FAA's ODRA Sustains Protest of Sole Source Award

by Holland & Knight LLP

In a recent decision, the Federal Aviation Administration's ("FAA") Office of Dispute Resolution for Acquisition ("ODRA") sustained a protest challenging the intent to award single source contract because, according to ODRA, the award was inconsistent with the FAA's Acquisition Management System ("AMS") and lacked a rational basis because the agency did not provide sufficient documentation supporting its decision. See Protest of Diamond Antenna & Microwave Corp., Docket number 12-ODRA-00605 and 12-ODRA-00617 (Dec. 5, 2012).  The decision demonstrates that ODRA -- like the other bid protest forums, the Government Accountability Office and Court of Federal Claims -- will closely scrutinize sole source award determinations.

FAA procurements are governed by the AMS rather than the Federal Acquisition Regulation. Congress directed the FAA to create a "personnel management system to address the unique demands of the agency's work force" in the 1996 Department of Transportation and Related Agencies Appropriations Act. All bid protests and contract disputes under the AMS are decided by ODRA.

In Diamond, the FAA Mike Monroney Aeronautical Center ("Center") published a market survey on the FAA Contracting Opportunities website "for the acquisition of 13 rotary joint L-Band Beacons…and 13 rotary joint L-Band Receivers…in support of the Air Route Surveillance Radar (ARSR-4), manufactured by Kevlin Corporation.” The market survey provided the names and part numbers, but did not provide performance or design information. The market survey "disclaimed assess to such information."

Kelvin Corporation, the incumbent contractor and intervener in the protest, provided Beacons and Receivers to the Center since at least 2003 and asserted proprietary interests in the parts. The Center issued a single source justification ("SSJ") that asserted the following three bases in support of its single source decision: (1) proprietary rights claims by Kevlin, (2) reverse engineering difficulties, and (3) configuration management issues. Diamond Antenna & Microwave Corporation filed two protests with ODRA, and after an extended ADR effort did not result in resolution, ODRA consolidated the protests for adjudication.

With only a reference to the market survey, the SSJ did not include any supporting documentation and did not incorporate any analysis, data or information in support of its decision to award a single source contract. In the public announcement of the award the Center claimed, "'[a]s the specifications and drawings are proprietary to Kevlin, the FAA intends to solicit and negotiate only with Kevlin Corporation, Methuen, MA, in accordance with AMS Policy'"

AMS Policy governs single-source selection and states that the FAA may enter into a single source contract when it is in the Agency's "best interest and the rational basis for the decision is documented." AMS policies are "agency-wide, mandatory requirement[s] of the AMS, applicable to all activities associated with the analysis of agency needs for products, services, and facilities, determination of requirements, analysis of investment alternatives, establishment of investment programs, allocation and expenditure of resources, procurement, deployment of products and services, in-service management of fielded capabilities, and eventual disposal of obsolete assets."

ODRA acknowledged that each of the three bases the Center uses in support of its single source decision are "capable of supporting a single source justification," however "[m]ere unsupported conclusions lacking in adequate objective supporting data cannot properly support a single source award." ODRA also turned to several other AMS Policies to illustrate the AMS' "strong preference for competition." The preference for competition can only be overcome by a substantially supported determination that a single source award is proper.   ODRA sustained the protest and held that without substantial evidence in the record, the Center's decision lacked a rational basis and was not consistent with the requirements of the AMS. ODRA recommended that the Center not award the contract under the current solicitation and that it should make any future award "in a manner consistent with the AMS."

For contractors, this decision demonstrates that even though proprietary rights, under the AMS, can serve as a justification for single source award, FAA must still provide adequate documentation and supporting data of the contractor's proprietary rights. The AMS requires more than mere unsubstantiated assumptions to overcome the agency's preference for competition.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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