BNUMBER: B-274785
DATE: January 6, 1997
TITLE: National Office Systems, Inc.
**********************************************************************
Matter of:National Office Systems, Inc.
File: B-274785
Date:January 6, 1997
Dan Harbison for the protester.
David W. Craig for Spacesaver Systems, Inc., an intervenor.
Dennis J. Gallagher, Esq., Department of State, 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
Under regulations governing Federal Supply Schedule (FSS) use,
procuring agency met its responsibility to select the best value items
at the lowest overall price after reviewing the General Services
Administration's automated pricing and product information system and
reasonably determining that the selected FSS contractor's product
meets the agency's needs.
DECISION
National Office Systems, Inc. (NOS) protests the issuance of delivery
order
No. S-FBOAD-96-F-0246 to Spacesaver Systems, Inc. by the Department of
State for high density filing systems to be installed at the State
Department Annex. The delivery order was placed under Spacesaver's
Federal Supply Schedule (FSS) contract No. GS-28F-1003C, for a total
price of $173,399.67. NOS, an authorized dealer for White Systems,
Inc. (the schedule contractor), alleges that the agency failed to
solicit a quotation from the firm, thereby depriving it of an
opportunity to compete. NOS also alleges that the agency's best value
determination was flawed as it was based on an inaccurate assessment
of NOS's product line and past performance.
We deny the protest.
The procurement was initiated in July 1996 when a purchase request for
the filing systems was placed with the agency's General Acquisition
Division. The agency used the Spacesaver specifications to define its
requirements and the contracting officer orally solicited price
quotations from Spacesaver and NOS. Since NOS was the authorized
dealer for the White product line, NOS indicated that it could only
submit a price quote if the specifications were not specific to the
Spacesaver brand system.[1] Another purchase request was subsequently
reissued using generic specifications for the filing systems on
September 9, and the contracting officer reviewed the automated
information available for several FSS contractors, including the
catalogs and price lists for Spacesaver and White. In addition,
because of the specific interest expressed by NOS in this purchase,
the contracting officer asked the requirements office to review the
White catalog to see if its filing system met the agency's needs and
to prepare a cost estimate for the NOS/White system.
The agency estimated the cost for the filing systems offered by
Spacesaver and NOS/White as essentially the same ($18,000 to $20,000
per system); however, based on a comparison of each system's major
line items, the agency evaluators concluded that the Spacesaver filing
system would best meet the agency's needs. For example, in comparing
the Spacesaver rails to the White track, the agency evaluators noted:
"Spacesaver rails are structurally stronger in profile and are
designed to interlock by means of a tongue and groove joint as
opposed to a butt joint used in the White track. This butt joint
is a nondesirable feature when considering stress factors with
regard to mechanical wear and system integrity. In addition, the
Spacesaver rails are levelled and anchored in a bed of continuous
hydraulic grout which disperses the load evenly over the
sub-structure. The White track is leveled with shims that in
conjunction with the butt joints has inherent potential to
misalign by deflection and fail in performance as well as create
point loads on the sub-structure . . . the White tracks rely on
side flanged wheels for carriage guidance which have a tendency
to intensify the problem with maintaining track alignment whereas
the Spacesaver center guide rail enhances alignment and minimizes
carriage binding . . . ."
Similar comparisons were made with regard to elevated floor decking
and ramp, carriage frame, and end panels offered by the two systems,
with the Spacesaver design considered superior in overall strength and
versatility due primarily to its better structural integrity and
variety of available components.
Finally, the evaluators noted that the agency has both the Spacesaver
and White systems installed at the State Department Annex, the
location for installation under the protested delivery order. The
agency reports that it has experienced "no problems with the
Spacesaver installations and only incidental problems with the final
product" whereas installations for the White systems "were plagued
with problems ranging from delivery of the wrong product to
unprofessional workmanship and the final product had several bugs that
persistently reappear." After reviewing this product analysis and
cost comparison, the contracting officer determined that the
Spacesaver system would best meet its needs and issued a delivery
order for six filing systems to Spacesaver on September 18.[2] This
protest followed.
NOS challenges the agency's decision to place an order with
Spacesaver, arguing that the agency failed to properly determine the
lowest overall price available under the FSS. The protester contends
that a valid price comparison could only be performed if the agency
had received actual quotations from each schedule contractor,
including NOS, rather than relying on the General Services
Administration's (GSA) automated catalog/price information. Simply
reviewing schedule prices, according to NOS, does not provide the
agency with a basis for determining installation prices (these prices
are not included in any FSS contractor's price list) or possible price
reductions from published schedule prices.
When agency requirements are satisfied through the use of the FSS, an
agency is not required to seek further competition, synopsize the
requirement, make a separate determination of fair and reasonable
pricing, or consider small business set-asides. Federal Acquisition
Regulation (FAR) sec. 8.404(a) (FAC 90-41); Design Contempo, Inc.,
B-270483, Mar. 12, 1996, 96-1 CPD para. 146. When placing an order of
more than $2,500 under the FSS, however, 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 (MAS) contracts.[3]
FAR sec. 8.404(b),(c). This standard can be satisfied if the procuring
agency reviews GSA's MAS automated information system. FAR sec.
8.404(b)(2)(i)(A).
We think the agency's actions in selecting a vendor to deliver the
filing systems were unobjectionable under the FSS procedures. The
agency states that since most of its requirements, including services
such as installation, can be satisfied through the FSS, the
contracting officer reviewed GSA's MAS automated information system
for Miscellaneous Furniture, Federal Supply Classification Group 71,
Part III, Section J, to obtain product information and prices. While
the protester is correct that this automated information system does
not include prices for services such as installation, the FSS schedule
states that when buying filing cabinet systems, such as the one at
issue here, the agency must "negotiate installation on a
project-by-project basis, requesting an installation price quotation
for each project regardless of dollar value of the project." This
schedule language must be interpreted in a manner consistent with FAR sec.
8.404(b)(2)(i). As noted, that provision requires a procuring agency
to review automated pricing and product information, if such is
available; it does not require procuring agencies to seek further
competition by soliciting quotations. Further, there is no
requirement under the regulations governing FSS use that the agency
solicit competitive quotes in order to obtain price reductions from
schedule contractors. While schedule contractors are allowed to
reduce their schedule contract prices to an individual agency for a
specific order, there is no requirement that they do so. FAR sec.
8.404(b)(3). Since a formal solicitation process is not contemplated
for ordering from an FSS--the purpose of the FSS program is to provide
government agencies with "a simplified process" for obtaining commonly
used supplies and services at prices associated with volume buying--we
have no basis to conclude that the agency erred by not competing its
FSS purchase simply to obtain possible price reductions.[4] See
National Mailing Sys., B-251932.3, Aug. 4, 1993, 93-2 CPD para. 78.
Finally, NOS maintains that even if the agency's actions were
otherwise permissible, its best value determination was nonetheless
flawed because the technical comparisons of the Spacesaver and White
systems were incorrect and inaccurate.
We have reviewed all of NOS's contentions in this respect and find
them without merit. For example, NOS contends that the design and
construction of Spacesaver's rails and wheels is less durable and
reliable than White's as the center guide rail principle is
"susceptible" to a single pivot line which can cause racking around
that line, dirt can accumulate in the groove and cause frictional
problems, and Spacesaver's tongue and groove concept does not "obviate
vertical movement" of the adjoining track sections. On the other
hand, NOS insists that the White system is superior and compares many
of its design features to those of Spacesaver's. For instance, the
protester states that White's use of steel shim under the butt joints
"obviates" any sagging of the track, White's track is anchored and
leveled and disperses the load evenly, there is no misalignment nor
difference in levels of adjoining track at the butt joints since these
are polished to the same heights, all White wheels are load and guide
wheels and they install wheels at every splice point--the strongest
possible solution. However, none of NOS's responses to the agency's
assessment of the quality characteristics of the two filing systems
demonstrates that the agency's assessment and conclusions were
unreasonable. While the protester asserts, for example, that its use
of a steel shim under the butt joints "obviates" any sagging of the
track and that its track design has other superior features, it does
not directly rebut the agency's finding that the butt joint design is
a nondesirable feature which can cause stress and affect mechanical
wear and system integrity. NOS has not established that the agency is
incorrect in its technical conclusion that the design of the White
system, which NOS basically concedes is different from the Spacesaver
design, affects the durability and reliability of the White system.
On this record, NOS's arguments simply represent its disagreement
which does not itself render the technical comparison and conclusions
unreasonable. Litton Sys., Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD para.
115. In light of the above, we find no basis to disturb the agency's
decision to select the Spacesaver system as the system which best
meets the needs of the agency.[5]
The protest is denied.
Comptroller General
of the United States
1. Spacesaver submitted a quotation dated July 11 which it later
supplemented on July 23. NOS only submitted a product catalog to the
agency on September 5.
2. The delivery order also includes non-FSS items, i.e., front-loading
blueprint filing cabinets.
3. The terms "Federal Supply Schedules" and "Multiple Award Schedules"
are used interchangeably throughout Subpart 8.4 of the FAR.
4. NOS also contends that the agency erred in awarding non-FSS items
under this delivery order. In a written justification for these open
market items, the contracting officer noted that front loading
blueprint cabinets were not available from GSA schedule contractors
and concluded that it was in the best interest of the government to
obtain these front loading cabinets from Spacesaver, so that
Spacesaver would be responsible for integrating them into the high
density filing system. An agency may properly procure non-FSS items
under a single procurement where, as here, the non-FSS items are
incidental to the items being procured from an FSS vendor. See Design
Contempo, Inc., supra.
5. While we do not specifically address NOS's other bases for protest
such as the agency's alleged improper evaluation of its past
performance, we have considered these allegations and consider them to
be without merit.