TITLE: B-298804, Exploration Partners, LLC, December 19, 2006
BNUMBER: B-298804
DATE: December 19, 2006
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B-298804, Exploration Partners, LLC, December 19, 2006

   Decision

   Matter of: Exploration Partners, LLC

   File: B-298804

   Date: December 19, 2006

   Royce Jones for the protester.

   James H. Roberts, III, Esq., Van Scoyoc Kelly PLLC, for Rocketplane
   Kistler, the intervenor.

   Vincent A. Salgado, Esq., Eve Lyon, Esq., Amy Voigt, Esq., and Jonathan A.
   Arena, Esq., National Aeronautics and Space Administration, for the
   agency.

   Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Under the Competition in Contracting Act of 1984 and GAO's Bid Protest
   Regulations, GAO will not review the issuance of Space Act agreements
   pursuant to agency's "other transactions" authority, because the issuance
   of the Space Act agreements pursuant to that authority was not tantamount
   to the award of contracts for the procurement of goods and services and
   was, therefore, outside GAO's bid protest jurisdiction; GAO will review,
   however, a timely protest that an agency improperly used a non-procurement
   instrument, such as an "other transactions" instrument, where a
   procurement contract was required.

   DECISION

   Exploration Partners, LLC protests the issuance of funded Space Act
   agreements to Space Exploration Technologies Corporation (SpaceX) and
   Rocketplane Kistler Limited Incorporated by the National Aeronautics and
   Space Administration (NASA) under announcement No. COTS-01-05, which
   solicited research and development proposals in support of the agency's
   Commercial Crew/Cargo Project Office.

   We dismiss the protest.

   "Space Act" agreements are issued by NASA under its "other transactions"
   authority pursuant to the National Aeronautics and Space Act of 1958 (the
   "Space Act"). 42 U.S.C. sect. 2473(c)(5) (2000). A "Funded Space Act
   Agreement" is "an agreement under which appropriated funds will be
   transferred to a domestic agreement partner to accomplish an Agency
   mission, but whose objective cannot be accomplished by the use of a
   contract, grant, or Chiles Act cooperative agreement." NASA Policy
   Directive, NPD 1050.1G, Nov. 13, 1998, at 1-2.

   NASA established the Commercial Crew/Cargo project to:

      .        implement U.S. Space Exploration policy with an investment to
     stimulate commercial enterprises in space,

      .        facilitate U.S. private industry demonstration of cargo and
     crew space transportation capabilities with the goal of achieving
     reliable, cost effective access to low-Earth orbit, and

      .        create a market environment in which commercial space
     transportation services are available to Government and private sector
     customers.

   Announcement at 1. In support of these objectives, NASA informed
   interested firms that the agency envisioned a two-phased approach to be
   known as the commercial orbital transportation (COTS) project. Phase 1 was
   described as a "period of development and demonstration by private
   industry, in coordination with NASA, of various space transportation
   capabilities . . . determined to be most desirable for the Government and
   other customers." Phase 2 was described as a "potential competitive
   procurement of orbital transportation services to resupply the
   [International Space Station] with cargo and crew, if a capability is
   successfully demonstrated and the Government determines it is in its best
   interest." NASA issued the announcement, which is the subject of this
   protest, to implement phase 1 of the COTS project and stated that the
   agency intended to enter into "at least one and preferably multiple"
   funded Space Act agreement(s). Id. at 2.

   Firms were also informed that NASA anticipated providing funding of up to
   $500 million over a 4-year period; firms were also informed that "[i]n
   order to maximize capability coverage, participants are expected to secure
   additional funds to supplement the NASA funding." Id. at 12. In this
   regard, the announcement stated

     Payments will be made upon the successful completion of performance
     milestones as proposed by the participants and negotiated with NASA.
     NASA's contribution will be a fixed amount and will not be increased
     based on the participant's ability to obtain private funding.

   Id. at 3.

   The announcement requested proposals from interested firms and provided
   instructions for the preparation of proposals. Proposals were to describe
   the firms' business plans and technical approaches, and to provide the
   firms' anticipated costs, estimated operational prices, and business
   financial information. See id. at 16-22, app. C. The announcement also
   stated that selection of proposals for issuance of Funded Space Act
   agreements would not be governed by the Federal Acquisition Regulation
   (FAR) or the agency's FAR supplement because the announcement did not
   provide for the award "of a contract, grant, or cooperative agreement."
   Id. at 23.

   NASA received proposals from a number of firms, including Exploration
   Partners, SpaceX, and Rocketplane. Six firms, including SpaceX and
   Rocketplane, were invited to proceed to "negotiations"; the protester was
   not. Subsequently, NASA issued Space Act agreements to SpaceX and
   Rocketplane.

   Exploration Partners protests that, as "the only company that offered a
   fully funded end-to-end transportation system," it should have received a
   Space Act agreement. In the alternative, the protester requested that the
   "COTS program . . . be re-bid under the original terms and conditions
   without interference in obtaining Shuttle hardware, cost data or
   interference in commercial business relationships." Protest at 7.

   NASA and the intervenor argue that the Space Act agreements protested here
   are not procurement contracts subject to our bid protest review under the
   Competition in Contracting Act of 1984 (CICA). Instead, they assert that
   these agreements were issued pursuant to the agency's "other transactions"
   authority under the Space Act. Accordingly, the agency and intervenor
   request that we dismiss this protest.

   Under CICA and our Bid Protest Regulations, we review protests concerning
   alleged violations of procurement statutes or regulations by federal
   agencies in the award or proposed award of contracts for procurement of
   goods and services, and solicitations leading to such awards. See 31
   U.S.C. sections 3551(1), 3552 (2000); 4 C.F.R. sect. 21.1(a) (2006). We
   generally do not review, however, protests of the award or solicitations
   for the award of cooperative agreements or other non-procurement
   instruments because they do not involve the award of a procurement
   contract. See, e.g., Sprint Communications, L.P., B-256586, B-256586.2,
   May 9, 1994, 94-1 CPD para. 300 at 3 (GAO does not have jurisdiction to
   consider the award of a cooperative agreement).

   The jurisdiction of our Office to review the issuance of these Space Act
   agreements turns upon whether NASA's exercise of its "other transactions"
   authority is actually the award of contracts for the procurement of goods
   and services. NASA's authority to enter into "other transactions" was
   provided by the Space Act, which provides, in pertinent part, that the
   agency may

     enter into and perform such contracts, leases, cooperative agreements,
     or other transactions as may be necessary in the conduct of its work and
     on such terms as it may deem appropriate, with any agency or
     instrumentality of the United States, or with any State, Territory, or
     possession, or with any political subdivision thereof, or with any
     person, firm, association, corporation, or educational institution.

   42 U.S.C. sect. 2473(c)(5). The Space Act does not define "other
   transactions," but Congress recognized at the time of its promulgation
   that this was a grant of "broad authority." [1] See H.R. No. 1770, at 19
   (1958), reprinted in 1958 USCCAN 3160, 3178; see also H.R. No. 1758, at 50
   (1958).

   The starting point for our analysis is the statutory language used by
   Congress. See Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S.
   102, 108 (1980) ("We begin with the familiar canon of statutory
   construction that the starting point for interpreting a statute is the
   language of the statute itself."). Here, the Space Act in its grant of
   authority to NASA plainly distinguished between contracts and "other
   transactions."[2] It is a cardinal principle of statutory construction
   that a statute ought to be so construed that, if it can be prevented, no
   clause, sentence, or word shall be superfluous, void, or insignificant.
   TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001), citing United States v.
   Menasche, 348 U.S. 528, 538-39 (1955). Applying this principle to the
   language of the Space Act, we find that entering and performing "other
   transactions" cannot be the same as entering and performing procurement
   contracts. Therefore, we conclude that NASA's issuance of these Space Act
   agreements pursuant to its "other transactions authority" is not
   tantamount to the award of contracts for the procurement of goods and
   services, which would be subject to our bid protest jurisdiction.[3] This
   conclusion is consistent with our earlier decisions, cited above, in which
   we concluded that our Office's bid protest review authority did not
   generally extend to cooperative agreements and other non-procurement
   instruments.

   Notwithstanding our conclusion, we will review, however, a timely protest
   that an agency is improperly using a cooperative agreement or other
   non-procurement instrument, such as NASA's Space Act agreements, where a
   procurement contract is required, to ensure that an agency is not
   attempting to avoid the requirements of procurement statutes and
   regulations. Id. at 3; Energy Conversion Devices, Inc., B-260514, June 16,
   1995, 95-2 CPD para. 121 at 2. For example, the Federal Grants and
   Cooperative Agreement Act provides, in pertinent part, that an executive
   agency must use a procurement contract when:

     (1)    the principal purpose of the instrument is to acquire (by
     purchase, lease, or barter) property or services for the direct benefit
     or use of the United States Government; or

     (2)    the agency decides in a specific instance that the use of a
     procurement contract is appropriate.

   31 U.S.C. sect. 6303.

   Here, Exploration Partners did not timely challenge NASA's issuance of
   Space Act agreements where the protester believed that procurement
   contracts were required.[4] The protester's contention that NASA allegedly
   misused its "other transaction" authority by issuing Space Act agreements
   to firms that had not offered completely funded end-to-end transportation
   solutions does not, as the protester apparently believes, provide us with
   an independent basis to review NASA's issuance of Space Act agreements
   here. To the contrary, the protester's arguments actually concern NASA's
   selection of Space Act agreement recipients under the announcement, rather
   than the propriety of its use of its "other transactions" authority.

   The protest is dismissed.

   Gary L. Kepplinger

   General Counsel

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

   [1] Since 1958, Congress has extended the authority to use "other
   transactions" to a number of other federal agencies, including the
   Department of Defense (DoD) (10 U.S.C. sect. 2371 (2000)), the Department
   of Homeland Security (Homeland Security Act of 2002, Pub. L. No. 107-296,
   sect. 831(a), 116 Stat. 2224), the Department of Energy (Energy Policy Act
   of 2005, Pub. L. No. 109-58, sect. 1007, 119 Stat. 932), and the
   Department of Transportation (Transportation Equity Act for the 21st
   Century, Pub. L. No. 105-178, sect. 5102, 112 Stat. 423).

   [2] We note in this regard that DoD's grant of "other transaction"
   authority also clearly distinguishes that authority from the authority
   provided DOD to enter into contracts. See 10 U.S.C. sect. 2371(a).

   [3] This conclusion is consistent with the long-held views of those
   agencies that have been granted "other transactions" authority and within
   the federal procurement community generally. See, e.g., NASA's Space Act
   Agreements Manual, NPR 1050.1, Nov. 21, 2003, at 3 ("As discussed in this
   document, these `other transaction' agreements (referred to as Space Act
   agreements) also do not include procurement contracts. Therefore,
   procurement laws and regulations are not applicable."); Memorandum of DoD
   Under Secretary of Defense (Acquisition, Technology & Logistics) Paul
   Kaminiski to Secretaries of the Military Departments, Dec. 14, 1996
   ("other transactions" are "alternatives to contracts," which are not
   subject to procurement statutes and regulations such as CICA and the FAR
   and are not subject to GAO's bid protest review); see also Department of
   Defense "Other Transactions": An Analysis of Applicable Laws, American Bar
   Association Monograph, Jan. 5, 2000. GAO's reports to Congress have also
   reported that "other transactions" are "other than contracts, grants, or
   cooperative agreements that generally are not subject to federal laws and
   regulations applicable to procurement contracts." GAO-03-150, "Defense
   Acquisitions: DOD Has Implemented Section 845 Recommendations but
   Reporting Can Be Enhanced," Oct. 2002, at 1; see also GAO-05-136,
   "Homeland Security: Further Action Needed to Promote Successful Use of
   Special DHS Acquisition Authority," Dec. 2004, at 1 ("Other transactions
   are agreements other than government contracts, grants, and cooperative
   agreements . . . [and] are exempt from the Federal Acquisition Regulation
   (FAR), the government's Cost Accounting Standards, and various federal
   statutes. . . .") (footnote omitted); GAO/NSIAD-00-33, "Acquisition
   Reform: DOD's Guidance on Using Section 845 Agreements Could Be Improved,"
   Apr. 2000, at 3 ("[o]ther transactions are generally not subject to the
   federal laws and regulations governing standard procurement contracts");
   GAO/NSIAD-96-11, "DOD Research: Acquiring Research by Nontraditional
   Means," Mar. 1996, at 2-3.

   [4] Such a challenge here was required to be filed before the closing date
   set for receipt of proposals, given NASA's announcement that it would be
   issuing Space Act agreements. 4 C.F.R. sect. 21.2(a)(1).