TITLE: B-310823; B-310823.2; B-310823.4, Global Computer Enterprises, Inc., January 31, 2008
BNUMBER: B-310823; B-310823.2; B-310823.4
DATE: January 31, 2008
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B-310823; B-310823.2; B-310823.4, Global Computer Enterprises, Inc., January 31, 2008

   DOCUMENT FOR PUBLIC RELEASE

   The decision issued on the date below was subject to a GAO Protective
   Order. This redacted version has been approved for public release.

   Decision

   Matter of: Global Computer Enterprises, Inc.

   File: B-310823; B-310823.2; B-310823.4

   Date: January 31, 2008

   Lawrence J. Sklute, Esq., Sklute & Associates, for the protester.

   William L. Walsh, Jr., Esq., J. Scott Hommer, III, Esq., Patrick R.
   Quigley, Esq., and Peter A. Riesen, Esq., Venable LLP, for QSS Group,
   Inc., an intervenor.

   Timothy A. Chenault, Esq., U.S. Coast Guard, for the agency.

   Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest challenging the issuance of modifications to a task order under
   an indefinite-delivery/indefinite-quantity (ID/IQ) contract as being
   beyond the scope of the task order is dismissed; Government Accountability
   Office lacks jurisdiction to consider whether a modification is beyond the
   scope of the task order.

   2. Protest that the agency improperly bundled work requirements previously
   performed by separate small businesses by means of the modification of an
   ID/IQ task order being performed by a small business is dismissed given
   the statutory bar on protests concerning the issuance of task orders.

   DECISION

   Global Computer Enterprises, Inc. (GCE) protests the decision of the U.S.
   Coast Guard, Department of Homeland Security, to obtain federal financial
   information technology support services through modifications to a task
   order issued to QSS Group, Inc. under a multiple-award,
   indefinite-delivery/indefinite quantity (ID/IQ) contract. GCE principally
   maintains that these services are beyond the scope of QSS's task order,
   and that by acquiring them under the task order, the Coast Guard has
   engaged in improper bundling.

   We dismiss the protest.

   BACKGROUND

   In 1999, the Department of Transportation awarded the Information
   Technology Omnibus Procurement (ITOP) II contract, a multiple-award, ID/IQ
   government-wide acquisition contract (GWAC)[1] for a broad range of
   information technology (IT) hardware, software, and services.[2]
   Specifically, ITOP II was awarded to a total of 35 large, small, and
   small-disadvantaged businesses, including QSS (a small disadvantaged
   business), with a base period of 7 years and a not-to-exceed ceiling of
   $10 billion.[3] Additionally, ITOP II permitted individual agencies across
   the federal government to meet their various IT requirements through the
   issuance of fixed-price, time-and-materials, and/or cost-reimbursement
   task orders to the contract holders.[4] See ITOP II Overview (available at
   http://www.gsa.gov); see also GAO-02-734, Contract Management: Interagency
   Contract Program Fees Need More Oversight (Washington, D.C., July 2002),
   App. XI: Governmentwide Acquisition Contract Data Sheet--Department of
   Transportation.

   On June 9, 2005, the Coast Guard issued task order No. HSCGG3-05-F-TWV436
   to QSS under the vendor's ITOP II contract for systems engineering and
   technical services (hereinafter, SETS II) at a total estimated cost of
   $204,628,568.[5] The SETS II task order included a 1-month transition
   period and a 6-month base period, together with four 1-year options and
   one 5-month option, for a total performance period of 5 years. The
   statement of work described the general scope of the task order as
   "software engineering and technical services that apply to existing and
   future computer systems and communications networks designated by the
   [agency] for SETS II support under this Task Order," and listed numerous
   types of IT services to be provided under the SETS II task order. Agency
   Report (AR), Tab 10, SETS II Task Order, sect. C, at 1. The SETS II
   statement of work also described the specific types of IT services to be
   performed (e.g., software development and maintenance, system
   administration, database administration) as well as the current Coast
   Guard systems upon which these IT services were to be provided. Id. at
   19-88.

   Prior to September 25, 2007, the Coast Guard had not procured its federal
   financial IT support services by means of the SETS II task order. Rather,
   the agency had separately procured these services from GCE, a small
   business concern, for a period of years.[6] Starting in January 2007,
   however, the Coast Guard began planning for the internal transfer of its
   federal financial IT support services from the agency's Chief Financial
   Officer (CFO) to its Chief Information Officer (CIO). Ultimately, the
   Coast Guard completed an acquisition plan for its federal financial IT
   support services that gave the agency's CIO responsibility to obtain and
   manage these services. AR, Tab 19, Agency Acquisition Plan for Financial
   System Support. As a result, on September 25, the Coast Guard issued
   Modification No. P0030 adding federal financial IT support services to
   QSS's SETS II task order.[7] Id., Tab 10, SETS II Task Order, Mod. No.
   P0030.

   GCE subsequently learned that the Coast Guard had internally transferred
   responsibility for its federal financial IT support services and decided
   to modify QSS's SETS II task order to include the work being performed by
   GCE.[8] These protests followed.

   DISCUSSION

   GCE's protest raises various challenges to the Coast Guard's decision to
   modify the SETS II task order to include federal financial IT support
   services. The protester principally argues that the services are beyond
   the scope of the SETS II task order and should have been separately and
   competitively procured. In support of its position, the protester argues
   that the federal financial IT support services are materially different
   from those in the statement of work in the original SETS II task order.
   Importantly, GCE does not argue that the task order modifications here are
   beyond the scope of the ITOP II ID/IQ contract. GCE also protests that the
   agency's decision to modify QSS's SETS II task order violated the Small
   Business Act by improperly bundling work requirements that had previously
   been performed by separate small business concerns. Protest, Nov. 16,
   2007, at 11-13; Protest, Jan. 9, 2008, at 2, 29-30. For the reasons set
   forth below, we conclude that we do not have jurisdiction to consider
   GCE's challenges and, therefore, we dismiss the protest.

   Our Office is generally precluded from considering protests challenging
   the issuance of task or delivery orders under ID/IQ contracts. In this
   regard, the Federal Acquisition Streamlining Act of 1994 (FASA), Pub. L.
   No. 103-355, sect. 1004, 108 Stat. 3243, 3252-53 (1994), codified at 41
   U.S.C. sect. 253j(d) (2000), provides that "[a] protest is not authorized
   in connection with the issuance or proposed issuance of a task or delivery
   order except for a protest on the ground that the order increases the
   scope, period, or maximum value of the contract under which the order is
   issued." Here, GCE does not allege that the modifications issued by the
   Coast Guard adding federal financial IT support services increase the
   scope, period, or maximum value of the ITOP II ID/IQ contract; rather, the
   protester asserts only that the modifications at issue are outside the
   scope of the SETS II task order. Accordingly, as GCE's protest here does
   not fit within the exceptions provided in the statute, we lack
   jurisdiction to review the matter.[9] See Cartographics, LLC, B-297121,
   Nov. 15, 2005, 2005 CPD para. 207 at 2; United Info. Sys., Inc., B-282895,
   B-282896, June 22, 1999, 99-1 CPD para. 115 at 1-2.

   GCE does not dispute that its protest is premised on the assertion that
   the modifications regarding federal financial IT support services are
   beyond the scope of the SETS II task order. Instead, the protester argues
   that consideration of its protest here is not statutorily precluded.
   Specifically, GCE argues that the express language of FASA refers to and
   prohibits two types of protests: 1) those involving the proposed issuance
   of task and delivery orders; and 2) those involving the issuance of
   original task and delivery orders. GCE Comments, Jan. 18, 2008, at 5
   (emphasis added). By contrast, the modification of an existing task order,
   GCE maintains, involves neither the issuance nor the proposed issuance of
   a task order and is, therefore, not barred from protest. GCE argues that
   Congress did not intend the FASA bar on protests to encompass task order
   modifications: the statute does not mention task order modifications, and
   if Congress had intended the statute to apply as well to task order
   modifications, it would have added specific language to this effect.[10]
   Id.

   We recognize that the FASA protest bar does not expressly address the
   issue of modifications of task and delivery orders issued under ID/IQ
   contracts. We think, however, that the restriction on protests of orders
   placed under a task order  contract as contained in 41 U.S.C. sect.
   253j(d) also applies here.

   Congress passed FASA as part of an effort to reform federal procurement
   activities "by greatly streamlining and simplifying [the federal
   government's] buying practices." 140 Cong. Rec. H9240, H9240 (1994)
   (statement of Rep. Conyers). Bid protests were one area targeted by FASA
   for reform. In particular, FASA established that, when agencies utilize
   ID/IQ contracts--with a statutory preference for the use of multiple-award
   ID/IQ contracts, thereby creating a competitive pool of contractors for
   individual work projects--the issuance of individual task and delivery
   orders to these contractors would not be subject to protests. The intent
   of Congress "was to [generally] exempt from protest the issuance of
   individual task orders to contractors who had already received awards,
   subject to protest, of their master ID/IQ contracts." A & D Fire
   Protection Inc. v. U.S., 72 Fed. Cl. 126, 134 (2006).

   The protester essentially argues that although protests regarding an
   agency's issuance of task orders under ID/IQ contracts are precluded,
   protests regarding an agency's modification of such task orders are
   permitted. We find this position to be inconsistent with both the language
   of FASA and the underlying congressional intent. Moreover, we see no logic
   in holding that an agency's decision to modify an existing task order
   could be subject to protest when it is clear that an agency's decision to
   perform the very same action by means of a new task order would not be
   subject to protest; that is, had the Coast Guard issued a separate task
   order to QSS for federal financial IT support services rather than
   modifying the existing SETS II task order, it is undisputed that this
   action would not be subject to protest. In our view, accepting GCE's
   position--which would permit protests regarding task order modifications
   but not the task orders themselves--would elevate form over substance. In
   sum, we conclude that FASA's bar on protests in connection with the
   issuance or proposed issuance of task orders encompasses protests
   concerning the issuance or proposed issuance of task order modifications.

   GCE also protests that the agency's decision to modify QSS's SETS II task
   order to include federal financial IT support services constitutes
   improper bundling in violation of the Small Business Act, 15 U.S.C. sect.
   631(j)(3) (2000). Specifically, the protester argues that combining
   federal financial IT support services with the original SETS II work
   results in a bundled requirement that inhibits small business competition.
   GCE also argues that the Coast Guard failed to perform a bundling analysis
   as required by both statute and regulation, and failed to comply with the
   requirements of FAR sect. 19.202-1(e) by providing notice of its bundled
   requirement to the Small Business Administration (SBA). Protest, Nov. 16,
   2007, at 12-13; Protest, Jan. 9, 2008, at 30. In support of its argument
   that our Office has jurisdiction to consider its protest on these grounds,
   notwithstanding the general bar on task order protests as discussed above,
   GCE cites our decision in LBM, Inc., B-290682, Sept. 18, 2002, 2002 CPD
   para. 157.

   In LBM, the Army created a multiple-award ID/IQ contract for a wide range
   of logistical functions and supporting tasks, and subsequently decided to
   place the transportation motor pool services for Fort Polk, Louisiana,
   which had previously been set aside exclusively for small businesses,
   under this ID/IQ contract. LBM, a small business concern, protested the
   Army's decision to withdraw these services from exclusive small business
   participation and to transfer the services to the ID/IQ contract. We
   decided that FASA's limitation on our bid protest jurisdiction regarding
   task orders did not apply in this case, as LBM's protest was a challenge
   to the terms of the underlying ID/IQ contract solicitation.[11] Id. at 4.

   We find our decision in LBM inapposite to the circumstances here. In LBM,
   the protester challenged the propriety of the agency's decision to
   transfer certain requirements to the multiple award ID/IQ contracts. By
   contrast, GCE challenges only the agency's decision to combine federal
   financial IT support services with other work originally required under
   the SETS II task order. Unlike the circumstances in LBM, GCE has not shown
   or even alleged that these services represent work not already encompassed
   by the ITOP II ID/IQ contract.[12] As GCE's protest here again constitutes
   a challenge to the SETS II task order and does not fit within the
   exceptions provided in the statute, we lack jurisdiction to review the
   matter.

   The protest is dismissed.

   Gary L. Kepplinger
   General Counsel

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

   [1] A GWAC is defined as a task-order or delivery-order contract for
   information technology established by one agency for governmentwide use.
   Federal Acquisition Regulation (FAR) sect. 2.101.

   [2] ITOP II divided the range of available IT solutions into three
   functional support areas--information systems engineering, systems
   operations and management, and information systems security support
   services. Under each of the functional areas, the ITOP II statement of
   work listed various tasks. Administrative oversight and management of
   ITOP II was transferred from the Department of Transportation to the
   General Services Administration (GSA) in September 2004.

   [3] ITOP II "expired" (i.e., precluded the placement of additional new
   orders) on January 13, 2006, and all existing task and delivery orders
   could not have a performance period of more than 5 years beyond the ITOP
   II expiration date.

   [4] ITOP II also established a not-to-exceed amount of $300 million for
   individual task or delivery orders.

   [5] The issuance of the SETS II task order to QSS was the result of a
   competitive procurement among ITOP II contract holders. Specifically, on
   March 3, 2005 the agency issued a task order request for proposals, set
   aside for small disadvantaged ITOP II contractors, and after the
   evaluation of task order proposals, issued the SETS II task order to QSS.
   Contracting Officer's Statement, Dec. 19, 2007, at 3.

   [6] Specifically, GCE has provided financial systems integration services
   to the Coast Guard through a series of contracts since 2000. AR, Tab 28,
   Memorandum from GCE to the Coast Guard, Oct. 25, 2007, at 2. By means of a
   task order issued against its GSA Federal Supply Schedule contract, GCE
   currently provides federal financial IT support services to the Coast
   Guard for the period from August 16, 2007 to March 31, 2008. Id., Tab 20,
   GCE Task Order No. HSCG23-07-F-FCV014.

   [7] Modification No. P0030 provided for the transition of federal
   financial IT support services from GCE to QSS during the period from
   September 25, 2007 to March 31, 2008. The Coast Guard subsequently issued
   another modification to the SETS II task order which required QSS to
   perform federal financial IT support services for the period from January
   1, 2008 to December 31, 2008. AR, Tab 50, SETS II Task Order, Mod. No.
   P0032.

   [8] The Coast Guard argues that GCE's protest is untimely, since the
   protester previously became aware of what action the agency was
   considering and did not file its protest within 10 days thereof. AR, Dec.
   19, 2008, at 8. Because we lack jurisdiction to hear GCE's protests, we
   need not address the timeliness issue. We note, however, that while the
   Coast Guard issued Modification No. P0030 to QSS on September 25, it did
   not inform GCE of its decision until November 8, and did not provide GCE
   with a copy of the modification until November 20, after receipt of a
   Freedom of Information Act request.

   [9] GCE also protests that the agency's action violates both the Chief
   Financial Officers Act of 1990, 31 U.S.C. sections 901(b)(1)(G), 902(a)(5)
   (2000), and section 539(a) of the Consolidated Appropriations Act, 2008,
   Pub. L. No. 110-161 sect. 539(a), 121 Stat. 1844 (2007). GCE's Comments,
   Dec. 31, 2007, at 23-25; Protest, Jan. 9, 2008, at 2, 29-30. These
   assertions likewise do not fit within any of the jurisdictional exceptions
   provided in the statute.

   [10] The protester also argues that although a GWAC is a form of ID/IQ
   contract, and FASA provides for a general statutory bar on protests
   involving task and delivery orders issued under ID/IQ contracts, Congress
   did not intend for the FASA bar to protests to encompass GWACs. Id. at
   5-6. GCE provides (and we are aware of) no legal support for this
   assertion.

   [11] LBM also protested that transferring the Fort Polk motor pool
   services to the ID/IQ contract constituted improper bundling under the
   Small Business Act and that the Army had improperly bundled without
   notifying the SBA. Given that there were multiple small business concerns
   that held the ID/IQ contracts and that could compete for these services,
   we were unable to find that consolidating these services into the ID/IQ
   contracts was improper bundling, or that the Army was required to notify
   the SBA of the addition of the services to the ID/IQ contracts. Id. at 9
   n.7.

   [12] To the extent that GCE argues that what it is actually protesting is
   the transfer and inclusion in ITOP II of federal financial IT support
   services without complying with applicable laws and regulations, see
   Protester's Comments, Jan. 18, 2007, at 2, this is a mischaracterization
   of its protests. GCE's protests never contested the propriety of the
   agency's action with regard to the ITOP II ID/IQ contract (only with
   regard to the SETS II task order). In fact, GCE did not even obtain a copy
   of the ITOP II ID/IQ contract before January 17, 2008, well after its
   protests here had been filed with our Office.