BNUMBER:  B-281807 
DATE:  April 5, 1999
TITLE: Access Research Corporation, B-281807, April 5, 1999
**********************************************************************

Matter of:Access Research Corporation

File:     B-281807

Date:April 5, 1999

J. Hatcher Graham, Esq., for the protester.
Col. Barry S. Wilson, Department of the Air Force, for the agency.
Aldo A. Benejam, Esq., Office of the General Counsel, GAO, 
participated in the preparation of the decision.

DIGEST

1.  Protest challenging contracting agency's decision to issue an 
initial modification to existing contract is untimely where protest 
was not filed until 3-1/2 years after issuance of the modification, 
protester acknowledges that it was aware of the agency's action when 
the modification was issued, and there is no indication that protester 
ever formally protested the agency's action.

2.  Modification is within the scope of existing contract for the 
digitization of paper-based technical orders, where that basic 
contract contemplated the complete digitization of the agency's 
existing paper-based system, the modification at issue requires the 
contractor to complete the digitization effort, and the modification 
does not change the fundamental nature and purpose of the contract.

DECISION

Access Research Corporation (ARC) protests the issuance by the 
Department of the Air Force of modification No. 16 to contract No. 
F09603-93-G-0012-0005, awarded to Mercer Engineering Research Center 
(MERC).  The modification calls for MERC to complete digitization of 
paper copy technical orders (TO).

We deny the protest.

On September 30, 1993, the Air Force issued contract No. 
F09603-93-G-0012-0005 to MERC for certain engineering services.[1]  On 
May 31, 1995, the Air Force issued modification No. 06 to MERC's 
contract, to acquire digitization of the agency's entire TO warehouse, 
estimated to encompass approximately 10 million pages of documents.[2]  
The statement of work (SOW) accompanying modification No. 06 requires 
the contractor to establish a document capture system and indexed 
image repository for the conversion of TOs stored in the agency's 
warehouse from paper to digital form.  SOW, May 4, 1995, at  para.  1.0.  
The SOW explains that Warner Robins Air Logistics Center (WR-ALC) is 
responsible for the management and distribution of approximately 
44,000 active, non-classified, paper-based Air Force TOs for major 
weapons systems, comprising approximately 10 million pages.  Id.  para.  
2.0.

According to the agency, modification No. 06 funded the digitization 
of only 2 million pages, and MERC's contract was subsequently modified 
several times to incrementally fund the total requirement.  For 
example, modification No. 07, dated September 27, 1995, funded the 
digitization of an additional 2 million pages for a cumulative funded 
total of 4 million pages; modification No. 12, dated September 27, 
1996, decreased the estimated number of pages to be digitized from 4 
million to approximately 3 million pages; and modification No. 14, 
dated September 30, 1997, funded the digitization of an additional 1 
million pages, bringing the cumulative funded total to approximately 4 
million pages.

The agency explains that the modification which ARC protests, No. 16, 
dated September 28, 1998, was intended to complete funding for the 
digitization of the balance of the TOs in the warehouse, estimated at 
4.5 million additional pages, bringing the cumulative funded total to 
8.5 million pages of paper-based TOs stored in the warehouse--15 
percent less than the original estimate of 10 million pages.  As such, 
the Air Force states that modification No. 16 was merely an 
incremental funding action that was intended to complete the 
requirement contained in modification No. 06 to digitize the agency's 
entire TO warehouse, and therefore is within the scope of MERC's 
contract.

ARC challenges the Air Force's actions, initiated with issuance of 
modification No. 06, to acquire digitization of the paper-based TOs 
through modifications to MERC's existing contract.  ARC argues that 
the modifications are outside the scope of the contract under which 
they were issued--delivery order No. 0005 awarded pursuant to MERC's 
BOA in 1993.

Once a contract is awarded, our Office will generally not consider 
protests against modifications to that contract, because such matters 
are related to contract administration and are beyond the scope of our 
bid protest function.  4 C.F.R.  sec.  21.5(a) (1998); Stoehner Sec. 
Servs., Inc., B-248077.3, Oct. 27, 1992, 92-2 CPD  para.  285 at 4.  The 
exception to this general rule is where, as here, it is alleged that a 
contract modification is beyond the scope of the original contract, 
since the work covered by the modification would otherwise be subject 
to the statutory requirements for competition (absent a valid 
determination that the work is appropriate for procurement on a 
sole-source basis).  Neil R. Gross & Co., Inc., B-237434, Feb. 23, 
1990, 90-1 CPD  para.  212 at 2, aff'd, The Dept. of Labor--Recon., 
B-237434.2, May 22, 1990, 90-1 CPD  para.  491.

As a preliminary matter, we conclude that the protest is untimely to 
the extent it challenges the Air Force's decision, initiated with 
modification No. 06, to acquire digitization of the TOs through 
modifications to MERC's existing contract.  As indicated above, 
modification No. 06 was issued in May 1995, 3-1/2 years before ARC 
filed its current protest.  ARC itself acknowledges that it was aware 
at the time of the Air Force's actions to procure these services from 
MERC,[3] yet there is no indication in the record that ARC ever 
formally protested the agency's actions.  Accordingly, ARC's protest, 
to the extent it challenges the agency's acquisition of the 
digitization effort through issuance in 1995 of modification No. 06 to 
MERC's underlying contract, is untimely since it was not filed until 
3-1/2 years after that modification was issued.  See 4 C.F.R.  sec.  
21.2(a)(2).

To the extent ARC challenges only the issuance of modification No. 16, 
while the protest on this ground appears to be timely, we see no basis 
to conclude that modification No. 16 is outside the scope of MERC's 
contract as amended by modification No. 06 because it does not change 
the fundamental nature and purpose of the contract.

In determining whether a modification triggers the competition 
requirements in the Competition in Contracting Act of 1984, 10 U.S.C.  sec.  
2304(a)(1)(A) (1994), we look to whether there is a material 
difference between the modified contract and the contract that was 
originally awarded.  Neil R. Gross & Co., Inc., supra, at 2-3; see 
AT&T Communications, Inc. v. Wiltel, Inc. 1 F.3d 1201, 1205 (Fed. Cir. 
1993).  Evidence of a material difference between the modification and 
the original contract is found by examining any changes in the type of 
work, performance period, and costs between the contract as awarded 
and as modified.  MCI Telecomms. Corp., B-276659.2, Sept. 29, 1997, 
97-2 CPD  para.  90 at 7-8.

As explained above, MERC's basic contract was awarded in 1993 for 
certain engineering services.  That contract was subsequently modified 
to change the terms to include the digitization of the TOs in the 
agency's warehouse.  Specifically, paragraph 3.13 of the SOW 
accompanying modification No. 06 to MERC's contract states in 
pertinent part:

     The contractor shall design, develop, and deploy, at WR-ALC, an 
     electronic document capture system and indexed image repository 
     for the electronic storage, retrieval and distribution of the 
     currently paper-based TOs stored in the WR-ALC TO warehouse. . . 
     .  The contractor shall conduct a pilot project to design, 
     develop, and deploy the document capture system and indexed image 
     repository; and digitize a minimum of [2 million] pages of 
     paper-based TOs stored in the TO warehouse.

Modification No. 06 SOW, May 4, 1995,  para.  3.13.

The record shows that subsequent modifications to MERC's contract, up 
to and including modification No. 14, dated September 30, 1997, funded 
the digitization of approximately 4 million pages to be digitized.  
Modification No. 16, issued on September 28, 1998, called for 
digitization of the remaining pages and increased funding by $1.6 
million to cover the work.  

Based on our review of these modifications, there is no basis to 
conclude that modification No. 16 added any new tasks that materially 
changed the purpose or nature of MERC's basic contract--the 
digitization of the entire TO warehouse.  The SOW accompanying 
modification No. 06 stated that "[a] document capture system and 
indexed image repository will be established for the conversion of 
[TOs] stored in the WR-ALC TO warehouse from paper to digital form."  
SOW, May 4, 1995,  para.  1.  The background section of the SOW went on to 
describe the agency's responsibility for managing and distributing 
approximately 44,000 paper-based TOs for major weapons systems, 
comprising an estimated 10 million pages stored in its warehouse, and 
described how cumbersome the existing system is to manage and operate.  
Although modification No. 06 tasked the contractor to digitize a 
minimum of 2 million pages of paper-based TOs, given the SOW's 
description of the challenges faced by the agency as a result of the 
paper-based TOs, a reading of the SOW as a whole leads to a conclusion 
that the SOW contemplated that the contractor would digitize the 
entire TO warehouse, estimated at 10 million pages.  In this 
connection, the SOW specifically stated that WR-ALC's objective was to 
eliminate the existing paper-based system, lending further support to 
our conclusion that modification No. 06 contemplated that MERC would 
digitize the entire TO warehouse.  Clearly, since the SOW accompanying 
modification No. 06 estimated the number of TOs in the warehouse at 10 
million pages, and tasked the contractor to digitize a minimum of 2 
million, it is reasonable to conclude that MERC's contract would have 
to be subsequently modified to achieve the agency's goal of digitizing 
the entire TO warehouse.

ARC argues that modification No. 16 should be compared with the 
original contract awarded to MERC in 1993--i.e., delivery order No. 
0005, issued pursuant to MERC's BOA--and not to any subsequent 
modifications to MERC's contract.  Comments at 7.  According to the 
protester, "[b]y definition, a modification cannot be considered as 
the basic or original contract."  Id.  We disagree.

Modifications, such as the one here, issued pursuant to the contract's 
changes clause serve several useful purposes.  For example, a 
modification provides the government flexibility by allowing 
alterations in the terms of the contract to accommodate changes in the 
government's needs and requirements.  See, e.g., Federal Acquisition 
Regulation  sec.  43.101 (a contract modification means any written change 
in the terms of the contract); John Cibinic, Jr. and Ralph C. Nash, 
Jr., Administration of Government Contracts, ch. 4,  sec.  I.A(1) at 282 
(2nd ed. 1985).  Modifications also allow procurement authority to the 
contracting officer to order additional work within the general scope 
of the contract, without using the procedures required for conducting 
a new procurement.  Id.  sec.  I.A(3) at 284.  A modification to a contract 
operates to create new legal relations between the parties, thus 
essentially creating a new agreement, the terms of which are partly to 
be found in the original agreement and partly in the new.   2 CORBIN 
ON CONTRACTS  sec.  303-304 (1950).

ARC's argument here overlooks the fact that with each modification, 
the terms of MERC's basic contract were changed to accommodate the 
agency's overall need, as reflected in modification No. 06, to 
digitize the entire TO warehouse.  Accordingly, a comparison of 
modification No. 16 to delivery order No. 0005, without regard to the 
impact of the intervening modifications--especially modification No. 
06, which contemplated the digitization of the entire TO warehouse--on 
the terms of MERC's basic contract, would not be appropriate, since 
such a comparison would disregard the new contract requirements.

The protester has not established that the fundamental nature and 
purpose of MERC's contract, as modified, were materially changed by 
modification No. 16 so as to require a separate competition.  See 
Hughes Space and Communications Co., 
B-276040, May 2, 1997, 97-1 CPD  para.  158 at 4; Master Sec., Inc., 
B-274990, B-274990.2, Jan. 14, 1997, 97-1 CPD  para.  21 at 6.  Modification 
No. 16 is merely an incremental action that was intended to complete 
the requirement contemplated in modification No. 06 to digitize the 
entire TO warehouse.

The protest is denied.

Comptroller General
of the United States

1. The contract was issued as delivery order No. 0005 under a basic 
ordering agreement (BOA) between MERC and the Air Force.  The order 
required MERC to investigate various computer-aided design (CAD) 
software programs to determine how CAD files could be converted from 
one format to another.  The order was issued on a sole-source basis 
pursuant to a justification and approval (J&A) executed on June 2, 
1992, which cited 10 U.S.C.  sec.  2304(c)(3) (1988) (maintenance of an 
essential engineering capability).

2. Modification No. 6 and subsequent modifications also relied on 
J&A's and cited 
10 U.S.C.  sec.  2304(c)(3) and (c)(1).  

3. Specifically, in its protest at 4, ARC states that "[b]etween the 
years 1995-1998 Protester has spoken with representatives [of the Air 
Force and the Small Business Administration] inquiring why [the] 
Contracting Agency was maintaining a sole-source position with regards 
to the digitization effort . . . in spite of the fact that large 
numbers of commercial firms could perform the work."