Geographical Limitations are Alive and Well – if Reasonable
Geographical limitations on proximity to a using facility do not show up often. They used to be based commonly on the need to have, for example, a copier or other office machine serviced quickly to preserve office productivity. The general rule from GAO has been that it is up to the agency to determine its needs and, if reasonable, geographic limitations will be upheld.
A recent case has illustrated that this long-standing precedent has not changed. A pharmacy objected to a 50-mile radius requirement for the provision of certain medical therapeutics, including radiological tracers and treatments. GAO reaffirmed its rule.
"Where a protester challenges a specification or requirement as unduly restrictive, the procuring agency has the responsibility of establishing that the specification or requirement is reasonably necessary to meet the agency’s needs. [citation omitted] We examine the adequacy of the agency’s justification to ensure it is rational and can withstand logical scrutiny. Id. Where matters of human life and safety are involved, our Office affords considerable deference to the judgments of the agency’s technical experts. Id."
Here, the agency explained that radiopharmaceuticals have a limited lifespan due to radioactive decay that begins once the medications are activated. It identified three considerations: the amount of time it takes to prepare, or activate, the required radiopharmaceutical; the drive time from the contractor’s pharmacy to the medical center; and the time it takes to process the radiopharmaceuticals before administering them to the patient. Once the medication is prepared, it must then be measured, labeled, inventoried and shipped.
The agency also gave some specific examples of how some medications were added to blood samples that were then returned to the patient. Traffic in the immediate area also was a factor. In sum, GAO found the agencies justification well within the bounds of reasonableness.
Geographic limitations restrict competition to a considerable degree and cannot be levied without a well thought-out rationale. It is important for agencies to make sure that they have fully documented their logic and relevant factors. It is incumbent on protestors to offer more than simple disagreement with the agency’s conclusions.
Shertech Pharmacy, B-419069. October 29, 2020