__________________________________________ SUSPENSION DENIED: January 31, 1995 __________________________________________ GSBCA 13158-P PRAGMATICS, INC., Protester, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent, and DIEZ MANAGEMENT SYSTEMS, INC. Intervenor. Robert E. Gregg, Thomas R. Folk, and Michael S. Dingman of Hazel and Thomas, Falls Church, VA, counsel for Protester. Lloyd M. Weinerman and Jeffri Thomas Pierre, Office of General Counsel, Department of Health and Human Services, Baltimore, MD, counsel for Respondent. Edward J. Tolchin of Fettmann & Tolchin, Fairfax, VA, counsel for Intervenor. HYATT, Board Judge. Pragmatics, Inc. has protested the award of a contract by respondent, the Department of Health and Human Services, Social Security Administration (SSA), for the acquisition of automatic data processing equipment (ADPE) services. Pursuant to statute, 40 U.S.C. 759(f)(3) (1988), Pragmatics has timely requested that the Board suspend respondent's delegation of procurement authority (DPA) with respect to the requirements to be purchased. SSA has contested protester's request for an interim suspension, contending that urgent and compelling circumstances which significantly affect the interests of the United States preclude the imposition of a suspension pending issuance of the Board's decision because the agency has no viable alternative to proceeding with the contract. Pragmatics disagrees, maintaining that the agency may either perform the subject services in-house or extend its contract with the incumbent so as to obtain the services from that source until the protest is decided. After reviewing the testimony and exhibits received in evidence at the hearing, we find that the ADPE support services to be acquired are critical in nature and that urgent and compelling circumstances will not permit suspension of SSA's DPA pending resolution of the protest. Accordingly, the suspension request is denied. Background Under request for proposals (RFP) SSA-RFP-95-1781, respondent solicited offers from eligible small businesses to furnish experienced and qualified personnel to provide expert systems software engineering services for SSA's computer systems. The RFP contemplated the award of an indefinite quantity, level of effort contract with fixed, fully-loaded labor rates over a base year and four option years. Respondent's Exhibit 2. The contract contemplated by the solicitation was a follow- on to contract number 600-90-0132, which had been awarded to COMPEX Corporation, the incumbent contractor, in 1990. COMPEX was not eligible to bid on the subject procurement because it has since graduated from the 8(a) program. Instead, COMPEX teamed with Pragmatics. Transcript at 185-87. Two offerors, Pragmatics and Diez Management Systems, Inc., competed for the award. Both offerors offered many of the COMPEX employees for the key positions. The contract was awarded to Diez on January 3, 1995. Transition has begun, with three of the COMPEX employees beginning employment with Diez, and others scheduled to begin work for Diez at various times between now and February 16. Respondent's Exhibit 5. The subject contract is administered by SSA's Office of Systems Operations (OSO) in support of its own requirements and those of the Office of Telecommunications. Transcript at 31. The required work under the contract is subsectioned into eight activity areas. The first five areas support OSO requirements; the last three support Office of Telecommunications needs. Transcript at 34; Respondent's Exhibits 4, 5. Activity area one is for the provision of mainframe software support. The contractor provides three people for this task; these individuals have principal responsibility for supporting the operating systems on SSA's large IBM mainframes and associated program products. All three incumbent employees are transferring to Diez. In addition to providing on-going support for the systems, these three contractor employees are in the process of bringing eight of SSA's remote data centers into the national computer center processors. Transcript at 46-52. Activity area two calls for contractor support of SSA's integrated database management systems (IDMS). This system is at the core of SSA's modernized applications and, if not available, results in the inability of personnel in the field offices to take or process a claim. This database must be in operation for employees in the field to interview a benefits applicant and establish an initial claim in the system or update an existing claim. In addition, contractor employees are on an extremely tight schedule to update the IDMS to the next version to ensure that vendor support does not lapse. Two contractor employees are responsible for this function. Transcript at 53-56. Activity area three, referred to as "expert security support," relates to services needed to support SSA's security access software package. This is the software that permits users to log onto the system, and controls privileges assigned to various classes of users who are permitted to access the system. When this package is unavailable, employees are unable to get onto the system to perform their job functions. Transcript at 59-61. A witness described this as "probably the single most fragile piece of software that has the potential for affecting all eight of [SSA's] programmatic processors as well as the other processors in the other complexes." Transcript at 61. This activity area is supported by two contractor employees. One of these employees, recognized as the "preeminent expert" at SSA, has already transferred to Diez. Although some senior SSA employees could attempt to perform some of his functions, they would take twice as long to do it. And, there are some things that the SSA employees simply could not even attempt. Transcript at 61. Activity area four is library integrity support, which involves tracking changes made to the system's architecture and application programs. All changes require the issuance of releases which must go through a tightly controlled transition into SSA's library management. This is done over the weekend, and every Monday morning there is a period in which there is concern about the possible impact on the system. It is essential to maintain this function to know what has changed and to be able to troubleshoot if problems arise. This function is performed solely by contractor employees. SSA does not have employees that can effectively perform this function. If it is not performed satisfactorily, SSA could not count on the integrity of its library of changes and there would be chaos when the system acted up for any reason. Transcript at 62-63. Activity area number five is "teleprocessing system software support." The teleprocessing system is the cornerstone of SSA's modernized software applications. Outages in this area would affect the public in attempts to obtain information over SSA's 800 number. When the public calls in, they reach a teleservice representative, who is sitting at a terminal. The representative needs to be able to access the computers to answer queries or to update a person's database with such items as address changes. Without proper support, early indicators of degradation of the computer systems would be missed and the window of opportunity to implement abatement action before a major problem occurs could be lost. Without access to the support provided under the contract, outages would occur more frequently and on a more drastic level. Contractor personnel are essential to the process of "waking up" the system in the morning and ensuring the integrity of batch jobs that were processed overnight. Transcript at 65-70. Activity areas six through eight involve functions of the Office of Telecommunications. This office is responsible for all areas of communications within SSA, including local area and wide area networks. Transcript at 118-121. Activity area six involves analysis of the network, particularly on off-shift hours such as early morning, to make sure there are no problems that could cause a significant network outage. If the networks are not operating, field personnel cannot access the mainframe. Even if the system is not completely down, response time may be slowed, causing a queue to build up on the network. People calling the 800 number would repeatedly get busy signals. In addition to inconveniencing the public, checks could be delayed as a result of the inability to receive information in a timely manner. With the networks down, field offices would be unable to process claims. SSA no longer takes paper claims -- all information is input immediately onto a terminal on the network. Transcript at 124-25. Activity areas seven and eight of the contract involve somewhat new responsibilities, also involving the networks, that were not performed under the incumbent's contract. Transcript at 131-33. Contractor personnel are vital to the integrity of the network, particularly because this office of SSA is also short staffed and is experiencing a curtailment in overtime. The networks are particularly sensitive. Even a momentary glitch can cause 30 minutes or more of downtime. If the contractor personnel were unavailable for any reason, reliability of the network would be significantly impaired. Transcript at 124-26. Although some of SSA's very senior people are also skilled in this area, there are not enough of them to keep up with the contractor work and also perform their own interrelated functions. Absent the contractor people, the lack of staffing would result in severe risk of unacceptable outages. Transcript at 126-27. Keeping the SSA computer networks and mainframes fully operational at all times is critical to performance of the agency's mission. SSA's computer operations number among the largest and most complex in the country. The vast amount of information processed by SSA for the purpose of determining entitlement to and distribution of benefits is maintained on- line. For the most part, the agency does not even accept paper applications from the public any more. Thus, the SSA employees responsible for obtaining this information must be able to have constant access to the computers to be able to process information. Transcript at 149-63. This time of year has historically been the peak season for SSA to process "transactions." An SSA official defined a transaction as "an individual sitting at a terminal" who hits "the enter button on the terminal sending information to Baltimore where it's processed in the computer and the response goes back out to [the field]. That is one transaction." Last year at this time, SSA was running in the range of 16.5 to 17 million transactions per day. An all time peak transactions record was reached last week with 19.2 million transactions per day. This is expected to be exceeded in February, which is the most crucial month, with 20 million plus transactions to be handled per day. Transcript at 34-36, 151-52; Respondent's Exhibit 3. During this peak period, continuity in the maintenance of the integrity and continuity of SSA's computer operations is essential. The extremely high utilization levels of operation of the computer systems during this peak period will cause the systems to become unstable, creating a high risk of outages. One of the unique capabilities provided by the contract employees is the ability continually to monitor the ongoing operation of the systems. These technicians are able to detect circumstances which will lead to degradation of the systems and take actions to abate problems and return the systems to normal operation, thus averting possible system shutdowns. Transcript at 40-41. This is particularly important because restarting the systems from scratch will generally mean a multiple hour outage. Transcript at 42. Several agency officials testified that it is not feasible to cover the agency's needs for these essential services using in-house personnel. Although there are some senior SSA employees who are capable of providing some of the services, they have other pressing duties with respect to the maintenance of these computer systems, as well. SSA contracts out for these services because it does not have ability to perform them using in-house personnel. To the extent that SSA has an equivalent level of expertise in-house (which it does not for all activities), SSA does not have the quantity of employees with such qualifications to cover the systems for the requisite fourteen hour on-line window during the week, nor does it have the resources to bring in-house staff in for weekend coverage. This is principally because of the budgetary slashes in SSA overtime. Transcript at 42, 52. Without the availability of the contract employees, given the tremendous stress on the systems during the peak period, the systems will fail more frequently and will be off- line for more extended durations. To this extent this occurs, transactions will not be posted timely, records will not be accurate and up to date, and over and under payments will occur. Transcript at 52. To summarize, without contract support, SSA is not able to provide the level of coverage necessary to ensure these areas are adequately supported so as to avoid outages and significant periods of downtime that would have an immediate and drastic adverse affect on SSA's ability to process and issue benefit payments. The contract with COMPEX was entered into pursuant to a delegation of authority given to SSA by the Department of Health and Human Services. Although the Federal Information Resource Management Regulation (FIRMR) now requires agencies to obtain a DPA from GSA to procure ADP services, in 1990, when the contract award was made, there was no such requirement. Although the fourth option year of the contract and the concomitant DPA issued by HHS was scheduled to expire on January 9th of this year, SSA sought and obtained an amendment of the DPA to cover an extension of COMPEX's contract through the transition period with Diez. HHS extended the DPA through February 28. The contract with COMPEX is presently scheduled to expire on February 15, 1995, however, because the authorized amount under the DPA will be reached by that date. The contracting officer testified that no effort had been made to obtain an increased amount under the existing DPA, essentially because this was perceived to be a more difficult undertaking than seeking a simple extension of time. Transcript at 171-80. At this point in time, some of the COMPEX employees have already begun to work for Diez. In fact, COMPEX has 13 employees supporting the contract; Diez has 11.[foot #] 1 Transcript at 72; Respondent's Exhibits 4, 5. Thus, SSA is concerned that COMPEX, even if its contract could properly be extended, would not be able to provide the necessary level of coverage to ensure that integrity of operations is maintained. Transcript at 44. The Vice President of COMPEX testified that COMPEX would be willing to continue to perform under its contract through the period covered by any suspension. COMPEX would perform these services at the lower rates quoted in the Pragmatics offer. Transcript at 233. Protester's Exhibit 3 was offered to demonstrate COMPEX's ability to perform the needed services. The COMPEX official also testified that the individuals listed in the exhibit had stated a willingness to work for COMPEX during this period, even if they had already transferred to Diez. Transcript at 234. The contracting officer's technical representative (COTR) testified that COMPEX's plan to cover the services during a ----------- FOOTNOTE BEGINS --------- [foot #] 1 Nine of the existing COMPEX employees are scheduled to rollover into the Diez contract. These people have remained on the COMPEX payroll for a variety of reasons such as leave and medical coverage. All are scheduled to report to work for Diez no later than the contract start date of February 16, however. Respondent's Exhibit 5; Transcript at 73. ----------- FOOTNOTE ENDS ----------- suspension period was not the equivalent of full contract performance. For example, COMPEX has proposed a replacement project manager who has no prior experience with the contracted services or with SSA in general. In addition, COMPEX has proposed fewer than the full complement of 21 employees. This is particularly problematic with respect to activity area one. There, three employees are required. COMPEX has listed only two, which is insufficient to ensure coverage, especially during this peak usage period. Transcript at 284-85. Others areas are also not adequately covered under COMPEX's plan. Transcript at 286- 87. Discussion Under the Brooks Act, upon the request of a protester, the Board is required to suspend an agency's delegation of procurement authority to acquire goods and services under the protested contract unless the Government is able to demonstrate that urgent and compelling circumstances, significantly affecting the interests of the United States, do not allow it to wait for the decision of the Board. 40 U.S.C. 759(f)(3) (1988). In meeting this standard, respondent must show that the effect of a suspension would be "drastic, direct and unavoidable through use of alternative methods of proceeding in order for a request for suspension to be denied." Spectrum Leasing Corp., GSBCA 9881-P, 89-1 BCA 21,513, at 108,357, 1989 BPD 28, at 3; accord Vista Computer Services, Inc. v. Department of Transportation, GSBCA 12590-P, 94-1 BCA 26,438, at 131,554, 1993 BPD 278, at 2. In the case of contracts for services the Board has further observed: Where a services contract is at issue . . . the agency frequently . . . must have the subject labor if it is to avoid cessation or degradation of mission-critical functions. Furthermore, the harm to the protester in having contract performance continue is more speculative; if suspension does not occur, a successful protester may ultimately secure the entire rights to perform under the contract, less a short period of time. For an agency to make the requisite showing to circumvent a suspension order is consequently simpler in a protest of a procurement of services than it is in an action involving the acquisition of goods. Sector Technology, GSBCA 10566-P, 90-2 BCA 22,865, at 114,854, 1990 BPD 79, at 6. There is little dispute that the services acquired under the contract are critical to the continued integrity of SSA's national computer systems and networks and that the mission of the agency would be severely and adversely affected if such services were not available to SSA. The disagreement between protester and respondent focuses principally on whether it is necessary to permit SSA to proceed with the award to Diez or whether it is possible to ensure the continuity of services while still suspending SSA's DPA. The Government contends that there is no feasible alternative to proceeding under the Diez contract. It argues that COMPEX has graduated from the small business program and is not eligible to continue providing these services under an extension of the existing contract now that the fourth option year has been completed. See 13 CFR 124.318(c) (1994). In addition, SSA argues that the delegation of procurement authority cannot readily be revised to permit continuation of the COMPEX contract because that would require increasing the amount authorized under the existing DPA as well as increasing the time for performance. Thus, SSA does not believe it is in a position to continue with the incumbent's contract as a means of obtaining contract employee services. The evidence concerning these two arguments is less than conclusive, however. First, SSA has not asked HHS for a revision of the DPA to increase the time of performance and the amount of the DPA to cover the period in question. Second, as protester also points out, the contract with COMPEX has been amended once already, subsequent to that company's graduation from the 8(a) program, to extend performance beyond the completion of the fourth option year to facilitate an orderly transition from COMPEX to Diez.[foot #] 2 Although these arguments do not entirely convince the Board that it should deny the suspension request, there are circumstances that do persuade us that SSA's DPA should not be suspended. First, the evidence of record abundantly supports the conclusion that SSA cannot adequately take care of these computer support needs by assigning in-house personnel to cover for the period of the suspension. In addition, several former COMPEX employees have already left the employ of that company, some to go to work for Diez on this same contract. Admittedly, COMPEX has stated its desire to continue with the contract and believes that it could provide the needed services. The plan it provided in the hearing, however, reflected fewer employees than are presently called for under the contract, and assumes that some employees now working for Diez, will return to COMPEX pending a decision on the merits of this protest. As the Board pointed out ----------- FOOTNOTE BEGINS --------- [foot #] 2 SSA asserts that the cited Small Business Administration (SBA) regulation precludes new contract action under the COMPEX contract because that firm has graduated from the 8(a) program. It reconciles its action in extending the contract from January 9 through February 15 as consistent with a contract clause and a Federal Acquisition Regulation (FAR) clause relating to continuity of services. Transcript at 187-91. ----------- FOOTNOTE ENDS ----------- in Vista, the Government is not required to risk an extension of the incumbent's contract when it is not at all clear that that company continues to be in a position to provide the necessary level of services. Because of this, we conclude that SSA does not have a viable alternative that would permit it to obtain the necessary services while a suspension is in effect. Decision Protester's request for a suspension of respondent's delegation of procurement authority to acquire the subject ADPE services is DENIED. ________________________________ CATHERINE B. HYATT Board Judge