LDDS Worldcom

B-270109 Feb 06, 1996 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm protested a Navy solicitation for personal telecommunications services, contending that the Navy improperly used appropriated funds to perform military construction services. GAO held that: (1) the Navy was not using the nonappropriated fund instrumentality to circumvent applicable procurement policies; and (2) it would not review the matter, which was not within its jurisdiction. Accordingly, the protest was dismissed. View Decision Matter of: LDDS Worldcom File: B-270109 Date: February 6, 1996 Protest against terms of solicitation for license to furnish personal, unofficial telecommunications services to service members is dismissed where solicitation was issued by a nonappropriated fund instrumentality (NAFI) and there is no showing that in conducting the procurement the NAFI was acting as a conduit for the agency in order to circumvent applicable procurement statutes; GAO's bid protest jurisdiction is limited to procurements by federal agencies, and NAFIs do not meet the statutory definition of federal agencies. Attorneys DECISION LDDS Worldcom protests the terms of request for proposals No. NNA250-95-R-0025, issued by the Navy Exchange Service Command (NEXCOM) for personal, unofficial telecommunications services. LDDS argues that NEXCOM, a Morale, Welfare and Recreation (MWR) activity and a nonappropriated fund instrumentality (NAFI), is seeking to use the solicitation to procure improvements to, and the renovation or repair of, government-owned property, thereby improperly augmenting the Navy's appropriation; according to the protester, the solicited work amounts to military construction services that should be procured by a federal agency with appropriated funds, under the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS). We dismiss the protest. The solicitation contemplated the award of a non-exclusive, revocable license for a base period of 10 years with 5 option years to furnish personal, unofficial telecommunications services to service members at more than 320 Navy, Marine Corps, and Coast Guard installations. The services to be furnished include bachelor quarters in-room phone service, Navy Lodge in-room phone service, pay phone service, affinity long distance service, over-the-counter and vended prepaid debit cards, long distance phone centers, military calling card services, and brig/confinement facility pay phone service. The solicitation generally contemplated that the licensee at its own expense would furnish and install any necessary equipment and facilities, furnish the required services, and pay certain required license fees; the licensee would recover its costs through service charges paid by the service members and other users over the life of the license. Specifically, the solicitation required the licensee to pay an up-front license fee, propose percentage commissions, and guarantee payment of the higher of the proposed commissions or specified minimum monthly commissions. In addition, the solicitation required the licensee to "provide, service, and maintain all equipment, supplies, cabling, wiring, switches, hardware and connectivity required to supply the personal telecommunications services required by this licensing agreement." The solicitation generally provided that: "the equipment and services required herein will be provided at no cost to [NEXCOM] or the other military activities covered by this solicitation. Consequently, unless this solicitation specifically states otherwise, all charges for the provision of the equipment, including installation and maintenance, and services required herein . . . shall be the responsibility of the successful offeror." The solicitation specifically provided that "[t]he Licensee shall be responsible for all costs of design, wiring, cable, jacks, software, equipment and installation necessary to provide the services required under this license agreement." The solicitation further provided that: "[e]xcept as otherwise specifically stated in the body of this agreement, title to all property and materials provided by or on behalf of the Licensee, to include without limitation, switches, wiring, cable, jacks, software, facilities or equipment, shall remain in the licensee throughout the period of the agreement.