_____________________________________________________ DISMISSED FOR LACK OF JURISDICTION: October 22, 1993 _____________________________________________________ GSBCA 12631-P CITICORP, Protester, v. GENERAL SERVICES ADMINISTRATION, Respondent, and AMERICAN EXPRESS TRAVEL RELATED SERVICES CO., INC., Intervenor. David B. Apatoff and Steven S. Diamond of Arnold & Porter, Washington, DC; Michael R. Charness and William A. Roberts, III, of Howrey & Simon, Washington, DC; and Diantha McJilton of Citicorp Diners Club, Inc., counsel for Protester. George Barclay, Michael J. Ettner, Janet L. Harney, Michelle A. Harrell, Seth P. Binstock, and Pamela J. Reiner, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Hamilton Loeb, Bruce D. Ryan, Scott M. Flicker, John M. Oseth, and Randall M. Stone of Paul, Hastings, Janofsky & Walker, Washington, DC, counsel for Intervenor. Before Board Judges LaBELLA, HENDLEY, and DeGRAFF. DeGRAFF, Board Judge. Citicorp protests the award by the General Services Administration (GSA) of a contract to American Express Travel Related Services Co., Inc. (AmEx). GSA and AmEx filed motions to dismiss the protest, asserting that the Board lacks jurisdiction because the procurement is not for the purchase, lease, or maintenance of automatic data processing equipment. Because the procurement is for travel-related financial services and not for the purchase, lease, or maintenance of automatic data processing equipment, we dismiss the protest for lack of jurisdiction. Findings of Fact On May 13, 1993, the General Services Administration (GSA) issued request for proposals FCXS-F1-930002-N (the solicitation), for the Travel and Transportation Payment and Expense Control System (TTPECS). Complaint 8. The TTPECS is a system that permits government employees to utilize credit cards and travelers checks when they make work-related travel arrangements and when they pay their travel expenses. The TTPECS contractor will be required 1) to establish individually billed credit card accounts, 2) to establish centrally billed credit card accounts, 3) to provide travelers checks to agency personnel, and 4) to prepare a variety of reports for the Government. Respondent's Motion to Dismiss, Attachment 1. Section CA.6 of the solicitation explains the requirements associated with establishing individually billed credit card accounts. The contractor is required to provide employees credit cards with no pre-set spending limits. The cards must be accepted by common carriers, car rental agencies, lodging establishments, restaurants, gas stations, and automated teller machine (ATM) networks and banks. The Government is not liable for any of the charges incurred by employees. The contractor is required to replace lost and stolen cards and to provide each individual cardholder with an itemized monthly statement. The contractor must be able to accept payment electronically. The contractor is required to develop a cardholder agreement and enter into such an agreement with each individual cardholder. The solicitation explains how the contractor is required to issue cards, deliver cards, verify that cards are received, and renew cards. The solicitation also explains how the contractor can suspend and cancel individually billed credit card accounts. From 1989 through 1992, there were nearly 900,000 individually billed credit card accounts and the total card volume exceeded $3.5 billion. The solicitation projects that from 1994 through 1998, there will be approximately 1.8 million individually billed credit card accounts and that the total card volume will exceed $7.9 billion. Respondent's Motion to Dismiss, Attachment 1. Section CA.7 of the solicitation explains the requirements associated with establishing centrally billed accounts. These accounts are used primarily to meet the needs of an agency for common carrier transportation purchases and for emergency lodging associated with mass personnel movements and other special functions. The contractor is required to provide credit cards with no pre-set spending limits. The cards must be accepted by common carriers and lodging establishments. The Government is liable for charges incurred in accordance with government travel regulations. The contractor is required to replace lost and stolen cards and to provide the government agencies with itemized monthly statements and summary statements. Agencies may make payments electronically. The solicitation explains how the contractor can suspend and cancel centrally billed credit card accounts. The solicitation also explains how payment will be made and how billing discrepancies will be identified and resolved. From 1989 through 1992, there were nearly 4,000 centrally billed credit card accounts, and the total card volume exceeded $2.6 billion. The solicitation projects that, from 1994 through 1998, the total card volume for centrally billed accounts will exceed $5.7 billion. Respondent's Motion to Dismiss, Attachment 1. Section CA.5 of the solicitation contains general requirements for both individually billed and centrally billed credit card accounts. The contractor is required to work with agencies to implement the credit card program within certain time limits. The contractor is required to provide dedicated customer service personnel twenty-four hours per day, 365 days per year. The solicitation also requires that the contractor provide a quarterly newsletter to all cardholders containing information concerning the TTPECS. The solicitation requires that the cards be designed and embossed in a particular fashion. The contractor is required to establish unique account numbers, to retain records of purchases, to provide training necessary to implement the system, and to fulfill certain quality assurance and security requirements. The solicitation prohibits the contractor from releasing cardholder information to any third party. The contractor is required to provide a full-time dedicated staff to manage the project. Respondent's Motion to Dismiss, Attachment 1. Section CA.8 of the solicitation explains the requirements associated with establishing the travelers checks program. The contractor is required to work with agencies to establish their travelers checks programs. The solicitation requires the contractor to provide credit card readers at no cost to the Government, so that employees may use their cards to purchase travelers checks. The checks are required to be accepted by merchants and financial institutions. The solicitation explains how the contractor must make refunds for lost and stolen checks, the denominations of checks that the contractor must make available, how inventories of checks will be replenished, and payment terms. From 1989 through 1992, approximately $455 million of travelers checks were purchased. The solicitation projects that from 1994 through 1998, approximately $738 million of checks will be purchased. Respondent's Motion to Dismiss, Attachment 1. Section CA.9 of the solicitation explains the reporting requirements of the TTPECS program. Reports are required to be made available to agencies in a variety of media, including hard copy, magnetic tape, or electronic. Electronic access to electronic reports is to be available twenty-four hours per day, 365 days per year. A variety of reports are required, including account activity reports, suspension reports, cancellation reports, airline credit reports, ATM reports, and travelers check transaction reports. There are also some management reports that must be provided to GSA. Respondent's Motion to Dismiss, Attachment 1. Section L of the solicitation contains instructions for preparing offerors' technical proposals. The section explains that proposals must contain material to establish the range, scope, and extent that the offeror's credit card, travelers checks, and ATM product are accepted. An offeror's "ATM product" is the ability to use the offeror's credit card to withdraw cash from generally available ATMs or at bank counters. The section also explains that proposals must demonstrate the offeror's corporate experience in supporting charge card and travelers check programs on a scale similar to that required by the Government. Section L provides that proposals must demonstrate an offeror's quality and extent of customer service and support programs, including an offeror's support for providing reports. Section L also provides that proposals must demonstrate an offeror's support for centrally billed accounts, and an offeror's ability to bring agencies into the credit card and travelers checks programs and to manage the project. Respondent's Motion to Dismiss, Attachment 1. Section M of the solicitation explains the factors that GSA would utilize to evaluate offerors' proposals. There are five equally weighted factors: Acceptance, Corporate/Past Experience, Customer Service, Centrally Billed Account Support, and Program Implementation Plan. Respondent's Motion to Dismiss, Attachment 1. The solicitation expects that offerors will utilize computers in order to keep track of account information, to provide security to maintain the integrity and function of all databases and systems, and to generate monthly statements and reports. Given the number of accounts and the dollar volume of transactions, it is difficult to imagine how an offeror could perform this contract without utilizing computers. The solicitation contains several specific requirements for the use of an automated system: Section CA.5.5 requires the contractor to provide dial-up electronic access to account and transaction data. If any software is required to accomplish this, the contractor shall provide it at no cost to the government. This electronic access shall consist of two parts. First, the government must have on-line access to account information. Second, account information must be available in ASCII file format that can be downloaded via electronic means. Section CA.7.1.12 provides that the contractor shall provide a monthly invoice for centrally billed accounts in the medium requested by the agency, such as hard copy, floppy disk, and/or magnetic tape. Section CA.8.7 provides that the contractor shall provide dial-up access or software packages to enable the agencies to automate their travelers check systems, so that the systems can track, add, tally, report, and reorder checks. Section CA.9 provides that reports are required to be made available to agencies in a variety of media, including hard copy, magnetic tape, or electronic. Electronic access to electronic reports is to be available twenty-four hours per day, 365 days per year. Section CA.9.8 provides that agencies may request customized reports, to be generated from existing data and produced in ASCII format if requested. Respondent's Motion to Dismiss, Attachment 1. GSA required offerors to demonstrate that they could provide on-line access to data. Protester's Opposition Brief, Attachment A. Citicorp and AmEx submitted proposals in response to the solicitation. GSA awarded the contract to AmEx on September 30, 1993. Complaint 1, 4. This protest was filed on October 8, 1993. Discussion The Brooks Act provides us with jurisdiction to entertain a protest "in connection with any procurement conducted which is subject to [the Act]." 40 U.S.C. 759(f)(1) (1988). A procurement is subject to the Brooks Act if is for the "purchase, lease, [or] maintenance of automatic data processing equipment." 40 U.S.C. 759(a). For purposes of 40 U.S.C. 759: [T]he term "automatic data processing equipment" means any equipment or interconnected system or subsystems of equipment that is used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching interchange, transmission, or reception, or data or information -- (i) by a Federal agency, or (ii) under a contract with a Federal agency which -- (I) requires the use of such equipment, or (II) requires the performance of a service or the furnishing of a product which is performed or produced making significant use of such equipment. 40 U.S.C. 759(a)(2)(A). The term "automatic data processing equipment" (ADPE) includes computers; ancillary equipment; software, firmware, and similar procedures; services, including support services; and related resources as defined by regulations issued by the Administrator for General Services. 40 U.S.C. 759(a)(2)(B). The Brooks Act does not apply to ADPE which is acquired by a contractor and which is "incidental" to the performance of a contract. 40 U.S.C. 759(a)(3)(A). Pursuant to the Brooks Act, GSA issued the Federal Information Resources Management Regulation (FIRMR), which applies to the acquisition, use, and management of federal information processing (FIP) resources by federal agencies.[foot #] 1 41 CFR ch. 201 (1992). GSA also issues FIRMR bulletins which contain nonregulatory guidance to agencies concerning FIP resources. The FIRMR and its bulletins provide valuable assistance for interpreting the provisions of the Brooks Act. For example, the Brooks Act provides that the procurement of a "system" of equipment to be used by the Government is subject to the Act's terms. The FIRMR defines a "system" of equipment as "any organized combination of FIP equipment, software, services, support services, or related supplies." 41 CFR 201-4.001. The FIRMR also explains that use of FIP resources is "incidental" to performance if a contract does not substantially restrict the contractor's discretion in the acquisition and management of FIP resources. 41 CFR 201- 1.002-1(b)(2)(ii). Consistent with these regulatory provisions, FIRMR Bulletin A-1 provides two examples of "incidental" use. In one example, an agency initiated a procurement for the completion of a study of the agency's organization and personnel distribution and the delivery of a hardcopy report. The solicitation required the contractor to develop software, gather information, and utilize a computer to process information and generate the report. Because the agency stated a general requirement for software and use of a computer and did not place any restrictions upon the contractor's acquisition or management of FIP resources, Bulletin A-1 explains that the use of FIP resources is incidental to performing the contract. In the other example, an agency initiated a procurement for identifying and enrolling more than one million people in a benefit program. The solicitation required the contractor to provide a means of maintaining current and immediately verifiable information concerning each person's benefits. Although the solicitation did not specifically require ----------- FOOTNOTE BEGINS --------- [foot #] 1 Instead of referring to ADPE resources, the FIRMR refers to FIP (federal information processing) resources. The FIRMR's definition of FIP resources mirrors the Brooks Act's definition of ADPE. ----------- FOOTNOTE ENDS ----------- the use of FIP resources, it was reasonable to expect that the contractor must use such resources, given the magnitude of the contract tasks. Because the agency did not state its requirements in a manner which would have restricted the contractor's discretion in the acquisition and management of FIP resources, Bulletin A-1 explains that the use of FIP resources is incidental to performing the contract. Bulletin A-1, Attachment C at 1-3. Bulletin A-1 suggests that an agency consider a series of several questions when deciding whether a procurement is subject to the FIRMR. Bulletin A-1 recommends deciding whether the solicitation requires the delivery of FIP resources for use by a federal agency. If not, the bulletin advises that we should look to see whether a principal task of the solicitation depends directly upon the use of FIP resources. If so, the bulletin suggests that we then examine the requirements of the solicitation in order to determine whether they have the effect of substantially restricting the contractor's discretion in the acquisition and management of the FIP resources. If not, the FIRMR does not apply, because the FIP resources are incidental to the performance of the contract. Bulletin A-1, Attachment C at 1-3. The analytical framework provided by Bulletin A-1 is consistent with the provisions of the Brooks Act and the FIRMR, and we will use this framework in deciding whether the procurement at issue in this protest is one for the purchase, lease, or maintenance of ADPE. The solicitation is not for the purchase of ADPE resources which will be delivered to a federal agency for its use. 40 U.S.C. 759(a)(1), (a)(2)(A)(i). According to the Brooks Act and the FIRMR, ADPE resources consist of either equipment (including software and other items) or an organized combination of equipment, software, services, support services, or related supplies. This solicitation does not require that the awardee deliver any such resources to the Government for its use. The solicitation does require that the awardee deliver data electronically on-line, on floppy disk, on magnetic tape, and in hard copy. But, no matter what delivery format is utilized, the fact remains that data -- not equipment and not a system of equipment -- is being delivered to the Government for its use. Although the solicitation also requires that the awardee's credit cards must be accepted by ATMs, the solicitation does not require that the awardee purchase ATMs, deliver ATMs, or establish a network of ATMs. If the Government is procuring anything, it is procuring ready access to cash, which is a financial service. Consequently, requiring that the awardee's credit card be accepted by ATMs does not amount to requiring that the awardee supply the Government with equipment or a system of equipment for the Government's use. Finally, the solicitation requires that the awardee supply credit card "readers" so that employees may use their credit cards to purchase travelers checks. According to Citicorp, this requirement is for the delivery of ADPE because the solicitation requires the awardee to supply readers which electronically read the information contained in a credit card's magnetic strip. The solicitation, however, does not require that these readers be electronic readers, and there are mechanical readers. Section CA.8.2, which contains the requirement for the readers, provides, in full: "The contractor shall provide card readers (point of sale machines) at no cost to the Government, to agencies/organizations issuing travelers checks, if requested by the participating agency/organization." Respondent's Motion to Dismiss, Attachment 1. It may be that Citicorp intended to provide electronic readers or that it believed only electronic readers would be accepted by GSA. However, Citicorp's beliefs and intentions do not establish that the solicitation requires an electronic card reader. Instead, the terms of the solicitation establish what is being procured. Best Power Technology Sales Corp. v. Austin, 984 F.2d 1172 (Fed. Cir. 1993). The requirement that the awardee supply credit card readers does not amount to a requirement that the awardee deliver ADPE to the Government for its use.[foot #] 2 Even though many of the tasks required by the solicitation depend upon the use of ADPE, the requirements of the solicitation do not substantially restrict the contractor's discretion in the acquisition and management of ADPE resources. 41 U.S.C. 759(a)(2)(A)(ii), (a)(3)(A). There is no doubt that the solicitation anticipates that the awardee will make extensive use of ADPE. Any offeror capable of providing widely accepted credit cards and travelers checks, adequate customer service, and accurate billing would have to depend heavily upon ADPE. As we have noted previously, the use of ADPE is ubiquitous, and the Government procures many products and services which could not be produced or provided without extensive use of ADPE. National Loan Servicenter, Inc. v. Department of Housing and Urban Development, GSBCA 12193-P, 93-2 BCA 25,853, 1993 BPD 64. The Brooks Act takes into account the pervasiveness of ADPE when it provides that a procurement is not subject to the Act if the contractor's use of ADPE is "incidental" to performance of the contract. 40 U.S.C. 759(a)(3)(A). The FIRMR sets forth the test for determining whether the use of ADPE is incidental to performance, when it directs us to determine whether the requirements of the solicitation ----------- FOOTNOTE BEGINS --------- [foot #] 2 Citicorp suggests that it is important that AmEx's proposal emphasizes its ADPE capabilities. As Best Power __________ establishes, what AmEx proposed is not material to determining whether the procurement is for ADPE. ----------- FOOTNOTE ENDS ----------- substantially restrict a contractor's discretion in the acquisition and management of ADPE resources. The FIRMR's test is based upon the fact that, when the Government wishes to procure any ADPE product or service, it specifies what it wants to obtain. ADPE specifications place a substantial restriction upon contractors, because contractors are required to submit proposals which state that they will fulfill all of the requirements set forth in the specifications, and they are required to perform in accordance with the terms of the specifications. If a solicitation anticipates that ADPE will be utilized during a contractor's performance, but does not contain any specifications for ADPE equipment or services, then a contractor's discretion is not substantially restricted by the terms of a solicitation. The lack of a substantial restriction upon a contractor's discretion is a reliable indication that the contractor's acquisition and management of ADPE are immaterial to the Government, and that the use of ADPE is incidental to performance. The FIRMR's provisions are reasonable and must be respected. Blum v. Bacon, 457 U.S. 132 (1982). The use of ADPE is incidental to performing the contract being awarded by GSA, because the solicitation does not place any substantial restrictions upon a contractor's discretion in the acquisition and management of its ADPE resources. The facts of this case are similar to those contained in the two FIRMR Bulletin A-1 examples discussed above. The solicitation permits offerors to utilize whatever equipment or system of equipment they wish. The solicitation does not explain how the awardee should compile or maintain its databases. It does not require any particular type of computers or ancillary equipment, any specific operating speed, any certain amount of storage capacity or memory, any particular operating software, or the use of any specified computer language or word processing program. The awardee is free to use whatever software it has available or is able to develop in order to provide the services that GSA is procuring. The solicitation does not require that persons with computer science backgrounds be assigned to the contract. The solicitation does not set out ADPE as a separate task or deliverable or evaluation factor. In summary, the solicitation permits offerors to meet the Government's needs by utilizing a wide variety of alternatives, and does not restrict a contractor's acquisition or management of its ADPE resources. If requiring data to be made available on diskettes, electronically on-line, on magnetic tape, or in ASCII file format are restrictions at all, they are not substantial. The contractor's choice of how to provide these media is not limited or restrained by the terms of the solicitation. Childress & Associates v. ACTION, GSBCA 11768-P, 92-2 BCA 24,997, 1992 BPD 103; CSC Credit Services, Inc. v. Department of Veterans Affairs, GSBCA 11414-C(11350-P), 92-2 BCA 24,778, 1992 BPD 47. The solicitation requires the contractor to provide reports which contain certain information presented in a particular order. It also requires the contractor to set aside a block of account numbers for government users. In addition, the solicitation requires that the contractor be able to identify and track payments by a cardholder's social security number. Citicorp states that these requirements are unique to the Government and are not required of its non-government accounts. Citicorp asserts that it will have to modify or develop software in order to fulfill these requirements and so, Citicorp concludes, these requirements place a substantial restriction upon its acquisition and management of ADPE resources. We disagree. The fact that some software might have to be modified or developed places virtually no restriction upon Citicorp's acquisition or management of its ADPE resources. It is free to choose a programming language, a computer, software, an operating system, and whatever other ADPE components it believes to be necessary in order to provide the Government with the data it requests. The decision in National Loan Servicenter is persuasive precedent.[foot #] 3 The solicitation in our case requires the use of ADPE. But, the use is merely incidental to the contractor's obligation to provide customer service and widely accepted credit cards and travelers checks; to implement and manage the program; to send bills and invoices; to process payments; and to provide data to the Government concerning use of the contractor's financial services. The primary item being procured is not ADPE. Instead, the primary item being procured is travel-related financial services. The system that the Government wishes to acquire is not a system of ADPE. Rather, the Government wishes to acquire a system that permits the Government and its employees to utilize common commercial practices when traveling. The ADPE that will be utilized by the contractor who provides this system is truly incidental to the contractor's performance. ----------- FOOTNOTE BEGINS --------- [foot #] 3 Citicorp characterizes as "dicta" the discussion in the National Loan Servicenter opinion concerning __________________________ whether ADPE was incidental to the contractor's performance. In fact, the discussion constitutes an alternate holding. In addition, we do not agree with Citicorp that National Loan _____________ Servicenter is distinguishable in any material respect from this ___________ case. ----------- FOOTNOTE ENDS ----------- Decision The protest is DISMISSED FOR LACK OF JURISDICTION. _____________________________ MARTHA H. DeGRAFF Board Judge We concur: _____________________________ ______________________________ VINCENT A. LaBELLA JAMES W. HENDLEY Board Judge Board Judge