(D.C. Cir. 1970). Plaintiff has satisfied this test.
Injury in fact is plainly present. Plaintiff is fully qualified to provide the needed equipment.
It is precluded from bidding on the solicitation: the Army wishes only to buy equipment, and applicable tariff regulations require plaintiff to lease and maintain any equipment it provides.
If the Army is forced to accept lease-maintenance bids for the solicitation, plaintiff will be allowed to bid and its injury will be fully redressed. See Control Data, supra, at 289; Rubber Millers, Inc. v. United States, 596 F. Supp. 210, 212 (D.D.C. 1984). The right to bid for a government contract is an important one, see, e.g., Choctaw Manufacturing Co. v. United States, 761 F.2d 609, 616 (11th Cir. 1985); General Electric Co. v. Seamans, 340 F. Supp. 636 (D.D.C. 1972) -- certainly more substantial than the "identifiable trifle" sufficient for standing. Public Citizen v. Lockheed Aircraft Corp., 184 U.S. App. D.C. 133, 565 F.2d 708, 714 (D.C. Cir. 1977). Plaintiff's alleged injury also falls within the protection of the statutes and regulations it suggests are applicable. The requirements they impose are designed to promote participation of available bidders in procurement. The Army concedes plaintiff meets the third condition in that the statutes involved suggest no intent to preclude judicial review.
Plaintiff submits three arguments for invalidating the Army's solicitation. First, it argues that the solicitation violates the Armed Services Procurement Act of 1949, as revised ("ASPA"), 10 U.S.C.A. §§ 2301 et seq. (1983 & Supp. 1986), and subordinate requirements of the Federal Acquisition Regulation ("FAR"), 48 C.F.R. Chapter 1 (1985). Second, it argues that the solicitation violates established Department of Defense ("DoD") Policy requiring the Army to consider to the maximum extent possible all offerors of telecommunications resources. Finally, it argues that the plan violates requirements for telecommunications procurement imposed by the Federal Information Resources Management Regulation ("FIRMR"), 41 C.F.R. Part 201 (1985). This Court, in reviewing the Army's decision, "is limited to determining whether the agency acted in accord with applicable statutes and regulations and had a rational basis for its decisions." Delta Data Systems Corp. v. Webster, 240 U.S. App. D.C. 182, 744 F.2d 197, 204 (D.C. Cir. 1984); see also M. Steinthal & Co. v. Seamans, 147 U.S. App. D.C. 221, 455 F.2d 1289, 1301 (D.C. Cir. 1971).
The ASPA, substantially revised in 1984 by the Competition in Contracting Act, sets the general requirements for military procurement. In prescribing competition requirements for procurement contracts it mandates "full and open competition through the use of competitive procedures" and "use [of] the competitive procedure or combination of procedures that is best suited under the circumstances of the procurement." 10 U.S.C.A. § 2304(a)(1) (Supp. 1986). In setting procedures for carrying out solicitations, it requires each military agency to "specify the agency's needs and solicit bids or proposals in a manner designed to achieve full and open competition for the procurement" and "to develop specifications in such manner as is necessary to obtain full and open competition with due regard to the nature of the property or services to be acquired," id., § 2305(a)(1)(A).
The FAR was promulgated pursuant to the Office of Federal Procurement Policy Act of 1974 ("OFPPA"), 41 U.S.C.A. §§ 401 et seq. (Supp. 1986), to apply to all federal agencies. See 41 U.S.C.A. § 405a (Supp. 1986). It requires "full and open competition'" in procurement and directs that "all responsible sources [be] permitted to compete." 48 C.F.R. § 6.003 (1985). It also requires agencies to "consider whether to lease or purchase equipment based on a case-by-case evaluation of comparative costs and other factors," such as the rental and purchase prices involved, contemplated length of use, maintenance and services costs, and other factors. 48 C.F.R. § 7.401(a) (1985).
The Army has complied with the ASPA and the FAR, and its solicitation plan is eminently rational. Pursuant to its IMA program, the Army has decided that it is necessary to consolidate operation and maintenance of its electronics equipment. Plaintiff has not alleged that this is an unreasonable or irrational goal. The FAR does not restrict the Army's right to make this initial determination of its needs.
To implement its IMA program the Army must purchase the equipment, or at minimum, lease equipment from a company that will not insist on performing maintenance. The Army's solicitation plan is fully competitive, open to all bidders able to meet the Army's reasonable needs. Plaintiff is unable to meet them.
To accommodate plaintiff the Army would be forced to issue simultaneous solicitations for all its electronics equipment and operation and maintenance services, and could finalize the configuration of its electronics system only after evaluation of bids. The ASPA and FAR do not require an agency to alter its underlying procurement objectives in this manner; the Army is not obliged to sacrifice the objectives of its IMA program to accommodate plaintiff.
Even if the FAR applied to the Army's initial decision to implement its IMA program, the solicitation would meet the FAR requirements. In determining to proceed with its IMA program, the Army took account of a 1982 study, updated in 1985, indicating that purchase of telecommunications facilities is generally less costly than lease.
Plaintiff argues that the Army's reference to this study indicates that it failed to perform a case-by-case analysis as required by the FAR, and instead simply chose to purchase rather than consider a lease. It also suggests that reliance on this cost information is irrational, given recent changes in market conditions prompted by the breakup of AT&T affecting plaintiff's competitive ability.
These attacks are unfounded. The Army has made a case-by-case analysis of the Fort Drum project of which this solicitation is a part. It has considered its requirements in light of relevant cost data and "other factors" -- particularly its need to implement the IMA program. It has not prejudgmentally ruled out appropriate lease proposals. Indeed, it appears quite willing to consider them.
After careful analysis it has simply concluded that any cost savings possible from opening its Fort Drum solicitation to plaintiff would be outweighed by the system-wide benefits of its IMA program.
Although the Army has conducted no formal quantified study proving this analysis, its conclusion cannot be attacked as irrational. Both the Army's previous general cost study and the FAR itself, which advises preference of acquisition over long-term lease, see 48 C.F.R. § 7.402(b)(3) (1985), suggest that the cost savings of leasing, if any, would likely be minimal. Plaintiff has not demonstrated otherwise, nor has it explained why a formal study of cost savings is mandated by the ASPA or FAR, especially at this initial stage in the IMA program -- during which the Fort Drum procurement will itself be a model for future projects. The Army cannot be required to place its IMA program on indefinite hold merely on the hope that leasing economies would be so massive as to outweigh the IMA economies contemplated for the project as a whole.
In its second attack, plaintiff argues that the Fort Drum solicitation plan violates DoD policy and DoD findings recommending consideration of all procurement options, citing the DoD Inspector General's "Report on the Audit of Base Communications," dated May 11, 1984 (reproduced as Appendix B to Plaintiff's Reply Memorandum). That report reviewed a DoD policy established in 1978 requiring that telecommunications systems "be competed to the maximum extent possible" and that the military consider any "source that can satisfy requirements for base telephone systems." The report addressed concerns that the Army, by failing to consider non-purchase alternatives, was violating this policy and thus failing to "achieve the full economic benefits of competition and deregulation." Id. at 22. It recommended that the Army "solicit proposals that include all acquisition options . . . in future acquisitions of telephone systems." Id. at 24. As the previous discussion indicates, the Army is receptive to bids from any source that can provide the needed equipment without impairing its IMA program, and it therefore has complied with this policy.
Finally, plaintiff urges that the Army's solicitation plan violates the strictures of the FIRMR. The FIRMR requires that "where applicable, requirements shall be set forth in a manner that will permit all responsible tariff and nontariff suppliers to submit offers." 41 C.F.R. § 201-38.012(a) (1985). It also mandates that
the method of contracting for telecommunications requirements shall be determined after consideration of the relative merits of the alternative methods available; i.e., purchase, lease, or lease-with-option-to- -purchase. A comparative cost analysis of the alternative methods shall be performed to determine which method provides the Government with the lowest overall cost over the total systems life . . . .