XLCare Pharmaceuticals, Inc. (SPE2D2-24-R-0013)

B-424026,B-424026.2 Feb 17, 2026 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights XLCare Pharmaceuticals, Inc., of Lawrenceville, Georgia, protests the award of a contract to AvKARE, LLC, of Pulaski, Tennessee, following a reverse auction conducted under request for proposals (RFP) No. SPE2D2-24-R-0009, issued by the Defense Logistics Agency (DLA), for potassium chloride tablets. XLCare contends that the reverse auction system malfunctioned and failed to accept the firm's revised bid before the auction ended. XLCare also argues that DLA unreasonably deviated from the solicitation and the stated reverse auction procedures. We deny the protest in part and dismiss it in part. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. The entire decision has been approved for public release. Decision Matter of: XLCare Pharmaceuticals, Inc. File: B-424026; B-424026.2 Date: February 17, 2026 Daniel H. Petkoff, Esq., James W. Kim, Esq., Cate Baskin, Esq., and Eyasu Yirdaw, Esq., Polsinelli PC, for the protester. Julie M. Nichols, Esq., Rimon PC, for AvKARE, LLC, the intervenor. Mariam W. Ibrahim, Esq., and Alexander J. Minor, Esq., Defense Logistics Agency, for the agency. Thomas J. Warren, Esq., and Alexander O. Levine, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging agency's conduct of a reverse auction is denied where the record shows that the agency conducted the competition in accordance with the terms established for the reverse auction. 2. Protest challenging reverse auction's minimum bid decrement requirement is dismissed as an untimely challenge to the terms established for the reverse auction. DECISION XLCare Pharmaceuticals, Inc., of Lawrenceville, Georgia, protests the award of a contract to AvKARE, LLC, of Pulaski, Tennessee, following a reverse auction conducted under request for proposals (RFP) No. SPE2D2-24-R-0009, issued by the Defense Logistics Agency (DLA), for potassium chloride tablets. XLCare contends that the reverse auction system malfunctioned and failed to accept the firm's revised bid before the auction ended. XLCare also argues that DLA unreasonably deviated from the solicitation and the stated reverse auction procedures. We deny the protest in part and dismiss it in part. BACKGROUND On September 10, 2024, DLA issued the RFP, seeking to award a fixed-price requirements contract for bottles of potassium chloride tablets to support the Department of Defense's pharmaceutical prime vendor program. Agency Report (AR), Tab 1, RFP at 31-33, 89.[1] The RFP contemplated a base period of one year and four 1‑year options. Id. at 33. The agency intended to award the contract to the responsible offeror who offered a technically acceptable proposal with the “lowest evaluated aggregate price.” Id. at 53. As relevant to this protest, the RFP also indicated that the agency may use the “reverse auction process . . . to determine the lowest price evaluated” offeror. Id. at 56. In this regard, on October 15, DLA issued a solicitation amendment notifying offerors of the agency's intent to use a commercial provider's reverse auction procedures to conduct price discussions.[2] AR, Tab 2, RFP amend. 0004 at 2. Amendment 0004 explained that “[t]o be eligible for award and participate [in the reverse auction], the offeror must agree with terms and conditions of the entire solicitation and the commercial reverse auction service.” Id. The amendment also notified offerors of training that was necessary to participate in the reverse auction, explaining that “[o]nly trained offerors may engage in a reverse auction.” Id. Prior to the solicitation closing date of November 7, the agency received 6 timely proposals, including proposals from XLCare and AvKARE. Contracting Officer's Statement and Memorandum of Law (COS/MOL) at 2. After setting a competitive range and conducting successive rounds of non-price discussions, the agency evaluated both XLCare and AvKARE as technically acceptable. AR, Tab 37, Price Negotiation Memorandum at 13. During price discussions on July 1, 2025, DLA notified offerors that the agency intended to engage in a reverse auction conducted by DLA's commercial reverse auction service provider, Procurex, Inc. COS/MOL at 3. That same day, the agency invited XLCare to participate in a “mock” reverse auction as “training” on the Procurex software that offerors would use in the actual reverse auction. Id.; AR, Tab 4, DLA Mock Auction Invitation at 1. The mock reverse auction allowed offerors the opportunity to navigate the Procurex reverse auction system, practice submitting and revising bids, and raise potential issues or questions to the agency before the actual reverse auction.