B-225641, MAY 20, 1987, 66 COMP.GEN. 474

B-225641: May 20, 1987

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GENERAL ACCOUNTING OFFICE WILL NOT REVIEW AGENCY DECISION NOT TO EXERCISE AN OPTION IN INCUMBENT/PROTESTER'S CONTRACT FOR TRAVEL SERVICES AS EXERCISE OF OPTION IS A MATTER OF CONTRACT ADMINISTRATION. AGENCY DECISION TO ENCOURAGE NONAPPROPRIATED FUND ACTIVITIES TO EXPAND THEIR UNOFFICIAL TRAVEL SERVICES FUNCTIONS IS AN EXECUTIVE AGENCY DECISION NOT TO USE THE PROCUREMENT SYSTEM AND. IS NOT REVIEWABLE BY THE GENERAL ACCOUNTING OFFICE. 3. CLAIM FOR COSTS OF PURSUING BID PROTEST IS DENIED WHERE PROTEST IS DISMISSED. THE ARMY'S DECISION TO ALLOW ITT'S TO PERFORM THESE TRAVEL SERVICES IS A DE FACTO SOLE-SOURCE CONTRACT AWARD TO THE ITT'S. BARBAROSSA ALSO CONTENDS THAT THIS ALLEGED CONTRACT BETWEEN THE ARMY AND THE ITT'S INCLUDES SERVICES RELATED TO BOTH OFFICIAL AND UNOFFICIAL TRAVEL AND SPECIFICALLY INCLUDES THE TRAVEL SERVICES THAT WERE THE SUBJECT OF BARBAROSSA'S CONTRACT.

B-225641, MAY 20, 1987, 66 COMP.GEN. 474

PROCUREMENT - CONTRACT MANAGEMENT - CONTRACT ADMINISTRATION - OPTIONS - USE - GAO REVIEW 1. GENERAL ACCOUNTING OFFICE WILL NOT REVIEW AGENCY DECISION NOT TO EXERCISE AN OPTION IN INCUMBENT/PROTESTER'S CONTRACT FOR TRAVEL SERVICES AS EXERCISE OF OPTION IS A MATTER OF CONTRACT ADMINISTRATION. PROCUREMENT - BID PROTESTS - NON-APPROPRIATED FUNDS - GAO REVIEW 2. GENERAL ACCOUNTING OFFICE HAS NO AUTHORITY UNDER COMPETITION IN CONTRACTING ACT OF 1984 TO REVIEW A PROTEST WHICH CONCERNS AN AGENCY DECISION NOT TO CONDUCT A PROCUREMENT TO OBTAIN UNOFFICIAL, NONGOVERNMENT TRAVEL SERVICES. AGENCY DECISION TO ENCOURAGE NONAPPROPRIATED FUND ACTIVITIES TO EXPAND THEIR UNOFFICIAL TRAVEL SERVICES FUNCTIONS IS AN EXECUTIVE AGENCY DECISION NOT TO USE THE PROCUREMENT SYSTEM AND, THEREFORE, IS NOT REVIEWABLE BY THE GENERAL ACCOUNTING OFFICE. 3. CLAIM FOR COSTS OF PURSUING BID PROTEST IS DENIED WHERE PROTEST IS DISMISSED.

BARBAROSSA REISESERVICE GMBH:

BARBAROSSA REISESERVICE GMBH PROTESTS THE ACTIONS OF THE DEPARTMENT OF THE ARMY IN NOT EXERCISING AN OPTION IN A TRAVEL SERVICES CONTRACT BETWEEN THE ARMY AND BARBAROSSA AND IN AUTHORIZING THE INFORMATION, TOUR AND TRAVEL (ITT) OFFICES /1/ LOCATED AT VARIOUS MILITARY INSTALLATIONS THROUGHOUT WEST GERMANY TO PERFORM THE SAME SERVICES. BARBAROSSA CONTENDS THAT, EVEN THOUGH THE ARMY ISSUED NO SOLICITATION OR CONTRACT DOCUMENTS, THE ARMY'S DECISION TO ALLOW ITT'S TO PERFORM THESE TRAVEL SERVICES IS A DE FACTO SOLE-SOURCE CONTRACT AWARD TO THE ITT'S. BARBAROSSA ALSO CONTENDS THAT THIS ALLEGED CONTRACT BETWEEN THE ARMY AND THE ITT'S INCLUDES SERVICES RELATED TO BOTH OFFICIAL AND UNOFFICIAL TRAVEL AND SPECIFICALLY INCLUDES THE TRAVEL SERVICES THAT WERE THE SUBJECT OF BARBAROSSA'S CONTRACT.

WE DISMISS THE PROTEST.

THE ARMY DENIES THAT ANY OFFICIAL TRAVEL SERVICES ARE AUTHORIZED UNDER ITS AGREEMENT WITH THE ITT'S. THE ARMY CONTENDS THAT OUR OFFICE HAS NO JURISDICTION OVER THIS MATTER ESSENTIALLY BECAUSE IT INVOLVES ONLY UNOFFICIAL OR PRIVATE TRAVEL AND THE PURCHASERS (ARMY PERSONNEL AND THEIR FAMILIES) WILL PAY FOR THE TICKETS, AND THE AIRLINES WILL PROVIDE COMMISSIONS TO REIMBURSE THE ITT'S, WITHOUT EXPENDITURE OF APPROPRIATED FUNDS. THE ARMY ALSO ARGUES THAT OUR OFFICE HAS NO JURISDICTION BECAUSE NO ARMY ACTIVITY OR CONTRACTING OFFICER HAS ISSUED A SOLICITATION AND NO WRITTEN CONTRACT HAS BEEN AWARDED. THE ARMY ASSERTS THAT "BARBAROSSA IS PROTESTING AN ARMY MANAGEMENT DECISION TO HAVE A FUNCTION PERFORMED INTERNALLY BY A (NONAPPROPRIATED FUND INSTRUMENTALITY) INSTEAD OF BEING CONTRACTED-OUT DURING AN INTERIM PERIOD UNTIL A NEW COMPETITIVE PROCUREMENT CAN BE COMPLETED."

UNDER THE COMPETITION IN CONTRACTING ACT OF 1984 (CICA), 31 U.S.C. 3551 ET SEQ. (SUPP. III 1985), AND OUR IMPLEMENTING BID PROTEST REGULATIONS, 4 C.F.R. 21.2(A) (1986), OUR OFFICE CONSIDERS PROTESTS THAT INVOLVE SOLICITATIONS ISSUED BY OR FOR FEDERAL AGENCIES FOR THE PROCUREMENT OF PROPERTY OR SERVICES. SEE LAC COURTE OREILLES DEVELOPMENT CORP., B-224668, SEPT. 24, 1986, 86-2 CPD 346. IT IS NOT NECESSARY FOR OUR OFFICE TO FIND A DIRECT OR INDIRECT EXPENDITURE OF APPROPRIATED FUNDS IN ORDER TO EXERCISE BID PROTEST JURISDICTION, AS LONG AS THE PROCUREMENT IS CONDUCTED BY OR FOR A FEDERAL AGENCY. ARTISAN BUILDERS, 65 COMP.GEN. 240 (1986), 86-1 CPD 85. THUS, THE REAL ISSUE IS WHETHER THE ARMY'S ACTIONS AMOUNTED TO A PROCUREMENT OF PROPERTY OR SERVICES SO AS TO FALL WITHIN THE PROTEST JURISDICTION OF OUR OFFICE. WE FIND THAT THEY DID NOT.

THE PRESENT RECORD IS VERY LIMITED DUE TO THE FACT THAT NO WRITTEN SOLICITATION OR CONTRACT WAS ISSUED AND DUE ALSO, IN LARGE PART, TO THE FACT THAT THE ARMY INSISTS THAT NO PROCUREMENT ACTION HAS TAKEN PLACE AND THAT OUR OFFICE HAS NO JURISDICTION. THE RECORD SHOWS THAT IN JANUARY 1985, THE UNITED STATES ARMY CONTRACTING CENTER, EUROPE, AWARDED A CONCESSION CONTRACT TO BARBAROSSA TO PROVIDE BOTH OFFICIAL AND UNOFFICIAL TRAVEL AND RELATED SERVICES FOR MILITARY MEMBERS AND CIVILIAN EMPLOYEES OF THE ARMY AND THEIR FAMILIES AT GOVERNMENT FURNISHED FACILITATE IN A NUMBER OF MILITARY COMMUNITIES IN WEST GERMANY. THE CONTRACT CONTAINED OPTION PROVISIONS UNDER WHICH THE ARMY COULD EXTEND THE CONTRACT FOR A PERIOD NOT TO EXCEED 5 YEARS. UNDER THIS CONTRACT, BARBAROSSA RECEIVED A COMMISSION FROM THE RAIL/AIRLINE COMPANIES ON EACH TICKET SOLD AND WOULD REMIT A STATED PERCENTAGE OF ITS GROSS SALES RECEIPTS FOR UNOFFICIAL TRAVEL TO EACH LOCAL MILITARY COMMUNITY'S MORALE, WELFARE, AND RECREATION FUND. DECEMBER 30, 1986, THE ARMY DECIDED NOT TO EXERCISE THE OPTION IN THE BARBAROSSA CONTRACT, BUT RATHER, TO HAVE THE UNOFFICIAL TRAVEL SERVICES PROVIDED BY THE VARIOUS ITT'S, AND ON MARCH 17, 1987, BARBAROSSA'S CONTRACT EXPIRED.

TO THE EXTENT THAT BARBAROSSA PROTESTS THE ARMY'S DECISION NOT TO EXERCISE ITS OPTION TO EXTEND THE BARBAROSSA CONTRACT BEYOND MARCH 17, 1987, THE PROTEST IS NOT APPROPRIATE FOR REVIEW UNDER OUR BID PROTEST AUTHORITY. WHERE, AS APPEARS TO BE THE CASE HERE, THE EXERCISE OF AN OPTION IS SOLELY WITHIN THE GOVERNMENT'S DISCRETION, OUR OFFICE WILL NOT CONSIDER THE INCUMBENT CONTRACTOR'S ARGUMENT THAT THE AGENCY SHOULD EXERCISE THE OPTION AS THAT IS A MATTER OF CONTRACT ADMINISTRATION OUTSIDE THE SCOPE OF OUR BID PROTEST FUNCTION. SYLVAN SERVICE CORP., B-223533, JULY 24, 1986, 86-2 C.P.D 109.

THE DECISION TO ALLOW ITT'S TO PROVIDE TRAVEL SERVICES FOR UNOFFICIAL TRAVEL BY ARMY MEMBERS/CIVILIAN EMPLOYEES AND THEIR FAMILIES IS ALSO BEYOND THE SCOPE OF OUR BID PROTEST AUTHORITY AS DEFINED BY CICA, BECAUSE WE FIND NO ACTIONS BY THE ARMY THAT AMOUNT TO A PROCUREMENT OF PROPERTY OR SERVICES BY A FEDERAL AGENCY. 31 U.S.C.3551. RATHER, WHAT IS INVOLVED HERE IS AN EXECUTIVE AGENCY DECISION NOT TO HAVE THESE SERVICES PROVIDED BY A PARTICULAR COMMERCIAL FIRM (BARBAROSSA) ANY LONGER NOT TO CONDUCT A PROCUREMENT TO OBTAIN THESE SERVICES FROM ANY COMMERCIAL FIRM AT THE PRESENT TIME. THE ARMY REPORTS THAT IT INTENDS TO PREPARE A COMPETITIVE SOLICITATION AND TO AWARD A CONTRACT THEREUNDER BY JANUARY, 1988. IN THE INTERIM (BETWEEN EXPIRATION OF BARBAROSSA'S CONTRACT AND AWARD OF THAT COMPETITIVELY PROCURED CONTRACT), THE ARMY HAS DECIDED TO AUTHORIZE THE ITT'S AT VARIOUS MILITARY COMMUNITIES TO PROVIDE EXPANDED TRAVEL SERVICES FOR UNOFFICIAL TRAVEL ONLY. ACCORDING TO THE ARMY, ITT'S HAVE TRADITIONALLY BEEN LOCATED ON-POST IN ORDER TO PROVIDE A CENTRALIZED LOCATION WHERE AUTHORIZED PERSONNEL CAN RECEIVE TRAVEL INFORMATION AND PLANNING ADVICE FREE OF CHARGE, AS WELL AS INFORMATION CONCERNING ON POST AND OFF-POST CULTURAL ACTIVITIES LIKE CONCERTS, SPORTING EVENTS, ETC. ESSENTIALLY, THE ARMY HAS ENCOURAGED THE ITT'S TO EXPAND SUCH ACTIVITIES, IN CONNECTION WITH LEISURE TRAVEL. WE WILL NOT REVIEW THE ARMY'S EXECUTIVE DECISION NOT TO CONDUCT A PROCUREMENT TO OBTAIN THESE SERVICES IN THESE CIRCUMSTANCES.

WE POINT OUT THAT IN T.V. TRAVEL, INC., ET AL.-- REQUEST FOR RECONSIDERATION, 65 COMP.GEN. 109 (1985), 85-2 CPD 640, WE HELD THAT THE NONCOMPETITIVE CONTRACTS OR OTHER BUSINESS ARRANGEMENTS THAT VARIOUS FEDERAL AGENCIES HAVE WITH SCHEDULED AIRLINE TICKET OFFICES (SATO'S) OR TRAVEL AGENTS TO PERFORM TRAVEL MANAGEMENT SERVICES, FOR OFFICIAL GOVERNMENT TRAVEL ON A NO COST, NO FEE BASIS, ARE PROCUREMENTS SUBJECT TO THE PROCUREMENT LAWS/REGULATIONS AND ARE SUBJECT TO REVIEW BY THIS OFFICE PURSUANT TO OUR BID PROTEST AUTHORITY AS DEFINED BY CICA. THE PRESENT PROTEST, HOWEVER, INVOLVES ONLY UNOFFICIAL TRAVEL (THAT IS, PERSONAL NON- GOVERNMENT TRAVEL), AND THE ARMY DID NOT USE THE PROCUREMENT SYSTEM TO SELECT THE PROVIDER OF THE TRAVEL SERVICES; BOTH OF THESE FACTORS WERE KEY ELEMENTS IN OUR DECISION THAT WE HAD JURISDICTION IN T.V. TRAVEL, INC., ET AL.

IN SUM, THE ARMY DID NOT ISSUE A SOLICITATION OR TAKE ANY ACTION WHICH AMOUNTED TO A PROCUREMENT, SOLE-SOURCE OR OTHERWISE, WHEN IT AUTHORIZED THE ITT'S TO EXPAND THEIR TRAVEL SERVICES FOR UNOFFICIAL TRAVEL. SIMPLY STATED, THE ARMY MADE A DECISION NOT TO PROCURE THESE SERVICES. ACCORDINGLY, THERE IS NOT SUBJECT MATTER FOR US TO REVIEW UNDER OUR CICA AUTHORITY.

BARBAROSSA HAS REQUESTED REIMBURSEMENT OF THE COSTS IT INCURRED IN PURSUING ITS PROTEST. HOWEVER, OUR OFFICE WILL NOT CONSIDER A CLAIM FOR PROTEST COSTS WHERE THE CLAIM HAS BEEN SUBMITTED WITH A PROTEST THAT IS NOT CONSIDERED ON THE MERITS. SEE MONARCH PAINTING CORP., B-220666.3, APRIL 23, 1986, 86-1 CPD 396.

THE PROTEST IS DISMISSED, AND THE CLAIM FOR COSTS IS DENIED.

/1/ ITT OFFICES ARE NONAPPROPRIATED FUND INSTRUMENTALITIES WITH THE MISSION TO PROVIDE RECREATIONAL OR UNOFFICIAL TRAVEL INFORMATION AND TICKET RESERVATION SERVICES TO MILITARY MEMBERS, AUTHORIZED CIVILIAN ARMY EMPLOYEES, AND THEIR FAMILY MEMBERS.