TITLE:  Computer Technology Associates, Inc., B-288622, November 7, 2001
BNUMBER:  B-288622
DATE:  November 7, 2001
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Decision

Matter of: Computer Technology Associates, Inc.

File: B-288622

Date: November 7, 2001

David R. Hazelton, Esq., Thomas Patten, Esq., and C. Thomas Powell, Esq.,
Latham & Watkins, for the protester.

Susan D. Falkson, Esq., and William A. Wotherspoon, Esq., for Unisys
Corporation, and James J. McCullough, Esq., and Catherine E. Pollack, Esq.,
Fried, Frank, Harris, Shriver & Jacobson, for Science Applications
International Corp., intervenors.

Kacie A. Haberly, Esq., General Services Administration, for the agency.

Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where protester's employees, including two management personnel, improperly
obtained and reviewed other vendors' proposal material during course of
procurement, agency reasonably determined to disqualify protester from
further participation in the competition.

DECISION

Computer Technology Associates, Inc. (CTA) protests its disqualification
from further participation under a request for quotation (RFQ) issued by the
General Services Administration (GSA), Federal Supply Service (FSS), for
information technology (IT) services. CTA asserts that there is no evidence
to support the disqualification.

We deny the protest.

The RFQ provided for the award of a blanket purchase agreement (BPA) for IT
applications maintenance, enhancement, technical support, program
management, and transition services to maintain and enhance existing FSS IT
applications. The RFQ also provided for the award of five task orders, each
for a base period, with nine 1-year options. Future task orders were to be
awarded as FSS needs dictated. Proposals were to be evaluated on the basis
of technical quality factors and price, with technical quality considered
significantly more important than price. Multiple BPAs were to be awarded
based on the technical acceptability of proposals on all five task orders.
Each task order was to be awarded to the vendor whose task order proposal
offered the most advantageous solution to the government from a price and
technical standpoint.

Three vendors, CTA (the incumbent contractor for the FSS requirement),
Unisys Corp., and Science Applications International Corp. (SAIC), submitted
quotations.
In addition to written technical and price proposals, each vendor made a 90
minute oral technical presentation. These oral presentations were held with
each vendor individually, with only agency and vendor personnel present, and
were transcribed by a court reporter. Upon receipt of the transcripts on
August 2, the contracting officer sent copies by e-mail to her assistant and
to a technical evaluation team member. She also e-mailed each vendor a copy
of its own transcript.

On Thursday, August 2, CTA's help desk operator obtained Unisys's and SAIC's
transcripts from GSA's e-mail system. Agency Report (AR) at 2-3. This
employee then gave the transcripts to CTA's project manager (PM), who was
then with the deputy PM (DPM). PM Declaration (Decl.) para.para. 1, 4. The PM then
notified and sought guidance from CTA's chief executive officer (CEO). PM
Decl. para. 2. The CEO was unable "to have a serious conversation with him at
that time," and directed the PM to contact his supervisor, the president of
CTA's Internet services unit, the unit responsible for submitting CTA's
proposal. CEO Supplemental (Suppl.) Decl. para. 2; PM Decl. para. 2. When the PM
indicated that he had copies of the oral presentations of CTA's competitors,
CTA's unit president arranged to meet him the next day (August 3). Unit
President's Decl. para. 2. The PM then "reviewed the SAIC transcript and skimmed
the Unisys transcript" and highlighted portions of both. PM Decl. para. 2;
Suppl. AR, Cover Letter.

On Friday, August 3, the unit president was out sick, so the PM gave the
transcripts to the DPM and asked him to review them over the weekend. Unit
President's Decl. para. 2; DPM Decl. para. 2. While the DPM, who was involved in
preparing CTA's proposal, did not believe there would be anything of use or
advantage to CTA in the transcripts, he subsequently read and marked
portions of SAIC's, but not Unisys's, transcript. [1] DPM Decl. para.para. 3-4.;
Suppl. AR, Cover Letter.

On Monday, August 6, CTA's unit president returned to his office and found a
printout of the transcripts apparently transmitted by the PM. Unit
President's Decl. para. 3. He did not review them and directed his secretary to
seal them and store them in a secure place. Id. He also directed the PM to
have any additional copies sealed and sent to his office. That same day, the
CEO arrived in Washington, D.C. from his home in California to meet with the
contracting officer. CEO Decl. para. 8.

On August 7, the contracting officer issued final technical questions and
requests for clarifications to all three vendors, with an August 9 deadline
for proposal revisions. The agency identified 23 questions for CTA, 20 of
which concerned cost issues. On August 8, CTA personnel, including the PM
and DPM, participated in a telephone conference to discuss CTA's responses.
Both the PM and DPM deny discussing any substantive, technical issues, and
both deny using or revealing any information from the transcripts during the
conference. PM Decl. para. 3; DPM Decl. para. 5. The PM and DPM further deny
discussing the contents of the transcripts with anyone apart from each
other. PM Decl. para. 4; DPM Decl. para. 6. CTA management directed the employee
responsible for CTA's response to exclude any input received from the PM or
DPM. Director of Contracts Decl. para. 9.

At approximately 3:30 p.m. on August 8, CTA's CEO contacted the contracting
officer, informed her that he had "received some information about the other
bidders," and requested a meeting. Contracting Officer's Statement (COS) at
2. At his meeting with the contracting officer, the CEO gave her a sealed
envelope containing marked copies of the transcripts. Id.; CEO Decl. para. 9.
The contracting officer directed them to proceed with CTA's response to the
agency's August 7 questions. CEO Decl. para. 10. CTA submitted its response by
the August 9 deadline. CTA subsequently discharged the help desk operator
and placed the PM and DPM on administrative leave. CEO Decl. para. 11. Neither
individual is currently employed by CTA. CTA Cover Letter, Sept. 10, 2001.

The contracting officer outlined the above circumstances to legal counsel at
GSA's Inspector General's (IG) office, and to the head of the contracting
activity (HCA), who concurred in the IG's involvement. COS at 2; AR at 4-5.
After a preliminary investigation, on August 14, the contracting officer
determined that CTA's actions, through its employees, represented a
violation or possible violation of the procurement integrity provisions of
the Office of Federal Procurement Policy Act, 41 U.S.C. sect. 423 (Supp. IV.
1998) (those provisions are referred to in the record as the Procurement
Integrity Act, or the Act); that CTA had gained an "obvious unfair
competitive advantage on parts of [the] procurement"; and that the integrity
of the procurement process had been clearly breached. AR, Exh. D, at 1. The
contracting officer thus recommended to the HCA that CTA be disqualified
from the procurement in issue (and also from a related BPA procurement where
it had been proposed as a subcontractor). Id. The HCA concurred and, finding
that there was adequate competition for the requirement, directed the
contracting officer to disqualify CTA. Id. After disqualifying CTA, the
agency conducted further negotiations with SAIC and Unisys.

After receiving notice of its disqualification, CTA first requested
reconsideration from the agency, and then filed this protest. GSA
subsequently notified our Office that it was overriding the stay of contract
award. Both SAIC and Unisys were awarded BPAs and Unisys was awarded all
five of the initial task orders.

CTA asserts that GSA lacked a reasonable basis to disqualify it from the
competition because, according to CTA, the "uncontroverted record . . .
establish[es] that the conduct underlying GSA's disqualification decision
had 'no impact' on the contract award or source selection process."
Protester's Supplemental Comments at 3. CTA's assertion is based on its view
that it "promptly" returned the transcripts and took steps to eliminate any
possible use of them in its proposal revisions, and thus could not have
gained any improper advantage in this procurement.

The Procurement Integrity Act, as implemented by the Federal Acquisition
Regulation (FAR), prohibits anyone from "knowingly obtain[ing] contractor
bid or proposal information or source selection information before the
award" of a "contract to which the information relates." 41 U.S.C. sect. 423(b);
FAR sect. 3.104-4(b). Where there is a violation or possible violation of the
Act, the contracting officer must determine whether the violation or
possible violation has any impact on the pending award or source selection
and, if an impact is found, must refer the matter to the head of the
contracting activity (HCA) or designee. FAR sect. 3.104-10(a). If the HCA
concludes that the Act has been violated, the HCA may, among other
alternatives, direct the contracting officer to disqualify an offeror. FAR
sect. 3.104-10(d)(1)(ii).

Before turning to the specific findings relevant to the Act, we note that
our Office has recognized that, in meeting their responsibility to safeguard
the interests of the government in its contractual relationships,
contracting officers are granted wide latitude to exercise business
judgment, FAR sect. 1.602-2, and may impose a variety of restrictions, not
explicitly provided for in the regulations, where the needs of the agency or
the nature of the procurement dictates the use of those restrictions.
Compliance Corp., B-239252, Aug. 15, 1990, 90-2 CPD para. 126 at 5, aff'd,
B-239252.3, Nov. 28, 1990, 90-2 CPD para. 435. For example, a contracting
officer may protect the integrity of the procurement system by disqualifying
an offeror from the competition where the firm may have obtained an unfair
competitive advantage, even if no actual impropriety can be shown, so long
as the determination is based on facts and not mere innuendo or suspicion.
NKF Eng'g, Inc., B-220007, Dec. 9, 1985, 85-2 CPD para. 638 at 5; NKF Eng'g v.
United States, 805 F.2d 372, 376-77 (Fed. Cir. 1986); Compliance Corp.,
supra; Compliance Corp. v. United States, 22 Cl. Ct. 193, 199-204 (1990),
aff'd, 960 F.2d 157 (Fed. Cir. 1992). It is our view that, wherever an
offeror has improperly obtained proprietary proposal information during the
course of a procurement, the integrity of the procurement is at risk, and an
agency's decision to disqualify the firm is generally reasonable, absent
unusual circumstances. See Compliance Corp., supra (disqualification of
offeror reasonable where based on its improperly obtaining or attempting to
obtain competitor's proprietary information); NKF Eng'g, Inc., supra, at 6
(disqualification not unreasonable where there was "mere possibility" that
offeror did not obtain an advantage from source selection information). This
is certainly the case under the facts here, and we find the agency's action
reasonable even without reference to the Act.

With regard to the specific findings under the Act, there is no question
that the transcripts of SAIC's and Unisys's oral presentations of their
technical proposals constituted contractor proposal information, defined to
include proprietary information about operations or techniques. FAR
sect. 3.104-3. In this regard, SAIC's oral presentation encompassed details of
its team composition and structure; management approach; personnel and
transition plans; and its approach to each of the task orders. AR, Exh. H.
Similarly, Unisys's presentation provided the highlights of its proposal,
including its management and technical approach for BPA tasks and the
processes it used for all tasks. AR, Exh. I; Unisys Comments, Oct. 5, 2001,
at 2. The transcripts also constituted source selection information, defined
to include any information prepared for the purpose of evaluating a proposal
which has not previously been made publicly available. FAR sect. 3.104-3. The
oral presentations and their transcripts were an integral part of the
evaluation. To this end, they contained questions from the evaluation team
and each offeror's responses, and they were subsequently used by the agency
in its evaluation for award of the BPAs and task orders.

Regarding whether the actions constituted a violation of the Act, again, the
Act is violated where a person "knowingly obtain[s] contractor bid or
proposal information" prior to award. 41 U.S.C. sect. 423(b); FAR sect. 3.104-4(b).
While GSA's IG Office has not yet completed its investigation, in the HCA's
direction to disqualify CTA "in accordance with [her] authority under
FAR [sect.] 3.104-10," she implicitly determined that there was a violation of
the Act. AR, Tab D. On the facts of this case, we believe that she had a
reasonable basis for such a determination. The record showed that, prior to
the award of the BPAs and task orders, the help desk operator obtained the
transcripts from the e-mail system, produced copies, and then disseminated
them to the PM, who in turn provided them to the DPM. [2] In our view, there
is no doubt that this record establishes a violation of the Act; perhaps for
that reason, the parties focus their arguments on the impact of the
violation.

As for the question of impact, in our view, CTA too narrowly focuses on
actual use as the test to be applied. The record contains ample, undisputed
information to support the contracting officer's finding of an impact on the
procurement and the HCA's determination to disqualify CTA. CTA's employees,
including its PM and DPM, who was directly involved in the preparation of
CTA's proposal, obtained its competitors' proposal information, reviewed the
information and marked those aspects of interest to them. Discussions were
ongoing at the time the information was obtained, and the transcripts
provided both the competitors' proposal strategies and, based on the
agency's questions, GSA's concerns with those strategies. This clearly is
information that could affect an offeror's judgments about its own proposal,
and that potentially could enhance its standing in the evaluation. [3]
Further, at the time the information was obtained, CTA could have used it in
the BPA and task order negotiations which followed the submission of
proposal revisions, as well as in future task order competitions among all
BPA holders. In our view, even without proof of actual use of the
information, the actions of CTA's employees had a significant, negative
impact on the integrity of the procurement system, and we find reasonable
the judgment of the agency that the competition has been tainted by those
actions.

Moreover, since CTA is the company whose employees' actions are in question,
CTA's assertions regarding its use or nonuse of the information, without
some independent corroborating evidence, should not, in our view, be
accorded controlling weight in determining whether the information had some
effect on CTA's judgments regarding its proposal. Rather, under the
circumstances, CTA's obtaining and possessing the information, and the fact
that CTA alone was in control of whether it was used, calls into question
the integrity of the immediate and future source selections. [4]

Finally, we address CTA's concern that it was deprived of due process, since
the agency made its decision without affording the protester an opportunity
to present its side of the matter. We find nothing improper in the agency's
handling of this matter. First, in meeting with CTA officials, interviewing
those involved with the matter, and otherwise gathering information from CTA
in the conduct of its preliminary investigation, the agency provided CTA
with the opportunity to present its version of the facts. As a result, the
agency was well aware of the protester's position, and considered various
options prior to disqualifying CTA. AR at 3-4; Supplemental Report at 1-2.
We note that CTA does not dispute the facts on which the agency's
determination was made. Moreover, through its protest to our Office, CTA has
been provided with ample due process. See NKF Eng'g v. United States, supra,
at 377 (referring to lower court's assessment of our Office's review, "there
surely was no want of due process at the administrative level"). [5]

In sum, we see no basis to question the propriety of the agency's decision
that CTA should be excluded from further participation in the competition.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. For example, the SAIC transcript contains marked passages on more than 30
of its 148 pages.

2. The protester asserts that the record contains no evidence regarding how
the help desk operator came into possession of the transcripts and suggests
several innocent scenarios. Protester's Supplemental Comments at 9. While
there is no definitive evidence on the point, we note that the help desk
operator has not furnished a statement explaining his actions, and CTA has
not provided any other evidence to establish that the transcripts were
obtained innocently. At the same time, CTA's PM told agency investigators
that it was a CTA employee "who knew how porous the e-mail system was" (AR
at 2) who entered the e-mail system to access the transcripts (AR at 3), and
the uncontroverted facts show that the help desk operator downloaded, copied
and distributed the transcripts, and that other company employees obtained
and reviewed the transcripts.

3. In this regard, CTA's employees highlighted information concerning SAIC's
proposal to use, and the availability of, CTA's incumbent employees, an area
of apparent concern to the agency, and an area that CTA, as incumbent
contractor, could affect.

4. Likewise, CTA's actions in returning the transcripts did little to
alleviate the impact or to provide confidence in CTA's handling of the
matter. In this regard, CTA employees had unlimited control of the
transcripts for 4 days before they were secured. CTA then waited 2 days
before notifying GSA and returning some of the copies. Remaining copies were
not returned until August 20, nearly 2 weeks later, and after CTA had been
disqualified and had filed this protest.

5. CTA asserts that the NKF decision is distinguishable from the facts here,
because the court relied on the provision of an automatic stay to find our
administrative review adequate due process; here, GSA overrode the stay and
awarded the BPAs and task orders. We fail to see the relevance of this
distinction. The absence of a stay had no effect on CTA's having an
opportunity to fully present and argue its case.