TITLE: B-400321; B-400402, Delex Systems, Inc., August 5, 2008
BNUMBER: B-400321; B-400402
DATE: August 5, 2008
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B-400321; B-400402, Delex Systems, Inc., August 5, 2008

   Decision

   Matter of: Delex Systems, Inc.

   File: B-400321; B-400402

   Date: August 5, 2008

   Pamela J. Mazza, Esq., and Isaias Alba, IV, Esq., PilieroMazza PLLC, for
   the protester.
   Duncan Butts, Esq., and Julie Griffiths, Esq., Department of the Navy, for
   the agency.
   Paula A. Williams, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Government Accountability Office does not have jurisdiction over protests
   challenging the proposed issuance of delivery orders under a
   multiple-award indefinite-delivery, indefinite-quantity contract where the
   delivery orders are valued at less than $10 million.

   DECISION

   Delex Systems, Inc. protests the terms of two solicitations for delivery
   orders issued by the Department of the Navy, Naval Air Systems Command to
   holders of an existing indefinite-delivery, indefinite-quantity (ID/IQ)
   contract. The first solicitation, request for proposals (RFP) No.
   N61339-08-R-0032 (RFP 0032), is for the revision and maintenance of the
   Naval Strike Air Warfare Center training program curriculum; the second
   solicitation, RFP No. N61339-08-R-0033 (RFP 0033), is for the revision and
   maintenance of training curricula for the Tidewater Naval Aviation
   Training Systems.[1] Delex, a small business concern, and an awardee under
   the existing ID/IQ contract, argues that these solicitations should have
   been set-aside for a competition limited to small businesses holding the
   ID/IQ contract.

   We dismiss the protests.

   BACKGROUND

   Prior to the issuance of the solicitations at issue here, on August 15,
   2003, the agency awarded ID/IQ contracts to four small businesses,
   including Delex, and three large businesses to supply the agency's
   Training Systems Contract II (TSC II), Lot II requirements.[2] The base
   ordering period under the TSC II, Lot II ID/IQ contract is 8 years and the
   agency reserved the right to compete future delivery orders among the
   small business ID/IQ contract holders.

   As amended, each of the protested solicitations provides for the issuance
   of cost-plus-fixed-fee (CPFF) delivery orders. The record shows that the
   anticipated orders under RFP 0032 have a total value of $2,654,568, and
   the orders under RFP 0033 have a total value of $9,099,422. Agency Request
   for Dismissal, attach. 2, RFP 0032, amend. 3; attach. 3, RFP 0033, amend.
   3. Both RFPs advised offerors that proposals exceeding the stated total
   value for each solicitation would be eliminated from the competition. Id.

   The Navy requests dismissal of these protests because challenges to the
   proposed issuance of delivery orders under a multiple-award ID/IQ contract
   valued under $10 million are precluded by section 843 of the National
   Defense Authorization Act for Fiscal Year 2008 (NDAA), Pub. L. 110-181,
   122 Stat. 3, 237 (2008) (to be codified at 10 U.S.C. sect. 2304c(e)). In
   contrast, Delex argues that our Office has jurisdiction because the
   protests are not, in Delex's view, challenging the proposed issuance of
   the orders, but are instead challenging the "removal of the task orders
   from the small business set-aside component of the [c]ontract" without
   regard to the requirements of Federal Acquisition Regulation (FAR) sect.
   19.502-2(b).[3] Protester's Initial Response at 2 (July 9, 2008).
   According to the protester, in view of our decision in LBM, Inc.,
   B-290682, Sept. 18, 2002, 2002 CPD para. 157, and cases cited therein, our
   Office has jurisdiction over this issue despite the acknowledged statutory
   bar to our jurisdiction when task or delivery orders are valued under $10
   million. Id.; Protester's Supplemental Response (July 14, 2008).

   DISCUSSION

   This analysis necessarily begins with the language of the NDAA.
   Specifically, it states:

     (1) A protest is not authorized in connection with the issuance or
     proposed issuance of a task or delivery order except for--

       (A) a protest on the ground that the order increases the scope,
       period, or maximum value of the contract under which the order is
       issued; or

       (B) a protest of an order valued in excess of $10,000,000.

   10 U.S.C. sect. 2304c(e)(1). Accordingly, our authority to consider
   protests challenging the issuance of task or delivery orders does not
   extend to orders valued below $10 million, absent an allegation that the
   order increases the scope, period, or maximum value of the underlying
   contract.

   Here, the record does not indicate, and the protester does not otherwise
   allege, that the proposed delivery orders will exceed the scope, period,
   or maximum value of the underlying ID/IQ contract. Nor is there any
   dispute that the values of the proposed orders under either RFP are less
   than the $10 million jurisdictional threshold. Under these circumstances,
   this Office does not have jurisdiction under the NDAA to consider the
   protests of alleged violations of procurement statutes or regulations such
   as the small business set-aside requirements.

   We also think Delex's reliance on our decision in LBM is misplaced. In
   that decision, LBM, a small business contractor that had been performing
   transportation motor pool services for the Army under a small business
   set-aside, challenged the agency's decision to transfer the follow-on
   requirement for the motor pool services to an existing ID/IQ contract
   without consideration of the set-aside requirements in FAR
   sect. 19.502-2(b). We concluded that the LBM protest was, in essence, a
   challenge to the terms of the underlying ID/IQ task order contract. Unlike
   Delex, LBM did not hold an ID/IQ contract and never received effective
   notice that the ID/IQ contract would, later, be viewed as including the
   work LBM was performing under a small business set-aside. LBM, supra, at
   4-7. As a consequence, the Delex protests are not analogous to the facts
   and circumstances in the LBM decision, and provide no basis for our Office
   to hear this protest in the face of the unambiguous statutory bar to
   protests of delivery orders valued under $10 million.

   The protests are dismissed.

   Gary L. Kepplinger
   General Counsel

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

   [1] A third solicitation, RFP No. N61339-08-R-0035 is also the subject of
   a pending protest from Delex, which is docketed as B-400403.

   [2] The TSC II ID/IQ contract was comprised of two award groups described
   as:

     Lot I -- Training Systems Analysis, Development and Support

     Lot II -- Technology-based Curricula, Electronic Classrooms and Computer
     Laboratories

   RFP, Statement of Work, at 1.

   [3] FAR sect. 19.502-2(b) provides that an acquisition with an anticipated
   dollar value of more than $100,000 must be set aside for small business
   concerns if the agency determines that there is a reasonable expectation
   that offers will be received from at least two responsible small
   businesses, and that award will be made at a fair market price.