Best Power Technology Sales Corp. v. Austin, Nos. 92-1118

• Citation: 984 F.2d 1172
• Decision Date: 21 January 1993
• Docket Number: 92-1254,Nos. 92-1118
• Parties: 38 Cont.Cas.Fed. (CCH) P 76,468 BEST POWER TECHNOLOGY SALES CORPORATION, Appellant, v. Richard G. AUSTIN, Administrator, General Services Administration, Appellee. BEST POWER TECHNOLOGY SALES CORPORATION, Appellee, v. Richard G. AUSTIN, Administrator, General Services Administration, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1172

984 F.2d 1172

38 Cont.Cas.Fed. (CCH) P 76,468

BEST POWER TECHNOLOGY SALES CORPORATION, Appellant, v. Richard G. AUSTIN, Administrator, General Services

Administration, Appellee.

BEST POWER TECHNOLOGY SALES CORPORATION, Appellee, v. Richard G. AUSTIN, Administrator, General Services

Administration, Appellant.

Nos. 92-1118, 92-1254.

United States Court of Appeals, Federal Circuit.

Jan. 21, 1993.

Gerard F. Doyle, Doyle & Backman, Washington, DC, argued for appellant. With him on the brief was Ron R. Hutchinson. Of counsel was Pamela J. Reiner.

Thomas D. Dinackus, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, DC, argued for appellee. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and James M. Kinsella, Asst. Director. Also on the brief were Stuart Young, Christine Williams and Seth Binstock, Office of General Counsel, General Services Admin., of counsel.

Before NIES, Chief Judge, MAYER and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

Best Power Technology Sales Corporation (Best) appeals a final decision of the General Services Administration (GSA) Board of Contract Appeals (GSBCA or Board). ¹ In that decision, the GSBCA denied Best's protest of GSA's rejection of Best's offer to enter into a contract under GSA's Multiple-award Schedule (MAS) program to provide uninterruptible power supplies (UPSs). ²

For its part, the government appeals the GSBCA's holding that it had jurisdiction under the Brooks Act, 40 U.S.C. § 759 (1988) (the Act), to hear Best's protest. Alternatively, the government urges us to affirm the GSBCA's denial of the protest.

Because we conclude that the GSBCA did not have jurisdiction to hear Best's protest, we reverse and remand with directions to dismiss the protest. We do not reach the merits.

I. BACKGROUND

MASs are part of GSA's Federal Supply Schedule program, which "provides Federal agencies with a simplified process of acquiring commonly used supplies and services in varying quantities." 48 C.F.R. § 38.101(a)(1991). Under the MAS program, contracts are negotiated and awarded by GSA to manufacturers and suppliers of the same generic types of supplies and services at specific prices. 48 C.F.R. § 38.102-2(a)(1991). GSA uses MAS contracts when "(1) it is not practical to draft specifications or other descriptions for the required supplies or services and there are multiple suppliers able to furnish similar commercial supplies or services; ... or (2) selectivity is necessary for ordering offices to meet their varying needs." 48 C.F.R. § 38.102-2(b) (1991). Once a manufacturer or supplier has been awarded a MAS contract for a particular type of supply or service, that manufacturer's or supplier's product is placed on the MAS for that supply or service at a particular price.

Several manufacturers or suppliers of different but comparable products may simultaneously have contracts under one MAS, if each offers the best price for a supply or service which has unique features. An agency can then choose, from the MAS, the supply or service with the features it needs and purchase that supply or service on the terms that GSA has previously negotiated with the particular manufacturer or supplier.

UPSs (or UPS units) are items for which the government has a need. A UPS protects the equipment to which it is connected from the effects of a power interruption by automatically sending power from its (the UPS's) batteries to the connected equipment whenever the normal flow of current from power lines is interrupted. UPSs are used to ensure a steady flow of "clean" power to any connected equipment which the user desires to be unaffected by power failures and fluctuations.

Prior to 1989, GSA negotiated MAS contracts for UPSs under two separate schedules: Federal Stock Classification (FSC) Group 66, Part II, section K (instruments and laboratory supplies), in which UPSs were classified as "ADPE support equipment"; and FSC Group 70, Part I, sections B and C (general purpose automatic data processing equipment, end-user computers, equipment used primarily off line, and software). In 1989, to correct what it termed "the erroneous classification" of UPSs under the MAS program, GSA removed the UPS categories from FSC Group 66 and FSC Group 70 and created a single UPS category in FSC Group 61 (Electric Line and Power Distribution Equipment), beginning March, 1991. GSA Internal Mem. (Jan. 6, 1989).

On July 27, 1990, GSA issued Amendment No. 2 of Solicitation 7FXI-86-88-6109-B under FSC Group 61 (the Solicitation). The Solicitation invited offers for MAS contracts to furnish to government agencies the supplies and services listed in the Solicitation. UPSs were among the items of equipment for which contracts were sought. Specifically, Item 412-14 of the Solicitation, under "New Items," called for "Uninterruptible Power Supplies," without further explanation.

Best manufactures UPS units specifically designed for use with data processing equipment. While other companies also make UPS products for data processing equipment, Best's products are intelligent and interactive. They can monitor a protected device and, if necessary, shut it down in an orderly fashion, thereby preventing data stored in the protected device from being lost.

Best submitted an initial proposal in response to the Solicitation on August 24, 1990. In the proposal, Best offered its full line of UPS products. After the proposal was submitted, GSA and Best entered into negotiations over the prices at which Best would offer its products to government users if a contract was signed and the products were placed on the MAS. Under the MAS program, GSA's policy is to seek a discount equal to or greater than the discount which the supplier offers to its best customers. See GSA's 1982 Multiple-award Schedule Policy Statement, 47 Fed.Reg. 50,242, 50,244, Nov. 5, 1982. Consequently In response to the protest, GSA argued that the GSBCA was without jurisdiction because the Solicitation was not subject to the Brooks Act, while, on the merits, GSA contended that it had properly rejected Best's offer. The Board rendered its decision on November 13, 1991. After concluding that it did have jurisdiction under the Brooks Act, the GSBCA denied Best's protest. Best's appeal and the government's cross appeal to this court followed.

                the focus of the negotiations between GSA and Best was upon GSA's insistence that Best give the government the same discount Best gives its two largest customers.   On August 1, 1991, following Best's continued refusal to offer the government the same discount it gives these customers, GSA rejected Best's best and final offer of June 18, 1991, and refused to place Best's products on the MAS.   Best protested the rejection to the GSBCA on August 14, 1991, purportedly pursuant to the Brooks Act
                

II. DISCUSSION

A.

The Brooks Act states that the GSBCA has jurisdiction to hear protests "in connection with any procurement conducted which is subject to [the Act]." 40 U.S.C. § 759(f)(1) (1988). At the same time, the Act authorizes GSA "to coordinate and provide for the economic and efficient purchase, lease, and maintenance of automatic data processing equipment [ADPE] by Federal agencies." 40 U.S.C. § 759(a)(1) (1988). Thus, a given procurement is subject to the Act--and therefore to the GSBCA's jurisdiction over any protest arising therefrom--if it is one for ADPE.

In holding that it had jurisdiction under the Brooks Act to hear Best's protest, the GSBCA stated:

The protester's products are designed solely to be interconnected with computers and they automatically acquire, store, control, manipulate and display data and information. The General Services Administration solicited "uninterruptible power supplies." The products solicited were not further qualified in any way. That description included, and hence solicited, products having no relation or use with ADPE [automatic data processing equipment] as well as many products designed and purchased exclusively for use with computers. It is the latter that are involved in this protest. Therefore, we conclude that the protester's UPS products are ancillary equipment within the meaning of the Brooks Act definition of ADPE.

1991 BPD (Fed.Publications) p 318, p. 9.

In this case, we must determine, as a preliminary matter, whether the board used the correct approach in deciding the question of whether Best's protest was in connection with a procurement which was subject to the Act. As seen above, in addressing the jurisdictional issue, the GSBCA looked to the products which Best offered in response to the Solicitation, rather than to the nature of the Solicitation. This was error. In determining whether it had jurisdiction under the Brooks Act to hear Best's protest, the GSBCA should have looked to the nature of the products specified in the Solicitation rather than to the products which Best offered in response to the Solicitation.

In focusing its inquiry upon the characteristics of Best's UPSs, the GSBCA ignored the statutory scheme, which vests ADPE procurement authority in GSA. ³ Under the Board's approach, an offeror could create GSBCA jurisdiction over a non-ADPE procurement by responding to a solicitation for non-ADPE items by offering products having characteristics of ADPE. In this way, offerors in effect could undermine the procurement authority which the Brooks Act gives to GSA. We are not prepared to accept an interpretation of the statute which would yield such a result. See Haggar Co. v. Helvering, 308 U.S. 389, 394, 60 S.Ct. 337, 339, 84 L.Ed. 340 (1940) ("All statutes must be construed in light of their purpose. A reading of

                them which would lead to absurd results is to be avoided when they can be given a reasonable application consistent with their words and with legislative purpose.")   Beyond that, we need only add that if Congress had intended the approach used by the GSBCA

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