Washington Business Journal by Lee Dougherty, Attorney, General Counsel PC

Date: Friday, November 11, 2011, 9:55am EST

 Full and open competition is important, but so is a solid industrial base. Given that, federal agencies can flow dollars to specific contractors to ensure access to fair-priced goods in the long term.

Protesting contractor: Outdoor Venture Corp., Sterns, Ky.

Contracting agency: Defense Logistics Agency

Protest issue: Whether DLA was fair in its award of a sole-source contract.

GAO decision, October 25, 2011: Denied.

Post-mortem: Where a military agency makes a sole-source award for the purpose of maintaining a particular supplier, competition is secondary to the agency’s needs. This is but one exception to the requirement for full and open competition, highlighting recognition by Congress that — at times — competition is not effective for meeting the requirements of the government.

Here’s the rationale: In order to maintain the ability to produce required items in times of emergency there must be an industrial capacity. What that means in practice is that those manufacturers identified are all given a little slice, but none ever get to take home the whole pie. The agency is required to publish justifications and approval when it determines that a sole-source award is necessary and — provided that the agency does not abuse its discretion — the Government Accountability Office will not sustain a protest.

That’s what happened in this case. OVC protested the sole source award for tents to Camel Manufacturing, arguing that it too was in need of the award to maintain its domestic capacity and therefore should have either been awarded the sole-source award or allowed to compete. But the DLA, which first justified sole-source awards for tents in 2007, due to the limited number of suppliers, determined that Camel was in greater need at the time of the award. GAO agreed.