Army's $34.5B RS3 contract gets hit with first protest

The first of what I predict will be a large number of protests has been filed against the Army’s $34.5 billion Responsive Strategic Sourcing for Services contract.

The Army made 55 awards to large and small businesses earlier this month but it also received 387 proposals, so that’s a lot of disappointed bidders.

The first protest has been filed by Proteus Technologies, which is part of the Polaris Alpha, a new company created by Arlington Capital through a series of acquisitions.

Proteus filed its protest last week and a decision from the Government Accountability Office is expected by Sept. 5.

Known as RS3, the contract combines several existing vehicles into one. These include Strategic Services Sourcing or S3 and Rapid Response – 3rd Generation, known as R2-3G.

Of RS3's 55 total awards, 39 went to small businesses and 16 to large businesses. I also reported that several large business primes who were incumbents on the earlier contracts didn’t win spots on RS3.

But the Army also has informed several companies that they are still in the running for awards under a Phase 2 evaluation. According to solicitation documents, companies will be allowed to make revisions to their proposals after discussions with the Army. But the Army will not be accepting new or amended solicitations.

One company that has been asked to revise its proposal said most of the changes the Army wants are cosmetic.

I’ve reached out to Polaris Alpha for comment on the protest and the Phase 2 process but so far no response. I’m thinking that since they are filing a protest, they are no longer being considered for Phase 2.

Given that there were 387 bidders, we’ll see more protests now and perhaps again after Phase 2 awards are made.

RS3 is one of the biggest contracts for 2017 and is a 10-year multiple-award vehicle for professional services related to command and control systems. It is one of those contracts that companies see as a "must have" if they want to continue serving Army customers in the C4ISR space.

On the merger-and-acquisition side of the market, this will be one to watch after the dust settles. We’ll likely see companies left on the outside acquiring those with positions on this vehicle.

But we have a ways to go before we get there. First, there are the protests, then the Phase 2 awards and then maybe a few more protests.