MOTION FOR STAY DENIED: April 6, 1994 GSBCA 12700-P-R STANLEY COMPUTER SYSTEMS, INC., Protester, v. DEPARTMENT OF THE TREASURY, Respondent, and ADVANCED MANAGEMENT, INC., Intervenor. Gerald N. Gordon and Charles J. Malaret of Sheppard, Mullin, Richter & Hampton, Los Angeles, CA, counsel for Protester. William P. McGinnies and Marc J. Weinberger, Office of the Chief Counsel, United States Customs Service, Department of the Treasury, counsel for Respondent. Claude P. Goddard, Jr., and Leslie H. Lepow of Jenner & Block, Washington, DC, counsel for Intervenor. Before Board Judges DANIELS (Chairman), HYATT, and GOODMAN. DANIELS, Board Judge. Advanced Management, Inc. (AMI), was an intervenor of right in a protest brought by Stanley Computer Systems, Inc. (Stanley), against the award of a contract by the Treasury Department's United States Customs Service (Customs). AMI has moved the Board to stay the effect of its decision, which granted the protest. The movant contended in its posthearing brief in that case, and has continued to contend subsequently -- first in responding to Customs' motion for reconsideration of the decision and more recently in filing an appeal with the Court of Appeals for the Federal Circuit -- that the Board lacks jurisdiction to consider the case. AMI now asks us to stay our decision until the Court of Appeals considers the jurisdictional question. We invited Stanley, Customs, and the General Services Administration (GSA) to respond to AMI's motion. (The Board had revoked GSA's delegation to Customs of authority to conduct the protested procurement; as a result, responsibility for completing the procurement reverted to GSA.) Stanley responded, opposing the motion. The two Government agencies chose not to respond. AMI properly notes that when a motion for stay is before the Board -- the moving party must demonstrate the following four factors: (1) a likelihood of prevailing on the merits on appeal, (2) irreparable injury if the stay is not granted, (3) no substantial harm to other interested parties, and (4) no harm to the public interest. Data Switch Corp., GSBCA 10034-P-R, 89-3 BCA 22,138, at 111,401, 1989 BPD 227, at 4 (quoting Amdahl Corp., GSBCA 7859-P, et al., 85-3 BCA 18,287, at 91,773, 1985 BPD 43, at 5). AMI maintains that each of these four factors is present here. We disagree. AMI focuses its argument on the first factor, a likelihood of prevailing on the merits on appeal. The Board has already held twice that this position is not meritorious. Stanley Computer Systems, Inc. v. Department of the Treasury, GSBCA 12700-P, 1994 BPD 34, at 21-23 (Feb. 16, 1994), aff'd on reconsideration, 1994 BPD 57 (Mar. 10, 1994). What AMI says in support of its motion for stay pending appeal misconstrues our analysis. We elaborate upon our reasoning in the hope that the reader may benefit from a further explication. The procurement at issue is for the provision to Customs of data entry and other computer support services in seventeen Eastern states, the District of Columbia, and Puerto Rico. 1994 BPD 34, at 2. The solicitation contemplated award of an indefinite quantity contract, under which the successful offeror would provide services in accordance with delivery orders issued by the agency. Id. at 2-3. Each offeror had to include in its proposal the resumes of key personnel, who had to be "available for full-time assignment under this contract on the effective date of the contract." Id. at 3-4. The solicitation further stated, [i]n support of these specifications, "The offeror and individual shall certify that . . . the individuals named shall be available for assignment on the date the contract is effective." Additionally, for all individuals who were not current employees of an offeror, the firm had to "include a letter of intent from the candidate indicating that he/she shall be available to start work within ten (10) working days after notification from the offeror." "All personnel positions . . . for which resumes were submitted for evaluation, must be available to commence work under this contract." Each offeror agreed that during a certain period of time at the inception of contract performance, "no personnel substitutions will be permitted unless such substitutions are necessitated by an individual's sudden illness, death or termination of employment." Id. at 4-5 (citations omitted). The last paragraph makes clear that Customs demanded receipt (at least for a period of time at the inception of contract performance) of the services of the same key personnel on whose availability proposal evaluation was based. To impress on offerors the importance of this requirement, and to gain assurance that those firms understood the commitment they were making, Customs directed that each proposal contain a certification from the offeror and each key person as to the individual's availability for work, and also a letter of intent as to availability from each such person. The Board determined that AMI ran afoul of the principal requirement set out above. The evidence showed that AMI "did not intend to honor its commitment to have the key personnel ready for work when contract performance began. This was a material misrepresentation which rendered invalid Customs' evaluation of proposals and determination that acceptance of AMI's offer would be most advantageous to the Government." 1994 BPD 34, at 19. AMI's misrepresentation undermined the integrity of the procurement process and statutory requirements for full and open competition, and therefore resulted in the unacceptability of its proposal. Planning Research Corp. v. United States, 971 F.2d 736 (Fed. Cir. 1992). Until the very end of the protest proceedings, the subsidiary requirement -- for certifications and letters of intent -- was not an issue. The Board found that "AMI and its proposed personnel made all the requisite certifications and promises for all twenty-three individuals identified in the AMI proposal as key personnel." 1994 BPD 34, at 16. Beginning with AMI's posthearing brief, however, AMI -- and later Customs -- have maintained that we should not have gone so far as to decide the protest on the merits. They urged us to dismiss the case for lack of jurisdiction, on the ground that defects in Stanley's certifications and/or letters of intent rendered protester's proposal ineligible for award, and thus made Stanley not an interested party to bring the protest. AMI and Customs have presented different reasons for this conclusion. AMI contends that Stanley's initial proposal contains improperly certified resumes (which were never corrected) and its best and final offer (BAFO) contains some resumes for which no letter of intent to accept an employment offer was provided. 1994 BPD 34, at 21. On motion for reconsideration, AMI maintained that the improperly certified resumes were immaterial, and that Stanley should have been disqualified solely because of the inadequate letters of intent in the BAFO. 1994 BPD 57, at 3. AMI has now reverted to its original position: the certifications and letters of intent were both faulty. Motion for Stay Pending Appeal at 7 n.4. Customs relied on a declaration from its contracting officer which made the determination that Stanley's proposal was ineligible for award because both the firm's initial proposal and BAFO contained improperly certified resumes. 1994 BPD 57, at 3. Contrary to what AMI says in its Motion for Stay, at 2, the contracting officer has never made a finding relating to letters of intent in Stanley's offer. Also contrary to AMI's argument, Motion for Stay at 3, holding a hearing to determine the contracting officer's reason for considering Stanley's proposal ineligible for award was unnecessary; the declaration is clear (though it does not say what AMI apparently wishes it did). At all times other than in AMI's response to Customs' motion for reconsideration, then, AMI and Customs have both alleged that errors in Stanley's certifications were so significant as to make the protester's proposal ineligible for award. As we have explained, the accuracy of this charge has nothing to do with our jurisdiction to hear the protest. If the allegation is correct, it is an admission that Customs conducted inadequate discussions with Stanley, in violation of 48 CFR 15.610(c)(2) (1993), as to the firm's initial proposal; the agency did not advise the offeror of a deficiency and provide an opportunity to correct it. Thus, Stanley should have a chance to revise its proposal before final evaluations are made. If the allegation is false, Stanley's proposal is eligible for award right now. 1994 BPD 34, at 22; 1994 BPD 57, at 2. In the Motion for Stay, at 7-8, AMI maintains that because Stanley never raised the sufficiency of discussions as a protest ground, the Board should not have considered it. This argument ignores the obvious: Stanley had no reason to plead this count because no one, up until AMI's posthearing brief, had ever alleged that there was anything wrong with Stanley's proposal. As far as protester was concerned, discussions as to deficiencies in the proposal had been unnecessary because no deficiencies existed. The sufficiency of discussions became an issue only as a defense to one possibility regarding Stanley's certifications -- that the certifications were fatally defective. Even now, Stanley does not believe that this possibility is viable. The Board has charged GSA or its delegee with determining whether the allegation is correct. 1994 BPD 34, at 25-26. If the certifications were faulty, even if the letters of intent were inadequate as well, that would not affect our jurisdiction to hear the case. Stanley would be entitled to benefit from discussions by submitting another BAFO, revised to correct deficiencies in the certifications. Thus, even if the certifications and letters of intent had nothing to do with each other, in revising the proposal, Stanley would be free to include different letters. We have found, however, that the certifications and letters are joint guarantees that an offeror will meet its obligation to make key personnel available for work at contract inception. They are so closely linked that discussions about one would inevitably put an offeror on notice that it should devote special attention to the other. Thus, we further concluded that discussions about the certifications would have alerted Stanley to the need to take extra care with the letters of intent in the new BAFO. 1994 BPD 57, at 4. What if the certifications were fine, though, but the letters of intent were so defective as to render Stanley's proposal ineligible? This is the only remaining possibility for defeating the Board's jurisdiction to consider Stanley's protest. It is a possibility that was not raised until AMI's response to Customs' motion for reconsideration. This occurred at a time so remote from the filing of the protest that the Board questioned, in resolving that motion, whether the matter should even be considered, given Congress' intent that bid protests not unduly disrupt or delay procurements. 1994 BPD 57, at 5. Against the prospect that the Court might conclude that notwithstanding the lateness of the allegation, we should determine whether AMI has uncovered a good ground for finding no jurisdiction, we have already concluded that alternative reasons for rejecting the allegation exist. First, during the procurement, Customs evaluated each offeror's promises of personnel availability by considering the certifications and letters of intent as a whole. Although Stanley's BAFO letters could have been more faithful to the words of the solicitation, the firm's certifications are sufficiently specific and certain as to permit the agency's original conclusion -- that taken together, the certifications and letters conveyed the requisite promise of personnel availability -- to be deemed reasonable. Second, any contrary conclusion may not be advanced by AMI because AMI did not give Customs any letters of intent; thus, if a failure to provide appropriate letters renders a proposal fatally defective, AMI's proposal was also ineligible for award. To avoid a chicken-and-egg problem (does AMI have status as an interested party to object to Stanley's being an interested party?), as well as to protect the integrity of the protest process, the Board consistently has refused to permit a party to espouse one interpretation of a solicitation provision during the procurement, and then argue later that the interpretation is unreasonable. Third, the requirement for the furnishing of letters of intent (which is clearly subsidiary to the critical requirement of furnishing promised personnel) has not been shown to be so important that -- especially in the absence of demonstrated prejudice -- failure to meet it may not be deemed a technical violation that did not invalidate the competitive nature of the procurement. 1994 BPD 57, at 5- 6.[foot #] 1 We remain convinced that our conclusion on jurisdiction is correct. We therefore find that AMI has not demonstrated that the first factor for granting its motion for stay is present -- AMI has not shown a likelihood of prevailing on the merits on appeal. AMI and Stanley have addressed only briefly the other factors which AMI must show as a prerequisite for our granting the motion. In our judgment, AMI has not demonstrated any of these factors. AMI believes that it will incur irreparable injury if the stay is not granted, because its contract will be terminated (in accordance with Board order) and it will lose the profits it would earn if it were allowed to continue performing the contract. The movant's position assumes that in the absence of a stay of the Board's order, Customs would permit AMI to keep its contract. We think a contrary conclusion is entirely possible: with the benefit of an independent adjudicator's determination that AMI would not have received the contract but for its material misrepresentations of personnel availability, the agency might well decide to terminate the contract even in the absence of an order to do so. Thus, AMI may suffer injury while the appeal is pending, whether we stay the effect of our order or not. On the other hand, if we stay the order and AMI is permitted to keep its contract while the appeal runs its course, Stanley (and possibly other offerors) would suffer substantial harm. The Board has authorized GSA to award the contract to Stanley or to permit further competition among offerors. 1994 BPD 34, at 25- 26. As long as AMI retains the contract, Stanley (and perhaps its competitors) would lose the right to this relief. ----------- FOOTNOTE BEGINS --------- [foot #] 1 In reaching these conclusions, we do not agree with AMI's characterization that we have transgressed on the agency's assessment of its needs. See Data General Corp. v. ___ _____________________ United States, 915 F.2d 1544, 1551-52 (Fed. Cir. 1990). In that _____________ decision, the Court of Appeals was referring to the agency's requirements for automatic data processing equipment; per 40 U.S.C. 759(e) (1988), GSA may not interfere with the determination of these requirements. Id. The instant case has ___ nothing to do with Customs' actual needs for the computer support services it is acquiring. Instead, the Board has been concerned with determining the meaning of solicitation provisions. 1994 BPD 57, at 6. ----------- FOOTNOTE ENDS ----------- Furthermore, as long as AMI retains the contract it secured through material misrepresentations, the public interest in the integrity of the procurement process and full and open competition will be damaged. The benefits to those objectives which the protest system is intended to achieve would be frustrated by a clear demonstration that a company which loses a contract through a protest proceeding may keep the contract (and the resulting profits) simply by appealing the Board's decision. Decision The Board would grant AMI's motion for a stay of our order in this case only if the movant could demonstrate four specified factors. We conclude that AMI has not shown any of the factors. We therefore DENY the motion. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ CATHERINE B. HYATT ALLAN H. GOODMAN Board Judge Board Judge