Agency: Department of Veterans Affairs
Disposition: Protest Denied
Decided: March 11, 2020
Keywords: Sole-Source Award
General Counsel P.C. Highlight: An agency may solicit from one source if the contracting officer reasonably determines that only one source is reasonably available.
Summary of Facts
MCI Diagnostic Center, LLC (MCI) protests the issuance of a sole-source purchase order to Quest Diagnostics, Inc. (Quest) by the Department of Veterans Affairs (VA) for t-spot interferon gamma release assay (IGRA) tuberculosis testing services. On August 20, 2019, the VA posted a sources-sought notice on the System for Award Management (SAM) website to identify sources for a potential procurement of testing services for the Southeast VA Health Care System in New Orleans.
On August 21, 2019, MCI responded to the notice, providing a capability statement, a Clinical Laboratory Improvement Amendments of 1988 (CLIA) certification, and a College of American Pathologists (CAP) accreditation. The capability statement stated that MCI was capable of performing reference laboratory testing services and had the laboratories and vendor resources to provide these services.
On September 5, 2019, the VA issued RFQ No. 36C25619Q1470 as a service-disabled veteran-owned small business (SDVOSB) set-aside seeking a particular t-spot tuberculosis test that was proprietary to Oxford Immunotec, USA (Oxford). Oxford was performing the testing services pursuant to an order issued under its Federal Supply Schedule (FSS) contract, which was set to expire at the end of September. On September 26, 2019, the VA cancelled the solicitation and issued another 3-month order for tuberculosis testing services under Oxford’s FSS contract. Quest purchased Oxford’s North American laboratory, and the VA modified the order to reflect that Quest would perform the services.
On November 26, 2019, the VA posted another sources-sought notice, again seeking information to enable it to conduct market research to identify potential sources for tuberculosis testing. The notice included a justification for a single-source award, which stated that the agency intended to make a sole-source award to Quest for tuberculosis testing. On December 6, 2019, MCI filed a protest challenging the agency’s decision to award a sole-source contract to Quest. On January 6, 2020, the VA filed a notice of corrective action and explained that it had issued a 3-month sole-source “bridge contract” to Quest to provide testing services from January 1, 2020 through March 31, 2020 during the pendency of the current protest and implementation of corrective action.
Basis of Protest
MCI argued that the 3-month bridge contract awarded to Quest was improper because the VA failed to demonstrate that there was only one source reasonably available. It argued that it was available to meet the requirements for the testing and therefore, the agency could not justify a sole-source contract to Quest.
The VA argued that its award was reasonable because it can make a sole-source award where the requirement “is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits proposals.” The VA argued the award was proper under FAR part 13, because Quest was the only contractor that could provide the required services on an ongoing basis without unacceptable delay and disruption and a significant adverse impact to the agency.
GAO explained that the simplified acquisition procedures established under FAR part 13 are designed “to promote efficiency and economy in contracting, and to avoid unnecessary burdens for agencies and contractors where, as here, the value of the acquisition is less than $150,000.” An agency “may solicit from one source if the contracting officer determines that the circumstances of the contract action deem only one source reasonably available (e.g., urgency, exclusive licensing agreements, brand-name or industrial mobilization).” Protests of sole-source determinations are reviewed under a “reasonableness” standard.
The VA stated that the New Orleans VA Medical Center had an “urgent and compelling need” for the tuberculosis testing services to avoid a break in services and the award to Quest was meant to be a 3-month bridge contract “to maintain the status quo and place a short-term bridge contract into effect to maintain critical supplies and services.”
GAO determined that the VA demonstrated a reasonable basis for awarding the 3-month contract to Quest consistent with FAR § 13.106-1(b)(1). The VA determined that Quest, as the incumbent, was the only source reasonably available to meet the urgent tuberculosis testing requirement and that MCI was not capable or authorized by the test manufacturer to immediately begin performing the tests.
The CLIA certification and CAP accreditation only demonstrated that MCI can meet and exceed industry standards for clinical laboratory testing, but there was no agreement between MCI and Oxford authorizing MCI to perform the testing. Thus, GAO determined that MCI had not shown that it was readily available to perform the required tuberculosis testing and had not shown that the agency’s determination that there is only one reasonably available source was unreasonable.
GAO denied the protest on this basis.