Protest Against Sole-Source Procurement

A firm protested a National Aeronautics and Space Administration (NASA) sole-source contract award. The contract was for an upper stage vehicle which will be used with the Space Shuttle to launch space probes. Although NASA argued that the protest was untimely, GAO disagreed and considered the protest on its merits. The awardee received the contract because it manufactured the only upper stage vehicle that could be developed by the 1985 launch date. NASA based its decision to award a sole-source contract on the following grounds: (1) the low technical and cost risks involved in modifying the vehicle in view of its current production; (2) the feasibility of successfully meeting the scheduled launch date in terms of production; (3) the risk of increased costs if another upper stage vehicle was permitted development and fell behind schedule; (4) the risk of the project's technical team being lost to other projects if development of the upper stage fell behind schedule and caused launch delays; (5) the existence of facilities at the launch site that can be easily adapted for the handling of the awardee's modified vehicle; and (6) the general technical superiority of the awardee's vehicle. The protester denied the NASA implication that the vehicle selected for procurement had few technical or costs risks and further argued that a competitive procurement should have taken place. GAO stated that, although sole-source awards are authorized according to Government regulations, maximum competition in the conduct of Government procurement is required. Therefore, agency decisions to procure sole source must be adequately justified and are subject to close scrutiny. However, GAO will not substitute its judgment for that of the contracting agency when reviewing sole-source procurements and will only determine whether the agency decision has a reasonable basis. GAO has recognized that a timeframe deadline alone can justify a sole-source award. Since this was one of the NASA arguments, the procurement was justified. Since the protester could not prove that NASA acted unreasonably, the protest was denied.