CC Software, Inc. (W912NW23R0007)

B-421566 Jul 05, 2023 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights CC Software (CCS), of West Jordan, Utah, protests the intended sole-source award of a contract to Dematic Corporation, of Atlanta, Georgia, under solicitation No. W912NW23R0007, issued by the Department of the Army, Army Materiel Command, for hardware and software upgrades to the automated storage and retrieval system (ASRS) at the Corpus Christi Army Depot (CCAD) in Corpus Christi, Texas. The protester challenges the agency's justification for a sole-source award. We dismiss the protest. View Decision Decision Matter of: CC Software, Inc. File: B-421566 Date: July 5, 2023 Justin D. Heideman, Esq., Heideman & Associates, for the protester. Jonathan A. Hardage, Esq., Department of the Army, for the agency. Emily R. O’Hara, Esq., and Peter H. Tran, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging the agency’s award of a sole-source contract is dismissed as premature where the agency has not rejected the protester’s response nor determined to proceed with the sole-source procurement. DECISION CC Software (CCS), of West Jordan, Utah, protests the intended sole-source award of a contract to Dematic Corporation, of Atlanta, Georgia, under solicitation No. W912NW23R0007, issued by the Department of the Army, Army Materiel Command, for hardware and software upgrades to the automated storage and retrieval system (ASRS) at the Corpus Christi Army Depot (CCAD) in Corpus Christi, Texas. The protester challenges the agency’s justification for a sole-source award. We dismiss the protest. BACKGROUND On March 16, 2023, the Army issued a notice of intent to make a sole-source award to Dematic Corporation,[1] using the simplified acquisition procedures of subpart 13.5 of the Federal Acquisition Regulation (FAR), for ASRS infrastructure, communications, and software upgrades. Agency Report (AR), Tab 16, Notice of Intent to Sole-Source. Specifically, the agency sought contractor support with the knowledge, skills, and capabilities to upgrade the infrastructure, communications, and software of the CCAD’s existing ASRS, which supports CCAD’s inventory management and material handling operations. AR, Tab 17, March 2023 Solicitation at 33. In addition to a software replacement/upgrade, CCAD’s communication network, conveyor and AGV [automated guided vehicles] control hardware needed replacement to ensure the entire ASRS was optimized for performance. Id. Consistent with the requirements of section 13.501(a)(1)(ii) of the FAR, the Army prepared a justification and approval (J&A) for its intended sole-source award to Dematic. COS/MOL at 7. According to the agency, Dematic “is considered the Original Equipment Manufacturer (OEM) of the legacy ASRS and software.” AR, Tab 15, J&A at 3. The Army’s J&A explains as follows: Dematic Corp. retains all proprietary rights to the software, configuration files and blueprints of the existing ASRS software and future upgrades. Due to Dematic Corp’s proprietary rights, neither the Government nor any other known source has the right or authority to modify or change any of the proprietary software or technical data associated with the system currently in place. Dematic Corp. is the only source that can perform the required ASRS and software upgrades because as the OEM, it possesses the knowledge, expertise, and capability to modernize CCAD’s current legacy ASRS and software. Id. at 3-4. The J&A also explains that the Army’s decision to proceed with a sole-source award was informed, in part, by the procurement’s prior history. In this regard, the agency had initially competed the requirement for the ASRS upgrades in 2021, with the Army making award to CCS on December 30, 2021. Id. at 6. After award, CCS conducted a site survey with the Army, and in the site survey report, CCS identified four things the firm needed in order to perform the required upgrades to the ASRS. COS/MOL at 5. Relevant here, two of the items CCS requested were: the system’s “AGV site-specific configuration files,” and copies of the system’s “Oracle database schema and datasets.” AR, Tab 5, CCS Email to Army at 2. The agency sought assistance from Dematic, the OEM, with providing the requested files and database information to CCS. COS/MOL at 5. According to the Army, Dematic “replied stating that it could not share proprietary information,” and that Dematic asserted restrictions on the agency’s use of certain data and software related to the ASRS--data that was necessary to performance of the ASRS upgrade contract.[2] AR, Tab 15, J&A at 3-4. The agency avers that it engaged in follow-on discussions with Dematic “with hopes of finding some resolution,” but that an agreement could not be reached because “Dematic was simply not willing to divulge the necessary information.” Id at 6.