Ruling squelches IDI's protest

In a move that could bolster the legal standing of blanket purchase agreements on General Services Administration schedule contracts the General Accounting Office last month refused to reconsider a ruling that upheld a Justice Department purchase of $6 million worth of personal computers from a schedule vendor.

GAO denied a request for reconsideration filed by Intelligent Decisions Inc. a company that last year protested DOJ's BPA with schedule vendor Win Laboratories Ltd. GAO found that the department acted in accord with federal acquisition regulations when it bought the computers and that its "alleged discussions with Win" cited in IDI's protest were proper.

In its request for reconsideration filed last December IDI argued that DOJ held discussions with Win to obtain a revised proposal from the company while not giving other companies the same opportunity to improve their bids. GAO rejected the argument on the grounds that the contract was awarded by GSA's Federal Supply Service and not DOJ. GAO noted that DOJ's request for quotes to schedule vendors unlike a request for proposals did not seek to award a contract.

"We specifically considered this argument in our prior decision and rejected IDI's contention that this acquisition was other than an FSS buy " GAO ruled. "While IDI disagrees with our conclusion and presents many of the same arguments that it used to support its initial protests it does not demonstrate that our conclusion is factually or legally incorrect."

Officials at IDI last week refused to comment on the GAO decision.

Bill Gormley assistant commissioner for acquisition at FSS said he viewed the latest GAO decision as a shot in the arm for his program. "It does set the stage for schedules as a legitimate ordering mechanism for IT supplies and services " he said.

Carl Peckinpaugh a lawyer in the government contracts section of Winston & Strawn Washington D.C. and a Federal Computer Week columnist said he could recall no instance in which GAO reversed a decision based on a request for reconsideration. He said he believes the issue of schedule BPAs may arise again in future protests in the court system but not at GAO.

"I think a lot of people are unhappy with the way GSA runs the schedules program but I don't think they will bring their protests to GAO " he said. "Not many people want to challenge these procedures. A company that sells a lot through their schedule contracts has no incentive to attack the program. Companies that are not doing well may not want to protest because any relief they might get [as a result of a successful protest] would be so speculative. Either people are benefiting from the program or they don't have the wherewithal to bring forth such an abstract complaint."

Peckinpaugh said GAO's ruling will do little to prevent vendors from questioning the legitimacy of the schedules program. "This case was not well-litigated and the treatment of the issues was superficial " he said. "The bottom line is that there is a cloud over the program - a big question mark as to whether it is being properly applied."

Trisa Thompson a partner at the law firm of Seyfarth Shaw Fairweather & Geraldson Washington D.C. said she believes GAO made the correct decision when it ruled that DOJ acted legally. But she added that the schedules program is "moving farther away from full and open competition."

Thompson agreed that companies may be reluctant to protest schedule BPAs but some will be more inclined to do so if the money involved is substantial. She noted that GSA now allows teaming arrangements among schedule vendors that may result in agencies placing even larger orders.

"There doesn't appear to be any limit to the number of dollars agencies can spend [on schedule purchases] " she said. "And if the dollars are big enough these issues will go to court."

Agencies can reduce the likelihood of a protest by awarding BPAs to multiple vendors Thompson added.Gormley said the schedules program encompasses full and open competition by allowing vendors to upgrade their pricing and product line at any time. "We have a continuous open season so anyone interested in making an offer under the schedules program can do so anytime " he said. "So there is an avenue there. It basically boils down to whether the vendor wants to engage in this type of business."

Another GAO ruling last year denied a protest by Vion Corp. which argued that a schedule order placed by the Defense Information Systems Agency for CPUs from schedule-holder Severn Companies Inc. exceeded the scope of Severn's contract with GSA. Vion argued that the equipment should have been ordered from its indefinite-delivery indefinite-quantity contract it had with DISA for installation and maintenance of mainframe computers.

Noting that Severn's prices were about half those offered by Vion GAO ruled that DISA officials used their business judgment to select the best value offer. The ruling said procurement regulations specifically allow vendors to offer discounts below published schedule prices without offering the same prices to other agencies.