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< MAR 12 B84 i l
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6 The' Honorable 'liichael' D. Barnes
- " United States House of Representatives .
l Washington,.D.C. 20515
Dear Congressman Barnes:
I am pleased to respond to your February 9,1984 inquiry on hehalf of-your constituent, Ann Riley of Tayloe Associates, regarding the I:RC decision not to exercise the' option to extend the Tayloe contract. i
-Contract No. HRC-17-83-399 was awarded to Tayloe Associates for the NRC stenographic reporting requirements throughout the United States, '
including the Washington, .D.C. area, for the period March 16, 1983 l
-through March 15.-1984. . The contract provides that the term may be.
extended for an additional twelve months at the option of the Govern- l ment, provided. that a preliminary notice of intent to extend is given to the contractor. at least 30 days before the contract expires. - Contrary 1
-to Ms. Riley's~ impression, NRC has not exercised -such options routinely.
In fact, the current Tayloe contract is the first for stenographic
- services which contained an option provision.
Before an option may be' exercised, the Contracting Officer must determine,.
in writing, that exercise of the option is the most advantageous method of fulfilling the Government's need. Procurement regulations specify .
Lthat price must be the primary factor in making this determination. Quality-
- of
- service of an incumbent contractor may not be considered. In September 1983, we conducted an infonnal market survey of prices paid by six other
. Government agencies for similar services to determine whether we could anticipate receiving more advantageous pricing by resoliciting the requirement.'.
Our survey could only reflect similar services because of the wide variances l between agencies as to requirements for delivery, travel, complexity of transcripts, and number of copies. ~The survey showed that NRC was generally
- paying more for these services than the other agencies, particularly since NRC reimburses travel costs separately and the other agencies surveyed include such costs in their per page price. The survey was made using the basic contract year prices. The Tayloe prices for the option year ,
- include a 7.5 per cent increase, exclusive of reimbursable travel costs.
In addition - the lack of adequate contract incentives to control travel
- 1 costs through effective use of . subcontracting has resulted in even higher :
per page prices than had been anticipated. Based on the results of our m':
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survey, the determination required by the rederal procurement regulations L that the option year prices were better than. prices available in the market could not be made. Consequently, the option year under the Tayloe contract could not be exercised.
- - He believe that the higher prices under the Tayloe contract were the direct result of the absence of effective price cor. petition. As you r.ay recall,'in May of 1932 (your letter of May 13,19S2 and URC re
- : Lr.se dated June 2,1982), the solicitation for these services was set aside o for srall businesses at the recommendation of the Sr.all Pusints: k.;ini:*o tion (SBA). The solicitation was issued to.76 business concerns ar.d only ti.ree responded. Of the three, Tayloe was the only concern with wi.ar r eaningful negotiations could be conducted.
Based primarily on the history of this procurement, we determir.:d that a combination of a small business set-aside for the !.'2shington, D.C. area and an unrestricted competition for those stenographic reporting ru;uire- ,
ments outside the D.C. area will best serve the needs of the a: Ency and )j the small business community as well as comply with all applicable procurement regulations.
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The notice of HRC's intention to issue two solicitations was published in .the Cornerce Business Daily on January 11, 1984. Tayloe Associates l requested copies of both solicitations by letter dated January 24, 1934. j Copies of the solicitations, SECY-84-327 and ASB-84-352, were r. ailed on January 31, 1984 and February 6,1984, respectively. Unile it is not .
the nornal practice to advise contracr. ors that options will not be exercised, our Administrative Contrasting Officer, Tim Haoan spoke with Tayloe's attorney, Mr. Joe Gallo on January ll,19S4 and advised him o, i our intentions. l Tayloe Associates has perforned well under the present contract and we !
are hopeful that they will be a viable competitor under our two .l solicitations. .
If we can provide further information, please let me know.
Sincerely. .
Original S!;ned by P.atricia Norry i Patricia G. Norry, Director Office of Administration
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