LPTA protest lands in federal court

Vectrus and VS2 LLC are embroiled in a dispute over who the rightful winner is of a $250 million Army logistics contract that has wound its way through a couple rounds of protests and now has landed at the U.S. Court of Federal Claims.

VS2 originally won the contract to support Fort Benning, Georgia. But Vectrus protested that the Army was wrong to add $20 million to its bid for the work.

The contract was competed essentially as a lowest price, technically acceptable procurement and the extra $20 million took Vectrus from being the lowest price to the highest.

In its bid, Vectrus said it would absorb certain costs and not pass them on to the Army. But the Army didn’t believe them and added the extra $20 million.

The Government Accountability Office ruled the Army was wrong to do that. Key parts of the decision are redacted, but GAO said that the Army didn’t have a “reasonable basis for application of the upward cost adjustment.”

GAO told the Army it needed to award the task order to Vectrus.

VS2 filed a protest when the Army did that. But GAO ruled against VS2, saying among other things that they were not in-line for the award because Vectrus now had the lowest price.

Several of VS2’s arguments could have been made during GAO’s consideration of the Vectrus protest. It was too late to raise them during their own protest, GAO said.

In its own protest, VS2 raised objections to Vectrus’ past performance. But those weren't raised during the Vectrus protest because VS2 didn’t consider itself an “interested party.”

But GAO disagreed with the VS2 conclusion.

“VS2’s position ignores the fact that, had it made these arguments (and had we agreed with its position), this would have had the effect of rendering Vectrus ineligible for award,” GAO writes. “The appropriate time to have raised these arguments was during our consideration of Vectrus’s original protest.”

Now that GAO has rejected VS2’s protest, the company has gone to the U.S. Court of Federal Claims.

The VS2 filing was unsealed today and argues Vectrus said it would absorb the $20 million in costs only after the latter company learned it was going to lose the competition. VS2 argues the Army was correct to add the cost back in.

VS2's filing also calls GAO’s decision “irrational” and an “arbitrary and capricious agency action.”

VS2 is arguing that GAO never considered the impact of Vectrus’ decision to absorb the costs on its performance. For the period after GAO’s ruling, VS2 says the Army didn’t consider it then either.

VS2 also argues that when the Army went along with GAO’s decision it was “depriving agencies of important evaluation disrection.”

The court wants the administrative record of the procurement by March 25. Motions for judgment from VS2, Vectrus and the Army are due May 3. Responses to the motions are due June 14.

A ruling from the court likely won’t come until the end of the summer.