THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON NOVEMBER 10, 1994 ___________________________________________________ DENIED IN PART/DISMISSED IN PART: November 1, 1994 ___________________________________________________ GSBCA 12953-P LAPTOPS FALLS CHURCH, INC., Protester, and FEDERAL COMPUTER CORPORATION, Intervenor, v. DEPARTMENT OF JUSTICE, Respondent, and INTERNATIONAL DATA PRODUCTS, CORPORATION, Intervenor. Ross W. Dembling, Dorn C. McGrath III, Richard L. Moorhouse, Bruce E. Kasold, and William B. Canfield of Holland & Knight, Washington, DC; and Laura K. Kennedy and Kevin P. Connelly of Seyfarth, Shaw, Fairweather & Geraldson, Washington, DC, counsel for Protester. David S. Kovach, Falls Church, VA, counsel for Intervenor Federal Computer Corporation. Ross D. Cooper, Civil Division, Department of Justice, Washington, DC; and James Jasinski and Jack Cordes, Federal Bureau of Investigation, Department of Justice, Washington, DC, counsel for Respondent. Carl J. Peckinpaugh, Eric J. Marcotte, and Blaise A. Scinto of Winston & Strawn, Washington, DC; and Maria F. Glinsmann of International Data Products, Corporation, Gaithersburg, MD, counsel for Intervenor International Data Products, Corporation. Before Board Judges DANIELS (Chairman), HYATT, and DeGRAFF. DeGRAFF, Board Judge. Laptops Falls Church, Inc. (Laptops FC) protests the Department of Justice's (DoJ's) decision to award a contract to International Data Products, Corporation (IDP). Federal Computer Corporation (FCC) intervened on behalf of Laptops FC. We do not find that DoJ violated any statute or regulation in the course of conducting this procurement, and for this reason, the protest is denied. Findings of Fact The Solicitation On June 15, 1992, the Department of Justice (DoJ), Federal Bureau of Investigation (FBI), issued solicitation RFP-6178. Protest File, Exhibit 5. The solicitation explains that DoJ wished to enter into a requirements contract for portable microcomputers, associated peripherals, software, and firmware. Id. at 15. Section C of the solicitation describes the items which DoJ intended to purchase, and sets out the requirements which those items must meet. Several provisions contained in Section C are important to this protest: Section C.2.0, "Mandatory Portable Specifications," contains requirements for a battery pack for the portable computers. Protest File, Exhibit 36 at 9, 12. Section C.3.0, "Mandatory Input/Output Device Specifications," contains the mandatory requirements for a portable ink jet printer. Protest File, Exhibit 36 at 14. Section C.3.1.7 requires that the printer's power supply shall "support worldwide AC power adapter, autoranging 95V to 240V, 50 Hz to 60Hz AC input." Id. at 15. Section C.4.0, "Mandatory Software/Firmware Specifications," contains the mandatory software and firmware requirements. Section C.4.1.1 states, "The software and firmware operating environments and application packages listed below by vendor or product name are the desirable choices for use by the FBI for this solicitation and are generally in use throughout the FBI." One of the application packages listed is LapLink, which is electronic file transfer software. Protest File, Exhibit 36 at 17, 19. Section C.5.0, "Mandatory Functional Requirements," states, "The following sections outline the primary functions the FBI is looking to satisfy through this RFP." Section C.5.2.1 provides: Electronic file transfer (EFT) shall support the transfer of executable files in their original formats so that they remain as executable. The FBI recognizes that if a package proposed can support this function, it will support any of our other transfer requirements (i.e., transfer of a wordproces- sing document without loss of formatting, etc.). The EFT system shall also provide a migration path to the GOSIP FTAM standard. This migration will be necessary as the FBI moves to full GOSIP compliance. Protest File, Exhibit 36 at 20. Section C.7.2 requires the offerors to provide a certain number of problem determination procedures manuals, hardware operator manuals, and software user manuals at no cost, and to provide pricing for additional manuals. Protest File, Exhibit 36 at 25. Section C.10.0, "Evaluated Optional Device Features And Factors," describes items that DoJ expected to acquire, and that would be evaluated when determining price. One of these items is a tape backup system. Section C.10.1.8.4 states that one of the mandatory technical requirements for the tape backup system is a cassette unload push button. Protest File, Exhibit 36 at 34, 38. Section C.11, "Subjective Technical Factors," explains that the evaluation of proposals would be based upon an integrated assessment of the requirements and technological approaches set forth in the mandatory specifications, subjective technical factors, a possible live test demonstration, and life cycle costs. Section C.11 then explains each of the subjective technical factors (e.g., production capability) that would be considered in evaluating proposals. Protest File, Exhibit 36 at 43-45. Section C.12, "Availability of Hardware, Software And Firmware," provides that the hardware, software, and firmware proposed "shall be installed and operational in a customer's facility before the closing date of this solicitation . . . ." Protest File, Exhibit 36 at 45. Section I of the solicitation provides that several Federal Acquisition Regulation (FAR) clauses would be incorporated into the contract. Two of the clauses are FAR 52.225-3, Buy American Act - Supplies (Jan 1989), and FAR 52.225-9, Buy American Act - Trade Agreements Act - Balance of Payments Program (Apr 1991). Protest File, Exhibit 5 at 100. Section K of the solicitation contains several certifications that offerors were required to provide as part of their proposals. Section K.13 contains FAR 52.225-1, Buy American Certificate. Section K.14 contains FAR 52.225-8, Buy American Act - Trade Agreements Act - Balance of Payments Program Certificate. Both of these certificates require offerors to certify that "each end product," except those line items listed by the offerors, is a domestic end product. Protest File, Exhibit 5 at 121-22. Section L of the solicitation contains instructions, conditions, and notices to offerors. Section L.1.2.1 provides, "In order to have an acceptable proposal, the offeror must meet all of the mandatory specification requirements set forth in Section C of the Solicitation Document." Protest File, Exhibit 5 at 133. Section M of the solicitation, "Evaluation Factors For Award," explains that proposals must be prepared in accordance with the mandatory requirements contained in section C in order to be considered acceptable and eligible for evaluation. Section M states that the most important evaluation criterion is systems life cost/price. The only other evaluation criterion is evaluation of the subjective technical factors contained in section C.11. Section M explains that the subjective technical factors would be evaluated by a technical evaluation team, and that the results of this evaluation would be provided to the contracting officer. The contracting officer would then determine the appropriate trade-off between the two evaluation criteria, and award to the offeror whose proposal offered the greatest advantage to the Government. Section M provides that if two proposals were equal in technical merit, the contracting officer could use cost/price as the determining factor in selecting the successful offeror. The contracting officer could make an award either after receiving initial proposals, or after establishing a competitive range and conducting discussions. Protest File, Exhibit 11 at 106-11. Proposals, Evaluations, and Award In April 1993, IDP, FCC, and Laptops, Etc. submitted proposals in response to the solicitation which, at that time, incorporated amendments 1 through 8.[foot #] 1 Protest File, Exhibits 14-19. DoJ reviewed the proposals and sent written questions to the offerors. Id., Exhibits 20-22. In October 1993, the offerors responded to DoJ's questions. Id., Exhibits 23-29. On February 18, 1994, DoJ sent each offeror a copy of amendment 9, which reduced the variety of computers that DoJ wished to acquire, revised section C of the solicitation, and established March 18, 1994, as the date for submitting revisions to the technical and cost portions of the proposals. Id., Exhibits 36-38. ----------- FOOTNOTE BEGINS --------- [foot #] 1 Proposals were also submitted by other firms which did not participate in this protest. ----------- FOOTNOTE ENDS ----------- In March 1994, IDP, FCC, and Laptops, Etc. submitted revisions to the technical and cost portions of their proposals. Protest File, Exhibits 43-48. DoJ established a technical evaluation team that reviewed the technical portions of the proposals for compliance with section C of the solicitation. Id., Exhibit 75; Transcript at 26-30. DoJ sent written questions to the offerors on May 10, 1994, and the offerors responded on May 19 and 20, 1994. Protest File, Exhibits 49-58. The technical evaluation team concluded that all of the proposals met the mandatory requirements of the solicitation. Id., Exhibit 59 at 1. The team also evaluated the proposals according to the subjective technical factors contained in section C.11 of the solicitation, and prepared a report of its findings. The differences among the proposals were slight. FCC's proposal and Laptops, Etc.'s Proposals 1, 2, 4, and 7 exceeded or far exceeded nineteen of the subjective technical factors, and IDP exceeded or far exceeded eighteen of these factors. IDP met 106 of the subjective technical factors, Laptops, Etc.'s proposals met 104 of these factors, and FCC met 103 of these factors. The proposals were ranked as follows: 1. Offeror A 2. Laptops, Etc.'s Proposal 7 3. FCC 4. Laptops, Etc.'s Proposal 2 5. Laptops, Etc.'s Proposals 1 and 4 6. IDP 7. Offeror B Protest File, Exhibit 59; Transcript at 609-10. DoJ requested best and final offers (BAFOs) on May 27, 1994. Protest File, Exhibits 60-62. Laptops, Etc. submitted BAFOs for all four of its proposals on June 10, 1994. Id., Exhibits 63-67. FCC submitted its BAFO on June 10, 1994, and IDP submitted its BAFO on June 8, 1994. Id., Exhibits 68-69. The offerors' prices were as follows: $35,317,361.20 Offeror A $33,503,555 Laptops, Etc.'s Proposal 7 $29,696,265 Laptops, Etc.'s Proposal 2 $29,323,205 Laptops, Etc.'s Proposal 4 $28,364,950 Laptops, Etc.'s Proposal 1 $25,229,187 FCC $19,809,869 Offeror B $16,345,288.76 IDP Id., Exhibit 71. After examining the BAFO prices and technical rankings, the contracting officer asked the chairperson of the technical evaluation team if DoJ could justify paying the higher price proposed by any offeror other than IDP. The chairperson informed the contracting officer that, due to the small differences in the technical merits of the proposals, there was no basis for paying a price higher than that proposed by IDP. She felt that, based upon the modest differences in technical merit, a price premium of between $200,000 and $600,000 might have been warranted. At the hearing, the chairperson demonstrated a thorough understanding of the technical differences among the offerors' proposals and the significance of those differences. Transcript at 356-58, 586-92, 599. On July 29, 1994, the contracting officer signed a memorandum which explains why he decided to award the contract to IDP. The contracting officer examined the technical differences among the proposals, and concluded that those differences did not warrant paying a price higher than IDP's price. Protest File, Exhibit 70. An executed copy of the contract was sent to IDP on August 19, 1994, and FCC and Laptops, Etc. were informed of the award on this same date. Id., Exhibits 72-74. The Protest Laptops FC filed this protest on August 29, 1994. The complaint contained nine counts. Laptops FC amended the complaint on September 21, September 26, and October 3, 1994. The first amended complaint added Counts 10, 11, and 12. The second amended complaint added Count 13. The third amended complaint added to Count 6. Laptops FC withdrew Counts 1, 4, 5, and 10 before the hearing. In Count 2, Laptops FC alleges that DoJ violated statute and regulation when it selected IDP for award, because IDP failed to meet the mandatory requirements contained in sections C.3.1.7 (printer power adapter), C.5.2.1 (GOSIP compliance), C.10.1.8.4 (cassette unload push button), C.7.2 (pricing additional manuals), and C.12 (printer power adapter not installed and operational in a customer's facility). Laptops FC also alleges that IDP did not meet the requirements of the Trade Agreements Act because its computers, replacement battery packs, color monitor, AT keyboard, expansion station, auto/marine power adapter, serial interface boards, and memory upgrades consist of end products from non-designated countries.[foot #] 2 In Count 3, Laptops FC alleges that DoJ violated statute and regulation because it neither conducted an operational capability ----------- FOOTNOTE BEGINS --------- [foot #] 2 Laptops FC's complaint also alleged that IDP's carrying cases and fax modems did not meet the requirements of the Trade Agreements Act. At the prehearing conference, Laptops FC withdrew these allegations. No argument was presented concerning IDP's computers, color monitor, or expansion station, and we deem allegations concerning these items to have been abandoned. ----------- FOOTNOTE ENDS ----------- demonstration nor validated the mandatory hardware components for compliance with the requirements of the specification.[foot #] 3 Laptops FC alleges generally that software and firmware offered by IDP have not been installed and operational in a customer's facility as required by section C.12 of the solicitation. Specifically, Laptops FC alleges that IDP's proposal inaccurately states that the portable printer proposed by IDP comes "standard" with a power adapter that meets the requirements of section C.3.1.7, and that IDP's proposed tape backup system does not contain a cassette unload push button as required by section C.10.1.8.4 of the solicitation. In Count 6, Laptops FC alleges that DoJ violated statute and regulation by improperly evaluating Laptops, Etc.'s price and by not evaluating offerors' prices consistently and in accordance with the terms of section M of the solicitation. Laptops FC states that IDP did not provide pricing for additional software user and hardware operator manuals as is required by section C.7.2 of the solicitation. In Count 6, Laptops FC also alleges that IDP offered Microsoft MS-DOS as its operating system software and offered WordPerfect for Windows as its word processing software. Laptops FC alleges that DoJ should have realized that it would have to pay an additional amount to IDP for additional copies of Windows operating system software, in order to run the number of copies of WordPerfect for Windows word processing software proposed by IDP. In Count 7, Laptops FC alleges that DoJ violated statute and regulation by improperly determining that IDP's proposal was technically acceptable. Specifically, Laptops FC alleges that the printer power adapter offered by IDP does not meet the autoranging requirements of section C.3.1.7 of the solicitation, and that the tape backup system offered by IDP does not have a cassette unload push button as required by section C.10.1.8.4. In Count 8, Laptops FC alleges that IDP's computers, replacement battery packs, color monitor, AT keyboard, expansion station, auto/marine power adapter, serial interface boards, and memory upgrades consist of end products from non-designated countries, and that DoJ did not properly evaluate IDP's proposal for compliance with the Trade Agreements Act. In addition, Laptops FC avers that DoJ's method of evaluating IDP's proposal violates the Trade Agreements Act and its implementing regulations. In Count 9, Laptops FC alleges that DoJ violated statute and regulation because it relaxed the specifications for IDP. Laptops FC alleges that this relaxation occurred when DoJ accepted products from IDP that are not compliant with the Trade ----------- FOOTNOTE BEGINS --------- [foot #] 3 No evidence was introduced and no argument was made concerning the need for a demonstration or validation. We deem the issue abandoned. ----------- FOOTNOTE ENDS ----------- Agreements Act, and when DoJ accepted electronic file transfer software from IDP that does not meet the requirements for GOSIP compliance contained in section C.5.2.1 of the solicitation. In Count 11, Laptops FC alleges that IDP materially misrepresented the country of origin of its battery packs. In Count 12, Laptops FC alleges that DoJ violated statute and regulation because it effectively amended the solicitation without notifying all offerors of its changed requirements. This allegation is based upon DoJ's acceptance of the electronic file transfer software offered by IDP. The complaint alleges that this software does not meet the solicitation's GOSIP requirements. In Count 13, Laptops FC alleges that DoJ violated statute and regulation by accepting IDP's best and final offer because the offer is ambiguous as to the prices for the additional software user manuals required by section C.7.2 of the solicitation. FCC filed its notice of intervention on September 13, 1994, and adopts the protest grounds raised by Laptops FC. FCC also alleges that DoJ did not evaluate proposals as required by section M of the solicitation, because DoJ made its award decision based upon price alone, and not based upon a consideration of both technical merit and price. FCC did not file a notice of intervention adopting Counts 10 through 13 as grounds of protest. FCC did not participate in the hearing and did not file a brief. FCC asks that the Board decide the case based upon the record. C.3.1.7 and C.12 (Printer Power Adapter) In its response to section C.3.1.7, IDP proposed a Kodak Diconix 180si printer. IDP stated that the printer "comes standard with an AC power adapter with autoranging 95V to 240V, 50-60Hz AC input." Protest File, Exhibit 48 at 98-99. The Kodak printer does not come equipped by Kodak with such an adapter. What IDP meant when it stated that its printer would come "standard" with the adapter is that IDP would include a transformer and several different plugs in order to cover a range of voltages and different types of electrical outlets. This is how IDP equips this printer when it sells it for worldwide use. Transcript at 689-91. IDP did not understand section C.3.1.7 to require offerors to supply adapters that autoranged through the entire spectrum of 95V to 240V, because this would be "nonsensical." Id. at 722. In countries which nominally supply 110-115 volts as a standard, the actual voltage will vary, ranging around 110-115 volts. Similarly, in countries which supply nominally 220-240 volts as a standard, the actual voltage will vary, ranging around 220-240 volts. An IDP witness testified that he would never think that an adapter would have to autorange in order to allow for 170 volts, for example, because "[y]ou're not going to have power out there anywhere that's 170 volts or 150 volts." Id. at 720-22. In its response to section C.3.1.7, FCC also proposed a Kodak Diconix 180si printer. FCC stated, "The Kodak Diconix 180si supports worldwide AC power, from 95V to 240V, 50 to 60Hz. Two AC adapters are being offered, the 120 volt version and the 220-240 volt version. Each version supports the cycling rating of its respective voltage." Protest File, Exhibit 47 at 36. In the view of the chairperson of DoJ's technical evaluation team, the requirement of section C.3.1.7 to "support" the printer power adapter means that vendors had to supply a printer that could be used in conjunction with an adapter, and does not mean that vendors had to supply the adapter itself. Transcript at 94- 96. C.5.2.1 (GOSIP Compliance) The Government Open Systems Interconnection Profile (GOSIP) is a set of data communication protocols promulgated by the Department of Commerce, that are designed to enable computer systems at different government agencies to exchange information. Compliance with GOSIP is required only if an agency is purchasing computer networking products and services. Protest File, Exhibit 77 at 4. The minicomputers being purchased by DoJ are not networking products. Transcript at 568. Because of the FBI's security concerns, it has not yet decided how or whether it will open its systems to other government agencies. For this reason, GOSIP compliance is a future FBI requirement. Transcript at 565-66. On April 9, 1993, DoJ issued amendment 8, which provides, "The Government releases vendors from providing a GOSIP FTAM standard to be provided with an Electronic File Transfer (EFT) program. An (EFT) [sic] program is still a mandatory requirement for this solicitation reference section C.4.3.8." Protest File, Exhibit 13 at 12. On February 18, 1994, DoJ issued amendment 9, which contains a revised version of section C. The cover page to amendment 9 states, "The attached Section C replaces all previous editions." Neither the last two sentences of section C.5.2.1, which contain the GOSIP requirement, nor amendment 8 were revised by amendment 9. Protest File, Exhibits 36-38. DoJ did not consider the last two sentences of C.5.2.1 as part of its evaluation of proposals. Transcript at 54. The requirement of section C.5.2.1 that an offeror's EFT "system" provide a "migration path" to GOSIP means that the offeror's system must be able to permit the FBI to move to GOSIP when the FBI decides how it will open its systems. Transcript at 565-67; Protest File, Exhibit 225 at 3. An EFT system consists of hardware, operating software, and application software. If DoJ decides that it wants to move to GOSIP, IDP's EFT system will permit that change to be made. Transcript at 694-95. FCC and IDP interpreted the solicitation as not requiring offerors to supply GOSIP-compliant EFT software, and both FCC and IDP offered LapLink, which is not GOSIP-compliant, as their EFT software. Transcript at 697; Protest File, Exhibits 6A at 5, 47 at 46, 48 at 107, 225 at 3. C.10.1.8.4 and C.12 (Cassette Unload Push Button) In response to section C.10.1.8, IDP proposed the IOMEGA Tape 250 PPI tape drive. Protest File, Exhibit 48 at 146. This tape drive, as made by IOMEGA, does not include a cassette unload push button. Transcript at 698. FCC's tape drive includes such a push button. Protest File, Exhibit 47 at 102-03. Due to changes in technology, cassettes no longer have to be inserted completely into a tape drive. Instead, cassettes are partially inserted and, on a tape drive such as the IOMEGA, there is no need for an unload push button. DoJ determined that the IOMEGA tape drive did not need a cassette unload push button. Protest File, Exhibit 48 at 147; Transcript at 70-71, 699. C.7.2 (Pricing Additional Manuals) DoJ provided the offerors with detailed directions, including a list of Contract Line Items Numbers (CLINs) and quantities, for preparing their BAFOs. The directions explain that CLINs 4001 through 4009 "are for the additional manuals above the quantities that are to be delivered at no cost as specified in Sections C.7.2.1 thru C.7.2.5." CLINs 4001 through 4009 are nine problem determination manuals required by section C.7.2. There are no other CLINs for any other manuals. Protest File, Exhibits 60-62. IDP understood the May 27, 1994 BAFO directions as not requiring IDP to submit pricing information for manuals other than those listed in CLINs 4001 through 4009. Transcript at 122- 23. When IDP and FCC prepared their BAFOs, they included prices only for the nine problem determination manuals identified as CLINs 4001 through 4009, and did not list unit prices for any other manuals. Protest File, Exhibits 68 at 11, 69 at 26-27, 29. Trade Agreements Act In its March 18, 1994 revised proposal, IDP stated that its AT keyboards are manufactured in Korea, its serial interface boards are manufactured in Taiwan, its memory upgrades are manufactured in Taiwan, its auto/marine power adapters are manufactured in China, and its replacement battery packs are manufactured in Taiwan. Protest File, Exhibit 48 at 58-61. In its June 8, 1994 BAFO, IDP priced the AT keyboards at $18,508; the serial interface boards at $11,424; the 2MB RAM upgrades at $19,824; the 4MB RAM upgrades at $160,475; the auto/marine power adapters at $106,294; and its replacement battery packs at $355,206. Id., Exhibit 69 at 28. These prices are for the total quantities specified in DoJ's BAFO directions. Id., Exhibit 62. At the hearing, an IDP witness testified that its replacement battery packs will be purchased from FEDCO, a United States company. Transcript at 183. The witness's testimony is supported by a letter to IDP from FEDCO dated March 15, 1994, which contains price quotes for battery packs. Protest File, Exhibit 205. The parties stipulated that one FEDCO battery pack that an IDP witness brought to the hearing contained battery cells manufactured in a non-designated country. Transcript at 727-28. However, IDP contacted FEDCO on October 5, 1994, and FEDCO guaranteed IDP that it would supply battery cells manufactured in the United States or a designated country. Id. at 703-04. Pursuant to that conversation, FEDCO sent a letter to IDP stating that FEDCO can supply battery packs which contain battery cells from Japan or the United States. Protest File, Exhibit 227. IDP will direct FEDCO to be certain to provide battery packs which are compliant with the Trade Agreements Act. Transcript at 706. IDP says that the March 18, 1994 revision to its proposal mistakenly identifies Taiwan as the country of origin of its battery packs, and IDP offers an explanation of how this mistake occurred. Transcript at 163-81. In an earlier version of its proposal, submitted before amendment 9 was issued, IDP offered several types of microcomputers (including an 86NB2) and several battery packs, including battery packs which IDP's Trade Agreements Act certification identified as being from Taiwan. Protest File, Exhibit 29 at 34-36, 143, 145. In its March 18 revised proposal, IDP changed the type of microcomputer that it was offering (to a DGI 486) and changed the type of battery packs that it was offering. Id., Exhibit 48 at 75, 168, 170. IDP realized that, because the price of the battery packs in its March 18 revision exceeded the Trade Agreements Act's dollar threshold (currently $182,000), IDP needed to supply battery packs from either the United States or a designated country, and IDP intended to supply compliant batteries. IDP, however, neglected to amend its Trade Agreements Act certification to delete the reference to battery packs. Transcript at 175-81. As a result, IDP's March 18, 1994 certification states that the battery packs are being supplied for the 86NB2 microcomputer, even though IDP no longer proposed to supply the 86NB2 microcomputer. Also, the certification states that the value of the battery packs is below the Trade Agreements Act dollar threshold, even though the value of the battery packs is above that threshold. The battery packs described in the March 18, 1994 revised proposal are not listed in the Trade Agreements Act certification. Protest File, Exhibit 48 at 58, 170, 175, 180. When DoJ evaluated offers for compliance with the Trade Agreements Act, it determined the country of origin for each contract line item. For each line item from a non-designated country, DoJ determined whether the value of the line item exceeded the dollar threshold established by the United States Trade Representative. If a line item from a non-designated country exceeded the dollar threshold, DoJ then determined whether the line item was an end product or a component. If a line item was an end product from a non-designated country and if its value exceeded the dollar threshold, DoJ concluded that the offer was not compliant with the Trade Agreements Act. Protest File, Exhibit 92 at 5-6. DoJ concluded that the replacement battery packs were components, not end products, and evaluated IDP's battery packs assuming they would be from Taiwan. Transcript at 250. Timeliness/Windows and MS-DOS DoJ's BAFO directions instructed the offerors to provide prices for 8,708 copies of operating environment software, 320 copies of Windows operating environment software, and 8,883 copies of wordprocessing software. Protest File, Exhibits 60-62. IDP's BAFO priced 8,708 copies of Microsoft MS-DOS operating environment software, 320 copies of the Windows operating environment software, and 8,883 copies of WordPerfect for Windows wordprocessing software. Id., Exhibit 69 at 19. On August 19, 1994, DoJ informed Laptops, Etc. that IDP's evaluated systems life value was $14,867,956.99. Protest File, Exhibit 72 at 1. On September 13, 1994, DoJ provided counsel for Laptops FC, under Board protective order, with IDP's proposal as part of the protest file. The proposal shows the number of copies of MS-DOS operating system software, Windows operating system software, and WordPerfect for Windows wordprocessing software that IDP intended to provide. The proposal also contains a price of $16,345,288.76 (discounted to a present value of $14,867,956.99). Id., Exhibit 69 at 29. Also on September 13, 1994, DoJ provided counsel for Laptops FC, under Board protective order, with DoJ's source selection documents. These documents show that DoJ used IDP's price of $16,345,288.76 for evaluation purposes. Id., Exhibit 71 at 2, 3. Interested Party This protest was filed by Laptops FC, which did not submit a proposal in response to the solicitation. Laptops, Etc. submitted four proposals in response to the solicitation. All of the certifications required by section K of the solicitation were signed on behalf of Laptops, Etc. Protest File, Exhibits 14-17, 43-46. Laptops, Etc. was incorporated in 1985 as New Perspectives, Inc., and in April 1989, the name of the company was changed to Laptops, Etc. Corporation. In October 1990, Laptops, Etc. filed a Chapter 11 bankruptcy petition, and the bankruptcy proceeding is still pending. Laptops, Etc. continues to conduct business. Transcript at 615-17. The owner and president of Laptops, Etc. is also the president of Laptops FC. Laptops FC was incorporated in 1985 as Business Libraries, Inc. In 1988, Business Libraries, Inc. did not renew its corporate registration. In early 1990, Business Libraries, Inc. was reinstated as a registered corporation, and a few months later, the name of the company was changed to Laptops Falls Church, Inc. Transcript at 617-19. Some time after April 1993, Laptops FC registered with the State of Virginia to do business under the name of Laptops, Etc. Id. at 619-22. According to a Dun & Bradstreet Business Information Report prepared on September 21, 1994, Laptops, Etc. operates as a wholesaler of microcomputers and peripherals, and Laptops FC operates as a retailer of laptop computers and peripherals and also services laptop computers. The report states that Laptops, Etc. is an affiliate of Laptops FC, and intercompany relations consist of "merchandise transactions and service transactions." Protest File, Exhibit 208. Discussion Before we turn to the merits of the protest, we address two threshold issues. We decide that Laptops FC is not an interested party to pursue this protest. Also, we decide that the part of Count 6 which challenges DoJ's evaluation of IDP's proposed prices for the Windows operating system is untimely. Regarding the merits, we do not find that DoJ violated any statute or regulation in conducting this procurement. The printer adapters and electronic file transfer software proposed by IDP meet the requirements of the solicitation. Either the tape drive proposed by IDP meets the requirements of the solicitation or, if the requirements are not met, the violation of regulation does not warrant granting the protest. IDP provided pricing for its manuals as directed by DoJ. DoJ properly applied the provisions of the Trade Agreements Act and its implementing regulations. Finally, DoJ evaluated the price and the technical merit of the proposals in accordance with the terms of the solicitation. Interested Party Our authorizing legislation provides that, upon the request of an interested party, we may review a decision by a contracting officer. A party is not "interested" unless it is "an actual or prospective bidder or offeror . . . ." 40 U.S.C. 759(f)(1), (9)(B) (1988). Laptops FC, the party that filed this protest challenging the contracting officer's decision, did not submit a proposal in response to the solicitation. Although Laptops, Etc. submitted four proposals, Laptops, Etc. did not file a protest. IDP asserts that Laptops FC cannot maintain this protest because it is not an interested party. IDP points out that Laptops, Etc. and Laptops FC were incorporated separately and are two separate legal entities. Laptops, Etc. is currently subject to the jurisdiction of a bankruptcy court. Laptops, Etc. is a wholesaler of computers, and Laptops Falls Church, Inc. is a retailer of computers. As for Laptops FC's registration to do business as Laptops, Etc., IDP notes that this registration occurred after proposals were submitted. Laptops FC chose to introduce no evidence concerning its status as an interested party, despite the fact that IDP made it clear, before the hearing, that it intended to challenge Laptops FC's status. Laptops FC did not address this issue in its opening post-hearing brief. In its reply brief, Laptops FC makes two arguments in support of its position that it is an interested party. First, Laptops FC argues that IDP's challenge is actually a challenge to Laptops FC's responsiveness, and not to Laptops FC's status as an interested party. We disagree. IDP is not challenging whether Laptops FC was responsive to the solicitation. Instead, IDP is quite plainly challenging whether Laptops FC is capable of maintaining this protest. Second, Laptops FC directs our attention to Laptops Falls Church, Inc., GSBCA 11322-P, 91-3 BCA 24,328, 1991 BPD 195, in support of its contention that it is an interested party. In that case, the agency agreed to take voluntary corrective action, and Laptops FC withdrew its protest. An intervenor challenged Laptops FC's status as an interested party, and the Board held that the issue was moot because the protest had been withdrawn. The Board commented, in dicta, that Laptops FC had provided information which led the Board to conclude that Laptops FC and Laptops, Etc. were one entity. The opinion in our prior case provides no support for Laptops FC's position. The Board did not hold that Laptops FC was an interested party. Instead, the Board held that the issue was moot. Also, whatever information led the Board to comment that Laptops FC and Laptops, Etc. were one entity is not evidence of record in the present protest. Finally, whatever information was previously provided to the Board is contradicted by the evidence presently before us. Laptops FC provides no other argument in support of its assertion that it is an interested party. Generally, it is not appropriate to disregard the legal distinction between a corporation and its shareholders or between one corporation and another. Courts will sometimes disregard this distinction in order to "prevent fraud, illegality, or injustice, or when recognition of the corporate entity would defeat public policy or shield someone from liability for a crime." Zubik v. Zubik, 384 F.2d 267 (3d Cir. 1967), cert. denied, 390 U.S. 988 (1968), cited with approval in Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544 (Fed. Cir. 1990); Minnesota Mining and Manufacturing Co. v. Eco Chem, Inc., 757 F.2d 1256 (Fed. Cir. 1985). When courts have decided that a corporation is the alter ego of an individual or of another corporation, they have been presented with sufficient evidence to establish that the corporate form should be disregarded. McCall Stock Farms, Inc. v. United States, 14 F.3d 1562 (Fed. Cir. 1993); Minnesota Mining. We will not disregard the legal distinction between Laptops FC and Laptops, Etc. We are not presented with a case of fraud, illegality, or injustice, and there is no public policy at stake here which suggests that we should treat Laptops FC and Laptops, Etc. as one and the same corporation. Also, the evidence before us does not provide any basis for disregarding the legal distinction between Laptops FC and Laptops, Etc. These entities were incorporated separately and conduct business separately. There is obviously not a complete overlap of the two corporations' financial affairs, given that only one corporation, Laptops, Etc., filed a bankruptcy petition. Laptops FC provided us with no evidence to establish its status as an interested party. For this reason, Laptops FC's protest is dismissed.[foot #] 4 FCC is an interested party to pursue this protest because it submitted a proposal in response to the solicitation, and it filed a timely notice of intervention. FCC, however, did not join with Laptops FC in pursuing Counts 10 through 13, and so FCC cannot pursue the grounds of protest contained in these counts. FCC did not object to Laptops FC abandoning parts of Counts 1 through 9, so FCC is entitled to pursue Counts 1 through 9 only insofar as those grounds were not abandoned by Laptops FC. See Electronic Data Systems Corp. v. Department of the Air Force, GSBCA 12300-P, 93-3 BCA 26,053, 1993 BPD 128. Timeliness/Windows and MS-DOS Count 6 alleges, in part, that DoJ's price evaluation was defective because DoJ did not recognize that it would have to pay IDP an additional amount to purchase additional copies of Windows operating system software. Both DoJ and IDP assert that this portion of Count 6 was not timely filed. FCC's challenge to DoJ's price evaluation can be no more timely than Laptops FC's challenge, because FCC's challenge is the result of its intervention in Laptops FC's protest. For this ----------- FOOTNOTE BEGINS --------- [foot #] 4 Our appellate authority has suggested that perhaps Article I courts lack the authority to decide that one corporation is the alter ego of another. McCall Stock Farms, ____________________ Inc. v. United States, 14 F.3d 1562, 1567 (Fed. Cir. 1993). No ______________________ party has addressed whether a board of contract appeals possesses such authority, and we do not resolve this issue here. ----------- FOOTNOTE ENDS ----------- reason, we consider the facts as they were known to Laptops FC when we examine timeliness. In order to challenge DoJ's price evaluation of IDP's proposal concerning the number of copies of the Windows operating system software offered by IDP, it was necessary for Laptops FC to know what IDP proposed and to know the price used by DoJ in selecting IDP for award. Both IDP's proposal and DoJ's source selection documents were made available to counsel for Laptops FC on September 13, 1994. These documents contain all of the information needed to support the challenge concerning DoJ's evaluation of the price of IDP's Windows operating system software. Laptops FC filed the amended protest complaint containing this portion of Count 6 on October 3, 1994, more than ten working days after the basis for the ground of protest was known or should have been known. For this reason, the portion of Count 6 that alleges that DoJ's price evaluation was defective because DoJ did not recognize that it would have to pay an additional amount to IDP for additional copies of Windows operating system software is untimely filed.[foot #] 5 Rule 5(b)(3). C.3.1.7 and C.12 (Printer Power Adapter) Counts 2 and 3 challenge whether the adapters that IDP proposes to supply have been installed and operational in a customer's facility as required by section C.12 of the solicitation. The evidence of record establishes that IDP has sold the Kodak printer equipped for worldwide use with the adapters that it proposes to supply to DoJ. There is no evidence to the contrary. Thus, IDP meets the requirement contained in section C.12. Counts 2 and 7 allege that IDP does not meet the requirements of section C.3.1.7, because IDP is not proposing to supply power adapters that autorange between 95 volts and 240 volts. We disagree, for two reasons. First, section C.3.1.7 requires offerors to propose a printer with a power supply that can "support" an autoranging adapter. DoJ interprets this as requiring offerors to propose to supply a printer that can be used in conjunction with an adapter, and not as requiring offerors to propose to supply an adapter. This is a proper reading of the language of section C.3.1.7, and a reading which is supported by precedent. Andersen Consulting, GSBCA 10833-P, 91-1 BCA 23,474, 1990 BPD 396, aff'd, Andersen Consulting v. United States, 959 F.2d 929 (Fed. Cir. 1992). If we read section C.3.1.7 to require IDP to propose to supply a ----------- FOOTNOTE BEGINS --------- [foot #] 5 We thus do not decide whether, in fact, IDP's proposal proposes too few copies of Windows operating system software. ----------- FOOTNOTE ENDS ----------- printer that can be used in conjunction with an adapter, we have no evidence to suggest that IDP fails to meet this requirement. Second, if section C.3.1.7 requires offerors to supply adapters, IDP reads section C.3.1.7 as requiring adapters which autorange around 110-115 volts and 220-240 volts, and not as requiring adapters which autorange through all voltages between 95 volts and 240 volts. Regardless of whether IDP's reading of the solicitation is correct, it is a reading about which FCC cannot complain, given that FCC also proposed to supply adapters which, similar to IDP's adapters, autorange around 120 volts and 220-240 volts. C.5.2.1. (GOSIP Compliance) Counts 2 and 9 allege that IDP does not meet the requirements of section C.5.2.1 and that DoJ relaxed the specification requirements by accepting IDP's proposed EFT software, because IDP's software does not comply with GOSIP. The solicitation, however, does not require offerors to supply EFT software which is GOSIP-compliant. Although the last two sentences of section C.5.2.1 contain a GOSIP requirement, amendment 8 to the solicitation released offerors from meeting the requirement contained in these sentences. Amendment 9 made no revision to section C.5.2.1, and neither did it change the terms of amendment 8. The evidence of record does not establish that IDP was required to meet the GOSIP requirement contained in section C.5.2.1, or that DoJ relaxed the requirements of the specification. In addition, disregarding amendment 8, section C.5.2.1 requires that an offeror's "EFT system" shall provide a "migration path" to GOSIP, and does not require an offeror's EFT software to be GOSIP-compliant. IDP's EFT system, consisting of hardware, operating software, and application software, does provide a migration path to GOSIP. Finally, because FCC proposed the very same EFT software that IDP proposed, FCC cannot complain about the manner in which IDP proposes to meet the requirements of the solicitation. C.10.1.8.4 and C.12 (Cassette Unload Push Button) Counts 2, 3, and 7 allege that IDP does not meet the requirements of sections C.10.1.8.4 and C.12 because its tape drive does not have a cassette unload push button. Section C.10 lists the evaluated optional items that DoJ expects to acquire, including a tape backup system. Section C.10.1.8.4 explains that the tape backup system is required to have a push button to be used for unloading cassettes. Due to changes in technology, some tape drives, such as the one offered by IDP, do not need a cassette unload push button. IDP clearly stated in its proposal that it did not intend to supply a tape drive with a cassette unload push button because the tape drive that it proposes to supply does not require a push button to achieve the required functionality. DoJ determined that IDP's tape drive does not need a push button in order to unload cassettes. As a result, DoJ found that IDP's response to section C.10.1.8.4 was acceptable. Because no push button was necessary, not proposing a push button was consistent with DoJ's view of the requirement contained in section C.10.1.8.4, and we cannot say that DoJ's view of its requirements is incorrect. Executone Information Systems, Inc. v. Department of Health and Human Services, GSBCA 12402-P, 94-1 BCA 26,274, 1993 BPD 203. Even if DoJ's view of section C.10.1.8.4 is incorrect, if IDP's tape drive fails to meet the requirement of this section simply because it does not contain an unnecessary push button, this would not warrant granting the protest. The requirement for a push button, in the scheme of this procurement, is insignificant, and it would be contrary to the goals of economic and efficient procurement established by the Brooks Automatic Data Processing Act, 40 U.S.C. 759 (1988), if we were to overturn the award to IDP based upon the fact that its tape drive lacks a redundant cassette unload push button. Andersen Consulting. C.7.2 (Pricing Additional Manuals) Counts 2 and 6 allege that IDP does not meet the requirements of section C.7.2 and that DoJ did not properly evaluate offerors' proposed prices, because IDP did not provide pricing for all of the manuals required by section C.7.2. The BAFO directions provided by DoJ listed the manuals that offerors were supposed to price in their BAFOs. It is legally insignificant that these directions were not incorporated into the solicitation by an amendment. PRC Kentron, Inc., B-230212, 88-1 CPD 537 (June 7, 1988). IDP and FCC provided pricing for manuals in accordance with DoJ's BAFO directions. That is, they provided pricing only for the manuals identified in CLINs 4001 through 4009, and not for other manuals. Because FCC prepared its BAFO as did IDP, FCC cannot complain that IDP failed to meet the requirements of section C.7.2. There is no evidence that DoJ evaluated IDP's price differently than it evaluated FCC's price, and so there is no basis for FCC complaining that DoJ improperly evaluated offerors' proposed prices. Trade Agreements Act Counts 2, 8, and 9 allege that IDP's proposal does not comply with the provisions of the Trade Agreements Act and implementing regulations, because IDP proposes to supply end products from non-designated countries; that DoJ relaxed the specification requirements by agreeing to accept end products from non-designated countries; and that DoJ improperly evaluated IDP's offer for compliance with the Trade Agreements Act. During the course of the protest, these allegations evolved into a challenge to the fact that DoJ applied the Trade Agreements Act on a line item by line item basis, and a challenge to the country of origin of the battery packs proposed by IDP. The Buy American Act provides that, with certain exceptions, only articles, materials, and supplies which have been mined, produced, or manufactured in the United States shall be acquired for public use. 41 U.S.C. 10a (1988). The Trade Agreements Act provides that "the President may waive, in whole or in part, with respect to eligible products of [designated foreign countries] and suppliers of such products, the application of any law, regulation, procedure, or practice regarding Government procurement that would, if applied to such products and suppliers, result in treatment less favorable than that accorded [to products and suppliers of certain other countries, including the United States]." 19 U.S.C. 2511(a) (Supp. 1993). The contract incorporates 48 CFR 52.225-3 (1993)[foot #] 6 (FAR 52.225-3) which provides that, in accordance with the Buy American Act, Government contractors shall deliver only domestic end products, unless the cost of those products is unreasonable. The regulation defines "end products" as "those articles, materials, and supplies to be acquired for public use under this contract." The regulation defines "components" as "those articles, materials, and supplies incorporated directly into the end products." FAR 25.105 explains how to evaluate an offer in order to determine if the cost of a domestic end product is unreasonable, and provides that such an evaluation "shall be applied on an item-by-item basis or to any group of items on which award may be made as specifically provided by the solicitation." The contract also incorporates 48 CFR 52.225-9 (1993)[foot #] 7 (FAR 52.225-9) which provides, "The Contracting Officer has determined that the Trade Agreements Act applies to this acquisition. Unless otherwise specified, the Act applies to all items in the schedule." FAR 52.225-9 provides that the contractor will deliver and supply end products which comply with the requirements of the Trade Agreements Act, and states that offers will be evaluated in accordance with subpart 25.4 of the FAR. Subpart 25.4 of the FAR explains that Government agencies will evaluate offers without regard to the provisions of the Buy American Act if "the value of the proposed acquisition of an eligible product is estimated to be at or over ----------- FOOTNOTE BEGINS --------- [foot #] 6 The contract incorporates the version of this clause dated January 1989. There are no material differences between the clause as it read in January 1989, and the clause as it reads today. [foot #] 7 The contract incorporates the version of this clause dated April 1991. There are no material differences between the clause as it read in April 1991, and the clause as it reads today. ----------- FOOTNOTE ENDS ----------- the dollar threshold" established by the United States Trade Representative, which is currently $182,000. FAR 25.401 defines "eligible product" as including a designated country end product. FAR 52.225-9 defines "end product" and "components" nearly the same as does FAR 52.225-3. FAR 25.401 contains a list of designated countries, including Japan and not including China, Korea, or Taiwan. IDP proposes to provide several items from non-designated countries. DoJ determined that IDP's proposal met the requirements of the Trade Agreements Act because the estimated value of each of these items is below $182,000. The protest asserts that DoJ should have rejected IDP's proposal because the total value of the procurement exceeds $182,000 and, as a matter of law, if the total value of a procurement exceeds $182,000, none of the items procured can be from a non-designated country. The Trade Agreements Act provides that the President may waive laws and regulations that apply to "products." The FAR provides that the Trade Agreements Act applies to "items," that the contractor will deliver and supply "end products" which comply with the Trade Agreements Act, and that agencies will evaluate offers to determine whether the value of the acquisition of an "eligible product" exceeds the dollar threshold. In addition, the solicitation's Trade Agreements Act certification required offerors to certify that "end products," except those line items identified by the offerors, met the requirements of the Trade Agreements Act. The Trade Agreements Act regulation is consistent with the Buy American Act regulation, which also focuses upon end products and line items. DoJ's review of proposals in order to determine whether the value of any end product exceeded $182,000 was consistent with the requirements of the Trade Agreements Act, as implemented in the FAR. Next, we consider the allegation that IDP proposes to provide battery packs from Taiwan, and that this violates the Trade Agreements Act because the battery packs are end products and the estimated value of the battery packs exceeds $182,000. Although we agree that the battery packs are end products and that the estimated value of the battery packs exceeds $182,000, we do not agree that the battery packs proposed by IDP are from Taiwan. IDP provided a clear, plausible explanation of why its Trade Agreements Act certification mistakenly stated that it intends to supply battery packs from Taiwan. This explanation is supported by documents contained in the record.[foot #] 8 The battery packs that IDP proposes ----------- FOOTNOTE BEGINS --------- [foot #] 8 It is appropriate for us to consider the evidence introduced by IDP at the hearing concerning the country of origin of its battery packs, even though that information was not available to the contracting officer. We review decisions de __ (continued...) ----------- FOOTNOTE ENDS ----------- to supply are not listed on IDP's Trade Agreements Act certification, which means that the battery packs supplied by IDP must be compliant with the Trade Agreements Act, and IDP provided uncontroverted evidence that the battery packs it intends to deliver and supply will be compliant with the Trade Agreements Act. IDP is not offering battery packs which violate the Trade Agreements Act. Award Decision FCC alleges that DoJ made its award decision based upon a consideration of price alone, and not based upon a consideration of technical merit and price. This allegation has no support in the record. The evidence establishes that DoJ evaluated the technical merit of the proposals and determined that there were slight differences among them. IDP's proposal was lowest priced, by a considerable margin. The contracting officer believed that a price premium of $200,000 to $600,000 might have been warranted, given the small technical differences among the proposals. The contracting officer considered both price and technical rankings when he made his award decision. The contracting officer's decision to select IDP for award is consistent with section M of the solicitation, which provides that price was more important than technical merit. DoJ's award decision was not based upon a consideration of price alone. Decision Laptops FC's protest is DISMISSED FOR LACK OF AN INTERESTED PARTY. FCC's protest is DISMISSED AS UNTIMELY FILED insofar as it alleges that DOJ's price evaluation was defective because the agency did not recognize that it would have to pay IDP an additional amount to purchase additional copies of Windows operating system software. Otherwise, FCC's protest is DENIED. ______________________________ MARTHA H. DeGRAFF Board Judge We concur: ____________________________ ______________________________ STEPHEN M. DANIELS CATHERINE B. HYATT Board Judge Board Judge ----------- FOOTNOTE BEGINS --------- [foot #] 8 (...continued) novo, and we are not limited to reviewing the information ____ contained in the agency's file.