OCI concerns nix Lockheed intell contract

Alleged organizational conflict of interest concerns helped derail a Lockheed Martin contract with the Army Materiel Command to support an intelligence system.

Lockheed Martin won the $50 million task order under the Rapid Response 3^rd Generation contract known as R23G (undoubtedly, a Star Wars fan named it).

DRS Technology filed a protest complaining that the evaluation of Lockheed’s proposed level of effort was unreasonable, the Army failed to account for differences in transition plans, and the agency failed to investigate in a meaningful way an alleged organizational conflict of interest.

The Government Accountability Office agreed with all three of DRS’ arguments and sustained the protest. They are recommending that the agency amend the solicitation to account for the different transition plans and account for the level of effort proposals. They also want a more complete OCI investigation that is consistent with what GAO describes in its decision.

DRS and Lockheed Martin were the only bidders to make into the final competition to support the Army’s Distributed Common Ground System. Known as DCGS, the system gathers and disseminates intelligence from sensors and other intelligence and surveillance sources.

The contract is for integration, testing, fielding and maintaining hardware and software as well as training Army personnel.

The competition was best-value, but both DRS and Lockheed had identical scores for their technical proposals and past performance. Lockheed’s price was $50.4 million and DRS came in at $51.4 million.

DRS complained that Lockheed’s proposal would require the Army to continue to paying incumbent contractors during the transition while DRS’s proposal would not. GAO agreed and said that the Army needs to make a new price evaluation based on that finding.

As for the OCI allegation, Lockheed already holds a contract supporting DCGS, and this new contract would put the company in the position of checking its own work. DRS questioned Lockheed’s ability to provided impartial advice to the government in this situation.

The Army argued that that there was no conflict because the testing Lockheed would do was very basic – turning on equipment and making sure software was installed. The Army did its own more substantive testing. The Army said there was no “impaired objectivity.”

GAO agreed with the Army for some parts of the requirement, but found other areas where Lockheed would be expected to review “system developer deliverables.” Some of the work included reviewing and auditing software documentation from other contractors, including Lockheed.

GAO found that the Army didn’t sufficiently investigate these alleged conflicts of interest.

The evaluation is now with the Army to make a new decision based on GAO’s findings.

A statement from Lockheed Martin said the company is disappointed with GAO’s decision. “Lockheed Martin will await the U.S. Army’s corrective action in this case and evaluate its options in the coming days,” a spokesman said.