How to get your share of a $2.5B contract pie

When the State Department named Science Applications International Corp. the prime contractor on its $2.5 billion Vanguard II contract, a protest by Northrop Grumman Corp. halted work until the giant contractor joined the SAIC team.

Last summer the State Department released a request for proposals for its new $2.5 billion Vanguard II contract vehicle, a 10-year award containing 40 different task orders. Contractors’ written responses were due in September, to be followed by oral presentations in October.

Vanguard 2.2.1, part of DOS’s IT consolidation program, comes under the General Services Administration’s Alliant Large Business Indefinite Delivery, Indefinite Quantity contract.

Just prior to Christmas 2010, DOS named Science Applications International Corp. the prime contractor on Vanguard.

But five or six days later, “we were notified by the Department of State that a protest had been filed by Northrop Grumman because they were not the award winner,” said David King, senior vice president and Vanguard program manager at SAIC.

Northrop Grumman had been the lead contractor on a Vanguard predecessor, State's Enterprise Network Management contract, but was not a member of the SAIC team, King said.

“I can tell you that the government stated that there was no true incumbent,” King said, adding that it was because the contract combines work currently done by several contractors.

GSA promptly issued a stop work order.

But Northrop dropped its protest early in February before it could be resolved and the giant contractor joined SAIC's team, which included IBM and Berico Technologies.

“We know from our experience with large contracts that it’s not uncommon to add teaming partners [during] execution because requirements change, technologies come and go and it just makes sense to do that,” King said. “And we proposed that in our proposal.”

Meanwhile, the work stop order was cancelled and the official contract restart date was set for February 9.

Northrop’s actions raised the question of whether or not the company agreed to drop its protest in exchange for a place on the SAIC team.

If so, it was nothing new in the realm of government contracting, said Warren Suss, president of Suss Consulting and a Washington Technology contributor.

“It’s not out of the ordinary,” he said. “It becomes a way for the company protesting to get a piece of the action and a way to resolve the legal [issues].”

Also, the government is happy when a protest is resolved through negotiations, Suss said, because protests can lead to recompeting contracts, which adds time and costs, and creates management problems.

“Anything that gets a protest removed is usually perceived in a positive way by the government,” he added.

When asked if Northrop dropped its protest because it had been added to the team, King said, “I can’t speak to that.”

In response to a request for comment from a Northrop Grumman official, Washington Technology received a only short email response:

“Northrop Grumman and SAIC have reached an agreement that will allow us to work with SAIC to support the U.S. Department of State and the Vanguard 2.2.1 program,” it said.

“As part of this agreement, we have withdrawn our protest, which will allow work to begin immediately on this critical program. As far as the work we will be doing on the contract, SAIC will need to give you that information,” the statement concluded.

Vanguard is now in its first year. According to the RFP and the government’s directions, the initial work calls for transitioning to SAIC the 40 different task orders which, “by the government’s count had at least 18 or 19 different prime contractors,” King said.

“Over the next 12 months or so, we will be transitioning those 40 or so task orders onto the Vanguard contract. And that’s already started,” he said, which means SAIC will assume operational control, responsibility and liability for the services in each task order.

SAIC, of Mclean, Va., ranks No. 5 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors. Northrop Grumman, of Los Angeles, ranks No. 2.