| Matter of: | Federal Prison Industries, Inc. |
| File: | B-290546 |
| Date: | July 15, 2002 |
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Marianne S. Cantwell, Esq., and William Robinson, Esq., Department of Justice, for the protester.
Julius Rothlein, Esq., and Edward N. Ramras, Esq., Headquarters U.S. Marine Corps, for the agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.
DIGEST
General Accounting Office will not review protest of agency's determination that
Federal Prison Industry's (UNICOR) product was not comparable to private sector
products, since UNICOR's enabling statute provides for binding resolution of
such disputes by an arbitration board.
DECISION
Federal Prison Industries, Inc. (UNICOR) protests the U.S. Marine Corps's award
of contracts to four Federal Supply Schedule (FSS) vendors for furniture to be
installed at the Amphibious Warfare School (AWS), Quantico Marine Corps Base,
Virginia.
We dismiss the protest.
At the time the Marine Corps identified its requirement for furniture, it was
mandatory for the agency to use UNICOR products to meet the requirement.
18 U.S.C. § 4124 (2000); Federal Acquisition Regulation (FAR)
§ 8.602(a). Subsequently, the National Defense Authorization Act for
Fiscal Year 2002 (Pub. L. No. 107-107, § 811) enacted 10 U.S.C. §
2410n to require the Secretary of Defense (effective October 1, 2001) to conduct
market research prior to purchasing UNICOR products, in order to determine
whether the UNICOR product is “comparable in price, quality, and time of
delivery to products available from the private sector.” 10 U.S.C.
§ 2410n(a). If the product is determined not to be comparable, the
Secretary must use “competitive procedures” and consider a timely offer from
UNICOR. 10 U.S.C. § 2410n(b). Interim implementing
regulations (Defense Federal Acquisition Regulation Supplement (DFARS)
§§ 208.602, 208.606, 210.001) became effective on April 26, 2002.
67 Fed. Reg. 20687 (2002).
The Corps began working with UNICOR in October 2000 to develop the parameters of
its furniture requirement while the AWS space to be furnished was being
renovated by another contractor. By March 2002 UNICOR had submitted design
information and a final bill of materials. Since 10 U.S.C. § 2410n
became effective during this period, in March the agency began proceeding in
accordance with the provision. The Corps conducted market research to
determine whether private sector vendors on the General Services
Administration's FSS could meet the requirement; this research demonstrated that
an FSS vendor could meet the requirement at a price lower than the price
reflected in UNICOR's final bill of materials. Affidavits of Lt. Col.
William E. Wetzelberger, June 4 and 14, 2002; Contracting Officer's Statement
(COS) ¶ 7. In addition, the contracting officer understood that
UNICOR needed a long lead time for delivery (90 days) and installation (an
additional 3 weeks) and apparently could not meet the delivery schedule of
complete installation by July 12 based on the Corps's inability to place the
order before the end of April.[1] COS ¶¶ 4-5,7-8.
Based on the apparent lead time needed by UNICOR and its higher price, the
contracting officer then determined that UNICOR's products were not comparable
to those offered by the FSS vendors. COS ¶ 8.
Following the non-comparability determination, in order to comply with the
“competitive procedures” requirement, the contracting officer decided to
conduct an FSS-type competition, without a formal solicitation, and in mid- to
late March obtained e-mail verification of prices and delivery from the FSS
vendors and UNICOR. COS ¶¶ 8-9. UNICOR's response included
its price (which was higher than one of the FSS vendors' prices) and stated that
it could meet a delivery/installation completion date of July 8, but also stated
that “UNICOR will need to receive a purchase order by 1, April, 2002.”
Agency Report (AR) Tab 7. Since funding was not obligated for the project
until on or about April 26 (Affidavit of Lt. Col. Wetzelberger, June 4, 2002),
by May 1, well after UNICOR's April 1 purchase order deadline, the contracting
officer determined that UNICOR's delivery terms would not meet the agency's
needs. AR Tab 14. Based on this conclusion, as well as UNICOR's
higher price, the agency issued purchase orders to FSS vendors on May 3. Id.
This protest followed.
COMPARABILITY DETERMINATION
UNICOR challenges the Corps's determination that its products are not comparable
to those of the private sector due to higher price and inability to meet the
delivery schedule. The Corps asks that the protest be dismissed because,
among other reasons, UNICOR's enabling statute provides for an arbitration board
to resolve disputes between agencies and UNICOR. 18 U.S.C. § 4124(d).
Under the Competition in Contracting Act of 1984, 31 U.S.C. §§ 3551-56 (2000),
our Office's jurisdiction includes consideration of objections to solicitations,
awards of contracts for the procurement of property or services, and protests
“concerning an alleged violation of a procurement statute or regulation.”
31 U.S.C. §§ 3551(1), 3552. However, where Congress has vested
oversight and decision-making authority in a particular federal official or
entity, we will not consider protests involving issues that are properly for
review by that official or entity. Mississippi State Dep't of Rehab.
Servs., B-250783.8, Sept. 7, 1994, 94-2 CPD ¶ 99 at 3 (disputes by
state licensing agencies under the Randolph‑Sheppard Act, 20 U.S.C.
§107 et seq.); High Point Sec., Inc.--Recon. and Protest,
B-255747.2, B‑255747.3, Feb. 22, 1994, 94-1 CPD ¶ 169 at 2
(determinations by the Small Business Administration under the certificate of
competency program pursuant to 15 U.S.C. § 637(b)(7)); ARA Envtl.
Servs., Inc., B‑254321, Aug. 23, 1993, 93-2 CPD ¶ 113 at 2
(protest of award under the Javits‑Wagner-O'Day Act, 41 U.S. C. §§ 46-48c).
UNICOR's enabling statute provides that federal agencies “shall purchase at
not to exceed current market prices, such products of [UNICOR] . . . as meet
their requirements . . . .” 18 U.S.C. § 4124(a). Where agencies
and UNICOR are unable to agree as to whether these price and acceptability
conditions have been met, they must have their disputes resolved by an
arbitration board specifically established for this purpose. The statute
provides in this regard as follows:
Disputes as to the price, quality, character, or suitability of [UNICOR]
products shall be arbitrated by a board consisting of the Attorney General, the
Administrator of General Services, and the President, or their representatives.
Their decision shall be final and binding upon all parties. 18 U.S.C.
§ 4124(b). This provision vests the board with binding authority to
resolve disputes between agencies and UNICOR. Since 10 U.S.C.
§ 2410n made no express changes to the board's authority with regard to
DOD purchases, we believe its authority to resolve disputes between DOD agencies
and UNICOR remains intact. Further, while the board was created to
arbitrate disputes related to mandatory UNICOR purchases, we find no basis for
concluding that its authority now does not apply to DOD purchases, such as the
one here, simply because they are subject to a new process. This is
particularly the case since the comparability determination provided for under
§ 2410n, which encompasses “price, quality and time of delivery,”
involves essentially the same considerations covered by the board's authority
under § 4124(b), “price, quality, character, or suitability.”[2]
We conclude that UNICOR's disagreement with the Corps's determination that
UNICOR's products are not comparable as to price or delivery to private sector
products is subject to the board's binding authority. Accordingly, our
Office will not review the matter. Mississippi State Dep't of Rehab.
Servs., supra.
STATUTORY COMPLIANCE
UNICOR also argues that the Corps failed to comply with various requirements
under § 2410n(b) and the implementing regulations, in particular, whether
the agency's FSS-type competition in lieu of a formal solicitation comported
with the requirement that “competitive procedures” be used. (The Corps
points out, correctly, that the term “competitive procedures” is defined in
10 U.S.C. § 2302(2) as including FSS purchasing procedures.) Noting
that, even where a statute provides for exclusive jurisdiction in another forum
(citing the Randolph-Sheppard Act), our Office will review an agency's
interpretation of implementing regulations, see Department of
the Air Force--Recon., B‑250465.6 et al., June 4, 1993,
93-1 CPD ¶ 431, UNICOR asserts that we should review its additional
arguments notwithstanding our conclusion regarding the comparability
determination issues.
We agree with UNICOR that issues related to the Corps's compliance with the
statute--as opposed to its comparability determination--appear to fall outside
the board's dispute resolution authority under 18 U.S.C. § 4124(b).
However, because the initial step in the process is determining comparability,
those issues become relevant only after the agency has made a proper
comparability determination. In this regard, if the board made a binding
determination that, contrary to the Corps's finding, UNICOR's products were
comparable, the agency would be required to purchase UNICOR's products, and the
statutory compliance issues would be academic. Thus, until the issue of
comparability is resolved by the arbitration board, it would be premature for us
to consider the merits of these additional issues.[3]
The protest is dismissed.
Anthony H. Gamboa
General Counsel