In its unsuccessful bid protest of the Air Force’s B-21 award to Northrop Grumman [NOC], Boeing [BA] argued the service failed to give proper effect to the solicitation’s technical acceptability, according to a redacted bid protest decision released Tuesday.
The Government Accountability Office (GAO) in February denied Boeing’s argument to the solicitation’s technical acceptability, saying the Air Force’s evaluation of Northrop Grumman’s proposal under the technical capability factor was reasonable and consistent with the request for proposals (RFP). GAO said the record shows that the evaluation was reasonable and consistent with the solicitation’s terms.
Boeing also challenged the cost realism analysis. GAO, again, denied this, saying the Air Force performed an evaluation of major cost categories utilizing well-established realism methodologies and relevant historical cost information available to the service. Finally, GAO said with respect to the cost/price evaluation, it saw no support for Boeing’s argument that the Air Force failed to reasonably account for Northrop Grumman’s technical risks in the cost realism analysis and cannot conclude that that the Air Force’s realism evaluation of Boeing’s was flawed.
In its decision, GAO said the record demonstrates that the Air Force reasonably interpreted the RFP evaluation criteria, including the role of the system requirements document (SRD), statement of work (SOW) requirements and definition of acceptable in the technical capability evaluation.
GAO said significant structural advantages in Northrop Grumman’s proposal, specifically its labor rate advantage and decision to absorb significant company investment, also strongly impacted the outcome of this essentially low-price, technically acceptable (LPTA) procurement. GAO also said Northrop Grumman’s significantly lower proposed prices for the low rate initial production (LRIP) phase created a near insurmountable obstacle to Boeing’s proposal achieving best value, or to Boeing’s protest demonstrating prejudice in the cost realism evaluation.
GAO found that early in the bidding process, both offerors struggled to put forth realistic cost proposals. It said that proposed cost categories that were both significantly different from the independent government estimate (IGE) in the judgment of cost/price evaluators and insufficiently substantiated, were deemed potentially unrealistic. GAO said the Air Force also found that each offeror’s cost proposal was significantly lower than their respective IGE and, in the service’s view, appeared unrealistic with respect to multiple cost categories and the total engineering and manufacturing development (EMD) effort.
GAO said throughout the cost evaluation discussion process, the Air Force issued 38 cost proposal evaluation notices to Boeing and 59 notices to Northrop Grumman. Throughout the discussions processes, GAO said Boeing pursued an approach of revising and supplementing the substantiation of its original cost proposal, without upwardly revising any of its proposed costs. GAO said, in contrast, Northrop Grumman, while also revising and supplementing the substantiation of its costs, upwardly revised its proposed EMD cost proposal. This amount was redacted.
The Air Force in late 2015 awarded Northrop Grumman the B-21 contract, then known as Long Range Strike Bomber (LRSB), over the Boeing-Lockheed Martin [LMT] team. Boeing alleged that the Air Force failed to consider risks inherent in Northrop Grumman’s approach that should have rendered Northrop Grumman’s proposal unacceptable or significantly increased Northrop Grumman’s evaluated cost. Boeing also alleged that the service unreasonably rejected cost data supporting Boeing’s proposed costs and employed an arbitrary and unreasonable cost realism methodology.
Boeing spokesman Todd Blecher said Tuesday the company wouldn’t sue the Air Force over the contract decision. Though the Air Force has declined to provide the value of the contract to Northrop Grumman under fears that it would reveal its capabilities to adversaries, the service has said its independent cost estimate associated with the winning B-21 bid was $23.5 billion, with a per unit cost estimate of $556 million (Defense Daily, June 17).
Northrop Grumman’s B-21 subcontractors include Pratt & Whitney [UTX] for engine development with GKN Aerospace, Janicki Industries, Orbital ATK [OA], Rockwell Collins [COL], BAE Systems and Spirit Aerosystems working on either airframe or mission systems (Defense Daily, March 7).