1. Measurably Substantial Benefits

NEI argues that the Coast Guard’s bundling analysis is flawed in several respects. The protester first argues that the Coast Guard’s reliance on the Navy’s bundling justification is not reasonable because the Coast Guard did not adequately explain why it can expect the same efficiencies for the WHEC cutters the Navy claimed for its destroyers. The protester further argues that the Coast Guard unreasonably assumes that it will experience the same level of savings as the Navy, and thus the assumption of a similar 5.29 percent savings is not reasonable. Our review of the Coast Guard analysis shows that the agency does not directly compare the details of its maintenance and repair operations to the Navy’s operations. Instead, the analysis focuses on the benefits of adopting the phased maintenance model to address inefficiencies in the current practice of making single-contract awards. See AR, Tab 27, Bundling Analysis, at 3-4. Based on our review, we think the Coast Guard’s approach of identifying similar problems and adopting similar solutions to those identified and adopted by the Navy, was reasonable. Furthermore, the Coast Guard’s analysis did not assume, as the protester argues, that the same precise savings will result. Rather, the analysis relied on the combination of the projected cost savings as well as other benefits, discussed below, to conclude that the overall benefit to the government would exceed 10 percent of the value of the contract. See id. at 4. On this record, we believe that the Coast Guard’s reliance on the Navy data was reasonable.

Next, NEI argues that the Coast Guard’s use of the Navy’s data resulted in a double counting of “savings” by relying on both the 5.29 percent cost savings and the 18 percent reduction in the length of maintenance availabilities. The protester correctly notes that the Navy’s justification relied on the 18 percent reduction in the length of maintenance availabilities as a contributing factor to the overall 5.29 percent cost savings, and argues that it would not be appropriate to conclude that a transition by the Coast Guard to the phased maintenance model would result in both a 5.29 percent cost savings plus an additional 18 percent cost savings. The Coast Guard’s justification did not, however, rely on the Navy’s data in this way. Instead, as discussed below, while the 18 percent reduction in maintenance time was a component of the 5.29 percent cost savings for the Navy, it was also separately relied upon by the Coast Guard as a basis to conclude that the WHEC cutters would be available for more operational time. The Navy’s bundling justification for the destroyers did not attempt to quantify the benefit to the government from having additional operational time for the ships as a result of the decreased length of maintenance availabilities. Instead, the 18 percent savings in the Navy’s analysis represented costs saved by avoiding 2 weeks of maintenance costs; these savings were thus a component of the overall 5.29 percent savings anticipated by the Navy. See AR, Tab 22, Navy Small Business Justification, at 17.  The Coast Guard, however, chose to use the Navy’s data to quantify an additional benefit to the government from the increased operational time for the WHEC cutters. The Coast Guard’s analysis notes that although the Navy was “reluctant to quantify the benefits of returning a ship to operational status sooner,” the agency believed that “the benefits to [the] Coast Guard of increasing the available operational time for WHEC’s can be quantified.” CO Statement para. 46. In this regard, the intention of the new acquisition strategy was based on the “central goal of reducing the period of time for performance of maintenance tasks,” and thereby increasing “the number of days that the WHEC’s are available to perform national defense and homeland security missions.” Id. Thus, this benefit, although quantified, was not a calculation of “cost savings.” Put differently, the Coast Guard’s justification relied on two different benefits to the government: decreased maintenance and repair costs (quantified as a savings of 5.29 percent), and increased time that the WHEC cutters will be performing their duties (18 percent more time).  The Coast Guard’s identification of two benefits is consistent with the FAR, which states that measurably substantial benefits “may include, individually or in any combination or aggregate, cost savings or price reduction, quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle times, better terms and conditions, and any other benefits.” FAR sect. 7.107(b). NEI’s argument thus incorrectly characterizes the Coast Guard’s identification of benefits as a double-counting of “anticipated savings.” Protester’s Comments on AR at 22. The two benefits identified by the Coast Guard are, however, distinct, and each is an appropriate measure under the FAR. We find no basis on this record to challenge the reasonableness of the Coast Guard’s determination.

Finally, NEI argues that the agency inappropriately relied on the “reimbursable” rate of $178,488 per day to quantify the benefit to the government from increased operational time of the WHEC cutters. COMDIST 7310.1I states that the components of the reimbursable rate “should not be used to calculate reimbursement for [the Federal Emergency Management Agency] and foreseeable costs related to contracting actions,” because the rate contains “both fixed and variable components.” AR, Tab 27, COMDIST 7310.1I, at 2. Instead, the COMDIST states that “[r]ates for these purposes shall be promulgated separately.” Id. As noted in the facts above, the agency did separately promulgate rates for “variable and foreseeable costs” for the cutters of $39,384 per day. See AR, Tab 27, Coast Guard Variable Rate FY 06 Cost Tables, encl. 1.  The Coast Guard’s bundling analysis calculated the benefit to the government of increased operational time for the cutters based on the full reimbursable rate of $178,488 per day. AR, Tab 27, Bundling Analysis at 4. However, the analysis also noted that using the lower variable rate still results in measurably substantial benefits to the government that justifies bundling. AR, Tab 27, Bundling Analysis, at 3. Thus, the analysis concludes, that even the rate of $39,384 per day yields a benefit to the government of $2,363,040--approximately 20 percent of the estimated contract value. Although the protester only challenges the agency’s reliance on the $178,488 per day rate, rather than the $39,384 rate, we think that neither of these rates on their own is a reasonable measure of the benefit to the government for 1 day of use of a WHEC cutter. In this regard, the variable rate represents costs that the government will avoid during a maintenance availability, such as fuel. See CO Statement para. 48; AR, Tab 27, Coast Guard Variable Rate FY 06 Cost Tables, encl. 1. Thus, the variable rate of $39,384 per day represents costs avoided, rather than the increased benefit to the government from an additional day of operation for a cutter. During the course of this protest, the CO conceded a better calculation of the benefit to the government is achieved by subtracting the variable rate from the full reimbursable rate. CO Statement para. 48. Thus, in the CO’s view, the benefit to the government of an increased day of use for a cutter is $178,488 per day, less the variable costs of $39,384. Id. We think that this approach appears reasonable because it captures the quantifiable benefit to the government from the operation of ship, less the costs of operation. Further, this approach is consistent with COMDIST 7310.1I, which states that the reimbursable rate should not be used to calculate foreseeable costs relating to contracting actions because of its inclusion of both fixed and variable costs. AR, Tab 27, COMDIST 7310.1I, at 2. This calculation of a benefit to the government falls between the two calculations cited in the Coast Guard’s bundling analysis, but in any event well exceeds 10 percent of the value of the contract. Id.

In sum, we conclude that even if the consolidation of the dry dock and dockside requirements constituted bundling under the Small Business Act, the Coast Guard reasonably justified any such bundling by identifying measurably substantial benefits to the government from the consolidation. Even allowing for some margin of error in adopting the Navy’s estimates, the record supports the Coast Guard’s determination that the consolidation of the requirements will result in measurably substantial benefits to the government equal to at least 10 percent of the anticipated contract value.

B. Bundling in Violation of CICA

NEI argues that even if the Coast Guard’s approach of consolidating the maintenance and repair services does not violate the Small Business Act’s prohibitions on bundling, the solicitation violates CICA’s prohibition on improperly consolidating requirements. CICA generally requires that solicitations permit full and open competition and contain restrictive provisions and conditions only to the extent “necessary to satisfy the needs of the executive agency.” 41 U.S.C. sect. 253a(a)(2)(B). Since bundled or consolidated procurements may combine separate, multiple requirements into one contract, they have the potential for restricting competition by excluding firms that can furnish only a portion of the requirement. Aalco Forwarding, Inc., et al., B-277241.12, B-277241.13, Dec. 29, 1997, 97-2 CPD para. 175 at 6. In interpreting CICA, we have looked to see whether an agency has a reasonable basis for its contention that bundling is required, and we have sustained protests only where no reasonable basis is demonstrated. Phoenix Scientific Corp., B-286817, Feb. 22, 2001, 2001 CPD para. 24 at 10.

Here, the agency concluded that the combination of the dockside and shipside maintenance and repair work will result in measurably substantial benefits to the government. As discussed above, we conclude that these benefits, including maintenance and repair cost savings and increased operational time for the WHEC cutters based on reduced duration of maintenance availabilities, justified bundling under the Small Business Act. In our view, these benefits also provide a reasonable basis to justify the consolidation of the two requirements for purposes of CICA. See Teximara, Inc., B-293221.2, July 9, 2004, 2004 CPD para. 151 at 8-9.  (Nautical Engineering, Inc., B-309955, November 7, 2007) (pdf)

The protesters first contend that this requirement violates the bundling restrictions under the Small Business Act, and that the agency failed to conduct appropriate market research to show that the bundling was necessary; failed to reasonably justify the bundling of requirements; and failed to timely notify the Small Business Administration (SBA) of its decision to bundle the requirements and provide a statement regarding its justification for bundling. In response, the agency explains that the TMSS routinely has been purchased as a packaged system under the earlier DLA contract. The agency further explains that the TMSS components cannot be purchased separately in a cost effective manner but rather, must be procured as an integrated package. The agency states that its market research consisted of reviewing vendors’ literature, pamphlets, specifications, and face-to-face briefings/meetings, as well as observing and discussing vendors’ evolving capabilities and products at exhibitions, symposiums, and trade shows. The agency also argues that any challenge to bundling in this solicitation is untimely. The Small Business Reauthorization Act of 1997, Pub. L. No. 105-135 (1997), provided that “to the maximum extent practicable,” each agency shall “avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors.” 15 U.S.C. sect. 6319 (j)(3) (2000). Bundling, for purposes of the Act means “consolidating 2 or more requirements for goods or services previously provided or performed under separate smaller contracts that is likely to be unsuitable for award to a small-business concern.” 15 U.S.C. sect. 632(o)(2); see FAR sect. 2.101. “Separate smaller contract . . . means a contract that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns.” 15 U.S.C. sect. 632(o)(3); see FAR sect. 2.101. Our review of the record here shows that the SICPS/TMSS is currently being purchased as a packaged system under a DLA contract with DHS, and that the system has not been provided under separate smaller contracts. Further, the record shows that the SBA and the Small and Disadvantaged Business Utilization Specialist agreed that this requirement was not suitable for award to 1 or more small business concerns. Accordingly there is no “consolidation” of two or more requirements in this procurement as contemplated by the Small Business Act and the Small Business Act requirements pertaining to bundling are therefore not applicable here.

The protesters also argue that this solicitation represents an improperly bundled or total package procurement in violation of the Competition in Contracting Act of 1984 (CICA). 10 U.S.C. sect. 2305 (a)(1) (2000). The protesters maintain that the Army has consolidated these requirements for no reason other than convenience, which, the protesters argue is not a sufficient rationale for bundling. The reach of the restrictions against total package or bundled procurements in CICA is broader than the reach of restrictions against bundling under the Small Business Act, Phoenix Scientific Corp., B-286817, Feb. 22, 2001, 2001 CPD para. 24 at 9-10. Specifically, CICA generally requires that solicitations include specifications which permit full and open competition and contain restrictive provisions and conditions only to the extent necessary to satisfy the needs of the agency. See 10 U.S.C. sections 2305(a)(1)(A), (B). Because procurements conducted on a bundled or total package basis can restrict competition, we will sustain a challenge to the use of such an approach where it is not necessary to satisfy the agency’s needs. Better Serv., B-265751.2, Jan. 18, 1996, 96-1 CPD para. 90 at 2. The determination of a contracting agency’s needs and the best method for accommodating them are matters primarily within the agency’s discretion. Specialty Diving, Inc., B-285939, Oct. 16, 2000, 2000 CPD para. 169 at 3. Of particular relevance here, where a requirement relates to national defense or human safety, an agency has discretion to define the solicitation requirements to achieve not just reasonable results, but the highest possible reliability and effectiveness. Tucson Mobilephone, Inc., B-250389, Jan. 29, 1993, 93-1 CPD para. 79 at 5, aff’d, B-250389.2, June 21, 1993, 93-1 CPD para. 472. The Army states that the SICPS/TMSS is a mission critical system. CO’s Rebuttal Comments at 1- 3. It is currently fielded for troops in Iraq and Afghanistan to provide a quick and easy way to establish temporary battlefield communication centers. Military commanders use these centers to issue instructions and warn soldiers of approaching dangers. Moreover, the agency explains that untested, unsafe, or incompatible systems could cause delays and risks. As a result, the Army contends it needs to be certain these items will perform as a system, rather than as a collection of separate parts. While the protesters disagree with the Army’s need for the proven integration and compatibility of these systems, we think the agency has met its burden of showing a reasonable need for buying these items as a total system. We also see nothing unreasonable in the Army’s rejection of the protesters’ contention that the agency could enter into a separate integration contract. The Army responds that having a separate contract for an additional company to integrate all the separate components would not be time or cost effective, and that the Army would run the risk of not being able to procure enough systems in the event of a surge requirement. (Outdoor Venture Corporation; Applied Companies, B-299675; B-299676, July 19, 2007) (pdf)

When a proposed acquisition involves bundled requirements, the agency must first conduct market research to determine whether the bundling is necessary and justified, given the potential impact on small business participation, by ascertaining whether the government will derive measurably substantial benefits from the bundling and quantifying these benefits. FAR sect. 7.107(a), (b). In addition, the agency must, at least 30 days before issuing a solicitation, provide its acquisition package to the SBA procurement representative for review and also provide a statement why the (1) proposed acquisition cannot be divided into reasonably smaller lots for small businesses, (2) delivery schedules cannot be established that will encourage small business participation, (3) proposed acquisition cannot be structured so to make it likely that small businesses can compete for the prime contract, (4) consolidated construction project cannot be acquired as separate discrete projects, or (5) bundling is necessary and justified. FAR sect. 19.202-1(e). Furthermore, within the same 30 days, an agency must notify any affected incumbent small business concerns of the Government’s intention to bundle the requirement. FAR sect. 10.001(c)(2). However, the agency argues that FAR sections 7.107(a), (b); 10.001(c)(2); and 19.202-1 do not apply to the task orders or the BPA issued under Sverdrup’s FSS contract because these provisions applying bundling rules to FSS contracts were implemented after TACOM had completed the development of its acquisition plan. The requirements that agencies perform a bundling analysis and notify the SBA when requirements are bundled were specifically made applicable to BPAs and orders placed against FSS contracts by a Federal Register notice published October 20, 2003, with an "effective date" of October 20, 2003. 68 Fed. Reg. 60,000 (Oct. 20, 2003); FAR sect. 8.404(a). The FAR states that "[u]nless otherwise specified . . . FAR changes apply to solicitations issued on or after the effective date of the change.” FAR sect. 1.108(d)(1). Since the solicitation that led to the award of the BPA was not issued until December 5, 2003, which was after the effective date of the revised bundling regulations, the agency was required to comply with these regulations, even though at the time the Army finished its acquisition planning the regulations had not gone into effect. The Army next argues that these FAR bundling requirements do not apply because the SETA services previously performed by Sigmatech were not bundled with the other requirements and were merely a “follow on” to the Camber contract. However, the record shows that, for the past 15 years, the SETA services for the RSJPO have been provided by small businesses (including Sigmatech) under AMCOM contracts. These services were not, as the agency contends, a “follow on” to the Camber contract previously issued by TACOM because, although SETA services were provided under the Camber contract, this support for the RSJPO was not provided by Camber. Even after the RSJPO came under the control of TACOM, the Army still procured the RSJPO services from small businesses through the AMCOM contracts and BPAs for example, through exercising options under the ID/IQ contract as recently as 2004 (with performance into 2005) and through the BPA issued to Sigmatech in 2004, all as part of small business reserves. Thus, the inclusion of the RSJPO SETA services in Sverdrup’s BPA is a consolidation of two or more procurement requirements that were previously performed by small businesses under separate, smaller contracts. We also find that the procurement appears to result in a single contract (the Sverdrup BPA and resulting task orders) that is unsuitable for award to small businesses due to its size and the aggregate dollar amount of the anticipated award. In this regard, the estimated contract value is approximately $130 million over a 5‑year period and only two large businesses (and no small businesses) responded to the RFQ that resulted in the BPA award. We thus conclude, under these circumstances, that the consolidation of the SETA services for the RSJPO under the Sverdrup BPA meets the definition of bundling under the Small Business Act. However, the record shows that the Army failed to perform a bundling analysis as required by FAR sect. 7.107(a), (b), or comply with the requirements of FAR sect. 19.202-1 in providing notice of bundling to the SBA. The record further shows that the agency failed to provide notice to Sigmatech (the incumbent small business concern) of its intent to bundle the requirements and thus failed to comply with FAR sect. 10.001(c)(2). We sustain the protest on these bases. (Sigmatech, Inc., B-296401, August 10, 2005) (pdf)

Although DLA initially identified 3,431 NSNs as F404 consumable parts to be covered under the contract, DLA has since determined that 665 of those NSNs were already being provided under a separate Navy PBL contract, leaving 2,766 NSNs for which the contractor will provide logistical support services. Of those, DLA indicates that it will source and supply 312 "mainly competitive small business NSNs," for which General Electric will supply only logistical support, leaving 2,454 NSNs for which General Electric will provide logistical support, sourcing, and supply. CO Statement at 11. The record shows that prior to proceeding with the solicitation, DLA fulfilled its obligation to seek the views of the Small Business Administration (SBA), through its procurement center representative, regarding the anticipated bundling. See 15 U.S.C. Section 644 (2000); FAR Section 7.107. Initially the SBA objected to the bundling as unjustified, and pursued an appeal to reverse the bundling. Ultimately, however, the SBA withdrew its appeal and agreed to the bundling with certain conditions intended to promote and preserve small business participation for these parts, which were memorialized in writing between the SBA and DLA. AR, Tab 14, Defense Department Form 70, at 2. (B. H. Aircraft Company, Inc., B-295399.2, July 25, 2005) (pdf)

We find that there is no improper bundling here. Where there is a consolidation of two or more agency requirements, the Small Business Act, as amended, requires that agencies avoid bundling them together where the result would be a single contract that is likely to be unsuitable for award to a small business concern. 15 U.S.C. 632(o)(2). On the other hand, where, as here, the record shows that the agency has reserved its requirement for small businesses, and there is an expression of interest in the requirement by legitimate small businesses, there is no basis to conclude that the consolidated requirement is unsuitable for award to a small business within the meaning of the Small Business Act. Phoenix Scientific Corp. , supra , at 9. Here, the agency proceeded with the acquisition notwithstanding the protest, and on October1, 2004, made award of a contract for the consolidated requirement to a small business concern. Under the circumstances, we have no basis to conclude that the agency's consolidation of these requirements into a single contract was improper or inconsistent with the Small Business Act. (Health & Human Services Group, B-294703, December 15, 2004) (pdf)

The agency explains that the combined solicitation is necessary because Group Seattle contains only one MLB (located at Station Bellingham), which may not generate sufficient repair work to meet the $10,000 minimum amount under the contemplated IDIQ contract. A separate contract for Group Seattle also would deprive the agency of the potential cost benefit from a single contractor’s economies of scale that would result from repairs on more than one boat, and also would unnecessarily increase contract administration costs. The agency determined that, notwithstanding that Reedsport would not be able to compete, combining the Groups would not result in a limited competition, since 10 firms expressed interest in the requirement as structured. The agency’s approach is unobjectionable. We see no reason why the agency should not be permitted to consider, in configuring the lots for solicitation purposes, the amount of work that would be generated under different combinations of groups, stations and boats, and the potential effect on the prices for that work (due, for example, to economies of scale), as well as whether the work generated for the single MLB would satisfy the contract minimum. While these considerations resulted in Reedsport’s exclusion from the competition, it is clear that the Coast Guard gave due consideration to the broader competitive impact of its approach. In this regard, based on the numerous expressions of interest, the agency concluded that it could achieve the operational benefits of its approach while possibly receiving greater competition than it did under IFB 003. In arguing that its own inability to compete renders the solicitation restrictive, Reedsport ignores other legitimate competitive considerations that would lead to a different conclusion. For example, while splitting the requirement would enable Reedsport to compete for the Station Port Angeles MLBs, this might at the same time result in little or no competition for the single MLB at Station Bellingham. Similarly, Reedsport’s position fails to take into account the possibility that combining the two groups could make the requirement more attractive to some potential bidders, and ultimately result in greater competition overall. We conclude that the agency reasonably combined the two groups under Lot 5.  (Reedsport Machine & Fabrication, B-293110.2; B-293556, April 13, 2004) (pdf)

The reasons that the agency has offered, however, for grouping the travel locations by geographic region, and for issuing a single consolidated procurement, are not solely based on administrative convenience. As indicated previously, the underlying purposes behind the agency's single procurement included the legitimate requirement to reengineer the antiquated and costly DoD travel process, in part by consolidating the process, and structuring geographical groupings to allow for more small business participation. Agency officials testified that a major factor that was considered in structuring the RFP into 28 travel areas, with 89 locations was whether there was adequate sales volume to achieve effective competition. See Tr., June 11, 2003, at 12, 40-41. Moreover, this procurement approach allowed more choices by potential small business offerors to select the travel areas where they would be most competitive and able to successfully perform the contracts. Finally, unlike the protesters, DTS/PMO officials found, based on discussions with the Army, that the MEPS travel needs were well suited for support by small businesses because the travel services for MEPS are relatively “cut and dry”; the protesters have not shown this judgment was unreasonable. See Tr., June 6, 2003, at 41; Tr., June 9, 2003, at 105; Tr., June 11, 2003, at 12-15.  Since the agency had a legitimate requirement to reengineer DoD travel processes by consolidating them, and the agency did reasonably consider the impact on small businesses, we find the agency has justified its approach to consolidating the agency's requirements. In this regard, we have upheld the consolidation of requirements where, as here, an agency has provided a reasonable basis for using such an approach--e.g., a definitive agency requirement that mirrors the agency's minimum needs and necessitates the questioned consolidation. See The Sequoia Group, Inc., supra.  (AirTrak Travel etal., B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5, June 30, 2003)  (pdf)

We do not question the agency's decision to classify food services as logistics support functions to be administered by the DOL. Rather, our concern is whether the agency has provided a reasonable justification of its needs in terms of including food services in the same RFP with base, vehicle, and aircraft maintenance services. In our view, the fact that the agency is organized in a manner which results in the administration of the performance of all of these functions by one particular office (which may itself be reasonable) does not provide a basis for insisting that all of these varied services be procured from one source. In other words, Fort Riley could, consistent with its view that food services are just as integral to the work of its DOL as the other functions, continue to have the contract for food services, as well as the contract for the other services, administered by the DOL. Beyond the question of whether all of the services are part of logistics and relate to supporting the troops, the agency's reason for bundling them all in a solicitation seems to merely reflect the belief that it is administratively more convenient to manage one entity performing all of the requirements--either the MEO or a private-sector offeror--as opposed to two entities--either the MEO or a private-sector offeror for the food services, and either another MEO or another private-sector offeror for the other base, vehicle, and aircraft maintenance requirements. Administrative convenience is not a legal basis to justify bundling of requirements, if the bundling of requirements restricts competition, as we believe it does here. Vantex Serv. Corp., supra, at 4; National Customer Eng'g, supra, at 6.  (EDPEnterprises, Inc., B-284533.6, May 19, 2003  (pdf))

This solicitation does not represent a “consolidation” of two or more requirements, inasmuch as the record establishes that all of the requirements here were previously provided under the one predecessor contract with IHS, a large business, and were not provided under separate smaller contracts.  Thus, the Small Business Act requirements pertaining to bundling are not applicable to this solicitation.   USA also argues that this solicitation represents an improperly bundled or total package procurement in violation of the Competition in Contracting Act of 1984 (CICA).  The reach of the restrictions against total package or bundled procurements in CICA is broader than the reach of restrictions against bundling under the Small Business Act.  Phoenix Scientific Corp., B-286817, Feb. 22, 2001, 2001 CPD ¶ 24 at 9‑10.  Specifically, CICA generally requires that solicitations include specifications which permit full and open competition and contain restrictive provisions and conditions only to the extent necessary to satisfy the needs of the agency.  See 10 U.S.C. §§ 2305(a)(1)(A), (B) (2000).  Because procurements conducted on a bundled or total package basis can restrict competition, we will sustain a challenge to the use of such an approach where it is not necessary to satisfy the agency's needs.  Better Serv., B‑265751.2, Jan. 18, 1996, 96-1 CPD ¶ 90 at 2.  The determination of a contracting agency's needs and the best method for accommodating them are matters primarily within the agency's discretion.  Specialty Diving, Inc., B-285939, Oct. 16, 2000, 2000 CPD ¶ 169 at 3.  Of particular relevance here, where  a requirement relates to national defense or human safety, an agency has discretion to define the solicitation requirements to achieve not just reasonable results, but the highest possible reliability and effectiveness.  Tucson Mobilephone, Inc., B-250389, Jan. 29, 1993, 93-1 CPD ¶ 79 at 5, aff'd, B-250389.2, June 21, 1993, 93-1 CPD ¶ 472.   (USA Information Systems, Inc., B-291417, December 30, 2002)

While we recognize that there are instances where an agency awards identical ID/IQ contracts so that it might be reasonable to define what was solicited and awarded as one procurement requirement (a question we need not resolve here), that is not what occurred in this instance. In this case, although a single solicitation (the MLA) was issued, it listed a variety of equipment needed by the agency. The MLA thus was not a statement of a single procurement requirement, as the agency suggests, but instead functioned more as a list of a range of multiple procurement requirements. As the protester notes, the nine contracts awarded under the MLA were of varied scope and covered varying lists of equipment. If the MLA referenced a single requirement, as the agency contends, that would mean that the contracting agency had awarded many (perhaps all) of the nine contracts even though (since they did not cover the entire MLA) they did not satisfy the agency's procurement requirement. The fact that all of the containers and all of the related equipment can be accurately described as intermodal container equipment does not establish that they are simply elements in a large unitary procurement requirement; otherwise, separate equipment contracts for different types of furniture, or for identical services in different regions of the country, would have to be viewed as contracts for a single procurement requirement. In our view, to define "procurement requirement" so broadly could shield from meaningful review the very sort of arbitrary consolidation of requirements that the Act's restrictions on bundling are intended to prevent.  (TRS Research, B-290644, September 13, 2002)  (pdf)

On the record before us, we find that the Army has not adequately demonstrated that combining its requirements for portable latrine and waste removal services was necessary to satisfy the agency's needs. The agency has not adequately explained why it chose to bundle the two kinds of work at Fort Campbell, yet did not bundle two kinds of work at either of the other two locations, and in fact structured the solicitation so that services for the three locations can be obtained by separate or combined awards, thus facilitating competition while not excluding the possibility of a combined contract. The agency's justification, quoted above, essentially amounts to reliance on administrative convenience as the basis for the bundling. However, the fact that the agency may find that combining the requirements is more convenient administratively, in that it has found dealing with one contract and contractor less burdensome, is not a legal basis to justify combining the requirements, if the combining of requirements restricts competition. CICA and its implementing regulations require that the scales be tipped in favor of ensuring full and open competition, whenever concerns of economy or efficiency are being weighed against ensuring full and open competition. See Better Serv., supra; National Customer Eng'g, B-251135, Mar. 11, 93-1 CPD ¶ 225 at 6.  (Vantex Service Corporation, B-290415, August 8, 2002)  (pdf)

Given the fundamentally expanded scope and complexity of the agency's food services requirement, we think USMC reasonably concluded that there was no reasonable expectation that such small business concerns, with primarily limited messhall contracts on the installation level, possessed the capabilities, resources and experience to satisfactorily perform the contemplated regional contracts.  (MCS Management, Inc., B-285813; B-285882, October 11, 2000)

Treasury reports that it projects achieving substantial technical benefits from consolidating its IT requirements, including the requirement here, under the Seat Management program. For example, Treasury expects that having a single contractor responsible for all of its desktop IT requirements--rather than continuing to rely on the current fragmented approach of using different sources for hardware/software and services--will result in significant quality improvements as a result of (1) having a single contractor responsible for infrastructure interoperability and product compatibility, (2) eliminating the confusion, delays and denials of responsibility for service interruptions or installation problems, and (3) facilitating consistent, timely upgrades and refreshment of technology. Treasury Reports, Apr. 2, 1999, at 25-26, Apr. 28, 1999, at 5-6, and Apr. 30, 1999, at 1-2; Agency Report, Tab 26, Acquisition Plan, Feb. 9, 1999, at 3, 9. 

SKE has not rebutted the basis for Treasury's determination to procure the services in question under the Seat Management contract; it has made no showing that Treasury in fact had no reasonable expectation of achieving substantial technical benefits from consolidating these IT requirements under the Seat Management contract. Thus, there is no basis for finding that the agency's approach violates the prohibition against improper bundling.  (S&K Electronics, B-282167, June 10, 1999)