TITLE:  Lackland 21st Century Services Consolidated--Protest and Costs, B-285938.6, July 13, 2001
BNUMBER:  B-285938.6
DATE:  July 13, 2001
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Lackland 21st Century Services Consolidated--Protest and Costs, B-285938.6,
July 13, 2001

Decision

Matter of: Lackland 21st Century Services Consolidated--Protest and Costs

File: B-285938.6

Date: July 13, 2001

William A. Roberts, III, Esq., Phillip H. Harrington, Esq., William S.
Lieth, Esq., and Janet L. Eichers, Esq., Wiley, Rein & Fielding, and Helaine
G. Elderkin, Esq., Computer Sciences Corporation, for the protester.

Sharon A. Jenks, Esq., Department of the Air Force, for the agency.

Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest seeking reinstatement of an earlier protest, and a decision on
the merits of that protest because, in the protester's view, the agency has
unduly delayed taking the corrective action promised in response to the
earlier protest, is dismissed since the protester would have us consider a
proposed course of action that has been abandoned, and any dispute about
that action has been rendered academic.

2. Protester's request for a recommendation that it be reimbursed the cost
of filing an earlier protest challenging a cost comparison under Office of
Management and Budget Circular No. A-76 on the basis that the agency has not
yet awarded it the contract (the promised corrective action that led to the
dismissal of the earlier protest) is denied where the record shows that the
agency reasonably elected to delay award until completion of a review by the
agency's Office of Inspector General, which was, apparently, completed
approximately 5 months after our Office dismissed the earlier protest as
academic.

DECISION

Lackland 21st Century Services Consolidated (L-21) requests that our Office
reinstate and sustain its earlier protests of a decision by the Department
of the Air Force that it would be more economical to perform base operations
support at Lackland Air Force Base in-house, rather than by contract. We
dismissed those protests as academic after the Air Force advised our Office
that its review of the protest allegations and the record led it to conclude
that the decision should be reversed, and that the workload should instead
be performed by contract (and hence by L-21, since L-21 was the commercial
offeror whose proposal was selected under solicitation No. F41689-99-R-0031
for comparison with the government's in-house cost estimate under Office of
Management and Budget (OMB) Circular No. A-76). In addition, L-21 seeks a
recommendation that it be reimbursed the costs of filing and pursuing both
this request, and its earlier protests.

We dismiss L-21's request that we sustain its earlier protest on the basis
that the earlier protest remains academic; we deny L-21's request for
reimbursement of the costs of filing these protests.

BACKGROUND

L-21 initially protested to our Office on November 6, 2000 (B-285938.3), and
supplemented its protest on November 13 (B-285938.5). In these protests,
L-21 argued that errors in the agency's cost comparison led to an erroneous
conclusion that continued in-house performance of base operations support
would be more economical than contracting out the services.

By letter dated December 13, submitted in lieu of an agency report on the
merits, the Air Force explained that its review of L-21's protest
allegations and the record led it to conclude "that certain adjustments to
the cost comparison should be made. These adjustments have resulted in a
cost comparison decision favoring performance of the workload by contract."
The letter also acknowledged that L-21 had been selected as the contractor
to perform these services in an earlier part of the A-76 process, thus, the
letter, in effect, advised that the Air Force would be making award to L-21.
Given these conclusions, the Air Force requested that the protests be
dismissed as academic. By decision also dated December 13, we agreed and
dismissed the protests.

After our Office dismissed L-21's protest, the union representing base
support employees at Lackland filed a motion for a temporary restraining
order (TRO) in the United States District Court for the Western District of
Texas seeking to enjoin the Air Force from awarding this contract as
planned. This TRO was granted on December 20 and expired on December 30;
despite the expiration of the TRO, however, this litigation was not
dismissed by the court until March 7, 2001. Both the Air Force and L-21
advise our Office that the Air Force represented to the court that it would
not award a contract during the ongoing litigation without first providing
5 business days notice.

In addition to the court case, there were several other pertinent events
that occurred shortly after our Office dismissed L-21's protests. First, on
December 20 (the same day the district court granted the TRO), the Deputy
Secretary of the Department of Defense (DOD) requested a review by the DOD's
Office of Inspector General (IG) of the cost comparison performed under OMB
Circular No. A-76 to determine the most economical means of performing base
operations services at Lackland. [1] One day later, several members of
Congress from the state of Texas also requested an IG review of the cost
comparison. [2] On December 22, the IG formally advised the Air Force that
it was initiating an audit of the Lackland cost comparison review at the
request of the DOD Deputy Secretary. In this notice, the IG advises that its
"objective will be to determine whether the A-76 process was fairly and
impartially conducted by the Air Force during the Lackland Air Force Base
Study." [3] Finally, we note that by memorandum dated the same day, the
Under Secretary of the Air Force advised DOD management that due to the TRO
and the IG review the Air Force would await the end of the IG review to
award the contract to L-21. This memorandum also urged that the IG complete
its review within 30 days because of potential complications related to a
pending reduction in force at Lackland if the contract was not awarded prior
to April 1. [4]

Despite the Air Force request, the IG review was not completed in 30 days.
On May 11, L-21 filed the instant protest. In its protest filing, L-21
explains that it has learned that the IG "plans to conduct briefings and
other meetings with members of Congress and/or their staff on Monday, May
14, 2001, regarding their review of the Air Force's Lackland procurement, in
addition to publishing a report of findings." Protest at 9.

L-21 claims that the Air Force has improperly delayed taking the corrective
action it promised almost 5 months earlier. Although L-21 acknowledges that
this A-76 competition has been the subject of an ongoing review by the DOD
IG focused on the cost comparison process, and acknowledges the litigation
in the district court brought by the union representing Lackland employees,
it argues that neither the review nor the court case provided a valid basis
for the Air Force to refuse award to L-21 in the meanwhile. Thus, L-21 seeks
reinstatement of its earlier protest, a decision on the merits of that
protest, and reimbursement of its costs.

ANALYSIS

As a preliminary matter, we do not reinstate protests. A protest, like the
one here, that was once academic is not "revived" by subsequent agency
action. Instead, the subsequent action gives rise to a new basis for
protest, even if some of the issues raised by the subsequent action are the
same as the issues raised under the earlier protest. See Pemco Aeroplex,
Inc.-Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD para. 102
at 4-5. With respect to the specific request here, on December 13, the Air
Force conceded that its initial decision that it would be more economical to
perform base operations support at Lackland in-house, rather than contract
out this effort, was improper. Thus, the decision that L-21 would have us
consider no longer exists, and any dispute about that decision has been
rendered academic by the concession in the Air Force's letter of December
13. QuanTech, Inc.--Costs, B-278380.3, June 17, 1998, 98-1 CPD para. 165 at 2.

L-21 also seeks reimbursement of its protest costs based on the agency's
failure to promptly implement the corrective action it promised and upon
which we based the dismissal of its earlier protests. L-21 points out that
nearly 5 months after announcing its conclusion that the Lackland base
operations support workload should be performed by contract (and hence by
L-21), the Air Force still has not awarded the contract. In L-21's view, the
review by the DOD IG did not provide a reasonable basis not to award it the
contract. L-21 also suggests that the IG review, and the Air Force delay,
have been caused by political intervention that similarly provides no
reasonable basis for the delay.

With respect to protest costs, our Office may recommend that a protester be
reimbursed the costs of filing and pursuing a protest where the contracting
agency decides to take corrective action in response to the protest. 4
C.F.R. sect. 21.8(e). Such recommendations are generally based upon a concern
that an agency has taken longer than necessary to initiate corrective action
in the face of a clearly meritorious protest, thereby causing protesters to
expend unnecessary time and resources to make further use of the protest
process in order to obtain relief. QuanTech, Inc.--Costs, supra, at 2-3. We
will also award protest costs where an agency unduly delays the
implementation of promised corrective action that led to the dismissal of an
earlier protest. See, e.g., Pemco Aeroplex, Inc.--Recon. and Costs, supra,
at 6-7. We view the award of protest costs in such cases as appropriate
because a protest is not truly resolved until the agency implements the
promised corrective action that caused us to dismiss the protest. Commercial
Energies, Inc.--Recon. and Declaration to Entitlement of Costs, B-243718.2,
Dec. 3, 1991, 91-2 CPD para. 499 at 6.

L-21's claim that the Air Force has unduly delayed implementing corrective
action by withholding its award is based on its view that the agency is, in
actuality, responding to congressional pressure, which has led to what L-21
terms a "directed" review by the IG. L-21, in essence, posits a cascading
abdication of decisionmaking authority at every level in this process. Thus,
L-21 claims that the IG has abdicated its authority to select appropriate
matters for review to members of Congress from the State of Texas (the
"Texas congressional delegation"), while the Air Force (or the DOD) has
abdicated its authority to conduct a proper cost comparison review both to
the IG, and ultimately, to the Texas congressional delegation. L-21 argues
that a decision to delay the award of a contract, when made solely at the
request of members of Congress (or in response to a "directed" IG review
undertaken solely at the request of members of Congress) is improper. In
L-21's view, the Air Force must make an independent finding that a delay in
award is merited before such an action can be proper. Alternatively, L-21
argues that even if the IG review here was not initiated due to
congressional pressure, the Air Force still cannot reasonably rely on the IG
review as a basis for changing or delaying its intended corrective action
because the review here falls outside the scope of the IG's authority.

While L-21 complains about the actions of the Texas congressional delegation
and the IG, our bid protest jurisdiction is limited to review of whether
agencies' procurement actions complied with procurement statutes and
regulations, 31 U.S.C. sect.sect. 3551-52 (1994); evaluating the actions of the
Texas congressional delegation and assessing whether the IG acted properly
in initiating its investigation are not matters within the scope of our bid
protest jurisdiction. Accordingly, we have not explored those issues and we
express no view on them.

Our focus, instead, is on the propriety of the Air Force's actions and, in
particular, on whether the Air Force unduly delayed implementing its
corrective action. Pertinent to that inquiry is that the Air Force has not
to date reversed or abandoned its December 13 decision that L-21 had won the
cost comparison (and hence, should receive the award)--if the Air Force were
to reverse that decision (and then either keep the work in-house or
resolicit), L-21 could protest that action. At this point, however, the Air
Force has simply held in abeyance award to L-21 pending the outcome of the
IG's review. The question here is whether the Air Force has held award in
abeyance so long as to constitute undue delay.

In our view, it was reasonable for the Air Force to await the conclusion of
the IG's review, and then to take a reasonable amount of time to move
forward. While we recognize that agencies must retain affirmative authority
over their own decisions, and we have considered the cases cited by L-21
indicating that agencies may not abdicate their responsibilities in the face
of congressional or other pressure, see D.C. Fed'n of Civic Ass'ns v. Volpe,
459 F.2d 1231 (D.C. Cir. 1971); Peter Kiewit Sons' Co. v. U.S. Army Corps of
Eng'rs, 534 F. Supp. 1139 (D.D.C. 1982), rev'd, 714 F.2d 163 (D.C. Cir.
1983), we do not view the Air Force's decision to withhold award here
pending a review by the IG as constituting abdication of its
responsibilities. On the contrary: we view it as reasonable for an agency to
wait for the conclusion of an IG (or other) review before proceeding with
resolution of a public/private competition under OMB Circular A-76. We reach
this conclusion based upon the complexity of the issues presented by the
cost review; the need to consider the varied input received; and our
recognition of the disruption that may follow a decision to contract out
base operations support at this facility--thus abolishing the positions of
federal employees who currently perform these functions. Accordingly, we
conclude that the Air Force has not unduly delayed corrective action here.
[5]

The request for a recommendation that protest costs be reimbursed is denied.

Anthony H. Gamboa

General Counsel

Notes

1. Air Force Request for Summary Dismissal at 2.

2. Id. We note for the record, however, that L-21 claims (and the Air Force
materials suggest) that contact from the members of Congress may have
preceded the request for an IG review from the DOD's Deputy Secretary. Since
neither of these parties has provided our Office with the specific date, or
documentary evidence, of this contact, this chronology is based upon the
date of the congressional request provided by the Air Force in its request
for summary dismissal, and not contested by the protester. In any event, the
outcome here is not affected by whether the congressional request for an IG
review came first, or followed the request for a review by the DOD's Deputy
Secretary.

3. Memorandum for Assistant Secretary of the Air Force (Financial Management
and Controller) from the IG, Dec. 22, 2000.

4. Memorandum for Under Secretary of Defense (Acquisition, Technology and
Logistics) from Under Secretary of the Air Force, Dec. 22, 2000.

5. While this matter was pending, the IG apparently provided its report to
the agency. We would now expect the Air Force to move forward on whatever
course the agency decides to adopt, within a reasonable amount of time.