TITLE:  Instrument Control Service, Inc.; Science & Management Resources,, B-289660; B-289660.2, April 15, 2002
BNUMBER:  B-289660; B-289660.2
DATE:  April 15, 2002
**********************************************************************
Instrument Control Service, Inc.; Science & Management Resources,, B-289660;
B-289660.2, April 15, 2002

Decision

Matter of:   Instrument Control Service, Inc.; Science & Management
Resources, Inc.

File:            B-289660; B-289660.2

Date:              April 15, 2002

Larry E. McKee for Instrument Control Service, Inc., and Eleanor L. Frommel
for Science & Management Resources, Inc., the protesters.
Capt. Christopher L. McMahon and Bradley S. Adams, Esq., Department of the
Air Force, for the agency.
Louis A. Chiarella, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency is not required to include in a solicitation a wage conformance
from the prior service contract for employee classes not included in the
applicable Service Contract Act wage determination.

2.  Protests that solicitation requirement that items be calibrated within 5
workdays is unnecessary and unattainable are denied where the agency has
reasonably explained its need for the requirement and why it is not
unattainable, and the protesters have not shown the requirement is
unnecessary or unattainable.

DECISION

Instrument Control Service, Inc. (ICS) and Science & Management Resources,
Inc. (SMR) protest the terms of request for proposals (RFP) No.
F09650-01-R-0256, issued by the Department of the Air Force, for calibration
and repair services of test, measurement, and diagnostic equipment (TMDE) at
the Precision Measurement Equipment Laboratory (PMEL), Warner Robins Air
Logistics Center (WR-ALC), Robins Air Force Base, Georgia.  ICS contends
that the solicitation is defective in that it does not include conformed
wage determinations available from the previous contract.  ICS and SMR both
contend that the solicitation is defective in that the
5-workday turnaround time for each TMDE item serviced is an unnecessary and
unattainable requirement.

We deny the protests.
WR-ALC performs inspections and depot maintenance for certain types of Air
Force aircraft.  The WR-ALC PMEL calibrates, repairs, and certifies the TMDE
used by the agency to accomplish these aircraft maintenance and inspection
functions.  On December 7, 2001, the agency issued a solicitation for the
requirement to operate the WR-ALC PMEL and to service all assigned TMDE
equipment.

The RFP contemplates the award of a fixed-price contract for a 2-year base
period, with two 1-year options and two 1-year incentive options.  The
solicitation provides offerors with the agency's best estimated quantity
(BEQ) of 160 TMDE items input each workday for the base period.[1]  RFP
attach. 2, Workload Estimates.  The basic contract prices are based upon
this BEQ plus 15 TMDE items; the RFP provides for separate pricing for TMDE
items input each workday "over and above" the agency's BEQ plus 15 TMDE
items.  RFP sect. B.

The RFP's performance work statement establishes turnaround times for the
TMDE items input to the contractor, based on an item's priority as
determined by the agency.  For routine items, the required turnaround time
is 5 workdays.[2]  RFP amend. 1, attach. 1, sect. C.5.3.7.1.1.  For TMDE items
designated by the Air Force as priority and emergency, the turnaround times
are 2 workdays and 8 hours, respectively.[3]  RFP sect.sect. C.5.3.7.1.2-.3.  The
RFP also contains a penalty provision for delinquent performance by the
successful contractor beyond the required turnaround times, using a payment
deduction formula set forth in the RFP, in which a percentage of the line
item price, as submitted by the contractor in its proposal, is to be
deducted for each day an TMDE item is delinquent.  RFP attach. 8, Service
Delivery Summary, at 2.

Because the procurement is for services, it is subject to the Service
Contract Act of 1965 (SCA), as amended, 41 U.S.C. sect.sect. 351-358 (1994).  The
RFP advises that offerors must pay non-exempt employees at least the minimum
wages and fringe benefits set forth in the Department of Labor (DOL) area
wage determination for the Macon, Georgia area, which is incorporated into
the RFP.  RFP amend. 1, sect. H-906; attach. 9, Wage Determination No. 94-2140
rev. 17 (May 23, 2001).  The RFP also incorporates a clause providing
standards and procedures by which the wages for any class of employees
subject to the SCA, but omitted from the wage determination, can be
"conformed" to establish the applicable wage rates for those employees.
Federal Acquisition Regulation (FAR) sect. 52.222-41.[4]  The Air Force informed
offerors that while there had been wage conformances initiated under the
previous contract for employee classes not listed in the DOL wage
determination, "no conformed wage classifications are being carried forward
to this follow on acquisition."[5]  Agency Report, Tab 22, PMEL Site Visit
Questions and Answers, Dec. 4, 2001, at 2.

Prior to the amended RFP's closing date for receipt of proposals, ICS and
SMR each protested various aspects of the solicitation.

ICS first complains that the solicitation fails to include certain wage
conformances for classes of expected service employees not listed on the
RFP's wage determination, notwithstanding that the Air Force possesses this
information from the previous contract.  ICS does not argue that the absence
of the wage conformances precludes it from adequately preparing its
proposal:  as the incumbent contractor, ICS knows of the prior contract's
wage conformances.  Instead, ICS contends that the agency's failure to
inform other potential offerors of the prior contract's wage conformances
places it at a competitive disadvantage.  ICS essentially argues that the
prior contract's wage conformances, although not binding on offerors, are
most probably the minimum wages that DOL would approve for those classes of
employees omitted from the area wage determination.  Without being informed
of the prior contract's wage conformances, other prospective offerors may
underestimate the cost of those employees and underbid ICS because of their
lack of knowledge.

The FAR generally requires a contracting agency to include a wage
determination in a solicitation for services.  FAR sect. 22.1012-1.  This is
because the SCA mandates that employees normally be paid at least the
minimum hourly wages set forth in the applicable wage determinations.  41
U.S.C. sect. 351(a)(1).  There is no similar obligation on the agency to include
wage conformances in the solicitation.  See Harris Sys. Int'l, Inc.,
B?228096, Oct. 14, 1987, 87-2 CPD para. 357 at 2.  Unlike wage determinations, a
previous contract's wage conformances are not binding on a successor
contractor (including the incumbent).  See FAR sect. 52.222-41(c).  Instead, a
successor contractor has the discretion to either make use of the previous
wage conformances, or initiate new wage conformance actions at rates higher
or lower than the previous wage conformances, subject to DOL approval.  Id.

With regard to ICS's claimed competitive disadvantage because of its
knowledge of the previous contract's wage conformance, it is true that a
procuring agency must provide sufficient detail in a solicitation to enable
offerors to compete intelligently and on an equal basis.  See Braswell
Servs. Group, Inc., B-276694, July 15, 1997, 97-2 CPD para. 18 at 2.  However,
we have recognized that the procedures set forth in the solicitation for
contractors to establish wage and fringe benefits for omitted classes of
employees provide a reasonable basis for all offerors to estimate labor
costs and to compete on an equal basis.  PacOrd, Inc., B-253690, Oct. 8,
1993, 93-2 CPD para. 211 at 11.  Here, as ICS is already aware of the prior
contract's wage conformances, and as the agency has informed all offerors
that the information could be obtained pursuant to the Freedom of
Information Act (FOIA), 5 U.S.C. sect. 552 (2000), the fact that the RFP here
fails to include the prior wage conformances does not mean the offerors are
being treated in a prejudicially unequal manner.  See PacOrd, Inc., supra,
at 8-9; The Fred B. DeBra Co., B?250395.2, Dec. 3, 1992, 93?1 CPD para. 52 at
14-18.

ICS nevertheless argues that the Air Force has not complied with its own
price adjustment guide, which counsels:

If a labor classification was conformed in the previous contract and still
does not appear on the [wage determination] provided for the successor
contract solicitation, the conformed classification and the current
"indexed" wage rate should be included in the solicitation as an attachment
to the [wage determination].
Agency Report, Tab 28, Fair Labor Standards Act and Service Contract Act
Price Adjustment Guide (Aug. 2000), at 14.  We note that the price
adjustment guide is not binding on the contracting officer and that the
statement relevant here is merely hortatory.  In any case, we do not review
a protest alleging violation of an internal agency policy, but only
allegations of violation of a statute or regulation.  Modern Techs. Corp.
et al., B-278695 et al., Mar. 4, 1998, 98-1 CPD para. 81 at 15.

We fail, however, to understand the Air Force's decision not to include the
prior wage conformances in the solicitation, notwithstanding the absence of
a statutory or regulatory obligation to do so.  The agency acknowledges that
all offerors can obtain the previous wage conformances under FOIA, so there
would seem to be no reason not to make them more freely available.
Moreover, inasmuch as a contractor is not entitled to a price adjustment as
part of a wage conformance action, providing offerors with what is
essentially a baseline for unlisted classes of employees may diminish an
offeror's risk in estimating its costs, which may thereby allow for a better
price competition.  While the agency may be concerned that offerors could
somehow be misled by this information, because DOL had not finally resolved
the matter, as noted inclusion of the previous contract's wage conformances
in the RFP does not mean that they are required to be used--a fact that the
agency could emphasize in providing this information.

ICS and SMR also protest the RFP requirement establishing a 5-workday
turnaround time for each routine TMDE item serviced.  The protesters contend
that the agency has no need for the 5-workday turnaround requirement, noting
that the Air Force lacks a uniform turnaround time standard and that other
contractor-operated PMELs have less stringent requirements.  The protesters
also contend that the 5-workday turnaround time requirement is unattainable
and unrealistic, particularly given other solicitation requirements. [6]
The protesters argue that the penalties resulting from delinquent
performance "pose formidable and unnecessary risks" for the successful
contractor.[7]

In response, the Air Force maintains that the 5-workday turnaround
requirement here is reasonable.  The agency argues that in order for WR-ALC
to perform programmed maintenance schedules in support of airlift missions,
it is necessary that its mechanics have properly calibrated tools and
equipment on hand.  The Air Force explains that WR?ALC has "sized" its
inventory of tools and equipment that require calibration based on a
5-workday turnaround time for these services, and that its customers rely
upon this short turnaround time to fulfill their missions.  Agency Report,
Tab 18, Declaration of Director of WR-ALC Technology & Industrial Support
Directorate.  The agency also contends that the requirement here is not
unattainable, arguing that historical performance data shows its
feasibility.  In addition, the agency maintains that past contractors have
not utilized the PMEL's total available capacity, which may have contributed
to any difficulties they had in meeting this requirement.[8]  The Air Force
also notes that the RFP generally allows offerors to separately price the
additional costs that would be incurred as a result of TMDE items input
"over and above" the daily BEQ amount, which mitigates the price risk of the
contractor.[9]

The responsibility for drafting proper specifications that reflect the
government's needs is the contracting agency's.  California Inflatables Co.,
Inc., B-249348, Nov. 9, 1992, 92-2 CPD para. 331 at 2.  Our Office will not
sustain a protest challenging an agency's judgment in a situation such as
this unless the protester presents clear and convincing evidence that the
specifications are in fact impossible to meet or unduly restrict
competition.  Clifford La Tourelle, B-271505, June 5, 1996, 96-1 CPD para. 270
at 2-3.  A protester's mere disagreement with an agency's judgment
concerning the agency's needs and how to accommodate them does not
demonstrate that specifications are unduly restrictive or defective.  See
AT&T Corp., B-270841 et al., May 1, 1996, 96-1 CPD para. 237 at 7?8.

Here, while the protesters have offered evidence that the Air Force employs
different turnaround times at other PMEL locations, they have not shown that
the 5-workday turnaround requirement does not represent the agency's minimum
needs, given the agency's detailed explanation.  It is well established that
each procurement stands on its own; the fact that the Air Force's judgment
as to the required turnaround time may have been different under the
circumstances of other procurements does not invalidate an otherwise
reasonable requirement.  See T&S Prods., Inc., B-272291, Sept. 13, 1996,
96-2 CPD para. 117 at 2; Commercial Energies, Inc., B-238208, Apr. 5, 1990, 90-1
CPD para. 368 at 2-3.

Nor have ICS and SMR shown the turnaround time for servicing TMDEs is
unrealistic or unattainable.  In this regard, we note that ICS's average
turnaround time for the previous contract was less than the 5-workday
turnaround requirement.  Moreover, as the WR-ALC PMEL facility is generally
available for use at all times of the day, a contractor can employ
additional shifts and/or overtime in order to meet the turnaround time
requirement.  While this may prove more costly, it is not impossible, and an
offeror can account for the increased performance costs, as well as for
quantities in excess of the designated daily BEQ, in its price proposal.
Even though a contractor may not achieve the 5-working day turnaround time
for every piece of equipment serviced, we find that the failure to do so
does not make the requirement an unattainable one.

Regarding the protesters' contentions that the penalties associated with
delinquent performance impose formidable and unnecessary levels of risk on
the contractor, the mere presence of risk in a solicitation does not make
the solicitation inappropriate or improper.  Keystone Ship Berthing, Inc.,
B-289233, Jan. 10, 2002, 2002 CPD para. 4 at 5.  It is within the ambit of
administrative discretion for an agency to offer for competition a proposed
contract that imposes maximum risks on the contractor and minimum burdens on
the agency, and an offeror should account for this in formulating its
proposal.  Clifford La Tourelle, supra.  Moreover, the provision that ICS
and SMR are protesting affect all potential offerors equally, and, in our
view, the fact that offerors may respond differently in calculating their
prices is a matter of business judgment that does not preclude a fair
competition.  Wheeler Bros., Inc., B?223263.2, Nov. 18, 1986, 86-2 CPD para. 575
at 7?8.

The protests are denied.

Anthony H. Gamboa
General Counsel

                          -------------------------

[1] The RFP's workload estimate also informs offerors that there are 250
workdays per year, thereby resulting in an annual BEQ of 40,000 TMDE items
input for the base period.  RFP attach. 2, Workload Estimates.
[2] The turnaround time starts as "day zero" with the contractor's receipt
of the TMDE item to be serviced.  The 5-workday turnaround time is in
addition to any time incurred by the contractor awaiting parts, technical
data, facilities, equipment, or standards.  The turnaround time also does
not include government final inspection and acceptance time.  If items are
not accepted, and are returned to the contractor for rework, the
contractor's turnaround time continues, and the time the items were under
the government's control is not counted.  RFP amend. 1, attach. 1,
sect. C.5.3.7.1.1.
[3] The Air Force informed offerors that the average input of priority items
is 60 per month, and that the anticipated number of emergency items input is
10 or fewer per year.  Agency Report, Tab 23, RFP Questions & Answers, Jan.
14, 2002, at 1.
[4] Generally, under the wage conformance procedures, the contractor is to
establish wages that are reasonably related to those of workers in
classifications listed in an applicable wage determination with the same
knowledge and skill level.  The "conformed" wage rate must be reviewed by
the contracting officer and finally approved by DOL, and the contractor must
pay at a minimum the wage rate ultimately set or approved by DOL.  In the
case where a contractor succeeds a contract under which any classification
in question was previously conformed, the contractor may elect without DOL
approval to adopt and "index" (i.e., adjust for inflation using a specified
formula) the previous wage rate conformance instead of initiating a new wage
conformance action.  29 C.F.R. sect. 4.6(b)(2); FAR sect.sect. 22.1019, 52.222-41(c).  A
contractor is not entitled to a price adjustment as part of a wage
conformance action if the conformed wage is higher than the wage estimated
when submitting its proposal.  See FAR sect. 52.222-44; Spectrum Sciences &
Software, Inc., ASBCA No. 49769, Nov. 15, 1999, 1999-1 BCA para. 30,663; Johnson
Controls World Services, Inc., ASBCA Nos. 40233, 47885, July 31, 1996,
96?2 BCA para. 28,458.
[5] The agency's stated reason was that DOL had not made a final
determination on the wage conformance matter.  Agency Report, Tab 22, PMEL
Site Visit Questions and Answers, Dec. 4, 2001, at 2.
[6] The protesters allege that several interrelated factors--most
importantly, the item priority system, the fact that TMDE daily inputs often
regularly exceed the BEQ amount, the "first in/first out" requirement for
routine items, and delays associated with the agency-provided computer
system--together cause the 5-workday turnaround time requirement for the
service of routine items to be unworkable.
[7] ICS notes that while it had the best turnaround time among Air Force
PMELs during November 2000, the agency still deducted $23,455.95 during that
month for the contractor's failure to meet the 5-workday turnaround time
requirement.  ICS also notes that although its average turnaround time for
the entire contract to date is 4.49 workdays, the Air Force has still
deducted a total of $416,012.84 as a result of delinquencies from October
2000 to September 2001.  ICS's Comments at 4-5.
[8] The Air Force informed offerors that the contractor would generally have
access to the WR-ALC PMEL 24 hours per day, 7 days per week.  Agency Report,
Tab 22, PMEL Site Visit Questions and Answers, Dec. 4, 2001, at 2.
[9] The agency also states that the solicitation requirement that the
contractor perform calibration and repair services of routine items on a
"first in/first out" basis does not accurately represent the agency's
intention.  The Air Force plans to amend the RFP here and require that the
contractor perform work on a "first in/first placed into work" basis.
Agency Report (SMR Protest) at 4 n.1.