Protest challenging the agency’s dismissal of several proposals from the competitive range is dismissed, where the subcontractor had no standing to bring its challenge, as the agency did not direct the prime contractors to subcontract with the protester nor negotiate subcontract terms, and where the prime contractor would be solely responsible for delivering the finished product.

Raytheon Company protested the exclusion from the competitive range of three proposals in an Air Force procurement of Joint Surveillance Target Attack Radar System recapitalization.  Raytheon argued that the exclusion of proposals that relied on Raytheon’s radar system was unreasonable, and that the agency rather than the offerors had selected Raytheon as a subcontractor.

The JSTARS includes several distinct components, including aircraft, radar subsystems, communications, and battle command and control. Prior to the instant procurement, the agency awarded sole-source contracts to Raytheon and Northrup Grumman Mission Systems to refine their radar subsystems for use in the JSTARS recapitalization effort. The solicitation here encouraged offerors to submit two proposals, each using a different radar system.

Three offerors submitted two proposals each, one using the Raytheon radar subsystem and one using the Northrup radar subsystem; Raytheon did not submit a proposal. During proposal evaluation, the agency determined that Raytheon’s radar subsystem posed an unacceptable risk of unsuccessful performance and eliminated from the competitive range the three proposals that relied on the Raytheon radar. Raytheon challenged both the evaluation of its radar as well as the elimination of the proposals form the competitive range.

Raytheon argued that the competitive range determination constituted a government selection of a subcontractor, thus bringing its protest within the GAO’s jurisdiction.  Raytheon asserted that the government established the specifications for the radar systems, evaluated the radar systems, and relied on its evaluation of the radar systems as the basis for establishing the competitive range.

The agency argued that Raytheon had no standing to protest as it had not submitted a proposal and had no direct economic interest in the procurement. The agency argued that it had not controlled the selection of Raytheon as a subcontractor and had no hand in negotiating the subcontract terms between Raytheon and the prime contractor offerors. The agency noted that the three offerors proposed different prices, contract types, and scopes using the Raytheon system. Further, nothing in the solicitation prevented offerors from evaluating Raytheon’s radar system independently before deciding whether to include it in a proposal.

GAO explained that it does not consider a subcontract to be “by” the government unless the agency handles substantially all of the procurement, leaving the prime contractor only to administer the procedural aspects of the agreement. In this case, GAO held that the agency was not intimately involved in the selection of Raytheon as a subcontractor for any of the three offerors. The offerors were “not acting as conduits for the government in the procurement of these radar systems because the radars are part of a larger system in which the prime contractor has the responsibility for integrating the radar into the larger system under the prime contract.” Further, the offerors were free to propose either or both available radar systems and were free to negotiate terms with the radar providers.  GAO found it had no basis to hear Raytheon’s challenge, and dismissed the protest.

Raytheon Company is represented by Mark D. Colley, Kara L. Daniels, Alexandra L. Barbee-Garrett, and Amanda J. Sherwood of Arnold & Porter Kaye Scholer LLP. The government is represented by Colonel C. Taylor Smith, Sarah L. Stanton, Lieutenant Colonel Kevin P. Stiens, and Alexis J. Bernstein of the Department of the Air Force. GAO attorneys Paula J. Haurilesko and Laura Eyester participated in the preparation of the decision.