By: Paul Emanuelli
This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
Specification Change Ruled Out-of-Scope
In its October 2019 decision in Leupold Stevens, Inc., the U.S. Government Accountability Office (GAO) found that the Navy made out-of-scope changes to the technical specifications in a contract for the production of gun scopes. As the GAO determined, the original specifications called for a wire viewing reticle for shooters to look through, but then changed that specification after award to glass-etched reticles that required an additional lighting function. While the GAO noted that it generally does not regulate matters of post-award contract administration, contract amendments remain subject to review to determine whether those changes fall outside the scope of the contract to determine if the new requirement is actually a sole-source that should be subject to a new procurement process:
Our Office will generally not review protests of allegedly improper contract modifications because such matters relate to contract administration and are beyond the scope of our bid protest function. 4 C.F.R. § 21.5(a); DOR Biodef., Inc.; Emergent BioSols., B-296358.3, B-296358.4, Jan. 31, 2006, 2006 CPD ¶ 35 at 6. Even if a contract modification arguably is significant, absent a showing that the modification is beyond the scope of the original contract, we view the modification as matter of contract administration. Alliant Sols., LLC, B-415994, B-415994.2, May 14, 2018, 2018 CPD ¶ 173 at 7. However, we will consider protests where, as here, it is alleged that a contract modification improperly exceeds the scope of the contract and therefore should have been the subject of a new procurement. See Western Pilot Serv. et al., B-415732 et al., Mar. 6, 2018, 2018 CPD ¶ 104 at 6. We do so because the protester is alleging that the agency has subverted competition by awarding–without competition–work that would otherwise be subject to the statutory requirement for full and open competition under the Competition in Contracting Act of 1984 (CICA). See 10 U.S.C. § 2304(a); Makro Janitorial Servs., Inc., B-282690, Aug. 18, 1999, 99-2 CPD ¶ 39 at 3 (sustaining protest where contract modification and task order were beyond the scope of the underlying IDIQ contract).
As the GAO noted, when reviewing a challenged contract amendment, the issue will turn on whether the amendment constitutes a material change to the originally awarded contract. The relevant factors include, among other things, the cost of that change and whether the original solicitation properly advised potential bidders that the scope would include the contemplated changes:
In determining whether a contract modification is beyond the scope of the underlying contract and thereby triggers applicable competition requirements, we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Makro Janitorial Servs., Inc., supra, at 3; see also Booz Allen Hamilton Eng’g Servs., LLC, B-411065, May 1, 2015, 2015 CPD ¶ 138 at 6-7; MCI Telecomms. Corp., B-276659.2, Sept. 29, 1997, 97-2 CPD ¶ 90 at 7. To determine whether such a material difference exists, we review the circumstances attending the procurement that was conducted; examine changes in the type of work, performance period, and costs between the contract as awarded and as modified; and consider whether the original contract solicitation adequately advised offerors of the potential for this type of modification and thus whether the modification could have changed the field of competition. Alliant Sols., supra, at 7; see also Western Pilot Serv., et al., supra, at 6.
In considering the technical factors behind the amendment, the GAO determined that the modification to the specifications fell outside the scope of the original contract since making that change required the acquisition of additional illumination functions that went beyond the original specifications. The GAO therefore recommended that the contract amendment be struck, and that the Navy reconsider its requirements and, if necessary, obtain the additional requirements through a new competitive bidding process.
As this case illustrates, the technical scoping of contract requirements needs to be executed with precision since specifications that are drafted too narrowly may result in limiting the purchasing options of an institution once a contract is awarded.
