MOTION FOR RECONSIDERATION DENIED: September 29, 1994 GSBCA 12680-C-R(12605-P) INFORMATION & TELECOMMUNICATIONS STRATEGIES JOINT VENTURE, Protester, v. DEPARTMENT OF THE NAVY, Respondent. Kenneth S. Kramer, Douglas W. Baruch, and Pamela A. Roth of Fried, Frank, Harris, Shriver & Jacobson, Washington, DC, counsel for Protester. Ellen D. Washington and M. Elizabeth Hancock, Information Technology Acquisition Center, Department of the Navy, Washington, DC, counsel for Respondent. Before Board Judges HENDLEY, VERGILIO, and GOODMAN. GOODMAN, Board Judge. On August 3, 1994, protester, Information & Telecommunications Strategies Joint Venture (ITS), timely filed a motion for reconsideration of our decision dated July 27, 1994, which denied protester's motion for payment of protest costs. By letter dated August 3, 1994, respondent, the Department of the Navy (Navy), stated that it did not oppose protester's motion for reconsideration. We deny the motion for reconsideration. Background On October 27, 1993, ITS and the Navy filed a joint motion to dismiss the underlying protest. In that motion, the Navy stipulated that protester was a "prevailing party" for purposes of an award of costs pursuant to 40 U.S.C. 759 and Board Rules 35-36,1 and further stipulated that there were irregularities in the Navy's evaluation of ITS' proposal, as alleged in count one of the protest complaint, and that these irregularities resulted in a materially prejudicial error in the Navy's evaluation of ITS' proposal. The Navy also conceded that ITS had validly extended its proposal, as alleged in count six of the protest complaint. The motion to dismiss also informed the Board that the Navy, the intervenor-awardee, Computer Data Systems, Incorporated (CDSI), and ITS had agreed to "certain remedial action." The Navy agreed that it would provide "necessary concurrences" for the remedial action, and that it would not "challenge or oppose ITS' claim for costs incurred in pursuing this protest provided only that those costs are of the type allowable in Board decisions. The Board will determine the reasonableness of the costs." Joint Motion to Dismiss at 1-2. No details of the remedial action were offered to the Board. The Board dismissed the protest. Information & Telecommunications Strategies Joint Venture, GSBCA 12605-P, 1993 BPD 315 (Oct. 27, 1993). Thereafter, the Board received protester's motion for costs, and respondent's response thereto, and reopened the record to allow the parties to submit additional evidence to support their stipulation that protester was a "prevailing party" and that protester had derived some benefit as a result of the protest. Protester and respondent then filed a joint stipulation, in which they informed the Board that: The "remedial action" referred to [in the motion to dismiss] took the form of an agreement between [the protester] and Intervenor . . . pursuant to which ITS received a substantial subcontract under the contract awarded by the Navy to CDSI. The Navy concurred with and consented to that agreement and the resultant subcontract. It was and is the intent and belief of the Navy and ITS that said agreement and the resultant subcontract are a substantial benefit that accrued to ITS as a result of the protest; and hence the parties renew their stipulation that ITS is a "prevailing party." Joint Stipulation at 1-2. On July 27, 1994, we issued our decision denying protester's motion for protest costs. We stated: An "appropriate interested party" is a "prevailing party," i.e., one that has succeeded on any significant ____________________ 1 58 Fed. Reg. 69,246, 69,264-65 (Dec. 30, 1993) (to be codified at 6101.35-36). issue in the litigation that achieves some of the benefit it sought in bringing suit. Protester crosses the threshold to a fee award of some kind if it satisfies the "significant issue" or "some benefit" standard. Under that standard, the litigant "must be able to point to a resolution of the dispute which materially alters the parties' legal relationship in a manner which Congress sought to promote in the fee statute." Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, 1989 BPD 121. Information & Telecommunications Strategies Joint Venture v. Department of the Navy, GSBCA 12680-C(12605-P), 1994 BPD 161 (July 27, 1994). We held that protester had failed to meet its burden of proof and that: the parties offer no explanation justifying the continued propriety of the protested award in light of the "irregularities" which the parties contend resulted in materially prejudicial error in the evaluation of protester's proposal. The record does not demonstrate that protester has prevailed on significant issues, or that protester has received from respondent a substantial benefit which materially alters the protester's competitive position. Based upon the record, we cannot conclude that ITS is an appropriate prevailing party for purposes of an award of costs pursuant to 40 U.S.C. 759 and Board Rules 35-36. Id. at 5. Protester brings its motion for reconsideration pursuant to Rules 32(a) and 33(a)(6), the latter of which provides for Board reconsideration on "any . . . ground justifying relief from the operation of the decision or order." Protester states that it "believes relief from the [Board's prior decision denying protester's motion for protest costs] is justified because that Opinion is based on an erroneous interpretation of the settlement agreement between the parties which forms the basis for ITS' entitlement to its protest costs." Motion for Reconsideration at 2, n.2. Protester further states that "the Board did not properly consider this substantial benefit to ITS as a result of the Protest and the conclusions of the Navy that necessarily formed the rationale for that benefit, and . . . the Board therefore improperly concluded that there was insufficient evidence demonstrating that ITS was a 'prevailing party'. . . ." Id. at 4. In Electronic Data Systems Corp. v. Department of State, GSBCA 11593-P-R, 92-1 BCA 24,763, 1992 BPD 27 (citations omitted), we stated that: Motions for reconsideration should not be routine requests of losing parties. Mere disagreement with the result of a decision, or the belief that the decision is in error does not warrant reconsideration. Nor will a request for reconsideration be granted on the basis of simple reiteration of arguments raised and rejected in the underlying decision. Protester reiterates and expands upon arguments previously made, to which we respond below. However, protester has raised no ground which merits reconsideration. Accordingly, we deny the motion for reconsideration. Discussion In its motion for reconsideration, protester argues that relief from this Board's previous decision is justified because of the Board's "erroneous interpretation of the settlement agreement between the parties." However, while the parties referred to "remedial action" in their joint motion to dismiss the protest, a written settlement agreement was not included in the record of this protest. After protester filed its motion for protest costs, protester and respondent were allowed the opportunity to supplement the record to support their stipulation that protester was a "prevailing party." They supplemented the record with information concerning the remedial action, which was a subcontract entered into between protester and the intervenor. This Board's previous decision was based upon the written record. As protester alleged on reconsideration that our previous decision had included an "erroneous interpretation" of the parties' settlement agreement, the Board requested clarification as to the existence of the settlement agreement. Protester informed the Board that "unfortunately that agreement was oral rather than written." Protester's letter to the Board (Aug. 24, 1994). Accordingly, protester's argument that we erroneously interpreted an agreement which was neither in writing nor included in the record of the case lacks merit, and is not a proper basis for reconsideration of our previous decision. Protester states that the Board did not properly consider the "substantial benefit to ITS as a result of the Protest and the conclusions of the Navy that necessarily formed the rationale for that benefit, and . . . the Board therefore improperly concluded that there was insufficient evidence demonstrating that ITS was a 'prevailing party'. . . ." Protester's Motion for Reconsideration at 4. Protester refers us to its protest complaint, in which it alleged that but for the Navy's improper actions, "ITS would have been selected for contract award." Protester contends that the Navy's stipulation of "irregularities in the Navy's evaluation of ITS' proposal . . . [which] resulted in materially prejudicial error in the evaluation of ITS' proposal" must be read in conjunction with this language in the complaint. We have previously held that we will not search a protester's pleadings to infer the meaning of a stipulation by the parties. Bedford Computer, GSBCA 9837-C(9742-P), 89-3 BCA 22,139. There is no affirmative statement in the parties' joint motion to dismiss that ITS would have been awarded the contract but for the Navy's "irregularities," nor did the remedial action take the form of a termination of the intervenor's contract and either an award to ITS or a reopening of the competition. Protester argues that the Navy's concurrence in the remedial action, which took the form of an award of a subcontract by the intervenor-awardee to the protester, is a "resolution of the protest which materially alters the parties' legal relationship." According to protester, the subcontract is evidence that protester achieved "some of the benefit" it sought when it brought the protest, and "the fact that the Navy settled this protest by permitting ITS to perform a significant amount of work under the contract compels a finding that ITS is a prevailing party within the meaning of the statute." Protester's Motion for Reconsideration at 4-5. ITS characterizes this subcontract as a "Navy-approved award (albeit by CDSI to ITS) of a significant portion of the work under the contract awarded to CDSI." Id. at 6. Thus, protester argues that "the Navy clearly altered its legal position as the result of the Protest. Wherein the Navy previously had determined that ITS was ineligible for any portion of the contract, the Navy agreed to permit ITS to perform a substantial amount of work under the contract." Id. at 7. The circumstances described by protester do not convince this Board that the parties have altered their legal relationship. The joint motion to dismiss references Navy "concurrence" in the remedial action. The Navy's letter, dated November 10, 1993, to the awardee reads, in relevant part: [C]onsent is hereby granted to enter into a subcontracting arrangement with ITS. . . . In accordance with the provisions of [Federal Acquisition Regulation] FAR 52.244-2,[2] this consent does not ____________________ 2 This regulation reads, in relevant part: (c) The Contractor shall obtain the Contracting Officer's written consent before placing any subcontract for which advance notification is required. . . . . (f) Unless the consent or approval specifically provides otherwise, neither consent by the Contracting (continued...) constitute a determination of the acceptability of any subcontract terms or conditions or the allowability of any cost incurred under this contract. Neither does this consent relieve your company, as the prime contractor, from any responsibility for performing under the contract. Joint Stipulation, GSBCA 12680-C(12605-P), Exhibit 2. The subcontract between protester and the awardee is not a "Navy-approved award." The Navy's award of the contract to CDSI remains in place, and CDSI is responsible for performing the contract. In consenting to the subcontract pursuant to FAR 52.244-2, the Navy is neither awarding the subcontract to ITS nor approving the terms and conditions of the subcontract.3 The Navy is not a party to the subcontract, and ITS is not in privity of contract with respondent. The subcontract between the awardee and protester is an agreement between two private parties which does not alter the legal relationship between the Navy and the protester. By stating that "the Navy settled this protest by permitting ITS to perform a significant amount of work under the contract," protester suggests that respondent would not have consented to a subcontract between CDSI and protester prior to the protest, and that the Navy's concurrence now indicates a change in the Navy's legal relationship between protester and the Navy. There is no indication in the record that the Navy would have withheld consent to such a subcontract had the protest not been filed.4 In the Joint Motion to Dismiss, the Navy agreed not to oppose protester's motion for protest costs, and the Navy has also not opposed protester's motion for reconsideration. We do not construe the Navy's lack of opposition to protester's motion for ____________________ 2(...continued) Officer to any subcontract nor approval of the Contractor's purchasing system shall constitute a determination (1) of the acceptability of any subcontract terms or conditions, (2) of the allowability of any cost under this contract or, (3) to relieve the Contractor of any responsibility for performing this contract. 3 The words "approved" and "approval" as used in FAR 52.442-2(f) refer to a previous approval of the contractor's purchasing system, which is not at issue. 4 The criteria for consenting to a subcontract are not the same criteria applied in evaluating a proposal for award of a prime contract. That an offeror has not been selected for award of a prime contract does mean that respondent must deny consent to a subcontract between an awardee and that offeror. reconsideration as affirming protester's speculation as to the Navy's actions. Where the parties determine that the Government may proceed with a defectively awarded contract, we are compelled to review that determination. It is the Board, not the parties, which is entrusted with discretionary authority to award costs. Bedford Computer Corp., GSBCA 9837-C(9742-P), 90-1 BCA 22,377, 1989 BPD 313. An overriding concern has been that an award of costs must further the goal of fostering full and open competition. Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, 1989 BPD 121. Protester contends that respondent's leaving the award to CDSI in place and concurring to the subcontract "fosters competition in that both ITS and CDSI now provide services to the Navy under the underlying services contract; and it remedies the errors the Navy acknowledges it made in proposal evaluation. Thus, in concluding that the Navy did not alter its position as a result of the Protest, the Board improperly overlooks these extremely significant competitive outcomes arising out of the settlement." Protester's Motion for Reconsideration at 7. Protester cites several cases in which a protester was awarded its protest costs from the permanent indefinite judgment fund after having proved that it had been improperly excluded from the competitive range. Valix Federal Systems Partnership I v. Department of Health & Human Services, GSBCA 12225-C(12023-P), 93-3 BCA 25,984, 1993 BPD 111; C3, Inc. v. Agency for International Development, GSBCA 10796-C(10647-P), 1992 BPD 169 (June 24, 1992). In these cases, unlike in the instant protest, full and open competition was furthered by protester having been restored as a participant in the competition and the continuation of the procurement. In C3, Inc., we noted that "we have never required the award of the disputed contract to a protester as a prerequisite to its status as a prevailing party. Rather, in awarding costs where the litigant has achieved only partial success, we have focused on the relevant statutory objective of fostering full and open competition." 1992 BPD 169, at 4 (citation omitted). In the instant protest, the award to intervenor remained in place, and the competition was not reopened. We do not view the subcontract between intervenor and protester, entered into after the Navy had awarded the prime contract to the intervenor, as a result of protester's participation in the competitive process for contract award. As the prime contract remains in place, and only CDSI is in privity with the respondent, we do not accept protester's characterization that ITS and CDSI now both provide services to the Navy under the "underlying services contract." The Navy has neither remedied its alleged errors nor altered its legal relationship with the awardee or the protester, yet it is willing to allow protester to recover its protest costs from the indefinite judgment fund. Under such circumstances, we do not believe that full and open competition has been furthered, nor can we find that the resolution of the protest has been accomplished in a manner which merits the award of costs of filing and pursuing the protest.5 Decision Protester's motion for reconsideration is DENIED. __________________________ ALLAN H. GOODMAN Board Judge We concur: __________________________ __________________________ JAMES W. HENDLEY JOSEPH A. VERGILIO Board Judge Board Judge ____________________ 5 Protester also refers to Zyga Corp., GSBCA 10059-P, 89-3 BCA __________ 21,988, 1989 BPD 169, where a stipulation by respondent that it had materially violated statute and regulation was sufficient for the Board to award protest costs. When the protest was settled, the procurement was substantially complete, and there was no realistic possibility of terminating the award or reopening competition. Respondent agreed to conduct a review of its contracting functions to prevent future violations. We found that "[g]iven the status of the underlying procurement . . . the goals of economic and efficient procurement . . . are furthered by the relief suggested . . . ." 89-3 BCA at 110,587, 1989 BPD 169, at 3. The circumstances in the instant procurement are substantially different. According to the instant protest complaint, the Navy had issued the solicitation more than two years before contract award. The solicitation described requirements for the base year plus four option years. The contract awarded on or about August 31, 1993, had a "total life cycle cost of $32,786,046 with a guaranteed minimum value of $1,600,000." The parties submitted their joint motion to dismiss less than two months after contract performance had commenced.