___________________________________________________________ DISMISSED FOR LACK OF AN INTERESTED PARTY: June 30, 1993 ___________________________________________________________ GSBCA 12411-P COMTEL INDUSTRIES, INC., Protester, v. DEPARTMENT OF JUSTICE, Respondent, and EXECUTONE INFORMATION SYSTEMS, INC., Intervenor. Larry G. McCarty, Vice President and General Manager of ComTel Industries, Inc., Homewood, AL, appearing for Protester. James Roby and Harry Gastley, Office of General Counsel, Justice Management Division, Department of Justice, Washington, DC, counsel for Respondent. Richard A. Alderson, Director of Federal Marketing of EXECUTONE Information Systems, Inc., Fairfax, VA, appearing for Intervenor. Before Board Judges BORWICK, NEILL, and VERGILIO. BORWICK, Board Judge. On May 3, 1993, protester, ComTel Industries, Inc. (ComTel), protested the placing of two purchase orders with EXECUTONE Information Systems, Inc. (EXECUTONE), for a telephone system by respondent, Department of Justice (DOJ), to satisfy the requirements of the United States Attorney's Office, Miami, Florida. The first purchase order of $291,963.42 was for a supply of 584 telephone sets and installation of 344 of those sets with riser cable. DOJ issued the purchase order through EXECUTONE's GSA nonmandatory ADP schedule contract. At the same time, DOJ issued a second purchase order on an "open market" basis for installation of the remaining 240 phones to be connected to existing riser cable. That purchase order was issued for $24,754.60. The maximum order limitation (MOL) for EXECUTONE's GSA nonmandatory ADP schedule contract was $300,000. ComTel responded to a synopsis that DOJ had placed in the Commerce Business Daily (CBD) announcing DOJ's intent to place an order with EXECUTONE under the schedule contract unless a more advantageous comparable source responded. In its response, ComTel offered supplies and services under its own GSA Purchase of Telephone and Services (POTS) contract. Upon learning that DOJ had issued two purchase orders to EXECUTONE--the larger just below the maximum order limitation of EXECUTONE's GSA nonmandatory ADP schedule contract and the smaller as an "open market" order--ComTel filed an agency protest accusing DOJ of illegally splitting requirements to avoid the maximum order limitation of the schedule contract. ComTel sought cancellation of the purchase orders and requested that DOJ place an order for the system under ComTel's POTS contract. After the denial of the agency protest, ComTel filed a protest at this Board restating its allegations. DOJ has filed a motion to dismiss, arguing that ComTel lacks a direct economic interest in the procurement because its offering under the POTS contract did not meet all the requirements for DOJ's telephone system as stated in the CBD synopsis. As the parties agreed to submit the case on the record pursuant to Rule 11, we allowed ComTel to reply to DOJ's motion as part of its record submission. We conclude that ComTel lacks a direct economic interest in this procurement as its POTS offering did not meet DOJ's stated requirements. Therefore, we dismiss the protest. Findings of Fact On March 3, 1993, DOJ issued a synopsis in the CBD announcing its intended purchase of a telephone system from EXECUTONE's telecommunications schedule contract, to service the requirements of the United States Attorney's Office in Miami, Florida. Protest File, Exhibit 3. The synopsis provided in pertinent part: The Miami [Florida] U.S. Attorney's Office intends to purchase a fully digital integrated voice/data hybrid key telephone system to include all on-premises equipment . . . from EXECUTONE Information Systems Inc. under GSA Contract GS00K91AGS0566-PS02. The system must be equipped with 8 integrated CRT based operator consoles. The operator consoles must provide a directory by name and extension along with automatic transfer capability. The console must also indicate extension status between available OUT, BUSY, DND, or FWD to voice mail. . . . The vendor will be responsible for riser cable between the 7 floors occupied. The vendor will be responsible for tone, test and installing station cabling from the station termination appearances for each station location through customer provided modular furniture. No other premises cabling is required. No contract award will be made on the basis of any response to the notice since the synopsis of intent to place an order against a GSA schedule is not considered a request for offers/proposal. All responsible sources may submit written responses which identify their interest and technical capability to respond to the requirements. Written responses should include . . . [a] full technical proposal showing ability to meet all requirements. . . . If there is no affirmative response to the effect that a comparable source is available and that it is more advantageous to the Government than acquiring from GSA schedule 58, an order will be paced with EXECUTONE Information Systems Inc. under the terms and conditions of their GSA contract. The synopsis described a system initially wired for 218 twenty- nine key digital display telephones, with wiring accommodating 253 twenty-eight key digital speaker phones, 84 seventeen key digital telephones, and 21 six key digital wall mounted telephones. Protest File, Exhibit 3. EXECUTONE's schedule contract provides for delivery and installation of telecommunications equipment. The contract defines installation as including one hundred fifty feet of standard four pair station cable for each installed station and station termination for each installed station. Protest File, Exhibit 17, at C-9. The maximum order limitation is $300,000. Id. at A-2, at 12.a. On March 17, 1993, ComTel responded to the CBD synopsis stating that "ComTel is the GSA POTS contractor for Florida and all equipment and labor costs will be in accordance with negotiated GSA POTS Contract . . . ." Protest File, Exhibit 4. Attached to the letter was a "site/survey quote" for supply and installation of 255 speaker phones and 255 six button sets for $291,963.42. Protest File, Exhibit 4. ComTel also complained that "[w]ith respect to the U.S. Department of Justice's desire to sole source this equipment with EXECUTONE Information Systems Inc., it should be noted that the equipment and labor requirements, as outlined in the [synopsis], would exceed the $300,000 sole source limit specified in the GSA Schedule 58 guidelines." Id. ComTel's submission did not offer the CRT consoles on the eight attendant stations specified in the synopsis; rather, ComTel offered conventional attendant consoles. Protest File, Exhibit 4. By telephone call of March 22, 1993, protester's Vice President informed the COTR that protester could install the standard attendant console and upgrade to directory based console at a later date. The COTR never agreed to such a solution. Affidavit of the Contracting Officer's Technical Representative dated June 11, 1993 (Press Affidavit), 7. Later that day, protester's representative informed the COTR that a directory- based console would be available in April of 1993. ComTel never submitted pricing for the directory-based console before or after March 24, the date for responding to the synopsis. Press Affidavit, 8. In fact, the COTR later learned from the manufacturer that the directory-based console referenced by ComTel is in beta test and would only be commercially available in September of 1993, at the earliest. Press Affidavit, 9. On March 17, EXECUTONE offered telephone sets in the quantities specified in the synopsis. The offer included installation of 344 phones including riser cable to the D-Mark. The unit price (per phone) for the installation was $172.50. EXECUTONE included a second "open market" order for installation of 240 phones for locations "not requiring riser cable." The unit price for installation without riser cable was $82.00 The open market order was for $24,754.60. Protest File, Exhibit 4. The Contracting Officer's Technical Representative (COTR) determined that ComTel's POTS offering did not meet the synopsis requirements for the CRT console. The COTR determined that "the EXECUTONE System should be immediately purchased to insure that installation of the telephone system does not delay the scheduled move." Protest File, Exhibit 5. As part of DOJ's record submission the COTR states in an affidavit that the move was scheduled for late April of 1993. Press Affidavit, 2. The COTR notes, as part of the record submission, that ComTel did not offer the specified number of phone sets. Press Affidavit, 2. ComTel maintains that the requirement for the CRT console was waived in a telephone conversation but the COTR denies the waiver. Press Affidavit, 6. We find as fact that the requirement was not waived. On April 5, 1993, ComTel filed an agency protest, stating its understanding that DOJ intended to place two orders, one for less than $300,000 against EXECUTONE's schedule contract and an open market order for less than $25,000. ComTel maintained that since the total of the two orders was more than $300,000, DOJ had violated the maximum order limitation of ComTel's schedule contract. ComTel sought DOJ's cancellation of any purchase order to EXECUTONE and an order from ComTel's POTS contract. Protest File, Exhibit 7. On April 19, DOJ denied the agency protest, stating, with respect to the open market purchase, that, "Because all necessary cabling was supplied through the GSA schedule, the remaining 240 installations could be accomplished without charging for cabling and accordingly was proposed as an open market purchase for under $25,00." Protest File, Exhibit 12. On May 3, ComTel filed a protest at this Board, referenced its agency protest and DOJ's denial, and alleged that DOJ violated the $300,000 purchase order limit of EXECUTONE's schedule contract. ComTel maintained that "allowing agencies to manipulate the guidelines . . . would be very harmful to the viability of the [POTS] contract program." Protest Letter. On May 14, ComTel amended its protest to seek recovery of $249,501.12 for "lost profits," presumably the profits it would have recovered under its POTS contract. Protest Amendment. Discussion Respondent filed a motion to dismiss, arguing that ComTel is not an interested party because it failed to meet the requirements of the CBD synopsis, and thus lacks the requisite "direct economic interest" in the procurement. 40 U.S.C. 759(f)(9)(B) (1988).[foot #] 1 We agree. In its agency protest and before this Board, ComTel sought cancellation of the purchase orders to EXECUTONE and subsequent award by DOJ under the POTS contract. However, the equipment ComTel was prepared to offer under the POTS contract did not meet DOJ's requirements as stated in the synopsis. In late March, the ComTel Vice President did discuss with the COTR the possibility of offering directory based consoles under its POTS submission, but never submitted pricing for those consoles. Furthermore, the availability of the consoles was unclear. ComTel has not demonstrated it was in a position to satisfy the stated requirements and thus lacked the requisite direct economic interest. As ComTel has not demonstrated that it could satisfy the requirement for the equipment needed by the Government, it is not prejudiced by alleged splitting of part of the installation services necessary to install that equipment. ----------- FOOTNOTE BEGINS --------- [foot #] 1 DOJ also argues that the protest is untimely. During a prehearing conference on this protest, a ComTel official stated that upon reviewing the CBD synopsis, using EXECUTONE's price list, he determined the requirement could not be performed for $300,000 or less. DOJ argues that the protest should have been filed no later than ten calendar days after that determination. DOJ misfocuses the protest, which concerns an alleged splitting of requirements by DOJ, not the propriety of the CBD synopsis. DOJ issued the purchase orders to EXECUTONE on March 30. ComTel filed a timely agency protest on April 9, and timely filed here on May 3 after DOJ's denial of that protest on April 19. Rule 5(b)(3)(iii). ComTel did add another ground of protest in its record submission of June 10--the specification of riser cable in the CBD synopsis. Protester maintains that installation of riser cable in not within the scope of EXECUTONE's schedule contract. This issue is untimely, as it would have had to have been raised on or about March 23, some ten calendar days after the publication of the CBD synopsis. Rule 5(b)(ii). This allegation is dismissed. ----------- FOOTNOTE ENDS ----------- The FIRMR prohibits splitting of requirements to avoid a maximum order limitation of a schedule contract. 41 CFR 201- 39.803-3(d) (1992). When there is no appropriate schedule contract meeting Government requirements at the lowest overall cost, the contracting officer may elect to issue a solicitation. 41 CFR 201-39.803-3(b). ComTel might have been an interested party had it sought a competitive solicitation for the requirements stated in the CBD synopsis and demonstrated its willingness to submit a bid or proposal on those requirements. ComTel did not show that it was willing to provide what the Government needed. Decision This protest is DISMISSED FOR LACK OF AN INTERESTED PARTY. ________________________________ ANTHONY S. BORWICK Board Judge We concur: _________________________ EDWIN B. NEILL Board Judge _____________________________ JOSEPH A. VERGILIO Board Judge