HEROS, Inc., B-292043, June 9, 2003

B-292043 Jun 09, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest is sustained where solicitation to overhaul helicopter engines contemplates less than full and open competition. The agency has concluded that the successor-in-interest to the original equipment manufacturer of the engine is the only entity that possesses adequate information to successfully overhaul the engine. Which is unknown to the Army. That is necessary to successfully overhaul the T63-A-720 engine. We further found that the agency's conclusion that only RRC possessed the information necessary to overhaul the T63-A-720 engines was not reasonably supported. In the event an AMC is the successful offeror. RRC will provide that AMC with RRC's "secret" information. That is. View Decision HEROS, Inc., B-292043, June 9, 2003 * REDACTED DECISION DIGEST Attorneys DECISION HEROS, Inc. protests the Department of the Army's limitation on competition in connection with request for proposals (RFP) No. DAAH23-02-R-0566 to overhaul T63-A-720 turbine engines for use in OH-58A/C "Kiowa" helicopters. Specifically, the RFP limits the field of offerors to Rolls Royce Corporation (RRC) and RRC's authorized maintenance centers (AMCs). HEROS maintains that the Army's exclusion of all other offerors unduly restricts competition in violation of the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. Sec. 2304 (2000). We sustain the protest. BACKGROUND On January 10, 2003, the Army published the RFP at issue here, seeking proposals to overhaul a quantity of up to 300 T63-A-720 engines. Agency Report, Tab B, RFP, at 6. The agency maintains that RRC, and only RRC, possesses certain information--which is unknown to the Army--that is necessary to successfully overhaul the T63-A-720 engine. Previously, based on this same premise, the Army published a notice in the Commerce Business Daily, dated January 13, 2001, disclosing an intent to award a sole-source contract to RRC for the requirements at issue here. Sabreliner Corporation protested that proposed award; our Office sustained Sabreliner's protest. See Sabreliner Corp., B-288030, B-288030.2, Sept. 13, 2001, 2001 CPD Para. 170. Among other things, we found that the Army's documents purporting to support the sole-source award "contain so many inconsistencies and inaccuracies that they cannot reasonably justify the agency's intended sole-source contract," id. at 5; we also noted that, although the agency's procurement officials knew of the inaccuracies, they made no effort to correct them. Id. at 7. We further found that the agency's conclusion that only RRC possessed the information necessary to overhaul the T63-A-720 engines was not reasonably supported. Id. at 10-11. Finally, based on the "specific and detailed testimony of Army representatives" that the Army could develop data sufficient to compete the overhauled services within 8 to 10 months "at the outside," we recommended, subject to certain determinations by the Army, that it develop the data necessary and competitively procure the overhaul services. /1/ Id. at 11, 12; Sabreliner Hearing Transcript (Aug. 16, 2001) at 23, 32, 145-46, 150-51, 157, 200-01. Subsequent to issuance of our Sabreliner decision, the Army published the solicitation at issue here, expanding the field of competition to include RRC's AMCs. /2/ The agency states that, in the event an AMC is the successful offeror, RRC will provide that AMC with RRC's "secret" information--that is, information that RRC asserts it possesses and which cannot be otherwise obtained--thereby enabling the AMC to perform the required overhauls. /3/ However, in the event an AMC is selected for award, the Army will be required to pay RRC a royalty fee of $14,361 per engine. /4/ Agency Report, Tab P-3, at 1. Further, under the Army's agreement with RRC, this fee will similarly be paid for "all future T63 overhauls performed pursuant to future contracts awarded by the Army." /5/ Id. In summary, the Army maintains that it "is legally prevented from providing full and open competition" for the engine overhauls because "[RRC] has required that [the Army] only disclose [RRC's] proprietary T63 overhaul data to [an] AMC." Agency Report, Legal Memorandum, at 2. Although this Army statement suggests that the Army will receive RRC's "secret" information, the record is to the contrary and indicates that RRC intends to provide only a successful AMC with whatever, undefined, information is necessary to perform the overhauls. Agency Report, Tab F, at 1. The Army concedes that it "does not have knowledge of what [RRC] proprietary data, if any," has been or will be used in providing a successful AMC with the allegedly necessary information. /6/ Agency Report, Tab F, at 6. Indeed, it does not appear that RRC's "secret" information, if it exists, has yet been reduced to any tangible form.