TITLE: B-299154, Palmetto GBA, LLC, December 19, 2006
BNUMBER: B-299154
DATE: December 19, 2006
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B-299154, Palmetto GBA, LLC, December 19, 2006

   Decision

   Matter of: Palmetto GBA, LLC

   File: B-299154

   Date: December 19, 2006

   W. Jay DeVecchio, Esq., Kevin C. Dwyer, Esq., Kathy C. Weinberg, Esq.,
   Edward Jackson, Esq., Richard W. Arnholt, Esq., and Bradley A. Areheart,
   Esq., Jenner & Block LLP for the protester.

   David S. Cohen, Esq., Bryan T. Bunting, Esq., Victor G. Klingelhofer,
   Esq., John J. O'Brien, Esq., and Catherine K. Kroll, Esq., Cohen Mohr, LLP
   for Pearson Government Solutions, Inc., an intervenor.

   Jamie B. Insley, Esq. and Christine Simpson, Esq., Department of Health
   and Human Services, for the agency.

   Jonathan L. Kang, Esq., and Glenn G. Wolcott, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest challenging issuance of a task order under a multiple-award
   indefinite-delivery/indefinite-quantity contract is dismissed where the
   task order does not foreclose vendors' opportunity to compete for future
   orders under the contract, and therefore the issuance of the order does
   not constitute a "downselection" and is not subject to GAO's bid protest
   jurisdiction.

   DECISION

   Palmetto GBA, LLC protests the issuance of a task order to Pearson
   Government Solutions, Inc. under a multiple-award
   indefinite-delivery/indefinite-quantity (ID/IQ) contract for Contract
   Center Operations (CCO) awarded by the Department of Health and Human
   Services, Centers for Medicare & Medicaid Services, under request for
   proposals (RFP) No. RFP-CMS-2005-0027. The protester challenges the
   agency's issuance of the task order under the CCO contract based on
   alleged flaws in the agency's cost evaluation and the conduct of
   discussions. The agency contends that our Office lacks jurisdiction to
   hear the protest.

   We dismiss the protest.

   BACKGROUND

   The RFP sought proposals to meet the agency's requirements to serve
   approximately 40 million Medicare beneficiaries by "disseminat[ing]
   information to people with Medicare (and prospective people with Medicare)
   on the coverage options available, prescription drug information and
   General Medicare information." RFP, CCO Statement of Work (SOW), at 1. The
   RFP requires provision of "customer service functions in support of a
   contact center environment within CMS' Contact Center Customer Service
   (CCCS) program, . . . [which will] guide the creation and consolidation of
   beneficiary inquiry contact centers."[1] The RFP anticipated multiple
   awards of ID/IQ contracts, with a 1-year base performance period, and nine
   1-year option periods. The contracts have a maximum potential award value
   of $9 billion.

   The RFP stated that, in addition to proposals for the ID/IQ contract,
   offerors were required to submit proposals for task order 0001, for a
   beneficiary contact center (BCC) that will "accept and respond to inquires
   from its beneficiaries and their family members or caretakers." RFP, BCC
   SOW, at 1. The BCC task order requires the vendor to provide all
   "necessary services, personnel, materials, equipment, and facilities"
   required for the BCC. Id. The RFP advised offerors that the agency
   intended to evaluate offerors' proposals for the task order both for the
   immediate issuance of that order, and as a sample task for purposes of
   determining offerors' capabilities, experience and realistic costs. The
   RFP also stated that offerors' were required to submit proposals for "BCC
   Task Order Optional Requirements." RFP sect. M.3, para. 8. The RFP stated
   that task orders for these optional requirements would be issued only to
   vendors who received a BCC task order. Id. The optional BCC requirements
   are: reference center, print fulfillment, email, web chat, customer
   satisfaction surveys, and standard operating procedures. RFP sect. M.5,
   para. b.2.

   The agency awarded ID/IQ contracts to six offerors, including Palmetto and
   Pearson, on October 26, 2006. Shortly after the award notices for the
   contracts, the agency issued the BCC task order to Pearson. The BCC task
   order is for a 4-month base performance period, with two 1-year option
   periods; the value of the base plus option periods is $453,931,409.
   Following its debriefing, the protester filed this protest of the issuance
   of the BCC task order.

   DISCUSSION

   The agency requests that we dismiss the protest, arguing that our Office
   lacks jurisdiction to hear the protest because it concerns the issuance of
   a task order under a multiple-award ID/IQ contract.[2] The Federal
   Acquisition Streamlining Act of 1994 (FASA), 41 U.S.C. sect. 253j(d),
   provides that protests may not be filed against the issuance or proposed
   issuance of orders under multiple-award task- or delivery-order contracts,
   except where it is alleged that the order increases the scope, period, or
   maximum value of the contract under which the order is issued.

   Here, the protester does not challenge the issuance of the BCC task order
   under the scope, period, or maximum value exception for our Office's
   jurisdiction. Rather, the protester contends that the task order
   constitutes a "downselection" of vendors for the work required under that
   task order, and therefore provides an exception to FASA's prohibition on
   the protests of task or delivery orders.

   Our decisions have held that a task or delivery order that precludes
   competition for future task or delivery orders for the duration of the
   contract performance period may constitute a downselection. See
   Electro-Voice, Inc., B-278319, Jan. 15, 1998, 98-1 CPD para. 23;
   Teledyne-Commodore, LLC--Recon., supra. We have recognized downselections
   in circumstances not only where all work under a contract will be
   foreclosed from future competition, but also where specific categories of
   work will be similarly foreclosed for the duration of the contract. See
   Global Commc'ns Solutions, Inc., B-291113, Nov. 15, 2002, 2002 CPD para.
   194; L-3 Commc'ns Co., B-295166, Dec. 10, 2004, 2004 CPD para. 245.

   Our view is based on the legislative history for FASA, which indicates
   that the provisions addressing task- and delivery-order contracts were
   intended to encourage the use of multiple-award, rather than single-award
   contracts, in order to promote an ongoing competitive environment in which
   each awardee would be fairly considered for each order issued. H.R. Conf.
   Rep. No. 103-712, at 178 (1994), reprinted in 1994 U.S.C.C.A.N. 2607,
   2608; S. Rep. No.103258, at 15-16 (1994), reprinted in 1994 U.S.C.C.A.N.
   2561, 2575-76. In this regard, the Federal Acquisition Regulation (FAR)
   requires agencies to provide all awardees "fair opportunity to be
   considered for each order exceeding $3,000 issued under multiple
   delivery-order contracts or multiple task-order contracts." FAR sect.
   16.505(b)(1)(i). Where an agency issues a task- or delivery-order
   solicitation that essentially abandons the multiple-award,
   fair-consideration scheme envisioned under FASA in favor of selecting a
   single contractor for future task or delivery orders under the ID/IQ
   contract, we will find that there has been a downselection and review a
   challenge to the resulting award.

   The protester argues that the issuance of the BCC task order should be
   considered a downselection because only Pearson will perform the work
   required under the task order for the duration of that order. However, the
   term of the BCC task order is 4 months, with two 1-year option periods,
   whereas the ID/IQ contract has a 10-year performance period. The agency
   states that after the task order expires, with or without the exercise of
   the options, the agency will be required to take further actions to obtain
   BCC requirements.[3] Agency Response to GAO Questions, Dec. 13, 2006, at
   1-2.

   Nothing in the record indicates that the BCC task order precludes the
   agency from issuing other orders during the duration of the BCC task
   order, or at any other time during the term of the contract, that pertain
   to the categories of work required under the BCC task order. In this
   regard, the agency explains that "CMS is currently anticipating including
   work outside the BCC Task Order 001 to include electronic mail expansion,
   special studies, Web Chat expansion, a long term care initiative, and
   other work to fulfill specialized needs under the MAC environment, as it
   develops." Agency Motion to Dismiss at 8. The agency additionally
   anticipates that its requirements for beneficiary contact services are
   expected to grow over time due to expanded mandates, such as the
   prescription drug benefit added to the Medicare Program under the Medicare
   Prescription Drug, Improvement, and Modernization Act of 2003. Decl. of
   Contracting Officer at 2. Furthermore, the agency states that it could
   issue additional orders for BCC requirements, to run concurrently with the
   BCC task order, if the agency's requirements increase beyond the scope of
   that order. Agency Response to GAO Questions, Dec. 13, 2006, at 4.

   Based on these facts, it is clear that offerors will have an opportunity
   to compete for orders for requirements now covered by the BCC task order
   for the remaining seven and a half years remaining under the contract, and
   may also have an opportunity to compete for additional BCC task orders for
   agency requirements that are concurrent to the performance of the existing
   order.[4] Thus, we believe, the BCC task order does not foreclose other
   vendors' fair opportunity to compete under the contract and was not a
   downselction. See L-3 Commc'ns, supra (issuance of a task order was not a
   downselection where solicitation did not clearly reserve future orders for
   recipient of protested order).

   The protester next argues that we should expand our definition of
   downselections to apply to circumstances where, as here, the issuance of a
   task or delivery order forecloses the possibility of competition for a
   certain type of work for a particular period of time. Our Office's
   decisions have not held that a downselection occurs merely because vendors
   will not have an opportunity to compete for a particular category of work
   for a period of time under the contract. Rather, our decisions have found
   downselections only where vendors' future opportunities to compete for
   orders are foreclosed for the duration of the underlying ID/IQ contract,
   for example where the successful vendor is expressly designated as the
   recipient of all future orders that might arise under the category of work
   competed, with no provision for fair consideration of the other vendors
   for those future orders. See L-3 Commc'ns, supra. In any event, as
   discussed above, the record also indicates that the agency could also
   issue concurrent orders for additional BCC requirements.

   The protester finally argues that because Pearson is the only vendor to
   receive a BCC task order, only Pearson is eligible to receive task orders
   for the optional BCC requirements. The RFP, however, advised offerors that
   task orders for optional BCC requirements would be issued only to the
   vendor or vendors who received the BCC task order. Thus, it cannot be
   fairly said that Palmetto did not have an opportunity to compete for the
   optional BCC requirements, as that competition was clearly linked to the
   BCC task order under the terms of the RFP.[5] Moreover, we do not believe
   that there is a downselection here because offerors will have an
   opportunity to compete for future BCC task orders, and thus will also have
   the opportunity to compete for orders for the optional BCC
   requirements.[6]

   In sum, we conclude that our Office lacks jurisdiction to hear this
   challenge to the issuance of a task order under a multiple-award ID/IQ
   contract.

   The protest is dismissed.

   Gary L. Kepplinger

   General Counsel

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

   [1] The CCO contract is part of the agency's overall reform initiative to
   upgrade Medicare programs under the Medicare Prescription Drug,
   Improvement, and Modernization Act of 2003. Pub. L. No. 108-173, 117 Stat.
   2066 (Dec. 8, 2003). RFP, BCC SOW, para. 1.1.

   [2] The agency also argues that the protest is untimely as a whole,
   because the RFP disclosed the fact that the RFP required offerors to
   submit proposals for the BCC task order, and advised that the agency might
   issue an order to only one offeror. Because we lack jurisdiction to hear
   the protest of the task order, we need not address the timeliness issue.
   The protester has, however, raised additional untimely arguments in
   support of its assertion that the issuance of the BCC task order was a
   downselection. In its response to questions from our Office, the protester
   argues that the task order is not "indefinite" in nature because it
   represented a "known" agency requirement, and is therefore not an order
   subject to the FASA protest bar. Protester's Response to GAO Questions,
   Dec. 11, 2006, at 6. The nature of the task order and the agency's
   requirements were clearly disclosed in the RFP and, thus, the challenge is
   now untimely. Bid Protest Regulations, 4 C.F.R. sect. 21.2(a)(1) (2006).
   In any event, the protester's argument that BCC task order resembles the
   one in Teledyne-Commodore, LLC--Recon., B-278408.4, Nov. 23, 1998, 98-2
   CPD para. 121 is unavailing, as that decision addressed an agency's
   issuance of an order for all of the future work under a multiple-award
   ID/IQ contract. The agency's determination in Teledyne to select a single
   vendor's technical solution for all future requirements rendered those
   requirements "definite," and not subject to future competition. Here, the
   BCC task order does not constitute such a one-time issuance of an order
   for work that renders "definitive" all agency requirements anticipated
   under the contract.

   [3] As the agency acknowledges, it has the option to issue orders without
   offering vendors a fair opportunity to compete under certain
   circumstances. See FAR sect. 16.505(b)(2). However, such a possibility
   exists with all task and delivery orders, and does not create a
   downselection.

   [4] The protester appears to suggest that because the agency has not
   specifically identified its requirements, there is no "assurance" that the
   agency will issue future task orders and therefore the agency has failed
   to overcome a presumption that the BCC task order is a downselection. In
   our decisions where we have identified a downselection, however, we have
   relied upon clear statements in the RFP and orders that indicate that
   there will be no future competition for either all requirements, or a
   specific category of requirements. An inherent feature of all ID/IQ
   contracts is that agencies may choose to issue no orders, beyond the
   guaranteed contract minimum; however, a downselection only occurs when an
   agency forecloses the possibility of future competition for a particular
   category of work. In the absence of clear evidence that an agency has
   foreclosed vendors' fair opportunity to compete, we presume that agencies
   will administer their multiple-award ID/IQ contracts in a manner
   consistent with their obligations under FASA.

   [5] In this regard, a task order for the optional BCC requirements could
   also be considered a "logical follow-on to an order already issued under
   the contract," and thus not subject to the rules for fair opportunity for
   consideration. FAR sect. 16.505(b)(2)(iii).

   [6] The record also does not support the protester's argument that only
   the BCC vendor may perform the optional BCC requirements in any capacity
   under the contract, i.e., that only the BCC contractor may provide "email"
   or "print fulfillment" requirements. Rather, the RFP identifies "Optional
   BCC Requirements," and states that only a BCC vendor will receive the
   optional work that may be required to support the BCC.