Key Case Law Rules for Government Contract Formation
Go Beyond the FAR!

The guidance contained in the almost 2000 pages of the Federal Acquisition Regulation and the various agency supplements are just a part of the resources government acquisition professionals need to do their jobs effectively. Accessing and understanding case law is equally important to a thorough understanding of government contracting. Legal decisions explain the Government Accountability Office's and the courts' views on how procurement statutes and regulations apply in a wide range of situations. Case law also gives potential bid protesters and agencies a way to gauge the likely outcome of a protest.

Until now, it has been difficult to find and understand the legal decisions that could be relevant to a particular situation. 
Key Case Law Rules for Government Contract Formation changes that by organizing and explaining the most important protest grounds in a readily accessible and comprehensible way. With an emphasis on more recent cases, the book is organized around the key protest grounds, such as pricing issues, allegations that the government wrongfully prevented competition, or improper sealed-bidding procedures.

Bridging the gap of understanding between the legal and the contracting communities, this book is a much-needed addition to the essential resources for acquisition professionals.

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Overview

Go Beyond the FAR!

The guidance contained in the almost 2000 pages of the Federal Acquisition Regulation and the various agency supplements are just a part of the resources government acquisition professionals need to do their jobs effectively. Accessing and understanding case law is equally important to a thorough understanding of government contracting. Legal decisions explain the Government Accountability Office's and the courts' views on how procurement statutes and regulations apply in a wide range of situations. Case law also gives potential bid protesters and agencies a way to gauge the likely outcome of a protest.

Until now, it has been difficult to find and understand the legal decisions that could be relevant to a particular situation. 
Key Case Law Rules for Government Contract Formation changes that by organizing and explaining the most important protest grounds in a readily accessible and comprehensible way. With an emphasis on more recent cases, the book is organized around the key protest grounds, such as pricing issues, allegations that the government wrongfully prevented competition, or improper sealed-bidding procedures.

Bridging the gap of understanding between the legal and the contracting communities, this book is a much-needed addition to the essential resources for acquisition professionals.

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Meet the Author


Visit Author Page - Patrick Butler

Patrick Butler is Chief of the Contract and Fiscal Law Division within the Office of the Chief Counsel for the National Guard Bureau in Arlington, Virginia. He is an Army Judge Advocate currently in the rank of Lieutenant Colonel (LTC). He has practiced government contract law for most of his military career, including serving as a contract law attorney in the Office of the Judge Advocate for U.S. Army Europe and a contract litigation attorney at the U.S. Army Litigation Division.

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Excerpt

Key Case Law Rules for Government Contract Formation

Key Case Law Rules for Government
Contract Formation

Patrick Butler

Lieutenant Colonel



Key Case Law Rules for Government Contract Formation

CHAPTER 1
Protest Grounds Alleging That the Government Is Wrongfully Preventing Competition

1. LACK OF ADVANCE PLANNING

Overview of This Protest Ground: Protests often arise when a company wants to compete for a particular government requirement but the government has awarded a sole-source contract to a competitor or has otherwise failed to open the requirement up for competition. Sometimes these types of protests are filed against a modification to a contract that a protester believes is “outside the scope” of the awarded contract and, in its view, circumvents competition in violation of the Competition in Contracting Act (CICA).

Although there are legitimate and supportable reasons for the government to enter into sole-source (or limited-sources) contracts, the government is not allowed to circumvent competition because it failed to plan adequately for a competitive procurement. This statutory prohibition is set out at 41 U.S.C. § 3304(e)(5)(A)(i): “In no case may the head of an agency… enter into a contract for property or services using procedures other than competitive procedures on the basis of the lack of advance planning….” For DOD this statutory prohibition is codified at 10 U.S.C. § 2304(f)(4)(A), which uses the same operative language.

COFC’s Key Language

CICA provides that sole-source procurements may not be used when the circumstances justifying the award were due to the agency’s own lack of advance planning. 10 U.S.C.A. § 2304(f)(4)(A); FAR 6.301(c)(1). To the extent that the [agency] justifies its sole-source award to [the awardee] on “the short time line” available to properly research responsible sources for [this] contract, this justification violates CICA. The time-frame for the award of this bridge contract was, on the record before the court, entirely the result of a lack of advance planning on the part of the [agency].

Innovation Development Enterprises of America, Inc. v. United States, 108 Fed. Cl. 711 (2013).

GAO’s Key Language

An agency using the urgency exception may restrict competition to the firms it reasonably believes can perform the work in the available time so long as the agency did not create the need for the sole-source award from a lack of advanced planning. 10 U.S.C. sect. 2304(f) (5)(A).

Major Contracting Services, Inc., B-401472, Sep. 14, 2009.

Under CICA… contracting officers have a duty to promote and provide for competition and to provide the most advantageous contract for the government. In their role of promoting and providing for competition, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a noncompetitive position where they could reasonably take steps to enhance competition…. CICA further provides that under no circumstance may noncompetitive procedures be used due to a lack of advance planning by contracting officials…. Although the requirement for advance planning is not a requirement that such planning be successful or error-free, the advance planning must be reasonable.

eFedBudget Corporation, B-298627, Nov. 15, 2006.

Turning to the propriety of the sole-source bridge contract with [the awardee], we first find that the sole-source award was improper because it is not supported by a written J&A. In this regard, when an agency uses noncompetitive procedures, such as 41 U.S.C. § 253(c) (1) (2000), which authorizes the use of noncompetitive procedures when the property or services are available from only one responsible source, the contracting officer is required to execute a written justification with sufficient facts and rationale to support the use of the authority, certify its accuracy and completeness, and obtain approval of the action from the cognizant agency official prior to making an award. See 41 U.S.C. § 253(f)(1)(A), (B), (C); Federal Acquisition Regulation (FAR) §§ 6.303, 6.304…. Here, the agency did not execute a J&A prior to awarding the letter contract, as required by the statute…. Thus, the agency’s letter contract award to [the awardee] constitutes an improper sole-source award.

VSE Corporation, B-290452.3, B-290452.4, B-290452.5, May 23, 2005.

FAR Crosswalk: Definition of “acquisition planning” at FAR § 2.101; FAR Part 6 generally and FAR § 6.301(c) in particular; FAR Part 7, Acquisition Planning; and FAR Part 10, Market Research.

Other Relevant Cases: See page 289 in the Index of Representative Cases.

Commentary: Overall, this is a risky area of protest for the government for the simple reason that sometimes the government fails to plan in advance for competition as required by the law. Furthermore, this is an area where the COFC and the GAO will closely examine the government’s rationale in support of the noncompetitive contracting action. Often, the government has a justifiable reason for the noncompetitive contracting action but fails to adequately document that reasoning in the Justification and Approval (J&A) document for the noncompetitive acquisition or fails to publish one at all. (Failure to document procurement decisions adequately is a common problem that makes it difficult for the government to defend against several different protest grounds). Even when advance planning was lacking, however, the government’s requirement for the goods or services usually remains and government officials often see little choice but to proceed with a sole-source contract or a potentially out-of-scope modification to an existing contract. If there are no legally sufficient contracting options available, the alternative is to simply stop the work—a decision that the government is often loathe to make. If a contracting action proceeds in these situations, the chances of a protest’s being sustained are high.

The COFC and the GAO will take a close look at the government’s reasons for circumventing competition. This is very much a case-by-case (fact-specific) analysis, but due in part to CICA’s requirement for the government to execute a J&A in support of a sole-source (or limited-sources) procurement, the burden is on the government to show why it was not able to set up at least a limited competition for the goods or services it is seeking. Under CICA, the government has an affirmative obligation to make the effort to obtain competition, unless a valid exception to CICA applies. A recent review of DOD contracting by the GAO found that in FY2012, DOD cited “only one responsible source” for a significant majority of the dollars that were obligated under any CICA exception.29

A review of the case law shows that the GAO and the COFC will examine the J&A to see if the proffered justifications are reasonable or if the government is taking a passive stance and improperly allowing the requirement to remain in a noncompetitive posture. In this regard, the GAO and the COFC will examine the length of time that the agency was aware of the fact that a particular requirement would need to be sole-sourced as well as any actions the government took to move toward competition.

The importance of a well-written J&A cannot be emphasized enough; the government cuts corners on the J&A at its own risk. The GAO and the courts expect the J&A to be a stand-alone document that fully describes the contemporaneous reasons supporting the government’s use of the specified CICA exception. The GAO and the courts find ex post facto explanations (usually asserted for the first time in heat of protest litigation) to be less persuasive. Furthermore, the GAO and the courts want to see the actual steps the government has taken to move the challenged procurement into a competitive posture. These forums pay little attention to government “lip service” regarding competition unless the agency can point to concrete steps it has taken to move the requirement into a competitive posture. In other words, the GAO and the courts are seldom persuaded by the fact that the government is “assessing” the possibility of competition or “considering” moving the requirement toward a competitive posture.

Agencies are wise to ensure that the J&A is well written and thoroughly documented. Agency contracting offices should have plenty of well-written J&A templates on hand to serve as models. (The Army, as an example, sets out a specific J&A template at Section 5153.9005 of the Army FAR Supplement.) This is an area where attorneys and supervisory contracting officers should be heavily involved in the quality control process for the J&A to ensure that it comports with CICA and addresses the concerns raised in the COFC and the GAO cases. Essentially, the J&A should clearly tell the story that led to the need for the noncompetitive contracting action.

2. IMPROPER OR UNSUPPORTED USE OF AN EXCEPTION TO COMPETITION

Overview of This Protest Ground: As a general rule, the Competition in Contracting Act requires the federal government’s contracting officers to “promote and provide for full and open competition in soliciting offers and awarding Government contracts.” CICA’s requirement for full and open competition can be thought of as a broad general rule with an array of exceptions. Protests in this area are almost always triggered when a company believes that it is being unlawfully excluded from competing for a government contract. There is some overlap here with the prior protest ground because some of the protests in this area are based on the allegation that the government’s use of a particular CICA exception is an attempt to legitimize a lack of advance planning.

The CICA competition requirements are primarily implemented in FAR Part 6, Competition Requirements. That part sets out three overarching levels of competition: (1) full and open competition, (2) full and open competition after the exclusion of sources, and (3) other than full and open competition. This protest topic focuses on the third category, “other than full and open competition.” CICA, as implemented in FAR Subpart 6.3, sets out seven permissible grounds for other than full and open competition: (1) only one responsible source and no other supplies or services able to satisfy agency requirements, (2) unusual and compelling urgency, (3) industrial mobilization; engineering, developmental, or research capability; or expert services, (4) international agreement, (5) authorized or required by statute, (6) national security, and (7) public interest.

Of the seven permissible exceptions to full and open competition, the most commonly used are the first two: “only one responsible source” and “unusual and compelling urgency.” Within DOD, the most commonly cited exception is “only one responsible source.”30 This exception can get complicated, particularly when the reason for using it is based on intellectual property concerns arising from the items (e.g., patents, copyrights, other proprietary data) being developed at private expense. This is an area where the agency’s procurement attorneys may seek guidance from the agency’s intellectual property attorneys to ensure that the government’s actions comport with the laws in this area.31 Contracting personnel are well-advised to raise any such issues with their agency’s attorneys, as such issues are often factually and legally complex.

The GAO and the courts will closely examine the reason that the government has decided to limit competition. They will first look to the particular exception the government is citing as authorization for the “other than full and open competition” contracting action. Once that exception is identified, the GAO and the courts will examine the factual record to determine whether the agency’s decision is reasonable and is supported by the facts. The GAO and the courts closely scrutinize the agency’s J&A document in making their determination regarding the reasonableness of the agency’s action.

For the sake of organization and clarity, the following key case law excerpts are categorized by the particular exception cited by the agency. Emphasis is added with bold text to highlight key language.

A. Exception 1: Only One Responsible Source

COFC’s Key Language

The two types of authority for sole-source procurements at issue in this protest are “only one responsible source” authority, FAR 6.302-1, and “unusual and compelling urgency” authority, FAR 6.302-2. Although the FedBizOpps notice Confirmation identifies only FAR 6.302-1 as authority, the text of the J&A relies on both FAR 6.302-1 and FAR 6.302-2 for authority. The court notes that reliance on both of these provisions as authority for a sole-source procurement J&A is extremely rare, at least in procurements protested to GAO or this court. In fact, the court is not aware of another J&A which has attempted to rely on both of these statutory authorities for the same sole-source award.

The simple reason that this is such a rare circumstance is that the FAR forbids reliance on FAR 6.302-1 when FAR 6.302-2 is applicable. See FAR 6.302-1(b) (“This authority… shall not be used when any of the other circumstances [in FAR sections 6.302-2, 6.302-3, 6.302-4, 6.302-5, 6.302-6] is applicable.” In other words, if a contracting officer is faced with a situation which can be addressed by applying the “unusual and compelling urgency” provisions of FAR 6.302-2, he or she may not rely on the “only one responsible source” provisions of FAR 6.302-1 to justify a sole-source award. One logical reason for this prohibition is that under FAR 6.302-2, the government is permitted in appropriate circumstances to “limit [but not automatically reduce to one] the number of sources from which it solicits bids or proposals.” FAR 6.302-2(a)(2); see also FAR 6.302-2(c)(2) (“This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances.”) Under FAR 6.302-1, however, the government is permitted in appropriate circumstances to solicit an offer from one source only. See FAR 6.302-1(b)(1). In essence, the prohibition in FAR 6.302-1(b) forces the agency to solicit offers from as many sources as is practicable, in situations of unusual and compelling urgency, before resorting to soliciting offers from only a single source, in circumstances which may also present unusual and compelling urgency.

The specific provisions in FAR Part 10 that have been violated here, in the court’s view, include FAR 10.001(a)(2)(ii), FAR 10.001(3)(i), and FAR 10.002(b). These provisions require market research if the contract is valued to exceed a threshold amount, require market research that identifies potential sources for the contract requirement, and require market research into the availability of commercial items. The record before the court does not show that the [agency] satisfied the market research requirements of FAR Part 10. The failure to conduct adequate market research also implicates FAR 6.302-1(b)(1), which requires a “reasonable basis” for the determination that only one responsible source exists to fulfill a contract requirement. The violation of FAR Part 10 in this procurement was a significant and serious violation of procurement regulations.

Innovation Development Enterprises of Am., Inc. v. United States, 108 Fed. Cl. 711 (2013).

GAO’s Key Language

The Competition in Contracting Act of 1984 requires full and open competition in government procurements except where otherwise specifically allowed by the statute. One exception to this competition requirement is where the agency’s requirement can be performed by only one or a limited number of sources… FAR § 6.302-1. Where, as here, an agency uses noncompetitive procedures it is required to execute a written J&A with sufficient facts and rationale to support the use of the cited authority. Our review of the agency’s decision to conduct a procurement under the exceptions to full and open competition 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 award on the basis of other than full and open competition.

Coastal Seal Services, LLC, B-406219, March 12, 2012.

As a general matter, the Competition in Contracting Act (CICA) mandates “full and open competition” in government procurements obtained through the use of competitive procedures. 41 U.S.C. § 253(c)(1) (2006). CICA, however, provides several exceptions, including when an agency’s requirements can only be satisfied by one responsible source. 41 U.S.C. § 253(a)(1)(a). In this regard, we have recognized that an agency’s legitimate need to standardize the equipment it uses may provide a reasonable basis for imposing restrictions on competition.

Chicago Dryer Company, B-401888, Dec. 8, 2009.

The Competition in Contracting Act of 1984 (CICA) requires that an agency obtain full and open competition in its procurements through the use of competitive procedures. 10 U.S.C. § 2304(a)(1)(A). There are various exceptions to this requirement, including a situation where only one responsible source is able to meet the agency’s requirements. 10 U.S.C. § 2304(c)(1). In this regard, when a contracting agency restricts a contract to an approved product or source, and uses a qualification requirement, it must give other potential offerors a reasonable opportunity to qualify; however, there is no requirement that an agency delay a procurement in order to provide an offeror an opportunity to demonstrate its qualifications. 10 U.S.C. § 2319(b).

Standard Bent Glass Corporation, B-401212, June 23, 2009.

In certain circumstances, it is reasonable for an agency to determine that overall knowledge of all of the critical components of a system is essential. In procurements where the agency lacks a complete data package, a contractor’s familiarity with the work to be performed may justify a limited competition, because award to a firm that lacks that experience may result in unacceptable delay in fulfilling the agency’s requirements. This is the case when hands-on experience is needed to augment an existing, inadequate TDP [Technical Data Package] in order for the contractor to meet the agency’s needs within the time prescribed. Id.

Where an agency does not possess a TDP adequate for competition, the agency may procure its requirement on a sole-source basis from a contractor whose prior experience reduces the risk to the agency that its needs will not be timely met. This is so, even where, given less stringent deadlines, other contractors might as ably perform. Id. Where the protester is at a technical disadvantage to the proposed sole-source recipient, and the record shows that the protester could not remedy its technological deficit and meet the time frame established by the agency, we will not object to the proposed sole-source award.

Raytheon Company – Integrated Defense System, B-400610, B-400618, B-400619, Dec. 22, 2009.

Turning to the propriety of the sole-source bridge contract with [the awardee], we first find that the sole-source award was improper because it is not supported by a written J&A. In this regard, when an agency uses noncompetitive procedures, such as 41 U.S.C. § 253(c)(1) (2000), which authorizes the use of noncompetitive procedures when the property or services are available from only one responsible source, the contracting officer is required to execute a written justification with sufficient facts and rationale to support the use of the authority, certify its accuracy and completeness, and obtain approval of the action from the cognizant agency official prior to making an award. See 41 U.S.C. § 253(f)(1)(A), (B), (C); Federal Acquisition Regulation (FAR) §§ 6.303, 6.304. The only exception to this requirement is where the agency uses noncompetitive procedures because the agency’s need for the property or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals. See 41 U.S.C. § 253(c)(2), (f)(2). Here, the agency did not execute a J&A prior to awarding the letter contract, as required by the statute. While a draft J&A has been provided during the course of our consideration of this protest, the agency advises that this document is only the agency’s “deliberative processes” until a final document is issued. In fact, despite our requests, the agency still has not provided an executed and approved J&A. Thus, the agency’s letter contract award to [the awardee] constitutes an improper sole-source award.

VSE Corporation, Johnson Controls World Services, Inc., B-290452.3, B-290452.4, B-290452.5, May 23, 2005.

The fact that the J&A was inaccurate with regard to the description of the services required is important because where, as here, an agency proposes to award a sole-source contract on the basis that only one source can satisfy its requirements, it is required to provide other prospective sources notice of its intentions, and an opportunity to respond to the agency’s requirements. 10 U.S.C. sect. 2304(f). It is implicit in this that the agency adequately apprise other prospective sources of its needs, so that the prospective sources have a meaningful opportunity to demonstrate their ability to provide what the agency seeks to purchase. Although CICA does not specifically address this point, the legislative history of the statute does. In this regard, the conference report states:

In situations where competition is not anticipated and solicitation packages have not been prepared, agencies shall provide potential competitors who do respond [to the CBD announcement of the agency’s intent to award a sole-source contract] with solicitation packages or comparable information.

Although there is no requirement that an agency express its needs by any particular means, the expression of the agency’s needs nevertheless must be as accurate as possible and cannot be misleading.

Sabreliner Corporation, B-288030, B-288030.2, Sep. 13, 2001.

B. Exception 2: Unusual and Compelling Urgency

COFC’s Key Language

CICA requires, with certain exceptions, that the head of an agency conducting a procurement of property or services “obtain full and open competition.” 10 U.S.C. § 2304(a); FAR 6.101. Subsection (c) of the statute provides for exceptions from the competition requirement, including when “the agency’s need for the property or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.” § 2304(c)(2). However, even when an agency limits the number of sources because of unusual and compelling urgency, CICA requires the agency to “request offers from as many potential sources as is practicable under the circumstances.” § 2304(e); see also FAR 6.302-2(c)(2). CICA requires that any justification for a sole source award include “a determination that the anticipated cost will be fair and reasonable.” § 2304(f)(3)(C); see also FAR 6.303-2(b)(7).

The law permits an agency to post the public notice of a sole source award made because of unusual or compelling urgency within 30 days after contract award. 10 U.S.C. § 2304(l)(1)(B); FAR 6.305(b). In deciding when to post a J&A, the agency should not intentionally delay the posting, as it did here, as a means of avoiding potential bid protests. FAR 1.102-2(c) requires government officials to “conduct business with integrity, fairness, and openness,” and to thereby “[maintain] the public’s trust.” This provision comes into play in determining the reasonableness of government action when procuring officials engage in gamesmanship to avoid any review of an improper sole source award. In other circumstances, the application of FAR 1.102-2(c) to sustain a bid protest may be debatable. However, as a basic tenet of the FAR acquisition system, the Court is not inclined to ignore principles of integrity, fairness, and openness where they directly apply to government actions. The Court finds that, even though the posting of the J&A technically was within the 30-day period allowed by FAR 6.305(b), the conduct complained of was arbitrary and capricious, and cannot be condoned in any reputable procurement system.

California Indus. Facilities Res., Inc. v. United States, 100 Fed. Cl. 404 (2011).

GAO’s Key Language

The Competition in Contracting Act (CICA)…. permits an agency to use other than competitive procedures in acquiring goods or services where the agency’s requirement is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits proposals. Although CICA requires that agencies solicit offers from as many potential sources as is practicable when using the unusual and compelling urgency exception to limit competition, 10 U.S.C. § 2304(e), an agency nonetheless may limit a procurement to the only firm it reasonably believes can properly perform the work in the time available. When using noncompetitive procedures pursuant to 10 U.S.C. § 2304(c)(2), such as here, agencies are required to execute a written J&A with sufficient facts and rationale to support the use of the cited authority. Our review of an agency’s decision to conduct a noncompetitive procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A; where the J&A sets forth a reasonable justification for the agency’s actions, we will not object to the award.

Camden Shipping Corporation, B-406171, B-406323, March 12, 2012.

The overriding mandate of the Competition in Contracting Act (CICA) is for “full and open competition” in government procurements, which is obtained through the use of competitive procedures. Where an agency’s needs are of such an unusual and compelling urgency that the government would be seriously injured if the agency is not permitted to limit the number of sources from which it solicits bids or proposals, the agency may use noncompetitive procedures pursuant to the authority set forth at 10 U.S.C. § 2304(c)(2). This authority is limited by 10 U.S.C. § 2304(e), which requires agencies to request offers from as many sources as practicable. An agency may limit a procurement to only one firm if it reasonably determines that only that firm can properly perform the work in the available time. We will object to the agency’s determination only where the decision lacks a reasonable basis.

T-L-C Systems, B-400369, Oct. 23, 2008.

The Competition in Contracting Act (CICA), 10 U.S.C. § 2304(c)(2), permits an agency to use other than competitive procedures in acquiring goods or services where the agency’s requirement is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits proposals. Moreover, while CICA requires that agencies solicit offers from as many potential sources as is practicable when using the unusual and compelling urgency exception to limit competition, 10 U.S.C. § 2304(e), an agency nonetheless may limit a procurement to the only firm it reasonably believes can properly perform the work in the time available. In this regard, a military agency’s assertion that there is a critical need that is related to human safety and affects military operations carries considerable weight. The reasonableness of the contracting activity’s judgments must be considered in the context of the time when they were made and the information that was available at that time.

Meggitt Safety Systems, Inc., B-297378, B-297378.2, Jan. 12, 2006.

If noncompetitive procedures are used pursuant to 10 U.S.C. § 2304(c)(2), such as here, the agency is required to execute a written J&A with sufficient facts and rationale to support the use of the specific authority. See 10 U.S.C. § 2304(f)(1)(A), (B); FAR §§ 6.302-1(d)(1), 6.302-2(c)(1), 6.303, 6.304. Our review of the agency’s decision to conduct a noncompetitive procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A. However, noncompetitive procedures may not properly be used where the agency created the urgent need through a lack of advanced planning. 10 U.S.C. § 2304(f)(5)(A). In addition, the urgency justification cannot support the procurement of more than the minimum quantity needed to satisfy the immediate urgent requirement.

Military mission readiness and personal safety are important considerations in judging the reasonableness of an agency’s determination that unusual and compelling urgency prevents the agency from conducting a procurement on the basis of full and open competition, as provided for by CICA. It is beyond cavil that an agency need not risk injury to personnel or property in order to conduct a competitive acquisition.

Pegasus Global Strategic Solutions, LLC, B-400422.3, Mar. 24, 2009.

C. Exception 3: Industrial Mobilization

GAO’s Key Language

Agencies have authority to conduct procurements using other than full and open competition and may properly award sole-source contracts to a particular concern for purposes of establishing or maintaining industrial mobilization base sources of supply. 10 U.S.C. § 2304(c)(3). Where a military agency makes a sole-source award for purposes of maintaining a particular supplier of an item, concern for maximizing competition is secondary to the agency’s industrial mobilization needs. Decisions as to which producers should be included in the mobilization base and which restrictions are required to meet the needs of industrial mobilization, involve complex judgments that must be left to the discretion of the military agencies. We will question those decisions only if the evidence convincingly shows that the agency has abused its discretion.

Outdoor Venture Corp, B-405423, Oct. 25, 2011.

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