BNUMBER: B-279622
DATE: July 2, 1998
TITLE: Metric Systems Corporation, B-279622, July 2, 1998
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Matter of:Metric Systems Corporation
File: B-279622
Date:July 2, 1998
E. Bruce White Wolf, Esq., for the protester.
Joyce U. Ballack, Esq., for Harris Corporation, Government
Communications Systems Division, an intervenor.
Todd E. Norton, Esq., Lawrence J. Feldhaus, Jerry W. Aldridge, and
John E. Lariccia, Esq., Department of the Air Force, for the agency.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Although the Competition in Contracting Act of 1984 generally mandates
that contracting agencies obtain full and open competition in their
procurements through the use of competitive procedures, the proposed
sole-source award of a contract under 10 U.S.C. sec. 2304(c)(1) (1994) is
unobjectionable where the agency reasonably determined that only one
source could complete the modification of an electronic warfare system
to simulate advanced threats within the urgent time constraints of the
procurement.
DECISION
Metric Systems Corporation protests the Department of the Air Force's
decision to award a sole-source contract to Harris Corporation,
Government Communications Systems Division, to provide total system
performance responsibility for the Miniature-Multiple Threat Emitter
System (Mini-MUTES) Modification Program. Metric argues that the Air
Force unreasonably determined that Harris is the only source capable
of meeting the agency's needs within the required time constraints.
We deny the protest.
The Mini-MUTES system is a surface-to-air-missile threat radar
simulator presently in place on Combat Air Forces training ranges.
Each system typically consists of one Master Control Group (MCG) and
up to five Remote Emitter Units (REU). The REUs emit electronic
signals that simulate different threat signal combinations to train
pilots that might face the actual threats during combat, and the MCG
directs and coordinates all REU activity occurring on the training
ranges.
The Mini-MUTES system was initially produced by General Dynamics
Corporation pursuant to a 1986 contract. After a competition, Harris
was awarded the follow-on production contract in 1990. Harris has
since added new threats to the system's capability and improved its
reliability pursuant to various engineering change proposals under
that original contract. The Mini-MUTES system, whose current
configuration uses a 1980s-vintage computer, was deemed obsolete in
1993 because its central processor units (CPU) were outdated and its
bus (the electronic pathway through which the REUs and the MCG
communicate) was inadequate. The Air Force lacked the funding to
upgrade the system but continued to maintain and troubleshoot its
outdated computer technology because it remained a viable simulator of
low-level threats. At the same time, the Air Force began exploring
its options for obtaining the capability to train against advanced
threats. Beginning as early as 1995, and continuing through mid-1997,
the agency commissioned advanced threat feasibility studies, explored
joint initiatives with other military services, evaluated existing
equipment and systems, and conducted informal market surveys with
industry.
In January 1997, the Defense Advanced Research Projects Agency (DARPA)
announced its Dual Use Applications Program for the fiscal year 1997.
Under the program's Commercial Operations and Support Savings
Initiative (COSSI), contractors were asked to propose methods of
inserting commercial technology into fielded military systems in order
to lower the operations and support costs for such systems. News
Release, Dual Use Applications Program Plans Announced, Jan. 14, 1997.
The DARPA solicitation supporting COSSI set forth a two-stage process.
In the first stage, DARPA and the contractor were to share the costs
of developing and testing prototype "kits" for the military customer
for installation into a fielded system. Assuming a successful first
stage, the military customer's goal in the second stage of the process
was to purchase reasonable production quantities of the kit at fair
and reasonable prices and without recompetition. Solicitation
No. 97-12 at 2, 3.
Harris responded to the COSSI solicitation by submitting a proposal to
replace the existing obsolete CPU and bus in the Mini-MUTE system with
a commercial open architecture processor and bus system. On May 5 the
Air Force announced that Harris's proposal was one of six Air Force
projects that had been awarded a DARPA grant. News Release, Air Force
Announces Operations and Support Projects, May 5, 1997. Successful
completion of this task will result in a processor that extends the
life of the present Mini-MUTES system to the year 2015.
At about this same time, the Air Force announced that the acquisition
or development of an advanced threat system by September 2001 was one
of its highest priorities. Contracting Officer's Statement at 1. The
acquisition is considered to be urgent because pilots unable to train
against advanced threats might face them for the first time during
combat. May 1997 Modification Proposal at 1. All of the options
disclosed by the agency's planning process--the acquisition of a new
system, the modernization of the Mini-MUTES system, and the
modernization of other existing systems--were presented to user
commands. For reasons not at issue here, the Air Force opted to
modify the Mini-MUTES system.
The Air Force was left to decide how to acquire the modification of
the Mini-MUTES system. As its January 1998 acquisition plan makes
clear, the Air Force began its decision-making process by considering
the effect that Harris's performance of two ongoing Mini-MUTES system
research and development (R&D) efforts--its DARPA-sponsored
replacement of the system's CPU and bus and its improvement of the
REU's tracking capability under its original contract--would have on
the modification program.
The Air Force believed that a contractor could not modify the
Mini-MUTES System to add advanced threat capability unless it
understood the CPU and bus architecture, since additional system
upgrades must be integrated with the new interface architecture to
ensure that the system operates as a cohesive unit. Harris was
upgrading these systems pursuant to its DARPA agreement, and other
contractors could only understand the upgraded architecture after
reviewing the technical data associated with the upgrade. However,
Harris's agreement with DARPA provides that Harris will control the
data rights to the upgraded architecture until the production phase of
the effort in 2001. Harris-DARPA Agreement at 13-14. The data for
Harris's tracking capability effort will be unavailable until 2001 as
well. Since the target date for obtaining initial operational
capability for the modified Mini-MUTES system was also 2001, no
contractor aside from Harris could provide the modifications within
the required time constraints. Acquisition Plan at 7, 10.
On January 18, 1998, in view of the ongoing R&D efforts and the
limited technical data availability associated with each, the Air
Force prepared a justification and approval (J&A) document for the
sole-source award of the advanced threat upgrade contract to Harris
which will give the firm total system performance responsibility for
the modification program. J&A at 2-3. The J&A recounted the
background described above and set forth three acquisition options
considered by the Air Force.
The Air Force considered terminating the DARPA agreement--sacrificing
the CPU and bus development undertaken by Harris in the 11 months
since the COSSI solicitation was issued and surrendering the more than
$2 million committed by DARPA and Harris to upgrade the system--and
competing and funding the computer upgrade along with the advanced
threat modification. Id. at 3-4. The Air Force decided that this
course of action would "delay the R&D phase an estimated two years or
more and result in additional costs of $2.5 million to duplicate the
on-going development efforts that [Harris] is currently working under
separate contracts." Id. The Air Force believed that the "complexity
of the required Mini-MUTES modifications and their interfaces with
on-going development would necessitate extensive pre-performance
efforts by another contractor in order to establish a responsible
development/production capability and an engineering support team.
Based on [its] experience under previous Mini-MUTES modification
development efforts, the estimated 'spin-up' time for another offeror
would be 18 months from contract award." Id. at 4. Since the program
funding profile and delivery requirements would not support delay in
the schedule, the Air Force rejected this acquisition option. Id.
The Air Force also considered honoring the DARPA agreement to permit
Harris to develop and complete the CPU and bus upgrade, and then
competing the advanced threat modification after the agency received
the data rights to the new processor and bus. The Air Force rejected
this option because a validated reprocurement package would not be
available until the completion of the Mini-MUTES Modification Program
production phase,[1] and because "government property, including tools
and test equipment necessary for the Mini-MUTES modifications
development, [would] not be available for a competing contractor until
the completion of on-going development efforts for the system computer
replacement (i.e., FY01)." Id. The agency's timeline for this
acquisition approach showed that initial operational capability would
not be possible until 2006, well past the target date.
The Air Force finally considered awarding the advanced threat upgrade
to Harris on a sole-source basis with concurrent development of the
CPU and bus upgrade and the advanced threat modifications. The J&A
stated that Harris, the current Mini-MUTES manufacturer, had the
necessary skills, equipment, and capabilities in-place to acomplish
the required modifications. In addition, Harris had extensive
experience developing and producing modifications for the Mini-MUTES
system. As the Air Force's J&A explained, at 4:
The required Mini-MUTES modifications must not only integrate
with existing Mini-MUTES hardware and software, but interface
with the on-going computer replacement and tracking upgrade
efforts currently on-contract with [Harris]. Only [Harris] can
concurrently perform the required Mini-MUTES modifications with
on-going development of a system computer replacement and
tracking upgrades and meet the delivery requirements. System
integration is the key risk area for the Mini-MUTES modification,
including integration of available advanced threat transmitter
technology. [Harris] is best qualified to perform as the
responsible total system integrator.
The proposed sole-source award was synopsized in the Commerce Business
Daily (CBD) on February 11. The notice described Harris's ongoing R&D
efforts and explained that the reprocurement data containing the
necessary interface documentation would not be available until 2001,
the target year for initial operational capability of the modified
system; considering these developments, providing Harris total system
project responsibility would ensure a seamless integration of the new
Mini-MUTES computer. The CBD notice stated the Air Force would
consider all proposals received within 20 days in order to determine
whether to conduct a competitive procurement.
On March 5, Metric filed an "objection and protest" of the proposed
sole-source award with the Air Force. Metric's letter asserted that
Harris was not the only firm capable of providing the Air Force with
the advanced threat modifications and briefly outlined its
capabilities with respect to these modifications. In a March 23
response, the Air Force explained that the Mini-MUTES system was
undergoing a development effort to remedy problems associated with an
obsolete CPU and that Harris was the only source capable of concurrent
development to enable the Air Force to satisfy its mission
requirement. The letter further explained that the Air Force could
compete the advanced threat modifications alone, but if it did so it
would have to integrate the advanced threat transmitters with the
ongoing CPU and bus interface development in order to meet the mission
requirement date; the government did not have the resources to act as
an integrator. After it received the Air Force's response Metric
filed the instant protest.
Metric argues that sources other than Harris, including itself, are
capable of providing the entire modification effort--the CPU and bus
upgrade, the tracking upgrade, and the advanced threat
modifications--and that the Air Force should have terminated Harris's
ongoing efforts and held a competition for the entire modification
program.
In general, the overriding mandate of the Competition in Contracting
Act is for "full and open competition" in government procurements,
which is obtained through the use of competitive procedures. 10
U.S.C. sec. 2304(a)(1)(A) (1994). The Air Force's justification for
awarding this sole-source contract relies primarily upon the exception
to full and open competition authorized by 10 U.S.C. sec.
2304(c)(1)--i.e., that there is only one source capable of meeting the
agency's needs.[2] Datacom, Inc.--Protests and Request for Costs,
B-274175 et al., Nov. 25, 1996, 96-2 CPD para. 199 at 6; Mnemonics,
B-261476.3, Nov. 14, 1995, 96-1 CPD para. 7 at 3. To use noncompetitive
procedures under 10 U.S.C. sec. 2304(c)(1), the agency must execute a
written J&A with sufficient facts and rationale to support the use of
the specific authority, 10 U.S.C. sec. 2304(f)(1)(A), (B); Federal
Acquisition Regulation sec. 6.302-1(d)(1); 6.303; 6.304, and publish a
notice in the CBD to permit potential competitors to challenge the
agency's intent to procure without full and open competition. 10
U.S.C. sec. 2304(f)(1)(C).
Our review of an agency's decision to conduct a sole-source
procurement focuses on the adequacy of the rationale and conclusions
set forth in the J&A. When the J&A sets forth reasonable
justifications for the agency's actions, we will not object to the
award. Datacom, Inc.--Protests and Request for Costs, supra; AAI ACL
Techs., Inc., B-258679.4, Nov. 28, 1995, 95-2 CPD para. 243 at 5. A
sole-source award is justified where the agency reasonably concludes
that only one known source can meet its needs within the required time
except where the noncompetitive situation arises from a lack of
advance procurement planning. Space Vector Corp., B-253295.2, Nov. 8,
1993, 93-2 CPD para. 273 at 10. We conclude that the Air Force reasonably
determined that only Harris could satisfy its requirements for the
advanced threats modification within the time required.[3] See AAI
ACL Techs., Inc., supra, at 7; Midwest Dynamometer & Eng'g Co.,
B-257323, Sept. 2, 1994,
94-2 CPD para. 91 at 3.
The J&A contains the Air Force's express consideration and rejection
of the course of action proposed by Metric. The Air Force set forth
two reasons for concluding that surrendering the funds and time
invested in these projects was not a viable option. First, building
in the time required for another contractor to "spin-up" to Harris's
achievements would jeopardize the Air Force's ability to meet the
initial operational capability date of September 2001. It would take
as long as 18 months to prepare a current data package to give to
other contractors, and at least this long for any other contractor to
both match Harris's experience and capabilities with the Mini-MUTES
system and duplicate its progress on the computer upgrade. This
additional time would necessarily extend the date for obtaining
initial production capability. Second, this course of action would
result in significant additional costs to duplicate Harris's efforts.
Since the advanced threat modifications had to be integrated with the
computer upgrade, and since the documentation to ensure integration
will be in the sole possession of Harris until 2001, the only
contractor that could provide all of these efforts concurrently and
still meet the 2001 target date was Harris.
Metric does not dispute the fact that the advanced threat
modifications must be integrated with the computer system upgrade, or
that, under the circumstances, one contractor should be responsible
for the entire effort. Metric simply argues that that contractor need
not be Harris. Cast as a challenge to the Air Force's failure to
terminate Harris's ongoing efforts and compete the entire modification
program, Metric's protest actually challenges the Air Force's proposed
sole-source award on two bases: time and money.
Metric disputes the Air Force's assertion that taking the protester's
proposed course of action would jeopardize the schedule. Metric
generally discounts Harris's experience and capabilities, as well as
the difficulty of its ongoing efforts, and claims that it could
accomplish the entire effort prior to September 2001. In its
comments, Metric asserted that it could make initial delivery 24
months after award. May 8 Comments at 2. Its supplemental comments
backed away from that schedule and claimed that it could deliver
initial operational capability a conservative 31 months after award.
May 28 Supplemental Comments at 2. Setting aside the realism of this
proposed schedule, which the Air Force disputes,
31 months from the date of this decision's issuance, let alone the
date of any future competitive award, is so close to the September
2001 target date as to represent an obvious risk to the effort. We do
not believe the Air Force should have been required to jeopardize its
ability to obtain the urgently required modifications based upon these
unsupported promises, particularly when Harris's investment of
substantial time and money will apparently enable the Air Force to
meet its target date.
Metric next asserts that the costs of duplicating Harris's efforts
will be recovered through competition because it can perform the
effort for $35-40 million, less than the $49 million estimated for
Harris's sole-source effort. Metric's argument that it would be
cheaper for the agency in the long run to simply "redo" what it has
already done is speculative; moreover, a protester cannot insist that
an agency abandon an established approach to satisfying its needs in
order to allow the protester to sell to the government. Vorum
Research Corp., B-255393, B-255394, Feb. 28, 1994, 94-1 CPD para. 155 at
3-4.
As for Metric's claim that the Air Force "purposely overlooked" its
abilities to perform the entire modification program, the information
provided to the Air Force in Metric's March 5 letter did not describe
any capabilities aside from those associated with the advanced threat
modifications. As a result, the Air Force reasonably determined that
the information provided by Metric was inadequate to justify
abandoning its planned course of action.
The protest is denied.
Comptroller General
of the United States
1. The Air Force explains that the technical data package on the
existing system has not been revised to reflect several field-level
modifications, and the development of an up-to-date package on the
existing system, even without consideration of the DARPA effort, would
require as much as 18 months. Air Force Response to Comments at 6-7.
2. The J&A cites as a second authority the exception authorized by 10
U.S.C. sec. 2304(c)(5), which applies where a statute expressly
authorizes or requires that the procurement be made through a certain
agency or from a specified source. Since we conclude that the Air
Force reasonably relied upon the authority in 10 U.S.C. sec. 2304(c)(1)
in making this sole-source award, we need not consider Metric's
allegations with respect to the second cited authority.
3. As for Metric's assertion that basing the sole-source decision on
Harris's ongoing performance of the DARPA project reflects an improper
lack of advance procurement planning, the record is replete with
evidence of detailed, long-term procurement planning.