Decision
Matter of: T-L-C Systems
File: B-400369
Date: October 23, 2008
Sidney
Earley, T-L-C Systems, for the protester.
Capt. John Cho, Esq., Department of the Army, for the agency.
Cherie Owen, Esq., and Ralph O. White, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that agency improperly
awarded fire alarm contract on sole-source basis is denied where agency has
shown that immediate replacement of 51 failed fire alarms was necessary to
prevent serious injury to property or loss of life, and the agency procured the
only alarms compatible with the agency’s current central alarm receiver.
T-L-C Systems (TLC) protests
the Department of the Army’s decision to award a contract on a sole-source
basis to Monaco Enterprises, Inc. for the purchase of 51 Monaco BTXF radio
fire alarm transmitters. The protester
argues that this contract should not have been a sole-source contract, and that
the protester could have provided equal, government-approved equipment for this
solicitation.
We deny the protest.
According to the Army, the fire alarm system currently
installed at Fort Meade, Maryland
is nearly 30 years old and is in need of replacement. Agency Report (AR), Tab 1 at 1. While the Army had determined by 2002 that
the fire alarm system needed to be replaced, it did not replace the system immediately
because it concluded that it wanted to test new systems. Id. After testing, the agency elected in the 2002
or 2003 to replace its existing fire alarm system with a Monaco
system. Id.
at 1-2; see also AR at 3.
The Monaco
system selected by the Army consists of a central receiver that receives fire
alerts from alarm transmitters installed in individual buildings. AR, Tab 1, at 2. The Army reports that it tested the system
for approximately 1 year, and that it also spent time calibrating the radio
frequencies used by the system, a necessary procedure due to the large amount
of radio traffic at Fort Meade. Id. Since it began testing and calibration of the
Monaco system in
2002, the Army has installed Monaco’s
central receiver at the Fort’s fire station and has already converted
approximately 50 buildings to the new system.
Id. at 1.
In May 2008, the Army decided to purchase Monaco
fire alarms for an additional 97 buildings at Fort
Meade, and prepared a justification
and approval (J&A) memorandum to support its intended sole-source purchase. The rationale for the sole-source purchase
was that Monaco
is the only manufacturer and supplier--and hence the only source--of fire
alarms that are compatible with the Monaco
system already installed at Fort Meade. AR at 4.
The agency further claims that the warranty for the Monaco
system it has been installing would be voided if another manufacturer’s product
were introduced into the system. AR, Tab
1, at 2.
On June 11, before the J&A was approved, the prior fire
alarm system in use at Fort Meade
failed completely. Id.
at 1. In a Memorandum for the Record,
submitted as part of the agency’s report on this protest, Fort
Meade’s Fire Chief explained that
the failed system could not be repaired because replacement parts were no
longer available; he also explained that the failure of the alarms presented a
severe health and safety risk at Fort
Meade. AR, Tab 2, at 1.
In view of the complete failure of the old fire alarm
system on June 11, and the need to immediately replace the failed fire alarms, the
Army awarded an emergency sole‑source contract to Monaco
on June 12. AR at 5. Although the original J&A that had been
prepared in May 2008 sought 97 alarms from the “only responsible source” (Monaco),
the Army prepared a new J&A after the June 11 failure. This new J&A justifies the purchase of
these alarms as a matter of “unusual and compelling urgency.” Id.
In response to this protest, however, the agency decided to reduce the
size of its sole-source purchase justified under unusual and compelling urgency
from 97 alarms to 51 alarms--in essence, the Army decided that a J&A based
on unusual and compelling urgency should only be used to cover replacement of
the alarms that failed on June 11. AR,
Tab 1, at 2.
The protester argues that this sole source procurement--as
originally proposed, and as modified--is improper because TLC could have
provided equivalent equipment had it been asked, and because, in TLC’s view, the
old fire alarm system could have been repaired for half the cost of purchasing
the new Monaco
system. Protest at 1; Protester’s
Comments at 1. The protester also
appears to challenge the agency’s original procurement of the central Monaco
receiver and individual fire alarm transmitters that the agency procured
several years ago.[1] Protester’s Comments at 1. As set forth below, we think the Army’s
sole-source award was properly justified, and was a reasonable exercise of its
discretion to make such awards.
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. 10 U.S.C.
sect. 2304(a)(1)(A) (2008). 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. sect. 2304(c)(2).
All Points Int’l, Inc., B‑260134,
May 22, 1995, 95-1 CPD para.
252 at 3. This authority is limited by
10 U.S.C. sect. 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. Lundy Technical Ctr., Inc., B‑243067,
June 27, 1991, 91-1 CPD para.
609 at 3. We will object to the agency's
determination only where the decision lacks a reasonable basis. Datacom, Inc.--Protests and Request for
Costs, B‑274175 et al., Nov. 25, 1996, 96-2 CPD para. 199 at 7.
As described in the facts above, and as referenced in the
J&A, immediate replacement of the failed fire alarms at Fort
Meade was necessary to prevent
potential loss of life and/or property due to undetected fires. In addition, despite TLC’s claims to the
contrary, the Army concluded that it would not be able to repair the old
system, as replacement parts for that system were no longer being made. We see no basis in this record to question
that judgment. Moreover, because the testing
of the Monaco
system had already been completed, and the Monaco
central receiver had already been installed, the Army concluded that replacing
the failed fire alarms with Monaco
alarms was necessary to achieve compatibility within its fire alarm
system. As a final matter, we note that in
response to this protest the agency reasonably elected to limit the size of the
current sole-source award to cover only the number of fire alarms needed to
replace those that had failed on June 11.
Given the severity of the potential harm if the government
did not replace the failed fire alarms, and the fact that, under these exigent
circumstances, where time was of the essence, only the Monaco alarms could be
immediately installed to work with the central receiver without additional, and
possibly extended, testing, we think that the agency’s sole-source purchase of 51 fire alarms was properly
justified, and a reasonable exercise of its discretion to justify such awards.
The protest is denied.
Gary L. Kepplinger
General Counsel