B-311254.2, Canon USA, Inc., June 10, 2008

B-311254.2 Jun 10, 2008 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Canon USA, Inc. protests the cancellation of an order issued to it by the Department of the Army under request for quotations (RFQ) No. W9124A-08-T-0010, for digital copier services. We deny the protest. View Decision B-311254.2, Canon USA, Inc., June 10, 2008 Decision Matter of: Canon USA, Inc. File: B-311254.2 Date: June 10, 2008 Andrew Mohr, Esq., Cohen Mohr LLP, for the protester. Colonel David P. Harney, Department of the Army, and Michael D. Tully, Esq., General Services Administration, for the agencies. Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office of General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that contracting agency improperly cancelled an order under a Federal Supply Schedule (FSS) blanket purchase agreement is denied where the protester's FSS contract expired before the order was issued. DECISION Canon USA, Inc. protests the cancellation of an order issued to it by the Department of the Army under request for quotations (RFQ) No. W9124A-08-T-0010, for digital copier services. We deny the protest. In February 2004, pursuant to Federal Acquisition Regulation (FAR) sect. 8.405-3, the Army established blanket purchase agreements (BPA) with eight contractors holding Group 36 General Services Administration (GSA) Federal Supply Schedule (FSS) contracts for photocopiers. Canon was one of the eight contractors, and was issued a BPA on February 23. The BPA had a 5-year term. In September 2007, Canon and GSA began to negotiate the renewal of Canon's FSS contract, which was set to expire on October 31. These negotiations ultimately failed. On September 27, concerned about the effect that the expiration of the FSS contract would have on its BPA, Canon contacted the Army to determine whether any action was required to maintain its BPA as a viable ordering vehicle. In response, the Army's contract specialist advised Canon by email that –[a]ccording to our contract . . . the Term of the BPA is 5 years from date of award. This would make your BPA W911SE-04-A-0005 valid until 22 FEB 09 and any extension is unnecessary.— Opposition to Motion to Dismiss, Mar. 17, 2008, Tab 1, Email, at 1. Canon therefore took no further action with respect to the BPA or the expiration of the FSS contract, and on December 1, Canon's FSS contract was modified to prohibit the placement of new orders. On December 13, the Army issued the RFQ to the eight BPA holders. Canon submitted a timely offer under the RFQ, as did at least one other BPA holder, Sharp Electronics Corporation. On January 31, 2008, the Army announced that the order would be issued to Canon, the lowest-priced offeror. On February 15, Sharp filed a protest with our Office alleging that issuance of the order to Canon was improper because Canon's FSS contract prohibited the placement of new orders. In response, the Army took corrective action by canceling the order. Our Office dismissed Sharp's protest as academic on February 26. On March 3, Canon filed this protest with our Office, alleging that cancellation of the order was improper because its BPA remained a valid ordering vehicle through the time the order was issued. Shortly thereafter, the agency filed a motion to dismiss the protest, arguing that Canon was not an interested party to protest the decision because Canon was not eligible to receive an order under its BPA due to the expiration of its FSS contract. Because the issue raised involves the FSS program, our Office solicited GSA's views on the issue of the BPA's validity. Consistent with the position taken by the Army, GSA's view is that, when a BPA holder's FSS contract expires, the BPA is no longer viable as there is no longer an active contract against which orders may be placed. Thus, in this case, when Canon's FSS contract expired, its BPA, established pursuant to that FSS contract, also expired as a valid ordering vehicle for new photocopier service leases. In response, Canon asserts that GSA fails to address the central issue in the protest, whether the BPA was established pursuant to, and is wholly dependent on, the FSS contract. On this issue Canon essentially contends that its BPA was not dependent on its FSS contract, but was a separate agreement against which orders could be placed and which was not made coterminous with Canon's FSS contract by its own terms or by the FAR. We agree with Canon that an FSS BPA is a separate agreement from its associated FSS contract.