DENIED: November 13, 1992 GSBCA 12006-P VALIX FEDERAL PARTNERSHIP I, Protester, v. DEPARTMENT OF THE ARMY, Respondent, and FUTURA SYSTEMS & TECHNOLOGIES, INC., Intervenor. Shelton H. Skolnick, Derwood, MD, counsel for Protester. Richard Couch, Craig E. Hodge, and William R. Medsger, MAJ, JAGC, U.S. Army Materiel Command, Alexandria, VA, and David H. Scott, U.S. Army Test and Evaluation Command, Aberdeen Proving Ground, MD, counsel for Respondent. Patricia O'Hearn, Vice President of Futura Systems & Technologies, Inc., Salem, NH, appearing for Intervenor. Before Board Judges NEILL, PARKER, and VERGILIO. NEILL, Board Judge. This protest was filed by Valix Federal Partnership I (Valix) on September 9, 1992. It concerns an invitation for bids for the purchase of microcomputers by the Department of the Army (the Army). The procurement has been set aside by the Army for small disadvantaged business (SDB). Protester has challenged the propriety of this SDB set-aside on the ground that it includes end items not manufactured by SDBs. Futura Systems & Technologies, Inc., has intervened in the protest as an intervenor of right. The parties have agreed to have this case decided on the record without benefit of a hearing. Rules 9, 11. For the reasons set out below, we deny the protest. Findings of Fact 1. On Wednesday, June 17, 1992, respondent published a notice in the Commerce Business Daily advising readers of its requirement for "personal computers with various configurations." The notice also indicated that this procurement was restricted to all responsible small disadvantaged business sources. Protest File, Exhibit 2. 2. On August 4, respondent issued invitation for bid number DAAD05-92-B-0163 as a 100% set-aside for SDB for the purchase of variously configured personal computers. Protest File, Exhibit 4. The solicitation was amended on August 7. Id. at 1. 3. Section B of the solicitation is a schedule of the items sought. There are ten contract line item numbers (CLINs). Each CLIN calls for a personal computer with a specified configuration. Each CLIN also identifies a specific type computer and references specific paragraphs in Section C (DESCRIPTION/SPEC./WORK STATEMENT) of the solicitation. These paragraphs in Section C provide more detailed descriptions of the configured system being sought, namely, the specific type of computer and the various hardware and software components which are to be integrated with it. 4. Of the ten CLINs listed in the schedule in Section B, four have no sub-CLINS. The sub-CLINs listed for the remaining six are all set out in more or less the same fashion. The first sub-CLIN in all six cases is similar to the CLINs which have no sub-CLINs. It references a paragraph in Section C which identifies the specific computer and the various hardware and software components which are to be integrated with it. Each of the six CLINs having sub-CLINs also contains a sub-CLIN which references paragraphs in Section C which describe a "bundled BUS mouse with Windows version 3.1 and documentation." Four of the six CLINs with sub-CLINs also contain a third sub-CLIN which references paragraphs in Section C which identify "Bernoulli [disc] drive with kit." These disc drives are to be installed in the computer identified in the first sub-CLIN for each respective CLIN.1 Protest File, Exhibit 4 (Sections B, C). ____________________ 1 We arrive at this conclusion based on the wording of subparagraph C.3.2. which states that the Bernoulli drive is to be "installed in C.3.1 above." (C.3.1 identifies and describes the computer called for in the CLIN to which all C.3 subparagraphs refer.) The descriptions of the Bernoulli drive when called for elsewhere in Section C with regard to other CLINs (continued...) 5. A representative portion of Section B provides as follows: ITEM DESCRIPTION QUANTITY U/M U/P AMOUNT 0001 486 Personal Computer 9 EA . . in accordance with (IAW) C.1 0002 386 33MHZ personal 23 EA . . computer IAW C.2 0003 486 33MHZ personal computer IAW C.3 consisting of the following: 0003AA 486 33MHZ personal 38 EA . . computer IAW C.3.1 0003AB 44 MB internal 38 EA . . Bernoulli with kit IAW C.3.2 0003AC Bundled BUS Mouse IAW 38 EA . . C.3.3 Protest File, Exhibit 4 at B-1. 6. The parties have stipulated that the 44 MB internal Bernoulli with kit and the bundled BUS mouse, both of which are described in Section C, are not manufactured by SDB concerns. Joint Stipulation of Facts. 7. All ten of the configured systems listed in Section B and described in detail in Section C contain a requirement for the operating system "Windows" and all CLINs, with the exception of 0001, contain a requirement for the mouse normally used in conjunction with Windows. Protest File, Exhibit 4 (Sections B, C). The only difference in this regard between CLINs which list sub-CLINs and those which do not is that for the CLINS which list sub-CLINs, this particular requirement is listed as a sub-CLIN. Id. ____________________ 1(...continued) simply refer the reader back to subparagraph C.3.2 for a detailed description of the requirement. We therefore conclude that the requirement of installation into the basic computer for the CLIN in question applies, mutatis mutandis, in each case where the ________________ Bernoulli drive is listed as a sub-CLIN. 8. Paragraph C.10 of Section C provides that "[a]ll systems shall be fully configured at the contractor's facility and delivered `Ready to Use.'" Protest File, Exhibit 4, Amendment 1 at C-8. 9. In a statement provided for the record for this case, the contracting officer has explained that the purpose of listing the sub-CLINs for some items in the solicitation was "to facilitate fund commitment and obligation in the Army Materiel Command Installation Supply System." The contracting officer goes on to state: It is apparent from the face of the bid schedule and section C that no separate components were being procured. Paragraph C.10 specifically states that all systems will be fully configured at the contractor's facility and delivered ready for use by the purchaser. Protest File, Exhibit 8. 10. The solicitation incorporates by reference clause 52.214-22 of the Federal Acquisition Regulation (FAR) entitled "EVALUATION OF BIDS FOR MULTIPLE AWARDS (MAR 1990)." Protest File, Exhibit 4 (Section M). Under this clause, individual awards can be made for the items or combinations of items that result in the lowest aggregate cost to the Government, including the assumed administrative costs. Discussion Protester contends that the contracting officer, in issuing the solicitation for this procurement, has violated the Defense Federal Acquisition Regulation Supplement (DFARS), as well as the FAR. Specifically, protester refers to 48 CFR 219.502-2-70 (1991) (DFARS 219.502-2-70) which describes the conditions under which a contracting officer is expected to set aside an acquisition for SDBs. The two conditions of particular concern to protester in this case are that (1) supplies provided by regular SDB dealers should be the supplies of SDBs and (2) the SDBs be able to comply with the limitations on subcontracting set out in 48 CFR 52.219-14 (1991) (FAR 52.219-14.2). Protester points to the presence of separate item numbers, descriptions, and prices for the BUS mouse and the Bernoulli disc drives in the Section B price schedule. Since these items are not manufactured by SDB concerns, Finding 6, protester argues ____________________ 2 This provision requires that upon submission of an offer and execution of a contract, offeror/contractor agrees that in performance of the contract, it shall perform work for at least 50% of the cost of manufacturing the supplies, not including the cost of materials. that this procurement does not meet with the condition that offerors provide the supplies of SDBs (DFARS 212.502-2-70) or the condition that offerors comply with the FAR limitation on subcontracting clause (FAR 52.219-14). Respondent's reply to protester's objection is that the procurement is not for a BUS mouse or Bernoulli drive, as such, but rather for various configured computer systems. Respondent argues that the BUS mouse or Bernoulli drive -- whether they be the subjects of specific sub-CLINs or incorporated into the stated requirements of a CLIN representing a given configured system but without sub-CLINs -- are in every instance intended for integration into the configured system being sought and not intended for individual or separate purchase. Protester has not convinced us that in this solicitation the sub-CLINs covering either the BUS mouse or the Bernoulli drive are intended for separate purchase apart from the computer which is the principal component of each CLIN in which these sub-CLINs appear. Indeed, protester's sole argument appears to be that these items are, in the final analysis, separate line items. On their face, these sub-CLINs are listed as subline items and not line items. In the example given in Finding 5, the basic computer, the BUS mouse, and the Bernoulli drive are identified with the customary alpha-numeric system described in DFARS 205.7104 for the identification of subline items.3 The same method is used for identifying these sub-CLINs as they appear elsewhere in Section B. The BUS mouse for CLIN 0004 is designated as 0004AB. The Bernoulli drive for CLIN 0005 is designated as 0005AB and the BUS mouse for that CLIN is designated 0005AC, etc. Neither do we have any reason to believe that the labeling of these sub-CLINs is inappropriate given the solicitation's actual purpose. Evidence in the record convinces us that respondent's intent here is, in fact, to purchase configured computer systems. This was the purpose of the procurement as announced in the CBD notice. Finding 1. The ten CLINs listed in Section B and described in Section C are configured systems. Findings 3, 4. To the extent that the Bernoulli drives are listed as sub-CLINs, they are to be integrated into the basic ____________________ 3 The record is less than clear as to why respondent considered it necessary to break out subline items for the BUS mouse and the Bernoulli drive for some CLINS but not all. The contracting officer explains that this was done to facilitate fund commitment and obligation. Finding 9. We recognize that under DFARS 204.7104, separately identified subline items can be used to "facilitate payment, delivery tracking, contract funds accounting, or other management purposes." It would appear, therefore, that there is at least no regulatory objection to this use of subline items. computer listed for that same CLIN. Finding 4. Similarly, with the exception of CLIN 0001, the mouse appears to be part of the overall configuration sought for each CLIN whether it be listed separately as a sub-CLIN or not. Finding 7. Furthermore, the contracting officer has confirmed that the mouse and Bernoulli drives were not intended for separate purchase. Finding 9. In addition, the multiple award provision in the solicitation, while permitting the separate award of "items," does not extend to sub- items such as the mouse or the Bernoulli drive. Finding 10. Finally, the provision in Section C requiring that all systems shall be fully configured at the contractor's facility and delivered "Ready to Use" only serves to confirm that respondent seeks to purchase configured systems and not individual components. See Finding 8. Protester's allegation rests on the assumption that the solicitation contains line item entries for the BUS mouse and the Bernoulli drives and that they could, therefore, be purchased independently from the configurations in which they were to be included. We find this basic assumption unjustified. The items in question are clearly identified in the solicitation not as independent CLINs but as sub-CLINs. Furthermore, protester has shown us nothing that convinces us that this was inaccurate or inappropriate in view of the Government's overall purposes in this procurement. Finally, inasmuch as the solicitation calls for configured systems, we see no problem posed by the FAR limitation on subcontracting clause provided offerors, themselves, produce the system configurations sought under each CLIN in the solicitation. See 13 CFR 121.906(b) (1991). Decision This protest is DENIED. The Board's order of September 14 suspending respondent's delegation of procurement authority as applicable to the procurement under protest expires by its very terms. ______________________ EDWIN B. NEILL Board Judge We concur: _______________________ _______________________ ROBERT W. PARKER JOSEPH A. VERGILIO Board Judge Board Judge