BNUMBER: B-274629
DATE: December 19, 1996
TITLE: Data Transformation Corporation
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DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:Data Transformation Corporation
File: B-274629
Date:December 19, 1996
Michael R. Lemov, Esq., and Eric J. Marcotte, Esq., Winston & Strawn,
for the protester.
Evelyn S. Tang, Esq., Department of Justice, for the agency.
Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. In determining whether a task order under a contract was issued
properly, the General Accounting Office (GAO) will look to whether
there is a material difference between the contract, as modified by
the task order, and the original contract. In determining the
materiality of a modification, the GAO considers factors such as the
extent of any changes in the type of work, performance period and
costs between the contract as awarded and as modified, as well as
whether the original contract solicitation adequately advised offerors
of the potential for the type of task order issued.
2. The General Accounting Office will consider whether the agency
itself has historically procured allegedly "beyond-the-scope" task
order services under a separate and independent contract, and whether
the agency has previously awarded the requirement on a basis of a
different statement of work, such that it appears that the agency
itself has viewed the task order services as separable and essentially
different in nature from the contract under which the task order was
issued.
DECISION
Data Transformation Corporation (DTC) protests the Department of
Justice's (DOJ) decision to issue a task order to CACI, Inc. under
contract No. 3C-G-ENR-0051, for services to operate DOJ's Nationwide
Central Intake Facility (NCIF). DTC, which had been operating the
NCIF for DOJ since November 1993, contends that the task order is
beyond the scope of CACI's contract and that DOJ should have conducted
a competition for the acquisition.
We sustain the protest.
THE DTC CONTRACT
Request for proposals (RFP) No. JHJMD-92-R-0059 was issued on August
31, 1992 and awarded to DTC on November 18, 1993. Section C of the
RFP, entitled "Nationwide Central Intake Facility Statement of Work,"
advised offerors of the historical background and objective of the
RFP, which follows.
The RFP stated that it is the policy of the government to make every
effort to collect debts owed to the United States. Such debts arise
under a myriad of federal programs, including direct, guaranteed or
insured student loans made by the Department of Education, loans for
veterans by the Department of Veterans Affairs, loans to farmers,
small business loans made by the Small Business Administration, and
many other programs. In fact, the RFP stated that "almost every
[f]ederal agency has some program for lending money or guaranteeing or
insuring loans to citizens for an infinite variety of purposes."
The RFP also stated that when these loans or other types of debt go
into default, creditor agencies, after their own efforts to collect,
refer the debts to DOJ for litigation and judgment "pursuant to the
Federal Debt Collection Procedures Act of 1990, 28 U.S.C. sec. 3001 et
seq." Before 1986, these debts were referred directly to the United
States Attorney's Offices (USAOs) in whose federal judicial districts
the debtors resided. The basic problem with this procedure was that
all federal debts were coming to DOJ "through 94 separate 'doors'"
(the 94 USAOs), making it very difficult for DOJ to keep accurate and
reliable data on the number and dollar value of debts. In 1986, the
Congress enacted the Federal Debt Recovery Act, 31 U.S.C. sec. 3718(b)
(1994), which authorized DOJ to "run a pilot project of contracting
with lawyers and law firms in the private sector to help the [USAOs]
handle the litigation to collect delinquent debts." The Office of
Debt Collection Management (DCM), the organization within DOJ charged
with implementing the pilot project, decided to require that all debts
be referred for litigation through a single "door," a Central Intake
Facility (CIF), which would then refer the debts to the USAOs and
private counsel in the districts. The concept proved so successful
that it was expanded into the existing NCIF, which began receiving all
civil debts being referred to all 94 USAOs and all debts in
bankruptcy where the creditor agencies wanted to file Proofs of
Claims.[1] The RFP stated DOJ's objective as follows:
"The purpose of this contract is to establish and operate a NCIF
to receive, process, track and provide litigative support for the
DOJ debt collection activities and perform other related tasks as
discussed herein. In general, the DOJ requires that the NCIF
have as its centerpiece a computer with a data base containing
information about debts owed to the United States that have been
referred to the DOJ for litigation, with the capability to
communicate electronically with all 94 USAOs, the Department's
legal divisions, any private counsel under contract with the
Department to litigate Federal debts, and Justice's various
client agencies."[2]
The RFP required the successful contractor to provide specific staff
positions, including NCIF Project Manager; NCIF Operations Manager;
Computer Operations Manager; Manager of Financial Operations; Training
Manager; Senior Systems Analyst; Programmer: Management Analyst; Data
Entry Technician as well as other personnel. The RFP specified the
required qualifications for each position. The RFP also required the
successful contractor to produce detailed and specialized management
reports relating to the debt collection effort.
The contract awarded to DTC included a base period and four option
years. DOJ exercised options for fiscal year 1995 and 1996. However,
on August 16, 1996, just before the expiration of the option year for
fiscal year 1996, DOJ notified DTC that it would not exercise the
option for fiscal year 1997. According to DOJ, it also informed DTC
that the agency "was planning to conduct a full and open competition
for operation of the NCIF within the next year."[3] In the meantime,
DOJ, having failed to exercise DTC's option and not having conducted a
competitive procurement to replace DTC, issued a task order under
CACI's contract, which contained the following "[s]cope of [w]ork":
"The contractor shall provide all professional, technical and
clerical services, including supervision and labor, required to
perform the tasks specified herein, which shall include: (a)
complete processing of all cases referred to the Department of
Justice (DOJ) for litigation, to include receipt, entry and
forwarding to the appropriate judicial districts; (b) processing
of any payments (e.g., cash, checks and other negotiable
instruments such as money orders, cashiers checks and electronic
fund transfers) whether received directly or through physical or
electronic transmission of data from a lock box facility; (c)
communication of deposit information to the Debt Accounting
Operations Group (DOAG) for subsequent disbursement to the
referring agencies; (d) performing monthly quality control
reviews over all areas of data entry; (e) maintaining proper
records, including reconciliations, according to all applicable
Federal Government standards; (f) providing reports to the
government; (g) providing training and help-support for all users
of the NCIF system(s); and (h) performing, on an as needed
basis, tasks related to DOJ's debt collection activities. . . ."
Upon learning that a task order would be issued by DOJ under CACI's
contract, DTC filed this protest with our Office.
THE CACI CONTRACT
The RFP (No. JSNER-92-R-0027) that resulted in a contract award to
CACI was issued on October 26, 1992 for litigation support services
for DOJ's Environment and Natural Resources Division (ENRD). The
procurement was conducted within approximately the same timeframe as
the NCIF procurement. The RFP stated that DOJ has litigation support
programs in three of its litigating divisions, Antitrust, Civil and
ENRD. The RFP stated that "[a]ll three programs consist of government
specialists who define case/project-specific requirements and then
manage contractor-provided case/project support using contracts
designed for that division's unique mission."[4] ENRD, formerly known
as the Lands Division, was created on November 16, 1909, as the Public
Land Division. For the first 50 years, the Division's litigation was
primarily concerned with federal lands, water and Indian disputes.
ENRD's responsibilities grew to use and development of the nation's
natural resources and public lands, wildlife protection, Indian rights
and claims, cleanup of the nation's hazardous waste sites, and defense
of environmental challenges to government programs and activities.
The client agencies served by ENRD include the Departments of
Agriculture, Commerce, Defense, Energy, the Interior, and
Transportation, as well as the Environmental Protection Agency. The
RFP stated that the objective of the contract was to obtain
nonpersonal professional and other services and products to "support
ENRD case managers in the whole range of litigation support
activities," such as document acquisition; database creation; database
utilization; specialized services in support of litigation; pre-trial
and trial support; administrative systems support; and management and
control. The "[s]cope of [c]ontract" was as follows:
"This contract will be utilized to provide Litigation Support
Services[5] to the Department of Justice and other Federal
agencies on an indefinite delivery, indefinite quantity, task
order basis. Individual task orders issued under this contract
may support any DOJ organization or Federal agency on a local
and/or nationwide basis. This contract will also be utilized to
support case-related administrative functions."
The RFP further explained that ENRD "is organized into nine litigating
sections, each specializing in different areas of the law and the
environment." In addition to the litigating divisions, "an Executive
Officer performs administrative support functions for the Division."
Organizational charts for ENRD were included in the RFP. There was no
mention in the ENRD RFP (or the ENRD Acquisition Plan) of the
possibility or potential for providing NCIF (that is, nationwide debt
collection) support services.
ANALYSIS
The protester argues, for a variety of reasons, that once the agency
decided not to exercise the option, it was required to conduct a new
procurement for the NCIF services. In support of its actions, the
agency argues that the task order issued to CACI was within the scope
of its contract because the CACI RFP "[s]cope of [c]ontract"
provision, quoted above, permitted support to "any DOJ organization or
Federal agency on a local and/or nationwide basis." The agency also
notes that the general requirements under the CACI RFP provided for
"Litigation Support Services for [ENRD], other Department of Justice
(DOJ) components, and other Federal agencies." The agency also argues
that the litigation services support contract consists of "generic
work," such as document acquisition, database creation, database
design and manuals, data conversion, data entry, pre-trial and trial
support, administrative systems support and management and control
which is the same "type of work" as required under the NCIF effort.
In other words, the agency argues that both involve "litigation and
support functions" such as data entry and database creation.
Additionally, the agency argues that the CACI solicitation advised
offerors that task orders could be issued for "extremely broad range
of project requirements." Finally, the agency states that the task
order is approximately $2.1 million, which is well below the maximum
order limitation of the CACI contract.[6] For the reasons discussed
below, we reject the agency's arguments.
In determining whether a task order is proper, we look to whether it
is beyond the scope of the original contract. Indian and Native Am.
Employment and Training Coalition, 64 Comp. Gen. 460 (1985), 85-1 CPD para.
432. We consider factors such as the extent of any changes in the
type of work, performance period and costs between the contract as
awarded and as modified by the task orders, as well as whether the
original contract solicitation adequately advised offerors of the
potential for the type of task order issued. See Dynamac Corp.,
B-252800, July 19, 1993, 93-2 CPD para. 37. Additionally, we consider
whether the agency itself has historically procured the task order
services under a separate contract, previously awarded the requirement
on a basis of a different statement of work, such that it appears that
the agency itself has viewed the task order services as separable and
essentially different in nature. See Neil R. Gross & Co., Inc., 69
Comp. Gen. 292 (1990), 90-1 CPD para. 212.
In this case, our review of the ENRD litigation support services
contract finds no mention of the possibility of performing the
services necessary to operate the NCIF. While, as the agency argues,
the ENRD litigation support services contract is intended to provide a
general range of litigation support services, we think the scope of
those services is reasonably limited to serving the purpose for which
the contract was awarded. The ENRD contract defines that purpose as
helping "attorneys acquire, screen, analyze and organize evidentiary
and other documents to prepare for and to conduct trials" and using
technology to ensure "litigation materials are effectively organized
so that the litigating attorney can rapidly locate and use information
to win lawsuits." We do not believe that a litigation support
contract for one specific division of DOJ, engaged generally in the
litigation of environmental and Indian disputes, contemplated taking
over the entire nationwide debt collection efforts of the federal
government; certainly, there was nothing in the CACI RFP which
reasonably advised offerors of this possibility.[7] Our views that
the operation of the NCIF was beyond the contemplation of offerors
when the ENRD litigation support contract was awarded is further
supported by the fact that DOJ conducted two separate concurrent
procurements for the two requirements and intends to again conduct a
separate procurement for the NCIF operation within the next 12 months.
We conclude that the agency's issuance of the task order to CACI was
an improper sole source award. We therefore sustain the protest.
We recommend that the agency expeditiously conduct a competitive
procurement to meet its requirements for the operation of the NCIF in
the shortest practicable time. We further recommend that upon
selection of the successful offeror, the agency terminate the CACI
task order. Additionally, we recommend that the protester be
reimbursed its costs of filing and pursuing the protest, including
reasonable attorneys' fees. Bid Protest Regulations, sec. 21.8(d)(1), 61
Fed. Reg. 39039, 39046 (1996) (to be codified at 4 C.F.R. sec.
21.8(d)(1)). The protester should submit its certified claim for
costs to the contracting agency within 60 days of receiving this
decision. Bid Protest Regulations, 61 Fed. Reg. supra (to be codified
at 4 C.F.R. sec. 21.8(f)(1)).
The protest is sustained.
Comptroller General
of the United States
1. Debt referrals to DOJ in 1991 alone approached half a billion
dollars with a total inventory of 50,355 pending civil debts valued at
$1.3 billion.
2. DOJ requested a Delegation of Procurement Authority (DPA) from the
General Services Administration (GSA) to conduct the procurement. The
DPA request emphasized that the sole purpose of the procurement was to
acquire services necessary to operate the NCIF and that DOJ would
conduct the procurement under full and open competition.
3. The agency states that the DTC contract called for implementation
of an "off-the-shelf" automated debt tracking and litigation support
system as proposed by DTC. The delivery and implementation of the
software are not a part of the task order that was issued to CACI and
are not a part of this protest. The agency notes that there were
"multiple delays" in implementation of the automated systems which was
not "off-the-shelf" as represented by DTC. DTC delivered the software
in May 1996 and acceptance testing is currently underway. As the
protester states, however, the actual operation of the NCIF, which is
the subject of the task order issued to CACI, was the most significant
portion of DTC's contract from a cost standpoint.
4. DOJ's Acquisition Plan noted that "each litigating component [of
DOJ] has tailored its contract requirements to meet the specific needs
of [that] component."
5. The agency's Acquisition Plan explained the purpose of litigation
support as consisting of "a wide range of services and products that
help attorneys acquire, screen, analyze and organize evidentiary and
other documents to prepare for and to conduct trials. Through the use
of computer data processing, microfilming, document scanning/imaging
and other technologies, litigation materials are effectively organized
so that the litigating attorney can rapidly locate and use information
to win lawsuits."
6. CACI's contract was valued at $12.1 million in fiscal year 1996 and
$14 million in fiscal year 1995.
7. Congress recently codified authorization for the use of task and
delivery order contracts in the Federal Acquisition Streamlining Act
(FASA) of 1994, Pub. L. No. 103-355, sec. 1004, 1054, 108 Stat. 3243,
3249, 3261 (1994). Although the CACI contract predates the effective
date of FASA, the Senate Governmental Affairs Committee Report on FASA
expressed concern about "indiscriminate use of task order contracts
for broad categories of ill-defined services." S. Rep. No. 103-258,
103d Cong., 2d Sess. 15 (1994); see 41 U.S.C. sec. 253h(b).