B-219909.2, JAN 15, 1986, 86-1 CPD 41

B-219909.2: Jan 15, 1986

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FEDERAL AGENCIES MUST DETERMINE WHETHER THE REQUIRED SUPPLIES OR SERVICES ARE AVAILABLE UNDER A MANDATORY FEDERAL SUPPLY SCHEDULE CONTRACT. AN AGENCY'S DETERMINATION TO CANCEL A SOLE-SOURCE PROCUREMENT AND TO ACQUIRE A PRODUCT LISTED ON A MANDATORY FEDERAL SUPPLY SCHEDULE IS NOT IMPROPER MERELY BECAUSE THE PRODUCT OBTAINED DIFFERS FROM THE ONE THE AGENCY ORIGINALLY INTENDED TO PURCHASE. THE DETERMINATION AS TO WHICH PRODUCT ON A FEDERAL SUPPLY SCHEDULE MEETS ITS NEEDS IS PRIMARILY THE RESPONSIBILITY OF THE PROCURING ACTIVITY. SUCH DETERMINATIONS WILL NOT BE QUESTIONED UNLESS THEY CLEARLY INVOLVE BAD FAITH OR ARE NOT BASED ON SUBSTANTIAL EVIDENCE. WHICH IS FOR AN ELECTRODIAGNOSTIC TESTING SYSTEM.

B-219909.2, JAN 15, 1986, 86-1 CPD 41

CONTRACTS - FEDERAL SUPPLY SCHEDULE - MANDATORY USE REQUIREMENT DIGEST: 1. BEFORE SOLICITING COMMERCIAL SOURCES, FEDERAL AGENCIES MUST DETERMINE WHETHER THE REQUIRED SUPPLIES OR SERVICES ARE AVAILABLE UNDER A MANDATORY FEDERAL SUPPLY SCHEDULE CONTRACT. IF SO, THE SUPPLIES OR SERVICES GENERALLY MUST BE PURCHASED FROM THE FSS CONTRACTOR. CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - DETERMINATION NOT TO USE - PROPRIETY 2. AN AGENCY'S DETERMINATION TO CANCEL A SOLE-SOURCE PROCUREMENT AND TO ACQUIRE A PRODUCT LISTED ON A MANDATORY FEDERAL SUPPLY SCHEDULE IS NOT IMPROPER MERELY BECAUSE THE PRODUCT OBTAINED DIFFERS FROM THE ONE THE AGENCY ORIGINALLY INTENDED TO PURCHASE. THE DETERMINATION AS TO WHICH PRODUCT ON A FEDERAL SUPPLY SCHEDULE MEETS ITS NEEDS IS PRIMARILY THE RESPONSIBILITY OF THE PROCURING ACTIVITY, AND SUCH DETERMINATIONS WILL NOT BE QUESTIONED UNLESS THEY CLEARLY INVOLVE BAD FAITH OR ARE NOT BASED ON SUBSTANTIAL EVIDENCE.

BIO-LOGIC SYSTEMS CORP.:

BIO-LOGIC SYSTEMS CORP. PROTESTS THE PLACEMENT OF A DELIVERY ORDER UNDER FEDERAL SUPPLY SCHEDULE (FSS) CONTRACT NO. V797P-3761G, HELD BY THE BIOMEDICAL DIVISION OF NICOLET INSTRUMENT CORP. THE HARRY S. TRUMAN VETERANS HOSPITAL, COLUMBIA, MISSOURI, PLACED THE ORDER, WHICH IS FOR AN ELECTRODIAGNOSTIC TESTING SYSTEM, ON SEPTEMBER 10, 1985.

BIO-LOGIC CONTENDS THAT THE SYSTEM PURCHASED DOES NOT MEET ALL THE SPECIFICATIONS ORIGINALLY PRESCRIBED BY TECHNICAL PERSONNEL AT THE PROCURING ACTIVITY. BIO-LOGIC ALSO STATES THAT IT OFFERED EITHER A NEW SYSTEM THAT WAS AVAILABLE (ALTHOUGH NOT ON THE FSS) AT AN INTRODUCTORY PRICE THAT WAS LOWER THAN NICOLET'S FSS CONTRACT PRICE OR A SYSTEM THAT WAS AVAILABLE ON ITS OWN FSS CONTRACT AT A PRICE LESS THAN NICOLET'S.

WE DENY THE PROTEST.

THE VA INITIALLY ISSUED A SOLICITATION FOR THE SYSTEM, TO BE USED BY ITS AUDIOLOGY AND SPEECH PATHOLOGY CLINICS, ON AUGUST 30. THE SOLICITATION WAS FOR A BIO-LOGIC "TRAVELER II," WHICH THE PROCURING ACTIVITY INTENDED TO PURCHASE ON A SOLE SOURCE BASIS FROM EMI LABORATORIES, BIO-LOGIC'S LOCAL DISTRIBUTOR. TECHNICAL PERSONNEL HAD PREVIOUSLY DETERMINED THAT ONLY THIS SYSTEM SATISFIED ALL THEIR NEEDS AND THAT THE SOLE SOURCE WAS JUSTIFIED BECAUSE EMI HAD SUPPLIED AND SERVICED MOST OF THE HOSPITAL'S AUDIOLOGICAL EQUIPMENT FOR THE PAST 12 YEARS. THE ESTIMATED COST OF THE BIO-LOGIC WAS $26,000.

NICOLET, WHICH HAD REQUESTED A COPY OF THE SOLICITATION FOLLOWING A COMMERCE BUSINESS DAILY SYNOPSIS, SUBSEQUENTLY INFORMED THE VA THAT ITS "COMPACT FOUR" SYSTEM WITH ELECTRONSTAGMOGRAPHY (ENG) CAPABILITIES MET SPECIFICATIONS AND WAS AVAILABLE UNDER AN FSS CONTRACT. TECHNICAL PERSONNEL AGREED THAT NICOLET'S SYSTEM WOULD SATISFY THEIR NEEDS, AND, AS A RESULT, THE VA CANCELED THE PREVIOUSLY-ISSUED SOLICITATION ON SEPTEMBER 6.

THE VA THEN ISSUED A PURCHASE ORDER TO NICOLET IN THE AMOUNT OF $29,248.50, AND THREE ADDITIONAL ORDERS TOTALING $4,487 TO OTHER FIRMS FOR ACCESSORY ITEMS NOT PROVIDED BY NICOLET. BIO-LOGIC'S PROTEST IS AGAINST THE ISSUANCE OF THESE ORDERS.

PRELIMINARILY, WE NOTE THAT ONCE THE VA DETERMINED THAT NICOLET'S "COMPACT FOUR" SYSTEM SATISFIED ITS MINIMUM NEEDS, IT WAS REQUIRED TO CANCEL THE SOLE SOURCE SOLICITATION FOR THE BIO-LOGIC SYSTEM. APPLICABLE REGULATIONS STATE THAT BEFORE SOLICITING COMMERCIAL SOURCES, FEDERAL AGENCIES MUST DETERMINE WHETHER THE REQUIRED OR SIMILAR SUPPLIES OR SERVICES ARE AVAILABLE UNDER A MANDATORY FSS CONTRACT. IF SO, THE SUPPLIES MUST BE ACQUIRED FROM THE FSS CONTRACTOR, EXCEPT IN SITUATIONS NOT PRESENT HERE. /1/ SEE FEDERAL ACQUISITION REGULATION (FAR), 48 C.F.R. SEC. 8.404 (1984); FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR), 41 C.F.R. SEC. 101-26.401 (1985); SCHLEGEL ASSOCIATES, INC., B-217366, MAR. 6, 1985, 85-1 CPD PARA. 279. THIS IS BECAUSE THE GENERAL SERVICES ADMINISTRATION NEGOTIATES FSS CONTRACT PRICES TO PROVIDE FEDERAL AGENCIES WITH A SIMPLIFIED PROCESS FOR OBTAINING COMMONLY USED SUPPLIES AND SERVICES AT PRICES ASSOCIATED WITH VOLUME BUYING. SEE FAR, 48 C.F.R. SEC. 8.401. WHEN THE MANUFACTURER OF A NEW OR IMPROVED PRODUCT SUCH AS THE BIO -LOGIC "TRAVELER II" WISHES TO INTRODUCE THAT PRODUCT INTO THE FEDERAL SUPPLY SYSTEM, THERE ARE SPECIFIC PROCEDURES FOR DOING SO. ID. SEC. 8.403.3.

PRIMARILY, BIO-LOGIC CHALLENGES THE VA'S DETERMINATION THAT NICOLET'S "COMPACT FOUR" SYSTEM SATISFIES ITS MINIMUM NEEDS. FIRST, BIO-LOGIC QUESTIONS WHETHER THIS PRODUCT COMPLIES WITH THE HOSPITAL'S REQUIREMENT FOR ENG CAPABILITIES. OTHER THAN REFERRING TO ITS PAST EXPERIENCE WITH NICOLET'S SYSTEM, HOWEVER, BIO-LOGIC HAS NOT PRESENTED ANY EVIDENCE SUGGESTING THAT THIS PRODUCT DOES NOT CURRENTLY HAVE ENG CAPABILITIES. MOREOVER, THE VA STATES THAT ITS TECHNICAL PERSONNEL CAREFULLY REVIEWED NICOLET'S OFFER BEFORE DETERMINING THAT IT SATISFIED THIS REQUIREMENT. DETERMINATIONS AS TO WHICH PRODUCT ON A FSS CONTRACT MEET AN AGENCY'S NEEDS ARE PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY, AND WE WILL NOT INTERFERE WITH THEM UNLESS THEY CLEARLY INVOLVE BAD FAITH OR ARE NOT BASED ON SUBSTANTIAL EVIDENCE. SEE AMERICAN STERILIZER CO., B-212933, JAN. 26, 1984, 84-1 CPD PARA. 122. IN VIEW OF THE CONFLICTING STATEMENTS FROM THE PROTESTER AND THE AGENCY, AND THE LACK OF EXTRANEOUS EVIDENCE, WE CONCLUDE THAT THE AGENCY'S DETERMINATION THAT NICOLET'S MACHINE SATISFIED THE ENG REQUIREMENT NEITHER INVOLVED BAD FAITH NOR WAS BASED ON INSUBSTANTIAL EVIDENCE.

SECOND, BIO-LOGIC CONTENDS THAT NICOLET'S MACHINE WILL NOT OTHERWISE SATISFY THE VA'S NEEDS. SPECIFICALLY, BIO-LOGIC ALLEGES THAT NICOLET'S SYSTEM IS NOT AS COMPACT OR PORTABLE AS ITS OWN, AND THAT IT CANNOT BE UPGRADED TO DO TOPOGRAPHIC BRAIN MAPPING. WHILE THESE DIFFERENCES MAY EXIST, AGAIN WE HAVE NO LEGAL BASIS TO QUESTION THE VA'S DECISION THAT ITS MINIMUM NEEDS NEVERTHELESS CAN BE FULFILLED BY THE NICOLET SYSTEM THAT IS AVAILABLE UNDER THE FSS CONTRACT. SEE SECURITY MANAGEMENT ASSOCIATES, B-214186, JULY 23, 1984, 84-2 CPD PARA. 83.

WE ALSO REJECT THE PROTESTER'S CONTENTION THAT THE VA IMPROPERLY DETERMINED THAT THE BIO-LOGIC SYSTEMS AVAILABLE UNDER THE FIRM'S FSS CONTRACT WERE UNSATISFACTORY. BIO-LOGIC ACKNOWLEDGES THAT THE "TRAVELER II" IS NOT AVAILABLE UNDER ITS FSS CONTRACT, BUT IT MAINTAINS THAT ITS OTHER SYSTEMS, WHICH IT ALLEGES ARE SO AVAILABLE, ALSO WILL MEET THE AGENCY'S NEEDS. IT APPEARS FROM THE RECORD, HOWEVER, THAT BIO LOGIC'S OTHER SYSTEMS WERE NOT AVAILABLE UNDER AN FSS CONTRACT WHEN THE VA ISSUED THE DELIVERY ORDER ON SEPTEMBER 10. THE CONTRACTING OFFICER STATES THAT BIO-LOGIC'S FSS CONTRACT, AWARDED ON JULY 25, 1984, EXPIRED ON JULY 31, 1985, AND THAT ANOTHER FSS CONTRACT WAS NOT AWARDED TO BIO LOGIC UNTIL SEPTEMBER 12. BIO-LOGIC HAS NOT REFUTED THIS OR SHOWN THAT IT INDEED HAD AN FSS CONTRACT ON THE DATE THE DELIVERY ORDER WAS ISSUED.

MOREOVER, EVEN IF BIO-LOGIC HAD A FSS CONTRACT ON THE CRITICAL DATE, BIO- LOGIC'S CONTENTION THAT ONE OF ITS SYSTEMS SHOULD HAVE BEEN ORDERED STILL MUST BE REJECTED. THE RECORD SHOWS THAT AFTER TECHNICAL PERSONNEL DISCUSSED THE CAPABILITIES OF BIO-LOGIC'S OTHER PRODUCTS WITH EMI, THE VA DETERMINED THAT THEY WOULD NOT PERFORM THE FULL VARIETY OF ELECTRODIAGNOSTIC PROCEDURES REQUIRED. OTHER THAN MAKING CONCLUSIONARY STATEMENTS, BIO-LOGIC HAS FAILED TO PRESENT ANY EVIDENCE IN SUPPORT OF ITS POSITION. CONSEQUENTLY, WE HAVE NO BASIS ON WHICH TO CHALLENGE THE AGENCY'S DETERMINATION THAT THESE OTHER BIO-LOGIC SYSTEMS DID NOT POSSESS ALL THE REQUIRED FEATURES. SEE AMERICAN STERILIZER CO., SUPRA.

THE PROTEST IS DENIED.

/1/ ONE EXCEPTION TO THE MANDATORY USE REQUIREMENT IS WHERE THE ORDERING OFFICE FINDS THAT AN "IDENTICAL PRODUCT (MAKE AND MODEL)" IS AVAILABLE FROM ANOTHER SOURCE AT A PRICE LOWER THAN THE FSS PRICE. SEE FEDERAL ACQUISITION REGULATION, 41 C.F.R. SEC. 8.401-1(E) (1984); FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR), 41 C.F.R. SEC. 101 26.401-4(F) (1985). INTERPRET THE TERM "IDENTICAL PRODUCT" TO MEAN AN EXACT DUPLICATE OF THAT ON THE FSS, I.E., THE SAME MODEL, PRODUCED BY THE SAME MANUFACTURER. UNDER THIS PROVISION, AGENCIES ARE PERMITTED TO PURCHASE AN "IDENTICAL" PRODUCT EITHER DIRECTLY FROM THE MANUFACTURER OR INDIRECTLY FROM A DEALER. SEE OFFICE OF INTERIOR FURNISHINGS, B-191655, SEPT. 5, 1978, 78-2 CPD PARA. 168. THE EXCEPTION IS NOT APPLICABLE WHERE, AS HERE, THE PRODUCT AVAILABLE FROM ANOTHER SOURCE IS MERELY FUNCTIONALLY EQUIVALENT TO THAT ON THE FSS, AND NOT "IDENTICAL" TO IT.