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B-175079 1 (1972-05-02)

handle is hein.gao/gaobabkjx0001 and id is 1 raw text is: k-, 0 RESTICTED ..- te be beease~ bid. Generna - by the 0MG8 of CoIngreasional RWA COMPTROLLER GENE AL 0 S RELEASED WASHINGTON. 054 IV0X 2 B-175079 Dear Mr. Chairman: Your letter dated January 3, 1972, requested that we study the bidding methods used by the General Services Admin- istration (gA) for awarding utility-service contracts for Federal facilities. The enclosures to your letter were con- cerned principally with the award to The Detroit Edison Com- pany of an electrical-service contract for the Internal Rev- enue Service Data Center, Detroit, Michigan. At a meeting held on February 25, 1972, with your office &K3and the offices of Senators Philip A. Hart and Lee Metcalf, -it was agreed that this report would be concerned with (1) a summary of the circumstances which had led to the issuance of a letter of intent to Detroit Edison, (2) an up-to-date list 0 of all GSA areawide contracts for utilities, and (3) our plans Sto review GSA's procurement and management of utilities for the Government. We examined records at GSA headquarters and at its Chi- cago Regional Office and interviewed officials of GSA, the Public Lighting Commission of the city of Detroit, and Detroit Edison. In August 1970 GSA entered into a lease for a building to be constructed to house the Data Center. The lease agree- ment provided that the lessor furnish all utilities necessary for operating, maintaining, and servicing the space leased. Arrangements were made by the lessor with Detroit Edison to furnish electrical service for the building. In April 1971 the lease agreement was revised to provide that the Government assume responsibility for payment of all metered utilities in exchange for a specified reduction in annual rental. This revision required that GSA obtain the electrical service. GSA officials told us that generally utility companies were sole suppliers and that few instances existed in which competing utilities furnished service in the same geographical