Harris blames pricing, adultery for lost NGEN contract

In its protest of the Navy’s $3.5 billion NGEN award to Hewlett-Packard, Harris Corp. claims that the Navy didn’t properly evaluate its pricing and didn’t conduct a thorough investigation of a program manager’s affair with another contractor.

But the Government Accountability Office didn’t buy either argument and denied the Harris’ protest. The way is now clear for HP to begin the transition from the current Continuity of Services contact to the new Next Generation Enterprise Network contract. HP is the incumbent contractor.

The five-year contract will support 400,000 seats and 800,000 users.

Just days before the Navy awarded the contract, it relieved the program manager of his duties “due to a loss of confidence in his ability to lead.”

The program manager, Capt. Shawn Hendricks, had an affair with an employee of Booz Allen Hamilton. In published reports, Hendricks said the two had fallen in love.

Booz Allen had been hired by the Navy to support the selection process for NGEN, and its here that Harris made its argument that the relationship may have affected the integrity of the procurement.

Harris complained that the Navy did not review whether the conduct extended beyond the relationship. The company wanted the Navy to investigate whether Hendricks or the Booz Allen employee (now a former employee) would benefit if HP won the contract.

GAO knocked down this argument because Harris could not produce any submissions that drew a logical connection between the relationship and the award decision.

The unsupported allegations of an impact on the award decision “amount to mere speculation [and] are insufficient to form a basis for a protest,” GAO wrote.

The pricing allegations are a bit more complicated. Harris says that HP’s price was too low. The combined bid by Computer Sciences Corp. and Harris had a $3.6 billion price tag. CSC also protested, but withdrew its objections before a final ruling was made.

Harris also argued that the Navy failed to perform an adequate balancing analysis in connection with its price evaluation.

GAO found no merit to either claim.

In reaching its decision, GAO had access to the Navy’s “extensive contemporaneous evaluation record,” the watchdog agency wrote.

The Navy conducted numerous rounds of discussions with all the bidders before picking HP.

“Nothing in Harris’ protests meaningfully suggests that Hewlett Packard does not understand the contract requirements or that Hewlett Packard’s proposal does not offer to meet those requirements,” GAO wrote.

Harris complained that the Navy didn’t prepare an independent government estimate, consult price lists or conduct market research.

Instead, the Navy conducted extensive analysis of the pricing among the bidders, determining averaged proposed prices, high and low ranges and compared pricing to the existing contract, GAO wrote.

Interestingly, GAO’s report describes how, when all the bidders submitted their proposals in August 2012, the Navy found them all to have “material deficiencies.”

From that point, the Navy conducted multiple rounds of written questions, face-to-face sessions and telephone discussions. A lot of the questions revolved around pricing.

Final proposal revisions were submitted in April, and these also had problems, and more discussions were held.

Another round of final proposals were submitted in June, and all were determined to be technically acceptable.

It was the record built through these rounds of discussions that the Navy used to fight off the Harris protest.

In multiple places in the decisions, GAO refers to the evaluation record the Navy built.

When the award to HP was announced in June, Sean J. Stackley, assistant secretary of the Navy for research, development and acquisition, was asked about the prospect of a protest.

He said he couldn’t prevent a protest from being filed, but felt that the way the Navy developed the requirements, and then mapped them to the solicitation, and then mapped those to the evaluation process gave him confidence that they could withstand a protest.

Looks like his confidence was justified.