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B-181676, NOV 26, 1974

B-181676 Nov 26, 1974
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PROTEST BY PROSPECTIVE SUBCONTRACTOR AGAINST GOVERNMENT PRIME CONTRACTOR'S AWARD OF SUBCONTRACT TO COMPETING OFFEROR WILL NOT BE CONSIDERED AS PRIME CONTRACTOR IS NOT ACTING AS GOVERNMENT PURCHASING AGENT AND NEITHER FRAUD NOR BAD FAITH ON PART OF CONTRACTING OFFICER IN APPROVING SUBCONTRACT AWARD IS ALLEGED. LITTON CONTENDS THAT ITS TOTAL PRICE FOR THE ITEMS BEING PROCURED WAS LOWER THAN THAT OF EMS. LITTON ARGUES THAT THE AWARD TO EMS WAS BASED ON INACCURATE DATA CONCERNING THE RELATIVE EXPERIENCE OF EMS AND LITTON. LITTON STATES THAT AN AWARD TO EMS WOULD BE IMPROPER BECAUSE THE BID OF EMS WAS NOT THE LOWEST TOTAL PRICE. MOREOVER LITTON CONTENDS THERE WAS SUCH DIRECT GOVERNMENTAL INVOLVEMENT IN THIS PROCUREMENT AS TO WARRANT REVIEW BY THIS OFFICE UNDER OUR BID PROTEST PROCEDURES.

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B-181676, NOV 26, 1974

PROTEST BY PROSPECTIVE SUBCONTRACTOR AGAINST GOVERNMENT PRIME CONTRACTOR'S AWARD OF SUBCONTRACT TO COMPETING OFFEROR WILL NOT BE CONSIDERED AS PRIME CONTRACTOR IS NOT ACTING AS GOVERNMENT PURCHASING AGENT AND NEITHER FRAUD NOR BAD FAITH ON PART OF CONTRACTING OFFICER IN APPROVING SUBCONTRACT AWARD IS ALLEGED.

LITTON INDUSTRIAL PRODUCTS, INC.:

THE DEPARTMENT OF THE NAVY HAS AWARDED PRIME CONTRACT NO. N00024-74-C 0207 TO THE BATH IRON WORKS CORPORATION (BATH) FOR WORK UNDER THE NAVY'S PATROL FRIGATE PROGRAM. PURSUANT TO THIS CONTRACT, BATH ISSUED A COMPETITIVE REQUEST FOR PROPOSALS (RFP) TO PROSPECTIVE SUBCONTRACTORS FOR DEGAUSSING POWER SUPPLIES FOR THE PROGRAM. AFTER EVALUATION OF THE OFFERS RECEIVED, BATH, WITH NAVY CONSENT, MADE AWARD TO EMS DEVELOPMENT CORPORATION ON THE ITEMS IN QUESTION.

LOUIS ALLIS DRIVES AND SYSTEMS DIVISION OF LITTON INDUSTRIAL PRODUCTS, INCORPORATED (LITTON), A COMPETITOR OF EMS ON THIS PROCUREMENT, FILED A PROTEST WITH THIS OFFICE AGAINST THE AWARD BY BATH TO EMS. AS THE BASIS FOR ITS PROTEST, LITTON CONTENDS THAT ITS TOTAL PRICE FOR THE ITEMS BEING PROCURED WAS LOWER THAN THAT OF EMS, AND ACCORDINGLY AN AWARD TO EMS WOULD NOT BE IN ACCORD WITH THE SOLICITATION'S EVALUATION FACTORS. ALSO, LITTON ARGUES THAT THE AWARD TO EMS WAS BASED ON INACCURATE DATA CONCERNING THE RELATIVE EXPERIENCE OF EMS AND LITTON, THE IMPORTANCE OF AN OFFEROR'S SMALL BUSINESS STATUS, AND LITTON'S ALLEGED REJECTION OF THE RFP'S PROGRESS PAYMENTS PROVISION. LITTON STATES THAT AN AWARD TO EMS WOULD BE IMPROPER BECAUSE THE BID OF EMS WAS NOT THE LOWEST TOTAL PRICE. MOREOVER LITTON CONTENDS THERE WAS SUCH DIRECT GOVERNMENTAL INVOLVEMENT IN THIS PROCUREMENT AS TO WARRANT REVIEW BY THIS OFFICE UNDER OUR BID PROTEST PROCEDURES. TO DEMONSTRATE THE HIGH DEGREE OF GOVERNMENTAL INVOLVEMENT LITTON POINTS OUT THAT THE NAVY'S PRIME CONTRACT REQUIRED BATH TO EVALUATE OFFERS RECEIVED ON A TOTAL COST BASIS FOR BOTH THE LEAD SHIP AND OPTIONAL ADDITIONAL SHIPS. (LITTON, HOWEVER, DOES NOT QUESTION THE PROPRIETY OF THE EVALUATION METHOD AS REQUIRED BY BATH'S PRIME CONTRACT.) LITTON FURTHER POINTS OUT THAT THE NAVY IS THE REAL PARTY IN INTEREST WITH REGARD TO THE SUBCONTRACT AWARD AND THAT THE PRIME CONTRACT HERE IS COST REIMBURSEMENT TYPE REQUIRING (1) DETAILED ADVANCE NOTIFICATION TO THE CONTRACTING OFFICER OF SUBCONTRACT AWARDS AND (2) THE GOVERNMENT'S PRIOR WRITTEN CONSENT OR RATIFICATION. ACCORDINGLY, LITTON REQUESTS THAT THIS OFFICE INSTRUCT THE NAVY TO RESCIND ITS CONSENT TO THE AWARD OF THE SUBJECT CONTRACT TO EMS, AND DIRECT THAT THE AWARD BE MADE TO LITTON.

IN MATTER OF AIRCRAFT SYSTEMS CORPORATION, B-181676, AUGUST 7, 1974, OUR DECISION ON AN EARLIER PROTEST BY A PROSPECTIVE SUBCONTRACTOR TO BATH ON ANOTHER SOLICITATION CONNECTED WITH THE PATROL FRIGATE PROGRAM, WE NOTED THE FOLLOWING:

"THE BID PROTEST PROCEDURES OF OUR OFFICE, 4 C.F.R. SEC. 20.1 ET SEQ. (1974), DO NOT PROVIDE FOR THE ADJUDICATION OF PROTESTS BY BIDDERS AGAINST SUBCONTRACT AWARDS MADE BY PRIME CONTRACTORS WHO ARE NOT ACTING AS PURCHASING AGENTS FOR THE GOVERNMENT. IN THE PAST, THIS OFFICE HAS ON OCCASION ENTERTAINED SUCH PROTESTS BECAUSE, FOR EXAMPLE, OF OUR CONCERN WHETHER GOVERNMENTAL APPROVAL OF A SUBCONTRACT WOULD BE PREJUDICIAL TO THE INTERESTS OF THE GOVERNMENT AND/OR BECAUSE THE USUAL LINES OF DISTINCTION BETWEEN PRIME AND SUBCONTRACT TIERS WERE CONSIDERED RELATIVELY UNIMPORTANT. SEE 49 COMP. GEN. 668 (1970); 47 COMP. GEN. 223 (1967). HOWEVER, IN 51 COMP. GEN. 803 (1972), WE SIGNIFICANTLY LIMITED OUR SCOPE OF REVIEW IN THIS AREA. THAT DECISION RECOGNIZED THAT WHERE THE PRIME CONTRACTOR IS NOT ACTING AS A PURCHASING AGENT FOR THE GOVERNMENT AND NEITHER FRAUD NOR BAD FAITH ON THE PART OF THE GOVERNMENT CONTRACTING OFFICER IN APPROVING ANY SUBCONTRACT AWARD IS ALLEGED, FURTHER CONSIDERATION OF SUCH PROTESTS WOULD BE UNWARRANTED. WE HAVE SUBSEQUENTLY REAFFIRMED THAT POSITION. B-177904, MAY 4, 1973; B-176675; DECEMBER 4, 1972. ***"

SINCE BATH IS A PRIME CONTRACTOR AND NOT ACTING AS A PURCHASING AGENT OF THE UNITED STATES, WE MUST DECLINE TO PASS ON THE MERITS OF LITTON'S PROTEST.

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