U.S. v. International Business Machines Corp.

• Decision Date: 20 December 1989
• Docket Number: No. 89-1357,89-1357
• Citation: 892 F.2d 1006
• Parties: , 36 Cont.Cas.Fed. (CCH) P 75,772 The UNITED STATES, Appellant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1006

892 F.2d 1006

58 USLW 2432, 36 Cont.Cas.Fed. (CCH) P 75,772

The UNITED STATES, Appellant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Appellee.

No. 89-1357.

United States Court of Appeals, Federal Circuit.

Dec. 20, 1989.

Rehearing Denied Jan. 17, 1990.

Grant G. Moy, Jr., Gen. Counsel of the U.S. Government Printing Office, Washington, D.C., argued for appellant.

William J. Kolasky, Jr. of Wilmer, Cutler & Pickering, Washington, D.C. argued for appellee. With him on the brief was Peter A. Von Mehren of Wilmer, Cutler & Pickering. Of counsel were Robert F. Salvia and Bryan Lewis, of the Intern. Business Machines Corp., Bethesda, Md.

Before MARKEY, Chief Judge, and BENNETT, Senior Circuit Judge, and MAYER, Circuit Judge.

OPINION

MAYER, Circuit Judge.

The Government Printing Office (GPO) appeals the decision of the General Services Board of Contract Appeals, granting the protest of International Business Machines Corporation (IBM) to the award of a contract to another bidder on a GPO invitation for bids. International Business Mach. Corp., GSBCA No. 9703-P, 89-1 B.C.A. (CCH) p 21,389 (1988). We affirm the board's decision that it had jurisdiction to hear protests of GPO's conduct of the solicitation, reverse its decision that IBM had standing to file a protest, and vacate its decision on the merits.

Background

GPO formally advertised Invitation for Bid No. 1337888 on June 10, 1988. The sealed-bid solicitation originally specified an IBM 3084 Model Q64 or IBM 3084 Model QX6 brand name "or equal" central processing unit (CPU); it was subsequently amended at least seven times, Amendment No. 3 deleting the restriction "air cooled systems are not acceptable." This allowed vendors to bid the Amdahl 5880 CPU, which is air cooled. GPO received ten bids in response to the solicitation. With the exception of Amdahl Corporation (Amdahl) to whom, as the lowest bidder, GPO awarded the contract, every vendor bid the same IBM product configuration. PacifiCorp Capital, Inc. (PacifiCorp) and Federal Systems Group, Inc. (FSG) submitted the second-and third-lowest bids, respectively. IBM's bid was fourth-lowest.

Although both PacifiCorp and FSG complained to the GPO contracting officer that his determination on the responsiveness of Amdahl's bid was incorrect, only IBM filed a formal protest with the board. FSG and Amdahl thereafter intervened in the protest, FSG in support of IBM's position and Amdahl in support of GPO's. GPO argued that the board had no jurisdiction to entertain IBM's protest because Congress had provided GPO with a continuing exemption from the Brooks Act in the 1977 Legislative Branch Appropriations Act, Pub.L. No. 94-440, 90 Stat. 1439 (1976). Alternatively, Amdahl alleged that IBM lacked standing to protest the award because IBM was not an "interested party" within the meaning of the Brooks Act. 40 U.S.C. § 759(f)(9)(B) (Supp.V 1987).

The board rejected both of these arguments. It ruled that the 1977 Appropriations Act "and its legislative history fail to indicate an intent to extend the exemption beyond the applicable year of the Appropriations Act" and that the 1986 amendments to the Brooks Act, legislatively "overruling" Electronic Data Sys. Fed. Corp. v. General Serv. Admin. Bd. of Contract Appeals, 792 F.2d 1569 (Fed.Cir.1986), "fully confirm [that] determination." 89-1 B.C.A. (CCH) p 21,367, at 107,702. The board also held that because IBM had participated in and expended resources in an effort to obtain this procurement, it had a direct economic interest in, and therefore standing as an "interested party" to protest, the award of the contract to Amdahl. Id. at 107,704. The board affirmed this aspect of its decision on reconsideration, adding:

[I]f the protest is granted, a reprocurement to meet GPO's actual requirements could be in order. IBM has alleged that if it had been on notice that GPO was soliciting offers for a less powerful processor, it would have attempted to offer a less powerful, less expensive processor. Presumably, it would do so in any resolicitation. Accordingly, IBM's direct economic interest would be affected by the award of the contract.

89-1 B.C.A. (CCH) p 21,372, at 107,718. The board then granted IBM's protest and ordered GPO to terminate its contract with Amdahl. Id. p 21,389. GPO appeals.

Discussion

A. Jurisdiction. The Brooks Act gives the Administrator of the General Services Administration the authority to coordinate and regulate the "purchase, lease, and maintenance" of automated data processing equipment (ADPE) by federal agencies. 40 U.S.C. § 759(a)(1) (1982). The parties here agree that GPO is a "federal agency" for purposes of the Act and that the solicitation was for the purchase of ADPE. The sole jurisdictional issue is whether the exemption from the Brooks Act granted GPO as part of the 1977 Legislative Branch Appropriations Act extended beyond fiscal year 1977. ^*

We agree with the board that the language of the 1977 Appropriations Act does not evince a congressional intention to give GPO a continuing exemption from the Brooks Act. The relevant language is:

The Government Printing Office is hereby authorized to make such expenditures, ..., as may be necessary in carrying out the programs and purposes set forth in the budget for the current fiscal year for the "Government Printing Office revolving fund": ... Provided further, That during the current fiscal year the revolving fund shall be available for the hire of two passenger motor vehicles and the purchase of one passenger motor vehicle: Provided further, That funds available to the Government Printing Office may be expended to purchase, lease, maintain and otherwise acquire automatic data processing equipment without regard to the provisions of 40 U.S.C. 759:

....

Pub.L. No. 94-440, 90 Stat. 1439, 1460 (1976) (emphasis added). While the underscored provision does not itself indicate whether it was restricted to fiscal year 1977, because it is contained in an appropriations act and because it is unaccompanied by words of futurity, we presume that it was. United States v. Vulte, 233 U.S. 509, 514-15, 34 S.Ct. 664, 666, 58 L.Ed. 1071 (1914); see TVA v. Hill, 437 U.S. 153, 189-90, 98 S.Ct. 2279, 2299-2300, 57 L.Ed.2d 117 (1978). Moreover, the phrases "for the current fiscal year" and "during the current fiscal year" precede the pertinent provision in the same paragraph; the former phrase, at least grammatically, appears to control the clause within which the exemption is contained. Had Congress intended to make the exemption permanent, it knew how: it could and we believe would have used words of futurity, like "[h]ereafter, notwithstanding any other provisions of law ... ", a phrase appearing two paragraphs earlier that applies to other aspects of GPO's program. 90 Stat. at 1459.

The Public Printer himself agreed with this reading in 1977. That year, he returned to Congress to seek inclusion of the same exemption--with the sole but significant addition of the word "hereafter"--in the 1978 Legislative Branch Appropriations Act. See Legislative Branch Appropriations for Fiscal Year 1978: Hearings Before a Subcomm. of the Comm. on Appropriations, House of Representatives, 95th Cong., 1st Sess. 435, 437, 496 (1977); Legislative Branch Appropriations for Fiscal Year 1978: Hearings Before a Subcomm. of the Comm. on Appropriations, United States Senate, 95th Cong., 1st Sess. 416-17, 423 (1977). We agree with IBM that his request was denied, not because it was superfluous or based upon a misapprehension of the reach of the 1977 exemption, but because the committee considering the request had been reminded that the Brooks Act was intended to cover legislative agencies like GPO. See Legislative Branch Appropriations for Fiscal Year 1978: Hearings Before a Subcomm. of the Comm. on Appropriations, House of Representatives, 95th Cong., 1st Sess. 496-97 (1977). Congress could have agreed with GPO that the added costs and delays allegedly due to GSA involvement, see H.R.Rep. No. 94-1225, 94th Cong., 2d Sess. 31, 36, 42, were continuing but, nevertheless, declined to permanently exempt GPO from the Brooks Act to avoid potential waste and abuse in the procurement process, problems Congress considered more severe. See generally Efforts By Federal Agencies to Circumvent the Competition in Contracting Act (Part 1), Hearings Before a Subcomm. on Gov't Operations, House of Representatives, 99th Cong., 2d Sess. (1986) [hereinafter Efforts to Circumvent ].

We do not see that the source of the funds used to acquire ADPE--here the GPO Revolving Fund, which is available without fiscal year limitation--affects the analysis. Congress did not consider the source of the funds relevant in determining the applicability of the Brooks Act; nor, for that reason, does the board. See Rocky Mountain Trading Co., GSBCA No. 8958-P, 87-2 B.C.A. (CCH) p 19,840, at 100,409, 1987 WL 40900 (1987). A contrary conclusion would allow agencies to escape the Act by the expedient of using funds from an appropriate source. Nor does the fact that GPO purchased ADPE with money from the revolving fund help it in the statutory interpretation argument. It is the nature of the exemption that is at issue here, not the nature of the funds available to exploit it. Coupling a transitory exemption with a continuing fund does not bestow on the former the character of the latter.

Finally, we disagree with GPO's assertion at argument that the 1986 amendments to the Brooks Act and the accompanying legislative history do not illuminate what Congress intended by its actions in 1977 and 1978. Congress adopted the amendments in response to our holding in Electronic Data Sys. Fed. Corp. v. General Serv. Admin. Bd. of Contract Appeals, 792 F.2d 1569, 1578 (Fed.Cir.1986), that the board had protest jurisdiction only over procurements actually "conducted under" the Brooks Act and not over those that should have been so conducted. In the Paperwork...