TITLE:	Federal Prison Industries, Inc.
BNUMBER:	   B-290546
DATE:		   July 15, 2002
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Federal Prison Industries, Inc., B-290546, July 15, 2002

Decision


Matter of:   Federal Prison Industries, Inc.

File:            B-290546

Date:              July 15, 2002

Marianne S. Cantwell, Esq., and William Robinson, Esq., Department of
Justice, for the protester.
Julius Rothlein, Esq., and Edward N. Ramras, Esq., Headquarters U.S. Marine
Corps, for the agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

General Accounting Office will not review protest of agency's determination
that Federal Prison Industry's (UNICOR) product was not comparable to
private sector products, since UNICOR's enabling statute provides for
binding resolution of such disputes by an arbitration board.

DECISION

Federal Prison Industries, Inc. (UNICOR) protests the U.S. Marine Corps's
award of contracts to four Federal Supply Schedule (FSS) vendors for
furniture to be installed at the Amphibious Warfare School (AWS), Quantico
Marine Corps Base, Virginia.

We dismiss the protest.

At the time the Marine Corps identified its requirement for furniture, it
was mandatory for the agency to use UNICOR products to meet the
requirement.  18 U.S.C. ï¿½ 4124 (2000); Federal Acquisition Regulation (FAR)
ï¿½ 8.602(a).  Subsequently, the National Defense Authorization Act for Fiscal
Year 2002 (Pub. L. No. 107-107, ï¿½ 811) enacted 10 U.S.C. ï¿½ 2410n to require
the Secretary of Defense (effective October 1, 2001) to conduct market
research prior to purchasing UNICOR products, in order to determine whether
the UNICOR product is "comparable in price, quality, and time of delivery to
products available from the private sector."  10 U.S.C. ï¿½ 2410n(a).  If the
product is determined not to be comparable, the Secretary must use
"competitive procedures" and consider a timely offer from
UNICOR.  10 U.S.C. ï¿½ 2410n(b).  Interim implementing regulations (Defense
Federal Acquisition Regulation Supplement (DFARS) ï¿½ï¿½ 208.602, 208.606,
210.001) became effective on April 26, 2002.  67 Fed. Reg. 20687 (2002).

The Corps began working with UNICOR in October 2000 to develop the
parameters of its furniture requirement while the AWS space to be furnished
was being renovated by another contractor.  By March 2002 UNICOR had
submitted design information and a final bill of materials.  Since 10 U.S.C.
ï¿½ 2410n became effective during this period, in March the agency began
proceeding in accordance with the provision.  The Corps conducted market
research to determine whether private sector vendors on the General Services
Administration's FSS could meet the requirement; this research demonstrated
that an FSS vendor could meet the requirement at a price lower than the
price reflected in UNICOR's final bill of materials.  Affidavits of Lt. Col.
William E. Wetzelberger, June 4 and 14, 2002; Contracting Officer's
Statement (COS) ï¿½ 7.  In addition, the contracting officer understood that
UNICOR needed a long lead time for delivery (90 days) and installation (an
additional 3 weeks) and apparently could not meet the delivery schedule of
complete installation by July 12 based on the Corps's inability to place the
order before the end of April.[1]  COS ï¿½ï¿½ 4-5,7-8.  Based on the apparent
lead time needed by UNICOR and its higher price, the contracting officer
then determined that UNICOR's products were not comparable to those offered
by the FSS vendors.  COS ï¿½ 8.

Following the non-comparability determination, in order to comply with the
"competitive procedures" requirement, the contracting officer decided to
conduct an FSS?type competition, without a formal solicitation, and in mid-
to late March obtained e-mail verification of prices and delivery from the
FSS vendors and UNICOR.  COS ï¿½ï¿½ 8-9.  UNICOR's response included its price
(which was higher than one of the FSS vendors' prices) and stated that it
could meet a delivery/installation completion date of July 8, but also
stated that "UNICOR will need to receive a purchase order by 1, April,
2002."  Agency Report (AR) Tab 7.  Since funding was not obligated for the
project until on or about April 26 (Affidavit of Lt. Col. Wetzelberger, June
4, 2002), by May 1, well after UNICOR's April 1 purchase order deadline, the
contracting officer determined that UNICOR's delivery terms would not meet
the agency's needs.  AR Tab 14.  Based on this conclusion, as well as
UNICOR's higher price, the agency issued purchase orders to FSS vendors on
May 3.  Id.  This protest followed.

COMPARABILITY DETERMINATION

UNICOR challenges the Corps's determination that its products are not
comparable to those of the private sector due to higher price and inability
to meet the delivery schedule.  The Corps asks that the protest be dismissed
because, among other reasons, UNICOR's enabling statute provides for an
arbitration board to resolve disputes between agencies and UNICOR.  18
U.S.C. ï¿½ 4124(d).

Under the Competition in Contracting Act of 1984, 31 U.S.C. ï¿½ï¿½ 3551-56
(2000), our Office's jurisdiction includes consideration of objections to
solicitations, awards of contracts for the procurement of property or
services, and protests "concerning an alleged violation of a procurement
statute or regulation."  31 U.S.C. ï¿½ï¿½ 3551(1), 3552.  However, where
Congress has vested oversight and decision-making authority in a particular
federal official or entity, we will not consider protests involving issues
that are properly for review by that official or entity.  Mississippi State
Dep't of Rehab. Servs., B-250783.8, Sept. 7, 1994, 94-2 CPD ï¿½ 99 at 3
(disputes by state licensing agencies under the Randolph?Sheppard Act,
20 U.S.C. ï¿½107 et seq.); High Point Sec., Inc.--Recon. and Protest,
B-255747.2, B?255747.3, Feb. 22, 1994, 94-1 CPD ï¿½ 169 at 2 (determinations
by the Small Business Administration under the certificate of competency
program pursuant to 15 U.S.C. ï¿½ 637(b)(7)); ARA Envtl. Servs., Inc.,
B?254321, Aug. 23, 1993, 93-2 CPD ï¿½ 113 at 2 (protest of award under the
Javits?Wagner-O'Day Act, 41 U.S. C. ï¿½ï¿½ 46-48c).

UNICOR's enabling statute provides that federal agencies "shall purchase at
not to exceed current market prices, such products of [UNICOR] . . . as meet
their requirements . . . ."  18 U.S.C. ï¿½ 4124(a).  Where agencies and UNICOR
are unable to agree as to whether these price and acceptability conditions
have been met, they must have their disputes resolved by an arbitration
board specifically established for this purpose.  The statute provides in
this regard as follows:

Disputes as to the price, quality, character, or suitability of [UNICOR]
products shall be arbitrated by a board consisting of the Attorney General,
the Administrator of General Services, and the President, or their
representatives.  Their decision shall be final and binding upon all
parties.
18 U.S.C. ï¿½ 4124(b).  This provision vests the board with binding authority
to resolve disputes between agencies and UNICOR.  Since 10 U.S.C. ï¿½ 2410n
made no express changes to the board's authority with regard to DOD
purchases, we believe its authority to resolve disputes between DOD agencies
and UNICOR remains intact.  Further, while the board was created to
arbitrate disputes related to mandatory UNICOR purchases, we find no basis
for concluding that its authority now does not apply to DOD purchases, such
as the one here, simply because they are subject to a new process.  This is
particularly the case since the comparability determination provided for
under ï¿½ 2410n, which encompasses "price, quality and time of delivery,"
involves essentially the same considerations covered by the board's
authority under ï¿½ 4124(b), "price, quality, character, or suitability."[2]
We conclude that UNICOR's disagreement with the Corps's determination that
UNICOR's products are not comparable as to price or delivery to private
sector products is subject to the board's binding authority.  Accordingly,
our Office will not review the matter.  Mississippi State Dep't of Rehab.
Servs., supra.

STATUTORY COMPLIANCE

UNICOR also argues that the Corps failed to comply with various requirements
under ï¿½ 2410n(b) and the implementing regulations, in particular, whether
the agency's FSS-type competition in lieu of a formal solicitation comported
with the requirement that "competitive procedures" be used.  (The Corps
points out, correctly, that the term "competitive procedures" is defined in
10 U.S.C. ï¿½ 2302(2) as including FSS purchasing procedures.)  Noting that,
even where a statute provides for exclusive jurisdiction in another forum
(citing the Randolph-Sheppard Act), our Office will review an agency's
interpretation of implementing regulations,  see Department of the Air
Force--Recon., B?250465.6 et al., June 4, 1993, 93-1 CPD ï¿½ 431, UNICOR
asserts that we should review its additional arguments notwithstanding our
conclusion regarding the comparability determination issues.

We agree with UNICOR that issues related to the Corps's compliance with the
statute--as opposed to its comparability determination--appear to fall
outside the board's dispute resolution authority under 18 U.S.C. ï¿½ 4124(b).
However, because the initial step in the process is determining
comparability, those issues become relevant only after the agency has made a
proper comparability determination.  In this regard, if the board made a
binding determination that, contrary to the Corps's finding, UNICOR's
products were comparable, the agency would be required to purchase UNICOR's
products, and the statutory compliance issues would be







academic.  Thus, until the issue of comparability is resolved by the
arbitration board, it would be premature for us to consider the merits of
these additional issues.[3]

The protest is dismissed.

Anthony H. Gamboa
General Counsel

                          -------------------------

[1] The contracting officer's understanding was based on information from
Capt. Clay Tipton and Lt. Col. Wetzelberger.  According to these officers,
UNICOR stated that it required 90 days notice from order to delivery and 3
weeks for installation, Affidavits of Capt. Tipton and Lt. Col. Wetzelberger
(June 4, 2002); COS ï¿½ 5.  According to Lt. Col. Wetzelberger, no decision on
ordering furniture could be made until after a late-April walk-through of
the AWS space being renovated, at which time the Corps would decide if it
could move in by the beginning of the next academic year.  Affidavit of Lt.
Col. Wetzelberger, June 4, 2002.
[2] We note that, while the comparability term "time of delivery" (in ï¿½
2410n) is not found in ï¿½ 4124(b), we think the board's authority to resolve
disputes over "suitability" reasonably can be read as encompassing
delivery.
[3] The Corps argues that UNICOR's protest also is dismissible because the
protest is untimely, and UNICOR is not an interested party under our Bid
Protest Regulations.  4 C.F.R. ï¿½ï¿½ 21.0(a), 21.2(a)(2) (2002).  We do not
think either of these arguments would preclude our review in the future.
First, even if the protest were not timely filed, the statutory
interpretation issues would appear to constitute issues "significant to the
procurement system," which we would review in accordance with 4 C.F.R.
ï¿½ 21.2(c).  With regard to UNICOR's status as an interested party, the Corps
notes that when a federal agency purchases UNICOR products, the exchange is
an intragovernmental transfer, not a contract, 18 U.S.C. ï¿½ 4124(c); the
agency then cites our decision in American Fed'n of Gov't Employees,
AFL-CIO, et al., B?282904.2,
June 7, 2000, 2000 CPD ï¿½ 87 at 7, in which we found that unions and federal
employees are not interested parties, in part, because they would not
receive a contract to perform if an OMB Circular A-76 competition resulted
in work being retained in-house.  However, the absence of a contract was
only one of several factors that led to our conclusion there; we do not
think that the mere fact that an intragovernmental transfer uses a vehicle
different from the contract the government typically enters into with a
private firm would be a sufficient basis for finding that UNICOR is not an
interested party.