Matter of Phoenix Environmental Design, Inc.
Agency: Department of the Interior, Bureau of Land Management (BLM)
Disposition: Sustained
Keywords: unduly restrictive competition
Decided: October 14, 2016
General Counsel P.C. Highlight: Government Agencies cannot exclude products from a list of agency-approved products without a reasonable basis.
Summary of Facts
Phoenix Environmental Design, Inc. (“Phoenix”), a service disabled, veteran owned small business, filed a protest objecting to the terms of an RFQ (or Solicitation) issued by the Department of the Interior, Bureau of Land Management (“BLM”), for a procurement representing best value to the Government. The Solicitation called for the provision of specific herbicides, which were identified by brand name. The estimated value of the purchase order in question was approximately $5,524.00. Since the items are commercial items, and the dollar value of the procurement was below $150,000, the Agency conducted the procurement using the commercial item procedures established under Federal Acquisition Regulation (FAR) part 12, and the simplified acquisition procedures established under FAR part 13.
The BLM has a list of commercial herbicides that have previously been approved on BLM land. This list includes the herbicides listed in the Solicitation, as well as other commercial herbicides not included in the Solicitation.
The Agency argued that the use of only certain brand names was justified, because those specific herbicides were approved for use pursuant to BLM’s pesticide use proposal (PUP), a document that is written specifically for each particular piece of land. The agency’s PUP is submitted for approval once every three (3) years. The Agency maintained that amending the PUP for the intended land would take up to six (6) months.
The record, however, revealed that the 2012 PUP had expired in November of 2015. The Agency’s new PUP, which was prepared in June of 2016, had not yet been approved. The GAO inquired about the Agency’s use of certain herbicides in the Solicitation that were not on the currently expired 2012 PUP. The Agency responded that the act of purchasing a chemical not on the expired list, prior to the completion of the new PUP, was not against BLM’s policy.
The Agency also asserted the use of brand name products were within their discretion and control and that the Agency “would not use generics.”
Basis for the Protest
Phoenix protested on the basis that the Government’s restricted list of commercially approved herbicides in the Solicitation was unduly restrictive of competition, as the BLM’s extended list included multiple herbicides that were equal to the products sought in the Solicitation.
General Standard of Review
Given that the value of the procurement was below $150,000, the simplified acquisition procedures under FAR 13 were applicable. As such, agencies are obligated to “obtain competition to the maximum extent practicable.” Further, solicitations of quotes cannot restrict the solicitation to suppliers of only widely distributed products or limit the solicitation to well-known brands. FAR 13.104. However, where the contract officer determines that there is only one source of a product that is available, an agency is permitted to limit the solicitation.
Protest Sustained
The GAO sustained the protest and found that the Agency’s brand name justification did not comply with the requirements of FAR Part 13. The GAO noted that the Agency’s position, that the extended list of herbicides approved for use on BLM’s land did not apply because they were not listed on the Agency’s PUP was inconsistent with their statement that use of additional herbicides not on the last Agency PUP was not against Agency policy.
GAO found that while the Agency indeed had some discretion and control in determining which herbicides to list on the PUP, “in exercising that discretion, the agency must have a reasonable basis to exclude equal products from the PUP. It cannot simply rely on the PUP to limit competition.” Given that the Agency has provided no justification for excluding certain products for those herbicides listed in the Solicitation, the GAO found the decision unreasonable.