BNUMBER:  B-270841; B-270842: 270843
DATE:  May 1, 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-270841; B-270842: 270843

Date:May 1, 1996

Francis J. O'Toole, Esq., Robert J. Conlan, Jr., Esq., Joseph C. Port, 
Jr., Esq., and Michael L. Shore, Esq., Sidley & Austin; and Nathaniel 
Friends, Esq., and Steven W. DeGeorge, Esq., AT&T Corporation, for the 
protester.
David S. Cohen, Esq., Carrie B. Mann, Esq., Cohen & White; and George 
Affe, Esq., and Ronald Fouse, Esq., Sprint Communications Company, 
L.P., and  Carl L. Vacketta, Esq., Richard P. Rector, Esq., Kevin P. 
Mullen, Esq., Holly Emrick Svetz, Esq., Piper & Marbury, MCI 
Telecommunications Corp., the intervenors. 
H. Jack Shearer, Esq., McKenzie Whitaker, Esq., Defense Information 
Systems Agency, for the agency.
John Van Schaik, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that three solicitations for the components of a 
telecommunications network should be amended to permit offerors to 
submit, and have evaluated, single, integrated proposals responding to 
all of the agency's requirements in a single proposal is denied where 
record shows that multiple proposal, multiple contract approach is 
necessary for agency to assure that its minimum needs are met.

DECISION

AT&T Corporation protests the terms of requests for proposals (RFP) 
Nos. DCA200-95-R-0129, DCA200-95-R-0137 and DCA200-95-R-0068, issued 
by the Defense Information Systems Agency (DISA).  The three 
solicitations were issued for three components of the Defense 
Information System Network (DISN), a telecommunications system 
providing end-to-end common user, switched voice and video, and 
dedicated data service in support of Department of Defense (DOD) 
command, control, communication and intelligence (C3I) requirements.  
AT&T principally argues that DISA has arbitrarily refused to allow 
offerors to submit, and have evaluated, single proposals as an 
alternative to individual proposals under each RFP. 

We deny the protests. 

BACKGROUND 

Under a previous contract, the Defense Commercial Telecommunications 
Network (DCTN) contract, which was awarded in 1984, AT&T provided DOD 
with a leased telecommunications system to support DOD C3I 
requirements, within the continental United States and locations 
abroad.  The DCTN contract expired on February 29, 1996; prior to that 
date, DISA awarded the DISA Transition Contract (DTC) to AT&T as an 
interim measure until the award of DISN contracts.[1]

Since the award of the DCTN contract in 1984, there have been 
substantial changes in the telecommunications industry, including the 
effects of the divestiture of AT&T, and the emergence of new 
technologies involving the blending of the telecommunications industry 
and the information services industry.  According to DISA, its plan is 
to hold competitions for each of several components of the network 
resulting in multiple contracts.  Thus, the DISN will consist of 
multiple contracts awarded at different times under four acquisitions:

(1) The DISN Switched/Bandwidth Manager Services CONUS contract.  The 
bandwidth manager services contractor will provide the capability to 
switch network traffic[2] at 12 service delivery points (SDP) and 
provide bandwidth managers at 34 government specified SDPs.[3]  In 
addition, the contractor will provide network management services and 
share network coordinating functions with other network contractors.  
DISA intends to award one bandwidth manager services contract based on 
a best value evaluation.  The contract is to be for a 3-year term, 
with six 1-year options.  Proposals were required to be submitted by 
January 2, 1996, and the award is anticipated by August 1, 1996.

(2) The DISN Transmission Services-CONUS contracts.  DISA intends to 
award one or more contracts for access transmission services and 
backbone transmission services.  Access transmission services 
contracts will provide transmission lines between DOD facilities and 
the network.  In addition, video networks, discussed below, will be 
connected to the network via such access lines.  DISA has broken 
access transmission services into eight geographic regions and intends 
to award from one to eight contracts for such services on a 
technically acceptable, lowest- priced basis.  The backbone 
transmission services contractor will provide wideband network level 
transport facilities that will connect all bandwidth managers and 
switches provided under the bandwidth manager services contract.  DISA 
intends to award a single backbone transmission services contract also 
on a technically acceptable, lowest-price basis.  The transmission 
services contracts are to have 1-year base terms, with eight 1-year 
options.  Proposals were required to be submitted by March 1, 1996, 
and the award is anticipated by October 15, 1996.

(3) The DISN Video Services-Global contract.  The video services 
contractor will provide dial-up video teleconferencing through three 
video network hubs located in different geographic regions within the 
continental United States.  The access transmission services 
contract(s) discussed above will provide access transport from the 
video network hubs to the network and the backbone transmission 
services contracts will provide network transport support for the 
video service within the network.  DISA plans to award one video 
services contract based on a best value evaluation.  That contract is 
to have a 3-year base term, with two 1-year options.  Proposals were 
required by April 15, 1996, and the award is anticipated by December 
15, 1996.

(4) The DISN Support Services-Global contract.  The support services 
contractor will provide support, on a time-and-materials basis, for 
engineering, operations, hardware and software maintenance, integrated 
logistics support planning, management information systems, network 
management, provisioning, and other functions.

AT&T has protested the solicitations for the first three 
acquisitions.[4]  

In amendments to the RFPs, DISA released the following contractor 
question and agency answer:

     Question:  "What is your concept of 'linked bids?'"

     Answer:  "Numerous comments were received during the draft DISN 
     RFP phase stating that significant economies could be realized if 
     the government used a total services approach (i.e. all elements 
     of DISN in one contract) versus the three separate contract 
     approach.  The Government has no basis to make any judgment 
     concerning these comments.  However, by staggering the 
     acquisition process for the three solicitations, a path is 
     provided to offerors which will allow for these economies to be 
     demonstrated in their pricing proposals.  This path is termed as 
     the 'linked bids concept.'"

In subsequent amendments, DISA explained that under the linked bid 
approach the awardee of the bandwidth manager services contract would 
be able to propose prices on the later solicitations that take into 
consideration the fact that it had won the bandwidth manager services 
contract.  According to DISA, this opportunity will exist because best 
and final offers for the second solicitation will be required only 
after the award under the first solicitation.  Subsequent solicitation 
amendments explained:

     "Each solicitation stands on its own and proposals must fully 
     satisfy each requirement as they are set forth in the applicable 
     RFP.  Any offer which includes a contingency stating essentially 
     that acceptance of their proposal for the [bandwidth manager 
     services] is contingent upon also having a successful offer for 
     the [transmission services] or [video services] shall be 
     rejected."

PROTEST ALLEGATIONS

In its initial protest submission, AT&T raised two issues.[5]  First, 
AT&T argued that DISA should amend the three solicitations to permit 
offerors to submit, and have evaluated, single "proposals to supply 
all of the services in the [DISN] Network to the government under a 
single integrated contract."  As AT&T otherwise stated, "AT&T could 
put forth its most advantageous proposal for the required [network] 
services in the context of a single proposal offering a complete set 
of integrated services meeting all requirements set forth by [DISA]."  
AT&T maintained that an integrated proposal would provide the 
government savings of at least $1.5 billion and would provide a 
superior technical solution compared to DISA's current approach.  
Second, AT&T argued in its initial protest submission that DISA had 
violated law and regulation by structuring the network based on design 
specifications--as opposed to functional specifications--that exceed 
the agency's minimum needs and will not result in the most technically 
superior and cost effective solution to meeting DOD's 
telecommunications requirements.  Specifically, AT&T challenged 
solicitation requirements concerning the number and geographic 
location of bandwidth managers and switches; the type, capacity, and 
geographic location of transmission facilities; and the type and 
geographic location of video hardware and software. 

Based on the protest, and a subsequent response to a request for 
dismissal of the protest, we understood AT&T's protest to be seeking a 
recommendation that DISA delete the detailed design requirements set 
forth in the three solicitations and instead set forth broad 
functional requirements which each offeror could respond to in the 
manner it chose, either in individual proposals under each 
solicitation or in single proposals responding to all three 
solicitations.  Under that approach, an offeror would be free to 
design a network to meet the agency's functional requirements making 
maximum use of its own telecommunications infrastructure.  According 
to AT&T, the agency's refusal to allow it to submit such a proposal is 
"prejudicial to AT&T" and unduly restrictive of competition because it 
handicaps AT&T's ability "to compete to [its] full potential," and 
"robs AT&T of its ability to leverage its broad capabilities and 
submit its most competitive proposal."

In its comments on the contracting agency's protest report, AT&T 
maintained these two issues.[6]  Also in its comments, for the first 
time, AT&T suggested that the integrated solution that DISA should 
permit could provide for recompetition of the components of the 
network in the option years.

After maintaining these positions through its protest, its response to 
the dismissal request, and its comments on the agency report, in 
response to a supplemental submission from the agency AT&T changed its 
position.  Eleven weeks after the protest was filed, AT&T narrowed the 
relief which it was seeking on the first count of its protest.  
Specifically, in its supplemental response, AT&T stated, 

     "it has always been the essence of AT&T's protest that the 
     'integrated' proposal to which [AT&T] refers is an integrated 
     version of the identical requirements applicable to the separate 
     [network] solicitations . . . for the same contract components, 
     with the same base terms and same option years . . . as involved 
     in the separate proposals for the pieces now being solicited by 
     [DISA]."

Also in that submission, AT&T stated, 

     "[the] integrated approach that AT&T seeks in this protest is 
     merely the opportunity to submit to [DISA] as an alternative to 
     the agency's current piecemeal approach, a single proposal for 
     all [network] services called for under the individual 
     solicitations, which single proposal would be responsive to all 
     the provisions in those solicitations-including their various 
     technical specifications, various terms and conditions, and 
     options-and detail for the agency all the benefits inherent 
     therein." 

AT&T essentially repeated this explanation of its current position at 
the hearing held on this protest and in its post-hearing comments.  At 
the hearing, an AT&T official testified that AT&T is "seeking . . . 
the right to prepare an integrated proposal that could then be 
compared with other integrated proposals or other multivendor 
proposals, just as the solicitation exists today.  We are not looking 
for anything that would change the scope of the contracts involved."  
Hearing Transcript (Tr.) at 46.  In addition, this same witness 
testified that "[t]he protest turns upon our being able to provide an 
integrated solution proposal in response to the government's 
architecture and design as specified.  If you were to ask me the 
question would we prefer to do it in our normal manner, the answer is 
clearly yes, but that's not the relief we're looking for right now."  
Tr. at 49.  However, in spite of the assertion that it was seeking 
only this limited relief, in its post-hearing comments, AT&T stated 
that it still maintains "[c]ount two of its protest," concerning "the 
many architectural restrictions imposed by the challenged 
solicitations. . . ."

ANALYSIS

The governing statutes and regulations allow contracting agencies 
broad discretion in determining their minimum needs and the 
appropriate method for accommodating them.  See 10 U.S.C.  sec.  
2305(a)(1)(A) (1994); Federal Acquisition Regulation  sec.  6.101(b) and 
7.103(c).  Government procurement officials, who are familiar with the 
conditions under which supplies, equipment, or services have been used 
in the past, and how they are to be used in the future, are generally 
in the best position to know the government's actual needs, and 
therefore, are best able to draft appropriate specifications.  Gel 
Sys., Inc., B-234283, May 8, 1989, 89-1 CPD  para.  433.  Although an agency 
is required to specify its needs in a manner designed to achieve full 
and open competition, and is required to include restrictive 
provisions or conditions only to the extent necessary to satisfy its 
needs, without a showing that competition is restricted, agencies are 
permitted to determine how best to accommodate their needs, Mine 
Safety Appliances Co., B-242379.2; B-242379.3, Nov. 27, 1991, 91-2 CPD  para.  
506, and we will not substitute our judgment for that of the agency.  
Simula, Inc., B-251749, Feb. 1, 1993, 93-1 CPD  para.  86; Purification 
Envtl., B-259280, Mar. 14, 1995, 95-1 CPD  para.  142.

Here, we conclude that the decision to solicit proposals to meet the 
network requirements under three solicitations and to refuse to accept 
consolidated proposals for all of the requirements of the network is 
unobjectionable.  First, most of what AT&T complains about simply 
amounts to an assertion that the agency's requirements would be better 
met by other means.  Second, while the agency's approach, in 
particular the "linked bids concept," may impose significant risks 
upon AT&T and other offerors in preparing their proposals and 
performing contracts awarded under the solicitations, we believe the 
agency has the discretion to impose such risks.  Finally, to the 
extent that the agency's chosen approach may be restrictive of 
competition, we conclude that DISA has justified the restrictions as 
necessary to meet its minimum needs.

For the most part, AT&T is simply arguing that permitting offerors to 
submit integrated proposals would better serve the government's needs 
because it would result in a less costly and technically better 
network solution.  For example, AT&T maintains that DISA can secure 
the "true best value" only by permitting offerors to submit single 
proposals on all of DISA's requirements.  Specifically, AT&T contends 
that by permitting "integrated" proposals, the government could save 
at least $1.5 billion over the cost of DISA's current approach.  
According to AT&T, the $1.5 billion cost savings includes:  (1) 
[deleted] over the life of the program by eliminating the need for 
local channel access circuits to interconnect the transmission service 
contractor's (or contractors') points-of-presence to the bandwidth 
managers service contractor's points-of-presence in each of 34 
contractually specified locations; (2) [deleted] in duplicative 
network management costs; (3) [deleted] in "hidden" internal 
administrative costs; and (4) [deleted] under the support services 
contract.

AT&T also asserts that permitting proposals on an integrated basis 
would result in a superior technical solution--compared to DISA's 
current approach--because an integrated approach would best ensure an 
efficient, interoperable network; fewer service disruptions by 
reducing the number of access circuits; minimal "down time" in the 
network by holding a single contractor responsible for meeting network 
reliability rates across all network services; expeditious remediation 
of disruptions; efficient network management; efficient and timely 
insertion of new services; and maximum end-to-end security.

These contentions simply are not for resolution in this forum.  None 
of these issues involves a restriction on competition.  Even if AT&T 
is correct that DISA's approach will result in additional expense to 
the government and an inferior technical solution--matters which DISA 
and two of AT&T's competitors vigorously dispute--the additional 
expense and the inferior technical solution do not mean that the 
solicitations restrict competition since, clearly, that result would 
not be an indication that the government's needs were overstated.  
Rather, those results would indicate that there might have been better 
methods of accomplishing the agency's objectives.  The agency's 
judgment as to the best approach to accommodating its needs, however, 
is within the decisionmaking function of the agency and is not subject 
to the type of objection raised by AT&T.  A&C Bldg. and Indus. 
Maintenance Corp., B-230270, May 12, 1988, 88-1 CPD  para.  451; 
Purification Envtl., supra; Mine Safety Appliances Co., supra. 

AT&T also objects to the piecemeal approach because, according to 
AT&T, the winner of the bandwidth contract will have a significant 
cost advantage over its competitors on the transmission contract 
because it would be able to propose to connect its own bandwidth 
manager and transmission facilities without the need for local channel 
access circuits.  AT&T maintains that the opportunity to avoid the use 
of these local channel access circuits would give the winner of the 
bandwidth contract an [deleted] advantage in the competition for the 
transmission services contract.  Also, according to AT&T, "[a]n 
offeror for the bandwidth manager contract also has to take into 
account in making an offer for [that] contract the risk that it may be 
saddled with a losing contract if it wins bandwidth but, for some 
reason, the transmission contract opportunity is canceled, or the 
losing offerors convince [DISA] that the playing field must be leveled 
for all offerors on the transmission contract."

An agency may properly impose substantial risk upon the contractor and 
minimal risk upon itself, and offerors reasonably are expected to use 
their professional expertise and business judgment in anticipating 
risks and preparing their offers.  J & J Maintenance, Inc., B-244366, 
Oct. 15, 1991, 91-2 CPD  para.  333.  Here, the risks which the 
solicitations impose on offerors appear to affect all offerors equally 
and all offerors are equally capable of taking those risks into 
account in preparing their proposals.  It is within DISA's discretion, 
in the exercise of its business judgment, to impose those risks.[7]

The remaining element of AT&T's protest is the allegation that the 
solicitations are restrictive of competition because they prevent AT&T 
from "compet[ing] in the ordinary course of business" and in its 
"customary and most efficient manner."  See  New York Tel. Co. et al., 
69 Comp. Gen. 61 (1989), 89-2 CPD  para.  435.  Specifically, as AT&T 
explains, in its "customary and most efficient manner" of competing 
for a telecommunications network contract, the customer provides AT&T 
and other offerors with the customer's broad functional requirements 
for the network, including traffic data that describes the customer's 
normal calling patterns.  AT&T takes this data, and using its 
extensive network design capabilities, including network design 
computer programs, and selects an optimal network solution for the 
customer, from a cost and technical standpoint, making maximum use of 
AT&T's own telecommunications infrastructure assets.

Here, AT&T alleges that it is prevented from "compet[ing] in the 
ordinary course of business" in its "customary and most efficient 
manner" essentially in two ways.  First, AT&T cannot make use of its 
extensive network design capabilities.  According to AT&T, DISA's 
approach "supplants AT&T's customary Network design function, to 
AT&T's severe prejudice."  AT&T explains that network design "always 
begins with an analysis of customer traffic data followed by an 
iterative tradeoff analysis of AT&T's commercially available 
telecommunications infrastructure assets.  Through such analysis, AT&T 
is able to maximize usage of its available assets to provide its most 
cost-effective and technologically sound Network solutions." (Emphasis 
in text.)  AT&T states that "DISA has totally usurped the Network 
design function and, in essence, dictated a Network design for the 
offerors."

Second, AT&T asserts that it cannot make maximum use of its own 
telecommunications infrastructure assets because the solicitations 
specify detailed design requirements for the network--including the 
number and geographic location of bandwidth managers and switches; the 
type, capacity, and geographic location of transmission facilities; 
and the type and geographic location of video hardware and 
software--rather than broad functional requirements.  [Deleted].

In response to these contentions, DISA explains that its need for its 
current approach in part grew out of the agency's experience under the 
long-term DCTN contract with AT&T.  According to the agency, while the 
DCTN contract served as a satisfactory contractual vehicle in its 
earliest years, several problems became more evident in the later 
years of that contract as the rate of technological innovation 
accelerated with the divestiture of AT&T.  As the agency explains, 
among its principal concerns under the DCTN contract were high prices 
and sluggish technological innovation.

DISA reports that the initial DCTN prices were based on tariffs 
created in 1984 when the telecommunications industry was dominated by 
AT&T and, over the years, DCTN services were priced through tariffs 
largely insulated from competition.  While the DCTN contract provided 
for negotiation of prices, according to the agency, since the DCTN was 
a long-term contract with a single provider, the agency had little 
leverage in such negotiations.  Consequently, according to the agency, 
price adjustments on the DCTN contract lagged far behind the dramatic 
fall in competitive prices throughout the telecommunications industry.  
DISA reports that in a 1995 study, it compared prices for comparable 
transmission service from three sources:  (1) DCTN; (2) FTS2000 (GSA's 
omnibus contract for federal agencies); and (3) the DISA Acquisition 
Bulletin Board System (DABBS), a computerized acquisition system used 
by the agency to competitively award dedicated, also called 
point-to-point, services based on low price.  The agency found the 
DABBS prices invariably were lower than DCTN prices, usually by a wide 
margin, and found the cost advantage between DCTN and FTS2000 varied 
according to the scenario.  DISA notes that this study preceded a 
dramatic decline in FTS2000 rates based on a price recompetition 
between AT&T and Sprint, the two service providers under that 
contract.

Concerning technological innovation, DISA explains that when the DCTN 
contract was awarded in 1984, AT&T was the technological leader in the 
industry.  According to DISA, however, during the intervening years, 
other vendors, including smaller firms, often have initiated many 
technological advances.  DISA maintains that because it has been 
locked into a long-term, integrated contract with a single vendor, the 
agency has been deprived of the prompt infusion of technology which 
could be obtained in the competitive marketplace.  According to DISA, 
as the lone DCTN contractor, AT&T has had no incentive to provide such 
new technology unless it conforms to AT&T's overall network and then 
at higher, non-market prices.  As a result, DISA reports that under 
the DCTN contract AT&T did not provide modernized switches, 
synchronous optical network (SONET)[8] data transmission and was slow 
to add other enhancements.  Also, according to the agency, 
negotiations under the DCTN contract concerning technological and/or 
requirement changes have been burdensome and time consuming.  

Thus, DISA's experience under the DCTN contract led the agency to 
conclude that under a long-term contract with a single vendor 
providing services the agency has no way to assure that it can gain 
the benefits of falling prices and that a long-term DCTN-like contract 
is an inadequate vehicle to permit the prompt infusion of new 
technology in a period of accelerating technological and/or 
requirement change.  Based on the agency's experiences under the DCTN 
contract, and as a result of a series of DISA studies of various 
options available to the agency to replace the DCTN, DISA explains 
that its principal rationales that support the current multi-proposal, 
multi-contract approach are:

1.  Positive control to support warfighting requirements.  According 
to DISA, it has structured these acquisitions in a multi-contract 
approach based on discrete functional components of telecommunication 
services in order to assure interoperability, integration, surge 
capacity, technology insertion, security, and government control.  
DISA maintains that under a single contract approach, the vendor has 
an incentive to develop a self-contained proprietary network under 
which the government lacks positive control over network elements 
needed to ensure that the network is integrated and interoperable with 
other government networks.  

2.  Maximize competition.  DISA has concluded that the three 
acquisitions structured in the manner it has chosen will attract 
additional offerors who may not be willing or able to compete under 
one large solicitation.  For example, DISA notes that the transmission 
contract is divided into eight regions in the hope that some 
transmission providers, such as the Regional Bell Operating Companies, 
which could not compete for a national contract, will compete for 
regional transmission contracts.  DISA notes that the current 
multi-contract structure provides for frequent options on the 
transmission services contracts and emphasizes that the strategy of 
maximizing competition applies to recompetitions for the options as 
well as the initial acquisition.  

3.  Incentive for improved contractor performance.  DISA maintains 
that its acquisition strategy for multiple contracts, which may be 
more easily recompeted in the option years than a large contract with 
a single vendor, creates an incentive for improved contractor 
performance.  

4.  Lower prices.  Based on its experience under the DCTN contract and 
based on the cost comparison study mentioned above, DISA believes that 
it can achieve lower prices for telecommunication services under an 
acquisition approach that includes a number of smaller contracts, each 
of which provides for frequent recompetitions.  According to DISA, its 
strategy was to break the procurements into functional components with 
discreet and readily identifiable costs.  If prices continue to 
decline within these functional components--as they have since 
deregulation and the divestiture of AT&T--DISA can achieve 
commensurate price reductions through negotiations or by 
recompetitions.  

5.  Technology insertion.  While DISA acknowledges that it is possible 
to attempt to negotiate technical enhancements with an omnibus 
contractor, the agency states that it learned from the DCTN contract 
that such negotiations can be time consuming and ponderous since the 
vendor has a contract that it knows is difficult to recompete.  

6.  Maximization of best value.  DISA maintains that its acquisition 
strategy will drive offerors to propose the best value for the 
government on each of the separate components of the network, not just 
an average best value for the entire network.  As DISA explains, if 
each offeror can submit a single proposal, structured by the offeror 
so as to make the best use of that offeror's infrastructure assets, 
the offeror might be able to submit an overall best value proposal 
compared to the sum of the individual proposals of other offerors.  
Yet, the agency explains, the firm submitting such an integrated 
proposal could retain some of the cost savings that its integrated 
proposal creates and need not submit the lowest price for the separate 
components, so long as it managed to provide an overall best value.  
In contrast, the agency maintains that under its strategy, each 
offeror would be forced to aggressively compete for each subsequent 
contract even if it won the first contract, the bandwidth manager 
services contract.  DISA argues that the winner of the bandwidth 
manager services contract would need to provide the agency with nearly 
the full benefits of whatever economies of integration may exist for 
the three contracts in order to be certain of winning the other 
contracts.

In summary, DISA argues that accepting integrated proposals would be 
inconsistent with the agency's minimum needs.  Those needs include the 
requirement for a contract structure that will, among other things, 
provide for competition both on the initial awards and on the options, 
as a means of achieving lower prices and technological infusion.  In 
addition, agency officials have explained that the mere presence of 
frequent options, whether exercised or not, will create greater 
incentives for contractor performance.  
 
Where a protester challenges a solicitation's provisions as unduly 
restrictive of competition, our Office will review the record to 
determine whether the provisions are reasonably related to the 
agency's legitimate minimum needs.  QualMed, Inc., B-254397.13; 
B-257184, July 20, 1994, 94-2 CPD  para.  33; Tek Contracting, Inc., 
B-245454, Jan. 6, 1992, 92-1 CPD  para.  28.  Here, we conclude that DISA 
has reasonably justified that approach as necessary to accomplish the 
agency's minimum needs.

The record shows that DISA considered the possible benefits and 
burdens to the agency of numerous acquisition approaches, some of 
which resemble AT&T's proposed approach.  For instance, in April 1995 
DISA considered an approach calling for a single contractor to act as 
an integrator.  According to DISA, that approach did not meet the 
agency's needs because, among other reasons, it would have locked the 
agency into a long-term omnibus contract with one vendor during a 
period of falling prices and rapid technological change in the 
telecommunications industry.  In another example, in an April 1995 
DISN Strategy Analysis, DISA compared two approaches:  (1) DISA 
serving as the integrator, with multiple contracts, and (2) 
integration by a single contractor, with only one separate DISN 
support contract.  DISA states that this was the agency's most direct 
comparison of a single contractor approach to some combination of 
multiple contracts.  Although neither approach was ruled out at that 
time, the record shows the agency again was concerned that under the 
single contractor approach it would be locked in.

AT&T disparages both of these comparisons, arguing that the integrated 
approaches which the agency considered are not the same as the 
approach which AT&T advocates in this protest.  Given the confusion in 
the record, as we explained above, concerning AT&T's integrated 
approach, it is not surprising that DISA can point to no analysis of 
an acquisition approach identical to AT&T's integrated approach.  In 
addition, although AT&T also argues that the above described analyses 
considered erroneous comparisons of the costs and potential savings 
that may result from the various approaches, the alleged errors are 
beside the point.  What is important here is that the record shows 
that DISA in fact compared various multiple contract approaches to 
various single contractor approaches and consistently was concerned 
that a single contractor approach would not meet the agency's minimum 
needs, as explained above.[9]

Turning to DISA's explanation of its minimum needs, the fundamental 
requirement of the agency's acquisition strategy is to maximize 
competition for the various components of the network, both initially 
and in the option years.  The benefits that the agency expects to flow 
from that competition are listed above.  It is DISA's view that the 
only way to assure real competition for those components, particularly 
in the option years, is for the agency to control what each of the 
components includes.  As currently structured, the three 
solicitations, by specifying the design of each of the components of 
the network, control what each of the network components will include.  
Thus, permitting AT&T or other offerors to use their network design 
capabilities in order to propose a network design that makes maximum 
use of the offeror's own telecommunications infrastructure assets 
would be inconsistent with DISA's need to assure that competition is 
possible in the option years.  In other words, if DISA allowed 
offerors to submit single proposals covering all of the requirements 
of the network, because each vendor submitting such a proposal would 
design its own network and maximize the use of its own 
telecommunications infrastructure assets, while it might be possible 
to compare each of those proposals for purposes of the initial awards, 
there would be no way to assure that real competition would be 
possible in the option years.  This is so because, if a single vendor 
initially won a contract for the entire DISN, the network created 
under that contract would be based on components designed to maximize 
the use of the awardee's infrastructure assets and those assets, which 
would be inconsistent with the assets of all other vendors, would 
present an insurmountable barrier to other vendors winning contracts 
for components of the network in recompetitions in the option years.

AT&T maintains that DISA is speculating as to the results of a 
competition between integrated proposals and combinations of piecemeal 
proposals and argues that such speculation is inappropriate when, as 
here, the agency can simply solicit both types of proposals and 
compare them.  We have looked unfavorably on an agency's speculating 
as to the results of competition when the agency could simply solicit 
and compare competitive proposals in order to determine the best 
approach to meeting its needs.  See Chesapeake & Potomac Tel. Co., 65 
Comp. Gen. 380 (1986), 86-1 CPD  para.  228; The Dept. of the Army, Request 
for Modification of GAO Recommendation, B-191003, Jan. 9, 1979, 79-1 
CPD  para.  9.  However, these cases concerned agency speculation as to the 
prices that would be submitted in a competition when the actual prices 
were easily available to the agency by soliciting and comparing 
proposals.  Here, in contrast, the issue is not the prices that 
various competitors would submit in the initial competition, but the 
prices which the agency will be required to pay for the services in 
the option years.  

Finally, AT&T argues that, if DISA deems recompetition of the pieces 
of the network in the option years to be essential to the agency's 
minimum needs, it "could provide itself the right in its integrated 
proposal solicitation to recompete any one or all of the three pieces 
in the option years."  AT&T also argues that in addition to specifying 
that integrated proposals must provide for recompetition of all 
components in the option years, DISA also could require integrated 
proposals to meet all other terms and conditions, design 
specifications and components as set forth in the three solicitations.  
According to AT&T, since this optional scenario is available to the 
agency, the agency's refusal to permit integrated proposals is 
arbitrary. 

It is not clear why AT&T did not make this argument until 11 weeks 
after the closing date for receipt of proposals, since our Bid Protest 
Regulations do not contemplate the piecemeal presentation or 
development of protest issues.  Litton Sys., Inc., Data  Sys. Div., 
B-262099, Oct. 11, 1995, 95-2 CPD  para.  215.  Nonetheless, we see nothing 
persuasive about this argument.  While it may be possible that the 
agency's needs could be satisfied under this scenario as described by 
AT&T, it is unclear to us what advantages this scenario has over the 
linked bid approach from the perspective of any offeror, including 
AT&T.  Under this scenario, as explained by AT&T, AT&T would not be 
able to take advantage of its extensive network design capabilities 
and it would not be able to maximize the use of its infrastructure 
assets.  Although at the hearing AT&T's representative stated that 
this scenario "would still be more cost effective" for AT&T than 
submitting proposals utilizing the linked bid approach, Tr. at 64, we 
simply do not see why AT&T could not propose whatever economies may be 
available to it in the context of the linked bid approach as explained 
by the agency.

The protests are denied.

Comptroller General
of the United States

1. In a previous decision, Sprint Communications Co., L.P., 
B-262003.2, Jan. 25, 1996, 96-1 CPD  para.  24, we denied a protest 
concerning the award of the interim contract to AT&T.

2."Traffic" is the flow of information in a telecommunications network 
and a telecommunications "switch" is essentially a computer system 
that routes or directs traffic to the desired location.

3. Bandwidth managers essentially link transmission facilities (or 
transmission lines) within a telecommunications network.

4. The support services solicitation contains a conflict of interest 
clause which prohibits the support services contractor and 
subcontractors from acting as a prime contractor or subcontractor on 
any of the other procurements; AT&T has no plans to submit a proposal 
under that solicitation.

5. In a third issue, AT&T argued that the bandwidth manager services 
solicitation included impermissibly vague requirements and ambiguous 
specifications.  After DISA amended the solicitation, AT&T withdrew 
this allegation. 

6. AT&T also argued,

            "the second count of AT&T's protest [concerning the 
            restrictiveness of design specifications] is inextricably 
            linked with the first count.  [DISA] correctly states 
            that, once it decided to adopt the piecemeal procurement 
            method, it had little option but to adopt some form of the 
            restrictive specification challenged here. . . .  However, 
            [DISA] fails to recognize that this is an admission that 
            its decision to adopt a piecemeal approach amounted to a 
            decision to utilize a restrictive design specification 
            which imposed on the agency the responsibility to take 
            even greater care to make sure that the piecemeal approach 
            itself was necessary to satisfy its needs within the 
            meaning of [the Competition in Contracting Act of 1984]." 

7. DISA and AT&T's competitors also dispute the risks imposed by the 
solicitations as currently structured.  [Deleted].

8. SONET, using fiber optic cables, is a high-speed, high bandwidth 
service which enables users to transmit bulky files across wide area 
networks.

9. AT&T also argues that the record demonstrates that prior to the 
protest the agency never considered the relative benefits of 
soliciting the type of integrated proposal advocated by AT&T, or 
whether the purposes that DISA seeks to achieve--positive control, 
maximum competition, incentives for improved contractor performance, 
etc.--could also be achieved by soliciting piecemeal and integrated 
proposals at the same time.  We believe the agency has adequately 
considered the relative merits of AT&T's proposed single contract 
approach.  We first note that in reviewing an agency's decision, we 
look to the entire record, including statements and arguments made in 
response to the protest, so that we may determine whether that 
decision is supportable; we do not limit our review to the question of 
whether the decision was properly documented at the time it was made.  
See Allied-Signal Aerospace Co., Bendix Communications Div., 
B-249214.4, Jan. 29, 1993, 93-1 CPD  para.  109.  Moreover,  AT&T apparently 
would require an agency to demonstrate using only the record created 
prior to the protest that it had "considered, evaluated and analyzed" 
precisely the acquisition approach advocated by a protester, even 
where, as in this case, that approach repeatedly changes throughout 
the course of the protest.  That requirement is simply unreasonable.