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NACF LTV Award Protest

Upon announcement of the Navy's se]ection, LTV filed a protest with the GAO, claiming that the Navy's selection was illegal, contrary to public policy, and not in accordance with the established selection criteria. LTV argued that the Navy selection of the F-18 violated the 1975 fiscal year DOT) Appropriation Act since the F-18 is not a "derivative" of the F-16 and not common with it, requirements which LTV believes were contemplated by the act. Also, LTV contended that at the very least the selection of the F-18 must be deemed void as against public policy since the selection was contrary to the language of the Conference Report which led to the passage of the act. With respect to the competition itself, LTV contended that MDC and LATV were not properly evaluated in the areas of commonality, engines, and cost, and that the competition itself was unduly restrictive. The relief sought by LTV was initiation of a new competition by the Navy.

The Navy denied all of LTV's allegations. It was the Navy's position that selection of the F-18 complied with both the letter and spirit of the 1975 DOD Appropriation Act, that both LTV and MDC were evaluated fairly and on the same basis, and that the F-18 is the best design for the Navy's requirements.

The Navy utilized formal source selection procedures in evaluating proposals snbmitted by MDC and LTV and selecting a winner. For evaluation purposes, the RFQ/RFP established the equally weighted factors of performaiice and cost as the most important criteria. Coninionality was the third most important factor. Other factors included reliability and maintainability, logistics support, development risk, Lot I cost, DT&E program, management, and facilities and resources.

Rejection of the three LTV designs was based on unsatisfactory ratings in the performance area, particularly combat performance and overall carrier suitability. Although LTV did not concede the nonsuitability of its designs, it did not argue, in the ccntext of this protest, that the Navy should have regarded one or more of its designs as acceptable. Rather, LTV argued that the competition was not fairly conducted and that it was prejudiced as a result. It also asserted that there came a point in the evaluation when the Navy was obliged by both statute and regnlation to terminate the competition rather than award a contract to a firm offering an NACF design other than a derivative of the F-16.

LTV objected to the evaluation of proposals on several grounds. It argued that the LTV and MDC submissions were not evaluated on an equal basis and that MDC and LTV were not accorded equal treatment during the competition. The primary basis for LTV's argument was its belief that it was penalized by the Navy for complying with the applicable evaluation criteria while MDC was permitted to deviate from those criteria. LTV also questioned whether its cost proposal was evaluated against the solicitatiomi's criteria and in the same manner as the MDC cost proposal. Finally, LTV asserts that the Navy's conduct of this procurement resulted in a violation of the Armed Services Procurement Act, 10 U.S. Code 2304(g) (1970) and section 3-101 of the Armed Services Procurement Regulation because the Navy improperly restricted competition.

LTV's assertions, as they relate to its technical proposal, essentially revolved around the RFQ/RF1 evaluation criterion concerning "commonality" and a listing of equipment in the RFQ that included certain aircraft engines. LTV claimed that the commonality criterion referred to commonality with the F-16 and required that the NACF be a derivative of the F-16. LTV stated that it complied with this requirement but MDC did not. The thrust of LTV's position was twofold. First, LTV stated that its proposal was regarded as unsuitable by the Navy precisely because it complied with the evaluation criteria and offered designs that incorporated F-16 derivative features (LTV identified two of these features as automatic angle of attack limiter and fly by wire control system). With regard to the engines, LTV believed that the RFQ listed four engines as acceptable and that the Navy did not properly evaluate the MDC design which proposed the use of a nonlisted engine.

In considering this protest, GAO examined the submissions from the Navy, LTV, and MI)C. Also, in view of the technical and cost arguments made in this case, GAO conducted an audit investigation. In addition, GAO considered the views expressed in two reports issued by the Library of Congress which delt with some of the points raised by the protester. It was GAO's considered opinion that the Navy's actions were not contrary to statute or public policy and that the selection was fair and impartial and in accordance with the established selection criteria. Accordingly, the protest was denied.

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