We agree with the agency that the circumstances presented met the requirements for an exception to full and open competition due to an unusual and compelling urgency, when, at the end of DAV Prime JV's contract, it did not have a follow-on contract in place for services during the summer months--when the portable chemical toilet services would be most used. However, the record here evidences that the urgency resulted from the Army's failure to adequately plan for this procurement in advance and that DAV Prime JV was not the only firm interested and capable of performing these services.

The Army knew in August 2008 of the OHA's decision that DAV Prime JV was not an SDVOSBC. Both the SBA and our Office's decision in November 2008 suggested that the Army should consider whether to exercise an option, since DAV Prime JV had been found not to be an eligible SDVOSBC. In early March 2009, approximately 5 months later, the agency finally determined that it would not exercise the first option year because DAV Prime JV was not pursuing efforts to meet the eligibility requirements for an SDVOSBC joint venture.

The agency points to the delay in issuing a new solicitation--due to a rather broad NAICS Code for septic tank and related services--as the reason for the delay in procuring follow-on services and the cause of the urgency. However, as the market survey took longer than expected, it is apparent that the agency should reasonably have been aware that the follow-on contract would not be in place by May 31, the date DAV Prime JV's contract expired, and that the agency was required to plan how it would obtain these services until the follow-on contract would be in place.

If there was not time for full and open competition for the interim services until the follow-on contract was executed, in accordance with FAR Subpart 6.3, the agency should have conducted a limited competition among qualified sources who the agency found would be interested in performing the services. While the final results of the market survey, which ultimately led to the agency's decision to issue the follow-on procurement as a small business set-aside, took longer than the Army anticipated, the survey identified potential qualified sources that would be interested in providing these services and could have been included in a limited competition. Further, because the Fort Drum requirement for portable chemical restroom services was "a recurring requirement that has been procured by contract for at least the last 10 years," see MCS's Sept. 19, 2008 Protest, Agency Acquisition Strategy, at 1, the Army was presumably already familiar with the potential sources who could provide these interim services. Indeed, MCS, a qualified firm, had already indicated its interest and capability of providing these services. Thus, the record evidences that DAV Prime JV was not the only firm capable of performing these services.

Based on this record, the agency's has not provided a reasonable basis for the sole‑source extension. It is apparent that the Army did not properly plan in advance for its requirement to extend this contract; we do not think that the agency could sit idly by in the face of the circumstances here and not take action to obtain more competition for its requirements. VSE Corp.; Johnson Controls World Servs., Inc., B‑290452.3, et al., May 23, 2005, 2005 CPD para. 103 at 9.

MCS's protest is sustained.  (Major Contracting Services, Inc., B-401472, September 14, 2009)  (pdf)

Under CICA, 41 U.S.C. sect. 253(a)(1)(A), contracting officers have a duty to promote and provide for competition and to provide the most advantageous contract for the government. In their role of promoting and providing for competition, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a noncompetitive position where they could reasonably take steps to enhance competition. VSE Corp., Johnson Controls World Servs., Inc., B-290452.3 et al., May 23, 2005, 2005 CPD para. 103 at 8; HEROS, Inc., B-292043, June 9, 2003, 2003 CPD para. 111 at 7; National Aerospace Group, Inc., B-282843, Aug. 30, 1999, 99-2 CPD para. 43 at 8. See also S. Rep. No. 98-50, at 18 (1984), reprinted in 1984 U.S.C.C.A.N. 2174, 2191 (stating that CICA requires agencies to “make an affirmative effort to obtain effective competition”). CICA further provides that under no circumstance may noncompetitive procedures be used due to a lack of advance planning by contracting officials. 41 U.S.C. sect. 253(f)(5)(A); Signals & Sys., Inc., B-288107, Sept. 21, 2001, 2001 CPD para. 168 at 9. Although the requirement for advance planning is not a requirement that such planning be successful or error-free, see Abbott Prods., Inc., B-231131, Aug. 8, 1988, 88-2 CPD para. 119, at 8, the advance planning must be reasonable. Signals & Sys., Inc., supra, at 13. Here, we conclude that the agency has failed to comply with the CICA mandate for reasonable advance planning. With regard to the feasibility of alternatives to a sole-source award, the agency principally focuses on the difficulties associated with either acquiring a new software system, or having another firm perform the required services without license rights to the RGII software. The agency also asserts that its advance planning efforts have been reasonable in that it has taken steps to avoid expansion of its reliance on RGII. In this regard, the agency notes, for example, that it has been considering using a program developed by another agency office, the Bureau of European Affairs, to meet its needs here, instead of contracting with RGII for the development of additional proprietary software. Agency’s Response to GAO Questions, supra, at 4. While, as discussed above, it is reasonable to conclude that, given the restrictive nature of the agency’s current licensing agreement with RGII, only RGII can now meet its needs, the agency’s arguments simply do not address the issue of whether the agency’s acquisition planning--in the face of those restrictions--was reasonable, given the requirement that the agency make an affirmative effort to obtain competition. The agency has produced no record of any steps that it has taken to end its reliance on the services of the incumbent to maintain the existing software systems; in fact, this latest proposed sole-source award has a potential term of 5 years. It is possible, for example, that the agency could purchase additional rights to the proprietary software in order to promote competition, see Environmental Tectonics Corp., B‑248611, Sept. 8, 1992, 92-2 CPD para. 160 at 5, rights that the government relinquished nearly 6 years ago. In this regard, the protester asserts that in 2004 RGII offered the agency a source code license to multiple copies of Monument for less than $1.2 million, and that at the time RGII stated that the value of Monument was less than $1 million. Protest, Tab E, Letter from Protester to Agency, Aug. 7, 2006, at 2. Further, the agency acknowledges that the “value of the software may in fact now be quite limited.” Agency’s Response to GAO Questions, supra, at 3. Under the circumstances here--where the agency ceded substantial rights in the software created by RGII under the development contract, and where there is no indication that the agency has explored the possibility of acquiring additional rights from RGII--we think that, to satisfy its obligation to engage in reasonable advance planning and to promote competition, the agency was required to consider whether the costs associated with a purchase of additional license rights, or some other alternative, outweigh the anticipated benefits of competition. See HEROS, Inc., supra, at 7, 10. (eFedBudget Corporation, B-298627, November 15, 2006) (pdf)

While we do not question the agency's need for a transition period (even though the record does not clearly establish that this period is required to take as much as 4 months), we agree with VSE that the agency's predicament of not being able to complete a transition period in the event of an award to a firm other than EG&G was caused by the agency's failure to consider meeting its requirement for these bridge services with any firm other than EG&G. In this regard, the record evidences that the agency was aware from the start of 2004, and increasingly certain as the year passed, that the RFP might well be canceled; that EG&G's latest contract extension would expire on April 1, 2005; that a follow-on contract would require a transition period; and that there were other capable contractors, such as VSE and Johnson Controls, which had competed during the agency's protracted competitive procurement, that might be interested in the agency's interim requirements. Yet the agency did not take any steps to avoid having to negotiate exclusively with EG&G to satisfy its requirements. Under the Competition in Contracting Act of 1984 (CICA), 41 U.S.C. 253(a)(1)(A), contracting officers have a duty to promote and provide for competition and to provide the most advantageous contract for the government. In doing so, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a noncompetitive position where they could reasonably take steps to enhance competition. See Signal & Sys., Inc. , B-288107, Sept. 21, 2001, 2001 CPD 168 at 14-15. Thus, 41 U.S.C. 253(f)(5)(A) provides that under no circumstance may noncompetitive procedures be used due to a lack of advanced planning by contracting officials. Signal & Sys., Inc. , supra , at 9. Although the requirement for advanced planning is not a requirement that such planning be successful or error-free, see Abbott Products, Inc. , B-231131, Aug. 8, 1988, 88-2 CPD 119, the advanced planning must be reasonable. Signal & Sys., Inc. , supra , at 13. Also, even where the agency has a basis to conduct a noncompetitive procurement, it is still required to request offers from as many potential sources as is practicable under the circumstances. 41 U.S.C. 253(e); Signal & Sys., Inc. , supra , at 8-9. As described above, even though the agency was increasingly aware many months in advance that the on-going competitive solicitation for these services might well be cancelled, the only alternative considered by the agency was the sole-source extension of EG&G's contract. If the agency had earlier planned to compete for these interim services, as required, a transition period between EG&G's existing contract and the bridge contract could have been accommodated, given that there were more than 4 months between when the RFP was actually cancelled and when EG&G's contract expired. In this regard, the record evidences that the agency could easily have decided earlier to cancel the RFP, given that virtually all of the reasons for the cancellation were apparent months earlier. Thus, we find that the circumstance of not having sufficient time to complete a transition period was created by the CBP's failure to engage in reasonable advanced procurement planning. See Techno-Sciences, Inc. , B-257686, B-257686.2, Oct. 31, 1994, 94-2 CPD 164 at 9, 11 (agency needs to account for reasonable phase-in periods to achieve adequate advance procurement planning). The situation here is exacerbated by the fact that EG&G's incumbent contract expired in May 2001 and has been extended on a sole-source basis for the past 4 years. Moreover, while the base period for the protested sole source contract extension is only for 6 months, the record evidences that the agency anticipates that the full 18 months will be needed before the new contractor selected under the anticipated competitive procurement can start contract performance. See Draft J&A. In sum, we do not think that the agency could sit idly by in the face of the circumstances present here and not consider obtaining more competition for its sole-source requirements. (VSE Corporation; Johnson Controls World Services, Inc., B-290452.3; B-290452.4; B-290452.5, May 23, 2005) (pdf)

In enacting CICA, Congress explained: “Effective competition is predicated on advance procurement planning and an understanding of the marketplace.” S. Rep. No. 50, 98th Cong., 2d Sess. 18 (1984), reprinted in 1984 U.S.C.C.A.N. 2191. The Senate Report also quoted with approval the following testimony regarding the need for advance planning:

Opportunities for obtaining or improving competition have often been lost because of untimely, faulty, or the total lack of advance procurement planning. Noncompetitive procurement or inadequate competition also has resulted many times from the failure to develop specifications . . . . By requiring effective competition, Congress will serve notice on the agencies that they will need to do more than the minimum to comply with the statute.  S. Rep. No. 50, 98th Cong., 2d Sess. 19 (1984), reprinted in 1984 U.S.C.C.A.N. 2192.  Finally, in interpreting this statutory requirement, our Office has noted that contracting officials have a duty to promote and provide for competition and to obtain the most advantageous contract for the government. Precision Logistics, Inc., B-271429, July 18, 1996, 96-2 CPD ¶ 24 at 5; National Aerospace Group, Inc., B‑282843, Aug. 30, 1999, 99-2 CPD ¶ 43. In other words, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a sole-source situation when they could reasonably take steps to enhance competition.  Here, the Army's actions over the past several years fail to comply with CICA's statutory mandate for reasonable advance planning.

(HEROS, Inc., B-292043, June 9, 2003)  (pdf)