BNUMBER:  B-271495
DATE:  April 26, 1996
TITLE:  Sprint Communications Company, L.P.

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Matter of:Sprint Communications Company, L.P.

File:     B-271495

Date:April 26, 1996

David S. Cohen, Esq., Carrie B. Mann, Esq., and G. Brent Connor, Esq., 
Cohen & White, for the protester.
Thomas C. Papson, Esq., and David Kasanow, Esq., McKenna & Cuneo, for 
AT&T Communications, Inc., an intervenor.
George N. Barclay, Esq., and Michael J. Ettner, Esq., General Services 
Administration, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest against reallocation of telephone service requirements between 
FTS 2000 contractors is dismissed where reallocation process was 
provided for under the FTS 2000 contracts and is a matter of contract 
administration; General Accounting Office generally does not exercise 
jurisdiction to review matters of contract administration, which are 
within the discretion of the contracting agency and for review by a 
cognizant board of contract appeals or the Court of Federal Claims.

DECISION

Sprint Communications Company, L.P. protests the General Services 
Administration's (GSA) determination to reallocate 40 percent of 
Sprint's share of the FTS 2000 contract requirements to AT&T in the 
Year 7 Price Redetermination/Service Reallocation (PR/SR).  Sprint 
challenges the conduct of the PR/SR process and the evaluation of 
proposals.

We dismiss the protest.

In 1987, GSA issued solicitation No. KET-JW-87-02, requesting 
proposals to furnish long-distance telecommunications services to 
federal agencies.  As amended, the solicitation contemplated the award 
of two 10-year, indefinite delivery/indefinite quantity contracts--one 
for Network A for 60 percent of the requirement (with a guaranteed 
minimum of $270 million) and another for Network B for 40 percent 
(with a guaranteed minimum of $180 million).  The solicitation divided 
the 10-year contract term into three periods--an initial 4-year 
period, followed by two successive 3-year periods--and provided GSA 
with the right to request revised prices and reallocate service 
requirements between the contractors prior to commencement of the 
second and third contract periods.  The solicitation stated that 
proposals for price redetermination--repricing--would be requested 
during the fourth and seventh contract years; GSA would select service 
requirements for potential reallocation using a target of 40 percent 
of each network's estimated revenue over the remaining life of the 
contract.  The service requirements selected for reallocation were to 
be awarded based on consideration of two factors of equal weight:  (1) 
cost and (2) quality of service during the preceding contract phase 
and effectiveness of the most recent transition.

In December 1988, GSA awarded the Network A contract (for 60 percent 
of the requirement) to AT&T and the Network B contract (for 40) 
percent to Sprint.  The Year 4 PR/SR (undertaken in 1992) resulted in 
a determination to maintain the 60/40 percent split.

On April 4, 1995, GSA issued to AT&T and Sprint a set of 
instructions--the "Year 7 Price Redetermination/Service Reallocation 
Document"--for the conduct of the Year 7 PR/SR.  Contractors were 
required to submit technical and cost proposals.  The instructions 
listed two evaluation factors of equal weight--technical and cost 
(including service/feature prices and transition costs).  Based on the 
results of the evaluation, GSA was to select one of three scenarios:  
(1) the Network A contractor (AT&T) wins 40 percent of the Network B's 
(Sprint) target revenue split, (2) the Network B contractor wins 40 
percent of the Network A's target revenue split, or (3) no change in 
the 60/40 percent target revenue split.

On June 30 and July 10, Sprint and AT&T, respectively, filed protests 
with the General Services Board of Contract Appeals (GSBCA), arguing 
that the conduct of the PR/SR was not in accordance with the 
Competition in Contracting Act of 1984,  the Federal Acquisition 
Regulation and the PR/SR instructions.  In particular, Sprint argued 
that GSA had added disproportionate transition costs to Sprint's 
evaluated cost, used understated traffic volumes for Sprint, used an 
irrational "average pricing" approach to compute the evaluated cost, 
and improperly deleted certain Department of Defense traffic from the 
PR/SR process.

On July 30, GSBCA dismissed the protests on the basis that the PR/SR 
process was a matter of contract administration, not contract 
formation, and therefore was not protestable under GSBCA's bid protest 
jurisdiction as set forth in 40 U.S.C.  sec.  759(f) (1994).  Sprint 
Communications Co., L.P., GSBCA No. 13,323-P, 13,333-P, 95-2 BCA  para.  
27,811, 1995 BPD  para.  144.  In reaching its decision in this regard, 
GSBCA rejected Sprint's and AT&T's argument that the PR/SR process was 
analogous to limited competitions which are conducted between parallel 
development/production contractors to determine which contractor's 
option should be exercised and which our Office has found to be 
subject to bid protest review.  Mine Safety Appliances Co., 69 Comp. 
Gen. 562 (1990), 90-2 CPD  para.  11; Westinghouse Elec. Corp., 57 Comp. 
Gen. 328 (1978), 78-1 CPD  para.  181; Honeywell, Inc., B-244555, Oct. 29, 
1991, 91-2 CPD  para.  390.  The GSBCA distinguished such limited 
competitions as involving additional work beyond that expressly 
awarded at the time the original contracts were entered into.  In 
contrast, according to the GSBCA, GSA was 

        "at most, reshuffling existing requirements already awarded 
        within the initial ten-year span of the FTS 2000 contracts. . 
        . . .  [N]o new procurement action will occur.  The PR/SR will 
        do nothing more than reallocate the Government's purchases of 
        the same requirements already subjected to full and open 
        competition under the original solicitation, as the FTS 2000 
        contracts fully entitle it to do.  As such, the contemplated 
        action is more properly categorized as a matter of contract 
        administration, rather than formation and does not constitute 
        a protestable event.  GSA's choice of procurement-like 
        procedures to determine reallocation of work between existing 
        contractors does not transform the reallocation into a 
        'procurement.'  To the extent that GSA's PR/SR process is 
        mishandled, the remedy is provided under the Contract Disputes 
        Act." 

Sprint Communications Co., L.P., supra.  On August 22, Sprint's and 
AT&T's motions for reconsideration were denied by the GSBCA.  Sprint 
Communications Co., L.P., GSBCA No. 13,323-P-R, 13,333-P-R, 95-2 BCA  para.  
27,898, 1995 BPD  para.  170.  On September 29, Sprint's and AT&T's motions 
for full board consideration likewise were denied.  Sprint 
Communications Co., L.P., GSBCA No. 13323-P-R, 13333-P-R, 96-1 BCA  para.  
27,987, 1995 BPD  para.  191.  AT&T appealed the GSBCA's decisions to the 
Court of Appeals for the Federal Circuit, but subsequently withdrew 
the appeal.

In November, at the conclusion of discussions, Sprint and AT&T made 
their final submissions to the agency under the PR/SR process.  On 
December 1, GSA announced that it would reallocate 40 percent of 
Sprint's target revenue--specifically, all of the requirements of the 
Department of the Treasury--to AT&T.  On December 22, following a 
December 12 debriefing, Sprint wrote to GSA to complain that the Year 
7 PR/SR process was "flawed."  According to Sprint, the agency had (1) 
improperly publicly disclosed the relative standing of the contractors 
after submission of the first revised price proposals and prior to 
submission of the second (final) revised price proposals, (2) 
unreasonably assumed in calculating costs that the Treasury 
requirements would immediately transition--"flash cut"--to AT&T on the 
December 7, 1995 effective date for the Year 7 PR/SR, (3) improperly 
accepted AT&T's offer of a transition cost fund, and (4) improperly 
accepted AT&T's unbalanced offer.  When GSA, by letter of March 7, 
1996, found Sprint's arguments to be without merit, Sprint filed this 
protest with our Office raising the same arguments raised in its 
December 22 letter to GSA.

GSA and AT&T argue that Sprint's protest should be dismissed on the 
basis that it raises a matter of contract administration over which 
our Office does not exercise jurisdiction.

Our Office considers bid protests challenging the award or proposed 
award of contracts.  31 U.S.C.  sec.  3551, 3552.  Therefore, we generally 
do not exercise jurisdiction to review matters of contract 
administration, which are within the discretion of the contracting 
agency and for review by a cognizant board of contract appeals or the 
Court of Federal Claims.  See Bid Protest Regulations, section 
21.5(a), 60 Fed. Reg. 40,737, 40,742 (Aug. 10, 1995) (to be codified 
at 4 C.F.R.  sec.  21.5(a)); Specialty Plastics Prods., Inc., B-237545, 
Feb. 26, 1990, 90-1 CPD  para.  228.  The few exceptions to this rule 
include such situations as where it is alleged that a contract 
modification improperly exceeds the scope of the contract and 
therefore should have been the subject of a new procurement, CAD 
Language Sys., Inc., 68 Comp. Gen. 376 (1989), 89-1 CPD  para.  364; where a 
protest alleges that the exercise of a contractor's option is contrary 
to applicable regulations, Bristol Elecs., Inc., B-193591, June 7, 
1979, 79-1 CPD  para.  403; and where an agency's basis for contract 
termination is that the contract was improperly awarded.  Condotels, 
Inc. et al., B-225791; B-225791.2, June 30, 1987, 87-1 CPD  para.  644. 

We conclude, as did the Board, that the FTS 2000 reallocation raises a 
matter of contract administration that is not for consideration under 
our bid protest jurisdiction.  The limited competition conducted 
between Sprint and AT&T is not only provided for under their contracts 
with GSA, but also is not intended to result in the additional 
procurement of anything.  It is, as the Board held, simply a tool for 
determining whether requirements previously awarded to the two 
contractors should be reallocated between them.  Thus, we are in 
agreement with the Board's view that our prior decisions dealing with 
limited competitions conducted between parallel development/production 
contractors pursuant to provisions of their contracts to determine 
which contractor should be selected for the next phase of the 
development/production effort are distinguishable as they involved 
additional, follow-up work--here no additional work is contemplated. 
 
In short, since the PR/SR was conducted pursuant to the terms of the 
FTS contracts and only reallocates the requirements already subjected 
to full and open competition under the original solicitation, the 
reallocation is properly categorized as a matter of contract 
administration not reviewable under our bid protest jurisdiction.    

The protest is dismissed.    

Comptroller General
of the United States