Air Force errors net second shot at program management contract

Paragon Technology Group is back in the running for a contract to provide program management, engineering and other support to the U.S. Transportation Command.

The Air Force had picked Jacobs Technology to win the $40 million contract over Paragon, the incumbent.

But Paragon’s protest to GAO focused on misleading discussions it had with the Air Force, and on the way, its past performance was evaluated.

GAO agreed with both of those points and has recommended that the Air Force reopen discussions with bidders and make a new award. Paragon could still lose the contract, but it is definitely back in the running.

On the misleading discussions allegation, Paragon said it adjusted its proposal and raised its proposed price because the Air Force told it to remove certain assumptions in its proposal that were affecting the number of full-time equivalents (FTEs) it was proposing for the option years of the contract.

Paragon removed the assumptions and the number of FTEs rose and its price went up. The new price was $42.8 million, compared to Jacob’s $41.4 million.

But the problem was that the Air Force didn’t have a problem with the assumptions. Instead, the Air Force had a problem with the FTEs because the they were lower than what historically had been used on the contract.

Paragon argued that if it knew the assumptions were OK, it could have made different adjustments to the FTEs and kept a price advantage over Jacobs.

GAO agreed.

On the issue of past performance, the Air Force didn’t accept the past performance from the current contract as relevant because it only wanted references for work that had 200 percent higher value. But GAO found that this was inconsistent with the terms of the solicitation.

The solicitation did say that there was potential for the value of the contract to grow by 200 percent, but there were details on why the contract would grow that much or how they would negotiate contract modifications if it was to grow by that much, GAO said.

GAO said that the potential growth of the contract “did not form part of the solicitations requirements. Instead, the agency adopted an approach to assessing relevance that was disconnected from the actual…requirements and resulted in the unusual and unexpected result that even the incumbent contract for these services was not eligible for the highest relevance assessment.”

In reopening discussions, GAO wants the Air Force “provide vendors with additional [evaluation notices] that accurately describe the agency’s concerns.”

GAO also wants the Air Force to reimburse Paragon for its costs of filing the protest.