__________________________ GRANTED: November 21, 1994 __________________________ GSBCA 12975-P OCTEL COMMUNICATIONS CORPORATION, Protester, v. GENERAL SERVICES ADMINISTRATION, Respondent. J. Randolph MacPherson and Richard D. Lieberman of Sullivan & Worcester, Washington, DC, counsel for Protester. John Cornell and Wendy Nevett Bazil, Office of the General Counsel, General Services Administration, Washington, DC; and Thomas Y. Hawkins, Office of Regional Counsel, General Services Administration, San Francisco, CA, counsel for Respondent. Before Board Judges DANIELS (Chairman), PARKER, and VERGILIO. VERGILIO, Board Judge. On September 15, 1994, Octel Communications Corporation filed with the Board this protest, later amended, challenging actions of the respondent, the General Services Administration (GSA). The agency proposes to utilize change orders under an existing contract to satisfy requirements for voice mail/messaging equipment and services. Octel asserts that the requirements are outside the scope of the underlying contract. Octel maintains that, by failing to compete the requirement, the agency has violated statute and regulation, and the conditions of its procurement authority. Further, Octel contends that the agency has acted contrary to regulations in failing to comply with requirements for acquisition planning, synopsizing contract actions and modifications, and justifying less than full and open competition to satisfy the needs at issue. Finally, the protester contends that the agency failed to synopsize and prepare justifications for three contract modifications which added voice mail at three locations. The agency has moved to dismiss the protest as untimely filed, and has moved to strike certain counts of the protest. The Board denies these motions. The protester filed the protest within ten days of learning of the agency actions (or inactions) which form the bases of the grounds of protest. Further, counts two and three raise valid bases of protest which are independent from count one. The Board grants the protest. The requirements which the agency now seeks to satisfy are outside the scope of the underlying contract. The agency intentionally did not include voice mail as a requirement or mandatory option under the solicitation. At the time the solicitation was issued, and for many months thereafter, the agency viewed the voice mail requirement as falling outside the scope of the contract. One reason voice mail was not placed in the solicitation was to avoid protests relating to that "requirement." The language of the solicitation is not so broad as to encompass the separate feature of voice mail, particularly in light of the background which indicated to potential offerors that any voice mail requirements would be satisfied via a separate procurement action. Findings of Fact Procurement authority 1. With reference to the then existing Federal Information Resources Management Regulation (FIRMR), 41 CFR 201-39.006 (1989), by memorandum dated August 9, 1989, the agency's Director, Systems Development Division, submitted to the agency's Chief, Authorizations Branch, an agency telecommunications request (ATR) seeking approval for the acquisition and implementation of local telecommunication services. Protester's Supplemental Protest File, Exhibit 1.[foot #] 1 A portion of this request reveals the project title and description: The Aggregated Switch [or System] Procurement (ASP) Program is designed to provide the latest in telecommunications technological advancements to local users at GSA consolidated service locations. The implementation of this program will replace existing systems and services which are not operating effectively and efficiently as a result of mature technology and future enhancement limitations. Id. at 2 ( 2). The request specifies that the acquisition strategy relies on a ten zone concept. Moreover, ----------- FOOTNOTE BEGINS --------- [foot #] 1 Subsequent references to exhibits in the Protester's Supplemental Protest File are denoted by a "PS-" prefix to the exhibit number; hence, the citation above would read: Protest File, Exhibit PS-1. ----------- FOOTNOTE ENDS ----------- Full and open competition will be sought, promoted and sustained throughout the course of the acquisition. A competitive pre-solicitation synopsis will be issued for publication in the Commerce Business Daily (CBD) for each zone contract. All concerns that express an interest in the requirements shall be forwarded a complete solicitation package. All responsible offerors['] proposals shall be evaluated. . . . . In addition, it is anticipated that discussions will be required to clarify the Statement of Work requirements, offerors['] technical and business proposals and any ambiguities that may arise in the solicitation or proposals. Id. at 2-3 ( 3). The acquisition strategy paragraph concludes with a sentence stating that the contracts will "provide flexibility to the Government in obtaining technologically advanced equipment and services to accommodate the telecommunication needs of customer agencies." Id. 2. By memorandum dated September 11, 1989, the Assistant Commissioner for Information Resources Management Policy grants approval for the acquisition and implementation of the requested telecommunications services. This grant of procurement authority has three conditions, one being that the office of the Assistant Commissioner shall be notified of any changes or discontinuance of service at any of the locations. Protest File, Exhibit 1 at 1. The memorandum specifies that a procurement objective is to obtain full and open competition; "this requires an acquisition strategy suitable to the circumstances, in which the statement of the user's requirement is set forth in the least restrictive terms possible to satisfy the needs of the agency without compromising economy or efficiency." Id. at 1-2. 3. By memorandum dated December 8, 1989, the agency's Assistant Commissioner, Office of Information Resources Procurement, requests the approval of a "comprehensive acquisition plan to establish agency plans for the [ASP] Program," which the agency's Commissioner, Information Resources Management Service (IRMS), grants by signature and date of December 11. Protest File, Exhibit 2 at 1. The plan identifies the ten contemplated contracts, each of which is to cover a specified geographic region; that here relevant is the Pacific Zone II procurement encompassing Washington, Oregon, Idaho, and Arizona. Id. at 4 ( 1.e). 4. In a memorandum for the Deputy Assistant Commissioner for Regional Telecommunications Services dated May 3, 1990, the Director, Systems Development Division, states that his division has concluded that voice mail service should not be included in the ASP solicitations: "All switches installed under ASP will be capable of accommodating Voice-Mail and E-Mail but the ordering of the service will be done locally on a competitive basis." Protest File, Exhibit PS-6. One of the reasons specified in support of the conclusion provides: Voice-Mail and E-Mail are experiencing rapid technological evolution that will continue over the next several years. This includes standards compliance as well as state-of-the-art service advances. Because of this it would not be wise for GSA to tie themselves to one vendor for 10-years. This is especially true from a cost viewpoint. There is every reason to believe the products will reduce in costs over the next few years. Id. The Deputy Assistant Commissioner noted his approval with a signature and date of May 5, 1990. Id. Other zones 5. As initially issued on January 5, 1990, the first two solicitations of the ASP program, those for Eastern Zone I and Pacific Zone I, contained a "system mandatory option" which required offerors to propose voice mail, and provided for the evaluation of the response. Protest and Answer ( 5-8). Issued on April 9, 1990, amendment 3 to each solicitation deleted this mandatory option (as well as all expressions of the requirement) from the solicitation and recognized the deletion as a basis for not responding further to voice mail related questions. Protest File, Exhibit PS-5 at 5 of 8 ( C.13.22), C-49 ( C.13.22), 13 ( 37), 18-21 ( 48-56), 24 ( 70), 29-30 ( 88), 53-56 ( 148- 56) and Exhibit PS-4 at 5 of 7 ( C.13.22), 8 ( 25), 17 ( 52- 52), 21-24 ( 64-73), 28-29 ( 86), 53-56 ( 149-57), 57 ( 163). 6. In a memorandum dated June 11, 1992, to the agency's Director, System Development Division, the agency's Director, Telecommunications Division identifies a requirement for voice mail in the Pacific Zone I (PAC I) ASP: With the award of PAC I ASP due in the next year, GSA consolidated system customers who now use voice mail may be subject to losing that capability with the installa-tion of a new system. Pacific Zone Telecommunications wants to support their Federal agencies who have voice mail requirements. The PAC I ASP Contracting Officer plans to issue an amendment to the RFP [request for proposals] before the end of June and has informed us that the window of opportunity to add voice mail to the RFP is now. Protest File, Exhibit PS-9 at 1. The memorandum specifies that the "award of the PAC I ASP contract with no provision for voice mail capability may cause our customers to lose all or some of their present voice mail capability." Id. at 2. The memorandum also proposes a solution: Add Voice Mail to the PAC I ASP RFP as a mandatory option. The advantage is that we can then offer our customers the same level of technology they now enjoy. Also, an aggregated requirement usually is more cost effective. The disadvantage is that there will be questions asked by the vendor community because we are adding a requirement that was previously removed. However, the rapid growth of voice mail users during the past couple years was unexpected. It is obvious that there is now a need for this service beyond what anyone foresaw. Id. 7. By letter dated April 5, 1994, the PAC I ASP contractor invited the protester to submit to it a proposal for voice mail systems for that zone. The letter specifies: "Any and all awards will be subject to the applicable Federal Acquisition Regulation contract clauses"; the letter does not state that voice mail has been or will be added to the underlying contract or the basis or vehicle for any such contract action. Protest File, Exhibit 118. The protester submitted a response. Id. Pacific Zone II 8. The solicitation for Pacific Zone II (PAC II) was issued on September 7, 1990, after voice mail had been deleted from the Eastern Zone I and Pacific Zone I solicitations. Protest File, Exhibit PS-7 at 9; Finding 5. The introduction of the solicitation's section C, states: This contract is one of ten contemplated contracts under the Aggregated System Procurement (ASP) Program. Under the ASP Program, certain telecommunication requirements within specified locations are consolidated into individual contracts. The purpose of this contract is to provide integrated digital voice and data local telecommunications service and/or equipment and establish a single point of responsibility within the geographic area to be served by this contract. Protest File, Exhibit 4 at 26 ( C.1) (emphasis added). Further, "The Contractor shall coordinate services, as required, with other Government Telecommunications Contractors (see Attachment J.5)." Id. 9. The "scope of contract" paragraph provides in pertinent part: This contract will provide commercially available integrated voice and data telecommunications services and/or equipment. In accordance with the requirements of Clause H.20, Availability of Equipment and Software, the equipment offered shall be formally announced for marketing purposes and be the latest in design and in current production. In accordance with Clause H.19, Engineering Changes, the Contractor shall propose for the Government's consideration any equipment or software available as a result of technological improvements. This includes engineering, site preparation, installation, testing, cutover, operation and management, billing, and maintenance. The Pacific Zone II ASP contract will include the states of Washington, Oregon, Idaho, and Arizona (with some geographic exceptions). Protest File, Exhibit 4 at 27 ( C.3.1). Voice mail is not identified as a feature and requirement that the proposed system must provide or be capable of providing--the solicitation is silent on voice mail. Id. at 29-30 ( C.4). 10. A section captioned "system attributes" makes specific provision for upgrades: These system(s) shall be modular in design to facilitate future improvements and the availability of new features and functions. System upgrades are improvements to the system/service, whereas, system changes are required changes to the system to continue to meet the contract performance requirements. (See Paragraph C.9.2.c). Protest File, Exhibit 4 at 41-42 ( C.6.2). The referenced paragraph provides: The Contractor shall collect and evaluate system(s) data, plan and implement approved system(s) upgrades, and establish the criteria, parameters, processes, and procedures required to provide quality voice and data services. Id. at 53 ( C.9.2.c). 11. The Engineering Changes clause states in pertinent part: (a) After the contract award, the Government may solicit, and the Contractor is encouraged to propose independently, engineering changes to the equipment, software specifications, or other requirements of this contract. These changes may be proposed to save money, to improve performance, to save energy, or to satisfy increased requirements. However, if proposed changes relating to improved performance are necessary to meet increased requirements of the user, those requirements shall not exceed the contract requirements by more than 25 percent. If the proposed changes are acceptable to both parties, the Contractor shall submit a price change proposal to the Government for evaluation. Those proposed engineering changes that are acceptable to the Government will be processed as modifications to the contract. . . . . (d) The Contracting Officer may accept any engineering change proposal submitted pursuant to this clause by giving the Contractor written notice thereof. This written notice shall be given by issuance of a modification to this contract. Unless and until a modification is executed to incorporate an engineering change proposal under this contract, the Contractor shall remain obligated to perform in accordance with the terms of the existing contract. (e) If an engineering change proposal submitted pursuant to this clause is accepted and applied to this contract, an equitable adjustment in the contract price and in any other affected provisions of this contact shall be made in accordance with this clause and other applicable clauses of this contract. When the cost of performance of this contract is increased or decreased as a result of the change, the equitable adjustment increasing or decreasing the contract price shall be in accordance with the "Changes" clause rather than under this clause, but the resulting contract modification shall state that it is made pursuant to this clause. Protest File, Exhibit 4 at 104-06 ( H.19). The contract incorporates by reference the Changes clause (fixed-price, alternate II) from the Federal Acquisition Regulation (FAR), 48 CFR 52.243-1 (AUG 1987). Id. at 9 ( I.1.45). 12. A Technological Refreshment Substitutions clause provides, in relevant part: During the course of this contract, the Contractor shall propose for the Government's consideration Technological Refreshment Substitutions for any provided product(s) that may become available as a result of technological improvements. The Government may, at any time during the term of this contract or any extension thereof, modify the contract to acquire products which are similar to those under the basic contract and that the Contractor has formally announced for marketing purposes. This action is considered to be within the scope of the contract. Protest File, Exhibit 4 at 108-09 ( H.24). 13. The solicitation for PAC II contains "requirements" to be satisfied by the contractor and "system mandatory options" which the agency could unilaterally exercise over the life of the contract. Voice mail/messaging is not a stated requirement or option. Protest File, Exhibit 4 at 72-80 ( C.13). 14. The solicitation identifies factors and subfactors which would form the basis for evaluation and selection. The solicitation identifies four technical factors: technical response to system requirements; management services; maintenance; and technical plans and procedures. Protest File, Exhibit 4 at 158-59 ( M.4). Voice mail/messaging is not an identified requirement or mandatory option to be satisfied at present or in the future; no solicitation-specified factor or subfactor indicates that the agency intends to evaluate an offeror's ability to provide voice mail. Id. at 158-67 ( M). An offeror's ability to provide upgrades or enhancements over the life of the contract is only tangentially referenced in one evaluation element of a subfactor: "Flexibility to accommodate transition and growth of stations and systems (moves, additions, changes, enhancements)." Id. at 162 ( M.4.2.a). 15. A "voice mail requirements analysis for PAC II ASP locations," dated by the agency as 1992 but not attributed to any individual, discusses the past, present and projected requirement: In January of 1991 an extensive voice mail requirements study, conducted in Seattle, Portland, Spokane, and Boise, was completed. This analysis identified the need for over 2700 mailboxes by agencies using GSA consolidated systems. This requirement has not yet been satisfied, and the need continues to grow daily. Seventy per cent (70) of our customer agencies have expressed their intent to use voice mail. Several agencies have procured their own voice mail systems in the past two years. However, most agencies have chosen to wait for IRMS to offer voice mail as a feature of our consolidated ASP systems. Protest File, Exhibit 15 at 1.[foot #] 2 Prior to contract award, the agency was, or should have been, aware that voice mail was a required feature of a total telecommunications system. 16. As the sole offeror, US WEST Communications Federal Services, Inc. received a contract with an effective date of January 3, 1992. Protest File, Exhibit 4 at 17. The contract is ----------- FOOTNOTE BEGINS --------- [foot #] 2 A requirements analysis dated July 27, 1992, specifies that voice mail has been used by customer agencies in Portland East since April 7, 1988, growing from 2400 to 2995 mailboxes. Protest File, Exhibit 25 at 2. ----------- FOOTNOTE ENDS ----------- a fixed-price, indefinite delivery, indefinite quantity contract with a provision for an economic price adjustment covering a base period of eighty-four months with three twelve-month options. Id. at 26 ( C.1), 90 ( H.1). Neither the US WEST initial proposal nor its best and final offer referred to or offered to supply voice mail/messaging equipment or services. Protest File, Exhibit PS-27 at 5 ( 14-17). Voice mail--additional contemporaneous views 17. Under cover letter dated January 23, 1992, US WEST submitted an engineering change proposal to provide voice mail. Protest File, Exhibit 16. In the spring of 1992, discussions occurred between personnel of the protester and US WEST regarding US WEST's proposed action to add voice mail to the PAC II contract. Protest File, Exhibit 115 at 9-10 ( 24). A subsequent "proposal" from the protester to US WEST, referencing clause H.19 of the contract, specifies: "The current contract does not contain a requirement for voice mail." Protest File, Exhibit 120 at 4. 18. An agency document captioned "PAC II ASP Project Status Report Period Ending 5/1/92" addresses voice mail: Several clients are currently using voice mail service in the cities covered by this contract. However, voice mail was not a requirement of the ASP solicitation and is not offered under the contract. As our clients have expressed a requirement to continue using voice mail service, we must develop a means by which this capability can be offered and provided at the time of system cutover. To obtain guidance on how this can be accomplished given the current contractual constraints, this issue will be presented to the Management Council by 5/15. Protest File, Exhibit 21 at 2. 19. A May 5, 1992, message from the ASP contracting officer[foot #] 3 to the project manager addresses voice mail: This is not going to be an easy "fix" and we had better start telling agencies they may not have voice mail at the time their system is cut over. The Pac II solicitation was issued 9-7-90 without voice mail capabilities and no action has been taken to include it or provide it. I do not think the team should try to solve this longstanding problem at the 11th hour. Again, implementing the contract locations is a big enough job without taking on longstanding issues which have not been addressed. Protest File, Exhibit 22. A message also dated May 5, from the Portland Area Telecommunications Manager, underscores the considerable magnitude of the user agency demand for voice mail/messaging. Id., Exhibit 23. 20. A memorandum dated May 15, 1992, from the ASP contracting officer to the Director, IRMS Contracts Division, focuses upon voice mail: The Pacific I ASP was issued January 5, 1990. Amendment No. 5 dated May 11, 1990, removed the requirement for voice mail. The Pacific II ASP was issued September 7, 1990, and did not include the requirement for voice mail. This requirement has been out of the ASP solicitations for two years now and no action has been taken by the Zone to have it included ----------- FOOTNOTE BEGINS --------- [foot #] 3 A memorandum dated February 1, 1994, specifies a transfer in duties of the contracting officer in the PAC II procurement. A contract modification with an agency signature date and an effective date, also of February 1, 1994, indicate a change in the procurement contracting officer--from an individual located in Washington, DC, to one located in Washington state. Protest File, Exhibit 123. The individual named as the successor contracting officer had been signing memoranda as early as May 15, 1992, as the "ASP CONTRACTING OFFICER." Id., Exhibit 24. The list of ___ modifications does not identify the February 1, 1994, modification as having been issued; moreover, the numbering of that modification is inconsistent with the listed modifications. Id., Exhibits 5, 123. Although it appears that the Washington ___ state individual signing documents as the contracting officer was an administrative contracting officer, the agency has not suggested that any actions were not ratified by the actual contracting officer. The Board will refer to the individual signing as the contracting officer as early as May 1992 as the contracting officer. ----------- FOOTNOTE ENDS ----------- or to provide the capability by other means. This has the potential for being an exceedingly large requirement and may not be able to be made available to ASP users in a timely manner, especially for the more immediate cutovers. I have considered the following factors: a. Is it within the scope of the ASP contract? 1. It does not fit in the engineering changes clause H.19 which is intended to provide substitutions and enhancements to awarded capabilities. 2. Voice mail capabilities were removed from Section C at C.13.22 prior to issuance of the SFO. The test for "within the scope" of the contract is predicated by the courts on "what was reasonably contemplated when the contract was entered into." Since this can be [a] separately provided capability I am not convinced we can make a case for "reasonably contemplated" change. 3. In the broadest possible sense of providing phone services we can probably make a case for "within the scope." Protest File, Exhibit 24 at 1. The discussion of the factor captioned "Can we justify a sole source procurement action?" concludes with: "Even 'within the scope' we must consider the CICA [Competition in Contracting Act] requirements. There are several voice mail manufacturers so it is reasonable to assume there may be more than one vendor who can provide the necessary interface with the [US WEST supplied system]." Id. at 2. 21. By letter dated August 26, 1992, the agency's Director of Telecommunications Division notified the Director of Management Systems of a user agency under the PAC II ASP contract: Based on PAC II ASP contractual limitation, GSA is currently unable to provide voice mail service under the contract, therefore, agencies are authorized to obtain their own voice mail system. As previously mentioned, the Agency must ensure that the voice mail system, as other peripheral equipment, be technically compatible with [US WEST supplied system] and be installed in the agency's space. Protest File, Exhibit 26 at 2. 22. The agency's Director, Telecommunications Division, IRMS, issued a memorandum dated August 31, 1992, for users of PAC II services: The purpose of this memo is to clarify the General Services Administration[']s position regarding the availability of voice mail under the Aggregated Switch Procurement (ASP) Pacific Zone ASPII contract. The Aggregated Switch Procurement (ASP) program is a nationwide initiative administered at the Central Office level. The original ASP solicitation included voice mail as a requirement. Because of this, many of our initial briefings on ASPII stated that voice mail would be available with the award of the new contract. The requirement for voice mail was removed from the standard solicitation at the national level and therefore is not available under the terms and conditions of the existing contract. We apologize for not being able to provide this option, however please understand that our statement regarding voice mail was made in good faith at the time. Protest File, Exhibit PS-11 (emphasis added). In December 1992 or January 1993 (as indicated by the agency), the agency's Director, Telecommunications Division, IRMS, Pacific Zone, issued for users of the PAC II contract another memorandum repeating the above-quoted language, but with a paragraph which ends with: "For your information, when developing specifications for Pacific Zone ASPII, less than 3% of our users indicated a requirement for voice mail." Id., Exhibit 34 at 1. Possible sole source justification 23. A memorandum dated May 13, 1993, from an agency Telecommunications Specialist, Technical Support Branch, to the ASP contracting officer favors a sole source justification to add voice mail to the US WEST PAC II ASP contract. Protest File, Exhibit 36. The record contains a draft (unsigned and undated) "justification for other than full and open competition / Pacific Zone II ASP, voice mail capabilities." Id., Exhibit 38. The record contains no final, signed or dated justification. 24. The Commerce Business Daily (CBD) of July 30, 1993, contains an agency notice of intent to modify the PAC II ASP contract on a non-competitive basis to include voice messaging capabilities. The notice specifies that the intended modification is to be in accordance with FAR 6.302-1. The notice concludes: "This action is being contemplated with the existing contractor to ensure ongoing compatibility of systems and efficiency of ongoing system administration. All responsible sources may submit an offer which will be considered. See Note 22." Protest File, Exhibit 56. Note 22 states: The proposed contract action is for supplies or services for which the Government intends to solicit and negotiate with only one source under authority of FAR 6.302. Interested persons may identify their interest and capability to respond to the requirement or submit proposals. This notice of intent is not a request for competitive proposals. However, all proposals received within forty-five days . . . after date of publication of this synopsis will be considered by the government. A determination by the Government not to compete this proposed contract based upon responses to this notice is solely within the discretion of the government. Information received will normally be considered solely for the purpose of determining whether to conduct a competitive procurement. CBD, July 26, 1993, at 64. 25. Companies responded (some by telephone, others by letter) to the CBD notice. Protest File, Exhibits 45-47, 50-52, 56, 63. Subsequent agency conduct 26. By message dated August 9, 1993, to an agency area telecommunications manager, the contracting officer provided her opinion on "within the scope of the contract." I would say that originally I could have considered voice mail to be within the scope of the contract. However, once Central Office knowingly and obviously removed the capability from the ASP actions it is now almost impossible to put it back in and consider it within the scope. Had it never been mentioned that would have been one thing. However, once it was split out, I don't think it can be put back together. I've been saying this since the ASP contract was awarded and this issue was raised. No one wants to hear it, and take other appropriate actions, . . . . Protest File, Exhibit 48 at 3. 27. By letter dated August 9, 1993, an agency area telecommunications manager informed a potential voice mail user under the PAC II contract: Voice mail was deleted from the ASP procurement prior to negotiations and award because of a threatened protest from a small business voice mail provider who was unable to respond directly to the ASP procurement. Protest File, Exhibit 49 at 2. 28. On August 27, 1993, the contracting officer provided agency personnel with a message on the status of voice mail for the PAC II contract. The message states that the thirty-day CBD announcement period will be up on August 30, and indicated that she had received about ten written and telephonic requests for the solicitation or statement of work. The message proceeds, in part: When I get back I intend to gin up some kind of a letter to each of the respondents saying thanks but since we need only one vendor to maintain and administer each site we intend to proceed on a sole source basis with our current ASP contractor. Since I have no technical requirements nor statement of work I can't send them anything. If we put something together then we have to prepare evaluation criteria, etc., which begins to look like a real procurement. No one wants to go to that much work so I'm not sure where I will go with this. Protest File, Exhibit 61. 29. Shortly after its issuance on July 30, 1993, agency personnel became aware of the decision of the United States Court of Appeals for the Federal Circuit which addresses the analysis involved in resolving a protest challenging the agency's failure to obtain competition when it modified a contract; the protester alleged that the modification exceeded the scope of a procurement. AT&T Communications, Inc. v. Wiltel, Inc., 1 F.3d 1201 (Fed. Cir. 1993) (modification fell within the scope of the contract given the language of FTS2000 solicitation). Protest File, Exhibit 67. 30. During a telephone call on October 19, 1993, the contracting officer responded to an inquiry from a Manager, Federal Sales, of the protester concerning the status of the agency's actions regarding voice mail and the ASP contract. The contracting officer "told him I owed all respondents a letter advising them of our decisions. I gave no time frames. He thanked me and said he would wait for my letter." Protest File, Exhibit 70. 31. During October and November 1993, concerning the need for voice mail, the agency conducted a requirements analysis of the user agencies in Arizona. Protest File, Exhibits 73, 74. 32. With an effective date of January 11, 1994, the agency issued a change order under the PAC II contract adding voice mail at a location in Seattle; although the installation cost is not to exceed $35,000, the change order does not address the cost to the Government over the life of the contract. Protest File, Exhibits 5, 6. With effective dates of March 30, and June 3, 1994, the agency issued change orders under the PAC II contract adding voice mail at locations in Phoenix and Tucson, respectively; the not-to-exceed installation cost for Phoenix is $65,000, although the change order does not address the cost to the Government over the life of the contract. Id., Exhibits 5, 7, 8. 33. On May 5, 1994, the contracting officer informed an individual from VMX, Inc.[foot #] 4 that the agency is not pursuing adding voice mail on a sole source basis and, instead, the agency is looking into engineering change proposals as a means of providing service to agencies. Protest File, Exhibit 89. 34. On May 12, the contracting officer had a conversation with the protester's Manager, Federal Sales, who indicated that he was aware that voice mail was added to two locations. The contracting officer stated that, because of urgent agency need, the change orders had been issued for those locations; however, the agency had not amended the contract to add voice mail. Protest File, Exhibits 88, 124. As the notes of the protester's manager state, regarding the change orders, he "felt this sole source procurement was not valid and was unfair." Id., Exhibit 124. 35. A message dated June 22, 1994, authored by the contracting officer states: By letter dated June 21, 1994 I have received an agency protest from VMX to our proposed action to include voice mail capabilities into the ASP contract by noncompetitive means. Protest File, Exhibit 92. Although the letter of inquiry by VMX was not specified as, or meant to be, a protest to the agency, Id., Exhibit 95, the agency treated it as an agency protest. 36. The contracting officer's notes of a telephone conversation of July 21, 1994, with protester's Manager, Federal Sales, indicate that the individual wanted "to make sure we [the agency] haven't taken action to mod[ify] the contract with voice mail." The notes specify that the contracting officer "told him we had evaluated the circumstances & facts & felt we were taking appropriate action." The notes do not indicate that the contracting officer indicated how the agency was intending to satisfy its voice mail requirements for Pacific Zone II viewed as a whole. Protest File, Exhibit 99. ----------- FOOTNOTE BEGINS --------- [foot #] 4 Following an announcement of the proposed merger dated January 31, 1994, VMX, Inc. merged into the protester, with an effective date of July 1, 1994. Id., ___ Exhibits 85, 98. ----------- FOOTNOTE ENDS ----------- 37. According to notes of the protester's Manager, Federal Sales, during the telephone conference held on July 21, 1994, the contracting officer informed him that the only reason that voice mail was taken out of the original solicitation was because VMX was going to protest and the agency did not want to incur the delay. Protest File, Exhibit 124. Additionally, the notes indicate that the contracting officer mentioned that she ordered two systems using a change order without modifying the contract and that this was due to the agency's desire to have just one vendor supplying the services. Id. 38. On August 12, the contracting officer was informed by her supervisor that the determination had been made that voice mail falls within the scope of the contract. The supervisor instructed the contracting officer to proceed with adding voice mail to the contract. Protest File, Exhibit 104. 39. Under a cover letter dated August 26, 1994, to US WEST, the contracting officer attached a proposed modification to the PAC II contract which would add to the contract "voice mail capabilities" as a "system mandatory option": The system(s) shall provide integrated Voice Mail services for all identified users. For Meridian mail only, delivery and/or implementation of all associated options shall be accomplished by the Contractor within forty-five (45) calendar days of issuance of the order exercising this option. Protest File, Exhibit 14 at 5-6. 40. By letter dated August 30, 1994, to the protester, the Acting Director, Telecommunications Contract Division, Pacific Zone, responded to VMX's letter dated June 21, 1994, concerning the anticipated addition of voice messaging capabilities under the PAC II contract. The agency indicated that it views such capabilities as falling within the scope of the contract. The protester received the letter on September 6. Protest, Exhibit 1. The contracting officer earlier had avoided informing the protester of the "within the scope" determination. Protest File, Exhibit PS-35 at 498-99. The record does not demonstrate that the protester knew or should have known of the agency's determination and proposed course of action prior to receipt of the letter. 41. On September 15, 1994, the protester filed this protest with the Board. 42. On September 16, the contracting officer's supervisor, aware of this protest challenging the agency's actions regarding voice mail under the contract, instructed the contracting officer to "proceed with issuing the change order for voice mail for" Seattle, Washington. Protest File, Exhibit 113. 43. By contract modification signed by the contracting officer on September 16, the agency directed US WEST to install the Meridian Mail Voice Mail System at a Seattle, Washington, address to support 600 mail boxes at a cost not to exceed $87,000. Protest File, Exhibit 114 at 2. 44. On October 3, the protester amended its protest to add grounds challenging the agency's actions (and inactions) associated with modifications to the contract adding voice mail at specific locations, Finding 32. Those specific modifications were revealed to the protester when it received the protest file on September 29. Declarations 45. In a declaration dated October 28, 1994, the US WEST national account manager for the GSA account states, in part, that he and others at US WEST "clearly saw voice mail as an element of local telecommunications service necessary to support the requirements of the ASP customers. When preparing US WEST's bid on the Pacific Zone II ASP solicitation, we viewed this as one of many technical problems that should be addressed after award through the engineering change clause." Protest File, Exhibit 125 at 2-3 ( 4). The declaration does not indicate that the individual is in a position to relate the actual views of US WEST at the time it submitted its best and final offer. 46. In a declaration dated October 28, 1994, the agency's Division Director, Systems Management Division and Systems Development Division, Information Resources Management Office, from late 1989 until July 31, 1994, states: 4. My understanding of the issue of scope is that if we have identified the requirement and stated it in the RFP, it is within the scope of the contract. Once we removed the requirement for voice mail capabilities, it was no longer within scope. In my mind, scope of the contract is synonymous with the stated requirements of the contact. 5. Voice mail was removed from the Pacific Zone I and Eastern Zone I ASP solicitations because a) GSA did not have a clearly defined requirement for voice mail; b) questions posed by various voice mail equipment manufacturers led me to believe that the solicitations would be protested if we kept the voice mail specification in the RFP's and c) resolving the requirements for voice mail would unnecessarily delay award of the ASP contract, and I was determined to get the ASP contracts awarded as soon as possible. 6. Through the clauses at C.3.1, H.19, H.20, and H.24, of the ASP solicitations I believe all vendors of the telecommunications industry were given notice that the contract was subject to appropriate modification after award, for any products, including voice mail as may be determined appropriate by the government for acceptance. Protest File, Exhibit 126 at 2. 47. In a declaration dated October 31, 1994, the agency's contracting officer for this procurement states: I knew prior to award of this contract that its companion procurement, Pacific Zone I ASP[,] had contained a requirement for Voice Mail which had been deleted by GSA's Central Office prior to award, and that the solicitation for Pacific Zone II ASP had never contained a requirement for Voice Mail. I never received any official explanation (prior to initiation of this protest) of why this was done, and had heard rumors to the effect that it had been removed form Pacific Zone I ASP to avoid a threatened protest from one or more Voice Mail equipment manufacturers. I knew prior to award of Pacific Zone II ASP that Voice Mail would be a concern to many of GSA's customer agencies, as they had been receiving Voice Mail service along with the remainder of their local telecommunication service from the Local Exchange Carriers, usually as a state tariffed service (CENTREX), or from an unregulated telecommunications provider through an existing PBX. Award of Pacific Zone II ASP without Voice Mail meant that customers would be losing an important part of their local telecommunication service after cutover to ASP. Discussion of how we would be able to provide Voice Mail to our customers began almost immediately after award . . . . Protest File, Exhibit 127 at 2 ( 3). The contracting officer states that the "responses I received in reply to the [CBD] announcement [Findings 24-25], together with the technical information received from my program office[,] led me to believe that any sole source acquisition would be protested by someone, and that the sole source justification would not withstand the critical review it would receive in a bid protest." Id. at 4 ( 7). The contracting officer specifies that only in December 1993 or January 1994 did she conclude that voice mail is within the scope of the protested contract. Id. at 5 ( 8, 9). 48. In a declaration dated October 30, 1994, the protester's Executive Vice President and Chief Technology Officer explains: Voice information processing is an independent telecommunications technology and capability supplied through separate hardware, software and support services, and is not an inherent function, feature or service of a PBX [as provided under the ASP]. In my opinion, an inherent function, feature or service of a PBX is provided by software operating on the PBX main processor, and is not available from or capable of being supplied by any entity other than the manufacturer of the PBX. The voice information processing products of Octel are designed and manufactured to integrate with the PBXs of Northern Telecom either to provide basic voice mail/voice messaging or enhanced voice processing capabilities. Protest File, Exhibit PS-66 at 2 ( 2b, 2c). Discussion The protester raises three grounds in its initial protest. One, voice mail/messaging is a separate and independent telecommunications capability not within the scope of the US WEST PAC II contract, such that the agency has failed to attain full and open competition by attempting to modify the contract without separately competing the requirement. Two, the agency has acted in violation of the procurement authority issued September 11, 1989, which requires the agency to obtain full and open competition to satisfy its needs under the ASP program; the agency is attempting to add voice mail/messaging capabilities on a non-competitive basis. Three, the agency has failed to comply with acquisition planning requirements by neither performing a requirements analysis nor preparing an acquisition plan for satisfying requirements for voice mail equipment and service in Pacific Zone II; e.g., 48 CFR 507.102(a) (1993) ("An acquisition plan must be prepared before exercise of unpriced and/or unevaluated options exceeding the small purchase limitation."). By amendment, the protester also maintains that the agency failed to synopsize the three modifications for voice mail and failed to prepare requisite justifications, in violation of regulation. Agency motion to dismiss The agency has moved to dismiss the protest for lack of jurisdiction. In claiming that the protest to the Board has been untimely filed, the agency erroneously asserts: Protestor bases its timeliness claim on the date of receipt of GSA's reply (September 6, 1994) to correspondence from VMX (June 21, 1994) which Protestor now contends was an agency protest (See 3 of Protest Complaint at 3). Agency Motion at 1 (Sept. 28, 1994) (footnote omitted). The protester does not maintain that the letter of June 21 constituted an agency protest. The protester maintains that it learned, through the letter received on September 6, that the agency had determined that voice messaging equipment and services fall within the scope of the PAC II contract. Protest at 3 ( 3). The protester neither knew nor should have known of the agency's determination and proposed course of conduct prior to receipt of the letter. Finding 40. The agency maintains that the protest is untimely because of the conversation on May 12. Finding 34. On May 12 the protester was not informed of the (yet to be made) agency determination that voice mail falls within the scope of the contract and that it would proceed with an amendment to the contract under the engineering changes proposal clause. The protester was informed that the agency had used sole source justifications to issue change orders to add voice mail to two locations. In light of the assertion by the contracting officer, the protester had no reason to know that the agency had not prepared the justifications in support of the actions. The conversation does not start the ten-calendar day clock for raising any of the grounds of protest asserted. The protester timely filed and raised its grounds of protest. Rule 5(b)(3)(ii). The Board DENIES the agency motion to dismiss. Agency motion to strike counts 2 and 3 The agency moves to strike counts two and three of the protest for failure to state a basis of protest. It asserts that the protest "concerns a single legal issue: whether voice mail is within the scope of this contract so that adding this service to the contract by modification is within the scope of the changes clause." The agency further maintains that count 2 fails to state a basis of protest: "If the goods and services of the modification are within the scope of the contract, there can be no violation of the [procurement authority]." As to the alleged regulatory requirements raised in count 3, the agency contends: "if voice mail is within the scope of this contract, this [count] cannot state a valid basis of protest (assuming arguendo, that voice mail is not within the scope of this contract, then Count 3 is also moot!)." Agency Motion (Oct. 3, 1994). The agency fails to appreciate the grounds of protest raised. Each count of protest contends that agency actions (or inactions) violated different statutes or regulations, or conditions of procurement authority. Regarding count 2, for example, a solicitation (and/or contract) may be written more broadly than procurement authority permits, or the proposed contract may exceed dollar limitations contained in the grant of procurement authority. Regarding count 3, the protester asserts that planning requirements apply to within-the-scope modifications in excess of the small purchase limitation, such that an agency assumption in its motion to dismiss is inaccurate. Each ground of protest stands on its own; each raises a valid basis of protest to pursue. Accordingly, the Board DENIES the agency motion to strike counts 2 and 3. Within or outside the scope of the contract The protester asserts that voice mail is a separate and independent telecommunications capability not within the scope of the PAC II contract. The protester concludes that the attempt by the agency to expand the PAC II contract beyond its scope through a contract modification (whether planned, proposed, or executed) circumvents the competitive process mandated by statute and regulation. The agency likens this ASP contract to the FTS2000 procurement as one of broad scope as explained in AT&T, Finding 29. The agency concludes that voice mail falls within the scope of the underlying contract. The Federal Circuit has established the analysis to be undertaken to resolve the "outside the scope" protest allegation: In determining whether a modification falls within CICA's competition requirement, this court examines whether the contract as modified materially departs from the scope of the original procurement. The analysis thus focuses on the scope of the entire original procurement in comparison to the scope of the contract as modified. Thus a broad original competition may validate a broader range of later modifications without further bid procedures. AT&T, 1 F.3d at 1205 (citations omitted). Further, An important factor in determining the scope of the original competition is "whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes during the course of the contract that in fact occurred, or whether the modification is of a nature which potential offerors would reasonably have anticipated." Id. at 1207. The scope of this entire procurement excludes voice mail when one considers the language of the solicitation, the background of this solicitation in the ASP program, the unstated requirement of the users for voice mail, the expectations of the potential offerors on the procurement, and the contemporaneous interpretation of the agency of the scope of the contract. The addition of voice mail under the PAC II contract is not of a nature which potential offerors (or the agency) would reasonably have anticipated. The language of the solicitation does not suggest that the single awardee will have the sole contract with the agency to provide all integrated digital voice and data local telecommunications services and equipment over the life of the contract. The "introduction" to section C refers to "certain" telecommunications requirements. Finding 8. Voice mail is not identified as a feature--required or otherwise. Although the introduction states that the purpose of the contract is to establish a "single point of responsibility within the geographic area," it also specifies that the contractor shall coordinate services with other telecommunications contractors. It is not explicit, and not reasonably implicit, that the single point of responsibility falls on the contractor as opposed to an individual or entity within the agency. The Engineering Changes clause does not, by itself, create a boundless contract. Such a broad interpretation, as urged by the agency, is inconsistent with the statutory and regulatory requirements for agencies to conduct acquisition planning, construct solicitations, and obtain competition focused on actual requirements. Moreover, the analysis of the FTS2000 procurement in AT&T did not begin and end with the recognition that such a clause existed in the solicitation. Rather, the clause must be put in the context of the solicitation language and the reasonable expectations of potential offerors. Unlike the situation in AT&T, where the FTS2000 procurement made clear that the agency intended the two contracts to encompass a "comprehensive set of telecommunications services," the scope of this procurement appears more modest on its face. Moreover, the evaluation and selection criteria do not emphasize an offeror's ability to satisfy unspecified requirements at present or over the life of the contract. Finding 14. Even so, the language of the solicitation must be viewed in the context in which it arose and in light of the expectations of the potential offerors. At the time the overall ASP program began, the agency identified voice mail as a mandatory option feature in the solicitations for Eastern Zone I and Pacific Zone I. Voice mail expressly was a requirement of those solicitations, and a feature every potential offeror should have anticipated as falling within the procurements. However, the agency deleted the requirement and specifications for voice mail from the solicitations. Finding 5. It did so, in part, to avoid protests from voice mail providers who desired to separately compete to satisfy such requirements. Findings 6, 27. It is inconsistent with these past actions for the agency now to contend that it can satisfy voice mail requirements under the contracts awarded without voice mail requirements identified.[foot #] 5 ----------- FOOTNOTE BEGINS --------- [foot #] 5 Although the voice mail requirements of users were substantial well before award--over 70% of users, Finding 15--and not addressed in the solicitation, (continued...) ----------- FOOTNOTE ENDS ----------- Prior to issuance of the PAC II solicitation, the agency had determined that voice mail should not be included in the solicitation. Finding 4. Further, during the course of the PAC II procurement prior to award, the agency was aware of a substantial user requirement for voice mail. Finding 15. Indeed, users had voice mail features under the then existing system(s), which would be lost after cutover to the ASP contract. Finding 18. Intentionally, the agency did not make a voice mail feature a part of the PAC II solicitation--indeed, the agency did not include voice mail in the solicitation and did not elicit information on voice mail so as to affect evaluation or selection. The reasonable expectations of potential offerors for the PAC II procurement must be determined in light of the language of the PAC II solicitation and background to that solicitation. The solicitation itself makes no mention of voice mail as a system feature and does not indicate (through the requirements, listed features or evaluation and selection criteria) that the resulting contract is intended to be so broad in scope as to encompass existing but unstated telecommunications features for which user requirements existed. Potential offerors were aware that, for two zones under the ASP program, voice mail had been included and then removed from the solicitations, and that responses were not provided to questions regarding voice mail requirements. Given these factors, no reasonable offeror would expect that voice mail would fall within the scope of the contract. The Engineering Changes clause and language in the introduction to section C of the solicitation do not suggest a contrary conclusion. Neither the submission by US WEST of a proposal under the Engineering Changes clause, Finding 17, nor the declaration of the individual from US WEST, establishes that US WEST viewed voice mail as falling within the scope of the solicitation. The expectations of an offeror may well differ from the expectations of the contractor. Similarly, protester's response to the contractor's invitation to submit a proposal regarding voice mail in Pacific Zone I, Finding 7, and its submission to US WEST regarding voice mail in Pacific Zone II, Finding 17, do not demonstrate that the protester viewed voice mail as falling within the scope of the contract. Up to the time they became aware of the AT&T decision, the relevant agency personnel viewed voice mail as falling outside the scope of the PAC II contract. This view is consistent with ----------- FOOTNOTE BEGINS --------- [foot #] 5 (...continued) neither party has addressed the applicability or not of the twenty-five percent increase in requirements limitation found in the Engineering Changes clause, Finding 11 ( (a)). ----------- FOOTNOTE ENDS ----------- the terms of the PAC II solicitation and the reasonable expectations of potential offerors, particularly in light of the lack of voice mail as an expressed feature in the solicitation. Findings 18-21. Most significantly, in May 1990, an agency Deputy Assistant Commissioner determined that voice mail would not be included in the ASP solicitations, and that ordering would be done locally on a competitive basis. Finding 4. Further, the Director, Telecommunications Division, IRMS, expressed and clarified the view of the agency as of August 31, 1992: voice mail "is not available under the terms and conditions of the existing contract." Finding 22. The agency's aborted attempt to acquire voice mail on a non-competitive basis, as expressed in a CBD notice, further suggests that the agency did not view the PAC II contract as a viable vehicle through which voice mail could be acquired. Voice mail falls outside the scope of the entire original procurement for PAC II. Accordingly, the proposed contract modification which would add voice mail as a "system mandatory option," Finding 39, and the contract modification issued on September 16, adding voice mail for Seattle, Finding 43, are improper. Procurement authority The request underlying the procurement authority issued for the ASP program is broadly worded. Finding 1. The grant of procurement authority permits the agency to acquire and implement the requested services. Finding 2. Under ASP, the agency had the authority to acquire voice mail equipment and services; that is, the initial solicitations for Eastern Zone I and Pacific Zone I, which expressly identified voice mail as a mandatory option, were not contrary to the procurement authority. However, as discussed above, the Pacific Zone II solicitation did not put offerors on notice that voice mail would fall within the scope of that procurement. During the contract formation period and for many months thereafter, the agency viewed voice mail as not falling within the scope of the competed procurement and intended to obtain voice mail through local competitions. Having not obtained competition for voice mail under the PAC II solicitation, it is contrary to the terms of the granted procurement authority for the agency to now add voice mail as a within-the-scope modification. Acquisition planning The protester contends that whether voice mail falls within or outside the scope of the PAC II contract, the agency has failed to conduct the requisite acquisition planning. The protester correctly points out that the proposed modification adding voice mail as a system mandatory option, Finding 39, constitutes an unevaluated option exceeding the small purchase limitation. The record contains no such plan. Earlier modifications Regarding the already issued modifications adding voice mail to specific locations, Findings 32, 43, justifications do not exist which substantiate the contract actions on a sole source basis. The protester has not suggested that the Board undo the two earlier modifications, Finding 32, or demonstrated a basis to do so in light of the statutory presumption that the contract is presumed valid as to all goods or services delivered and accepted, 40 U.S.C. 759(6)(B) (1988). Accordingly, those two modifications are not affected by this opinion. Decision The Board GRANTS the protest. Having concluded that the existing procurement authority does not permit the agency to proceed with satisfying voice mail requirements as within-the- scope modifications to the Pacific Zone II contract, the US WEST PAC II contract cannot serve as a vehicle to satisfy such requirements. The modification of September 16, Finding 43, and the proposed modification establishing voice mail as a system mandatory option, Finding 43, are invalid. The Board need not revise, revoke, nor suspend the agency's applicable procurement authority, 40 U.S.C. 759(f)(5)(B) (1988); rather, the agency must proceed in accordance with that authority, as well as statute and regulation. The suspension of the agency's applicable procurement authority lapses by its terms. 40 U.S.C. 759(f); Order (Sept. 23, 1994). ________________________ JOSEPH A. VERGILIO Board Judge We concur: _________________________ _________________________ STEPHEN M. DANIELS ROBERT W. PARKER Board Judge Board Judge