NetCents protest merry-go-round begins again

The third time hasn't proved to be the charm for the $6.9 billion NetCents II Products contract, as four companies filed protests following a third attempt to make awards. We review four areas that companies are citing as evidence of a poor decision by the Air Force.

The snake-bit NetCents II Products contract continues its troubled ways as four of the eight losing bidders in round 3 of awards have filed bid protests with the Government Accountability Office.

The protests come with an automatic stay, so the Air Force’s wish of getting task orders underway in October has been dashed.

The companies that filed protests following the Aug. 26 awards are:

  • Force 3 Inc.
  • PCMG
  • FCN Inc.
  • Sterling Computers Corp.

Those are the four so far, anyway. More protests could be on the way. [After this story was published, Dell filed its own protest.]

Each company filed their protests on Tuesday, with a due date of Dec. 12 for a ruling from GAO. Unless, of course, the Air Force pulls back its awards as it did with rounds 1 and 2. [See our analysis of the Air Force's source selection decision document.]

A source told me that there are several issues being raised in the protests.

Discontinued products

Between round 2 and round 3, the Air Force did not ask for new proposals, so the prices and products bid are from the older proposals. This means that the products being bid are generally discontinued, and the pricing is out of date.

In other words, the pricing is meaningless because none of the products in the proposals will actually be offered to customers.

Relaxed Trade Agreements Act requirements

During the first two rounds of awards and protests, the Air Force said that it was going to address concerns involving the Trade Agreements Act, which regulates the countries where IT components and products sold to the government can be sourced.

My source is telling me that the Air Force continues to be lax with its enforcement in this area, asking bidders to self-certify, and is doing next to nothing to independently verify representations from the companies.

Unbalanced pricing

I still have some trouble wrapping my head around this concept, but apparently there are wide discrepancies in the prices bid. With companies all bidding nearly identical products (because the contracts are for commercial products) the wide range in prices should have been a red flag, according to my source.

No corrective action

This could be the strongest area for the protests. After the second round of awards, and after the subsequent storm of protests, the Air Force pulled back the awards and told GAO that it would amend the solicitation, hold limited discussions with bidders, issue a new request for proposals and make new awards.

But when it announced the 16 winners in round 3 on Aug. 26, it said, “During the reevaluation of the technical proposals, it became apparent that it was not necessary to amend the solicitation, hold discussions or issue another request for final proposals.”

In other words, the Air Force said it would take a corrective action, but then it didn’t.

So here we are, back where we started: more awards, more protests and a $6.9 billion contract that probably has no luck of being pulled from its quagmire before the end of the year.

In addition to these four protests, there is potential for more because there are other losing bidders such as Dell, Harris and Insights Public Sector that could file objections with GAO.

It’s a shame, too. According to my source, the NetCents procurement shop was once considered the gold standard.

Not so much anymore. Oh, I did reach out to the Air Force; no comment so far.

Part of me hopes that the Air Force sticks to its decision and lets the protest process run its course instead of derailing and withdrawing the awards for a third time.

I’d like to see GAO’s lawyers dig into the Air Force’s decision making process and find out how flawed this procurement really is or isn’t.

You never know, the Air Force could be exonerated, or could get a smack down.

Either way, there needs to be some closure here.

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