BNUMBER:  B-277684; B-277685 
DATE:  November 4, 1997
TITLE: Marvin J. Perry & Associates, B-277684; B-277685, November 4,
1997
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Matter of:Marvin J. Perry & Associates

File:     B-277684; B-277685

Date:November 4, 1997

Malcolm D. Wilson for the protester.
Georgia Vlahos, Esq., and Kenneth J. Densmore, Esq., Department of the 
Navy, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Modifications of orders under General Services Administration Federal 
Supply Schedule for red oak sleeping room furniture to allow a change 
in the type of wood to ash, which is less expensive than red oak, 
materially changed the nature of the orders from those originally 
issued and thereby prejudiced the protester, a competing vendor.

DECISION

Marvin J. Perry & Associates protests the modifications of delivery 
order No. GS-27-F-028B and purchase order No. N00210-96-M-0566, issued 
by the Department of the Navy, Naval Training Center, Great Lakes, 
Illinois, to DCI for red oak sleeping room furniture.  Perry 
essentially contends that the modifications were beyond the scope of 
these orders.

We sustain the protest.

This procurement was for 563 10-piece sets of red oak sleeping room 
furniture to furnish a bachelor enlisted quarters (BEQ) that was under 
construction.  Prior to the procurement, the Navy contracted with an 
architectural firm to design the interior space for the project.  The 
firm recommended Perry as the vendor holding a General Services 
Administration (GSA) Federal Supply Schedule (FSS) contract offering 
the lowest-priced red oak furniture that met the functional needs of 
the agency with respect to aesthetics and quality.[1]  In order to 
ensure that Perry's products represented the best value, the Navy 
decided to solicit quotes from those vendors with similar products on 
the FSS.  

Only 9 of the 10 pieces of each set could be obtained from the FSS, 
and on April 1, 1996, the Navy solicited quotes for these 9 pieces of 
red oak furniture under request for quotations (RFQ) No. 
N00210-96-Q-1496.  On that same date, quotes were solicited for the 
remaining piece--the red oak footboard to the bed--under RFQ No. 
N00210-96-Q-1497.[2]
  
The Navy received eight quotes for the nine pieces of furniture and 
six quotes for the footboard by the May 30 closing dates.  DCI 
submitted the lowest quote of  $557,127.91 for the nine items; Perry 
was next low with a quote of $572,709.  Perry submitted the lowest 
quote of $18,016 for the footboard; DCI submitted the next lowest 
quote of $19,789.45.  Since DCI's quotes reflected the lowest total 
price, the Navy issued the delivery order from the FSS for the nine 
pieces to DCI on June 11 and the purchase order for the footboard to 
DCI on June 18.  The original delivery date for the furniture was 
scheduled for September 30, but several construction delays resulted 
in the delivery date being pushed back to June 9, 1997.

In May 1997, DCI advised the Navy that its supplier had mistakenly 
delivered ash instead of red oak.  Because of this, DCI proposed that 
the Navy either accept furniture made with ash at the same price or 
postpone the delivery date.  In support of accepting ash furniture, 
DCI provided the Navy with samples of ash stained to match the color 
of red oak.  After comparing the samples with the red oak furniture 
already in the BEQ, the Navy determined that the ash furniture was an 
acceptable substitute.  The parties agreed to the substitution on May 
19.  The Navy accepted delivery of the ash furniture in June.

In late June, Perry learned that the Navy had permitted DCI to 
substitute ash furniture for red oak furniture.  Perry initially 
sought an explanation from the agency by letter dated June 30, in 
which it complained that changing the wood from red oak to ash would 
be unfair to those quoters who based their quotes on providing 
furniture made from red oak, because ash is a lower grade and lower 
priced wood, and that if "there was no authorization" to change the 
wood, the Navy should reject DCI's furniture and make award to the 
next low quoter--Perry.  The Navy responded by letter dated July 21 
(received by the protester on July 25) asserting that the change was 
insignificant.  On August 4, Perry protested the Navy's actions to our 
Office. 

The Navy initially argues that the August 4 protest is untimely 
because it was filed more than 10 working days after late June when 
the protester knew of the basis of protest.  We disagree.  Although 
the protester's June 30 letter to the agency was not expressly 
characterized as a protest, we will treat it as an agency-level 
protest because it clearly conveyed an expression of dissatisfaction 
and a request for corrective action.   See Dynamac Corp., B-252800, 
July 19, 1993, 93-2 CPD  para.  37 at 3; American Material Handling, Inc., 
B-250936, Mar. 1, 1993, 93-1 CPD  para.  183 at 2-3.  Since the August 4 
protest was filed by Perry within 10 days of its receipt of the 
agency's response to its June 30 letter, we consider the protest to be 
timely filed with our Office.  4 C.F.R.  sec.  21.2(a)(3) (1997).

The agency next argues that the protest involves a matter of contract 
administration which is beyond the purview of our bid protest 
jurisdiction.  See 4 C.F.R.  sec.  21.5(a).  While this is generally true, 
we will consider a protest that a modification to an existing contract 
is beyond the scope of that contract, changing the nature of the 
contract originally awarded.  See Indian and Native Am. Employment and 
Training Coalition, 64 Comp. Gen. 460 (1985), 85-1 CPD  para.  432; Dynamac 
Corp., supra, at 4.[3]  In determining whether a modification to a 
contract is within the scope of the contract, we look to whether there 
is a material difference between the contract, as modified, and the 
original contract, considering such factors as the extent of any 
changes in the type of work, performance period, and costs between the 
modification and the original contract, as well as whether the 
original solicitation adequately advised offerors of the potential for 
the change or whether the change was the type that reasonably would 
have been anticipated, and whether the modification materially changed 
the field of competition for the requirement.  Avtron Mfg., Inc., 67 
Comp. Gen. 404, 406-407 (1988), 88-1 CPD  para.  458 at 4; Dynamac Corp., 
supra, at 4.

As indicated above, Perry advises that ash is materially different 
from red oak in terms of cost and quality.  For example, Perry asserts 
that its supplier could have obtained ash wood in its raw form for a 
cost at least 40 percent cheaper than red oak.[4]  Perry also asserts 
that it would have been able to reduce its bid price by $47,885 (which 
would have made its quote lower than DCI's), if it had known that ash 
was an acceptable alternative.  In addition, Perry advises that while 
ash may appear similar in terms of radial grain patterns and cell 
growth elongation, the difference between the two woods is in hardness 
and density, and that red oak is superior to ash for purposes of 
joinery, thereby resulting in more structurally sound pieces of 
furniture and a greater long-term value to the user.                                  
The Navy does not dispute that ash is inferior in quality to oak and 
can be obtained at a lower cost than red oak.  The Navy does assert 
that it contacted two local lumberyards, who indicated that there 
would be only a small price differential (approximately 1 to 5 
percent) between the cost of ash and red oak because ash, although 
cheaper, is not as readily available as red oak in the quantities 
needed to fill large orders.  However, the Navy has presented no basis 
for us to question Perry's documented contention that it and other FSS 
vendors in the furniture business could have obtained ash at a 
substantial savings over red oak, and that this savings would be 
translated into lower prices.  Further, there is no basis to regard 
the change as one that could reasonably have been anticipated by Perry 
or the other FSS vendors that submitted quotes for red oak furniture.  

In sum, we think that the original purpose of the orders was so 
substantially changed by the modification that the original orders and 
the modified orders are essentially different.  Even though the record 
does not show that the total cost savings of the modifications to the 
originally placed orders would be massive, the record does evidence 
that if quotes had been obtained from the FSS vendors on the basis of 
ash rather than red oak furniture, prices may have been significantly 
lower than the award prices, and that a different vendor may well have 
been selected.  See Avtron Mfg., Inc., supra, at 5.  

The Navy, nevertheless, argues that it was not prohibited from 
modifying the order, irrespective of the nature of the change, or 
required to solicit the other FSS vendors, because the procurement was 
conducted under the FSS program.  In this regard, FAR  sec.  8.404(a) 
provides in pertinent part:

     When placing orders under a [FSS], ordering activities need not 
     seek further competition, synopsize the requirement, make a 
     separate determination of fair and reasonable pricing, or 
     consider small business set-asides . . . .

The Navy further asserts that, unlike an invitation for bids or 
request for proposals, a delivery order need not conform to every 
detail of the RFQ, which is issued primarily for informational 
purposes.  The Navy argues that the RFQ was issued only to identify 
the FSS vendor meeting its needs at the lowest cost and that having 
done so, the agency was not prohibited from changing the requirement 
in issuing its final delivery order since it could have simply placed 
the order with the selected vendor without issuing RFQs.  We disagree.

Although the Navy conducted this procurement under the FSS program, it 
elected to solicit competitive quotes from vendors on the FSS and it 
made award to DCI, the vendor with the lowest quote.  Having elected 
to hold a competition in order to ensure that it received the 
lowest-priced items, the Navy was obligated to ensure that the 
competition was conducted fairly; the fact that a requirement is 
fulfilled through the FSS does not exempt an agency from treating 
vendors consistent with the concern for a fair and equitable 
competition that is inherent in any procurement.  See Haworth, Inc.; 
Knoll N. Am., Inc., 73 Comp. Gen. 283, 286-287 (1994), 94-2 CPD  para.  98 
at 5-6; SMS Sys. Maintenance Servs., Inc., B-270816, Apr. 29, 1996, 
96-1 CPD  para.  212 at 4-5; Dictaphone Corp., B-254920.2, Feb. 7, 1994, 
94-1 CPD  para.  75 at 3.  Here, in order to fulfill its obligation to allow 
vendors to compete on a fair and equal basis as well as to satisfy 
itself that it received the best value (in this case lowest price), we 
think that the Navy was required to give the competing vendors an 
opportunity to submit quotes for supplying furniture made from ash 
instead of simply modifying DCI's orders in a manner that exceeded the 
scope of the contracts and the original competition.[5]  

Because the furniture under the orders have already been delivered, 
corrective action is not practicable.  We recommend that the protester 
be reimbursed its costs of filing and pursuing the protest, including 
reasonable attorneys' fees.  4 C.F.R.  sec.  21.8(d)(1).  The protester 
should submit its certified claim for such costs, detailing the time 
expended and costs incurred, directly to the contracting agency within 
60 days of receiving this decision.  4 C.F.R.  sec.  21.8(f)(1).

The protest is sustained.

Comptroller General
of the United States 
   
1. The FSS program managed by GSA provides agencies with a simplified 
process for obtaining commonly used supplies and services at prices 
associated with volume buying.  Federal Acquisition Regulation  sec.  
8.401(a).

2. Because the footboard was required to match the headboard, the RFQ 
for the footboard was distributed only to those FSS vendors solicited 
for the other furniture pieces.

3. While the cases cited here arose in the context of contracts rather 
than FSS orders, we believe, as explained below, that the principle 
they stand for holds for competed FSS orders as well.

4. To bolster its claim, the protester offers a copy of the Weekly 
Hardwood Review that reflects that at the time the orders were awarded 
ash sold for $525 per thousand board feet (MBF), while red oak sold 
for $855 MBF.

5. By not issuing revised RFQs or checking other vendors' FSS prices 
for ash furniture, the agency did not ensure that it received the best 
price for the ash furniture, which was the stated purpose for issuing 
the RFQs in the first place.