CW Government Travel, Inc., B-295530, March 7, 2005

B-295530 Mar 07, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights CW Government Travel, Inc. (CWGTI) protests the adequacy of the guaranteed minimum amount for request for proposals (RFP) No. W91QUZ-04-R-0014, issued by the Department of the Army for commercial travel office services under the developmental, automated Defense Travel System (DTS) program. We deny the protest. View Decision B-295530, CW Government Travel, Inc., March 7, 2005 Decision Matter of: CW Government Travel, Inc. File: B-295530 Date: March 7, 2005 Lars E. Anderson, Esq., Benjamin A. Winter, Esq., and Julia M. Kiraly , Esq. , Venable LLP, for the protester. Raymond M. Saunders, Esq., Maj. Anissa N. Parekh, Department of the Army, for the agency. Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging a solicitation's guaranteed minimum amount for an indefinite-delivery, indefinite-quantity contract is denied where the record shows that the minimum is more than nominal. DECISION CW Government Travel, Inc. (CWGTI) protests the adequacy of the guaranteed minimum amount for request for proposals (RFP) No. W91QUZ-04-R-0014, issued by the Department of the Army for commercial travel office services under the developmental, automated Defense Travel System (DTS) program. We deny the protest. The RFP anticipates multiple awards of indefinite-delivery, indefinite-quantity (ID/IQ) contracts for Department of Defense (DOD) wide travel agent services. The base ordering period is 2 years, with three 1-year option ordering periods. Subsequent task orders will be competed among the contract awardees. The DTS services are intended to replace "traditional" travel services, which require direct communication between government travel customers and travel agents, with an automated, paperless system. However, because of ongoing transition efforts, the contractors will be required to provide traditional, as well as DTS, services. The RFP seeks to consolidate and standardize travel services within DOD under a single procuring activity. Task orders will be issued for various worldwide regions, and the task order amounts will consist of transaction fees to be paid to the contractors. Individual DOD activities will place travel orders with the contractors which have received task orders; the contractor will process the travel transaction using the ordering activity's funds, and will receive a fee for each transaction processed. CWGTI argues that the guaranteed minimum amount set forth in the RFP to be ordered from each contractor is no more than nominal, and is insufficient consideration to form a binding contract. In this respect, the RFP specified that the guaranteed minimum amount for the ID/IQ contract would be $2,500, and that the minimum and maximum orders allowed under the contract would be15,000,000 and $150,000,000, respectively. RFP amend. 2, at 30; RFP amend. 1, at 20. The agency established the $2,500 minimum based on its review of minimums in existing General Services Administration (GSA) Federal Supply Schedule (FSS) travel contracts, and also "considered the dollar amounts for travel transaction fees under other travel-related contracts in determining the mandatory minimum here." Memorandum of Law at 3-4, 6; Contracting Officer's Statement at 4. Contractors which receive task orders here will receive payment--a transaction fee--for each travel transaction the contractor processes. An agency may use an ID/IQ contract where it cannot predetermine, above a specified minimum, the precise quantity of supplies or services that will be required during the contract period and where it is inadvisable for the government to commit itself for more than a minimum quantity. Federal Acquisition Regulation (FAR) 16.504(b); Aalco Forwarding, Inc., et al. , B-277241, B-277241.15, Mar. 11, 1998, 98-1 CPD 87 at 6. Because an ID/IQ contract does not specify the precise work that will be provided and is not a requirements contract, a specific guaranteed amount or quantity is required as consideration to bind the parties. Aalco Forwarding, Inc. , supra . To ensure that a contract is binding, the minimum quantity must be more than a nominal amount, but should not exceed the amount the agency is fairly certain to order. FAR 16.504(a). There is no "magic number" that the FAR or our decisions set as adequate consideration for a contract; instead, the determination of whether a stated minimum quantity is "nominal" must consider the nature of the acquisition as a whole. Carr's Wild Horse Ctr. , B-285833, Oct. 3, 2000, 2000 CPD 210 at 3; ABF Freight Sys., Inc. , et al. , B-291185, Nov. 8, 2002, 2002 CPD 201 at 4; Sea-Land Serv., Inc. , B-278404, et al. , Feb.