TITLE:  Future Solutions, Inc., B-293194, February 11, 2004
BNUMBER:  B-293194
DATE:  February 11, 2004
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Future Solutions, Inc., B-293194, February 11, 2004

   Decision
    
    
Matter of:   Future Solutions, Inc.
    
File:            B-293194
    
Date:              February 11, 2004
    
Vanessa Navarro, for the protester.
Jonathan S. Baker, Esq., Environmental Protection Agency; Thedlus L.
Thompson, Esq., General Services Administration; John W. Klein, Esq., and
Kenneth Dodds, Esq., Small Business Administration, for the agencies.
Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protest that procurement should have been set aside for small
businesses is denied, where the agency reasonably determined that the
items to be procured were available under the Federal Supply Schedule
(FSS); agencies need not consider small business programs when purchasing
from the FSS.
    
2.  Protest that agency unreasonably and unfairly evaluated protester's
response to *sources sought* notice to small business Federal Supply
Schedule vendors to ascertain their capability of meeting the agency's
requirements is denied, where the protester does not rebut the agency's
reasons for determining that the protester lacked the requisite
capability, but argues that it was treated disparately from other vendors
who were solicited to submit quotations for the services; the protester
was on a footing completely different from the vendors whose quotations
were solicited, and its response did not have to be considered in the same
way as the other vendors' quotations because it was solicited for a
different purpose.
    
3.  General Accounting Office will not consider merits of protest that
agency improperly bundled its office supply requirements in violation of
the Small Business Act where the protester has not demonstrated a
reasonable possibility that it was prejudiced by the bundling.
DECISION
    
Future Solutions, Inc. (FSI) protests the award by the Environmental
Protection Agency (EPA) of a blanket purchase agreement (BPA) for office
supplies to Corporate Express, Inc., pursuant to request for quotations
(RFQ) No. DC-03-00233.  FSI, a small business concern, argues that the
requirements should be set aside for small business concerns and that it
was not given an equitable opportunity to compete for this requirement. 
FSI also contends that the consolidation of the agency's office supply
requirements into the BPA constitutes improper bundling.
    
We deny the protest. 
    
The RFQ contemplated award of a BPA for the procurement of office
supplies, with an emphasis on environmentally preferable products (EPP)[1]
and products of organizations for the blind or other severely handicapped
as authorized by the Javits-Wagner-O'Day Act, 41 U.S.C. S: 46-48c (2000). 
These products will be provided to approximately 2,000 purchase
cardholders, within approximately 70 EPA facilities, located in the
contiguous United States.  The vendor selected for award of the BPA was
required to be a current holder of a contract under the General Services
Administration's (GSA) Federal Supply Schedule (FSS) 75 IIA, Office
Supplies Products and Equipment.  The items covered by the RFQ included
all general office supplies offered under Special Item Number 75 200.  The
base term of the BPA was 1 year, with four 1-year options, and a maximum
15 months of award-term incentive options. 
    
In January 2003, the EPA obtained and evaluated the quotations and oral
presentations of four large business FSS 75 IIA contractors.  On May 22,
the agency issued a *sources sought* notice seeking information on the
capability of small business FSS 75 IIA contractors for consideration for
the BPA.  Capability statements were limited to 5 pages, and were to
address the BPA's statement of work and 10 other specific capabilities. 
EPA received capability statements from nine small business FSS
contractors, including FSI.  Based on her review, the contracting officer
determined that none of the small business respondents would be able to
perform the BPA's requirements.  Although the EPA's Office of Small and
Disadvantaged Business Utilization (OSDBU) concurred with this
determination, the OSDBU requested that the contracting officer
participate in a teleconference with two of the small business respondents
(not including FSI), so that the contracting officer could obtain
additional information that might demonstrate that these small business
FSS vendors could meet the requirements.  After the teleconference, the
contracting officer again concluded that no small business FSS contractors
could meet the RFQ requirements.  The contracting officer then reevaluated
the quotations from the four large business FSS contractors and awarded
the BPA to Corporate Express, Inc. on October 23.[2] 
    
FSI argues that the agency's purchase from the FSS should have been set
aside for small business concerns and that EPA's failure to do so violates
Federal Acquisition Regulation (FAR) S: 19.502-2(b), which generally
requires an agency to set aside acquisitions for small businesses where
there is a reasonable expectation of receiving fair market price offers
from at least two responsible small business concerns.
    
However, no statute or regulation required the agency to set aside this
requirement for small businesses in lieu of purchasing from FSS vendors. 
Indeed, FAR S: 8.404(a)(1) as it read when the solicitation for this BPA
was issued, provided in pertinent part:
    
Parts 13 [simplified acquisition procedures] and 19 [small business
programs] do not apply to orders placed against [FSS], except for [a
provision not relevant here].  Orders placed against a Multiple Award
Schedule . . . using the procedures in this subpart are considered to be
issued using full and open competition . . . .
(i) Ordering offices need not seek further competition, synopsize the
requirement, make a separate determination of fair and reasonable pricing,
or consider small business programs.[3]
This provision obviates the need for agencies to apply small business
set-aside procedures, where, as here, they are purchasing from the FSS. 
Information Ventures, Inc., B-291952, May 14, 2003, 2003 CPD P: 101 at 2. 
    
FSI also argues that its response to the agency's *sources sought* notice
was not reasonably evaluated, that the 5-page limit on its response was
unreasonable, and that its response was evaluated in a prejudicially
disparate manner inasmuch as the large business vendors were given the
opportunity to make oral presentations and have discussions.
    
The FSS program provides federal agencies with a simplified process for
obtaining commonly used commercial supplies and services at prices
associated with volume buying.  FAR S: 8.401(a).  Section 259(b)(3) (2000)
of title 41 of the United States Code provides that the procedures
established for the GSA's multiple award schedule program (that is, the
FSS program) satisfy the general requirement in 41 U.S.C. S: 253(a)(1) for
use of competitive procedures if participation in the program has been
open to all responsible sources, and orders and contracts under the FSS
procedures result in the lowest overall cost alternative to meet the needs
of the government.  Use of the FSS in lieu of conducting a full and open
competition is premised on following the FAR Subpart 8.4 procedures to
reach a determination regarding what the agency's needs are and which FSS
vendor meets those needs at the lowest overall cost.  Savantage Financial
Servs., Inc., B-292046, B-292046.2, June 11, 2003, 2003 CPD P: 113 at 6;
Delta Int'l, Inc., B-284364.2, May 11, 2000, 2000 CPD P: 78 at 4.
    
Here, FSI was on a footing completely different from the four large
businesses whose quotations were solicited.  This was so because EPA
determined that the large businesses had the capability of performing the
BPA requirements whereas EPA had doubts whether any small business could
perform these requirements.  Thus, EPA, in accordance with FAR S:
8.404(b)(2), conducted a competition among the four solicited large
businesses to determine which one represented the best value.[4]  Because
the agency solicited at least three qualified vendors, there was no legal
requirement for EPA to issue the *sources sought* notice to the small
business vendors to determine whether any had the capability of satisfying
the BPA requirements.  Without endorsing the course that EPA took, we note
that the agency   was not considering whether any of the small business
responses represented the best value, but only determining whether any of
the small businesses had the capability that would justify their being
solicited for a quotation.  Accordingly, we do not believe that EPA was
obligated to consider FSI's response to the *sources sought* notice in the
same manner that it evaluated the large business vendors' responses to the
RFQ.
    
Nevertheless, having requested that small businesses respond to the
*sources sought* notice, EPA was required to evaluate the small business
responses in a reasonable manner.  Based on our review, we find that the
agency did so, and it had a reasonable basis for determining that FSI did
not show that it had the capability of satisfying the BPA requirements. 
In this regard, after noting that FSI's response was *difficult to
evaluate* because it was not in accordance with the 10 capability areas
listed the *sources sought* notice, EPA found that either FSI failed to
address or did not sufficiently address several of these areas.  For
example, while FSI's response to the *sources sought* notice stated that a
recycling program for the toner cartridges and batteries *will be
established,* the agency noted that FSI's response did not include any
mention of its track record with similar recycling programs or any plans
detailing how its recycling plan would work.  In addition, even though FSI
stated that it has thousands of *green* products available for purchase,
the agency noted that FSI did not mention how many of the products
available on its on-line ordering system met the EPA's EPP criteria.  EPA
also noted that although FSI touted its knowledge and environmental
capabilities, it *did not have correct information on EPA's paper
requirements.*  EPA also found that FSI's *on‑line system is very
far from [EPA's] requirements.*  Finally, FSI's response failed to mention
a commitment by the firm to the development and utilization of *green*
delivery vehicles and fleet maintenance programs, a training module, or
the firm's implementation of Environmental Management Systems plans. 
Agency Report, Tab 6, Review of Small Business Submission in Response to
Sources Sought, at 2.
    
Rather than specifically rebutting the agency's comments, FSI primarily
responds that it was treated disparately from the solicited large business
vendors, who were not subject to the same page limitation and were
accorded the opportunity to make oral presentations and have discussions,
and that the noted deficiencies in FSI's response were due to the
5‑page limitation.  However, as indicated above, the agency did not
have to treat FSI in the same manner as it did the vendors that it had
solicited for quotations because of the more limited purpose of the
*sources sought* notice to ascertain if any small business vendors could
possibly satisfy the BPA requirements and given that EPA was not required
to issue this notice.  Moreover, inasmuch as FSI does not specifically
outline what additional information it would have included in its
response, had it been given additional pages in which to respond, we
cannot conclude that FSI was prejudiced by the page limitation.  Based on
our review, FSI has not shown that the agency's determination that it
lacks the capability to perform the work under the BPA was unreasonable.
    
FSI finally contends that the agency's bundling of its office supplies
requirements into the BPA violates provisions of the Small Business Act,
15 U.S.C. S: 631(j)(3), which requires agencies to avoid unnecessary and
unjustified bundling of contract requirements that preclude small business
participation in procurements as prime contractors. 
    
We will not consider this aspect of FSI's protest because there is no
showing that FSI was prejudiced by the bundling of the requirements. 
Competitive prejudice is an essential element of every viable protest and
where no prejudice is evident from the record, we will not sustain a
protest.  McDonald-Bradley, B-270126, Feb. 8, 1996, 96‑1 CPD P: 54
at 3; Lithos Restoration, Ltd., B 247003.2, Apr. 22, 1992, 92-1 CPD P: 379
at 5.  Where the record does not demonstrate that, but for the agency's
actions, the protester would have had a reasonable chance of receiving the
award, our Office will not sustain a protest, even if a deficiency in the
protest is found.  MCS Mgmt., Inc., B‑285813, B-285882, Oct. 11,
2000, 2000 CPD P: 187 at 9. 
    
In this instance, while the protester argues that the bundling would
adversely affect small business firms, many of whom are currently
performing work included in the bundled procurement, the protester has
failed to demonstrate that the consolidation significantly inhibits or
precludes its ability to compete.  In fact, FSI claimed that it can
perform the entirety of the bundled requirements.  In this regard, FSI
stated that it responded to the *sources sought* notice *with full
confidence that we could perform all aspects of the contract and more* and
that *FSI is very qualified for this BPA,* and the record shows that FSI,
through SBA, attempted to noncompetitively obtain this work under the
8(a) program.  Protest at 8; Protester's Comments at 8.  We conclude,
therefore, that the protester has not made a showing of competitive
prejudice as a result of the bundling of the agency's office supply
requirements.   
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
     
    
    
    
    

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   [1] EPP is defined in Executive Order 13101 as *products or services that
have a lesser or reduced effect on human health and the environment when
compared with competing products or services that serve the same purpose.*
[2] On October 20, the Small Business Administration (SBA) requested that
the EPA  noncompetitively award the requirement to FSI, a certified 8(a)
concern, under SBA's 8(a) program.  In a letter dated November 4, the
contracting officer replied to the SBA that the requirement had already
been awarded and that it was not otherwise suitable for a noncompetitive
8(a) award.
[3] This FAR provision was amended effective October 20, 2003 to
specifically recognize that the requirements of FAR S: 19.202-1(e)(1)(iii)
pertaining to bundling, which implemented the Small Business Act, 15
U.S.C. S: 631(j)(3) (2000), were applicable to FSS orders under FAR
subpart 8.4.  For the reasons stated below, we do not decide whether the
bundling requirements implementing the Small Business Act were applicable
to this acquisition.
[4] We understand the BPA is for orders below the applicable FSS maximum
ordering threshold.