B-219541.2, NOV 13, 1985

B-219541.2, NOV 13, 1985

CONTRACTS - FEDERAL SUPPLY SCHEDULE - AWARDS - PROPRIETY - ORDER LIMITATION EXCEEDED DIGEST: 1. AGENCY CANNOT REFUSE TO COMPETE ITS SOFTWARE REQUIREMENTS ON THE BASIS OF A DETERMINATION THAT ITS PREFERRED CONTRACTOR CAN BEST MEET ITS NEEDS WITHOUT FIRST PERMITTING THE PROTESTER TO SUBMIT A FORMAL PROPOSAL IN RESPONSE TO A WRITTEN SOLICITATION SETTING FORTH THE GOVERNMENT'S FUNCTIONAL NEEDS. CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED 2. REVERSAL OF PRIOR DECISION IS NOT WARRANTED WHERE REQUEST FOR RECONSIDERATION INDICATES IT IS BASED ON MISINTERPRETATION OF THAT DECISION. CONTRARY TO THE AGENCY'S BELIEF, DECISION DID NOT HOLD THAT GOVERNMENT MAY NOT IMPOSE REASONABLE REQUIREMENTS TO ASSURE THAT OFFERORS PROPOSE INTEGRATED SOFTWARE DESIGN APPROACHES, NOR IS THE AGENCY PRECLUDED FROM ACQUIRING DATA BASE MANAGEMENT SOFTWARE SEPARATELY.

AMERICAN MANAGEMENT SYSTEMS, INC.-- REQUEST FOR RECONSIDERATION:

THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) REQUESTS RECONSIDERATION OF OUR DECISION, AMERICAN MANAGEMENT SYSTEMS, INC., B-216998, JULY 1, 1985, 85-2 CPD PARA. 3.

THAT DECISION INVOLVED THE PROCUREMENT OF A SOFTWARE SYSTEM (FAIMS) TO SUPPORT IMPROVED FINANCIAL MANAGEMENT AT HHS, AND SPECIFICALLY, TO FACILITATE HHS' COMPLIANCE WITH THE REQUIREMENTS IMPOSED BY THE FEDERAL MANAGERS' FINANCIAL INTEGRITY ACT, PUB.L. 97-255, SEPT. 8, 1982. SUSTAINED THE PROTEST BECAUSE WE FOUND THAT AN ORDER HHS PLACED UNDER A CULLINET SOFTWARE, INC., GENERAL SERVICES ADMINISTRATION (GSA) NONMANDATORY AUTOMATIC DATA PROCESSING (ADP) SCHEDULE CONTRACT WAS OUTSIDE THE SCOPE OF THE CONTRACT AND SHOULD HAVE BEEN AWARDED COMPETITIVELY. AFFIRM THE PRIOR DECISION.

THE HHS REQUEST IS CONTAINED IN TWO DOCUMENTS-- A FORMAL REQUEST FOR RECONSIDERATION, AND A SEPARATE LETTER IN WHICH THE ASSISTANCE SECRETARY FOR MANAGEMENT AND BUDGET ADDRESSES HHS' EFFORTS TO DEVELOP ITS FINANCIAL MANAGEMENT SYSTEM. APART FROM EXPRESSING GENERAL DISAGREEMENT WITH OUR DECISION, NEITHER DOCUMENT ADVANCES ANY GROUNDS FOR REVERSING OUR DECISION THAT THE ORDER PLACED WITH CULLINET WAS OUTSIDE THE SCOPE OF THE SCHEDULE CONTRACT. HHS DOES QUESTION, HOWEVER, OTHER ASPECTS OF THIS MATTER THAT WE TREATED PERIPHERALLY IN OUR DECISION.

BRIEFLY, FAIMS REQUIRES TWO TYPES OF SOFTWARE, A DATA BASE MANAGEMENT SYSTEM (DBMS), WHICH ORGANIZES DATA STORAGE AND RETRIEVAL, AND APPLICATIONS SOFTWARE USED BY HHS PERSONNEL TO PERFORM VARIOUS TASKS SUCH AS DATA ENTRY AND RETRIEVAL. HHS SEEKS AN INTEGRATED DESIGN APPROACH IN WHICH THE DBMS MAINTAINS A COMMON AGENCY-WIDE DICTIONARY OF DATA AND IN WHICH THE APPLICATIONS SOFTWARE IS MELDED INTO THE DATA STRUCTURE CREATED USING THE DBMS.

HHS USES THE TERM "INTEGRATED SOFTWARE," HOWEVER, AS ALSO MEANING THAT THE DBMS AND APPLICATIONS SOFTWARE MUST BE ACQUIRED FROM A SINGLE VENDOR. IN CONNECTION WITH AMS' ORIGINAL PROTEST, IT ARGUED THAT IF ONE VENDOR DOES NOT SUPPLY BOTH THE DBMS AND APPLICATIONS SOFTWARE, THE AGENCY MUST ASSUME THE RESPONSIBILITY TO MAKE CHANGES TO THE APPLICATIONS SOFTWARE USING IN-HOUSE PERSONNEL AND THUS WILL ENCOUNTER COST AND DELAY WHENEVER CHANGES ARE MADE TO THE DBMS PACKAGE. IN QUESTIONING THIS VIEW, WE POINTED OUT IN OUR DECISION THAT SOFTWARE CHANGES WOULD OCCUR ONLY IF THE DBMS VENDOR DECIDED TO MAKE CHANGES IN ITS PRODUCT AND ONLY IF HHS DECIDED TO ACQUIRE AND INSTALL THE CHANGED VERSION. MOREOVER, WE NOTED THAT AMS HAD INDICATED ITS WILLINGNESS TO ASSUME CONTRACTUAL RESPONSIBILITY FOR APPLICATIONS SOFTWARE CHANGES THAT BECOME NECESSARY TO ACCOMMODATE FUTURE CHANGES TO ANY DBMS THE AGENCY MAY SELECT. IN THE CIRCUMSTANCES, WE CONCLUDED, HHS' RATIONALE SEEMED TOO SPECULATIVE TO JUSTIFY EXCLUDING FIRMS SUCH AS AMS FROM COMPETITION.

NEVERTHELESS, HHS STILL SEEKS TO RESTRICT COMPETITION TO CULLINET. RECONSIDERATION, THE AGENCY HAS PRESENTED A LENGTHY TECHNICAL NARRATIVE TO SUPPORT ITS ASSERTION THAT SOFTWARE INTEGRATION BY CULLINET IS BETTER THAN SOFTWARE INTEGRATION USING THE APPROACH FIRMS LIKE AMS MIGHT PROPOSE. BASED ON THIS ANALYSIS, HHS CONTENDS THAT WE SHOULD AGREE WITH IT THAT FURTHER COMPETITION OF ITS REQUIREMENT IS UNNECESSARY.

WE VIEW HHS' ARGUMENT AS PREMATURE. IT IS BASED ON A NUMBER OF GENERALIZATIONS, WHICH AMS ASSERTS ARE NOT CHARACTERISTIC OF THE SOFTWARE DESIGN IT WOULD PROPOSE. AMS SAYS, FOR EXAMPLE, THAT IT WOULD PROVIDE SOFTWARE THAT IS BASED ON A COMMON DATA DICTIONARY AND IS OTHERWISE FULLY INTEGRATED WITH THE DBMS. AMS HAS NOT BEEN AFFORDED AN OPPORTUNITY TO SUBMIT A FORMAL PROPOSAL IN RESPONSE TO A WRITTEN SOLICITATION SETTING FORTH HHS' FUNCTIONAL REQUIREMENTS. THERE IS, THEREFORE, NO BASIS FOR EVALUATING AN AMS PROPOSAL AT THE PRESENT TIME.

FURTHER, HHS APPEARS TO HAVE MISCONSTRUED THAT PORTION OF OUR DECISION IN WHICH WE CONSIDERED THE DEPUTY ASSISTANT SECRETARY'S CONCERN THAT TO CONDUCT A COMPETITIVE PROCUREMENT WOULD UNDULY DELAY IMPLEMENTATION OF FAIMS. HHS SAYS ITS INTERPRETS OUR PRIOR DECISION AS REQUIRING IT TO PERMIT PROPOSALS FOR DEVELOPING DIVERSE SYSTEMS THAT ARE NOT INTEGRATED. WHILE HHS CONCEDES THAT IT HAS DEVELOPED SPECIFICATIONS COVERING ITS APPLICATIONS SOFTWARE NEEDS, IT ASSERTS THAT IT HAS NOT DRAFTED DBMS SPECIFICATIONS. IT CONTENDS THAT THE PROCESS OF DRAFTING SUCH SPECIFICATIONS AND OF REVIEWING DIVERSE PROPOSALS BASED ON SUCH A WIDE OPEN APPROACH (WHICH HHS SAYS WOULD ALSO REQUIRE BENCHMARKING) WOULD ADD 6 TO 12 MONTHS TO THE PROCUREMENT PROCESS. HHS SAYS IT WOULD HAVE TO ALLOW ADDITIONAL TIME FOR SOFTWARE DEVELOPMENT IF IT SELECTS A FIRM OTHER THAN CULLINET.

WE DID NOT SAY, HOWEVER, THAT HHS MAY NOT IMPOSE REASONABLE REQUIREMENTS TO ASSURE THAT AN INTEGRATED DESIGN APPROACH IS USED. AS AMS ARGUES IN ITS REBUTTAL TO HHS' SUBMISSIONS, OUR DECISION DID NOT PRECLUDE HHS FROM ACQUIRING RIGHTS TO A DBMS BY PLACING AN ORDER AGAINST A GSA SCHEDULE CONTRACT IF OTHERWISE APPROPRIATE. HHS COULD THEN TREAT THE DBMS AS GOVERNMENT-FURNISHED PROPERTY AND COMPETE THE APPLICATIONS SOFTWARE REQUIREMENT. /1/

FINALLY, HHS URGES THAT OUR OFFICE ARTICULATE GUIDELINES CONCERNING THE DEGREE TO WHICH AGENCIES MAY ENTER INTO COLLATERAL AGREEMENTS WHILE MAKING AWARDS UNDER ADS SCHEDULE CONTRACTS. HHS BELIEVES THERE IS A NEED FOR SUCH GUIDELINES TO GOVERN FUTURE GOVERNMENT PROCUREMENTS.

IT IS NOT OUR FUNCTION IN DECIDING BID PROTESTS TO DECIDE ISSUES EXCEPT TO THE EXTENT THAT THEY ARE PRESENTED BY THE FACTS OF SPECIFIC CASES. POINT OUT, HOWEVER, THAT CONTRACTS MUST BE AWARDED COMPETITIVELY. FOLLOWS THAT ORDERS PLACED UNDER A SCHEDULE CONTRACT MUST SUBSTANTIALLY CONFORM TO THE TERMS UNDER WHICH THE SCHEDULE CONTRACT WAS PLACED, SINCE OTHERWISE THE ORDER AMOUNTS TO AN AWARD FOR WORK THAT WAS NOT COMPETED.

THE DECISION IS AFFIRMED.

/1/ IN FACT, AMS NOT ONLY BELIEVES HHS SHOULD DO THIS BUT THAT THE CULLINET DBMS IS HHS' BEST CHOICE. AMS' POSITION THROUGHOUT THIS MATTER HAS BEEN THAT IT IS CONCERNED WITH COMPETING TO FURNISH APPLICATIONS SOFTWARE, WHICH IT IS WILLING TO INTEGRATE WITH ANY DBMS HHS MAY CHOOSE.