The Government Accountability Office (GAO) released the full decisions denying two protests of Leidos’ [LDOS] win of the Navy Next Generation Enterprise Network Re-compete (NGEN-R) Service Management, Integration and Transportation (SMIT) contract.
The full decisions were released on July 14, but the GAO first released the outcome for both in June. First it denied the protest from General Dynamics Information Technology [GD] (Defense Daily, June 12).
Then a week later it denied the protest of fellow competitor Perspecta (Defense Daily, June 18).
Leidos won the NGEN-R SMIT contract in February. It runs for five years through 2025 and includes three one-year option periods that would extend it to August 2028 and reach the full $7.7 billion value (Defense Daily, Feb. 6).
The Navy identified three deficiencies in GD’s proposal under the network operations subfactor and determined the proposal did not meet solicitation requirements., rating GD’s proposal as unacceptable. Since it was rated unacceptable, GD’s offer was not included n the Navy’s best-value tradeoff analysis.
GAO explained that GD challenged the Navy’s conduct of discussions, specifically arguing revision discussions were not meaningful because the Navy did not tell GD of its concerns related to an incorrect assumption in their initial proposal. The company also contended discussions were misleading and claimed it would have revised its proposals to resolve Navy concerns if it was identified.
“While our decision does not address every argument raised, we have considered all of GDIT’s allegations, and based on our review of the record, we find no basis to sustain GDIT’s protest,” the GAO report said.
GD’s first deficiency was because the company did not describe its approach to enterprise service operations maintenance activities, including providing required personnel, parts, consumables, tools, and support/test equipment for information technology (IT) assets.
GAO explained the Navy found GDIT’s failure to demonstrate an approach to provide all the required parts and equipment to perform maintenance activities “increases the risk of unsuccessful contract performance to an unacceptable level,” warranting a deficiency.
A second deficiency was due to GD’s proposal including an assumption the government would provide equipment needed to maintain IT assets. The third deficiency was similar to the first, but based on GD’s failure to address its approach to non-IT assets.
“The evaluators determined that GDIT failed to demonstrate its approach to maintenance activities and providing all required, parts, consumables, tools, and support/test equipment for non‑IT assets,” GAO said.
The report said the Navy gave the company an opportunity to seek clarification, which it did not use. After the Navy opened discussions, it amended the solicitations several time before requesting final proposed revisions to the solicitation. With each amendment the agency allowed offerors to ask questions.
Although GD contended the Navy did not conduct meaningful discussions by failing to identify an assumption in GD’s initial proposals and thus allowing it to revise the proposal, GAO said this does not hold up.
While agency discussions with an offeror must be meaningful, they are “sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision in a manner to materially enhance the offeror’s potential for receiving the award,” GAO said.
The meaningful requirement “however, does not obligate an agency to spoon-feed an offeror or to discuss every area where the proposal could be improved,” GAO continued.
In a separate report, GAO denied seven protest sections in Perspecta’s case. Indeed, “Perspecta challenges nearly every aspect of the Navy’s evaluation,” GAO said.
However, “we have considered all the protestor’s allegations and find no basis to sustain the protest,” the report added.
Perspecta argued Leidos received an unfair competitive advantage based on hiring a former Naval Information Warfare Systems Command (NAVWAR) official; the Navy’s organizational conflict of interest waiver was unreasonable and did not meet federal acquisition regulation (FAR) requirements; the Navy’s technical evaluation was unreasonable, applied unstated criteria, reflected disparate treatment and was otherwise materially flawed; the Navy did not conduct meaningful discussions; both the Navy’s price and cost realism evaluation was unequal and unreasonable, the Navy evaluated Perspecta’s past performance references unreasonably and did not evaluate the offerors’ references on a common basis; and the Navy’s best-value award decision was unreasonable.
Perspecta argued Leidos gained an unfair advantage by proposing a former NAVWAR official serve as the NGEN-R program manager, who formerly served as an executive assistant to the commander of NAVWAR through October 2016. The Navy contracting officer conducted an extensive investigation and found neither the former official or the NAVWAR commander has been sent acquisition planning or strategy documents or access to restricted documents or databases with Perspecta NGEN data.
“The agency explained this lack of access as being the result of a division in NAVWAR’s internal organization. In particular, the positions of both the former official and the NAVWAR commander came under the NAVWAR systems command office, which is a separate chain of command, with different areas of responsibility, than the program executive office,” the report said.
The company also challenged every finding of weakness in its technical approaches, with some based on inadequate or misleading discussions, some because claims they were unreasonable and inconsistent with the terms of the RFP, and some for both.
GAO said the Navy responded to all these arguments in its report and Perspecta did not address that response, so it considered the argument abandoned.
The report noted some merit to Perspecta’s claims on price realism concerns as the company challenged the adequacy of the Navy’s evaluation for the labor rate card and material discount section. However, this does not change the final outcome.
“While…we find that the agency’s methodology for identifying outlier labor rates was flawed, the record fails to show that the flawed methodology resulted in an unreasonable assessment as to the realism of Leidos’s proposed labor rates; as a result, we deny this protest ground.”
In contrast, GAO found no basis to side with Perspecta’s argument the Navy’s cost realism evaluation was unreasonable and unequal. The company argued the Navy mechanically evaluated the rates in Perspecta’s initial proposal for the Marine Corps base services contract line item numbers by adjusting the rate upward without considering substantiating documentation Perspecta provided.
“The protester contends that the Navy’s discussions were misleading, which led the protester to propose higher rates in its FPR, and resulted in Perspecta’s proposal being the highest in overall cost/price,” the report said.
However, GAO found no basis to sustain the protest after reviewing the record.
Perspecta also argued it received unreasonable and unequal evaluation treatment regarding past performance metrics.
The Navy’s Source Selection Evaluation Board found mixed performance ratings under the company’s most relevant contract history, as incumbent for NGEN.
Under the legacy NGEN contract, “there were many areas of concern and a recent downward trend in performance, which did not provide the government with a high level of confidence that Perspecta would be able to perform the required effort successfully,” the report said.
Perspecta argued the Navy did not evaluate offerors equally because it did not apply the same relevancy standard when looking at Leidos’ past performance.
“Essentially, the protester argues that because it, the incumbent, was not able to provide the detail the solicitation required within the page limit, then neither was Leidos, and if the agency deemed the information provided by Leidos to warrant a relevant or very relevant assessment, the agency must have applied a different, more lenient standard to the Leidos proposal.”
However, GAO found no basis for the unequal treatment and denied all eight protest elements.