BNUMBER: B-261954.3
DATE: January 5, 1996
TITLE: Saturn Industries
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Matter of:Saturn Industries
File: B-261954.3
Date: January 5, 1996
George W. Ash, Esq., and William J. Lewandowski, Esq., Dykema Gossett,
for the protester.
Gwendolyn M. Hoover, Esq., Defense Logistics Agency, and Arthur M.
Boley, Esq., Department of the Army, for the agencies.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably determined that qualification testing of a
transmission component for the Bradley Fighting Vehicle is required
where the component is a critical item, the failure of which would
create a serious safety risk.
2. Protester has had reasonable opportunity to meet qualification
requirements where it has known of those requirements for more than 2
years.
3. Qualification requirements in solicitation do not represent
unequal treatment of protester where previously approved sources have
similarly demonstrated the operational capabilities of their
components.
DECISION
Saturn Industries protests certain provisions of solicitation No.
SPO750-95-R-0213 issued by the Defense Construction Supply Center
(DCSC), Defense Logistics Agency (DLA), seeking proposals to provide
515 hydraulic motor race assemblies, national stock number (NSN)
2520-01-109-4375, to be used in the transmission of the M2 and M3
Bradley Fighting Vehicle. Saturn raises various issues regarding the
solicitation's qualification requirements for a component of the race
assemblies.
We deny the protest.
BACKGROUND
The Solicitation
On May 5, 1995, DLA published a notice in the Commerce Business Daily
(CBD) announcing its intention to purchase 515 race assemblies, NSN
2520-01-109-4375. The solicitation was issued on May 22. The
solicitation stated that one of the assembly components (the race) was
source controlled,[1] and referenced drawings identifying Martin
Marietta Defense Systems[2] and Kaydon Corporation as the only
approved sources of this component.[3] Specifically, the solicitation
stated
"Qualification testing of [the race component] will require a 100
hour dynamometer test ($75,000) [and] 6000 mile on-vehicle test
($25,000) and $25,000 for analysis and final report before source
approval can be given. . . . Contractor would need to supply
eight [race components] . . . along with the above funds, to the
government for testing. Testing would take six to nine months."
On July 7, Saturn filed a protest with our Office challenging the
validity of the qualification requirements. The closing date for
submission of proposals was July 10; Saturn did not submit a proposal.
Following the agency's response to its July 7 protest, Saturn filed
supplemental protests on August 23 and August 25.
Saturn's Prior Contract
In December 1992, Saturn was awarded a contract to supply the race
assemblies, NSN 2520-01-109-4375, which are being procured under the
protested solicitation.[4] There, as here, the solicitation provided
that the race components of the race assemblies were source
controlled, and identified Martin Marietta and Kaydon Corporation as
the only approved sources. By letter to the agency dated December 22,
1992, Saturn requested waiver of those source control requirements.
That request was formally denied by letter dated July 19, 1993.
On February 4, 1993, Saturn submitted a request to the U.S. Army
Tank-Automotive Command (TACOM) to become an approved source for the
race component.[5] By letter from TACOM's Small Business Liaison
Office dated June 8, 1993, Saturn was advised of specific testing
requirements that would be necessary in order for it to become an
approved source of the component. Those requirements are identical to
the qualification requirements in the solicitation now being
protested. Specifically, Saturn was advised that, with regard to NSN
2520-01-109-4375, qualification testing would require a "100 hour dyno
test," as well as a "6000 mile on-vehicle test." The June 8, 1993,
letter further stated, "Saturn would need to supply eight parts, four
per [transmission]," that "testing would take 6-9 months," and that
"Saturn would be required to pay for all costs associated with
qualification."
Despite the clear statement that Saturn would not become an approved
source until testing of its component had been performed, Saturn did
not submit any race components for testing. Rather, Saturn
subsequently made repeated requests for waiver of the source control
requirements to various government officials. By letters to Saturn
dated July 19, 1993, September 15, 1993, December 10, 1993, and
February 8, 1994, DLA reiterated the fact that the testing
requirements would not be waived. Each of these letters specifically
referenced NSN 2520-01-109-4375. Ultimately, Saturn made no
deliveries of the race assemblies under its prior contract; that
contract was terminated for the convenience of the government on July
28, 1994.
DISCUSSION
Saturn first protests that the testing requirements for the race
component, that is, the 100-hour dynamometer test and 6,000-mile
on-vehicle test, lack a reasonable basis and, therefore, unreasonably
restrict competition in violation of 10 U.S.C. 2304 (1994).
The agency responds that the testing requirements are necessary to
demonstrate the component's capability to perform under actual
operating conditions. During operation, the race assembly is
subjected to high alternating stresses and may experience reversing
rotating piston load, along with varying accelerations and
decelerations of the ball pistons. Accordingly, dimensional, visual,
and metallurgical inspections were considered insufficient, and the
agency concluded that demonstration testing was necessary.[6]
Further, the agency explains that the race assemblies are "safety
critical," inasmuch as component failure during operation could result
in personnel injury from flying debris as well as cause sudden loss of
vehicle control.[7]
Saturn criticizes the agency's determination regarding the testing
requirements on the basis that the agency relied on input from Martin
Marietta in making its determination.[8] Nonetheless, Saturn offers
neither evidence nor argument that the above-stated facts are
inaccurate or that the risks identified are inconsequential or
otherwise should not be considered.
Generally, an agency's determination that testing is required is a
matter within the technical competence of the procuring agency, and we
will not disturb the agency's position in that respect in the absence
of clear evidence indicating the position is unreasonable. Hill
Aviation Logistics, 67 Comp. Gen. 244 (1988), 88-1 CPD 140;
Electro-Methods, Inc., B-255023.3; B-255023.4, Mar. 4, 1994, 94-1 CPD
173. Here, the record identifies specific safety concerns which led
to the agency's determination that operational testing was necessary.
The record further indicates that there were performance problems
associated with the race component during its development stage.
Accordingly, Saturn's general assertion that the testing requirements
are unnecessary fails to establish that TACOM's contrary
determination, based on the provisions of FAR 46.203, is
unreasonable. There is simply no basis to question the agency's
determination regarding the testing requirements.
Saturn next protests that it has not been given a reasonable
opportunity to qualify as an approved source. Saturn notes that
although the solicitation requires delivery of the race assemblies
within 150 days following award qualification testing is expected to
take from 6 to 9 months. On this basis, Saturn complains "it is not
possible for [Saturn] to compete . . . if its offered product is not
qualified, or at least one to four months into testing, at the time of
award."
When a contracting agency restricts a contract award to only approved
sources and imposes qualification requirements, unapproved sources
should be given a reasonable opportunity to qualify. 10 U.S.C. 2319
(1994). However, an agency is not required to delay a procurement
solely to provide a potential offeror an opportunity to demonstrate
its ability to become approved. 10 U.S.C. 2319(c)(5); Tura Mach.
Co., B-241426, Feb. 4, 1991, 91-1 CPD 114. This is particularly
true where the offeror contributes to its failure to obtain timely
source approval. See The Purdy Corp., B-259066, Mar. 1, 1995, 95-1
CPD 120; Texstar, Inc., B-239905, Oct. 9, 1990, 90-2 CPD 273.
As discussed above, Saturn was advised by letter dated June 8, 1993,
of the precise testing requirements for the race assemblies, NSN
2520-01-109-4375, to which it now objects. At that time Saturn was
requested to submit components for testing; it did not do so.
Further, as indicated, Saturn was repeatedly advised by the agency
that the source control requirements would not be waived. Despite
Saturn's protest, Saturn has not yet submitted any race components to
the government for testing.[9] On this record, Saturn's protest that
it has not been given a reasonable opportunity to comply with the
qualification requirements is without merit.[10]
Saturn next protests that it is being subjected to unequal treatment
in comparison to Martin Marietta and Kaydon. Saturn asserts that the
race components being provided by the previously approved sources were
not subjected to the testing requirements that are now required.
Again, the record contradicts Saturn's assertions.
First, the agency states that, in fact, the race assemblies currently
being provided were developed between 1984 to 1986, and that, during
that period, the race component was subjected to a series of tests and
inspections integrated within the development process. More
significantly, the agency notes that the operational testing
requirements to which Saturn objects are intended to demonstrate the
component's capability to perform under operating conditions, and that
the components currently being provided have been, and continue to be,
repeatedly tested under actual operating conditions. Although the
protester complains that there is inadequate documentation regarding
the developmental testing that occurred from 1984 to 1986,[11] Saturn
offers no rational argument to support the unfounded assertion that,
in developing the race assembly as a new component, the agency failed
to subject it to operational testing. Further, Saturn offers no
rebuttal of the agency's statement that the currently fielded
components have repeatedly demonstrated their capability to perform
under actual operating conditions and, as such, have been subjected to
essentially the same testing requirements to which Saturn now objects.
Accordingly, Saturn's assertions that the solicitation's testing
requirements represent unequal treatment are without merit.[12]
The protest is denied.
Comptroller General
of the United States
1. The solicitation also stated that a second component (the bushing)
was source controlled. The requirements regarding that component are
not at issue in this protest.
2. Martin Marietta is now Lockheed Martin. To avoid confusion, we
refer only to Martin Marietta throughout this decision.
3. The agency explains that Kaydon is the only currently approved
manufacturer of the race component. Martin Marietta was identified as
an approved source because it is the corporate successor to General
Electric Corporation, the original equipment manufacturer of the
Bradley transmission; as such, Martin Marietta maintains a supply of
the Kaydon-manufactured race components.
4. Contract No. DLA 770-93-C-3520 was awarded to Saturn on December
15, 1992.
5. Although DCSC manages acquisitions of the race assembly, NSN
2520-01-109-4375, TACOM is the engineering support activity and
program manager for the Bradley Fighting Vehicle. As such, TACOM is
responsible for qualifying any new source.
6. There are references in the record to operational problems that
occurred during the development of the race assembly.
7. With regard to the "safety critical" nature of the race assembly,
the agency references Federal Acquisition Regulation (FAR) 46.203,
which states
"Criteria for Use of Contract Quality Requirements"
"The extent of contract quality requirements . . .
required under a contract shall usually be based upon the
classification of the contract item (supply or service) as
determined by its technical description, its complexity,
and the criticality of its application.
. . . . .
"(c)(1) A critical application of an item is one in which
the failure of the item could injure personnel or
jeopardize a vital agency mission."
8. Martin Marietta provides TACOM with engineering support services
for the Bradley Fighting Vehicle under a systems technical support
contract.
9. The record indicates that Saturn has not yet manufactured any race
components.
10. Saturn complains that TACOM has not agreed to bear the component
testing costs for Saturn. In this regard, offerors are generally
required to bear their own costs of qualification testing. See 10
U.S.C. 2319(b)(3); Federal Acquisition Regulation (FAR)
9.202(a)(1)(ii). The law provides that, under certain circumstances,
an agency may bear the testing costs for a small business concern if
the agency determines that such additional qualified source is likely
to result in a net cost savings to the government due to increased
competition for future requirements. See 10 U.S.C. 2319(d)(1)(B);
FAR 9.204(a)(2). Saturn submitted a request that the agency bear
its testing costs 1 day prior to filing its protest. The agency
states that it is currently considering the request. To the extent
Saturn's protest is based on an assumption that the agency will
decline to bear the testing costs, the protest is premature. Protests
which merely anticipate allegedly improper agency action will not be
considered. See, e.g., Jantec, Inc., B-243192, Mar. 14, 1991, 91-1
CPD 289.
11. The agency states that most of the documentation relating to that
development period no longer exists.
12. Saturn also asserts that an organizational conflict of interest
exists because, under Martin Marietta's system technical support
contract, Martin Marietta will assist TACOM in the assessment of
Saturn's race component. Since Saturn has not yet submitted its
component to the agency for testing, its speculation that the agency
will be improperly prejudiced by input from Martin Marietta merely
anticipates allegedly improper agency action. See Jantec, Inc.,
supra. In any event, the agency notes that TACOM, not Martin
Marietta, will make the final determination with regard to
qualification of Saturn as an approved source, thereby complying with
its obligation to avoid, neutralize or mitigate any potential conflict
of interest that might exist. See FAR 9.501, 9.504, 9.505; D.K.
Shifflet & Assocs., Ltd., B-234251, May 2, 1989, 89-1 CPD 419.