LOCKHEED MARTIN has made a protest about the award of the US Air Force's Northrop T-38 avionics-upgrade (AUP) contract to a combination McDonnell Douglas (MDC) and Israel Aircraft Industries (IAI).

The protest, which is filed with the US General Accounting Office (GAO), focuses on the USAF's inter- pretation of its "best-value" selection criteria.

The MDC/IAI team was awarded the AUP contract in late July, beating five other teams after a two-year competition. The initial $43.6 million, 36-month, contract covers engineering and manufacturing development, including two T-38 AUP flying prototypes and new aircrew-training devices. Six production options cover a maximum of 664 aircraft - 425 USAF and up to 239 other foreign-operated T-38s.

The USAF budgeted $700 million for the programme but says that the actual cost will be less. MDC says only that the programme is worth "more than $400 million". Industry sources say that Lockheed Martin, and not MDC, was the lowest bidder, offering a price of more than $100 million less than that of the winning team. One other team also undercut MDC's bid, it is believed.

Use of subjective "best-value" criteria has been criticised in previous USAF competitions. The June 1995 award of the $7 billion Joint Primary Aircraft Training System (JPATS) contract to Raytheon Aircraft attracted protests from losers Cessna and Rockwell, which claimed the criteria of "lowest price" had replaced "best value".

The GAO rejected both protests, but their effect was to delay the award of the JPATS contract until February 1996. Best value is defined as the most advantageous offer, with acquisition price, life-cycle cost, contractor's past performance and other factors all being taken into consideration.

The process involves subjective "weighting" of each proposal by the selection team.

Source: Flight International