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).