LSL submitted a proposal but did so under CAGE code 1HFE7. DLA noted the discrepancy and asked LSL for clarification. LSL stated that both CAGE codes belong to the same facility; one belonged to the production facility and the other for administrative purposes. DLA then went ahead and awarded the contract to LSL.
The only other bidder on the contract, United Valve Company, appealed to the GAO (Government Accountability Office) on the basis that LSL was not an approved source for the parts because of the CAGE code used by LSL was not an approved source. United stated that it was "unreasonable" for DLA to conclude that the approved source and LSL were the same legal entity because each was identified by a different CAGE code (and different DUNS numbers).
GAO sustained the protest.
In our view, the record does not clearly establish that the offeror LSL is the same legal entity as the approved source or that this LSL was qualified to offer a source control item ... Moreover, (DLA) does not explain how it concluded that the entities being co-located at the same facility allowed LSL to use the approved source's CAGE code, other than (DLA's) conclusory statements that the administrative CAGE code approach was permissible.GAO recommended that DLA determine and document whether the awardee, LSL, is qualified and thereby eligible for award. If not, DLA should terminate the contract and make an award to United. GAO also recommended that United be reimbursed for its bid protest costs.
You can read the full GAO decision here.