BNUMBER:  B-278408.4      
DATE:  November 23, 1998
TITLE: Teledyne-Commodore, LLC--Reconsideration, B-278408.4,
November 23, 1998
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Matter of:Teledyne-Commodore, LLC--Reconsideration

File:B-278408.4     
        
Date:November 23, 1998

Harvey G. Sherzer, Esq., Scott Arnold, Esq., Harriet 
Mountcastle-Walsh, Esq., and Douglas S. Manya, Esq., Howrey & Simon, 
for the protester. 
Jeffrey I. Kessler, Esq., U.S. Army Materiel Command, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

On reconsideration, General Accounting Office reverses prior dismissal 
of protest concerning task orders issued under multiple award 
contracts and will exercise jurisdiction under the Competition in 
Contracting Act of 1984 over the protest where, notwithstanding the 
issuance of task orders, the nature of the procurement demonstrates 
that the agency is essentially conducting only one competitive source 
selection, which is not subject to the restriction on protests of 
orders placed under a task order contract contained in 10 U.S.C.  sec.  
2304c(d).

DECISION

Teledyne-Commodore, LLC requests that we reconsider our decision in 
Teledyne-Commodore, LLC, B-278408.3, Sept. 15, 1998, 98-2 CPD  para.  70, in 
which we dismissed its protest of the issuance of task orders to 
General Atomics, Burns and Roe Enterprises, Inc., and Parsons 
Infrastructure and Tech Group/Allied Signal by the Department of the 
Army, under multiple-award contracts awarded under request for 
proposals (RFP) No. DAAM01-97-R-0031.  The RFP is for identification 
of technologies other than incineration for demilitarization of 
assembled chemical weapons.  The Army issued the task orders to 
proceed with the technology demonstration phase of the Assembled 
Chemical Weapon Assessment Program.  We dismissed the protest because 
of the statutory restriction on protests in connection with task 
orders.  See 10 U.S.C.  sec.  2304c(d) (1994).

On reconsideration, we reverse our prior dismissal and reinstate 
Teledyne-Commodore's protest.

On July 28, 1997, the agency issued the RFP, for the selection and 
demonstration of approaches, other than the "baseline" incineration 
approach, for demilitarization and disposal of stockpiled assembled 
chemical weapons.  RFP  sec.  C.1.  The RFP contemplated the award of 
multiple task order contracts.  RFP  sec.  A.  The RFP divided the work 
into the following three contract line item numbers (CLIN), each 
corresponding to a particular phase of the contract effort:  CLIN 
0001, data gap resolution; CLIN 0002, demonstration work plan; and 
CLIN 0003, technology demonstration.  RFP  sec.  A (executive summary), B, 
C.4, and M.2.  The RFP explained that each of the three requirements 
would be accomplished under separate task orders.  RFP  sec.  B.1, C.4.

The RFP stated that all offerors which met the threshold "go/no go" 
criteria listed in section M.6.1.2 of the RFP and whose proposals were 
responsive to the solicitation requirements would be awarded a 
contract and issued a task order for CLIN 0001 in the amount of 
$50,000 to prepare a data gap resolution work plan.  RFP  sec.  C.1.2.4, 
C.1.2.5, M.4, and M.5.1.  The RFP further explained that the agency 
would issue task orders for CLIN 0002 based on the evaluation of 
proposals against criteria described in section M.6.2 of the RFP.  
Based on the relative technical rankings of proposals a program 
evaluation team (PET) would recommend, to the extent possible, a 
minimum of two technologies for demonstration testing.  RFP  sec.  C.1.2.6.  
Those contractors recommended for demonstration testing were to 
receive a second task order under CLIN 0002 in the amount of $50,000 
to prepare a demonstration work plan.  Id.  The PET would then 
evaluate the demonstration work plans in accordance with criteria 
announced in the solicitation, and recommend contractors who would be 
issued a third task order under CLIN 0003, on a cost-plus-fixed-fee 
basis, to perform demonstration testing.  RFP  sec.  C.1.2.7.  Contractors 
that were not issued a task order under CLIN 0002 would not be 
considered for a task order under CLIN 0003.  RFP  sec.  M.5.2.

The agency awarded contracts and issued CLIN 0001 task orders to seven 
firms.  The agency subsequently issued task orders under CLIN 0002 to 
six contractors (including Teledyne-Commodore).  By letter dated July 
29, 1998, the agency informed the protester that it had issued task 
orders under CLIN 0003 to General Atomics, Burns & Roe, and 
Parsons/Allied Signal.  Following a debriefing by the agency, 
Teledyne-Commodore filed a protest in our Office challenging the 
agency's decision not to issue the firm a task order under CLIN 0003 
on various grounds, including that the agency improperly made cost 
rather than technical merit the predominant source selection factor; 
the agency failed to perform a cost realism analysis; the agency 
conducted improper discussions; and the agency's evaluation of its 
proposal was flawed.

We dismissed the protest based on our conclusion that our 
consideration of the protest is precluded by 10 U.S.C.  sec.  2304c(d), 
which provides that "[a] protest is not authorized in connection with 
the issuance or proposed issuance of a task or delivery order except 
for a protest on the ground that the order increases the scope, 
period, or maximum value of the contract under which the order is 
issued."  In requesting reconsideration, the protester argues that the 
dismissal was inappropriate and that the protest should be reinstated.

The restriction on protests regarding task orders was included in the 
Federal Acquisition Streamlining Act of 1994 (FASA),  sec.  1004, Pub. L. 
No. 103-355, 108 Stat. 3243, 3252-53 (1994), as part of FASA's 
treatment of task and delivery order contracts.  The legislative 
history concerning the provisions of FASA treating task and delivery 
order contracts indicates that they were intended to encourage the use 
of multiple-award task or delivery order contracts, rather than 
single-award task or delivery order contracts, in order to promote an 
ongoing competitive environment in which each awardee was fairly 
considered for each order issued.  H.R. Conf. Rep. No. 103-712, at 178 
(1994), reprinted in 1994 U.S.C.C.A.N. 2607, 2608; S. Rep. No. 
103-258, at 15-16 (1994), reprinted in 1994 U.S.C.C.A.N. 2561, 
2575-76.  We have held that the statutory restriction on protests of 
orders placed under task or delivery order contracts does not apply to 
protests of "downselections" implemented by the placement of a task or 
delivery order under a multiple-award task or delivery order contract 
where the task order results in the elimination of one of the 
contractors from consideration for future orders without further 
competition under the remaining terms of the contract.  Electro-Voice, 
Inc., B-278319, B-278319.2, Jan. 15, 1998, 98-1 CPD  para.  23 at 5.

In Electro-Voice, the protester and another contractor were issued an 
order for an initial delivery of product demonstration models 
consistent with the agency's intent of conducting a downselect between 
the two competitors.  Once the downselection was made, only the 
selected contractor would receive task orders for the production 
requirements; there would be no ongoing competition for orders among 
the multiple award contractors as envisioned by the law.  Id.  We 
exercised our bid protest jurisdiction in Electro-Voice because the 
downselect decision precluded the protester from competing for future 
task orders under the remaining terms of the contract.  Although the 
procurement here is not structured to result in a downselection for 
"production" quantities, as in Electro-Voice, we conclude that the 
nature of the procurement is such that the restriction on protests of 
the placement of orders contained in 10 U.S.C.  sec.  2304c(d) is not 
intended to bar Teledyne-Commodore's protest.

Federal Acquisition Regulation (FAR)  sec.  16.501-2(a) describes three 
types of indefinite-delivery contracts:  definite-quantity contracts, 
requirements contracts, and indefinite-quantity contracts.  The 
appropriate type of indefinite-delivery contract may be used to 
acquire supplies and/or services when the exact times or quantities of 
future deliveries are not known at the time of contract award.  Id.  
An indefinite-quantity contract is appropriate when the government 
cannot predetermine, above a specified minimum, the precise quantities 
of supplies or services that will be required during the contract 
period, and should be used only when a recurring need is anticipated.  
See FAR  sec.  16.504(b).

Here, the contracts do not involve an indefinite quantity for any 
individual contractor, nor are they based on any recurring need of the 
agency.  Section A of the RFP states that the minimum ordering 
quantity under any individual contract is task order No. 0001 for the 
data gap resolution work, while the maximum ordering quantity will be 
task orders for all three phases of the work (data gap resolution, 
demonstration work plan, and technology demonstration).  However, 
contrary to the agency's position, the work described in the RFP is 
not "indefinite."  Indeed, under each of the three phases of the work 
contemplated by the contract, the RFP specifically defined the effort 
required of each contractor.  Thus, under each phase the Army knew its 
specific needs and its requirements were precisely predetermined.  
Further, the work described in the RFP does not involve unknown 
quantities and does not anticipate any recurring needs.  While the 
Army is permitted under the RFP to issue more than one task order 
under each phase to the contractors, there is nothing in the RFP to 
indicate that the agency has any recurring need for more than one 
technology demonstration from any individual contractor.  That is, 
once the technology demonstration phase is completed under task order 
No. 0003, there are no recurring needs contemplated under the 
contract.[1]

Another reason leading us to conclude that the statutory limitation on 
protests of task orders does not apply here is that the RFP 
contemplates only one competitive source selection.  In this regard, 
the RFP anticipates using task orders for CLINs 0001 and 0002 
essentially as preliminary screening phases to lead up to the ultimate 
source selection for the alternative technology demonstration, CLIN 
0003.  The first task orders were issued to all firms that were 
awarded a contract and did not involve a competition separate from the 
umbrella contracts; the second task orders simply covered preparation 
of a demonstration work plan for the technology demonstration; and the 
third task orders are for the technology demonstration itself.  The 
agency--quite reasonably--took a sequential approach to issuing the 
task orders and to the procurement overall--moving from the 
preliminary screening steps involved in the first two task orders to 
the final step of conducting the actual technology demonstrations.  As 
such, the nature of the procurement demonstrates that the agency is 
essentially conducting a single source selection, rather than the 
multiple source selections that arise under indefinite-delivery, 
indefinite-quantity contracts.

In sum, although the task orders contested by the protester were 
issued under the aegis of what purports to be indefinite-quantity, 
indefinite-delivery contracts, those contracts involved neither 
recurring work nor an indefinite quantity of work for an individual 
contractor, and the agency is essentially conducting one competitive 
source selection to perform the required work in this procurement.  We 
do not understand the restriction in 10 U.S.C. 2304c(d) to apply in 
circumstances such as these.  We therefore conclude that the 
restriction on protests of orders placed under a task order contract 
contained in 10 U.S.C.  sec.  2304c(d) does not bar our Office from 
exercising bid protest jurisdiction under CICA over 
Teledyne-Commodore's protest.

We reverse our prior dismissal and reinstate Teledyne-Commodore's 
protest.

Comptroller General
of the United States

1. Replying to questions for the record posed by our Office in 
response to the request for reconsideration, the Army recognizes that 
"[t]he solicitation was not specifically structured in terms of 
'recurring need.'" Army's Supplemental Response, Nov. 13, 1998, at 4.  
Lending further support to our conclusion that the RFP does not 
contemplate indefinite quantities, the contracting officer (CO) states 
that "[t]he work effort was described in [the RFP] as a three phased 
effort."  CO's Memorandum for GAO, Nov. 13, 1998, at  para.  14.  In our 
view, the fact that the agency did not know the precise nature of the 
technologies that would ultimately be demonstrated under the third 
phase (task order No. 0003), as the CO states, does not make the 
contract one for an "indefinite quantity."