Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Protest challenging agency’s justification and approval for the sole source modification of a contract on an urgency basis for upgraded counter improvised explosive device electronic warfare systems is denied, where agency reasonably determined from market research and testing that only the contract holder could meet its urgent requirements.
General Counsel P.C. Highlight:
The protester contends that the modification violates the competition requirements of the Competition in Contracting Act of 1984 (CICA). The protester challenges the Army’s J&A for the noncompetitive modification of SRCTec’s contract to provide for the order of upgraded Duke ECM V(3) devices. Pegasus contends that, had the agency disclosed its requirements earlier, Pegaus would have had time to develop a system that satisfies the Army’s urgent requirements here. GAO states that CICA requires “full and open competition” in government procurements except where otherwise specifically allowed by the statute. One exception to this competition requirement is where the agency’s needs are of such an unusual and compelling urgency that the United States would be seriously injured if the agency is not permitted to limit the number of sources from which it solicits bids or proposals. Although the agency must request offers from as many sources as practicable under the circumstances, the agency may still limit the procurement to the only firm it reasonably believes can properly perform the work in the available time. If noncompetitive procedures are used pursuant to 10 U.S.C. sect. 2304(c)(2), such as here, the agency is required to execute a written J&A with sufficient facts and rationale to support the use of the specific authority. GAO’s review of the agency’s decision to conduct a noncompetitive procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A. However, noncompetitive procedures may not properly be used where the agency created the urgent need through a lack of advanced planning. In addition, the urgency justification cannot support the procurement of more than the minimum quantity needed to satisfy the immediate urgent requirement. Military mission readiness and personal safety are important considerations in judging the reasonableness of an agency’s determination that unusual and compelling urgency prevents the agency from conducting a procurement on the basis of full and open competition, as provided for by CICA. It is beyond cavil that an agency need not risk injury to personnel or property in order to conduct a competitive acquisition.
Here, from a review of the agency’s J&A and the record, GAO finds reasonable the agency’s determination that only SRCTec could meet the agency’s urgent requirements within the time required. The record specifically supports the Army’s arguments that it has a continuing and urgent need to address the use of more sophisticated IEDs on other frequency bands to protect its personnel and property. In this regard, SRCTec’s contract here and the Navy’s Spiral 3.2 contract reflect the need to continually evolve and upgrade CREW systems to counter the threat of radio-controlled IEDs in other frequencies. Moreover, as the GAO attorney noted to the parties in the ADR conference in Pegasus’s earlier protest, upgrading SRCTec’s Duke ECM system was within the scope of SRCTec’s contract, but for the fact that the upgrade was accomplished by a contract modification that exceeded the contract’s maximum ceiling value.
Pegasus argues, however, that the lack of competition to satisfy these requirements was caused by the agency’s lack of advance procurement planning. Pegasus advances a variety of arguments in support of this assertion, including that the Army improperly modified SRCTec’s contract to obtain the upgraded systems rather than seeking to test other firms’ products, such as Pegasus’s Jukebox Alpha and Jukebox Alpha Upgrade systems. In this regard, Pegasus continues to complain that SRCTec had an unfair “headstart” because of the agency’s earlier modification of that firm’s contract to obtain SRCTec’s upgraded system.
Although an agency may not justify a noncompetitive award on the basis of urgency where the agency’s urgent requirements are the result of a lack of advance planning, such planning need not be entirely error-free or successful. Here, the record shows that the Army’s procurement planning was not error-free, given the agency’s improper modification of SRCTec’s contract that exceeded the maximum contract value. Nevertheless, GAO does not find unreasonable the agency’s conclusion that only SRCTec could satisfy the agency’s urgent requirement, nor does GAO find that Pegasus has shown that it could have satisfied the agency’s requirements, even if the agency had conducted error-free advance planning, given the agency’s estimate of the time that would be required for Pegasus to develop a device that would meets the agency’s requirements. The protest is denied.