MCI Telecommunications Corp. v. U.S., 89-1307
| Decision Date | 15 June 1989 |
| Docket Number | No. 89-1307,89-1307 |
| Citation | 878 F.2d 362 |
| Parties | , 35 Cont.Cas.Fed. (CCH) 75,677 MCI TELECOMMUNICATIONS CORPORATION, Appellant, v. The UNITED STATES, Appellee, and AT & T Communications, Inc. and US Sprint Communications Company, Intervenors-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
William A. Roberts, III, Howrey & Simon, Washington, D.C., argued for appellant. With him on the brief were Lee Curtis, Anne H. Warner and Harvey G. Sherzer. Also on the brief were John Worthington, John A. Fraser and Allen S. Hammond, MCI Communications Corp., Washington, D.C., of counsel.
Martha H. DeGraff, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for appellee. With her on the brief were John R. Bolton, Asst. Atty. Gen., and David M. Cohen, Director.
C. Stanley Dees, McKenna, Conner & Cuneo, Washington, D.C., argued for intervenors-appellees AT & T Communications, Inc. With him on the brief were D. Michael Fitzhugh, William R. Stoughton, Patrick K. O'Keefe, Alvin D. Hooper and G. Ridgley Loux.
Thomas C. Wheeler, Pettit & Martin, Washington, D.C., represented U.S. Sprint Communications Co., intervenors-appellees.
Before MARKEY, Chief Judge, ARCHER and MICHEL, Circuit Judges.
MCI Telecommunications Corporation (MCI) appeals the order of the General Services Administration Board of Contract Appeals (board), GSBCA No. 9926-P (February 23, 1989), dismissing MCI's bid protest for lack of jurisdiction because MCI is not "an interested party" with respect to the contract award it seeks to overturn. We affirm.
On January 7, 1987, the General Services Administration (GSA) issued a request for proposals from contractors interested in providing telecommunications services for either of the networks to comprise the Federal Telecommunications System (FTS) 2000. The FTS 2000 networks are intended to provide the federal government with switched voice, switched data, packet switched, video transmission, switched digital integrated, and dedicated transmission telecommunications services for a ten year contract period. In response to the solicitation, AT & T Communications, Inc. (AT & T), Martin Marietta Corporation (MMC), and US Sprint Communications Company (US Sprint) submitted proposals. MCI, the would-be protestor in this case, did not participate in the bidding process. That is, although it did become a major subcontractor under MMC's proposal, it did not itself submit its own proposal at any time during the proposal period.
After reviewing the proposals which were submitted, the GSA, on December 7, 1988, awarded the contract for one of the FTS 2000 networks to AT & T, and for the other to US Sprint. Believing that AT & T's proposal failed to conform with material, mandatory requirements of the solicitation, and that the GSA, after awarding that contract to AT & T, impermissibly waived mandatory contract requirements rather than resolicit the contract, MCI sought to challenge the award of the contract by bringing a protest before the GSA board. The Competition in Contracting Act, 40 U.S.C. Sec. 759 (Supp. V 1987), subsection (f), provides for the board's resolution of bid protests for the type of automatic data processing equipment needed for the FTS 2000 networks. Under subsection (f)(1), the board is empowered to hear such protests upon request of "an interested party."
[T]he term "interested party" means, with respect to a contract or proposed contract described in subparagraph (A), an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.
40 U.S.C. Sec. 759(f)(9)(B) (emphasis added).
After MCI filed its protest, AT & T and US Sprint, as awardees, moved for and were granted status as intervenors of right. Following a pre-hearing conference, GSA and AT & T filed motions to dismiss the protest, alleging various infirmities in MCI's protest, including that MCI is not an interested party. With respect to the interested party issue, MCI responded by arguing that, although it was not an "actual offeror or bidder" with respect to the original solicitation, it is a "prospective bidder or offeror" in the event of a resolicitation, and that its economic interest is directly affected by the award to AT & T.
On February 23, 1989, the board ruled that MCI was not an interested party and, therefore, dismissed MCI's protest. Accepting that MCI was not an actual bidder, the board considered whether MCI is properly viewed as a prospective bidder. The board determined that it is probable that if acceptance of AT & T's alleged nonconforming proposal were ruled impermissible, the likely remedy would be a further round of negotiations with AT & T or a direct award to another offeror. Therefore, the board reasoned, a resolicitation is not likely and thus MCI is not likely ever to have the opportunity to submit a bid on the network. Accordingly, in the board's view, MCI is not a prospective bidder. Since MCI was neither an actual nor prospective bidder, it could not be an interested party. MCI appeals based on its argument that it would be a prospective bidder on a resolicitation and, therefore, is an interested party.
OPINIONWe have jurisdiction to decide this appeal under the Contract Disputes Act, 41 U.S.C. Sec. 607(g) (1982) and under 40 U.S.C. Sec. 759(f)(6)(A) (Supp. V 1987). Under the Contract Disputes Act, the board's "decision on any question of fact shall be final and conclusive and shall not be set aside unless the decision is fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily imply bad faith, or if such decision is not supported by substantial evidence." 41 U.S.C. Sec. 609(b) (1982). We may, however, freely review the board's legal conclusions. Id.
It is undisputed that MCI did not submit a proposal in response to the FTS 2000 solicitation anytime during the proposal period and, therefore, is not an actual bidder or offeror "with respect to [the] contract" under 40 U.S.C. Sec. 759(f)(9)(B), as these words are plainly understood. Accordingly, to establish that it is an interested party, MCI must convince us that it is a prospective bidder or offeror, under a correct legal interpretation of that term. This case, then, poses the question whether a would-be protestor wishing to bring about a resolicitation on which it says it intends to bid has the necessary status, even though it failed to either bid in response to the original solicitation or to protest before the close of the proposal period for the original solicitation.
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