United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

Decision

Matter of: ASC Group, Inc.

File: B-407136

Date: November 15, 2012

Daniel L. Everest, Jr., and Stephen D. Blancq, for the protester.

Timothy J. Ryan, Esq., Department of Defense, Defense Logistics Agency, for the 

agency.

Paul N. Wengert, Esq., and Sharon L. Larkin, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision.

DIGEST

Protest that terms of the licensing agreement required by a solicitation for software 

were unduly restrictive of competition is denied where the agency’s market research 

reasonably supported the agency’s conclusion that these terms would best meet the 

agency’s needs. 

DECISION

ASC Group, Inc., of Vienna, Virginia, a small business, protests the terms of request 

for proposals (RFP) No. SP3300-12-R-0005, issued by the Department of Defense, 

Defense Logistics Agency (DLA), for a web-based commercial software quality 

management tool (QMT), and supporting services. ASC Group argues that the RFP 

improperly restricts competition by specifying that the software permit use by a 

specified number of concurrent users. 

We deny the protest.

BACKGROUND

DLA monitors the performance of various services provided by its support 

contractors. The QMT software application will allow DLA to automate that process, 

by establishing surveillance requirements, scheduling personnel to perform 

surveillance, documenting performance, and reporting results. That information 

allows DLA to track and monitor trends in performance, and to establish and monitor 

any needed preventive or corrective actions. AR, Tab 3, Preliminary Market 

Research Report, at 3; Protester’s Supplemental Comments, attach. A, at 3. 
Page 2 B-407136

Before DLA issued the RFP, the agency conducted market research to assess the 

availability of commercial QMT software. In mid-2010, DLA surveyed the available 

commercial products, and among other things, analyzed the commercial terms 

offered by vendors for licensing the software. The analysis showed that commercial 

vendors typically licensed QMT software based on a fixed number of concurrent 

users from an unrestricted population (a concurrent-user license), or else based on a 

fixed list of users without limit on concurrent use among that population (a name 

license, or seat license). The market research indicated that concurrent-user 

licensing appeared to be the most common. The market research also concluded 

that commercial license terms typically classified individual users as having either 

“full” access or “review/comment” access. Commercial terms differed over whether 

the license was perpetual (a one-time purchase to license the current version) or 

subscription-based (analogous to a term lease of software license rights). AR, 

Tab 3, Preliminary Market Research Report, at 5-6. 

Following the initial market research, in Autumn 2010, DLA published a request for 

information (RFI), which requested that interested vendors respond with information 

on the capabilities of available QMT software, the extent of their commercial sales, 

and rough pricing for licensing, maintenance, and training. AR, Tab 4, DLA Request 

for Information, at 2. DLA received RFI responses from 6 small businesses, and 2 

large businesses. ASC did not respond to the RFI. 

In Spring 2012, DLA analyzed the name licensing structure of the contract for its 

existing QMT and the results of the market research. From this analysis, DLA 

concluded that by changing from the existing name licensing structure to a 

concurrent-user licensing structure for the new contract, DLA could align its license 

rights with its actual usage of the QMT, could better control software access 

centrally by automatically timing out users that were inactive, and could deploy the 

software to the maximum number of potential users. AR, Tab 7, Memorandum for 

Record, Apr. 2, 2012, at 1. DLA also concluded that, under a concurrent-user

licensing structure, the agency would expect to receive significantly lower prices 

than under the name licensing structure for the existing QMT software. AR, Tab 6, 

Addendum to Acquisition Plan, May 23, 2012, at 1. Accordingly, DLA issued the 

RFP seeking a commercial QMT software application on a concurrent-user licensing 

basis. 

The RFP, issued on July 20, 2012 as a small business set-aside, sought proposals 

to supply a commercial off-the-shelf QMT software application and supporting 

services (software installation, training, and technical support). RFP at 3. The RFP 

specified that DLA was seeking a license for 100 edit- and 100 read-access users 

concurrently, under a perpetual license, with options to add up to 50 additional users 

of each type in each of four annual option periods. RFP at 6, 10, 12, 14, 17. DLA 

specified that it required the license to have “a concurrent licensing structure.” PWS 

at 1; RFP at 6. The RFP also specified that proposals were due by August 20. 
Page 3 B-407136

ASC submitted multiple inquiries to DLA before proposals were due. Among other 

things, ASC questioned the RFP requirement for concurrent-user licensing, and it 

argued that DLA should instead provide data describing the agency’s software 

usage pattern to allow each offeror to propose a licensing scheme that it felt would 

meet DLA’s needs. AR, Tab 8, E-mail from ASC to DLA, Aug. 3, 2012, attach. 1, 

at 1-3; see generally Protest exh. 1-10, E-mails from ASC to DLA. When DLA did 

not accede to ASC’s requests, the firm filed this protest before the closing time for 

proposal submission. ASC did not submit a proposal. 

DISCUSSION

In its protest, ASC argues that DLA has unjustifiably restricted competition by 

requiring vendors to offer current-user licensing. ASC argues that DLA should 

permit offerors to propose other licensing structures, and in particular, a name 

licensing structure--that is, a license that permits software use based on specifically

named users. Protest at 2-3. ASC argues that name licensing would meet DLA’s 

needs because, whenever a user lacking privileges needed to use the QMT, the 

process for deactivating one user and activating another “is quick and easy from 

within the software.” Protester’s Comments at 5 n.3. Therefore, ASC argues, the 

RFP specification requiring a concurrent-user license unreasonably restricts 

competition. 

DLA responds that its market research showed that concurrent-user licensing was a 

common commercial term for QMT software, that the agency’s requirements for the 

QMT software most closely align with the flexibility of concurrent-user licensing, and 

that the agency expects to achieve significant savings as a result of concurrent-user 

licensing. DLA emphasizes that its goals for improving the agency’s monitoring of 

contractor performance will require increased use of the QMT in its 14 distribution 

centers and potentially the agency’s entire headquarters enterprise. DLA argues 

that concurrent-user licensing will provide the flexibility and scalability to do this 

monitoring, while name-licensed software would require administrative burdens and 

attendant delays to manage the user list. Therefore, DLA argues, the RFP best suits 

the agency’s needs. Supplemental Agency Report at 2-3.

Where a protester challenges a specification or requirement as unduly restrictive of 

competition, the procuring agency has the responsibility of establishing that the 

specification or requirement is reasonably necessary to meet the agency’s needs. 

We will examine the adequacy of the agency’s justification for a restrictive 

solicitation provision to ensure that it is rational and can withstand logical scrutiny. A 

protester’s mere disagreement with the agency’s judgment concerning the agency’s 

needs and how to accommodate them does not show that the agency’s judgment is 

unreasonable. Northrop Grumman Tech. Servs., Inc., B-406523, June 22, 2012, 

2012 CPD ¶ 197 at 8. 
Page 4 B-407136

The record here supports the reasonableness of DLA’s requirement for QMT 

software with a concurrent-user license. As described above, the contemporaneous 

record shows that DLA conducted market research before issuing the RFP to 

determine the performance and licensing models offered in the commercial 

marketplace. The market research supports the conclusions that small businesses 

are likely to compete for the agency’s QMT requirements and that concurrent-user

licensing is commercially available (or even preferred), that is offers flexibility that 

supports the agency’s plans to increase its use of the QMT software, and is likely to 

result in cost savings. These considerations all support DLA’s decision to specify its 

requirement for concurrent-user licensing terms. Although ASC may desire another 

licensing method, it has not shown that the RFP is unduly restrictive of competition

or that the agency’s decision to require concurrent-user licensing lacked a rational 

basis. 

The protest is denied.

1

 

Lynn H. Gibson

General Counsel 

 1 ASC argues that other aspects of the RFP are also defective, such as, for 

example, the RFP did not provide for the evaluation of software efficiency. ASC 

Supplemental Comments, attach. A, at 4. However, as noted above, ASC did not 

submit a proposal because of its decision not to offer concurrent-user licensing. 

See id. at 5 (explaining decision not to offer concurrent-user licensing), 6 (stating 

that ASC did not submit a proposal). Therefore, ASC is not an interested party to 

challenge other alleged defects in the RFP; the result of these challenges would 

have no effect on ASC’s likelihood of receiving award of the contract, and therefore 

we will not consider them.