B-199630, FEB 18, 1981

B-199630: Feb 18, 1981

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WHILE REPROCUREMENTS ARE NOT STRICTLY GOVERNED BY PROCUREMENT STATUTES AND REGULATIONS GAO WILL CONSIDER WHETHER AGENCY'S ACTION IN CONNECTION WITH SOLE-SOURCE AWARD OF REPROCUREMENT CONTRACT ARE REASONABLE AND CONSISTENT WITH DUTY TO MITIGATE DAMAGES. 2. SOLE-SOURCE AWARD TO ONLY FIRM QUALIFIED FOR WAIVER OF FIRST ARTICLE TEST REQUIREMENT IS REASONABLE WHERE AGENCY DETERMINES SUCH WAIVER IS ESSENTIAL TO FULFILLMENT OF REQUIRED DELIVERY SCHEDULE AND NEITHER RECORD NOR PROTESTER SHOWS THAT ANOTHER FIRM WOULD QUALIFY FOR SUCH WAIVER. WAS TERMINATED FOR DEFAULT WITH THE 128 UNITS REMAINING UNDELIVERED. HYDRAULICS MAINTAINS THAT IT IS A SOURCE FOR THE TESTERS AND. SHOULD HAVE BEEN SOLICITED. THE AIR FORCE ADVISES THAT THE AWARD WAS MADE ON THE BASIS OF URGENCY TO THE ONLY SOURCE.

B-199630, FEB 18, 1981

DIGEST: 1. WHILE REPROCUREMENTS ARE NOT STRICTLY GOVERNED BY PROCUREMENT STATUTES AND REGULATIONS GAO WILL CONSIDER WHETHER AGENCY'S ACTION IN CONNECTION WITH SOLE-SOURCE AWARD OF REPROCUREMENT CONTRACT ARE REASONABLE AND CONSISTENT WITH DUTY TO MITIGATE DAMAGES. 2. SOLE-SOURCE AWARD TO ONLY FIRM QUALIFIED FOR WAIVER OF FIRST ARTICLE TEST REQUIREMENT IS REASONABLE WHERE AGENCY DETERMINES SUCH WAIVER IS ESSENTIAL TO FULFILLMENT OF REQUIRED DELIVERY SCHEDULE AND NEITHER RECORD NOR PROTESTER SHOWS THAT ANOTHER FIRM WOULD QUALIFY FOR SUCH WAIVER.

HYDRAULICS INTERNATIONAL, INC.:

HYDRAULICS INTERNATIONAL, INC. PROTESTS THE AWARD OF A SOLE-SOURCE LETTER CONTRACT TO TELEDYNE SPRAGUE ENGINEERING BY THE SAN ANTONIO AIR LOGISTICS CENTER, KELLY AIR FORCE BASE, TEXAS FOR THE REPROCUREMENT OF 128 CABIN PRESSURE TESTERS. THE ORIGINAL CONTRACT FOR THE TESTERS HAD BEEN AWARDED TO UNI-SYSTEMS, INC. AND WAS TERMINATED FOR DEFAULT WITH THE 128 UNITS REMAINING UNDELIVERED. HYDRAULICS MAINTAINS THAT IT IS A SOURCE FOR THE TESTERS AND, THEREFORE, SHOULD HAVE BEEN SOLICITED. WE FIND THE PROTEST TO BE WITHOUT MERIT.

THE AIR FORCE ADVISES THAT THE AWARD WAS MADE ON THE BASIS OF URGENCY TO THE ONLY SOURCE, OTHER THAN UNI-SYSTEMS, WHICH WAS ABLE TO QUALIFY FOR WAIVER OF FIRST ARTICLE TESTING. THE AIR FORCE FOUND THAT DELAY IN ACQUIRING THE TESTERS, WHICH ARE USED IN SERVICING F-16, F-15, F-4 AND A- 10 AIRCRAFT, WOULD HAVE A SERIOUS ADVERSE IMPACT ON THE AGENCY'S MISSION AND IMPACT ON THE GOVERNMENT'S COMMITMENTS TO VARIOUS FOREIGN GOVERNMENTS.

WHILE NOT DISPUTING THE AIR FORCE'S AUTHORITY TO NEGOTIATE THE CONTRACT, OR CONTENDING THAT IT COULD QUALIFY FOR A WAIVER OF FIRST ARTICLE TESTING, HYDRAULICS ARGUES THAT IT "CAN DELIVER THE ITEMS SOONER" THAN TELEDYNE AND MAINTAINS THAT THE TESTERS IT HAS PRODUCED UNDER PRIOR CONTRACTS ARE ACCEPTABLE EVEN THOUGH THEY WERE DESIGNED TO BE POWERED BY ELECTRICAL MOTORS RATHER THAN GASOLINE ENGINES AS REQUIRED BY THE AGENCY. IN THIS REGARD, THE PROTESTER CONTENDS THAT THE SUBSTITUTION OF THE POWER PLANT IS A MINOR JOB AND ITS BASIC TESTER IS TECHNICALLY THE SAME AS THAT PROCURED FROM TELEDYNE.

WHEN A PROCUREMENT IS FOR THE ACCOUNT OF A DEFAULTED CONTRACTOR, THE STATUTES AND REGULATIONS GOVERNING PROCUREMENT BY THE GOVERNMENT ARE NOT STRICTLY APPLICABLE TO THE REPROCUREMENT. ROGOW & BERNSTEIN, B-197269, JUNE 11, 1980, 80-1 CPD 406. HOWEVER, WHEN AN AGENCY DECIDES TO CONDUCT A NEW PROCUREMENT FOR THE ITEMS TO BE REPROCURED, IT MAY NOT IGNORE THE REGULATORY PROVISIONS APPLICABLE TO COMPETITIVE PROCUREMENT, BUT IT DOES HAVE CONSIDERABLE LATITUDE IN DETERMINING THE APPROPRIATE METHOD OF REPROCUREMENT, PROVIDED ITS ACTIONS ARE REASONABLE AND CONSISTENT WITH THE DUTY TO MITIGATE DAMAGES. HEMET VALLEY FLYING SERVICE, INC., 57 COMP. GEN. 703 (1978), 78-2 CPD 117.

THE PROTESTER DOES NOT CONTEND THAT IT COULD QUALIFY FOR A WAIVER OF FIRST ARTICLE TESTING. TIME OF DELIVERY CAN ASSUME CONTROLLING IMPORTANCE IN URGENT PROCUREMENT SITUATIONS, AND WE HAVE NOT OBJECTED TO A SOLE- SOURCE AWARD TO THE ONLY OFFEROR QUALIFYING FOR WAIVER OF FIRST ARTICLE TESTING WHEN, AS HERE, THE AGENCY DETERMINES SUCH A WAIVER IS ESSENTIAL TO THE FULFILLMENT OF THE REQUIRED DELIVERY SCHEDULE. TM SYSTEMS, INC., B-196170, APRIL 8, 1980, 80-1 CPD 261. ALTHOUGH HYDRAULICS ARGUES THAT IT CAN SUPPLY A TECHNICALLY ACCEPTABLE TESTER SOONER THAN TELEDYNE, SINCE NEITHER THE PROTESTER NOR THE RECORD PROVIDES ANY BASIS TO QUESTION THE URGENCY OF THE PROCUREMENT WE BELIEVE THAT THE AGENCY ACTED REASONABLY IN AWARDING THE LETTER CONTRACT ON A SOLE-SOURCE BASIS. THE FACT THAT THE PROTESTER MAY BE ABLE TO SUPPLY A TECHNICALLY ACCEPTABLE TESTER AT A LOWER PRICE (THE AGENCY DISPUTES THIS CITING SIGNIFICANT PROBLEMS IN SUBSTITUTING GAS FOR ELECTRIC POWER) IS IRRELEVANT AS THE AGENCY HAS DETERMINED AND THE PROTESTER HAS NOT DISPUTED THAT ONLY TELEDYNE CAN QUALIFY FOR A WAIVER OF FIRST ARTICLE TESTING AND THAT ITS DELIVERY REQUIREMENTS ARE SUCH THAT IT CANNOT SUFFER THE 60 TO 120 DAY DELAY NEEDED TO CONDUCT FIRST ARTICLE TESTING.

THE PROTEST IS DENIED.