THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON JUNE 15, 1995 _______________________________________________ MOTION FOR SUMMARY RELIEF GRANTED IN PART: May 30, 1995 _______________________________________________ GSBCA 13256-P LA SYSTEMS, Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent, and CCL, INCORPORATED, Intervenor. Shelton H. Skolnick, Wayne Finegar, Amy Hall, and Bruce Trimble of Skolnick & Leishman, P.C., Derwood, MD, counsel for Protester. Clarence D. Long, III, Capt. Lee H. Dayton, and Robert McGrath, Office of the General Counsel, Department of the Air Force, Washington, DC; and Capt. Dudley Wireman, Department of the Air Force, Hanscom AFB, MA, counsel for Respondent. Joseph J. Petrillo and William E. Conner of Petrillo & Associates, Washington, DC, counsel for Intervenor. Before Board Judges DANIELS (Chairman), PARKER, and BORWICK. BORWICK, Board Judge. Background Protester LA Systems has challenged the award by the Depart- ment of the Air Force, respondent, of a contract for processor replacement and support to intervenor CCL, Incorporated (CCL). The procurement was conducted as a brand-name-or-equal procure- ment. Protester raises three counts. In count I, protester maintains that CCL is ineligible for award because the processors CCL proposed failed to meet the salient characteristic of "cur- rent manufacture." In count II, protester alleges that CCL's pricing methodology amounts to a contingent offer and violates restrictions in the solicitation against "all or none offers." In count III, protester alleges that the pricing methodology used by CCL amounts to a materially unbalanced offer. Respondent filed a motion for summary relief on counts II and III. CCL filed a motion for summary relief on all three counts. As to count I, LA Systems does not take issue with the facts stated in CCL's motion; nevertheless LA Systems argues that it needs discovery of facts relevant to its interpretation of the salient characteristic. We grant CCL's motion for summary relief as to count I. We conclude that the processors offered by CCL met the salient characteristic of "current manufacture" as defined in the solicitation; CCL's proposal is not ineligible for award on the basis alleged in count I. We defer ruling on respondent's and intervenor's motions for summary relief on the second and third counts; LA Systems has not had sufficient discovery to be able to respond to the motions as to those counts. Findings of Fact For the purposes of respondent's and intervenor's motions for summary relief, the following facts are not disputed. General requirements 1. The solicitation contemplated a firm fixed price, indefi- nite-delivery, indefinite quantity type contract for purchase, installation, maintenance, relocation, technical support, and data of up to seven processor complexes that would supplement or replace existing processor complexes at the Defense Information Services Organization (DISO) center, Denver, Colorado and at the DISO center, Cleveland, Ohio. Protest File, Exhibit 12 at 14, C1. The information processing complex at each DISO center consists of four Government-owned computers, associated direct access storage device (DASD) subsystems and a worldwide data communications network. Id. at 15, C.1.2.[foot #] 1 2. The anticipated contract life was sixty months after award for equipment delivery and installation, and ninety-six months after award for maintenance, relocation and technical support. Protest File, Exhibit 12 at 35, F3. ----------- FOOTNOTE BEGINS --------- [foot #] 1 Respondent made a separate award, which is not in issue in this protest, for DASD subsystems. Board Suspension Order (May 5, 1995). ----------- FOOTNOTE ENDS ----------- 3. Respondent structured the procurement as brand-name-or- equal, specifying as the brand name processors, among others[foot #] 2, the Amdahl 5995-2570M, the IBM ES 9021-740, the IBM ES 9021-821, and the IBM ES 9021-822. Protest File, Exhibit 30 (amendment 0006 to the solicitation) at 19, C.2.4.1. In addition, respondent specified brand names for three upgrade installations for the processors. The brand names for upgrade one were Amdahl 5995-357M and the IBM models ES 9021-820 and ES 9021-831. The brand names for upgrade two were the Amdahl 5995-4570M and the IBM ES 9021-860. The brand names for upgrade three were the Amdahl 5995-5670M and the IBM ES 9021-900. Id. at 19-20, C.5.2.4.2. 4. The solicitation established the minimum quantity to be ordered as one processor for the initial level. The solicitation established the maximum quantity to be ordered as seven proces- sors for the initial level and seven processors for each of the upgrade levels, for a total maximum quantity of twenty-eight processors. Protest File, Exhibit 12 at 2, B at 2. Current manufacture 5. Paragraph C.5 provides in pertinent part: Processor Complex(es) The following specification describes the minimum salient characteristics, capabilities, and capacities required for processor complexes. The equipment pro- vided shall be under current manufacture at the time of the contract award. Current manufacture as of the date of award means[:] equipment to that [sic] which has been sold and delivered to a commercial customer or other Government agency and have [sic] satisfied the customer's or agency's formal acceptance criteria at the time of contract award. . . . 5.1 Each processor complex must provide support at a minimum for the following functions and features. . . . Protest File, Exhibit 29 (Amendment 0005) at 18, C.5. 6. The solicitation provides that the definitions in the glossary are "an integral part of the terms and conditions of this contract." The glossary in the solicitation defines "cur- rent manufacture": Current Manufacture. Equipment in production with a customer base. Not beta equipment. ----------- FOOTNOTE BEGINS --------- [foot #] 2 Other brands were specified; those brands are not relevant to this decision and are not set forth here. ----------- FOOTNOTE ENDS ----------- Protest File, Exhibit 12, Attachment 5. 7. The DFAR 252.210-7000, "Brand Name or Equal" provision, incorporated in the solicitation, provided in pertinent part: (b) To be considered for award, offers of "equal" products, including products (other than the "brand name" item) of the brand name manufacture, must-- (1) Meet the salient physical, functional, and other characteristics specified in this solicitation. . . . Protest File, Exhibit 12 at 76, LA.II. The evaluation criteria provides that to be eligible for award, a submitted proposal must meet all mandatory solicitation requirements and must comply in all material respects with the requirements of law, regulations and conditions set forth in the solicitation. Id. at 117, M2. Significance of requirement of current manufacture 8. Respondent amended the solicitation numerous times, see Protest File, Exhibit 31, and did not remove the salient charac- teristic of "current manufacture." Whether CCL met the require- ment for "current manufacture" was the subject of an Air Force clarification request to CCL, which changed its proposal in section I-B to meet the requirement. Protest File, Exhibit 28, Clarification Request, Control TA 0011. CCL's proposal as it relates to current manufacture 9. CCL proposed the IBM ES 9021-740 for the initial level processor, the IBM ES 9021-820 for the level one processor, the IBM ES 9021-860 for the level two processor, and the IBM ES 9021- 900 for the level three processor. Protest File, Exhibit 26, I-C-14. 10. By letter of March 28, 1994, IBM represented: Section C5 and C6 of the referenced RFP defines current manufacture to be "equipment to that which has been sold and delivered to a commercial customer or other Government agency and have [sic] satisfied the cus- tomer's or agency's formal acceptance criteria at the time of contract award." As defined in Section C5 and C6 of the referenced RFP, the following IBM products meet the definition of "in current manufacture": 9021- 740[,] 9021-820[,] 9021-860[,] 9021-900[.] Protest File, Exhibit 26, Letter from IBM to CCL Inc. (Mar. 28, 1994). This letter was attached to CCL's proposal. Id. 11. By supplemental affidavit, IBM states that "as of the date of the award, 9021 H2's have been sold and delivered to both commercial customers and other governmental agencies in satisfac- tion of their formal acceptance criteria. The 9021 H2's are not beta equipment and are in production with a customer base."[foot #] 3 Affidavit of Pamela S. McCarthy, Large Systems/Storage Marketing Specialist Manager, IBM Govern- ment Systems (McCarthy Affidavit) (May 12, 1995) 4. The affiant states that the processors are manufactured to order and are not, and generally have not been, built for inventory stock. She states that it is customary for IBM and the CPU industry to build high-end central processing units to order. McCarthy Affidavit 2. She also states that "IBM continues to accept orders for and build 9021-H2s. They are built from new and used/remanufactured parts, which are tested and warranted as new." McCarthy Affidavit 5. These statements are undisputed, and we find them as fact. Discussion Count I In its motion for summary relief, CCL argues that since CCL proposed the brand name product in each case it has met the solicitation requirements per se. In essence, CCL maintains that as the offeror of the brand name, it is exempt from complying with salient characteristics. Respondent's Motion for Summary Relief at 6. CCL notes that DFAR 252.210-7000, the "Brand Name or Equal" provision, which was incorporated in the solicitation, requires that an "equal" product--not the specified brand name product--meet the salient characteristics. Alternatively, CCL argues that the processors proposed do meet the salient charac- teristic of current manufacture as defined in the solicitation. ----------- FOOTNOTE BEGINS --------- [foot #] 3 The figure 9021 refers to a model number of processor, not the number of processors sold and delivered. ----------- FOOTNOTE ENDS ----------- We need not rule on CCL's first argu- ment[foot #] 4, since we find that the processors offered by CCL did meet the salient characteristic of "current manufacture," as defined in this RFP, thus making CCL eligible for award in this regard. In construing "current manufacture," we must apply the term as defined in the solicitation, interpret- ing the solicitation as a whole, and giving each term meaning. Federal Computer Corp. v. Department of the Treasury, GSBCA 11872-P, 93-1 BCA 25,347, at 126,260, 1992 BPD 207, at 8. The meaning we give is the least restrictive in the absence of more limiting definitions in the solicitation. Id.; Microsolve Inc., GSBCA 8564-P, 88-1 BPD 244, 1987 BPD 244, aff'd, Microsolve v. United States, 856 F.2d 202 (Fed. Cir. 1988)- (table). There are three key phrases to the definition of current manufacture in C.5; we parse each phrase as it occurs. The first phrase is "equipment . . . which has been sold and delivered." Here, the solicitation refers to sale and delivery in the past, and the language places no limit on how far in the past the equipment may have been sold and delivered. The second phrase is "to a commercial customer or other Government agency." Note the single case. The phrase requires that the sale and delivery have been to a commercial customer or "other" Government agency. The third phrase is "and have satisfied the customer's or agency's formal acceptance criteria at the time of contract award." This means that the equipment must have satisfied the customer's needs as expressed in formal acceptance criteria at the time of con- tract award. The use of the terms "the customer" and "or agen- cy's" in the third phrase reinforces the numerical requirement of one stated in the second phrase. ----------- FOOTNOTE BEGINS --------- [foot #] 4 Although CCL's argument is based on a literal reading of the DFAR clause, the rulings of the General Accounting Office (GAO) may not provide a blanket exemption for the brand name vendor. In Moore Special Tool Co., B-228498, 88-1 CPD 89 ______________________ (Jan. 29, 1988), in a procurement incorporating DFAR 252.210- 7000, GAO sustained the contracting officer's rejection of a bid offering the brand name item for failure to meet a salient characteristic, when the bidder's accompanying descriptive literature created an ambiguity as to compliance with the salient characteristic. See also Tel-Med Information Systems, 66 Comp. _________ ___________________________ Gen. 504 (1987), 87-1 CPD 561, at 5 (where agency solicits a brand name or equal product, the agency may specify salient characteristics that go beyond the brand name when those charac- teristics represent the essential needs of the agency; in those cases, modified brand name product is required, and procuring agency should reject a bid offering a brand name product which does not show conformance with or takes exception to the modified salient characteristics). ----------- FOOTNOTE ENDS ----------- The meaning of the requirement in C.5 is evident: Equipment offered satisfies the requirement of "current manufacture" if, as of the date of contract award, the equipment had been, at some time in the past, sold and delivered to one commercial customer or government agency and if the equipment had satisfied that customer's formal acceptance criteria.[foot #] 5 It is not disputed that the IBM model processors offered by CCL meet this standard. Findings 9, 10. The solicitation's glossary definition of current manufac- ture adds a requirement which is not inconsistent with the meaning of paragraph C.5. The glossary requires that the equip- ment be "[e]quipment in production with a customer base. Not beta equipment." Finding 6. The IBM model processors are "in production" in the sense that IBM continues to build and accept orders for these processors. Finding 11. Protester argues for a different definition of "current manufacture." It says the requirement means that "equipment must be in production with a customer base, and sold, delivered and accepted at the time of contract award." Protester's Opposition to Summary Relief at 13. At a telephonic pre-hearing conference on May 23, protester's counsel clarified protester's interpreta- tion of the glossary term "in production"; he stated that pro- tester considered production to be equivalent to assembly-line manufacture at, or close to, the time of contract award. Pro- tester maintains that to meet the requirement of "current manu- facture," a vendor must be assembling, installing, and delivering processorsat a time reasonably close to contract award.[foot #] 6 Protester's interpretation ignores the establishment of an indefinite past period of time for sale and delivery of the processors in paragraph C.5 of the solicitation. Protester seeks to change the meaning of the glossary definition "in production" to assembly manufacture. IBM produces ----------- FOOTNOTE BEGINS --------- [foot #] 5 We must note that the name the Air Force gave to this salient characteristic--Current Manufacture--is a misnomer. The clause could more appropriately have been named a requirement for "installed-base" or "non-developmental item." Careful labeling of a requirement to reflect its true purpose will often avoid unnecessary litigation and waste of time for all concerned. [foot #] 6 LA Systems argues that it needs discovery of recent production data for the IBM processors to respond to intervenor's motion for summary relief on Count I. Our duty at the summary relief stage is to determine the existence of materi- al facts. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). _______________________________ The production data sought by LA Systems would be material only if we accepted LA Systems's interpretation of the salient charac- teristic. Since the production data is not material, summary relief is appropriate on the undisputed facts of record. ----------- FOOTNOTE ENDS ----------- these processors, as it has always done, to customer order, and as of contract award stands ready to produce the processors. Finding 11. It is not as if CCL has proposed the computer equivalent of a Model A Ford, an item that is no longer being built. That IBM builds these processors to order, rather than for inventory, does not change the fact that the processors are in production. The glossary cannot reasonably be construed to require a particular method of production. The cases relied upon by protester, VION Corp., GSBCA 11002- P, 91-2 BCA 23,809, 1991 BPD 8, and Tisoft, Inc., GSBCA 9438- P, 88-3 BCA 20,840, 1988 BPD 103, for a different definition of "current manufacture" are simply not on point. The solicita- tions in those cases did not contain a definition of "current manufacture"; the Board was left to rely on definitions from the dictionary. Counts II and III As LA Systems is in discovery now concerning cost methodolo- gy, it has not had an opportunity to respond to the motions for summary relief on the remaining counts. See Anderson, 477 U.S. at 257. We thus reserve ruling on the motions for summary relief as to those counts. Rule 8(g)(4). Decision CCL's motion for summary relief is GRANTED as to count I; that count is DENIED. CCL's and the Air Force's motions for summary relief on the remaining counts are RESERVED. _________________________ ANTHONY S. BORWICK Board Judge We concur: ____________________ _________________________ STEPHEN M. DANIELS ROBERT W. PARKER Board Judge Board Judge