B-175482, MAY 10, 1972

B-175482: May 10, 1972

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IN VIEW OF THE FACT THAT THERE IS NO KNOWN DOMESTIC PRODUCER ABLE TO MEET THE MINIMUM NEEDS OF GOVERNMENT. IS CLEARLY JUSTIFIED. THE PROTEST IS DENIED. TO DYNARAD INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE PROPOSED SOLE SOURCE AWARD OF A CONTRACT TO THE AGA CORPORATION (AGA) UNDER SOLICITATION NO. THE PROCUREMENT COVERED BY THE SOLICITATION WAS A REPURCHASE OF ONE INFRARED CAMERA. WE ARE ADVISED THAT THIS CONTRACT WAS AWARDED TO YOUR FIRM FOLLOWING A COMPETITIVE SOLICITATION FOR A CAMERA DESCRIBED AS "AGA MODEL 680 OR EQUAL. THE TWO MAIN PURPOSES OF A REPURCHASE CONTRACT ARE TO OBTAIN THE NEEDED SUPPLIES OR SERVICES SOUGHT BY THE GOVERNMENT. CONSIDERABLE LATITUDE IS GIVEN THE CONTRACTING OFFICER OR OTHER OFFICIAL ACTING ON BEHALF OF THE GOVERNMENT.

B-175482, MAY 10, 1972

BID PROTEST - SOLE-SOURCE PROCUREMENT - REPURCHASE CONTRACT - BIDDING RIGHTS OF DEFAULTED CONTRACTOR DECISION DENYING THE PROTEST OF DYNARAD, INC., AGAINST THE PROPOSED SOLE- SOURCE AWARD OF A CONTRACT TO THE AGA CORPORATION UNDER A SOLICITATION ISSUED BY THE ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALA. IN THE CIRCUMSTANCES OF THIS CASE, THE STATUTORY REQUIREMENT THAT CONTRACTS BE LET AFTER COMPETITIVE BIDDING DOES NOT APPLY, AND REPURCHASE NEGOTIATIONS MAY BE CONFINED TO OFFERORS OTHER THAN THE DEFAULTED CONTRACTOR. B-171636, JANUARY 17, 1972. IN VIEW OF THE FACT THAT THERE IS NO KNOWN DOMESTIC PRODUCER ABLE TO MEET THE MINIMUM NEEDS OF GOVERNMENT, AWARD TO AGA, A FOREIGN CORPORATION, ON A NONCOMPETITIVE BASIS, IS CLEARLY JUSTIFIED. ACCORDINGLY, THE PROTEST IS DENIED.

TO DYNARAD INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE PROPOSED SOLE SOURCE AWARD OF A CONTRACT TO THE AGA CORPORATION (AGA) UNDER SOLICITATION NO. DAAH03-72-R-0183, ISSUED ONLY TO AGA ON JANUARY 31, 1972, BY THE UNITED STATES ARMY MISSILE COMMAND (MICOM), REDSTONE ARSENAL, ALABAMA.

THE PROCUREMENT COVERED BY THE SOLICITATION WAS A REPURCHASE OF ONE INFRARED CAMERA, DISPLAY UNIT AND RECORDING SYSTEM, FOLLOWING A DEFAULT TERMINATION ON NOVEMBER 16, 1971, OF CONTRACT NO. DAAH03-71-C-0297 WITH YOUR FIRM FOR THE SAME ITEM BECAUSE OF ITS FAILURE TO DELIVER AN ITEM MEETING CONTRACT SPECIFICATIONS. WE ARE ADVISED THAT THIS CONTRACT WAS AWARDED TO YOUR FIRM FOLLOWING A COMPETITIVE SOLICITATION FOR A CAMERA DESCRIBED AS "AGA MODEL 680 OR EQUAL," AND BASED UPON YOUR LOW OFFER TO SUPPLY AN "EQUAL" ITEM.

YOUR PROTEST CENTERS AROUND MICOM'S FAILURE TO PERMIT YOUR FIRM TO COMPETE ON THE REPROCUREMENT, AND THEREFORE RAISES THE BASIC QUESTION OF WHETHER A DEFAULTED CONTRACTOR HAS A RIGHT TO BID ON, AND BE AWARDED, A REPURCHASE CONTRACT. THE TWO MAIN PURPOSES OF A REPURCHASE CONTRACT ARE TO OBTAIN THE NEEDED SUPPLIES OR SERVICES SOUGHT BY THE GOVERNMENT, AND TO SERVE AS A METHOD OF COMPUTING THE GOVERNMENT'S DAMAGES, IF ANY. CONSIDERABLE LATITUDE IS GIVEN THE CONTRACTING OFFICER OR OTHER OFFICIAL ACTING ON BEHALF OF THE GOVERNMENT, SUBJECT ONLY TO THE RULE THAT HIS ACTIONS MUST BE REASONABLE IN DECIDING HOW THE REPURCHASE IS ACCOMPLISHED AND CONSISTENT WITH HIS DUTY TO MITIGATE DAMAGES. IN SUCH A SITUATION, THE PURCHASE IS MADE FOR THE ACCOUNT OF THE DEFAULTED CONTRACTOR; THE STATUTORY REQUIREMENT THAT CONTRACTS BE LET AFTER COMPETITIVE BIDDING DOES NOT APPLY; THE DEFAULTED CONTRACTOR MAY BE DISREGARDED AS A SOURCE OF SUPPLY; AND THE REPURCHASE NEGOTIATIONS MAY BE CONFINED TO THE OFFERORS, OTHER THAN THE DEFAULTED CONTRACTOR, UNDER THE ORIGINAL SOLICITATION. SEE B-165884, MAY 28, 1969; B-171636, JANUARY 17, 1972.

THE ADMINISTRATIVE REPORT FURNISHED OUR OFFICE BY THE DEPARTMENT OF THE ARMY DISCLOSES THAT A FORMAL DETERMINATION WAS MADE THAT THERE WAS NO KNOWN DOMESTIC PRODUCER ABLE TO MEET THE MINIMUM NEEDS OF THE GOVERNMENT, AND THAT THE ONLY KNOWN SOURCE CAPABLE OF FILLING THIS NEED WAS AGA, A FOREIGN CORPORATION. UNDER THE CIRCUMSTANCES, THE NEGOTIATION OF THE REPURCHASE CONTRACT WITH AGA ON A NONCOMPETITIVE BASIS IS CLEARLY JUSTIFIED, AND WE MUST CONCLUDE THAT YOUR FIRM WAS PROPERLY DENIED AN OPPORTUNITY TO COMPETE IN THE REPROCUREMENT.

ACCORDINGLY, YOUR PROTEST IS DENIED.