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.