Corporate Restructuring of
Awardee’s Parent
On November 1, 2015, approximately five weeks after the agency
selected Hewlett Packard Enterprise Services for award, the
awardee’s corporate parent, Hewlett Packard Company, split into
two companies: Hewlett Packard Enterprise Company, which will
continue to focus on enterprise services; and Hewlett Packard
Inc., which will focus on printer and personal systems business.
Intervenor’s Comments, Exh. 3, at 202; Intervenor’s Supp.
Comments at 4; Protest at 30; CO Statement at 29. Although the
split was not finalized until the fall of 2015, Hewlett Packard
Company announced its plans for this split in October 2014.
Intervenor’s Comments, Exh. 3, at 202.
The protester argues that the agency unreasonably failed to
consider the corporate reorganization of the awardee’s corporate
parent when evaluating the awardee’s proposal. Protest at 29-33;
Protester’s Comments & Second Supp. Protest at 5-14. In this
regard, the protester claims that numerous references in the
awardee’s proposal to “HP” must refer to the Hewlett Packard
Company, the former parent of the awardee, rather than to the
awardee, Hewlett Packard Enterprise Services. Protester’s
Comments & Second Supp. Protest at 8. The protester also
premises its argument on the incorrect belief that the awardee
will become a subsidiary of Hewlett Packard, Inc.--the newly
formed printer and personal devices company. Protester’s
Comments & Second Supp. Protest at 13‑14; see Intervenor’s Supp.
Comments at 4 (citing Intervenor’s Comments, exh. 3, Letter to
CIO-SP3 Contracting Officer; Intervenor’s Supp. Comments, exh.
8, Letter to Hewlett Packard Enterprise Form 10 at 184
(identifying HPES as “a wholly owned subsidiary of Hewlett
Packard Enterprise”). The protester thus concludes that the
agency unreasonably failed to consider how the corporate
reorganization of Hewlett Packard Company would affect Hewlett
Packard Enterprise Services’ proposed performance of the
contract.
We find no merit in this protest ground. As an initial matter,
we do not agree with the protester’s assumption that any
references in the proposal to “HP” must refer to, and indicate
reliance on, the Hewlett Packard Company, rather than to the
awardee or to the awardee’s new corporate parent, Hewlett
Packard Enterprise Company. Although the protester contends that
the awardee’s proposal only used the acronym HPES to refer to
itself, Protester’s Comments & Second Supp. Protest at 8, we
note that the awardee’s proposal alternately referred to itself
as Hewlett Packard Enterprise Services, HP Enterprise Services,
and HPES, and contained a logo reading “HP” on each page of the
proposal. See, e.g., AR, Tab M, Hewlett Packard Proposal, at 6,
10, 114.
Further, while the term “HP” read alone may have been ambiguous
as to whether it referred to Hewlett Packard Enterprise
Services, the proposal read as a whole demonstrates that
references to “HP” referred to the awardee here. For example,
the protester cites the following language from the awardee’s
proposal: “The MDC [Mid-Atlantic Data Center] that will support
FSA is an HP-owned facility.” Protester’s Comments & Second
Supp. Protest at 7 (quoting AR, Tab M, Hewlett Packard Proposal,
at 5). However, other language in the proposal makes clear that
the MDC is owned by HPES, that is, the awardee Hewlett Packard
Enterprise Services. See, e.g., AR, Tab M, Hewlett Packard
Proposal, at 38. (referring to “the HPES MDC”). Thus, the
proposal’s references to “HP” provide no basis to conclude that
the awardee planned to rely on the resources of any corporate
parent. In sum, we find that the protester has failed to
establish that the awardee’s proposal relied, to any extent,
upon the corporate resources of its parent. In these
circumstances, we find that the agency reasonably did not
consider the restructuring of the awardee’s parent when
evaluating proposals. Cf. FCi Federal, Inc., B-408558.7;
B‑408558.8, Aug. 5, 2015, 2015 CPD ¶ 245 at 11-12 (protest
sustained where agency in undertaking corrective action
approximately nine months after its initial award decision, and
after the awardee had been sold to another company, failed to
consider that awardee’s proposal no longer reflected the manner
in which the contract will be performed and the resources,
experience, and past performance to be relied upon in the
performance of the contract). (Dell
Services Federal Government, Inc., B-412340, B-412340.2,
B-412340.3: Jan 20, 2016) (pdf)
The protester’s argument is based
on a misreading of FAR § 52.209-1. The plain language of that
provision requires only “reevaluation of a qualification” where
the location or ownership of the manufacturing facility of an
approved source changes; it does not require that the purchasing
entity undergo testing or be formally re‑approved, as the
protester suggests. The FAR does contemplate that firms will
request reevaluation of their approved status for a product
where the location or ownership of the manufacturing facility
has changed, and FAR § 9.207 (a)(3) addresses the situation
where a firm fails to do so, providing as follows:
The contracting officer shall
promptly report to the agency activity which established the
qualification requirement any conditions which may merit
removal or omission . . . or affect whether a source should
continue to be otherwise identified as meeting the
requirement. These conditions exist when--
. . . .
(3) A supplier fails to
request reevaluation following change of location or ownership
of the plant where the product that met the qualification
requirement was manufactured (see the clause at 52.209‑1,
Qualification Requirements).
Signal’s request in its proposal
that it be given Innowave’s source approval status appears to
have served this purpose. In response to that request, DLA
reported the change in ownership to the ESA responsible for
source approval, and the ESA agreed that Signal could rely upon
Innowave’s source status. This is all that was required by the
FAR. Associated claims that Signal had to be formally
re-approved in order to be eligible for award, because Innowave
has not manufactured the item since 1988, and Signal itself has
not manufactured the item since it purchased Innowave in 1993.
This argument is untimely. Innowave was listed in the
solicitation as an approved source. Thus, if Associated believed
that Innowave should not be considered approved due to its years
of inactivity, it was required to protest on this basis prior to
the closing time for receipt of proposals. See 4 C.F.R. §
21.2(a)(1) (2003). (Associated
Aircraft Manufacturing & Sales, Inc., B-293529, March 22,
2004) (pdf) |
