TITLE:  United International Investigative Services, Inc., B-284871, June 15, 2000
BNUMBER:  B-284871
DATE:  June 15, 2000
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United International Investigative Services, Inc., B-284871, June 15, 2000

Decision

Matter of: United International Investigative Services, Inc.

File: B-284871

Date: June 15, 2000

Brian T. Scher, Esq., Ira E. Hoffman, Esq., and Alan M. Grayson, Esq.,
Grayson & Kubli, for the protester.

Dennis J. Gallagher, Esq., Department of State, for the agency.

Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that request for proposals for guard services was ambiguous is
denied where, when read as a whole, there are no material discrepancies
between the various RFP provisions as alleged by the protester.

DECISION

United International Investigative Services, Inc. (UIIS) protests several
alleged improprieties in request for proposals (RFP) No. S-KE500-99-R-9999,
issued by the Department of State for guard services. The protester alleges
that the RFP is ambiguous because there are several material discrepancies
between the original RFP's terms and provisions incorporated by amendment.

We deny the protest.

Issued on November 10, 1999, the RFP solicited offers for providing guard
services at the American Embassy in Nairobi, Kenya; proposals were due by
March 24, 2000. The RFP stated that the Embassy required guard services to
prevent unauthorized access; protect life; maintain order; deter criminal
attacks against employees, dependents and property; deter terrorist acts
against all assets; and prevent damage to government property. RFP sect. C.1.1.
The RFP contemplated a level-of-effort contract, to be paid at fixed hourly
rates, for a basic period of 1 year with options for 4 additional years. RFP
sect. B. The RFP stated that the contract would be awarded to the lowest-priced,
technically acceptable offeror. RFP sect.sect. M.1.2, M.3.

The RFP advised offerors that UIIS was the incumbent contractor, that
current employees were covered by a Collective Bargaining Agreement (CBA)
which controlled their wages and benefits, and that offerors could obtain a
copy of the CBA upon written request. RFP, Cover Letter, at 2. The RFP
required any new contractor to give guards who were under contract with UIIS
and who were terminated as a result of the change in contractors the right
of first refusal for employment openings under the new contract for
positions for which they were qualified. RFP sect. I.3.

The RFP recognized that the competition might result in lower compensation
being given to contractor employees and that reduced compensation might be
detrimental to obtaining the quality of services needed. The RFP required
offers to include an employee compensation plan which would be evaluated to
ensure that it reflected a sound management approach and understanding of
the requirements. The RFP stated that the compensation proposed would be
considered in terms of its impact upon recruiting and retention, realism,
and consistency with the total compensation plan. RFP sect. L.1.3.4(2)(a). The
RFP specifically stated:

[P]roposals envisioning compensation levels lower than the current
contractor for the same work will be evaluated on the basis of maintaining
program continuity, uninterrupted high-quality work, and availability of
required competent service employees. Offerors are cautioned that lower
compensation for essentially the same work may indicate lack of sound
management judgment and lack of understanding of the requirement.

RFP sect. L.1.3.4(2)(b).

The RFP included a price adjustment clause that stated:

The contract price may be increased or decreased in actual costs of direct
service labor which result directly from laws enacted and effective during
the term of this contract by the Kenyan Government, not actions taken by the
Contractor solely in its implementation and execution of a Collective
Bargaining Agreement.

RFP sect. B.5.

A preproposal conference was held with potential offerors on December 8,
1999, at which time the contracting officer gave out copies of UIIS's CBA
(as amended on September 1, 1998). Agency Report, Tab 51, Preproposal
Conference Notes, at 2. At the end of that meeting, two UIIS employees
distributed copies of a "draft" CBA (dated November 17, 1999) along with a
letter from a Kenyan District

Labour Officer (dated January 14, 1999) stating that any company taking over
for UIIS as the Embassy guard services contractor would have to abide by
UIIS's CBA with the union. [1]

The Embassy sought the advice of a local private attorney, who advised:

[The CBA] was a personal agreement between [UIIS] and the Union. We do not
see that that [CBA] can be binding either on the Embassy or on any other
contractor employed by the Embassy.

Agency Report, Tab 58, Letter from Hamilton, Harrison & Mathews to
Contracting Officer 1 (Dec. 16, 1999).

Between December 21, 1999, and January 20, 2000, the Embassy's private
attorney wrote (on four separate occasions) to the District Labour Officer
asking that he provide the legal authority for his position that the CBA
would bind a successor guard services contractor. [2] The District Labour
Officer never responded to the lawyer's inquiries. Contracting Officer's
Statement at 24.

In mid-January 2000, a potential offeror wrote to the agency, specifically
referenced the CBA amendment and the District Labour Officer's letter that
were distributed by UIIS, and asked for a determination whether the next
guard services contractor would be required to abide by the wages and
benefits set forth in UIIS's CBA. Contracting Officer's Statement at 25;
Agency Report, Tab 85, Letter from [deleted] to the Contracting Officer 1-2
(Jan. 17, 2000). The Embassy then wrote to the Permanent Secretary of Labour
of the Republic of Kenya, explained that the Embassy was not a party to the
CBA, and asked for clarification of why the Government of Kenya believed
that the incumbent's CBA would be binding on the next contractor.
Contracting Officer's Statement at 25-26; Agency Report, Tab 90, Letter from
Embassy Nairobi Deputy Chief of Mission to Permanent Secretary of Labour of
the Republic of Kenya 1-2 (Jan. 19, 2000).

The agency amended the RFP on February 22, specifically addressing the
applicability of UIIS's CBA as follows:

A(1) The [CBA] of September 1998 referenced in the solicitation was
negotiated by the incumbent contractor. Said contractor is the only
contractor required to comply with this CBA.

. . . . .

(3) The Government's intent of addressing the CBA in the solicitation cover
letter and commonly asked questions and answers, was merely to ensure that
all Offerors were aware of the wages and benefits being paid to guard
personnel under the present [local guard program] contract.

(4) Offerors are reminded that the solicitation does not require compliance
with this CBA.

(5) Upon advice of our local counsel, it is the position of the Embassy that
a successor contractor would not be obliged to comply with this CBA by local
law or by the Ministry of Labor, despite information provided to the
contrary by the incumbent contractor. Should a successor contractor incur
costs in reliance upon this response that are not included in its offered
price, as a result of actions of the host government, the Embassy would
recognize entitlement to an equitable adjustment to reimburse the successor
contractor for such costs, if the Department concurs at that point that no
further challenge to the host government's actions should be pursued under
local law or if no further challenge is possible.

(6) Offerors are required by the solicitation to submit a compensation plan.
. . . [E]ach offeror must make an assessment of the solicitation
requirements . . . and then make its independent business and pricing
decisions accordingly.

RFP amend. 4, at 3.

On February 24, the contracting officer and the Embassy Nairobi Deputy Chief
of Mission met with the Permanent Secretary of Labour of the Republic of
Kenya to discuss the CBA matter. According to the contracting officer, the
Permanent Secretary of Labour "vehemently" stated that the CBA would only
bind the parties to that agreement and that he had no idea why the District
Labour Officer had issued a contrary opinion. [3] Contracting Officer's
Statement at 30-31; see also Agency Report, Tab 116, Memorandum from Deputy
Chief Industrial Relations Officer, Ministry of Labour and Human Resource
Development 2 (Feb. 24, 2000).

At the end of February, negotiations between UIIS and the union broke down
and the CBA expired. UIIS notified its employees and the Embassy that the
CBA would not be renewed because the union's demands were unreasonable and
that it would continue to employ all personnel under the same pay conditions
as had been in effect for the past year. [4] Agency Report, Tab 122, Letter
from CEO/President of UIIS to UIIS Employees 1 (Feb. 29, 2000); Agency
Report, attach. 1, RSO Declaration, para.para. 4-5. On March 3, the Embassy issued
an RFP amendment informing potential offerors of these new facts.
Contracting Officer's Statement at 34-35. The amendment also stated:

For informational purposes only, the Embassy received official confirmation
from the Kenyan Ministry of Labour and Human Resource Development, that only
the current [local guard program] contractor was required to comply with the
[CBA] despite any information provided to the contrary. If any offeror is
interested in receiving a copy of this official confirmation, it may do so
with a written request to the Contracting Officer.

RFP amend. 7, at 2.

The essence of UIIS's protest is that there are several conflicts between
the original RFP and various RFP amendments, and between the two opinions
issued by officials of the Kenyan Ministry of Labour and Human Resource
Development, regarding applicability of the CBA that cannot be resolved,
thus creating ambiguities and preventing offerors from competing on an equal
basis. Protest at 6-7.

An RFP's provisions must be sufficiently definite and free from ambiguity to
permit competition on a common basis. An ambiguity exists if provisions are
subject to more than one reasonable interpretation. Toxicology Testing
Servs., Inc., B-219131.2, Oct. 28, 1985, 85-2 CPD para. 469 at 4. Where a
dispute exists as to the meaning of RFP provisions, we will resolve the
matter by reading the RFP as a whole and in the manner that gives effect to
all its provisions. See D&L Constr. Co., Inc., B-279132, May 11, 1998, 98-1
CPD para. 136 at 4. Reading the RFP, RFP amendments, and the opinions of the
Kenyan Ministry of Labour against the background presented above and in
light of the protest arguments, we do not agree that the RFP provisions are
contradictory or ambiguous.

The protester alleges that the RFP's price adjustment clause (RFP sect. B.5) and
amendment 4 (both quoted above) are in direct conflict. Basically, UIIS
contends that the RFP's price adjustment clause states that the contractor
will not be entitled to an equitable adjustment for implementation of a CBA,
but amendment 4 states that a successor contractor may be entitled to an
equitable adjustment if it incurs costs that were not included in its
offered price because of a determination that UIIS's CBA applies to it.
Protest at 6. We do not agree that an irreconcilable conflict exists between
these provisions.

The price adjustment clause (RFP sect. B.5) specifically stated that a price
adjustment would not be allowed where the sole basis for the claim was that
the contractor was implementing/executing a CBA. The agency states that UIIS
previously had requested a price adjustment when it received Kenyan approval
of the CBA it negotiated with the union. The agency explains that it
therefore modified its standard price adjustment clause to limit price
increases for direct service labor costs to those instances where labor cost
increases were due to Kenya's enacting a new law after contract award, and
to clarify that the contractor's negotiation and acceptance of a CBA, even
if subject to Kenyan approval, would not be considered enactment of a new
law for purposes of price adjustments. Agency Report at 5, 7-8

After UIIS distributed its "draft" CBA and the District Labour Officer's
opinion, the Embassy reasonably tried to ascertain whether a follow-on
contractor would really be bound by UIIS's CBA. In addition to trying to
contact the District Labour Officer for clarification, the Embassy sought
the advice of both private counsel and the Permanent Secretary of Labour of
the Republic of Kenya--the host country's chief labor official--both of whom
indicated that a new contractor would not be bound. Agency Report at 7. The
Embassy then issued RFP amendment 4 to inform offerors of the Embassy's
position that contractors other than UIIS would not be bound by UIIS's CBA.
In this regard, the Embassy reasonably provided relevant information that it
had obtained in order to counteract the earlier and possibly incorrect

information disseminated by UIIS so that offerors would have a clearer
understanding of their obligations concerning employee compensation. See
Alpha Q, Inc., B-248706, Sept. 18, 1992, 92-2 CPD para. 189 at 3.

Amendment 4 also clarified that, in the event an offeror relied upon the
Embassy's advice that the CBA was not applicable to it and subsequently
incurred higher labor costs because the Government of Kenya decided that the
higher CBA rates were applicable to the new contractor, then the Embassy
would recognize that contractor's entitlement to reimbursement for the
higher labor costs. We do not see how this provision conflicts with the
original price adjustment clause. Rather, it is clear from reading both
provisions in light of the circumstances of this procurement that
amendment 4 represents a further modification of the standard price
adjustment clause. Reading both provisions together, it is clear that price
adjustments will be considered for direct service labor costs in two
circumstances: (1) if a law is enacted by Kenya affecting labor costs after
contract award; and (2) if Kenya decides that UIIS's CBA is legally
applicable to a new contractor.

The protester asserts that the conflicting opinions issued by the Kenyan
Ministry of Labour regarding applicability of UIIS's CBA to a new contractor
created an ambiguity. Protest at 6-7. Again, we do not agree. After UIIS's
distribution of the District Labour Officer's opinion, the Embassy inquired
and obtained the opinion of the Kenyan Permanent Secretary of Labour on this
issue. As it is undisputed that the Permanent Secretary of Labour is the
highest labor official in the country and that he issued his opinion after
he was informed of the District Labour Officer's earlier contrary opinion,
it is clear that the Permanent Secretary of Labour repudiated the earlier,
lower-level opinion. As discussed above, the Embassy issued amendment 4,
informing offerors that UIIS's CBA would not bind the successor contractor,
consistent with the Permanent Secretary of Labour's opinion on the issue.
[5] Again, the Embassy reasonably provided this relevant information, which
was material to potential offerors' pricing decisions, to offerors through
amendment 4. See Alpha Q, Inc., supra, at 3.

UIIS next alleges that RFP amendment 4, which states that UIIS is the only
contractor that is required to comply with the September 1998 CBA, is
ambiguous because it is unclear whether the Embassy will require UIIS to
comply with the CBA even though it has expired. Protest at 7. The agency
responds that amendment 4, by its express terms, clearly states that it
imposes no obligations on UIIS or any other offeror to comply with UIIS's
CBA. Agency Report at 9. Amendment 4, quoted in full above, pointed out that
the incumbent contractor (i.e., UIIS) was the only contractor that was
required to comply with the CBA of September 1998, and also specifically
stated: "Offerors are reminded that the solicitation does not require
compliance with this CBA." Thus, it is clear from the amendment that the
Embassy does not intend to enforce compliance with the September 1998 CBA,
and since that CBA expired on March 1, 2000, we do not see how the RFP
amendment could be read as requiring UIIS to comply with it, either. To the
extent that UIIS may have negotiated, or will negotiate, a new CBA with its
union, that agreement and not the RFP will require UIIS to comply with its
terms regarding compensation.

The protester alleges that there is an ambiguity because RFP sect. I.3 requires
a new contractor to offer employment to current employees, but does not
state whether those offers of employment must be made at the employees'
current wage and benefit rates. While RFP sect. I.3, quoted above, was silent
regarding whether a new contractor must pay any incumbent contractor
employees it hires at the rates presently paid by UIIS, RFP amendment 4
specifically stated that offerors were not required to comply with the CBA
signed by UIIS. Moreover, the RFP required offerors to submit a compensation
plan for evaluation and specifically envisioned that offerors might lower
the compensation levels currently paid to employees. RFP sect. L.1.3.4(2). In
this regard, amendment 4 indicated that, when making their compensation
proposals, offerors must make independent business and pricing decisions.
Reading these provisions together, it is clear that a new contractor will
have to pay the rates set forth in the compensation plan it submits and will
not be required by its Embassy contract to pay the same rates that UIIS has
paid even if it hires UIIS's former employees.

The protest is denied.

Comptroller General
of the United States

Notes

1. The record shows that the Embassy officials disapproved of UIIS's
distribution of this information to potential offerors, because UIIS had not
notified the contracting officer of the CBA changes and because they
believed that UIIS was trying to discourage potential offerors from
underbidding UIIS's current wage structure. The agency considered
disqualifying UIIS from the competition, but did not. Agency Report at 5-6.

2. On the fourth occasion, the agency's lawyer was advised that the District
Labour Officer had been transferred to Mombasa. Contracting Officer's
Statement at 24.

3. The Permanent Secretary of Labour confirmed this in writing, stating
that, subject to further investigation, the CBA would bind only those
parties that had signed it, but would not bind any other parties. Agency
Report, Tab 105, Letter from the Permanent Secretary of Labour to Embassy
Nairobi 1 (Apr. 2, 2000).

4. During a February 28 meeting with the Embassy's Regional Security Officer
(RSO), union representatives stated that they wanted guards' wages to be
more than doubled; the RSO responded that the present wages were already
[deleted] the prevailing wages, and the union's position was unrealistic.
Agency Report, attach. 1, RSO Declaration, para.para. 4-5. Also, UIIS reported to
our Office that it was still negotiating with the union, that the parties
had agreed upon the principal terms of a new CBA, but UIIS was hesitant to
execute a new CBA because the alleged ambiguities in the RFP made it unclear
how the new CBA would affect UIIS's ability to compete for the follow-on
contract. Letter from Protester to GAO 3 (Mar. 17, 2000).

5. The two Kenyan officials' opinions on the applicability of the CBA
include no citations to Kenyan laws, regulations, or court cases, and
neither party to this protest has proffered any such citations. As the
contract will be performed outside the United States, the Service Contract
Act is not applicable. Federal Acquisition Regulation sect. 22.1003-2.