Nomura Enterprise, Inc.--Request for

Nomura Enterprise, Inc.--Request for BNUMBER: B-260977.2; B-260977.3 DATE: November 2, 1995 TITLE: Nomura Enterprise, Inc.--Request for Reconsideration and Protest ********************************************************************** Matter of:Nomura Enterprise, Inc.--Request for Reconsideration and Protest File: B-260977.2; B-260977.3 Date: November 2, 1995 John W. Reimers and Al Weed, Esq., for the protester. Caridad Ramos, Esq., and Jeffrey I. Kessler, Esq., Department of the Army, for the agency. Laurence Schor, Esq., Smith, Somerville & Case, for Barnes & Reinecke, Inc., an interested party. M. Penny Ahearn, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest against award of sole source contract for engineering support services related to the M109 self-propelled howitzer is denied where agency reasonably concluded that unacceptable delays would occur if award were made to another source prior to completion of current production due to massive amount of materials and equipment which would have to be transferred to new contractor. DECISION Nomura Enterprise, Inc. (1) requests reconsideration of our May 5, 1995 dismissal of its protest against the intended award by the Department of the Army, Army Materiel Command, of a sole source contract to Barnes & Reinecke, Inc. (BRI), and (2) protests the subsequently issued solicitation--request for proposals (RFP) No. DAAE20-95-R-0101--for a sole source award to BRI, for engineering support services related to the M109 self-propelled howitzer. The Army justifies the proposed sole source award to BRI on the basis that only BRI can provide the services without unacceptable delays and substantial duplication of costs that will not be recovered through competition. Nomura challenges both of these conclusions. We dismiss the request for reconsideration as academic and deny the protest. BACKGROUND The M109 howitzer provides artillery support to armored/mechanized infantry divisions for the Army and several foreign military sales customers. The services being procured include: engineering and maintenance of the M109 technical data package, technical manuals, and depot maintenance work requirements; development and incorporation of engineering change proposals; engineering studies; failure analysis; and life-cycle engineering. The original "class" justification and approval (J&A) for use of other than full and open competitive procedures concluded that a sole source award to BRI was justified under the authority of 10 U.S.C.  2304(c)(1), on the basis that the firm was the only known source that could supply the services. It provided that BRI was to perform the services for a period of approximately 5 years. The J&A recognized Nomura as an interested source, but concluded that the firm would need at least an 18- to 24-month start-up period, a delay the M109 program could not then accommodate. On March 21, 1995, a synopsis of the intended award to BRI was published in the Commerce Business Daily (CBD). On April 3, Nomura protested the sole source procurement, alleging that it could perform the work based on its past performance of a technical support contract for the M110 self-propelled howitzer. (At the time of the protest, the firm did not have a copy of the J&A, and thus did not specifically challenge it.) On May 5, we dismissed Nomura's protest (B-260977) as premature, based on the agency's representation that the sole source award to BRI was under consideration and had not yet received the necessary approvals. If and when the procurement approval was made on a sole source basis, the Army indicated it intended to resynopsize the procurement in the CBD. In response, Nomura first requested reconsideration of our dismissal and then, after issuance of the solicitation for a sole source award to BRI, protested the agency's rationale for a sole source procurement. Subsequently, on August 3, the Army issued amendment No. 1 to the original class J&A. The amended J&A concluded that a sole source award to BRI, the developer of the M109 howitzer, was necessary because a competitive procurement would result in program delays of 6 to 10 months and duplication of costs not expected to be recovered through competition in the amount of $2,000,000. The amendment decreased the dollar value of the contract contemplated in the original J&A by almost half and the 5-year term of the original J&A to 1 year plus two 6-month options. It also provided for competition for future M109 engineering services in the near future; the agency expects to issue a competitive solicitation by February 1996 and estimates a resulting award by October 1996.