GAO tells Leidos to wait on new $400M HUD protest

The Government Accountability Office has told Leidos it has to wait slightly longer before the company protests how the Department of Housing and Urban Development is handling what could be a $400 million contract.

Leidos is an incumbent on HUD's Enterprise and Architecture Transformation contract, but was eliminated from the competition because HUD said the company didn’t follow the solicitation’s instructions for the pricing of equipment. Leidos protested that decision, then HUD pulled back and took a corrective action.

But that corrective action still would have likely left Leidos on the outside looking in, so Leidos protested the corrective action.

GAO has dismissed this protest, saying it is premature.

HUD told GAO the plan is to review proposals for compliance with the requirements of the solicitation and eliminate the bids not in compliance. HUD will then only hold discussions with the remaining offerors.

That said: GAO decision doesn’t mean Leidos can’t file a protest after HUD carries out the corrective action.

“There is no dispute that Leidos, at some point, should again have the opportunity to challenge the adequacy of the agency’s discussions with respect to its pricing of equipment,” GAO wrote.

In other words, Leidos doesn’t know what HUD will do during its review. HUD could keep Leidos in the competition or it could eliminate it again. Only after that can the company file a protest, GAO said.

But in reading the decision, it’s easy to see why Leidos is concerned.

Leidos was one of three bidders. We are assuming that Perspecta is one of the other three as it also is an incumbent. After some amendments and discussions between HUD and Leidos, the agency eliminated Leidos' bid.

Pricing was not a topic during those discussions. In the debriefing after it was eliminated, Leidos was told that it had the technically superior proposal but its technical strengths didn’t justify the higher price, which was 129-percent more.

Leidos is concerned that it will again be eliminated and "contends that ‘the agency intends to stand by its position that Leidos’ proposal is ineligible for award due to its pricing of equipment, despite the fact that Leidos was misled to believe, during discussions after issuance of the latest RFP amendment, that its pricing of equipment,’” according to GAO’s decision.

The company wants HUD to reopen discussions to provide clear instructions on the pricing proposals.

So far, the agency has resisted that and denies that it mislead the company in discussion prior to eliminating Leidos.

We’ll have to wait and see what happens now. But I expect we’ll see this one back at GAO again, unless Leidos wins a spot on the contract.