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B-265884 1 (1995-11-07)

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(3     O        United States
    GAQ         General Accounting Office
                Washington, D.C. 20548

                Office of the General Counsel



                B-265884


                November 7, 1995


                The Honorable Dan Burton
                House of Representatives

                Dear Mr. Burton:

                This responds to your August 4, 1995, letter requesting that our Office review the
                Army's planned procurement of metal parts for M-795 high fragmentation artillery
                projectiles. On July 20, 1995, the Deputy Assistant Secretary of the Army for
                Procurement signed a Justification and Approval (J&A) to authorize limited
                competition for this procurement. The J&A establishes a mobilization base for the
                item consisting of two government-owned, contractor-operated Army ammunition
                plants, the Scranton and Louisiana Army Ammunition Plants (SAAP and LAAP,
                respectively).

                You ask several specific questions about the validity of the J&A prepared in this
                case. First, you ask whether the Army violated the Competition in Contracting Act
                of.1984 (CICA). You also ask about the accuracy of the J&A's reference to a prior
                contract for M-795 metal parts, and whether incorrect information about a prior
                procurement would invalidate the J&A. Finally, you request additional information
                on procurement of high fragmentation projectiles and ask whether costs are
                affected by restricted competition in artillery projectile procurements.

                CICA permits restricted competition when supported by a properly prepared J&A.
                We note that the Army's J&A includes extensive discussion of the need to prove
                out the new and vital flex-line manufacturing process, but does not discuss
                mobilization concerns in the same depth. As a result, it is not clear from the J&A
                as written that it fully documents the need for a mobilization base. Your staff has
                advised us that your constituent, ERI Babcock & Wilcox, Inc. of Indianapolis (ERI),
                intends to file a bid protest contesting the Army's mobilization base determination.
                Receipt of a timely bid protest will permit us to exercise our statutory function to
                gather all information and render a decision on the validity of the Army's
                justification for excluding ERI.

                In response to your second question, SAAP apparently produced a small quantity of

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