Chromalloy San Diego Corporation

B-416990.2 Jun 03, 2019 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Chromalloy San Diego Corporation, of San Diego, California, protests the provisions of request for proposals (RFP) No. N64498-18-R-4023, issued by the Department of the Navy, to perform depot-level overhaul of LM2500 turbine gas generators. Specifically, Chromalloy challenges, as overly restrictive, the solicitation's requirements that an offeror have access to the original equipment manufacturer's (OEM) technical data and OEM tooling. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. The entire decision decision has now been approved for public release. Decision Matter of:  Chromalloy San Diego Corporation File:  B-416990.2 Date:  June 3, 2019 William M. Weisberg, Esq., Law Offices of William Weisberg PLLC, for the protester. Howard B. Rein, Esq., Paul  C. Scheck, Esq., and Kerry G. Hotopp, Esq., Department of the Navy, for the agency. Glenn G. Wolcott, Esq., April Y. Shields, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST In solicitation for depot-level overhaul of turbine generators used to power certain Navy ships, agency reasonably required offerors to have access to the original equipment manufacturer’s (OEM) technical data and to OEM tooling. DECISION Chromalloy San Diego Corporation, of San Diego, California, protests the provisions of request for proposals (RFP) No. N64498-18-R-4023, issued by the Department of the Navy, to perform depot-level overhaul of LM2500 turbine gas generators.[1] Specifically, Chromalloy challenges, as overly restrictive, the solicitation’s requirements that an offeror have access to the original equipment manufacturer’s (OEM) technical data and OEM tooling. We deny the protest. BACKGROUND The record establishes that the LM2500 generator was developed as a commercial item by the General Electric Company (GE) approximately 40 years ago,and that the development and manufacture of those generators was funded entirely by GE.[2]  Hearing Transcript (Tr.) at 9-11.[3]  Since then, the engines have been purchased by various customers, including the U.S. Navy.[4] In connection with its development and manufacture of the LM2500, GE created a manual containing the technical data necessary for overhauling the LM2500, which it updates periodically.  GE considers the information in the manual, and the manual updates, to be proprietary and marks the documents as such.  Specifically, the cover of the manual states:  The information contained in this document is GE proprietary information and is disclosed in confidence.  It is the property of GE and shall not be used, disclosed to others, or reproduced without the express written consent of GE, including, but without limitation, it is not to be used in the creation, manufacture, development, or derivation of any repairs, modifications, spare parts, designs, or configuration changes . . . . All technical documentation and information contained herein have been developed and approved for use with GE engines and parts that have been operated and maintained in accordance with GE technical documentation and recommendations.  GE has no . . . obligation for non-GE approved parts and repairs. . . . This document contains trade secrets and confidential commercial or financial information. . . . Agency’s Post-Hearing Comments, Apr. 30, 2019, encl. 1 at 1.  In this context, GE divides the maintenance, repair, and overhaul of the LM2500 into various categories or “levels.”  Level I refers to routine maintenance performed aboard ship by Navy personnel; levels II and III refer to more complicated repairs; and level IV refers to complete overhaul--that is, “disassembly, repair of components . . . rebuild and test.”  Tr. at 13.  Level IV repairs that are performed by a commercial entity must be performed at a depot that holds a GE level IV license.  There are currently 6 depots worldwide that hold GE level IV licenses; Chromalloy is not a level IV licensee. On August 28, 2018, the agency issued RFP No. N64498-18-R-4023, seeking proposals for the “commercial depot-level overhaul” of a quantity of LM2500 generators.  AR, encl. 1, RFP at 3.  The solicitation contemplates multiple awards of indefinite-delivery, indefinite-quantity (IDIQ) contracts, under which subsequent task orders will be issued during a five-year ordering period, and provides that awards will be made to all offerors that are found to be technically acceptable.  As initially issued, the solicitation provided that, to be technically acceptable, an offeror must hold a GE level IV license.  Id.