BNUMBER:  B-277979, December 9, 1997) 
DATE:  January 26, 1998
TITLE: Letters to the Air Force and Army concerning Valenzuela
Engineer, B-277979, December 9, 1997), January 26, 1998
**********************************************************************

Subject:   Letters to the Air Force and Army concerning Valenzuela 
Engineering, Inc. (B-277979, December 9, 1997)

File:        B-277979

Date:        January 26, 1998

B-277979

January 26, 1998

The Honorable F. Whitten Peters
Acting Secretary of the Air Force

Dear Mr. Secretary:

This is to bring to your attention matters that we learned of during 
consideration of a recent protest.  By decision of December 9, 1997, 
copy enclosed, we dismissed as untimely the protest filed by 
Valenzuela Engineering, Inc., alleging that the Department of the Air 
Force and the Army Corps of Engineers failed to comply with certain 
provisions of the Federal Acquisition Regulation in the acquisition of 
operation and maintenance services at the Mike O'Callaghan Federal 
Hospital at Nellis Air Force Base, Nevada.  The services were ordered 
under an indefinite delivery, indefinite quantity (IDIQ) contract 
between the Army Engineering and Support Center (CEHNC), Huntsville, 
Alabama, and Syska & Hennessy, Inc.

While we dismissed the protest as untimely, our review indicated that 
two statutory violations occurred during the procurement.  First, the 
Air Force failed to coordinate with the Small Business Administration 
(SBA) the removal of this requirement from the small business program 
and failed to consider this requirement for a possible small business 
set-aside.  These failures violate the Small Business Act, 15 U.S.C.  sec.  
644(a) (1994), and implementing regulations.  The fact that the 
purchase was being made through an Economy Act transaction did not 
exempt the agency from complying with the Act.  Second, the statement 
of work in Syska & Hennessy's Army contract was so broad as to violate 
the Competition in Contracting Act of 1984 (CICA).  Because the 
Economy Act generally permits agencies to procure services under 
another agency's contract without full and open competition only where 
that contract was awarded in compliance with CICA, the Air Force acted 
improperly in using the Army contract here.  We discuss each of these 
concerns in detail below.

In March 1996, the Air Force entered into a contract for O&M services 
at the hospital at Nellis Air Force Base through the Small Business 
Administration (SBA) under the section 8(a) program with Valenzuela.  
During Valenzuela's contract performance, CEHNC developed an IDIQ 
procurement for O&M and incidental repair and replacement services at 
government facilities, which was determined not suitable for a small 
business set-aside.  On September 24, CEHNC issued a request for 
proposals (RFP) for the services under IDIQ task order contracts.  The 
RFP's work statement identified no specific facilities or locations at 
which these services were to be performed, but included O&M and 
incidental repair and replacement services at "Government facilities 
such as but not limited to medical, non-medical, training, 
administrative, plants, labs and storage facilities."  These 
facilities were initially limited by location "in the continental 
United States, Hawaii and Alaska," but this was subsequently modified 
to add the words "and outside the continental United States."  On May 
5, 1997, CEHNC awarded contracts to two large businesses, J&J 
Maintenance, Inc. and Syska & Hennessy.

Following the award of the Army contracts, the Air Force decided not 
to exercise the option under Valenzuela's 8(a) contract.  Instead, it 
would satisfy its requirements for O&M services, along with certain 
additional engineering and construction services, at the Nellis Air 
Force Base hospital under CEHNC's task order contract with Syska & 
Hennessy.  The Air Force requested the services under a Military 
Interdepartmental Purchase Request (MIPR) dated May 28. CEHNC issued a 
delivery order authorizing Syska & Hennessy to develop a plan for 
performing the services, and on September 12, CEHNC entered into a 
bilateral modification to the delivery order with Syska & Hennessy to 
provide the services.  The record shows that the bulk of the work will 
be subcontracted to Johnson Controls, Inc., another large business.

The Air Force did not coordinate with the SBA its decision to remove 
these services from the small business program, nor did it consider 
whether the services could be procured under a small business 
set-aside.  We think that these failures were inconsistent with the 
requirements imposed by the Small Business Act, 15 U.S.C.  sec.  644, and 
FAR subpart 19, which implements that Act. 

FAR  sec.  19.501(c) and 19.502-2 state that the contracting officer shall 
review acquisitions to determine if they can be set aside for small 
business.[1]  Further, FAR  sec.  19.202-1 provides that small business 
concerns "shall be afforded an equitable opportunity to compete for 
all contracts."  FAR  sec.  19.202-1(e)(1)(i) provides that where the 
proposed acquisition is for services currently being provided by a 
small business and the proposed acquisition is of a quantity or 
estimated dollar value, the magnitude of which make it unlikely that 
small businesses can compete for the prime contract, the contracting 
officer shall provide a copy of the proposed acquisition package to 
the SBA procurement center representative at least 30 days prior to 
the issuance of the solicitation.  The SBA notification requirements 
in FAR  sec.  19.201(e) implement the same requirements contained in 15 
U.S.C.  sec.  644(a).

Economy Act transactions are generally exempted from the competition 
requirements contained in Competition in Contracting Act of 1984 
(CICA) and FAR.[2]  There is no similar exemption from the 
requirements of the Small Business Act and its implementing 
regulations.[3]  Under the circumstances, we agree with the SBA that 
the Air Force should have notified the SBA of the proposed acquisition 
for review in accordance with FAR  sec.  19.201(e), inasmuch as a small 
business concern was performing the Nellis Air Force Base O&M 
services, and the augmented work (including the additional engineering 
and construction tasks) was apparently no longer considered suitable 
for small businesses to perform.  In responding to the protest, the 
Air Force states that the CEHNC approach, which included O&M and the 
augmented services under one contract, was better suited to satisfy 
the agency's requirements as well as being more cost effective than 
initiating a new acquisition process.  In our view, this belief 
provides no basis to exempt the Air Force from complying with the FAR  sec.  
19.201(e) requirement that the SBA have the opportunity to review 
proposed acquisitions to consider whether they should be set aside for 
small businesses or whether the component services should be unbundled 
into separate procurements.  Moreover, under FAR  sec.  19.501(c) and 
19.502-2, the Air Force should itself have considered whether these 
requirements were suitable to be set aside for exclusive small 
business participation.

The Air Force has asserted that it could reasonably rely upon the 
CEHNC finding that small businesses could not perform the O&M services 
covered by the IDIQ contracts.  We agree with the SBA that this does 
not exempt the Air Force from its obligations under the FAR because 
the requirement at Nellis Air Force Base was not contemplated under 
the solicitation leading to the IDIQ contracts.  The CEHNC contracting 
officer could not have considered whether services at Nellis Air Force 
Base were suitable for set aside because he did not know of the 
requirement for those services.

In fact, the SBA believes and the protest record suggests that there 
are qualified small businesses who could perform the Nellis Air Force 
Base work, even with the addition of the engineering and construction 
functions.  As noted by the SBA, it appears that the only real 
differences in approach of the Syska & Hennessy contract from the 
Valenzuela O&M contract are inclusion of additional functions and the 
fact that the contractor itself develops the detailed work statement 
for the work to be performed.  The SBA points out that the 8(a) award 
to Valenzuela was a competitive solicitation that initially 
contemplated engineering design and construction services that 
assertedly were removed for reasons unrelated to the capability of 
small businesses, as well as the O&M services ultimately awarded.  
There is no dispute that Valenzuela successfully performed the 
contract work, and Valenzuela notes that it has performed engineering 
and construction work under other contracts.

Under the circumstances, we believe that the Air Force violated FAR  sec.  
19.202-1(e) in failing to apprise the SBA of its planned acquisition 
strategy and FAR  sec.  19.501(c) and 19.502-2 in failing to consider this 
acquisition as a possible small business set-aside.

As noted in our letter of today to the Secretary of the Army (copy 
enclosed), we also believe that the Syska & Hennessy IDIQ contract did 
not comply with the CICA requirement for full and open competition 
because the work statement, in that contract is so broad that it does 
not reasonably describe the scope of services needed, and therefore 
does not provide potential offerors notice of the work that will be 
within the scope of the resulting contract.  Since an agency, such as 
the Air Force, may not procure property or services from another 
agency unless that other agency has complied fully with the 
requirements of CICA in its procurement of such property or services, 
10 U.S.C.  sec.  2304(f)(5)(B), we believe that the delivering order under 
the Army contract also violates CICA.

We are bringing the foregoing matters to your attention for such 
action as you believe is warranted.

Sincerely yours,

Comptroller General
of the United States 

Enclosures (2)

B-277979

January 26, 1998

The Honorable Robert M. Walker
Acting Secretary of the Army

Dear Mr. Secretary:

This is to bring to your attention matters that we learned of during 
consideration of a recent protest.  By decision of December 9, 1997, 
copy enclosed, we dismissed as untimely the protest filed by 
Valenzuela Engineering, Inc. that the Department of the Air Force and 
the Army Corps of Engineers failed to comply with certain provisions 
of the Federal Acquisition Regulation in the acquisition of operation 
and maintenance services at the Mike O'Callaghan Federal Hospital at 
Nellis Air Force Base, Nevada.  The services were ordered under an 
indefinite delivery, indefinite quantity (IDIQ) contract between the 
Army Engineering and Support Center (CEHNC), Huntsville, Alabama, and 
Syska & Hennessy, Inc.

Although we dismissed the protest, we noted during our review that the 
work statement included in the Syska & Hennessy IDIQ contract was so 
broad as to be inconsistent with the authority governing task order 
contracts contained in 10 U.S.C.  sec.  2304a, 2304c (1994) and the 
requirements of the Competition in Contracting Act of 1984 (CICA), 10 
U.S.C  sec.  2304(a), 2305(a).

On September 24, 1996, CEHNC issued request for proposals (RFP) No. 
DACAA87-96-R-0046 to obtain "Operation and Maintenance (O&M) and 
incidental repair and replacement services for Government facilities."  
The RFP's work statement identifies no specific facilities or 
locations at which these services are to be performed.  It provided 
that the services being acquired "will include operation, preventive 
maintenance, commissioning, management, and incidental repair and 
replacement of all systems, equipment, and components inherent in 
Government facilities such as but not limited to medical, non-medical, 
training, administrative, plants, labs and storage facilities."  These 
facilities were initially limited by location "in the continental 
United States, Hawaii and Alaska," but this was subsequently modified 
to add the words "and outside the continental United States."  We 
understand that the solicitation was issued to implement CEHNC's 
Operations & Maintenance Engineering Enhancement (OMEE) program whose 
stated goal is to provide for "the enhancement of new and existing 
complex facilities by developing maintenance concepts and O&M 
documentation and by identifying O&M training and maintenance 
management system requirements . . . [including] O&M contracting 
support for Army and Air Force activities on a world-wide basis."  
Contracts were awarded under the RFP to Syska & Hennessy and J&J 
Maintenance, Inc.

CICA generally requires agencies to obtain full and open competition 
through the use of competitive procedures in conducting a procurement 
for property or services.  10 U.S.C  sec.  2304(a)(1).  To implement this 
requirement, CICA requires agencies to specify their needs and develop 
specifications in a manner designed to achieve full and open 
competition.  10 U.S.C  sec.  2305(a).  Consistent with the CICA 
requirements, 10 U.S.C  sec.  2304a(b)(3) requires solicitations for task 
or delivery order contracts to include a "statement of work, 
specifications, or other description that reasonably describes the 
general scope, nature, complexity, and purposes of the services or 
property to be procured under the contract."  The implementing 
regulatory provision, FAR  sec.  16.504(a)(4)(iii), requires a solicitation 
for task or delivery order contracts to "[i]nclude a statement of 
work, specifications, or other description, that reasonably describes 
the general scope, nature, complexity, and purpose of the supplies or 
services to be acquired under the contract in a manner that will 
enable a prospective offeror to decide whether to submit an offer."

The language in 10 U.S.C  sec.  2304a(b)(3) quoted above reflects 
congressional concern that "indiscriminate use of task order contracts 
for broad categories of ill-defined services unnecessarily diminishes 
competition and results in the waste of taxpayer dollars."  S. Rep. 
No. 103-258, at 15 (1994).  Statements of work that are too general 
provide insufficient information for prospective offerors to decide 
whether to submit a proposal or what to offer to best meet the 
agency's needs.  Also, inclusion of broad categories of work in one 
statement of work constitutes a form of bundling, since different 
kinds of work (or tasks in different geographical or technical areas) 
are combined into one procurement, and an overly broad statement of 
work can unjustifiably diminish competition just as bundling does, by 
deterring businesses, particularly small businesses, from competing 
for a contract, notwithstanding their ability to perform some of the 
work at issue.  See National Customer Eng'g, 72 Comp. Gen. 132 (1993), 
93-1 CPD  para.  225; Airport Markings of Am., Inc., et al., 69 Comp. Gen. 
511 (1990), 90-1 CPD  para.  543.  Provisions or conditions that restrict 
competition (such as bundling) are permitted only to the extent 
necessary to satisfy the contracting agency's needs.  10 U.S.C. 
2305(a)(1)(B)(ii); National Customer Eng'g, supra.

In our view, the work statement in the Army contracts at issue here is 
so vague and broad as to violate the statutory and regulatory limits 
set out above.  As described earlier, the work statement in the 
contracts awarded to Syska & Hennessy and J&J Maintenance encompasses 
operation of "Government facilities" located either inside or outside 
the United States, i.e., anywhere in the world.  In addition to the 
unlimited geographical coverage, the statement of work was not limited 
to any particular facilities or categories of government facilities.  
A statement of work for O&M services at any government facility in the 
world is, in our opinion, impermissibly broad.  In addition, it is not 
clear how inclusion of O&M services for government-wide facilities 
worldwide, including facilities belonging to agencies other than the 
Army, is sufficient to allow offerors to make an intelligent decision 
whether to submit a proposal or is necessary to satisfy the actual 
needs of the Army.

We view the events of this case as demonstrating one of the problems 
associated with overbroad work statements.  The Air Force used one of 
the two contracts to acquire O&M services for a hospital at Nellis Air 
Force Base, Nevada, thus displacing a small business which had been 
performing that work under the section 8(a) program.  Neither that 
small business nor the Small Business Administration could have been 
expected to realize, when the Army's task order solicitation was 
issued, that the resulting contracts might eventually include the 
Nellis Air Force work and thus lead to the displacement of the 8(a) 
contractor.  Indeed, in our view, no potential offeror could 
reasonably have anticipated, when the task order contracts were 
initially being competed, what specific facilities and services would 
be actually provided under the contracts.

In sum, we conclude that the all-encompassing work statement contained 
in the IDIQ contracts does not reasonably describe the scope of the 
services, and therefore does not provide potential offerors notice of 
the work that will be within the scope of the resulting contract.  As 
a result, we think that the solicitation does not comport with the 
CICA requirements to obtain full and open competition in procuring 
property and services.

We bring this matter to your attention for such action as you deem 
appropriate.[4]

Sincerely yours,

Comptroller General
of the United States   

Enclosures (2)

Matter of:Valenzuela Engineering, Inc.

File:     B-277979

Date:December 9, 1997

DECISION

Valenzuela protests the failure of the Department of the Air Force and 
the Army Corps of Engineers to comply with certain provisions of the 
Federal Acquisition Regulations (FAR) pertaining to small business 
issues in the acquisition of operation and maintenance (O&M) services 
at the Mike O'Callaghan Federal Hospital at Nellis Air Force Base, 
Nevada.  The services were ordered under an indefinite delivery, 
indefinite quantity (IDIQ) contract of the Army Engineering and 
Support Center (CEHNC), Huntsville, Alabama, with Syska & Hennessy, 
Inc.

We dismiss the protest.

In March 1996, the Air Force entered into a contract for operations 
and maintenance services at the Nellis Air Force Base hospital through 
the Small Business Administration (SBA) under the section 8(a) program 
with Valenzuela for a base year with 4 option years.[5]  The Air Force 
initially contemplated certain engineering and construction tasks as 
part of Valenzuela's O&M contract, but deleted these requirements 
prior to the award assertedly for reasons unrelated to the capability 
of small businesses.

While Valenzuela was performing the base contract at Nellis Air Force 
Base, CEHNC developed an IDIQ procurement for O&M and incidental 
repair and replacement services at medical and nonmedical facilities 
under its Operation and Maintenance Engineering Enhancement (OMEE) 
program.  According to the Army, OMEE provides for "the enhancement of 
new and existing complex facilities by developing maintenance concepts 
and O&M documentation and by identifying O&M training and maintenance 
management system requirements . . . [including] O&M contracting 
support for Army and Air Force activities on a world-wide basis."  
Since the OMEE primarily involved O&M services at medical facilities, 
the acquisition plan anticipated that such facilities would be the 
primary user of the services to be acquired under this procurement, 
but noted that there was good potential for the increased use of these 
services by non-medical government facilities.  

Based on its experience under the OMEE program, which involved O&M 
services at "complex" facilities, CEHNC determined that the 
procurement was not suitable for a small business set-aside.  CEHNC 
did not conduct a formal market survey or consult the SBA, but after 
discussing the matter with the agency's Small Business Utilization 
Specialist found that the agency's "experience of the market is that 
there is no small business which can provide the service."

On September 24, 1996, CEHNC issued request for proposals (RFP) No. 
DACA87-96-R-0046 under an IDIQ task order contract for a base year 
with 4 option years.  The RFP's work statement identifies no specific 
facilities or locations at which these services are to be performed, 
but includes O&M and incidental repair and replacement services at 
"Government facilities such as but not limited to medical, 
non-medical, training, administrative, plants, labs and storage 
facilities . . . in the continental United States, Hawaii and 
Alaska."[6]  The RFP contemplated an award of no more than two 
contracts, and each awardee would receive "fair consideration" in the 
issuance of task orders.  The task orders are to be issued on either a 
firm, fixed-price or a time and materials basis.  For each task order, 
the contractor is required to develop a facility operation and 
maintenance concept plan, a facility operation and maintenance plan, 
and a commissioning plan prior to implementing the order.[7]   

CEHNC received three proposals in response to the RFP on April 3, 
1997.  Neither Valenzuela nor any other small business responded to 
the RFP.  On May 5, CEHNC made awards to J&J Maintenance, Inc. and to 
Syska & Hennessy.  Each contract has a ceiling amount of $2,650,000 
for the base year.

Following award of the Army contracts, the Air Force decided not to 
exercise the option under Valenzuela's 8(a) contract.  Instead, it 
would satisfy its requirements for O&M services along with certain 
additional engineering and construction services under the OMEE 
program at Nellis Air Force Base through CEHNC's task order contract 
with Syska & Hennessy.  There is no suggestion that Valenzuela had not 
been successfully performing the required O&M services at Nellis Air 
Force Base.  The Air Force did not coordinate this decision with the 
SBA or consider whether the revised requirement was appropriate for a 
small business set-aside.

On May 9, the Air Force requested CEHNC to administer O&M services at 
the Nellis Air Force Base hospital under its task order contract.  
Pursuant to the Economy Act, 31 U.S.C.  sec.  1535 (1994), the Air Force 
requested the services under a Military Interdepartmental Purchase 
Request dated May 28, which authorized the transfer of Air Force funds 
in the amount of $40,000 for this purpose.  On June 19, CEHNC issued 
delivery order No. 0002 at a price of $38,385 under its IDIQ contract 
with Syska & Hennessy to provide a facility operation and maintenance 
plan for O&M services at the Nellis Air Force Base hospital.  On 
September 12, CEHNC entered into a bilateral modification to the 
delivery order with Syska & Hennessy, implementing the plan for the 
O&M services for 1 year (October 1, 1997 to September 30, 1998) at a 
cost of $1,711,153.  The record shows that the bulk of the work will 
be subcontracted to Johnson Controls, Inc., another large business.

Meanwhile, the Air Force, in a letter dated May 30, notified 
Valenzuela that the Air Force did not intend to exercise the option 
under its contract effective October 1.  During June, Valenzuela met 
with the SBA procurement center representative and Air Force officials 
regarding the decision not to exercise its contract option and how the 
O&M services would be performed.  According to Valenzuela, the SBA 
advised that it was unaware of the May 30 notice, and the Air Force 
indicated that the matter would be reviewed and that the June delivery 
order to Syska & Hennessy was only for "scoping and planning".  The 
SBA also sent a letter to the Air Force dated June 6 to inquire why 
the Air Force was removing its O&M requirement at Nellis Air Force 
Base from the 8(a) program.  While awaiting a response, Valenzuela 
communicated with various Air Force, Army, and SBA officials 
contending that its contract option should have been exercised and 
that these services should not be removed from the small business 
program.  

On August 12, the Air Force Small Disadvantaged Utilization Specialist 
sent a letter to Valenzuela advising that the Air Force believed that 
acquiring the services under CEHNC's contract would be more beneficial 
than continuing performance with Valenzuela, and that Valenzuela 
should contact the Army for subcontracting opportunities at the Nellis 
Air Force Base facility.  The Air Force also sent a letter to the SBA 
dated August 29, stating that the Air Force's 8(a) O&M contract with 
Valenzuela did not provide the services needed to meet its 
requirements.  The Air Force notified Valenzuela on August 28 to begin 
transition to the new contractor on September 1.  After the SBA 
furnished the letter it received from the Air Force to Valenzuela on 
September 4, this protest followed on September 8. 

Valenzuela contends that the Air Force and the Army's actions resulted 
in the improper withdrawal of the Nellis Air Force Base hospital O&M 
work from the 8(a) and small business programs in violation of various 
FAR provisions.  Among other things, Valenzuela argues that under the 
FAR the Air Force was required to notify the SBA prior to determining 
to fulfill its requirement under a task order contract and to review 
the acquisition to determine whether or not it could be set aside for 
small business concerns.  Valenzuela asserts that it has successfully 
performed the O&M services and it has performed engineering, design, 
construction, and O&M services under a variety of contracts with the 
government throughout California, Arizona, and Nevada.

The Air Force, Army, and Syska & Hennessy argue that the protest 
should be dismissed as untimely because Valenzuela should have known 
of its basis of protest in June following the Air Force's May 30 
notification to Valenzuela that it would not exercise the contract 
option and the Army's June 19 issuance of the delivery order to Syska 
& Hennessy.  Valenzuela responds that when it inquired about the 
matter it was told that the initial delivery order to Syska & Hennessy 
was merely for planning and that the agencies were still reviewing the 
matter to determine whether they would proceed with acquiring the work 
from CEHNC under the Economy Act.  Valenzuela states that until it 
received a copy of the August 29 letter to the SBA and was advised to 
begin transition for a new contractor it had no basis for protest.

Under our Bid Protest Regulations, a protest not based upon alleged 
improprieties in a solicitation must be filed no later than 10 
calendar days after the protester knew or should have known of the 
basis for protest, whichever is earlier.  4 C.F.R.  sec.  21.2(a)(2) 
(1997).  The agencies argue that the Air Force had conveyed its intent 
to follow a course of action that was adverse to the protester's 
interest on May 30 and June 19, which required the protest to be filed 
within 10 days afterwards.  See, e.g., Kimmins Thermal Corp.--Recon., 
B-238646.4, Jan. 31, 1991, 91-1 CPD  para.  106 at 2.

While the record contains some basis to find that Valenzuela believed 
during June and July that the matter was still under consideration, as 
discussed above, the Air Force clearly stated to Valenzuela that it 
intended to proceed with acquiring the services at Nellis Air Force 
Base from Syska & Hennessy in an August 12 letter.[8]  Thus, we find 
that the protest filed on September 8, almost a month later, was 
untimely.

The protester argues that even if the protest is untimely, we should 
consider the issues raised as significant to the procurement system 
and entertain the protest pursuant to 4 C.F.R.  sec.  21.2(c), which 
provides discretion for our Office to waive timeliness requirements in 
certain cases.  We decline to do so.[9]  We note that had the protest 
been considered under 4 C.F.R.  sec.  21.2(c) and been sustained, we would 
not have recommended any remedial action in view of the advanced state 
of contract performance and the untimeliness of the protest.  See 
Golden North Van Lines, Inc., 69 Comp. Gen 610, 615, 90-2 CPD  para.  44 at 
7.  

The protest is dismissed.

Comptroller General
of the United States                                                                                         

1. The Air Force and the Army argued during the protest that this 
transaction is not an acquisition, but merely an order pursuant to the 
Economy Act under an existing contract and that such transactions are 
not subject to the requirements of the FAR.  We think that the Air 
Force's actions with respect to the Nellis Air Force Base O&M 
requirement constitute an acquisition as that term is defined in FAR  sec.  
2.101, which provides that an acquisition extends from the 
establishment of the need through the fulfillment of that need by 
contract.  The Air Force established its need for the on-going O&M 
services and then decided to acquire them under the Economy Act from 
the CEHNC under the Syska & Hennessy IDIQ contract.  Also, 
transactions under the Economy Act are "acquisitions" where they 
result in the placement of a "contract."  See FAR subpart 17.5 and the 
definition of "contract" in FAR  sec.  2.101.  We think it clear that the 
delivery order under the IDIQ contract for this stand-alone O&M 
services work at the Nellis Air Force Base hospital is the "contract" 
implementing the acquisition.

2. 10 U.S.C.  sec.  2304(c)(5); Dictaphone Corp., B-244691.2, Nov. 25, 
1992, 92-2 CPD  para.  380 at 3-4.  This is so, however, only where the 
agency receiving the Economy Act order has complied fully with CICA 
requirements.  10 U.S.C.  sec.  2304(f)(5)(B).

3. The Army and the Air Force further argued that this transaction was 
an "intra-agency" order between two major organizational units of the 
Department of Defense and thus is not subject to FAR subpart 17.5, 
which concerns only "inter-agency" Economy Act transactions.  However, 
we find no provision that exempts intra-agency Economy Act 
acquisitions from those requirements of the FAR that implement the 
Small Business Act.

4. In addition, we are bringing the Air Force's actions in this matter 
to the attention of the Acting Secretary of the Air Force by letter of 
today (copy enclosed).

5. Section 8(a) of the Small Business Act, 15 U.S.C.  sec.  637(a) (1994), 
authorizes SBA to enter into contracts with government agencies and to 
arrange for performance through subcontracts with socially and 
economically disadvantaged small business concerns.

6. The Nellis Air Force Base hospital was not specifically identified 
in the RFP and the Army had not considered the facility in preparing 
the procurement.  In this regard, CEHNC states that "[i]t was unaware 
at the time of RFP issuance or award that the Air Force would be using 
the contract at Nellis Air Force Base; CEHNC did not formally learn of 
the Nellis requirement until May 9, 1997." 

7. According to the Army, this was a new process developed by CEHNC to 
more efficiently meet its operations and maintenance and engineering 
enhancement program needs.  In the first step, the concept of 
operation is developed, in the second step a detailed facility 
operation and maintenance plan is developed, which takes the place of 
the traditional performance work statement, and the third step where 
performance of the O&M services in accordance with the plan takes 
place.  The approach contemplated a partnership between the government 
and the contractor, that could result in cost savings and improved 
services.

8. In the absence of evidence to the contrary, we assume that mail is 
received within 1 calendar week from the date that it was sent.  Apex 
Micrographics, Inc., B-235811, Aug. 31, 1989, 89-2 CPD  para.  205 at 3.  
The protester therefore would be charged with receipt of this letter 
on August 19 and its September 8 protest is untimely because it was 
filed more than 10 days later.  Id.

9. We do have concerns related to the actions challenged in this case, 
and are writing the Secretary of the Army and the Secretary of the Air 
Force to bring our concerns to their attention.