BNUMBER:  B-260447.4
DATE:  March 4, 1996
TITLE:  AT&T Corporation

**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:AT&T Corporation

File:     B-260447.4

Date:March 4, 1996

Francis J. O'Toole, Esq., Robert J. Conlan, Jr., Esq., Joseph C. Port, 
Jr., Esq., and Michael L. Shore, Esq., Sidley & Austin, and Steven W. 
DeGeorge, Esq., and Nathaniel Friends, Esq., AT&T Corporation, for the 
protester.
Kenneth M. Bruntel, Esq., Paul Shnitzer, Esq., John E. McCarthy, Jr., 
Esq., and Jacqueline E. Hand, Esq., Crowell & Moring, for Comsat RSI, 
Inc., an interested party.
Douglas G. White, Esq., and H. Jack Shearer, Esq., Defense Information 
Systems Agency, for the agency.
Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  A definitive responsibility criterion is a specific and objective 
standard, qualitative or quantitative, that is established by a 
contracting agency in a solicitation to measure an offeror's ability 
to perform a contract.  Further, in order to be a definitive 
responsibility criterion, the solicitation provision must reasonably 
inform offerors that they must demonstrate compliance with the 
standard as a precondition to receiving award. 

2.  A selection decision by a contracting agency is not automatically 
voided because of an allegedly inadequate contemporaneous evaluation 
record.  In reviewing a selection decision, the General Accounting 
Office looks at the entire record, including statements and arguments 
made in response to a protest, so that we can determine whether the 
selection decision is supportable; we do not limit our review to the 
question of whether the agency determination was properly documented 
at the time it was made.

3.  Where selection officials reasonably regard proposals as being 
essentially equal technically, cost may become the determinative 
factor in making an award notwithstanding that the evaluation criteria 
assigned cost less importance than technical considerations. 

DECISION

AT&T Corporation protests the award of a contract to Comsat RSI, Inc. 
under request for proposals (RFP) No. DCA200-94-R-0067, issued by the 
Defense Information Systems Agency (DISA) for the Commercial Satellite 
Communications Initiative (CSCI) network.  The protester principally 
argues that Comsat failed to meet a definitive responsibility 
criterion established by the solicitation; that the agency improperly 
permitted Comsat to gain an unfair competitive advantage due to an 
organizational conflict of interest; that Comsat violated Federal 
Communications Commission (FCC) orders; and that the agency's "best 
value" determination was arbitrary and unsupported.

We deny the protest.

BACKGROUND

This requirement is to enable DISA to obtain domestic and 
international C- and   Ku-band satellite transponder leases and 
bandwidth management and control services for a global CSCI network, 
as well as systems engineering and international negotiating 
services.[1]  The RFP was issued on August 19, 1994, and contemplated 
an indefinite quantity/indefinite delivery (IDIQ) contract with fixed 
unit prices except for a small labor-hour portion of the requirements.  
Because of certain technical specifications and the global coverage 
requirements, each offeror was obligated to propose INTELSAT 
transponders only available through Comsat World Systems, Inc.[2] for 
at least a portion of this requirement.

The RFP provided that award would be made to the offeror whose 
proposal was determined to be the most advantageous to the government.  
The RFP stated that three general areas would be evaluated:  
technical, management, and price.  The RFP also stated that the 
technical area was substantially more important than the management 
area.  The RFP provided that if technical/management proposals were 
deemed to be substantially equal, total price was to be "a major 
factor in selection of a proposal for award."  Conversely, the RFP 
stated that where there was a significant difference in 
technical/management proposals, overall price to the government would 
be considered, but would not be a major factor in making a 
determination as to which proposal offered the greatest value to the 
government.  The agency, in evaluating the technical area, considered 
the following three elements:  (1) bandwidth management center 
operations; (2) surge support; and   (3) CSCI life-cycle planning.  
The evaluation of the management area also focused on three elements:  
(1) contract management; (2) organizational structure; and (3) past 
experience and performance.  As to price, the RFP stated that price 
evaluation was to be based on discounted life-cycle costs (DLCC) 
assuming that all options would be exercised.

On January 31, 1995, the agency received timely proposals from four 
offerors, including AT&T and Comsat.  The agency conducted discussions 
and received best and final offers (BAFO) with the following 
evaluation results:[3]

Offeror        Technical/Management      Price

Comsat              87                  $423 million                       

AT&T                [deleted]           [deleted]

Based on the evaluation results, and as discussed below, the agency 
concluded that both proposals [deleted] and that the proposals of 
Comsat and AT&T [deleted].  Since Comsat offered [deleted], the agency 
selected its proposal as offering the best value to the government and 
awarded the contract to that firm.  This protest to our Office by AT&T 
followed an agency-level protest to DISA, which was denied by that 
agency.

DEFINITIVE RESPONSIBILITY CRITERIA

The protester argues that Comsat failed to hold an FCC license (known 
as a "section 214 license") for this requirement prior to award and 
that Comsat was therefore ineligible for award.[4]  This argument is 
premised on the assumption that the following provisions in the RFP 
established a definitive responsibility criterion and thus required 
Comsat to have such a license prior to award:

        "Source Selection Evaluation Criteria
        a.  The following conditions must be met in order to be 
        eligible for award:  (1)  The proposal must comply in all 
        material respects with the requirements of law, regulation, 
        and conditions set forth in the solicitation.

                    .     .     .     .     .

        "[Facilities and services under the contract shall be] in 
        accordance with . . . [a]ll applicable tariffs, rates, 
        charges, rules, regulations, or requirements [of the FCC]."

        "[C.]3.1 Prerequisites
         [C.]3.1.1  The Contractor shall be a U.S. entity subject to 
        the Communications Act of 1934, as amended, or an 
        International Consortium with a U.S. member subject to the 
        Communications Act of 1934."[5]

We need not consider the specifics of the protester's arguments 
concerning Comsat's alleged failure to meet these provisions because 
we find that none of these provisions, individually or collectively, 
establishes a definitive responsibility criterion.

A definitive responsibility criterion is a specific and objective 
standard, qualitative or quantitative, that is established by a 
contracting agency in a solicitation to measure an offeror's ability 
to perform a contract.  In order to be a definitive responsibility 
criterion, the solicitation provision must reasonably inform offerors 
that they must demonstrate compliance with the standard as a 
precondition to receiving award.  See generally Data Gen. Corp., 
B-252239, June 14, 1993, 93-1 CPD  para.  457.

Here, the provisions cited by the protester are not, in our view, 
sufficiently specific to establish a definitive responsibility 
criterion; rather, the provisions essentially require in general terms 
that each offeror "comply [with] law [and] regulation" and conform 
with unspecified and unidentified "applicable" tariffs, rules, and 
regulations.  Further, the provisions do not in any way reasonably 
inform offerors that the RFP imposes on offerors mandatory compliance 
with a specifically identified license (such as the section 214 FCC 
license) as a definite precondition for award.  See GE Am. 
Communications, Inc., B-240385, Nov. 16, 1990, 90-2 CPD  para.  398.[6]  
Rather, as the agency and the interested party argue, these provisions 
concern the general responsibility of the awardee (its ability to 
obtain all necessary and applicable licenses) and its ability to 
perform the contract consistent with all legal requirements.  See id.  
The agency found Comsat to be a responsible contractor.  We do not 
review an agency's affirmative determination of a firm's 
responsibility under the circumstances here.  See 4 C.F.R.  sec.  
21.3(m)(5) (1995).  Accordingly, this protest ground is denied.[7]

ALLEGED UNFAIR COMPETITIVE ADVANTAGE

The protester argues that the "United States Government" granted 
Comsat World a  monopoly for the provision of INTELSAT services, an 
important part of this requirement, and that Comsat World therefore 
effectively was a subcontractor to every offeror in the procurement, 
which allegedly created an organizational conflict of interest between 
Comsat World and offeror Comsat.[8]  The protester argues that "it is 
immaterial that [DOD] did not itself grant [Comsat World] its monopoly 
status over INTELSAT services [because] the federal government as a 
whole is clearly responsible when any agency or department of the 
government creates such an organizational conflict of interest that 
affords an offeror in a given procurement an unfair competitive 
advantage."  The only evidence the protester presents to support its 
position that Comsat enjoyed an unfair competitive advantage is that 
Comsat, in its proposal, "tout[ed] the experience [and] resources of 
Comsat World to secure an evaluation advantage."[9]  According to the 
protester, Comsat essentially "cast" Comsat World as a member of its 
team for evaluation purposes, and the agency failed "to police and 
avoid, mitigate, or neutralize" Comsat's alleged advantage, 
independent of whether or not Comsat was also in violation of the 
FCC's structural separation orders and requirements.

The agency responds that Comsat World was a required subcontractor 
because its satellite transponder services were the only ones 
available in certain areas of the world.  The agency also states that 
AT&T has not demonstrated that these subcontract services from Comsat 
World were not equally available at the same rates to all prospective 
prime contractors competing for the CSCI contract.

The fact that a firm or organization may enjoy a competitive advantage 
provides no basis for objection so long as that advantage is not the 
result of preferential or unfair action by the agency.  See Richard M. 
Milburn High Sch., B-249286, Oct. 30, 1992, 92-2 CPD  para.  308.  We do not 
see that any unfair competitive advantage exists or that any unfair 
agency action occurred.  As AT&T acknowledges, Comsat World is a 
regulated carrier that is required to "deal with other Comsat entities 
purely on an arms-length basis" and is "required by law to be an 
honest broker and provide the required services on an equal basis to 
all offerors."  As we understand it, under FCC orders, Comsat World is 
obligated to avoid conferring a competitive advantage on any vendor 
proposing under this solicitation.  Thus, the FCC has acted to ensure 
that Comsat does not have a competitive advantage over other offerors.  
Further, in our view, the weight to be given the awardee's references 
to Comsat World's resources was a matter of evaluation for the agency.  
The RFP did not prohibit references in proposals by any offeror such 
as Comsat to the resources and experience of sister companies.  There 
is no showing that the agency misevaluated the information.

AGENCY BEST VALUE DETERMINATION

The protester advances detailed arguments that the agency failed to 
conduct a rational "best value" analysis and price/technical tradeoff 
in selecting Comsat to be the successful offeror.  AT&T contends that:  
(1) the agency relied solely on numerical scores in making its 
determination that Comsat and AT&T [deleted]   from a 
technical/management standpoint;[10] (2) the agency did not conduct a 
"true cost/technical tradeoff" because it failed to assess even the 
most obvious "unquantifiable" and "readily quantifiable" technical 
discriminators, such as satellite transponder performance differences, 
which, if properly evaluated, would have eliminated any overall 
[deleted] advantage that Comsat allegedly enjoyed;[11] and (3) the 
agency, even if it properly determined the two proposals to be 
essentially equal, was not permitted by the RFP to then treat price as 
"dispositive," but only as a "major factor."

An agency does not have to find two proposals strictly equal from a 
technical standpoint in order to determine them essentially equal; our 
Office has upheld such determinations where there were technical 
differentials of more than 15 percent.  See Ogilvy, Adams & Rinehart, 
B-246172.2, Apr. 1, 1992, 92-1 CPD  para.  332.  Except for its arguments 
that the agency should have evaluated quantifiable and 
non-quantifiable proposal discriminators, which we discuss below, the 
protester has not directly challenged the substantive technical merits 
of Comsat's proposal.  Rather, AT&T argues that the agency relied on 
bare numerical scores in determining that Comsat's proposal was 
[deleted] to AT&T's.  

Our review of the record does show that the contemporaneous narrative 
evaluation documents are summary in fashion.  For example, the final 
technical proposal evaluation briefing by the evaluators compares, in 
summary form, the strengths and weaknesses of Comsat and AT&T.  Comsat 
is found to have strengths in "pre-existing SATCOM infrastructure," in 
having two transportable bandwidth management centers (BMC) (of a 
total of five BMCs), in proposing to keep a database of all available 
satellites, and in planning to interface information control into the 
BMCs.  AT&T, for example, in this same summary by the evaluators, was 
found to have strengths in having more than [deleted[, in having a 
[deleted], in having [deleted], and in having exceptional [deleted].  
Weaknesses of both offerors' proposals were also noted.  Except for a 
more detailed narrative discussion and explanation of the BMCs of the 
competing offerors, the agency's overall contemporaneous narrative 
explanation is not extensive.

Nevertheless, even though the contemporaneous narrative could have 
been more detailed, we cannot say, based on our review of the record, 
that the SSA did not have sufficient information (including the 
scoring and the basic technical strengths and weaknesses of both 
offerors) on which to conclude that the two proposals [deleted].  In 
reviewing a selection decision, we look to the entire record, 
including statements and arguments made in response to a protest, so 
that we can determine whether the selection decision is supportable; 
we do not limit our review to the question of whether the agency 
determination was properly documented at the time it was made.  See 
Burnside-Ott Aviation Training Ctr., Inc.; Reflectone Training Sys., 
Inc., B-233113; B-233113.2, Feb. 15, 1989, 89-1 CPD  para.  158.  

In the agency report, DISA presented extensive and detailed narrative 
concerning examples of the strengths of Comsat's technical and 
management proposals, at the factor and subfactor level.  This 
information is consistent with the less detailed contemporaneous 
documentation.  We need not repeat the details here except to say that 
the agency has presented sufficient detail to show that Comsat 
deserved the scores it received.  More importantly, the protester has 
not attempted to rebut any of these narrative statements in the agency 
report or contest the agency's substantive technical conclusions as to 
the Comsat proposal's strengths.  

In this regard, the protester only asserts with respect to its own 
technical evaluation that the agency failed to consider certain 
technical discriminators.  The protester argues, for example, that 
there are significant differences in proposed [deleted], and, in turn, 
the [deleted] to meet its needs under a given offeror's proposed 
solution.  The protester argues that INTELSAT satellite transponders 
proposed by Comsat are lower performance models than those proposed by 
AT&T, "and analysis of this discriminator alone would have closed the 
apparent price gap between the two proposals."

Apparently, the protester is arguing that certain technical features 
of its equipment as contained in its technical proposal should have 
been quantified into monetary terms by the agency and factored into 
the price evaluation.  We point out that there was no provision in the 
evaluation criteria for the "quantification" of the relative merit of 
transponder technical characteristics or other technical 
considerations.  In the absence of an evaluation criterion providing 
for quantifying the technical advantage of proposed equipment, we do 
not think the agency acted improperly in not conducting such an 
evaluation.  See Sci-Tec Gauging, Inc.; Sarasota Measurements & 
Controls, Inc., B-252406, B-252406.2, June 25, 1993, 93-1 CPD  para.  494 
(agency may not evaluate based on unstated criteria). 

Since the protester has not shown that these technical features 
warranted a finding of technical superiority under the solicitation 
terms, we have no basis to disturb the agency's determination that the 
two proposals were [deleted].

Finally, the protester's argument that the agency was not permitted to 
treat price as dispositive--as opposed to, in the RFP's terms, a 
"major factor" [deleted] is denied.  Where selection officials 
reasonably regard proposals as being [deleted], cost may become the 
determinative factor in making an award even where that the evaluation 
criteria assigned cost less importance than technical considerations.  
Ogilvy, Adams & Rinehart, supra.  

SUPPLEMENTAL PROTEST ISSUES

In a supplemental protest, AT&T argues that Comsat failed to comply 
with a mandatory minimum requirement to provide an "entire 
transponder" under contract line item number (CLIN) No. 5 (instead, 
according to AT&T, Comsat offered only ".5 of a whole transponder [in 
its tariff]").  We find no merit to this allegation.  First, the 
record shows that Comsat's proposal quoted a quantity of "1" 
transponder for each lease option that it priced for CLIN No. 5 in 
section B of the RFP.  Nowhere in Comsat's initial or final proposals 
was there a reference to a ".5" of a transponder.  Second, the 
agency's discussion question that it issued to Comsat shows that the 
agency understood that Comsat's pricing for CLIN No. 5 (a fixed 
monetary sum) was "for a 72 MHz transponder priced on a domestic half 
segment basis."  AT&T [deleted].  Finally, the protester bases its 
allegation that Comsat offered only ".5 of a transponder" on a tariff 
filing Comsat submitted to the FCC after award of the contract.  Since 
the protester has failed to show that Comsat qualified its obligation 
in its proposal to provide an entire transponder for CLIN No. 5, we 
deny this protest ground.

AT&T also argues that the agency failed to upwardly adjust Comsat's 
price by      $7 million and misevaluated its price proposal to the 
extent of $19 million.  Comsat argues that the latter contention by 
AT&T is untimely.  We simply note that these allegations, even if we 
assume them to be true, would not in any way displace Comsat as the 
low offeror which, ultimately, was the reason Comsat was selected.  

The protest is denied.

Comptroller General
of the United States 

1. A transponder is essentially a satellite-based electronic device 
that receives electronic signals from a point on the ground and relays 
those signals back to earth.  Typically, satellite transponders 
receive very "narrow" signals and relay back to earth 
"large-footprint" signals covering a broad geographic area.  Bandwidth 
management services involve managing and monitoring the transponder 
leased by the agency.  Systems engineering involves supporting the 
agency with evolving CSCI requirements and needs assessments.  
Finally, the successful contractor may be required to represent the 
agency with foreign countries for landing and operating rights for 
transponder signals within those countries.

2. According to the protester, Comsat World is a sister entity to the 
awardee, both of which are wholly owned by Comsat Corporation.  The 
protester states that because of these relationships, the FCC has 
imposed stringent restrictions ("structural separation" orders) on 
Comsat World's dealings with third parties, including its dealings 
with its sister entities such as the awardee.  We discuss the 
protester's contentions concerning this matter below.

3. We will only discuss the proposals of AT&T and Comsat since the 
agency's final selection decision was between the proposals of these 
two offerors.

4. The protester argues that Comsat did not seek or receive prior to 
award a section 214 license from the FCC to resell INTELSAT satellite 
transponder services.  According to the protester, Comsat was the only 
offeror that did not have an FCC license prior to the award date.  The 
protester also argues that because of the critical and vital nature of 
this CSCI contract, it was imperative that an offeror, including 
common and non-common carriers, already hold the FCC license to 
preclude the "possibility that FCC restrictions might [prevent] 
issuance of a license or impose conditions on performance of the 
services required by the CSCI contract."  The record shows that Comsat 
applied for and secured a section 214 license from the FCC after award 
in sufficient time to permit performance of the contract on schedule.

5. This provision appeared as a "Prerequisite" in the RFP's statement 
of work.  The agency correctly points out that section C.3.1. lists 
other "prerequisites" that, in fact, can only be satisfied after 
award.  For example, provision C.3.1.3 requires that the contractor 
"shall permit the DISA to allocate leased satellite transponder power 
and bandwidth at the DISA's discretion."  It is undisputed that this 
requirement can only be satisfied post-award, despite its inclusion 
under the title "Prerequisite."

6. The agency points out that AT&T, in the license proceedings before 
the FCC, specifically brought this matter to the attention of the FCC.  
AT&T stated to the FCC that "[w]hen DOD [Department of Defense] does 
not have the jurisdiction to effectuate communications policy or the 
expertise to evaluate the structural separation and other requirements 
placed on Comsat, the FCC must ensure that such a substantial 
government contract award does not violate its regulations or 
otherwise obstruct FCC policies."  Based on the information before the 
FCC, that agency found that AT&T's allegations were unsupported.

7. AT&T also alleged in its initial protest that Comsat World may have 
improperly disclosed AT&T proprietary data to Comsat in violation of 
these structural separation orders.  In its comments, AT&T abandoned 
this protest ground.  In this protest and in the post-award FCC 
proceedings relating to Comsat's section 214 application, AT&T argued 
that Comsat and Comsat World Systems, Inc. violated the "structural 
separation" orders imposed by the FCC.  Briefly, the structural 
separation restrictions imposed by the FCC require Comsat to maintain 
a separate organizational structure from Comsat World with separate 
officers and personnel; restrict certain cost allocations by Comsat 
World; and restrict the flow of information between Comsat World and 
Comsat such that any information made available to Comsat entities 
would also have to be made immediately available to the public.  The 
protester contends that the agency failed to consider during the 
procurement whether Comsat violated these structural separation orders 
imposed by the FCC.  We also view these allegations as relating to the 
awardee's compliance with all laws and regulations which the 
contracting officer is required to consider generally as part of his 
responsibility determination.  See Federal Acquisition Regulation  sec.  
9.104-1(g). 

8. The protester does not argue that this alleged organizational 
conflict of interest should have precluded Comsat from competing in 
this procurement.  Rather, AT&T argues that Comsat's "participation 
[in this procurement] made it critical for [the agency] to conduct the 
source selection in accordance with the evaluation criteria and other 
terms of the solicitation and applicable law and regulation, paying 
due regard to the highly sensitive nature of the relationship between 
[Comsat and Comsat World]."

9. The protester states that Comsat, in its proposal, relied on its 
corporate affiliation with Comsat World; referred to itself and its 
proposal "team" generically as "Comsat" and, in particular, as being 
the signatory to INTELSAT; stated that it had "30 years of experience" 
which allegedly could only refer to Comsat World's experience; and 
also stated that it "can draw upon more than 1,000 engineers," which 
the protester states could only come from Comsat World.  Comsat 
challenges some of these allegations, stating that the 1,000 engineers 
can easily be obtained from other Comsat team members, such as 
Lockheed Martin and TRW.  Comsat also alleges that the 30 years of 
experience comes from Comsat and Comsat Laboratories, which evolved 
from various Comsat nonregulated entities that have existed for 30 
years.  Also, Comsat states that the key personnel it proposed have up 
to 30 years experience upon which Comsat may rely.

10. The protester states that the evaluators based their 
recommendation to the source selection authority (SSA) on the 
following determination:  "It is hereby determined that total scores 
of [deleted].  The protester also states that the SSA, in his source 
selection decision, also relied on the premise that the point scores 
were [deleted].

11. The protester argues that certain portions of the agency's source 
selection plan (SSP) required the agency to determine the "net value" 
of each proposal based on "quantified" and "non-quantified" 
discriminators.  The agency disputes that its evaluation was not 
consistent with the SSP.  We merely note that the protester has not 
identified any RFP provision that the agency allegedly violated by not 
evaluating "quantified" and "non-quantified" technical discriminators.  
We also note that the SSP is an internal agency guide which, if not 
incorporated or referenced in the RFP, the agency is not required by 
law to follow.  See Pan Am World Servs., Inc.,         B-235976, Sept. 
28, 1989, 89-2 CPD  para.  283.