B-298327, Praxair Inc., August 24, 2006

B-298327 Aug 24, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Praxair, Inc. protests the terms of request for proposals (RFP) No. NNL06153354R, issued by the National Aeronautics and Space Administration (NASA), Langley Research Center (LaRC), Hampton, Virginia, for building a government-owned, contractor-operated liquid nitrogen (LN2) plant. Praxair contends that NASA's decision to only solicit proposals for building a government-owned, contractor operated facility to produce LN2, instead of also considering proposals for purchasing LN2 from commercial sources, unduly restricts competition. We deny the protest. View Decision B-298327, Praxair Inc., August 24, 2006 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Praxair Inc. File: B-298327 Date: August 24, 2006 Mark D. Colley, Esq., and David J. Craig, Esq., Holland & Knight LLP, for the protester. Robert J. Symon, Esq., and Douglas L. Patin, Esq., Bradley Arant Rose & White LLP, for Air Products and Chemicals, Inc., an intervenor. Vincent A. Salgado, Esq., and Michael I. Mark, 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 Protest by agency's current supplier of liquid nitrogen (LN2) that agency's solicitation requesting proposals to construct a government-owned, contractor-operated plant to meet the agency's LN2 requirements without considering as part of the procurement proposals for continuing to obtain LN2 from the supplier or purchasing the supplier's facility, is denied, where the record establishes that the agency reasonably concluded that building a government source of LN2 was necessary to meet its minimum needs. DECISION Praxair, Inc. protests the terms of request for proposals (RFP) No. NNL06153354R, issued by the National Aeronautics and Space Administration (NASA), LangleyResearchCenter (LaRC), Hampton, Virginia, for building a government-owned, contractor-operated liquid nitrogen (LN2) plant. Praxair contends that NASA's decision to only solicit proposals for building a government-owned, contractor operated facility to produce LN2, instead of also considering proposals for purchasing LN2 from commercial sources, unduly restricts competition. We deny the protest. This RFP, issued May 3, 2006, is NASA's second effort to solicit proposals to build a government-owned, contractor-operated facility to produce an independent source of LN2 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 LN2 to test transonic aerodynamic flow. It is the only cryogenic wind tunnel in the United States and is utilized by NASA, the Department of Defense, and the aerodynamics industry to conduct aerodynamic research on scale model aircraft designs. Since 1984, to support the NTF's mission, NASA has acquired LN2 via a pipeline from Praxair (and its predecessors), which operates an LN2 plant near LaRC, under a sole'source requirements contract. The NTF requires large quantities of LN2 over short periods in order to obtain high-fidelity data, but there are long stretches of time where no LN2 is needed, because the actual tests using large quantities of LN2 at the NTF are intermittent. Because of this, NASA has paid a premium to Praxair for LN2 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 LN2, NASA determined that it could potentially reduce its cost for LN2 to [DELETED] 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 LN2. See Kenco Ass'n, Inc.; Air Prod. and Chem., Inc., B-297503, B-297503.2, Jan. 25, 2006, 2006 CPD para. 24 at 2. NASA issued an RFP to construct a government-owned, contractor-operated LN2 production facility in September 2005. However, based on numerous internal communications as well as discussions with Congressional representatives, NASA canceled the first RFP in October 2005 because of concerns regarding the feasibility of the project, and to consider and to resolve questions regarding its LN2 requirements that were not considered at the time the agency issued the RFP.[2] The current RFP was issued after NASA undertook further study to determine the feasibility and scope of this project. This RFP solicited fixed-price proposals for constructing an LN2 plant on government-provided land near LaRC.