B-216719, NOV 28, 1984, 84-2 CPD 548

B-216719, NOV 28, 1984, 84-2 CPD 548

CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - POTENTIAL SUBCONTRACTORS - RESTRICTIVE SPECIFICATIONS ALLEGATIONS DIGEST: POTENTIAL SUBCONTRACTOR IS NOT AN INTERESTED PARTY ENTITLED TO PROTEST THE REJECTION OF A PROSPECTIVE PRIME CONTRACTOR'S PROPOSAL OR TO PROTEST THE ALLEGED RESTRICTIVENESS OF A SOLICITATION WHERE ITS PROTEST IS NOT FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS.

STORAGE TECHNOLOGY CORPORATION:

STORAGE TECHNOLOGY CORPORATION (STC) PROTESTS THE REJECTION OF A PROPOSAL SUBMITTED BY FEDERAL DATA CORPORATION UNDER A REQUEST FOR TECHNICAL PROPOSALS (RFTP) NO. N66032-84-B-0010 ISSUED BY THE NAVY'S AUTOMATIC DATA PROCESSING SELECTION OFFICE. THE NAVY ISSUED THE RFTP AS THE FIRST STEP OF A TWO-STEP PROCUREMENT FOR PLUG-TO-PLUG COMPATIBLE EQUIPMENT TO SUPPORT IBM 4341 AND AMDAHL 470/V7 MAINFRAMES USED BY THE MARINE CORPS. STC SAYS THE RFTP INCLUDES A REQUIREMENT FOR A CACHE MEMORY FEATURE THAT, AS CONSTRUED BY THE NAVY, IS ARBITRARY AND UNDULY RESTRICTIVE. IN THE ALTERNATIVE, STC ARGUES THAT ITS EQUIPMENT COMPLIES WITH THE SPECIFICATION AND THE REJECTION OF FEDERAL DATA'S PROPOSAL WAS IMPROPER. WE DISMISS THE PROTEST.

THE NAVY HAS FILED A PRELIMINARY REPORT IN WHICH IT REQUESTS THAT WE DISMISS THE PROTEST. THE AGENCY POINTS OUT THAT THE CLOSING DATE FOR RECEIPT OF TECHNICAL PROPOSALS WAS AUGUST 27, 1984, BUT THE PROTEST WAS NOT FILED UNTIL OCTOBER 5. IT CONTENDS THAT THE PROTEST IS UNTIMELY INSOFAR AS STC CONTENDS THE RFTP WAS DEFECTIVE. WITH RESPECT TO THE REMAINDER, THE NAVY ASSERTS THAT STC IS IN THE POSITION OF A PROSPECTIVE SUBCONTRACTOR AND DOES NOT HAVE A SUFFICIENT DIRECT INTEREST TO PROTEST UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 21 (1984).

STC HAS SUBMITTED COMMENTS ON THE AGENCY REPORT. IT CONTENDS THAT THE PROTEST IS TIMELY BECAUSE IT WAS NOT CLEAR FROM THE RFTP THAT ITS EQUIPMENT WAS EXCLUDED. STC STATES IT SUBMITTED DESCRIPTIVE DATA TO THE AGENCY PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS AND WAS LED TO BELIEVE THE EQUIPMENT MET THE RFTP REQUIREMENT.

FURTHER, STC ASSERTS IT IS A PROPER PARTY TO PROTEST BECAUSE NO OTHER PARTY HAS A GREATER INTEREST IN INTERPRETING THE LANGUAGE OF THE RFTP OR IN ASSURING THAT THE AGENCY PROPERLY EVALUATES THE STC EQUIPMENT. IN THIS REGARD, STC POINTS OUT THAT FEDERAL DATA SUBMITTED TWO PROPOSALS, ONE OFFERING STC'S 8880/8890 CONTROLLERS AND 8380 STORAGE UNITS AND THE OTHER OFFERING IBM 3380 TECHNOLOGY. THUS, FEDERAL DATA WAS NOT ELIMINATED FROM THE COMPETITION WHEN ITS STC-BASED PROPOSAL WAS ACCEPTED. FINALLY, STC STATES THAT IT IS THE ONLY PRODUCER OF CACHE MEMORY SYSTEMS OF THIS TYPE, OTHER THAN IBM.

WE DO NOT FIND IT NECESSARY TO ADDRESS THE TIMELINESS OF STC'S PROTEST CONCERNING RESTRICTIVENESS BECAUSE WE THINK STC IS NOT AN INTERESTED PARTY WITH RESPECT TO EITHER OF THE ISSUES RAISED.

UNDER OUR PROCEDURES, A PARTY MUST BE "INTERESTED" BEFORE WE WILL CONSIDER ITS PROTEST. 4 C.F.R. SEC. 21.1(A). WHETHER A PARTY IS SUFFICIENTLY INTERESTED DEPENDS UPON THE DEGREE TO WHICH ITS INTEREST IN THE OUTCOME IS BOTH ESTABLISHED AND DIRECT. IN GENERAL, WE DO NOT CONSIDER A PARTY'S INTEREST TO BE SUFFICIENT WHERE THAT PARTY WOULD NOT BE ELIGIBLE FOR AWARD WERE THE ISSUES RAISED RESOLVED IN ITS FAVOR. SEE AMERICAN HICKEY CO., B-210252, MAR. 9, 1983, 83-1 CPD PARA. 235. ORDINARILY, THEREFORE, OUR OFFICE DOES NOT REVIEW SUBCONTRACTOR PROTESTS.

IT IS CONSISTENT WITH THIS VIEW THAT WE HOLD THAT FEDERAL DATA, NOT STC, IS THE DIRECTLY INTERESTED PARTY FOR THE PURPOSE OF PROTESTING THE REJECTION OF FEDERAL DATA'S PROPOSAL. SEE RADIX II INC., B-208557.3, NOV. 29, 1982, 82-2 CPD PARA. 484. OUR VIEW, HOWEVER, THAT STC IS ALSO NOT SUFFICIENTLY INTERESTED TO ASSERT THAT THE SPECIFICATION, AS CONSTRUED BY THE NAVY, ALLOWED ONLY IBM PRODUCTS REQUIRES SOME EXPLANATION. WHILE OUR PRIOR DECISIONS INDICATE THAT A PROTESTER LIKE STC WHICH FILES A PROTEST AFTER BID OPENING OR THE RECEIPT OF INITIAL PROPOSALS MIGHT NOT BE CONSIDERED TO BE AN INTERESTED PARTY (SEE, E.G., EDISON CHEMICAL SYSTEMS, INC., B-212048, MAR. 27, 1984, CPD PARA. 353, AMERICAN HICKEY CO., SUPRA) WE HAVE CONSIDERED SOME POTENTIAL SUBCONTRACTORS TO BE INTERESTED FOR THE PURPOSE OF PROTESTING ALLEGEDLY RESTRICTIVE SPECIFICATIONS.

GENERALLY, A SUBCONTRACTOR MAY BE AN INTERESTED PARTY WHEN NO INTERMEDIATE PARTY HAS A GREATER INTEREST IN THE ISSUES RAISED AND THE POTENTIAL SUBCONTRACTOR'S INTEREST WOULD BE INADEQUATELY PROTECTED IF THE BID PROTEST FORUM WERE NOT AVAILABLE. RADIX II INC., SUPRA. APPLYING THIS STANDARD, STC WOULD HAVE BEEN AN INTERESTED PARTY TO PROTEST A DEFECT IN THE RFTP PRIOR TO THE CLOSING DATE FOR RECEIPT OF TECHNICAL PROPOSALS BECAUSE, IF THE RFTP REQUIREMENT WAS RESTRICTIVE, THE RESTRICTION WOULD HAVE A SIGNIFICANT IMPACT ON ITS ABILITY TO PERSUADE PROSPECTIVE PRIME CONTRACTORS TO OFFER STC'S PRODUCT.

WE NOTE, HOWEVER, THAT ONCE THE TIME FOR SUBMITTING A PROPOSAL LAPSES THE FIELD OF COMPETITION IS SET, CONCERN OVER THE PROPRIETY OF THE SPECIFICATIONS USUALLY IS INCIDENTAL TO THE SELECTION OF AN AWARDEE, AND THE ROLE PLAYED BY POTENTIAL SUBCONTRACTORS IS REDUCED TO PROSPECTIVE PRIME CONTRACTORS' EFFORTS TO OBTAIN AWARD. NORMALLY, THE ONLY FIRMS THAT RETAIN A SUFFICIENT INTEREST TO INITIATE A PROTEST ARE THOSE THAT, HAVING SUBMITTED A COMPETITIVE PROPOSAL, REMAIN IN CONSIDERATION FOR AWARD. CF. VYCOR CORP., ET AL., B-212867, ET AL., FEB. 15, 1985, 84-1 CPD PARA. 205 (RECOGNIZING THAT A POTENTIAL SUBCONTRACTOR'S CONCERNS MAY BE CONSIDERED WHERE THE DISAPPOINTED OFFEROR FILES A PROTEST ON THE SAME BASIS AS ITS POTENTIAL SUBCONTRACTOR). WE THEREFORE DO NOT THINK THAT THE EXCEPTION ALLOWING CONSIDERATION OF SUBCONTRACTOR CHALLENGES OF RESTRICTIVE SPECIFICATIONS ORDINARILY SHOULD BE APPLIED TO PROTESTS SUCH AS STC'S THAT ARE FILED AFTER THE BID OPENING OR PROPOSAL SUBMISSION DATE.

WE ALSO REJECT A RELATED ARGUMENT BY STC THAT IT IS AN INTERESTED PARTY BECAUSE, WERE IT TO PREVAIL ON THE MERITS AND WERE THE NAVY'S REQUIREMENT RECOMPETED, IT COULD SUBMIT A PROPOSAL AS A PRIME CONTRACTOR. HAD STC WANTED TO COMPETE IN THAT CAPACITY, IT SHOULD HAVE DONE SO INITIALLY. STC'S DISCOVERY AFTER THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS OF A POSSIBLE DEFECT IN THE NAVY'S INTERPRETATION OF THE RFTP CAUSED IT NO INJURY AND GAVE RISE, IN OUR VIEW, TO NO NEW BASIS ON WHICH IT CAN ASSERT INTERESTED PARTY STATUS.

THE PROTEST IS DISMISSED.