B-296358.3; B-296358.4, DOR Biodefense, Inc.; Emergent BioSolutions, January 31, 2006

TITLE: B-296358.3; B-296358.4, DOR Biodefense, Inc.; Emergent BioSolutions, January 31, 2006
BNUMBER: B-296358.3; B-296358.4
DATE: January 31, 2006
*************************************************************************************
B-296358.3; B-296358.4, DOR Biodefense, Inc.; Emergent BioSolutions, January 31, 2006

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.

Decision

Matter of: DOR Biodefense, Inc.; Emergent BioSolutions

File: B-296358.3; B-296358.4

Date: January 31, 2006

Jessica C. Abrahams, Esq., Jeniffer M. De Jesus, Esq., Stephen E. Ruscus,
Esq., and Frank M. Rapoport, Esq., McKenna Long & Aldridge LLP, for the
protesters.

Helaine G. Elderkin, Esq., Carl J. Peckinpaugh, Esq., and Cheralyn S.
Cameron, Esq., for Computer Science Corp., an intervenor.

Scott N. Flesch, Esq., Department of the Army, and Eric Lile, Esq., Joint
Program Executive Office for Chemical and Biological Defense, for the
agency.

Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that modification of contract for research and development of
botulinum vaccine was outside scope of the original contract is denied
where changes did not substantially alter the contract's type of work,
costs or period of performance beyond that which could have been
reasonably anticipated by offerors.

DECISION

DOR Biodefense, Inc. and Emergent BioSolutions protest the issuance of
modification P00186 of contract No. DAMD17-98-C-8024 by the Department of
the Army Space and Missile Command to DynPort Vaccine Company, LLC
(DVC).[1] The protesters contend that the modification was beyond the
scope of the original contract, and thus was an improper sole-source award
to DVC. The protesters also contend that the agency failed to take
reasonable corrective action in response to earlier protests concerning
the modification.

We deny the protests.

BACKGROUND

The agency awarded a contract to DVC, under solicitation No.
DAMD17-95-R-5020 (RFP) in 1997. The contract was issued by the Joint
Vaccination Acquisition Program (JVAP), which was established in 1996 by
the Department of Defense (DOD) to develop and stockpile biological
defense vaccines for use by the U.S. military. Memorandum of Law at 1-2.

The JVAP issued the RFP in August 1996, seeking proposals for award of a
contract to a prime systems contractor for the management of vaccine
development, licensure and production efforts. Id. at 2. The contractor
was required to "use information and materials from the existing DoD
program to create and execute an integrated approach leading to FDA [Food
and Drug Administration] licensure and long term production/stockpiling of
each vaccine (life cycle management to the point of product release to the
DoD distribution chain)." RFP at C-1. Offerors were required to propose a
comprehensive technical approach to meeting DOD's biological defense
needs. Offerors were required to propose an Integrated Master Plan (IMP)
that described their approach to "the core activities and processes
necessary to achieve the program objectives (i.e. the [statement of
objectives])." RFP attach. 1, IMP Instructions, at 1. The RFP, however,
did not specify particular technical approaches for vaccine development,
but rather identified general process requirements and the types of
biological threats that the agency could select for vaccine development
and production.

The RFP listed contract line item numbers (CLINs) for general requirements
such as systems integration, hazard risk insurance, storage and
maintenance of intermediaries, and special studies, as well as development
of three vaccines for protection against Q-fever, vaccinia, and tularemia.
RFP at B-2. The RFP listed optional CLINs for development and licensure of
biological warfare vaccines for the following vaccines: monovalent and
multivalent botulinum serotypes, ricin, staphylococcal enterotoxin B,
venezuelan equine encephalitis, combined Venezuelan/eastern/western equine
encephalitis, brucellosis, plague, improved anthrax, and vaccinia immune
globulin. Id. As relevant here, optional CLIN 0016 required development of
a tetravalent botulinum vaccine for serotypes A, B, E and F.[2] Id. The
RFP advised offerors that it reserved the right to "change the list above
to add or delete products as the need may arise." RFP at B-1, C-1.

All of the vaccines developed under the contract require approval and
licensure by the FDA. RFP at C-1. The contractor bears the responsibility
for submitting applications and ultimately obtaining FDA licensure for the
vaccines; the contractor also becomes the license holder for the approved
vaccine. Id. The RFP stated that contract performance would occur in
stages based on various decisions made by the agency's Milestone Decision
Authority. Memorandum of Law at 4; RFP at C-1. The milestone A (originally
termed milestone I) determination would identify the vaccines to be
developed and would approve a technical approach. RFP, SOO at 1. The
milestone B determination would approve entry into the system development
and demonstration phase. JVAP Statement at 7.[3] The RFP stated that the
contract would be awarded with various cost reimbursement and fixed-fee
CLINS. RFP at 1. Contract performance was anticipated for 10 years. RFP at
2.

The agency awarded the contract to DVC on November 7, 1997, with an award
value of $321,673,935. AR, Tab 6, DVC Contract. During the course of
contract performance, the agency and DVC experienced numerous delays and
challenges involving changed regulatory requirements and technical issues.
See Contracting Officer's Statement at 13-15; JVAP Statement at 10-13.

In August 1999, the agency exercised optional CLIN 0016 and directed DVC
to develop an FDA-licensed pentavalent botulinum vaccine and added
serotype C to the existing requirement for serotypes A, B, D, and F. AR,
Tab 21, Modification P00021. The modification did not change the delivery
date for CLIN 0016 of August 16, 2004, which had been established in DVC's
proposal based on anticipated CLIN exercise dates and scheduled resource
transfer assumptions identified in the RFP. Memorandum of Law at 12.
Modification P00021 also requested that DVC submit a price proposal that
would account for increased costs in CLIN 0016 resulting from the addition
of serotype C to the multivalent vaccine requirement. AR, Tab 21,
Modification P00021, at 2.

The agency issued modification P00033 in March 2000, which "zeroed out"
the costs of individually developing the five monovalent vaccines that
comprised the serotypes for the CLIN 0016 pentavalent vaccine, and
incorporated DVC's price proposal, which had been requested under
modification P00021. The value of CLIN 0016 was increased from [deleted]
to [deleted].[4] JVAP Statement at 4.

Due to concerns that sufficient funding was not available to fully develop
the pentavalent vaccine, the agency determined in March 2001 that the
program should focus on the "highest threat," and develop a bivalent
vaccine for serotypes A and B instead of the pentavalent vaccine.
Memorandum of Law at 14-15; AR, Tab 38, Acquisition Decision Memorandum,
March 21, 2001.

Additionally in 2001, the agency executed several modifications to account
for increased costs, including changes in FDA regulations and
recommendations, technology transfer requirements, changed travel and
labor costs, manufacturing facility changes, and additional studies which
increased CLIN 0016's price by approximately [deleted] to [deleted]. See
AR, Tab 41, Modification P00055; Tab 44, Modification P00056; Tab 46,
Modification P00060; Tab 50, Modification P00070; Tab 54, Modification
P00071; Tab 52, Modification P00075; Tab 56, Modification P00084; Tab 51,
Modification P00085; Tab 59, Modification P00089; Tab 60, Modification
P00090; Tab 61, Modification P00092; Tab 63, Modification P00099; and Tab
68, Modification P00112.

During the 1999-2001 timeframe, the agency also determined that the
original target date of 2004 for delivery of licensed vaccines under CLIN
0016 was no longer realistic. Contracting Officer's Statement at 16. In
2001, the agency requested and DVC proposed a revised delivery date of
2012 for a FDA-licensed botulinum serotype A/B vaccine, at an estimated
overall cost of [deleted]. AR, Tab 45, IMP 2.0. The agency issued
modification P00059 in August 2001, which specified a new delivery date of
July 2012. Memorandum of Law at 17; AR, Tab 49, Modification P00059, at 2.

In January 2004, DVC submitted its proposal for IMP 5.0 in response to the
agency's request that DVC address and summarize the current approach to
developing the serotype A/B vaccine. AR, Tab 95, DVC IMP 5.0. The agency
issued modification P00153 on May 20, 2004, which incorporated IMP 5.0,
and stated that the final costs and delivery date would be determined at a
later date. The changes to the cost and delivery schedule were established
in modification P00186 on April 7, 2005, which contained a delivery date
of May 6, 2012, and increased the costs of CLIN 0016 to $192,276,758. AR,
Tab 121, Modification P00186.

During the same early 2004 period of time, the agency issued a request for
information (RFI) as part of the Milestone B approval process. The
Milestone B evaluation required the agency to conduct market research
regarding alternatives to the current technical approach under the
contract. JVAP Statement at 7. The agency issued the RFI on February 25,
2005, seeking responses from offerors regarding the availability of
alternative botulinum vaccine candidates for purposes of "analyzing
alternatives to its current recombinant botulinum effort in preparation
for an acquisition decision to enter into the System Development and
Demonstration Phase of product development." AR, Tab 112, RFI, at 1. The
RFI informed potential respondents that "[t]his is a request for
information only; no contract will result from responses received for this
RFI . . . This is not a Request for Proposal, an Invitation to Bid, or a
Request for Quotation. Therefore, this RFI is not to be construed as a
commitment by the Government to enter into a contract nor will the
Government pay for information provided in response to this RFI." Id.

DOR and Emergent each submitted responses to the RFI. The agency posted a
notice on the FedBizOpps website on April 20, 2005 regarding issuance of
modification P00186. Emergent and DOR each filed protests of the
modification, arguing that P00186 exceeded the scope of the original
contract and was thus an improper sole-source award that should have been
subject to full and open competition. In May 2005, the agency requested
that our Office dismiss the protests based on its determination to take
corrective action; we did so on May 20.

In June 2005, as part of its corrective action, the agency issued a
synopsis of its intent to modify DVC's contract and requested responses
from firms that could demonstrate alternatives to DVC's vaccine candidate.
The protesters each submitted responses regarding their capabilities. The
agency then concluded that the modification was within the scope of the
original contract, and that therefore a sole-source justification was not
required. After receiving notice of the agency's determination, DOR and
Emergent filed these protests.

DISCUSSION

Scope of the Modification

The protesters first argue that modification P00186 exceeded the scope of
the original contract, and that it therefore constituted an improper
sole-source award under the Competition in Contracting Act of 1984 (CICA),
10 U.S.C. sect. 2304(a)(1)(A) (2000), which was required to be competed on
a full and open basis.[5] Once a contract is awarded, our Office will
generally not consider protests against modifications to that contract,
because such matters are related to contract administration and are beyond
the scope of our bid protest function. Bid Protest Regulations, 4 C.F.R.
sect. 21.5(a) (2005); Engineering & Prof'l Servs., Inc., B-289331, Jan.
28, 2002, 2002 CPD para. 24 at 4. An exception to this general rule is
where, as here, a protester alleges that a contract modification is beyond
the scope of the original contract, because, absent a valid sole-source
determination, the work covered by the modification would be subject to
the statutory requirements for competition. Atlantic Coast Contracting,
Inc., B-288969.4, June 21, 2002, 2002 CPD para. 104 at 4.

In determining whether a modification triggers the competition
requirements under CICA, we look to whether there is a material difference
between the modified contract and the contract that was originally
awarded. Engineering & Prof'l Servs., supra, at 4; see AT&T
Communications, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1205 (Fed. Cir. 1993).
Evidence of a material difference between the modification and the
original contract is found by examining changes in the type of work,
costs, and performance period between the contract as awarded and as
modified. MCI Telecomms. Corp., B-276659.2, Sept. 29, 1997, 97-2 CPD para.
90 at 7-8. We also consider whether the solicitation for the original
contract adequately advised offerors of the potential for the type of
change found in the modification, and thus whether the modification would
have changed the field of competition. Id.

The contract contained the changes clause at FAR sect. 52.243-1, "Changes
-- Fixed Price" and FAR sect. 52.243-2, "Changes -- Cost Reimbursement,"
both of which were incorporated with the "Alternate V" provisions for
research and development contracts. The agency contends that these clauses
provide the authority to modify the contract, and that the modification
was within the scope of the contract as originally competed and awarded.
As explained below, we believe that the record demonstrates that scope of
the original contract was not substantially changed by the modification,
and thus the changes to the contract would not have had a substantial
impact on the field of competition for the original contract award.

The protesters argue that the contract was improperly modified to require
delivery of a bivalent serotype A/B vaccine, a product that was not listed
among the optional RFP CLINs. The RFP identified optional CLINS for
monovalent vaccine serotypes A through G, and a multivalent vaccine for
serotypes A, B, D and F. RFP at B-1. The RFP advised offerors, however,
that "[t]he government reserves the right to change the list above to add
or delete products as need may arise." RFP at B-1.

Where the type of work under a contract as modified remains substantially
unchanged, we do not view modifications of the technical requirements of
performance to be outside the scope. Atlantic Coast, supra. Our decisions
have acknowledged that additional latitude for changing a contract may
exist where the contract is for research and development, noting that the
scope of such contracts is often flexible because of unanticipated changes
due to the lack of definitiveness of the government's requirements.
Everpure, Inc., B-226395, B-226395.4, Oct. 10, 1990, 90-2 CPD para. 275 at
4-5. Furthermore, a technical change to a contract should be viewed in the
context of the contractor's obligations "as a whole." AT&T Communications,
Inc., 1 F.3d at 1206.

Here, the RFP made clear that decisions regarding the specific vaccines to
be developed and produced would be made after award, and that the agency
could add or delete vaccines based on the government's needs. RFP at B-1.
The RFP and contract, in our view, anticipated addition and deletion of
optional botulinum vaccines, and thus the change from the RFP's
requirement under CLIN 0016 for a pentavalent vaccine to a bivalent
vaccine that incorporates two of the serotypes under the pentavalent
vaccine does not fundamentally alter the type of work required under the
contract. See Engineering & Prof'l Servs., supra.

The protesters next argue that the modified contract now requires an
increased number of troop equivalent doses (TED) of the botulinum serotype
A/B vaccine to be produced. The RFP stated that an "initial stockpile" of
300,000 TED would be required for production of each vaccine, and that
follow-on and production contracts will be awarded after FDA licensure of
those vaccines. RFP at C-1, F-1.

At the agency's request, DVC drafted IMP 5.0 to increase the assumption
for future production of the serotype A/B vaccine developed under CLIN
0016 from 300,000 to [deleted] TED.[6] AR, Tab 95, IMP 5.0, at 5-6.
Modification P00186 incorporated IMP 5.0. See AR, Tab 121, Modification
P00186 at 2. The agency states, however, that the increased TED amount was
for planning purposes only, noting that CLIN 0016 is for the development,
licensure and delivery of an FDA-licensed serotype A/B vaccine, and that
CLIN 0052 covers production of the licensed vaccine. See Supplemental
Memorandum of Law at 4-5. CLIN 0052 will not be exercised until the
vaccine is licensed. Id.

The modification detailed the modified costs related to "development and
licensure" of the serotype A/B vaccine, but did not include any costs for
production of the licensed vaccine. See AR, Tab 121, Modification P00186
at 2. Thus, modification P00186 did not commit the agency to production of
the serotype A/B vaccine under either the original or the revised TED
assumption levels. In the absence of an actual commitment under the
contract, we do not believe that the proposed or planned change to TED
assumptions under an unexercised CLIN affects the scope of the original
contract at this time.[7] In sum, we do not believe that the technical
changes discussed above constitute material changes to the scope of the
original contract.[8]

Further, we conclude that the solicitation for the original contract
adequately advised offerors of the potential for the type of changes that
occurred during the course of contract performance, and that in the
context of the type of research and development work at issue here, the
modification encompasses changes which potential offerors could reasonably
have anticipated. The RFP advised offerors that successful contract
performance faced numerous challenges, including regulatory requirements:
"The number of different medical [biodefense] products under this contract
presents significant challenges in management, regulatory affairs, and
production." RFP at C-2. Offerors were further advised that the prior
development efforts had faced difficulties and the agency viewed the
contract as a long-term effort:

Licensure of [biodefense vaccine] products, however, has been problematic
because of the lack of integration, required by the FDA, between the
manufacturing process and product testing and evaluation (T&E) . . . The
contract is based on the fact that FDA licensure of biologics is a long
term process that requires extensive [testing and evaluation] of vaccines
as the manufacturing process is scaled up from laboratory production to
full scale production.

RFP at C-1.

We believe that the changes discussed above could have been reasonably
anticipated by offerors, in light of the type of the work at issue, and
the RFP's broad scope and statements regarding the technical and
regulatory challenges that could affect performance. Engineering & Prof'l
Servs, supra, at 4.

With regard to the changes to the cost of the contract under modification
P00186, which the protesters also argue is not within the scope of the
original contract, the agency contends that all changes were within the
original contract's scope, which the agency emphasizes was a research and
development contract with a broadly-defined mission of addressing the
development of the government's biodefense needs. In executing the
modification, the agency explained that "[t]he need for the new IMP [5.0]
was driven by [FDA] and technical requirements unknown at the time of
award." [9] AR, Tab 121, Modification P00186, at 2.

The modification increased the costs of CLIN 0016 by approximately $183
million, a 57 percent increase over the original contract value of $322
million.[10] In modification P00186, the agency identified 18 new or
modified areas of work that have changed since the award of the contract.
Id. at 4-7. The modification also details the cost impact of the changes
required by the work. Id. at 8-17. The agency argues that the "most
significant change" in FDA regulations that affected modification P00186
was the final issuance of the "Animal Rule" in 2002, which governs the
testing of vaccine candidates on human surrogates. AR, Tab 121,
Modification P00186, at 3. The RFP advised offerors that "[t]he nature of
a [biological warfare agent] precludes human efficacy testing; and,
therefore, will require surrogate models for licensure." RFP at C-1. The
agency states that the FDA surrogate testing requirements were accurately
stated in the RFP at the time of its issuance and that DVC's proposal
adequately addressed those requirements, but that the Animal Rule required
revisions to the work.[11] JVAP Statement at 10. The agency explains that
FDA's final version of the Animal Rule "has significantly increased the
number of animal studies required to license biodefense vaccines," and FDA
has "increased the scope of studies or added more unplanned studies, . . .
increased the number of volunteers required in clinical trial, have made
the enrollment criteria more conservative so that fewer of the screened
candidates are eligible to participate, . . . [and] added new requirements
for toxicity testing." AR, Tab 121, Modification P00186, at 3.

The agency has, in our view, reasonably explained the basis for the
increased costs under modification P00186, and supported its position that
these costs constitute work within the scope of the contract. We further
believe that the cost changes themselves are not so large as to render the
modification outside the scope of the original contract. In this regard,
even substantial increases in cost do not inexorably compel a conclusion
that a contract has been modified outside its original scope. See, e.g.,
Defense Sys. Group; Warren Pumps, Inc.; Dresser Indus., Inc., B-240295 et
al., Nov. 6, 1990, U.S. Comp. Gen. LEXIS 1182 at *11-13 (increase in value
of more than 120% did not materially change the contract based on in-scope
changes to technical requirements); Caltech Servs. Corp., B-240726,
B-240726.6, Jan. 22, 1992, 92-1 CPD para. 94 (30 percent overall increase
in CLIN value not out of scope where the overall contractual purpose
remains unchanged).

The protesters also argue that the modification of the delivery date
increases the duration of the contract beyond the scope of the original
contract. The RFP stated that the agency anticipated a performance period
of 10 years, and noted that exercise of optional CLINs would not increase
this 10 year period. RFP at 2; RFP amend. 2, Question and Answer 6. The
contract included DVC's delivery date of August 2004 for delivery of the
multivalent botulinum vaccine under CLIN 0016, based on the expected CLIN
exercise date identified in the RFP. JVAP Statement at 3. As modified by
P00186, DVC is now required to provide the serotype A/B vaccine by May
2012.

Although we look to the performance period to determine whether a
modification exceeds the scope of the original contract, time does not
have the same degree of importance in every type of contract. Where, as
here, a contractor is provided additional time to perform a contractual
obligation, that modification does not necessarily constitute an out of
scope change, unlike the situation where time is used to define the extent
of the obligation, such as under a requirements contract. Defense Sys.
Group, supra. Additionally, as discussed above, our decisions have
recognized that research and development contracts can justify additional
latitude for changes to their performance terms, including duration,
because the type of work under these contracts involves greater
uncertainty. Ion Track Instruments, Inc., B-238893, July 13, 1990, 90-2
CPD para. 31 at 3.

We recognize that modification P00186 has substantially increased the
costs and duration of CLIN 0016. However, we believe that the modification
did not materially change the contract because, as discussed above, the
changes to the type of work, costs, and duration of the contract remain
within the scope of the original contract. See Atlantic Coast Contracting,
supra, at 4. Furthermore, the changes could have been reasonably
anticipated by offerors, given the complexity of the research and
development work and the risks and contingencies identified in the
solicitation. Id.

The protesters' comments and supplemental comments also generally argue
that the entire contract has been plagued with problems and that the
procurement will fail. See Protesters' Comments at 6, 16-17. The
protesters criticize what they believe to be technical flaws in the DVC
vaccine candidate as compared to what they characterize as superior DOR or
Emergent alternative products. We do not believe that challenges to the
efficacy of DVC's technical approach or the contract generally are
relevant to the issue that was timely protested, i.e., whether
modification P00186 was within the scope of the original contract.[12]

Adequacy of Prior Corrective Action

Finally, the protesters contend that the agency did not take adequate or
reasonable corrective action in response to their initial protests
challenging the propriety of the modification. The protesters argue that
the agency acted in bad faith by not taking the corrective action it
outlined in its request to dismiss the initial protests. The agency's
letter to our Office requesting that the initial protests be dismissed
stated that the agency did not agree with the protesters' contentions that
the modification constituted a sole-source award. AR, Tab 128, Agency
Corrective Action Memorandum, at 1. Nonetheless, the agency determined
that it would take corrective action by reviewing its requirements and
making a new determination as to how best to meet its needs. Id. The
agency stated that it would issue a synopsis to "appraise all prospective
sources of the agency's needs so that those sources have a meaningful
opportunity to demonstrate their ability to meet our requirements," and
that the agency would evaluate responses and "make a determination
concerning whether a sole-source award is justified." Id.

Following our dismissal of the protest, the agency posted the June 2005
synopsis on the FedBizOpps website, detailing the agency's intention to
"modify contract DAMD17-98-C-8024 and negotiate on a sole-source basis
with [DVC] to extend the development and licensure period of performance
to May 2012." AR, Tab 132, Agency Synopsis, June 1, 2005, at 1. The
synopsis advised that "[t]his is not a request for competitive proposals
but parties purporting to have the requisite credentials to perform these
services without substantial duplication of cost or unacceptable delays in
fulfilling the agency's requirements" may submit responses detailing their
capabilities. Id.

Each protester submitted a response to the agency's notice, renewing their
objections to the modification of DVC's contract and outlining their
respective qualifications to provide an alternative vaccine candidate. The
agency's subsequent notice to the protesters did not address their
capabilities, but rather explained that the agency had determined that the
modification was within the scope of the original contract, and that it
would not, therefore, issue a sole-source award or justification thereof.
AR, Tabs 126-37, Agency Notices Regarding Corrective Action, at 1.

Contracting officials have broad discretion to take corrective action
where the agency determines that such action is necessary to ensure fair
and impartial competition. Patriot Contract Servs. LLC et al., B-278276.11
et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4. Where an agency has
reasonable concerns that there were errors in the procurement, the agency
may take corrective action, even if it is not certain that a protest of
the procurement would be sustained. Main Bldg. Maint., Inc., B-279191.3,
Aug. 5, 1998, 98-2 CPD para. 47 at 3. We will not object to the specific
proposed corrective action, so long as it is appropriate to remedy the
concern that caused the agency to take corrective action. Networks Elec.
Corp., B-290666.3, Sept. 30, 2002, 2002 CPD para. 173 at 3. Corrective
action does not require, however, that the agency take actions favorable
to the protester and there is no basis to object if the agency ultimately
reaches the same conclusion that was challenged in the original protest,
provided that the corrective action was undertaken in good faith and the
reaffirmed conclusion has a reasonable basis.

We believe that the agency properly exercised its discretion to take
corrective action in response to the protest. While it is not entirely
clear to what extent the agency evaluated the protesters' responses, which
primarily objected to the agency's actions, the agency ultimately
determined that neither a sole-source nor a competitive award was required
because the modification, as originally issued, was within the scope of
the contract. We do not read the agency's memorandum outlining its
proposed corrective action to commit the agency to either award a
competitive contract or issue a sole-source award. Although the agency's
synopsis used the term "sole-source," we do not think that the use of this
term, particularly in the context of the notice's intent to modify the
contract, committed the agency to issue a sole-source contract. In this
regard, determining that a sole-source award is not required is not
inconsistent with the agency's determination to "make a determination
concerning whether a sole-source award is justified." AR, Tab 128, Agency
Corrective Action Memorandum, at 1. We conclude that there is no support
for the protesters' allegations of bad faith regarding these actions. [13]

The protests are denied.

Anthony H. Gamboa

General Counsel

------------------------

[1] DVC is a limited liability company, in which DynCorp, a wholly-owned
subsidiary of Computer Sciences Corporation (CSC), is the principal
member. CSC participated in this protest as an intervenor.

[2] A serotype refers to the specific form of a biological threat for
which a vaccine is developed. Each serotype has an antigen that provokes a
specific antibody response in the recipient. A vaccine's valence refers to
the number of serotypes in the vaccine, e.g., a monovalent, bivalent, or
multivalent vaccine. Contracting Officer's Statement at 11. A multivalent
vaccine, therefore, protects against the multiple biological threats
represented by its constituent serotypes.

[3] This statement was filed by the JVAP Vaccine Manager as part of the
agency's report to our Office, and supplements the Contracting Officer's
Statement and the Memorandum of Law.

[4] As the agency explains, a monovalent vaccine is considered simpler to
produce than a multivalent vaccine because the former involves only a
single serotype, whereas the latter must combine various serotypes into a
single multivalent vaccine. Contracting Officer's Statement at 11. Each of
the monovalent botulinum vaccines under CLINs 0009-0015 was intended to be
developed individually and then individual serotypes would be combined
into a multivalent vaccine under CLIN 0016. Id. The cost of CLIN 0016 was
less than any of the monovalent vaccines, however, because it was assumed
that all of the individual monovalents would have been produced under
separate CLINs prior to the development of the multivalent vaccine. Id.;
see also AR, Tab 2, DVC Best and Final Proposal, at K-1. Thus when the
agency deleted the requirements for the individual monovalent vaccines and
"zeroed out" the funding under CLINs 0009, 0010, 0011, 0013, and 0014, the
value of CLIN 0016 was increased to reflect the fact that separate funding
would no longer be provided under the deleted CLINs for the required
development of the individual monovalent vaccines.

[5] The protesters' initial and current protests addressed the changes to
the contract resulting from modification P00186. The protesters' comments
on the agency report now suggest that prior modifications may also have
been improper. Even assuming that the agency report is the first time the
protesters became aware of the earlier modifications, the protesters'
comments could not have raised any new timely grounds of protest because
they were filed more than 10 days following receipt of the agency report,
as the result of an extension the protesters requested for filing their
comments. See Hyperbaric Techs., Inc., B-293047.4, Mar. 29, 2004, 2004 CPD
para. 89 at 9, n.7. This decision thus addresses only whether modification
P00186 was within the scope of the original competition and contract.

[6] IMP 5.0 notes that although the agency initially discussed an increase
in TED amounts of [deleted] to [deleted], the agency and DVC subsequently
agreed that the IMP would assume a production level of [deleted] TED. AR,
Tab 95, IMP 5.0, at 6.

[7] Additionally, the protesters do not consider the impact of the
deletion of the individual CLIN requirements for the development of
monovalent botulinum vaccines for serotypes A through G on the scope of
the TED production requirements. Although the assumptions for future
production of the serotype A/B vaccine has increased to [deleted] TED for
CLIN 0016, the deletion of funding for the 5 monovalent vaccine CLINS that
comprise the pentavalent vaccine presumably means that the production
CLINs for those vaccines, CLINs 0045, 0046, 0047, 0049 and 0050, each of
which had the same [deleted] TED initial stockpile amount, are also
deleted, resulting in a [deleted] TED decrease.

[8] The protesters also contend that the agency modified CLIN 0016 to
require development of the botulinum vaccine based on a recombinant
technique, instead of a [deleted] technique. As the agency explains,
however, offerors were not required to follow a specific technical
approach in developing the optional botulinum vaccine option and the
contract did not require a [deleted] approach. See RFP at B-1, C-2.
Rather, as the protesters acknowledge, the RFP allowed either a [deleted]
or recombinant approach to developing botulinum vaccines. Protesters'
Supplemental Comments at 11. Furthermore, DVC's proposal did in fact
propose development of the A and B serotype monovalent vaccines and the
multivalent vaccine based on a recombinant approach. AR, Tab 2, DVC Best
and Final Offer, at D-1, E-1, and K-1. Thus, the decision to pursue a
recombinant approach provides no basis to support the protests.

[9] The agency notes that more than 50 guidance documents and regulatory
revisions have been published by FDA in the Federal Register during the
performance period that have had an impact on contract costs. JVAP
Statement at 10; Memorandum of Law at 29. The agency report contains
numerous examples of FDA guidance, regulatory changes and specific
interactions with the JVAP program. See AR, Tabs 7-13, 15-16, 19-20, 22,
24-27, 29, 31-34, 36, 39-40, 43, 47-48, 53, 57-58, 62, 64-65, 67, 70-73,
76-77, 79-91, 93-94, 100-105, 107, 110-11, 113-17, 119-20, 126, and
129-31.

[10] An alternative measure of the increase in CLIN 0016 would measure the
value that modification P00186 added to the pre-modification value of CLIN
0016. This results in a significantly lower percentage increase of
approximately 29 percent. Our decisions have recognized that prior
increases to a contract that have not been challenged may properly be
taken into account when subsequent contract modifications are challenged
as out of scope. See Access Research Corp., B-281807, Apr. 5, 1999, 99-1
CPD para. 64 at 5. As discussed above, however, we believe that neither a
57 nor a 29 percent cost increase was outside the scope of the original
contract under the circumstances of this procurement.

[11] The protesters argue that changes to FDA's Animal Rule should have
been anticipated by offerors and the agency as the result of discussions
between FDA, DoD and industry representatives as early as 1996.
Protesters' Supplemental Comments at 4-5. Thus, the protesters contend,
the changes cited by the agency should have been anticipated in DVC's
proposal and the contract, and therefore the changes to the Animal Rule
could not be a justification for increased costs. The final rule, however,
was not published until May 31, 2002, almost five years after contract
award. AR, Tab 64, 64 Fed. Red. 53960. The protesters fail to demonstrate
that the final form of the rule, as issued by FDA, could have been known
and incorporated into offerors' cost and technical proposals prior to
issuance of the final rule in 2002.

[12] We have reviewed all of the remaining issues raised by the protesters
regarding modification P00186, and conclude that they are without merit or
not for our review. For example, the protesters allege that modification
P00186 violates the Anti-Deficiency Act, 31 U.S.C. sect. 1341, which
prohibits agencies from entering into contract obligations in excess of
current appropriations or obligations prior to the appropriation of funds.
Because we conclude that the modification was within the scope of the
original contract and did not result in a new contract award, this protest
allegation pertains to a matter of contract administration, which our
Office does not review in the context of a bid protest. 4 C.F.R. sect.
21.5(a).

[13] Additionally, because we deny the protests on the merits, there was
no potential prejudice to the protesters regarding this matter. See
McDonald Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see
Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).
Notwithstanding the protesters' disagreement over the form and timing of
the agency's corrective action, the protesters have had an opportunity to
challenge the modification on the merits, and cannot demonstrate that they
were harmed in any way related to the corrective action.