B-168035, MAY 14, 1970
Highlights
GAO FINDS NOTHING IN REPORT OF UNITED STATES ARMY MATERIEL COMMAND ON WHICH TO BASE A LEGAL OBJECTION TO ACTIONS TAKEN BY PROCURING ACTIVITY AND AGREES WITH CONCLUSION THAT ONLY PRESENT CONTRACT HOLDERS ARE ELIGIBLE FOR OPTION QUANTITY AWARDS WHICH IS FURTHER JUSTIFIED BY "OPTION FOR INCREASED QUANTITY" CLAUSE OF RFP RESERVING TO GOVERNMENT RIGHT TO MAKE SUCH AWARDS. TO PROGRESS EQUIPMENT CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 23. YOU HAVE VIGOROUSLY PROTESTED AGAINST THE AWARD OF CONTRACTS UNDER THIS RFP AS WELL AS THE EXERCISE OF CERTAIN CONTRACT OPTIONS IN FAVOR OF HOLDERS OF CONTRACTS UNDER THE RFP. YOUR PROTESTS WERE THE SUBJECT OF OUR DECISIONS OF DECEMBER 24. ENCLOSED IS A COPY OF THE REPORT SUBMITTED TO OUR OFFICE IN RESPONSE TO YOUR TELEGRAM BY HEADQUARTERS.
B-168035, MAY 14, 1970
CONTRACTS--OPTIONS--CRITERIA FOR EXERCISE OF OPTION CONCERNING PROTEST AGAINST AWARD OF CONTRACTS UNDER REQUEST FOR PROPOSALS (RFP) ISSUED BY AMMUNITION PROCUREMENT AND SUPPLY AGENCY AND AGAINST EXERCISE OF CERTAIN OPTIONS IN FAVOR OF HOLDERS OF CONTRACTS UNDER RFP, GAO FINDS NOTHING IN REPORT OF UNITED STATES ARMY MATERIEL COMMAND ON WHICH TO BASE A LEGAL OBJECTION TO ACTIONS TAKEN BY PROCURING ACTIVITY AND AGREES WITH CONCLUSION THAT ONLY PRESENT CONTRACT HOLDERS ARE ELIGIBLE FOR OPTION QUANTITY AWARDS WHICH IS FURTHER JUSTIFIED BY "OPTION FOR INCREASED QUANTITY" CLAUSE OF RFP RESERVING TO GOVERNMENT RIGHT TO MAKE SUCH AWARDS.
TO PROGRESS EQUIPMENT CORPORATION:
REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 23, 1970, INQUIRING AS TO CERTAIN MATTERS RELATIVE TO REQUEST FOR PROPOSALS (RFP) NO. DAAA09-70-R 0007, ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY ON JULY 3, 1969. YOU HAVE VIGOROUSLY PROTESTED AGAINST THE AWARD OF CONTRACTS UNDER THIS RFP AS WELL AS THE EXERCISE OF CERTAIN CONTRACT OPTIONS IN FAVOR OF HOLDERS OF CONTRACTS UNDER THE RFP. YOUR PROTESTS WERE THE SUBJECT OF OUR DECISIONS OF DECEMBER 24, 1969, AND MARCH 20, 1970, TO YOU.
ENCLOSED IS A COPY OF THE REPORT SUBMITTED TO OUR OFFICE IN RESPONSE TO YOUR TELEGRAM BY HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND. FIND NOTHING THEREIN UPON WHICH TO BASE A LEGAL OBJECTION TO THE ACTIONS TAKEN BY THE PROCURING ACTIVITY.
FURTHERMORE, WE AGREE WITH THE REASONING AND CONCLUSION OF THE PENULTIMATE PARAGRAPH OF THE REPORT. WE BELIEVE THE CONCLUSION THAT ONLY PRESENT CONTRACT HOLDERS ARE ELIGIBLE FOR OPTION QUANTITY AWARDS TO BE FURTHER JUSTIFIED BY THE "OPTION FOR INCREASED QUANTITY" CLAUSE OF THE RFP, THE FIRST SENTENCE OF WHICH STATES:
"THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARDS) FOR AN INCREASED QUANTITY OF ANY ITEM OR ITEMS AT A PRICE NOT TO EXCEED THE PRICE OFFERED FOR ITEM 1 OR AT THE PRICE QUOTED BELOW PROVIDED THAT SUCH INCREASES SHALL NOT EXCEED 100% OF THE QUANTITY AWARDED. * * *."
IT SHOULD BE NOTED THAT THE TOTAL BASIC QUANTITY WAS AWARDED AND THAT THE RIGHT IS RESERVED TO THE GOVERNMENT TO EXERCISE THE OPTIONS WITH THE PARTICULAR CONTRACTORS AT THEIR AWARDED UNIT PRICES. IN THIS CONNECTION, AWARDS OF OPTIONS IN EXCESS OF 50 PERCENT HAVE BEEN APPROVED BY THE PROPER DEPARTMENT OF THE ARMY PERSONNEL AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION 1-1504 (A). MOREOVER, NO JUSTIFICATION EXISTS TO AWARD ANY UNEXERCISED OPTIONS TO YOU ON A SOLE SOURCE BASIS.