B-297503; B-297503.2, Kenco Associates, Inc.; Air Product and Chemicals, Inc., January 25, 2006

B-297503; B-297503.2, Kenco Associates, Inc.; Air Product and Chemicals, Inc., January 25, 2006 TITLE: B-297503; B-297503.2, Kenco Associates, Inc.; Air Product and Chemicals, Inc., January 25, 2006 BNUMBER: B-297503; B-297503.2 DATE: January 25, 2006 *********************************************************************************************** B-297503; B-297503.2, Kenco Associates, Inc.; Air Product and Chemicals, Inc., January 25, 2006 Decision Matter of: Kenco Associates, Inc.; Air Product and Chemicals, Inc. File: B-297503; B-297503.2 Date: January 25, 2006 Gregory L. Monge, Esq., VanAntwerp, Monge, Jones & Edwards, LLP, for Kenco Associates, Inc., and Robert J. Symon, Esq., Bradley Arant Rose & White LLP, for Air Products and Chemicals, Inc., the protesters. Vincent A. Salgado, Esq., National Aeronautics & Space Administration, for the agency. Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Cancellation of solicitation minutes prior to the scheduled time for receipt of proposals was reasonable where the agency, as a result of inquiries from members of Congress, reasonably determined that it needed to further review its mission requirements before proceeding with the procurement. DECISION Kenco Associates, Inc. and Air Products and Chemicals, Inc. protest the cancellation of request for proposals (RFP) No. NNL05111032R, issued by the National Aeronautics and Space Administration (NASA), Langley Research Center (LaRC), Hampton, Virginia, for building a government-owned, contractor-operated liquid nitrogen (LN[2]) plant. We deny the protests. NASA issued this RFP on September 2, 2005 to solicit proposals to build a government-owned, contractor-operated facility to produce an independent source of LN[2 ]for the National Transonic Facility (NTF) operated by LaRC. The NTF is a closed circuit, fan driven, pressurized wind tunnel operated by LaRC that utilizes LN[2] to test transonic aerodynamic flow. It is the only cryogenic wind tunnel in the United States and is utilized by the Department of Defense and the aeronautics industry to conduct aerodynamic research on scale model aircraft designs. See RFP, Statement of Work para. 1.1. Since 1984, to support the NTF's mission, NASA has acquired LN[2] via a pipeline from Praxair, Inc., a private supplier that operates an LN[2] plant near LaRC, under a sole-source requirements contract. The NTF requires large quantities of LN[2] over short periods, but there are long stretches where no LN[2 ]is needed, because the actual tests using large quantities of LN[2] at the NTF are intermittent. Because of this, NASA has paid a premium to Praxair for LN[2] to support the NTF. Specifically, the current contract with Praxair costs NASA a weighted average price of $81 per ton (down from the previous contract price of $112 per ton).[1] After undertaking various studies to determine the feasibility of creating its own source of LN[2], NASA determined that it could potentially reduce its cost for LN[2] to $40 per ton, and make its testing more affordable and available to a wider range of customers, if it built and operated its own source of LN[2]. This RFP resulted from those studies culminating in an acquisition strategy meeting in May 2005. See Agency Memorandum of Law at 2-3. The RFP required the contractor to build and operate an LN[2] plant at LaRC under a fixed-price contract that was divided between a base period and an option period. The base period work consisted of engineering, design, manufacturing, testing and delivery of equipment, and the option period consisted of site work, training, commissioning, and demonstration of the LN[2] plant's performance. RFP, Statement of Work para. 1.2.2. After various amendments to the RFP, the closing time for receipt of proposals was set for 4 p.m. on October 14. Immediately after issuing the RFP, NASA began receiving inquiries from various Congressional members from Virginia questioning the propriety and feasibility of NASA devoting resources to build a government-owned LN[2] facility.[2] The concerns expressed included that NASA "may be . . .wast[ing] taxpayers' dollars" for an unnecessary facility and that NASA may be violating the policy of the President and of Office of Management Budget Circular No. A-76 "to rely on the private sector for commercially available products." See Agency Report, Tab 22. In view of these concerns, NASA had numerous internal communications as well discussions with Congressional representatives, which ultimately led the agency to cancel the RFP on October 14.