Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 1 of 42

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1 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 1 of 42 IN THE UNITED STATES COURT OF FEDERAL CLAIMS Bid Protest CW GOVERNMENT TRAVEL, INC. d/b/a CWTSATOTRA VEL, v. Plaintiff, THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) Case No: Redacted Version COMPLAINT For its Complaint against the United States, CW Government Travel, Inc. d/b/a CWTSATOTravel ("CWT"), 4300 Wilson Boulevard, Suite 500, Arlington, Virginia 22203, by the undersigned counsel, states as follows: Nature of the Action 1. This is a bid protest action against the United States, acting through the General Services Administration (the "GSA" or the "Agency"), challenging the unlawful terms of Solicitation No. QMAD-JM N (the "Solicitation") for end-to-end travel management services under the next generation E-Gov Travel Service 2.0 ("ETS2") program. 2. As a consequence of the significant risk and burden associated with the GSA's unlawful and unreasonable Solicitation terms, none of the three E-Gov Travel Service incumbent contractors (including CWT) submitted a proposal in response to the Solicitation. The GSA, and the vast majority of civilian agencies that must use the ETS2 contract vehicle, will be denied the benefit of a competition among the most experienced and qualified Government travel service providers.

2 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 2 of The GSA has had many opportunities to revise the Solicitation defects. The GSA, however, persists in deviating from Federal Acquisition Regulation ("FAR") requirements and imposing non-commercial terms and conditions on a commercial services contract-in plain violation of FAR Part 12-merely to avoid the administrative hassle of negotiating contract changes and to shield itself from all contract risk over the fifteen year life of the contract vehicle. Such terms are in violation of fundamental principles of Government contract law. 4. Plaintiff, by this Complaint, respectfully seeks (a) ajudgment declaring that the terms of the Solicitation are inconsistent with the FAR, contrary to customary commercial practices in violation of FAR Part 12, ambiguous and unreasonable, and unduly restrictive of competition in violation of the Competition in Contracting Act ("CICA"), and (b) a permanent injunction directing the GSA to amend the Solicitation so that the terms are lawful, unambiguous, and reasonable, and to re-open the competition to permit all prospective offerors to compete on an equal basis. The Parties 5. Plaintiff is a corporation duly organized under the laws of the State of Delaware with its principal place of business in Arlington, Virginia. Since 2003, CWT has been one of three GSA incumbent contractors providing end-to-end travel management services to the Government under the first generation E-Gov Travel Service contractor program ("ETS 1 "). 1 The ETS 1 contract vehicles are set to expire in The ETS2 acquisition is a follow-on procurement for the next generation of automated travel management contracts. The other two incumbent contractors are Northrop Grumman Mission Systems and Hewlett Packard Enterprise Services (formerly Electronic Data Systems Corporation)

3 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 3 of Defendant is the United States, acting through the GSA. The GSA operates the E- Gov Travel Service contract vehicles, which allow civilian agencies to purchase automated and traditional travel services from one of the GSA's travel management contractors. Jurisdiction 7. The Court of Federal Claims has jurisdiction over this action pursuant to the Tucker Act, 28 U.S.C. 1491(b), as amended by the Administrative Disputes Resolution Act. Standing 8. CWT has standing to protest the terms of the Solicitation because it is a prospective offeror whose direct economic interests will be adversely affected by the award of an ETS2 contract. As an incumbent, CWT is a responsible contractor capable of providing the solicited travel services and desires to compete for the new ETS2 contract. However, due to the Solicitation's unlawful and ambiguous terms, which would impose inordinate contract risk on CWT for the fifteen-year period of performance (and other burdens not required in the commercial travel services industry), CWT is not able to submit a proposal. Accordingly, CWT has suffered a non-trivial competitive injury and has standing to challenge the terms of the Solicitation as an "interested party" pursuant to 28 U.S.C. 1491(b)(1). 9. CWT's action challenging the terms of the Solicitation is timely. Prior to filing the instant protest, CWT twice availed itself of the opportunity to object to the Solicitation in timely, pre-award bid protests before the Government Accountability Office ("GAO"). The due date for proposals lapsed during the pendency of the GAO protest on January 18,2011. It is believed that only one company responded to the Solicitation on that date. On April 22, 2011, the GAO partially sustained CWT's protest with respect to ambiguous Solicitation terms, but denied the protest with respect to its other grounds. CWT has been anticipating an amendment - 3 -

4 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 4 of 42 to the Solicitation to clarify ambiguous terms and extend the proposal due date in accordance with the GAO's recommendation. However, as of the date of the filing ofthis Complaint, the GSA has not amended the Solicitation or extended the proposal due date. 10. Because CWT took advantage of its opportunity to challenge the defective Solicitation prior to the proposal due date, and has not delayed in bringing the instant action in the Court of Federal Claims following receipt of GAO's partial denial of its protest, this bid protest action is timely and CWT has standing. Factual Background THE ETS2 SOLICITATION 11. On August 23, 2010, the GSA issued the original Solicitation for the provision of travel management services through the E-Gov Travel Service Program. The Solicitation contemplates the award of a firm, fixed-price, indefinite-delivery, indefinite-quantity master contract to one or more contractors. The period of performance, including option periods, is fifteen years. 12. The E-Gov Travel Services Program is sponsored by the GSA, and was chartered through a cross-agency collaborative task force that included the GSA, the Office of Management and Budget, and over seventy additional Federal agencies. ETS2 is a follow-on procurement to the ETS 1 contracts, in which civilian agencies can purchase end-to-end travel management services from contractors through the award of individual task orders. Under the E Gov Travel Services Program, Federal travel services are automated and consolidated into a secure web-centric environment. 13. ETS2 is intended to include all aspects of official Federal business travel, including travel planning, authorization, reservations, ticketing, fulfillment, expense reimbursement, and travel management reporting. Use ofets2 is required by the Federal Travel - 4 -

5 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 5 of 42 Regulation ("FTR"), 41 C.F.R. Chapters , for civilian agency travel. Thus, upon award of a master contract under this Solicitation, the awardee(s) will then compete for task orders issued by various civilian agencies to provide their ETS2 system to each of those purchasing agencies. 14. The Solicitation requires offerors to provide "a full range ofets2 official Federal travel-related functionality and service," including the following: a. Deployment and implementation services, including training; b. Customer support services; c. Travel planning and cost estimating; d. Creation, routing, and approval of travel authorizations; e. Domestic and international online and agent-assisted official travel reservations; f. Provision for Embedded Travel Management Center fulfillment services; g. Provision for Accommodated Travel Management Center fulfillment services; h. Creation, routing, and obtaining approval of official travel claims to ensure timely and consistently accurate reimbursement; 1. Drafting standard and customized reports and queries; J. Assisting with data exchange, including secure data transmission and delivery to the GSA (upon approval by the agency) or,as directed by the GSA, to designated third-party contractors for the purpose of data aggregation; k. Coordinating VIP travel; - 5 -

6 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 6 of Ensuring ETS2 compatibility with mobile devices; and m. Transition assistance from ETS 1 to ETS2; and transition to a future successor Federal Government-wide travel management service. 15. Section C of the Solicitation contains a lengthy Statement of Work ("SOW"). The SOW includes numerous categories of requirements, including "capabilities and characteristics" for the ETS2 system (Section C.4), technology (Section C.S), security (Section C.6), and agency business systems data integration (Section C.8). See Exhibit 1 (excerpts of relevant Solicitation provisions). 16. Under each category, the SOW identifies a number of "mandatory requirements," which are defined as "essential functionalities, capabilities, and characteristics that must be provided to ensure regulatory and contract compliance..." Solicitation C.3.l.l. The SOW also contains "objectives," which include "functionalities, capabilities, and characteristics" that "contribute significantly to the overall quality ofets2" and "contribute to the eventual achievement of all Federal Government ETS2 goals." Id. C As alleged in this Complaint, many Solicitation provisions require the ETS2 contractors to change their systems as ordered by unidentified personnel in the GSA's Program Management Office ("PMO") to maintain compliance with any future changes in Government information technology ("IT"), security standards and requirements, and Federal travel regulations and policy, as well as integrate and maintain connectivity to multiple, unknown thirdparty contractors providing travel management services to individual agencies-all at no cost to the Government over afifieen-year period of performance. The GSA's PMO or other unidentified Government personnel may also order ETS2 contractors to provide new or modified - 6-

7 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 7 of 42 reports or transmit secure data to unknown third parties throughout the contract period at no additional cost to the Government. 18. The Solicitation purports to give unidentified personnel within the PMO the authority and discretion to order additional work by the ETS2 contractor based upon their interpretation of changes that are required to comply with changes to such things as Federal travel policy or IT security measures. In effect, any GSA employee in the PMO may exercise authority reserved only to properly appointed contracting officers. Moreover, there is no right of appeal if the ETS2 contractor disputes the orders issued by employees of GSA's PMO. 19. During the Solicitation phase, CWT alone submitted over 200 written questions seeking clarification of the terms of the Solicitation, or an explanation for terms that were contrary to commercial practices or created significant risk to contractors. CWT also raised a number of issues and sought clarifications during a pre-proposal conference held for interested parties on September 14,2010. Numerous other potential offerors also sought clarifications and/or commented upon provisions in the Solicitation that violated the FAR or were noncommercial and imposed unreasonable risk on offerors. The GSA, however, failed to provide the requested clarification or adequately correct the Solicitation defects. THE FIRST GAO PROTEST (B ) 20. On November 10,2010, CWT filed a pre-award bid protest at the GAO challenging the terms the Solicitation. CWT generally alleged that: (a) the Solicitation improperly granted the Government the unilateral right to modify the scope of the contract work while eliminating the contractor's right to an equitable adjustment, (b) the Contract has a potential duration of fifteen years with no opportunity for the contractor to adjust pricing, (c) the Solicitation's pricing structure unreasonably and unfairly exposes offerors to excessive risk of - 7 -

8 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 8 of 42 performing unlimited additional work at no cost to the Government and without adequate information, (d) a number of the Solicitation's features and requirements are unduly restrictive of competition, and ( e) vague and ambiguous Solicitation provisions fail to provide offerors with sufficient information to prepare their proposals intelligently or compete on an equal basis. 21. In response to CWT's protest objecting to the uncompensated, unilateral change. provisions of the Solicitation, the GSA issued Amendment 0009, which incorporated the following "market adjustment" clause into the Solicitation: The Government recognizes the potential impact of unforeseeable major changes in market conditions. For those cases where such changes do occur, the contracting officer will review requests to make adjustments, subject to the Government's examination of industry-wide market conditions and documents requested by the contracting officer to support the reasonableness of the price adjustment. If adjustments are accepted, the contract will be modified accordingly. The determination of whether or not extra-ordinary circumstances exist rests with the contracting officer. The determination of an appropriate mechanism of adjustment will be subject to negotiations. Solicitation D.4l. This clause is only applicable to "unforeseeable major changes in market conditions," and did not address the concerns raised in CWT's protest. Moreover, it purports to give the Contracting Officer the final authority to resolve such issues, contrary to the Contract Disputes Act and FAR Part On December 3, 2010, rather than address the issues raised in the protest, the GSA sent a briefletter to the GAO requesting that CWT's protest be dismissed and_ The GSA also represented to the GAO that 23. On December 6, 2010, CWT filed an opposition to the GSA's request to dismiss the protest based on its vague assurance of corrective action. CWT noted that the "one substantial amendment" issued during the protest (Amendment 0009) not only failed to address - 8 -

9 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 9 of 42 or correct any of the original protest grounds, but actually resulted in additional unreasonable Solicitation terms. Nevertheless, the GAO dismissed the protest as academic based upon the GSA's promise to take corrective action. 24. On December 22,2010, the GSA issued Amendment 0010, which extended the due date for proposals until January 18, Amendment 0010 similarly did not address or correct any of the defective Solicitation terms and, like Amendment 0009, resulted in more unreasonable, non-commercial, and competitively restrictive terms. THE SECOND GAO PROTEST (B ) 25. On January 12,2011, CWT again filed a bid protest at the GAO, repeating its challenge to the terms of the Solicitation. 26. On February 14,2011, the GSA filed the Agency Report, which included a Memorandum of Law and Contracting Officer's Statement of Facts. 27. The GSA's market research provided with the Agency Report did not contradict CWT's assertion that many of the Solicitation terms were contrary to customary commercial practice (e.g., that commercial contractors do not customarily agree to perform potentially unlimited changes to their systems to comply with open-ended, undefined compliance requirements, or permit the customer to order unlimited changed or additional work over a fifteen-year period without any form of compensation). 28. On February 24,2011, CWT filed Comments on the Agency Report

10 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 10 of On March 15,2011, the GAO requested that the parties provide supplemental briefing with respect to several protest grounds. The GSA filed the requested Supplemental Agency Report on March 23, 2011, and CWT filed Supplemental Comments on March 28, On April 22, 2011, the GAO issued a decision sustaining one ofcwt's protest grounds with respect to ambiguous Solicitation terms, but denying the remainder of the grounds. 31. In denying CWT's protest grounds, the GAO did not consider or even address CWT's fundamental allegation that the terms of the Solicitation are inconsistent with customarily commercial practice and that, by law, the GSA cannot incorporate such terms without an authorized waiver. See FAR (c). The GAO also did not consider that GSA is attempting an unlawful deviation from the FAR through the terms of the Solicitation. See FAR In its decision, the GAO recommended that the GSA amend the Solicitation to clarify certain ambiguous terms. As ofthe date of the filing of this protest action, however, the GSA has not amended the Solicitation, nor re-opened the competition to permit offerors to submit initial or revised proposals. forth herein. Count I THE SOLICITATION'S PROVISION SUBJECTING CONTRACTORS To UNILATERAL CHANGES WITHOUT COMPENSATION Is AN UNLAWFUL DEVIATION UNDER FAR CWT incorporates the allegations in paragraphs 1 through 32 as though fully set 34. FAR defines a "deviation" as the "use of a policy, procedure, solicitation provision (see definition in 2.101), contract clause (see definition in 2.101), method, or practice of conducting acquisition actions of any kind at any stage of the acquisition process that is inconsistent with the FAR."

11 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 11 of Deviations also include the "omission of any solicitation provision or contract clause when its prescription requires its use" and the "use of a solicitation provision or contract clause prescribed by the FAR on a 'substantially as follows' or 'substantially the same as' basis... if such use is inconsistent with the intent, principle, or substance of the prescription or related coverage on the subject matter in the FAR." ld. 36. FAR states that "deviations from the FAR may be granted as specified in this subpart when necessary to meet the specific needs and requirements of each agency." Deviations must be "authorized by the agency head" and the Contracting Officer "must document the justification and agency approval in the contract file." ld. See also GSAR (providing that the "Head of the Contracting Activity (HCA) must approve an individual deviation to the FAR"). 37. The Solicitation contains terms and conditions that deviate from fundamental requirements of the FAR with respect to contract "changes." 38. There are only two contract provisions authorized under the FAR addressing contract changes in fixed-price services contracts. 39. The first is FAR , Changes-Fixed Price, Alternate I, which allows the Government to order unilateral, in-scope changes to contracts. However, the clause expressly states: "If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract." FAR (b) (emphasis added). a. FAR (a)(1) states that "[t]he contracting officer shall insert the clause at , Changes-Fixed-Price, in solicitations and contracts when a fixed-price

12 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 12 of 42 contract for supplies is contemplated," but "[i]fthe requirement is for services, the contracting officer shall use the clause with its Alternate 1." 40. The second is FAR (c), Contract Terms and Conditions-Commercial Items, which provides "[ c ]hanges in the terms and conditions of this contract may be made only by written agreement of the parties." a. The incorporation of FAR (c) in lieu of FAR is mandatory for commercial item contracts pursuant to FAR (b)(1). 41. Under the commercial or non-commercial FAR changes clauses, contractors are entitled to compensation for additional work required and performed, whether through an equitable adjustment when the changes are imposed unilaterally (FAR ), or through bilateral negotiation (FAR ). 42. One of the principal functions ofthe FAR's "changes" provisions is to ensure that Government contractors are compensated when the Government needs them to perform additional work not defined in the original contract terms. See Nash, Ralph C., GOVERNMENT CONTRACT CHANGES, 2d ed. (Federal Publications, Inc.) at 3-2 ("The primary-and originalpurposes of the Changes clause is undoubtedly to... guarantee that the contractor is adequately compensated when the Government [orders contract changes]..."). 43. The FAR also vests the authority to make contract changes in contracting officers and not other program office personnel. FAR (a) states: "Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not- (1) Execute contract modifications;

13 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 13 of 42 (2) Act in such a manner as to cause the contractor to believe that they have authority to bind the Government; or (3) Direct or encourage the contractor to perform work that should be the subject of a contract modification." 44. Any contract terms and conditions that permit the Government to require contractors to perform changes without any right to compensation (including changes from unauthorized PMO personnel) is fundamentally inconsistent with and contrary to the FAR. 45. Although the Solicitation incorporates FAR (c), it also contains a number of provisions that will force contractors to make potentially unlimited, significant, and costly modifications to their ETS2 systems over the next fifteen years-upon orders from Government personnel or in reaction to external factors that are currently unknown, undefined, and entirely beyond the control of the ETS2 contractor-without any compensation. 46. Under the current Solicitation terms, Government personnel in the GSA PMO or in other Federal agencies may order the ETS2 contractors to prepare new or modified reports, provide secure data to unknown third parties, accommodate traditional travel services contractors selected by individual Federal agencies, accommodate credit card vendors selected by the GSA or individual Federal agencies, or make changes to comply with changes in an agency's financial or accounting system over fifteen years, all with no compensation. 47. Future changes ordered by Government personnel to reflect their interpretation of changes in Government travel policy, IT infrastructure and security requirements, Federal Enterprise Architecture, and the IT infrastructure of multiple third-party contractors, which in turn obligate the ETS2 contractors to change their systems to maintain compliance and operational capabilities, are unilateral contract changes that must be compensated

14 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 14 of The following terms and conditions in the Solicitation impermissibly subject contractors to such uncompensated unilateral changes: (1) The Solicitation requires contractors to comply with all future changes to travel regulations and policy over the next fifteen years without compensation. 49. Section C.4.l of the SOW, entitled "Federal Travel Policy Compliance," lists multiple Federal travel regulations, policies, and Federal travel manuals, and provides that the contractor must comply with any changes to those regulations, policies, or manuals at no additional cost on their effective date over the entire fifteen-year contract period. See Solicitation C ("The ETS2 shall meet or exceed the following mandatory requirements for existing and future Federal travel policy compliance... "). 50. Among other things, the Solicitation requires contractors to provide an ETS2 system that is sufficient to "ensure FTR and other Federal travel policies, business rules, contract parameters, permissions and profiles can be updated, with the effective dates, by the Government and/or the Contractor without the need for programming" and, in addition, to ensure that functionality is "configurable to maximum extent possible allowing the approved agency personnel to implement changes when they occur." Solicitation C In addition, the Solicitation states that the "Contractor shall refresh and maintain their ETS2 service to address commercially available travel service and architecture advances as well as government policy updates over the life of the contract as part of routine operations and maintenance of the service." Id C.5.1.1; see also C.3 ("the Contractor shall refresh and maintain their ETS2 service... to address commercial travel service and technology architecture advancements as they become commercially available, as well as government policy updates over the life of the contract")

15 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 15 of Further, the Solicitation identifies several travel policies, including FTR 301 and 304, the Department of State Foreign Affairs Manual, and the Joint Federal Travel Regulation, and expressly states that contractors shall comply with them and "any subsequent amendments at no additional cost." Id. C.4.1.1(2)-(4). 53. Thus, the Solicitation requires contractors to comply with future (and currently unknown and undefined) changes to travel regulations, policies, or agency travel manuals throughout the life of the contract without any price adjustment, regardless of the magnitude or additional cost to accommodate such changes. The Solicitation imposes no limitation on the potential scope of future policy amendments. (2) The Solicitation requires contractors to change their systems to accommodate third-party Accommodated Travel Management Centers over the next fifteen years without compensation. 54. Sections C.4.2.l0-12 ofthe SOW requires contractors to provide traditional travel services to compliment the automated ETS2 system. The traditional travel services staffed with travel agents are known as Travel Management Center ("TMC") services, and are provided either through Embedded Travel Management Centers ("ETMC") or Accommodated Travel Management Centers ("A TMC"). 55. An EMTC is one in which the ETS2 contractor, such as CWT, provides travel management center services on its own to a purchasing agency, or through one of its subcontractors. The costs of connecting and maintaining the EMTC with the ETS2 system are known and manageable. 56. An ATMC, however, is a third-party contractor selected by one ofthe many potential customer Federal agencies to serve as the provider of that agency's travel management center services. Under the Solicitation, contractors are required to "accommodate an ATMC at no expense to the ATMC or no additional cost beyond the transaction fee to the government"

16 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 16 of 42 whenever directed by the agency. Solicitation C The Solicitation also mandates that contractors "be capable of accommodating the fulfillment services of ATMCs under contract to customer agencies with minimal or no degradation to the service." 57. The ATMC's travel counselors must be able to utilize the contractor's ETS2 system. Integration and accommodation of an A TMC into the ETS2 system can be complex and expensive, depending upon the ATMC's IT system and the particular Global Distribution System ("GDS") utilized by that ATMC. 58. To accommodate ATMCs-which are under contract with each agency and can change at any time-ets2 contractors will be required to make uncompensated changes to their ETS2 system for every customized request it receives from the many potential customer Federal agencies. Federal agencies frequently use TMC contracts to assist in satisfying their small business contracting goals. These small business TMCs often have unique IT systems that are difficult to integrate with the ETS2 system. 59. It is impossible for an ETS2 contractor to predict how many TMCs it might be required to accommodate over the life of the contract. It is also impossible to predict the technologies that will be utilized by TMCs and GDS contractors over the next fifteen years. When TMC and GDS contractors change, or the technology they use changes, the ETS2 contractors will be required under the current Solicitation to accommodate such changes at no additional cost. 60. ETS2 contractors will also be required to ensure that the ETS2 system maintains its connection to the individual agency's software systems, particularly their unique accounting and financial systems. Maintaining such connectivity will require a specialized solution for each agency because each maintains separate software systems. As each agency acquires new

17 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 17 of 42 software upgrades over the fifteen-year life of the ETS2 contracts (whenever and to whatever extent those changes may be), ETS2 contractors will be required, in turn, to change and update their systems to ensure connectively with each agency's systems. It is impossible for the ETS2 contractors to predict the numbers or extent of such agency software upgrades. (3) The Solicitation requires contractors to comply with all future changes to the Federal Enterprise Architecture and technology standards over the next fifteen years without compensation. 61. The Solicitation further requires contractors to comply with the Federal Enterprise Architecture ("FEA") framework "at the time of implementation and over the life of the service." Solicitation C.S. The Solicitation also states that "ETS2 shall incorporate an architecture framework that remains current with technology standards over the life of the contract." Solicitation C.S.l.l(4). 62. The FEA framework and technology standards will continue to develop and change over the next fifteen years, but the degree and complexity of those future changes are unknown. 63. The potential cost and liability associated with compliance can be illustrated by one of the specific mandatory requirements in Section C.S of the SOW, which requires contractors to "support new entrants to the [web] browser market when their annual market share... exceeds 4%." Id. C.S.l.l(6). Thus, in addition to supporting Microsoft Internet Explorer, Apple Safari, Mozilla Firefox, and Google Chrome, contractors are required to change their systems to accommodate a new web-browser if it enters and gains 4% of the market at some point over the next fifteen years-no matter how complex and costly such accommodation might be. 64. CWT cannot prepare a fixed-price proposal which includes a reasonable estimate for the cost of implementing the kinds of changes that may arise to the FEA. Contractors cannot

18 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 18 of 42 intelligently factor such considerations into their proposals. CWT would ultimately be forced to incur the costs of implementing all required FEA adjustments over the life of the contract, no matter how significant and costly they may be. (4) The Solicitation requires contractors to comply with all future changes to Federal IT security requirements over the next fifteen years without compensation. 65. The Solicitation requires contractors to comply with new mandatory security standards: "ETS2 shall meet or exceed the following general mandatory requirements for security standards in accordance with GSA, NIST, OMB, and other Federal laws and mandates," and that "all ETS2 components within the accreditation boundary that contain US Government data shall require the same level of security and protection required for Government-owned information systems." Solicitation C Additionally, when "Government laws, regulations, policies, and guidance on security changes, the ETS2 PMO will notify the Contractor of these requirements and assure compliance... The ETS2 Contractor shall incorporate these changes without additional cost to the government as part of their service lifecycle." Id. C.6.1.1(6); See also C.6.1.5, Data Security ("As Government laws, regulations, policies, and guidance on security changes, the ETS2 PMO will notify the Contractor of these requirements and assure compliance and the Contractor shall assure compliance with these changes through their service lifecycle management processes, and notify the ETS2 PMO of their impact. The ETS2 Contractor shall incorporate these changes without additional cost to the government... ") 67. Under these terms, contractors must comply with orders from the GSA's ETS2 PMO to implement an unlimited number of currently unknown security changes at no additional cost to comply with whatever changes are required to safeguard Federal IT systems over the next fifteen years

19 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 19 of Moreover, the decision as to whether security requirements have changed, and whether the ETS2 contractor must change its systems and the scope of such changes, is reserved to unidentified personnel in the GSA's ETS2 PMO. 69. In addition, the Solicitation subjects the ETS2 contractor to direction and changes ordered by a "governance" committee headed by the ETS2 PMO. 70. Specifically, Section C (e) of the SOW provides: "The security model for ETS2 is founded on OMB, National Institute of Standards and Technology (NIST), Federal Information Processing Standard (FIPS), the Privacy Act of 1974, and GSA security policy and governance... The GSA Authorizing Office will ensure the ETS2 program management office establishes an ETS2 security governance process that includes representatives from Federal agencies, and serves to reconcile ETS2 security issues for government-wide applicability and ensures the service remains current with OMB directives." (5) The Solicitation requires contractors to support any mobile device or platform approved by the Government over the next fifteen years without compensation. 71. Section C.3.3 of the SOW states that, "ETS2 services shall incorporate commercial software capabilities, standards, and best practices for planning," and that this "includes the use of emerging mobile platforms such smartphones, tablets and other new devices." See also C.4.2.S.l(8) ("ETRS shall utilize industry standard means to provide a consolidated travel itinerary available on government approved mobile platforms, such as smartphones and tablets. "). 72. The Solicitation relies upon the impossible assumption that contractors have advanced knowledge of the potential technological advancements in mobile devices and similar platforms over the nextfifteenyears, in addition to the amount of work which may be required to modify their ETS2 programs to enable application of future, not yet developed, mobile devices

20 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 20 of The incredible changes in mobile technologies over the past five years alone (much less the last fifteen years) is conclusive evidence that such a requirement is arbitrary. (6) The Solicitation requires contractors to provide an unlimited number of reports over the next fifteen years without compensation. 74. The Solicitation requires that contractors produce and deliver any new or additional reports at the Government's request at no additional cost. See Solicitation C ~ 9.1(1) ("In the event additional report types are deemed needed in the future and upon formal notification by the ETS PMO, the Contractor shall address these requests via the release management and technology refreshment processes outlined in Section C "); C.9.1.(2) ("Additional reports may be approved as standard reports by request of the agencies and upon approval by the ETS2 PMO."); C.9.1.(1 0) ("The contractor shall expeditiously respond to GSA/customer agency requests for process, operational, or Government wide summary-level information and validations to assist the Federal Government in issue resolution and decision making. These can be requests to modify existing reports, or create a new report query for I-time use or multi-use purposes... "). 75. Under these Solicitation provisions, ETS2 contractors would be required to produce and deliver additional reports whenever they are "deemed necessary" by the ETS Program Office. Additionally, any of the numerous customer agencies can modify the list of standard reports in Attachment 3 to the Solicitation that ETS2 contractors would be required to produce and deliver. Finally, the SOW permits the GSA or any customer agency to request and impose modifications to existing reports, or create entirely new reports. 76. Any such additional work that may be ordered by the GSA or customer agencies would constitute a change to the Solicitation's current report requirements without providing compensation to the ETS2.contractor

21 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 21 of 42 (7) The Solicitation requires contractors to accommodate changes to individual agency business systems over the next fifteen years without compensation. 77. The Solicitation provides that contractors must "integrate with Federal Government agency business systemsbi-directionally, such as financial, human resources, charge card contractors and so on... The Contractor shall include all costs associated with establishing standard integration configuration and connectivity set up, operating, and maintaining the ETS2 integration capability defined in this section in its voucher fee pricing." 78. Section C.8.I.l of the SOW also requires that "ETS2 shall have the capability to accommodate legacy systems based on older technologies including, but not limited to Electronic Data Interchange (EDI) and User Defined Field (UDF) formats as well as the latest emerging data standards." 79. Therefore, as each customer agency's business systems changes over the fifteenyear contract period from old legacy systems to as-yet undeveloped systems, ETS2 must be changed to maintain integration without any additional compensation. (8) The Solicitation requires contractors to accommodate any changes to Government credit card vendors over the next fifteen years without compensation. 80. Section C of the SOW requires the ETS2 contractor to accommodate changes in Government credit card vendors either due to transitions caused by the expiration of the GSA's SmartPay master contract, or because individual customer agencies decide to change credit card vendors. 81. The ETS2 contractor must develop and deliver a comprehensive, agency-specific Transition Plan that ensures no disruption of service each time a customer agency switches to a new credit card vendor during the fifteen-year contract period for no additional cost. The ETS2 contractor must also provide sufficient quantities of qualified resources of all types, such as

22 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 22 of 42 hardware/software, tools, and personnel, to ensure that all customer agencies may transition concurrently and without disruption of service during normal business hours in the event the GSA changes credit and vendors under the SmartPay master contract. (9) The Solicitation requires contractors to collect, aggregate and transfer data security to unknown third party contractors. 82. Section C.8.5 of the SOW states that the ETS2 contractor "shall provide support for any data aggregation activity requested by GSA by securely transmitting all ETS2 standard data elements to GSA or to a designated third-party contractor over the life of the contract at no additional cost." 83. The number or identity of any such third parties or the complexity and cost of securely transferring data ordered by the GSA is not known and cannot reasonably be estimated by the ETS2 contractor. Directing the ETS2 contractor to transmit data to an unknown contractor, with an undefined IT system would constitute a contract change. (10) The Solicitation negates FAR provisions that protect contractors from events that are unforeseen and beyond their control. 84. FAR (f) excuses a contractor for non-performance if caused by an occurrence beyond the reasonable control of the contractor and without its fault or negligence. 85. The "market adjustment" clause (Section D.41) included in the Solicitation by Amendment 0009 essentially negates this fundamental FAR protection. While the clause "recognizes the potential impact of unforeseeable major changes in market conditions," it states only that the Contracting Officer will review requests for price adjustments "subject to the Government's examination of industry-wide market conditions and documents requested by the contracting officer to support the reasonableness of the price adjustment." The clause also provides that the "determination of whether or not extraordinary circumstances exist rests with the contracting officer." - 22-

23 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 23 of The "market adjustment" clause only allows a compensated change where "unforeseeable major changes" in "industry-wide market conditions" occur, and merely provides an opportunity for the contractor to request compensation, with the Contracting Officer effectively retaining sole discretion over any adjustments. The clause does not give the ETS2 contractors the right to even request a price adjustment for the many changes that may be ordered by the PMO or individual Federal agencies. 87. The clause effectively reserves to the Contracting Officer the final authority to resolve major contract changes, which directly conflicts with the appeal procedures established in the Contract Disputes Act and FAR Part 33. The "market adjustment" clause does not address the fact that a number of Solicitation provisions subject contractors to potentially unlimited changes without any form of payment. It also negates the protection of FAR (f), which excuses a contractor's delay or non-performance for unforeseeable events beyond its control. * * * 88. Each of the above-described requirements in sub-sections 1 through 10 will force the ETS2 contractors to comply with unilateral changes without any compensation. These identified requirements are examples only and not inclusive of every Solicitation term that would subject contract to uncompensated changes at the direction of Government personnel. 89. The GSA's insistence on the right to issue unilateral and unlimited changes with no compensation violates fundamental FAR mandates. Uncompensated changes are fundamentally contrary to the FAR (either FAR or FAR (c)). 90. The Solicitation also permits PMO staff to dictate when the ETS2 contractor must implement changes to its system. Changes ordered or even "encouraged" by PMO personnel and other Government staff that are not contracting officers violates FAR ( a)

24 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 24 of The GSA, however, has not executed a valid justification and approval in accordance with FAR to deviate from the FAR and include Solicitation terms giving the Government and PMO staff the right to unilaterally order unlimited and uncompensated changes. 92. Moreover, even if the head of the GSA executes such a FAR deviation, there is no lawful basis to do so. A deviation is not "necessary to meet the specific needs and requirements" of the GSA because the Agency can accomplish all of its technical and compliance needs by using bilateral negotiations under FAR ( c), or ordering changes and providing contractors a right to an equitable adjustment under FAR The GSA also has no legal basis for permitting individuals who are not warranted contracting officers to dictate changes in performance by the ETS2 contractor. 93. The GSA's attempt to impose unilateral changes without any right to an equitable adjustment is unprecedented, whether in a commercial or Governmental contracting environment. forth herein. Count II THE SOLICITATION'S PROVISION SUBJECTING CONTRACTORS To UNILATERAL CHANGES WITHOUT COMPENSATION Is INCONSISTENT WITH CUSTOMARY COMMERCIAL PRACTICE IN VIOLATION OF FAR PART CWT incorporates the allegations in paragraphs 1 through 93 as though fully set 95. The Federal Acquisition Streamlining Act of 1994, Pub. L. No , 1 091, 108 Stat. 3243, 3272 (1994) ("F ASA"), established a Government preference for the acquisition of commercial supplies and services. 96. FAR defines a "commercial item" as "[a]ny item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for - 24-

25 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 25 of 42 purposes other than governmental purposes, and... [h las been sold, leased, or licensed to the general public." 97. The type of end-to-end travel management services requested under the Solicitation are "commercial" in nature because the general public customarily uses these services (e.g., travel planning, travel reservations, online trip booking, and use of travel agents) to coordinate and manage travel. 98. The SOW acknowledges that the travel services are "commercial," describing the services to be acquired as "End-to-End commercial travel management services." Solicitation C.l. 99. In the Agency Report submitted during the GAO protest, the GSA also asserted that the travel services are and represented that they were _ 100. FAR (a)(2), which implements FASA, states that "contracts for the acquisition of commercial items shall, to the maximum extent practicable, include only those clauses... [d]etermined to be consistent with customary commercial practice." (emphasis added) FAR ( c) allows an agency to deviate from customary commercial practice, but only if the agency properly executes a waiver: The contracting officer shall not tailor any clause or otherwise include any additional terms or conditions in a solicitation or contract for commercial items in a manner that is inconsistent with customary commercial practice for the item being acquired unless a waiver is approved in accordance with agency procedures. The request for waiver must describe the customary commercial practice found in the marketplace, support the need to include a term or condition that is inconsistent with that practice and include a determination that use of the customary commercial practice is inconsistent with the needs of the Government. FAR (c) (emphasis added)

26 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 26 of The Solicitation, however, contains "additional terms and conditions" that are inconsistent with customary commercial practices in violation of FAR (c). The most significant and egregious category of "non-commercial terms" is the Solicitation's requirement that contractors agree to make unilateral changes ordered by the PMO or customer agencies without any compensation The Solicitation incorporates the standard "terms and conditions" clause for commercial items, FAR , which states: "Changes in the terms and conditions of this contract may be made only by written agreement of the parties." FAR ( c) (emphasis added) The requirement for bilateral agreement for any contract changes under FAR (c) is standard commercial practice. Indeed, FAR (b)(3) states that "[FAR ] includes terms and conditions which are, to the maximum extent practicable, consistent with customary commercial practices..." (emphasis added) In any commercial industry (much less the travel services industry), contractors do not customarily enter into contracts that allow another commercial party to impose unilateral changes based on undefined, potentially unlimited external factors, nor do they allow unilateral changes to commercial contracts without payment. It is not customary commercial practice for contractors to subject themselves to inordinate risk and the potential for unlimited liability for contract changes ordered by the other contracting party without payment CWT and its parents or affiliates collectively constitute one ofthe largest providers of commercial travel services in the world and can credibly attest to what constitutes "customary" commercial terms

27 Case 1:11-cv GWM Document 31 Filed 07/07/11 Page 27 of For example, as reflected in CWT's standard commercial services contract, a contractor will incorporate a customer's unique policies into the online travel system at the commencement of the contract, but any subsequent changes required by the customer are subject to negotiated price adjustments. When the need for software re-programming arises, the standard contracts consider this an enhanced service for which clients are expected to pay additional fees to reflect the added cost and time required to perform the additional work requested. See, e.g., Exhibit 2 at 10 (CWT Standard Corporate Travel Agreement,) (listing "Customized IT Programming" among the enhanced services) Each of the specific provisions discussed above in Count I constitute "additional terms and conditions" that would subject contractors to unlimited changes of unknown magnitude over the fifteen-year life of the contract without any compensation Because these terms are inconsistent with commercial practice, the Solicitation violates FAR and The GSA's market research, which was submitted as part of the administrative record before the GAO proceedings, does not reflect, in any way, that it is customary commercial practice for travel service providers to agree to accept and implement unlimited changes ordered by the other contracting party to comply with such unknown factors as changes to Government 2 3 In previous Government travel management contracts, changes to travel regulations and/or policy were frequently incorporated into travel software during routine, semiannual commercial refreshments of software programs without additional cost, if the changes were insignificant. The contractor, however, had a right to request an equitable adjustment based on the nature of the required change. These prior terms were consistent with commercial practice. The Solicitation does not attempt to "tailor" FAR ( c) as contemplated by FAR , but instead incorporates additional, separate terms that are directly contrary and permit Government personnel to order unilateral and unlimited changes at no cost to the Government