TITLE: B-310031, FitNet Purchasing Alliance, September 21, 2007
BNUMBER: B-310031
DATE: September 21, 2007
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B-310031, FitNet Purchasing Alliance, September 21, 2007

   Decision

   Matter of: FitNet Purchasing Alliance

   File: B-310031

   Date: September 21, 2007

   Raul Espinosa for the protester.

   Phillipa L. Anderson, Esq., Dennis Foley, Esq., and Philip Kauffman, Esq.,
   Department of Veterans Affairs, for the agency.

   Paul N. Wengert, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest challenging the cancellation of a reverse auction solicitation,
   and the decision to reissue the solicitation limited to Federal Supply
   Schedule vendors is dismissed in part, and denied in part, where the
   record shows that the protester was not in line for award of the canceled
   solicitation, and is therefore not an interested party to challenge the
   cancellation decision, and where the agency acted properly in reissuing
   the solicitation limited to Federal Supply Schedule vendors.

   DECISION

   FitNet Purchasing Alliance, a small business, protests the cancellation
   and reposting of a reverse auction under solicitation No. 213-0220 by the
   Department of Veterans Affairs (VA) for specific models of Zenith brand
   hospital-grade 20-inch television sets and Peerless brand mounts, to be
   delivered to the Bay Pines VA Healthcare System in Florida. FitNet asserts
   that the cancellation lacked a reasonable basis, and that when the VA
   subsequently reposted the same requirement, it improperly limited the
   competition to Federal Supply Schedule (FSS) vendors.

   We dismiss the protest in part and deny it in part.

   On August 2, 2007, a VA purchasing agent used the FedBid website to
   commence an electronic reverse auction for 170 televisions and mounts, at
   a target price of $97,495. This first version of the reverse auction
   posting was designated by FedBid as "Buy No. 44299_01."[1] The posting
   listed a closing time of "10:00 EST" on August 7. The purchasing agent
   explains that he had intended to restrict participation in the reverse
   auction to FSS vendors. Purchasing Agent's Statement at 1. Nevertheless,
   the posting did not reflect that intent; instead the posting stated, in
   relevant part, as follows:

     GSA Schedule Bids Preferred, But Not Required: Sellers may either
     provide a GSA Schedule or an Open Market bid. If bidding with a GSA
     Schedule, the requested items must be on that Schedule. The Schedule
     must either be in the Seller's name or the Seller must be able to
     document its ability to act as an agent of a partner's Schedule. Sellers
     may offer Open Market items only in accordance with the approved Terms
     and Conditions of their respective GSA Schedule AND upon approval from
     the soliciting Contracting Officer.

   Request for Dismissal, exh. 1, at 1.

   FitNet participated by submitting a total price of $113,551.50, which it
   described as an "open market" price.[2] Id. When the reverse auction
   closed, the record reflects that at least one other competitor had
   submitted a lower price than FitNet.

   On August 10, the purchasing agent began to review the prices received,
   starting with the leading "bid" (that is, the lowest-priced quotation),
   and found that neither it, nor the second-lowest-priced quotation, had
   been submitted by a vendor under an FSS contract. The purchasing agent
   states that he then reread the posting, in an effort to confirm that the
   solicitation had been limited to FSS vendors only, but discovered that he
   had apparently "inadvertently checked the wrong box" when preparing the
   posting. Purchasing Agent's Statement at 1.

   On August 12, the purchasing agent canceled the reverse auction by
   reposting the requirement with some changes, which FedBid designated as
   reverse auction "Buy No. 44299_02." Id. In this second version of the
   posting, the narrative stated that participation in the reverse auction
   would be limited to FSS vendors only, and that the solicitation would
   close on August 17 at "14:00 EST." Request for Dismissal, exh. 4, at 1.

   On August 14, FitNet inquired why the requirement had been canceled and
   then reposted. On August 15, FedBid responded that the agency would only
   allow participation by FSS vendors. This protest followed.

   FitNet argues that the VA lacked any valid basis to cancel the first
   version of the solicitation, and has improperly limited competition by now
   restricting the new competition to FSS vendors.

   With respect to FitNet's protest of the cancellation of the first version
   of the solicitation, we conclude that FitNet is not an interested party.
   Under the bid protest provisions of the Competition in Contracting Act of
   1984, 31 U.S.C. sections 3551-56 (2000 & Supp. IV 2004), only an
   "interested party" may protest a federal procurement. A protester is not
   an interested party where it would not be in line for contract award if
   its protest were to be sustained. Four Winds Servs., Inc., B-280714, Aug.
   28, 1998, 98-2 CPD para. 57. Here, FitNet did not submit the lowest price
   in the first reverse auction, and thus, is not an interested party to
   challenge the cancellation.

   With respect to the second reverse auction, the VA argues that it properly
   limited competition to FSS vendors. In its response, FitNet argues only
   that any preference for using the FSS program "is both injudicious and
   unfair." Protester's Response, at 1.[3] We disagree. The procedures
   established for the FSS program satisfy the requirement for full and open
   competition. 41 U.S.C. sect. 259(b)(3) (2000); FAR sect. 6.102(d)(3);
   Tarheel Specialties, Inc., B-298197, B-298197.2, July 17, 2006, 2006 CPD
   para. 140 at 3. Thus, limiting the pool of competition to vendors holding
   FSS contracts is legally permissible, even if an individual protester may
   be unable to compete because it does not hold an FSS contract. See
   Information Ventures, Inc., B-299422, B-299422.2, May 1, 2007, 2007 CPD
   para. 88 at 3 (decision to use FSS program was not evidence of bias
   against a protester that lacked an FSS contract).

   The protest is dismissed in part and denied in part.

   Gary L. Kepplinger
   General Counsel

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

   [1] FedBid, Inc. is a commercial online procurement services provider that
   runs a website at FedBid.com, which among other things, hosts reverse
   auctions. FedBid uses specific terminology to describe its reverse
   auctions. A procurement conducted through FedBid is referred to as a
   "buy," and a participant in the reverse auction is said to submit a "bid."
   See FedBid FAQs (available online at www.fedbid.com/buyers/faq/#anchor5).
   Nevertheless, the parties refer to the reverse auctions at issue here as
   both buys and requests for quotations, and refer to the competitors'
   submissions here as both bids and quotes.

   [2] Both FitNet and the agency refer to an "open market" price submission,
   in apparent reference to the concepts and procedures described at Federal
   Acquisition Regulation (FAR) sect. 8.402(f), which anticipates the
   addition of items not on the FSS (referred to as "open market items") to a
   blanket purchase agreement or individual task or delivery order.

   [3] FitNet makes several arguments in its September 7 response to the
   agency's dismissal request that it did not raise in its August 15 protest.
   FitNet's attempt to raise new issues at this point is untimely under our
   Bid Protest Regulations. 4 C.F.R. sect. 21.2(a)(1) (2007). Accordingly,
   our decision addresses only the arguments that FitNet raised in its
   initial protest.