Andersen Consulting v. U.S.

• Decision Date: 17 March 1992
• Docket Number: No. 91-1237,91-1237
• Citation: 959 F.2d 929
• Parties: 37 Cont.Cas.Fed. (CCH) P 76,284 ANDERSEN CONSULTING, Appellant, v. The UNITED STATES, Appellee, and Computer Sciences Corporation, Intervenor.
• Court: U.S. Court of Appeals — Federal Circuit

Page 929

959 F.2d 929

37 Cont.Cas.Fed. (CCH) P 76,284

ANDERSEN CONSULTING, Appellant, v. The UNITED STATES, Appellee and Computer Sciences Corporation, Intervenor.

No. 91-1237.

United States Court of Appeals, Federal Circuit.

March 17, 1992.

William A. Bradford, Jr., Hogan & Hartson, Washington, D.C., argued for appellant. With him on the brief was Douglas R. Duberstein.

Catherine A. Christman, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for appellee. On the brief were Stuart M. Gerson, Asst. Atty. Gen. and David M. Cohen, Director, Dept. of Justice, Washington, D.C. Also Ingrid D. Falanga and Daniel J. Mazella, Financial Management Service, Dept. of Treasury, of counsel. Joan M. Bernott, Dept. of Justice, Washington, D.C., represents appellee.

James J. Regan, Crowell & Moring, Washington, D.C., argued for intervenor Computer Sciences Corp. With him on the brief was Robert M. Halperin.

Before MAYER, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and LOURIE, Circuit Judge.

MAYER, Circuit Judge.

Andersen Consulting appeals the decision of the General Services Administration Board of Contract Appeals denying its protest of an award by the Department of Treasury to Computer Sciences Corporation for the development of an automatic data processing system. GSBCA No. 10833-P, 91-1 B.C.A. (CCH) p 23,474 (1990). We affirm.

Background

Through the Financial Management Service (FMS), the Treasury Department issued solicitation RFP-FMS-89-0005 on March 15, 1989. FMS is the arm of Treasury responsible for processing the federal government's financial transactions and, in this role, it manages a daily cash flow that averages $7 billion. The solicitation was part of FMS's System 90 project aimed at upgrading and replacing its current computer capabilities. Specifically, the request for proposal (RFP) sought to acquire hardware, software, operations support, and software development of a new Payments, Claims, and Enhanced Reconciliation system (PACER).

The relevant provisions of the RFP were as follows. Before submitting their initial proposals, all bidders were required to run their hardware and software through an unwitnessed performance benchmark simulating FMS's workload. The results were to be submitted with their proposals. The hardware and software used in the benchmark were required to be identical to those listed in the initial proposal. The bidders would resubmit their benchmark results with their best and final offers (BAFOs) as long as there were no changes in the proposed software between the initial proposal and the BAFO. If the bidders wanted to offer different software in their BAFO, they would have to run another benchmark. When FMS selected an apparent awardee after the BAFOs were in hand, the apparent awardee would be required to rerun the benchmark with government witnesses to validate the results of the first one.

The RFP permitted bidders to propose either new or reconditioned hardware as long as the reconditioned equipment performed and carried the same warrantee as if it were new. The RFP required that the most current releases of software be proposed and that all software be commercially available as of the date of submission of BAFOs. The RFP defined commercial availability as:

Hardware and software products that: 1) are available for sale and delivery to Government and commercial customers as of the date of submission of Best and Final Offers (BAFOs), 2) require no further development, and 3) have been fully tested and demonstrated in the commercial or Government marketplace to meet the requirements of this solicitation.

Lastly, the proposals were to be GOSIP compliant. This required that a Communications Interface Solution (CIS) be proposed which would provide interconnectivity with Government Open Systems Interconnection Profile (GOSIP) compliant networks. In this way, the new System 90 would be able to interact with other computer systems. At a minimum, to be GOSIP compliant the proposed software was required to "support" File Transfer Access Management (FTAM) protocol, X.400 (a messaging protocol), and Virtual Terminal Protocol (VTP).

The solicitation stated that the award would be granted to "the offeror whose overall proposal offers the greatest value and most advantages to the Government." The technical proposals would be point scored and although the scores were to be given greater weight than cost, as they approached equality, cost would become a more discriminating factor. Three companies bid: Andersen Consulting, Computer Sciences Corporation (CSC), and Grumman Data Systems. CSC's technical scores ranked slightly above Andersen's and slightly below Grumman's, but CSC's evaluated price was substantially lower than either Andersen's or Grumman's. Because of the significant disparity in prices, FMS hired Cincinnati Bell Information Systems to independently analyze CSC's cost estimate. Both Cincinnati Bell and FMS concluded that the savings resulted from CSC proposing the use of reconditioned, rather than new, hardware. Andersen proposed only new hardware. FMS awarded the contract to CSC.

On appeal to the board, Andersen alleged that FMS's discussions with it were defective because FMS did not inform it of "points of weakness" in its proposal; FMS engaged in improper post-BAFO discussions with CSC; FMS's price realism analysis of CSC's BAFO was faulty; four software products offered by CSC were not in fact "commercially available" at the time BAFOs were submitted; requirements for GOSIP compliance were not met by CSC; and both of CSC's benchmarks were defective. From these allegations, the board found three errors in the procurement: (1) at the time FMS awarded the contract, it believed the software product CA-Datacom/PC to be commercially available, when in fact it was not; (2) FMS did not require CSC to run a second unwitnessed benchmark even though its proposal changed between the initial proposals and its BAFO; and (3) prior to the government-witnessed benchmark, CSC had not prepared the capability to upload the software product Ideal/Escort to the mainframe code. 91-1 B.C.A. (CCH) at 117,759.

On the first error, the board stated that CA-Datacom/PC met two of the three tests for commercial availability, that CA-Datacom/PC was a very small part of the contract, and that Andersen had not alleged any problems with the software or that it would have fared better if it also had been permitted to introduce software not commercially available. Second, "the fact that CSC did not rerun the unwitnessed benchmark has been sapped of most significance by the fact that the firm ran a Government-witnessed benchmark with precisely the same configuration of hardware and software that should have been benchmarked previously." Id. Third, the uploading utility for Ideal/Escort could likely be developed in a "man-day or less" and therefore was insignificant. Id. at 117,760. Before deciding whether to grant the protest, the board cautioned, "Any good lawyer can pick lint off any Government procurement, pundits say. We will not set aside an award, even if violations of law are found, unless those violations have some significance." Id. at 117,759. It concluded that the errors just discussed were "simply de minimis violations of law" and therefore the protest was denied. Id. Andersen appeals.

Discussion

Andersen invites us to hold as a matter of law that upon finding any errors in a procurement, no matter how minor, the board is bound to grant a protest. We decline. Andersen also requests that we reverse the board's findings that no improper post-BAFO discussions with CSC occurred, that CSC proposed Ideal/Escort as well as Ideal/PC in its BAFO, that CSC's proposal was GOSIP compliant, and that the price realism analysis was proper. We affirm the board's findings on these issues. Lastly, Andersen accuses the board of "second guessing" the agency in direct violation of our proscription in Data General Corp. v. United States, 915 F.2d 1544, 1552 (Fed.Cir.1990). We think the board did just the opposite. We review the board's conclusions of law de novo, but defer to its findings of fact unless unsupported by substantial evidence. 41 U.S.C. § 609(b) (1988); United States v. DeKonty Corp., 922 F.2d 826, 827 (Fed.Cir.1991). The board's interpretations of the applicable regulations deserve some deference because it has expertise in this area from daily exposure. SMS Data Prods. Group, Inc. v. United States, 900 F.2d 1553, 1555 (Fed.Cir.1990).

I.

The Competition in Contracting Act of 1984 (CICA), which governs this case, states:

If the board determines that a challenged agency action violates a statute or regulation or the conditions of any delegation of procurement authority issued pursuant to this section, the board may suspend, revoke, or revise the procurement authority of the Administrator or the Administrator's delegation of procurement authority applicable to the challenged procurement.

40 U.S.C. § 759(f)(5)(B) (1988) (emphasis added). The use of the permissive "may" instead of the mandatory "shall," authorizes the board to employ its discretion in determining how to handle errors in procurement. Furthermore, "[i]n making a decision on the merits of protests brought under this section, the board shall accord due weight to the policies of this section and the goals of economic and efficient procurement set forth in this section." Id. § 759(f)(5)(A). From this it follows that the board must consider the significance of errors in procurement when deciding whether to grant a protest because overturning awards on de minimis errors wastes resources and time, and is needlessly disruptive of procurement activities and governmental programs and operations.

Andersen directs us to the first board decision under the CICA, Lanier Business Prods., Inc., GSBCA No. 7702-P, 85-2 B.C.A. (CCH) p 18,033 (1985), to support its contention that every error requires that a protest be...