BNUMBER: B-270723
DATE: April 15, 1996
TITLE: Navajo Nation Oil & Gas Company
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Matter of:Navajo Nation Oil & Gas Company
File: B-270723
Date:April 15, 1996
Thomas M. Barba, Esq., and David A. Stein, Esq., Steptoe & Johnson,
for the protester.
Ron R. Hutchinson, Esq., Doyle & Bachman, for Barrett Refining
Corporation; Joseph P. Hornyak, Esq., and Debra A. McGuire, Esq.,
Sonnenschein, Nath & Rosenthal, for Navajo Refining Company; James J.
McCullough, Esq., and Anne B. Perry, Esq., Fried, Frank, Harris,
Shriver & Jacobson, for Refinery Holding Company, L.P., intervenors.
Howard M. Kaufer, Esq., Defense Logistics Agency, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that the Defense Fuel Supply Center improperly excluded from a
solicitation issued in fiscal year 1996 a provision giving small
disadvantaged preference to Indian Tribal corporations furnishing fuel
from small business manufacturers/refiners is denied, where the
provision was contained in the Department of Defense's (DOD)
appropriations act for fiscal year 1995, DOD Appropriations Act, 1995, sec.
8012, Pub. L. No. 103-355, 108 Stat. 2599, 2619 (1994), was
non-permanent in nature, and no similar provision is contained in the
DOD Appropriations Act, 1996, Pub. L. No. 104-61, 109 Stat. 636
(1995).
DECISION
Navajo Nation Oil & Gas Company (NNOGC) protests the terms of request
for proposals (RFP) No. SPO600-96-R-0030 (RFP-0030), issued by the
Defense Fuel Supply Center (DFSC), Defense Logistics Agency, for fuel.
NNOGC contends that a provision of the RFP pertaining to the
eligibility of small disadvantaged business (SDB) concerns for an
evaluation preference is inconsistent with section 8012 of the
Department of Defense (DOD) Appropriations Act, 1995, Pub. L. No.
103-355, 108 Stat. 2599, 2619 (1994).
We deny the protest.
On March 31, 1995, DFSC issued RFP No. SPO600-95-R-0161 (RFP-0161),
which provided for multiple awards of fixed-price indefinite quantity
contracts with economic price adjustments for the supply of
approximately 1.6 billion gallons of fuel for nearly 200 using
activities.[1] The solicitation contained an evaluation preference
for SDB concerns applicable to certain items set forth in the
solicitation.
The RFP also included a clause that set forth certain special
standards of responsibility applicable to non-refiner/non-manufacturer
offerors. NNOGC, an Indian Tribal Corporation owned and controlled by
the Navajo Nation (a federally recognized Native American tribe),
filed a protest with our Office on May 8, 1995, contending, among
other things, that the agency had no reasonable basis for any of this
clause's special standards of responsibility, and that the clause was
thus unduly restrictive of competition.
In Navajo Nation Oil & Gas Co., B-261329, Sept. 14, 1995, 95-2 CPD para.
133, we sustained NNOGC's protest because the record provided no basis
to conclude that the protested clause was reasonably related to the
agency's minimum needs. We recommended that the agency determine from
the protester which of the line items the protester was interested in
competing for under an amended solicitation, refrain from ordering
under the existing contracts for these line items any more fuel than
was required, resolicit for these line items without the protested
clause and in a manner consistent with our decision, and terminate the
contract(s) if the current contractor(s) is/are not the successful
offeror(s) under the resolicitation.[2]
In response to our recommendation, DFSC contacted NNOGC to determine
which line items NNOGC was interested in and, on November 24, issued
RFP-0030 (which did not include the clause that was the subject of the
prior protest) for a total fuel requirement of more than 165 million
gallons for 12 using activities.
NNOGC protests the inclusion of a provision in RFP-0030, which states
that "[SDB] concerns who are not manufacturers of the product offered
are reminded that their source refinery must be a [SDB] concern in
order for their offer to be eligible" for an SDB concern evaluation
preference.[3] NNOGC asserts that the inclusion of this provision in
the RFP is inconsistent with section 8012 of the 1995 Department of
Defense Appropriations Act, which states:
"Notwithstanding any other provision of law, a qualified Indian
Tribal corporation or Alaska Native Corporation furnishing the
product of a responsible small business concern shall not be
denied the opportunity to compete for and be awarded a
procurement contract pursuant to section 2323 of title 10, United
States Code, solely because the Indian Tribal corporation or
Alaska Native Corporation is not the actual manufacturer or
processor of the product to be supplied under the contract."
NNOGC asserts that although section 8012 provides that an Indian
Tribal corporation, such as NNOGC, may be considered an SDB concern
eligible for an evaluation preference if it supplies fuel refined by a
small business, the protested provision improperly restricts the
application of the SDB preference to only those SDB concerns who are
supplying fuel obtained from SDB manufacturers/refiners.
We agree that the protested provision is inconsistent with section
8012. However, neither this nor any similar provision is included in
the DOD Appropriations Act, 1996, Pub. L. No. 104-61, 109 Stat. 636
(1995). As explained below, section 8012, as part of the DOD
appropriations act for fiscal year 1995, expired on September 30,
1995, and is therefore not applicable to this RFP issued during fiscal
year 1996.
There is a presumption that any provision in an annual appropriation
act is effective only for the covered fiscal year. 31 U.S.C. sec.
1301(c) (1994); 65 Comp. Gen. 588 (1986). This is so because
appropriation acts are by their nature non-permanent legislation. 65
Comp. Gen 588. Thus, unless otherwise specified, the provisions of an
annual appropriation act for a given fiscal year expire at the end of
that fiscal year. A provision contained in an appropriation act is
not permanent legislation unless the language or nature of the
provision makes it clear that such was the intent of Congress, 62
Comp. Gen. 54 (1982); 10 Comp. Gen. 120 (1930), or, under certain
circumstances, where the provision is of a general nature, bearing no
relation to the object of the appropriation. See 26 Comp. Gen. 354
(1946).
Permanency is indicated most clearly when the provision in question
includes "words of futurity," such as "hereafter" or "after the date
of approval of this act." 65 Comp. Gen. 588. Section 8012 includes
no such words of futurity. The language used in section 8012,
"notwithstanding any other provision of law," is language of present
exclusivity, and not words of futurity. B-208705, Sept. 14, 1982.
Additionally, section 8012 cannot properly be considered as general in
nature, bearing no relation to the object of the appropriation act of
which it is a part. This is so because in a statute that otherwise
provides funding for DOD, section 8012 requires that DOD consider
certain entities under certain conditions to be SDB concerns,
effectively rendering the concerns eligible for an evaluation
preference. See B-208705, supra.
We also note that the language of section 8012 appeared for the first
time in, and is identical to that of, section 8051 of the DOD
Appropriations Act, 1994, Pub. L. No. 103-139, 107 Stat. 1418, 1451
(1993). The fact that the provision was repeated in the appropriation
act for 1995 without change after having been enacted in the 1994
appropriation act implies that the provision was not considered nor
intended by Congress to be permanent legislation. 5 Comp. Gen 810
(1926); see 32 Comp. Gen 11 (1952); 10 Comp. Gen. 120.
In sum, section 8012 cannot properly be construed as permanent
legislation, and the requirements of the provision thus expired on
September 30, 1995--at the end of fiscal year 1995.[4] Inasmuch as
section 8012 has expired, it is not applicable to RFP-0030 because
this RFP was issued, and the contract awards that may be made
thereunder will occur, during fiscal year 1996, and will be funded
from the Defense Business Operations Fund (DBOF) (a "working capital"
or "revolving" fund maintained in the United States Treasury). See 10
U.S.C. sec. 2208 (1994).[5]
The protester nevertheless argues that section 8012 should be
considered applicable to RFP-0030 under the replacement contract
doctrine. The replacement contract doctrine is meant to facilitate
contract administration by allowing funds obligated from annual
appropriations for a particular contract to remain available should a
replacement contract be required because, for example, the initial
contract is terminated for default because of poor performance or is
terminated for convenience because a court or other competent
authority determines that a contract was improperly awarded. 68 Comp.
Gen. 158 (1988). Absent the replacement contract doctrine, an agency
which terminates a contract would be required to deobligate the prior
year funds which support the terminated contract, and reprogram and
obligate current year funds, even though the particular expenditure
was budgeted for the prior year. 60 Comp. Gen. 591 (1981).
As explained by DFSC, should contracts be awarded under RFP-0030, DFSC
will obligate the necessary funds against the DBOF, and will
deobligate the funds supporting any contracts awarded under RFP-0161
that will be terminated.[6] Consequently, contracts awarded under
RFP-0030 will not be "replacement contracts" under the replacement
contract doctrine in the obligational sense simply because the funds
to support those contracts will not be from the specific obligations
supporting the contracts awarded under RFP-0161. In any event, since
the replacement contract doctrine simply provides a mechanism to allow
agencies to administer their contract effectively when there is a
reason to terminate a contract, its use is solely at the government's
discretion; we are aware of no law or regulation that requires an
agency to avail itself of the doctrine.
NNOGC nevertheless argues that DFSC, by not implementing section 8012
in RFP-0030, has "frustrated" Congress' goal in enacting that section,
and that DFSC's actions here constitute "a cynical attempt to profit
from its own improper conduct and delaying tactics." These
contentions are without merit. As explained above, section 8012, as
part of the 1995 DOD Appropriations Act, was applicable to fiscal year
1995, and expired at the end of fiscal year 1995, and neither it, nor
any similar language, was included in the 1996 DOD Appropriations Act.
Thus, we see no basis to conclude that any purpose of Congress has
been frustrated. Nor does the record support NNOGC's assertions that
DFSC's actions were cynically dilatory. We previously sustained
NNOGC's protest that a clause setting forth special standards of
responsibility was improperly included in RFP-0161, not that any
violation of section 8012 occurred, and DFSC has not included the
protested clause in RFP-0030.
NNOGC also protests that the agency did not fully comply with our
recommendation because it failed to include in RFP-0030 certain items
from RFP-0161 in which the protester expressed interest. Because the
protester concedes that without the application of section 8012 to
RFP-0030 there is "no prospect of an award to NNOGC," we no longer
consider NNOGC to be an interested party eligible to challenge the
agency's determination not to resolicit the items in question. Bid
Protest Regulations, section 21.0(a), 60 Fed. Reg. 40,737, 40,739
(Aug. 10, 1995) (to be codified at 4 C.F.R. sec. 21.0(a)); Space Commerce
Corp., 68 Comp. Gen. 646 (1989), 89-2 CPD para. 186.
Finally, in view of NNOGC's representation that it has no prospect for
award under RFP-0030, we modify the recommendation in our prior
decision Navajo Nation Oil & Gas Co., supra, to provide that the
agency need not resolicit the items in which the protester expressed
interest.
The protest is denied.
Comptroller General
of the United States
f:\projects\pl\270723.wp5
1. RFP-0161, as well as RFP-0030, are part of DFSC's Bulk Fuels
program, wherein DFSC procures large quantities of fuel for use at
numerous Department of Defense installations.
2. On August 25, 1995, the agency informed our Office that it was
proceeding with contract award and performance based upon a written
determination that urgent and compelling circumstances will not permit
waiting for our decision. See 31 U.S.C. sec. 3553(d)(2) (1988).
3. The standard DOD clause requires SDB concerns to provide a product
manufactured by SDB concerns in order to qualify for the SDB
preference. Defense Federal Acquisition Regulation Supplement sec.
252.219-7001(f)(2); 252.219-7006(d)(2).
4. There is no legislative history which would support the view that
section 8012 was meant as permanent legislation.
5. As explained by DFSC, it obligates funds from the DBOF as it awards
fuel contracts, such as those under this RFP. The using activities
reimburse the fund from their appropriations after the contracts are
in place and the activities have ordered fuel for delivery and been
billed by DFSC. According to DFSC, because any contracts under
RFP-0030 will be awarded in fiscal year 1996, DFSC will obligate the
funds against the DBOF, and using activities will order fuel and
obligate funds for reimbursement of the DBOF, in fiscal year 1996.
6. Because contracts awarded by DFSC for fuel are funded by the DBOF,
which is a working capital or revolving fund, and not an annual
appropriation, the administrative problems necessitating the
replacement contract doctrine do not exist.