TITLE:  Matter of:    Phenix Research Products 
BNUMBER: B-292184.2 
DATE: August 8, 2003 
**********************************************************************
Phenix Research Products, B-292184.2, August 8, 2003

   Decision
    
    
Matter of:    Phenix Research Products
    
File:             B-292184.2
    
Date:              August 8, 2003
    
Gregory Schulz for the protester.
Hiram Reinhart for Para Scientific Company, an intervenor.
Warren D. Leishman, Esq., Agency for International Development, for the
agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.

   DIGEST
    
Where agency accepted equipment not meeting material solicitation
requirements, agency properly took corrective action of terminating
awardee's contract.

   DECISION
    
Phenix Research Products protests the Agency for International
Development's decision to terminate its contract under request for
quotations (RFQ) No. CDC115-03-001.  The agency terminated Phenix's
contract in response to a protest by Para Scientific Company, a competitor
under the RFQ, which argued that several of the items awarded to Phenix
did not comply with solicitation specifications.  The agency undertook the
corrective action after determining that more restrictive specifications
may have been communicated to Para than were conveyed to other
competitors.  Phenix contends that its equipment complies with the RFQ's
written specifications and that it is irrelevant that more restrictive
specifications may have been communicated to Para.
    

   We deny the protest.
    
The RFQ, which was issued as a combined synopsis/solicitation, sought
quotations for 27 sets of virology laboratory equipment to be furnished to
medical laboratories in the Central Asian countries of Kazakhstan,
Tajikistan, Kyrgyzstan, Turkmenistan, and Uzbekistan.  The
synopsis/solicitation, which was amended twice prior to the quotation due
date, set forth detailed technical specifications for the various items of
equipment sought, and provided for evaluation of quotations on the basis
of price, technical compliance and quality, past performance, and
warranty, in descending order of importance.
    
Of particular relevance to Phenix's protest are the specifications in the
RFQ pertaining to incubators and water purification systems, one of each
of which was to be furnished to each laboratory.  The
synopsis/solicitation, as amended, set forth the following requirements
regarding the incubators:
    
Low-Temp Incubator (22-45C) with shaker capability for 96-well EIA plates;
This could be: (1) a standard 96-well microplate incubator, specially
designed for incubation of 2-4 microplates, with shaking regimen, or (2) a
standard lab incubator capable to maintain interior temperature between 22
and 45C with a built-in interior outlet to place a microplate shaker
inside.
Modification 01 to Synopsis/Solicitation, Nov. 29, 2002, at 2. 
    
After receiving quotations from several vendors, the agency sought
clarifying information regarding the equipment proposed by each.  As part
of this process, each vendor was notified of, and requested to confirm
compliance with, the following additional requirements pertaining to the
water purification systems:
    
Water purification system.  Please clarify i[f] the proposed item meet the
below standards:  In order to ensure proper water quality that would fit
the needs of ELISA testing in Central Asia the water purification system
has to meet the following requirements:  it has to include a two-step
water purification system with the 1st step based on Water Distillation
(WD) or Reverse Osmosis (RO) and the second step based on filter
deionization (a filter cartridge-based system) with the water output of
Type 1 B-pure or Type 1 E-pure quality.  Eight spare cartridges should be
included in the package.
The average water quality situation in Central Asia could be described as
follows:  Water hardness: 1,5 mg/L (however in some areas of Central Asia
the water hardness could be as high as 20 mg/L).  Total Dissolved Solids:
181 mg/L (could be as high as 1500 mg/L); chlorides 30,5 mg/L, sulfates -
36,0 mg/L.
Agency E-mail, Jan. 21, 2003.  In preparing its response to the agency's
questions regarding its quotation, Para sought clarification regarding
requirements pertaining to the shakers.  In response to Para's inquiry,
the agency notified Para (via e-mail) that it required an orbital shaker
with a variable speed of 500-1,500 rpm.  This information was not conveyed
to other vendors.
    
In its quotation, Phenix furnished pricing for an incubator with a
temperature range of 5C above ambient temperature to 65C; an orbital
shaker with a speed of 80-200 rpm; and alternative water purification
systems, one including a first step based on reverse osmosis and the other
not including a reverse osmosis or water distillation step.  The price
quoted for the latter water purification system was less than half the
price quoted for the former.
    
After evaluating the quotations, the evaluators concluded that Phenix's
quotation was stronger than the others technically and that it was
reasonably priced; consequently, AID awarded Phenix a contract.  The
contract was based on provision of the lower-priced water purification
system.
    
On April 7, the agency notified Para of the award to Phenix, whereupon
Para filed a protest with our Office.  Para complained that the incubators
offered by Phenix did not comply with the solicitation requirement
regarding temperature range; that the shakers offered by Phenix did not
operate at the required range of speeds; and that the water purification
systems offered by Phenix did not include a first step based on water
distillation or reverse osmosis, as required.
    
Prior to the due date for submission of its report responding to Para's
protest, the agency notified us that it had concluded that "more
restrictive specifications may have been accidentally communicated to the
protester than were given to other competitors," and that, accordingly, it
was taking the corrective action of terminating Phenix's contract and
resoliciting.  Letter from Agency to GAO, May 5, 2003.  Upon receipt of
the agency's letter, we dismissed Para's protest as academic.
    
On May 12, Phenix protested the termination of its contract to our Office,
arguing that its equipment complied with the specifications set forth in
the written solicitation, and that to the extent that Para was notified
of, and chose to offer equipment complying with, more restrictive
specifications not included in the written solicitation, Para exceeded the
RFQ's requirements at its own competitive risk.
    
Generally, we decline to review the termination of contracts for the
convenience of the government because such actions are matters of contract
administration.  We will review the propriety of the termination where the
termination flows from a defect the contracting agency perceived in the
award process.  In such cases, we examine the award procedures that
underlie the termination action for the limited purpose of determining
whether the initial award may have been improper and, if so, whether the
corrective action taken was appropriate to protect the integrity of the
competitive procurement system.  We will not object to an agency's
proposed corrective action where the agency concludes that the award,
because of perceived flaws in the procurement process, was not necessarily
made on the basis most advantageous to the government, so long as the
corrective action taken is appropriate to remedy the impropriety. 
Fisher-Cal Indus., Inc., B-285150.2, July 6, 2000, 2000 CPD P: 115 at 3.
    
In responding to Phenix's protest, the agency explains that termination of
the award to Phenix was justified not simply on its originally articulated
basis, i.e., that it had communicated more stringent specifications to
Para than to other vendors, but also on the basis that the evaluators had
erred in finding that the equipment proposed by Phenix--in particular, the
incubators and water purification systems--met the required
specifications.
    
With regard to the incubators, the agency notes that while the RFQ
required an incubator capable of maintaining an interior temperature of
22-45C, Phenix proposed a unit with a temperature range of 5C above
ambient temperature to 65C, which means that Phenix's incubators will be
capable of attaining the required low of 22C only if the ambient
temperature is 17C or lower.  An ambient temperature in this range cannot
be assumed, according to AID.  In this regard, the contracting officer
observes that the protester itself has maintained that "[f]rom [its]
experience and discussions with the manufacturer, the ambient temperature
of laboratories generally varies from about 15-21C,"  Letter from Phenix
to Contracting Officer,
Apr. 25, 2003, at 2, meaning that "for most of the typical temperature
range of a laboratory (probably in the U.S., air conditioned, and with a
reliable supply of electricity), the Phenix incubator could not meet the
low end of the temperature specification."  Contracting Officer's
Statement at 6.  Moreover, the contracting officer further notes, "[i]n
the Central Asia environment, the ambient temperatures might be much
higher and more variable."  Id.
    
In response, the protester argues that where the ambient temperature is
22C (or lower), an incubation temperature of 22C can be achieved by
turning the incubator off or by placing it in a "cold room."  Phenix
further argues that "it is important to recognize . . . that the incubator
is to be used solely in HIV ELISA testing laboratories," and that "[t]he
working temperature of nearly all HIV ELISA assays is 37C, well above the
low temperature requirement of 22C."  Protester's Comments, June 20, 2003,
at 4.
    
We find the protester's argument that a temperature of 22C can be attained
by turning the incubator off or by placing it in a "cold room"
unpersuasive.  The ability to achieve a temperature by not using the
incubator is not the same as an incubator capable of achieving the
temperature--and even assuming that incubation at room temperature could
be achieved by simply turning the incubator off, it is not apparent how
temperatures between ambient (the temperature when the incubator is turned
off) and ambient +5C (the low end of the incubator's temperature range
when on) could be achieved.[1]  Further, there is no indication in the
record that the laboratories in question contain "cold rooms."
    
Concerning the protester's argument that the working temperature of nearly
all HIV ELISA assays is 37C, well above the low required temperature of
22C, this is essentially an argument that the agency does not require an
incubator capable of maintaining a low temperature of 22C.  Such an
argument is an objection to the terms of the RFQ, which to be timely,
would have needed to be raised prior to the closing date for receipt of
quotations, Bid Protest Regulations, 4 C.F.R. S: 21.2(a)(1) (2003);
consequently, it will not now be considered.
    
With regard to the water purification systems, the record shows that award
was made to Phenix for a purification system not including a first step
based on water distillation or reverse osmosis despite the fact that all
vendors were notified, via
e-mail requests for clarification, that such a step was required.  To the
extent that Phenix believes that compliance with the requirement was not
necessary because it was not formally made a part of the solicitation
through amendment, where a contracting officer advises all vendors of a
solicitation requirement in writing, the essential elements of an
amendment are present whether or not the communication is designated as a
formal amendment.  Realty Ventures/Idaho, B-226167, May 18, 1987, 87-1 CPD
P: 523 at 4; see also Federal Elec. Int'l, Inc., B-232295.2, Dec. 21,
1988, 88-2 CPD P: 610 at 10 (furnishing of copy of written question and
response places offeror on notice of government requirements even though
they are not reflected in formal amendment). 
    
In sum, we conclude that the record supports the agency's determination
that the equipment Phenix offered did not meet the required
specifications.[2]  Since award could not properly be made to Phenix based
on its nonconforming offer, First Fed. Corp., B-245891, Feb. 10, 1992,
92-1 CPD P: 166 at 4, the agency's decision to terminate Phenix's contract
was proper.
    
To the extent that Phenix also challenges the agency's decision to
resolicit, Phenix is not an interested party to raise this issue since
Phenix would not be line for award even if its protest were sustained on
this ground.  Adrian Supply Co., B-251886.2, June 7, 1993, 93-1 CPD P: 435
at 5-6.  In any event, the record shows that the agency's decision to
resolicit was based both on the fact that it had communicated its required
orbital shaker speed only to one offeror, Para, and that there may be
other areas in the specifications that need to be revised.  Under these
circumstances, there is no basis to object to the agency's decision to
reexamine the solicitation and resolicit based on specifications that
provide for competition on an equal basis and accurately reflect the
agency's needs   Surgi-Textile, B-289370, Feb. 7, 2002, 2002 CPD P: 38 at
2.  Regarding Phenix's argument that it will be unfairly prejudiced in a
resolicitation because its prices and products have been exposed, the
prior disclosure of information in a vendor's quotation does not preclude
resolicitation where, as here, the resolicitation is undertaken to correct
perceived flaws in the original solicitation process.  See SMS Data Prods.
Group, Inc., B-280970.4, Jan. 29, 1999, 99-1 CPD P: 26 at 3-4. 
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] For example, if the ambient temperature is 20C, it is not clear how a
temperature of 22C, 23C, or 24C could be achieved.
[2] To the extent that Phenix argues that it offered, as an alternative, a
water purification system that did meet the requirement for reverse
osmosis as a first step, the fact remains that, at a minimum, the
incubator Phenix offered did not meet the specifications.