Rotair v. United States: Court Upholds Sole-Source Apache Parts Award to Boeing

Rotair Aerospace Corporation protested a decision by the Defense Logistics Agency (DLA) to procure spare parts for Apache helicopters through a sole-source contract with Boeing. The parts at issue were arm assemblies and bell cranks, both of which are critical components. Rotair contended that the government failed to investigate its own data rights before determining that only Boeing could supply the items, and further alleged that the Army improperly removed Rotair from the approved sources list without timely notice or opportunity to requalify.

Procurement Actions

In March 2022, DLA issued a solicitation restricted to Boeing as the only approved source. Rotair, having previously supplied the arm assembly, contacted the contracting officer to assert its eligibility. DLA responded that Rotair was not listed as an approved source under the current technical data package. Rotair then filed a protest with the Government Accountability Office (GAO), which DLA resolved by canceling the solicitation and reviewing Rotair’s approval status.

The Army later informed Rotair that the latest technical data for the parts was marked proprietary by Boeing, preventing the government from distributing complete technical data to other manufacturers. As a result, Rotair was not reinstated as an approved source. In September 2022, DLA executed a Justification and Approval document authorizing sole-source procurement from Boeing, citing lack of government-owned data rights. A new solicitation was issued, again restricted to Boeing. Rotair objected and filed a second GAO protest, which was dismissed as untimely.

Court Proceedings

In May 2023, Rotair filed a bid protest in the Court of Federal Claims, challenging both its removal from the approved sources list and the sole-source contract award to Boeing. Rotair argued that the government mistakenly believed Boeing owned the necessary data rights, leading to exclusion of competition. Rotair also claimed the Army violated Federal Acquisition Regulation (FAR) 9.207(b) by waiting eight years to notify it of removal from the approved list, and that the Army failed to provide assistance required under 10 U.S.C. § 3243 for requalification.

The government and Boeing moved to dismiss the protest, contending that Rotair lacked standing because it was not an approved source for either part and had never been approved for the bell crank. They also maintained that DLA had a rational basis for its sole-source award.

Court’s Findings

The Court of Federal Claims determined that Rotair had standing to bring its protest, as its allegations established that it could have had a substantial chance of receiving an award but for the alleged errors. The court reviewed DLA’s procurement decision under the Administrative Procedure Act standard, requiring a showing that the decision was arbitrary, capricious, or contrary to law.

The court found that DLA had a rational basis for its sole-source award to Boeing. The record demonstrated that Army certifications indicated the government did not possess rights to the necessary technical data, and that Boeing was the only approved source. The court held that DLA’s reliance on Army determinations was reasonable and complied with the Competition in Contracting Act.

On the issue of notice, the court acknowledged that the Army violated FAR 9.207(b) by delaying notice of Rotair’s removal from the approved list. While this delay deprived Rotair of the chance to contest its removal at the time, the court concluded that Rotair had not shown prejudice, as it was never approved for the bell crank and did not pursue requalification through the required Source Approval Request process. The court also found no clear violation of 10 U.S.C. § 3243, as Rotair had not demonstrated that it requested qualification requirements or was denied an opportunity to meet them.

Court’s Ruling

The Court denied Rotair’s motion for judgment and granted the government’s and Boeing’s cross-motions. It concluded that DLA’s sole-source procurement decision was rational and lawful, that Rotair had not demonstrated a prejudicial violation of procurement regulations, and that injunctive relief was not warranted.

Assistance with Data Rights Law

If you are dealing with disputes over government technical data, intellectual property rights in contracts, or restrictions on data use, Whitcomb, Selinsky PC assists with data rights law. Contact us to learn how our team can support your case.