New In determining whether a modification to a contract or task order is beyond the scope of the contract or order, and thereby triggers applicable competition requirements, we look to whether there is a material difference between the modified order and the order that was originally awarded. Booz Allen Hamilton Eng’g Servs., supra, at 6-7; see also MCI Telecomms. Corp., B-276659.2, Sept. 29, 1997, 97-2 CPD ¶ 90 at 7. Evidence of a material difference between the modification and the original order is found by reviewing the circumstances attending the original procurement, and any changes in the type of work, performance period, and costs between the order as issued and as modified. See Erickson Helicopters, Inc., B-415176.3, B-415176.5, Dec. 11, 2017, 2017 CPD ¶ 378 at 7; see also Western Pilot Serv., et al., B‑415732 et al., Mar. 6, 2018, 2018 CPD ¶ 104 at 6. We also consider whether the solicitation for the original order adequately advised offerors of the potential for the type of change found in the modification, and thus whether the modification could have changed the field of competition. Western Pilot Serv. et al., supra; see also DOR Biodef., Inc.; Emergent BioSols., supra. Here, we find that the [technical direction letter] TDL is out of scope of the task order it purports to clarify.

The TDL was issued in order to assist [Naval Air Warfare Center Aircraft Division] NAWCAD “in establishing operations in a Commercial Cloud Com[p]uting facility.” AR, Tab 4, TDL, at 2. GSA confirms that “[t]he TDL scope of work pertains to supporting [NAWCAD’s] move to the Cloud environment,” but contends that “the scope of requirements contained in the TDL was entirely consistent with the scope” of the RRTS task order. MOL at 8-9; see also Intervenor Comments at 13 (concurring with agency that TDL is within scope). However, the RRTS task order makes only limited reference to cloud services, i.e., that “[t]he contractor shall provide research and analysis support . . . necessary to assess systems in areas such as Cloud, Big Data . . . .” AR, Tab 3, RRTS Task Order, at C-10.

More specifically, the agency asserts that establishment of a commercial cloud facility is within scope of the RRTS task order, specifically section C.5.3(b). COS ¶ 12, citing AR Tab 3, RRTS Task Order, at C-10; AR Tab 4, TDL. Section C.5.3(b) instructs the RRTS contractor to “[p]rovide support to C4ISR and Big Cloud system technology insertion initiatives, including transfer and transition of existing and emerging technologies.” AR, Tab 3, RRTS Task Order, at C‑10. However, section C.5.3 instructs the contractor to provide “research and analysis support . . . by developing custom identification, collection, interpretation and evaluation systems necessary to asses systems in areas such as the Cloud, Big Data . . . .” Id. Thus, the RRTS subsection (b) “insertion initiatives” are provided as part of research and analysis support for the RRTS task order, not enterprise-wide cloud migration and operations as contemplated by the TDL.

The agency also argues that section C.5.4 of the [Rapid Response Technical Services] RRTS task order requires the contractor to “provide general requirements support, to include providing logistics support, software and hardware support, operations and maintenance support, operator procedures, systems integration and demonstration, and exercise preparation support,” and that these tasks encompass the TDL work. MOL at 9. However, the contractor’s responsibilities here are project-based and, importantly, relate to information assurance for classified material and must be performed according to certain guidance applicable to classified systems and classified material. AR, Tab 3, RRTS Task Order, at C-11. In contrast, the TDL scope of work does not mention work on classified systems. Thus, this task order section does not reasonably encompass any TDL work.

Overall, we find that the TDL’s work in supporting the migration to and operation of a cloud facility differs materially from the RRTS’s scope of work, i.e., providing research and analysis support for systems assessment. For example, under the heading of information assurance support, the RRTS task order requires the contractor to support risk management certification and accreditation with regard to intelligence community classified information technology systems. On the other hand, the TDL requires the contractor to “[e]ducate and develop an organic understanding of” DoD guidance relating to unclassified data as part of its information assurance support. Further, under the TDL the contractor must “[e]ducate and develop an organic understanding of” DoD’s “cloud first policy, and how to best utilize that to our advantage, to reduce time to Approval to Operate” the new cloud-based IT systems. Compare AR, Tab 3, RRTS Task Order, at C-11 with AR, Tab 4, TDL, at 4-5. The work related to establishing an unclassified cloud environment under the TDL is substantively different from tasks supporting certification and accreditation related to classified environments under the RRTS task order.

Similarly, the TDL asks the contractor to perform work that goes beyond the RRTS task order scope of work. For example, the TDL scope of work requires the contractor to “[p]rovide IT support services to manage the Government’s enterprise-wide IT server and storage computing environments,” and “manage delivery of all enterprise IT services.” AR, Tab 4, TDL, at 5. However, the RRTS statement of work never uses the phrases “enterprise” or “IT server” and does not anticipate the contractor performing ongoing management. See generally AR, Tab 3, RRTS Task Order.

As to whether any TDL work falls within the scope of the RRTS task order, we note that the TDL makes no reference to the Rapid Response Project Office (RRPO) and its scope of work does not refer to ISR work. The TDL seeks support for NAWCAD, not the RRPO, and is thus broader in scope than the RRTS task order. GSA contends that the TDL can be used to support offices other than the RRPO because “the [RRPO] supports other DoD and Non-DOD agencies, and this [t]ask [o]rder is being used to support these [unspecified] agencies.” MOL at 8. This argument, however, that the RRPO work can be used as a foundation upon which to cantilever broad support for both DoD and non-DoD work misreads the express terms of the RRTS task order. On this record, we conclude that the TDL’s instructions to provide services to offices other than the RRPO, as well as new services for cloud migration and operations, represent a material departure from the RRPO ISR services competed among Alliant GWAC contract holders and awarded to Smartronix.

Furthermore, although the RRTS task order prohibits the use of TDLs for “assign[ing] new work, direct[ing] a change to the quality or quantity of supplies and/or services delivered . . . or chang[ing] any other conditions” of the task order, and despite GSA’s argument that “the TDL is not a modification to the Task Order at all,” the GSA and Navy considered the TDL to encompass new work. AR, Tab 3, RRTS Task Order, at H‑15; MOL at 10, citing AR, Tab 3, RRTS Task Order, at H-14 and H-15. In this regard, the Navy confirmed to GSA that, “[i]n regards to your inquiry as to whether this [TDL] work is being provided for on another [contracting] vehicle, it is not.” AR, Tab 8, Navy Email to GSA, Jan. 16, 2018, at 2.

The record also shows why the Navy elected to put the cloud migration and operations work on the RRTS task order. Smartronix’s RRTS task order was chosen as the vehicle for the Navy’s migration to a “cloud-based Managed Service Organization” due to the Navy’s “critical need for a contract vehicle to accommodate an emergent rapid requirement to stand up a proof-of-concept demonstration for a cloud-based infrastructure environment.” AR, Tab 8, Navy Email to GSA, Jan. 11, 2018, at 1. The Navy concluded that “[t]he symbiotic relationship between the two hosting environments (on-premise/legacy and cloud) and the associated migration activities necessitate all work performed be under one contract.” Id. The Navy justified its decision to put the new TDL work on the RRTS task order on the basis that the Alliant GWAC “is IT[‑]focused . . . and of course the scope of this vehicle covers all things IT and any corresponding Task Orders and TDLs would follow suit.” Id. at 1. The Navy’s desire for the work to start quickly under “one contract” appears to have taken precedence over a critical analysis by GSA and the Navy as to whether the TDL work was within the existing scope of the RRTS task order.

The record shows that the TDL’s scope of work is broader than the RRTS task order in terms of offices served and subject matter. Based on this record, we conclude that the TDL work is a material departure from the scope of the RRTS task order and we sustain the protest. See Western Pilot Serv., supra, at 7-8; see also Makro Janitorial Servs., Inc., B‑282690, Aug. 18, 1999, 99-2 CPD ¶ 39 at 3 (sustaining protest where contract modification and task order were beyond the scope of the underlying IDIQ contract).  (Alliant Solutions, LLC  B-415994, B-415994.2: May 14, 2018)

When a protester alleges that the issuance of a task or delivery order under an IDIQ contract is beyond the scope of the underlying contract, and thus falls within CICA’s competition requirement, our Office examines whether the order is materially different from the original contract, as reasonably interpreted. DynCorp Int’l LLC, supra; Floro & Assocs., B‑285451.3, B-285451.4, Oct. 25, 2000, 2000 CPD ¶ 172 at 6. Evidence of a material difference is found by reviewing the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued. Symetrics Indus., Inc., B‑289606, Apr. 8, 2002, 2002 CPD ¶ 65 at 5. Additionally, we consider whether the agency itself has historically procured the task order services under a separate contract, such that it appears that the agency itself has viewed the task order services as separable and essentially different in nature. Data Transformation Corp., B‑274629, Dec. 19, 1996, 97-1 CPD ¶ 10 at 6. The overall inquiry is whether the order is of a nature which potential offerors reasonably would have anticipated. DynCorp Int’l, LLC, supra, at 7-8 (sustaining protest of out-of-scope task order where services required under a TORP [task order request for proposals] were not reasonably contemplated when the IDIQ contracts were awarded, even though there was some overlap in the services requested in the TORP and those required under the IDIQ contracts).

Here, we find that SEAT [single engine air tanker] flight services for guaranteed periods of at least 75 days at predetermined locations are beyond the scope of the protesters’ on-call contracts. At the outset, we recognize that both the IDIQ contracts and the TORP at issue involve the acquisition of SEAT flight services to assist BLM in the suppression of wildland fires. Our analysis on scope issues, however, does not focus solely on a comparison of the specific services being procured. In this respect, as explained above, a variety of factors are pertinent to our Office’s assessment of whether an order (or solicitation for an order) falls within the scope of an underlying contract. As discussed below, we agree with the protesters that the obligations of the contractors under the on-call contract, as compared to what is contemplated by the TORP, are materially different. Consequently, the protesters could not have anticipated a task order competition for extended, guaranteed periods of performance at the time they submitted proposals. We sustain the protest on this basis.

The TORP essentially converts the on-call contracts into exclusive-use procurement vehicles; the agency’s contentions otherwise are unavailing. The two types of SEAT flight services, however, rely on fundamentally different service models. As noted above, the on-call orders provide for SEAT flight services for emergencies or surge requirements: services are sought when needed, on a daily basis, for ostensibly shorter periods of time, with the aircraft transitioning from and mobilizing to various locations throughout the wildfire season, depending on the emergent wildfire conditions. See AR, exh. 12, Representative On-Call Contract, at 6-9; exh. 3, On-Call Acquisition Plan, at 1, 4. The exclusive-use TORP, on the other hand, contemplates that aircraft will be prepositioned at one location by a predetermined date for an extensive period of 75 days or more, reserved exclusively for BLM use during the full performance period. TORP at 1-2. We agree with the protesters that the structure of how the SEAT flight services will be performed under the TORP, which generally mirrors what was contemplated under the exclusive-use procurement, is notably different than what was anticipated pursuant to the on-call contracts.

Similarly, the on-call solicitation and the subsequently awarded contracts make no reference whatsoever to any long-term, guaranteed performance period for SEAT flight services. Indeed, as elaborated further below, the protesters prepared and submitted their proposals based on their reasonable assumption that the agency would be conducting separate procurements for the different types of SEAT flight services, as it had done for decades. Therefore, we conclude that the TORP’s guaranteed, extended periods of performance at predetermined locations represent a material departure from the on-call IDIQ contracts as competed and awarded. See Ervin & Assocs., Inc., B‑278850, Mar. 23, 1998, 98-1 CPD ¶ 89 at 8-9 (sustaining protest alleging out of scope task order even though the ordered accounting services were “quite similar” to what was required under the contract, but potential offerors could not have reasonably anticipated an order for the services at issue).

In addition, the manner in which the agency typically administers the on-call contracts evidences the uniqueness of the TORP. While the on-call contracts generally advise that task orders would be issued on a best-value tradeoff basis, historically the agency actually procured its on-call needs under a somewhat unconventional methodology. AR, exh. 12, Representative On-Call Contract, at 43. Specifically, promptly after contract award in April 2017, the agency issued two task orders to the awardees: one covered on-call SEAT flight services for DOI/BLM and the other for the U.S. Forest Service. See id.; see also, e.g., AR, exh. 17, WPS Orders and Modifications, Order No. D17PD00510, at 1-3 (task order for BLM fire suppression); id., WPS Orders and Mods., Order No. D17PD00511, at 1-2 (task order for Forest Service fire suppression). Then, as requests for services--referred to as dispatches--were accepted by the SEAT contactor, DOI would modify the applicable, previously issued task order to include the new work. See, e.g., AR, exh. 17, WPS Orders and Mods., Order No. D17PD00510, Modification Nos. 1-22; COS at 5; WPS Comments at 4. Although permitted to do so under the on‑call contracts, the agency does not conduct a best-value task order competition resulting in the issuance of new task orders for each on-call dispatch. See AR, exh. 3, On‑Call Acquisition Plan, at 4 (explaining that task orders under the on‑call contract would not be competed due to the unpredictable nature of wildland fires).

Instead, in determining which vendor to utilize for a specific, urgent need for SEAT aircraft, the protesters explain that DOI generally first focused on the firm with the available aircraft closest to the fire at the lowest price. See WPS Protest at 3; ATA Protest at 8, 14; GBAA Protest at 6. If that contractor’s crew and aircraft were unavailable or the vendor declined the tasking, the agency would move to the next lowest-priced contractor until one accepted the work. See ATA Protest at 8. At that point, a written or verbal resource order was provided and the previously issued task order was modified to add the effort. E.g., ATA Protest, exh. D, ATA Sample Resource Orders, at 1-4. Of significance here, the contracts’ ordering procedures, and the methodology actually utilized by DOI, did not (1) discuss or otherwise provide for revised pricing or (2) refer to the contract rates as ceiling prices for a subsequent task order competition.

The protesters represent that the dispatch methodology utilized by the agency during the 2017 wildfire season was consistent with DOI practice for at least the past 20 years, a point not contested by the agency. ATA Protest, exh. E, Dec. of ATA President, ¶ 6. In this respect, and significantly, DOI has not previously issued a TORP to on-call contractors to solicit new pricing for extended, guaranteed periods of performance at predetermined locations, as DOI is attempting to do here. ATA Comments at 3-4; Evergreen Comments, exh. 1, Dec. of Evergreen President, ¶ 2. Similarly, neither the terms of the contracts nor the agency’s action placed the on-call offerors on notice that their proposed pricing would be treated as ceiling prices for later-competed exclusive‑use work. See Evergreen Protest at 29; GBAA Protest at 11.

Indeed, given the agency’s prior practice in how dispatches were determined and administered, we agree with the protesters that they could not have anticipated at the time they submitted offers in response to the on-call solicitation that the on-call contracts would become the vehicles through which the agency would compete and award the long-term, guaranteed period SEAT flight services that separately were being solicited under the exclusive-use solicitation. In our view, the on‑call solicitation simply did not effectively advise offerors of the potential for the type of orders contemplated by the TORP. See Data Transformation Corp., supra, at 6-7 (sustaining protest of task order as outside the scope of the underlying contract where services provided under the order were beyond the contemplation of offerors when the underlying contract was awarded).

In addition, the agency’s own historical procurement record demonstrates that DOI understood the character of these SEAT flight services to be distinct. In this respect, we consider it significant that DOI has for decades procured its SEAT flight services under two separate contracts: one for extended, guaranteed periods at specific locations and the other for surge or emergency on-call needs. Indeed, DOI remained faithful to its historical preference for separate procurements in 2016, when the agency prepared two distinct acquisition plans, issued two solicitations for the different types of SEAT flight services, and awarded separate contracts for the different services.

That the agency solicited for and awarded contracts under separate tracks for the different types of SEAT flight services further supports our view that exclusive-use services under the on-call contract were beyond the contemplation of offerors when the on-call contracts were awarded. See Sprint Communications Co., B-278407.2, Feb. 13, 1998, 98-1 CPD ¶ 60 at 10 (sustaining protest of an out-of-scope contract modification where the agency previously solicited for the different services under separate procurements, demonstrating that the agency itself viewed the services as separable); Neil R. Gross & Co., Inc., B-237434, Feb. 23, 1990, 90-1 CPD ¶ 212 at 3-4 (sustaining protest of modification of contract where agency itself viewed the services being added to the contract as separable); see also Makro Janitorial Servs., Inc., B-282690, Aug. 18, 1999, 99-2 CPD ¶ 39 at 4 (sustaining protest alleging out-of-scope task order where contemporaneous letters and memorandum from agency officials regarding the intent and purpose of the underlying IDIQ contract supported that the ordered services were not contemplated under the original contract).

In sum, following its decision to cancel the exclusive-use procurement in April 2017, the agency was left without a stand-alone contract vehicle to procure SEAT flight services for guaranteed, extended periods of time, as it anticipated it would have in place. However, the agency’s attempt to obtain the exclusive-use flight services under the current on-call procurement simply does not withstand scrutiny. In this respect, given the distinguishing characteristics of how the SEAT flight services are provided under the different models, the pre‑award perceptions and expectations of the protesters, as well as taking into account the agency’s decades of procurement practice, we conclude that the type of SEAT flight services sought under the TORP are materially different than those encompassed under the on-call IDIQ contracts. For this reason, we sustain the protests.  (Western Pilot Service; Aerial Timber Applicators, Inc.; Evergreen Flying Services, Inc.; G.B. Aerial Applications, Inc. B-415732, B-415732.2, B-415732.3, B-415732.4: Mar 6, 2018)

Zodiac argues that modification P00004 improperly relaxed the original solicitation’s performance requirements, which changed the scope of work anticipated by the RFP. Zodiac contends that the resulting work should therefore be subject to competition pursuant to CICA and Zodiac should have the opportunity to compete under a new solicitation based on the relaxed requirements. Further, Zodiac contends that such a change was not anticipated at the time the original solicitation was issued, and the field of competition would have changed had the agency relaxed the specifications in the original solicitation. As detailed below, we conclude that the record demonstrates that the scope of the original contract was not substantially changed by modification P00004, the changes to the contract could reasonably have been anticipated by competitors for the initial solicitation, and the changes to the contract would not have had a substantial impact on the field of competition for the original contract award.

CICA requires “full and open” competition in government procurements as obtained through the use of competitive procedures. 10 U.S.C. § 2304(a). 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. 4 C.F.R. § 21.5(a); Poly-Pacific Techs., Inc., B-296029, June 1, 2005, 2005 CPD ¶ 105 at 3. An exception to this rule arises where a protest alleges that a contract modification changes the work from the scope of the original contract, since the work covered by the modification would otherwise be subject to the statutory requirements for competition absent a valid determination that the work is appropriate for procurement on a sole-source basis. Anteon Corp., B-293523, B-293523.2, Mar. 29, 2004, 2004 CPD ¶ 51 at 4. Although challenges to the relaxation of contract requirements are less common than challenges to contract modifications that enlarge a contract’s scope of work, our Office recognizes that both fall within the scope of this exception, and we will consider whether modification of performance requirements result in work that should be subject to competition. Poly-Pacific Techs., Inc., supra at 3-4.

In determining whether a modification triggers the competition requirements in CICA, our Office looks to whether there is a material difference between the modified contract and the contract that was originally awarded. Engineering & Prof’l Servs., Inc., B-289331, Jan. 28, 2002, 2002 CPD ¶ ­­­24 at 4. To assess whether a contract is so substantially changed by the modification that the original and modified contracts are essentially and materially different, we consider such factors as the extent of any changes in the type of work, performance period, and costs between the modification and the original contract, as well as whether the original solicitation adequately advised offerors of the potential for the change or whether the change was the type that reasonably could have been anticipated, and whether the modification materially changed the field of competition for the requirement. Marvin J. Perry & Assocs., B-277684, B-277685, Nov. 4, 1997, 97-2 CPD ¶ 128 at 3.

Zodiac first argues that modification P00004 so substantially relaxed the contract requirements that the Army will be procuring “dramatically different boats and motors than the boats and motors that the Army had solicited.” Protest at 1. More specifically, the protester alleges that the 10 percent propelled weight reduction will alter the intended use of the boats such that in an operational situation, the boats will not be able to accommodate the payload (motor, fuel, all of the equipment and number of soldiers it was originally intended to carry). Id. at 5. Zodiac also argues that the increased working pressure will cause the boats to take longer to inflate and will have a corresponding impact on the durability of the fabric of the boats, affecting safety. Id. Further, Zodiac argues that increasing the size of the storage bag for the 7-person I-CRC by three inches will limit the means by which these boats can be transported and deployed in platforms with size restrictions, and elimination of the airborne transportability requirement in its entirety further eliminates the Army’s ability to utilize the boat in conjunction with airborne operations. Id. at 5-6.

The Army responds that modification P00004, executed almost two years into contract performance, made minor changes to the technical specifications that are within the scope of the contract, and contests the protester’s allegations that the changes will have any impact on mission performance. Combined Contracting Officer’s Statement of Facts/Memorandum of Law (COS/MOL) at 9-11. As explained by the Army, although the motors are now required to accommodate 10 percent less weight when reaching 16 knots during sea state 1 (calm water) within two minutes, the payload weight requirements for the boats themselves remain unchanged. Id. at 13-14. In other words, the deliverables will still function as 7-person I-CRCs and 15-person I-CACs and the agency will not be forced to leave behind anyone or anything as a result of the decreased propelled weight requirement. AR, Tab 8, Decl. from Director, Requirements Determination Division, Army Maneuver Support Center of Excellence, ¶ 2.

Further, the Army states that the increase in working pressure will not impact the safety of the boats because testing has already demonstrated (during a 300 percent overpressure/psi test) that the fabric of the boats can withstand the increased pressure. COS/MOL at 16; AR, Tab 8, Decl. from Director, Requirements Determination Division, Army Maneuver Support Center of Excellence, ¶ 3. Additionally, the Army notes that modification P00004 did not change the required inflation time for the boats (15 minutes for the 7-person I-CRC and 25 minutes for the 15-person I-CAC) and any increase in inflation time caused by the increased working pressure is insignificant because it did not exceed the Army’s requirements for inflation time. COS/MOL at 16. Finally, the Army states that a larger storage bag and elimination of airborne transportability requirements for the 7-person I-CRC will not will impact how the boats can be transported or what platforms they can be deployed from, and will not prevent the Army from performing airborne operations with the boats. Id. at 17-18; AR, Tab 8, Decl. from Director, Requirements Determination Division, Army Maneuver Support Center of Excellence, ¶¶ 4-5.

In our view, the agency did not improperly relax the specifications because the original nature and purpose of the solicitation and contract has not been changed by modification P00004. The capabilities and missions of the 7-person I-CRC and 15-person I-CAC set forth in the solicitation and contract remain the same after the modification to the contract. The changes to the purchase descriptions of the boats and motors are relatively minor when viewed against the entirety of all of the contract specifications and performance requirements. Defense Systems Group; Warren Pumps, Inc.; Dresser Indus., Inc., B-240295 et al., 1990 U.S. Comp. Gen. LEXIS 1182, Nov. 6, 1990 (protest denied where modifications involved substantial cost and affect first article test requirements, delivery schedule, and performance specification but did not change the nature and purpose of the original contract).

Moreover, modification P00004 did not change the performance period of the contract. The contract remains a five-year contract as awarded in 2013, and will expire on September 24, 2018. AR, Tab 3, ADS Contract W56HZV-13-D-0151, at 3. In addition, the downward equitable adjustment extending the option year ordering prices to the following year’s prices for the remaining years of the contract is relatively small, and is a function of the contract’s first article approval clause operating precisely as the contract intended. Id. at 72-73; see also RFP at 74. On this record, we agree with the Army that modification P00004 did not materially change the contract. See Emergent BioSolutions, Inc., B-402576, June 8, 2010, 2010 CPD ¶ 136 at 10-11 (modification to contract did not change the original objectives of the contract given the broadly defined developmental nature of the requirement for an anthrax vaccine).

Zodiac next argues that the original solicitation did not adequately advise offerors of the potential for the change. We disagree and find that the changes made by modification P00004 are changes to the requirements that competitors could have reasonably anticipated. As discussed, the RFP and the resulting contract included the requirement that the boats and motors pass first article testing. Under the terms of the first article approval clause, the contractor is afforded an opportunity to “make any necessary changes, modifications, or repairs to the first article or select another first article for testing” in the event it did not receive first article approval. RFP at 74. The inclusion of the first article test requirements in the RFP itself indicates the potential for changes, such as those made by modification P00004, to be made to the technical specifications of the boats and motors. See Engineering & Prof’l Servs., Inc., supra at 4-5 (modification to incorporate technological advances in ruggedized handheld computers was within scope of original contract where RFP contemplated advances could be incorporated into the requirement as they became available).

Zodiac also contends that the modification would have materially changed the field of competition had the agency relaxed the specifications in the original solicitation. However, Zodiac has not demonstrated that the changes made by modification P00004 would have materially changed the field of competition. Zodiac has not alleged that other or different competitors would have participated in the procurement. Instead, Zodiac repeatedly states that it would have proposed different, less expensive boats than the boats it proposed under the original solicitation. Protest at 2, 4, and 6-7; Comments at 1 and 3. Zodiac’s proffer of how it would have altered its original offer in response to the changed requirements does not show that the field of competition would have otherwise changed.

Finally, Zodiac argues that its boats met the original solicitation requirements, since it was found technically acceptable, and therefore it has been prejudiced by the agency’s actions. However, Zodiac has failed to establish that it was prejudiced by the changes made to the specifications by modification P00004. Competitive prejudice is an essential element of a viable protest, and where the protester fails to demonstrate prejudice, our Office will not sustain a protest. Emergent BioSolutions, Inc., supra at 14. Here, the modification in requirements had no impact on Zodiac’s ability to compete for the contract originally. More importantly, Zodiac has not even alleged that the boats it would have proposed in response to the modified requirements, even if lower-priced than the offer it originally submitted in response to the RFP, would have been lower than those proposed by ADS in this lowest-price technically acceptable procurement, such that it would have been awarded the contract. See Armed Forces Hospitality, LLC, B-298978.2, B-298978.3, Oct. 1, 2009, 2009 CPD ¶ 192 at 9-10. Accordingly, there is no basis for finding that the modification in the specifications for the boats and motors and in the overall performance requirements resulted in any prejudice to Zodiac.  (Zodiac of North America, Inc. B-414260: Mar 28, 2017)

Chase challenges the modifications the DLA made to PO-1464 and PO-1620, which waived some or all [first article test] FAT requirements. The protester primarily argues that the modifications were unreasonable because they changed the fundamental nature of the purchase orders. As a result, Chase contends that the modification was outside the scope of the orders, and should have required a new competition. 

(deleted sentences)

With respect to the scope argument, the Competition in Contract Act generally requires “full and open competition” in government procurements as obtained through the use of competitive procedures. 41 U.S.C. § 3301. Our Office generally will not review modifications to contracts, because such matters are related to contract administration and are beyond the scope of GAO’s bid protest function. 4 C.F.R. § 21.5(a); MCI Telecomms. Corp., B‑276659.2, Sept. 29, 1997, 97-2 CPD ¶ 90 at 7. An exception to our rule about reviewing modifications to a contract is where it is alleged that the modification is outside the scope of the contract originally awarded. Id. This is because the work covered by the modification would otherwise be subject to the statutory requirement for competition, absent a valid determination that the work is appropriate for procurement on a sole-source basis. Id.

In determining whether a modification is beyond the scope of an underlying contract (or in this case a purchase order), our Office considers whether there is a material difference between the modification and the contract. DynCorp Int’l LLC, B‑402349, Mar. 15, 2010, 2010 CPD ¶ 59 at 6; MCI Telecomms. Corp., supra. Evidence of a material difference is found by reviewing the circumstances attending the procurement that originally was conducted, examining any changes in the type of work, performance period, or costs between the contract as awarded and as modified, and considering whether the original solicitation adequately advised offerors of the potential for the type of work contemplated by the modification. See Anteon Corp., B-293523, B-293523.2, Mar. 29, 2004, 2004 CPD ¶ 51 at 5. The overall inquiry is whether the modification is of a nature that potential offerors reasonably would have anticipated competing for the goods or services being acquired through issuance of the modification. Id.

In its protest, Chase argues that the agency’s waiver of FAT will result in fundamentally different products from those that pass FAT without waivers. In this regard, the protester contends that the FAT requirements will influence decisions about the materials, construction, and design of the products. In addition, Chase contends that even if the agency could waive FAT, Flexfab is not eligible for the waiver.

Contrary to Chase’s arguments, we find that decision to waive FAT under PO-1464 and PO-1620 did not materially change the orders because the waiver of test requirements does not modify the underlying substantive requirements for the air duct hose assemblies. AR (B-411528.2), Tab 13, Modification P00001, at 2; AR (B‑411529.2), Tab 17, Modification P00002, at 2. In this regard, every air duct hose assembly supplied by Flexfab must still meet the product requirements imposed under the original purchase orders, irrespective of the FAT waivers. AR (B‑411528), Tab 3, PO-1464, at 3; AR (B-411529), Tab 7, PO‑1620, at 3. As the DLA explains, “waiver of FAT does not change any of the requirements under th[e] specification” since “FAT is used to ensure that the contractor has the ability to make an item that meets the contractual requirements” and even “[i]f FAT is waived, the contractual requirements still have to be met.” AR (B-411528.2), Tab 13, Quality Assurance Specialist Memorandum, at 1; AR (B‑411529.2), Tab 14, Quality Assurance Specialist Memorandum, at 1.

Since we conclude that waiving the testing requirement does not mean that the agency will be ordering a fundamentally different product, Chase’s assertions fail to demonstrate that the modification was beyond the scope of the order.

We also find misplaced the protester’s assertion that Flexfab was not eligible to obtain a waiver. Chase asserts that the agency’s waiver of FAT was improper because Flexfab’s air duct has never passed FAT. As previously discussed, PO‑1464 and PO-1620 each contain FAR clause 52.209-3. FAR clause 52.209-3 does not make the agency’s decision to waive FAT contingent on whether a vendor previously passed the FAT being waived, but rather contemplates that an agency may waive FAT where supplies identical or similar to those called for have been previously furnished by the vendor and have been accepted by the government. See FAR clause 52.209-3(h).

Here, the agency based its waiver under PO-1464 on Flexfab previously furnishing these air duct hose assemblies under prior government contracts, which were accepted by the government within three years of when PO-1464 was issued, and because the tests that were waived were not impacted by the exception to the wire specification. AR (B-411528.2), Tab 23, Engineer’s Affidavit, at 1. The record also demonstrates that the DLA waived all FAT requirements under PO‑1620 because Flexfab received FAT approval under PO-1464. AR (B-411529.2), Tab 17, Modification P00002, at 2. Based on this record, we have no basis to find that Flexfab’s air duct hose assemblies were not eligible for FAT waiver.

In sum, since we conclude that the modifications to waive FAT were not outside the scope of the underlying purchase orders, we view the modifications at issue as purely a matter of contract administration within the discretion of the agency.   (Chase Supply, Inc. B-411528.2, B-411529.2: Dec 7, 2015  (pdf)

Onix maintains that the modification of the En Pointe delivery order is outside the scope of the original requirements that the agency was purchasing. For the reasons discussed below, we agree with Onix.

(sections deleted)

Onix alleges that the agency’s modification of the En Pointe delivery order amounts to an impermissible, out-of-scope, sole-source modification. Onix maintains that the original En Pointe delivery order was for the provision of software update services (along with technical support) for the Peace Corps’ existing software products installed on the Peace Corps’ IT enterprise system. The protester argues that the acquisition of an [e-mail as a service] EaaS product--a cloud based service rather than maintenance/update services for existing, installed, software--is fundamentally different from what the agency originally had acquired under the En Pointe delivery order. Onix therefore argues that the agency is either required to conduct a competition for its EaaS requirement, or to execute a sole-source justification for acquiring its EaaS product from En Pointe, or any other authorized Microsoft reseller.

The agency argues that its modification is within the scope of En Point’s original delivery order, and therefore, proper. The Peace Corps principally argues that the modification is within scope because the delivery order contemplated the acquisition of cloud based services, and that acquisition of an EaaS product is merely the next logical step in updating the agency’s existing computing environment. The agency points out that the delivery order included a table entitled “future pricing.” AR, exh. 16, En Pointe Delivery Order Future Pricing Chart. According to the agency, this table was included in the En Pointe delivery order to “lock in” prices for future products that the Peace Corps might want to purchase throughout the performance period of the delivery order. Contracting Officer’s Statement of Facts at 4. The agency also identifies various sections of the delivery order’s statement of work that it maintains allow the agency to add products to the delivery order throughout the period of performance. Id. at 4-5.

The Competition in Contracting Act generally requires “full and open competition” in government procurements as obtained through the use of competitive procedures. 41 U.S.C. § 3301. Our Office generally will not review modifications to contracts, because such matters are related to contract administration and are beyond the scope of GAO’s bid protest function. 4 C.F.R. § 21.5(a); MCI Telecomms. Corp., B‑276659.2, Sept. 29, 1997, 97-2 CPD ¶ 90 at 7. An exception to our rule about reviewing modifications to a contract is where it is alleged that the modification is outside the scope of the contract originally awarded. Id. This is because the work covered by the modification would otherwise be subject to the statutory requirement for competition, absent a valid determination that the work is appropriate for procurement on a sole source basis. Id.

In determining whether a modification is outside the scope of an underlying contract (or in this case, a delivery order), our Office considers whether there is a material difference between the modification and the contract. DynCorp Int’l LLC, B-402349, Mar. 15, 2010, 2010 CPD ¶ 59 at 6; MCI Telecomms. Corp., supra. Evidence of a material difference is found by reviewing the circumstances attending the procurement that originally was conducted, examining any changes in the type of work, performance period, or costs between the contract as awarded and as modified, and considering whether the original solicitation adequately advised offerors of the potential for the type of work contemplated by the modification. See Anteon Corp., B-293523, B-293523.2, Mar. 29, 2004, 2004 CPD ¶ 51 at 5. The overall inquiry is whether the modification is of a nature that potential offerors reasonably would have anticipated competing for the goods or services being acquired through issuance of the modification. Id.

We agree with Onix that the modification of the En Pointe delivery order is an improper, out-of-scope, sole-source modification. As an initial matter, we note that there is a fundamental flaw in the agency’s logic. As noted, the original competition for the En Pointe delivery order was limited to authorized Microsoft resellers because the agency concluded that only Microsoft products would meet its requirements. The agency’s subsequent actions in connection with acquiring an EaaS product--notably its pilot program that tested the Google EaaS product, and its issuance of an RFI to sources other than Microsoft authorized resellers[4]--explicitly recognize that there are firms other than Microsoft authorized resellers, and products other than Microsoft’s EaaS product, that are available to meet the agency’s requirement.

Since the agency essentially concedes by its actions that there are EaaS products that potentially can meet its requirements, and since the competition for the En Pointe delivery order was confined to firms capable of providing Microsoft products and services, it necessarily follows that firms--such as Onix--could not reasonably have anticipated that the agency would acquire an EaaS product using the originally-competed delivery order. For this reason alone, we conclude that the modification is outside the scope of the original delivery order.

We also agree with the protester that, substantively, neither the original competition for the delivery order, nor the delivery order as issued, ever contemplated the acquisition of a cloud-based EaaS product or service. Specifically, a review of the RFQ and delivery order demonstrate that the agency was acquiring a renewal of its existing enterprise agreement with Microsoft for a discrete list of software products already owned by the Peace Corps. The statement of work in the RFQ (as well as the En Pointe delivery order) provides, in its entirety, as follows:

The Peace Corps requires renewal of its Microsoft EA [enterprise agreement] which provides software and maintenance services that cover the following:

• Licensing for required Microsoft software products authorized for use by Peace Corps;

• Software Assurance for authorized/licensed products, as appropriate;[5]

• Media sets, as appropriate;

• Access to Technical Support Assistance services to provide remote or onsite support to Peace Corps;

• Access to Problem Resolution services;

• Access to Technical Training on Microsoft products;

• Technical Account Manager services to track assets and utilization of the technical support resources on the contract;

• Authorization for home use of Microsoft products for Peace Corps staff based on the “Home Use Program.”

The Peace Corps requires supply of its existing inventory of Microsoft licensed software under this Enterprise Agreement, according to the quantities required, as detailed in Appendix A. In addition, the Peace Corps requires technical support hours, problem resolution hours, and days of technical training, as detailed in Appendix B.

AR, exh. 3, Delivery Order RFQ, at 2 (emphasis supplied). Simply stated, there is nothing in this statement of work that contemplates the provision of an entirely new product or service, such as an EaaS product.

Based on our review, it is clear that the original delivery order did not include any cloud based services such as the EaaS product being acquired by the Peace Corps. Rather, it was for maintenance and upgrade of the agency’s existing inventory of software products already installed in the agency’s IT environment.

As a final matter, we note that the agency appears to suggest that the original RFQ (and, correspondingly, the En Pointe delivery order) essentially contemplated the issuance of an indefinite-delivery, indefinite-quantity (IDIQ) type delivery order under which the agency may purchase, without limitation, new software licenses not already owned by the Peace Corps. Contracting Officer’s Statement at 4-5. We disagree.

The terms of the RFQ (as well as the En Pointe delivery order) are expressly limited to a discrete list of software products--identified by part number, and specified by quantity--already owned by the Peace Corps. AR, exh. 3, RFQ at appendix A; exh. 2, En Pointe Delivery Order, at 5-9. There is nothing in either the RFQ or the delivery order that suggests that the agency intended to (or did, in fact) issue an IDIQ-type delivery order. In fact, the RFQ specifically contemplates the award of a firm-fixed-price delivery order, AR, exh. 3, RFQ at 1. In addition, firms were required to provide pricing in two line-item tables, appendix A (listing the software products and quantities owned by the agency) and appendix B (listing the technical support services required and the number of hours to be provided). Firms were required to provide lump-sum prices for each line item. The record therefore shows, contrary to the agency’s suggestion, that the En Pointe delivery order was a firm-fixed-price instrument to acquire a discrete, enumerated, quantity of services.

In sum, we conclude that the modification to the En Pointe delivery order is an improper, out-of-scope, sole-source modification, for which the agency never conducted a competition, and for which the agency has not prepared the necessary justification and approval. We therefore sustain Onix’s protest.

RECOMMENDATION

We recommend that the agency either meet its requirement for an EaaS product through the use of full and open competitive procedures, or execute the necessary justification and approval to acquire the EaaS product through other than full and open competitive procedures. Should the agency decide to meet its requirements using full and open competition (or some form of limited competition), we recommend that the agency terminate the modification issued to En Pointe’s delivery order for the convenience of the government, and make award for its requirement to the firm the agency determines can best meet its requirements. Finally, we recommend that the agency reimburse Onix the costs associated with filing and pursuing its protest, including reasonable attorneys’ fees.  (Onix Networking Corporation B-411841: Nov 9, 20150  (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., B-289331, Jan. 28, 2002, 2002 CPD ¶ 24 at 4; see 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 ¶ 34 at 3. 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. Atlantic Coast Contracting, Inc., B-288969.2, June 21, 2002, 2002 CPD ¶ 104 at 4.

Here, Cornishe argues that modification No. 39 is outside the scope of the underlying LSF contract because it requires performance of aircraft overhauls, which the protester argues are not within the scope of the LSF contract. The protester also argues that performance of requirements outside the Continental United States is not within the scope of SES’s LSF contract.

The Army argues that the SOW for modification No. 39 is expressly within the scope of the LSF contract. We agree. As noted above, the SOW for the LSF contract specifically addresses aircraft repairs, overhauls and related logistics support. It does not limit the type of aircraft for performance, and instead broadly addresses the following categories of work:

(1) Repair, update, integrate, overhaul or modify various items of Communications-Electronics (C-E), navigational fire control, aircraft and . . . associated hardware.


(2) Repair, update, overhaul or modify end items (example: aircraft, shelters, tooling) that contain, use or transport other Class VII (Major End Items), e.g., mobile communication or aircraft systems as required.

* * * * *

(6) Perform modification and repair on designated aircraft and on components at locations in and outside of the continental United States. This includes aircraft engine overhaul, aircraft refurbishment, transmission overhaul, etc.

AR, Tab E, Contract No. 0130 SOW, at 1-2.

The record here shows that overhauls were clearly within the scope of the LSF contract. The record further shows that the SOW clearly anticipated performance of work “at locations in and outside of the continental United States.” Id. at 2. For this reason, we find no merit to the protester’s argument that the requirements of modification 39 are outside the scope of the LSF contract.

The protester also argues that the requirements of modification 39 are outside the scope of work authorized by the November 2011 J&A, in that the J&A did not mention overhauls of Mi-17 helicopters. In this regard, the protester notes that the November 2011 J&A stated that the agency anticipated ordering cockpit modifications for Mi-17 helicopters, but not overhauls. The protester also contends that the 2011 J&A authorized work in support of the Pakistan government, but not the Afghanistan government.

As the Army contends, however, the purpose of the J&As was to increase the ceiling value of the LSF contract, and while each J&A cited estimates of work to be performed, the work estimates did not modify the scope of the LSF or otherwise restrict the scope of work under the LSF contract. We agree, and conclude that the LSF contract, rather than the 2011 J&A, is the relevant document for determining whether modification No. 39 was an in-scope modification. On this record, we deny Cornishe’s argument that modification No. 39 is outside the scope of the LSF contract.  (Cornische Aviation & Maintenance, LTD, B-405013.4, Jan 25, 2013)  (pdf)

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)

New This is a protest of a decision by the Department of Veterans Affairs (“VA”) to modify four existing contracts for the distribution of medical and surgical supplies. The contracts were modified to expand the scope of work to include supply as well as distribution. The plaintiffs are suppliers of medical and surgical items and allege that the change will result in loss of opportunity to compete to sell their products to the VA. We denied a motion for a preliminary injunction on July 13, 2018. The case is now presented on fully-briefed cross-motions for judgment on the administrative record. Oral argument was held on September 13, 2018. As announced at the conclusion of oral argument, because the balance of the harms favors the government, we cannot grant an injunction.

Background

The VA awarded contract No. VA119-16-D-002 to Kreisers, Inc. (“Kreisers”), No. VA119-16-D-0004 to American Medical Depot (“AMD”), No. VA119-16-D-0005 to Cardinal Health 200, Inc., and No. VA119-16-D0006 to Medline Industries, Inc. (“Medline”) on February 24, 2016. The VA refers to these companies as the “Prime Vendors” or “PVs” of its Medical Surgical-Prime Vendor-Next Generation program (“MSPV-NG” or “MSPV” generally). Each contract covers a geographical area and requires the PVs to stock, store, and distribute the medical supplies that are available on the “Master List” against which VA hospitals can place orders. The agency also refers to this as the “formulary.” An item on the list comes from a specific supplier and is available for a set price. The VA local centers place orders with the PVs, which then ship those items to the hospitals and bill the VA for them. The dispute in this case concerns who should populate the Master List with particular items, suppliers, and prices. It is worth noting up front that plaintiffs do not contend that they are able to do the precise work sought by the modifications–populating the Master List. Rather, they are able to furnish some of the end-product supplies which will appear on the Master List.

The MSPV program has been in existence for over a decade. It is intended to further standardize and expedite the buying process by “narrowing the range of items purchased to meet a given need in order to improve buying power, simplify supply chain management, and provide clinical consistency.” AR 1972. The goal of the VA was to establish a “national strategic sourcing solution that combines a Government-provided capability for ordering a wide range of medical and surgical supplies via a master listing with electronic cataloging (e-catalog) and ordering capability.” Id. VA medical centers around the country have used the legacy MSPV program to order frequentlyused medical and surgical supplies. In 2016, the Government Accountability Office (“GAO”) issued a report about the program. It stated that the former version of the MSPV was not fully realizing its purpose of “standardizing items used across [the VA’s] medical centers” nor had it achieved cost savings that ought to follow from the buying power generated by a standardized ordering process. AR 408.2 The VA hoped to improve outcomes with the new MSPV.

(sections deleted)

By March 2018, the Master List contained only 7800 out of the 80,000 that the VA anticipated as necessary to support its national healthcare network. This failure was untenable in the view of the VA, thus it sought rapidly to enlarge the number of items on the Master List by outsourcing to the PVs the selection for items to be included on the formulary. In order to do so, it modified the four PV contracts, allowing the PVs “to assist the Government in sourcing thousands of new items quickly. This will be accomplished by allowing the PVs to leverage their existing commercial networks in order to propose sources and prices for items identified by the MSPV Program Office.” AR 1974 (Class Justification and Approval). VA retained the ultimate authority to place items on the Master List, but it no longer bothered to go through the acquisition-like process of identifying sources and setting prices through competing BPAs and the like (or other legal non-competitive alternatives).

(sections deleted)

DISCUSSION

We are fully sympathetic with plaintiffs’ challenge to this “procurement.” The VA appears to have thrown up its hands in its decade long effort to develop an efficient system for the procurement of high volume items by its many field hospitals using competitive or quasi-competitive methods. It frankly concedes now that using competition is too time consuming, too fraught with challenges, and too subject to inefficiencies triggered by the myriad set-asides required by Congress. Having failed abjectly in prior efforts, what it proposes here is tantamount to a wholesale outsourcing of a large portion of its management of procurement to a few private companies. And yet, we are sympathetic. And as we explain below, we are unwilling to question the agency’s assessment that anything less dramatic will jeopardize patient care.

Plaintiffs challenge the decision to modify the contracts and hand the task of identifying suppliers to the PVs for five reasons: lack of competition, failure to consider VA’s statutorily mandated preferences for service disabled veteran-owned small businesses, improper bundling of distribution with supply requirements, inherent conflict of interest due to the PVs also being suppliers of some items, and an illegal outsourcing of inherently governmental functions. Plaintiffs ask the court to enjoin the contract modifications and require the VA to continue under its prior system of soliciting suppliers through BPA solicitations and other competition-substitutes.

Defendant responded by moving to dismiss, arguing that plaintiffs lack standing because the modifications were within the scope of the original contracts, meaning that the change is not a protestable event. Defendant also moved to dismiss for lack of standing on the basis that the plaintiffs are not distributors of medical supplies and thus are not eligible for the work being added to the PV contracts. Lastly, on the merits, the government cross-moved for judgment, arguing that the J&A reasonably justifies the change, that any harm to plaintiffs is merely hypothetical, that the VA will be significantly harmed by any further delay in populating the list, and that the public interest favors timely provision of healthcare to veterans as enabled by this modification. Intervenors join in these arguments by filing their own cross motions and, in one case, an independent motion to dismiss.

(sections deleted)

A. The Contracts’ Modifications Are an End-Run Around CICA

CICA requires that, except as otherwise provided by law, agencies procuring goods or services must use “full and open competition through the use of competitive procedures in accordance with the requirements of this division and the Federal Acquisition Regulation.” 41 U.S.C. § 3301(a)(1) (2012). CICA itself provides a number of exceptions to the full and open competition requirement in section 3304. As detailed above, the VA availed itself of subsection (a), which allows an agency to select a single source and buy from that source when the agency determines that the goods or services needed “are available from only one responsible source and no other type of property or services will satisfy the needs of the executive agency.” Id. § 3304(a)(1). The agency found that only the four PVs were in a position to quickly identify sources and prices for the items the VA wanted on the Master List. It justified the sole-source award of the modifications for that reason. The inquiry does not end there, however.

Neither we nor the plaintiffs question the government’s conclusion that the PVs are well, and perhaps critically, positioned to rapidly populate the VA’s national formulary for medical supplies. The contract modifications may indeed be justified as sole-source changes in scope, but CICA applies to the purchase of all goods and services unless otherwise exempted by law. Plaintiffs’ point is that their loss is at the supplier level, the level of the sales of the individual items to the government. Neither the government nor the intervenors answer this question other than to suggest that this problem preexisted the change and thus this challenge comes too late.

Defendant points to the fact that both pre and post-modification the actual sale of supply items to the government was and is between the PVs and the VA. Although competition or competition substitutes were used prior to the modification, avers defendant, it was always and still is the PVs selling to the VA. Plaintiffs are thus too late, urges the government and intervenors.

We agree with plaintiffs, however, that this fact is not dispositive because a new non-trivial competitive harm results from the modifications, which is the loss of competition. Prior to the modifications, VA solicited and entered into purchase agreements with vendors or justified sole-source arrangements (as the case most frequently was). Competition was had and the right to protest attached even when the vendor was a sole-source selection. The subsequent purchase at those prices from those vendors by the PVs and then resale to VA does not change the fact that the government competed or otherwise lawfully avoided competition for each item placed and then purchased off the Master List. The intermediary step provided by the PVs makes no difference.

After the modification, the VA has foresworn competition as unwieldy and impractical. By outsourcing the selection of suppliers to the PVs entirely, the government has avoided the multitude of legal and regulatory requirements appurtenant to a federal procurement. The change is obvious. Plaintiffs are not in the same situation today as they were when the MSPV-NG contracts were competed and originally awarded. Thus neither waiver nor laches applies. CICA has been violated unless the J&A provides legal cover for the lack of competition. As we explain next, it does not.

B. The J&A Does Not Justify the Lack of Competition at the Supply Level

As plaintiffs rightly point out, the J&A is silent as to the availability of suppliers for the many thousands of items that have been and still will be placed on the Master List. 30,000 new items have been placed on the formulary since this protest was filed. The record does not indicate whether any items have been ordered from those 30,000, but regardless, when they are, those sales will not have been competed. The law requires a justification and approval for that purchase without competition. It is no answer to hide behind the PVs’ role in adding to the list of items in the formulary. That aspect of the modification is inseparable from the associated work of picking vendors. By eliminating the price and vendor competitions or competition substitutes, the VA has no-doubt bought itself significant expediency. But it has not bought itself legal cover.

The J&A is silent as to the purchase of any particular item on the now much-expanded list. Neither the government nor the intervenors have provided a lawful reason why CICA is satisfied by this arrangement. Section 3304(a) allows agencies to forego full competition when they conclude and explain that only one source can provide what they are purchasing, but that is a far different circumstance than that provided by this case. We understand the attraction; expediency is undoubtedly key when it comes to purchasing medical supplies, but Congress has made no such particular exception to the competition mandate. We are thus left to conclude that the law has been violated.

C. The Modifications Ignore the VA’s Rule of Two Requirement

Plaintiffs’ second merit-based challenge regards the VA’s unique requirement that it must consider whether a service-disabled veteran-owned small business (“SDVOSB”) or, failing that, veteran-owned small business (“VOSB”) could provide the goods it wishes to procure. If two or more such entities could provide the items, the VA is required by law to attempt to buy from those sources by running a competition limited to only those concerns. This is the “rule of two.” 38 U.S.C. § 8127(d) (2012); Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1976-77 (2016). The four plaintiffs are SDVOSB companies and argue that, not only does the new PV-provided sourcing violate CICA’s competition requirements, but it also robs them of their entitlement to a competition limited to only them and other similarly situated VOSBs.

The Supreme Court has left no doubt that the Veterans Benefits, Health Care, and Information Technology Act of 2006, codified at sections 8127 and 8128 of title 38, requires that the “rule of two” be applied to every purchase possible made by the VA with limited exceptions. Kingdomware, 136 S. Ct at 1977. Plaintiffs allege that they stand ready to provide many of the goods needed by the government here, and there are more than two of them. According to Kingdomware, VA must consider awarding to them. The PVs, on the other hand, as private businesses, are not under such constraints and thus plaintiffs are harmed. We agree.

The government again provides no legal cover for this arrangement. Defendant and intervenors instead suggest that the PVs will be bound by their small-business participation plans, which will protect the rights of VOSBs, and thus the court should be unconcerned. We are not so sanguine. There is no legal requirement that the PVs consider whether two VOSBs can provide an item that they source for the Master List nor is there any requirement that they limit their consideration to such businesses. Further, plaintiffs would not have any right to challenge the selection of non-VOSBs by the PVs should they ignore this requirement. The government might attempt to hold the intervenors’ feet to the fire in this regard, as a contract administration issue, but plaintiffs have lost valuable procurement rights in the process. The PVs are private purchasers untethered to the FAR, VA regulations, and procurement statutes.

The bevy of protests filed in this court and at GAO since the Supreme Court’s decision in Kingdomware are evidence enough that these requirements are strict and difficult to follow in the mean and no doubt doubly so when the law requires that they be applied without fail or exception. And yet the law remains. Only Congress has the kill switch. Plaintiffs are correct that 38 U.S.C. § 8127 is violated by the VA’s outsourcing of its selection of supply vendors.

(sections deleted)

CONCLUSION

In this case, the VA is hamstrung by the myriad requirements and preferences layered onto the process of federal purchasing, and especially the preferences unique to the VA. The complaint here is exhibit A. Plaintiffs are correct that Congress has granted to them and bidders generally a variety of rights when it comes to selling things to the VA. It is for Congress and the voters to weigh the merits of the benefits and burdens imposed by such a labyrinth of legal and regulatory hoops and hurdles. This case presents a circumstance in which the VA could not timely clear the hurdles. The result is danger to veterans’ healthcare and increased cost to the government. The agency found a detour around the obstacles and tried to legally justify it. It could not do so, but the court is in no position to restore the status quo ante by enjoining a process aimed at protecting and improving the management of the VA’s supply chain for medical and surgical supplies. The equities do not favor the plaintiffs: the harm to the plaintiffs is somewhat speculative, while the harm to the agency is real and potentially grave. The public interest favors avoiding those harms. The protest must therefore be denied.  (Electra-Med, et al., v. U. S. and American Medical Depot, et al., No. 18-927C, October 3, 2018.)

Plaintiff’s first argument, that the contract modifications lacked a rational basis, rests on plaintiff’s belief that OSG never intended to supply a conforming product under the contracts, and that DLA’s acceptance of nonconforming products as part of the modifications effectively eliminated any competition. In its reply brief it argues that the contract modification brought the contracts outside the scope of the solicitation, and therefore, under CICA, a new procurement was required in order to preserve the competitive bidding process. See 10 U.S.C. § 2304 (a)(1)(A) (2011) (“[T]he head of an Agency in conducting a procurement for property or services . . . shall obtain full and open competition through the use of competitive procedures . . . .”); CCL, Inc. v. United States, 39 Fed. Cl. 780, 791 (1997) (explaining that CICA’s requirements “cannot be avoided by using the device of contract modification”).

 As support for its position that OSG never intended to supply conforming products, plaintiff relies on an April 15, 2015 letter from OSG’s President and CEO to DLA setting out an analysis of the misunderstanding between the parties. See CT(DLA)-367-70. This letter suggests that after OSG was approved as a source, it discovered some risks regarding the availability of M-ATV raw materials, which would lead it unable to produce composition [ ]. As a result, OSG began testing other compositions of the formula for the transparent armor, and developed a different composition, [ ]. Plaintiff does not accept the truth of OSG’s responses to the Army, and suggests that OSG had always intended to supply composition [ ], in violation of the MATV Solicitations, which specified the correct NSNs and which explicitly disallowed substitution. Schott argues that it was unreasonable and prejudicial to it to allow OSG to rely on a supposed alleged latent ambiguity to deliver substitute products because it was inconsistent with the terms of the original solicitation and thus precluded Schott from competing.

Defendant recognizes in its response that there were serious errors with OSG’s performance under the contracts, but maintains that these issues are not the proper subject for a bid protest. It argues that Schott cannot rest a bid protest on what amounts to a matter of post-award contract performance, something beyond the reach of the court’s bid protest jurisdiction under 28 U.S.C. § 1491(b). Relying on the affidavit of DLA’s Contracting Officer,[ ], defendant contends that the award to OSG cannot be faulted, because it proposed to supply the exact product. It was only after the awards were made and well after performance had commenced that the government became aware that OSG was providing nonconforming products.

 Defendant also argues that Schott’s argument is factually unfounded, in that the Agency rejected OSG’s interpretation of the contract. It never knowingly accepted non-conforming product and merely devised a solution for a serious problem after it was discovered. Because a majority of the deliveries had been accepted and paid for by the time DLA discovered that they were nonconforming, the agency’s rights were governed by FAR 52.246-2(k) and (l). This regulation stipulates that the government’s acceptance of an item “shall be conclusive, except for latent defects, fraud, [or] gross mistakes amounting to fraud.” FAR 52.246-2(k) (2014). The regulation further provides that following non-conclusive acceptance, the government may elect to have the awardee “repay such portion of the contract as is equitable under the circumstances if the Contracting Officer elects not to require correction or replacement,” FAR 52.246-2(l) (2014), which defendant contends is exactly what the Agency did. We agree with defendant. The agency never endorsed the manner in which OSG proceeded with these contracts and instead devised a practical solution to a problem of OSG’s making. Schott’s CICA rights, in other words, were not compromised by anything the agency did.

 We note, moreover, that in exercising jurisdiction over a bid protest, “the courts shall give due regard to the interests of national defense and national security and the need for expeditious resolution of the action.” 28 U.S.C. § 1491(b)(3). The [ ] affidavit makes clear the agency’s concern that the military not be delayed in getting armored windows for its vehicle for use in a combat zone. Returning the parties to the position they were in prior to contracting would require pulling the M-ATV fleet out of service until replacement transparent armor windows could be obtained through a new procurement. Id.

We do not mean to suggest that circumstances could not arise in which a contract modification might depart materially from the contract’s original scope so as to trigger this court’s bid protest jurisdiction. See, e.g., Glob. Computer Enter.’s, Inc. v. United States, 88 Fed. Cl. 359, 452 (2009); Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. 98, 108 (2004). In this case, however, given the passage of time, the security concerns involved, and the agency’s insistence on compensation for non-performance, we are persuaded that concerns reflected in other cases are not triggered here.  (Schott Government Services, LLC v. U. S. and Oran Safety Glass, Nos. 15-616C, 15-617C, 15-618C, 15-619C, 15-620C, September 17, 2015)  (pdf)

A. Evolving Missions Are Anticipated in the Solicitation

The court’s first task is to determine whether the scope of the Solicitation, as described by the Solicitation’s terms and its Changes clause, would have led bidders to expect that the Afghan airlift services disputed here could reasonably be included within the State Contract. See AT & T, 1 F.3d at 1205 (“A modification generally falls within the scope of the original procurement if potential bidders would have expected it to fall within the contract’s changes clause.”). Plaintiff advises that in solicitation interpretation, as in contract interpretation, the court must give meaning to all of a solicitation’s terms. Pl.’s Mot. at 49-50. The court agrees with plaintiff’s view of contract interpretation. Even more apt advice comes from the Federal Circuit, however, which suggests that in bid protests alleging that a cardinal change has occurred, the court must focus on the “the [challenged contract] modification in the context of the contract as a whole.” AT & T, 1 F.3d at 1207. It is necessary, therefore, to begin with an analysis of the context of services described in the Solicitation.

1. The Solicitation’s Context

Here, the Solicitation noted that contract services “are currently performed in Colombia, Bolivia, Peru, and Pakistan, and are anticipated in Mexico and Afghanistan in the near future.” AR at 104. The court observes, first, that there is no limit to the number of countries that could be served, or to the specific countries that could be served under the State Contract. Thus, unless each of the country-specific tasks enumerated in the Solicitation are identical, a bidder would have realized that services to be performed in newly-added countries might well be different from those provided in Bolivia or Peru, for example.

Upon a close reading of the Solicitation, there are, as it happens, significant differences in the types of services provided in Colombia or Pakistan, for example, from those provided in Bolivia and Peru. Of particular interest here, in Colombia the awardee would be responsible for “Air Assault/Aerial Transportation of Personnel and Cargo.” AR at 187. Two separate provisions of the Solicitation, specific to Colombia in this regard, are relevant:

The Contractor routinely supports multiple-ship helicopter air assault operations, which involves troop transport helicopters and armed escort helicopters. The Contractor shall maintain the capability to perform special mission tasks to include but not limited to fast rope and rappel operations. At least twice per month, the Contractor will support air assault movement of one counter-narcotics battalion (up to 500 personnel strength) and other units.

. . .

The Contractor will be required to transport cargo and personnel to meet mission support requirements in country. Currently, the average monthly movement is 1,500 passengers and 120,000 pounds of cargo. This support is currently provided with the C-27 and supplemented by leased aircraft.

Id. It would be reasonable to interpret the first cited provision as describing Air Assault and the second cited provision as describing Aerial Transportation of Personnel and Cargo; it is also reasonable to view or interpret these two provisions as describing similar but not identical aviation support services under the State Contract.

The operations in Bolivia and Peru are not described as including Air Assault services. Furthermore, in Bolivia, no country-specific provision is included for Aerial Transportation of Personnel and Cargo. See AR at 194. In Peru, the Aerial Transportation of Personnel and Cargo country-specific provision states that

The Contractor will be required to transport an average of 30 passengers and up to 6000 pounds of cargo (or a combination thereof) at least three times a week between Lima [and contract performance locations].

Id. at 200. Because operations in Colombia, Bolivia and Peru all differ in the type of Aerial Transportation of Personnel and Cargo services to be provided, a bidder on the State Contract could not assume that aviation support services in a newly-added country would be the same as those described in the Solicitation for these three countries. In the court’s view, a bidder would have assumed that different types of aviation support services could well be required under the contract in Afghanistan.

The court turns its focus to Pakistan. The Solicitation includes a markedly different description of missions to be performed in Pakistan, as opposed to the missions described for the operations in Bolivia and Peru. Here are perhaps the most relevant Pakistan-specific terms of the Solicitation, in the “Mission Overview” description:

The Bureau for International Narcotics and Law Enforcement Affairs, Office of Aviation (INL/A) is primarily responsible to support the U.S Embassy Country Team and NAS, Islamabad to assist the Government of Pakistan (GOP) in the Border Security Project. Under the auspices of the US Country Team, the Narcotics Affairs Section (NAS) is primarily responsible to assist host nation government to gain and maintain control of the Pakistan-Afghanistan border through the surveillance and interdiction of terrorists, narcotics, arms and other unlawful cross-border activities. INL/A supports this mission with the Huey IIs and C-208 Cessna Caravans.

AR at 203.

In Pakistan, the State Contract’s primary focus is to assist Pakistan “to gain and maintain control of the Pakistan-Afghanistan border.” Id. In Bolivia, in contrast, the “Mission Overview” states that:

The Bureau for International Narcotics and Law Enforcement Affairs, Office of Aviation (INL/A) is primarily responsible to support the U.S Embassy Country Team and NAS, La Paz to assist the Government of Bolivia (GOB) to curtail the supply of illegal drugs from Bolivia to the United States. INL/A performs this mission through the Bolivia Air Program in support of the NAS.

Id. at 192. The operations in Bolivia differ in many respects from the operations in Pakistan. Similarly, for Peru the “Mission Overview” states that the primary focus of the State Contract will be the “curtailment of the supply of illegal drugs from Peru into the United States.” Id. at 198. Reasonable bidders would assume from these country-specific descriptions of contract services that the missions to be accomplished in Afghanistan would differ from those in Bolivia and Peru, just as the missions to be accomplished in Pakistan are different from those in Bolivia and Peru.

As the court reads the Solicitation, aviation support services in each country served, and the country-specific primary and secondary missions of INL/A, would differ. This context is crucial to the determination of the scope of the State Contract. The court now turns to the parties’ dispute as to the scope of the Solicitation.

2. The Solicitation’s Scope

Plaintiff and defendant fundamentally disagree as to the scope of the Solicitation. To summarize plaintiff’s argument, five main points appear to provide the foundation upon which plaintiff’s reading of the Solicitation rests. First, the Solicitation must be narrowly construed as seeking, at bottom, a counter-narcotics contractor for counter-narcotics missions. See, e.g., Pl.’s Mot. at 4 n.2 (suggesting that the primary and secondary missions noted in the Solicitation could be referenced by the term “counternarcotics mission”); 46 (“The Counter-Narcotics Solicitation was precisely that: a solicitation for aviation services in support of designated counternarcotics missions.”). Second, all references in the Solicitation to flexibility, additional tasks or evolving missions must be construed to include a significant limitation – that all services added to the State Contract would necessarily have a counter-narcotics focus. See id. at 49 (arguing that the Solicitation’s reference to flexibility must be interpreted as stating that “flexibility must be exercised within the confines of the Counternarcotics Solicitation and does not authorize INL/A to acquire wholesale new airlift requirements materially different from the services solicited in the original competion”); Pl.’s Reply at 9 (arguing that “broad-based air carriage of personnel or cargo . . . unrelated to counternarcotics activities was beyond the scope of the contract’s counternarcotics support mission”). Third, the Solicitation’s lack of a broad catch-all category of services, or reference to any specific passenger-related services such as ticketing or reservations, would have led offerors to assume that passenger service was beyond the scope of the State Contract. Pl.’s Mot. at 47-48. Fourth, aerial transportation of personnel and cargo, a category of services described in the Solicitation, cannot be interpreted to include airlift services that do not have an emergency or military nature, or that do not have a counter-narcotics purpose. Id.; Pl.’s Reply at 14-15. Fifth, the Solicitation must be viewed as imbued with a strong nationalization mission, where the contractor would provide training to host country nationals in furtherance of achieving a transition to counter-narcotic aviation support services being provided by the host countries and not by the United States. Pl.’s Mot. at 51- 52; Pl.’s Reply at 9-10, 14. Because DynCorp’s performance of airlift services in Afghanistan includes no training component, plaintiff argues, these services must be beyond the expectations of offerors responding to a Solicitation characterized by a strong nationalization mission. Pl.’s Mot. at 51-52.

Defendant, on the other hand, views the Solicitation as denoting a procurement for a broad range of aviation support services. Defendant points to language listing a multitude of services to be provided under the State Contract, such as this introductory statement of technical requirements:

This document provides the technical requirements for the Bureau for International Narcotics and Law Enforcement Affairs, Office of Aviation (INL/A) Contractor Logistical Support (CLS) services for eradication and interdiction of illicit drugs, training of Contractor and host nation personnel, movement of personnel and equipment, reconnaissance, search and rescue, medical evacuation and ferrying of aircraft.

AR at 168. The government also points to terms of the Solicitation that are expansive and broad, rather than narrow and specific. See Def.’s Mot. at 19. Finally, defendant argues that the mention of “‘extremely hostile’” and “‘very austere’” conditions in the Solicitation would have led offerors to presume that contract missions would evolve as conditions required. Id. at 20 (quoting AR at 168). Although both plaintiff’s and defendant’s positions reflect, at times, somewhat extreme interpretations of the Solicitation, the court cannot disagree with the government’s ultimate conclusion that aerial transportation of passengers and cargo, at least in the context of protecting the interests of the United States in Afghanistan, is within the scope of the Solicitation. First, as noted supra, different types of aerial transportation are required in the country-specific portions of the Solicitation, and different missions are required to be accomplished in different nations. Second, there is enough flexibility in the Solicitation’s terms to support aerial transportation of passengers and cargo in hostile environments. See, e.g., AR at 166 (“Secondary missions include pipeline security, border patrol, and other related activities.”); id. (“The anticipated annual contract value is approximately $170M, but could vary greatly depending upon how the mission evolves over the performance period.”); id. at 167 (“Flexibility: Due to the evolving nature of the mission, the contractor must be able to react to changing conditions quickly, with minimal impact to steady state operations.”); id. at 169 (“The Department of State anticipates expansion of the program, to include other aircraft types and or quantity, and additional missions (counter-narcotics and expanded authorities) into other countries.”). Third, the court finds that the provisions in the Solicitation governing Aerial Transportation of Personnel and Cargo, alongside reference to other operations of considerable variety, provide notice to reasonable offerors that airlift support services in Afghanistan are contemplated under the terms and the Changes clause of the Solicitation.

Plaintiff argues that “references” to the Aerial Transportation category of services in the Solicitation are determinative of the expectations of offerors as to airlift support services:

The issue before the Court, then, is whether the references in the Counternarcotics Solicitation to “aerial transportation of personnel and cargo” would have sufficiently alerted prospective offerors to the possibility that the government would use the resulting contract as a vehicle to obtain from its counternarcotics contractor full-scale commercial-equivalent passenger and cargo services, including an online ticketing/reservation system, under which the contractor would serve all the in-country air transportation needs of diplomacy and development personnel, regardless of any connection to the specific counternarcotics missions identified in the Solicitation.

Pl.’s Reply at 14 (emphasis removed). The court does not agree with plaintiff’s framing of the decisive issue for the merits of this protest. It is the Solicitation as a whole, and especially the comparison of the context of the Solicitation with the contract modification challenged here, that must be weighed by the court. See AT & T, 1 F.3d at 1207. The Solicitation, aside from its important references to Aerial Transportation of Personnel and Cargo, exhibited variety in the description of the operations in Colombia, Bolivia, Peru, and Pakistan, and significant references to flexibility and anticipated changes. Thus, although the Aerial Transportation category of services is indeed important in the court’s analysis, the court must construe the Solicitation as a whole.

The court has reviewed the relevant sections of the Solicitation and cannot agree with plaintiff that secure air transportation of passengers and cargo, in the hostile and austere conditions found in countries such as Afghanistan, was not included within the Solicitation’s scope. The Technical Requirements Document (TRD) describes “Aerial Transportation of Personnel and Cargo,” in relevant part, in this manner:

Aerial transportation is defined as the movement of personnel and cargo via rotary and/or fixed wing aircraft. . . . The Contractor shall provide mission capable aircraft and mission qualified crews to perform the transportation mission.

AR at 171. Other operations, or missions,16 include search and rescue, medical evacuations, and VIP missions. AR at 171-72. As an introduction to these operations, the Solicitation states that

[t]he types of missions the Contractor will be required to perform are listed below. We anticipate that mission profiles may change and the Contractor shall be capable of adapting to these changes.

AR at 170. The court has considered: (1) the performance period of more than ten years for the State Contract; (2) the types of operations specified in the TRD; (3) the variety of missions described in the Solicitation; (4) the differences in the country-specific portions of the Solicitation; (5) the multiple and prominent references to flexibility, adaptation and change; and, (6) the unique challenges of protecting the interests of the United States in Afghanistan. In view of the context of the State Contract set forth in the Solicitation, the court finds that a reasonable offeror would have anticipated that in a country such as Afghanistan, secure air transportation of passengers and cargo would be within the scope of the State Contract.

There has been, therefore, no cardinal change effected by the addition of airlift support services in Afghanistan to the State Contract. Thus, even if plaintiff’s bid protest were not barred by laches [The court finds that ACS unreasonably delayed its protest and that the government was economically prejudiced as a result. Plaintiff’s bid protest is barred by laches, and must be dismissed on these grounds.], the protest filed by ACS has not succeeded on the merits. Because plaintiff has not shown that a cardinal change of the State Contract occurred, the court need not consider whether ACS was prejudiced by Mod 12 and the addition of airlift support services in Afghanistan to the State Contract. See Bannum II, 404 F.3d at 1351 (stating that the prejudice inquiry is triggered by the plaintiff’s success on the merits of its protest).  (Aircraft Charter Solutions, Inc. v. U. S. and DynCorp International LLC, No. 13-9C, March 8, 2013)  (pdf)

CICA generally directs executive agencies, “in conducting a procurement for property or services” to “obtain full and open competition though the use of competitive procedures.” 41 U.S.C. § 3301(a)(1) (Supp. V 2011) (formerly 41 U.S.C. § 253(a)(1)(A) (2006)). As stated by the United States Court of Appeals for the Federal Circuit:

CICA, however, does not prevent modification of a contract by requiring a new bid procedure for every change. Rather only modifications outside  the scope of the original competed contract fall under the statutory competition requirement. CICA sets forth no standard for determining when modification of an existing contract requires a new competition or falls within the scope of the original competitive procurement.

AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1204-05 (Fed. Cir.) (footnote removed), reh’g denied, en banc suggestion declined (Fed. Cir.), suggestion for reh’g declined (Fed. Cir. 1993). Contract modification for changes beyond the scope of the original procurement, however, should not be utilized as a way to avoid competition. See HDM Corp. v. United States, 69 Fed. Cl. 243, 253 (2005) (citation omitted); CESC Plaza Ltd. P’ship v. United States, 52 Fed. Cl. 91, 93 (2002). Modifying an existing contract so that it materially departs from the scope of the original procurement violates CICA by preventing potential bidders from participating in or competing for what should be a new procurement. See HDM Corp. v. United States, 69 Fed. Cl. at 253; see also AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205; VMC Behavioral Healthcare Servs. v. United States, 50 Fed. Cl. 328, 332 (2001). A modification that is within the scope of the original procurement “does not raise a viable protest under [28 U.S.C.] § 1491(b)(1).” See Distrib. Solutions, Inc. v. United States, 539 F.3d at 1346; See also Ceradyne, Inc. v. United States, 103 Fed. Cl. 1, 12-13 (2012) (citing AT & T Commc’ns, Inc. v. Wiltel, 1 F.3d at 1204-05) (“If the modification materially departs from the scope, then a new competition may be required and jurisdiction will stand. . . . If the modification was, however, within the scope of the solicitation, the protest must be dismissed.”); RhinoCorps Ltd. Co. v. United States, 87 Fed. Cl. 481, 489 (2009) (citing AT & T Commc’ns, Inc. v. Wiltel, 1 F.3d at 1205) (“[T]o sustain a bid protest stemming from a change or modification to a contract, the protestor must allege facts that establish that the modification falls outside the scope of the original contract, thereby triggering the statutory competition requirement. If any change made to a procurement is within the scope of work originally contemplated, no competition is required, and jurisdiction is not present.”).

The United States Court of Appeals for the Federal Circuit, accordingly, has recognized that modifications of an existing contract are permissible to procure products or services, as long as the modification is “within the scope of the original competitive procurement.” See AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205; see also Krygoski Constr. Co. v. United States, 94 F.3d 1537, 1543 (Fed. Cir.) (citation omitted), reh’g denied, en banc suggestion declined (Fed. Cir. 1996), cert. denied, 520 U.S. 1210 (1997) (relying on AT & T Communications, Inc. v. Wiltel, Inc. in its analysis of a necessary change to a contract’s scope); Golden Mfg. Co., Inc. v. United States, No. 12-317C, 2012 WL 4479422, at *10 (Fed. Cl. Oct. 1, 2012) (relying on AT & T Communications, Inc. v. Wiltel, Inc. when discussing an amendment to a contract solicitation); Solute Consulting v. United States, 103 Fed. Cl. 783, 792 (2012) (applying AT & T Communications, Inc. v. Wiltel, Inc. to the issue of the in-scope contract modification); Ceradyne, Inc. v. United States, 103 Fed. Cl. at 12 (analyzing AT & T Communications, Inc. v. Wiltel, Inc. to determine whether the contract modification was within the scope of the original procurement); RN Expertise, Inc. v. United States, 97 Fed. Cl. 460, 473 (using AT & T Communications, Inc. v. Wiltel, Inc. as a basis for the court’s analysis of the contract modification), reconsideration denied (2011).

Because CICA itself does not define whether a modification of an existing contract is “within the scope of the original competitive procurement,” the Federal Circuit has relied on the “cardinal change” doctrine by analogy as the test to ascertain whether the modification is in-scope or violates the competition requirements of CICA. See AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205 (“The cardinal change doctrine asks whether a modification exceeds the scope of the contract’s changes clause; this case asks whether the modification is within the scope of the competition conducted to achieve the original contract. In application, these questions overlap.”); see also Ceradyne, Inc. v. United States, 103 Fed. Cl. at 12 n.9; Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. 98, 106 (2004). “‘[A] cardinal change . . . occurs when the government effects an alteration in the work so drastic that it effectively requires the contractor to perform duties materially different from those originally bargained for.’” AT & T Commc’ns, Inc. v. Wiltel, 1 F.3d at 1205 (quoting Allied Materials & Equip. Co. v. United States, 215 Ct. Cl. 406, 409, 569 F.2d 562, 563-64 (1978)); see also Krygoski Constr. Co. v. United States, 94 F.3d at 1543. “Just as the cardinal change doctrine prohibits an agency from compelling a contractor to perform contract terms that are not within the scope of the original bargain, the CICA prevents an agency from modifying a contract to such an extent that the modified contract is ‘materially different’ from the contract for which a competition was held.” GraphicData, LLC v. United States, 37 Fed. Cl. 771, 781 (1997) (citing AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205); see also Mgmt. Solutions & Sys., Inc. v. United States, 75 Fed. Cl. 820, 830 (2007); cf. Solute Consulting v. United States 103 Fed. Cl. at 793 (discussing the merits of the GAO’s application of the “material difference standard” to multiple-award contracts and its conclusion that “‘[t]he analysis of whether a task order is outside the scope of a multiple-award contract is the same as the analysis of whether a contract modification is outside the scope of a single-award contract’” (alteration in original) (quoting DynCorp Int’l LLC, B-402349, 2010 CPD ¶ 59, 2010 WL 893517, at *4 (Comp. Gen. Mar. 15, 2010))).

In determining whether a contract, as modified, is “materially different,” a court should “first focus on the modification in the context of the original procurement” and then determine “the expectations of potential offerors.” See RN Expertise, Inc. v. United States, 97 Fed. Cl. at 473-74 (citing AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205, 1207). The analysis of whether a contract modification “materially departs from the scope of the original procurement. . . . focuses on the scope of the entire original procurement in comparison to the scope of the contract as modified.” AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205. “Thus a broad original competition may validate a broader range of later modifications without further bid procedures.” Id. at 1205. To determine whether a modification is within the scope of the original procurement, a court should consider whether the modification “substantially changes ‘the type of work, performance period, and costs as between the original contract and the modified contract.’” CESC Plaza Ltd. P’ship v. United States, 52 Fed. Cl. at 93 (quoting CCL, Inc. v. United States, 39 Fed. Cl. 780, 791 (1997)); see also Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. at 106 (noting that the question of whether “the contract, as modified, is materially different from the contract that was originally competed . . . turns on whether the original contract, as modified, calls for ‘essentially the same performance’” (quoting Exec. Bus. Media, Inc. v. United States Dep’t of Defense, 3 F.3d 759, 763 n.3 (4th Cir. 1993))); Northrop Grumman Corp. v. United States, 50 Fed. Cl. 443, 466 (2001) (describing factors that courts have considered under the cardinal change doctrine, including “[c]hanges in the type of product or service that were not anticipated due to their lack of resemblance to the original procurement,” “[s]ignificant addition or subtraction of the quantity of work,” and “[a]dditional time spent on performance of a contract . . . when such time is extended in order to add significantly more quantity or new requirements to the contract.”).

“Because every situation in which parties enter into a contractual relationship is unique, there is no definitive test for determining whether a change is beyond the scope of a particular contract.” Keeter Trading Co. v. United States, 79 Fed. Cl. 243, 260 (2007) (citation omitted); see also Rumsfeld v. Freedom NY, Inc., 329 F.3d 1320, 1332 (Fed. Cir.), reh’g and reh’g en banc denied, 346 F.3d 1359 (Fed. Cir. 2003), cert. denied, 541 U.S. 987 (2004) (“The finding of a cardinal change is ‘principally a question of fact’” (quoting Allied Materials & Equip. Co. v. United States, 215 Ct. Cl. at 411, 569 F.2d at 565)); Golden Mfg. Co., Inc. v. United States, 2012 WL 4479422, at *10 (“In emphasizing that there is no mechanical or arithmetical answer, we have repeated that (t)he number of changes is not, in and of itself, the test[.]” (alterations in original) (quoting Air-A-Plane Corp. v. United States, 187 Ct. Cl. 269, 276, 408 F.2d 1030, 1033 (1969))); ThermoCor, Inc. v. United States, 35 Fed. Cl. 480, 490 (1996) (“‘Each case must be analyzed on its own facts and in light of its own circumstances, giving just consideration to the magnitude and quality of the changes ordered and their cumulative effect upon the project as a whole.’” (quoting Wunderlich Contracting Co. v. United States, 173 Ct. Cl. 180, 194, 351 F.2d 956, 966 (1965))).

In addition, as indicated by the Federal Circuit, a factor to consider when determining the scope of the original competition is “‘whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes during the course of the contract that in fact occurred, or whether the modification is of a nature which potential offerors would reasonably have anticipated.’” AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1207 (quoting Neil R. Gross & Co., Inc., B-237434, 90-1 CPD ¶ 212, 1990 WL 269546, at *294 (Comp. Gen. Feb. 23, 1990) (citation omitted)); see also RN Expertise, Inc. v. United States, 97 Fed. Cl. at 474; Chapman Law Firm Co. v. United States, 81 Fed. Cl. 323, 327 (2008). “A modification generally falls within the scope of the original procurement if potential bidders would have expected it to fall within the contract’s changes clause.” AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205. Whether potential bidders would have anticipated a particular modification is judged under an objective standard, see Global Computer Enters., Inc. v. United States, 88 Fed. Cl. 52, 56 (2009); CESC Plaza Ltd. P’ship v. United States, 52 Fed. Cl. at 93 (citing CCL, Inc. v. United States, 39 Fed. Cl. at 791), and “depends heavily on the language of the solicitation.” See Northrop Grumman Corp. v. United States, 50 Fed. Cl. at 466 (citing John Cibinic, Jr. & Ralph C. Nash, Jr., Administration of Government Contracts 389 (3d ed. 1995)). If a court ultimately finds a modification “to be outside the reasonable expectations of the bidders, the government must show that it adequately advised the bidders that such a change might occur.” Id. at 465 (citation omitted).

(sections deleted)

Although plaintiff argues that the September 22, 2011 request for additional items was a “competitive negotiated procurement,” the administrative record does not support plaintiff’s position. The title of the September 22, 2011 request for additional items stated that it was intended to add items to the September 10, 2009 solicitation, and specifically identified that solicitation by number: “Addition of Items to Solicitation SPM1C1-08-R-0153 for Coats, All-Weather, Various, Men and Women, Indefinite Delivery Type Contract.” Furthermore, the September 22, 2011 request invoked the Add/Delete Clause included in the 2009 solicitation as the basis for the manner of procurement of the new items, and explained that DLA intended to add Items 0006 and 0007 to either Bluewater’s or American Apparel’s contract. Using the procedures described in the referenced Add/Delete Clause, “bilateral modification with negotiated prices,” the agency asked both contractors to submit price proposals for the additional items. The defendant explained at the oral argument, “the United States had a contractual right to modify this contract without using nonprice factors or CICA requirements,” because “competition requirements were addressed in 2009 when these contracts were originally awarded.” Both Bluewater and American Apparel were selected after the 2009 and 2010 full and open competition, with the agency considering the technical evaluations of the factors described above in addition to price for the allweather coats for each of the offerors, including American Apparel and Bluewater. The all-weather coat contracts awarded to Bluewater and American Apparel on December 22, 2010 were “similar in kind and complexity” to the items to be added to the procurement “on a post-award basis via Add/Delete Clause” to contractors able to supply additional coats.

The objective of the September 10, 2009 solicitation was defined as the procurement of “Coats, All Weather, Various, Mens and Womens.” The items solicited, at the time, were Item 0001, “PGC 02850 Coat, All Weather, Marine Corp Men’s,” Item 0002, “PGC 02851 Coat, All Weather, Marine Corp Women’s,” Item 0003, “PGC 02110 Coat, All Weather, Army Women’s,” Item 0004, “PCG 01940 Coat, All Weather, Navy Men’s,” and Item 0005, “PGC 01908 Coat, All Weather, Navy Women’s.” The agency also indicated, in its August 10, 2009 pre-solicitation Initial Procurement Synopsis that three additional all-weather coats “may be added on a post-award basis via Add/Delete Clause,” listing them specifically as “PGC 02111 Army, Men’s, Coat, All Weather,” “PGC 01958 Air Force Men’s, Coat, All Weather,” and “PGC 01959 Air Force Womens, Coat, All Weather.”

The Add/Delete Clause included in the September 10, 2009 solicitation and incorporated by reference into Bluewater’s contract stated, in pertinent part:

(b) New items may be added to the contract through bilateral modification with negotiated prices. All new requirements are subject to synopsis prior to addition to the contract.

The Add/Delete Clause appears on page 56 of the original September 10, 2009 solicitation, under the section “52.216-9006 Addition/Deletion of Items,” including the following:

As prescribed in 16.506(90), insert the following clause:

ADDITION/DELETIONS OF ITEMS (AUG 2005) – DLAD.

* * *

b) New items may be added to the contract through bilateral modification with negotiated prices. All new requirements are subject to synopsis prior to addition to the contract.

Plaintiff argues that in the context of the entire solicitation, including the terms of the September 10, 2009 solicitation for the Items 0001 through 0005, as well as DLAD 16.506(90), application of the Add/Delete Clause, the process of addition or deletion of “items covered by the contract,” must comply with competition requirements. Plaintiff maintains that the phrase contained in DLAD 16.506(90)(1) “[c]ompetition requirements must be addressed before new items may be added to a contract” supports its case. Defendant, on the other hand, asserts that “to the extent the language [of the DLAD 16.506(90)] applied to the Addition / Deletion clause,” in-scope modifications are not subject to CICA requirements.

The Add/Delete Clause was invoked in the context of the August 10, 2009, presolicitation Initial Procurement Synopsis, issued by the agency, which announced the agency’s intention to issue the solicitation and indicated that three more coats potentially could be added to the procurement “on a post award basis:” Army Men’s, Air Force Men’s and Air Force Women’s all-weather coats.

The Clause includes the following language:

In accordance with DLAD Clause 52.216-9006, Addition/Deletion of Items, found on page 56 of the subject Solicitation SPM1C1-08-R-0153, the attached Items 0006 and 0007 for the Air Force/Coast Guard Men and Women All-Weather Coats are being solicited for addition to either the Universal All Weather Coat Contract SPM1C1-10-D-1099 or SPM1C1-10- D-1100.

Offers will be evaluated based on price only . . . . All other terms and conditions of the offeror’s contract, Contract SPM1C1-10-D-1009 [sic] and/or SPM1C1-10-D-1100 remain in effect and apply to the addition of items.

The September 22, 2011 corrected request for additional items not only referenced the Add/Delete clause in the 2009 solicitation, but also indicated that “[a]ll other terms and conditions of the offeror’s contract . . . remain in effect and apply to the additional items.” The September 22, 2011 request included technical data for the new coats and stated that the coats were “considered to be within the scope of the universe of all-weather coats as they [were] similar in kind and complexity to all weather coat(s) under the Universal All-Weather Coat Contracts.” Price offers for the new coats were requested from American Apparel and Bluewater. The May 13, 2011 DLA-FQCB Memo for Record stated “price will be the determining facts to the addition of items.”

To determine whether the addition of Items 0006 and 0007 for Air Force/Coast Guard Men’s and Women’s All-Weather Coats were modifications or should have resulted in new competitive procurements requires a comparison of what occurred in this case in 2009 and 2011. Although the competition goals of CICA are a critical part of the government procurement framework, so is the modification process, if the procurement system is to function efficiently. See AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205, 1205 n.1 (noting, with respect to CICA, that “Congress did not intend to prevent contract modification”). This is why “only modifications outside the scope of the original competed contract fall under the statutory competition requirement[s]” of CICA. Id. at 1205.

Based on the language of the Add/Delete Clause, in addition to the earlier indication in the August 10, 2009 pre-solicitation Initial Procurement Synopsis that three additional items could be included in the contracts ultimately awarded to Bluewater and American Apparel, later identified as all-weather coats Items 0006 and 0007 for additional branches of the United States military, the court determines that what occurred in this case in 2011 was a modification to Bluewater’s contract, No. SPM1C1- 10-D-1100, that was within the scope of the original procurement. The original September 10, 2009 solicitation, listed five different coats as “items:” Marine Corp coats for men and women, Navy coats for men and women, and Army coats for women. The February 18, 2011 and September 22, 2011 requests for additional items added the same type of coats, with somewhat different specifications, but only slightly varying types of functionally similar all-weather military coats. Moreover, Item 0006, “PGC 01958 Coat, All Weather, Air Force/Coast Guard Men’s” and Item 0007, “PGC 01959 Coat, All Weather, Air Force/Coast Guard Women’s,” were “items” contemplated by the agency at the time of original September 10, 2009 solicitation SPM1C1-08-R-0153, as evidenced by the August 10, 2009 pre-solicitation Initial Procurement Synopsis.

The line items solicited pursuant to the original procurement, and awarded to Bluewater and American Apparel on December 22, 2010, and the items added to Bluewater’s contract on April 18, 2012, after reviewing price offers from American Apparel and Bluewater, were, as described by DLA, “similar in kind and complexity:” allweather coats for the various branches of the United States military. See The May 13, 2011 DLA-FQCB Memo for Record; Combined Pre-Negotiation Briefing Memorandum (PBM)/Price Negotiation Memorandum (PNM)/Price Analysis. The fact that the agency designated Items 0006 and 0007 as all-weather coats for “Air Force/Coast Guard,” indicating that they could be used by either of the two branches, confirms the similarity of the coats, and reinforces that the “items” procured by the agency pursuant to the September 10, 2009 solicitation and September 22, 2011 notice are of similar kind and complexity. In fact, the government decided that there was no need to change any of the contracts terms upon the addition of the new items. “[T]he scope of the entire original procurement in comparison to the scope of the contract as modified,” therefore, indicates that Bluewater’s contract, as modified, did not “materially depart[] from the scope of the original procurement.” AT & T Commc’ns, Inc. v. Wiltel, Inc., 1 F.3d at 1205.

As stated in AT & T Communications, Inc. v. Wiltel, Inc.:

An important factor in determining the scope of the original competition is “whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes during the course of the contract that in fact occurred, or whether the modification is of a nature which potential offerors would reasonably have anticipated.”

Id. at 1207 (quoting Neil R. Gross & Co., 90–1 CPD ¶ 212, 1990 WL 269546, at *3 (citation omitted)). Because the Add/Delete Clause, in conjunction with the presolicitation Initial Procurement Synopsis, envisioned the addition of similar items, and both existing contractors were offered the same opportunity to submit price quotes to add one or both of the additional items to their existing contracts, American Apparel “‘would reasonably have anticipated’” the addition of Items 0006 and 0007 to either contract awarded under the original September 10, 2009 solicitation. See id. at 1207 (quoting Neil R. Gross & Co., 90–1 CPD ¶ 212, 1990 WL 269546, at *3 (citation omitted)). The pre-solicitation Initial Procurement Synopsis “adequately advised” American Apparel that items, such as Items 006 and 007, may be added to a contract awarded under the original September 10, 2009 solicitation. See Northrop Grumman Corp. v. United States, 50 Fed. Cl. at 465.

The most difficult part of the assessment in the instant case is that, in addition to a comparison of the type of work contemplated by the original procurement and the type of work contemplated by a contract modification, or a comparison between services or products procured under the original procurement and those added by a contract modification, courts also consider whether a contract modification significantly increases the costs of the contract, as compared to the original procurement. See Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. at 106; CESC Plaza Ltd. P’ship v. United States, 52 Fed. Cl. at 93. Some price increase certainly is to be anticipated with the addition of new items for production. By addition of Items 0006 and 0007, the total annual estimated amount of Bluewater’s contract for Item 0001 was increased by “$17,187,887.08 from $20,016,708.00 to $37,204,592.08 [sic].”23 Although Bluewater’s estimated contract price increased by approximately $17,187,887.08, the nature of the items procured under Bluewater’s contract remained the same. The Weighted Average Price per unit for Items 0006 and 0007 was, respectively, [deleted] and [deleted], which was near the average of the Weighted Average Price per unit for Items 0001 through 0005, demonstrating that Items 0006 and 0007 were similar in price, and presumably quality, to Items 0001 through 0005. This is consistent with DLA’s statement that Items 0006 and 0007 were “considered to be within the scope of the universe of all-weather coats as they are similar in kind and complexity to the all-weather coat(s) under the Universal All-Weather Coat Contracts.”

As indicated in Golden Manufacturing Co., Inc. v. United States, 2012 WL 4479422, at *14, it is not simply a matter of arithmetic calculations. In cases that apply the cardinal change doctrine, even a substantial price increase alone is not enough to establish that modifications are beyond the scope of a contract, as long as the nature and purpose of the contract has not changed. See, e.g., S. J. Groves & Sons Co. v. United States, 228 Ct. Cl. 598, 602, 661 F.2d 170, 173 (1981); Def. Sys. Grp., B- 240295, 1990 WL 293536 (Comp. Gen. Nov. 6, 1990) (a 120 percent increase in price was not a cardinal change because the nature and purpose of the contract had not changed). In contrast, in circumstances where a large price increase is accompanied by a substantial change in the nature of work contemplated by a contract, courts have deemed a contract modification to be a cardinal change. See Golden Mfg. Co., Inc. v. United States, 2012 WL 4479422, at *14 (quoting Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. at 109) (“Where, as here, the amount of additional work nearly doubles the price of the contract that was awarded, and the nature of the work was so substantially increased that the change provision of the contract had to be deleted to accomplish the modifications, the originally awarded contract has been materially changed.”).

In the case currently before the court, the nature and purpose of the work contemplated by the original September 10, 2009 solicitation, to provide servicemember coats, remained unchanged. The agency consistently announced the contract’s intended purpose, once in the September 10, 2009 solicitation, and again in the February 18, 2011 request for additional items, which remained constant in the September 22, 2011 request for additional items. The December 22, 2010 awards of contract Item 0001 to Bluewater, and contract Items 0002-0005 to American Apparel were made after evaluation of the product demonstration model (PDM), past performance/experience, and socioeconomic considerations. Both Bluewater and American Apparel, therefore, had gone through the entire evaluation process, and had been vetted and approved after a full and open competition prior to receiving the December 22, 2010 awards. The time to challenge those evaluations conducted by the agency is long past due.

The all-weather coats added to Bluewater’s contract in 2012 are in the nature of modifications forecast in the 2010 contract between the defendant and Bluewater, and within the scope of the September 10, 2009 solicitation. Specifically, the items added to the Bluewater contract by DLA following the September 22, 2011 request did not differ materially from the other all-weather coats procured as a result of the September 10, 2009 solicitation. As stated by the agency in the May 13, 2011 DLA-FQCB Memo for Record; Combined Pre-Negotiation Briefing Memorandum (PBM)/Price Negotiation Memorandum (PNM)/Price Analysis:

The Air Force Man and Woman All-Weather Coats are considered to be within the scope of the universe of all-weather coats as they are similar in kind and complexity to the all-weather coat(s) under the Universal All- Weather Coat Contracts. These additional items were also included in the synopsis of subject Universal AWC solicitation.

The addition of Item 0006, “PGC 01958 Coat, All Weather, Air Force/Coast Guard Men’s” and Item 0007, “PGC 01959 Coat, All Weather, Air Force/Coast Guard Women’s,” to the existing Bluewater’s Contract No. SPM1C1-10-D-1100, was an inscope modification pursuant to the Add/Delete Clause also included as part of the 2009 solicitation and, therefore, not a material departure from the original procurement.  (American Apparel, Inc., v. U. S. and Bluewater Defense Inc., No. 12-293C, December 14, 2012)  (pdf)

In determining whether a modification is outside the scope of the original government contract, the Court applies the “cardinal change doctrine.” Wiltel, 1 F.3d at 1205 (noting that CICA sets forth no standard for determining when a modification is within the scope of the original contract). “[A] cardinal change . . . occurs when the government effects an alteration in the work so drastic that it effectively requires the contractor to perform duties materially different from those originally bargained for.” Id. If the contract as modified materially departs from the scope of the original procurement, then CICA’s competition requirements will apply. See, e.g., CWT/Alexander Travel, Ltd. v. United States, 78 Fed. Cl. 486, 494 (2007); HDM Corp. v. United States, 69 Fed. Cl. 243, 254 (2005). In its analysis, the Court should look to whether the original offerors were adequately advised of the potential for the types of changes that in fact occurred, and “whether the modification is of a nature which potential offerors would reasonably have anticipated.” Wiltel, 1 F.3d at 1207 (quoting Neil R. Gross & Co., B-237434, 90-1 CPD ¶ 212 at 3 (February 23, 1990)).

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)