B-235793, Oct 11, 1989, 89-2 CPD 337
B-235793: Oct 11, 1989
PROCUREMENT - Competitive Negotiation - Requests for proposals - Amendments - Issuance - Lacking DIGEST: Although contracting agency should have amended solicitation to indicate that it would consider offers of vaccine in single-dose vials along with the multi-dose vials specified in the solicitation. Award based on single- dose vials was proper because single-dose vials will meet the agency's needs and there is no indication that protester could have offered a lower price on single-dose vials which are more expensive to produce. Connaught argues that the contract awarded to Praxis was contrary to the terms of the solicitation and should be terminated and either the award made to the protester or the solicitation amended and another round of offers solicited.
B-235793, Oct 11, 1989, 89-2 CPD 337
PROCUREMENT - Competitive Negotiation - Requests for proposals - Amendments - Issuance - Lacking DIGEST: Although contracting agency should have amended solicitation to indicate that it would consider offers of vaccine in single-dose vials along with the multi-dose vials specified in the solicitation, award based on single- dose vials was proper because single-dose vials will meet the agency's needs and there is no indication that protester could have offered a lower price on single-dose vials which are more expensive to produce.
Connaught Laboratories, Inc.:
Connaught Laboratories, Inc., protests the award of a contract to Praxis Biologics, Inc., under request for proposals (RFP) No. 89-61(N) issued by the Centers for Disease Control (CDC) for Haemophilus b Conjugate vaccine. Connaught argues that the contract awarded to Praxis was contrary to the terms of the solicitation and should be terminated and either the award made to the protester or the solicitation amended and another round of offers solicited. We deny the protest.
CDC issued the solicitation on February 28, 1989, for vaccine to be used in federal immunization programs on an indefinite quantity basis for a period of 1 year from the date of award. The solicitation required offerors to submit per dose unit prices based on a maximum of 2 million doses and a minimum of 250,000 doses and called for five and ten-dose vials of the vaccine. The solicitation also required offers of a "standard commercial item, manufactured under a current establishment and product license issued by the Food and Drug Administration (FDA)."
Under the heading "Award Criteria," the solicitation provided that "award shall be made to the low responsible offeror, possessing a current FDA license and operating in accordance with the current Good Manufacturing Regulations. ..."
Cannaught and Praxis submitted the only offers. According to CDC, they are the only firms qualified to produce the Haemophilus b Conjugate vaccine. CDC determined that both firms were in the competitive range. It therefore conducted discussions with and requested best and final offers (BAFOs) from both.
In the BAFOs, Praxis priced its vaccine at $6.00 per dose for both five- dose and ten-dose vials and Connaught offered its vaccine at $6.88 per dose for five-dose and ten-dose vials.
Based on Praxis' low price, CDC awarded the contract to that firm. While Praxis' offer was based on the five and ten-dose vials, the contract include a provision which allows Praxis to deliver, at the $6.00 per dose price, single-dose vials in lieu of the multi-dose vials until FDA approval of Praxis' sale of multi-dose vials. The record shows that at the time of award Praxis' FDA license did not include multi-dose vials.
Subsequent to Connaught's protest on June 22, CDC determined that it was in the best interest of the government to authorize contract performance notwithstanding the protest. On September 21, FDA approved an amendment to Praxis' license for Haemophilius b Conjugate vaccine to allow the firm to distribute five and ten-dose vials. According to CDC, Praxis delivered single-dose vials until September 23 and since that date has delivered multi-dose vials of the vaccine.
Connaught argues that because Praxis' FDA license did not cover five and ten-dose vials of the vaccine when the contract was awarded, the award to Praxis was improper. In this respect, the protester maintains that the RFP requirement that offerors possess a current FDA license to sell multi- dose vials was a prerequisite for award and notes that the FDA requires that multi-dose vials contain a preservative while none is needed for single-dose vials.
Connaught concludes that it should have received the award under the terms of the RFP since it was the only offeror at the time of award currently licensed to sell the vaccine in the required multi-dose vials. Alternatively, the protester says that if the agency's minimum needs can be met by single-dose vials, the requirement should be recompeted on that basis so that Connaught could prepare its proposal with full knowledge of the extent of competition.
In response, CDC argues that Praxis offered to meet all material terms of the solicitation since there is no difference in the quality or consistency of the vaccine used in the various vial sizes. It is, according to the agency, the same product with different packaging. this respect, CDC argues that the addition of a preservative is the only difference between the vaccine in single and multi-dose vials and that the preservative is added to multi-dose vials simply to minimize the risk of biological contamination which might occur due to multiple punctures of those vials. The agency maintains that the preservative does not change the underlying composition of the immunologic active components of the vaccine and does not affect its stability or its ability to generate antibody levels. The agency concludes that the single-dose vials meet its needs and are easier to use and for that reason are actually preferred by its customers.
The agency says further it specified multi-dose vials because it believed that single-dose vials would be too expensive. In this regard, the agency explains that single-dose vials of vaccine are more expensive per dose to produce than multi-dose vials because of cost efficiencies in the production of multi-dose vials. For instance, according to CDC, while each single-dose vial has its own closure, seal and label, requiring ten of each of those components for ten doses of vaccine, a ten-dose vial would only require a single one of each of these components. Under the circumstances, CDC argues that by awarding a contract to Praxis, it simply accepted a product that exceeds its minimum needs at a lower price.
The solicitation clearly required offers of only five and ten-dose vials of vaccine. Thus, we agree with the protester that the contract awarded to Praxis, which allowed the firm to supply single-dose vials of vaccine until its license was amended, was inconsistent with the solicitation. This occurred because Praxis was licensed for only single-dose vials, while Connaught is the only other firm licensed to produce the vaccine and the agency's need for the vaccine could also be satisfied by single-dose vials.
When the agency concluded that its needs could be met by single-dose vials, it should have amended the RFP to inform all offerors of the changed requirements. See Federal Acquisition Regulation (FAR) Sec. 15.606(a); Ohmeda, a Division of the BOC Group Inc., B-228607, Nov. 30, 1987, 87-2 CPD Para. 529. Nonetheless, we do not believe that the record shows that the protester was prejudiced by the agency's failure to do so and therefore, we do not believe that the award should be disturbed.
While not disputing that, in general, single-dose vials cost more to make than multi-dose vials, the protester notes that the solicitation called for five and ten-dose vials without specifying the percentage of each to be ordered. According to Connaught, because of this, it was not able to base its price on the efficiencies afforded by large volume production of a particular dose size. The protester argues that since Praxis, on the other hand, could use single-dose vials for both requirements it could factor into its price the efficiencies of large scale production. The protester argues that given the same opportunity it could have offered a lower price.
We do not think the record supports Connaught's position. First, Praxis' request for an FDA product license amendment to produce five and ten-dose vials was pending when the firm submitted its proposal and, under the terms of the contract, once FDA approved that amendment Praxis was required to supply five and ten-dose vials, thus losing any alleged advantage afforded by large scale production of only single dose vials. Moreover, Praxis' license amendment was approved and Praxis is now obligated to supply and is supplying five and ten-dose vials of vaccine. Thus, there is no reason to believe that Praxis had the advantage of basing its price on the large volume production of a single vial size as Connaught maintains.
The only other conceivable prejudice to the protester is that in assessing its position in the industry and arriving at its price, Connaught might have made the assumption that Praxis would not be a competitor because the firm's FDA license did not cover five and ten dose vials of the vaccine. Since Praxis was free to seek licensing for the larger-dose vials, however, and in fact had done so, any prejudice to Connaught occurred as a result of its own business choice based on the firm's speculation as to the status of Praxis' license. In our opinion, this does not warrant disturbing the procurement. See Ohmeda, a Division of the BOC Group, Inc., B-228607, supra.
The protest is denied.