GAO Examines Requirements for Sole-Source Contracts

Sole-source awards can make many contractors feel left out of the loop of the procurement process. GAO in the past has upheld that sole-source contracts are allowable so long as the agency has a reasonable justification for the sole-source contract. 

Recently GAO re-examined what constitutes a reasonable “justification and award” for a sole-source contract.  

In Wamore, Inc., B-417450 et al. (July 9, 2019), GAO examined a sole source contract issued by the Army requesting precision aerial drop systems—called “JPADS 2K”—to be supplied for the countries of Norway and Jordan. These aerial drop systems would use GPS linked to an on-board computer and steerable parachutes to guide loads of up to 2,000 pounds to landing points where soldiers would be waiting. Wamore, and eventual awardee, Airborne, previously worked on these systems as a subcontractor to Airborne.  

After posting notice that they were searching for firms able to produce JPADS 2K units, the Army only received responses from Airborne and Wamore. Through multiple rounds of conversation with the two parties, the Army concluded that Wamore’s response was insufficient and a sole-source award was appropriate. The Army drafted a Justification and Award (“J&A”) statement to award a sole-source contract to Airborne. Wamore protested, arguing they had the ability to supply JPADS 2K as well as the legal rights to JPADS 2K.  

When examining the protest of a sole-source contract or award, GAO determines whether the J&A for the sole-source award was reasonable. J&As must contain “sufficient facts and explanation” to support the use of a sole-source award. If the J&A sets forth “reasonable justifications for the agency’s actions” GAO will not fault the non-competitive sole-source award. 

Alleging that it actually owns the data rights to the JPADS 2K system (and pointing to a pending lawsuit relating to that challenge), Wamore asserted that the Army did not have sufficient facts to reasonably justify what party deserves the sole-source award. GAO disagreed. GAO found that the Army conducted a reasonable inquiry into whether Airborne had the rights to JPADS 2K for procurements. GAO will not adjudicate private parties’ rights, nor will they disturb “an ongoing procurement or an award because of an allegation that data rights are being violated incident to a procurement.”  

GAO also found that the Army conducted a reasonable inquiry to determine if a sole-source award itself was justified. There were multiple documents sent by Wamore to the Army and these documents were considered by the Contracting Officer. The CO investigated the data rights of JPADS 2K for procurement purposes, funding of the previous JPADS projects, and subsequent updates to the JPADS systems.

Although the determination of who has the data rights to JPADS systems remained unresolved, GAO found the CO did enough to determine which party could reasonably supply the rights to the system, therefore meeting the specifications of the request. The CO also looked into the specifications of the JPADS 2K units and alternatives that other parties could provide. GAO found that when put together, these actions taken by the CO were reasonable enough for the J&A of a sole-source award to Airborne.   

This case presents multiple take-aways for government contractors looking at the possibility of protesting a sole-source award.

First, GAO will defer to the agency’s technical determinations, so long as they are reasonable. Wamore is a highly technical case, and GAO relied on the technical analysis and inquiry of the agency for guidance as to the facts of the protest.

Second, even if there is an ongoing private dispute that may affect part of the analysis, GAO will generally refrain from interrupting or postponing a procurement based on that dispute. The CO simply needs to conduct an investigation into the dispute to determine whether it may impact the procurement.

Finally, GAO will find a J&A reasonable when the CO has conducted a wide array of probing investigative tasks surrounding the procurement and the businesses involved before completing the J&A.  

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