BNUMBER: B-274490; B-274490.2
DATE: December 13, 1996
TITLE: Wyeth-Lederle Vaccines and Pediatrics
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Matter of:Wyeth-Lederle Vaccines and Pediatrics
File: B-274490; B-274490.2
Date:December 13, 1996
Andrew N. Goldfarb, Esq., Elizabeth Goss, Esq., Albert F. Cacozza,
Jr., Esq., and Samuel D. Turner, Esq., Fox, Bennett & Turner, for the
protester.
Barbara Robbins, Esq., Department of Health and Human Services, for
the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Under pediatric vaccine procurement conducted pursuant to statute
which states that the agency "shall, as appropriate" award multiple
contracts, protest that contracting agency improperly provided for a
single award instead of multiple awards is denied where the record
shows that the agency reasonably determined that the circumstances
were not appropriate for multiple awards.
2. Under pediatric vaccine procurement, protest that contracting
agency improperly failed to follow a "statutorily required" procedure
with respect to use of the list of vaccines established by the
Advisory Committee on Immunization Practices (ACIP) is denied where
statute does not require any particular procedure, and ACIP clearly
intended rapid incorporation of vaccine into the immunization program
and the conditions ACIP established for such incorporation have been
met.
DECISION
Wyeth-Lederle Vaccines and Pediatrics protests the terms of request
for proposals (RFP) No. 96-170(N), issued by the Department of Health
and Human Services, Centers for Disease Control and Prevention (CDC),
to obtain diphtheria and tetanus toxoid with acellular pertussis
(DTaP) vaccine pursuant to the Vaccines For Children (VFC) Program.[1]
Wyeth-Lederle also protests the award of a contract to Connaught
Laboratories, Inc. under this solicitation.
We deny the protests.
BACKGROUND
The pediatric vaccination schedule to provide optimal protection
against diphtheria, tetanus, and pertussis calls for five doses of
vaccine--three doses given at ages 2, 4, and 6 months as the primary
infant series, and two booster doses given between the ages of 12 and
18 months and between the ages of 4 and 6 years.
Since 1948, whole-cell pertussis vaccines (DTP), which contain
inactivated whole bacterial cells of the pathogen that causes the
disease, have been recommended to fulfill the five-dose regimen. In
recent years, DTP has been associated with a number of adverse
reactions and side effects. Concerns about its safety led to the
development of the DTaP vaccine, which contains acellular pertussis, a
more purified vaccine which contains only components of the bacterium,
rather than the whole cell. DTaP causes fewer adverse reactions in
children and is considered to be a safer alternative than DTP. In
1991, both Wyeth-Lederle and Connaught received Federal Drug
Administration (FDA) licenses to manufacture DTaP for use only as the
fourth and fifth booster doses in the vaccination schedule. The
requirements for the infant series in the schedule were still to be
filled by DTP, as no manufacturer was licensed to provide DTaP for
this purpose.[2]
The CDC's contracts for the booster doses of DTaP were scheduled to
expire at the end of August 1996. In a draft document dated July 25,
1996, the CDC outlined its options for meeting its DTaP requirements
under the VFC Program.[3] Among other things, the agency considered
whether it should award a single contract or different varieties of
multiple contracts. In this regard, as discussed below, OBRA states
that the agency shall, as appropriate, enter into contracts with each
qualified manufacturer. The agency was aware that five manufacturers
were currently seeking or planning to seek licensure to provide DTaP
in the infant series, and expected that such licenses would be issued
within 1 to 12 months. The CDC opted to negotiate a contract with
"all vaccine companies that are licensed to provide DTaP for use in
infants beginning at 2 months of age."
On July 31, approximately 1 month before the CDC's current contracts
for DTaP were to expire, the FDA licensed Connaught to distribute
DTaP for the infant series. Hence, Connaught was now the only
manufacturer licensed to provide DTaP for all five doses.
On August 13, the contracting officer telephoned the manufacturers
known or believed to be seeking licensure for the required vaccine.
Her contemporaneous accounts of these conversations show that she
generally advised them that a procurement would be synopsized in the
Commerce Business Daily that week; that a solicitation would be issued
shortly; and that a contract would have to be put in place "very
quickly" to "get the vaccine out to the children." She stated that
the solicitation would contemplate a single award since only one
manufacturer was appropriately licensed, but that a new solicitation
for multiple awards would be issued when additional manufacturers were
licensed. She also asked the manufacturers for the status of their
license applications. One manufacturer, not Wyeth-Lederle, indicated
that its licensure was imminent, but an FDA representative would not
verify this claim. The representative stated that there were
"complicating things" about DTaP, with so many details involved that
she would not want to "hazard a guess" as to when this license would
be approved.
The agency elected to proceed with the procurement as planned, given
the pending expiration of its current contracts, its view that there
was an urgent need to "get the vaccine to the children," and the
uncertainties about licensure of other manufacturers. The
solicitation, issued August 30, anticipated the award of an indefinite
quantity contract to provide DTaP licensed for use in children 2
months of age and older--the entire regimen. The solicitation
provided for a minimum of 4 million doses of vaccine with an estimated
maximum of 16 million doses over a period of 12 months.
Under the heading "Evaluation and Award," the solicitation stated:
"c.The [g]overnment intends to make only one award under this
solicitation, to the offeror that submits the lowest price per
dose.
"d.In order to be considered for award, the offeror must . . .
provide evidence of a current FDA license prior to award for
the proposed product. Product licensure is a matter of
responsibility that may be demonstrated up to the time of
award."
The only substantive submission required of offerors was a vial size,
unit price, and total estimated price. Initial proposals were due on
September 5, 5 days after issuance of the solicitation.
Wyeth-Lederle filed its initial protest just prior to closing. The
firm also submitted a proposal, along with Connaught and a third
manufacturer. While Wyeth-Lederle submitted the lowest price per
dose, the firm was not licensed and was thus ineligible for award.
Connaught was awarded the contract on September 19, in the amount of
$224,960,000, and Wyeth-Lederle's supplemental protest followed. To
date, there is no evidence that any manufacturer aside from Connaught
has been licensed to provide DTaP for the infant series.
Wyeth-Lederle principally argues that the CDC improperly decided to
make only one award; provided for an unduly short response period; and
improperly failed to follow a "statutorily required" procedure with
respect to this vaccine.
DISCUSSION
The primary OBRA provision at issue, codified at 42 U.S.C. sec. 1396s,
states:
"(d) Negotiation of Contracts with Manufacturers
"(7) Multiple Suppliers
"In the case of the pediatric vaccine involved, the Secretary
shall, as appropriate, enter into a contract . . . 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).
. . ."
Wyeth-Lederle does not dispute that this provision does not require
the CDC to award multiple contracts in every acquisition of pediatric
vaccine, but to do so "as appropriate." See SmithKline Beechman
Pharmaceuticals, B-271845, Aug. 23, 1996, 96-2 CPD para. 82. The
protester contends, however, that the CDC had no reasonable basis to
conclude that award to multiple suppliers under this acquisition was
"not appropriate," and, thus, that the CDC improperly failed to allow
for multiple awards.
Strictly speaking, the protester has suffered no prejudice as a result
of the agency's inclusion of the "single award" clause in this
solicitation. That is, even if the "single award" clause were removed
and substituted with a "multiple award" clause, the protester would
still be ineligible for award because it does not possess the required
license. Prejudice is an essential element of a viable protest. See
Lithos Restoration, Ltd., 71 Comp. Gen. 367 (1992), 92-1 CPD para. 379.
It appears, however, that Wyeth-Lederle's real complaint is that the
agency should not have issued any solicitation at all unless it could
have made award to multiple manufacturers--in other words, that the
CDC should have waited until other manufacturers were licensed before
issuing a solicitation.
The record shows that the agency recognized the benefits of making
multiple awards. The options paper reflects that the agency opted to
negotiate contracts with all vaccine companies licensed to provide
DTaP for use in infants beginning at 2 months of age. However, as the
expiration dates of the CDC's current DTaP contracts approached, the
plain fact was that only one manufacturer was so licensed, and all the
evidence showed that the chances of other manufacturers receiving
licenses in the near future were slim. The CDC also believed that it
was vital that a contract be established for the "new" DTaP--that
which could be used for all doses--as soon as possible, as it was much
safer than DTP. As the contracting officer states, the combination of
these factors presented technical considerations which made it
desirable to consider different award strategies. CDC chose to make a
single award rather than delay the procurement for development of a
multiple award scheme. However, CDC made it clear to all
manufacturers that it intends to issue a multiple award solicitation
for the "new" DTaP as soon as another manufacturer has been licensed
to sell the product, and utilized only a 4-month supply as the
guaranteed minimum so that the present contract could be easily
replaced by a new one.
Wyeth-Lederle's arguments, which boil down to a contention that the
justifications for multiple awards outweigh the agency's concern that
this requirement was urgent, are unpersuasive.
Wyeth-Lederle principally asserts that a single award will pose
problems for the other manufacturers in subsequent purchases of the
vaccine. These manufacturers may be discouraged from continued
production of DTaP; they may be unable to obtain a fair market share
for the vaccine; and there may be difficulties with interchangeability
from one brand of the vaccine to another. The CDC's options paper
shows that the agency considered each of these potential problems and
addressed each in view of the circumstances. To alleviate the
negative commercial impact on the manufacturers, the agency planned to
issue a new solicitation for multiple awards as soon as additional
manufacturers were licensed, as discussed above. The CDC also
considered the issue of interchangeability and concluded that the
Advisory Committee on Immunization Practices (ACIP), discussed further
below, would likely allow interchangeability if necessary.
Wyeth-Lederle's implicit argument that additional manufacturers will
soon be licensed is unsupported. The only evidence suggests that
issuance of additional licenses will come later rather than sooner.
In sum, the record compels a conclusion that the CDC considered the
potential problems of a single award and reasonably concluded that the
urgency of the procurement warranted proceeding in this manner.
Wyeth-Lederle contends that the CDC has "substantially overstated" the
public health significance of DTaP for use in infants in determining
that there was an urgent need for this procurement.[4]
The record is abundantly clear that the agency considered this
acquisition to be urgent because it wanted to provide what is
universally acknowledged to be a safer vaccine to children covered by
this program. The CDC's recent statement in this regard, see 61 Fed.
Reg. 48596, 48597 (Sept. 13, 1996), is consistent with those made by
others in the scientific community. According to the CDC, DTP is an
acceptable alternative to DTaP, but the latter is the preferred
alternative. DTaP is less likely to cause the mild and moderate
problems seen after DTP is received. Mild problems are soreness,
redness, or swelling where the shot was given; fever; fussiness;
drowsiness; and diminished appetite. Moderate problems are ongoing
crying for 3 hours or more; fever of 105 degrees Fahrenheit or higher;
unusual, high-pitched cries; seizures; and shock-collapse. Severe
problems--decreased consciousness, coma, or long seizure--also occur
after receipt of DTP. These problems cause some children lasting
brain damage, but there is disagreement about whether DTP is the
cause. The risk of serious problems after receipt of DTaP is not yet
known, but experts believe it is even less likely to occur than after
receipt of DTP.
Wyeth-Lederle contends that the fact that DTP is still an acceptable
alternative, and the fact that only the mild and moderate problems are
proven to occur less frequently when DTaP is used, preclude the agency
from determining that its needs for DTaP are urgent. Given the
statements above, and others in the record which confirm those
statements, we cannot agree. The contracting officer states that
"[i]t would be unconscionable to withhold this product from the
[n]ation's children for any reason, including waiting some
indeterminable period for other manufacturers to have licenses
approved by the FDA." Wyeth-Lederle has not shown that the
contracting officer's concern, or her decision based upon that
concern, is unreasonable. Under the circumstances, we have no basis
to question any aspect of the agency's determination that appropriate
circumstances existed here to warrant a single award.
Wyeth-Lederle also argues that the CDC improperly "ignored
requirements for identification of vaccines" to be purchased under the
VFC Program. In this regard, OBRA provides that "[t]he Secretary
shall use, for the purpose of the purchase, delivery, and
administration of pediatric vaccines under this section, the list
established (and periodically reviewed and as appropriate revised) by
the
[ACIP]. . . ." 42 U.S.C. sec. 1396s(e).
In 1994, the ACIP adopted VFC Resolution No. 2/94-3 to initially
provide for use of DTaP in the VFC Program. This resolution limited
use of DTaP to the fourth and fifth doses. However, on June 20, 1996,
"to assure the most rapid incorporation of DTaP vaccines into the
routine immunization program," the ACIP approved VFC Resolution No.
6/96-2, which broadened use of DTaP in the VFC Program to include
administration to infants as young as 2 months of age, subject to
three conditions: that the DTaP vaccine(s) is (are) approved for this
use by the FDA; that the ACIP has published a notice in the Morbidity
and Mortality Weekly Report (MMWR) recommending the use of DTaP
vaccines for all five doses; and that a federal contract for purchase
of DTaP vaccine for all five doses has been established.
All of these conditions have been met. The FDA has approved
Connaught's DTaP vaccine for use in the infant series. On August 9,
the ACIP published a notice in the MMWR recommending the use of
Connaught's DTaP vaccine for the first three doses, and had previously
approved DTaP vaccines for the last two doses. A federal
contract--this one--for purchase of DTaP for all five doses has been
established. The agency considers that it has fully met its statutory
obligations.
Wyeth-Lederle argues that this resolution has not been published in
the Federal Register and subjected to notice and comment--as were the
initial ACIP list and at least one subsequent revision--and that it
cannot therefore be used by the agency for the purpose of this
acquisition. However, the statute does not require that any
particular procedure be followed to make ACIP's revisions to the list
effective. The recommendation is clear that the ACIP wanted rapid
incorporation of DTaP into the immunization program, and that the
conditions it established for such incorporation have been met. While
Wyeth-Lederle correctly asserts that the ACIP plans to do further work
in this area, the protester has not shown that this work must be done
before the CDC can consider this recommendation effective for purposes
of OBRA. Under the circumstances, we have no basis to conclude that
the agency's actions here were improper.[5]
The protests are denied.
Comptroller General
of the United States
1. The VFC Program is provided for by the Omnibus Budget
Reconciliation Act of 1993 (OBRA), 42 U.S.C. sec. 1396s (1994). This is
a federally funded program for the acquisition and distribution of
pediatric vaccine for the immunization of eligible children.
2. Both of these firms are licensed to manufacture DTP for use
throughout the regimen.
3. The CDC had issued a solicitation to procure DTaP for only the
fourth and fifth booster doses in the spring. That solicitation was
canceled in view of the CDC's expectation that licenses would soon be
awarded to manufacturers of DTaP for the infant series as well. The
record shows that the CDC did not want to award a separate contract
for the booster doses due to inherent logistical problems and safety
issues that could arise with two vaccines on the shelf with different
indications.
4. The protester makes this argument in the context of its challenge
to the agency's use of a 5-day response time instead of the "standard"
30-day response time. See Federal Acquisition Regulation sec. 5.203(b);
12.205(c). A review of its pleadings, however, shows that the
argument applies equally here, and that the issues are intertwined.
In any event, Wyeth-Lederle was not prejudiced by the agency's use of
the shorter period since even if the agency had used the longer
period, the firm would not have been eligible for award because it is
not properly licensed. Further, the shorter period did not prevent
the firm from submitting the lowest-price per dose.
5. As for Wyeth-Lederle's argument that the CDC gave Connaught an
unfair competitive advantage by telling the firm that there would be a
5-day response period, the protester has not shown that any advantage
was gained since the protester itself offered the lowest price per
dose. In a related argument, the protester's assertion that the
agency engaged in an improper de facto sole source award to Connaught
is belied by the fact that multiple proposals were submitted and
considered, and the agency's statement that the protester would have
received award if it had been licensed.