BNUMBER: B-279714
DATE: July 14, 1998
TITLE: Instrument Specialists, Inc., B-279714, July 14, 1998
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Matter of:Instrument Specialists, Inc.
File:B-279714
Date:July 14, 1998
Carl Payne Tobey, Jr., Esq., for the protester.
Darryl Bardusch, Esq., Maj. Michael J. O'Farrell, and Col. Nicholas P.
Retson, Department of the Army, for the agency.
Paul E. Jordan, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that solicitation requirements for monthly on-site
maintenance tasks and relatively fast turn-around time for off-site
repairs are unduly restrictive of competition is denied where record
establishes that the requirements were reasonably designed to ensure
that the agency's actual needs would be met.
2. Agency is not required to structure solicitation requirements to
eliminate competitive advantages of offerors located closer to site of
performance where advantages did not result from any unfair government
action.
DECISION
Instrument Specialists, Inc. (ISI) protests the terms of solicitation
No. DADA16-98-T-0162, issued by the Department of the Army as a total
small business set-aside, for repair and maintenance of general and
specialized surgical instruments. ISI contends that the
specifications are unduly restrictive.
We deny the protest.
The solicitation contemplated the award of a fixed-price, requirements
contract for a 6-month base period with four, 1-year options, under
which the awardee will perform on-site repair and preventive
maintenance on a monthly basis and off-site services on an as-needed
basis. Off-site turn-around time may not exceed 15 working days.
According to the statement of work (SOW), at 5:
Repair and preventive maintenance work shall include sharpening,
adjusting, polishing, cleaning, realignment and replacement of
parts that are lost, worn, or broken to like new condition on
Government-owned general and specialized surgical instruments for
Tripler Regional Medical Center [Hawaii]; Oral Surgery Service .
. . and all other services at Tripler.
Repair services also include guaranteed quality, color coding, etching
and demagnetizing, reinsulation of laparoscopic instruments, and
replacement of tungsten carbide inserts for needle holders. The
contractor must provide all labor, transportation, equipment,
materials, and supplies to accomplish the SOW requirements, and remove
all materials it brings on-site after each service visit is completed.
Offers in response to the solicitation were due on April 7, 1998.
Instead of submitting an offer, ISI filed this protest challenging
various requirements as being unduly restrictive of competition.
Specifically, ISI objects to the short duration of the base period;
the requirements to clean and polish surgical instruments; the
requirement to furnish a mobile unit to perform the contract;[1] the
requirement for monthly service calls; and the 15 working day,
off-site turn-around requirement. In ISI's view, these
specifications, all of which represent changes from the requirements
under the predecessor contract (which ISI held), are unduly
restrictive with respect to all small businesses not located in
Hawaii. In its comments on the agency report, ISI concedes that it
"can perform in accordance with specifications as presently written,
but at a cost, which will be predictably higher than a local
contractor."
Agencies are required to specify their needs in a manner designed to
promote full and open competition and thus may include restrictive
requirements only to the extent necessary to satisfy their actual
needs. 10 U.S.C. sec. 2305(a)(1)(A)(i), (B)(ii) (1994). We will not
question an agency's determination of its actual needs unless that
determination has no reasonable basis. Innovative Refrigeration
Concepts, B-272370, Sept. 30, 1996, 96-2 CPD para. 127 at 3. Here, we
find that the agency has demonstrated reasonable bases for the
challenged requirements.
With regard to the 6-month base period, the agency explains that the
period coincides with the remainder of the current fiscal year (April
to the end of September) and is specified in order to fund the
services with fiscal year 1998 appropriations. Since the term of
contracts for services funded by annual appropriations shall not
extend beyond the end of the fiscal year of the appropriation (Federal
Acquisition Regulation (FAR) sec. 37.106), there is nothing unreasonable
in the agency's decision. In this regard, ISI does not dispute the
agency's obligation to follow FAR sec. 37.106; rather, ISI argues that it
would not be economical for mainland offerors to submit proposals for
such a short base period and suggests that the agency should wait
until the beginning of the new fiscal year. These contentions are
without merit. The fact that it may not be as economical for some
offerors to compete does not render the agency's actions unreasonable.
Further, as acknowledged by ISI, it has been nearly 2 years since the
end of the predecessor contract. In view of this extended period
without a regular contractor, it is not unreasonable for the agency to
attempt to obtain services sooner, rather than later.
With regard to the requirement that the contractor clean and polish
instruments, the agency explains that it listed these tasks in
addition to others (sharpening, adjusting, realignment, etc.) to make
clear what was entailed in repairing and maintaining instruments to
"like new" condition. Again, ISI does not dispute that the
instruments require cleaning and polishing as part of the refurbishing
process. Rather, ISI observes that under its predecessor contract,
government personnel cleaned and polished the instruments.[2] In
ISI's view, since the agency possesses the necessary sonic washer to
perform these tasks and has done so in the past, the contractor should
not be required to perform these tasks. The agency explains that the
contractor will not take over all routine cleaning, polishing, and
sterilization of surgical instruments, but only that of instruments
the contractor refurbishes. Since ISI itself concedes that cleaning
and polishing are necessary, its mere disagreement with the agency's
determination that it is more efficient for the refurbishing
contractor to perform those tasks does not render that determination
unreasonable. Aaron Refrigeration Servs., B-230833.2, Aug. 17, 1988,
88-2 CPD para. 153 at 4.
The Army explains that its need for monthly service is based on
Tripler's increased surgical caseload and its status as a training
hospital, both of which result in increased instrument use and
breakage rates. Monthly service is necessary in order to provide
quick turn-around time, maintain inventory control, and prolong the
life of the surgical instruments. ISI complains that in the past, the
agency's needs were met by two on-site visits per year. While ISI
claims that nothing has changed at Tripler, it has submitted nothing
to support its claims and has not shown that quick turn-around time,
inventory control, and prolonged life of instruments are not desirable
results that flow directly from more frequent maintenance. For
example, the Army advises that a hip chisel may become dull after a
single surgical procedure and the agency is unwilling to wait up to 6
months for it to be refurbished. As with the other requirements, ISI
admits that it can perform monthly service and simply complains that
the associated costs would make ISI noncompetitive with Hawaii-based
contractors. ISI's desire to minimize its costs does not make the
agency's determination of its needs unreasonable.
With regard to the 15 working day turn-around time for off-site
repairs, the Army acknowledges that in past contracts, the turn-around
time was 26 calendar days. The Army explains that, as with other
instruments, efficiencies associated with quick turn-around time and
inventory control are the basis for the off-site turn-around limit.
While the off-site repair time is shorter than under the predecessor
contract, the Army states that less time will be necessary for
off-site work because of the requirement for monthly on-site service.
This will result in smaller quantities of instruments requiring
off-site service and lower freight costs associated with smaller
quantities. Although ISI complains that the requirement leaves
insufficient time to perform off-site maintenance and repair, it
provides no supporting evidence, other than to assert that it may take
up to 6 days for the instruments to be shipped one way. This is
apparently based on ISI's past performance, which involved larger
volumes of instruments. However, even if considerable time were
required for shipment to and from Tripler, ISI has not explained why
it would be incapable of performing services on fewer instruments in
the remaining time. Instead, ISI simply complains that the reduced
turn-around time will be more costly to, and thereby less competitive
for, mainland offerors. In the absence of any evidence that the
off-site turn-around time is unreasonably short, ISI's complaint
provides no basis to conclude that the reduced time represents an
unduly restrictive specification.
In sum, ISI's protest is based on its belief that as a mainland
contractor, it is at a competitive disadvantage relative to
Hawaii-based contractors. However, in seeking competition, an agency
is not required to construct its procurements in a manner that
neutralizes the competitive advantage that some potential offerors may
have over others by virtue of their own particular circumstances where
the advantages did not result from unfair action on the part of the
government. MCA Research Corp., B-276865, July 29, 1997, 97-2 CPD para.
33 at 2-3. Here, the geographic advantages of local contractors
relative to the protester have nothing to do with any unfair action on
the part of the government. Moreover, notwithstanding ISI's
unwillingness to submit a proposal because of its perception that its
costs would be too high, the record reflects that the agency received
more than one proposal from mainland contractors which were
competitive both with those submitted by Hawaii contractors and with
ISI's costs under the predecessor contract.
The protest is denied.
Comptroller General of
the United States
1. In order to perform the required on-site services, including
replacement of tungsten carbide needle inserts, ISI claims that it
will require a mobile unit. However, nothing in the solicitation
requires contractors to furnish a mobile unit or any other vehicle to
perform the services, and space has apparently been allocated for the
contractor to perform on-site services. In the absence of a stated
requirement, a contractor's choice to use a mobile unit to perform the
contract is a matter of its business judgment which does not establish
that a solicitation is unduly restrictive of competition.
2. ISI's objection stems from its predecessor contract. A new chief
of Central Material Supply was assigned administration of that
contract and he required ISI to clean the instruments it refurbished,
including the removal of rust on the instruments. ISI objected to
what it perceived as additional work and obtained a modification to
its contract to allow the use of government-owned equipment. As a
result of a dispute involving the last option under the predecessor
contract, ISI filed an appeal at the Armed Services Board of Contract
Appeals. ISI also perceived that the Chief had dealt with ISI in bad
faith. Since this allegation concerns the administration of ISI's
predecessor contract, we will not review it. Bid Protest Regulations,
4 C.F.R. sec. 21.5(a) (1998). ISI also speculates that the Chief's bad
faith resulted in the restrictive specifications. However, government
officials are presumed to act in good faith; we will not attribute
unfair or prejudicial motives to procurement officials on the basis of
inference or supposition. Triton Marine Constr. Corp., B-250856, Feb.
23, 1993, 93-1 CPD para. 171 at 6. In addition to producing credible
evidence showing bias, the protester must demonstrate that the agency
bias translated into action that unfairly affected the protester's
competitive position. Id. Here, since the record establishes that
the specifications represent the actual needs of the agency, there is
no basis to infer bad faith.