WorldWide challenges the modification of MEP's contract to increase the contract ceiling by $679 million, arguing that the modification was outside the scope of MEP's underlying contract and therefore constitutes an improper noncompetitive award in contravention of the competition requirements established by CICA, specifically, 10 U.S.C. sect. 2304(f)(1)(C) (2006). To the extent the agency has justified its actions based on a finding that only MEP can meet the agency's interim need for linguists--a conclusion disputed by the protester--WorldWide asserts that the noncompetitive extension of MEP's existing contract was attributable to a lack of advance procurement planning, which is also precluded by CICA. 10 U.S.C. sect. 2304(f)(5).

CICA requires that an agency obtain full and open competition in its procurements through the use of competitive procedures. 10 U.S.C. sect. 2304(a)(1)(A). Exceptions are provided under CICA, however, where (among other specified exceptions) there is only one responsible source able to meet the agency's requirements, 10 U.S.C. sect. 2304(c)(1). CICA also provides that noncompetitive procedures may not be used where agency contracting officials failed to perform advance planning. 10 U.S.C. sect. 2304(f)(5); HEROS, Inc., B-292043, June 9, 2003, 2003 CPD para. 111 at 6; New Breed Leasing Corp., B-274201, B-274202, Nov. 26, 1996, 96-2 CPD para. 202 at 6. Our Office has recognized that the requirement for advance planning does not mean that such planning must be completely error-free, but, as with all actions taken by an agency, the advance planning required under CICA must be reasonable. Barnes Aerospace Group, B-298864, B-298864.2, Dec. 26, 2006, 2006 CPD para. 204 at 4-5.

Here, WorldWide is challenging the modification of MEP's existing contract, not the award of a sole-source contract per se. As a general rule, our Office will not consider protests against contract modifications, since they involve matters of contract administration and are beyond the scope of our bid protest function. See 4 C.F.R. sect. 21.5(a) (2010); DOR Biodefense, Inc.; Emergent BioSolutions, B-296358.3, B-296358.4, Jan. 31, 2006, 2006 CPD para. 35 at 6. An exception to this general rule is where a protester alleges that a modification is beyond the scope of the original contract, as WorldWide argues in this case, since, absent a valid sole‑source justification, the work covered by the modification would be subject to the competition requirements established under CICA. Engineering & Prof'l Servs., Inc., B-289331, Jan. 28, 2002, 2002 CPD para. 24 at 3.

In determining whether a modification triggers CICA's competition requirements, we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Engineering & Prof'l Servs, Inc., supra, at 4. Evidence of a material difference between the modification and the original contract is found by examining changes in the type of work, performance period, and costs between the contract as awarded and as modified. Atlantic Coast Contracting, Inc., B-288969.2, June 21, 2002, 2002 CPD para. 104 at 4.

The agency and the intervenor argue that modifying MEP's contract to increase the contract ceiling by $679 million is not outside the scope of MEP's underlying contract. In this regard, they principally assert that the increase in the ceiling level does not change the type of work required under the contract and offerors could have reasonably anticipated a modification to increase the contract ceiling. WorldWide maintains that the magnitude of the increase in the dollar ceiling implicitly reflects a change in the nature of the agency's original requirement and the basis of the original competition, and therefore renders the modification outside the scope of the original award.

As discussed below, we do not need to decide the question of whether the modification is within the scope of MEP's contract because, even assuming that it was not, the agency properly supported the modification with a reasonably based J&A under 10 U.S.C. sect. 2304(c)(1).

In challenging the agency's decision to increase the ceiling under MEP's linguist contract, WorldWide does not in any way contest the vital role that the linguists play in support of the U.S. mission in Afghanistan. Rather, WorldWide argues that the need for a noncompetitive modification was the result of the agency's failure to adequately plan for the award of a competitive contract. According to WorldWide, it should have been "obvious" to the agency by April 2009 that there would be a need for additional linguists as of that time given that the military was requesting additional troops and support services for the efforts in Afghanistan, yet the agency waited until 2010 to take any action to ensure that it could meet the increased need for linguists. Protester's Opposition to Dismissal Request, June 8, 2010, at 2, 9; Protester's Comments, supra, at 2. WorldWide also suggests that the agency's planning for the award of a competitive contract was unreasonable given the length of time scheduled for the procurement, approximately 22 months. According to WorldWide this time period should have been significantly reduced and can still be shortened further so as to minimize the period needed for the noncompetitive modification.

The record reflects that the agency initiated the process of planning for a competitive award in May 2009. When the need for greater numbers of linguists became apparent in August 2009, and was further defined as a consequence of the surge decision in December 2009, the agency took steps to set an expedited schedule for the award of a competitive linguist contract--a process requiring numerous steps, reviews, and milestones.

While WorldWide believes that this period of time could be greatly compressed, the record does not support its opinion in this regard. As discussed in the May 3 J&A, the linguist services are vitally important to the U.S. war effort in Afghanistan. Further, the anticipated size of the award at issue is very large; it will be a contract with a value likely in excess of $1 billion, involving performance by thousands of contractor personnel at remote locations throughout Afghanistan. In light of the complexity, scope, and criticality of the requirements, we have no basis to conclude that the procurement planning for the competitive linguist award reflects unreasonable delay or a lack of diligence by the agency. On the contrary, the record shows that, beginning in May 2009, the agency has engaged in appropriately deliberate efforts to ensure a competitive award of a new long-term contract by March 2011. As noted above, an agency's procurement planning need not be error-free, it need only be reasonable. Based on the record in this case, we think that WorldWide's challenge to the agency's procurement planning efforts are without merit.

We next turn to WorldWide's assertion that the agency's decision not to compete the interim linguist requirement was unreasonable. WorldWide challenges the agency's conclusion that MEP was the only source capable of providing the required linguist services, arguing that INSCOM's determination was based on incomplete and flawed market research regarding the capabilities of potential offerors--WorldWide declares that it can meet the Army's urgent short-term needs without any degradation of service. In representing that it is capable of meeting the agency's requirements, WorldWide relies on its own linguist assets, as well as those of its potential "teammates" which are currently performing linguist contracts for U.S. and coalition forces in Afghanistan and Iraq. Protester's Opposition to Dismissal Request, supra, at 4.

WorldWide's challenge to the agency's decision is flawed in several respects. As an initial matter, WorldWide does not address the agency's determination that even if there were firms capable of meeting the linguist requirements, conducting a limited competition among such firms was not a practicable alternative. As noted above, the J&A expressly found that conducting a limited competition was not a viable option given that the award would be for a very short duration (approximately 3 to 5 months), coupled with the fact that conducting such a competition would undermine the agency's ability to timely award the long-term linguist contract, and would introduce multiple transitions during a period of high stress for U.S. forces in Afghanistan.

The agency has set forth in its J&A, and in its response to the protest, the challenges associated with awarding and transitioning a contract of this importance to the military mission and magnitude--one involving thousands of contractor personnel operating at over 200 locations throughout Afghanistan. In this regard, the agency reasonably questioned the advisability of awarding, and transitioning to, an interim contract of this size, based on limited competition, only to have it displaced shortly thereafter by a long-term competitive contract requiring the same type of large-scale contractor transition; as indicated by the J&A, the agency reasonably was concerned that multiple large-scale transitions for these vital services would increase risk and disruption to U.S. military capabilities and thereby endanger the military mission and the lives of U.S. troops. See, e.g., Vertol Sys. Co., Inc., B-293644.6 et al., July 29, 2004, 2004 CPD para. 146 at 3 (where requirement relates to national defense, agency has the discretion to seek not just reasonable results, but the highest possible effectiveness). Given this context, we find the agency reasonably weighed and balanced the impact of conducting a limited competition against the relatively short duration of any resulting award, and reasonably concluded that conducting such a competition was not a viable option. Under these circumstances, the agency had no alternative other than modifying MEP's contract so that it could continue providing linguist services until the agency is able to award the follow-on competitive contract.

We likewise are not persuaded by WorldWide's challenges to the market research underlying the J&A prepared by INSCOM. The record reflects that the agency considered the capabilities of numerous firms, to include WorldWide, and solicited specific information regarding the capabilities of GLS, which apparently is the largest provider of linguist services to the military and was then operating in Iraq. The agency concluded that none of the firms, including GLS, was a viable alternative to having MEP continue providing linguists in Afghanistan. In reaching this conclusion, the agency reasonably gave paramount consideration to military operations in Afghanistan, noting that they were at a critical juncture given the implementation of the U.S. troop surge. As explained in the J&A, the surge presents a period of logistical strain and "high operational stress." AR, Tab 6, J&A, May 3, 2010, at 6. Given the underlying military considerations, the agency did not believe any contractor could transition the contract--which, as explained in the J&A and discussed above, presents unique and difficult challenges, entails providing more than 6,000+ linguists at 200 locations throughout Afghanistan, during the surge--without an adverse impact on U.S. forces and potentially compromising the military's ability to execute its mission in Afghanistan.

WorldWide maintains that the agency's transition concerns are overstated, arguing that any transition would have limited impact since its "team" has a presence in Afghanistan, and the vast majority of linguist personnel would simply transition to the new vendor. In this regard, WorldWide cites the J&A, which states that experience shows that approximately 90 percent of the incumbent's workforce transitions to the new contractor, and notes that the agency transitioned GLS's Iraq contract, which was actually larger, without any difficulty. The record reflects that the agency considered each of these points, yet concluded that continuing to obtain linguist services from MEP was the only viable option given the state of military operations in Afghanistan.

First, it is important to recognize that this contract involves more than simply providing a particular number of qualified linguists. It requires transporting, billeting, feeding, and paying these individuals at over 200 locations throughout Afghanistan. While the transition thus must address these requirements as well, WorldWide focuses almost exclusively on transitioning the linguist assets themselves. In any event, to the extent WorldWide complains that the agency did not give sufficient consideration to its own capabilities, the record shows that the agency had no basis to believe that WorldWide was capable of performing the large-scale requirement at issue, particularly since WorldWide did not provide the agency with any information regarding its capabilities in response to the RFI and WorldWide has never performed a contract of this magnitude in the past. In this regard, the agency expressly concluded that WorldWide was not a viable source for the current requirements in view of the small size of its prior Afghanistan linguist contract, which involved providing approximately 100 linguists, all of whom had transitioned to MEP's contract when it was concluded in March 2010. Nor should the agency be faulted for its failure to have considered WorldWide's "team," given that the agency did not know, or have reason to know, that any such team existed. Under these circumstances, the agency did not act unreasonably in not contacting WorldWide or further investigating its capabilities or interest. See Chicago Dryer Co., B-401888, Dec. 8, 2009, 2009 CPD para. 253 at 2 (denying challenge to an agency's market research in support of a sole-source award and explaining that an agency is not required to contact all potential sources when conducting market research regarding the feasibility of sole-source procurement).

Further, the agency specifically considered the difficulty associated with transitioning the incumbent workforce, and expressly noted that a 90 percent transition rate for the incumbent's linguists would result in an immediate loss of 500 linguists, thereby increasing operational risk at a time of significant stress on the military due to the surge. AR, Tab 6, J&A, May 3, 2010, at 4. Moreover, WorldWide's reference to the alleged ease of the transition under GLS's Iraq linguist contract is misplaced since the J&A describes the greater challenges posed by the requirement for linguist services in Afghanistan. As noted above, the J&A explains that establishing, managing, and sustaining linguist support services in Afghanistan is particularly difficult due to the country's widely dispersed population, which can be located in remote and isolated regions; literacy problems within the population; the fact that there are dozens of languages and dialects, and few locals capable of acting as linguists; and the fact that the national infrastructure and central government remain limited, and the economy is rudimentary. Id. Given this record, we have no basis to question the reasonableness of agency's actions.

In sum, we find that the J&A supports the reasonableness of the agency's decision to increase the ceiling under MEP's contract, thereby allowing MEP to continue providing vitally important linguist services to U.S. forces in Afghanistan, until the time when the agency can award a competitive contract for these services.  (WorldWide Language Resources, Inc., B-299315.7; B-299315.8, August 12, 2010)  (pdf)

In determining whether a modification triggers the competition requirements under CICA, we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Engineering & Prof'l Servs., supra, at 4; AT&T Commc'ns, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1205 (Fed. Cir. 1993). Evidence of a material difference between the modification and the original contract is found by examining changes in the type of work, costs, and performance period between the contract as awarded and as modified. Overseas Lease Group, Inc.,
B-402111, Jan. 19, 2010, 2010 CPD para. 34 at 3; Atlantic Coast Contracting, Inc.,
B-288969.2, June 21, 2002, 2002 CPD para. 104 at 4. We also consider whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes found in the modification, and thus whether the modification would have materially changed the field of competition. See DOR Biodefense, Inc.; Emergent BioSolutions, supra; Atlantic Coast Contracting, Inc., supra.

As detailed below, we conclude that the record demonstrates that the scope of the original contract was not substantially changed by modification 0018, and thus the changes to the contract would not have had a substantial impact on the field of competition for the original contract award.

The RFP and resulting Phase 2 contract called for a research and development (R&D) effort. Unlike contracts for supplies and services, most R&D contracts are directed toward objectives for which the work or methods cannot be precisely described in advance; it is difficult to judge the probabilities of success or required effort for technical approaches, some of which offer little or no early assurance of full success. FAR sect. 35.002. Our decisions have recognized that additional latitude for modifying a contract may exist where the contract is for R&D work, noting that the scope of such contracts is often flexible because of unanticipated changes due to the lack of definitiveness of the government's requirements. DOR Biodefense, Inc.; Emergent BioSolutions, supra, at 7; Everpure, Inc., B-226395.4, Oct. 10, 1990, 90-2 CPD para. 275 at 4-5.

Additionally, the scope of work of the RFP and original PharmAthene Phase 2 contract was a broadly-defined one: the continued advanced development, testing, and production of rPA anthrax vaccine suitable for FDA licensure, as well as specific objectives and milestones that were to be accomplished in support thereof. Given this broad scope of work, we think the RFP and original contract reasonably contemplated that there would be developmental changes and setbacks during performance, including, as here, those resulting from changes in FDA guidance, manufacturing facility changes, technology transfer requirements, and additional studies. See AT&T Comm'cns, Inc. v. Wiltel, supra, at 1205-06 (a broad original scope of work may validate a broader range of later modifications without further competition).

The record also reflects that the original objectives of PharmAthene's Phase 2 contract have not changed, and that modification 0018 continues rather than alters the original contract objectives. As stated by the HHS project officer, "[t]he steps in [the] process have changed over time, but the end result has remained the same." Tr. at 293. We agree. Where the type of work under a contract as modified remains substantially unchanged, we do not view modifications of the technical requirements of performance to be outside the scope. Atlantic Coast Contracting, Inc., supra. Furthermore, a technical change to a contract should be viewed in the context of the contractor's obligations "as a whole." AT&T Comm'cns, Inc. v. Wiltel, supra, at 1206. Quite simply, given the broadly-defined, developmental nature of the PharmAthene Phase 2 contract requirements, we conclude that modification 0018 does not represent a material difference in the type of work from the original contract.

Further, we think that the solicitation for the original contract adequately advised offerors of the potential for the type of changes that occurred during the course of contract performance (i.e., changes in processes and activities but not objectives), and that in the context of the type of R&D work at issue here, modification 0018 encompasses changes which the field of competitors could reasonably have anticipated. DOR Biodefense, Inc.; Emergent BioSolutions, supra, at 7; Engineering & Prof'l Servs., supra, at 4.

Emergent argues that the work requirements of modification 0018 are beyond the scope of work of the original contract in one particular regard. Specifically, the protester contends that the RFP expressly provided that the original contract would not fund animal aerosol challenge studies, yet modification 0018 now funds such studies. Emergent argues that, as a result, this work is out-of-scope and needs to be competitively procured.

The original solicitation stated, in relevant part,

A critical component of an rPA vaccine database and licensure of any rPA vaccine will be controlled animal efficacy data and aerosol challenge data in relevant animal models. However, there is a worldwide shortage of Biosafety Level 3 aerosol challenge capacity . . . so it is therefore essential that this capacity be used as efficiently as possible to generate these crucial data. . . . Accordingly, [HHS] intends to directly fund the conduct of the aerosol animal challenge studies associated with this advanced rPA vaccine development effort through a separate contract with a separate contractor. . . . This close government/contractor relationship will enable efficient implementation of a comprehensive core of well-designed aerosol challenge studies that should provide quality data to support product licensure using the animal rule.

AR, Tab 5, RFP at 4.

Thus, while the objectives and milestones in the RFP required a successful offeror to design, construct, and analyze the animal aerosol challenge studies necessary for FDA product licensure, the offeror did not have to perform the actual studies itself. As HHS essentially made itself a subcontractor to a successful offeror with regard to the performance of the animal aerosol challenge studies, tr. at 242-44, the RFP informed offerors that they did not need to budget for the performance of animal aerosol challenge studies. By contrast, as part of modification 0018, PharmAthene is to perform such animal aerosol challenge studies.

In our view PharmAthene's performance of animal aerosol challenge studies does not materially change the nature of the original rPA anthrax vaccine development contract. The RFP and original contract already required PharmAthene to design and construct animal aerosol challenge studies, receive and evaluate the resulting data, and submit the data to the FDA as part of product licensure. What modification 0018 changed was who--PharmAthene or HHS--was to perform such animal aerosol challenge studies. We see no basis to conclude that this change materially altered the type of work required under the original contract, or would have affected the original field of competition.  (Emergent BioSolutions Inc., B-402576, June 8, 2010)  (pdf)

OLG contends that ANHAM’s contract was limited to armored vehicles, and that adding unarmored vehicles under the modification exceeded the scope of the contract and therefore constituted an improper sole-source award. The Army asserts that the RFP in fact included unarmored vehicles, stating that in “military parlance, a non-tactical vehicle (NTV) connotes a commercially available vehicle that is not armored . . . . Soft-skinned, unarmored and non-tactical vehicles are adjectives used interchangeably to denote commercial vehicles without any form of armor.” AR at 2 n.1.

As a general rule, our Office will not consider protests against contract modifications, since they involve matters of contract administration and are beyond the scope of our bid protest function. 4 C.F.R. sect. 21.5(a) (2009); DOR Biodefense, Inc.; Emergent BioSolutions, B-296358.3, B-296358.4, Jan. 31, 2006, 2006 CPD para. 35 at 6: Engineering & Prof’l Servs., Inc., B-289331, Jan. 28, 2002, 2002 CPD para. 24 at 4. An exception to this general rule is where, as here, a protester alleges that a modification is beyond the scope of the original contract, since, absent a valid sole‑source justification, the work covered by the modification would be subject to the statutory requirement for competition. Engineering & Prof’l Servs., Inc., supra, at 4; Atlantic Coast Contracting, Inc., B-288969.2, June 21, 2002, 2002 CPD para. 104 at 4.

In determining whether a modification triggers the competition requirements in the Competition In Contracting Act of 1984, 10 U.S.C. sect. 2304(a)(1)(A), we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Engineering & Prof’l Servs, Inc., supra, at 4. Evidence of a material difference between the modification and the original contract is found by examining changes in the type of work, performance period, and costs between the contract as awarded and as modified. Atlantic Coast Contracting, Inc., supra, at 4. Here, the record is clear that the purpose and nature of the original contract were not changed by the modification.

The determinative consideration here is, simply, whether the requirement as described in the RFP (and resulting contract) included unarmored vehicles. While the RFP does not refer to “unarmored” vehicles, per se, in describing the requirement, we think it nevertheless was sufficiently clear that unarmored vehicles were encompassed by the RFP. In this regard, in describing the requirement, as noted, the RFP differentiated between “non-tactical vehicles” (NTV) and “up‑armored” vehicles.” It is undisputed in the record that an NTV may be either armored or unarmored. However, since the RFP here specifically called for both NTV and “up-armored” vehicles, we think it should have been clear to the protester that the term NTV was intended to refer to unarmored NTV. If the protester were correct that NTV referred only to NTV with armor, there would have been no logical reason for the RFP to refer to NTV at all, since up-armored vehicles reasonably would have included armored NTVs. Moreover, the RFP nowhere defined NTV as armored vehicles and, while OLG contends that the Army’s definition of NTV is “flat‑out wrong,” Protester Comments at 2, it has provided no definitive evidence refuting the agency’s assertion that the term NTV generally is used to refer to unarmored vehicles.

OLG maintains that the fact that the RFP and contract specified “five specific configurations of ‘hard’ (armored) vehicles,” and no unarmored vehicles, shows that the contract was not meant to include the ordering or delivery of unarmored vehicles. Protest at 3. However, the agency made clear from the outset that the VLPL [Vehicle Lease Price List] was not all-inclusive, and could be modified in the future. In this regard, as noted above, the RFP advised offerors that “The [VLPL] will be incorporated into the contract and may change in accordance with the available market. . . .” RFP at 77. Consistent with this language, amendment 5 to the RFP, issued January 9, 2009, included answers to questions, including the following:

Q4: I am curious if only one brand of transport would be acceptable?, such as the specified Ford Truck and Van units?

A4: The list of vehicles in the solicitation is representative of what we have been using and will continue to be diversified.

RFP amend. 5, at 3. In response to another question regarding the vehicles, the agency advised that the “list of vehicles will be amended, if required, after award of the contract. Please quote on the list as provided.” Id. In view of the cited RFP language, as clarified by the amendment, the listing of only armored vehicles in the RFP did not preclude the purchase of unarmored vehicles under the contract.

The protest is denied.  (Overseas Lease Group, Inc., B-402111, January 19, 2010)  (pdf)

Sallie Mae argues that the CSB contract, as originally competed and awarded, did not contemplate the servicing of non-defaulted FFELP loans, and that modification of the contract to encompass the servicing of the non-defaulted FFELP loans “put” to the government pursuant to the loan purchase program is accordingly beyond its original scope.

The Competition in Contracting Act (CICA) requires “full and open competition” in government procurements as obtained through the use of competitive procedures. 41 U.S.C. sect. 253a(a)(1)(A) (2000). Once a contract is awarded, however, our Office will generally not review modifications to that contract, because such matters are related to contract administration and are beyond the scope of our bid protest function. Bid Protest Regulations, 4 C.F.R. sect. 21.5(a) (2008); DOR Biodefense, Inc.; Emergent BioSolutions, B‑296358.3; B-298358.4, Jan. 31, 2006, 2006 CPD para. 35 at 6. An exception to this rule is where it is alleged that a contract modification is beyond the scope of the original contract because, absent a valid sole-source determination, the work covered by the modification would be subject to the statutory requirements for competition. Engineering & Prof’l Servs., Inc., B-289331, Jan. 28, 2002, 2002 CPD para. 24 at 3.

In determining whether a modification triggers the competition requirements in CICA, we look to whether there is a material difference between the modified contract and the contract that was originally awarded. MCI Telecomms. Corp., B‑276659.2, Sept. 29, 1997, 97-2 CPD para. 90 at 7. Evidence of a material difference between the modification and the original contract is found by examining any changes in the type of work, performance period, and costs between the contract as awarded and as modified. Atlantic Coast Contracting, Inc., B-288969.4, June 21, 2002, 2002 CPD para. 104 at 4. We also consider whether the solicitation for the original contract adequately advised offerors of the potential for the type of change found in the modification, and thus whether the modification would have changed the field of competition. DOR Biodefense, Inc.; Emergent BioSolutions, supra.

In support of its argument that the servicing of non-defaulted FFELP loans is beyond the scope of ACS’s CSB contract, the protester notes that the Statement of Objectives (SOO) in the CSB solicitation did not describe the servicing of non-defaulted FFELP loans and that the Student Credit Management Volumes chart provided as an appendix to the SOO did not furnish a figure for non-defaulted FFELP loans. Sallie Mae maintains that offerors could not possibly have contemplated that the CSB contract would include the servicing of the non-defaulted FFELP loans that are expected to be put to the government given that the legislation authorizing the loan purchase program was not enacted until May 2008. The protester also points out that the ECASLA authorizes the Secretary of Education to contract with eligible lenders for the servicing of the loans purchased from them and argues that there would have been no need for the statute to include such authorization if it were intended that the loans put to the government be serviced under ACS’s CSB contract.

In response, the agency maintains that the SOO in the CSB solicitation described the kinds of obligations that the contractor would be responsible for servicing quite broadly, providing that “[t]he CSB solution will have the capability to manage all types of student aid obligations,” and that “[t]hese obligations include Direct Loans, defaulted debts assigned to the Department of Education from [FFEL] or other lenders, rehabilitated loans, and any other type of Title IV student loan obligation.” SOO, sect. 1.2, as cited in AR at 3-4. (Emphasis added by agency.)

While we agree with the protester that at the time the CSB contract was awarded, agency officials and offerors could not have anticipated that the government would acquire the number of FFELP loans that lenders now have the option to put to it pursuant to the loan purchase program, we do not think that this leads to the conclusion that modification of the CSB contract to encompass the servicing of these loans would be beyond the contract’s scope. In our view, the SOO in the CSB solicitation clearly placed offerors on notice that the agency intended to award a contract for the management--i.e., the servicing, the consolidating, and the collecting--of all types of Title IV student loans, including the types of FFELP loans that the ECASLA has authorized the government to purchase from lenders, i.e., Stafford subsidized, Stafford unsubsidized, and PLUS loans. In this connection, we note that not only did the SOO state that the CSB solution was to be capable of managing “all types of student aid obligations,” including direct, defaulted FFELP, and rehabilitated loans and “any other type of Title IV student aid obligation,” but it also specifically identified the Stafford and PLUS loan programs as among the Title IV programs. Furthermore, the SOO specifically instructed that the CSB solution was to be flexible enough to handle new requirements generated by Congress and to respond to legislative mandates and policy changes. SOO at 33.

We also disagree with the protester’s argument that the inclusion in the ECASLA of language authorizing the Secretary of Education to contract with lenders for the servicing of loans that they sell to the government demonstrates that Congress contemplated that these loans would not be serviced under the CSB. We simply have no basis to conclude that this language may reasonably be interpreted as signaling that Congress intended to preclude the Secretary from contracting for the services from a source or sources other than the lenders.

Sallie Mae further argues that the modification of ACS’s CSB contract to encompass the servicing of the FFELP loans that the agency will acquire represents an out-of-scope change in the original contract because it will dramatically increase the scope of the loan portfolio that ACS is servicing for the government.

As previously noted, the agency reported to us that ACS expects to service approximately [deleted]. According to the agency, if all of the loans that lenders were vested with the option to put to the government in mid-September are in fact put, about [deleted] new borrowers would be added to the ACS portfolio, and the projected cost of servicing these additional borrowers in 2009 would be approximately [deleted]. AR at 3. These figures were substantially decreased by the agency decision to take corrective action, however. As previously noted, the agency expects to award a new contract for servicing of the FFEL loans by March or April of 2009, and anticipates that the contractor will be able to begin servicing the loans by August or September 2009. According to the chart summarizing the loans to be put to the government by borrower and month included in the agency report at Tab O, [deleted] loans that lenders have a vested option to put to the government during fiscal year 2009 are to be put in August, and [deleted] are to be put in September 2009. In other words, [deleted] of the loans will potentially be serviced by the new contractor. The addition of the remaining [deleted] that may be put to the government prior to August represents an increase of only approximately [deleted] to ACS’s existing portfolio of [deleted] loans. Such an increase clearly cannot be characterized as--to use the protester’s wording--dramatic. Moreover, even assuming that all [deleted] loans do end up being serviced under ACS’s CSB contract, this represents an increase of approximately [deleted] percent to ACS’s existing portfolio. Such an increase in workload volume does not, in and of itself, signal a modification beyond the scope of the original contract. See Caltech Serv. Corp., B‑240726.6, Jan. 22, 1992, 92-1 CPD para. 94 at 5 (30 percent increase in workload volume not beyond scope of original contract).  (Sallie Mae, Inc., B-400486, November 21, 2008) (pdf)

The protesters argue that the contract was improperly modified to require delivery of a bivalent serotype A/B vaccine, a product that was not listed among the optional RFP CLINs. The RFP identified optional CLINS for monovalent vaccine serotypes A through G, and a multivalent vaccine for serotypes A, B, D and F. RFP at B-1. The RFP advised offerors, however, that “[t]he government reserves the right to change the list above to add or delete products as need may arise.” RFP at B-1. Where the type of work under a contract as modified remains substantially unchanged, we do not view modifications of the technical requirements of performance to be outside the scope. Atlantic Coast, supra. Our decisions have acknowledged that additional latitude for changing a contract may exist where the contract is for research and development, noting that the scope of such contracts is often flexible because of unanticipated changes due to the lack of definitiveness of the government’s requirements. Everpure, Inc., B-226395, B-226395.4, Oct. 10, 1990, 90-2 CPD para. 275 at 4-5. Furthermore, a technical change to a contract should be viewed in the context of the contractor’s obligations “as a whole.” AT&T Communications, Inc., 1 F.3d at 1206. Here, the RFP made clear that decisions regarding the specific vaccines to be developed and produced would be made after award, and that the agency could add or delete vaccines based on the government’s needs. RFP at B-1. The RFP and contract, in our view, anticipated addition and deletion of optional botulinum vaccines, and thus the change from the RFP’s requirement under CLIN 0016 for a pentavalent vaccine to a bivalent vaccine that incorporates two of the serotypes under the pentavalent vaccine does not fundamentally alter the type of work required under the contract. See Engineering & Prof’l Servs., supra.  (DOR Biodefense, Inc.; Emergent BioSolutions, B-296358.3; B-296358.4, January 31, 2006) (pdf)

The agency characterizes the contract modification as a reasonable effort to ensure that the agency remains in compliance with EPA regulations for handling of the SBM. The agency contends that, due to UST's subcontractor's failure to properly recycle the SBM, UST's ability to comply with the contract's recycling component was called into question. Thus, the agency states that in the absence of a viable recycling option, it modified the contract to allow for disposal consistent with EPA regulations. The agency argues that the government's ultimate need for plastic media and the obligation to comply with EPA regulations regarding the handling of the SBM have not changed and, thus, the modification was proper. We disagree with the agency's view that the modification does not materially change the requirements of the contract or result in a fundamental change to the nature of the work. The original solicitation sought proposals that required offerors to both lease plastic media and recycle the resulting SBM in compliance with regulations, and offerors were thus required to propose technical solutions and pricing for both the lease and recycling components of the work. The fact that the agency still requires plastic media for its equipment needs and still requires removal of the SBM from its facilities does not afford the agency unlimited latitude to modify the way in which it contracts to meet those requirements. An agency may not modify a contract by changing or relaxing requirements where the resulting work is fundamentally different from the work anticipated by the original solicitation. Marvin J. Perry & Assoc. , supra , at 4-5; Avtron Mfg., Inc. , supra , at 4-5. Here, the RFP did not anticipate that the contractor could be relieved of the recycling requirement or that a disposal effort could be ordered in lieu of recycling. Furthermore, Poly-Pacific contends, and the agency does not dispute, that the costs of leasing plastic media with no recycling requirements is as much as 50 percent less than the costs of leasing plastic media with recycling requirements. There also appear to be at least 4 approved sources for providing type V plastic media, including Poly-Pacific and UST, without the recycling requirement. Comments, exh. 8, "Media Approved for Air Force Use." Evidence suggesting that proposals submitted on the basis of a modified contract's relaxed requirements could result in more competition and lower prices generally weighs in favor of finding that the contract modification was improper. Avtron Mfg., Inc. , supra , at 5. In sum, the agency's suspension of the recycling requirement relaxed the performance requirements and modified the contract beyond the scope of work anticipated by the underlying solicitation and unmodified contract. In our view, the modification resulted in a material and fundamental change to the nature of the work that changed the field of competition and that work, therefore, should have been competed on a full and open basis, unless the agency followed the steps required to conduct the procurement without full and open competition. (Poly-Pacific Technologies, Inc., B-296029, June 1, 2005) (pdf)

As noted above, the competitive award to Saltwater was based upon a 1-year contract extending through June 30, 2004 with a 1-year option to June 30, 2005. However, the award to NWO was for a 6-month contract period from July 1, 2004 toDecember 31, 2004, with an option to extend the contract 1 year, i.e. , to December31, 2005, which Commerce has exercised. Because the period of performance under NWO's contract extends beyond June 30, 2005, it is inconsistent with the basis for the competition and therefore improper. See Tennessee Valley Serv. Co. , B188771, Dec. 8, 1977, 77-2 CPD 442. That is, the extension of NWO's contract beyond June30, 2005 constitutes an improper sole-source, since it was not supported by a J&A. Since the contract with NWO now is in its option year, we recommend that Commerce meet its needs after June 30 competitively (through limited competition if full and open competition is not feasible) and terminate NWO's contract as of that date if NWO is not the successful offeror. We further recommend that the agency reimburse Saltwater for the costs of filing and pursuing its protests, including reasonable attorneys' fees. Saltwater's certified claim for costs, detailing the time spent and cost incurred, must be submitted to the agency within 60 days of receiving this decision. 4 C.F.R. 21.8(f)(1) (2004). (Saltwater Inc.--Reconsideration and Costs, B-294121.3; B-294121.4, February 8, 2005) (pdf)

CECOM's FedBizOps synopsis explained that the primary justification for restricting the acquisition to one source was that deliveries by a source other than MAI would be delayed unacceptably due to the time required for testing. Lyntronics failed to substantively address this concern in its April 2 proposal, instead merely asserting, without supporting explanation or information, that it could have a first article ready in 3-4 weeks, and the first shipment ready in an additional month. In light of CECOM's stated concern and projected 1-year timeframe, it was incumbent upon Lyntronics to provide specific information detailing its alternative FAT schedule; absent such information, CECOM had no basis to determine that Lyntronics would be able to perform the required tests and deliver batteries within CECOM's timeframe. See Litton Computer Servs., supra.  We conclude that CECOM reasonably determined that only MAI could satisfy its requirements for the BA-3547/U battery within the time required, and that the sole‑source modification of that firm's contract was unobjectionable. (Lyntronics Inc., B-292204, July 22, 2003)  (pdf)

Accordingly, the critical question is whether the change in the location of the site for the construction of the awarded building space is so material to the overall effort required under the SFO as to be outside of the scope of the lease awarded here. In answering this question, we look to the purpose and nature of the lease, which here required much more than an amount of space located at a particular address.  As noted above, the lease here incorporates numerous work performance requirements ranging from the provision of specific, architecturally defined areas of building space, highly specialized for the needs of a medical treatment facility, to the provision of specified management, custodial, and security services. In our view, the level of detail provided describing the required configuration and provision of the building space reflects the relative importance to the agency of obtaining space meeting specific design and functional requirements. In contrast, the SFO’s property location requirements are only general in nature and scope--wide location boundaries were provided in the SFO and only general transportation accessibility was required, reasonably indicating that specific location within the cited area simply was not a critical factor to the agency, as long as the property was within the delineated area and reasonably accessible. In other words, we think it is apparent that the location of the specific site offered--as long as it was within the identified geographic boundaries and otherwise met all SFO requirements--was not of particular importance under the SFO.  (HG Properties A, LP, B-290416; B-2904162, July 25, 2002  (pdf))

In determining whether a modification triggers the competition requirements in the Competition in Contracting Act of 1984, 10 U.S.C. § 2304(a)(1)(A) (2000), we look to whether there is a material difference between the modified contract and the contract that was originally awarded.  Evidence of a material difference between the modification and the original contract is found by examining any changes in the type of work, performance period and costs between the contract as awarded and as modified.  The question for our review is whether the original nature and purpose of the contract is so substantially changed by the modification that the original and modified contract would be essentially different and the field of competition materially changed.  Engineering & Professional Servs., Inc., B-289331, Jan. 28, 2002, 2002 CPD ¶ 24 at 4.  Here, the Army's modification did not make any changes to the original nature and purpose of the contract.  First, the front-loading refuse collection service is but one of multiple refuse collection services to be performed under the contract, the bulk of which were to be performed using the contractor's trucks.  Contract § C.4.  Moreover, the contract specifically included as one of the multiple line items the requirement that the contractor would perform the very front-loading refuse collection services that were the subject of this modification, albeit with government furnished vehicles.  As noted, the decision to modify the requirement to have the contractor perform this task with its own vehicles and containers--as the contractor does on other contract line items--rather than with government-furnished equipment--as originally required by the contract--came about only because of the condition of the government's equipment (and at Atlantic's suggestion).  Since the essence of the requirement was for the contractor to provide front-loading refuse collection, the Army's modification, merely shifting the responsibility for the vehicles and the containers needed to carryout the service to the contractor, did not substantially change the contract, nor make it essentially different.  (Atlantic Coast Contracting, Inc, B-288969.4, June 21, 2002 )

In determining whether a modification triggers the competition requirements in the Competition in Contracting Act of 1984, 10 U.S.C. sect. 2304(a)(1)(A) (Supp. IV 1998), we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Neil R. Gross & Co., Inc., supra, at 2-3; see AT&T Communications, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1205 (Fed. Cir. 1993). Evidence of a material difference between the modification and the original contract is found by examining any changes in the type of work, performance period, and costs between the contract as awarded and as modified. Access Research Corp., B-281807, Apr. 5, 1999, 99-1 CPD para. 64 at 3-4; MCI Telecomms. Corp., B-276659.2, Sept. 29, 1997, 97-2 CPD para. 90 at 7-8. The question for our review is whether the original nature or purpose of the contract is so substantially changed by the modification that the original and modified contract would be essentially different, and the field of competition materially changed. Everpure, Inc., B-226395.4, Oct. 10, 1990, 90-2 CPD para. 275 at 4. The RFP thus clearly described the CHS-2 program as dynamic, and contemplated that the contractor would incorporate new technologies as they became available.  Where, as here, a contractor provides more technologically advanced equipment pursuant to a modification within the scope of the basic contract--i.e., the fundamental nature and purpose of the underlying contract remains unchanged--the modification is not improper. See Hewlett Packard Co., B-245293, Dec. 23, 1991, 91-2 CPD para. 576 at 3-4.  (Engineering & Professional Services, Inc., B-289331, January 28, 2002)

ARC's argument here overlooks the fact that with each modification, the terms of MERC's basic contract were changed to accommodate the agency's overall need, as reflected in modification No. 06, to digitize the entire TO warehouse. Accordingly, a comparison of modification No. 16 to delivery order No. 0005, without regard to the impact of the intervening modifications--especially modification No. 06, which contemplated the digitization of the entire TO warehouse--on the terms of MERC's basic contract, would not be appropriate, since such a comparison would disregard the new contract requirements. 

The protester has not established that the fundamental nature and purpose of MERC's contract, as modified, were materially changed by modification No. 16 so as to require a separate competition.  (Access Research Corporation, B-281807, April 5, 1999)

In the present case, Chapman does not dispute that the nature of the work in the proposed modifications would require incumbent contractors to provide the same M&M services in Ohio or Michigan as they currently provide under their existing contracts in other regions. See AR 20-21. The only changes at issue here are the geographic expansion of service and the possibility of new pricing. Deft.’s Motion at 12-13. These two changes clearly were contemplated in the M&M contracts. Clause H.2, found in every M&M contract, including the four contracts selected for modification, expressly allows HUD to “unilaterally increase the geographic service areas of this contract, by contract modification.” AR 6. Clause H.2 also provides that if the modification causes a change in the price, the contractor may assert its right to an equitable adjustment. Id. All of the contractors, including Chapman and the contractors selected for the modification, reasonably should have anticipated the potential for precisely the kind of modification that HUD seeks to make.

In an attempt to avoid HUD’s express contractual authority to make the proposed modifications, Chapman argues that actions which would otherwise constitute a modification nevertheless become solicitations for new contracts when the Government shops around for the best incumbent contractor. Pltf.’s Brief at 6. However, Chapman’s argument misses the mark. When applying the cardinal change doctrine, the Court focuses on the nature of the work to be done and whether the modification is one which existing contractors reasonably should have anticipated. See Wiltel, 1 F.3d at 1205, 1207. If the nature of the work under the modified contracts is not materially different, and the contractors were adequately advised of the potential for the change that in fact occurred, the modification is within the scope of the original contract. The Court will not impose additional restrictions on how an agency chooses to modify existing contracts. HUD believed it would be advantageous to research potential pricing before issuing modifications, rather than receiving requests for equitable adjustments after the fact. Deft.’s Motion at 5, n.5. It is not the business of this Court to question the wisdom of that approach. Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332-33 (Fed. Cir. 2001)(“[C]ontracting officers are entitled to exercise discretion upon a broad range of issues confronting them in the procurement process”); Bender Shipbuilding & Repair Co. v. United States, 297 F.3d 1358, 1362 (Fed. Cir. 2002) (deferring to “informed, complicated business judgment” of contracting officer).

In any case, HUD’s selection of the limited pool of eligible firms was hardly random. As is noted in the record, HUD compiled a list of all incumbent contractors and narrowed the field to four firms according to past performance ratings and capacity. AR 14-19. It is entirely sensible that, having a ready list of incumbent contractors, HUD would seek to know which of them could accommodate the additional work at the lowest possible cost to the Government. In this way, HUD assured itself of securing not only a low price, but also a contractor familiar with the work to be done. If HUD decided, as it apparently has, that it is in some way preferable to modify an existing contract than to create a new one, the Court must show deference to that determination as long as the modification remains within the scope of the original contract. See, e.g., R & W Flammann GmbH v. United States, 339 F.3d1320, 1322 (Fed. Cir. 2003) (“[w]hen an officer’s judgment is reasonable, a court may not substitute its judgment for that of the agency.”). As discussed above, the modifications were within the scope of the original contracts.

Finally, Chapman argues that it should have been included among the list of potential contractors, and if it had been included and fairly evaluated, it would have received the work covered by the modifications. Unfortunately for Chapman, HUD allowed its contract to expire on December 31, 2007. Consequently, at the time HUD developed its list of eligible firms and requested price proposals from the four selected contractors, Chapman was not an incumbent contractor with a contract capable of being modified. AR 5.  (Chapman Law Firm Co., v. U. S., No. 08-39C, April 2, 2008) (pdf)

The court finds that the delay to the start date and the alleged price modifications do not amount to a “cardinal change” or other violation of CICA. The plaintiffs’ allegations are most similar to those brought by the plaintiffs in CESC Plaza, in which the protestors argued that “the sum of the changes materially alter[ed] the contract, not that the specific changes themselves [were] out of scope modifications.” CESC Plaza, 52 Fed. Cl. at 94. In CESC Plaza, the court held that the plaintiffs would be required to demonstrate that the sum of the modifications were “materially outside the scope of the [solicitation] and that these modifications were not foreseeable to the bidders.” Id. The court adopts the test articulated in CESC Plaza and holds that the plaintiffs in this case cannot prevail on their CICA violation or cardinal change claims because they cannot demonstrate that the delays in commencement of the contracts or the possible price increases are materially outside the scope of the contracts and were not foreseeable to the offerors. First, as the government notes, the solicitation did not specify a definite start date for commencement of performance or specific dates between which the base performance period had to be completed. Instead, the solicitation stated that “the base ordering period begins with the issuance of a contract modification for commencement of services through 24 consecutive months” and that three additional one-year option periods could be exercised by the government. AR 5. Thus, the solicitation contemplated only that the contract would start at some time after the award date. In such circumstances, the plaintiffs’ reliance on the GAO decisions in Defense Sys. Group and Ingersoll-Rand, which involved the requirement for performance by specific dates, is misplaced. In addition, where as here, the solicitation did not confine the base period of performance to a set time period expiring on April 1, 2007, the court will not read set dates into the contracts. Where flexibility has been incorporated into the solicitation, the court must respect that determination. See AT&T, 1 F.3d at 1205. Second, the proposed price modifications are not enough alone or in combination with the commencement date modifications to establish a cardinal change or violation of CICA. The solicitation contemplated price changes and authorized price negotiations to deal with changes in ticket volume requirements and technology. Indeed, given the nature of the travel services required under the contract, price changes were viewed as inevitable. The government has limited control over the number of recruits or the location of recruits needing travel services. Thus, authorization for price changes in what was otherwise a fixed-price contract was written into the solicitation to meet the Army’s needs. Price changes were therefore both authorized and foreseeable. Moreover, plaintiffs’ contentions regarding the size of any price change are unsubstantiated, as no major price modifications have been issued. The plaintiffs have failed to establish that the delay will, in fact, result in any significant cost increase to the government.  (CWT/Alexander Travel, LTD, and CWT/EL Sol Travel, Inc., v. U. S., No. 07-612C, Filed October 2, 2007) (pdf)

Tested by the standards set forth in the above-cited cases, the court finds that the addition to, and deletion of work from, the Navales contract materially changed the original competed contract. The changes to the Navales contract were not changes of the type that were specifically authorized or even foreseen in the original contract. Rather, the modifications authorized substantial changes, which the contracting officer identified as “considerable” with costs that were potentially “extremely excessive.” AR at 4871. The Navales contract contemplated “minimal additions and deletions of service” which would be accomplished through application of the Add/Delete of Service Cost Sheet, set forth in Section 1.6 of the solicitation. The modifications to the Navales contract were not, however, made through this provision. Instead, the contracting officer concluded that the Air Force needed to remove the Add/Delete of Service Cost Sheet from the Navales contract to make the changes the Air Force wanted. Specifically, the contracting officer explained:

It was determined in the best interest of parties, the government and contractor, for this pricing structure [the Add/Delete of Service Cost Sheet] to be deleted by modification and all future modifications to be accomplished through negotiation. . . . Had the price sheet been used it would have resulted in extremely excessive costs bordering changes outside the scope of the contract. AR at 4871 (emphasis added).

In other words, the Air Force deleted the Add/Delete of Service Cost Sheet clause in the Navales contract, which authorized only minor changes, in order to make future major modifications. The Air Force feared that if it did not do this, then the excessive costs would “border[ on] changes outside the scope of the contract.” AR at 4871 (emphasis added). The Air Force’s decision to modify the Add/Delete of Service Cost Sheet of the original contract, in order to avoid changing the “scope of the contract” was not sufficient to overcome CICA’s mandates. The government cannot circumvent CICA by modifying a contract to allow for modifications that were not originally within the scope of the contract. Northrop Grumman, 50 Fed. Cl. at 464. This would defeat the language and purpose of CICA. Accordingly, where, as here, the government modified the contract to allow for changes not contemplated in the original contract, the government cardinally changed the contract; by doing so without resoliciting the contract, and by instead eliminating the limitations on changes specifically set forth in the original contract, the government violated CICA. Because the government’s procurement was not in accordance with law, the court is authorized to overturn this illegal action. See 5 U.S.C. § 706(2)(A); 28 U.S.C. § 1491(b)(4).  (Cardinal Maintenance Service, Inc., v. U. S. and Navales Enterprises, Inc., 04-94C, November 22, 2004) (pdf)

In determining whether a modification falls within CICA's competition requirement, this court examines whether the contract as modified materially departs from the scope of the original procurement. . . . The analysis thus focuses on the scope of the entire original procurement in comparison to the scope of the contract as modified. Thus a broad original competition may validate a broader range of later modifications without further bid procedures.  Id. at 1205 (citations omitted).⁽¹⁵⁾ The inquiry with respect to scope is an objective one viewed from the perspective of potential bidders for the original procurement. See id.; CCL, Inc. v. United States, 39 Fed. Cl. at 791.⁽¹⁶⁾  (Phoenix Air Group, Inc. v. U.S., No. 98-602C, February 18, 2000)

As we held in CCL v. United States, 39 Fed. Cl. 780, 791 (1997), contract modifications cannot materially depart from the scope of the original procurement, otherwise the modification prevents potential bidders from participating in what should be a new procurement. In this respect it is relevant to inquire into whether potential bidders at the time of the original contract would have been on notice that the later modification was within the reasonable scope of the solicited material or services.  (VMC Behavioral Healthcare Services, Division of Vasquez Group, Inc. v. U.S., No. 01-473C, September 18, 2001)  (.pdf)