Matter of: Advanced Seal Technology, Inc.
Date: June 5, 2008
Doepker for the protester.
Mike Walters, Esq., Defense Logistics Agency, for the agency.
Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the decision.
Protest that offeror was deprived
of a reasonable opportunity to qualify its alternate item is denied where,
although the procuring agency failed to promptly notify offeror of deficiencies
in its item, the record shows that the offeror did not suffer competitive
prejudice as a result.
Advanced Seal Technology, Inc.
(AST) protests the issuance of an order to Quality Control Corporation by the Defense
Logistics Agency (DLA), Defense Supply
Center Columbus (DSCC), under request for quotations No. (RFQ) SPM7M3-07-T-D027
for seal assemblies, National Stock Number 4320-01-276-0822 (NSN 0822).
We deny the protest.
NSN 0822 is a critical application item,
thus, a designated Engineering Support Activity (ESA)
is required to approve all sources. DLA
Instruction 3200.1. In this case, the Naval
Surface Warfare Center,
Carderock Division is the ESA responsible
for approval. The approval process consists
of the evaluation of a technical data package (TDP)
supplied by the potential offeror which, if found satisfactory, results in
conditional approval pending an installation test to ensure the fit and
function of the proposed alternate item.
If the installation test is also satisfactory, the alternate item is
approved and the offeror is listed as a qualified source. The only sources currently approved to supply
NSN 0822 are Blackmer Inc., the original equipment manufacturer, and Quality
Control Corporation, an approved alternate item manufacturer.
In December 2005, in response to three DSCC solicitations
for NSN 0822, AST attempted to submit a TDP
for its proposed alternate item, PFS-0822-21A.
AST was unable to submit its TDP
because of various technical issues at DSCC.
AST then filed agency-level protests regarding each of the solicitations
and, as a result, DSCC accepted ASTís TDP on
January 6, 2006, and
forwarded it to the ESA.
In March 2006, while ASTís TDP
was under evaluation at the ESA, DSCC issued
an order for NSN 0822 to another firm at a price higher than that quoted by
AST. Concerned with the issuance of the
order, AST enlisted the support of an agency contact that had assisted AST in
becoming approved as a qualified source for various other NSNs. Comments at 2. Shortly thereafter the order was cancelled,
and on May 15, ASTís TDP was approved by the
On July 10, DSCC again issued an order to another firm at
a price higher than that quoted by AST.
AST protested that order at the agency level, arguing that, because
its proposed alternate item had been
conditionally approved, it should have been given an installation test before
the order was issued to another firm.
ASTís agency-level protest was sustained, and the order was cancelled.
On October 12, DSCC issued an order to AST under which AST
was required to submit two sample units of PFS-0822-21A for use in a first
article test (FAT), to serve as the installation test of the alternate
item. Even though the order included a
FAT requirement, the FAT requirement was not added to the DSCC FAT monitorís
tracking system. Agency Report (AR), Tab
4, Affidavit, at 2. As a result, the FAT
was never scheduled and the contract administrator, believing that the
alternate item was approved, directed AST to expedite delivery of the entire
145 unit order. Id. AST delivered the entire order to the agency
on December 8. Comments at 3. However, because the FAT never occurred, AST
was not approved as a qualified source.
11, 2007, DSCC issued another RFQ for NSN
0822. Because ASTís alternate item had
still not undergone an installation test, AST was not listed as a qualified
source on the RFQ. Nevertheless, on May
21, believing that it had been approved, AST filed a protest with our Office,
challenging DSCCís failure to list it in the RFQ. Through the development of that protest, AST
eventually learned that its alternate item had never been subjected to an
installation test. In settlement of the
protest, DSCC and AST, through its attorney, entered into an agreement under
which DSCC would abstain from issuing orders under the RFQ until the ESA
completed an installation test of ASTís alternate item.
In August 2007, DSCC received an initial response from the
ESA indicating that ASTís alternate item had
failed the installation test. Id. DSCC then notified ASTís attorney by
telephone that the item had failed testing.
Id. On November 5, DSCC received the ESAís
official test report, and on November 27, forwarded that report to ASTís
attorney. AR at 2. During this time period the attorney, who had
represented AST in its previous protests, was no longer retained by AST and did
not inform the firm of the test results.
Protest at 2. According to the
protester, the attorney did inform DSCC that he no longer represented AST, but
DSCC never sent the ESAís test report
directly to AST, and AST never received the test results. Id. The agency disputes ASTís assertion that its
former attorney advised DSCC that his representation of AST had ended, but
agrees that the test report was not sent directly to AST. AR, Tab 4, Affidavit, at 4.
On December 20, DSCC publicized the issuance of an order
to another firm under the RFQ at issue here, at a price higher than that quoted
by AST. On December 21, AST inquired as
to why its lower-priced quotation had not been considered and was informed for
the first time that its proposed alternate item had failed the installation
test in August, 4 months before. AST then
asked why it had not been informed of the test results earlier and was told
that DSCC believed that AST had been notified.
Protest at 1.
On December 28, DSCC sent AST a copy of the ESAís test report. On December 29, AST filed
an agency-level protest, asserting that it had been denied the opportunity to
respond to the adverse technical evaluation of its proposed alternate item due
to the agencyís failure to promptly notify AST of the installation test
By January 9, 2008,
AST had modified its alternate item and sent a revised TDP
to DSCC, which promptly forwarded it to the ESA. On February 21, ASTís agency-level protest
was denied, and on February 29, AST filed this protest with our Office. On April 1, ASTís revised TDP
was rejected as incomplete and insufficient.
In its protest here, AST argues that DSCC improperly denied it the
opportunity to qualify its alternate item.
The Competition in Contracting Act of 1984 (CICA) requires
that an agency obtain ďfull and openĒ competition in its procurements through
the use of competitive procedures. 10
U.S.C. sect. 2304(a)(1)(A) (2000).
Accordingly, when a contracting agency restricts contract award to an
approved product and imposes a qualification requirement, it must give
nonapproved sources a reasonable opportunity to qualify. Newgard Indus., Inc., B-257052, Aug. 11, 1994, 94-2 CPD para. 70 at
2. AST argues that in view of the
historical record of its efforts to qualify its alternate item, it is clear
that the internal process at DSCC is ďbrokenĒ and that as a result AST has been
denied a reasonable opportunity to qualify.
Comments at 10.
While the cumulative effect of repeated shortcomings in
the qualification process may deny an offeror a reasonable opportunity to
qualify, Advanced Seal Tech., Inc., B-249855.2, Feb. 15, 1993, 93-1 CPD para. 137 at 5-6, we do not
agree that the record supports such a conclusion here. With regard to the period preceding the
specific procurement at issue in the protest, while the record shows that certain
issues arose in processing the qualification testing of ASTís alternative item,
each prior procurement was the subject of a protest by AST, and each of those
protests was sustained by the agency, or resulted in corrective action or
settlement. As a result, DSCC has not,
until now, issued an order for NSN 0822 to any firm other than AST since AST
began its effort to qualify PFS-0822-21A.
Under these circumstances, while we do not condone the agencyís failure
to facilitate ASTís request for product approval, we fail to see how AST was
prejudiced by any prior shortcomings in the qualification process. REEP, Inc., B-290688, Sept. 20, 2002, 2002 CPD para. 158 at 2 (competitive
prejudice is an essential element of every viable protest, and unless another
firm is actually selected for an award, a protester has not suffered
With regard to the specific procurement challenged here, AST
argues that DSCCís failure to inform it of the results of the installation test
of PFS-0822-21A denied AST a reasonable opportunity to qualify its alternate
item before the issuance of the order.
By statute and regulation, agencies imposing qualification requirements
must fulfill specific responsibilities.
As relevant here, they must provide offerors a prompt opportunity to
demonstrate their qualification and must ensure that any offeror seeking
qualification is promptly informed as to whether qualification has been
attained, and if not, promptly furnish specific information on why
qualification was not attained. 10 U.S.C.
sect. 2319(b)(4), (6); FAR sect. 9.202(a)(2)(ii), (4).
In response to ASTís argument, DSCC contends that it
fulfilled the requirements of 10 U.S.C. sect. 2319(b)(6) by notifying the attorney
who had represented AST in the protest that led to the installation test. DSCC also argues that, even assuming it
failed to properly notify AST of the result of the installation test, AST was
not prejudiced because, even if it had been promptly notified of the results,
the firm could not have successfully qualified in time to compete for this
In our view, even assuming that notification of the
attorney who represented AST in its previous protests was sufficient to
constitute notice to AST, DSCCís notification of ASTís former attorney was
unreasonably delayed, contrary to the requirements in 10 U.S.C. sect. 2319(b)(6). The installation test was completed on August
22 and the test report was completed on September 19, but the report was not
forwarded to ASTís former attorney until November 27. Whether this more than 2-month delay between
the completion of the test report and formal notification was attributable to
DSCC or the ESA, we conclude that it did not
constitute prompt notice as required under 10 U.S.C. sect. 2319(b)(6).
However, we also conclude that AST was not prejudiced by
DSCCís failure to promptly notify it of the results of the installation
test. AST first received the results of
the installation test on December 28. By
January 9, AST had modified its alternative item and sent a revised TDP
to DSCC. DSCC forwarded the revised TDP
to the ESA, which conducted an evaluation
and notified AST on April 1 that its revised TDP
was rejected because it was incomplete and contained insufficient information
to determine if the modified design would work.
The period of time from when AST learned of the result of the
installation test to when it was notified that its revised TDP
was rejected was 94 days.
Based on that 94-day time period and the ultimate
rejection of ASTís revised TDP, it is clear
that AST would not have had a reasonable chance of receiving the order even if
it had been promptly notified of the results of the installation test. Assuming that AST was officially notified of
the results of the installation test on September 19, based on the 94-day time
period, AST would have received notice that its revised TDP
was rejected on December 22, 2 days after DSCC publicized the issuance of the
order to another firm.
Moreover, because ASTís revised TDP
was rejected, AST could not have qualified in time for the order even if the
evaluation of the TDP had taken
substantially less time. If AST had been
notified that its revised TDP was rejected
even well ahead of the date the order was issued, AST would have been required
to revise its TDP for a second time and
submit it for reevaluation before it would have had a chance of again becoming
conditionally approved. In our view, there was not a reasonable
chance that AST could have become a qualified source in time to receive the
The protest is denied.
Gary L. Kepplinger