Source: http://www.wifcon.com/pd6_303.htm
Timestamp: 2017-09-24 10:11:57
Document Index: 437161805

Matched Legal Cases: ['§ 3301', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 2492', '§ 2492', '§ 2304', 'art 6', '§ 2304', '§ 2304', '§ 6', '§ 3301', '§ 3304', '§ 3301', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3301', '§ 1535', 'art 17', '§ 501', '§ 403', '§ 403', '§ 403', '§ 501', '§ 706', '§ 1491', '§ 706', '§ 3304', '§ 3301', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', '§ 3304', 'art 17', 'art 17', 'art 17', '§ 2304', '§ 2304', '§ 2304', 'art 10', 'art 10', 'art 10', 'art 10', 'art 10', '§ 5', 'art 5', 'art 5', '§ 6', '§ 6']

FAR 6.303: Justifications
We see nothing unreasonable or misleading in the agency’s statement of its requirement. Pursuant to the 2008 BAA, DARPA has invested substantially in the research and development of the LRASM technologies proposed by Lockheed in its response to the 2008 BAA. Related to this effort, DARPA has now identified a need to devote additional resources in order to complete the maturation of Lockheed’s specific LRASM technologies. We view this need, as identified in DARPA’s sole-source notice and J&A, as reasonable and within DARPA’s broad discretion as the DOD agency tasked with developing new technologies, without regard to whether the Navy, or DOD, has an operational requirement for similar capabilities in this area. (Raytheon Company and Kongsberg Defence & Aerospace AS, B-409615, B-409615.2: Jun 24, 2014) (pdf)
As a preliminary matter, USDA argues that the Coulson and Minden protests should be dismissed because these protesters are not interested parties. Specifically, the agency contends that Coulson and Minden did not have additional large airtankers available at the time the J&A was signed that would be capable of performing the requirements of the Neptune sole-source contract (which has an April 28, 2014, start date).[31] The USDA contends, citing to our decision in Merlin Int’l, Inc., B-310611, Jan. 2, 2008, 2008 CPD ¶ 66, that a protester is not an interested party to challenge a sole-source award unless it can meet all of the agency’s requirements at the time of the sole-source determination.
Coulson and Minden respond that they are interested parties to protest here because they have a direct economic interest that would be affected by the award of a sole-source contract to Neptune. Coulson points to the fact that in October 2013 it offered to provide the Forest Service with two additional large airtankers under the NextGen contract, and argues it would be available and ready to perform by an April 28, 2014, start date (as established by the contract awarded to Neptune). Coulson Protest, Dec. 20, 2013, at 7-8; Coulson Protest, Feb. 10, 2014, at 4. Likewise, Minden states that it owns a second aircraft (BAe-146) that it is converting into an airtanker, and would be able to submit a proposal should the Forest Service conduct another competitive procurement. Minden Protest, Feb. 10, 2014, at 2-3. Both Coulson and Minden also point to the fact that the sole-source award to Neptune makes it less likely that the Forest Service would execute airtanker options under the competitively-awarded NextGen contract.
The protesters contend that the sole-source award to Neptune was improper, insofar as the agency promised to enter into the contract in exchange for Neptune withdrawing its protests of the NextGen contract awards. In this regard, the protesters claim that the agency’s actions have been motivated by the desire to fulfill the terms of a settlement agreement and to avoid a lawsuit by Neptune for allegedly breaching that agreement. The protesters argue that the agency “put the cart before the horse,” and agreed to settle Neptune’s protest before properly determining that the promised sole-source award complied with CICA. Coulson Protest, Feb. 10, 2014, at 55. The protesters also point to the fact that the only legitimate financial analysis conducted (the analysis by FI) demonstrated that Neptune did not require a sole-source contract to remain viable, as recognized by the agency’s SPE, who refused to approve the J&A. 10 Tanker Protest, Feb. 10, 2014, at 120-35.
The USDA does not dispute that its consideration of a noncompetitive award to Neptune was motivated by its promise of a sole-source contract in exchange for Neptune withdrawing its bid protest and thereby ending the CICA stay that then precluded the Forest Service from fielding NextGen large airtankers for the 2013 fire season. See AR, Jan. 31, 2014, at 55. Nevertheless, USDA argues that it did not act improperly because the sole-source award complied with all applicable procurement statutes and regulations. Id. at 55‑56.
A settlement agreement promising award of a contract on a sole-source basis in exchange for abandoning ongoing litigation, such as a bid protest, is not a permissible basis for restricting competition and excluding potential offerors. Earth Prop. Servs., Inc., B-237742, Mar. 14, 1990, 90-1 CPD ¶ 273 at 4-5, aff’d, B-237742.2, June 11, 1990, 90-1 CPD ¶ 546; Techplan Corp., B-234161, May 12, 1989, 89-1 CPD ¶ 452 at 5. For example, our Office upheld a protest of a sole‑source award where an agency justified its failure to conduct a full and open competition on the basis that it had entered a settlement agreement promising the award of a contract in exchange for abandoning a threatened contract claim. Earth Prop. Servs., Inc., supra. Quite simply, the existence of a settlement agreement does not permit a contracting agency to act in ways not otherwise permitted by applicable statutes and regulations. Id. at 5; see York Int’l Corp., B-244748, Sept. 30, 1991, 91-2 CPD ¶ 282 at 4-5 (settlement agreements will not be enforceable if they fail to comply with applicable statutes and regulations).
As detailed below, the Forest Service entered into a settlement agreement with Neptune on the basis that the award of a sole-source, NextGen-type contract was necessary to maintain Neptune as a vital source of large airtankers. The independent financial analysis subsequently performed by FI on behalf of USDA concluded that Neptune did not require the award of a sole-source contract to remain financially viable. Nothing in the record refutes FI’s conclusions, nor is there any evidence to suggest that Neptune intends to go out of business now merely because its future prospects appear uncertain. In sum, while the agency may not have entered into a settlement agreement promising to disregard applicable procurement statutes and regulations, the agency’s subsequent decision to award a sole-source contract to Neptune so as to comply with the terms of the settlement agreement and avoid a Neptune-threatened lawsuit was without a reasonable basis.
Sole-Source Award Justification
As set forth above, agencies are generally required to conduct procurements using procedures designed to obtain full and open competition. 41 U.S.C. § 3301(a)(1); FAR § 6.101. One exception to this requirement is where an agency determines that it is necessary to maintain a vital source of supply for industrial mobilization. In relevant part, the FAR states as follows:
(2) Full and open competition need not to be provided for when it is necessary to award the contract to a particular source or sources in order--
(i) To maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency or to achieve industrial mobilization.
FAR § 6.302-3(a).
The protesters generally do not dispute that the Forest Service requires additional large airtankers to perform its firefighting mission. Rather, the protesters challenge the reasonableness of the agency’s determination that the sole-source contract here is necessary to maintain a vital source of supply. Specifically, the protesters argue that: (1) Neptune is not a vital supplier such that the large airtanker industrial base can be maintained without resorting to noncompetitive procurements; and (2) Neptune does not require a sole-source contract to remain a source of large airtankers.
In responding to the protests, the agency has acknowledged that it was initially concerned that Neptune would “immediately go out of business in during [sic] the 2013 fire season, leaving the Forest Service without any of the Legacy air tankers Neptune supplied under the contract awarded March 27, 2013.” Agency Post- Hearing Comments, Mar. 18, 2014, at 5. The agency admits, however, that ultimately it concluded there was no concern with Neptune’s present viability, but only with its viability after 2017. Id. at 6-7. Consequently, the agency argues, the J&A was not grounded on the agency’s belief that Neptune would immediately go out of business without a NextGen contract, but was based on its concern with Neptune’s continued availability as a large airtanker supplier after 2017 when its Legacy contract expired. AR, Feb. 19, 2014, at 3-7. However, changing its focus during the course of the protests, the agency has also argued that its actual concern is whether it could obtain sufficient NextGen airtankers for the 2014 fire season. See Agency Post-Hearing Comments, Mar. 18, 2014, at 9-10, 21; see also Tr. at 657-693. In this regard, the agency maintains that it cannot tolerate any further delay in acquiring additional NextGen airtankers for the 2014 fire season. Agency Post-Hearing Comments, Mar. 18, 2014, at 28. The Forest Service contends that this immediate need for additional NextGen airtankers provided it with “an industrial mobilization need in December 2013” when it decided to award Neptune a sole‑source, 9-year contract for NextGen airtanker services. Id. at 32.
Based upon on our review of the record, including the J&A, its supporting documentation, the agency’s submissions in response to these protests, and the testimony of the agency’s representatives at the hearing held at our Office, the agency has failed to demonstrate that Neptune requires a sole-source contract to remain a source of large airtanker services for the Forest Service. Although the J&A documents the agency’s belief that Neptune is, presently, a vital supplier of large airtanker services under Neptune’s Legacy contract,[35] the J&A is devoid of evidence or analysis supporting the need to provide Neptune with a sole-source award for the firm to remain a viable source of supply. Rather, the record demonstrates, as acknowledged by the agency, that Neptune is presently financially viable and is expected to remain financially viable through the term of its Legacy airtanker contract (2017). Moreover, apart from Neptune’s own unsupported statements and the anecdotal views of various agency officials, the record contains no analysis or evidence of Neptune’s financial condition after 2017.
As detailed above, the agency had two financial analyses of Neptune conducted after the company alleged it would go out of business without a NextGen contract award. First, RUS’s conclusion, that Neptune needed a NextGen contract to remain viable, was based entirely on unverified financial projections as provided by Neptune. By contrast, the second analysis conducted by FI--which did not simply accept Neptune’s projections--found that Neptune’s revenue projections were inconsistent with the terms of the Legacy contract, that Neptune’s expected costs were lower than the company had itself projected, and that Neptune did not require a NextGen contract to remain viable through the term of the Legacy contract. At no time before the J&A was approved were FI’s conclusions disputed or shown to be in error. Moreover, while FI’s conclusions were limited to the period through 2017, at no time did the agency conduct any other analysis to determine Neptune’s financial viability after 2017. Tr. at 735; Agency Post-Hearing Comments, Mar. 18, 2014, at 7. Accordingly, while the agency contends that the J&A did not rely on the FI financial analysis to assess Neptune’s long-term viability, neither did the agency rely on any other information when making such an assessment. In fact, there is simply no record--in the J&A or otherwise--of any assessment by the agency of Neptune’s long-term viability.
We find it both premature and unreasonable for USDA to determine that Neptune requires a sole-source contract now in order to maintain Neptune as a source of large airtanker services after 2017. In addition to its current Legacy contract (including options for more airtankers being placed under the Legacy contract), Neptune is not precluded from competing on work--Forest Service or otherwise--in the coming years. The record also reflects that the NextGen contracts represent the primary, but not only, means by which the Forest Service plans to meet its modernization strategy goal of 18-28 modern large airtankers. In fact, the ASA testified that the agency plans to conduct additional competitions in the coming years under which Neptune is eligible to compete and could receive awards. Tr. at 735-36. Moreover, given the contract options available to the Forest Service under the competitively-awarded NextGen contracts, Neptune may no longer represent a vital source that must be maintained by the Forest Service after 2017. While agencies have authority to make noncompetitive awards when necessary to maintain vital sources, they do not have authority to make noncompetitive awards merely because an offeror is unsuccessful in a competitively-conducted procurement, or because such action was promised in a settlement agreement. See York Int’l Corp., supra; Department of the Army--Recon., B-237742.2, June 11, 1990, 90-1 CPD ¶ 546.
Accordingly, while the J&A may demonstrate that the Forest Service needs more large airtanker services than it currently has under contract, the J&A completely fails to demonstrate that Neptune must be the supplier of such services or that Neptune currently requires a 9-year sole-source contract to keep it in business as a vital supplier for the agency’s post-2017 needs. Just as an agency is not permitted to make a noncompetitive award that exceeds the size or duration of an identified urgency, see FAR § 6.302-2(d), an agency is also not permitted to make a noncompetitive award for industrial mobilization reasons where, as here, there has been no showing that the award is presently necessary to maintain a supplier even if deemed vital. NI Indus., Inc., Vernon Div., supra. Neptune would undoubtedly prefer the financial security that would accompany a long-term NextGen contract, but this is simply not the standard by which an agency is permitted to make a noncompetitive award for industrial mobilization purposes. See FAR § 6.302-3.
Inaccuracies in J&A
As a final matter, in addition to the fundamental lack of support for the J&A’s premise that Neptune now requires a 9-year sole-source contract in order to maintain the firm in the future as a vital supplier of aircraft, the record reflects that the J&A was premised on materially inaccurate information. As stated above, our review of an agency’s decision to conduct a noncompetitive procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A. The adequacy of the rationale and conclusions set forth in the J&A is dependent on the completeness and accuracy of the information included in the J&A. See Sabreliner Corp., supra. We find the J&A to be incomplete and inaccurate in certain key regards.
FAR § 6.303-2 identifies information required for an agency’s justification of a noncompetitive procurement, stating, among other things, that the J&A “shall include . . . [a] description of the supplies or services required to meet the agency’s needs (including the estimated value),” “[a] demonstration that the . . . nature of the acquisition requires use of the authority cited,” and “[a] description of the market research conducted . . . and the results or a statement of the reason market research was not conducted.” FAR § 6.303-2(b)(3), (5), (8). Here, the Forest Service’s description in its J&A of its noncompetitive requirements, as well as its consideration of alternative sources of supply, is inaccurate.
Specifically, the J&A describes the services to be provided by Neptune as two NextGen large airtankers for up to 9 years, at a total estimated value of $141 million. AR, Tab 49, J&A, Dec. 9, 2013, at 1. The record shows, however, that the contract subsequently awarded to Neptune included the option of five additional large airtankers, for up to 9 years each, at a total estimated value of approximately $496 million--more than three times greater than what was approved. See AR, Tab 54, Contract No. AG-024B-C-14-9000, at B-1. Thus, the agency’s J&A inaccurately described the services to be obtained from Neptune on a noncompetitive basis. This is significant because where, as here, an agency proposes to award a sole-source contract under the industrial mobilization exception to the general competition requirements, the amount being ordered must meet--not exceed--the objectives of this authority. See FAR § 6.302‑3(b)(iii) (when the quantity required is substantially larger than the quantity that must be awarded in order to meet the objectives of this authority, that portion not required to meet such objectives will be acquired by providing for full and open competition); Honorable Dan Burton, B-265884, Nov. 7, 1995, 1995 U.S. Comp. Gen. LEXIS 735 at *12. Alternatively, if the J&A was accurate here, then the contract awarded to Neptune impermissibly exceeded what the ASA had approved.
Similarly, when considering alternative sources and the market research regarding such sources, the J&A states that “[t]here are no certified [large airtankers] currently available that aren’t already under contract with the Forest Service. Aircraft capable of meeting these standards and requirements are not readily available and would take a considerable amount of time to be developed and operationally ready for service.” AR, Tab 49, J&A, Dec. 9, 2013, at 4. This statement is also factually inaccurate insofar as 10 Tanker had a certified large airtanker currently available, which the Forest Service actually contracted for in 2013. The J&A also failed to consider the additional large airtankers that Coulson had offered to make available to the Forest Service. The fact that the J&A was inaccurate with regard to alternative sources is also important because where, as here, an agency proposes to award a sole-source contract premised on the vital nature of a supplier, it must accurately consider whether the industrial base can be maintained without resorting to noncompetitive procurements. While the agency argues the fact that other contractors may have airtankers available to perform Neptune’s contract to be irrelevant here, AR, Jan. 31, 2014, at 52, we fail to see how the agency can reasonably find Neptune to be a vital source without accurately considering all sources. See FAR § 6.302-3; see also Lance Ordnance Co. Inc.; Martin Elecs., Inc., B-246849, B-246952, Mar. 31, 1992, 92-2 CPD ¶ 29 at 3-4. (Coulson Aviation (USA) Inc.; 10 Tanker Air Carrier, LLC; Minden Air Corp., B-409356.2, B-409356.3, B-409356.4, B-409356.5, B-409356.6: Mar 31, 2014)
Among the reasons identified by the Navy for its decision to issue a sole-source contract to DIT-MCO is the fact that its existing AWAs (which are manufactured by DIT-MCO) use software that is proprietary to DIT-MCO. The agency’s J&A explains that the upgraded AWA, if purchased from DIT-MCO, will maintain commonality and compatibility with the agency’s other AWAs. Additionally, the agency’s J&A explains that the aircraft’s original equipment manufacturer (OEM), Northrup Grumman Corporation, uses a DIT-MCO proprietary software known as test assistance II (TA2) software for purposes of generating test programs. The agency’s J&A explains that procuring a DIT-MCO AWA allows the agency to standardize design information exchange between the agency’s engineers and the OEM, and also allows the agency to use the OEM’s existing data and test programs; the upgraded AWA will be able to utilize all legacy test programs previously written for the agency. AR, exh. 1, Agency J&A, at 2-3.
The Navy’s J&A also notes that the agency has developed a host of customized applications and utilities that were developed around the unique hardware and software architecture of the DIT-MCO AWA, and that these customized tools will not be compatible with another manufacturer’s AWA. The agency estimate of the cost of duplicating these customized tools was an added consideration in deciding to procure an AWA upgrade on a sole-source basis from DIT-MCO. AR, exh. 1, Agency J&A, at 2.
The Navy’s J&A goes on to explain that, in order for other manufacturers to be able to provide an AWA that is interoperable with the agency’s existing hardware and software, it would be necessary for them to develop software patches and use additional hardware in order to communicate with the aircraft’s software. In that connection, the agency’s J&A specifically notes that the agency previously had awarded Eclypse a contract for an AWA, but that the AWA that was provided was not compatible with the agency’s existing AWAs software. AR, exh. 1, Agency J&A, at 3.
Eclypse asserts that it has a software conversion tool that will allow it to easily make its AWA compatible with the agency’s existing systems. However, in response to Eclypse’s allegation, the agency’s engineer explains that the Navy based its decision to procure the AWA on a sole-source basis from DIT-MCO, in part, because of personal knowledge of problems associated with the Eclypse software’s compatibility that arose under the earlier contract awarded to Eclypse.[2] AR exh. 7, Declaration of the Agency’s Engineer, at 3. The agency’s engineer goes on to explain that Eclypse’s software conversion tool is only semi-automatic and requires manual intervention for any software conversion or development effort, such that it requires manual input of much of the necessary data, and that this process would have to be performed by agency personnel. Id. at 4-5.
We conclude that the Navy’s concerns associated with software compatibility and commonality among its AWAs provide a reasonable basis for its decision to award the contract on a sole-source basis. We also conclude that the agency’s concern with maintaining that compatibility and commonality with the aircraft’s OEM provides further support for the agency’s decision. While Eclypse disagrees with the agency’s position, and contends that it has what it characterizes as a straightforward conversion solution, the record supports the agency’s reservations with Eclypse’s conversion approach based on its actual experience. In addition, the record shows that the agency also would have to expend significant funds in order to recreate the custom tools it has developed in-house that function with the DIT-MCO AWA; Eclypse has not rebutted this conclusion on the part of the agency. (Eclypse International Corporation B-408795, Nov 25, 2013) (pdf)
The protester argues that when the Air Force transferred the operation of mission essential food services at Barksdale AFB and Dyess AFB to the [Air Force Mission Essential Feeding Fund] AFMEFF, it was required to do so through a competitive procurement process under CICA, and, having failed to obtain competition, the Air Force’s transfer of this requirement to the [Nonappropriated Fund Instrumentality] NAFI essentially constituted an improper sole-source award in violation of CICA. The Air Force maintains that it has special authority under 10 U.S.C. § 2492 (2006) to obtain the services in question from the AFMEFF through a MOA, and that, as a consequence, CICA was inapplicable. As explained below, we conclude that section 2492 does not provide authority for the Air Force to transfer the provision of mission essential food services to a NAFI. By its terms, section 2492 limits such agreements to those in support of morale, welfare, and recreation (MWR). Because mission essential food services--supported entirely with appropriated funds--are not within the [Morale, Welfare, and Recreation] MWR system, the transfer of such requirements to AFMEFF without obtaining competition, or justifying an award to the NAFI on a sole-source basis, was in contravention of CICA and FAR.
The statutory provision upon which the Air Force relies, 10 U.S.C. § 2492, provides as follows:
As an initial matter, we note that Air Force does not appear to take the position that the mission essential food services, which are at issue in this case, fall within the ambit of the MWR system. We specifically asked the Air Force to address this point and, instead, it provided a rather lengthy discussion of how the FTI program operates, and the advantages and efficiencies to be achieved through the consolidation of these programs. We take the Air Force’s non-answer in this regard to be an implicit recognition that such requirements do not fall within the MWR system. In any event, to the extent the Air Force’s own characterization of the requirements as “mission essential” does not settle the point, the conclusion that these services do not fall within the MWR system is inescapable, where they are paid for entirely with appropriated funds, there is no indication that they have ever previously been considered to fall within the MWR system, and they do not fit within any reasonable understanding of the DoD’s definition of Class C MWR food services activities.
Since mission essential food services do not fall within the MWR system, it appears that the Air Force has taken the position that section 2492 gives it the authority to consolidate management and accounting for its mission essential and non-mission essential MWR food serving operations so long as consolidation will benefit the efficient management and operation of its MWR food operations. See Agency Response to GAO Questions, July 18, 2012, at 2. Thus, the agency’s argument, as we understand it, is that section 2492 authorizes the AFMEF, a NAFI, to provide mission essential feeding services to the Air Force because it is of benefit to the MWR system for the Air Force to acquire both operation of essential food service facilities and operation of non-essential food services facilities (such as officers’ clubs) from the same contractor.
We do not find this to be a reasonable reading of the statute. While section 2492 authorizes a NAFI such as the AFMEFF to enter into an agreement with the Air Force to provide services beneficial to the efficient management and operation of the MWR system, there is nothing to suggest that it authorizes an agreement between the NAFI and the Air Force for the provision of mission essential services on the theory that consolidating such activities under the MWR system may provide a benefit the MWR system. Such an application would constitute a radical departure from the general understanding that DoD NAFIs are established to engage in MWR related activities. See DoD Instruction 1015.15, supra (stating that “NAFIs shall be established for military morale, welfare, and recreation (MWR) programs”). We also find the Air Force’s interpretation particularly strained in this instance where, by all reasonable measures, the value of the mission essential services to be provided by the NAFI under its agreement with the Air Force substantially exceeds the value of any non-mission essential food (i.e., MWR-related) services, which are the traditional bailiwick of NAFIs and to which section 2492 is expressly directed. See, e.g., AR, Tab 26, RFQ F41999-10-Q-0495, Portfolio I, FTI Schedule of Services (reflecting that historical usage associated with mission essential food services at airbases has been much greater than MWR, NAFI operated food activities).
Without authority under section 2492, the only way that the Air Force could have properly transferred appropriated funds to the NAFI for the provision of mission essential food services would have been through a competitive procurement process. In this regard, although NAFIs are considered to be instrumentalities of the United States government, obtaining services from a NAFI is “tantamount to obtaining services from nongovernment commercial sources”; therefore, NAFIs are required to compete to provide goods or services to agencies through the usual procurement process mandated by CICA, and implemented in the FAR. See University Research Corp., B-228895, Dec. 29, 1987, 87-2 CPD ¶ 636 at 5-6.
Thus, before restricting competition for the mission essential food services to a single source (i.e., the AFMEFF), the Air Force was required to comply with statutory requirements pertaining to competition, including preparing a Justification & Approval (J&A) for the use of other than competitive procedures and publishing notice of its intention to use other than competitive procedures on the FedBizOpps website. 10 U.S.C. § 2304(f)(1); FAR Subpart 6.3. Because the Air Force failed to comply with these mandates, we sustain Asiel’s protest. (Asiel Enterprises, Inc., B-406780, B-406836, Aug 28, 2012) (pdf)
As indicated above, the FAR requires the public interest exception be justified by a D&F that "set[s] forth enough facts and circumstances to clearly and convincingly justify the specific determination made." FAR sect. 1.704. Our review of an agency's invocation of the public interest exception is based on this regulatory requirement implementing CICA's public interest exception. In this regard, we note that the Court of Federal Claims has reviewed the invocation of the public interest exception on this basis. See Spherix v. United States, 58 Fed. Cl. 514, 515 (2003); Spherix v. United States, 58 Fed. Cl. 351, 358 (2003). Our review of a D&F issued by an agency in support of the public interest exception to full and open competition addresses whether the D&F provides, on its face, a clear and convincing justification that the restricted competition furthers the public interest identified. We will consider a protester's arguments that the D&F relies on facts that have no relation to the stated public interest, or that the D&F relies on materially inaccurate information. We will not, however, sustain a protest based on the protester's mere disagreement with the conclusions set forth in the D&F. See Raytheon Co.–Integrated Def. Sys., B-400610 et al., Dec. 22, 2008, 2009 CPD para. 8 at 6.
Here, Sikorsky does not challenge the D&F's identification of the public interest furthered by the limited competition, i.e., the requirement to support the development of the Afghanistan Air Force and its need for a multipurpose helicopter. AR, Tab 21, D&F, at 1-2. Instead, the protester argues that the facts set forth in the D&F do not support the Acting Secretary of the Navy's conclusion that limiting the competition to the Mi-17 is necessary to meet the identified public interest. Specifically, the protester argues that the facts set forth in the D&F concerning the training requirements associated with providing other than Mi-17 helicopters, and the performance requirements of the Mi-17 with regard to altitude do not support the D&F. For the reasons discussed below, we conclude that Sikorsky does not demonstrate that the D&F was defective.
(Sikorsky Aircraft Corporation, B-403471; B-403471.3, November 5, 2010) (pdf)
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. See 10 U.S.C. sect. 2304(f)(1)(A), (B); FAR sections 6.302-1(d)(1), 6.302-2(c)(1), 6.303, 6.304. Our 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. Signals & Sys, Inc., B-288107, Sept. 21, 2001, 2001 CPD para. 168 at 9. However, noncompetitive procedures may not properly be used where the agency created the urgent need through a lack of advanced planning. 10 U.S.C. sect. 2304(f)(5)(A); Worldwide Language Resources, Inc.; SOS Int'l Ltd., B-296984 et al., Nov. 14, 2005, 2005 CPD para. 206 at 12. In addition, the urgency justification cannot support the procurement of more than the minimum quantity needed to satisfy the immediate urgent requirement. See Immunalysis/Diagnostixx of Calif. Corp., B‑254386, Dec. 8, 1993, 93-2 CPD para. 309 at 5.
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. See McGregor Mfg. Corp., B-285341, Aug. 18, 2000, 2000 CPD para. 151 at 7; Logics, Inc., B‑256171, May 19, 1994, 94-1 CPD para. 314 at 2. It is beyond cavil that an agency need not risk injury to personnel or property in order to conduct a competitive acquisition. Signals & Sys, Inc., supra, at 10.
Here, from our review of the agency's J&A and the record, we find 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. See Improvised Explosive Devices (IEDS) in Iraq and Afghanistan: Effects and Countermeasures, CRS Report for Congress, supra, at 1; Declaration of CREW Product Manager, Jan. 8, 2009, at 1. 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, as we note above, 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, see 10 U.S.C. sect. 2304(f)(4)(A), such planning need not be entirely error-free or successful. See Sprint Commc'ns Co., L.P., B-262003.2, Jan. 25, 1996, 96-1 CPD sect. 24 at 8-9. 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, we do not find unreasonable, as explained below, the agency's conclusion that only SRCTec could satisfy the agency's urgent requirement, nor do we 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.
As a result of market research and testing of Pegasus's device in December 2008, the Army found that Pegasus did not have a device that would satisfy the agency's technical requirements. In fact, the Army found that Pegasus's Jukebox Alpha Upgrade device could not counter most of the threat bands that the Army required and that Pegasus's device otherwise failed to satisfy [deleted]. The agency concluded, given the time that would be required to develop a system to satisfy these requirements and the time needed to test an upgraded device, that the earliest that Pegasus could field a system meeting the agency's current requirements would be February 2010. In this regard, Pegasus has not shown, even 3 months after the agency's testing of the firm's device, that Pegasus has a product that would satisfy the agency's current urgent requirements.
Pegasus disagrees with the Army's assessment of how long it would take for Pegasus to develop a system, and states that within 6 months it could meet the agency's needs. See 2nd Declaration of Pegasus's Chief Operating Officer, at 2. Pegasus, however, has offered no testing data, or any other evidence, to support these assertions, and the chief operating officer's declaration is at best an admission that the firm needs additional time to provide these items. Pegasus's disagreement does not show that the agency's technical judgment was unreasonable. See Foster-Miller, Inc., B-296194.4, B-296194.5, Aug. 31, 2005, 2005 CPD para. 171 at 9. Moreover, the protester's admission that it would need 6 months to develop a device that would meet the agency's needs establishes that Pegasus cannot satisfy the agency's urgent requirements. Under these circumstances, we find reasonable the agency's urgency J&A supporting the modification of SRCTec's contract, and thus there is no basis to sustain the protest. (Pegasus Global Strategic Solutions, LLC, B-400422.3, March 24, 2009) (pdf)
Although the overriding mandate of the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. sect. 2304(a)(1)(A) (2000), is for full and open competition in government procurements, obtained through the use of competitive procedures, it permits noncompetitive acquisitions in certain circumstances. 10 U.S.C. sect. 2304(c). The agency’s J&A cites one of the exceptions to the mandate that competitive procedures be used, namely, that there is only one responsible source and no other supplies or services will satisfy the agency’s requirements. J&A, citing 10 U.S.C. sect. 2304(c)(1). The J&A must contain sufficient facts and rationale to support the use of the chosen exception. See 10 U.S.C. sect. 2304(f)(1)(A), (B); Federal Acquisition Regulation (FAR) sections 6.302-1(d)(1), 6.303, 6.304; Marconi Dynamics, Inc., B-252318, June 21, 1993, 93-1 CPD para. 475 at 5. Our review of the agency’s decision to conduct a sole-source procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A. When the J&A sets forth a reasonable justification for the agency’s actions, we will not object to the award. Global Solutions Network, Inc., B‑290107, June 11, 2002, 2002 CPD para. 98 at 6; Diversified Tech. and Servs. of Virginia, Inc., B‑282497, July 19, 1999, 99-2 CPD para. 16 at 3.
We conclude that the rationale advanced by the agency in the J&A--in essence, the critical benefits from weapon standardization--is sufficient to support the decision to procure the Glock pistol on a sole-source basis. Specifically, the agency asserts that prior wide use of the Glock pistol by the fighting forces mentioned above has created “a baseline of standardization of operations and support that is critical to be continued.” J&A at 1. Procuring more of the same pistol would lessen the logistical burden on the Pakistan Army, the agency states, in part by reducing the effort required for spare parts administration; retraining the various forces also would be unnecessary if the same pistol were procured.
In its challenge to the agency’s rationale, the protester points out that the J&A does not support a conclusion that the Pakistanis cannot effectively defend themselves if they procure a pistol other than the Glock that they use now. The protester also maintains that the disassembly and cleaning of the Glock and the proposed Smith & Wesson firearms are identical; that, given its worldwide popularity, there is no shortage of spare parts for the protester’s pistol; and that personnel are typically trained to service and repair or replace the parts for many different types of semi-automatic weapons. The protester also asserts that the difference between the trigger pulls of the two weapons--the protester’s pistol has a heavier trigger pull and a longer trigger travel--are at best minor distinctions that would have no impact on the war fighting capabilities of the Pakistani forces.
As an initial matter, to the extent that the protester argues that the J&A is inadequate because it does not show that the Glock pistol is indispensable to the forces who would use it, its argument is based on a flawed premise. As discussed above, the standard is not whether the item being procured is indispensable, or even whether the Glock performs better than the selected pistol, but whether the agency has offered sufficient facts and rationale to support the decision to procure it on a sole- source basis. The protester’s claim that many organizations with armed personnel train them on several different firearms is unpersuasive; what is at issue here is the level of training received by the Pakistani fighting forces and not, as in one example offered by the protester, the training regimen of metropolitan cities in this country. There is nothing in the record to suggest that the forces that would be supplied with a different pistol than the current Glock would easily adapt to a change in firearms.
It is undisputed that the parties using these weapons do so under extremely hazardous and unstable conditions. Under these circumstances, we conclude that the benefits to the fighting forces cited in the J&A from procuring the same pistol currently in use, such as avoiding the need for retraining on a different model or the need to stockpile spare parts for different models, are sufficient to support the agency’s decision to procure the pistols on a sole-source basis. (Smith & Wesson, Inc., B-400479, November 20, 2008) (pdf)
Turning to the July 2005 sole-source award to OSS for expansion of the BBA-SME requirement, we find that the agency’s J&A in support of the sole-source award to OSS was flawed because it was premised on the unsupported conclusion that OSS was the only contractor capable of meeting the BBA-SME requirement in a timely and cost-effective manner. We therefore sustain the protesters’ challenge to this second sole-source award as well. The July 2005 J&A, which nominally cited “unusual and compelling urgency” as the justification for the sole-source award to OSS, was in fact prepared based on the exception to full and open competition set forth in 10 U.S.C. sect. 2304(c)(1), which applies when the agency concludes that required services are only available from one responsible source. Specifically, the contracting officer testified with regard to the July J&A as follows: “I wrote this J&A, believing that I was going to use one responsible source. . . . I think the situation in Iraq is urgent, but it was written for [‘only] one responsible source’.” Tr. at 277. Moreover, the reasoning set forth in the J&A is consistent with the “only one responsible source” exception. The J&A expressly asserts that OSS is “the only provider [deleted]. They are the only provider that can perform the contract without significant additional start-up costs and recruitment delays.” AR, Tab 1.b.1., J&A at para. 5. (WorldWide Language Resources, Inc.; SOS International Ltd., B-296984; B-296984.2; B-296984.3; B-296984.4; B-296993; B-296993.2; November 14, 2005) (pdf)
Turning to the propriety of the sole-source bridge contract with EG&G, we first find that the sole-source award was improper because it is not supported by a written J&A. In this regard, when an agency uses noncompetitive procedures, such as 41 U.S.C. 253(c)(1) (2000), which authorizes the use of noncompetitive procedures when the property or services are available from only one responsible source, the contracting officer is required to execute a written justification with sufficient facts and rationale to support the use of the authority, certify its accuracy and completeness, and obtain approval of the action from the cognizant agency official prior to making an award. See 41 U.S.C. 253(f)(1)(A), (B), (C); Federal Acquisition Regulation (FAR) 6.303, 6.304. The only exception to this requirement is where the agency uses noncompetitive procedures because the agency's need for the property or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals. See 41 U.S.C. 253(c)(2), (f)(2). Here, the agency did not execute a J&A prior to awarding the letter contract, as required by the statute. While a draft J&A has been provided during the course of our consideration of this protest, the agency advises that this document is only the agency's "deliberative processes" until a final document is issued. See Agency Letter, Apr. 1, 2003, at 1. In fact, despite our requests, the agency still has not provided an executed and approved J&A. Thus, the agency's letter contract award to EG&G constitutes an improper sole-source award. See Saltwater, Inc.--Recon. and Costs , B-294121.3, B-294121.4, Feb. 8, 2005, 2005 CPD 33 at 3. (VSE Corporation; Johnson Controls World Services, Inc., B-290452.3; B-290452.4; B-290452.5, May 23, 2005) (pdf)
When an agency uses noncompetitive procedures under 10 U.S.C. § 2304(c)(1), it is required to execute a written J&A with sufficient facts and rationale to support the use of the cited authority, and publish a notice to permit potential competitors an opportunity to challenge the agency’s decision to procure without full and open competition. See 10 U.S.C. § 2304(f)(1)(A), (B); Federal Acquisition Regulation §§ 6.302-1(d)(1), 6.303, 6.304; Marconi Dynamics, Inc., B-252318, June 21, 1993, 93‑1 CPD ¶ 475 at 5. Our review of the agency’s decision to conduct a sole-source procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A. When the J&A sets forth a reasonable justification for the agency’s actions, we will not object to the award. Global Solutions Network, Inc., B-290107, June 11, 2002, 2002 CPD ¶ 98 at 6; Diversified Tech. and Servs. Of Virginia, Inc., B‑292497, July 19, 1999, 99-2 CPD ¶ 16 at 3. Here, based on our review of the record, we find no basis to question SSP’s overall determination that only Draper could satisfy the agency’s need for the establishment and certification of an ISF for the MK 6 guidance system. As documented in its J&A justifying award to Draper, SSP determined that only Draper could establish and certify the ISF SSP because, while individual ISCs were familiar with their particular individual subsystems, only Draper, as the design and development agent for the MK 6 guidance system, as well as for the fleet ballistic missile guidance systems generally, had (1) “comprehensive knowledge” of “all critical elements unique to the guidance system’s performance,” and (2) “comprehensive knowledge” of “the interrelationships of these elements with the entire Trident II weapon system.” J&A at 2. SSP concluded that Draper’s “overall systems engineering knowledge and technical expertise in the MK 6 guidance system is unmatched as a result of over forty years as sole design and development agent on the [fleet ballistic missile] guidance systems.” Id. We conclude that SSP reasonably determined that Draper’s overall knowledge of all of the critical components of the MK 6 guidance system, including the IMU, electronic assembly/IMUEs, and 10-PIGA, was essential in view of the broad scope of the requirement to establish and certify the ISF. (Kearfott Guidance & Navigation Corporation, B-292895.2, May 25, 2004) (pdf)
As explained below, the J&A and its supporting documentation, as well as the agency's submissions prepared in response to this protest and the testimony of the agency representatives at the hearing held at our Office in connection with this protest, contain so many inconsistencies and inaccuracies that they cannot reasonably justify the agency's intended award of a sole-source contract to Rolls-Royce. Specifically, the J&A inaccurately describes the overhaul services to be acquired, the dollar value of the services to be acquired, and the length of time for which the services will be needed. Additionally, the record does not support the J&A's statement that only Rolls-Royce is capable of providing either the engineering or overhaul services, and similarly, fails to support the agency's position, as reflected in the J&A and argued by the agency during this protest, that the engineering and overhaul services must be performed by the same contractor (Rolls-Royce). (Sabreliner Corporation, B-288030; B-288030.2, September 13, 2001)
Agency's justification for sole-source procurement is inadequate where the documentation does not reasonably show that only this exact product will satisfy the agency's needs, and does not show that the agency's need for the item is of unusual and compelling urgency that was not created by a lack of advance planning. (National Aerospace Group, Inc., B-282843, August 30, 1999)
Raytheon Company and Kongsberg Defence & Aerospace AS, B-409615, B-409615.2: Jun 24, 2014 (pdf) Coulson Aviation (USA) Inc.; 10 Tanker Air Carrier, LLC; Minden Air Corp., B-409356.2, B-409356.3, B-409356.4, B-409356.5, B-409356.6: Mar 31, 2014
Eclypse International Corporation B-408795, Nov 25, 2013 (pdf) Asiel Enterprises, Inc., B-406780, B-406836, Aug 28, 2012 (pdf)
Sikorsky Aircraft Corporation, B-403471; B-403471.3, November 5, 2010 (pdf) WorldWide Language Resources, Inc.; SOS International Ltd., B-296984; B-296984.2; B-296984.3; B-296984.4; B-296993; B-296993.2; November 14, 2005 (pdf)
Pegasus Global Strategic Solutions, LLC, B-400422.3, March 24, 2009 (pdf) VSE Corporation; Johnson Controls World Services, Inc., B-290452.3; B-290452.4; B-290452.5, May 23, 2005 (pdf)
Smith & Wesson, Inc., B-400479, November 20, 2008 (pdf) Sabreliner Corporation, B-288030; B-288030.2, September 13, 2001
Kearfott Guidance & Navigation Corporation, B-292895.2, May 25, 2004 (pdf) National Aerospace Group, Inc., B-282843, August 30, 1999
EADS North America, Inc., B-291805, March 26, 2003 (txt version)
MFVega & Associates, LLC, B-291605.3, March 25, 2003 (pdf) (txt version)
C. Relevant Statutes and Regulations
Because two of plaintiff’s claims for relief concern whether DHS and its components have, and are, complying with the statutes and regulations related to the use of noncompetitive acquisition procedures, a brief summary of the pertinent statutes and regulations is required.
1. The Competition in Contracting Act of 1984
Under the Competition in Contracting Act of 1984, when a federal executive agency conducts a procurement for property or services, it normally must “obtain full and open competition through the use of competitive procedures in accordance with” the pertinent statutes and the FAR. 41 U.S.C. § 3301(a)(1) (2012); accord FAR 6.101 (2014). However, an executive agency may use noncompetitive procedures in certain specified circumstances, see 41 U.S.C. § 3304(a); FAR 6.301(a); FAR 6.302, or when they are “expressly authorized by statute,” 41 U.S.C. § 3301(a); accord id. § 3304(a)(5); FAR 6.302-5.
If an executive agency plans to use noncompetitive procedures, it may not do so until (1) “the contracting officer for the contract justifies the use of those procedures in writing and certifies the accuracy and completeness of the justification”; (2) if the amount of the contract exceeds $500,000, the appropriate agency official approves the justification; and (3) any required notice is published. 41 U.S.C. § 3304(e)(1); accord FAR 6.303-1; FAR 6.304. Moreover, “[i]n no case may an executive agency . . . procure property or services from another executive agency unless the other executive agency complies with [the pertinent statutes] in its procurement of the property or services.” 41 U.S.C. § 3304(e)(5)(A).
The justification required to use noncompetitive procedures must include the following information:
(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable . . . .
(8) A description of the market research conducted . . . and the results or a statement of the reason market research was not conducted.
(9) Any other facts supporting the use of other than full and open competition . . . . . . . .
FAR 6.303-2(b); accord 41 U.S.C. § 3304(e)(2). The executive agency must, in most cases, make the justification publicly available within fourteen days of contract award. 41 U.S.C. § 3304(f)(1); FAR 6.305.
2. The Economy Act
As previously noted, executive agencies can avoid obtaining full and open competition if an alternative procurement procedure is set forth in another statute. See 41 U.S.C. § 3301(a). One such statute is the Economy Act, which provides that an agency “may place an order with a major organizational unit within the same agency or another agency for goods or services if”:
(2) the head of the ordering agency or unit decides that the order is in the best interest of the United States Government;
31 U.S.C. § 1535(a) (2012). The FAR applies to Economy Act agreements “when one agency uses another agency’s contract to obtain supplies or services,” but not when “the interagency transaction does not result in a contract or an order . . . .” FAR 17.502-2(a); accord FAR 17.500 (noting that FAR subpart 17.5 applies to interagency acquisitions and not to “[i]nteragency reimbursable work performed by Federal employees (other than acquisition assistance) or interagency activities where contracting is incidental to the purpose of the transaction”). If the FAR applies, an agency planning to order goods or services from another agency must first determine that “an interagency acquisition represents the best procurement approach.” FAR 17.502-1(a)(1). That determination must include “an analysis of procurement approaches” and “an evaluation . . . that using the acquisition services of another agency (i) [s]atisfies the requesting agency’s schedule, performance, and delivery requirements, (ii) [i]s cost effective, and (iii) [w]ill result in the use of funds in accordance with appropriation limitations and compliance with the requesting agency’s laws and policies.” Id.
In addition, the requesting agency must support its order with a D&F.11 FAR 17.502- 2(c)(1). The D&F must contain statements affirming that the acquisition is in the government’s best interest and that a commercial acquisition would be less convenient and more expensive. Id. It must also contain a statement that one of the following three circumstances applies to the acquisition:
Id. The D&F must be approved by a contracting officer from the requesting agency, and it must be provided to the servicing agency with the order. FAR 17.502-2(c)(2) to (3).
If the interagency acquisition requires the servicing agency to award a contract, the servicing agency is responsible for complying with the FAR’s competition requirements, including those for full and open competition and those for other than full and open competition. FAR 17.503(d)(3). Finally, prior to the servicing agency acquiring the goods or services for the requesting agency, the two agencies must “sign a written interagency agreement that establishes the general terms and conditions governing the relationship between the parties, including roles and responsibilities for acquisition planning, contract execution, and administration and management of the contract(s) or order(s).” FAR 17.502-1(b)(1)(i).
3. The Government Management Reform Act of 1994
Executive agencies may also avoid obtaining full and open competition if they proceed with the procurement under section 403 of the Government Management Reform Act of 1994. See Pub. L. No. 103-356, 108 Stat. 3410, 3413 (codified as amended at 31 U.S.C. § 501 note). That statute authorizes the establishment of franchise funds at six executive agencies. Id. § 403(a). With respect to such funds, the statute provides:
Each such fund may provide, consistent with guidelines established by the Director of [OMB], such common administrative support services to the agency and to other agencies as the head of such agency, with the concurrence of the Director, determines can be provided more efficiently through such a fund than by other means. To provide such services, each such fund is authorized to acquire the capital equipment, automated data processing systems, and financial management and management information systems needed. Services shall be provided by such funds on a competitive basis.
Id. § 403(b). Further, “nothing in [section 403(b) is to] be construed as relieving any agency of any duty under applicable procurement laws.” Id. § 403(e).
One of the franchise funds authorized by the Government Management Reform Act of 1994 was established for the use of the United States Department of the Interior. See Pub. L. No. 104-208, 110 Stat. 3009, 3009-200 to 3009-201 (1997) (codified as amended at 31 U.S.C. § 501 note). The fund is “to be available . . . for costs of capitalizing and operating administrative services as the Secretary determines may be performed more advantageously as centralized services[,]” and is to “provide services on a competitive basis[.]” Id.
The only substantive issue remaining for the court s resolution is whether the Coast Guard, [Transportation Security Administration] TSA, and [Domestic Nuclear Detection Office] DNDO violated the Competition in Contracting Act of 1984, the regulations implementing the Competition in Contracting Act of 1984, or the regulations implementing the Economy Act when they decided to forgo competition and acquire financial management software systems and related services on a sole-source basis from the Interior Business Center. The court addresses this issue in the context of the parties cross-motions for judgment on the administrative record.
III. THE PARTIES CROSS-MOTIONS FOR JUDGMENT ON THE ADMINISTRATIVE RECORD
Both parties have moved for judgment on the administrative record pursuant to Rule 52.1(c) of the Rules of the United States Court of Federal Claims ( RCFC ). In ruling on such motions, the court asks whether, given all the disputed and undisputed facts, a party has met its burden of proof based on the evidence in the record. A & D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126, 131 (2006) (citing Bannum, Inc., 404 F.3d at 1356). Because the court makes factual findings . . . from the record evidence, judgment on the administrative record is properly understood as intending to provide for an expedited trial on the administrative record. Bannum, 404 F.3d at 1356.
When entertaining a motion for judgment on the administrative record in a bid protest, the Court of Federal Claims reviews the challenged agency action pursuant to the standards set forth in 5 U.S.C. § 706. 28 U.S.C. § 1491(b)(4). Although section 706 contains several standards, the proper standard to be applied in bid protest cases is provided by 5 U.S.C. § 706(2)(A): a reviewing court shall set aside the agency action if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Banknote Corp. of Am., 365 F.3d at 1350.
In this bid protest, the only question before the court is whether the procuring agencies acted in accordance [to] law. The court may set aside a procurement action if . . . the procurement procedure involved a violation of regulation or procedure. Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)). Because procurement officials are entitled to exercise discretion upon a broad range of issues confronting them in the procurement process, Impresa, 238 F.3d at 1332 (internal quotation marks omitted), when a protestor claims that the procuring agency's decision violates a statute, regulation, or procedure, it must show that the violation was clear and prejudicial, id. at 1333 (internal quotation marks omitted).
B. The Competition in Contracting Act of 1984 and Its Implementing Regulations
Plaintiff first argues that the Coast Guard, TSA, and DNDO violated the Competition in Contracting Act of 1984 and its implementing regulations when they decided to forgo competition and acquire financial management software systems and related services on a sole source basis from the Interior Business Center. Specifically, plaintiff contends that the Coast Guard, TSA, and DNDO did not fulfill the requirements of 41 U.S.C. § 3304(e)(1) and FAR 6.303 to justify, in writing, the use of other than full and open competition.
Although executive agencies are normally required to obtain property and services through full and open competition, they may use noncompetitive procedures in certain circumstances. 41 U.S.C. §§ 3301(a), 3304(a). When, as here, a statute authorizes an executive agency to procure property or services from another executive agency, the procuring agency must justify its decision to forgo competition in writing. Id. § 3304(e)(1); FAR 6.303-1(a). The justification must include certain, specified information. 41 U.S.C. § 3304(e)(2); FAR 6.303- 2(a) to (b). And, the justification must be approved by the appropriate official and made publicly available within fourteen days after contract award. 41 U.S.C. § 3304(e)(1), (f); FAR 6.305.
Plaintiff is correct that the administrative record does not include any documents that are specifically designated as the justifications required by the Competition in Contracting Act of 1984 and its implementing regulations. However, the administrative record does include an A- 127 Justification, which was prepared by the Coast Guard on July 3, 2013, to allow it, TSA, and DNDO to use a noncompetitive method (migration to an FSSP) to acquire financial management software systems and related services. In section 7.D of Circular No. A-127, OMB specifies that a justification to forgo full and open competition should generally include the information required by FAR 6.303-2. Accordingly, an A-127 Justification can satisfy the requirements of the Competition in Contracting Act of 1984 and its implementing regulations.
The A-127 Justification prepared by the Coast Guard, broadly construed, contains much of the required information. However, five required elements are missing: (1) [a]n identification of the statutory authority permitting other than full and open competition, FAR 6.303-2(b)(4); accord 41 U.S.C. § 3304(e)(2)(B); (2) [a] demonstration that the proposed contractor s unique qualifications or the nature of the acquisition requires use of the authority cited, FAR 6.303-2(b)(5); accord 41 U.S.C. § 3304(e)(2)(B); (3) [a] determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable, FAR 6.303-2(b)(7); accord 41 U.S.C. § 3304(e)(2)(C); (4) [a] statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required, FAR 6.303-2(b)(11); accord 41 U.S.C. § 3304(e)(2)(F); and (5) [c]ontracting officer certification that the justification is accurate and complete to the best of the contracting officer s knowledge and belief, FAR 6.303-2(b); accord 41 U.S.C. § 3304(e)(1)(A). By omitting these required elements, the Coast Guard, TSA, and DNDO violated the Competition in Contracting Act of 1984 and its implementing regulations.
Of course, it is not enough for plaintiff to establish violations of statute and regulation. Plaintiff must also demonstrate that it was prejudiced by the violations. Bannum, Inc., 404 F.3d at 1351. To establish prejudice . . . , a protester must show that there was a substantial chance it would have received the contract award absent the alleged error. Banknote Corp. of Am., 365 F.3d at 1350 (quoting Emery Worldwide Airlines, Inc., 264 F.3d at 1086); see also Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996) ( [T]o establish prejudice, a protester must show that, had it not been for the alleged error in the procurement process, there was a reasonable likelihood that the protester would have been awarded the contract. ). Plaintiff has not made the necessary showing.
First, some of the information omitted from the A-127 Justification is found elsewhere in the administrative record. In particular, DHS's September 9, 2013 D&F identifies the Economy Act as the statutory authority for the acquisition of financial management software systems and related services from an [federal shared service provider] FSSP and explains why an Economy Act agreement is appropriate. In addition, a number of documents including the alternatives analyses and the A-127 Justification reflect the conclusion of the Coast Guard, TSA, and DNDO that migration to an FSSP was a comparatively low-cost option, strongly suggesting their belief that the costs that they anticipated incurring were fair and reasonable. Second, requiring the Coast Guard, TSA, and DNDO to add a statement regarding how they might be able to conduct a full and open competition in a future procurement would not affect whether plaintiff had a chance of being awarded a contract in the present procurement. Finally, although the A-127 Justification lacks any contracting officer certifications, its conclusion was endorsed by the Chief Financial Officers, Chief Information Officers, and Chief Acquisition Officers of the Coast Guard, TSA, and DNDO, all of which are higher-level officials than a contracting officer. In sum, the Coast Guard s failure to include all of the information in the A-127 Justification that is required by 41 U.S.C. § 3304(e) and FAR 6.303-2(b) amounts to nothing more than harmless error. As such, plaintiff was not prejudiced by the omissions. Consequently, plaintiff cannot prevail on its claim that the Coast Guard, TSA, and DNDO violated the Competition in Contracting Act of 1984 and its implementing regulations.
C. The Economy Act s Implementing Regulations
Plaintiff also argues that the Coast Guard, TSA, and DNDO violated the Economy Act s implementing regulations when they decided to forgo competition and acquire financial management software systems and related services on a sole-source basis from the Interior Business Center. Specifically, plaintiff contends that the Coast Guard, TSA, and DNDO violated FAR subpart 17.5 because the Determination of Best Procurement Approach and the D&F prepared by DHS on September 9, 2013, upon which they relied did not meet the requirements of FAR subpart 17.5. However, as explained above, FAR subpart 17.5 does not apply to the acquisition at issue here, where one executive agency (DHS) is acquiring goods or services directly from another executive agency (the Interior Business Center). Thus, any deficiencies in DHS s Determination of Best Procurement Approach and D&F are irrelevant in the context of plaintiff s bid protest. Accordingly, plaintiff cannot prevail on its claim that the Coast Guard, TSA, and DNDO violated the Economy Act s implementing regulations. (Savantage Financial Services, Inc. v. U. S., No. 14-307C, September 3, 2015) (pdf)
VI. Whether the Air Force’s Sole-Source Award to Harris was Justified
Plaintiff asserts that the sole-source award to Harris was improper, arbitrary and capricious, and contrary to law. Compl. ¶¶ 5, 76-77. One specific violation of regulation noted by plaintiff is the failure to publish a timely notice of the proposed sole-source award to Harris. Id. ¶ 35. The more general violation of law alleged by plaintiff is that the Air Force ignored its responsibility to foster fair and open competition for government contracts. Id. ¶ 70. In support of this contention, plaintiff asserts that the Air Force improperly ignored IDEA’s repeatedly expressed interest in competing for the [Air Force’s Command Man-Day Allocation System] CMAS contract requirement. Pl.’s Mot. ¶ 5.
Plaintiff notes that the contract file contains concessions by the contract specialist that violations of procurement regulations occurred. Pl.’s Mot. ¶ 8. Defendant concedes that errors were made in the sole-source award to Harris, but dismisses them as “technical” or “minor” errors. Def.’s Mot. at 14, 19. Plaintiff argues, however, that by excluding IDEA from any competition for the CMAS bridge contract, and by only soliciting a bid from Harris, the Air Force’s sole-source award was not in accordance with law. Pl.’s Resp. at 14. Plaintiff also notes, correctly, that there is no review of IDEA’s qualifications or responsibility in the administrative record; thus, the agency’s failure to solicit a bid from IDEA is entirely unexplained in the J&A or in any other contemporaneous documents that were before the agency at the time it made its sole-source award. Id. at 8. Finally, plaintiff asserts that the Air Force violated procurement law when it failed to conduct a proper search for responsible sources to perform the CMAS contract requirement. Id. at 12.
Although plaintiff’s protest is less than robust in citations to specific FAR provisions or caselaw, the court agrees that this procurement was fundamentally flawed. The sole-source award to Harris was arbitrary and capricious, and included numerous violations of procurement regulations which were significant. The court notes that sole-source procurements were specifically addressed by CICA and that agencies must operate within the restrictions placed upon them by Congress:
Congress establishes the rules for federal procurement and federal agencies have only the discretion that Congress allows them. In the CICA, Congress expressed concern that federal agencies had misused the authority Congress had granted them and too often resorted to sole source contracts. To control this practice, Congress mandated that unless a statutory exception applies, federal agencies must purchase products and services based upon “full and open competition through the use of competitive procedures.”
ATA Def. Indus., Inc. v. United States, 38 Fed. Cl. 489, 504 (1997) (ATA Defense) (quoting 10 U.S.C. § 2304(a)(1)(A)). The court turns first to the issue of advance planning by the Air Force for a CMAS procurement.
A. Lack of Advance Planning
CICA provides that sole-source procurements may not be used when the circumstances justifying the award were due to the agency’s own lack of advance planning. 10 U.S.C.A. § 2304(f)(4)(A); FAR 6.301(c)(1); WorldWide Language Res., Inc., B-296993, 2005 CPD ¶ 206, 2005 WL 3143870, at *9 (Comp. Gen. Nov. 14, 2005). To the extent that the Air Force justifies its sole-source award to Harris on “the short time line” available to properly research responsible sources for the CMAS contract, AR at 97, this justification violates CICA. The time-frame for the award of this bridge contract was, on the record before the court, entirely the result of a lack of advance planning on the part of the Air Force.
As the court noted earlier in this opinion, the Air Force could not have been unaware of the expiring five-year contract with Harris well in advance of 2009 and 2010. Further, given the generous time-frame available for procurement planning here, there have been no representations made by the government that any impediments precluded advance planning. There is no evidence in the record of any efforts by the Air Force to conduct adequate market research, or to plan and prepare for a competitive procurement, before Harris’s old contract expired on March 31, 2010.18 Mr. Crain also persistently reminded Air Force personnel of their obligation to foster full and open competition for the CMAS program, beginning in February 2009. This court’s rules indicate that procurement planning documents should be included in the administrative record, see, e.g., RCFC App. C ¶ 22(b), but here there are none which evidence an attempt to conduct a timely, competitive procurement.19 The court concludes that the sole-source contract awarded to Harris violates 10 U.S.C.A. § 2304(f)(4)(A), because of the lack of advance planning on the part of the Air Force.
Much of the sole-source justification provided by the Air Force relies on the unacceptably long transition time that would have been required before a new contractor could provide CMAS support services. See AR at 96 (estimating that approximately six to ten months would be necessary for a transition to a new contractor), 98 (noting the “lengthy learning curve” that a new CMAS contractor would face ), 98 (estimating that “upwards of ten months” would be necessary for a transition to a new contractor). Based on the record before the court, this problem, too, cannot be attributed to anything but the Air Force’s lack of advance planning. Failure to account for transition periods between an incumbent contractor and a new contractor is yet another form of lack of advance planning. See, e.g., Techno-Sciences, Inc., B-257686, 94-2 CPD ¶ 164, 1994 WL 606131, at *5 (Comp. Gen. Oct. 31, 1994) (citation omitted).
For all of these reasons, the court finds that the sole-source award violates CICA because it is based on the agency’s lack of advance planning.
B. Arbitrary and Capricious Reasoning
According to the J&A, the agency determined that Harris was the only responsible source for CMAS support services. AR at 96. However, the same document concedes that no market research was performed. Id. at 97. Thus, the agency’s determination that Harris was the only contractor that could provide CMAS support services appears to be founded on: (1) the fact that the Air Force examined other existing contract vehicles to see if CMAS could be incorporated into those existing contracts; and (2) the fact that CMAS support services are “highly specialized and unique to” Harris. Id. at 96-97. There is no indication, however, that the Air Force engaged in a meaningful consideration of the capabilities of other potential sources, before drafting the J&A, to support its conclusion that CMAS support services are unique.21 Thus, the Air Force’s determination that Harris was the one responsible source for CMAS support services was unreasonable. See, e.g., WorldWide Language, 2005 WL 3143870, at *12 (finding “a critical error” in a sole-source award where “firms other than [the incumbent] and their capabilities were simply not meaningfully considered”).
The court also questions, as did Mr. Crain in his first post-J&A email to the Air Force, AR at 211, the factual presumptions supporting the sole-source award to Harris. The J&A states that “the Government is confident that the proposed number of hours, labor rates, and labor categories will be comparable and reasonable [as they have been in the past],” apparently because Harris would keep the same personnel and Harris’s prices for the old contract had been determined to be fair and reasonable in 2009.22 AR at 97. The only figures in the administrative record regarding the last option year of Harris’s old contract show that the annual cost of the CMAS contract from October 1, 2008 through September 30, 2009 was $403,338.40. AR at 16. In contrast, the cost of a six to ten month transition to a new contractor was estimated in the J&A to be $1,500,000.23 Id. at 96. This figure is unexplained, other than an assertion that it is based on “current labor rates.” Id. There is no credible explanation in the record for this estimate, which triples the annual cost of the contract, to explain a transition period of approximately six to ten months. Based on the facts in the record, the agency’s reliance on its calculations as to the “substantial duplication of costs” of the transition to a new contractor is arbitrary and capricious.
C. Violations of Procurement Regulations
The violations of procurement regulations in the sole-source award to Harris are numerous, troubling and prejudicial to IDEA. These are not mere technical errors. Although there is no indication that the Air Force conducted this procurement in bad faith, the record suggests that compliance with regulatory mandates was needlessly sacrificed so that a contract vehicle could be put in place with a minimum amount of effort. The cumulative effect of these regulatory violations was to frustrate full and open competition for the CMAS support services requirement.
2. Reliance on FAR 6.302-1 and FAR 6.302-2
The two types of authority for sole-source procurements at issue in this protest are “only one responsible source” authority, FAR 6.302-1, and “unusual and compelling urgency” authority, FAR 6.302-2. Although the FedBizOpps notice confirmation identifies only FAR 6.302-1 as authority, AR at 101, the text of the J&A relies on both FAR 6.302-1 and FAR 6.302-2 for authority, AR at 96. The court notes that reliance on both of these provisions as authority for a sole-source procurement J&A is extremely rare, at least in procurements protested to the GAO or this court. In fact, the court is not aware of another J&A which has attempted to rely on both of these statutory authorities for the same sole-source award.
The simple reason that this is such a rare circumstance is that the FAR forbids reliance on FAR 6.302-1 when FAR 6.302-2 is applicable. See FAR 6.302-1(b) (“This authority . . . shall not be used when any of the other circumstances [in FAR sections 6.302-2, 6.302-3, 6.302-4, 6.302-5, 6.302-6] is applicable.”); ATA Defense, 38 Fed. Cl. at 497-98 (noting that a contracting officer may not justify a sole-source award under FAR 6.302-1 if FAR 6.302-2 also applies). In other words, if a contracting officer is faced with a situation which can be addressed by applying the “unusual and compelling urgency” provisions of FAR 6.302-2, he or she may not rely on the “only one responsible source” provisions of FAR 6.302-1 to justify a sole-source award. One logical reason for this prohibition is that under FAR 6.302- 2, the government is permitted in appropriate circumstances to “limit [but not automatically reduce to one] the number of sources from which it solicits bids or proposals.” FAR 6.302-2(a)(2); see also FAR 6.302-2(c)(2) (“This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances.”). Under FAR 6.302-1, however, the government is permitted in appropriate circumstances to solicit an offer from one source only. See FAR 6.302-1(b)(1). In essence, the prohibition in FAR 6.302-1(b) forces the agency to solicit offers from as many sources as is practicable, in situations of unusual and compelling urgency, before resorting to soliciting offers from only a single source, in circumstances which may also present unusual and compelling urgency.
The court concludes that the Air Force’s apparent attempt to rely on both FAR 6.302-1 and FAR 6.302-2 for the sole-source award to Harris violates FAR 6.302-1(b). Such an approach shows a disregard for the regulatory framework governing sole-source awards, and also demonstrates a disregard for one of the goals of CICA, which is to obtain as much competition as is practicable under the circumstances. The violation of FAR 6.302-1(b) would be less serious if the Air Force had strictly observed the procedural requirements of FAR 6.302-1, and had reasonably ascertained that only Harris could provide CMAS support services. The record shows, however, that neither the letter nor the spirit of FAR 6.302-1 was respected in the award of the sole-source contract to Harris. Furthermore, the Air Force similarly failed to respect the safeguards in FAR 6.302-2 which ensure that the “unusual and compelling urgency” justification for sole-source awards is not abused. The violation in the J&A of FAR 6.302-1(b), if not a scrivener’s error, was significant.
3. No Market Research, as Required by FAR Part 10
If, as it appears, the Air Force’s primary justification for the sole-source award was its determination that Harris was the one responsible source for CMAS support services, such a determination, to be rational, required adequate market research. As discussed supra, the Air Force did not conduct any significant market research. As the contract specialist conceded, the lack of market research to support this solesource procurement violates FAR Part 10. AR at 70.
The specific provisions in FAR Part 10 that have been violated here, in the court’s view, include FAR 10.001(a)(2)(ii), FAR 10.001(3)(i), and FAR 10.002(b). These provisions require market research if the contract is valued to exceed a threshold amount, require market research that identifies potential sources for the contract requirement, and require market research into the availability of commercial items. The record before the court does not show that the Air Force satisfied the market research requirements of FAR Part 10. The failure to conduct adequate market research also implicates FAR 6.302-1(b)(1), which requires a “reasonable basis” for the determination that only one responsible source exists to fulfill a contract requirement. See, e.g., WorldWide Language, 2005 WL 3143870, at *12 (sustaining a protest of a sole-source award justified by the authority of FAR 6.302-1 because “firms other than [the incumbent] and their capabilities were simply not meaningfully considered”). The violation of FAR Part 10 in this procurement was a significant and serious violation of procurement regulations.
4. No Contract Synopsis Posted, as Required by FAR 5.207(c)(15)(ii) and FAR 6.302-1(d)(2)
As a general rule, a procuring agency must provide notice of upcoming contract actions. See FAR 5.201(c) (“The primary purposes of the notice are to improve small business access to acquisition information and enhance competition by identifying contracting and subcontracting opportunities.”). These contract action synopses are required to include specified content. FAR 5.207. As pertinent here, “[w]hen using the sole source authority at 6.302-1, insert a statement that all responsible sources may submit a capability statement, proposal, or quotation, which shall be considered by the agency.” FAR 5.207(c)(15)(ii) (now found at 48 C.F.R. § 5.207(c)(16)(ii)). The requirement for this statement in a posted synopsis is also found in FAR 6.302-1, which contains the additional requirement that “any bids, proposals, quotations, or capability statements [received in response to the synopsis] must have been considered” by the agency. FAR 6.302-1(d)(2).
Here, there was no synopsis posted prior to contract award; no statement encouraging potential sources to submit proposals; and, necessarily, no consideration by the Air Force of information received in response to such a notice. The failure to post a proper synopsis on FedBizOpps was a significant departure from regulatory requirements, and further weakens the rationality of the agency’s determination that only Harris could have performed the bridge contract for CMAS support services. See, e.g., M.D. Thompson Consulting, LLC, B-297616, 2006 CPD ¶ 41, 2006 WL 463154, at *3 (Comp. Gen. Feb. 14, 2006) (stating that “a synopsis must provide prospective alternative sources a meaningful opportunity to demonstrate their ability to provide what the agency seeks to purchase”) (citation omitted); see also Barnes Aerospace Grp., B-298864, 2006 CPD ¶ 204, 2006 WL 3849071, at *6 (Comp. Gen. Dec. 26, 2006) (“We think agencies undercut their credibility when they prepare and execute sole-source J & As on the basis that there is only one responsible source available, before the time they have received expressions of interest and capability from potential offerors. The entire purpose of issuing notices seeking expressions of interest and capability is to avoid the need for such sole-source procurements, if possible.”). The sole-source award to Harris was not in accordance with FAR 5.207(c)(15)(ii) or FAR 6.302-1(d)(2) and was improper for this reason.
5. No Explanation in the J&A as to the Failure to Post a Synopsis, and No Citation to Authority Justifying Such a Failure, as Required by FAR 6.303-2(a)(6)
There are exceptions to the requirement for the posting of a contract action synopsis, and these exceptions are delineated in FAR 5.202. One such exception permits an agency to refrain from posting a contract action synopsis for a sole-source award justified under FAR 6.302-2 when certain conditions are met:
The contracting officer need not submit the notice required by [FAR] 5.201 when . . . [t]he proposed contract action is made under the conditions described in 6.302-2 . . . and the Government would be seriously injured if the agency complies with the time periods specified [for the posting of contract action synopses] in [FAR] 5.203.
FAR 5.202. Thus, a sole-source award justified under FAR 6.302-2 may, in appropriate circumstances, be exempt from the synopsis requirements set forth in FAR Subpart 5.2.
However, the above-mentioned exception in FAR 5.202 was not invoked in the J&A for this sole-source procurement; indeed, the J&A is silent as to the Air Force’s failure to post a synopsis before contract award. The J&A thus fails to conform to FAR 6.303-2, which requires that each J&A include “[a] description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under 5.202 applies.” FAR 6.303-2(a)(6) (now found at 48 C.F.R. § 6.303-2(b)(6)). This is not a mere technical error - the officials approving the J&A should have been made aware of the Air Force’s failure to synopsize the contract action (and the ramifications that failure might have had on the rationality of the sole-source award); in the absence of this vital information, their approval signatures do not carry the same weight. See United States Marshals Serv., B-224277, 87-1 CPD ¶ 430, 1987 WL 102234, at *1 (Comp. Gen. Apr. 22, 1987) (finding a sole-source award improper because the agency’s J&A did not contain a statement noting and explaining the agency’s failure to post a synopsis prior to award). For this reason, the Air Force’s sole-source award to Harris violated FAR 6.303-2(a)(6) and was improper.
6. No Mention of IDEA as an Interested Source, as Required by FAR 6.303-2(a)(10)
Another minimum requirement of a sole-source J&A is a listing of contractors that have expressed an interest in the contract requirement. This requirement is set forth in FAR 6.303-2, which states in relevant part: “As a minimum, each justification shall include . . . [a] listing of the sources, if any, that expressed, in writing, an interest in the acquisition.” FAR 6.303-2(a)(10) (now found at 48 C.F.R. § 6.303-2(b)(10)). This regulation, too, was violated in the sole-source award to Harris.
Here, it is undisputed that IDEA repeatedly expressed, in writing, an interest in the CMAS procurement, in emails sent February 9, 2009, March 24, 2009, April 17, 2009, and December 11, 2009. These expressions of interest were received despite the agency’s failure to post a synopsis of the upcoming sole-source award to Harris. In the circumstances of this procurement, where Mr. Crain and IDEA had extensive CMAS experience and contacts with officials responsible for CMAS, these written expressions of interest by IDEA should have earned IDEA an “Interested Source” listing in the J&A, but did not.
If, indeed, IDEA’s interest in the CMAS contract requirement had been noted in the J&A, it is likely that a more thoughtful analysis of the agency’s “only one responsible source” determination would have been conducted by the approving authorities. As the record stands, however, there is no useful comparison of the qualifications of IDEA and Harris in the record. The court finds that the violation of FAR 6.303-2(a)(10) was significant.
7. Failure to Solicit Offers from As Many Sources As Practicable, as Required by FAR 6.302-2(c)(2)
Finally, even if this sole-source procurement had been justified only under the “unusual and compelling urgency” circumstances described in FAR 6.302-2, the Air Force did not make the required effort to solicit offers from as many sources as practicable. FAR 6.302-2(c)(2). The GAO has repeatedly sustained protests where an agency has made only minimal efforts to expand its consideration of potential sources beyond an incumbent contractor. The following passage in WorldWide Language describes a flawed procurement not unlike the sole-source procurement in this case:
Moreover, the actions associated with the J & A were inconsistent with the requirements of the “unusual and compelling urgency” justification ultimately relied upon by the agency as the basis for the sole-source award to [the awardee]. When relying on the urgency justification, as noted above, an agency is required to obtain competition to the maximum extent practicable. However, as a consequence of the agency’s focus on the capabilities of [the awardee] to the exclusion of all others, the agency failed to take any steps to obtain any competition for the expanded . . . requirement. For example, in testimony before our Office regarding the consideration of other contractors, the Air Force indicated that due to the short time frame to fulfill the requirement, transition issues, and because [the awardee] was “performing admirably [on an existing contract],” the Air Force determined that [the awardee] “was uniquely qualified to be the source on this follow-on.” The record shows that the expanded . . . requirement was formally approved by the Under Secretary of Defense on May 2, 2005 and [the awardee’s] sole-source contract was ultimately awarded in late July – but during that entire period no effort was apparently made to identify other firms, consider their capabilities or provide for any degree of competition, even on a limited basis. In addition, while it may be the case that [the awardee’s] customers in Iraq were pleased with [the awardee’s] performance, their satisfaction did not provide a basis for disregarding the requirement to seek competition to the maximum extent practicable. As a consequence, we sustain the protesters’ challenge to the second sole-source award to [the awardee].
WorldWide Language, 2005 WL 3143870, at *12 (citations and footnotes omitted).
In this case, the Air Force neglected to look into its own contract files to discover IDEA, a potential competitor to Harris, as a source for CMAS services; neglected to post a synopsis which might have produced expressions of interest from competitors to Harris; and performed only the most cursory searches for contractors capable of fulfilling the CMAS bridge contract. As in WorldWide Language, the Air Force failed to solicit offers from as many sources as was practicable under the circumstances. This is a clear violation of FAR 6.302-2(c)(2). At a minimum, the agency could have solicited an offer from IDEA. See, e.g., Bausch & Lomb, Inc., B- 298444, 2006 CPD ¶ 135, 2006 WL 2711794, at *2 (Comp. Gen. Sept. 21, 2006) (sustaining a protest because “the agency has not reasonably demonstrated why it could not have opened the requirement up to an expedited limited competition among those firms that had expressed interest in the acquisition”).
Although the government, during the course of this protest, has suggested that IDEA was not a qualified, responsible source for CMAS support services, the record is devoid of any assessment of IDEA’s qualifications by the Air Force. The glowing description of Harris’s capabilities in the J&A permits the inference that the agency considered Harris to be superior to any potential competitor. Superiority, however, is not adequate justification for a sole-source award. See, e.g., Savantage Fin. Servs., Inc. v. United States, 81 Fed. Cl. 300, 308 (2008) (citing Aero Corp. v. Dep’t of the Navy, 540 F. Supp. 180, 208 (D.D.C. 1982)). Superiority, instead, permits an agency to award a contract after the evaluation of competing proposals. Id. (citation omitted). On the record before the court, there is no reasonable explanation why the Air Force did not solicit a proposal from IDEA. (Innovation Development Enterprises of America, Inc., V. U. S., No 11-217C, January 29, 2013) (pdf)
Savantage Financial Services, Inc. v. U. S., No. 14-307C, September 3, 2015 (pdf) Innovation Development Enterprises of America, Inc., V. U. S., No 11-217C, January 29, 2013 (pdf)