Rotair Aerospace Corporation ()

B-422816 Nov 06, 2024 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Rotair Aerospace Corporation, of Bridgeport, Connecticut, protests the issuance of delivery order No. SPE4AX-24-F-Z25G to Sikorsky Aircraft Corporation, of Stratford, Connecticut, by the Defense Logistics Agency (DLA) for flight control capsule assembly units. The protester argues that the agency improperly issued the delivery order without a full and open competition for the requirement. We deny the protest in part and dismiss it in part. 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: Rotair Aerospace Corporation File: B-422816 Date: November 6, 2024 Ryan C. Bradel, Esq., and Brian S. Yu, Esq., Ward & Berry, PLLC, for the protester. Mitchell A. Krock, Esq., Defense Logistics Agency, for the agency. Uri R. Yoo, Esq., and Alexander O. Levine, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that a delivery order exceeds the scope of an underlying requirements contract is denied where the record shows that the items ordered were within the express terms of the contract, providing for the buyback of inventory, and the protester’s allegations are based on facts not reflected in the record. DECISION Rotair Aerospace Corporation, of Bridgeport, Connecticut, protests the issuance of delivery order No. SPE4AX-24-F-Z25G to Sikorsky Aircraft Corporation, of Stratford, Connecticut, by the Defense Logistics Agency (DLA) for flight control capsule assembly units. The protester argues that the agency improperly issued the delivery order without a full and open competition for the requirement. We deny the protest in part and dismiss it in part. BACKGROUND On July 1, 2015, the agency awarded a requirements contract to Sikorsky on a sole‑source basis to provide a performance-based supply of consumable parts in support of previously procured Sikorsky aircrafts. Contracting Officer’s Statement and Memorandum of Law (COS/MOL) at 2; Agency Report (AR), Exh. 1, Contract at 2. The fixed-price contract was for a 5-year base period and one 5-year option period, and the agency exercised the option on April 22, 2020, extending the period of performance through June 30, 2025.[1] Id.; AR, Exh. 2, Contract Mod. No. P00078 at 1. In awarding the contract to Sikorsky on a sole-source basis, the agency executed a justification and approval (J&A) for other than full and open competition under Federal Acquisition Regulation (FAR) section 6.301‑1. AR, Exh. 3, J&A at 3. The J&A identified Sikorsky as the only responsible source for 2,524 consumable national stock number (NSN) items supporting multiple weapons systems used by the U.S. military services or acquired in foreign military sales, including flight control capsule assembly units, NSN 1680‑01‑158‑5779, referred to by the parties as “spring capsules.” Id. at 1‑3. As relevant here, the requirements contract contained a provision that allowed the agency to “delete items from the contract at any time by unilateral modification” under certain circumstances, including when the agency determines “an item to be competitive, which [means it] can be obtained from sources other than [Sikorsky], even though no alternative sources may have existed at the time of award.” AR, Exh. 1, Contract at 4. Under a “buyback” provision of the contract, if the agency unilaterally deletes items from the contract, the agency is required to “purchase residual and committed inventory up to 100 [percent] of the actual demand experienced in the 24 months preceding buyback implementation.” Id. at 4, 14. The contract defines “residual inventory” as inventory that Sikorsky “has on the shelf at the time of the buyback in order to support the [customer direct] requirements of the contract.” Id. at 4. “Committed inventory” is defined as inventory that Sikorsky “has committed with suppliers for parts in direct support of the [customer direct] requirements of the contract.” Id. The buyback provision also permits the agency to purchase “a higher quantity than what is contractually required depending on the circumstances for the individual item.” Id. at 14. On October 10, 2023, the agency notified Sikorsky that a number of NSN items, including the spring capsule, had been identified as competitive items and would be removed from the requirements contract through a unilateral modification. COS/MOL at 3; AR, Exh. 4, Oct. 10 Email to Sikorsky at 1. The notice advised that 84 customer direct items on an enclosed list--including spring capsules--were subject to the buyback provisions of the contract and requested that Sikorsky provide documentation for the residual and committed inventory levels of these items. AR, Exh. 4, Oct. 10 Email to Sikorsky at 1.