B-224254.2, NOV 5, 1986, 86-2 CPD 519

B-224254.2, NOV 5, 1986, 86-2 CPD 519

PROCUREMENT - CONTRACT DISPUTES - GAO REVIEW PROCUREMENT - CONTRACT MANAGEMENT - CONTRACT ADMINISTRATION - OPTIONS - USE - GAO REVIEW DIGEST: PROTEST THAT THE CONTRACTING AGENCY SHOULD HAVE EXERCISED AN OPTION IN THE PROTESTER'S CONTRACT RATHER THAN EMPLOYING CIVIL SERVANTS TO PERFORM THE SERVICES AND THAT THE CONTRACTING AGENCY'S FAILURE TO DO SO CONSTITUTED INTERFERENCE WITH THE PROTESTER'S PERFORMANCE OF ITS EXISTING CONTRACT DOES NOT INVOLVE THE QUESTION OF AN ILLEGAL OR IMPROPER AWARD OR PROPOSED AWARD AND IS THEREFORE INAPPROPRIATE FOR RESOLUTION UNDER THE GENERAL ACCOUNTING OFFICE BID PROTEST FUNCTION.

MCGREGOR FSC, INC.-- RECONSIDERATION:

MCGREGOR FSC, INC. (MCGREGOR) REQUESTS RECONSIDERATION OF OUR DISMISSAL OF ITS PROTEST THAT THE NAVY WAS IMPROPERLY INTERFERING WITH THE PERFORMANCE OF ITS CONTRACT (NO. N68836-84-C-0069) FOR COUNSELING SERVICES AT THE NAVY'S FAMILY SERVICE CENTER (FSC), ORLANDO, FLORIDA.

WE AFFIRM THE DISMISSAL.

IN ITS INITIAL PROTEST, FILED WITH OUR OFFICE ON SEPTEMBER 30, 1986, MCGREGOR STATED THAT THE NAVY, ON JULY 19, 1986, HAD GIVEN PRELIMINARY NOTICE THAT IT WOULD EXERCISE THE OPTION IN THE CONTRACT TO EXTEND CERTAIN SERVICES THROUGH SEPTEMBER 30, 1987. HOWEVER, ON AUGUST 6, 1986, THE NAVY NOTIFIED MCGREGOR THAT THE OPTION WOULD NOT AFTER ALL BE EXERCISED BECAUSE OF "CHANGES IN GOVERNMENT REQUIREMENTS." MCGREGOR FURTHER STATED THAT IT SUBSEQUENTLY BECAME AWARE THAT THERE WERE NO CHANGES IN THE GOVERNMENT'S REQUIREMENTS AS EVIDENCED BY THE FACT THAT THE NAVY WAS OFFERING CIVIL SERVICE POSITIONS TO MCGREGOR'S EMPLOYEES TO CONTINUE THE SERVICES WHICH WOULD OTHERWISE BE PERFORMED BY MCGREGOR UNDER THE OPTION. MCGREGOR CONTENDED THAT THE NAVY WAS DISREGARDING THE REQUIREMENTS OF OMB CIRCULAR NO. A-76 IN CONVERTING CONTRACTOR WORK TO IN-HOUSE PERFORMANCE. MCGREGOR THEREFORE CONCLUDED THAT THE NAVY'S CREATION OF CIVIL SERVICE POSITIONS FOR THESE SERVICES CONSTITUTED AN "UNLAWFUL INTERFERENCE" WITH ITS CONTRACT. ACCORDINGLY, MCGREGOR REQUESTED THAT OUR OFFICE DIRECT THE CONTRACTING OFFICER TO WITHDRAW HIS LETTER IN WHICH HE INFORMED MCGREGOR THAT THE OPTION WOULD NOT BE EXERCISED AND ALSO REQUESTED THAT OUR OFFICE DIRECT THE NAVY TO "CEASE AND DESIST" FROM FURTHER INTERFERENCE WITH ITS CONTRACT. WE DISMISSED THE PROTEST BECAUSE MCGREGOR'S ASSERTION THAT THE NAVY SHOULD BE DIRECTED, IN EFFECT, TO EXERCISE THE OPTION IN ITS CONTRACT CONCERNED A MATTER OF CONTRACT ADMINISTRATION WHICH IS OUTSIDE THE SCOPE OF OUR BID PROTEST PROCESS. BID PROTEST REGULATIONS, 4 C.F.R. SEC. 21.3(F) (1986).

IN ITS REQUEST FOR RECONSIDERATION, MCGREGOR ARGUES THAT WE MISCHARACTERIZED ITS INITIAL PROTEST AND THAT, ACCORDING TO MCGREGOR, ITS PROTEST DEALT WITH WHETHER THERE WAS UNLAWFUL INTERFERENCE BY THE NAVY WITH ITS CONTRACT BY THE DECISION TO MOVE CONTRACTOR PERFORMANCE IN-HOUSE WITHOUT COMPLYING WITH THE REQUIREMENTS OF OMB CIRCULAR NO. A 76.

UNDER OUR REGULATIONS, OUR OFFICE CONSIDERS PROTEST ALLEGING ILLEGAL OR IMPROPER ACTIONS ON THE PART OF PROCUREMENT OFFICIALS IN THE AWARD OR PROPOSED AWARD OF CONTRACTS. 4 C.F.R. SEC. 21.1. THE MATTER RAISED BY MCGREGOR, HOWEVER, NO MATTER HOW IT IS CHARACTERIZED, DOES NOT INVOLVE THE QUESTION OF AN ILLEGAL OR IMPROPER AWARD OR PROPOSED AWARD OF A CONTRACT. ACCORDINGLY, WE REMAIN OF THE VIEW THAT THIS MATTER IS INAPPROPRIATE FOR RESOLUTION UNDER OUR BID PROTEST REGULATIONS.

WE AFFIRM THE PRIOR DISMISSAL.