BNUMBER:  B-280374             
DATE:  September 23, 1998
TITLE: B3H Corporation, B-280374, September 23, 1998
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective 
Order.  This redacted version has been approved for public release.

Matter of:B3H Corporation

File:B-280374            
        
Date:September 23, 1998

Ira E. Hoffman, Esq., and Alan M. Grayson, Esq., Grayson and 
Associates, P.C., for the protester.
Donal R. Myrick, Spectrum Sciences & Software, Inc., an intervenor.
Clarence D. Long III, Esq., and Lt. Col. Gregory B. Porter, Department 
of the Air Force, for the agency.
Katherine I. Riback, Esq. and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protester's speculation that a competing firm has an incentive to 
falsely conclude that certain items being acquired by agency are not 
compatible with firm's software used to process the items, thereby 
improving its chances for subsequent awards for the items, does not 
provide a basis to require that the firm be prohibited from competing.

2.  Agency is not required to structure solicitation requirements to 
eliminate competitive advantages allegedly possessed by a contractor 
by virtue of its particular circumstances, where advantages did not 
result from any unfair government action.  

3.  Protest that agency engaged in allegedly improper communications 
with the prospective awardee is denied where the record does not 
support allegations. 

DECISION

B3H Corporation protests the issuance of a purchase order to Spectrum 
Sciences & Software, Inc., under request for quotations (RFQ) No. 
F44650-98-T0130, issued by the Department of the Air Force for certain 
weapon safety descriptors, also known as "footprints."  The protester 
principally argues that Spectrum should have been found ineligible for 
consideration due to an alleged conflict of interest.  

We deny the protest.

BACKGROUND

The footprints being acquired consist of graphical representations of 
weapon impact probability predictions.  Each footprint describes a 
weapon delivery by a particular type of aircraft, using a particular 
weapon, within a specific range of delivery parameters such as 
airspeed and dive angle.  The footprints are based on statistical 
evaluations of historical "bomb-drop" data, the professional judgment 
of evaluators regarding the sufficiency of that data, and complex 
computer modeling of impact effects, such as ricochet.  These 
footprints are used to determine what types of missions may be 
conducted at various size ranges.  A software program entitled 
"Hazard" is used by the Air Force to process the footprint data into a 
usable format so that the footprints can be manipulated on digitized 
range maps in order to make a decision as to whether it is safe to 
conduct a given mission on a particular range.  Spectrum independently 
developed the Hazard software program and owns  proprietary rights to 
the source code.  

Previous acquisitions of these footprints were accomplished by the 
agency under a contract for advisory and assistance services (CAAS) on 
which B3H was a prime contractor and Spectrum was its subcontractor, 
under which B3H's proposal received an award based on its inclusion of 
Spectrum's Hazard methodology.[1]  Agency Report, Tab 6.  

In April 1997, the agency issued a Commerce Business Daily notice that 
it intended to purchase additional footprints, software and site 
licenses from Spectrum on a sole source basis.  B3H then filed an 
agency level protest on May 9, in which it asserted that a sole source 
award for the entire requirement was not valid, because only the 
software and related licenses were truly proprietary to Spectrum, and 
that development of the footprints and related items could be 
accomplished by any other firm, working in conjunction with Spectrum.  
Agency Report, Tab 8.  On August 6, the Command Competition Advocate 
denied the activity request to procure additional footprints, 
software, and site licenses from Spectrum on a sole source basis, 
stating that there were at least four possible sources for this 
procurement, including Spectrum.  Agency Report, Tab 9.  As a result, 
on September 29, the agency determined to purchase only the rights to 
use the Hazard software program from Spectrum.  
  
On April 20, 1998 the agency issued the present RFQ as a small 
business set-aside for the development of 80 footprints.  The RFQ, 
which required that quotations be submitted by May 8, contemplated the 
issuance of a fixed-price purchase order to the vendor whose quotation 
represented the best value to the government.  RFQ  sec.  52.212-2 at 9.  

The solicitation included the requirement for all footprints developed 
under this contract to be "certified" by the contractor.[2]  RFQ  sec.  
4.1.4 at 3.  In addition, the RFQ required that the contractor ensure 
that the footprints are "completely compatible" with the Hazard 
program.  RFQ  sec.  4.3.1 at 6.  To this end, section 4.3.2 of the RFQ 
contained the following requirement: 

     Footprints shall be independently verified and validated by 
     software contractor, Spectrum Sciences and Software, Inc., to 
     ensure they are properly integrated into Hazard software.  
     Contractor shall obtain written certification from Spectrum that 
     they have certified each Footprint and provide copy of 
     certification to [the Air Force] along with each Footprint 
     delivery.

On April 23, the Chief Executive Officer of B3H discussed with a 
Spectrum representative the possibility of the firms teaming together 
to submit a quotation in response to the RFQ.  On May 4, the Spectrum 
representative declined B3H's offer to team with it and indicated that 
it would compete for the contract as a prime contractor.[3]    

The Air Force received quotations from B3H and Spectrum in response to 
the RFQ.  The Air Force determined not to include B3H's quotation in 
the competitive range because its deficiencies were such that 
correction would have been tantamount to the submission of an entirely 
new proposal, and the price quoted by B3H was [deleted] higher than 
the price quoted by Spectrum.  Spectrum's proposal was rated 
"exceptional" in 7 out of 13 technical criteria.  The agency conducted 
negotiations with Spectrum, issued a purchase order to that firm on 
June 5, and this protest followed.  

ANALYSIS

Organizational Conflict of Interest 

B3H argues that selection of Spectrum is improper because it presents 
an organizational conflict of interest to have Spectrum both develop 
footprints and provide independent verification and validation (IV&V) 
of the footprints, as required by section 4.3.2 of the RFQ, to ensure 
Hazard compatibility.[4]  B3H misconstrues the nature of Spectrum's 
involvement.  Spectrum's only role in the verification and validation 
process is to ensure that the already-developed footprints are in a 
format that is compatible with Spectrum's proprietary Hazard software 
program.  Hearing Transcript (Tr.) at 192-93.  We do not believe that 
an organizational conflict of interest can arise here because 
Spectrum, as the IV&V contractor for Hazard compatibility, is not 
verifying any element of the accuracy of the footprint; rather, it is 
simply ensuring that the footprint is in a format which is compatible 
with Spectrum's Hazard software.   

B3H also asserts that if a firm other than Spectrum is selected for 
footprint development, then Spectrum would have an incentive to 
falsely conclude that the footprints are not compatible with the 
Hazard software, thereby improving Spectrum's chances for subsequent 
awards.  

The protester's argument regarding a conflict of interest on the part 
of Spectrum is entirely speculative.  While an agency may exclude an 
offeror from the competition because of an apparent conflict of 
interest in order to protect the integrity of the procurement system, 
even if no actual impropriety can be shown, such a determination must 
be based on facts and not mere innuendo or suspicion.  Greenwich Air 
Servs., Inc., B-277656, Nov. 5, 1997, 97-2 CPD  para.  159 at 4.  Here there 
is simply no basis to anticipate that Spectrum would provide false 
incompatibility determinations.

B3H also argues that Spectrum should be precluded from receiving an 
award for footprint development because of the RFQ requirement that 
the contractor that develops the footprints provide a copy of a 
"current, signed agreement with Spectrum Sciences and Software, Inc. 
to provide independent validation and verification of footprints and 
maps to ensure Hazard compatibility on this effort."  RFQ at 10.  B3H 
takes the position that Spectrum does not have, and cannot properly 
enter into, such an agreement with itself.    

This argument is without merit.  The clear purpose of the requirement 
is to ensure that, regardless of which firm develops the footprints, 
the assurance of Hazard compatibility will be provided by Spectrum.  
Clearly, if Spectrum develops the footprints, this provides 
appropriate assurance that the footprints are compatible with its own 
Hazard software.  

Competitive Advantage

B3H also argues that it was competitively harmed by the fact that its 
quote included the fee that it would have to pay Spectrum to provide 
the IV&V services for Hazard compatibility, and that Spectrum had a 
competitive advantage by virtue of the fact that its quote did not 
include this cost.  In other words, B3H argues that it would have 
submitted a more competitively priced quote, but for the fact that it 
was required to pay Spectrum a fee of $2,500, per footprint, to 
perform the IV&V services to ensure Hazard compatibility.  Tr. at 
26-28.   

B3H's objection is without merit, since a firm properly may enjoy a 
competitive advantage by virtue of its particular circumstances, and 
the government is not required to equalize such an advantage.  
Consolidated Duct Sys., Inc., B-241402,    B-241402.3, Feb. 6, 1991, 
91-1 CPD  para.  125 at 5.  Additionally, B3H's argument that it would have 
submitted a competitive quote but for the fee that it had to pay 
Spectrum is contradicted by the record.  B3H's quote was [deleted] 
higher than Spectrum's, and the $2,500 fee, per footprint, that B3H 
paid to Spectrum to perform IV&V services to ensure Hazard 
compatibility accounts for less than [deleted] the price difference 
between B3H's and Spectrum's quotes.  Tr. at 128-31; Agency Report, 
Tab 22.[5]    
         
Alleged Improper Communications Between Agency and Spectrum Before 
Award

The protester points to two instances of alleged improper 
communications between the Air Force and Spectrum that it contends 
"irreparably tainted" the award to Spectrum.  Protester's Comments at 
17.  The first is based on a May 4 telephone conversation between 
B3H's Chief Executive Officer and a Spectrum representative in which 
Spectrum declined B3H's offer to team with it, and during which B3H 
alleges that Spectrum said that the Air Force had given Spectrum 
assurances that if it (Spectrum) bid as a prime contractor it would 
win.  

At a hearing conducted in connection with this protest, testimony was 
elicited from the parties involved in this conversation.  The Air 
Force personnel involved in this procurement all explicitly deny 
making the statement that Spectrum would win if it bid as the prime 
contractor.  Tr. at 96, 142, 185.  Further, at the hearing, the 
Spectrum representative stated that he told B3H simply that he had 
received assurances from the agency that Spectrum would be allowed to 
submit a quote as a prime contractor.  Tr. at 30-31.  On the record 
before us, Spectrum's version of this conversation is the more 
plausible, in view of the explicit denials by Air Force personnel.

The second communication is based on B3H's debriefing during which, a 
B3H representative alleges, the contracting officer stated that the 
agency knew how much Spectrum would charge B3H, per footprint, to 
provide IV&V for Hazard compatibility.  At the hearing, the 
contracting officer stated that in reply to a question from the B3H 
representative concerning price, she stated that the price evaluation 
involved price analysis, such as comparing the prices with previous 
buys.  Tr. at 97-98.[6]  The other Air Force personnel present at the 
debriefing confirm that the contracting officer never said that she 
knew what amount Spectrum would charge B3H for IV&V services to ensure 
Hazard compatibility.  Tr. at 141, 186.  This version of the 
conversation is further confirmed by the testimony of the Spectrum 
representative that Spectrum never communicated the price that it 
would charge B3H for IV&V services for Hazard compatibility to any 
agency officials.  Tr. at 46-47.

On balance, the record supports the agency's position that the 
contracting officer did not state during the debriefing that she knew 
what amount that Spectrum would charge B3H for IV&V services for 
Hazard compatibility.  In short, there is no plausible evidence that 
the agency engaged in any improper communications with Spectrum. 

B3H also alleges that Spectrum helped the Air Force draft the RFQ.  
B3H's belief appears to be primarily based on the fact that the RFQ 
specifically lists Spectrum as the IV&V contractor for Hazard 
compatibility.  B3H seems to assume that there must have been some 
inappropriate communication between Spectrum and the agency before 
Spectrum was listed in the RFQ as the IV&V contractor for Hazard 
compatibility.  There is no support for this belief in the record, and 
it is contradicted by the agency.  Tr. at 155, 214-15.  The 
acquisition officer, who drafted the RFQ, stated that he listed 
Spectrum as the IV&V contractor for Hazard compatibility based on 
communications that took place during B3H's agency-level protest of 
the proposed sole source procurement which caused him to believe that 
Spectrum would agree to provide IV&V services for Hazard compatibility 
for any firm that wanted to submit a quote in response to the RFQ.  
The acquisition officer also testified that he did not contact 
Spectrum before listing that firm in the RFQ as the IV&V contractor 
for Hazard compatibility.  Tr. at 155.  This statement was further 
confirmed by a Spectrum representative who testified that the firm 
first learned that it was listed in the RFQ as supplying IV&V services 
for Hazard compatibility when Spectrum received and read a copy of the 
RFQ.  Tr. at 43-44.  

The agency official responsible for drafting the RFQ stated that the 
RFQ evolved from previous contracts, such as the CAAS contract, and 
lessons learned from those contracts.  For example, B3H wrote a trip 
report while it was working for the Air Force under the CAAS contract, 
where it, for the first time, categorized footprints.  The acquisition 
officer, who drafted the RFQ, reasoned from this that if there were 
certain different types of footprints, then there had to be some 
footprints that were easier and harder to develop and that this level 
of effort should be reflected in the price the government was being 
charged.  Tr. at 226-27.  Therefore the present RFQ requires that a 
firm classify/price each footprint according to the methodology that 
it will use. RFQ  sec.  4.1.1.1 at 2.  The Air Force acknowledged that 
there were communications between it and Spectrum during the RFQ 
formation process when the agency was conducting market research for 
the purpose of determining whether this procurement could be conducted 
as a commercial buy.  Tr. at 91-92.  The record before us does not, 
however, support the protester's contention that Spectrum helped to 
write the RFQ, or that the RFQ was written around Spectrum's 
capabilities to develop footprints.        

Bias 

Finally, the protester argues that this procurement was a "sham" and a 
"contrived effort" to sole source this award to Spectrum.  Protest 
Letter at 5.  Since this complaint is based on the same allegations 
that were considered above and found to be without merit, it is 
without basis.  

The protest is denied.

Comptroller General 
of the United States

1. The CAAS solicitation did not specify any particular software to 
enable the Air Force to process the footprint data.  

2. The agency believed that this certification was necessary to 
preclude liability issues on the part of the government should the 
data later prove to be incorrect.  Contracting Officer's Statement at 
1.    

3. The exact particulars of this conversation between representatives 
of B3H and Spectrum are in dispute, as discussed below.

4. An organizational conflict of interest exists when, because of 
other activities or relationships with other persons, a person is 
unable or potentially unable to render impartial assistance or advice 
to the government, or the person's objectivity in performing the 
contract work is or might be otherwise impaired, or a person has an 
unfair competitive advantage.  See Federal Acquisition Regulation  sec.  
9.501.  

5. In addition, we note that this argument, in large measure, 
constitutes an untimely protest of an alleged solicitation impropriety 
since B3H failed to protest the RFQ requirement for Spectrum IV&V 
services for Hazard compatibility prior to the due date for 
quotations.  4 C.F.R.  sec.  21.2(a)(1) (1998).  B3H has also raised a 
number of other issues, some of which are, in fact, untimely 
objections to alleged solicitation improprieties.  We have considered 
these issues but, to the extent that any of them are timely and 
cognizable, we find that they provide no basis to sustain the protest.  

6. The contracting officer also stated at the hearing that at the time 
of the debriefing she did not know the price that Spectrum had agreed 
to charge B3H for the IV&V services for Hazard verification.  Tr. at 
97-98.