DENIED: December 1, 1993 GSBCA 12632-P MCI TELECOMMUNICATIONS CORPORATION, Protester, v. PEACE CORPS, Respondent, and AT&T COMMUNICATIONS, INC., Intervenor. Robin L. Redfield and Linda P. Armstrong of MCI Telecommunications Corporation, Washington, DC, counsel for Protester. Brian J. Sexton and Kirby Mullen, Office of the General Counsel, Peace Corps, Washington, DC, counsel for Respondent. C. Stanley Dees, Thomas C. Papson, and William Lewis Taylor of McKenna & Cuneo, Washington, DC; and Jonathan S. Hoak and Steven H. Talkovsky of AT&T Communications, Inc., Silver Spring, MD, counsel for Intervenor. Before Board Judges DANIELS (Chairman), DEVINE, and BORWICK. DANIELS, Board Judge. AT&T Communications, Inc. (AT&T) is currently providing the Peace Corps' requirements for international switched voice telecommunications services (ISVS). On October 8, 1993, MCI Telecommunications Corporation (MCI) filed a protest alleging that until the Peace Corps satisfies its needs for these services through a competitively-awarded contract, the agency is violating requirements of statute and regulation. MCI maintains that the current arrangement between the Peace Corps and AT&T is illegal for two reasons -- first, because it was made without competition and an exemption from competition was not justified, and second, because it lacks a delegation of procurement authority (DPA) from the General Services Administration (GSA). MCI maintains that the Peace Corps can secure ISVS legally only by obtaining the services under MCI's contract with the Defense Commercial Communications Office (DECCO) or by awarding a separate contract. Because the second of these alternatives cannot be accomplished immediately, MCI asks that if the Peace Corps selects it to fulfill the agency's long-term needs, we direct the agency to buy ISVS under the DECCO contract in the interim. We deny the protest. The Peace Corps has been proceeding toward the long-range goal sought by MCI since before the protest was filed, and it is implementing plans which are expected to lead to that result within a reasonable period of time. Further, the Peace Corps' current purchases from AT&T are being made under the auspices of GSA, so a DPA is presently unnecessary. Findings of Fact 1. The Peace Corps granted to AT&T on November 20, 1984, an "Appointment of Communications Representative," or "ACR," "to participate in and coordinate the subscription process for all customer lines listed [none are listed] and to issue instructions to and to otherwise deal with the Local Exchange Company regarding the same." The appointment may be revoked at any time. Protest File, Exhibit 1. When the protest was filed, and even during the first few weeks thereafter, the parties (MCI, the Peace Corps, and intervenor of right AT&T) all appeared to be under the impression that for the past nine years, the agency has been purchasing ISVS from AT&T under the ACR arrangement. By November 10, when we issued an interlocutory opinion in the case, the parties were beginning to suggest that the situation was somewhat different and that GSA was somehow involved in the Peace Corps' acquisition of the services. We asked the parties to supplement the record with documents on the basis of which we could come to factual and legal conclusions about this matter. The following findings of fact, and analysis regarding them, are based on the record as supplemented. 2. GSA operates a Consolidated Local Telecommunications Services Program that provides a large number of Washington, D.C., metropolitan area federal agencies with consolidated Centrex1 services through the Washington Interagency ____________________ 1 AT&T provides the following explanation of this term: "In the telecommunications industry, 'Centrex service' generally refers to a service whereby certain switching functions, for (continued...) Telecommunications System (WITS). Respondent's Exhibit 4. The Peace Corps has been one of these agencies since 1984 (and possibly earlier). Id. 3. Beginning in 1985, all agencies participating in the WITS Consolidated Centrex Program were provided WITS international direct distance dialed (IDDD) carrier service. Respondent's Exhibit 4. (The parties have not informed us of the difference, if any, between ISVS and IDDD service; they appear to assume that ISVS is a variety of IDDD service.) In 1985, after requesting bids, GSA selected AT&T as the WITS IDDD carrier. Id.; Intervenor's Exhibit 7 at 2. GSA awarded a new WITS contract in 1989, but has never changed the designation of AT&T as the IDDD carrier for that contract. Respondent's Exhibit 4. The Peace Corps orders services from AT&T, as the WITS designated IDDD carrier, under applicable AT&T tariffs. Respondent's Exhibit 2 at 3. Since 1991, it has paid for the services in response to monthly billings. Id. at 2; Protest File, Exhibit 7. This arrangement is in accordance with the WITS contract, which provides, "Tolls (IDDD) . . . shall be billed directly to customer agencies by the appropriate carrier." Intervenor's Exhibit 8 (p. 37 of modification PC05 to contract GSOOK89ADH0011). 4. On October 23, 1989, GSA advised agencies including the Peace Corps that at the end of the following September, GSA would "no longer provide a vendor for . . . IDDD service for the consolidated Centrex users. . . . [E]ach agency should take the necessary procurement action to obtain [its] own IDDD carrier with services to be effective on October 1, 1990." Protest File, Exhibit 3 at 3d unnumbered page. Two months later, however, GSA rescinded this direction. On December 20, GSA explained that it had "decided to conduct a nationwide procurement analysis for IDDD service utilizing FTS 2000 gateways as access. Therefore, agencies should not procure their own vendor[s] for IDDD." Id. at 5th unnumbered page. 5. On February 25, 1992, DECCO, after conducting a competitive procurement, awarded a contract to MCI for the provision of ISVS. Protest File, Exhibit 3 at 6th unnumbered page. This contract is structured so that agencies other than DECCO may, but need not, order services under it. Id., Exhibit 6. 6. In February, 1993, Peace Corps employees began to consider whether, for legal or economic reasons, their agency should consider alternative means of obtaining its ISVS ____________________ 1(...continued) example, abbreviated four or five-digit dialing, are performed in a local exchange carrier's central office rather than through equipment on a customer's premises." Intervenor's Brief at 7 n.3. requirements -- by conducting a competitive procurement, placing orders under the MCI/DECCO contract, or making arrangements to buy through another agency. Protest File, Exhibit 5 at 1st-4th unnumbered pages. Acting on the belief that GSA would permit the Peace Corps to continue buying ISVS from AT&T if that was the most economical alternative, they conducted a comparison of the costs the agency would incur for its ISVS if it purchased the services under the DECCO contract, rather than in accordance with the Government International Communications Service tariffs being charged by AT&T. The Peace Corps determined in March, and told MCI at that time, that the comparison showed buying under the DECCO contract would be considerably more expensive. Id. at 2d- 3d, 15th pages.2 7. On April 13, MCI asked that "the Peace Corps issue an RFP [request for proposals] for its [ISVS] requirements no later than April 23, 1993." Protest File, Exhibit 28. In response to this letter, the Peace Corps' information resources management director said on April 22 that "due to the complexity of the effort involved," the Peace Corps "will be unable to prepare and issue an RFP for ISVS by April 23." Id., Exhibit 32. 8. On May 4, MCI protested to the Peace Corps contracting officer the agency's "action of April 22, 1993, in refusing to issue a request for proposals or otherwise compete the [ISVS] requirements of the Peace Corps." This protest asked "that the Peace Corps obtain a [DPA], and give [MCI] written assurances that it will take the necessary steps to procure these services by competitive means and that it will do so within the next six months." Protest File, Exhibit 33. 9. In June, the Peace Corps began discussing with GSA a draft task order to be given by GSA to one of its contractors, Booz-Allen & Hamilton Inc. (Booz-Allen). Under the proposed task order, Booz-Allen would analyze the Peace Corps' requirements for ISVS and the relative merits of satisfying those requirements through a competitive procurement or through the placement of ____________________ 2 MCI told the Peace Corps in April that it would make its own comparison of the cost of the agency's buying ISVS in these two ways. Protest File, Exhibit 28. The agency encouraged the firm to prepare this comparison. Id., Exhibit 32. On ___ November 5, MCI submitted for the record two comparisons, one dated March 31 and the other dated November 4. Both agree with the Peace Corps' conclusion that purchasing ISVS from AT&T is less expensive than obtaining the same services under the MCI/DECCO contract. Id., Exhibits 14, 15. The Peace Corps made ___ a separate cost comparison, dated October 1, which reaches the same result. Id., Exhibit 4. AT&T and MCI employees who have ___ examined the various cost comparisons agree that consideration of various peripheral charges which are not assessed in the comparisons would not affect this ultimate conclusion. Intervenor's Exhibit 6; Protester's Exhibit 1. orders under the MCI/DECCO contract. Protest File, Exhibit 2 (4th facsimile transmission). 10. On August 5, GSA advised agencies that "WITS will not continue indefinite use of its current carrier for IDDD services." GSA instructed that "all agencies associated with WITS must either compete their IDDD services or convert to a fully competed contract," such as by placing orders under the MCI/DECCO contract. Protest File, Exhibit 6. No deadline was given for compliance with this direction. Respondent's Exhibit 4 at 2. 11. The Peace Corps responded to MCI's agency protest by letter dated September 22. The agency stated that GSA was negotiating with Booz-Allen to perform an analysis of the Peace Corps' requirements for ISVS; the analysis should be completed within 90 to 120 days; and "[i]t appears likely" that the Peace Corps would subsequently "obtain communications services through the Department of State, purchase services under the ISVS contract awarded by DECCO, or . . . procure our communications needs through the competitive RFP process." Protest File, Exhibit 34. 12. During the month of October, GSA sent the Peace Corps three separate drafts of a task order that might be issued to Booz-Allen. Protest File, Exhibit 2 (1st 3 facsimile transmissions). On October 26, GSA gave the Peace Corps an explanation of the various phases of work necessary to conduct a competitive procurement for ISVS; GSA projected that the work should be completed within six months. Id., Exhibit 8. 13. On October 29 -- three weeks after the Board protest was filed -- the Peace Corps stated that GSA and Booz-Allen "have agreed to expedite the procurement process and estimate that a contract for Peace Corps' international telecommunications service would be ready for award within approximately 6 months." Protest File, Exhibit 8 (cover letter). On November 8, the Peace Corps said more specifically in this regard, "We expect a competitive contract award to be made within six months." Answer at 3. On November 22, the agency gave this still more detailed explanation of its plans: According to the timeline agreed upon by GSA and Booz-Allen, the Peace Corps would be in a position to decide whether to meet our ISVS needs under the DECCO contract or proceed with our own competitive procurement . . . by January 15, 1994 . . . . Should it become clear that a competitive procurement is in the best interests of the government, a contract to meet our ISVS needs should be ready for award by approximately June 1, 1994. Respondent's Brief at 9. 14. On November 15, GSA stated: The Peace Corps is actively working with GSA to analyze its requirements, compare services available in the market to those available from MCI's contract with DECCO, and, if the agency chooses not to use that contract, to conduct a competitive procurement. Until this process is concluded, GSA will continue to make IDDD services available to the Peace Corps through the current WITS IDDD carrier. Respondent's Exhibit 2 at 2. Discussion The Administrator of General Services is "authorized and directed to coordinate and provide for the economic and efficient purchase, lease, and maintenance of automatic data processing equipment [ADPE] by Federal agencies." 40 U.S.C. 759(a)(1) (1988). This authority is exclusive; Congress has vested it in no other executive branch official. CACI, Inc. v. Stone, 990 F.2d 1233, 1235 (Fed. Cir. 1993) (citing Contel Federal Systems, Inc., GSBCA 11060-P, 91-2 BCA 23,764, at 119,035, 1991 BPD 33, at 7). ADPE includes telecommunications services. 40 U.S.C. 759(a)(2) (1988). The Administrator may fulfill this responsibility in two different ways: he may accomplish it directly or he may delegate it to other agencies or officials thereof. Id. 759(b). By regulation, the Administrator has required that agencies use "available consolidated local telecommunications service3 to meet their local telecommunications requirements," unless GSA has granted an exception to this rule. 41 CFR 201-24.102(b), (c) (1992) (Federal Information Resources Management Regulation (FIRMR) 201-24.102(b), (c)). Agencies may not contract for their own telecommunications requirements when those needs can be fulfilled through GSA's Consolidated Local Telecommunications Services Program. FIRMR 201-20.305-1(a)(1)(i). As part of the Consolidated Local Telecommunications Services Program, GSA provides telecommunications services to agencies in the Washington, D.C., metropolitan area through a contract known as WITS. Finding 2. The Peace Corps is among these agencies. Id. International dialing is one of the services provided through WITS. Finding 3. AT&T is the international carrier for WITS. Id. We find, based on the ____________________ 3 This service is defined as "local communications service provided by GSA to all Federal agencies located in a building, complex, or geographical area." FIRMR 201-4.001. record as developed more fully after we issued our interlocutory decision in this case, that the Peace Corps receives its international telecommunications service from AT&T through a GSA contractual vehicle, WITS. We consider to be without merit MCI's contention that because AT&T bills the Peace Corps directly for this service, the Peace Corps rather than GSA is responsible for the Peace Corps' acquisition of ISVS. See Protester's Brief at 12-15. MCI advanced this theory without legal or factual support; as AT&T showed in rebuttal, the WITS contract itself provides that although GSA is the contracting party on the Government's behalf, bills for international services used under the contract should be made directly to customer agencies. Finding 4; see Intervenor's Reply Brief at 1-3. This determination is essential to our disposition of both counts of MCI's protest. MCI's principal allegation is that the agency's failure to conduct a competitive procurement for ISVS violates provisions of statute and regulation. There is no question that the Peace Corps has made a commitment to acquire ISVS competitively in the near future, as MCI desires. Finding 13. In light of the agency's commitment, our interlocutory decision directed the parties to address these questions: Should this count be dismissed as moot, because "it can be said with assurance that there is no reasonable expectation that the alleged violation will recur and interim relief or events have completely and irrevocably eradicated the alleged violation"? RMTC Systems, GSBCA 8732-P, 87-1 BCA 19,557, at 98,851, 1986 BPD 222, at 3. Alternatively, should the count be granted because (a) the agency's action may fairly be taken as an admission that its prior failure to compete its requirements was in violation of law, and (b) the protest was the proximate cause of the present decision to conduct a competitive procurement? HSQ Technology, Inc., GSBCA 10802-P, 91-1 BCA 23,326, 1990 BPD 271; Severn Companies, Inc., GSBCA 9344-P, et al., 88-2 BCA 20,566, 1988 BPD 25. Given this choice, the Peace Corps and AT&T maintain that the first alternative is correct, and MCI urges us to adopt the second. We framed these two options in the context of an understanding -- derived from the parties' own view -- that the Peace Corps was responsible for its own procurement of international telecommunications services. Now that the record is better developed, we realize that the Peace Corps has been acquiring these services through a contract to which GSA, not the Peace Corps, is the Government party. With this fact illuminating our vision, we conclude that the count should be decided in a way not contemplated in the interlocutory decision: it should be denied. Beginning in December, 1989, the Peace Corps, as a participant in WITS, was under a GSA edict not to procure international telecommunications services on its own. Finding 4.4 By February, 1993, however, Peace Corps employees knew that agencies could purchase such services by placing orders under a contract DECCO had entered into with MCI. These employees also believed that GSA would permit agencies to acquire services by the most economical means available. The employees began to question whether their agency was legally and financially justified in continuing to buy international services from AT&T. Finding 6; see also Finding 5. In April, MCI asked that the Peace Corps conduct a competitive procurement for these services. Finding 7. The following month, MCI protested the Peace Corps' failure to issue a solicitation. Finding 8. The Peace Corps began to take action in this regard. In June, it sought help from GSA in arranging for a contractor to analyze the Peace Corps' requirements for international telecommunications services and the relative merits of satisfying these requirements through a competitive procurement or under the MCI/DECCO contract. Finding 9. The Peace Corps was thus following regulatory instructions that acquisition planning begin with analyses of an agency's requirements and alternative acquisition strategies for satisfying those requirements. FIRMR 201-20.001(a)(1), subpts. 201-20.1, -20.2. Then on August 5, the Peace Corps learned that GSA had removed its December, 1989, injunction against individual agency procurements of international services; GSA controverted its previous directive by telling agencies associated with WITS that they "must either compete their IDDD services or convert to a fully competed contract" such as MCI/DECCO. Finding 10. In September, the Peace Corps effectively responded to this directive by telling MCI that the GSA contractor's analysis would be finished in the next three or four months. Finding 11. After the Board protest was filed, in October, the Peace Corps accelerated its efforts. Finding 12. By the end of the month, the agency stated that it expected to award a contract competitively within about six months. Finding 13. The agency has now given a more precise date for this award -- by approximately June 1, 1994. Id. Thus, we see that the Peace Corps was taking actions that were necessarily preliminary to a competitive procurement even before it was legally authorized to do so by GSA, the exclusive controller of federal agencies' ADPE acquisition. Once GSA ____________________ 4 MCI, in its reply brief, argues that "[t]here is no legal requirement that participants in the Consolidated Local Telecommunications Services Program use the Program for international telecommunications service." GSA's December 20, 1989, directive that agencies participating in the program "should not procure their own vendor[s] for IDDD" is such a requirement. MCI has not produced any evidence that this directive was rescinded prior to August 5, 1993. granted that authorization -- indeed, directed that such a procurement be made -- the Peace Corps continued its efforts toward the required goal. To the extent that the Peace Corps might be deemed to have been in violation of a legal imperative, that situation did not occur until after MCI initiated its agency-level protest. Even in the relevant time period -- August 5 forward -- GSA believes that because the Peace Corps has been making appropriate progress toward a competitive award, the Peace Corps' failure to make such an award is reasonable. Finding 14. Given the agency's compliance with GSA's directive of August 5, we conclude that the protest allegation should be denied. Our finding that GSA has been responsible for the Peace Corps' acquisition of international telecommunications services also has overwhelming importance for the resolution of MCI's second protest count -- that because the Peace Corps' acquisition of ISVS from AT&T is void for lack of procurement authority, the agency must be required to buy ISVS under the DECCO contract until GSA grants a DPA for the competitive procurement and that procurement results in a contract award. The reason that the Peace Corps does not have a DPA for its current purchases of ISVS is that one is not needed; the agency is buying ISVS through GSA's Consolidated Local Telecommunications Services Program, and an acquisition of such services through that program does not require a DPA. FIRMR 201-20.305-1(c). As of November 15, GSA is prepared to continue to make these services available to the Peace Corps through the WITS contract. Finding 14. In resolving the case in this way, we do not address a contention made by MCI in its brief, that by failing to contemplate redesignation of the WITS IDDD carrier since 1985 (see Finding 3), "GSA has apparently been violating the law for a number of years." Protester's Brief at 17. A protest may challenge "any decision by a contracting officer alleged to violate a statute or regulation." 40 U.S.C. 759(f)(1) (1988). The decision that MCI attacks in this case is one made by a contracting officer of the Peace Corps. GSA's actions are beyond the scope of authority of the Peace Corps, and thus may not be reviewed by us in the context of this protest. LAGO Systems, Inc., GSBCA 11536-P, et al., 92-1 BCA 24,551, at 122,510, 1991 BPD 285, at 4-5. Decision The protest is DENIED. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ DONALD W. DEVINE ANTHONY S. BORWICK Board Judge Board Judge