The Department of Homeland Security (DHS) this week said that Customs and Border Protection (CBP) will reevaluate proposals it had received for a fixed surveillance tower system program after the Government Accountability Office (GAO) last week upheld a protest by Raytheon [RTN] challenging the contract award earlier this year to Israel’s Elbit Systems [ESLT] for the virtual fence project.

Despite what seemed to have been a careful, deliberate competition and source-selection process managed by CBP leading up to the award in February of the potential $145.3 million contract with Elbit’s United States-based division EFW Inc. for the Integrated Fixed Tower (IFT) system, GAO on July 9 upheld a protest filed by Raytheon, one of the losing bidders for the project.

The IFT system, which consists of day/night cameras, radars and related communications systems mounted on individual towers along stretches of the southwest border. The sensors are expected to be tied into a common operating picture at select Border Patrol stations to give agents increased situational awareness of illegal ground activity near the border.

The program grew out of DHS’s cancellation in Jan. 2011 of the former Secure Border Initiative Network, dubbed SBInet, that was basically the same thing as IFT but more ambitious in terms of the miles of border planned for deployments.

SBInet was beset with cost overruns and delays when the program was terminated. Boeing [BA], one of the losing bidders for IFT, was the prime contractor on SBInet, which was deployed to two Border Patrol sectors in Arizona and is working successfully today to help stem the tide of illegal immigration and drug smuggling into the U.S.

After Raytheon filed the protest, which according to the GAO website was on May 12, the agency said a decision would be rendered by Aug. 20. GAO’s decision was issued under a protective order so the explanation for the finding hasn’t been made public although an agency attorney on Monday provided a prepared statement that said it is recommending that DHS begin a new source selection process for the IFT.

Ralph White, managing associate general counsel for Procurement Law at GAO, said in the prepared statement provided to HSR that the agency “recommended that DHS reevaluate the proposals of EFW and Raytheon, and make a new source selection based upon the results of the reevaluation.” He also stated that GAO sustained Raytheon’s protest “on the basis that DHS relied on several discriminators to differentiate the proposals of Raytheon and EFW that were not supported by the record, and the agency’s evaluation of EFW’s past performance was unreasonable.”

White stated that Raytheon challenged CBP’s award decision on “various non-price factors, as well as its best value tradeoff decision.” GAO also recommended that CBP reimburse Raytheon for the costs related to filing its protest.

In a statement provided by Raytheon’s Integrated Defense Systems segment, which bid for the IFT program, the company said it is “pleased” with the GAO’s finding and “As we’ve stated previously, Raytheon is confident in the solution it proposed and we look forward to working with the Department of Homeland Security on the next steps in response to the GAO decision.”

In March CBP’s lead official overseeing the acquisition of the IFT program and other border surveillance systems being deployed to track illegal immigration and drug trafficking along the northern and southern borders told a House panel that purchasing off-the-shelf systems has resulted in savings of about 75 percent versus originally expected program costs. One House member from Texas, where EFW is based, said the original estimates for IFT alone were $600 million.

Elbit’s proposal included its Peregrine system which is used by the Israeli government to protect that country’s borders. Mark Borkowski, CBP’s assistant commissioner for the Office of Technology Innovation and Acquisition, also told the House panel that the Border Patrol was close to “raving” about the Elbit system during system demonstrations that were part of the bid process.

The initial IFT installation had been slated for deployment to the Nogales area of Arizona during FY ’15. Plans call for the Border Patrol to certify the initial system prior to subsequent deployments, which currently are scheduled for FY ’17.

Elbit’s contract was for eight-years and six-months and included operations and maintenance support.