Propriety of Decision To Award Sole-Source Contract

A firm protested the award of a Navy contract for the performance of the Service Life Extension Program (SLEP) on aircraft. The protester, a current contractor performing standard depot level maintenance on this aircraft, believed it could perform the work and filed a companion suit for injunctive and declaratory relief in the United States District Court. The Court entered a declaratory judgment for the protester, permitting the Navy to proceed with the award at its own risk while preserving the protester's right to have its complaint decided as though the award had not been made. The Court requested the opinion of GAO on the matter. As the result of an earlier study requested by the Navy, the awardee developed a Military Specification kit for installation of SLEP replacement parts by another contractor. However, the Navy decided that it would take about 5 years to complete the kit preparation process, and assigned the contract to the awardee as the most expeditious means of satisfying SLEP because the awardee was believed to be the only firm which could technically satisfy SLEP using a modification program without kits. Because it is a small business, the protester maintained the Navy should have referred the matter to the Small Business Administration (SBA) for a Certificate of Competency (COC). Even though the protester had much experience in maintaining this aircraft, GAO found that the Navy did not act arbitrarily in its determination concerning specifications, and the determination to make the sole source award was not legally objectionable. Referral to the SBA for a COC was inappropriate where a small business was excluded because the Navy was not in a position to provide specifications believed necessary for contract performance and was required to make a sole source award in the absence of such specifications. A COC procedure does not affect an agency determination of its technical needs or the extent to which specifications are considered necessary to reduce risk to an acceptable level. Accordingly, the protest was denied.