BNUMBER: B-277656
DATE: November 5, 1997
TITLE: Greenwich Air Services, Inc., B-277656, November 5, 1997
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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.
Matter of:Greenwich Air Services, Inc.
File: B-277656
Date:November 5, 1997
John A. Ordway, Esq., Berliner, Corcoran & Rowe, for the protester.
Paul Shnitzer, Esq., Crowell & Moring, for Turbo Power & Marine
Systems, Inc. an intervenor.
Richard Gonzales, Esq., Department of Transportation, for the agency.
Katherine Riback, Esq., Glenn Wolcott, Esq., and Paul Lieberman, Esq.,
Office of the General Counsel, GAO, participated in the preparation of
the decision.
DIGEST
1. RFP requirement that technical representative of original
equipment manufacturer (OEM) be present during six critical phases of
the overhaul and repair work of power turbines is not unduly
restrictive where requirement is based on agency's reasonable concerns
regarding safe operation of ships.
2. Protester's unsupported speculation that involvement of OEM
technical representative will undermine contract performance, thereby
decreasing the protester's chances for subsequent awards, does not
provide basis for protest.
DECISION
Greenwich Air Services, Inc. protests the terms of request for
proposals (RFP) No. DTCG40-97-R-70026, issued by the Coast Guard for
the overhaul and repair of Pratt & Whitney power turbines.[1]
Greenwich contends that the solicitation requirement that a technical
representative of the original equipment manufacturer (OEM) be present
during certain phases of the overhaul and repair process improperly
restricts competition and creates an organizational conflict of
interest for Turbo Power and Marine Systems, Inc., the OEM.[2]
We deny the protest.
BACKGROUND
On May 9, 1997, the agency issued the RFP, which contemplated the
award of a requirements contract for a base year with one 1-year
option period. The solicitation required that OEM brand name parts be
used and that an OEM technical representative be on site during six
critical phases of the overhaul and repair process.[3] Prior to
issuing the solicitation, the agency executed a "Justification for
Other Than Full and Open Competition" (JOTFOC) which stated:
Pratt & Whitney/Turbo Power & Marine Systems, Inc. is the only
known company possessing the original drawings, specifications,
engineering control procedures and proprietary methods to ensure
the latest design configuration, manufacturing and quality
control required to produce parts to current engineering
specifications and requirements. . . . Power Turbines which
explode with flying debris due to faulty parts, may severely
mangle or kill anyone in the engine room . . . . Catastrophic
failure of the Power Turbine during engine operation could result
in hundreds of thousands of dollars in damage, not only to
itself, but the gas generator that the power turbine drives, and
the area surrounding the turbine on the vessel.
Subsequently, the agency amended the JOTFOC to also state:
Pratt & Whitney/Turbo Power & Marine Systems, Inc. is the only
known source for the technical expertise required to ensure:
that repairs recommended by the contractor are necessary; that
Pratt and Whitney authorized repair procedures, modifications,
limits/tolerances, and inspection criteria are used; and that all
Pratt and Whitney Standard Practices are met.
On May 30, Greenwich filed an agency-level protest challenging the
terms of the solicitation as being overly restrictive. The agency
denied that protest on July 22.
On July 23, Greenwich and Turbo each submitted a proposal responding
to the solicitation. The total evaluated price of Greenwich's
proposal was $[deleted] and the total evaluated price of Turbo's
proposal was $[deleted]. On July 30, Greenwich filed this protest
with our Office.
DISCUSSION
Greenwich first argues that the RFP requirement for an OEM technical
representative requirement improperly restricts competition because of
the control it gives to Turbo, the OEM, over its competitors' prices.
Greenwich argues that the requirement permits Turbo to quote an
unreasonably high price for the services of its OEM representative,
thereby ensuring for itself an "insurmountable price advantage,"
maintaining that "the complete elimination of these OEM Representative
clauses is necessary to avoid the unfair competitive disadvantage."
Although Greenwich acknowledges that, under previous contracts, it
"[has] utilized the regional [OEM] representative for consultation and
added expertise--when necessary," Greenwich nonetheless asserts "there
is no reason to require any OEM Representative services, as
inspections can be accomplished by others, including Greenwich, in
accordance with the OEM's manual."
The agency responds that the RFP requirement for an OEM technical
representative is necessary because of recent restructuring within the
contracting activity that has depleted staffing, leaving a current
staffing level without the necessary expertise to ensure that repairs
recommended by the contractor are necessary and that the appropriate
repair procedures and inspection criteria are used. Further, as
discussed in the JOTFOC, the agency maintains that the specific
expertise provided by the OEM technical representative is critical to
the safe operation of the power turbines.
The agency notes that this identical issue was previously considered
in connection with a prior solicitation for the overhaul and repair of
Pratt & Whitney marine gas generators in which an OEM technical
representative was required to be on site during the entire overhaul
process. In response to a protest filed by Greenwich's subsidiary,
the requirement was revised so that the OEM technical representative
was only required to be present during six critical phases of the
overhaul and repair work. The agency maintains that, as with the gas
generators, the agency's review of this issue led it to conclude that
the presence of an OEM representative during the specified phases was
necessary since improper repairs could threaten the safety of agency
personnel, result in exorbitant additional repair costs, and
incapacitate agency ships.
The determination of a contracting agency's minimum needs and the best
method for accommodating them are matters primarily within the
agency's discretion. Tucson Mobilephone, Inc., B-250389, Jan. 29,
1993, 93-1 CPD para. 79 at 2, aff'd, B-250389.2, June 21, 1993, 93-1 CPD para.
472. Where a requirement relates to national defense or human safety,
as here, an agency has the discretion to define solicitation
requirements to achieve not just reasonable results, but the highest
possible reliability and effectiveness. Tucson Mobilephone, Inc.,
supra, 93-1 CPD para. 79 at 5.
The record provides no basis to call into question the legitimacy of
the agency's concerns regarding the risk of improper repair of the
power turbines absent OEM assistance, and the ramifications involved.
Indeed, Greenwich itself acknowledges that in the past, assistance
from an OEM representative has been necessary. Further, Greenwich's
asserted concern that the requirement would [deleted]. Based on this
record, including the JOTFOC and the agency's explanation supporting
its requirements, we do not find the requirements unduly restrictive.
Greenwich also asserts that the OEM technical representative
requirement creates an organizational conflict of interest for
Turbo.[4] Greenwich asserts that if an offeror other than Turbo
receives award, Turbo's representative would have an incentive to
undermine the awardee's performance, thereby improving Turbo's chances
for subsequent awards.
Greenwich's argument regarding the conflict of interest on the part of
Turbo is entirely speculative. While an agency may exclude an offeror
from the competition because of an apparent conflict of interest in
order to protect the integrity of the procurement system, even if no
actual impropriety can be shown, such a determination must be based on
facts and not mere innuendo or suspicion. Cleveland
Telecommunications Corp., 73 Comp. Gen. 303, 308 (1994), 94-2 CPD para.
105 at 7.
Here, there is no support for Greenwich's speculation. On the
contrary, the record indicates that Greenwich has previously relied on
the OEM technical representative's expertise in successfully
performing similar contracts. To the extent this portion of the
protest is based on Greenwich's speculation that the agency will fail
to perform an objective evaluation of proposals under subsequent
procurements, it merely anticipates improper agency action and,
therefore, is not for consideration on the merits. See, e.g., Harbor
Branch Oceanographic Inst., Inc., B-243417, July 17, 1991, 91-2 CPD para.
67 at 6.
The protest is denied.
Comptroller General
of the United States
1. The power turbines are used in the Coast Guard's 378' High
Endurance Cutters and 400' Ice Breakers.
2. Turbo Power and Marine Systems, Inc. is an affiliate of Pratt &
Whitney.
3. The RFP states that the contractor shall have an OEM technical
representative at the contractor's facility during the following
critical operations: initial inspection, initial (dirty) inspection,
clean inspection (final condition report), repairs, assembly, and
testing.
4. An organizational conflict of interest exists when because of other
activities or relationships with other persons, a person is unable or
potentially unable to render impartial assistance or advice to the
government, or the person's objectivity in performing the contract
work is or might be otherwise impaired, or a person has an unfair
competitive advantage. See Federal Acquisition Regulation sec. 9.501.