DynCorp's protest denied, more rulings to come in $82B Army 'LOGCAP' battle

DynCorp International has found itself on the losing end in the company’s battle to gain at least a second chance at the Army’s potential $82 billion “LOGCAP V” contract for logistics services worldwide.

The Government Accountability Office denied DynCorp’s protest on Friday, according to GAO’s protest docket. That ruling is currently sealed under a protective order as DynCorp and the Army negotiate details that can be made public.

DynCorp does have the option of appealing to U.S. Court of Federal Claims. Company officials did not respond to our request for comment on what they might do next. DynCorp filed its protest shortly after the Army made awards in mid-April.

But the protest saga surrounding this high-stakes contract that helps set the global defense services market’s broad conditions is not over yet as the remaining decisions on other protests are slated to come down Aug. 9.

Like DynCorp, AECOM was not selected when the Army first made awards and wants at least a second shot at the contract. Fluor Corp. and a PAE-Parsons joint venture are protesting for another opportunity at different pieces of the contract they did not win.

The Army divided awards for LOGCAP V by regional command with a separate award set aside for Afghanistan. KBR, DynCorp and Fluor are incumbents on the current LOGCAP IV contract that expires in April 2020. Including those three and AECOM, the Army received six total bids for the new LOGCAP V contract.

KBR was chosen for Afghanistan, plus European and Northern Commands. Vectrus retained the Central Command incumbency that was inherited from a predecessor contract rolled into LOGCAP V and added Pacific Command.

Fluor is taking issue with the Army’s awards for Afghanistan and the European, Pacific and Central Command regions. The PAE-Parsons venture is protesting awards for the African and Pacific Command regions.

McLean, Virginia-based DynCorp had somewhat elevated stakes in its bid for LOGCAP V given the current work represents nearly one-fifth of the company’s annual revenue.

But since those awards were announced, DynCorp has been able to string together three major wins of note for aviation maintenance and logistics work with the Army and Customs and Border Protection agencies.

One of those Army contracts and the CBP award are currently under protest by disappointed bidders, but analysts at credit ratings agency Moody’s Investors Service have noted that those wins should add to DynCorp a similar amount of incremental revenue to what LOGCAP work contributes now.

In a July 24 report, Moody’s noted that if those protests are resolved in DynCorp’s favor, the bookings will probably push the company’s backlog to its “highest level in many years” at $7.5 billion. The agency does forecast next year’s trailing revenue to fall from $2.1 billion to $1.8 billion.