Letters to the Air Force and Army concerning Valenzuela

B-277979 Jan 26, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Secretary: This is to bring to your attention matters that we learned of during consideration of a recent protest. The services were ordered under an indefinite delivery. The fact that the purchase was being made through an Economy Act transaction did not exempt the agency from complying with the Act. The statement of work in Syska & Hennessy's Army contract was so broad as to violate the Competition in Contracting Act of 1984 (CICA). Because the Economy Act generally permits agencies to procure services under another agency's contract without full and open competition only where that contract was awarded in compliance with CICA. Which was determined not suitable for a small business set-aside. View Decision Subject: Letters to the Air Force and Army concerning Valenzuela Engineering, Inc. (B-277979, December 9, 1997) File: B-277979 Date: January 26, 1998 The Honorable F. Whitten Peters Acting Secretary of the Air Force Dear Mr. Secretary: This is to bring to your attention matters that we learned of during consideration of a recent protest. By decision of December 9, 1997, copy enclosed, we dismissed as untimely the protest filed by Valenzuela Engineering, Inc., alleging that the Department of the Air Force and the Army Corps of Engineers failed to comply with certain provisions of the Federal Acquisition Regulation in the acquisition of operation and maintenance services at the Mike O'Callaghan Federal Hospital at Nellis Air Force Base, Nevada. The services were ordered under an indefinite delivery, indefinite quantity (IDIQ) contract between the Army Engineering and Support Center (CEHNC), Huntsville, Alabama, and Syska & Hennessy, Inc. While we dismissed the protest as untimely, our review indicated that two statutory violations occurred during the procurement. First, the Air Force failed to coordinate with the Small Business Administration (SBA) the removal of this requirement from the small business program and failed to consider this requirement for a possible small business set-aside. These failures violate the Small Business Act, 15 U.S.C. Sec. 644(a) (1994), and implementing regulations. The fact that the purchase was being made through an Economy Act transaction did not exempt the agency from complying with the Act. Second, the statement of work in Syska & Hennessy's Army contract was so broad as to violate the Competition in Contracting Act of 1984 (CICA). Because the Economy Act generally permits agencies to procure services under another agency's contract without full and open competition only where that contract was awarded in compliance with CICA, the Air Force acted improperly in using the Army contract here. We discuss each of these concerns in detail below. In March 1996, the Air Force entered into a contract for O&M services at the hospital at Nellis Air Force Base through the Small Business Administration (SBA) under the section 8(a) program with Valenzuela. During Valenzuela's contract performance, CEHNC developed an IDIQ procurement for O&M and incidental repair and replacement services at government facilities, which was determined not suitable for a small business set-aside. On September 24, CEHNC issued a request for proposals (RFP) for the services under IDIQ task order contracts. The RFP's work statement identified no specific facilities or locations at which these services were to be performed, but included O&M and incidental repair and replacement services at "Government facilities such as but not limited to medical, non-medical, training, administrative, plants, labs and storage facilities." These facilities were initially limited by location "in the continental United States, Hawaii and Alaska," but this was subsequently modified to add the words "and outside the continental United States." On May 5, 1997, CEHNC awarded contracts to two large businesses, J&J Maintenance, Inc. and Syska & Hennessy. Following the award of the Army contracts, the Air Force decided not to exercise the option under Valenzuela's 8(a) contract. Instead, it would satisfy its requirements for O&M services, along with certain additional engineering and construction services, at the Nellis Air Force Base hospital under CEHNC's task order contract with Syska & Hennessy. The Air Force requested the services under a Military Interdepartmental Purchase Request (MIPR) dated May 28. CEHNC issued a delivery order authorizing Syska & Hennessy to develop a plan for performing the services, and on September 12, CEHNC entered into a bilateral modification to the delivery order with Syska & Hennessy to provide the services.