B-400088; B-400089, Advanced Seal Technology, Inc., July 14, 2008

B-400088; B-400089, Advanced Seal Technology, Inc., July 14, 2008 TITLE: B-400088; B-400089, Advanced Seal Technology, Inc., July 14, 2008 BNUMBER: B-400088; B-400089 DATE: July 14, 2008 ***************************************************************** B-400088; B-400089, Advanced Seal Technology, Inc., July 14, 2008 Decision Matter of: Advanced Seal Technology, Inc. File: B-400088; B-400089 Date: July 14, 2008 Thomas C. Doepker for the protester. Richard Ferguson, Esq., Defense Logistics Agency, for the agency. Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protests challenging agency's decision to proceed with procurements for an item requiring source approval on the basis that the protester was deprived of a reasonable opportunity to requalify its alternate item is denied where the protester was notified of its removal as an approved source and the reasons for the removal before the challenged solicitations were issued; contracting agency need not delay a proposed procurement while a vendor pursues qualification of its product. DECISION Advanced Seal Technology, Inc. (AST) protests the issuance of an order to another vendor under request for quotations (RFQ) No. SPM7M3-08-T-7834, and the terms of request for quotations (RFQ) No. SPM7M1-08-U-C373, issued by the Defense Logistics Agency (DLA), Defense Supply Center-Columbus (DSCC) for mechanical seals, National Stock Number (NSN) 4320-01-279-2321 (NSN 2321). We deny the protests. BACKGROUND NSN 2321 is a critical application item, thus, a designated Engineering Support Activity (ESA) is required to approve all sources.[1] DLA Instruction 3200.1. In this case, the Naval Surface Warfare Center, Carderock Division is the ESA responsible for approval. AST is a manufacturer of mechanical seals and is involved in government-sponsored efforts to reverse engineer certain items of supply, to provide competition in procurements where the original equipment manufacturers (OEM) have refused to share technical information. AST has reverse engineered an alternate item for NSN 2321, which was approved by the ESA in March 2005. In May 2007, AST filed a protest with our Office, challenging DSCC's failure to include AST on the list of approved sources in an RFQ for a smaller version of NSN 2321, NSN 4320-01-276-0822 (NSN 0822). Through that protest it became clear that DSCC had failed to properly complete a first article test of AST's alternate item for NSN 0822 during a prior procurement. Therefore, in settlement of that protest, DSCC agreed to suspend procurement of NSN 0822 until AST's alternate item was subjected to an installation test. According to the agency, in June 2007, during the effort to installation test AST's alternate item for NSN 0822, the ESA's pump shop did not have a pump requiring an NSN 0822 seal but did have a pump requiring an NSN 2321 seal, and had AST's alternate item for NSN 2321 on hand. As the NSN 0822 and NSN 2321 seals were nearly identical, the ESA attempted to install an NSN 2321 seal as a preliminary evaluation of AST's NSN 0822 design. Agency Report (AR), Tab 4, ESA Email, June 13, 2007; Tab 6, DSCC Email, July 12, 2007. The agency states that, when the AST NSN 2321 seal was installed in the appropriate pump, it interfered with the pump casing and was found to have been machined too large. AR, Tab 4, ESA Email, June 13, 2007. When compared to the OEM seal, there were visible differences. Id. Also, in early October, DSCC received a Product Quality Deficiency Report (PQDR) for two NSN 2321 seals supplied by AST. AR, Tab 5, PDQR. The PQDR indicated that the AST seals were of an incorrect shape and could not be utilized for their intended purpose. Id. On the basis of the PDQR and the ESA pump shop's problems installing the NSN 2321 seal, DSCC made the decision to remove AST from the list of approved sources of NSN 2321 on December 18. AR, Contracting Officer's Report, at 2; Tab 6, DSCC Email, May 8, 2008. Unfortunately, DSCC failed to inform AST that its approval had been revoked at that time. According to AST, it did not become aware that there were any problems with its alternate item for NSN 2321 until January 17, 2008, when DSCC issued an RFQ for NSN 2321 and an agency employee contacted AST to explain that AST was not listed as an approved source. Protest at 2. DSCC believes that AST learned that it had been removed as an approved source at an earlier date, as evidenced by AST's submission of a revised Source Approval Request on January 8.