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the said Executive order or by rule, regulation, or order of the President's Committee on Equal Employment Opportunity, or as otherwise provided by law. (g) The Contractor will include the provisions of the foregoing paragraphs (a) through (f) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the President's Committee on Equal Employment Opportunity issued pursuant to section 303 of Executive Order No. 10925 of March 6, 1961, so that such provisions will be binding upon each subcontractor or vendor. The Contractor will take such action with respect to any subcontract or purchase order as the Director may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided, however, That in the event the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the Director, the Contractor may request the United States to enter into such litigation to protect the interests of the United States.

31. Officials Not To Benefit

No member of or delegate to Congress or resident commissioner, shall be admitted to any share or part of this Agreement, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this Agreement if made with a corporation for its general benefit.

32. Covenant Against Contingent Fees

The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this Agreement without liability or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee.

33. Utilization of Small Business Concerns

(a) It is the policy of the Government as declared by the Congress that a fair proportion of the purchases and contracts for supplies and services for the Government be placed with small business concerns.

(b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns that the Contractor finds to be consistent with the efficient performance of this Agreement.

34. Utilization of Concerns in Labor Surplus Areas

It is the policy of the Government to place contracts with concerns which will perform such contracts substantially in areas of persistent or substantial labor surplus where this can be done, consistent with the efficient performance of the contract, at prices no higher than are obtainable elsewhere. The Contractor agrees to use his best efforts to place his subcontracts in accordance with this policy. In complying with the foregoing and with subparagraph 33(b) of this Agreement the Contractor in placing his subcontracts shall observe the following order of preference: (a) persistent labor surplus area concerns which are also small business concerns; (b) other persistent labor surplus area concerns; (c) substantial labor surplus area concerns which are also small business concerns; (d) small business concerns which are not labor surplus area concerns. 35. Buy American Act

In the performance of the work covered by this Agreement the Contractor, subcontractors, material men or suppliers, shall use only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States. The foregoing provision shall not apply to such articles, materials, or supplies of the class or kind to be used or such articles, materials, or supplies from which they are manufactured, as are not mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality, or to such articles, materials, or supplies as may be excepted by the Secretary of the Interior under the proviso of Title III, Section 3, of the Act of Congress approved March 3, 1933 (U.S. Code, title 41, sec. 10b).

36. Liability

(a) The Joint Venturers comprising the Contractor shall be jointly and severally liable for compliance with the terms of this Agreement.

(b) The corpus of the trusts, on behalf of which Herbert Schoenbrod has become a Joint Venturer in Supara, shall be liable for all financial obligations of the Contractor under Section 9 of this Agreement, and shall also be liable to the extent of $1,000,000 for all other financial obligations of the Contractor under this Agreement.

37. Notices

Any notice which the Government is required to deliver to the Contractor under this Agreement shall be deemed to be delivered when mailed to or delivered to Norton Shapiro at the facility of the Contractor, required by Section 3. of this Agreement, in St. Louis, Missouri. Until the Contractor shall notify the Director of the completion of and the address of said facility, such notices shall be deemed delivered when mailed to or delivered to Herbert Schoenbrod at 134 North LaSalle Street, Chicago, Illinois. Supara, a Joint Venture, by




as Trustee of F. L. P. Trusts,
No. 1 to 23, Joint-Venturer.

The United States of America, by

(Signed) D. OTIS BEASLEY, Administrative Assistant Secretary, Department of the Interior.


Comptroller General's decision regarding the contract between the
Department of the Interior and Supara

Washington, DC., October 10, 1963.


DEAR MR. SECRETARY: Reference is made to a protest by Fouke Fur Co. against the action of your Department in awarding a contract for the processing and sale of Alaska sealskins to a joint venture known as Supara.

As indicated by the record before this Office, this procurement was initiated by an invitation for proposals issued by your Department under date of June 20, 1962, as a result of the termination effective December 31, 1962, of a contract with Fouke Fur Co., which company has performed such services for the Government under successive contracts since 1921.

The invitation for proposals in question advised prospective contractors, in pertinent part, as follows:

"The proposals invited hereunder are for a contract which will be negotiated in accordance with the Federal procurement regulations. (See attachments concerning standard contract provisions and principles to be observed in negotiated contracts.)"

The "attachments" referred to in the foregoing, insofar as they are pertinent to the principles to be observed in the negotiation of the contract, were set out as follows in a portion of the invitation entitled "Contract Negotiation and Award":

"The invitation solicits proposals for a contract which will be negotiated in accordance with Federal procurement regulations. For the information of prospective contractors there are stated herein, and in the attachments, certain policies and regulations relating to the negotiation and award of contracts, together with clauses to be incorporated in the contract.


"The following excerpts from the departmental manual state policies, procedures, and responsibilities which will be applicable to the negotiation and award of contracts.

"In general, it is the policy of the U.S. Government to contract with the person or concern offering, through sealed bids opened publicly, to meet the Government's specifications and to provide the supplies or service at the lowest cost. "Contracting officers are cautioned that the negotiated contracting authority should be exercised only in justifiable circumstances and should not be interpreted as implying any relaxation of the requirements for competition.

"Contracting by negotiation does not require compliance with the rigid limitations of formal advertising, bid and award procedures, and determination of the person or concern to be awarded the contract is less automatic. It allows, to a greater extent than formal advertising, the exercise of sound business judgment but in no way decreases the responsibility of the contracting officer for properly protecting the interests of the Government.

"Whenever a contract is to be negotiated, price quotations and all other necessary information shall be solicited from such qualified sources as are deemed necessary by the contracting officer to assure adequate competition. Due consideration must be given to the national policies affecting small business and areas of substantial unemployment.

"All solicitations of offers shall provide a fixed time for receipt of offers, prior to which no award shall be made. This requirement is not intended to preclude further negotiation or consideration of offers or modifications received after the fixed time, but prior to the award. Necessary precautions must be taken to avoid prejudice to any offerors by inadvertent disclosure of negotiations in process, such as prices quoted, the number of offers received, or the names of firms from which offers have been received.

"It is the responsibility of the contracting officer conducting negotiations to give consideration to the following and any other applicable factors:

"(a) The business reputation and responsibility of the respective persons or concerns submitting quotations.

"(b) The quality of the supplies or services offered, or the quality of similar supplies or services previously furnished, with due regard to compliance with technical requirements.

"(c) Prices quoted, and consideration of other prices for the same or similar supplies or services, with due regard to cost of transportation, cash discounts, and any other factors relating to prices.

"(d) Delivery requirements."

The invitation advised prospective contractors that limited numbers of cured sealskins, both males and females, would be made available "to those firms which request them and which are qualified to carry out experimental processing," and that samples of finished skins must accompany written proposals submitted in response to the invitation. With respect to processing of the sealskins, the invitation advised as follows:

"Processing sealskins includes all operations, physical and chemical, manual and mechanical, to which the pelts are subjected in order to obtain the finished fur ready for use by the furrier.

"It is essential for the leather to possess certain qualities after being dressed; e.g., softness, lightness of weight, elasticity, and a certain fineness or 'feel.' In other words, the important considerations in dressing Alaska sealskins are the employment of means and the exercise of care to preserve and improve those characteristics of the pelt which make it valuable. A brief description of the general processes, based largely on information published some years ago by the Bureau of Fisheries, Department of Commerce, follows. This is not intended to exclude other processes or practices which a processor may elect to utilize in producing a high quality luxury product."

Concerning the evaluation of proposals, the invitation provided as follows: "Proposals submitted hereunder will be evaluated to determine whether the applicants qualify as responsible prospective contractors. In order to qualify as responsible, a prospective contractor must, in the opinion of the contracting officer, meet the following standards of the Federal procurement regulations as they relate to this particular procurement:

"(1) He must be a service contractor or such other person or firm as may be qualified and responsible as a source of supply. The term 'service contractor' means a person or firm who, before being awarded a contract, satisfies the con

tracting officer that he qualifies as one who owns, operates, or maintains a place of business regularly engaged in performing nonpersonal services or who, if newly entering into a service activity, has made all necessary prior arrangements for personnel, service equipment, and required licenses to perform services. "(2) He must have adequate financial resources for performance, or have the ability to obtain such resources as required during performance.

"(3) He must have the necessary experience, organization, technical qualifications, skills, and facilities, or have the ability to obtain them (including probable subcontractor arrangements).

"(4) He must be able to comply with the proposed or required time of delivery or performance schedule.

"(5) He must have a satisfactory record of integrity, judgment, and performance.

"To facilitate an analysis of the proposal, the applicant must furnish a statement of his financial condition, evidence of his experience, and business and personal references, as well as such additional data as he may consider pertinent to the evaluation of his offer.

"The Bureau of Commercial Fisheries will also conduct a survey of the applicant's background and make an overall inspection of the applicant's plant and operations to evaluate his financial status, ability, and competence to carry on the processing and/or sale of sealskins."

The invitation further provided that "the Bureau of Commercial Fisheries reserves the right, as the interest of the Government may require, to reject any or all proposals and to negotiate further with any qualified firm.”

As originally issued, the proposal form furnished to prospective contractors with the invitation required offerors proposing to process sealskins to state the location and a description of their facilities. By addendum No. 1 dated August 22, 1962, this requirement was revised as follows:

"If any firm making such an offer does not presently have facilities adequate for this purpose, it shall state in the proposal how it intends to acquire the necessary plant, processing facilities, personnel, etc., in order to qualify as a responsible prospective contractor meeting the standards set forth in the invitation. Firm commitments for these facilities and personnel need not be concluded prior to submission of the proposal. However, the proposal must contain a sufficiently detailed plan as to how the firm proposes to perform the work for the contracting officer to determine that further consideration of the proposal is warranted. If the firm is invited to enter into negotiations for a contract it must demonstrate to the satisfaction of the contracting officer that within 1 year it can have adequate facilities for processing up to 80,000 skins per year."

As a result of the invitation raw skins were requested by and furnished to 11 firms and individuals. Five firms submitted proposals, together with sample skins, prior to the established deadline of November 1, 1962. These firms were:

Pierre Laclede Fur Co., St. Louis, Mo.

Supara, Inc., Chicago, Ill.

Fouke Fur Co., Greenville, S.C.

C. W. Martin & Sons, Ltd., London, England.
Jonas Brothers, Seattle, Wash.

In order to establish evaluation standards for the 101 sample skins submitted with these proposals, 60 processed skins were selected from the stock on hand of Fouke Fur Co. to be used as the standard of comparison for the sample skins. Such "standard skins" were then classified as "Black," "Matara," "Kitovi," and "Lakoda” and given to a panel composed of nine Government employees for subjective inspection. Except for Lakoda (female) skins, all skins were evaluated on the following categories:

1. Uniform appearance and texture of the fur.

2. Velvety appearance and smoothness of fur to the touch.

3. Free flow of fur under stroke of hand.

4. Luster.

5. Uniformity of color.

6. Depth and richness of color.

7. Suppleness and pliability of leather.

8. Density of fur cover.

Lakoda skins were evaluated on the basis of points 1, 4, 5, 7, and a ninth category entitled "condition of pelt."

All skins were rated excellent, good, fair, or poor in each category except "luster" which was rated high, medium, or low. The ratings were determined by


giving 4 points for excellent, 3 for good, 2 for fair, 1 for poor; 3 points for low luster, 2 for fair, and 1 for high. While the failure of some of the panel members to rate the standard "black" skins on all points precluded an average point rating for such skins, the average point rating on the Fouke standard skins for the remaining categories was as follows:

Matara, 179.
Kitovi, 175.

Lakoda, 105.

The 101 sample skins were then submitted to a Government panel, composed of seven members of the original panel, for evaluation on the same basis as the standard skins. In addition, the sample skins were submitted for evaluation on the same basis by five prominent members of the fur industry. The report by the National Bureau of Standards to your Department sets out the results of the panels' evaluations as follows:

"Each skin rated by the panels as described in test No. 1 under description of tests was given a total point rating, which is composed of the grand totals for all panel members of the ratings in the eight categories for regular skins and five categories for sheared skins. An average rating in points for the Government standard skins was calculated from the ratings of the Government panel for Matari, Kitovi, and Lakoda, and is given in the table for test No. 1 (app. I).

"The rankings of the top proposal Alaska sealskins by both the Government and industry panels are given in tables 1(a) and 1(b) (app. II). Rank 1 is given to the skins receiving the greatest number of points; the rankings increase in number as the points decrease. At least six skins from each company are included in the table for regular skins (1a). The agreement between the two panels on the rankings for individual skins is only fair. However, the agreement in the relative rankings for the individual companes is very good. If the totals of the rankngs of the top six skins from each company are tabulated, the following data is obtained:

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"These results show that the order of preference for both panels was Fouke No. 1, Supara No. 2, and Pierre Laclede No. 3. It should be observed that all the skins listed under the rankings of the Government panel are above the average for the Government standard skins.

"In a similar procedure rankings were made for the top sheared skins from the point ratings of the Government and industry panels, using the top two skins only from each company since Fouke submitted only two sheared skins. This gives the following results:

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