Incumbency not enough for CACI to win $200M Navy contract

It always stings when an incumbent loses a contract and anecdotally we are hearing that takeaway wins are becoming more frequent.

So this Government Accountability Office decision to deny a protest by incumbent CACI International might offer some insights for incumbents and challengers.

CACI and Booz Allen Hamilton were locked in a tight competition for a $213.8 million Navy contract for acquisition and integrated logistics support. The contract supports the Navy’s Program Executive Office for Integrated Warfare Systems.

Both companies had identical overall ratings: Outstanding for their technical approaches and Substantial Confidence for past performance.

CACI’s price of $224 million was slightly higher than Booz Allen’s bid of $213.8 million for the five-year contract.

But price was not the sole factor in the Navy’s decision to pick Booz Allen. The Navy said Booz Allen had a slight technical advantage in the subfactors. In fact, according to the GAO decision, Booz Allen would have come out on top even if the prices bid were identical.

It was those subfactors where CACI attacked the Navy’s decision. The Navy evaluated the transition plans both companies proposed and gave a nod to Booz Allen’s approach.

CACI said its transition plan was treated differently. The company argued that as the incumbent the transition would be less risky because the personnel is already in place.

If Booz Allen’s transition plan received a rating of a Significant Strength then CACI also should have received that score, CACI argued.

But the Navy responded with three areas where they felt Booz Allen’s approach deserved the Significant Strength rating. The Navy liked how Booz Allen planned to interface with the agency, high speed hiring and staffing, and the transition approach. A description of the transition approach was redacted.

CACI argued that its transition plan was for 30 days compared to the 60 days Booz Allen proposed. CACI also said that Booz Allen’s recruitment program should not have been evaluated as more advantageous than CACI’s incumbent personnel.

Because of the scores the proposals received, CACI said the Navy didn’t treat the companies equally.

But GAO said it could find no evidence of unequal treatment. GO pointed to several differences that the agency pointed to where it felt the Booz Allen approach was superior.

For example, while both companies had a dedicated transition manager, Booz Allen offered more details on how the manager would interact with the Navy and the manager would incorporate Navy priorities into the transition.

GAO also found that CACI’s mentions of its incumbent personnel didn’t offer the same level of detail that Booz Allen did with its recruiting program.

CACI also argued that its price/cost proposal wasn’t properly evaluated, particularly when looking at escalation rates in the later years of the five-year contract. CACI argued its rates were lower than Booz Allen’s.

But CACI used a different method for calculating those costs. CACI used the Defense Department’s Green Book. But the Navy didn’t use that because they found it unreliable when applied to the commercial marketplace. CACI didn’t explain in its proposal why the Green Book was better.

The Navy also said it used the same methodology for both Booz Allen’s cost proposal and CACI. They reasoned that even if they had used the methodology CACI proposed, Booz Allen still would have still a lower evaluated price, indicating that Navy still would have picked Booz Allen.

Given how tight the two companies were in the competition, the slightly-higher technology evaluation coupled with a slightly lower price is what pushed Booz Allen past CACI at the finish line.

So what’s the lesson here?

Details matter, understand the evaluation methodology, and being an incumbent may not be the advantage it used to be.