_____________________________________________________ DISMISSED FOR LACK OF JURISDICTION: September 9, 1994 _____________________________________________________ GSBCA 12939-P INNOVATIVE TECHNOLOGY SYSTEMS, INC., Protester, v. DEPARTMENT OF THE TREASURY, Respondent. Martha Thompson, President and CEO of Innovative Technology Systems, Inc., Landover, MD, appearing for Protester. Michelle Davis King and Eleaner R. Loos, Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms, Office of General Counsel, Washington, DC, counsel for Respondent. Before Board Judges WILLIAMS, VERGILIO, and GOODMAN. VERGILIO, Board Judge. On August 19, 1994, Innovative Technology Systems, Inc. (ITS), filed this protest involving the respondent, the Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms (BATF). The protester is an incumbent 8(a) contractor with the United States Small Business Administration (SBA) performing support services for BATF. The base year of the contract expires at the end of September 1994; the agency has determined to not exercise an option for obtaining services for the fiscal year following. Instead, the agency is negotiating with a company other than the protester to effectuate a sole- source 8(a) contract through the SBA. The SBA has deemed the protester ineligible to receive an 8(a) award to satisfy the agency's requirements during the fiscal year following September 1994. The protester, which challenges the agency's failure to compete those requirements, lacks a direct economic interest in the challenged procurement. Lacking an interested party, the Board lacks jurisdiction over this protest. Findings of Fact 1. By letter dated May 4, 1994, to the SBA, the agency noted a requirement for federal information processing (FIP) support services. The contractor is to support the agency's computer facilities, systems and applications programs, and development environment. The letter specifies that the agency seeks to nominate SETA Corporation, a certified 8(a) firm, to provide the required services. Moreover, "The project is to have a 60 month period of performance, beginning on October 1, 1994, with a ceiling of $15,000,000 and a guaranteed minimum of $100,000." Further, the letter specifies that no public solicitation has been issued to satisfy the requirement; the agency cannot make an award directly to an eligible, disadvantaged firm other than under the 8(a) program, 15 U.S.C. 637(a); and the agency has determined that it is not in its best interest to exercise an option with the incumbent contractor--the protester. Protest File, Exhibit 1 at 1. 2. By letter dated May 27, 1994, the SBA informed the agency that the SBA accepted the agency's offering for FIP support services on behalf of SETA. The SBA authorized the agency to negotiate directly with SETA. Protest File, Exhibit 3 at 9. 3. The agency issued to SETA a solicitation to obtain the FIP support services under an indefinite delivery, indefinite quantity (IDIQ) contract with a guaranteed minimum of $100,000, and a not-to-exceed contract price of $15 million during the "base year" (from award through September 30, 1995) and option "years" (lasting up to sixty months after the date of award). 4. In light of the protester's recent filing for bankruptcy, the agency requested, in the course of this protest, that the SBA make a responsibility determination regarding the protester's eligibility to satisfy the requirements at issue--FIP support services for the upcoming fiscal year and beyond. As stated in a letter dated August 26, 1994, the SBA determined that the protester "is not responsible to perform on Government contracts at this time." SBA Letter (Aug. 26, 1994), as amended (Sept. 2, 1994). Discussion In its protest, as amended, the protester challenges actions of the agency. The protester maintains: "The Agency's decision to not exercise the option is not the gist of the [protester's] complaint. It is the bad faith associated with the decision to contract out for the substitute performance with [another company] (including the complicity of the BATF and subcontractor) that is the basis for the complaint, which bad faith was not apparent until on or after August 11, 1994." Amended Protest (Aug. 23, 1994) ( 19). Additionally, the protester asserts that the agency is violating regulation by proceeding on a sole-source basis (i.e., without obtaining competition) to satisfy requirements under an IDIQ contract with a guaranteed minimum below the $3 million threshold, although the amount to be procured is likely to exceed the threshold. The agency has filed two motions to dismiss the protest. The first alleges that the initial protest fails to contain a simple, concise, and direct statement of the grounds for the protest with citations to the provisions of statute, regulation, or the delegation of procurement authority that the protester believes was violated. The agency concludes that the protester has failed to comply with Rule 7(b)(2). Alleging that the initial protest appears to challenge the agency's decision to not exercise the option year of the protester's contract, the agency maintains that the protester failed to raise a valid basis of protest, and that the protest was untimely filed. Agency Motion (Aug. 22, 1994). In the second motion, the agency maintains that the protester is not an "interested party" to pursue the protest because the SBA has deemed the protester to be non-responsible to compete for the underlying requirements. Moreover, the agency maintains that the agency (and SBA) are conducting a sole-source 8(a) procurement fully in accordance with statute and regulation- -the guaranteed minimum of the IDIQ contract falls below the threshold for mandated competition, 15 U.S.C. 637(a)(1)(D)(i)(II) (Supp. V 1993); 48 CFR 19.805-1(a)(2) (1993); 13 CFR 124.311(a)(2) (1994) ("For purposes of indefinite quantity/delivery contracts, the thresholds will be applied to the guaranteed minimum value of the contract."). The Board need focus only on the second motion of the agency. The SBA has determined, pursuant to regulations, 48 CFR 19.805-2 (1993); 13 CFR 124.311(f), 124.313 (1994), that the protester is not eligible to compete for the requirements underlying this protest. Finding 4. The latter regulation states: "If SBA determines that the concern lacks the capability, competency, capacity, credit, integrity, or tenacity and perseverance to perform on a specific 8(a) subcontract, the subcontract will not be awarded to such concern." A prerequisite to the protest jurisdiction of this Board is that the protester be an "interested party." 40 U.S.C. 759(f)(1) (1988). An "interested party" is "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract." 40 U.S.C. 759(f)(9)(B). The SBA has determined that the protester is ineligible to compete for the requirements underlying this protest. Although the protester has indicated that it will seek to have the SBA review and alter its determination of ineligibility, at this time, the protester is not eligible to receive an award of the protested procurement. Accordingly, the protester is not an interested party. Decision The Board GRANTS the agency motion to dismiss for lack of an interested party. Without an interested party, the protest is DISMISSED FOR LACK OF JURISDICTION. ___________________________ JOSEPH A. VERGILIO Board Judge We concur: ____________________________ ____________________________ MARY ELLEN COSTER WILLIAMS ALLAN H. GOODMAN Board Judge Board Judge