In its January 2015 decision in Matter of Smith and Nephew, Inc., the Government Accountability Office found that the Department of Veteran’s Affairs issued a solicitation with unnecessarily restrictive specification. The case dealt with a solicitation for sterile wound dressings. The complainant alleged that the required dressing absorption capacity was not necessary to meet the Department’s needs and therefore undermined fair and open competition. Rather than explaining how the requirements were geared to actual needs, the Department maintained that its goal was to “procure the most absorbent and fluid-handling capable dressings available” and therefore selected a “top tier” product. The GAO found that the Department had the onus of establishing that the requirement reasonably met its needs and that it failed to meet that onus:
To the extent a protester challenges a specification as unduly restrictive, that is, challenges both the restrictive nature of the requirement as well as the agency’s need for the restriction, the procuring agency has the responsibility of establishing that the specification is reasonably necessary to meet its needs. The adequacy of the agency’s justification is ascertained through examining whether the agency’s explanation is reasonable, that is, whether the explanation can withstand logical scrutiny. Trident World Sys., Inc., B-400901, Feb. 23, 2009, 2009 CPD ¶ 43 at 3.
We find the RFQ here to be unduly restrictive because the agency has not explained how the challenged specification is reasonably necessary to meet an actual need of the agency. As an initial matter, we observe that the agency has failed to identify an absorbency threshold (or range) that actually is needed by the government, but has instead identified a general “goal” of attaining “top tier” absorbency. While we recognize that the VA is entitled to great discretion in establishing its medical needs, the agency has offered no support for limiting the competition to offerors whose products can meet the specific threshold of 20 g/10cm2/24hr instead of any other number (lower or higher).
Furthermore, the GOA found that in developing its restrictive specifications, the Department ignored the market information it had collected in a prior Request for Information process:
Beyond this issue, we also observe that the VA acknowledges it established the specification based only on information it received in response to the RFIs, and that it relied on this information because it knew of no supporting market research or industry standard for any specific fluid handling value. AR, Tab 6b, E-Mails Related to Second RFI, at 7. However, as shown above, only one response–[deleted] response to the first RFI–represented that a product could meet the 20 g/10cm2/24hr specification, and that representation was contradicted by another test result from the same vendor, for the same product, showing a capacity of 10 g/10cm2/24hr (half the required value).
Moreover, the agency made its decision in the face of considerable product data from other vendors indicating that the 20 g/10cm2/24hr specification was higher than any known product could achieve. See, e.g., AR, Tab 6b, [deleted] Response to the Second RFI, at 11-16.
Additionally, the agency seems to have ignored data provided by two of the vendors showing that the 20 g/10cm2/24hr specification significantly deviated from standards derived from clinical studies and industry usage. See id. at 11; AR, Tab 6e, [deleted] Response to the Second RFI at 30. Given the nature and amount of contradictory information that was presented to the agency, and the agency’s apparent failure to reasonably determine whether the 20 g/10cm2/24hr specification was nonetheless necessary, we find that the agency’s decision to rely on a single, internally inconsistent result from one vendor to establish its minimum requirement does not withstand logical scrutiny.
The GAO directed the Department to engage in an internal review process that properly documented its product requirements and to develop revised RFQ specifications that were appropriately aligned to those needs. As this case illustrates, public institutions should carefully consider the minimum specifications they establish in their solicitation documents to ensure that they do not create unnecessarily restrictive barriers to open competition.
