THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS
   BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON NOVEMBER 9, 1992
                                                  
 
           GRANTED IN PART; DISMISSED WITH PREJUDICE IN PART:
                            October 30, 1992
                                                  
 
 
                             GSBCA 11998-P
 
 
                          AMDAHL CORPORATION,
 
                                           Protester,
 
                                   v.
 
                DEPARTMENT OF HEALTH AND HUMAN SERVICES,
 
                                           Respondent.
 
        David S.  Cohen, Lisa Hovelson,  and Donn Milton of  Cohen &
   White, Washington, DC, counsel for Protester.
 
        Ronald Guttman  and Dalton  F. Phillips,  Office of  General
   Counsel, Department of Health and Human Services, Washington, DC,
   counsel for Respondent.
 
   Before Board Judges DANIELS, WILLIAMS, and VERGILIO.
 
   DANIELS, Board Judge.
 
        Amdahl Corporation (Amdahl) protests that two specifications
   contained in  a solicitation  for proposals  to supply  mainframe
   computers to the Department of Health  and Human Services' Social
   Security Administration  (SSA) are  unnecessarily restrictive  of
   competition.   The  restrictiveness,  Amdahl maintains,  violates
   requirements of statute and regulation.
 
        The  two specifications mandate  that each of  the computers
   offered in  response to the  solicitation be "field proven"  by a
   certain  date and  have a capacity  of at least  202 "SSA MIPS."1
                       
   ____________________
 
        1    As  filed  on  September  8,  1992,  the  protest  also
   attacked  as  unnecessarily restrictive  of  competition  a third
   provision of  the solicitation, dealing with performance downtime
   credits.  On October 7 --  the day before the Board's hearing  on
   the merits of the protest -- the parties filed a joint motion for
   a partial dismissal  of the case, stating that  they had resolved
                                                      (continued...)
   We  find  that SSA  has  a  legitimate  need for  "field  proven"
   mainframe   computers;    further,   although    the   challenged
   specification will not assist the agency in securing  such goods,
   a  more restrictive practice that the agency intends to implement
   will do so.   This practice  comports only with  SSA's needs  for
   computers in the near future,  however; stipulating that the only
   acceptable mainframe  today  is one  that is  reliable today  has
   nothing to  do with meeting the  agency's needs over the  life of
   the four-year contract  that would result from  this procurement.
   In  light  of the  rapid  pace  of  technological change  in  the
   computer  industry, any mainframe  that is currently  reliable is
   highly likely to become outdated within four years.  The 202 MIPS
   specification has no  relationship to the agency's  stated needs,
   unless  the unsupported statements  of agency officials  -- which
   are   inconsistent  with  the  agency's  position  --  are  given
   credence.     It  serves   no  purpose  other   than  restricting
   competition  in such  a way  that Amdahl  is made  ineligible for
   award. 
 
        We grant the protest to the extent that it remains before us
   for decision.
 
                            Findings of Fact
 
        1.   SSA  is responsible  for  programs  which provide  cash
   benefits to a vast number of retired, disabled, hospitalized, and
   otherwise needy Americans.   According to SSA's  assistant deputy
   commissioner  for  operations,  the  agency's  National  Computer
   Center is "sort of like the heart and the lifeline for  SSA . . .
   because it  maintains on-line the  information we need to  do our
   work every day, and it is connected through telecommunications in
   our  terminals to every  operating component that  processes work
   for the public."  Transcript at 130.  
 
        2.   Through a  solicitation issued  on July  14, 1992,  SSA
   requested  proposals by  August  28  (a  date later  extended  to
   September 8) to supply the  agency with mainframe computers to be
   used in this center.  Protest File, Exhibit 5 at A-2,  Exhibit 9.
   The  solicitation  envisions  award  of  an  indefinite  quantity
   contract for a minimum of  two computers with a combined capacity
   of 404 SSA MIPS, and a maximum of nine computers with  a combined
   capacity of 1813 SSA MIPS.  Id.,  Exhibit 5 at C-20 (  C.12), I-7
   to  I-8  (   I.3  to  I.5).2   Proposals  meeting  the  mandatory
                       
   ____________________
 
        1(...continued)
   this issue.  If the protest is granted  in such a way that Amdahl
   is  permitted to  compete  under  a  revised  solicitation,  they
   agreed, SSA will amend the solicitation in a certain manner. 
 
        2    "MIPS"  is an acronym for "millions of instructions per
   second."   SSA counts  MIPS in accordance  with a  benchmark test
   that must be passed by each  mainframe offered in response to the
   solicitation  at   issue.    Protest  File,  Exhibit   5  at  C-5
                                                      (continued...)
   technical requirements of the solicitation are to be eligible for
   award; among them, a contract is to be given to "that responsible
   offeror whose  proposal is determined  to be  the lowest  overall
   cost to the  Government, price and other factors  considered, for
   the system(s) life."  Id. at M-2 (  M.2(a)).
 
 
        3.   SSA  will accept in  response to the  solicitation only
   mainframe  computers  that   are  "IBM  [International   Business
   Machines Corporation]  code compatible"  -- a  phrase the  agency
   defines to mean "capable of supporting all the functions provided
   by    the   latest    release    of   IBM's    Multiple   Virtual
   Storage/Enterprise Systems Architecture  (MVS/ESA) System Product
   Job  Entry  Subsystem 3  (SP/JES3)  Version  4."   Protest  File,
   Exhibit 5 at  C-2 to C-3 (  C.2(a)(1)).  Three  companies -- IBM,
   Amdahl, and Hitachi  Data Systems -- manufacture  such computers.
   Transcript at  261.  SSA  currently has in its  national computer
   center  mainframes made  by each  of these companies.   Id.   The
   agency acknowledges that it  would derive no benefit from  having
   only one manufacturer's computers located there.  Id. at 261-62.
 
   "Field proven" requirement
 
        4.   For  the  most  part,  the  agency's  more  than  fifty
   thousand employees rely  on the computer center  to perform their
   jobs on behalf of about forty-five million  beneficiaries; if the
   computers  were to  fail, work  would  come to  a standstill  and
   benefit  checks could  be delayed.    Transcript at  130-35.   To
   minimize  the risk  of  this occurring,  SSA  has an  established
   policy of  buying only  field-proven mainframes  for the  center.
   Id.  at  245,  251;  Protester's  Exhibit 153  at  118.    Agency
   officials   consider  that  a  benchmark  test  or  a  live  test
   demonstration  cannot  manifest  reliability  in  processing  the
   immense  number   of  transactions   required  by   SSA  over   a
   considerable period  of time.   Protest File,  Exhibits 5  at M-9
   (  M.4(a)),  6; Transcript  at 319-21.   A better  indicator, the
   officials believe,  is references  from customers  who have  been
   using  a  computer  over  a  period  of  at  least  thirty  days.
   Transcript at 212.
 
 
                       
   ____________________
 
        2(...continued)
   (  C.2(a)(9)(c)),  C-18 (  C.10).  Such MIPS have been referenced
   by the parties as "SSA MIPS."
 
        3    Protester's  Exhibit  15  is   the  transcript  of  the
   deposition of the contracting officer.  Counsel learned  early in
   the discovery process that the contracting officer had planned to
   be on leave  at the time of the  hearing in this protest.   So as
   not  to  disrupt  his  plans,  they  agreed  in  advance  of  his
   deposition that the transcript of that session would be placed in
   the  record  in lieu  of  live  testimony  at hearing.    Board's
   Memorandum of Conference of Sept. 28, 1992.
 
        5.   Consequently, to validate  reliability, the contracting
   officer plans to secure from  each offeror a number of references
   from companies  at whose sites  the mainframe  being proposed  is
   currently  in  operation.    Protester's  Exhibit  15  at  26-28.
   According to agency  officials, he is  supposed to ask  questions
   which  elicit a  good  deal of  information  about the  computer,
   including  the  number of  customer sites,  installation problems
   incurred, length of  time the machine  has run without  incident,
   hardware  configuration, type of  operating software  being used,
   type   of  workload,   failures   experienced,  and   maintenance
   contractor's response to any  problems.  Transcript at  212, 217-
   20, 267-70; Protester's Exhibit 9.  The solicitation  contains no
   provision which mentions these plans.
 
        6.   The solicitation  does  contain  a  provision  entitled
   "Field-Proven Equipment," which states in part:
 
             Equipment  shall  be  field-proven equipment.
             To be field-proven, equipment shall have been
             made available for  general release and  been
             installed and accepted for production use  at
             one  customer site  in the  United  States no
             more than  45 days  after the  issue date  of
             this RFP [request for proposals].
 
   Protest File, Exhibit 5 at  C-19 (  C.11).  Forty-five days after
   the issue date, July 14, was August 28.
 
        7.   The  solicitation permits the firm which is awarded the
   resultant   contract  to  substitute,  at  any  time  during  the
   contract's  life,  newer  technology  which  meets  all  contract
   requirements.   This  newer equipment  must have  a cost  that is
   "equal  to  or  lower  than [that  of]  the  originally  proposed
   equipment on a  per MIPS basis."   SSA may also require  that the
   contractor  submit  technology substitution  proposals.   Protest
   File,  Exhibit 5  at C-17  to  C-18 (  C.9).   The  "Field-Proven
   Equipment"  clause   provides,  "For  any   substitute  equipment
   proposed . . . ,  equipment shall  have been  made available  for
   general  release and been  installed and accepted  for production
   use at one customer site at the time of the order."  Id. at  C-19
   (  C.11).
 
        8.   SSA  believes that  a  solicitation provision  entitled
   "Offeror's Responsibility" also has something to do with ensuring
   that the computers  the agency acquires through  the solicitation
   will be reliable.  This  provision says that when the contracting
   officer determines responsibility --
 
             the  specific requirements  in this  proposed
             contract for delivery and maintenance support
             will  be   considered.    An   offeror  whose
             proposal   has   been    determined   to   be
             technically   acceptable   with   the  lowest
             evaluated systems-life  cost, but  . . . whom
 
             the contracting  officer has  determined does
             not have  the  ability to  meet the  required
             deliveries  or furnish  the required  support
             throughout the  estimated 120-months  systems
             life,   may   be  eliminated   from   further
             consideration.
 
   Protest  File,  Exhibit  5  at  M-10  (  M.5).    SSA's associate
   commissioner for systems operations believes that  this provision
   authorizes the contracting officer  to check customer references,
   as  described in Finding  5.  Transcript  at 233-35.   His deputy
   thinks  that the information learned will  be used, as authorized
   by the clause,  to determine  "whether a higher  cost bid with  a
   much more representative  or cleaner reference check would be the
   best value to SSA."  Id. at 275.
 
        9.   The  contracting officer  recognizes  that  in the  IBM
   code-compatible  mainframe  industry,   manufacturers  frequently
   announce that they  will be offering larger  machines, and "there
   is  a constant  leap-frogging  going  on  [among]  the  competing
   vendors."   Protester's  Exhibit 15  at  82.   An Amdahl  account
   executive provided this confirmation of his understanding:  Three
   years ago, his  firm's state-of-the-art mainframe had  a capacity
   rating   of   ninety-six   SSA  MIPS;   that   computer   is  now
   __________________________, and  its price is  about one-third to
   one-half what it  was then.  Marketing efforts  are being focused
   on newer, more robust models  (the ones mentioned in Finding 16).
   The  other  manufacturers  have  experienced similar  changes  in
   product  line, pricing, and marketing over the three-year period.
   Transcript at 121-23.
 
   202 SSA MIPS requirement
 
        10.  SSA's  official and best estimate of its capacity needs
   is  stated  in  terms  of SSA  MIPS.    It  is  contained in  the
   solicitation  in  a  table   which  states  a  figure  for   each
   anticipated contract month, including the following: 
 
        Contract       Capacity       Contract       Capacity
        month          requirement    month          requirement
 
         0  Nov 1992       828         6  May 1993      1058
         1  Dec 1992       895         7  Jun 1993      1043
         2  Jan 1993       965         8  Jul 1993      1093
         3  Feb 1993      1011         9  Aug 1993      1084
         4  Mar 1993      1012        10  Sep 1993      1180
         5  Apr 1993      1009        46  Sep 1996      18114
 
 
                       
   ____________________
 
        4    The  capacity  requirement  for   month  46  is  stated
   elsewhere  in the  solicitation  as  1813  MIPS.   Protest  File,
   Exhibit 5 at C-2 (  C.1(b)), C-20 (  C.12); see Finding 2.
                                               ___
   Protest File, Exhibit  5 at J-15 (Attachment  J.6); Transcript at
   333.   These numbers  are calculated on  the assumption  that the
   mainframes as a group will be operating at eighty-five percent of
   capacity.  Transcript at 262.
 
 
        11.  The computers currently  in the center,  performing the
   kind of work  which will be done  at least in part  by mainframes
   being acquired through this solicitation have a combined capacity
   rating  of  888  SSA MIPS.    Protest  File,  Exhibit  5 at  J-15
   (Attachment J.6).   In addition  to the capacity  increases which
   are to be  secured through this solicitation, five  SSA MIPS will
   be added to this capacity in December 1992 (contract month 1) and
   another  five  will  be added  in  January  1993.   Id.    Of the
   mainframes now in the center, three are rated at seventy-four SSA
   MIPS each, one at ninety-six SSA  MIPS, and five at 120 SSA  MIPS
   each.   Id. at C-5  (  C.2(a)(9)(d)).  Thus, the  contractor need
   add only  two SSA MIPS  in December and an  additional sixty-five
   SSA MIPS by January.
 
        12.  Apart  from  the computer  center's  space constraints,
   SSA's capacity requirements may be met by any number of computers
   greater than  one; a  second mainframe is  necessary so  that one
   will  still  be functioning  if  the  other  is  being  repaired.
   Transcript at 263.   The center now contains  nine computers that
   perform work which is relevant to this solicitation.  Id. at 201-
   02.   The  center is  configured so  that this  number cannot  be
   exceeded.   Protest File, Exhibits 5 at  C-2 (  C.1(a)), 16 at 3;
   Transcript at 261.  To keep the total at nine or less, whenever a
   new  computer  is added  to  the  center,  an  old  one  must  be
   removed.5   Protest File, Exhibit 5  at J-14 (Attachment J.6(g)).
 
 
        13.  The solicitation requires that  each offeror propose to
   supply the agency with one computer in December 1992 (replacing a
   machine rated at  seventy-four SSA MIPS)  and another in  January
   1993  (replacing a second  seventy-four MIPS computer).   Protest
   File, Exhibit 5 at J-15 (Attachment J.6).
 
        14.  Although the solicitation does not say so directly, the
   parties  agree  that  it  is  crafted in  such  a  way  that each
   mainframe offered must have a capacity rating of at least 202 SSA
   MIPS.   Transcript  at 148-50;  Protest File,  Exhibit 6  at 1-2;
   Protester's Exhibit  15 at 113-15; Respondent's Posthearing Brief
   at 13 n. 6.  According to  the contracting officer, "The 202 MIPS
   minimum  requirement  is  exactly  derived  from  the  1813  MIPS
 
 
                       
   ____________________
 
        5    Further  limiting the  ability of  the  contractor with
   regard to  replacement of  existing computers,  no more  than one
   installation may  occur in any  one month  and no more  than five
   installations may be made in  any one-year period.  Protest File,
   Exhibit 5 at C-6 (  C.2(a)(9)(f), (g)).
   requirement divided  by the  maximum 9  CPUs [central  processing
   units, or mainframes]."   Protest File, Exhibit 16 at 1; see also
   Transcript at 207-08.  
 
 
        15.  By  letter to Amdahl dated September 1, the contracting
   officer expressed concern  that permitting an offeror  to provide
   computers with smaller capacity "would  force SSA to live  closer
   to the 85%  aggregate utilization 'trigger' level and  to have an
   increased  number of installations (or upgrades)."  Protest File,
   Exhibit 16 at 4-5.
 
        16.  At  hearing, SSA's  deputy  associate commissioner  for
   systems  operations advanced two additional reasons for mandating
   that each computer  proposed in response to the solicitation have
   a capacity of  at least 202 SSA  MIPS.  First, he  suggested that
   the  agency's  capacity  requirements  are  understated   in  the
   solicitation, because  (a) operation  of the  computer center  at
   less  than eighty-five percent of capacity is preferable (seventy
   to  seventy-six percent  would be  much better);  (b) during  the
   first  nine  months  of  the  contract,  SSA  actually  needs  an
   additional  70  to  92  SSA  MIPS  in  contingency  reserve;  (c)
   additional  demands  may  be  placed  on  the  center  by  policy
   decisions of the  SSA commissioner; and (d) the agency's capacity
   projections in the past have been too low.  Transcript at 284-85,
   293-95.    Second,  he  said  that  people  in  SSA's  Office  of
   Acquisitions  and  Grants  had informed  him  that  prescribing a
   guaranteed  minimum purchase of two 202-MIPS computers "is needed
   to provide . . . extremely aggressive pricing."  Id. at 291.
 
   Amdahl's situation
 
        17.  Amdahl expected to be able to offer SSA a  model in the
   firm's  5995M series.   Protest  File,  Exhibit 3.   This  series
   includes four models that differ in the number of processors they
   contain: the 3550M  (three processors), 4550M (four  processors),
   6650M  (six),  and  8650M (eight).    The  smaller  computers are
   considered "single-sided" systems, and the larger "double-sided";
   the 6650M is essentially two 3550Ms, and the 8650M is essentially
   two  4550Ms.   Transcript at  24-30.   An  Amdahl vice  president
   testified that  the technology of  the models is so  similar that
   modifying  a single-sided  computer into a  double-sided computer
   requires very few  changes.  Id. at 30-31.  The 4550M, 6650M, and
   8650M are rated at __________________SSA MIPS, respectively.  Id.
   at 97, 100-01; Protester's Exhibits 4, 5.
 
        18.  The series was publicly announced in September 1990, at
   which time Amdahl stated that the  single-sided machines would be
   available  in the  fourth  quarter of  1991 and  the double-sided
   machines  in the  second  quarter  of 1992.    Transcript at  32.
   _         _         _         _         _         _         _
                   ----------- FOOTNOTE BEGINS ---------
   the  3550Ms and 4550Ms  did not  actually become  available until
   December 1991.   Id.  Approximately  ___________ of these  models
   have  been shipped to  customers.  Id.  at 38.  SSA  has no doubt
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   that  the models are field proven.   Id. at 210.  The first 8650M
   put  into production use is at an  Amdahl in-house site, where it
   was  installed in  September 1992;  the second  was shipped  to a
   customer in the United Kingdom in late September and installed in
   October.    Id. at  112-13,  156.   Amdahl  did  not present  any
   evidence to  the effect that  any 6650M has  ever been used  in a
   production capacity or shipped to a customer.
 
 
        19.  Amdahl  says that it  successfully ran  SSA's benchmark
   test on the ________________________________.   Transcript at 73,
   146-55.   SSA's  associate  commissioner for  systems  operations
   acknowledged, with  specific reference  to the  _____, that  "the
   potential would be  small for  [Amdahl] or any  vendor not to  be
   field proven for other equipment  between now and ten months from
   today, no question."  Transcript at 211.
 
        20.  Amdahl  can  meet SSA's  capacity  requirements through
                   ----------- FOOTNOTE BEGINS ---------
                   ----------- FOOTNOTE BEGINS ---------
   __________________________________________.  Protester's Exhibits
   5, 15 at 215; Transcript at 209.
 
                               Discussion
 
        The Competition in Contracting Act of 1984  requires that in
   conducting a procurement  for property or services,  with limited
   exceptions, an  executive agency (such as SSA) "shall obtain full
   and  open competition through the use of competitive procedures."
   41 U.S.C.    253(a)(1)(A) (1988).   To do  this, an  agency shall
   "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. at    253a(a)(1)(C).
   Specifications may "include restrictive provisions or  conditions
   only  to  the  extent  necessary  to satisfy  the  needs  of  the
   executive   agency   or  as   authorized   by  law."      Id.  at
     253a(a)(2)(B).   "Full and  open competition"  means that  "all
   responsible  sources are  permitted  to  submit  sealed  bids  or
   competitive  proposals on the  procurement."  41  U.S.C.   403(6)
   (1988).   The  statute's  mandates are  reflected in  the Federal
   Acquisition  Regulation, in provisions  such as 48  CFR 6.101(a),
   10.002(a)(1), (3), and 10.004(a) (1991).
 
        In evaluating the merit of a protest which alleges that full
   and   open  competition  has  been  compromised  by  an  agency's
   insertion  into a  solicitation of  an unnecessarily  restrictive
   specification,  we take  as a  given  the agency's  requirements.
   Data General Corp. v. United States, 915 F.2d 1544, 1551-52 (Fed.
   Cir.  1990),  cert.  denied,  111  S.Ct.  2011  (1991); SMS  Data
   Products  Group, Inc.,  GSBCA  10864-P,  91-1  BCA    23,464,  at
   117,718,  1990 BPD   348, at 5-6, aff'd, 940 F.2d 1514 (Fed. Cir.
   1991); 40  U.S.C.   759(e) (1988).   This does not  mean, though,
   that  every specification  is necessarily  associated with  those
   requirements.      If   an  agency   needs   an   automobile  for
   transportation purposes, for example, and specifies that each car
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   must be blue, the specification does not help to secure a product
   that will meet  the agency's needs.   We have  a limited role  in
   these protests: to determine whether the challenged specification
   bears a rational relationship to fulfillment of the requirements.
   The  protester has the burden  of establishing by a preponderance
   of   the  evidence   that  the   narrowing   of  competition   is
   impermissible in  that  it does  not  have such  a  relationship.
   Memorex Corp.,  GSBCA 7927-P, 85-3 BCA   18,289,  at 91,788, 1985
   BPD   37 at  23, reconsideration denied, 85-3 BCA    18,327, 1985
   BPD   49.
 
   "Field-proven" requirement
 
 
        We do not quarrel with  SSA's determination that in light of
   the  criticality  of  the agency's  mission,  the  only mainframe
   computers  that are acceptable  for installation in  the national
   computer center are those that have been proven, in the course of
   ordinary  use, to be reliable.  See Findings  1, 4.  We have said
   this before, in litigation between  the same two parties that are
   involved in the  instant case.  Amdahl Corp.,  GSBCA 8832-P, 87-2
   BCA   19,700, at 99,743, 1987 BPD   43, at 10.
 
        Furthermore,  we consider that  an agency has  discretion to
   determine how  reliability will  be measured,  provided that  the
   method selected is reasonable.  SSA's insistence  on a computer's
   being used by a customer, rather than simply the manufacturer, is
   permissible under this  standard.  See Finding 5.   By contacting
   customers, the  agency can  gain an independent  view of  how the
   machine is holding up under actual workload conditions, when free
   from  the  manufacturer's  control  and  opportunity  to  provide
   constant remedies to problems that might arise.  SSA's setting of
   a date  by which the  computer must  have been  transferred to  a
   customer is likewise permissible.  See Finding 6.  Amdahl has not
   demonstrated  to our satisfaction  that the date  of August 28 is
   unreasonably early,  given the desire to learn  how the computers
   have been performing for  customers over a thirty-day period  and
   the  need to have  new computers installed  by December.   As the
   agency maintains, no  matter what date  is selected, some  vendor
   may note that  within a period of time thereafter, it will have a
   newer, better product on the market.  The record makes clear that
   on  August 28, Amdahl's  3550M and  4550M models  met  the field-
   proven requirement,  but its 6650M  and 8650M did not.   Findings
   17, 18.   Given that  Amdahl made the former  models available in
   December 1991, but has  not until just now been able  to ship the
   8650M  (and  has still  not  shipped  a  6650M), we  cannot  give
   credence   to  Amdahl's  contention  that  the  four  models  are
   essentially identical as far as being  field proven is concerned.
   See Finding 18.
 
        There  are, however,  three  problems  associated  with  the
   "field-proven" specification in  the solicitation.  The  first is
   that the clause itself requires  that the offered computer meet a
   standard that is nowhere connected  to reliability.  It says only
   that  equipment  must  have  been  "installed  and  accepted  for
   production use"  at a  customer site  by August 28.   Finding  6.
   That the machine work well,  beyond a benchmark test, see Finding
   2  n.2, is  not an  express  mandatory requirement.   The  second
   problem, which is related to  the first, is that SSA's reasonable
   plans for assessing  reliability are not revealed  to prospective
   offerors.   The solicitation's responsibility clause says nothing
   more than that a firm's ability to deliver and maintain equipment
   will  be  considered  in assessing  responsibility.    Finding 8.
   Contacting  customer references as part of a technical evaluation
   is an  entirely different activity,  about which vendors  are not
   warned.6
 
 
        Nevertheless, these defects  are not fatal to  SSA's defense
   of the protest.   What the  agency plans to  do in assessing  the
   reliability   of  computers  proposed  to  be  supplied  is  more
   restrictive than what is stated in the clause.  If  Amdahl cannot
   meet  the less  restrictive  standard  of  the clause,  and  that
   specification  is  reasonably  related  to  the  agency's  needs,
   protester  is not  an interested  party to  complain of  the more
   restrictive intended actions.  See 40 U.S.C.   759(f)(9)(B).
 
        The more serious  problem with the "field-proven"  clause is
   that it  restricts competition  to offerors  who at present  have
   field-proven equipment which  is capable of meeting  the agency's
   requirements  over the  next  forty-six  months.    The  computer
   industry  as a  whole is marked  by rapid  technological advances
   coupled  with  dramatic  price decreases.    The  segment  of the
   industry  that  produces  IBM  code-compatible mainframes  is  no
   exception to this principle: computers that were state-of-the art
   three years ago have small capacity, relative to  current models,
   and their prices have dropped by a factor of two or three in just
   this short  space of  time.   Finding 9.   For  example, by  next
   summer, SSA and Amdahl both expect that Amdahl will be selling  a
   reliable mainframe  that has a capacity of more than one and one-
   half times  the minimum  capacity required of  a computer  by the
   agency today.  Findings 14, 17.   SSA is fully cognizant of  this
   swift  pace  of  change;  it   permits,  and  may  even  require,
   substitution  of  newer  technology throughout  the  life  of the
   contract.  Findings 7,  9.  Thus, what offerors  propose today is
   highly unlikely to be what  they deliver over the forty-six month
   contract life, and  the prices they  charge for those  mainframes
 
                       
   ____________________
 
        6    Nor  may  this   clause  be  read  to   contravene  the
   solicitation's command  that award  be made  to the  lowest cost,
   technically  acceptable offer  from  a  responsible  firm.    See
                                                                 ___
   Finding  2.    If  SSA  desires to  make  award  after  balancing
   proposals'  technical merit  against their  cost,  as one  agency
   official plans to do, it must amend the solicitation to put firms
   on notice that this will be done.   See Finding 8.  Vendors might
                                       ___
   wish to propose different models,  or to price them  differently,
   if  the  evaluation criteria  were  different from  the  ones now
   stated in the solicitation.
   may be considerably  different from the prices  included in their
   proposals.
 
 
        In  effect, what SSA would award under this solicitation, as
   it currently stands, is the  privilege of negotiating the sale of
   computers to the agency, on a sole-source basis, over a period of
   nearly four  years.   Whenever  those sales  are negotiated,  the
   mainframes involved "shall  have been made available  for general
   release and been installed and accepted for production use at one
   customer site at the time of the order."  Finding 7.  Presumably,
   SSA  will engage  in the  same practices  it now  contemplates to
   assess the reliability of these machines.  Whether  the computers
   included in offers today are  reliable today will have nothing to
   do with meeting the agency's need for reliable computers at those
   future dates.  Thus, the  "field-proven" clause, coupled with the
   long term of the contract, results in restricting competition for
   a reason that is not rationally related to SSA's requirements.
 
        We note that SSA has called to our attention a case in which
   the    Armed   Services   Board   of   Contract   Appeals   found
   unobjectionable  a  contract clause  requiring  the  provision of
   "field-proven  equipment."   Aydin Corp.,  Microwave  Div., ASBCA
   34054,  89-1 BCA    21,206 (1988).    The decision  in this  case
   explains   why  such  a  clause  is  reasonable:  the  Government
   "intended  to use  [the  equipment]  and to  do  so very  quickly
   without  any further  development or testing."   Id.  at 106,997.
   Had the  timing of the cut-off and  delivery dates in the instant
   case  been  similar,   this  protest  would  have   been  decided
   differently.   We note  additionally that SSA  believes it  has a
   safeguard against paying excessive sums for  improved technology:
   newer equipment must have a cost that is "equal to or  lower than
   [that of] the originally proposed equipment on a per MIPS basis."
   See Finding 7.   This provision is of  limited value, however; if
   the   cost  of  mainframes   that  meet  all   SSA's  operational
   specifications  generally decreases,  on a  per  MIPS basis,  the
   clause  will  not help  the  agency  negotiate  a price  that  is
   necessarily lower than competition would produce.  
 
   202 SSA MIPS requirement
 
        SSA  has made  an official  and best  estimate of  the total
   capacity which  the mainframes  in its  national computer  center
   must  have in each  month for the  next four years.   Finding 10.
   The capacity needed in September 1996 is 1811 (or 1813) SSA MIPS.
   Id.   The maximum number  of computers that  may be used  to meet
   this need is  nine.  Finding 12.   SSA has divided  the September
   1996 capacity figure by the maximum number of computers, and made
   the resultant  figure (202 SSA  MIPS, with  upward rounding)  the
   minimum capacity required  for any mainframe offered  in response
   to this solicitation.  Finding 14.
 
        This  figure  is  suspect  on  its  face:  it  represents  a
   mathematical  average, calculated  without  any reference  to the
   agency's  own capacity requirements  in any particular  month but
   one.   Nor does it have any apparent relationship to the agency's
   true needs;  an SSA official  testified that the agency  does not
   care how many computers it has at any time (as long as the number
   is more than one and  less than ten), provided that the  machines
   as a group have a capacity at least as great as the number stated
   for that month in the solicitation.  Finding 12.  
 
 
        SSA  requires that  each offeror propose  to supply  one new
   computer in December  1992 and another in January  1993.  Finding
   13.   Amdahl would like  to be able  to offer to SSA  model _____
   mainframes, with a  rated capacity of ___ SSA  MIPS each, in each
   of these  months, followed by  some combination of  _____s and/or
   _____s at later  dates.   If permitted to  do this, Amdahl  could
   meet   the   agency's   stated   capacity  requirements   through
   ______________ ___________________  with equipment that  has been
   proven       reliable.               Findings       18,       20.
   _____________________________________________
                   ----------- FOOTNOTE BEGINS ---------
                   ----------- FOOTNOTE BEGINS ---------
   ____________________________________.
 
        In attempting to justify the requirement, SSA officials have
   said, in effect,  that they think that specifications  set out in
   the solicitation  do not  reflect the agency's  true needs.   The
   contracting officer  expressed concern  that if  an offeror  were
   permitted to supply some computers with smaller capacity than 202
   SSA MIPS, over  the life of the  contract the firm would  have to
   replace more  of the computers  now in the  center.  Finding  15.
   This may  be true,  but it is  also irrelevant;  the solicitation
   expressly  permits a certain  number of replacements,  and Amdahl
   has not even suggested that  this provision be modified.  Finding
   12  n.5.   If  the number  of  replacements ought  to be  further
   limited,  the solicitation  has  to be  amended  to reflect  this
   change.   The contracting  officer also maintained  that smaller-
   capacity computers are unacceptable because they "would force SSA
   to live closer to the 85% aggregate utilization . . . level" upon
   which the listed capacities are based.  Id.; see also Finding 10.
   This contention, while  true for  the early  contract months,  is
   also of  no  concern;  the  solicitation permits  an  offeror  to
   propose a  succession of computers  which at all times  keeps the
   total capacity at or above the  stated levels.  Permitting a firm
   to supply smaller computers when replacing some of the mainframes
   now  in  the center  might  force  the  vendor to  supply  larger
   computers when replacing others, but  would have no effect on the
   requirement that the stated levels  be met.  Again, if  SSA wants
   mainframes  with   greater  capacity,   it  has   to  amend   the
   solicitation to say so.  For an agency to evaluate responses to a
   solicitation based upon unstated requirements (particularly  when
   the  unstated requirements  are at  odds  with provisions  of the
   solicitation) is  inherently unfair and represents the antithesis
   of competition.   41  U.S.C.   253b(a)  (1988); 48  CFR 15.608(a)
   (1991).
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        At hearing,  SSA's deputy associate commissioner for systems
   operations  amplified  the  contracting  officer's concern  about
   "living  close" to  the  listed capacities.    He suggested  that
   operating  the  center  at  seventy  to  seventy-six  percent  of
   aggregate  capacity would be better  than operating it at eighty-
   five percent; that the capacities  listed in the solicitation for
   contract  months one through  nine are understated  by seventy to
   ninety-two SSA MIPS; and that  the agency needs more capacity for
   other reasons.  Finding 16.   This testimony is at odds with  the
   agency's  position and  is consequently  of dubious  value.   See
   Finding 10.  If  it is correct,  however, computers with 202  SSA
   MIPS capacity, like Amdahl's model _____ (___ SSA MIPS), will not
   meet the agency's needs.   Adjusting the figures contained in the
   solicitation capacity requirements  table for  less than  eighty-
   five  percent capacity usage,  and taking into  consideration the
   factors  cited in  Finding 11,  we calculate  the following.   At
   seventy-six percent usage,  adding one computer in  December 1992
   and another in January 1993  would make the aggregate capacity of
   the computers in  the center inadequate by ________  1993 if ___-
   MIPS machines are  involved and by May 1993  if 202-MIPS machines
   are provided.  Nine of  either size machine would be insufficient
   to meet  the capacity requirement  of 2025 SSA MIPS  in September
   1996.  At  seventy percent usage,  assuming the same  replacement
   pattern,  both  computers would  be  inadequate  in each  of  the
   __________  contract  months  and  well  before  the end  of  the
   contract period.  If seventy more SSA MIPS are needed in contract
   months  ________________, even at seventy-six percent usage, both
   computers  would  be inadequate  in  all  those months  and  even
   earlier in the life of the contract.
 
        The deputy associate commissioner also testified that people
   in SSA's contracts  office have told him that  unless vendors are
   guaranteed a  purchase of  at least  two 202-MIPS  computers, the
   agency will  not receive  the "extremely  aggressive pricing"  it
   desires.   Finding 15.   This testimony, for which  no supporting
   documentation  was  provided,  is the  rankest  sort  of hearsay.
   Although the Board admits hearsay evidence, Rule 22(a), this kind
   of speculation is entitled to no credence.
 
        The  202   SSA  MIPS  specification  and   the  field-proven
   specification  both   reduce  competition   artificially.     SSA
   officials  believe that  Amdahl can  fully  satisfy the  agency's
   requirements, but the terms of the solicitation preclude the firm
   from submitting an acceptable proposal.
 
                                Decision
 
        To the extent that the protest attacks the lawfulness of the
   solicitation provision dealing with performance downtime credits,
   the parties' joint motion to  dismiss is GRANTED; this portion of
   the complaint is DISMISSED WITH PREJUDICE.  Rule 28(a).
 
        We find that both of the other specifications challenged  by
   Amdahl  are unnecessarily restrictive of competition in that they
   bear no  rational relationship to  SSA's needs.   We consequently
   GRANT  the  remainder  of  the  protest.   SSA  shall  amend  the
   solicitation to permit competition in a way sanctioned by statute
   and regulation.  In light of the short amount of time between the
   date of this decision and December, when some additional capacity
   must be added  to SSA's national computer center,  the agency may
   allow as little as ten  calendar days for prospective offerors to
   submit proposals in response to an amended solicitation.
 
                                      _________________________
                                      STEPHEN M. DANIELS
                                      Board Judge
 
   We concur:
   _________________________          _________________________
   MARY ELLEN COSTER WILLIAMS         JOSEPH A. VERGILIO
   Board Judge                        Board Judge