THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON JUNE 23, 1993 INTERVENOR'S MOTION TO DISMISS COUNT II DENIED: June 16, 1993 GSBCA 12443-P PYRAMID TECHNOLOGY CORPORATION, Protester, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent, and SEVERN COMPANIES, INC., Intervenor. Marie N. Doland, James J. Tierney, and James S. Kurz of Hazel & Thomas, Falls Church, VA, counsel for Protester. Dalton Phillips, Office of the General Counsel, Department of Health and Human Services, Washington, DC, and Richard S. Brown, Office of the General Counsel, Department of Health and Human Services, Rockville, MD, counsel for Respondent. Richard J. Conway, William M. Rosen, and Leticia E. Flores of Dickstein, Shapiro & Morin, Vienna, VA, counsel for Intervenor. Before Board Judges PARKER, HENDLEY, and WILLIAMS. WILLIAMS, Board Judge. This matter comes before the Board on intervenor Severn Companies, Inc.'s (Severn's) motion to dismiss Count II of this protest.[foot #] 1 In Count II Pyramid Technology Corporation (Pyramid) alleged that the Department of Health and Human Services (HHS) failed to make a proper or timely responsibility determination with respect to Severn. For the reasons stated below, we deny the motion. Background On June 1, 1993, Pyramid filed the instant protest challenging HHS' award of a contract to Severn for computer systems, software, and services for the Indian Health Services (IHS). Pyramid raised five counts, claiming that: 1) Severn's proposal failed to meet mandatory criteria of the solicitation; 2) HHS failed to perform a proper responsibility determination with respect to Severn; 3) HHS engaged in improper price negotiations, encouraging Pyramid to raise its price and Severn to lower its price; 4) HHS improperly evaluated Pyramid's proposal by downgrading its offering of Intersystems' MUMPS[foot #] 2 software as well as its experience in systems integration and operations, and by failing to credit its disk mirroring capabilities; and 5) HHS failed to justify the price premium for the Severn proposal. On June 10, 1993, Severn filed a motion to dismiss Count II of the complaint for failure to state a valid basis of protest. In Count II Pyramid alleged: 38. The RFP required that an award be made to a "responsible" offeror. RFP M.1.2. Similarly, FAR 9.103 prohibits the award of contracts "unless the contracting officer makes an affirmative determination of responsibility." Moreover, FAR 9.105 1(b)(3) requires that "[i]nformation on financial resources and performance capability shall be obtained or updated on as recent a basis as is feasible up to the date of award." 39. Upon information and belief, Severn is experiencing severe financial difficulties and, upon information and belief, its continued existence is in doubt. 40. Upon information and belief, HHS did not perform a proper and timely responsibility determination, in violation of its DPA, the RFP and statute and ----------- FOOTNOTE BEGINS --------- [foot #] 1 Respondent fully supported this motion during oral argument. Conference Memorandum dated June 15, 1993. [foot #] 2 MUMPS is a computer language, which refers to the Massachusetts General Hospital Utility Multi-Programming _ _ _ _ System. Complaint 12. _ ----------- FOOTNOTE ENDS ----------- regulation, including 41 U.S.C. 253, and FAR 9.103 and 9.105. Complaint 38-40. Section M.1.2 of the solicitation required that award be made to that "responsive, responsible Offeror" whose proposal meets all of the mandatory requirements of Section C, successfully completes the Live Test Demonstration (LTD), and is most advantageous to the Government. Protest File, Exhibit 4 at 136. Section L.12 of the solicitation, which contained instructions for preparation of volume II , the business proposal, provided in pertinent part: Section 5 - Financial Capability The Offeror shall provide a copy of its most recent annual financial statements, a copy of the most recent quarterly (or other partial year) financial statement, and all information deemed relevant to convincingly demonstrate its ability to perform the requirement from a financial point of view. Similar information is requested on all non-Offeror items included with your offer. Protest File, Exhibit 4 at 128. Discussion Severn contends that Count II fails to state a valid basis of protest because "Pyramid has not alleged any facts which, if proven, would show that Severn was nonresponsible as a matter of law . . . [or] . . . that any facet of Severn's financial condition is likely to lead to Severn's abandoning or being unable to perform its contractual requirements." Intervenor's Motion to Dismiss Count II at 2. Further, Severn emphasizes that the solicitation contains no definitive responsibility criteria and that contracting officers have discretion to apply their business judgment in making responsibility determinations. Id. at 3. In determining whether a complaint states a valid basis of protest, we examine whether the language of the complaint "alleges facts which, if proven, could permit the Board to sustain the protest." Unisys Corp., GSBCA 11069-P, 91-2 BCA 23,763, at 119,031, 1991 BPD 32, at 5. Here, protester has alleged upon information and belief that the awardee "is experiencing severe financial difficulties and . . . its continued existence is in doubt." Complaint 39. The gravamen of its complaint is that the contracting officer did not do what regulation and the request for proposals (RFP) required, i.e., obtain updated financial information and make a proper affirmative responsibility determination. Protester expressly alleged violations of statute, regulation, and the RFP citing 41 U.S.C. 253, FAR 9.103 and 9.105, and Section M.1.2 of the RFP.[foot #] 3 If, as protester alleges, HHS failed to consider sufficiently current financial information and failed to make a proper and timely responsibility determination, protester will have demonstrated a violation of statute, regulation, and the terms of the solicitation. Such violation, if prejudicial, could entitle protester to relief. This case is analogous to Vu-Data Corp., GSBCA 10760-P, 91-1 BCA 23,327, 1990 BPD 252, where an intervenor sought to dismiss an allegation regarding its lack of responsibility. The Board concluded: "Protester has stated a prima facie case for this count and that is all that is required to allow the matter to be fully developed and considered on the merits." Vu-Data Corp., 91-1 BCA at 117,008, 1990 BPD 252, at 4. Further, a protester "is not required to adduce evidence in support of these allegations prior to completion of discovery and submission of the matter to the Board for decision." Unisys, 91-2 BCA at 119,031, 1991 BPD 32, at 6. Decision Protester's motion to dismiss Count II of the protest is DENIED. _____________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ ROBERT W. PARKER JAMES W. HENDLEY Board Judge Board Judge ----------- FOOTNOTE BEGINS --------- [foot #] 3 In its opposition to the motion to dismiss, Pyramid cited Section L.12 of the solicitation quoted above.