PTC Inc.

B-416863 Dec 20, 2018 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights PTC, Inc., of Needham, Massachusetts, challenges a notice of intent to award a sole-source contract to Siemens Government Technologies, Inc., of Arlington, Virginia, issued by the Department of the Air Force for product lifecycle management (PLM) software. The protester alleges that the agency's justification and approval (J&A) supporting the proposed sole-source contract is not consistent with the cited regulatory authority, and is based on a flawed cost analysis. We deny the protest. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This version has been approved for public release. Decision Matter of: PTC Inc. File: B-416863 Date: December 20, 2018 Andrew E. Shipley, Esq., and Phillip E. Beshara, Esq., Wilmer, Cutler, Pickering, Hale, and Dorr, LLP, for the protester. Jeffery M. Chiow, Esq., Stephen L. Bacon, Esq., Lucas T. Hanback, Esq., and Robert S. Metzger, Esq., Rogers, Joseph, O'Donnell, PC, for Siemens Government Technologies, Inc., the intervenor. Alexis J. Bernstein, Esq., and Heather M. Mandelkehr, Esq., Department of the Air Force, for the agency. Michael Willems, Esq., and Edward Goldstein, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Proposed award of a sole-source contract for software license reactivation to the original software developer is unobjectionable where the agency reasonably determined that its large existing inventory of licenses for older versions of the software could be reactivated and standardized to a single version at a significantly lower cost than purchasing new licenses for other similar software, and where the record reflects that this cost differential was not likely to be recovered through competition. DECISION PTC, Inc., of Needham, Massachusetts, challenges a notice of intent to award a sole-source contract to Siemens Government Technologies, Inc., of Arlington, Virginia, issued by the Department of the Air Force for product lifecycle management (PLM) software. The protester alleges that the agency's justification and approval (J&A) supporting the proposed sole-source contract is not consistent with the cited regulatory authority, and is based on a flawed cost analysis. We deny the protest. BACKGROUND PLM software is commercial, off-the-shelf (COTS) software designed to allow users to manage engineering, manufacturing, and design information about products, throughout the process of designing, manufacturing, using, and ultimately disposing of the product (called the "lifecycle" of a product). Agency Report (AR), Tab 2, Contracting Officer's Statement of Facts (COSF) at 2. For example, PLM software could be used to compare an existing landing gear material's life expectancy and strength to new landing gear materials, and then analyze the differences to make an informed decision about the downstream effects of a possible change in materials. Id. There are a number of vendors offering COTS PLM software suites, including Siemens's PLM offering "Teamcenter" and PTC's PLM offering "Windchill." AR, Tab 4, Market Research Report 2014, at 18-19. The Air Force began investigating PLM predecessor products1 in 2000. AR, Tab 1, Memorandum of Law (MOL) at 2. Between 2000 and 2011 the Air Force purchased a significant number of software licenses for PLM software or PLM predecessor software under various contracts.2 Id. In 2014, the Air Force initiated an effort to acquire or develop a standardized enterprise-wide PLM solution and conducted market research concerning available PLM options. AR, Tab 4, Market Research Report 2014. In January of 2015, the Air Force estimated that the total cost of purchasing all new software licenses and deploying a standardized PLM solution would be approximately $324 million. COSF at 4-5. Due to concerns about the affordability of such a solution, senior Air Force acquisition management encouraged the PLM program management team to investigate alternative methods of acquisition. MOL at 3. The PLM team identified two potential alternative strategies that would reuse software licenses already owned by the Department of Defense at a lower projected cost. Specifically, the PLM team proposed that: (1) the Air Force could reuse a significant number of Teamcenter licenses which it already owned and which were, in some cases, already in use; or (2) it could attempt to reuse a number of PTC Windchill licenses, which the Department of the Army owned. MOL at 3-4. The agency performed a cost, schedule, and risk assessment of the two systems, ultimately recommending that the Air Force attempt to reuse its existing Teamcenter licenses. AR, Tab 11, Materiel Solution Implementation Plan (Build Zero).