Justification for Sole-Source Awards to Spectral Dynamics

The Naval Sea Systems Command's procurement, on a sole-source basis, of a communication system from the Spectral Dynamics Corporation of San Diego, California, was questioned.

The communication system has proven to be very reliable and useful and has exceeded its required mean-time between failures by 150 percent. The contractor met or exceeded delivery dates and has been cooperative in correcting any problems, generally without cost to the government. The sole-source procurement was justified on the basis of public exigency because need arose for increasing fleet-readiness capability, and the contractor could deliver the system within 6 or 7 months at a reasonable price. Allegations were made that communications equipment failed because of prolonged storage in Guam by the Navy and that there were latent design defects in a rate-of-flow indicators. The communications equipment was stored for about 4 months in Guam, and analysis disclosed that the equipment failures may have been due to electrostatic conditions caused by a typhoon while the units were stored in a metal warehouse. There was no evidence to support the allegation that prolonged storage contributed to the equipment failure. With regard to the allegation that the contractor did not use parts meeting military specifications, the contractor used standard commercial parts not necessarily meeting military specifications. The Air Force advised that Spectral Dynamics indicators met all performance test standards and were the highest quality indicators procured.