TITLE:  Kendall Healthcare Products Company, B-289381, February 19, 2002
BNUMBER:  B-289381
DATE:  February 19, 2002
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Decision

Matter of: Kendall Healthcare Products Company

File: B-289381

Date: February 19, 2002

Kevin P. Connelly, Esq., Seyfarth Shaw, for the protester.

Barbara J. Stuetzer, Esq., and Phillipa L. Anderson, Esq., Department of
Veterans Affairs, 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. Protest that the agency deprived potential competitor of an opportunity
to compete because the procurement was misclassified in the Commerce
Business Daily is denied where the record shows that the agency reasonably
classified the contemplated contract action, mailed copies of the
solicitation to 14 sources, and obtained competition and reasonable prices.

2. Protester's apparent nonreceipt of solicitation provides no basis to
sustain protest where agency did not violate applicable regulations
governing advertisement and dissemination of the solicitation or
deliberately attempt to exclude protester from the competition; rather, the
protester failed to take reasonable measures to obtain a copy of the
solicitation even though it did receive a copy of solicitation amendment.

DECISION

Kendall Healthcare Products Company (Kendall) protests the award of a
contract to Novartis Nutrition Corporation under request for proposals (RFP)
No. 797-NC-01-0019, issued by the Department of Veterans Affairs, National
Acquisition Center (VANAC) to acquire piercing spike sets and feeding bags
with attached pump (feeding pump sets). Kendall, a Federal Supply Schedule
(FSS) contractor with a schedule contract for feeding pump sets, alleges
that it was excluded from the competition because the procurement was
misclassified in the Commerce Business Daily (CBD) and the agency failed to
provide the firm with a copy of the solicitation.

We deny the protest.

On June 12, 2001, the procurement was published in the CBD under
classification code 89, "subsistence." The notice announced VANAC's
intention to issue a solicitation on or about July 1 for nutritional items
(dietary supplements, tube feedings, and specialty thickened products), and
feeding pump sets. The notice advised that the RFP would be posted on the
agency's Internet web site and would be available for downloading;
interested firms without Internet capabilities could contact the agency by
facsimile or e-mail transmission to obtain a paper copy of the solicitation.

The RFP, issued on an unrestricted basis on July 10 and amended three times,
provided for award of multiple requirements contracts for a base year, with
four
1-year options. As amended, the RFP identified the procurement as a
commercial item acquisition and listed 46 line items, of which 44 are for
dietary supplements specifically formulated for the management of
malnutrition and other medical conditions. These include ready-to-hang (RTH)
products, which are premixed dietary supplements that are commercially
available in 1-liter and
1.5-liter feeding bags. These RTH products are fed to patients by first
piercing the feeding bag with a spike set which allows the product to flow
through tubing; a pump attached to this tubing regulates the flow of the
product to the patient. [1] In addition, the RFP included two line items for
feeding pump sets, which are used with RTH products. Line item 44 sought
prices for a single feeding bag that can be used to provide feeding
formulas, water for hydration, or both, to patients. Line item 45 calls for
dual feeding bags for the same uses.

Each award was to be made to the responsible offeror whose proposal was most
advantageous to the government under the stated evaluation factors for one
product group, multiple product groups, or all product groups. [2] RFP at
73. Offerors were advised that individual delivery orders would be issued
directly to the contractor by the ordering activity and through the agency's
"subsistence prime vendor" identified in attachment B of the solicitation,
or through the agency's pharmaceutical prime vendor identified in attachment
A to the solicitation. [3] RFP at 4-5. This protest involves the award of
line items 44 and 45.

The agency reports that its contracting and dietetic service personnel
compiled a mailing list for this procurement that consisted of 14
prospective offerors known to provide dietary supplements and feeding pump
sets. The list of prospective offerors included Kendall and Sherwood
Medical, a firm the contracting officer subsequently learned had been
acquired by Kendall. Contracting Officer's Statement at 2. The mailing
address for Kendall, as it appears on the mailing list, is 15 Hampshire
Street, Mansfield, Massachusetts 02048, to the attention of Trisha Goguen,
which it is undisputed is the correct address and contact person for the
company. The agency reports that it mailed the solicitation materials to the
14 firms on the mailing list, including Kendall. Amendment No. 1, issued on
July 23, provided a new attachment B that advised prospective offerors of
the new subsistence prime vendor; the contracting officer mailed this
amendment to all 14 firms on the mailing list. Kendall returned this
amendment to the contracting officer (postmarked July 31, 2001), with the
following handwritten notation:

Kendall is not participating in this sol[icitation].
[signed] Trisha Goguen, July 30, 2001.

Agency Report (AR) exh. 9, Annotated Amendment. As a result, Kendall was
removed from the mailing list and no subsequent amendments were sent to the
firm. Of the eight offers received, four firms submitted offers for line
item 44, and two of those firms also submitted proposals for line item 45.
On October 15, the VANAC awarded several line items to Novartis, including
line items 44 and 45, and notice of the award was published in the October
25 CBD under classification code 89.

The principal issue raised by Kendall is that the firm was excluded from the
competition because the procurement had been published under an
inappropriate CBD classification code. Specifically, Kendall contends that
feeding pump sets are properly classified under classification code 65,
"Medical, dental and veterinary equipment and supplies" and that
classification code 65, not classification code 89, is the appropriate code
under which VANAC should have published this procurement for dietary
supplements in the CBD. Protest at 3-4; Protester's Comments at 2-4. Kendall
explains that the firm identifies contracting opportunities through its
review of notices announced in the CBD under classification code 65. Since
it does not manufacture or sell products that are published under
classification code 89, the protester states that it does not have a CBD
subscription for classification code 89 and was therefore unaware of the CBD
notice for the procurement at issue. Protest at 3; Protester's Comments at
14-15.

The Federal Acquisition Regulation (FAR) sect. 5.207 governs the preparation and
transmittal of CBD notices. The FAR directs contracting officers to classify
the contemplated contract action under the one classification code which
most closely describes the acquisition. FAR sect. 5.207(c)(4)6. The FAR lists
various classification codes and their corresponding description. For
example, as stated previously, supplies being procured under code 65 are
described as "Medical, dental, and veterinary equipment and supplies," and
supplies under code 89 are described as "Subsistence." FAR sect.sect. 5.207(h)(2).
Of relevance to this protest is the requirement at FAR sect. 5.207(h)(3) that:

[o]nly one classification code shall be reported. If more than one code is
applicable, the contracting officer shall use the code which describes the
predominant product or service being procured. The FPDS [Federal Procurement
Data System] Product and Service Codes Manual, October 1988, may be used to
identify a specific product or service within each code.

The responsibility for determining the appropriate classification code rests
with the contracting officer, and classification determinations necessarily
involve some degree of judgment on the part of the contracting officer. Our
Office will not overturn such a determination unless it is shown to be
unreasonable. Price Waterhouse, B-239525, Aug. 31, 1990, 90-2 CPD para. 192 at
4. As discussed below, Kendall's criticisms of the contracting officer's
determination as to the appropriate classification code for this procurement
do not establish that the contracting officer's determination was
unreasonable.

At the time the notice was being prepared, the contracting officer
determined that classification code 89 was the "predominant" code because
the solicitation listed
43 dietary supplement line items and only two line items of medical
equipment or supply items (feeding pump sets), which were to be used only
with the RTH products, which were themselves optional items under the RFP.
[4] The contracting officer further states that this determination was
consistent with her prior determination to publish the 1996 procurement for
dietary supplements under classification code 89 in the February 21, 1996,
CBD announcement. In this regard, the contracting officer states:

Before I transferred to the National Contracting Service at the VA National
Acquisition Center in 1993, I worked at the Hines Supply Depot and managed
inventory including dietary supplement. The first four numbers of the
National Stock Number (NSN) for all dietary supplement items were 8940,
which is a subclass of Group 89 Subsistence. Inventory Management at the VA
National Acquisition Center, uses Cataloging Handbook H2 [published by the
Defense Logistics Agency] and that Handbook also shows that 8940 is the
class code for dietary supplements.

Contracting Officer's Statement at 2.

In response, Kendall has submitted CBD announcements of prior dietary
supplements procurements by the Department of Veterans Affairs as well as
other federal agencies, such as the General Services Administration (GSA),
which were published under code 65 as further support that classification
code 65 was the appropriate code to be used here.

More specifically, Kendall points out that, in 1997, the contracting officer
for this procurement used classification code 65 to publish five award
notices in the CBD for national dietary supplements contracts. Protester's
Comments at 2. However, the contracting officer for this procurement, who
was also the contracting officer for the prior procurement, states that her
use of classification code 65 to publish the award notices was an
inadvertent error. Contracting Officer's Supplemental Statement. The
contracting officer further states, and the record shows, that she published
the notice of that national procurement for dietary supplements (as opposed
to the award notices) in the February 21, 1996 CBD under classification code
89. AR exh. 5, CBD Notice, Feb. 21, 1996. We have no basis to question the
contracting officer's statement. In our view, the more relevant point is
that the contracting officer published the notice of the acquisition in
1996, as she did under this protested acquisition, under classification code
89.

Kendall further argues that the term "dietary supplement" is not a
description for any of the classification codes listed in FAR sect. 5.207(h),
and is not found under any search of classification code 89, subsistence.
Kendall states that the General Services Administration (GSA) schedule
contracts for dietary supplements are under Federal Supply Classification
group 65, part I, section B, special item number 42-5, nutritional/dietary
supplements, and therefore an a FSS contractor like Kendall would reasonably
assume that dietary supplements are identified under classification code 65.
Protester's Comments at 4-6.

We do not believe that GSA's classification of dietary supplement under code
65 establishes that the contracting officer's decision here was
unreasonable. As stated above, FAR sect. 5.207(h)(3) identifies the FPDS Product
and Service Codes Manual as a standard classification source that may be
used to identify a specific product or service within each code. That
Manual, which was provided by the agency in its report on the protest,
includes code 89, subsistence, under which product code 8940, entitled
"Special Dietary Foods and Food Specialty Preparations," is listed. Another
classification source, which assists users in choosing the appropriate
product or service code, is the Federal Procurement Data Center PSC Wizard,
an Internet search program. The agency reports, and the record confirms,
that an on-line search of the term "dietary" directs the user to product
code 8940 under classification code 89; if "dietary supplement" is the
search term, the user is informed that there is no product group which
contains that two word search term. AR encl. 13, PSC Wizard Search. These
standard classification sources, one of which is specifically referenced in
the FAR, identified product code 89 as the classification code that most
closely describes the acquisition at issue here. Accordingly, the
contracting officer's classification determination was consistent with the
applicable regulations, and standard classification sources, as well as the
agency's prior procurement history of using code 89 when procuring dietary
supplements.

Under the circumstances the record does not establish that VANAC acted
unreasonably in classifying the procurement at issue here under code 89,
subsistence. To the extent Kendall chose to limit its subscription and
review of CBD announcements to classification code 65, this was solely its
own decision.
We will not attribute Kendall's failure to review the June 12 CBD notice of
this procurement to the agency, which reasonably classified the contemplated
contract action under an appropriate code; there is no basis to conclude
that publication under code 89 in the CBD unreasonably restricted
competition.

Kendall next alleges that VANAC did not comply with the requirement for full
and open competition because the agency failed to provide the protester with
a copy of the RFP and that this failure precluded it from submitting an
offer. Kendall asserts that it has an internal system for tracking
solicitations and that it is unlikely it would not have responded had it
received the RFP. The protester explains that although it received amendment
No. 1, nothing in the amendment provided any indication that the procurement
was for feeding pump sets. Protest at 5 n.3.

The Competition in Contracting Act of 1984 (CICA) generally requires
contracting agencies to obtain full and open competition through the use of
competitive procedures, the dual purpose of which is to ensure that a
procurement is open to all responsible sources and to provide the government
with the opportunity to receive fair and reasonable prices. 41 U.S.C. sect.
253(a)(1)(A) (1994), Cutter Lumber Prods., B-262223.2, Feb. 9, 1996, 96-1
CPD para. 57 at 2. In pursuit of these goals, a contracting agency has the
affirmative obligation to use reasonable methods to publicize its
procurement needs and to timely disseminate solicitation documents to those
entitled to receive them. Concurrent with the agency's obligations in this
regard, prospective contractors also must avail themselves of every
reasonable opportunity to obtain the solicitation documents. Laboratory Sys.
Servs., Inc.,B-258883, Feb. 15, 1995, 95-1 CPD para. 90 at 3-4. Consequently,
where a prospective contractor fails to do so, we will not sustain the
protest even if the agency failed in its solicitation dissemination
obligations, and in considering such situations, we consider whether the
agency or the protester had the last clear opportunity to avoid the
protester's being precluded from competing. Id.

Here, in light of our discussion above, we cannot attribute Kendall's
apparent nonreceipt of the solicitation to any deficiencies in the agency's
dissemination process or to a deliberate attempt to exclude the protester
from the competition. Kendall does not dispute that the solicitation and
amendment mailing lists contain the protester's correct mailing address as
well as the correct name for its contact person. Kendall in fact received
amendment No. 1. There were no returned envelopes showing that the
solicitation mailing to Kendall was misaddressed or otherwise undeliverable.
Kendall's apparent failure to receive the RFP at issue here is not evidence
of any deliberate action on the part of the agency to exclude the firm from
competing. The risk of nonreceipt of solicitation documents rests with the
offeror, since the contracting agency is not a guarantor that these
documents will be received in every instance. In short, VANAC timely
publicized the acquisition in the CBD, and furnished copies of the RFP to
the firms on the mailing list. The agency ultimately received eight offers
as a result of its efforts and awarded the contract for the line items at
issue at a price the agency has determined to be reasonable. [5]

Moreover, in our view, Kendall did not avail itself of the agency's
reasonable efforts to disseminate the solicitation and the amendments; the
protester by its own admission, limits its CBD reviews to code 65
procurements and in this case did not contact the agency after receiving a
copy of amendment No. 1. Although Kendall argues that these actions were
unnecessary because VANAC published the CBD notice under a classification
code it does not review and that the protester had no reason to contact the
agency despite its receipt of amendment No. 1, we are not persuaded that
Kendall took all reasonable measures to obtain a copy of the solicitation.
Kendall learned of the RFP based on its receipt of amendment No. 1, and knew
that it had not received a copy of the RFP. Despite not having received a
copy of the RFP, Kendall did not contact the agency to request a copy of the
RFP referenced in the amendment, or at least to inquire about the nature of
the acquisition, even though the protester was fully aware that VANAC had
issued a solicitation. Rather, as discussed above, Kendall simply returned
the amendment to the contracting officer with the notation that the firm was
not participating in the procurement, based on its assumption that the
solicitation did not include items it could supply. Thus, Kendall's
exclusion from the competition resulted from its own failure to act, not
from any improprieties in the agency's dissemination process.

The protest is denied.

Anthony H. Gamboa
General Counsel

Notes

1. See, e.g., line items 3b, 4b, 8b, 8c, and 9b. The solicitation advised
that RTH products are optional items. RFP at 73.

2. In most cases, a product group consists of the product and its various
flavors.

3. Historically, the VA acquired its requirements for dietary supplements
through direct delivery national contracts. These products used to be
stocked and supplied through VA's supply depots. VANAC began contracting for
these products in 1993-1994 when the agency began closing its supply depots.
Contracting Officer's Statement at 1.

4. Amendment No. 3 added an additional dietary supplement item to the RFP.

5. The protester does not allege that the awardee's price is unreasonable.