Boehringer Mannheim Corporation, B-279238, May 21, 1998

B-279238 May 21, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Which was executed pursuant to Federal Acquisition Regulation (FAR) Subpart 8.4. Is not legally objectionable notwithstanding the inclusion in the BPA of a conditional discount for other products sold by that vendor under another BPA. The VISN 7 blood glucose monitoring products BPA is part of a VA program to promote the standardization of pharmaceuticals and medical/surgical supply items in the hospital and clinic system operated by the Veterans Health Administration. The VA advised that "[a]ll contractors will be requested to submit proposals for consideration in return for VISN commitment.". The multi-disciplinary committee was to review the proposals and make a selection. The committee charge was to choose and standardize around a specific monitoring system. View Decision Matter of: Boehringer Mannheim Corporation File: B-279238 Date: May 21, 1998 DIGEST Attorneys DECISION Boehringer Mannheim Corporation (BMC) protests the terms of a blanket purchase agreement (BPA) entered into by the Abbott Diagnostics Division and Veterans Integrated Service Network No. 7 (VISN 7), Department of Veterans Affairs (VA), for blood glucose monitoring products. BMC contends the VA improperly bundled the anticipated purchase of these products with a potential 16-percent discount on any purchases made by VISN 7 under a separate Abbott immunoassay products BPA, thereby contravening the government's duty to promote full and open competition. We deny the protest. The VISN 7 blood glucose monitoring products BPA is part of a VA program to promote the standardization of pharmaceuticals and medical/surgical supply items in the hospital and clinic system operated by the Veterans Health Administration. As part of the program, the VA created the National Center for Laboratory Accuracy and Standardization. The Center conducted a study of monitoring systems and found that glucose monitoring products used for diabetes patients represented the single greatest over-the-counter supply cost for the VA in the year studied. The Center recommended that each VISN develop a multi-disciplinary committee consisting of primary care providers, diabetes specialists, nursing educators, and laboratory and pharmacy service personnel to select glucose monitoring devices on a national level that would help with the standardization efforts for the accurate measurement of glucose and would promote the reduction of testing costs. The recommendation encouraged the selection of devices from one manufacturer. VA management asked each VISN to implement the Center's recommendation by negotiating "[i]ncentive agreements (Blanket Purchase Agreements) . . . under the current Federal Supply Contracts." The VA advised that "[a]ll contractors will be requested to submit proposals for consideration in return for VISN commitment." The multi-disciplinary committee was to review the proposals and make a selection. In response to a request from VISN 7, Abbott, BMC, and Johnson & Johnson--three federal supply schedule (FSS) vendors of blood glucose monitoring systems--demonstrated their products to the VISN 7 multi-disciplinary committee. The committee charge was to choose and standardize around a specific monitoring system. The attendees evaluated the products for accuracy, reliability, and precision; usability; data handling and computer interface; and strong positives and negatives. After discussions of the demonstrations, two-thirds of the attendees indicated a preference for Abbott's products based on the factors identified above. A VA acquisition officer was then asked to negotiate a BPA with Abbott on the basis of VISN 7's decision to standardize using Abbott's glucose monitoring products. Both BMC and Abbott already had national BPAs negotiated by the General Services Administration which offered discounts on the glucose monitoring products depending on the percentage market share that the VISN purchases from that manufacturer. In addition to the terms and conditions of its national BPA, during negotiations with the VA, Abbott offered new incentives that were described as "quick-start" and "additional immunoassay BPA" incentives based on a BPA for immunoassay products also negotiated with VISN 7. The final executed BPA describes these as incentives intended to encourage VISN 7's rapid conversion to the Abbott product at a level of 100-percent standardization by the VISN 7 facilities. If VISN 7 were to complete its standardization to the Abbott product by May 15, 1998, all facilities in the VISN would receive a 25-percent rebate on the VISN's expenditures for this product between January 1 and December 31, 1998. Also, in return for 100-percent standardization, Abbott promised to apply a 16-percent discount to the pricing in another VISN 7 BPA, one that covers immunoassay products.