BNUMBER:  B-274365
DATE:  December 6, 1996
TITLE:  C.W. Over and Sons, Inc.

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Matter of:C.W. Over and Sons, Inc.

File:     B-274365

Date:December 6, 1996

William J. Spriggs, Esq., Spriggs & Hollingsworth, for the protester.
Michael H. Horrom, Esq., Maryland Procurement Office, National 
Security Agency, for the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Federal Acquisition Regulation requirement that the value of an 
indefinite quantity contract be more than nominal does not apply to 
individual tasks under a contract that includes a provision 
guaranteeing that minimum contract value will be $800,000.

2.  Solicitation requirement that contractor perform certain tasks 
that cannot be definitively priced prior to award does not create 
unreasonable risk where such potential tasking requirements are 
minimal and the price for such work will be the subject of negotiation 
between the contractor and the agency.

3.  Where solicitation lists prices for more than 25,000 tasks, 
protester's identification of a small number of prices that may not 
reflect the most recent actual costs does not require canceling the 
solicitation because offerors' proposed coefficients are intended to 
reflect the risk associated with such price variations.

DECISION

C.W. Over and Sons, Inc. (Over) protests the provisions of request for 
proposals (RFP) No. MDA904-96-R-0702, issued by the Maryland 
Procurement Office, National Security Agency (NSA), to perform a 
variety of construction, renovation, and repair services.  The 
solicitation contemplates award of an indefinite delivery/indefinite 
quantity contract under which the agency will issue delivery orders 
for specific tasks.  Over, the incumbent contractor, asserts that the 
solicitation contains various flaws.  

We deny the protest.

BACKGROUND

Over is currently performing a contract under which it provides 
construction services to NSA which Over describes as "identical" to 
the services sought under the protested solicitation.  Over's current 
contract was awarded in 1994; there are two remaining options, each 
for a 1-year period, which the agency does not intend to exercise due, 
in part, to the agency's belief that it can reduce its costs through 
competition. 

Prior to the agency's issuance of this solicitation, Over requested 
the agency to exercise the remaining options of its current contract.  
By letter to the agency dated July 3, 1996, Over stated:

     The purpose of this letter is to offer you an unsolicited 
     proposal . . . .   In return for an agreement from you that the 
     government will exercise the remaining two options of your 
     contract with my firm, I will relocate my warehouse and project 
     management functions off of Ft. Meade and into facilities under 
     my control[[1]] without passing these additional costs I am 
     incurring to the government.  At the same time, I am willing to 
     enter into a discussion of adjusting my coefficients contained in 
     these two remaining option[s] to achieve some reduction in their 
     cost to you."

Declining to accept Over's offer, the agency issued the solicitation 
on July 5, 1996, and, as in Over's current contract, incorporated a 
unit price book (UPB) containing more than 25,000 line items of 
pre-priced construction tasks.[2]  The prices in the UPB are 
calculated to reflect the standard direct labor costs and materials 
for each task, but not the contractor's overhead and profit.  The 
solicitation calls for offerors to propose various fixed coefficients 
reflecting the offerors' overhead and profit; the coefficients will be 
applied to the UPB prices to establish contract prices for the listed 
tasks.[3]  Regarding tasks not listed in the UPB, the solicitation 
references various Means Cost Data publications,[4] from which the 
levels of effort necessary to perform unlisted tasks may be derived, 
stating that contract prices for such non-prepriced items will be 
derived from the Means Cost Data publications, applicable Davis-Bacon 
Act wage rates, and the contractor's coefficients.

The solicitation provides that proposals will first be evaluated for 
technical acceptability, and that award will be made on the basis of 
the technically acceptable proposal offering the best value to the 
government, considering price and past performance, and that price 
will be the most significant factor.  Consistent with the requirements 
of the Federal Acquisition Regulation (FAR)  sec.  15.608(a)(2)(iii) (FAC 
90-31), section M also states that "firms lacking relevant past 
performance history shall receive a neutral evaluation for past 
performance."  

The deadline for submission of proposals was 3 p.m. on August 28, 
1996.  This protest was filed at 10 a.m. on that date.

DISCUSSION

Over first protests that the solicitation violates FAR  sec.  16.504(a)(2) 
which states:  "To ensure that the [indefinite-quantity] contract is 
binding, the minimum quantity must be more than a nominal quantity."  
Although RFP section H.25 states:  "The minimum contract value which 
will be required and paid under this contract is $800,000," Over 
refers to an RFP provision which establishes a nominal value ($0.01) 
as the minimum for any individual delivery order, arguing that this 
provision violates the FAR requirement. 

An indefinite quantity contract is binding only if the buyer agrees to 
purchase a guaranteed minimum quantity of goods or services.  Mason v. 
United States, 
615 F.2d 1343 (Ct. Cl.1980).  However, individual delivery orders 
issued under such a contract do not have to be in some minimum amount 
in order to be binding.  See Sunbelt Properties, Inc., B-249307, Oct. 
30, 1992, 92-2 CPD  para.  309; International Creative and Training, Ltd., 
B-245379, Jan. 6, 1992, 92-1 CPD  para.  26.  Here, there is a guaranteed 
minimum value of $800,000 for the base contract period.  FAR  sec.  
16.504(a)(2) requires no more.

Over next asserts that the solicitation provisions regarding 
non-prepriced items render the procurement defective.  Over complains 
that the nature of non-prepriced work is "unpredictable, unknown and 
risky" and maintains that, due to inclusion of these items, the 
solicitation lacks sufficient certainty for offerors to compete.[5]

The agency first responds that the quantity of non-prepriced work 
contemplated under this solicitation is minimal.  Under Over's current 
contract, non-prepriced tasks have made up approximately 15 percent of 
the total contract value.[6]  The agency explains that these items 
have been added to the UPB in the current solicitation, thereby 
substantially decreasing the level of non-prepriced tasking reasonably 
anticipated.  The agency also notes that, under the terms of the 
solicitation, the contract price for any non-prepriced items will be 
subject to negotiation between the agency and the contractor.  
Specifically, section H.18 of the solicitation provides that the 
contractor will prepare a pricing proposal for non-prepriced tasks 
based on its own inspection of the work site as well as the Means Cost 
data, applicable Davis-Bacon Act wage rates, and its coefficients.  On 
the basis of these facts, the agency maintains that the risk flowing 
from non-prepriced tasks under the solicitation is not excessive.  
 
A solicitation need not be so detailed as to remove every uncertainty 
from the minds of prospective offerors or eliminate every performance 
risk for the contractor.  LBM, Inc., 70 Comp. Gen. 493 (1991), 91-1 
CPD  para.  476.  Bean Dredging Corp., B-239952, Oct. 12, 1990, 90-2 CPD  para.  
286; AAA Eng'g & Drafting, Inc., B-236034, Oct. 31, 1989, 89-2 CPD  para.  
404; I.T.S. Corp., B-228919, Nov. 25, 1987, 87-2 CPD  para.  521.  As risk 
inheres in any contract, offerors are expected to use their 
professional expertise and business judgment in anticipating a variety 
of influences affecting performance costs.  See Custom Envt'l Serv., 
Inc., 70 Comp. Gen. 184 (1991), 91-1 CPD  para.  38; McDermott Shipyards, 
Div. of McDermott, Inc., B-237049, Jan. 29, 1990, 90-1 CPD  para.  121.  

Over's current contract includes similar provisions regarding 
non-prepriced items.  As discussed above, by letter dated July 3, 
1996, Over expressly offered to make certain concessions to the 
agency, including a reduction of its coefficients, if, rather than 
re-competing the requirements, the agency agreed to exercise the 
remaining contract options.  Over does not explain how the nature of 
the non-prepriced work can be so "unpredictable, unknown and risky" as 
to preclude meaningful competition under the protested solicitation 
when it forms a part of a contract that Over is requesting the agency 
to extend--at a reduced price from that currently in effect.  In any 
event, in light of the limited amount of non-prepriced work to be 
performed, along with the fact that such work will be the subject of 
negotiation between the parties, we see no basis to conclude that the 
level of risk in this solicitation is unacceptable.  

Over next challenges a provision in the statement of work (SOW) 
regarding scheduling of work.  Section VI(d) of the SOW provides that, 
prior to award of individual delivery orders, the contractor will 
submit a critical path method (CPM) schedule and states that such 
schedules are generally based on a production rate of 600 square-feet 
per day.  Over complains that this production rate may not be 
reasonable for smaller projects.  

Prior to Over's protest, the agency responded to various requests for 
clarifications, amending the solicitation to incorporate the answers 
provided.  A question regarding the appropriate production rate for 
purposes of creating a schedule was raised and responded to by the 
agency.  Specifically, the agency stated that, while a 600 square-foot 
production rate would normally be applicable to large projects,[7] the 
production rate applied to any given project could vary, depending on 
the facts and circumstances of the project.  

As noted above, an agency need not identify with absolute certainty 
all aspects of contract performance.  LBM, Inc., supra; Bean Dredging 
Corp., supra.  The determination of an agency's minimum requirements 
and the best method of accommodating those requirements are primarily 
within the agency's discretion, and we will not question the exercise 
of that discretion unless the record shows it to be unreasonable.  
CardioMetrix, B-257408, Aug. 3, 1994, 94-2 CPD  para.  57.

Here, again, the provisions regarding the production rate in this 
solicitation are essentially the same as the terms under which Over's 
current contract is being performed.  Again, we are unpersuaded that 
the alleged lack of precision regarding the basis for establishing a 
schedule creates an unacceptable level of risk when Over has 
repeatedly requested that the agency extend its current contract with 
the same provision.   

Over next complains that some of the prices in the UPB for this 
solicitation are different from the prices for similar tasks performed 
under similar Army contracts.[8]  Over asserts that the UPB for this 
solicitation should be revised to reflect the Army price list.

The agency states that it conducted a market survey prior to issuing 
this solicitation but notes that, due to the number of items priced in 
the solicitation, it cannot guarantee that each and every one of the 
25,000 items reflects the most recent cost data.  The agency maintains 
that providing offerors an opportunity to submit coefficients to be 
applied to the prices in the UPB effectively protects the offerors 
from pricing disparities.   

We find no merit in Over's challenge to this solicitation based on the 
fact that the NSA price list is not identical to the Army's price 
list.  Over has questioned approximately 200 of the 25,000 items.  
Further, as the agency notes, the appropriate price for any given item 
will vary based on a variety of every-changing factors.  It is 
precisely this fluctuation that the offerors' proposed coefficients 
are intended to address.  

Finally, Over challenges the solicitation provision regarding the 
evaluation of offerors' past performance.  Over states:  

     "C.W. Over has no idea what the following sentence means:  
     'Vendors lacking relevant past performance history will receive a 
     neutral assessment for past performance.'  How is past 
     performance, the principle evaluation criterion next to price, to 
     be evaluated when a 'neutral' rating can be given no relevant 
     history?"

As the agency points out, FAR  sec.  15.608(a)(2)(iii) provides, "Firms 
lacking relevant past performance history shall receive a neutral 
evaluation for past performance."  The solicitation language, and the 
FAR provision it reflects, clearly provides that proposals submitted 
by offerors lacking relevant past performance history will neither be 
penalized nor credited with regard to the past performance factor.  
See, e.g., Excalibur Systems, Inc., B-272017, July 12, 1996, 96-2 CPD  para.  
13.  

The protest is denied.

Comptroller General 
of the United States
     
1. These were actions the agency had previously sought.

2. As Over explains, "Very few activities involved with construction 
projects are new or experimental.  Most have been repeated countless 
time[s] and the time and level of effort necessary to complete 
individual activit[ies] is a known fact."  

3. Offerors were required to provide co-coefficients for the base year 
and each option year applicable to the following categories of work:  
normal working hours; overtime hours; small requirements; and 
"fly-away services" ( services performed outside a 50-mile radius of 
Fort Meade, Maryland).

4. Section VII of the statement of work referenced the Means 
Facilities Construction Cost Data, 53rd Annual Edition; the Means 
Mechanical Cost Data, 18th Annual Edition; the Means Plumbing Cost 
Data, 18th Annual Edition; and the Means Electrical Cost Data, 18th 
Annual Edition.

5. In pursuing this protest, Over repeatedly refers to Army FAR 
Supplement (AFARS) Subpart 17.91 which governs the Army's use of job 
order contracts, arguing that NSA's solicitation violates the AFARS.  
As the agency points out, NSA is not subject to the AFARS.  
Accordingly, to the extent Over's protest asserts a violation of that 
regulation, it fails to state a valid basis for protest.

6. This amount includes tasking requirements that have been ordered 
repeatedly.  As the agency points out, a task is truly non-prepriced 
only the first time it is ordered.  

7. Section VIII of the SOW specifically identified the characteristics 
of "small requirements."

8. In pursuing this protest, Over complains that NSA refers to the 
contract solicited here as a "delivery order construction contract," 
while the Army and its applicable regulations refer to a substantially 
similar contract as a "job order contract."  We view these arguments 
as extensions of Over's assertions, discussed above, that NSA is 
violating the AFARS.  Since NSA is not bound by the Army's terminology 
or its regulations, we do not consider this issue further.