TITLE: B-298766, R&D Dynamics Corporation, December 11, 2006
BNUMBER: B-298766
DATE: December 11, 2006
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B-298766, R&D Dynamics Corporation, December 11, 2006
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: R&D Dynamics Corporation
File: B-298766
Date: December 11, 2006
William T. Welch, Esq., Barton, Baker, McMahon & Tolle, LLP, for the
protester.
Vera Meza, Esq., U.S. Army Materiel Command, for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester's challenge to agency's decision not to fund its proposal under
Phase II of a solicitation issued under the Department of Defense Small
Business Innovation Research program is denied, where the agency
reasonably evaluated the protester's proposal and ranked it 21^st out of
34 proposals received, and funding was available only for the 19 highest
ranked proposals.
DECISION
R&D Dynamics Corp. (RDDC) protests the decision of the Department of the
Army not to fund its Phase II proposal under the Department of Defense
(DOD) Small Business Innovation Research (SBIR) program solicitation No.
FY06.1.
We deny the protest.
The SBIR program is conducted pursuant to the Small Business Innovation
Development Act, 15 U.S.C. sect. 638 (2004), which requires certain
federal agencies to reserve a portion of their research and development
funds for awards to small businesses. In addition to advancing the role of
small businesses and the participation of minority and disadvantaged
persons in research and development, the objectives of DOD's SBIR program
include stimulating technological innovation in DOD's critical technology
area and increasing the commercial application of DOD-supported research
and development results. The program has the following three phases: Phase
I is to determine the scientific, technical, and commercial merit of
ideas; Phase II is the principal research and development effort resulting
in a well-defined, deliverable prototype; and in Phase III, the small
business seeks to obtain private and public funding to develop the
prototype into a viable commercial product for sale to military and/or
private sector markets. Only those firms that are awarded Phase I
contracts are eligible to participate in Phases II and III. Solicitation
No. FY05.2, paras. 1.1, 1.2.[1]
The Phase I solicitation included Army "Topic" No. A05-035, "Revolutionary
Non-Contacting Gas Path Seals for Improved Turbine Engine Performance."
The objective of this topic was to "[d]esign and develop innovative,
non-contacting, compliant gas path seals that improve turbine engine
performance for military and commercial jet engine applications."
Supplemental Agency Report (SAR) (Nov. 13, 2006), encl. 2. RDDC received a
Phase I award under this topic for its Phase I proposal, "Foil Face Seal
for Advanced Gas Turbine Engines."
On March 7, 2006, RDDC and other Phase I contractors were invited by the
U.S. Army Research Laboratory to submit a proposal for Phase II.
Contracting Officer's Statement at 3; Agency Report (AR), Tab E. These
Phase II proposals were considered for award in the Army's "Advanced
Propulsion Technologies" technology area. Contracting Officer's Statement
at 4. The Phase II proposals were to be evaluated for "overall technical
merit" based on the following three factors, listed in descending order of
importance:
a. The soundness, technical merit, and innovation of the proposed
approach and its incremental progress toward topic or subtopic solution.
b. The qualifications of the proposed principal/key investigators,
supporting staff, and consultants. Qualifications include not only the
ability to perform the research and development but also the ability to
commercialize the results.
c. The potential for commercial (Government or private sector)
application and the benefits expected to accrue from this
commercialization.
AR, Tab G, Solicitation No. FY06.1 Evaluation Criteria. Other factors that
could be considered in the Phase II selection process include a commitment
for Phase III follow-on funding, the possible duplication with other
research or research and development, program balance, budget limitations,
and the potential of a successful Phase II effort leading to a product of
continuing interest to DOD. Id.
The evaluation was conducted in two "tiers." First, a technical evaluation
team (TET), consisting of personnel representing participating
organizations, performed a technical assessment and forwarded the "best"
proposals for a second level of review. This second level of review was
performed by a panel of senior level Army scientists and technologists,
called "technical area chiefs" (TAC), who together were the source
selection board (SSB). The SSB conducted its review "from an Army-wide
perspective" and recommended to the source selection authority (SSA) which
proposals should be funded. Contracting Officer's Statement at 2-3.
With regard to RDDC's proposal, the TET identified a number of strengths
and weaknesses under each technical factor. For the first factor
(technical merit), the TET identified several strengths, including the
"innovative seal-bearing configuration" and the benefits of "reduced
specific fuel consumption, increased power density, and increased seal
life." The TET also identified a number of weaknesses involving the
failure to address or lack of detail provided in several key areas,
including the material used for the "top foil coating," the incorporation
of a "fail safe sealing labyrinth" or similar seal into engine design, and
the extent of the modifications and test program. AR, Tab I, TET Summary,
at 1.
For the second factor (qualifications), the TET found strengths in the
"excellent qualifications" of RDDC's principal investigator and the person
who would lead RDDC's effort, as well as the "unique credentials" and
capability of the "[p]rincipal's team." However, the TET also found that
the responsibilities of Rolls-Royce (one of RDDC's team members) were not
clearly defined, and the proposal was "unclear" and that "[m]ore detail is
needed" regarding modification and testing. Id. at 2.
For the third factor (commercial potential), the TET found strengths in
RDDC's pursuit of partnerships with six gas turbine manufacturers to
develop and produce the next generation of gas turbines, including a
partnership with Rolls-Royce, which would provide support and testing for
the foil face seal on an endurance engine. However, the TET also found
weaknesses because the proposal did not make clear whether Rolls-Royce
would be "interested" in the Phase III effort, the proposal "lack[ed]
description" of cost benefits and how the foil face seal will enter
production if tests results are successful in Phase II, and the
commercialization portion of the proposal lacked sufficient information
about gas turbomachinery and potential savings. Id.
The SSB concurred with the TET's findings and provided the following
"overall comment":
[RDDC's] proposal is judged to be of high quality, but not of the
highest quality when all evaluation criteria are considered. Some items
of particular note include the following[:] The commercialization
portion of the proposal needs to address a broader class of gas
turbomachinery and to quantify advantages of the seal-bearing concept as
well as the potential savings in fuels, environmental impact, and system
cost. From a technical standpoint, better justification [is] needed from
representative standpoints such as: life projections (including
short-life bearing use), fail safe labyrinth or similar seal integration
into engine design, top foil coating identification (described in
proposal as "green," but no mention of the coating material [is] given).
Finally, specific details on the extent of the modifications and test
program of the proposer's test rig as it is integrated into major
manufacturer's hardware is lacking.
AR, Tab J, SSB Comments, at 1.
The SSB developed an "order of merit list," which ranked all 34 proposals
submitted for the technology area. RDDC's proposal was ranked 21^st out of
34. Based on the findings of the SSB, the SSA selected only the 19 highest
ranked proposals for funding. While RDDC's proposal was sufficiently
highly ranked to be eligible for an award, the number of awards was based
on the availability of funding and there was insufficient funding to make
additional awards. Contracting Officer's Statement at 4.
After receiving a detailed explanation of its proposal strengths and
weaknesses, RDDC filed an agency-level protest challenging the assessment
of weaknesses. That protest was denied by the Army, and RDDC timely
protested to our Office. RDDC complains that the agency's evaluation of
its proposal was "inconsistent with the stated evaluation criteria"
because the assessed weaknesses were inconsistent with its proposal and,
in any event, were "far exceed[ed] (in quantity and quality)" by its
proposal strengths.[2] Protest at 7; Protester's Comments at 2.
Where an agency is conducting an SBIR procurement, it has substantial
discretion to determine which proposals it will fund. RDAS Corp.,
B-294848, Dec. 23, 2004, 2004 CPD para. 253 at 2. In light of this
discretion, our review of an SBIR procurement is limited to determining
whether the agency violated any applicable regulations or solicitation
provisions, or acted in bad faith. Id.; R&D Dynamics Corp., B-285979.2,
Nov. 14, 2000, 2000 CPD para. 193 at 4. Here, we have no basis to object
to the agency's decision not to select RDDC's proposal for funding.
RDDC disputes the weaknesses found under the first technical factor
(technical merit). It asserts that weaknesses regarding the top foil
coating material, failure to incorporate a fail safe sealing labyrinth or
similar seal into engine design, and lack of information regarding the
extent of modifications are "putting the cart before the horse," since
these will be determined during Phase II development. Protester's Comments
at 3. However, the agency provided reasonable explanations for these
weaknesses, and showed how the weaknesses demonstrated concern over the
soundness of RDDC's approach, which was what the agency was required to
evaluate under this factor. For example, the agency asserts that it was
unable to fully evaluate the seal design and manufacture in the context of
the stated goals because "little is known of the [top foil] coating (i.e.,
material, thickness, method of application, temperature range capability,
wear characteristics, adherence to the base material, etc.) other than it
is `green.'" SAR (Oct. 23, 2006), encl. 1, Statement of TET Team Chief,
at 2. The agency was also concerned with the proposal's failure to address
fail safe seals, since these are necessary to "prevent engine performance
loss," which could "have [a] negative impact to a mission in progress."
Id. at 2-3. RDDC's failure to adequately address modifications was
determined to be a weakness because the information "aid[s] in mitigating
risks to the successful test of the foil face seal, risks to cost, and
risks to schedule." Id. at 3. Although RDDC disagrees with these
assessments, it has not shown them to be unreasonable.[3]
RDDC also complains that the agency unfairly assessed a weakness under the
second technical factor (qualifications) because the "exact
responsibilities of the in-kind participation of Rolls-Royce are not
clearly defined" in the proposal. RDDC asserts that this information was
addressed in its proposal through a statement that "the full size seal
will be tested . . . at Rolls-Royce['s] facility" and a discussion of the
testing and engine modifications that will be performed. Protester's
Comments at 3. The agency acknowledges that the RDDC's proposal included
this information, but notes that the proposal did not address who at
Rolls-Royce will be responsible for the overall test program and the
engine modifications. As the agency explains, the qualifications factor
was to evaluate the qualifications of principal or key investigators and
consultants, and since Rolls-Royce was the "technical point of contact
with overall responsibility for the test program as well as [for the
engine modifications] that will test the foil face seal," in our view, the
lack of detail about Rolls-Royce's responsibilities was reasonably
evaluated under this factor and determined to be a weakness. SAR (Oct. 23,
2006), encl. 1, Statement of TET Team Chief, at 3-4.
RDDC asserts that the weakness assessed under the third technical factor
(commercial potential) that the proposal was "unclear if Rolls-Royce is
interested in a Phase III effort" see AR, Tab I, TET Summary, at 2, was,
in fact, addressed in its proposal in that a "commitment letter" from
Rolls-Royce was included with RDDC's proposal. However, this letter is
described in RDDC's proposal only as a "letter of support" and states only
that Rolls-Royce will provide "continuing support" for Phases II and III,
without any further explanation of the level of support that will be
provided. See AR, Tab H, RDDC's Proposal, at 36-37. Thus, we find that the
agency reasonably remained concerned about the extent of Rolls-Royce's
interest in Phase III. See SAR (Oct. 23, 2006), encl. 1, Statement of TET
Team Chief, at 5.
RDDC complains that another weakness assessed under the third technical
factor (commercial potential) is inconsistent with a recognized proposal
strength. The weakness was that RDDC did not sufficiently describe the
cost benefit to an engine company or the potential savings in fuel and
environmental impact. AR, Tab I, TET Summary, at 2. RDDC asserts that the
assessed weakness is inconsistent with a recognized proposal strength that
the agency found under the first technical factor: that the foil face
seals could result in "savings of over 0.5 billion gallons of fuel."
Protester's Comments at 4; AR, Tab I, TET Summary, at 1. The agency
explains that its comment about fuel savings was based on an evaluator's
attempt to "extrapolate" savings that could occur 15 to 20 years in the
future after the technology was fully developed, and was not based on any
analysis by RDDC in its proposal; it was the lack of detail supporting
cost savings that led the agency to assess a weakness.[4] See SAR (Oct.
23, 2006), encl. 1, Statement of Team Chief at 4; AR, Tab I, TET Summary,
at 2. We find the agency's evaluation in this regard reasonable.
Finally, RDDC complains that the "quantity and quality" of strengths
recognized by the agency far outweigh the identified proposal weaknesses.
Protester's Comments at 2. However, our review of the record shows that
the agency reasonably considered the strengths and weaknesses in
accordance with the evaluation criteria and determined that RDDC's
proposal was not among the highest ranked proposals.
While RDDC disagrees with the agency's conclusions, it has not shown them
to be unreasonable. See Noble Solutions, B-294393, Sept. 10, 2004, 2004
CPD para. 197 at 4.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Solicitation No. FY05.2 described the SBIR program phases and sought
proposals for Phase I.
[2] RDDC also protested the relative ranking of proposals to our Office.
That information was made available to RDDC during its debriefing, but was
not protested in its agency-level protest. Because the protest to our
Office was not filed within 10 days of when the information was first made
known, or included with its agency-level protest, the protest ground is
untimely now. See 4 C.F.R. sect. 21.2(a)(2), (a)(3) (2006).
[3] RDDC objects to our consideration of statements submitted by the Team
Chief and Chief Scientist during the course of this protest, and comments
of the SSB contained in the record, on the grounds that they were not
created contemporaneously with the evaluation. Protester's Comments at 4;
Protester's Supplemental Comments at 1. However, our Office will consider
post-protest explanations that provide a detailed rationale for
contemporaneous conclusions of the agency, so long as the explanations are
credible and consistent with the contemporaneous record. Manassas Travel,
Inc., B-294867.3, May 3, 2005, 2005 CPD para. 113 at 3. The post-protest
statements and comments complained of here simply provide additional
detail regarding the weaknesses identified in RDDC's proposal during the
evaluation and are consistent with the contemporaneous record.
Accordingly, we have considered these statements in determining that the
decision not to fund RDDC's proposal was reasonable.
[4] Although the record also shows that RDDC projected $750 million of
market "potential" for the foil face seals in its proposal, the firm
provided no explanation to support this. See AR, Tab H, RDDC Proposal, at
38.