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
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[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.