BNUMBER: B-262003.2
DATE: January 25, 1996
TITLE: Sprint Communications Company, L.P.
**********************************************************************
REDACTED DECISION
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:Sprint Communications Company, L.P.
File: B-262003.2
Date: January 25, 1996
David S. Cohen, Esq., Carrie B. Mann, Esq., Cohen & White; and George
Affe, Esq., Ronald Fouse, Esq., and Anthony Cogswell, Esq., Sprint
Communications Company, L.P., for the protester.
Francis J. O'Toole, Esq., Robert J. Conlan, Jr., Esq., Joseph C. Port,
Jr., Esq., and Michael L. Shore, Esq., Sidley & Austin; and Nathaniel
Friends, Esq., and Steven W. DeGeorge, Esq., AT&T Corporation, for
AT&T Corporation, an interested party.
Carl Wayne Smith, Esq., and H. Jack Shearer, Esq., Defense Information
Systems Agency, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that a sole source award of a 15-month bridge contract to AT&T
for continued provision of the Department of Defense's
telecommunications system used in support of command, control,
communication and intelligence requirements until completion of a
pending competition is improper is denied where the record shows that
the agency: (1) properly justified and published its intent to award
an interim sole source contract; (2) planned to hold a competition for
these services by the end of AT&T's existing contract, but was unable
to complete the planning required to do so; and (3) has reasonably
concluded that while other offerors might perform portions of the work
included in the interim contract, the agency's needs would be best
served by avoiding further piecemeal competitions and continuing its
plans to competitively award several contracts designed to achieve
significant economies of scale.
DECISION
Sprint Communications Company, L.P. protests the decision of the
Defense Information Systems Agency (DISA) to award a sole source
contract to AT&T Corporation to bridge the gap between the expiration
of AT&T's Defense Commercial Telecommunications Network (DCTN)
contract, and the expected award of several competitive procurements
collectively referred to as the Defense Information System Network
(DISN) contracts. Sprint argues that the sole source award of a
15-month bridge contract is improper, and claims that the agency is
improperly consolidating additional services onto the contract that
could be awarded by competition. In a supplemental protest, Sprint
argues that the vehicle used to consolidate the additional services
onto the DCTN contract is a July 14 agreement between AT&T and the
agency, which, Sprint contends, is an improper sole source letter
contract.
We deny the protests.
BACKGROUND
The expiring DCTN contract here was awarded to AT&T on March 28, 1984.
Under the contract, AT&T provides the agency with "a leased, long-haul
telecommunications system providing end-to-end common user, switched
voice and video, and dedicated data service in support of DOD
[Department of Defense] command, control, communication and
intelligence (C3I) requirements." WilTel, Inc. v. DISA, GSBCA No.
12310-P, 93-3 BCA para. 25,982 at 129,194, 1993 BPD para. 106 at 3. The DCTN
contract initially contemplated a 10-year service life, but because of
a 2-year delay in implementing the network, the agency (in 1986)
extended the planned expiration of the DCTN contract from March 1994
to February 29, 1996.[1] Currently, DISA estimates that the DCTN
contains 22,000 switched voice circuits, 200 video circuits, and 5,000
dedicated, point-to-point circuits. First Agency Report, Aug. 23,
1995, at 28.
Since the award of the DCTN contract in 1984, there have been
substantial changes in the telecommunications industry, including the
ripple effects of the divestiture of AT&T, and the emergence of new
technologies involving the blending of the telecommunications industry
and the information services industry. As a result, DISA has been
planning to hold major competitions for each of several segregable
components of the agency's planned network of information services,
the so-called DISN contracts.[2]
As part of the effort to plan for this competitive procurement, the
agency held a DISN Industry Day on September 30, 1993. During the
presentation, attended by approximately 800 representatives of the
telecommunications industry (including representatives of Sprint), the
then-Director of DISA provided information about the upcoming
procurements "to assist industry in planning for further DISA
acquisitions." Sept. 1993 DISA Briefing Packet at 1. On that day,
DISA announced that the planned competitive procurements would not be
completed by the scheduled February 29, 1996, expiration of AT&T's
DCTN contract, and distributed a schedule showing a 15-month extension
of the contract. Id. at 45.
On June 29, 1995, the agency published in the Commerce Business Daily
(CBD) a notice announcing the award of an interim sole source contract
to AT&T to allow the transition from the DCTN contract to the
competitively awarded DISN component contracts. The notice advises
that the interim award will cover a period of 15 months, from February
29, 1996, to May 28, 1997. The notice states that an interim sole
source contract is justified under 10 U.S.C. sec. 2304(c)(1) and (c)(6)
(1994), permitting award without competition where there is only one
responsible source for the supplies or services, and where a sole
source award is required for purposes related to national security,
respectively. On June 30, the agency formally approved a
Justification and Approval document (J&A) in support of the contract
action. Within 10 working days of the CBD notice, Sprint filed its
protest with our Office.
The Findings in the J&A
The J&A concludes that a sole source award to AT&T is justified under
10 U.S.C. sec. 2304(c)(1), which, as stated above, authorizes the use of
other than competitive procedures when the supplies or services needed
by the agency are available from only one responsible source, or from
a limited number of responsible sources, and no other product will
satisfy the agency's needs.[3] In addition, the J&A cites Federal
Acquisition Regulation (FAR) sec. 6.302-1(a)(2)(iii), which implements 10
U.S.C. sec. 2304(d)(1)(B), permitting the agency to conclude that
services are
"available only from the original source in the case of follow-on
contracts for the continued provision of highly specialized
services when it is likely that award to any other source would
result in (A) substantial duplication of cost to the [g]overnment
that is not expected to be recovered through competition, or (B)
unacceptable delays in fulfilling the agency's requirements."
FAR sec. 6.302-1(a)(2)(iii).
In reaching its conclusion, the J&A explains that replacing the
current DCTN services "requires extraordinary efforts of contracting,
engineering, implementation, and transition activities which cannot be
completed by the mandatory contract expiration date." J&A, June 30,
1995, at 1. In addition, the J&A explains that the DCTN provides the
majority of the communications infrastructure for DOD command, control
and intelligence information and that the service "provides military
critical features such as multi-level precedence and preemption,
network surge capacity, redundancy, survivability and end-to-end
interoperability on a worldwide basis which are not immediately
available on other telecommunications networks." Id. at 3. Further,
while the J&A acknowledges that other prospective offerors could
modify their networks to meet these needs, it states that such
modifications would be significant, and would require considerable
expense and time. Thus, the J&A concludes that the agency may award
an interim contract to AT&T to permit the agency to complete its
competition for the DISN component contracts.
The July 14 Agreement between DISA and AT&T
Approximately 2 weeks after the CBD notice and formal approval of the
J&A, AT&T prepared a letter to the Director of DISA memorializing the
results of negotiations between representatives of the company and the
agency regarding an approach to satisfying the agency's need for
continuity of services following the February 29, 1996 expiration of
the DCTN contract. In this July 12 letter, AT&T states that the
parties agree that the agency will use AT&T's DCTN contract as the
DOD's common user network until the contract expires and will award to
AT&T the transition contract for "continued satisfaction of service
requirements, consolidation of those requirements, and transition
support to DISN." Letter from AT&T to Lt. Gen. Albert J. Edmonds,
July 12, 1995, at 2 (emphasis added). In return, AT&T agrees to a new
pricing schedule for the duration of the DCTN (and the term of the
transition contract) "reflecting substantial discounts . . . effective
August 1, 1995." Id. DISA agreed to the AT&T letter on July 14, and
estimates the value of the rate reduction at $2.84 million per month.
For both the remaining period of the DCTN contract and the period of
the transition contract, the letter states that AT&T understands, and
DISA represents, that the agency will use these two contract vehicles
"as the DOD's common user network for consolidating DOD voice, data
and video services requirements (switched or non-switched and
regardless of expected service life) except where prohibited by law."
Id. at 3.[4] Finally, the letter states that : (1) "DISA agrees to
zealously defend against any protest of the [transition contract]
award"; and (2) if the agency "is prevented by the courts, or other
administrative protest bodies, from awarding the [transition] contract
. . . AT&T has the right to immediately withdraw any tariff filed
pursuant to this agreement . . . ." Id. at 5.
On July 17, DISA incorporated much of the July 14 agreement into a
Communication Service Authorization (CSA) issued by the contracting
officer modifying AT&T's DCTN contract. The purpose of the CSA, as
stated on its face, is "to establish a discount pricing plan based on
negotiations between AT&T and DISA/DITCO during the week of 10 through
14 July 1995." CSA, July 17, 1995 at paragraph 1. Of particular
interest is paragraph 13 of the CSA, which repeats the statement in
the July 14 agreement that the agency will use the DCTN as the DOD's
"common user network for consolidating DOD, voice, data, and video
services requirements (switched or non-switched and regardless of
expected service life) except where prohibited by law."
In an undated guidance document prepared in late July 1995,[5] the
DISN Program Manager issued interim instructions to DISA procurement
personnel expressly requesting that the agreement with AT&T be
implemented "by issuing an interim policy to use the DCTN contract as
the first choice for fulfilling customer requirements . . . ."
Approximately 1 month later, on August 25, DISA issued formal
procurement policy guidance by memorandum from the Chief of DISA's
Procurement Management System. In this memorandum, DISA employees are
advised that DISA intends to use DOD's common-user system contracts to
consolidate its requirements. The August 25 memorandum does not
reference the AT&T agreement, and does not repeat the guidance that
the DCTN contract should be the contractual vehicle of first resort
for new requirements.
PROTESTER'S CONTENTIONS
Generally, this protest raises: (1) a challenge to the sole source
bridge contract DISA intends to award to AT&T; and (2) a claim that
DISA is improperly consolidating additional services onto AT&T's
existing DCTN contract, and the follow-on bridge contract, in return
for price concessions set forth in the letter agreement.
Specifically, Sprint's initial protest challenges the agency's
decision to award a sole source transition contract on the basis that
the agency wrongly concluded that no other potential offerors could
provide these services; that the J&A lacks the requisite market survey
(or an explanation for why a market survey was not performed); and
that the extension and consolidation of services onto the DCTN and
transition contracts exceeds the agency's minimum needs. In its
supplemental protest, Sprint argues that consolidation of the services
onto AT&T's existing contract was accomplished via the July 14
agreement between DISA and AT&T, which Sprint argues is an illegal
sole source letter contract that: lacks a proper J&A; violates FAR
restrictions on letter contracts; improperly bars its own termination;
inappropriately procures services not needed for 7 months; violates
restrictions involving organizational conflicts of interest; and was
wrongly awarded without a CBD notice.
TIMELINESS
Both AT&T and DISA argue that Sprint's challenge to AT&T's sole source
contract is untimely, and should not be considered. Both argue that
Sprint has been aware for more than 2 years--i.e., since DISA's
September 1993 Industry Day Program--that the agency intended to
procure these services with a bridge contract upon expiration of
AT&T's DCTN contract. Under our Bid Protest Regulations, protesters
are required to file a protest no more than 10 working days after the
protester knew, or should have known, of the basis for its protest. 4
C.F.R. sec. 21.2(a)(2) (1995).
While we need not set forth all of the arguments forwarded on this
issue, the record shows that Sprint clearly knew--and has known for
some time--that the agency intended to extend AT&T's contract to
permit completion of the pending competition. We note, for example,
the Declaration of William J. Broughham, Jr. (Sprint's "Opportunity
Manager" for DOD telecommunications procurements), dated September 1,
1994, and filed with the United States District Court for the Eastern
District of Virginia, wherein Mr. Brougham stated
"DISA plans to further extend the DCTN contract with AT&T on a
sole source basis until the transitions are completed. DISA has
stated that it will extend the DCTN contract with AT&T at least
through the third quarter of FY 1997, through June 1997."
As stated above, the transition contract advertised in the CBD notice
expires May 28, 1997.
Notwithstanding the accuracy of Sprint's prior knowledge, and our
preference for resolving procurement disputes sooner rather than
later, until the agency actually published its CBD notice of June 28,
1995, there was no formal action upon which to base a valid protest.
In situations like this, we have recognized that our review of whether
a sole source award would be justified, prior to the time of the
preparation of the J&A, would preempt the decision of the individuals
statutorily charged by the Competition in Contracting Act of 1984
(CICA), 10 U.S.C. sec. 2304(f), with conducting that review in the first
instance. EDO Corp., B-224386, Sept. 18, 1986, 86-2 CPD para. 322. In
our view, had Sprint challenged DISA's decision immediately after the
Industry Day Program, its challenge would have been premature because
there would have been no formal procurement action to review. See
Tri-Ex Tower Corp., B-245877, Jan. 22, 1992, 92-1 CPD para. 100. Thus, we
reject AT&T's and DISA's contention that Sprint's challenge to the
sole source interim contract is untimely.
ANALYSIS
As explained above, the J&A concludes that no other offeror could
immediately perform all of the services provided by AT&T without
incurring substantial costs and causing unacceptable delay. The J&A
also explains that the agency was unable to complete the planning
required to conduct a competition for these services despite
extraordinary efforts to do so. As a result, the agency intends to
award a 15-month bridge contract to AT&T until the agency has
completed the competition it has already begun for each of four
significant and segregable components of the services now included in
the DCTN contract. Sprint contends that our Office should overturn
the agency's proposed approach because the agency should have been
able to complete its planning on time, the J&A lacks a proper
explanation of why the agency did not perform a market survey, and the
agency is including certain services on AT&T's contract that could be
procured through competition.
Because the overriding mandate of CICA is for "full and open
competition" in government procurements obtained through the use of
competitive procedures, 10 U.S.C. sec. 2304(a)(1)(A), this Office will
closely scrutinize sole source procurements conducted under the
exception to that mandate authorized by 10 U.S.C. sec. 2304(c)(1). Test
Sys. Assocs., Inc., 71 Comp. Gen. 33 (1991), 91-2 CPD para. 367, aff'd,
B-244007.3, Mar. 17, 1992, 92-1 CPD para. 287; Sperry Marine, Inc.,
B-245654, Jan. 27, 1992, 92-1 CPD para. 111. When an agency uses
noncompetitive procedures under 10 U.S.C. sec. 2304(c)(1), it must
execute a written J&A with sufficient facts and rationale to support
the use of the specific authority, see FAR sec. 6.302-1; 6.303; 6.304,
and publish a notice in the CBD to permit potential competitors to
challenge the agency's intent to procure without full and open
competition. See 10 U.S.C. sec. 2304(f). Our review of an agency's
decision to conduct a sole source procurement focuses on the adequacy
of the rationale and conclusions set forth in the J&A. When the J&A
sets forth reasonable justifications for the agency's actions, we will
not object to the award. Turbo Mechanical, Inc., B-231807, Sept. 29,
1988, 88-2 CPD para. 299.
We first consider Sprint's contention that poor agency planning may
not be used to justify a sole source procurement. In this regard,
Sprint concedes that the agency has expended significant effort in
planning for a competition at the end of the DCTN contract, but urges
our Office to: (1) conclude that the agency's planning was poorly
conceived and executed; and (2) refuse to permit the agency to justify
this sole source bridge contract on the basis of planning problems.
While we need not recite in detail the efforts by the agency to
attempt a competitive procurement by the February 28, 1996 expiration
of the DCTN contract, we find that they were extensive, and that they
were conducted amidst tremendous shifts within the telecommunications
industry, and amidst shifts in the DOD's own attempts to organize and
streamline its handling of C3I activities. Even though we agree with
some of Sprint's criticisms of the efficiency and effectiveness of
DISA's planning,[6] we do not agree that these problems force us to
conclude that the agency's use of a limited sole source bridge
procurement is impermissible here. While CICA requires advance
procurement planning--and does not recognize a lack of such planning
as a valid justification for a sole source procurement--CICA does not
require that such planning be successful. Honeycomb Co. of Am.,
B-225685, June 8, 1987, 87-1 CPD para. 579. Here, unlike cases where we
found a lack of procurement planning,[7] the agency did engage in
strenuous efforts to plan for competitive awards, but failed to
achieve its goal by the expiration of the existing DCTN contract.
With respect to Sprint's argument that the J&A prepared in support of
the sole source bridge contract failed to include a required
explanation for why there was no market survey, the record does not
support its claim. The J&A, in a section entitled "Description of the
Market Survey Conducted and the Results or a Statement of the Reasons
a Market Survey was not Conducted," concludes that AT&T is the only
feasible source for these services after pointing out that any other
contractor would incur "excessive projected duplicated cost and
schedule risk to implement the network." J&A at 4. Elsewhere, the
J&A elaborates on these conclusions. For example, at page 3 the J&A
states that "[p]rospective offerors would have to significantly modify
their networks (at considerable expense and time) to meet these needs,
or else DOD's telecommunications capability to support its daily
military mission would be greatly reduced." We note also that the J&A
recognizes that:
"[i]t is technically possible for other service providers to
modify their existing networks to provide the critical
requirements; however this could only be achieved by expending
considerable resources and time. As the incumbent contractor,
AT&T already had the systems in place to provide these services,
therefore, no implementation and transition is necessary."
Id. at 3.
In short, our review shows that the J&A did contain a brief statement
regarding why a market survey was not performed, which was supported
by other findings in the J&A. This is both adequate and consistent
with the statutory exemption relied upon by the agency for its sole
source decision here--i.e., that award to another source would require
substantial duplication of cost, or unacceptable delays.[8]
Consolidation of Services on the DCTN and Transition Contracts
Sprint argues that the sole source bridge contract will include
services that could have been awarded by competition and that the
agency is also improperly consolidating services on AT&T's existing
DCTN contract.
With respect to the sole source transition contract, Sprint argues
that the agency can adequately meet its needs by using a piecemeal
approach to awarding contracts for upcoming C3I needs. Specifically,
Sprint points to a handful of other (smaller) DOD common-user
networks, the award of single circuits via an electronic bulletin
board process, and other smaller competitions. Sprint contends that
the agency's inability to implement a comprehensive competitive
procurement before expiration of AT&T's DCTN contract should not bar
DISA from meeting its interim needs using various other contract
vehicles and smaller competitions.
In our review of procurements under CICA, we have recognized that
procurements by an agency on a total package basis can restrict
competition. The Caption Center, B-220659, Feb. 19, 1986, 86-1 CPD para.
174. However, where it is reasonable to conclude that a procurement
on a total package basis is necessary to meet the agency's minimum
needs, we have upheld an agency's decision to procure on that basis.
Institutional Communications Co., B-233058.5, Mar. 18, 1991, 91-1 CPD para.
292.
While the record supports Sprint's contention that the agency could
hold competitions for some of the services included in the transition
contract, we think that the agency reasonably adopted a comprehensive
approach of procuring these services via the DCTN and transition
contracts while assembling detailed data on the exact requirements for
each user location for the upcoming competition, as opposed to the
piecemeal approach urged by Sprint. The record sets out the benefits
DOD seeks to achieve in the very near future from an orderly
transition to competitively awarded contracts designed to achieve
significant economies of scale. In addition, as stated above, the
agency has already prepared RFPs for all four of the major component
procurements, and has already begun the competition for one of the
four components. Thus, we find reasonable the agency's contention
that the best approach to meeting the agency's needs is to avoid the
additional burden of piecemeal procurements while the agency prepares
for its upcoming competition. See MCI Telecommunications Corp.,
B-257453, Oct. 5, 1994, 94-2 CPD para. 116.
In its supplemental protest, Sprint mounts a similar challenge to the
ongoing consolidation of services onto the existing DCTN contract.[9]
The gravamen of Sprint's complaint is that the letter agreement,
complete with its price concessions from AT&T, is evidence of an
improper and unfair arrangement whereby the agency is steering the
majority of its upcoming C3I needs to AT&T until completion of the
pending competition. Sprint argues that the existence of the July 14
agreement casts doubt on the propriety of the agency's claim that
procuring these services on a sole source basis from AT&T during the
15-month interim period will best serve the agency's needs. In short,
Sprint is arguing that the agency has "cut a deal" wherein it will use
a total package approach when such an approach is unnecessary and is
restricting competition.[10]
As a starting point, our review of the extensive record of DOD's
policy statements on satisfying its C3I needs while preparing for an
upcoming competition, the July 14 agreement with AT&T, and the two
guidance documents issued to DISA procurement personnel after the July
14 agreement leads us to several factual conclusions related to this
issue. First, we find that DOD has, in fact, concluded that it will
use the DCTN and transition contracts as its preferred common-user
contracts until it completes the pending competitions. Second, we
find that the decision to use AT&T's DCTN and transition contracts to
procure C3I services, rather than several common-user contracts,
occurred during the negotiations with AT&T during the week of July
10-14, 1995. Third, we find that price concessions from
AT&T--estimated at approximately $2.84 million per month until award
of the DISN contracts--may have spurred the decision to consolidate
C3I services on that contract.
Sprint contends that this chain of events discloses the real basis for
DISA's decision to consolidate these services on AT&T's
contracts--that the agency was motivated by a desire to realize the
price savings offered by AT&T, and not a desire to streamline the
upcoming competitive procurements. While the letter agreement with
AT&T may reveal the motivating factor behind the agency's decision, we
conclude that, regardless of the impetus for the agency's decision,
the procurement approach DISA chose is proper. The record in this
case, as well as the previous reports to Congress by GAO, show that
DISA has had difficulty at times even establishing with certainty the
number of switches and circuits it has already procured. We are also
mindful that the DCTN contract provides the majority of the
communications infrastructure for all of DOD's C3I services. J&A at
2. Given the importance of this system to national security (see
Sprint Communications Co., L.P. v. United States, supra, at 9-10,
citing and adopting the conclusion in Wiltel Inc. v. DISA, supra, that
the DCTN contract contains functions important to national security),
the J&A states that the agency must not risk disruption of DCTN
services by conducting further piecemeal competitions as such
disruption would cause "unacceptable harm to DOD's communications
network . . . ." J&A at 3. Under these circumstances, we conclude
that the agency reasonably has decided to consolidate its C3I needs on
one contract in order to prepare for the pending transition to several
competitive contract awards. See MCI Telecommunications Corp.,
supra.
The protest is denied.
Comptroller General
of the United States
1. In July 1994, Sprint filed a lawsuit in the Eastern District of
Virginia alleging that the agency improperly extended the DCTN
contract from March 1994 to February 1996, and improperly added
certain services to the contract. The court dismissed the action on
two grounds: (1) it held that Sprint had not shown actual injury from
the extension; and (2) it held that Sprint's claim was time-barred by
the 6-year statute of limitations applicable under the Administrative
Procedures Act. Sprint Communications Co., L.P. v. United States,
Civil Action No. 94-891-A, mem. op. (E.D. Va. Oct. 11, 1994).
2. The DISN component procurements are set forth in four
solicitations--three of which are in draft form and are currently
released for public comment, and one of which has been formally
issued. These include solicitations for: (1) video services,
including hardware, facilities and software for video transmission;
(2) network support services, including engineering, logistics and
planning support; (3) network switch/bandwidth manager services,
including voice switching and data bandwidth management; and (4)
transmission services, including synchronous optical network backbone
and local access circuits.
3. Unlike the CBD notice, the J&A relies only upon 10 U.S.C. sec.
2304(c)(1) as a basis for the contract action here, and not upon 10
U.S.C. sec. 2304(c)(6), permitting award without competition for purposes
related to national security.
4. The recognition that DOD will act to consolidate these services on
the AT&T contract vehicles "except where prohibited by law" is stated
expressly with respect to the remaining period of the DCTN contract;
it is not stated with respect to the transition contract.
5. We conclude that this document was prepared in late July 1995
because it expressly references the July 14 agreement with AT&T and
references the expiration of the bridge contract "in 22 months."
Since the bridge contract expires on May 28, 1997, it appears likely
this guidance was prepared after July 14 and before August 1, 1995.
6. The General Accounting Office recently issued a report criticizing
DOD for not effectively planning and managing the DISN program. See
Defense Communications: Management Problems Jeopardize DISN
Implementation, GAO/AIMD-95-136, July 13, 1995. In addition, GAO
stated nearly 3 years ago that DOD would likely be required to award a
sole source transition contract to AT&T because the agency would not
be prepared to award a competitive contract for these services.
Letter Report to Senator John Glenn, Chairman, Committee on
Governmental Affairs, GAO/IMTEC-93-26R, April 28, 1993.
7. For example, our decisions in Freund Precision, Inc., B-223613,
Nov. 10, 1986, 86-2 CPD para. 543 and TeQcom, Inc., B-224664, Dec. 22,
1986, 86-2 CPD para. 700, sustained protests of sole source or limited
competition procurements where an agency failed to perform advance
planning.
8. We also note that while Sprint argues that the J&A lacks sufficient
justification in this area, Sprint does not claim that it could
provide all of the services sought by the transition contract
immediately.
9. In this regard, Sprint asserts that the consolidation of ongoing
services was accomplished via the July 14 letter agreement between
AT&T and DISA, which, Sprint argues, constitutes an improper letter
contract. We reject Sprint's claim that the July 14 agreement is a
letter contract because the agreement, by itself, does not authorize
AT&T to perform any services. The FAR defines a letter contract as a
"written preliminary contractual instrument that authorizes the
contractor to begin immediately manufacturing supplies or performing
any services." FAR sec. 16.603-1. Since we conclude that the July 14
agreement is not a letter contract, we need not consider Sprint's
numerous arguments that the agreement violates regulatory controls
applicable to letter contracts. Nonetheless, our decision responds to
the underlying thrust of Sprint's complaint.
10. Sprint also makes a general argument that the additional services
to be acquired under the DCTN are outside the scope of that contract.
The record does not support this assertion. The DCTN contract is
broad in terms and scope, contemplating that DOD will order particular
services within the general categories set out in the contract, as DOD
deems necessary to meet its C3I telecommunications requirements for
the duration of the contract. Sprint has not identified any specific
services that it believes fall outside the scope of the DCTN contract,
and we see no other basis in the record to conclude that the services
the agency plans to acquire under the DCTN are outside the scope of
the contract.
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