TITLE: B-298232.2, Waltron LLC--Costs, August 18, 2006
BNUMBER: B-298232.2
DATE: August 18, 2006
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B-298232.2, Waltron LLC--Costs, August 18, 2006
Decision
Matter of: Waltron LLC--Costs
File: B-298232.2
Date: August 18, 2006
Leigh T. Hansson, Esq., and Kurt D. Ferstl, Esq., Reed Smith LLP, for the
protester.
Benjamin G. Perkins, Esq., Defense Logistics Agency, for the agency.
Nora K. Doolin, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester is not entitled to the cost of filing and pursuing its protests
where the agency did not unduly delay implementing the promised corrective
action.
DECISION
Waltron LLC requests that our Office recommend that it be reimbursed the
costs of filing and pursuing its protests concerning request for
quotations (RFQ) Nos. SP0406-05-R-4095, SP0400-06-T-6790,
SP0400-06-T-9491, and SP0400-06-T-H400, issued by the Defense Logistics
Agency (DLA), Defense Supply Center Richmond (DSCR), for a liquid cooling
system corrosion inhibitor.
We deny the request.
Background
On September 30, 2005, DLA issued RFQ No. SP0406-05-R-4095 for liquid
cooling system corrosion inhibitor packaged in 55 gallon drums and 5
gallon drums.[1] The solicitation listed Nalcool 2000, an inhibitor
manufactured by NALFLEET, Inc., as the only approved product. Waltron
filed a protest with our Office on October 19, arguing that the RFQ should
also have included Waltron's inhibitor (AQ-701) as an approved product. On
November 16, the agency provided notice that it was canceling the RFQ
because it discovered, in reviewing the protest, that it had not given
Waltron notice of its product's removal from the acquisition item
description (AID) as required by Federal Acquisition Regulation (FAR)
sect. 9.207(b).[2] DSCR stated that it would delay issuance of a new
solicitation for the item until it provided Waltron written notification
with specific information about the basis for removal of its product from
the AID. In view of the cancellation of the RFQ, we dismissed Waltron's
protest as academic.
On December 16, DSCR issued solicitation No. SP0400-06-T-6790, again
identifying Nalcool 2000 as the only approved product. Waltron protested
to our Office on December 21, again objecting to the omission of its
product from the AID in the RFQ, and arguing that DSCR had failed to
implement the corrective action promised in response to its prior protest.
At that time, Waltron had not yet received written notice as to why its
product had been removed from the AID. On January 4, 2006, DSCR notified
our Office that it was canceling the RFQ, explaining that it had been
inadvertently issued by DSCR's automated procurement system before the
required notice to Waltron had been sent. We then dismissed Waltron's
second protest as academic.
On the same date our Office dismissed Waltron's second protest, January 4,
Waltron received a letter from DSCR notifying it that its AQ-701 product
had been removed from the AID for the inhibitor. The letter further
detailed that in June 2004, the Navy had informed DLA that Waltron's
product was chemically incompatible with the approved product the Navy was
using and therefore was not acceptable. At the Navy's request, DSCR
subsequently removed Waltron's product as a source of supply for the two
sizes of the product (2 quarts and 55 gallons) used by the Navy.
With respect to the other two sizes of the product (1 quart and 5
gallons), the letter explained that in November 1987 Waltron's inhibitor
was erroneously added to the AID as an approved product. According to
DSCR, these two sizes of the product are used exclusively by the Air
Force, which had accepted Waltron's product as an acceptable alternative
to NALFLEET'S Nalcool 2000. DSCR concluded by informing Waltron that since
the Air Force no longer requires these items, and since Waltron's product
does not meet the Navy's requirements, Waltron's product has been removed
from the AID. The letter included a separate section advising Waltron on
the steps to become approved as a source of supply for the item.
On January 14, DSCR issued a third RFQ, No. SP0400-06-T-9491, for the same
product called for in the previous two solicitations. On January 23,
Waltron protested to our Office, objecting to the omission of its product
from the AID in the RFQ and asserting that the corrective action promised
by DSCR had not been implemented because the January 4 letter from DSCR
provided no documentation in support of its conclusion that Waltron's
product is chemically incompatible with the approved product. On February
3, DSCR provided notice that it was canceling the RFQ because the Navy no
longer had a need for the items. We subsequently dismissed Waltron's
protest as academic.
On March 28, Waltron received a second letter from DSCR. The purpose of
this letter was to inform Waltron of the testing protocol developed by the
Navy for determining the compatibility of the inhibitors. It further
stated that Navy could not mix incompatible chemicals in its systems and
advised that alternative products would need to be tested to ensure
compatibility. DSCR's letter then provided the guidelines for testing
Waltron's product and listed a contact number for questions and/or to
begin test initiation.
On April 5, DSCR issued RFQ No. SP0400-06-T-H400, for the same product. On
April 21, Waltron protested to our Office, reiterating the grounds raised
in its prior protests and arguing that the March 28 letter from DSCR
lacked adequate justification for its decision to exclude Waltron's
product. On May 24, DSCR filed its report responding to the protest,
arguing that the Navy's decision to require compatibility testing is
reasonable, that the solicitation complies with competition requirements,
and that DSCR took the promised corrective action. On June 9, Waltron
withdrew its protest and we closed our file on June 12.
Waltron now requests that our Office recommend that DSCR reimburse it for
the costs of filing and pursuing its four previous protests. As explained
below, we deny Waltron's request.
Discussion
Our Office may recommend that protest costs be reimbursed where we find
that an agency's action violated a procurement statute or regulation. 31
U.S.C. sect. 3554(c)(1) (2000); 4 C.F.R. sect. 21.8(d) (2006). If an
agency decides to take corrective action in response to a protest, our
Office may recommend that the agency pay the protester its costs of filing
and pursuing the protest. 4 C.F.R. sect. 21.8(e). However, we will
recommend reimbursement only where the agency unduly delays taking
corrective action in the face of a clearly meritorious protest. Birmingham
Assocs.; IRS Partners-Birmingham--Entitlement to Costs, B-251931.4,
B-251931.5, Aug. 29, 1994, 94-2 CPD para. 82 at 3. When an agency proposes
corrective action, we consider it implicit that it will undertake a good
faith effort to implement the corrective action and to address all issues
raised by the protester that are meritorious. Louisiana Clearwater,
Inc.--Recon. and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD
para. 209 at 6. As a general rule, so long as an agency takes corrective
action in response to a protest by the due date of its protest report, we
regard such action as prompt and decline to consider favorably a request
to recommend reimbursement of protest costs. Alaska Structures,
Inc.--Costs, B-298156.2, July 17, 2006, 2006 CPD para. 109. We have
recognized that the reimbursement of protest costs may be appropriate
where an agency does not timely implement the promised corrective action;
the mere promise of action, without reasonably prompt implementation, has
the obvious effect of circumventing the goal of the bid protest system of
effecting the economic and expeditious resolution of bid protests.
Louisiana Clearwater, Inc.-Recon. and Costs, supra.
Waltron argues that it should recover its costs because the agency's
actions show a failure to timely implement the corrective action the
agency promised in response to the initial protest--providing specific
information about the basis for removal of its product from the AID. We
disagree. On November 16, prior to the date set for filing the agency
report, DSCR withdrew the RFQ and advised that it would take corrective
action by notifying Waltron of the reasons its product was removed from
the AID. DSCR implemented its corrective action as promised on January 4,
the date Waltron received DSCR's notification letter. While DSCR did issue
another RFQ just before sending its notification letter to Waltron, which
was the basis of Waltron's second protest, the agency promptly withdrew
that RFQ and reasonably explained that this issuance was due to an error
with DSCR's automated procurement system. Since Waltron received the
notice of its product's removal from the AID less than 2 months after the
agency advised that it would take correction action, we see no basis to
regard the agency's action as unduly delayed.
Waltron also argues that DSCR's corrective action, as implemented in the
January 4 letter, was inadequate because it did not specifically inform
Waltron why its product had been removed. Again, we disagree. DSCR's
January 4 letter adequately explained the reason for removal--chemical
incompatibility with the approved product. The letter further advised that
since Waltron's product did not meet the Navy's requirements and had been
removed from the AID, Waltron would have to become approved as a source of
supply for the item to be placed back on the AID, which would require
testing. The letter concluded with an explanation of the steps required
for Waltron's product to become approved. In sum, the letter clearly
constituted adequate, and timely, implementation of the corrective action
promised in response to Waltron's protest.
The request for a recommendation that the agency reimburse Waltron's
protest costs is denied.
Gary L. Kepplinger
General Counsel
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[1] DLA is conducting this procurement on behalf of the Navy, the user
activity.
[2] FAR sect. 9.207(b) requires an agency, after removal of a product or
source, to promptly notify the affected parties, providing specific
information about why the product or source no longer meets the
qualification requirements.