Final_Redacted_Version_2019-12-11_NEW_PROTEST_FA853419R001.pdf

December 11, 2019

VIA EPDS

Government Accountability Office

Office of the General Counsel

ATTN: Procurement Law Control Group

441 G Street, N.W.

Washington, D.C. 20548

Re: Protest of AAR Mobility Systems

Solicitation: FA8534-19-R-0001

Agency: Department of the Air Force, Air Force Military Command, Robins Air

Force Base

Dear Sir or Madam:

AAR Manufacturing Inc., dba AAR Mobility Systems (“AAR”), protests the ground rules and terms of the above solicitation based on (1) the immitigable organizational conflicts of interest of one of the potential competitors for this procurement, (2) the RFP’s and (3) the Air Force’s use of a best value process that ignores technical capability in the tradeoff process, converting the procurement into a de facto, and improper, LPTA competition. The 463L Air Cargo Pallet is part of the Air Force’s “463L” cargo handling system. The Air Force has more than 200,000 pallets of current design, the

HCU-6/E, in use at any given time.

. The Air

Force contracted with a university research institute to design a replacement, an all-aluminum pallet. Key to that development effort was an aluminum extrusion company, Taber Extrusions, LLC (“Taber”), that worked with the university to design and fabricate the all-aluminum core of the new pallet. This procurement is a follow-on production contract of that new design.

The ground rules and terms of this competition are fundamentally flawed. The Air

Force’s decision to allow the development contract extrusion company, Taber, to compete for this procurement skews the entire competition. In particular, Taber had the opportunity to tailor the requirements and specifications for the pallet to its particular capabilities and had unequal access to a vast array of knowledge about the Air Force’s requirements from its performance of the development contract. The Air Force further skewed the competition by unnecessarily

And, finally, the Air

Force compounded its errors by improperly converting the technical evaluation criteria into a lowest-price technically acceptable evaluation, which ignores any technical advantages proposed by offerors. This evaluation scheme eliminated the ability of companies with superior technical abilities to receive credit in the evaluation scheme, where it is clear from the RFP’s requirements

Paul R. Hurst

202 429 8089 phurst@steptoe.com

1330 Connecticut Avenue, NW Washington, DC 20036-1795 202 429 3000 main 202 429 3902 facsimile www.steptoe.com

Procurement Law Control Group that

As a result, for the reasons discussed below, GAO should sustain AAR’s protest and recommend that the Air Force prohibit Taber from competing for the production contract, amend the past performance relevance standards to expand competition, and amend the technical evaluation criteria to allow the Air Force to realize

.1

I. INTERESTED PARTY STATUS

AAR is an “interested party” as defined in 4 C.F.R. § 21.0(a) because AAR is a prospective offeror in this procurement whose direct economic interest would be affected by the award of this contract.

II. TIMELINESS AND AUTOMATIC CICA STAY

On August 19, 2019, the Air Force issued the above-identified solicitation. On

November 18, 2019, the Air Force issued Amendment 0005 to the RFP, extending the due date for the submission of proposals to December 12, 2019. AAR timely submits this protest prior to the due date for the submission of proposals. See 4 C.F.R. § 21.2(a)(1).

This protest is also timely filed for purposes of triggering the automatic suspension of award required by 31 U.S.C. § 3553(c) and FAR 33.104(b) because it is filed prior to the date set for submission of proposals. Accordingly, AAR respectfully requests that GAO promptly notify the Air Force of this protest and the suspension of award pursuant to 4 C.F.R. § 21.6. Pursuant to 4 C.F.R. § 21.1(e) and the service of protest clause in the RFP, AAR is also simultaneously furnishing a complete copy of this protest via email to the Contracting Officer at the address below:

Melissa Broaddus and Timothy G. Hudson

Contracting Officer

MOBILITY, AFLCMC/WNKAC

235 BYRON ST STE 19A

BLDG 300 CML PHN 478 222 1904

ROBINS AFB GA 31098-1670

Email: melissa.broaddus@us.af.mil and timothy.hudson@us.af.mil

III. BACKGROUND

The Next-Gen Pallet procurement seeks offers to produce a newly designed, all aluminum replacement for the Air Force’s aging inventory of System 463L, HCU-6/E Air Cargo

Pallets. The current 463L pallet was designed in the 1950s and fielded in the early 1960s. While

1 AAR Mobility Systems, a division of AAR Manufacturing, Inc., is located at 201

Haynes Street, Cadillac, Michigan 49601 and can be reached by telephone at 231-779-4880 .

Please address all future communications concerning this protest to undersigned counsel.

mailto:melissa.broaddus@us.af.mil mailto:timothy.hudson@us.af.mil the 463L has been the workhorse of US military cargo operations for more than five decades, it needs to be updated

. By 2014, the Air Force began making plans for development and production of a new, all aluminum replacement for the 463L.

A. The Next-Gen Pallet Development Contract

In January 2015, the Air Force announced that it had awarded the University of Dayton

Research Institute (“UDRI”) a contract to develop a next-generation, all-aluminum cargo pallet for the Department of Defense’s transport aircraft fleet. The development contract, awarded under the Air Force Research Laboratory’s Rapid Innovation Fund (“RIF”) program, required

UDRI to design, manufacture, and qualify a Next-Gen extruded, all-aluminum, friction stir welded cargo pallet (the “Next-Gen Pallet”). Under its development contract, UDRI was required to “deliver all necessary engineering technical data along with a government-owned procurement data package, as well as all recommended updates to the cargo pallet technical order.” Exhibit 7 at ¶ 2.0 (USAF-UDRI Contract No. FA8519-14-C-0004, “Innovative

Manufacturing Of Next-Gen All-Aluminum 463l Cargo Pallet And Additional Support For 463L

Cargo Pallet Assets And Subsystems,” Statement of Work (hereinafter “Next-Gen Pallet

Development SOW”)). The development contract Statement of Work (“SOW”) further provided that UDRI would test the pallet in coordination with government officials, conduct government briefings regarding the re-design, conduct field testing of the pallet, prepare the Technical Data

Package (“TDP”) and Detailed Specification MIL-DTL 27443 for pallet production and testing, and draft the drawings to be used in the future procurement of the Next-Gen Pallet. See id. at ¶¶

4.2, 4.4, 4.5, 4.7 (UDRI development contract SOW).

UDRI subcontracted with Taber, https://taberextrusions.com/, an aluminum extrusion and metal fabrication company to assist in the development contract and requirements definition for this procurement. Taber is a leading U.S. aluminum extruder that utilizes one of the largest aluminum extrusion presses in the nation. It markets itself as owning extrusion presses that are capable of producing higher quality, wider, and more complex, multi-void aluminum extrusions than many of its competitors. Among other tasks, the UDRI development contract required

Taber’s involvement in the design, extruding, coordination with a Friction Stir Welding contractor, testing, and other design and manufacturing review processes for the Next-Gen

Pallet. See id. at ¶ 4.1. The contract specifically required Taber’s involvement in the requirements definition process for the current procurement. See id. (“The Contractor shall select and subcontract with an aluminum extrusion company to fabricate the extrusion dies and extrude the Next-Gen pallet subcomponents. . .. The Contractor shall work with these subcontractors to develop and define the requirements and shall produce a minimum of six Next-

Gen cargo pallets for Test & Evaluation/Qualification efforts.”).

As a result, both UDRI and Taber were directly and extensively involved in the development of the specifications underlying this procurement.

https://taberextrusions.com/

B. Request for Proposals

On August 19, 2019, the Air Force issued a solicitation for the manufacturing and production of the 463L Air Cargo Pallet, NSN 1670-01-670-0637.2 According to the Statement of Work (“SOW”), the pallet is used “extensively” on the C-130, C-141, C-5, and C-17 aircraft is

“Low Altitude Parachute Extraction System (LAPES) capable” on the C-130 aircraft. See

Exhibit 2, SOW, ¶ 1. The contractor is required to manufacture and produce the “463L Pallet” in accordance with a Detail Specification, MIL-DTL-27433G, drafted by UDRI, and the

Government Technical Data Package (TDP) (drawing 201993426). See id.; Exhibit 5 at 1-2, MIL-DTL 27443G (Detail Specification).

The RFP provides that the Air Force anticipates award of a 10-year Indefinite Delivery

Requirements contract, under which all work will be accomplished using a Firm-fixed Price

Economic Adjustment contract arrangement. See Exhibit 1, RFP, § B, PDF p. 3. The anticipated base contract is for 18 months, and includes first article production and related activities. The

RFP anticipates eight 12-month option periods and one six-month option period, which provide for low rate and full rate production, and related activities; and options for surge quantities starting in Option II.

The contractor will be required to provide six first articles for first article testing within

12 months of contract award, and will be required to deliver them to the United States Air Force for testing in accordance with MIL-DTL-27443; following first article approval and start of production, contractors shall utilize a subset of the first article test procedures for production testing. See Exhibit 2, SOW, ¶¶ 3.5.1.1, 3.5.3.1; RFP, § B at PDF p.4. Following First Article approval, the contractor must provide a monthly lot sample totals test report of the inspected pallets. See id., ¶ 3.5.3. In terms of design, the SOW provides that “[t]he original design function of the end-item and parts shall not be changed, modified, or altered. Only the manufacturing procedure stated in [the SOW] shall be used to produce the pallet. Any deviations shall be authorized by the Procuring Contracting Officer.” Exhibit 2, SOW, ¶ 1.0

(emphasis added).

1. Basis for Award and Evaluation Method

The RFP provides that the Air Force will use four evaluation factors: (1) Technical, (2)

Past Performance, (3) Small Business Participation, and (4) Cost/Price, and utilize a modified tradeoff source selection process for a best value award decision. Exhibit 4, RFP, Amend 0003, §

M.I.A. The RFP advises offerors that the Air Force will determine the technical acceptability of each offeror’s proposal, and “[f]or those offerors who are determined to be technically acceptable and have acceptable Small Business Participation, tradeoffs may be made between past performance and cost/price, with past performance considered approximately equal to cost/price.” Id. The RFP also noted “[h]owever, Factor IV Cost/Price is an important consideration in the best value award decision.” Id., M.II.A.2.a. The RFP advised offerors that a tradeoff between past performance and cost/price “may result in an award to a higher rated, higher priced offeror where the decision is consistent with the evaluation factors and the Source

2 The RFP and amendments are attached as Exhibit 1.

Selection Authority (“SSA”) reasonably determines that the superior past and present performance of the higher priced offeror outweighs the cost difference.” Id., M.I.A.

a. Technical Approach

Under the Technical Factor – the Air Force plans to evaluate for acceptability two subfactors: (1) Pallet Production Approach and (2) Manufacturing Capability for Principle Pallet

Components. Under subfactor one, the Air Force will evaluate whether an offeror’s proposal provides “an acceptable detailed narrative discussion and supporting documentation that adequately demonstrates that the offeror’s technical approach will meet the SOW paragraph requirements.” Id., M.I.C.I.i. Specifically, the Air Force will evaluate whether the offeror’s technical proposal demonstrates a clear understanding of the requirements and contains adequate details needed to achieve a successful production program, including how the offeror will adequately increase production capacities from qualification to Initial-Rate Production, to ultimately Full-Rate Production, and how the offeror will satisfactorily perform Surge

Requirements, in accordance with the SOW.

Under Technical Subfactor 2, the Air Force will evaluate whether the offeror has provided sufficient detail and supporting documentation demonstrating that the offeror’s technical approach meets the Technical Data Package (TDP) and Military Detail Specification.

Specifically, the Air Force will evaluate the offeror’s approach to satisfactorily meet the

Aluminum Extrusion, Friction Stir Welding, and metal machining requirements of drawing

201993246 in the quantities and technical tolerances required, including:

• Equipment model numbers(s), description, and performance specifications

• Calculations of equipment capability

• Explanations of manpower and floor space resources required to meet the necessary production capacity.

Id.

The Air Force plans to evaluate the acceptability of the offeror’s technical approach under both Subfactors.

In order to be considered awardable, an offeror’s technical approach must be assigned an “Acceptable” technical rating:

Adjectival Rating Description

Acceptable Proposal meets the requirements of the solicitation

Unacceptable Proposal does not meet the requirements of the solicitation

b. Past Performance

Under the Past Performance factor, the Air Force will evaluate offerors’ (and critical subcontractors’) ability to successfully accomplish the proposed effort based on the offeror’s demonstrated present and past work record. Specifically, the Air Force will evaluate the recency and relevancy of the offeror’s, and any critical subcontractor’s, four submitted past performance efforts, the source of the information, the context of the data, and general trends in the contractor’s performance. The RFP defines “recency” as “active or completed efforts performed within the past six (6) years from the issuance date of this solicitation.” RFP, Amend 0003 §

M.I.D.1. In terms of relevancy, the RFP advises offerors that the Air Force will make an

“overall relevancy assessment for each effort.” The relevancy assessment will consider the technical complexities, using relevancy definitions provided in the RFP, and the

“programmatic/logistical scope and magnitude of effort as separate aspects.” Id., §M.I.D.4. For purposes of assessing the relevancy of past performance efforts, the RFP notes the following regarding the expected magnitude of work and complexities:

• Duration of Time: 10 years

• Technical Data Package: Next Generation Cargo Pallet, Drawing 201993246

• Estimated Total Dollar Value: The Government’s estimated acquisition value is not releasable; however the offeror’s efforts will be evaluated against the

Government’s estimate.

• Type of Data Deliverables: Inspection Reports, Delivery Reports, Status Reports, etc.

The RFP includes relevancy definitions for each technical aspect of the SOW – friction stir welding, aluminum extrusion, and program integration/management. A “Very Relevant” effort under the friction stir welding and aluminum extrusion criteria is limited to efforts where the offeror essentially must have completed an aluminum pallet manufacturing and production project identical to the new design developed by the UDRI team under the RIF contract. The

RFP defines relevancy for evaluation purposes as follows:

Friction Stir Welding:

Very Relevant: Present/past performance effort involved essentially the same scope and magnitude of effort and complexities this solicitation requires. Very Relevant efforts must have included all of the following:

Friction stir weldments of 96” or longer, multi-void, thin wall (0.125 in or less)

6000 series aluminum extrusions in quantities of 500 per month or greater.

Relevant: Present/past performance effort involved similar scope and magnitude of effort and complexities this solicitation requires. Relevant efforts must have included the following:

Friction stir weldments of 6000 series aluminum extrusions in quantities of 250 or more per month.

Somewhat Relevant: Present/past performance effort involved some of the scope and magnitude of effort and complexities this solicitation requires. Somewhat Relevant efforts must have included all of the following:

Friction stir weldments of aluminum in quantities of 100 or more per month.

Not Relevant: Present/past performance effort involved little or none of the scope and magnitude of effort and complexities this solicitation requires.

Production of Aluminum Extrusions:

Very Relevant: Present/past performance effort involved essentially the same scope and magnitude of effort and complexities this solicitation requires. Very Relevant efforts must have included all of the following:

Production of minimum 96” length by 15” profile width, multi-void, thin wall

(0.125 in or less) aluminum extrusions in quantities of 500 per month or greater.

following:

Production of minimum 10” profile width, multi-void, thin wall (0.125 in or less) aluminum extrusions in quantities of 100 per month or greater.

Somewhat Relevant: Present/past performance effort involved essentially the same scope and magnitude of effort and complexities this solicitation requirements. Somewhat

Relevant efforts must have included the following:

Production of aluminum extrusions.

Not Relevant: Present/past performance effort involved little or none of the scope and magnitude of effort and complexities this solicitation requires.

Program Management/Integration

Very Relevant: Present/past performance effort involved essentially the same scope and magnitude of effort and complexities this solicitation requires. Very relevant efforts must have included the following:

a. Managed at least 4 subcontractors on the same contract effort.

b. Managed a Supply type contract with a value of $50 million or more following:

a. Managed at least 2 subcontractors on the same contract effort.

b. Managed any type of contract with a value greater than $25 million, but less than $50 million.

Somewhat Relevant: Present/Past performance effort involved some of the scope and magnitude of effort and complexities this solicitation requires. Somewhat Relevant efforts must have included all of the following:

a. Managed one or no subcontractors on the same contract effort.

b. Managed any type of contract with a value greater than $5 million.

Not Relevant: Present/past performance effort involved little or none of the scope and magnitude of effort and complexities this solicitation requires.

Id., § M.II.D.4.1.

The RFP advises that the Air Force will assign offerors’ past performance a confidence assessment rating based on the recency and relevancy of offerors’ past performance, utilizing the following definitions:

Adjectival Rating Definition

Substantial Confidence Based on the offeror’s recent/relevant performance record, the

Government has a high expectation that the offeror will successfully perform the required effort.

Satisfactory Confidence Based on the offeror’s recent/relevant performance record, the

Government has a reasonable expectation that the offeror will successfully perform the required effort.

Neutral Confidence No recent/relevant performance record is available or the offeror’s performance record is so sparse that no meaningful confidence assessment can be reasonably assigned. The offeror may not be evaluated favorably or unfavorably on the factor of past performance.

Limited Confidence Based on the offeror’s recent/relevant performance record, the

Government has a low expectation that the offeror will successfully perform the required effort.

No Confidence Based on the offeror’s recent/relevant past performance record, the

Government has no expectation that the offeror will be able to successfully perform the required effort.

c. Small Business Participation

The RFP informs offerors that their small business participation proposals will be evaluated against DoD’s FY 2018 goals. DoD’s FY 2018 goals are as follows:

Business Size Subcontracting Goals

Small Business 35%

Small Disadvantaged Business

(SDB)

5%

Historically Underutilized Business

Zone Small Business (HUBZone)

3%

Woman-Owned Small Business

(WOSB)

5%

Service-Disabled Veteran-Owned

Small Business (SDVOSB)

3%

The Air Force plans to evaluate the acceptability of offerors’ small business participation proposals, utilizing the following ratings:

Adjectival Rating Description

Acceptable Proposal indicates an adequate approach and understanding of small business objectives.

Unacceptable Proposal does not meet small business objectives.

d. Cost/Price

Finally, the Air Force plans to evaluate offerors’ proposed unit prices for reasonableness and balance and will calculate a total evaluated price for evaluation purposes only.

C. Questions Concerning Taber’s Role

During the pre-solicitation Question and Answer (“Q&A”) process, offerors asked questions about Taber’s role in the development process and potential role as an offeror in this procurement. In particular, offerors informed the Air Force that, under the initial RFP, Taber was the only US extrusion company capable of producing the three sections of the Next-Gen pallet due to the large width of the pallet sections:

34. There is only one known US based extruder capable of providing the extrusion widths for this Technical Data Package – the large business incumbent for the development contract(s). Please provide an alternative design that incorporates narrower width extrusion profiles to lower program costs; increase competition (including small business extruders); and allow large business prime contractors to come closer to achieving the required small business set-aside percentages required by Section M-900 for this full and open competition.

Pre-Solicitation Conference Q # 34. Each of the three sections of the original pallet design are friction-stir welded together to make a single pallet. But the width of each section is important because the equipment used for the aluminum manufacturing is limited by the width of the extrusion produced. The contractor identified in the question is Taber, which had the available equipment and, as described more fully herein, was deeply involved in the Next-Gen Pallet development contract. The Air Force response to this question, however, did not address the competitive advantage held by Taber and, instead, generically responded that “[a]dditional drawings are forthcoming that are of a somewhat new and different design.”

After the Pre-Solicitation Conference, the Air Force issued revised drawings maintaining the same design, but separating the pallet into six sections, effectively reducing the width of the sections that would be friction-stir welded together to make a single pallet. Because the friction stir-weld process maintains approximately 95% or more of the original metal’s strength, the change in the design from three panels to six did not affect the design’s performance.

When pressed in the fourth round of Q&A, the Air Force admitted that the pallet design had been split into six pieces instead of three to allow aluminum extrusion firms other than Taber to compete:

14. It was noted at the Industry Day held on March 27, 2019 that the extrusion designs were set and there would be no changes, what prompted a redesign?

Government Response: A re-design was launched to provide a product with the performance attributes required (and an economically friendly design) while mitigating sourcing restrictions or limitations.

Questions and Answers #4, Q # 14. The agency responses, however, did not specifically address

Taber’s involvement in the development contract or eligibility to compete for this procurement.

While testing on the six-panel version of the pallet was not completed by the time of the final round of Q&A, the RFP requires offerors to adhere to the six-panel design and made no changes to the UDRI developed Detailed Specification for Next-Gen Pallet production and testing. See

Exhibit 4, § M at ¶ C.1; see also Exhibit 2, SOW at ¶ 1 (“This work specification establishes the minimum work requirements for the manufacturing and production of [the Next-Gen Pallet], as described by MIL-DTL-27443. . . . The original design function of the end-item and parts shall not be changed, modified or altered. Only the manufacturing procedure stated in this document shall be used to produce the pallet.”)

Despite its participation in the requirements definition for this RFP, AAR understands that

IV. PROTEST GROUNDS

A. Taber Has Immitigable Organizational Conflicts of Interest That Prohibit the Agency from Awarding to Taber

Taber, or any team that includes Taber or its affiliates, should be ineligible for award under this RFP due to significant and immitigable organizational conflicts of interest resulting from Taber’s role as the extrusion subcontractor in developing the design, drawings, and technical specifications for this procurement. An OCI exists where a contractor, “because of other activities or relationships with other persons, . . . 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.” FAR 2.101; see also FAR Subpart 9.5.3

The existence of a potential OCI requires a Contracting Officer to exercise “common sense, good judgment, and sound discretion” to “[i]dentify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible” and to “[a]void, neutralize, or mitigate significant potential conflicts before contract award.” FAR 9.505; FAR 9.504. See also

PURVIS Sys., Inc., B–293807.3, Aug. 16, 2004, 2004 CPD ¶ 177 at 7; Aetna Gov. Health Plans, Inc., B–254397, et al., July 27, 1995, 95-2 CPD ¶ 129 at 12. The situations in which OCIs arise have been broken out into three groups in GAO decisions: (1) biased ground rules; (2) impaired objectivity; and (3) unequal access to non-public information. See id. at 12-13. Although the

FAR identifies general rules and cites examples of OCIs that may arise, those rules and examples

“are not intended to be all-inclusive, and the FAR recognizes that ‘[c]onflicts may arise in situations not expressly covered in this section 9.505 or in the examples in 9.508.’” HBI-GF, JV, B-415036, Nov. 13, 2017, 2017 CPD ¶ 331 at 3; see Lucent Techs. World Servs. Inc., B–295462, Mar. 2, 2005, 2005 CPD ¶ 55 at 4-5.

In evaluating an OCI protest, GAO reviews an agency’s OCI investigation for reasonableness, including whether the agency meaningfully considered and addressed the actual or apparent conflict of interest. Noonan & Assoc., B-409103, Jan. 10, 2014, 2014 CPD ¶ 29 at 4-

5; Okla. State Univ., B-406865, Sept. 12, 2012, 2012 CPD ¶ 276 at 9-10. GAO “will sustain a protest if hard facts exist to demonstrate the existence of a potential conflict, even if not actual, 3 GAO has determined that a pre-award protest of an OCI must be filed by an offeror only where the protester is aware of the operative facts that give rise to the existence of an actual or potential OCI concerning a prospective offeror and the protester has been advised by the agency of the agency's position on the offeror's eligibility to compete. See A Squared Joint Venture, B- 413139 et al., Aug. 23, 2016, 2016 CPD ¶ 243. Here, AAR understands that

, e.g., McConnell Jones Lanier & Murphy, LLP, B-409681.3, et al., Oct. 21, 2015, 2015 CPD ¶ 341 at 13 n.15.

that the agency failed to reasonably evaluate and avoid, neutralize, or mitigate.” Int’l Res. Grp., B-409346.2, Dec. 11, 2014, 2014 CPD ¶ 369 at 14.

Here, the Air Force failed to reasonably and properly evaluate potential OCIs and must do so with respect to Taber and any other entities potentially involved in the development contract effort. As demonstrated below, the “hard facts” show that Taber’s role created significant and actual OCIs that seriously call into question the integrity of this procurement and the successful performance of this important procurement for the Air Force’s logistics’ capability. Moreover, the Air Force’s revision of the design from a three-panel design to a six-panel design was insufficient to address Taber’s immitigable OCI. In deciding not to exclude

Taber, the Air Force unreasonably and irrationally ignored Taber’s significant and irreconcilable conflicts. Therefore, GAO should sustain this protest.

1. Taber’s Significant Involvement in the Development of the Next-Gen

Pallet Technical Specifications

UDRI’s contract for development of the Next-Gen Pallet led to the design and specifications in this procurement. See Exhibit 7, Next-Gen Pallet Development SOW. Publicly available information confirms that Taber acted as UDRI’s aluminum extrusion subcontractor for the entire project. Taber is a vertically integrated aluminum extrusion, friction stir welding, and aluminum engineering services company. This expertise and experience strongly suggest that it provided UDRI with essential information in the development of the Next-Gen cargo pallet design and specifications. In fact, publicly available information indicates that Taber was involved in defining the requirements for the Next-Gen Pallet RFP and received more than half a million dollars between 2014 and 2017 as part of those Next-Gen Pallet development efforts.

During performance of the development contract, Taber provided substantial input to the manufacturing specifications for the Next-Gen Pallet procurement, even if it did not assist with the actual drafting of the specifications. It also had access to a wealth of information that was not disclosed to offerors for the Next Gen Pallet.

Drafting the Next-Gen Pallet Detailed Specifications and Drawings. As noted above, the purpose of the UDRI development contract was to develop a new all aluminum Next-Gen pallet for Air Force logistics operations and to “deliver all necessary engineering technical data along with a government-owned procurement data package . . . .” See Next-Gen Pallet

Development SOW at ¶ 2.0. The Air Force relied on the UDRI/Taber team to develop the entire manufacturing process and associated specifications for the Next-Gen Pallet. The development contract SOW specifically states that UDRI will work with its aluminum extrusion and friction stir welding subcontractors “to develop and define the requirements” and produce samples for

Air Force Test & Evaluation/Qualification efforts. See id. at ¶ 4.1. Section 4.4.1. of the

UDRI/Taber Statement of Work states that the “contractor shall develop/produce/maintain and deliver a Technical Data Package (TDP) that accurately depicts the final product. The TDP shall represent the approved, tested, and accepted configuration of the defined delivered item(s). TDP data includes, but is not limited to, Computer Aided Design (CAD) data, CAD models, model-based definition data sets, Gerber data and Master Bill of Materials (BOM).”

None of these elements were delivered to offerors. Rather, offerors received a revised version of Specification MIL-DTL-27443 prepared by the UDRI/Taber team and 2-D drawings produced by the UDRI/Taber team as part of the development contract performance. See id. at ¶

4.5 (“The Contractor shall utilize the results of the analysis of MIL-DTL-27443F conducted in

Task 2 to develop a red-line/markup version that applies to the Next-Gen cargo pallet.”); ¶ 4.4.3.

As part of this process the UDRI/Taber team drafted and revised the Detailed Specification

(MIL-DTL-27443F) for the current Air Force pallet, which utilized a balsa wood core and required a total re-write to incorporate the all-aluminum Next-Gen Pallet design. See id. at ¶ 4.5.

This revised specification was provided to offerors in this procurement. Compare id. at ¶ 4.5 with Exhibit 6 (MIL-DTL-27443G (June 2019) (drafted by Daniel R. Bowman and Anthony J.

Bergman of the University of Dayton Research Institute)). The UDRI/Taber team was also charged with co-chairing the review of the engineering drawings and entire TDP that was provided to offerors for this procurement. See Next-Gen Pallet Development SOW at ¶ 4.4.3. In fact, Taber was specifically charged with updating and maintaining “engineering data for the item(s) designed/developed/modified/produced and funded by” the development contract. See

id. (“The contractor shall (and shall cause subcontractors and vendors to . . . .”)).

Technical Exchanges with the Air Force. Taber also participated in the requirements development process and the technical interchange process which led to the Next Gen Pallet design and requirements incorporated into the RFP. See id. at ¶ 3.0 (requiring the contractor to

“review the requirements definition and synthesis, design development, design execution, and manufacturing and process activities from” prior studies and arrange technical interchange meeting with the Air Force about the cargo pallet design development). These meetings provided Taber access to the thoughts and viewpoints of Air Force personnel involved in developing the Next-Gen Pallet that is not available to other offerors.

Test and Evaluation of the Next-Gen Design. As the extrusion subcontractor, Taber participated in the test and evaluation process for the Next-Gen Pallets. That testing was performed in coordination with the government’s test and evaluation personnel and resulted in a series of test and failure reports, none of which are available to offerors in this procurement. See

id. at ¶ 4.2 Taber was also involved in the process for investigating any initial design failures, re-designing the Next-Gen Pallet after testing, and manufacturing the design to pass the government’s tests. See id. at ¶ 4.3.

Field Testing the Next-Gen Pallet. The UDRI/Taber team was also involved in a six-month field testing of the pallet, which provided Taber with access to government information and data relevant to the performance of the design and production process. See id. at ¶ 4.7. In combination with the initial Test and Design, the preparation of these documents, and discussion of their contents with Air Force, resulted in extensive involvement in the development of the technical specifications for this procurement and gave Taber significant insight into the Air

Force requirements and potential problems that the offeror for this contract would face in FAT of the initial six units constructed under this Contract. See id. at ¶¶ 4.2, 4.3, and 4.7.

Data Deliverables Not Provided with the Next-Gen Pallet RFP. The UDRI/Taber team prepared numerous deliverables under the UDRI contract that summarized the information the team developed through the production, test, evaluation, and re-design process in the development contract – none of which were provided to offerors in this procurement, including:

• Scientific and Technical Reports, Final Report – CDRL A001, DI-MISC-80711A

• Funds and Man-hour Expenditure Reports – CDRL A002, DI-FNCL-80331A/T

• Status Reports – CDRL A004, DI-MGMT-80368A/T

• Qualification Test Procedures – CDRL A006, DI-NDTI-80603A

• Qualification Test Reports - CDRL A007, DI-NDTI-80809B

• Next-Gen Pallet Field Trial Test Report – CDRL A009, DI-NDTI-80809B

• Conference Agenda – CDRL A010, DI-ADMN-81249A

• Conference Minutes – CDRL A011, DI-ADMN-81250A

• Engineering Data for TCTO - contractor format

Id. at ¶ 10.0.

The significant role of Taber in the development efforts created actual OCIs under each of the three types of OCIs identified in GAO decisions. In the sections below, AAR details

Taber’s OCIs under each of GAO’s three categories.

2. The Air Force Failed to Reasonably Consider Taber’s Biased Ground

Rules OCI

A biased ground rules OCI arises where a firm, as part of its performance of a government contract, has in some sense “set the ground rules for the competition for another government contract by, for example, writing or providing input into the specifications or statement of work.” HBI-GF, JV, 2017 CPD ¶ 331 at 4; see FAR 9.505-1; FAR 9.505-2. In such cases, the primary concern is that the firm could skew the competition, whether intentionally or not, in favor of itself. Operational Res. Consultants, Inc., B-299131 et al., Feb. 16, 2007, 2007

CPD ¶ 38 at 6. The relevant question is, therefore, not whether the company actually drafted the specifications that were used in the procurement, but, rather, whether the company was in a position to affect any aspect of the ground rules of the competition, even unintentionally, in its own favor.

Here, there is no question that Taber helped “set the ground rules” for this competition and played a significant role in contributing to, or even preparing, the drawings and MIL-DTL-

27443G Detailed Specification, which specifically lists UDRI as its author. As detailed in the development contract Statement of Work, the development contract specifically prepared a revised version of Specification MIL-DTL-27443 and the drawings that were provided to offerors. See id. at ¶ 4.5 (“The Contractor shall utilize the results of the analysis of MIL-DTL-

27443F conducted in Task 2 to develop a red-line/markup version that applies to the Next-Gen cargo pallet.”); ¶ 4.4.3. The UDRI/Taber team, not the Air Force, led the review of the engineering drawings and Detailed Specification that was provided to offerors for this procurement. See id. at ¶ 4.4.3. Taber itself was updating and maintaining engineering drawings as part of the development contract. See id. (“The contractor shall (and shall cause subcontractors and vendors to . . . .”)).

The UDRI/Taber team’s drawings and Detailed Specification are, of course, central to the evaluation in this procurement. The Technical evaluation of offerors is based entirely on an offeror’s understanding of and ability to satisfy the technical requirements contained in the drawings and Detailed Specification drafted and revised under the development contract. See

RFP § M at ¶ C.1. (Subfactor Two, “[t]his subfactor is met when the offeror’s proposal has provided an acceptable detailed narrative discussion and supporting documentation (such as but not limited to charts, diagrams, figures, graphs, and supporting illustrations) that adequately demonstrates the offeror’s technical approach will meet the Technical Data Package (TPD) and

Military Detailed Specification (MIL-DTL) requirements . . . .”); see also RFP Sec. L at ¶ C.2.

(Subfactor 2, “[t]he offeror’s written technical proposal shall provide detailed narrative with supporting documentation (such as but not limited to charts, diagrams, figures, graphs, and supporting illustrations) to demonstrate that the offeror’s technical approach will meet the

Technical Data Package (TDP) and Military Detailed Specification (MIL-DTL) . . . .”).

For example, Instruction No. 16 on the drawings developed by the UDRI/Taber team states that the manufacturer of the pallet will, in fact, work with the extruder to develop tolerances to meet the friction sir welding standards in American Welding Society (AWS)

American National Standard D17.3:

Id. As the development contract SOW makes clear, these instructions, which did not change from the original drawings prepared as part of the development contract, were drafted by the

UDRI/Taber team. See Exhibit 7, Next-Gen Pallet Development SOW at ¶ 4.4.3.d. (“Revisions to existing engineering drawings/models and associated lists and other documentation to be included in the TDP for which the contractor is the current design activity shall result in the delivery of the entire revised document and associated data file.”) (emphasis added).

The Detailed Specification developed by the UDRI/Taber team likewise created all new specifications for the all-aluminum core pallet of the Next-Gen Pallet and eliminated many of the adhesive requirements needed for its balsa wood core predecessor. For example, the UDRI/Taber team created weld, thickness, and extrusion tolerances in place of adhesive and wood requirements. Compare Exhibit 5 at ¶ 3.3 (MIL-DTL-27443G) with Exhibit 8 at ¶ 3.3 (MIL-

DTL-27443F). The UDRI/Taber team’s specifications for this procurement also changed the values of several load tests, including a requirement for a flatness test after the static load test and specifying specific configurations for the corner lifting test. Compare Exhibit 5 at ¶ 3.4

(MIL-DTL-27443G) with Exhibit 8 at ¶ 3.4 (MIL-DTL-27443F).

The Detailed Specification drafted under the development contract likewise contains detailed first article testing (“FAT”) requirements that the offeror must satisfy. See id. at ¶¶ 4.3,

4.5. The Detailed Specification rejection criteria drafted by the UDRI/Taber team provide ample opportunity for Taber to develop specifications that favor its product or production processes, including establishing standards for flatness, tolerances of various design features, and minimum test values for various tests assessing the structural soundness of the FAT pallets. See id. at

¶ 4.5. For example, the UDRI/Taber team’s revised test specifications changed or added parameters for “flatness,” “[h]igh temperature,” and “[d]estruction analysis.” Compare Exhibit 5

(MIL-DTL-27443G) with Exhibit 8 (MIL-DTL-27443F); see also Exhibit 7 at ¶ 4.5 (stating that

UDRI shall “develop a red-line/markup version [of MIL-DTL-27443F] that applies to the Next-

Gen cargo pallet . . . .”).4

Furthermore, these requirements form the basis for the Air Force’s evaluation of the offeror’s extrusion capabilities. Section M’s evaluation criteria for Subfactor Two require that the offeror’s Technical approach adequately demonstrates that it “will meet the Technical Data

Package (TPD) and Military Detailed Specification (MIL-DTL)” and meet the “Aluminum

Extrusion requirements of drawing 201993426 in the quantities and technical tolerances required.” See RFP Drawings at PDF p. 1. The ability to tailor or provide input on tolerances, wall thickness, flatness criteria, and other specification components would give Taber a significant advantage. Taber markets its extrusion presses as being capable of producing extrusions with “much tighter tolerances for flatness, straightness and twist as well as assure that critical thickness dimensions on the internal webs,” of multi-void extrusions like those in this procurement. See Taber Extrusions LLC Awarded Austal LCS and JHSV Contracts, https://taberextrusions.com/taber-extrusions-llc-awarded-austal-lcs-and-jhsv-contracts/ (Jun. 2, 2011).

Section M also states that “[e]vidence of adequate resources” to meet the aluminum extrusion requirements includes:

• Specific Extrusion equipment model number(s), description, and performance

Specifications

• Calculations of extrusion equipment capability, illustrating the necessary production capacity

• Explanations of manpower and floor space resources required to meet the necessary extrusion production capacity

RFP § M at ¶ C.1. These evaluation criteria were also potentially influenced by Taber because

Taber provided man hour input to the Air Force as part of the development contract. See Next-

Gen Pallet Development SOW at ¶ 10.0 (the UDRI development contract SOW included at

“Funds and Man Hour Expenditure Report).

4 Furthermore, the Air Force’s updates to the Detail Specification did not alter the impact of the

UDRI/Taber team on the Detail Specification because, the majority of the UDRI/Taber team additions to the specification still remain in the revised specification. Compare Exhibit 6 with Exhibit 5.

(continued…) https://taberextrusions.com/taber-extrusions-llc-awarded-austal-lcs-and-jhsv-contracts/

Taber’s input into the drawings and Detailed Specification was, therefore, disqualifying.5

By participating in the development and drafting of the drawings and Detailed Specification, Taber could have skewed the requirements in a manner that favored Taber’s processes, equipment, or personnel. More importantly, much like the analysis GAO adopted in L-3 Servs., Inc., B-400134.11 et al., Sept. 3, 2009, 2009 CPD ¶ 171, the determinative factor in this procurement is not whether Taber “drafted specifications that were adopted into the solicitation, but, rather, whether a firm was in a position to affect the competition, intentionally or not, in favor of itself.” See id. at 15 (emphasis added). Thus, regardless of Taber’s actual role in drafting the drawings and Detailed Specification, Taber’s role as the UDRI extrusion contractor and its role in updating and maintaining the drawings and engineering documents for the project gave it the opportunity to influence the drawings and Detailed Specification in a manner that favored Taber.

For evidence of Taber’s impact on the design, GAO need look no further than the Air

Force’s decision to separate the UDRI/Taber designed pallet into six sections, instead of the three in the UDRI/Taber design. The Air Force’s decision to separate the pallet into six sections acknowledged the advantages Taber achieved through its participation in the development contract – Taber tailored the specifications to exclude all other extrusion contractors from the competition. See Pre-Solicitation Conference Questions Final at Q34. This is clear evidence of exactly the types of risks the OCI rules are designed to avoid. Had the Air Force not changed the design, Taber would have been the only extrusion company that was capable of providing the extrusion widths required by the drawings. Further, the Air Force’s change from three panels to six did not address other potential bias in favor of Taber’s equipment or production process already contained in the drawings and Detailed Specification.

By permitting Taber to compete in this procurement, the Air Force is unreasonably and irrationally ignoring Taber’s biased ground rules OCI and the adverse impact on the integrity of the procurement. It is also impossible to mitigate this actual conflict. GAO has held that an organizational conflict of interest involving biased ground rules cannot be mitigated because the

“damage is done.” See Int’l Bus. Machines Corp., B-410639, Jan. 15, 2015, 2015 CPD ¶ 40 at 8-

10 (finding that a firewall could not resolve a biased ground rules OCI and termination of an employee after he had influenced the ground rules in no way avoided any potential harm); see also Aetna Gov’t Health Plans, Inc., B-254397, July 27, 1995, 95-2 CPD ¶ 129 at 8 (explaining that in “‘biased ground rules’ cases the primary concern is that the firm could skew the competition, whether intentionally or not, in favor of itself.”). Rather, an offeror that had an opportunity to impact the requirements and design must be disqualified. See generally, HBI-GF, 5 While AAR is not required to demonstrate that Taber’s biased ground rules conflict of interest had an impact on competition, Taber’s ability to craft these specifications in a manner that favored its production capabilities is demonstrated by the fact that the extrusion width in the specifications initially excluded all other extrusion contractors from competing. See Pre-Solicitation Conference Q # 34; see also Aetna Gov’t Health Plans, Inc., Found. Health Fed. Servs., Inc., B-254397, B-254397.15, July 27, 1995, 94-2 CPD ¶ 129, at *12 (“Once the facts establishing the existence of an organizational conflict of interest are present, reasonable steps to avoid, mitigate, or neutralize the conflict are required without further need for “hard facts” to prove the conflict’s impact on the competition.”). The Air Force decision to increase the number of pallet sections from three to six, thus decreasing the extrusion width, remedied only this obvious restriction on competition and did not address other potential technical specifications that favor Taber.

JV, 2017 CPD ¶ 331 at 4; Operational Res. Consultants, Inc., 2007 CPD ¶ 38 at 6. As a result, the re-design of the pallet from a three-panel design to a six-panel design, which does not resolve

Taber’s potential influence on other portions of the design, drawings, and Detailed specification.

Thus, there is nothing the Air Force can do to mitigate this conflict and it must disqualify Taber.

3. The Air Force Failed to Reasonably Consider or Mitigate Taber’s

Impaired Objectivity OCI

Taber’s involvement in the performance of the Next-Gen Pallet contract also will result in an actual impaired objectivity OCI because, during the production contract, Taber will be in a position of evaluating the pallet design and production work it performed in the development contract. An “impaired objectivity” OCI arises when “a firm’s ability to render impartial advice to the government would be undermined by the firm’s competing interests.” Pragmatics Inc., B-

407320.2, Mar. 26, 2013, 2013 CPD ¶ 83 at 4; see also FAR 9.505-3. GAO “will sustain a protest if hard facts exist to demonstrate the existence of a potential conflict, even if not actual, that the agency failed to reasonably evaluate and avoid, neutralize, or mitigate.” See Int’l Res.

Grp., 2014 CPD ¶ 369 at 14. GAO has sustained protests where the agency failed to meaningfully consider potential impaired objectivity OCI, given risk that the awardee might

“pull its punches” in performing a contract that involves review of its prior work to avoid an adverse impact on its past performance scores and relationship with government. Nortel Govt.

Solutions, B-299522.5 et al., Dec. 30, 2008, 2009 CPD ¶ 10.

Although the Air Force is not awarding this contract to obtain design advice from the successful offeror, the contract specifically contemplates potential changes in the design, fabrication, assembly, materials, and processes in the Detailed Specification. See RFP SOW at

3.6.2. (Engineering Change Proposals (ECPs)). Even though the Air Force anticipates that the

RFP’s design for the pallet would not change during contract performance, the SOW specifically anticipates that the awardee can propose changes in “design, fabrication,…