__________________________ DENIED: December 18, 1996 __________________________ GSBCA 12974 OLD DOMINION SECURITY, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Ronald W. Maust, President, and Judith G. Mashburn, Contract Specialist, of Old Dominion Security, Inc., Hampton, VA, appearing for Appellant. Kenneth E. Kendell, Office of Regional Counsel, General Services Administration, Philadelphia, PA, counsel for Respondent. Before Board Judges HYATT, DeGRAFF, and GOODMAN. DeGRAFF, Board Judge. Appellant entered into a requirements contract to provide guard services to respondent. According to appellant, respondent required more services than appellant anticipated providing when it entered into the contract. Consequently, appellant submitted a claim to the contracting officer. The contracting officer denied the claim and this appeal followed. As explained below, the appeal is denied. Solicitation On January 19, 1993, the General Services Administration (GSA) issued a solicitation for a contract for guard services. The solicitation explained that the contractor would provide armed and unarmed guards in seven cities in Virginia for one year, as required by GSA. GSA would have the option of extending the term of the contract for two additional one-year periods. Appeal File, Exhibit 1B. The pertinent portions of section C of the solicitation read as follows: PART I DESCRIPTION 1. This solicitation is for a term contract for armed and unarmed guard service for the following cities in Virginia: Norfolk, Suffolk, Chesapeake, Virginia Beach, Hampton, Newport News and Portsmouth. A term or requirements contract provides for filling all of an agency's requirements for a particular service within a specified time. In this solicitation GSA's requirement is for armed and unarmed guard services, excluding U.S. Marshall contract guards, in the greater Norfolk area as described above . . . . In item 2 below are listed the probable locations, start dates and estimated number of annual guard hours for which GSA expects to require guard service . . . . The locations and post hours are also listed in Part III, Section J, Exhibit 1. PLEASE NOTE: The following listing is the Government's best estimate at this time of the total quantity of service required. THIS ESTIMATE IS NOT A REPRESENTATION THAT THE ESTIMATED QUANTITY WILL BE REQUIRED OR ORDERED, OR THAT CONDITIONS AFFECTING REQUIREMENTS WILL BE STABLE OR NORMAL. 2. LOCATION ESTIMATED ESTIMATED START DATE ANNUAL HOURS Glopar Building May 1, 1993 22,682 116 Lakeview Parkway Suffolk, VA Federal Building December 1, 1993 9,287 200 Granby Mall Norfolk, VA ______ TOTAL 31,969 PART II 1. Scope of Work. The contractor shall provide management, supervision, manpower, vehicles, equipment and supplies . . . necessary to provide professional ARMED AND UNARMED guard service as described herein, as may be required from time to time in a specific geographic area or individual location as described elsewhere in this solicitation. . . . . 3. Contract Effort Required. a. Man Hours Required. The manpower outlined in Part III Section J, Exhibit 1, is the minimum man-hours which have been determined by the Government as essential to perform the work required by this contract. . . . . b. Additions Deletions to Man-hours Required. (1) The man-hours stated in Part III, Section J, Exhibit 1 are those hours which have been identified as the basic service currently being essential to the performance of this contract, and are the man-hours which must be provided when performance under this contract begins. Individual posts, as well as the number of hours required at individual post(s) may be added to or deleted from this contract based upon the Government's requirements. (2) The Government has the unilateral right to order services in excess of the man-hours stated in Part III, Section J, Exhibit 1, as long as the increase is within the scope of the contract, and the Contractor will be obligated to provide services at the specified rate shown in Part I, Section A, Form 36. . . . . Appeal File, Exhibit 1B. The man-hours stated in Part III, Section J, Exhibit 1 were 22,682 hours for the Glopar Building and 9,287 hours for the Federal Building. Appeal File, Exhibit 1B. Section C of the solicitation described the guards' duties as providing entrance control, package inspection, roving patrol, and traffic control; monitoring and operating security and fire systems; enforcing building rules and regulations; detaining persons attempting to gain unauthorized access to the building; performing other functions as directed in the event of civil disturbances, attempts to commit espionage, or sabotage; and acting independently as the primary security response until law enforcement assistance arrives. Appeal File, Exhibit 1B. Section C of the solicitation also explained that the contractor was required to furnish and maintain "all items of uniform and equipment necessary to perform work required by the contract . . . ." Among the items of equipment needed were radios, firearms, ammunition, a safe or cabinet for storing firearms and ammunition, uniforms, badges, shoulder patches, and identification name tags. Appeal File, Exhibit 1B. Section C of the solicitation provided that the contractor would be required to submit certain information to GSA concerning each potential guard, and that GSA would determine whether the individuals were suitable. The solicitation does not state the length of time GSA would take to make a suitability determination. Section C also explained that the contractor would have to provide training to potential guards in certain subject areas and in firearms proficiency. GSA would conduct written and firearms tests for potential guards. A potential guard who failed GSA's written test could take the test a maximum of three more times in a ninety- day period. A potential guard could take the firearms test a maximum of two times within a thirty-day period, and could take the test a third time after waiting a minimum of forty-five days following the second test. The solicitation does not state the frequency with which GSA would conduct its tests. Appeal File, Exhibit 1B. In Section B of the solicitation, offerors were asked to quote a price per hour for furnishing "all management, supervision, labor, materials and equipment and all general and administrative expense and overhead" for guard service during the base year of the contract and during two option years. Appeal File, Exhibit 1B. Award Old Dominion Security, Inc. (Old Dominion) had provided guard services to GSA at the Federal Building since 1983. Appeal File, Exhibits 8, 14 at 30. On February 16, 1993, Old Dominion submitted a proposal in response to the solicitation. Supplemental Appeal File, Exhibit 34. In early March 1993, the Military Sealift Command asked GSA to provide guard services at St. Helena's Annex in Norfolk. The Military Sealift Command told GSA that it expected to need service beginning on July 1, 1993. Also in March 1993, a GSA official signed a form that authorized this work to be performed. Supplemental Appeal File, Exhibits 33, 45 at Tab 2. GSA did not amend its solicitation to increase its estimated annual hours to take into account the services that would be required at St. Helena's Annex. Appeal File, Exhibit 1. A GSA contract specialist conducted negotiations with Old Dominion in early April 1993. During negotiations, the contract specialist told Old Dominion's representative that a requirements contract would be different from Old Dominion's existing contract, which was for a fixed number of guards at a single location. The contract specialist explained that a requirements contract would obligate Old Dominion to supply guard services as needed in the cities identified in the solicitation. Appeal File, Exhibit 17. On April 20, 1993, GSA requested best and final offers. Old Dominion submitted its best and final offer on April 26, 1993. Supplemental Appeal File, Exhibit 36. Old Dominion quoted a price of $10.37 per hour for the basic service required during the base year and during the two option years. Supplemental Appeal File, Exhibit 3. Old Dominion's prices included the cost of administration, uniforms, weapons, and radios, as required by the solicitation. Old Dominion's prices also included some overtime. Appeal File, Exhibit 14 at 29. Based upon its previous experience with GSA, Old Dominion expected that GSA would add between 2,000 and 4,000 hours to the number of hours estimated in the contract. Appeal File, Exhibit 14 at 70. GSA awarded the guard services contract to Old Dominion on June 1, 1993. The contract contained an effective date of July 1, 1993, and incorporated the prices quoted by Old Dominion in its offer. Appeal File, Exhibit 1A. A letter from GSA to Old Dominion that accompanied the contract stated that guard service would be required at St. Helena's Annex beginning on July 1, 1993. Supplemental Appeal File, Exhibit 4. Performance GSA issued delivery orders for guard services during the base year (July 1, 1993, through June 30, 1994) at the Glopar Building (22,682 hours) and at the Federal Building (4,244 hours). GSA also issued a delivery order for guard services during the base year at St. Helena's Annex (9,855 hours), and at three other locations. Appeal File, Exhibit 1D. On May 24, 1994, GSA exercised its option for the first option year (July 1, 1994, through June 30, 1995). Appeal File, Exhibit 1F. GSA issued delivery orders for guard services during the first option year at the Glopar Building (22,682 hours) and at the Federal Building (4,419 hours). GSA also issued a delivery order for guard services during the first option year at St. Helena's Annex (9,867 hours), and at five other locations. Appeal File, Exhibit 1D. Old Dominion had to supply five guards to cover the required shifts at St. Helena's Annex. Appeal File, Exhibit 13 at 21; Supplemental Appeal File, Exhibit 54. In order to fulfill this requirement, Old Dominion's guards worked overtime hours. Appeal File, Exhibit 13 at 18; Supplemental Appeal File, Exhibit 50. For all of the potential guards that Old Dominion proposed to use, GSA took an average of nearly three months either to determine that a guard was suitable or to give Old Dominion temporary permission to use the guard. There was a lag of approximately one month between the time GSA found individuals to be suitable and the time that GSA notified Old Dominion that they were suitable. Supplemental Appeal File, Exhibits 38, 40. GSA's determination of suitability was based in part upon information supplied by the contractor concerning each potential guard. GSA forwarded information regarding potential guards to the Federal Bureau of Investigation (FBI), which reviewed the information and ran a fingerprint check, and then informed GSA of the results. Appeal File, Exhibit 18. GSA conducted written tests and firearms tests of potential guards. Concerning the written tests, no information is available regarding the exact number of test sessions that GSA held or the number of individuals tested in the base year of the contract, but GSA held at least ten test sessions during that period on an "as requested" basis. During the first option year, GSA held eighteen test sessions for the written test. At least five testing slots were available at each test session, but Old Dominion supplied individuals to fill all of the available slots for only two of the eighteen tests. As for the firearms tests, GSA held thirteen tests during the base year of the contract and fifteen tests during the first option year. At least five testing slots were available at each test session, but Old Dominion rarely supplied individuals to fill all of the slots. Old Dominion's written test failure rate for July 1994 through May 1996 was 25.44 percent. Old Dominion's firearms test failure rate for the base year was 60 percent and for the first option year was 41 percent. Appeal File, Exhibit 18. The record contains two letters written by Old Dominion to GSA, related to GSA's testing of potential guards. The first letter, dated November 17, 1993, asks GSA to administer tests to five guard candidates the following week. The letter states that Old Dominion's guards had been working overtime hours since April 1993, and that the tests were requested to alleviate this overtime burden. The second letter, dated December 6, 1993, informs GSA that Old Dominion would incur additional unbudgeted overtime if GSA insisted upon determining the suitability of potential guards before allowing those individuals to be tested. Appeal File, Exhibit 8. Claim and Appeal On April 7, 1994, Old Dominion submitted a claim to the contracting officer for $38,879.28 for work performed at several locations. Appeal File, Exhibit 8. The contracting officer denied Old Dominion's claim on June 9, 1994. Appeal File, Exhibit 9. On September 14, 1994, Old Dominion appealed the contracting officer's decision to the Board. Appeal File, Exhibit 12. On March 18, 1996, Old Dominion narrowed the scope of its claim to request $16,119.99 in costs associated with services performed only at St. Helena's Annex. Supplemental Appeal File, Exhibit 37. Old Dominion requests $14,579.99 for amounts paid to guards who worked overtime at St. Helena's Annex. Old Dominion calculates the amount due as follows: Base Year 2,227.25 hours @ $3.445 (1/2 time rate/hour) $7,672.88 FICA (7.65 percent) 586.98 Workers' Compensation ($3.21/$100 of payroll) 246.30 Insurance ($35.75/$1000 of payroll) 274.31 Profit (9 percent) 690.56 Total $9,471.03 First Option Year 1,131.5 hours @ $3.61 (1/2 time rate/hour) $4,084.72 FICA (7.65 percent) 312.48 Workers' Compensation ($4.25/$100 of payroll) 173.60 Insurance ($41.75/$1000 of payroll) 170.54 Profit (9 percent) 367.62 Total $5,108.96 Supplemental Appeal File, Exhibit 37. Old Dominion calculated the number of overtime hours by reviewing its employee time sheets and then reducing this number to take into account sick days and similar events. Supplemental Appeal File, Exhibits 37, 51. Old Dominion's rates for workers' compensation and insurance are supported by evidence in the record. Supplemental Appeal File, Exhibit 42A. There is no support in the record for the amount of FICA claimed by Old Dominion. Old Dominion also requests $1,540 for the following items of equipment: One safe $ 200 Two guns 600 Ammunition 90 One radio 650 Total $1,540 Supplemental Appeal File, Exhibit 37. The record does not contain any receipts to establish that Old Dominion paid for a safe, two guns, ammunition, and a radio due to providing service at St. Helena's Annex. There are some receipts in the record, which may or may not be for items of equipment used in performing the GSA contract, but there is nothing to establish that these items of equipment were purchased due to the requirement for services at St. Helena's Annex. Supplemental Appeal File, Exhibits 42D, 42E, 42F. Some of the dollar figures contained in Old Dominion's claim for equipment are based upon telephone calls that Old Dominion made to vendors when it prepared its claim. Supplemental Appeal File, Exhibits 37, 48. Discussion Old Dominion advances three theories as to why it is entitled to recover. First, it argues that GSA's requirement to provide guard services at St. Helena's Annex constituted a compensable change to the contract. Second, Old Dominion argues that the length of time GSA took to determine suitability and to conduct written and firearms tests resulted in Old Dominion's guards working unbudgeted overtime. Third, it argues that GSA's estimate of the number of required guard hours was defective because it did not take into account the requirements of St. Helena's Annex, and that Old Dominion's reliance upon the inaccurate estimate caused Old Dominion to suffer a financial loss. As explained below, we hold that GSA did not change the contract by adding services at St. Helena's Annex and that GSA's actions concerning suitability and testing did not cause Old Dominion's guards to work overtime. We also hold that, although GSA did not base its estimate upon the most current information available, Old Dominion did not establish that its reliance upon GSA's estimate caused the damages that Old Dominion claims to have incurred. Addition of St. Helena's Annex Old Dominion argues that GSA changed the work required by the contract when it issued a delivery order for guard services at St. Helena's Annex. Old Dominion says that it was obligated to fulfill GSA's requirements, but that the St. Helena's Annex requirements were those of the Military Sealift Command and not requirements of GSA. Old Dominion says that it assumed that GSA's requirements "included installations historically or currently covered by GSA contracts, but did not include the guard requirements of other Federal agencies." Appellant's Opening Brief at 13-14. We hold that GSA's issuance of a delivery order for services at St. Helena's Annex did not constitute a change to the work required by the contract. GSA's solicitation was for guard services in a specific geographic area. The solicitation was not restricted either to buildings occupied by GSA employees or to buildings that were guarded by GSA at the time the solicitation was issued. The guard services required by GSA at St. Helena's Annex were within the scope of the contract, and GSA's issuing a delivery order for those services did not constitute a change to the contract. Suitability and Testing Old Dominion argues that it was required to incur overtime hours because GSA failed to provide suitability determinations and testing as needed to enable Old Dominion to hire additional guards. Appellant's Opening Brief at 16. The contract did not require GSA to make its suitability determinations within any particular length of time. GSA generally took approximately three months either to determine that a potential guard was suitable or to grant Old Dominion temporary permission to use the individual as a guard. Old Dominion has not established that this is an especially long time, given that part of the three months was spent referring information to the FBI and waiting for the FBI's response, and also considering the importance of the guards' duties. Similarly, the contract did not require GSA to conduct its written and firearms tests with any particular frequency. GSA conducted at least ten written test sessions during the base year on an as-requested basis, eighteen written test sessions during the first option year, thirteen firearms test sessions during the base year, and fifteen firearms test sessions during the first option year. Each test session had at least five slots available for Old Dominion to fill. The contract makes clear that it was Old Dominion's responsibility to provide training so that its potential guards could pass their written and firearms tests, and that individuals who failed these tests were limited to the number of times and the frequency with which they could take the tests again. Yet, Old Dominion rarely supplied individuals to fill all of the testing slots and a significant number of Old Dominion's potential guards failed the tests. We hold that Old Dominion did not establish by a preponderance of the evidence that the shortage of guards and the resulting overtime hours were caused by GSA's actions. It is at least as likely that the shortage of guards and the overtime hours were the result of Old Dominion's sending insufficient numbers of individuals to be tested and having a significant number of those individuals fail to pass the tests. Estimate The Federal Acquisition Regulation (FAR) requires agencies to state realistic estimated quantities in solicitations for requirements contracts and in the contracts themselves. The FAR also requires agencies to base their estimates upon the most current information available. 48 CFR 16.503 (1995). The use of an unrealistic estimate can affect the pricing of offers and, thus, affect the integrity of the procurement process. If an offeror can establish by a preponderance of the evidence that an agency failed to use due care in preparing an estimate, the offeror might be able to recover damages from the agency. Medart v. Austin, 967 F.2d 579 (Fed. Cir. 1992). In order to recover, the offeror must establish that it incurred financial losses that are directly attributable to the offeror's reasonable reliance upon the agency's estimate. Ambulance Service & Transport of Marlin, VABCA 3485, 94-2 BCA  26,729. Old Dominion argues that it is entitled to recover because GSA failed to disclose, prior to award, that services at St. Helena's Annex would be required. Appellant's Opening Brief at 13-16. GSA was not required to search for or to create additional information concerning its requirement for guard services, but it was required to take into account all relevant, available information. After the solicitation was issued, but several months before the contract was awarded, GSA knew that its requirements would include guard service at St. Helena's Annex. GSA, however, never amended its estimate to include those hours. We hold that, because GSA did not take into account all of the relevant information available to it concerning its anticipated requirements, Old Dominion has established by a preponderance of the evidence that GSA failed to use due care in preparing its estimate. Old Dominion has not established, however, that the financial losses it claims to have incurred are directly attributable to its reasonable reliance upon the estimate contained in the solicitation. Before it entered into the contract at issue in this case and before GSA required guard service at St. Helena's Annex, Old Dominion was having problems supplying the required number of guards and was incurring overtime costs. According to a November 17, 1993 letter from Old Dominion to GSA, Old Dominion had been experiencing such problems and incurring overtime costs since April 1993. Because Old Dominion's problems began before GSA required guard service at St. Helena's Annex, Old Dominion has not convinced us that the financial losses it claims to have incurred were attributable to its reliance upon GSA's estimate. In addition to the fact that Old Dominion's problems with overtime hours began before GSA required service at St. Helena's Annex, Old Dominion's problems continued long after the point when overtime could plausibly be attributed to reliance upon GSA's estimate. In order to avoid incurring overtime costs, Old Dominion had only to hire five suitable guards who could pass the written and firearms tests. The premise of Old Dominion's claim is that, for two years, it was unable to hire the guards that it needed because GSA's estimate did not include St. Helena's Annex. If Old Dominion's problems had begun when GSA issued the delivery order for St. Helena's Annex, we could understand how Old Dominion might have incurred overtime for three or four months, because GSA would have taken that long to determine suitability and potential guards would have needed that time to take their written and firearms tests. However, Old Dominion has not established that its problems continued for two years, due to GSA's estimate. At any time during the two years, if Old Dominion had taken steps to fill all of the testing slots with a greater number of qualified candidates, it could have hired the five guards it needed and stopped paying overtime. Old Dominion's inability to produce, for two years, the guards that it needed in order to avoid incurring overtime costs is not directly attributable to GSA's estimate. In addition to the fact that Old Dominion has not established that its overtime costs were directly attributable to GSA's estimate, Old Dominion has not established that it reasonably relied upon the estimate when it prepared its prices. The estimate identified only two locations in two cities where guard service would be required when performance of the contract began. The solicitation, however, explained that the contractor would be required to provide guard services as required in seven cities in Virginia. The solicitation explained that posts and hours could be added to the contract, based upon the Government's requirements, and that the hours contained in the estimate were the minimum hours that would be needed to perform the work required by the contract. The solicitation's statements that services could be needed in five cites other than the two mentioned in the estimate, that posts and hours could be added to those listed in the estimate, and that the estimate reflected a minimum number of hours needed at the beginning of performance convince us that, if Old Dominion relied upon the estimate as stating the total number of hours that would be required, its reliance was not reasonable. In fact, Old Dominion did not consider GSA's estimate as being the total number of hours that would be required. Relying upon its previous experience with GSA, Old Dominion thought that it would be required to work 2,000 to 4,000 hours more than the hours estimated in the solicitation, and Old Dominion included some overtime costs in its prices. Finally, not all of the losses that Old Dominion claims to have incurred are supported by evidence contained in the record. Specifically, Old Dominion's claims for one safe, two guns, ammunition, and one radio lack any evidentiary support. Old Dominion's prices were supposed to be sufficient to cover all of these items. In addition, Old Dominion has not established how it suffered its claimed financial losses, given that its prices included the costs of some overtime and also included the costs of working 2,000 to 4,000 hours in addition to the hours contained in GSA's estimate. Decision The appeal is DENIED. ______________________________ MARTHA H. DeGRAFF Board Judge We concur: _______________________________ ______________________________ CATHERINE B. HYATT ALLAN H. GOODMAN Board Judge Board Judge