BNUMBER: B-279839
DATE: July 27, 1998
TITLE: Rothe Development, Inc., B-279839, July 27, 1998
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Matter of:Rothe Development, Inc.
File: B-279839
Date:July 27, 1998
David F. Barton, Esq., The Gardner Law Firm, for the protester.
Clarence D. Long, III, Esq., and Wilbert W. Edgerton, Esq., Department
of the Air Force, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
In soliciting proposals for a contract for operation and maintenance
services, agency did not improperly disclose information proprietary
to the protester regarding the number of individuals employed by the
protester for the performance of the predecessor contract where the
information disclosed cannot reasonably be considered proprietary and
the protester's claim that it was competitively disadvantaged by the
release of the information is speculative at best.
DECISION
Rothe Development, Inc. protests the award of a contract to any other
offeror under request for proposals (RFP) No. F34608-98-R-0016, issued
by the Department of the Air Force, for operation and maintenance
services for the base telecommunications system (BTS) and network
control center (NCC) at Columbus Air Force Base, Mississippi. Rothe,
the incumbent contractor for a portion of the services, alleges that
it was placed at a competitive disadvantage because the agency
disclosed certain information which allegedly is proprietary to Rothe.
We deny the protest.
The RFP, issued on March 6, 1998, provides for the award of a
fixed-price requirements contract for a base period with four 1-year
options. The contractor will be required to provide all personnel,
equipment, parts, materials, tools, operation and maintenance
documentation, and other items and services necessary to perform
operations and maintenance of the BTS and NCC. RFP sec. C 1.1.1.
The RFP lists company organization, quality, and safety as the
technical evaluation factors, and includes evaluation subfactors under
each of these evaluation factors. RFP sec. M-800 B. With regard to the
company organization evaluation factor, the RFP lists eight evaluation
subfactors, including personnel. Id. The RFP states that, under the
personnel subfactor, the "availability of sufficient personnel with
the required skills, training, and experience will be evaluated." Id.
A preproposal conference was held, during which a potential offeror
asked, "How many personnel are currently working at the NCC?" The Air
Force explains that, in order to answer this question, the quality
assurance evaluator (QAE) for the predecessor contract, who has a
close working relationship with the Rothe employees performing the
contract, "mentally went through each office and listed the names of
the persons in the offices." Agency Memorandum of Law at 2.
According to the Air Force, the QAE found "that Rothe had 23 people
working the contract with approximately 15 performing the NCC work."
Id. The agency subsequently issued 71 questions and answers (Q&A)
regarding the RFP to potential offerors, with Q&A number 24 reading as
follows:
24. How many personnel are currently working at the NCC?
The contractor currently has 23 people working the NCC - however,
only approx 15 of them are performing the work defined under this
contract. Please note that individual personnel may be
cross-trained and performing more than one function.
Rothe asserts that the agency's answer to question 24 improperly
disclosed Rothe's "proprietary privileged and confidential manning
criteria related to the solicitation
. . . and destroyed its competitive position for the solicitation."
Protest at 3. Rothe contends that, contrary to the agency's
assertions, the number of Rothe personnel currently performing the
contract could only have come from the technical proposal submitted by
Rothe for the predecessor contract, and points out that this proposal
contained language to preserve the confidentiality of the information
contained therein. Rothe requests that the RFP be canceled, and its
current contract extended through December 1999 with 4 option years
and modified to include the additional work required under the RFP.
In the alternative, Rothe requests that it be awarded a contract for
the services on a sole-source basis, or that the RFP be amended to
delete the evaluation preference for small, disadvantaged businesses
or issued as a total small business set-aside.
We have recognized the right of a firm to protect its proprietary data
from improper exposure in a solicitation in the context of a bid
protest. The Source, B-266362, Feb. 7, 1996, 96-1 CPD para. 48 at 2;
Ingersoll-Rand Co., B-236391, Dec. 5, 1989, 89-2 CPD para. 517 at 2. As a
general rule, proprietary information is that which is marked
proprietary or otherwise submitted in confidence to the government.
Good Food Serv., Inc., B-260728, June 20, 1995, 95-2 CPD para. 123 at 2.
Where a protester alleges that such information was improperly
disclosed, the record must show that the material involved significant
time and expense in preparation and contained material or concepts
that could not be independently obtained from publicly available
literature or common knowledge, and establish that the protester was
competitively prejudiced by the release, before we will sustain the
protest. Ursery Cos., Inc., B-258247, Dec. 29, 1994, 94-2 CPD para. 264
at 2; Ingersoll-Rand Co., supra. Such competitive prejudice may not
be established on the basis of speculation. JL Assocs., Inc.,
B-239790, Oct. 1, 1990, 90-2 CPD para. 261 at 4-5.
Here, considering the record most favorably to the protester, we do
not believe that the information disclosed by the agency could
reasonably be considered proprietary to the protester or that its
disclosure resulted in any competitive disadvantage to Rothe.
First, as stated by Rothe in its April 6 letter to the agency, "the
information [disclosed in Q&A No. 24] is incorrect." Indeed, the
record confirms that the staffing levels disclosed are in fact
different than those set forth in the proposal submitted by Rothe in
response to the predecessor RFP. Where the information released is
substantively different than that which the protester claims as its
own, we fail to see how the protester can claim that the agency
released its proprietary information.
Moreover, it appears that the released information was ascertained
from the QAE's "mental" headcount, as asserted by the agency, not
through the agency's review of Rothe's proposal submitted in response
to the predecessor RFP. In our view, it is more likely that
inaccurate information would result from a mistaken mental headcount
rather than the review of a firm's proposal. Such a mental headcount
is, in our view, akin to "reverse engineering," and the release of
information or data developed through reverse engineering is not
improper. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476 (1974);
Si Handling Sys., Inc. v. Heisley, 753 F.2d 1244, 1255 (3rd Cir.
1985); Ingersoll-Rand Co., supra, at 4. In any event, matters which
are fully disclosed by the marketed product (such as the number of
personnel performing a services contract monitored by the government)
cannot be protected as a trade secret. Ingersoll-Rand Co., supra.
Further, we fail to see how the protester was competitively
disadvantaged by the agency's release of the information. In this
regard, the agency estimates that the contract being performed by
Rothe includes 40 percent of the work required under this RFP. Rothe,
on the other hand, estimates that its current contract includes 80
percent of the work required under the RFP. Assuming for the sake of
argument that Rothe is correct, the fact remains that 20 percent of
the work was not covered by the predecessor RFP, and neither the
agency nor Rothe asserts that offerors construct a reasonable proposal
by simply increasing the staffing levels disclosed by the agency
proportionally to cover all of the work now being solicited.
Moreover, the information disclosed did not reveal what labor
categories, mix, or rates would be appropriate, or how Rothe
calculated its profit, overhead, and management costs--important
elements of price and in some instances, technical approach. At best,
the agency's release of the information may operate to normalize to a
small degree the competition so that all offerors will have a very
rough estimate as to how many individuals will be needed for contract
performance. As such, even if the information disclosed could be
considered proprietary, the effect of releasing the information on
Rothe's competitive position under the terms of the RFP is speculative
at best and provides no basis to sustain the protest. See Ursery
Cos., Inc., supra, at 3.
The protest is denied.
Comptroller General
of the United States