N&N Travel & Tours, Inc., B-283731.2, December 21, 1999

B-283731.2 Dec 21, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency solicitation seeking proposals for travel services at no cost to the government does not violate prohibitions against improper augmentation of appropriations nor is it otherwise improper where statute specifically permits the accrual to the Department of Defense of credits. Protest that risk of commission reductions makes the commission provisions unfair is denied. Agencies have discretion to impose maximum risks upon the selected contractor and minimum administrative burdens upon the agency. N&N contends that the RFP is defective because it improperly contemplates the award of a fixed-price. Supplemental travel services. /2/ The RFP advised offerors that there was no guaranteed minimum purchase. View Decision Matter of: N&N Travel & Tours, Inc. File: B-283731.2 Date: December 21, 1999 DIGEST Attorneys DECISION N&N Travel & Tours, Inc. protests the terms of request for proposals (RFP) No. M67400-00-R-0009, issued by the U.S. Marine Corps for travel management services for the Corps's Camp S.D. Butler, Okinawa, Japan. N&N contends that the RFP is defective because it improperly contemplates the award of a fixed-price, commission-based contract, which would also result in an unauthorized augmentation of appropriated funds. We deny the protest. BACKGROUND The RFP solicited proposals for a fixed-price, no-cost contract to provide travel management services for both official and leisure ("unofficial") travel by Marine Corps personnel and other eligible patrons. /1/ The RFP required the successful offeror to provide all personnel, equipment, tools, materials, supervision, and other items or services necessary to perform the management and operation of a Commercial Travel Office (CTO) at eight locations on Okinawa. The services to be provided include air, bus, and rail transportation, lodging and rental car reservations, and as to international travel, supplemental travel services. /2/ The RFP advised offerors that there was no guaranteed minimum purchase, but provided estimates which indicated approximately $14.95 million in official travel and approximately $92,500 in unofficial travel. The RFP contemplated a 1-year base period with eight 6-month option periods. All costs of operation under the contract were to be borne by the successful contractor. In this regard, the contractor is compensated by means of the commissions it receives for booking government travelers with airlines, hotels, and other providers of transportation and lodging. In addition, the contractor proposes a discount on the official travel it books. The performance work statement defines discounts as "Reductions by the Contractor . . . stated as a percentage of total official air, bus and rail travel sales and/or as a percentage of commissions received by the contractor for sales executed by third parties." RFP Sec. C-1.12, at 28. With regard to proposal of the discount, the RFP Sec. B 0001, at 1, states: Air Travel Discount: The discount on airfares provided by the contractor is to be a percentage of the total ticket costs paid by the contractor to the suppliers for official transportation for official travel purposes. Contractors not paid the industry standard airline commission rates by the airlines will state what percentage of the anticipated standard commission rate will be provided as the contractor's air travel discount on this contract as though the contractor were receiving the standard commission. Then such contractors shall apply their stated percentage of the standard airline commission rates to the Government's total air official travel purchases. For all contractors, the discount will be reflected as an up-front reduction on the base fare of each official commissionable ticket as described in the line items below. Prior to the closing time for receipt of proposals, N&N filed this protest. Subsequent to the filing of the protest, two offerors submitted proposals. DISCUSSION N&N argues that the RFP's no-cost award basis violates the prohibition against the improper augmentation of appropriated funds. In the protester's view, the improper augmentation stems from the contractor's supply of various travel services at no cost to the government. In this regard, N&N maintains that there is no consideration for the contract and that the commissions from the airlines cannot be considered an adequate substitute for payment by the government. We disagree. Unless otherwise authorized, an agency may not retain for its own use any funds received for the use of the United States; instead it must deposit all such funds in the general fund of the Treasury as miscellaneous receipts. 31 U.S.C. Sec. 3302 (1994). Failure to do so constitutes an improper augmentation of the agency's appropriation.