TITLE:  N&N Travel & Tours, Inc.; BCM Travel & Tours; Manassas Travel, Inc.;, B-285164.2; B-285164.3, August 31, 2000
BNUMBER:  B-285164.2; B-285164.3
DATE:  August 31, 2000
**********************************************************************
N&N Travel & Tours, Inc.; BCM Travel & Tours; Manassas Travel, Inc.;,
B-285164.2; B-285164.3, August 31, 2000

Decision

Matter of: N&N Travel & Tours, Inc.; BCM Travel & Tours; Manassas Travel,
Inc.; Alamo Travel, Inc.; Ravenel Bros., Inc.; and Bay Area Travel, Inc.

File: B-285164.2; B-285164.3

Date: August 31, 2000

Josephine L. Ursini, Esq., for the protesters.

John E. Larriccia, Esq., and Mark S. Garrard, Esq., Department of the Air
Force; Thomas Y. Hawkins, Esq., General Services Administration; and Kenneth
W. Dodds, Esq., Small Business Administration, for the agencies.

Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

  1. The statutory limitation on General Accounting Office bid protest
     jurisdiction

over challenges to the award of a task order under an
indefinite-delivery/indefinite-quantity (ID/IQ) contract does not apply
where the protester's challenge, although triggered by the issuance of a
task order, in essence, raises the question of whether the solicitation for
the underlying ID/IQ contract properly could be used to procure services
which, the protester argues, must be set aside for small businesses.

  2. Despite the requirement that protests alleging improprieties in a
     solicitation must
  3. be filed before the time set for receipt of proposals in response to
     the solicitation, 4 C.F.R. sect. 21.2(a)(1) (2000), a protester's challenge
     to a solicitation is timely, even though filed after the closing time,
     where numerous representatives of the federal government--including
     representatives of the General Services Administration, the Department
     of Defense, and the Department of the Air Force--led potential small
     business offerors to conclude that the contract resulting from the
     solicitation would not be used to procure certain travel services
     which, the protester argues, must be set aside for small businesses.
  4. Protester's contention that the use of a government-wide unrestricted
     ID/IQ

contract to procure travel management services at Travis Air Force Base,
California, violates the requirement in Federal Acquisition Regulation (FAR)
sect. 19.502-2 to set aside procurements for small businesses where there is a
reasonable expectation of receiving fair market price offers from at least
two responsible small business concerns is sustained where the record shows
that there is a significant pool of small business offerors who have
responded to a recent solicitation for precisely these services, and where
there is no evidence in the record of any reason why the agency could not
set aside the procurement.

DECISION

N&N Travel & Tours, Inc.; BCM Travel & Tours; Manassas Travel, Inc.; Alamo
Travel, Inc.; Ravenel Bros., Inc.; and Bay Area Travel, Inc. jointly protest
a decision by the Department of the Air Force to request quotes for travel
management services for Travis Air Force Base (AFB), California, using a
tailored task order request under contract line item no. (CLIN) 8 of Master
Contract No. GS-09F-80607, awarded by the General Services Administration
(GSA). All six protesters argue that the Travis AFB task order is beyond the
scope of the GSA Master Contract, and that the Air Force violated FAR
sect. 7.102 by failing to prepare an acquisition plan, and Office of Management
and Budget Circular A-76 by converting travel management services from a
contracted-out activity to an in-house activity. The four protesters who are
currently considered small businesses--BCM, Manassas, Alamo, and
Ravenel--argue that the Air Force was required to set aside this procurement
for small business.

We sustain the protest of the small business offerors that this effort
should be set aside for exclusive small business participation.

BACKGROUND

Since January 1994, N&N has provided travel management services to Travis
AFB. At the time of initial award to N&N, the company was considered a small
disadvantaged business, and its contract was awarded for a base year
followed by three 1-year options. For reasons related to the facts below,
but not relevant to resolution of this dispute, N&N's initial contract has
been extended several times on a sole-source basis--even though N&N is no
longer eligible for award of small business set-aside contracts. At a
minimum, the record shows that the most recent of these extensions occurred
after the time that N&N lost its status as a small business. Air Force
Contracting Officer's (CO) Statement, May 5, 2000, at 2-3. N&N's contract to
provide these services expired on June 30, 2000--during the pendency of this
protest--and Travis AFB is currently providing travel services in-house.

During the more than 6 years that N&N provided these services for Travis
AFB, three alternative contracting options were considered by the Air Force,
and each of these options has a role in the resolution of this protest. Set
forth below is a description of these options.

First, the contracting officer here explains that Travis AFB--and presumably
all DOD entities--has been awaiting the development and award of a
"mandatory regional Defense Travel System (DTS)" contract, which has been
delayed repeatedly. Id. at 1. The delays in implementing a mandatory
DOD-wide contract have been used as justification for extending N&N's
contract on a sole-source basis, and for the use of the GSA contract that is
the subject of this protest. Id. at 1-3. According to the contracting
officer, as of December 1999--when N&N's contract was last extended--there
was no information available about an anticipated award date for the
mandatory DTS contract. Id. at 1.

Given the ongoing unavailability of the DTS contract, and the need for
continued extensions to N&N's contract, Travis issued a solicitation for its
travel management needs in December 1998. This solicitation was set aside
for small businesses, and nine offers were received. Prior to award of this
contract, however, BCM (one of the small business protesters here) filed a
protest with our Office on January 29, 1999. Subsequently, on February 17,
the Air Force elected to cancel the solicitation and again extend N&N's
contract on a sole-source basis. Id. at 2-3. Accordingly, our Office
dismissed the protest as academic. BCM Travel & Tours, B-281950, Feb. 25,
1999.

After canceling its small business set-aside solicitation, Travis AFB began
to explore a third option for meeting its travel management needs.
Specifically, the CO explains that she became aware of the possibility of
using GSA's ID/IQ travel services contract in late 1999. Id. at 1. Details
regarding the GSA contract are set forth below.

GSA issued solicitation No. 9FBG-OLC-N-A-2092-99 on April 27, 1999; the
solicitation anticipated multiple awards of non-mandatory, ID/IQ task order
contracts for Travel Management Center (TMC) services for a 2-year base
period, followed by three 1-year options. Contract at A-2.2, A-3. TMC
services are available to all federal agencies, and include booking and
ticketing travel, lodging, rental cars, and other services for official
agency travel. GSA Agency Report, May 17, 2000, at 2. Each CLIN within the
solicitation was designated for a specific geographic area; some were
reserved for small businesses, others were not. At issue in this protest is
CLIN 8, which covered the state of California and was not reserved for small
businesses.

Pursuant to its solicitation, GSA made 393 contract awards to 46 contractors
using 50 separate CLINs. GSA Request for Partial Dismissal, May 9, 2000, at
1. Under CLIN 8 covering California, GSA made eight awards on November 8,
1999. GSA Agency Report, supra. It appears that none of the awardees under
CLIN 8 are small businesses. After becoming aware of the possibility of
using the GSA travel contract until the mandatory DTS regional contract is
available for use at Travis AFB, the contracting officer decided to place a
task order against the GSA contract. This protest followed.

PROCEDURAL ISSUES

Jurisdiction

The Air Force and GSA (the procuring agencies here) request dismissal of all
but one of the issues raised by these protesters because, in their view, the
protesters are challenging the award of a task order under an ID/IQ
contract. Under 10 U.S.C. sect. 2304c(d) (1994), "[a] protest is not authorized
in connection with the issuance or proposed issuance of a task or delivery
order except for a protest on the ground that the order increases the scope,
period, or maximum value of the contract under which the order is issued."
Thus, as a preliminary matter, there is no dispute that the contention that
this task order exceeds the scope of the GSA ID/IQ contract is properly
before our Office.

With respect to the contention of the procuring agencies that we lack
jurisdiction to hear an argument that the Air Force is violating FAR
sect. 7.102, we agree. FAR sect. 7.102(a) requires that agencies perform acquisition
planning and conduct market research for all acquisitions to maximize the
use of commercial items and full and open competition. The protesters'
argument that the Air Force did not adequately conduct acquisition planning
and market research before deciding to satisfy its needs using a task order,
does not allege that the order increases the scope, period, or maximum value
of the contract under which the order is placed. Accordingly, we conclude
that the limitation on our jurisdiction in 10 U.S.C. sect. 2304c(d) bars our
review of this allegation.

Also beyond our bid protest jurisdiction is the protesters' challenge to the
Air Force decision to let N&N's oft-extended, sole-source contract lapse,
and to instead perform the services in-house until the conclusion of this
protest. An agency's decision to perform services in-house rather than
extend an incumbent's contract is a matter of executive policy not within
the reach of our bid protest function unless the agency has issued a
competitive solicitation for cost comparison purposes. W. B. & A., Inc.,
B-229926.3, May 19, 1988, 88-1 CPD para. 475 at 2; see also Pemco Aeroplex,
Inc.; Aero Corp., B-275587.9 et al., June 29, 1998, 98-2 CPD para. 17 at 6, 8
n.3. Since there has been no competitive solicitation for a cost comparison
issued here, we have no basis to review this contention.

Finally, with respect to the contention that the travel management services
here must be set aside for small business, the Air Force and GSA again argue
that we are barred from reaching this issue, as it is not one of the issues
anticipated by the statutory limitation on our authority to hear bid
protests related to the award of task or delivery orders. On the other hand,
the Small Business Administration has filed a report with our Office urging
us to take jurisdiction over this issue, and to sustain the protest on the
merits.

Our Office faced the issue of whether an agency violated FAR sect. 19.502-2 in
failing to set aside for small businesses efforts included in a task order
placed against an ID/IQ contract in Letters to the Air Force and Army
concerning Valenzuela Eng'g, Inc., B-277979, Jan. 26, 1998, 98-1 CPD para. 51.
Even though the protest of the same name (also set forth at 98-1 CPD para. 51)
was dismissed as untimely for unrelated reasons, we directed a letter to the
Secretary of the Air Force advising that the task order placed by the Air
Force against the Army's ID/IQ contract violated the FAR's small business
set-aside requirements. Id. at 4.

The acquisition at issue in Valenzuela was conducted pursuant to the Economy
Act, 31 U.S.C. sect. 1535 (1994), as the Air Force transferred funds to the
Department of the Army to pay for an order placed against the Army's ID/IQ
contract. Letter to the Air Force, supra, at 2. Under the Economy Act, one
agency may use its own contract to satisfy another agency's needs provided
the requirements of the Act are met. 31 U.S.C. sect. 1535(a); Dictaphone Corp.,
B-244691.2, Nov. 25, 1992, 92-2 CPD para. 380 at 3-4, recon. denied, B-244691.3,
Jan. 5, 1993, 93-1 CPD para. 2. Acquisitions conducted pursuant to the Economy
Act generally fall within our bid protest jurisdiction. See generally
Dictaphone Corp., supra; Liebert Corp., B-232234.5, Apr. 29, 1991, 91-1 CPD
para. 413. Because the protest in Valenzuela was dismissed as untimely, we did
not reach the issue of whether our jurisdiction over Economy Act
procurements extends to our review of an alleged violation of the Small
Business Act in the context of a task order.

During the course of this protest, and given the jurisdictional challenges
raised by the Air Force and GSA, we asked the parties to address whether
this procurement was conducted pursuant to the Economy Act, like the
procurement in Valenzuela. We conclude it was not.

In this procurement, GSA, claiming authority derived from section 201 of the
Federal Property and Administrative Services Act of 1949 ("the Property
Act"), codified at 40 U.S.C. sect. 481 (1994), has placed a master contract for
travel services, against which other executive agencies may place orders.
The language of the Property Act provides that GSA may "procure and supply
personal property and nonpersonal services for the use of executive agencies
in the proper discharge of their responsibilities." 40 U.S.C. sect. 481(a)(3).
In our view, this authority is sufficiently broad to include contracts for
nonpersonal travel services needed by executive agencies to fulfill their
respective missions. Given the existence of this separate statutory
authority in the Property Act, this procurement falls outside the purview of
the Economy Act. [1] See FAR sect. 17.500(b) (Economy Act applies only when more
specific statutory authority does not exist); 55 Comp. Gen. 1497, 1499
(1976). Since we conclude that the Economy Act does not apply here, we again
save--and do not decide--the question of whether our jurisdiction over
Economy Act procurements provides a basis for us to review alleged
violations of the Small Business Act in the context of task orders.

Instead, we find that our jurisdiction to hear the small business issues in
this protest rests upon a far simpler principle. Specifically, while we
recognize that this challenge focuses on, and is triggered by, the decision
to use a task order under GSA's ID/IQ contract to procure travel services at
Travis AFB, this complaint, in essence, raises the question of whether the
solicitation for the underlying ID/IQ contracts properly included Travis
despite the claimed independent requirement to reserve the Travis effort for
small businesses. Thus, as discussed in greater detail below, we conclude
that the small business protesters are mounting a challenge to the terms of
the underlying solicitation, and that the limitation on our bid protest
jurisdiction in 10 U.S.C. sect. 2304c(d) therefore does not apply to this
protest. Since we are charged by statute with reviewing protests alleging
that a solicitation does not comply with applicable procurement statutes and
regulations, 31 U.S.C. sect.sect. 3552, 3554(b)(1), we conclude that this portion of
the protest is properly within our bid protest jurisdiction. Ocuto Blacktop
& Paving Co., Inc., B-284165, Mar. 1, 2000, 2000 CPD para. 32 at 4-5.

Timeliness

In anticipation of the possibility that our Office might view the small
business issues here as a challenge to the underlying solicitation, the Air
Force and GSA also argue that any such challenge is untimely at this
juncture. In this regard, both agencies point out that the solicitation and
resulting contract expressly indicate that GSA's ID/IQ contract will be
available for use by any federal agency. Thus, in their view, the
solicitation provided sufficient notice to potential small business offerors
that Travis AFB would be allowed to place task orders against the contracts
awarded pursuant to CLIN 8 of the contract. Contract sect. I-35.

Under our Bid Protest Regulations, a protest based upon alleged
improprieties in a solicitation which are apparent prior to the time set for
receipt of initial proposals must be filed before the time set for receipt
of such proposals. 4 C.F.R. sect. 21.2(a)(1) (2000). Since proposals in response
to the GSA solicitation for the ID/IQ contract were due no later than June
22, 1999, the Air Force argues that the four small business protesters here
cannot now raise this issue. We disagree.

Despite the fact that the solicitation and resulting contract here expressly
stated that all federal agencies were eligible to use GSA's contract, there
is no dispute in the record that DOD entities were not anticipating using
the GSA travel services contract for their travel service needs. Rather, DOD
and Air Force officials have advised--and continue to advise--the travel
industry that it is the DOD contract, and not the GSA contract, that will be
used to procure these services. For example, the draft solicitation posted
on the DOD website while this protest was pending, advises potential travel
service offerors that travel services for Travis AFB will be procured using
the DOD contract, and will be set aside for small business. See
www.dtic.mil/travelink/rfp2/sbsaloc.html and
www.dtic.mil/travelink/rfp2/otsbss1099.html.

Likewise, GSA representatives were not anticipating use of this contract for
Travis AFB, and were advising the public of this fact. GSA incorporated into
the solicitation a transcript of a question and answer session with
representatives of the travel industry in which agency representatives
explained that there were "pockets" of DOD users around the country, but the
contract was "primarily for the civilian agencies." Contract sect. J-F.2, at 6.
In addition, GSA concedes that Travis was not one of the DOD users
identified during the solicitation process. GSA Request for Partial
Dismissal, May 9, 2000, at 2.

Under these unusual circumstances, we think the actions of the DOD, the Air
Force, and GSA led the small business protesters here to reasonably conclude
that GSA's contract would not be used to procure travel services for Travis
AFB. We also think this reasonable conclusion negated the normal requirement
to file a protest challenging the small business set-aside status of this
portion of the solicitation prior to the time set for receipt of initial
proposals in response to the solicitation. These circumstances--especially
when viewed in light of our long-standing view that doubts over issues of
timeliness should be resolved in favor of protesters, Complere Inc.,
B-257946, Nov. 23, 1994, 94-2 CPD para. 207 at 4 n.3--lead us to conclude that
this challenge to the terms of the solicitation is timely, and should be
heard. [2]

SMALL BUSINESS SET-ASIDE

With respect to the contention of the four small business protesters that
the procurement of travel services at Travis AFB had to be reserved for
small businesses, we agree.

The RFP here, as initially issued, implicitly included the work for Travis
AFB as an undifferentiated part of the CLIN reserved for all federal travel
needs for the state of California. Thus, the work that had previously been
performed by a small business at Travis was bundled into the significantly
larger master contract. The Small Business Act, 15 U.S.C.A. sect. 631(j) (West
Supp. 1999), states that, "to the maximum extent practicable," each agency
shall "avoid unnecessary and unjustified bundling of contract requirements
that precludes small business participation in procurements as prime
contractors." There is no indication in the record here that bundling the
work for Travis AFB into all federal travel work for the state of California
was necessary to meet the agency's needs, nor is there an indication that
GSA ever contemplated use of its master contract by Travis AFB, much less
concluded that the work should be bundled together with all other federal
work for the state. In addition, as explained below, this effort should have
been set aside for small businesses.

Contracting officers generally are required to set aside for small business
all procurements exceeding $100,000 if there is a reasonable expectation of
receiving fair market price offers from at least two responsible small
business concerns. FAR sect. 19.502-2(b); Safety Storage, Inc., B-280851, Oct.
29, 1998, 98-2 CPD para. 102 at 3. We regard such a determination as a matter of
business judgment within the contracting officer's discretion which we will
not disturb absent a showing that it was unreasonable. Neal R. Gross & Co.,
Inc., B-240924.2, Jan. 17, 1991, 91-1 CPD para. 53 at 2. However, a contracting
officer must make reasonable efforts to ascertain whether it is likely that
offers will be received from at least two small businesses capable of
performing the work. Mortara Instrument, Inc., B-272461, Oct. 18, 1996, 96-2
CPD para. 212 at 3. Our Office will review a protest to determine whether a
contracting officer has made such efforts. Library Sys. & Servs./Internet
Sys., Inc., B-244432, Oct. 16, 1991, 91-2 CPD para. 337 at 7.

While the use of any particular method of assessing the availability of
small businesses is not required, and measures such as prior procurement
history, market surveys and/or advice from the agency's small business
specialist and technical personnel may all constitute adequate grounds for a
contracting officer's decision not to set aside a procurement, American
Imaging Servs., Inc., B-246124.2, Feb. 13, 1992, 92-1 CPD para. 188 at 3, the
assessment must be based on sufficient facts so as to establish its
reasonableness. McSwain & Assocs., Inc.; Shel-Ken Properties, Inc.; and
Elaine Dunn Realty, B-271071 et al., May 20, 1996, 96-1 CPD para. 255 at 2-3.

Here, the record shows that the competitive solicitation issued by Travis
AFB for its travel services--and cancelled in early 1999 in response to a
protest--yielded nine proposals from small businesses. Given this result,
together with the lack of evidence that it was necessary to bundle travel
services at Travis AFB with the entire federal workload for the state of
California, a challenge to the underlying solicitation, filed prior to the
closing date for receipt of proposals, would likely have resulted in a
decision that this work should be procured separately and reserved for small
businesses. In fact, we note that for the Travis work alone, the Air Force
received more proposals from small businesses than GSA made unrestricted
awards under CLIN 8 of its travel services contract for the entire state of
California. In addition, as indicated above, the current draft DTS
solicitation, posted on the Internet, reserves travel services at Travis AFB
for small business--providing evidence that DOD apparently anticipates
receiving adequate competition from small business at fair market prices.
Under these circumstances, we conclude that FAR sect. 19.502-2 required that the
purchase of these services for Travis AFB be conducted as a small business
set-aside. [3]

RECOMMENDATION

Generally, when we find that a solicitation is defective, we recommend that
the agency amend the solicitation, and resolicit. Here, however, that
recommendation is not practicable because the contracts resulting from the
solicitation have been in place almost a year. Instead, we recommend that
the pending task order be canceled, and that the Air Force procure travel
management services at Travis AFB in compliance with the requirement in FAR
sect. 19.502-2, as there is a reasonable expectation of receiving fair market
price offers from at least two responsible small business concerns. We also
recommend that the small business protesters here be reimbursed the
reasonable costs of filing and pursuing their protest, including attorneys'
fees. 4 C.F.R. sect. 21.8(d)(1). In accordance with 4 C.F.R. sect. 21.8(f)(1), the
certified claim for such costs, detailing the time expended and the costs
incurred, must be submitted directly to the agency within 60 days after
receipt of this decision.

The protest is sustained.

Robert P. Murphy

General Counsel

Notes

1. Thus, because the GSA has separate authority for the ID/IQ contract,
there is no need for ordering agencies to execute the determination and
finding document applicable to Economy Act orders pursuant to FAR sect. 17.503.

2. In many ways, our resolution of the timeliness issues in favor of the
four small business protesters relies upon some of the same considerations
we might have used in reviewing the allegation that this task order exceeds
the scope of the underlying ID/IQ contract. Put simply, the solicitation's
clear indication that the underlying contract would be available for use by
all executive branch agencies was considerably obscured by the actions of
GSA, DOD, and Air Force representatives. Nonetheless, since we ultimately
sustain the small business set-aside challenge for the four small business
protesters, we need not reach the issue of whether the task order here
exceeds the scope of underlying contract. Similarly, the issue of scope is
academic for the two large business protesters, as we hold that this work
should be set aside for small business and they will not be eligible to
participate in the new procurement.

3. Since the protesters prevail on their contention that this protest must
be set aside for small business participation, we do not discuss the small
business contentions that have no merit. For example, the contention that
the agency has violated FAR sect. 19.202-1(e)(1)(i) by not providing a copy of
the proposed acquisition package to the SBA procurement representative at
least 30 days prior to release of the solicitation because the services are
currently being performed by a small business, is ultimately not supported
by the record. The incumbent here, N&N, has received at least one
sole-source contract award extending its performance since the company lost
its status as a small business. Thus, it is not clear that FAR
sect. 19.202-1(e)(1) applies here. In addition, even as the SBA urges our Office
to sustain portions of this protest, it concedes that its own representative
apparently waived the application of this requirement for this procurement.