B-299044; B-299044.2, Global Communications Solutions, Inc., January 29, 2007

B-299044; B-299044.2, Global Communications Solutions, Inc., January 29, 2007 TITLE: B-299044; B-299044.2, Global Communications Solutions, Inc., January 29, 2007 BNUMBER: B-299044; B-299044.2 DATE: January 29, 2007 ***************************************************************************** B-299044; B-299044.2, Global Communications Solutions, Inc., January 29, 2007 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Global Communications Solutions, Inc. File: B-299044; B-299044.2 Date: January 29, 2007 Ronald K. Henry, Esq., Kevin S. Donohue, Esq., and John L. Bowles, Esq., Kaye Scholer LLP, for the protester. Gerald H. Werfel, Esq., Pompan, Murray & Werfel, PLC, for Globecomm Systems, Inc., an intervenor. Robin Ray Coll, Esq., Department of the Navy, Naval Air Systems Command, for the agency. Linda C. Glass, Esq., and Glenn G. Wolcott, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest is sustained where agency had no authority to use small purchase procedures to acquire a commercial item because the anticipated contract value was in excess of $5 million, contrary to applicable regulation limiting use of these procedures to purchases at or below $5 million. DECISION Global Communications Solutions, Inc. (GCS) protests the issuance of a delivery order to Globecomm Systems, Inc. (GSI) under request for quotations (RFQ) No. 0010181342, issued by the Department of the Navy, Naval Air Systems Command for a quantity of satellite communications systems capable of time division multiple access operation. GCS protests, among other things, that issuance of the delivery order was inconsistent with the solicitation provisions and contrary to statute and regulation. We sustain the protest. BACKGROUND The RFQ, issued on August 24, 2006 under a combined synopsis/solicitation for a commercial item, was issued as a total small business set-aside using simplified acquisition procedures pursuant to the authority of Federal Acquisition Regulation (FAR) Subpart 13.5, captioned "Test Program for Certain Commercial Items." In this regard, the solicitation stated that the applicable provisions and clauses of the FAR were "those in effect through [FAR] Federal Acquisition Circular (FAC) 2005-12." RFQ at 2.[1] Thus, the then-applicable provisions of FAR Subpart 13.5 stated: "This subpart authorizes, as a test program, use of simplified procedures for the acquisition of supplies and services in amounts greater than the simplified acquisition threshold but not exceeding $5 million." FAR sect. 13.500 (FAC 2005-06). Similarly, the then-applicable provisions of FAR Subpart 13.0 stated: "The contracting officer shall not use simplified acquisition procedures to acquire supplies and services if the anticipated award will exceed . . . $5 million . . . including options, for acquisitions of commercial items using Subpart 13.5." FAR sect. 13.000 (FAC 2005-06). In preparing for this acquisition, the agency acknowledges that it initially intended to acquire the solicited items on a sole-source basis from GSI and that, in connection with that planned sole-source acquisition, the agency estimated the acquisition value to be [DELETED] an amount based on "quotes previously obtained from GSI." Agency Report (AR), Tab 6, Price Reasonableness Memorandum, at 3. Nevertheless, the agency asserts that, in light of its determination to compete the requirements, "it was reasonable to expect the eventual cost to drop below $5 million due to the introduction of competition." Id. On September 8, the agency received quotations from seven vendors. Five of the seven vendors, including GCS, submitted quotations that were less than the applicable $5 million threshold;[2] the agency evaluated each of these five quotations as technically unacceptable.[3] Two of the seven vendors, including GSI, submitted quotations that were higher than the $5 million threshold;[4] the agency evaluated GSI's technical submission as "highly satisfactory"[5] and the other vendor's quotation that exceeded the $5 million threshold as "satisfactory." On September 28, FAR Subpart 13.5 was revised, authorizing an increase in the applicable threshold to $5.5 million. FAR Subpart 13.5 (FAC 2005-13). However, the agency did not amend this solicitation's provision that applicable FAR provisions "are those in effect through . . .