BNUMBER:  B-266257; B-266258
DATE:  February 8, 1996
TITLE:  LDDS WorldCom

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Matter of:LDDS WorldCom

File:     B-266257; B-266258

Date:     February 8, 1996

J. Randolph MacPherson, Esq., Sullivan & Worcester, for the protester.
Francis J. O'Toole, Esq., Robert J. Conlan, Jr., Esq., Joseph C. Port, 
Jr., Esq., and Michael L. Shore, Esq., Sidley & Austin; and Nathaniel 
Friends, Esq., and Steven W. DeGeorge, Esq., AT&T Corporation, for 
AT&T Corporation, an interested party.
Carl Wayne Smith, Esq., and H. Jack Shearer, Esq., Defense Information 
Systems Agency, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.   Same issues and arguments as those resolved in a recent decision 
involving the same agency and the same procurement will not be 
considered as no useful purpose would be served.

2.  Protest alleging that agency cancellation of solicitations prior 
to receipt of responses from offerors was improper is denied where the 
record shows that the  cancellation decision was reasonable; there is 
no evidence that the agency issued the solicitations without intending 
to award contracts; and the regulatory requirement for a written 
determination supporting the cancellations, cited by the protester, 
does not apply because the solicitations were canceled before receipt 
of responses.

3.  Contention that the agency improperly modified an existing 
contract beyond its scope instead of holding a separate competitive 
procurement is denied where a review of the contract terms shows that 
the added services could have been anticipated from the face of the 
contract itself, and where the added services are not materially 
different from the services currently procured under the contract.

DECISION

LDDS WorldCom protests the cancellation of solicitation Nos. 
RG20JUL951511 and RG20JUL951512 by the Defense Information Systems 
Agency (DISA), and the agency's corresponding decision to obtain these 
services from AT&T via the Defense Commercial Telecommunications 
Network (DCTN) Contract.  LDDS contends that the agency is improperly 
consolidating services onto AT&T's DCTN contract, and onto an upcoming 
sole-source transition contract the agency intends to award to AT&T 
until completion of a global competition for these telecommunication 
services.[1]  LDDS also protests that the consolidation of 
international services onto the DCTN contract (and transition 
contract) exceeds the scope of those contracts, and that the agency 
has awarded an improper letter contract to AT&T.

We deny the protest. 

BACKGROUND

On July 20, 1995, DISA received a requirement from the Air Force for 
two separate 1.544 megabit per second circuits to be in place not 
later than October 16.  These dedicated circuits were to connect 
McChord Air Force Base (AFB), Washington, with Nellis AFB, Nevada, and 
Gunter AFB Annex, Alabama, with Tyndall AFB, Florida.  Since these 
services involve command and control of military forces, they are 
exempt from the coverage of the government-wide FTS 2000 contract, 
pursuant to the terms of 10 U.S.C.  sec.  2315 (1994).  While these 
services normally would have been ordered using AT&T's DCTN contract, 
DISA procurement personnel concluded that they could not properly fill 
these requirements on the DCTN contract because it was slated to 
expire on February 29, 1996.  Since the two circuits had an estimated 
60-month service life, DISA procurement personnel decided instead to 
procure the two circuits competitively via posting on an electronic 
bulletin board.   

On July 27, DISA placed a telecommunications service request, commonly 
referred to as an "inquiry," on its electronic bulletin board 
available to the telecommunications industry.  This bulletin board 
uses an accelerated competitive procedure, known as an 
"Inquiry/Quote/Order" process, whereby the inquiry references certain 
standard DISA provisions and contains information unique to the 
requirement.  Offerors respond with a quote, and if successful, 
receive an order for the service.  The inquiry required that quotes be 
received by 3 p.m. on August 11.  

After placing inquiries for these two dedicated circuits on the 
bulletin board, DISA's procurement personnel received guidance 
explaining that use of the DCTN contract to procure new services was 
appropriate even if the duration of the new requirements exceeds the 
remaining term of the DCTN contract or the term of the planned sole 
source transition contract.  In addition, this guidance advised that, 
whenever appropriate, the DCTN contract should be the contract of 
first choice in fulfilling such requirements.  Thus, on August 4, a 
week before quotes were due, DISA canceled the two solicitations.  
This protest followed.[2] 

DISCUSSION

Of the four challenges raised by LDDS--improper cancellation of the 
solicitations for the two circuits; improper consolidation of services 
onto AT&T's contracts; inclusion of services beyond the scope of the 
DCTN and transition contracts; and award of a letter contract to AT&T 
in violation of the restrictions on such awards--two raise the same 
arguments involving the same contract actions raised by Sprint in its 
protest involving the DCTN and transition contract, Sprint 
Communications Co., supra.  Since these two issues--i.e., the 
propriety of the agency's decision to consolidate telecommunications 
services on the DCTN and transition contracts, and the nature of the 
alleged letter contract--and the arguments raised are the same as in 
the earlier protest, which was resolved in the agency's favor by the 
decision of January 25, we see no useful purpose to be served by our 
further consideration of these issues.  See RMS Indus., B-247465; 
B-247467, June 10, 1992, 92-1 CPD  para.  506; Wallace O'Connor, Inc., 
B-227891, Aug. 31, 1987, 87-2 CPD  para.  213.  Instead, we focus on LDDS's 
challenge to the cancellation of the solicitations for the two 
circuits, and its contention that the agency is using the DCTN and 
transition contracts to procure international services beyond the 
scope of those two contracts. 

Cancellation of the Two Solicitations

LDDS argues that the agency decision to cancel the two electronic 
solicitations was improper, and that the agency failed to follow the 
guidelines in the Federal Acquisition Regulation (FAR) applicable to 
decisions to cancel solicitations.  

Our prior decision in Sprint sets forth in detail the agency's 
decision to consolidate services onto the DCTN and transition 
contracts until completion of a major competitive procurement planned 
for early 1997.  While we recognize that the agency could procure 
these services on a piecemeal basis using competition, we 
also recognize the benefits associated with streamlining the unwieldy 
system currently used by the Department of Defense, and procuring 
these services using consolidated procurements designed to achieve 
significant economies of scale.  Sprint Communications Co., supra at 
10-12.  As discussed at length in Sprint, we find nothing unreasonable 
in the agency's decision to consolidate its telecommunications 
services onto the DCTN and transition contracts.  Thus, in the general 
sense that the cancellations at issue here are part of the agency's 
implementation of that decision, we have no objection to the 
cancellations.

With regard to the two solicitations at issue here, LDDS argues that 
the agency violated FAR  sec.  15.402(c), which admonishes agencies not to 
issue solicitations under which they have no intention of awarding a 
contract.  LDDS also argues that the contracting officer was required 
to make a written determination, pursuant to the terms of FAR  sec.  
15.608(b), explaining the basis for rejecting all quotes received in 
response to the solicitations.  In our view, LDDS is wrong on both 
counts.

First, there is no evidence in the record that the agency issued these 
solicitations with the knowledge that it would cancel them.  Instead, 
the record shows that agency personnel had a good faith belief, until 
advised otherwise, that they could not order services under the DCTN 
and transition contracts slated to last longer than the life of the 
contracts themselves.  Since the agency changed its position after 
placing these requirements on the bulletin board, but before quotes 
were received, we see nothing in the record to support a finding that 
the agency improperly issued the solicitations with no intent to award 
a contract.  

Second, the requirement in FAR  sec.  15.608(b) for preparing a written 
determination for canceling a solicitation after receipt of proposals, 
on its face, does not apply in a situation where the agency canceled 
the solicitation 8 days after posting the requirement, and a week 
before quotes were due.  See Valix Federal Partnership I v. Department 
of the Air Force, GSBCA No. 12038-P, Oct. 30, 1992, 93-2 BCA  para.  25,595, 
1992 BPD  para.  326.  

Addition of International Services to DCTN Contract

As part of its challenge to the agency's decision to consolidate 
services on the DCTN and transition contracts, LDDS argues that the 
agency is adding international services to the contract, which, LDDS 
claims, are beyond the contract's scope and must be the subject of a 
separate competitive award.  We disagree.

As a general rule, our Office will not consider protests against 
contract modifications, as they involve matters of contract 
administration that are the responsibility of the contracting agency.  
4 C.F.R.  sec.  21.3(m)(1) (1995); National Linen Serv., B-257112; 
B-257312, Aug. 31, 1994, 73 Comp. Gen. ___, 94-2 CPD  para.  94.  We will, 
however, consider a protest that a modification is beyond the scope of 
the original contract, and that the subject of the modification thus 
should be competitively procured absent a valid sole-source 
justification.  Neil R. Gross & Co., Inc., 69 Comp. Gen. 292 (1990), 
90-1 CPD  para.  212; Everpure, Inc., B-226395.4, Oct. 10, 1990, 90-2 CPD  para.  
275.  In determining whether a modification improperly exceeds the 
scope of the contract, we consider whether there is a material 
difference between the modified contract and the contract originally 
competed.  CAD Language Sys., Inc., 68 Comp. Gen. 376 (1989), 89-1 CPD  para.  
364; Clean Giant, Inc., B-229885, Mar. 17, 1988, 88-1 CPD  para.  281.  The 
materiality of a modification is determined by examining factors such 
as the magnitude of the changes in relation to the overall effort,  
CAD Language Sys., Inc., supra, whether the nature and purpose of the 
contract has been altered by the modification, Clean Giant, Inc., 
supra, and whether the field of competition would be materially 
changed by the contract modification.  Rolm Corp., B-218949, Aug. 22, 
1985, 85-2 CPD  para.  212.

The record here shows that from the inception of the DCTN contract in 
1984, until January 26, 1995, the DCTN contract was not used to 
procure international services.  In fact, LDDS has provided a 
statement from the contracting officer at the time the DCTN contract 
was solicited, indicating that he considered the use of the DCTN 
contract for international services beyond the scope of the contract.

While the understanding of the former contracting officer is a useful 
indicator of the agency's mindset at the time the agency solicited 
these services, it is not a substitute for a reasoned review of the 
contract document itself and a comparison of the existing and modified 
services.  Such a review shows that the original DCTN contract as 
solicited contained an option for extending these services "to users 
located outside the [Continental United States]."  Although the agency 
is not here exercising that option, the presence of the option in the 
solicitation, issued some 12 years ago, provides strong evidence that 
offerors could have expected that international services might be 
covered by the contract at some point in the future.  In addition, the 
contract contains numerous other performance requirements that, while 
less explicit than the option provision, strongly suggest that the 
DCTN contract might be used to procure services reaching beyond the 
borders of the continental United States.[3]  Finally, there is 
nothing about international telecommunications services that differs 
from the existing services other than their destination.  

In sum, the record shows that services such as these are not 
materially different from those currently procured via this contract, 
and do not alter the nature or purpose of the contract from one 
seeking specialized telecommunications services.  Accordingly, we 
conclude that the services at issue are within the scope of the DCTN 
contract. 

The protest is denied.

Comptroller General
of the United States

1. Our prior decision in Sprint Communications Co., B-262003.2, Jan. 
25, 1996, 96-1 CPD  para.  24, includes a detailed discussion of AT&T's DCTN 
contract and the proposed sole-source award of a transition contract 
until completion of an upcoming competition already underway.  In that 
decision, our Office denied Sprint's challenge to the award of the 
sole-source transition contract to AT&T.  The decision also addressed 
other issues relevant here, as explained below. 

2. LDDS first filed an agency-level protest challenging the 
cancellation of the solicitations for these services, and other 
services.  After receiving the agency decision denying its protest, 
LDDS filed a timely challenge with our Office.

3. For example, the performance specifications section of the DCTN 
contract, at paragraph 2.2.1, requires the contractor to 

            "meet the needs of the National Command Authorities (NCA), 
            the DOD, and the Military Departments (MILDEPs) under 
            crisis and emergency conditions such as mobilization of 
            U.S. forces for overseas deployment, military exercises, 
            mobilization and transfer of resources for assistance to 
            allies, military participation during natural disasters, 
            and evacuation of Americans from hostile environments."

The notion that the contractor in every one of these situations would 
be required to stop providing services at the U.S. border, while 
troops progress elsewhere, is unreasonable.