B-298627, eFedBudget Corporation, November 15, 2006

B-298627 Nov 15, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights eFedBudget Corporation protests the proposed award of a contract on a sole-source basis to RGII Technologies, Inc. pursuant to presolicitation notice No. BP06, issued by the Department of State (DOS) for continued implementation, maintenance, enhancement, and support for DOS's worldwide budget and planning software systems. The protester asserts that the agency's decision to procure the software services on a sole-source basis was improper. Specifically, the protester argues that the required justification and approval (J&A) was deficient; that the agency unreasonably refused to consider the protester's approach of developing a non-proprietary software system; and that, in any event, the need for the sole-source procurement arose from the agency's lack of advance planning. We sustain the protest. View Decision B-298627, eFedBudget Corporation, November 15, 2006 Decision Matter of: eFedBudget Corporation File: B-298627 Date: November 15, 2006 John E. Cleckner for the protester. James K. Kearney, Esq., and Holly Emrick Svetz, Esq., Womble Carlyle Sandridge & Rice, LLC, for RGII Technologies, Inc., an intervenor. Dennis J. Gallagher, Esq., Department of State, for the agency. Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency reasonably concluded that protester is not an acceptable source to perform a contract for maintenance and support of contracting agency's software system, where the record shows that use of proprietary software belonging to the incumbent contractor, and currently unavailable to any other firm, is necessary for successful performance of the contract. 2. Protest of proposed sole-source award is sustained where the record shows that the agency did not satisfy its obligation to engage in reasonable advance planning and to promote competition. DECISION eFedBudget Corporation protests the proposed award of a contract on a sole-source basis to RGII Technologies, Inc. pursuant to presolicitation notice No. B'P'06, issued by the Department of State (DOS) for continued implementation, maintenance, enhancement, and support for DOS's worldwide budget and planning software systems. The protester asserts that the agency's decision to procure the software services on a sole-source basis was improper. Specifically, the protester argues that the required justification and approval (J&A) was deficient; that the agency unreasonably refused to consider the protester's approach of developing a non-proprietary software system; and that, in any event, the need for the sole-source procurement arose from the agency's lack of advance planning. We sustain the protest. BACKGROUND Under contract with DOS, beginning in 1997, RGII, with the protester as a subcontractor,[1] developed the central resource management system of the agency's Bureau of Resource Management, including the allotment control system, the budget control system, and the budget resource management system. For the past 9 years, the agency has relied on the services of RGII exclusively to maintain and enhance that budget and planning software. In 2000, the agency and RGII entered into a licensing agreement limiting the government's rights in the software that operates the budget and planning systems; [2] the original software was then copyrighted by RGII under the name –Monument.— The scope of the license, however, is broader than simply the Monument software. Under the license agreement, –Licensed Product— means: any product made by, made for, used, sold, offered for sale, leased, offered for lease by Licensor that includes, combines, incorporates and/or implements the Software, and any modification or derivation thereof, with software and/or hardware provided by Licensor for purposes of adding to and/or increasing the value, functionality or utility of the Software. AR, Tab 1, License Agreement, at 2. The agreement provides DOS rights to use the licensed product only within the agency, precludes the combination of the licensed software with other software for the purpose of implementing the software, and precludes the agency from disclosing the licensed software to other contractors or to other government agencies. At the agreement's inception, the agency's expectation was that the agency –would benefit from receipt without additional cost of improvements that would be made to RGII's software,— an expectation that has been –disappointed.— Agency's Response to GAO Questions, Oct. 4, 2006, at 3. Either party may terminate the agreement with at least 90 days prior written notice; upon termination, the agency ceases to have any rights in the software.