TITLE:  Vertol Systems Company, Inc., B-295936, April 18, 2005
BNUMBER:  B-295936
DATE:  April 18, 2005
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   Decision

   Matter of:   Vertol Systems Company, Inc.

   File:            B-295936

   Date:              April 18, 2005

   Lawrence J. Sklute, Esq., Sklute &; Assocs., for the protester.

   Clarence D. Long, III, Esq., Department of the Air Force, 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 that procurement of foreign threat systems aircraft under Economy
Act is improper, and that agency instead should conduct competitive
acquisition under which protester could compete, is denied where Air Force
reasonably determined that protester was not viable competitor because its
helicopter could not satisfy the agency's requirement for demonstrated
airworthiness.

   DECISION

   Vertol Systems Company, Inc. protests the actions of the Department of the
Air Force in acquiring foreign threat systems aircraft for use in military
training exercises.  Vertol generally asserts that the agencies improperly
procured the aircraft from the Threat Systems Management Office (TSMO),
Department of the Army, by means of a transaction under the Economy Act,
31 U.S.C. S 1535 (2000).

   We deny the protest.

   Vertol's protest challenges the Air Force's action in acquiring foreign
threat systems aircraft from TSMO--instead of allowing Vertol, a small
business, to compete to provide the required aircraft--for use in military
exercises.[1]  In this regard, TSMO controls a fleet of government-owned
foreign ground and aviation systems, which are used to provide realistic
threats during training exercises and the testing of U.S. weapons systems.

   On January 28, 2005, the Air Force executed a determination and findings
(D&;F) pursuant to the Economy Act, in support of a military
interdepartmental purchase request to TSMO for the provision of a Russian
Mi-24 attack helicopter, to serve as an opposition force during Dissimilar
Air Combat Training (DACT) with the 14thA Weapons Squadron to occur
February 13-17, 2005 and August 15-19, 2005.  Specifically, the agency
contemplated that the Mi-24 would engage in mock air-to-air combat with an
MH-53 helicopter, to include low, tree-level flight, sharp acceleration,
and abrupt changes in attitude and altitude, for purposes of providing
defensive maneuvering training.  The agency anticipated that a student or
squadron cadre would occupy the front gunner position in the Mi-24,
allowing the occupant to view the air combat from the enemy perspective. 

   The Air Force determined that safety considerations required that only an
aircraft with a standard air worthiness certificate from the Federal
Aviation Administration (FAA), or the military equivalent certification
from TSMO to carry government employees, could be used.  The D&;F, and the
agency's accompanying market research report, indicated that no private
source was qualified to provide aircraft with the required certification
and approved flight operations.  In this regard, while the Air Force was
aware that Vertol owned an Mi-24 helicopter, the agency noted that FAA had
only granted that aircraft a limited, "experimental" airworthiness
certificate, which the Air Force viewed as insufficient to meet its safety
concerns.[2]  The Air Force concluded that TSMO was the only source
capable of providing an Mi-24 helicopter meeting the agency's needs.  Air
Force Market Research Report, Jan. 24, 2005; Air Force Mi-24 D&;F, Jan.
28, 2005; Contracting Officer's Statement, Mar. 22, 2005.

   Vertol asserts that, as an alternative to a standard FAA airworthiness
certificate, the agency should be required to accept the "experimental"
certification of its Mi-24.  Vertol concludes that, by virtue of this
certification, its helicopter was available, and that the Air Force
therefore should have competed the requirement.

   The Competition in Contracting Act of 1984 requires that agencies specify
their needs and solicit offers in a manner designed to achieve full and
open competition, so that all responsible sources are permitted to
compete.  10 U.S.C. SA 2305(a)(1)(A)(i) (2000).  However, the
determination of a contracting agency's minimum needs and the best method
for accommodating them are matters primarily

   within the agency's discretion.  Tucson Mobilephone, Inc., B-250389, Jan.
29, 1993, 93-1 CPD PA 79 at 2, recon. denied, B-250389.2, June 21, 1993,
93-1 CPD P 472.  Where a requirement relates to national defense or human
safety, as here, an agency has the discretion to define solicitation
requirements to achieve not just reasonable results, but the highest level
of reliability and effectiveness.  Caswell Int'l Corp., B-278103, Dec. 29,
1997, 98-1 CPD P 6 at 2; Industrial Maint. Servs., Inc., B-261671 et al.,
Oct. 3, 1995, 95-2 CPD P 157 at 2.

   We find no basis for objecting to the Air Force's refusal to accept
Vertol's "experimental" certificate.  We note that our Office previously
rejected a similar challenge by Vertol to the Air Force's (and the Army's)
refusal to accept an "experimental" certificate for purposes of using
Vertol's helicopter in military training exercises.  See Vertol Sys. Co.,
Inc., B-293644.6 et al., July 29, 2004, 2004 CPD P 173 at 3-5.  We held
there that the agencies had reasonably established a legitimate need for
aircraft to be certified before award.  Given the critical need to ensure
the safety of government personnel, including both those on board the
aircraft and those who will be in close proximity to the aircraft while in
operation during the military exercises, we saw no basis to object to a
requirement that the airworthiness of a foreign, contractor-owned aircraft
be demonstrated by means of an appropriate certification by competent
aviation authorities.  Vertol has provided nothing in its arguments here
to change our view.        

   We further noted in our decision that, in response to our request for its
views, FAA, in a letter signed by the manager of its Production and
Airworthiness Division, supported the agencies' position that an
"experimental" FAA airworthiness certificate would be inadequate for their
needs.  In this regard, FAA regulations generally provide that
"experimental" airworthiness certificates are issued for:  (1)A research
and development; (2)A conducting test flights and other operations to show
compliance with the airworthiness regulations; (3) crew training;
(4)A exhibiting the aircraft's flight capabilities, performance, or
unusual characteristics at air shows, motion picture, television, and
similar productions; (5)A air racing; (6) market surveys; (7)A operating
amateur-built aircraft; (8)A operating kit-built aircraft; or
(9)A operating light-sport aircraft.  14 C.F.R. S 21.191 (2004).  FAA
advised our Office that using helicopters in a joint forces training
exercise would not qualify as exhibition of the aircraft, and that using
the aircraft in this manner would violate the applicable regulation.  In
addition, FAA advised that accepting payment when the helicopter is used
to transport troop personnel would amount to the carriage of persons for
hire, an activity that is prohibited for aircraft with an "experimental"
certificate.  (In this regard, 14 C.F.R. S 91.319(a) provides that:  "No
person may operate an aircraft that has an experimental certificate--(1)
For other than the purpose for which the certificate was issued; or
(2)A Carrying persons or property for compensation or hire.")  Letter from
FAA to GAO, Mar. 19, 2004.

   Vertol asserts that the Air Force should have accepted its helicopter's
"experimental" certificate for this requirement because, unlike the
certificate on which our prior decision was based (which limited
operational use to exhibition of the aircraft), Vertol's current
"experimental" certificate certifies its helicopter for use in research
and development.  In this regard, Vertol notes that, in October 2004, an
FAA Designated Airworthiness Representative (DAR) approved issuance of an
"experimental" FAA airworthiness certificate to Vertol for the purpose of
research and development.  In a declaration furnished to our Office by
Vertol, the DAR states that the "experimental" certificate was issued in
response to a Program Letter from Vertol that specified the purpose of the
intended flights as training U.S. military personnel in the unique
characteristics of the Mi-24 helicopter.  (The Operating Limitations
document approved by the DAR for Vertol's Mi-24 prohibits operation of the
helicopter for purposes other than those set forth in Vertol's Program
Letter.  The Operating Limitations document also requires operation to be
in accordance with the rules of part 91 of FAA's regulations.)  The DAR
states that in January 2005 he approved an amendment to Vertol's Program
Letter that described the purpose of the intended flights as testing and
developing new aircraft equipment, installations and operating techniques,
and further specified that the helicopter may be used to develop and
demonstrate new operating techniques in support of dissimilar aircraft
training techniques, air combat maneuvers and defensive evasive
maneuvers.  See DAR Declaration, Feb. 23, 2005.[3]  Based on this
certification, Vertol concludes its helicopter was available to compete
for the Air Force's requirement.

   Vertol's reliance upon approval by the DAR is misplaced, inasmuch as the
record indicates that the governing FAA regulations, as interpreted by the
FAA, do not permit use of Vertol's helicopter in the contemplated DACT
training.  As an initial matter, we note that DARs are not FAA employees,
but private individuals, appointed by FAA, who may charge a fee for their
services.  Further, FAA's regulations prohibit DARs from acting
inconsistently with FAA regulations and policy.  Specifically, a DAR "may,
within limits prescribed by and under the general supervision of the
Administrator" of FAA, perform such functions as "[p]erform[ing]
examination, inspection, and testing services necessary to the issuance of
certificates, including issuing certificates."  14A C.F.R. SS 183.1,
183.11, 183.33.  However, as made clear in the applicable FAA order, DARs
"ARE NOT authorized to approve departures from specific policy and
guidance, new/unproven technologies, equivalent level of safety findings,
special conditions, or exemptions.  These are inherently governmental
functions and cannot be delegated to a designee."  FAA Order 8100.8B S
300(c) (CHG 3).

   FAA's manager for its Flight Standards Division has advised that the
statements made by the DAR here "do not reflect the official position of
the Federal Aviation Administration."  Letter from FAA to Vertol, Mar. 11,
2005.  Moreover, FAA further advises that the use of Vertol's Mi-24
helicopter in training military personnel would not be a permitted use
under an "experimental" certificate for the purpose of research and
development.  In this regard, as set forth in FAA's regulations, an
"experimental" certificate for the purpose of research and development is
issued for "[t]esting new aircraft design concepts, new aircraft
equipment, new aircraft installations, new aircraft operating techniques,
or new uses for aircraft."  14 C.F.R. SA 21.191(a); Letter from FAA to
GAO, Apr.A 8, 2005.  We find no basis to disagree with FAA's position;
Vertol has not shown, nor is it evident from the record, how training
military personnel in dissimilar air combat falls within the permitted
scope of the research and development purpose.[4] 

   FAA further states that the carriage of military personnel on the Mi-24
helicopter, which is part of the DACT training contemplated by the Air
Force, would not be in accordance with the research and development
purpose for which Vertol's "experimental" certificate was issued. 
According to FAA, since the contemplated training includes the transport
of military personnel, any payment accepted by Vertol for that service
would be viewed by FAA as "the carriage of persons for compensation or
hire," which, as noted above, is not permitted under FAA regulations for
aircraft issued experimental certificates.  14 C.F.R. S 91.319(a); Letter
from FAA to GAO, Apr.A 8, 2005.  Again, Vertol has not provided a basis
for us to question FAA's position. 

   Since the Air Force's view reflects FAA's position, the Air Force
reasonably determined that Vertol's aircraft could not satisfy the
requirement for demonstrated airworthiness.  It follows that there is no
basis for objecting to the agency's proceeding under the Economy Act.[5]

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] Foreign threat systems aircraft are aircraft that represent enemy
aircraft during military exercises and the testing of United States
weapons systems.

   [2] On January 26, 2005, Vertol had submitted to the agency an unsolicited
proposal for the use of Vertol's Mi-24D in the DACT training scheduled for
February 2005.

   [3] We note that, notwithstanding the DAR's approval of an "experimental"
certificate for the purpose of research and development, FAA's on-line
registry of aircraft still indicates that Vertol's Mi-24 helicopter's
"experimental" certificate is for purposes of exhibition--the
certification FAA previously found insufficient for use of the helicopter
in military exercises.  See .

   [4] Vertol asserts that it intends to use its helicopter to test new
aircraft operating techniques.  However, the requirement the Air Force is
seeking to satisfy under the Economy Act is for training military
personnel in dissimilar air combat, not developing new aircraft operating
techniques.  Air Force Comments, Mar. 22, 2005, atA 3.

   [5] Vertol asserts that this requirement should be set aside for small
businesses. However, since Vertol is not eligible to compete for the
requirement, it is not an interested party eligible to protest the
agency's failure to conduct a small business set-aside procurement.  4
C.F.R. S 21.0(a) (2005); Four Winds Servs., Inc., B-280714, Aug. 28, 1998,
98-2 CPD P 57 at 2.