DRS Sustainment Systems, Inc.

Decision

Matter of:  DRS Sustainment Systems, Inc.

File:  B-417628; B-417628.2; B-417628.3

Date:  September 9, 2019

DIGEST

Sole-source award for a follow-on procurement contract for the continued development of a complex weapon system is unobjectionable where the agency reasonably determined that award to any other source would likely cause unacceptable delay in fulfilling the agency’s requirements.

DRS Sustainment System (DRS), of St. Louis, Missouri, protests a notice of intent to award a sole-source contract to General Dynamics-Ordnance and Tactical Systems (General Dynamics), of Williston, Vermont, pursuant to solicitation No. W56HZV-19-R-0063, issued by the Department of the Army, Army Materiel Command, for an active protection system (APS) and associated hardware for the Bradley Fighting Vehicle (Bradley).[1]  The protester challenges the basis for the sole-source award and contends that the agency imposed a pre-award qualification requirement and failed to engage in advance planning.

We deny the protest.

BACKGROUND

To protect soldiers, the Army states that it is moving toward installing APS on its combat vehicles.  COS/MOL at 2.  An APS is an autonomous system designed to detect, track, and defeat incoming threats fired by enemy forces before the threats hit the vehicle.  Id.  An APS is designed to counter advanced, anti-armor threats in order to protect soldiers.  Id. at 5.  Before it can be fielded, an APS must address engineering, design, performance, and safety issues.  Id. at 2.  Due to the complexity of the APS and the importance of its function in protecting soldiers, the Army requires extensive, government-run characterization testing to determine whether the system provides an upgrade in safety and can be installed onto a combat vehicle.  Id. at 2, 5.  In this regard, characterization testing is required to demonstrate the basic performance of an APS to detect, track, intercept, and degrade incoming threats.  Id. at 2.  The testing also assesses the impact of APS installation on the Bradley platform, including automotive performance, interoperability, firing performance, durability, electromagnetic-environmental effects, antenna co-site, and ballistic testing against rocket-propelled grenades, recoilless rifles, and anti-tank guided missiles.  Agency Report (AR), Tab 17, Justification and Approval document (J&A), at 6, 8. 

On April 26, 2019, the Army finalized a J&A to support its decision to award a sole-source contract for production of an APS solution for the Bradley.  Id. at 10.  The J&A concluded that a sole-source award to General Dynamics was justified under 10 U.S.C. § 2304(c)(1) and Federal Acquisition Regulation (FAR) § 6.302-1(a)(2)(ii)(B), which authorize the award of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in unnecessary delay in fulfilling the agency’s requirements.  Id. at 4. 

The J&A also outlines the Army’s history of developing an APS solution for the Bradley.  In this regard, the J&A states that in fiscal year 2015, the Army conducted a market survey of industry’s capability to provide an APS solution for ground combat vehicles, including the Bradley.  Id.  Three firms, including General Dynamics, but not DRS, responded.  Id.  After reviewing proposals, the Army selected General Dynamics’ proposal for award.[2]  Id.  In this regard, the agency found that General Dynamics’ APS solution would not require significant investment and development to be considered a viable solution and that installation of its APS solution onto the Bradley would not result in the reduction of other protection systems.  Id.

The J&A further states that in October 2016, the Army sought to address an operational need to address emerging threats to key combat vehicles by using an APS solution.  AR, Tab 5, Directed Requirement Memo, at 1.  The Army approved the Expedited APS (ExAPS) initiative, authorizing expedited experimentation and characterization of an APS solution on the Abrams tank, Bradley, and Stryker family of combat vehicles to assess maturity, performance, and integration risks, leading to the potential deployment of the capability in response to an urgent requirement.[3]  Id.  In this regard, the Army sought to procure and rapidly field an initial APS capability in support of the European Reassurance Initiative by the end of fiscal year 2020.[4]  Id. at 1.

In April 2017, General Dynamics’ APS solution was installed onto the Bradley.  COS/MOL at 7.  The agency conducted characterization testing to determine if the APS solution was appropriate for the Bradley between August 2017 and September 2018.[5]  AR Tab 8, White Sands Missile Range Test Plan, at 10; Tab 26, Declaration of Test Lead for ExAPS Platforms, at 2.

In November 2018, the characterization results and analysis were presented to the Oversight Council.[6]  AR, Tab 28, Declaration of Bradley Product Manager, at 1.  The results showed that General Dynamics’ APS solution could intercept threats without degrading the performance of the Bradley or introducing dismounted troops to additional collateral hazard risk.  Id.  The Oversight Council also considered whether the directed requirement identified in October 2016 was still valid and needed to be executed.  Id.  The Oversight Council determined it was necessary to proceed with testing and production simultaneously, based on the ability of General Dynamics’ APS solution to protect soldiers in the battlefield and the need to field this capability quickly.  Id.  In this regard, the Oversight Council revalidated the October 2016 directed requirement, accepted performance of General Dynamics’ APS solution, and approved the requirement to field a Bradley APS brigade by the fourth quarter of fiscal year 2021, rather than fiscal year 2020.  Id.

The J&A stated that the Army would experience an unacceptable delay in meeting its fiscal year 2021 fielding requirement if it did not make award to General Dynamics for its APS solution.  AR, Tab 17, J&A, at 5.  The J&A explained that it would take 36 months for another contractor to reach the first milestone, which includes designing, developing, fabricating, and testing an equivalent product.[7]  Id.  In this regard, the J&A described the 36 month timeline as including about 9 months for a new competitive procurement; 9 months for A-Kit[8] design, fabrication, and installation; 12 months for test asset fabrication and lead times; and 6 months for characterization testing.  Id. at 5-6.  As relevant here, the J&A states that the durations identified, other than the competitive contract award process, were based on the actual timeline for General Dynamics to reach the first milestone.  Id.  The J&A noted that General Dynamics has been under contract with the government since 2016 to install and characterize its APS solution on the Bradley.  Id. at 8. 

The J&A noted that the Army issued a market survey in December 2018 to determine if other sources were capable of producing a technology readiness level (TRL)[9] 6 APS that would satisfy an APS requirement on the Bradley family of vehicles.  Id. at 7; AR, Tab 13, Bradley APS Market Survey, at 1.  Three sources responded, including General Dynamics and DRS, and the agency determined that only General Dynamics could offer a solution without unnecessary delay that did not degrade mission-critical functions of the Bradley.  AR, Tab 17, J&A, at 7-8.  

As relevant here, DRS’s market survey response identified Trophy HV as the APS system that has been installed and characterized by the government on the Abrams tank, and proposed to update Trophy HV with “the smaller lighter Trophy VPS” for the Bradley platform.[10]  AR, Tab 14, DRS Market Survey Response, at 3, 5.  DRS’s response also identified two other testing efforts as a live-fire demonstration of Trophy VPS for the Stryker program, and an internally-funded, contractor-run, live-fire testing of Trophy VPS on a Bradley chassis that was witnessed by U.S. government officials and designed to replicate the government-run characterization of Trophy HV on the Abrams tank.  Id. at 5, 7. 

The J&A acknowledged that DRS’s Trophy HV is currently installed on the Abrams tank, and that the Army’s product manager for vehicle protection system concluded that necessary component modifications between Trophy HV and Trophy VPS would likely result in unforeseen performance challenges between the two APS solutions.  AR, Tab 17, J&A, at 7.  Additionally, the J&A states that Trophy VPS is still in development, has not undergone any U.S. government-run characterization testing on the Bradley, and that any performance claims by DRS would require objective substantiation through government-run testing and evaluation.  Id. at 8.

On May 21, the agency posted on the Federal Business Opportunities website a notice of intent to award a fixed-price, sole-source contract to General Dynamics for 154 Iron Fist-Light Decoupled (IF-LD) APS; 14 calibration and maintenance kits; and 2,484 IF-LD APS countermeasures to be installed on the Bradley to meet the demands of the European Deterrence Initiative, formerly known as that European Reassurance Initiative.[11]  AR, Tab 18, Notice of Intent, at 1.  The notice stated that the effort is an expedited effort for production and is not intended to be a program of record.  Id.  The notice stated that a J&A was executed on April 26 and identified FAR § 6.302-1 as the authority upon which the agency would solicit and negotiate with only General Dynamics for award.  Id. at 2.  Additionally, the notice announced that all responsible sources were permitted to submit a capability statement, proposal, or quotation for consideration by the agency.  Id.  The notice estimated the value of the contract as $122 million dollars and identified the anticipated award date as January 2020.  Id. at 1. 

On May 30, DRS submitted a capability statement in response to the notice of intent to sole source and protested to our Office the next day.[12]

DISCUSSION

DRS contends that a sole-source award is improper since DRS can meet the Army’s needs, and that the agency failed to engage in advance planning by making characterization testing a pre-award qualification requirement.  In filing and pursuing this protest, DRS has made arguments that are in addition to, or variations of, those discussed below.  While we do not address every issue raised, we have considered all of the protester’s arguments and conclude that none furnishes a basis on which to sustain the protest.[13]

The Competition in Contracting Act (CICA) requires agencies to obtain full and open competition in their procurements through the use of competitive procedures.  10 U.S.C. § 2304(a)(1)(A).  However, CICA permits an exception to the use of competitive procedures where the supplies or services required by an agency are available from only one responsible source, and no other type of supplies or services will satisfy agency requirements.  See 10 U.S.C. § 2304(c)(1); FAR § 6.302-1(a)(2).  As relevant here, for purposes of applying this exception, CICA and the FAR provide that in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, or the continued provision of highly specialized services, such property or services may be deemed to be available only from the original source.  See 10 U.S.C. § 2304(d)(1)(B); FAR § 6.302-1(a)(2)(ii).  Thus, when it is likely that award to a source other than the original source would result in either substantial duplication of costs, or unacceptable delays in fulfilling the agency’s needs, an agency may procure such products and services through other than competitive procedures.  Id.

When using noncompetitive procedures pursuant to 10 U.S.C. § 2304(c)(1), such as here, agencies must execute a written J&A with sufficient facts and rationale to support the use of the cited authority.  10 U.S.C. § 2304(f)(1)(A), (B); FAR §§ 6.302-1(d)(1), 6.303-1, 6.303-2, 6.304.  Under CICA, noncompetitive procedures may not properly be used where the procuring agency created the need to use such procedures through a lack of advance planning.  See 10 U.S.C. § 2304(f)(4)(A); Raytheon Co.-Integrated Def. Sys., B-400610 et al., Dec. 22, 2008, 2009 CPD ¶ 8 at 11.  Our review of an agency’s decision to conduct a sole-source procurement focuses on the adequacy of the rationale and conclusions set forth in the J&A; where a J&A sets forth a reasonable basis for the agency’s actions, we will not object to the award.  FN Am., LLC, B-415261, B-415261.2, Dec. 12, 2017, 2017 CPD ¶ 380 at 5.

The protester contends that the Army cannot justify a sole-source contract because DRS can meet the agency’s announced needs for the Bradley based on its capability statement and extensive testing experience.  Protest at 14-16.  In this regard, the protester asserts that it can deliver an APS for the Bradley requirement in 18 months, based on its three successful testing experiences:  (1) U.S. Army characterization of its TRL 6 Trophy HV solution on the Abrams tank; (2) its own internally-funded, contractor-run, live-fire testing effort to characterize “the smaller, lighter Trophy VPS” system on the Bradley platform, and (3) a live-fire system demonstration with Trophy VPS for the Stryker program.[14]  Id. 

In response, the agency explains that in order to meet its requirement to field a Bradley APS solution by the fourth quarter of fiscal year 2021, it requires an APS solution that has undergone government-run characterization testing, which General Dynamics’ solution has completed, and DRS’s has not.  COS/MOL at 19.  The agency explains that the protester’s assertions that it can timely deliver an APS for the Bradley are incorrect.  In this regard, the agency states that while all Army vehicles that are moving toward APS production have undergone government-run characterization testing, including the Abrams tank on which DRS’s Trophy HV was characterized, the Abrams is “an entirely different platform” from the Bradley, and the Trophy HV solution is an “entirely different system” from Trophy VPS.  Id. at 28.  The agency also states that the Abrams-specific characterization testing on DRS’s Trophy HV solution in no way indicates that Trophy VPS has completed, or does not need to complete, characterization testing on the Bradley.  Id. at 27 (citing AR, Tab 27, USG Response to DRS Capability Statement, at 2). 

Additionally, with regard to the protester’s internally-funded, contractor-run testing effort, the agency explains that this testing also fails to meet its needs for a variety of reasons.  In this regard, the agency states that DRS’s internal testing failed to meet requirements that would allow the agency to accept contractor test data.  COS/MOL at 23.  The agency explains that to accept contractor-run testing, the government needs to:  (1) have prior knowledge of all tests planned and system configurations; (2) have unfettered access to the test site; (3) witness all testing, including pre-shot configuration review, test asset configuration, test execution visibility, post-shot assessment of the system, and any data collected during the shot; and (4) receive a comprehensive final report detailing the setup and outcome for all events.  Id. 

The agency asserts, and the protester does not challenge, that none of these requirements were met with DRS’s internal testing.  Id.  Additionally, the agency clarifies that the Bradley chassis that DRS used for its internal testing is not representative of the Bradley family of vehicles and, therefore, cannot be considered a reliable basis for comparison.  Id.  Further, based on the declarations of Army personnel who attended the testing, the agency makes clear that the placement and installation of the Trophy VPS system resulted in unacceptable restrictions, obstructions, or modifications to the Bradley that not only degraded vehicle survivability, but also appeared to be “detrimental to soldier survivability.”  Id. at 23-25, citing Tabs 21-24 Declarations of ExAPS Project Manager and Chief Engineer; Engineering Branch Chief for Survivability; Deputy Product Manager Vehicle Protection Systems (VPS); and Product Manager VPS, respectively.  The agency also notes that none of the threats were shot directly at the vehicle, and that without shooting directly at the vehicle, there is no way to show if there was residual impact.  Id. at 24.

Similarly, for the live-fire demonstration for the Stryker program, the agency explains that the scope of the referenced demonstration was not designed to be representative of government-run characterization testing.  Id. at 26.  Additionally, the agency states that “[t]he Stryker is a materially different vehicle than the Bradley, and the configuration used [in testing for the Stryker] is not representative of the Trophy [VPS] configuration for [the] Bradley.”  Finally, the agency further explains that after this protest was filed, it considered DRS’s capability statement and determined, for the same reasons stated above, that DRS cannot meet the agency’s requirement.  Id. at 28, citing AR, Tab 27, Army Response to DRS Capability Statement, at 1-2. 

Based on the record before us, DRS has not shown that the agency acted unreasonably in concluding that DRS cannot meet the agency’s needs.  In this regard, the record shows that DRS’s various testing occurred on systems or vehicles that were materially different and configured differently from the Bradley.  Moreover, considering that the Trophy VPS as currently configured was found potentially “detrimental to soldier survivability” without actually receiving a threat shot directly at the vehicle, we fail to see how DRS’s proposed solution could meet the agency’s needs and be ready for production without unnecessary delay.  Accordingly, we have no basis to conclude that the Army’s rationale for the sole-source award is unreasonable.

Qualification Requirement and Advance Planning

DRS also asserts that the Army improperly imposed a qualification requirement here without complying with applicable statutory and regulatory requirements (citing 10 U.S.C. § 2319(b) and FAR § 9.202).[15]  Specifically, DRS contends that the record is replete with references indicating that the agency’s sole-source justification hinges on the agency’s belief that government-run characterization testing is a prerequisite for award.  Comments and Supp. Protest at 4.  In this regard, DRS asserts that the agency failed to engage in advance planning because it focused on characterizing only General Dynamics’ APS solution for the Bradley, despite knowing of Trophy VPS since March 2016, and denied DRS the opportunity to qualify its APS solution through government-run characterization testing.  Supp. Comments at 5, 12. 

The agency states that 10 U.S.C. § 2319 is inapplicable here because the record shows that the agency never limited the competition to approved sources or required qualification before award.  Supp. COS/MOL at 28.  In this regard, the agency clarifies that characterization testing is required before fielding,not award, and that in any competitive procurement, characterization testing would be applicable to an offeror after award.  Id.  The agency additionally explains that it engaged in advance planning through a multiple-year testing and evaluation effort and that it continued to research the entire marketplace throughout the procurement process.  Id. at 30.  Further, the agency asserts that, as stated in the J&A, General Dynamics demonstrated in 2016 that its APS solution was a mature solution suitable for testing.[16]  Id.  The agency also states that in March 2016, July 2018, and June 2019, the agency considered DRS’s request to consider Trophy VPS for the Bradley and, based on the information DRS provided, concluded that its solution was immature and not suitable for the Bradley.[17]  Id. at 31, citing  AR, Tabs 11 and 25, White Paper on Trophy VPS versus Trophy HV, July 2018 and June 2019, respectively.

The Competition in Contracting Act of 1984 (CICA) requires that an agency obtain full and open competition in its procurements through the use of competitive procedures.  10 U.S.C. § 2304(a)(1)(A).  When a contracting agency restricts the award of a contract to an approved product or source, and uses a qualification requirement, it must give other offerors a reasonable opportunity to qualify.  Advanced Seal Tech., Inc., B-250199, Jan. 5, 1993, 93-1 CPD ¶ 9 at 3.  Failure to act upon a potential offeror’s request for approval within a reasonable period of time deprives the requester of an opportunity to compete and is inconsistent with CICA’s mandate that agencies obtain full and open competition through the use of competitive procedures.  RBC Bearings Inc., B-401661, B-401661.2, Oct. 27, 2009, 2009 CPD ¶ 207 at 6.

DRS’s assertions--that characterization testing is a pre-award qualification requirement and the lack of such testing is the reason the agency considers its APS solution immature--are not supported by the record.[18]  Instead, the record shows that before any characterization testing occurred, the agency did not view Trophy VPS as a viable solution for the Bradley, while General Dynamics’ solution was mature enough for testing.  See J&A at 4; COS/MOL at 31.  In our view, the lack of a viable configuration of the Trophy VPS system, rather than any alleged pre-award qualification requirement or failure to adequately plan, is the reason the agency proceeded with General Dynamics’ APS solution.  Additionally, even if the rationale in the J&A is based on General Dynamics having completed government-run characterization, a contracting agency’s responsibility for determining its actual needs includes determining the type and amount of testing necessary to ensure both product compliance with the specifications and that a particular product will meet the government’s stated needs.  Gichner Sys. Grp., Inc., B-414392, May 31, 2017, 2017 CPD ¶ 178 at 6.  We will not object to such a determination where it is reasonable.  Id.[19]  Considering the engineering, design, performance, and safety issues that an APS solution must demonstrate before it can be fielded, we find the requirement for characterization testing and the manner in which it is being imposed, to be reasonable here.

In sum, DRS has not demonstrated that the Army’s decision to issue a sole-source contract to General Dynamics is unreasonable.

The protest is denied.

Thomas H. Armstrong
General Counsel

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