELOPMENT CO., B-188321, MAY 4, 1977, 77-1 CPD 306. THUS IN FALCON WE
OBSERVED THAT:
"WHERE IT IS ANTICIPATED THAT INCLEMENT WEATHER WILL PREVENT TIMELY
*** DELIVERY OF AN OFFER OR BID THE APPROPRIATE RELIEF, IF ANY, IS AN
EXTENSION OF THE CLOSING OR BID OPENING DATE. IF DUE CONSIDERATION ***
IS GIVEN TO SUCH A REQUEST PRIOR TO THE DUE DATE AND IS DENIED, WE
BELIEVE IT WOULD ADVERSELY AFFECT THE INTEGRITY OF THE COMPETITIVE
PROCUREMENT SYSTEM, IF A LATE BID OR OFFER THEREAFTER IS PERMITTED TO BE
CONSIDERED."
IN NATIONAL SMALL BUSINESS ASSOCIATION, B-184052, SEPTEMBER 26, 1975,
75-2 CPD 196, WE SAID THAT THE DETERMINATION OF THE DATE TO BE SPECIFIED
FOR RECEIPT OF PROPOSALS IS A MATTER OF JUDGMENT VESTED IN THE
CONTRACTING AGENCY, AND THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT UNLESS
IT APPEARS THAT THE DECISION OF THE AGENCY WAS ARBITRARY OR CAPRICIOUS.
IN VIEW OF THE FACTS OF THIS CASE, WE BELIEVE THE AGENCY'S DECISION
TO DENY AN EXTENSION CANNOT BE CONSIDERED TO BE ARBITRARY OR CAPRICIOUS.
FOR EXAMPLE, THE PROCUREMENT WAS ADVERTISED NEARLY 4 MONTHS BEFORE THE
EXTENDED CLOSING DATE, AND THE SOLICITATION WAS ISSUED TO THE OFFERORS
NEARLY 3 MONTHS BEFORE THAT DATE. IN ADDITION, AS WE HAVE PREVIOUSLY
NOTED, FIVE OFFERS WERE ALREADY SUBMITTED BY THE TIME THE REQUEST FOR AN
EXTENSION WAS MADE (ULTIMATELY SEVEN TIMELY PROPOSALS WERE RECEIVED)
FROM FIRMS WHICH FOR THE MOST PART WERE SUBJECT TO THE SAME ADVERSE
WEATHER CONDITIONS. FINALLY, GRANTING 3M'S REQUEST FOR AN EXTENSION ON
THE DAY PROPOSALS WERE DUE COULD HAVE BEEN CONSIDERED UNFAIR TO THOSE
OFFERORS WHO SUCCESSFULLY ENDEAVORED TO SUBMIT THEIR OFFERS ON TIME.
PRESNELL-KIDD ASSOCIATES, B-191394, APRIL 26, 1978, 78-1 CPD 324.
THE PROTEST IS DENIED.
B-194480, JUN 29, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. AGENCY MAY CONSIDER OFFICIAL DOCUMENTS SUBMITTED AFTER BID
OPENING WHICH EXISTED AND WERE PUBLICLY AVAILABLE PRIOR TO BID OPENING
TO ESTABLISH SAMENESS OF DIFFERENT ENTITIES NAMED IN BID AND BID BOND.
2. ALTHOUGH BIDDER'S NAME IN BID APPEARS, IN PART, AS "K.W." RATHER
THAN "K-W", ITS OFFICIAL NAME, AND AN UNNECESSARY COMMA WAS ADDED TO
FIRM'S NAME IN BID BOND, THE DIFFERENCES IN PUNCTUATION ARE MATTERS OF
FORM WHICH DO NOT AFFECT THE FIRM'S IDENTITY. IN CIRCUMSTANCES, SURETY
SHOULD BE PERMITTED TO CORRECT PRINCIPAL'S NAME TO CONFORM TO THE NAME
AUTHORIZED IN THE STATE WHERE PERFORMANCE WILL OCCUR.
K-W CONSTRUCTION, INC.:
K-W CONSTRUCTION, INC., PROTESTS THE REJECTION OF ITS BID ON
INVITATION FOR BIDS (IFB) NO. DACA05-79-B-0060, ISSUED BY THE SACRAMENTO
DISTRICT, CORPS OF ENGINEERS (ARMY), FOR CONSTRUCTION AT MATHER AIR
FORCE BASE, CALIFORNIA.
THE ARMY REJECTED THE BID BECAUSE THE BIDDER'S NAME ON THE BID WAS
NOT IDENTICAL TO THE PRINCIPAL NAMED ON THE BID BOND. THE PRINCIPAL
NAMED ON THE BID BOND IS "K-W CONSTRUCTION, INC., 3751 MILL STREET,
RENO, NEVADA." THE BID FORM, THE "REPRESENTATIONS AND CERTIFICATIONS" TO
THE BID, AND AMENDMENT 0001 TO THE IFB ALL NAME THE BIDDER AS "K.W.
WESTERN CONSTRUCTORS," AT THE SAME ADDRESS.
SUBSEQUENT TO BID OPENING AND PRIOR TO AWARD THE PROTESTER HAS
ATTEMPTED TO SHOW THAT THE PRINCIPAL NAMED IN THE BOND IS THE SAME
ENTITY IDENTIFIED IN THE BID. THE RECORD CONTAINS A COPY OF THE
BIDDER'S AMENDED ARTICLES OF INCORPORATION WHICH SHOWS THE EXISTENCE OF
A NEVADA CORPORATION WITH THE NAME K-W CONSTRUCTION INC. MOREOVER, IN
JULY 1977 THE STATE OF CALIFORNIA ISSUED A CERTIFICATE OF QUALIFICATION
AUTHORIZING THE NEVADA CORPORATION, K-W CONSTRUCTION INC., TO DO
BUSINESS IN CALIFORNIA AS K-W WESTERN CONSTRUCTORS. WE NOTE THAT THESE
DOCUMENTS EXISTED AND WERE PUBLICLY AVAILABLE AT THE TIME OF BID OPENING
AND WE THINK SUCH EVIDENCE MAY BE SUBMITTED AFTER BID OPENING AND PRIOR
TO AWARD TO ESTABLISH THE SAMENESS OF THE ENTITIES NAMED IN THE BID AND
THE BID BOND. A SIMILAR EVIDENTIARY RULE HAS BEEN FOLLOWED WITH RESPECT
TO FURNISHING PROOF OF BIDDING AUTHORITY AFTER THE BID OPENING. CF.
JORDAN CONTRACTING COMPANY, ET AL., B-186836, SEPTEMBER 16, 1976, 76-2
CPD 250.
ALTHOUGH THE FIRST TWO LETTERS OF THE FIRM'S NAME AS IT APPEARS IN
THE BID ARE WRITTEN AS "K.W." RATHER THAN "K-W" AS PROVIDED IN THE
CALIFORNIA CERTIFICATE OF QUALIFICATION AND A COMMA IS ADDED TO THE
FIRM'S NAME IN THE BID BOND, THESE PUNCTUATION DIFFERENCES ARE MATTERS
OF FORM WHICH DO NOT AFFECT THE IDENTITY OF THE FIRM. IN OUR OPINION,
THE EVIDENCE SUBMITTED SHOWS THAT THE FIRM NAMED IN THE BID BOND IS THE
SAME FIRM IDENTIFIED IN THE BID.
IN THE CASE CITED BY THE CONTRACTING OFFICER IN SUPPORT OF HIS
POSITION, A. D. ROE COMPANY, INC., 54 COMP. GEN. 271 (1974), 74-2 CPD
194, A BID WAS SUBMITTED IN THE NAME OF ONE FIRM WHILE THE PRINCIPAL
NAMED ON THE ACCOMPANYING BID BOND WAS A JOINT VENTURE. WE HELD, IN
ACCORDANCE WITH ESTABLISHED CASE LAW, THAT THE JOINT VENTURE AND SINGLE
FIRM WERE NOT IDENTICAL ENTITIES AND THAT THE SURETY WOULD NOT BE BOUND
UPON THE DEFAULT OF THE BIDDER. WE FURTHER RECOGNIZED, HOWEVER, THAT A
BID COULD BE ACCEPTED, EVEN IF THE PRINCIPAL NAMED ON THE BOND DIFFERED
FROM THE NAMED BIDDER, IF THE BIDDER "WAS THE SAME LEGAL ENTITY AS THE
PRINCIPAL NAMED ON THE BID BOND." HERE, UNLIKE THE SITUATION IN ROE, WE
FIND THE PRINCIPAL ON THE BOND AND THE BIDDER TO BE THE SAME LEGAL
ENTITY. CONSEQUENTLY, WE SUSTAIN THE PROTEST.
WE NOTE THAT THE SURETY HAS INDICATED ITS WILLINGNESS TO RE-EXECUTE
THE BOND IN THE FIRM'S CALIFORNIA BUSINESS NAME. SINCE THE CONTRACT
WILL BE PERFORMED IN CALIFORNIA, THE DISCREPANCY SHOULD BE CORRECTED AND
AWARD MADE TO THE PROTESTER IF OTHERWISE PROPER. DEFENSE ACQUISITION
REGULATION SEC. 2-405 (1976 ED.).
B-195216, JUN 29, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
1. PROTEST QUESTIONING RESPONSIVENESS OF LOW BID IS DENIED AS LOW
BIDDER TOOK NO EXCEPTION TO ANY SOLICITATION REQUIREMENTS.
2. PROTEST CONCERNING LOW RESPONSIVE BIDDER'S ABILITY TO MEET
CONTRACTUAL REQUIREMENTS AT BID PRICE IS NOT FOR CONSIDERATION AS GAO
WILL NOT REVIEW AFFIRMATIVE DETERMINATION OF RESPONSIBILITY EXCEPT IN
CIRCUMSTANCES NOT APPLICABLE HERE.
INDUSTRIAL MAINTENANCE SERVICES, INC.:
INDUSTRIAL MAINTENANCE SERVICES, INC. (INDUSTRIAL), PROTESTS THE
PROPOSED AWARD OF A REQUIREMENTS CONTRACT BY THE DEPARTMENT OF THE ARMY
TO STARLITE SERVICES, INC. (STARLITE), THE LOW BIDDER UNDER INVITATION
FOR BIDS (IFB) NO. DABT10-79-B-0099 FOR CUSTODIAL SERVICES AT FORT
BENNING, GEORGIA, FROM JULY 1, 1979, THROUGH JUNE 30, 1980. INDUSTRIAL
CONTENDS THAT STARLITE'S BID OF $531,261.94 IS SO LOW THAT IT CANNOT
REFLECT WHAT INDUSTRIAL CALCULATES TO BE THE "ABSOLUTE MINIMUM" NUMBER
OF EMPLOYEES REQUIRED TO PERFORM THE SERVICES. INDUSTRIAL, THE FOURTH
LOW BIDDER AT $629,155.61, ALSO MAKES THE SAME ARGUMENT WITH RESPECT TO
THE SECOND AND THIRD LOW BIDDERS.
THIS CASE IS ONE IN WHICH IT IS CLEAR FROM THE PROTESTER'S INITIAL
SUBMISSION THAT THE PROTEST IS WITHOUT LEGAL MERIT, AND WE WILL DECIDE
THE MATTER ON THE BASIS OF THIS SUBMISSION WITHOUT REQUESTING AN AGENCY
REPORT. SEE E.G. FIRE & TECHNICAL EQUIPMENT CORP., B-192408, AUGUST 4,
1978, 78-2 CPD 91.
THE SOLICITATION'S SCHEDULE LISTED 16 ITEMS OF SERVICES, AND AN
ESTIMATED NUMBER OF SQUARE FEET FOR EACH. ITEMS 1 THROUGH 9 REQUIRED
REFERENCE TO THE IFB'S "PERFORMANCE SCHEDULES" FOR THE CUSTODIAL
SERVICES, THEIR FREQUENCIES, AND BUILDINGS INVOLVED WITH RESPECT TO EACH
ITEM. PARAGRAPH 9 OF IFB SECTION F, "DESCRIPTION/SPECIFICATIONS,"
REQUIRED SEPARATE WORK FORCES FOR EACH OF TWO OF THE NUMEROUS BUILDINGS
TO BE SERVICED, AND THAT THE CONTRACTOR PROVIDE AN "ADEQUATE" NUMBER OF
WORKERS DURING PERFORMANCE, THE PARAGRAPH CONTAINED THREE TABLES TO SHOW
THE NUMBER OF WORKERS THAT WAS CONSIDERED "ADEQUATE" ACCORDING TO THE
SQUARE FOOTAGE INVOLVED.
A BIDDER WAS ONLY TO INSERT ON THE SCHEDULE UNIT PRICES FOR THE 16
ITEMS; IT WAS NOT REQUIRED TO INDICATE THE METHOD USED TO ARRIVE AT THE
PRICES, OR THE NUMBER OF PERSONNEL THE BIDDER INTENDED TO USE IN
CONTRACT PERFORMANCE. AWARD WOULD BE MADE ON THE BASIS OF THE LOW
AGGREGATE BID FOR ALL ITEMS.
INDUSTRIAL SUGGESTS THAT IF ONE CALCULATES THE NUMBER OF PERSONNEL
NECESSARY TO CONSTITUTE AN "ADEQUATE" WORKFORCE FOR AN ITEM PURSUANT TO
THE TABLES IN IFB SECTION F, AND CONSIDERS SERVICE FREQUENCY, A UNION
AGREEMENT THAT ALLEGEDLY PRESCRIBES THE NUMBER OF HOURS PER WEEK THAT A
UNION MEMBER MUST WORK, LABOR COSTS, AND OTHER FACTORS, THE RESULT WOULD
BE A BID PRICE SUBSTANTIALLY HIGHER THAN STARLITE'S. INDUSTRIAL ARGUES
THAT THE CALCULATIONS SHOW THAT STARLITE MUST NOT INTEND TO MEET THE
WORKFORCE REQUIREMENT.
HOWEVER, INDUSTRIAL PRESENTS NO EVIDENCE THAT STARLITE'S BID ACTUALLY
INDICATES THAT THE FIRM HAS TAKEN EXCEPTION TO ANY OF THE SOLICITATION'S
REQUIREMENTS. THE BID THEREFORE MUST BE CONSIDERED "RESPONSIVE," I.E.,
IT REPRESENTS AN OFFER TO PERFORM THE EXACT THING CALLED FOR IN THE IFB.
49 COMP. GEN. 553, 556 (1970). THE QUESTION OF WHETHER STARLITE HAS
THE APPARENT ABILITY TO DO SO INVOLVES THE FIRM'S RESPONSIBILITY,
DEFENSE ACQUISITION REGULATION SECTION 1, PART 9 (1976 ED.), AND WE HAVE
BEEN INFORMALLY ADVISED BY THE ARMY THAT STARLITE HAS BEEN DETERMINED TO
BE A RESPONSIBLE FIRM. OUR OFFICE DOES NOT REVIEW PROTESTS AGAINST
AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD ON THE
PART OF PROCURING OFFICIALS IS ALLEGED, OR THE SOLICITATION CONTAINS
DEFINITIVE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN
APPLIED. MEYERS INDUSTRIES, INC., B-192128, JULY 21, 1978, 78-2 CPD 60.
NEITHER EXCEPTION IS APPLICABLE HERE.
ACCORDINGLY, ACCEPTANCE BY THE ARMY OF STARLITE'S BID WOULD
EFFECTIVELY BIND THE FIRM TO PERFORM IN ACCORDANCE WITH THE INVITATION'S
REQUIREMENTS AT THE CONTRACT PRICES. EDW. KOCHARIAN & COMPANY, INC., 58
COMP. GEN. 214 (1979), 79-1 CPD 20. WHETHER OR NOT STARLITE IN FACT
PROVIDES AN "ADEQUATE" NUMBER OF PERSONNEL DURING PERFORMANCE IS A
MATTER OF CONTRACT ADMINISTRATION, AND IS NOT FOR OUR CONSIDERATION.
VIRGINIA-MARYLAND ASSOCIATES, B-191252, MARCH 28, 1978, 78-1 CPD 238.
THE PROTEST IS SUMMARILY DENIED IN PART AND SUMMARILY DISMISSED IN
PART.
B-194635, JUN 28, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
GENERAL ACCOUNTING OFFICE WILL NOT DECIDE MATTER WHERE MATERIAL ISSUE
INVOLVED IS SUBJECT TO LITIGATION BEFORE COURT OF COMPETENT
JURISDICTION.
PRECISION ANALYTICAL LABORATORIES:
PRECISION ANALYTICAL LABORATORIES, INC. (PAL), FILED A PROTEST WITH
THIS OFFICE CONCERNING SOLICITATION NO. 0074-AA-65-0-9-BM ISSUED BY THE
DISTRICT OF COLUMBIA GOVERNMENT (DC) FOR ON-SITE LABORATORY URINALYSIS
(DRUG DETECTION) SERVICES FOR THE D. C. SUPERIOR COURT. THE PROTEST IS
THE LATEST IN A SERIES OF PROTESTS INVOLVING SIMILAR DC PROCUREMENTS.
PERTINENT HISTORY OF THE MATTER IS CONTAINED IN OUR DECISION PRECISION
ANALYTICAL LABORATORIES, B-188627, OCTOBER 10, 1978, 78-2 CPD 262.
PAL CONTENDS THAT DC CONTINUES TO DISCRIMINATE AGAINST THAT
CORPORATION BY WITHHOLDING PREAWARD QUALIFICATION TEST SCORES WHICH, IT
ASSERTS, WOULD SHOW PAL PASSED AND THE ONLY OTHER BIDDER, B & W STAT
LABORATORY, INC. (B & W), FAILED. PAL ALLEGES ITS BID WAS $79,976 AND B
& W'S WAS $154,934, AND THUS IT IS ENTITLED TO THE AWARD.
PAL HAS ALSO SOUGHT JUDICIAL RELIEF IN THE DISTRICT OF COLUMBIA
SUPERIOR COURT, CIVIL ACTION NO. 4551-79. THE ISSUES BEFORE THE COURT
ARE SUBSTANTIALLY THE SAME AS THOSE RAISED IN THE PROTEST BEFORE THIS
OFFICE.
A PROTEST WILL NOT BE DECIDED BY THIS OFFICE WHERE THE MATERIAL
ISSUES ARE PENDING BEFORE A COURT OF COMPETENT JURISDICTION UNLESS THE
COURT REQUESTS, EXPECTS, OR OTHERWISE EXPRESSES AN INTEREST IN OUR
DECISION. DONLEY, RICHARDSON AND ASSOCIATES, B-190772, JANUARY 10,
1978, 78-1 CPD 20; ALTON IRON WORKS, INC., B-191899, AUGUST 30, 1978,
78-2 CPD 156. WE HAVE RECEIVED NOTHING TO INDICATE SUCH JUDICIAL
INTEREST.
ACCORDINGLY, WE WILL TAKE NO FURTHER ACTION ON THE MATTER.
B-194957, JUN 28, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
PROTEST AGAINST WAGE RATE DETERMINATION INCLUDED IN SOLICITATION
FILED AFTER BID OPENING IS UNTIMELY.
BUCKS COUNTY ASSOCIATION FOR THE BLIND:
BUCKS COUNTY ASSOCIATION FOR THE BLIND (BUCKS COUNTY) PROTESTS ANY
AWARD OF CONTRACTS UNDER INVITATIONS FOR BIDS DLA-13H-79B-8440 AND
DLA-13H-79B-8465, ISSUED BY THE DEFENSE LOGISTICS AGENCY. BUCKS COUNTY
CONTENDS THAT THE DEPARTMENT OF LABOR WAGE RATE DETERMINATION INCLUDED
WITH THE SOLICITATIONS SHOULD HAVE SPECIFIED A UNIFORM NATIONWIDE RATE
RATHER THAN THE DIFFERENT RATES PREVAILING IN THE LOCALITIES WHERE THE
SERVICES WILL BE PERFORMED. FOR THE FOLLOWING REASONS, BUCKS COUNTY'S
PROTEST IS UNTIMELY UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20
(1978).
PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN A SOLICITATION WHICH ARE
APPARENT PRIOR TO BID OPENING MUST BE FILED BEFORE THAT DATE. 4 C.F.R.
SEC. 20.2(B)(1). THE PROTESTER'S OBJECTION TO THE WAGE DETERMINATION
WAS APPARENT UPON RECEIPT OF THE SOLICITATIONS AND AMENDMENTS. BIDS FOR
BOTH SOLICITATIONS WERE OPENED ON MAY 10, 1979. SINCE BUCKS COUNTY
FIRST FILED A PROTEST ON MAY 24, THE MATTER WAS UNTIMELY RAISED AND WILL
NOT BE CONSIDERED ON ITS MERITS.
ALTHOUGH WE HAVE NOT CONSIDERED BUCKS COUNTY'S PROTEST ON THE MERITS,
WE POINT OUT THAT THE SERVICE CONTRACT ACT (41 U.S.C. SEC. 351 ET SEQ.
(1976)) APPEARS TO REQUIRE PAYMENT OF WAGE RATES BASED ON THE LOCALITY
WHERE THE SERVICES ARE TO BE PERFORMED. SEE 53 COMP. GEN. 370 (1973)
AND THE CAGE COMPANY OF ABILENE, INC., 57 COMP. GEN. 549 (1978), 78-1
CPD 430.
THE PROTEST IS DISMISSED.
B-196633, JAN 4, 1979
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE CLASSIFIED AS GRADE GS-7 ALLEGES THAT HE PERFORMED
HIGHER-GRADE GS-9 DUTIES FROM 1974 TO 1978 FOR WHICH HE WAS NOT PAID.
HIS CLAIM FOR RETROACTIVE PROMOTION WITH BACKPAY IS DENIED. RECORD
FAILS TO SHOW HE WAS DETAILED TO ESTABLISHED HIGHER-GRADED POSITION.
CLAIMS PRESENTED TO GAO ARE CONSIDERED ON BASIS OF WRITTEN RECORD AND
BURDEN OF PROOF IS ON CLAIMANTS TO ESTABLISH LIABILITY OF UNITED STATES.
OSCAR G. ADAMS - CLAIM FOR RETROACTIVE PROMOTION AND BACKPAY:
THIS DECISION IS ON THE APPEAL OF MR. OSCAR G. ADAMS OF OUR CLAIMS
DIVISION SETTLEMENT DATED AUGUST 23, 1979 (Z-2811309). THE SETTLEMENT
DENIED HIS CLAIM FOR A RETROACTIVE TEMPORARY PROMOTION AND BACKPAY. FOR
THE REASONS STATED BELOW WE SUSTAIN THE SETTLEMENT.
MR. ADAMS OCCUPIED A GS-7 POSITION CLASSIFIED AS A CIVIL ENGINEERING
TECHNICIAN AT THE MARINE CORPS AIR STATION, BEAUFORT, SOUTH CAROLINA.
HE STATES THAT HE PERFORMED THE HIGHER-GRADED DUTIES OF A GS-9 DURING
THE PERIOD AUGUST 26, 1974, TO JANUARY 1, 1978. THUS, HE CONTENDS HE IS
ENTITLED TO A TEMPORARY PROMOTION AND BACKPAY ON THE BASIS OF OUR
TURNER-CALDWELL DECISIONS, 55 COMP. GEN. 539 (1975) AND 56 ID. 427
(1977), WHICH HELD THAT EMPLOYEES ARE ENTITLED TO TEMPORARY PROMOTIONS
FOR EXTENDED DETAILS TO ESTABLISHED CLASSIFIED HIGHER-LEVEL POSITIONS,
PROVIDED THEY MEET CERTAIN REQUIREMENTS.
THE RECORD DOES INDICATE THAT THERE WAS A GS-9 POSITION IN EFFECT AT
THE MARINE CORPS AIR STATION FOR A CIVIL ENGINEERING TECHNICIAN
(DRAFTING). HOWEVER, THAT POSITION WAS SUPERSEDED ON AUGUST 7, 1974.
IT IS UNKNOWN WHAT POSITION SUPERSEDED IT AND THE GS-7 POSITION CONTAINS
A DATE OF FEBRUARY 24, 1977. THUS, THERE IS SOME DOUBT IN THE RECORD AS
TO WHETHER OR NOT THERE WAS AN ESTABLISHED HIGHER-GRADED CLASSIFIED
POSITION TO WHICH MR. ADAMS COULD HAVE BEEN ASSIGNED. SEE GLEN E.
SILVEY, B-192642, MARCH 1, 1979.
ALL CLAIMS ARE CONSIDERED ON THE BASIS OF THE WRITTEN RECORD, AND THE
BURDEN OF PROOF IS ON THE CLAIMANTS TO ESTABLISH THE LIABILITY OF THE
UNITED STATES AND THE CLAIMANTS' RIGHT TO PAYMENT. 4 C.F.R. SEC. 31.7;
RONALD J. BEACH, B-195480, NOVEMBER 8, 1979. WITH REGARD TO WHAT
CONSTITUTES ACCEPTABLE PROOF OF A DETAIL, PARAGRAPH 8F OF CIVIL SERVICE
COMMISSION BULLETIN 300-40, STATES THAT ACCEPTABLE DOCUMENTATION
INCLUDES OFFICIAL PERSONNEL DOCUMENTS OR OFFICIAL MEMORANDA, A DECISION
UNDER ESTABLISHED GRIEVANCE PROCEDURES, OR A WRITTEN STATEMENT FROM THE
PERSON WHO SUPERVISED THE EMPLOYEE DURING THE PERIOD IN QUESTION OR
OTHER MANAGEMENT OFFICIAL FAMILIAR WITH THE WORK, CERTIFYING THAT TO HIS
OR HER PERSONAL KNOWLEDGE THE EMPLOYEE PERFORMED THE DUTIES OF THE
PARTICULAR ESTABLISHED CLASSIFIED POSITION FOR THE PERIOD CLAIMED.
THERE ARE NO OFFICIAL RECORDS OF ANY DETAIL OF MR. ADAMS TO A
HIGHER-GRADED CLASSIFIED POSITION. HE HAS MERELY STATED THAT HE
PERFORMED SUCH DUTIES. HE HAS, THEREFORE, FAILED TO MEET THE BURDEN OF
PROOF NECESSARY TO ESTABLISH LIABILITY ON THE PART OF THE UNITED STATES.
ACCORDINGLY, WE SUSTAIN OUR CLAIMS DIVISION DETERMINATION DENYING MR.
ADAMS' CLAIM FOR A RETROACTIVE TEMPORARY PROMOTION AND BACKPAY.
B-195628, JAN 3, 1979
HEADNOTES-UNAVAILABLE
OFFICE OF GENERAL COUNSEL
EUGENE V. ATKINSON, UNITED STATES HOUSE OF REPRESENTATIVES:
FURTHER REFERENCE IS MADE TO YOUR COMMUNICATION DATED NOVEMBER 5,
1979, FORWARDING CORRESPONDENCE FROM MR. RICHARD D. SCHWARZ REGARDING
THE NATIONAL GUARD BUREAU POLICY WITH RESPECT TO THE PERFORMANCE OF
CIVILIAN DUTY AND ACTIVE DUTY BY AIR TECHNICIANS ON THE SAME CALENDAR
DAY.
WE ENCLOSE A COPY OF A LETTER TO MR. SCHWARZ EXPLAINING THE DECISION
52 COMP. GEN. 471 (1949) AND INFORMING HIM THAT POLICY DETERMINATIONS
CONCERNING THE USE OF NATIONAL GUARD TECHNICIANS IN THEIR CIVILIAN
CAPACITY AND ON ACTIVE DUTY MILITARY ASSIGNMENTS ARE PRIMARILY FOR
DETERMINATION BY THE BUREAU.
THE CORRESPONDENCE FORWARDED BY YOU IS RETURNED AS REQUESTED.
WE TRUST THAT THIS WILL SERVE THE PURPOSE OF YOUR INQUIRY.
B-149858, OCT 12, 1978
HEADNOTES-UNAVAILABLE
DIGEST:
NATIONAL BUREAU OF STANDARDS FINANCES OPERATIONS IN PART BY CHARGES
TO USERS OF ITS SERVICES, PAID INTO WORKING CAPITAL FUND. EARNED NET
INCOME OF THE FUND MUST BE PAID INTO TREASURY ANNUALLY, EXCEPT THAT IT
"MAY BE APPLIED FIRST TO RESTORE ANY PRIOR IMPAIRMENT" OF THE FUND. 15
U.S.C. SEC. 278B (1976). IMPAIRMENTS CONTEMPLATED BY THIS PROVISION ARE
OPERATING LOSSES. BUREAU MAY NOT RETAIN PROFITS TO OFFSET INCREASED
COSTS - CAUSED BY INFLATION - OF REPLACING EQUIPMENT OR FACILITIES, NOR
CAN BUREAU CALCULATE DEPRECIATION OF EQUIPMENT AND FACILITIES BASED ON
REPLACEMENT COST.
DEFINITION OF "IMPAIRMENT" IN 15 U.S.C. SEC. 278B(F):
THIS DECISION IS IN RESPONSE TO A MEMORANDUM FROM DAVID S. NATHAN,
CONTROLLER OF THE DEPARTMENT OF COMMERCE ASKING WHETHER THE TERM "PRIOR
IMPAIRMENT," AS USED IN 15 U.S.C. SEC. 278B(F) COULD INCLUDE IMPAIRMENT
CAUSED BY INFLATION.
THE NATIONAL BUREAU OF STANDARDS, DEPARTMENT OF COMMERCE (NBS),
PERFORMS SERVICES FOR THE UNITED STATES GOVERNMENT, STATE OR MUNICIPAL
GOVERNMENTS, AND OTHERS. IT IS AUTHORIZED TO CHARGE FOR THESE SERVICES
BASED ON FIXED PRICES OR COSTS. 15 U.S.C. SECS. 273, 275 (1976). NBS
FINANCES ITS ACTIVITIES WITH A WORKING CAPITAL FUND ESTABLISHED BY
STATUTE. THE STATUTE REQUIRES THAT THE AMOUNT OF ANY EARNED NET INCOME
RESULTING FROM THE OPERATION OF THE WORKING CAPITAL FUND (NBSWCF) AT THE
CLOSE OF EACH FISCAL YEAR BE PAID INTO THE GENERAL FUND OF THE TREASURY.
HOWEVER, PRIOR TO SUCH DEPOSIT, THE NET INCOME MAY BE APPLIED FIRST TO
"RESTORE ANY PRIOR IMPAIRMENT OF THE FUND." 15 U.S.C. SEC. 278B(F)
(1976).
EQUIPMENT OR FACILITIES ACQUIRED FOR CARRYING OUT FUNCTIONS OF NBSWCF
ARE CAPITALIZED TO THE FUND AND THEIR COST ALLOCATED BY INCLUDING AN
AMOUNT FOR DEPRECIATION, IN FEES CHARGED USERS. HOWEVER, DUE TO
INFLATION, THE AMOUNTS RECOVERED ARE INSUFFICIENT TO PERMIT REPLACEMENT
OF THE EQUIPMENT OR FACILITIES AT THE END OF THEIR USEFUL LIVES.
THEREFORE, THE CONTROLLER ASKS WHETHER THE PHRASE, "TO RESTORE ANY PRIOR
IMPAIRMENT," CAN BE INTERPRETED TO MEAN IMPAIRMENT CAUSED BY INFLATION,
AND WHETHER THE NBSWCF MAY RETAIN PROFITS TO OFFSET INCREASED COSTS IN
REPLACING EQUIPMENT OR FACILITIES. FOR THE FOLLOWING REASONS, OUR
ANSWER IS NO TO BOTH THE QUESTIONS ASKED.
THE INQUIRY ASSUMES THAT THE INCREASED COST OF EQUIPMENT IS THE
RESULT OF INFLATION AND NOT ATTRIBUTABLE TO OTHER FACTORS (E.G., PRODUCT
IMPROVEMENT) AND ALSO THAT NBS WILL STILL HAVE A NEED FOR THE EQUIPMENT
OR FACILITY AT THE END OF ITS USEFUL LIFE (I.E., THAT IT WILL IN FACT BE
REPLACED.) SUCH ASSUMPTIONS MIGHT NOT BE WARRANTED IN EVERY CASE.
HOWEVER, WE DIRECT THE FOLLOWING DISCUSSION TO THOSE CASES WHERE SUCH
ASSUMPTIONS ARE CORRECT.
"IMPAIRMENT" IS NOT A WORD OF ART WITH A WELL-DEFINED MEANING IN THE
PRACTICE OF ACCOUNTING. THE DICTIONARY DEFINITION OF "IMPAIR" IS TO
"MAKE WORSE; TO DIMINISH IN QUANTITY, VALUE, EXCELLENCE OR STRENGTH;
TO DO HARM TO." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE
ENGLISH LANGUAGE, UNABRIDGED (SPRINGFIELD, MASS., G&C. MERRIAM CO.,
1966), P. 1031. WHILE IT COULD BE ARGUED THAT THE CONGRESS, BY
APPROPRIATING A SPECIFIC AMOUNT OF MONEY TO ESTABLISH A WORKING CAPITAL
FUND, INTENDED THAT THE AMOUNT IN THE FUND BE PERIODICALLY REDETERMINED
TO REFLECT CHANGES IN THE VALUE OF THE DOLLAR (UP OR DOWN) SO THAT THE
BUYING POWER OF THE FUND COULD REMAIN CONSTANT VIS-A-VIS PRICE LEVELS ON
THE DATE OF ITS ESTABLISHMENT, WE DOUBT THAT THE CONGRESS WOULD IMPOSE
SUCH A COMPLEX ACCOUNTING REQUIREMENT ON AGENCIES WITHOUT EXPRESSLY
STATING SUCH AN INTENTION. THUS WE DOUBT THAT THE IMPAIRMENT
CONTEMPLATED WAS THE LESSENING OF THE VALUE OF THE FUND BY MEANS OF A
LESSENING IN THE VALUE OF THE DOLLAR. HOWEVER, THIS IS IN EFFECT WHAT
NBS IS SUGGESTING IN ITS PROPOSAL.
THE NBSWCF WAS INITIALLY ESTABLISHED BY THE DEFICIENCY APPROPRIATION
ACT OF 1950, APPROVED JUNE 29, 1950, 64 STAT. 279, AND FUNDED IN THE
AMOUNT OF $3 MILLION. (AS A RESULT OF SUBSEQUENT APPROPRIATIONS BY THE
CONGRESS, THE NBSWCF IS NOW CAPITALIZED IN THE AMOUNT OF $24.3 MILLION.)
SUBSEQUENTLY, THIS PROVISION WAS AMENDED AND ADDED TO THE ORGANIC ACT OF
THE NBS (ACT OF MARCH 3, 1901, CH. 872, 31 STAT. 1449), BY SECTION 2 OF
THE ACT OF AUGUST 3, 1956, CH. 906, 70 STAT. 959 (1956 ACT), 15 U.S.C.
SEC. 278B (1976).
SECTION 3 OF THE NBS ORGANIC ACT, AS AMENDED BY THE 1956 ACT,
PROVIDES IN PERTINENT PART AS FOLLOWS:
"THE BUREAU SHALL EXERCISE ITS FUNCTIONS FOR THE GOVERNMENT OF THE
UNITED STATES AND FOR INTERNATIONAL ORGANIZATIONS OF WHICH THE UNITED
STATES IS A MEMBER; FOR GOVERNMENTS OF FRIENDLY COUNTRIES; FOR ANY
STATE OR MUNICIPAL GOVERNMENT WITHIN THE UNITED STATES; OR FOR ANY
SCIENTIFIC SOCIETY, EDUCATIONAL INSTITUTION, FIRM, CORPORATION, OR
INDIVIDUAL WITHIN THE UNITED STATES OR FRIENDLY COUNTRIES ENGAGED IN
MANUFACTURING OR OTHER PURSUITS REQUIRING THE USE OF STANDARDS OR
STANDARD MEASURING INSTRUMENTS ***." 15 U.S.C. SEC. 273 (1976).
SECTION 7 OF THE ORGANIC ACT, AS AMENDED BY THE 1956 ACT, REQUIRES
THE SECRETARY OF COMMERCE TO:
"*** CHARGE FOR SERVICES PERFORMED UNDER THE AUTHORITY OF SECTION 273
OF THIS TITLE, EXCEPT IN CASES WHERE HE DETERMINES THAT THE INTEREST OF
THE GOVERNMENT WOULD BE BEST SERVED BY WAIVING THE CHARGE. SUCH CHARGES
MAY BE BASED UPON FIXED PRICES OR COSTS. THE APPROPRIATION OR FUND
BEARING THE COST OF THE SERVICES MAY BE REIMBURSED, OR THE SECRETARY MAY
REQUIRE ADVANCE PAYMENT SUBJECT TO SUCH ADJUSTMENT ON COMPLETION OF THE
WORK AS MAY BE AGREED UPON." 15 U.S.C. SEC. 275A (1976).
SECTION 12 OF THE ORGANIC ACT, AS AMENDED BY THE 1956 ACT, PROVIDES
IN PERTINENT PART THAT:
"(D) CREDITS.
"THE FUND MAY BE CREDITED WITH ADVANCES AND REIMBURSEMENTS, INCLUDING
RECEIPTS FROM NON-FEDERAL SOURCES, FOR SERVICES PERFORMED UNDER THE
AUTHORITY OF SECTION 273 OF THIS TITLE.
"(E) COST DEFINED.
"AS USED IN THIS CHAPTER, THE TERM 'COST' SHALL BE CONSTRUED TO
INCLUDE DIRECTLY RELATED EXPENSES AND APPROPRIATE CHARGES FOR INDIRECT
AND ADMINISTRATIVE EXPENSES.
"(F) DISTRIBUTION OF EARNINGS; RESTORATION OF PRIOR IMPAIRMENT.
"THE AMOUNT OF ANY EARNED NET INCOME RESULTING FROM THE OPERATION OF
THE FUND AT THE CLOSE OF EACH FISCAL YEAR SHALL BE PAID INTO THE GENERAL
FUND OF THE TREASURY: PROVIDED, THAT SUCH EARNED NET INCOME MAY BE
APPLIED FIRST TO RESTORE ANY PRIOR IMPAIRMENT OF THE FUND." 15 U.S.C.
SEC. 278B (1976).
IN EXPLAINING THE ADDITION OF SUBSECTIONS 12(D), (E) AND (F) TO THE
NBS ORGANIC ACT, THE REPORT OF THE SENATE INTERSTATE AND FOREIGN
COMMERCE COMMITTEE, STATES IN PERTINENT PART THAT:
"SUBSECTION (D) WILL ALSO PROVIDE AUTHORITY, NOT NOW PROVIDED, TO
MAKE PAYMENTS TO THE FUND IN ADVANCE OF PERFORMANCE OF SERVICES. THIS
AUTHORITY WILL ENABLE THE BUREAU TO AVOID SHORTAGES IN OPERATING CASH
WITHOUT RECEIVING ADDITIONAL APPROPRIATIONS TO INCREASE THE WORKING
CAPITAL. DURING PERIODS OF EMERGENCY INCREASES IN PROGRAM ACTIVITY, THE
BUREAU HAS BEEN FACED WITH A SERIOUS SHORTAGE OF OPERATING CASH WHICH
OCCASIONALLY HAS NECESSITATED DELAYS IN PAYMENT OF VOUCHERS FOR SERVICES
RECEIVED.
"SUBSECTION (E) PRESENTS A MORE GENERAL DEFINITION OF THE TERM 'COST'
THAN IS PRESENTLY INCORPORATED IN THE AUTHORITY FOR THE USE OF THE FUND.
THE ACT WHICH ORIGINALLY ESTABLISHED THE WORKING CAPITAL FUND PROVIDED
THAT REIMBURSEMENTS SHALL INCLUDE HANDLING AND RELATED CHARGES, RESERVES
FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE, AND BUILDING
CONSTRUCTION AND ALTERATIONS DIRECTLY RELATED TO THE WORK FOR WHICH
REIMBURSEMENT IS MADE. SUBSECTION (E) WILL PERMIT THE INCLUSION OF ANY
OR ALL OF THESE ELEMENTS IN THE DETERMINATION OF COSTS OF SERVICES
PERFORMED BUT WOULD NOT PRECLUDE THE CHARGING OF OTHER ITEMS.
ACCORDINGLY, THE ACCOUNTING SYSTEM TO BE FOLLOWED IN CONNECTION WITH THE
USE OF THE WORKING CAPITAL FUND WOULD BE LEFT TO THE ADMINISTRATIVE
DISCRETION OF THE DEPARTMENT OF COMMERCE, SUBJECT, OF COURSE, TO THE
REQUIREMENTS OF THE BUREAU OF THE BUDGET, THE TREASURY DEPARTMENT, AND
THE COMPTROLLER GENERAL.
"SINCE A SIGNIFICANT PART OF THE WORK PERFORMED BY THE BUREAU WOULD
BE PAID FOR ON THE BASIS OF FIXED PRICES OR FEES, THE PROCEDURE FOR
HANDLING SURPLUSES OR DEFICITS IN THE CAPITAL OF THE FUND IS NEEDED.
SUBSECTION (F) PROVIDES FOR THE DEPOSITING OF ANY EARNED NET INCOME IN
THE GENERAL FUND OF THE TREASURY AFTER FIRST RESTORING ANY DEFICIT IN
WORKING CAPITAL DUE TO PRIOR OPERATING LOSSES." S. REP. NO. 1171, 84TH
CONG., 1ST SESS., P. 4 (1955).
THUS THE "IMPAIRMENT OF THE FUND" CONTEMPLATED APPEARS TO BE THE
OPERATING LOSSES SUSTAINED BY PROVIDING SERVICES TO OTHER AGENCIES AT A
FIXED PRICE WHICH MIGHT NOT RECOVER THE TOTAL COST OF PERFORMING THE
SERVICE. SEE ALSO HEARINGS BEFORE A SUBCOMMITTEE OF THE SENATE
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE ON S. 2060, 84TH CONG., 1ST
SESS. 8 (1955). FURTHERMORE, THIS INTERPRETATION IS CONSISTENT WITH THE
EARLIER LAW AND LEGISLATIVE HISTORY DEALING WITH THE OPERATION OF
WORKING FUNDS. FOR EXAMPLE, CONGRESS IMPOSED ON THE BUREAU OF ENGRAVING
AND PRINTING FUND, ESTABLISHED UNDER SECTION 2 OF THE ACT OF AUGUST 4,
1950, CH. 558, 64 STAT. 409, THE FOLLOWING REQUIREMENT:
"(E) ANY SURPLUS ACCRUING TO THE FUND IN ANY FISCAL YEAR SHALL BE PUT
INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS DURING
THE ENSUING FISCAL YEAR: PROVIDED, THAT ANY SUCH SURPLUS MAY BE APPLIED
FIRST TO RESTORE ANY IMPAIRMENT OF THE CAPITAL OF THE FUND BY REASON OF
VARIATIONS BETWEEN THE PRICES CHARGED FOR WORK OR SERVICES AND THE
AMOUNT DETERMINED TO BE THE ACTUAL COST OF PERFORMING SUCH WORK OR
SERVICES." 31 U.S.C. SEC. 181A (1970).
ALSO, WHEN THE TREASURY GENERAL SUPPLY FUND WAS RECONSTITUTED INTO
THE GENERAL SERVICES ADMINISTRATION GENERAL SUPPLY FUND BY SECTION 109
OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949,
APPROVED JUNE 30, 1949, CH. 288, 63 STAT. 382, THE CONGRESS PROVIDED IN
PERTINENT PART THAT:
"(E) ANNUAL AUDIT; SURPLUS; REPORT TO CONGRESS.
"THE COMPTROLLER GENERAL OF THE UNITED STATES SHALL MAKE AN ANNUAL
AUDIT OF THE GENERAL SUPPLY FUND AS OF JUNE 30, AND THERE SHALL BE
COVERED INTO THE UNITED STATES TREASURY AS MISCELLANEOUS RECEIPTS ANY
SURPLUS FOUND THEREIN, ALL ASSETS, LIABILITIES, AND PRIOR LOSSES
CONSIDERED, ABOVE THE AMOUNTS TRANSFERRED OR APPROPRIATED TO ESTABLISH
AND MAINTAIN SAID FUND, AND THE COMPTROLLER GENERAL SHALL REPORT TO THE
CONGRESS ANNUALLY THE RESULTS OF THE AUDIT, TOGETHER WITH SUCH
RECOMMENDATIONS AS HE MAY HAVE REGARDING THE STATUS AND OPERATIONS OF
THE FUND." 40 U.S.C. SEC. 756 (1970).
SECTION 109 OF THE 1949 ACT ORIGINATED IN S. 2020 AS REPORTED BY THE
SENATE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS. SEE H.R.
REP. NO. 935, 81ST CONG., 1ST SESS. 33 (1949).
IN COMMENTING ON SECTION 109, THE REPORT OF THE SENATE COMMITTEE ON
EXPENDITURES IN THE EXECUTIVE DEPARTMENTS STATES, IN PERTINENT PART AS
FOLLOWS:
"(E) THIS SUBSECTION ALTERS THE PREVIOUS REQUIREMENT THAT ALL SURPLUS
IN THE FUND, AS DETERMINED IN THE ANNUAL AUDIT BY THE COMPTROLLER
GENERAL, MUST BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, BY
PERMITTING LOSSES INCURRED BY THE FUND IN PRIOR YEARS, AS WELL AS ALL
ASSETS AND LIABILITIES, TO BE CONSIDERED IN ASCERTAINING THE AMOUNT OF
SUCH SURPLUS. THIS CHANGE TAKES COGNIZANCE OF THE FACT THAT SUCH PRIOR
LOSSES REPRESENT IMPAIRMENTS OF THE FUND CAPITAL, UNLESS MADE GOOD FROM
EARNINGS, AND ALSO WILL COUNTERACT ANY TENDENCY TO ESTABLISH PRICES AT
TOO HIGH A LEVEL. ALSO, THERE IS ADDED THE REQUIREMENT THAT THE
COMPTROLLER GENERAL REPORT TO THE CONGRESS ANNUALLY THE RESULTS OF THE
AUDIT. SUCH REPORTS, AND HIS RECOMMENDATIONS AS TO THE STATUS AND
OPERATIONS OF THE FUND, SHOULD BE HELPFUL TO THE CONGRESS IN ITS
CONSIDERATION OF SUPPLY ACTIVITIES." S. REP. NO. 475, 81ST CONG., 1ST
SESS. 11 (1949).
SEE ALSO THE CIVIL SERVICE COMMISSION REVOLVING FUND ESTABLISHED BY
THE THIRD SUPPLEMENTAL APPROPRIATION ACT OF 1952, ACT OF JUNE 5, CH.
369, 66 STAT. 107. THUS IT IS CLEAR THAT THE CONGRESS, PRIOR TO
ADOPTION OF THE 1956 ACT, USED "IMPAIRMENT" TO INDICATE THE DETRIMENT TO
THE WORKING CAPITAL FUND IF REIMBURSEMENTS BASED ON FIXED FEES FAILED TO
RECOVER THE FULL COST OF PROVIDING THE SERVICE. WE THEREFORE FIND NO
BASIS FOR NBS TO RETAIN PROFITS IN ORDER TO OFFSET INCREASED REPLACEMENT
COSTS.
THE DEFICIENCY APPROPRIATION ACT OF 1950, SUPRA, ESTABLISHING THE
NBSWCF, REQUIRED THAT "REIMBURSEMENTS" RECOVERED FOR THE SERVICES
PROVIDED INCLUDE "RESERVES FOR DEPRECIATION." SEE 64 STAT. 279. WHEN
THE NBSWCF WAS INCORPORATED INTO THE NBS ORGANIC ACT IN 1956, THE
DEFINITION OF "COST" PROVIDED IN 15 U.S.C. SEC. 278B(E) (1976) WAS
CLEARLY INTENDED TO PERMIT THE INCLUSION OF "RESERVES FOR DEPRECIATION"
AS REQUIRED BY THE 1950 ACT. SEE S. REP. NO. 1171, SUPRA, P. 4, AND
H.R. REP. NO. 2809, 84TH CONG., 1ST SESS., P. 4 (1955). THE QUESTION
NOW IS, WHAT METHOD OF DEPRECIATION ACCOUNTING IS REQUIRED FOR
DEPRECIATING EQUIPMENT AND FACILITIES CAPITALIZED INTO THE NBSWCF. IN
TURN, IF THE VALUE ASCRIBED TO THE ITEM DEPRECIATED CAN BE STATED IN
TERMS OF REPLACEMENT COST, THEN AMOUNTS COULD BE RETAINED IN THE NBSWCF
EQUAL TO THE REPLACEMENT VALUE. THE NBSWCF COULD THEN, BY INCLUDING IN
ITS CHARGES TO USERS AN ELEMENT BASED ON REPLACEMENT COST, ACHIEVE THE
SAME OBJECTIVE SOUGHT TO BE ACHIEVED BY THE PROPOSAL TO RETAIN PROFITS -
I.E., THE ACCUMULATION OF AMOUNTS SUFFICIENT TO REPLACE EQUIPMENT OR
FACILITIES AT CURRENT, INFLATED, VALUES. HOWEVER, SUCH A PROCEDURE IS
NOT AUTHORIZED.
GENERALLY, DEPRECIATION IS A MEANS BY WHICH A COST INCURRED IS
ALLOCATED OVER THE USEFUL LIFE OF THE ASSET. IN PATON AND PATON, ASSET
ACCOUNTING (NEW YORK; MACMILLAN CO., 1952) PP. 236-237 IT IS STATED
THAT:
"*** THE PRIMARY PURPOSE OF DEPRECIATION ACCOUNTING IS THE ORDERLY
CHARGING OF PLANT COSTS TO OPERATION; THAT RECOGNIZING DEPRECIATION,
LIKE THE ACKNOWLEDGEMENT OF OTHER COSTS, HAS AS ITS PRINCIPAL OBJECTIVE
REASONABLE INCOME ACCOUNTING RATHER THAN THE ACCUMULATION OF FUNDS FOR
REPLACEMENT."
SEE ALSO ELDON S. HENDRIKSEN, ACCOUNTING THEORY, REV. ED. (HOMEWOOD,
ILL.; RICHARD D. IRWIN, INC., 1970), IN WHICH THE AUTHOR STATES
"HISTORICAL ACQUISITION COST" IS THE MOST COMMON METHOD FOR VALUING
PLANT AND EQUIPMENT. HENDRIKSEN, ID., P. 363. FURTHERMORE, SEE 2 GAO
POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES SEC.
12.5(D), CONCERNING ACQUISITION COST.
WE BELIEVE THAT THE TERM "COST," ABSENT SOMETHING IN THE LAW OR ITS
LEGISLATIVE HISTORY INDICATING OTHERWISE, MEANS HISTORICAL COST, AND NOT
REPLACEMENT COST. THUS, WHEN CAPITALIZING FIXED ASSETS IN THE FUND, THE
VALUE OF THE ASSET IS DETERMINED BY HISTORICAL COST (E.G., ACQUISITION
COST) AND IT IS THIS VALUE THAT DEPRECIATION ALLOCATES OVER THE USEFUL
LIFE OF THE ASSET.
IN A SIMILAR CIRCUMSTANCE, WE INDICATED IN OUR REPORT TO THE
CONGRESS, ENTITLED "EXAMINATION OF FINANCIAL STATEMENTS - BUREAU OF
ENGRAVING AND PRINTING FUND FOR FISCAL YEARS 1974 AND 1975 - SHOWS NEED
FOR STATUTORY AUTHORITY TO INCREASE CAPITALIZATION," FOD 76-22, MARCH 7,
1977, THAT THE SECRETARY OF THE TREASURY LACKED AUTHORITY TO CHARGE FEES
FOR SERVICES OF THE BUREAU WHICH INCLUDED A SURCHARGE BASED ON
REPLACEMENT COSTS OF EQUIPMENT (EVEN THOUGH HE POSSESSED EXPRESS
AUTHORITY TO ESTABLISH RESERVES FOR DEPRECIATION BASED ON ORIGINAL COST
OR APPRAISED VALUE). FURTHER, HE COULD NOT RETAIN IN THE FUND SUCH
SURCHARGES AS COLLECTED. THE CONGRESS SUBSEQUENTLY IN EFFECT AUTHORIZED
SUCH A SURCHARGE AND ITS RETENTION. TREASURY, POSTAL SERVICE, AND
GENERAL GOVERNMENT APPROPRIATION ACT, 1978, PUB. L. NO. 95-81, JULY 31,
1977, 91 STAT. 342.
CONSEQUENTLY, SHOULD IT BE DEEMED NECESSARY FOR NBS TO INCLUDE IN ITS
FEES COST ITEMS WHICH INCLUDE A FACTOR FOR INCREASED REPLACEMENT COSTS
OF EQUIPMENT DUE TO INFLATION, SPECIFIC STATUTORY AUTHORITY SHOULD BE
OBTAINED. WITHOUT SUCH AUTHORITY, ADDITIONAL APPROPRIATIONS FOR THE
NBSWCF, AS AUTHORIZED BY 15 U.S.C. SEC. 278B(A) (1976), MUST BE
REQUESTED.
B-190075 L/M, SEP 7, 1978
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
LIEUTENANT COLONEL PETER W. KRASKA, USAF:
REFERENCE IS MADE TO YOUR LETTER DATED MAY 16, 1978 (RPTC),
REQUESTING A DECISION AS TO WHETHER PAYMENT MAY BE MADE FOR ADDITIONAL
RETIRED PAY TO MAJOR WARREN H. KINSER, USAF, RETIRED, BY INCLUDING HIS
SERVICE IN THE REGULAR ARMY RESERVE (AUGUST 20, 1938, TO FEBRUARY 1,
1940) IN COMPUTING HIS RETIRED PAY. YOUR REQUEST WAS ASSIGNED
SUBMISSION NUMBER DO-AF-1297 BY THE DEPARTMENT OF DEFENSE MILITARY PAY
AND ALLOWANCE COMMITTEE.
MAJOR KINSER WAS RETIRED ON MARCH 31, 1959, UNDER 10 U.S.C. 8911,
WITH RETIRED PAY COMPUTED UNDER 10 U.S.C. 8991, FORMULA B, USING YEARS
OF SERVICE CREDITED TO HIM UNDER 10 U.S.C. 1405. UNDER CLAUSE (3) OF 10
U.S.C. 1405 HE IS ENTITLED TO HAVE INCLUDED IN COMPUTING RETIRED PAY,
THE YEARS OF SERVICE TO WHICH HE WAS ENTITLED TO BE CREDITED IN
COMPUTING HIS BASIC PAY ON MAY 30, 1958. THE STATUTE PROVIDING FOR
YEARS OF SERVICE IN COMPUTING BASIC PAY ON MAY 30, 1958, WAS FOUND AT 37
U.S.C. 233 (1958) (NOW 37 U.S.C. 205), AND INCLUDED IN SUBSECTION
233(A)(2), FULL TIME FOR ALL PERIODS DURING WHICH MEMBERS WERE "ENLISTED
OR HELD APPOINTMENTS *** IN THE REGULAR ARMY RESERVE." ACCORDINGLY,
MAJOR KINSER IS ENTITLED TO HAVE HIS REGULAR ARMY RESERVE SERVICE
INCLUDED IN THE MULTIPLIER IN COMPUTING HIS RETIRED PAY UNDER 10 U.S.C.
8991, FORMULA B.
SINCE MAJOR KINSER'S ACCRUED RETIRED PAY FOR THE PERIOD COVERED BY
THE VOUCHER YOU SUBMITTED WAS THE SUBJECT OF SETTLEMENTS ISSUED BY OUR
CLAIMS DIVISION WHICH DID NOT INCLUDE CREDIT FOR THE REGULAR ARMY
RESERVE SERVICE, WE ARE FORWARDING IT TO THAT DIVISION WITH INSTRUCTION
TO ISSUE A SETTLEMENT FOR THE ADDITIONAL AMOUNT DUE.
B-103315 L/M, AUG 25, 1977
HEADNOTES-UNAVAILABLE
SUBJECT:
SAVINGS AVAILABLE BY USING AIRLINE DISCOUNT FARES
HEADS OF DEPARTMENTS, AGENCIES, AND OTHERS CONCERNED:
THIS MEMORANDUM IS TO BRING TO YOUR ATTENTION THE POTENTIAL FOR
IMMEDIATE SAVINGS BY INFORMING YOUR EMPLOYEES THAT THEY SHOULD USE
AIRLINE DISCOUNT FARES WHEN FEASIBLE RATHER THAN REGULAR COACH-CLASS AIR
FARES.
MOST MAJOR AIRLINES OFFER DISCOUNT FARES THAT ARE ABOUT 15 TO 35
PERCENT LOWER THAN COACH-CLASS FARES. SECTION 1-3.4 OF THE FEDERAL
TRAVEL REGULATIONS AND CHAPTER 304, PARAGRAPH 304002, OF THE MILITARY
TRAFFIC MANAGEMENT REGULATIONS REQUIRE THE USE OF SPECIAL LOWER FARES
WHEN PRACTICAL. WE ARE MAKING A GOVERNMENT-WIDE REVIEW OF THE USE OF
ESTABLISHED TELETICKETING PROCEDURES, WHICH ARE INTENDED TO SIMPLIFY THE
GOVERNMENT'S ACCOUNTING FOR AND PAYMENT OF AIRLINE TICKETS. IN VISITING
20 DEPARTMENTS AND AGENCIES IN THE WASHINGTON, D. C., AREA AS WELL AS
FIELD OFFICES OF 40 DEPARTMENTS AND AGENCIES, WE DETERMINED THAT MOST
AGENCIES ARE NOT TAKING ADVANTAGE OF THESE LOWER AIR FARES.
ONE OF THE MOST FREQUENTLY MISSED DISCOUNT FARES IS THE ROUND-TRIP
EXCURSION FARE. EXCURSION FARES GENERALLY ARE AVAILABLE WHEN
- RESERVATIONS ARE CONFIRMED AND TICKETS ARE PURCHASED AT LEAST 14
DAYS BEFORE DEPARTURE,
- ONLY A MAXIMUM OF TWO STOPOVERS (INCLUDING THE DESTINATION) ARE
SCHEDULED, AND
- THE TRAVEL PERIOD IS FOR AT LEAST 7 BUT NOT MORE THAN 30 DAYS.
THE RESTRICTIONS REQUIRING THAT RESERVATIONS BE CONFIRMED AT LEAST 14
DAYS IN ADVANCE PREVENT SOME TRAVELERS FROM USING EXCURSION FARES
BECAUSE TRAVEL PLANS ARE NOT ALWAYS FIRM THAT FAR IN ADVANCE. HOWEVER,
IT IS IMPORTANT TO NOTE THAT THERE IS NO PENALTY FOR CANCELING OR
CHANGING A RESERVATION MADE TO TAKE ADVANTAGE OF THE EXCURSION RATE.
THE FARE WOULD REVERT TO THE COACH FARE, AND A NEW TICKET WOULD BE
OBTAINED.
MUCH OF THE TRAVEL BY FEDERAL EMPLOYEES, ESPECIALLY THAT CONNECTED
WITH TRAINING COURSES, SEMINARS, AND CONFERENCES, QUALIFIES FOR
EXCURSION FARES, BECAUSE TRAVEL DATES USUALLY ARE KNOWN AT LEAST 14 DAYS
IN ADVANCE. THUS, SIZABLE SAVINGS COULD RESULT. ALSO, EACH SUMMER MANY
THOUSANDS OF MILITARY RESERVISTS RECEIVE ACTIVE-DUTY TRAINING FOR A
2-WEEK PERIOD. THE RESERVISTS USUALLY ARE NOTIFIED OF THEIR TRAINING
DATES SEVERAL MONTHS BEFORE DEPARTING FOR SUMMER CAMPS AND THUS COULD IN
MANY CASES OBTAIN EXCURSION FARES.
SAVINGS ALSO CAN ACCRUE TO FEDERAL AGENCIES BY USING GROUP FARES
RATHER THAN COACH-CLASS FARES. GROUP FARE REQUIREMENTS VARY BY AIRLINE
AND BY FLIGHT AND ARE USUALLY MORE RESTRICTIVE THAN REQUIREMENTS
GOVERNING EXCURSION FARES. THE DISCOUNTS, HOWEVER, ARE GENERALLY
GREATER THAN EXCURSION FARES (UP TO 35 PERCENT OF COACH-CLASS FARES).
FEDERAL TRAVEL OFFICE PERSONNEL ARE AWARE OF DISCOUNT AIR FARES BUT
HAVE NOT ALWAYS USED THEM BECAUSE TRAVELERS REQUESTED AIRLINE TICKETS
TOO LATE TO TAKE ADVANTAGE OF THE DISCOUNTS. ALSO, AT AGENCIES WHERE
TRAVELERS MADE THEIR OWN RESERVATIONS, DISCOUNT FARES GENERALLY WERE NOT
OBTAINED APPARENTLY BECAUSE TRAVELERS WERE NOT AWARE OF THEM.
WE BELIEVE THAT SEVERAL MILLION DOLLARS IS BEING LOST ANNUALLY
GOVERNMENT-WIDE BECAUSE TRAVELERS AND TRAVEL OFFICES ARE NOT TAKING
ADVANTAGE OF DISCOUNT FARES, EVEN THOUGH GOVERNMENT REGULATIONS REQUIRE
THEM TO DO SO.
A DRAFT OF THIS MEMORANDUM WAS FURNISHED TO THE GENERAL SERVICES
ADMINISTRATION FOR COMMENTS. THE DIRECTOR OF THE FEDERAL TRAVEL
MANAGEMENT DIVISION RESPONDED:
"OUR GOVERNMENT-WIDE RESPONSIBILITIES IN DEVELOPING AND PRESCRIBING
PER DIEM, TRAVEL, TRANSPORTATION, AND RELOCATION ALLOWANCES FOR CIVILIAN
FEDERAL EMPLOYEES INCLUDES TRAFFIC MANAGEMENT PROGRAMS AND PROCEDURES
FOR PROCURING PASSENGER SERVICES FROM THE CARRIER INDUSTRY.
"IN THE FEDERAL TRAVEL REGULATIONS (FPMR-101-7), AS WELL AS IN
INFORMATION BULLETINS ISSUED TO ASSIST AGENCIES IN THESE MATTERS, WE
DIRECT THE USE OF SPECIAL, COMMUTATION, EXCURSION, AND REDUCED
ROUND-TRIP FARES FOR OFFICIAL TRAVEL AND EVEN GROUP OR CHARTER
ARRANGEMENTS ***.
"WE BELIEVE THE SUBJECT OF YOUR MEMORANDUM WILL PLACE GREATER
EMPHASIS ON THE USE OF SUCH FARES AND WILL PRODUCE SIGNIFICANT SAVINGS
ON A GOVERNMENT-WIDE BASIS. MORE AND MORE SPECIAL OR REDUCED FARES ARE
BEING OFFERED BY THE CARRIER INDUSTRY AND WE FULLY SUPPORT YOUR PROPOSAL
IN THIS REGARD."
I SUGGEST YOU REVIEW THE USE OF AIRLINE DISCOUNT FARES IN YOUR AGENCY
AND COMMUNICATE TO YOUR PERSONNEL THE POTENTIAL FOR ADDITIONAL
GOVERNMENT SAVINGS BY INCREASED USE OF THESE FARES. ALSO, BECAUSE
TRAVEL OFFICE PERSONNEL ARE GENERALLY MORE KNOWLEDGEABLE ABOUT AVAILABLE
DISCOUNTS, YOUR EMPLOYEES SHOULD BE REQUIRED TO USE THEIR SERVICES WHEN
APPROPRIATE.
B-188794 L/M, JUL 19, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
MEMBER OF COAST GUARD RESERVE WAS PLACED ON THE TEMPORARY DISABILITY
RETIRED LIST UNDER 10 U.S.C. 1205, BASED ON A FINDING OF PHYSICAL
DISABILITY AS A RESULT OF A SERVICE CONNECTED INJURY WHICH OCCURRED
10-12 YEARS PREVIOUSLY WHILE SERVING ON A 2-WEEK PERIOD OF ACTIVE DUTY
FOR TRAINING. FOR PURPOSE OF COMPUTING RETIRED PAY UNDER FORMULA 2 OF
10 U.S.C. 1401, FACT THAT MEMBER WAS NOT IN BASIC PAY STATUS AT TIME OF
DISABILITY DETERMINATION OR PLACEMENT ON THAT LIST, IS NOT A COMPUTATION
REQUISITE, SINCE FORMULA 2 MERELY CALLS FOR USE OF THE PAY RATE FOR THE
"GRADE" TO WHICH MEMBER WAS ENTITLED ON THAT DATE. 47 COMP. GEN. 716
(1968) DISTINGUISHED.
CAPT WILLIAM E. FULLER, USCGR, RETIRED:
THIS ACTION IS IN RESPONSE TO A LETTER DATED APRIL 4, 1977 (FILE
REFERENCE 1821), WITH ENCLOSURES, FROM MR. E. J. ROWE, AUTHORIZED
CERTIFYING OFFICER, UNITED STATES COAST GUARD, REQUESTING AN ADVANCE
DECISION AS TO THE ENTITLEMENT OF CAPTAIN WILLIAM E. FULLER, USCGR,
000-00-7134, TO RECEIVE DISABILITY RETIRED PAY, EFFECTIVE AUGUST 27,
1976, IN THE CIRCUMSTANCES DESCRIBED. THAT LETTER WAS FORWARDED TO THIS
OFFICE BY FIRST ENDORSEMENT FROM THE COMMANDANT OF THE COAST GUARD AND
HAS BEEN ASSIGNED CONTROL NO. ACD-CG-1264 BY THE DEPARTMENT OF DEFENSE
MILITARY PAY AND ALLOWANCE COMMITTEE.
ON FEBRUARY 19, 1976, A COAST GUARD PHYSICAL DISABILITY APPEAL BOARD
WAS CONVENED IN THE MEMBER'S CASE TO REVIEW THE FACTS, MEDICAL RECORDS
AND FINDINGS OF A PHYSICAL EVALUATION BOARD REPORT DATED MAY 29, 1975,
AND A PHYSICAL REVIEW COUNSEL REPORT DATED AUGUST 19, 1975, WHICH BOARDS
HAD BEEN CONVENED BECAUSE THE MEMBER HAD REQUESTED THAT HE BE PROCESSED
FOR PHYSICAL DISABILITY RETIREMENT, CONTENDING THAT HE HAD DETACHED
RETINAS OF BOTH EYES, HAD UNDERGONE NINE EYE OPERATIONS AND THAT HIS
DISABILITY WAS THE RESULT OF A 1959 SERVICE CONNECTED INJURY.
THE RECORD, AS REPORTED BY THE PHYSICAL DISABILITY APPEAL BOARD,
SHOWS THAT ON THE EVENING OF JULY 7, 1959, THE MEMBER, WHILE SERVING IN
A 2-WEEK PERIOD OF ACTIVE DUTY FOR TRAINING IN THE GRADE OF LIEUTENANT
COMMANDER, WAS THE VICTIM OF A BEATING AND ROBBERY. IT IS INDICATED
THAT THE MAJOR AREA OF INJURY WAS TO THE LEFT SIDE OF HIS HEAD, THAT HE
WAS RENDERED UNCONSCIOUS AND SUFFERED A BRIEF PERIOD OF AMNESIA.
THE PHYSICAL DISABILITY APPEAL BOARD, AFTER EXAMINING THE ENTIRE
RECORD AND HEARING MEDICAL TESTIMONY, FOUND THAT THE MEMBER HAD
BILATERAL DETACHMENT OF THE RETINA AND RATED IT AS "IMPAIRMENT OF
CENTRAL VISUAL ACUITY." WHILE IT APPEARED FROM THE RECORD THAT BETWEEN
1959 AND 1972, THERE WAS LITTLE OR NO MANIFEST EVIDENCE OF ANY EYE
DISABILITY, THE BOARD FOUND THAT THE 1959 HEAD INJURY WAS SERVICE
CONNECTED AND NOT DUE TO OWN MISCONDUCT; THAT SUCH INJURY WAS THE ONLY
KNOWN POSSIBLE CAUSE OF HIS DISABILITY; THAT A 10-12 YEAR DELAY IN
ONSET OF A DISABILITY OF THE TYPE WHICH THE MEMBER WAS AFFLICTED WAS NOT
IMPROBABLE AND THAT WHATEVER DOUBTS MAY HAVE EXISTED IN THE MEMBER'S
CASE REGARDING PROXIMATE CAUSATION WERE TO BE RESOLVED IN HIS FAVOR. AS
A RESULT, THE BOARD RECOMMENDED THAT THE MEMBER'S NAME BE PLACED ON THE
TEMPORARY DISABILITY RETIRED LIST (TDRL) WITH A DISABILITY RATING OF 40
PERCENT. BASED ON THAT RECOMMENDATION, BY ORDERS DATED AUGUST 26, 1976,
THE MEMBER'S NAME WAS PLACED ON THAT LIST UNDER THE PROVISIONS OF 10
U.S.C. 1205, EFFECTIVE AUGUST 27, 1976.
THE SUBMISSION STATES THAT BASED ON A PRELIMINARY RESEARCH OF
DECISIONS OF THIS OFFICE, AND NOTWITHSTANDING THE FACT THAT THE MEMBER'S
NAME WAS PLACED ON THE TDRL, DOUBT EXISTS AS TO WHETHER THE MEMBER IS
ENTITLED TO RECEIVE DISABILITY RETIRED PAY. WHILE IT SEEMS TO BE
AGREED, GENERALLY, THAT THE MEMBER'S NAME COULD BE PLACED ON THE TDRL,
THE SUBMISSION GOES ON TO STATE THAT THE LANGUAGE OF COLUMN ONE OF
FORMULAS 1 AND 2 OF 10 U.S.C. 1401, INDICATES THAT A MEMBER MUST BE IN
RECEIPT OF BASIC PAY FOR COMPUTATION PURPOSES, POINTING OUT THAT THE
MEMBER WAS NOT IN A PAY STATUS AT THE TIME HIS NAME WAS PLACED ON THE
TDRL.
APPARENTLY, THE GENERAL LAW DIVISION OF THE COAST GUARD HAS DISAGREED
WITH THAT POSITION AND HAS ANALOGISED THE NONPAY STATUS IN THE MEMBER'S
CASE TO SITUATIONS INVOLVING RESERVISTS WHO FREQUENTLY PARTICIPATE IN
ACTIVE DUTY FOR TRAINING OR INACTIVE DUTY FOR TRAINING WITHOUT PAY.
THEY EXPRESSED THE VIEW THAT SINCE THOSE MEMBERS ARE ENTITLED TO
DISABILITY BENEFITS, INCLUDING RETIRED PAY, SO SHOULD THE MEMBER HERE BE
SIMILARILY ENTITLED.
IN CROSS ARGUMENT, THE VIEW IS EXPRESSED IN THE SUBMISSION THAT IN
ALL CIRCUMSTANCES RESERVISTS ARE REQUIRED TO SEEK IMMEDIATE SERVICE
MEDICAL ATTENTION, HOSPITALIZATION OR TREATMENT LEADING TO ISSUANCE OF A
CERTIFICATE OF DISABILITY ELIGIBILITY, AND IT IS THAT PROMPT ACTION
WHICH CREATES ENTITLEMENT TO ACTIVE DUTY PAY AND ALLOWANCES DURING THE
DISABILITY PERIOD. IN THE ABSENCE THEREOF, THE SUBMISSION FINDS NO
BASIS FOR USING ANY ACTIVE DUTY PAY RATE IF THE MEMBER IS PLACED ON THE
TDRL DIRECTLY FROM AN INACTIVE STATUS.
IN THAT CONNECTION, THE SUBMISSION GOES ON TO STATE THAT THE RECORD
FAILS TO SHOW ANY EVIDENCE THAT THE MEMBER WAS PERMANENTLY INCAPACITATED
FOR FUTURE MILITARY SERVICE AT THE TIME OF HIS INJURY ON JULY 7, 1959.
IT IS INDICATED THAT THE MEMBER, IN FACT, PERFORMED ALL HIS NORMAL
DUTIES AS A RESERVE OFFICER UNTIL MARCH 1, 1972, AT WHICH TIME HE WAS
REMOVED FROM ACTIVE STATUS IN THE RESERVE; TRANSFERRED TO THE STANDBY
RESERVE AND PLACED ON THE INACTIVE STATUS LIST PURSUANT TO 14 U.S.C.
787A. FURTHER, THE MEMBER RECEIVED POINT CREDITS FOR DRILLS AND FOR
ACTIVE DUTY FOR TRAINING THROUGH AUGUST 1, 1971, AND HE HAD NEVER BEEN
OTHER THAN FULLY QUALIFIED TO PERFORM HIS MILITARY DUTIES THROUGHOUT THE
TENURE OF HIS COAST GUARD CAREER. SINCE IT IS INDICATED THAT THE MEMBER
NEVER PRESENTED HIMSELF FOR SERVICE MEDICAL OR HOSPITAL TREATMENT
RELATING TO HIS EYE CONDITION DURING THIS TIME, IT WAS CONCLUDED THAT HE
NEVER ASSUMED A STATUS ENTITLING HIM TO PAY AND ALLOWANCES FOR
DISABILITY PURPOSES OR ANY OTHER BENEFITS AT THE TIME HIS NAME WAS
PLACED ON THE TDRL.
WITH REGARD TO THE QUESTION OF ESTABLISHING A RATE OF MONTHLY BASIC
PAY UPON WHICH RETIRED PAY ENTITLEMENT COULD BE PREDICATED IN THIS CASE,
THE SUBMISSION SUGGESTS THAT THE MEMBER IS REQUIRED TO BE IN A BASIC PAY
STATUS, EITHER ACTIVE DUTY, ACTIVE DUTY FOR TRAINING OR BE IN RECEIPT OF
DISABILITY PAY AND ALLOWANCE AS A RESULT OF A DISABLING INJURY AT THE
TIME OF PLACEMENT OF HIS NAME ON THE TDRL IN ORDER TO COMPUTE RETIRED
PAY UNDER FORMULA 2 OF SECTION 1401. SINCE THE MEMBER WAS NOT ENTITLED
TO BASIC PAY ON THAT DAY - BEING PREVIOUSLY TRANSFERRED TO THE INACTIVE
SERVICE ON MARCH 1, 1972 - AND NOT ENTITLED TO DISABILITY PAY AND
ALLOWANCES ON A CONTINUATION OR RESUMPTION OF DISABILITY BASIS, THE VIEW
IS EXPRESSED THAT THE MEMBER WOULD NOT BE ENTITLED TO DISABILITY RETIRED
PAY, CITING PARTICULARLY 47 COMP. GEN. 716 (1968) AS CONTROLLING.
IN 47 COMP. GEN. 716, SUPRA, WE CONSIDERED THE CASE OF A COAST GUARD
RESERVIST WHO, FOLLOWING INITIAL ENLISTMENT, WAS ASSIGNED 6 MONTHS'
ACTIVE DUTY FOR TRAINING IN OCTOBER 1965. DURING THE PERIOD OF THAT
TRAINING HE SUFFERED AN INJURY THAT WAS DETERMINED TO HAVE OCCURRED IN
LINE OF DUTY AND NOT AS A RESULT OF HIS OWN MISCONDUCT. AS A RESULT,
THE MEMBER WAS RELEASED FROM ACTIVE DUTY FOR TRAINING IN APRIL 1966 AS
NOT FIT FOR DUTY. IN 1967, FOLLOWING A PHYSICAL EVALUATION BOARD
ACTION, THE MEMBER'S NAME WAS PLACED ON THE TDRL UNDER THE PROVISIONS OF
10 U.S.C. 1202. ON THE QUESTION AS TO HIS ENTITLEMENT TO RECEIVE
DISABILITY RETIRED PAY, IT WAS DETERMINED THAT HE COULD NOT BE SO PAID
SINCE THERE WAS NO SHOWING OF A CONTINUED EXISTENCE OF DISABILITY OR THE
EXISTENCE OF A BASIC PAY STATUS WHEN THE DISABILITY DETERMINATION WAS
MADE. IN ARRIVING AT THAT CONCLUSION, IT WAS RECOGNIZED THAT SINCE THE
MEMBER WAS IN A "MORE THAN 30 DAYS ACTIVE DUTY STATUS" WHEN INJURED, IF
HE WAS TO BE PLACED ON A DISABILITY RETIRED LIST, EITHER PERMANENT OR
TEMPORARY, IT WOULD BE UNDER THE PROVISIONS OF 10 U.S.C. 1201 OR 1202.
UNDER THE LANGUAGE OF THE PROVISIONS OF THOSE TWO SECTIONS IT WAS
RECOGNIZED AS NECESSARY THAT THE DISABILITY DETERMINATIONS BE MADE WHILE
THE MEMBER WAS IN A PAY STATUS, WHICH INCLUDED DISABILITY PAY AND
ALLOWANCES.
WE DO NOT BELIEVE THAT THAT DECISION IS FOR APPLICATION IN THE
PRESENT CASE AND IS DISTINGUISHABLE.
SECTION 1205 OF TITLE 10, UNITED STATES CODE, RELATES TO MEMBERS
SERVING DURING PERIODS OF "ACTIVE DUTY FOR 30 DAYS OR LESS," INCLUDING
ACTIVE OR INACTIVE DUTY TRAINING AND PROVIDES IN PART:
"*** A MEMBER OF THE ARMED FORCES NOT COVERED BY SECTION 1201, 1202,
OR 1203 OF THIS TITLE WOULD BE QUALIFIED FOR ENTITLEMENT UNDER SECTION
1204 OF THIS TITLE BUT FOR THE FACT THAT DISABILITY IS NOT DETERMINED TO
BE OF A PERMANENT NATURE, THE SECRETARY SHALL *** PLACE THE MEMBER'S
NAME ON THE TEMPORARY DISABILITY RETIRED LIST, WITH RETIRED PAY COMPUTED
UNDER SECTION 1401 OF THIS TITLE."
THE QUALIFICATIONS FOR PERMANENT DISABILITY RETIREMENT UNDER 10
U.S.C. 1204, AS THEY RELATE TO THE PRESENT CASE, ARE THAT THE MEMBER "IS
UNFIT TO PERFORM THE DUTIES OF HIS OFFICE, GRADE, RANK OR RATING BECAUSE
OF PHYSICAL DISABILITY RESULTING FROM AN INJURY" THAT IS "THE PROXIMATE
RESULT OF PERFORMING ACTIVE DUTY OR INACTIVE DUTY TRAINING."
CLEARLY THE FINDING OF THE PHYSICAL DISABILITY APPEAL BOARD
ESTABLISHED THE EXISTENCE OF A SERVICE CONNECTED INJURY, A CURRENT
DISABILITY AND REASONABLY ESTABLISHED THEIR INTERCONNECTION. FURTHER,
SINCE THE MEMBER WAS "A MEMBER OF THE ARMED FORCES" AS THAT TERM IS USED
IN 10 U.S.C. 1204 AND 1205 - BEING IN AN INACTIVE STATUS IN THE RESERVE
WHEN THE DISABILITY DETERMINATION WAS MADE - THE PLACEMENT OF THE
MEMBER'S NAME ON THE TDRL UNDER SECTION 1205 WOULD BE PROPER
NOTWITHSTANDING THE FACT THAT THE MEMBER, BUT FOR AGE, WAS FULLY
QUALIFIED FOR NON-REGULAR RETIREMENT UNDER THE PROVISIONS OF 10 U.S.C.
1331. COMPARE 40 COMP. GEN. 249 (1960) INVOLVING A MEMBER WHO HAD NO
MILITARY STATUS WHEN HIS NAME WAS PURPORTEDLY PLACED ON THE TDRL.
AS PREVIOUSLY NOTED, IN 10 U.S.C. 1201 AND 1202 THE REQUIREMENT THAT
MEMBERS BE "ENTITLED TO BASIC PAY" IS SPECIFICALLY STATED. IN 10 U.S.C.
1204 AND 1205, HOWEVER, THE CLASSES OF MEMBERS COVERED THEREUNDER ARE
THOSE "NOT COVERED BY" THE BEFORE-MENTIONED SECTIONS WHO ARE "UNFIT TO
PERFORM THE DUTIES OF *** (THEIR) OFFICE, GRADE, RANK OR RATING."
THEREFORE, BUT FOR THE REQUIREMENT THAT THE DISABILITY BE DETERMINED TO
BE THE PROXIMATE RESULT OF THE PERFORMANCE OF ACTIVE DUTY OR INACTIVE
DUTY TRAINING, NO BASIC PAY STATUS IS REQUIRED FOR RETIREMENT PURPOSES
AT THE TIME SUCH MEMBER'S NAME IS PLACED ON THE TDRL UNDER 10 U.S.C.
1205.
AS TO THE ACTUAL COMPUTATION UNDER FORMULA 2 OF 10 U.S.C. 1401,
COLUMN ONE THEREOF PROVIDES THAT FOR THE PURPOSE OF RETIRED PAY
COMPUTATION AND SUBJECT TO FOOTNOTES 1 AND 4 THEREUNDER, USE IS TO BE
MADE OF THE "MONTHLY BASIC PAY OF GRADE TO WHICH MEMBER *** WAS ENTITLED
ON DAY BEFORE RETIREMENT OR PLACEMENT ON TEMPORARY DISABILITY RETIRED
LIST ***." (THE SAME LANGUAGE IS CONTAINED IN COLUMN ONE OF FORMULA 1 OF
THE SAME SECTION.)
MEMBERS OF RESERVE COMPONENTS, BY THE VERY NATURE OF THE LAWS WHICH
CREATED SUCH COMPONENT, MAINTAIN A MINIMUM MILITARY STATUS, WHICH IS
SERVICE IDENTIFIED BY GRADES, RANKS OR RATINGS, EVEN WHILE SUCH MEMBERS
ARE NOT IN AN ACTIVE DUTY STATUS. SINCE IT HAS BEEN ESTABLISHED THAT
THE BASIC PAY STATUS REQUIREMENT IS LIMITED TO 10 U.S.C. 1201 AND 1202
PHYSICAL DISABILITY RETIREMENTS AND NOT IMPOSED ON THOSE MEMBERS WHO
QUALIFY FOR RETIREMENT UNDER 10 U.S.C. 1204 AND 1205, ONCE A MEMBER HAS
FULLY QUALIFIED FOR RETIREMENT UNDER THESE LATTER PROVISIONS, THE USE OF
THE WORD "GRADE" IN CONJUNCTION WITH THE PHRASE "TO WHICH THE MEMBER IS
ENTITLED," AS USED IN FORMULA 2 OF 10 U.S.C. 1401, CANNOT BE READ AS
REQUIRING THE REIMPOSITION OF A BASIC PAY STATUS ON THE DATE OF
DISABILITY DETERMINATION OR PLACEMENT ON THAT LIST IN ORDER TO HAVE A
POSITIVE RATE UPON WHICH TO COMPUTE RETIRED PAY.
THEREFORE, IT IS OUR VIEW THAT SO LONG AS AN INDIVIDUAL MAINTAINS A
RESERVE STATUS AND IS OTHERWISE QUALIFIED TO BE PLACED ON THE TDRL UNDER
10 U.S.C. 1205, THEN FOR THE PURPOSE OF COMPUTING DISABILITY RETIRED PAY
UNDER FORMULA 2 OF 10 U.S.C. 1401, HE MAY USE THE MONTHLY BASIC PAY RATE
APPLICABLE TO HIS GRADE AND YEARS OF SERVICE AS THOUGH HE WAS SERVING ON
ACTIVE DUTY ON THAT DATE AND THE QUESTION PRESENTED IS ANSWERED
ACCORDINGLY.
B-188305, JUL 7, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. GAO WILL CONSIDER PROTEST - EVEN THOUGH ALSO BEFORE COURT OF
COMPETENT JURISDICTION - WHERE COURT EXPRESSLY REQUESTED DECISION IN
MATTER.
2. INFORMAL ORAL ADVICE GIVEN BY GAO STAFF MEMBERS TO PROCURING
AGENCY REPRESENTATIVES IS NOT BINDING ON GAO IN EVENT OF BID PROTEST.
3. AWARD UNDER RFP INCORPORATING BY REFERENCE TELEPHONE
CONVERSATIONS REGARDING PROPOSED PRICE - WHICH HAD NOT BEEN MEMORIALIZED
- DOES NOT VIOLATE 31 U.S.C. 200(A)(1). HOWEVER, SUCH INCORPORATION IS
CLEARLY INAPPROPRIATE, SINCE AGREEMENT REACHED IN CONVERSATIONS SHOULD
HAVE BEEN PUT IN WRITING TO AVOID DISPUTES.
4. AWARD SHOULD NOT BE BASED ON AMBIGUOUS PRICE PROPOSAL THROUGH
APPLICATION OF CONTRA PROFERENTEM RULE OF CONTRACT CONSTRUCTION THAT
AMBIGUITIES BE CONSTRUED AGAINST THEIR DRAFTER; RATHER, DISCUSSIONS
SHOULD BE CONDUCTED TO CLARIFY PRICE.
5. WHERE GOVERNMENT HAD BEEN PUT ON DIRECT NOTICE THAT OFFEROR'S
INTENDED PRICING IS DIFFERENT FROM GOVERNMENT'S INTERPRETATION OF
CLEARLY AMBIGUOUS PROPOSAL, GOVERNMENT CANNOT COMPEL OFFEROR TO ACCEPT
GOVERNMENT'S INTERPRETATION IN AWARD. CONSEQUENTLY, AWARD BY GOVERNMENT
VARYING TERMS OF OFFER CONSTITUTES INITIATION OF DISCUSSIONS, SINCE
OFFEROR CAN EITHER ACCEPT OR REJECT PROFFERED "AWARD."
6. IF POST-SELECTION DISCUSSIONS HAVE BEEN CONDUCTED WITH SUCCESSFUL
OFFEROR REGARDING PRICE, DISCUSSIONS SHOULD HAVE BEEN CONDUCTED WITH
OTHER OFFEROR IN COMPETITIVE RANGE, EVEN WHERE DISCUSSIONS DID NOT
DIRECTLY AFFECT OFFEROR'S RELATIVE STANDING, BECAUSE ALL OFFERORS ARE
ENTITLED TO EQUAL TREATMENT AND OPPORTUNITY TO REVISE PROPOSALS.
DEBRIEFING DOES NOT CONSTITUTE MEANINGFUL DISCUSSIONS, SINCE PROTESTER
WAS NOT AFFORDED OPPORTUNITY TO REVISE PROPOSAL.
7. AWARD FOR MICROGRAPHICS SERVICES BASED ON UNIT PRICES FOR 5
MILLION, 6 MILLION AND 7 MILLION IMAGES, RESPECTIVELY, IS NOT "FIXED" OR
"FINITELY DETERMINABLE" FOR ALL PERIODS OF CONTRACT UNDER "FIXED PRICES"
CLAUSE BECAUSE IF 18 MILLION IMAGES ARE EXCEEDED IN THREE EVALUATED
PERIODS, THERE EXISTS NO APPLICABLE UNIT PRICE. ALSO, PROTESTER'S
PROPOSAL DID NOT PROPOSE "FIXED" OR "FINITELY DETERMINABLE" PRICES FOR
ALL PERIODS BECAUSE ALTHOUGH FIXED UNIT PRICES WERE PROPOSED FOR INITIAL
CONTRACT PERIOD, SUBSEQUENT OPTIONS WERE BASED ON SAME UNIT PRICES
ADJUSTED BY COST OF LIVING INDEX FOR PREVIOUS 12-MONTH PERIOD. CLAUSE
CONTEMPLATES "FIXED" OR "FINITELY DETERMINABLE" PRICES AS OF TIME OF
AWARD SO PROPER PRICE EVALUATION CAN BE MADE.
8. WHERE AWARD UNDER RFP WAS BASED ON IMPROPER POST-AWARD
DISCUSSIONS, CONTRACT SHOULD BE TERMINATED AND REQUIREMENT RESOLICITED,
EVEN WHERE AWARDEE'S PRICE WAS DISCLOSED IN DEBRIEFING TO PROTESTER AND
AUCTION SITUATION MAY BE CREATED, BECAUSE OF PRIMACY OF STATUTORY
REQUIREMENTS FOR COMPETITION OVER REGULATORY PROHIBITION OF AUCTION
TECHNIQUES. FURTHERMORE, REMEDIAL ACTION IS IN GOVERNMENT'S BEST
INTERESTS TO PROTECT CONFIDENCE IN INTEGRITY OF COMPETITIVE PROCUREMENT
SYSTEM, NOTWITHSTANDING ADVERSE AGENCY MISSION AND COST IMPACTS.
PRC INFORMATION SCIENCES COMPANY:
ON MARCH 16, 1977, PRC INFORMATION SCIENCES COMPANY (PRC) PROTESTED
THE AWARD BY THE SECURITIES AND EXCHANGE COMMISSION (SEC) OF CONTRACT
NO. SE-77-D-0006, TO REHAB COMPUTER, INCORPORATED, D.B.A. REHAB GROUP,
INC. (REHAB), PURSUANT TO REQUEST FOR PROPOSALS (RFP) SEC-539. THE RFP
SOLICITED PROPOSALS FOR A CONTRACTOR-OPERATED FACILITIES MANAGEMENT
AUTOMATED DOCUMENT FILMING, STORAGE AND RETRIEVAL SYSTEM.
THE RFP CALLED FOR TECHNICAL AND FIRM FIXED-PRICE PROPOSALS TO BE
EVALUATED FOR THE INITIAL CONTRACT PERIOD TO SEPTEMBER 30, 1977, AND TWO
1-YEAR OPTIONS. (THERE ARE THREE ADDITIONAL YEARLY OPTIONS.) UNDER THE
RFP EVALUATION SCHEME, "TECHNOLOGY" RECEIVED 75-PERCENT WEIGHT AND PRICE
25 PERCENT. PRICE WAS THE EVALUATED SYSTEM COST FOR THE FIRST THREE
TERMS, INCLUDING EQUIPMENT, SOFTWARE, TRAINING AND MAINTENANCE, AS WELL
AS THE COST FOR FILMING, INCLUDING PROCESSING AND INDEXING, THE SEC
DOCUMENTS. BOTH OFFERORS QUOTED PRICES PER IMAGE FOR THE FILMING
SERVICES. THE QUANTITY OF FILMING WAS INDEFINITE, ALTHOUGH THE RFP
PROVIDED THAT THE FOLLOWING IMAGE VOLUMES WOULD BE USED FOR EVALUATION
PURPOSES:
TERM VOLUME
1 1,500,000
2 5,000,000
3 6,000,000
ALSO, ALTHOUGH THE SERVICE CONTRACT ACT (SCA) APPLIED TO THIS
PROCUREMENT, NONE OF THE REQUIRED IMPLEMENTING PROVISIONS OR APPLICABLE
WAGE DETERMINATIONS WERE CONTAINED IN THE RFP.
ONLY REHAB AND PRC SUBMITTED TECHNICAL AND PRICE PROPOSALS UNDER THE
RFP. AFTER DISCUSSIONS WERE CONDUCTED WITH BOTH OFFERORS, BEST AND
FINAL OFFERS WERE SUBMITTED BY JANUARY 14, 1977. THE TECHNICAL
PROPOSALS OF REHAB AND PRC WERE FOUND TO BE ESSENTIALLY EQUAL. HOWEVER,
REHAB'S EVALUATED PRICE OF APPROXIMATELY $3.6 MILLION WAS LOWER THAN
PRC'S EVALUATED PRICE OF APPROXIMATELY $4 MILLION. CONSEQUENTLY, AWARD
OF CONTRACT NO. SE-77-D-0005 (FIRST AWARD) WAS MADE TO REHAB ON JANUARY
17, 1977.
THE SEC AWARD LETTER OF THAT DATE INCORPORATED REHAB'S WRITTEN
SUBMISSIONS UNDER RFP SEC-539, AS WELL AS TELEPHONE CONVERSATIONS
BETWEEN REHAB OFFICIALS AND AN OFFICIAL OF SEC "ON JANUARY 11 AND 12,
1977, CONCERNING A MATERIAL ESCALATION CLAUSE AND IMAGE PRICING."
ONE SUBMISSION INCORPORATED IN THE AWARD WAS REHAB'S LAST PRICE
PROPOSAL OF JANUARY 3, 1977. THIS PROPOSAL CONTAINED FIXED PRICES FOR
HARDWARE AND MAINTENANCE, AS WELL AS TWO ALTERNATE GROUPS OF UNIT PRICES
FOR SUPPORTING SERVICES. THE PRIMARY QUOTED RATES PER IMAGE WERE
$0.145, $0.138 AND $0.146. THE ALTERNATE IMAGE PRICES (WITHOUT
MINICOMPUTER AND MAINTENANCE) WERE $0.139, $0.133 AND $0.141 PER IMAGE.
ALTHOUGH THE AWARD DOCUMENT DID NOT SPECIFY WHICH ALTERNATIVE HAD BEEN
SELECTED, SEC STATES THAT THE LESSER IMAGE PRICES WERE THE BASIS OF THE
AWARD. THE PRICE SUBMISSION IS AMBIGUOUS REGARDING WHETHER THESE IMAGE
PRICES WERE FOR (1) THREE 1-YEAR PERIODS; (2) THE THREE EVALUATED TERMS
OR (3) RESPECTIVE IMAGE QUANTITIES OF 5 MILLION, 6 MILLION AND 7
MILLION. (THE LATTER IMAGE QUANTITIES ARE ESTIMATES SET FORTH IN
SECTION F.8.B OF THE RFP FOR THE FIRST 3 YEARS OF THE SYSTEM.)
A DEBRIEFING CONFERENCE WITH PRC WAS HELD ON JANUARY 28, 1977, WHERE
SEC'S EVALUATION OF THE PROPOSALS WAS SUMMARIZED AND THE REHAB UNIT
IMAGE PRICES, WHICH SEC STATES WERE THE BASIS FOR THE AWARD, WERE
REVEALED.
ON FEBRUARY 2, 1977, PRC FILED WITH OUR OFFICE A PROTEST AGAINST THE
FIRST AWARD ON 17 GROUNDS. ON THAT SAME DATE, SEC REQUESTED OUR OFFICE
FOR AN ADVANCE DECISION ON SOME OF THE ISSUES RAISED BY THE PROTEST.
WITHOUT AWAITING OUR DECISION, SEC TERMINATED REHAB'S CONTRACT ON
FEBRUARY 16, 1977. ON FEBRUARY 17, 1977, PRC WITHDREW THE PROTEST AND
SEC THE REQUEST, APPARENTLY BASED ON THE UNDERSTANDING THAT SEC WOULD
SOLICIT A NEW ROUND OF BEST AND FINAL OFFERS FROM PRC AND REHAB. SEC
REPORTS THAT IT DECIDED ON THIS COURSE OF ACTION BECAUSE OF THE FAILURE
TO INCLUDE THE APPLICABLE SCA PROVISIONS IN THE RFP AND THE PROBLEMS
CONCERNING REHAB'S SUBMISSION OF A PROPOSAL IN A TRADE NAME RATHER THAN
ITS CORPORATE NAME.
REHAB PROTESTED THE TERMINATION OF ITS CONTRACT TO SEC. IT STATED
THAT A NEW ROUND OF BEST AND FINAL OFFERS WOULD BE UNFAIR TO REHAB
BECAUSE MUCH OF ITS PROPOSAL HAD BEEN DISCLOSED TO PRC AT THE
DEBRIEFING. REHAB ASSERTED THAT A RESOLICITATION WOULD ESSENTIALLY BE A
PROHIBITED AUCTION.
SEC EMPLOYED A LEGAL CONSULTANT TO PROVIDE PROCUREMENT/LEGAL ADVICE
ON THIS MATTER. THE CONSULTANT ATTENDED AN SEC DEBRIEFING OF REHAB ON
FEBRUARY 23, 1977. IT WAS MADE CLEAR AT THE DEBRIEFING THAT THE
CONSULTANT WAS AN INDEPENDENT EXPERT, NOT A REPRESENTATIVE OF SEC, AND
THAT HE COULD NOT BIND OR OBLIGATE SEC IN ANY WAY. AT THE DEBRIEFING,
REHAB WAS ASKED TO SUBMIT ITS VIEWS ON THE SCA PROBLEM. ALSO, AT THE
END OF THE DEBRIEFING, THE CONSULTANT ASKED REHAB REPRESENTATIVES HOW IT
INTENDED THE IMAGE PRICING PORTION OF ITS FINAL PRICE SUBMISSION TO BE
INTERPRETED.
BY LETTER DATED FEBRUARY 23, 1977, REHAB EXPLAINED THAT IT INTENDED
THE RESPECTIVE IMAGE PRICES TO BE ON A "TERM" BASIS FOR THE CONTRACT AND
EVALUATED OPTION TERMS. ON FEBRUARY 24, 1977, REHAB ADVISED THAT -
"*** REGARDLESS OF WHETHER THE SERVICE CONTRACT ACT OR THE
WALSH-HEALEY ACT APPLIED *** (IT WOULD) BE BOUND BY ANY WAGE
DETERMINATION MADE BY THE SECRETARY OF LABOR *** (AND IT WOULD) NOT
CLAIM, AND HEREBY WAIVES ANY RIGHT TO CLAIM, FOR ADDITIONAL COSTS
ATTRIBUTABLE TO ANY WAGE DETERMINATION MADE BY THE SECRETARY OF LABOR
DURING THE LIFE OF THE CONTRACT."
ON FEBRUARY 23, 1977 - WHILE NO PROTEST WAS PENDING - SEC
REPRESENTATIVES AND THE LEGAL CONSULTANT MET WITH THE GENERAL COUNSEL
AND ANOTHER REPRESENTATIVE OF OUR OFFICE AND DISCUSSED SOME OF THE
PROBLEMS INVOLVED IN THE PROCUREMENT AND HOW THEY COULD BE BEST
RESOLVED.
SEC REEVALUATED THE PRICE PROPOSALS USING SEVERAL METHODS IN RESPONSE
TO THE OBJECTIONS RAISED BY PRC IN THE PROTEST. SEC DETERMINED THAT THE
PRICE GAP BETWEEN REHAB AND PRC WAS STILL APPROXIMATELY $260,000,
ASSUMING THE EVALUATED PRICE MOST ADVANTAGEOUS TO PRC AND THE PRICE
LEAST ADVANTAGEOUS TO REHAB. ALSO, SEC FOUND THAT THE SCA'S APPLICATION
WOULD NOT AFFECT THE RELATIVE PRICE STANDING OF THE TWO OFFERORS. SEC
ALSO DETERMINED THAT REHAB'S OFFER IN A TRADE NAME SHOULD NOT BE CAUSE
FOR REJECTION. SEE 51 COMP. GEN. 494 (1972). MOREOVER, SEC DETERMINED
THAT A NEW ROUND OF BEST AND FINAL OFFERS WOULD CONSTITUTE AN ILLEGAL
AUCTION. SEE FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-3.805-1(B)
(1964 ED. AMEND. 153). CONSEQUENTLY, SEC DECIDED TO REAWARD THE
MICROGRAPHICS REQUIREMENT TO REHAB.
ON MARCH 2, 1977, CONTRACT NO. SE-77-D-0006 (SECOND AWARD) WAS MADE
TO REHAB IN ITS CORPORATE AND TRADE NAMES. THIS AWARD INCORPORATES THE
REHAB WRITTEN SUBMISSIONS UNDER RFP SEC-539 AND THE JANUARY 11 AND 12
TELEPHONE CALLS BETWEEN REHAB OFFICIALS AND THE OFFICIAL OF SEC
"CONCERNING THE MANAGEMENT FEE FOR HANDLING PURCHASED EQUIPMENT AND
IMAGE PRICING." THE AWARD DOCUMENT ALSO STATES:
"*** IT IS ALSO UNDERSTOOD THAT THE SERVICE CONTRACT ACT AND ALL
APPLICABLE WAGE DETERMINATIONS OF THE DEPARTMENT OF LABOR WILL APPLY TO
THIS CONTRACT WITHOUT A PRICE ADJUSTMENT FOR ANY SUBSEQUENT WAGE
INCREASES IN FUTURE DETERMINATIONS. ADDITIONALLY, CONSISTENT WITH THE
INTERPRETATION OF THE SEC, YOUR FIRM'S PRICE PROPOSAL CONTEMPLATES THE
FOLLOWING:
1) THE FIRST FIVE MILLION IMAGES TO BE PRODUCED FOR THE SEC WILL COST
THE SEC .133 DOLLARS PER COPY, REGARDLESS OF THE CONTRACT TERM IN WHICH
THE PRODUCTION TAKES PLACE,
2) THE NEXT SIX MILLION IMAGES PRODUCED WILL COST THE SEC .133
DOLLARS PER COPY, REGARDLESS OF THE CONTRACT TERM, AND
3) FOR THE NEXT SEVEN MILLION IMAGES PRODUCED, SEC WILL BE CHARGED A
RATE OF .141 DOLLARS PER COPY."
ON MARCH 16, 1977, PRC PROTESTED TO OUR OFFICE THE SECOND AWARD TO
REHAB. PRC'S PROTEST BASES ARE SUMMARIZED AS FOLLOWS: (1) THE CONTRACT
AWARDED DIFFERS FROM THE CONTRACT SOLICITED BECAUSE (A) THE SCA WAS NOT
IMPLEMENTED IN THE RFP AND (B) REHAB'S IMAGE PRICING VIOLATED THE RFP
PROVISIONS; (2) WHILE NO DISCUSSIONS WERE CONDUCTED WITH PRC AFTER THE
TERMINATION OF THE FIRST REHAB CONTRACT AND PRIOR TO THE AWARD OF THE
SECOND CONTRACT, DISCUSSIONS WERE IMPROPERLY CONDUCTED WITH REHAB DURING
THAT PERIOD CONCERNING (A) THE IDENTITY OF REHAB (TRADE OR CORPORATE
NAME); (B) THE PRICE TERMS OF THE CONTRACT AND; (C) THE APPLICATION OF
THE SCA; (3) THE CONTRACT VIOLATES 31 U.S.C. SEC. 200 (1970) BECAUSE IT
INCORPORATED ORAL CONTRACT TERMS BY REFERENCE; AND (4) THE AWARD OF THE
SECOND CONTRACT TO REHAB CONSTITUTED A NEW PROCUREMENT NOT COMPLYING
WITH THE RULES REQUIRING COMPETITION.
ON MARCH 24, 1977, PRC FILED SUIT IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA (PRC INFORMATION SCIENCES COMPANY V.
RODERICK M. HILLS, ET AL., CIVIL ACTION NO. 77-0527) SEEKING TO ENJOIN
CONTRACT PERFORMANCE PENDING OUR DECISION ON THE PROTEST. ON APRIL 5,
1977, THE PARTIES STIPULATED TO STOP ALL WORK ON THE CONTRACT, WITH THE
EXCEPTION OF CERTAIN ITEMS COMMON TO BOTH PRC'S AND REHAB'S PROPOSALS,
PENDING A SCHEDULED HEARING ON PRC'S MOTION FOR A PRELIMINARY
INJUNCTION. ON APRIL 20, 1977, A HEARING WAS HELD ON THE MOTION, AFTER
WHICH THE PARTIES STIPULATED TO STOP WORK ON THE CONTRACT, EXCEPT FOR
THE PURCHASE AND INSTALLATION OF THAT EQUIPMENT DETERMINED BY SEC TO BE
COMMON TO BOTH PROPOSALS, PENDING OUR DECISION.
ALTHOUGH IT IS THE ORDINARY PRACTICE OF OUR OFFICE NOT TO RENDER A
DECISION WHERE THE ISSUES INVOLVED ARE LIKELY TO BE DISPOSED OF IN
LITIGATION BEFORE A COURT OF COMPETENT JURISDICTION, SEE, E.G., NARTRON
CORPORATION, 53 COMP. GEN. 730 (1974), 74-1 CPD 154, WE WILL CONSIDER
PRC'S PROTEST, SINCE THE COURT EXPRESSLY REQUESTED OUR DECISION. SEE
THE BID PROTEST PROCEDURES, 4 C.F.R. SEC. 20.10 (1977); MAREMONT
CORPORATION, 55 COMP. GEN. 1362 (1976), 76-2 CPD 181.
THE SEC HAS STATED THAT IT RELIED, IN PART, ON DISCUSSIONS WITH
GENERAL ACCOUNTING OFFICE STAFF MEMBERS PRIOR TO THE FILING OF THIS
PROTEST IN DECIDING TO REAWARD THE CONTRACT TO REHAB. SEC WAS INFORMED
THAT THE ADVICE GIVEN WAS INFORMAL AND DID NOT IN ANY WAY BIND OUR
OFFICE IN THE EVENT OF A BID PROTEST. FURTHERMORE, THE STAFF MEMBERS
WHO PARTICIPATED IN THE DISCUSSIONS HAVE DISQUALIFIED THEMSELVES FROM
PARTICIPATING IN THE CONSIDERATION OF THIS CASE.
FROM TIME TO TIME, WHERE NO PROTEST IS PENDING, OUR STAFF MAY MEET
WITH REPRESENTATIVES OF OTHER AGENCIES WHICH HAVE REQUESTED INFORMAL
ADVICE ON PROPOSED AGENCY PROCUREMENT ACTIONS. SUCH VIEWS OF MEMBERS OF
OUR STAFF -
"*** MUST OF NECESSITY BE REGARDED AS PERSONAL VIEWS ONLY, GIVEN FOR
WHATEVER THEY MAY BE WORTH IN THE WAY OF ASSISTING THE ADMINISTRATIVE
OFFICES IN THE SOLUTION OF THEIR PROBLEMS. THE EXPRESSION OF SUCH
OPINIONS DOES NOT CONSTITUTE AN OFFICIAL ACTION AND CANNOT UNDER ANY
CIRCUMSTANCES BE RECOGNIZED AS CONTROLLING THE ACTION OF THIS OFFICE
(THE COMPTROLLER GENERAL) ON ANY MATTER THAT MAY COME BEFORE IT (HIM)
FOR OFFICIAL DETERMINATION." (E.G., A BID PROTEST.) 4 COMP. GEN. 1024,
1025 (1925).
SEE ALSO 29 COMP. GEN. 335 (1950); 31 ID. 613 (1952). IN ANY EVENT,
OUR DECISION OF TODAY IS BASED ON FACTS AND ISSUES WHICH WERE NOT
SPECIFICALLY BROUGHT TO OUR REPRESENTATIVES' ATTENTION DURING THESE
INFORMAL DISCUSSIONS.
WE WILL FIRST CONSIDER PRC'S PROTEST CONCERNING REHAB'S IMAGE PRICES.
AS NOTED ABOVE, THE FINAL REHAB PRICE SUBMISSION WAS AMBIGUOUS
REGARDING WHETHER THE PROPOSED IMAGE PRICES WERE FOR "QUANTITIES,"
YEARLY PERIODS OR "TERMS." ALTHOUGH THE FIRST AWARD DOCUMENT DID NOT
SPECIFY THE INTERPRETATION ON WHICH THE AWARD WAS BEING MADE, THE SECOND
AWARD DOCUMENT EXPRESSED THE AGREEMENT OF THE PARTIES THAT THE CONTRACT
WOULD BE GOVERNED BY THE "QUANTITY" IMAGE PRICING INTERPRETATION.
SEC EXPLAINS THAT THE FIRST AWARD WAS ALSO BASED ON "QUANTITY" IMAGE
PRICING BECAUSE THAT INTERPRETATION WAS MOST ADVANTAGEOUS TO THE
GOVERNMENT ACCORDING TO THE RFP EVALUATION CRITERIA. (UNDER THE COST
REEVALUATION MADE AFTER THE FIRST BUT PRIOR TO THE SECOND AWARD, THERE
WAS A $15,000 COST DIFFERENTIAL, I.E., REHAB'S EVALUATED IMAGE PRICE BY
"TERM" IS $3,553,792, AS OPPOSED TO ITS EVALUATED PRICE BASED ON
"QUANTITY" OF $3,538,792.) SEC STATES THAT IT COULD CHOOSE THE
INTERPRETATION OF REHAB'S OFFER THAT WAS MOST ADVANTAGEOUS TO THE
GOVERNMENT BECAUSE OF THE CONTRA PROFERENTEM RULE OF CONTRACT
CONSTRUCTION THAT AMBIGUITIES IN A CONTRACT ARE TO BE CONSTRUED AGAINST
THE DRAFTER OF THE AMBIGUOUS TERMS. SEC FURTHER STATES THAT THIS
INTENDED MEANING OF REHAB'S IMAGE PRICING WAS VERIFIED DURING THE
JANUARY 11 AND 12 TELEPHONE CONVERSATIONS WITH REHAB OFFICIALS WHICH
WERE INCORPORATED BY REFERENCE INTO BOTH THE FIRST AND SECOND AWARDS.
SEC ASSERTS THAT THE LEGAL CONSULTANT'S INQUIRY OF REHAB CONCERNING
THE INTENDED IMAGE PRICING DID NOT CONSTITUTE DISCUSSIONS, SINCE THE
MATTER HAD ALREADY BEEN CLARIFIED PRIOR TO THE JANUARY 14 CLOSING DATE
FOR BEST AND FINAL OFFERS, AND REHAB WAS BOUND TO THIS INTERPRETATION IN
ANY CASE BY THE CONTRA PROFERENTEM RULE OF CONSTRUCTION. FURTHERMORE,
BOTH SEC AND REHAB ASSERT THAT SINCE IT WAS MADE CLEAR THAT THE LEGAL
CONSULTANT WAS NOT SEC'S REPRESENTATIVE, HIS QUESTIONS AND REHAB'S
ANSWERS DID NOT CONSTITUTE DISCUSSIONS JUSTIFYING REOPENING NEGOTIATIONS
BECAUSE REHAB WAS NOT AFFORDED ANY OPPORTUNITY TO CHANGE ITS PROPOSAL.
SEC STATES THAT THIS IS EVIDENCED BY SEC'S IGNORING REHAB'S "TERM" IMAGE
PRICING INTERPRETATION IN THE AWARD OF THE SECOND CONTRACT. SEC AND
REHAB DENY ANY OTHER COMMUNICATIONS BETWEEN THEM REGARDING IMAGE PRICING
AFTER THE FIRST AWARD.
THE ONLY EVIDENCE IN THE RECORD THAT THE MEANING OF REHAB'S INTENDED
IMAGE PRICING WAS AGREED UPON PRIOR TO THE JANUARY 14, 1977, CLOSING
DATE FOR BEST AND FINAL OFFERS IS THE AFFIDAVIT OF THE SEC OFFICIAL WHO
SPOKE TO REHAB ON THE TELEPHONE. IN THE FFIDAVIT, HE STATES:
"*** DURING THE TELEPHONE DISCUSSIONS WITH REHAB ON JANUARY 11 AND
12, 1977, I CONFIRMED THAT PRICES WERE FIRM FOR VOLUME, NOT TERM. ***"
ALTHOUGH BOTH AWARD DOCUMENTS INCORPORATED THESE TELEPHONE
CONVERSATIONS BY REFERENCE, THE RECORD DOES NOT REVEAL ANY CONCURRENT
MEMORIALIZATION OF WHAT WAS AGREED UPON IN THE CONVERSATIONS.
THE PROTESTER HAS ASSERTED THAT THE INCORPORATION OF TELEPHONE
CONVERSATIONS - WHICH HAD NOT BEEN MEMORIALIZED - REGARDING THE PRICE OF
THE CONTRACT VIOLATES 31 U.S.C. SEC. 200(A)(1) (1970). THIS STATUTE
PROVIDES THAT NO AMOUNT CAN BE RECORDED AS AN OBLIGATION OF THE UNITED
STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF A BINDING
AGREEMENT IN WRITING BETWEEN THE PARTIES IN A MANNER AND FORM AUTHORIZED
BY LAW. IN THE PRESENT CASE, THERE WAS A WRITTEN AGREEMENT SUFFICIENT
TO SATISFY THIS STATUTE'S REQUIREMENTS, NOTWITHSTANDING THAT IT MAY
INVOLVE SOME PROBLEMS OF INTERPRETATION REGARDING THE TELEPHONE
CONVERSATIONS INCORPORATED BY REFERENCE. IN ANY CASE, THE FAILURE TO
HAVE A WRITTEN AGREEMENT DOES NOT, IN AND OF ITSELF, AFFORD A BASIS FOR
A THIRD PARTY, NOT OF THE CONTRACT, TO OBJECT TO THE CONTRACT'S
LEGALITY. SEE B-184648, DECEMBER 3, 1975. CONTRAST UNITED STATES V.
AMERICAN RENAISSANCE LINES, 494 F.2D 1059 (C.A. D.C. 1974), CERT, DENIED
419 U.S. 1020 (1974), WHERE THE COURT FOUND VOID A PURELY EXECUTORY ORAL
CONTRACT, ON WHICH THE GOVERNMENT SOUGHT RECOVERY FROM THE
DEFENDANT/CONTRACTOR SOME 5 1/2 YEARS AFTER THE PURPORTED AWARD.
NEVERTHELESS, INCORPORATING TELEPHONE CONVERSATIONS - WHOSE CONTENTS
COULD BE SUBJECT TO DISPUTE - INTO A CONTRACT IS CERTAINLY
INAPPROPRIATE. SEE FPR SEC. 1-1.208 (1964 ED. AMEND. 9); B-184648,
SUPRA. IF SEC THOUGHT SOME UNDERSTANDING HAD BEEN REACHED DURING THE
TELEPHONE CONVERSATIONS, IT SHOULD HAVE INSTRUCTED REHAB TO AFFIRM THIS
AGREEMENT IN ITS BEST AND FINAL OFFER RATHER THAN RELYING UPON A RULE OF
CONTRACTUAL CONSTRUCTION. A PRIMARY PURPOSE OF DISCUSSIONS IN A
NEGOTIATED PROCUREMENT IS TO ACHIEVE "COMPLETE AGREEMENT OF THE PARTIES
ON ALL BASIC ISSUES" AND "TO RESOLVE UNCERTAINTIES RELATING TO THE ***
PRICE TO BE PAID." SEE FPR SEC. 1-3.804 (1964 ED. AMEND. 153). IF THE
ORAL CLARIFICATIONS ARE NOT MEMORIALIZED AND A DISAGREEMENT LATER ARISES
REGARDING THEIR CONTENT, THEN A PRIMARY PURPOSE OF CONDUCTING
DISCUSSIONS HAS BEEN THWARTED, SINCE THE RIGHTS OF THE PARTIES MAY STILL
BE INDEFINITE AND UNCERTAIN. SEE B-184648, SUPRA.
FURTHERMORE, NOTWITHSTANDING THE AFFIDAVIT INDICATING THAT THE IMAGE
PRICING PROBLEM IN REHAB'S PROPOSAL WAS TAKEN CARE OF IN THESE TELEPHONE
CONVERSATIONS, THERE IS CONSIDERABLE EVIDENCE IN THE RECORD THAT THERE
WAS "NO MEETING OF THE MINDS" REGARDING REHAB'S IMAGE PRICING PRIOR TO
THE FIRST AWARD.
THE MOST OBVIOUS INDICATION THAT NO PRICE AGREEMENT HAD BEEN REACHED
WAS REHAB'S LETTER DATED FEBRUARY 23, 1977, WHICH STATES:
"AS PER OUR ORIGINAL PROPOSAL AND AS CONFIRMED IN OUR LETTER OF
JANUARY 3, 1977, THE FOLLOWING REPRESENTS OUR EXPLANATION OF COST
PROJECTIONS ASSOCIATED WITH RFP SEC-539.
"AS DEFINED IN THE RFP, TERM REFERS TO FISCAL YEAR, THE FIRST 'YEAR'
EXTENDING FROM THE DATE OF THE AWARD TO SEPTEMBER 30, 1977. OUR QUOTED
COST OF $.145 APPLIES TO THE FIRST TERM OR 'YEAR' OF THE CONTRACT,
REGARDLESS OF THE NUMBER OF IMAGES PROCESSED.
"FOR EXAMPLE, IF THE VOLUME FOR THE FIRST YEAR, OR TERM IS 1.5
MILLION, THE COST PER IMAGE WOULD REMAIN $.145, AS QUOTED. LIKEWISE, IF
THE VOLUME IN THE TWO SUCCEEDING YEARS (TERMS) SHOULD VARY FROM THE
VOLUME INDICATED, THE QUOTED PRICE FOR EACH TERM WOULD REMAIN THE SAME.
EVEN THE 1.5 MILLION IMAGES AS QUOTED IN THE RFP AS THE FIRST YEAR
EVALUATION CRITERIA MAY NOT BE TRUE, SINCE TERM (YEAR) IS DEFINED AS
BEGINNING ON THE DATE OF CONTRACT AWARD.
"THEREFORE, ALL QUOTED COSTS ARE APPLICABLE FOR EACH REMAINING TERM,
OR YEAR, OF THE CONTRACT, REGARDLESS OF VOLUME."
MOREOVER, ALTHOUGH PRICE IS CERTAINLY A CRITICAL FACTOR IN A
CONTRACT, REHAB MERELY CONFIRMED ITS AMBIGUOUS JANUARY 3, 1977, PRICE
PROPOSAL IN ITS JANUARY 14 BEST AND FINAL OFFER WITHOUT MAKING ANY
REFERENCE TO A CLARIFICATION OR UNDERSTANDING OF IMAGE PRICING. INDEED,
REHAB STILL ASSERTS THAT ITS INTENDED IMAGE PRICING SCHEME WAS BASED ON
"TERM." FURTHERMORE, REHAB DOES NOT CONFIRM OR MENTION THE JANUARY 11
AND 12 TELEPHONE CONVERSATIONS IN THE EXTENSIVE BRIEFS AND AFFIDAVITS IT
HAS SUBMITTED IN THIS CASE.
ALSO, IF AGREEMENT ON THE IMAGE PRICING HAD BEEN REACHED, WHY DID THE
LEGAL CONSULTANT FEEL A NEED TO BROACH THE SUBJECT AND REHAB FEEL
COMPELLED TO RESPOND? ALSO, SEC SPELLED OUT AND REQUIRED REHAB TO AGREE
TO THE AGENCY VERSION OF REHAB'S IMAGE PRICING IN THE SECOND AWARD
DOCUMENT.
FINALLY, AT THE DEBRIEFING, PRC WAS REPEATEDLY INFORMED THAT REHAB
PROPOSED IMAGE PRICES BASED ON "TERM." FOR EXAMPLE, THE SEC ATTORNEY
CONDUCTING THE DEBRIEFING SUMMARIZED REHAB'S IMAGE PRICING SCHEME AS
FOLLOWS:
"*** REHAB SUBMITTED TO THE COMMISSION A FIRM FIXED PRICE INDEFINITE
QUANTITY PROPOSAL IN WHICH THERE WAS A SPECIFIC FIGURE SET FOR A PER
IMAGE EVENT, IRRESPECTIVE OF THE VOLUME, IRRESPECTIVE, AS I UNDERSTAND,
OF FACTORS THAT MAY FLUCTUATE DURING THE TERMS IN ISSUE.
"SO, FOR TERM ONE, REHAB SET FOR TERM ONE WE WILL CHARGE YOU 'X' PER
IMAGE; FOR TERM TWO, WE WILL CHARGE YOU 'Y'; AND FOR TERM THREE, WE
WILL CHARGE YOU 'Z,' AND IF THE EARTH SHOULD OPEN UP AND DISASTROUS
THINGS SHOULD HAPPEN, THAT IS THE PRICE WE WILL BE WILLING TO STAND
BEHIND." (SEE P. 20 OF PRC DEBRIEFING CONFERENCE MINUTES.)
EVEN THE SEC OFFICIAL, WHO SPOKE TO REHAB ON THE TELEPHONE ON JANUARY
11 AND 12 AND WHO WAS IN ATTENDANCE AT THE PRC DEBRIEFING, INDICATED TO
PRC THAT REHAB HAD INTENDED "TERM" IMAGE PRICES. HE SAID TO PRC:
"THE UNIT PRICE OFFERED BY REHAB, FIRST TERM, .139; FOR THE SECOND
TERM, .133; FOR THE THIRD TERM, .141." (SEE P. 125 OF PRC DEBRIEFING
CONFERENCE MINUTES.)
(THERE IS SOME IMPLICATION FROM ANOTHER SEC REPRESENTATIVE'S
STATEMENTS AT THE DEBRIEFING THAT REHAB'S IMAGE PRICES MAY HAVE BEEN
BASED ON "QUANTITY"; HOWEVER, THE DISCUSSION IS TOTALLY AMBIGUOUS AND
UNCLEAR ON THIS POINT. SEE PP. 58-59 OF PRC DEBRIEFING CONFERENCE
MINUTES.)
WITH REGARD TO SEC'S ASSERTIONS THAT REHAB WAS OTHERWISE BOUND IN THE
FIRST AWARD TO THE IMAGE PRICING "QUANTITY" INTERPRETATION, IT IS CLEAR
THAT CONTRACTS SHOULD NOT BE AWARDED IN NEGOTIATED PROCUREMENTS BASED
UPON AMBIGUOUS OFFERS THROUGH THE APPLICATION OF THE CONTRA PROFERENTEM
RULE OF CONSTRUCTION AGAINST THE OFFEROR. DISCUSSIONS ARE SUPPOSED TO
BE USED TO CLARIFY AMBIGUOUS PROPOSALS. FPR SEC. 1-3.804, SUPRA;
GARRETT CORPORATION, B-182991, B-182903, JANUARY 13, 1976, 76-1 CPD 20.
WE RECOGNIZE THAT THIS RULE OF CONSTRUCTION HAS BEEN APPLIED TO THE
INTERPRETATION OF CONTRACTS, SEE, E.G., 16 COMP. GEN. 569 (1936); WPC
ENTERPRISES, INCORPORATED V. UNITED STATES, 323 F.2D 874 (CT. CL 1963),
AND, IN APPROPRIATE CIRCUMSTANCES, TO THE INTERPRETATION OF BIDS UNDER
FORMALLY ADVERTISED PROCUREMENTS (E.G. WHERE NO OTHER BIDDERS ARE
PREJUDICED). SEE 39 COMP. GEN. 546 (1960); 43 ID. 663 (1964).
HOWEVER, WE ARE UNAWARE OF ANY DECISIONS WHICH APPLY THIS RULE TO
PROPOSALS IN NEGOTIATED PROCUREMENTS PRIOR TO AWARD, WHERE DISCUSSIONS
ARE GENERALLY THE RULE. UNLIKE A BID UNDER AN IFB - WHICH IS AN
IRREVOCABLE OFFER FOR A REASONABLE AMOUNT OF TIME ONCE SUBMITTED (I.E.,
THE "FIRM BID RULE," SEE 49 COMP. GEN. 395 (1969)) - A PROPOSAL IN A
NEGOTIATED PROCUREMENT MAY BE DISCUSSED AND CHANGED. FOR EXAMPLE,
DISCUSSIONS SHOULD BE HELD WHERE OFFERED PRICE IS AMBIGUOUS. SEE FPR
SEC. 1-3.804, SUPRA.
FURTHER, THE "QUANTITY" INTERPRETATION OF IMAGE PRICING IN THE FIRST
AWARD UNDER THE CONTRA PROFERENTEM RULE OF CONTRACT CONSTRUCTION WOULD
SEEM INAPPROPRIATE, ALSO BECAUSE IT IS NOT NECESSARILY THE MOST
ADVANTAGEOUS TO THE GOVERNMENT IN ALL INSTANCES. ALTHOUGH THE
"QUANTITY" IMAGE PRICING MAY BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT
UNDER THE RFP EVALUATION CRITERIA (EVALUATION BASED ON A HYPOTHETICAL
1.5 MILLION IMAGES FOR THE FIRST TERM, 5 MILLION IMAGES FOR THE SECOND
TERM, AND 6 MILLION IMAGES FOR THE THIRD TERM), IT MAY NOT BE THE MOST
ADVANTAGEOUS IF THE VOLUME OF IMAGES ACTUALLY PROCESSED UNDER THE
CONTRACT TURNS OUT TO BE HIGHER OR LOWER THAN ESTIMATED. SUBSTANTIAL
VOLUME VARIANCES COULD MEAN SIGNIFICANT DOLLAR DIFFERENCES IN THE
GOVERNMENT'S LIABILITY UNDER THE CONTRACT DEPENDING ON WHETHER IMAGE
PRICING BY "QUANTITY" OR "TERM" IS APPLICABLE.
MOREOVER, WHERE THE GOVERNMENT HAS BEEN PUT ON DIRECT NOTICE THAT THE
OFFEROR'S INTENDED PRICING IS DIFFERENT FROM THE GOVERNMENT'S
INTERPRETATION OF THE CLEARLY AMBIGUOUS PROPOSAL, THE GOVERNMENT CANNOT
COMPEL THE OFFEROR TO ACCEPT THE GOVERNMENT'S INTERPRETATION IN THE
AWARD. SUCH AN AWARD IN A NEGOTIATED PROCUREMENT BY THE GOVERNMENT
VARYING THE INTENDED TERMS OF THE OFFER CONSTITUTES THE INITIATION OF
DISCUSSIONS, SINCE THE OFFEROR CAN EITHER ACCEPT OR REJECT THE AWARD
BASIS PROPOSED BY THE GOVERNMENT. CF. COMPUTER NETWORK CORPORATION ET
AL., B-186858, JUNE 13, 1977, 56 COMP. GEN. ___. SINCE SEC WAS
EXPRESSLY MADE AWARE THAT REHAB'S INTENDED IMAGE PRICING WAS BASED ON
"TERM" RATHER THAN "QUANTITY," THE SECOND AWARD INCORPORATING IMAGE
PRICES BASED ON "QUANTITY" COULD HAVE BEEN REJECTED BY REHAB; ALTHOUGH
REHAB ACCEPTED THE GOVERNMENT'S VERSION IN SIGNING THE AWARD DOCUMENT.
WHETHER DISCUSSIONS HAVE BEEN HELD IS A MATTER TO BE DETERMINED UPON
THE BASIS OF THE PARTICULAR ACTIONS OF THE PARTIES, AND NOT MERELY UPON
THE CHARACTERIZATIONS OF THE CONTRACTING AGENCY. FOOD SCIENCE
ASSOCIATES, INC., B-183054, APRIL 30, 1975, 75-1 CPD 269; CENTRO
CORPORATION, B-186842, JUNE 1, 1977. WE HAVE HELD THAT DISCUSSIONS HAVE
BEEN CONDUCTED WHERE THE OFFEROR HAS BEEN AFFORDED AN OPPORTUNITY TO
CHANGE OR MODIFY ITS PROPOSAL, REGARDLESS OF WHETHER SUCH OPPORTUNITY TO
REVISE OR MODIFY RESULTED FROM ACTIONS INITIATED BY THE GOVERNMENT OR
THE OFFEROR. 51 COMP. GEN. 479 (1972). REHAB HAD THE RIGHT IN THE
PRESENT CASE TO REJECT SEC'S PROFFERRED "AWARD" OR PROPOSE SOME
COMPROMISE ON THE DISPUTED PRICE TERMS.
THE FACT THAT IT WAS THE INQUIRY OF THE LEGAL CONSULTANT - WHO SEC
STATES WAS NOT ITS AGENT - MAY HAVE BEEN THE PROXIMATE CAUSE FOR
SURFACING THE CONFUSION BETWEEN REHAB AND SEC REGARDING REHAB'S PROPOSED
PRICE DOES NOT MAKE THE APPARENT FAILURE TO PREVIOUSLY ACHIEVE COMMON
AGREEMENT ON PRICE AND SEC'S KNOWLEDGE OF THE PROBLEM ANY LESS REAL. IN
VIEW OF THE SUBSEQUENT COURSE OF ACTION INVOLVING SEC'S ESSENTIALLY
MODIFYING THE PRICE IT KNEW WAS INTENDED BY REHAB IN THE SECOND AWARD
DOCUMENT, THE FACT THAT THE LEGAL CONSULTANT MAY NOT HAVE BEEN SEC'S
AGENT IS IRRELEVANT.
THE CASES CITED BY SEC AND REHAB FOR THE PROPOSITION THAT NO
DISCUSSIONS WERE CONDUCTED ARE DISTINGUISHABLE FROM THE PRESENT
SITUATION. IN B-170989, B-170990, NOVEMBER 17, 1971, A MEETING WITH AN
OFFEROR AFTER THE CLOSE OF NEGOTIATIONS, WHICH WAS INTENDED ONLY AS AN
OPPORTUNITY FOR THE CONTRACTOR TO EXPLAIN ITS PRICE REDUCTIONS AND WAS
IN FACT SO LIMITED, DID NOT CONSTITUTE DISCUSSIONS. UNLIKE THE PRESENT
CASE, THERE WAS NO OPPORTUNITY FOR THE OFFEROR TO MAKE ANY CHANGE IN ITS
PROPOSAL OR FOR THE GOVERNMENT REPRESENTATIVES TO EFFECT ANY CHANGE IN
THE SOLICITATION PROVISIONS. IN FECHHEIMER BROTHERS, INC., B-184751,
JUNE 24, 1976, 76-1 CPD 404, A CONTRACTING OFFICER ALLOWED AN OFFEROR TO
SUBMIT A CERTIFICATION THAT ITS SAMPLE MET THE SPECIFICATIONS AFTER THE
CLOSING DATE. THIS WAS NOT DISCUSSIONS BECAUSE THE OFFEROR HAD ALREADY
COMMITTED ITSELF, BY SIGNING AND SUBMITTING A PROPOSAL, TO COMPLY WITH
THE SPECIFICATIONS, SO THE CERTIFICATION DID NOT ADD TO THE LEGAL
OBLIGATIONS THE OFFEROR WOULD HAVE UPON RECEIVING THE AWARD. IN THE
PRESENT CASE, HOWEVER, REHAB WAS NOT BOUND TO THE GOVERNMENT'S
INTERPRETATION OF THE AMBIGUOUS PRICE PROPOSAL BECAUSE IT HAD PREVIOUSLY
MADE SEC AWARE (ALBEIT INDIRECTLY) THAT THIS INTERPRETATION WAS NOT THE
INTENDED ONE.
THE IMAGE PRICING "QUANTITY"/"TERM" DICHOTOMY IS NOT THE ONLY
PECULIARITY OF THE SEC/REHAB PRICE AGREEMENT. IN REHAB'S JANUARY 3,
1977, FINAL PRICE SUBMISSION, ALTHOUGH THE PRICES FOR SOFTWARE AND
TRAINING (TOTALING $32,500) ARE STATED, THEY WERE INCLUDED IN THE
INITIAL $0.139 IMAGE UNIT PRICE (FOR THE FIRST TERM OR FIRST 5 MILLION
IMAGES). IN HIS AFFIDAVIT, THE SEC OFFICIAL WHO SPOKE TO REHAB ON THE
TELEPHONE STATES THAT DURING THE JANUARY 11 AND 12 TELEPHONE
CONVERSATIONS HE DISCUSSED WITH REHAB THE PROBLEMS INVOLVING THE
INCLUSION OF SOFTWARE AND TRAINING IN THE IMAGE PRICE, BUT NO CHANGE WAS
MADE BECAUSE IT MADE NO DIFFERENCE IN THE EVALUATED PRICE.
THE SECOND AWARD DOCUMENT SET A PRICE OF $0.133 PER IMAGE FOR THE
FIRST 5 MILLION IMAGES. SEC EXPLAINS THAT THIS LOWER IMAGE RATE IS A
RESULT OF BREAKING OUT THE FIXED PRICES FOR THE SOFTWARE AND TRAINING SO
THAT THESE ITEMS COULD BE SEPARATELY PAID. HOWEVER, THIS INTENT IS
NOWHERE MEMORIALIZED IN THE SECOND AWARD DOCUMENT.
UNDER THE "QUANTITY" IMAGE PRICING INTERPRETATION, REHAB WOULD HAVE
EVENTUALLY BEEN PAID FOR MOST OF THE $32,500 IN SOFTWARE AND TRAINING
($0.139 - $0.133 = $0.006 X 5 MILLION IMAGES = $30,000). IF THE IMAGE
PRICE HAD BEEN DEPENDENT ON "TERM," HOWEVER - WHICH REHAB STILL ASSERTS
WAS ITS INTENDED PRICING SCHEME - THERE WOULD BE NO CERTAINTY THAT A
SUFFICIENT VOLUME OF IMAGES WOULD HAVE BEEN PROCESSED IN THE FIRST TERM
TO COVER THE SOFTWARE AND TRAINING COSTS. (THE RECORD INDICATES THAT
SUBSTANTIALLY LESS THAN 5 MILLION IMAGES (I.E., 1.5 MILLION IMAGES) WERE
APPARENTLY INTENDED TO BE PROCESSED IN THE FIRST TERM.)
MOREOVER, UNDER THE SECOND AWARD - ASSUMING THERE WAS NO DISAGREEMENT
REGARDING THE NONMEMORIALIZED TREATMENT OF SOFTWARE AND TRAINING - REHAB
WOULD NOT HAVE TO WAIT FOR SUFFICIENT IMAGES TO BE PROCESSED TO COVER
THE PRICE FOR THESE SERVICES, BUT RATHER COULD BILL FOR THE SERVICES
UPON THEIR COMPLETION - WHICH PROBABLY IS TO REHAB'S BENEFIT.
THEREFORE, IT WOULD APPEAR THAT THE PRICE TREATMENT OF SOFTWARE AND
TRAINING WAS ALSO THE SUBJECT OF DISCUSSIONS WITH REHAB.
THERE IS ANOTHER PECULIARITY IN THE IMAGE PRICING WHICH ALSO SHOWS
THAT THE SECOND AWARD DOCUMENT CONSTITUTED THE INITIATION OF
DISCUSSIONS. IN REHAB'S JANUARY 3, 1977, FINAL PRICE SUBMISSION, IT
PROPOSED ALTERNATIVE IMAGE RATES ($0.139, $0.133, $0.141 AND $0.145,
$0.138, $0.146). THE FIRST GROUP OF RATES ARE LABELED IN THE FINAL
PRICE SUBMISSION AS THE "COST PER DOCUMENTS WITHOUT THE MINI AND
MAINTENANCE." THE SECOND GROUP OF RATES ARE APPARENTLY FOR THE OPERATION
OF A COMPLETE SYSTEM, INCLUDING THE MINICOMPUTER WITH MAINTENANCE.
THE FIRST AWARD LETTER DID NOT STATE WHICH ALTERNATIVE THE GOVERNMENT
SELECTED IN MAKING THE AWARD, ALTHOUGH FROM OTHER INFORMATION IN THE
RECORD IT IS CLEAR THAT THE LOWER RATES WERE INTENDED BY THE GOVERNMENT
TO BE THE CONTRACT RATES. IN REHAB'S FEBRUARY 23, 1977, LETTER,
EXPLAINING ITS INTENDED IMAGE PRICING, REHAB STATES ITS QUOTED PRICE FOR
THE FIRST TERM WAS $0.145 PER IMAGE. IT WOULD APPEAR THAT BECAUSE IT
WAS NOT STATED WHETHER THE FIRST AWARD WAS FOR THE "WITHOUT
MINICOMPUTER" ALTERNATIVE RATES OR THE "WITH MINICOMPUTER" ALTERNATIVE
RATES, THERE WAS NO "MEETING OF THE MINDS" IN THE FIRST AWARD ON THIS
POINT EITHER. REHAB'S FEBRUARY 23 LETTER SHOULD HAVE MADE THIS APPARENT
TO SEC.
THE SECOND AWARD DOCUMENT SPECIFICALLY INCORPORATES THE RATES QUOTED
FOR THE "WITHOUT MINICOMPUTER" ALTERNATIVE. HOWEVER, THE RECORD
INDICATES THAT THE MINICOMPUTER WITH MAINTENANCE SEEMS TO BE INCLUDED IN
THE AWARDED SYSTEM. SINCE THE SECOND AWARD WAS NOT BASED ON AN
ALTERNATIVE PROPOSED BY REHAB, THE SECOND AWARD DOCUMENT AND REHAB'S
ACCEPTANCE BY SIGNING THE DOCUMENT SEEMS TO CONSTITUTE DISCUSSIONS FOR
THIS REASON ALSO.
IF DISCUSSIONS HAVE BEEN CONDUCTED WITH ONE OFFEROR, IT IS REQUIRED
THAT DISCUSSIONS BE CONDUCTED WITH ALL OFFERORS WITHIN THE COMPETITIVE
RANGE, INCLUDING AN OPPORTUNITY TO SUBMIT REVISED OFFERS. SEE FPR SEC.
1-3.805-1, SUPRA; 50 COMP. GEN. 202 (1970); 51 ID. 102 (1971); ID.
479 (1972); BURROUGHS CORPORATION, 56 COMP. GEN. 142 (1976), 76-2 CPD
472; AIRCO, INC. V. ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION, 528
F.2D 1294 (7TH CIR. 1975). THE COMPETITION SHOULD GENERALLY BE
REOPENED, EVEN WHEN THE IMPROPER POST-SELECTION NEGOTIATIONS DO NOT
DIRECTLY AFFECT THE OFFERORS' RELATIVE STANDING, BECAUSE ALL OFFERORS
ARE ENTITLED TO EQUAL TREATMENT AND AN OPPORTUNITY TO REVISE THEIR
PROPOSALS. SEE 49 COMP. GEN. 402 (1969), MODIFIED ON OTHER GROUNDS IN
DONALD N. HUMPHRIES AND ASSOCIATES ET AL., 55 COMP. GEN. 432 (1975),
75-2 CPD 275; 50 COMP. GEN., SUPRA; CORBETTA CONSTRUCTION COMPANY OF
ILLINOIS, INC., 55 COMP. GEN. 201 (1975), 75-2 CPD 144, AFFIRMED 55
COMP. GEN. 972 (1976), 76-1 CPD 240; AIRCO, SUPRA. IN THIS REGARD,
ALTHOUGH IT HAS BEEN ARGUED THAT PRC WAS NOT PREJUDICED IF DISCUSSIONS
WERE IN FACT CONDUCTED WITH REHAB, THE POINT IS THAT EVERY OFFEROR
WITHIN A COMPETITIVE RANGE HAS THE RIGHT TO CHANGE OR MODIFY ITS
PROPOSAL, INCLUDING PRICE, FOR ANY REASON WHATEVER, SO LONG AS
NEGOTIATIONS ARE STILL OPEN; AND THAT REHAB, BUT NOT PRC, WAS AFFORDED
THIS OPPORTUNITY. 49 COMP. GEN., SUPRA; CORBETTA, SUPRA; AIRCO,
SUPRA. PRC'S DEBRIEFING DID NOT CONSTITUTE MEANINGFUL DISCUSSIONS, AS
IS SUGGESTED BY REHAB, SINCE PRC WAS AFFORDED NO OPPORTUNITY TO CHANGE
OR REVISE ITS PROPOSAL. SEE GROUP OPERATIONS, INCORPORATED, 55 COMP.
GEN. 1315 (1976), 76-2 CPD 79.
BOTH HUMPHRIES, SUPRA, AND NORTHRUP SERVICES, INC., B-184560, JANUARY
28, 1977, 77-1 CPD 71 (CITED BY SEC AND REHAB), REPRESENT UNUSUAL
CIRCUMSTANCES WHERE THE AGENCIES SUDDENLY ENCOUNTERED FUNDING PROBLEMS
AFTER THE CLOSING DATE. WE FOUND UNDER THE PARTICULAR CIRCUMSTANCES OF
THESE CASES THAT WHAT WOULD ORDINARILY BE REGARDED AS DISCUSSIONS WAS
NOT A SUFFICIENT REASON TO REOPEN NEGOTIATIONS WITH THE OTHER OFFERORS
IN THE COMPETITIVE RANGE.
IN HUMPHRIES, SUPRA, SINCE THE REDUCTION IN FUNDS AFTER THE CLOSING
DATE DID NOT PERMIT THE AWARD ORIGINALLY CONTEMPLATED, AN AGENCY COULD
EXTEND AN OPPORTUNITY ONLY TO THE SUCCESSFUL OFFERORS TO ACCEPT AWARD
FOR A 22-PERCENT REDUCED SCOPE OF WORK AT THE SAME PROPOSED UNIT PRICE,
SINCE THE OTHER OFFERORS' RELATIVE POSITIONS WOULD NOT BE AFFECTED IN
THIS CASE BY SUCH AN OPPORTUNITY. THE FUNDING PROBLEM WAS AN EVENT THAT
WAS NOT FORESEEABLE OR CAUSED BY THE SUCCESSFUL OFFEROR IN HUMPHRIES.
IN THE PRESENT CASE, HOWEVER, NO FUNDING PROBLEM EXISTED. ALSO, IT WAS
CERTAINLY FORESEEABLE THAT PROBLEMS MIGHT OCCUR WITH REHAB'S AMBIGUOUS
PROPOSAL IF IT WAS NOT PROPERLY CLARIFIED. ALSO, UNLIKE HUMPHRIES,
REHAB DID CHANGE ITS INTENDED PRICE BY AGREEING TO THE GOVERNMENT PRICE
INTERPRETATION.
SIMILARLY, IN NORTHRUP, SUPRA, SINCE THE REDUCTION IN FUNDS AFTER THE
CLOSING DATE DID NOT ALLOW AN AWARD FOR THE ORIGINALLY CONTEMPLATED
28-MONTH TERM, AN AGENCY COULD EXTEND AN OPPORTUNITY ONLY TO THE
SUCCESSFUL OFFEROR TO ACCEPT AWARD FOR 16 MONTHS AT THE PRORATED
PROPOSAL PRICE, SINCE THE SUCCESSFUL OFFEROR'S SELECTION WOULD NOT HAVE
BEEN AFFECTED IF OTHER OFFERORS HAD BEEN GIVEN THE SAME OPPORTUNITY. IN
THIS CASE, IT WAS PARTICULARLY SIGNIFICANT THAT THE OFFERORS PROPOSED ON
A 16-MONTH BASIS ALSO AND THAT THE SUCCESSFUL OFFEROR HAD BEEN SELECTED
ON THE BASIS OF TECHNICAL SUPERIORITY. BESIDES THE FACTORS SET OUT
ABOVE WHICH DISTINGUISH HUMPHRIES, SUPRA, AND NORTHRUP, SUPRA, FROM THE
PRESENT CASE, THE REHAB AWARD SELECTION WAS ULTIMATELY BASED ON PRICE
RATHER THAN TECHNICAL MERIT AS IN NORTHRUP, SUPRA.
IN ADDITION TO SEC'S FAILURE TO CONDUCT DISCUSSIONS WITH PRC AS WELL
AS REHAB, THE SECOND REHAB AWARD WITH THE "QUANTITY" IMAGE PRICING
SCHEME VIOLATES SECTION II.2.1 OF THE RFP INSTRUCTIONS. THIS SECTION
STATES:
"FIXED PRICES
"TO BE CONSIDERED RESPONSIVE TO THE SOLICITATION, OFFERORS MUST OFFER
FIXED PRICES FOR THE INITIAL CONTRACT PERIOD FOR THE INITIAL SYSTEM OR
ITEMS BEING PROCURED. FIXED PRICES, OR PRICES WHICH CAN BE FINITELY
DETERMINED MUST BE QUOTED FOR TWO SEPARATE OPTION RENEWAL PERIODS AND
REMAIN IN EFFECT THROUGHOUT THAT PERIOD. WHERE OPTIONAL QUANTITIES ARE
OFFERED, PRICES MUST BE FIXED OR FINITELY DETERMINABLE."
THIS CLAUSE CLEARLY REQUIRES OFFERORS TO PROPOSE "FIXED" OR "FINITELY
DETERMINABLE" PRICES FOR THE ENTIRE INITIAL CONTRACT AND EVALUATED
OPTION PERIODS. SEE COMPUTER MACHINERY CORPORATION, 55 COMP. GEN. 1151
(1976), 76-1 CPD 358, AFFIRMED C3, INC., B-185592, AUGUST 5, 1976, 76-2
CPD 128; BURROUGHS, SUPRA; COMPUTER NETWORK, SUPRA, WHERE WE FOUND
OFFERORS' PROPOSALS UNDER PROCUREMENTS WITH SUBSTANTIALLY IDENTICAL
"FIXED PRICES" PROVISIONS TO BE UNACCEPTABLE BECAUSE THEY DID NOT
PROPOSE A "FIXED" OR "FINITELY DETERMINABLE" PRICE FOR ALL PERIODS.
ALTHOUGH WE BELIEVE IT WAS PERMISSIBLE TO BASE IMAGE PRICES ON
QUANTITIES, SEE PRC'S PROPOSAL OFFERING VARYING DAILY IMAGE VOLUME
RATES, THE RATES MUST BE "FIXED" OR "FINITELY DETERMINABLE" FOR ALL
EVALUATED PERIODS OF THE SYSTEM. UNDER REHAB'S PRICING SCHEME, IF THE
VOLUME EXCEEDED 18 MILLION IMAGES DURING THE FIRST THREE TERMS, THERE
WOULD BE NO PRICE APPLICABLE FOR THE ADDITIONAL IMAGES. SEE COMPUTER
MACHINERY CORPORATION, SUPRA. ALTHOUGH SEC ASSERTED AT THE BID PROTEST
CONFERENCE THAT THIS VOLUME PROBABLY WILL NOT BE ACHIEVED, THERE IS NO
PROVISION IN THE RFP OR THE REHAB CONTRACT LIMITING IMAGE PROCESSING TO
18 MILLION IMAGES. (SECTION F.8.B. OF THE RFP INDICATES THAT 18 MILLION
IMAGES ARE THE ESTIMATE (NOT THE LIMITATION) FOR THE FIRST THREE TERMS.)
THEREFORE, REHAB'S SECOND AWARD IS BASED ON A PROPOSAL WHICH IS
UNACCEPTABLE UNDER THE RFP "FIXED PRICES" CLAUSE.
DURING OUR REVIEW, WE NOTED THAT PRC'S FINAL COST SUBMISSION ALSO WAS
NOT "FIXED" OR "FINITELY DETERMINABLE" FOR ALL OF THE EVALUATED TERMS.
ALTHOUGH PRC'S QUOTED VARYING DAILY IMAGE RATES WERE APPLICABLE IN ALL
INSTANCES TO THE INITIAL CONTRACT TERM, THE IMAGE RATES FOR THE TWO
EVALUATED OPTION TERMS WERE THE SAME UNIT PRICES "ADJUSTED EACH 1
OCTOBER BY THE PERCENTAGE INCREASE IN THE COST OF LIVING INDEX FOR THE
WASHINGTON, D. C. AREA OVER THE PREVIOUS 12 MONTH PERIOD AS DETERMINED
BY THE BUREAU OF LABOR STATISTICS." WE BELIEVE THE "FIXED PRICES" CLAUSE
CONTEMPLATES PRICES THAT ARE "FIXED" OR "FINITELY DETERMINABLE" AS OF
THE TIME OF AWARD, SO THAT A PROPER PRICE EVALUATION CAN BE MADE FOR
AWARD SELECTION PURPOSES. SEE COMPUTER MACHINERY CORP., SUPRA. SINCE
THE COST OF LIVING INDEX FOR FUTURE YEARS IS SPECULATIVE, PRC'S PROPOSAL
ALSO DID NOT PROPOSE A "FIXED" OR "FINITELY DETERMINABLE" PRICE FOR ALL
EVALUATED PERIODS. HOWEVER, SEC DID NOT OBJECT TO PRC'S PROPOSAL FOR
THIS REASON. FURTHERMORE, THIS IS THE KIND OF PROBLEM THAT SHOULD BE
CURED IN MEANINGFUL DISCUSSIONS.
REHAB AND SEC HAVE ARGUED THAT SEC'S ACTIONS WERE REASONABLE UNDER
THE CIRCUMSTANCES BECAUSE A NEW ROUND OF BEST AND FINAL OFFERS WOULD
HAVE CONSTITUTED A PROHIBITED AUCTION TECHNIQUE. SEE FPR SEC.
1-3.805-1(B), SUPRA. WHILE OUR OFFICE DOES NOT SANCTION THE DISCLOSURE
OF INFORMATION WHICH WOULD GIVE ANY OFFEROR AN UNFAIR COMPETITIVE
ADVANTAGE, THERE IS NOTHING INHERENTLY ILLEGAL IN THE CONDUCT OF AN
AUCTION IN A NEGOTIATED PROCUREMENT. 48 COMP. GEN. 536 (1969); TM
SYSTEMS, INC., 55 COMP. GEN. 1066 (1976), 76-1 CPD 299; HONEYWELL
INFORMATION SYSTEMS, INC., B-186313, APRIL 13, 1977, 56 COMP. GEN. ___,
77-1 CPD 256. IN HONEYWELL, SUPRA (AFFIRMING BURROUGHS, SUPRA), WE
RECOMMENDED A NEW ROUND OF BEST AND FINAL OFFERS, EVEN THOUGH THE
AWARDEE'S INITIAL EQUIPMENT CONFIGURATION AND PRICES HAD BEEN DISCLOSED
TO THE PROTESTER, WHERE THE AWARD WAS BASED ON AN UNACCEPTABLY LATE
PRICE PROPOSAL AND AN UNACCEPTABLE TECHNICAL PROPOSAL WHICH WAS
CORRECTED AFTER THE CLOSING DATE, NOTWITHSTANDING THE AGENCY'S AND
HONEYWELL'S OBJECTIONS TO THE AUCTION ATMOSPHERE. ALSO, SEE TM SYSTEMS,
INC., SUPRA, AND AXEL AND DEUTSCHMANN, B-187798, MAY 12, 1977, 77-1 CPD
339, WHERE SIMILAR REMEDIES WERE PROPOSED TO ALLOW FOR EQUAL TREATMENT
OF THE OFFERORS, NOTWITHSTANDING AN AUCTION ATMOSPHERE. WE HAVE TAKEN
THIS POSITION BECAUSE OF THE PRIMACY OF THE STATUTORY REQUIREMENTS FOR
COMPETITION OVER THE REGULATORY PROHIBITIONS OF AUCTION TECHNIQUES.
HONEYWELL, SUPRA; AXEL AND DEUTSCHMANN, SUPRA. CF. MINJARES BUILDING
MAINTENANCE COMPANY, 55 COMP. GEN. 864 (1976), 76-1 CPD 168. CONTRAST
50 COMP. GEN. 222 (1970) (CITED BY REHAB AND SEC), WHICH INVOLVED AN
OTHERWISE PROPER AWARD - APART FROM THE IMPROPER PRICE DISCLOSURE BY THE
GOVERNMENT - WHERE WE HELD THAT AN AGENCY SHOULD MAKE AN AWARD, IF
POSSIBLE, WITHOUT FURTHER DISCUSSIONS TO PREVENT AN AUCTION SITUATION.
THE PRESENT SITUATION IS ALSO DIFFERENT FROM SATURN SYSTEMS, INC.,
B-184336, MARCH 2, 1976, 76-1 CPD 145, WHERE AN IMPROPER AWARD WAS
TERMINATED AFTER A REEVALUATION UNDER THE RFP EVALUATION CRITERIA AND
THE REQUIREMENT WAS REAWARDED TO THE TRUE LOWEST-PRICED OFFEROR UNDER
THE RFP EVALUATION CRITERIA. SINCE THE AGENCY DID NOT RESOLICIT IN
SATURN, SEC AND REHAB CONTEND THAT IT WOULD BE INAPPROPRIATE TO DO SO IN
THE PRESENT CASE BECAUSE OF THE AUCTION POSSIBILITIES. BUT SATURN
INVOLVED THE MISEVALUATION OF PROPOSALS RATHER THAN THE UNEQUAL
TREATMENT OF OFFERORS. THE LATTER SITUATION CAN ONLY BE CURED BY
SOLICITING A NEW ROUND OF BEST AND FINAL OFFERS.
SEC AND REHAB ALSO ARGUE THAT PRC SHOULD NOT BE ALLOWED TO FORCE A
RECOMPETITION WHERE IT CREATED THE AUCTION SITUATION BY AGGRESSIVELY
SEEKING THE CONTENTS OF REHAB'S PROPOSAL, INCLUDING UNIT PRICES, AT THE
DEBRIEFING. SEC DID NOT HAVE TO DISCLOSE ANY INFORMATION TO PRC THAT IT
DETERMINED SHOULD NOT BE DISCLOSED UNDER THE FREEDOM OF INFORMATION ACT,
5 U.S.C. SEC. 552 (1970). SEC AND REHAB WOULD HAVE US FIND THAT A
PARTY ATTEMPTING TO ASCERTAIN WHY IT WAS UNSUCCESSFUL ON A PROCUREMENT
AND WHETHER IT HAS ANY BASES FOR PROTESTING THE AWARD BARS ITSELF FROM
RECEIVING A MEANINGFUL REMEDY IF IT IS SUCCESSFUL IN ITS EFFORTS. WE
FIND THIS ARGUMENT INCONGRUOUS.
SEC HAS ASSERTED THAT EVEN THOUGH IT MAY HAVE ERRED IN THE CONDUCT OF
THIS PROCUREMENT, IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO
TERMINATE THE CONTRACT AT THIS TIME. SEC SUGGESTS THAT IF ANY REMEDY IS
NECESSARY, THE OPTION PERIODS SHOULD BE RESOLICITED AFTER THE SYSTEM IS
INSTALLED, TESTED, AND MADE OPERATIONAL BY REHAB.
IN THIS REGARD, SEC ASSERTS THAT IT IS IMPORTANT TO THE AGENCY
MISSION TO GET THE SYSTEM OPERATIONAL AS SOON AS POSSIBLE. THE SYSTEM
IS TO FILM, STORE AND RETRIEVE DOCUMENTS WHICH PUBLICLY HELD COMPANIES
ARE REQUIRED TO FILE WITH SEC IN ORDER TO ENSURE THAT CERTAIN
INFORMATION IS AVAILABLE TO THE INVESTING PUBLIC. THE SYSTEM REPLACES
THE PRESENT "PAPER FILING" SYSTEM - WHICH HAS BEEN THE OPERATING SYSTEM
FOR OVER 40 YEARS - IN RECOGNITION OF THE LIMITATIONS OF THE PRESENT
SYSTEM (E.G., THE ACCELERATING NUMBER OF DOCUMENTS FILED AT SEC).
CONSEQUENTLY, SEC ASSERTS THAT A DELAY IN IMPLEMENTING THE NEW AUTOMATED
MICROGRAPHICS SYSTEM WILL HARM THE PUBLIC AS WELL AS THE AGENCY'S
INTEREST IN HAVING A MORE EFFICIENT SYSTEM TO HELP PROTECT THE INVESTING
PUBLIC. ALSO, SEC HAS DETERMINED THAT IT WILL BE IMPRACTICAL TO PUT IN
THE SYSTEM THE MANY DOCUMENTS RECEIVED DURING THE DELAY PRIOR TO
IMPLEMENTING THE SYSTEM.
BESIDES REHAB'S TERMINATION COSTS AND THE RESOLICITATION COSTS, SEC
ASSERTS THAT THE DELAY INCIDENT TO A RECOMPETITION WILL CAUSE ADDITIONAL
COSTS TO BE INCURRED. FOR EXAMPLE, THE PRESENT "PAPER FILING" SYSTEM IS
MORE COSTLY TO OPERATE. ALSO, MUCH TIME, EFFORT AND FUNDS HAVE BEEN
INVESTED IN SUPPORT SYSTEMS FOR THE MICROGRAPHICS SYSTEM. SEC STATES
THAT IT MAY ALSO LOSE THE APPROPRIATED MONEY WHICH HAS BEEN SET ASIDE
FOR THE PURCHASE OF THE SYSTEM EQUIPMENT.
MOREOVER, SEC ASSERTS THAT REHAB - A SMALL BUSINESS - WILL BE
ADVERSELY IMPACTED BY A RECOMPETITION, SINCE REHAB, WITH SEC
ENCOURAGEMENT, DID NOT MAKE A PROFIT ON THE INSTALLED "COMMON"
EQUIPMENT. ALSO, SEC STATES THAT REHAB WILL HAVE DIFFICULTY
PARTICIPATING IN AN AUCTION CAUSED BY PRC - A LARGE BUSINESS.
IN DETERMINING WHETHER IT IS IN THE GOVERNMENT'S BEST INTEREST TO
UNDERTAKE ACTION TO TERMINATE AN IMPROPER AWARD AND RECOMPETE THE
REQUIREMENT, CERTAIN FACTORS MUST BE CONSIDERED, SUCH AS THE SERIOUSNESS
OF THE PROCUREMENT DEFICIENCY, THE DEGREE OF PREJUDICE TO OTHER OFFERORS
OR THE INTEGRITY OF THE COMPETITIVE PROCUREMENT SYSTEM, THE GOOD FAITH
OF THE PARTIES, THE EXTENT OF PERFORMANCE, THE COST TO THE GOVERNMENT,
THE URGENCY OF THE PROCUREMENT, AND THE IMPACT ON THE USER AGENCY'S
MISSION. SEE HONEYWELL, SUPRA, AND DECISIONS CITED THEREIN.
SEC SHOULD NOT "LOSE" ANY MONEY APPROPRIATED AND OBLIGATED FOR THE
REHAB CONTRACT IF IT IS TERMINATED. SEE LAWRENCE W. ROSINE CO., 55
COMP. GEN. 1351 (1976), 76-2 CPD 159. ALSO, WE DO NOT BELIEVE REHAB'S
TERMINATION COSTS SHOULD BE SUBSTANTIAL IN THIS CASE BECAUSE A STOPWORK
ORDER HAS BEEN IN EFFECT SINCE APRIL 5, 1977. ALTHOUGH REHAB PLACED
ORDERS ON MUCH OF THE SYSTEM EQUIPMENT PRIOR TO THAT DATE, A SIGNIFICANT
PERCENTAGE OF THE EQUIPMENT HAS BEEN DESIGNATED BY SEC AS "COMMON" WITH
PRC'S EQUIPMENT AND IS NOT SUBJECT TO THE TERMINATION ACTION WE
RECOMMEND BELOW. MOREOVER, SEC IS NOT WITHOUT DOCUMENT PROCESSING
FACILITIES BECAUSE THE PRESENT SYSTEM IS STILL OPERATING. FURTHERMORE,
REHAB WOULD GAIN A SIGNIFICANT COMPETITIVE ADVANTAGE BY VIRTUE OF THE
IMPROPER AWARD IT RECEIVED, IF THE SYSTEM WERE TO CONTINUE THROUGH THE
FISCAL YEAR BECAUSE IT WOULD HAVE EXPERIENCED ON-SITE PERSONNEL AS WELL
AS THE USE OF THE EQUIPMENT NOT COMMON TO PRC'S PROPOSED EQUIPMENT.
FINALLY, THE RECORD INDICATES A NUMBER OF INCONSISTENT STATEMENTS AND
ACTIONS BY SEC AND SUBSTANTIAL IRREGULARITIES IN THE CONDUCT OF THIS
PROCUREMENT.
THEREFORE, WE BELIEVE THAT THE CONFIDENCE IN THE INTEGRITY OF THE
COMPETITIVE PROCUREMENT SYSTEM, AND THEREBY THE GOVERNMENT'S BEST
INTERESTS, WOULD BEST BE SERVED BY RECOMPETING THIS REQUIREMENT,
NOTWITHSTANDING THE ADVERSE MISSION AND COST IMPACT ON SEC AND REHAB.
WE RECOMMEND THAT SEC TERMINATE REHAB'S CONTRACT FOR THE CONVENIENCE
OF THE GOVERNMENT, EXCEPT FOR THE "COMMON" EQUIPMENT WHICH WAS TO BE
INSTALLED PURSUANT TO THE STIPULATION OF THE PARTIES. PRC AND REHAB
SHOULD BE AFFORDED AS EQUAL AN OPPORTUNITY AS FEASIBLE TO SUBMIT NEW
BEST AND FINAL OFFERS FOR THE REMAINDER OF THE SYSTEM. OTHER OFFERORS
NEED NOT BE SOLICITED IN THE PRESENT CASE, SINCE NO FIRM OTHER THAN PRC
WAS PREJUDICED BY THE FOREGOING PROCUREMENT DEFICIENCIES. SEE
BURROUGHS, SUPRA.
IN VIEW OF OUR CONCLUSION, WE NEED NOT CONSIDER PRC'S OTHER BASES FOR
PROTEST. WITH REGARD TO THE SCA PROBLEM, HOWEVER, WE HAVE HELD THAT THE
MOST PROPER WAY TO DETERMINE THE EFFECT OF SCA PROVISIONS ON A
PROCUREMENT IS TO COMPETE THE PROCUREMENT UNDER THE APPLICABLE SCA WAGE
RATES. SEE B-177317, DECEMBER 29, 1972; MINJARES, SUPRA.
ALSO, THE RFP EVALUATION CRITERIA SHOULD CLEARLY INDICATE HOW PRICE
PROPOSALS ARE TO BE EVALUATED. FOR EXAMPLE, SINCE SEC MADE VARIOUS
ALLUSIONS AT THE PRC DEBRIEFING THAT PRC'S IMAGE PRICING METHODOLOGY WAS
INCONSISTENT WITH THE RFP, IT SHOULD BE AMENDED TO CLEARLY INDICATE WHAT
IMAGE PRICING METHODS SEC CONSIDERS TO BE UNACCEPTABLE. ALSO, THE IMAGE
VOLUMES USED IN THE EVALUATION CRITERIA (1.5 MILLION, 5 MILLION AND 6
MILLION IMAGES) ARE INCONSISTENT WITH THOSE SET OUT IN SECTION F.8.B OF
THE RFP (5 MILLION, 6 MILLION, AND 7 MILLION IMAGES). SEC SHOULD BASE
ITS EVALUATION ON THE BEST IMAGE VOLUME ESTIMATES AVAILABLE AND DISCLOSE
THESE ESTIMATES IN THE RFP.
MOREOVER, VARIOUS "SEPARATE CHARGES" WERE QUOTED UNDER THE RFP. IN
VIEW OF OUR DETERMINATION IN BURROUGHS, SUPRA, THAT PAYMENT OF CERTAIN
"SEPARATE CHARGES" IS ILLEGAL, AND THAT CLAUSES SIMILAR TO SECTIONS
II.2.2 AND II.2.3 OF THE RFP INSTRUCTIONS ARE UNCLEAR AS TO HOW
"SEPARATE CHARGES" ARE TO BE EVALUATED, THE RFP SHOULD BE REVISED TO
ADVISE OFFERORS OF THE EXTENT TO WHICH "SEPARATE CHARGES" WILL BE
PERMITTED AND HOW THEY ARE TO BE EVALUATED.
AS THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION, IT
IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES
NAMED IN SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31
U.S.C. SEC. 1176 (1970). THIS STATUTE REQUIRES WRITTEN STATEMENTS BY
THE AGENCY INVOLVED TO THE HOUSE AND SENATE COMMITTEE ON THE HOUSE
COMMITTEE ON GOVERNMENT OPERATIONS AND THE SENATE COMMITTEE ON
GOVERNMENTAL AFFAIRS CONCERNING THE ACTIONS TAKEN WITH RESPECT TO OUR
RECOMMENDATION.
B-187833, JUL 6, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
CLAIM THAT REIMBURSEMENT OF TELEPHONE RECONNECTION CHARGES SHOULD BE
PAID UNDER SAME AUTHORITY AS OTHER UTILITY CHARGES INCURRED INCIDENT TO
A REQUIRED RELOCATION OF AIR FORCE MEMBER, NOT CONSTITUTING A PERMANENT
CHANGE OF STATION, MAY BE PAID, SINCE IT IS DOUBTFUL THAT CONGRESS
INTENDED TO PRECLUDE PAYMENT IN SUCH CASES WHEN ENACTING 31 U.S.C. 679
(1970), WHICH PRECLUDES THE PAYMENT OF ANY EXPENSE IN CONNECTION WITH
TELEPHONE SERVICE INSTALLED IN A PRIVATE RESIDENCE. DECISIONS
INCONSISTENT WITH THE FOREGOING WILL NOT BE FOLLOWED IN THE FUTURE.
TECHNICAL SERGEANT EZRA FOSTER, USAF:
THIS ACTION IS IN RESPONSE TO LETTER DATED SEPTEMBER 15, 1976 (FILE
REFERENCE ACF), WITH ENCLOSURES, FROM THE CHIEF, ACCOUNTING AND FINANCE
BRANCH, COMPTROLLER, HEADQUARTERS WARNER ROBINS AIR LOGISTICS CENTER,
ROBINS AIR FORCE BASE, GEORGIA, REQUESTING AN ADVANCE DECISION
CONCERNING THE CLAIM OF TECHNICAL SERGEANT EZRA FOSTER, USAF,
000-00-7388, FOR REIMBURSEMENT OF THE EXPENSE OF RECONNECTING HIS
PRIVATE TELEPHONE IN THE DESCRIBED CIRCUMSTANCES. THE REQUEST HAS BEEN
ASSIGNED PDTATAC CONTROL NO. 76-23, BY THE PER DIEM, TRAVEL AND
TRANSPORTATION ALLOWANCE COMMITTEE.
THE FINANCE AND ACCOUNTING OFFICER INDICATES THAT SERGEANT FOSTER'S
CLAIM AROSE AS A RESULT OF THE RELOCATION OF HIS MOBILE HOME FROM THE
FALCON MOBILE HOME PARK, OWNED AND OPERATED BY ROBINS AIR FORCE BASE, TO
THE ROBINS MOBILE HOME PARK. APPARENTLY, THE FALCON MOBILE HOME PARK IS
BEING CLOSED AND THE ROBINS MOBILE HOME PARK HAS BEEN RECENTLY
ESTABLISHED. THE RELOCATION OF THE MOBILE HOMES HAS BEEN DIRECTED AT
GOVERNMENT EXPENSE. THE GOVERNMENT MOVES THE MOBILE HOMES UNDER
CONTRACT; HOWEVER, CERTAIN UTILITIES SUCH AS NATURAL GAS AND TELEPHONE
MAY NOT BE MOVED BY THE CONTRACTOR. AS A RESULT THE MEMBER IS REQUESTED
TO MAKE THE NECESSARY ARRANGEMENTS AND HE WILL BE REIMBURSED FOR
EXPENSES INCURRED. THE FINANCE AND ACCOUNTING OFFICER IN THIS REGARD
NOTES THAT 31 U.S.C. 679 (1970) AS CONSTRUED BY THIS OFFICE PRECLUDES
THE REIMBURSEMENT OF CHARGES INCURRED INCIDENT TO THE RECONNECTION OF
TELEPHONE SERVICE.
IT IS STATED THAT SERGEANT FOSTER'S ORIGINAL CLAIM IN THE AMOUNT OF
$34 FOR RECONNECTION OF HIS TELEPHONE SERVICE INCIDENT TO THE RELOCATION
OF HIS MOBILE HOME WAS DISALLOWED BY THE AIR FORCE ON THE BASIS OF
DECISIONS OF THIS OFFICE DEALING WITH SIMILAR CIRCUMSTANCES. SERGEANT
FOSTER HAS NOW RESUBMITTED HIS CLAIM AND HAS ADVANCED THE ARGUMENT THAT
OUR CONSTRUCTION OF 31 U.S.C. 679 IS BROADER THAN THAT INTENDED BY THE
CONGRESS. HE ALSO INDICATES THAT ALTHOUGH THE CHARGE IS EXPRESSLY FOR
TELEPHONE SERVICE, DUE TO ITS GENESIS IT CANNOT BE CONSIDERED AS "PART
OF THE TELEPHONE SERVICE" RECEIVED IN HIS HOME SO AS TO COME UNDER THE
STATUTORY PROHIBITION. HE FURTHER INDICATES THAT IT IS HIS BELIEF THAT
FAILURE TO REIMBURSE HIM FOR SUCH EXPENSE CONSTITUTES AN UNLAWFUL TAX
LEVIED ON HIM IN VIOLATION OF THE UNITED STATES CONSTITUTION.
IN THE REQUEST FOR DECISION, IT IS NOTED THAT ORDINARY EXAMINATION
FAILS TO DISCLOSE ANY MEANINGFUL DIFFERENCE BETWEEN THE CHARGE FOR
RECONNECTION OF A TELEPHONE AND REIMBURSABLE CHARGES FOR RECONNECTION OF
NATURAL GAS, ELECTRICITY, OR TELEVISION CABLE. AS A RESULT, SERGEANT
FOSTER'S CLAIM HAS BEEN SUBMITTED FOR AN ADVANCE DECISION.
SECTION 679 OF TITLE 31, UNITED STATES CODE, PROVIDES IN PART AS
FOLLOWS:
"EXCEPT AS OTHERWISE PROVIDED BY LAW, NO MONEY APPROPRIATED BY ANY
ACT SHALL BE EXPENDED FOR TELEPHONE SERVICE INSTALLED IN ANY PRIVATE
RESIDENCE OR PRIVATE APARTMENT ***."
AS A RESULT OF THIS REQUEST FOR ADVANCE DECISION, WE HAVE THOROUGHLY
REVIEWED THE POSITION OF THIS OFFICE IN APPLYING THE PROVISIONS OF 31
U.S.C. 679 (1970) IN CASES SIMILAR TO THAT OF SERGEANT FOSTER. WHILE
THE STATUTE WAS INTENDED TO PRECLUDE ANY POSSIBILITY OF THE GOVERNMENT
BEARING THE COSTS OF TELEPHONE SERVICE IN PRIVATE RESIDENCES, IT IS
QUESTIONABLE THAT THE CONGRESS INTENDED TO PRECLUDE THE REIMBURSEMENT OF
TELEPHONE RECONNECTION CHARGES CAUSED BY GOVERNMENT ACTION. THAT IS TO
SAY, THE APPARENT PURPOSE OF THE STATUTE WAS TO PROHIBIT GOVERNMENT
OFFICIALS FROM HAVING TELEPHONES IN THEIR PRIVATE RESIDENCES OR PRIVATE
APARTMENTS AT GOVERNMENT EXPENSE. WE DO NOT BELIEVE THAT IN ENACTING
THIS LAW THE CONGRESS INTENDED TO PRECLUDE AN INDIVIDUAL FROM BEING
REIMBURSED FOR AN EXPENSE INCURRED AS A RESULT OF GOVERNMENTAL ACTION
OVER WHICH HE HAD NO CONTROL.
ACCORDINGLY, IN SERGEANT FOSTER'S CASE, AND SIMILAR CASES WHICH ARISE
IN THE FUTURE, REIMBURSEMENT FOR TELEPHONE CONNECTION CHARGES MAY BE
MADE ON THE SAME BASIS AS FOR OTHER CHARGES FOR OTHER UTILITY
CONNECTIONS. DECISIONS OF THIS OFFICE INCONSISTENT WITH THE FOREGOING
CONCERNING TELEPHONE CHARGES SUCH AS HERE INVOLVED (55 COMP. GEN. 932,
936 (1976); 54 ID. 661 (1975); AND B-141573, JANUARY 5, 1960) WILL NO
LONGER BE FOLLOWED.
THE VOUCHER IS RETURNED AND PAYMENT IS AUTHORIZED IF OTHERWISE
CORRECT.
B-187683, JUN 23, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. UNDER 10 U.S.C. 1401A(F) (SUPP. V, 1975) THE RETAINER PAY OF A
FORMER NAVY OR MARINE CORPS MEMBER WHO INITIALLY BECAME ENTITLED TO THAT
PAY ON OR AFTER JANUARY 1, 1971, MAY NOT BE LESS THAN THE RETAINER PAY
TO WHICH HE WOULD BE ENTITLED IF TRANSFERRED TO THE FLEET RESERVE OR
FLEET MARINE CORPS RESERVE AT AN EARLIER DATE, ADJUSTED TO REFLECT
APPLICABLE INCREASES IN SUCH PAY UNDER THAT SECTION EVEN THOUGH
TRANSFERRED TO FLEET RESERVE OR FLEET MARINE CORPS RESERVE AT A LOWER
PAY GRADE BECAUSE OF UNSATISFACTORY PERFORMANCE OF DUTY OR AS RESULT OF
DISCIPLINARY ACTION.
2. WHERE A NAVY OR MARINE CORPS ENLISTED MEMBER IS ELIGIBLE FOR
RETIRED PAY BY REASON OF DISABILITY, HIS PAY MAY BE COMPUTED ON THE
RETAINER PAY FORMULA PURSUANT TO 10 U.S.C. 6330 (1970), ADJUSTED TO
REFLECT ANY APPLICABLE CHANGES AUTHORIZED BY 10 U.S.C. 1401A (1970), IF
HE WAS QUALIFIED FOR TRANSFER TO THE FLEET RESERVE OR FLEET MARINE CORPS
RESERVE ON A DATE EARLIER THAN HIS DISABILITY RETIREMENT THE TERMS,
"RETIRED PAY" AND "RETAINER PAY" BEING INTERCHANGEABLE FOR PURPOSES OF
THE COMPUTATION AUTHORIZED BY 10 U.S.C. 1401A(F) (SUPP. V, 1975).
3. PROPER PAY RATE TO BE USED IN COMPUTING THE AMOUNT OF RETIRED PAY
WHICH, AS COMPENSATION FOR INJURY OR SICKNESS, IS NOT INCLUDABLE IN
GROSS INCOME FOR TAX PURPOSES UNDER 26 U.S.C. 104(A)(4) (1970) WHEN A
MEMBER IS RETIRED FOR DISABILITY BUT IS ENTITLED TO COMPUTE RETIRED PAY
ON A NONDISABILITY FORMULA PURSUANT TO 10 U.S.C. 1401A(F) (SUPP. V,
1975) IS A MATTER FOR CONSIDERATION BY THE INTERNAL REVENUE SERVICE.
HOWEVER, IT IS THE COMPTROLLER GENERAL'S VIEW THAT ALTHOUGH A DISABILITY
RETIRED MEMBER MAY COMPUTE HIS RETIRED PAY ON SOME OTHER FORMULA
PURSUANT TO 10 U.S.C. 1401A(F), HE STILL RECEIVES HIS RETIRED PAY BY
VIRTUE OF HIS DISABILITY RETIREMENT.
DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO.
532:
THIS ACTION IS IN RESPONSE TO A LETTER FROM THE ASSISTANT SECRETARY
OF DEFENSE (COMPTROLLER) REQUESTING A DECISION ON THREE QUESTIONS
CONCERNING THE COMPUTATION OF RETIRED OR RETAINER PAY IN THE
CIRCUMSTANCES DESCRIBED IN DEPARTMENT OF DEFENSE MILITARY PAY AND
ALLOWANCE COMMITTEE ACTION NO. 532, ENCLOSED WITH THE LETTER. ALL THREE
QUESTIONS ARE ASKED IN CONNECTION WITH THE COMPUTING RETIRED OR RETAINER
PAY UNDER THE PROVISIONS OF 10 U.S.C. 1401A(F) (SUPP. V, 1975).
THE FIRST QUESTION IS:
"WHAT PAY GRADE IS TO BE USED IN THE COMPUTATION OF RETAINER PAY IN
THE CASE OF A MEMBER WHO (A) WAS REDUCED PRIOR TO OCTOBER 31, 1974, FROM
THE GRADE OF E-8 TO THE GRADE OF E-7 BECAUSE OF UNSATISFACTORY
PERFORMANCE OF DUTY, OR AS A RESULT OF DISCIPLINARY ACTION, AND (B) WAS
TRANSFERRED PURSUANT TO 10 U.S.C. 6330 TO THE FLEET OR THE FLEET MARINE
CORPS RESERVE ON OCTOBER 31, 1974, WITH ENTITLEMENT TO RETAINER PAY FROM
NOVEMBER 1, 1974, COMPUTED ON THE E-7 PAY SCALE?"
IN RESPONDING TO THIS QUESTION WE ARE PRESUMING THAT THE MEMBER WAS
ELIGIBLE FOR TRANSFER TO THE FLEET RESERVE PRIOR TO BEING REDUCED IN
GRADE FROM E-8 TO E-7.
THE DISCUSSION IN THE COMMITTEE ACTION SUGGESTS THAT A LITERAL
INTERPRETATION OF 10 U.S.C. 1401A(F) WOULD APPEAR TO PERMIT SUCH MEMBER
TO HAVE HIS RETAINER PAY COMPUTED ON THE BASIS OF PAY GRADE E-8, A GRADE
HE HELD WHILE ELIGIBLE FOR TRANSFER TO THE FLEET RESERVE. HOWEVER, THE
COMMITTEE QUESTIONS WHETHER CONGRESS INTENDED TO REWARD SUCH A MEMBER BY
ALLOWING HIM TO COMPUTE HIS RETAINER PAY BASED ON THE HIGHER GRADE.
SUBSECTION (F) WAS ADDED AS AN AMENDMENT TO 10 U.S.C. 1401A BY
SECTION 806 OF THE DEPARTMENT OF DEFENSE APPROPRIATION AUTHORIZATION
ACT, 1976, PUBLIC LAW 94-106, OCTOBER 7, 1975, 89 STAT. 538-539. THAT
SUBSECTION READS AS FOLLOWS:
"(F) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONTHLY RETIRED
OR RETAINER PAY OF A MEMBER OR A FORMER MEMBER OF AN ARMED FORCE WHO
INITIALLY BECAME ENTITLED TO THAT PAY ON OR AFTER JANUARY 1, 1971, MAY
NOT BE LESS THAN THE MONTHLY RETIRED OR RETAINER PAY TO WHICH HE WOULD
BE ENTITLED IF HE HAD BECOME ENTITLED TO RETIRED OR RETAINER PAY AT AN
EARLIER DATE, ADJUSTED TO REFLECT ANY APPLICABLE INCREASES IN SUCH PAY
UNDER THIS SECTION. IN COMPUTING THE AMOUNT OF RETIRED OR RETAINER PAY
TO WHICH SUCH A MEMBER WOULD HAVE BEEN ENTITLED ON THAT EARLIER DATE,
THE COMPUTATION SHALL, SUBJECT TO SUBSECTION (E) OF THIS SECTION, BE
BASED ON HIS GRADE, LENGTH OF SERVICE, AND THE RATE OF BASIC PAY
APPLICABLE TO HIM AT THAT TIME. THIS SUBSECTION DOES NOT AUTHORIZE ANY
INCREASE IN THE MONTHLY RETIRED OR RETAINER PAY TO WHICH A MEMBER WAS
ENTITLED FOR ANY PERIOD PRIOR TO THE EFFECTIVE DATE OF THIS SUBSECTION."
THIS PROVISION WAS ADDED AS AMENDMENT NO. 534 TO S. 920, 94TH
CONGRESS, DURING THE FLOOR DEBATE WHEN THAT BILL WAS BEING CONSIDERED BY
THE FULL SENATE. ITS PROVISIONS WERE INCORPORATED IN H.R. 6674, 94TH
CONGRESS, WHICH BECAME PUBLIC LAW 94-106. THERE WERE NO HEARINGS AND NO
COMMITTEE REPORTS ON THE PROPOSAL OTHER THAN BRIEF STATEMENTS IN THE
CONFERENCE REPORTS ON H.R. 6674 WHICH INDICATE THAT ITS ADOPTION WAS TO
CORRECT THE SO-CALLED "RETIRED PAY INVERSION." THE COLLOQUY THAT TOOK
PLACE IN THE SENATE AT THE TIME OF ITS ADOPTION ALSO INDICATES THAT THIS
AMENDMENT HAD AS ITS PURPOSE THE CORRECTION OF THE RETIRED PAY INVERSION
PROBLEM CREATED BY THE FACT THAT FOR SEVRAL YEARS PRIOR TO THE ENACTMENT
OF THIS PROVISION UPWARD ADJUSTMENTS OF RETIRED PAY AND RETAINER PAY
UNDER 10 U.S.C. 1401A WERE OCCURRING IN GREATER AMOUNTS AND AT GREATER
FREQUENCY THAN WERE INCREASES IN ACTIVE MILITARY BASIC PAY. THE RESULT
BEING THAT MANY OF THOSE WHO REMAINED ON ACTIVE DUTY AFTER BECOMING
ELIGIBLE FOR RETIREMENT WERE LOSING CONSIDERABLE RETIREMENT PAY. SEE
121 CONG. REC. S9928-S9933 (DAILY ED. JUNE 6, 1975). IT APPEARS THAT
THE PROVISION WAS INTENDED TO PROVIDE AN ALTERNATIVE METHOD OF
CALCULATING RETIRED PAY OR RETAINER PAY AND NOT TO CHANGE THE BASIS UPON
WHICH A MEMBER BECOMES ENTITLED TO SUCH PAY.
WE HAVE LONG FOLLOWED THE RULE THAT IN CONSTRUING A STATUTE, ITS
WORDS AND PHRASES SHOULD BE GIVEN THEIR PLAIN, ORDINARY AND USUAL
MEANING UNLESS A DIFFERENT PURPOSE IS CLEARLY MANIFESTED IN THE STATUTE
OR ITS LEGISLATIVE HISTORY. SEE 46 COMP. GEN. 392 (1966). SECTION
1401A(F) OF TITLE 10, UNITED STATES CODE, CLEARLY STATES THAT THE
RETIRED OR RETAINER PAY OF A MEMBER WHO INITIALLY BECAME ENTITLED TO
THAT PAY ON OR AFTER JANUARY 1, 1971, MAY NOT BE LESS THAN THE MONTHLY
RETIRED OR RETAINER PAY TO WHICH HE WOULD BE ENTITLED IF HE HAD BECOME
ENTITLED TO RETIRED OR RETAINER PAY AT AN EARLIER DATE. IT ALSO
SPECIFICALLY PROVIDES THAT IN COMPUTING THE AMOUNT OF RETIRED OR
RETAINER PAY TO WHICH HE WOULD HAVE BEEN ENTITLED ON THAT EARLIER DATE,
THE COMPUTATION SHALL, AMONG OTHER THINGS, BE BASED ON HIS "GRADE"
APPLICABLE TO HIM AT THAT TIME. NO EXCEPTION TO THIS RULE IS EXPRESSED
IN THE LANGUAGE OF THE STATUTE AND NONE CAN BE FOUND IN THE LEGISLATIVE
HISTORY.
THEREFORE, CONCERNING THE FIRST QUESTION, THE MONTHLY RETAINER PAY OF
A FORMER MEMBER OF THE NAVY OR MARINE CORPS WHO INITIALLY BECAME
ENTITLED TO THAT PAY ON OR AFTER JANUARY 1, 1971, MAY NOT BE LESS THAN
THE MONTHLY RETAINER PAY TO WHICH HE WOULD BE ENTITLED IF HE HAD
TRANSFERRED TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE AT AN
EARLIER DATE, ADJUSTED TO REFLECT ANY APPLICABLE INCREASES IN SUCH PAY
UNDER 10 U.S.C. 1401A. THIS IS SO EVEN THOUGH HE MAY ACTUALLY BE
TRANSFERRED TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE AT A
LOWER PAY GRADE BECAUSE OF UNSATISFACTORY PERFORMANCE OF DUTY OR AS A
RESULT OF DISCIPLINARY ACTION THAN THE PAY GRADE HE HELD WHEN HE BECAME
ELIGIBLE FOR TRANSFER TO THE FLEET RESERVE OR FLEET MARINE CORPS
RESERVE. ACCORDINGLY, THE GRADE OF E-8 MAY BE USED IN COMPUTING THE
MEMBER'S RETAINER PAY IN THE SITUATION DESCRIBED IN THE FIRST QUESTION.
THE SECOND QUESTION ASKED IS:
"IS AN ENLISTED MEMBER WHO HAS BEEN PLACED ON THE DISABILITY RETIRED
LIST ENTITLED TO A RECOMPUTATION OF PAY USING THE PROVISIONS OF 10
U.S.C. 6330 IF (A) HE WAS QUALIFIED FOR TRANSFER TO THE FLEET OR FLEET
MARINE CORPS RESERVE ON A DATE PRIOR TO THE DATE OF HIS DISABILITY
RETIREMENT AND (B) THE AMOUNT OF RETAINER PAY WHICH HE WOULD HAVE BEEN
ENTITLED TO RECEIVE HAD HE BEEN SO TRANSFERRED IS GREATER THAN HIS
PRESENT RETIRED PAY ENTITLEMENT?"
AN ENLISTED MEMBER OF THE NAVY OR MARINE CORPS WHO HAS COMPLETED 20
OR MORE YEARS OF ACTIVE SERVICE IN THE ARMED FORCES MAY BE TRANSFERRED,
AT HIS REQUEST, TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE AND
BE PAID RETAINER PAY PURSUANT TO 10 U.S.C. 6330 (1970). SUCH MEMBERS
ARE NOT RETIRED OR ENTITLED TO RETIRED PAY UNTIL THEY HAVE COMPLETED 30
YEARS OF SERVICE EITHER BY COMBINING YEARS OF ACTIVE SERVICE AND SERVICE
WHILE A MEMBER OF THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE OR A
TOTAL OF 30 YEARS' ACTIVE SERVICE OR IS RETIRED PURSUANT TO THE
PROVISIONS OF CHAPTER 61 OF TITLE 10, UNITED STATES CODE, BY REASON OF
PHYSICAL DISABILITY.
THE DISCUSSION IN THE COMMITTEE ACTION POINTS OUT THAT IN 41 COMP.
GEN. 337, 339 (1961), WE HELD THAT "RETAINER PAY" GRANTED UNDER 10
U.S.C. 6330 MAY NOT BE CONSIDERED AS "RETIRED PAY" AS THAT TERM IS USED
IN 10 U.S.C. 1401. THEREFORE, IT WAS HELD THAT A MEMBER COULD NOT
RECEIVE RETAINER PAY SO LONG AS HE REMAINS ON THE TEMPORARY DISABILITY
RETIRED LIST BY VIRTUE OF THE PROVISION IN 10 U.S.C. 1401 WHICH GIVES
MEMBERS ENTITLED TO DISABILITY RETIRED PAY THE BENEFIT OF THE MOST
FAVORABLE METHOD OF COMPUTATION OF "RETIRED PAY."
THE COMMITTEE ACTION DISCUSSION INDICATES THAT WHILE THE LANGUAGE OF
10 U.S.C. 1401A(F) IS NOT CLEAR IN THIS REGARD, IF THE REASONING APPLIED
IN 41 COMP. GEN. 337 WERE APPLIED TO SECTION 1401A(F) TO PREVENT A
MEMBER ON A PERMANENT RETIRED LIST BY REASON OF DISABILITY FROM
COMPUTING HIS RETIRED PAY BASED ON RETAINER PAY ENTITLEMENT, THE PURPOSE
OF SECTION 1401A(F) AS TO SUCH MEMBER WOULD BE DEFEATED.
IN THE PASSAGE OF 10 U.S.C. 1401A(F) IT IS CONSIDERED THAT CONGRESS
DID NOT INTEND TO MAKE A DISTINCTION BETWEEN RETIRED PAY AND RETAINER
PAY SINCE TO DO SO WOULD DEFEAT THE INTENDED PURPOSE OF PERMITTING A
RECALCULATION TO PREVENT A MEMBER FROM SUFFERING A REDUCTION IN RETIRED
OR RETAINER PAY BY REMAINING ON ACTIVE DUTY AFTER BECOMING ELIGIBLE FOR
RETIRED OR RETAINER PAY. THIS VIEW IS SUPPORTED BY THE LANGUAGE OF
SECTION 1401A(F) WHICH CONSISTENTLY USES THE TERMS "RETIRED OR RETAINER
PAY." THAT IS NOT THE CASE IN SECTION 1401 TO WHICH 41 COMP. GEN. 337
APPLIES. THEREFORE, IT IS OUR VIEW THAT FOR THE PURPOSES OF 10 U.S.C.
1401A(F) THE TERMS "RETIRED PAY" AND "RETAINER PAY" ARE INTERCHANGEABLE.
TO HOLD OTHERWISE WOULD ALSO MEAN THAT A MEMBER OF THE ARMY OR AIR
FORCE OR AN OFFICER OF THE NAVY OR MARINE CORPS UNDER CIRCUMSTANCES
DESCRIBED IN THE SUBMISSION WHO MAY BE ELIGIBLE FOR RETIRED PAY AFTER 20
YEARS' ACTIVE SERVICE, WOULD RECEIVE GREATER BENEFITS THAN AN ENLISTED
MEMBER OF THE NAVY OR MARINE CORPS. IT IS NOT CONSIDERED THAT CONGRESS
INTENDED SUCH AN INTERPRETATION OF THE LAW.
THEREFORE IN APPLYING 10 U.S.C. 1401A(F) TO AN ENLISTED MEMBER OF THE
NAVY OR MARINE CORPS WHO IS ELIGIBLE FOR RETIRED PAY BY REASON OF
DISABILITY, IT IS OUR VIEW THAT HE MAY COMPUTE HIS PAY PURSUANT TO THE
PROVISIONS OF 10 U.S.C. 6330, IF HE WAS QUALIFIED FOR TRANSFER TO THE
FLEET RESERVE OR FLEET MARINE CORPS RESERVE ON A DATE EARLIER THAN HIS
DISABILITY RETIREMENT AND HE OTHERWISE MEETS THE REQUIREMENTS OF SECTION
1401A(F). ASSUMING THAT TO BE THE SITUATION IN QUESTION TWO, THAT
QUESTION IS ANSWERED IN THE AFFIRMATIVE.
THE THIRD QUESTION ASKED IS:
"WHAT IS THE PROPER RATE OF BASIC PAY, IF ANY, TO BE USED IN
DETERMINING THE AMOUNT OF RETIRED OR RETAINER PAY WHICH IS CONSIDERED TO
BE A PENSION, ANNUITY, OR SIMILAR ALLOWANCE FOR PERSONAL INJURY, OR
SICKNESS RESULTING FROM ACTIVE SERVICE IN THE ARMED FORCES AND THEREFORE
NOT INCLUDED IN THE MEMBER'S GROSS INCOME UNDER THE PROVISIONS OF 26
U.S.C. 104(A)(4)?"
THE AUTHORITY FOR THE ADMINISTRATION AND ENFORCEMENT OF THE INTERNAL
REVENUE CODE RESTS PRIMARILY WITH THE SECRETARY OF THE TREASURY;
THEREFORE, QUESTIONS CONCERNING THE PROPER APPLICATION OF 26 U.S.C.
104(A)(4) (1970) SUCH AS SET FORTH IN THE THIRD QUESTION SHOULD BE
ADDRESSED TO THE TREASURY DEPARTMENT, INTERNAL REVENUE SERVICE. COMPARE
40 COMP. GEN. 387, 391 (1960). HOWEVER, AS WE INDICATED ABOVE, IT IS
OUR VIEW THAT BY THE ENACTMENT OF 10 U.S.C. 1401A(F) CONGRESS DID NOT
INTEND TO CHANGE THE BASIS UPON WHICH A MEMBER BECOMES ENTITLED TO
RETIRED OR RETAINER PAY; IT MERELY PROVIDED AN ALTERNATIVE METHOD OF
COMPUTATION OF SUCH PAY. THUS, IT IS OUR VIEW THAT A MEMBER RETIRED FOR
DISABILITY, FOR EXAMPLE UNDER 10 U.S.C. 1201 WHOSE RETIRED PAY
ORDINARILY WOULD BE COMPUTED UNDER 10 U.S.C. 1401, BUT WHO IS ENTITLED
TO COMPUTE HIS PAY ON SOME OTHER FORMULA PURSUANT TO 10 U.S.C. 1401A(F),
STILL RECEIVES SUCH RETIRED PAY BY VIRTUE OF HIS DISABILITY RETIREMENT
UNDER SECTION 1201.
B-188665, JUN 22, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. BID RECEIVED AFTER SPECIFIED DEADLINE SHOULD BE CONSIDERED FOR
AWARD WHERE AGENCY FAILED TO ESTABLISH AND IMPLEMENT PROCEDURES FOR
TIMELY RECEIPT OF BIDS.
2. WHERE AGENCY PRACTICE IS NOT TO ACCEPT SPECIAL DELIVERY MAIL ON
WEEKENDS AND PASSIVE RELIANCE IS PLACED ON ROUTINE DELIVERIES TO INSURE
TIMELY ARRIVAL OF BIDS FOR MONDAY AFTERNOON BID OPENING EVEN THOUGH
DELAYS MIGHT BE EXPECTED DUE TO WEEKEND MAIL BUILDUP, AGENCY HAS FAILED
TO MEET STANDARD REQUIRED FOR EFFECTIVE ESTABLISHMENT AND IMPLEMENTATION
OF PROCEDURES FOR TIMELY RECEIPT OF BIDS.
3. CONFLICT BETWEEN TIME/DATE STAMP ON RETURN RECEIPT AND HAND
NOTATION ON BID ENVELOPE OF TIME RECEIPT IS RESOLVED BY IFB LATE BID
CLAUSE PROVIDING THAT ONLY ACCEPTABLE EVIDENCE TO ESTABLISH TIMELY
RECEIPT IS TIME/DATE STAMP OF GOVERNMENT INSTALLATION ON BID WRAPPER OR
OTHER DOCUMENTARY EVIDENCE OF RECEIPT MAINTAINED BY INSTALLATION.
FEDERAL CONTRACTING CORPORATION:
THE FEDERAL CONTRACTING CORPORATION (FEDERAL) PROTESTS A
DETERMINATION THAT ITS BID WAS SUBMITTED TOO LATE FOR CONSIDERATION FOR
AWARD UNDER INVITATION FOR BIDS (IFB) DADA03-77-B-0488 ISSUED BY THE
FITZSIMMONS ARMY MEDICAL CENTER (FAMC) ON FEBRUARY 18, 1977.
THE IFB SPECIFIED THAT BIDS WOULD BE RECEIVED UNTIL 2 P.M., M.S.T.,
MONDAY, MARCH 21, 1977, IN THE OFFICE OF THE PURCHASING AND CONTRACTING
DIVISION (P&C), FAMC. NOTATIONS ON THE ENVELOPE FOR FEDERAL'S BID, SENT
BY SPECIAL DELIVERY AND CERTIFIED MAIL ON MARCH 17, 1977, INDICATE THAT
IT WAS RECEIVED BY THE ARMY POST OFFICE, FAMC, AT 2:40 P.M. ON MARCH 21
AND WAS DELIVERED TO THE P&C OFFICE AT 2:50 P.M. THE CONTRACTING
OFFICER DETERMINED THAT IT WAS A LATE BID AND COULD NOT BE CONSIDERED
FOR AWARD.
THE IFB INCORPORATED THE PROVISIONS OF PARAGRAPH 7-2002.2 OF THE
ARMED SERVICES PROCUREMENT REGULATION (1976 ED.) ENTITLED "LATE BIDS,
MODIFICATION OF BIDS OR WITHDRAWAL OF BIDS." UNDER THIS PROVISION, A
LATE BID MAY NOT BE CONSIDERED UNLESS IT IS RECEIVED PRIOR TO AWARD AND
EITHER WAS MAILED "*** NOT LATER THAN THE FIFTH DAY PRIOR TO THE DATE
SPECIFIED FOR RECEIPT OF BIDS" OR "*** IT IS DETERMINED BY THE
GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE
GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION." LATE RECEIPT
OF A BID ORDINARILY WILL RESULT IN ITS REJECTION UNLESS THE SPECIFIC
CONDITIONS SET FORTH IN THE SOLICITATION ARE MET. B. E. WILSON
CONTRACTING CORPORATION, 55 COMP. GEN. 220 (1975), 75-2 CPD 145. SINCE
IT IS UNCONTROVERTED THAT FEDERAL'S BID WAS NOT MAILED IN TIME TO
SATISFY THE FIRST CRITERION ABOVE, UNDER THE TERMS OF THE SOLICITATION
ITS BID MAY BE CONSIDERED FOR AWARD ONLY IF IT IS DETERMINED THAT THE
LATE RECEIPT WAS DUE TO MISHANDLING BY FAMC AFTER RECEIPT AT THE
"GOVERNMENT INSTALLATION." SEE THE HOEDADS, B-185919, JULY 8, 1976, 76-2
CPD 21.
IN THIS REGARD, THE RECORD INDICATES THAT FEDERAL'S BID WAS RECEIVED
IN THE AURORA, COLORADO, OFFICE OF THE UNITED STATES POSTAL SERVICE
(USPS) ON SATURDAY, MARCH 19, 1977, AT ABOUT 5 P.M., BUT WAS NOT
DELIVERED TO FAMC ON EITHER SATURDAY OR SUNDAY, ALTHOUGH A DELIVERY OF
"PERISHABLES" CONSIGNED TO THE CLINICAL INVESTIGATION SERVICE, FAMC, WAS
MADE AT 7:15 P.M. ON MARCH 19. THE AURORA, COLORADO, POSTMASTER ADVISED
THAT NO DELIVERY WAS ATTEMPTED BECAUSE THE FAMC DUTY OFFICER ON WEEKENDS
"*** WOULD NOT ACCEPT ANY CLASS OR ACCOUNTABLE 'SPECIALS' MAIL ON
SATURDAYS OR SUNDAYS EXCEPT PERISHABLES." AS A RESULT OF THE INABILITY
OF THE AURORA USPS OFFICE TO DELIVER FEDERAL'S BID DIRECTLY TO FAMC OVER
THE WEEKEND, IT WAS DELIVERED TO THE USPS BRANCH OFFICE AT FAMC ON
MONDAY MORNING AT 10 A.M., WHERE IT WAS HELD FOR DELIVERY TO THE ARMY
POSTAL MESSENGER. IN THIS CONNECTION, WE NOTE THAT PICKUPS OF
ACCOUNTABLE MAIL FROM THE USPS BRANCH OFFICE BY FAMC MAIL PERSONNEL
NORMALLY WERE SCHEDULED IN THE MORNING BETWEEN 8-9 A.M. AND IN THE
AFTERNOON BETWEEN 1-2 P.M. WE ARE ADVISED THAT EXCEPTIONS TO THIS
SCHEDULE OCCURRED IN INSTANCES OF DELAYS DUE TO HEAVY MAIL VOLUME OR IN
THE EVENT OF TELEPHONE NOTIFICATION BY USPS PERSONNEL THAT THEY HAD AN
ITEM OF MAIL REQUIRING IMMEDIATE ATTENTION.
FEDERAL'S BID WAS NOT PICKED UP BY ARMY POSTAL PERSONNEL UNTIL 2:30
P.M. ON MONDAY AND WAS DELIVERED TO THE FAMC ARMY MAIL FACILITY AT 2:40
P.M., WHERE THE TIME AND DATE OF RECEIPT WERE HAND-RECORDED ON THE BID
ENVELOPE. THE BID WAS DELIVERED TO THE CONTRACTING OFFICER AT P&C AT
2:50 P.M., AN ELAPSED TIME OF 20 MINUTES FROM RECEIPT BY FAMC MAIL
PERSONNEL.
FEDERAL CONTENDS THAT ITS BID WAS ACTUALLY RECEIVED BY FAMC MAIL
PERSONNEL AT 10 A.M. ON MARCH 21 ON THE BASIS OF A DATE/TIME STAMP
APPEARING ON ITS RETURN RECEIPT FOR THE BID IN QUESTION. THIS STAMP
CONFLICTS WITH THE DATE AND TIME HAND-RECORDED ON FEDERAL'S BID
ENVELOPE. IN EXPLANATION OF THE INCONSISTENCY, THE FAMC MAIL OFFICER
ADVISES THAT THE DATE/TIME STAMP IS A MANUALLY ADJUSTED DEVICE ON WHICH
ONLY THE DATE IS NORMALLY CHANGED AND THAT ALL MAIL WAS STAMPED AS
RECEIVED AT 10 A.M.
THE IFB PROVISION RELATING TO LATE BIDS, NOTED ABOVE, PROVIDES IN
PERTINENT PART THAT:
"(C) THE ONLY ACCEPTABLE EVIDENCE TO ESTABLISH:
"(II) THE TIME OF RECEIPT AT THE GOVERNMENT INSTALLATION IS THE
TIME/DATE STAMP OF SUCH INSTALLATION ON THE BID WRAPPER OR OTHER
DOCUMENTARY EVIDENCE OF RECEIPT MAINTAINED AT THE INSTALLATION."
UNDER THIS PROVISION, FEDERAL'S BID RECEIPTED ON THE ENVELOPE AT 2:40
P.M. WAS NOT TIMELY RECEIVED. B. E. WILSON CONTRACTING CORPORATION,
SUPRA. WE CONCLUDE THEREFORE THAT THE DELAY IN DELIVERY OF FEDERAL'S
BID WAS NOT DUE TO MISHANDLING AFTER RECEIPT AT THE GOVERNMENT
INSTALLATION.
FEDERAL, IN A LETTER DATED APRIL 13, 1977, ALSO CONTENDS THAT FAMC
PREVENTED TIMELY DELIVERY OF ITS BID BY REFUSING TO ACCEPT SPECIAL
DELIVERY MAIL ON THE WEEKENDS. WE HAVE LONG RECOGNIZED THE OBLIGATION
OF THE GOVERNMENT TO ESTABLISH AND IMPLEMENT PROCEDURES TO INSURE THAT
THE TRANSMISSION OF BIDS FROM ONE PLACE TO ANOTHER WILL NOT BE
UNREASONABLY DELAYED AND HAVE DISTINGUISHED BETWEEN DELAYS RESULTING
FROM MISHANDLING AFTER RECEIPT AT THE GOVERNMENT INSTALLATION FROM THOSE
ATTRIBUTABLE TO MISHANDLING DURING THE PROCESS OF RECEIPT. 42 COMP.
GEN. 508 (1963); RECORD ELECTRIC, INC., B-186848, OCTOBER 6, 1976, 76-2
CPD 315; HYDRO FITTING MFG. CORP., 54 COMP. GEN. 999 (1975), 75-1 CPD
331. IN RECORD ELECTRIC, INC., SUPRA, WE STATED OUR POSITION THAT, IN
UNUSUAL CASES LIKE THIS, THE MISHANDLING IN THE PROCESS OF RECEIPT BY
THE GOVERNMENT MUST BE PARAMOUNT IN THE FAILURE OF A BID TO BE RECEIVED
ON TIME.
IN B-157156, AUGUST 30, 1965, WE HELD THAT A BID SHOULD BE CONSIDERED
FOR AWARD WHERE THE POST OFFICE ATTEMPTED DELIVERY OF AN AIRMAIL SPECIAL
DELIVERY BID ON SUNDAY, THE DAY BEFORE BID OPENING, AND INSTRUCTIONS AT
THE GOVERNMENT INSTALLATION PRECLUDED GUARDS FROM ACCEPTING MAIL SO THAT
THE POST OFFICE HAD TO REDELIVER THE BID THE NEXT DAY AND FAILED TO DO
SO UNTIL AFTER BID OPENING. THIS DECISION IS CONTROLLING HERE.
WE NOTE PARTICULARLY THAT P&C PERSONNEL PLACED PASSIVE RELIANCE ON
THE POSTAL SERVICE TO TIMELY DELIVER BIDS FOR A MONDAY BID OPENING AFTER
A WEEKEND WHEN DELIVERY OF SUCH MAIL WAS MADE IMPOSSIBLE BY FAMC AND
WHEN THE NORMAL COURSE OF DELIVERY MIGHT WELL BE EXPECTED TO BE DELAYED
DUE TO MAIL BUILDUP OVER THE WEEKEND. IN THESE CIRCUMSTANCES, WE THINK
THAT FAMC PERSONNEL WERE, AT THE LEAST, OBLIGATED TO MAKE TIMELY INQUIRY
OF THE USPS REGARDING THE POSSIBILITY OF ADDITIONAL BIDS. NO SUCH
ACTION WAS TAKEN. WE CONSIDER THE AGENCY'S CONDUCT IN THESE
CIRCUMSTANCES TO FALL SHORT OF THE STANDARD REQUIRED FOR THE EFFECTIVE
ESTABLISHMENT AND IMPLEMENTATION OF PROCEDURES FOR THE RECEIPT OF BIDS
AND REGARD SUCH FAILURE AS THE PARAMOUNT CAUSE OF DELAY.
WE THEREFORE SUSTAIN THE PROTEST. FEDERAL'S BID SHOULD BE CONSIDERED
FOR AWARD.
WE NOTE PARENTHETICALLY THAT FAMC HAS CHANGED ITS PRACTICE OF
NONACCEPTANCE OF ACCOUNTABLE MAIL ON THE WEEKENDS AND WE HAVE BEEN
ADVISED THAT THE FAMC MAIL FACILITY IS NOW STAMPING THE CORRECT TIME ON
RECEIPTED MAIL WHICH SHOULD ELIMINATE THE POSSIBILITY OF RECURRENCE OF
MATTERS OF THIS NATURE.
B-187865, MAY 5, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. ARMY RESERVE OFFICERS INVOLUNTARILY SEPARATED FROM ACTIVE DUTY,
WITH READJUSTMENT PAYMENTS COMPUTED UNDER 10 U.S.C. 687 (1970), WHOSE
MILITARY RECORDS ARE SUBSEQUENTLY CORRECTED TO SHOW CONTINUATION ON
ACTIVE DUTY, ARE LIABLE TO REPAY SUCH READJUSTMENT PAYMENTS TO THE
UNITED STATES.
2. RESERVISTS WHO RECEIVE PAYMENTS FOR UNUSED ACCRUED LEAVE UNDER 37
U.S.C. 501 (1970) UPON SEPARATION FROM ACTIVE DUTY, BUT WHOSE RECORDS
ARE CORRECTED TO EXPUNGE THE FACT OF SUCH SEPARATION, ARE LIABLE TO
REPAY AMOUNTS RECEIVED FOR UNUSED LEAVE; HOWEVER, THEY ARE ENTITLED TO
BE RECREDITED FOR DAYS OF UNUSED LEAVE UP TO THE 60-DAY MAXIMUM
PRESCRIBED BY 37 U.S.C. 501(F) (1970).
3. ARMY MEMBERS SEPARATED FROM EXTENDED ACTIVE DUTY, WHO THEREAFTER
EARN MILITARY PAY AND ALLOWANCES AS MEMBERS OF RESERVE COMPONENTS, BUT
WHOSE RECORDS ARE CORRECTED TO REFLECT CONTINUED ACTIVE DUTY WITH NO
BREAK IN SERVICE, ARE LIABLE TO REPAY SUCH INTERIM RESERVE PAY AND
ALLOWANCES.
4. WHETHER OR NOT ERRONEOUS OR EXCESSIVE VETERANS ADMINISTRATION
DISABILITY COMPENSATION AND EDUCATIONAL ASSISTANCE PAYMENTS WHICH
CONSTITUTE DEBTS TO THE UNITED STATES MUST BE COLLECTED IS A MATTER FOR
SUBMISSION TO THE VETERANS ADMINISTRATION, WHICH HAS EXCLUSIVE
JURISDICTION IN SUCH MATTERS.
5. ARMY MEMBERS SEPARATED FROM BUT LATER RETROACTIVELY RESTORED TO
ACTIVE DUTY BY ADMINISTRATIVE RECORD CORRECTION ACTION (10 U.S.C. 1552
(1970)) THEREBY BECOME ENTITLED TO RETROACTIVE PAYMENT OF MILITARY PAY
AND ALLOWANCES; AND WHILE INTERIM CIVILIAN EARNINGS MAY PROPERLY BE SET
OFF AGAINST AMOUNTS DUE MEMBERS, SUCH CIVILIAN EARNINGS ARE DEDUCTIBLE
ONLY FROM NET BALANCE DUE MEMBERS AFTER SETOFF OF THEIR DEBTS TO THE
GOVERNMENT AND ARE NOT RECOUPABLE IN EXCESS OF THAT NET BALANCE.
6. WHERE ARMY OFFICERS INVOLUNTARILY SEPARATED FROM ACTIVE DUTY
SUBSEQUENTLY OBTAIN RECORDS CORRECTION TO SHOW CONTINUATION ON ACTIVE
DUTY, READJUSTMENT PAYMENTS MADE UPON SEPARATION UNDER 10 U.S.C. 687
(TOGETHER WITH PAYMENTS RECEIVED FOR ACCRUED LEAVE ON SEPARATION AND FOR
INTERIM RESERVE DUTY) ARE THEREBY RENDERED ERRONEOUS, AND SUCH PAYMENTS
MAY THEREFORE BE CONSIDERED FOR WAIVER UNDER 10 U.S.C. 2774.
RESERVE MEMBERS RESTORED TO DUTY:
THIS ACTION IS IN RESPONSE TO A LETTER DATED NOVEMBER 16, 1976, FROM
THE ASSISTANT SECRETARY OF THE ARMY (MANPOWER AND RESERVE AFFAIRS),
REQUESTING A DECISION AS TO WHETHER THERE IS A REQUIREMENT TO RECOUP
READJUSTMENT PAYMENTS MADE TO RESERVE OFFICERS SEPARATED FROM BUT LATER
RESTORED TO ACTIVE DUTY, AND WHETHER SUCH PAYMENTS, IF RECOVERABLE, AND
OTHER MONIES RECEIVED INCIDENT TO SEPARATION ARE PROPER FOR
CONSIDERATION FOR WAIVER.
IT IS INDICATED THAT A NUMBER OF RESERVE OFFICERS WERE INVOLUNTARILY
SEPARATED FROM EXTENDED ACTIVE DUTY IN THE ARMY AFTER BEING PASSED OVER
FOR PROMOTION BY SELECTION BOARDS CONVENED IN 1974 AND 1975. UPON
SEPARATION, THE RESERVE OFFICERS RECEIVED LUMP-SUM READJUSTMENT PAYMENTS
COMPUTED UNDER 10 U.S.C. 687 (1970). THEY APPLIED TO THE ARMY BOARD FOR
CORRECTION OF MILITARY RECORDS (ABCMR) FOR RELIEF, ALLEGING VIOLATIONS
OF STATUTES AND REGULATIONS REGARDING THE COMPOSITION OF THEIR PROMOTION
BOARDS; AND THE ABCMR CONCLUDED THAT THE FAILURE OF THE DEPARTMENT OF
THE ARMY TO APPOINT AN APPROPRIATE NUMBER OF RESERVE OFFICERS AS MEMBERS
OF THE 1974 AND 1975 SELECTION BOARDS RESULTED IN AN INJUSTICE TO THEM
IN THAT THEY WERE DEPRIVED OF CONSIDERATION FOR PROMOTION BY SELECTION
BOARDS CONTAINING RESERVE OFFICERS. NEW SELECTION BOARDS WITH AN
APPROPRIATE NUMBER OF RESERVE OFFICERS WERE THEN CONVENED TO RECONSIDER
THEIR PROMOTIONS.
IT IS FURTHER INDICATED THAT WHEN THE NEW SELECTION BOARDS SELECT FOR
PROMOTION MEMBERS WHO HAD BEEN SEPARATED FOLLOWING THEIR PREVIOUS
NONSELECTION, IT IS NECESSARY TO CORRECT THEIR RECORDS UNDER THE
PROVISIONS OF 10 U.S.C. 1552 (1970) TO SHOW THAT THEY WERE NOT
SEPARATED. WHEN THIS PRINCIPLE IS APPLIED, IT IS STATED THAT A
SUBSTANTIAL INDEBTEDNESS MAY OCCUR BECAUSE ACCRUED LEAVE SETTLEMENT,
READJUSTMENT PAYMENTS, AND INTERIM CIVILIAN EARNINGS ARE INCLUDED IN THE
AMOUNT TO BE SET OFF AGAINST THE MONIES DUE THE MEMBERS AS ACTIVE DUTY
PAY AND ALLOWANCES FOR THE PERIOD WHEN THEY WERE NOT ON ACTIVE DUTY
DURING THE TIME THE CORRECTION ACTION WAS PENDING.
IN A SAMPLE AND APPARENTLY HYPOTHETICAL COMPUTATION INCLUDED WITH THE
SUBMISSION, THE FOLLOWING ITEMS ARE SET OUT AS BEING SUBJECT TO
COLLECTION ACTION: (1) READJUSTMENT PAY; (2) PAYMENT FOR UNUSED
ACCRUED LEAVE; (3) MILITARY PAY AND ALLOWANCES EARNED WHILE A MEMBER OF
A RESERVE COMPONENT; (4) VETERANS ADMINISTRATION DISABILITY
COMPENSATION/EXCESS EDUCATIONAL ASSISTANCE BENEFITS; AND (5) EARNINGS
FROM CIVILIAN SOURCES. THE QUESTION IS RAISED AS TO WHETHER THERE IS A
NECESSITY TO RECOUP THE MONIES RECEIVED BY A MEMBER FOR EACH OF THESE
ITEMS, AND IF SO, WHETHER CLAIMS FOR SUCH AMOUNTS WOULD BE PROPER FOR
CONSIDERATION FOR WAIVER UNDER 10 U.S.C. 2774 (SUPP. II, 1972).
WITH REGARD TO THE RECOUPMENT OF THESE ITEMS, IT IS FIRST OF ALL
QUESTIONED WHETHER THERE IS A NECESSITY TO RECOUP THE READJUSTMENT
PAYMENTS MADE UNDER 10 U.S.C. 687, SINCE IT IS SAID THE PURPOSE OF THE
STATUTE IS TO PROVIDE A MONETARY CUSHION TO SOFTEN THE TRANSITION TO
CIVILIAN LIFE FOR THOSE RESERVISTS WHO ARE INVOLUNTARILY RELEASED. IT
IS SUGGESTED THAT SINCE THE AFFECTED RESERVISTS DID IN FACT PERFORM THE
TRANSITION TO CIVILIAN LIFE AND BORE THE EXPENSE INCIDENT THERETO,
RECOUPMENT ACTION MAY WORK AN INEQUITY AND MAY IN MANY INSTANCES PLACE
THE OFFICERS IN A REDUCED PAY STATUS FOR THE REMAINDER OF THEIR ACTIVE
MILITARY CAREERS.
SECTION 687 OF TITLE 10, UNITED STATES CODE, PROVIDES GENERALLY THAT
A RESERVE MEMBER WHO IS RELEASED FROM ACTIVE DUTY INVOLUNTARILY, AND WHO
HAS COMPLETED, IMMEDIATELY BEFORE HIS RELEASE, AT LEAST 5 YEARS OF
CONTINUOUS ACTIVE DUTY, IS ENTITLED TO A READJUSTMENT PAYMENT COMPUTED
IN ACCORDANCE WITH THE FORMULA THERE PROVIDED NOT TO EXCEED 2 YEARS'
BASIC PAY OF THE GRADE IN WHICH HE IS SERVING AT THE TIME OF HIS RELEASE
OR $15,000, WHICHEVER AMOUNT IS THE LESSER.
SUBSECTION 687(D) SPECIFICALLY PROVIDES:
"(D) ANY READJUSTMENT PAYMENT TO WHICH A MEMBER BECOMES ENTITLED
UNDER THIS SECTION SHALL BE REDUCED BY THE AMOUNT OF ANY PREVIOUS
PAYMENT MADE TO HIM UNDER THIS SECTION THAT HE HAS NOT REPAID TO THE
UNITED STATES. IF HE HAS REPAID THAT AMOUNT TO THE UNITED STATES, THE
PERIOD COVERED BY IT SHALL BE TREATED AS A PERIOD FOR WHICH A PAYMENT
HAS NOT BEEN MADE UNDER THIS SECTION."
THE SOURCE OF 10 U.S.C. 687 IS THE ACT OF JULY 9, 1956, CH. 534, 70
STAT. 517. THE LEGISLATIVE HISTORY OF THAT ACT INDICATES THAT 10 U.S.C.
687(D) WAS SPECIFICALLY DESIGNED TO COVER THE CASES OF RESERVISTS
INVOLUNTARILY SEPARATED FROM BUT SUBSEQUENTLY RECALLED TO ACTIVE DUTY.
THE STATED PURPOSE OF SUBSECTION 687(D) IS TO "PREVENT DUAL PAYMENTS OF
READJUSTMENT PAY IN THE REMOTE POSSIBILITY THAT A RESERVIST MIGHT
RECEIVE READJUSTMENT PAY AFTER HAVING SERVED FOR AT LEAST 5 YEARS AND AT
SOME TIME IN THE FUTURE BE RECALLED TO ACTIVE DUTY AND AGAIN QUALIFY FOR
READJUSTMENT PAY AFTER SERVING 5 MORE YEARS. ONLY ONE SUCH PAYMENT
COULD BE MADE IN THESE CIRCUMSTANCES." SEE S. REPT. NO. 2288, 84TH
CONG., 2D SESS. (1956), AT PAGE 5. MOREOVER, THE TERMS OF SUBSECTION
687(D) CLEARLY CONTEMPLATE THAT READJUSTMENT PAYMENTS GIVEN TO RESERVE
MEMBERS BE "REPAID TO THE UNITED STATES" IN THE EVENT OF THEIR RECALL TO
ACTIVE DUTY.
FURTHERMORE, WE HAVE PREVIOUSLY EXPRESSED THE VIEW THAT A REGULAR
OFFICER WHO RECEIVES SEVERANCE PAY UPON INVOLUNTARY SEPARATION FROM
ACTIVE DUTY (SIMILAR TO A RESERVE OFFICER RECEIVING READJUSTMENT PAY),
BUT WHO LATER BY CORRECTION BOARD ACTION HAS HIS RECORDS CHANGED TO
EXPUNGE THE FACT OF SUCH INVOLUNTARY SEPARATION, IS THEN SUBJECT TO
RECOUPMENT ACTION FOR THE "RECEIVED SEVERANCE PAY NOT PAYABLE IN SUCH
CIRCUMSTANCES." SEE 43 COMP. GEN. 235, 237 (1963). SEE ALSO 42 COMP.
GEN. 617 (1963). ACCORDINGLY, IT IS OUR VIEW THAT THE RESERVE OFFICERS
RESTORED TO ACTIVE DUTY UPON THEIR OWN APPLICATION IN THE CIRCUMSTANCES
DESCRIBED ARE INDEBTED TO THE UNITED STATES FOR THE AMOUNTS RECEIVED AS
READJUSTMENT PAYMENTS UNDER 10 U.S.C. 687, AND ARE LIABLE TO MAKE
RESTITUTION OF SUCH AMOUNTS.
REGARDING THE MATTER OF PAYMENTS RECEIVED FOR UNUSED ACCRUED LEAVE,
IT APPEARS THE PAYMENTS WERE AUTHORIZED ON THE BASIS OF SEPARATION FROM
ACTIVE DUTY AS SET FORTH IN 37 U.S.C. 501(A)(1)(B) (1970). THE
CORRECTION OF RECORDS EXPUNGING THE FACT OF SUCH SEPARATION RENDERED THE
PAYMENTS IMPROPER AND MADE THE AMOUNTS RECEIVED SUBJECT TO RECOUPMENT
ACTION. HOWEVER, IT FURTHER APPEARS THAT THE MEMBERS AFFECTED ARE
ENTITLED TO BE RECREDITED FOR THE DAYS OF UNUSED LEAVE FOR WHICH
PAYMENTS WERE MADE, UP TO THE 60-DAY LIMIT PRESCRIBED BY 37 U.S.C.
501(F). SEE SCHMIDT V. UNITED STATES, 192 CT. CL. 420 (1970).
WITH RESPECT TO THE QUESTION OF THE RECOUPMENT OF INTERIM PAY
RECEIVED FOR INACTIVE RESERVE DUTY, 37 U.S.C. 206(A) (1970) EXPRESSLY
PROVIDES THAT INACTIVE-DUTY TRAINING PAY IS AUTHORIZED ONLY FOR A MEMBER
"WHO IS NOT ENTITLED TO BASIC PAY." SINCE THE RECORDS OF THE MEMBERS IN
QUESTION WERE CORRECTED TO REFLECT CONTINUED ENTITLEMENT TO BASIC PAY,
INTERIM PAY RECEIVED FOR INACTIVE-DUTY TRAINING WAS RENDERED CONTRARY TO
STATUTE AND THEREFORE ERRONEOUS. ALSO, ANY PAY AND ALLOWANCES RECEIVED
FOR SPECIAL TOURS OF ACTIVE DUTY OR ACTIVE DUTY FOR TRAINING DURING SUCH
INTERIM PERIOD BECAME ERRONEOUS OVERPAYMENTS BY THE CORRECTION OF
RECORDS TO SHOW CONTINUATION ON EXTENDED ACTIVE DUTY. THUS, ALL INTERIM
MILITARY PAY AND ALLOWANCES EARNED AS A MEMBER OF A RESERVE COMPONENT
WOULD BE SUBJECT TO RECOUPMENT.
CONCERNING THE RECOUPMENT OF BENEFIT AND COMPENSATION PAYMENTS
RECEIVED FROM THE VETERANS ADMINISTRATION (VA), 38 U.S.C. 211(A) (1970),
EXPRESSLY PROVIDES THAT DECISIONS OF THE ADMINISTRATOR ON ANY QUESTION
OF LAW OR FACT CONCERNING A CLAIM FOR BENEFITS IS FINAL AND CONCLUSIVE
AND NO OTHER OFFICIAL OR COURT OF THE UNITED STATES SHALL HAVE THE POWER
OR JURISDICTION TO REVIEW SUCH DECISION. THIS OFFICE, THEREFORE, HAS NO
AUTHORITY TO CHANGE OR REVERSE ANY DECISION OF THE VA PERTAINING TO THE
ENTITLEMENT TO OR PAYMENT OF BENEFITS TO ANY MEMBER OR FORMER MEMBER.
IF THE VA MAKES A DETERMINATION, BASED ON AN INDIVIDUAL'S STATUS, THAT
HE WAS ERRONEOUSLY PAID BENEFITS FROM THAT AGENCY, SUCH ERRONEOUS
PAYMENTS BECOME A DEBT TO THE UNITED STATES WHICH MUST BE RECOVERED
EITHER DIRECTLY FROM THE INDIVIDUAL OR IF THE INDIVIDUAL IS DUE OTHER
SUMS FROM THE UNITED STATES, BY SETOFF FROM SUCH SUMS. SEE 53 COMP.
GEN. 299 (1973); B-177924, JANUARY 27, 1975.
AS TO THE MATTER OF INTERIM CIVILIAN EARNINGS, PARAGRAPH 25 OF ARMY
REGULATION 15-185 (JUNE 4, 1974) PROVIDES THAT IN THE SETTLEMENT OF
CLAIMS FOLLOWING ABCMR ACTION, EARNINGS RECEIVED FROM CIVILIAN
EMPLOYMENT DURING ANY PERIOD FOR WHICH ACTIVE DUTY PAY AND ALLOWANCES
ARE PAYABLE WILL BE DEDUCTED FROM SUCH SETTLEMENT. WE HAVE PREVIOUSLY
EXPRESSED THE VIEW, HOWEVER, THAT IN THE ADJUSTMENT OF ACCOUNTS IN SUCH
SITUATIONS, GOVERNMENT PAY AND OTHER MONETARY BENEFITS REQUIRED TO BE
RECOVERED BY REASON OF THE CORRECTION OF RECORDS SHOULD BE SET OFF
FIRST, WITH CIVILIAN EARNINGS TO BE DEDUCTED FROM THE REMAINING BALANCE
DUE THE MEMBER, IF ANY. SEE 49 COMP. GEN. 656, 662 (1970). THUS, IF
THE AMOUNT OF THE READJUSTMENT PAYMENT AND OTHER GOVERNMENT BENEFITS
SUBJECT TO RECOUPMENT EQUALS OR EXCEEDS THE AMOUNT DUE THE MEMBER FOR
BACKPAY AND ALLOWANCES, THERE WOULD BE NO FURTHER SETOFF OR DEDUCTION
FOR INTERIM CIVILIAN EARNINGS, SINCE SUCH EARNINGS ARE NOT RECOUPABLE
BUT ARE MERELY DEDUCTIBLE FROM ANY REMAINING AMOUNT WHICH MAY BE OWED TO
THE MEMBER.
WITH REGARD TO THE QUESTION CONCERNING THE POSSIBILITY OF WAIVER, 10
U.S.C. 2774(A) (SUPP. II, 1972) PROVIDES IN PERTINENT PART THAT A CLAIM
OF THE UNITED STATES AGAINST A PERSON ARISING OUT OF AN "ERRONEOUS
PAYMENT" OF PAY OR ALLOWANCES, TO OR ON BEHALF OF A MEMBER OR FORMER
MEMBER OF THE UNIFORMED SERVICES, THE COLLECTION OF WHICH WOULD BE
AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE
UNITED STATES MAY BE WAIVED IN WHOLE OR IN PART.
THE PRIMARY PURPOSE OF A CORRECTION OF RECORDS UNDER 10 U.S.C. 1552
IN CASES OF THE TYPE DESCRIBED IS TO RESTORE THE MEMBER OR FORMER MEMBER
TO THE SAME POSITION THAT HE WOULD HAVE HAD IF HE HAD NOT BEEN SEPARATED
OR RELIEVED FROM THE PERFORMANCE OF ACTIVE MILITARY SERVICE. THE
RESULTING BENEFITS AND LIABILITIES DEPEND SOLELY UPON A PROPER
APPLICATION OF THE STATUTES TO THE FACTS AS SHOWN BY THE CORRECTED
RECORD IN EACH PARTICULAR CASE, FROM THE EFFECTIVE DATES MENTIONED IN
THE CORRECTION RATHER THAN FROM THE DATE OF THE APPROVAL OF THE ACTION
BY THE SECRETARY OF THE SERVICE CONCERNED. SEE 34 COMP. GEN. 7 (1954);
40 COMP. GEN. 502 (1961); 43 COMP. GEN. 235, SUPRA.
THE READJUSTMENT PAYMENTS, UNUSED ACCRUED LEAVE PAYMENTS, AND INTERIM
MILITARY PAY FOR INACTIVE DUTY RESERVE SERVICE PAID TO THE MEMBERS IN
QUESTION WERE APPARENTLY CORRECT AND PROPER WHEN MADE. ORDINARILY,
DEBTS WHICH RESULT FROM PAYMENTS PROPER WHEN MADE ARE NOT CONSIDERED AS
ARISING OUT OF "ERRONEOUS PAYMENTS" SO AS TO BE SUBJECT TO CONSIDERATION
FOR WAIVER UNDER 10 U.S.C. 2774. COMPARE B-150028, JULY 9, 1974.
HOWEVER, WHEN A MEMBER'S RECORDS ARE CORRECTED UNDER 10 U.S.C. 1552, TO
SHOW THAT HE WAS NOT SEPARATED FROM ACTIVE DUTY, SUCH CORRECTION RELATES
BACK TO RETROACTIVELY CHANGE THE FACTUAL SITUATION, AND RENDERS THE
READJUSTMENT PAYMENT RECEIVED A PAYMENT THAT SHOULD NOT HAVE BEEN MADE.
COMPARE 42 COMP. GEN. 617, SUPRA. ACCORDINGLY, IT IS OUR VIEW THAT
CLAIMS AGAINST THE OFFICERS IN QUESTION ARISING OUT OF SUCH
READJUSTMENT, LEAVE AND RESERVE SERVICE PAYMENTS MAY BE GIVEN
CONSIDERATION FOR WAIVER IN WHOLE OR IN PART UNDER 10 U.S.C. 2774, ON AN
INDIVIDUAL, CASE-BY-CASE BASIS. SEE 55 COMP. GEN. 113 (1975). IN DOING
SO IT SEEMS PROPER TO CONSIDER THAT THE PURPOSE OF THE CORRECTION OF THE
MEMBERS' RECORDS AND THE PAYMENTS WHICH BECOME DUE UPON SUCH CORRECTION
ARE TO RESTORE THE MEMBERS, AS NEARLY AS POSSIBLE, TO THE POSITION THEY
WOULD HAVE BEEN IN IF THE ERROR HAD NOT BEEN MADE. IN SUCH
CIRCUMSTANCES IT MAY NOT BE IN THE BEST INTEREST OF THE UNITED STATES
NOR IN KEEPING WITH EQUITY AND GOOD CONSCIENCE TO WAIVE THE TOTAL AMOUNT
OF THE ERRONEOUS PAYMENTS BUT ONLY SUCH PART OF THE ERRONEOUS PAYMENTS
WHICH WOULD PREVENT THE MEMBER FROM HAVING A NET INDEBTEDNESS UPON
RESTORATION TO DUTY.
OVERPAYMENTS OF VA COMPENSATION AND BENEFITS DO NOT INVOLVE MILITARY
PAY AND ALLOWANCES AND MAY NOT BE CONSIDERED FOR WAIVER UNDER 10 U.S.C.
2774; RATHER, WHETHER OR NOT THOSE AMOUNTS NEED BE COLLECTED IS A
MATTER FOR CONSIDERATION BY THE VA.
THE QUESTIONS ARE ANSWERED ACCORDINGLY.
B-187876, APR 14, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
A MARINE CORPS MEMBER WITH DEPENDENTS WAS TRANSFERRED FROM DUTY IN
CONTINENTAL UNITED STATES TO RESTRICTED DUTY (DEPENDENTS PROHIBITED)
OVERSEAS. HIS ORDERS STATED THE INTENTION OF THE COMMANDANT TO REASSIGN
HIM TO HAWAII AFTER COMPLETION OF HIS RESTRICTED DUTY ASSIGNMENT.
MEMBER'S DEPENDENTS MOVED TO HAWAII CONCURRENT WITH THE MEMBER'S
RESTRICTED DUTY ASSIGNMENT AND THE MEMBER NOW CLAIMS STATION ALLOWANCES
FOR DEPENDENTS UNDER 37 U.S.C. 405 (1970). SINCE SUCH MOVE MAY BE
VIEWED AS HAVING A CONNECTION WITH THE MEMBER'S DUTY ASSIGMNENT, THE
JOINT TRAVEL REGULATIONS MAY BE AMENDED TO AUTHORIZE STATION ALLOWANCES
IN SUCH CASES. HOWEVER, THIS MEMBER'S CLAIM MAY NOT BE PAID BECAUSE
CURRENT REGULATIONS CLEARLY PROHIBIT IT.
LIEUTENANT COLONEL CHARLES D. ROBINSON, USMC:
THIS ACTION IS IN RESPONSE TO A LETTER DATED JULY 28, 1976, AND
ENCLOSURES, FROM MAJOR M. G. SORENSEN, USMC, DISBURSING OFFICER, MARINE
CORPS AIR STATION, KANEOHE BAY, HAWAII, REQUESTING AN ADVANCE DECISION
AS TO WHETHER LIEUTENANT COLONEL CHARLES D. ROBINSON, USMC,
000-00-5561, MAY BE PAID STATION ALLOWANCES ON BEHALF OF HIS DEPENDENTS
AS A RESULT OF THEIR MOVE TO HAWAII INCIDENT TO THE TRANSFER OF COLONEL
ROBINSON TO A RESTRICTED TOUR OF DUTY IN OKINAWA. THE REQUEST HAS BEEN
ASSIGNED PDTATAC CONTROL NO. 76-24, AND FORWARDED TO THIS OFFICE BY PER
DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE ENDORSEMENT DATED
NOVEMBER 19, 1976.
PURSUANT TO ORDERS DATED MAY 4, 1976, AS SUBSEQUENTLY ENDORSED,
COLONEL ROBINSON WAS DETACHED FROM DUTY AT THE ARMY WAR COLLEGE,
CARLISLE BARRACKS, PENNSYLVANIA, AND TRANSFERRED ON A PERMANENT CHANGE
OF STATION (PCS) TO THE 3RD MARINE AMPHIBIOUS FORCE, FLEET MARINE FORCE,
OKINAWA, A RESTRICTED OVERSEAS DUTY STATION, TO WHICH THE MOVEMENT OF
HIS DEPENDENTS WAS PROHIBITED. COLONEL ROBINSON'S ORDERS AUTHORIZED
TRANSPORTATION OF HIS DEPENDENTS, PRIVATELY OWNED VEHICLE AND HOUSEHOLD
GOODS TO HAWAII AS A DESIGNATED LOCATION IN ACCORDANCE WITH PARAGRAPH
M7005-2, VOLUME 1, JOINT TRAVEL REGULATIONS (1 JTR). THE ORDERS ALSO
STATED THAT IT WAS THE INTENTION OF THE COMMANDANT OF THE MARINE CORPS
TO ASSIGN COLONEL ROBINSON TO DUTY AT HEADQUARTERS, FLEET MARINE FORCE,
PACIFIC (WHICH WE UNDERSTAND IS IN HAWAII), FOLLOWING HIS TOUR OF DUTY
IN OKINAWA. INCIDENT TO THOSE ORDERS COLONEL ROBINSON MOVED HIS
DEPENDENTS AND HOUSEHOLD GOODS TO HAWAII AND THEN TRAVELED ON TO HIS NEW
DUTY STATION IN OKINAWA.
ALTHOUGH NO VOUCHER ACCOMPANIED THE DISBURSING OFFICER'S SUBMISSION,
APPARENTLY COLONEL ROBINSON IS CLAIMING OVERSEAS STATION ALLOWANCES AS A
MEMBER WITH DEPENDENTS WHO IS ASSIGNED TO DUTY IN A RESTRICTED AREA.
SUCH STATION ALLOWANCES, PRESCRIBED UNDER 37 U.S.C. 405 (1970), INCLUDE
1. HOUSING AND COST-OF-LIVING ALLOWANCES, 2. INTERIM HOUSING
ALLOWANCES, AND 3. TEMPORARY LODGING ALLOWANCES. SEE 1 JTR, PARAGRAPH
M4300-4.
AS INDICATED IN THE SUBMISSION, UNDER 1 JTR, PARAGRAPHS M7005-2, ITEM
3 (CHANGE 268, JUNE 1, 1975), AND M8253-2B (CHANGE 279, MAY 1, 1976, AND
CHANGE 246, AUGUST 1, 1973), WHEN A MEMBER IS TRANSFERRED BY PCS ORDERS
FROM A DUTY STATION IN THE UNITED STATES TO A RESTRICTED STATION,
TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD GOODS MAY BE AUTHORIZED BY
THE SECRETARY CONCERNED TO PUERTO RICO, ALASKA, HAWAII, OR ANY TERRITORY
OR POSSESSION OF THE UNITED STATES. HOWEVER, 1 JTR, PARAGRAPH M4305
SPECIFICALLY PROVIDES THAT A MEMBER WHO IS REASSIGNED FROM A PERMANENT
DUTY STATION IN THE UNITED STATES TO A PERMANENT DUTY STATION IN A
RESTRICTED AREA OUTSIDE THE UNITED STATES IS NOT ENTITLED TO STATION
ALLOWANCES ON BEHALF OF HIS DEPENDENTS WHEN THE DEPENDENTS MOVE TO A
DESIGNATED PLACE OUTSIDE THE UNITED STATES. PARAGRAPH M4305 INDICATES
THAT SUCH PROHIBITION IS BASED ON 49 COMP. GEN. 548 (1970).
THE DISBURSING OFFICER INDICATES THAT HAD COLONEL ROBINSON DESIGNATED
A PLACE WITHIN CONUS FOR TRANSPORTATION OF HIS DEPENDENTS AND HOUSEHOLD
GOODS, THE GOVERNMENT WOULD HAVE INCURRED THE EXPENSE OF TRANSPORTING
THEM TO THAT PLACE AND THEN LATER TO HAWAII UPON COLONEL ROBINSON'S
ASSIGNMENT THERE. HE FURTHER INDICATES THAT THE DESIGNATION BY THE
MEMBER OF HAWAII FOR TRANSPORTATION OF HIS HOUSEHOLD GOODS WAS NOT,
THEREFORE, PURELY FOR HIS OWN CONVENIENCE, BUT ALSO FOR THE CONVENIENCE
AND LESSER EXPENSE OF THE GOVERNMENT. HE STATES THAT INSOFAR AS IT IS
THE POLICY OF THE MARINE CORPS TO ADVISE MEMBERS ASSIGNED TO RESTRICTED
OVERSEAS TOURS OF THEIR SUBSEQUENT ASSIGNMENTS WHENEVER POSSIBLE AND
THEN TO AUTHORIZE TRANSPORTATION OF DEPENDENTS TO THE VICINITY OF THAT
SUBSEQUENT ASSIGNMENT, IT SEEMS REASONABLE THAT OTHER ASSOCIATED
ALLOWANCES SUCH AS STATION ALLOWANCES SHOULD BE PAYABLE.
BY ENDORSEMENT TO THE SUBMISSION, DATED OCTOBER 18, 1976, BY
DIRECTION OF THE COMMANDANT OF THE MARINE CORPS THE FOLLOWING COMMENTS
ARE MADE ON THE CASE:
"THE LITERAL TERMS OF THE APPLICABLE STATUTORY REGULATIONS,
SUBPARAGRAPH M4305-2 OF THE JOINT TRAVEL REGULATIONS, WOULD PRECLUDE
PAYMENT OF STATION ALLOWANCES IN THE CASE DESCRIBED IN THE BASIC
CORRESPONDENCE.
"THE PROHIBITORY PROVISION IS BASED ON 49 COMP. GEN. 548. THE
CONCLUSION DRAWN IN THAT DECISION WAS NECESSITATED BY THE ABSENCE OF ANY
CONNECTION BETWEEN THE OVERSEAS LOCATION OF DEPENDENTS AND THE PLACE OF
DUTY OF THEIR SPONSOR WHEN THE MEMBER WAS TRANSFERRED FROM CONUS TO A
RESTRICTED OVERSEAS STATION. THE DECISION RECOGNIZED AS VALID THE
REGULATIONS UNDER WHICH STATION ALLOWANCES MAY BE AUTHORIZED A MEMBER
WHOSE TRANSFER IS FROM AN UNRESTRICTED TO A RESTRICTED OVERSEAS STATION
AND WHOSE DEPENDENTS EITHER REMAIN IN THE VICINITY OF HIS OLD STATION OR
MOVE TO ANOTHER AREA OVERSEAS. IN THIS SITUATION, A CONNECTION IS
DEEMED TO EXIST BETWEEN THE DEPENDENTS' PRESENCE OVERSEAS, EVEN THOUGH
IN A DIFFERENT LOCALE FROM THE OLD STATION, AND THE MEMBER'S DUTY AT THE
OLD STATION. THE MEMBER'S HAVING BEEN ON DUTY AT THAT STATION IS
RENDERED THE EQUIVALENT OF BEING ON DUTY THERE FOR THE PURPOSE OF 37
U.S.C. 405, WHICH AUTHORIZES PAYMENT OF STATION ALLOWANCES TO 'A MEMBER
WHO IS ON DUTY OUTSIDE OF THE UNITED STATES OR IN HAWAII OR ALASKA'.
THE RELATIONSHIP OF DEPENDENTS' LOCATION TO THEIR SPONSOR'S PLACE OF
DUTY REFERS TO DUTY REQUIRED OF THE MEMBER IN THE PAST.
"IN THE CASE AT HAND, THE PRESENCE OF DEPENDENTS OVERSEAS IS RELATED
TO DUTY TO BE REQUIRED OF THE MEMBER IN THE FUTURE. IT IS BELIEVED THAT
IT MAY BE PERMISSIBLE UNDER 37 U.S.C. 405 TO CONSIDER THE PRESENCE OF
DEPENDENTS OVERSEAS TO BE CONNECTED WITH A SCHEDULED DUTY ASSIGNMENT OF
THEIR SPONSOR ON THE SAME BASIS AS A CONNECTION IS NOW MADE WITH A
COMPLETED ASSIGNMENT. ASSUMING THIS TO BE VALID, THEN THE PRESENT CASE
INTRODUCES A FACTOR THAT WAS NOT INVOLVED IN THE SITUATION ON WHICH THE
PROHIBITORY PROVISION OF THE STATUTORY REGULATIONS IS BASED."
THAT ENDORSEMENT ALSO PRESENTS THE FOLLOWING QUESTIONS:
"SINCE 37 U.S.C. 405 HAS BEEN CONSTRUED SO THAT THE PHRASE 'A MEMBER
WHO IS ON DUTY OUTSIDE OF THE UNITED STATES OR IN HAWAII OR ALASKA' MAY
IN EFFECT ENCOMPASS A MEMBER WHO WAS ON SUCH DUTY BEFORE TRANSFER TO A
RESTRICTED TOUR, WOULD THE LAW PERMIT SIMILARLY CONSIDERING THAT THE
PHRASE MAY ALSO INCLUDE A MEMBER WHO WILL BE ON SUCH DUTY WHEN A
CONNECTION EXISTS BETWEEN THIS FUTURE DUTY AND THE PLACE TO WHICH HIS
DEPENDENTS MOVE INCIDENT TO HIS ASSIGNMENT TO A RESTRICTED TOUR, AS IN
THE CASE OF THE SUBJECT NAMED CLAIMANT?
"IF THE ANSWER TO THE PRECEDING QUESTION IS IN THE AFFIRMATIVE, WOULD
THE LITERAL TERMS OF ITEM 1 OF SUBPARAGRAPH M4300-1 AND SUBPARAGRAPH
M4305-1 OF THE JOINT TRAVEL REGULATIONS BE BINDING IN THE PRESENT CASE
UNTIL CHANGED, NOTWITHSTANDING THAT THE CONSIDERATIONS UNDERLYING THESE
PROVISIONS APPARENTLY DID NOT INCLUDE THE EXISTENCE OF A CONNECTION
BETWEEN THE PLACE OF A FUTURE DUTY ASSIGNMENT AND THE LOCATION OF
DEPENDENTS, WHICH CHARACTERIZES THE PRESENT CASE?"
IN 49 COMP. GEN. 548, SUPRA, WE WERE ASKED WHETHER THE JTR'S COULD
LEGALLY BE AMENDED TO AUTHORIZE THE PAYMENT OF STATION ALLOWANCES IN THE
CASE OF A MEMBER WHOSE DEPENDENTS MADE AN AUTHORIZED MOVE FROM A PLACE
IN THE UNITED STATES, AS DEFINED IN THE REGULATIONS, TO A DESIGNATED
PLACE IN ALASKA, HAWAII, PUERTO RICO, OR A TERRITORY OR POSSESSION OF
THE UNITED STATES UPON HIS PCS FROM A DUTY STATION IN THE UNITED STATES
TO A RESTRICTED AREA. WE STATED THE VIEW THAT NO AUTHORITY EXISTS FOR
PAYMENT OF STATION ALLOWANCES UNDER 37 U.S.C. 405 ON ACCOUNT OF
DEPENDENTS IF THE DEPENDENTS' RESIDENCE OUTSIDE THE UNITED STATES HAS NO
CONNECTION WITH THE MEMBER'S DUTY ASSIGNMENT AND CITED 38 COMP. GEN. 531
(1959).
BASING OUR DECISION IN 49 COMP. GEN. 548, SUPRA, ON AN EXAMINATION OF
THE PURPOSE FOR THE DEPENDENTS' MOVE FROM THE UNITED STATES TO AN
OVERSEAS RESIDENCE AS CALLED FOR BY 38 COMP. GEN. 531, 532, SUPRA, WE
STATED AT PAGE 550:
"*** IN CASES WHERE DEPENDENTS, WHO ARE NOT AUTHORIZED TO ACCOMPANY A
MEMBER TO AN OVERSEAS DUTY STATION, MOVE FROM THE UNITED STATES TO AN
OVERSEAS RESIDENCE AS A DESIGNATED PLACE, THEIR OVERSEAS RESIDENCE IS
PURELY A MATTER OF PERSONAL CHOICE AND, AS SUCH, IS SEPARATE AND APART
FROM THE MEMBER'S OVERSEAS DUTY."
IN 38 COMP. GEN. 531, AT PAGE 532, WE NOTED THAT THE REGULATIONS,
THEN AS NOW, PROVIDE THAT STATION ALLOWANCES ARE AUTHORIZED FOR THE
PURPOSE OF DEFRAYING THE AVERAGE EXCESS COST OF LIVING EXPERIENCED BY
MEMBERS ON PERMANENT DUTY AT PLACES OUTSIDE THE UNITED STATES. WE
CONCLUDED:
"*** THUS, THE CONTROLLING REGULATIONS NOT ONLY PROVIDE THAT THE
DEPENDENTS MUST RESIDE IN THE VICINITY OF THE MEMBER'S STATION; THEY
SPECIFICALLY SET FORTH THE ONLY PURPOSE FOR WHICH THE ALLOWANCE MAY BE
PAID."
THEREFORE, IN THAT CASE WE HELD THAT A MEMBER TRANSFERRED TO FRANCE
WHOSE WIFE WAS A FRENCH NATIONAL, AND WHOSE DEPENDENTS WERE ALREADY
LIVING IN FRANCE AT THE TIME OF THE MEMBER'S ASSIGNMENT THERE, WAS NOT
ENTITLED TO STATION ALLOWANCES SINCE HIS DEPENDENTS WERE RESIDING IN THE
VICINITY OF HIS DUTY ASSIGNMENT SOLELY THROUGH COINCIDENCE AND NOT DUE
TO THE MEMBER'S DUTY ASSIGNMENT.
IN THE CASE PRESENTED HERE, THE MOVE TO THE OVERSEAS RESIDENCE BY
COLONEL ROBINSON'S DEPENDENTS APPARENTLY WAS A MATTER OF BOTH THEIR
PERSONAL CHOICE AND THEIR ANTICIPATION, BASED ON THE INTENT MANIFESTED
BY THE COMMANDANT OF THE MARINE CORPS IN THE MEMBER'S ORDERS, THAT HE
WOULD BE PERMANENTLY ASSIGNED TO HAWAII UPON COMPLETION OF HIS
RESTRICTED TOUR OF DUTY. IN THIS REGARD, THEIR RESIDENCE IN HAWAII MAY
NOT BE "PURELY A MATTER OF PERSONAL CHOICE RATHER, THEIR HAWAII
RESIDENCE MAY BE, TO AN EXTENT, RELATED TO THE MEMBER'S ANTICIPATED
OVERSEAS PERMANENT DUTY ASSIGNMENT, ALTHOUGH NOT DIRECTLY RELATED TO HIS
CURRENT ASSIGNMENT.
THE STATUTE AUTHORIZING STATION ALLOWANCES, 37 U.S.C. 405, IS A
BROADLY WRITTEN STATUTE WHICH PROVIDES FOR INCREASED COST-OF-LIVING
ALLOWANCES, AS AUTHORIZED BY THE SECRETARIES CONCERNED, INCIDENT TO A
PERMANENT DUTY ASSIGNMENT OUTSIDE THE UNITED STATES. THE LANGUAGE OF
THAT PROVISION DOES NOT PRECLUDE PAYMENT OF STATION ALLOWANCES UNDER
CIRCUMSTANCES PRESENTED HERE. THE TEST, DISCUSSED ABOVE, TO EXAMINE THE
PURPOSE OF THE MOVE OF A MEMBER'S DEPENDENTS TO AN OVERSEAS RESIDENCE
WHICH WE HAVE EMPLOYED BEGINNING WITH OUR DECISION IN 38 COMP. GEN. 531,
SUPRA, PROVIDES PROTECTION AGAINST UNWARRANTED ABUSE OF ENTITLEMENTS
PAYABLE TO MEMBERS UNDER 37 U.S.C. 405. COMPARE 43 COMP. GEN. 525
(1964). IN ACCORDANCE WITH THEIR AUTHORITY AND IN LINE WITH 49 COMP.
GEN. 548, THE SECRETARIES HAVE SPECIFICALLY PROHIBITED PAYMENT OF
STATION ALLOWANCES IN CASES IN WHICH THE DEPENDENTS MOVE TO A DESIGNATED
PLACE OUTSIDE CONUS INCIDENT TO A MEMBER'S PCS FROM A STATION INSIDE
CONUS TO A RESTRICTED STATION. THEREFORE, UNDER CURRENT REGULATIONS,
COLONEL ROBINSON IS NOT ENTITLED TO THE STATION ALLOWANCES CLAIMED.
CONCERNING WHETHER THE REGULATIONS MAY BE CHANGED TO AUTHORIZE
PAYMENT OF STATION ALLOWANCES IN SITUATIONS SUCH AS THIS, THE STATUTE IS
SUFFICIENTLY BROAD TO SUPPORT A CAREFULLY DRAWN REGULATION WHICH WOULD
PROVIDE SUCH ALLOWANCES IN CASES IN WHICH A MEMBER'S DEPENDENTS MOVE
FROM THE UNITED STATES TO OUTSIDE THE UNITED STATES OR TO ALASKA,
HAWAII, OR A UNITED STATES TERRITORY OR POSSESSION, INCIDENT TO THAT
MEMBER'S ASSIGNMENT TO A RESTRICTED TOUR IF THE PURPOSE OF THEIR MOVE IS
PRIMARILY BASED ON THEIR RELIANCE UPON A PROPERLY ISSUED OFFICIAL
DETERMINATION THAT THE MEMBER WILL BE REASSIGNED IMMEDIATELY FOLLOWING
COMPLETION OF THE RESTRICTED TOUR, TO THE LOCALE TO WHICH THE DEPENDENTS
MOVED. ANY SUCH CHANGE IN THE REGULATIONS SHOULD BE MADE SO AS TO
PRESERVE THE PRINCIPLES SET OUT IN 49 COMP. GEN. 548. WE BELIEVE,
HOWEVER, THAT AS CURRENTLY WRITTEN PARAGRAPH M4305 CLEARLY PROHIBITS
PAYMENT AND, ALTHOUGH THAT PROHIBITION IS BASED ON 49 COMP. GEN. 548, WE
DO NOT BELIEVE THAT ITS CLEAR PROHIBITION CAN BE AVOIDED IN COLONEL
ROBINSON'S CASE. THEREFORE, PAYMENT TO HIM IS NOT AUTHORIZED.
THE QUESTIONS ARE ANSWERED ACCORDINGLY.
B-187617, APR 7, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. COMPLAINT BY WOULD-BE SUPPLIER TO PRIME CONTRACTOR THAT GRANTEE'S
AWARD OF A CONTRACT WAS INCONSISTENT WITH FEDERAL COMPETITIVE BIDDING
PRINCIPLES APPLICABLE TO GRANT IS NOT SUSTAINED. RECORD SHOWS THAT
THERE WAS MAXIMUM AND FREE COMPETITION AMONG ALL BIDDERS AND THAT NO
BIDDER WAS PREJUDICED AS RESULT OF ALLEGED DEFICIENT SPECIFICATION
PROVISIONS.
2. SOLICITATION PROVISION WHICH ALLOWS BIDDERS TO SUBMIT BID BASED
ON SPECIFIED DESIGN AND ALTERNATE BID DEVIATING FROM THOSE DESIGN
FEATURES, THE LATTER SUBJECT TO POST-BID OPENING QUALIFICATION
PROCEDURES, DOES NOT FATALLY TAINT PROCUREMENT. ALTHOUGH PROVISION
GIVES BIDDERS "TWO BITES AT THE APPLE" WITH RESPECT TO ALTERNATE BID,
BIDDERS ARE BOUND BY THEIR BASIC BIDS AND BIDDER WHO WAS LOW ON BOTH
BASIC AND ALTERNATE SYSTEMS DID NOT HAVE OPTION OF DECIDING, AFTER BID
OPENING, WHETHER TO REMAIN IN COMPETITION.
UNION CARBIDE CORPORATION:
THIS CASE INVOLVES A COMPLAINT BY A WOULD-BE SUPPLIER AGAINST THE
AWARD OF A CONTRACT BY THE RECIPIENT OF A FEDERAL GRANT. THE
COMPLAINANT STATES THAT THE AWARD CONTRAVENED THE REQUIREMENTS OF THE
GRANT AGREEMENT THAT AWARD BE MADE TO THE LOW RESPONSIVE, RESPONSIBLE
BIDDER AFTER COMPETITIVE BIDDING. THE BASIS FOR THE COMPLAINT IS THE
ASSERTION THAT THE BID ACCEPTED BY THE GRANTEE WAS NONRESPONSIVE IN THAT
IT WAS BASED ON A SYSTEM THAT DEVIATED SUBSTANTIALLY FROM THE
SPECIFICATIONS INCLUDED IN THE SOLICITATION. FOR THE REASONS STATED
HEREIN, WE FIND THE COMPLAINT TO BE WITHOUT MERIT.
THE COMPLAINT WAS FILED BY UNION CARBIDE CORPORATION (UC) AGAINST THE
AWARD MADE TO JOHN T. BRADY AND COMPANY (BRADY) BY WESTCHESTER COUNTY,
NEW YORK. THE PROCUREMENT, WHICH INVOLVES THE ADDITION OF SECONDARY
TREATMENT CAPABILITY TO THE EXISTING PRIMARY SEWAGE TREATMENT PLANT
LOCATED IN THE CITY OF NEW ROCHELLE, NEW YORK, IS FUNDED IN SUBSTANTIAL
PART (75 PERCENT) BY A GRANT FROM THE ENVIRONMENTAL PROTECTION AGENCY
(EPA) PURSUANT TO TITLE II OF THE FEDERAL WATER POLLUTION ACT AMENDMENTS
OF 1972, PUBLIC LAW 92-500, 86 STAT. 833, 33 U.S.C. SEC. 1281 ET SEQ.
(SUPP. V 1975).
PURSUANT TO THE GRANT, WESTCHESTER COUNTY ISSUED AN INVITATION FOR
BIDS (IFB) FOR THE PROJECT WHICH CONTEMPLATED THE AWARD OF FOUR SEPARATE
CONTRACTS. CONTRACT 1912G, FOR GENERAL CONSTRUCTION, IS THE SUBJECT OF
UC'S COMPLAINT. LINE ITEM 2 OF THAT CONTRACT SOLICITED BIDS FOR
FURNISHING AND INSTALLING AN "OXYGEN EQUIPMENT SYSTEM." SECTION 350 OF
THE IFB'S SPECIFICATIONS SET FORTH CERTAIN DESIGN FEATURES AND
PERFORMANCE PARAMETERS FOR THE SYSTEM AND PROVIDED THAT THE SYSTEM'S
OXYGEN SUPPLY EQUIPMENT CONSIST IN PART OF A "PRESSURE SWING ABSORBER
(PSA) OR EQUIVALENT" OXYGEN GENERATOR.
HOWEVER, ARTICLE 8 OF THE IFB, ENTITLED "MAJOR EQUIPMENT BID ITEMS
AND PREQUALIFICATION", INFORMED BIDDERS THAT "ONE SYSTEM HAD BEEN USED
IN PREPARING THE *** SPECIFICATIONS, "BUT THAT THE SPECIFICATIONS "DO
NOT NAME ANY SUPPLIER, AND THAT BIDDERS, IN ADDITION TO INSERTING IN THE
SPACE PROVIDED ON THE BID FORM (LINES (A1) AND (A2)) THE NAME OF ITS
SUPPLIER AND TOTAL PRICE FOR FURNISHING AND INSTALLING THE OXYGEN
EQUIPMENT SYSTEM, COULD PROPOSE (ON LINES (B1) AND (B2)) "ANOTHER
SUPPLIER AND TOTAL PRICE FOR FURNISHING AND INSTALLING THE SYSTEM."
ARTICLE 8 FURTHER ADVISED THAT IF THE ALTERNATE SYSTEM REQUIRED "ANY
MODIFICATION ON THE ARRANGEMENTS OR DETAILS INDICATED OR SPECIFIED" IN
THE IFB, THE CONTRACTOR, UPON THE SYSTEM'S ACCEPTANCE BY WESTCHESTER
COUNTY, WOULD BE RESPONSIBLE FOR PREPARING DETAILED DRAWINGS SHOWING ALL
THE NECESSARY MODIFICATIONS AND FOR PAYMENT OF ANY INCREASED COSTS TO
THE OTHER PRIME CONTRACTORS RESULTING FROM THE MODIFICATIONS. IT WAS
FURTHER PROVIDED THAT WITHIN 5 DAYS AFTER RECEIPT OF BIDS, "EACH BIDDER
SHALL SUBMIT MATERIAL FOR PREQUALIFICATION OF SUPPLIERS FOR ALL PARTS OF
THE *** MODIFIED ITEMS ***."
EIGHTEEN BIDS WERE RECEIVED BY THE DATE SET FOR BID OPENING, MARCH 3,
1976. THE BID SUBMITTED BY BRADY, AS WELL AS THE BIDS OF THE OTHER 17
POTENTIAL PRIME CONTRACTORS FOR THE GENERAL CONSTRUCTION CONTRACT,
PROPOSED FOR LINE ITEM 2 A PSA SYSTEM TO BE SUPPLIED BY UC AND,
ALTERNATIVELY, A SYSTEM TO BE SUPPLIED BY AIR PRODUCTS AND CHEMICALS,
INC. (APC). BRADY'S TOTAL BID OF $16,779,525 WITH THE UC EQUIPMENT AND
ITS ALTERNATE BID OF $16,421,525 UTILIZING THE APC EQUIPMENT WERE BOTH
LOWER THAN THE BIDS SUBMITTED BY THE OTHER COMPETING FIRMS. UPON
EXAMINATION OF THE BIDS AND THE MATERIAL SUBMITTED SUBSEQUENT TO BID
OPENING, WESTCHESTER COUNTY DETERMINED THAT THE APC SYSTEM WAS
ACCEPTABLE AND ON APRIL 15, 1976, AWARDED THE CONTRACT IN QUESTION TO
BRADY, BASED ON BRADY'S BID TO FURNISH AND INSTALL THE APC OXYGENATION
SYSTEM.
FOLLOWING NOTIFICATION OF THE AWARD TO BRADY, UC FILED A PROTEST
(APRIL 21, 1976) WITH WESTCHESTER COUNTY, WHICH WAS SUBSEQUENTLY DENIED
BY A WRITTEN DETERMINATION DATED MAY 5, 1976. UC THEREAFTER FILED A
PROTEST WITH THE EPA REGIONAL ADMINISTRATOR, REGION II. ON SEPTEMBER 7,
1976, THE REGIONAL ADMINISTRATOR ISSUED A WRITTEN DETERMINATION DENYING
UC'S PROTEST. ON OCTOBER 1, 1976, EPA DENIED UC'S REQUEST FOR
RECONSIDERATION OF THAT DECISION. UC, ON OCTOBER 12, 1976, THEN FILED A
COMPLAINT WITH THIS OFFICE AND ON OCTOBER 22, 1976, FILED SUIT IN THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA (UNION CARBIDE
CORPORATION V. RUSSELL E. TRAIN, ET AL., CIVIL ACTION NO. 76-1973),
SEEKING IN PART TO ENJOIN EPA FROM PERMITTING, DIRECTING, OR APPROVING
THE EXPENDITURE OF FEDERAL GRANT FUNDS FOR THAT PART OF CONTRACT 1912G
RELATING TO THE "OXYGEN EQUIPMENT SYSTEM" PENDING OUR DECISION IN THIS
MATTER. ON NOVEMBER 22, 1976, THE UNITED STATES DISTRICT COURT
DISMISSED UC'S ACTION FOR FAILURE TO JOIN WESTCHESTER COUNTY AND BRADY
AS PARTIES. ON NOVEMBER 26, 1976, UC FILED A COMPARABLE ACTION IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
(UNION CARBIDE CORPORATION V. RUSSELL E. TRAIN, ET AL., CIVIL ACTION NO.
76-5272). ON FEBRUARY 8, 1977, THE COURT ISSUED AN ORDER DENYING UC'S
MOTION FOR A PRELIMINARY INJUNCTION BUT DEFERRED ACTION ON DEFENDANTS'
CROSS-MOTIONS FOR SUMMARY JUDGMENT UNTIL THIS OFFICE COULD RULE ON
WHETHER THE AWARD OF THE CONTRACT COMPLIED WITH APPLICABLE REGULATIONS.
IT IS THE PRACTICE OF THIS OFFICE NOT TO RENDER A DECISION ON A
MATTER WHERE THE ISSUES INVOLVED ARE LIKELY TO BE DISPOSED OF IN
LITIGATION BEFORE A COURT OF COMPETENT JURISDICTION. SEE, E.G., NARTRON
CORPORATION, 53 COMP. GEN. 730 (1974), 74-1 CPD 154. HOWEVER, WE WILL
CONSIDER MATTERS WHERE THE COURT DESIRES AND EXPECTS OUR DECISION.
LAMETTI & SONS, INC., 55 COMP. GEN. 413 (1975), 75-2 CPD 265.
THEREFORE, IN VIEW OF THE COURT'S ORDER, WE CONSIDER IT APPROPRIATE TO
CONSIDER THE MERITS OF UC'S COMPLAINT.
UC ASSERTS THAT THE AWARD WAS CONTRARY TO THE TERMS OF THE IFB AND
VIOLATED APPLICABLE EPA REGULATIONS BECAUSE THE APC OXYGEN SUPPLY SYSTEM
IS NOT EQUIVALENT TO THE SYSTEM DESCRIBED IN DETAIL BY SECTION 350 OF
THE SPECIFICATIONS AND BECAUSE BRADY WAS PERMITTED TO ESTABLISH THE
ACCEPTABILITY OF THE APC SYSTEM AFTER BID OPENING. EPA AND WESTCHESTER
COUNTY DO NOT TAKE ISSUE WITH UC'S POSITION THAT APC'S CRYOGENIC SYSTEM
IS NOT EQUIVALENT TO THE COMPLAINANT'S PSA OXYGEN GENERATOR. THEY
ASSERT, HOWEVER, THAT THE IFB, PARTICULARLY IN VIEW OF ARTICLE 8,
PERMITTED ACCEPTANCE OF BIDS BASED ON SYSTEMS OTHER THAN THAT DESCRIBED
BY SECTION 350 AND THAT THE BID ACCEPTED WAS FULLY RESPONSIVE. IN THIS
CONNECTION, IT IS STATED THAT THE SPECIFICATIONS WERE DEVELOPED AROUND
UC'S PSA GENERATOR SYSTEM BECAUSE THAT WAS THE ONLY ACCEPTABLE SYSTEM
KNOWN TO THE COUNTY AT THE TIME BUT THAT, IN AN EFFORT TO AVOID A SOLE
SOURCE SITUATION, THE COUNTY INTENTIONALLY DID NOT IDENTIFY UC AS THE
EQUIPMENT SUPPLIER AND INCLUDED ARTICLE 8 IN THE IFB SO AS TO PERMIT
COMPETITION ON THE BASIS OF ANY OTHER SYSTEM WHICH, ALTHOUGH UNKNOWN TO
THE COUNTY, WOULD BE ACCEPTABLE. UC, ON THE OTHER HAND, ARGUES THAT
ARTICLE 8 DOES NOT PERMIT BIDDERS TO PROPOSE AN OXYGEN EQUIPMENT SYSTEM
NOT INCORPORATING A PSA GENERATOR OR EQUIVALENT, BUT ONLY ALLOWS BIDDERS
TO PROPOSE AN ALTERNATE SUPPLIER FOR THE SYSTEM, WHICH STILL HAS TO MEET
THE SPECIFIED REQUIREMENTS FOR THE PSA GENERATOR.
AT THE OUTSET, WE POINT OUT THAT THIS CASE DOES NOT CONCERN A FEDERAL
PROCUREMENT AND THE FEDERAL GOVERNMENT IS NOT A PARTY TO THE AWARDED
CONTRACT. IN SUCH A CASE, WE ARE CALLED UPON TO DETERMINE THE LEGALITY
OF THE CONTRACT AWARD. RATHER, OUR RULE IS TO DETERMINE WHETHER THERE
HAS BEEN COMPLIANCE WITH APPLICABLE STATUTORY REQUIREMENTS, AGENCY
REGULATIONS, AND GRANT TERMS, AND TO ADVISE THE FEDERAL GRANTOR AGENCY,
WHICH HAS THE RESPONSIBILITY FOR ADMINISTERING THE GRANT, ACCORDINGLY.
O. C. HOLMES CORPORATION, 55 COMP. GEN. 262 (1975), 75-2 CPD 1974;
THOMAS CONSTRUCTION COMPANY, INC., 55 COMP. GEN. 139 (1975), 75-2 CPD
101; 52 COMP. GEN. 874 (1973).
IN SO DOING, WE DO NOT STRICTLY AND MECHANISTICALLY APPLY THE RULES
GOVERNING FEDERAL PROCUREMENTS, MERELY BECAUSE THERE IS A FEDERAL GRANT
REQUIREMENT THAT CONTRACTS BE AWARDED ON THE BASIS OF COMPETITIVE
BIDDING. FOR EXAMPLE, IN ILLINOIS EQUAL EMPLOYMENT OPPORTUNITY
REGULATIONS FOR PUBLIC CONTRACTS, 54 COMP. GEN. 6 (1974), 74-2 CPD 1, WE
STATED THE FOLLOWING:
"WE BELIEVE THAT, WHERE OPEN AND COMPETITIVE BIDDING OR SOME SIMILAR
REQUIREMENT IS REQUIRED AS A CONDITION TO RECEIPT OF A FEDERAL GRANT,
CERTAIN BASIC PRINCIPLES OF FEDERAL PROCUREMENT LAW MUST BE FOLLOWED BY
THE GRANTEE IN SOLICITATIONS WHICH IT ISSUES PURSUANT TO THE GRANT. 37
COMP. GEN. 251 (1957); 48 COMP. GEN. *** (326 (1968)). IN THIS
REGARD, IT IS TO BE NOTED THAT THE RULES AND REGULATIONS OF THE VAST
MAJORITY OF FEDERAL DEPARTMENTS AND AGENCIES SPECIFY GENERALLY THAT
GRANTEES SHALL AWARD CONTRACTS USING GRANT FUNDS ON THE BASIS OF OPEN
AND COMPETITIVE BIDDING. THIS IS NOT TO SAY THAT ALL OF THE INTRICACIES
AND CONDITIONS OF FEDERAL PROCUREMENT LAW ARE INCORPORATED INTO A GRANT
BY VIRTUE OF THIS CONDITION OF OPEN AND COMPETITIVE BIDDING. SEE
B-168434, APRIL 1, 1970; B-168215, SEPTEMBER 15, 1970; B-173126,
OCTOBER 21, 1971; B-178582, JULY 27, 1973. HOWEVER, WE DO BELIEVE THAT
THE GRANTEE MUST COMPLY WITH THOSE PRINCIPLES OF PROCUREMENT LAW WHICH
GO TO THE ESSENCE OF THE COMPETITIVE BIDDING SYSTEM. SEE 37 COMP. GEN.
SUPRA. ***"
IN COPELAND SYSTEMS, INC., 55 COMP. GEN. 390 (1975), 75-2 CPD 237, WE
FURTHER EXPLAINED:
"OBVIOUSLY, IT IS DIFFICULT TO DETAIL ALL THAT IS 'FUNDAMENTAL' TO
THE FEDERAL SYSTEM OF COMPETITIVE BIDDING. HOWEVER, BASIC FEDERAL
PRINCIPLES OF COMPETITIVE BIDDING ARE INTENDED TO PRODUCE RATIONAL
DECISIONS AND FAIR TREATMENT. TO THE EXTENT, THEREFORE, THAT A
GRANTEE'S PROCUREMENT DECISION (AND THE CONCURRENCE IN THAT DECISION BY
THE GRANTOR AGENCY) IS NOT RATIONALLY FOUNDED, IT MAY BE CONSIDERED AS
CONFLICTING WITH A FUNDAMENTAL FEDERAL NORM. THE DECISION WILL, IN ALL
LIKELIHOOD, ALSO BE CONSIDERED INCONSISTENT WITH FUNDAMENTAL CONCEPTS
INHERENT IN ANY SYSTEM OF COMPETITIVE BIDDING."
THUS, IN THE ABSENCE OF A REQUIREMENT THAT THE PRECISE FEDERAL RULES
BE FOLLOWED, THE GRANTEE'S EFFECTING A PROCUREMENT THROUGH THE USE OF
LOCAL PROCEDURES WHICH ARE "NOT ENTIRELY CONSISTENT WITH FEDERAL
COMPETITIVE BIDDING PRINCIPLES" WILL NOT BE REGARDED AS CONTRARY TO
COMPETITIVE BIDDING REQUIREMENTS OF A FEDERAL GRANT, SEE GENERAL
ELECTRIC COMPANY, 54 COMP. GEN. 791 (1975), 75-1 CPD 176, UNLESS IT CAN
BE SAID THAT THERE HAS BEEN A VIOLATION OF SOME BASIC, FUNDAMENTAL
PRINCIPLE INHERENT IN THE CONCEPT OF COMPETITIVE BIDDING. THE EPA
REGULATIONS APPLICABLE TO THIS CASE, 40 C.F.R. SEC. 35.938 (1975),
REQUIRING THE GRANTEE TO USE COMPETITIVE BIDDING AND TO AWARD A CONTRACT
TO THE LOW RESPONSIVE RESPONSIBLE BIDDER, MUST BE READ IN THIS LIGHT.
IN FORMALLY ADVERTISED FEDERAL PROCUREMENTS, THE SPECIFICATIONS ARE
REQUIRED TO DESCRIBE ADEQUATELY THE GOVERNMENT'S MINIMUM NEEDS SO THAT
ALL BIDDERS CAN COMPETE ON AN EQUAL BASIS. IN OTHER WORDS, THE USE OF
AN INVITATION WHICH SOLICITS BIDS ON THE BASIS OF SPECIFICATIONS OTHER
THAN THOSE SET FORTH IN THE INVITATION WOULD BE IMPROPER, AND THE
ACCEPTANCE OF A BID WHICH DEVIATED FROM THE STATED SPECIFICATIONS
GENERALLY WOULD NOT BE PERMITTED. 39 COMP. GEN. 570 (1960); 40 ID.
679 (1961); 42 ID. 383 (1963); 43 ID. 209 (1963). MOREOVER, UNDER
FEDERAL PROCEDURES A BIDDER CANNOT MAKE HIS BID ACCEPTABLE BY SUBMITTING
INFORMATION OR DOCUMENTATION AFTER BID OPENING, SINCE TO ALLOW SUCH A
PRACTICE WOULD GIVE THE BIDDER AN UNFAIR OPPORTUNITY TO DECIDE, AFTER
HIS COMPETITORS' PRICES HAVE BEEN EXPOSED, WHETHER IT WOULD BE
ADVANTAGEOUS TO QUALIFY FOR THE AWARD. 38 COMP. GEN. 532 (1959);
VETERANS ADMINISTRATION RE WELCH CONSTRUCTION, INC., B-183173, MARCH 11,
1975, 75-1 CPD 146; SEE P. SHNITZER, GOVERNMENT CONTRACT BIDDING, 239
(1976).
THE BASIS FOR THE STRICT RULES GOVERNING BID RESPONSIVENESS IS
GROUNDED IN THE NEED TO PROTECT THE INTEGRITY OF THE COMPETITIVE BIDDING
SYSTEM BY ASSURING THAT ALL BIDDERS COMPETE ON AN EQUAL FOOTING. SEE 17
COMP. GEN. 554 (1938); P. SHNITZER, SUPRA, AT 237. IN MOST CASES, OF
COURSE, THE INTEGRITY OF THE SYSTEM CAN BE PRESERVED ONLY BY STRICT
APPLICATION OF THE RESPONSIVENESS RULES. HOWEVER, IN CASES WHERE IT
APPEARED THAT ACCEPTANCE OF A DEVIATING BID WOULD RESULT IN A CONTRACT
WHICH WOULD SATISFY THE GOVERNMENT'S ACTUAL NEEDS AND WOULD NOT
PREJUDICE ANY OTHER BIDDER, WE PERMITTED ACCEPTANCE OF THE BID
NOTWITHSTANDING THAT THE BID WAS TECHNICALLY NONRESPONSIVE, GAF
CORPORATION ET AL., 53 COMP. GEN. 586 (1974, 74-1 CPD 68; THOMAS
CONSTRUCTION COMPANY, INC., B-184810, OCTOBER 21, 1975, 75-2 CPD 248;
38 COMP. GEN. 532 (1957); SEE ALSO KECO INDUSTRIES, INC., 54 COMP. GEN.
967 (1975), 75-1 CPD 301, SINCE THE INTEGRITY OF THE COMPETITIVE SYSTEM
WAS NOT ADVERSELY AFFECTED THEREBY.
HERE, IT IS CLEAR THAT THE BID ACCEPTED BY THE COUNTY RESULTED IN A
CONTRACT WHICH THE COUNTY AND EPA BELIEVE WILL SATISFY THE COUNTY'S
REQUIREMENTS. IT IS ALSO CLEAR THAT NO OTHER BIDDER WAS PREJUDICED BY
ACCEPTANCE OF THAT BID. ALL 18 BIDDERS BASED THEIR BIDS ON SUPPLYING,
ALTERNATIVELY, EITHER UC'S SYSTEM OR APC'S SYSTEM. THUS, IT APPEARS
THAT ALL 18 BIDDERS INTERPRETED THAT PROVISION AS THE GRANTEE INTENDED,
SO THAT IT CANNOT BE SAID THAT ANY BIDDER WAS MISLED. FURTHERMORE,
BRADY BID LOW ON BOTH ALTERNATIVES, AND SO WOULD BE IN LINE FOR AWARD IN
ANY EVENT. EVEN UC CONCEDES THAT, WITH RESPECT TO THE 18 BIDDERS, THEY
COMPETED EQUALLY AMONG EACH OTHER.
NOTWITHSTANDING THIS, HOWEVER, UC ASSERTS THAT THE AWARD CONTRAVENED
GRANT REQUIREMENTS BECAUSE IT AND OTHER POTENTIAL SUPPLIERS TO THE
SUCCESSFUL BIDDER WERE MISLED BY THE SPECIFIC IFB REQUIREMENT FOR A
SYSTEM INCORPORATING A PSA GENERATOR. UC STATES THAT THE REQUIREMENT
KEPT OTHER SUPPLIERS FROM COMPETING AND KEPT IT FROM EITHER OFFERING A
LESS EXPENSIVE SYSTEM OR OFFERING ITS PSA SYSTEM AT A LOWER PRICE.
THUS, CONCLUDES UC, THERE WAS NOT "FREE AND OPEN COMPETITION" AS
"ENCOURAGED" BY 40 C.F.R. SEC. 35.938-2.
WE HAVE HELD THAT WHERE A SOLICITATION RESTRICTS COMPETITION TO ONE
OFFEROR, A CONTRACTING AGENCY MAY ACCEPT A PROPOSAL FROM ANOTHER OFFEROR
PROVIDED THAT THE FORMER IS PUT ON NOTICE, PRIOR TO THE SUBMISSION OF
FINAL OFFERS, THAT THE PROCUREMENT HAS BEEN TRANSFORMED FROM A
NONCOMPETITIVE TO A COMPETITIVE ONE, SO THAT THE APPARENT SOLE SOURCE
OFFEROR WILL HAVE AN OPPORTUNITY TO COMPETE ON AN EQUAL BASIS BY
AMENDING ITS OFFER TO REFLECT WHATEVER CHANGES IT MIGHT DEEM APPROPRIATE
IN LIGHT OF THE NOW-COMPETITIVE NATURE OF THE PROCUREMENT. 48 COMP.
GEN. 605 (1969); 47 ID. 778 (1968); INSTRUMENTATION MARKETING
CORPORATION, B-182347, JANUARY 28, 1975, 75-1 CPD 60; B-176861, JANUARY
24, 1973. UC, HOWEVER, WAS NOT A DIRECT COMPETITOR (BIDDER) ON THIS
PROCUREMENT; THERE WAS NO PRIVITY OR DIRECT RELATIONSHIP RECOGNIZED IN
LAW BETWEEN UC AND THE CONTRACTING AUTHORITY. UC'S ONLY RELATIONSHIPS
IN THIS CASE WERE WITH BRADY AND THE OTHER BIDDERS TO WHICH UC SOUGHT TO
PROVIDE AN OXYGEN EQUIPMENT SYSTEM AND IT IS THROUGH THOSE RELATIONSHIPS
ONLY THAT UC CAN ASSERT ITS CLAIM THAT IT SHOULD HAVE BEEN PUT ON NOTICE
THAT ITS SYSTEM MIGHT NOT HAVE BEEN THE ONLY ONE ACCEPTABLE TO THE
COUNTY. THE FACT THAT BRADY AND THE OTHER BIDDERS MAY NOT HAVE SO
INFORMED UC DOES NOT MEAN THAT THE COMPETITIVE BIDDING REQUIREMENTS OF
THE GRANT WERE NOT MET.
IN OTHER WORDS, ASSUMING THAT UC AND OTHER POTENTIAL SUPPLIERS WERE
MISLED AS ALLEGED BY UC, WE COULD NOT AGREE THAT THIS WOULD HAVE
DESTROYED THE COMPETITIVE NATURE OF THE PROCUREMENT. THE EPA GRANT
REGULATIONS REQUIRE A GRANTEE TO AWARD ITS FEDERALLY ASSISTED CONTRACTS
AFTER PROVIDING AN OPPORTUNITY FOR MAXIMUM COMPETITION AND FREE AND OPEN
COMPETITION AMONG THOSE BIDDERS PARTICIPATING IN THE PROCUREMENT. WE
CANNOT CONCLUDE THAT THERE WAS ANYTHING LESS THAN MAXIMUM COMPETITION
SINCE THERE IS NO EVIDENCE OF RECORD, NOR DOES UC ALLEGE, THAT ANY
POTENTIAL CONTRACTOR FOR CONTRACT 1912G WAS PRECLUDED FROM COMPETING.
FURTHERMORE, AS INDICATED ABOVE, THERE WAS FAIR AND EQUAL COMPETITION
AMONG THE 18 PARTICIPATING BIDDERS. FEDERAL COMPETITIVE BIDDING
PRINCIPLES REQUIRE NO MORE.
MOREOVER, EVEN IF WE VIEWED THOSE PRINCIPLES AS AFFORDING PROTECTION
TO WOULD-BE SUPPLIERS OF PRIME CONTRACTORS, UC'S POSITION COULD NOT BE
SUSTAINED IN THIS CASE. THE RECORD HERE IN NO WAY ESTABLISHES THAT ANY
OTHER POTENTIAL SUPPLIER OF OXYGEN EQUIPMENT SYSTEMS WAS INTERESTED IN
THIS PROCUREMENT OR FELT PRECLUDED FROM SUBMITTING A PROPOSAL TO ANY OF
THE BIDDERS. NEITHER IS THERE ANY CONVINCING EVIDENCE OF RECORD THAT UC
COULD OR WOULD HAVE OFFERED ITS OWN ALTERNATIVE SYSTEM OR THAT IT WOULD
HAVE BEEN ACCEPTABLE TO THE GRANTEE. WHILE UC MAY HAVE OFFERED A LOWER
PRICE FOR ITS PSA GENERATOR SYSTEM HAD IT APPRECIATED THE PROSPECTS OF
COMPETITION FOR THE OXYGEN SUPPLY SYSTEM, THAT POSSIBILITY WE THINK IS
TOO SPECULATIVE TO PROVIDE A BASIS FOR CONCLUDING THAT THE REQUISITE
COMPETITION WAS NOT ATTAINED IN THIS CASE.
IN SHORT, WHAT THE RECORD DOES SHOW IS THAT (1) THE GRANTEE SOUGHT TO
AVOID A SOLE SOURCE SITUATION AND TO PROMOTE COMPETITION BY PERMITTING
BIDS ON SYSTEMS OTHER THAN THE ONE WITH WHICH IT WAS FAMILIAR; (2) THE
IFB PROVISIONS IT UTILIZED IN SO DOING, WERE INTENDED TO PERMIT BIDS ON
ALTERNATE SYSTEMS BUT ALSO COULD BE READ AS PERMITTING ALTERNATIVE BIDS
BASED ON FURNISHING A SYSTEM MEETING THE SPECIFICATION FEATURES BUT
SUPPLIED BY A FIRM OTHER THAN UC, AND (3) ALL OF THE BIDDERS UNDERSTOOD
WHAT WAS INTENDED AND SUBMITTED ALTERNATIVE BIDS EACH BASED ON THE SAME
ALTERNATIVE SYSTEM. THUS, WHAT WE HAVE HERE IS A CASE WHERE ALL BIDDERS
UNDERSTOOD THE SPECIFICATIONS AND RESPONDED TO THEM IN THE SAME WAY, SO
THAT IT CANNOT BE SAID THAT ANY OF THE BIDDERS WAS PREJUDICED.
(PARENTHETICALLY, WE POINT OUT THAT IF PREJUDICE TO ANY BIDDER HAD
RESULTED FROM THE SITUATION INVOLVED HERE, THE ONLY APPROPRIATE REMEDY
WOULD HAVE BEEN READVERTISEMENT. AWARD TO BRADY ON THE BASIS OF ITS
FURNISHING UC'S SYSTEM WOULD NOT BE APPROPRIATE REMEDIAL ACTION SINCE IT
IS CLEAR THAT THE SPECIFICATIONS, AS INTERPRETED BY UC, OVERSTATE THE
ACTUAL NEEDS OF THE COUNTY AND WOULD NOT PROVIDE A PROPER BASIS FOR
AWARD.)
FINALLY, WITH REGARD TO THE QUALIFICATION AFTER BID OPENING ASPECTS
OF ARTICLE 8, WE THINK THAT ANY PROVISION WHICH ALLOWS BIDDERS "TWO
BITES AT THE APPLE," THAT IS, CONTROL AFTER BID OPENING OVER THE
DECISION WHETHER THEIR BIDS WILL BE RESPONSIVE, IS INCONSISTENT WITH THE
FEDERAL COMPETITIVE BIDDING PRINCIPLES AND SHOULD NOT BE USED. HOWEVER,
WE CONCUR WITH THE EPA REGIONAL ADMINISTRATION THAT THE USE OF THE
PROVISIONS IN THIS CASE DID NOT FATALLY TAINT THE PROCUREMENT. AS
POINTED OUT BY THE ADMINISTRATION, THE UNACCEPTABLE FEATURE OF ARTICLE 8
WAS NOT A SERIOUS CONCERN HERE BECAUSE THE PROCUREMENT WAS FOR "GENERAL
CONSTRUCTION SERVICES WITH THE DISPUTED SUB-BID ITEM BEING ONLY A
PORTION OF THE TOTAL BID," AND THE BIDDERS, OBVIOUSLY INTERESTED IN THE
TOTAL JOB, SUBMITTED BIDS ON TWO BASES, INCLUDING ONE WITH WHICH THE
COUNTY WAS FAMILIAR. WHILE BIDDERS MAY HAVE BEEN ABLE TO GET "TWO BITES
AT THE APPLE" WITH RESPECT TO THEIR ALTERNATIVE BIDS, WE THINK BIDDERS
WERE BOUND BY THEIR BASIC BIDS. IN THIS REGARD, WE READ ARTICLE 8 AS
REQUIRING THAT THE SYSTEM TO BE FURNISHED IN ACCORDANCE WITH THE BID
ENTERED IN THE "SPACES MARKED (A), OR (A1) AND (A2)" BE A SYSTEM MEETING
THE SPECIFICATIONS SET FORTH IN SECTION 350. THEREFORE, EVEN THOUGH
BIDDERS WERE REQUIRED TO SUBMIT DATA ON THAT SYSTEM AS WELL AS ON ANY
ALTERNATIVE SYSTEM OFFERED, THE COUNTY COULD HAVE ACCEPTED A BID WITHOUT
THE SUBMISSION OF SUCH DATA AND THE BIDDER WOULD HAVE BEEN OBLIGATED TO
FURNISH AN OXYGEN SUPPLY SYSTEM MEETING THE DESIGN AND PERFORMANCE
REQUIREMENTS OF SECTION 350. THUS, IN THIS CASE BRADY WAS BOUND BY THE
BASIC PORTION OF ITS BID AND, SINCE IT WAS LOW BIDDER ON BOTH THE BASIC
AND ALTERNATE SYSTEMS, IT DID NOT, IN OUR VIEW, HAVE THE OPTION TO
DECIDE AFTER BID OPENING WHETHER TO REMAIN IN THE COMPETITION.
FOR THE FOREGOING REASONS, WE FIND THE AWARD TO BRADY DOES NOT
CONTRAVENE THE COMPETITIVE BIDDING REQUIREMENTS OF THE EPA GRANT
AGREEMENT AND REGULATIONS APPLICABLE THERETO.
B-164031(4).106, MAR 11, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
1. SOCIAL SECURITY ADMINISTRATION (SSA) VIOLATED IN THE SOUTHEASTERN
PROGRAM SERVICE CENTER THE CARPETING STANDARDS ESTABLISHED UNDER
ARCHITECTURAL BARRIERS ACT OF 1968 AND UNDER DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE (HEW) REGULATIONS. PRIOR TO THIS VIOLATION, ITS
EMPLOYEE HAD SUPPLIED HIS OWN NONMOTORIZED WHEELCHAIR AND WAS CAPABLE OF
PERFORMING HIS ASSIGNED DUTIES. IN ORDER TO MAKE THE BEST USE OF
AVAILABLE PERSONNEL AND IN VIEW OF THE FACT THAT A POWERED VEHICLE
BECAME NECESSARY ONLY BECAUSE OF THE VIOLATION OF THE ACT'S STANDARDS,
WE WILL NOT OBJECT TO THE SSA'S REIMBURSING ITS EMPLOYEE FOR THE COST OF
ACQUIRING THE MOTORIZED WHEELCHAIR. THE WHEELCHAIR WILL THEN BECOME THE
GOVERNMENT'S PROPERTY FOR USE SOLELY IN THE SUBJECT BUILDING.
2. PRIMARY JURISDICTION FOR ASSURING COMPLIANCE WITH STANDARDS
ESTABLISHED UNDER THE ARCHITECTURAL BARRIERS ACT OF 1968, 42 U.S.C. SEC.
4151 (1970), IS PLACED BY STATUTE WITH THE GENERAL SERVICES
ADMINISTRATION (GSA), 42 U.S.C. SEC. 4156, AND WITH THE ARCHITECTURAL
AND TRANSPORTATION COMPLIANCE BOARD, 29 U.S.C. SEC. 792 (SUPP. IV,
1974). SOCIAL SECURITY ADMINISTRATION SHOULD DETERMINE FROM THOSE
ENTITIES THE PROPER MEANS OF RECTIFYING NONCOMPLIANCE WITH STANDARDS ON
CARPETING, WHICH NON-COMPLIANCE HAS RESULTED IN HANDICAPPED PERSONS
REQUIRING THE USE OF POWERED WHEELCHAIRS. SECTION 236 OF THE
LEGISLATIVE REORGANIZATION ACT, 31 U.S.C. SEC. 1176 (1970) IS APPLICABLE
TO THIS RECOMMENDATION FOR CORRECTIVE ACTION.
3. SHOULD GSA, PURSUANT TO 42 U.S.C. SEC. 4156 (1970), AND/OR THE
ARCHITECTURAL AND TRANSPORTATION COMPLIANCE BOARD, PURSUANT TO 29 U.S.C.
SEC. 792 (SUPP. IV, 1974), ORDER THE SSA TO PURCHASE AND HAVE AVAILABLE
MOTORIZED WHEELCHAIRS FOR OTHER HANDICAPPED EMPLOYEES AND MEMBERS OF
GENERAL PUBLIC TO RECTIFY THE VIOLATION IN THE SOUTHEASTERN PROGRAM
SERVICE CENTER OF THE CARPETING STANDARDS ESTABLISHED PURSUANT TO THE
ARCHITECTURAL BARRIERS ACT OF 1968, IT MAY USE ITS APPROPRIATIONS FOR
THAT PURPOSE. IF OTHER ACTION IS PRESCRIBED, WHEELCHAIR PURCHASES ARE
NOT AUTHORIZED, REGARDLESS OF SAVINGS IN COST.
THIS DECISION IS IN RESPONSE TO A LETTER, WITH ENCLOSURES, DATED
NOVEMBER 10, 1976, FROM MR. FRED SCHUTZMAN, DIRECTOR, OFFICE OF
FINANCIAL MANAGEMENT, SOCIAL SECURITY ADMINISTRATION (SSA) OF THE
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW), (HIS REFERENCE
IAD-43), REQUESTING A DECISION AS TO WHETHER SSA IS AUTHORIZED TO USE
ITS APPROPRIATIONS TO REIMBURSE A HANDICAPPED EMPLOYEE FOR A MOTORIZED
WHEELCHAIR.
IN HIS LETTER, THE DIRECTOR INDICATES THAT THE EMPLOYEE IN QUESTION
IS EMPLOYED WITH THE SOUTHEASTERN PROGRAM SERVICE CENTER. HE PERFORMED
HIS DUTIES WITH THE AID OF A HAND OPERATED WHEELCHAIR UNTIL THE
SOUTHEASTERN PROGRAM CENTER MOVED TO A NEW BUILDING. THE FLOORS IN THAT
BUILDING ARE ENTIRELY COVERED WITH CARPETING INSTALLED OVER A HIGH
DENSITY FOAM PADDING WHICH MAKES THE HAND OPERATED WHEELCHAIR VERY
DIFFICULT TO PUSH. IN ORDER TO CARRY OUT HIS DUTIES, THE EMPLOYEE FOUND
IT NECESSARY TO PURCHASE A MOTORIZED WHEELCHAIR AT HIS OWN EXPENSE.
THE DIRECTOR REPORTS THAT IT WOULD COST $68,250 TO REMOVE AND REPLACE
THE CARPETING ON THE EMPLOYEE'S FLOOR AND $624,000 TO REMOVE AND REPLACE
THE CARPETING THROUGHOUT THE ENTIRE BUILDING. BECAUSE THE WHEELCHAIR
COSTS APPROXIMATELY $1,167, AN AMOUNT FAR LESS THAN THE COST OF REMOVING
AND REPLACING THE CARPETING, THE DIRECTOR HAS ASKED IF IT WOULD BE
PERMISSIBLE FOR THE SSA TO REIMBURSE ITS EMPLOYEE FOR THE COST OF THE
WHEELCHAIR. THE WHEELCHAIR WOULD THEN BECOME THE PROPERTY OF THE
GOVERNMENT AND THE EMPLOYEE WOULD NOT BE PERMITTED TO TAKE IT HOME. IN
ADDITION, IF WE DECIDE SUCH REIMBURSEMENT IS ALLOWABLE, HE HAS REQUESTED
OUR OPINION CONCERNING WHETHER THE SSA MAY PURCHASE OTHER WHEELCHAIRS
SHOULD THEY HIRE MORE HANDICAPPED EMPLOYEES TO WORK IN THE SUBJECT
BUILDING.
ON AUGUST 12, 1968, THERE WAS ENACTED THE ARCHITECTURAL BARRIERS ACT
OF 1968, PUB. L. NO. 90-480, AS AMENDED, 82 STAT. 718, 42 U.S.C. SECS.
4151 ET SEQ. (1970), REGARDING THE DESIGN AND CONSTRUCTION OF PUBLIC
BUILDINGS TO ACCOMMODATE THE PHYSICALLY HANDICAPPED. SECTION 2 THEREOF,
42 U.S.C. SEC. 4152, PROVIDES:
"THE ADMINISTRATOR OF GENERAL SERVICES, IN CONSULTATION WITH THE
SECRETARY OF HEALTH, EDUCATION, AND WELFARE, IS AUTHORIZED TO PRESCRIBE
SUCH STANDARDS FOR THE DESIGN, CONSTRUCTION, AND ALTERATION OF BUILDINGS
(OTHER THAN RESIDENTIAL STRUCTURES SUBJECT TO THIS CHAPTER AND
BUILDINGS, STRUCTURES, AND FACILITIES OF THE DEPARTMENT OF DEFENSE
SUBJECT TO THIS CHAPTER) AS MAY BE NECESSARY TO INSURE THAT PHYSICALLY
HANDICAPPED PERSONS WILL HAVE READY ACCESS TO, AND USE OF, SUCH
BUILDINGS."
PURSUANT TO THAT SECTION THE GENERAL SERVICES ADMINISTRATION (GSA)
HAS DIRECTED THAT EVERY GOVERNMENT BUILDING BE DESIGNED, CONSTRUCTED, OR
ALTERED IN ACCORDANCE WITH THE MINIMUM STANDARDS IN THE "AMERICAN
STANDARD SPECIFICATIONS FOR MAKING BUILDINGS AND FACILITIES ACCESSABLE
TO, AND USABLE BY, THE PHYSICALLY HANDICAPPED," NUMBER A 117-R 1971,
FPMR 101-19.603, 41 C.F.R. SEC. 101-19.6 (1976). THE SUBJECT CARPETING
DID NOT MEET THE STANDARDS SET FORTH THEREIN. GSA IS ALSO AUTHORIZED TO
CONDUCT SUCH SURVEYS AND INVESTIGATIONS AS IT DEEMS NECESSARY TO ASSURE
COMPLIANCE WITH THOSE STANDARDS, 42 U.S.C. SEC. 4156. IN ADDITION, THE
ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD, ESTABLISHED
BY SECTION 502 OF PUB. L. NO. 93-112, SEPTEMBER 26, 1973, 87 STAT. 391,
AS AMENDED, 29 U.S.C. SEC. 792 (SUPP. IV, 1974) IS RESPONSIBLE FOR
INSURING COMPLIANCE WITH THE STANDARDS ESTABLISHED BY GSA UNDER THE
ARCHITECTURAL BARRIERS ACT OF 1968. THE BOARD MAY ISSUE ORDERS OF
COMPLIANCE TO FEDERAL DEPARTMENTS, AGENCIES OR INSTRUMENTALITIES WHICH
ARE FINAL AND BINDING AND WHICH MAY WITHHOLD OR SUSPEND FEDERAL FUNDS
WITH RESPECT TO ANY BUILDING FOUND NOT TO BE IN COMPLIANCE WITH THOSE
STANDARDS, 29 U.S.C. SEC. 792(D).
INSTALLATION OF THE SUBJECT CARPET ALSO VIOLATED THE PROVISIONS OF
SECTION 4.12, CH. 3.3.5.2 OF THE DEPARTMENT OF HEALTH, EDUCATION, AND
WELFARE'S TECHNICAL HANDBOOK FOR FACILITIES ENGINEERING AND CONSTRUCTION
MANUAL WHICH PROVIDES:
"CARPETING IN PUBLIC OR GENERAL AREAS SHOULD BE HEAVY DUTY TYPE WITH
A TIGHT WEAVE AND LOW PILE, PREFERABLY INSTALLED WITHOUT PADDING."
CHAPTER 3.3.5.3 OF THAT MANUAL PROVIDES:
"FLOORS OF PRIMARY CIRCULATION PATHS SHOULD HAVE A HARD SURFACE (SUCH
AS VINAL ASBESTOS TILE) WHICH PERMITS EASY MOVEMENT OF WHEELCHAIRS.
TRAVEL DISTANCE OVER CARPETING REQUIRED TO REACH SUCH A PATH SHOULD NOT
EXCEED 50 FEET."
GENERALLY, THE COST OF CLOTHING AND PERSONAL EQUIPMENT TO ENABLE AN
EMPLOYEE TO QUALIFY HIMSELF TO PERFORM HIS OFFICIAL DUTIES CONSTITUTES A
PERSONAL EXPENSE OF THE EMPLOYEE, AND, AS SUCH, IS NOT PAYABLE FROM
APPROPRIATED FUNDS. 23 COMP. GEN. 831 (1944). AS A GUIDE IN
DETERMINING WHETHER ANY PARTICULAR EQUIPMENT IS TO BE CONSIDERED
PERSONAL TO THE EMPLOYEE, WE STATED IN 3 COMP. GEN. 433 (1925) THAT:
"IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR THE PURCHASE OF
PERSONAL EQUIPMENT, PARTICULARLY WEARING APPAREL OR PARTS THEREOF, THE
FIRST QUESTION FOR CONSIDERATION IN CONNECTION WITH A PROPOSED PURCHASE
OF SUCH EQUIPMENT IS WHETHER THE OBJECT FOR WHICH THE APPROPRIATION
INVOLVED WAS MADE CAN BE ACCOMPLISHED AS EXPEDITIOUSLY AND
SATISFACTORILY FROM THE GOVERNMENT'S STANDPOINT, WITHOUT SUCH EQUIPMENT.
IF IT BE DETERMINED THAT USE OF THE EQUIPMENT IS NECESSARY IN THE
ACCOMPLISHMENT OF THE PURPOSES OF THE APPROPRIATION, THE NEXT QUESTION
TO BE CONSIDERED IS WHETHER THE EQUIPMENT IS SUCH AS THE EMPLOYEE
REASONABLY COULD BE REQUIRED TO FURNISH AS PART OF THE PERSONAL
EQUIPMENT NECESSARY TO ENABLE HIM TO PERFORM THE REGULAR DUTIES OF THE
POSITION TO WHICH HE WAS APPOINTED OR FOR WHICH HIS SERVICES WERE
ENGAGED. UNLESS THE ANSWER TO BOTH OF THESE QUESTIONS IS IN THE
NEGATIVE, PUBLIC FUNDS CANNOT BE USED FOR THE PURCHASE. IN DETERMINING
THE FIRST OF THESE QUESTIONS THERE IS FOR CONSIDERATION WHETHER THE
GOVERNMENT OR THE EMPLOYEE RECEIVES THE PRINCIPAL BENEFIT RESULTING FROM
USE OF THE EQUIPMENT AND WHETHER AN EMPLOYEE REASONABLY COULD BE
REQUIRED TO PERFORM THE SERVICE WITHOUT THE EQUIPMENT. IN CONNECTION
WITH THE SECOND QUESTION THE POINTS ORDINARILY INVOLVED ARE WHETHER THE
EQUIPMENT IS TO BE USED BY THE EMPLOYEE IN CONNECTION WITH HIS REGULAR
DUTIES OR ONLY IN EMERGENCIES OR AT INFREQUENT INTERVALS AND WHETHER
SUCH EQUIPMENT IS ASSIGNED TO AN EMPLOYEE FOR INDIVIDUAL USE OR IS
INTENDED FOR AND ACTUALLY TO BE USED BY DIFFERENT EMPLOYEES."
SEE ALSO 42 COMP. GEN. 626 AT 627-628 (1963) AND 45 ID. 215 (1965).
NORMALLY, A PERSON NEEDING A WHEELCHAIR TO PERFORM HIS DUTIES WOULD
BE REQUIRED TO PROVIDE THAT EQUIPMENT HIMSELF. SUCH EQUIPMENT IS OF A
PERSONAL NATURE AND COULD NOT BE READILY USED BY DIFFERENT EMPLOYEES OR
USED ONLY ON AN EMERGENCY BASIS OR AT INFREQUENT INTERVALS TO ACCOMPLISH
A SPECIAL AGENCY PURPOSE.
IN THE INSTANT SITUATION, HOWEVER, THE EMPLOYEE WAS PROVIDING HIS OWN
NONPOWERED WHEELCHAIR AND WAS SATISFACTORILY PERFORMING HIS ASSIGNED
DUTIES. A POWERED WHEELCHAIR BECAME NECESSARY ONLY BECAUSE THE AGENCY,
WHEN IT OCCUPIED NEW QUARTERS, FAILED TO COMPLY WITH THE STANDARDS
ESTABLISHED UNDER THE ARCHITECTURAL BARRIERS ACT OF 1968, SUPRA.
BECAUSE OF THIS AND SINCE THE WHEELCHAIR WILL ENABLE THE AGENCY TO
OBTAIN THE BEST RESULTS FROM ITS AVAILABLE PERSONNEL UNDER EXISTING
CIRCUMSTANCES, 23 COMP. GEN. 821 (1944), WE WILL NOT OBJECT TO SSA'S
REIMBURSING THE EMPLOYEE FOR THE COST OF THE POWERED WHEELCHAIR, WITH
THE UNDERSTANDING THAT THE WHEELCHAIR BECOMES THE PROPERTY OF THE
GOVERNMENT. IN THIS REGARD THE DIRECTOR STATES THAT THE WHEELCHAIR WILL
NOT BE REMOVED FROM THE PROGRAM SERVICE CENTER.
IT SHOULD BE NOTED THAT THE ARCHITECTURAL BARRIERS ACT OF 1968,
SUPRA, WAS NOT INTENDED SOLELY FOR PROTECTION OF HANDICAPPED GOVERNMENT
EMPLOYEES BUT FOR THE BENEFIT OF ANY HANDICAPPED PERSON WHO IS PRESENT
IN A GOVERNMENT BUILDING. ACCORDINGLY, ALTHOUGH THE SUBMISSION ASKED
ONLY WHETHER FUTURE PURCHASES OF WHEELCHAIRS WERE AUTHORIZED FOR NEW
EMPLOYEES WHO REQUIRE THEM, WE HAVE CONSIDERED THE QUESTION AS COVERING
PURCHASES OF WHEELCHAIRS FOR DISABLED MEMBERS OF THE GENERAL PUBLIC AS
WELL.
THE PRIMARY JURISDICTION FOR ASSURING COMPLIANCE WITH THE STANDARDS
ESTABLISHED UNDER THE ARCHITECTURAL BARRIERS ACT OF 1968, SUPRA, RESTS
WITH THE GENERAL SERVICES ADMINISTRATION, 29 U.S.C. SEC. 792 (SUPP. IV,
1974) AND NOT WITH THIS OFFICE. (GSA IS AUTHORIZED BY 42 U.S.C. SEC.
4156, TO EXEMPT BUILDINGS FROM THOSE STANDARDS ON A CASE-BY-CASE BASIS.)
ACCORDINGLY, THE SOCIAL SECURITY ADMINISTRATION SHOULD CONTACT THOSE
ENTITIES TO DETERMINE WHAT MUST BE DONE TO BRING THE SOUTHEASTERN
PROGRAM SERVICE CENTER INTO COMPLIANCE. SHOULD GSA AND THE BOARD
DETERMINE THAT THE PURCHASE OF ADDITIONAL MOTORIZED WHEELCHAIRS BY THE
SSA FOR THE USE OF DISABLED EMPLOYEES IN THE COURSE OF THEIR EMPLOYMENT
AND FOR USE BY DISABLED MEMBERS OF THE GENERAL PUBLIC WHILE VISITING THE
BUILDING WOULD BE THE APPROPRIATE MEANS TO ACHIEVE COMPLIANCE, WE WILL
NOT OBJECT TO THE USE OF APPROPRIATED FUNDS FOR THAT PURPOSE. HOWEVER,
IF THE BOARD ISSUES AN ORDER OF COMPLIANCE REQUIRING A DIFFERENT METHOD
FOR ACCOMMODATING THE BUILDING TO THE NEEDS OF HANDICAPPED INDIVIDUALS,
E.G., BY REMOVING THE CARPETING IN QUESTION IMMEDIATELY, REGARDLESS OF
COST, THEN THAT ORDER MUST BE COMPLIED WITH, 29 U.S.C. SEC. 792(D),
SUPRA, AND APPROPRIATED FUNDS MAY NOT BE USED TO PURCHASE OTHER
MOTORIZED WHEELCHAIRS.
HOWEVER, IN ORDER TO COMPLY WITH THE LETTER AND SPIRIT OF STATUTORY
PROVISIONS SUCH AS SECTION 501 OF PUB. L. NO. 93-122, SEPTEMBER 26,
1973, 87 STAT. 390, 29 U.S.C. SEC. 791(B)(SUPP. IV, 1974), WE WILL NOT
OBJECT TO THE ACQUISITION OF MOTORIZED WHEELCHAIRS AS A TEMPORARY
EXPEDIENT BY THE SOCIAL SECURITY ADMINISTRATION FOR USE OF ANY
HANDICAPPED INDIVIDUALS IT WISHES TO HIRE WHILE THE MATTER OF BRINGING
THE SOUTHEASTERN PROGRAM SERVICE CENTER INTO COMPLIANCE WITH STANDARDS
ESTABLISHED UNDER THE ARCHITECTURAL BARRIERS ACT OF 1968 IS BEING RAISED
WITH GSA AND THE BOARD.
THE RECOMMENDATION FOR CORRECTIVE ACTION DISCUSSED HEREIN IS SUBJECT
TO THE REPORTING REQUIREMENTS OF SECTION 236 OF THE LEGISLATIVE
REORGANIZATION OF 1970, 31 U.S.C. SEC. 1176 (1970).
B-188043, MAR 7, 1977
HEADNOTES-UNAVAILABLE
DIGEST:
WHERE RECORD SHOWS THAT UNDER OPTION PROVISIONS CONTRACT IS RENEWABLE
AT SOLE DISCRETION OF GOVERNMENT, GAO WILL NOT CONSIDER INCUMBENT
CONTRACTOR'S CONTENTION THAT AGENCY SHOULD HAVE EXERCISED CONTRACT
OPTION PROVISION INSTEAD OF ISSUING NEW SOLICITATION.
C. G. ASHE ENTERPRISES:
C. G. ASHE ENTERPRISES (ASHE) PROTESTS THE ARMY'S DECISION NOT TO
EXERCISE THE OPTION UNDER ITS CONTRACT NO. DABT57-75-B-0078, FOR GRASS
CUTTING SERVICES, BEYOND OCTOBER 31, 1976, AT FORT EUSTIS, VIRGINIA.
THE CONTRACT WAS RENEWABLE UNDER THE OPTION PROVISION AT THE SOLE
DISCRETION OF THE GOVERNMENT.
RECENTLY, THIS OFFICE HAS CONSIDERED SIMILAR PROTESTS ON THE MERITS.
A. C. ELECTRONICS, INC., B-185553, MAY 3, 1976, 76-1 CPD 295 (WE
CONCLUDED, CITING ARMED SERVICES PROCUREMENT REGULATION SECS. 1-1505(C),
(D) (1975 ED.) AND B-173141, OCTOBER 14, 1971, THAT A CONTRACTING
OFFICER HAD A REASONABLE BASIS FOR THE DECISION NOT TO EXERCISE THE
OPTION OF THE PROTESTER'S CONTRACT); RAVEN INDUSTRIES, INC., B-185052,
FEBRUARY 11, 1976, 76-1 CPD 90 (WE FOUND NO BASIS FOR LEGAL OBJECTION TO
A CONTRACTING OFFICER'S DETERMINATION TO LIMIT THE EXERCISE OF THE
OPTION CLAUSE TO A SPECIFIC NUMBER OF UNITS); FOX INTERNATIONAL, INC.,
B-181675, MARCH 3, 1975, 75-1 CPD 126 (WE FOUND NO BASIS TO OBJECT TO
THE REFUSAL OF AN AGENCY TO EXERCISE THE PROTESTER'S CONTRACT OPTION).
IN PRIOR CASES, HOWEVER, IF THE RECORD SHOWED THAT A CONTRACT'S OPTION
CLAUSE COULD ONLY BE EXERCISED AT THE SOLE DISCRETION OF THE GOVERNMENT,
THEN A PROTEST WAS DENIED WITHOUT EXAMINING THE CONTRACTING OFFICER'S
RATIONALE. SEE, E.G., THE NATIONAL CASH REGISTER COMPANY, B-179045,
MARCH 5, 1974, 74-1 CPD 116; 36 COMP. GEN. 62 (1956). THERE, WE
BELIEVED IT SUFFICIENT MERELY TO POINT OUT THAT SINCE SUCH OPTIONS WERE
PURELY FOR THE INTEREST AND BENEFIT OF THE GOVERNMENT, ANY DETERMINATION
THAT THE EXERCISE OF SUCH OPTION WOULD BE CONTRARY TO THE GOVERNMENT'S
INTERESTS MANIFESTLY MAY NOT BE SUBJECT TO LEGAL OBJECTION BY THIS
OFFICE. COMPARE INTER-ALLOYS CORPORATION, B-182890, FEBRUARY 4, 1975,
75-1 CPD 79, WHERE PROTESTER'S CONTENTION THAT AGENCY SHOULD HAVE
EXERCISED OPTION IN ANOTHER FIRM'S CONTRACT INSTEAD OF ISSUING NEW
SOLICITATION WAS HELD TO BE MATTER OF CONTRACT ADMINISTRATION AND NOT
FOR CONSIDERATION UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20
(1976).
IN THIS CASE AND IN FUTURE CASES WHERE THE RECORD SHOWS THAT THE
OPTION PROVISIONS OF A CONTRACT ARE EXERCISABLE AT THE SOLE DISCRETION
OF THE GOVERNMENT, THIS OFFICE WILL NOT CONSIDER UNDER OUR BID PROTEST
PROCEDURES THE INCUMBENT CONTRACTOR'S CONTENTION THAT THE AGENCY SHOULD
HAVE EXERCISED CONTRACT OPTION PROVISIONS.
ACCORDINGLY, ASHE'S PROTEST IS DISMISSED.
B-187230, OCT 19, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
MARINE CORPS GENERAL, RETIRED FOR DISABILITY, WHO ACCEPTS FEDERAL
CIVILIAN EMPLOYMENT IS SUBJECT TO REDUCTION IN RETIRED PAY REQUIRED BY
DUAL COMPENSATION ACT, 5 U.S.C. 5532(B) UNLESS THE STATUTORY EXEMPTION
IN 5 U.S.C. SEC. 5532(C) APPLIES. DESPITE COURT OF CLAIMS DECISION TO
CONTRARY IN MROSS V. UNITED STATES, 186 CT. CL. 165 (1968), IT IS THE
VIEW OF THE COMPTROLLER GENERAL THAT WHERE COMBAT-RELATED DISABILITY
OTHERWISE QUALIFYING FOR EXEMPTION WAS RATED AS 0 PERCENT DISABLING, THE
DISABILITY DOES NOT QUALIFY MEMBER FOR EXEMPTION FROM DUAL COMPENSATION
RESTRICTIONS SINCE IT WAS NOT A SIGNIFICANT FACTOR IN OFFICER'S
RETIREMENT FOR PHYSICAL DISABILITY. 50 COMP. GEN. 480 (1971).
GENERAL EARL E. ANDERSON, USMC, RETIRED:
THIS ACTION IS IN RESPONSE TO A LETTER DATED AUGUST 16, 1976, WITH
ENCLOSURES, FROM THE ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT
(AID), REQUESTING OUR DECISION AS TO WHETHER GENERAL EARL E. ANDERSON,
000-00-5751, USMC (RETIRED), IS ENTITLED TO EXEMPTION FROM THE RETIRED
PAY REDUCTION PROVISION OF THE DUAL COMPENSATION ACT, 5 U.S.C. SEC. 5532
(1970), ON THE BASIS OF HAND INJURIES SUFFERED IN COMBAT DURING WORLD
WAR II.
THE SUBMISSION INDICATES THAT GENERAL ANDERSON SUSTAINED BURN
INJURIES, FROM WHICH HE HAS SUFFERED RECURRENT PALMAR SKIN PROBLEMS,
WHILE FIGHTING A MAGAZINE FIRE ABOARD THE U.S.S. YORKTOWN DURING THE
BATTLE OF MIDWAY ON JUNE 4, 1942. HAND ECZEMA, THE RESULT OF THESE
BURNS, WAS ONE OF THE CAUSES FOR WHICH HE WAS RETIRED FOR PHYSICAL
DISABILITY ON JULY 1, 1975. THIS DISABILITY, HOWEVER, IS RATED AS 0
PERCENT DISABLING UNDER THE VETERANS' ADMINISTRATION SCHEDULE FOR RATING
DISABILITIES (VASRD) WHICH IS THE SCHEDULE USED IN DISABILITY RETIREMENT
RATINGS UNDER 10 U.S.C. 1201 (1970). SEE 32 CFR SECS. 725.518(H)(2) AND
(H)(2)(V) (1975). SUBSEQUENT TO HIS RETIREMENT, GENERAL ANDERSON WAS
APPOINTED TO A CIVILIAN POSITION AS AID'S DIRECTOR, OFFICE OF UNITED
STATES FOREIGN DISASTER ASSISTANCE.
SUBSECTION 5532(B), TITLE 5, UNITED STATES CODE, REQUIRES, WITH
CERTAIN EXCEPTIONS, THAT:
"A RETIRED OFFICER OF A REGULAR COMPONENT OF A UNIFORMED SERVICE WHO
HOLDS A POSITION IS ENTITLED TO RECEIVE THE FULL PAY OF THE POSITION,
BUT DURING THE PERIOD FOR WHICH HE RECEIVES PAY, HIS RETIRED OR
RETIREMENT PAY SHALL BE REDUCED TO AN ANNUAL RATE EQUAL TO THE FIRST
$2,000 OF THE RETIRED OR RETIREMENT PAY PLUS ONE-HALF OF THE REMAINDER,
IF ANY. ***"
SUBSECTION 5532(C) EXEMPTS FROM THE REQUIRED REDUCTION IN RETIRED PAY
RETIRED OFFICERS:
"(1) WHOSE RETIREMENT WAS BASED ON DISABILITY -
"(A) RESULTING FROM INJURY OR DISEASE RECEIVED IN LINE OF DUTY AS A
DIRECT RESULT OF ARMED CONFLICT; OR
"(B) CAUSED BY AN INSTRUMENTALITY OF WAR AND INCURRED IN LINE OF DUTY
DURING A PERIOD OF WAR ***"
AGENCY FOR INTERNATIONAL DEVELOPMENT TAKES THE POSITION THAT GENERAL
ANDERSON'S HAND ECZEMA CONSTITUTES A DISABILITY COVERED BY THE STATUTORY
EXCEPTION, ENTITLING HIM TO EXEMPTION FROM REDUCTION IN HIS RETIRED PAY,
NOTWITHSTANDING THE FACT THAT IT IS RATED AS 0 PERCENT DISABLING.
ALTHOUGH WE DO NOT CONTEST THE FACT THAT GENERAL ANDERSON'S INJURY WAS
INCURRED IN A MANNER REQUIRED BY THE EXCEPTION TO THE ACT, WE CANNOT,
FOR THE REASONS DISCUSSED BELOW, AGREE WITH AID'S CHARACTERIZATION OF
THIS DISABILITY AS A DISABILITY SUFFICIENT TO EXEMPT HIM FROM RETIRED
PAY REDUCTIONS WITHIN THE MEANING OF THE ACT.
THE PHYSICAL EVALUATION BOARD WAS REQUIRED TO ENUMERATE EACH
DISABILITY WHICH CONTRIBUTED TO GENERAL ANDERSON'S UNFITNESS FOR
SERVICE, AND TO RECOMMEND FINDINGS FOR EACH CONDITION CAUSING PHYSICAL
DISABILITY WHICH GENERAL ANDERSON PRESENTED. 32 CFR SEC.
725.518(C)(3)(I) (1975). SUCH A DETERMINATION OF UNFITNESS CAN BE BASED
ON THE COMBINED EFFECT OF SEVERAL CONDITIONS DESPITE THE FACT THAT ONE
OF THEM, BY ITSELF, WOULD NOT CAUSE UNFITNESS. ID. AT SEC.
725.518(C)(4)(I). THE MERE FACT THAT GENERAL ANDERSON'S DISABILITIES
WERE RATABLE UNDER THE VASRD WOULD NOT NECESSARILY RENDER HIM UNFIT FOR
SERVICE (ID. AT SEC. 725.518(C)(4)(II)), A FINDING WHICH IS PREREQUISITE
TO HIS RETIREMENT FOR PHYSICAL DISABILITY. ID. AT SEC. 725.518(A)(1).
IN THIS REGARD, A 0 PERCENT RATING MAY BE ASSIGNED UNDER THE
FOLLOW-CIRCUMSTANCES:
"OCCASIONALLY A DISABILITY IS OF SUCH MILD DEGREE THAT IT DOES NOT
MEET THE CRITERIA EVEN FOR THE LOWEST RATING PROVIDED IN THE VASRD UNDER
THE APPLICABLE DIAGNOSTIC CODE NUMBER. A ZERO PERCENT RATING MAY BE
APPLIED IN SUCH CASES ALTHOUGH THE LOWEST LISTED RATING IS 10 PERCENT OR
MORE. ***" ID. AT SEC. 725.518(H)(2)(V).
WE ADDRESSED THE ISSUE OF THE EFFECT TO BE ACCORDED 0 PERCENT RATED,
COMBAT-RELATED DISABILITIES IN OUR DECISION B-155090, OCTOBER 13, 1964,
CONCERNING COMMANDER JOSEPH W. MROSS, USN, RETIRED, IN WHICH WE HELD:
"*** IT IS ONLY THE DISABILITY FOR WHICH A MEMBER IS ACTUALLY RETIRED
THAT MAY BE CONSIDERED IN DETERMINING WHETHER HE RETIRED BECAUSE OF
DISABILITY INCURRED IN COMBAT *** OR CAUSED BY AN INSTRUMENTALITY OF WAR
*** THE NAVY DID NOT REGARD THAT INJURY, STANDING ALONE, AS ENTITLING
HIM TO DISABILITY RETIREMENT *** WE DO NOT REGARD THE LISTING OF THAT
INJURY AS ONE OF THE CONDITIONS FOR WHICH HE WAS PERMANENTLY RETIRED AS
FURNISHING SUFFICIENT BASIS FOR A CONCLUSION THAT HE WAS RETIRED FOR
DISABILITY UNDER CIRCUMSTANCES CONTEMPLATED BY *** THE ECONOMY ACT.
(THE PREDECESSOR OF THE DUAL COMPENSATION ACT.) ***."
SEE ALSO B-155090, FEBRUARY 10, 1965. IN SUPPORT OF ITS CLAIM FOR
EXEMPTION ON BEHALF OF GENERAL ANDERSON, AID RELIES UPON MROSS V. UNITED
STATES, 186 CT. CL. 165 (1968), THE HOLDING OF WHICH IS CONTRARY TO OUR
ABOVE-QUOTED DECISION INVOLVING THE SAME RETIRED MEMBER. THE COURT OF
CLAIMS HELD THAT ALTHOUGH COMMANDER MROSS WAS RETIRED FOR PHYSICAL
DISABILITY ON THE BASIS OF THREE CONDITIONS, ONE OF WHICH WAS
COMBAT-RELATED, BUT RATED AS 0 PERCENT DISABLING; HIS COMBAT-RELATED
INJURY WAS A BASIS FOR HIS PERMANENT RETIREMENT WHICH MET THE
REQUIREMENTS OF THE EXCEPTION TO THE DUAL COMPENSATION ACT, AND HE WAS
ENTITLED TO RECOVER WITHHELD RETIREMENT PAY. ID. AT 171-172.
IN ANSWER TO SUBSEQUENT INQUIRIES CONCERNING THE IMPACT OF THE MROSS
CASE, WE CAREFULLY RECONSIDERED OUR PREVIOUS POSITION AND AFTER A REVIEW
OF THE LAW AND ITS LEGISLATIVE PURPOSE WE CONCLUDED THAT WE DISAGREED
WITH THE COURT'S OSTENSIBLE POSITION THAT ANY COMBAT-INCURRED INJURY,
REGARDLESS OF THE SUBSEQUENT SIGNIFICANCE OF ANY RESULTANT DISABILITY AT
THE TIME OF RETIREMENT, SUFFICED TO EXEMPT A RETIRED OFFICER FROM
RETIREMENT PAY REDUCTIONS. 50 COMP. GEN. 480 (1971). WE INDICATED THAT
WE WERE UNABLE TO AGREE WITH THE COURT'S APPLICATION OF THE STATUTORY
EXEMPTION TO THE FACTUAL SITUATION PRESENT IN MROSS, AND RAISED AGAIN IN
THE INSTANT CASE, FOR THE FOLLOWING REASONS:
"THE RECORD IN THE MROSS CASE CLEARLY ESTABLISHES THAT HIS
WAR-INCURRED (PERFORATED EAR DRUM) WAS NOT DISABLING AND THAT HE
SUBSEQUENTLY SERVED ON ACTIVE DUTY FOR 18 YEARS SATISFACTORILY WITH SUCH
CONDITION AND WAS *** APPOINTED A COMMISSIONED OFFICER AND PROMOTED
SEVERAL TIMES AFTER SUCH INJURY WAS INCURRED. THAT RECORD ALSO CLEARLY
ESTABLISHES THAT THE DISABILITY FOR WHICH HE WAS ACTUALLY RETIRED WAS A
HEART CONDITION AND THAT HIS WAR-INCURRED INJURY DID NOT CONSTITUTE A
SIGNIFICANT FACTOR IN HIS DISABILITY RETIREMENT." ID. 485.
WE CONCLUDED, THEREFORE:
"THAT UNTIL THE COURTS HAVE HAD AN OPPORTUNITY TO RECONSIDER THIS
MATTER IN OTHER CASES, WITH SPECIFIC REFERENCE TO THE ABOVE-MENTIONED
LEGISLATIVE HISTORY OF THE EXEMPTION PROVISION AND ITS LONGSTANDING
ADMINISTRATIVE INTERPRETATION, ANY CHANGE IN THE CONCLUSIONS REACHED IN
OUR PRIOR DECISION IN THE MROSS CASE WOULD NOT BE JUSTIFIED." ID. AT
486.
WHILE THE COURT OF CLAIMS IN REITH V. UNITED STATES, 199 CT. CL.
200, 208 (1972), SUBSEQUENTLY ADOPTED THE COMMISSIONER'S REPORT WHICH
INDICATED THAT ALL CONDITIONS RATABLE IN THE VASRD ARE DEEMED TO
CONTRIBUTE TO UNFITNESS, EVEN WHERE THE RATING IS ZERO, THAT CASE
INVOLVED A QUESTION OF THE RATABILITY OF A PARTICULAR INJURY AND DID NOT
INVOLVE THE DUAL COMPENSATION ACT. THUS, WE ARE AWARE OF NO CASE IN
WHICH THE COURTS HAVE HAD THE OPPORTUNITY TO RECONSIDER THE POSITION
TAKEN BY THE COURT OF CLAIMS IN MROSS, AND OUR VIEWS IN THE MATTER
REMAIN AS STATED IN 50 COMP. GEN. 480, SUPRA. THEREFORE, CONSIDERING
THAT GENERAL ANDERSON, LIKE COMMANDER MROSS, COMPLETED A LENGTHY AND
SUCCESSFUL MILITARY CAREER SUBSEQUENT TO HIS COMBAT-INCURRED HAND INJURY
WHICH, HAVING BEEN RATED AS 0 PERCENT DISABLING, DOES NOT APPEAR TO HAVE
BEEN A SIGNIFICANT FACTOR IN HIS DISABILITY RETIREMENT, IT IS OUR VIEW
THAT HE IS NOT ENTITLED TO THE EXEMPTION PROVIDED BY 5 U.S.C.
5532(C)(1).
ACCORDINGLY, GENERAL ANDERSON IS SUBJECT TO THE REDUCTION IN RETIRED
PAY PRESCRIBED BY THE DUAL COMPENSATION ACT, 5 U.S.C. 5532(B).
B-146779, OCT 18, 1976
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
FRANK A. SCHRONTZ, INSTALLATIONS AND LOGISTICS:
IN YOUR MAY 18, 1976, RESPONSE TO OUR REPORT ON THE USE OF GOVERNMENT
VERSUS COMMERCIAL FACILITIES FOR STORING HOUSEHOLD GOODS (OSD CASE
#4280), YOU SAID THAT THE DEPARTMENT OF DEFENSE (DOD) CONCURRED WITH OUR
PREMISE WHICH WAS TO USE SPACE IN GOVERNMENT WAREHOUSES FOR THE STORAGE
OF HOUSEHOLD GOODS WHEN IT IS MORE COST EFFECTIVE THAN COMMERCIAL
STORAGE. YOU DISPUTED SOME OF THE COST FACTORS USED IN OUR REPORT;
HOWEVER, YOU INDICATED THAT DOD WOULD INITIATE A STUDY TO IDENTIFY OTHER
AREAS WHERE THE USE OF AVAILABLE WAREHOUSING CAPACITY WOULD RESULT IN A
SAVING.
IN OUR OPINION, FURTHER DOD STUDIES MAY YIELD NEGATIVE RESULTS UNLESS
SOME OF THE POINTS RAISED BY YOUR RESPONSE ARE CONSIDERED. WE THEREFORE
OFFER THE FOLLOWING COMMENTS TO THE SPECIFIC POINTS OF DIFFERENCE.
KELLY AIR FORCE BASE
IN OUR REPORT WE CITED A POTENTIAL SAVING OF $576,956 ANNUALLY BY
USING GOVERNMENT-OWNED FACILITIES AT KELLY AIR FORCE BASE, TEXAS,
INSTEAD OF USING COMMERCIAL STORAGE FACILITIES. AT THE TIME OF OUR
REVIEW, THE SPACE WAS NOT BEING USED, THERE WAS NO ALTERNATIVE- USE
PLAN, AND WE HAD IDENTIFIED AN AREA THAT OFFERED A POTENTIAL FOR SAVING
- THE STORAGE OF HOUSEHOLD GOODS. DOD NOW INDICATES THAT A ONE-TIME
SAVING OF OVER $14 MILLION AND AN ANNUAL SAVING OF OVER $700,000 CAN BE
ACHIEVED BY USING THE SPACE FOR A NEW LOGISTICAL STORAGE FACILITY.
IF DOD CAN BETTER USE THE SPACE AND IF SUCH USE WILL RESULT IN SAVING
MORE THAN THAT WHICH WOULD BE REALIZED BY STORING HOUSEHOLD GOODS, GAO
SUPPORTS THE ALTERNATIVE USE.
AT AN APPROPRIATE FUTURE TIME, WE WILL REVIEW THE OPERATION AND
EFFECTIVENESS OF THE PROPOSED LOGISTICAL FACILITY.
OAKLAND ARMY TERMINAL
DOD TOOK EXCEPTION TO OUR HANDLING OF FOUR ELEMENTS OF COST: (1)
STORAGE IN TRANSIT, (2) PACKING AND DRAYING, (3) OPPORTUNITY COST, AND
(4) SELF-INSURED LIABILITY.
STORAGE IN TRANSIT
DOD SAID THAT STORAGE-IN-TRANSIT (SIT) COSTS WOULD BE INCURRED UNDER
A GOVERNMENT OR COMMERCIAL STORAGE OPERATION AND SHOULD BE INCLUDED AS A
COST UNDER EACH ALTERNATIVE OR EXCLUDED ENTIRELY. DOD THOUGHT WE
INCLUDED SIT COST ONLY FOR THE COMMERCIAL STORAGE ALTERNATIVES.
ON THE CONTRARY, OUR ESTIMATE OF THE COST OF USING GOVERNMENT STORAGE
INCLUDED PROVISION FOR SIT IN GOVERNMENT-OPERATED SPACE, BASED ON THE
WEIGHT OF HOUSEHOLD GOODS IN COMMERCIAL SIT. SO SIT COSTS WERE INCLUDED
UNDER BOTH ALTERNATIVES.
BECAUSE OF THE HIGH COST OF COMMERCIAL SIT AND BECAUSE IT IS LEVIED
ON THE BASIS OF 30-DAY INCREMENTS, IT IS AN EXPENSIVE FORM OF STORAGE.
WE ESTIMATED THAT THE ANNUAL SIT COST IS $4.19 A HUNDREDWEIGHT UNDER THE
GOVERNMENT OPERATION COMPARED TO $33.20 A HUNDREDWEIGHT UNDER THE
COMMERCIAL ALTERNATIVE. OUR ESTIMATE INCLUDED A FACTOR TO COVER THE
COST OF ADDITIONAL PERSONNEL AND SPACE REQUIRED TO HANDLE SIT SHIPMENTS
AT OAKLAND ARMY TERMINAL, CALIFORNIA. INDIRECT EXPENSE ESTIMATES WERE
ALSO INCREASED PROPORTIONATELY.
IN SUMMARY, SIT COSTS WERE INCLUDED IN OUR COMPUTATION UNDER BOTH
ALTERNATIVES. THEREFORE, EXCLUSION OF THE SIT COSTS FROM COMMERCIAL
CONTRACT COSTS IN THE MILITARY TRAFFIC MANAGEMENT COMMAND (MTMC)
COMPARISON WAS NOT APPROPRIATE.
PACKING AND DRAYING
DOD BELIEVES THAT ADDITIONAL PACKING AND DRAYING COST WOULD BE
INCURRED BY CONVERTING TO A GOVERNMENT STORAGE OPERATION. HOWEVER, IN
OUR OPINION PACKING AND DRAYING COSTS WOULD BE THE SAME REGARDLESS OF
WHETHER STORAGE IS IN GOVERNMENT OR COMMERCIAL FACILITIES. THE SAME
SERVICES ARE REQUIRED UNDER EITHER STORAGE ALTERNATIVE.
OUR REPORT CONSIDERED USING SERVICES FOR NONTEMPORARY STORAGE IN
GOVERNMENT WAREHOUSES IDENTICAL TO THAT NOW FURNISHED IN CONTRACTOR
WAREHOUSES. THE MAJOR DIFFERENCE WOULD BE THE PHYSICAL LOCATION AND
OWNERSHIP OF THE WAREHOUSES.
THE $12.94 PACK AND CRATE RATE CITED BY DOD IS FOR A DIFFERENT TYPE
OF SERVICE THAN REQUIRED FOR PREPARING SHIPMENTS FOR NONTEMPORARY
STORAGE. FOR EXAMPLE, THE RATE CONSIDERS PACKING, CRATING, AND
PREPARING MILITARY SHIPMENTS FOR OVERSEAS TRANSPORTATION AND STUFFING
THE GOODS IN HEAVY, TYPE II TRANSPORTATION CONTAINERS. IN CONTRAST, THE
ONLY PACKING REQUIRED FOR STORAGE WOULD BE FOR PROTECTION AS REQUIRED
FOR LOCAL DRAYAGES.
THE TYPE OF CONTAINER USED BY CONTRACTORS FOR NONTEMPORARY STORAGE IS
ENTIRELY DIFFERENT FROM THE TYPE II CONTAINER USED FOR OVERSEAS
SHIPMENT. USE OF TYPE II CONTAINERS FOR NONTEMPORARY STORAGE WOULD BE
INEFFICIENT AND UNECONOMICAL.
OUR REPORT INCLUDED THE COSTS OF STORAGE CONTAINERS OF THE TYPE USED
BY CONTRACTORS AS A SEPARATE ITEM. (SEE NOTE J, ENC. I OF OUR REPORT.)
THEREFORE, THE INCLUSION OF CONTAINER COSTS AS DISCUSSED BY MTMC IS NOT
APPROPRIATE.
IN ADDITION, DOD WAS CONCERNED THAT COMMERCIAL CONTRACTORS MIGHT
RAISE PACKING AND DRAYAGE RATES TO COMPENSATE FOR THE LOSS OF REVENUE
FROM LONG-TERM STORAGE. AT THE SAME TIME, HOWEVER, IT RECOGNIZED THE
POTENTIAL FOR LOWER RATES WHICH COULD RESULT FROM LARGER VOLUME
CONTRACTS.
OPPORTUNITY COSTS
DOD BELIEVES THAT $367,000 IN OPPORTUNITY COSTS SHOULD BE CONSIDERED
IN THE COST COMPARISON BECAUSE IT REPRESENTS THE FAIR MARKET RENTAL
VALUE OF THE WAREHOUSES UNDER CONSIDERATION.
THE ARMY CRITERION (AR 235.5) FOR INCLUDING AN OPPORTUNITY COST IN
COMPARING THE COSTS OF GOVERNMENT OR CONTRACTOR FACILITIES IS BASED ON
THE PREMISE THAT
"IF RELIANCE UPON A COMMERCIAL SOURCE WILL CAUSE GOVERNMENT-OWNED
EQUIPMENT OR FACILITIES TO BECOME AVAILABLE FOR OTHER FEDERAL USE OR FOR
DISPOSAL AS SURPLUS, THE COST COMPARISON ANALYSIS SHOULD INCLUDE AS A
COST IN THE FIRST YEAR OF OPERATION OF THE GOVERNMENT ACTIVITY AN
APPROPRIATE AMOUNT BASED UPON THE ESTIMATED CURRENT MARKET VALUE OF SUCH
EQUIPMENT OR FACILITIES. THIS AMOUNT REPRESENTS AN OPPORTUNITY COST,
WHICH IS THE MONEY THE GOVERNMENT WOULD LOSE BY CONTINUING THIS ACTIVITY
WITH ITS EXISTING EQUIPMENT AND FACILITIES."
THIS CRITERION IS CONSISTENT WITH THE PROVISIONS OF OMB CIRCULAR NO.
A-76 WHICH PRESCRIBES POLICIES FOR ACQUIRING COMMERCIAL PRODUCTS AND
SERVICES. IN OTHER WORDS, THE CRITERION CONSIDERS THAT THERE IS OR WILL
BE AN IMMINENT ALTERNATIVE USE. THIS NOW APPEARS TO BE THE CASE AT
KELLY WHERE THE OPPORTUNITY COST OF THE ALTERNATIVE USE AS A LOGISTICS
FACILITY MAKES THE WAREHOUSES LESS ATTRACTIVE FOR STORAGE OF HOUSEHOLD
GOODS.
AT THE TIME OF OUR REVIEW, THE CONTINUED USE OF CONTRACTOR WAREHOUSES
HAD NOT MADE THE WAREHOUSES AT OAKLAND ARMY TERMINAL USABLE FOR OTHER
GOVERNMENT PURPOSES. THE WAREHOUSES AT THE TERMINAL CONTINUE TO BE
UNUSED AND HAVE BEEN UNUSED FOR 3 CONSECUTIVE YEARS.
WE CONCLUDED THAT THE USE OF CONTRACTOR WAREHOUSING HAD NOT ENABLED
THE GOVERNMENT TO USE SPACE AT OAKLAND ARMY TERMINAL AND THEREFORE
OPPORTUNITY COSTS WERE APPROPRIATELY EXCLUDED FROM OUR COMPUTATIONS.
SUCH A CONCLUSION IS CONSISTENT WITH THE GENERALLY ACCEPTED COST
ACCOUNTING PRINCIPLE THAT OPPORTUNITY COST IS THE MEASURABLE ADVANTAGE
FORGONE AS A RESULT OF THE ALTERNATIVE USES OF RESOURCES. IN THE CASE
OF THE OAKLAND ARMY TERMINAL, SINCE THE SPACE REMAINED UNUSED FOR SUCH A
CONTINUOUS AND LENGTHY PERIOD, THERE WAS NO MEASURABLE ADVANTAGE
FORGONE. OUR ANALYSIS DOES INCLUDE A SMALL FACTOR FOR OPPORTUNITY COST,
BECAUSE AT THE TIME OF OUR REVIEW THERE APPEARED TO BE A REASONABLY FIRM
ARRANGEMENT FOR USE OF PART OF THE SPACE. THAT ARRANGEMENT WAS NEVER
CONSUMMATED.
IN YOUR LETTER, YOU SAID THAT THE PROPOSED BUILDINGS AT OAKLAND ARE
CONSIDERED PRIME REAL ESTATE, FOR WHICH A MODEST FAIR MARKET RENTAL
VALUE WOULD BE $367,000 - THE OPPORTUNITY COST. SUCH A CONCLUSION
CONSIDERS (1) THAT THE PROPERTY IS BEING OFFERED TO THE PUBLIC OR OTHER
GOVERNMENT AGENCIES FOR RENTAL AND (2) IN VIEW OF ITS ASSERTED PRIME
NATURE AND THE MODEST RENTAL, THE PROPERTY WILL SHORTLY BE LEASED TO A
LESSOR.
AT THE TIME OF OUR STUDY, NO SUCH POSSIBILITIES EXISTED, AND OAKLAND
PORT AUTHORITY OFFICIALS, A POTENTIAL USER OF THE PORT AT THAT TIME,
ADVISED US THEY WERE PRIMARILY INTERESTED IN THE PIER CAPACITY AND NOT
USE OF THE BUILDINGS EXCLUSIVE OF THE PIER FACILITIES.
AS OF SEPTEMBER 1976, MTMC AUTHORITIES ADVISED US THAT THE BUILDINGS
HAD NOT BEEN ADVERTISED FOR LEASE.
UNLESS THE BUILDINGS ARE MADE AVAILABLE FOR LEASING AND ARE LATER
LEASED WITHIN A REASONABLE PERIOD OF TIME OR THERE IS SOME OTHER
IMMINENT USE OF THE BUILDINGS, WE RECOMMEND YOU RECOMPUTE THE COST
COMPARISON FOR OAKLAND, EXCLUDING OPPORTUNITY COSTS. WE ALSO RECOMMEND
THAT THE "IMMINENT ALTERNATIVE USE" PRINCIPLE OF OPPORTUNITY COSTS BE
APPLIED TO SIMILAR INSTALLATIONS YOU STUDY.
SELF-INSURED LIABILITY
ALTHOUGH THE SUBJECT OF SELF-INSURED LIABILITY IS ONE OF THE FOUR
MAJOR ISSUES RAISED BY DOD, IT HAS LITTLE IMPACT ON COMPARATIVE COST
ANALYSIS. THE DIFFERENCE BETWEEN DOD AND OUR ESTIMATES FOR THIS ELEMENT
IS ONLY $9,400 AND ACCORDINGLY WOULD NOT INFLUENCE ANY DECISION ON
WHETHER OR NOT TO USE GOVERNMENT OR COMMERCIAL FACILITIES.
HOWEVER, THE FOLLOWING POINTS RESPOND TO THE QUESTIONS RAISED BY DOD.
1. WE ARE NOT SUGGESTING THAT ALL THE HOUSEHOLD GOODS IN THE BAY
AREA COULD BE PLACED IN ONE WAREHOUSE BUT RATHER THAT THE TWO WAREHOUSES
WOULD BE REQUIRED.
2. THE FIRE SYSTEMS INSTALLED IN THE GOVERNMENT WAREHOUSES IN
QUESTION WERE BUILT TO MEET HIGHER STANDARDS THAN SIMILAR SYSTEMS
INSTALLED IN COMMERCIAL WAREHOUSES.
3. THE WAREHOUSES AT OAKLAND ARMY TERMINAL HAVE A SUPERVISED FIRE
ALARM SYSTEM (COMMERCIAL WAREHOUSE SYSTEMS GENERALLY DO NOT). ALSO, THE
AREA WHERE FACILITIES ARE LOCATED IS MONITORED 24 HOURS A DAY BY TV
CAMERAS AND ROVING GUARDS.
4. THE WAREHOUSES AT OAKLAND ARMY TERMINAL, ALTHOUGH THEY ARE LARGE,
ARE DIVIDED INTO SIX SEPARATE BAYS SEPARATED BY CONCRETE FIREWALLS. IT
IS UNLIKELY THAT A SINGLE FIRE WOULD DESTROY ALL HOUSEHOLD GOODS IN THE
BAY AREA.
WE RECOMMEND THAT YOU REEVALUATE YOUR CONCLUSIONS CONCERNING NONUSE
OF THE OAKLAND ARMY TERMINAL FOR STORAGE OF HOUSEHOLD GOODS IN LIGHT OF
THE MATTERS DISCUSSED IN THIS LETTER.
WE WOULD APPRECIATE BEING INFORMED OF THE RESULTS OF THE STUDY YOU
ARE INITIATING TO IDENTIFY THE POTENTIAL SAVING FROM THE USE OF OTHER
AVAILABLE WAREHOUSING CAPACITY FOR THE STORAGE OF HOUSEHOLD GOODS.
WE ARE SENDING COPIES OF THIS REPORT TO THE DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET, AND TO THE CONGRESSIONAL COMMITTEES DESIGNATED
UNDER THE LEGISLATIVE REORGANIZATION ACT OF 1970 TO RECEIVE COPIES OF
DOD'S RESPONSE TO OUR RECOMMENDATIONS.
B-186677, SEP 29, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
MARINE CORPS MEMBER ON TEMPORARY DUTY ASSIGNMENT WHO COMMUTED 120
MILES DAILY BETWEEN HIS PERMANENT RESIDENCE AND TEMPORARY DUTY STATION,
IS ENTITLED TO BE PAID MILEAGE ALLOWANCE FOR SUCH TRAVEL, BUT NOT TO
EXCEED AMOUNT HE WOULD HAVE RECEIVED HAD HE REMAINED AT TEMPORARY DUTY
STATION, WHERE COMMUTING TRAVEL WAS NOT APPROVED AS ADVANTAGEOUS TO
GOVERNMENT BUT WAS INSTEAD MERELY PERMITTED FOR REASONS OF MEMBER'S
PERSONAL CONVENIENCE. SEE 1 JTR, M4212, CH. 252.
SERGEANT MAJOR L. GASKIN, USMC:
THIS ACTION IS IN RESPONSE TO A LETTER DATED MAY 7, 1976, FROM THE
DISBURSING OFFICER, MARINE CORPS FINANCE CENTER (REFERENCE CDO-RPP-JM
7240), REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING
PAYMENT ON A VOUCHER IN THE AMOUNT OF $418.60, IN FAVOR OF SERGEANT
MAJOR L. GASKIN, USMC, 000-00-6871, WHO CLAIMS ENTITLEMENT TO BE
REIMBURSED FOR TRAVEL EXPENSES INCURRED INCIDENT TO A TEMPORARY
ADDITIONAL DUTY ASSIGNMENT AT CAMP PENDLETON, CALIFORNIA. THE REQUEST
WAS FORWARDED TO THIS OFFICE BY THE PER DIEM, TRAVEL AND TRANSPORTATION
ALLOWANCE COMMITTEE AND ASSIGNED CONTROL NO. 76-14.
THE RECORD SHOWS THAT BY SPECIAL ORDER NO. 3524-75, DATED SEPTEMBER
25, 1975, ISSUED BY THE THIRD MARINE AIRCRAFT WING, MARINE CORPS AIR
STATION, EL TORO, CALIFORNIA, THE MEMBER WAS DIRECTED TO PERFORM
TEMPORARY ADDITIONAL DUTY FROM ON OR ABOUT SEPTEMBER 26, 1975, FOR 90
DAYS AT THE MARINE CORPS BASE, CAMP PENDLETON, CALIFORNIA. ITEM NUMBER
FOUR OF THE MEMBER'S WRITTEN ORDERS PROVIDED IN PERTINENT PART AS
FOLLOWS:
"IN ACCORDANCE WITH PARAGRAPH 4451, JTR, IF TEMPORARY ADDITIONAL DUTY
IN EXCESS OF TWENTY-FOUR (24) HOURS IS TO BE PERFORMED AT AN
INSTALLATION OF THE UNIFORMED SERVICES AND GOVERNMENT QUARTERS ARE NOT
AVAILABLE, MAXIMUM PER DIEM IS PAYABLE, YOU ARE DIRECTED TO OBTAIN A
CERTIFICATION AS TO THE AVAILABILITY OF GOVERNMENT QUARTERS, GOVERNMENT
MESS AND (FOR OFFICERS ONLY) OFFICERS MESS (OPEN) FROM THE INSTALLATION
COMMANDER, OR HIS DESIGNATED REPRESENTATIVE.
"UTILIZATION OF GOVERNMENT-QUARTERS AND/OR MESS IS DIRECTED IF
AVAILABLE"
IT IS REPORTED THAT THE TEMPORARY ADDITIONAL DUTY LOCATION WAS 46
MILES FROM THE MEMBER'S PERMANENT DUTY STATION AT EL TORO, CALIFORNIA,
AND 60 MILES FROM HIS RESIDENCE AT FULLERTON, CALIFORNIA. GOVERNMENT
QUARTERS AND MESSING FACILITIES WERE AVAILABLE AT CAMP PENDLETON DURING
THE TIME THE MEMBER PERFORMED TEMPORARY ADDITIONAL DUTY THERE, BUT HE
CHOSE NOT TO UTILIZE THEM. INSTEAD, HE ELECTED TO COMMUTE DAILY VIA
PRIVATELY OWNED VEHICLE BETWEEN HIS RESIDENCE AND CAMP PENDLETON.
ON DECEMBER 19, 1975, THE MEMBER SUBMITTED A VOUCHER IN WHICH HE
CLAIMED TRAVEL EXPENSES OF $418.60. THIS AMOUNT APPARENTLY REPRESENTS
THE ROUND TRIPS WHICH HE PERFORMED DAILY FOR 65 DAYS BETWEEN EL TORO AND
CAMP PENDLETON, CALIFORNIA, AT THE RATE OF 7 CENTS PER MILE. THE
SUBMISSION INDICATES THAT FIELD DISBURSING OFFICERS WERE RELUCTANT TO
PAY THE AMOUNT CLAIMED BECAUSE IT EXCEEDED THE PER DIEM ALLOWANCE WHICH
WOULD HAVE BEEN PAYABLE HAD THE MEMBER REMAINED AT CAMP PENDLETON AND
UTILIZED GOVERNMENT QUARTERS THERE DURING THE PERIOD OF HIS TEMPORARY
ADDITIONAL DUTY ASSIGNMENT.
BASED ON THE FOREGOING, THE FOLLOWING QUESTIONS ARE PRESENTED:
"A. DOES THE RESTRICTION CONTAINED IN PARAGRAPH M4201-15 APPLY WHEN
THE ONE-WAY COMMUTING DISTANCE IS 60 MILES, AS IN THE CASE OF SERGEANT
GASKIN? IS THERE A LIMITATION TO THE DISTANCE THAT A MEMBER MAY COMMUTE
UNDER THIS PARAGRAPH?
"B. CAN THE LIMITATION CONTAINED IN PARAGRAPH M4212 BE APPLIED WHEN
THE TRANSPORTATION EXPENSES FOR COMMUTING IS GREATER THAN THE PER DIEM
ALLOWANCE PAYABLE HAD THE MEMBER NOT COMMUTED?
"C. DOES PARAGRAPH M4201-15 AUTOMATICALLY PROVIDE ENTITLEMENT TO
TRANSPORTATION EXPENSES FOR THIS TYPE OF TEMPORARY DUTY (OTHER THAN THAT
REQUIRING AUTHORIZATION OR APPROVAL UNDER PART K, CHAPTER 4, JOINT
TRAVEL REGULATIONS AND PARAGRAPH M4203-3B?)
"D. DO THE MEMBER'S ORDERS AS WRITTEN PROHIBIT HIM FROM COMMUTING
FROM HIS RESIDENCE TO HIS TEMPORARY DUTY STATION AND RETURN TO HIS
RESIDENCE DAILY?
"E. MAY ORDERS RESTRICT MEMBERS FROM COMMUTING DAILY TO A NEARBY
TEMPORARY DUTY STATION?
"F. FINALLY, IS PARAGRAPH M4212 APPLICABLE ONLY WHEN, DURING A
PERIOD OF TEMPORARY DUTY, A MEMBER RETURNS OCCASIONALLY TO HIS PERMANENT
DUTY STATION OR HIS PERMANENT RESIDENCE FOR PERSONAL REASONS?"
SECTION 404 OF TITLE 37, UNITED STATES CODE, PROVIDES THAT UNDER
REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A MEMBER OF THE
UNIFORMED SERVICE IS ENTITLED TO TRAVEL AND TRANSPORTATION ALLOWANCES
FOR TRAVEL PERFORMED AWAY FROM HIS DESIGNATED POST OF DUTY REGARDLESS OF
THE LENGTH OF TIME HE IS AWAY FROM THAT POST. REGULATIONS PROMULGATED
PURSUANT TO THAT AUTHORITY ARE CONTAINED IN VOLUME 1, JOINT TRAVEL
REGULATIONS (1 JTR).
PARAGRAPH M4201-15, 1 JTR, PROVIDES THAT NO PER DIEM ALLOWANCE IS
PAYABLE FOR TEMPORARY DUTY PERFORMED AWAY FROM THE MEMBER'S PERMANENT
DUTY STATION AT A PLACE TO WHICH HE COMMUTES DAILY FROM HIS PERMANENT
QUARTERS. HOWEVER, IT PROVIDES THAT TRANSPORTATION EXPENSES INCIDENT TO
THIS TYPE OF TEMPORARY DUTY ASSIGNMENT MAY BE PAID IN LIEU OF SUCH PER
DIEM, UNDER THE PROVISIONS OF PARAGRAPH M4203 WHEN TRAVEL IS FROM
OUTSIDE THE METROPOLITAN AREA OF THE TEMPORARY DUTY STATION.
SUBPARAGRAPH M4203-3A, 1 JTR, PROVIDES THAT WHEN A MEMBER PERFORMS
AUTHORIZED TRAVEL AT PERSONAL EXPENSE PURSUANT TO A TEMPORARY DUTY
ASSIGNMENT HE IS ENTITLED TO A MONETARY ALLOWANCE IN LIEU OF
TRANSPORTATION AT THE RATE OF 7 CENTS PER MILE FOR THE OFFICIAL DISTANCE
OF THE ORDERED TRAVEL. SUBPARAGRAPH M4203-3B, 1 JTR, FURTHER PROVIDES
THAT WHEN THE USE OF A PRIVATELY OWNED CONVEYANCE IS AUTHORIZED OR
APPROVED AS ADVANTAGEOUS TO THE GOVERNMENT FOR TRAVEL BETWEEN THE
MEMBER'S PLACE OF ABODE AND HIS TEMPORARY DUTY STATION, INSTEAD OF
REPORTING TO HIS PERMANENT DUTY STATION, AND THENCE TO THE TEMPORARY
DUTY STATION, THE MEMBER IS ENTITLED TO REIMBURSEMENT FOR THE DISTANCE
TRAVELED BETWEEN PLACE OF ABODE AND THE TEMPORARY DUTY STATION.
AS A LIMITATION TO THE FOREGOING, PARAGRAPH M4212, 1 JTR (CHANGE 252,
FEBRUARY 1, 1974, IN EFFECT AT THE TIME OF THE MEMBER'S TEMPORARY DUTY
ASSIGNMENT), PROVIDES AS FOLLOWS:
"WHEN A MEMBER RETURNS TO HIS PERMANENT DUTY STATION (INCLUDING HOME
FROM WHICH HE USUALLY COMMUTES TO HIS PERMANENT DUTY STATION DAILY) FOR
PERSONAL REASONS DURING A PERIOD OF TEMPORARY DUTY, HE SHALL BE ENTITLED
TO ALLOWANCES AS PRESCRIBED IN THIS PART FOR TEMPORARY DUTY TRAVEL FOR
THE TRAVEL PERFORMED FROM TEMPORARY TO PERMANENT DUTY STATION AND
RETURN, PROVIDED, THAT IN NO INSTANCE WILL REIMBURSEMENT FOR SUCH TRAVEL
EXCEED THE AMOUNT HE WOULD HAVE RECEIVED HAD HE REMAINED AT THE
TEMPORARY DUTY STATION. NO ALLOWANCES SHALL BE CREDITED TO A MEMBER FOR
ANY DAY THE MEMBER WAS IN A LEAVE STATUS."
WE HAVE PREVIOUSLY EXPRESSED THE VIEW THAT THIS PROVISION APPLIES TO
TRAVEL PERFORMED ON A DAILY COMMUTING BASIS FOR REASONS OF PERSONAL
CONVENIENCE, AND THAT ITS APPLICATION IS NOT LIMITED TO OCCASIONAL OR
WEEKEND TYPE RETURN TRIPS TO THE PERMANENT DUTY STATION. B-158945, JUNE
9, 1966.
IN THE PRESENT CASE, THE MEMBER WAS DIRECTED TO UTILIZE GOVERNMENT
QUARTERS AND MESSING FACILITIES, IF AVAILABLE, AT THE TEMPORARY DUTY
STATION. IT HAS BEEN REPORTED THAT THEY WERE AVAILABLE. WHILE IT IS
APPARENT HE WAS NOT REQUIRED TO REMAIN AT CAMP PENDLETON AND COULD
COMMUTE BETWEEN HIS PERMANENT RESIDENCE AND THE TEMPORARY DUTY STATION
THERE IS NOTHING IN THE FILE TO SHOW THAT THESE TRIPS WERE FOR ANY
REASON OTHER THAN HIS OWN PERSONAL CONVENIENCE. THEREFORE, THE MEMBER'S
TRAVEL ALLOWANCE IS NECESSARILY LIMITED BY THE PROVISIONS OF PARAGRAPH
M4212, 1 JTR.
ACCORDINGLY, THE MEMBER IS ENTITLED TO RECEIVE A MILEAGE ALLOWANCE
FOR TRAVEL PERFORMED BETWEEN HIS PERMANENT RESIDENCE AND CAMP PENDLETON,
CALIFORNIA, DURING THE PERIOD OF HIS TEMPORARY DUTY ASSIGNMENT, NOT TO
EXCEED THE AMOUNT HE WOULD HAVE RECEIVED AS PER DIEM HAD HE REMAINED AT
THE TEMPORARY DUTY STATION, FOR THE PERIOD IN QUESTION, TOGETHER WITH A
MILEAGE ALLOWANCE FOR TRAVEL PERFORMED FROM HIS RESIDENCE TO CAMP
PENDLETON ON SEPTEMBER 30, 1975, AND RETURN ON DECEMBER 3, 1975.
QUESTIONS A, B, C AND F ARE ANSWERED ACCORDINGLY.
THE TRAVEL VOUCHER, WHICH IS RETURNED, MAY NOT BE PAID AS IS BUT MAY
BE PROCESSED FOR PAYMENT IN ACCORDANCE WITH THE CONCLUSION REACHED
HEREIN.
WITH REGARD TO QUESTIONS D AND E, SINCE NO ISSUE OF EXCESS PAYMENT OF
FEDERAL FUNDS IS RAISED IN THIS CASE, IT IS UNNECESSARY FOR US TO
CONSIDER THE REASONABLENESS OF PERMITTING THE MEMBER TO COMMUTE 120
MILES DAILY BETWEEN HIS HOME AND THE TEMPORARY DUTY STATION. IN THIS
REGARD, WE NOTE THAT THE QUESTION OF WHETHER THE MEMBER COULD OR SHOULD
HAVE BEEN RESTRICTED TO GOVERNMENT QUARTERS AT THE TEMPORARY DUTY
STATION INVOLVES A MATTER PRIMARILY FOR CONSIDERATION BY THE MARINE
CORPS.
B-148144, JUN 30, 1976
HEADNOTES-UNAVAILABLE
SUBJECT:
QUALIFICATIONS OF PUBLIC ACCOUNTANTS ENGAGED TO PERFORM FINANCIAL
AUDITS OF GOVERNMENTAL ORGANIZATIONS
HEADS OF FEDERAL DEPARTMENTS AND AGENCIES:
SEVERAL GOVERNMENTAL OFFICIALS HAVE RAISED QUESTIONS CONCERNING THE
INTENT OF THE RECOMMENDATIONS SET FORTH IN OUR LETTER DATED MAY 28,
1975, TO SENATOR ABRAHAM A. RIBICOFF, CHAIRMAN OF THE COMMITTEE ON
GOVERNMENT OPERATIONS. (COPY ENCLOSED.) IN THAT LETTER, WE RECOMMENDED
THAT, WHEN PUBLIC ACCOUNTANTS ARE ENGAGED TO PERFORM FINANCIAL AUDITS OF
GOVERNMENTAL ORGANIZATIONS LEADING TO THE EXPRESSION OF AN OPINION ON
FINANCIAL STATEMENTS, THE AUDITS BE MADE BY CERTIFIED PUBLIC ACCOUNTANTS
OR BY PUBLIC ACCOUNTANTS LICENSED BEFORE DECEMBER 31, 1970. SIMILAR
RECOMMENDATIONS HAD BEEN MADE TO FEDERAL DEPARTMENT AND AGENCY HEADS ON
SEPTEMBER 15, 1970. THIS LETTER IS INTENDED TO ADDRESS THE QUESTIONS OF
WHETHER:
- OUR POSITION APPLIED TO ALL LEVELS OF GOVERNMENT INCLUDING STATE
AND LOCAL AGENCIES WHEN THEY CONTRACT WITH PUBLIC ACCOUNTANTS FOR
FINANCIAL AUDITS LEADING TO THE EXPRESSION OF AN OPINION,
- AUDITS OF FINANCIAL REPORTS AND/OR RECORDS OTHER THAN THE
TRADITIONAL FINANCIAL STATEMENTS ARE COVERED BY OUR POSITION, AND
- IT IS THE INTENT OF OUR POSITION THAT ALL FINANCIAL AUDITS LEADING
TO THE EXPRESSION OF AN OPINION BE MADE ONLY BY CERTIFIED PUBLIC
ACCOUNTANTS OR PUBLIC ACCOUNTANTS LICENSED BEFORE DECEMBER 31, 1970.
IT WAS OUR INTENT THAT THE RECOMMENDATION CONCERNING CONTRACTING WITH
PUBLIC ACCOUNTANTS TO MAKE FINANCIAL AUDITS LEADING TO THE EXPRESSION OF
AN OPINION ON FINANCIAL STATEMENTS AND REPORTS WOULD APPLY TO ALL LEVELS
OF GOVERNMENT. THE INCORPORATION OF THE POSITION CONCERNING
QUALIFICATIONS OF PUBLIC ACCOUNTANTS IN "STANDARDS FOR AUDIT OF
GOVERNMENTAL ORGANIZATIONS, PROGRAMS, ACTIVITIES & FUNCTIONS," ISSUED IN
1972, BROADENED THE RECOMMENDATIONS OF SEPTEMBER 15, 1970, TO APPLY TO
ALL GOVERNMENTAL ORGANIZATIONS. OUR POSITION WAS ISSUED AS A
RECOMMENDATION AND ITS INCLUSION IN THE STANDARDS DID NOT, PER SE, MAKE
IT MANDATORY ON ANY GOVERNMENTAL ORGANIZATION. HOWEVER, THE STANDARDS
WERE ESTABLISHED AS BASIC AUDIT CRITERIA FOR FEDERAL EXECUTIVE
DEPARTMENTS AND AGENCIES BY FEDERAL MANAGEMENT CIRCULAR 73-2.
CONCERNING THE ISSUE OF WHETHER AUDITS MADE BY OUTSIDE PUBLIC
ACCOUNTANTS OF FINANCIAL RECORDS OTHER THAN TRADITIONAL FINANCIAL
STATEMENTS ARE COVERED BY OUR RECOMMENDATION, THE KEY POINT IS WHETHER
THE PUBLIC ACCOUNTANT IS ASKED TO GIVE AN OPINION ON WHETHER FINANCIAL
INFORMATION IS FAIRLY PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED OR
OTHER APPLICABLE ACCOUNTING PRINCIPLES. IN GRANT REPORTING, THERE ARE
MANY REPORTS THAT ARE NOT TRADITIONAL FINANCIAL STATEMENTS; FOR
EXAMPLE, A STATEMENT SHOWING THAT MATCHING FUND REQUIREMENTS WERE MET,
OR A STATEMENT OF ALLOWABLE COSTS. IF A PUBLIC ACCOUNTANT'S OPINION ON
THE FAIRNESS OF SUCH A STATEMENT IS REQUIRED, THEN THE QUALIFICATIONS OF
THE ACCOUNTANT SHOULD BE IN ACCORDANCE WITH OUR RECOMMENDATION.
THE THIRD ISSUE IS WHETHER IT WAS OUR INTENT TO RECOMMEND THAT ONLY
PUBLIC ACCOUNTANTS PERFORM FINANCIAL AUDITS LEADING TO THE EXPRESSION OF
AN OPINION ON THE FAIRNESS OF FINANCIAL INFORMATION. ON MARCH 31, 1976,
THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS SENT MANY OF YOU
A LETTER URGING THAT GREATER ATTENTION BE GIVEN TO THE SUBJECT OF
AUDITOR QUALIFICATIONS, AND RECOMMENDING THAT SPECIFIC REFERENCE TO OUR
POSITION ON AUDITOR QUALIFICATIONS BE INCORPORATED IN RULES AND
REGULATIONS CONCERNING GUIDELINES FOR AUDITS OF FINANCIAL OPERATIONS.
THE INSTITUTE ALSO RECOMMENDED A MODEL AUDIT PROVISION THAT MIGHT BE
CONSIDERED IN FUTURE RULES AND REGULATIONS OR AUDIT GUIDELINES ISSUED BY
A GOVERNMENTAL DEPARTMENT OR AGENCY.
OUR POSITION REGARDING THE INSTITUTE'S RECOMMENDED MODEL AUDIT
PROVISION IS THAT IT WOULD BE APPROPRIATE FOR INCLUSION IN RULES AND
REGULATIONS OR AUDIT GUIDELINES TO APPLY WHEN THE GOVERNMENTAL
DEPARTMENT OR AGENCY CONSIDERS IT DESIRABLE OR NECESSARY TO SUPPLEMENT
ITS OWN AUDITING CAPACITY BY ENGAGING PUBLIC ACCOUNTANTS TO PERFORM
AUDITS LEADING TO AN EXPRESSION OF AN OPINION ON THE FAIRNESS OF
FINANCIAL PRESENTATIONS. HOWEVER, THE INCLUSION OF SUCH A PROVISION
SHOULD NOT BE WRITTEN SO AS TO PRECLUDE FEDERAL, STATE, OR LOCAL
GOVERNMENT AUDITORS FROM CONDUCTING SUCH AUDITS BY UTILIZING THEIR OWN
OR OTHER GOVERNMENT AUDIT STAFFS.
I HOPE THE ABOVE COMMENTS WILL CLARIFY THE POSITION STATED IN OUR
LETTER OF MAY 28, 1975. IT SHOULD BE MENTIONED AGAIN THAT THE
RECOMMENDATIONS WERE ADVISORY AND NOT MANDATORY. HOWEVER, FEW WILL
DISPUTE THAT GOVERNMENTAL OPERATIONS INCLUDE MANY COMPLEX AND
COMPLICATED FINANCIAL TRANSACTIONS. IT FOLLOWS, THEREFORE, THAT THE
HIGHEST SKILLS ARE NEEDED TO AUDIT AND GIVE OPINIONS ON THESE
OPERATIONS.
B-136530, MAY 12, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
LASH (LIGHTER ABOARD SHIP) SERVICES TO BE PERFORMED PARTLY WITH
PRIVATELY OWNED UNITED STATES-FLAG COMMERCIAL VESSELS AND PARTLY WITH A
FOREIGN-FLAG FLASH SYSTEM TO DELIVER CERTAIN GOVERNMENT-SPONSORED
CARGOES TO PORT OF CHITTAGONG IN BANGLADESH CONTRAVENES THE 1954 CARGO
PREFERENCE ACT BECAUSE DIRECT SERVICE TO CHITTAGONG IS AVAILABLE BY
US-FLAG BREAKBULK VESSELS AND BECAUSE SPECIAL CIRCUMSTANCES (HERE,
GEOGRAPHIC CONFIGURATION OF PORT PRECLUDING USE OF NORMAL LASH UNLOADING
OPERATIONS) CANNOT BE USED TO CIRCUMVENT THE CARGO PREFERENCE LAWS.
INTERPRETATION OF 1954 CARGO PREFERENCE LAW, 46 U.S.C. 1241(B)(1)
(1970).:
THIS DECISION TO THE SECRETARY OF COMMERCE RESPONDS TO THE REQUEST OF
THE ASSISTANT SECRETARY FOR MARITIME AFFAIRS FOR A RULING ON THE
CORRECTNESS OF A LEGAL OPINION PREPARED BY THE GENERAL COUNSEL OF THE
MARITIME ADMINISTRATION.
THE GENERAL COUNSEL HELD IN HIS OPINION THAT LASH (LIGHTER ABOARD
SHIP) SERVICES TO BE PERFORMED PARTLY WITH PRIVATELY OWNED UNITED
STATES-FLAG COMMERCIAL VESSELS AND PARTLY WITH A FOREIGN-FLAG FLASH
SYSTEM TO DELIVER CERTAIN GOVERNMENT-SPONSORED CARGOES TO THE PORT OF
CHITTAGONG IN BANGLADESH WOULD NOT CONTRAVENE SECTION 901(B)(1) OF THE
MERCHANT MARINE ACT, 1936, AS AMENDED, 46 U.S.C. 1241(B)(1) (1970),
POPULARLY KNOWN AS THE 1954 CARGO PREFERENCE LAW.
LASH OPERATIONS HAD THEIR TENTATIVE BEGINNINGS IN 1969. AS DESCRIBED
IN CONGRESSIONAL HEARINGS IN 1971, CARGO TRANSPORTED IN LASH OPERATIONS
IS LOADED INTO SPECIALLY DESIGNED BARGES (LIGHTERS) AND TOWED OUT TO THE
SIDE OF THE MOTHER SHIP. THERE THE BARGES ARE LOADED ONTO THE MOTHER
SHIP WHICH CARRIES THEM TO FOREIGN PORTS. UPON ARRIVAL IN A FOREIGN
PORT, THE BARGES ARE OFFLOADED FROM THE MOTHER SHIP AND TOWED TO A
DESTINATION IN THOSE FOREIGN WATERS, EITHER AT THE PORT OF ENTRY OR TO
ANOTHER POINT IN THE WATERS OF THE COUNTRY OF OFFLOADING. THE OPERATION
IS REVERSED FOR THE RETURN VOYAGE. HEARINGS ON H.R. 155 BEFORE A
SUBCOMM. OF THE HOUSE COMM. ON MERCHANT MARINE AND FISHERIES, 92D CONG.
1ST SESS. 93, 106, 1971; SEE, ALSO, SACRAMENTO-YOLO PORT DISTRICT,
PETITION, 341 I.C.C. 105, 112 (1972).
THE SPECIALLY DESIGNED BARGES OR LIGHTERS ARE ABOUT 60 FEET LONG, 30
FEET WIDE AND 13 FEET HIGH; THEY ARE SHALLOW DRAFT UNPOWERED WATERCRAFT
CLASSED BY THE AMERICAN BUREAU OF SHIPPING FOR RIVER, BAY, AND SOUND
SERVICE. SEE SECTION 25 OF THE MERCHANT MARINE ACT, 1920, AS AMENDED,
46 U.S.C. 881 (1970). THEY ACCEPT ALL CARGOES: INDUSTRIAL OR
AGRICULTURAL OR RAW MATERIALS; AND THE CARGOES CAN BE LARGE-VOLUME, LOW
CAPITAL INVESTMENT CARGOES OR SMALL-VOLUME HIGH CAPITAL INVESTMENT
CARGOES.
WE UNDERSTAND THAT THE ACRONYM "FLASH" MEANS "FLOAT ON/FLOAT OFF
FEEDER LASH VESSEL". IT IS A NEW DEVELOPMENT IN THE HANDLING OF CARGO
THROUGH INTERMODAL SYSTEMS. A FLASH UNIT IS A FLOATING PLATFORM WITH
BALLAST TANKS EQUIPPED WITH A RAKED BOW TO FACILITATE TOWING. WHEN IT
IS READY FOR LOADING, THE TANKS ARE FLOODED AND THE ENTIRE VESSEL IS
LOWERED IN THE WATER. GATES AT THE STERN ARE OPENED AND THE LASH BARGES
ARE FLOATED INSIDE. THE BALLAST IS EVACUATED AND THE FLASH UNIT RISES
IN THE WATER. THE LASH BARGES THEN REST ABOARD THE PLATFORM, WHICH IS
TOWED BY AN OCEAN-GOING TUG, PRESUMABLY A FOREIGN-FLAG VESSEL.
CENTRAL GULF LINES, INC. (CENTRAL GULF) OPERATES A US-FLAG LASH
SERVICE TO SOUTHEAST ASIA. THE FACTS ABOUT THIS SERVICE AS IT RELATES
TO DELIVERIES TO CHITTAGONG ARE RECITED IN THE GENERAL COUNSEL'S OPINION
AND IN THE ASSISTANT SECRETARY'S LETTER; THEY ARE SUMMARIZED BELOW.
CENTRAL GULF GUARANTEES DIRECT DELIVERY TO CHITTAGONG, BUT ITS MOTHER
SHIPS, WHICH HAVE AN OVERALL LENGTH OF 893 FEET AND A DESIGN DRAFT OF
OVER 40 FEET, CANNOT NAVIGATE THE KARNAPHULI RIVER ON WHICH CHITTAGONG
IS LOCATED. THE BAR AT THE MOUTH OF THE KARNAPHULI VARIES FROM A LOW OF
21 FEET IN LOW WATER SEASON (FEBRUARY) TO A HIGH OF 30 FEET (JULY AND
AUGUST). ADDITIONALLY, ONLY VESSELS UP TO 580 FEET IN LENGTH CAN
NAVIGATE THE RIVER. THUS, CENTRAL GULF'S VESSELS ARE FORCED EITHER TO
UTILIZE THE OPEN SEA ANCHORAGE OFF THE MOUTH OF THE RIVER OR TO UNLOAD
THEIR BARGES AT THE NEAREST SAFE, PROTECTED ANCHORAGE AND TOW THE BARGES
TO CHITTAGONG.
THE CARRIER STATES THAT THIS OPEN SEA ANCHORAGE IS NOT SUFFICIENTLY
SAFE FOR THE DISCHARGE OF LASH BARGES, ESPECIALLY DURING THE MONSOON
SEASON. THE NEAREST DEEPWATER PROTECTED ANCHORAGE IS THE PORT OF
KYAUKPYU, BURMA, APPROXIMATELY 200 MILES FROM CHITTAGONG. CENTRAL GULF
PLANS TO UNLOAD THE BARGES FROM ITS MOTHER SHIPS THERE AND TOW THE
BARGES TO CHITTAGONG.
LASH BARGES ARE CERTIFIED ONLY FOR RIVERS, BAYS, AND SOUNDS, AND ARE
NOT OCEANWORTHY VESSELS. TO TOW THEM THEY MUST BE JOINED TOGETHER
RIGIDLY AND FITTED WITH A FALSE BOW, AND THERE IS NO FEASIBLE WAY TO DO
THIS AT SEA. IT ALSO WOULD BE IMPRUDENT TO TOW THEM IN THE OPEN SEA FOR
ANY DISTANCE, ESPECIALLY FOR A 200-MILE VOYAGE IN THE BAY OF BENGAL
DURING MONSOON WEATHER. TO OVERCOME THESE OBSTACLES, CENTRAL GULF PLANS
TO MOVE THE BARGES IN ITS FLASH UNITS.
CENTRAL GULF RECENTLY HAS TAKEN DELIVERY OF FOUR FLASH UNITS WHICH
WERE BUILT IN JAPAN AND DOCUMENTED UNDER FOREIGN FLAG. THREE OF THESE
UNITS, WITH A CAPACITY OF EIGHT LASH BARGES EACH, ARE CURRENTLY EMPLOYED
IN THE SINGAPORE REGION. A FLASH UNIT IS A VESSEL, SINCE THE WORD
"VESSEL" INCLUDES EVERY DESCRIPTION OF WATERCRAFT OR OTHER ARTIFICIAL
CONTRIVANCE USED, OR CAPABLE OF BEING USED, AS A MEANS OF TRANSPORTATION
ON WATER. SEE 1 U.S.C. 3 (1970).
CHITTAGONG AND OTHER PORTS IN THAT AREA ARE SERVED BY SEVERAL U.
S.-FLAG OPERATORS, OTHER THAN CENTRAL GULF, WHICH PROVIDE DIRECT SERVICE
TO THE IMMEDIATE PORT AREA ENTIRELY ABOARD U. S.-FLAG BREAKBULK VESSELS.
IN MOST INSTANCES, HOWEVER, THEY ANCHOR THEIR VESSELS IN THE ROADS AND
LIGHTER SOME OR ALL OF THEIR CARGO ON FOREIGN-FLAG SHALLOW DRAFT
VESSELS, BEFORE THEY ARE ABLE TO CROSS THE RIVER BAR.
THE GENERAL COUNSEL OF THE MARITIME ADMINISTRATION TAKES THE POSITION
THAT THE SHIPPING AGENCIES MAY USE CENTRAL GULF'S SERVICES BECAUSE (1)
ITS U. S.-FLAG MOTHER SHIPS DELIVER THE CARGO TO THE NEAREST LOCATION
PRACTICAL FOR DISCHARGE OF THOSE VESSELS BECAUSE NO U. S.-FLAG SERVICES
ARE AVAILABLE TO COMPLETE THE MOVEMENT, (2) THE FOREIGN-FLAG PORTION OF
THE TRANSPORTATION IS DE MINIMIS IN REGARD TO THE OVERALL VOYAGE, (3)
CENTRAL GULF'S COMPETITORS MUST ALSO USE FOREIGN-FLAG LIGHTERAGE
SERVICES, ALTHOUGH THEIR NEAREST SAFE ANCHORAGES ARE LESS DISTANT AND
(4) A REQUIREMENT OF U. S.-FLAG TOWAGE FROM THE NEAREST SAFE ANCHORAGE,
WHERE SUCH IS UNAVAILABLE, WOULD FORECLOSE MUCH OF THIS TRADE TO THE U.
S. OPERATORS IN CONTRAVENTION OF THE LEGISLATIVE PURPOSE OF THE 1954
CARGO PREFERENCE LAW.
WE DO NOT BELIEVE THAT THESE REASONS JUSTIFY AN EXCEPTION HERE TO THE
PROVISIONS OF THE 1954 CARGO PREFERENCE LAW.
THE 1954 CARGO PREFERENCE LAW, AS AMENDED, READS IN PERTINENT PART:
"WHENEVER THE UNITED STATES SHALL PROCURE, CONTRACT FOR, OR OTHERWISE
OBTAIN FOR ITS OWN ACCOUNT, OR SHALL FURNISH TO OR FOR THE ACCOUNT OF
ANY FOREIGN NATION WITHOUT PROVISION FOR REIMBURSEMENT, ANY EQUIPMENT,
MATERIALS, OR COMMODITIES, WITHIN OR WITHOUT THE UNITED STATES, OR SHALL
ADVANCE FUNDS OR CREDITS OR GUARANTEE THE CONVERTIBILITY OF FOREIGN
CURRENCIES IN CONNECTION WITH THE FURNISHING OF SUCH EQUIPMENT,
MATERIALS, OR COMMODITIES, THE APPROPRIATE AGENCY OR AGENCIES SHALL TAKE
SUCH STEPS AS MAY BE NECESSARY AND PRACTICABLE TO ASSURE THAT AT LEAST
50 PER CENTUM OF THE GROSS TONNAGE OF SUCH EQUIPMENT, MATERIALS, OR
COMMODITIES (COMPUTED SEPARATELY FOR DRY BULK CARRIERS, DRY CARGO
LINERS, AND TANKERS), WHICH MAY BE TRANSPORTED ON OCEAN VESSELS SHALL BE
TRANSPORTED ON PRIVATELY OWNED UNITED STATES-FLAG COMMERCIAL VESSELS, TO
THE EXTENT SUCH VESSELS ARE AVAILABLE AT FAIR AND REASONABLE RATES FOR
UNITED STATES-FLAG COMMERCIAL VESSELS, IN SUCH MANNER AS WILL INSURE A
FAIR AND REASONABLE PARTICIPATION OF UNITED STATES-FLAG COMMERCIAL
VESSELS IN SUCH CARGOES BY GEOGRAPHIC AREAS: PROVIDED, THAT THE
PROVISIONS OF THIS SUBSECTION MAY BE WAIVED WHENEVER THE CONGRESS BY
CONCURRENT RESOLUTION OR OTHERWISE, OR THE PRESIDENT OF THE UNITED
STATES OR THE SECRETARY OF DEFENSE DECLARES THAT AN EMERGENCY EXISTS
JUSTIFYING A TEMPORARY WAIVER OF THE PROVISIONS OF THIS PARAGRAPH AND SO
NOTIFIES THE APPROPRIATE AGENCY OR AGENCIES: AND PROVIDED FURTHER, THAT
THE PROVISIONS OF THIS SUBSECTION SHALL NOT APPLY TO CARGOES CARRIED IN
THE VESSELS OF THE PANAMA CANAL COMPANY. NOTHING HEREIN SHALL REPEAL OR
OTHERWISE MODIFY THE PROVISIONS OF SECTION 1241-1 OF THIS TITLE. FOR
PURPOSES OF THIS SECTION, THE TERM 'PRIVATELY OWNED UNITED STATES-FLAG
COMMERCIAL VESSELS' SHALL NOT BE DEEMED TO INCLUDE ANY VESSEL WHICH,
SUBSEQUENT TO SEPTEMBER 21, 1961, SHALL HAVE BEEN EITHER (A) BUILT
OUTSIDE THE UNITED STATES, (B) REBUILT OUTSIDE THE UNITED STATES, OR (C)
DOCUMENTED UNDER ANY FOREIGN REGISTRY, UNTIL SUCH VESSEL SHALL HAVE BEEN
DOCUMENTED UNDER THE LAWS OF THE UNITED STATES FOR A PERIOD OF THREE
YEARS ***."
IT SEEMS UNQUESTIONED THAT THE BASIC PURPOSE OF CARGO PREFERENCE
LEGISLATION IS TO ASSURE TO PRIVATELY OWNED UNITED STATES MERCHANT-FLAG
VESSELS A SUBSTANTIAL PORTION OF THE WATERBORNE EXPORT AND IMPORT
FOREIGN COMMERCE WHICH THE CONGRESS HAS PROCLAIMED IN REPEATED STATUTES
AS NECESSARY TO THE MAINTENANCE OF AN ADEQUATE MERCHANT FLEET. S. REP.
NO. 1584, 83D CONG., 2D SESS. 1 (1954). SEE, ALSO, THE DECLARATION OF
POLICY CONCERNING THE DEVELOPMENT AND MAINTENANCE OF THE AMERICAN
MERCHANT MARINE IN SECTION 101 OF THE MERCHANT MARINE ACT, 1936, AS
AMENDED, 46 U.S.C. 1101 (1970).
THE SPECIFIC PURPOSE OF CARGO PREFERENCE LEGISLATION WAS OUTLINED IN
PRESIDENT KENNEDY'S PRESIDENTIAL DIRECTIVE, APRIL 1962, REGARDING CARGO
PREFERENCE; IT READS IN PART:
"THESE STATUTES (INCLUDING, BUT NOT LIMITED TO, SEC. 901(B) OF THE
MERCHANT MARINE ACT, 1936 (46 U.S.C. 1241(B) AND PUBLIC RESOLUTION 17,
73D CONG. (15 U.S.C. 616A)), ARE DESIGNED TO INSURE THAT U. S.
GOVERNMENT-GENERATED CARGOES MOVE IN SUBSTANTIAL VOLUME ON AMERICAN-FLAG
VESSELS. THIS POLICY, WHICH IS DIRECTED TO GOVERNMENT-GENERATED CARGOES
AND WHICH DOES NOT CONTROL COMMERCIAL MOVEMENTS OF EXPORT-IMPORT
CARGOES, IS AN IMPORTANT FACTOR IN MAINTAINING THE MERCHANT FLEET
NECESSARY TO MEET OUR NATIONAL GOALS AND IS IN ACCORDANCE WITH THE
GENERAL PRACTICE OF OTHER MARITIME NATIONS WHO MOVE THE VAST MAJORITY OF
THEIR GOVERNMENT SHIPMENTS IN VESSELS OF THEIR OWN FLAG."
"WHILE THE INDIVIDUAL GOVERNMENT AGENCIES' ADMINISTRATION OF THE
CARGO PREFERENCE STATUTES HAS BEEN GENERALLY SATISFACTORY, THE LAWS'
IMPLEMENTATION HAS FREQUENTLY RUN MORE NEARLY TO THE MINIMUM RATHER THAN
THE MAXIMUM. IT IS, THEREFORE, EXTREMELY IMPORTANT THAT THE STATUTES BE
IMPLEMENTED IN A MANNER DESIGNED TO ACHIEVE FULLY THEIR PURPOSE."
S. REP. NO. 2286, 87TH CONG., 2D SESS. 43, 44 (1962).
AND THE AIM OF THE 1954 CARGO PREFERENCE LAW WAS TO CODIFY AND
BROADEN EXISTING LAW, NOT TO DEROGATE FROM IT. 41 OP. ATTY. GEN. 192,
196 (1954); 42 OP. ATTY. GEN. NO. 14, PAGE 7 (1963). THUS, THE ACT
MUST BE STRICTLY CONSTRUED AND THE EXISTENCE OF SPECIAL CIRCUMSTANCES
CANNOT BE USED TO CIRCUMVENT OR EVADE THE CARGO PREFERENCE LAWS.
FOR EXAMPLE, IN B-155185, NOVEMBER 17, 1969, WE SAID THAT WHETHER
URES NORMALLY MOVES IN COMMERCIAL CHANNELS ALREADY BAGGED, IN BULK, OR
IN EITHER FORM, THE CARGO PREFERENCE LAW MAY NOT BE AVOIDED THROUGH THE
"SIMPLE DEVICE" OF EITHER THE BUYER OR SELLER CHOOSING WHERE, UREA, THE
ESSENTIAL ITEM BEING PROCURED, IS TO BE PACKAGED.
IN 39 COMP. GEN. 758 (1960) WE HELD THAT THE LAW COULD NOT PROPERLY
BE CIRCUMVENTED THROUGH THE PURCHASE OF GOODS AT DESTINATION RATHER THAN
AT THE POINT OF ORIGIN OF THE SAME GOODS TO BE MOVED BY OCEAN FREIGHT.
COMPARE, ALSO, 49 COMP. GEN. 755 (1970), IN WHICH WE SAID THAT WHERE
SERVICE IS AVAILABLE IN UNITED STATES VESSELS FOR THE ENTIRE DISTANCE
BETWEEN PORTS OF ORIGIN IN THE UNITED STATES AND THE DESTINATION PORT
OVERSEAS, TO PERMIT THE TRANSPORTATION BY SEA OF CONTAINERIZED MILITARY
SUPPLIES IN A U. S.-FLAG VESSEL FOR THE MAJOR PART OF A VOYAGE AND IN A
FOREIGN-FLAG FEEDER VESSEL FOR A MINOR PART OF THE VOYAGE WOULD VIOLATE
THE PROHIBITION IN THE 1904 CARGO PREFERENCE ACT, 10 U.S.C. 2631 (1970).
THUS, THE SPECIAL CIRCUMSTANCE THAT THE GEOGRAPHICAL CONFIGURATION OF
THE PORT SERVING CHITTAGONG PRECLUDES NORMAL LASH UNLOADING OPERATIONS
DOES NOT JUSTIFY USE OF A FOREIGN-FLAG FLASH UNIT FOR ANY PART OF THE
VOYAGE WHEN PORT-TO-PORT BREAKBULK SERVICE IS AVAILABLE ON PRIVATELY
OWNED UNITED STATES-FLAG COMMERCIAL OCEAN VESSELS. THAT THESE VESSELS
ANCHOR IN THE ROADS AND USE FOREIGN-FLAG SHALLOW DRAFT VESSELS TO
LIGHTER SOME OR ALL OF THEIR CARGO TO THE SHORE SEEMS IMMATERIAL. IN
CONTRAST TO BARGE OPERATIONS, THE TERM "LIGHTER" REFERS TO A SHORT HAUL,
GENERALLY IN CONNECTION WITH THE LOADING OR UNLOADING OPERATIONS OF
VESSELS IN HARBORS. DE KERCHOVE'S INTERNATIONAL MARITIME DICTIONARY,
2ND ED. 1961. AND IN SOME TRADES IT IS CUSTOMARILY NECESSARY FOR
VESSELS TO LIGHTER THE GOODS FROM OR TO SHORE. OCEAN TRANSPORTATION,
MCDOWELL AND GIBBS (1954), PAGE 387. INDEED, THE FOREIGN-FLAG LIGHTERS
MOST PROBABLY ARE REQUIRED BY THE FOREIGN NATIONS' CABOTAGE LAWS.
WE NOTE THAT UNDER THE ACT OF SEPTEMBER 21, 1961, PUB. L. NO.
87-266, 75 STAT. 565, WHICH IS CODIFIED AS THE SECOND PROVISO IN THE
1954 CARGO PREFERENCE LAW, CENTRAL GULF COULD QUALIFY THE FOREIGN-FLAG
FLASH UNITS AS PRIVATELY OWNED UNITED STATES-FLAG COMMERCIAL VESSELS
ENTITLED TO A PREFERENCE BY DOCUMENTING THEM UNDER THE LAWS OF THE
UNITED STATES FOR A PERIOD OF THREE YEARS.
A DECISION THAT CENTRAL GULF CANNOT USE THE FOREIGN-FLAG FLASH SYSTEM
WITH ITS LASH OPERATIONS INTO CHITTAGONG WILL NOT PREVENT IT FROM
COMPETING FOR COMMERCIAL CARGOES DESTINED TO THAT PORT; NOR WILL IT
PREVENT IT FROM PARTICIPATING IN THE SHIPMENT OF GOVERNMENT-SPONSORED
CARGOES TO CHITTAGONG ONCE THE 50 PERCENT REQUIREMENT IN THE 1954 CARGO
PREFERENCE LAW FOR SHIPMENT IN UNITED STATES-FLAG VESSELS IS MET AND
PROVIDED THAT THE AGENCY CONCERNED, IN THE EXERCISE OF ITS
ADMINISTRATIVE DISCRETION, DECIDES TO USE CENTRAL GULF'S LASH OPERATIONS
TO SHIP THE REMAINING 50 PERCENT.
CONGRESS HAS DEMONSTRATED FLEXIBILITY IN AMENDING THE CARGO
PREFERENCE LAWS TO ACCOMMODATE INNOVATIVE DEVELOPMENTS IN INTERMODAL
SHIPPING SYSTEMS. SEE THE ACT OF SEPTEMBER 21, 1965, PUB. L. 89-194, 79
STAT. 823, ACT OF AUGUST 11, 1968, PUB. L. 90-474, 82 STAT. 700, AND ACT
OF NOVEMBER 23, 1971, PUB. L. 92-163, 85 STAT. 486, ALL OF WHICH AMENDED
SECTION 27 OF THE MERCHANT MARINE ACT, 1920, 46 U.S.C. 883, COMMONLY
CALLED THE JONES ACT (ONE OF OUR CABOTAGE LAWS). THESE AMENDATORY LAWS
PERMIT THE SECRETARY OF THE TREASURY TO EXTEND RECIPROCAL PRIVILEGES TO
FOREIGN-FLAG VESSELS FOR THE CARRIAGE OF EMPTY CONTAINERS AND EMPTY LASH
BARGES AND FOR THE TRANSFER OF CARGOES BETWEEN LASH BARGES IN THE UNITED
STATES COASTWISE TRADE, SO LONG AS THE CONTAINERS OR BARGES ARE OWNED OR
LEASED BY THE OWNER OR OPERATOR OF THE FOREIGN-FLAG VESSELS AND ARE
BEING TRANSPORTED FOR USE IN THE CARRIAGE OF CARGO IN FOREIGN TRADE.
HEARINGS ON H.R. 155, BEFORE A SUBCOMM. OF THE SENATE COMMITTEE ON
COMMERCE, 92D CONG., 1ST SESS. (1971). THUS, IT IS POSSIBLE THAT THE
CONGRESS MAY BE RECEPTIVE TO GRANTING A SIMILAR RECIPROCAL EXCEPTION TO
THE 1954 CARGO PREFERENCE LAW WHICH WOULD PERMIT AMERICAN LASH OPERATORS
TO USE A FOREIGN-FLAG FLASH SYSTEM WHERE GEOGRAPHICAL PORT CONDITIONS
ARE SIMILAR TO THOSE AT CHITTAGONG.
IN THESE CIRCUMSTANCES WE BELIEVE THAT THE CONTEMPLATED USE OF
CENTRAL GULF'S LASH SERVICE AS PRESENTLY CONSTITUTED TO DELIVER
GOVERNMENT-SPONSORED CARGOES TO THE PORT OF CHITTAGONG IN BANGLADESH
WOULD CONTRAVENE THE 1954 CARGO PREFERENCE ACT.
B-184888, FEB 24, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
GAO WILL NOT PURSUE PROTEST WHERE ISSUES BECOME ACADEMIC BY
PROTESTER'S WITHDRAWAL OF BID.
HUGO NEU STEEL PRODUCTS, INC.:
ON JULY 16, 1975, THE MARITIME ADMINISTRATION (MARAD) ISSUED
INVITATION FOR BIDS NO. PD-X-998 FOR THE SALE OF VARIOUS TYPES OF
VESSELS, ALL OF WHICH THE SECRETARY OF COMMERCE HAD DECLARED SURPLUS
NATIONAL DEFENSE RESERVE FLEET VESSELS.
THE PROTEST INVOLVES TWO C2-S-B1 TYPE VESSELS, NAMELY THE S.S.
ROLETTE (AKA-99) AND THE S.S. DIPHDA (AKA-59), OFFERED FOR SALE UNDER
THE ABOVE SOLICITATION. HUGO NEU STEEL PRODUCTS, INC. (HUGO NEU), THE
PROTESTER, WAS THE HIGH BIDDER FOR BOTH VESSELS, OFFERING $171,180 FOR
THE S.S. ROLETTE AND $141,180 FOR THE S.S. DIPHDA. AFTER REVIEW OF THE
BIDS RECEIVED, MARAD REJECTED ALL BIDS FOR THE VESSELS IN QUESTION
BECAUSE THEY WERE UNREASONABLY LOW IN LIGHT OF MARAD'S DETERMINED
MINIMUM ACCEPTABLE PRICE PER TON OF $35 AS MULTIPLIED BY THE DETERMINED
WEIGHT OF EACH VESSEL, 5,600 TONS.
HUGO NEU PROTESTED THE REJECTION OF ITS BID AND REQUESTED THAT ITS
BID BE REINSTATED AND AWARD MADE UNDER PD-X-998. HOWEVER, HUGO NEU
SUBSEQUENTLY CITED SUBSTANTIAL DOWNWARD MARKET FLUCTUATIONS IN THE PRICE
OF SCRAP METAL AND WITHDREW ITS BID. NOTWITHSTANDING THE WITHDRAWAL OF
ITS BID, HUGO NEU SEEKS A DECISION AS TO WHETHER MARAD "*** WAS RIGHT OR
WRONG IN THEIR ACTIONS AND ATTITUDE."
SINCE HUGO NEU NO LONGER DESIRES THE SHIPS AT THE PRICES IT
ORIGINALLY BID, IT APPEARS THAT THE ISSUES RAISED BY THE PROTESTER
RESPECTING ALLEGED DEFECTS IN INVITATION FOR BIDS NO. PD-X-998 HAVE BEEN
RENDERED ACADEMIC. ACCORDINGLY, OUR OFFICE WILL NOT PURSUE THE MATTER
FURTHER. COMPARE CENTRAL DATA PROCESSING, INC., B-183306, AUGUST 7,
1975, 75-2 CPD 89; MATANUSKA TELEPHONE ASSOCIATION, INC.; INTERIOR
TELEPHONE COMPANY, B-179500, JULY 25, 1974, 74-2 CPD 55; PACIFIC
ARCHITECTS AND ENGINEERS, INC., B-179633, FEBRUARY 12, 1975, 75-1 CPD
87.
B-184990, FEB 20, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
1. AIR FORCE DETAILED GS-4 EMPLOYEE TO GS-5 POSITION FOR OVER 1 YEAR
BEGINNING JULY 1, 1970, WITHOUT OBTAINING CIVIL SERVICE COMMISSION'S
PRIOR APPROVAL OF EXTENSION BEYOND 120 DAYS. AGENCY'S DISCRETIONARY
AUTHORITY TO RETAIN EMPLOYEE ON DETAIL CONTINUES NO LONGER THAN 120
DAYS, AFTER WHICH AGENCY MUST EITHER HAVE OBTAINED COMMISSION APPROVAL
OR GRANT EMPLOYEE TEMPORARY PROMOTION. SINCE AGENCY FAILED TO OBTAIN
APPROVAL, EMPLOYEE IS ENTITLED TO RETROACTIVE TEMPORARY PROMOTION FROM
121ST DAY OF DETAIL TO ITS TERMINATION.
2. DECISION B-183086, DECEMBER 5, 1975, 55 COMP. GEN. ___, ENTITLING
OTHERWISE QUALIFIED EMPLOYEE TO TEMPORARY PROMOTION ON 121ST DAY OF
DETAIL TO HIGHER GRADE POSITION WHEN PRIOR APPROVAL OF EXTENSION OF
DETAIL BEYOND 120 DAYS HAS NOT BEEN OBTAINED FROM CIVIL SERVICE
COMMISSION WILL BE APPLIED RETROSPECTIVELY TO EXTENT PERMITTED BY 6-YEAR
STATUTE OF LIMITATIONS APPLICABLE TO GENERAL ACCOUNTING OFFICE.
MARIE GRANT - EXTENDED DETAIL TO HIGHER GRADE POSITION:
THIS DECISION IS RENDERED IN RESPONSE TO A REQUEST TO RESOLVE A CLAIM
FOR BACKPAY OF MS. MARIE GRANT.
MS. GRANT OCCUPIED A GS-4 ACCOUNTING TECHNICIAN POSITION AT KELLY AIR
FORCE BASE, TEXAS, ON JULY 1, 1970. ON THAT DATE SHE WAS DETAILED TO A
GS-5 ACCOUNTING TECHNICIAN POSITION. THIS DETAIL CONTINUED AT LEAST
UNTIL JULY 27, 1971, WHEN HER AGENCY BEGAN A REORGANIZATION PROGRAM
WHICH WAS CARRIED OUT UNDER REDUCTION-IN-FORCE (RIF) PROCEDURES. A GS-5
EMPLOYEE WHO WAS REACHED THROUGH THE RIF WAS ASSIGNED TO THE GS-5
POSITION MS. GRANT WAS OCCUPYING. THE GS-4 POSITION TO WHICH SHE WAS
PERMANENTLY ASSIGNED WAS IDENTIFIED AS SURPLUS AND WAS CONSEQUENTLY
ABOLISHED AND MS. GRANT WAS REASSIGNED TO ANOTHER GS-4 POSITION. SHE
HAS NOW FILED A CLAIM FOR BACKPAY REPRESENTING THE DIFFERENCE IN PAY
BETWEEN GRADE GS-4 AND GRADE GS-5 FOR THE PERIOD SHE WAS DETAILED TO THE
HIGHER GRADE POSITION.
RECENTLY WE HAD OCCASION TO CONSIDER A SIMILAR CASE, B-183086,
DECEMBER 5, 1975, 55 COMP. GEN. ___, INVOLVING A BACKPAY CLAIM OF AN
EMPLOYEE FOR PERFORMING DUTIES OF A HIGHER GRADE POSITION TO WHICH HE
WAS OFFICIALLY DETAILED FOR AN EXTENDED PERIOD. WE HELD THERE, THAT
EMPLOYEE DETAIL REGULATIONS CONTAINED IN CHAPTER 300 OF THE FEDERAL
PERSONNEL MANUAL MUST BE CONSTRUED TO THE EFFECT THAT AN AGENCY'S
DISCRETIONARY AUTHORITY TO RETAIN AN EMPLOYEE ON DETAIL TO A HIGHER
GRADE POSITION CONTINUES NO LONGER THAN 120 DAYS AND THAT THE AGENCY
MUST EITHER HAVE SOUGHT PRIOR APPROVAL OF THE COMMISSION FOR AN
EXTENSION OF THE DETAIL OR TEMPORARILY PROMOTE THE DETAILED EMPLOYEE AT
THE END OF THE SPECIFIED TIME PERIOD, IF HE IS OTHERWISE QUALIFIED.
THEREFORE, WE HELD IN B-183086, SUPRA, THAT WHERE AN AGENCY HAS FAILED
TO SEEK PRIOR APPROVAL OF THE COMMISSION TO EXTEND AN EMPLOYEE'S DETAIL
PERIOD IN A HIGHER GRADE POSITION PAST 120 DAYS, IT HAS A MANDATORY DUTY
TO AWARD THE EMPLOYEE A TEMPORARY PROMOTION IF HE CONTINUES TO PERFORM
THE HIGHER GRADE POSITION AND IS OTHERWISE QUALIFIED FOR THE PROMOTION.
BECAUSE OUR DECISION WAS BASED ON A CLARIFICATION RATHER THAN A
SUBSTANTIVE AMENDMENT TO CIVIL SERVICE COMMISSION REGULATIONS GOVERNING
EMPLOYEE DETAILS, THE DECISION WILL BE GIVEN RETROSPECTIVE AS WELL AS
PROSPECTIVE APPLICATION. ACCORDINGLY, THE TEMPORARY PROMOTION RULE FOR
DETAILS OVER 120 DAYS IS TO BE APPLIED TO ANY CLAIM CONCERNING THIS
MATTER, PROVIDED THE DETAIL REGULATIONS IN CHAPTER 300, FEDERAL
PERSONNEL MANUAL, IN EFFECT AT THE TIME OF THE DETAIL IS SUBSTANTIALLY
THE SAME AS IN EFFECT AT THE TIME OF THE CIVIL SERVICE COMMISSION
RULING. ALSO, THE CLAIM MUST BE FILED, WITHIN THE 6-YEAR PERIOD
APPLICABLE TO CLAIMS COGNIZABLE BY OUR OFFICE AS SET FORTH IN 31 U.S.C.
SEC. 71A (SUPP. IV, 1974). BACKPAY CLAIMS INVOLVING EXTENDED DETAILS
THAT WE HAVE PREVIOUSLY CONSIDERED AND DISALLOWED, MAY BE RESUBMITTED
FOR RECONSIDERATION BY THIS OFFICE UNDER THE CONDITIONS STATED IN THIS
DECISION.
IN THE INSTANT CASE THE AGENCY FAILED TO SEEK APPROVAL OF MS.
GRANT'S DETAIL PRIOR TO THE EXPIRATION OF THE AFOREMENTIONED TIME LIMIT.
THEREFORE, SHE BECAME ENTITLED TO A TEMPORARY PROMOTION TO GRADE GS-5
ON OCTOBER 29, 1970, 121 DAYS AFTER HER DETAIL BEGAN, SINCE SHE
SATISFIED THE TIME-IN-GRADE RESTRICTIONS SET FORTH IN 5 C.F.R. CHAPTER
300, SUBPART F (1969) AND THE DETAIL REGULATIONS WERE SUBSTANTIALLY THE
SAME AS THOSE INVOLVED IN B-183086, SUPRA. HER ENTITLEMENT TO THE
TEMPORARY PROMOTION CONTINUED UNTIL JULY 27, 1971, OR THE DATE WHEN HER
DETAIL WAS OFFICIALLY TERMINATED, WHICHEVER IS LATER, AND SHE BEGAN TO
PERFORM THE DUTIES OF A GRADE GS-4 POSITION.
PURSUANT TO THE FOREGOING, HER AGENCY SHOULD GRANT HER A RETROACTIVE
TEMPORARY PROMOTION TO GRADE GS-5 FOR THE STATED PERIOD TOGETHER WITH
BACKPAY AND MAKE APPROPRIATE RECORD CORRECTIONS AS AUTHORIZED UNDER
PROVISIONS OF 5 U.S.C. SEC. 5596, SUPRA, AND APPLICABLE IMPLEMENTING
REGULATIONS.
B-183583, FEB 2, 1976
HEADNOTES-UNAVAILABLE
DIGEST:
EMPLOYEE WITH WIFE AND THREE CHILDREN CLAIMED $1,660 FOR EXPENSES OF
ROOM AND BOARD INCURRED WHILE OCCUPYING TEMPORARY QUARTERS OWNED BY
RELATIVE INCIDENT TO PERMANENT CHANGE OF OFFICIAL STATION. AMOUNT PAID
TO RELATIVE WAS BASED ON RATES CHARGED AT LOCAL COMMERCIAL
ESTABLISHMENT. EMPLOYEE IS ENTITLED TO REIMBURSEMENT OF $775 SINCE
EMPLOYING AGENCY DETERMINED THAT AMOUNT TO BE REASONABLE FOR ROOM AND
BOARD UNDER THE CIRCUMSTANCES AND ONLY THE REASONABLE VALUE OF EXPENSES
MAY BE REIMBURSED.
MORGAN R. DAVIS - SUBSISTENCE EXPENSES AT TEMPORARY QUARTERS OWNED BY
RELATIVE:
THIS ACTION IS IN RESPONSE TO THE LETTER OF CLYDE M. WEBBER, NATIONAL
PRESIDENT OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, DATED
MARCH 31, 1975, ON BEHALF OF MORGAN R. DAVIS, CLAIMANT, REQUESTING
RECONSIDERATION OF THE CLAIM SETTLEMENT OF OUR TRANSPORTATION AND CLAIMS
DIVISION (TCD), DATED OCTOBER 31, 1974, DISALLOWING IN PART MR. DAVIS'
CLAIM FOR REIMBURSEMENT OF TEMPORARY QUARTERS SUBSISTENCE EXPENSES IN
THE AMOUNT OF $1,660.
THE RECORD INDICATES THAT MR. DAVIS, A CIVILIAN EMPLOYEE OF THE
DEPARTMENT OF THE ARMY, HIS WIFE, AND THREE CHILDREN - 7, 10, AND 12
YEARS OF AGE - TOOK UP RESIDENCE AT THE HOME OF HIS MOTHER IN
WILKES-BARRE, PENNSYLVANIA, FOR THE 30-DAY PERIOD FROM SEPTEMBER 10 TO
OCTOBER 9, 1973, INCIDENT TO A TRANSFER OF OFFICIAL DUTY STATION FROM
ZWEIBRUSCKEN, GERMANY, TO TOBYHANNA, PENNSYLVANIA, UNDER AUTHORITY OF
TRAVEL ORDER NO. PDZ-7-30 ISSUED ON JULY 23, 1973. HE CLAIMED $1,050
FOR RENT ($35 PER DAY), INCLUDING UTILITIES, AND $610 FOR MEALS. THE
FINANCE AND ACCOUNTING OFFICER DENIED PAYMENT BECAUSE THE TOTAL AMOUNT
CLAIMED APPEARED TO BE "EXPENSIVE AND MORE THAN A PRUDENT PERSON WOULD
PAY." THE CLAIM WAS FORWARDED TO TCD BY THE U. S. ARMY FINANCE SUPPORT
AGENCY. PURSUANT TO A TCD REQUEST, A DETERMINATION WAS MADE BY
HEADQUARTERS AT TOBYHANNA ARMY DEPOT THAT A REASONABLE AMOUNT FOR THE
30-DAY PERIOD WOULD BE $775, CONSISTING OF $400 FOR QUARTERS AND $375
FOR SUBSISTENCE. ACCORDINGLY, THAT AMOUNT WAS ALLOWED BY THE SETTLEMENT
OF OCTOBER 31, 1974, INSTEAD OF $1,489.50, THE MAXIMUM AMOUNT ALLOWABLE
UNDER PERTINENT REGULATIONS.
PART 5 OF CHAPTER 2, FEDERAL TRAVEL REGULATIONS (FPMR 101-7) (MAY
1973), AUTHORIZES THE PAYMENT OF SUBSISTENCE EXPENSES OF AN EMPLOYEE AND
HIS IMMEDIATE FAMILY WHILE OCCUPYING TEMPORARY QUARTERS IN CONNECTION
WITH A TRANSFER OF OFFICIAL DUTY STATION. REIMBURSEMENT IS ALLOWED FOR
ACTUAL SUBSISTENCE EXPENSES INCURRED PROVIDED THEY ARE INCIDENT TO
OCCUPANCY OF TEMPORARY QUARTERS AND ARE REASONABLE AS TO AMOUNT, AS
PROVIDED IN FTR PARA. 2-5.4A (MAY 1973).
OUR OFFICE HAS FREQUENTLY ALLOWED CLAIMS FOR REIMBURSEMENT OF
EXPENSES FOR TEMPORARY QUARTERS PROVIDED BY A RELATIVE OF THE EMPLOYEE.
CONCERNING THE AMOUNT ALLOWABLE WE STATED THE FOLLOWING IN OUR DECISION
PUBLISHED AT 52 COMP. GEN. 78 (1972):
"WE POINT OUT THAT IN THE PAST WE HAVE ALLOWED REIMBURSEMENT FOR
CHARGES FOR TEMPORARY QUARTERS AND SUBSISTENCE SUPPLIED BY RELATIVES
WHERE THE CHARGES HAVE APPEARED REASONABLE; THAT IS, WHERE THEY HAVE
BEEN CONSIDERABLY LESS THAN MOTEL OR RESTAURANT CHARGES. IT DOES NOT
SEEM REASONABLE OR NECESSARY TO US FOR EMPLOYEES TO AGREE TO PAY
RELATIVES THE SAME AMOUNTS THEY WOULD HAVE TO PAY FOR LODGING IN MOTELS
OR MEALS IN RESTAURANTS OR TO BASE SUCH PAYMENTS TO RELATIVES UPON
MAXIMUM AMOUNTS WHICH ARE REIMBURSABLE UNDER THE REGULATIONS. OF
COURSE, WHAT IS REASONABLE DEPENDS ON THE CIRCUMSTANCES OF EACH CASE.
THE NUMBER OF INDIVIDUALS INVOLVED, WHETHER THE RELATIVE HAD TO HIRE
EXTRA HELP TO PROVIDE LODGING AND MEALS, THE EXTRA WORK PERFORMED BY THE
RELATIVE AND POSSIBLY OTHER FACTORS WOULD BE FOR CONSIDERATION. IN THE
CLAIMS HERE INVOLVED AS WELL AS SIMILAR CLAIMS WE BELIEVE THE EMPLOYEES
SHOULD BE REQUIRED TO SUPPORT THEIR CLAIMS BY FURNISHING SUCH
INFORMATION IN ORDER TO PERMIT DETERMINATIONS OF REASONABLENESS."
MR. DAVIS DOES NOT EXPLAIN HOW THE RENTAL FIGURE OF $35 PER DAY WAS
ARRIVED AT, BUT HE STATES HIS BELIEF THAT IT WAS A REASONABLE RENTAL IN
LIGHT OF THE FACT THAT THE RATE AT A LOCAL MOTEL FOR A FAMILY OF FIVE
WOULD HAVE BEEN $38 PER DAY. IT IS THE RESPONSIBILITY OF THE EMPLOYING
AGENCY, IN THE FIRST INSTANCE, TO INSURE THAT THE EXPENSES CLAIMED ARE
REASONABLE. SINCE THIS IS A QUESTION OF FACT AND BECAUSE THE TOBYHANNA
ARMY DEPOT IS IN A BETTER POSITION AS IT IS MORE FAMILIAR WITH THE
CIRCUMSTANCES PRESENT IN THE LOCAL AREA IN THIS PARTICULAR CASE, WE GIVE
GREAT WEIGHT TO THAT AGENCY'S DETERMINATION AS TO WHAT IS REASONABLE.
B-182135, NOVEMBER 7, 1974.
ALTHOUGH WE HAVE THE RIGHT AND THE DUTY TO MAKE AN INDEPENDENT
EXAMINATION IN EACH CASE SUBMITTED TO US, IN THE ABSENCE OF EVIDENCE
INDICATING THAT THE AGENCY'S DETERMINATION WAS CLEARLY ERRONEOUS,
ARBITRARY OR CAPRICIOUS, WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF
THE AGENCY. MR. DAVIS HAS GIVEN US NO EVIDENCE SHOWING THAT THE
AGENCY'S DETERMINATION WAS CLEARLY ERRONEOUS, ARBITRARY OR CAPRICIOUS.
RATHER, HE MERELY POINTS OUT THAT THE RATE HE PAID TO HIS MOTHER FOR
QUARTERS IN HER HOME WERE SLIGHTLY BELOW THE COMMERCIAL RATE IN THE
AREA, AND NO INDICATION IS GIVEN AS TO HOW THE RATES CHARGED FOR MEALS
WERE DETERMINED. THIS DOES NOT MEET THE STANDARD SET FORTH PREVIOUSLY
IN OUR DECISION AT 52 COMP. GEN. 78 WHEREIN WE STATED THAT RATES PAID TO
RELATIVES ARE NOT REASONABLE UNLESS "CONSIDERABLY LESS THAN MOTEL OR
RESTAURANT CHARGES." IT SHOULD ALSO BE NOTED, AS INDICATED IN THAT
DECISION, THAT THE EMPLOYEES ARE REQUIRED TO SUPPORT THEIR CLAIMS WITH
SUFFICIENT INFORMATION TO PERMIT DETERMINATIONS OF REASONABLENESS. MR.
DAVIS HAS NOT PRESENTED EVIDENCE THAT HIS AGENCY'S DETERMINATION IS
INCORRECT NOR HAS HE GIVEN OUR OFFICE SUFFICIENT INFORMATION TO MAKE AN
INDEPENDENT DETERMINATION. ACCORDINGLY, WE MAY NOT ACCEPT THE
CLAIMANT'S BARE ASSERTION THAT HIS CLAIM WAS REASONABLE AS OVERCOMING
THE AGENCY'S DETERMINATION.
IN HIS LETTER OF MARCH 31, 1975, MR. WEBBER REQUESTED ALLOWANCE OF
THE ADDITIONAL AMOUNTS CLAIMED AND STATED THAT "ACCORDING TO C 8255 OF
THE DOD (DEPARTMENT OF DEFENSE) JOINT TRAVEL REGULATIONS, MR. DAVIS
WOULD BE ENTITLED TO MUCH MORE THAN $26.00 PER DAY." IT SHOULD BE NOTED
THAT 52 COMP. GEN. 78 EMPHASIZED THAT AMOUNTS PAID TO RELATIVES FOR
LODGING AND MEALS SHOULD NOT BE BASED UPON THE MAXIMUM AMOUNTS ALLOWABLE
UNDER THE REGULATIONS BUT UPON WHAT IS CONSIDERED REASONABLE.
ACCORDINGLY, MR. DAVIS' CLAIM FOR ADDITIONAL SUBSISTENCE ALLOWANCE IN
EXCESS OF $775 WAS PROPERLY DENIED, AND THE SETTLEMENT OF OUR
TRANSPORTATION AND CLAIMS DIVISION IS SUSTAINED.
B-163758, AUG 27, 1975
HEADNOTES-UNAVAILABLE
SUBJECT:
TRANSFER OF TRANSPORTATION RATE AUDIT FUNCTION FROM THE GENERAL
ACCOUNTING OFFICE TO THE GENERAL SERVICES ADMINISTRATION
HEADS OF DEPARTMENTS, AGENCIES, AND OTHERS CONCERNED:
THE GENERAL ACCOUNTING OFFICE ACT OF 1974, PUBLIC LAW 93-604 88 STAT.
1960, AMENDS SECTION 322 OF THE TRANSPORTATION ACT OF 1940 (49 U.S.C.
66) BY TRANSFERRING THE TRANSPORTATION RATE AUDIT FUNCTION AND PERSONNEL
FROM THE GENERAL ACCOUNTING OFFICE TO THE GENERAL SERVICES
ADMINISTRATION (GSA). THE TRANSFER WILL BE MADE EFFECTIVE ON OCTOBER
12, 1975.
THIS ACT DOES NOT, HOWEVER, AFFECT THE AUTHORITY OF THE GENERAL
ACCOUNTING OFFICE TO MAKE AUDITS IN ACCORDANCE WITH THE BUDGET AND
ACCOUNTING ACT, 1921, AS AMENDED (31 U.S.C. 41), AND THE ACCOUNTING AND
AUDITING ACT OF 1950, AS AMENDED (31 U.S.C. 65). IT GRANTS TO ANY
CARRIER OR FORWARDER THE RIGHT TO REQUEST THE COMPTROLLER GENERAL TO
REVIEW ACTION ON ITS CLAIM BY GSA. SUCH REQUEST SHALL BE BARRED FOREVER
UNLESS RECEIVED IN THE GENERAL ACCOUNTING OFFICE WITHIN 6 MONTHS (NOT
INCLUDING IN TIME OF WAR) FROM THE DATE THE GSA ACTION WAS TAKEN OR
WITHIN THE PERIODS OF LIMITATION SPECIFIED IN 49 U.S.C. 66, WHICHEVER IS
LATER.
THE TRANSPORTATION RATE AUDIT FUNCTION WILL BE ADMINISTERED BY THE
DEPUTY ASSISTANT COMMISSIONER FOR TRANSPORTATION AUDITS, UNDER THE
DIRECTION OF THE ASSISTANT COMMISSIONER FOR TRANSPORTATION AND PUBLIC
UTILITIES, FEDERAL SUPPLY SERVICE, AND WILL BE LOCATED AT 425 EYE
STREET, NW, WASHINGTON, D. C. THE MAILING ADDRESS TO BE USED ON
CORRESPONDENCE, IN GENERAL, ISSUED ON AND AFTER OCTOBER 12, 1975, WILL
BE:
B-163758, AUG 14, 1975
HEADNOTES-UNAVAILABLE
SUBJECT:
MONETARY LIMITATION ON USE OF COMMERCIAL FORMS AND PROCEDURES TO
PROCURE FREIGHT TRANSPORTATION SERVICES AND ON PAYMENT OF FREIGHT
TRANSPORTATION SERVICES FROM IMPREST FUNDS
TO THE HEADS OF DEPARTMENTS, AGENCIES, AND OTHERS CONCERNED:
THE USE OF COMMERCIAL FORMS AND PROCEDURES TO PROCURE TRANSPORTATION
SERVICES FOR CERTAIN TYPES OF SMALL DOMESTIC SHIPMENTS UNDER THE
PROVISIONS OF 5 GAO 3017, AS AMENDED (4 CFR 52.16), AS WELL AS THE
PAYMENT FOR SUCH SERVICES FROM IMPREST FUNDS, IS SUBJECT TO CERTAIN
RESTRICTIONS, THE MAJOR ONE BEING THAT THE TRANSPORTATION CHARGES
ORDINARILY NOT EXCEED $25 PER SHIPMENT. IT IS BELIEVED THAT GREATER
SAVINGS IN PROCUREMENT PRACTICES AND PROCEDURES AND IN PAPERHANDLING CAN
BE EFFECTED FOR BOTH THE GOVERNMENT AND THE CARRIER INDUSTRY IF THE
MONETARY LIMITATION WERE RAISED.
AUTHORITY IS THEREFORE GRANTED TO THOSE ESTABLISHMENTS THAT UTILIZE
THE DISCRETIONARY AUTHORITY OUTLINED IN 5 GAO 3017, AS AMENDED MAY 6,
1971 (B-163758), AND JANUARY 7, 1974, TO USE COMMERCIAL FORMS AND
PROCEDURES FOR CERTAIN SMALL SHIPMENTS AND TO PAY THE TRANSPORTATION
CHARGES FROM IMPREST FUNDS WHERE THE CHARGES DO NOT EXCEED $100 PER
SHIPMENT AND THE OCCASIONAL EXCEPTION DOES NOT EXCEED THAT SUM BY AN
UNREASONABLE AMOUNT.
IN RAISING THE MONETARY LIMITATION TO $100, HOWEVER, WE BELIEVE IT IN
THE BEST INTERESTS OF THE GOVERNMENT TO INSTITUTE AN ADDITIONAL MEASURE
DESIGNED TO STRENGTHEN ACCOUNTABILITY FOR THESE SHIPMENTS. TO THAT END,
ALL CHARGES FOR TRANSPORTATION SERVICES FURNISHED UNDER THE PROCEDURES
SET FORTH IN 5 GAO 3017, AS AMENDED, MUST HEREAFTER BE BILLED BY AND
PAID TO THE ORIGIN CARRIER OR FORWARDER AND MAY NOT BE WAIVED TO ANY
OTHER CARRIER.
THE EFFICIENCIES AND ECONOMIES TO BE ACHIEVED IN THE USE OF
COMMERCIAL FORMS AND PROCEDURES FOR THESE SMALL SHIPMENTS HAVE BECOME
WELL ESTABLISHED, THUS MAKING UNNECESSARY THE REQUIREMENT IN 5 GAO
3017(1) FOR ADMINISTRATIVE DETERMINATIONS OF SUCH EFFICIENCIES AND
ECONOMIES. AGENCIES THEREFORE NO LONGER NEED SUBMIT COPIES OF
ADMINISTRATIVE AUTHORIZATIONS DEFINING THE CIRCUMSTANCES AND CONDITIONS
UNDER WHICH THE COMMERCIAL FORMS WILL BE USED BUT NEED MERELY NOTIFY THE
TRANSPORTATION AND CLAIMS DIVISION, U. S. GENERAL ACCOUNTING OFFICE, OF
THE ADOPTION (AND ANY SUBSEQUENT CANCELLATION) OF THESE PROCEDURES.
IT IS EMPHASIZED, HOWEVER, THAT THIS USE OF COMMERCIAL FORMS AND
PROCEDURES AND THE PAYMENT FOR THESE SERVICES FROM IMPREST FUNDS, EITHER
IN ADVANCE OR AFTER COMPLETION OF DELIVERY, ARE OPTIONAL AND APPLICABLE
ONLY UPON MUTUAL AGREEMENT BETWEEN THE AGENCY AND THE CARRIER OR
FORWARDER INVOLVED. ALSO, THESE SHIPMENTS REMAIN SUBJECT TO THE TERMS
AND CONDITIONS SET FORTH IN THE STANDARD FORM OF THE U. S. GOVERNMENT
BILL OF LADING (EXCEPT AS TO PREPAYMENT) AND ANY OTHER APPLICABLE
CONTRACT OR AGREEMENT OF THE CARRIER FOR THE TRANSPORTATION OF SHIPMENTS
FOR THE UNITED STATES ON GOVERNMENT BILLS OF LADING. FURTHER, EACH
AGENCY IS HELD ACCOUNTABLE FOR MAINTAINING A SYSTEM OF CONTROL THAT WILL
PRECLUDE THE MAKING OF DUPLICATE PAYMENTS FOR THE SUBJECT TRANSPORTATION
SERVICES.
THIS AUTHORITY SHALL BE APPLICABLE ONLY TO SHIPMENTS MADE IN
ACCORDANCE WITH THOSE LIMITATIONS AND PROCEDURES STATED IN 5 GAO 3017,
AS AMENDED, THAT ARE NOT SUPERSEDED HEREIN.
B-148144, MAY 28, 1975
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
ABRAHAM A. RIBICOFF, UNITED STATES SENATE:
WE ARE WRITING IN RESPONSE TO THE LETTER OF FEBRUARY 20, 1974, FROM
SENATOR SAM J. ERVIN, JR., THEN CHAIRMAN OF THE COMMITTEE ON GOVERNMENT
OPERATIONS AND THE JOINT LETTER OF JULY 23, 1974, FROM SENATOR ERVIN AND
SENATOR LEE METCALF, CHAIRMAN, SUBCOMMITTEE ON REPORTS, ACCOUNTING AND
MANAGEMENT. THOSE LETTERS EXPRESSED CONCERN OVER OUR RECOMMENDED POLICY
ISSUED IN SEPTEMBER 1970, WHICH STATED THAT AFTER DECEMBER 31, 1975,
ONLY CERTIFIED PUBLIC ACCOUNTANTS (CPAS) AND THOSE PUBLIC ACCOUNTANTS
LICENSED BEFORE DECEMBER 31, 1970, SHOULD BE ENGAGED TO MAKE AUDITS OF
FEDERALLY CHARTERED, FINANCED, OR REGULATED PRIVATE ORGANIZATIONS. IN
1972 WE INCLUDED THIS POLICY IN OUR "STANDARDS FOR AUDIT OF GOVERNMENTAL
ORGANIZATIONS, PROGRAMS, ACTIVITIES & FUNCTIONS" AND THEREBY GAVE IT A
BROADER APPLICATION.
IN MAKING OUR RECOMMENDATION ON THIS MATTER, WE WERE NOT UNMINDFUL
THAT WE ARE NOT SPECIFICALLY AUTHORIZED TO PRESCRIBE THE PROFESSIONAL
QUALIFICATIONS FOR PUBLIC ACCOUNTANTS TO DO GOVERNMENT WORK AND THAT OUR
RECOMMENDATION WAS ONLY ADVISORY. THE STANDARDS IN OUR RECOMMENDED
POLICY BECOME MANDATORY ONLY WHEN PRESCRIBED BY A STATUTE OR
INCORPORATED IN AGENCY REGULATIONS, AND THEN ONLY IF FEDERAL FUNDS ARE
INVOLVED. HOWEVER, WE RECOGNIZE THAT OUR RECOMMENDATION IS INFLUENTIAL.
FOR THE PAST FEW MONTHS WE HAVE BEEN RECONSIDERING THE RECOMMENDATION
WE MADE ON THIS SUBJECT. WE HAVE NOW COMPLETED OUR RECONSIDERATION AND
ARE PRESENTING OUR CONCLUSION IN THIS LETTER FOR YOUR INFORMATION. WE
REACHED OUR CONCLUSION ONLY AFTER THE MOST CAREFUL DELIBERATIONS AND
AFTER CONSIDERING A GREAT AMOUNT OF MATERIAL PROVIDED TO US BY THE
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND THE NATIONAL
SOCIETY OF PUBLIC ACCOUNTANTS.
BECAUSE THIS IS AN IMPORTANT MATTER, WE PRESENT BELOW THE MORE
ESSENTIAL FACTS WE CONSIDERED AND THE BASES FOR OUR CONCLUSION.
REASONS FOR GAO'S INVOLVEMENT
OUR STATUTORY RESPONSIBILITIES INCLUDE SURVEILLANCE OVER THE
EXPENDITURE OF FEDERAL FUNDS INCLUDING THOSE MADE AVAILABLE TO STATE AND
LOCAL GOVERNMENTS THROUGH GRANTS AND REVENUE SHARING. OUR
RESPONSIBILITIES FURTHER INCLUDE PROVIDING INFORMATION ON SUCH
EXPENDITURES TO THE CONGRESS.
IN CARRYING OUT THESE RESPONSIBILITIES, WE USE THE WORK OF OTHER
AUDITORS, INCLUDING THAT PERFORMED BY PUBLIC ACCOUNTANTS; THEREFORE WE
HAVE A GREAT INTEREST IN BEING SURE THAT SUCH AUDITORS DO SATISFACTORY
WORK FOR FEDERAL AGENCIES AND FOR STATE AND LOCAL GOVERNMENTS INVOLVED
IN ADMINISTERING FEDERAL PROGRAMS.
BY ISSUING THE STANDARDS CITED ABOVE, WE HOPED TO ENCOURAGE AUDITORS
WHO DO WORK FOR ALL LEVELS OF GOVERNMENT TO PERFORM AUDITS THAT WOULD BE
AS USEFUL AS POSSIBLE IN AIDING CONGRESSIONAL OVERSIGHT OF THE USE OF
FEDERAL FUNDS AND TO INCREASE FEDERAL RELIANCE ON WORK DONE BY OR FOR
STATE AND LOCAL AUDITORS. ACHIEVING SUCH OBJECTIVES REQUIRES A HIGH
LEVEL OF PERFORMANCE BY AUDITORS.
GOVERNMENTAL ENTITIES PROVIDE SOME OF THE MOST DIVERSE AND
CHALLENGING WORK IN THE ACCOUNTING AND AUDITING FIELD. ACCORDINGLY,
GOVERNMENT DEPARTMENTS AND AGENCIES NEED THE BEST AUDIT SKILLS
OBTAINABLE. AUTHORIZING AUDITORS WHO HAVE NOT DEMONSTRATED THAT THEY
POSSESS SUCH SKILLS TO RENDER OPINIONS ON FINANCIAL STATEMENTS WILL NOT
PROVIDE THE PUBLIC WITH THE PROTECTION IT NEEDS.
THE ISSUE
THE FIELD OF PUBLIC ACCOUNTING SERVICES IS A BROAD ONE. PUBLIC
ACCOUNTANTS OFTEN PROVIDE BOOKKEEPING SERVICES, ASSISTANCE IN INCOME TAX
MATTERS AND EXPERT ACCOUNTING SERVICES, AS WELL AS PERFORM AUDITS THAT
LEAD TO RENDERING OPINIONS ON FINANCIAL STATEMENTS.
OUR RECOMMENDATION RELATES ONLY TO THE LATTER; THAT IS, THE FUNCTION
OF AUDITING FINANCIAL ACCOUNTS AND TRANSACTIONS AND EXPRESSING AN
OPINION ON WHETHER AN ORGANIZATION'S FINANCIAL STATEMENTS FAIRLY PRESENT
ITS FINANCIAL CONDITION AS OF A GIVEN DATE AND THE RESULTS OF ITS
OPERATIONS FOR AN ACCOUNTING PERIOD ENDED ON THAT DATE IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED OR
WITH OTHER SPECIFIED ACCOUNTING PRINCIPLES APPLICABLE TO THE
ORGANIZATION. NOTHING IN OUR RECOMMENDATION WOULD PROHIBIT UNLICENSED
OR NONCERTIFIED ACCOUNTANTS FROM PROVIDING BOOKKEEPING SERVICES, EXPERT
ACCOUNTING SERVICES, OR OTHER SERVICES NOT REQUIRING A FINANCIAL AUDIT
LEADING TO AN OPINION ON FINANCIAL STATEMENTS, OR FROM SERVING AS
EMPLOYEES OF QUALIFIED PUBLIC ACCOUNTANTS WHO ASSUME RESPONSIBILITY FOR
OPINIONS ON FINANCIAL STATEMENTS, IF THE LAWS OF THEIR STATES PERMIT
THEM TO DO SO.
THE AUDIT STANDARDS THAT WE ISSUED IN 1972 PROVIDE NOT ONLY FOR
FINANCIAL AUDITS BUT ALSO FOR AUDIT WORK ASSESSING WHETHER DESIRED
RESULTS ARE ATTAINED UNDER GOVERNMENT PROGRAMS AND WHETHER FUNDS ARE
USED EFFICIENTLY AND ECONOMICALLY. THERE IS NO PROFESSION WHICH IS, BY
STATUTE, SPECIFICALLY AUTHORIZED TO, OR PRECLUDED FROM, PERFORMING
AUDITS OF EFFICIENCY AND ECONOMY OF OPERATIONS OR EVALUATING WHETHER
DESIRED RESULTS HAVE BEEN ACHIEVED BY GOVERNMENTAL PROGRAMS.
ACCORDINGLY, NONCERTIFIED ACCOUNTANTS AND CPAS ALIKE MAY DO SUCH WORK,
IF OTHERWISE QUALIFIED OR CAPABLE.
THEREFORE THERE ARE MANY AREAS OF ACCOUNTING AND AUDITING IN WHICH
ACCOUNTANTS MAY RENDER SERVICE TO GOVERNMENTAL CLIENTS. OUR RECOMMENDED
POLICY APPLIES TO ONLY ONE AREA - RENDERING OPINIONS ON FINANCIAL
STATEMENTS. THESE OPINIONS HAVE SPECIAL IMPORTANCE BECAUSE THIRD
PARTIES RELY ON THE PROFESSIONAL OPINIONS IN MAKING INVESTMENTS, SUCH AS
PURCHASING MUNICIPAL BONDS, AND FOR OTHER IMPORTANT FINANCIAL DECISIONS.
THE PRACTICE OF ESTABLISHING STANDARDS FOR THOSE WHO PERFORM THIS
SERVICE IS ANALOGOUS TO WHAT STATES REQUIRE IN OTHER PROFESSIONS, SUCH
AS LAW, MEDICINE, AND NURSING. THE ULTIMATE PURPOSE OF SUCH
PROFESSIONAL STANDARDS IS TO PROTECT THE INTEREST OF THE PUBLIC WHO USES
THOSE SERVICES.
BASES FOR OUR CONCLUSIONS
FEW WILL DISPUTE THAT GOVERNMENTAL FINANCIAL STATEMENTS INCLUDE MANY
COMPLEX AND COMPLICATED ACCOUNTING TRANSACTIONS. IT FOLLOWS, THEREFORE,
THAT THE HIGHEST TYPE OF SKILLS ARE NEEDED TO AUDIT AND GIVE OPINIONS ON
THESE STATEMENTS. TO BE SURE THAT THOSE WHO UNDERTAKE SUCH WORK POSSESS
SUCH SKILLS REQUIRES ESTABLISHING CRITERIA TO MEASURE COMPETENCE.
THE CPA UNIFORM EXAMINATION WAS ESTABLISHED FOR THIS PURPOSE. THIS
EXAMINATION IS PREPARED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS AND IS GIVEN SEMIANNUALLY BY EACH OF THE 50 STATES AND THE
DISTRICT OF COLUMBIA. STATE LAWS GOVERN WHO SHALL BE QUALIFIED TO TAKE
THE EXAMINATION. IT IS GRADED CENTRALLY FOR THE STATES BY THE AMERICAN
INSTITUTE.
STATE REQUIREMENTS FOR NONCERTIFIED PUBLIC ACCOUNTANTS DIFFER WIDELY.
- SEVEN STATES AND THE DISTRICT OF COLUMBIA DO NOT IMPOSE ANY
REQUIREMENT ON PERSONS PRACTICING PUBLIC ACCOUNTING AND RENDERING
OPINIONS ON FINANCIAL STATEMENTS; THEY DO, HOWEVER, RESTRICT THE USE OF
THE TITLE "CERTIFIED PUBLIC ACCOUNTANT" TO THOSE WHO HAVE PASSED THE
EXAMINATION.
- ELEVEN OTHER STATES LICENSE OR REGISTER PERSONS IN ADDITION TO
CPAS, ON A CONTINUING BASIS, TO PRACTICE PUBLIC ACCOUNTING AND RENDER
OPINIONS ON FINANCIAL STATEMENTS, IF THEY MEET CERTAIN REQUIREMENTS.
THESE REQUIREMENTS DIFFER WIDELY FROM STATE TO STATE, BUT NONE IS AS
STRINGENT AS THE REQUIREMENTS FOR BECOMING A CPA. HOWEVER, ONLY CPAS
MAY USE THAT TITLE.
- THE REMAINING 32 STATES PERMIT NO ONE TO PRACTICE PUBLIC ACCOUNTING
EXCEPT CPAS AND THOSE PUBLIC ACCOUNTANTS WHO WERE IN PRACTICE OR WHO MET
OTHER STATED REQUIREMENTS WHEN LEGISLATION LIMITING THE PRACTICE OF
PUBLIC ACCOUNTING WAS ADOPTED.
BECAUSE OF THESE DIVERGENT STATE REQUIREMENTS, THE QUESTION IS HOW
THE FEDERAL GOVERNMENT CAN ASSURE ITSELF THAT THOSE ENGAGED TO GIVE
OPINIONS ON FINANCIAL STATEMENTS POSSESS THE REQUIRED SKILLS. WE
BELIEVE THAT, TO THE MAXIMUM EXTENT PRACTICABLE, THE FEDERAL GOVERNMENT
SHOULD RELY ON THE STANDARDS AND QUALIFICATIONS ESTABLISHED BY THE
INDIVIDUAL STATE GOVERNMENTS. HOWEVER, FOR PUBLIC ACCOUNTANTS OTHER
THAN CERTIFIED PUBLIC ACCOUNTANTS, THERE ARE NO UNIFORM REQUIREMENTS AND
NO EFFECTIVE REGULATION IN SOME STATES. FOR CPAS THERE IS A UNIFORM
EXAMINATION, A MAJOR PORTION OF WHICH IS DESIGNED SPECIFICALLY TO TEST
THE CANDIDATES' ABILITY IN PRECISELY THAT AREA OF ACCOUNTING PRACTICE.
EVEN THOUGH OTHER PUBLIC ACCOUNTANTS MAY BE LICENSED OR REGISTERED,
THERE IS NO REQUIREMENT FOR A UNIFORM EXAMINATION. AS INDICATED
PREVIOUSLY, SEVEN STATES AND THE DISTRICT OF COLUMBIA PERMIT INDIVIDUALS
TO PRACTICE WITHOUT ANY REQUIREMENTS. REQUIREMENTS IN THE 11 STATES
THAT PROVIDE FOR REGISTRATION AND LICENSING OF OTHER PUBLIC ACCOUNTANTS
VARY FROM OHIO, WHICH REQUIRES ONLY THAT A LICENSEE HAVE A BACHELOR'S
DEGREE IN ACCOUNTING, TO ARIZONA, WHICH REQUIRES THAT A LICENSEE HAVE A
BACHELOR'S DEGREE AND 2 YEARS' EXPERIENCE IN ACCOUNTING AND THAT HE PASS
A PORTION OF THE CPA EXAMINATION. IN NO CASE ARE THE REQUIREMENTS AS
CHALLENGING AS THOSE REQUIRED FOR THE CERTIFIED PUBLIC ACCOUNTANT, AND
IN NO CASE IS THERE AS CLEAR A FOCUS ON THE CANDIDATE'S ABILITY TO
RENDER OPINIONS ON FINANCIAL STATEMENTS.
IT IS INTERESTING TO NOTE THAT INDIANA, IOWA, NEW HAMPSHIRE, AND
SOUTH CAROLINA, WHICH DID NOT HAVE A CLASS OF LICENSED OR REGISTERED
ACCOUNTANTS, HAVE, IN THE LAST 4 YEARS, CREATED ONE FOR ACCOUNTING
PRACTITIONERS. HOWEVER, NONE OF THESE STATES PERMIT THESE LICENSED OR
REGISTERED ACCOUNTANTS TO RENDER OPINIONS ON FINANCIAL STATEMENTS. IN
FACT, SINCE SEPTEMBER 1970, 11 STATE LEGISLATURES HAVE REJECTED
PROPOSALS WHICH WOULD HAVE CREATED A CLASS OF ACCOUNTANTS, IN ADDITION
TO CERTIFIED PUBLIC ACCOUNTANTS, WHICH WOULD HAVE AUTHORITY TO RENDER
OPINIONS ON FINANCIAL STATEMENTS. CONSEQUENTLY, IT APPEARS THAT MANY
STATES HAVE REACHED CONCLUSIONS SIMILAR TO THOSE WE HAVE REACHED ON THIS
MATTER.
ABOUT 15,000 PUBLIC ACCOUNTANTS BELONG TO THE NATIONAL SOCIETY OF
PUBLIC ACCOUNTANTS. THIS ORGANIZATION HAS AN ACCREDITATION PROGRAM
DESIGNED TO ESTABLISH THE COMPETENCE OF ITS MEMBERS. WE HAVE REVIEWED
THE EXAMINATION USED IN THAT PROGRAM AND FIND THAT IT IS FAR LESS
DEMANDING THAN THE CPA EXAMINATION AND FAR LESS USEFUL AS A TEST OF THE
CANDIDATE'S ABILITY TO RENDER PROFESSIONAL OPINIONS ON FINANCIAL
STATEMENTS.
AS WE ADVISED SENATORS ERVIN AND METCALF IN OUR LETTERS DATED AUGUST
7, 1974, WE CONSIDERED THE POSSIBILITY OF GAO'S GIVING AN EXAMINATION TO
TEST THE COMPETENCE OF ACCOUNTANTS AND AUDITORS TO DO GOVERNMENT
AUDITING. WE HAVE SINCE CONCLUDED THAT THE COST OF SUCH A PROGRAM WOULD
BE FAR GREATER THAN ITS BENEFITS. THE ONLY FUNCTION THAT OUR
RECOMMENDATION LIMITS TO CERTIFIED PUBLIC ACCOUNTANTS IS AN AUDIT
LEADING TO AN OPINION ON FINANCIAL STATEMENTS. THE CPA EXAMINATION IS
DESIGNED TO TEST AN APPLICANT'S KNOWLEDGE OF ACCOUNTING THEORY, AUDITING
PRINCIPLES, AND BUSINESS LAW, AS WELL AS HIS ABILITY TO APPLY SUCH
KNOWLEDGE TO PRACTICAL PROBLEMS - ALL LEADING TO THE EXPERTISE NEEDED TO
PERFORM FINANCIAL AUDITS AND RENDER OPINIONS ON FINANCIAL STATEMENTS.
IF WE DID GIVE AN EXAMINATION, IT WOULD BE AT LEAST AS DIFFICULT AS THE
CPA EXAMINATION. SINCE THAT EXAMINATION IS AVAILABLE, IT WOULD BE
DUPLICATIVE TO CREATE A SEPARATE EXAMINATION FOR THE SAME PURPOSE.
A SECOND ISSUE BROUGHT TO OUR ATTENTION WAS THAT THERE WERE NOT
ENOUGH CPAS TO DO THE NECESSARY WORK. HOWEVER, OUR INFORMATION SHOWS
THAT THERE ARE 107,000 CPAS WHO ARE MEMBERS OF THE AMERICAN INSTITUTE.
THIS IS AN INCREASE OF 32,000 SINCE 1970. THERE ARE PERHAPS 45,000
ADDITIONAL CPAS WHO ARE NOT MEMBERS OF THE INSTITUTE. (RECORDS ARE NOT
READILY AVAILABLE ON THIS, SO THE FIGURE IS ESTIMATED.) INSTITUTE
RECORDS SHOW THAT ITS MEMBERS ARE WIDELY DISPERSED THROUGHOUT THE UNITED
STATES, EVEN IN SPARSELY SETTLED STATES. FOR EXAMPLE, THERE ARE 222
PRACTICING CPAS IN MONTANA, 235 IN IDAHO, AND 83 IN SOUTH DAKOTA.
MOREOVER, CPAS ARE ACCUSTOMED TO TRAVELING TO DO WORK FOR CLIENTS.
ACCORDINGLY, WE BELIEVE THAT ANY GOVERNMENTAL UNIT THAT WISHES TO ENGAGE
A CERTIFIED PUBLIC ACCOUNTANT TO GIVE AN OPINION ON ITS FINANCIAL
STATEMENTS WILL BE ABLE TO FIND ONE WITHOUT DIFFICULTY.
WHEN WE ISSUED OUR RECOMMENDED POLICY STATEMENT IN 1970, WE PROVIDED
A 5-YEAR GRACE PERIOD SO THAT THOSE NONCERTIFIED ACCOUNTANTS WHO WISHED
TO DO GOVERNMENT WORK REQUIRING OPINIONS ON FINANCIAL STATEMENTS COULD
HAVE AN OPPORTUNITY TO PASS THE CPA EXAMINATION. THE NATIONAL SOCIETY
OF PUBLIC ACCOUNTANTS ADVISED US, HOWEVER, THAT MANY OF ITS MEMBERS
COULD NOT QUALIFY FOR THE EXAMINATION BECAUSE THEY COULD NOT MEET THE
EXPERIENCE OR EDUCATION REQUIREMENTS OF THE STATES IN WHICH THEY RESIDED
OR PRACTICED.
WE HAVE LOOKED INTO THIS AND FOUND THAT THE EDUCATION AND EXPERIENCE
REQUIREMENTS FOR TAKING THE CPA EXAMINATION AND FOR OBTAINING A LICENSE
TO PRACTICE AS A CPA VARY GREATLY FROM STATE TO STATE. IN MANY STATES
THERE ARE PROVISIONS FOR PARTIALLY SUBSTITUTING EXPERIENCE FOR
EDUCATIONAL REQUIREMENTS AND VICE VERSA. IN OTHERS THERE ARE PROVISIONS
THAT THE STATE ACCOUNTANCY BOARD CAN WAIVE SOME OR ALL OF THE
EDUCATIONAL REQUIREMENTS ON THE BASIS OF A SPECIAL TEST OR OTHER
DEMONSTRATION OF CAPABILITY WHICH MEETS THE BOARD'S STANDARDS.
FOR EXAMPLE, IN ARKANSAS A CANDIDATE MAY SIT FOR THE CPA EXAMINATION
IF HE HAS A COLLEGE DEGREE IN ACCOUNTING OR ITS EQUIVALENT. HOWEVER,
THE BOARD MAY WAIVE THIS EDUCATIONAL REQUIREMENT IF THE CANDIDATE PASSES
A SPECIAL WRITTEN EXAMINATION. TO OBTAIN A LICENSE TO PRACTICE AS A CPA
AFTER PASSING THE EXAMINATION, THE CANDIDATE MUST HAVE HAD 2 YEARS'
EXPERIENCE IN PUBLIC ACCOUNTING OR SIMILAR WORK; HOWEVER, IF HE HAS A
MASTER'S DEGREE, ONLY 1 YEAR'S EXPERIENCE IS REQUIRED.
A CANDIDATE WHO IS A HIGH SCHOOL GRADUATE WITH 3 YEARS' PUBLIC
ACCOUNTING EXPERIENCE MAY SIT FOR THE CPA EXAMINATION IN OKLAHOMA. IF
THE CANDIDATE HAS A COLLEGE DEGREE IN ACCOUNTING OR THE EQUIVALENT HE
NEEDS NO EXPERIENCE TO SIT FOR THE EXAMINATION. ONCE THE CANDIDATE
PASSES THE EXAMINATION, HE RECEIVES A CPA LICENSE. THERE ARE NO FURTHER
EDUCATIONAL OR EXPERIENCE REQUIREMENTS.
IN ITS RECENTLY RECOMMENDED "MODEL ACCOUNTANCY BILL," THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PROVIDES FOR AN EDUCATIONAL
REQUIREMENT OF A COLLEGE DEGREE FOR THE FIRST 5 YEARS OF THE ACT AND FOR
AN ADDITIONAL 30 SEMESTER HOURS OF STUDY THEREAFTER. HOWEVER, THE
PROPOSED ACT ALSO PROVIDES THAT THE BOARD MAY WAIVE THE EDUCATIONAL
REQUIREMENT ON THE BASIS OF THE RESULT OF A SPECIAL WRITTEN EXAMINATION
TO ASCERTAIN THAT THE CANDIDATE IS EDUCATIONALLY WELL EQUIPPED.
FOR THOSE WHO MEET THE ABOVE EDUCATIONAL REQUIREMENT, THE INSTITUTE'S
MODEL ACT RECOMMENDS THAT NO QUALIFYING EXPERIENCE BE REQUIRED.
FORTY-TWO STATES NOW HAVE PROVISIONS WHICH ALLOW CANDIDATES WITHOUT ANY
EXPERIENCE TO SIT FOR THE EXAMINATION, IF THEY MEET SPECIFIC EDUCATIONAL
REQUIREMENTS.
THE AMERICAN INSTITUTE DEVELOPED THE MODEL ACCOUNTANCY BILL FOR USE
IN A NEW STATE LEGISLATIVE PROGRAM WHICH, WE WERE INFORMED, IS BEING
ACTIVELY PURSUED BY THE INSTITUTE AND STATE CPA ORGANIZATIONS.
IN VIEW OF THE ABOVE, WE BELIEVE THAT IN MOST STATES AN ACCOUNTANT
WHO HAS SUFFICIENT KNOWLEDGE AND TRAINING WILL BE ABLE TO SIT FOR THE
CPA EXAMINATION AND, IF HE PASSES, BE LICENSED AS A CERTIFIED PUBLIC
ACCOUNTANT. IN ADDITION, AS CASES ARE BROUGHT TO ITS ATTENTION WHEN
CANDIDATES ARE UNABLE TO SIT FOR THE CPA EXAMINATION OR TO BE LICENSED
AS CPAS AFTER PASSING THE EXAMINATION, THE INSTITUTE REPLIES TO THE
CANDIDATES CITING ITS POSITION ON EDUCATIONAL AND EXPERIENCE
REQUIREMENTS AND SENDS COPIES OF THE RESPONSES TO THE RESPECTIVE STATE
BOARDS. THE INSTITUTE HAS INFORMED US THAT IT WILL CONTINUE TO ASSIST
THE INDIVIDUAL CANDIDATES AS MUCH AS POSSIBLE.
CONCLUSION
WE BELIEVE IT IS IN THE GOVERNMENT'S INTEREST THAT OUR RECOMMENDATION
REMAIN UNCHANGED. WE BELIEVE ALSO THAT, WHEN THE GOVERNMENT ENGAGES
PUBLIC ACCOUNTANTS, IT NEEDS THE BEST QUALIFIED ONES IT CAN GET. IT IS
CLEARLY FAR LESS COSTLY TO THE FEDERAL GOVERNMENT TO RELY ON THE
STATE-SPONSORED CPA EXAMINATION AS A MEANS OF TESTING COMPETENCE TO GIVE
OPINIONS ON FINANCIAL STATEMENTS THAN IT WOULD BE FOR US OR FOR ANY
OTHER FEDERAL AGENCY TO ADMINISTER A SEPARATE TEST. NO OTHER EXISTING
TEST SEEMS AS WELL SUITED TO THIS PURPOSE AS THE CPA EXAMINATION.
PUBLIC ACCOUNTANTS WHO DO NOT MEET THE QUALIFICATIONS WE RECOMMEND
MAY DO MANY OTHER TYPES OF GOVERNMENTAL ACCOUNTING WORK, INCLUDING, BUT
NOT LIMITED TO, AUDITS OF EFFICIENCY AND ECONOMY OF OPERATIONS, AUDITS
OF EFFECTIVENESS, AND ACCOUNTING SYSTEMS DESIGN WORK.
WE SHALL BE PLEASED TO DISCUSS THIS MATTER WITH YOU OR YOUR STAFF IF
YOU DESIRE.
B-180021(A) L/M, MAR 20, 1975
HEADNOTES-UNAVAILABLE
OFFICE OF GENERAL COUNSEL
RAYMOND C. WEISSENBORN, U. S. CIVIL SERVICE COMMISSION:
REFERENCE IS MADE TO YOUR UNDATED INTERAGENCY ADVISORY GROUP
MEMORANDUM; SUBJECT: DRAFT REGULATION - SUBJECT V, PART 550, TITLE 5,
CODE OF FEDERAL REGULATIONS AND FPM SUPPLEMENT 990-2 (SUBCHAPTER 8, BOOK
550, "BACK PAY ACT"), COPY ENCLOSED, THAT REQUESTS ALL AGENCIES TO
COMMENT ON THE PROPOSED REGULATIONS. AS YOU KNOW, WE HAVE WORKED
CLOSELY WITH YOUR STAFF IN DEVELOPING THE NEW CONCEPTS CONTAINED
THEREIN, MANY OF WHICH REFLECT OUR OWN PROPOSALS AND RECOMMENDATIONS. I
WOULD LIKE TO TAKE THIS OPPORTUNITY TO EXPRESS MY APPRECIATION AS WELL
AS COMPTROLLER GENERAL STAATS' FOR THE SPLENDID COOPERATION WE HAVE HAD
FROM THE CIVIL SERVICE COMMISSION IN ACHIEVING THESE SALUTORY POLICY
CHANGES.
ATTACHED IS AN ANALYSIS OF THE PROPOSED REGULATIONS AND IMPLEMENTING
MATERIALS BY SECTION REFERENCE. WE HAVE SUGGESTED CERTAIN CHANGES IN
THE DRAFT WHERE WE FEEL IT COULD BE STRENGTHENED, IMPROVED AND/OR
CLARIFIED. WE APPRECIATE THE OPPORTUNITY TO SUBMIT THESE CHANGES FOR
YOUR CONSIDERATION.
COMMENTS AND RECOMMENDATIONS ON DRAFT PROPOSED BACKPAY REGULATIONS
AND INSTRUCTIONS.
5 C.F.R. PART 550, SUBPART H
SECTIONS 550.801(B)
SINCE THE BACK PAY ACT SPECIFIES ONLY "PAY, ALLOWANCES, AND
DIFFERENTIALS" AND DOES NOT REFER TO OTHER "SUBSTANTIAL MONETARY AND
EMPLOYMENT BENEFITS," WE THINK THE REGULATIONS WOULD HAVE A SOUNDER
STATUTORY BASE OF SUPPORT IF THE OTHER SUBSTANTIAL BENEFITS WERE TIED TO
THE WORD "ALLOWANCES." ACCORDINGLY, WE SUGGEST AMENDING LINES 3 AND 4 OF
THIS SUBSECTION AS FOLLOWS:
"ALLOWANCES, AND DIFFERENTIALS AS DEFINED IN SECTION 550.802 OF THIS
SUBPART ***."
SECTION 550.802(F) AND (H)
FOR THE ABOVE REASON, WE SUGGEST COMBINING SUBSECTIONS (F) AND (H),
USING THE BENEFITS NOW INCLUDED IN (H) AS EXAMPLES OF A BROADENED
CONCEPT OF THE TERM "ALLOWANCES."
WE RECOMMEND ADDING LIFE INSURANCE TO THE LIST OF EXAMPLES BECAUSE
RESTORATION OF LIFE INSURANCE BENEFITS IS AUTHORIZED BY LAW (5 U.S.C.
SEC. 8706(F)) IN THE SAME MANNER AS RESTORATION OF HEALTH INSURANCE
BENEFITS.
WE ALSO SUGGEST ADDING, AFTER THE WORDS, "SUBSTANTIAL MONETARY AND
EMPLOYMENT BENEFITS," THE FOLLOWING: "TO WHICH AN EMPLOYEE IS ENTITLED
BY LAW OR REGULATION IN SPECIFIED CIRCUMSTANCES BY VIRTUE OF HIS FEDERAL
EMPLOYMENT STATUS." WE FEEL THAT THIS WILL AVOID ANY CONFUSION OVER THE
CIRCUMSTANCES IN WHICH BENEFITS MAY BE MADE A PART OF A BACK PAY ACT
AWARD. THIS SUBSECTION SHOULD BE CONFINED TO THE KIND OF BENEFITS HE
WOULD HAVE RECEIVED IF THE UNJUSTIFIED ACTION HAD NOT TAKEN PLACE. WE
ARE NOT FULLY SATISFIED AS TO THE LEGAL BASIS OR NECESSITY OF INCLUDING
TRAVEL AND TRANSPORTATION EXPENSES UNDER THE BACKPAY STATUTE AND
REGULATIONS. RATHER, WE CONSIDER IT MORE APPROPRIATE TO DETERMINE ANY
SUCH ENTITLEMENTS UNDER THE STATUTES AND REGULATIONS SPECIFICALLY
RELATING TO THOSE EXPENSES. ACCORDINGLY, WE RECOMMEND THAT ANY
REFERENCE TO TRAVEL AND TRANSPORTATION EXPENSES BE OMITTED FROM THE
PROPOSED BACKPAY REGULATIONS, EXCEPT TO THE EXTENT OF REFERENCES TO
TRAVEL EXPENSES TO PURSUE AN APPEAL FROM AN UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION AS HEREAFTER DISCUSSED. OUR SUGGESTED REVISION IS AS
FOLLOWS:
"(F) ALLOWANCES MEANS LIVING QUARTERS ALLOWANCE, POST (COST OF
LIVING) ALLOWANCE, EDUCATIONAL ALLOWANCE, EDUCATIONAL TRAVEL ALLOWANCE,
SEPARATE MAINTENANCE ALLOWANCE, REMOTE WORKSITE ALLOWANCE, UNIFORM
ALLOWANCE, MEDICAL TREATMENT ALLOWANCE, AND OTHER SUBSTANTIAL MONETARY
AND EMPLOYMENT BENEFITS TO WHICH AN EMPLOYEE IS ENTITLED BY LAW OR
REGULATION IN SPECIFIED CIRCUMSTANCES BY VIRTUE OF HIS FEDERAL
EMPLOYMENT STATUS, ANNUAL LEAVE (NOT TO EXCEED THE MAXIMUM AMOUNT OF
LEAVE AUTHORIZED FOR THE EMPLOYEE BY LAW OR REGULATION), SICK, HOME,
COURT, MILITARY AND SHORE LEAVE, SERVICE CREDIT, HEALTH INSURANCE, AND
LIFE INSURANCE."
SECTION 550.803(B)
AN EMPLOYEE WHO BELIEVES HIS AGENCY HAS WRONGFULLY DENIED HIM AN
EMPLOYMENT BENEFIT TO WHICH HE FEELS HE WAS ENTITLED HAS A STATUTORY
RIGHT TO APPEAL THE AGENCY DETERMINATION BY PRESENTING HIS CLAIM TO THE
COMPTROLLER GENERAL FOR REVIEW AND FINAL SETTLEMENT. (31 U.S.C. SEC. 71
ET SEQ.) HOWEVER, THE TERMS "APPEALS SYSTEM" AND "GRIEVANCE SYSTEM" ARE
WORDS OF ART, WITH GENERAL REFERENCE TO PROCEDURES ESTABLISHED PURSUANT
TO THE ADMINISTRATIVE PROCEDURES ACT. THE COMPTROLLER GENERAL'S
SETTLEMENT AUTHORITY DOES NOT APPEAR TO FIT UNDER EITHER SYSTEM. WE
THEREFORE RECOMMEND THAT YOU INSERT, IMMEDIATELY AFTER THE WORD "APPEAL"
IN THE FOURTH LINE OF THE SUBSECTION, THE FOLLOWING:
"TO THE COMPTROLLER GENERAL OF THE UNITED STATES FOR SETTLEMENT OF
HIS CLAIM AGAINST THE GOVERNMENT, OR -"
IN THE NEXT TO THE LAST LINE OF THE SUBSECTION, AFTER THE WORD "BY,"
INSERT:
"THE COMPTROLLER GENERAL OR BY -"
AS AN ALTERNATIVE, WE WOULD HAVE NO OBJECTION TO REINSTATEMENT OF THE
WORDING OF THE PRESENT SUBSECTION (B), WHICH REFERS TO AN APPEALS SYSTEM
OR PROCEDURE ESTABLISHED BY LAW, EXECUTIVE ORDER, OR REGULATION, EXCEPT
THAT YOU MAY WISH TO ADD "GRIEVANCE SYSTEM," BEFORE THE WORD
"PROCEDURE," AND THE WORDS "OR COLLECTIVE BARGAINING AGREEMENT" AFTER
THE WORD "REGULATION."
SECTION 550.803(C)
ALTHOUGH EARLIER VERSIONS OF THESE DRAFT REGULATIONS INCLUDED THE
COMPTROLLER GENERAL AS ONE OF THE APPROPRIATE AUTHORITIES WHO MAY FIND
THAT AN EMPLOYEE HAS UNDERGONE AN UNJUSTIFIED AND UNWARRANTED PERSONNEL
ACTION, WE NOTE THAT THE COMPTROLLER GENERAL HAS BEEN DELETED FROM THE
LATEST VERSION OF THE DRAFT REGULATIONS. AS INDICATED IN OUR COMMENTS
ON SUBSECTION (B), SUPRA, THE COMPTROLLER GENERAL CAN AND OFTEN DOES
APPLY THE BACK PAY STATUTE, 5 U.S.C. SEC. 5596, WHEN AN EMPLOYEE HAS
ELECTED TO APPEAL A DISALLOWANCE BY HIS AGENCY AND THE COMPTROLLER
GENERAL FINDS THAT THE DISALLOWANCE WAS UNJUSTIFIED OR UNWARRANTED.
ACCORDINGLY, IT IS REQUESTED THAT SECTION 550.803(C) BE CHANGED TO ADD
THE COMPTROLLER GENERAL, AS FOLLOWS: "*** (2) THE CIVIL SERVICE
COMMISSION; (3) THE COMPTROLLER GENERAL ***."
SECTION 550.804
WE BELIEVE THAT THE FIRST SENTENCE OF THIS SECTION COULD BE MADE MORE
PRECISE BY INCORPORATING THE FOLLOWING CHANGES: "(A) WHEN AN
APPROPRIATE AUTHORITY CORRECTS OR DIRECTS THE CORRECTION OF AN
UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION, THE AGENCY OR THE
COMPTROLLER GENERAL SHALL ***."
THERE MAY BE PERSONNEL ACTIONS WHICH ARE IN EVERY RESPECT
"UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTIONS" AS PRESCRIBED BY THIS
SECTION BUT WHICH NEVERTHELESS SHOULD NOT BE CORRECTED BY OPERATION OF
THE BACK PAY ACT BECAUSE THE LOSS SUFFERED BY THE EMPLOYEE WAS NOT THE
DIRECT RESULT OF THE WRONGFUL PERSONNEL ACTION. FOR EXAMPLE, SECTION
550.803(F) INCLUDES A PERSONNEL ACTION WHICH HAS BEEN DETERMINED TO BE
AN UNFAIR LABOR PRACTICE UNDER EXECUTIVE ORDER 11491. IF AN EMPLOYEE
WAS DENIED AN EMPLOYMENT BENEFIT BECAUSE OF HIS UNION ACTIVITY WHICH HE
WOULD OTHERWISE HAVE RECEIVED, WE HAVE NO DIFFICULTY APPLYING THE BACK
PAY ACT REMEDIES. IF, HOWEVER, THE UNFAIR LABOR PRACTICE WAS A FAILURE
TO CONSULT WITH THE EMPLOYEE'S UNION BEFORE SELECTING PERSONS FOR
SPECIAL TRAINING, AND THERE WAS NO OTHER RESTRICTION ON THE AGENCY'S
DISCRETION IN SELECTING FROM A NUMBER OF QUALIFIED APPLICANTS, THE
FAILURE TO SELECT THE COMPLAINING EMPLOYEE COULD NOT BE DIRECTLY
ATTRIBUTED TO THE AGENCY'S FAILURE TO CONSULT WITH THE UNION SINCE EVEN
IF IT HAD DONE SO, THE PARTICULAR EMPLOYEE MIGHT NOT HAVE BEEN SELECTED.
WE THEREFORE SUGGEST THAT YOU INSERT - EITHER AS A SEPARATE
DEFINITION OF THE WORDS, "DIRECTLY RESULTED," AS USED IN SECTION
550.802(C), OR AS A NEW SUBSECTION UNDER SECTION 550.803 OR SECTION
550.804, WORDS TO THIS EFFECT:
"NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (D) OF SECTION 550.803,
AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION CAN ONLY BE CORRECTED
UNDER THE PROVISIONS OF SECTION 5596 OF TITLE 5, UNITED STATES CODE, IF
IT IS FOUND BY APPROPRIATE AUTHORITY THAT THE WITHDRAWAL, REDUCTION, OR
DENIAL OF ALL OR PART OF THE PAY, ALLOWANCES, DIFFERENTIALS, OR OTHER
SUBSTANTIAL MONETARY AND EMPLOYMENT BENEFITS DUE TO THE EMPLOYEE WAS THE
RESULT OF AND WOULD NOT HAVE OCCURRED BUT FOR THE UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION."
SUBCHAPTER 8, BOOK 550, FPM SUPPLEMENT 990-2.
SECTION S8-3B(F) AND (H)
COMMENTS AND RECOMMENDATIONS FOR 5 C.F.R. 550.802(F) AND (H), SUPRA
APPLY ALSO TO THESE SECTIONS.
SECTION S8-4A(B) AND (C)
COMMENTS AND RECOMMENDATIONS FOR 5 C.F.R. 550.803(B) AND 550.803(C)
ABOVE APPLY ALSO TO THIS SECTION.
SECTION S8-4B(C)
THIS SHOULD BE DELETED BECAUSE IT REPEATS THE PREVIOUS SUBSECTION.
OTHER SUBSECTIONS THAT FOLLOW SHOULD BE REDESIGNATED.
SECTION S8-4B(D)(3)
WE RECOMMEND DELETION OF THIS PARAGRAPH, EXCEPT FOR THE PART OF THE
SENTENCE THAT BEGINS "THE AGENCY IS NOT PREVENTED FROM AWARDING BACKPAY
ON ITS OWN INITIATIVE ETC." AS INDICATED IN OUR COMMENTS ON 5 C.F.R.
803(B), SUPRA, AN EMPLOYEE HAS A STATUTORY RIGHT TO APPEAL TO THE
COMPTROLLER GENERAL FROM A DISALLOWANCE BY HIS AGENCY AND TO RECEIVE
BACKPAY, IF THE COMPTROLLER GENERAL DETERMINES THAT HE IS ENTITLED TO
IT, REGARDLESS OF THE FACT THAT HE COULD HAVE UTILIZED A DIFFERENT
APPEAL CHANNEL BUT CHOSE NOT TO DO SO. THIS PARAGRAPH AS WRITTEN WOULD
SUGGEST THAT THE COMPTROLLER GENERAL COULD NOT AWARD BACKPAY IN AN
APPROPRIATE CASE IF THE EMPLOYEE HAD NOT FIRST EXHAUSTED ALL OTHER
APPEAL RIGHTS AVAILABLE TO HIM. WE SEE NO JUSTIFICATION IN THE LAW OR
ITS LEGISLATIVE HISTORY FOR SUCH A PROVISION AND CANNOT ACCEPT SUCH A
RESTRICTION ON OUR AUTHORITY.
SECTION S8-4C(2)
THIS SHOULD BE REWORDED TO CONFORM TO THE DEFINITION OF "APPROPRIATE
AUTHORITY" AS DEFINED IN SECTION S8-4A(C). AS PRESENTLY WORDED IT
INDICATES ONLY THE COMMISSION, THE AGENCY HEAD OR HIS DESIGNATED
REPRESENTATIVE MAY BE AN APPROPRIATE AUTHORITY. ALSO THE REGULATIONS
SHOULD INDICATE THAT AN ARBITRATION AWARD MAY NOT BE IMPLEMENTED IF IT
IS CONTRARY TO LAW OR REGULATION. FURTHER, IN ADDITION TO THE FEDERAL
LABOR RELATIONS COUNCIL, THE COMPTROLLER GENERAL MAY, PURSUANT TO
AUTHORITY CONTAINED IN 31 U.S.C. 74 AND 82D, ALSO INVALIDATE ARBITRATION
AWARDS. ACCORDINGLY, WE RECOMMEND THIS SECTION BE CHANGED TO READ AS
FOLLOWS: "(2) APPROPRIATE AUTHORITY. IN ADDITION TO OFFICIALS SET
FORTH IN 5 C.F.R. 550.803(C), AN APPROPRIATE AUTHORITY MAY BE FOUND AT A
LEVEL OF AGENCY MANAGEMENT AS DEFINED IN APPLICABLE REGULATIONS AND
DELEGATIONS OF AUTHORITY OF THE AGENCY. A BINDING ARBITRATION AWARD
MUST BE GIVEN THE SAME EFFECT AS A DECISION RENDERED BY THE AGENCY HEAD
OR ANY OTHER APPROPRIATE AUTHORITY. AN ARBITRATION AWARD MUST BE
IMPLEMENTED IF IT IS VALID. ONLY THE COMPTROLLER GENERAL AND THE
FEDERAL LABOR RELATIONS COUNCIL HAVE AUTHORITY TO INVALIDATE AN AWARD ON
THE BASIS THAT IT IS INCONSISTENT WITH LAW OR REGULATION OR IS
CONSIDERED INAPPLICABLE ON OTHER GROUNDS SIMILAR TO THOSE UPON WHICH
CHALLENGES TO ARBITRATION AWARDS ARE SUSTAINED BY THE COURTS IN PRIVATE
SECTOR LABOR-MANAGEMENT RELATIONS."
SECTION S8-5A(A)
IN CONFORMANCE WITH OUR SUGGESTED CHANGE TO SECTION 550.801(B) OF THE
REGULATIONS, WE SUGGEST AMENDING LINES 3 THROUGH 6 OF THIS SUBSECTION AS
FOLLOWS:
"THE PERIOD COVERED BY THE CORRECTIVE ACTION THE PAY, ALLOWANCES
(INCLUDING OTHER SUBSTANTIAL MONETARY AND EMPLOYMENT BENEFITS BUT
LIMITING THE ACCUMULATION OF ANNUAL LEAVE TO THE MAXIMUM PRESCRIBED BY
LAW OR REGULATION FOR THE EMPLOYEE), AND DIFFERENTIALS OF THE EMPLOYEE
AS IF THE UNJUSTIFIED OR ***."
IN ADDITION, A NUMBER OF COMPTROLLER GENERAL DECISIONS HAVE HELD THAT
IT IS PERMISSIBLE TO REIMBURSE AN EMPLOYEE FOR NECESSARY TRAVEL EXPENSES
INCURRED IN SUCCESSFULLY PROSECUTING AN APPEAL FROM AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION. FOR THIS PURPOSE, HE MAY BE REGARDED AS
BEING ON OFFICIAL DUTY WHILE PURSUING HIS REMEDY, AND COULD THEREFORE
RECEIVE THE SAME TRAVEL AND PER DIEM ALLOWANCES USUALLY ACCORDED TO AN
EMPLOYEE ASSIGNED TO TEMPORARY DUTY PURSUANT TO THE FEDERAL TRAVEL
REGULATIONS. (SEE 21 COMP. GEN. 382 (1941); 31 ID. 346 (1952); 33 ID.
582 (1954); B-180469, FEB. 28, 1974.) ACCORDINGLY, YOU MAY WISH TO ADD
A SENTENCE TO THIS EFFECT AT THE END OF SUBSECTION (A) OR ELSEWHERE IN
THE SECTION ON CORRECTIVE ACTION.
SECTION S8-5A(A)
IN CONFORMANCE WITH OUR SUGGESTED CHANGES TO SECTION 550.801(B) OF
THE REGULATIONS, THIS SUBSECTION SHOULD BE REWORDED TO READ AS FOLLOWS:
"(B) IN RECOMPUTING THE PAY, ALLOWANCES (INCLUDING OTHER SUBSTANTIAL
MONETARY AND EMPLOYMENT BENEFITS) AND DIFFERENTIALS OF AN EMPLOYEE UNDER
PARAGRAPH (A) OF THIS SECTION, THE AGENCY WILL BE GUIDED BY THE
DEFINITION OF THESE TERMS IN SECTION 550.802 OF THIS SUBPART."
SECTION S8-5D
THE CITATION AFTER FIRST SENTENCE SHOULD BE CORRECTED TO READ (44
COMP. GEN. 365). THE CITATION AFTER LAST SENTENCE SHOULD BE CORRECTED
TO READ: "(40 COMP. GEN. 479, 52 ID. 860, ***."
SECTION S8-5G(1)
WE RECOMMEND THE ADDITION OF THE FOLLOWING, IMMEDIATELY AFTER THE
WORDS "TAKEN PLACE,": "AND THAT BUT FOR THAT ACTION, THE EMPLOYEE WOULD
HAVE BEEN PROMOTED,"
SECTION S8-5G(5)
THIS IS A MISLEADING STATEMENT OF THE HOLDING IN 53 COMP. GEN. 216.
AT NO TIME HAVE WE EVER BASED A RETROACTIVE PROMOTION SOLELY ON THE
FAILURE OF AN AGENCY TO ACT IN TIMELY FASHION ON A SUPERVISOR'S
RECOMMENDATION. IN THE CASE YOU CITE, THE EMPLOYEE'S POSITION WAS
RECLASSIFIED BY THE CIVIL SERVICE COMMISSION, AND UNDER 5 C.F.R. 511.701
A CLASSIFICATION ACTION MUST BE PUT INTO EFFECT BY THE AGENCY NOT
EARLIER THAN THE DATE THE AGENCY RECEIVES THE CERTIFICATE BUT NOT LATER
THAN THE BEGINNING OF THE FOURTH PAY PERIOD FOLLOWING SUCH RECEIPT (IN
THE ABSENCE OF AN ALTERNATIVE DATE SPECIFIED IN THE CERTIFICATE). IN
PREVIOUS CASES INVOLVING SUCH RECLASSIFICATIONS, WE HELD THAT THE AGENCY
HAD THE OPTION OF EITHER PROMOTING THE INCUMBENT IN ACCORDANCE WITH THE
RECLASSIFICATION OR REMOVING HIM. IN THE CASE TO WHICH YOU REFER, THE
AGENCY DID NEITHER. THEREFORE, WE HELD, WHEN AN AGENCY UPGRADES A
POSITION IN ACCORDANCE WITH A CIVIL SERVICE CLASSIFICATION ACTION, "THE
RETENTION OF THE INCUMBENT IN THAT POSITION AMOUNTS TO A DETERMINATION
BY THE AGENCY THAT THE INCUMBENT IS IN FACT QUALIFIED TO PERFORM THE
DUTY OF THE HIGHER GRADE." ADOPTING THE REGULATORY DEFINITION OF
"REASONABLE TIME," WE HELD FURTHER THAT "THE REASONABLE TIME WITHIN
WHICH MR. URBANEK SHOULD HAVE BEEN EITHER PROMOTED OR REMOVED FROM THE
GS-13 POSITION EXPIRED AT THE BEGINNING OF THE FOURTH PAY PERIOD AFTER
JULY 3, 1970, THE DATE OF THE RECLASSIFICATION ACTION."
SECTION S8-5M(4)
DELETE "COMPTROLLER GENERAL DECISION B-162578, MAY 6, 1974" AND CITE
IT INSTEAD AS "53 COMP. GEN. 824." AFTER LAST SENTENCE IN SUBSECTION ADD
CITATION AS FOLLOWS: "(UNPUBLISHED COMPTROLLER GENERAL DECISION
B-178143, JULY 9, 1973)."
SECTION S8-5P
WE SUGGEST THAT THE HEADING FOR THIS SUBSECTION BE CHANGED TO READ
"INTERIM EMPLOYMENT EXPENSES."
THE REFERENCE TO EXPENSES INCURRED IN CONNECTION WITH A SUCCESSFUL
APPEAL OF AN UNJUSTIFIED OR UNWARRANTED SEPARATION ARE INAPPOSITE HERE
SINCE THE SUBSECTION IS CONCERNED WITH INTERIM EMPLOYMENT EXPENSES.
IT IS TRUE THAT THE CASE YOU CITE, 40 COMP. GEN. 479, HOLDS THAT
NEITHER EXCESS COST OF LIVING EXPENSES INCURRED IN CONNECTION WITH
REPLACEMENT EMPLOYMENT AFTER A WRONGFUL SEPARATION NOR THE EXPENSES OF
APPEALING THE SEPARATION ARE RECOVERABLE. HOWEVER, AS INDICATED IN OUR
COMMENTS ON SECTION S8-5A(A), WE HAVE TAKEN A DIFFERENT POSITION IN A
NUMBER OF CASES WHICH PERMIT RECOVERY FOR TRAVEL EXPENSES AND PER DIEM
NECESSARILY INCURRED IN PROSECUTING THE EMPLOYEE'S APPEAL OF THE
UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION. FOR PURPOSES OF THIS
ENTITLEMENT, THE EMPLOYEE WOULD BE REGARDED AS BEING ON OFFICIAL DUTY
WHILE PROSECUTING HIS APPEAL AND WOULD RECEIVE THE SAME TRAVEL
ALLOWANCES PRESCRIBED BY THE FEDERAL TRAVEL REGULATIONS FOR OTHER
FEDERAL EMPLOYEES ASSIGNED TO TEMPORARY DUTY. WE THEREFORE SUGGEST THAT
YOU DELETE THE CITATION TO 40 COMP. GEN. 479 OR USE IT ONLY TO SUPPORT
THE STATEMENT THAT EXCESS COST-OF-LIVING EXPENSES ARE NOT DEDUCTIBLE
FROM AN EMPLOYEE'S EARNINGS FROM OTHER EMPLOYMENT.
SECTION S8-5Q
FOR THE REASONS DISCUSSED ABOVE, WE RECOMMEND CHANGING THE REFERENCE
TO "INCIDENTAL" EXPENSES OCCASIONED BY THE ADVERSE ACTION TO "LEGAL"
EXPENSES, SINCE TRAVEL EXPENSES MAY BE CONSTRUED AS "INCIDENTAL."
SECTION S8-6
THE TEXT IS ACCURATELY STATED BUT THE EXAMPLE IS MISLEADING. FEDERAL
AND STATE WITHHOLDING TAXES SHOULD BE LEVIED ON THE BALANCE DUE THE
EMPLOYEE (AFTER RETIREMENT DEDUCTIONS AND OUTSIDE EARNINGS ARE
SUBTRACTED) BUT NOT BASED ON OUTSIDE EARNINGS, WHICH PRESUMABLY HAVE
ALREADY BEEN WITHHELD BY HIS OUTSIDE EMPLOYER. IN ANY CASE, A CASH
BASIS TAXPAYER MUST BE TAXED ON SALARY RECEIVED IN THE CURRENT TAX YEAR
(REGARDLESS OF WHEN THE SALARY WAS EARNED) AND ANY AMOUNT OWED BECAUSE
OF OUTSIDE EARNINGS IN THE PREVIOUS TAX YEAR OR EVEN IN THE SAME TAX
YEAR IS A MATTER TO BE SETTLED BETWEEN THE EMPLOYEE AND THE INTERNAL
REVENUE SERVICE.
B-180021(B) L/M, MAR 20, 1975
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
DAVID N. HENDERSON, HOUSE OF REPRESENTATIVES:
REFERENCE IS MADE TO YOUR LETTERS OF JULY 17, 1974, AND DECEMBER 13,
1974, REQUESTING OUR OFFICE TO PROVIDE AN ASSESSMENT OF EXISTING LAW AND
REGULATIONS GOVERNING "MAKE-WHOLE" REMEDIES FOR FEDERAL EMPLOYEES WHO
HAVE UNDERGONE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTIONS TO CORRECT
SUCH IMPROPER PERSONNEL ACTIONS. YOU ALSO ASK US TO IDENTIFY ANY GAPS
IN EXISTING COVERAGE WHICH WE BELIEVE WILL REQUIRE NEW LEGISLATION.
IN ADDITION, YOU HAVE ASKED US TO ANALYSE ARBITRATION AWARDS MADE TO
DATE UNDER EXECUTIVE ORDER NO. 11491, AND ITS PREDECESSOR EXECUTIVE
ORDER NO. 10988, WHICH, WE UNDERSTAND FROM MEMBERS OF YOUR STAFF, WILL
BE HELPFUL TO YOUR COMMITTEE IN CONSIDERING POSSIBLE CHANGES IN THE
PERMISSIBLE SCOPE OF ARBITRATION.
WITH RESPECT TO THIS LAST REQUEST, A STUDY OF THE APPROXIMATELY 600
ARBITRATION AWARDS INVOLVED IS ACTIVELY UNDERWAY. AS YOU SUGGEST, WE
WILL FORWARD A REPORT ON THIS STUDY SEPARATELY WHEN IT IS COMPLETED.
THE SINGLE MOST COMPREHENSIVE STATUTORY REMEDY FOR FEDERAL EMPLOYEES
WHO HAVE BEEN WRONGFULLY DEPRIVED OF PAY, ALLOWANCES, OR DIFFERENTIALS
IS THE BACK PAY ACT OF 1966, 5 U.S.C. SEC. 5596 (1970), WHICH THE CIVIL
SERVICE COMMISSION (CSC) ADMINISTERS. FOR MANY YEARS THE ACT HAS BEEN
INTERPRETED RATHER NARROWLY BY OUR OFFICE, AS REFLECTED IN CSC
REGULATIONS (5 C.F.R. PART 550, SUBPART H), WHICH, AS YOUR STAFF MEMBERS
POINTED OUT TO US, HAS GENERATED A NUMBER OF PROPOSALS TO PROVIDE NEW
MAKE-WHOLE REMEDIES THROUGH LEGISLATION. IN THE LAST 6 MONTHS, WE HAVE
BEEN REEXAMINING OUR OLD POSITIONS AND HAVE ISSUED A NUMBER OF DECISIONS
WHICH HAVE CONSIDERABLY BROADENED THE APPLICABILITY OF THE ACT. (COPIES
OF THESE DECISIONS HAVE PREVIOUSLY BEEN FURNISHED TO YOUR STAFF.) AMONG
THE MAJOR CHANGES IN APPROACH IS THE ADOPTION OF THE PRINCIPLE THAT ANY
FAILURE TO CARRY OUT A MANDATORY PERSONNEL REQUIREMENT - WHETHER THE
REQUIREMENT IS FOUND IN A LAW, AN AGENCY REGULATION, AN EXECUTIVE ORDER,
OR A VALID COLLECTIVE BARGAINING AGREEMENT - IS AN UNWARRANTED OR
UNJUSTIFIED PERSONNEL ACTION WHICH MAY BE CORRECTED UNDER THE BACK PAY
ACT, SUPRA, IF THE NECESSARY CAUSAL CONNECTION BETWEEN THE ACT AND THE
INJURY TO THE EMPLOYEE IS ESTABLISHED. WE NO LONGER REQUIRE THAT THE
WRONGFUL ACT BE AFFIRMATIVE RATHER THAN A FAILURE TO ACT, OR THAT THE
INJURY TO THE EMPLOYEE INVOLVE A "WITHDRAWAL" OF A BENEFIT RATHER THAN A
FAILURE TO CONFER THE BENEFIT AT ALL. OF MOST IMPORTANCE IS THE FACT
THAT WE NOW REGARD A BINDING ARBITRATION AWARD ON THE SAME BASIS AS IF
THE AWARD HAD BEEN MADE BY THE AGENCY HEAD, FOR THE PURPOSE OF APPLYING
THE REMEDIES AVAILABLE UNDER THE BACK PAY ACT. SEE TAB A FOR A MORE
DETAILED DISCUSSION OF THE SCOPE OF THE REMEDIES WE FEEL ARE AVAILABLE
UNDER THE ACT.
THESE POLICIES HAVE BEEN FORMULATED IN CLOSE COOPERATION WITH THE CSC
WHICH IS IN COMPLETE AGREEMENT WITH THIS NEW APPROACH. THE CSC HAS
RECENTLY CIRCULATED FOR COMMENT NEW DRAFT REGULATIONS WHICH INCORPORATE
THESE PRINCIPLES TO EXECUTIVE AGENCIES, EMPLOYEE ORGANIZATIONS, AND
OTHER CONCERNED PARTIES. (WE UNDERSTAND YOU HAVE OR WILL SOON BE SENT A
COPY OF THE PROPOSED REGULATIONS BY THE CSC AS WELL.) A DISCUSSION OF
SOME OF THE MAJOR PROPOSED CHANGES IN THE REGULATIONS IS ALSO INCLUDED
IN TAB A.
WITH REGARD TO OTHER MAKE-WHOLE REMEDIES, IN ADDITION TO THE BACK PAY
STATUTE, WE NOTE THAT HEALTH INSURANCE MAY BE REINSTATED UNDER THE
PROVISIONS OF 5 U.S.C. SEC. 8908 (SEE TAB B.1), AND LIFE INSURANCE MAY
BE RESTORED UNDER 5 U.S.C. SEC. 8706(F). (SEE TAB B.2.) DISCRIMINATION
IN GOVERNMENT EMPLOYMENT ON GROUNDS OF RACE, COLOR, RELIGION, SEX, OR
NATIONAL ORIGIN MAY BE CORRECTED UNDER PROVISIONS OF 42 U.S.C. SEC.
2000E - 16(B). (SEE TAB B.3.) SIMILARLY, THE ASSISTANT SECRETARY OF
LABOR FOR LABOR-MANAGEMENT RELATIONS (A/SLMR), UNDER SECTIONS 6(A)(4)
AND 6(B) OF EXECUTIVE ORDER NO. 11491, AS AMENDED, IS AUTHORIZED TO HEAR
UNFAIR LABOR PRACTICE COMPLAINTS AND TO REQUIRE THAT AGENCIES AND LABOR
ORGANIZATIONS TAKE SUCH AFFIRMATIVE ACTION AS HE CONSIDERS APPROPRIATE
WHEN UNFAIR LABOR PRACTICES ARE FOUND TO HAVE OCCURRED. THIS AUTHORITY
ENABLES THE A/SLMR TO ORDER AGENCIES TO TAKE CORRECTIVE ACTION
CONSISTENT WITH LAW AND REGULATIONS WHEN HE DETERMINES THAT AN EMPLOYEE
HAS BEEN DISCRIMINATED AGAINST BECAUSE OF HIS UNION ACTIVITY. ALL THE
MAKE-WHOLE REMEDIES DISCUSSED, SUPRA, ARE AVAILABLE FOR THE PURPOSE OF
CORRECTING IMPROPER PERSONNEL ACTIONS IN UNFAIR LABOR PRACTICE CASES
TOO. (SEE TAB B.4.)
WAIVER OF CLAIMS AGAINST EMPLOYEES FOR OVERPAYMENTS OF PAY AND
ALLOWANCES, INCLUDING EXCESS LEAVE CREDITED THROUGH ADMINISTRATIVE
ERROR, IS PERMITTED UNDER 5 U.S.C. SEC. 5584, AS IMPLEMENTED BY
REGULATIONS PROMULGATED BY THE GAO AT 4 C.F.R. SEC. 91, WHERE COLLECTION
WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE. (SEE TAB B.5.)
PUBLIC LAW 93-181, DECEMBER 14, 1973, 5 U.S.C. SEC. 6304(D) (SUPP.
III, 1973), PERMITS RESTORATION OF LEAVE TO AN EMPLOYEE THAT IS LOST
THROUGH NO FAULT OF HIS UNDER CERTAIN SPECIFIED CIRCUMSTANCES. (SEE TAB
B.6 FOR DISCUSSION OF THIS REMEDY.)
FINALLY, THE SECRETARY OF STATE HAS AUTHORITY UNDER PROVISIONS OF 22
U.S.C. SEC. 993 (SUPP. III, 1973), TO CORRECT CERTAIN ERRONEOUS
PERSONNEL ACTIONS THAT AFFECT FOREIGN SERVICE EMPLOYEES BY IMPLEMENTING
RECOMMENDATIONS OF GRIEVANCE BOARDS, PANELS, OR EQUAL OPPORTUNITY
APPEALS EXAMINERS AND BY AWARDING RETROACTIVE PROMOTIONS AND ADDITIONAL
INCREASES IN SALARY. SEE TAB B.7 FOR A DISCUSSION OF THIS AUTHORITY.
WE BELIEVE THAT THE PRESENT BACK PAY ACT WITH ITS IMPLEMENTING
REGULATIONS, EITHER EXISTING OR PROPOSED, AND THE OTHER STATUTORY
REMEDIES CITED ARE ADEQUATE IN MOST INSTANCES TO MAKE EMPLOYEES WHOLE.
HOWEVER, THERE ARE SOME GAPS IN COVERAGE, FOR WHICH, IF SUCH COVERAGE IS
DEEMED BY THE CONGRESS TO BE DESIRABLE, NEW LEGISLATION WOULD BE
NECESSARY.
REMEDIES NOT CURRENTLY AUTHORIZED UNDER THE BACK PAY ACT INCLUDE
PAYMENTS FOR ATTORNEY FEES AND LITIGATION EXPENSES OF THE EMPLOYEE IN
OBTAINING HIS REMEDY (SEE TAB C.1), INTEREST ON THE AMOUNT OF THE
MONETARY AWARD (SEE TAB C.2), AND CONSEQUENTIAL DAMAGES SUSTAINED BY THE
EMPLOYEE DURING THE PERIOD THE IMPROPER PERSONNEL ACTION WAS IN EFFECT.
(SEE TAB C.3.)
WE REFERRED EARLIER TO THE BENEFITS OF PUB. L. 93-181 WHICH PERMITS
RESTORATION OF LEAVE TO EMPLOYEES WHICH WOULD NORMALLY BE FORFEITED
UNDER CERTAIN PRESCRIBED CONDITIONS. THERE IS ONE INSTANCE IN WHICH WE
FEEL THAT THE LEGISLATIVE REMEDY HAS BEEN UNNECESSARILY RESTRICTED BY
CSC REGULATIONS. WHILE NORMALLY NO EMPLOYEE MAY BE CREDITED WITH ANNUAL
LEAVE AT THE END OF THE LEAVE YEAR IN EXCESS OF THE CEILING PRESCRIBED
BY LAW AND REGULATION, ANNUAL LEAVE WHICH HAD BEEN SCHEDULED IN ADVANCE
BUT WAS NOT USED BECAUSE OF "ADMINISTRATIVE ERROR" MAY BE RESTORED AND
PLACED IN A SEPARATE LEAVE ACCOUNT UNDER THE PROVISIONS OF THE NEW
STATUTE. HOWEVER, IF THE EMPLOYEE IS REINSTATED PURSUANT TO THE BACK
PAY ACT, HE MAY NOT BE ABLE TO TAKE ADVANTAGE OF PUB. L. 93-131 TO HAVE
ALL HIS LEAVE RESTORED. CIVIL SERVICE COMMISSION IMPLEMENTING
REGULATIONS, WHICH ARE CONTAINED IN THE ATTACHMENT TO FEDERAL PERSONNEL
MANUAL (FPM) LETTER NO. 630-22, DATED JANUARY 11, 1974, HAVE CONSTRUED
THE STATUTORY TERM "ADMINISTRATIVE ERROR" AS EXCLUDING "UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTIONS." TO CORRECT THIS SITUATION, WE ARE
PRESENTLY EXPLORING WITH CSC THE POSSIBILITY OF AN AMENDMENT TO ITS
CURRENT REGULATIONS. HOWEVER, IT MAY BE FELT THAT A LEGISLATIVE
AMENDMENT TO 5 U.S.C. SEC. 6304(D)(1) WILL BE REQUIRED. SEE TAB C.4 FOR
A FULLER DISCUSSION OF THIS PROBLEM.
UNDER TAB B.3, WE DISCUSS EXISTING REMEDIES FOR FAILURE TO AFFORD
EQUAL EMPLOYMENT OPPORTUNITY TO PERSONS WHO MAY NOT YET BE FEDERAL
EMPLOYEES WHERE THE FAILURE IS ATTRIBUTABLE TO DISCRIMINATION ON CERTAIN
SPECIFIED GROUNDS. HOWEVER, THE PERSON WHO WAS NOT HIRED INITIALLY BY
THE FEDERAL GOVERNMENT ON EQUALLY MERETRICIOUS GROUNDS BUT WHICH ARE NOT
BASED ON HIS RACE, COLOR, RELIGION, SEX, OR NATIONAL ORIGIN IS NOT
PROTECTED BY ANY EXISTING LEGISLATION. THIS GAP IS DISCUSSED UNDER TAB
C.5.
FINALLY, WE DISCUSS THE LACK OF A REMEDY FOR AN EMPLOYEE WHO WAS
WRONGFULLY REMOVED FROM SERVICE AND WHO PURCHASED COMMERCIAL HEALTH
INSURANCE TO PROTECT HIMSELF DURING THE PERIOD OF HIS REMOVAL. UPON
REINSTATEMENT UNDER THE BACK PAY ACT, NO PORTION OF THE COST OF THAT
COMMERCIAL INSURANCE MAY BE REIMBURSED UNDER EXISTING LAW OR
REGULATIONS. SEE TAB C.6.
THE DESIRABILITY OF LEGISLATION TO FILL THESE GAPS IS, OF COURSE, A
MATTER FOR CONGRESSIONAL DETERMINATION. WE ARE NOT PREPARED TO MAKE A
RECOMMENDATION AT THE PRESENT TIME FOR OR AGAINST ENACTMENT OF SUCH
LEGISLATION. THE DISCUSSION IN TAB C IS MERELY AN ATTEMPT TO IDENTIFY
THE GAPS IN RESPONSE TO YOUR COMMITTEE'S REQUEST.
IN SUMMARY, WE CONCLUDE FROM OUR ANALYSIS THAT EXISTING STATUTORY
MAKE-WHOLE REMEDIES ARE GENERALLY ADEQUATE TO RESTORE EMPLOYEES WHO HAVE
UNDERGONE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTIONS TO THE SAME
FINANCIAL POSITION THEY WOULD HAVE BEEN IN IF THE WRONGFUL ACTION HAD
NOT TAKEN PLACE. THERE ARE A FEW SITUATIONS WHICH ARE NOT COVERED AND
WHICH MAY REQUIRE LEGISLATIVE ACTION IF THE CONGRESS WISHES TO PROVIDE A
REMEDY IN THESE CASES. WE HAVE IDENTIFIED THESE "GAPS" AND THE TYPE OF
AMENDMENT THAT WOULD BE NECESSARY.
WE HOPE THE INFORMATION PROVIDED IS RESPONSIVE TO YOUR REQUEST, AND
WE WILL BE GLAD TO PROVIDE WHATEVER ADDITIONAL ASSISTANCE YOU MAY
REQUIRE.
BACK PAY STATUTE
THE BACK PAY ACT, 5 U.S.C. SEC. 5596 (1970), IS THE MAJOR STATUTORY
AUTHORIZATION FOR PROVISION OF "MAKE-WHOLE" REMEDIES TO EMPLOYEES WHO
HAVE UNDERGONE AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION. THE
STATUTE PROVIDES:
"SEC. 5596. BACK PAY DUE TO UNJUSTIFIED PERSONNEL ACTION
"(A) FOR THE PURPOSE OF THIS SECTION, 'AGENCY' MEANS -
"(1) AN EXECUTIVE AGENCY;
"(2) THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS;
"(3) THE LIBRARY OF CONGRESS;
"(4) THE GOVERNMENT PRINTING OFFICE; AND
"(5) THE GOVERNMENT OF THE DISTRICT OF COLUMBIA.
"(B) AN EMPLOYEE OF AN AGENCY WHO, ON THE BASIS OF AN ADMINISTRATIVE
DETERMINATION OR A TIMELY APPEAL, IS FOUND BY APPROPRIATE AUTHORITY
UNDER APPLICABLE LAW OR REGULATION TO HAVE UNDERGONE AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION THAT HAS RESULTED IN THE WITHDRAWAL OR
REDUCTION OF ALL OR A PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS OF
THE EMPLOYEE -
"(1) IS ENTITLED, ON CORRECTION OF THE PERSONNEL ACTION, TO RECEIVE
FOR THE PERIOD FOR WHICH THE PERSONNEL ACTION WAS IN EFFECT AN AMOUNT
EQUAL TO ALL OR ANY PART OF THE PAY, ALLOWANCES, OR DIFFERENTIALS, AS
APPLICABLE, THAT THE EMPLOYEE NORMALLY WOULD HAVE EARNED DURING THAT
PERIOD IF THE PERSONNEL ACTION HAD NOT OCCURRED, LESS ANY AMOUNTS EARNED
BY HIM THROUGH OTHER EMPLOYMENT DURING THAT PERIOD; AND
"(2) FOR ALL PURPOSES, IS DEEMED TO HAVE PERFORMED SERVICE FOR THE
AGENCY DURING THAT PERIOD, EXCEPT THAT THE EMPLOYEE MAY NOT BE CREDITED,
UNDER THIS SECTION, LEAVE IN AN AMOUNT THAT WOULD CAUSE THE AMOUNT OF
LEAVE TO HIS CREDIT TO EXCEED THE MAXIMUM AMOUNT OF LEAVE AUTHORIZED FOR
THE EMPLOYEE BY LAW OR REGULATION.
"(C) THE CIVIL SERVICE COMMISSION SHALL PRESCRIBE REGULATIONS TO
CARRY OUT THIS SECTION. HOWEVER, THE REGULATIONS ARE NOT APPLICABLE TO
THE TENNESSEE VALLEY AUTHORITY AND ITS EMPLOYEES."
THE CIVIL SERVICE COMMISSION HAS PROMULGATED IMPLEMENTING REGULATIONS
FOR THIS STATUTE IN 5 C.F.R. CHAPTER 550, SUBPART H, WHICH PROVIDE AS
FOLLOWS:
"SUBPART H - BACK PAY
"AUTHORITY: THE PROVISIONS OF THIS SUBPART H ISSUED UNDER 5 U.S.C.
5596.
"SEC. 550.801 SCOPE.
"(A) COVERAGE. THIS SUBPART APPLIES TO (1) AGENCIES AS DEFINED IN
SEC. 550.802(A), AND (2) EMPLOYEES AS DEFINED IN SEC. 550.802(B).
"(B) APPLICABILITY. THIS SUBPART AND SECTION 5596 OF TITLE 5, UNITED
STATES CODE, APPLY TO THE COMPUTATION, PAYMENT, AND RESTORATION OF PAY,
ALLOWANCES, DIFFERENTIALS, AND EMPLOYMENT BENEFITS FOR THE PURPOSE OF
MAKING AN EMPLOYEE WHOLE WHEN THE EMPLOYEE, ON THE BASIS OF AN
ADMINISTRATIVE DETERMINATION OR A TIMELY APPEAL, IS FOUND TO HAVE
UNDERGONE AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION.
"SEC. 550.802 DEFINITIONS.
"IN THIS SUBPART:
"(A) 'AGENCY' MEANS (1) AN EXECUTIVE AGENCY (OTHER THAN THE TENNESSEE
VALLEY AUTHORITY) AS DEFINED BY SECTION 105 OF TITLE 5, UNITED STATES
CODE; (2) THE ADMINISTRATIVE OFFICE OF THE U.S. COURTS; (3) THE
LIBRARY OF CONGRESS; (4) THE GOVERNMENT PRINTING OFFICE; AND (5) THE
GOVERNMENT OF THE DISTRICT OF COLUMBIA.
"(B) 'EMPLOYEE' MEANS AN EMPLOYEE OF AN AGENCY, INCLUDING A FORMER
EMPLOYEE.
"SEC. 550.803 DETERMINING ENTITLEMENT.
"(A) THE REQUIREMENT FOR AN ADMINISTRATIVE DETERMINATION REFERRED TO
IN THE PHRASE 'ON THE BASIS OF AN ADMINISTRATIVE DETERMINATION OR A
TIMELY APPEAL' IN SECTION 5596 OF TITLE 5, UNITED STATES CODE, IS MET
WHEN AN APPROPRIATE AUTHORITY IN AN AGENCY MAKES A DECISION ON ITS OWN
INITIATIVE IN A CASE INVOLVING AN UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION. THE DECISION MAY BE ORAL BUT SHALL BE CONFIRMED IN WRITING.
"(B) THE REQUIREMENT FOR A TIMELY APPEAL REFERRED TO IN THE PHRASE
'ON THE BASIS OF AN ADMINISTRATIVE DETERMINATION OR A TIMELY APPEAL' IN
SECTION 5596 OF TITLE 5, UNITED STATES CODE, IS MET WHEN AN EMPLOYEE OR
HIS AUTHORIZED REPRESENTATIVE INITIATES AN APPEAL UNDER AN APPEALS
SYSTEM OR PROCEDURE ESTABLISHED BY LAW, EXECUTIVE ORDER, OR REGULATION
AND THAT APPEAL IS ACCEPTED AS TIMELY FILED BY THE GOVERNMENT AUTHORITY
ADMINISTERING THE APPEALS SYSTEM OR PROCEDURE CONCERNED.
"(C) THE APPROPRIATE AUTHORITY REFERRED TO IN SECTION 5596 OF TITLE
5, UNITED STATES CODE, AND THIS SUBPART IS (1) THE AGENCY OR THE OFFICE
OR OFFICIAL IN AN AGENCY AUTHORIZED UNDER APPLICABLE LAW OR REGULATION
TO CORRECT, OR TO DIRECT THE CORRECTION OF, THE UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION, OR (2) A COURT HAVING JURISDICTION TO MAKE
A DETERMINATION THAT A PERSONNEL ACTION IS UNJUSTIFIED OR UNWARRANTED.
"(D) TO BE UNJUSTIFIED OR UNWARRANTED A PERSONNEL ACTION MUST BE
DETERMINED TO BE IMPROPER OR ERRONEOUS ON THE BASIS OF EITHER
SUBSTANTIVE OR PROCEDURAL DEFECTS AFTER CONSIDERATION OF THE EQUITABLE
LEGAL, AND PROCEDURAL ELEMENTS INVOLVED IN THE PERSONNEL ACTION.
"(E) A PERSONNEL ACTION REFERRED TO IN SECTION 5596 OF TITLE 5,
UNITED STATES CODE, AND THIS SUBPART IS ANY ACTION BY AN AUTHORIZED
OFFICIAL OF AN AGENCY WHICH RESULTS IN THE WITHDRAWAL OR REDUCTION OF
ALL OR ANY PART OF THE PAY ALLOWANCES, OR DIFFERENTIALS OF AN EMPLOYEE
AND INCLUDES, BUT IS NOT LIMITED TO, SEPARATIONS FOR ANY REASON
(INCLUDING RETIREMENT), SUSPENSIONS, FURLOUGHS WITHOUT PAY, DEMOTIONS,
REDUCTIONS IN PAY, AND PERIODS OF ENFORCED PAID LEAVE WHETHER OR NOT
CONNECTED WITH AN ADVERSE ACTION COVERED BY PART 752 OF THIS CHAPTER.
"SEC. 550.804 CORRECTIVE ACTION.
"(A) WHEN AN APPROPRIATE AUTHORITY CORRECTS AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION, THE AGENCY SHALL RECOMPUTE FOR THE PERIOD
COVERED BY THE CORRECTIVE ACTION THE PAY, ALLOWANCES, DIFFERENTIALS, AND
LEAVE ACCOUNT (LIMITING THE ACCUMULATION TO THE MAXIMUM PRESCRIBED BY
LAW OR REGULATION FOR THE EMPLOYEE) OF THE EMPLOYEE AS IF THE
UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION HAD NOT OCCURRED AND THE
EMPLOYEE SHALL BE DEEMED FOR ALL PURPOSES TO HAVE RENDERED SERVICE IN
THE AGENCY FOR THE PERIOD COVERED BY THE CORRECTIVE ACTION. IN MAKING
ITS COMPUTATION UNDER THIS PARAGRAPH, AN AGENCY SHALL NOT INCLUDE AS
ALLOWANCES ANY AMOUNT WHICH REPRESENTS REIMBURSEMENT FOR EXPENSES WHICH
WOULD HAVE BEEN INCURRED BY AN EMPLOYEE IN THE PERFORMANCE OF HIS JOB IF
THE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION HAD NOT OCCURRED BUT
WHICH WERE NOT INCURRED BECAUSE OF THE UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION BUT SHALL INCLUDE OTHER ALLOWANCES WHICH ARE A FORM OF
REMUNERATION TO THE EMPLOYEE FOR SERVICES THAT OTHERWISE WOULD HAVE BEEN
RENDERED IN THE JOB.
"(B) IN RECOMPUTING THE PAY, ALLOWANCES, DIFFERENTIALS, AND LEAVE
ACCOUNT OF AN EMPLOYEE UNDER PARAGRAPH (A) OF THIS SECTION, THE AGENCY
SHALL INCLUDE THE FOLLOWING:
"(1) PREMIUM PAY WHICH THE EMPLOYEE WOULD HAVE RECEIVED HAD IT NOT
BEEN FOR THE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION;
"(2) CHANGES IN PAY RATES BY REASON OF WAGE SURVEYS, ADMINISTRATIVE
ACTION, LAW, OR OTHER CHANGES OF GENERAL APPLICATION;
"(3) CHANGES IN ALLOWANCE OR DIFFERENTIAL RATES;
"(4) WITHIN-GRADE OR STEP INCREASES OR OTHER PERIODIC INCREASES WHICH
WOULD OTHERWISE HAVE BECOME DUE;
"(5) CHANGES IN PAY CAUSED BY CHANGES IN ASSIGNED WORKING-SHIFTS;
"(6) CHANGES IN THE EMPLOYEE'S LEAVE EARNING RATE; AND
"(7) ANY OTHER CHANGES WHICH WOULD AFFECT THE AMOUNT OF PAY,
ALLOWANCES, DIFFERENTIALS OR LEAVE WHICH THE EMPLOYEE WOULD HAVE EARNED
HAD IT NOT BEEN FOR THE UNJUSTIFIED OR UNWARRENTED PERSONNEL ACTION.
"(C) SUBJECT TO THE PROVISIONS OF PARAGRAPH (D) OF THIS SECTION, THE
PERIOD FOR WHICH RECOMPUTATION IS REQUIRED UNDER PARAGRAPH (A) OF THIS
SECTION IS THE PERIOD COVERED BY THE UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION WHICH IS CORRECTED AND MAY NOT EXTEND (1) BEYOND THE
DATE OF THE EMPLOYEE'S DEATH, OR (2) BEYOND THE DATE ON WHICH THE
EMPLOYEE WAS PROPERLY SEPARATED FROM THE ROLLS OF HIS AGENCY SUCH AS BY
RESIGNATION, RETIREMENT, REMOVAL, REDUCTION IN FORCE, EXPIRATION OF
APPOINTMENT, OR TRANSFER TO ANOTHER AGENCY, WHEN THE EMPLOYEE CONTINUED
ON THE ROLLS OF THE AGENCY BEYOND THE DATE ON WHICH THE UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION WAS TAKEN AND THE SEPARATION WOULD HAVE
BEEN EFFECTED EVEN THOUGH THE UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION HAD NOT BEEN TAKEN.
"(D) IN COMPUTING THE AMOUNT OF BACK PAY UNDER THIS SECTION AND
SECTION 5596 OF TITLE 5, UNITED STATES CODE, THE AGENCY MAY NOT (1)
INCLUDE ANY PERIOD DURING WHICH THE EMPLOYEE WAS NOT READY AND ABLE TO
PERFORM HIS JOB BECAUSE OF INCAPACITATING ILLNESS, EXCEPT THAT THE
AGENCY SHALL GRANT UPON THE REQUEST OF THE EMPLOYEE ANY SICK OR ANNUAL
LEAVE TO HIS CREDIT TO COVER THE PERIOD OF INCAPACITY BY REASON OF
ILLNESS, OR (2) INCLUDE ANY PERIOD DURING WHICH THE EMPLOYEE WAS
UNAVAILABLE FOR THE PERFORMANCE OF HIS JOB AND HIS UNAVAILABILITY WAS
NOT RELATED TO, OR CAUSED BY, THE UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION.
"(E) IN COMPUTING THE AMOUNT OF BACK PAY DUE AN EMPLOYEE UNDER THIS
SECTION AND SECTION 5596 OF TITLE 5, UNITED STATES CODE, THE AGENCY
SHALL DEDUCT THE AMOUNTS EARNED BY THE EMPLOYEE FROM OTHER EMPLOYMENT
DURING THE PERIOD COVERED BY THE CORRECTED PERSONNEL ACTION. THE AGENCY
SHALL INCLUDE AS OTHER EMPLOYMENT ONLY THAT EMPLOYMENT ENGAGED IN BY THE
EMPLOYEE TO TAKE THE PLACE OF THE EMPLOYMENT FROM WHICH THE EMPLOYEE WAS
SEPARATED BY THE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION.
"(F) IN COMPUTING THE AMOUNT OF BACK PAY DUE AN EMPLOYEE UNDER THIS
SECTION AND SECTION 5596(B) OF TITLE 5, UNITED STATE CODE, IF THE
EMPLOYEE HAS BEEN RESTORED WITHIN 1 YEAR AFTER HIS ERRONEOUS SEPARATION,
THE AGENCY MAY NOT DELETE ANY PERIOD FROM COMPUTATION ON THE BASIS THAT
THE EMPLOYEE WAS UNDER OBLIGATION TO MAKE AN EFFORT TO SECURE OTHER
EMPLOYMENT DURING THE PERIOD COVERED BY THE UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION."
AS IS THE CASE WITH MANY STATUTORY REMEDIES, THE INTERPRETATION OF
THE LEGISLATIVE LANGUAGE BY THOSE WHOM THE CONGRESS HAS DESIGNATED TO
ADMINISTER OR TO APPLY THE PROVISIONS OF THE ACT TENDS TO BE DYNAMIC,
CHANGING TO MEET NEW NEEDS OR NEW SITUATIONS NOT PREVIOUSLY ENCOUNTERED.
AT THE PRESENT TIME, THE GENERAL ACCOUNTING OFFICE (GAO), IN THE
EXERCISE OF ITS SETTLEMENT AUTHORITY (31 U.S.C. SEC. 71, ET SEQ.), AND
THE CIVIL SERVICE COMMISSION (CSC), THE ADMINISTERING AGENCY, HAVE
AGREED ON THE FOLLOWING INTERPRETATIONS OF THE TERMS OF THE ACT, ON
WHICH WE BASE THE DECISIONS DESCRIBED BELOW:
1. "APPROPRIATE AUTHORITY" MAY MEAN AN AGENCY HEAD, THE DECISION
MAKER DESIGNATED PURSUANT TO A STATUTORY APPEALS PROCEDURE (E.G., THE
APPEALS REVIEW BOARD, CSC), AN ADMINISTRATIVE LAW JUDGE, AN ARBITRATOR
APPOINTED THROUGH A COLLECTIVE BARGAINING AGREEMENT, OR THE COMPTROLLER
GENERAL.
2. AN "UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION" MEANS ANY ACT OF
COMMISSION OR OMISSION BY AN AUTHORIZED OFFICIAL OF AN AGENCY WHICH IS
IN VIOLATION OF A NONDISCRETIONARY REQUIREMENT, WHETHER THAT REQUIREMENT
IS FOUND IN A LAW, REGULATION, EXECUTIVE ORDER, AGENCY PERSONNEL POLICY
MANUAL, OR NEGOTIATED COLLECTIVE BARGAINING AGREEMENT.
3. "RESULTED IN THE WITHDRAWAL, ETC.," MEANS THAT THE UNJUSTIFIED OR
UNWARRANTED ACTION MUST HAVE DIRECTLY CAUSED THE HARM TO THE EMPLOYEE
FOR WHICH HE SEEKS RESTITUTION. FOR EXAMPLE, A FAILURE TO CONSIDER AN
EMPLOYEE FOR A PROMOTION, WHEN SEVERAL OTHER EQUALLY QUALIFIED
CANDIDATES ARE UNDER CONSIDERATION AS WELL, IN VIOLATION OF A BINDING
AGREEMENT IS AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION BUT NO
BACKPAY IS WARRANTED SINCE IT CANNOT BE SAID THAT "BUT FOR" THE WRONGFUL
ACTION, THE EMPLOYEE WOULD HAVE RECEIVED THE PROMOTION.
4. "WITHDRAWAL OR REDUCTION OF ALL OR A PART OF PAY, ETC.," INCLUDES
FAILURE TO GIVE THE BENEFIT IN QUESTION IN THE FIRST PLACE.
5. THE TERM "PAY, ALLOWANCES, OR DIFFERENTIALS" INCLUDES, IN
ADDITION TO THE USUAL SALARY AND PREMIUM PAY BENEFITS INCLUDED IN THE
PRESENT REGULATIONS, A NUMBER OF MONETARY BENEFITS WHICH ARE THE USUAL
PERQUISITES OF FEDERAL EMPLOYMENT. THUS, TRAVEL AND TRANSPORTATION
COSTS, ANNUAL AND SICK LEAVE, AND HEALTH INSURANCE BENEFITS, FOR
EXAMPLE, COULD BE INCLUDED IN A "MAKE-WHOLE" AWARD BUT BENEFITS NOT
DIRECTLY ATTRIBUTABLE TO HIS STATUS AS A FEDERAL EMPLOYEE WOULD NOT -
E.G., ACCESS TO PUBLIC TRANSPORTATION, MAKING A CAR UNNECESSARY.
THE CONCEPTS HAVE BEEN INCLUDED, FOR THE MOST PART, IN A CSC PROPOSED
REVISION OF THE BACK PAY ACT REGULATIONS WHICH IS PRESENTLY CIRCULATING
FOR COMMENTS TO AGENCIES, FEDERAL EMPLOYEE LABOR ORGANIZATIONS, AND
OTHER CONCERNED PARTIES.
IN ADDITION TO THE CONCEPTUAL CHANGES DISCUSSED ABOVE, THE CSC'S
PROPOSED REVISIONS WOULD EXPAND THE MEANING OF "PAY, ALLOWANCES, OR
DIFFERENTIALS" TO INCLUDE, IN ADDITION TO THE USUAL SALARY AND PREMIUM
PAY BENEFITS, AND THE RESTORATION OF ANNUAL LEAVE, SICK LEAVE, AND
HEALTH AND LIFE INSURANCE PERMITTED UNDER THE PRESENT REGULATIONS, A
NUMBER OF OTHER BENEFITS WHICH ARE DIRECT PERQUISITES OF FEDERAL
EMPLOYMENT. NO DECISIONS INVOLVING AWARDS OF COMPENSATION IN THE
SITUATIONS DESCRIBED BELOW HAVE BEEN RENDERED TO DATE, OF COURSE, THEY
ARE OFFERED AS ILLUSTRATIONS OF POTENTIALLY ALLOWABLE AWARDS, IF THE NEW
REGULATIONS ARE PROMULGATED IN THEIR PRESENT FORM. NOTE THAT IN EACH
INSTANCE THE BENEFIT IS ONE TO WHICH THE EMPLOYEE WAS ENTITLED BY VIRTUE
OF HIS FEDERAL EMPLOYMENT STATUS. BENEFITS HE MIGHT HAVE BEEN ENJOYING
AT THE TIME THE WRONGFUL ACTION TOOK PLACE BUT WHICH WERE NOT
ENTITLEMENTS ARE NOT COMPENSABLE.
1. TRAVEL AND TRANSPORTATION COSTS AND COSTS INCURRED IN THE STORAGE
OF HOUSEHOLD GOODS, SHIPMENT OF HOUSEHOLD GOODS AND SHIPMENT OF
PRIVATELY OWNED AUTOMOBILE.
EXAMPLE: A LARGE AGENCY IN THE EXECUTIVE BRANCH HAS ADOPTED A
POLICY, AS PART OF A COLLECTIVE BARGAINING AGREEMENT, OF PAYING TRAVEL
AND TRANSPORTATION EXPENSES OF NEW APPOINTEE MEDICAL OFFICERS, A
MANPOWER SHORTAGE POSITION, FROM THEIR RESIDENCES AT THE TIME OF
SELECTION TO THEIR FIRST DUTY STATIONS, PURSUANT TO 5 U.S.C. 5723 AND
IMPLEMENTING REGULATIONS.
THIS POLICY IS VIOLATED BY A SUBORDINATE ELEMENT OF THE AGENCY WHICH
FAILS TO AUTHORIZE THE PAYMENT OF SUCH EXPENSE FOR A NEW APPOINTEE
MEDICAL OFFICER. SUBSEQUENTLY, THIS MEDICAL OFFICER DISCOVERS THAT ALL
HIS FELLOW MEDICAL OFFICERS HAVE BEEN PAID TRAVEL AND TRANSPORTATION
EXPENSE TO THEIR FIRST DUTY STATIONS AND HE THEREFORE SUBMITS A CLAIM
FOR HIS TRAVEL AND TRANSPORTATION EXPENSES. THE AGENCY DENIES HIS CLAIM
AND A GRIEVANCE ARBITRATOR FINDS THAT THE DENIAL WAS AN UNWARRANTED
PERSONNEL ACTION SINCE THE COLLECTIVE BARGAINING AGREEMENT MADE IT
MANDATORY TO PAY SUCH EXPENSES TO NEW APPOINTEE MEDICAL OFFICERS. THE
ARBITRATOR COULD ORDER THE AGENCY TO PAY THESE EXPENSES RETROACTIVELY IN
ORDER TO MAKE HIM WHOLE.
2. HOME LEAVE.
EXAMPLE: AN EMPLOYEE ASSIGNED OVERSEAS IN GERMANY IS SEPARATED FROM
HIS POSITION IN A REDUCTION-IN-FORCE ACTION AND RETURNED AT GOVERNMENT
EXPENSE TO HIS ACTUAL RESIDENCE IN THE UNITED STATES. UPON
REINSTATEMENT, ON THE BASIS THAT HIS SEPARATION WAS AN UNJUSTIFIED
PERSONNEL ACTION, HE APPARENTLY WOULD BE ENTITLED TO REMAIN IN THE
UNITED STATES ON HOME LEAVE, IF ELIGIBLE UNDER THE PROVISIONS OF 5
C.F.R. SEC. 630.606 (1974), BEFORE RETURNING TO HIS OVERSEAS POSITION.
EXAMPLES OF RECENT DECISIONS PROVIDING MAKE-WHOLE REMEDIES UNDER THE
BACKPAY STATUTE AND IMPLEMENTING REGULATIONS ARE SUMMARIZED BELOW.
RETROACTIVE PROMOTIONS. WHERE AN APPROPRIATE AUTHORITY SUCH AS AN
AGENCY HEAD OR AN OFFICIAL DESIGNATED BY HIM, THE CIVIL SERVICE
COMMISSION, THE COMPTROLLER GENERAL, A COURT OF COMPETENT JURISDICTION
OR AN ARBITRATOR IN A BINDING LABOR-MANAGEMENT ARBITRATION CASE
DETERMINES THAT AN EMPLOYEE HAS UNDERGONE AN UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION BY VIRTUE OF NOT RECEIVING A PROMOTION, TEMPORARY OR
PERMANENT, ON A SPECIFIED DATE TO WHICH HE WAS ENTITLED UNDER AGENCY
REGULATIONS OR A COLLECTIVE BARGAINING AGREEMENT, SUCH EMPLOYEE MAY BE
AWARDED THE PROMOTION RETROACTIVELY, TOGETHER WITH BACKPAY, ALLOWANCES
AND DIFFERENTIALS. B-180311, OCTOBER 4, 1974, 54 COMP. GEN. ___;
B-180010, OCTOBER 31, 1974, 54 ID. ___; B-181173, NOVEMBER 13, 1974, 54
ID. ___; B-181069, NOVEMBER 20, 1974, 54 ID. ___; B-180010, DECEMBER
2, 1974, 54 ID. ___; B-181271, DECEMBER 30, 1974, 54 ID. ___.
SEPARATIONS AND REMOVALS. IN CASES WHERE AN APPROPRIATE AUTHORITY
HAS DETERMINED THAT AN EMPLOYEE HAS BEEN IMPROPERLY REMOVED OR SEPARATED
IN VIOLATION OF A MANDATORY REQUIREMENT, THEREBY CONSTITUTING AN
UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION, THE EMPLOYEE IS ENTITLED TO
BE REINSTATED ON A RETROACTIVE BASIS WITH BACKPAY, ALLOWANCES AND
DIFFERENTIALS FROM THE DATE THE IMPROPER ACTION WAS EFFECTIVE, PURSUANT
TO APPLICABLE REGULATIONS. 53 COMP. GEN. 824 (1974). THIS REMEDY HAS
EVEN BEEN APPLIED IN A CASE WHERE AN INDIVIDUAL RECEIVED AN OFFER OF
EMPLOYMENT (NEW APPOINTMENT) THAT WAS SUBSEQUENTLY WITHDRAWN BY THE
AGENCY. IT WAS DETERMINED THAT THE AGENCY'S WITHDRAWAL OF ITS
EMPLOYMENT OFFER CONSTITUTED CONSTRUCTIVELY AN IMPROPER DISCHARGE, AND
REINSTATEMENT OF THE EMPLOYEE TOGETHER WITH BACKPAY ALLOWANCES AND
DIFFERENTIALS WAS ORDERED FROM THE ORIGINAL APPOINTMENT DATE AS SET
FORTH IN THE OFFER. B-175373, APRIL 21, 1972.
SUSPENSIONS, FURLOUGHS WITHOUT PAY AND PERIODS OF ENFORCED LEAVE.
BACKPAY ALLOWANCES AND DIFFERENTIALS HAVE BEEN ALLOWED FOR EMPLOYEES WHO
WERE SUSPENDED OR PLACED ON INVOLUNTARY LEAVE IN CONNECTION WITH
PERSONNEL ACTIONS THAT WERE SUBSEQUENTLY DETERMINED BY APPROPRIATE
AUTHORITIES TO HAVE BEEN UNJUSTIFIED OR UNWARRANTED. 39 COMP. GEN. 154
(1959), ABBETT V. UNITED STATES, 381 F.2D 609 (5TH CIR. 1967), SEEBACH
V. UNITED STATES, 182 CT. CL. 342 (1968).
AN EMPLOYEE, WHOSE AGENCY VIOLATED A COLLECTIVE BARGAINING AGREEMENT
TO "MAKE EVERY EFFORT" TO FIND HIM LIMITED DUTY WORK AFTER HE WAS
INJURED ON THE JOB AND INSTEAD PLACED HIM ON EXTENDED ADMINISTRATIVE
LEAVE, MAY BE GIVEN RETROACTIVE PAY FOR THE JOB HE COULD HAVE PERFORMED
BUT FOR THE AGENCY'S FAILURE TO COMPLY WITH THE AGREEMENT. 53 COMP.
GEN. ___, JUNE 25, 1974.
EMPLOYEES WHO WERE PLACED ON VOLUNTARY ANNUAL LEAVE IN LIEU OF
SUSPENSION STATUS OR SUSPENDED FROM THEIR POSITIONS AS A RESULT OF
MISCONDUCT CHARGES THAT WERE LATER CANCELLED AND DETERMINED TO HAVE BEEN
UNJUSTIFIED AND UNWARRANTED PERSONNEL ACTIONS, WERE RECREDITED WITH THE
LEAVE THEY USED AS A RESULT OF THE IMPROPER AGENCY ACTION. B-178712,
JULY 16, 1973. SIMILARLY, BACKPAY, ALLOWANCES AND DIFFERENTIALS WERE
ALLOWED FOR AN EMPLOYEE WHO TOOK LEAVE WITHOUT PAY IN CONNECTION WITH AN
IMPROPER REDUCTION-IN-FORCE ACTION WHEN HE WAS OFFERED AND ACCEPTED THE
OPPORTUNITY OF EXTENDING THE NORMAL 60-DAY NOTICE OF SEPARATION PERIOD
BY 30 DAYS IN A LEAVE-WITHOUT-PAY STATUS. B-172195(.05), NOVEMBER 23,
1971. SIMILARLY, WHEN AN EMPLOYEE HAS TAKEN ANNUAL LEAVE INCIDENT TO AN
AUTHORIZED EXTENSION OF REDUCTION-IN-FORCE NOTICE PERIOD, WE HAVE
ALLOWED SUCH LEAVE TO BE RECREDITED TO THE EMPLOYEE'S ACCOUNT UPON A
DETERMINATION BY APPROPRIATE AUTHORITY THAT THE REDUCTION IN FORCE WAS
AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION. B-176846, OCTOBER 25,
1972.
RETROACTIVE PERIODIC STEP INCREASES. RETROACTIVE PERIODIC STEP
INCREASES TOGETHER WITH BACKPAY HAVE BEEN ALLOWED EMPLOYEES, UPON A
DETERMINATION BY APPROPRIATE AUTHORITY THAT SUCH STEP INCREASES WERE
DELAYED AS A RESULT OF ADMINISTRATIVE ERROR OR UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTIONS. 37 COMP. GEN. 300 (1957), 37 ID. 774
(1958), B-173976(.10), JULY 11, 1972.
RETROACTIVE CHANGE IN APPOINTMENTS. A RETROACTIVE CHANGE IN
APPOINTMENT TOGETHER WITH BACKPAY HAS BEEN PERMITTED UPON A
DETERMINATION BY APPROPRIATE AUTHORITY THAT AN EMPLOYEE WAS INITIALLY
APPOINTED IN A LOWER GRADE THAN THE GRADE REQUIRED BY NONDISCRETIONARY
AGENCY POLICY. B-181223, JULY 29, 1974.
ENVIRONMENTAL AND HAZARDOUS DUTY DIFFERENTIALS. WHERE EMPLOYEES ARE
SUBSEQUENTLY DETERMINED BY APPROPRIATE AUTHORITY TO HAVE WORKED UNDER
ENVIRONMENTAL OR HAZARDOUS CONDITIONS ENTITLING THEM TO ADDITIONAL
COMPENSATION, BACKPAY FOR SUCH DIFFERENTIALS HAS BEEN PERMITTED. 53
COMP. GEN. 789 (1974), B-163901, MAY 2, 1973.
RETROACTIVE ADJUSTMENT OF RATE OF PAY. BACKPAY HAS BEEN ALLOWED IN A
CASE WHERE THE STEP RATE OF A PREVAILING RATE EMPLOYEE WHO HAS CONVERTED
TO THE GENERAL SCHEDULE WAS DETERMINED BY APPROPRIATE AUTHORITY TO HAVE
BEEN SET AT A LOWER RATE THAN REQUIRED BY APPLICABLE REGULATIONS. 51
COMP. GEN. 656 (1972). AN EMPLOYEE WHO WAS DENIED THE BENEFIT OF THE
HIGHEST PREVIOUS RATE RULE WHICH THE AGENCY ADMITS HE WOULD HAVE
RECEIVED IF HE HAD BEEN WILLING TO DROP CERTAIN GRIEVANCE ACTIONS
INITIATED BY HIM, WAS AWARDED THE RATE RETROACTIVELY SINCE THE AGENCY'S
TERMS WERE IMPROPER AND IN CARRYING OUT ITS THREAT TO AWARD HIM THE
LOWER RATE IF HE DID NOT DROP HIS GRIEVANCE ACTIONS, IT HAD COMMITTED AN
UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION. B-180997, OCTOBER 30,
1974.
POST DIFFERENTIAL AND LIVING QUARTERS ALLOWANCES. THE BACK PAY ACT
HAS BEEN APPLIED TO COMPENSATE AN EMPLOYEE RETROACTIVELY WHO WAS REMOVED
WHILE STATIONED OVERSEAS AND ENTITLED TO A POST DIFFERENTIAL UNDER A
PROVISION OF LAW SUCH AS 5 U.S.C. SEC. 5925 (1970). THE EMPLOYEE WAS
TRANSPORTED BACK TO THE UNITED STATES WHERE HE PROCEEDED WITH LEGAL
ACTION THAT ULTIMATELY SUCCEEDED IN HIS REINSTATEMENT. ALTHOUGH THE
EMPLOYEE REMAINED IN THE UNITED STATES THROUGHOUT THE PERIOD HIS LEGAL
ACTION WAS PENDING, HIS ENTITLEMENT TO A POST DIFFERENTIAL WAS INCLUDED
IN THE AWARD SINCE HE WOULD HAVE RECEIVED IT BUT FOR HIS UNJUSTIFIED
REMOVAL. VITARALLI V. UNITED STATES, 150 CT. CL. 59 (1960). THE BACK
PAY ACT HAS BEEN APPLIED TO COMPENSATE AN EMPLOYEE STATIONED OVERSEAS
WHO, AT THE TIME OF AN UNJUSTIFIED REMOVAL, WAS RECEIVING A LIVING
QUARTERS ALLOWANCE PURSUANT TO 5 U.S.C. SEC. 5923 (1970) AND, SECTION
031, DEPARTMENT OF STATE STANDARDIZED REGULATIONS (GOVERNMENT CIVILIANS,
FOREIGN AREAS). THE LIVING QUARTERS ALLOWANCE WAS INCLUDED IN A BACKPAY
AWARD DESPITE THE FACT THAT THE EMPLOYEE HAD BEEN RETURNED TO THE UNITED
STATES AT THE TIME OF REMOVAL. URBINA V. UNITED STATES, 192 CT. CL. 875
(1970).
TRAVEL EXPENSES DIRECTLY INCIDENT TO SUCCESSFUL APPEAL. THE BACK PAY
ACT CONTEMPLATES THAT A REINSTATED EMPLOYEE PERFORMED SERVICE FOR THE
AGENCY DURING THE PERIOD THE IMPROPER PERSONNEL ACTION WAS IN EFFECT
JUST AS IF THE UNWARRANTED ACTION HAD NOT OCCURRED. PURSUANT TO THIS
STATUTORY RATIONALE, WE REGARD THE REINSTATED EMPLOYEE AS HAVING BEEN IN
A TEMPORARY DUTY STATUS DURING PERIODS HE WAS REQUIRED TO TRAVEL IN
ORDER TO PROSECUTE HIS APPEAL. ACCORDINGLY, WE HAVE ALLOWED SUCH
TEMPORARY DUTY TRAVEL EXPENSES IN PROSECUTING SUCCESSFUL APPEALS.
B-180469, FEBRUARY 28, 1974.
OTHER MAKE-WHOLE REMEDIES PROVIDED BY LAW AND REGULATIONS
1. HEALTH INSURANCE FOR RESTORED EMPLOYEES
THE MAKE-WHOLE REMEDY CONCERNING HEALTH INSURANCE FOR REINSTATED
EMPLOYEES WHO WERE IMPROPERLY REMOVED IS GOVERNED BY 5 U.S.C. SEC. 8908
(1970), WHICH PROVIDES:
"SEC. 8908. COVERAGE OF RESTORED EMPLOYEE
"AN EMPLOYEE ENROLLED IN A HEALTH BENEFITS PLAN UNDER THIS CHAPTER
WHO IS REMOVED OR SUSPENDED WITHOUT PAY AND LATER REINSTATED OR RESTORED
TO DUTY ON THE GROUND THAT THE REMOVAL OR SUSPENSION WAS UNJUSTIFIED OR
UNWARRANTED MAY, AT HIS OPTION, ENROLL AS A NEW EMPLOYEE OR HAVE HIS
COVERAGE RESTORED, WITH APPROPRIATE ADJUSTMENTS MADE IN CONTRIBUTIONS
AND CLAIMS, TO THE SAME EXTENT AND EFFECT AS THOUGH THE REMOVAL OR
SUSPENSION HAD NOT TAKEN PLACE."
CIVIL SERVICE COMMISSION REGULATIONS IMPLEMENTING THIS STATUTE ARE
CONTAINED IN PARAGRAPH S8-5, FEDERAL PERSONNEL MANUAL SUPPLEMENT 890-1,
INSTRUCTION 34, DATED SEPTEMBER 24, 1973, WHICH READS AS FOLLOWS:
"S8-5. RESTORATION TO DUTY AFTER ERRONEOUS REMOVAL OR SUSPENSION
"A. EMPLOYEE ELECTION. THE ENROLLMENT OF AN EMPLOYEE WHO IS
SUSPENDED WITHOUT PAY CONTINUES FOR UP TO 365 DAYS IN NONPAY STATUS, AS
STATED IN S8-4A. THE ENROLLMENT OF AN EMPLOYEE WHO IS REMOVED IS
TERMINATED AT THE END OF THE PAY PERIOD IN WHICH HE IS REMOVED. IF THE
ENROLLMENT OF AN EMPLOYEE WHO WAS REMOVED OR SUSPENDED WITHOUT PAY WAS
TERMINATED, AND THE EMPLOYEE IS ORDERED RESTORED TO DUTY ON THE GROUNDS
THAT THE SUSPENSION OR REMOVAL WAS UNWARRANTED OR UNJUSTIFIED, HE MAY
ELECT EITHER TO (1) HAVE HIS PRIOR ENROLLMENT REINSTATED RETROACTIVE TO
THE DATE IT WAS TERMINATED, OR (2) ENROLL IN THE PLAN AND OPTION OF HIS
CHOICE, THE SAME AS A NEW EMPLOYEE.
"B. REINSTATEMENT OF ENROLLMENT. IF THE EMPLOYEE ELECTS TO HAVE HIS
PRIOR ENROLLMENT REINSTATED RETROACTIVELY, WITHHOLDINGS AND
CONTRIBUTIONS MUST ALSO BE MADE RETROACTIVELY JUST AS THOUGH THE
ERRONEOUS SUSPENSION OR REMOVAL HAD NOT TAKEN PLACE. HIS HEALTH
BENEFITS COVERAGE IS CONSIDERED TO HAVE BEEN CONTINUOUSLY IN EFFECT, AND
HE AND ANY COVERED FAMILY MEMBERS WILL BE RETROACTIVELY ENTITLED TO THE
FULL BENEFITS OF HIS PLAN.
"C. NEW ENROLLMENT. IF THE EMPLOYEE ELECTS TO ENROLL INSTEAD OF
HAVING HIS PRIOR ENROLLMENT REINSTATED, HIS ENROLLMENT WOULD BE
EFFECTIVE AS STATED IN S7-2B. HE IS NOT RETROACTIVELY ENTITLED TO
BENEFITS FROM HIS PLAN AND NO RETROACTIVE WITHHOLDINGS AND CONTRIBUTIONS
SHOULD BE MADE.
"D. NOTICE TO EMPLOYEES. AN EMPLOYEE ORDERED RESTORED TO DUTY AFTER
ERRONEOUS REMOVAL OR SUSPENSION SHOULD BE NOTIFIED OF THE CHOICES OPEN
TO HIM REGARDING HIS HEALTH BENEFITS COVERAGE. HE ALSO SHOULD BE
ADVISED THAT IF HE ELECTS TO ENROLL AS A NEW EMPLOYEE, THE PERIOD OF HIS
SUSPENSION OR REMOVAL (DURING WHICH HIS ENROLLMENT WAS NOT IN EFFECT)
WILL NOT BE CONSIDERED AS AN INTERRUPTION TO HIS CONTINUOUS ENROLLMENT
FOR PURPOSES OF CONTINUING ENROLLMENT AFTER RETIREMENT, PROVIDED HE
ENROLLS WITHIN 31 DAYS AFTER THE DATE HE IS ORDERED RESTORED TO DUTY."
IT IS NOTED THAT THE REMEDY PROVIDED BY THE ABOVE-QUOTED STATUTE AND
REGULATION IS SUFFICIENT FOR MOST CASES. HOWEVER, IT DOES NOT APPEAR TO
ADEQUATELY COVER THE EMPLOYEE WHO, WHEN REMOVED, PURCHASES SIMILAR
COVERAGE ON THE COMMERCIAL MARKET. SEE TAB C.6 FOR DISCUSSION OF THE
PROBLEM.
2. GOVERNMENT LIFE INSURANCE FOR RESTORED EMPLOYEES
THE MAKE-WHOLE REMEDY REGARDING GOVERNMENT LIFE INSURANCE FOR A
GOVERNMENT EMPLOYEE WHO IS REINSTATED ON THE BASIS OF A FINDING THAT HE
HAD UNDERGONE AN UNJUSTIFIED PERSONNEL ACTION IS COVERED BY 5 U.S.C.
SEC. 8706(F) (SUPP. III, 1973), AND PROVIDES:
"(F) IF THE INSURANCE OF AN EMPLOYEE STOPS BECAUSE OF SEPARATION FROM
THE SERVICE OR SUSPENSION WITHOUT PAY, AND THE SEPARATION OR SUSPENSION
IS THEREAFTER OFFICIALLY FOUND TO HAVE BEEN ERRONEOUS, THE EMPLOYEE IS
DEEMED TO HAVE BEEN INSURED DURING THE PERIOD OF ERRONEOUS SEPARATION OR
SUSPENSION. DEDUCTIONS OTHERWISE REQUIRED BY SECTION 8707 OF THIS
CHAPTER SHALL NOT BE WITHHELD FROM ANY BACKPAY AWARDED FOR THE PERIOD OF
SEPARATION OR SUSPENSION UNLESS DEATH OR ACCIDENTAL DISMEMBERMENT OF THE
EMPLOYEE OCCURS DURING SUCH PERIOD."
CIVIL SERVICE COMMISSION REGULATIONS IMPLEMENTING THIS STATUTE ARE
CONTAINED IN PARAGRAPH S4-2E, FEDERAL PERSONNEL MANUAL SUPPLEMENT 870-1,
INSTRUCTION 14, DATED SEPTEMBER 12, 1973, AND PROVIDE AS FOLLOWS:
"E. RESTORATION AFTER ERRONEOUS SUSPENSION OR REMOVAL. EFFECTIVE ON
OR AFTER OCTOBER 21, 1972, IF AN EMPLOYEE IS RETROACTIVELY RESTORED TO
DUTY WITH PAY AFTER AN ERRONEOUS SUSPENSION OR REMOVAL, THERE WILL BE NO
LIFE INSURANCE WITHHOLDINGS MADE FROM THE RETROACTIVE PAY ADJUSTMENT FOR
THE PERIOD OF SUSPENSION OR REMOVAL. HOWEVER, IF DEATH OR ACCIDENTAL
DISMEMBERMENT OCCURS DURING THE PERIOD BETWEEN THE EMPLOYEE'S REMOVAL
AND THE FINDING THAT THE SEPARATION OR SUSPENSION WAS ERRONEOUS,
INSURANCE PROCEEDS WILL BE PAID AND PREMIUMS WILL BE WITHHELD FROM BACK
PAY AWARDED FOR THE PERIOD OF SEPARATION OR SUSPENSION. WHERE PAYMENT
OF BACK PAY WAS MADE BEFORE OCTOBER 21, 1972, WITHHOLDINGS FOR THE
PERIOD OF SUSPENSION OR REMOVAL MUST BE MADE FROM THE PAY ADJUSTMENT."
THE ABOVE STATUTE AND REGULATION APPEARS TO PROVIDE A COMPLETE
MAKE-WHOLE REMEDY IN THE AREA OF GOVERNMENT LIFE INSURANCE FOR
REINSTATED EMPLOYEES.
3. EMPLOYMENT DISCRIMINATION
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, PUB. L.
88-352, JULY 2, 1964, 42 U.S.C. 2000E-2(A), DECLARES IT TO BE AN
UNLAWFUL EMPLOYMENT PRACTICE.
"(1) TO FAIL OR REFUSE TO HIRE OR TO DISCHARGE ANY INDIVIDUAL, OR
OTHERWISE TO DISCRIMINATE AGAINST ANY INDIVIDUAL WITH RESPECT TO HIS
COMPENSATION, TERMS, CONDITIONS, OR PRIVILEGES OF EMPLOYMENT, BECAUSE OF
SUCH INDIVIDUAL'S RACE, COLOR, RELIGION, SEX, OR NATIONAL ORIGIN; OR
"(2) TO LIMIT, SEGREGATE, OR CLASSIFY HIS EMPLOYEES OR APPLICANTS FOR
EMPLOYMENT IN ANY WAY WHICH WOULD DEPRIVE OR TEND TO DEPRIVE ANY
INDIVIDUAL OF EMPLOYMENT OPPORTUNITIES OR OTHERWISE ADVERSELY AFFECT HIS
STATUS AS AN EMPLOYEE, BECAUSE OF SUCH INDIVIDUAL'S RACE, COLOR,
RELIGION, SEX, OR NATIONAL ORIGIN."
THE SECTION IS MADE APPLICABLE TO THE FEDERAL GOVERNMENT AS AN
EMPLOYER BY THE EQUAL EMPLOYMENT OPPORTUNITY ACT OF 1972, PUB. L.
92-261, MARCH 24, 1972, 42 U.S.C. 2000E-16(A).
THE MAKE-WHOLE REMEDY FOR FAILURE TO PROVIDE EQUAL EMPLOYMENT
OPPORTUNITY IN SELECTING EMPLOYEES FOR GOVERNMENT SERVICE IS GOVERNED BY
42 U.S.C. SEC. 2000E-16(B), WHICH PROVIDES IN PERTINENT PART:
"(B) CIVIL SERVICE COMMISSION; ENFORCEMENT POWERS; ISSUANCE OF
RULES, REGULATIONS, ETC; ANNUAL REVIEW AND APPROVAL OF NATIONAL AND
REGIONAL EQUAL EMPLOYMENT OPPORTUNITY PLANS; REVIEW AND EVALUATION OF
EQUAL EMPLOYMENT OPPORTUNITY PROGRAMS AND PUBLICATION OF PROGRESS
REPORTS; CONSULTATIONS WITH INTERESTED PARTIES; COMPLIANCE WITH RULES,
REGULATIONS, ETC.; CONTENTS OF NATIONAL AND REGIONAL EQUAL EMPLOYMENT
OPPORTUNITY PLANS; AUTHORITY OF LIBRARIAN OF CONGRESS.
"EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION, THE CIVIL SERVICE
COMMISSION SHALL HAVE AUTHORITY TO ENFORCE THE PROVISIONS OF SUBSECTION
(A) OF THIS SECTION THROUGH APPROPRIATE REMEDIES, INCLUDING
REINSTATEMENT OR HIRING OF EMPLOYEES WITH OR WITHOUT BACK PAY, AS WILL
EFFECTUATE THE POLICIES OF THIS SECTION, AND SHALL ISSUE SUCH RULES,
REGULATIONS, ORDERS AND INSTRUCTIONS AS IT DEEMS NECESSARY AND
APPROPRIATE TO CARRY OUT ITS RESPONSIBILITIES UNDER THIS SECTION. ***"
IN ADDITION, COURTS ARE AUTHORIZED TO PROVIDE THE FOLLOWING REMEDIES
FOR UNLAWFUL EMPLOYMENT PRACTICES, PURSUANT TO 42 U.S.C. SEC.
2000E-5(G):
"(G) INJUNCTIONS; APPROPRIATE AFFIRMATIVE ACTION; EQUITABLE RELIEF;
ACCRUAL OF BACK PAY; REDUCTION OF BACK PAY; LIMITATIONS ON JUDICIAL
ORDERS.
"IF THE COURT FINDS THAT THE RESPONDENT HAS INTENTIONALLY ENGAGED IN
OR IS INTENTIONALLY ENGAGING IN AN UNLAWFUL EMPLOYMENT PRACTICE CHARGED
IN THE COMPLAINT, THE COURT MAY ENJOIN THE RESPONDENT FROM ENGAGING IN
SUCH UNLAWFUL EMPLOYMENT PRACTICE, AND ORDER SUCH AFFIRMATIVE ACTION AS
MAY BE APPROPRIATE, WHICH MAY INCLUDE, BUT IS NOT LIMITED TO,
REINSTATEMENT OR HIRING OF EMPLOYEES, WITH OR WITHOUT BACK PAY (PAYABLE
BY THE EMPLOYER, EMPLOYMENT AGENCY, OR LABOR ORGANIZATION, AS THE CASE
MAY BE, RESPONSIBLE FOR THE UNLAWFUL EMPLOYMENT PRACTICE), OR ANY OTHER
EQUITABLE RELIEF AS THE COURT DEEMS APPROPRIATE. BACK PAY LIABILITY
SHALL NOT ACCRUE FROM A DATE MORE THAN TWO YEARS PRIOR TO THE FILING OF
A CHARGE WITH THE COMMISSION. INTERIM EARNINGS OR AMOUNTS EARNABLE WITH
REASONABLE DILIGENCE BY THE PERSON OR PERSONS DISCRIMINATED AGAINST
SHALL OPERATE TO REDUCE THE BACK PAY OTHERWISE ALLOWABLE. NO ORDER OF
THE COURT SHALL REQUIRE THE ADMISSION OR REINSTATEMENT OF AN INDIVIDUAL
AS A MEMBER OF A UNION, OR THE HIRING, REINSTATEMENT, OR PROMOTION OF AN
INDIVIDUAL AS AN EMPLOYEE, OR THE PAYMENT TO HIM OF ANY BACK PAY, IF
SUCH INDIVIDUAL WAS REFUSED ADMISSION, SUSPENDED, OR EXPELLED, OR WAS
REFUSED EMPLOYMENT OR ADVANCEMENT OR WAS SUSPENDED OR DISCHARGED FOR ANY
REASON OTHER THAN DISCRIMINATION ON ACCOUNT OF RACE, COLOR, RELIGION,
SEX, OR NATIONAL ORIGIN OR IN VIOLATION OF SECTION 2000E-3(A) OF THIS
TITLE."
IMPLEMENTING REGULATIONS REGARDING REMEDIAL ACTION FOR DISCRIMINATION
IN GOVERNMENT EMPLOYMENT HAVE BEEN PROMULGATED BY THE CIVIL SERVICE
COMMISSION IN 5 C.P.R. SEC. 713.271 (1974), AND PROVIDE:
"SEC. 713.271 REMEDIAL ACTIONS.
"(A) REMEDIAL ACTION INVOLVING AN APPLICANT.
(1) WHEN AN AGENCY, OR THE COMMISSION, FINDS THAT AN APPLICANT FOR
EMPLOYMENT HAS BEEN DISCRIMINATED AGAINST AND EXCEPT FOR THAT
DISCRIMINATION WOULD HAVE BEEN HIRED, THE AGENCY SHALL OFFER THE
APPLICANT EMPLOYMENT OF THE TYPE AND GRADE DENIED HIM. THE OFFER SHALL
BE MADE IN WRITING. THE INDIVIDUAL SHALL HAVE 15 CALENDAR DAYS FROM
RECEIPT OF THE OFFER WITHIN WHICH TO ACCEPT OR DECLINE THE OFFER.
FAILURE TO NOTIFY THE AGENCY OF HIS DECISION WITHIN THE 15-DAY PERIOD
WILL BE CONSIDERED A DECLINATION OF THE OFFER, UNLESS THE INDIVIDUAL CAN
SHOW THAT CIRCUMSTANCES BEYOND HIS CONTROL PREVENTED HIM FROM RESPONDING
WITHIN THE TIME LIMIT. IF THE OFFER IS ACCEPTED, APPOINTMENT SHALL BE
RETROACTIVE TO THE DATE THE APPLICANT WOULD HAVE BEEN HIRED, SUBJECT TO
THE LIMITATION IN SUBPARAGRAPH (4) OF THIS PARAGRAPH. BACKPAY, COMPUTED
IN THE SAME MANNER PRESCRIBED BY SEC. 550.804 OF THIS CHAPTER, SHALL BE
AWARDED FROM THE BEGINNING OF THE RETROACTIVE PERIOD, SUBJECT TO THE
SAME LIMITATION, UNTIL THE DATE THE INDIVIDUAL ACTUALLY ENTERS ON DUTY.
THE INDIVIDUAL SHALL BE DEEMED TO HAVE PERFORMED SERVICE FOR THE AGENCY
DURING THIS PERIOD OF RETROACTIVITY FOR ALL PURPOSES EXCEPT FOR MEETING
SERVICE REQUIREMENTS FOR COMPLETION OF A PROBATIONARY OR TRIAL PERIOD
THAT IS REQUIRED. IF THE OFFER IS DECLINED, THE AGENCY SHALL AWARD THE
INDIVIDUAL A SUM EQUAL TO THE BACKPAY HE WOULD HAVE RECEIVED, COMPUTED
IN THE SAME MANNER PRESCRIBED BY SEC. 550.804 OF THIS CHAPTER, FROM THE
DATE HE WOULD HAVE BEEN APPOINTED UNTIL THE DATE THE OFFER WAS MADE,
SUBJECT TO THE LIMITATION OF SUBPARAGRAPH (4) OF THIS PARAGRAPH. THE
AGENCY SHALL INFORM THE APPLICANT, IN ITS OFFER, OF HIS RIGHT TO THIS
AWARD IN THE EVENT HE DECLINES THE OFFER.
"(2) WHEN AN AGENCY, OR THE COMMISSION, FINDS THAT DISCRIMINATION
EXISTED AT THE TIME THE APPLICANT WAS CONSIDERED FOR EMPLOYMENT BUT DOES
NOT FIND THAT THE INDIVIDUAL IS THE ONE WHO WOULD HAVE BEEN HIRED EXCEPT
FOR DISCRIMINATION, THE AGENCY SHALL CONSIDER THE INDIVIDUAL FOR ANY
EXISTING VACANCY OF THE TYPE AND GRADE FOR WHICH HE HAD BEEN CONSIDERED
INITIALLY AND FOR WHICH HE IS QUALIFIED BEFORE CONSIDERATION IS GIVEN TO
OTHER CANDIDATES. IF THE INDIVIDUAL IS NOT SELECTED, THE AGENCY SHALL
RECORD THE REASONS FOR NONSELECTION. IF NO VACANCY EXISTS, THE AGENCY
SHALL GIVE HIM THIS PRIORITY CONSIDERATION FOR THE NEXT VACANCY FOR
WHICH HE IS QUALIFIED. THIS PRIORITY SHALL TAKE PRECEDENCE OVER
PRIORITIES PROVIDED UNDER OTHER REGULATIONS IN THIS CHAPTER.
"(3) THIS PARAGRAPH SHALL BE CITED AS THE AUTHORITY UNDER WHICH THE
ABOVE-DESCRIBED APPOINTMENTS OR AWARDS OF BACKPAY SHALL BE MADE.
"(4) A PERIOD OF RETROACTIVITY OR A PERIOD FOR WHICH BACKPAY IS
AWARDED UNDER THIS PARAGRAPH MAY NOT EXTEND FROM A DATE EARLIER THAN 2
YEARS PRIOR TO THE DATE ON WHICH THE COMPLAINT WAS INITIALLY FILED BY
THE APPLICANT. IF A FINDING OF DISCRIMINATION WAS NOT BASED ON A
COMPLAINT, THE PERIOD OF RETROACTIVITY OR PERIOD FOR WHICH BACKPAY IS
AWARDED THIS PARAGRAPH MAY NOT EXTEND EARLIER THAN 2 YEARS PRIOR TO THE
DATE THE FINDING OF DISCRIMINATION WAS RECORDED.
"(B) REMEDIAL ACTION INVOLVING AN EMPLOYEE. WHEN AN AGENCY, OR THE
COMMISSION, FINDS THAT AN EMPLOYEE OF THE AGENCY WAS DISCRIMINATED
AGAINST AND AS A RESULT OF THAT DISCRIMINATION WAS DENIED AN EMPLOYMENT
BENEFIT, OR AN ADMINISTRATIVE DECISION ADVERSE TO HIM WAS MADE, THE
AGENCY SHALL TAKE REMEDIAL ACTIONS WHICH SHALL INCLUDE ONE OR MORE OF
THE FOLLOWING, BUT NEED NOT BE LIMITED TO THESE ACTIONS:
"(1) RETROACTIVE PROMOTION, WITH BACKPAY COMPUTED IN THE SAME MANNER
PRESCRIBED BY SEC. 550.804 OF THIS CHAPTER, WHEN THE RECORD CLEARLY
SHOWS THAT BUT FOR THE DISCRIMINATION THE EMPLOYEE WOULD HAVE BEEN
PROMOTED OR WOULD HAVE BEEN EMPLOYED AT A HIGHER GRADE, EXCEPT THAT THE
BACKPAY LIABILITY MAY NOT ACCRUE FROM A DATE EARLIER THAN 2 YEARS PRIOR
TO THE DATE THE DISCRIMINATION COMPLAINT WAS FILED, BUT, IN ANY EVENT,
NOT TO EXCEED THE DATE HE WOULD HAVE BEEN PROMOTED. IF A FINDING OF
DISCRIMINATION WAS NOT BASED ON A COMPLAINT, THE BACKPAY LIABILITY MAY
NOT ACCRUE FROM A DATE EARLIER THAN 2 YEARS PRIOR TO THE DATE THE
FINDING OF DISCRIMINATION WAS RECORDED, BUT, IN ANY EVENT, NOT TO EXCEED
THE DATE HE WOULD HAVE BEEN PROMOTED.
"(2) CONSIDERATION FOR PROMOTION TO A POSITION FOR WHICH HE IS
QUALIFIED BEFORE CONSIDERATION IS GIVEN TO OTHER CANDIDATES WHEN THE
RECORD SHOWS THAT DISCRIMINATION EXISTED AT THE TIME SELECTION FOR
PROMOTION WAS MADE BUT IT IS NOT CLEAR THAT EXCEPT FOR THE
DISCRIMINATION THE EMPLOYEE WOULD HAVE BEEN PROMOTED. IF THE INDIVIDUAL
IS NOT SELECTED, THE AGENCY SHALL RECORD THE REASONS FOR NONSELECTION.
THIS PRIORITY CONSIDERATION SHALL TAKE PRECEDENCE OVER PRIORITIES UNDER
OTHER REGULATIONS IN THIS CHAPTER.
"(3) CANCELLATION OF AN UNWARRANTED PERSONNEL ACTION AND RESTORATION
OF THE EMPLOYEE.
"(4) EXPUNCTION FROM THE AGENCY'S RECORDS OF ANY REFERENCE TO OR ANY
RECORD OF AN UNWARRANTED DISCIPLINARY ACTION THAT IS NOT A PERSONNEL
ACTION.
"(5) FULL OPPORTUNITY TO PARTICIPATE IN THE EMPLOYEE BENEFIT DENIED
HIM (E.G., TRAINING, PREFERENTIAL WORK ASSIGNMENTS, OVERTIME
SCHEDULING)."
WE NOTE THAT BACKPAY UNDER THE EQUAL EMPLOYMENT OPPORTUNITY ACT
(EEOA) AND ITS IMPLEMENTING REGULATION IS COMPUTED IN THE SAME MANNER
PRESCRIBED BY 5 C.F.R. SEC. 550.894 FOR THE BACK PAY ACT OF 1966,
SUPRA. THERE ARE SOME SIGNIFICANT DIFFERENCES BETWEEN REMEDIES PROVIDED
IN THE TWO STATUTES AND REGULATIONS WHICH HAVE A BEARING ON THE EXTENT
EMPLOYEES ARE MADE WHOLE. UNDER THE EEOA THE PERIOD OF RETROACTIVITY
FOR WHICH BACKPAY IS PERMITTED MAY NOT EXTEND BACK FARTHER THAN 2 YEARS.
THERE IS NO SUCH LIMITATION ON BACKPAY FOR OTHER UNJUSTIFIED AND
UNWARRANTED PERSONNEL ACTIONS UNDER THE BACK PAY ACT. FOR EXAMPLE, AN
EMPLOYEE WHO 3 YEARS AGO WAS NOT PROMOTED BECAUSE OF RACIAL OR SEX
DISCRIMINATION WOULD RECEIVE ONLY 2 YEARS OF BACKPAY UNDER THE EEOA BUT
AN EMPLOYEE WHO 3 YEARS AGO WAS NOT PROMOTED BY VIRTUE OF AN
ADMINISTRATIVE OVERSIGHT WOULD RECEIVE RETROACTIVE COMPENSATION FOR THE
FULL PERIOD UNDER THE BACK PAY ACT.
IN SOME RESPECTS REMEDIES UNDER THE EQUAL OPPORTUNITY REGULATION ARE
BROADER THAN THE BACKPAY REGULATIONS IN THAT THE EQUAL OPPORTUNITY
REGULATIONS PROVIDE FOR EXPUNGEMENT FROM THE RECORDS OF AN UNWARRANTED
DISCIPLINARY ACTION.
4. UNFAIR LABOR PRACTICE REMEDIES
THE ASSISTANT SECRETARY OF LABOR FOR LABOR-MANAGEMENT RELATIONS
(A/SLMR), PURSUANT TO EXECUTIVE ORDER 11491, AS AMENDED, IS AUTHORIZED
TO DECIDE UNFAIR LABOR PRACTICE (ULP) COMPLAINTS AND TO REQUIRE AGENCIES
AND LABOR ORGANIZATIONS TO TAKE CORRECTIVE ACTION WHEN HE FINDS A ULP
HAS OCCURRED. IN THIS REGARD SECTIONS 6(A)(4) AND 6(B) OF THE ORDER
PROVIDE:
"SEC. 6. ASSISTANT SECRETARY OF LABOR FOR LABOR-MANAGEMENT
RELATIONS.
"(A) THE ASSISTANT SECRETARY SHALL -
"(4) DECIDE UNFAIR LABOR PRACTICE COMPLAINTS AND ALLEGED VIOLATIONS
OF THE STANDARDS OF CONDUCT FOR LABOR ORGANIZATIONS ***.
"(B) IN ANY MATTTERS ARISING UNDER PARAGRAPH (A) OF THIS SECTION, THE
ASSISTANT SECRETARY MAY REQUIRE AN AGENCY OR A LABOR ORGANIZATION TO
CEASE AND DESIST FROM VIOLATIONS OF THIS ORDER AND REQUIRE IT TO TAKE
SUCH AFFIRMATIVE ACTION AS HE CONSIDERS APPROPRIATE TO EFFECTUATE THE
POLICIES OF THIS ORDER."
IF THE A/SLMR FINDS THAT AN EMPLOYEE HAS BEEN DISCRIMINATED AGAINST
BECAUSE OF UNION ACTIVITY, UNDER THE ABOVE-QUOTED PROVISIONS OF THE
ORDER HE MAY DIRECT THE AGENCY TO TAKE ACTION TO MAKE THE EMPLOYEE
WHOLE. ALL REMEDIAL MEASURES PROVIDED BY LAW AND REGULATION ARE
AVAILABLE TO THE A/SLMR TO MAKE THE EMPLOYEE WHOLE SUCH AS BACKPAY AND
RETROACTIVE PROMOTIONS. THE PROPOSED NEW CSC REGULATIONS TO THE BACK
PAY ACT, NOW CIRCULATING FOR COMMENT, WILL MAKE IT CLEAR THAT
DISCRIMINATION AGAINST AN EMPLOYEE BECAUSE OF HIS UNION ACTIVITIES IS AS
MUCH AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION AS IS DISCRIMINATION
ON ANY OTHER NONPERMISSIBLE GROUNDS.
5. WAIVER OF CLAIMS AGAINST EMPLOYEES
ANOTHER REMEDY IN LAW SOMETIMES USEFUL TO CORRECT ERRORS RESULTING
FROM CERTAIN ERRONEOUS OVERPAYMENTS TO AN EMPLOYEE IS THE CLAIMS WAIVER
STATUTE CONTAINED IN 5 U.S.C. SEC. 5584 (1974), WHICH PROVIDES IN
PERTINENT PART:
"SEC. 5584. CLAIMS FOR OVERPAYMENT OF PAY AND ALLOWANCES, OTHER THAN
TRAVEL AND TRANSPORTATION EXPENSES AND ALLOWANCES AND RELOCATION
EXPENSES
"(A) A CLAIM OF THE UNITED STATES AGAINST A PERSON ARISING OUT OF AN
ERRONEOUS PAYMENT OF PAY OR ALLOWANCES, OTHER THAN TRAVEL AND
TRANSPORTATION EXPENSES AND ALLOWANCES AND RELOCATION EXPENSES PAYABLE
UNDER SECTION 5724A OF THIS TITLE, ON OR AFTER JULY 1, 1960, TO AN
EMPLOYEE OF AN EXECUTIVE AGENCY, THE COLLECTION OF WHICH WOULD BE
AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE
UNITED STATES, MAY BE WAIVED IN WHOLE OR IN PART BY -
"(1) THE COMPTROLLER GENERAL OF THE UNITED STATES; OR
"(2) THE HEAD OF THE EXECUTIVE AGENCY WHEN -
"(A) THE CLAIM IS IN AN AMOUNT AGGREGATING NOT MORE THAN $500;
"(B) THE CLAIM IS NOT THE SUBJECT OF AN EXCEPTION MADE BY THE
COMPTROLLER GENERAL IN THE ACCOUNT OF ANY ACCOUNTABLE OFFICIAL; AND
"(C) THE WAIVER IS MADE IN ACCORDANCE WITH STANDARDS WHICH THE
COMPTROLLER GENERAL SHALL PRESCRIBE.
"(B) THE COMPTROLLER GENERAL OR THE HEAD OF THE EXECUTIVE AGENCY, AS
THE CASE MAY BE, MAY NOT EXERCISE HIS AUTHORITY UNDER THIS SECTION TO
WAIVE ANY CLAIM -
"(1) IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM,
AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH
ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING A WAIVER OF THE CLAIM;
"(2) IF APPLICATION FOR WAIVER IS RECEIVED IN HIS OFFICE AFTER THE
EXPIRATION OF THREE YEARS IMMEDIATELY FOLLOWING THE DATE ON WHICH THE
ERRONEOUS PAYMENT OF PAY WAS DISCOVERED OR THREE YEARS IMMEDIATELY
FOLLOWING OCTOBER 21, 1968, WHICHEVER IS LATER; OR
"(3) IF APPLICATION FOR WAIVER IS RECEIVED IN HIS OFFICE AFTER THE
EXPIRATION OF THREE YEARS IMMEDIATELY FOLLOWING THE DATE ON WHICH THE
ERRONEOUS PAYMENT OF ALLOWANCES WAS DISCOVERED OR THREE YEARS
IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF THE AMENDMENT AUTHORIZING
THE WAIVER OF ALLOWANCES, WHICHEVER IS LATER."
REGULATIONS GOVERNING THE STANDARDS FOR WAIVER OF CLAIMS FOR
ERRONEOUS PAYMENT OF PAY AND ALLOWANCES HAVE BEEN PROMULGATED IN PART 91
OF 4 C.P.R. (1974). IN SUBSTANCE THE STATUTE AND REGULATIONS PERMIT THE
WAIVER OF A CLAIM ARISING OUT OF AN ERRONEOUS PAYMENT OF PAY AND
ALLOWANCES MADE TO AN EMPLOYEE THROUGH ADMINISTRATIVE ERROR OF WHICH HE
WAS NOT KNOWLEDGEABLE AND COLLECTION ACTION UNDER THE CLAIM WOULD BE
AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE
UNITED STATES.
ONE EXAMPLE OF THE APPLICATION OF WAIVER PROVISIONS ARISES WHEN AN
EMPLOYEE HAS USED LEAVE CREDITED TO HIS ACCOUNT IN ERROR.
"SEC. 6302. GENERAL PROVISIONS
"(F) AN EMPLOYEE WHO USES EXCESS ANNUAL LEAVE CREDITED BECAUSE OF
ADMINISTRATIVE ERROR MAY ELECT TO REFUND THE AMOUNT RECEIVED FOR THE
DAYS OF EXCESS LEAVE BY LUMP-SUM OR INSTALLMENT PAYMENTS OR TO HAVE THE
EXCESS LEAVE CARRIED FORWARD AS A CHARGE AGAINST LATER-ACCRUING ANNUAL
LEAVE, UNLESS REPAYMENT IS WAIVED UNDER SECTION 5584 OF THIS TITLE.
IN OTHER WORDS, SUCH LEAVE COULD BE CONVERTED TO A MONETARY AMOUNT
AND FORM AN INDEBTEDNESS ON THE PART OF THE EMPLOYEE TO THE GOVERNMENT.
THEN AN AGENCY MAY, UNDER THE CONDITIONS DESCRIBED ABOVE, GRANT A WAIVER
TO THE EMPLOYEE FOR THE INDEBTEDNESS. B-166848, JUNE 3, 1969.
6. RESTORATION OF ANNUAL LEAVE LOST UNDER CERTAIN CIRCUMSTANCES
A NEW MAKE-WHOLE REMEDY WAS PROVIDED BY ENACTMENT OF PUB. L. 93-181
ON DECEMBER 14, 1973. NOW FOUND AT 5 U.S.C. SEC. 6304(D), SUPP. III
(1973), IT PERMITS THE RESTORATION OF LEAVE TO AN EMPLOYEE THAT IS LOST,
THROUGH NO FAULT OF HIS, BECAUSE OF ADMINISTRATIVE ERROR, EXIGENCIES OF
PUBLIC BUSINESS, OR SICKNESS. SECTION 6304(D) PROVIDES AS FOLLOWS:
"SEC. 6304. ANNUAL LEAVE; ACCUMULATION
"(D)(1) ANNUAL LEAVE WHICH IS LOST BY OPERATION OF THIS SECTION
BECAUSE OF -
"(A) ADMINISTRATIVE ERROR WHEN THE ERROR CAUSES A LOSS OF ANNUAL
LEAVE OTHERWISE ACCRUABLE AFTER JUNE 30, 1960;
"(B) EXIGENCIES OF THE PUBLIC BUSINESS WHEN THE ANNUAL LEAVE WAS
SCHEDULED IN ADVANCE; OR
"(C) SICKNESS OF THE EMPLOYEE WHEN THE ANNUAL LEAVE WAS SCHEDULED IN
ADVANCE;
SHALL BE RESTORED TO THE EMPLOYEE.
"(2) ANNUAL LEAVE RESTORED UNDER PARAGRAPH (1) OF THIS SUBSECTION, OR
UNDER CLAUSE (2) OF SECTION 5562(A) OF THIS TITLE, WHICH IS IN EXCESS OF
THE MAXIMUM LEAVE ACCUMULATION PERMITTED BY LAW SHALL BE CREDITED TO A
SEPARATE LEAVE ACCOUNT FOR THE EMPLOYEE AND SHALL BE AVAILABLE FOR USE
BY THE EMPLOYEE WITHIN THE TIME LIMITS PRESCRIBED BY REGULATIONS OF THE
CIVIL SERVICE COMMISSION. LEAVE CREDITED UNDER THIS PARAGRAPH BUT
UNUSED AND STILL AVAILABLE TO THE EMPLOYEE UNDER THE REGULATIONS
PRESCRIBED BY THE COMMISSION SHALL BE INCLUDED IN THE LUMP-SUM PAYMENT
UNDER SECTION 5551 OR 5552(1) OF THIS TITLE BUT MAY NOT BE RETAINED TO
THE CREDIT OF THE EMPLOYEE UNDER SECTION 5552(2) OF THIS TITLE."
THE CIVIL SERVICE COMMISSION HAS PROMULGATED REGULATIONS AND
GUIDELINES FOR THE IMPLEMENTATION OF THE ABOVE-QUOTED STATUTE IN FEDERAL
PERSONNEL MANUAL (FPM) LETTER NO. 630.22 DATED JANUARY 11, 1974. THE
STATUTE AND REGULATIONS APPEAR TO PROVIDE AN ADEQUATE MAKE-WHOLE REMEDY
FOR AN EMPLOYEE WHO IS PREVENTED FROM TAKING ANNUAL LEAVE SCHEDULED IN
ADVANCE BY REASON OF EXIGENCIES OF THE PUBLIC BUSINESS OR SICKNESS.
HOWEVER, THE STATUTE AND REGULATIONS DO NOT APPEAR TO PROVIDE AN
ADEQUATE MAKE-WHOLE REMEDY UNDER ALL CIRCUMSTANCES WHERE THE EMPLOYEE
LOSES LEAVE AS A RESULT OF AN UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION BY THE AGENCY WHICH IS NOT TERMED "AN ADMINISTRATIVE ERROR." SEE
TAB C.4 FOR DISCUSSION OF THIS PROBLEM.
7. MAKE-WHOLE REMEDIES FOR FOREIGN SERVICE EMPLOYEES
THE SECRETARY OF STATE HAS AUTHORITY UNDER 22 U.S.C. SEC. 993 (SUPP.
III, 1973), TO TAKE CERTAIN REMEDIAL MEASURES TO CORRECT ERRONEOUS
PERSONNEL ACTIONS AFFECTING FOREIGN SERVICE EMPLOYEES. 22 U.S.C. SEC.
993 READS AS FOLLOWS:
"SEC. 993. RECOMMENDATIONS FOR PROMOTION.
"(A) EVALUATION OF PERFORMANCE BY SELECTION BOARDS; RANK ORDER
LISTS.
"THE SECRETARY SHALL ESTABLISH, WITH THE ADVICE OF THE BOARD OF THE
FOREIGN SERVICE, SELECTION BOARDS TO EVALUATE THE PERFORMANCE OF FOREIGN
SERVICE OFFICERS; AND UPON THE BASIS OF THEIR FINDINGS, WHICH, EXCEPT
FOR CAREER AMBASSADORS AND CAREER MINISTERS, SHALL BE SUBMITTED TO THE
SECRETARY IN RANK ORDER BY CLASS OR IN RANK ORDER BY SPECIALIZATION
WITHIN A CLASS, THE SECRETARY SHALL MAKE RECOMMENDATIONS IN ACCORDANCE
WITH THE FINDINGS TO THE PRESIDENT FOR THE PROMOTION OF FOREIGN SERVICE
OFFICERS. NO PERSON ASSIGNED TO SERVE ON ANY SUCH BOARD SHALL SERVE IN
SUCH CAPACITY FOR ANY TWO CONSECUTIVE YEARS. IN SPECIAL CIRCUMSTANCES,
HOWEVER, WHICH SHALL BE SET FORTH BY REGULATIONS, THE SECRETARY SHALL
HAVE THE AUTHORITY TO REMOVE INDIVIDUAL NAMES FROM THE RANK ORDER LIST
SUBMITTED BY THE SELECTION BOARDS OR TO DELAY THE INCLUSION OF
INDIVIDUAL NAMES UNTIL A SUBSEQUENT LIST OF NOMINATIONS IS TRANSMITTED
TO THE PRESIDENT.
"(B) RECOMMENDATIONS OF GRIEVANCE BOARDS OR PANELS OR EQUAL
EMPLOYMENT OPPORTUNITY APPEALS EXAMINERS.
THE SECRETARY MAY, PURSUANT TO A RECOMMENDATION OF A DULY CONSTITUTED
GRIEVANCE BOARD OR PANEL OR AN EQUAL EMPLOYMENT OPPORTUNITY APPEALS
EXAMINER -
"(1) RECOMMEND TO THE PRESIDENT THE PROMOTION OF A FOREIGN SERVICE
OFFICER:
"(2) PROMOTE FOREIGN SERVICE STAFF PERSONNEL AND FOREIGN SERVICE
RESERVE OFFICERS WITH LIMITED OR UNLIMITED TENURE; AND
"(3) GRANT TO FOREIGN SERVICE PERSONNEL ADDITIONAL STEP INCREASES IN
SALARY, WITHIN THE SALARY RANGE ESTABLISHED FOR THE CLASS IN WHICH AN
OFFICER OR EMPLOYEE IS SERVING.
"(C) RETROACTIVE PROMOTIONS; ADDITIONAL INCREASES IN SALARY.
THE SECRETARY MAY, IN SPECIAL CIRCUMSTANCES WHICH SHALL BE SET FORTH
IN REGULATIONS, MAKE RETROACTIVE PROMOTIONS AND ADDITIONAL INCREASES IN
SALARY WITHIN CLASS MADE OR GRANTED UNDER THE AUTHORITY OF THIS
SECTION."
THE ABOVE-QUOTED STATUTE AUTHORIZES THE SECRETARY OF STATE TO REMEDY
IMPROPER PERSONNEL ACTIONS AFFECTING FOREIGN SERVICE EMPLOYEES THROUGH
THE IMPLEMENTATION OF RECOMMENDATIONS OF CERTAIN FACT-FINDING
AUTHORITIES AND BY GRANTING RETROACTIVE PROMOTIONS AND ADDITIONAL
INCREASES OF SALARY IN SPECIAL CIRCUMSTANCES. THIS AUTHORITY IS IN
ADDITION TO OTHER MAKE-WHOLE REMEDIES SUCH AS THE BACKPAY STATUTE, 5
U.S.C. SEC. 5596.
GAPS IN EXISTING LAW AND REGULATIONS THAT PRECLUDE AN EMPLOYEE FROM
BEING MADE ENTIRELY WHOLE
THERE ARE A FEW RESPECTS IN WHICH EXISTING LAW AND REGULATIONS DO NOT
FULLY COMPENSATE AN EMPLOYEE WHO HAS UNDERGONE AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION SO AS TO PUT HIM IN THE SAME FINANCIAL
POSITION HE WOULD HAVE BEEN IN HAD THE UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION NOT OCCURRED. IN MOST INSTANCES, WE BELIEVE
LEGISLATIVE ACTION WILL BE NECESSARY TO AUTHORIZE THE APPROPRIATE
REMEDY. WE TAKE NO POSITION AT THE PRESENT TIME AS TO WHETHER THESE
REMEDIES ARE DESIRABLE, HOWEVER; THEY ARE MERELY PRESENTED FOR YOUR
CONSIDERATION.
1. ATTORNEY FEES AND OTHER LITIGATION EXPENSES
DESPITE THE FACT THAT AN EMPLOYEE MAY EXPEND LARGE SUMS OF MONEY IN
OBTAINING A REMEDY FOR AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION,
THESE EXPENSES ARE FOR THE MOST PART NOT RECOVERABLE.
IT IS A GENERAL PRINCIPLE OF LAW THAT IN THE ABSENCE OF ANY
CONTRACTUAL OR STATUTORY LIABILITY THEREFOR, ATTORNEYS' FEES AND
EXPENSES OF LITIGATION INCURRED BY A PLAINTIFF OR WHICH A PLAINTIFF IS
OBLIGATED TO PAY IN THE LITIGATION OF HIS CLAIM, ARE NOT RECOVERABLE AS
AN ITEM OF DAMAGES, EITHER IN A CONTRACT OR A TORT ACTION. THIS IS THE
CASE WHETHER THE ACTION IS AGAINST A PRIVATE INDIVIDUAL OR CORPORATION,
OR AGAINST THE UNITED STATES GOVERNMENT. STEWART V. SONNEBORN, 98 U.S.
187 (1878); HAUENSTEIN V. LYNHAM, 100 U.S. 483 (1880); PIGGLY WIGGLY
V. UNITED STATES, 112 CT. CL. 391, 432 (1949); EDELMAN V. UNITED
STATES, 117 CT. CL. 400, 413 (1950); 49 COMP. GEN. 44 (1969).
ACCORDINGLY, AN EMPLOYEE WHO IS FORCED TO EMPLOY AN ATTORNEY AND
INCUR LITIGATION EXPENSES TO REMEDY AN UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION IS CURRENTLY UNABLE TO RECOVER THESE COSTS IF HE IS
SUCCESSFUL IN OBTAINING HIS REMEDY, AND TO THIS EXTENT HE IS NOT MADE
WHOLE AND PUT BACK IN THE POSITION HE OCCUPIED BEFORE THE IMPROPER
ACTION OCCURRED. ON THE OTHER HAND, SINCE ATTORNEYS' FEES AND
LITIGATION EXPENSES ARE NOT GENERALLY RECOVERABLE IN OTHER ROUTINE CIVIL
ACTIONS, IT COULD BE ARGUED THAT THERE IS NO REASON TO TREAT THE
PLAINTIFF IN A BACKPAY CASE DIFFERENTLY BECAUSE THE UNITED STATES
GOVERNMENT IS THE DEFENDANT.
2. INTEREST ON BACKPAY
OFTEN MANY YEARS GO BY AFTER AN EMPLOYEE UNDERGOES AN UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION BEFORE HIS RIGHT TO COMPENSATION IS
ESTABLISHED AND HE ACTUALLY RECEIVES HIS BACKPAY. SOMETIMES LARGE SUMS
OF MONEY ARE INVOLVED WHICH MAY CONSIST OF AN EMPLOYEE'S PAY, ALLOWANCES
AND DIFFERENTIALS FOR A NUMBER OF YEARS, AMOUNTING TO AS MUCH AS
$100,000 OR MORE. DELAY IN RECEIPT OF SUCH MONEY DEPRIVES THE EMPLOYEE
OF INVESTMENT OPPORTUNITIES TO MAKE HIS CAPITAL GROW. HOWEVER, THE
GENERAL RULE OF LAW IS THAT IN THE ABSENCE OF A CONTRACT OR A STATUTE
EXPRESSING A CONTRARY INTENTION, INTEREST DOES NOT RUN UPON CLAIMS
AGAINST THE GOVERNMENT. SEABOARD AIR LINE RAILWAY V. UNITED STATES, 261
U.S. 299, 304 (1923); SMYTH V. UNITED STATES, 302 U.S. 329, 353 (1937);
45 COMP. GEN. 169 (1965).
INASMUCH AS THE BACKPAY STATUTE DOES NOT SPECIFICALLY PROVIDE FOR THE
PAYMENT OF INTEREST, NO INTEREST MAY BE PAID ON ANY BACKPAY ALLOWANCES
AND DIFFERENTIALS RECOVERED BY AN EMPLOYEE. IF IT IS DESIRED TO MAKE
THE EMPLOYEE WHOLE WITH REGARD TO INTEREST ON HIS CLAIM, THEN IT WOULD
BE NECESSARY TO AMEND THE BACKPAY STATUTE, 5 U.S.C. SEC. 5596, SUPRA, TO
AUTHORIZE THE PAYMENT OF INTEREST ON THE CLAIM.
3. CONSEQUENTIAL DAMAGES
PRESENTLY THE BACK PAY ACT OF 1966, 5 U.S.C. SEC. 5596, SUPRA, AND
IMPLEMENTING REGULATIONS, AUTHORIZE RECOMPENSE ONLY FOR ACTUAL DAMAGES
RESULTING DIRECTLY FROM THE UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION.
THESE DAMAGES ARE EQUIVALENT TO THE EXACT AMOUNT OF PAY, ALLOWANCES, OR
DIFFERENTIALS THE EMPLOYEE WOULD HAVE RECEIVED AS A RIGHT HAD THE
UNJUSTIFIED OR UNWARRANTED ACTION NOT OCCURRED. OTHER LOSSES THAT ARE
INCIDENT TO AND OCCASIONED BY THE UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION ARE NOT COMPENSABLE. FOR EXAMPLE, AN EMPLOYEE WHO IS REMOVED MAY
FIND IT IMPOSSIBLE TO CONTINUE MAKING HIS HOUSE AND CAR PAYMENTS. THE
LOSS OF HIS EQUITY IN HIS CAR OR HOUSE THROUGH REPOSSESSION OR
FORECLOSURE ACTIONS CANNOT BE REMEDIED UNDER THE PRESENT LAW AND AN
AMENDMENT OF THE BACK PAY ACT WOULD BE REQUIRED TO AUTHORIZE
COMPENSATION FOR SUCH LOSSES. MOREOVER, THERE IS NO WAY TO MAKE HIM
WHOLE FOR LOST PROMOTION OR TRAINING OPPORTUNITIES, IN THE ABSENCE OF A
SHOWING THAT SUCH OPPORTUNITIES WOULD DEFINITELY HAVE BEEN GIVEN TO HIM
HAD THE WRONGFUL ACTION NOT TAKEN PLACE. FINALLY, IN THE ABSENCE OF A
COURT TEST, THERE IS NO CLEAR AUTHORITY TO AWARD RECOMPENSE FOR SUCH
DAMAGES AS THE LOSS OF PROFESSIONAL REPUTATION AND STANDING.
4. RESTORATION OF ANNUAL LEAVE TO EMPLOYEE REINSTATED UNDER THE BACK
PAY ACT
UNDER TAB B.6, WE DISCUSSED THE PROVISIONS OF PUB. L. 93-181, 5
U.S.C. SEC. 6304(D) (SUPP. III, 1973), AND THE CSC IMPLEMENTING
REGULATIONS IN FPM LETTER NO. 630-22, DATED JANUARY 11, 1974. WE NOTED
THAT WHEN AN EMPLOYEE WHO HAD PLANNED IN ADVANCE TO TAKE ANNUAL LEAVE
WHICH, IF NOT TAKEN, WOULD BE FORFEITED BECAUSE IT WAS IN EXCESS OF THE
MAXIMUM LEAVE ACCUMULATION PERMITTED BY LAW, WAS PREVENTED FROM TAKING
IT THROUGH NO FAULT OF HIS OWN, BUT RATHER BECAUSE OF (1) THE EXIGENCIES
OF PUBLIC BUSINESS, (2) SICKNESS OF THE EMPLOYEE, OR (3) ADMINISTRATIVE
ERROR, THAT LEAVE CAN BE CREDITED TO A SPECIAL LEAVE ACCOUNT AND SAVED
FOR LATER USE WITHIN CERTAIN SPECIFIED TIME LIMITS. THE PROBLEM CENTERS
ON AN EMPLOYEE WHO CLAIMS RESTORATION OF LEAVE UNDER THE THIRD CONDITION
MENTIONED - "ADMINISTRATIVE ERROR."
IF AN EMPLOYEE USED LESS LEAVE THAN HE WAS ENTITLED TO BECAUSE HIS
AGENCY MISTAKENLY ASSIGNED HIM TO A LOWER LEAVE-EARNING CATEGORY - E.G.,
4 HOURS PER PAY PERIOD INSTEAD OF 6 HOURS) - AND AS A RESULT, HIS LEAVE
BALANCE EXCEEDS THE USUAL 30-DAY CARRYOVER LIMITATION AT THE END OF THE
LEAVE YEAR, IT IS NOT TOO DIFFICULT TO INVOKE THE ABOVE-CITED STATUTE TO
PROTECT HIS LEAVE FROM FORFEITURE SINCE CLEARLY AN "ADMINISTRATIVE
ERROR" HAD OCCURRED. BUT WHAT IF THE EMPLOYEE ACCRUED ANNUAL LEAVE HE
HAD NO OPPORTUNITY TO USE BECAUSE HE WAS WRONGFULLY SEPARATED OR
SUSPENDED? UNDER THE BACK PAY ACT, SUCH A WRONGFUL SEPARATION OR
SUSPENSION WOULD BE REGARDED AS AN "UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION," AND UPON REINSTATEMENT TO DUTY, THE EMPLOYEE WOULD BE AWARDED
NOT ONLY HIS BACKPAY BUT ALSO ANY LEAVE HE WOULD OTHERWISE HAVE ACCRUED.
HOWEVER, IF THAT ACCRUED LEAVE EXCEEDS LEGAL CARRY-OVER LIMIT, THE
EXCESS WOULD BE FORFEITED. THE INCOMPLETE REMEDY IN THIS SITUATION
RESULTS FROM THE FOLLOWING STATEMENT REGARDING "ADMINISTRATIVE ERROR"
WHICH APPEARS ON PAGE 3 OF THE ATTACHMENT TO THE CITED FPM LETTER:
"(3) SECTION 5596 OF TITLE 5 PROVIDES THE BASIC GUIDELINES FOR
DETERMINING ENTITLEMENT TO PAY, ALLOWANCES, AND BENEFITS IN THE EVENT AN
EMPLOYEE IS FOUND TO HAVE UNDERGONE AN UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION. THIS SECTION PROVIDES THAT ANNUAL LEAVE IS TO BE
RESTORED UP TO THE MAXIMUM AMOUNT PERMITTED BY THE LEAVE SYSTEM UNDER
WHICH THE EMPLOYEE IS COVERED. FOR PURPOSES OF PUBLIC LAW 93-181, (5
U.S.C. SEC. 6304(D)) UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTIONS ARE
NOT CONSIDERED TO BE ADMINISTRATIVE ERRORS. THUS, AN EMPLOYEE, UNDER
SECTION 5596, IS NOT ENTITLED TO EXCEED THE NORMAL MAXIMUM AMOUNT OF
ANNUAL LEAVE PERMITTED UNDER THE APPROPRIATE LEAVE SYSTEM."
WE BELIEVE THAT THERE IS NO SUBSTANTIVE DIFFERENCE BETWEEN THE USE OF
THE TWO TERMS "ADMINISTRATIVE ERROR" AND "UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTION" IN THIS CONTEXT AND THAT A REGULATORY CHANGE THAT
PERMITTED APPLICATION OF PUB. L. 93-181 TO "UNJUSTIFIED OR UNWARRANTED
PERSONNEL ACTIONS" WOULD BE CONSISTENT WITH CONGRESSIONAL INTENT.
HOWEVER, THE CSC POINTS TO THE DELIBERATE USE OF THE WORDS
"ADMINISTRATIVE ERROR" IN THE STATUTE AND SUGGESTS THAT THE RESTRICTION
MAY HAVE BEEN INTENTIONAL. IN THAT CASE, IT WOULD REQUIRE NEW
LEGISLATION TO AMEND THIS STATUTE SO THAT REMEDIAL MEASURES WOULD BE
AVAILABLE FOR THIS CLASS OF ERRONEOUS PERSONNEL ACTIONS.
IT SHOULD BE POINTED OUT THAT THE PROVISIONS OF 5 U.S.C. SEC.
6304(D)(1)(A) AUTHORIZE THE RESTORATION OF LOST LEAVE RETROACTIVELY TO
JUNE 30, 1960, WHICH WOULD, IF CONSTRUED TO COVER UNJUSTIFIED AND
UNWARRANTED PERSONNEL ACTIONS, ALLOW A GREAT NUMBER OF PERSONS WHO HAVE
UNDERGONE SUCH ACTIONS, TO RECREDIT LEAVE OR OBTAIN LUMP-SUM LEAVE
PAYMENTS AS IS AUTHORIZED BY THE LAW. IN THIS CONNECTION WE HAVE NO
INFORMATION AS TO HOW MANY PERSONS WOULD BE INVOLVED IF SUCH A CHANGE
WERE MADE.
5. RECOMPENSE FOR DISCRIMINATION IN HIRING ON NON-EEO GROUNDS
IT IS A GENERAL PRINCIPLE OF LAW THAT THE SALARY AND OTHER
ENTITLEMENTS OF A GOVERNMENT JOB ARE INCIDENT TO AND ATTACHED TO THE
JOB. THEY ARE THUS A PART OF THE JOB AND GO WITH IT. CONSEQUENTLY, THE
SALARY AND OTHER ENTITLEMENTS ARE PAYABLE ONLY TO THE PERSON APPOINTED
TO THE JOB, AND A GOVERNMENT EMPLOYEE IS ENTITLED ONLY TO THE SALARY AND
OTHER BENEFITS OF THE POSITION TO WHICH HE HAS BEEN APPOINTED. SEE
BORAK V. UNITED STATES, 78 F. SUPP. 123 (CT. CL. 1948, CERT. DENIED),
335 U.S. 821; PRICE V. UNITED STATES, 80 F. SUPP. 542 (CT. CL. 1948);
GANSE V. UNITED STATES, 376 F.2D 900 (CT. CL. 1967). IF AN APPLICANT
FOR EMPLOYMENT IS NOT SELECTED ON THE BASIS OF DISCRIMINATION BECAUSE OF
HIS RACE, COLOR, RELIGION, SEX, OR NATIONAL ORIGIN, AN EXCEPTION IS MADE
AND THE AGENCY MAY BE ORDERED TO HIRE HIM UNDER THE PROVISIONS OF THE
EEOA. (SEE DISCUSSION UNDER TAB B.3.) HOWEVER, IF HE IS NOT SELECTED ON
SOME EQUALLY UNJUSTIFIED OR UNWARRANTED NON-EEO GROUND, AND THEREFORE
NEVER APPOINTED, HE HAS NOT SUFFERED A DIMUNITION OF PAY OR OTHER
ENTITLEMENTS SO AS TO COME WITHIN THE PURVIEW OF ANY MAKE-WHOLE
LEGISLATION SUCH AS THE BACKPAY STATUTE, 5 U.S.C. SEC. 5596.
ACCORDINGLY, IF CORRECTIVE ACTION FOR THIS MAKE-WHOLE GAP IS DEEMED
DESIRABLE, THE BACKPAY STATUTE WOULD HAVE TO BE AMENDED TO ALSO COVER
APPLICANTS FOR EMPLOYMENT AS WELL AS EMPLOYEES.
6. REIMBURSEMENT TO RESTORED EMPLOYEE FOR COMMERCIAL HEALTH
INSURANCE
5 U.S.C. SEC. 8908 (1970) PROVIDES AUTHORITY TO RESTORE HEALTH
INSURANCE BENEFITS TO EMPLOYEES WHO WERE IMPROPERLY REMOVED OR SUSPENDED
FROM GOVERNMENT EMPLOYMENT, FOLLOWING REINSTATEMENT UNDER THE BACK PAY
ACT. (SEE DISCUSSION AT TAB B.1.) HOWEVER, THE STATUTE OFFERS THE
EMPLOYEE ONLY THE OPTION OF ENROLLING AS THOUGH HE WERE A NEW EMPLOYEE
IN ONE OF THE GOVERNMENT HEALTH PLANS PROVIDED "UNDER THIS CHAPTER," IN
WHICH CASE HIS PAYMENTS DURING THE PERIOD OF HIS REMOVAL ARE WAIVED BUT
HE CANNOT CLAIM ANY BENEFITS FOR THE PERIOD IN QUESTION, OR HE MAY
CHOOSE TO BE CONSIDERED AS RETROACTIVELY RESTORED TO COVERAGE, IN WHICH
CASE HE MUST MAKE THE REQUIRED CONTRIBUTIONS FOR THE PERIOD OF HIS
REMOVAL BUT MAY ALSO FILE ANY CLAIMS HE MAY HAVE FOR THE SAME PERIOD.
IT MAY BE ASKED WHETHER THE GOVERNMENT'S "MAKE-WHOLE" OBLIGATION IS
FULLY MET BY CONFINING THE REMEDY TO RESTORATION OF BENEFITS UNDER ONE
OF ITS OWN HEALTH INSURANCE PLANS. MANY YEARS MAY ELAPSE BEFORE AN
EMPLOYEE HAS BEEN VINDICATED AFTER AN UNLAWFUL REMOVAL FROM GOVERNMENT
SERVICE AND REINSTATED. QUITE POSSIBLY HE IS READY TO RETIRE BY THAT
TIME. IN ANY CASE, IT IS NOT UNREASONABLE TO EXPECT THAT DURING THESE
INTERVENING YEARS, A PRUDENT INDIVIDUAL WOULD PURCHASE ALTERNATIVE
HEALTH INSURANCE ON THE COMMERCIAL MARKET, AT CONSIDERABLE FINANCIAL
COST. IT IS NOT MUCH HELP TO OFFER HIM REINSTATEMENT IN A GOVERNMENT
HEALTH INSURANCE PLAN IF HE IS CLOSE TO RETIREMENT.
TO MAKE HIM TRULY WHOLE FINANCIALLY, A LEGISLATIVE AMENDMENT TO 5
U.S.C. SEC. 8903 WOULD BE NECESSARY, OFFERING, AS A THIRD OPTION OR IN
ADDITION TO OPTION C WHICH PERMITS ENROLLMENT AS A NEW EMPLOYEE,
REIMBURSEMENT FOR THE PORTION OF HIS PREMIUMS FOR COMMERCIAL HEALTH
INSURANCE EQUAL TO THE CONTRIBUTION NORMALLY MADE FOR ITS EMPLOYEES BY
THE FEDERAL GOVERNMENT.
B-133170 L/M, JAN 29, 1975
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
GEORGE H. MAHON, HOUSE OF REPRESENTATIVES:
YOUR LETTER OF JANUARY 13, 1975, REQUESTED OUR REVIEW OF THE
PROPRIATY AND LEGALITY OF A PROPOSAL BY THE DEPARTMENT OF DEFENSE (DOD)
TO PROCEED WITH NAVY SHIPBUILDING PROGRAMS AS PRESENTLY CONSTITUTED IN
SPITE OF PREDICTED FUNDING DEFICITS.
THE NAVY SHIPBUILDING PROGRAMS WERE FUNDED IN A TOTAL AMOUNT OF
$3,059 MILLION, TO REMAIN AVAILABLE FOR FIVE FISCAL YEARS, UNDER THE
HEADING "SHIPBUILDING AND CONVERSION, NAVY" IN TITLE IV OF THE
DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1975, APPROVED OCTOBER 8, 1974,
PUB. L. NO. 93-437, 88 STAT. 1220. INDIVIDUAL PROGRAMS UNDER THE
SHIPBUILDING AND CONVERSION, NAVY HEADING WERE FUNDED IN 1975 AS
SEPARATE LINE ITEMS, IN ACCORDANCE WITH THE DEPARTMENT OF DEFENSE
APPROPRIATION AUTHORIZATION ACT, 1975, APPROVED AUGUST 5, 1974, PUB. L.
NO. 93-365, 88 STAT. 399, 400.
THE PROBLEMS EXISTING WITH RESPECT TO THE SHIPBUILDING PROGRAMS AND
DOD'S PROPOSED ACTION ARE DESCRIBED IN A LETTER TO YOU FROM THE DEPUTY
SECRETARY OF DEFENSE DATED JANUARY 9, 1975. THE DEPUTY SECRETARY'S
LETTER INDICATES THAT THERE IS A PREDICTED FUNDING DEFICIT OF $2,269
MILLION THROUGH THE YEARS DURING WHICH SHIPS WILL BE UNDER CONSTRUCTION,
RESULTING PRIMARILY FROM UNEXPECTED INFLATION, CHANGED MARKET
CONDITIONS, AND NECESSARY PROGRAM CHANGES. OF THE TOTAL PREDICTED
DEFICIT, $1,354 MILLION APPLIES TO SHIPBUILDING PROGRAMS FOR FISCAL YEAR
1974 AND PRIOR YEARS WHICH ARE ALL UNDER CONTRACT. AS TO THIS PORTION
OF THE DEFICIT, THE DEPUTY SECRETARY STATES:
"ACCORDING TO PRACTICE, THE FUNDING PROBLEM ON THE FISCAL YEAR 1974
AND PRIOR PROGRAMS WILL BE BUDGETED IN THE FISCAL YEAR 1976 BUDGET, WITH
THE DEPARTMENT REQUESTING NEW APPROPRIATIONS TO RESTORE THOSE SHIP
PROGRAMS TO A FULLY FUNDED STATUS. THIS PROCEDURE, WITH SOME
REPROGRAMMING OF EXISTING FUNDS TO INSURE PROPER ALLOCATION WITHIN LINE
ITEMS, ALLOWS THOSE PROGRAMS WITH FUNDING DEFICIENCIES TO CONTINUE
WITHOUT DISRUPTION."
THE REMAINING $915 MILLION OF THE PREDICTED DEFICIT APPLIES TO THE
FISCAL YEAR 1975 PROGRAMS, AND IS DISCUSSED IN THE DEPUTY SECRETARY'S
LETTER AS FOLLOWS:
"THE FUNDING DEFICIT IN THE FISCAL YEAR 1975 PROGRAM PRESENTS A
SOMEWHAT DIFFERENT PROBLEM, INASMUCH AS ONLY ONE SHIP FROM THAT PROGRAM
IS CURRENTLY UNDER A CONTRACT - THE FLEET BALLISTIC MISSILE SUBMARINE
TENDER CONVERSION. UNLESS ALLOWED SOME DEPARTURE FROM THE PRACTICE OF
HAVING ALL FUNDS FOR PREDICTED ESCALATION AND INFLATION IN HAND PRIOR TO
CONTRACT AWARD, THE NAVY WOULD BE UNABLE TO CONTRACT FOR THE 22 BADLY
NEEDED NEW SHIPS APPROVED BY THE CONGRESS IN FISCAL YEAR 1975. SUCH A
SITUATION IS HIGHLY UNDESIRABLE FROM BOTH A NATIONAL DEFENSE AND
ECONOMIC STANDPOINT. AN ALTERNATIVE WHICH WOULD REDUCE SHIP PROGRAMS BY
ALLOWING AWARD OF ONLY SO MUCH PROGRAM AS EACH LINE ITEM APPROPRIATION
CAN SUPPORT ON A FULLY FUNDED BASIS WOULD ALSO IMPACT SEVERELY THE
NAVY'S URGENTLY NEEDED FLEET MODERNIZATION EFFORT. IT COULD ALSO RESULT
IN ONE CONTRACT DEFAULT (DD 963, JANUARY 15, 1975) AND WOULD CAUSE TWO
MISSED CONTRACT OPTIONS (BLGN 41/42, FEBRUARY 1, 1975 AND TRIDENT,
FEBRUARY 28, 1975). THE RESULTING PROGRAM DISRUPTION, CANCELLED SHIP
PROCUREMENTS, LEGAL IMPLICATIONS ON SUBSEQUENT CLAIMS, AND HIGHER COSTS
WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST.
"IT IS IMPERATIVE THAT WE FIND A SOLUTION. I THINK YOU WILL AGREE
THAT THERE IS NO ALTERNATIVE BUT TO PROCEED WITH A PLAN THAT WILL
MAINTAIN A VIABLE SHIPBUILDING PROGRAM AND AVOID THE PENALTIES
ASSOCIATED WITH LOSS OF OPTIONS OR CONTRACT DEFAULT. IT HAS BEEN OUR
POLICY TO HAVE ALL REQUIRED FUNDING IN HAND, INCLUDING ESTIMATES OF
INFLATION, PRIOR TO CONTRACT AWARD. HOWEVER, BECAUSE OF THE
EXTRAORDINARY CIRCUMSTANCES AND THE UNFORSEEN INFLATION, WE ARE
CONTEMPLATING A PROCEDURAL ADJUSTMENT WHICH WILL PERMIT THE DEPARTMENT
TO PROCEED WITH CONSTRUCTION OF SHIPS ALREADY AUTHORIZED BY THE
CONGRESS. I INTEND THEREFORE TO KEEP YOU ADVISED AND TAKE TIMELY ACTION
TO AUTHORIZE THE NAVY TO IMPLEMENT THE FISCAL YEAR 1975 SHIPBUILDING
PROGRAM REQUIRING THAT EACH CONTRACT AND OBLIGATIONAL DOCUMENT BE FULLY
FUNDED EXCEPT FOR ESCALATION ESTIMATES BEYOND FISCAL YEAR 1975. THE
ADDITIONAL FUNDING REQUIREMENTS WILL BE INCLUDED IN THE FISCAL YEAR 1976
SCN BUDGET."
YOUR LETTER TO US PRESENTS THE FOLLOWING MATTERS FOR CONSIDERATION IN
TERMS OF THE DOD PROPOSAL:
"OF IMMEDIATE CONCERN TO THE COMMITTEE IS THE SECRETARY'S PROPOSAL TO
AWARD FISCAL YEAR 1975 CONTRACTS FOR CERTAIN SHIPS, KNOWING FULL WELL
THAT FUNDS REQUESTED AND MADE AVAILABLE BY THE CONGRESS ARE INSUFFICIENT
BY $915 MILLION. THIS PROPOSAL NOT ONLY VIOLATES THE FULL-FUNDING
CONCEPT, WHICH HAS BEEN IN EXISTENCE SINCE FISCAL YEAR 1961, BUT IT
RAISES CERTAIN QUESTIONS, WHICH MAY BE LEGALLY GERMANE, AS TO THE
PROPRIETY OF THIS ACTION IN LIGHT OF THE LINE ITEM AUTHORIZATION AND
APPROPRIATION BY CONGRESS IN THE FISCAL YEAR 1975 SHIPBUILDING AND
CONVERSION, NAVY, PROGRAM. THE PURPOSE OF THE LINE ITEM APPROACH WAS TO
BRING GREATER CONGRESSIONAL CONTROL OVER FUNDS AUTHORIZED AND
APPROPRIATED FOR THE NAVY SHIPBUILDING PROGRAM. THIS IS THE ONLY
DEFENSE PROGRAM WHICH HAS RECEIVED LINE ITEM AUTHORIZATION AND
APPROPRIATION.
"IF WE FOLLOW THE DEPARTMENT'S PROPOSAL, OUR COMMITTEE WOULD BE IN
EFFECT COMMITTING CONGRESS IN ADVANCE TO AUTHORIZE AND APPROPRIATE $915
MILLION IN FISCAL YEAR 1976 IN ORDER TO COMPLETE THE FUNDING OF FISCAL
YEAR 1975 SHIPS. THE ONLY OTHER ALTERNATIVE AVAILABLE TO CONGRESS IN
FISCAL YEAR 1976 WOULD BE TO CANCEL CERTAIN FISCAL YEAR 1975 SHIPS
ALREADY AWARDED ON CONTRACTS AND PARTIALLY BUILT, INCREASING THE FUNDING
DEFICIT BY THE ADDITIONAL TERMINATION COSTS ATTENDANT THERETO, IN ORDER
TO FULLY FUND THE HIGHEST PRIORITY SHIPS IN THE FISCAL YEAR 1975
PROGRAM."
SINCE RECEIPT OF YOUR LETTER WE HAVE ON SEVERAL OCCASIONS INFORMALLY
DISCUSSED THE DOD PROPOSAL, AND POSSIBLE LEGAL ISSUES IN CONNECTION
THEREWITH, WITH OFFICIALS OF THAT DEPARTMENT AND THE NAVY DEPARTMENT.
IN THE BRIEF TIME PERIOD AVAILABLE FOR OUR RESPONSE, WE HAVE NOT
ATTEMPTED TO UNDERTAKE A DETAILED FACTUAL REVIEW OF THE DOD PROPOSAL OR
THE PRESUMABLY NUMEROUS AND VARIED PROCUREMENT ACTIONS WHICH IT WOULD
ENTAIL. ACCORDINGLY, OUR RESPONSE IS NECESSARILY LIMITED TO A GENERAL
CONCEPTUAL ANALYSIS OF THE PROPOSAL ON THE BASIS OF THE DEPUTY
SECRETARY'S LETTER TO YOU AND ADDITIONAL REPRESENTATIONS MADE TO US IN
THE COURSE OF OUR INFORMAL DISCUSSIONS WITH DOD AND NAVY OFFICIALS.
AS YOU POINT OUT AND THE DEPUTY SECRETARY SPECIFICALLY STATES, THE
DOD PROPOSAL WOULD CONSTITUTE A DEPARTURE FROM THE FULL FUNDING POLICY"
APPLICABLE TO MILITARY PROCUREMENT PROGRAMS SUCH AS NAVY SHIPBUILDING.
THE PREMISE OF THE FULL FUNDING POLICY, AS DEVELOPED BY DOD AND
CONGRESSIONAL COMMITTEES, IS THAT FUNDING FOR PROCUREMENT PROGRAMS
SHOULD BE REQUESTED AND PROVIDED AT THE INITIAL STAGE OF PROCUREMENT
ACTIONS ON THE BASIS OF THE ENTIRE ESTIMATED COST OF THE PROCUREMENT,
IRRESPECTIVE OF THE ANTICIPATED FISCAL YEAR TIMING AND RATE OF
OBLIGATIONS. FULL FUNDING IS TO BE DISTINGUISHED FROM AN "INCREMENTAL
FUNDING" APPROACH WHEREBY APPROPRIATIONS FOR LONG-TERM UNDERTAKINGS ARE
REQUESTED AND PROVIDED IN FISCAL YEAR INSTALLMENTS LIMITED IN AMOUNT TO
THE ANTICIPATED OBLIGATIONS NECESSARY DURING PARTICULAR FISCAL YEARS.
SEE OUR REPORT TO YOUR COMMITTEE DATED FEBRUARY 17, 1969, B-165069,
ENTITLED "APPLICATION OF THE FULL FUNDING CONCEPT AND ANALYSIS OF THE
UNOBLIGATED AND UNEXPENDED BALANCES IN SELECTED APPROPRIATIONS," AT
5-14. THE FULL FUNDING POLICY IS THE SUBJECT OF DOD DIRECTIVE NO.
7200.4 (OCTOBER 30, 1969), AND IS DESCRIBED IN SECTION III-A THEREOF, IN
PART, AS FOLLOWS:
"GENERAL. FULL FUNDING IS THE TERM USED TO DESCRIBE THE PRINCIPLE
WHICH HAS BEEN APPLIED BY THE CONGRESS IN PROVIDING FUNDS FOR THE
DEPARTMENT OF DEFENSE PROGRAMS WHICH ARE COVERED WITHIN THE PROCUREMENT
TITLE OF THE YEARLY APPROPRIATION ACTS. *** THE OBJECTIVE IS TO PROVIDE
FUNDS AT THE OUTSET FOR THE TOTAL ESTIMATED COST OF A GIVEN ITEM SO THAT
THE CONGRESS AND THE PUBLIC CAN CLEARLY SEE AND HAVE A COMPLETE
KNOWLEDGE OF THE FULL DIMENSIONS AND COST WHEN IT IS FIRST PRESENTED FOR
AN APPROPRIATION. IN PRACTICE, IT MEANS THAT EACH ANNUAL APPROPRIATION
REQUEST MUST CONTAIN THE FUNDS ESTIMATED TO BE REQUIRED TO COVER THE
TOTAL COST TO BE INCURRED IN COMPLETING DELIVERY OF A GIVEN QUANTITY OF
USABLE END ITEMS, SUCH AS AIRCRAFT, MISSILES, SHIPS, VEHICLES,
AMMUNITION, AND ALL OTHER ITEMS OF EQUIPMENT. THIS POLICY IS ALSO A
REQUIREMENT OF THE BUREAU OF THE BUDGET AS EXPRESSED IN THEIR CIRCULAR
NO. A-11, 'PREPARATION AND SUBMISSION OF ANNUAL BUDGET ESTIMATES."
THE DEPUTY SECRETARY'S LETTER TO YOU STATES THAT APPLICATION OF THE
FULL FUNDING POLICY TO THE 1975 SHIPBUILDING PROGRAMS HERE INVOLVED
WOULD PRECLUDE CONTRACTING FOR 22 SHIPS IN VIEW OF THE CURRENT PREDICTED
COSTS FOR ESCALATION AND INFLATION. IT IS PROPOSED, THEREFORE, TO
PROCEED WITH THE 1975 PROGRAMS AS SCHEDULED WITHOUT REQUIRING THAT
CONTRACTS AND OBLIGATIONAL DOCUMENTS BE FULL FUNDED FOR ESCALATION
ESTIMATES BEYOND FISCAL YEAR 1975. ADDITIONAL FUNDING WOULD THEN BE
REQUESTED FOR FISCAL YEAR 1976 TO MEET INCREASED COSTS FOR FUTURE FISCAL
YEARS.
AS SUGGESTED IN YOUR LETTER, IMPLEMENTATION OF THE DOD PROPOSAL
WOULD, AS A PRACTICAL MATTER, LIMIT CONGRESSIONAL OPTIONS.
NEVERTHELESS, WE DO NOT BELIEVE THAT THIS PROPOSED DEPARTURE FROM FULL
FUNDING IS LEGALLY OBJECTIONABLE AS SUCH. THE DETERMINATIVE FACTOR
HERE, IN OUR VIEW, IS THAT THE FULL FUNDING POLICY DOES NOT CONSTITUTE A
STATUTORY REQUIREMENT. IT IS, INSTEAD, A POLICY DEVELOPED BETWEEN DOD
AND CONGRESSIONAL COMMITTEES AND FORMALIZED BY A DOD DIRECTIVE. THE
FULL FUNDING POLICY IS IN THIS REGARD SIMILAR TO FORMALIZED BUT
NONSTATUTORY POLICIES WHICH GOVERN REPROGRAMMING ACTIONS WITHIN
APPROPRIATIONS FOR THE MILITARY DEPARTMENTS. MOREOVER, SECTION V OF DOD
DIRECTIVE 7200.4 IN EFFECT PROVIDES FOR EXCEPTIONS FROM THE FULL FUNDING
POLICY UPON SPECIFIC APPROVAL BY THE SECRETARY OF DEFENSE. WE DO NOT,
OF COURSE, QUESTION THE VALIDITY OR APPROPRIATENESS OF THE FULL FUNDING
POLICY, NOR DOES THE DEPUTY SECRETARY'S LETTER TO YOU INDICATE ANY
OBJECTION TO OR ABANDONMENT OF THIS POLICY EXCEPT AS STATED IN THE
INSTANT PROPOSAL. RATHER, THE THRUST OF HIS LETTER, AND OF INFORMAL
REPRESENTATIONS MADE TO US, IS THAT A DILEMMA EXISTS WITH RESPECT TO THE
SHIPBUILDING PROGRAMS IN WHICH A DEPARTURE FROM FULL FUNDING IS THE
LEAST OBJECTIONABLE ALTERNATIVE.
AS NOTED PREVIOUSLY, WE ASSUME THAT UNDER THE DOD PROPOSAL A NUMBER
OF PROCUREMENT ACTIONS WOULD BE INITIATED IN FISCAL YEAR 1975 PURSUANT
TO THE VARIOUS LINE ITEM SHIPBUILDING PROGRAMS. PROCUREMENTS FOR
CERTAIN PROGRAM ELEMENTS MIGHT STILL BE CAPABLE OF COMPLETION WITHIN THE
LIMITS OF APPROPRIATIONS NOW AVAILABLE, ALTHOUGH THE TOTAL COST OF THE
ENTIRE PROGRAM IS NOT FULLY FUNDED UNDER CURRENT ESTIMATES. WHILE
INITIATION OF SUCH PROCUREMENT ACTIONS WOULD DEPART FROM THE FULL
FUNDING POLICY, THIS RESULT IS NOT, IN OUR VIEW, LEGALLY OBJECTIONABLE
FOR THE REASONS STATED ABOVE. HOWEVER, WE BELIEVE THAT SERIOUS LEGAL
ISSUES WOULD ARISE TO THE EXTENT THAT THE DOD PROPOSAL MIGHT INCLUDE
INITIATION OF PROCUREMENT ACTIONS DURING FISCAL YEAR 1975 WHICH OF
THEMSELVES INVOLVE PREDICTED FUNDING DEFICITS. THIS WOULD BE THE CASE
WITH RESPECT TO ANY PROCUREMENT ACTION WHICH, UNDER CURRENT ESTIMATES
FOR ESCALATION AND INFLATION, WOULD CAUSE THE GOVERNMENT TO INCUR
OBLIGATIONS EXCEEDING THE AMOUNT OF APPROPRIATIONS NOW AVAILABLE FOR
SUCH PROCUREMENT. OF CONCERN HERE IS THE SO-CALLED "ANTIDEFICIENCY
ACT," R.S. SEC. 3676, AS AMENDED, 31 U.S.C. SEC. 665(A)(1970), WHICH
PROVIDES:
"NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE
AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY
APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR
SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY
CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE,
IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT
OR OBLIGATION IS AUTHORIZED BY LAW."
ALSO OF CONCERN IS R.S. SEC. 3732, AS AMENDED, 41 U.S.C. SEC. 11
(1970), WHICH PROVIDES, WITH EXCEPTIONS NOT HERE RELEVANT:
"(A) NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE
MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION
ADEQUATE TO ITS FULFILLMENT ***."
OUR INFORMAL DISCUSSIONS WITH DOD AND NAVY OFFICIALS CONCERNING THE
APPLICABILITY OF THE CITED STATUTORY PROVISIONS TO THE INSTANT PROPOSAL
HAVE FOCUSED UPON THE NATURE AND EXTENT OF OBLIGATIONS UNDER THE
PROCUREMENT ACTIONS TO BE INITIATED IN FISCAL YEAR 1975. IT IS OUR
UNDERSTANDING THAT SOME OF THESE PROCUREMENT ACTIONS ARE IN THE NATURE
OF FIXED PRICE INCENTIVE CONTRACTS, HAVING NEGOTIATED "TARGET" AND
"CEILING" PRICES BUT PROVIDING FOR SUBSEQUENT DETERMINATION OF ACTUAL
COSTS AND PRICE. SEE ASPR SEC. 3-404.4 (1 JULY 1974). WE HAVE ALSO
BEEN ADVISED THAT IN THE CASE OF SUCH PROCUREMENT ACTIONS THE TARGET
PRICE WOULD BE THE AMOUNT RECORDED AGAINST THE APPLICABLE APPROPRIATION
FOR PURPOSES OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT,
1955, AS AMENDED, 31 U.S.C. SEC. 200 (1970), WHICH PROVIDES IN PART:
"(A) *** NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE
GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY
EVIDENCE OF -
"(1) A BINDING AGREEMENT IN WRITING BETWEEN THE PARTIES THERETO,
INCLUDING GOVERNMENT AGENCIES, IN A MANNER AND FORM AND FOR A PURPOSE
AUTHORIZED BY LAW, EXECUTED BEFORE THE EXPIRATION OF THE PERIOD OF
AVAILABILITY FOR OBLIGATION OF THE APPROPRIATION OR FUND CONCERNED FOR
SPECIFIC GOODS TO BE DELIVERED, REAL PROPERTY TO BE PURCHASED OR LEASED,
OR WORK OR SERVICES TO BE PERFORMED ***."
THE POSITION TAKEN BY DOD OFFICIALS IN OUR INFORMAL DISCUSSIONS IS
THAT, SINCE THE AMOUNT OF RECORDED OBLIGATIONS ON A "TARGET PRICE" BASIS
WOULD NOT EXCEED THE AMOUNT OF APPROPRIATIONS CURRENTLY AVAILABLE, THE
INITIATION OF SUCH PROPOSED PROCUREMENT ACTIONS WILL NOT VIOLATE EITHER
31 U.S.C. SEC. 665(A) OR 41 U.S.C SEC. 11(A), SUPRA, WHICH STATUTORY
PROVISIONS ARE VIEWED AS SUBSTANTIVELY THE SAME. MOREOVER, IT IS SAID
THAT NO VIOLATION OF 31 U.S.C. SEC. 665(A) WILL OCCUR IN THE FUTURE
BECAUSE IF CONGRESS APPROPRIATES THE ADDITIONAL FUNDS TO BE REQUESTED,
THE DEFICITS NOW PREDICTED FOR FUTURE FISCAL YEARS WILL BE MADE UP. IF,
ON THE OTHER HAND, THE CONGRESS FAILS TO PROVIDE ADDITIONAL FUNDING,
PROCUREMENTS WOULD BE TERMINATED BEFORE PREDICTED DEFICITS ACCRUE.
IN A 1955 DECISION TO THE SECRETARY OF DEFENSE, 34 COMP. GEN. 418, WE
APPROVED THE RECORDING OF OBLIGATIONS UNDER CONTRACTS OF THE TYPE
DESCRIBED ABOVE ON A TARGET PRICE OR SIMILAR BASIS FOR PURPOSES OF
SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, SUPRA. WE OBSERVED
WITH REFERENCE TO A PROPOSED DOD DIRECTIVE TO THIS EFFECT, 34 COMP. GEN.
AT 420-21:
"*** SUBSECTION (B) (OF THE PROPOSED DIRECTIVE) PROVIDES THAT UNDER
FIXED-PRICE CONTRACTS WITH ESCALATION, PRICE REDETERMINATION, OR
INCENTIVE PROVISIONS, OBLIGATIONS SHALL BE RECORDED FOR THE AMOUNT OF
THE FIXED PRICE STATED IN THE CONTRACT, OR THE TARGET OR BILLING PRICE
IN THE CASE OF A CONTRACT WITH AN INCENTIVE CLAUSE, AND THAT THE AMOUNT
SO RECORDED SHALL BE INCREASED OR DECREASED TO REFLECT PRICE REVISIONS
AT THE TIME THAT SUCH REVISIONS ARE MADE OR DETERMINED PURSUANT TO
PROVISIONS OF THE CONTRACT. IT IS ASSUMED THAT NONE OF THESE CONTRACTS
WITH INCENTIVE CLAUSES WILL HAVE BOTH A TARGET PRICE AND A BILLING
PRICE. WHILE WE HAVE NO OBJECTION TO THE RECORDING OF OBLIGATIONS UPON
THAT BASIS, SUCH PRACTICE MIGHT WELL RESULT IN A VIOLATION OF SECTION
3679, REVISED STATUTES, AS AMENDED, 31 U.S.C. 665, UNLESS APPROPRIATE
SAFEGUARDS ARE PROVIDED EITHER IN THIS PROPOSED DIRECTIVE OR IN THE
ADMINISTRATIVE REGULATIONS ISSUED UNDER THE LATTER ACT WITH THE
CONCURRENCE OF THE DIRECTOR OF THE BUREAU OF THE BUDGET. SUCH
SAFEGUARDS NORMALLY WOULD CONSIST OF ADMINISTRATIVE RESERVATIONS OF
SUFFICIENT FUNDS TO COVER AT LEAST THE EXCESS OF THE ESTIMATED INCREASE
OVER THE DECREASES."
IN VIEW OF OUR 1955 DECISION, WE DO NOT HERE QUESTION THE DOD
PRACTICE OF RECORDING OBLIGATIONS ON A "TARGET PRICE" OR SIMILAR BASIS
IN ORDER TO COMPLY WITH SECTION 1311. HOWEVER, CONSISTENT WITH THE
CLEAR IMPLICATION IN THE ABOVE-QUOTED EXCERPT FROM OUR DECISION, WE DO
NOT BELIEVE THAT THE PROPER RECORDING OF OBLIGATIONS UNDER SECTION 1311
IS SUFFICIENT OF ITSELF TO FORECLOSE POSSIBLE VIOLATION OF 31 U.S.C.
SEC. 665(A) AND 41 U.S.C. SEC. 11. ACCORDINGLY, IT IS STILL NECESSARY
TO EXAMINE PROCUREMENT ACTIONS OF THE TYPE DESCRIBED ABOVE IN TERMS OF
THE LATTER STATUTES.
WE HAVE ON MANY OCCASIONS RECITED THE GENERALLY ACCEPTED PURPORT OF
31 U.S.C. SEC. 665(A) AND 41 U.S.C. SEC. 11. FOR EXAMPLE, WE STATED IN
PART, AT 42 COMP. GEN. 272, 275 (1962):
"THESE STATUTES EVIDENCE A PLAIN INTENT ON THE PART OF THE CONGRESS
TO PROHIBIT EXECUTIVE OFFICERS, UNLESS OTHERWISE AUTHORIZED BY LAW, FROM
MAKING CONTRACTS INVOLVING THE GOVERNMENT IN OBLIGATIONS FOR
EXPENDITURES OR LIABILITIES BEYOND THOSE CONTEMPLATED AND AUTHORIZED FOR
THE PERIOD OF AVAILABILITY OF AND WITHIN THE AMOUNT OF THE APPROPRIATION
UNDER WHICH THEY ARE MADE; TO KEEP ALL THE DEPARTMENTS OF THE
GOVERNMENT IN THE MATTER OF INCURRING OBLIGATIONS FOR EXPENDITURES,
WITHIN THE LIMITS AND PURPOSES OF APPROPRIATIONS ANNUALLY PROVIDED FOR
CONDUCTING THEIR LAWFUL FUNCTIONS, AND TO PROHIBIT ANY OFFICER OR
EMPLOYEE OF THE GOVERNMENT FROM INVOLVING THE GOVERNMENT IN ANY CONTRACT
OR OTHER OBLIGATION FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE
OF APPROPRIATIONS MADE FOR SUCH PURPOSE; ***
"IN 21 OP. ATTY. GEN. 244, 248, THE ATTORNEY GENERAL POINTED OUT THAT
THE OBJECT OF THESE STATUTES WAS TO PREVENT EXECUTIVE OFFICERS FROM
INVOLVING THE GOVERNMENT IN EXPENDITURES OR LIABILITIES BEYOND THOSE
CONTEMPLATED AND AUTHORIZED BY THE LAW-MAKING POWER. ***"
AS NOTED PREVIOUSLY, DOD OFFICIALS MAINTAIN (1) THAT THE RECORDING OF
SECTION 1311 OBLIGATIONS IN THE AMOUNT OF A TARGET OR SIMILAR PRICE,
WHERE APPLICABLE, WOULD BE THE ONLY TRANSACTION NOW RELEVANT WITH
RESPECT TO 31 U.S.C. SEC. 665(A) AND (2) THAT ANY POTENTIAL FOR FUTURE
DEFICITS SUBJECT TO THE STATUTORY PROHIBITION WOULD BE AVOIDED WHETHER
OR NOT ADDITIONAL FUNDS ARE PROVIDED. IN 42 COMP. GEN. 272, SUPRA, WE
CONSIDERED A POSITION SOMEWHAT SIMILAR TO DOD'S FIRST ARGUMENT,
INVOLVING IN THAT CASE A CONTRACT BY THE AIR FORCE DEPARTMENT TO PROCURE
SERVICES EXTENDING BEYOND THE ONE-YEAR APPROPRIATION UNDER WHICH THE
CONTRACT WAS MADE BUT PROVIDING FOR THE FURNISHING OF SERVICES ONLY AS
ORDERS WERE PLACED. WE STATED IN THAT CASE, ID. AT 277:
"THE DEPARTMENT JUSTIFIES THE CONTINUING LIABILITY TERMS OF THE
CONTRACT ON THE BASIS THAT SUCH LIABILITY DOES NOT RESULT IN
APPROPRIATION OBLIGATIONS WITHIN THE MEANING OF SECTION 1311 UNLESS AND
UNTIL ORDERS ARE ISSUED UNDER FUTURE AVAILABLE APPROPRIATIONS.
CONCEDING THAT THE INTEGRITY OF THE AVAILABLE APPROPRIATIONS WOULD BE
MAINTAINED, THERE IS TO BE CONSIDERED THE FACT THAT THE APPLICABLE
RESTRICTIONS OF THE REVISED STATUTES PROHIBIT CONTRACTUAL AGREEMENTS
UNDER FISCAL YEAR APPROPRIATIONS WHICH INVOLVE THE GOVERNMENT BEYOND
SUCH PERIOD OF AVAILABILITY NOT ONLY IN APPROPRIATION OBLIGATIONS, BUT
ANY OTHER OBLIGATION OR LIABILITY WHICH MAY ARISE THEREUNDER AND
ULTIMATELY REQUIRE THE EXPENDITURE OF FUNDS. ***"
THESE OBSERVATIONS SEEM APPLICABLE AS WELL TO FIXED PRICE INCENTIVE
OR SIMILAR PROCUREMENT ACTIONS UNDER THE INSTANT DOD PROPOSAL. HOWEVER,
EVEN ASSUMING ARGUENDO THAT SUCH PROCUREMENT ACTIONS MIGHT NOT INVOLVE
PRESENT TRANSACTIONS PROHIBITED BY 31 U.S.C. SEC. 665(A), THEY WOULD
APPEAR TO BE INCONSISTENT WITH 41 U.S.C. SEC. 11, WHICH BY ITS TERMS
PROHIBITS, INTER ALIA, THE MAKING OF A CONTRACT UNDER AN APPROPRIATION
WHICH IS NOT ADEQUATE TO ITS FULFILLMENT. WE PERCEIVE OF NO REASON WHY
CURRENT AGENCY COST ESTIMATES WOULD NOT CONSTITUTE AN APPROPRIATE
STANDARD FOR DETERMINING THE APPLICABILITY OF 41 U.S.C. SEC. 11.
FOR THE REASONS STATED, WE BELIEVE THAT THE INSTANT DOD PROPOSAL IS
TECHNICALLY SUBJECT TO LEGAL OBJECTION IF, AND TO THE EXTENT THAT,
PROCUREMENT ACTIONS INITIATED DURING FISCAL YEAR 1975 INVOLVE, BY
CURRENT ESTIMATES, COSTS EXCEEDING AMOUNTS PRESENTLY AVAILABLE THEREFOR.
WE AGAIN POINT OUT THAT OUR ANALYSIS OF THE DOD PROPOSAL IS LARGELY
CONCEPTUAL. THUS WE DO NOT KNOW WHETHER OR TO WHAT EXTENT PROCUREMENT
ACTIONS OF THE TYPE DESCRIBED WOULD ACTUALLY TAKE PLACE. ALSO, IT
SHOULD BE RECOGNIZED THAT THE LEGAL PROBLEM WHICH WE POINT OUT DOES NOT
IN ANY EVENT RELATE TO ACTUAL EXPENDITURES IN EXCESS OF APPROPRIATIONS,
SINCE WE UNDERSTAND THAT SUFFICIENT FUNDS ARE PRESENTLY AVAILABLE TO
COVER TERMINATION COSTS SHOULD TERMINATION OF THE CONTRACTS INVOLVED
BECOME NECESSARY AFTER CONGRESSIONAL ACTION ON THE APPROPRIATION
REQUEST. IN VIEW OF THESE CONSIDERATIONS, AND THE FACT THAT THE DOD
PROPOSAL HAS BEEN PRESENTED TO COGNIZANT CONGRESSIONAL COMMITTEES, OUR
OFFICE WOULD NOT TAKE EXCEPTION TO IMPLEMENTATION OF THE DEPARTMENT'S
PROPOSAL.
WE HOPE THAT THE FOREGOING ANALYSIS WILL BE OF ASSISTANCE IN YOUR
CONSIDERATION OF THE DOD PROPOSAL.
B-179931 L/M, DEC 18, 1973
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
R. W. CHRISTY, DISBURSING OFFICER, OFFICE OF THE COMPTROLLER OF THE
NAVY:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 3, 1973 (FILE
REFERENCE MPD/CRD:PH 1055), REQUESTING AN ADVANCE DECISION AS TO THE
ENTITLEMENT OF LIEUTENANT JOSEPH A. SOWERS, USN, 000-00-7406, TO
SEVERANCE PAY UNDER 10 U.S.C. 6382 INCIDENT TO HIS DISCHARGE FROM THE
NAVY ON OCTOBER 1, 1973. YOUR REQUEST WAS FORWARDED TO THIS OFFICE BY
SECOND ENDORSEMENT OF THE OFFICE OF THE COMPTROLLER OF THE NAVY DATED
OCTOBER 19, 1973 (FILE REFERENCE NCF-411 7220/MPAC), AND HAS BEEN
ASSIGNED SUBMISSION NUMBER DO-N-1207 BY THE DEPARTMENT OF DEFENSE
MILITARY PAY AND ALLOWANCE COMMITTEE.
BY BUREAU OF NAVAL PERSONNEL ORDER 024902, DATED FEBRUARY 7, 1973,
LIEUTENANT SOWERS WAS ADVISED THAT PURSUANT TO 10 U.S.C. 6382 HE WOULD
BE HONORABLY DISCHARGED FROM THE NAVY NOT LATER THAN JUNE 30, 1973,
APPARENTLY FOR HAVING FAILED OF SELECTION FOR PROMOTION TO LIEUTENANT
COMMANDER FOR THE SECOND TIME DURING FISCAL YEAR 1973.
HOWEVER, LIEUTENANT SOWERS WAS NOT DISCHARGED PURSUANT TO THE
FEBRUARY 7 ORDER, BUT WAS RETAINED ON ACTIVE DUTY IN ACCORDANCE WITH A
TEMPORARY RESTRAINING ORDER ISSUED JUNE 29, 1973, BY THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA IN THE CASE OF
INGRAM, ET AL. V. RICHARDSON, SECRETARY OF DEFENSE, ET AL., NO.
73-257-T, IN WHICH LIEUTENANT SOWERS WAS ONE OF THE PLAINTIFFS. THAT
ORDER PROVIDES IN PERTINENT PART THAT PENDING FURTHER ACTION BY THE
COURT THE DEFENDANTS ARE "ENJOINED FROM DISCHARGING PLAINTIFFS AND ALL
OTHERS SIMILARLY SITUATED, EXCEPT THOSE WHO DO NOT OBJECT TO BEING
DISCHARGED, UNDER THE PROVISIONS OF 10 U.S.C. SEC. 6382."
SUBSEQUENTLY, LIEUTENANT SOWERS APPARENTLY DECIDED THAT HE DID NOT
OBJECT TO BEING DISCHARGED, SINCE THE RECORD INDICATES THAT HE WAS
DELETED AS A PLAINTIFF IN THE INGRAM CASE. BY ENDORSEMENT TO THE
DISCHARGE ORDERS OF FEBRUARY 7, 1973, LIEUTENANT SOWERS WAS RELEASED
FROM ACTIVE DUTY ON OCTOBER 1, 1973, WITH HIS DISCHARGE EFFECTIVE JUNE
30, 1973. YOU REQUEST OUR DECISION AS TO LIEUTENANT SOWERS' ENTITLEMENT
TO SEVERANCE PAY UNDER U10 U.S.C. 6382 IN THESE CIRCUMSTANCES.
SUBSECTION (A) OF 10 U.S.C. 6382 PROVIDES IN PERTINENT PART THAT,
WITH AN EXCEPTION NOT MATERIAL HERE, EACH OFFICER ON THE ACTIVE LIST OF
THE NAVY OR MARINE CORPS SERVING IN THE GRADE OF LIEUTENANT OR CAPTAIN,
RESPECTIVELY, SHALL BE HONORABLY DISCHARGED ON JUNE 30 OF THE FISCAL
YEAR IN WHICH HE IS CONSIDERED AS HAVING FAILED OF SELECTION FOR
PROMOTION TO THE GRADE OF LIEUTENANT COMMANDER OR MAJOR FOR THE SECOND
TIME. HOWEVER, IF HE SO REQUESTS HE MAY BE HONORABLY DISCHARGED AT ANY
TIME DURING THAT FISCAL YEAR. SUBSECTION (C) OF 10 U.S.C. 6382 PROVIDES
IN PART THAT EACH OFFICER DISCHARGED "UNDER THIS SECTION" IS ENTITLED TO
A LUMP-SUM PAYMENT (SEVERANCE PAY).
THE INGRAM CASE IS A CLASS ACTION APPARENTLY SEEKING TO HAVE THE
PLAINTIFFS AND ALL OTHERS SIMILARLY SITUATED SUBJECT TO MANDATORY
DISCHARGE ON JUNE 30, 1973, UNDER 10 U.S.C. 6382 RETAINED ON ACTIVE
DUTY. IN THIS REGARD THE ASSISTANT UNITED STATES ATTORNEY ASSIGNED TO
THE CASE HAS INFORMALLY ADVISED US THAT THE ISSUES IN THE INGRAM CASE
ARE SIMILAR TO THOSE IN THE CASE OF BALLARD V. LAIRD, 360 F. SUPP 643
(1973), WHICH WAS DECIDED ADVERSELY TO THE GOVERNMENT BY A THREE-JUDGE
PANEL, ALSO IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF CALIFORNIA.
IN THE BALLARD CASE THE PLAINTIFF WAS A MALE NAVY LIEUTENANT WHO HAD
BEEN TWICE PASSED OVER FOR PROMOTION AND WAS SUBJECT TO MANDATORY
DISCHARGE ON JUNE 30, 1972, UNDER 10 U.S.C. 6382. THE PLAINTIFF
ATTACKED THE CONSTITUTIONALITY OF THAT STATUTE ON THE BASIS THAT 10
U.S.C. 6401, A MANDATORY DISCHARGE STATUTE APPLICABLE TO CERTAIN FEMALE
NAVY OFFICERS, GUARANTEES SUCH FEMALE OFFICERS AT LEAST 13 YEARS OF
ACTIVE DUTY PRIOR TO MANDATORY DISCHARGE WHEREAS, UNDER 10 U.S.C. 6382
MALE OFFICERS ARE GIVEN NO SUCH GUARANTEE. THUS, THE PLAINTIFF ALLEGED
THAT SECTION 6382 DISCRIMINATES AGAINST HIM BECAUSE OF HIS SEX.
THE COURT FOUND IN FAVOR OF THE PLAINTIFF IN THE BALLARD CASE,
HOLDING IN PART THAT THE EFFECT OF THE TENURE PROVISION OF 10 U.S.C.
6401 IN FAVOR OF FEMALE OFFICERS IS AN INVIDIOUS DISCRIMINATORY PRACTICE
AGAINST MALE OFFICERS WHO ARE MANDATORILY DISCHARGED UNDER SIMILAR
CONDITIONS BEFORE 13 YEARS OF COMMISSIONED SERVICE HAS ELAPSED.
FURTHER, THE COURT ALSO HELD THAT THE STATUTORY SCHEME WHICH EFFECTUATES
SUCH DISCRIMINATORY PRACTICE IS CONSTITUTIONALLY INVALID UNDER THE DUE
PROCESS CLAUSE INSOFAR AS THE SAME AUTHORIZES AND DIRECTS THE MANDATORY
DISCHARGE OF MALE OFFICERS PRIOR TO THE EXPIRATION OF 13 YEARS OF
COMMISSIONED SERVICE. IN CONCLUSION, THE COURT PERMANENTLY ENJOINED AND
RESTRAINED THE DEFENDANTS FROM MANDATORILY DISCHARGING THE PLAINTIFF
SOLELY BECAUSE OF PASSOVERS IN GRADE AS PROVIDED FOR IN 10 U.S.C. 6382
PRIOR TO THE EXPIRATION OF 13 YEARS OF COMMISSIONED SERVICE, ORDERED HIM
REINSTATED TO ALL BENEFITS, INCREMENTS AND PLACEMENT ON THE LIST FOR
PROMOTION AS HE WOULD HAVE BEEN ENTITLED TO UNDER LAW AS OF THE CLOSE OF
JUNE 29, 1972, AS THOUGH HE HAD NOT BEEN CONSIDERED SUBJECT TO DISCHARGE
SHORT OF 13 YEARS OF CONTINUOUS NAVY COMMISSIONED SERVICE.
WE HAVE BEEN INFORMALLY ADVISED THAT THE GOVERNMENT HAS FILED A
NOTICE OF INTENT TO APPEAL THE DECISION IN THE BALLARD CASE TO THE
SUPREME COURT, AND THAT THE DISTRICT COURT HAS NOT YET REACHED A
DECISION IN THE INGRAM CASE.
SINCE IT APPEARS THAT IN NEITHER THE BALLARD NOR THE INGRAM CASE IS
ENTITLEMENT TO SEVERANCE PAY AN ISSUE, THE COURTS' DECISIONS IN THOSE
CASES WOULD NOT APPEAR TO AFFECT LIEUTENANT SOWERS' RIGHT TO SEVERANCE
PAY PROVIDED HE IS OTHERWISE ENTITLED. WHILE LIEUTENANT SOWERS WAS
RETAINED ON ACTIVE DUTY BEYOND THE DATE UPON WHICH HE WAS TO HAVE BEEN
MANDATORILY DISCHARGED, HIS RETENTION WAS SOLELY AS A RESULT OF THE
PRELIMINARY RESTRAINING ORDER ISSUED IN THE INGRAM CASE. AFTER BEING
DELETED AS A PLAINTIFF IN THE INGRAM CASE, LIEUTENANT SOWERS' DISCHARGE
FROM THE NAVY, UNDER THE PROVISIONS OF 10 U.S.C. 6382, WAS ACCOMPLISHED
ON OCTOBER 1, 1973.
THEREFORE, IT IS OUR VIEW THAT LIEUTENANT SOWERS MAY BE CONSIDERED AS
HAVING BEEN DISCHARGED UNDER SUBSECTION 6382(A) OF TITLE 10, UNITED
STATES CODE, SO AS TO ENTITLE HIM TO THE LUMP-SUM PAYMENT (SEVERANCE
PAY) AUTHORIZED BY SUBSECTION 6382(C). ACCORDINGLY, PAYMENT IS
AUTHORIZED IN LIEUTENANT SOWERS' CASE, IF OTHERWISE CORRECT.
B-178198 L/M, AUG 30, 1973
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
UNITED STATES DEPARTMENT OF AGRICULTURE:
ATTENTION: MR. GEORGE D. BREITMEIER, REGIONAL FISCAL AGENT
THIS IS IN REPLY TO YOUR LETTERS OF MARCH 5 AND APRIL 10, 1973,
REQUESTING OUR ADVICE REGARDING THE PROPER DISPOSITION OF FUNDS DUE
UNDER CONTRACT NO. 01374 AWARDED SEPTEMBER 22, 1971, TO KENNETH I.
WALTERS FOR THINNING TIMBER IN THE MALHEUR NATIONAL FOREST (OREGON).
THE RECORD INDICATES THAT THE CONTRACTOR RENDERED PERFORMANCE FOR
SEVERAL MONTHS, DURING WHICH TIME HE RECEIVED PARTIAL PAYMENTS UNDER THE
CONTRACT SUBJECT TO TEN PERCENT RETENTION (TOTALING $381.65) TO INSURE
JOB COMPLETION. ON AUGUST 29, 1972, THE CONTRACT WAS TERMINATED FOR
DEFAULT, AND SUBSEQUENT REPROCUREMENT OF THE DEFAULTED WORK RESULTED IN
EXCESS COSTS TO THE GOVERNMENT OF $824.22. THE RECORD FURTHER INDICATES
THE EXISTENCE OF A VALID WAGE CLAIM, NOTICE OF WHICH WAS FIRST RECEIVED
BY YOUR DEPARTMENT ON AUGUST 24, 1972, IN THE AMOUNT OF $521.50. THERE
IS ALSO ON FILE AN ASSIGNMENT DATED SEPTEMBER 23, 1971, IN FAVOR OF THE
U. S. NATIONAL BANK OF OREGON OF ALL MONEYS DUE UNDER THE CONTRACT.
THE EXISTENCE OF THE ASSIGNMENT CANNOT OPERATE TO DEFEAT THE
GOVERNMENT'S RIGHT TO RECOVER ITS REPROCUREMENT COSTS. "IT IS WELL
ESTABLISHED THAT *** BY ASSIGNMENT THE ASSIGNEE COULD ACQUIRE NO GREATER
RIGHTS THAN ITS ASSIGNOR," AND THAT THE GOVERNMENT HAS THE RIGHT TO USE
RETAINED FUNDS TO COMPLETE A CONTRACT WHEN A CONTRACTOR DEFAULTS,
NOTWITHSTANDING THE CLAIMS OF A CONTRACTOR'S ASSIGNEE. THE NATIONAL
CITY BANK OF EVANSVILLE V. UNITED STATES, 143 CT. CL. 154, 163, 163 F.
SUPP. 846 (1958); B-165016, FEBRUARY 24, 1969. FURTHERMORE, IT HAS
BEEN RECOGNIZED THAT UNPAID LABORERS HAVE AN EQUITABLE RIGHT TO BE PAID
FROM CONTRACT RETAINAGES, PEARLMAN V. RELIANCE INSURANCE COMPANY, 371 U.
S. 132 (1962); HADDEN V. UNITED STATES, 132 CT. CL. 529 (1955);
COMPARE 35 COMP. GEN. 104 (1955), AND WE NOTE THAT THE CONTRACT IN THIS
CASE CONTAINED PROVISIONS ALLOWING THE GOVERNMENT TO WITHHOLD FUNDS
PURSUANT TO THE CONTRACT WORK HOURS STANDARDS ACT AND THE SERVICE
CONTRACT ACT OF 1965 TO SATISFY UNPAID WAGE CLAIMS.
HERE, THE RECORD SHOWS THAT FUNDS WERE RETAINED TO INSURE COMPLETION
OF THE WORK UNDER THE CONTRACT. HOWEVER, IN B-161460, MAY 25, 1967,
COPY ENCLOSED, WE RECOGNIZED THAT A CONTRACTING AGENCY MAY APPLY SUCH
FUNDS TO SATISFY WAGE CLAIMS UNDER THE SERVICE CONTRACT ACT BEFORE IT
SATISFIES ITS OWN CLAIM FOR EXCESS REPROCUREMENT COSTS. SEE B-175222,
APRIL 4, 1973. ACCORDINGLY, THE RETAINAGE MAY BE APPLIED TO THE WAGE
CLAIM IN ACCORDANCE WITH B-161460, SUPRA.
B-175966 L/M, SEP 8, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
LIEUTENANT D. L. DREHER, SC, USN:
WE AGAIN REFER TO YOUR LETTER OF APRIL 21, 1972, FILE REFERENCE
FMP:DLD:DM 7220/67, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS
TO THE LEGALITY OF CREDITING THE PAY ACCOUNT OF LIEUTENANT SANDRA BINEK
DOPPELHEUER, MSC, USN, 000-00-1864, WITH BASIC ALLOWANCE FOR QUARTERS ON
ACCOUNT OF A DEPENDENT HUSBAND WHO IS A FULL-TIME STUDENT. YOUR LETTER
WAS FORWARDED HERE BY SECOND ENDORSEMENT DATED MAY 10, 1972, BY THE
DIRECTOR, NAVY MILITARY PAY SYSTEM, AND HAS BEEN ASSIGNED SUBMISSION NO.
DO-N-1157 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE
COMMITTEE.
LIEUTENANT DOPPELHEUER SAYS IN HER LETTER DATED FEBRUARY 17, 1972,
THAT ON JANUARY 4, 1972, SHE APPEARED AT THE DISBURSING OFFICE, NATIONAL
NAVAL MEDICAL CENTER, BETHESDA, MARYLAND, TO PROCESS NAVCOMPT FORM 2040
"DEPENDENCY CERTIFICATE" FOR INCREASED BASIC ALLOWANCE FOR QUARTERS ON
ACCOUNT OF HER HUSBAND, JOHN DAVID DOPPELHEUER, WHOM SHE MARRIED ON
AUGUST 23, 1969. SHE WAS THEN INFORMED THAT SHE WAS NOT ELIGIBLE FOR
THE INCREASED ALLOWANCE SINCE HER HUSBAND IS A FULL-TIME STUDENT AND,
THEREFORE, NOTWITHSTANDING THE FACT THAT SHE DOES CONTRIBUTE MORE THAN
ONE-HALF OF HIS SUPPORT, HE CANNOT BE CONSIDERED AS HER DEPENDENT.
ALSO, IN HER LETTER LIEUTENANT DOPPELHEUER ASSERTS THAT IF SHE WERE A
MALE OFFICER "SUCH CONDITIONS WOULD NOT HAVE TO BE MET" AND THAT SHE
AUTOMATICALLY WOULD RECEIVE THE INCREASED ALLOWANCE AS A MARRIED
OFFICER.
LIEUTENANT DOPPELHEUER FURTHER STATES THAT IT WAS EXPLAINED TO HER
THAT THE DENIAL OF THE INCREASED ALLOWANCE WAS BASED ON PARAGRAPH 30242
OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS
MANUAL, WHICH IN PERTINENT PART WAS QUOTED IN HER LETTER AND READS AS
FOLLOWS:
"A FEMALE MEMBER WHO VOLUNTARILY ASSUMES SUPPORT OF HUSBAND TO PERMIT
HIM TO ATTEND COLLEGE, ALTHOUGH HE IS PHYSICALLY AND MENTALLY CAPABLE OF
SELF-SUPPORT, IS NOT CONSIDERED TO HAVE A HUSBAND WHO IS IN FACT
DEPENDENT ON HER FOR OVER ONE-HALF OF HIS SUPPORT."
SHE SAYS THAT THE ABOVE-QUOTED PROVISION APPEARS TO BE BASED ON 2
COMP. GEN. 175 (1922) AND SUBSEQUENT CASES DECIDED THEREUNDER. IN
SUGGESTING THE ABROGATION OF THAT PROVISION, SHE POINTS OUT THAT THE
GOVERNING STATUTES WHICH REQUIRE THE MORE THAN ONE-HALF SUPPORT SHOWING
IN THE CASE OF FEMALE MEMBERS ARE SILENT REGARDING AN EXCEPTION FOR
HUSBANDS WHO ARE STUDENTS. IN THIS CONNECTION, SHE EXPRESSES A BELIEF
THAT WE HAVE THE POWER TO CHANGE THAT PROVISION.
IN AN ACCOMPANYING ENDORSEMENT DATED MARCH 13, 1972, TO LIEUTENANT
DOPPELHEUER'S LETTER THE CHIEF, BUREAU OF MEDICINE AND SURGERY, HAS
EXPRESSED THE OPINION THAT THE GOVERNING PROVISIONS OF LAW MAY HAVE BEEN
OVERRULED BY THE CIVIL RIGHTS ACT OF 1964, APPROVED JULY 2, 1964, 78
STAT. 255, AS AMENDED, AND IN AN ENDORSEMENT DATED APRIL 13, 1972, THE
CHIEF OF NAVAL PERSONNEL, AFTER REFERRING TO THAT ACT AND THE EQUAL
EMPLOYMENT OPPORTUNITY ACT OF 1972, APPROVED MARCH 24, 1972, 86 STAT.
103, AND INDICATING THEIR PURPOSE AND INTENT, HAS REQUESTED THAT WE
RECONSIDER OUR DECISION REQUIRING A DEPENDENCY TEST OF PHYSICAL OR
MENTAL INCAPACITATION FOR SPOUSES OF FEMALE MEMBERS.
SECTION 403 OF TITLE 37, U.S. CODE, PROVIDES FOR PAYMENT OF A BASIC
ALLOWANCE FOR QUARTERS TO A MEMBER OF A UNIFORMED SERVICE - THE RATE
BEING GREATER FOR A MEMBER WITH DEPENDENTS. FOR THE PURPOSES OF
QUALIFICATION FOR THIS ALLOWANCE, THE TERM "DEPENDENT" IS DEFINED IN 37
U.S.C. 401 AS INCLUDING THE SPOUSE OF SUCH MEMBER SUBJECT TO THE FURTHER
CONDITION THAT "A PERSON IS NOT A DEPENDENT OF A FEMALE MEMBER UNLESS HE
IS IN FACT DEPENDENT ON HER FOR OVER ONE-HALF OF HIS SUPPORT."
IN OUR DECISION OF FEBRUARY 16, 1953, 32 COMP. GEN. 364, WE
INTERPRETED AND APPLIED IN THE CASE THERE INVOLVED SECTION 102(G) OF THE
CAREER COMPENSATION ACT OF 1949, CH. 681, APPROVED OCTOBER 12, 1949, 63
STAT. 804, 37 U.S.C. 231(G) (1958 ED.), A PROVISION OF LAW WHICH IS
SUBSTANTIALLY SIMILAR TO 37 U.S.C. 401. WE HELD IN THAT DECISION THAT A
FEMALE OFFICER OF THE UNIFORMED SERVICES WHO VOLUNTARILY ASSUMED THE
SUPPORT OF HER HUSBAND IN ORDER TO PERMIT HIM TO ATTEND COLLEGE,
ALTHOUGH HE WAS PHYSICALLY AND MENTALLY CAPABLE OF SELF-SUPPORT, DID NOT
HAVE A HUSBAND WHO WAS "IN FACT DEPENDENT" UPON HER FOR OVER HALF OF HIS
SUPPORT WITHIN THE MEANING AND INTENT OF THE GOVERNING LAW SO AS TO
ENTITLE HER TO INCREASED BASIC QUARTERS ALLOWANCE.
WE HAVE REEXAMINED OUR DECISIONS CONCERNING THE ENTITLEMENT OF FEMALE
MEMBERS TO THE BASIC ALLOWANCE FOR QUARTERS ON ACCOUNT OF A DEPENDENT
HUSBAND. BY DECISION OF JULY 3, 1972, B-161261, 52 COMP. GEN. ___, TO
THE SECRETARY OF DEFENSE (COPY ENCLOSED) WE RECONSIDERED OUR DECISION IN
32 COMP. GEN. 364, SUPRA, AND CONCLUDED THAT EFFECTIVE THAT DATE A
FEMALE MEMBER OF THE UNIFORMED SERVICES MAY BE CONSIDERED AS HAVING A
DEPENDENT HUSBAND WITHIN THE MEANING OF THE GOVERNING STATUTE, 37 U.S.C.
401, WHERE THERE IS SUFFICIENT EVIDENCE TO ESTABLISH HIS DEPENDENCE ON
HER FOR OVER ONE-HALF OF HIS SUPPORT WITHOUT REGARD TO THE HUSBAND'S
MENTAL OR PHYSICAL CAPABILITY TO SUPPORT HIMSELF.
HOWEVER, CONCERNING THE RECOGNITION OF A FEMALE MEMBER ON THE SAME
BASIS AS A MALE MEMBER INSOFAR AS THE ALLOWANCE IS CONCERNED, WE SAID IN
THAT DECISION THAT UNLESS AND UNTIL LEGISLATION SIMILAR TO THE BILLS
CITED IN THE DECISION IS ENACTED INTO LAW WE ARE OF THE OPINION THAT
THERE IS NO AUTHORITY IN THE LAW TO AUTHORIZE TO A FEMALE MEMBER
INCREASED QUARTERS ALLOWANCE ON ACCOUNT OF A DEPENDENT HUSBAND UNLESS IT
IS ESTABLISHED THAT HE IS DEPENDENT UPON HER FOR OVER ONE-HALF OF HIS
SUPPORT AS SPECIFICALLY REQUIRED BY THE PRESENT LAW.
PURSUANT TO THE ABOVE DECISION OF JULY 3, 1972, IT APPEARS THAT
LIEUTENANT DOPPELHEUER MAY BE ENTITLED TO THE INCREASED BASIC ALLOWANCE
FOR QUARTERS ON ACCOUNT OF A DEPENDENT HUSBAND COMMENCING JULY 3, 1972,
UPON A SUFFICIENT SHOWING THAT HER HUSBAND IS IN FACT DEPENDENT UPON HER
FOR MORE THAN ONE-HALF OF HIS SUPPORT. HOWEVER, OUR DECISION OF JULY 3,
1972, PROVIDES NO AUTHORITY FOR CREDITING HER ACCOUNT WITH THE INCREASED
ALLOWANCE FOR THE PERIOD PRIOR TO THE DATE OF THE DECISION.
THE PAPERS WHICH ACCOMPANIED YOUR LETTER OF APRIL 21, 1972, ARE
RETURNED FOR APPROPRIATE ACTION AS INDICATED ABOVE.
B-171947 L/M, SEP 7, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
SECRETARY OF THE AIR FORCE:
REFERENCE IS MADE TO DECISION B-149951, NOVEMBER 23, 1962, COPY
HEREWITH, CONCERNING THE CHARGING OF MILITARY LEAVE TO CERTAIN CIVILIAN
EMPLOYEES OF THE DEPARTMENT OF THE AIR FORCE.
ON MAY 5, 1972, WE RECEIVED AN INQUIRY FROM THE NATIONAL ASSOCIATION
OF GOVERNMENT EMPLOYEES PERTAINING TO CIVILIAN TECHNICIANS IN THE 904TH
MILITARY AIRLIFT GROUP (AFRES) AT HAMILTON AIR FORCE BASE, CALIFORNIA.
WE UNDERSTAND THAT AFRES HAS BEEN REPLACED BY HEADQUARTERS 452D TACTICAL
AIRLIFT WING.
THE LETTER OF MAY 5 STATED THAT THE TECHNICIANS WERE ORDERED TO
MILITARY DUTY DURING JULY 1971, AND THAT THREE SETS OF ORDERS WERE CUT
IN ORDER TO AVOID ESTABLISHING AN ACTIVE MILITARY DUTY STATUS ON THE
WEEKENDS. THE PERIODS OF ORDERED DUTY APPARENTLY COVERED 15 DAYS OF
ACTUAL DUTY, NAMELY, JULY 12-16, 1971; JULY 19-23, 1971; AND JULY
26-30, 1971.
APPARENTLY AFTER THE DUTY WAS PERFORMED AFRES INTERPRETED AFR-60-602
AND FEDERAL PERSONNEL MANUAL 630-21 TO REQUIRE THAT THE PERIOD OF
MILITARY DUTY AUTHORIZED MUST BE REGARDED AS CONTINUOUS. THUS THE
NONDUTY SATURDAYS AND SUNDAYS - JULY 17, 18, 24, 25, 1971 - WERE CHARGED
TO MILITARY LEAVE AND THE EMPLOYEES EITHER HAD TO REQUEST ANNUAL LEAVE
FOR THE 4 DAYS, JULY 27 TO 30, 1971, OR BE PLACED IN A LEAVE-WITHOUT-PAY
STATUS FOR SUCH TIME.
IN RESPONSE TO OUR REQUEST FOR THE VIEWS OF THE COMMANDING OFFICER,
AFRES, IN THE LIGHT OF B-149951, THE CHIEF, CLASSIFICATION AND
COMPENSATION POLICY BRANCH OF THE DIRECTORATE OF PERSONNEL, HEADQUARTERS
UNITED STATES AIR FORCE BY LETTER OF AUGUST 1, 1972, AFFIRMED THE ACTION
AS TAKEN BY AFRES. THE LETTER OF AUGUST 1 STATES THE AGENCY POSITION TO
BE THAT THE ISSUANCE OF THREE SEPARATE SETS OF ORDERS, OF 5 DAYS EACH,
TO COVER ONE CONSECUTIVE PERIOD MILITARY TRAINING DOES NOT OBVIATE THE
REQUIREMENT TO CHARGE EMPLOYEES ANNUAL LEAVE OR LEAVE WITHOUT PAY FOR
THEIR ABSENCE FROM CIVILIAN EMPLOYMENT FOR TIME IN EXCESS OF 15 CALENDAR
DAYS. THE LETTER CITES AFR 40-602 AND B-133674, DECEMBER 30, 1957, IN
SUPPORT OF THE VIEW TAKEN.
5 U.S.C. 6323(A) PROVIDES:
"SEC. 6323. MILITARY LEAVE; RESERVES AND NATIONAL GUARDSMEN
"(A) AN EMPLOYEE AS DEFINED BY SECTION 2105 OF THIS TITLE OR AN
INDIVIDUAL EMPLOYED BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA,
PERMANENT OR TEMPORARY INDEFINITE, IS ENTITLED TO LEAVE WITHOUT LOSS IN
PAY, TIME, OR PERFORMANCE OR EFFICIENCY RATING FOR EACH DAY, NOT IN
EXCESS OF 15 DAYS IN A CALENDAR YEAR, IN WHICH HE IS ON ACTIVE DUTY OR
IS ENGAGED IN FIELD OR COAST DEFENSE TRAINING UNDER SECTIONS 502-505 OF
TITLE 32 AS A RESERVE OF THE ARMED FORCES OR MEMBER OF THE NATIONAL
GUARD."
PARAGRAPH 25E OF AFR 40-602 READS:
"E. HOW MILITARY LEAVE IS CHARGED. MILITARY LEAVE IS CHARGED ON A
CALENDAR-DAY BASIS. NO CHARGE IS MADE FOR NONWORKDAYS AT THE BEGINNING
AND END OF A PERIOD OF ABSENCE ON ACTIVE MILITARY DUTY. HOWEVER, ALL
INTERVENING NONWORKDAYS FALLING WITHIN THE PERIOD OF MILITARY DUTY MUST
BE CHARGED TO MILITARY LEAVE. AN EMPLOYEE CANNOT BE GRANTED MORE THAN
15 CALENDAR DAYS OF MILITARY LEAVE FOR ANY 1 PERIOD OF ACTIVE DUTY
ALTHOUGH THE TOUR EXTENDS INTO ANOTHER CALENDAR YEAR. HOWEVER, WHEN AN
EMPLOYEE IS ORDERED TO ACTIVE DUTY A SECOND TIME IN THE SAME CALENDAR
YEAR, HE ACQUIRES ENTITLEMENT TO ANOTHER PERIOD OF MILITARY LEAVE IF HE
IS STILL ON ACTIVE DUTY ON 1 JANUARY OF THE FOLLOWING YEAR. FOR
EXAMPLE, IF A RESERVIST WHO WAS ORDERED TO ACTIVE DUTY IN DECEMBER WAS
GRANTED ONLY 3 DAYS OF MILITARY LEAVE AT THAT TIME (12 DAYS HAVING BEEN
USED DURING A PREVIOUS TOUR OF DUTY IN THAT YEAR), HE WOULD BE ELIGIBLE
FOR 12 CALENDAR DAYS OF MILITARY LEAVE BEGINNING ON 1 JANUARY TO
COMPLETE THE 15 CALENDAR DAYS OF MILITARY LEAVE FOR THAT PERIOD OF
ACTIVE DUTY."
THE FACTUAL SITUATION IN B-149951 IS IDENTICAL TO THAT INVOLVED IN
THE CASE AT HAMILTON AIR FORCE BASE. ACCORDINGLY, THE HOLDING IN THAT
DECISION TO THE EFFECT THAT MILITARY LEAVE IS NOT CHARGEABLE FOR DAYS IN
WHICH THE EMPLOYEE IS NOT IN A MILITARY DUTY STATUS IS FOR APPLICATION.
UNDER THE CONDITIONS STATED NONE OF THE EMPLOYEES HERE INVOLVED SHOULD
BE CHARGED MILITARY LEAVE FOR THE INTERVENING WEEKENDS. THE FACTUAL
SITUATION IN B-133674 RELIED UPON BY THE AGENCY IS DISTINGUISHABLE.
THERE THE INTERVENING NONWORKDAYS FROM THE CIVILIAN POSITION WERE DAYS
OF ACTIVE MILITARY DUTY AND AS SUCH WERE CHARGEABLE AGAINST THE 15 DAYS
PROVIDED BY THE STATUTE.
SINCE THREE SETS OF ORDERS ACTUALLY WERE ISSUED UNDER WHICH THE
INDIVIDUALS WERE NOT ON MILITARY DUTY ON THE WEEKENDS ANY SUBSEQUENT
ACTION TO CHARGE MILITARY LEAVE FOR THE INTERVENING WEEKENDS WOULD IN
EFFECT CONSTITUTE AN UNAUTHORIZED MODIFICATION OF SUCH ORDERS.
ACCORDINGLY, THE ANNUAL LEAVE CHARGED TO THE EMPLOYEES IN THE MANNER
PREVIOUSLY INDICATED SHOULD BE RESTORED IF NOT IN EXCESS OF THE MAXIMUM
ACCUMULATION PERMITTED BY LAW. ALSO, THOSE EMPLOYEES CHARGED LEAVE
WITHOUT PAY SHOULD NOW BE PAID FOR THE PERIODS COVERED THEREBY. OF
COURSE ANY MILITARY PAY ALLOWED FOR THE INTERVENING WEEKENDS WOULD BE
FOR COLLECTION. WHETHER OR NOT IT IS DESIRABLE TO ISSUE THREE SETS OF
ORDERS TO AVOID THE CHARGING OF MILITARY LEAVE ON WEEKENDS IS A POLICY
MATTER FOR DETERMINATION BY YOUR AGENCY.
A COPY OF THIS LETTER IS BEING FORWARDED TO THE NATIONAL ASSOCIATION
OF GOVERNMENT EMPLOYEES.
B-176604 L/M, AUG 28, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
VANCE HARTKE, CHAIRMAN, COMMITTEE ON VETERANS' AFFAIRS; UNITED
STATES SENATE:
WE AGAIN REFER TO YOUR LETTER DATED JULY 20, 1972, FORWARDING COPIES
OF H.R. 14742 AND AMENDMENT NO. 1224 AND PRESENTING FOR OUR
CONSIDERATION THE QUESTION WHETHER THE PROVISIONS OF 37 U.S.C. 701(D)
MAY BE CONSIDERED BROAD ENOUGH TO INCLUDE AN ALLOTMENT FROM THE
COMPENSATION OF A MEMBER OF THE AIR NATIONAL GUARD OR ARMY NATIONAL
GUARD, WHO IS NOT ENTITLED TO BASIC PAY UNDER 37 U.S.C. 204, FOR THE
PAYMENT OF PREMIUMS UNDER A GROUP LIFE INSURANCE PROGRAM SPONSORED BY A
STATE OR BY THE NATIONAL GUARD ASSOCIATION OF SUCH STATE.
YOU SAY THAT H.R. 14742, WHICH PASSED THE HOUSE OF REPRESENTATIVES ON
MAY 15, 1972, AND WHICH WOULD AMEND TITLE 38, U.S. CODE, TO ENCOURAGE
PERSONS TO JOIN AND REMAIN IN THE RESERVES AND NATIONAL GUARD BY
PROVIDING FULL-TIME COVERAGE UNDER SERVICEMEN'S GROUP LIFE INSURANCE FOR
SUCH MEMBERS AND CERTAIN MEMBERS OF THE RETIRED RESERVE UP TO AGE SIXTY,
IS NOW BEING CONSIDERED BY YOUR COMMITTEE. YOU ALSO SAY THAT ON JUNE
13, 1972, SENATOR JAMES B. ALLEN INTRODUCED AN AMENDMENT TO THAT BILL
WHICH WOULD AUTHORIZE THE SECRETARY OF THE ARMY AND THE SECRETARY OF THE
AIR FORCE, AS THE CASE MAY BE, TO ALLOW A MEMBER OF THE NATIONAL GUARD
WHO IS NOT ON ACTIVE DUTY TO MAKE ALLOTMENTS FROM HIS PAY UNDER SECTIONS
204 AND 206 OF TITLE 37, U.S. CODE, FOR THE PAYMENT OF PREMIUMS UNDER A
GROUP LIFE INSURANCE PROGRAM SPONSORED BY THE MILITARY DEPARTMENT OF THE
STATE IN WHICH SUCH MEMBER HOLDS HIS NATIONAL GUARD MEMBERSHIP OR BY THE
NATIONAL GUARD ASSOCIATION OF SUCH STATE.
YOU INDICATE THAT THE DEPARTMENT OF DEFENSE, WHEN REPORTING ON THE
AMENDMENT, STATED THAT CURRENT REGULATIONS DO NOT PERMIT ALLOTMENTS OF
PAY BY MEMBERS OF THE NATIONAL GUARD WHO ARE NOT ON EXTENDED ACTIVE
DUTY, BUT YOU SAY THAT THERE IS DOUBT AS TO WHETHER EXISTING LAW IS NOT
BROAD ENOUGH TO PERMIT THE REGULATIONS TO BE CHANGED SO AS TO PERMIT
SUCH ALLOTMENTS. IN THIS CONNECTION, YOU CITE 37 U.S.C. 701(D), THE
PROVISION OF LAW ON WHICH THE REGULATIONS ARE BASED, AND REFER TO 37
U.S.C. 206 WHICH AUTHORIZES COMPENSATION, UNDER REGULATIONS PRESCRIBED
BY THE SECRETARY CONCERNED, TO MEMBERS OF THE NATIONAL GUARD AND RESERVE
MEMBERS WHO ARE NOT ENTITLED TO BASIC PAY UNDER SECTION 204 OF THAT
TITLE. ALSO, YOU POINT OUT THAT 37 U.S.C. 701(D) REFERS TO ALLOTMENTS
OF 'PAY' WHEREAS 37 U.S.C. 206 REFERS TO 'COMPENSATION.'
SECTION 701(D) OF TITLE 37, U.S. CODE, VESTS IN THE SECRETARY OF THE
ARMY AND THE SECRETARY OF THE AIR FORCE THE AUTHORITY TO ALLOW A MEMBER
OF THE ARMY OR THE AIR FORCE, AS THE CASE MAY BE, "TO MAKE ALLOTMENTS
FROM HIS PAY FOR THE SUPPORT OF HIS RELATIVES, OR FOR ANY OTHER PURPOSE
THAT THE SECRETARY CONCERNED CONSIDERS PROPER." THAT LAW IS DERIVED FROM
SECTION 16 OF THE ACT OF MARCH 2, 1899, CH. 352, 30 STAT. 981, AS
AMENDED BY THE ACT OF MAY 16, 1938, CH. 219, 52 STAT. 354, WHICH READ AS
FOLLOWS:
"THE SECRETARY OF WAR IS AUTHORIZED TO PERMIT OFFICERS, MEMBERS OF
THE ARMY NURSE CORPS, CONTRACT SURGEONS, AND ENLISTED MEN OF THE ARMY,
ACTIVE OR RETIRED, AND ALSO PERMANENT CIVILIAN EMPLOYEES ON DUTY IN
ALASKA OR OUTSIDE OF THE CONTINENTAL LIMITS OF THE UNITED STATES, TO
MAKE ALLOTMENTS FROM THEIR PAY, UNDER SUCH REGULATIONS AS HE MAY
PRESCRIBE, FOR THE SUPPORT OF THEIR FAMILIES OR RELATIVES OR FOR OTHER
PROPER PURPOSES WHICH IN HIS DISCRETION WARRANT SUCH ACTION. ***"
IMPLEMENTING REGULATIONS PROMULGATED BY THE DEPARTMENT OF THE AIR
FORCE AND THE DEPARTMENT OF THE ARMY ON THE BASIS OF THAT LAW PERMITTED
ALLOTMENTS ONLY FROM THE PAY OF ACTIVE OR RETIRED MEMBERS IN VIEW OF THE
WORDING OF THE STATUTE.
BY THE ACT OF AUGUST 10, 1956, CH. 1041, 70A STAT. 213, THE ABOVE
PROVISION OF LAW WAS REVISED AND CODIFIED AS 10 U.S.C. 3689(D) (1958
ED.) AND READ IN MATERIAL PART, AS FOLLOWS:
"THE SECRETARY MAY ALLOW ANY -
"(1) MEMBER OF THE ARMY;
"(2) CONTRACT SURGEON; OR
"(3) PERMANENT CIVILIAN EMPLOYEE OF THE DEPARTMENT OF THE ARMY ON
DUTY OUTSIDE THE UNITED STATES;
"TO MAKE ALLOTMENTS FROM HIS PAY FOR THE SUPPORT OF ANY OF HIS
RELATIVES, OR FOR ANY OTHER PURPOSE THAT THE SECRETARY CONSIDERS PROPER.
***"
A SIMILAR PROVISION OF LAW COVERING MEMBERS OF THE AIR FORCE WAS
CONTAINED IN 10 U.S.C. 8689(D) (1958 ED.).
IN THE LEGISLATIVE HISTORY OF THAT ACT IT IS SHOWN THAT THE WORDS
"ACTIVE OR RETIRED" WHICH APPEARED IN THE PREDECESSOR LAW WERE OMITTED
AS SURPLUSAGE SINCE "RETIRED MEMBERS CONTINUE TO BE MEMBERS OF THE
ARMY." INASMUCH AS THE DEPARTMENT OF THE ARMY AND THE DEPARTMENT OF THE
AIR FORCE EQUATED THE WORD "PAY" WITH ACTIVE DUTY PAY NO CHANGE WAS MADE
IN THEIR REGULATIONS PROVIDING FOR ALLOTMENTS ONLY FROM A MEMBER'S
ACTIVE DUTY OR RETIRED PAY.
BY THE ACT OF SEPTEMBER 7, 1962, 76 STAT. 484, SECTIONS 3689(D) AND
8689(D) OF TITLE 10, U.S. CODE, WERE RECODIFIED WITH SLIGHT CHANGE AS 37
U.S.C. 701(D). IMPLEMENTING REGULATIONS WHICH COVER BOTH ARMY AND AIR
FORCE MEMBERS ARE CONTAINED IN THE DEPARTMENT OF DEFENSE MILITARY PAY
AND ALLOWANCES ENTITLEMENTS MANUAL. PARAGRAPH 60104 THEREOF SPECIFIES
THAT MEMBERS ON EXTENDED ACTIVE DUTY WHO MAY MAKE ALLOTMENTS OF PAY
INCLUDE COMMISSIONED AND WARRANT OFFICERS, AVIATION CADETS, AND ENLISTED
MEMBERS (INCLUDING MEMBERS OF THE INSULAR FORCE) AND PARAGRAPH 80205
SPECIFIES THAT A MEMBER OF A RESERVE COMPONENT NOT ON EXTENDED ACTIVE
DUTY MAY NOT HAVE HIS PAY ALLOTTED.
THE QUESTION OF THE PROPRIETY OF THE ESTABLISHMENT OF ALLOTMENTS FROM
THE FEDERAL ARMORY DRILL PAY OF MEMBERS OF A LOUISIANA NATIONAL GUARD
UNIT FOR A "SALARY SAVINGS PLAN" WHICH WOULD HAVE FACILITATED THE
PROCUREMENT OF LIFE INSURANCE PROTECTION FOR THEIR FAMILIES WAS
CONSIDERED BY US AT A TIME WHEN THE ABOVE-MENTIONED 1899 LAW, AS
AMENDED, WAS IN EFFECT. IN OUR LETTER DATED NOVEMBER 14, 1947, TO THE
LATE SENATOR ALLEN J. ELLENDER (COPY ENCLOSED) WE SAID THAT THERE WOULD
APPEAR TO BE NO AUTHORITY OF LAW FOR THE MEMBERS OF THE INVOLVED
NATIONAL GUARD UNIT TO MAKE ALLOTMENTS OF THEIR ARMORY DRILL PAY AS
PROPOSED. WE STATED THAT THE LAW WHICH PERMITTED ALLOTMENTS OF PAY DID
NOT EXTEND TO MEMBERS OF THE NATIONAL GUARD WHO ARE NOT ON ACTIVE DUTY
IN THE ARMY. AND, WE SAID THAT IN VIEW OF SECTION 3477, REVISED
STATUTES, 31 U.S.C. 203, RESTRICTING THE ASSIGNMENT OF CLAIMS AGAINST
THE UNITED STATES, AN ALLOTMENT OF PAY IS NOT AUTHORIZED IN THE ABSENCE
OF SPECIFIC STATUTORY AUTHORITY THEREFOR.
IT IS OUR VIEW THAT THE RATIONALIZATION IN THE ABOVE LETTER OF
NOVEMBER 14, 1947, IS FOR CURRENT APPLICATION NOTWITHSTANDING THE FACT
THAT THE 1956 LAW, WHICH REVISED AND CODIFIED THE 1899 LAW, AS AMENDED,
OMITTED THE WORD "ACTIVE" FROM THE NEW PROVISION OF LAW AS IT RELATES TO
A MEMBER'S DUTY STATUS. THE LEGISLATIVE HISTORY OF THE 1956 LAW
CONTAINS NO MANIFESTATION BY THE CONGRESS THAT THE OMISSION OF THAT WORD
WAS INTENDED FOR THE PURPOSE OF PERMITTING ALLOTMENTS FROM THE INACTIVE
DUTY PAY OF AIR NATIONAL GUARD OR ARMY NATIONAL GUARD MEMBERS AND
SECTION 49(A) OF THE 1956 ACT SPECIFICALLY STATED THAT IT WAS THE
LEGISLATIVE PURPOSE TO RESTATE, WITHOUT SUBSTANTIVE CHANGE, THE LAW
REPLACED BY THAT ACT, WITH CERTAIN EXCEPTIONS NOT HERE PERTINENT.
THEREFORE, IN ANSWER TO YOUR QUESTION, YOU ARE ADVISED THAT WE DO NOT
CONSIDER 37 U.S.C. 701(D) AS PROVIDING A LEGAL BASIS FOR THE
PROMULGATION OF REGULATIONS PERMITTING ALLOTMENTS FROM THE COMPENSATION
OF A MEMBER OF THE AIR NATIONAL GUARD OR ARMY NATIONAL GUARD FOR
INACTIVE DUTY TRAINING UNDER 37 U.S.C. 206.
B-173895 L/M, JUL 12, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
LIEUTENANT COLONEL RONALD R. MCGEE, FC, USA, DEPARTMENT OF THE ARMY:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 6, 1971, WITH
ENCLOSURES, FORWARDED HERE BY LETTER OF MARCH 3, 1972 (DACA-FIS-PP) FROM
THE OFFICE OF THE COMPTROLLER OF THE ARMY (DEPARTMENT OF DEFENSE
MILITARY PAY AND ALLOWANCE COMMITTEE NUMBER DO-A-1146), IN WHICH YOU
REQUEST AN ADVANCE DECISION REGARDING THE ENTITLEMENT OF STAFF SERGEANT
JAMES GREENE, 000-00-8899, TO BASIC ALLOWANCE FOR QUARTERS (BAQ), WITH
DEPENDENTS.
BY ORDERS OF DECEMBER 28, 1967, THE MEMBER'S PERMANENT ASSIGNMENT WAS
CHANGED FROM FORT EUSTIS, VIRGINIA TO THE REPUBLIC OF VIETNAM EFFECTIVE
IN FEBRUARY 1968. AFTER HIS ARRIVAL OVERSEAS SERGEANT GREENE REPORTEDLY
RECEIVED DAILY CORRESPONDENCE FROM HIS WIFE WALTRAUD, UNTIL FEBRUARY 27,
1969; SUBSEQUENTLY HE BECAME ALARMED BY THE LACK OF FURTHER
COMMUNICATION FROM HER, AND AS A RESULT OF THESE CIRCUMSTANCES HE WAS
REASSIGNED TO THE CONTINENTAL UNITED STATES BY ORDERS ISSUED MARCH 10,
1969.
UPON RETURN TO HIS HOME IN JUNCTION CITY, KANSAS, SERGEANT GREENE
DISCOVERED THAT HIS WIFE AND CHILDREN, DIANA, BORN APRIL 3, 1958, AND
JIMMY, BORN OCTOBER 28, 1961, HAD MOVED FROM HIS HOUSE AND DESPITE HIS
EFFORTS, INCLUDING THE EMPLOYMENT OF PRIVATE INVESTIGATORS, HE COULD NOT
LEARN OF THEIR LOCATION. THE LOCAL POLICE REPORTED THAT IN LETTER OF
APRIL 27, 1969, MRS. GREENE INDICATED THAT SHE WISHED NO FURTHER SUPPORT
FOR HERSELF OR THE CHILDREN AND, SINCE SHE WANTED NOTHING FURTHER TO DO
WITH SERGEANT GREENE, HE WAS TO STOP LOOKING FOR HER.
ON JULY 29, 1971, IN THE DISTRICT COURT OF SHAWNEE COUNTY, KANSAS,
JAMES GREENE WAS GRANTED A DIVORCE FROM HIS WIFE (WHO WAS SERVED BY
PUBLICATION AND DID NOT APPEAR) ON THE GROUND OF HER GROSS NEGLECT OF
DUTY AND EXTREME CRUELTY. THE COURT FOUND SERGEANT GREENE TO BE A FIT
PERSON TO HAVE CUSTODY OF HIS CHILDREN AND PROVIDED THAT HE SHOULD BE
AWARDED THEIR CUSTODY AND CONTROL IF THEY WERE DOMICILED WITHIN THE
STATE OF KANSAS AND UNDER ITS JURISDICTION.
WHILE SERVING IN VIETNAM THE MEMBER SENT MOST OF HIS PAY AND
ALLOWANCES TO HIS WIFE (CLASS E ALLOTMENT OF $370), TO WHOM HE HAD GIVEN
A GENERAL POWER OF ATTORNEY BY INSTRUMENT DATED APRIL 15, 1968.
HOWEVER, UPON RETURN HOME, HE FOUND THAT HIS WIFE HAD WITHDRAWN THE $600
BALANCE FROM THEIR JOINT SAVINGS ACCOUNT AND IN HIS ABSENCE HAD INCURRED
DEBTS TOTALING $2,009.60. BY NOVEMBER 1971, IT APPEARS THAT SERGEANT
GREENE HAD PAID VARIOUS CREDITORS ALMOST ALL OF THE AMOUNTS OWED TO
THEM.
YOU SAY THAT UPON RECEIPT OF INFORMATION REGARDING MRS. GREENE'S
DESERTION OF HER HUSBAND THE FINANCE OFFICE AT FORT RILEY, KANSAS,
CAUSED THE CREDIT OF BASIC ALLOWANCE FOR QUARTERS ON ACCOUNT OF
DEPENDENTS TO BE TERMINATED AS OF APRIL 30, 1971, AND SERGEANT GREENE
WAS CHARGED WITH ERRONEOUS PAYMENT OF THE ALLOWANCE FOR THE PERIOD MAY
1969 THROUGH APRIL 1971. HIS TOTAL REMAINING INDEBTEDNESS THEREFOR AS
OF NOVEMBER 30, 1971, WAS $990.90. A REQUEST FOR REMISSION OF THE
INDEBTEDNESS (UNDER 10 U.S.C. 4837(D)) WAS NOT FAVORABLY CONSIDERED.
YOU INDICATE THAT SERGEANT GREENE HAS MADE CLAIM FOR THE ALLOWANCE, WITH
DEPENDENTS, FROM MAY 1969 TO JULY 29, 1971, THE DATE OF HIS DIVORCE.
THE BASIS FOR PRIOR ADMINISTRATIVE ACTION IS STATED TO BE OUR
DECISION OF SEPTEMBER 10, 1963, 43 COMP. GEN. 249. IN THAT DECISION WE
POINTED OUT THAT THE ADMINISTRATIVE DISCONTINUANCE OF AN ENLISTED
MEMBER'S CLASS Q ALLOTMENT UPON RECEIPT OF INFORMATION OF THE LONG
UNEXPLAINED ABSENCE OF HIS WIFE AND THE SUSPENSION OF CREDITING HIS
ACCOUNT WITH A BASIC ALLOWANCE FOR QUARTERS FOR DEPENDENTS CONSTITUTED A
DETERMINATION OF DEPENDENCY AND RELATIONSHIP UNDER SECTIONS 10 AND 11 OF
THE DEPENDENTS ASSISTANCE ACT OF 1950, AS AMENDED, 50 U.S.C. APP. 2210
AND 2211 (SEE ALSO 37 U.S.C. 556(A)(4)), WHICH DETERMINATION IS
CONCLUSIVE AND FINAL AND NOT SUBJECT TO REVIEW IN ANY COURT OR BY ANY
ACCOUNTING OFFICER OF THE GOVERNMENT, EXCEPT FOR FRAUD OR GROSS
NEGLIGENCE.
ALSO, WE POINTED OUT THAT THE STATUTE PRESUPPOSES THE EXISTENCE OF A
DEPENDENT WHO WILL RECEIVE THE BENEFIT OF THE ALLOTMENT AND THAT IT IS
DOUBTFUL THAT THE CONGRESS INTENDED THAT A MEMBER'S PAY ACCOUNT WOULD BE
CREDITED WITH A BASIC ALLOWANCE FOR QUARTERS ON ACCOUNT OF A DEPENDENT
WHERE THE DEPENDENT HAD DISAPPEARED AND HER LONG CONTINUED AND
UNEXPLAINED ABSENCE SUGGESTS THAT THE MARRIAGE BETWEEN THE PARTIES WAS
DISSOLVED BY DEATH OR DIVORCE.
WHILE SERGEANT GREENE HAS PRODUCED EVIDENCE OF HIS PAYMENT OF BILLS
INCURRED BY HIS FORMER WIFE, IN VIEW OF THE CITED DECISION YOU EXPRESS
DOUBT REGARDING THE CREDITING OF ALLOWANCES AS A MEMBER WITH DEPENDENTS
UNLESS PAYMENT OF "RETROACTIVE" BILLS MAY BE CONSIDERED SUPPORT FOR
MISSING DEPENDENTS.
SERGEANT GREENE SUGGESTS THAT THE 1963 DECISION DOES NOT APPLY TO HIS
CASE BECAUSE (1) THERE IS NO DOUBT THAT HIS FORMER WIFE AND CHILDREN ARE
STILL LIVING AS VARIOUS INDIVIDUALS HAVE BEEN IN COMMUNICATION WITH MRS.
GREENE, (2) HE HAS PAID FAMILY DEBTS WHICH HIS FORMER WIFE INCURRED IN
HIS ABSENCE, AND (3) HE HAS A CONTINUING OBLIGATION TO SUPPORT HIS
CHILDREN AND HIS DIVORCE DECREE AWARDS HIM THEIR CUSTODY WHEN HE IS ABLE
TO LOCATE THEM. HE URGES THAT UNDER THE STATUTE AUTHORIZING PAYMENT OF
QUARTERS ALLOWANCE HE IS ENTITLED TO SUCH ALLOWANCE AS LONG AS HE
SUPPORTS HIS FAMILY, "HAS NOT REFUSED TO OR BEEN ABSOLVED FROM HIS DUTY
OF SUPPORT, AND IS NOT SHOWN TO BE AT FAULT IN THE MARITAL DISRUPTION."
IN VIEW OF THE PROVISIONS OF 37 U.S.C. 556(A)(4) AND 50 U.S.C. APP.
2210 AND 2211, WE ARE WITHOUT AUTHORITY TO DETERMINE THE DEPENDENCY OF
THE ENLISTED MEMBER'S FORMER WIFE AND CHILDREN DURING THE PERIOD HERE
INVOLVED. HOWEVER, IT MAY BE STATED THAT IT DOES NOT APPEAR TO US THAT
43 COMP. GEN. 249 WOULD REQUIRE A FINDING OF NON-DEPENDENCY IN THIS
CASE. WHILE SERGEANT GREENE HAS BEEN UNAWARE OF MRS. GREENE'S PLACE OF
RESIDENCE, APPARENTLY THIS RESULTS ONLY FROM HER EXPRESSED DESIRE TO
AVOID FURTHER CONTACT WITH HIM, THE RECORD INDICATING THAT DURING THE
PERIOD PRIOR TO THE MEMBER'S DIVORCE SHE CORRESPONDED WITH HER FRIENDS
IN JUNCTION CITY. IN SUCH CIRCUMSTANCES WE PERCEIVE NO SUBSTANTIAL
REASON TO BELIEVE THAT WALTRAUD GREENE WAS NOT ALIVE OR THAT THE
MARRIAGE WAS DISSOLVED PRIOR TO THE DIVORCE OBTAINED BY SERGEANT GREENE
ON JULY 29, 1971, OR THAT HIS CHILDREN WERE DEAD, ADOPTED, OR THAT
ANOTHER MEMBER WAS IN RECEIPT OF SIMILAR ALLOWANCES FOR THEM.
IN DECISION OF AUGUST 26, 1954, B-120721, 34 COMP. GEN. 101, WE HELD
THAT A DIVORCED ARMY OFFICER, WHO WAS AWARDED CUSTODY OF TWO MINOR
CHILDREN AND WAS REQUIRED TO SUPPORT THEM BUT WHOSE WIFE HAD DISAPPEARED
WITH THE CHILDREN, HAD NOT BEEN ABSOLVED OF HIS RESPONSIBILITY FOR THE
SUPPORT OF HIS CHILDREN AND HAD DEPENDENT UNMARRIED CHILDREN WITHIN THE
MEANING OF SECTION 102(G) OF THE CAREER COMPENSATION ACT OF 1949, 63
STAT. 804, WHICH DECLARED THAT THE TERM "DEPENDENT" SHALL AT ALL TIMES
AND IN ALL PLACES INCLUDE UNMARRIED LEGITIMATE CHILDREN UNDER AGE 21, SO
AS TO BE ENTITLED TO INCREASED QUARTERS ALLOWANCE EVEN THOUGH THE
OFFICER DID NOT HAVE ACTUAL (PHYSICAL) CUSTODY OF THE CHILDREN. WE DO
NOT BELIEVE THAT THE CIRCUMSTANCES IN THAT CASE WERE ESSENTIALLY
DIFFERENT FROM THOSE OBTAINING IN THIS CASE SO THAT A DETERMINATION THAT
SERGEANT GREENE HAD A DEPENDENT MAY BE WARRANTED.
ADDITIONALLY, WHILE THERE IS NO ALLEGATION OF SUPPORT FOR THE MISSING
WIFE IN THE ABOVE-CITED DECISION, SERGEANT GREENE HAS FURNISHED RECEIPTS
SHOWING THE PAYMENT OF SUBSTANTIAL SUMS OF MONEY IN SATISFACTION OF
HOUSEHOLD DEBTS INCURRED BY HIS FORMER WIFE PRIOR TO HIS RETURN TO THE
UNITED STATES.
AS THE RECORD BEFORE US WOULD SUPPORT A FINDING THAT PRIOR TO
SERGEANT GREENE'S DIVORCE HE CONTRIBUTED TO THE SUPPORT OF HIS
DEPENDENTS, IT FOLLOWS THAT IF THE SECRETARY OF THE ARMY OR HIS DESIGNEE
SHOULD DETERMINE THAT SERGEANT GREENE MAY BE REGARDED AS A MEMBER WITH
DEPENDENTS, THIS OFFICE WOULD NOT OBJECT TO THE REPAYMENT OF BAQ
ALLOWANCES COLLECTED FROM HIM FOR THE PERIOD MAY 1969-APRIL 1971, OR TO
PAYMENT OF ADDITIONAL BAQ ALLOWANCES FOR DEPENDENTS FROM MAY 1971 TO
JULY 29, 1971. IT IS OUR OPINION, HOWEVER, THAT PAYMENT OF BAQ ON
BEHALF OF THE CHILDREN AFTER THE DATE OF THE DIVORCE WOULD NOT BE PROPER
IN THE ABSENCE OF EVIDENCE THAT THE CHILDREN ARE STILL ALIVE AND ARE NOT
FURNISHED GOVERNMENT QUARTERS. SEE 43 COMP. GEN. 249, 251 (1963).
B-174151 L/M, JUN 14, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
LIEUTENANT R. A. NYE, SC, USNR, DEPARTMENT OF THE NAVY:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 14, 1971, FILE
REFERENCE 7220 S&FD:710:JHP, FORWARDED TO THIS OFFICE BY FIRST
ENDORSEMENT OF THE DIRECTOR, NAVY MILITARY PAY SYSTEM REQUESTING AN
ADVANCE DECISION AS TO WHETHER EN3 AMELIO (N) DUCLOS, USN, 919 80 39, IS
ELIGIBLE FOR A VARIABLE REENLISTMENT BONUS AND, IF HE IS ELIGIBLE FOR
SUCH BONUS, THE CORRECT MANNER OF COMPUTING IT. THE REQUEST HAS BEEN
ASSIGNED SUBMISSION NUMBER DO-N-1133 BY THE DEPARTMENT OF DEFENSE
MILITARY PAY AND ALLOWANCE COMMITTEE.
ALSO, WE HAVE RECEIVED FROM THE NAVY MILITARY PAY SYSTEM COPIES OF
FOUR EXTENSION OF ENLISTMENT AGREEMENTS EXECUTED BY MR. DUCLOS AND
COPIES OF HIS PAY RECORDS FOR THE PERIOD HERE INVOLVED. IT APPEARS FROM
THOSE RECORDS AND THE INFORMATION YOU HAVE PROVIDED THAT MR. DUCLOS
ENLISTED IN THE NAVY ON FEBRUARY 25, 1965, FOR FOUR YEARS AND EXECUTED
FOUR EXTENSIONS OF THAT ENLISTMENT TOTALING 40 MONTHS. UPON THE
OPERATIVE DATE OF THE FOURTH EXTENSION MR. DUCLOS WOULD HAVE ACQUIRED
SUFFICIENT OBLIGATED SERVICE TO ESTABLISH ELIGIBILITY FOR A REENLISTMENT
BONUS AND A VARIABLE REENLISTMENT BONUS.
HOWEVER, ON JUNE 24, 1970, AT WHICH TIME MR. DUCLOS WAS ALREADY
OBLIGATED TO TWO YEARS' SERVICE BY HIS THIRD AND FOURTH ENLISTMENT
EXTENSIONS, MR. DUCLOS REENLISTED FOR A PERIOD OF TWO YEARS AND WAS PAID
A REENLISTMENT BONUS OF $661.20 AND THE FIRST INSTALLMENT OF $1,322.40
OF TWO INSTALLMENTS OF A VARIABLE REENLISTMENT BONUS, TYPE 4, BASED ON
THAT REENLISTMENT. ALSO INCIDENT TO HIS REENLISTMENT, THE THIRD AND
FOURTH EXTENSION OF ENLISTMENTS EXECUTED BY MR. DUCLOS WERE CANCELED ON
JUNE 24, 1970. THUS, IN EFFECT, MR. DUCLOS HAD SUBSTITUTED A TWO-YEAR
REENLISTMENT FOR THE TOTAL OF TWO YEARS' SERVICE TO WHICH HE WAS ALREADY
OBLIGATED BY HIS THIRD AND FOURTH EXTENSIONS OF ENLISTMENT.
MR. DUCLOS' REENLISTMENT OF JUNE 24, 1970, APPEARS TO HAVE BEEN IN
VIOLATION OF THE REGULATIONS THEN IN EFFECT AS FOUND IN ARTICLE
1040300.7 OF THE BUREAU OF NAVAL PERSONNEL MANUAL, NAVPERS 15791B. THAT
ARTICLE PROVIDED THAT MEMBERS WHO HAVE EXECUTED AGREEMENTS TO EXTEND
THEIR ENLISTMENTS MAY BE DISCHARGED ONE YEAR OR LESS PRIOR TO THE DATE
THE EXTENSION WOULD BECOME OPERATIVE AND REENLISTED PROVIDED THE TERM
FOR WHICH THEY REENLIST IS GREATER BY AT LEAST ONE YEAR THAN THE TOTAL
SERVICE OBLIGATION INCLUDING THE EXTENSION BEING CANCELLED.
ON DECEMBER 21, 1970, MR. DUCLOS WAS ADVISED BY THE CHIEF OF NAVAL
PERSONNEL THAT HIS TWO-YEAR REENLISTMENT OF JUNE 24, 1970, WAS IN ERROR.
PRESUMABLY THAT REENLISTMENT WAS VOIDED AND THE THIRD AND FOURTH
EXTENSIONS OF ENLISTMENT WERE REINSTATED UNDER WHICH THE MEMBER
CONTINUED TO SERVE.
THE VARIABLE REENLISTMENT BONUS IS AUTHORIZED BY 37 U.S.C. 308(G),
WHICH PROVIDES IN PERTINENT PART:
"(G) UNDER REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF DEFENSE
*** A MEMBER WHO IS DESIGNATED AS HAVING A CRITICAL MILITARY SKILL AND
WHO IS ENTITLED TO A BONUS COMPUTED UNDER SUBSECTION (A) OF THIS SECTION
UPON HIS FIRST REENLISTMENT MAY BE PAID AN ADDITIONAL AMOUNT NOT MORE
THAN FOUR TIMES THE AMOUNT OF THAT BONUS. ***"
SUBSECTION (A) OF SECTION 308 PROVIDES IN PART THAT A MEMBER OF A
UNIFORMED SERVICE WHO VOLUNTARILY EXTENDS HIS ENLISTMENT FOR AT LEAST
TWO YEARS IS, UNDER CERTAIN CIRCUMSTANCES, ENTITLED TO A REENLISTMENT
BONUS.
PURSUANT TO 10 U.S.C. 509(A), UNDER SUCH REGULATIONS AS THE SECRETARY
CONCERNED MAY PRESCRIBE, THE TERM OF ENLISTMENT OF A MEMBER OF AN ARMED
FORCE MAY BE EXTENDED OR REEXTENDED WITH HIS WRITTEN CONSENT FOR ANY
PERIOD BUT THE TOTAL OF SUCH EXTENSIONS OF AN ENLISTMENT MAY NOT EXCEED
FOUR YEARS. SECTION 906 OF TITLE 37, U.S. CODE, PROVIDES THAT A MEMBER
OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD WHO EXTENDS
HIS ENLISTMENT UNDER 10 U.S.C. 509 IS ENTITLED TO THE SAME PAY AND
ALLOWANCES AS THOUGH HE HAD REENLISTED AND, FOR THE PURPOSES OF
DETERMINING ENTITLEMENT TO REENLISTMENT BONUS OR TO TRAVEL AND
TRANSPORTATION ALLOWANCES UPON DISCHARGE, ALL SUCH EXTENSIONS OF AN
ENLISTMENT ARE CONSIDERED ONE CONTINUOUS EXTENSION.
IN OUR DECISION 40 COMP. GEN. 14 (1960), WE HELD THAT A SERIES OF
EXTENSIONS, CONSIDERED AS ONE CONTINUOUS EXTENSION, PLACES THE MEMBER IN
EXACTLY THE SAME STATUS AS THOUGH HE HAD ORIGINALLY EXTENDED HIS
ENLISTMENT FOR THE AGGREGATE OF ALL EXTENSIONS AND THE REENLISTMENT
BONUS IS TO BE COMPUTED ON THE BASIS OF THE RATE OF PAY RECEIVED ON THE
DAY BEFORE THE EFFECTIVE DATE OF THE FIRST EXTENSION.
IN MR. DUCLOS' CASE HIS TWO-YEAR REENLISTMENT OF JUNE 24, 1970, WAS
FOUND TO BE ERRONEOUS BY THE CHIEF OF NAVAL PERSONNEL AND, THEREFORE,
APPARENTLY OF NO EFFECT. CONSEQUENTLY, MR. DUCLOS WAS NOT ENTITLED TO
THE REENLISTMENT BONUS OR THE VARIABLE REENLISTMENT BONUS HE WAS PAID
PURSUANT TO SUCH REENLISTMENT.
HOWEVER, BY COMBINING MR. DUCLOS' FOUR ENLISTMENT EXTENSIONS HE WOULD
ACQUIRE AN AGGREGATE OF 40 MONTHS (3 1/3 YEARS) OF SERVICE UNDER SUCH
EXTENSIONS AND THUS BECOME ENTITLED TO A REENLISTMENT BONUS TO BE
COMPUTED BY MULTIPLYING THE MONTHLY BASIC PAY TO WHICH HE WAS ENTITLED
THE DAY BEFORE THE EFFECTIVE DATE OF HIS FIRST ENLISTMENT EXTENSION BY 3
1/3. ALSO, IF ON THE EFFECTIVE DATE OF HIS FIRST ENLISTMENT EXTENSION
MR. DUCLOS OTHERWISE MET THE REQUIREMENTS FOR A VARIABLE REENLISTMENT
BONUS, HE IS ENTITLED TO SUCH BONUS USING AS A BASIS THE REENLISTMENT
BONUS AS COMPUTED ABOVE.
IF THE TOTAL AMOUNT TO WHICH MR. DUCLOS IS ENTITLED AS OUTLINED ABOVE
EXCEEDS THE TOTAL AMOUNT OF THE REENLISTMENT AND VARIABLE REENLISTMENT
BONUSES HE WAS ERRONEOUSLY PAID ON JUNE 24, 1970, HE MAY BE PAID THE
ADDITIONAL AMOUNT TO WHICH HE IS ENTITLED. IF THE CONVERSE IS THE CASE,
THE OVERPAYMENT SHOULD BE RECOUPED.
B-174662, MAY 3, 1972
HEADNOTES-UNAVAILABLE
DIGEST:
CIVILIAN EMPLOYEE - TEMPORARY DUTY - PER DIEM AND TRAVEL ALLOWANCES -
PROPRIETY OF PAYMENT
CONCERNING THE PROPRIETY OF PAYMENT TO OLAF L. ISAKSEN FOR TRAVEL
EXPENSES AND PER DIEM INCIDENT TO TEMPORARY DUTY PERFORMED AS AN
EMPLOYEE OF THE DEPARTMENT OF THE ARMY FROM JANUARY 1969 THROUGH MAY 19,
1971.
IN VIEW OF THE DURATION OF MR. ISAKSEN'S TEMPORARY DUTY ASSIGNMENT IT
WOULD APPEAR THAT A CHANGE OF STATION SHOULD HAVE BEEN EFFECTED OR THAT
THE PER DIEM ALLOWANCE SHOULD HAVE BEEN REDUCED. HOWEVER, IT IS WELL
ESTABLISHED THAT TRAVEL ORDERS MAY NOT BE REVOKED OR MODIFIED
RETROACTIVELY SO AS TO INCREASE OR DECREASE RIGHTS WHICH HAVE BECOME
FIXED AT THE TIME THE TRAVEL IS PERFORMED. 47 COMP. GEN. 127 (1967).
ACCORDINGLY, PAYMENT TO MR. ISAKSEN MAY NOT BE DISTURBED, ALTHOUGH IT
IS RECOMMENDED THAT IN THE FUTURE SIMILAR SITUATIONS SHOULD BE GIVEN
MORE CAREFUL CONSIDERATION.
SIDNEY RUBIN, DEPARTMENT OF THE ARMY:
REFERENCE IS MADE TO YOUR LETTER OF JUNE 30, 1971, REFERENCE
SELFA-FA-AZZ, ENCLOSING A VOUCHER IN FAVOR OF MR. OLAF L. ISAKSEN IN THE
AMOUNT OF $821.85 FOR TRAVEL EXPENSES AND PER DIEM DURING THE PERIOD
APRIL 7 THROUGH MAY 19, 1971, AND REQUESTING OUR ADVANCE DECISION AS TO
THE PROPRIETY OF PAYING SUCH VOUCHER. YOU ALSO REQUEST A DECISION
WHETHER ANY COLLECTION ACTION SHOULD BE TAKEN AGAINST MR. ISAKSEN FOR
PER DIEM PAYMENTS MADE DURING THE PERIOD JANUARY 1969 THROUGH APRIL 6,
1971, IN VIEW OF THE CIRCUMSTANCES HEREINAFTER RELATED. YOUR REQUEST
WAS FORWARDED TO THIS OFFICE BY THE PER DIEM, TRAVEL AND TRANSPORTATION
ALLOWANCE COMMITTEE, PDTATAC CONTROL NO. 71-55, BY 2ND INDORSEMENT DATED
DECEMBER 1, 1971.
THE REQUEST FOR THE DECISION ARISES IN VIEW OF THE PROLONGED PERIOD
MR. ISAKSEN WAS ON A TEMPORARY DUTY ASSIGNMENT AT LEXINGTON, KENTUCKY,
AND THE FACT THAT DURING SUCH TIME HE WAS PAID PER DIEM IN LIEU OF
SUBSISTENCE NOTWITHSTANDING HIS FAMILY RESIDED AT THE TEMPORARY DUTY
STATION.
INFORMATION OF RECORD FURNISHED WITH YOUR REQUEST SHOWS THAT MR.
ISAKSEN IS EMPLOYED BY THE DEPARTMENT OF THE ARMY AS A TECHNICAL WRITER
AND EDITOR, ELECTRONICS, GS-12, WITH THE MAINTENANCE FACILITIES BRANCH
OF THE MAINTENANCE ENGINEERING DIVISION, USECOM. HIS PERMANENT DUTY
STATION IS DESIGNATED AS FORT MONMOUTH, NEW JERSEY. IT APPEARS THAT MR.
ISAKSEN'S FIRST TDY ASSIGNMENTS TO LEXINGTON COMMENCED IN THE FALL OF
1967. THESE FIRST ASSIGNMENTS WERE FROM 2 TO 3 WEEKS DURATION. IT
APPEARS THAT THE SUBSEQUENT INCREASE OF PROJECTS AT LEXINGTON
NECESSITATED MORE EXTENDED TOURS OF TDY AND THAT ALTHOUGH ADMINISTRATIVE
CONSIDERATION WAS GIVEN TO HAVING A TECHNICAL WRITER ASSIGNED TO
LEXINGTON ON A PERMANENT BASIS, THE DECISION WAS MADE NOT TO DO SO
BECAUSE OF THE UNSTABLE NATURE OF THE WORKLOAD. DURING THE PERIOD
OCTOBER 1967 THROUGH JANUARY 1969, MR. ISAKSEN'S FAMILY RESIDED
ALTERNATIVELY BETWEEN LEXINGTON, KENTUCKY, AND HIS RESIDENCE IN THE
VICINITY OF FORT MONMOUTH, NEW JERSEY. THE RESIDENCE IN FORT MONMOUTH
WAS SOLD IN JANUARY 1969. PART OF THE FURNITURE WAS STORED AND SOME
SHIPPED TO LEXINGTON AT THE EMPLOYEE'S EXPENSE. ALTHOUGH MR. ISAKSEN'S
SUPERVISORS KNEW THAT HIS FAMILY RESIDED IN LEXINGTON, THEY WERE NOT
AWARE THAT THE RESIDENCE AT FORT MONMOUTH HAD BEEN SOLD. DURING PERIODS
MR. ISAKSEN WAS ON DUTY AT FORT MONMOUTH, SUBSEQUENT TO THE SALE OF HIS
RESIDENCE, THE FAMILY RESIDED WITH RELATIVES IN THAT AREA. THE RECORD
INDICATES THAT BETWEEN OCTOBER 1, 1967, AND MARCH 26, 1971, MR. ISAKSEN
WAS ON TEMPORARY DUTY AT LEXINGTON 1,015 DAYS OUT OF THE 1,271 DAYS IN
THAT PERIOD. HIS PER DIEM RATE WAS $16 UNTIL NOVEMBER 13, 1969, THIS
BEING THE MAXIMUM RATE AT THAT TIME. PUBLIC LAW 91-114, APPROVED
NOVEMBER 10, 1969, 83 STAT. 190, INCREASED THE MAXIMUM PER DIEM
ALLOWANCE FROM $16 TO $25. MR. ISAKSEN'S PER DIEM WAS THEN ESTABLISHED
AT $18, IT HAVING BEEN ADMINISTRATIVELY DETERMINED THAT SUCH RATE WAS A
FAIR RATE IN VIEW OF THE EMPLOYEE'S REPORTED EXPENSES. SUCH REPORTED
EXPENSES WERE ADMINISTRATIVELY CONSIDERED TO HAVE BEEN OVER AND ABOVE
THOSE THE EMPLOYEE WOULD HAVE INCURRED HAD HE NOT BEEN ON THE TEMPORARY
DUTY ASSIGNMENT.
THE GOVERNING PROVISION OF LAW IS CODIFIED AT 5 U.S.C. 5702 AND
PROVIDES IN PERTINENT PART:
"(A) AN EMPLOYEE, WHILE TRAVELING ON OFFICIAL BUSINESS AWAY FROM HIS
DESIGNATED POST OF DUTY, IS ENTITLED TO A PER DIEM ALLOWANCE PRESCRIBED
BY THE AGENCY CONCERNED. ***"
SECTION 6.2(D) OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, AND
PARAGRAPH C 8051-2D, VOLUME 2, JOINT TRAVEL REGULATIONS (JTR), PROVIDE
THAT IN ANY CASE WHERE THE EMPLOYEE'S TOUR OF DUTY WILL EXCEED 2 MONTHS
STAY AT A TEMPORARY DUTY STATION CONSIDERATION SHOULD BE GIVEN TO EITHER
A CHANGE IN OFFICIAL STATION OR A REDUCTION IN THE PER DIEM ALLOWANCE.
THE RECORD INDICATES THAT CONSIDERATION WAS GIVEN TO A CHANGE OF STATION
BUT REJECTED. ALSO, THAT THE RATE OF PER DIEM WAS REVIEWED FROM TIME TO
TIME. IN RETROSPECT IT WOULD APPEAR THAT A CHANGE OF STATION SHOULD
HAVE BEEN EFFECTED AND, IF NOT, THAT THE PER DIEM ALLOWANCE SHOULD HAVE
BEEN REDUCED AT LEAST FOR THE PERIOD SUBSEQUENT TO THE SALE OF THE
RESIDENCE AT FORT MONMOUTH ON THE BASIS THAT THE EMPLOYEE'S EXPENSE WAS
THEREBY REDUCED. HOWEVER, THE RULE IS WELL ESTABLISHED THAT LEGAL
RIGHTS AND LIABILITIES IN REGARD TO TRAVEL ALLOWANCES VEST AS AND WHEN
THE TRAVEL IS PERFORMED UNDER THE ORDERS, AND THAT SUCH ORDERS MAY NOT
BE REVOKED OR MODIFIED RETROACTIVELY SO AS TO INCREASE OR DECREASE THE
RIGHTS WHICH HAVE BECOME FIXED UNDER THE APPLICABLE STATUTES OR
REGULATIONS UNLESS ERROR IS APPARENT ON THE FACE OF THE ORDERS, OR ALL
FACTS AND CIRCUMSTANCES CLEARLY DEMONSTRATE THAT SOME PROVISION
PREVIOUSLY DETERMINED AND DEFINITELY INTENDED HAD BEEN OMITTED THROUGH
ERROR OR INADVERTENCE IN PREPARING THE ORDERS. 23 COMP. GEN. 713
(1944); 24 ID. 439 (1944); 47 ID. 127 (1967).
UNDER THE CIRCUMSTANCES RELATED, WE DO NOT VIEW THE ADMINISTRATIVE
DETERMINATION THAT THE ASSIGNMENT WAS "TEMPORARY" AND NOT "PERMANENT" IN
NATURE SO CLEARLY ERRONEOUS AS TO REQUIRE A CONTRARY VIEW BY OUR OFFICE.
WITH RESPECT TO THE PER DIEM, WE BELIEVE THERE SHOULD HAVE BEEN A MORE
THOROUGH ADMINISTRATIVE REVIEW OF THE RATES SET IN THIS CASE AND THAT IN
THE FUTURE SIMILAR SITUATIONS SHOULD BE GIVEN CAREFUL SCRUTINY TO BE
CERTAIN THE PER DIEM RATES TO BE AUTHORIZED ARE NOT EXCESSIVE. HOWEVER,
SINCE THE RATES PRESCRIBED WERE AS ADMINISTRATIVELY INTENDED, ACTION TO
REDUCE THEM RETROACTIVELY MAY NOT BE TAKEN IN VIEW OF THE ABOVE-CITED
RULE.
INSOFAR AS THE PERFORMANCE OF TEMPORARY DUTY AT THE PLACE HIS FAMILY
RESIDED IS CONCERNED, PARAGRAPH C 8050-5, VOLUME 2, JTR, PROVIDES:
"*** AN EMPLOYEE, WHO PERFORMS TEMPORARY DUTY AT THE PLACE OF HIS
FAMILY DOMICILE WHICH IS OTHER THAN THE PLACE FROM WHICH HE COMMUTES TO
WORK EACH DAY WHEN ON DUTY AT HIS PERMANENT DUTY STATION, MAY BE
AUTHORIZED PAYMENT OF PER DIEM EVEN THOUGH MEALS AND LODGINGS ARE TAKEN
AT SUCH DOMICILE. AUTHORITY WILL BE FOR ONLY SUCH PER DIEM AS IS
JUSTIFIED BY THE CIRCUMSTANCES AND WILL NOT EXCEED THE AMOUNT REQUIRED
TO MEET NECESSARY ALLOWABLE EXPENSES. THE TRAVEL APPROVING OFFICIAL
WILL BE RESPONSIBLE FOR DETERMINING AN APPROPRIATE REDUCTION. (35 COMP.
GEN. 554)."
PURSUANT TO THE FOREGOING THE FACT THAT THE FAMILY RESIDED AT THE
PLACE OF TEMPORARY DUTY DOES NOT PRECLUDE PAYMENT OF PER DIEM.
IN LINE WITH THE ABOVE YOU ARE ADVISED THAT THE SUBMITTED VOUCHER MAY
BE PAID IF OTHERWISE CORRECT, AND THAT NO ACTION NEED BE TAKEN TOWARD
RETROACTIVE ADJUSTMENT OF THE PER DIEM PREVIOUSLY PAID.
THE ENCLOSURES FORWARDED WITH YOUR LETTER ARE RETURNED.
B-175643 O.M., APR 27, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
DIRECTOR, TRANSPORTATION AND CLAIMS DIVISION:
RETURNED. WE HAVE HELD THAT THE GOVERNMENT NEED NOT CLAIM AGAINST AN
EMPLOYEE A PRO RATA SHARE OF SAVINGS IN TRANSPORTATION COSTS WHICH
RESULTED SOLELY FROM THE FACT THAT THE EMPLOYEE PERFORMED SOME PERSONAL
TRAVEL IN ADDITION TO THE OFFICIAL TRAVEL REQUIRED. IN SUCH CASES WE
HAVE HELD THAT THE EMPLOYEE SHOULD BE REQUIRED TO PAY ONLY THE
ADDITIONAL COST WHICH WAS INCURRED BY REASON OF HIS PERSONAL TRAVEL. 35
COMP. GEN. 609 (1956); 33 ID. 434 (1954).
IN THE INSTANT CASE SINCE NO ADDITIONAL FEE WAS ASSESSED BECAUSE OF
THE USE OF THE RENTAL CAR FOR PERSONAL BUSINESS THE COLLECTION BY THE
EMPLOYEE'S AGENCY OF A MILEAGE CHARGE FROM HIM FOR SUCH USE SO AS TO
REDUCE THE COST TO THE GOVERNMENT WAS IMPROPER.
ACCORDINGLY, THE CLAIM MAY BE ALLOWED IF OTHERWISE CORRECT.
COMPTROLLER GENERAL
HEREWITH IS THE CLAIM OF RICHARD T. BOSWELL FOR REIMBURSEMENT OF
CERTAIN RENTAL CAR EXPENSES INCURRED INCIDENT TO HIS TEMPORARY DUTY
TRAVEL FROM CHARLESTON, SOUTH CAROLINA TO SUNNYVALE, CALIFORNIA, AND
RETURN, AS AN EMPLOYEE OF THE DEPARTMENT OF THE NAVY.
TRAVEL ORDER NO. T-001883171, DATED APRIL 13, 1971, AUTHORIZED RENTAL
OF A CAR AT GOVERNMENT EXPENSE. THIS TRAVEL ORDER EXPRESSLY STATED
THAT, IF FOR ANY REASON THE CAR WAS USED FOR PERSONAL CONVENIENCE, THAT
PORTION OF THE COST MUST BE PAID BY THE TRAVELER. AS SHOWN ON INVOICE
NO. 23665347, THE CAR WAS RENTED ON A MONTHLY BASIS WITH 3,000 MILES
PREPAID. (THIS MEANT THAT NO CHARGE WAS MADE FOR THE NUMBER OF MILES
DRIVEN UNLESS THEY EXCEED 3,000). MR. BOSWELL DROVE THE CAR 600 MILES
ON OFFICIAL BUSINESS AND 683 MILES FOR HIS OWN PERSONAL CONVENIENCE.
WHEN HE SUBMITTED HIS TRAVEL VOUCHER FOR REIMBURSEMENT, THE AMOUNT OF
$68.30 WAS DISALLOWED. THIS AMOUNT REPRESENTS THE COST OF THE 683 MILES
MR. BOSWELL DROVE THE CAR FOR HIS OWN PERSONAL CONVENIENCE COMPUTED AT
THE RATE OF TEN CENTS PER MILE. SINCE MR. BOSWELL USED THE CAR FOR BOTH
COMMINGLED PERSONAL AND OFFICIAL USE, HE WAS MADE TO PAY A PORTION OF
THE COST OF RENTING THE CAR.
MR. BOSWELL IS NOW RECLAIMING THE AMOUNT DISALLOWED. HE MAINTAINS NO
DEDUCTIONS SHOULD HAVE BEEN MADE FROM HIS TRAVEL VOUCHER AS THE 683
MILES HE DROVE THE CAR FOR HIS OWN PERSONAL CONVENIENCE RESULTED IN NO
COSTS TO THE GOVERNMENT IN EXCESS OF WHAT IT WAS ALREADY OBLIGATED TO
PAY.
PARAGRAPH C6101-2 OF THE JTR, VOL. 2, STATES THAT SUCH SPECIAL
CONVEYANCES (RENTED CARS) WILL BE USED ONLY FOR OFFICIAL BUSINESS UNLESS
THE EMPLOYEE BEARS THE EXCESS COSTS OCCASIONED BY SUCH NONOFFICIAL USE.
IN THE PRESENT CASE, NO EXCESS COST WAS OCCASIONED BY THE NONOFFICIAL
USE OF THE CAR. IN VIEW OF THE FOREGOING, DOUBT EXISTS AS TO WHETHER
RECOVERY FROM THE EMPLOYEE WAS PROPERLY MADE FOR THE MILEAGE DRIVEN FOR
HIS PERSONAL CONVENIENCE. THUS THE MATTER IS SUBMITTED FOR YOUR
CONSIDERATION AND INSTRUCTION.
B-171969 L/M, FEB 8, 1972
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
SECRETARY OF THE NAVY:
WE REFER FURTHER TO LETTER DATED NOVEMBER 30, 1971, FROM THE
ASSISTANT SECRETARY OF THE NAVY (MANPOWER AND RESERVE AFFAIRS),
FORWARDED HERE BY LETTER OF DECEMBER 3, 1971, FROM THE PER DIEM, TRAVEL
AND TRANSPORTATION ALLOWANCE COMMITTEE (CONTROL NO. 71-48), REGARDING
THE ENTITLEMENT OF MR. THOMAS M. HUGHEY TO TRANSPORTATION OF A DEPENDENT
(WIFE) AT GOVERNMENT EXPENSE.
BY LETTER TO THE COMPTROLLER GENERAL OF THE UNITED STATES, DATED
APRIL 19, 1971, THOMAS M. HUGHEY, HM1, USN, 4TH RIVERINE ADVISOR,
ADVISORY TEAM NO. 108, APO SAN FRANCISCO, CALIFORNIA 96215, REQUESTED
ADVICE REGARDING HIS ENTITLEMENT TO TRAVEL AND TRANSPORTATION
ALLOWANCES. HE SAID THAT ON OR ABOUT AUGUST 19, 1971, HE WAS TO DEPART
FROM SAIGON, REPUBLIC OF VIETNAM, TRAVEL TO ENGLAND WHERE HE EXPECTED TO
BE MARRIED ON AUGUST 25, 1971, AND WITH HIS WIFE PROCEED TO UNITED
STATES NAVAL BASE PHILADELPHIA, INCIDENT TO HIS TRANSFER TO THE FLEET
RESERVE, EFFECTIVE SEPTEMBER 16, 1971.
THE MEMBER WAS INFORMED BY OFFICE LETTER OF JULY 14, 1971, THAT UNDER
PARAGRAPH M7060 OF THE JOINT TRAVEL REGULATIONS, "IT WOULD APPEAR THAT
YOU WILL BE ENTITLED TO TRANSPORTATION OF YOUR DEPENDENT FROM THE PLACE
OF MARRIAGE TO THE NEW STATION, PROVIDED THE MARRIAGE IS BEFORE THE
EFFECTIVE DATE OF YOUR ORDERS, SUCH ENTITLEMENT NOT TO EXCEED THE
CONSTRUCTIVE COST TO THE GOVERNMENT HAD TRANSPORTATION BEEN PROVIDED
FROM THE OLD TO THE NEW STATION." REFERENCE WAS MADE TO 42 COMP. GEN.
344 (1963) AND DECISION B-134408, B-148459, MAY 22, 1963.
THE ASSISTANT SECRETARY OF THE NAVY STATES THAT ITEMS 14 AND 17 WERE
ADDED TO PARAGRAPH M7000 OF THE JOINT TRAVEL REGULATIONS (CHANGE 136,
EFFECTIVE APRIL 1, 1964), AS AN IMPLEMENTATION OF DEPARTMENT OF DEFENSE
(DOD) DIRECTIVE NUMBER 1315.7, APRIL 6, 1963, AND THAT THESE PROVISIONS
WOULD APPEAR TO DENY TRANSPORTATION FOR MRS. HUGHEY EXCEPT FOR LAND
TRAVEL IN THE UNITED STATES, AND THEY WOULD ALSO APPEAR TO NEGATE THE
APPLICATION OF THE DECISIONS CITED IN THE LETTER OF JULY 14, 1971.
THE ASSISTANT SECRETARY SAYS IT IS ASSUMED THAT THE ADVISORY LETTER
TO MR. HUGHEY WAS NOT INTENDED FOR USE AS A PRECEDENT IN SIMILAR CASES,
BUT APPARENTLY IT IS BEING SO USED IN THE UNIFORMED SERVICES.
THEREFORE, HE REQUESTS THAT THIS OFFICE TAKE ACTION TO NULLIFY ITS
EFFECT, IF SUCH ACTION IS APPROPRIATE.
THE STATUTORY AUTHORITY FOR THE TRANSPORTATION OF DEPENDENTS OF
MEMBERS OF THE UNIFORMED SERVICES, 37 U.S.C. 406, EXPRESSLY PROVIDES
THAT TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE UPON A MEMBER'S
ORDERED CHANGE OF PERMANENT STATION SHALL BE SUBJECT TO SUCH CONDITIONS
AND LIMITATIONS, FOR SUCH GRADES, RANKS, AND RATINGS, AND TO AND FROM
SUCH PLACES AS THE SECRETARIES CONCERNED MAY PRESCRIBE.
PARAGRAPH M7060 OF THE JOINT TRAVEL REGULATIONS CURRENTLY PROVIDES AS
FOLLOWS:
"EXCEPT UPON GRADUATION FROM A SERVICE ACADEMY (SEE PAR. M7068), A
MEMBER WHO ACQUIRES A DEPENDENT SUBSEQUENT TO THE DATE OF HIS DEPARTURE
(DETACHMENT) FROM HIS OLD PERMANENT DUTY STATION INCIDENT TO PERMANENT
CHANGE-OF-STATION ORDERS BUT ON OR BEFORE THE EFFECTIVE DATE OF THOSE
ORDERS WILL BE ENTITLED TO TRANSPORTATION OF SUCH DEPENDENT FROM THE
PLACE WHERE THE DEPENDENT IS ACQUIRED TO THE NEW PERMANENT STATION NOT
TO EXCEED THE ENTITLEMENT FROM THE OLD TO THE NEW PERMANENT DUTY
STATION. SUCH ENTITLEMENT IS WITHOUT REGARD TO WHETHER TEMPORARY DUTY
IS DIRECTED OR PERFORMED EN ROUTE OR WHETHER EITHER THE OLD OR NEW
STATION IS WITHIN OR OUTSIDE THE UNITED STATES."
IN 42 COMP. GEN. 344 (B-148459), SUPRA, THE MEMBER WHO HAD BEEN
STATIONED AT A RESTRICTED OVERSEAS STATION RETURNED IN JULY 1961 TO THE
UNITED STATES WHERE HE MARRIED AND THEN TRAVELED WITH HIS WIFE TO HIS
NEW PERMANENT STATION IN THE UNITED STATES. WE CONCLUDED THAT PAYMENT
WAS AUTHORIZED FOR HIS WIFE'S TRANSPORTATION FROM THE PLACE OF MARRIAGE
TO THE NEW STATION (BOTH IN THE UNITED STATES), SUCH ENTITLEMENT NOT TO
EXCEED THE CONSTRUCTIVE COST TO THE GOVERNMENT HAD TRANSPORTATION BEEN
PROVIDED FROM THE OLD TO THE NEW STATION. WE INDICATED THAT THE FACT
THAT THE MEMBER'S OLD OVERSEAS STATION WAS RESTRICTED AS TO DEPENDENTS'
TRAVEL WOULD NOT APPEAR TO LIMIT ENTITLEMENT UNDER THE EXPRESS
PROVISIONS OF PARAGRAPH M7060 OF THE REGULATIONS, AS IT CONTAINED NO
LIMITATION BASED UPON RESTRICTED TRAVEL TO THE OLD STATION, AND TRAVEL
TO THE OLD STATION WAS NOT INVOLVED.
IN 42 COMP. GEN. 645 (1963), B-134408 AND B-148459), SUPRA, WE SAID
THAT OUR DECISION IN 42 COMP. GEN. 344 WAS BASED ON THE CONTROLLING
REGULATIONS IN EFFECT DURING THE PERIOD INVOLVED.
EFFECTIVE APRIL 6, 1963, SECTION V.C., DOD DIRECTIVE NO. 1315.7,
"OVERSEAS DUTY TOURS OF MILITARY PERSONNEL," PROVIDED POLICY REGARDING
TRANSPORTATION OF DEPENDENTS AS FOLLOWS:
"6. MILITARY PERSONNEL OTHERWISE ENTITLED TO TRANSPORTATION OF
DEPENDENTS AT GOVERNMENT EXPENSE WILL NOT BE ENTITLED TO SUCH
TRANSPORTATION TO OR FROM THEIR DUTY STATIONS OUTSIDE THE UNITED STATES
UNLESS THEY ARE AUTHORIZED BY THE APPROPRIATE MILITARY COMMANDER TO HAVE
THEIR DEPENDENTS PRESENT IN THE VICINITY OF THEIR DUTY STATIONS."
ACCORDINGLY, ITEMS 14 AND 17, WERE ADDED TO PARAGRAPH M7000, JTR,
EFFECTIVE APRIL 1, 1964. PARAGRAPH M7000-14 PROVIDES THAT TRANSOCEANIC
OR OVERSEAS LAND TRANSPORTATION OF DEPENDENTS IS NOT AUTHORIZED AT
GOVERNMENT EXPENSE UPON A PERMANENT CHANGE OF STATION WHEN THE MEMBER IS
CONSIDERED TO BE A MEMBER WITHOUT DEPENDENTS AS DEFINED IN ITEMS 3 AND 4
OF PARAGRAPH M4300-2 OF THE REGULATIONS. THESE ITEMS FURTHER RESTRICT
THE TERM "MEMBER WITHOUT DEPENDENTS" TO INCLUDE (3) THE REMAINDER OF ANY
TOUR IN WHICH DEPENDENTS JOIN HIM OR ARE ACQUIRED AND THE MEMBER IS NOT
CONSIDERED TO BE A MEMBER WITH DEPENDENTS UNDER SUBPARAGRAPH 1, OR (4)
WHOSE DEPENDENTS ARE NOT AUTHORIZED BY THE APPROPRIATE MILITARY
COMMANDER TO BE PRESENT IN THE VICINITY OF THE MEMBER'S OVERSEAS DUTY
STATION.
SUBPARAGRAPH 1 OF PARAGRAPH M4300, DEFINING THE TERM "MEMBER WITH
DEPENDENTS," INCLUDES A MEMBER IN AN ELIGIBLE GRADE (ITEM 1) WHO IS
AUTHORIZED TO HAVE HIS DEPENDENTS RESIDE AT OR IN THE VICINITY OF HIS
DUTY STATION OUTSIDE THE UNITED STATES AND WHOSE DEPENDENTS DO SO RESIDE
OR (ITEM 2) WHO IS JOINED BY OR ACQUIRES DEPENDENTS WHILE SERVING
OUTSIDE THE UNITED STATES PROVIDED HE HAS AT LEAST 12 MONTHS REMAINING
ON HIS OVERSEAS TOUR AFTER ARRIVAL OR ACQUISITION OF DEPENDENTS, OR
SERVES THE ACCOMPANIED TOUR OF DUTY AT THAT STATION, WHICHEVER IS
CONSIDERED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT AS DETERMINED
BY THE SERVICE CONCERNED.
PARAGRAPH M7000-17 OF THE REGULATIONS PROVIDES THAT TRANSPORTATION OF
DEPENDENTS AT GOVERNMENT EXPENSE UPON A PERMANENT CHANGE OF STATION MAY
NOT BE PROVIDED FOR TRAVEL TO THE UNITED STATES WHEN THE PRESENCE OF THE
DEPENDENTS AT THE OVERSEAS STATION WAS NOT AUTHORIZED OR APPROVED BY THE
APPROPRIATE MILITARY OVERSEAS COMMANDER.
IN DECISION B-173715, DECEMBER 8, 1971, 51 COMP. GEN. ___, COPY
ENCLOSED, WHERE A MEMBER SERVING IN VIETNAM ATTAINED A GRADE ELIGIBLE
FOR TRANSPORTATION OF DEPENDENTS, WE HELD THAT HE WAS NOT ENTITLED TO
TRANSOCEANIC TRAVEL AT GOVERNMENT EXPENSE FOR HIS WIFE FROM HAWAII TO
THE CONTINENTAL UNITED STATES, IN CONNECTION WITH HIS PERMANENT CHANGE
OF STATION. THIS WAS BECAUSE HE WAS REGARDED AS A MEMBER WITHOUT
DEPENDENTS UNDER PARAGRAPH M4300-2 OF THE REGULATIONS AND SUBJECT TO THE
RESTRICTIONS OF PAR. M7000-14, JTR. SEE ALSO DECISION B-169483, APRIL
22, 1970 (PAR. M7000-17), COPY ENCLOSED.
IN VIEW OF THE CONTROLLING PROVISIONS IN EFFECT SINCE APRIL 1, 1964,
WHERE A MEMBER IS CONSIDERED TO BE WITHOUT DEPENDENTS AS PROVIDED IN
PARAGRAPH M7000-14, OR THE PRESENCE OF HIS DEPENDENTS AT THE OVERSEAS
STATION IS NOT AUTHORIZED OR APPROVED BY THE APPROPRIATE COMMANDER, AS
REQUIRED BY PARAGRAPH M7000-17, THE MEMBER IS NOT ENTITLED TO DEPENDENT
OVERSEAS TRANSPORTATION UNDER PARAGRAPH M7060 OF THE REGULATIONS.
CONSEQUENTLY, A MEMBER WHOSE DEPENDENT IS NEVER APPROVED OR
AUTHORIZED TO BE PRESENT AT HIS RESTRICTED OVERSEAS STATION, IS NOT
ENTITLED TO HIS DEPENDENT'S TRANSOCEANIC TRANSPORTATION AT GOVERNMENT
EXPENSE UNDER PAR. M7060, JTR, IN CONNECTION WITH THE MEMBER'S CHANGE OF
PERMANENT STATION TO AN UNRESTRICTED STATION.
IN THIS REGARD, IT MAY BE STATED THAT THE INFORMAL OPINION CONTAINED
IN LETTER OF JULY 14, 1971, TO MR. HUGHEY, WHO WAS NOT ENTITLED TO A
DECISION, HAS NO LEGAL EFFECT AS PRECEDENT AND SHOULD NOT BE USED AS
AUTHORITY IN OTHER SIMILAR CASES. SEE 31 COMP. GEN. 614 (1952). 0045A
B-172014 L/M, AUG 25, 1971
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
MAJOR W. G. REDDICK, DISBURSING OFFICER, DEPARTMENT OF THE NAVY:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 1, 1971 (FILE
REFERENCE MCDO-CD-WBF 7220/7)), FORWARDED TO THIS OFFICE BY HEADQUARTERS
UNITED STATES MARINE CORPS LETTER DATED JUNE 22, 1971 (REFERENCE CD-PBF
7220/7). YOU REQUEST AN ADVANCE DECISION AS TO WHETHER PAYMENT IS
AUTHORIZED ON AN ENCLOSED VOUCHER COVERING THE SIX MONTHS' DEATH
GRATUITY IN THE CASE OF GUNNERY SERGEANT JAMES W. CLINE, 63 97 49,
UNITED STATES MARINE CORPS, WHO DIED JULY 3, 1970. THE VOUCHER IS
STATED IN FAVOR OF MRS. MILDRED N. CLINE, THE DECEDENT'S WIDOW AND
DESIGNATED BENEFICIARY.
YOU STATE THAT SERGEANT CLINE'S DEATH RESULTED FROM A GUNSHOT WOUND
INFLICTED BY HIS WIFE, THE CLAIMANT. YOU FURTHER STATE THAT AN
INVESTIGATION INTO THE CIRCUMSTANCES OF SERGEANT CLINE'S DEATH DISCLOSED
THE FACTS TO BE ESSENTIALLY AS FOLLOWS.
SERGEANT CLINE AND HIS WIFE WERE LIVING APART. ON THE DAY OF HIS
DEATH SERGEANT CLINE WAS VISITING HIS WIFE IN HER APARTMENT IN RICHMOND,
VIRGINIA. DURING THAT VISIT NEIGHBORS HEARD WHAT SOUNDED LIKE GUNSHOTS
COMING FROM MRS. CLINE'S APARTMENT. SERGEANT CLINE WAS THEN SEEN
FLEEING FROM THE APARTMENT WITH MRS. CLINE, PISTOL IN HAND, THEN SEEN
FLEEING FROM THE APARTMENT WITH MRS. CLINE, PISTOL IN HAND, IN PURSUIT.
OUTSIDE THE APARTMENT MRS. CLINE WAS SEEN TO FIRE AT SERGEANT CLINE
SEVERAL TIMES FROM A DISTANCE OF LESS THAN 25 FEET. WITNESSES SAW AT
LEAST SOME OF THOSE SHOTS STRIKE SERGEANT CLINE, CAUSE HIM TO FALL TO
THE STREET AND BLEED PROFUSELY. A NEIGHBOR THEN DISARMED MRS. CLINE,
LATER TURNING HER WEAPON OVER TO A RICHMOND POLICE OFFICER. SERGEANT
CLINE WAS TAKEN TO A NEARBY HOSPITAL WHERE HE WAS PRONOUNCED DEAD ON
ARRIVAL, DEATH BEING ASCRIBED TO A GUNSHOT WOUND IN THE CHEST.
THE RICHMOND POLICE DEPARTMENT DETERMINED THAT TWO SHOTS WERE FIRED
INSIDE MRS. CLINE'S APARTMENT. THE PROJECTILES FROM BOTH SHOTS WERE
FOUND IMBEDDED IN THE WALL. FIVE SHOTS WERE FIRED OUTSIDE THE
APARTMENT, WITH FOUR STRIKING SERGEANT CLINE AND ONE MISSING AND
RICOCHETING AWAY. THE APARTMENT BORE NO EVIDENCE OF A STRUGGLE AND NO
WITNESSES COULD BE FOUND WHO HEARD AN ALTERCATION PRIOR TO THE GUNFIRE.
AN EXAMINATION OF SERGEANT CLINE'S BLOOD FOR ALCOHOL CONTENT PRODUCED
NEGATIVE RESULTS.
AS A RESULT OF SERGEANT CLINE'S DEATH MRS. CLINE WAS INDICTED FOR
MURDER. SHE WAS TRIED WITHOUT A JURY ON NOVEMBER 16, 1970, IN THE
HUSTINGS COURT OF THE CITY OF RICHMOND AND FOUND NOT GUILTY BY REASON OF
INSANITY. SHE WAS PLACED IN TEMPORARY CUSTODY OF THE COMMISSIONER OF
MENTAL HYGIENE AND HOSPITALS AND COMMITTED TO CENTRAL STATE HOSPITAL.
ON JANUARY 19, 1971, MRS. CLINE AGAIN APPEARED BEFORE THE HUSTINGS COURT
OF THE CITY OF RICHMOND, WHICH THEN FOUND THAT SHE WAS NOT INSANE OR
FEEBLEMINDED AND THAT SHE COULD BE DISCHARGED WITHOUT DANGER TO HERSELF
OR OTHERS, WHEREUPON SHE WAS RELEASED FROM FURTHER CUSTODY.
AS YOU STATE IN YOUR LETTER THIS OFFICE HAS REPEATEDLY HELD THAT IT
IS AGAINST PUBLIC POLICY TO PERMIT THE PAYMENT BY THE GOVERNMENT OF
BENEFITS TO A BENEFICIARY WHO FELONIOUSLY KILLS THE PERSON UPON WHOSE
DEATH SUCH BENEFITS BECOME DUE. SEE 34 COMP. GEN. 103 (1954), AND CASES
CITED THEREIN.
WHILE PAYMENT OF BENEFITS HAS BEEN AUTHORIZED IN SOME CASES IN WHICH
THE BENEFICIARY WAS RESPONSIBLE FOR THE DEATH OF THE DECEDENT, IN SUCH
CASES THE RECORD ESTABLISHED WITH REASONABLE CLARITY THE ABSENCE OF ANY
FELONIOUS INTENT. SUCH WAS THE CASE IN OUR DECISION B-172014, MARCH 11,
1971, TO WHICH YOU REFERRED IN YOUR LETTER. IN THAT CASE THE RECORD,
WHICH INCLUDED A SHOWING OF ACQUITTAL OF ALL CRIMINAL CHARGES ON A PLEA
OF SELF-DEFENSE, REASONABLY ESTABLISHED THAT THE HOMICIDE WAS EXCUSABLE
BY REASON OF SELF-DEFENSE AND WAS NOT A FELONIOUS KILLING.
FROM THE FACTS AS PRESENTED IN THE INSTANT CASE THERE WOULD BE LITTLE
DOUBT THAT THIS WAS A FELONIOUS HOMICIDE WERE IT NOT FOR THE FACT THAT
MRS. CLINE WAS FOUND NOT GUILTY BY REASON OF INSANITY OF THE CHARGE OF
MURDER.
WHILE IT HAS BEEN HELD THAT MURDER BY AN INSANE PERSON IS AN
EXCEPTION TO THE RULE AGAINST PERMITTING RECOVERY OF BENEFITS TO A
PERSON WHO KILLS ANOTHER UPON WHOSE DEATH SUCH BENEFITS ACCRUE, IT
APPEARS THAT THIS EXCEPTION TO THE RULE DOES NOT APPLY IN CASES
INVOLVING A KILLING DURING A PERIOD OF TEMPORARY INSANITY. SEE THE CASE
OF UNITED STATES V. KWASNIEWSKI, 91 F. SUPP. 847 (E.D. MICH. 1950),
WHICH WAS AN INTERPLEADER ACTION BROUGHT BY THE UNITED STATES TO
DETERMINE THE PROPER PAYEE OF THE PROCEEDS FROM A NATIONAL SERVICE LIFE
INSURANCE POLICY THE CONTINGENT BENEFICIARY OF WHICH HAD KILLED HIS
WIFE, THE PRINCIPAL BENEFICIARY. IN THAT CASE THE COURT HELD THAT,
NOTWITHSTANDING THE FACT THAT THE CONTINGENT BENEFICIARY HAD BEEN
ACQUITTED OF A CHARGE OF MURDER TO WHICH HIS DEFENSE WAS TEMPORARY
INSANITY, THE CIRCUMSTANCES OF THE CASE WOULD NOT CONSTITUTE SUCH AN
UNINTENTIONAL KILLING AS WOULD EXEMPT HIM FROM THE GENERAL RULE THAT "NO
MAN SHALL BE PERMITTED TO PROFIT BY HIS WRONGFUL ACT." SEE ALSO JOHN
HANCOCK MUTUAL LIFE INSURANCE CO. V. WILLIS ET AL., 312 F. SUPP. 1320
(E.D. MICH. 1970).
IT APPEARS FROM THE INFORMATION YOU HAVE FURNISHED US THAT MRS.
CLINE'S INSANITY WAS ONLY TEMPORARY. THIS VIEW IS SUPPORTED BY THE FACT
THAT FOLLOWING HER ACQUITTAL SHE WAS COMMITTED TO A MENTAL HOSPITAL
UNDER THE TEMPORARY CUSTODY OF THE STATE COMMISSIONER OF MENTAL HYGIENE
AND HOSPITALS FOR A PERIOD OF ONLY APPROXIMATELY TWO MONTHS, APPARENTLY
FOR THE PURPOSE OF HAVING PERFORMED THE MENTAL EXAMINATION REQUIRED BY
LAW IN VIRGINIA OF PERSONS ACQUITTED OF CRIMES ON GROUNDS OF INSANITY.
SEE CODE OF VIRGINIA, TITLE 19, SECT. 19.1-239(1). UPON COMPLETION OF
THIS TWO-MONTH PERIOD SHE WAS RETURNED TO COURT AND FOUND NOT INSANE OR
FEEBLE MINDED AND WAS RELEASED FROM CUSTODY.
IT IS OUR VIEW THAT ON THE BASIS OF THE PRESENT RECORD MRS. CLINE'S
CLAIM ADMITS OF TOO MUCH DOUBT TO WARRANT PAYMENT OF THE DEATH GRATUITY.
SEE LONGWILL V. UNITED STATES, 17 CT. CL. 288, 291 (1881) AND CHARLES
V. UNITED STATES, 19 CT. CL. 316 (1884).
ACCORDINGLY, PAYMENT ON THE VOUCHER IN FAVOR OF MRS. CLINE IS NOT
AUTHORIZED. THE VOUCHER WILL BE RETAINED IN THIS OFFICE.
B-172241 L/M, JUL 20, 1971
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
SECRETARY OF AGRICULTURE:
WE REFER FURTHER TO LETTER DATED MARCH 16, 1971, FROM MR. FRANK B.
ELLIOTT, ACTING ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING AN
ADVANCE DECISION AS TO THE CLAIM OF MR. BENJAMIN R. BECKHAM, AN EMPLOYEE
OF THE FARMERS HOME ADMINISTRATION, FOR REAL ESTATE EXPENSES IN
CONNECTION WITH A CHANGE OF OFFICIAL STATION.
THE LETTER INDICATES THAT MR. BECKHAM WAS TRANSFERRED FROM HUGOTON,
KANSAS, TO MANHATTAN, KANSAS, EFFECTIVE MAY 19, 1969, BUT THAT HIS HOUSE
AT HIS OLD OFFICIAL STATION WAS NOT SOLD UNTIL JUNE 4, 1970, OVER A YEAR
AFTER HIS TRANSFER. ON MARCH 30, 1970, MR. BECKHAM ENTERED INTO AN
IRREVOCABLE 120-DAY EXCLUSIVE LISTING CONTRACT FOR THE SALE OF HIS HOUSE
WITH RAMEY REAL ESTATE, THE EVENTUAL PURCHASER OF THE HOUSE.
IN THIS REGARD, MR. ELLIOTT ASKS WHETHER THE EXCLUSIVE AND
IRREVOCABLE LISTING CONTRACT BETWEEN MR. BECKHAM AND RAMEY REAL ESTATE,
IN EFFECT AT THE TIME THE ALLOWABLE ONE-YEAR PERIOD EXPIRED, COMES
WITHIN THE PURVIEW OF SECTION 4.1E(2) OF OFFICE OF MANAGEMENT AND BUDGET
CIRCULAR NO. A-56. THAT PROVISION, EFFECTIVE JUNE 26, 1969, PROVIDES,
IN PERTINENT PART, AS FOLLOWS:
"THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION
TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE
(INITIAL) YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT
THE NEW OFFICIAL STATION, EXCEPT THAT *** (2) AN ADDITIONAL PERIOD OF
TIME MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE AGENCY OR HIS
DESIGNEE WHEN HE DETERMINES THAT CIRCUMSTANCES JUSTIFYING THE EXCEPTION
EXIST WHICH PRECLUDED SETTLEMENT WITHIN THE INITIAL ONE-YEAR PERIOD OF
THE SALE/PURCHASE CONTRACTS OR LEASE TERMINATION ARRANGEMENT ENTERED
INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL ONE-YEAR PERIOD.
***"
WHERE AN EMPLOYEE ONLY PLACES HIS RESIDENCE ON THE MARKET OR PLACES
HIS NEEDS FOR A RESIDENCE WITH A REALTOR WITHIN THE INITIAL ONE-YEAR
PERIOD, WE HAVE HELD THAT THERE IS NO AUTHORITY TO GRANT AN EXTENSION OF
THE PERIOD, AS HE DID NOT ENTER INTO A CONTRACT FOR THE SALE OR PURCHASE
OF A RESIDENCE WITHIN SUCH PERIOD OF TIME. DECISION B-169699, MAY 19,
1970, COPY ENCLOSED.
THE TERMS OF THE LISTING OF MR. BECKHAM'S RESIDENCE WITH R. L.
RAMEY, A REAL ESTATE BROKER, PROVIDED THAT THE BROKER WOULD HAVE AN
EXCLUSIVE AND IRREVOCABLE RIGHT TO SELL IT FOR A PERIOD OF 120 DAYS.
NOWHERE IN THIS BROKERAGE AGREEMENT IS THERE PROVISION FOR SALE TO THE
BROKER HIMSELF. WE MUST CONCLUDE, THEREFORE, THAT THE AGREEMENT DID NOT
CONTEMPLATE THE SALE OF THE RESIDENCE TO R. L. RAMEY REAL ESTATE, AND
THAT IT MAY NOT BE CONSIDERED A CONTRACT FOR THE SALE OF A RESIDENCE
WITHIN THE CONTEMPLATION OF SECTION 4.1E(2) OF THE REGULATIONS. IT
FOLLOWS THAT NO AUTHORITY EXISTED ON THE BASIS OF THAT CONTRACT TO GRANT
HIM AN EXTENSION OF TIME FOR COMPLETION OF THE SALE, SO AS TO PERMIT
REIMBURSEMENT OF SALE EXPENSES.
IN HIS LETTER OF JULY 29, 1970, ADDRESSED TO OUR OFFICE (ENCLOSED
WITH MR. ELLIOTT'S LETTER), MR. BECKHAM REFERS TO HIS WRITTEN REQUEST
FOR AN EXTENSION OF THE PRESCRIBED ONE-YEAR PERIOD MADE ON MAY 7, 1970,
TO THE STATE DIRECTOR, FARMERS HOME ADMINISTRATION, TOPEKA, KANSAS, AND
THE DENIAL OF THE REQUEST BY MEMORANDUM OF THE DIRECTOR, BUSINESS
SERVICES DIVISION, FARMERS HOME ADMINISTRATION, WASHINGTON, D. C., DATED
JUNE 30, 1970. MR. BECKHAM IS OF THE OPINION THAT IF HE HAD RECEIVED A
PROMPT DENIAL OF HIS REQUEST, HE WOULD HAVE BEEN ABLE TO CONCLUDE THE
SALE OF HIS RESIDENCE WITHIN THE PRESCRIBED PERIOD, AND, THEREFORE,
REIMBURSEMENT OF THE CLAIMED EXPENSES SHOULD BE ALLOWED.
IN VIEW OF THE PROVISIONS OF SECTION 4.1E(2) OF THE REGULATIONS, IT
IS OUR OPINION THAT EVEN WHERE IT IS SHOWN THAT THERE IS A LACK OF
TIMELY ADMINISTRATIVE ACTION, THERE IS NO LEGAL BASIS FOR REIMBURSEMENT
OF THE EXPENSES IN QUESTION.
B-163758, MAY 6, 1971
HEADNOTES-UNAVAILABLE
SUBJECT:
USE OF IMPREST FUNDS TO PAY TRANSPORTATION CHARGES ON SMALL DOMESTIC
FREIGHT SHIPMENTS AND REDELEGATION OF AUTHORITY TO APPROVE USE OF
COMMERCIAL PAPER
TO THE HEADS OF DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AND OTHERS
CONCERNED:
THE GENERAL ACCOUNTING OFFICE CONCURS IN THE JOINT AGENCY
TRANSPORTATION STUDY RECOMMENDATIONS THAT DEPARTMENTS, AGENCIES, AND
OTHER ESTABLISHMENTS OF THE U. S. GOVERNMENT BE AUTHORIZED TO USE
IMPREST FUNDS FOR THE PAYMENT OF TRANSPORTATION CHARGES NOT EXCEEDING
$25 ON DOMESTIC FREIGHT SHIPMENTS MOVED ON COMMERCIAL BILLS OF LADING
AND THAT HEADS OF DEPARTMENTS, AGENCIES, AND OTHER ESTABLISHMENTS BE
PERMITTED TO REDELEGATE THEIR DISCRETIONARY AUTHORITY TO APPROVE THE USE
OF COMMERCIAL FORMS AND PROCEDURES FOR SUCH SHIPMENTS.
BACKGROUND
IN FEBRUARY 1969, DISCRETIONARY AUTHORITY WAS GRANTED TO THE HEAD OF
A DEPARTMENT, AGENCY, OR OTHER ESTABLISHMENT OF THE U. S. GOVERNMENT TO
APPROVE, WHERE HE DETERMINED IT MORE EFFICIENT AND ECONOMICAL, THE USE
OF COMMERCIAL FORMS AND PROCEDURES, RATHER THAN GOVERNMENT BILL OF
LADING FORMS AND PROCEDURES, IN PROCURING TRANSPORTATION FOR PARTICULAR
TYPES OF SMALL SHIPMENTS. THIS AUTHORITY WAS SUBJECT TO CERTAIN
RESTRICTIONS, THE MAJOR ONE BEING THAT THE TRANSPORTATION CHARGES
ORDINARILY NOT EXCEED $25 PER SHIPMENT.
THIS USE OF COMMERCIAL PAPER ON SMALL SHIPMENTS STIMULATED AN
INTEREST IN SIMPLIFYING PROCEDURES FOR PAYING THE RELATED TRANSPORTATION
CHARGES. INTERESTED AGENCIES HANDLED A LARGE NUMBER OF SMALL SHIPMENTS
WITH FREIGHT CHARGES GENERALLY UNDER $25 AND IN MOST INSTANCES IN SUCH
SMALL DOLLAR AMOUNTS THAT IT APPEARED UNECONOMICAL TO FOLLOW ESTABLISHED
BILLING AND PAYMENT PROCEDURES.
ADVANTAGE OF CASH PAYMENT
THE CASH PAYMENT OF TRANSPORTATION CHARGES FOR SMALL SHIPMENTS IS A
NATURAL EXTENSION OF THE USE OF COMMERCIAL FORMS AND PROCEDURES. THE
USE OF CASH SHOULD MATERIALLY REDUCE THE PAPER WORK OF BOTH THE
GOVERNMENT AND THE CARRIER INDUSTRY SINCE THERE WOULD BE NO NEED FOR THE
PREPARATION OF GOVERNMENT BILL OF LADING FORMS OR THE PUBLIC VOUCHER FOR
TRANSPORTATION CHARGES; THE DETAILED PROCESSING OF CARRIER VOUCHERS FOR
PAYMENT; AND THE ISSUANCE AND MAILING OF CHECKS.
APPLICATION OF PROCEDURES
DEPARTMENTS, AGENCIES, AND OTHER ESTABLISHMENTS THAT UTILIZE THE
ABOVE-CITED AUTHORITY TO APPROVE THE USE OF COMMERCIAL PAPER ON SMALL
SHIPMENTS HAVING TRANSPORTATION CHARGES NOT EXCEEDING $25 ARE HEREBY
AUTHORIZED TO MAKE PAYMENT OF THOSE CHARGES FROM IMPREST FUNDS. THESE
PAYMENTS SHALL BE BASED ON THE USE OF THE COMMERCIAL FORMS AND
PROCEDURES CURRENTLY PRESCRIBED IN 5 GAO 3017 AND SUBJECT TO THE
FOLLOWING FURTHER LIMITATIONS.
1. ADOPTION OF THE CASH PAYMENT PROCEDURE SHALL BE OPTIONAL WITH THE
DEPARTMENT, AGENCY, OR ESTABLISHMENT AND MUST BE CONCURRED IN BY THE
CARRIER INVOLVED.
2. IMPREST FUNDS SHALL NOT BE USED TO PAY FOR INTERNATIONAL
SHIPMENTS AND FOR HOUSEHOLD GOODS VAN SHIPMENTS.
3. PAYMENT OF FREIGHT CHARGES PRIOR TO PERFORMANCE OF THE SERVICE IS
PROHIBITED UNDER CURRENT LEGISLATION. HOWEVER, IF LEGISLATION IS
ENACTED, AS RECOMMENDED BY THE JOINT AGENCY TRANSPORTATION STUDY, TO
EXEMPT TRANSPORTATION PAYMENTS FROM THE SCOPE OF THE STATUTE PROHIBITING
ADVANCE PAYMENT (31 U.S.C. 529), THE GENERAL ACCOUNTING OFFICE WILL
CIRCULARIZE INSTRUCTIONS COVERING THE AUTHORITY TO PREPAY FREIGHT
CHARGES FOR SMALL SHIPMENTS.
4. THE IMPREST FUND DISBURSEMENTS FOR TRANSPORTATION SPECIFIED
HEREIN SHALL GENERALLY BE MADE IN ACCORDANCE WITH THE PROVISIONS OF 7
GAO 27.
IN ADDITION, AUTHORITY IS GRANTED TO THE HEAD OF A DEPARTMENT,
AGENCY, OR OTHER ESTABLISHMENT TO REDELEGATE TO SUCH OFFICIAL OR
OFFICIALS AS HE MAY DESIGNATE WITHIN HIS ORGANIZATION THE AUTHORITY TO
APPROVE THE USE, WHERE DETERMINED MORE EFFICIENT AND ECONOMICAL, OF
COMMERCIAL FORMS AND PROCEDURES FOR SMALL FREIGHT SHIPMENTS ON WHICH THE
TRANSPORTATION CHARGES DO NOT EXCEED $25. THE REDELEGATED AUTHORITY
ALSO SHALL BE SUBJECT TO THE LIMITATIONS AND PROCEDURES CURRENTLY STATED
IN 5 GAO 3017.
THIS REDELEGATION OF AUTHORITY SHOULD RELIEVE AGENCY HEADS AND
INTERVENING LAYERS OF THE PAPER WORK BURDEN INVOLVED IN APPROVING THIS
USE OF COMMERCIAL PAPER AND PLACE THE DECISIONMAKING AUTHORITY CLOSER TO
THE SHIPPING ACTIVITIES WHERE THE BENEFITS AND ECONOMIES INHERENT IN THE
USE OF SUCH FORMS AND PROCEDURES ARE MOST APPARENT.
JANUARY 7, 1974
HEADS OF DEPARTMENTS, AGENCIES, AND OTHERS CONCERNED:
SUBJECT: ADVANCE PAYMENT OF FREIGHT TRANSPORTATION CHARGES FROM
IMPREST FUNDS
THE TRANSPORTATION PAYMENT ACT OF 1972, 86 STAT. 1163, AMENDED
SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED (49 U.S.C.
66), BY ADDING THE FOLLOWING NEW SUBSECTION TO THE SECTION:
"(B) PURSUANT TO REGULATIONS PRESCRIBED BY THE HEAD OF A GOVERNMENT
AGENCY OR HIS DESIGNEE AND IN CONFORMITY WITH SUCH STANDARDS AS SHALL BE
PROMULGATED JOINTLY BY THE SECRETARY OF THE TREASURY AND THE COMPTROLLER
GENERAL OF THE UNITED STATES, BILLS FOR PASSENGER OR FREIGHT
TRANSPORTATION SERVICES TO BE FURNISHED THE UNITED STATES BY ANY CARRIER
OR FORWARDER MAY BE PAID IN ADVANCE OF COMPLETION OF THE SERVICES,
WITHOUT REGARD TO SECTION 3648 OF THE REVISED STATUTES, AS AMENDED (31
U.S.C. 529): PROVIDED, THAT OF LADING, OR EQUIVALENT DOCUMENT COVERING
THE SERVICE INVOLVED, SUCH CARRIER OR FORWARDER HAS ISSUED THE USUAL
TICKET, RECEIPT, BILL SUBJECT TO LATER RECOVERY BY DEDUCTION OR
OTHERWISE OF ANY PAYMENTS MADE FOR ANY SERVICES NOT RECEIVED AS ORDERED
BY THE UNITED STATES."
JOINT STANDARDS FOR THE PAYMENT OF CHARGES FOR TRANSPORTATION ON
BEHALF OF THE UNITED STATES WERE ISSUED ON NOVEMBER 5, 1973 (4 CFR 56).
AUTHORITY IS THEREFORE GRANTED TO THE DEPARTMENT, AGENCY, OR OTHER
ESTABLISHMENT THAT UTILIZES THE DISCRETIONARY AUTHORITY OUTLINED IN 5
GAO 3017, AND/OR THE CIRCULAR LETTER DATED MAY 6, 1971 (B-163758), FOR
THE USE OF COMMERCIAL FORMS AND PROCEDURES IN PROCURING TRANSPORTATION
SERVICE FOR CERTAIN TYPES OF SMALL SHIPMENTS AND FOR THE PAYMENT OF
CHARGES FOR THAT SERVICE FROM IMPREST FUNDS TO MAKE SUCH PAYMENT IN CASH
AT ORIGIN OR DESTINATION IN ADVANCE OF COMPLETION OF SERVICE UPON
PRESENTATION BY THE CARRIER OR FORWARDER OF THE PROPER DOCUMENT AS CITED
ABOVE. HOWEVER, THOSE BILLS OF PAYEES DEFINED IN 4 CFR 56.4 SHALL NOT
BE PAID UPON PRESENTATION UNLESS, AFTER REVIEW OF THE FACTS AND IN THE
ABSENCE OF OBJECTION BY THE GENERAL ACCOUNTING OFFICE, IT IS DETERMINED
ADMINISTRATIVELY THAT THE BEST INTERESTS OF THE UNITED STATES WILL NOT
BE JEOPARDIZED BY SUCH PAYMENT.
THIS AUTHORITY TO MAKE ADVANCE PAYMENT OF FREIGHT TRANSPORTATION
CHARGES SHALL BE APPLICABLE ONLY TO SHIPMENTS MADE IN ACCORDANCE WITH
THOSE LIMITATIONS AND PROCEDURES STATED IN 5 GAO 3017, AS AMENDED, THAT
ARE NOT SUPERSEDED BY THIS LETTER. ALSO, THE USE OF CASH FOR THIS
PURPOSE SHALL BE OPTIONAL AND SHALL BE IMPLEMENTED ONLY UPON MUTUAL
AGREEMENT BETWEEN THE AGENCY AND THE CARRIER OR FORWARDER INVOLVED.
FURTHER, IT IS INCUMBENT UPON EACH DEPARTMENT, AGENCY, OR OTHER
ESTABLISHMENT THAT PROPOSES TO UTILIZE THIS AUTHORITY TO DEVELOP
SUFFICIENT CONTROLS AND PROCEDURES TO PRECLUDE DUPLICATE PAYMENTS.
B-172014 L/M, MAR 11, 1971
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
MAJOR W. G. REDDICK, DEPARTMENT OF THE NAVY:
FURTHER REFERENCE IS MADE TO YOUR LETTER FORWARDED TO THIS OFFICE BY
HEADQUARTERS UNITED STATES MARINE CORPS LETTER DATED FEBRUARY 23, 1971,
REFERENCE CD-PBF 7220/7, REQUESTING AN ADVANCE DECISION AS TO WHETHER
PAYMENT IS AUTHORIZED ON AN ENCLOSED VOUCHER COVERING THE SIX MONTHS'
DEATH GRATUITY IN THE CASE OF SERGEANT MAJOR THOMAS G. ELDREDGE, 29 38
08, UNITED STATES MARINE CORPS, WHO DIED MAY 17, 1970. THE VOUCHER IS
STATED IN FAVOR OF MRS. JEAN C. ELDREDGE, THE DECEDENT'S WIDOW AND
DESIGNATED BENEFICIARY.
YOU SAY THAT SERGEANT MAJOR ELDREDGE'S DEATH RESULTED FROM GUNSHOT
WOUNDS INFLICTED BY HIS WIFE AT THEIR HOME.
IT IS REPORTED THAT ON FEBRUARY 23, 1970, MRS. ELDREDGE AND HER
12-YEAR OLD SON BY A PREVIOUS MARRIAGE, STEPHEN (STEVEN) K. THOMAS, WHO
APPARENTLY LIVED WITH THE ELDREDGES, WERE HOSPITALIZED OVERNIGHT
FOLLOWING AN ASSAULT UPON THEM BY SERGEANT MAJOR ELDREDGE AND THAT
FOLLOWING HER RELEASE FROM THE HOSPITAL ON FEBRUARY 24, 1970, MRS.
ELDREDGE PURCHASED THE HAND GUN WHICH WAS LATER USED TO KILL HER
HUSBAND. IT APPEARS THAT THE WEAPON WAS RETAINED BY STEPHEN IN HIS ROOM
UNTIL THE NIGHT BEFORE THE SHOOTING.
YOUR LETTER DISCLOSES THAT ON THE NIGHT BEFORE THE SHOOTING STEPHEN
RAN FROM THE HOUSE AFTER SERGEANT MAJOR ELDREDGE THREW AN OBJECT AT HIM
DURING AN ARGUMENT AND THAT AFTER SERGEANT MAJOR ELDREDGE FELL ASLEEP
MRS. ELDREDGE BROUGHT STEPHEN BACK INTO THE HOUSE, AT WHICH TIME HE GAVE
THE WEAPON TO MRS. ELDREDGE. IT IS STATED THAT STEPHEN AWOKE THE
FOLLOWING MORNING TO THE SOUND OF FURNITURE BEING THROWN. HE ATTEMPTED
TO INTERFERE BUT WAS EJECTED FROM THE HOUSE BY SERGEANT MAJOR ELDREDGE.
HE THEN OBTAINED A BROOM HANDLE AND REENTERED THE HOUSE WHERE HE
OBSERVED HIS MOTHER ON THE FLOOR BEING STRUCK. SERGEANT MAJOR ELDREDGE
WRESTED THE BROOM HANDLE FROM STEPHEN, STRUCK HIM WITH IT AND AGAIN
EJECTED HIM FROM THE HOUSE.
IT IS STATED FURTHER THAT MRS. ELDREDGE FOLLOWED STEPHEN FROM THE
HOUSE AT WHICH TIME SERGEANT MAJOR ELDREDGE ALLEGEDLY STATED TO STEPHEN
IN MRS. ELDREDGE'S PRESENCE, "YOU BETTER LEAVE BECAUSE I'M GOING TO KILL
YOUR MOTHER." SERGEANT MAJOR ELDREDGE THEN TURNED AND STRUCK MRS.
ELDREDGE, KNOCKING HER AGAINST A PORCH. SHE THEN PRODUCED THE REVOLVER
AND FIRED TWICE. SHE WAS STRUCK AGAIN, AND FIRED A THIRD TIME, CAUSING
SERGEANT MAJOR ELDREDGE TO FALL TO THE GROUND, WHEREUPON MRS. ELDREDGE
DISCHARGED THE WEAPON INTO HIM UNTIL IT WAS EMPTY.
AS A RESULT OF THIS HOMICIDE, MRS. ELDREDGE WAS INDICTED AND TRIED ON
CRIMINAL CHARGED IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
SOUTH CAROLINA, CHARLESTON DIVISION. VERDICTS OF NOT GUILTY WERE
RETURNED TO CHARGES OF MURDER IN THE FIRST DEGREE, MURDER IN THE SECOND
DEGREE AND VOLUNTARY MANSLAUGHTER. WE UNDERSTAND THAT MRS. ELDREDGE'S
DEFENSE TO THE CHARGES WAS SELF-DEFENSE.
THIS OFFICE HAS REPEATEDLY HELD THAT IT IS AGAINST PUBLIC POLICY TO
PERMIT THE PAYMENT BY THE GOVERNMENT OF BENEFITS TO A BENEFICIARY WHO
FELONIOUSLY KILLS THE PERSON UPON WHOSE DEATH SUCH PAYMENTS BECOME DUE.
SEE 34 COMP. GEN. 103, 104, AND CASES CITED THEREIN.
HOWEVER, WE DO NOT BELIEVE THAT RULE IS FOR APPLICATION IN THE
CIRCUMSTANCES OF THIS CASE. THE PREVIOUS ASSAULTS MADE UPON MRS.
ELDREDGE AND HER SON BY THE DECEASED, THE ALLEGED ORAL THREAT ON MRS.
ELDREDGE'S LIFE MADE IN HER PRESENCE AND THE DECEASED'S ASSAULT UPON HER
WHICH WAS TAKING PLACE AT THE TIME OF THE SHOOTING, REASONABLY SUPPORT
THE VIEW THAT MRS. ELDREDGE FELT HER LIFE TO BE IN GRAVE DANGER AND
THAT NO AVENUE OF ESCAPE WAS OPEN TO HER AT THE TIME OF THE SHOOTING.
THIS VIEW IS SUPPORTED BY HER ACQUITTAL ON ALL CHARGES. ACCORDINGLY, IT
IS CONCLUDED THAT THIS HOMICIDE WAS EXCUSABLE BY REASON OF SELF-DEFENSE
AND WAS NOT A FELONIOUS KILLING WHICH WOULD BAR MRS. ELDREDGE FROM
RECEIVING THE SIX MONTHS' DEATH GRATUITY.
THE VOUCHER SUBMITTED WITH YOUR LETTER IS RETURNED HEREWITH, PAYMENT
BEING AUTHORIZED, IF OTHERWISE CORRECT.
B-171196 L/M, JAN 11, 1971
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
CAPTAIN JAMES D. CARGILL, USAF, HEADQUARTERS UNITED STATES AIR FORCE:
WE REFER FURTHER TO YOUR LETTER DATED SEPTEMBER 23, 1970, WITH
ATTACHMENTS, FORWARDED HERE BY LETTER OF NOVEMBER 2, 1970, FROM THE
OFFICE OF THE DEPUTY ASSISTANT COMPTROLLER FOR ACCOUNTING AND FINANCE,
HEADQUARTERS UNITED STATES AIR FORCE, IN WHICH YOU REQUEST AN ADVANCE
DECISION AS TO THE PROPRIETY OF PAYMENT OF BASIC ALLOWANCE FOR QUARTERS
TO CHAPLAIN (MAJOR) J. A. DOONAN, 000-00-1173. YOUR SUBMISSION WAS
APPROVED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE
COMMITTEE AS AIR FORCE REQUEST NO. DO-AF-1103.
AFTER ARRIVAL AT HIS OVERSEAS STATION, YOU SAY CHAPLIN DOONAN WAS
ASSIGNED FAMILY QUARTERS WITH HIS DEPENDENT MOTHER, EFFECTIVE JULY 16,
1968. ALSO YOU SAY THAT FOR MEDICAL REASONS SHE RETURNED TO THE
CONTINENTAL UNITED STATES ON SEPTEMBER 28, 1968. THE BASE COMMANDER,
CITING TABLE 1, RULE 2, AFR 30-6, RELATING TO THE ASSIGNMENT TO BACHELOR
CHAPLAINS OF FAMILY HOUSING FOR THE PERFORMANCE OF THEIR PROFESSIONAL
DUTIES, THEN CERTIFIED THAT CHAPLAIN DOONAN NEEDED TO BE ASSIGNED TO
GOVERNMENT QUARTERS WHICH WOULD AFFORD HIM THE PRIVACY REQUIRED TO
PERFORM HIS PROFESSIONAL AND PASTORAL DUTIES. WE ARE TOLD THAT SINCE
THERE WERE NO SUITABLE BACHELOR OFFICER QUARTERS AVAILABLE, THE OFFICER
WAS ASSIGNED FAMILY-TYPE GOVERNMENT QUARTERS. IT APPEARS THAT THERE HAS
BEEN NO RENTAL CHARGE FOR THIS HOUSING.
CHAPLAIN DOONAN HAS MADE APPLICATION FOR BASIC ALLOWANCE FOR QUARTERS
FOR HIS DEPENDENT, EFFECTIVE SEPTEMBER 28, 1968, THE DATE OF HIS
MOTHER'S DEPARTURE FROM HIS OVERSEAS STATION. YOU EXPRESS DOUBT
REGARDING HIS ENTITLEMENT TO THE ALLOWANCE AND YOU QUESTION "WHETHER A
BACHELOR CHAPLAIN (PRIEST) CAN BE ASSIGNED FAMILY-TYPE QUARTERS (WHEN IT
IS DETERMINED NECESSARY TO DO SO BY THE INSTALLATION COMMANDER), SO THAT
HE MAY PERFORM HIS PROFESSIONAL AND PASTORAL DUTIES AS A BACHELOR
CHAPLAIN; AND, ALSO RECEIVE BAQ ON BEHALF OF HIS DEPENDENT MOTHER WHO
DOES NOT RESIDE IN GOVERNMENT QUARTERS."
SECTION 403(A) OF TITLE 37, UNITED STATES CODE, STATES THAT, EXCEPT
AS OTHERWISE PROVIDED BY LAW, A MEMBER OF A UNIFORMED SERVICE ENTITLED
TO RECEIVE BASIC PAY IS ENTITLED TO A BASIC ALLOWANCE FOR QUARTERS AT
THE RATE THERE PRESCRIBED. SUBSECTION (B) STATES, HOWEVER, THAT, EXCEPT
AS OTHERWISE PROVIDED, A MEMBER OF A UNIFORMED SERVICE WHO IS ASSIGNED
TO QUARTERS OF THE UNITED STATES, OR A HOUSING FACILITY UNDER THE
JURISDICTION OF A UNIFORMED SERVICE, APPROPRIATE TO HIS GRADE, RANK, OR
RATING AND ADEQUATE FOR HIMSELF, AND HIS DEPENDENTS, IF WITH DEPENDENTS,
IS NOT ENTITLED TO A BASIC ALLOWANCE FOR QUARTERS.
SECTION 403(D) PROVIDES THAT A MEMBER WHO IS ASSIGNED TO GOVERNMENT
QUARTERS MAY NOT BE DENIED THE BASIC ALLOWANCE FOR QUARTERS IF, BECAUSE
OF ORDERS OF COMPETENT AUTHORITY, HIS DEPENDENTS ARE PREVENTED FROM
OCCUPYING THOSE QUARTERS.
SECTION 403 OF EXECUTIVE ORDER NO. 11157, DATED JUNE 22, 1964, AS
AMENDED, ISSUED UNDER THE ABOVE AUTHORITY, PROVIDES IN PERTINENT PART,
THAT ANY QUARTERS OR HOUSING FACILITIES UNDER THE JURISDICTION OF ANY OF
THE UNIFORMED SERVICES "IN FACT OCCUPIED WITHOUT PAYMENT OF RENTAL
CHARGES (A) BY A MEMBER AND HIS DEPENDENTS, OR (B) AT HIS PERMANENT
STATION BY A MEMBER WITHOUT DEPENDENTS *** SHALL BE DEEMED TO HAVE BEEN
ASSIGNED TO SUCH MEMBER AS APPROPRIATE AND ADEQUATE QUARTERS, AND NO
BASIC ALLOWANCE FOR QUARTERS SHALL ACCRUE TO SUCH MEMBER UNDER SUCH
CIRCUMSTANCES," WITH EXCEPTIONS NOT HERE INVOLVED.
SECTION 404 OF THE EXECUTIVE ORDER PROVIDES THAT WHEN ADEQUATE
QUARTERS FOR DEPENDENTS ARE NOT AVAILABLE FOR ASSIGNMENT AT HIS
PERMANENT STATION TO A MEMBER WITH DEPENDENTS, HE MAY OCCUPY QUARTERS OF
THE UNITED STATES DESIGNATED FOR MEMBERS WITHOUT DEPENDENTS WITHOUT
AFFECTING HIS RIGHT TO RECEIVE PAYMENT OF BASIC ALLOWANCE FOR QUARTERS,
IF PERMITTED OR REQUIRED TO OCCUPY QUARTERS AT SUCH STATION. THE
SECTION FURTHER PROVIDES THAT UNDER SUCH CIRCUMSTANCES, A MEMBER MAY NOT
OCCUPY QUARTERS OF THE UNITED STATES WHICH EXCEED THE MINIMUM STANDARDS
FOR MEMBERS OF HIS GRADE WITHOUT DEPENDENTS, AS PRESCRIBED BY THE
SECRETARY CONCERNED, UNLESS THE ONLY QUARTERS AVAILABLE (A) EXCEED THE
MINIMUM STANDARDS, AND (B) ARE MADE AVAILABLE FOR JOINT OCCUPANCY WITH
OTHER MEMBERS.
DEPARTMENT OF DEFENSE INSTRUCTION NO. 4165.44, DATED AUGUST 16, 1968,
ESTABLISHES POLICIES GOVERNING ASSIGNMENT TO FAMILY HOUSING UNITS AT
MILITARY INSTALLATIONS AND APPLIES TO ALL DEPARTMENT OF DEFENSE
COMPONENTS. UNDER SUBSECTION III-F, A FAMILY UNIT MAY BE ASSIGNED TO A
CHAPLAIN, NOT OTHERWISE ENTITLED TO FAMILY QUARTERS, PROVIDED MULTIPLE
OCCUPANCY IS EFFECTED WHERE THERE IS MORE THAN ONE SUCH CHAPLAIN, AND A
DETERMINATION IS MADE BY THE COMMANDER AS TO THE NEED OF THE CHAPLAIN
FOR SUCH HOUSING TO EFFECTIVELY PERFORM HIS COUNSELLING AND GUIDANCE
SERVICES.
AIR FORCE REGULATION NO. 30-6, ALSO DATED AUGUST 16, 1968, PROVIDES
COMMANDERS WITH CRITERIA FOR DETERMINING THE ELIGIBILITY OF PERSONNEL
FOR OCCUPANCY OF FAMILY HOUSING AND ESTABLISHES PROCEDURES FOR FAMILY
HOUSING ASSIGNMENTS. RULE 2, TABLE 1 (ASSIGNMENT TO FAMILY HOUSING)
INDICATES THAT WHEN A BACHELOR CHAPLAIN REQUIRES FAMILY HOUSING TO
PERFORM HIS PROFESSIONAL AND PASTORAL DUTIES AND FAMILY HOUSING IS
AVAILABLE, THEN THE INSTALLATION COMMANDER MAY ASSIGN FAMILY HOUSING
WHEN HE HAS CONFIRMED THE NEED OF THE CHAPLAIN FOR SUCH HOUSING. THIS
RULE ALSO REQUIRES MULTIPLE OCCUPANCY WHERE THERE IS MORE THAN ONE SUCH
CHAPLAIN. RULE 8, TABLE 4 (RETENTION/TERMINATION OF FAMILY HOUSING) OF
THE REGULATION STATES THAT WHEN AN INDIVIDUAL WHO WAS ASSIGNED FAMILY
HOUSING NO LONGER LIVES PERMANENTLY WITH DEPENDENTS THEN THE
INSTALLATION COMMANDER WILL AUTOMATICALLY TERMINATE HIS FAMILY HOUSING.
THE ABOVE DOD INSTRUCTION AND THE AIR FORCE REGULATION ESTABLISH
POLICIES AND CRITERIA FOR THE ASSIGNMENT OF FAMILY HOUSING UNITS AT
MILITARY INSTALLATIONS, BUT THEY DO NOT PURPORT TO GOVERN PAYMENT OF
QUARTERS ALLOWANCES TO MEMBERS SERVING AT SUCH INSTALLATIONS. PARAGRAPH
3C(4) OF THE AIR FORCE REGULATION SPECIFICALLY PROVIDES THAT THE
INSTALLATION COMMANDER WILL AUTHORIZE BAQ IN ACCORDANCE WITH PART THREE,
DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL
WHEN ADEQUATE HOUSING IS NOT AVAILABLE.
PARAGRAPH 30221C OF THAT MANUAL CONTAINS PROVISIONS SIMILAR TO
SECTION 404 OF THE EXECUTIVE ORDER WITH RESPECT TO THE OCCUPANCY OF
QUARTERS WHICH DO NOT EXCEED MINIMUM STANDARDS WITHOUT AFFECTING THE
MEMBER'S RIGHT TO BAQ. PARAGRAPH 30221E PROVIDES, HOWEVER, THAT
ASSIGNMENT OF AN ADDITIONAL ROOM (IN EXCESS OF MINIMUM STANDARDS) TO A
CHAPLAIN FOR SPIRITUAL PURPOSES DOES NOT AFFECT HIS RIGHT TO BASIC
ALLOWANCE FOR QUARTERS. THE ROOM, IT STATES, MUST BE USED FOR OFFICIAL
DUTY AND NOT AS LIVING QUARTERS.
WHERE A MEMBER IS ASSIGNED ADEQUATE QUARTERS FOR HIS DEPENDENTS, HE
IS NOT ENTITLED TO A QUARTERS ALLOWANCE UNLESS THE DEPENDENTS ARE
PREVENTED FROM RESIDING WITH THE MEMBER BY ORDERS OF COMPETENT
AUTHORITY. WHERE DEPENDENTS DO NOT RESIDE WITH THE MEMBER FOR PERSONAL
REASONS, THE GOVERNMENT HAS MET ITS OBLIGATION BY PROVIDING ADEQUATE
HOUSING WITHOUT CHARGE WHICH THEY COULD OCCUPY WITH THE MEMBER.
IN DECISION B-153135, FEBRUARY 11, 1964, COPY ATTACHED, BASIC
ALLOWANCE FOR QUARTERS WAS DENIED WHERE A MEMBER AND DEPENDENTS HAD
UTILIZED FAMILY QUARTERS AT AN OVERSEAS STATION BUT, UPON RECOMMENDATION
OF MEDICAL AUTHORITIES, THE DEPENDENTS RETURNED TO THE UNITED STATES
WHERE THEY RESIDED IN PRIVATE QUARTERS AND THE MEMBER CONTINUED TO
OCCUPY FAMILY-TYPE GOVERNMENT QUARTERS.
BECAUSE OF HER PHYSICAL CONDITION, CHAPLAIN DOONAN'S MOTHER WHO HAD
RESIDED WITH HIM IN GOVERNMENT FAMILY QUARTERS (WHOSE ADEQUACY IS NOT
QUESTIONED) AT HIS OVERSEAS STATION, LEFT THERE ON SEPTEMBER 28, 1968,
AND THEREAFTER HAS RESIDED IN PRIVATE QUARTERS IN THE UNITED STATES. AS
SEPARATION OF THE DEPENDENT MOTHER AND HER SON DID NOT RESULT FROM
ORDERS OF COMPETENT MILITARY AUTHORITY OR BECAUSE OF THE LACK OF
ADEQUATE QUARTERS, BUT FROM PERSONAL REASONS, HOWEVER COMPELLING, THERE
IS NO DUTY TO SUPPLY THE MEMBER'S DEPENDENT WITH OTHER GOVERNMENT
HOUSING OR, INSTEAD, TO PAY THE MEMBER A BASIC ALLOWANCE FOR QUARTERS.
SUBSEQUENT TO HIS MOTHER'S DEPARTURE FROM HIS STATION, AND IN ACCORD
WITH RULE 2, TABLE 1 OF AIR FORCE REGULATION NO. 30-6, CHAPLAIN DOONAN
HAS BEEN ALLOWED TO RETAIN FAMILY HOUSING, WHICH OTHERWISE, HE WOULD
HAVE BEEN REQUIRED TO SURRENDER UPON HIS MOTHER'S DEPARTURE, IN
OBEDIENCE TO RULE 8, TABLE 4, OF THE SAME REGULATION. THE FACT THAT THE
MEMBER HAS BEEN PERMITTED TO CONTINUE HIS OCCUPANCY OF FAMILY QUARTERS,
BECAUSE OF HIS PROFESSIONAL AND PASTORAL DUTIES, AND HAS NOT BEEN
REQUIRED TO MOVE TO BACHELOR OFFICER QUARTERS, AFFORDS NO BASIS FOR
ENTITLEMENT TO BASIC ALLOWANCE FOR QUARTERS, AS HE OCCUPIES PUBLIC
FAMILY QUARTERS - WHICH PRESUMABLY ARE ADEQUATE FOR HIMSELF AND HIS
MOTHER - WITHOUT RENTAL PAYMENT, AND IN SUCH CIRCUMSTANCES PAYMENT OF A
QUARTERS ALLOWANCE IS PRECLUDED BY 37 U.S.C. 403(B) AS IMPLEMENTED BY
SECTIONS 403 AND 404 OF E.O. NO. 11157.
UNDER PARAGRAPH 30221.E OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND
ALLOWANCES ENTITLEMENTS MANUAL A CHAPLAIN IS NOT PRECLUDED FROM
RECEIVING A QUARTERS ALLOWANCE FOR DEPENDENTS WHERE THE CHAPLAIN'S
BACHELOR QUARTERS INCLUDE AN ADDITIONAL ROOM WHICH IS USED FOR SPIRITUAL
PURPOSES, EVEN THOUGH THE ROOM MIGHT OTHERWISE BE CONSIDERED AS
AFFORDING THE CHAPLAIN QUARTERS WHICH EXCEED THE MINIMUM STANDARDS FOR
MEMBERS OF HIS GRADE WITHOUT DEPENDENTS. THIS PROVISION DOES NOT,
HOWEVER, PROVIDE AUTHORITY FOR PAYMENT OF A QUARTERS ALLOWANCE WHERE
ADEQUATE FAMILY QUARTERS ARE PROVIDED, AS IN THE INSTANT CASE.
ACCORDINGLY, CHAPLAIN DOONAN IS NOT ENTITLED TO PAYMENT OF BASIC
ALLOWANCE FOR QUARTERS FOR THE PERIOD COMMENCING SEPTEMBER 28, 1968.
THE VOUCHER WHICH YOU ENCLOSED WILL BE RETAINED HERE.
B-170104 L/M, SEP 30, 1970
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
SECRETARY OF DEFENSE:
FURTHER REFERENCE IS MADE TO LETTER DATED JUNE 17, 1970, FROM THE
ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO
THE PROPER METHOD TO BE USED IN RECOMPUTING RETIRED PAY UNDER 10 U.S.C.
1401A AND 1402(A) FOR A MEMBER OF THE ARMED FORCES WHO HAS SERVED ON
ACTIVE DUTY FOR TWO YEARS SUBSEQUENT TO RETIREMENT. THREE ALTERNATE
SUGGESTED METHODS OF COMPUTATION ARE INCORPORATED IN THE QUESTION FOR
DECISION AS PRESENTED IN COMMITTEE ACTION NO. 442 OF THE MILITARY PAY
AND ALLOWANCE COMMITTEE. THAT QUESTION IS AS FOLLOWS:
"WHEN RECOMPUTING RETIRED PAY UNDER THE PROVISIONS OF 10 USC 1402(A)
FOR A MEMBER WHO HAS SERVED ON ACTIVE DUTY FOR 2 YEARS SUBSEQUENT TO
RETIREMENT, WHICH OF THE FOLLOWING METHODS SHOULD BE USED IN APPLYING
CONSUMER PRICE INDEX (CPI) INCREASES AUTHORIZED BY 10 USC 1401A?
"A. RETIRED PAY INCREASED BY ALL CPI ADJUSTMENTS WHICH HAVE BEEN
AUTHORIZED UNDER 10 USC 1401A(B) SUBSEQUENT TO THE EFFECTIVE DATE OF THE
ACTIVE DUTY PAY RATE UPON WHICH THE RECOMPUTED RETIRED PAY IS BASED.
"B. RETIRED PAY INCREASED BY ONLY THE PERCENT THAT THE APPLICABLE
BASE INDEX EXCEEDS THE INDEX FOR THE CALENDAR MONTH IMMEDIATELY
PRECEDING THE MONTH IN WHICH THE ACTIVE DUTY PAY RATE UPON WHICH RETIRED
PAY IS BASED BECAME EFFECTIVE.
"C. RETIRED PAY RECOMPUTED UPON THE APPLICABLE ACTIVE DUTY BASIC PAY
RATE ONLY WITHOUT INCREASING SUCH PAY BY ANY CPI INCREASE."
SUBSECTIONS (B), (C), (D) AND (E) OF 10 U.S.C. 1401A (AS AMENDED,
EFFECTIVE OCTOBER 31, 1969, BY PUBLIC LAW 91-179) ARE AS FOLLOWS:
"(B) THE SECRETARY OF DEFENSE SHALL DETERMINE MONTHLY THE PERCENT BY
WHICH THE INDEX HAS INCREASED OVER THAT USED AS THE BASIS (BASE INDEX)
FOR THE MOST RECENT ADJUSTMENT OF RETIRED PAY AND RETAINER PAY UNDER
THIS SUBSECTION. IF THE SECRETARY DETERMINES THAT, FOR THREE
CONSECUTIVE MONTHS, THE AMOUNT OF THE INCREASE IS AT LEAST 3 PER CENTUM
OVER THE BASE INDEX, THE RETIRED PAY AND RETAINER PAY OF MEMBERS AND
FORMER MEMBERS OF THE ARMED FORCES WHO BECOME ENTITLED TO THAT PAY
BEFORE THE FIRST DAY OF THE THIRD CALENDAR MONTH BEGINNING AFTER THE END
OF THOSE THREE MONTHS SHALL, EXCEPT AS PROVIDED IN SUBSECTION (C), BE
INCREASED, EFFECTIVE ON THAT DAY, BY THE PER CENTUM OBTAINED BY ADDING 1
PER CENTUM AND THE HIGHEST PER CENTUM OF INCREASE IN THE INDEX DURING
THOSE MONTHS, ADJUSTED TO THE NEAREST ONE-TENTH OF 1 PER CENTUM.
"(C) NOTWITHSTANDING SUBSECTION (B), IF A MEMBER OR FORMER MEMBER OF
AN ARMED FORCE BECOMES ENTITLED TO RETIRED PAY OR RETAINER PAY BASED ON
RATES OF MONTHLY BASIC PAY PRESCRIBED BY SECTION 203 OF TITLE 37 THAT
BECAME EFFECTIVE AFTER THE LAST DAY OF THE MONTH OF THE BASE INDEX, HIS
RETIRED PAY OR RETAINER PAY SHALL BE INCREASED ON THE EFFECTIVE DATE OF
THE NEXT ADJUSTMENT OF RETIRED PAY AND RETAINER PAY UNDER SUBSECTION (B)
ONLY BY THE PERCENT (ADJUSTED TO THE NEAREST ONE-TENTH OF 1 PERCENT)
THAT THE NEW BASE INDEX EXCEEDS THE INDEX FOR THE CALENDAR MONTH
IMMEDIATELY BEFORE THAT IN WHICH THE RATES OF MONTHLY BASIC PAY ON WHICH
HIS RETIRED PAY OR RETAINER PAY IS BASED BECAME EFFECTIVE.
"(D) IF A MEMBER OR FORMER MEMBER OF AN ARMED FORCE BECOMES ENTITLED
TO RETIRED PAY OR RETAINER PAY ON OR AFTER THE EFFECTIVE DATE OF AN
ADJUSTMENT OF RETIRED PAY AND RETAINER PAY UNDER SUBSECTION (B) BUT
BEFORE THE EFFECTIVE DATE OF THE NEXT INCREASE IN THE RATES OF MONTHLY
BASIC PAY PRESCRIBED BY SECTION 203 OF TITLE 37, HIS RETIRED PAY OR
RETAINER PAY SHALL BE INCREASED, EFFECTIVE ON THE DATE HE BECOMES
ENTITLED TO THAT PAY, BY THE PERCENT (ADJUSTED TO THE NEAREST ONE-TENTH
OF 1 PERCENT) THAT THE BASE INDEX EXCEEDS THE INDEX FOR THE CALENDAR
MONTH IMMEDIATELY BEFORE THAT IN WHICH THE RATES OF MONTHLY BASIC PAY ON
WHICH HIS RETIRED PAY OR RETAINER PAY IS BASED BECAME EFFECTIVE.
"(E) NOTWITHSTANDING SUBSECTIONS (C) AND (D), THE ADJUSTED RETIRED
PAY OR RETAINER PAY OF A MEMBER OR FORMER MEMBER OF AN ARMED FORCE
RETIRED ON OR AFTER OCTOBER 1, 1967, MAY NOT BE LESS THAN IT WOULD HAVE
BEEN HAD HE BECOME ENTITLED TO RETIRED PAY OR RETAINER PAY BASED ON THE
SAME PAY GRADE, YEARS OF SERVICE FOR PAY, YEARS OF SERVICE FOR RETIRED
OR RETAINER PAY PURPOSES, AND PERCENT OF DISABILITY, IF ANY, ON THE DAY
BEFORE THE EFFECTIVE DATE OF THE RATES OF MONTHLY BASIC PAY ON WHICH HIS
RETIRED PAY OR RETAINER PAY IS BASED."
UNDER THE PROVISIONS OF SUBSECTION (A) OF SECTION 1402, TITLE 10,
U.S. CODE (AS AMENDED BY THE ACT OF OCTOBER 2, 1963, PUBLIC LAW 88-132,
77 STAT. 210, 214) A MEMBER OF AN ARMED FORCE WHO HAS BECOME ENTITLED TO
RETIRED PAY AND WHO THEREAFTER SERVES ON ACTIVE DUTY, IS ENTITLED UPON
RELEASE FROM THAT ACTIVE DUTY TO RECOMPUTE HIS RETIRED PAY BY
MULTIPLYING THE MONTHLY BASIC PAY FN1 OF THE GRADE IN WHICH HE WOULD BE
ELIGIBLE TO RETIRE IF HE WERE RETIRING UPON THAT RELEASE FROM ACTIVE
DUTY, BY 2 1/2 PERCENT FOR EACH OF THE YEARS OF SERVICE CREDITED TO HIM
IN COMPUTING RETIRED PAY, PLUS HIS YEARS OF ACTIVE SERVICE AFTER
BECOMING ENTITLED TO RETIRED PAY, BUT NOT TO EXCEED 75 PERCENT OF THE
PAY UPON WHICH THE COMPUTATION IS BASED.
UNDER SUBSECTIONS (B) AND (C) OF SECTION 1402 OF TITLE 10, A MEMBER
WHO INCURS A PHYSICAL DISABILITY WHILE SERVING ON ACTIVE DUTY AFTER
RETIREMENT MAY ELECT, AS PROVIDED IN SUBSECTION (D), TO RECEIVE EITHER
(1) THE RETIRED PAY TO WHICH HE BECAME ENTITLED WHEN RETIRED, INCREASED
BY ANY APPLICABLE ADJUSTMENTS IN THAT PAY UNDER SECTION 1401A OF TITLE
10 AFTER HE INITIALLY BECAME ENTITLED TO THAT PAY, OR (2) RETIRED PAY
COMPUTED AS THERE STATED ON THE HIGHEST MONTHLY BASIC PAY THAT HE
RECEIVED WHILE ON ACTIVE DUTY AFTER RETIREMENT.
THE COMMITTEE ACTION SETS OUT EXAMPLES OF RETIRED PAY WHICH WOULD
RESULT FROM THE APPLICATION OF EACH OF THE THREE METHODS QUOTED ABOVE
AND STATES THAT THE RETIRED PAY SHOWN IN THE EXAMPLES IS COMPUTED ON THE
JULY 1, 1968, BASIC PAY RATES. FOR COMPARISON PURPOSES, THERE ARE ALSO
SHOWN EXAMPLES OF ENTITLEMENT OF MEMBERS WHO RECEIVE RETIRED PAY BASED
ON THE JULY 1, 1968, BASIC PAY RATES BY VIRTUE OF STATUTES OTHER THAN 10
U.S.C. 1402(A). THE FOLLOWING EXAMPLES IN THE COMMITTEE ACTION ASSUME A
MEMBER IN PAY GRADE E-7 WITH 24 YEARS OF SERVICE CREDITABLE AS A
MULTIPLIER:
"MEMBER INITIALLY RETIRED 1 JANUARY 1969:
1 JAN 69 $530.40 X 60% = $318.24
1 FEB 69 318.24 + 2.1% = 324.92
1 NOV 69 324.92 + 5.3% = 342.14
CURRENT RETIRED PAY $342.14
"MEMBER RELEASED FROM ACTIVE DUTY 1 JANUARY 1969 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(D)
1 JAN 69 $530.40 X 60% = $318.24
1 FEB 69 318.24 + 2.1% = 324.92
1 NOV 69 324.92 + 5.3% = 342.14
CURRENT RETIRED PAY $342.14
"MEMBER RELEASED FROM ACTIVE DUTY 1 OCTOBER 1969 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD A
ABOVE):
1 OCT 69 $530.40 X 60% + 4.0% = $330.97
1 NOV 69 330.97 + 5.3% = 348.51
CURRENT RETIRED PAY $348.51
"MEMBER RELEASE FROM ACTIVE DUTY 1 JANUARY 1970 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD A
ABOVE):
1 JAN 70 $530.40 X 60% + 4.0% + 5.3% = $348.51
CURRENT RETIRED PAY $348.51
"MEMBER RELEASED FROM ACTIVE DUTY 1 OCTOBER 1969 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD B
ABOVE):
1 OCT 69 $530.40 X 60% + 2.1% = $324.92
1 NOV 69 324.92 + 5.3% = 342.14
CURRENT RETIRED PAY $342.14
"MEMBER RELEASED FROM ACTIVE DUTY 1 JANUARY 1970 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD B
ABOVE):
1 JAN 70 $530.40 X 60% + 2.1% + 5.3% = $342.14
CURRENT RETIRED PAY $342.14
"MEMBER RELEASED FROM ACTIVE DUTY 1 OCTOBER 1969 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD C
ABOVE):
1 OCT 69 $530.40 X 60% = $318.24
1 NOV 69 318.24 + 5.3% = 335.11
CURRENT RETIRED PAY $335.11
"MEMBER RELEASED FROM ACTIVE DUTY 1 JANUARY 1970 AND ENTITLED TO
RECOMPUTATION OF RETIRED PAY UNDER 10 USC 1402(A) (USING METHOD C
ABOVE):
1 JAN 70 $530.40 X 40 X 60% = 318.24
CURRENT RETIRED PAY $318.24"
IN COMMENTING ON THE EXAMPLES, THE COMMITTEE ACTION STATES THAT
RETIRED PAY COMPUTED UNDER METHOD A IS GREATER THAN THE RETIRED PAY OF A
SERVICEMAN RETIRED UNDER THE SAME BASIC RATE BUT UNDER SOME OTHER
PROVISION OF LAW. CONCERNING METHOD B, IT IS STATED THAT THE MEMBER
WOULD GENERALLY BE ENTITLED TO THE SAME RATE OF RETIRED PAY AS HIS
COUNTERPART. WITH RESPECT TO METHOD C, IT IS STATED THAT THE MEMBER
WOULD BE ENTITLED TO A LOWER RATE OF RETIRED PAY THAN HIS COUNTERPART
AND, DEPENDING UPON THE DATE OF RELEASE FROM ACTIVE DUTY, THERE MAY BE A
DIFFERENCE IN RETIRED PAY FOR THOSE PERSONS WHOSE RETIRED PAY IS
RECOMPUTED UNDER 10 U.S.C. 1402(A) EVEN THOUGH THE SAME RATE OF BASIC
PAY IS USED IN COMPUTING RETIRED PAY.
IN OUR DECISION OF JUNE 4, 1969, B-166335, REFERRED TO IN THE
COMMITTEE ACTION, THERE WAS CONSIDERED THE CASE OF AN ENLISTED MAN WHO
RETIRED ON DECEMBER 1, 1965, FOR LENGTH OF SERVICE, AND WHO THEREAFTER
WAS RECALLED TO ACTIVE DUTY AUGUST 1, 1966, FOR TWO YEARS AND REVERTED
TO THE RETIRED LIST ON AUGUST 1, 1968. THE QUESTION CONSIDERED IN THAT
DECISION INVOLVED THE PROPER RATE OF ACTIVE DUTY PAY TO BE USED IN
RECOMPUTING THE MEMBER'S RETIRED PAY AND WHETHER THAT PAY SHOULD BE
INCREASED BY ANY CPI ADJUSTMENT. SINCE THE MEMBER, WHEN RELEASED FROM
ACTIVE DUTY, WAS IN RECEIPT OF ACTIVE DUTY PAY AT THE RATES PRESCRIBED
IN EXECUTIVE ORDER NO. 11414, WHICH BECAME EFFECTIVE JULY 1, 1968, HE
HAD RECEIVED PAY AT THOSE RATES FOR LESS THAN 2 YEARS, AND WE SAID THAT
HE WAS ENTITLED, UNDER THE SECOND SENTENCE IN FOOTNOTE 1 OF SECTION
1402(A), TO HAVE HIS RETIRED PAY RECOMPUTED AT THE RATE OF BASIC PAY
PRESCRIBED IN SECTION 1, PUBLIC LAW 90-207, EFFECTIVE OCTOBER 1, 1967 -
THE 1967 RATES OF BASIC PAY WERE REPLACED BY THE 1968 RATES.
FOR THE REASONS INDICATED IN THE DECISION OF JUNE 4, 1969, WE
CONCLUDED THAT THE ENLISTED MAN'S SITUATION DID NOT APPEAR TO BRING HIM
WITHIN THE PURVIEW OF EITHER SUBSECTION (C) OR (D) OF SECTION 1401A SO
AS TO REQUIRE APPLICATION OF ONLY A PARTIAL CPI INCREASE IN THE
COMPUTATION OF HIS RETIRED PAY. WE HELD THAT HE WAS ENTITLED, EFFECTIVE
AUGUST 1, 1968, TO HAVE HIS GROSS RETIRED PAY INCREASED BY 3.9 PERCENT
UNDER THE CPI INCREASE WHICH BECAME EFFECTIVE APRIL 1, 1968. WE SAID
THAT HIS CASE IS THE SAME AS IF HE HAD INITIALLY RETIRED ON OCTOBER 1,
1967, WITH RETIRED PAY COMPUTED ON ACTIVE DUTY PAY RATES THEN IN EFFECT.
THE LEGISLATIVE HISTORY OF SECTION 2 OF PUBLIC LAW 90-207, APPROVED
DECEMBER 16, 1967, 81 STAT. 652, WHICH AMENDED SECTION 1401A OF TITLE
10, AND ADDED SUBSECTIONS (C) AND (D) TO THAT SECTION, INCLUDES THE
FOLLOWING STATEMENT ON PAGE 12 OF SENATE REPORT NO. 808 (TO ACCOMPANY
H.R. 13510, WHICH BECAME PUBLIC LAW 901207):
"(2) THE BILL MODIFIES THE CPI FORMULA IN SUCH A MANNER THAT THOSE
WHO ARE ON ACTIVE DUTY AND RECEIVE STATUTORY INCREASES AND SUBSEQUENTLY
RETIRE, WILL BE LIMITED WHEN THEY RECEIVE A CPI INCREASE WHILE ON THE
RETIRED LIST, TO THAT PORTION OF THE CPI INCREASE THAT HAS OCCURRED
SINCE THE LAST STATUTORY INCREASE IN HIS BASIC PAY. FOR EXAMPLE, IF AN
INDIVIDUAL RETIRES FEBRUARY 1, 1968, UNDER THE NEW PAY RATES AUTHORIZED
IN THIS LEGISLATION, AND THEREAFTER A CPI INCREASE IS AUTHORIZED FOR
THOSE ON THE RETIRED LIST ON APRIL 1, 1968 (WHICH IS BASED ON A
3-PERCENT INCREASE OCCURRING BETWEEN SEPTEMBER 1966 AND APRIL 1968), THE
PERSON WOULD RECEIVE ONLY THAT PORTION OF THE CPI INCREASE WHICH HAS
OCCURRED SINCE OCTOBER 1, 1967, THE DATE OF HIS STATUTORY INCREASE, AND
APRIL 1968.
"(3) THE THIRD ELEMENT IN THE LEGISLATIVE RECOMMENDATIONS IS TO
PROVIDE THAT WHENEVER THERE IS A 3-PERCENT CPI INCREASE AND THERE HAVE
BEEN NO STATUTORY ACTIVE DUTY PAY INCREASES, PERSONS SUBSEQUENTLY
RETIRING UNDER THESE SAME PAY SCALES WILL HAVE THEIR INITIAL RETIRED PAY
INCREASED BY THE SAME PERCENTAGE OF INCREASE AS WAS ACCORDED THOSE
RETIRING PRIOR TO THE CPI ADJUSTMENT AND SUBSEQUENT TO THE STATUTORY PAY
INCREASE. ***"
NEITHER THE LAW (SECTION 2 OF PUBLIC LAW 90-207) NOR ITS LEGISLATIVE
HISTORY CONTAINS ANY SPECIFIC STATEMENT AS TO WHETHER THE PARTIAL CPI
ADJUSTMENT FORMULA PRESCRIBED IN SUBSECTIONS (C) AND (D) OF SECTION
1401A WAS INTENDED TO BE APPLICABLE TO THOSE MEMBERS COVERED BY SECTION
1402(A). AS NOTED ABOVE, HOWEVER, IF SUBSECTIONS (C) AND (D) OF SECTION
1401A ARE NOT APPLIED BUT INSTEAD SUBSECTION (B) OF THAT SECTION (METHOD
A IN COMMITTEE ACTION NO. 442) IS USED IN FIXING THE CPI INCREASE FOR
1402(A) MEMBERS (THOSE RELEASED TO INACTIVE SERVICE WITHOUT DISABILITY
FOLLOWING ACTIVE SERVICE AFTER RETIREMENT) SUCH MEMBERS WOULD, AT LEAST
IN SOME CASES, RECEIVE GREATER RETIRED PAY THAN OTHER MEMBERS WHOSE
RETIRED PAY IS BASED ON THE SAME BASIC PAY RATE AND WHO WERE NOT
RECALLED TO ACTIVE DUTY. IT APPEARS MOST UNLIKELY THAT THE CONGRESS
INTENDED SUCH RESULT.
SINCE RECOMPUTATION OF RETIRED PAY UNDER METHOD C WOULD PRECLUDE ANY
CPI ADJUSTMENT RELATING TO A PERIOD PRIOR TO RELEASE TO INACTIVE DUTY ON
THE RETIRED LIST, WE BELIEVE THAT THIS METHOD WOULD BE CONTRARY TO THE
PURPOSE AND INTENT OF 10 U.S.C. 1401A.
WITH RESPECT TO METHOD B, WHILE THE LANGUAGE OF SUBSECTIONS (C) AND
(D) OF SECTION 1401A IS UNCERTAIN INSOFAR AS ITS APPLICABILITY TO
MEMBERS COVERED BY SECTION 1402(A) IS CONCERNED, WE BELIEVE THAT THE
APPLICATION OF THAT METHOD IN CASES OF THE TYPE DESCRIBED IN THE
QUESTION PRESENTED WOULD BE CONSISTENT WITH THE PURPOSE AND INTENT OF
SECTION 1401A. ACCORDINGLY, WE CONCLUDE THAT METHOD B SHOULD BE USED IN
COMPUTING CPI INCREASES IN SUCH CASES. TO THE EXTENT THAT THE
CONCLUSIONS REACHED IN 48 COMP. GEN. 398 AND B-166335, JUNE 4, 1969,
MENTIONED ABOVE, ARE INCONSISTENT WITH THIS DECISION, THEY ARE MODIFIED
ACCORDINGLY.
FN1 FOR A MEMBER WHO HAS BEEN ENTITLED, FOR A CONTINUOUS PERIOD OF AT
LEAST TWO YEARS, TO BASIC PAY UNDER THE RATES OF BASIC PAY IN EFFECT
UPON THAT RELEASE FROM ACTIVE DUTY, COMPUTE UNDER THOSE RATES. FOR A
MEMBER WHO HAS BEEN ENTITLED TO BASIC PAY FOR A CONTINUOUS PERIOD OF AT
LEAST TWO YEARS UPON THAT RELEASE FROM ACTIVE DUTY, BUT WHO IS NOT
COVERED BY THE PRECEDING SENTENCE, COMPUTE UNDER THE RATES OF BASIC PAY
REPLACED BY THOSE IN EFFECT UPON THAT RELEASE FROM ACTIVE DUTY. FOR ANY
OTHER MEMBER COMPUTE UNDER THE THE RATES OF BASIC PAY UNDER THICH THE
MEMBER'S RETIRED PAY OR [ETAINER PAY WAS COMPUTED WHEN HE ENTERED ON
THAT ACTIVE DUTY."
B-148144, SEP 15, 1970
HEADNOTES-UNAVAILABLE
SUBJECT:
QUALIFICATIONS OF PUBLIC ACCOUNTANTS MAKING AUDITS OF FEDERALLY
CHARTERED, FINANCED, OR REGULATED PRIVATE ORGANIZATIONS
HEADS OF FEDERAL DEPARTMENTS AND AGENCIES:
BY OUR CIRCULAR LETTER OF MAY 12, 1970, (B-148144) WE ADVISED YOU OF
A CHANGE IN OUR POSITION REGARDING THE QUALIFICATIONS OF THOSE WHO MAY
BE SELECTED TO AUDIT FEDERALLY CHARTERED, FINANCED OR REGULATED PRIVATE
ORGANIZATIONS. THE MAJOR CHANGE FROM OUR PREVIOUSLY ANNOUNCED POSITION
WAS THAT AFTER DECEMBER 31, 1975, ONLY CERTIFIED PUBLIC ACCOUNTANTS
SHOULD BE SELECTED TO MAKE SUCH AUDITS.
SINCE ANNOUNCING THIS REVISED POSITION WE HAVE RECEIVED INFORMATION
AND HAVE HAD CONSULTATIONS WHICH CONVINCED US OF THE DESIRABILITY OF
MAKING A FURTHER REVISION IN OUR POSITION. INSTEAD OF LIMITING SUCH
AUDITS TO ONLY CERTIFIED PUBLIC ACCOUNTANTS AFTER DECEMBER 31, 1975, WE
BELIEVE IT EQUITABLE THAT THOSE LICENSED PUBLIC ACCOUNTANTS WHO RECEIVED
THEIR LICENSES ON OR BEFORE DECEMBER 31, 1970, ALSO BE PERMITTED TO
PERFORM SUCH AUDITS AFTER THE DECEMBER 31, 1975, CUT OFF DATE. THIS HAS
THE EFFECT OF CREATING A TERMINATING CLASS OF PUBLIC ACCOUNTANTS WHO
THROUGHOUT THEIR ACTIVE CAREERS WILL CONTINUE TO BE ELIGIBLE FOR SUCH
WORK.
IN ACCORDANCE WITH THIS REVISED POSITION, WE RECOMMENDED TO THE HOUSE
COMMITTEE ON EDUCATION AND LABOR, IN LIEU OF OUR PREVIOUS PROPOSAL, THE
INCLUSION OF THE FOLLOWING LANGUAGE IN A BILL IT IS CONSIDERING.
"SUCH AUDITS SHALL BE CONDUCTED IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OR BY
INDEPENDENT LICENSED PUBLIC ACCOUNTANTS, LICENSED ON OR BEFORE DECEMBER
31, 1970, WHO ARE CERTIFIED OR LICENSED BY A REGULATORY AUTHORITY OF A
STATE OR OTHER POLITICAL SUBDIVISION OF THE UNITED STATES: EXCEPT THAT
INDEPENDENT PUBLIC ACCOUNTANTS LICENSED TO PRACTICE BY SUCH REGULATORY
AUTHORITY AFTER DECEMBER 31, 1970, AND PERSONS WHO, ALTHOUGH NOT SO
CERTIFIED OR LICENSED, MEET, IN THE OPINION OF THE SECRETARY, STANDARDS
OF EDUCATION AND EXPERIENCE REPRESENTATIVE OF THE HIGHEST PRESCRIBED BY
THE LICENSING AUTHORITIES OF THE SEVERAL STATES WHICH PROVIDE FOR THE
CONTINUING LICENSING OF PUBLIC ACCOUNTANTS AND WHICH ARE PRESCRIBED BY
THE SECRETARY IN APPROPRIATE REGULATIONS MAY PERFORM SUCH AUDITS UNTIL
DECEMBER 31, 1975: PROVIDED, THAT IF THE SECRETARY DEEMS IT NECESSARY
IN THE PUBLIC INTEREST, HE MAY PRESCRIBE BY REGULATION HIGHER STANDARDS
THAN THOSE REQUIRED FOR THE PRACTICE OF PUBLIC ACCOUNTANCY BY THE
REGULATORY AUTHORITIES OF THE STATES."
WE RECOMMEND THAT THE POSITION EXPRESSED IN THE ABOVE LANGUAGE,
RATHER THAN THAT PROPOSED IN OUR MAY 12, 1970 LETTER, BE INCORPORATED IN
REGULATIONS ISSUED BY DEPARTMENTS AND AGENCIES PRESCRIBING THE
QUALIFICATIONS OF PUBLIC ACCOUNTANTS SELECTED TO AUDIT PROGRAMS
ADMINISTERED BY THE DEPARTMENTS AND AGENCIES.
B-170112 L/M, SEP 15, 1970
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MAJOR N. C. ALCOCK, USAF, HEADQUARTERS UNITED STATES AIR FORCE:
YOUR LETTER DATED JUNE 4, 1970, FILE REFERENCE MPECA, WITH
ENCLOSURES, FORWARDED HERE BY LETTER DATED JUNE 22, 1970, HEADQUARTERS
UNITED STATES AIR FORCE, REQUESTS AN ADVANCE DECISION AS TO THE
PROPRIETY OF PAYMENT TO STAFF SERGEANT GEORGE J. GEIGER, 000 00 8250, OF
$2,423.63 REPRESENTING INTERIM CIVILIAN EARNINGS AND UNEMPLOYMENT
COMPENSATION WITHHELD FROM A PAYMENT OF ACTIVE DUTY PAY AND ALLOWANCES
MADE TO HIM INCIDENT TO THE CORRECTION OF HIS MILITARY RECORDS. YOUR
REQUEST WAS APPROVED AND ASSIGNED AIR FORCE REQUEST NO. DO-AF-1083 BY
THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.
YOU SAY THAT SERGEANT GEIGER WAS DISCHARGED FROM THE AIR FORCE ON
AUGUST 7, 1963, UNDER THE PROVISIONS OF AIR FORCE REGULATION 39-14, AT
WHICH TIME HE HAD ACTIVE SERVICE TOTALING 19 YEARS, 2 MONTHS, AND 3
DAYS. HE QUESTIONED THE VALIDITY OF SUCH DISCHARGE BY A SUIT IN THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, BUT THE CASE
WAS DISMISSED ON THE GOVERNMENT'S CROSS-MOTION FOR SUMMARY JUDGMENT.
ON JULY 22, 1969, THE UNITED STATES COURT OF APPEALS, DISTRICT OF
COLUMBIA CIRCUIT, RULING ON AN APPEAL FILED BY SERGEANT GEIGER (GEIGER
V. BROWN, 419 F.2D 714) CONCLUDED THAT HIS DISCHARGE FROM THE AIR FORCE
"WAS UNAVAILING TO EFFECT HIS SEPARATION FROM THAT SERVICE PRIOR TO THE
EXPIRATION OF HIS THEN CURRENT TERM OF ENLISTMENT" AND, IN REVERSING THE
JUDGMENT OF THE LOWER COURT, IT REMANDED THE CASE FOR FURTHER
PROCEEDINGS CONSISTENT WITH ITS HOLDING. IN ACCORDANCE THEREWITH, THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA BY AN ORDER ON
MANDATE, DATED NOVEMBER 6, 1969, VACATED ITS PRIOR JUDGMENT AND DECLARED
SERGEANT GEIGER'S DISCHARGE ON AUGUST 7, 1963, NULL AND VOID.
ON NOVEMBER 6, 1969, SERGEANT GEIGER APPLIED TO THE AIR FORCE BOARD
FOR THE CORRECTION OF MILITARY RECORDS FOR THE CORRECTION OF HIS
MILITARY RECORDS TO SHOW THAT HE WAS NOT DISCHARGED ON AUGUST 7, 1963,
BUT REMAINED ON ACTIVE DUTY UNTIL ELIGIBLE FOR RETIREMENT FOR YEARS OF
SERVICE AND THEN RETIRED. HIS ATTORNEY REPRESENTED TO THE CORRECTION
BOARD THAT IN CONSIDERATION OF THERE BEING NO OFFSETS FOR INTERIM
CIVILIAN EARNINGS AGAINST THE ACTIVE DUTY PAY DUE SERGEANT GEIGER AS A
RESULT OF THE CORRECTION OF THE MILITARY RECORDS IT WAS DESIRED THAT
SUCH RECORDS SHOW SERGEANT GEIGER WAS NOT DISCHARGED BUT THAT HE WAS
RETIRED AT THE EARLIEST POSSIBLE DATE, I.E., 20 YEARS' SERVICE, AND THAT
THEREAFTER HE BE DEEMED TO BE IN A RETIRED STATUS. THE LITIGATION
DIVISION OF THE OFFICE OF THE JUDGE ADVOCATE GENERAL, DEPARTMENT OF THE
AIR FORCE, CONCURRED WITH THIS REPRESENTATION AND RECOMMENDED THAT NO
OFFSETS FOR INTERIM CIVILIAN EARNINGS BE MADE AGAINST THE ACTIVE DUTY
PAY WHICH WOULD BE DUE SERGEANT GEIGER.
ON JANUARY 28, 1970, THE CORRECTION BOARD AFTER CONSIDERATION OF THE
UNAPPEALED ORDER ON MANDATE OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA, THE REPRESENTATIONS OF COUNSEL, AND THE FACTS AS
SHOWN IN THE OFFICIAL RECORD, RECOMMENDED THAT SERGEANT GEIGER'S
MILITARY RECORDS BE CORRECTED TO SHOW THAT HE WAS NOT DISCHARGED FROM
THE UNITED STATES AIR FORCE ON AUGUST 7, 1963, BUT CONTINUED ON ACTIVE
DUTY UNTIL JUNE 30, 1964, WHEN HE WAS RELEASED FROM ACTIVE DUTY AND
VOLUNTARILY RETIRED EFFECTIVE JULY 1, 1964, UNDER THE PROVISIONS OF 10
U.S.C. 8914. THE BOARD FURTHER RECOMMENDED THAT IN THE COMPUTATION OF
ANY AMOUNTS FOUND DUE AS A RESULT OF THIS CORRECTION OF MILITARY
RECORDS, DEDUCTION WOULD NOT BE MADE FOR INTERIM CIVILIAN EARNINGS, IF
ANY, FOR THE PERIOD COMMENCING AUGUST 7, 1963, TO JUNE 30, 1964. BY
MEMORANDUM DATED FEBRUARY 6, 1970, TO THE CHIEF OF STAFF, UNITED STATES
AIR FORCE, THE ASSISTANT SECRETARY OF THE AIR FORCE, MANPOWER AND
RESERVE AFFAIRS, DIRECTED THAT ALL NECESSARY AND APPROPRIATE ACTION BE
TAKEN IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD.
IT APPEARS THAT IN DETERMINING THE AMOUNT DUE SERGEANT GEIGER AS A
RESULT OF THE CORRECTION OF HIS MILITARY RECORDS CONSIDERATION WAS GIVEN
TO OUR DECISION B-160808, DATED APRIL 2, 1970, 49 COMP. GEN. ___. IN
THAT DECISION WE CONCLUDED THAT IN VIEW OF A MEMORANDUM DATED MARCH 12,
1969, FROM THE ASSISTANT SECRETARY OF DEFENSE TO THE SECRETARIES OF THE
MILITARY DEPARTMENTS DIRECTING THAT APPROPRIATE ACTION BE TAKEN TO
REQUIRE THE DEDUCTION OF INTERIM CIVILIAN EARNINGS IN CORRECTION BOARD
CASES SUCH AS THIS, A STIPULATION BY THE OFFICERS THERE INVOLVED AS TO
THE PAYMENT THEY WERE TO RECEIVE BY REASON OF THE CORRECTION OF THEIR
RECORDS, OR ANY DETERMINATION BY THE CORRECTION BOARD AS TO THE BASIS ON
WHICH THEIR MONEY CLAIMS WOULD BE SETTLED, WAS WITHOUT EFFECT TO PREVENT
THE OFFSET OF INTERIM CIVILIAN EARNINGS.
YOU SAY THAT BECAUSE OF DOUBT RAISED BY THIS DECISION, AN AMOUNT
EQUIVALENT TO SERGEANT GEIGER'S THEN REPORTED INTERIM CIVILIAN EARNINGS
PLUS UNEMPLOYMENT COMPENSATION AGGREGATING $2,423.63, RECEIVED BY HIM
DURING THE PERIOD OF EXTENDED ACTIVE DUTY WAS WITHHELD FROM THE
RETROACTIVE RETIRED PAY THEN STILL UNPAID TO HIM. ALSO, YOU SAY THAT
LATER DOCUMENTATION ESTABLISHES THAT THE AMOUNT OF OFFSET, IF
APPLICABLE, SHOULD BE $2,129.63 INSTEAD OF $2,423.63 SINCE THE
UNEMPLOYMENT COMPENSATION RECEIVED BY SERGEANT GEIGER WAS $798 RATHER
THAN $1,092 AS ORIGINALLY REPORTED.
YOU SUGGEST THAT THE FACTUAL SITUATION IN THIS CASE IS DIFFERENT FROM
THAT CONSIDERED IN THE DECISION OF APRIL 2, 1970, AND COULD SUPPORT A
"NO OFF-SET" PROVISION IN THAT THE AGREEMENT WHICH THE CORRECTION BOARD
WAS SEEKING TO PUT INTO EFFECT WAS BASED ON A RELINQUISHMENT BY SERGEANT
GEIGER OF THE RIGHT, AS ESTABLISHED BY THE UNITED STATES COURT OF
APPEALS, TO BE CONSIDERED AS BEING ON ACTIVE DUTY TO THE DATE OF
EXPIRATION OF HIS THEN CURRENT TERM OF ENLISTMENT. IN THIS CONNECTION,
YOU SAY THAT SERGEANT GEIGER IN EFFECT RELINQUISHED THIS RIGHT UNDER THE
COURT ORDER TO REMAIN ON ACTIVE DUTY UNTIL NOVEMBER 6, 1964, THE END OF
HIS CURRENT PERIOD ENLISTMENT. YOU POINT OUT THAT IF THIS EARLIER
SEPARATION FROM ACTIVE DUTY HAD NOT BEEN AGREED TO, SERGEANT GEIGER
WOULD HAVE BEEN ENTITLED TO ACTIVE DUTY PAY AND ALLOWANCES THROUGH
NOVEMBER 6, 1964, ASSUMING THAT WOULD HAVE BEEN THE DATE OF SEPARATION.
THE STATUTORY AUTHORITY FOR THE PAYMENT BY A DEPARTMENT CONCERNED OF
ALLOWANCES, COMPENSATION, EMOLUMENTS, OR OTHER PECUNIARY BENEFITS IF
FOUND TO BE DUE ON A CLAIM PRESENTED BY A MEMBER WHOSE MILITARY OR NAVAL
RECORDS ARE CORRECTED IS CONTAINED IN 10 U.S.C. 1552(C). MEMORANDUM
DATED MARCH 12, 1969, FROM THE ASSISTANT SECRETARY OF DEFENSE TO THE
ASSISTANT SECRETARIES OF THE MILITARY DEPARTMENTS (FINANCIAL MANAGEMENT)
REQUIRES THE DEDUCTION OF INTERIM CIVILIAN EARNINGS RECEIVED FROM
CIVILIAN EMPLOYMENT IN EFFECTING SETTLEMENT OF BACK PAY AND ALLOWANCES
FOUND DUE A MEMBER OR FORMER MEMBER OF THE UNIFORMED SERVICES BY REASON
OF THE CORRECTION OF HIS MILITARY OR NAVAL RECORDS IN CERTAIN CASES
PURSUANT TO 10 U.S.C. 1552.
THE CONCLUSION IN THE DECISION OF APRIL 2, 1970, FOLLOWED THE HOLDING
IN DECISION OF JULY 7, 1954, 34 COMP. GEN. 7, THAT THE SECRETARIES OF
THE ARMY, NAVY, AIR FORCE, AND TREASURY ARE NOT VESTED WITH ANY
DISCRETIONARY POWER TO MAKE DETERMINATIONS OF THE SPECIFIC AMOUNTS TO BE
PAID AS A RESULT OF THE CORRECTION OF MILITARY OR NAVAL RECORDS PURSUANT
TO SECTION 207 OF THE LEGISLATIVE REORGANIZATION ACT OF 1946, AS AMENDED
(NOW CODIFIED IN 10 U.S.C. 1552); AND, THEREFORE, THE AMOUNTS
AUTHORIZED TO BE PAID UNDER SECTION 207(B) OF THE ACT DEPEND SOLELY UPON
A PROPER APPLICATION OF THE STATUTES AND REGULATIONS TO THE FACTS AS
SHOWN BY THE CORRECTED RECORD IN EACH PARTICULAR CASE. SEE, ALSO, 40
COMP. GEN. 502; 42 ID. 582; 44 ID. 144; AND 45 ID. 47.
IN OUR OPINION THE FACT THAT SERGEANT GEIGER REQUESTED VOLUNTARY
RETIREMENT PRIOR TO THE DATE OF THE EXPIRATION OF HIS ENLISTMENT AFFORDS
NO BASIS FOR DEPARTING FROM THE CONCLUSION REACHED IN THE DECISION OF
APRIL 2, 1970. IN THE CASE CONSIDERED IN THAT DECISION, AS IN THIS
CASE, THE MEMBERS CONCERNED WERE ENTITLED UNDER THAT DECISION OF THE
COURT TO CONTINUE IN AN ACTIVE DUTY STATUS BEYOND THE DATE OF RETIREMENT
BUT REQUESTED THE CORRECTION BOARD TO CORRECT THE RECORD TO SHOW THEIR
EARLIER RETIREMENT WITH THE UNDERSTANDING THAT THERE WOULD BE NO OFFSET
OF CIVILIAN EARNINGS AGAINST THE ACTIVE-DUTY BACK PAY AND ALLOWANCES.
THEREFORE, NO EFFECT MAY BE GIVEN TO THE ASSISTANT SECRETARY'S
DIRECTION THAT NO DEDUCTION SHOULD BE MADE FOR INTERIM CIVILIAN EARNINGS
FOR THE PERIOD AUGUST 7, 1963, TO JUNE 30, 1964. SUCH DIRECTION DOES
NOT RELATE TO A RECORD CORRECTION WITHIN THE PURVIEW OF 10 U.S.C. 1552
BUT RATHER A DETERMINATION OF THE SPECIFIC AMOUNT TO BE PAID AS THE
RESULT OF THE RECORDS CORRECTION IN SERGEANT GEIGER'S CASE.
UNDER THE LAW AND REGULATIONS THE AIR FORCE IS AUTHORIZED TO PAY TO
SERGEANT GEIGER PAY AND ALLOWANCES FOR THE CONSTRUCTIVE PERIOD OF ACTIVE
DUTY, AUGUST 7, 1963, TO JUNE 30, 1964, AS REFLECTED BY HIS CORRECTED
MILITARY RECORDS, SUBJECT, OF COURSE, TO THE DEDUCTION OF INTERIM
CIVILIAN EARNINGS FOR THE CORRESPONDING PERIOD AS REQUIRED BY THE
MEMORANDUM OF MARCH 12, 1969. THE AMOUNT PAYABLE TO SERGEANT GEIGER, AS
BASED ON THE CORRECTED RECORD, IS FOR DETERMINATION IN THE FIRST
INSTANCE BY THE APPROPRIATE AIR FORCE DISBURSING OFFICER.
WITH RESPECT TO THE AMOUNT WITHHELD FROM SERGEANT GEIGER, IN DECISION
OF OCTOBER 28, 1955, 35 COMP. GEN. 241, WHICH INVOLVED THE APPLICATION
OF THE ACT OF JUNE 10, 1948, CH. 447, 62 STAT. 354, 5 U.S.C. 652 (1952
ED.), IN THE CASE OF A POSTAL SERVICE EMPLOYEE RESTORED TO HIS FORMER
POSITION, THE ACT REQUIRING A DEDUCTION OF "AMOUNTS EARNED BY HIM
THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD," WE HELD THAT UNEMPLOYMENT
COMPENSATION RECEIVED FROM THE OKLAHOMA EMPLOYMENT SECURITY COMMISSION
DURING THE INVOLVED PERIOD MAY BE REQUIRED TO BE REFUNDED TO THAT
COMMISSION AND, THEREFORE, NO DEDUCTION SHOULD BE MADE FROM THE BACK PAY
TO WHICH THE EMPLOYEE WAS ENTITLED FOLLOWING HIS RESTORATION. WE SEE NO
REASON WHY THE PRINCIPLE OF THAT DECISION SHOULD NOT BE APPLICABLE IN
MILITARY BACK PAY CASES SUCH AS THIS. THEREFORE, THE UNEMPLOYMENT
COMPENSATION RECEIVED BY SERGEANT GEIGER DOES NOT COME WITHIN THE
PURVIEW OF THE TERM "INTERIM CIVILIAN EARNINGS" FOR THE PURPOSES OF THE
MEMORANDUM OF MARCH 12, 1969, AND THE AMOUNT INVOLVED, $1,092, MAY BE
REFUNDED TO SERGEANT GEIGER.
YOUR QUESTION IS ANSWERED ACCORDINGLY AND THE VOUCHER IS RETURNED,
PAYMENT THEREON BEING AUTHORIZED ON THE BASIS INDICATED ABOVE.
B-170210 L/M, SEP 9, 1970
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CAPTAIN H. D. FLYNN, FC, DEPARTMENT OF THE ARMY:
FURTHER REFERENCE IS MADE TO YOUR LETTER (FILE REFERENCE MEDES-CF),
DATED MAY 12, 1970, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY
OF MAKING PAYMENT ON A VOUCHER IN THE AMOUNT OF $33.03 IN FAVOR OF
SECOND LIEUTENANT ORBRA RAY JOHNSON, SSAN 000-00-4553, REPRESENTING
BASIC ALLOWANCE FOR QUARTERS WITH DEPENDENTS FOR THE PERIOD APRIL 22,
1970, THROUGH APRIL 30, 1970. YOUR LETTER WAS FORWARDED TO THIS OFFICE
BY THE OFFICE OF THE COMPTROLLER OF THE ARMY AND HAS BEEN ASSIGNED DO
NUMBER A-1082 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE
COMMITTEE.
THE FOLLOWING FACTS WERE SET FORTH IN YOUR LETTER AS BEING PERTINENT
TO THE CASE. BY SPECIAL ORDER NUMBER 85, ISSUED BY HEADQUARTERS,
PRESIDIO OF SAN FRANCISCO, CALIFORNIA, DATED APRIL 21, 1970, LIEUTENANT
JOHNSON WAS ASSIGNED FAMILY TYPE GOVERNMENT QUARTERS, DESIGNATED AS
"ADEQUATE," EFFECTIVE APRIL 22, 1970, AND SUCH ORDERS STATE "MOVE TO BE
MADE AT GOVERNMENT EXPENSE." IT APPEARS THAT ON THE EFFECTIVE DATE OF
QUARTERS ASSIGNMENT, THE MEMBER CONTACTED THE TRANSPORTATION OFFICER,
PRESIDIO OF SAN FRANCISCO, TO ARRANGE FOR TRANSPORTATION OF HIS
HOUSEHOLD GOODS FROM HIS OFF-POST PRIVATE RESIDENCE AND FROM STORAGE TO
THE ASSIGNED QUARTERS. THE MEMBER WAS ADVISED BY THAT OFFICER THAT HIS
HOUSEHOLD GOODS AT HIS SAN FRANCISCO RESIDENCE COULD NOT BE MOVED UNTIL
APRIL 27, 1970, AND THAT THOSE GOODS IN STORAGE WOULD BE MOVED ON MAY 1,
1970. DESPITE THE FACT THAT HIS QUARTERS ALLOWANCE WAS TERMINATED APRIL
21, 1970, HE DID NOT MOVE INTO HIS ASSIGNED QUARTERS UNTIL MAY 1, 1970,
AND HE CLAIMS ENTITLEMENT TO A QUARTERS ALLOWANCE FOR THE ADDITIONAL
PERIOD.
YOU REQUEST A DECISION ON THE FOLLOWING QUESTIONS:
"A. DOES THE CONTRACT BETWEEN THE TRANSPORTATION OFFICER AND THE
MOVING COMPANY FOR DELIVERY OF HOUSEHOLD GOODS OF A SERVICE MEMBER
REPRESENT THE COMPETENT AUTHORITY AS CONTAINED IN PARAGRAPH 30221 DOD
PAY MANUAL WHICH PREVENTS A FAMILY FROM OCCUPYING FAMILY TYPE QUARTERS
WHEN DELIVERY OF THE HOUSEHOLD GOODS ARE AT A DATE LATER THAN THE DATE
OF ASSIGNMENT BY THE INSTALLATION COMMANDER AND WHEN THE QUARTERS ARE
NOT PROVIDED WITH A MINIMUM OF ESSENTIAL FURNISHINGS NECESSARY FOR THE
GOOD HEALTH AND WELL BEING OF A MEMBERS FAMILY?
"B. IS THE ATTACHED VOUCHER PROPERLY PAYABLE?"
THE PORTION OF PARAGRAPH 30221 OF THE DEPARTMENT OF DEFENSE PAY AND
ALLOWANCES ENTITLEMENTS MANUAL TO WHICH YOU MAKE REFERENCE, PROVIDES IN
PERTINENT PART:
"A. WHEN ENTITLED TO BAQ. A MEMBER WITH DEPENDENTS WHO IS ENTITLED
TO BASIC PAY IS ENTITLED TO BAQ AT THE RATES PRESCRIBED FOR MEMBERS WITH
DEPENDENTS WHEN:
"(2) ADEQUATE GOVERNMENT QUARTERS ARE NOT FURNISHED FOR HIS
DEPENDENTS, OR HIS DEPENDENTS ARE PREVENTED BY COMPETENT AUTHORITY FROM
OCCUPYING SUCH QUARTERS, EVEN THOUGH THE MEMBER IS ASSIGNED QUARTERS FOR
HIMSELF."
THE ABOVE-QUOTED PORTION OF THE DODPM IS BASED UPON CERTAIN
PROVISIONS CONTAINED IN SECTION 403 OF TITLE 37, U. S. CODE. SUBSECTION
(B) OF THAT SECTION PROVIDES THAT EXCEPT AS OTHERWISE PROVIDED BY LAW, A
MEMBER OF A UNIFORMED SERVICE WHO IS ASSIGNED TO QUARTERS OF THE UNITED
STATES OR A HOUSING FACILITY UNDER THE JURISDICTION OF A UNIFORMED
SERVICE, APPROPRIATE TO HIS GRADE, RANK OR RATING AND ADEQUATE FOR
HIMSELF, AND HIS DEPENDENTS, IF WITH DEPENDENTS, IS NOT ENTITLED TO A
BASIC ALLOWANCE FOR QUARTERS. HOWEVER, THE RESTRICTION CONTAINED
THEREIN IS QUALIFIED BY SUBSECTION (D), WHICH PROVIDES THAT A MEMBER
ASSIGNED GOVERNMENT QUARTERS MAY NOT BE DENIED THE BASIC ALLOWANCE FOR
QUARTERS IF, "BECAUSE OF ORDERS OF COMPETENT AUTHORITY, HIS DEPENDENTS
ARE PREVENTED FROM OCCUPYING THOSE QUARTERS."
IN OUR DECISION OF JULY 22, 1968, 48 COMP. GEN. 28, WE STATED THAT:
"IT HAS LONG BEEN ESTABLISHED THAT QUARTERS AND RENTAL ALLOWANCES ARE
PAYABLE TO A MEMBER OF A MILITARY SERVICE AS REASONABLE COMMUTATION IN
MONEY WHEN HE IS NOT FURNISHED PUBLIC QUARTERS AND HE MUST PROVIDE HIS
OWN. ALSO, IT HAS BEEN THE POLICY OF THE UNIFORMED SERVICES TO PROVIDE
FAMILY UNITS TO THE EXTENT THAT EXIGENCIES OF THE SERVICE WILL ALLOW.
THUS, WITHIN CERTAIN LIMITATIONS, THE LAW AUTHORIZES TRANSPORTATION OF
AN OFFICER'S DEPENDENTS TO HIS STATION TO RESIDE WITH HIM. ALSO, THE
LAW PERMITS PAYMENT OF BASIC ALLOWANCE FOR QUARTERS WHERE, BECAUSE OF
THE MEMBER'S MILITARY ASSIGNMENT, ADEQUATE QUARTERS ARE NOT AVAILABLE OR
HE IS NOT PERMITTED TO HAVE HIS DEPENDENTS AT HIS PERMANENT POST OF
DUTY, EVEN THOUGH HE IS ASSIGNED QUARTERS FOR HIMSELF."
IT IS BELIEVED THAT NEITHER THE PROVISIONS OF LAW CONTAINED IN 37
U.S.C. 403(D) NOR THE QUOTED REGULATIONS CONTEMPLATE THE TYPE OF
SITUATION INVOLVED IN THIS CASE. NO MILITARY ORDERS WERE ISSUED TO THE
MEMBER WHICH PREVENTED HIS DEPENDENTS FROM OCCUPYING THE QUARTERS WHICH
WERE ASSIGNED FOR THEIR USE. THEIR REASONS FOR NOT OCCUPYING SUCH
QUARTERS PRIOR TO MAY 1, 1970, HAD NOTHING TO DO WITH THE ADEQUACY OF
SUCH QUARTERS BUT WAS DUE SOLELY TO THE FACT THAT ALL OF THEIR HOUSEHOLD
GOODS WERE NOT MOVED INTO THE ASSIGNED QUARTERS UNTIL THAT DATE. IT IS
OUR VIEW THAT THE FOREGOING PROVISIONS OF LAW AND REGULATIONS APPLY TO
SITUATIONS IN WHICH DEPENDENTS, WHO ARE NOT RESIDING IN GOVERNMENT
QUARTERS, ARE DENIED PERMISSION BY VIRTUE OF MILITARY ORDERS FROM MOVING
TO AND LIVING WITH THE MEMBER AT HIS DUTY STATION FOR REASONS DEEMED
ADEQUATE BY THE ORDER ISSUING AUTHORITY. SEE 34 COMP. GEN. 436 (1955)
AND B-129805, OCTOBER 9, 1958.
WHILE IT APPEARS THAT LIEUTENANT JOHNSON DID NOT MOVE HIS FAMILY INTO
THE ASSIGNED GOVERNMENT QUARTERS UNTIL MAY 1, DUE TO THE FAILURE OF THE
TRANSPORTATION OFFICER TO HAVE HIS HOUSEHOLD GOODS MOVED PROMPTLY, THE
SPECIAL ORDERS ISSUED TO HIM MADE A DEFINITE ASSIGNMENT OF ADEQUATE
FAMILY TYPE QUARTERS ON A SPECIFIC DATE. SUCH ASSIGNMENT DEFEATS HIS
RIGHT TO RECEIVE A BASIC ALLOWANCE FOR QUARTERS, EFFECTIVE THE DATE OF
THE ASSIGNMENT. SEE TABLE 3-2-8, RULE 1, DODPM.
THERE BEING NO BASIS FOR PAYMENT OF THE VOUCHER ACCOMPANYING YOUR
REQUEST, IT IS BEING RETAINED IN THE FILES OF THIS OFFICE.
B-170198 L/M, SEP 2, 1970
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