Link: GAO Decision
Protestor: Unitron LP
Agency: Naval Air Systems Command
Disposition: Protest Denied.
Sole-source award of a follow-on contract for highly specialized equipment is unobjectionable where the agency reasonably determined that award to any other source would likely cause unacceptable delays in fulfilling the agency’s requirements.
General Counsel PC Highlight:
Unitron LP protested the proposed award to Aviation Ground Equipment Corporation (AGE) of a sole-source contract for up to forty Static Frequency Converters (SFCs), used to supply electrical power to aircraft during ground maintenance operations. In 2006, AGE was awarded a contract for the design, development, and manufacture of up to 369 mobile SFCs. After the expiration of this contract, the agency determined that it needed up to forty more SFCs. The agency published a synopsis under the authority of FAR § 6.302-1, indicating its intent to negotiate on a noncompetitive basis with AGE as the only responsible source capable of producing the sole product which would satisfy the agency’s needs. Unitron responded to the synopsis, stating that its commercially available SFC could be modified to suit the agency’s needs.
The GAO found that the agency had reasonably determined that acquisition from any source other than AGE would likely cause unacceptable delays. Given that the SFCs are specially modified items used to power military aircraft in harsh environments, and Unitron offered no support for its view that such items are other than highly specialized equipment, the GAO had no basis to question the agency’s determination. Because Unitron offered no facts or rationale for its view that the level of testing previously found necessary for this type of equipment was overstated, the GAO found no reason to question the agency’s estimates regarding First Article testing requirements. The GAO pointed out that, although Unitron indicated it could deliver all 40 units within 15 months, this did not account for the additional time required to compete and award the contract.
Although government procurements are generally supposed to be obtained using competitive procedures, there are several exceptions to this requirement. Follow-on contracts for the production of highly specialized equipment, such as the SFCs in this protest, may be sole-sourced from the original source where the agency determines competition would result in unacceptable delays or that award to a new source would result in substantial duplication of costs. Although companies precluded from competing for the award may protest the intent to sole-source, the GAO will generally defer to the agency’s decision so long as it is adequately supported by a Justification and Approval document (J&A).