MOTIONS FOR FULL BOARD CONSIDERATION DENIED: September 29, 1995
                                                                   
 
 
                       GSBCA 13323-P-R, 13333-P-R
 
 
                  SPRINT COMMUNICATIONS COMPANY, L.P.,
 
                                  and
 
                      AT&T COMMUNICATIONS, INC., 
 
                                           Protesters/Intervenors,
 
                                   v.
 
                    GENERAL SERVICES ADMINISTRATION,
 
                                           Respondent.
 
        David S. Cohen, William F.  Savarino, Carrie B. Mann, and G.
   Brent Connor  of Cohen &  White, Washington, DC; and  George Affe
   and  Anthony Cogswell  of  Sprint  Communications Company,  L.P.,
   Herndon,    VA,   counsel    for   Protester/Intervenor    Sprint
   Communications Company, L.P.
 
        Thomas C. Papson and James  P. Lamoureux of McKenna & Cuneo,
   L.L.P., Washington, DC;  and Nathaniel Friends, G.  Ridgley Loux,
   and Steven  W. DeGeorge of  AT&T, Silver Spring, MD,  counsel for
   Protester/Intervenor AT&T Communications, Inc.
 
        George  N. Barclay,  Michael J.  Ettner,  Pamela J.  Reiner,
   Marie N. Adamson, and Jody  B. Burton, Office of General Counsel,
   General Services  Administration,  Washington,  DC,  counsel  for
   Respondent.
 
   Before the Full Board.
 
                                 ORDER
 
        The   motions   filed   by   protesters/intervenors   Sprint
   Communications Company,  L.P., and AT&T Communications, Inc., for
   full  Board consideration  of  the  panel's  decision  in  Sprint
   Communications  Co.  v.  General Services  Administration,  GSBCA
   13323-P, et al., 1995 BPD   144 (July 20, 1995),  reconsideration
   denied, 1995 BPD   170 (Aug. 22, 1995), are DENIED.
   DANIELS   (Chairman),   NEILL,   and   VERGILIO,  Board   Judges,
   dissenting.
 
 
        I.   We would grant the motions for full Board consideration
   of  the Board's  jurisdiction over  these protests.   The  matter
   raised is of considerable importance  in two regards.  First, the
   type  of  contracting  involved  here  --  the  use  of  parallel
   contracts as a vehicle for continuing competition among a limited
   number  of contractors  -- is  a procurement  technique which  is
   being used with increasing  frequency.  Second, the  immensity of
   the program -- entailing an outlay of as much as $25 billion over
   ten years  -- commands  attention.  Full  Board consideration  is
   also  merited  to  review  a  panel  decision  which  we  see  as
   departing,  without convincing  rationale,  from a  soundly-based
   practice of the General Accounting Office.
 
        We  respectfully   disagree  with  our   colleagues  as   to
   jurisdiction.  In our view, the challenged Government actions are
   protestable in this  forum.  The  panel to  which the cases  were
   referred erred in dismissing them  for lack of jurisdiction.  The
   Board should have proceeded to consider the remaining dispositive
   motions and  then, if appropriate,  to decide the cases  on their
   merits.
 
        II.  In  1988,  the  General  Services Administration  (GSA)
   awarded   contracts  under  its   FTS2000  program  to   the  two
   protesters,   AT&T  Communications,   Inc.  (AT&T),   and  Sprint
   Communications Company,  L.P. (Sprint).   Each contract  entitled
   its  holder  to  provide  certain  intercity   telecommunications
   services  to the  Federal  Government  over  a  ten-year  period.
   AT&T's  contract  was for  Network  A,  to  which  were  assigned
   agencies  whose requirements were intended to equal sixty percent
   of  the projected  program revenues;  Sprint's  contract was  for
   Network B,  to which  were assigned  agencies whose  requirements
   were intended to equal the remaining forty percent.
 
        "As  a means of  ensuring continued improvements  in FTS2000
   services and prices," the contracts contained provisions designed
   to  stimulate competition between the two companies.  The initial
   60/40 allocation was established only for the first four contract
   years.  During  the fourth year, and  again in the seventh  year,
   each    company   was   to   submit   a   "proposal   for   price
   redetermination."  The agency would then, in accordance with pre-
   announced  criteria, evaluate the  quality of service  and prices
   associated  with each  proposal.   At the  end of  each  of these
   years, GSA, based  on its evaluation,  could reallocate from  one
   network  to the  other  enough  requirements  to  generate  forty
   percent  of the  revenues  associated  with  the  network  losing
   requirements.   See AT&T Communications,  Inc. v. Wiltel, Inc., 1
   F.3d 1201, 1204 (Fed. Cir. 1993).
 
        The contracts guaranteed to AT&T and Sprint, then, the right
   to provide,  between them, all  the service the  Government would
   order under  the FTS2000 program for a ten-year period.  From the
   perspective of each of the two  companies, however, the contracts
   promised something very different: an allocation of work designed
   to achieve  a fixed  percentage of revenues  for four  years, and
   after that, at each of two points in time, a  competition through
   which   a  significant  portion  of  FTS2000  services  could  be
   reallocated.   The  reallocation could  have  enormous impact  on
   contract work and revenues.  AT&T, for example, was to receive an
   anticipated sixty percent  of service revenues during  years 1-4;
   if it  won the year  4 competition, its allocation  for years 5-7
   would rise to 76 percent, and if it won the year 7 competition as
   well, it  would  be  assigned,  for years  8-10,  agencies  whose
   requirements would be intended to equal 85.6 percent of projected
   program  revenues.  Conversely,  if AT&T lost  both competitions,
   its  allocation for years  5-7 would fall to  36 percent, and for
   years  8-10 would  be only  21.6 percent.   Sprint  similarly was
   guaranteed  a projected  forty percent for  years 1-4,  but could
   receive 64, 40, or 24 percent for years 5-7 and from 78.4 to 14.4
   percent for years 8-10.
 
 
        The  year 4 competition resulted in  no change in allocation
   of  projected program  revenues.   In year  7, GSA  has solicited
   proposals   for   price   redetermination,   including   pricing,
   technical,  and  business  proposal  information;  announced   an
   intention to evaluate these proposals  on the basis of  technical
   and cost  factors, and  to select as  the "winning  scenario" the
   "more advantageous" of  the two; conducted negotiations  with the
   two companies; and asked for best and final offers.  The  "Year 7
   Price Redetermination  and Service  Reallocation Document"  which
   was sent to the companies is organized into the standard sections
   established  by  the  Federal Acquisition  Regulation  (FAR)  for
   competitive  solicitations, and  it  contains or  references many
   standard clauses which are required by the FAR to be included  in
   such solicitations.   Each firm  has protested that the  terms of
   this document are  violative of statute  and regulation, in  that
   they make the competition unfair.
 
        III. According to the Brooks  Automatic Data Processing Act,
   40 U.S.C.A.   759(f)(1) (West Supp. 1995) --
 
             Upon  request  of  an   interested  party  in
             connection  with  any   procurement  that  is
             subject to  this section . . . ,  the [Board]
             shall review, as provided in this subsection,
             any decision by a contracting officer that is
             alleged to  violate a statute,  a regulation,
             or  the   conditions  of   a  delegation   of
             procurement authority.
 
   In these protests,  there is no question that  the protesters are
   interested parties;  that the matter  involved is subject  to the
   Brooks Act;  and  that the  protests  allege that  a  contracting
   officer's  actions  have  violated  a  statute,  regulation,   or
   delegation of  procurement authority.   The  question before  the
   Board  is  whether the  issues  raised  by protesters  arose  "in
   connection with [a] procurement."
 
 
        The   Brooks   Act   itself  does   not   define   the  term
   "procurement."  The Federal  Property and Administrative Services
   Act, of  which  the Brooks  Act is  a part,  does  not include  a
   definition,  either.   Nor  does  the  FAR, 48  CFR,  say what  a
   "procurement" is.  
 
        The Brooks  Act contains  other provisions  which limit  the
   sorts of contracting actions which may be reviewed by this Board,
   however.  Beyond its first  sentence, 40 U.S.C.   759(f) uses the
   term "protest"  to describe the  nature of the request  which may
   trigger a  review.   A "protest"  is "a  written objection  by an
   interested party" to any of four varieties of action -- 
 
                  (i)  A solicitation or  other request by
             a Federal  agency for offers  for a  contract
             for the procurement of property or services.
 
                  (ii) The   cancellation   of    such   a
             solicitation or other request.
 
                  (iii) An award or proposed award of such
             a contract.
 
                  (iv) A termination or cancellation of an
             award  of   such  a  contract,   if  [certain
             circumstances are present].
 
   40 U.S.C.A.    759(f)(9)(A) (West  Supp. 1995).   The  complaints
   filed  by AT&T  and Sprint  are within  our jurisdiction  only if
   their subject matter falls into one of the specified categories.
 
        In our judgment, the subject of the protests falls  squarely
   within the  first category -- it  is a solicitation by  a Federal
   agency for offers for a contract for the procurement of services.
   According  to  the  FAR,  a  "solicitation"  is  "a  request  for
   proposals   (RFP)  or   a  request   for   quotations  (RFQ)   in
   negotiation."   48 CFR  52.215-5 (1994).   GSA has issued  such a
   document to AT&T and Sprint.  The FAR defines a "contract" as --
 
             a   mutually   binding   legal   relationship
             obligating the seller to furnish the supplies
             or services (including  construction) and the
             buyer to pay for them.  It includes all types
             of commitments  that obligate  the Government
             to an  expenditure of appropriated  funds and
             that, except as  otherwise authorized, are in
             writing.      In    addition   to   bilateral
             instruments, contracts  include (but  are not
             limited to)  [numerous kinds  of instruments,
             including] bilateral contract modifications.
   Id. 2.101.  The result  of the competition between the  two firms
   will  be such  a relationship,  modifying  existing contracts  to
   cover contract years 8-10.
 
 
        At the time of award, the contracts secured to each  of AT&T
   and  Sprint  three rights:  an  assignment  of work  designed  to
   achieve  a fixed percentage  of program revenues  during contract
   years  1-4;  a  guarantee  of  work  designed  to  achieve lesser
   percentages    of   revenues    during   years    5-10;[foot #] 1
   and  the opportunity to participate in limited competitions which
   might  lead to  allocations of  revenues  above those  guaranteed
   minimums for  years 5-7  and 8-10.   The competitions  are to  be
   limited in two ways  -- only these two  firms may participate  in
   them, and the  winner may take only forty percent  of the loser's
   share of prospective revenues at each of two moments in time.
 
        The  General Accounting Office  (GAO), like this  Board, has
   statutory  authority to consider procurement protests.  31 U.S.C.
      3552, 3553(a)  (1988).   A "protest," for  the purpose  of GAO
   proceedings,  has the  same meaning  as that  term has  for Board
   proceedings.  31 U.S.C.A.   3551(1)  (West Supp. 1995).  On three
   occasions,  GAO has  considered whether  it  has jurisdiction  to
   consider protests involving limited competitions for the right to
   perform work  that was  included in the  same contract,  with the
   proviso that  the Government had  the choice of not  ordering it.
   Each time, GAO  held that it had jurisdiction.   Honeywell, Inc.,
   B-244555, 91-2  CPD   390 (Oct. 29, 1991); Mine Safety Appliances
   Co.,  69  Comp. Gen.  562  (1990),  90-2 CPD    11;  Westinghouse
   Electric   Corp.,  57   Comp.   Gen.   329   (1978),   78-1   CPD
     181.[foot #] 2
 
        The teaching of  these three decisions is  that jurisdiction
   over  a protest exists  (given other preconditions)  wherever the
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1     The percentages are as follows:
 
             Contractor     Years 1-4  Years 5-7  Years 8-10
             __________     _________  _________  __________
 
             AT&T               60         36        21.6
             Sprint             40         24        14.4
 
   Because  the  year  4  competition  resulted  in   no  change  in
   allocation  of   projected   revenues  during   years  5-7,   the
   percentages shown for years 5-7 are now the minimums for years 8-
   10.
 
        [foot #] 2     We recognize  that when  the  first of  these
   three decisions  was issued,  GAO had no  statutory authority  to
   consider procurement protests (and  thus no statutory  definition
   of "protest" to  assess its jurisdiction against),  and that when
   the  second and third  decisions were  issued, the  definition of
   "protest" for both GAO and  the Board was slightly different from
   what it is now.  None of this has any impact on our analysis.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   subject  of the  complaint is  a competition  between bidders  or
   offerors for the award of  a Government contract -- including the
   modification of  an existing  contract to  incorporate additional
   work.  GAO's understanding is that the substance, rather than the
   form, of the matter is what counts.  We share that interpretation
   of the law.
 
 
        The  Board panel distinguishes these decisions on the ground
   that they involved the exercise of options, and thus the award of
   work  not guaranteed  by  existing  contracts,  rather  than  the
   reallocation  of  work  all  of  which was  encompassed  by  such
   contracts.  We see this  as a meaningless distinction.   From the
   perspective of each company involved in the instant protests, the
   situation here is effectively identical  to the one extant in the
   option  cases -- the  agency may,  but need  not, order  under an
   existing contract more work than  the guaranteed minimum for  the
   next three years.  The only real difference between the GAO cases
   and this one  is that here, the  work which each company  sees as
   covered by an "option" must be given by GSA to the  other company
   if the "option"  is not  exercised.   This has no  effect on  the
   fundamental  fact  that   the  agency  is  conducting   a  formal
   competition between the two firms.[foot #] 3
 
        Neither FTS2000 contract contains a limitation which exempts
   the year  4 or year 7 competition from  what seems to us, reading
   the  statute   and  relevant  regulatory  definitions,   a  clear
   inclusion within the  Board's protest jurisdiction  of complaints
   about the contests.  Congress  certainly knows how to exempt from
   protest authority  procurement actions  which would otherwise  be
   protestable.   In  the Federal  Acquisition  Streamlining Act  of
   1994, for example, it provided:
 
             A  protest is  not  authorized in  connection
             with the issuance  or proposed issuance  of a
             task or delivery  order except for a  protest
             on the  ground that  the order increases  the
             scope,  period,  or   maximum  value  of  the
             contract under which the order is issued.
 
   Pub. L. No. 103-355, 108  Stat. 3243, 3253, 3264 (1994) (creating
   10  U.S.C.    2304c(d),  41  U.S.C.    253j(d)).    No  such  law
   precludes a  protest of  a solicitation issued  by GSA,  with the
   result  of  awarding  allocations  of FTS2000  work,  to  the two
   FTS2000 contractors.   Thus  we conclude  that Congress  intended
   that the Board take jurisdiction over the complaints.
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 3     Furthermore,  even if  we were not  sure that
   this is so, the Board must keep in mind Congress'  intention that
   our  "jurisdiction and function shall  be broadly construed so as
   to  effectuate  the  purposes underlying  the  original  grant of
   protest  jurisdiction to  it."   H.R. Conf.  Rep. No.  1005, 99th
   Cong.,  2d Sess.  775 (1986);  SMS Data  Products Group,  Inc. v.
                                  __________________________________
   United States, 853 F.2d 1547, 1555 n.* (Fed. Cir. 1988).
   _____________
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
                                      _________________________
                                      STEPHEN M. DANIELS
                                      Board Judge
   _________________________          _________________________
   EDWIN B. NEILL                     JOSEPH A. VERGILIO
   Board Judge                        Board Judge
 
 
   VERGILIO, Board Judge, dissenting.
 
 
        I join  the other  dissenting judges  in seeking  to resolve
   this matter  through the  full Board and  in concluding  that the
   Board has jurisdiction over the two protests.  I write separately
   to  explain my  rationale which  I fear  becomes obscured  in the
   analysis of the  other dissenters.  Further, an additional reason
   why this  jurisdictional issue  merits the  consideration of  the
   full Board  is that all  these parties  could be back  before the
   Board after  the agency makes its selection  determination -- the
   jurisdictional issue is far from moot.
 
        I part company from  the original panel in  my understanding
   of the  procurement at issue  and the application of  the Board's
   jurisdictional  statute.   The FTS2000  solicitation expresses  a
   requirement for an  on-going competition to the extent that after
   the award of two contracts, discrete competitions are to occur at
   years  four and seven.   The FTS2000  contracts (  H.14) envision
   limiting these future  competitions to the two  contractors which
   are  obligated  to  compete  under  contractually  specified  and
   anticipated terms and conditions.  The contracts dictate that the
   agency   will  provide  AT&T  and  Sprint  "with  the  applicable
   evaluation  criteria at  the time  that  the Government  requests
   proposals for  price redetermination."   No  actual or  potential
   offeror challenged  such  a  competition  limited  to  particular
   sources as violative of the statutory competition requirements.
 
        However  the  agency  now  characterizes  its   actions  and
   designates the documents it provides  to AT&T and Sprint does not
   alter what is occurring.   As required by  the provisions of  the
   FTS2000  contracts,  the agency  is engaged  in a  competition to
   satisfy  on-going  requirements.     The  agency   is  specifying
   requirements  for which it is seeking prices, and has established
   evaluation and selection  criteria.  AT&T  and Sprint are  actual
   offerors challenging the terms and conditions of the competition.
   The Board has jurisdiction over these protests.
 
        The  contract administration aspects of what is occurring do
   not divest this Board of jurisdiction over the contract formation
   issues.  Neither AT&T nor Sprint requests the Board to review the
   agency  actions in  the  context  of a  contract  dispute and  to
   fashion relief accordingly.  Rather, each has focused its protest
   on the contract formation aspects of the agency's actions -- each
   desires  to ensure that  the agency  conducts the  competition in
   accordance  with  statute  and  regulation.    The  focus  of the
   protests is the  competition expressly recognized in  the FTS2000
   solicitation and contracts.  The statute established the Board to
   consider such  allegations of  contracting officer  error and  to
   fashion timely, effective relief, if appropriate.
 
        The original panel was unduly  influenced by, what I view to
   be, inapplicable  Board  precedent,  AT&T  Communications,  Inc.,
   GSBCA 11138-P, 91-2 BCA   23,852,  1991 BPD   59.  This situation
   with   competition   limited   to    the   two   contractors   is
   distinguishable  from  either  AT&T  or  Sprint  voluntarily   or
   unilaterally  reducing its  pricing  during  the  course  of  its
   contract;   the   contracts  expressly   anticipate   such  price
   reductions  as occurring  without further  competition.   A  true
   competition is  now  occurring  at  year  seven  of  the  FTS2000
   contracts.   Unlike a majority of the Board, I conclude that AT&T
   or Sprint may  protest the terms and conditions  of this discrete
   competition or the agency's ultimate selection of the awardee.
 
                                      _________________________
                                      JOSEPH A. VERGILIO
                                      Board Judge
 
 
   GOODMAN, Board Judge, dissenting.
 
        I  find   persuasive  the  rationale  of   Honeywell,  Inc.,
   B-244555, 91-2 CPD   390 (Oct. 29, 1991); Mine  Safety Appliances
   Co., 69  Comp. Gen. 562  (1990), 90-2 CPD   11;  and Westinghouse
   Electric Corp., 57 Comp. Gen. 329 (1978),  78-1 CPD   181.  As in
   those cases, the action which is protested here was a competition
   limited to  awardees  of contracts  after the  initial period  of
   contract  performance to determine which of the original awardees
   would perform work for which they both were required and entitled
   to compete. In  the instant procurement, respondent  used what it
   called  "reallocation,"  to  determine   the  percentage  of  the
   remaining  work  each  of the  original  awardees  would perform,
   instead of using the term "competition" or availing itself of the
   contractual   mechanism  of  an  option  which  would  award  the
   remaining work  to one  awardee as was  done in  the procurements
   which  were the subject of the aforementioned Comptroller General
   decisions.   This  factual  difference  is  not relevant  to  the
   resolution of the  jurisdictional issue.  Rather, I  view the use
   of limited  competition as the  determinative factor.   I believe
   this Board has jurisdiction to decide the instant protests.
 
                                      _________________________
                                      ALLAN H. GOODMAN
                                      Board Judge