Expiration of the SOSI FSS Contract
AllWorld alleges that issuance of the task order to SOSI also
was improper because its underlying FSS contract expired just
three days after the agency issued the task order. As noted, the
agency originally issued the task order to SOSI on April 21,
2015. The record shows that SOSI’s underlying FSS contract ended
just three days later, on April 24. AR, exh. 9, SOSI Quotation
Cover Letter, at 2. According to the protester, because the SOSI
FSS contract was set to expire just three days after issuance of
the original task order, it was improper to issue the task order
to SOSI because the agency cannot, for example, exercise any of
the options included in the task order.
The agency responds that it was unobjectionable to issue the
task order to SOSI, notwithstanding the fact that its underlying
FSS contract was set to expire. The agency points out that
SOSI’s underlying FSS contract provides for the completion of
orders issued during the FSS contract’s effective period, even
if performance occurs after expiration of that period. GSA also
takes the position that exercising the options under the task
order would be unobjectionable because the exercise of the
options does not constitute placement of a new order under
SOSI’s FSS contract.
The record shows that SOSI’s FSS contract includes, in pertinent
part, the following Federal Acquisition Regulation (FAR)
provision:
(d) Any order issued during the
effective period of this contract and not completed within
that period shall be completed by the Contractor within the
time specified in the order. The contract shall govern the
Contractor’s and Government’s rights and obligations with
respect to that order to the same extent as if the order were
completed during the contract’s effective period. . . .
FAR § 52.216-22. Thus, GSA is correct
that SOSI’s underlying FSS contract contemplates the
circumstances here, namely, a situation where the agency issues
a task order that includes a period of performance extending
beyond the point in time when the underlying FSS contract
expires. It follows that GSA properly could have issued the task
order to SOSI prior to the expiration of its FSS contract.
However, we disagree with GSA that it properly may exercise any
of the options included in the task order after SOSI’s
underlying FSS contract expired. Task orders under FSS contracts
are not themselves stand-alone contracts. Rather, the rights and
liabilities of the parties under every FSS task order are
governed by, and subject to, the terms and conditions of the
underlying FSS contract. As reflected in the FAR provision
quoted above, “[t]he contract [that is, the underlying FSS
contract] shall govern the Contractor’s and Government’s rights
and obligations with respect to that order to the same extent as
if the order were completed during the contract’s effective
period.” FAR § 52.216-22(d).
Exercising an option under a task order creates new contractual
responsibilities for each party. Here, for example, unless and
until the options actually are exercised by the agency, SOSI is
not legally obligated to provide the services contemplated by
the options and, correspondingly, GSA is not legally obligated
to pay for those services. However, those new contractual
responsibilities do not exist in a vacuum, but instead arise
under, and are governed by, the terms and conditions of the
underlying FSS contract. It follows that GSA cannot legally
exercise the options included in the task order without a valid
underlying FSS contract.
Our view in this connection is consistent with guidance
explicitly found on GSA’s FSS ordering guidelines website. In
particular, GSA’s website provides as follows:
Options may be included on orders
placed against GSA Multiple Award Schedule (MAS) contracts,
provided that the options are clearly stated in the
requirement and are evaluated as part of the ordering
activity’s best value determination. Such options may be
exercised on GSA Schedule contract orders, provided that:
Funds are available;
The requirement covered by the option fulfills an existing
government need;
Prior to exercising an option, the ordering activity ensures
that it is still in the government’s best interest, i.e., that
the option is the most advantageous method of fulfilling the
government's need, price, and other factors considered; and
The options do not extend beyond the period of the Schedule
contract, including option year periods.
See http://www.gsa.gov/portal/content/200369
(last visited on January 6, 2016; emphasis supplied).
In addition, GSA’s position in this case is directly
contradicted by advice it provided in connection with another
case considered by our Office. That case involved circumstances
where the Air Force was considering issuing a task order against
a firm’s FSS contract. The Air Force sought GSA’s advice on the
question of whether or not the agency could issue a task order
to a firm whose FSS contract expired before exercise of options
contemplated under that task order was to occur, and GSA advised
that it would be improper to issue a task order under those
circumstances. As described in our decision:
On August 29, the Air Force contract specialist contacted the
GSA team lead and sought her opinion about whether the agency
could exercise an option after the GSA schedule contract
expired. In response, the GSA team lead stated that "[a]lthough
the Contractor is obligated to complete the Task Order (even if
the contract expires) you CANNOT exercise a Task Order Option if
the base Contract is Expired."
HP Enterprise Serv’s, LLC, B-405692, Dec. 14, 2011, 2012 CPD ¶
13 at 3.
In light of these considerations, we conclude that, while GSA’s
issuance of the task order to SOSI was not, in and of itself,
legally objectionable, the agency cannot properly exercise any
of the options included under the task order. The practical
effect of this limitation is that, while the RFQ contemplated
issuance of a task order with a potential period of performance
of three years, the task order issued to SOSI may only be
performed for a period of one year. Similarly, the RFQ
contemplated a task order that had a base quantity of 24
linguists during each year of performance, and optional
quantities of, respectively, 20, 15 and 13 additional linguists
during the three years of performance. AR, exh. 6a, Mandatory
Pricing Template. None of these optional quantities is available
under the task order issued to SOSI. These limitations are of
particular concern in light of the fact that the Air Force, not
GSA, is the actual acquiring activity here, and there is no
indication in the record that this truncated task order will
meet the Air Force’s actual requirements.
(AllWorld
Language Consultants, Inc. B-411481.3: Jan 6, 2016)
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