Madison Services, Inc., B-278962, April 17, 1998

B-278962 Apr 17, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that solicitation provision for variable option periods of 1 to 12 months is unduly restrictive of competition is denied where the record indicates that the agency needs the flexibility to extend the contract by periods of 1 to 12 months in order to ensure the continual provision of maintenance for family housing developments in the face of changing circumstances and requirements. The protester alleges that the specified provisions either are ambiguous. Small businesses like Madison will have to load all indirect costs into the base year. Unpredictable performance periods have a greater effect on small businesses. Which are less likely to be able to hire and retain a dedicated workforce under conditions of continual job instability. View Decision B-278962 Madison Services, Inc., April 17, 1998 DIGEST Attorneys DECISION Madison Services, Inc. protests the terms of request for proposals (RFP) No. N00187-95-R-6050, issued by the Naval Facilities Engineering Command (NAVFAC), for maintenance of family housing developments in the Tidewater region of Virginia. The protester alleges that the specified provisions either are ambiguous, unduly restrictive of competition, or otherwise violate the Federal Acquisition Regulation (FAR). We deny the protest. The RFP contemplates award of a fixed-price, indefinite-delivery/indefinite-quantity contract to the offeror whose offer represents the best value to the government, price and other factors considered. The solicitation provides for a contract term with a base period of 12 months and the option to extend the term up to a total duration of 60 months. Specifically, the solicitation included NAVFAC standard clause 5252.217-9301, "OPTION TO EXTEND THE TERM OF THE CONTRACT - SERVICES (JUN 1994)," amended to establish the 60-month overall term, which provides in relevant part that: a. The Government may extend the term of this contract for a term of one (1) to twelve (12) months by written notice to the Contractor within the performance period specified in the Schedule; provided that the Government shall give the Contractor a preliminary written notice of its intent to extend before the contract expires. The preliminary notice does not commit the Government to an extension. Madison objects that the provision for variable option periods of 1 to 12 months unduly restricts competition because (1) without definite option periods, small businesses like Madison will have to load all indirect costs into the base year, hence making their prices noncompetitive with large businesses that perform numerous other government contracts and can spread their overhead costs over a greater pool of work; and (2) brief, unpredictable performance periods have a greater effect on small businesses, which are less likely to be able to hire and retain a dedicated workforce under conditions of continual job instability. In preparing a solicitation for supplies or services, a contracting agency must specify its needs and solicit offers in a manner designed to achieve full and open competition, and include restrictive provisions only to the extent necessary to satisfy the agency's needs. 10 U.S.C.Sec. 2305(a)(1)(A)(i), B(ii) (1994); Mortara Instrument, Inc., B-272461, Oct. 18, 1996, 96-2 CPD Para. 212 at 6. The contracting agency, which is most familiar with its needs and how best to fulfill them, must make the determination as to what its needs are in the first instance, and we will not question that determination unless it has no reasonable basis. Innovative Refrigeration Concepts, B-272370, Sept. 30, 1996, 96-2 CPD Para. 127 at 3. The provision here for variable option periods is unobjectionable. Nothing in the FAR prohibits variable option periods nor requires that an option period be more than a month in duration. Nor do we think that the provision for variable option periods exceeds the agency's needs or unduly restricts competition. In this regard, the agency explains that it needs the flexibility to extend the contract by periods of 1 to 12 months in order to ensure the continual provision of maintenance for family housing developments in the face of changing circumstances and requirements. To cite one example of many set forth by the agency, with respect to the existing procurement, due to a Navy initiative to regionalize housing maintenance services, services for two additional family housing developments were added to the procurement. One of the additional developments had in place a contract for maintenance services which contained clause 5252.217-9301; in order to provide for continual services at that development, and yet have the contract terminate at the anticipated start of the contract for the subject procurement, contracting officials extended that contract for a period of 6 months, pursuant to the clause.