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.