BNUMBER:  B-272461
DATE:  October 18, 1996
TITLE:  Mortara Instrument, Inc.

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DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:Mortara Instrument, Inc.

File:     B-272461

Date:October 18, 1996

Thomas C. Wheeler, Esq., and Eric B. Kantor, Esq., Piper & Marbury; 
Anne M. Hlavacka, Esq., and Vincent J. Beres, Esq., Reinhasrt, 
Boerner, Van Deuren, Norris & Rieselbach, for the protester.
Mitchell W. Quick, Esq., Michael, Best & Friedrich, for Marquette 
Medical Systems, Inc., an intervenor.
Nicholas P. Retson, Esq. and Stephen D. Sanders, Esq., Department of 
the Army, for the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Contracting officer's decision to procure cardiology medical 
information system on an unrestricted basis, and not through a small 
business set-aside, is not an abuse of discretion where agency 
concluded that the requirements were technically complex and involved 
installation at more than 200 locations in the United States and 
overseas and only one small business firm responded to the draft 
solicitation and subsequent Commerce Business Daily notice. 

2.  Protest that various requirements for a cardiology medical 
information system can only be met by incumbent contractor is denied 
where the solicitation did not specify a particular method for 
designing the system and offerors were free to choose any approach 
that could meet the challenged requirements.

3.  Contracting agency is not required to acquire and furnish to 
prospective offerors information concerning certain components of the 
system currently in use that is proprietary to the incumbent 
contractor where agency asserts it has no rights to the information, 
and protester has not shown otherwise.  

DECISION

Mortara Instrument, Inc. protests certain provisions in request for 
proposals (RFP) No. DAMD17-94-R-0052, issued by the Department of the 
Army, Army Medical Research Acquisition Activity (AMRAA), seeking 
proposals to provide a cardiology medical information system (CMIS) to 
be used world-wide in military medical facilities.  Mortara, a small 
business, raises numerous issues regarding provisions of the 
solicitation which it alleges favor the incumbent Marquette 
Electronics, Inc.,[1] and alleges that the agency improperly permitted 
Marquette to gain an unfair competitive advantage in the procurement 
by virtue of its employment of a former government employee.

We deny the protest.

The objective of the CMIS procurement is to replace the Computer 
Assisted Processing of Cardiograms (CAPOC) system in use since 1979 
with a computer-based CMIS network that can support the management of 
electrocardiogram (ECG) data acquired in military medical facilities 
located within the continental United States and locations 
overseas,[2] and to ensure access to cardiology medical information 
regardless of provider location.  To that end, the proposed CMIS must 
permit the data acquisition, storage, and retrieval of cardiology 
medical information through various network hubs and be adaptable to 
future integration of other types of images and data from other 
cardiology procedure equipment.  The acquisition includes the 
necessary and ongoing services for configuration planning, 
implementation assistance, common industry hardware, software and 
communication upgrades.    

Prior to initiating this procurement, the agency issued a draft RFP on 
June 22, 1994, soliciting industry comments on its CMIS requirements.  
Thereafter, on July 8, AMRAA published a notice in the Commerce 
Business Daily (CBD) announcing its intention to purchase a CMIS to 
replace the CAPOC system.  On April 5, 1996, under full and open 
competitive procedures, AMRAA issued the RFP to 18 companies.  The 
RFP, as amended, anticipates award of a firm, fixed-price requirements 
contract for 1 year with seven 1-year options to the offeror whose 
proposal represents the best value to the government, considering 
technical merit and price.[3]  It includes a statement of work which 
describes in great detail the functions to be performed, the 
performance required, and essential physical characteristics of the 
proposed CMIS.     

Of relevance to this protest are the RFP requirements that the 
proposed CMIS have  an open system architecture for its information 
system that will accept and generate information that can be used by 
other local and remote systems; be compatible with existing CAPOC 
equipment such as the ECG carts currently in use; accept input from 
any ECG cart regardless of manufacturer;[4] and be capable of 
accessing, retrieving, storing, and converting information archived 
under the CAPOC system.  The solicitation advised offerors that only 
Marquette carts are currently being used and provided a current 
inventory of the ECG carts that a prospective offeror could replace, 
upgrade, or modify in creating its proposed CMIS.  

Mortara first protests the determination that the procurement should 
not be set aside for small businesses.  The protester contends that 
the contracting officer made virtually no effort to determine whether 
the criteria in Federal Acquisition Regulation (FAR)  sec.  19.502 (FAC 
90-41) for small business set-asides were met, and did not investigate 
the matter even after Mortara first raised the issue in its May 1995 
comments on the draft RFP.  The protester identifies another small 
business, in addition to itself, which it asserts is capable of 
performing the work.
  
The agency reports that this is not only the first time it has 
attempted to procure a CMIS to be used by all military facilities 
within the Department of Defense (DOD) but that the protested RFP 
requires that the equipment be installed, maintained, and supported in 
more than 100 different locations throughout the United States and 
overseas.  According to the agency, given the complexity of the 
required CMIS and the great number of user sites to be linked into the 
CMIS, the contracting officer concluded, with the concurrence of the 
Small Business Utilization Specialist, that it was unlikely that two 
or more responsible small businesses would make offers at reasonable 
prices.

Contracting officers generally are required to set aside for small 
business all procurements exceeding $100,000 if there is a reasonable 
expectation of receiving fair market price offers from at least two 
responsible small businesses.  FAR  sec.  19.502-2(b).  While as a general 
rule the decision to set aside a particular procurement for small 
businesses is within the discretion of the contracting agency, a 
contracting officer must make reasonable efforts to ascertain whether 
it is likely that offers will be received from at least two small 
businesses capable of performing the work.  Espey Mfg. & Elecs. Corp., 
B-254738.3, Mar. 8, 1994, 94-1 CPD  para.  180.  However, there is no 
particular method prescribed for assessing the availability of small 
businesses, although it is appropriate to refer to factors such as 
prior procurement history, nature of the contract, type of contract, 
market surveys, and/or advice from the agency's small business 
specialist.  FKW Inc., B-249189, Oct. 22, 1992, 92-2 CPD  para.  270.  

Here, this is a first time buy for a DOD-wide cardiology system, and 
the contracting officer, in consultation with the Small Business 
Utilization Specialist, decided that due to the technical complexity 
and the required installation at more than 200 user sites, there was 
no reasonable expectation of 2 or more small business competitors.  
Given the scope and technical complexity of the requirements, as well 
as the fact that this was a first-time buy, we think the contracting 
officer could reasonably believe there was no reasonable likelihood of 
receiving adequate small business competition.  See Espey Mfg. & 
Elecs. Corp., supra.  In this regard, the agency issued a draft RFP 
and a CBD notice in 1994, and only one small business, Mortara, 
expressed interest in the acquisition.  While the protester argues 
that the results of the CBD notice are 2 years old and thus should not 
be given great weight, the record shows that during the intervening 
years there has been no additional small business interest expressed 
in this procurement.  Although the protester refers to another small 
business firm, that firm has never identified its interest to the 
agency.  Under these circumstances, we have no basis to object to the 
agency's decision to conduct an unrestricted competition.  See 
American Overseas Book Co., Inc., B-257989, Dec. 1, 1994, 94-2 CPD  para.  
217. 

Mortara protests that the solicitation is unduly restrictive or 
otherwise defective.     First, as Mortara explains, the solicitation 
provision which provides for the upgrade or replacement of ECG carts 
favors Marquette because other prospective offerors do not have access 
to the proprietary design of these ECG carts.  Second, prospective 
offerors, other than Marquette, are unable to competitively price the 
cost to access, retrieve, store, and convert existing data archived in 
the CAPOC system as required by the RFP because the solicitation does 
not include information regarding the file system structure, data 
compression scheme of the existing CAPOC system, or the ECG carts 
program, algorithms, and electronic design.  The protester insists 
that this information is necessary for prospective offerors to 
understand the scope of such work and to assure fair and equal 
competition.  

Third, Mortara alleges that the solicitation should be revised or 
clarified to require that an offeror using upgraded ECG carts must 
establish that they comply with Food and Drug Administration (FDA) 
approval and medical device requirements.[5]  Lastly, the protester 
argues that the solicitation should require the proposed CMIS to be an 
open system which uses non-proprietary protocol between any of its 
components.  In this regard, the protester asserts that the RFP should 
exclude the use of proprietary protocol with the existing CAPOC 
equipment as well as with the equipment to be provided with the CMIS.   

The agency and Marquette vigorously dispute that the solicitation 
unduly favors Marquette or is otherwise defective.  While it cannot 
provide any information pertaining to the file system structure, the 
data compression scheme of the CAPOC system and its ECG carts's 
programs, algorithms or electronic design because this information is 
proprietary to Marquette, the agency states that this information is 
not necessary for an offeror to propose a CMIS that can perform the 
required functions and possess the physical characteristics listed in 
the RFP.  In any event, the agency points out that the RFP allows 
prospective offerors to replace the existing ECG carts, thus avoiding 
the need for such proprietary information.  According to the agency, 
under the evaluation scheme set forth in the RFP, such an approach 
would not give rise to any competitive price disadvantage because the 
technically superior approach is more important than price.  Thus, if 
a proposal to replace the ECG carts is technically superior but more 
costly than a proposal to upgrade the existing system, the agency 
could decide to award to the firm with the technically superior 
proposal notwithstanding the proposal's higher cost.  

On the other hand, if an offeror, other than Marquette, wants to 
propose a CMIS that uses the existing ECG carts, the agency insists 
that the solicitation contains information on the configuration and 
specifications for all ECG carts, not considered proprietary to 
Marquette,[6] such that an offeror could modify the carts by means of 
a conversion unit or interface box linked or plugged into the cart.  
This information (the configuration and specifications for the ECG 
carts), the agency states, should enable offerors to price the cost to 
access information currently archived in the CAPOC system.

Concerning the open system architecture for the CMIS, the agency 
refutes the protester's assertion that the solicitation fails to 
clearly state whether the CMIS must be open and nonproprietary.  AMRAA 
maintains that the RFP specifically calls for a CMIS with an open 
system architecture for its information system component and further 
requires that the system "be implemented in conformity with the 
[g]overnment's open systems standards."  As to the use of proprietary 
protocol, the agency explains that to prohibit use of proprietary 
protocol would be unnecessarily restrictive because it limits the 
competition to only those vendors who can offer a non-proprietary 
system.  As a result, the solicitation allows the use of proprietary 
protocol for certain components of the CMIS so long as it is 
interoperable with the rest of the system.             

In preparing a solicitation for supplies or services, a contracting 
agency must specify its needs and solicit offers in a manner designed 
to achieve full and open competition, and include restrictive 
provisions only to the extent necessary to satisfy the agency's 
minimum needs.  10 U.S.C.  sec.  2305(a)(1)(A)(i), (B)(ii) (1994); see 
Fisons Instruments, Inc., B-261371, July 18, 1995, 95-2 CPD  para.  31.  In 
seeking full and open competition, an agency is not required to 
construct its procurements in a manner that neutralizes the 
competitive advantages some potential offerors may have over others by 
virtue of their own particular circumstances where the advantages did 
not result from government action.  Versar, Inc., B-254464.3, Feb. 16, 
1994, 94-1 CPD  para.  230, see also, Group Technologies Corp.; Electrospace 
Sys., Inc., B-250699 et al., Feb. 17, 1993, 93-1 CPD  para.  150.   

We have considered the specifications that Mortara has challenged, and 
we conclude that none of those requirements impermissibly favor 
Marquette or is otherwise objectionable.  As discussed below, the 
record shows the agency has taken steps to minimize any incumbency 
advantages.  For example, contrary to the protester's position that it 
is at a competitive disadvantage because unlike Marquette, it would 
have to replace rather than upgrade the ECG carts to meet the RFP 
requirements, the agency sought to neutralize any possible price 
advantages inuring to the incumbent by making technical merit more 
important than price.  
Moreover, although Mortara continues to disagree with the agency's 
approach which would allow an offeror to modify or upgrade the ECG 
carts and advances numerous reasons why this option is available only 
to Marquette, we are not persuaded that only Marquette can upgrade or 
modify the existing carts.  As discussed previously, the agency has 
provided all information that is not proprietary to Marquette (for 
example, the configuration and specifications for the ECG carts) which 
it believes  would allow an offeror to modify the Marquette carts by 
an appendage to the cart or an interface box linked or plugged into 
the cart.[7]  In this regard, the record shows that at least one third 
party vendor believes it can convert the incumbent's existing ECG data 
for use by other contractors.[8]

Similarly, while the solicitation requires a CMIS that can access 
information currently archived in the CAPOC system maintained by 
Marquette but does not include the file system structure, data 
compression scheme, cart programs algorithms, or electronic design of 
the CAPOC (information that is proprietary to Marquette), we believe 
offerors other than Marquette can propose a system that satisfies this 
requirement.  As we previously stated, the record indicates that 
technology exists to allow other offerors to access the information 
stored in the CAPOC system through the use of an interface box and at 
least one third party vendor believes it can establish such an 
interface.  In addition, the agency has provided an inventory of the 
CAPOC configurations and the estimated number of ECGs conducted to 
enable offerors to price the cost of retrieving archived patient 
files.  Further, in an amendment to the RFP, the agency states it will 
work with the successful contractor to facilitate conversion of 
archived patient records (which it owns) to a useable format.  Thus, 
the record shows the agency engaged in reasonable efforts to mitigate 
Marquette's incumbency advantage.  Even if Mortara is correct that the 
solicitation provisions it challenges favor Marquette, this advantage 
is no different from that enjoyed by an offeror due to its prior 
contract, and the record provides no indication of improper preference 
or unfair action by the agency.  Moreover, to the extent Mortara 
alleges these requirements may impose significant risks upon itself 
and other offerors in pricing their proposals and in performing the 
contract awarded under the solicitation, the agency has the discretion 
to impose such risks.  See J&J Maintenance, Inc., B-244366, Oct. 15, 
1991, 91-2 CPD  para.  333.

We also do not agree with the protester that the solicitation failed 
to provide the requisite level of information to enable offerors to 
compete on an equal basis.  We think AMRAA took reasonable measures to 
provide potential offerors with all of the legally disclosable 
relevant information pertaining to the CAPOC system and related 
equipment.  Consequently, Mortara's insistence that the agency's needs 
can only be met by a contractor using non-proprietary protocol between 
any of its components essentially amounts to an argument that the 
solicitation should have been written more restrictively.  The 
agency's approach under the RFP is to require an open system 
architecture for its information system component.  However, the RFP 
permits offerors to propose a communication system which may be 
proprietary to a particular offeror but that system must be 
interoperable with the rest of the military's hospital information 
system, future system upgrades and expansion with other equipment 
manufacturers and vendors.  In this regard, the RFP specifically 
states that "[p]roprietary wareform acquisition and display makes it 
impossible to interface ECG equipment from different manufacturers, 
and is therefore not desirable and not in the Government's best 
interest.  If proprietary forms of storage are proposed, the offeror 
must include a solution for the transfer of ECG data to and from [an] 
open system standard."  In the agency's view, this is less restrictive 
than prohibiting any proprietary components and we agree with the 
agency that permitting offerors to use some proprietary protocol so 
long as the proposed system ultimately meets the open system 
requirement is not objectionable.  See Fisons Instruments, Inc., 
supra; Northwest EnviroServ., Inc., B-259434; B-259434.2, Mar. 30, 
1995, 95-1 CPD  para.  171.  

Finally, Mortara alleges that Marquette obtained an unfair advantage 
by virtue of its employment of a former government employee.  Mortara 
asserts that Marquette's employee, John McGinnis, is a retired 
contract administrator for the Air Force Procurement Facility at 
Hanscom Air Force Base which purchased the CAPOC system in 1979 from 
Marquette.  This individual, the protester states, had signed the most 
recent CAPOC related contract awarded to Marquette and is the one who 
submitted comments and questions from Marquette regarding the 
procurement at issue.  However, the record simply does not support the 
protester's allegation.  Mr. McGinnis retired from the military in 
1984 and was employed by Marquette in 1988.  Mr. McGinnis was never an 
employee of AMRAA, the procuring agency for the CMIS, nor was he 
involved with any aspect of the CMIS acquisition at any time during 
his government service.  Thus, we fail to see how he could have had 
access to some competitively useful information for the CMIS 
procurement which the agency initiated after Mr. McGinnis's retirement 
from the government.  See Physician Corp. of Am., B-270698 et al., 
Apr. 10, 1996, 96-1 CPD  para. 198.

Similarly, the record does not support the protester's argument that 
Marquette has an organizational conflict of interest as a result of 
contracts it previously performed for AMRAA.  The mere existence of a 
prior or current contractual relationship between a contracting agency 
and a firm does not create an organizational conflict of interest for 
that firm.  ETEK, Inc., 68 Comp. Gen. 537 (1989), 89-2 CPD  para.  29.  
Here, the protester has not shown, nor does the record otherwise 
indicate, that Marquette was involved in the planning or preparation 
of the protested solicitation, or that the firm obtained inside 
confidential information not otherwise available to all offerors.  The 
fact that Marquette developed the CAPOC system and furnished the 
current inventory of ECG carts, does not by itself, provide an unfair 
advantage over other firms with respect to the selection of a 
contractor for the CMIS acquisition.  See Meridian Corp., B-246330.4, 
Sept. 7, 1993, 93-2 CPD  para.  129.         

The protest is denied.

Comptroller General
of the United States
  
1. Marquette Electronics, Inc. is now Marquette Medical Systems, Inc.  
To avoid confusion, we refer only to Marquette throughout this 
decision.

2. The geographic distribution of military medical facilities is 
identified in the solicitation as consisting of 15 major medical 
centers and approximately 200 hospitals/medical clinics. 

3. By the July 10, 1996, extended closing date for receipt of 
proposals, three offers were received, including offers from Mortara 
and Marquette.  The three companies submitting proposals were among 
the four companies that had furnished industry comments in response to 
the draft RFP. 

4. An ECG cart is medical equipment with data acquisition 
capabilities; it generates a preliminary interpretation of a patient's 
ECG test.  

5. This reference is to section 510(k) of the Federal Food, Drug, and 
Cosmetics Act, 21 U.S.C.  sec.  360(k) (1994).

6. Procuring agencies have an obligation to protect the proprietary 
information of a contractor or offeror.  See Information Ventures, 
Inc., B-240925.2, Jan. 15, 1991,     91-1 CPD  para.  39 (withholding of 
proprietary information proper due to the protections afforded under 
the Trade Secrets Act, 18 U.S.C.  sec.  1905); 49 Comp. Gen. 28 (1969) 
(when government's use of proprietary or confidential data or trade 
secrets in a solicitation violates a firm's proprietary rights, our 
Office may recommend that the contracting agency either make a sole 
source award to the entity whose data was compromised or, if possible, 
cancel the solicitation and resolicit without using the proprietary 
data). 

7. While Mortara believes such an approach (using a conversion unit) 
is not a viable solution as it envisions that the safety, efficacy, 
and portability of the ECG carts would be affected, the record does 
not support this contention.

8. Mortara further advances its belief that modification of the 
existing ECG carts by the use of a conversion unit is not a realistic 
option for other offerors as this would trigger the requirement for 
resubmission of a 510(k) application.  Here, the RFP provides that any 
ECG cart modification "shall not result in a degraded level of 
performance below the cart's initial performance specification" and to 
the extent the protester believes the modification would significantly 
affect the safety, efficacy and portability of the carts, the record 
shows the protester is correct that the offeror proposing such an 
approach would have to submit a new 510(k) application.  However, the 
record before us does not clearly establish that any modification of 
Marquette's ECG carts will, in fact, result in a degraded level of 
performance  necessitating a new 510(k) application.