SMS DATA PRODUCTS GROUP, INC., PETITIONER V. UNITED STATES OF
AMERICA, ET AL.

   No. 90-1232

   In The Supreme Court Of The United States

   October Term, 1990

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Federal Circuit

   Brief For The United States In Opposition

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-39a) is reported
at 915 F.2d 1544.  The opinion of the General Services Administration
Board of Contract Appeals (Pet. App. 40a-105a) is reported at 90-2
B.C.A. (CCH) Paragraph 22,799.

                             JURISDICTION

   The judgment of the court of appeals was entered on October 9,
1990.  A petition for rehearing was denied on November 6, 1990.  Pet.
App. 106a-107a.  The petition for a writ of certiorari was filed on
February 4, 1991.  The jurisdiction of this Court is invoked under 28
U.S.C. 1254(1).

         QUESTION PRESENTED

   Whether the court of appeals correctly held that the General
Services Administration Board of Contract Appeals had misinterpreted
the terms of a Department of the Interior solicitation for bids on a
data processing contract.

                               STATEMENT

   1. In February 1989, the United States Geological Survey,
Department of the Interior (USGS), issued Solicitation No. 7510 for
acquisition of computer systems intended for use in over 200 field
offices.  Pet. App. 2a-3a.  Mandatory specifications included "an
unlimited license for software use," whereby "all users of the system
are allowed to execute the software simultaneously and the software
may be executed on all processors that are part of the system." Id. at
19a-20a.  Petitioner SMS Data Products, Inc., respondent Data General
Corporation, and Lockheed Missiles and Space Co., Inc., each submitted
proposals that passed the required benchmark demonstration.  As a
result, the USGS informed the firms that "price would control (the)
award." Id. at 10a.

   Petitioner then submitted a Best and Final Offer (BAFO) that was
the "lowest-priced offer." Pet. App. 10a.  The USGS realized, however,
that petitioner's proposal -- as clarified by a letter postdating its
BAFO -- was the lowest because the proposal offered only limited
software licenses.  The USGS determined that petitioner's proposal did
not offer licenses permitting all users to use software simultaneously
(as required by the bid solicitation), but rather offered licenses
provided on a "per user" basis sufficient to cover only one user at
each workstation.  Moreover, the USGS found that petitioner's proposal
did not license software to all processors (as required by the bid
solicitation).  Instead, the proposal "split" the licensing of its
data base program into front-end and back-end packages, with the
latter licensed for only a small percentage of the total number of
processors in the evaluated system.  See id. at 10a-12a.

   In light of petitioner's failure to satisfy the solicitation's
licensing requirements, the USGS in December 1989 "disqualified
(petitioner) from the competition and awarded the contract to Data
General, which had submitted the next-lowest priced responsive offer."
Pet. App. 13a.  Petitioner and Lockheed then filed separate protests
to the General Services Administration Board of Contract Appeals
(Board).  See 40 U.S.C. 759(f).  /1/

   2. In March 1990, the Board granted petitioner's protest, holding
that the USGS, "if it intends to procure (the solicitation's)
requirements, must amend the solicitation to reflect its true software
licensing requirements and conduct further discussions with the
offerors, and make award on the basis of revised BAFOs." Pet. App.
41a-42a.

   The Board first concluded that petitioner could reasonably have
read the solicitation to allow licensing limited to only one user at
each workstation.  Pet. App. 90a-92a.  The Board also interpreted the
solicitation to permit petitioner to propose software licenses
authorizing use of back-end software on some -- but not all --
processors.  Id. at 95a.  The Board thus concluded that the USGS
should not have disqualified petitioner for failing to submit a
proposal meeting the solicitation's specifications.

   The Board also directed the USGS to revise its solicitation and
then seek new BAFOs if it insisted on the requirements that petitioner
failed to meet, namely, unlimited users and front-end and back-end
software on all processors.  Pet. App. 104a-105a.  The Board
recommended, however, that the USGS abandon these requirements since
they were not necessary:

      We believe that (the USGS) should reconsider whether it really
      wants to be charged the inevitable higher prices for something
      -- unlimited simultaneous use of software packages -- which, in
      effect, it admits in its solicitation it will rarely if ever
      need.  * * * (Petitioner) has made a convincing case for
      questioning whether as a practical matter it makes sense to have
      or pay for a complete data-base package resident on the 5,148
      work stations.  Wouldn't it truly be "incredibly stupid" to run
      * * * back-ends on diskless work stations, as testified by Data
      General's own expert?

Id. at 94a-95a.

   3. On an appeal filed by Data General, the Federal Circuit
reversed, concluding that "(t)he board's decision rests on a
misinterpretation of the * * * soliciation and a misunderstanding of
its own limited procurement role." Pet. App. 17a.  First, the court of
appeals held that the Board "disregarded the plain meaning of the
licensing provision," which "unequivocally requires bidders to provide
software licenses not limited to any specific number of users or
particular processing configuration." Id. at 17a-18a.  Petitioner's
proposed split of front-end and back-end licenses and its pricing of
software licenses on a per user basis, the court determined, violated
the plain terms of the solicitation.  Id. at 19a-25a.

   Second, the court of appeals concluded that the Board "erroneously
equated the terms 'user' and 'workstation,' leading it to misinterpret
(petitioner's) proposal as technically compliant." Pet. App. 18a.
Petitioner could not assume one user per workstation, the court
explained, given the large number of users with access to the systems,
both because there will be multiple users at each workstation and
because of extensive remote access to the systems by outside parties
through the users' own equipment.  Id. at 25a-26a;  see also id. at
26a-31a.

   Third, the court determined that the Board erroneously relied on
the "simplified" parameters of the benchmark demonstration test, which
artificially assumed one user per workstation.  In the court's view,
the Board thus disregarded the flexibility in configurations that the
solicitation specifically required for the actual systems when
installed.  Pet. App. 18a, 32a-36a.

   Finally, the court observed that "(t)he board's independent
assessment of whether the agency would or should" impose its
front-end/back-end and unlimited user requirements "is also illegal,
at least to the extent it infected the board's analysis of both the
solicitation and the technical compliance of (petitioner's) offer."
Pet. App. 37a.  Under 40 U.S.C. 759(e), the court pointed out, the
Board may not "interfere with the determination by agencies of their
individual data processing equipment requirements." Consequently, the
Board "has no warrant to question the agency's judgment or to revise
its delegation of procurement authority to ensure that the agency's
assessment of its 'true' needs is in harmony with the board's." Pet.
App. 39a.

                               ARGUMENT

   1. Petitioner broadly contends the the Federal Circuit "has
improperly narrowed the scope of the Board's bid protest
jurisdiction." Pet. 15.  In particular, petitioner argues (Pet. 25-28,
26-32) that the court of appeals erred in applying the proscription of
40 U.S.C. 759(e), which prohibits the General Services Administration
from acting "to impair or interfere with the determination by agencies
of their individual data processing requirements," to circumscribe the
Board's review of bid protests.

   That issue is not presented here.  In its review of petitioner's
protest, the Board did not directly assert any such authority "to
impair or interfere with the (USGS's) determination * * * of (its)
data processing requirements." 40 U.S.C. 759(e).  To the contrary, the
Board expressly allowed the USGS to impose its chosen requirements --
albeit with the pointed suggestion that the agency reconsider those
aspects of the solicitation.  See Pet. App. 94a ("We believe that (the
USGS) should reconsider whether it really wants to be charged the
inevitable higher prices for something -- unlimited simultaneous use
of software packages -- which, in effect, it admits in its
solicitation it will rarely if ever need.").  Accordingly, until the
Board renders a decision asserting authority, despite Section 759(e),
to redefine a contracting agency's data processing needs -- and the
Federal Circuit has an occasion squarely to address that issue --
further review of petitioner's claim on the record presented here
would be premature.

   2. Petitioner also contends (Pet. 18-26) that the court of appeals
exceeded its authority because the Board's decision fell within its
jurisdiction under 40 U.S.C. 759(f)(5)(B), which authorizes the Board
to require agency compliance with applicable "statute(s) or
regulation(s)." In particular, petitioner points to 41 U.S.C.
253a(a)(1)(A), requiring an agency to draw up specifications for data
processing solicitations "in a manner designed to achieve full and
open comptetition," and to 41 U.S.C. 253a(a)(2)(B), authorizing an
agency to impose "restrictive provisions or conditions only to the
extent necessary to satisfy (its) needs * * *." Again, petitioner is
attacking a straw man.  In its decision overturning the USGS's
contract award, the Board nowhere purports to resolve the case on the
grounds that the agency violated the directives set forth in Section
253a.  That is readily understandable in light of petitioner's failure
before the Board to challenge the USGS's decision on that score.  See
also Data General Br. in Opp. 5-6.

   At bottom and despite petitioner's characterizations, this case
involves a straightforward fact-specific issue, namely, whether the
Board misinterpreted the terms of the USGS's soliciation for bids on a
particular data processing contract.  The court of appeals' resolution
of that question is unexceptionable.  Further review by this Court is
not warranted.

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   STUART M. GERSON

      Assistant Attorney General

   ANTHONY J. STEINMEYER

   FRANK A. ROSENFELD

      Attorneys

   APRIL 1991

   /1/ The Board denied Lockheed's separate protest, Pet. App. 105a,
and Lockheed sought no further review of that ruling.