DGS Contract Services, Inc.

B-261879 Oct 31, 1995 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Fixed-price contract format imposes undue risk on the contractor is denied where protester has not shown that choice of format was unreasonable. Solicitation provision for single price to be used in pricing both permanent increases and decreases in guard service hours of up to 25 percent is not improper. The provision affects all potential offerors equally and offerors are expected to determine their prices taking into consideration amount of risk involved. BACKGROUND The solicitation provides that award will be made on the basis of the best value. (A total contract price is to be calculated from the sum of the extended offered prices for all contract periods.). Which are described as permanent increased or decreased guard services ordered for a period of more than 30 consecutive days. View Decision Matter of: DGS Contract Services, Inc. File: B-261879 Date: October 31, 1995 Protest that firm, fixed-price contract format imposes undue risk on the contractor is denied where protester has not shown that choice of format was unreasonable; the majority of the required contract effort consisted of requirements for services of certain quantities and delivery times, and the solicitation provided a mechanism for adjusting the contract price to reflect any changes in actual requirements. Solicitation provision for single price to be used in pricing both permanent increases and decreases in guard service hours of up to 25 percent is not improper; the provision affects all potential offerors equally and offerors are expected to determine their prices taking into consideration amount of risk involved. Attorneys DECISION DGS Contract Services, Inc. protests the terms of request for proposals (RFP) No. IRS-95-SE-17, issued by the Department of Treasury, Internal Revenue Service (IRS), for security guard services. The protester objects to the contract format and argues that the solicitation's method of pricing changed requirements imposes undue risk on the contractor. We deny the protest. BACKGROUND The solicitation provides that award will be made on the basis of the best value. The RFP requests firm, fixed prices for basic services, additional services and changed requirements for a base and 4 option years. (A total contract price is to be calculated from the sum of the extended offered prices for all contract periods.) For basic services, the solicitation furnishes an estimate of the overall yearly productive (i.e., guard) staff-hour requirements (26,684.57 hours), as well as estimates of guard post hours for designated locations and other additional required supervisory and management hours; the solicitation requests monthly and 12-month extended prices. For the additional services, described as temporary increased guard services ordered for a period of less than 30 consecutive days, the RFP requests per staff-hour and 2,000-hour (estimated quantity) extended prices. The RFP also includes provisions for changed requirements, which are described as permanent increased or decreased guard services ordered for a period of more than 30 consecutive days. The solicitation explains that "[t]he government anticipates that during the term of the contract, guard post orders may be amended, modified, or reissued on a permanent basis." The RFP requests per staff-hour and 6,000-hour (estimated quantity) extended prices for the changed requirements, and provides that in the event of up to a 25-percent increase or decrease in the contract's total productive staff-hour requirements, the contract price for the basic services shall be adjusted "by using the applicable hourly rate set forth in the price schedule for changed requirements. . . ." Although DGS's protest was filed prior to the closing time for receipt of proposals, the agency did not delay the closing. The agency reports that it received multiple offers. CONTRACT FORMAT DGS objects to use of a firm, fixed-price contract format on the basis that, given the potential for up to a 25-percent reduction in contract productive hours, the agency has improperly shifted the risk of uncertain requirements to the offeror. The protester asserts that an indefinite delivery requirements contract would more appropriately reflect the agency's minimum needs, or that changed requirements could be better handled during contract administration by termination for the convenience of the government.