B-170817, SEP. 25, 1970

B-170817, SEP. 25, 1970

BID PROTEST - NEGOTIATION - SPECIFICATION COMPLIANCE DENIAL OF PROTEST AGAINST REJECTION OF OFFER FOR FURNISHING LIVE RUBELLA VACCINE TO VETERANS ADMINISTRATION ON BASIS THAT VACCINE DID NOT COMPLY WITH THE REQUIREMENTS OF THE AMENDED SPECIFICATIONS.

TO ARNOLD & PORTER:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 16, 1970, WITH ENCLOSURES, ON BEHALF OF PHILIPS ROXANE LABORATORIES, INCORPORATED, PROTESTING WITH RESPECT TO SOLICITATION NO. M5-Q44,71, ISSUED BY THE VETERANS ADMINISTRATION, MARKETING DIVISION, DRUGS & CHEMICALS, HINES, ILLINOIS.

IT IS REPORTED THAT IN RESPONSE TO A REQUEST FROM THE CENTER FOR DISEASE CONTROL (CDC), DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, ATLANTA, GEORGIA, TO PURCHASE LIVE RUBELLA VIRUS VACCINE, THE VETERANS ADMINISTRATION ISSUED THE ABOVE-REFERENCED SOLICITATION ON AUGUST 14, 1970. THE PURCHASE OF THE VACCINE WAS TO BE NEGOTIATED AND PROPOSALS WERE TO BE RECEIVED UNTIL 1:00 P.M., SEPTEMBER 11, 1970. ON SEPTEMBER 9, 1970, AMENDMENT NO. 1 TO THE SOLICITATION WAS ISSUED PROVIDING THAT ONLY VACCINE DERIVED FROM DUCK EMBRYO AND/OR RABBIT KIDNEY WOULD BE ACCEPTABLE. FURTHER STIPULATED THAT VACCINE DERIVED FROM CANINE KIDNEY WOULD NOT BE ACCEPTABLE. THE TIME FOR OPENING PROPOSALS WAS EXTENDED UNTIL 2:30 P.M., SEPTEMBER 15, 1970.

SINCE PHILIPS ROXANE'S LIVE VIRUS RUBELLA VACCINE IS DERIVED FROM CANINE KIDNEYS, THE EFFECT OF THE AMENDMENT HAS BEEN TO DISQUALIFY PHILIPS ROXANE FROM ANY POSSIBLE PARTICIPATION IN THE PROCUREMENT OF RUBELLA VACCINE.

YOU ALLEGE THAT THE EXCLUSION OF PHILIPS ROXANE RESULTING FROM THE AMENDMENT TO THE SOLICITATION VIOLATES FEDERAL PROCUREMENT REGULATIONS AS WELL AS BASIC GOVERNMENT PROCUREMENT POLICIES. IN THIS CONNECTION YOU CITE A RECENT DECISION BY OUR OFFICE, B-168069, AUGUST 27, 1970, ALLEGING THAT THIS DECISION "REQUIRES THE GOVERNMENT TO ENGAGE IN GOOD FAITH NEGOTIATIONS WITH ALL RESPONSIBLE OFFERORS, NOTWITHSTANDING ANY POSSIBLE URGENCY IN THE NEED FOR PROCURING THE PRODUCT AND ANY ALLEGED TECHNICAL INADEQUACIES OR ADVERSE TEST RESULTS REGARDING THE PRODUCT OF A PARTICULAR OFFEROR."

IT IS REPORTED THAT BY LETTER DATED SEPTEMBER 2, 1970, CDC, ATLANTA, GEORGIA, ADVISED THE VETERANS ADMINISTRATION THAT BECAUSE OF THE JOINT REACTION RATES FOLLOWING THE USE OF DOG VACCINE, ONLY DUCK EMBRYO AND/OR RABBIT KIDNEY VACCINE WOULD BE ACCEPTABLE. THEREFORE, AMENDMENT NO. 1 TO THIS SOLICITATION WAS ISSUED ON SEPTEMBER 9, 1970.

THE BASIS FOR THE CDC RECOMMENDATION OF SEPTEMBER 2 IS SUMMARIZED IN A MEMORANDUM OF AUGUST 19, 1970, FROM THE ACTING CHIEF, IMMUNIZATION BRANCH, STATE AND COMMUNITY SERVICES DIVISION, CDC, TO THE CHIEF, ADMINISTRATIVE SERVICES, CDC, AS FOLLOWS:

"1. THE NATIONWIDE USE OF 13.0 MILLION DOSES OF THE THREE STRAINS OF LIVE RUBELLA VACCINE IN PUBLIC PROGRAMS IN FY 1970 REVEALED THE FOLLOWING:

(A) JOINT REACTIONS FOLLOWING ADMINISTRATION OF RUBELLA VACCINE OCCUR MORE FREQUENTLY THAN PREVIOUSLY ESTIMATED.

(B) THE RATES FOLLOWING DOG KIDNEY VACCINE ARE HIGHER AND THE DURATION OF SYMPTOMS IS ALSO LONGER THAN IN THE OTHER VACCINE GROUPS.

(C) PRELIMINARY DATA INDICATE THAT INCIDENCE RATES FOLLOWING CENDEHILL VACCINE ARE SIMILAR TO THOSE FOLLOWING DUCK EMBRYO VACCINE (SEE ATTACHMENT #1).

"2. MANY GRANTEES HAVE DISCONTINUED THE USE OF DOG KIDNEY VACCINE IN PUBLIC PROGRAMS, HAVE CANCELLED EXISTING STATE CONTRACTS WITH THE MANUFACTURERS OF DOG KIDNEY VACCINE, HAVE RETURNED EXISTING SUPPLIES OF VACCINE TO MANUFACTURER WHERE POSSIBLE AND HAVE REFUSED TO ACCEPT DOG KIDNEY VACCINE WHEN THE LOWEST BID WAS SUBMITTED BY A DISTRIBUTOR OF THIS VACCINE.

"3. A PREFERENCE SURVEY OF THE 70 GRANTEES WAS MADE FOR OUR GUIDANCE FOR ANOTHER CONSOLIDATED FEDERAL CONTRACT PURCHASE. SIXTY-SEVEN OF THE 70 GRANTEES INDICATED A PREFERENCE FOR EITHER DUCK EMBRYO (MERCK SHARP & DOHME) OR RABBIT KIDNEY (SMITH KLINE & FRENCH) VACCINE. FIFTY-EIGHT OF THE 70 GRANTEES INDICATED DOG KIDNEY (PHILIPS ROXANE) AS EITHER THEIR THIRD CHOICE OR AS UNACCEPTABLE (SEE ATTACHMENT #2).

"4. WE, THEREFORE, REQUEST THAT ONLY DUCK EMBRYO AND/OR RABBIT KIDNEY VACCINE MANUFACTURED BY MERCK SHARP & DOHME AND SMITH KLINE & FRENCH BE ACCEPTED UNDER THIS CONTRACT TO BE PROVIDED IN LIEU OF CASH TO GRANTEES."

IT IS WELL SETTLED THAT THE DRAFTING OF SPECIFICATIONS TO REFLECT THE NEEDS OF THE GOVERNMENT AND THE DETERMINATION AS TO WHETHER THOSE NEEDS CAN BE MET BY A GIVEN PRODUCT ARE PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY. 39 COMP. GEN. 570 (1960). IN THIS CASE THE DETERMINATION THAT VACCINE MANUFACTURED FROM DOG KIDNEY WOULD NOT MEET THE NEEDS OF THE GOVERNMENT WAS BASED ON EXPERT MEDICAL OPINION.

NO BASIS EXISTS ON THE PRESENT RECORD TO HOLD THAT THE REQUIREMENTS OF THIS PROCUREMENT WERE NOT BASED UPON A BONA FIDE DETERMINATION OF THE ACTUAL NEEDS OF THE GOVERNMENT UNDER EXISTING CONDITIONS. IN ACCORDANCE WITH LONG ESTABLISHED PRECEDENT WE WILL NOT QUESTION THE MEDICAL DETERMINATION BY CDC OR THE ACTION BASED THEREON TAKEN BY THE VETERANS ADMINISTRATION. CF. 40 COMP. GEN. 35 (1960).

NOR DO WE THINK THAT THE LICENSING OF THE VACCINE PRODUCED BY PHILIPS ROXANE BY THE DIVISION OF BIOLOGICS STANDARDS OF THE NATIONAL INSTITUTES OF HEALTH COULD HAVE OPERATED TO PRECLUDE THE DETERMINATION TO EXCLUDE VACCINE DERIVED FROM CANINE KIDNEYS. WHILE LICENSING BY THE DIVISION OF BIOLOGICS STANDARDS PRIOR TO DELIVERY WAS MADE A CONDITION OF THE SOLICITATION, THERE IS NOTHING IN THE SOLICITATION TO INDICATE THAT ALL LICENSED PRODUCTS WOULD AUTOMATICALLY SATISFY THE NEEDS OF THE GOVERNMENT. IN OUR VIEW, THE REASONABLE INTERPRETATION OF THE LICENSING REQUIREMENT IS THAT IT WAS INTENDED TO MEAN ONLY THAT AN UNLICENSED PRODUCT WOULD NOT MEET THE GOVERNMENT'S NEEDS. IN OTHER WORDS, LICENSING WAS ONLY ONE OF SEVERAL SOLICITATION CONDITIONS THAT HAD TO BE MET BY THE SUCCESSFUL OFFEROR.

YOU CONTEND THAT OUR DECISION B-168069, AUGUST 27, 1970, REQUIRES THE GOVERNMENT TO ENGAGE IN GOOD FAITH NEGOTIATIONS WITH ALL RESPONSIBLE OFFERORS, NOTWITHSTANDING ANY POSSIBLE URGENCY IN THE NEED FOR PROCURING THE PRODUCT AND ANY ALLEGED TECHNICAL INADEQUACIES OR ADVERSE TEST RESULTS REGARDING THE PRODUCT OF A PARTICULAR OFFEROR. THAT CASE INVOLVED A NEGOTIATED PROCUREMENT FOR SPEED GEAR ASSEMBLIES AND CENTRIFUGAL FAN ASSEMBLIES. THE AGENCY'S TEST RESULTS CONCLUDED THAT THE PROTESTANT'S EQUIPMENT WAS EQUALLY AS SUITABLE AS THAT OF THE CONTRACTOR. HOWEVER, THERE WAS CONFLICTING OPINION WITHIN THE CONTRACTING AGENCY AS TO THE VALIDITY OF THE TEST RESULTS. UNDER THESE CIRCUMSTANCES, WE HELD THAT REJECTION OF THE PROTESTANT'S OFFER WITHOUT DISCUSSION WAS IMPROPER SINCE IN VIEW OF THE CONFLICTING OPINION IT COULD NOT BE SAID THAT NEGOTIATION WITH THE PROTESTANT WOULD HAVE BEEN MEANINGLESS. THIS DECISION DID NOT, AS DOES THE INSTANT CASE, CONCERN THE PROPRIETY OF A CONTRACTING OFFICER'S ACTION IN DEFINING THE GOVERNMENT'S MINIMUM NEEDS. THEREFORE THE CONSIDERATIONS APPLICABLE TO OUR DECISION IN B-168069, AUGUST 27, 1970, ARE OF NO RELEVANCE IN THE INSTANT CASE.

WE FIND NO REASON TO QUESTION THE ACTION TAKEN BY THE VETERANS ADMINISTRATION ON THE BASIS OF THE PRESENT RECORD. IN THIS CONNECTION, YOUR LETTER DATED SEPTEMBER 22, 1970, WITH ENCLOSURE, STATES THAT YOU WILL BE MEETING WITH REPRESENTATIVES OF THE VETERANS ADMINISTRATION ON SEPTEMBER 28, 1970, WITH REGARD TO THE ISSUES RAISED BY YOUR PROTEST. VIEW OF THE FACT THAT WE HAVE BEEN INFORMED BY THE VETERANS ADMINISTRATION THAT SEPTEMBER 29, 1970, IS A DEADLINE FOR A CONTRACT AWARD, WE FEEL THAT WE MUST PROCEED WITH OUR DECISION WITHOUT AWAITING THE RESULTS OF THAT MEETING. IF, AS A RESULT OF THE MEETING, THE CONTRACTING OFFICER DESIRES TO ALTER HIS DETERMINATION WITH REGARD TO THE PROCUREMENT OF VACCINE DERIVED FROM CANINE KIDNEY, OUR DECISION WOULD NOT PRECLUDE SUCH ACTION SINCE IT IS PREMISED UPON THE DETERMINATION OF THE CONTRACTING OFFICER.