TITLE:  AirTrak Travel etal., B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5, June 30, 2003
BNUMBER:  B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5
DATE:  June 30, 2003
**********************************************************************
AirTrak Travel etal., B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5,
June 30, 2003

   Decision
    
    
Matter of:   AirTrak Travel etal.
    
File:            B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5
    
Date:June 30, 2003
    
Josephine L. Ursini, Esq., for AirTrak Travel et al., and Lars E.
Anderson, Esq., J. Scott Hommer, III, Esq., and Benjamin A. Winter, Esq.,
Venable, Baetjer and Howard, for Alexander Travel Ltd. and El Sol Travel.
Capt. Anissa Parekh, Robert E. Dudley, Esq., Maj. Art J. Coulter, and
Raymond M. Saunders, Esq., Department of the Army, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Attorneys' requests for admission to GAO protective order are granted,
notwithstanding agency's objections, where the attorneys have provided
evidence that they are not competitive decisionmakers for a client (or
another relevant firm), which has not been rebutted by the agency.
    
2.  Solicitation for a fixed-priced contract to provide travel management
services which required contractors to use developmental software did not
place undue risks on offerors where the agency identified the performance
uncertainties and provided sufficient information to allow offerors to
intelligently prepare their proposals.
    
3.  Solicitation contemplating multiple awards to small businesses for
travel management services, which grouped the 87 nationwide locations into
28 *travel areas,* did not constitute improper bundling in violation of
the Competition in Contracting Act of 1984, where the procurement approach
was reasonably required to satisfy the agency's legitimate needs.
    
4.  Under a solicitation contemplating multiple awards for travel
management services in 28 *travel areas,* agency, which provided general
advice to the offerors as to what it would consider in deciding how many
travel areas an offeror, apparently in line for award under these travel
areas, would be capable of performing, is not required to furnish further
precise details about how it would perform this aspect of the evaluation.
    
5.  Where an amendment to a solicitation, issued after proposals were
received, significantly changed the offered contractual relationship of
the parties by shifting significant risk to the government, the agency was
required to reopen the competition to firms that did not submit proposals
because the record evidenced that some firms may not have submitted
proposals because of this risk.
    
6.  Price evaluation scheme for travel management procurement does not
provide a reasonable basis for comparing the relative costs of the
proposals, where prices for categories of services which will not be
provided are part of the scheme.
DECISION
    
Several small businesses protest the terms of request for proposals (RFP)
No. DABL01-03-R-1001, issued as a small business set-aside by the
Department of the Army, Information Technology, E-Commerce and Commercial
Contracting Center, for travel services. They protest that the
solicitation places undue risk and burden on the offerors, that the agency
has not disclosed sufficient information to enable offerors to
intelligently prepare proposals, that the requirements were improperly
bundled into one large multi-award procurement, that the grouping of the
travel locations for each award was unreasonable, that the evaluation
scheme did not sufficiently detail how awards would be made, that the
agency improperly failed to reopen the competition after issuing a
material amendment, and that the price evaluation scheme was defective.   
    

   We sustain the protests in part and deny them in part.
    
BACKGROUND
    
This procurement is part of the Department of Defense's (DoD) effort to
reengineer the DoD travel process.  DoD identified this process during the
National Performance Review in 1993 as being in need of reengineering
because it was fragmented, inefficient, expensive to administer, and
occasionally an impediment to mission accomplishment.  In 1995, DoD
established what became the Defense Travel System Program Management
Office (DTS/PMO), whose mission was to acquire travel services DoD-wide,
and support mission requirements, reduce costs, and provide superior
customer service.[2]  The DTS/PMO initiated the Defense Travel System
Program to procure a software-based travel system, designated the DTS. 
DoD envisioned the DTS as a general support system designed to make
business travel quicker, easier, and more efficient by providing automated
commercial and government travel support services to DoD travelers.  See
DoD Inspector General Report No. D-2002-124 at 1.
    
In May 1998, the DTS/PMO, through the Military Traffic Management Command,
contracted with TRW, Inc. to design and deploy the DTS.[3]  The original
contract called for deploying the DTS to 11,000 sites worldwide within 120
days of the effective date of the contract with completion approximately
38 months later (April 2002).  However, the DTS/PMO discovered that the
travel system was more cumbersome than anticipated, and that the planned
commercial-off-the-shelf product would require extensive modification and
development to meet DoD's requirements.  Id. at 6-7. 
    
The DTS/PMO now anticipates that it will take until 2006 to obtain total
functionality of the system, including integrating the common user
interface and the DoD accounting and disbursing systems and the
engineering support necessary to implement the system development of the
DTS.  Hearing exh. No. 5, DTS Command Briefing, at 31.  The DTS/PMO has
also reduced the DTS deployment plan to include only approximately 260
travel sites; the revised deployment schedule included initially fielding
the DTS to a relatively small number (10) of pilot sites during 2002, and
to approximately 250 high-volume travel sites from 2003 to 2006.  DoD
Inspector General Report No. D-2002-124 at 7.  The DTS/PMO also states
that the DTS software will undergo evolutionary development to add
features and capabilities, and to address problems in earlier versions;
the successive versions bear the names of United States presidents.  The
current schedule contemplates release of a Jefferson version in March
2003, a Madison version in January 2004, a Monroe version in January 2005,
and an Adams version in January 2006.[4]  See Hearing exh. No. 5, DTS
Command Briefing, at 31.  Up to this point, the DTS has only been deployed
at pilot sites within DoD utilizing the Washington and Adams versions of
the software.
    
Currently, DoD contracts with CTOs, such as the protesters or large
business travel companies, to meet its travel service needs primarily
through *traditional* methods.  Traditional travel services involve the
traveler (or travel clerk) calling a travel agent at the CTO, orally
describing the travel requirements, and working with the travel agent to
make airline, hotel, and rental car reservations.  To effectuate the
service, the travel agent is required to obtain certain required
information regarding the traveler, such as name, address, phone number,
travel preferences, and credit card information.  This information is
utilized by the travel agent to develop a Passenger Name Record (PNR) in
the Global Distribution System (GDS).  The GDS consists of several
databases utilized by the CTO industry to book reservations with airline,
hotel and rental car vendors.[5]  The GDS is used to book the flight,
hotel, and or rental car, and to decrement the appropriate vendor's
inventory.  The travel agent then completes the process by issuing a
ticket or confirmation number.[6]
    
In contrast, the DTS software is designed to permit the DoD traveler or
travel clerk to develop a PNR that is electronically passed through a
contractor-operated PNR gateway directly to the various GDS databases.  In
developing the PNR, the traveler or travel clerk has the ability to
directly access the information related to airline flights, hotels, and
car rentals, and to make the reservations in the GDS, tasks currently
being done by the CTOs using the traditional methods.  The PNR is then
held within the particular GDS in an electronic mailbox called a queue,
which is generally used by the CTO only for purpose of fulfillment.  See
Agency Hearing Comments at 2-3.
    
DoD states that automating the travel process should result in substantial
savings to the government.[7]  In this regard, DoD believes that the CTOs
should have lower labor costs because they generally need only assist in
the fulfillment of travel ordered on the PNR, instead of performing
traditional travel agent services, which entail manually interfacing with
the system to add other information or take other actions.  DoD asserts
that this should cause a reduction in the CTOs' transaction fees charged
the government.[8]  In addition to allowing the traveler or travel clerk
to book travel, the DTS is expected to also automate other aspects of the
travel process, including travel reimbursement, accounting, and record
keeping.[9] 
    
SOLICITATION
    
As part of the effort to deploy the DTS, the Army issued the RFP on
November 22, 2002, as a small business set-aside to acquire official
travel management and related additional services from CTOs on a
*point-of-sale,* transaction-fee basis.  The RFP contemplated multiple
awards of fixed-price, indefinite-delivery, indefinite-quantity, task
order contracts (with one cost‑reimbursable item) for a base period
of 2 years, with three 1-year option periods.   The RFP, as amended,[10]
broke out the travel services requirements into 28 distinct *travel
areas,* each of which contained one or more *travel locations,* with an
overall total of 89 locations.[11] 
    
The RFP's statement of work (SOW) advised that travel management services
to support DoD travelers whose duty stations are within the travel area(s)
awarded to the CTO contractor were to include both traditional methods and
automated methods, and that automated travel management services were
required to be performed exclusively through the use of the DTS software. 
RFP amend. 10, S:S: C.1.1., C.1.2.  In addition, the SOW required the
contractor to perform management information system (MIS) reporting
requirements for all travel services, including centrally billed account
(CBA) reconciliation, STATCO, and TRIP$.[12]  RFP amend. 10, S:S: C.1.4,
C.4.6.  The SOW stated in this regard:
    
CBA reconciliation functionality is planned to be release[d] in July 2003
for those transactions facilitated through DTS.  Once this functionality
is in place, the CTO will no longer be required to provide that service
for transactions process[ed] via DTS.  Until that time for DTS facilitated
transactions and for traditional travel services the Contractor is
required to perform CBA reconciliation.
RFP amend. 10, S: C.4.6.
    
The RFP provided for multiple awards by travel area.[13]  There were
several go/no-go criteria that proposals had to satisfy in order to be
considered for award.  Awards would then be made on a *best value* basis,
considering the technical, performance risk, and price evaluation
factors.  The technical factor was composed of two subfactors: 
understanding of the requirements and feasibility of approach.[14] 
Performance risk and price did not have subfactors.[15]  Under performance
risk, the government will conduct an assessment based on the *quality,
relevancy, and currency of the offeror's past performance.*  RFP amend. 8,
S: M.4.2.1.  The technical factor was said to be more important than the
price factor, which was in turn more important than the performance risk
factor.  The RFP explained that
    
[f]or all offerors that pass the initial go/no go evaluation, the
Government will proceed to conduct a *best value* proposal evaluation that
will not use a predefined formula in the selection decision process for
each Travel Area, instead, the source selection process will identify
those proposals for each Travel Area that are determined to be the most
beneficial to the Government with appropriate consideration given to the
three (3) factors.
RFP amend. 8, S: M.1.1. 
    
The price evaluation scheme in the RFP required offerors to propose fees
for performing the various services required by the contract.  Offerors
were specifically required to propose point-of-sale transaction fees for
travel management services for air/rail transactions, fees to perform CBA
reconciliation, and transaction fees to perform non-air transactions.  All
of these proposed fees would be considered in the price evaluation
scheme.[16]  The RFP pricing instructions explained that *[b]ecause the
DTS software will be implemented in a phased approach across DoD, the
pricing schedule in this contract allows the Contractor to propose a range
of fees within each performance period to ensure adequate and real-time
compensation for services provided.*  RFP, amend. 8, S: B.4.1.5.  Also,
offerors were provided the agency's estimated deployment schedule for the
DTS at each travel location.  Hearing exh. No. 4. 
    
The following pricing model was included in the RFP to evaluate the
air/rail     transaction fees:
    
    

   +------------------------------------------------------------------------+
|  |                      |Performance Period                    |Average|
|  |CLIN                  |--------------------------------------|Across |
|  |                      |Base Yrs|Option Yr|Option Yr|Option Yr|Years  |
|  |                      |1&2     |1        |2        |3        |       |
|--+---------------------------------------------------------------------|
|  |OFFICIAL TRAVEL SERVICES -- AIR/RAIL TRANSACTIONS                    |
|--+---------------------------------------------------------------------|
|01|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 0%             |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|02|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 1-25%          |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|03|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 25-50%         |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|04|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 51-75%         |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|05|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 76-90%         |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|06|OFFICIAL TRAVEL       |        |         |         |         |       |
|  |SERVICES FOR DoD      |        |         |         |         |       |
|  |TRAVELERS -- Propose a|        |         |         |         |       |
|  |transaction fee for   |        |         |         |         |       |
|  |travel services       |        |         |         |         |       |
|  |facilitated through   |        |         |         |         |       |
|  |DTS at 91-100%        |        |         |         |         |       |
|--+----------------------+--------+---------+---------+---------+-------|
|07|AVERAGE OF TRANSACTION|        |         |         |         |       |
|  |FEES FOR ALL DTS USAGE|        |         |         |         |       |
+------------------------------------------------------------------------+

    
See RFP amend. 9, attach. J, CTO Price Model -- Input Form, at 19.  The
price evaluation criterion in the RFP explained that the overall average
transaction fee to be used in the price evaluation will be derived for
each travel area for which proposals are submitted through use of this CTO
pricing model.  As indicated above, this model calculates the numerical
average of each of the six transaction fees for particular DTS usage
percentage ranges across the base period and each option year, and then
averages these six averaged transaction fees.  An average CBA
reconciliation fee and an average non‑air transaction fee are to be
calculated by averaging the fees for the base period and each option
year.  The sum of the average transaction fee plus the average CBA
reconciliation fee was then multiplied by a *workload* figure applicable
to each travel area; the non-air transaction fee was similarly multiplied
by a workload figure.  The sum of these figures was used to determine the
overall contract value and selecting the contractor for award for each
travel area.[17]  RFP amend. 8, S: M.4.3.
    
Prior to the closing date, the protesters filed protests challenging the
terms of the RFP.  Proposals in response to the RFP were received on March
24, 2003.  Three of the first group of protesters chose not to submit
proposals; the other protesters submitted proposals. 
    
In response to these protests, the Army issued amendment No. 0011, dated
April 15, as corrective action to address some of the concerns raised in
the protests regarding the alleged undue risks borne by small business
contractors particularly with regard to the DTS.[18]  That amendment,
among other things, modified the equitable adjustment provisions in clause
G.16 of the RFP concerning the recovery of costs in the case of DTS
failure by shifting more of the risk to the government.  In addition,
amendment No. 0011 deleted the requirement for the CTO to ensure that the
fare booked was the lowest fare available.  The agency declined to
re‑open the competition to allow the non-offeror protesters to
submit proposals.
    
PROTECTIVE ORDER ADMISSIONS
    
After the protests were filed, our Office issued a protective order. 
Protective orders are issued pursuant to our Bid Protest Regulations, 4
C.F.R. S: 21.4(a) (2003), limiting the release of documents that are
non-public or the release of which would result in a competitive
advantage--such as offerors' proposals and agency evaluation
documentation--to counsel for the protester and interested parties who
have been admitted to the protective order.  The Army objected to the
applications for admission to the protective order submitted by Mr.
Anderson and Ms. Ursini on the basis that they were involved in
competitive decisionmaking.  As discussed below, we admitted these
individuals to the protective order, notwithstanding the objections.   
    
In determining whether counsel may be permitted access to information
covered by a protective order, we look to whether the attorney is involved
in competitive decisionmaking for the client (or another relevant
firm)--i.e., whether the attorney's activities, associations, and
relationship with the client (or another relevant firm) are such as to
involve advice and participation in client's decisions (such as pricing
and product design) made in light of similar corresponding information
about a competitor.  See U.S. Steel Corp. v. United States, 730 F.2d 1465,
1468 (Fed. Cir. 1984).  Where an attorney is involved in competitive
decisionmaking, the attorney will not be admitted to the protective order
because there is an unacceptable risk of inadvertent disclosure of
non-public information or the proprietary data of another company. 
Although it is often easier for outside counsel to establish that they are
not involved in competitive decisionmaking, we approach the admission of
counsel on a case-by-case basis, and we do not assume that any attorney's
status as outside or in-house counsel is dispositive of whether that
attorney is involved in competitive decisionmaking.  See Allied-Signal
Aerospace Co., B-250822, B-250822.2, Feb. 19, 1993, 93-1 CPD P: 201 at 9.
    
With respect to Mr. Anderson's application, the agency advised that Mr.
Anderson represents Carlson Wagonlit Government Travel and its
affililates, which the Army alleged is attempting to market a commercial
travel booking software product to DoD that will compete with the DTS
software that is at issue in the protests.  The Army also asserted that El
Sol, represented by Mr. Anderson in this protest, is an affiliate of
Carlson.[19]  The Army also stated that Mr. Anderson had filed a Freedom
of Information Act (FOIA) request on behalf of Carlson seeking government
and contractor information involving the restructuring of the DTS contract
with Northrop Grumman; this, the Army argued, evidenced that Mr. Anderson
sought to exploit DTS acquisition source selection sensitive information
to assist Carlson in marketing that firm's software product as an option
to DTS.  See Army Letter, May 1, 2003, attach. 1, Memorandum of
Contracting Officer.
    
The Army also asserted that we previously determined in Omega World
Travel, Inc.; SatoTravel, Inc., B-288861.5 et al., Aug. 21, 2002, 2002 CPD
P: 149 that Mr. Anderson was a competitive decisionmaker for Carlson.  In
that case, which resolved a protest against the award of a contract to
Carlson, Mr. Anderson, who represented Carlson, was initially admitted to
the protective order issued in connection with the protest.  Subsequently,
Mr. Anderson withdrew his admission following the objection of protester's
counsel that Mr. Anderson represented Carlson at a pre-proposal conference
in a manner which protester's counsel argued suggested that Mr. Anderson
was a competitive decisionmaker.   The Army states that the attorney in
our Office who handled the protest found that the level of Mr. Anderson's
participation at the pre-proposal conference reflected that he was a
competitive decisionmaker for Carlson and that this was the basis for
Mr. Anderson's withdrawal.  During that protest, the Army never objected
to Mr. Anderson's admission to the protective order.
    
The Army argued that Ms. Ursini should be denied admission to the
protective order for the same reasons that Mr. Anderson should be denied
admission.  The Army advised that Ms. Ursini actively solicited questions
from the Army concerning the solicitation on behalf of her clients in the
pre-proposal stages of this procurement, much like Mr. Anderson did in the
prior procurement's pre-proposal conference.  The Army advised that she
also represents an affiliate of Carlson in this protest.
    
Although we had concerns in the prior protest with respect to Mr.
Anderson's status at the pre-proposal conference and another meeting, our
Office did not rule in that matter because Mr. Anderson chose to withdraw
his admission.  Accordingly, the Army was incorrect in its assertion that
our Office had already found Mr. Anderson to be involved in competitive
decisionmaking.  In addition, in these protests, Mr. Anderson and
Ms. Ursini have responded to the agency's objections. 
    
Ms. Ursini stated that, although she asked numerous questions on behalf of
several clients, she has done so because these clients desired not to be
identified during the pre-proposal process.  She also affirmed that she is
not involved in competitive decisionmaking for any of her clients. 
    
Mr. Anderson, in response to our request, provided detailed information
concerning the activities he performs on behalf of Carlson.  In this
regard, Mr. Anderson noted that that firm has its own in-house attorneys,
who handle business matters and participate in competitive decisionmaking,
and that one of its in-house counsel has considerable government contract
experience.  Mr. Anderson also stated that when he is engaged to represent
Carlson, it is for a particular matter (such as a claim, contract dispute,
or protest).  Mr. Anderson also responded that although he withdrew his
admission in the prior protest, this should not have been interpreted as
indicating that he was involved in competitive decisionmaking; he
explained that he withdrew his admission only to avoid further delay and
unnecessary expense for the client.  Mr. Anderson affirmed that he does
not participate in competitive decisionmaking, and declared that *[s]ince
the allegations were made that my participation in a pre-proposal
conference in May 2001 might be construed as participating in competitive
decision-making, I have not attended any pre-proposal or similar
conferences with Government procurement personnel on behalf of [Carlson].*
    
Our review of the evidence, including a transcript of the pre-proposal
conference attended by Mr. Anderson on behalf of Carlson did not establish
that either Mr. Anderson or Ms. Ursini is involved in competitive
decisionmaking, nor did the agency show, beyond its initial assertions,
that the release of protected material to either of them in this case
would result in an unacceptable risk of disclosure. 
Mr. Anderson offered a reasonable explanation of his activities on behalf
of his client, which related to terms in the solicitation that were the
subject of an agency-level protest in which he represented Carlson.  Also,
notwithstanding our request for the Army to respond to Mr. Anderson's and
Ms. Ursini's explanations, the Army did not provide any evidence
substantiating the agency's allegations that Mr. Anderson and Ms. Ursini
were involved in competitive decisionmaking.  Nor did the agency, despite
our request, show what competitive advantage might accrue to the
protesters from their alleged affiliation with Carlson.[20]  In short,
although the Army continued its objections, it provided no evidence to
counter the detailed responses and explanations provided by Mr. Anderson
and Ms. Ursini.  Given the lack of evidence establishing that Ms. Ursini
is involved in any competitive decisionmaking and Mr. Anderson's decision
to refrain from activities on behalf of Carlson that may be construed as
being involved in competitive decisionmaking (such as representing that
client at pre-proposal conferences), we found no basis to deny them
admission under the protective order.
    
ALLEGED UNDUE RISK TO CONTRACTORS
    
A major thrust of the protesters' challenge to the terms of the RFP
concerns what they believe are undue risks inherent in developing
transaction fees on a fixed-price basis when the DTS is still in the
developmental stages and has experienced several problems that would
hinder the CTOs' ability to meet the contract requirements. 
    
One risk is that associated with the DTS software itself, allegedly
because a fully functional DTS system has never been deployed and has not
been proven to work with all of the GDS databases, with DoD's many
accounting systems, nor been shown to successfully meet the contract's MIS
reporting requirements.[21]  The protesters essentially maintain that the
Army's assumption that CTOs will be able to reduce costs by utilizing the
DTS is unjustified.[22]
    
The protesters also have raised concerns about the sufficiency and quality
of the information the Army provided offerors to prepare proposals,
arguing that the agency has intentionally withheld critical information
regarding the reliability of the DTS, and has failed to provide
information necessary for offerors to develop sound transaction fees,
particularly concerning travel related to the MEPS (which historically has
been performed by large businesses).[23]  Further, the protesters complain
that the RFP requires offerors to rely on numerous pricing assumptions,
many of which are inaccurate, and that workload data has been incomplete
and incorrect.  The protesters contend that the lack of reliable and
accurate information in the RFP precludes offerors from intelligently
preparing proposals.
    
According to the protesters, these factors, in particular the lack of
reliable data and the developmental nature of the DTS, have resulted in
undue risks being placed upon small businesses like the protesters, and
make the solicitation of these services under a fixed-price contract
inappropriate.  In addition, the protesters argue that soliciting these
services under a fixed-price contract exceeds the government's needs,
contending that choosing the use of fixed-priced contracts is unnecessary,
since the government could contract for the automated transactions with
the CTOs on a cost-reimbursement basis when the DTS is deployed at each
travel location until reliability and savings with the DTS were proven.
    
As a general rule, the contracting agency must give offerors sufficient
detail in a solicitation to enable them to compete intelligently and on a
relatively equal basis.  National Customer Eng'g, B-254950, Jan. 27, 1994,
94-1 CPD P: 44 at 5.  However, the contracting agency has the primary
responsibility for determining its needs and the method of accommodating
them, including the choice of the appropriate contracting format.  DGS
Contract Servs., Inc., B-261879, Oct. 31, 1995, 95-2 CPD P: 199 at 3.  We
will not question an agency's choice of procurement approach, absent clear
evidence that its decision is arbitrary or unreasonable, or in violation
of statute or regulation.  Id.  There is no requirement that a competition
be based on specifications drafted in such detail as to completely
eliminate all risk or remove every uncertainty from the mind of every
prospective offeror.  Indeed, an agency may offer for competition a
proposed contract that imposes maximum risks on the contractor and minimum
burdens on the agency.  As risk exists in any contract, offerors are
expected to use their professional expertise and business judgment in
anticipating a variety of influences affecting performance costs. 
National Customer Eng'g, supra.  A mere difference of opinion between the
protester and the agency concerning what will best suit the agency does
not establish that the agency's determination as to its requirements
placed undue risk on the contractor.  DGS Contract Servs., Inc., supra.
    
While we appreciate that a procurement requiring the use of developmental
software poses risks for contractors, we do not find, on the record before
us, that offerors were exposed to unacceptable or undue risks or burdens,
or that the Army acted unreasonably in deciding to solicit its
requirements on a fixed-price basis.
    
To the contrary, the evidence reflects that the DTS/PMO carefully
approached this important procurement to reengineer the DoD travel
process.  As part of its initiative to begin deploying the DTS, it held
numerous meetings with the military services, the CTO industry, including
small businesses, and professional travel organizations, and a
pre-proposal conference, prior to issuing the RFP, to try to decide the
best approach to this effort.[24]  See Tr., June 6, 2003, at 39.  The
DTS/PMO advises that much of the structure in the procurement was in
response to the feedback that it received during this process.  See, e.g.,
Tr., June 11, 2003, at 40-42.  The risks associated with this procurement
essentially were revealed to potential offerors at these meetings, for
example, that the DTS would be developed and phased in during the
contract, that the DTS software had experienced problems, and that the DTS
would be initially deployed under this contract.[25]  Moreover, contrary
to the protester's contentions, the agency has provided considerable
information, including detailed workload and pricing assumption data, both
before and during this protest, so that offerors can intelligently make
business judgments regarding this procurement.[26]  Furthermore, the
agency asserts that the Jefferson release of the DTS addresses the
previous problems and it believes that it and the subsequent releases will
perform as designed and not place undue burdens on the contractors; while
the protesters do not share this optimism, they have not shown that it is
unfounded.  Finally, as noted, the agency issued numerous amendments,
mostly to respond to the concerns expressed by the potential offerors,
including issuing amendment No. 0011 to specifically address the question
of risks associated with the DTS and other aspects of the requirement,
such as the requirement that the lowest fare be obtained.  Thus, we
believe the agency has mitigated the DTS risks borne by the small business
offerors, and that the offerors have been provided with sufficient
information to reasonably exercise their business judgment to
intelligently prepare proposals. 
    
Under Federal Acquisition Regulation (FAR) S: 16.202, an agency properly
may solicit on a fixed-price basis if performance uncertainties can be
identified and reasonable estimates of their cost impact can be made, and
the contractor is willing to accept a fixed price representing assumption
of the risks involved.  Here, we believe that the agency has made every
reasonable effort to identify and disclose the performance uncertainties
associated with this procurement.  Moreover, as noted by the agency,
travel services have traditionally been procured on a fixed-priced basis,
a wealth of information was provided to offerors, and offerors could
factor in the risk of the DTS in their proposed fees.  Also, we believe a
significant portion of the risk complained of by the protesters was
addressed by certain equitable adjustment provisions in the RFP, including
amendment No. 0011, as discussed in more detail below.
    
Although the protesters suggest that it would be more appropriate to
negotiate the DTS‑related services with each contractor on a cost
basis after award to adequately insulate the protesters from the risks of
the DTS, there is no requirement for the agency to take this approach. 
There are considerable problems associated with noncompetitively
negotiating, evaluating and monitoring small business costs in an industry
whose fees are generally fixed-price.  Moreover, the agency advises that a
major element of transitioning to an automated process requires the agency
to establish contracts with CTOs that cover both the traditional services
and the new automated DTS services, and to mix the traditional and
automated services to meet the full spectrum of DoD's requirements.  See
Agency Report, DTS/PMO Statement, at 4.  While we are mindful, as the
protesters note, that miscalculating risk can be detrimental to small
businesses, it is, as noted above, within the ambit of an agency's
administrative discretion to solicit offers for a contract imposing
maximum risk upon the contractor and minimum burdens upon the government. 
National Customer Eng'g, supra.  We therefore find no basis to find that
the agency has imposed undue risk on the offerors or question the agency's
decision to use a fixed‑price contract here.
    
ALLEGED IMPROPER CONSOLIDATION OF THE TRAVEL REQUIREMENTS
    
The protesters also contend that the way in which the Army grouped travel
locations under each travel area and bundled the travel services
requirements into one large single procurement discourages small business
competition, even though this procurement was set aside for small
businesses.
    
The Competition in Contracting Act of 1984 (CICA) generally requires that
solicitations include specifications which permit full and open
competition, and contain restrictive provisions and conditions only to the
extent necessary to satisfy the needs of the agency.  See 10 U.S.C. S:S:
2305(a)(1)(A), (B) (2000).  Since bundled, consolidated or total-package
procurements combine separate, multiple requirements into one contract,
they have the potential for restricting competition by excluding firms
that can only furnish a portion of the requirement.  We review such
solicitations, when they are protested, to determine whether the approach
is reasonably required to satisfy the agency's legitimate needs.  The
Sequoia Group, Inc., B-252016, May 24, 1993, 93-1 CPD P: 405 at 4.
    
As indicated above, the mandate of the DTS/PMO is to re-engineer the DoD
travel process, including automating the travel process through the DTS
and consolidating DoD CTO travel office services.  The DTS/PMO reports
that historically the services acquired here have been acquired through a
regional approach by the Army and Navy, and a decentralized approach for
the Air Force and Marine Corps.  DoD reports that it has 80 known CTO
contracts/task orders administered by approximately 67 separate
organizations.[27]  The DTS/PMO also reports that the acquisition strategy
to accomplish consolidation is a two-step process; the first is to procure
travel management services under the small business set-aside program for
certain locations and the second step is to procure those services for
other DoD locations on an unrestricted basis.
    
This procurement constitutes the first step, and the DTS/PMO reports that
in developing a strategy to consolidate CTO services it has worked with
the CTO industry, military services and defense agencies over the past
several years to develop a common set of requirements for CTO services and
to agree on the regional groupings for travel sites.  The DTS/PMO reports
that one factor considered in establishing the groupings was the desire to
increase the volume of business set aside for small businesses.[28]  The
DTS/PMO advises that the solicitation balances the approach of
consolidating all of DoD's CTO procurements, increasing the volume of
business set-aside for small business and supporting the transitioning DoD
into a new era of managing travel budgets.  See Agency Report, DTS/PMO
Statement, at 1‑2.
    
The protesters essentially complain that the single procurement and the
particular groupings under the travel areas were only for the purpose of
administrative convenience, and improperly restrict competition.  For
example, the protesters question the way in which the MEPS have been
grouped under certain travel areas, such that some are made up exclusively
of MEPS sites and some have a significant percentage of MEPS sites.  They
maintain that the MEPS sites, some of which under the RFP are required to
be staffed with a single person, have unique travel requirements that make
them unprofitable unless paired with other routine travel sites.
    
The reasons that the agency has offered, however, for grouping the travel
locations by geographic region, and for issuing a single consolidated
procurement, are not solely based on administrative convenience.  As
indicated previously, the underlying purposes behind the agency's single
procurement included the legitimate requirement to reengineer the
antiquated and costly DoD travel process, in part by consolidating the
process, and structuring geographical groupings to allow for more small
business participation.  Agency officials testified that a major factor
that was considered in structuring the RFP into 28 travel areas, with 89
locations was whether there was adequate sales volume to achieve effective
competition.  See Tr., June 11, 2003, at 12, 40-41.  Moreover, this
procurement approach allowed more choices by potential small business
offerors to select the travel areas where they would be most competitive
and able to successfully perform the contracts.  Finally, unlike the
protesters, DTS/PMO officials found, based on discussions with the Army,
that the MEPS travel needs were well suited for support by small
businesses because the travel services for MEPS are relatively *cut and
dry*; the protesters have not shown this judgment was unreasonable.[29] 
See Tr., June 6, 2003, at 41; Tr., June 9, 2003, at 105; Tr., June 11,
2003, at 12-15. 
    
Since the agency had a legitimate requirement to reengineer DoD travel
processes by consolidating them, and the agency did reasonably consider
the impact on small businesses, we find the agency has justified its
approach to consolidating the agency's requirements.  In this regard, we
have upheld the consolidation of requirements where, as here, an agency
has provided a reasonable basis for using such an approach--e.g., a
definitive agency requirement that mirrors the agency's minimum needs and
necessitates the questioned consolidation.  See The Sequoia Group, Inc.,
supra.
    
DEFECTIVE EVALUATION SCHEME
    
The protesters contend that the evaluation scheme is defective because it
does not adequately describe how it will resolve the situation where an
offeror submits proposals on several travel areas and the agency does not
believe the offeror can perform contracts for all of the areas where it
has submitted the best-value proposal.  Prior to the closing date, when
queried about this matter, the agency stated its position in this matter
to the offerors as follows:
    
An offeror will be considered for each travel area for which it submits a
proposal. . . . the Government will evaluate each proposal [in accordance
with] the evaluation criteria . . . For example, please note the following
evaluation element of the Feasibility of Approach subfactor:  *Offerors
capability to perform the proposed approach based on demonstrated
available resources.*  An offeror may be *downgraded* if it cannot
demonstrate adequate available resources.  Further, . . . an offeror must
be deem[ed] responsible in order to receive an award or awards.  However,
if a responsible, small business offeror is determined to provide the most
beneficial proposals, [in accordance with] the evaluation criteria and
basis for award . . . for multiple travel areas, it will receive awards
for such areas.
RFP amend. 2, Answer to Offeror's Question 5.
    
While the protesters contend that this is insufficient guidance, we do not
believe the agency was required to furnish further precise details about
how it would perform this aspect of the evaluation.  See ABB Power
Generation, Inc., B-272681, B-272681.2, Oct. 25, 1996, 96‑2 CPD P:
183, at 4 (agency is not required to disclose all evaluation standards as
to how disclosed evaluation factors will be evaluated); Lexis-Nexis,
B‑260023, May 22, 1995, 95-2 CPD P: 14 at 6-7 (agency not required
to disclose specific rating methodology).[30]
    
AMENDMENT NO. 0011
    
As noted above, amendment No. 0011 revised paragraph G.16, pertaining to
equitable adjustments if the DTS web portal fails.  With regard to four
areas involving DTS transactions, the government agreed to allow the
contractor to charge the traditional transaction fee, instead of the
contractor's reduced DTS transaction fee, if the DTS failed to meet any of
four separate performance standards at a 10-percent failure rate.  The
four performance standards are (1) 90 percent of all PNRs received through
the DTS will contain all information needed to complete reservations for
air, hotel, and car rental (i.e., origin/destination, dates, specific
flights and/or hotels, type of care, and charge card numbers); (2) PNR
segments for hotel and car rentals will be automatically booked by the DTS
without involvement by the CTO 90 percent of the time when travelers make
the specific selections in the DTS; (3) ticket issuance date will be
applied automatically by the DTS without CTO involvement 90 percent of the
time; and (4) PNRs generated through the DTS will contain complete and
accurate segment data in correct sequence 90 percent of the time.  In
addition, amendment No. 0011 deleted the requirement for the CTO to
guarantee that DoD travelers receive the lowest applicable fare available
at the time of their trip.
    
The first group of protesters argue that these changes implemented through
amendment No. 0011 constituted fundamental changes to the RFP, and the
agency's failure to reopen the competition prejudiced the non-offeror
protesters.  We agree. 
    
FAR S: 15.206(e) provides that *[i]f in the judgment of the contracting
officer, based on market research or otherwise, an amendment proposed for
issuance after offers have been received is so substantial as to exceed
what prospective offerors reasonably could have anticipated, so that
additional sources likely would have submitted offers had the substance of
the amendment been known to them, the contracting officer shall cancel the
original solicitation and issue a new one, regardless of the stage of the
acquisition.*  The purpose of this requirement is to ensure that all
potential offerors are clearly aware of the changed agency requirements,
so that they may have the opportunity to compete on the new basis and the
government benefits from the competition from all offerors who decide to
submit proposals based on the amended requirements.  See Information
Ventures, Inc., B‑232094, Nov. 4, 1988, 88-2 CPD P: 443 at 4.
    
As discussed previously, a major concern of the protesters has been the
risks associated with the DTS.  Amendment No. 0011 was intended to, and in
fact did, alleviate a major component of that concern, by shifting a
significant risk burden associated with the DTS from the CTOs back to the
government.  The protesters also note that deleting the CTO low-cost fare
guarantee is a significant departure from current government travel
policy, since CTOs traditionally have been required to guarantee the
lowest airfares under government travel services contracts.[31]  In this
regard, the protesters explain that the low-cost fare guarantee in the RFP
gave actual and potential offerors considerable concern because of the
problems associated with the DTS, including the inability of the DTS
software to ensure that it displays to travelers the lowest possible
airfare, and that prior to amendment No. 0011 the CTO had the
responsibility to double check to verify that the DTS indeed had booked
the lowest airfare, and to correct any problems identified.
    
The agency does not dispute that the amendment was intended to shift a
considerable portion of the burden, and responsibility for policing the
DTS, including risks of its failure, back to the government.  See Tr.,
June 6, 2003, at 59-60; Tr., June 11, 2003, at 72-75.  The reason the
contracting officer has cited for not treating the changes contained in
that amendment as a substantial change was that the amendment constituted
merely a clarification of the government's existing requirements.  In our
view, the record belies this assertion. 
    
As noted above, amendment No. 0011 was intended to significantly alleviate
the risks associated with the DTS and to relieve the CTOs from the
obligation to guarantee the lowest fare for every transaction.  We believe
the contractual relationship of the parties was fundamentally changed as a
result of the significant changes in the obligations of, and shifting the
financial risks between, the parties, and that this was the intent of
amendment No. 0011.  Such a change in risks that protesters asserted were
unreasonable could encourage additional offerors to submit proposals. 
Indeed, one protester has provided a statement that the risks associated
with the DTS, which primarily fell on the offerors, was a significant
reason that it chose not to submit a proposal and it would reevaluate its
position in this respect if this risk were adequately addressed.[32] 
Based on our review, we find that there is at least a reasonable
possibility of prejudice to the non-offeror protesters by the agency's
failure to reopen the competition as a result of the significant changes
made by amendment No. 0011, and we sustain the protests on this basis.[33]
    
DEFECTIVE PRICE EVALUATION SCHEME
    
The protesters finally contend that the CTO pricing model used to evaluate
prices was defective.[34]  As noted above, the price evaluation scheme was
based on price figures obtained by averaging each of the six transaction
fees proposed by the offerors for each travel area based on the percentage
of transactions facilitated by the DTS (from 0 percent to a range of 91 to
100 percent) for the base period and each option year, and then averaging
the six averaged transaction fees.  The figure arrived at is basically the
numerical average of 24 figures (six transaction fees for four base or
option periods).  This scheme is based upon the presumption that the more
the DTS is utilized by a CTO the lower the cost to the contractor and
presumably the better the price offered to the government.  However,
offerors are not precluded from offering whatever prices their business
judgment suggests for these various percentages.
    
The protesters argue that conducting an evaluation based on such an
approach bears no relationship to the actual costs for the services that
the government intends to purchase under the contract because it is not
linked to the agency's anticipated plan for deploying the DTS.  For
example, the protesters note that, according to the agency's own projected
schedule, deployment of the DTS will be phased in at the various locations
such that it will not be deployed until the last option year in some
locations, and they argue, particularly with regard to MEPS locations,
that deployment of the DTS may not occur at all.  Thus, not only does the
price evaluation scheme bear no relationship to the ultimate relative
costs to the government, but offerors can game the competition by, for
example, offering unrealistically low prices for high DTS usage for travel
areas where they can be confident that the DTS will be completely
unavailable, such as travel areas where the DTS is not likely to be
deployed at all or until the last option year. 
    
Agencies must consider cost to the government in evaluating competitive
proposals.  10 U.S.C. S: 2305(a)(A)(ii); Health Servs., Int'l, Inc.; Apex
Envtl., Inc., B-247433, B‑247433.2, June 5, 1992, 92-1 CPD P: 493 at
3-4.  While it is up to the agency to decide upon some appropriate,
reasonable method for proposal evaluation, an agency may not use an
evaluation method that produces a misleading result.  Health Servs.,
Int'l, Inc.; Apex Envtl., Inc., supra, at 4.  The method chosen must
include some reasonable basis for evaluating or comparing the relative
costs of proposals, so as to establish whether one offeror's proposal
would be more or less costly than another's.  See Health Servs. Int'l,
Inc.; Apex Envtl., Inc., supra.; Penn, Ferrara, Adler & Eichel, B-224224,
Feb. 9, 1987, 87-1 CPD P:134 at 4.
    
Based on our review of the record, the price evaluation scheme here is
fatally flawed.  As noted above, the RFP methodology calls for six prices
for each of the four contract or option period for each travel area with
the agency averaging the 24 prices, thus giving equal weight to the prices
offered for working entirely in the traditional process, for performing 1
through 25 percent of the transactions using the DTS, and so forth, as
well as equal weight for prices for transaction fees for the base period
and each option year.  This methodology assumes that it is as likely for
each travel area that no transactions will be performed that are
facilitated by the DTS as that 90 to 100 percent of the transactions will
be facilitated by the DTS, and that the full range of the percentages of
DTS usage will be possible for each contract period or option.  However,
here the agency included in the RFP various target dates for deployment of
DTS sites at each travel location for each travel area.  Despite
reflecting target dates for deployment of the DTS at certain locations as
late as 2006, the last option year, the CTO pricing model requests pricing
which is then used in the price evaluation to determine the lowest price
to the government for DTS utilization percentages in periods where the DTS
will not yet be implemented, according to the agency's own statements. 
This does not provide any assurance that the reasonable cost to the
government is being reflected in the price evaluation.  Indeed, we agree
with the protesters that such a scheme encourages gaming by offerors who
can propose unrealistically low prices on DTS utilization percentage
ranges at locations and for periods where, by the agency's own
projections, there is no or very little possibility that the DTS will be
implemented, and have these costs considered in determining the evaluated
price to the government of that particular proposal. 
    
With regard to the MEPS locations, the record does not reasonably reflect
when, whether or to what extent the DTS will be used in view of the
different nature of the travel at those locations, yet the transaction
fees based upon percentage of DTS utilization in each contract period and
option are simply averaged to arrive at the evaluated price.  In this
regard, the solicitation did not disclose when the DTS will be fully
deployed for use by the CTOs and the agency has advised offerors that
95 percent of travel at the MEPS would constitute group travel.  See
Tr., June 6, 2003, at 91-92.  From the testimony of the agency officials,
it was not clear whether the DTS can be utilized to book group travel at
the MEPS because the DTS is currently configured to operate through the
GDS, and the protesters have maintained that the GDS, which is controlled
by the airlines, does not permit booking groups of 10 or more through the
GDS, particularly where the names are unavailable; as a result, such
arrangements typically are done through traditional means.  See Tr., June
6, 2003, at 91-93.  Agency officials gave varying testimony on whether the
DTS would accomplish MEPS travel, only definitively representing that the
DTS will automate some aspects of the DoD travel process at the MEPS, such
as reconciliation of accounts.  While the agency expresses optimism that
the DTS will eventually be fully utilized for the MEPS locations, it has
set no dates for the deployment and admits that there are obstacles to
achieving this goal.
    
The agency representatives' testimony substantiates that the price
evaluation scheme was fundamentally flawed.  For example, the DTS/PMO
Senior Financial Analyst responsible for developing the price evaluation
strategy admitted that the model was primarily designed to establish the
contractor's transaction fee, given the percentage of use of the DTS at a
site, and was not intended to evaluate the prices for award and had
*nothing to do with the costs the Government is likely to incur during
this five-year period.*  See Tr., June 11, 2003, at 175-89.  While we
think that the agency has a reasonable basis to solicit the transaction
fee pricing based upon a DTS utilization percentage, it cannot reasonably
give equal weight to prices that it knows will not be charged under the
contract (because the DTS will not have been deployed at that location) in
calculating the evaluated prices of the offerors to be used in the award
selection.
    
Finally, at the hearing, the agency officials admitted that the CTO model
contained various flaws, which it planned to address in an amendment.  For
example, the contracting officer explained that one error in the model was
that the pricing model treated the 2-year base period as 1 year, in
averaging the prices, which gave insufficient weight to the base period
prices in the evaluation.  See Tr., June 11, 2003, 155‑58.  Also,
the agency states that the *workload* numbers used in the announced price
evaluation scheme need to be revised.  Agency Hearing Comments at 5.
    
We find that the pricing model used here does not bear a reasonable
relationship between the evaluated price and the actual price of
performance by a particular offeror, as required, and that it would tend
to encourage unbalanced pricing.  Thus, the price evaluation scheme was
defective, and we sustain the protests on this basis.[35]  See Health
Servs. Int'l, Inc.; Apex Envtl., Inc., supra; Professional Carpet Serv.,
B‑220913, Feb. 13, 1986, 86-1 CPD P:158 at 2.
    
CONCLUSION
    
In view of the changes implemented to the RFP in amendment No. 0011 that
significantly mitigate risks that may have inhibited competition, we
recommend that the Army reopen the competition to firms that have not yet
submitted proposals and allow them to compete for the agency's revised
requirements.  We also recommend that the Army revise its price evaluation
scheme to provide a reasonable basis for calculating the overall prices of
the competing offerors.  Finally, we recommend that the protesters be
reimbursed the reasonable costs of filing and pursing their protests,
including attorneys' fees.  4 C.F.R. S: 21.8(d)(1).  The protester should
submit their certified claims for such costs, detailing the time expended
and costs incurred, directly to the contracting agency within 60 days of
receiving this decision.  4 C.F.R. S: 21.8(f)(1).
    
Anthony H. Gamboa
General Counsel
    
    
    

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

   [1] There are two groups of small business protesters before us.  One
group, represented by Josephine L. Ursini, Esq., includes AirTrak Travel;
The Alamo Travel Group; Business Travel Advisors, Inc./BTA Travel;
Creative Travel d/b/a Kreative Travel; CWT/Century Travel; N&N Travel &
Tours, Inc.; Potomac Falls Travel; Ravenel Brothers, Inc. d/b/a Ravenel
Travel; Sun Travel, Inc.; and WinGate Travel, Inc.  The other group,
represented by Lars E. Anderson, Esq., consists of Alexander Travel, Ltd.
and El Sol Travel.
[2] The DTS/PMO explained that it is chartered to conduct three primary
activities:  (1) conduct business process reengineering of DoD travel
processes; (2) acquire an automated end-to-end system to support the
reengineered temporary duty travel process; and (3) consolidate the
procurement of all DoD Commerical Travel Office (CTO) services.  Agency
Report, DTS/PMO Statement, at 1.
[3] Northrop Grumman is currently the contractor for this contract.
[4] The evolutionary development contemplates that the successive releases
of the DTS will enhance the functionality of the software, while at the
same time correcting problems associated with prior releases of the
software.  For example, the Jefferson version, which is to be utilized
initially under this procurement and which the agency advised would be
released in an enhanced version on June 20, 2003, is expected to correct
problems currently being experienced at the test sites with the Adams
version of the software.  See Hearing Transcript (Tr.), June 6, 2003, at
148; Tr., June 9, 2003, at 82, 185.  (Citations are to the transcript of
the 3-day hearing where our Office heard testimony on the protest issues.)
[5] The GDS describes several independently owned databases controlled
primarily by the airline industry that provide worldwide electronic
distribution of travel information to travel agencies, travel service
providers, and corporations.  The GDS databases that the DTS and the CTOs
currently utilize to book DoD travel through traditional and automated
means include Amadeus, Worldspan, Galileo/Apollo, and Sabre.
[6] The process of ticketing and issuing confirmation numbers is called
the *fulfillment.*
[7] The Army notes that commercial booking engines such as Travelocity,
Expedia, and Orbitz typically result in lower fees than traditional
methods.  The protesters dispute that such savings will inure to the CTOs
because of the complex nature of DoD's travel process and the problems
currently associated with the DTS software.
[8] DoD recognizes that some travel requirements may result in further
actions by the CTOs, notwithstanding the DTS, and thus has requirements
for staffed travel offices.  One example cited by the Army is complicated
overseas travel where the traveler has requested CTO assistance.  See
Agency Report, DTS/PMO Statement, at 5.  Moreover, it appears that the DTS
may not be able to be utilized for Military Entrance Processing Stations
(MEPS), which involve large group travel, because the GDS currently will
not allow CTO to book travel for more than nine people.  Tr., June 9,
2003, at 169-70.  In addition, some travelers may decide not to use the
DTS because they want more personal service.
[9] When fully deployed, the DTS is expected to include the following: 
order writing capability; reservations for all modes of travel;
entitlements computation; automated DoD policy compliance; electronic
signature verification; electronic travel claim settlement, including
split disbursement; and archiving of encrypted financial and travel data. 
See Agency's Hearing Comments at 2.
[10] The Army issued 10 amendments to the RFP prior to the protests.
[11] Of the 89 locations, 51 are Army sites, 35 are Air Force sites, and 3
are Marine Corps sites.  The travel services provided to these locations
are currently being performed under separate contracts with the Army, Air
Force, and Marine Corps.  Agency Report, DTS/PMO Statement, at 1‑2.
[12] STATCO, and TRIP$ are statistical reports regarding various travel
data, such as volume of travel between travel destinations.  See Tr., June
11, 2003, at 106.
[13] Section L.3.2 of the RFP advised:
The Government will not further divide the twenty-eight (28) Travel Areas
into smaller Travel Areas.  Therefore, for each Travel Area, the Offeror
shall accept all of the states and site locations represented within a
Travel Area. 
RFP amend. 8, S: L.3.2.
[14] The feasibility of approach subfactor was more important than the
understanding of the requirements subfactor.
[15] We find no merit to the protesters' contention that the performance
risk factor was unclear or was required to identify subfactors.
[16] The RFP also required offerors to propose certain fees or prices,
which would not be part of the evaluated price, for various additional
services, such as, for example, leisure travel in conjunction with
official travel, transportation of human remains, and an additional agent
at staffed locations.
[17] To complement the price evaluation and to assist in evaluating
offerors' proposed costs, the Army developed an Independent Government
Cost Estimate (IGCE).  The protesters have questioned the validity of the
IGCE.  We find this aspect of the protests to be premature because the
IGCE is an evaluation tool and no award selections have been made under
the RFP, and because the agency states that it is correcting the IGCE.
[18] At the pre-proposal conference, the DTS/PMO officials identified four
known problems with the current Adams version of the DTS software in use
at the pilot sites:  (1) missing data (telephone number, e-mail address,
charge card number, and seat preference); (2) auto‑booking failures
on hotels and rental cars; (3) ticket date not always applied; and
(4) incorrect flight data (sequence of flight segments).
[19] Mr. Anderson denied that El Sol is an affiliate and stated that the
protesters he represents are merely franchisees of Carlson's commercial
travel business.
[20] Moreover, whether or not Carlson may have a motive to obtain
information to compete against, or disrupt the implementation of, the DTS,
the Army stated that it was unlikely that any software besides the DTS
would be utilized to meet the agency's (including DoD's) travel needs.
[21] For example, the protesters assert:
the DTS software implementation has been hampered by many problems,
including, but not limited to:  (a) the need to interface with the
different GDS [databases] operated by the major Airlines, i.e. SABRE,
WorldSpan, Amadeus, and Apollo; (b) the fact that Southwest Airlines does
not participate in most of the [computer reservation systems], yet has
captured an ever-increasing share of the Government market, with the
result that DTS reservations that should be made on [Southwest] under the
city-pair fare program are being made on the wrong airlines, causing more
work for the CTOs at the pilot sites; (c) the need for DTS to interface
with over 50 different DoD accounting programs. 
AirTrak Travel et al., Protest at 8-9.
[22] The protesters argue that the DTS performance data suggests that CTOs
have incurred increased labor costs to correct errant DTS transactions. 
In addition, the protesters point to the fact that the DTS is still in a
developmental stage, and has yet to be deployed anywhere besides at pilot
sites, and that each evolutionary version of the DTS software has yet to
perform as anticipated by DoD and can be expected to have concomitant
problems, as has been the case so far.
[23] For example, the protesters point to the fact that much of the
information concerning testing of the various versions of the DTS that
could be useful to offerors was provided only during the protest.  Since
we recommend below that the competition be reopened, this information can
be made available to all offerors with whatever cautionary statements the
agency believes are appropriate regarding its reliability.
[24] The record shows that the agency's action in anticipation of issuing
the RFP included demonstrating the DTS, inviting businesses to gain more
information about the system, providing interested business with the
opportunity for face-to-face meetings, and issuing a draft RFP to industry
upon which small businesses were invited in order to help formulate the
strategy for this procurement.
[25] The protesters argue that the magnitude of the problems with the DTS
was withheld from potential offerors because the agency did not provide
the detailed information related to the problems with DTS usage
experienced by CTOs at the pilot sites and the extra work associated with
correcting a DTS error.  However, as indicated by the DoD Inspector
General Report, the problems with the DTS were well known in the industry,
as evidenced by the detailed contentions made in the protests, and the
risk that a CTO might incur more work and expense associated with errant
DTS transactions was readily discernible from the information the agency
made available.  
[26]Although the protesters have questioned the accuracy of some of this
data, we believe that this problem is mitigated because the pertinent data
on each travel location included a point of contact, in the event offerors
sought to gain more detailed information.
[27] These CTO services within the continental United States primarily
have been provided by two large business vendors, SatoTravel and Carlson. 
[28] A DTS/PMO official testified that one impact of the RFP as
constituted was to significantly increase the volume of small business
set-asides.  See Tr., June 11, 2003, at 11.
[29] Counsel for the second group of protesters asserts that travel
services for MEPS, which sometimes involve the travel for groups of
recruits, may not be suitable for performance by small businesses because
they differ from more traditional government travel services.  These
protesters have not explained why small businesses cannot handle these
services.  In any event, the small business offerors were given the option
of whether or not to propose on a particular travel group, which may or
may not include a MEPS, and we understand that competition has been
obtained for all travel locations, including the MEPS.
[30] While we do not discuss all of the numerous contentions made by the
protesters associated with the foregoing issues, as well as other
arguments about alleged ambiguities and improper provisions in the RFP, we
have reviewed them all and find no basis to sustain their protests, with
the exception of those protest issues discussed below.
[31] At the hearing, the DTS/PMO Chief of Travel confirmed that current
contracts require CTOs to guarantee the lowest airfares.  See Tr., June
11, 2003, at 88-89, 125. 
[32] This statement, by an official at a firm in the first group of
protesters, rebuts the agency citation in its comments on the hearing to
statements made by counsel for the second group of protesters (which all
submitted proposals) regarding the inadequacy of amendment No. 0011, as
evidence that none of the non-offeror protesters would have submitted
proposals, even if given the opportunity.  Agency Hearing Comments at 12.
[33] The protesters also raise several concerns regarding the wording of
the equitable adjustment clause, including the propriety of limiting
damages in the case of defective government-furnished property (DTS), and
the question whether amendment No. 0011 adequately disclosed the agency's
decision to delete the low‑cost fare guarantee because of other
provisions that still remained in the RFP.  The DTS/PMO officials now
concede that clause G.16 requires revision.  Since the agency intends to
revise the solicitation to address some of the concerns noted by the
protesters in this regard, we do not address the concerns here.  In
addressing these concerns, the agency should also consider whether there
is any merit to the protesters' contention that it is improper to limit
the government's liability to the level of transaction fees for
traditional services, and that this clause requires a deviation to the FAR
government-furnished property provisions.
[34] While the agency now asserts that these protest contentions
concerning the price evaluation scheme are untimely raised, we find that
they were clearly within the scope of the initial pre-closing date
protests.  Thus, these contentions are timely raised under our Bid Protest
Regulations, 4 C.F.R. S: 21.2(a)(1).
[35] The agency may also wish to revisit the role of the CBA pricing in
the price evaluation scheme, given the provision in the RFP advising that
the CTO will no longer be required to provide this service after the DTS
is in place.