BNUMBER: B-276240; B-276240.2; B-276240.3
DATE: May 23, 1997
TITLE: Logicon RDA, B-276240; B-276240.2; B-276240.3, May 23, 1997
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DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:Logicon RDA
File: B-276240; B-276240.2; B-276240.3
Date:May 23, 1997
Michael A. Gordon, Esq., and Fran Baskin, Esq., Holmes, Schwartz &
Gordon, for the protester.
Joel S. Rubinstein, Esq., Bell, Boyd & Lloyd, for Hughes Associates,
Inc., an intervenor.
Elaine A. Eder, Esq., and Timothy A. Chenault, Esq., Department of
Transportation, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest against termination of protester's contract is denied where
agency reasonably determined, after award, that protester's use of a
federally funded research and development center (FFRDC) as a
subcontractor was contrary to Federal Acquisition Regulation
prohibition against FFRDCs competing with private firms under federal
government solicitations.
DECISION
Logicon RDA protests the Department of Transportation, United States
Coast Guard's terminating for the convenience of the government the
contract awarded to Logicon under request for proposals No.
DTCG39-96-R-E00093, for research and development services in the areas
of fire science and fire protection engineering. The Coast Guard
terminated Logicon's contract after concluding that Logicon's proposal
of Sandia National Laboratories--a federally funded research and
development center (FFRDC) sponsored by the Department of Energy
(DOE)--as a subcontractor was inconsistent with the regulations
prohibiting FFRDCs from competing with private concerns.
We deny the protest.
The RFP contemplated the award of an indefinite delivery/indefinite
quantity, task order, cost-plus-fixed-fee contract for research in the
areas of fire science, fire protection engineering, toxicity, human
factors, reliability, and risk assessment. The solicitation set forth
an estimated level of effort of 70,500 hours (over 5 years), which
were allocated among 15 labor categories (5 key and 10 non-key).
Offerors were required to propose a specific individual for each key
labor category. In addition, offerors were required to certify their
ability to perform both "nonstandard" and various types of standard
testing either in-house, through subcontractors, or by procuring
testing. The solicitation provided for award to be made to the
offeror whose proposal offered the greatest value to the government
under two evaluation categories: (1) technical (including subfactors
for past performance, personnel and facilities), and (2) cost, which
was significantly less important than technical.
Proposals were received from three offerors, including Hughes and
Logicon. Following discussions, the Coast Guard requested best and
final offers (BAFO) and, based on its evaluation, found Logicon's
offer to be the best value. In this regard, although Hughes's and
Logicon's proposals received the same ratings in the facilities
subcategory, the agency determined that Logicon's proposed facilities
were slightly more advantageous. In addition, Logicon was evaluated
as possessing a significant advantage with respect to past
performance. The agency concluded that Logicon's advantage in these
areas offset Hughes's evaluated advantage with respect to proposed
personnel. Further, Logicon's proposal had the lowest proposed and
evaluated cost. Upon learning of the resulting award to Logicon,
Hughes wrote to the agency to complain that Logicon's proposal of
Sandia as a subcontractor was improper. After reviewing the matter,
the Coast Guard agreed that applicable regulations prohibited the use
of Sandia; it then withdrew the award to Logicon and made award to
Hughes. Logicon then filed this protest, maintaining that its
contract was properly awarded and therefore should be reinstated.
Our Office generally will not review an agency's decision to terminate
a contract for the convenience of the government; such decisions are a
matter of contract administration which is not within our bid protest
function. However, we will review such a termination where, as here,
it is based upon an agency determination that the initial contract
award was improper. Norfolk Shipbuilding and Drydock Corp.,
B-219988.3, Dec. 16, 1985, 85-2 CPD para. 667 at 2.
The dispute here turns on whether the Coast Guard reasonably
determined that Logicon's proposal of Sandia as a subcontractor was
inconsistent with the provisions of part 35 of the Federal Acquisition
Regulation (FAR), which governs the use of FFRDCs. Recognizing that
FFRDCs enjoy a "special relationship with the Government," part 35
generally provides that:
"[i]t is not the Government's intent that an FFRDC use its
privileged information or access to facilities to compete with
the private sector. However, an FFRDC may perform work for other
than the sponsoring agency under the Economy Act, or other
applicable legislation, when the work is not otherwise available
from the private sector."
FAR sec. 35.017(a)(2) (FAC 90-4). The FAR requires that the sponsor
agency for the FFRDC include in the sponsoring agreement or its
policies and procedures "[a] prohibition against the FFRDC competing
with any non-FFRDC concern in response to a Federal agency request for
proposal for other than the operation of an FFRDC." FAR sec.
35.017-1(c)(4).[1] Although Sandia was proposed as a subcontractor,
not as a prime contractor, the prohibition in FAR sec. 35.017-1(c)(4)
does not make a distinction between an FFRDC's role as a prime
contractor or subcontractor. Rather, the determination whether an
FFRDC is competing with a private firm in violation of the regulation
depends upon the impact of its participation on the procurement, from
both a technical and cost standpoint. Energy Compression Research
Corp., B-243650.2, Nov. 18, 1991, 91-2 CPD para. 466 at 5.
The Coast Guard reasonably determined that Sandia's participation was
significant. The record indicates that Sandia had not been used for
the work performed under the previous 5-year fire safety research
contract, and the Coast Guard determined that, while Sandia may
possess certain unique capabilities, neither the statement of work nor
the tasks projected for the new 5-year contract required expertise or
facilities unique to Sandia. Further, although only 11.8 percent of
the overall proposed hours were to be performed by Sandia personnel (a
point emphasized by Logicon in arguing that Sandia's involvement is
not significant), the agency noted that this accounted for
approximately 29 percent of the cost; it also noted that 6 of the 11
proposed key personnel were to be Sandia personnel (who would perform
54.2 percent of the contemplated 15,500 key personnel hours).
Finally, the agency determined that, without Sandia's key personnel,
Logicon's proposal would have failed to meet the minimum solicitation
requirements. The Coast Guard concluded that these considerations
indicated that Sandia's participation would be substantial, such that
Logicon's proposal placed Sandia in competition with non-FFRDCs, in
contravention of the FAR. We find no basis to question the Coast
Guard's conclusion.
While Logicon urges that Sandia's involvement be measured as a
percentage of the total contract hours (11.8 percent), we think the
agency's focus on the extent of Sandia's involvement in the central
work under the contract--that is, the work of the key
personnel--together with the cost attributable to Sandia (29 percent),
presents a more realistic picture of Sandia's impact under the
contract. These considerations, and the fact that Logicon's proposal
would have been unacceptable without Sandia's key personnel,
reasonably warrant terming Sandia's impact substantial as to both
performance and cost.[2]
The record also does not establish that the Coast Guard's fire
research needs could be met only by Sandia, that is, that "the work is
not otherwise available from the private sector."[3] Although, as
noted by Logicon, the Coast Guard concedes that "Sandia's credentials
are impressive and may well represent unique capability for particular
purposes or situations"--the agency noted that its technical personnel
were "very impressed" with Sandia's experience in pooled fires--the
Coast Guard nevertheless maintains that there is nothing in the
statement of work, or in any of the future work currently anticipated
by the agency, that could be performed only by Sandia. Logicon has
not shown that the agency's position is unreasonable.[4]
We conclude that the Coast Guard properly determined that the award to
Logicon was improper. Accordingly, the termination of Logicon's
contract is not objectionable. The protest is denied.
Comptroller General
of the United States
1. The sponsor agency is the executive agency which manages,
administers, monitors, funds, and is responsible for the overall use
of an FFRDC. FAR sec. 35.017(b) (FAC 90-4).
2. Logicon claims that it could have replaced the Sandia personnel
with its own personnel or personnel from academic or other
institutions and that, in any event, it would only use the more
expensive Sandia personnel when Sandia's unique experience is
required. However, the fact remains that Logicon's proposal as
submitted would have been unacceptable without the use of Sandia
personnel. To the extent that Logicon is questioning the Coast
Guard's failure to raise this issue during discussions, its argument
is untimely and will not be considered. Logicon's claim that it could
have replaced Sandia was not made until it filed its comments on the
agency report on March 27, 1997, approximately 6 weeks after it filed
its initial protest with our Office against the withdrawal of its
award. Under our Bid Protest Regulations, however, protests based on
other than solicitation improprieties generally must be filed within
10 days of when the protester knew or should have known their bases
(whichever is earlier). 4 C.F.R. sec. 21.2(a)(2) (1997).
3. Logicon argues that the fact that DOE approved Sandia's
participation--on a non-exclusive basis--in Logicon's proposal
indicates that DOE has determined that the work to be furnished under
the subject contract encompassed Sandia's unique capabilities since
the record indicates that DOE's policy governing the participation of
FFRDCs with nonfederal entities requires that such participation
"include unique capabilities." However, it is the responsibility of
the procuring, nonsponsoring federal agency to determine that the work
requested of the FFRDC would not place it in competition with private
industry, see generally FAR sec. 17.504(e) (FAC 90-40), and the fact that
the sponsoring agency approves of the participation is not
dispositive. Energy Compression Research Corp., supra.
4. In any case, the solicitation did not require the use of Sandia,
and if Logicon believed that the agency should have provided for
procurement of services from Sandia on a sole source basis due to its
unique capabilities, it was required to protest on this basis prior to
the closing time for receipt of initial proposals. 4 C.F.R. sec.
21.2(a)(1).