Who is allowed to challenge a sole-source procurement?

A reader raised the following topic: What is the procedure for challenging a proposed sole-source acquisition? Who can do so?

In general, the rules for challenging a government agency's intended procurement on a sole-source basis will be similar to those of any other bid protest. However, as discussed herein, such challenges are subject to some special timing requirements.

A general requirement is that an agency must publish in the Commerce Business Daily a synopsis of any proposed contract action expected to exceed $25,000. [See Federal Acquisition Regulation 5.101(a)(1), citing 15 U.S.C. 637(e) and 41 U.S.C. 416.]

When an agency expects to limit competition for a contract to just one source - or to a limited number of sources, when authorized by law - the CBD synopsis must inform the public and invite other potential offerors to submit information demonstrating their ability to meet the agency's need. In practice, this notice is provided by including in the CBD synopsis a reference to a standard "numbered note 22." [See FAR 5.207(e)(3).] Note 22 directs each potential source to identify its interest and its ability to satisfy the government's requirement in writing to the contracting officer within 45 or 30 days if the award is to be issued under an existing basic ordering agreement.

Responding to the notice is very important. A potential source must first respond timely to the CBD notice and receive a negative response before it can file a bid protest against an agency's sole-source procurement. [See DCC Computers Inc., 70 Comp. Gen. 534, 91-1 CPD 514 (1991).] If a company files a bid protest in the time responses to the CBD notice are permitted without first timely submitting an expression of interest, the bid protest will be dismissed as premature. [See Chemical Waste Management Inc., B-244443, June 28, 1991, 91-2 CPD 11.]

If a company files a bid protest after the response period has closed without submitting an expression of interest, the bid protest will be dismissed as untimely. [See Amray Inc., B-248109, April 13, 1992, 92-1 CPD 361.]

Moreover, the company's expression of interest must demonstrate that the company can meet the agency's need. A general statement that the company considers itself to be a responsible source to fulfill the requirement may be inadequate to meet the requirements of numbered note 22. [See Simula Government Products Inc., B-274730, Dec. 9, 1996, 96-2 CPD 219.]

If an agency rejects a company, or otherwise states its intention to proceed with the procurement on a sole-source basis, the company has 10 calendar days to file a bid protest against the agency's decision. A protest filed after more than 10 days will be dismissed as untimely. [See Coating Measurement Instruments, B-256259, March 3, 1994, 94-1 CPD 172.]

If the CBD notice does not include a reference to numbered note 22, the potential source must file its bid protest within 10 days of the date on which the CBD notice was published. Submitting an expression of interest in response to a CBD notice that does not invite one will not preserve the right to file a bid protest later. [See Digicomp Research Corp., B-262139, Dec. 1, 1995, 95-2 CPD 246.]

Also, to challenge an agency's proposed sole-source procurement, a company must be able to show that it would like to participate in the procurement as a prime contractor. (See PPG Industries Inc., B-272126, June 24, 1996, 96-1 CPD 335.)

Companies must be careful when using CBDNet, the electronic version of CBD. Information typically is posted on CBDNet two or three days before it appears in the printed version. In FN Manufacturing Inc. v. United States [41 Fed.Cl. 186 (1998], the Court of Federal Claims found that, for procurements of more than $100,000, the date of the printed version is the one that controls timeliness calculations.

Peckinpaugh is a member of the government contracts section of the law firm Winston & Strawn, in Washington, D.C. This column addresses legal topics that arise in government acquisition and management of ADP resources. Readers are encouraged to submit topics by e-mail to carl@carl.com. This column discusses legal topics of general interest only and is not intended to provide legal advice. Should you have a specific question or legal problem, consult an attorney.

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