Kaiterra Fire Systems, LLC

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to a GAO Protective Order. The entire decision has been approved for public release.

Decision

Matter of: Kaiterra Fire Systems, LLC

File: B-423952.2; B-423952.4

Date: February 4, 2026

Lee Dougherty, Esq., Esna Mihail, Esq., and Bryan Short, Esq., Effectus, PLLC, for the protester.
John G. Horan, Esq., Faegre Drinker Biddle & Reath LLP, for Perimeter Solutions LP, the intervenor.
Elin M. Dugan, Esq., Tyler Ellis, Esq., and Michelle M. Weiner, Esq., U.S. Department of Agriculture, for the agency.
Michelle Litteken, Esq., and April Y. Shields, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is denied where the protester has not demonstrated that the agency's decision to include ancillary services in the award of a contract for products was unreasonable; and dismissed where the protester is not an interested party to challenge the agency's award of a contract on a sole-source basis because it is not eligible for award.

DECISION

Kaiterra Fire Systems LLC, a small business of The Woodlands, Texas, protests the award of contract No. 1202SC26T2500 on a sole-source basis to Perimeter Solutions LP, of St. Louis, Missouri, by the U.S. Department of Agriculture (USDA), Forest Service, for aerial long-term fire retardant (LTFR) products and ancillary services to designated airtanker bases (ATBs). The protester argues that the sole-source justification is unreasonable because the contract bundles severable services with the LTFR product, and the period of performance exceeds the agency's needs. Kaiterra also challenges various aspects of the agency's justification for the award, as well as the resultant contract.

We deny the protest in part and dismiss it in part.

BACKGROUND

The Forest Service's retardant program provides aerially applied and limited ground-based qualified LTFR products and application systems to assist in reducing wildfire intensity and spread. Contracting Officer's Statement (COS) at 1.[1] The agency qualifies aerial LTFR products pursuant to USDA specifications, and only fully qualified LTFR products may be used on National Forest Service System lands. Id. Currently, Perimeter is the only supplier with a fully qualified aerial LTFR product. Id. at 2.

On July 11, 2025, the Forest Service issued a notice that it intended to award a sole-source contract to Perimeter for the supply of aerial LTFR products and necessary ancillary support. Agency Report (AR), Tab 29, Notice of Intent at 2. The notice provided that the aerial LTFR products supplied must be fully qualified. Id. The notice cited as authority for the sole-source award 41 U.S.C. § 3304(a)(1), as implemented by Federal Acquisition Regulation (FAR) section 6.302-1 (“Only one responsible source and no other supplies or services will satisfy agency requirements”). Id. at 3. The notice did not provide any information regarding the estimated value of the contract, the period of performance, or the nature of the ancillary services. The notice invited responses within 7 days from sources meeting the agency's requirement--including having a fully qualified aerial LTFR product. Id. at 3-4. The agency did not receive any responses to the July 11 notice of intent. COS at 4.

Subsequently, on September 16, the Forest Service posted a notice of award and accompanying justification and approval (J&A) for a contract awarded on September 3. AR, Tab 36, Notice of Award at 2. The J&A provided that the agency was awarding Perimeter an indefinite-delivery, indefinite-quantity contract for the supply of fully qualified aerial LTFR products and necessary ancillary services. AR, Tab 28, J&A at 1. The J&A described the ancillary services as follows: “Ancillary services include the shipping, storing, mixing, loading, off-loading of the aerial LTFR products, and loading of water onto fixed wing aircraft, as necessary to mee[t] the Government's requirement for supply of the aerial LTFR products, at the various ATBs.”[2] Id. The J&A stated that the contract would have a 5‑year period of performance, and the total estimated value was $1.3 billion. Id. at 1-2.

The J&A noted that Perimeter was the only supplier to attain full qualification of an aerial LTFR product, and three other firms had a product in testing, including Kaiterra. AR, Tab 28, J&A at 2-3. The J&A provided that “a new supplier may attain full qualification” during the period of performance, and the “acquisition has the ability to off-ramp a limited quantity of the requirement” to an alternate source.[3] Id. at 2.

On September 25, Kaiterra filed this protest.

DISCUSSION

Kaiterra primarily contends the Forest Service improperly bundled ancillary services with the aerial LTFR product in making the award to Perimeter. Protest at 5. Additionally, the protester argues that various other aspects of the award were improper, including that the period of performance of the sole-source contract exceeds the agency's needs. Id.; Supp. Protest at 3-15.

The Forest Service disputes the merits of Kaiterra's allegations, and the agency also contends that the protester is not an interested party to raise its challenges because it cannot offer a qualified aerial LTFR product.[4] Req. for Dismissal at 4-6; Memorandum of Law (MOL) at 11-13. The protester does not dispute that it cannot offer a qualified product at this time but asserts that it is “fully capable of performing the ancillary services.” Resp. to Req. for Dismissal at 4-5. In this context, the protester asserts that it is an interested party because if our Office were to grant the relief that Kaiterra seeks‑‑recommending that the ancillary services be removed from the sole-source award and competed separately--the protester would be eligible for award of a contract to provide the ancillary services. Resp. to Req. for Dismissal at 4; Comments at 3. We first address Kaiterra's interested party status and then discuss the allegation of improper bundling.

Interested Party

We first address Kaiterra's interested party status to challenge the bundling aspect of the award.

Only an “interested party” may file a protest. 4 C.F.R. § 21.0(a)(1). That is, a protester must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award or the failure to award a contract. Id. A protester does not qualify as an interested party if the protester is not eligible to receive a contract award were its protest to be sustained. Meridian Knowledge Sols., LLC, B‑420906, Nov. 2, 2022, 2022 CPD ¶ 270 at 10. In addition, we determine whether a party is interested based on the current record. Perimeter Sols. LP, B-423321, B‑423321.2, May 6, 2025, 2025 CPD ¶ 109 at 5 n.2; Merlin Int'l, Inc., B-310611, Jan. 2, 2008, 2008 CPD ¶ 66 at 3. In this regard, we note an agency need not forgo meeting current needs solely based on the prospect of enhanced future competition where it has an undisputed need involving a matter of public safety. Smiths Detection, Inc., B‑420110, B-420111, Nov. 5, 2021, 2021 CPD ¶ 359 at 7.

Furthermore, determining whether a party is interested involves consideration of a variety of factors, including the nature of the issues raised, the benefit or relief sought by the protester, and the party's status in relation to the procurement. Noble Supply & Logistics, B-417269, Apr. 30, 2019, 2019 CPD ¶ 167 at 6; RELM Wireless Corp., B‑405358, Oct. 7, 2011, 2011 CPD ¶ 211 at 2. Whether a protester is an interested party is determined by the nature of the issues raised and the direct or indirect benefit or relief sought. RELM Wireless Corp., supra.

As noted above, this procurement is for the Forest Service's retardant program for certain qualified LTFR products and application systems to assist in reducing wildfire intensity and spread. COS at 1; see also AR, Tab 28, J&A. While Kaiterra cannot offer a qualified LTFR product, the protester's claim to being an interested party is premised on the allegation that the Forest Service improperly bundled ancillary services with the aerial LTFR products, and if the ancillary services were competed separately, the protester would be eligible to provide those services. Resp. to Req. for Dismissal at 4; Comments at 3. In this regard, Kaiterra argues that it is capable of providing the ancillary base operation services included in the contract, i.e., mixing, loading, storing, and transporting the aerial LTFR products. See Comments at 3-4. The agency responds Kaiterra is not an interested party because the protester has not demonstrated it is capable of performing the ancillary services in question. Req. for Dismissal at 5; MOL at 12.

Here, if we find that the Forest Service improperly consolidated the requirement for ancillary services with the requirement for aerial LTFR product, we could recommend that the ancillary services be procured separately and on a competitive basis. While the agency argues that the protester is not capable of providing the services, the agency has not identified any limitations, such as licenses, certifications, or restrictions, that restrict a firm's ability to provide just the services in question. In other words, the agency has not demonstrated that the protester would be per se ineligible for award of a contract to separately provide the ancillary services in question. As such, we find Kaiterra is an interested party to challenge the consolidation of the requirements.

Consolidation of Requirements

Turning to the merits, we next address Kaiterra's allegation that it was improper for the agency to include ancillary services in Perimeter's sole-source contract for aerial LTFR product.

Relevant here, t he Competition in Contracting Act (CICA) requires agencies to obtain full and open competition in their procurements through the use of competitive procedures. 41 U.S.C. § 3301(a)(1). However, CICA permits an exception to the use of competitive procedures where the supplies or services required by an agency are available from only one responsible source, and no other type of supplies or services will satisfy agency requirements. See 41 U.S.C. § 3304(a)(1); FAR 6.302-1(a)(2). Our review of an agency's decision to conduct a sole-source procurement focuses on the adequacy of the rationale and conclusions set forth in the written justification. CWIS, LLC, B‑416530, Sept. 14, 2018, 2018 CPD ¶ 321 at 4. When that document sets forth a reasonable justification for the agency's actions, we will not object to the award. Id.; see also MCG Energy Sols., LLC, B-421143, Jan. 10, 2023, 2023 CPD ¶ 19 at 4.

In addition, and as pertinent here, CICA generally requires that solicitations permit full and open competition and contain restrictive provisions only to the extent necessary to satisfy the procuring agency's needs. 41 U.S.C. § 3306(a)(2)(B). An allegation of improper bundling under CICA reflects a claim that a contract combines separate requirements beyond what is necessary to meet the agency's needs, thereby limiting the competition by excluding offerors that can only perform a portion of the requirement.[5] See, e.g., Manus Med. LLC, B-412331, Jan. 21, 2016, 2016 CPD ¶ 49 at 5; Major Contracting Servs., Inc., B-406980, Oct. 10, 2012, 2012 CPD ¶ 288 at 3-4.

Because procurements conducted on a bundled or total package basis can restrict competition, we will sustain a challenge to the use of such an approach where it is not necessary to satisfy the agency's needs. Outdoor Venture Corp.; Applied Cos., supra at 4; Aalco Forwarding, Inc., et al., B‑277241.12, B‑277241.13, Dec. 29, 1997, 97-2 CPD ¶ 175 at 6. The determination of a contracting agency's needs and the best method for accommodating them are matters primarily within the agency's discretion, and we have sustained protests only where no reasonable basis is demonstrated. Outdoor Venture Corp.; Applied Cos., supra; U.S. Electrodynamics, Inc., B-403516, B‑403516.2, Nov. 12, 2010, 2010 CPD ¶ 275 at 9. Of particular relevance here, where a requirement relates to national defense or human safety, an agency has discretion to define the solicitation requirements to achieve not just reasonable results, but the highest possible reliability and effectiveness. Outdoor Venture Corp.; Applied Cos., supra.

Here, the protester asserts that it was unreasonable for the agency to include ancillary services in the contract because “the awardee does not even perform those duties itself and historically many companies have and are performing these very duties.” Comments at 5. The protester adds that the equipment used to mix, store, and load LTFR products is commercially available, and Perimeter uses subcontractors to provide these services. Id. at 6-7.

The Forest Service responds that the ancillary services are a necessary component of meeting the agency's immediate operational requirements. MOL at 13. The agency explains that at type A (full-service) and type C (call when needed) ATBs, the aerial LTFR needs to be mixed and delivered to aircraft, and minor deviations in mixing ratios, temperature control, transport, or application methods could compromise performance, environmental compliance, and mission readiness. Id. at 14; COS at 6. The agency describes these as “unique and necessary ancillary services to complete the supply” of the qualified LTFR product, AR, Tab 28, J&A at 2, and the agency adds that the contractor, in providing “both the product and the product support necessary for its proper use,” must adhere to precise technical, environmental, and safety standards. MOL at 14. The Forest Service continues: “The base services--mixing/loading, storage, transport, temperature control, calibration, and on-site personnel--are not generic logistics tasks, but technical extensions of the [qualified product list] product itself, governed by the same strict parameters that ensure its continued qualification.” Id. at 14. The agency states that procuring the services separately would introduce unacceptable risks of delay, inconsistency, and noncompliance. Id.

Based on these considerations, we find that the agency has provided a reasonable basis for its determination to purchase aerial LTFR products and ancillary services from a single source. As noted above, where a requirement relates to national defense or human safety, an agency has discretion to define the solicitation requirements to achieve not just reasonable results, but the highest possible reliability and effectiveness. Outdoor Venture Corp.; Applied Cos., supra. Here, the Forest Service reasonably determined that procuring ancillary services and LTFR products from a single source is needed to achieve the highest possible reliability and effectiveness in reducing wildfire intensity and spread.

Moreover, while the protester contends that Perimeter's history of subcontracting these services is evidence that the services should be competed, we have found bundling was reasonable where the agency has a need to obtain the benefit of dealing with only one accountable contractor. Tucson Mobilephone, Inc., B-256802, July 27, 1994, 94-2 CPD ¶ 45 at 5. Here, the protester has not shown that the Forest Service was unreasonable in finding that having a single entity provide the LTFR product and ancillary services was necessary to ensure uninterrupted, safe, and consistent application of the product.

In sum, while Kaiterra disagrees with the agency's approach, we find the Forest Service has met its burden of showing a reasonable need to procure the LTFR products and ancillary services in one contract. Accordingly, we reject Kaiterra's argument that the Forest Service impermissibly bundled services into the sole-source contract, and this protest ground is denied.

Finally, as noted above, Kaiterra's claim to status as an interested party is premised on its argument that the agency improperly bundled ancillary services with the aerial LTFR product--a claim we have rejected. In challenging other aspects of the award, Kaiterra does not dispute that it cannot offer a qualified aerial LTFR product. See Resp. to Req. for Dismissal at 4-5. As a result, even if we were to conclude that the sole-source award to Perimeter was contrary to law or regulation, Kaiterra would not be eligible to compete for an award because it cannot offer a fully qualified aerial LTFR product to meet the agency's needs as required in this procurement. A protester does not qualify as an interested party if the protester is not eligible to receive a contract award were its protest to be sustained. Meridian Knowledge Sols., supra. By definition, the protester is not an interested party to challenge the award, and for this reason, we need not address the protester's remaining protest allegations.[6]

The protest is denied in part and dismissed in part.

Edda Emmanuelli Perez
General Counsel