THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON DECEMBER 22, 1992 MOTIONS FOR SUMMARY RELIEF GRANTED: December 9, 1992 GSBCA 12082-P TECHNOLOGY, MANAGEMENT & ANALYSIS CORPORATION, Protester, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent, and ORACLE COMPLEX SYSTEMS CORPORATION, Intervenor. William W. Goodrich, Jr., and Thomas W.A. Barham of Arent Fox Kintner Plotkin & Kahn, Vienna, VA, and Jacob B. Pompan and Daniel A. Perkowski of Pompan, Ruffner & Bass, Alexandria, VA, counsel for Protester. Avital G. Zemel, Office of the General Counsel, Environmental Protection Agency, Washington, DC, and L. Carol Roberson, Office of General Counsel, Environmental Protection Agency, Research Triangle Park, NC, counsel for Respondent. Richard O. Duvall, Richard L. Moorhouse, and Michael H. Ditton of Dunnells, Duvall & Porter, Washington, DC, counsel for Intervenor. Before Board Judges NEILL, HYATT, and VERGILIO. NEILL, Board Judge. On October 8, 1992, this protest was filed by Technology, Management & Analysis Corporation (TMA). The procurement in question involves a contract for the supply and support of relational database management system (RDBMS) software and related services under request for proposals (RFP) number W002073-A3 issued by the U.S. Environmental Protection Agency (EPA). Respondent awarded the contract to Oracle Complex Systems Corporation (OCSC), which has intervened, as a matter of right, in this protest. Protester's initial complaint set forth four bases of protest. On November 3, on motion from protester, two of the four counts were dismissed with prejudice. Shortly thereafter, the Board granted protester's motion to amend its complaint to include two additional counts. The first alleges negotiations with OCSC after submission of best and final offers (BAFOs). The second count alleges that the offer of OCSC was unbalanced. Both respondent and intervenor have moved for summary relief with regard to the allegation of negotiations with OCSC after BAFOs. Protester opposes the motions and has brought its own cross-motion for summary relief on this same issue. For the reasons set out below, we grant the two motions for summary relief and deny protester's cross-motion. Background The material facts on which the parties are in agreement and on which we base this decision are as follows: The Solicitation 1. The RFP involved in this protest was issued by the EPA on June 10, 1991. Section M sets forth a "best value" selection scheme, with technical factors more important than cost. Protest File, Exhibit 5 at 116, 261-62. 2. Section M also provided for a scored technical evaluation of the acceptability of the proposed products and services and the offeror's capabilities according to the following criteria: I. Additional Technical Features 254 points II. Corporate Mgmt. Plan, Experience & Commitment 146 points III. Vendor Support 200 points IV. Commitment to Technology Enhancement 100 points Protest File, Exhibit 5 at 263. 3. Criterion II, which dealt with the offeror's corporate management plan, experience, and commitment, is described in Section M as follows: II DEMONSTRATED CORPORATE MANAGEMENT PLANS, CORPORATE EXPERIENCE AND CORPORATE COMMITMENT (146 points) This criterion will evaluate the offeror's corporate management approach, corpor[ate] experience, and corporate commitment, and understanding of the requirements specified in the RFP. The offeror's corporate management plans shall be evaluated. This includes techniques for meeting management objectives and staffing requirements work flow control, administrative operations which include documentation and procurement management reliability, and quality assurance. The offeror's management of and approach to meeting project requirements and objectives, including organizational structure and planning for interfaces with Government, shall be evaluated. The offeror's procedures for problem review, escalation, and resolution shall be considered. The offeror's plans for delivering products, services, and support to EPA's multiple, geographically dispersed locations shall be evaluated. Corporate experience of the offeror will be evaluated based on experience with the installation and support of the RDBMS software in similar environments, and experience in providing quality technical support by accurately and quickly diagnosing and solving software problems. The provided corporate references will be evaluated as indicators of corporate experience. Corporate capability and commitment will be evaluated in terms of the commitment and capability of the offeror to maintain quality personnel throughout the life of the contract, the offeror's established internal quality assurance programs and other programs which ensure the quality support service; evidence of corporate health and stability; and customer references. The offeror's corporate commitment shall also be evaluated by consideration of proposed plans for ensuring high quality services in all functional areas, responsiveness to fluctuating EPA workloads and changing EPA requirements, and the proposed corporate involvement and support in the contracts. Protest File, Exhibit 5 at 263-64. 4. Section L of the solicitation contained instructions, conditions, and notices to offerors. Included in this section was guidance on the preparation of an offeror's technical proposal and business proposal (of which the offeror's price proposal was to be a part). Protest File, Exhibit 5 at 248-60. 5. The guidance in Section L dealing with criterion II of the technical proposal directs the offeror to describe in this section of its proposal its corporate management plan for and approach to the contract. Offerors are told to describe experience with similar contracts, to provide three corporate references for similar contracts, to discuss their management chain of command, corporate structure, and various other items relating to "corporate management plans, corporate experience and corporate commitment." No express reference is made in this guidance, however, to financial information. Protest File, Exhibit 5 at 250-51. 6. The chairman of the technical evaluation panel (TEP), who actually wrote the language for criterion II, and the source selection official for this procurement both have testified in depositions that information regarding OCSC's financial condition could be relevant to the subfactor of "corporate health and stability" which is mentioned in criterion II. Protester's Cross-Motion for Summary Relief, Exhibits A at 103, B at 11-14. 7. The guidance in Section L dealing with the preparation of the business proposal expressly states: The information submitted in the offeror's business proposal in response to the Sections 1 through 7 below will be used for determining whether prospective contractors are responsible in accordance with FAR Part 9 [Federal Acquisition Regulation, 48 CFR 9 (1992)]. This information will not be used in the technical evaluation of proposals, as only the information submitted in the offeror's technical proposal will be evaluated against the technical evaluation criteria specified in Section M. Protest File, Exhibit 5 at 255. Section 6 of the above-mentioned "Sections 1 through 7" provides: SECTION 6 - Financial Capability The offeror shall provide a copy of their most recent annual financial statements. Also, a copy of their most recent quarterly (or other partial year) financial statement should be included. Offerors should provide all information deemed relevant to their proposal and in demonstrating their ability to perform the requirement from a financial point of view if awarded the subject contract. Similar information is requested on all non-Offeror items included with your offer. Id. at 256. Evaluation of Technical Proposals 8. In the evaluation of technical proposals, OCSC received the maximum score of 146 points (as did TMA) for criterion II. This criterion, as noted, related to demonstrated corporate management plans, corporate experience, and corporate commitment. That score did not change after receipt of OCSC's response to the contracting officer's letter of September 21, 1992. Protest File, Exhibit 92 at 4958-59. Analysis of Financial Information Submitted With OCSC's Business Proposal 9. OCSC's initial business proposal, dated August 9, 1991, provided only financial statements of its parent company, Oracle Corporation. OCSC was, therefore, requested to submit its own financial statements. The contracting officer writes that she advised OCSC that its failure to provide the necessary financial statement could affect the determination of responsibility should OCSC otherwise be determined eligible for award. Protest File, Exhibit 89 at 4940. In its first BAFO submission of April 21, 1992, OCSC supplied its financial statements. Id. This information was reviewed by an agency auditor who concluded, in a report dated May 21, 1992, that OCSC's negative net worth, stockholders' equity deficits, poor liquidity ratios, and consistent net loses provided strong evidence of the offeror's financial problems. In the opinion of the auditor, unless OCSC provided the contracting officer with an achievable plan to combat these financial shortcomings, OCSC's ability to respond to the procurement would be very questionable. Id., Exhibit 56 at 3959. The auditor recommended, therefore, that the contracting officer seek from OCSC: (1) a detailed plan of corrective action to address the financial shortcomings, (2) detailed operating budgets covering the procurement's entire period of performance, (3) cash flow projections and remedies to address the current monetary shortages, and (4) a letter of guarantee from the parent protecting EPA from OCSC's potential inability to provide the contracted services due to its current financial crisis. Id. at 3958. 10. The contracting officer writes that during a second round of discussions with OCSC, she requested from OCSC all of the information which the auditor recommended she obtain. The only exception appears to be the recommendation that she obtain a letter of guarantee from the parent company. Protest File, Exhibit 89 at 4941. The additional information provided by OCSC in its final BAFO of August 31, 1992, was reviewed by the same EPA auditor. In a supplemental report, dated September 18, 1992, the auditor concluded that, as a result of his initial report, OCSC had taken notable steps to improve its financial condition. He concluded, however, that OCSC's current financial survival continued to hinge on the support it receives from its parent company. The auditor recommended again, therefore, that the contracting officer consider requesting a letter of guarantee from Oracle Corporation to address OCSC's potential inability to perform should it be the successful offeror. Id., Exhibit 83 at 4915. The Contracting Officer's Letter of September 21 to OCSC 11. By letter dated September 21, 1992, the contracting officer wrote OCSC explaining that EPA was evaluating the responsibility of offerors "pursuant to FAR Part 9, Contractor Qualifications," and was seeking data from OCSC to determine whether OCSC has adequate financial resources to perform if selected for award. Specifically, the contracting officer requested: Please provide the following information . . . to the undersigned by 1:00 p.m. on September 24, 1992. 1. A letter of guarantee for Oracle Corporation to address the extent of its commitment to support OCSC financially. 2. A copy of any lines of credit available to OCSC or guarantees of credit to OCSC from a financial institution or through Oracle Corporation. Protest File, Exhibit 84. The same letter expressly states that "[t]his request is only for additional financial information and shall not be construed as the opening of discussion with your company." The letter also points out that "[n]o change to your BAFO dated August 31, 1992 shall be made or considered." Id. 12. OCSC responded by letter dated September 24, 1992. Enclosed with OCSC's letter was a letter of the same date to OCSC from the Executive Vice President of Oracle Federal Division. In this enclosed letter, Oracle Federal Division declines to provide a formal guarantee of the obligations of OCSC to the EPA but observes that "in accordance with Oracle's policies, Oracle assures you of its intention that OCSC be at all times in a position to meet its obligations to the EPA under the Contract." Protest File, Exhibit 87. 13. In a declaration given under penalty of perjury, the contracting officer refers to the two letters described immediately above and to a third letter. This third letter is signed by the corporate treasurer of Oracle Corporation and explains to OCSC: "Without guaranteeing the obligations of OCSC, Oracle's current policy is to fund normal business operations of all subsidiaries." Protest File, Exhibit 88. The contracting officer also refers in her declaration to additional financial information regarding OCSC which she obtained through two brief telephone conversations with OCSC in September 1992. Respondent's Request for Summary Relief, Appendix I. 14. Both the contracting officer and the chairman of the TEP for this procurement have stated in declarations given under penalty of perjury that the information obtained from Oracle in response to the contracting officer's letter of September 21, 1992, to OCSC was never provided to the TEP. They likewise confirm in their declarations that no technical scores were ever re-examined, changed, or affected in any way in light of the information obtained from OCSC. Respondent's Request for Summary Relief, Appendices I, II. 15. On September 29, 1992, EPA awarded the protested contract to OCSC. Protest File, Exhibit 93. Discussion In presenting their argument for and against the two motions for summary relief currently before us, all parties rely heavily upon the definition of "discussion" contained in FAR Part 15. The definition states: "Discussion," as used in this subpart, means any oral or written communication between the Government and an offeror (other than communications conducted for the purpose of minor clarification), whether or not initiated by the Government, that (a) involves information essential for determining the acceptability of a proposal, or (b) provides the offeror an opportunity to revise or modify its proposal. FAR 15.601. Protester's Cross-Motion for Summary Relief Protester contends that the communications regarding financial condition between the contracting officer and OCSC following final BAFOs and prior to contract award constituted discussions as that term is used in the FAR. This in turn, argues protester, violated FAR 15.611(c) which states: After receipt of best and final offers, the contracting officer should not reopen discussions unless it is clearly in the Government's best interest to do so. . . . If discussions are reopened, the contracting officer shall issue an additional request for best and final offers to all offerors still within the competitive range. See Protester's Cross-Motion for Summary Relief at 14. In support of this argument, protester contends that discussions actually occurred (a) because the Government through these communications with OCSC regarding the offeror's financial condition obtained information from OCSC that was "essential for determining the acceptability of a proposal," and (b) because the contracting officer's letter of September 21, 1992, gave OCSC the opportunity to change its proposal by providing a guarantee from a major subcontractor (the parent company, Oracle Corporation). Id. at 10. We are not persuaded by protester's argument. Given the facts here, we do not consider that the information sought by the contracting officer in her letter of September 21 was essential for determining the acceptability of the OCSC proposal. We address first the question of whether the information sought by the contracting officer was essential for determining the acceptability of the OCSC proposal. Clearly, it was not. Prior to the dispatch of the contracting officer's letter, OCSC's technical proposal had been evaluated by respondent. In the one area where protester argues that financial condition was a relevant consideration, namely criterion II, "Corporate management plan, experience and commitment,"[foot #] 1 OCSC had already obtained the maximum score. There was no question as to the acceptability of the OCSC proposal so far as this evaluation criterion was concerned. Fact 8. The contracting officer's letter of September 21 to OCSC was prompted by a continuing problem with information furnished by OCSC as part of its business proposal. Specifically, the problem was with information provided in response to a requirement to include in the business proposal information regarding the financial condition of the offeror. Fact 7. The solicitation ----------- FOOTNOTE BEGINS --------- [foot #] 1 Protester argues that one of the many subfactors of criterion II, namely "corporate health and stability," involves considerations relevant to an offeror's financial condition. Protester claims to be supported in this regard by deposition testimony of the TEP chairman and the source selection official. See Fact 6. We attribute little weight to this ___ testimony. At best, it strikes us as somewhat general, if not speculative. Much more impressive are: (i) the general context established by criterion II when read as a whole, (ii) the guidance provided in Section L regarding the intended thrust of criterion II, and (iii) the provision, also contained in Section L, that financial information provided in the business proposal would not be used in the technical evaluation. See Facts 3, 5, ___ 7. These provisions suggest to us that, at least under the terms of this RFP, considerations of financial condition, as prompted by Section L, should not be seen as overlapping with the technical subfactor of "corporate health and stability." For purposes of ruling here on protester's cross-motion for summary relief, however, we are prepared to concede the point. ----------- FOOTNOTE ENDS ----------- expressly provided that this information was to be used for purposes of determining whether a prospective contractor would be responsible in accordance with FAR Part 9. Offerors were advised that this information would not be used in the technical evaluation of proposals. Id. The contracting officer's continued concern with the particular information provided by OCSC in its revised BAFO regarding its financial condition was, therefore, limited solely to the issue of contractor responsibility, not proposal acceptability. See Facts 9-11. The uncontroverted facts confirm, therefore, that the contracting officer's letter of September 21 stemmed from her continuing concern over the financial condition of OCSC as it might affect OCSC's responsibility. The letter itself states that the information being sought is for purposes of determining responsibility and that this inquiry should not be interpreted as an opening of discussions or an opportunity to change OCSC's BAFO. Fact 11. Protester cites a decision of the United States Court of Appeals for the District of Columbia Circuit for the proposition that information received from an offeror, which relates to a subject area common to both the evaluation of a proposal and the determination of a prospective contractor's responsibility, must be factored into both the evaluation and the responsibility determination. See Delta Data Systems Corp. v. Webster, 744 F.2d 197 (D.C. Cir. 1984). In this particular case, protester argues that the information received by the contracting officer in response to her letter of September 21 touched not only on her responsibility determination, but also on the application of the technical subfactor of "corporate health and stability." Accordingly, protester contends that, under Delta Data, the technical evaluation should have been amended regardless of any protestations on the part of the contracting officer that she was concerned only with contractor responsibility and would not permit any change in the BAFO of OCSC. We consider protester's reliance on Delta Data misplaced in this instance. As noted, we are prepared to accept, for purposes of ruling on protester's cross-motion, that the information provided in answer to the letter of September 21 was "double-edged." That is to say, it touched on a matter which arguably was of import not only to the responsibility of OCSC but to the acceptability of its technical proposal. See supra note 1. What protester overlooks, however, in applying Delta Data to the facts in this case is that the information in question in the two cases is radically different. In Delta Data, the information provided by the offeror on its financial condition was of uncertain import and gave rise to serious concern on the part of the procuring agency. From it, the agency drew certain negative inferences which led to the reduction of the offeror's technical score and, eventually, resulted in award being made to another. The court of appeals concluded that it was an abuse of discretion on the part of the agency to rely on this information without affording the offeror an opportunity first to refute the negative inferences. The information provided by OCSC in reply to the contracting officer's letter of September 21 is of an entirely different character. While Oracle Corporation declined to provide a formal guarantee of OCSC's performance of any contract its subsidiary might enter with respondent, it nevertheless did provide assurances which the contracting officer considered sufficient to justify an affirmative responsibility determination. She drew no negative inferences from the information provided and obviously would not have been prompted to make a downward adjustment of OCSC's technical score as occurred in Delta Data. We do not, therefore, read Delta Data as requiring adjustment of technical evaluations when the "double-edged" information provided is of a positive rather than negative character. The court itself confirms this when it states: An agency is not required to go back to the offeror every time a new piece of information comes to its attention. When, however, the new information is of uncertain import, is likely to determine the award, and is of such a nature that the offeror is likely to be able to make a significant contribution to its interpretation, it is an abuse of discretion for the agency to act on the basis of the information without giving the offeror an opportunity to discuss it. Delta Data, 744 F.2d at 203. The information initially provided in OCSC's BAFO regarding its financial condition was clearly of uncertain import and led to discussions and subsequent submissions. Facts 9-10. The same cannot be said, however, of the information provided in response to the contracting officer's inquiry of September 21. That information ultimately brought to an end the earlier inquiries regarding the financial condition of OCSC. OCSC's answers provided the contracting officer with the assurances she required for purposes of making a responsibility determination. We consider it beyond question, therefore, that the information in no way pertained to the acceptability of OCSC's proposal but merely to the responsibility of OCSC as a potential contractor. Having concluded that the contracting officer's inquiry of September 21 was restricted in fact to the issue of the responsibility of OCSC, we readily reject protester's second contention that this letter afforded OCSC the opportunity to change its BAFO. This clearly did not occur. Furthermore, given the positive nature of the information provided, it cannot be alleged on the basis of Delta Data that the opportunity for such a change should have been provided. Protester's cross-motion for summary relief is, therefore, denied. Respondent's and Intervenor's Motion for Summary Relief Both respondent and intervenor contend that the uncontested facts support the conclusion that discussion, as defined in FAR 15.601, did not occur subsequent to submission of BAFOs when the contracting officer sought information regarding OCSC's financial condition through her letter of September 21. Respondent's Reply to Protester's Opposition to Motion for Summary Relief as to Count V at 5-6. Intervenor's Reply to Protester's Opposition to Motion for Summary Relief as to Count V at 10. We agree. The uncontroverted facts confirm that there was no question as to the adequacy of the OCSC proposal insofar as technical criterion II was concerned. Fact 8. They further show that the concern of the contracting officer which led to the dispatch of her letter of September 21 did not stem from any perceived deficiency in the technical proposal of OCSC. Rather, the contracting officer's concern arose in connection with representations made in OCSC's business proposal regarding an item specifically identified in the solicitation as relating to the responsibility of prospective contractors. Facts 7, 9, 10. Furthermore, in accordance with an express provision in Section L of the solicitation, information provided in response to this item in the business proposal was not to be used in the technical evaluation of proposals. Fact 7. As to the contracting officer's letter of September 21, it speaks for itself. It sought information for purposes of making a responsibility determination and advised that OCSC's BAFO could not be changed. Fact 11. The information provided by OCSC in response to the contracting officer's request was not given to the technical evaluation panel and no change was ever made in the technical score of OCSC in light of its submissions. Fact 14. On the basis of the uncontroverted facts, we find that it is clearly established that communications between the EPA and OCSC pursuant to the contracting officer's letter of September 21 were not to secure information essential for determining the acceptability of OCSC's proposal but to secure information required for determining OCSC's responsibility. It is well established that such communications are permissible after submission of BAFOs and do not constitute improper discussions. E.g., Sea-Land Service, B-219665, et al., 85-2 CPD 677 (Dec. 17, 1985) (submission, after best and final offers, of additional evidence of an offeror's financial resources does not constitute improper discussions or require an agency to request revised proposals from all offerors when the information does not affect the acceptability of the proposal but relates to the offeror's responsibility). Accordingly, we grant the requests for summary relief and deny protester's count V that the communications in question constituted improper post-BAFO discussions. Decision Protester's cross-motion for summary relief is DENIED. Respondent's and intervenor's motion for summary relief are GRANTED. The Board DENIES count V of the protest. ____________________ EDWIN B. NEILL Board Judge We concur: _______________________ CATHERINE B. HYATT Board Judge _______________________ JOSEPH A. VERGILIO Board Judge