TITLE: B-298297, Lakota Technical Solutions, Inc., August 4, 2006
BNUMBER: B-298297
DATE: August 4, 2006
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B-298297, Lakota Technical Solutions, Inc., August 4, 2006

   Decision

   Matter of: Lakota Technical Solutions, Inc.

   File: B-298297

   Date: August 4, 2006

   Keith W. Fitch for the protester.

   Andrew C. Saunders, Esq., and Ellen Lynch, Esq., Naval Sea Systems
   Command, for the agency.

   Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
   of the General Counsel, GAO, participated in the preparation of the
   decision.

   DIGEST

   1. Protest alleging that firm that developed technical data package (TDP)
   for item to be procured has an unfair informational advantage over other
   competitors is denied where record establishes that TDP contained
   sufficient information to permit prospective offerors to formulate
   proposals.

   2. A competitive advantage that derives from an offeror's previous
   performance under a government contract is not an unfair competitive
   advantage that agency is required to neutralize.

   DECISION

   Lakota Technical Solutions, Inc. protests the terms of request for
   proposals (RFP) No. N00024-06-R-5112, issued by the Naval Sea System
   Command for Signal Data Processor (SDP) assemblies. Lakota objects to the
   unwillingness of the agency to warrant the quality and completeness of
   certain items in the RFP's technical data package (TDP).

   We deny the protest.

   BACKGROUND

   In 2004, the Navy issued a task order to Science Applications
   International Corporation (SAIC) for the design and development of an
   improved (i.e., smaller, lighter, and less costly) version of its
   Cooperative Engagement Capability (CEC) system, of which the SDP assembly
   is a core component.[1] The order required SAIC to provide "all of the
   necessary information to fully describe the hardware product and to
   support life cycle maintenance of the hardware product by the Government."
   SAIC Task Order, sect. 3.3.4.3. In addition, the order required SAIC to
   build and deliver four production representative terminal units to the
   government for test and evaluation. Id. sect. 3.3.4.1.

   In 2005, SAIC completed the design and development of the SDP assembly
   (which, according to the agency, consists of a rectangular box containing
   13 circuit card assemblies) and delivered to the Navy documentation
   consisting of schematics, block diagrams, parts lists, unit
   specifications, wiring diagrams and what the agency describes as "other
   information necessary to conduct a `build to print' competition for the
   fabrication, assembly and test of the CEC SDP assembly." Agency Report
   at 4. In November of 2005, the Navy conducted a physical configuration
   audit of the SAIC design. According to the agency, a part of that review
   was to ensure that the TDP adequately described the equipment to be built
   under the RFP at issue in this protest. The audit resulted in the Navy's
   requiring multiple corrections to the documentation, which SAIC furnished
   over the course of the next few months.

   The Navy issued the RFP on March 23, 2006. The solicitation contemplated
   award of a fixed-price contract to the offeror whose proposal represented
   the best value to the government, with proposals to be evaluated on the
   basis of the offeror's production and engineering capabilities, past
   performance, and price. The RFP's statement of work required fabrication
   of the data processors in accordance with the TDP provided as
   government-furnished information (GFI). The RFP, as amended, set the
   closing date for receipt of proposals as June 15. Amend. 2 at 2.[2]

   DISCUSSION

   Lakota protested to our Office on May 10, objecting to the agency's
   failure to furnish as part of the TDP certain information generated by
   SAIC in its development of the improved SDP. In particular, the protester
   objected to the agency's failure to furnish "electronic formats of
   schematics and computer aided design artifacts." Protest at 2. Lakota
   complained that the failure of the agency to furnish this information
   would result in an unequal competition because competitors of SAIC would
   be required to include the cost of developing this information in their
   proposed prices, whereas SAIC had already developed the information at
   government expense. Similarly, the protester objected to the agency's
   failure to provide equations or software for programmable devices, arguing
   that competitors of SAIC would be required to develop this information,
   whereas SAIC would not be. Lakota further objected to the agency's failure
   to furnish as part of the RFP vendor information obtained by SAIC in its
   performance of its task order. The protester also complained that while
   the agency had permitted prospective offerors to view the components of a
   sample SDP, the components had been placed in heavily tinted electrostatic
   packaging that had prevented prospective offerors from seeing component
   information, part numbers, mechanical layout, and custom fabrication.

   The Navy updated the TDP in response to Lakota's protest. As explained
   below, the updated version included the "native" versions of "gerber
   files," as well as all available information regarding vendors used by
   SAIC. The Navy also amended the RFP to include field programmable gate
   array software as GFI and improved visual access to the sample assembly by
   removing the circuit cards from the electrostatic packaging.

   With regard to the gerber files, the agency explained that a gerber file
   is a standard file format used by printed circuit board (PCB) fabrication
   firms to, among other things, drill holes, mill, and cut the PCBs. The
   Navy further explained that the gerber files released in the original TDP
   were in a PDF "read only" format, whereas the updated TDP provided the
   gerber files in a "native format" that manufacturers using the same
   software format as SAIC could use to program their machines for
   manufacture of the PCBs. In other words, as we understand the agency's
   explanation, the gerber files released in the original TDP defined the
   required characteristics of the circuit boards, whereas the native gerber
   files described the particular manufacturing process that SAIC had used to
   create them.

   In its report, the Navy argued that it had produced all relevant
   documentation in its possession regarding the SDP assembly and that the
   TDP was adequate to manufacture the item. In support of its position, the
   agency submitted a declaration from the Navy engineer responsible for the
   CEC Pre-Planned Product Improvement (P3I) project, which advised that he
   was not aware of any defects in the TDP and associated
   government-furnished equipment and information that would "negatively
   impact an offeror's ability to provide a bid on [RFP] N00024-06-R-5112 and
   ultimately build the Signal Data Processor assembly." Declaration of the
   Deputy Director for Systems Engineering, Integrated Warfare Systems, June
   8, 2006. The agency asserted that the real crux of Lakota's protest was
   not that the TDP was inadequate, but rather that SAIC would have a
   competitive advantage over other offerors based on its prior experience in
   developing and manufacturing the item; such an advantage, the agency
   maintained, was not an advantage that the agency was required to
   neutralize.

   In responding to the agency report, Lakota conceded that the agency had
   addressed two of its initial complaints by making the field programmable
   gate array software available as GFI and by improving visual access to the
   sample assemblies through removal of the electrostatic packaging. The
   protester maintained that the agency had not released all appropriate
   schematics and drawings, however, and that, as a consequence, the RFP
   remained defective. Lakota cited as evidence that the agency had not
   released all available documentation the following offeror question and
   agency response from the RFP:

     QUESTION 74: As the RFP is described as a "build-to-print" solicitation,
     the gerber files and any other electronic design material associated
     with the TDP must be provided to the organizations interested in this
     solicitation. Otherwise, the solicitation is defective, because SAIC has
     an unfair competitive advantage. SAIC was paid for engineering services
     to develop the P3I terminal (i.e., the CEC SDP which is on display . .
     .) under [the preceding task order]. Thus, they alone have the
     information in order to build-to-print. . . . it is clear that the
     government's intent is to have the contractor build CEC SDPs that are
     identical to the ones produced under the P31 Terminal effort. Without
     the gerber files and any other electronic design material that provides
     the details for how each circuit card assembly was manufactured for the
     unit on display, all vendors other than SAIC will be forced to incur
     [non-recurring engineering] charges to redevelop this material, which
     may result in the produced units not being "built-to-print."

     ANSWER 74: The Government will release available Gerber files and vendor
     list with the updated TDP (Library Set). The Government does not warrant
     the quality or completeness of the Gerber files or the vendor list.
     These files and the list are being provided for guidance only. The
     government will provide any available electronic design information with
     the updated TDP (Library Set). The government does not warrant the
     quality or completeness of the available electronic design information.

   Question and Answers Set #5, Agency Report, Tab 7. According to the
   protester, the agency's unwillingness to warrant the quality and
   completeness of the gerber files, vendor list, and electronic design
   information demonstrates that the agency is aware that SAIC has
   documentation that it is not furnishing.[3]

   We see no basis to conclude that the agency's refusal to warrant the
   quality and completeness of the native gerber files and the electronic
   design information pertaining to manufacture of the circuit cards
   demonstrates that the agency is aware of the existence of documentation
   that it is not providing or otherwise casts doubt on the adequacy of the
   TDP. As the agency explains, the requirement here was that the item
   produced conform to the schematics, block diagrams, parts lists,
   specifications, wiring diagrams, and other information in the TDP; the
   Navy did not require offerors to use a specific manufacturing process to
   produce the item. As a result, given that the native gerber files and the
   electronic design information relate to the specific manufacturing
   software SAIC used to build the assembly, and would not ordinarily be
   included in a TDP of this type, the fact that the Navy did not "warrant"
   this information has no bearing on the adequacy of the TDP. Moreover, even
   assuming that SAIC is in possession of information pertaining to
   manufacture of the SDPs that it has not furnished to the agency (and that,
   accordingly, has not been made available to other prospective offerors),
   the record nonetheless establishes that the TDP contained sufficient
   information to permit prospective offerors to formulate proposals. In this
   regard, as noted above, the Navy engineer responsible for the CED P3I
   project attested that he is unaware of any defects in the TDP that would
   impair the ability of prospective offerors to prepare proposals and build
   the item, and the protester has offered no specific evidence to question
   the agency's position. Also, the agency reports that more than one offer
   was received in response to the RFP.[4]

   There remains the question of whether the Navy's unwillingness to warrant
   the quality and completeness of the information furnished in the TDP
   regarding SAIC's process for manufacturing the circuit boards gives SAIC
   an unfair competitive advantage over other prospective offerors who will
   have to incur the expense of verifying the correctness and completeness of
   the information furnished and/or developing their own process for
   manufacture of the circuit boards. In our view, while SAIC's access to
   information that other offerors will have to develop gives it a
   competitive advantage, it is not an unfair competitive advantage and thus
   is not one that the agency is required to neutralize. See Government Bus.
   Servs. Group, B-287052 et al., Mar. 27, 2001, 2001 CPD para. 58 at 10.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] The Navy explains that the CEC system greatly enhances the air defense
   capabilities of Navy ship, aircraft and land-based units by sharing radar
   and other data among participating units in a manner that improves
   situational awareness and enables longer range engagements. The agency
   notes that, for example, the CEC system allows a ship to fire on a hostile
   target before it crosses that ship's radar horizon, thereby enabling the
   ship to intercept a target at the maximum possible range of its weapons.

   [2] At the time Lakota filed its protest, closing was set for May 22; on
   May 17, following receipt of the protest, the agency amended the RFP to
   extend the closing date to June 15.

   [3] To the extent that in its comments on the agency report, the protester
   alleged a conflict of interest on SAIC's part in competing under a
   solicitation for which it had prepared the TDP, a protester's allegation
   that another firm has an impermissible conflict of interest, and thus must
   be precluded from competing under a solicitation, is generally premature
   when filed before an award has been made. REEP, Inc., B-290688, Sept. 20,
   2002, 2002 CPD para. 158 at 1-2. In any event, the Federal Acquisition
   Regulation (FAR) does not require the exclusion of a contractor that has
   developed an item from a competition for production of the item. See FAR
   sect. 9.505-2(a)(3) ("In development work, it is normal to select firms
   that have done the most advanced work in the field. These firms can be
   expected to design and develop around their own prior knowledge.
   Development contractors can frequently start production earlier and more
   knowledgeably than firms that did not participate in the development, and
   this can affect the time and quality of production, both of which are
   important to the Government. In many instances the Government may have
   financed the development. Thus, while the development contractor has a
   competitive advantage, it is an unavoidable one that is not considered
   unfair; hence no prohibition should be imposed."). See also FAR
   sect. 9.508(c) ("Company A develops new electronic equipment and, as a
   result of this development, prepares specifications. Company A may supply
   the equipment.")

   [4] Because the procurement is still ongoing, information regarding the
   specific number and identity of the offerors was not furnished to the
   protester and is not discussed in this decision.