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MIL-COM ELECS. CORP. v. ALDRIDGE

May 5, 1989

MIL-COM ELECTRONICS CORPORATION, Plaintiff,
v.
EDWARD C. ALDRIDGE, JR., Secretary of the Air Force, et al., Defendants


George H. Revercomb, United States District Judge.


The opinion of the court was delivered by: REVERCOMB

GEORGE H. REVERCOMB, UNITED STATES DISTRICT JUDGE.

 This case, which was argued originally as a motion for a preliminary injunction, is now before the Court on cross-motions for summary judgment. Plaintiff Mil-Com Electronics Corporation ("Mil-Com"), a manufacturer of electronic equipment, seeks cancellation of an undefinitized contract award ("UCA") made to Northrop Electronics Corporation ("Northrop") for the procurement of Turbine Engine Monitoring Systems ("TEMS") shipsets. Plaintiff claims that the Air Force acted arbitrarily, capriciously, and contrary to law in awarding the contract to Northrop, and that it abused its discretion by issuing an undefinitized award.

 1. Factual Background

 This lawsuit grows out of the Air Force's determination that it needed TEMS units for the KC-135 aircraft. The TEMS unit monitors engine performance, tracks engine warranty data, and assists in the analysis of engine malfunctions. On August 8, 1988, the San Antonio Logistics Center issued a Request for Proposals ("RFP"), soliciting delivery of 47 TEMS shipsets with an option for 17 to follow. The RFP specified delivery of 4 units per month beginning in December, 1989, continuing through November, 1990.

 One aspect of the procurement in particular is important to the understanding of this case: the normal competitive apparatus of procurement was limited due to scheduling exigencies connected with the modification of the KC-135 under a separate, pre-existing contract with Boeing Aircraft. Delays in the installation of the TEMS shipsets in the KC-135 might result in forced groundings of the planes, which are used to support the defendant's bomber and fighter aircraft.

 The RFP listed Northrop as the only identified source capable of providing the TEMS for the KC-135, and advised other potential offerors that "offers from firms not previously identified as sources for this requirement will only be considered when it can be determined prior to award that the material or service being offered will meet the Air Force's requirement. . . ." (§ M-25).

 Mil-Com is a qualified supplier of TEMS for the A-10 aircraft, but was not qualified to supply TEMS for the KC-135 at the time the RFP was issued. In an attempt to become qualified, Mil-Com began the approval process on May 25, 1988, submitting a test unit to the Air Force. The plaintiff's TEMS unit was tested for use on the KC-135 in August, 1988. The results of the testing were negative.

 In October, after defendant had issued the RFP (with its extra-normal qualification procedure), Mil-Com produced further technical data to the Air Force; after review of these submissions, the Air Force decided that plaintiff's product could be used on the KC-135, but only upon the successful completion of "first article submission testing" before or during the initial stage of production. However, the RFP at issue in this case did not provide for first article submission testing, and therefore, defendant determined that plaintiff did not qualify for award under the RFP. Thereafter, on November 10, defendant awarded an undefinitized contract action ("UCA") to Northrop for delivery of the TEMS units.

 Plaintiff argues that the sole-source award to Northrop was in contravention of various statutes and regulations. It alleges that the contracting officer's decision with respect to plaintiff's qualification was an illegal ex post facto alteration of the terms of the RFP, since Section M-25 of the RFP limited evaluation to the technical data submitted by plaintiff in support of its offer.

 2. Standard of Review

 Judicial review of procurement actions under the Administrative Procedure Act is based on the administrative record; the ultimate award of a contract is left to agency discretion, and the courts should exercise restraint in reviewing such decisions. The D.C. Circuit has held that procurements should be left undisturbed unless the Court can find no rational basis for the agency's decision. M. Steinthal & Co. v. Seamans, 147 U.S. App. D.C. 221, 455 F.2d 1289 (D.C. Cir. 1971). Furthermore, plaintiffs seeking to have procurement contracts set aside must show, in addition to a lack of rational basis, a clear and prejudicial violation of applicable statutes or regulations. Kentron Hawaii, Ltd. v. Warner, 156 U.S. App. D.C. 274, 480 F.2d 1166, 1169 (D.C. Cir. 1973).

 3. Discussion

 Plaintiff's case depends on two issues: (1) whether defendant followed proper procedures in awarding the UCA to Northrop, and (2) whether Mil-Com was a qualified offeror of TEMS for the KC-135. As mentioned above, the normal method for testing qualification in procurement matters is first article testing, but the RFP in this case bypassed that stage due to the urgency of the requirement. Penny Andersson Decl. para. ...


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