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Is the Wyle-SAIC fight for a $1.8B NASA contract headed for the courts?

The battle between Wyle and Science Applications International Corp. for a $1.8 billion NASA contract might just be headed to the Court of Federal Claims.

The contract has gone through a couple rounds of protests at the Government Accountability Office. First, SAIC protested the award to Wyle, the incumbent on the Human Health and Performance Contract to provide health and science support on NASA’s human space flight missions, including the space station.

NASA pulled back the Wyle ward before GAO made a decision and re-evaluated bids and gave the contract to SAIC. That triggered a protest by Wyle that GAO sustained. The oversight agency agreed with Wyle’s contention that NASA didn’t fully consider the impact of SAIC splitting into two companies, Leidos and SAIC.

GAO said that NASA should give the contract to Wyle or reopen the procurement.

NASA didn’t like that and asked GAO to reconsider. GAO said no in a decision handed down this week.

So, where does that leave things?

My legal experts tell me that NASA has about two months to consider whether it will follow GAO’s recommendation. If they refuse, which is within their rights, GAO will report the refusal to Congress.

But as one source told me, it really doesn’t matter what NASA does because, either way, both companies have the option to take the protest to federal court, particularly Wyle.

If NASA refuses, Wyle can file, and likely will when you consider how big a piece of business is at stake.

The same goes for SAIC. If they decide to keep fighting for the contract, the federal court is a definite option. And who can blame them.

An SAIC spokeswoman said the company disagrees with GAO’s decision, and that it will consider all of its legal options.

“NASA has not yet stated how it intends to administer the HHPC (Human Health and Performance Contract) procurement based on this decision,” she said.

Wyle officials didn’t respond to a request for comment.

It’s interesting reading the latest GAO decision.

SAIC bid on the contract at the same time it was gearing up for its split, and NASA was aware of the coming separation. But GAO found that SAIC’s technical proposal was “inconsistent with this intended plan and instead reflected the corporate structure and full corporate resources of ‘old’ SAIC.”

SAIC told NASA that the new SAIC would have a third of the corporate resources of the old SAIC and would be the prime on the contract. GAO found that SAIC’s technical proposal was inconsistent with this “intended plan,” GAO said.

“We concluded that the evaluation was improper where SAIC’s proposed technical approach and cost proposal were materially different from SAIC’s stated intent,” GAO wrote in its decision.

NASA argued in its request for reconsideration that GAO was “improperly divesting the agency of its reasonable discretion.” The agency said that GAO’s decision was beyond the scope of its bid protest authority.

But GAO countered that NASA’s request for reconsideration didn’t show any errors of fact or law, which is a requirement for reconsideration. NASA also didn’t present new information that was not previously considered.

“A request that reiterates arguments made previously and merely expresses disagreement with the prior decision does not meet the standard for granting reconsideration,” GAO wrote.

It’s worth noting that NASA apparently doesn’t like other people questioning its procurement authority. Just last week, GAO denied another request for reconsideration from the space agency.

This case involved a protest by Blue Origin which is interested in taking over Launch Complex 39A at the Kennedy Space Center. The launch complex was used by the Apollo and Space Shuttle programs. NASA no longer needs the facility but thought commercial launch companies might be able to use it and be responsible for maintaining it.

Blue Origin filed a protest with GAO because it disagreed with how NASA had structured the competition for who would take over the facility.

GAO denied the protest, but NASA still filed for a reconsideration because they believe that GAO should never had heard the protest to start with, and didn’t have the authority to hear the case. NASA sees itself as leasing the facility, not awarding a contract.

GAO dismissed the reconsideration saying there is nothing to reconsider because Blue Origin lost the protest, so there is no active case to reconsider.

NASA is very protective of its procurement authority, and even though GAO shot down Blue Origin, NASA doesn’t want to acknowledge that GAO had the authority to do so, a source told me.

They are feisty to say the least, so it’ll be interesting to see what they do from here.

Posted by Nick Wakeman on May 15, 2014 at 1:28 PM


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