BNUMBER: B-275303
DATE: February 6, 1997
TITLE: ATA Defense Industries, Inc.
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Matter of:ATA Defense Industries, Inc.
File: B-275303
Date:February 6, 1997
Claude P. Goddard, Jr., Esq., Kilcullen, Wilson and Kilcullen,
Chartered, for the protester.
Col. Nicholas P. Retson, and Maj. Scott D. Schuler, Department of the
Army, for the agency.
Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Reprocurement, following termination for default, through issuance of
a delivery order under a Federal Supply Schedule (FSS) contract is
proper where agency has an immediate need for the equipment and there
are no known sources of supply other than the FSS contractor and the
defaulted contractor.
DECISION
ATA Defense Industries, Inc. protests the issuance of a delivery order
by the U.S. Property and Fiscal Officer, National Guard Bureau,
Departments of the Army and the Air Force, Jackson, Mississippi, to
Caswell International Corporation for moving tank targets under the
General Services Administration's Federal Supply Schedule (FSS)
contract No. GS-02F-0434D. The delivery order is a reprocurement of
the same items that had been awarded to ATA. ATA's contract was
terminated for default.
We deny the protest.
ATA was the low bidder under two-step sealed bidding solicitation No.
DAHA22-95-B-0003 at a price of $444,000 for a quantity of 10 moving
tank targets ("Armored Moving Target Systems") in August 1995; award
to ATA was delayed until February 16, 1996, as a result of a protest
filed by Caswell, the only other offeror. In August 1996, ATA
requested a 60-day extension for delay caused by the Caswell protest.
The protester and the contracting officer executed a bilateral
contract modification, effective August 28, 1996, which recognized
that ATA had experienced "excusable delay" as a result of the Caswell
protest, and the "[c]ontract delivery date [was] changed from 21
August 1996 to 20 October 1996."[1] On October 18, ATA requested
another 60-day extension, due to continued internal "competition for
engineering and manufacturing resources," and promised delivery of all
10 targets no later than December 20, 1996. ATA, along with its
request, provided photographs of the tank targets undergoing
engineering testing. Without any further discussion, the contracting
officer, on October 22, terminated ATA's contract for default.
According to the protester, the "contracting officer later
acknowledged to ATA's President [that] he was under 'tremendous
pressure' to take the default action because the [agency] technical
personnel wanted to obtain Caswell tank targets." On October 23, 1
day after he terminated the ATA contract for default, the contracting
officer issued a delivery order to Caswell for the tank targets under
its FSS contract with a delivery date of March 23, 1997, at a price of
$476,560. This protest followed.
ATA argues that the contracting officer abused his discretion in
ordering from the FSS when he reprocured the tank targets because he
"actually knew" that he could obtain the targets sooner and at a lower
price from ATA. The protester also argues that the contracting
officer decided to exclude ATA from the reprocurement before he
defaulted ATA's contract, citing the contracting officer's statement
that "had [he] intended to reprocure from the defaulted contractor,
[he] would not have terminated [its] contract." Further, since there
was allegedly no reason to question ATA's ability to perform by
December 20, 1996, ATA argues that the contracting officer improperly
excluded the firm from the reprocurement and improperly determined ATA
to be nonresponsible. Finally, ATA questions whether the specified
tank targets were actually listed in the FSS as available from
Caswell.
Most of ATA's assertions are not for our consideration as they involve
issues related to the propriety of the default action and to the
government's duty, when reprocuring, to mitigate damages for which the
defaulted contractor will be liable--these are matters for resolution
by the cognizant board of contract appeals or Court of Federal Claims
under the disputes clause of the contract. See, e.g., PRB Uniforms,
Inc., 56 Comp. Gen. 976 (1977), 77-2 CPD para. 213; Skip Kirchdorfer,
Inc.,
B-192843, Feb. 15, 1979, 79-1 CPD para. 111. The question for our review
is whether the agency acted reasonably and consistent with regulation
in conducting the reprocurement as it did.
The Federal Acquisition Regulation (FAR) provides that the contracting
officer "shall obtain competition to the maximum extent practicable"
for a repurchase, but also recognizes that under the default clause of
the contract the contracting officer may use any appropriate
acquisition method. FAR sec. 49.402-6. Thus, if the contracting officer
decides to conduct a new competition, the defaulted contractor may not
be automatically excluded from that competition; however, a defaulted
contractor does not have an automatic right to be solicited for every
reprocurement, since the contracting officer may reasonably rely on a
reprocurement approach that does not involve a new competition where
that approach, under the circumstances, satisfies the FAR requirement
for maximum practicable competition. International Technology Corp.,
B-250377.5, Aug. 18, 1993, 93-2 CPD para. 102; Skip Kirchdorfer, Inc.,
supra.
Here, the contracting officer did not conduct a new competition. He
simply placed a delivery order under an existing FSS contract. The
agency reports that this approach was taken because the government had
an immediate need for the equipment and there were only a limited
number of sources, and only one FSS contractor, Caswell, that could
meet the requirements.
We see nothing improper with the agency's approach. Given the
government's continuing and immediate need for the equipment and the
lack of sources of supply, the contracting officer's decision not to
conduct a competition but instead to look to the FSS and place an
order with the only FSS contractor able to meet the agency's needs was
an eminently reasonable decision. While the protester insists that it
could have provided the equipment sooner than the FSS contractor and
at a lower price, we see no reason on this record why the contracting
officer should have considered the protester, which had just failed to
meet delivery requirements, as a reliable source for the
reprocurement. Accordingly, and given the FAR's general preference
for use of FSS contracts, see FAR sec. 8.001, we think the contracting
officer's use of the FSS was appropriate and that the reprocurement
actions here were reasonable and consistent with FAR sec. 49.402-6.
The protest is denied.
Comptroller General
of the United States
1. According to ATA, Caswell's protest caused a slippage which created
engineering and manufacturing conflicts with other urgent and
substantial Army contracts in process.