Acme Products and Engineering, Inc. (SPE7M3-21-Q-0093)

B-419495 Apr 05, 2021 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Acme Products and Engineering Inc., a small firm of Brooklyn, New York, protests the terms of request for quotations (RFQ) No. SPE7M3-21-Q-0093, issued by the Defense Logistics Agency (DLA) for the purchase of compressor rotors. Acme argues that the solicitation unduly restricts competition, as it is limited to a single approved source. 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 redacted version has been approved for public release. Decision Matter of:  Acme Products and Engineering, Inc. File:  B-419495 Date:  April 5, 2021 John M. Manfredonia, Esq., Manfredonia Law Offices, LLC, for the protester. Julie K. Philips, Esq., John Pritchard, Esq., and Pamela K. Cooper, Esq., Defense Logistics Agency, for the agency. Katherine I. Riback, Esq., and Evan C. Williams, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protester’s contention that agency procurement for compressor rotors from a single approved source unduly limits competition is denied where the record shows that the agency is procuring the approved source item using simplified acquisition procedures and has adequately justified the use of its single approved source approach under the procedures applicable to simplified acquisitions.  DECISION   Acme Products and Engineering Inc., a small firm of Brooklyn, New York, protests the terms of request for quotations (RFQ) No. SPE7M3-21-Q-0093, issued by the Defense Logistics Agency (DLA) for the purchase of compressor rotors.  Acme argues that the solicitation unduly restricts competition, as it is limited to a single approved source. We deny the protest. BACKGROUND The agency describes the compressor rotor at issue as a component of the Gardner Denver Nash LLC Model MD-663C low pressure air compressor (LPAC).  Contracting Officer Statement and Memorandum of Law (COS/MOL) at 1.  The agency further states that the compressor rotor is a major component of the low-pressure service air systems on the United States’s submarine fleet, and is identified as a critical application item.[1]  AR, Tab 3, Decl. of Mechanical Engineer of the Compressed Air Systems branch of the Naval Surface Warfare Center, Philadelphia Division (NSWCPD) (Mech. Engineer) at 64.  Specifically, the low pressure air compressor is used on all USS Ohio (Submersible Ship Ballistic Missile Nuclear 726) Class, USS Los Angeles (Submersible Ship Nuclear (SSN) 668) Class, and USS Seawolf (SSN 21) Class submarines.  Id. at 64-65. Nash is the original equipment manufacturer (OEM), having developed its Model MD‑663C low pressure air compressor, including the rotor component identified by national stock number (NSN) 9927.[2]  Id. at 65.  The agency states that Nash maintains ownership and rights to its proprietary drawings.[3]  Id.  The agency also states that it does not own or have rights to Nash’s drawing for its Model MD-663C LPAC and its compressor rotor component, identified by part numbers 15-3140-4 and B13-3913-UGS.  Id.  As relevant here, the NSWCPD is the configuration control entity for the compressor motor, meaning that only the NSWCPD can approve sources for the compressor rotor.[4]  Id.  At issue in this protest is the agency’s determination that only one approved source is available for the acquisition of a compressor rotor that will fulfill its needs.  By way of background, the agency states that in 2005, it commenced an effort to reverse engineer the compressor rotor, identified by NSN 9927.  Id.  The agency explains that it undertook this effort to reduce the high procurement costs and reduce the long lead times that were experienced during the prior purchase of the Nash compressor rotors.  Id.  To this end, the agency developed drawings to permit full and open competition, along with a government first article test (GFAT), to ensure part compatibility with the higher-level assembly.  Id. at 2.  In November 2005, Acme submitted a prototype compressor rotor, manufactured in accordance with the agency’s drawings, which initially failed the GFAT.  Id. at 65-66.  In response, the agency changed the output specification, by reducing the requirement by 10%, from 40 standard cubic feet per minute (SCFM) to 36 SCFM.  Id. at 66.  A similar modification was made to Acme’s product, and the agency subsequently approved the Acme GFAT sample.  Id.  Acme’s compressor rotors, delivered in 2009, however, repeatedly failed to correctly function upon installation in the low pressure air compressor.  Id.  The agency has since determined that Acme’s production rotors were visually different from the prototype originally approved under the GFAT, and failed to meet the lowered output specification of 36 SCFM.  Id.