TITLE: B-295126.4, Engineered Electric Company d/b/a DRS Fermont, June 14, 2007
BNUMBER: B-295126.4
DATE: June 14, 2007
************************************************************************
B-295126.4, Engineered Electric Company d/b/a DRS Fermont, June 14, 2007

   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: Engineered Electric Company d/b/a  DRS Fermont

   File: B-295126.4

   Date: June 14, 2007

   David Z. Bodenheimer, Esq., Daniel R. Forman, Esq., and Dane C. Swanson,
   Esq., Crowell & Moring LLP, for the protester.

   David T. Ralston, Esq., Philip A. Nacke, Esq., and Frank S. Murray, Esq.,
   Foley & Lardner LLP, for Onan Corporation d/b/a Cummins Power Generation,
   an intervenor.

   Brian E. Toland, Esq., Frank V. DiNicola, Esq., and William J. Kampo,
   Esq., U.S. Army Materiel Command, for the agency.

   Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency improperly relaxed specification for fuel efficiency
   in acquisition of mobile generators is denied where agency relaxed
   specification based on determination that no offerors were able to meet
   prior, more stringent requirements; fact that protester claims now to be
   able to meet more stringent specification does not require that agency use
   more stringent specification, since relaxed specification meets agency's
   needs and enhances competition.

   DECISION

   Engineered Electric Company d/b/a/ DRS Fermont (DRS) protests the terms of
   solicitation No. W15P7T-04-R-A001, issued by the U.S. Army Materiel
   Command for tactical quiet generator sets and military standard generator
   sets. DRS argues that the agency improperly relaxed the solicitation's
   fuel efficiency standards.

   We deny the protest.

   BACKGROUND

   The solicitation contemplated the award of up to three
   indefinite-delivery, indefinite-quantity contracts to design, build, and
   furnish to the Army a new set of generators (variously sized and
   configured, and ranging from 5 to 60 kilowatts (kW)). The RFP contemplated
   performance in three phases. During phase I, the contractors were to
   develop prototype generators, complete a maintenance demonstration,
   conduct limited testing, and provide limited logistics data. At the
   conclusion of phase I, the solicitation and resulting contracts provided
   that the agency will perform a "downselect" among the phase I contractors,
   awarding a delivery order for the remaining phases to a single contractor.
   During phase II, the contractor will engage in further developmental and
   operational testing, perform a logistics demonstration, and develop
   additional logistics data. During phase III, the contractor will engage in
   production of the generators and associated documentation (such as
   technical manuals). This downselect is the subject of this protest.

   In 2004, the agency awarded two phase I contracts, one to the protester
   and one to Onan Corporation.[1] When performance of phase I was
   sufficiently complete, the agency solicited proposals from the two
   contractors to select a single concern to perform phases II and III. After
   receiving and evaluating those proposals, the agency established a
   competitive range comprised of Onan's proposal, and DRS filed a protest
   with our Office complaining that its proposal improperly had been excluded
   from the competitive range. In response, the agency advised that it would
   include DRS in the competitive range; we therefore dismissed DRS's
   protest. (B-295126.2, B-295126.3, Aug. 26, 2006.)

   Subsequent to including DRS in the competitive range, the agency issued a
   solicitation amendment that relaxed the specifications relating to the
   generators' fuel efficiency. That amendment is the subject of the current
   protest.

   The firms' contracts, at clause H-13, provide for the procedures and
   evaluation criteria to be followed in the agency's downselect decision.
   That clause provides that the agency will award the phase II and III work
   to the contractor submitting the proposal deemed to offer the "best value"
   to the government, considering cost/price and the following non-cost/price
   factors: technical, integrated logistics support (ILS), and small business
   participation plan. The technical factor (which includes several
   subfactors) is slightly more important than ILS (which also includes
   subfactors), which is slightly more important than cost/price, which is
   slightly more important than small business participation plan. Fuel
   efficiency is to be evaluated under the third subfactor of the technical
   factor, other key operational performance parameters.

   DRS objects to three aspects of the changed fuel efficiency
   specifications. First, DRS cites the relaxation of the fuel consumption
   requirements. In this regard, the agency changed the fuel consumption
   requirements to allow the generators to burn between 7.7 and 9.9 percent
   more fuel (depending on the size of the generator) than previously
   allowed. Agency Report (AR), exh. 32. Second, whereas, previously, the
   contracts provided for testing each size generator individually for
   compliance with the fuel efficiency standards, the amended specifications
   provide for meeting the fuel consumption requirements on the basis of a
   fleet weighted average, id.; the failure of one size generator to meet the
   fuel consumption requirements can be offset by enhanced fuel efficiency
   achieved by another size generator. Third, whereas, previously, the
   contracts provided for testing fuel efficiency using several types of
   fuel, including so-called battlefield JP-8 fuel, the revised
   specifications delete the requirement to test the generators for fuel
   efficiency using JP-8 fuel. Id.

   DRS complains that this relaxation of the fuel efficiency requirements is
   inconsistent with section 317 of the National Defense Authorization Act
   (NDAA) for Fiscal Year 2002, 10 U.S.C. sect. 2865, note (Supp. II 2002),
   Federal Acquisition Regulation (FAR) sect. 11.101, and Executive Order
   (E.O.) No. 13,423, 72 Fed. Reg. 3919 (Jan. 24, 2007). According to the
   protester, the relaxation of the efficiency standards is inconsistent with
   these authorities, all of which require agencies to acquire energy
   efficient products "to the maximum extent practicable." The protester
   maintains that the agency's relaxation of the fuel efficiency requirements
   here is especially unreasonable because it has been working to design its
   generators to meet the earlier, more stringent, requirements for the past
   2 years.

   The agency responds that it relaxed the fuel efficiency requirements
   because neither DRS nor Onan has been able to meet the more stringent
   requirements included in their contracts. DRS disputes the agency's
   position, maintaining that it has, in fact, achieved compliance with the
   earlier fuel efficiency requirements. In support of its position, the
   protester has tendered portions of its proposal that it submitted shortly
   after filing its protest; the protester maintains that, since it has been
   able to achieve compliance with the stricter requirements, the agency is
   required to continue using those standards because this is the only way
   for the agency to acquire generator sets that are energy efficient to the
   maximum extent practicable. The agency states that it is in the process of
   evaluating the protester's proposal and cannot say whether or not it
   includes information showing that the firm actually has met the stricter
   standards.

   The protest is without merit. Initially, we note that, while the protester
   claims to have provided evidence in its proposal that it can meet the
   stricter standard, there is no indication that this purported evidence was
   available to the agency at the time it issued the amendment relaxing the
   requirement.

   Further, the requirements of the NDAA do not appear applicable here.
   Subsection B of the statute specifically provides that it is intended to
   establish a program to improve the energy efficiency of Department of
   Defense (DOD) facilities; subsection C of the statute establishes specific
   goals for energy efficiency improvement for varying types of facilities;
   and subsection D outlines strategies (including, for example, the purchase
   of energy efficient products) for achieving the goals outlined in
   subsection C. Thus, by its terms, the statute appears to be limited to
   activities designed to improve the energy efficiency of DOD facilities, as
   opposed to mandating the purchase of energy efficient products for all
   purpose. Since the subject acquisition is for mobile generators that will
   be used in the field--and thus are not related to the establishment or
   maintenance and operation of a DOD facility--it follows that the relaxed
   specification here is not inconsistent with the statute.

   Similarly, E.O. No. 13,423 appears limited in its scope and, by its terms,
   is not intended to afford an enforceable right to any party outside the
   government. Section 10 of the order specifically provides that it is
   intended only to improve the internal management of the federal
   government, and is not intended to, and does not, create any right or
   benefit, substantive or procedural, enforceable at law or in equity by any
   party against the United States. Where an E.O. includes limiting language
   such as this, the remaining terms of the order do not provide a basis for
   protest. Saber Indus., Inc., B-276077, May 9, 1997, 97-1 CPD para. 174 at
   2.

   In any event, there is no indication in the NDAA[2] (or the E.O. or the
   FAR) that the energy efficiency requirements were intended to override the
   requirement for full and open competition articulated in the Competition
   in Contracting Act (CICA), 10 U.S.C. sect. 2302 et seq. (2000), or
   otherwise to take precedence over an agency's other legitimate needs.
   Rather, agencies are required to meet the efficiency requirement only "to
   the maximum extent practicable." Here, the agency determined that neither
   DRS nor Onan can meet the original fuel efficiency requirements, and that
   the requirement therefore had to be relaxed in order for the competition
   to proceed. There is nothing in the NDAA to suggest that relaxing a fuel
   efficiency requirement for this reason is impermissible.

   Moreover, even if the evidence is as the protester claims, we think the
   agency nevertheless could properly relax the requirement in order to
   ensure that there would be more than a single potential source; again,
   there is nothing in the NDAA providing that agencies must apply stringent
   fuel efficiency standards at the expense of competition. In this regard,
   where, as here, an agency determines that a relaxed specification will
   both meet its needs and afford enhanced competition for the goods or
   services being acquired, we will not object to the relaxation. See
   Virginia Elec. and Power Co; Baltimore Gas & Elec. Co., B-285209,
   B-285209.2, Aug. 2, 2000, 2000 CPD para. 134 at 7-8 (the role of our
   Office in reviewing bid protests is to ensure that the statutory
   requirements for full and open competition are met, not to protect any
   interest a protester may have in more restrictive specifications). Thus,
   even if, as the protester alleges, its generator design is able to meet
   the earlier, more stringent fuel efficiency requirements, the agency's
   decision to relax the specification in order to include Onan in the
   competition is unobjectionable.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

   ------------------------

   [1]A third offeror, L-3 Communications Westwood Corporation, filed a
   protest with our Office complaining that it also should have received an
   award. We denied the protest. L-3 Communications Westwood Corp., B-295126,
   Jan. 19, 2005, 2005 CPD para. 30.

   [2] The legislative history of the NDAA also contains no indication there
   that the statute was intended to override CICA's requirement for full and
   open competition. H.R. Rep. No. 107-333 at 636 (2001), reprinted in 2001
   U.S.C.C.A.N. 1,021, 1,059.