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DELTA DATA SYS. CORP. v. WEBSTER

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


June 8, 1984

DELTA DATA SYSTEMS CORPORATION, Plaintiff,
v.
WILLIAM H. WEBSTER, et al., Defendants

The opinion of the court was delivered by: GREENE

Plaintiff Delta Data brought this action to enjoin the Federal Bureau of Investigation's award of a contract for Tempest-qualified *fn1" computer terminals and related equipment to Systems Development Corporation, a subsidiary of Burroughs Corporation (Burroughs), pursuant to Solicitation No. 2591. On December 19, 1983, the Court denied plaintiff's motion for a preliminary injunction, *fn2" and it also denied the government's motion for summary judgment on the issue of the legality of the FBI's consideration of the financial soundness of Delta Data. See infra. The parties were given time in which to conduct further discovery on the question whether it is a practice in government procurement in general, and in FBI procurement in particular, to reexamine the financial soundness of offerors at the technical evaluation stage. After conducting such discovery, the parties filed cross-motions for summary judgment.

 During the interim, plaintiff also filed a formal bid protest with the General Accounting Office (GAO). *fn3" On April 17, 1984, the Comptroller General rendered a decision on behalf of the GAO, sustaining Delta Data's protest and recommending to the Court that the FBI be required to terminate the Burroughs contract and to award it instead to Delta Data as the offeror with the highest overall evaluation. The Comptroller General found that the FBI was not justified in conducting a comparative evaluation of the offerors' finances or in treating their financial condition as a technical evaluation factor. It further found that "both the solicitation language and the FBI's course of conduct throughout the procurement were consistent only with this factor's being treated as a matter of responsibility. Consequently, Delta Data had no notice of the FBI's concerns or an opportunity to explain or cure its condition during negotiations." Decision at 7.

 Following the issuance of that decision, both parties filed supplemental memoranda in support of their respective motions for summary judgment. In addition, Burroughs filed a motion to intervene as a party defendant, which the Court granted on May 14, 1984. A hearing on all the motions was held on May 30, 1984, and the following day, *fn4" for the reasons given below, the Court granted plaintiff's motion for summary judgment, and it ordered the FBI to terminate its existing contract with Burroughs and to award the contract instead to Delta Data.

 I

 The material facts are not in dispute. On September 13, 1982, the FBI issued solicitation 2591 for the supply of Tempest-qualified computer terminals, printers, and discs over an eight-year period. The Request for Proposals (RFP) provided that the award would be made to the offeror with the highest total evaluated score based upon four weighted factors: (1) cost (55%); (2) vendor considerations (20%); (3) live test demonstrations (15%); and (4) desirable features (10%). The RFP broke down each of these factors into subfactors, it set forth in detail the scoring methodology to be applied with respect to each factor, and it described how the FBI would determine each offeror's total score. Neither the financial condition of the offerors nor any other form of financial consideration was listed as an evaluation criterion.

 On May 2, 1983, the FBI received initial offers from four offerors. One of these was immediately deemed to be technically unresponsive, and the FBI conducted live test demonstrations of the equipment offered by the other three -- Delta Data, Burroughs, and IBM -- in July and August of 1983. On August 31, 1983 the FBI's Technical Evaluation Committee met to evaluate the offerors' vendor considerations *fn5" and to determine technical rankings. *fn6" The Committee assumed that each of the three offerors was financially sound. Indeed, although no specific responsibility determination had been made, *fn7" the FBI has since acknowledged to the GAO that Delta Data met the financial responsibility requirements to perform the contract. *fn8"

 As a result of the Committee's August 31, 1983 evaluation, Delta Data was ranked first with 20 out of 20 points for vendor considerations, Burroughs ranked second with 18.0723 points, and IBM third with 7.7547 points. These rankings, as well as the findings regarding the other criteria, were submitted to the FBI contracting officer on September 1, 1983.

 Because of minor technical concerns, the FBI requested a second round of best and final offers on September 13, 1983. *fn9" Thereafter, the FBI requested Dun & Bradstreet to prepare a report on Delta Data and Burroughs. In response, Dun & Bradstreet reported that Burroughs had a rating of 5AO, its second highest rating, but that it would not rate Delta Data because that company was in an "unbalanced condition as of 8-83." *fn10" The FBI requested and received limited additional financial information from Delta Data, but the agency did not seek an explanation from that company with respect to the matters causing it concern. *fn11" Instead, the Committee simply reconvened to reevaluate Delta Data's vendor considerations in light of the financial information; it lowered Delta Data's score; and it moved Burroughs into first place. n12 Taking into account cost considerations, Burroughs now received a score of 92.96, Delta Data a score of 90.71. *fn13" The contracting officer accordingly recommended that the FBI award the contract to Burroughs, and this recommendation was approved by the FBI's Contract Review Board. n12 The scores of the two offerors were as follows: First Evaluation Second Evaluation (August 31, 1983) (September 26, 1983) Delta Delta Burroughs Data Burroughs Data Vendor Considerations 18.0723 20.000 20.000 11.1273 Live Test Demonstrations 14.0798 14.8552 14.0789 14.8552 Desirable Features 10.0000 9.7211 10.000 9.7211 TOTAL 42.1512 44.5763 44.0789 35.7036

19840608

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