___________________________________________ MOTION TO DISMISS DENIED; PROTEST DENIED: December 7, 1993 ___________________________________________ GSBCA 12613-P INTEGRATED SYSTEMS GROUP, INC., Protester, v. DEPARTMENT OF THE ARMY, Respondent, and R & S COMPUTERS & MEMORY ENHANCEMENT PRODUCTS, Intervenor. Shelton H. Skolnick, Judy D. Leishman, Amy M. Hall, and Bruce Trimble of Skolnick & Leishman, P.C., Derwood, MD, counsel for Protester. Col. Riggs L. Wilks Jr., Maj. Charles R. Marvin, Jr., Maj. Karl M. Ellcessor, and Capt. Elizabeth DiVecchio Berrigan, Office of the Chief Trial Attorney, Department of the Army, Washington, DC, counsel for Respondent. Matthew Shafer, Sr., President of R & S Computers & Memory Enhancement Produce, Costa Mesa, CA, appearing for Intervenor. Before Board Judges HENDLEY, BORWICK, and NEILL. NEILL, Board Judge. This protest has been filed by Integrated Systems Group, Inc. (ISG). ISG is protesting the contracting officer's decision to terminate a contract previously awarded to it by the Army for the supply of twenty-two personal computers. ISG's bid was not the lowest priced bid received by the Army in this procurement. A lower priced bid was submitted by R&S Computers & Memory Enhancement Products (R&S). This bid, however, was found to be nonresponsive. R&S challenged the finding and protested the award made to ISG. R&S and the Army agreed to refer the matter to alternative dispute resolution (ADR). The ADR official concluded that the contracting officer's determination was erroneous. He, therefore, recommended termination of the ISG contract and award to R&S. It is the contracting officer's decision to comply with this recommendation which is the subject of this protest by ISG. R&S has intervened in the protest as an intervenor of right. The parties have agreed to have this case decided on the record without any hearing. Rules 9, 11. Since the filing of this protest, the Army has issued a notice of proposal for debarment of ISG. In view of this development, the Army has filed a motion to dismiss this protest based on ISG's alleged lack of interested party status. For the reasons set out below, we deny the motion to dismiss and the protest as well. Findings of Fact 1. On February 22, 1993, the Army issued Invitation For Bids (IFB) No. DAEA32-93-B-0004 seeking the purchase of twenty- two personal computers (PCs), 486DX50 Dell, or equal. Separate line items were included in the IFB for the base computer, the RAM, the color monitor, and the hard drive. The IFB called for various Dell part numbers or equal. Protest File, Exhibit 3. 2. Section C of the IFB is entitled "DESCRIPTION/SPECS./WORK STATEMENT." On less than a single page are listed fourteen specifications. The fourteenth reads: 14. INCLUDES A ONE YEAR, ON SITE, NEXT BUSINESS DAY WARRANTY; LIFETIME TECHNICAL SUPPORT, 5 YEAR COMPATIBILITY GUARANTEE. Protest File, Exhibit 3 at C-1. 3. The IFB also contains the following provision from the Federal Acquisition Regulation (FAR) regarding descriptive literature: DESCRIPTIVE LITERATURE (APR 1984) (a) "Descriptive literature" means information (e.g. cuts, illustrations, drawings, and brochures) that is submitted as part of a bid. Descriptive literature is required to establish, for the purpose of evaluation and award, details of the product offered that are specified elsewhere in the solicitation and pertain to significant elements such as (1) design; (2) materials; (3) components; (4) performance characteristics; and (5) methods of manufacture, assembly, construction, or operation. The term includes only information required to determine the technical acceptability of the offered product. It does not include other information such as that used in determining the responsibility of a prospective Contractor or for operating or maintaining equipment. (b) Descriptive literature, required elsewhere in this solicitation, must be (1) identified to show the item(s) of the offer to which it applies and (2) received by the time specified in this solicitation for receipt of bids. Failure to submit descriptive literature on time will require rejection of the bid, except that late descriptive literature sent by mail may be considered under the Late Submissions, Notifications, and Withdrawal of Bids provision of this solicitation. (c) The failure of descriptive literature to show that the product offered conforms to the requirements of this solicitation will require rejection of the bid. Protest File, Exhibit 3 at L-5. 4. In response to the IFB, R&S submitted a bid offering to supply the equipment sought by the Army. The bid of R&S contains no exception to any of the requirements of the solicitation. Protest File, Exhibit 6. 5. The descriptive literature provided by R&S mentions a two-year warranty for hard disk drives and an extendable one-year limited warranty for the base computer system. This descriptive literature makes no reference to any compatibility requirement in the IFB. Protest File, Exhibit 5. 6. Bid opening took place on April 13, 1993. The contracting officer received eight bids. Although R&S' bid was lower in cost than that of protester, the contracting officer determined that the R&S bid was nonresponsive because it failed to specifically provide information regarding the requirements contained in subparagraph fourteen of Section C of the IFB. Award was made, therefore, to protester as the next lowest responsive and responsible bidder. Protest File, Exhibit 7. 7. R&S protested the contracting officer's decision to award to ISG. The protest was filed at this Board and docketed as GSBCA 12477-P. ISG intervened in this protest by R&S as an intervenor of right. The protest, however, was dismissed with prejudice after R&S and the Army agreed to refer their dispute to an ADR forum. The ADR forum selected by R&S and the Army was the Contract Law Division of the Army's Office of the Judge Advocate General. ISG was not a party to the ADR proceedings nor did it agree, as R&S and the Army did, to be bound by the decision of the ADR official. Protest File, Exhibit 8. 8. On August 25, the ADR official rendered his decision to the parties. The decision reads in part as follows: In our opinion, Section L did not require any offeror to specifically address warranties in its bid. Descriptive literature was required solely to demonstrate that the products offered by R&S met the technical specifications of the solicitation. We do not believe "technical acceptability" as that term is used applies to warranties. The General Accounting Office has agreed with this interpretation, on at least two occasions: see, Interad, Ltd., B-182717, June 16, 1975, 75-1 CPD 363; and Futura Systems, Incorporated, B-242060, March 25, 1991, 91-1 CPD 934 [sic], 70 Comp. Gen. 365, a case which has a remarkably similar factual situation to this protest. See also FAR 14.201- 6(p)(1). It is our opinion, therefore, that unless R&S had affirmatively stated that it would not comply with one or more of the warranty terms, the company's submission of its offer alone obligated R&S to comply with the warranty provisions contained in the solicitation. Protest File, Exhibit 9. The conclusion reached by the ADR official was that warranty information did not have to be included in the descriptive literature in order to determine the technical acceptability of an "or equal" product. The bidder's intention to comply with the specification was established by its signing the bid. Consequently, the official indicated that the Army should terminate the award to ISG for the convenience of the Government and make award instead to R&S. Id. 9. ISG, upon being informed of the outcome of the ADR process and the Army's plans to terminate the contract awarded to ISG, promptly filed an agency protest contending the R&S bid was, in fact, nonresponsive. The agency protest was denied. ISG then filed a timely protest with this Board. Protest File, Exhibits 11-12. Discussion The Motion to Dismiss By letter dated November 23, 1993, protester was notified by the Army's suspension and debarment official that it had been proposed for debarment from future contracting with any agency in the executive branch of the U.S. Government. This action prompted the Army to file a motion to dismiss this protest based on an alleged lack of interested party status. The Army bases its argument upon a provision in FAR which states: Contractors debarred, suspended, or proposed for debarment are excluded from receiving contracts, and agencies shall not solicit offers from, award contracts to, or consent to subcontracts with these contractors, unless the acquiring agency's head or designee determines that there is a compelling reason for such actions. . . . 48 CFR 9.405(a) (1992) (FAR 9.405(a)). Based on this provision, the Army argues: In the present case, because the Army proposed Protester for debarment, Protester is no longer eligible for award and, hence, is not an "interested party" for purposes of this procurement. Protester's Motion to Dismiss at 3. Respondent's argument would be highly persuasive if this were not a reverse protest. In this case ISG is not demanding that it be awarded a contract. If it were, respondent would be correct. The proposal for debarment would disqualify ISG from such an award and, thus, preclude it from having any direct economic interest in the award or failure to award a contract. See 40 U.S.C. 759(f)(9)(B) (1988). In this reverse protest, however, ISG is protesting the contracting officer's avowed intent to terminate an award already made to ISG. The direct economic interest in question here has already vested. We, therefore, find the Army's reliance on FAR 9.405(a) to be misplaced. The proposal for debarment, while temporarily precluding ISG from future awards, does nothing to the award already made to ISG. A provision in the same section of the FAR states in part: (a) Notwithstanding the debarment, suspension, or proposed debarment of a contractor, agencies may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, or proposed for debarment unless the acquiring agency's head or a designee directs otherwise. FAR 9.405-1. A proposal to debar current contractors, therefore, has no effect upon the existing contract unless the agency head directs otherwise. No such action has been reported to us.[foot #] 1 In this reverse protest, therefore, we find that ISG retains a direct economic interest in the procurement and, for that reason, we deny the Army's motion to dismiss for lack of interested party status. ISG's Protest The contracting officer originally concluded that R&S' bid was nonresponsive because the descriptive literature provided did not address the requirements of specification fourteen in Section C. As noted earlier, that specification read: 14. INCLUDES A ONE YEAR, ON SITE, NEXT BUSINESS DAY WARRANTY; LIFETIME TECHNICAL SUPPORT, 5 YEAR COMPATIBILITY GUARANTEE. The ADR official reviewing this case disagreed with the conclusion of the contracting officer. He read the requirements of specification fourteen as referring to future use and maintenance of the equipment offered. He noted that the Descriptive Literature clause of the IFB states that the purpose of the literature is to show that the product conforms to the requirements of the solicitation and does not require information relating to the operation and maintenance of the equipment. He concluded, therefore, that R&S was not required to provide descriptive literature on the requirements set out in specification fourteen. The ADR official based his conclusion on a line of decisions rendered by the General Accounting Office. E.g. Futura Systems Inc., 70 Comp. Gen. 365 (1991), 91-1 CPD 327 (it was inappropriate for an agency to require bidders to submit descriptive literature to address the warranty requirements in the solicitation since a warranty relates to a performance obligation and does not involve the technical acceptability of the offered product). We agree with the analysis of the ADR official. This Board interprets the descriptive literature requirement in a similar fashion. See Dunn Computer Corp., GSBCA 11531-P, 92-1 BCA 24,618, 1991 BPD 332 (descriptive literature is to address the attributes of the equipment bid and not other information such as that relating to the operation or maintenance of the equipment). In this protest, ISG attempts to resurrect the argument that R&S' bid is nonresponsive because it has not submitted ----------- FOOTNOTE BEGINS --------- [foot #] 1 Indeed, if the contract were to be terminated while this protest is pending, we would consider this to be a violation of the suspension order issued shortly after this protest was filed. ----------- FOOTNOTE ENDS ----------- descriptive literature demonstrating compliance with specification fourteen. In making its argument, ISG focuses on the requirement for a "5 year compatibility guarantee." This particular requirement, according to ISG, relates to technical acceptability. Protester states: Regardless, there is no question that the part of Number 14 that states "5 year compatibility guarantee" addresses a technical acceptability issue. Almost by definition, the question of whether a product is compatible can only be considered a question of technical acceptability. Quite simply, if the product is not compatible it is not technically acceptable. Protester Brief at 6. We disagree. Protester in this case is reading the requirement out of context and giving to it a meaning which makes little sense. We read the guarantee and warranty requirements in the IFB as performance requirements which are clearly prospective in application. It would make little sense to assume that the requirement for a "5 year compatibility guarantee" was included in the IFB in order to elicit from bidders the assurance that the various components of the system actually offered are compatible among themselves. The compatibility of the brand name components called out in an IFB should be a given. Otherwise, one would be dealing, to say the least, with a most bizarre, if not actually defective, specification. Similarly, if a bidder offers alternative components and, through descriptive literature, successfully demonstrates that they are suitable "equals," then compatibility should likewise be a given. Consequently, we understand the compatibility requirement mentioned in specification fourteen to apply to the offered components as they may be used and maintained for the first five years of the offered system's life. Protester has failed to convince us that this requirement represents an effort on the part of the Army to elicit from bidders additional information regarding the technical acceptability of the products offered. If a bidder offers the items solicited by the Government or items deemed equal to those solicited, compatibility among these items can be presumed and need not be demonstrated in order to ensure the technical acceptability of an otherwise responsive offer. In short, we are untroubled by the absence of reference to the "5 year compatibility guarantee" in the descriptive literature contained in the R&S bid. Neither do we attribute any specific significance to the absence in the R&S bid of a statement expressly agreeing to meet this requirement. The bid takes no exception to any of the requirements of the IFB. A bid cannot be deemed nonresponsive where a bidder is clearly bound to perform the material requirements of the IFB and, as in this case, has not taken exception to these requirements. Denro, Inc., GSBCA 9626-P, 89-1 BCA 21,287, at 107,368-69, 1988 BPD 238, at 13. Because protester has failed to convince us that the R&S bid is nonresponsive, we see no reason why the contracting officer should not, in accordance with applicable statute and regulation, proceed, as planned, with the termination of ISG's contract. Decision Respondent's motion to dismiss is DENIED and this protest is also DENIED. The Board's order suspending the delegation of procurement authority applicable to this procurement expires in accordance with its terms. _________________________ EDWIN B. NEILL Board Judge We concur: ___________________________ _________________________ JAMES W. HENDLEY ANTHONY S. BORWICK Board Judge Board Judge