Protest of Army Contract Award

B-192248,B-192748,B-194585: Aug 29, 1979

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Ikard Manufacturing Co. protested the award of a contract, for 18 hydraulic locks for use in the HERCULES Missile System, by the Army Missile Materiel Readiness Command (MIRCOM). Award was made to Sonora Manufacturing, Inc. while Ikard's protest to GAO was pending. Ikard also protested the cancellation of another invitation for bids for the production of an additional 32 hydraulic locks. The solicitation, a total small business set-aside, was increased from 86 units to 118 to include reprocurement of 32 units because of the default termination of a contract with Ikard under an prior procurement. The earlier procurement for 32 hydraulic locks was canceled because its Technical Data Package specifications had not been updated to provide for substitutes for the castings stipulated, which would also meet the Government's minimum needs. Ikard raised several protest issues: alleged acts of favoritism by MIRCOM toward Sonora and Precision Specialty Corp.; a restriction of bidder eligibility to prior producers, giving the illusion of a competitive procurement, but actually amounting to a sole-source contract for Sonora; and the charge that Sonora should not have been considered for the award in any case because its first article had been rejected under a prior procurement. The Army denied partiality and pointed out that Ikard had been awarded 39 contracts since the disputed award to Sonora, and GAO agreed that no pattern of partiality was evident. As for the alleged noncompetitive nature of restricting bidding to prior producers, GAO noted that competition was always to be encouraged, but found nothing objectionable in the procurement practices followed by MIRCOM, particularly in view of the critical shortage felt by the Army at the time, partly as a result of Ikard's default. Sonora's first article submitted had been rejected, as Ikard charged, but it was almost acceptable, and the Army acted reasonably in proceeding on the assumption that an acceptable first article would soon be forthcoming, as indeed it was. The protest was partly dismissed and partly denied.