TITLE:  Digital Technologies, Inc., B-291657.3, November 18, 2004
BNUMBER:  B-291657.3
DATE:  November 18, 2004
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   Decision

   Matter of:   Digital Technologies, Inc.

   File:            B-291657.3

   Date:              November 18, 2004

   John F. Klein for the protester.

   Tenley A. Carp, Esq., McGuire Woods, for Communication Technologies, Inc.,
an intervenor.

   Byron W. Waters, Esq., Department of Agriculture, for the agency.

   Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Where award was canceled after awardee under small business seta**aside
was declared other than small by Small Business Administration, agency*s
decision to amend solicitation and provide offerors opportunity to submit
revised proposalsa**a**instead of making award to next offeror in line for
award under original evaluation--was reasonable in view of material
increase in estimated quantities and addition of geographically remote
performance site.

   DECISION

   Digital Technologies, Inc. (DTI) protests the Department of Agriculture*s
decision to amend request for proposals (RFP) No. FSA-R-003-02DC to add
additional work, and to allow revised proposals.  The agency*s decision
followed cancellation of the original award due to a finding by the Small
Business Administration (SBA) that the awardee was not a small business
concern eligible for award.  DTI asserts that, instead of amending the
solicitation and requesting revised proposals, the agency should make
award to the offeror next in line for award and then modify the awarded
contract to add any new requirements. We deny the protest.

   The RFP, a small business set-aside issued in August 2002, provided for
award of a fixed-price, indefinitea**delivery/indefinite-quantity contract
for a base year, with 4A option years, for remedial and preventive
maintenance for an estimated 2,557 Farm Service Agency (FSA) IBM AS/400
Model 170 computers, 3,130 IBM Model 4317 laser printers, and a small
quantity of other laser printers (6 IBM Model 4028 and 12 IBM Model
5262).  The computers and printers are located at approximately 2,370
county Field Service Centers, 50 state FSA offices, 10 Caribbean offices,
and headquarters offices in 3 other cities.  The RFP established required
response times for any necessary remedial maintenance, with the contractor
required to return the computer or printer to operation within 4 to 18
business hours--depending on the location of the equipment--of the
government*s reporting the problem to the contractor.  Award was to be
made to the offeror whose proposal was most advantageous to the government
based on technical capability, past performance and price. 

   The agency originally made award to Communication Technologies, Inc.
(ComTek).  Integration Technologies Group Inc. filed a protest challenging
the award, asserting that ComTek*s proposal contained a
misrepresentation.  We sustained the protest and recommended that the
agency open negotiations with offerors in the competitive range, request
revised proposals, and make a new award determination.  Integration Techs.
Group, Inc., Ba**291657, Feb. 13, 2003, 2003 CPD P 55.  The agency
obtained revised proposals in November 2003 and, after concluding its
evaluation, awarded a contract to A&T Systems, Inc. on March 4, 2004. 
ComTek challenged A&T*s size status at the SBA.  On April 19, the SBA
determined that A&T was other than small and thus not eligible for the
award.  A&T*s appeal of the SBA*s determination was denied on July 1. 

   Thereafter, as the contracting officer prepared to make award to another
offeror in the competitive range, she recognized that some of FSA*s
requirements had changed.  Specifically, the last option on a service
contract for 2,439 IBM impact printers was due to expire at the end of
September 2004, and some servers and printers had been moved from Hawaii
to Guam, changing the geographic scope of the procurement.  The
contracting officer amended the RFP to add the printers and the Guam site,
and invited revised proposals from all offerors that had responded
initially.  Prior to the closing time for receipt of proposals, DTI filed
this protest.

   DTI principally asserts that the agency should award a contract to the
offeror next in line for award, instead of amending the RFP and requesting
revised proposals.[1]  DTI asserts that the proposed changes are not
material, and that the amendment therefore is unnecessary, because the
additional equipment maintenance is no different than that already
specified.  DTI notes that the RFP specifically provided that the agency
retained the right to add or remove equipment, or otherwise modify the
contract as new hardware was acquired or replaced, with any changes to be
mutually agreed upon. 

   Where an agency*s requirements change after a solicitation has been
issued, the agency must issue an amendment to notify offerors of the
changed requirements and afford them an opportunity to respond.  Federal
Acquisition Regulation (FAR) S 15.206(a); Symetrics Indus., Inc.,
B-274246.3 et al., Aug. 20, 1997, 97-2 CPD P 59 at 6.  An agency must
amend the solicitation to reflect a significant change in the government's
requirements, even after the submission of final proposal revisions, up
until the time of award.  NV Servs., B-284119.2, Feb. 25, 2000, 2000 CPD
PA 64 at 17; see United Tel. Co. of the Northwest, B-246977, Apr. 20,
1992, 92-1 CPD P 374 at 7-9, aff'd, Department of Energy et al.,
B-246977.2 et al., JulyA 14, 1992, 92-2 CPD P 20.  Amending the
solicitation provides offerors an opportunity to submit revised proposals
on a common basis that reflects the agency's actual needs.  Dairy Maid
Dairy, Inc., Ba**251758.3 et al., May 24, 1993, 93-1 CPD P 404 at 7-9.

   While, as the protester asserts, there may be little difference between
the maintenance to be performed on the printers already covered by the
requirement and that required for the additional printers, the agency*s
actions were proper based on the significant change in its quantity
requirements.  As noted above, under the original RFP, offerors submitted
proposals to maintain an estimated 2,557 computers and 3,148 printers. 
The amended RFP added an estimated 2,439 impact printers, an increase of
approximately 77 percent in the number of printers, and a more than
40A percent increase in the total equipment to be maintained.  Quantity
estimates in a solicitation establish the general framework for the
government*s anticipated purchases under the contract, and thus provide
the basis for offerors to determine their pricing.  Consequently, when an
agency knows that there is a serious discrepancy between a solicitation
estimate and actual anticipated needs, it should not make award on the
basis of the stated estimate but, rather, should revise the solicitation
to provide offerors with the most accurate information available.  United
Tel. Co. of the Northwest, supra, at 9, quoting N.V. Philips
Gloellampenfabriken, Ba**207485.3, May 3, 1983, 83-1 CPD P 467 at 12. 
Given the significant change in the quantities of equipment to be
maintained under the contract, amending the solicitation and seeking
revised proposals on that basis was reasonable.  The addition of Guam as a
performance site further supports the agency*s actions.  While there is
only a limited amount of equipment on Guam--a mida**range computer and two
printers--the remote location and 18-hour response time for maintenance
would appear to be potentially significant factors that each offeror is
entitled to take into consideration in calculating its pricing.[2]

   This case is clearly distinguishable from our decision in Adams Indus.
Servs., Inc., Ba**280186, Aug. 28, 1998, 98-2 CPD P 56, on which DTI
relies.  In Adams, an agency improperly awarded a purchase order to a firm
that was not a small business, and we found that the appropriate course of
action was to terminate the purchase order and issue a new one to the firm
next in line for award.  However, unlike the situation here, in Adams,
there was no change in the requirements between issuance of the
solicitation and the new award. 

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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   [1] DTI raises a number of other arguments.  We have reviewed them all and
find that none has merit.

   [2] We note, furthermore, that by obtaining revised proposals, the agency
may obtain more competitive pricing than if it negotiated the changes only
with the successful offeror after award.  See Kisco Co., Inc., Ba**216953,
Mar. 22, 1985, 85a**1A CPD PA 334 at 5 (economies of scale associated with
increased quantities and their effect on pricing provide reasonable bases
for amending proposal).
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