BNUMBER:  B-272414.7; B-272414.8; B-274628; B-274628.2
DATE:  December 20, 1996
TITLE:  Canon USA, Inc.;  Minolta Corporation

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Matter of:Canon USA, Inc.;  Minolta Corporation

File:     B-272414.7; B-272414.8; B-274628; B-274628.2

Date:December 20, 1996

Andrew Mohr, Esq., Cohen & White, for Canon USA, Inc., and Robert 
Brams, Esq., and Michael Schaengold, Esq., Patton Boggs LLP, for 
Minolta Corporation, the protesters.
Trisa J. Thompson, Esq., and G. Matthew Koehl, Esq., Seyfarth, Shaw, 
Fairweather & Geraldson, and Harry Orenstein, Esq., for Xerox 
Corporation, an intervenor.
Turhan Robinson, Esq., and Marie Adamson Collins, Esq., General 
Services Administration, for the agency.
Guy R. Pietrovito, Esq, and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Dismissal of protests as academic is affirmed where the corrective 
action provided by the contracting agency prior to the filing of the 
agency's report on the protests is the maximum relief that the General 
Accounting Office would have provided had a decision been issued 
finding the protests have merit; protesters are not entitled to 
reimbursement of the costs of filing and pursuing the protests where 
the agency timely implemented its promised corrective action.

2.  Protest that a modification to a firm's multiple award schedule 
contract exceeds the scope of the contract and is an unjustified sole 
source procurement is academic where the modification was rescinded 
within two weeks of the date on which the protests were filed, and 
prior to the modification's effective date, ordering agencies were 
advised that equipment could not be ordered pursuant to that 
modification.

DECISION

Canon USA, Inc. and Minolta Corporation request reconsideration of our 
dismissal of their protests of the award of delivery orders to Xerox 
Corporation by the United States Army Information Systems Command 
(USAISC) and the General Services Administration (GSA) under contract 
No. DAE32-94-D-0004 (0004), for the rental and maintenance of 
photocopier equipment.  Canon and Minolta also protest GSA's issuance 
of modification No. 49 to Xerox under its Federal Supply Contract 
Group 36, Part IV Schedule Contract No. GS-26F-1001B (1001B) for 
photocopier equipment, maintenance, and services, to allow federal 
agencies to convert equipment ordered under other government contracts 
(including contract No. 0004) to the schedule contract.  Canon and 
Minolta request that we sustain the protest against the award of 
delivery orders to Xerox under contract No. 0004 and against the 
issuance of modification No. 49 to contract No. 1001B, and that we 
recommend that the orders placed under those contracts be terminated, 
the equipment ordered thereunder be removed, and the protesters be 
reimbursed their costs of filing and pursuing the protests.

We affirm the dismissal of Canon's and Minolta's protests of the 
delivery orders under contract No. 0004 as academic; dismiss as 
academic Canon's and Minolta's protests of modification No. 49 to 
contract No. 1001B; and deny Canon's and Minolta's requests for 
entitlement to costs.

Contract No. 0004, as awarded to Xerox by the Army on August 10, 1994, 
provided that the USAISC could order copier equipment and services for 
USAISC headquarters, subordinate commands, and field operating 
activities within the continental United States (CONUS) up to stated 
estimated quantities; the contract also provided that other military 
and civilian agencies within the CONUS could order copier equipment 
and services "as long as their annual requirements do not exceed 30 
percent of the estimated annual quantities established for USAISC."  
The contract with option years extended through June 1999.  Subsequent 
to award, control and administrative responsibility for the contract 
was transferred by the Army to GSA.  Pursuant to the contract, a 
number of delivery orders were issued to Xerox for the rental of 
copiers for USAISC and other agency offices.

Minolta and Canon protested that many of the orders placed by other 
agency offices under contract No. 0004 exceeded that contract's 
maximum quantity limitation for non-USAISC offices and, pursuant to 
Liebert Corp., 70 Comp. Gen. 448 (1991), 91-1 CPD  para.  413, should have 
been the subject of competition.  The protesters requested that the 
performance of all government delivery orders in excess of the 
contract's maximum quantity be suspended and those requirements 
competed.  

Subsequent to the filing of the protests and prior to the submission 
of the agency's reports on the protests, GSA modified contract No. 
0004 to accede to Minolta's and Canon's interpretation of the 
contract's maximum quantity limitation provision and agreed not to 
exercise the contract option for performance beginning October 1, 
1996.  According to GSA, this meant that after September 30, the 
copiers delivered under the contract must be removed and the 
government's requirements for copiers and copier services reprocured.  
The Army stated that, in accordance with the transfer of contract 
responsibility to GSA, the Army would not place any new delivery 
orders against the contract.  On August 21, GSA notified its customer 
agencies of the expiration of contract No. 0004 and that the customer 
agencies' copier needs could no longer be met through that contract.  
GSA also notified customer agencies that GSA had in place alternative 
contracts, such as the federal supply schedule contracts, to meet the 
rental copier needs.  

On August 30, we dismissed Canon's and Minolta's protests as academic 
because GSA's promised corrective action provided the maximum relief 
that our Office would have provided had we issued a decision finding 
the protests to have merit.  See East West Research, Inc.--Recon., 
B-233623.2, Apr. 14, 1989, 89-1 CPD  para.  379.

On September 5, GSA issued modification No. 49 to Xerox's federal 
supply schedule contract No. 1001B, which provided, effective October 
1, 1996, for a temporary price reduction for the rental of certain 
Xerox copier models and that "[f]ederal customers renting  (currently 
installed) any Xerox . . . copiers under any and all Federal contracts 
as of September 30, 1996, may convert to the monthly fixed rate rental 
prices shown below."  [Emphasis in original.]  Pursuant to this 
modification, equipment ordered from Xerox under contract No. 0004 
could have been converted to coverage under the Xerox schedule 
contract.
 
Canon and Minolta now timely protest that the conversion of existing 
rental equipment under other contracts to contract No. 1001B under 
modification 49 exceeds the scope of Xerox's federal supply schedule 
contract because that contract did not include the rental of used 
equipment.  Canon and Minolta also argue that the conversion of 
equipment ordered under contract No. 0004 to Xerox's federal supply 
contract would be an unjustified, sole source procurement.  Canon and 
Minolta also request that under the circumstances we reconsider our 
August 30 dismissal of the protests of the award of delivery orders 
under contract No. 0004 because GSA's issuance of modification 49 
deprived the protesters of the promised corrective action that formed 
the basis of our dismissal of the protests, that is, the removal of 
the ordered equipment.  Canon and Minolta finally argue that, in 
accordance with our decision in Commercial Energies, Inc.--Recon. and 
Declaration of Entitlement to Costs, 71 Comp. Gen. 97 (1991), 91-2 CPD  para.  
499, we should recommend that the protesters be reimbursed the costs 
of filing and pursuing their protests because GSA not only failed to 
perform its promised corrective action, but issued an illegal 
modification to Xerox's federal supply contract to permit the 
continued rental of the improperly ordered Xerox copiers.

In response to the protests, on September 26, prior to the effective 
date of modification 49, GSA rescinded Modification 49 because the 
agency agreed that contract No. 1001B did not include the rental of 
used equipment.  By letter of October 9, GSA notified its customer 
agencies that contract No. 0004 had expired on September 30 and that 
modification 49 to contract No. 1001B had been rescinded on September 
26; GSA stated that:

     "[a]ccordingly, there is no contract method in place available 
     through GSA to retain the machines procured [under contract No. 
     0004] beyond September 30.  Therefore, the machines covered by 
     [contract No. 0004] should have been removed unless your agency 
     independently used another contract method permitted by the 
     Federal Acquisition Regulation [FAR] or other legal authority."

GSA contends that its corrective action has provided Canon and Minolta 
with all the relief the protesters could reasonably expect in response 
to their protests of contract No. 0004 and modification 49 to contract 
1001B.  In this regard, GSA disputes Canon's and Minolta's view that 
by issuing modification 49 the agency reneged on its promised 
corrective action in response to the protests of contract No. 0004.  
GSA states that ordering agencies could always obtain copier rental 
under the multiple award schedule in accordance with the FAR, and that 
modification 49 was issued to notify current renters of Xerox machines 
under federal contracts that these machines could be rented under the 
Xerox multiple award schedule contract.  GSA rescinded modification 49 
because Xerox's multiple award schedule contract did not provide for 
the rental of used copiers (although the multiple award solicitation 
had allowed for rental of used copiers).

We agree with GSA that Canon and Minolta have received all the relief 
they could reasonably have expected from our Office had we issued a 
decision finding their protests have merit.  Regarding Canon's and 
Minolta's challenge to the legitimate scope of contract No. 0004, GSA 
allowed the contract to expire and informed customer agencies that 
their rental copier could not be retained under this contract.  While 
Canon and Minolta argue that GSA should have policed this promised 
corrective action by ordering other agencies and Xerox to remove the 
equipment obtained under that contract, this is not relief that Canon 
and Minolta could reasonably have expected from our Office.  Rather, 
had we decided Canon's and Minolta's protests and found them to have 
merit, we would have recommended that GSA inform its customer agencies 
that the rental of these copiers exceeded the scope of contract No. 
0004 and should be removed--this is exactly the corrective action 
provided by GSA.

Nor do we agree with Canon and Minolta that the issuance of 
Modification 49 to contract No. 1001B deprived the protesters of the 
promised corrective action in response to the protests of the orders 
placed under contract No. 0004.  As promised in response to Canon's 
and Minolta's protests of contract No. 0004, GSA allowed contract No. 
0004 to expire and informed customer agencies that rental copiers 
could not be retained under that contract.  While modification 49 
ostensibly informed customer agencies that currently rented Xerox 
copiers under any contract, including contract No. 0004, could be 
rented under Xerox's multiple award schedule, this was consistent with 
GSA's August 21 notice that multiple award schedule contracts were 
available to satisfy customer agencies' rental copier needs.  GSA 
immediately rescinded modification 49, before its effective date, when 
the agency was informed that Xerox's multiple award schedule contract 
did not provide for the rental of used copiers.  Thus, Canon's and 
Minolta's protests against contract No. 0004 were properly dismissed 
as academic.

Moreover, because Canon and Minolta have received the corrective 
action promised by GSA in response to their protest under contract No. 
0004--the expiration of that contract--we do not agree that Canon and 
Minolta are entitled to reimbursement of the costs of filing and 
pursuing the protests.  Unlike Commercial Energies, Inc., supra, in 
which we found that a protester was entitled to reimbursement of its 
costs of filing and pursuing the protest where an agency did not 
timely implement its promised corrective action which allowed the 
awardee to continue performance of an improperly awarded contract, GSA 
here did not delay implementing its promised relief.

Finally, we find that Canon's and Minolta's protests of the issuance 
of modification 49 to Xerox's multiple award schedule contract are 
academic.  As noted above, on September 26, within 2 weeks of Canon 
and Minolta's protests and prior to the effective date of the 
modification, GSA rescinded modification 49.  This resolves Canon's 
and Minolta's complaints that this modification exceeds the scope of 
Xerox's multiple award schedule contract and is an unjustified 
sole-source action.  Rescission of modification 49 and advising 
customer agencies that Xerox equipment could not be ordered pursuant 
to that modification is all the relief that our Office would recommend 
had we issued a decision finding the protests against the issuance of 
modification 49 to have merit.[1]  The issues therefore are 
academic.[2]  
The prior dismissals of contract No. 0004 are affirmed, the requests 
for entitlement to protest costs are denied, and the protests of 
modification 49 to contract No. 1001B are dismissed as academic.

Comptroller General
of the United States

1. GSA advises that it does not have the authority to order the 
physical removal of Xerox equipment order modification 49, but could 
only, as it did, advise customer agencies that equipment could not be 
ordered pursuant to this modification.  While the protesters assert 
that GSA does have such authority, this involves GSA's administration 
of its contract and is thus not appropriate for review under our bid 
protest function.  Bid Protest Regulations,  sec.  21.5(a), 61 Fed. Reg. 
39039, 39045 (1996) (to be codified at 4 C.F.R.  sec.  21.5(a)). 

2. While Canon and Minolta complain that a number of ordering agencies 
have improperly converted rented Xerox copiers to Xerox's multiple 
award schedule under the authority of modification 49 and continue to 
rent these machines, despite GSA's notice that the modification has 
been rescinded, these ordering agencies' procurement actions have not 
been protested to our Office and are thus not for our review.