TITLE:  Lucent Technologies, Inc., B-285505, August 23, 2000
BNUMBER:  B-285505
DATE:  August 23, 2000
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Lucent Technologies, Inc., B-285505, August 23, 2000

Decision

Matter of: Lucent Technologies, Inc.

File: B-285505

Date: August 23, 2000

Dean L. Grayson, Esq., for the protester.

Robert D. Hogue, Esq., Catherine L. Horan, Esq., and Craig L. Kemmerer,
Esq., Naval Sea Systems Command, for the agency.

David A. Ashen, Esq., Office of General Counsel, GAO, participated in
preparation of the decision.

DIGEST

Protest that requirement for Voice over Internet Protocol (VoIP) telephony
system at new agency headquarters facilities is unduly restrictive of
competition is denied where agency reasonably determined that a VoIP
approach would permit a convergence of voice and data systems, avoiding the
necessity for both a comprehensive telephone system (with a parallel wiring
system) and a separate data network, and thereby enhance the agency's
ability to reduce its cost of operation and ease its administrative burden.

DECISION

Lucent Technologies, Inc. protests the terms of request for proposals (RFP)
No. N00024-00-R-4105, issued by the Naval Sea Systems Command (NAVSEA) (as a
simplified acquisition under Federal Acquisition Regulation (FAR) subpart
13.5) for a Voice over Internet Protocol (VoIP) telephony system at its new
headquarters facilities at the Washington Navy Yard, District of Columbia.
Lucent asserts that the requirement for a VoIP system exceeds the agency's
needs and unduly restricts competition.

We deny the protest.

As a result of the 1995 Base Realignment and Closure process, which resulted
in a determination that NAVSEA must vacate its leased space in Arlington,
Virginia and move its headquarters functions to the Washington Navy Yard by
July 13, 2001, NAVSEA is constructing new headquarters facilities at the
Washington Navy Yard. Rather than install a classic circuit-switched
telephone system in which a Private Branch eXchange (PBX) creates an
end-to-end circuit or connection for a telephone call, the RFP requests
proposals for a VoIP telephony system, that is, one using a packet-switched
transmission model in which voice, like other data, is fragmented into
multiple, discrete IP packets which flow independently over the network. The
agency expects that adoption of a VoIP telephony system will permit a
convergence of voice and data systems, avoiding the necessity for a
comprehensive telephone system (with a parallel wiring system) separate from
the data network, and thereby enhance its ability to conduct operations,
lower its cost of operation and ease its administrative burden. According to
the RFP:

The objective of the VoIP system at the [Washington Navy Yard] is to provide
basic telephony services with classic PBX features leveraging the planned
data infrastructure without building a parallel voice infrastructure.
Workstations gain access to the data infrastructure through a switch port
integral to the phone that provides the same performance and security
features and functions as if connected directly to the data network. . . .
Significant cost reductions are expected through convergence of classic PBX
and data support staffs, single information distribution infrastructures,
ability to expand local system via [wide area network] links and simplified
moves.

VoIP Evaluation Plan (Revision 2) at 2.

In order to meet the July 2001 completion date, NAVSEA has determined that
the new facilities must be completed and ready to receive the first group of
employees by January 2001; this in turn requires that the entire telephone
system be operational by August 2000, thereby allowing four months for
telephone set-up, installation and testing before the first group of
employees arrives in January 2001. Agency Report at 2, 5. Accordingly, the
RFP required the ability to deliver a fully functional IP PBX, unified
messaging and the first 200 telephones within 20 days after award. VoIP
Requirements Specification (Revision 2) sect. 3.1; VoIP Evaluation Plan
(Revision 2) at 5-6, 8. The solicitation estimate of the total requirement
included 3,912 standard and 186 conference room/reception telephone sets.
VoIP Evaluation Plan (Revision 2) at 1.

Lucent generally asserts that specifying a VoIP telephony system exceeds the
agency's needs because (1) a classic PBX system would satisfy the agency's
need for basic telephony services with classic PBX features, and (2) even
with a VoIP system, the agency will still require parallel telephone and
data networks. Specifically, Lucent "does not dispute that VoIP is the
technology to which the industry is migrating," and it "does not dispute
that convergence of voice and data networks can result in tremendous
efficiencies." Protester's Comments at 1-2. Indeed, Lucent's own commercial
literature, as noted by the agency, indicates that there is "a growing trend
toward the convergence of voice and data, with the goal of providing more
streamlined, cost-effective, and unified communications throughout a
business." Agency Report at 10, and Tab 18 at 333. However, according to the
protester, "the cost reductions mentioned in the Lucent literature (as well
as the other literature included within the agency report) presume that the
end user will not also be purchasing, installing and maintaining a large,
state-of-the-art, campus-wide parallel telephone switch, with an associated,
fully-integrated voice messaging platform." Protester's Comments at 2.
Lucent asserts that here, in contrast, notwithstanding its VoIP approach,
NAVSEA will still need to install parallel networks because a classic PBX
system will be needed to serve secure telephones, which are not compatible
with a VoIP network, and faxes, modems and other analog devices, which are
not well proven over a VoIP network.

As noted above, the RFP was issued pursuant to FAR subpart 13.5, which
allows simplified procedures for the acquisition of commercial items of less
than $5 million. See 10 U.S.C. sect. 2304(g)(1) (Supp. IV 1998). Procurements
conducted under simplified acquisition procedures are exempt from the
statutory requirement to obtain full and open competition; instead,
contracting officers are required to promote competition to the maximum
extent practicable. 10 U.S.C. sect. 2304(g)(3) (1994); FAR sect.sect. 13.104, 13.501(a).
Accordingly, the issue here is whether the agency in preparing the RFQ
specified its needs and solicited quotes in a manner designed to obtain
competition to the maximum extent practicable and included restrictive
provisions only to the extent necessary to satisfy the agency's needs. In
reviewing a challenge to the agency's determination of its needs, we defer
to the contracting agency, which is most familiar with its needs and how
best to fulfill them, and we will question that determination only where it
is shown to have no reasonable basis. American Eurocopter Corp., B-283700,
Dec. 16, 1999, 99-2 CPD para. 110 at 3-4.

We find no basis to question NAVSEA's determination that only a VoIP
telephony system is consistent with the agency's needs and affords the
possibility of significant future operational cost and administrative
savings. [1] As noted above, Lucent itself concedes that the convergence of
voice and data networks, which VoIP makes possible, "can result in
tremendous efficiencies." Here, the record indicates that although a limited
parallel telephone system, in addition to the VoIP system, would still be
required, NAVSEA reasonably anticipated that a VoIP telephony system would
preclude the necessity for purchasing, installing and maintaining two
complete, comprehensive and widespread infrastructures, one for voice and
one for data, and would thereby enable the agency to obtain some of the
efficiencies which Lucent concedes are possible with voice and data
convergence. In this regard, NAVSEA reports that testing by the agency
indicates that its facsimile machines and modems can be operated using ports
on the IP infrastructure. Likewise, the agency states that its ISDN-based
video teleconferencing equipment can be used over an IP network with the
installation of adapters. Further, although secure telephones, facsimile
machines and other devices will for now require a separate, secure network,
NAVSEA reports that it has designed its space to co-locate such secure
devices to the maximum extent possible so that it will not need to install
wiring capable of supporting secure devices in most of its facilities. [2]
The result, according to the agency, is that only 1,178 ports out of 5,984
total system ports (or 19.69 percent) will be PBX rather than VoIP ports,
and the wiring infrastructure required under a VoIP approach will be
significantly reduced as compared to that required for a classic PBX
telephone system in combination with a separate data network. Agency
Comments, July 10, 2000, at 4-7. [3]

It thus appears from the record that by specifying a VoIP telephony system,
the agency will be able to avoid the additional administrative burden and
cost associated with installing, operating and maintaining two comprehensive
communications infrastructures. We therefore conclude that NAVSEA reasonably
determined that a VoIP telephony approach, rather than a classic PBX
approach, was necessary to satisfy the agency's needs. [4]

The protest is denied.

Robert P. Murphy

General Counsel

Notes

1. The agency estimated the total cost to establish a VoIP-based system as
slightly more than the cost to establish a classic PBX-based system, but it
estimated the cost of the VoIP component itself to be less than the cost of
the classic PBX component.

2. NAVSEA reports that it is participating in a working group examining a
possible IP solution for a future generation of secure telephones. Agency
Comments, July 10, 2000, at 6.

3. NAVSEA acknowledges that two voice mail systems, one secure and one
non-secure, will be required under a VoIP approach, but it reports that
agency security policy would require separate secure and non-secure voice
mail systems even under a classic PBX approach. Agency Comments, July 18,
2000, at 1-2; Agency Comments, July 10, 2000, at 5.

4. We note that NAVSEA maintains that a VoIP telephony approach also offers
certain operational advantages. For example, NAVSEA notes that it operates
in a distributed engineering and design environment in which its ship and
weapons system engineers and designers collaborate simultaneously from
locations around the world. According to the agency, it expects that VoIP's
combination of voice and data will enhance the agency's collaborative, real
time design capabilities (where designers discuss drawings while reviewing
changes in real time) beyond those available with its current equipment.
Agency Report at 11; Agency Comments, July 10, 2000, at 7. In view of the
potential cost and administrative savings associated with a convergence of
the voice and data networks, as discussed above, we need not address this
basis for specifying a VoIP approach.