B.H. Aircraft Company, Inc., B-295399.2, July 25, 2005

B-295399.2 Jul 25, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights B.H. Aircraft Company, Inc. (BHA), a small business, protests the consolidation of consumable parts for the F404 engine into a single performance-based logistics (PBL) supply chain management contract covering more than two thousand national stock numbers (NSN), under request for proposals (RFP) No. SP0412-05-R-0181, issued by the Defense Logistics Agency (DLA). BHA holds a current contract to supply parts that will be covered by the PBL, and seeks to compete for additional F404 parts. BHA contends that the bundling involved in the PBL contract violates the Competition in Contracting Act of 1984 (CICA) and the Small Business Act. We deny the protest. View Decision B-295399.2, B.H. Aircraft Company, Inc., July 25, 2005 Decision Matter of: B.H. Aircraft Company, Inc. File: B-295399.2 Date: July 25, 2005 Daniel V. Kearns for the protester. Michael P. Chiffolo, Esq., and Benjamin G. Perkins. Esq., Defense Logistics Agency; and John W. Klein, Esq,. and Laura Mann Eyester, Esq., Small Business Administration, for the agencies. Richard P. Rector, Esq., and Eliza P. Nagle, Esq., DLA Piper Rudnick Gray Cary US LLP, for General Electric Company, an intervenor. Paul N. Wengert, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency's bundling of requirements for spare parts for aircraft engine violated the Small Business Act and Competition in Contracting Act of 1984 is denied where agency has established measurably substantial benefit to government from consolidating spare part purchases under a single contract, and established that the single contract otherwise is necessary to meet agency needs. DECISION B.H. Aircraft Company, Inc. (BHA), a small business, protests the consolidation of consumable parts for the F404 engine into a single performance-based logistics (PBL) supply chain management contract covering more than two thousand national stock numbers (NSN), under request for proposals (RFP) No. SP0412-05-R-0181, issued by the Defense Logistics Agency (DLA). BHA holds a current contract to supply parts that will be covered by the PBL, and seeks to compete for additional F404 parts. BHA contends that the bundling involved in the PBL contract violates the Competition in Contracting Act of 1984 (CICA) and the Small Business Act. We deny the protest. As described by DLA, the procurement will allow the agency to "reunite the currently fragmented F404 consumable parts supply chain and improve support to the warfighter." DLA Post-Hearing Comments at 1. The anticipated contract with General Electric is valued at300 million. [1] There is no dispute that this procurement concerns bundling of requirements that will affect many small businesses, including the protester. [2] Specifically, the protester holds an existing contract for consumable parts that will be consolidated under the PBL contract. Protest at 5. Federal Acquisition Regulation (FAR) Section 7.107 states that "[b]undling may provide substantial benefits to the Government. However, because of the potential impact on small business participation, . . . the agency must conduct market research to determine whether bundling is necessary and justified." Under the FAR, market research may indicate that bundling is necessary and justified if an agency or the Government would derive measurably substantial benefits . As relevant here, the FAR provides that the measurably substantial benefits must be equivalent to 5 percent of the estimated contract value or7.5 million, whichever is greater. FAR Section 7.107(b)(2).