TITLE:  Floro & Associates, B-285451.3; B-285451.4, October 25, 2000
BNUMBER:  B-285451.3; B-285451.4
DATE:  October 25, 2000
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Floro & Associates, B-285451.3; B-285451.4, October 25, 2000

Decision

Matter of: Floro & Associates

File: B-285451.3; B-285451.4

Date: October 25, 2000

Terry E. Thomason, Esq., and Jonathan A. Swanson, Esq., Carlsmith Ball, for
the protester.

Adele Ross Vine, Esq., General Services Administration; Raymond M. Saunders,
Esq., Department of the Army; and Laura J. Mann, Esq., Small Business
Administration, for the agencies.

Charles W. Morrow, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Task order for management support services improperly exceeded the scope of
multiple award, indefinite-delivery/indefinite-quantity, section 8(a)
contract for noncomplex integration services where the work required by the
task order is materially different from the scope of work set forth or
reasonably contemplated under the contract.

DECISION

Floro & Associates protests task order No. T0600BN2014 for management
services for the Department of the Army, Tripler Army Medical Center,
Hawaii, issued by the General Services Administration (GSA) to SMF Systems
Corporation under SMF's section 8(a), multiple award,
indefinite-delivery/indefinite-quantity (MAIDIQ) contract No. GS00K97AFD2187
with GSA and the Small Business Administration (SBA). [1] Floro contends
that the Army violated the Economy Act, 31 U.S.C. sect. 1535 (1994), by having
GSA acquire the services without proper authority and that the task order
was beyond the scope of SMF's MAIDIQ contract.

We sustain the protest.

Since February 1997, the Pacific e-Health Innovation Center (P-EIC), Tripler
Army Medical Center, has obtained information technology resources pursuant
to an interagency agreement with GSA, which authorizes GSA to procure
information technology for the Army from third parties. [2] GSA Agency
Report, exh. 23, Service Agreement. In early March 2000, the Army enlisted
the services of GSA, based on this agreement, to procure a "new government
requirement" for "collaboration and distance learning/mentorship management"
services for P-EIC. See Army Agency Report, Program Manager's Memorandum for
Record, Aug. 14, 2000, at para. 2.

The statement of work (SOW) for this requirement stated the scope as
follows:

The Contractor shall provide management services in support of the P-EIC's
Collaboration and Distance Learning and Mentorship product lines. P-EIC's
projects represent both prototyping and research projects and emerging
technology projects which have a concentration in technology development and
demonstration/validation, and maturation.

GSA Agency Report, exh. 3, SOW para. 2.3. The two major specific tasks of the
SOW were:

Task 2: E-health New Initiatives and Collaboration Product Line Management.
The Contractor shall provide one half of a full-time equivalent (FTE) of a
senior level project manager to support the P-EIC Program Manager in
planning and executing the E-health New Initiatives and Collaboration
Product Line. This shall include identification of potential collaboration
and partnership opportunities for the P-EIC, coordinating and effecting
discussions and agreements with collaborative/partner organizations,
including federal, state and private organizations, and developing project
plans for resulting projects. The Contractor shall define plan of approach,
process, and established criteria for engaging in new business opportunities
and collaborations.

. . . . .

Task 3: Distance Learning and Mentorship Product Line Management. The
Contractor shall provide one half of a FTE of a senior level project manager
to support the P-EIC Program Manager in planning and executing the Distance
Learning and Mentorship Product Line. The contractor shall develop and
demonstrate programs to provide for evolving technology-based learning
programs and leveraging of existing programs related to healthcare
technology learning/mentorship. The predominant outcome of activities within
this pillar shall be education and training. These programs shall include
federal, state and other Hawaii-based organizations. The focus of the
efforts will be evolving technology-based learning programs and leveraging
of existing programs.

Id., para.para. 3.2, 3.3. Each of these tasks had numerous subtasks. [3]

To fulfill the Army's requirements, GSA, by letter dated March 3, 2000,
solicited proposals from Federal Supply Schedule (FSS) vendors and non-FSS
vendors. The letter explained that the evaluation of proposals would be
based on the vendor's capacity, technical proposal, past performance, and
price, with award to be based on the best value. Floro, which was under
contract with the Army for similar services, and SMF were among vendors who
submitted quotes by the March 17 due date. [4] Protest (May 22, 2000), encl.
at 17. After evaluating the quotes, on April 3, GSA issued a task order to
SMF at a price of $141,600 on the basis that SMF's proposal represented the
best value of the proposals received. GSA Agency Report, exh. 4, Purchase
Order.

Following an agency debriefing, Floro filed a protest at this Office
challenging the order. Floro contended that the procurement was an illegal
interagency contract, was conducted under the FSS program to obtain a
non-FSS item, and that GSA had improperly evaluated Floro's proposal.
Protest (May 22, 2000) at 3-6. On June 7, GSA notified this Office that the
competition was inadvertently conducted between FSS and non-FSS contract
holders, and that GSA would cancel the award to SMF and "review the needs of
the Department of the Army for support services to determine the most
appropriate procurement method to be utilized." GSA Letter (June 7, 2000).
We therefore dismissed the protest on June 8.

On June 13, Floro requested reinstatement of its earlier protest because SMF
had continued work under the order, notwithstanding GSA's promised
corrective action. On June 20, GSA explained that because "[t]he contracting
officer responsible for the procurement was absent from the office for
several days following" the June 7 letter, the promised corrective action
had not been implemented, and provided evidence that it terminated SMF's
order effective June 20. Consequently, our Office dismissed Floro's request
for reinstatement. On June 23, Floro submitted a request that we recommend
that Floro be reimbursed its costs of pursuing these protests.

On June 28, GSA again issued a task order to SMF for the Army's requirement,
in the amount of $119,760, this time under SMF's 8(a) MAIDIQ contract with
GSA. [5] GSA Agency Report, exh. 12. In 1997, GSA had entered into the
competitively awarded MAIDIQ contract with SMF under the SBA's section 8(a)
program under the Federal Acquisition Services for Technology (FAST)
program. The scope of the SMF MAIDIQ contract states:

The Contractor shall provide non-complex systems integration services under
SIC 7373 for GSA client agencies. [6]

GSA Agency Report, exh. 26, sect. C.3. The SOW for SMF's MAIDIQ contract
provides

The Contractor shall integrate commercially available off-the-shelf hardware
and software resulting in a turnkey system for the GSA client agency. Tasks
that may be required of the Contractor include but are not limited to the
following:

o Documentation preparation

o System Design

o Evaluation of alternative implementations

o Develop integration plans

o Acquire hardware/software

o Component integration

o Test components and systems

o Installation of non-complex systems

o Maintenance and repair of non-complex systems

o Training on installed non-complex systems

Id. sect. C.4.1.

Floro first contends that the procurement conducted by GSA on behalf of the
Army constituted an "illegal off-load" by the Army that violated the Economy
Act because the Army neglected to prepare a determination and finding
documenting that the requirement could not be obtained as conveniently or
economically by contracting directly with a private source, as required by
Federal Acquisition Regulation (FAR) sect. 17.503(a)(2). Protest at 5-6.

Under the Economy Act, an agency may enter into an inter-agency agreement to
fulfill its requirements under another agency's contract, provided the
requirements of the Act are met. 31 U.S.C. sect. 1535; N&N Travel Tours et al.,
B-285164.2, B-285164.3, Aug. 31, 2000, 2000 CPD para.___ at 5. The Economy Act
applies to inter-agency acquisitions unless there is more specific authority
for such transactions. See FAR sect. 17.500(b).

GSA argues that the Economy Act did not apply to the transaction because GSA
had specific authority to conduct the procurement under the Clinger-Cohen
Act, pursuant to which OMB has authorized GSA to purchase information
technology on behalf of agencies such as the Army. GSA Agency Report at 3-6.
Floro responds that the Clinger-Cohen Act does not provide GSA with specific
authority to avoid the applicability of the Economy Act because the
Clinger-Cohen Act is only applicable where GSA is acquiring "information
technology," as defined in the Clinger-Cohen Act, and this requirement does
not fall under that definition. [7] Protester's Comments at 7-10.

We need not resolve whether the Army's requirement constitutes information
technology, as defined by the Clinger-Cohen Act, or whether the authority
contained in that Act is otherwise applicable to this transaction, because
GSA has the authority to conduct this procurement to fulfill the Army's
requirements under the Federal Property and Administrative Services Act of
1949, under which GSA is authorized to "procure and supply personal property
and nonpersonal services for the use of executive agencies in the proper
discharge of their responsibilities." See 40 U.S.C. sect. 481(a)(3) (1994). We
think this broad authority encompasses the requirement being procured here,
so that the Economy Act is not applicable to this transaction. See N&N
Travel & Tours, Inc. et al., supra.

Floro also protests that the recent task order issued by GSA exceeds the
scope of SMF's 8(a) MAIDIQ contract. [8] We agree.

While 41 U.S.C. sect. 253j(d) (1994) generally precludes protests in connection
with issuance or proposed issuance of a task order placed against an
indefinite-delivery/indefinite quantity contract, protests, such as Floro's,
on the ground that the order increases the scope, period, or maximum value
of the contract under which the order is issued are authorized. In
determining whether a task order is beyond the scope of the original
contract, this Office considers whether there is a material difference
between the task order and that contract. Evidence of such a material
difference is found by reviewing the circumstances attending the procurement
that was conducted; examining any changes in the type of work, performance
period, and costs between the contract as awarded and as modified by the
task order; and considering whether the original contract solicitation
adequately advised offerors of the potential for the type of task order
issued. The overall inquiry is "whether the modification is of a nature
which potential offerors would reasonably have anticipated." Makro
Janitorial Servs., Inc., B-282690, Aug. 18, 1999, 99-2 CPD para. 39 at 3; Ervin
and Assocs., Inc., B-278850, Mar. 23, 1998, 98-1 CPD para. 89 at 7.

We find the task order went beyond the scope of SMF's MAIDIQ contract for
"noncomplex integration services" of commercially available off-the-shelf
hardware and software resulting in turnkey systems for GSA's client
agencies. This task order, on its face, does not call for or apparently
include hardware/software integration services. [9] Instead, under this task
order, the contractor is required to provide management services to assist
P-EIC in support of the P-EIC's Collaboration and Distance Learning
Mentorship product lines. There is no indication that this task order
entails integrating hardware and software, but by its terms it includes such
activities as assisting in publicity; identifying federal, state and private
opportunities for potential collaboration/partnership with the P-EIC; and
monitoring, tracking, and overseeing the execution of new initiatives
involving e-health. See GSA Agency Report, exh. 3, Task Order, at 2-4. While
it may be that the P-EIC's projects involve the use/application of
information technology to improve healthcare or access to healthcare, as
posited by GSA, and that the management support under the task order relates
to information technology because the project involves web-based tools, from
our review we find no tasks or subtasks included in the SOW for this order
that are susceptible of being classified as non-complex integration
services. In sum, we conclude that the work delineated under the task order
is materially different from the work contemplated under SMF's MAIDIQ
contract and therefore exceeds that contract's scope.

The protest is sustained.

We recommend that GSA terminate the task order issued to SMF and that this
requirement be procured in accordance with the statutory and regulatory
competition requirements. We also recommend that the protester be reimbursed
the reasonable cost of filing and pursuing its protests, including
attorneys' fees. [10] 4 C.F.R. sect. 21.8(d)(1). The protester should submit its
certified claim for such costs, detailing the time expended and the costs
incurred, directly to the contracting agency within 60 days of receiving
this decision.

Anthony H. Gamboa

Acting General Counsel

Notes

1. Section 8(a) of the Small Business Act authorizes the SBA to contract
with government agencies and arrange for the performance of such contracts
by awarding subcontracts to socially and economically disadvantaged small
businesses. 15 U.S.C. sect. 637(a) (1994).

2. The Clinger-Cohen Act of 1996 (originally called the Information
Technology Management Reform Act of 1996), 40 U.S.C. sect. 1412 (e) (Supp. IV
1998), authorizes the Director of the Office of Management and Budget (OMB)
to designate "one or more heads of executive agencies as executive agent for
Government-wide acquisitions of information technology." GSA cites OMB's
letters dated August 2, 1996 and September 23, 1998, which designated GSA as
such an agent, as the authority for the agreement. GSA Agency Report, exhs.
19a, 19b.

3. Task 1 of the SOW was for task order management that included work
apparently ancillary to the performance of the other SOW tasks. GSA Agency
Report, exh. 3, SOW para. 3.1.

4. The record does not show whether SMF or Floro held an FSS contract
against which this specific requirement could be ordered. The record shows
that GSA considered SMF to be an FSS contractor, although the record does
not indicate whether the solicited services could be obtained under an FSS
contract. GSA Letter (June 7, 2000).

5. The Army states that following Floro's earlier protests and prior to the
termination of SMF's task order, GSA asked the Army: "was [the Army]
requirement still required; was [the Army] pleased with SMF's performance to
date; and would [the Army] desire SMF to continue the work." The Army
responded "yes" to these questions and that it could "absorb no more than a
1-week break in service." Army Agency Report, Memorandum for Record para. 4.

6. SIC Code 7373 is entitled Computer Integrated Systems Design. 13 C.F.R sect.
121.201 (2000).

7. The Act provides that the term "information technology" "means any
equipment or interconnected system or subsystem of equipment, that is used
in the automatic acquisition, storage, manipulation, management, movement,
control, display, switching, interchange, transmission, or reception of data
or information," including "computers, ancillary equipment, software,
firmware and similar procedures, services (including support services), and
related resources." 40 U.S.C. sect. 1401(3) (Supp. IV 1998).

8. While GSA argues that this protest contention is untimely, it was based
upon documents first obtained in the agency report and raised in Floro's
comments filed within 10 days of its receipt of the report, Protester's
Comments at 10; thus, we consider Floro's protest to be timely filed.
4 C.F.R. sect. 21.2(a)(2) (2000). GSA also argues that Floro is not an
interested party because it is not an 8(a) concern and the order was placed
under a 8(a) contract; this contention is meritless because Floro's argument
is that the order was beyond the scope of the 8(a) contract.

9. Systems integration generally involves combining diverse elements of
hardware and software often acquired from different vendors into a unified
system. See Computer Dictionary 195 (3rd ed. 1992); Dictionary of Computers,
Information Processing & Telecommunications 629 (2nd ed. 1987); Webster's
New World Dictionary of Computer Terms 211 (4th ed. 1992).

10. In addition to Floro's costs of pursuing the present protest, we
recommend that Floro be reimbursed the costs of pursuing its earlier
protests of GSA's actions in procuring these services from SMF. We make this
recommendation because the agency's purported corrective action in response
to those protests was to improperly add the work to SMF's contract and
because nothing in the record suggests that the work could have been ordered
from SMF's FSS contract as GSA originally did. See Louisiana Clearwater,
Inc.-Reconsideration and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000
CPD para. __ at 5-6 (protester entitled to initial protest costs where
corrective action in response to that protest fails to address a meritorious
issue that prompted the corrective action); Commercial Energies, Inc.-Recon.
and Declaration of Entitlement to Costs, B-243718.2, Dec. 3, 1991, 91-2 CPD
para. 499 at 5-6 (protester entitled to protest costs where agency does not take
reasonable corrective action as it promised).