BNUMBER:  B-271222; B-271222.2
DATE:  June 27, 1996
TITLE:  Commercial Drapery Contractors, Inc.

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Matter of:Commercial Drapery Contractors, Inc.

File:     B-271222; B-271222.2

Date:June 27, 1996

Alan M. Grayson, Esq., and Victor A. Kubli, Esq., Law Offices of Alan 
M. Grayson, for the protester.
C. Joseph Carroll, Department of Justice, for the agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency's issuance of purchase orders for draperies from a Multiple 
Award Schedule Federal Supply Schedule (FSS) vendor at higher prices 
than offered by other FSS vendors that could have satisfied the 
agency's requirements, based on the agency's need for urgent delivery 
which only the selected vendor assertedly could satisfy, was improper 
where the urgency was caused by the delays incident to the agency's 
prior improper issuance of purchase orders to the same vendor for the 
same requirement and the subsequent cancellation of these orders in 
response to prior clearly meritorious protests.

DECISION

Commercial Drapery Contractors, Inc. protests the issuance of purchase 
orders by Federal Prison Industries, Inc., doing business as UNICOR, 
to Contract Decor, Inc., for the supply of fabric and the installation 
of draperies under Contract Decor's Federal Supply Schedule (FSS) 
contract for draperies.  

We sustain the protests.

The draperies were ordered by the Department of Veterans Affairs (VA) 
for its new Extended Care and Rehabilitation Center in Baltimore, 
Maryland.  Specifically, VA needed delivery and installation of 
cubicle curtains and various decorative window top treatments no later 
than April 30, 1996, in time for the opening of its new facility.  The 
VA contracting officer determined that UNICOR was a mandatory source 
for the draperies under 18 U.S.C.  sec.  4124 (1994) and Federal 
Acquisition Regulation (FAR)  sec.  8.602(a), which require government 
agencies to purchase supplies listed in UNICOR's schedule so long as 
the prices charged do not exceed current market prices.  Draperies are 
on the schedule although UNICOR does not itself supply the fabric, 
which is cut and sewn into draperies at UNICOR's drapery factory, or 
perform the installation of the finished products.  On September 14, 
1995, VA issued purchase orders to UNICOR for the top treatments and 
the curtains, in the amounts of $76,818.06 and $49,530, respectively.  
UNICOR permits the ordering agency to specify an FSS contractor for 
the furnishing of the drapery fabric and the installation of the 
finished products.  VA selected Contract Decor and its purchase orders 
to UNICOR referred to a quotation from Contract Decor for the 
specified fabrics, sizes, design, and colors, and required that the 
draperies be ready for installation in April 1996.

On November 30, 1995, UNICOR issued Contract Decor purchase order No. 
042-PID-124-96-CS-00 for the window top treatments and purchase order 
No. 042-PID-0123-96-CS-00 for the fabric for the cubicle curtains from 
Contract Decor's Multiple Award Schedule FSS contract.  On December 
18, Commercial, another FSS contractor for draperies, protested the 
issuance of the purchase orders to Contract Decor, alleging that the 
agencies failed to make award to the vendor with the lowest price 
available under the FSS.

In response to the protests, UNICOR found that the purchase orders 
were improperly issued because neither it nor VA had considered prices 
from other FSS vendors as required by FAR  sec.  8.404(b), (c).  UNICOR 
informed our Office on January 29, 1996, that it intended to cancel 
the purchase orders and requested that we dismiss the protests as 
academic, which we did on March 12.
  
Meanwhile, UNICOR determined that to ensure delivery of the draperies 
to the VA facility in April, as required, it needed the fabric 
supplied to its drapery factory no later than March 19.  UNICOR's 
drapery factory manager and another contracting official telephoned 
Contract Decor, Commercial, and two other FSS vendors on February 2 to 
inquire as to the availability of the specified fabrics and the 
earliest date the material could be delivered to UNICOR.  Contract 
Decor informed UNICOR that the longest it would take to deliver one of 
the fabrics was 6 weeks, and that the other fabric was in stock and 
ready for immediate delivery.  Commercial reported that it could 
deliver one of the specified fabrics in 8 weeks and that delivery of 
additional quantities of the other fabric beyond the quantity it had 
in stock would take between 4 and 6 weeks.  The other vendors UNICOR 
contacted had longer delivery times.  UNICOR also reviewed price lists 
from Contract Decor, Commercial, and a third vendor.  

Notwithstanding Contract Decor's higher prices and after determining 
that that firm was the only vendor which could deliver the specified 
fabrics to UNICOR by the required March 19 date, UNICOR, on February 
15, issued Contract Decor purchase order Nos. 042-PID-0199-96-CS-00 
and 042-PID-0198-96-CS-00 for the top treatments and curtains, 
respectively.[1]  The following day, UNICOR canceled the protested 
purchase orders previously issued to Contract Decor for the same 
requirements.

Commercial protested on February 23 against UNICOR's issuance of the 
new purchase orders to Contract Decor, again alleging that UNICOR had 
failed to make award to the vendor with the lowest FSS price.  
Commercial subsequently protested the propriety of UNICOR's issuance 
of the second set of purchase orders to Contract Decor because the 
alleged urgency used to justify these purchases was caused by UNICOR's 
improper issuance of the original purchase orders to other than the 
lowest-priced FSS vendor in the first place.  After determining that 
delivery and installation of the draperies in time for the opening of 
the VA facility was an urgent and compelling circumstance which could 
not await a decision from our Office, UNICOR authorized Contract 
Decor's continued performance of the purchase orders in the face of 
the protest pursuant to FAR  sec.  33.104(c)(2)(ii).  

Under UNICOR's procedures for "procuring" draperies, UNICOR acts as a 
purchasing agent for the ordering agency and as such it must justify 
an FSS purchase at other than the lowest available price.  See 
Southwest Decor, Inc., B-246964 et al., Apr. 20, 1992, 92-1 CPD  para.  373.  
In this regard, when placing an order of more than $2,500 from the 
FSS, a procuring agency is required to reasonably ensure that a 
selection represents the best value and meets the agency's needs at 
the lowest overall cost by considering reasonably available 
information about products offered under Multiple Award Schedule 
contracts.  FAR  sec.  8.404(b), (c); see Imaging Technology Corp., 
B-270124, Feb. 12, 1996, 96-1 CPD  para.  68.  This standard can be 
satisfied if the procuring agency reviews at least three vendor price 
lists.  FAR  sec.  8.404(b)(2)(i); see Southwest Decor, Inc., supra.

Here, UNICOR concedes that VA was under the mistaken impression that 
because it was ordering the draperies through UNICOR, it did not need 
to ensure that the FSS vendor it specified was the one that met its 
needs at the lowest price.  The record shows that in specifying 
Contract Decor, VA failed to consider price lists from other vendors, 
but selected Contract Decor as the source for the draperies because of 
VA's favorable prior experience with that firm.  Had VA or UNICOR 
reviewed other FSS vendors' price lists prior to UNICOR's issuing the 
original set of purchase orders to Contract Decor, the agencies would 
have found that Commercial and at least one other vendor offered lower 
prices than Contract Decor for draperies that met VA's requirements.  
In this regard, UNICOR does not contend that the specified fabrics 
obtained through other FSS vendors would have failed to meet VA's 
needs in terms of quality or other features; indeed, the record 
indicates that the specified fabrics would be obtained by the vendors 
from a single source.  Thus, in issuing the initial purchase orders, 
the agencies failed to reasonably ensure that the vendor selected met 
VA's needs at the lowest overall cost, as required by FAR  sec.  8.404, and 
deprived other vendors, such as Commercial, of a reasonable 
opportunity to be considered for award.[2]

The issuance of the second set of purchase orders resulted from 
UNICOR's response to Commercial's protests.  The record shows that had 
UNICOR and VA employed proper procedures in the first place in 
ordering from the FSS, UNICOR would not have had to issue the second 
set of purchase orders to Contract Decor at a higher price than 
offered by other FSS vendors on the basis that Contract Decor was now 
the only vendor able to meet the delivery time frame.  For example, 
had the agencies reviewed Commercial's FSS price list prior to issuing 
the original purchase orders to Contract Decor, they would have found 
that Commercial has a delivery time of 56 days after receipt of order, 
compared with Contract Decor's
75 days, and, accordingly, Commercial would have been able to deliver 
the fabric to UNICOR well before the April 1996 installation date, 
which was then many months away.  

As indicated and conceded by UNICOR, the record shows that 
Commercial's prior protests of the original purchase orders to 
Contract Decor were clearly meritorious, in response to which UNICOR 
stated that the orders placed would be canceled.  However, prior to 
taking any corrective action, UNICOR issued the identical second set 
of purchase orders to the same vendor on the basis of urgency caused 
by the delays in performance resulting from Commercial's protests of 
UNICOR's improper placement of the initial purchase orders.[3]  Thus, 
UNICOR essentially allowed performance of these improperly issued 
purchase orders to continue, prompting Commercial's subsequent 
protests.  Under the circumstances, we sustain Commercial's protests.

Since UNICOR authorized Contract Decor's continued performance of the 
purchase orders in the face of the protest and performance has been 
completed, corrective action is not feasible.  We recommend that 
Commercial be awarded the costs of filing and pursuing its protests, 
including reasonable attorneys' fees.  4 C.F.R.  sec.  21.8(d)(1) (1996).  
This includes Commercial's costs of filing and pursuing its protests 
of the initial purchase orders because, as described above, despite 
UNICOR's purported corrective action, its issuance of the second set 
of purchase orders essentially continued the impropriety on which the 
canceled initial orders were based, and in essence resulted in the 
protester's reinstating its initial protest grounds in pursuing the 
protests sustained here.  See Commercial Energies, Inc.--Recon. and 
Declaration of Entitlement to Costs, 71 Comp. Gen. 97 (1991), 91-2 CPD  para.  
499.   Commercial's certified claim for such costs, detailing the time 
expended and costs incurred, should be submitted directly to the 
agency within 90 days after receipt of this decision.  4 C.F.R.  sec.  
21.8(f)(1).

The protests are sustained.

Comptroller General
of the United States

1. UNICOR also executed a justification and approval for other than 
full and open competition under FAR  sec.  6.302-2--Unusual and Compelling 
Urgency--on the basis that the delay in contract performance resulting 
from the cancellation of the purchase orders in response to 
Commercial's earlier protests made it necessary for UNICOR to obtain 
the fabric from the only vendor capable of meeting the delivery time 
frame.  UNICOR now maintains that, because it was ordering from the 
FSS, the justification and approval for other than full and open 
competition was unnecessary.  We agree.

2. We also note that without quotations from other vendors, the 
agencies were unable to avail themselves of possible price reductions 
from published schedule prices.

3. Commercial then promptly filed a protest against the issuance of 
the second set of purchase orders, again alleging that UNICOR failed 
to issue the orders to the vendor with the lowest FSS price.  When 
Commercial later learned that UNICOR had issued the second set of 
orders to the same vendor on the basis of urgency, Commercial 
supplemented its protest on the ground that the alleged urgency was 
the result of UNICOR's improper issuance in the first place of the 
previously protested purchase orders.