B-194445.4,(1), MAR 27, 1981

B-194445.4,(1): Mar 27, 1981

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SINCE DELAY IS PRACTICABLE UNDER CIRCUMSTANCES AND BECAUSE OPTION SHOULD NOT BE EXERCISED IF SITUATION WHICH ORIGINALLY JUSTIFIED SOLE-SOURCE AWARD NO LONGER EXISTS. OUR DECISION WAS ISSUED AT THE REQUEST OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA. WHICH WAS CONSIDERING AERO'S REQUEST FOR INJUNCTIVE AND DECLARATORY RELIEF IN THE MATTER. AERO COMPLAINED THAT IF THE MANUFACTURE OF THE PARTS (SOME HAVING SUBSTANTIAL LEAD TIMES) WERE COMPLETED AS ORDERED. THE FOLLOW-ON SLEP CONTRACT FOR THE FOUR TACAMO AIRCRAFT MIGHT HAVE TO BE AWARDED TO LOCKHEED. TO DETERMINE WHETHER IT IS LEGALLY AND PRACTICALLY APPROPRIATE FOR IT TO TERMINATE ITS CONTRACT WITH LOCKHEED FOR THE SOLE-SOURCE PROCUREMENT OF SLEP ON FOUR KC-130F SERIES AIRCRAFT IF IT IS DETERMINED THAT THE PROPOSED EXCHANGE OF PARTS IS A FACTOR PRECLUDING COMPETITION OF SLEP FOR *** FOUR FY 1981 EC-130(G/Q) TACAMO'S. ***" AS WE UNDERSTAND THE COURT'S REQUEST.

B-194445.4,(1), MAR 27, 1981

DIGEST: DECISION WHETHER TO EXERCISE OPTION TO INCREASE WORK UNDER SOLE SOURCE CONTRACT SHOULD BE DELAYED PENDING COURT-ORDERED EVALUATION OF POSSIBILITY OF COMPETING SUCH WORK, SINCE DELAY IS PRACTICABLE UNDER CIRCUMSTANCES AND BECAUSE OPTION SHOULD NOT BE EXERCISED IF SITUATION WHICH ORIGINALLY JUSTIFIED SOLE-SOURCE AWARD NO LONGER EXISTS.

AERO CORPORATION - NAVY REQUEST FOR ADVANCE DECISION:

THIS CASE RESPONDS TO A REQUEST FOR AN ADVANCE DECISION SUBMITTED BY THE DEPARTMENT OF THE NAVY REGARDING A SOLE-SOURCE CONTRACT WITH LOCKHEED- GEORGIA CORPORATION (LOCKHEED) IN CONNECTION WITH THE NAVY'S C 130 SERIES AIRCRAFT SERVICE LIFE EXTENSION PROGRAM (SLEP).

SLEP INVOLVES THE PROCUREMENT AND INSTALLATION OF PARTS TO EXTEND THE PLANNED SERVICE LIFE OF THOSE AIRCRAFT FROM 15,000 TO 25,000 HOURS OF OPERATION. THE PROGRAM CONCERNS A BASIC QUANTITY OF 13 AIRCRAFT UNDER A CONTRACT WITH LOCKHEED, WHICH CONTAINS OPTIONS FOR 7 ADDITIONAL AIRCRAFT, AND 29 AIRCRAFT ORIGINALLY CONTEMPLATED FOR FOLLOW-ON CONTRACTS. IN OUR DECISION IN AERO CORPORATION, 59 COMP.GEN. 146 (1979), 79-2 CPD 430, WE CONSIDERED A PROTEST BY AERO CORPORATION AGAINST THE NAVY'S AWARD TO LOCKHEED ON A SOLE-SOURCE BASIS. OUR DECISION WAS ISSUED AT THE REQUEST OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, WHICH WAS CONSIDERING AERO'S REQUEST FOR INJUNCTIVE AND DECLARATORY RELIEF IN THE MATTER. (AERO CORPORATION V. DEPARTMENT OF THE NAVY, CIVIL ACTION NO. 79-2944.) WE CONCLUDED THAT THE NAVY'S CONCERN WITH THE TECHNICAL RISK OF HAVING A FIRM OTHER THAN LOCKHEED PERFORM THE WORK, COUPLED WITH SCHEDULING CONSTRAINTS, JUSTIFIED A SOLE-SOURCE AWARD FOR THE BASIC QUANTITY OF 13 AIRCRAFT.

HOWEVER, WE SUGGESTED THAT BASED ON THE KNOWLEDGE IT MIGHT GAIN BY MONITORING LOCKHEED'S INITIAL SLEP PERFORMANCE, THE NAVY MIGHT FIND COMPETITION PRACTICABLE WITH RESPECT TO THE OPTION QUANTITY AND THE ADDITIONAL 29 AIRCRAFT DESIGNATED FOR FOLLOW-ON SOLE-SOURCE CONTRACTS WITH LOCKHEED.

ON MARCH 4, 1980, THE COURT ORDERED THE NAVY TO FURTHER CONSIDER THE FEASIBILITY OF COMPETING A SLEP CONTRACT FOR AT LEAST THE FOLLOW-ON REQUIREMENT OF 29 AIRCRAFT.

THE NAVY SUBSEQUENTLY ORDERED LOCKHEED TO DIVERT PARTS ORIGINALLY ORDERED FOR FOUR OF FIVE KC-130F AIRCRAFT INCLUDED IN THE OPTION QUANTITY FOR USE IN FOUR OF THE FOLLOW-ON QUANTITY EC-130G/Q TACAMO AIRCRAFT. FN1 THE NAVY ASSERTS IT TOOK THIS ACTION IN ORDER TO INSURE THAT ITS SLEP ON THE FOUR CRITICAL TACAMO AIRCRAFT WOULD BE COMPLETED EXPEDITIOUSLY, AND STATES THAT SUBSTITUTE PARTS FOR THE FOUR KC-130FS WOULD BE REORDERED.

UPON BEING TOLD OF THIS DECISION, AERO COMPLAINED THAT IF THE MANUFACTURE OF THE PARTS (SOME HAVING SUBSTANTIAL LEAD TIMES) WERE COMPLETED AS ORDERED, THE FOLLOW-ON SLEP CONTRACT FOR THE FOUR TACAMO AIRCRAFT MIGHT HAVE TO BE AWARDED TO LOCKHEED, THEREBY REDUCING THE NUMBER OF AIRCRAFT WHICH MIGHT BE COMPETED FROM 29 TO 25. AERO ASKED THE COURT TO ENJOIN THE NAVY FROM ORDERING ANY PARTS FOR ANY OF THE 29 FOLLOW-ON AIRCRAFT.

IN AN ORDER DATED AUGUST 15, 1980, THE COURT DIRECTED:

"THAT THE NAVY SEEK THE ADVICE OF THE GAO, WITH A COPY OF THE SUBMISSION AND THE GAO RESPONSE TO BE FILED IN THIS COURT, TO DETERMINE WHETHER IT IS LEGALLY AND PRACTICALLY APPROPRIATE FOR IT TO TERMINATE ITS CONTRACT WITH LOCKHEED FOR THE SOLE-SOURCE PROCUREMENT OF SLEP ON FOUR KC-130F SERIES AIRCRAFT IF IT IS DETERMINED THAT THE PROPOSED EXCHANGE OF PARTS IS A FACTOR PRECLUDING COMPETITION OF SLEP FOR *** FOUR FY 1981 EC-130(G/Q) TACAMO'S. ***"

AS WE UNDERSTAND THE COURT'S REQUEST, THE COURT SEEKS TO DETERMINE WHETHER IN VIEW OF THE DIVERSION OF THE KC-130F PARTS THE NAVY COULD EXCHANGE THE AIRCRAFT AS WELL, SUBSTITUTING FOUR TACAMO AIRCRAFT FOR FOUR OF THE FIVE KC-130FS WHICH WERE INCLUDED AS AN OPTION QUANTITY IN THE INITIAL LOCKHEED AWARD. THE RESULT WOULD BE THE POSSIBLE LATER COMPETITION FOR SLEP FOR THE FOUR KC-130FS.

WE BELIEVE THAT THE RESULT DESIRED BY THE COURT DOES NOT NECESSARILY REQUIRE THAT THE NAVY TERMINATE ANY PORTION OF THE LOCKHEED CONTRACT. WHILE TWO OF THE ORIGINAL SEVEN OPTIONAL AIRCRAFT HAVE BEEN ORDERED FROM LOCKHEED, THE OPTION FOR THE KC-130F QUANTITY HAS NOT BEEN EXERCISED. LONG AS THE OPTION IS NOT EXERCISED THERE IS NO LEGAL IMPEDIMENT TO INCLUDING THESE AIRCRAFT IN ANY NEW COMPETITIVE PROCUREMENT. OUR REVIEW OF THE RECORD INDICATES THAT AS A PRACTICAL MATTER THE NAVY CAN DEFER DECIDING WHETHER TO ORDER SLEP FOR ALL OF THESE AIRCRAFT FROM LOCKHEED UNTIL THE NAVY COMPLETES A REVIEW NOW UNDERWAY TO DETERMINE WHETHER ADDITIONAL SLEP REQUIREMENTS CAN BE PROCURED COMPETITIVELY. CONSEQUENTLY, NO DECISION SHOULD BE TAKEN WHICH WOULD PRECLUDE COMPETITION REGARDING AT LEAST 34 AIRCRAFT - THE PLANNED 29 AIRCRAFT FOLLOW-ON QUANTITY PLUS THE FIVE KC-130FS - UNTIL THE RESULTS OF THAT REVIEW ARE KNOWN.

ANALYSIS

WE HAVE AFFORDED AERO AND LOCKHEED AN OPPORTUNITY TO COMMENT SO THAT WE WOULD HAVE THE BENEFIT OF THEIR VIEWS IN REACHING A DECISION. THE FOLLOWING DISCUSSION INCORPORATES THESE COMMENTS AND ANALYZES THE MATTER IN DETAIL.

ON THE RECORD BEFORE US, IT APPEARS THE FOUR KC-130F AIRCRAFT WITH WHICH THE COURT IS CONCERNED ARE PART OF ONE OF TWO OPTION QUANTITIES FOR A TOTAL OF SEVEN AIRCRAFT WHICH WERE INCLUDED IN THE ORIGINAL LOCKHEED CONTRACT THE KC-130F OPTION QUANTITY PERMITS THE NAVY TO ORDER SLEP FOR FIVE KC-130FS. THIS OPTION HAS NOT BEEN EXERCISED, NEED NOT BE EXERCISED BEFORE OCTOBER 17, 1981, AND, THE NAVY INDICATES, WILL NOT BE EXERCISED BEFORE THAT DATE. A SECOND OPTION QUANTITY FOR TWO TACAMO AIRCRAFT, IN ADDITION TO THE FOUR OF CONCERN HERE, HAS BEEN EXERCISED.

ALTHOUGH THE COURT HAS USED THE WORD "TERMINATE" IN FRAMING THE NAVY'S REQUEST, THERE IS NO NEED TO TERMINATE WORK FOR THE FIVE KC-130F SLEP OPTION QUANTITY IF NO ORDER HAS BEEN OR SHOULD BE PLACED FOR ANY OF IT. THE COURT NEED ONLY ORDER THE NAVY NOT TO EXERCISE THE KC-130F OPTION.

WE RECOGNIZE, OF COURSE, THAT THE COURT'S REQUEST FOCUSES ON FOUR KC 130FS. AT THE TIME IT ORDERED THE NAVY TO SEEK OUR OPINION, ONLY PARTS FOR FOUR AIRCRAFT WERE IN ISSUE. AS WE VIEW THIS MATTER, HOWEVER, THE ESSENTIAL QUESTION IS NOT WITH WHETHER FOUR OR FIVE AIRCRAFT SHOULD BE EXCHANGED FOR FOUR OR FIVE OTHERS, BUT WITH WHETHER THE NAVY MUST BE CONCERNED WITH THE POSSIBLE PROCUREMENT OF SLEP FOR AT LEAST 34 AIRCRAFT - THE FIVE AIRCRAFT CONTAINED IN THE ORIGINAL CONTRACT OPTION AS WELL AS THE 29 AIRCRAFT INITIALLY SLATED FOR A FOLLOW-ON CONTRACT.

IN THIS REGARD, THE NAVY'S POSITION RAISES A POINT OF CONCERN WHICH WE BELIEVE DESERVES COMMENT. ON THE ONE HAND, THE NAVY ARGUES THAT OUR EARLIER DECISION AND THAT ISSUED BY THE COURT APPROVED THE SOLE-SOURCE AWARD OF SLEP FOR 20 AIRCRAFT INCLUDING THE SEVEN ORIGINAL OPTIONAL AIRCRAFT. ON THE OTHER HAND, THE NAVY HAS SINCE ADDED AS OPTIONS TO THE LOCKHEED CONTRACT SLEP FOR MOST OF ITS REMAINING C-130 SERIES AIRCRAFT, I.E., WORK WHICH ORIGINALLY WAS TO BE INCLUDED IN FOLLOW-ON CONTRACTS; THE NAVY DOES NOT VIEW THIS ACTION AS INCONSISTENT WITH THE COURT'S MARCH 4 ORDER SINCE THE NAVY DOES NOT INTEND TO EXERCISE THESE OPTIONS IF COMPETITION IS POSSIBLE. OF COURSE, THE DAR ITSELF PRECLUDES THE NAVY FROM DOING SO IN EITHER INSTANCE.

DAR SEC. 1-1505 SETS OUT THE REQUIREMENTS WHICH MUST BE MET BEFORE EXERCISING AN OPTION FOR ANY ADDITIONAL QUANTITY OF WORK. DAR SEC. 1 1505(C) PROVIDES, INTER ALIA, THAT:

"OPTIONS SHOULD BE EXERCISED ONLY IF IT IS DETERMINED THAT:

(III) THE EXERCISE OF THE OPTION IS THE MOST ADVANTAGEOUS METHOD OF FULFILLING THE GOVERNMENT'S NEED, PRICE, AND FACTORS IN (E) AND (F) BELOW CONSIDERED."

DAR SEC. 1-1505(F) STATES THAT:

"INSOFAR AS FACTORS OTHER THAN PRICE WERE CONSIDERED FOR AWARD OF AN ORIGINALLY NEGOTIATED PROCUREMENT ***, AND ARE THEREFORE FOR CONSIDERATION IN EXERCISING THE OPTION, THE DETERMINATION UNDER (C)(III) SHALL BE MADE ON THE BASIS OF ONE OF THE FOLLOWING.

"(1) A NEW SOLICITATION FAILS TO PRODUCE A MORE ADVANTAGEOUS OFFER ***.

"(2) AN INFORMAL INVESTIGATION OF THE MARKET INDICATES CLEARLY THAT A MORE ADVANTAGEOUS OFFER *** CANNOT BE OBTAINED, AND THAT A NEW SOLICITATION WOULD OBVIOUSLY SERVE NO USEFUL PURPOSE ***.

"(3) THE TIME BETWEEN THE AWARD OF THE CONTRACT CONTAINING THE OPTION AND THE EXERCISE OF THE OPTION IS SO SHORT THAT IT INDICATES CLEARLY THAT THE OPTION IS THE MOST ADVANTAGEOUS OFFER OBTAINABLE ***."

THUS, "FACTORS OTHER THAN PRICE" WHICH WERE CONSIDERED IN MAKING AWARD INITIALLY MUST BE CONSIDERED AGAIN BEFORE AN OPTION MAY BE EXERCISED. IN THE INTERIM BETWEEN AWARD OF A NONCOMPETITIVE CONTRACT AND THE PROPOSED EXERCISE OF A CONTRACT OPTION COMPETITION BECOMES FEASIBLE, THE OPTION SHOULD BE EXERCISED ONLY IF A MORE ADVANTAGEOUS OFFER CANNOT BE OBTAINED.

REGARDING THE NAVY'S BELIEF THAT IT WAS FREE TO EXERCISE THE OPTIONS INCLUDED IN THE ORIGINAL CONTRACT WITHOUT CHALLENGE, OUR PRIOR DECISION RECOMMENDED THAT THE NAVY REVIEW ITS SOLE SOURCE DETERMINATION "BEFORE EXERCISING ANY OPTION OR AWARDING A FOLLOW-ON CONTRACT FOR ALL OR PART OF THE REMAINING 29 AIRCRAFT." OUR REFERENCE TO "ANY OPTION" WAS DIRECTED AT THE PROPOSED SEVEN-AIRCRAFT OPTION QUANTITY, A POINT WHICH THE NAVY SHOULD HAVE UNDERSTOOD SINCE THERE WAS NO OPTION IN THE PROPOSED LOCKHEED AWARD WHICH AT THAT TIME COVERED ANY OF THE 29 FOLLOW ON AIRCRAFT. OUR DECISION APPROVED ONLY THE AWARD OF AN INITIAL 13 AIRCRAFT PROGRAM. WE TOOK NO OBJECTION TO INCLUSION OF THE PROPOSED SEVEN-AIRCRAFT OPTION QUANTITY SINCE WE ASSUMED IN VIEW OF OUR RECOMMENDATION THAT THE NAVY WOULD COMPLY WITH THE DAR REQUIREMENT IF AN ORDER WAS TO BE PLACED.

EVEN THOUGH THE NAVY MAY HAVE MISUNDERSTOOD ITS OBLIGATION IN THIS REGARD, NO HARM HAS BEEN DONE AT LEAST WITH RESPECT TO THE FIVE KC-130F OPTION QUANTITY, SINCE THE OPTION HAS NOT BEEN EXERCISED AND SINCE, AS EXPLAINED BELOW, THERE IS NO IMMEDIATE NEED TO DECIDE WHETHER ADDITIONAL SLEP SHOULD BE ORDERED FROM LOCKHEED.

THUS, WE TURN TO BRIEFLY REVIEW HOW PRACTICAL CONSIDERATIONS MIGHT AFFECT THE NAVY'S DECISION REGARDING EXERCISE OF THE KC-130F OPTION. AS A RESULT OF THE COURT'S MARCH 4 ORDER, THE NAVY ESTABLISHED A REVIEW TEAM, INCLUDING PERSONNEL DETAILED TO LOCKHEED'S FACILITY TO MONITOR LOCKHEED'S PERFORMANCE OF SLEP ON THE FIRST FOUR AIRCRAFT OF THE BASIC CONTRACT. PERSONNEL MONITORING SLEP WERE DIRECTED TO FULLY DOCUMENT AND EXPLAIN ANY FUNCTIONS FOUND TO BE SUITABLE OF PERFORMANCE ONLY BY AN AIRFRAME MANUFACTURER SUCH AS LOCKHEED. IN A RELATED EFFORT, THE NAVY HAS IDENTIFIED A LARGE PORTION OF THE DOCUMENTATION WHICH WILL BE REQUIRED TO COMPLETE ITS EVALUATION, MUCH OF WHICH IT DETERMINED WAS ALREADY IN GOVERNMENT HANDS. IT HAS ALSO IDENTIFIED MUCH OF THE TOOLING REQUIRED AND, IN A PRELIMINARY REPORT, INDICATES THAT TECHNICAL RISK MAY BE MANAGEABLE AT LEAST IN CONNECTION WITH THE TASKS PERFORMED ON THE FIRST AIRCRAFT.

A FINAL NAVY DECISION BASED ON WORK REQUIRED TO COMPLETE SLEP ON THE FOUR INITIAL AIRCRAFT IS DUE BY MAY 1981. IN THE INTERIM, THE NAVY SAYS IT IS CONDUCTING A CONTINUING EXAMINATION OF THE FEASIBILITY OF A COMPETITIVE PROCUREMENT FOR SOME OR ALL OF SLEP AND WILL NOT POSTPONE A DECISION IF BASED ON INITIAL REVIEW IT IS ABLE TO COMPETE ANY PORTION OF SLEP. THIS RESPECT, AS STATED ABOVE, THE NAVY DOES NOT INTEND TO EXERCISE THE KC -130F ADDITIONAL AIRCRAFT OPTION UNTIL OCTOBER OF 1981. THUS, THE NAVY REVIEW TEAM'S DECISION AS TO WHETHER SLEP ON C-130 SERIES AIRCRAFT CAN BE PROCURED COMPETITIVELY WILL BE AVAILABLE BEFORE THE OPTION WOULD BE EXERCISED IN ANY EVENT.

WE ALSO NOTE HERE THAT THE RECORD INDICATES THAT SLEP ON THE OPTION QUANTITY KC-130FS IS NOT SCHEDULED FOR SOME TIME; IN FACT, THE NAVY EVIDENTLY INTENDS TO HAVE SLEP BEGUN ON THE FIRST TACAMO AIRCRAFT BEFORE IT IS BEGUN ON THOSE KC-130FS. THUS, IF LATE IN !981 THE NAVY DETERMINES THAT AERO IN FACT CAN PERFORM SLEP ON KC-130FS, A COMPETITIVE PROCUREMENT AT THAT TIME WOULD NOT CAUSE AN UNACCEPTABLE ALTERATION IN THE KC-130F SLEP SCHEDULE.

A FINAL PRACTICAL CONSIDERATION IN THIS MATTER INVOLVES THE KC-130F PARTS WHICH ARE TO REPLACE THOSE DIVERTED FOR THE TACAMO AIRCRAFT AND WHICH, BECAUSE OF THE SUBSTANTIAL LENGTH OF TIME THAT IT TAKES TO MANUFACTURE THEM, ALREADY HAVE BEEN ORDERED BY THE NAVY. THOSE PARTS APPARENTLY HAVE BEEN ORDERED IN A FORM WHICH MAY AFFECT THEIR SUITABILITY FOR USE BY ANY CONTRACTOR OTHER THAN LOCKHEED, NOTWITHSTANDING WHETHER THE NAVY DETERMINES THAT COMPETITITION OTHERWISE WOULD BE PRACTICABLE. FN2 (THE NAVY CONCEDES THAT THIS MIGHT BE THE CASE, AND THE SLEP MONITORING TEAM IS REVIEWING THE MATTER.)

HOWEVER, THE NAVY INDICATES THAT THE LAST STAGE IN THE MANUFACTURE OF THE PARTS BEING ORDERED FOR OTHER AIRCRAFT TO UNDERGO SLEP IN THE FOLLOW-ON PHASE, INCLUDING THE PARTS DIVERTED TO THE TACAMO AIRCRAFT, CAN BE DEFERRED UNTIL AT LEAST AUGUST 1, 1981. DATA SUBMITTED IN CONNECTION WITH THE INTERIM REPORT INDICATE THAT THE TIME REQUIRED FOR THAT LAST STAGE REPRESENTS A COMPARATIVELY SMALL PORTION OF THE NAVY'S LEAD TIME REQUIREMENT. THE NAVY HAS NOT SHOWN WHY THE SAME TIME FRAMES DO NOT ALSO APPLY TO THE KC-130F REPLACEMENT PARTS, AND ITS EXPERIENCE WITH THE FIRST AIRCRAFT TO UNDERGO SLEP - THE PRELIMINARY NAVY REPORT INDICATES THAT DIFFICULTY WAS ENCOUNTERED USING SOME PARTS - SUGGESTS THAT IT MIGHT WELL BE WISE TO POSTPONE THE LAST STAGE AS LONG AS PRACTICAL EVEN IF LOCKHEED ULTIMATELY PERFORMS THE WORK. WHILE ADDITIONAL PARTS ARE REQUIRED TO PERFORM THE KC-130F SLEP BEYOND THOSE REQUIRED FOR THE TACAMO AIRCRAFT, AND WHILE THOSE PARTS ARE CURRENTLY IN THE PARTS STREAM, A DECISION TO DEFER THE COMPLETION OF THE PARTS WILL AT LEAST CONTRIBUTE TOWARD PRESERVING THE STATUS QUO PENDING COMPLETION OF THE NAVY SLEP MONITORING TEAM'S REPORT. ACCORDINGLY, AND SINCE A NAVY DECISION ON WHETHER A FIRM OTHER THAN LOCKHEED CAN PERFORM SLEP ON KC-130FS IS DUE BEFORE THE NAVY PLANS TO EXERCISE THE OPTION FOR SLEP ON THE KC-130FS, WE RECOMMEND THAT THE NAVY SIMPLY DELAY COMPLETION OF THE KC-130F PARTS. IF THE NAVY'S FINAL DECISION REQUIRES EXERCISE OF THE OPTION, THE KC-130F PARTS WHICH ALREADY HAVE BEEN ORDERED AND WHICH WOULD REPLACE THOSE TAKEN FOR THE TACAMO AIRCRAFT THEN WOULD BE COMPLETED IN THE FORM FOR INSTALLATION BY LOCKHEED. ON THE OTHER HAND, IF THE REPORT SUPPORTS A COMPETITIVE PROCUREMENT, THE REPLACEMENT PARTS COULD BE COMPLETED IN WHATEVER FORM THE REPORT SUGGESTS.

FN1 THROUGHOUT, WE WILL REFER TO THE EC-130G/QS AS TACAMO AIRCRAFT. THE NAVY VIEWS TIMELY COMPLETION OF THESE AIRCRAFT, WHICH ARE DEDICATED TO THE TACAMO MISSION, AS ITS MOST CRITICAL REQUIREMENT. THESE AIRCRAFT ARE TO BE USED TO PROVIDE AIRBORNE COMMUNICATIONS WITH THE TRIDENT FLEET IN THE EVENT OF WAR AND MUST BE AVAILABLE TO MEET SCHEDULING REQUIREMENTS SET BY THE JOINT CHIEFS OF STAFF. THREE TACAMO AIRCRAFT WERE INCLUDED IN THE ORIGINAL QUANTITY OF 13 AIRCRAFT ORDERED. FOUR WERE SCHEDULED FOR THE INITIAL FOLLOW-ON PHASE. WE ARE CONCERNED HERE WITH THOSE FOUR.

FN2 AS INDICATED ON PAGE 2 OF THIS DECISION WITH RESPECT TO THE KC 130F PARTS THAT WERE DIVERTED FOR USE IN FOLLOW-ON TACAMO AIRCRAFT, THE INSTANT CONTROVERSY AROSE ESSENTIALLY BECAUSE OF AERO'S CONCERN THAT THE FORM IN WHICH PARTS FOR C-130 SERIES AIRCRAFT ARE ORDERED TO BE MANUFACTURED MAY BE THE DETERMINING FACTOR IN WHETHER A CONTRACTOR OTHER THAN LOCKHEED CAN USE THEM IN PERFORMING SLEP.