Hearing Officer's Sole Source Hearing Determination.pdf

TO: Ellen H. Daley, Chief Procurement Officer for General Services

FROM: Ellen C. Morris, Sole Source Hearing Officer

DATE: January 29, 2024

SUBJECT: December 27, 2023, Sole Source Hearing Officer Determination

On December 27, 2023, I presided as hearing officer over a hearing to consider comments regarding the following agency determination to contract on a sole source basis:

Agency: Department of Agriculture (“IDA”)

Vendor: Agilent Technologies (“Agilent”)

Brief Description: A gas chromatograph with triple quadruple

Procurement Bulletin Reference: 24-406AGR-NATRE-B-40565

Factual Background:

IDA has had a contract with Agilent for a Gas Chromograph Mass Selective Detector since August 1, 1997.

That contract resulted from a sole source procurement and was set to end on December 31, 2023. The contract subject to the instant sole source hearing is for a one-time purchase.

IDA published the Sole Source Justification Form (“SSJF”) on December 13, 2023. In the SSJF, IDA states that Agilent is the sole economically feasible source for the sought-after products and services because of compatibility of the equipment, accessories, replacement parts and services. Additionally, the SSJF states that the items are copyrighted or patented and are only available from Agilent. The SSJF also states that the gas chromatograph with a triple quadruple is essential to determine pesticides from misuse samples within IDA’s pesticide laboratory. The SSJF states that the sought-after equipment will replace the existing and obsolete Gas Chromatograph Mass Selective Detector which is used to analyze misuse of pesticide samples and provides irrefutable evidence for misuse case investigations. The SSJ form also outlines the specifications the sought-after instrument must include. The SSJF states that according to Agilent’s website, Agilent offers trade-ins of old instrument for a percentage off a new instrument, which would be a cost saving. The SSJF form states that the new Agilent instrument model has features that are cost saving; the helium model switches to a cheaper gas during non-run times and the back flushing modules prevent contaminants from entering the instrument’s detector. The SSJF states that Agilent instruments have demonstrated longevity not seen with other vendors and that IDA needs a dependable instrument for a minimum of fifteen to twenty years. The SSJF states that having another Agilent instrument allows interchangeability with current Agilent instruments of common parts and consumables. The SSJF states that Agilent is the sole source for factory authorized service, and for proprietary recommended software updates and upgrades. The SSJF states that by having another Agilent instrument, lab staff would not need to be completely trained, software would be familiar, current methods would easily transfer and not need to be redeveloped, and old data would be viewable on a new system.

Summary of Hearing:

Christy Bagwill, Ph.D. of Shimadzu Scientific Instruments (“Shimadzu”) requested the hearing.

The hearing was held via Webex on December 27, 2023. The notice of intent to contract on a sole source basis as well as the justification form for this procurement were incorporated into the record.

Leke Hoxha, Executive I, Procurement Specialist, testified on behalf of IDA. Mr. Hoxha stated that it was explained to him that the instruments are Agilent instruments, and that they are old and need to be replaced. Mr. Hoxha stated that IDA did not want to purchase completely new equipment because of higher costs and if IDA goes with a different company, the cost would be higher. Mr. Hoxha stated that

IDA seeks to trade in some older instruments and the trade in would offer discount, and IDA decided on a sole source procurement. Mr. Hoxha stated that Agilent total was $448,256.57, discount total

$132,905.38, meaning IDA would be spending $318,351.19.

Jessica Mellor, Chemist II, testified on behalf of IDA. Ms. Mellor stated that trade-ins are important because many companies do not take old instruments and IDA needs to have them removed. Ms. Mellor stated that Agilent will take an old instrument and offer a discount. Ms. Mellor stated that products in the

IDA lab will already work with instrument from Agilent and IDA will not have to get new items. Ms. Mellor stated that several of Agilent instruments are in the lab already so it would make it streamlined. Ms.

Mellor stated that no new method developments would be required, rather, just upgrading would be needed. Ms. Mellor stated that the Agilent products are thirty years old, that they are long lasting, and that they are good quality. Ms. Mellor stated that they are seeking to trade in an old one for new one, so the processes and methods would not have to be updated or changed and it would be easily transferrable.

Ms. Mellor stated that the Agilent instruments can use cheaper gas, such as nitrogen, when helium is not being used.

Ms. Mellor stated that there is concern about training staff on a new type of machine because each company has its own type of software. Ms. Mellor stated that they are still trying to learn a machine bought in 2020. Ms. Mellor stated that that they are familiar with Agilent’s software and instead spending a year to get up and running, they can be ready quickly with Agilent. Ms. Mellor stated that they are also concerned about having to start from scratch with their data, and that with Agilent, they can continue to look at their old samples as the data is transferrable. Mellor confirmed this sole source is for a one-time purchase. Ms. Mellor stated that they have a Shimadzu instrument bought in approximately 2010 in their lab, and that the software is not user friendly and is difficult to work with. Ms. Mellor stated that the lab in the basement also had issues getting their Shimadzu machine up and running, which causes worry. Ms.

Mellor stated that there are no issues with support from Agilent, and that they have had good communications with them and no additional costs. Ms. Mellor stated that they obtained a new Agilent instrument recently and they did not pay extra for training or methods.

Christy Bagwill, Ph.D., Field Sales Engineer, testified on behalf of Shimadzu and presented a PowerPoint presentation. Dr. Bagwill stated that IDA currently has a Shimadzu instrument that was purchased in 2018, that they were told it was not being used, so Shimadzu came in and trained on it. Dr. Bagwill stated that

Shimadzu seeks to take care of their customers. Dr. Bagwill stated that Shimadzu Scientific Instruments is an American subsidiary of Shimadzu Corporation, that they are headquartered in Maryland and have ten regional U.S. offices, and that they have local sales, service, and technical support. Dr. Bagwill stated that

Shimadzu has over 50 years’ experience in designing and manufacturing instrumentation. Dr. Bagwill stated that what IDA is seeking is not unique to Agilent but is common to both Agilent and Shimadzu. Dr.

Bagwill stated that that with Shimadzu, IDA will get a common NIST/Wiley database. Dr. Bagwill stated that the Shimadzu GCMS-TQ8050 NX meets and exceeds the hardware, analysis, and support specifications, that it has multiple options to be gas saver mode, it can run nitrogen and hydrogen, and is a high sensitivity ion source. Dr. Bagwill stated that Shimadzu’s cost is less than Agilent’s, that it includes shipping, and that it includes removal of the old instruments.

Dr. Bagwill stated that the Shimadzu instrument is installed and serviced by Shimadzu employees who are factory trained and certified and that they do not hire service engineers who are cross trained between instrument manufacturers. Dr. Bagwill stated that this means they can faster respond if something happens, the agency will be familiar with them, and the agency can contact them directly. Dr. Bagwill stated that Shimadzu has instrumentation that has been in service for decades and that their longevity is related to the design, manufacturing, and routine maintenance. Dr. Bagwill stated that Shimadzu has a warranty, that one year covers the instrument, computer, and monitor. Dr. Bagwill stated that the electron multiplier has a seven-year extended warranty and that an optional extended year value plan exists as well. Dr. Bagwill stated that Shimadzu will convert any custom in-house libraries and will load them into LabSolutions/Insight software. Dr. Bagwill stated that Shimadzu will convert current methods and/or develop new methods that meet or exceed specifications and will be provided on day one. Dr.

Bagwill stated that Shimadzu will run the method on site to confirm it meets or exceeds specifications, all before training begins. Dr. Bagwill stated that there is no additional charge for this while Agilent does charge and Agilent’s is limited. Dr. Bagwill stated that that Shimadzu does not limit this to a specific number of participants, rather, it is a custom length of time depending on needs, and Shimadzu can return for follow up training.

Dr. Bagwill stated that Shimadzu will help with exporting ChemStation data files into AIA format which is compatible with Shimadzu data system and that the GCMS Library File Conversion Utility is also available.

Dr. Bagwill stated that there will not be downtime, or a backlog or cost associated with the development of new method, report format, transferring files, or custom in-house libraries. Dr. Bagwill stated that there also will not be a backlog due to learning new software. Dr. Bagwill stated that consumables such as autosampler vials, caps, septa, and wash vials are universal between Agilent and Shimadzu instrumentation, and that Shimadzu will provide a discount to purchase future items. Dr. Bagwill stated that the Shimadzu support package includes installation and familiarization provided with an instrument purchase and will meet specifications, with no additional charge. Dr. Bagwill stated that free remote technical support exists for the life of the instrument, while Agilent charges. Dr. Bagwill stated that upgrades for support software are free for the life of the instrument and that on-site technical support for future needs, if request are within reason, are free. Dr. Bagwill stated that if the agency goes with

Agilent, it will cost the State at least $130,000.00 in purchase price, the agency will have a less comprehensive warranty coverage and the agency will have costly support services and software upgrades. Dr. Bagwill stated that Shimadzu can support IDA and it will cost the State less.

Applicable Statutes and Rules

Sole-source procurements must be scrutinized because they tend to contravene the core purpose of the

Illinois Procurement Code, namely, “that the principles of competitive bidding and economical procurement practices shall be applicable to all purchases and contracts by or for any State agency.” 30

ILCS 500/1-5. The Code requires heightened transparency for sole source awards because they lack competition and can be abused relatively easily. See, generally, 30 ILCS 500/20-25.

The Code states that “contracts may be awarded without use of the specified method of source selection when there is only one economically feasible source for the item.” 30 ILCS 500/20-25(a). Additionally, the

Code states that a “contract may be awarded as a sole source contract unless an interested party submits a written request for a public hearing at which the chief procurement officer and purchasing agency present written justification for the procurement method.” Id. Additionally, the Code states that “[a] sole source contract where a hearing was requested by an interested party may be awarded after the hearing is conducted with the approval of the chief procurement officer. Id.

The Illinois Administrative Code further outlines the following:

A sole source procurement is permissible when a requirement is available from only a single supplier. A sole economically feasible source is permissible when only one supplier is deemed economically feasible. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one vendor is authorized to provide that item.

44 ILL. ADMIN. CODE 1.2025(b).

Section 1.2025(c) provides that “[p]rior to authorizing the State agency to enter into a contract based on the . . . sole economically feasible source request, the CPO-GS shall offer a public hearing to be held and make a final determination as required by Section 20-25(a) of the Code.” 44 ILL. ADMIN. CODE 1.2025(c).

Analysis and Recommendation

The issue here is whether any vendor other than Agilent can provide the necessary supplies and services to meet IDA’s needs with regards to providing a gas chromatograph with triple quadruple, and whether any other vendor can do so in an economically feasible manner. In this case, another vendor can provide these supplies and services in an economically feasible manner.

IDA needs a vendor to provide a gas chromatograph with a triple quadruple with certain specifications and additional related services as outlined in the SSJ.

Dr. Bagwill of Shimadzu articulated that Shimadzu has over 50 years’ experience in designing and manufacturing instrumentation and that what IDA is seeking is not unique to Agilent. Dr. Bagwill articulated that the Shimadzu GCMS-TQ8050 NX meets and exceeds the hardware, analysis, and support specifications, that it has multiple options to be gas saver mode, it can run nitrogen and hydrogen, and is a high sensitivity ion source. Dr. Bagwill articulated that Shimadzu’s cost is less than Agilent’s cost and that Shimadzu’s cost includes shipping, and removal of the old instruments.

Dr. Bagwill further articulated that the Shimadzu instrument will be installed and serviced by Shimadzu employees who are factory trained and certified. Dr. Bagwill articulated that Shimadzu has instrumentation that has been in service for decades. Dr. Bagwill articulated that Shimadzu will convert any custom in-house libraries and will load them into LabSolutions/Insight software and that Shimadzu will convert current methods and/or develop new methods that meet specifications, which will be provided on day one. Dr. Bagwill articulated this is with no additional charge for this while Agilent does charge.

Dr. Bagwill articulated that Shimadzu will assist with exporting data files into a format which is compatible with Shimadzu data systems, that no downtime or backlog or costs will be associated with the development of new methods, report format, transferring files, learning new software, or custom in-house libraries. Dr. Bagwill stated that consumables are universal between Agilent and Shimadzu instrumentation, and that Shimadzu will provide a discount to purchase future items.

IDA does not appear to have adequately investigated alternative vendors. It also appears that IDA did not attempt to write an Invitation for Bids, Request for Proposal, or a Request for Information to learn more about the potential vendor pool.

In this case, Shimadzu testified it can supply the sought-after items and it can perform the services outlined by IDA in the SSJF. As a result, IDA’s requirements do not appear to be available from only a single vendor, and there is insufficient evidence to establish that only Agilent can fulfill IDA’s requirements in a cost-effective way. Therefore, based on the foregoing, I find the justification for this sole economically feasible source to be insufficient, and I recommend the procurement not be approved.