Matter of: Dictaphone Corporation File: B-254920 Date: January 6, 1994

Matter of: Dictaphone Corporation File: B-254920 Date: January 6, 1994

Although the total price of a dictation system, consisting of two item numbers on the awardee's Federal Supply Schedule (FSS) contract and a non-FSS, open market item, exceeds the contract's maximum ordering limitation, issuance of a delivery order for the system was reasonable where the total price of the items covered under the awardee's FSS contract was less than the maximum ordering limitation and the non-FSS, open market item appears to be incidental to the acquisition and represents less than 4 percent of the awardee's total system price.

Attorneys

DECISION

Dictaphone Corporation protests the issuance of a delivery order by the Department of Veterans Affairs (VA) for a hospital-wide dictation system to Lanier Worldwide, Inc., under multiple award Federal Supply Schedule (FSS) contract No. GS-OOF-10424. Dictaphone basically argues that the agency improperly issued the delivery order as it exceeded the maximum ordering limitation in Lanier's FSS contract.

We deny the protest.

The dictation systems capable of meeting the VA's technical requirements were available on an FSS schedule for which the VA was a mandatory user. Three firms, including Dictaphone and Lanier, submitted prices and technical information.

The VA issued a delivery order to Lanier for $2OO,878. Included in this total system price were 5 pieces of dictation equipment (item number 47-345-1) and 14 accessory items (item number 47-360) which totaled $192,878 and were available under Lanier's FSS contract. An $8,000 non-FSS, open market item (which would provide an interface between the hospital and radiology information systems), was included as part of Lanier's delivery order.

Lanier's FSS contract for the dictation system ordered by the VA contained the following terms:

"Maximum Order Limitation [MOL]

"(a) The [MOL] will be negotiated individually for each contract . . . . The total dollar value of any order placed under this contract shall not exceed $200,000 . . . .

(b) Item Number MOL

47-345-1 $100,000 47-360 $ 60,000

"Exception: Where the price of any single unit or system is in excess of the MOL, the MOL then becomes the price of the unit or system."

Dictaphone complains that the delivery order exceeds the maximum ordering limitation in Lanier's contract.

An order under an FSS contract may not exceed the established ordering limitation covering the subject matter of that order. Dictaphone Corp., 69 Comp.Gen. 438 (1990), 90-1 CPD Para. 448. Here, the VA issued a delivery order to Lanier for a single, complete dictation system consisting of item numbers 47-345-1 and 47-360, equipment available under Lanier's FSS contract which would meet the VA's technical requirements, and a non-FSS, open market item. While Lanier's total system price is $200,878, the delivery order covering the purchase of this system consists of $192,878 for the FSS items and $8,000 for the non-FSS, open market item. While the price of the two FSS items exceeds the maximum ordering limitation for these individual items, the exception clause in Lanier's FSS contract provides that if the price of the system exceeds this limitation, the dollar limitation then becomes the price of the system. Based on the terms of Lanier's FSS contract, which allows for a waiver of the single item ordering limitation where a system is being purchased, we conclude that the purchase of the two items as a system at Lanier's price of $192,878 does not violate the ordering limitations for these items under Lanier's FSS contract.

Further, regarding the $200,000 total dollar limitation on a purchase under Lanier's FSS contract, the acquisition of the non-FSS, open market item through this delivery order reasonably is not included in the total price to determine if the $200,000 maximum ordering limitation has been exceeded, since by its terms, the limitation refers to the FSS items only. Therefore, since the delivery order covering the purchase of the schedule items ($192,878) is under the overall maximum ordering limitation of $200,000 in Lanier's FSS contract, the agency reasonably issued the delivery order to Lanier.

To the extent Dictaphone questions the VA's decision to include the $8,000 non-FSS, open market item as part of Lanier's delivery order, this item which provides additional interfacing capability appears to be incidental to the overall acquisition and represents an insignificant portion of the total requirement--less than 4 percent of Lanier's total system price. We believe the VA reasonably included this item as part of Lanier's delivery order. See Raymond Corp., B-246410, Mar. 2, 1992, 92-1 CPD Para. 252.

Accordingly, the protest is denied.[1]

1. We point out that Dictaphone's FSS contract contained the same terms as Lanier's FSS contract. The record shows, and Dictaphone does not dispute, that it submitted three unacceptable pricing options to the VA--one where 64 percent of its total system price represented non-FSS, open market equipment; one for equipment on a nonmandatory schedule; and one for equipment which did not meet the VA's technical requirements. In addition, the record shows that Dictaphone's pricing options were all significantly higher than Lanier's total system price.