B-179815, MAR 14, 1974, 53 COMP GEN 670

B-179815: Mar 14, 1974

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CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - JUSTIFICATION THE DETERMINATION THAT THE PROCUREMENT OF SATELLITES FROM OTHER THAN THE CURRENT SOURCE WOULD ENTAIL UNACCEPTABLE PERFORMANCE AND SCHEDULE RISKS WAS NOT ARBITRARY OR CAPRICIOUS. CONTRACTS - NEGOTIATION - COMPETITION - IMPRACTICABLE TO OBTAIN - JUSTIFICATION FOR NEGOTIATION WHILE 10 U.S.C. 2304(A)(2) AUTHORIZES PROCUREMENT BY NEGOTIATION WHEN THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING. 1974: THE ISSUE PRESENTED BY THIS PROTEST IS WHETHER THE NATIONAL AERONATICS AND SPACE ADMINISTRATION'S (NASA'S) DETERMINATION TO NEGOTIATE A PROCUREMENT OF SATELLITES SOLELY WITH PHILCO-FORD CORPORATION (PHILCO- FORD) WAS ARBITRARY AND CAPRICIOUS.

B-179815, MAR 14, 1974, 53 COMP GEN 670

CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - JUSTIFICATION THE DETERMINATION THAT THE PROCUREMENT OF SATELLITES FROM OTHER THAN THE CURRENT SOURCE WOULD ENTAIL UNACCEPTABLE PERFORMANCE AND SCHEDULE RISKS WAS NOT ARBITRARY OR CAPRICIOUS. CONTRACTS - NEGOTIATION - COMPETITION - IMPRACTICABLE TO OBTAIN - JUSTIFICATION FOR NEGOTIATION WHILE 10 U.S.C. 2304(A)(2) AUTHORIZES PROCUREMENT BY NEGOTIATION WHEN THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING, THE PROSPECT OF UNTIMELY PERFORMANCE ARISING FROM CAUSES OTHER THAN THE TIME REQUIRED FOR FORMAL ADVERTISING PROCEDURE MAY CONSTITUTE JUSTIFICATION FOR NONCOMPETITIVE PROCUREMENT UNDER THE NEGOTIATING AUTHORITY OF 10 U.S.C. 2304(A)(10).

IN THE MATTER OF HUGHES AIRCRAFT COMPANY, MARCH 14, 1974:

THE ISSUE PRESENTED BY THIS PROTEST IS WHETHER THE NATIONAL AERONATICS AND SPACE ADMINISTRATION'S (NASA'S) DETERMINATION TO NEGOTIATE A PROCUREMENT OF SATELLITES SOLELY WITH PHILCO-FORD CORPORATION (PHILCO- FORD) WAS ARBITRARY AND CAPRICIOUS. WE CONCLUDE THAT IT WAS NOT.

THE INSTANT PROCUREMENT IS A PORTION OF A JOINT EFFORT BY NASA AND THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), DEPARTMENT OF COMMERCE, TO CREATE AN OPERATIONAL GEOSTATIONARY SATELLITE SYSTEM. NOAA IS RESPONSIBLE FOR DETERMINING THE SYSTEM'S NEEDS AND FOR ITS OPERATION, WHILE NASA IS RESPONSIBLE FOR THE DESIGN AND DEVELOPMENT OF THE SPACECRAFT AND GROUND SYSTEM, FOR PROCUREMENT OF THE LAUNCH VEHICLE, FOR LAUNCH OPERATIONS, AND FOR INITIAL SATELLITE CHECKOUT AND EVALUATION IN ORBIT. NASA REPORTS THAT THE GOALS OF THE SATELLITE PROGRAM:

*** INCLUDE THE IMPROVEMENT OF ENVIRONMENTAL WARNING SERVICES, WEATHER FORECASTS, AND THE FORECASTING OF SOLAR DISTURBANCES, AS WELL AS THE EXTENSION OF KNOWLEDGE AND UNDERSTANDING OF THE ATMOSPHERE AND ITS PROCESSES BY VIEWING ATMOSPHERIC PHENOMENA.

THE PROTOTYPES OF THESE SATELLITES ARE KNOWN AS SYNCHRONOUS METEOROLOGICAL SATELLITES (SMS) AND THE OPERATIONAL VERSIONS ARE CALLED GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITES (GOES). AS A RESULT OF AN EARLIER NEGOTIATED PROCUREMENT, IN WHICH PHILCO-FORD AND HUGHES AIRCRAFT COMPANY (HUGHES) WERE COMPETITORS, PHILCO-FORD WAS AWARDED A CONTRACT FOR THREE SATELLITES, DESIGNATED SMS-A, SMS-B AND SMS-C. SMS C IS ALSO KNOWN AS GOES-A.

NASA REPORTS THAT THESE THREE SATELLITES, WHICH ARE TO BE LAUNCHED PRIOR TO THE FOURTH QUARTER OF 1974, HAVE A USEFUL LIFE EXPECTANCY OF TWO YEARS. NASA AND NOAA CONTEMPLATE AN OPERATIONAL TWO-SATELLITE SYSTEM WITH THE THIRD SATELLITE BEING HELD IN ORBIT AS A REPLACEMENT. NASA HAS DESCRIBED THE POSSIBLE DEPLOYMENT OF THE SATELLITES AS FOLLOWS:

BECAUSE SMS-A IS THE PROTOTYPE, NOT YET FLIGHT-TESTED, IT CANNOT BE COUNTED ON TO BE PART OF THE OPERATIONAL SYSTEM. ANY CHANGES NECESSARY AS A RESULT OF SMS-A FLIGHT-TESTING WILL BE INCORPORATED INTO SMS-B AND -C (GOES-A), WHICH ARE ENVISIONED AS CONSTITUTING THE TWO-SATELLITE SYSTEM. IN THE FORTUNATE EVENT THAT SMS-A FULLY MEETS OPERATIONAL REQUIREMENTS, IT AND SMS-B WILL FORM THE INITIAL SYSTEM, AND SMS-C (GOES-A) WILL BE LAUNCHED AND STORED IN ORBIT, AVAILABLE FOR ALMOST IMMEDIATE USE WHEN SATELLITE REPLACEMENT IS REQUIRED. NOTWITHSTANDING THAT POSSIBILITY, IT HAS BEEN DETERMINED THAT, TO ENSURE OPERATIONAL CONTINUITY, TWO SPACECRAFT MUST BE AVAILABLE FOR REPLACEMENT PURPOSES AT THE END OF TWO YEARS' USEFUL LIFE EXPECTANCY OF THE FIRST TWO OPERATIONAL SPACECRAFT.

THE TWO REPLACEMENT SPACECRAFT WHICH NASA STATES MUST BE AVAILABLE IN MID -1976, ARE DESIGNATED GOES-B AND GOES-C. IN ITS PROTEST, HUGHES QUESTIONS THE PROPRIETY OF NASA'S DECISION TO PROCURE GOES-B AND -C FROM PHILCO-FORD ON A NONCOMPETITIVE BASIS. IN THIS CONNECTION, WE NOTE THAT NASA HAS EXPRESSED ITS INTENTION TO COMPETITIVELY PROCURE SUBSEQUENT SPACECRAFT.

NASA'S REASONS FOR NEGOTIATING SOLELY WITH PHILCO-FORD ARE ENUMERATED IN DETAIL IN A "JUSTIFICATION FOR NON-COMPETITIVE PROCUREMENT," QUOTED AND DISCUSSED MORE EXTENSIVELY BELOW. WE THINK THESE REASONS ARE FAIRLY SUMMARIZED IN THE FOLLOWING "DETERMINATION AND FINDINGS" EXECUTED BY THE CONTRACTING OFFICER TO SUPPORT THIS NONCOMPETITIVE PROCUREMENT:

DETERMINATION AND FINDINGS

DECISION TO NEGOTIATE AN INDIVIDUAL CONTRACT UNDER 10 U.S.C. 2304 (A)(10)(PCN 490-67917)

FINDINGS

1. THE PROPOSED CONTRACT IS TO PROVIDE FOR THE FABRICATION AND DELIVERY OF TWO (2) FLIGHT MODEL GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITE (GOES) SPACECRAFT. IN ADDITION, ALL NECESSARY GROUND SUPPORT EQUIPMENT, TEST EQUIPMENT, SPARE PARTS, LAUNCH SUPPORT, EXPERIMENT INTEGRATION (PRIMARY PAYLOAD IS THE VISIBLE INFRARED SPIN SCAN RADIOMETER (VISSR)), DRAWINGS, SPECIFICATIONS AND TEST PLANS FOR ALL ITEMS WILL BE REQUIRED ALONG WITH PERIODIC AND FINAL PROGRAM REPORTS. DURATION OF THE PROPOSED EFFORT IS ENVISIONED AS 29 MONTHS.

2. THE GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITE SYSTEM WILL BE A GEOSYNCHRONOUS SPIN STABILIZED SATELLITE TO PROVIDE THE CAPABILITY OF MAPPING EARTH AND CLOUD COVER CONDITIONS TO OBTAIN SUCH GEOPHYSICAL DATA AS CLOUD HEIGHT AND TEMPERATURE, CLOUD MOTION, AND WIND VELOCITIES. BOTH DAYLIGHT AND NIGHT-TIME INFRARED MAPPING WILL BE PROVIDED. THE TWO OPERATIONAL FLIGHT SPACECRAFT WILL BE DESIGNATED GOES-B AND GOES-C FOR USE BY THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA). THE FIRST GENERATION OF SPACECRAFT ARE BEING BUILT BY PHILCO-FORD CORPORATION AND ARE DESIGNATED SMS-A. SMS-B AND GOES-A. WHILE PHILCO-FORD HAS PRODUCED CERTAIN DRAWINGS AND SPECIFICATIONS, THEY DO NOT CONVEY A TOTAL UNDERSTANDING AND FAMILIARITY WITH THE GOES SPACECRAFT AND THUS ARE NOT SUFFICIENT FOR ANOTHER FIRM TO PRODUCE A DUPLICATE SPACECRAFT. FURTHER, THE EXISTING DESIGN ASSURES MEETING THE OPERATIONAL LAUNCH READINESS REQUIREMENT OF CY 1976 AND COMPATIBILITY WITH THE GROUND EQUIPMENT DEVELOPED FOR SMS AND GOES-A.

3. FORMAL ADVERTISING IS NOT FEASIBLE NOR PRACTICABLE AS (1) THE EXISTING DRAWINGS AND SPECIFICATIONS ARE NOT SUITABLE IN THAT THE NATURE OF THE WORK CANNOT BE PRECISELY DESCRIBED, AND (2) ONLY PHILCO FORD, WITH AN EXISTING SPACECRAFT DESIGN, CAN SATISFY THE TECHNICAL AND SCHEDULE REQUIREMENTS OF A CONTINUING OPERATIONAL SYSTEM.

DETERMINATION

ON THE BASIS OF THE ABOVE FINDINGS, I HEREBY DETERMINE THAT THE PROPOSED PROCUREMENT IS FOR WORK FOR WHICH IT IS IMPRACTICAL TO OBTAIN COMPETITION BY FORMAL ADVERTISING.

UPON THE BASIS OF THE DETERMINATION AND FINDINGS ABOVE, I HEREBY DECIDE THAT THIS CONTRACT WILL BE NEGOTIATED PURSUANT TO 10 U.S.C. 2304(A)(10).

MUCH OF HUGHES' PROTEST IS CONSTRUCTED UPON THE MEANING AND INTERRELATIONSHIP OF 10 U.S.C. 2304(A)(2), (A)(10) AND 2304(G). AS HUGHES OBSERVES, 10 U.S.C. 2304(G) REFLECTS A GENERAL POLICY FAVORING THE OBTAINING OF COMPETITION IN NEGOTIATED PROCUREMENTS:

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, INCLUDING PRICE, SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED ***.

AUTHORITY TO PROCURE BY NEGOTIATION IS CONFERRED, INTER ALIA, BY 10 U.S.C. 2304(A)(2) WHEN "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING" AND SIMILARLY, BY 10 U.S.C. 2304(A)(10) WHEN IT IS "IMPRACTICABLE TO OBTAIN COMPETITION."

HUGHES ALSO POINTS OUT THAT THE THRUST OF 10 U.S.C. 2304(A)(10) IS TO PERMIT NEGOTIATION WHEN IT IS IMPRACTICABLE TO SECURE COMPETITION THROUGH FORMAL ADVERTISING, WHICH DOES NOT NECESSARILY PRECLUDE A COMPETITIVELY NEGOTIATED PROCUREMENT.

PLACING EMPHASIS UPON THE SCHEDULE REQUIREMENT THAT THE TWO SPACECRAFT BE DELIVERED IN MID-1976, HUGHES THEN CONSTRUCTS A TWO-STEP ARGUMENT:

1. A CONCERN FOR TIMELY PERFORMANCE JUSTIFIES THE USE OF COMPETITIVE NEGOTIATION IN LIEU OF FORMAL ADVERTISING ONLY WHEN THE EXISTENCE OF A "PUBLIC EXIGENCY" (10 U.S.C. 2304(A)(2)) AND THE IMPRACTICABILITY OF FORMAL ADVERTISING ARE CLEARLY AND CONVINCINGLY ESTABLISHED BY WRITTEN FINDINGS;

2. SIMILARLY, IN VIEW OF THE REQUIREMENT FOR COMPETITION CONTAINED IN 10 U.S.C. 2304(G), NO LESSER JUSTIFICATION SHOULD BE ACCEPTED FOR MOVING FROM COMPETITIVE TO NONCOMPETITIVE NEGOTIATION.

SINCE NASA DOES NOT CONTEND THAT THE "PUBLIC EXIGENCY" EXCEPTION APPLIES TO THE INSTANT PROCUREMENT, HUGHES ARGUES THAT NASA'S CONCERN FOR TIMELY PERFORMANCE DOES NOT SUPPORT NEGOTIATION OF A SOLE-SOURCE CONTRACT WITH PHILCO-FORD UNDER 10 U.S.C. 2304(A)(10).

WE THINK HUGHES' ARGUMENT FAILS TO RECOGNIZE THE SCOPE OF THE "PUBLIC EXIGENCY" EXCEPTION CONTAINED IN 10 U.S.C. 2304(A)(2) AND ILLUSTRATED BY NASA PR 3.202-2. THE STATUTE PROVIDES THAT PURCHASES AND CONTRACTS MAY BE NEGOTIATED IF "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING." NASA PR 3.202-2 STATES:

THIS AUTHORITY MAY BE USED ONLY WHERE THE NEED IS COMPELLING AND OF UNUSUAL URGENCY, AS WHEN THE GOVERNMENT WOULD BE SERIOUSLY INJURED, FINANCIALLY OR OTHERWISE, IF THE SUPPLIES OR SERVICES WERE NOT FURNISHED BY A CERTAIN DATE, AND WHEN THEY COULD NOT BE PROCURED BY THAT TIME BY MEANS OF FORMAL ADVERTISING. ***.

IT IS CLEAR THAT THE "PUBLIC EXIGENCY" EXCEPTION IS CONFINED TO SITUATIONS WHERE THE TIMELY DELIVERY OF URGENTLY NEEDED SUPPLIES OR SERVICES WOULD BE PRECLUDED BY THE DELAY ATTENDANT TO THE DRAFTING, REPRODUCING, SYNOPSIZING AND DISTRIBUTION OF AN INVITATION FOR BIDS, AND THE RECEIPT AND FORMAL OPENING OF THE RESPONSES THERETO.

THE TIME REQUIRED TO CONDUCT A FORMALLY ADVERTISED PROCUREMENT IS NOT THE ONLY CIRCUMSTANCE WHICH MAY JEOPARDIZE TIMELY PERFORMANCE, NOR IS IT THE ONLY CIRCUMSTANCE IN WHICH "TIME OF DELIVERY" MAY NOT PERMIT THE CONDUCT OF COMPETITIVE NEGOTIATIONS (10 U.S.C. 2304(G)). WE THINK IT ALSO SHOULD BE RECOGNIZED THAT CERTAIN SITUATIONS WHICH JUSTIFY THE USE OF 10 U.S.C. 2304(A)(10) NECESSARILY ENTAIL A NONCOMPETITIVE PROCUREMENT. ONE SUCH CIRCUMSTANCE WHICH IS ILLUSTRATED BY NASA PR 3.210-2(I) IS "WHEN SUPPLIES OR SERVICES CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM ('SOLE SOURCE OF SUPPLY')." FOR THIS REASON, WE THINK IT APPROPRIATE TO MEASURE THE PROPRIETY OF THIS PROCUREMENT AGAINST 10 U.S.C. 2304(A)(10) AND (G) INDEPENDENTLY OF THE "PUBLIC EXIGENCY" EXCEPTION IN 10 U.S.C. 2304(A)(2).

IN OUR DECISION B-178179, JULY 27, 1973, WHICH CONCERNED THE PROPRIETY OF A SOLE-SOURCE PROCUREMENT NEGOTIATED UNDER THE AUTHORITY OF 10 U.S.C. 2304(A)(10), WE STATED:

*** IT HAS BEEN THE POLICY OF OUR OFFICE NOT TO QUESTION A CONTRACTING OFFICER'S DECISION TO MAKE A SOLE-SOURCE AWARD UNLESS IT IS CLEAR FROM THE RECORD BEFORE OUR OFFICE THAT HE ACTED IN AN ARBITRARY OR CAPRICIOUS MANNER IN ABUSE OF THAT DISCRETION. ***.

THAT IS THE TEST TO BE EMPLOYED IN THIS CASE.

NASA'S RATIONALE FOR NEGOTIATING WITH PHILCO-FORD ON A SOLE-SOURCE BASIS IS SET FORTH IN TWO DOCUMENTS, ONE OF WHICH IS THE CONTRACTING OFFICER'S "DETERMINATION AND FINDINGS," QUOTED ABOVE. ADDITIONALLY, NASA PR 3- 802.3(A) REQUIRES A PROPOSED NONCOMPETITIVE PROCUREMENT TO BE SUPPORTED BY A WRITTEN "JUSTIFICATION FOR NON-COMPETITIVE PROCUREMENT," WHICH IS TO "SET FORTH FULL AND COMPLETE JUSTIFICATION FOR THE SELECTION ***." THE "JUSTIFICATION" APPLICABLE TO THE INSTANT PROCUREMENT STATES IN PART:

1. I RECOMMEND THAT WE NEGOTIATE WITH PHILCO-FORD CORPORATION, WESTERN DEVELOPMENT LABORATORIES (WDL), PALO ALTO, CALIFORNIA, ONLY, FOR THE PROCUREMENT OF TWO GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITES (GOES B&C).

2. THE SATELLITES ARE TO BE IDENTICAL IN CONFIGURATION AND PERFORM IN THE SAME MANNER AS THE SYNCHRONOUS METEOROLOGICAL SATELLITES SMS-A, SMS-B, AND SMS-C (GOES-A), WHICH ARE CURRENTLY BEING PROCURED FROM PHILCO-FORD UNDER CONTRACT NAS-21575. THE GOES-B AND -C ARE BING PROCURED FOR THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA) FOR OPERATIONAL REPLACEMENT USE TO ASSURE CONTINUOUS CLOUD COVER IMAGING FOR SEVERE STORM FORECASTING AND TRACKING.

3. ANOTHER CRITICAL FEATURE OF THIS PROGRAM IS THE REQUIREMENT FOR GOES B&C TO BE COMPATIBLE WITH THE GROUND EQUIPMENT TO BE DEVELOPED BY PHILCO- FORD AND DEMONSTRATED IN THE SMS AND GOES-A PROGRAM. NOAA REQUIRES THAT GOES B&C PRESENT THE SAME LOOK TO ITS GROUND EQUIPMENT THAT THE EARLIER SMS SATELLITES WILL. (SEE ATTACHED LETTER).

4. ONLY PHILCO-FORD HAS AN ACTUAL SPACECRAFT DESIGN ALREADY DEVELOPED AND NEARLY COMPLETELY TESTED WHICH MEETS THE DESIGN AND SCHEDULE REQUIREMENTS. FOR EXAMPLE, PHILCO-FORD HAS DESIGNED, DEVELOPED, AND TESTED THE SMS ANTENNA WHICH IS AN ADVANCED STATE OF THE ART ELECTRONICALLY DESPUN COMMUNICATION ANTENNA. THIS ANTENNA DESIGN DOES NOT EXIST WITH ANY OTHER CONTRACTOR AND EVEN THOUGH MANUFACTURING DRAWINGS AND SPECIFICATIONS COULD BE TRANSFERRED TO ANOTHER CONTRACTOR, IT IS VERY UNLIKELY THAT SUCH CONTRACTOR COULD BUILD A RELIABLE SYSTEM WITHIN THE TIME AVAILABLE.

5. PHILCO-FORD PRESENTLY IS USING APPROXIMATELY TWO MILLION DOLLARS OF PREVIOUSLY DEVELOPED NASA GROUND TEST EQUIPMENT IN THE SMS PROGRAM. THIS EQUIPMENT WOULD POSE, IF TRANSFERRED TO A NEW CONTRACTOR, A DIFFICULT PROBLEM OF USAGE, UNDERSTANDING, AND LOGIC INTERPRETATION.

6. PHILCO-FORD HAS A TECHNICAL TEAM READILY AVAILABLE THAT CAN BE LOGICALLY PHASED INTO THE FOLLOW-ON PROJECT FROM THE EXISTING CONTRACT NAS5-21575. THE AVAILABILITY OF THIS TEAM OF EXPERIENCED ENGINEERS AND TECHNICIANS OBVIATES THE NECESSITY OF TRAINING PERSONNEL AND FURTHER HAS THE ADVANTAGE OF MINIMIZING MISTAKES TYPICAL OF THE LEARNING PROCESS THAT ARE ALMOST CERTAIN TO OCCUR IN A DEVELOPMENT PROGRAM. * * * * *

8. IN SUMMARY, IT WOULD BE POSSIBLE FOR ONE OR MORE OTHER MANUFACTURERS EITHER TO LEARN TO MAKE A CLOSE COPY OF THE GOES SPACECRAFT, OR TO DEVELOP AN ALTERNATIVE SPACECRAFT THAT WOULD BE ELECTRONICALLY COMPATIBLE WITH THE GROUND EQUIPMENT. THE GOVERNMENT WOULD, HOWEVER, HAVE TO EMBARK ON EITHER OF THESE COURSES WITHOUT ADEQUATE ASSURANCE THAT SUCH AN EFFORT WOULD SUCCEED WITHIN THE TIME REQUIRED, AND WITH LITTLE POSSIBILITY OF RETRIEVAL IN THE EVENT OF TECHNICAL REVERSAL. THUS, THE SHORT LEAD TIME AVAILABLE TO SUPPORT THE NOAA REQUIREMENTS, THE EXPERIENCE, KNOWLEDGE AND FAMILIARITY OF PHILCO FORD WITH THE GOES PROGRAM AND THE ADDITIONAL RISK OF ELECTRONIC INCOMPATIBILITY OR SCHEDULE FAILURE IF ANOTHER CONTRACTOR WERE TO DO THE JOB, INDICATE THAT IT IS IN THE BEST INTERESTS OF THE GOVERNMENT THAT PHILCO-FORD PERFORM THE REQUIRED FOLLOW-ON GOES-B AND -C EFFORT.

THE "ATTACHED LETTER" REFERRED TO IN THE "JUSTIFICATION" WAS WRITTEN BY NOAA'S ASSOCIATE ADMINISTRATOR AND STATES:

*** THAT NOAA PLACES PRIME IMPORTANCE ON MEETING ESTABLISHED SCHEDULES FOR GOES B&C. OUR ANALYSIS OF PROJECTED SPACECRAFT RELIABILITY SHOWS THAT WE ARE ON THE RAGGED EDGE OF BEING ABLE TO MAINTAIN THE REQUIRED TWO OPERATIONAL GOES SATELLITES IN ORBIT THROUGH MID 1976, AT WHICH TIME WE ARE PLANNING ON GOES B BEING IN ORBIT. OUR WORK HAS ALL BEEN DONE ON THE ASSUMPTION OF A HIGHER RELIABILITY RATE FOR THE DELTA THAN HAS BEEN OUR RECENT EXPERIENCE. IF WE HAVE ANY DELTA FAILURES IN THE FIRST THREE LAUNCHES, WE WILL HAVE AN EMERGENCY ON OUR HANDS. A SLIP IN THE CURRENT GOES B&C SCHEDULES IS SIMPLY UNACCEPTABLE TO NOAA. IT INTRODUCES TOO HIGH A RISK.

ANOTHER ASPECT OF THE FOLLOW-ON GOES PROCUREMENT THAT IS OF CONCERN TO US IS COMPATIBILITY WITH NOAA GROUND EQUIPMENT. DURING 1976 WE WILL BE OPERATING PHILCO/FORD SATELLITES. WHEN THE FOLLOW-ON GOES B IS LAUNCHED IT MUST LOOK NO DIFFERENT WHATSOEVER TO OUR GROUND EQUIPMENT. ANY FAILURE HERE WOULD PUT US IN AN UNTENABLE POSITION.

THE BASIC PREMISE FOR THIS PROCUREMENT IS THAT NOAA HAS A NEED FOR TWO GOES-TYPE SPACECRAFT DURING 1976. IN ITS PROTEST, HUGHES STATES THAT THE REDUNDANCY OF AND THE DESIGN LIFETIME GOALS FOR THESE SATELLITES ELIMINATE ANY REAL NEED FOR THEM IN 1976. HOWEVER, WE ARE NOT IN A POSITION TO DISPUTE NASA'S JUDGMENT IN THIS REGARD.

THE "JUSTIFICATION FOR NON-COMPETITIVE PROCUREMENT" AND "DETERMINATION AND FINDINGS," QUOTED ABOVE, ADVANCE A NUMBER OF REASONS WHY, IN NASA'S JUDGMENT, THE INSTANT PROCUREMENT MUST BE NEGOTIATED SOLELY WITH PHILCO- FORD. THESE REASONS, WHICH TO A SIGNIFICANT DEGREE ARE TECHNICAL IN NATURE, HAVE BEEN EXHAUSTIVELY DISCUSSED DURING THE COURSE OF THE PROTEST. FROM OUR REVIEW OF THE RECORD, WE BELIEVE THE FOLLOWING CONSIDERATIONS ARE DETERMINATIVE:

1. THIS PROCUREMENT IS NOT FOR EXPERIMENTAL, BUT FOR OPERATIONAL SATELLITES, THE PROPER FUNCTIONING OF WHICH SIGNIFICANTLY AFFECTS THE OPERATION OF A GOVERNMENT AGENCY. THE IMPORTANCE OF THIS SATELLITE SYSTEM HAS BEEN DESCRIBED AS FOLLOWS BY NOAA'S DIRECTOR OF THE NATIONAL ENVIRONMENTAL SATELLITE SERVICE:

NOAA, AND THE ENTIRE METEOROLOGICAL COMMUNITY, HAVE BEEN ABLE TO DEVELOP THE USES OF METEOROLOGICAL SATELLITE DATA TO THE EXTENT THAT ITS ABSENCE HAS A SERIOUS IMPACT ON THE ANALYSIS AND FORECAST SYSTEMS, AND CONSEQUENTLY UPON THE PUBLIC. THIS SITUATION WILL BECOME INCREASINGLY INTENSE AFTER THE SMS/GOES SYSTEM HAS ADDED THE CAPABILITY FOR CONTINUOUS VIEWING OF THE ATMOSPHERE, WITH HIGH RELIABILITY, BOTH DAY AND NIGHT, NOT NOW POSSIBLE WITH THE USE OF THE ATS TYPE SATELLITE. THIS CAPABILITY OF CONTINUOUS VIEWING WILL BE A MAJOR STEP FORWARD IN CONTINUOUS MONITORING OF WEATHER EVENTS SO ESSENTIAL FOR ISSUING TIMELY AND ACCURATE WARNINGS TO THE PUBLIC FOR ITS SAFETY. THIS HAS BEEN DEMONSTRATED REPEATEDLY WITH ATS WITH RESPECT TO HURRICANES AND TORNADO/THUNDERSTORM TYPE ACTIVITY. DISCONTINUITIES IN SUCH SERVICE, ONCE FULLY ESTABLISHED, WILL BE UNACCEPTABLE TO NOAA, AND INDEED, TO THE PUBLIC. WHILE ONE CANNOT PLACE QUANTITATIVE MEASURES ON LIVES THAT MIGHT BE LOST AND ON PROPERTY DAMAGE DUE TO SEVERE WEATHER LESS ACCURATELY FORECAST DURING A SATELLITE SERVICE OUTAGE, WE BELIEVE IT WOULD BE VERY SIGNIFICANT. AVAILABILITY OF THE GOES B AND C SATELLITES AT THE TIMES INDICATED CONTINUES TO BE A FIRM REQUIREMENT; AS YOU KNOW, IF THERE ARE ANY LAUNCH FAILURES OR A PREMATURE SPACECRAFT FAILURE, WE WILL BE IN SERIOUS DIFFICULTY IN MAINTAINING THE CONTINUITY OF THE OPERATIONAL SYSTEM EVEN WITH THE PRESENTLY PLANNED DATES FOR THE AVAILABILITY OF GOES B AND C.

2. THE THREE SATELLITES NOW BEING COMPLETED BY PHILCO-FORD AND GOES B AND -C MUST ALL "LOOK" THE SAME (IN AN ELECTRONIC SENSE) TO THE SYSTEM'S GROUND STATIONS.

HUGHES ASSERTS THAT IT CAN ACHIEVE THIS COMPATIBILITY BY THE SCHEDULED DELIVERY DATE, AND HAS EXPRESSED WILLINGNESS TO ACCEPT PRICE PENALTIES FOR ANY FAILURE TO MEET TECHNICAL OR SCHEDULE REQUIREMENTS. THE BASIC FACT REMAINS, HOWEVER, THAT HUGHES WOULD HAVE TO INDEPENDENTLY DESIGN CERTAIN COMPONENTS OF THE SATELLITE WHICH AFFECT SIGNAL COMPATIBILITY. WE ARE NOT PREPARED TO QUESTION NASA'S JUDGMENT THAT THIS INTRODUCES AN UNACCEPTABLE TECHNICAL RISK, NOR DO WE THINK IT UNREASONABLE FOR NOAA TO CONSIDER MONETARY PENALTIES AS AN UNSATISFACTORY SUBSTITUTE FOR PROPER PERFORMANCE OF THIS OPERATIONAL SYSTEM.

3. HUGHES HAS ALSO NOT CONTROVERTED THE STATEMENT IN THE "JUSTIFICATION FOR NON-COMPETITIVE PROCUREMENT" THAT "ONLY PHILCO-FORD HAS AN ACTUAL SPACECRAFT DESIGN ALREADY DEVELOPED AND NEARLY COMPLETELY TESTED WHICH MEETS THE DESIGN AND SCHEDULE REQUIREMENTS."

4. WE BELIEVE THE RECORD ESTABLISHES THAT COMPLETE SPECIFICATIONS FOR THE SPACECRAFT ARE NOT NOW AVAILABLE.

THUS NASA'S DETERMINATION TO PROCURE ON A SOLE-SOURCE BASIS REFLECTED TECHNICAL JUDGMENTS INVOLVING CERTAIN PERFORMANCE AND SCHEDULE REQUIREMENTS. ALTHOUGH WE HAVE CAREFULLY EXAMINED HUGHES' SUBMISSIONS, WE CONCLUDE THAT NASA HAS CLEARLY AND CONVINCINGLY ESTABLISHED THAT FORMAL ADVERTISING IS NOT FEASIBLE AND PRACTICABLE (10 U.S.C. 2304(A)(10)); AND THAT THE "TIME OF DELIVERY" AND "THE NATURE AND REQUIREMENTS OF THE SUPPLIES *** TO BE PROCURED" (10 U.S.C. 2304(G)) PRECLUDE COMPETITIVE NEGOTIATIONS. ACCORDINGLY, WE DO NOT REGARD AS ARBITRARY OR CAPRICIOUS THE DETERMINATION TO NEGOTIATE WITH PHILCO-FORD ON A SOLE-SOURCE BASIS.