Canon USA, Inc.
B-311254.2: Jun 10, 2008
- Full Report:
Canon USA, Inc. protests the cancellation of an order issued to it by the Department of the Army under request for quotations (RFQ) No. W9124A-08-T-0010, for digital copier services.
We deny the protest.
B-311254.2, Canon USA, Inc., June 10, 2008
Protest that contracting agency improperly cancelled an order under a Federal Supply Schedule (FSS) blanket purchase agreement is denied where the protester's FSS contract expired before the order was issued.
In February 2004, pursuant to Federal Acquisition Regulation (FAR) sect. 8.405-3, the Army established blanket purchase agreements (BPA) with eight contractors holding Group 36 General Services Administration (GSA) Federal Supply Schedule (
In September 2007, Canon and GSA began to negotiate the renewal of Canon's
On December 13, the Army issued the RFQ to the eight BPA holders. Canon submitted a timely offer under the RFQ, as did at least one other BPA holder, Sharp Electronics Corporation. On
On February 15, Sharp filed a protest with our Office alleging that issuance of the order to Canon was improper because Canon's
On March 3, Canon filed this protest with our Office, alleging that cancellation of the order was improper because its BPA remained a valid ordering vehicle through the time the order was issued. Shortly thereafter, the agency filed a motion to dismiss the protest, arguing that Canon was not an interested party to protest the decision because Canon was not eligible to receive an order under its BPA due to the expiration of its
Because the issue raised involves the FSS program, our Office solicited GSA's views on the issue of the BPA's validity. Consistent with the position taken by the Army, GSA's view is that, when a BPA holder's
In response, Canon asserts that GSA fails to address the central issue in the protest, whether the BPA was established pursuant to, and is wholly dependent on, the
We agree with Canon that an
In order for any procurement to be valid, it must be conducted in accordance with the competition requirements set forth in the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. sect. 2304(a)(1)(A) (2000), and FAR part 6. Under 10 U.S.C. sect. 2303(2)(c), contracts awarded under the FSS program pursuant to FAR part 8 satisfy the requirements for full and open competition. As relevant here, FAR sect. 8.405-3(a)(1) authorizes the establishment of BPAs under FSS contracts as a means to fill repetitive needs for supplies or services. It is well-settled, however, that a BPA itself is not a contract; rather, a contract is formed by the subsequent placement of a valid order against the BPA, or by the incorporation of the basic agreement into a new contract. See Envirosolve LLC, B-294974.4,
As with any contract, orders placed under an FSS BPA must satisfy the applicable statutory requirements for competition.
In this case, the record shows that the BPA was issued pursuant to Canon's
Because use of the FSS procedures constitutes full and open competition under 10 U.S.C. sect. 2303(2)(c), orders placed under a valid FSS contract, whether directly or via a BPA, meet the CICA competition requirements. Conversely, in the absence of a valid FSS contract, any order placed under a BPA must independently satisfy the statutory competition requirements; that is, to be a valid ordering vehicle independent from an FSS contract, the BPA itself would have to have been established using procedures that satisfy the statutory requirements for competition. That clearly is not the case here, or in any FSS BPA of this type, given that the pool of vendors that could receive a BPA was limited to FSS contract holders, as directed by FAR sect. 8.404(a) (ordering activities shall not seek competition outside of the Federal Supply Schedules). Consistent with this interpretation, we have stated that an FSS BPA is not established with the contractor directly, but rather is established under the contractor's FSS contract, such that FSS BPA orders ultimately are to be placed against the successful vendor's FSS contract. Panacea Consulting, Inc., B-299307.4, B-299308.4,
Applying this analysis to the facts here, any order placed under Canon's BPA must necessarily be placed through Canon's
The protest is denied.
Gary L. Kepplinger
 This view is consistent with the description of BPAs set out in the FAR. Specifically, FAR sect. 13.303-1 defines BPAs generally as a simplified method of filling anticipated repetitive needs for supplies or services by establishing 'charge accounts' with qualified sources of supply, and refers to FAR part 16.7, Agreements, for further guidance. Both FAR sect. 16.702, Basic agreements, and FAR sect. 16.703, Basic ordering agreements, specifically state that such agreements are not contracts.