B-172542(1), JUL 2, 1971

B-172542(1): Jul 2, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IT DOES NOT APPEAR FROM THE RECORD THAT THE CONTRACTING OFFICER WAS WITHOUT JUSTIFICATION IN LETTING THE PROCUREMENT ON A SOLE SOURCE BASIS. WILL NOT QUESTION HIS DECISION. T. MURRAY TOOMEY: REFERENCE IS MADE TO YOUR LETTER OF MAY 18. YOU ALLEGE THAT THE SOLE-SOURCE AWARD TO CONSOLIDATED WAS AN ABUSE OF POWER BY THE CONTRACTING OFFICER BECAUSE COMPETITION WAS AVAILABLE. YOU QUESTION THE NEGOTIATION ON AN EXIGENCY BASIS SINCE THE INTENT TO PROCURE THE UNITS ON A SOLE-SOURCE BASIS WAS FIRST PUBLISHED IN THE COMMERCE BUSINESS DAILY ON MAY 26. AWARD WAS NOT MADE UNTIL JANUARY 28. YOU DISAGREE WITH THE NAVY POSITION THAT IT WOULD TAKE 17 MONTHS FOR PRODUCTION UNITS TO BE SUPPLIED IN THE EVENT A NEW SOURCE WAS USED.

B-172542(1), JUL 2, 1971

BID PROTEST - SOLE SOURCE PROCUREMENT DENYING PROTEST AGAINST THE SOLE SOURCE PROCUREMENT OF MOBILE ELECTRIC POWER PLANTS FROM CONSOLIDATED DIESEL ELECTRIC COMPANY UNDER AN RFP ISSUED BY THE NAVY PURCHASING OFFICE. IT DOES NOT APPEAR FROM THE RECORD THAT THE CONTRACTING OFFICER WAS WITHOUT JUSTIFICATION IN LETTING THE PROCUREMENT ON A SOLE SOURCE BASIS. UNLESS IT CAN BE SHOWN THAT THE CONTRACTING OFFICER HAS ABUSED HIS DISCRETIONARY POWERS, THE COMP. GEN. WILL NOT QUESTION HIS DECISION.

TO MR. T. MURRAY TOOMEY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 18, 1971, AND PRIOR CORRESPONDENCE, ON BEHALF OF LIBBY WELDING COMPANY, INC., PROTESTING THE PROCUREMENT OF NC-8A MOBILE ELECTRIC POWER PLANTS ON A SOLE-SOURCE BASIS FROM CONSOLIDATED DIESEL ELECTRIC COMPANY UNDER REQUEST FOR PROPOSALS NO. N00600-70-R-5492, ISSUED MAY 25, 1970, BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C.

YOU ALLEGE THAT THE SOLE-SOURCE AWARD TO CONSOLIDATED WAS AN ABUSE OF POWER BY THE CONTRACTING OFFICER BECAUSE COMPETITION WAS AVAILABLE. FURTHER, YOU QUESTION THE NEGOTIATION ON AN EXIGENCY BASIS SINCE THE INTENT TO PROCURE THE UNITS ON A SOLE-SOURCE BASIS WAS FIRST PUBLISHED IN THE COMMERCE BUSINESS DAILY ON MAY 26, 1970, AND AWARD WAS NOT MADE UNTIL JANUARY 28, 1971. ALSO, YOU DISAGREE WITH THE NAVY POSITION THAT IT WOULD TAKE 17 MONTHS FOR PRODUCTION UNITS TO BE SUPPLIED IN THE EVENT A NEW SOURCE WAS USED. YOU STATE THAT ON A MORE COMPLICATED REQUIREMENT, LIBBY HAS BEEN PROVIDED WITH 6 MONTHS FOR A PREPRODUCTION MODEL AND THE LEAD TIME FOR DELIVERY ON PRODUCTION UNITS WOULD HAVE BEEN CONSIDERABLY LESS THAN THE NAVY ESTIMATED. YOU STATE FURTHER THAT THE PERIOD OF TIME THAT WAS SPENT IN NEGOTIATING THE CONTRACT WITH CONSOLIDATED COULD HAVE BEEN USED TO OBTAIN A POSSIBLE NEW SOURCE FOR THE UNITS BEING PROCURED.

THE SUBJECT PROCUREMENT WAS NEGOTIATED UNDER THE "PUBLIC EXIGENCY" EXCEPTION, 10 U.S.C. 2304(A)(2). THE REQUISITIONING ACTIVITY RECOMMENDED NEGOTIATION BECAUSE IT WAS FACED WITH A "CRITICAL AND URGENT REQUIREMENT FOR ADDITIONAL UNITS WHICH CAN ONLY BE FULFILLED BY IMMEDIATE PROCUREMENT OF ADDITIONAL NC-8A UNITS WITH DELIVERIES TO COMMENCE PRIOR TO 1971." THE DETERMINATION AND FINDINGS ISSUED BY THE CONTRACTING OFFICER INDICATES THAT THE DECISION TO NEGOTIATE UNDER THE "PUBLIC EXIGENCY" EXCEPTION WAS PREDICATED UPON THE CITATION IN THE REQUISITION FOR THE UNITS TO A UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) 02 PRIORITY DESIGNATOR. IN THIS CONNECTION, PARAGRAPH 3-202.2(VI) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES FOR THE UTILIZATION OF THE AUTHORITY OF 10 U.S.C. 2304(A)(2) WHEN THE PURCHASE REQUEST CITES A UMMIPS PRIORITY DESIGNATOR OF 1 THROUGH 6. THUS, THERE WAS A BASIS FOR THE CONTRACTING OFFICER UTILIZING THE EXIGENCY EXCEPTION. FURTHER, 10 U.S.C. 2310(B) MAKES A DECISION TO NEGOTIATE UNDER 10 U.S.C. 2304(A)(2) FINAL.

MOREOVER, THE RECORD INDICATES THAT ON A PRIOR PROCUREMENT FOR THE SAME UNITS, THE NAVY HAD TO ENTER INTO A CONTRACT WITH CONSOLIDATED FOR THE COMPLETION OF THE CONTRACT ON THAT PROCUREMENT WHEN THE CONTRACTOR WHO WAS SUCCESSFUL IN THE COMPETITION THERE WAS UNABLE TO MEET THE CONTRACT SPECIFICATION AND DELIVERY REQUIREMENTS. IN VIEW OF THAT PRIOR PROCUREMENT HISTORY, THE URGENCY OF THE IMMEDIATE PROCUREMENT, AND THE FACT THAT CONSOLIDATED WAS IN PRODUCTION ON THE UNITS AND WOULD NOT HAVE TO QUALIFY A PREPRODUCTION MODEL WHICH WOULD BE REQUIRED OF ANY OTHER CONTRACTOR, IT WAS DECIDED THAT THE PROCUREMENT SHOULD BE LET ON A SOLE- SOURCE BASIS.

ALTHOUGH YOU DISAGREE WITH THE NAVY AS TO THE AMOUNT OF TIME IT WOULD TAKE A SECOND SOURCE TO MANUFACTURE PRODUCTION UNITS, IN VIEW OF THE PRIOR PROCUREMENT HISTORY AND THE REPORTED URGENT NEED FOR THE UNITS WHICH THE CONTRACTING OFFICER REPORTS BECAME MORE CRITICAL WITH THE PASSAGE OF TIME, IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER WAS WITHOUT JUSTIFICATION IN REDUCING THE RISKS OF PERFORMANCE AND LIMITING THE PROCUREMENT TO THE PRESENT PRODUCER OF THE UNITS.

FURTHER, THE CONTRACTING OFFICER HAS INDICATED THAT IT WAS NOT ANTICIPATED NOR FORESEEN THAT IT WOULD TAKE AS LONG AS IT DID TO LET THE CONTRACT TO CONSOLIDATED.

IN 10 U.S.C. 2304(G) IT IS PROVIDED:

"IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $2,500 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, PROPOSALS SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED *** ."

THUS COMPETITION IS REQUIRED WHERE TIME OF DELIVERY WILL PERMIT. HOWEVER, AS INDICATED ABOVE, THE CONTRACTING OFFICER CONSIDERED THE PROCUREMENT TO BE SO CRITICAL THAT IT COULD NOT AFFORD THE DELAY OR THE RISK INVOLVED IN PREPRODUCTION QUALIFICATION. WE HAVE HELD "WHERE THE LEGITIMATE NEEDS OF THE GOVERNMENT CAN BE SATISFIED FROM ONLY A SINGLE SOURCE, WE DO NOT THINK THE LAW REQUIRES THAT THEY BE COMPROMISED TO OBTAIN COMPETITION." B-166579, JULY 18, 1969; B-161700, SEPTEMBER 5, 1967. WE HAVE FURTHER CONCLUDED THAT WHILE THE USE OF THE "PUBLIC EXIGENCY" EXCEPTION DOES NOT OF ITSELF CLOAK THE CONTRACTING OFFICER WITH AUTHORITY TO PROCURE ITEMS ON A NONCOMPETITIVE BASIS, HE IS VESTED WITH A CONSIDERABLE AMOUNT OF DISCRETION TO DETERMINE THE AMOUNT OF COMPETITION CONSISTENT WITH THE EXIGENCY SITUATION, AND OUR OFFICE WILL NOT QUESTION THE CONTRACTING OFFICER'S DECISION TO MAKE A SOLE-SOURCE AWARD UNLESS IT IS CLEAR FROM THE WRITTEN RECORD THAT HE ACTED IN AN ARBITRARY OR CAPRICIOUS MANNER IN ABUSE OF THAT DISCRETION. 44 COMP. GEN. 590 (1965), B-163099, APRIL 19, 1968.

FROM OUR REVIEW OF THE RECORD, WE DO NOT FIND THAT THE CONTRACTING OFFICER ABUSED HIS DISCRETION.

ACCORDINGLY, THE PROTEST IS DENIED.