A Legal View: What are rules when compatibility is limited?

A company executive raised the following topic: Now that the Federal Information Resources Management Regulation (FIRMR) is gone, what are the rules on compatibility-limited acquisitions?

In most cases, when an agency issues a procurement for information technology products, it will include requirements that the products must be compatible with an installed base of hardware and/or software in use.

The requirements inherently limit competition and may have to be justified under the Competition in Contracting Act of 1984.

Before Aug. 8, 1996, the FIRMR required agencies to justify compatibility-limited requirements under specified criteria. With the passage of the Information Technology Management Reform Act (ITMRA), those portions of the FIRMR were repealed. However, similar requirements are inherent in the Competition in Contracting Act, which still applies with equal force, as seen in many General Accounting Office decisions.

Under the FIRMR, an agency could specify a compatibility requirement only under the following circumstances:

The agency was adding resources to or replacing a portion of an installed base of resources and determined that replacing additional portions of the installed base to avoid the compatibility requirements was not advantageous.

The agency determined that the risk and impact of a conversion failure on mission-critical needs would be so great that acquiring incompatible resources was not a feasible alternative. [FIRMR 201-20.103-4. See Federal Systems Group Inc., GSBCA No. 10551-P, 90-3 BCA 22,960 (applying the rule).]

Similar factors are seen in the GAO cases. For example, in Building Systems Contractors Inc. [B-266180, Jan. 23, 1996, 96-1 CPD : 18], the protester challenged a procurement of a computerized energy management control system (EMCS) for a government building because a requirement for compatibility with equipment already installed in another building would restrict competition. In response, the agency provided a written justification which argued that a direct interface between the two systems, based on a proprietary communication protocol, would allow the agency to gain various efficiencies and substantially lower life-cycle costs.

According to the agency, establishing a duplicate EMCS system in the two buildings would be less efficient and more costly because of the need for additional personnel to operate separate systems and the possible loss of energy and maintenance savings to be derived from centralized management. GAO denied the protest.

When a compatibility requirement limits competition to one brand, the agency must execute a justification and approval (J& A) to support the sole-source requirement. See Digital Controls Corp. [B-255041.2, March 28, 1994, 94-1 CPD : 219], in which the sole-source acquisition of mainframe computer system channel switches was properly justified by the need to interface with existing switches.

An unjustified requirement will not be allowed to stand. In Hewlett-Packard Co. [69 Comp. Gen. 750, 90-2 CPD : 258 (1990)], GAO sustained a protest against a requirement for a DR11-compatible high-speed parallel port in a signal processor acquisition because the agency had failed to justify the requirement. According to GAO, the agency's need for a dedicated, high-speed, output-only port did not translate into a requirement for DR11 compatibility where an IEEE-488 port also could meet that requirement.

In an attempt to maximize competition, agencies sometimes address the compatibility issue by giving offerors the option of replacing a current system with that of a different manufacturer in addition to the option of extending the current system with compatible equipment. In such cases, GAO generally has found that any resulting advantage to companies offering to extend the current system is not unfair.

Regardless of the approach taken by the agency, a failure to treat the offerors fairly will not be countenanced. For example, in Allied Signal Inc. [B-275032, Jan. 17, 1997, 97-1 CPD : 136], GAO sustained a protest because offerors had different interpretations of a solicitation requirement for backward compatibility with existing computer terminals. Because of the differing interpretations, according to GAO, the competition was not conducted on an equal basis.

Clearly, compatibility requirements still present important issues notwithstanding the demise of the FIRMR.

-- Peckinpaugh is a member of the government contracts section of the law firm Winston&Strawn, Washington, D.C.


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