SmithKline Beecham Pharmaceuticals, B-277253; B-277253.4,

SmithKline Beecham Pharmaceuticals, B-277253; B-277253.4, BNUMBER: B-277253; B-277253.4 DATE: September 17, 1997 TITLE: SmithKline Beecham Pharmaceuticals, B-277253; B-277253.4, September 17, 1997 ********************************************************************** Matter of:SmithKline Beecham Pharmaceuticals File: B-277253; B-277253.4 Date:September 17, 1997 James P. Gallatin, Jr., Esq., Scott D. Chaplin, Esq., and James P. Hodges, Esq., Reed Smith Shaw & McClay, for the protester. Joel R. Feidelman, Esq., Deneen J. Melander, Esq., and Nancy R. Wagner, Esq., Fried, Frank, Harris, Shriver & Jacobson, for Merck & Company, Inc., an intervenor. J. Albert Calluso, Esq., Defense Logistics Agency, for the agency. Andrew T. Pogany, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that contracting agency should have employed an indefinite delivery/indefinite quantity contract with multiple award provision is denied where agency properly determined that a requirements contract with a single award provision reflected its needs and enhanced competition between the only two producers of the item being procured. DECISION SmithKline Beecham Pharmaceuticals protests the terms of request for proposals (RFP) No. SP0200-97-R-1700, issued by the Defense Logistics Agency (DLA) for adult hepatitis A vaccine. We deny the protest. The RFP, issued on May 12, 1997, contemplated the award of a single requirements contract, for an initial 1-year base period with 4 option years, to the offeror submitting the lowest priced, technically acceptable proposal. The RFP specified by brand name the only two hepatitis A vaccines licensed in the United States--Havrix (manufactured by SmithKline) and Vaqta (manufactured by Merck & Company, Inc.). The RFP instructed offerors to propose pricing for these two specified commercially available single-dose adult hepatitis A vaccines packaged in the following three ways: a single dose syringe, a package of five single dose syringes, and a single dose vial. Currently, the Department of Defense procures the hepatitis A vaccines through Distribution and Pricing Agreements (DAPA), which are similar to basic ordering agreements, with SmithKline and Merck. The RFP provides that, upon award of the contract, the successful offeror's DAPA will be modified to reflect the contract prices received under this solicitation and that the losing offeror's adult hepatitis A vaccine DAPA will be canceled for the duration of the contract. Proposals from these two firms were received by June 20, 1997, the amended closing date for receipt of initial proposals. SmithKline principally protests as improper the agency's decision to award a single contract rather than multiple contracts to both firms. According to SmithKline, the agency has not complied with the requirements of the Competition in Contracting Act (CICA), 10 U.S.C. sec. 2304(a)(1)(A) (1994), to "obtain full and open competition through the use of competitive procedures in accordance with the requirements of [CICA] and the Federal Acquisition Regulation [FAR]." SmithKline further contends that multiple awards are mandated here by FAR sec. 16.504(c), which requires that the contracting officer, "to the maximum extent practicable, give preference to making multiple awards of [indefinite delivery/indefinite quantity (IDIQ)] contracts under a single solicitation." As noted above, however, the solicitation here did not contemplate award of an IDIQ contract, but instead contemplated award of a requirements contract. As such, FAR sec. 16.503, which is applicable to requirements contracts, is controlling here; that section provides no preference for multiple awards. Further, although SmithKline asserts that the agency should have employed an IDIQ contract in the solicitation, rather than a requirements contract, the agency reports that it elected not to do so because it could not determine a "viable stated minimum [or] maximum" quantity that would be "flexible enough to accommodate the changing role of the military" since inoculation of "all active duty and selected reserve force military personnel" are required and the agency "could not predetermine the precise quantities of vaccine it would require in order to accomplish its task." We note in this regard that FAR sec. 16.504(a) requires the contracting agency to be able to specify minimum and maximum stated quantities as a condition for using IDIQ contracts. In any case, FAR sec. 16.504(c) does not mandate making multiple awards, but instead requires the contracting officer to "exercise sound business judgment" in determining whether multiple awards are appropriate. Indeed, FAR sec.