BNUMBER:  B-276988; B-276988.2 
DATE:  August 18, 1997
TITLE: Exide Corporation, B-276988; B-276988.2, August 18, 1997
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Matter of:Exide Corporation

File:     B-276988; B-276988.2

Date:August 18, 1997

James J. McCullough, Esq., Deneen J. Melander, Esq., and Catherine E. 
Pollack, Esq., Fried, Frank, Harris, Shriver & Jacobson, for the 
protester.
John S. Pachter, Esq., Jonathan D. Shaffer, Esq., and Eun K. Chung, 
Esq., and Christina M. Pirrello, Esq., Smith, Pachter, McWhorter & 
D'Ambrosio, for East Penn Manufacturing Co., Inc., the intervenor.
Vera Meza, Esq., and Wendy S. Saigh, Esq., Department of the Army, for 
the agency.
Henry Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Delivery order issued under an existing requirements contract for a 
quantity of batteries in excess of the maximum order limitation (MOL), 
and to be delivered after the expiration of the contract, is not 
beyond the scope of the contract where the contract permits orders in 
excess of the MOL, the total quantity ordered under the contract does 
not significantly exceed the estimated quantity, and the contract 
provides for delivery after the contract's expiration date.

DECISION

Exide Corporation protests delivery order No. 0037, issued by the 
Department of the Army, Tank-automotive and Armaments Command (TACOM), 
to East Penn Manufacturing Co., Inc. under East Penn's existing 
requirements contract No. DAAE07-92-D-J011, for dry-charged batteries.  
Exide alleges that the delivery order is beyond the scope of East 
Penn's contract.

We deny the protest.

The contract at issue in this protest was competed under request for 
proposals (RFP) No. DAAE07-92-R-S067 using full and open competition.  
The RFP contemplated the award of a 5-year requirements contract for 
three types of dry-charged batteries (2HN, 4HN, and 6TL).  Both Exide 
and East Penn submitted proposals in response to the RFP and 
participated in negotiations with the Army.  The Army awarded the 
contract to East Penn on May 12, 1992.  The contract stated an 
expiration date of May 11, 1997.  On July 23, 1996, the contract was 
modified by deleting the 6TL battery and replacing it with the 6TLFP 
battery at a unit price of $68.04.[1]

The solicitation/contract stated that the estimated total requirement 
for the 6TL/6TLFP batteries was 1,134,000 units.  It also stated that 
the agency expected individual delivery orders to be for quantities of 
one quarter of the annual requirement,[2] and stated the minimum and 
maximum order quantities between which the agency was required to 
place, and East Penn was required to honor, an order.  The 
solicitation/contract stated that no order would be issued for 
quantities greater than the maximum order limitation (MOL)--which was 
100,000 units for 6TLFP batteries--with the following exception:  

     Notwithstanding [the MOL restriction] the Contractor shall honor 
     any order exceeding the [MOL] unless that order (or orders) is 
     returned to the ordering office within -5- days after issuance, 
     with written notice stating the Contractor's intent not to ship 
     the item (or items) called for and the reasons.  Upon receiving 
     this notice, the Government may acquire the supplies or services 
     from another source.  The Government is not obligated to issue 
     orders under this contract for any quantity exceeding 310,000 for 
     [6TLFP batteries] during any single contract year.

Section H-2 stated that delivery orders may be issued from the date of 
contract through 5 years after date of award.  Section H-4 of the 
solicitation contract stated:

     (f) Any order issued during the effective period of this contract 
     and not completed within that period shall be completed by the 
     Contractor within the time specified in the order. . . .

The contract's delivery terms called for delivery to begin 150 days 
from the date of the delivery order and, in the case of 6TL/6TLFP 
batteries, delivery was to continue at the rate of 20,000 units per 
month until the order was completed.

During the course of East Penn's contract, the Army determined that it 
would shift from using the 6TLFP battery to the 6TLMF battery--a 
refined version of the 6TL/6TLFP battery.  On February 27, 1997, the 
Army issued a solicitation for proposals to supply 6TLMF batteries.[3]  
A Supply Control Study, dated March 26, 1997, determined that the 
agency will require 350,229 dry-charged 6TLFP batteries prior to the 
delivery of the new 6TLMF batteries.  The study recommended filling 
this purchase requirement with an order under the East Penn contract 
for the total amount that current funding would permit--that being 
209,140 batteries--and soliciting for a new contract for the remaining 
requirements;[4] the Army is proceeding with such a solicitation under 
full and open competition procedures.

On April 10, 1997, Exide submitted an unsolicited proposal to supply 
6TLFP batteries at a unit price lower than that in East Penn's 
contract.[5]  The Army rejected that proposal.

On April 30, 1997, the Army issued delivery order 0037 under East 
Penn's contract for 209,140 6TLFP batteries with deliveries beginning 
on September 30, 1997, and ending on July 31, 1998.[6]  This protest 
followed.

Exide contends that the delivery order is beyond the scope of East 
Penn's contract allegedly because the order was prohibited under the 
terms of the contract, the order was for a quantity far in excess of 
what offerors could have contemplated from the terms of the contract 
as indicated by the MOL, the order resulted in a substantial increase 
of the contract's total estimated quantity of 6TLFP batteries, and the 
order extended the performance period beyond the May 11, 1997, 
expiration date of the contract.  We disagree.

Although the issuance of a delivery order under an existing contract 
is generally a matter of contract administration and not for 
consideration by our Office, 4 C.F.R.  sec.  21.5(a) (1997), we will 
consider a protest alleging that a delivery order is beyond the scope 
of the contract, and thus modifies the contract, to the extent that 
the work covered by the order would be subject to requirements for 
competition absent a valid sole source determination.  Astronautics 
Corp. Of Am., 70 Comp. Gen. 554, 556 (1991), 91-1 CPD  para.  531 at 4.  In 
determining whether a delivery order issued under an existing contract 
is beyond the contract's scope of work, we look to whether there is a 
material difference between the contract, as modified by the delivery 
order, and the original contract.  Lockheed Martin Fairchild Sys., 
B-275034, Jan. 17, 1997, 97-1 CPD  para.  28 at 4.  As to the materiality of 
a modification, 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 delivery order, as well as whether 
the original contract solicitation adequately advised offerors of the 
potential for the type of delivery order issued.  Id. at 4-5.

Here, the delivery order was issued prior to the expiration of the 
contract, and by its terms neither extended the expiration date of the 
contract, nor modified the type or price of batteries ordered under 
the contract.  

While it is true that this order was for quantities in excess of the 
MOL stated in the contract, the order was not beyond the scope of the 
contract.  In this regard, the terms of the solicitation/contract 
stated an exception to the MOL which permitted the agency to issue 
such an order with the provision that the contractor could refuse it.  
This exception gives the agency great discretion in determining 
whether to place such orders under the contract.  Mills Mfg. 
Corp.--Recon., B-250214.2, Mar. 16, 1993, 93-1 CPD  para.  235 at 3.  Under 
the circumstances, the Army's decision to fill its purchase 
requirements under the East Penn contract was thus proper, and East 
Penn accepted and was bound by the delivery order by not returning it 
within 5 days of issuance.

Moreover, the total quantity (including the protested quantity) of 
6TL/6TLFP batteries ordered over the life of the contract was 
1,272,966 units--within 13 percent of the stated estimated quantity.  
This increase from the estimate is not significant in terms of the 
scope of the contract, particularly given that the character of the 
goods ordered did not change.  See Caltech Serv. Corp., B-240726.6, 
Jan. 22, 1992, 92-1 CPD  para.  94 at 5 (30 percent increase over estimate 
is not so significant as to constitute a change beyond the scope of 
the contract); Marine Logistics Corp., B-218150, May 30, 1985, 85-1 
CPD  para.  614 at 5 (25 percent increase is not significant).  Although the 
contract did indicate that the agency expected to place delivery 
orders for smaller quantities than was done here, we think that 
offerors under the solicitation for this contract were reasonably 
apprised that an order for the quantity at issue here was possible.  
This is so because the contract permitted orders in excess of the MOL 
and the total quantity ordered under this contract did not 
significantly exceed the total estimated quantity.

Nor was the performance period modified by this delivery order.  The 
contract contemplated delivery of batteries beyond the expiration date 
of the contract because it explicitly provided for delivery orders 
allowing the completion of an order after the expiration date of the 
contract where such order could not be completed prior to that date.  
It also stated that delivery would begin 150 days after the date of 
the delivery order and continue at the rate of 20,000 6TL/6TLFP 
batteries per month thereafter until the total quantity ordered is 
delivered.  The delivery order issued here stated terms for delivery 
after the contract expiration date which are consistent with that 
provision.  Thus, this delivery order does not modify the performance 
period contemplated by the solicitation contract.[7]

We thus conclude that the delivery order neither changed the nature or 
purpose of East Penn's contract, nor went beyond the potential type 
which offerors reasonably could have anticipated from the terms of the 
contract solicitation.  Therefore, the issuance of the delivery order 
was proper.  See Lockheed Martin Fairchild Sys., supra, at 5.

The protest is denied.

Comptroller General
of the United States

1. This modification resulted from testing of prematurely expired 6TL 
batteries.  These tests concluded that battery life could be extended 
by changing the calcium and antimony plates to all calcium plates and 
including a "fill pack" container of special battery acid with each 
battery.  The modification was not protested and is not at issue in 
the present protest.  This modification was issued in conjunction with 
a provisional purchase description, effective only for the duration of 
the contract, which East Penn's 6TLFP battery satisfied through 
informal first article testing.  The agency also prepared the purchase 
description to be applied to all future solicitations which required 
all contractors, including East Penn, to satisfy formal first article 
test requirements.

2. The estimated annual quantity of 6TLFP batteries for the final year 
of the contract was 227,000 units, one quarter of which is 56,750 
units.

3. The Army anticipated a contract award under this solicitation by 
July 31, 1997, with first article testing projected to take 390 days 
and delivery expected to commence on October 31, 1998.  The 
responsibility for procuring the 6TLMF batteries was subsequently 
shifted from TACOM to the Defense Supply Center Richmond (DSCR), which 
resulted in cancellation of TACOM's 6TLMF solicitation so that DSCR 
could issue a solicitation for that requirement.  This shift in 
procurement responsibility resulted in a revised projected delivery 
date of March 31, 1999, for 6TLMF batteries.

4. The study suggested an alternative recommendation of ordering the 
entire 350,229 batteries under East Penn's contract if current funding 
permitted.

5. The proposal requested modified first article testing which the 
agency considered unacceptable.

6. The delivery order also ordered 3,508 4HN batteries with delivery 
dates extending through November 30, 1997, and 18,308 2HN batteries 
with delivery dates extending through September 30, 1998.  Exide does 
not protest this portion of the order.

7. Because the order was properly placed under the contract, the fact 
that these batteries will be delivered and used after the contract's 
expiration date is essentially irrelevant to whether the order is 
within the scope of the contract.