Schedule protest seen as test case

In what may become the first major legal test case for recent procurement reforms a General Accounting Office protest filed last month challenges an information technology purchase from the General Services Administration multiple-award schedule.

The protest filed by Intelligent Decisions Inc. centers on a $6 million Justice Department contract for 3 000 Pentium computers. IDI argued that DOJ "was arbitrary and lacked a rational basis" in choosing Win Laboratories Ltd. from a total of six competing vendors.

It further contends that DOJ failed to evaluate IDI's and Win's bids equally that the agency held discussions with vendors other than IDI prior to award and that DOJ evaluated vendors' quotes using criteria that did not appear in DOJ's request for quotes.

Nowhere in its protest does IDI mention that DOJ used the GSA schedule to buy the equipment rather the company argues DOJ surpassed the $5 million limit established by the simplified acquisition procedures spelled out in the Federal Acquisition Reform Act which became law in February.

But according to sources familiar with the contract DOJ used the GSA schedule to choose vendors that offered Pentium PCs and then solicited quotes from those vendors - the proper and legal process set up under procurement-reform laws. After evaluating the bids DOJ determined that Win offered the best value and lowest price sources said.

Bill Gormley assistant commissioner of acquisition at GSA's Federal Supply Service declined to comment directly on the protest but confirmed that the contract number GS-35F-4312D was a GSA-assigned number to Win. "That's the number GSA assigns once an award is made " he said. "That constitutes that there is a contract."

The distinction between the simplified acquisition procedures and GSA schedules is clear procurement experts said. Simplified procedures are a streamlined process agencies follow for establishing a contract while the GSA schedules are used for placing an order against an existing contract. But confusion exists nevertheless.

DOJ officials lawyers representing IDI and GAO officials declined to comment on the protest. But procurement experts and lawyers said it indicates just how confusing the new era of procurement reform is and that many issues still need to be clarified such as defining what is permissible under the GSA schedule which recently was revamped to be more like the commercial marketplace.

"I think this [protest] is very important from the standpoint of determining how convenient the schedules will be " said Al Burman vice president of the professional services firm Jefferson Strategic Marketing Washington D.C. "It could create more complications for agencies using the schedules." Burman added that DOJ's requirements for the Pentium PCs - 133 or 166 MHz internal CD-ROM drives with dual speakers a sound card a Microsoft mouse a keyboard a network interface card and a manual - were all off-the-shelf components and did not require integration which would have put the contract outside the purview of the GSA schedule.

Bob Dornan senior vice president of Federal Sources Inc. McLean Va. said the protest may help flesh out whether the GSA schedule is a contract that can be protested in a traditional manner. "This is something that never has been challenged " he said.

Dornan added that an important point will be whether DOJ identified in its RFQ that the buy was off the GSA schedule. DOJ officials declined to comment on whether the schedule was mentioned in the RFQ. As such Dornan said the protest "will be important in further convincing program managers that they need to be absolutely clear about how they are buying equipment."

But Carl Peckinpaugh a lawyer in the government contracts section of Winston & Strawn Washington D.C. and a Federal Computer Week columnist said the protest is not a good test case because the buy clearly was made off a GSA schedule and therefore IDI has simply cited the wrong law.

Peckinpaugh added that IDI would have a better chance of winning if it contested the current schedule procedures "which I think are illegal " he said. "GAO has already found that requotes which is what DOJ did in sending out requests for quotes is illegal." In 1994 GAO struck down requotes under a schedule buy because it limited the scope of offerors under a large procurement.

Steven Kelman administrator of the Office of Federal Procurement Policy said he wasn't familiar with the case and wouldn't comment on pending litigation. But in general he said some new rules are needed to ensure that when agencies make large schedule purchases they consider several vendors and "get the best deal possible for government."

GSA currently is working on new procedures for making schedule buys.

Whatever GAO's decision "it won't be the last " said Weldon Latham senior partner at the Washington D.C. law firm Shaw Pittman Potts & Trowbridge. "You don't get a definitive view [about how these contracts work] until you have three four or five of these protests at the administrative level or court level."

- Elana Varon contributed to this article.