Comptroller General

United States Government Accountability Office

Washington, DC 20548 

of the United States

Decision 

Matter of: Rapiscan Systems, Inc.

File: B-401773.2; B-401773.3 

Date: March 15, 2010 

Daniel R. Forman, Esq., and Jonathan M. Baker, Esq., Crowell & Moring, for the 

protester. 

James J. McCullough, Esq., and Steven A. Alerding, Esq., Fried Frank Harris Shriver 

& Jacobson, LLP, for Science Applications International Corporation, an intervenor. 

Dennis J. Gallagher, Esq., Department of State, for the agency. 

Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, 

participated in the preparation of the decision. 

DIGEST 

Where solicitation limited competition to vendors holding Federal Supply Schedule 

(FSS) contract for required items, and successful vendor’s FSS contract did not 

include all required items, issuance of purchase order was improper; while non-FSS 

micro-purchase ($3,000) items properly may be purchased under an FSS solicitation, 

that was not the case here, since, while non-FSS items were priced at $0, quotation 

stated that price of non-FSS items was included in FSS item prices. 

DECISION 

Rapiscan Systems, Inc., of Arlington, Virginia, protests the issuance of a purchase 

order to Science Applications International Corporation (SAIC), of San Diego, 

California, under request for quotations (RFQ) No. S-WHARC-09-Q-0030, issued by 

the U.S. Department of State (DOS) for gamma ray vehicle and cargo inspection 

systems. The RFQ was limited to vendors holding a Federal Supply Schedule (FSS) 

contract for the required items, and Rapiscan principally argues that it was improper 

to issue the order to SAIC because that firm’s FSS contract does not include all 

required items. 

We sustain the protest. 
The RFQ, which specified an SAIC product on a brand name or equal basis, was 

open to vendors holding contracts under FSS 84, category 426-4K, Metal and Bomb 

Detection Equipment, and required quotations to indicate the vendor’s FSS contract 

number. The RFQ included eight line items (CLIN). The agency initially issued the 

purchase order to Rapiscan, which submitted the lowest priced, technically 

acceptable quotation. However, SAIC protested issuance of the order on the basis 

that Rapiscan’s FSS contract did not list all eight of the required items at the time the 

order was issued. We sustained the protest, agreeing that the issuance was 

improper, and the agency subsequently canceled the order, consistent with our 

recommendation. Science Applications Int’l Corp., B-401773, Nov. 10, 2009, 

2009 CPD ¶ 229. Subsequently, the agency determined that all of the required items 

were included on SAIC’s FSS contract, and issued a purchase order to SAIC. 

Rapiscan asserts that the agency improperly issued the purchase order to SAIC 

because SAIC’s FSS contract in fact does not include three of the required items-- 

CLIN 7, freight; the installation required for the VACIS Gamma Ray System under 

CLIN 1; and the installation required under CLIN 8 for the replacement energy 

source. 

The FSS program provides federal agencies a simplified process for obtaining 

commonly used commercial supplies and services. Federal Acquisition Regulation 

(FAR) § 8.401(a). FSS procedures satisfy the requirement for full and open 

competition. 41 U.S.C. § 259(b) (3) (2006); FAR § 6.102(d) (3). Non-FSS products 

and services may not be purchased using FSS procedures; instead, their purchase 

requires compliance with applicable procurement laws and regulations, including 

those requiring the use of competitive procedures. Symplicity Corp., B-291902, 

Apr. 29. 2003, 2003 CPD ¶ 89 at 4. Where an agency announces its intention to order 

from an existing FSS contractor, all items quoted and ordered are required to be 

within the scope of the vendor’s FSS contract. Tarheel Specialties, Inc., B-298197, 

B-298197.2, July 17, 2006, 2006 CPD ¶ 140 at 4. The sole exception to this 

requirement is for items that do not exceed the micro-purchase threshold of $3,000, 

since such items properly may be purchased outside the normal competition 

requirements in any case. See SMS Sys. Maint. Servs., Inc., B-284550.2, Aug. 4, 2000, 

2000 CPD ¶ 127 at 2; see also CourtSmart Digital Sys., Inc., B-292995.2, B-292995.3, 

Feb. 13, 2004, 2004 CPD ¶ 79 at 5; Pyxis Corp., B-282469, B-282469.2, July 15, 1999, 

99-2 CPD ¶ 18 at 4. 

With respect to CLIN 7, freight, the agency concedes that SAIC’s FSS contract does 

not include an item for freight, but argues that it nevertheless properly issued the 

purchase order to SAIC because its quoted price for the item does not exceed the 

$3,000 micro-purchase threshold.1

 

 

(continued...) 

1

 The agency argues that the other two items did not preclude issuance of the 

purchase order to SAIC because, as to item 1, SAIC’s system was truck-mounted, so 

Page 2 B-401773.2, B-401773.3 
Page 3 B-401773.2, B-401773.3 

We find that CLIN 7 did not qualify as a micro-purchase item. SAIC’s initial quotation 

for CLIN 7 indicated that freight was an open market--rather than an FSS contract--

item, and showed a unit price of $6,832. SAIC Quotation § 4.1. SAIC then submitted 

a revised quotation on June 13 that again showed a unit price of $6,832 for CLIN 7, 

but further indicated that this price was being discounted by $6,832, resulting in a 

CLIN 7 price of $0. However, the quotation also expressly stated that the price for 

CLIN 7 was “included in unit price of Item #1,” indicating a shifting of the initially 

quoted price for line item 7 to line item 1. Revised Quotation § 4.1. Based on this 

evidence, while SAIC’s quotation showed a price of $0 for freight, this price, in effect, 

was illusory; its quoted total price actually included an amount for freight that 

exceeded the $3,000 micro-purchase threshold. Under these circumstances, we find 

that CLIN 7 freight cannot be considered a micro-purchase item under SAIC’s 

quotation. It follows that, since freight was a required item and was not included on 

SAIC’s FSS contract, the purchase order could not properly be issued to SAIC. The 

micro-purchase exception is a narrow one and was not intended as a means for 

vendors to provide non-FSS items as micro-purchase items to avoid the general rule 

that all items under an FSS solicitation must be included on the successful vendor’s 

FSS contract. See SMS Sys. Maint. Servs., Inc., supra. 

Based on the foregoing, we sustain the protest. We recommend that the agency 

cancel SAIC’s purchase order and issue a new order to the vendor next in line under 

the terms of the RFQ, and in accordance with this decision. If the agency determines 

that there are no acceptable quotations, it should cancel the RFQ and resolicit its 

requirements. We also recommend that Rapiscan be reimbursed the costs of filing 

and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(d)(1) 

(2009). Rapiscan should submit its certified claim for costs, detailing the time 

expended and cost incurred, directly to the contracting agency within 60 days after 

receipt of this decision. 4 C.F.R. § 21.8(f)(1). 

The protest is sustained. 

Lynn H. Gibson 

Acting General Counsel 

 

(...continued) 

no further installation was required, and as to item 8, SAIC’s FSS contract in fact 

included installation of the replacement energy source. Since we have concluded 

that the order was improper because SAIC’s FSS contract did not include freight, we 

need not resolve these questions.