Systecon North America (B-423175; B-423175.3; B-423175.4)

You should not care.

Category: Foreign ownership, sole-source procurement

Date: 24 February 2025

URL: https://www.gao.gov/products/b-423175%2Cb-423175.3%2Cb-423175.4

Systecon North America protested the US Army Materiel Command’s award of a $435 million sole-source contract to Repkon USA Defense LLC for the design, construction, and commissioning of a domestic trinitrotoluene (TNT) production facility. Systecon challenged the Army’s decision to exclude it from consideration, arguing that the agency improperly determined that it lacked a viable and proven technology.

Army used a temporary acquisition authority to justify the sole-source award under a public interest exemption. It found that Systecon’s proposed teammate, which was essential to its technology, was owned by a Chinese company. The Army determined this presented a national security risk and eliminated Systecon from consideration. GAO upheld the decision, finding that the agency had a reasonable basis for its determination and that Systecon failed to rebut the Army’s security concerns, a reminder that offerors should validate their supply chains and teaming partners do not raise foreign ownership risks that could lead to exclusion from defense procurements.

Protest denied; GAO found Army’s determination reasonable and that Systecon did not demonstrate material errors in the agency’s decision-making.

Digest

Protest challenging the agency’s award of a sole-source contract to another firm pursuant to temporary acquisition authority is denied where the record demonstrates the agency had a reasonable basis for concluding the protester was not a capable source.