TITLE: B-298380.3, Avue Technologies Corp., Carahsoft Technology Corp., November 15, 2006
BNUMBER: B-298380.3
DATE: November 15, 2006
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B-298380.3, Avue Technologies Corp., Carahsoft Technology Corp., November 15, 2006

   Decision

   Matter of: Avue Technologies  Corp., Carahsoft Technology Corp.

   File: B-298380.3

   Date: November 15, 2006

   Frederick W. Claybrook, Jr., Esq., David C. Hammond, Esq., and Brian T.
   McLaughlin, Esq., Crowell & Moring, for the protesters.

   Lori R. Larson, Esq., and Richard M. Sudder II, Esq., Internal Revenue
   Service, 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

   1. Clauses pertaining to data rights included in a solicitation issued for
   a solution to automate the agency's personnel recruitment and hiring
   processes do not violate applicable regulations where they only seek to
   protect the government's rights in government data pertaining to the
   government's personnel recruitment and hiring processes.

   2. Solicitation providing for the award of a fixed-price,
   indefinite-delivery, indefinite-quantity contract for a solution to
   automate the agency's personnel recruitment and hiring processes, which
   requests that offerors provide fixed prices and provides for the
   evaluation of those prices, reasonably considers cost to the government;
   the fact that the solicitation does not also provide for the evaluation of
   other collateral agency personnel cost savings that the protesters claim
   will be achieved through the use of its automated service is
   unobjectionable.

   DECISION

   Avue Technologies  Corp. and Carahsoft Technology Corp. protest the terms
   of request for proposals (RFP) No. DHS-06-IRS05, issued by the Internal
   Revenue Service on behalf of the Department of Homeland Security (DHS),
   for a solution to automate DHS's recruitment and hiring processes.[1]

   We deny the protest.

   By way of background, the solicitation explains that "DHS was formed
   through the consolidation of 22 agencies into 1 department to protect the
   nation against threats to the homeland," and that "[w]ith this merger came
   a diverse assortment of human resource (HR) systems, policies, and
   processes that operate independently." RFP at 19. The solicitation states
   that subsequent to the formation of DHS, a comprehensive "assessment of
   the HR systems in use across DHS" was performed, and that as part of the
   "overall effort to consolidate and modernize the HR systems, DHS has
   undertaken an initiative to consolidate toward an automated enterprise
   solution that can contribute to material improvements in the overall
   hiring process." Id.

   Consistent with this initiative, the agency issued this RFP that seeks a
   commercial-off-the-shelf, "web-based, automated e-Recruitment solution,
   including all software, software documentation, implementation support,
   and services to support the full life cycle of an enterprise-wide
   hiring/recruitment system." RFP at 4. The solicitation, issued pursuant to
   the commercial item procedures of Federal Acquisition Regulation (FAR)
   part 12, provides for the award of a fixed-price,
   indefinite-delivery/indefinite-quantity contract, for a base period of 1
   year with four 1-year option periods. Award under the RFP is to be made to
   the offeror submitting the proposal determined to represent the best value
   to the Government, based upon the evaluation factors of technical
   requirements, corporate characteristics, and price. RFP at 4, 73-74.

   The protesters argue that certain provisions set forth in the solicitation
   are "in open disregard of the FAR concerning data rights in a commercial
   item procurement."[2] Protest at 1.

   The agency explains that in preparing for the issuance of this
   solicitation, it convened a "working group to develop the functional and
   technical requirements," and it conducted "extensive market research into
   the products and services available." Contracting Officer's Statement at
   2. The agency states that "[o]ne of the lessons learned from past
   acquisitions was that the Government had not previously protected its
   property," and that "[a]s a result, at the termination of said contracts,
   the Government was precluded from using certain data . . . prospectively
   unless it received permission from the contractor or [the Government]
   could be potentially liable for fees for the reuse of data due to the data
   rights invoked by the contractor." Id. at 6.

   Accordingly, the agency repeats throughout its report in response to this
   protest that it views the protection of its existing data pertaining to
   the recruitment and hiring processes "that is unique to the federal
   workplace, [is] available in the federal domain, [was] originally
   developed by the Government, and [was] supplied by the Government" as
   critical. Contracting Officer's Statement at 9; see Contracting Officer's
   Statement at 7, 10; Agency Report (AR) at 8, 11. The agency explains that
   it anticipates that during performance of the contract awarded here it
   will "supply the successful contractor with existing data that the Agency
   has previously developed which would be entered into and processed by the
   contractor's information systems," and examples provided by the agency of
   such data include "existing position descriptions" and "applicant
   questionnaires." [3] Contracting Officer's Statement at 7. The agency
   states that it also anticipates that it "will create data, enter the data,
   and process it through the contractor's information system" during the
   performance of the contract, and that it needs to protect this data as
   well. Id. at 10. The agency concludes that it is only seeking to retain
   ownership or unlimited rights in current agency data and data that the
   agency intends to create during the course of this contract that is
   related to "hiring and recruiting," and that it views its retention of
   ownership or unlimited use of this data, which it views as "the
   Government's property," to be "necessary for the Agency to carry out its
   workforce management functions related to recruitment and hiring that
   support the Agency's critical mission to protect the Homeland, beyond the
   period of performance for this specific contract." Contracting Officer's
   Statement at 10; see AR at 11. The agency adds in this regard that the
   personnel recruitment and hiring data it seeks to protect "is data that
   DHS and other Federal Agencies use routinely to fulfill employment needs."
   AR at 14.

   In order to accomplish the foregoing objectives, the agency included,
   among other things, a "Licenses/Programs" clause in the RFP (at 53-54),
   which in relevant part, provides as follows:

   All data and information developed by (excluding commercial computer
   software or commercial software documentation), entered into and processed
   through the contractor's information system(s) under this contract shall
   be considered government property. Examples of data and information
   considered government property include but are not limited to the
   following: hiring evaluation criteria, position duty statements, position
   descriptions, job analyses, vacancy announcements, job assessments, test
   results, [knowledge, skills and abilities], cumulative employee data,
   reports, analytics, workforce information, assessment plans and shared
   data with third parties (i.e., [Office of Personnel Management], DHS
   systems, [Office of Management and Budget], EmpowHR, other DHS
   components). These examples of government property ARE NOT commercial
   computer software even if they are already part of any software product
   purchased by the Government.[4]

   The agency adds that through this clause it is not claiming or attempting
   to claim "ownership of the computer software or any documents relating to
   software," but rather, it is maintaining its ownership of existing agency
   recruitment and hiring data, as well as recruitment and hiring data the
   agency creates, enters, and processes through the contractor's system.
   Contracting Officer's Statement at 13; AR at 9-10.

   The protesters respond that while the data rights provisions set forth in
   the solicitation "work[] for `software-only' configurations in which
   agency personnel must supply all the meat on the bones of the software
   template provided," the provisions should not "apply to Avue's
   full-content configuration, which supplies the meat as well."[5]
   Protesters' Comments at 7. The protesters state here that "[i]n Avue's
   case, the evaluation criteria, position descriptions . . . , etc., are
   computer software because Avue provides them, not agency personnel, and
   DHS has no ownership rights in the Avue data to `maintain.'" Id. The
   protesters clarify that as a general matter they have no objection to the
   data rights provisions to the extent that they apply "only to
   Government-generated data in the form it was generated," but add that they
   believe that the provisions can also be read as "sweep[ing] in Avue's
   database that is legitimately composed of technical data and computer
   software and is financed solely by Avue." Id. The protesters explain in
   this regard that "Avue engineers the content [of its database] with
   algorithms and other technical data in such a way that the technical data
   is inextricably bound together with the content," and that the "database
   will not work without the technical data Avue generates and embeds in it."
   Id.

   The protesters argue that to the extent that the solicitation can be read
   as providing that the agency "will obtain full ownership rights in Avue's
   full-content database simply by using it," it is contrary to certain FAR
   provisions applicable to the acquisition of commercial items.
   Specifically, the protesters point to FAR sect. 12.211, Technical Data,
   which provides in relevant part that "the Government shall acquire only
   the technical data and the rights in the data customarily provided to the
   public with a commercial item or process," and FAR sect. 12.212, Computer
   Software, which provides that "[c]ommercial computer software or
   commercial computer software documentation shall be acquired under
   licenses customarily provided to the public to the extent such licenses
   are consistent with Federal law and otherwise satisfy the Government's
   needs."

   The protesters conclude here by pointing to the solicitation's
   "Licenses/Programs" data rights clause, and arguing that "[w]hile Avue's
   technical data was not generated `under this contract,' if DHS were to
   read [the Licenses/Programs clause] to give rights in Avue's technical
   data, then DHS would violate FAR [sect.] 12.211 by asserting rights in
   Avue's technical data that are not customarily provided to the public."
   Protesters' Comments at 7-8.

   In our view, the record reflects that the agency carefully crafted the
   solicitation so that it ensures that the government's rights in its own
   data related to its recruitment and hiring processes are protected. In
   this regard, the agency reasonably explains its need to protect its
   existing data regarding its recruitment and hiring of personnel as well as
   any data regarding its recruitment and hiring processes that is developed
   during the course of the contract. The agency has made it clear in the
   data rights provisions set forth in the RFP, as well as during the course
   of this protest, that it is not seeking to obtain and is not interested in
   obtaining a vendor's proprietary computer software or to "convert all
   information developed by the Protesters' system into Government property"
   as alleged by the protesters. Contracting Officer's Statement at 13; AR at
   11; RFP at 53-54, app. B.

   We have no reason to question the protesters' assertion that Avue has
   engineered its subscription service in such a way that any recruitment or
   hiring data provided by the agency or developed by the agency during the
   course of this contract will be "inextricably bound" together with Avue's
   technical data. However, the particularities of the manner in which Avue
   has engineered its system cannot equate or otherwise translate into an
   obligation on the agency's part to sacrifice its rights in its own data
   pertaining to the government's personnel recruitment and hiring processes.
   That is, as the protesters have presented their protest, they are
   essentially demanding that because of the particularities of Avue's
   service, the agency should amend the data rights provisions in the RFP
   such that they would permit the protesters, should either prevail in this
   competition, to retain certain of the agency's recruitment and hiring data
   generated during the performance of the contract, and deny the agency any
   rights to such data as it has become, as described by the protesters,
   "inextricably bound" together with Avue's own proprietary data. Such a
   result would not satisfy the agency's reasonably-based requirement to
   retain ownership of its own recruitment and hiring data.

   We also note that according to the agency's market research, the
   protesters' concerns here appear unique. Specifically, the agency
   represents that it has found "no other instance in which competing
   recruitment system providers, including vendors who provide
   `subscription-type' systems . . . similar to the Protesters, require the
   restrictions the Protesters appear to impose on the data." Contracting
   Officer's Statement at 8. Given this, it would appear that the protesters'
   assertion that the solicitation's data rights provisions are improper as
   they conflict with FAR sections 12.211 and 12.212 appear to stem from
   Avue's particular subscription service, rather than what customarily
   occurs in the commercial marketplace. In this regard, we also note that
   the agency appears to be correct in its assertion that the personnel
   recruitment and hiring processes data the agency currently has, intends to
   develop during the course of the performance of this contract, and seeks
   to protect, does not appear to fit within the definition of "technical
   data" as used in FAR sect. 12.211.[6]

   The protesters also argue that the RFP is deficient because the agency has
   failed to tailor its price evaluation in such a way that it considers, in
   addition to the costs to the agency of the competing proposals, "the
   savings to the agency that [the protesters'] service would provide."
   Protesters' Comments at 11. The protesters contend, based upon their own
   estimations and calculations, that because of the protesters' "more
   advanced automation," the agency's acquisition of their subscription
   service will save the agency in personnel and other costs "hundreds of
   millions of dollars each year" and close to $1.9 billion over the 5-year
   term of the contract. Id. at 12-13.

   While agencies are required to include cost or price as a significant
   factor in the evaluation of proposals, they have considerable discretion
   in determining the particular method to be used in evaluating cost or
   price. 41 U.S.C. sect. 253a(c)(1)(B) (2000); FAR 15.304(c)(1); Sun Co.,
   Inc., B-275193, Jan. 29, 1997, 97-1 CPD para. 56 at 5.

   As the protesters' argument here was also raised in their initial protest
   to the agency (B-298380), the agency explains that it considered the
   protesters' position while taking corrective action, and concluded that
   the price evaluation methodology set forth in the RFP--which basically
   provides for the consideration of the fixed-prices proposed by the
   offerors--meets the agency's needs and is "clear, succinct and sufficient
   for evaluating price under this procurement." Contracting Officer's
   Statement at 16. The agency also questions the merits of the protesters'
   assertion that the agency would realize significant collateral savings
   through the acquisition of the protesters' particular subscription
   service, pointing here to, among other things, a particular study "which
   indicated that agencies that implemented automated recruitment systems
   achieved significant improvements in timeliness--however, these agencies
   did not significantly reduce the level of [human resources] staff."
   Contracting Officer's Statement at 16 n.22; see AR at 26.

   In our view, the methodology of measuring cost to the government set forth
   in this RFP, which simply provides for the offerors to provide fixed
   prices for the services and products proposed, is well within the bounds
   of agency discretion; agencies often procure services on a fixed price
   basis. Although the particular method to be used by an agency to evaluate
   prices should, to the extent possible, accurately measure the costs to be
   incurred under competing proposals, the evaluation of the most
   advantageous offer in any procurement should be confined to matters that
   are quantifiable and not speculative. Sun Co., Inc., supra; Daggett
   Properties, B-227635, Oct. 22, 1987, 87-2 CPD para. 384 at 5. The agency
   disputes the protesters' assertion that the agency will achieve collateral
   savings in personnel if their subscription service is procured, and in any
   event, any such collateral savings would appear to be speculative, not
   reasonably quantifiable, and not due to a direct cost to the government as
   a result of this contract, but rather as the result of some potential
   reduction in agency personnel that the protesters claim may be achieved
   should the agency use the protesters' service.[7]

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

   ------------------------

   [1] According to the record, Avue is a provider of automated services such
   as those being solicited here, Carahsoft is a "reseller" of Avue's
   product, and both "are prospective offerors in this procurement and will
   file offers in response to the RFP." Protest (B-298380) at 2.

   [2] The solicitation was initially issued on April 4, 2006, and was
   subsequently amended four times, with the fourth amendment providing a due
   date for receipt of proposals of May 31, 2006. On that date, the
   protesters filed a protest with our Office arguing that the RFP was
   defective in that it required offerors to provide more data rights in
   their proposed solutions than permitted by regulation, and that the
   solicitation's technical evaluation factors were "ambiguous as to whether
   . . . an offeror will garner any additional credit for proposing more than
   the minimum requirements stated in the RFP." Protest (B-298380) at 1, 5.
   The protesters also argued that the solicitation was "deficient" because
   it did not "account for the costs and/or savings inherent in selecting one
   technical approach versus another." Id. at 4-5. Finally, the protesters
   contended that the RFP was "ambiguous with respect to a subscription
   delivery model, and it is overly restrictive if that model is not
   permissible." Id. at 1. Our Office was informed by the agency that it
   would take corrective action in response to the protest by issuing an
   amendment to the solicitation and allowing for the submission of revised
   proposals. Accordingly, on June 21, 2006, our Office dismissed the protest
   as academic. The agency subsequently issued four amendments to the
   solicitation, with amendment No. 8 requiring that revised proposals be
   submitted by August 23. On that date, this protest was filed with our
   Office.

   [3] Other agency examples of specific recruitment and hiring data
   categories include hiring evaluation criteria, position duty statements,
   job analyses, vacancy announcements, job assessments, test results,
   cumulative employee data, reports, analytics, workforce information, and
   assessment plans. AR at 8.

   [4] As indicated, the solicitation also contained other provisions
   pertaining to data rights, including the standard clauses at FAR sections
   52.227-14 and 52.227-19, and a "Intellectual property or proprietary
   information" section in the RFP's Appendix B. Our discussions centers on
   the relevant paragraphs of "Licenses/Programs" clause in the RFP, as set
   forth above, given that this clause was designed by the agency "to clearly
   define its rights in data for this procurement" and as such is the focus
   of the protest.

   [5] The protesters explain that with a subscription delivery model, such
   as Avue's, the necessary services are provided "by subscription," with no
   software being delivered to the agency, in contrast to what the protesters
   term a "`software only' configuration," where software is among the
   deliverables provided to the contracting agency. Protester's Comments at
   1, 3. The RFP permits offerors to propose either a "subscription type
   service" or what the protesters term a "software only configuration." See
   RFP at 72.

   [6] Section 12.211 of the FAR refers to part 27 of the FAR, wherein
   "technical data" is defined as "data other than computer software, which
   are of a scientific or technical nature." FAR sect. 27.401.

   [7] Although the protesters initially asserted that the solicitation's
   technical evaluation factors contain certain ambiguities, the agency's
   report in response to the protest addressed these concerns, and the
   protesters state in their comments on the agency's report that in their
   view the technical evaluation plan ambiguities are apparently resolved.
   Protesters' Comments at 15.