B-220651, JAN 16, 1986, OFFICE OF GENERAL COUNSEL
Highlights
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - PROPRIETY DIGEST: LETTER TO CONTRACTING AGENCY QUESTIONS WHY STATUTORY PROCEDURES FOR PUBLICATION OF REQUIRED NOTICE AND JUSTIFICATION AND APPROVAL OF CONTRACT AWARD ON SOLE SOURCE BASIS WERE NOT FOLLOWED IN PROCUREMENT FOR UPGRADES AND MODIFICATIONS TO EXISTING AUTOMATIC DATA PROCESSING EQUIPMENT SINCE. WE FOUND THAT THIS GROUND OF THE PROTEST WAS UNTIMELY AND THEREFORE OUR DECISION DID NOT DISCUSS THE SUBSTANCE OF THE PROTESTER'S ALLEGATION. WE ARE CONCERNED. THE ARMY MAINTAINED THAT THE CERTIFICATION REQUIREMENT WAS ESSENTIAL TO MEETING ITS NEED FOR UNINTERRUPTED MAINTENANCE SERVICE FROM IBM. THE ARMY WAS ADVISED OF IBM'S REFUSAL TO ISSUE THE CERTIFICATIONS WELL BEFORE THE CONTRACT WAS AWARDED.
B-220651, JAN 16, 1986, OFFICE OF GENERAL COUNSEL
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - PROPRIETY DIGEST: LETTER TO CONTRACTING AGENCY QUESTIONS WHY STATUTORY PROCEDURES FOR PUBLICATION OF REQUIRED NOTICE AND JUSTIFICATION AND APPROVAL OF CONTRACT AWARD ON SOLE SOURCE BASIS WERE NOT FOLLOWED IN PROCUREMENT FOR UPGRADES AND MODIFICATIONS TO EXISTING AUTOMATIC DATA PROCESSING EQUIPMENT SINCE, BY REQUIRING OFFERORS TO OBTAIN CERTAIN CERTIFICATIONS FROM FIRM HOLDING THE MAINTENANCE CONTRACT COVERING THE EQUIPMENT, AGENCY IN EFFECT ENSURED THAT AWARD WOULD BE MADE TO THAT FIRM. GAO RECOMMENDS THAT STATUTORY PROCEDURES FOR SOLE SOURCE AWARD BE FOLLOWED IF SIMILAR CIRCUMSTANCES ARISE IN THE FUTURE.
THE HONORABLE JOHN O. MARSH:
THE SECRETARY OF THE ARMY
THIS IN REGARD TO OUR DECISION FINALCO, INC., B-220651, ISSUED ON JANUARY 2, 1986. THE PROTESTER IN THAT CASE CHALLENGED THE AWARD OF A CONTRACT TO INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) FOR MAINTENANCE AND MODIFICATIONS TO IBM EQUIPMENT AT THE ARMY'S ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS.
IN PART, THE PROTESTER CHALLENGED THE ARMY'S REQUIREMENT TO FURNISH CERTIFICATIONS FROM IBM THAT INSTALLATION OF THE MODIFICATIONS WOULD NOT AFFECT IBM'S EXISTING AGREEMENT TO MAINTAIN THE EQUIPMENT. WE FOUND THAT THIS GROUND OF THE PROTEST WAS UNTIMELY AND THEREFORE OUR DECISION DID NOT DISCUSS THE SUBSTANCE OF THE PROTESTER'S ALLEGATION.
WE ARE CONCERNED, HOWEVER, THAT THE ARMY, WHILE PURPORTING TO CONDUCT A COMPETITIVE PROCUREMENT, IN EFFECT ENSURED A SOLE-SOURCE AWARD TO IBM BY REQUIRING THAT ALL OFFERORS OBTAIN CERTIFICATIONS FROM IBM.
IN ITS REPORT ON THE PROTEST, THE ARMY MAINTAINED THAT THE CERTIFICATION REQUIREMENT WAS ESSENTIAL TO MEETING ITS NEED FOR UNINTERRUPTED MAINTENANCE SERVICE FROM IBM, A NEED WHICH THE PROTESTER DID NOT CHALLENGE. WE UNDERSTAND THAT IBM DID NOT GRANT ANY FIRM'S REQUEST FOR THE CERTIFICATIONS. THE ARMY WAS ADVISED OF IBM'S REFUSAL TO ISSUE THE CERTIFICATIONS WELL BEFORE THE CONTRACT WAS AWARDED.
UNDER THESE CIRCUMSTANCES, WE QUESTION WHY THE ARMY DID NOT FOLLOW THE PROCEDURES IN 10 U.S.C.A. SEC. 2304(F) (WEST SUPP. 1985) FOR PUBLICATION OF THE REQUIRED NOTICES AND JUSTIFICATION AND APPROVAL OF A SOLE-SOURCE AWARD TO IBM. IF SIMILAR CIRCUMSTANCES ARISE IN THE FUTURE, WE RECOMMEND THAT AWARD BE MADE ONLY AFTER THE STATUTORY REQUIREMENTS FOR AWARD ON A SOLE-SOURCE BASIS ARE SATISFIED.