BNUMBER: B-271845
DATE: August 23, 1996
TITLE: SmithKline Beechman Pharmaceuticals
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Matter of:SmithKline Beechman Pharmaceuticals
File: B-271845
Date:August 23, 1996
Robert H. Koehler, Esq., and Michael J. Schaengold, Esq., Patton
Boggs, for the protester.
Barbara Robbins, Esq., Department of Health and Human Services, for
the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where statute concerning vaccine procurements states that the
agency "shall, as appropriate" award multiple contracts, and further
provides that the agency "may decline to enter into such contracts,"
the plain language of the statute affords the agency discretionary
authority to refrain from making multiple contract awards in
appropriate circumstances.
DECISION
SmithKline Beechman Pharmaceuticals protests the provisions of request
for proposals (RFP) No. 96-51(N), issued by the Department of Health
and Human Services (HHS), Centers for Disease Control and Prevention
(CDC), for quantities of hepatitis B high risk/adolescent vaccine.
SmithKline objects that the solicitation provision advising that only
a single award will be made is improper, and argues that the agency is
statutorily required to award a contract to every qualified offeror
regardless of price.[1]
We deny the protest.
On April 10, 1996, the CDC issued RFP No. 96-51(N) calling for the
award of an indefinite quantity contract to provide quantities of
hepatitis B high risk/adolescent vaccine.[2] The solicitation
provided for a minimum of 1.1 million doses of vaccine with an
estimated maximum of 11 million doses.
Under the heading "Evaluation and Award," the solicitation stated:
"b. The Government intends to make only one award under this
solicitation. The low offeror shall be determined based on the
lowest offered price per dose.
"c. Award shall be made to the low responsible offeror who
offers a reasonable discounted price [and meets other qualifying
requirements.]"
SmithKline protests that this solicitation provision is contrary to
the statutory requirements of OBRA which, SmithKline asserts, mandate
award of a contract to every qualified offeror. SmithKline bases its
protest on the following OBRA provision, codified at 42 U.S.C. sec.
1396s, which states:
"(d) Negotiation of Contracts with Manufacturers
(1) In General
For the purpose of meeting obligations under this section, the
Secretary shall negotiate and enter into contracts with
manufacturers of pediatric vaccines consistent with the
requirements of this subsection . . . .
. . . . .
(7) Multiple Suppliers
In the case of the pediatric vaccine involved, the Secretary
shall, as appropriate, enter into a contract referred to in
paragraph (1) with each manufacturer of the vaccine that meets
the terms and conditions of the Secretary for an award of such
a contract (including terms and conditions regarding safety
and quality). With respect to multiple contracts entered into
pursuant to this paragraph, the Secretary may have in effect
different prices under each of such contracts . . . ."
SmithKline maintains that the statutory provision codified at (d)(7)
"mandates that the [agency] conduct procurements . . . in a manner
that allocates the doses so that all qualified manufacturers will be
awarded contracts," and asserts that "CDC does not have the authority
to make a single award here." We disagree.
SmithKline's assertion that the language of (d)(7) should be read as
"the Secretary shall . . . enter into a contract . . . with each
[qualified] manufacturer" effectively reads the words "as appropriate"
out of the statute, thus altering the plain meaning of the statute.
SmithKline also ignores the statutory language codified at 42 U.S.C. sec.
1396s(d)(2), which states:
"Authority to Decline Contracts
The Secretary may decline to enter into such contracts
[identified in section (d)(1)] and may modify or extend such
contracts."
It is well settled that, where the language of a statute is clear on
its face, its plain meaning will be given effect; that is, if the
intent of Congress is clear, "that is the end of the matter."
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 842 (1984). In this regard, the clear intent of Congress
must be determined by giving meaning to all statutory language. See,
e.g., Babbitt v. Sweet Home Chapter of Communities for a Great Oregon,
115 S.Ct. 2407, 2413 (1995); Consumer Fed'n of Am. v. U.S. Department
of Health and Human Servs., 83 F.3d 1497 (D.C. Cir. 1996); Ziegler
Coal Co. v. Kleppe, 536 F.2d 398, 406 (D.C. Cir. 1976); Tuten v.
United States, 440 A.2d 1008, 1010 (D.C. 1982), aff'd, 460 U.S. 660
(1983).
Here, we find without merit SmithKline's assertion that the language
of OBRA "mandates" award to all qualified offerors. On the contrary,
the plain meaning of the statutory language codified at (d)(7)
provides that the agency shall award contracts to qualified
contractors "as appropriate." That express discretionary authority is
similarly reflected in the provision at (d)(2), which authorizes the
agency to "decline to enter into such contracts." In short, the plain
language of OBRA grants the agency the discretion to refrain from
awarding contracts in appropriate circumstances. Pursuant to Chevron,
U.S.A, supra, that is the end of the matter.[3]
The protest is denied.
Comptroller General
of the United States
1. Initially, SmithKline also challenged a provision of the
solicitation regarding the type of packaging that was required. In
response to this issue, the agency amended the solicitation in a
manner which, as SmithKline agrees, renders that issue moot.
2. The acquisition is a part of the Vaccines for Children Program
under the Omnibus Budget Reconciliation Act of 1993 (OBRA), 42 U.S.C. sec.
1396s (1994), which is a federally funded program for the acquisition
and distribution of pediatric vaccine for the immunization of eligible
children.
3. In arguing that the agency must award SmithKline a contract,
regardless of price, SmithKline refers to OBRA's legislative history,
which contains the following provisions:
"The Conference Agreement further provides that the
Secretary shall, as appropriate, enter into a contract
with each manufacturer of the vaccine that meets the terms
and conditions of the Secretary. The Secretary also may
have multiple prices.
. . . . .
"The Conference Agreement also provides authority for the
Secretary to decline to enter into contracts. The
Conferees have provided this authority for extreme
circumstances only and, again, would emphasize the
importance of continuity of vaccine suppliers for
federally vaccine-eligible children and States." 139
Cong. Rec. H6172-6173 (daily ed. Aug. 5, 1993).
SmithKline argues that the reference to "extreme circumstances"
should, effectively, be read into the statute, and that costs to the
government may not be considered in determining what constitutes an
"extreme circumstance."
SmithKline's arguments regarding the effect of the legislative history
are unavailing. Legislative history, while often indicative of
congressional intent, is not law. To effectively impose the "extreme
circumstances" test as a mandatory limitation on the agency's exercise
of its discretionary authority, the Congress would have had to include
that provision in the statute itself. See LTV Aerospace Corp., 55
Comp. Gen. 307 (1975), 75-2 CPD para. 203. Moreover, even if the "extreme
circumstances" limitation were read into the statute, nothing in the
legislative history concerning that limitation precludes the agency
from considering costs to the government in determining what
constitutes an "extreme circumstance."