This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2018 decision in Western Pilot Service, the U.S. Government Accountability Office (GAO) ruled that the Department of the Interior improperly sole-sourced flight services for its wildlife suppression operations. The GAO found that the Department improperly expanded the scope of an on-call services contract, which was awarded pursuant to a public tendering process, to subsequently include regularly scheduled services:
The protesters contend that the SEAT flight services contemplated under the TORP are beyond the scope of their on-call IDIQ contracts. In this respect, the protesters argue that the way in which flight services will be provided pursuant to the TORP is materially different than how services are provided under the on-call contract. In addition, the protesters point to decades of prior practice and the relevant procurement history as evidence that exclusive-use SEAT flight services and on-call SEAT flight services warrant separate procurements. According to the protesters, because they could not have anticipated that their on-call contracts would be the vehicle used to procure SEAT flight services for extended, guaranteed periods of time, the TORP reflects an out-of-scope modification of their contracts.
The GAO provided the following summary to explain its analysis for determining whether assignments that are delivered under standing agreements fall outside the scope of the original contract award and require a new open tendering process:
When a protester alleges that the issuance of a task or delivery order under an IDIQ contract is beyond the scope of the underlying contract, and thus falls within CICA’s competition requirement, our Office examines whether the order is materially different from the original contract, as reasonably interpreted. DynCorp Int’l LLC, supra; Floro & Assocs., B-285451.3, B-285451.4, Oct. 25, 2000, 2000 CPD ¶ 172 at 6. Evidence of a material difference is found by reviewing the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued. Symetrics Indus., Inc., B-289606, Apr. 8, 2002, 2002 CPD ¶ 65 at 5. Additionally, we consider whether the agency itself has historically procured the task order services under a separate contract, such that it appears that the agency itself has viewed the task order services as separable and essentially different in nature. Data Transformation Corp., B-274629, Dec. 19, 1996, 97-1 CPD ¶ 10 at 6. The overall inquiry is whether the order is of a nature which potential offerors reasonably would have anticipated. DynCorp Int’l, LLC, supra, at 7-8 (sustaining protest of out-of-scope task order where services required under a TORP were not reasonably contemplated when the IDIQ contracts were awarded, even though there was some overlap in the services requested in the TORP and those required under the IDIQ contracts).
In applying the above-noted scoping factors, the GAO determined that the scheduled flight services fell outside of the scope of the original contract since the original contract only contemplated ad hoc on-call services and scheduled flight services had historically been procured under separate contracts:
Here, we find that SEAT flight services for guaranteed periods of at least 75 days at predetermined locations are beyond the scope of the protesters’ on-call contracts. At the outset, we recognize that both the IDIQ contracts and the TORP at issue involve the acquisition of SEAT flight services to assist BLM in the suppression of wildland fires.
Our analysis on scope issues, however, does not focus solely on a comparison of the specific services being procured. In this respect, as explained above, a variety of factors are pertinent to our Office’s assessment of whether an order (or solicitation for an order) falls within the scope of an underlying contract. As discussed below, we agree with the protesters that the obligations of the contractors under the on-call contract, as compared to what is contemplated by the TORP, are materially different. Consequently, the protesters could not have anticipated a task order competition for extended, guaranteed periods of performance at the time they submitted proposals. We sustain the protest on this basis.
The TORP essentially converts the on-call contracts into exclusive-use procurement vehicles; the agency’s contentions otherwise are unavailing.16 The two types of SEAT flight services, however, rely on fundamentally different service models. As noted above, the on-call orders provide for SEAT flight services for emergencies or surge requirements: services are sought when needed, on a daily basis, for ostensibly shorter periods of time, with the aircraft transitioning from and mobilizing to various locations throughout the wildfire season, depending on the emergent wildfire conditions. See AR, exh. 12, Representative On-Call Contract, at 6-9; exh. 3, On-Call Acquisition Plan, at 1, 4. The exclusive-use TORP, on the other hand, contemplates that aircraft will be prepositioned at one location by a predetermined date for an extensive period of 75 days or more, reserved exclusively for BLM use during the full performance period. TORP at 1-2. We agree with the protesters that the structure of how the SEAT flight services will be performed under the TORP, which generally mirrors what was contemplated under the exclusive-use procurement, is notably different than what was anticipated pursuant to the on-call contracts.
Hence, the GAO concluded that the Department was attempting to rescope its original on-call service contract into a completely different arrangement under the guise of the original on-call services award. Since this scope change was in breach of the open procurement rules, the GAO ordered that the related contract assignments be terminated and the Department either put those requirements to open tender or, if appropriate, seek a sole-source justification for those services.
As this case illustrates, the open competition rules requiring government bodies to conduct open competitive bidding for the acquisition of goods and services will not typically permit post-award material scope changes that convert validly competed contracts into platforms for non-competed, out-of-scope work. Purchasing institutions should therefore be careful to properly scope their solicitations to ensure that the scope of awarded contracts meets their intended future needs.