Encore III small business protest moves to federal court

The protest battle over small business awards for the Defense Information Systems Agency's $17.5 billion Encore III has moved to the U.S. Court of Federal Claims.

Reston, Virginia-based Indigo IT LLC has filed a protest challenging DISA’s evaluation and award decisions involving this contract for IT services. DISA named 20 small businesses to the 10-year contract in September.

As expected, several companies had filed protests to the Government Accountability Office but those protests have been dismissed because of Indigo’s filing at the Court of Federal Claims. The court has greater authority than GAO so the agency defers to the court.

Pending the court’s decision in the Indigo case, the other protestors can either refile at GAO or DISA will apply the decision to their cases. It all depends on how narrow or broad the court’s decision is and what action the court recommends.

In its filing, Indigo says that DISA misevaluated the cost reimbursable portion of its proposal. Because Encore III was competed as a lowest price, technical acceptable contract, that alleged misevaluation resulted in Indigo being excluded from the competition, according to the company.

Indigo’s proposal was as rated technically acceptable, so price was the deciding factor.

The company has been in business for 17 years and in 2014 was named a Small Business Administration National Prime Contractor of the Year for its work with DISA.

In evaluating cost-reimbursement portion of proposals, the government looks at what it expects to pay but also evaluates the bidder’s understanding of the work and its ability to perform the work.

Out of 90 proposals, Indigo was among 30 that were determined to be in the competitive range. But DISA picked the 20 companies with the lost total proposed price.

Indigo claims that it would have been in the top 20 and a winner if DISA had not conducted a flawed cost realism evaluation. The evaluation added a certain percentage to Indigo’s bid. The exact percentage is redacted from Indigo’s filing.

Of the 20 winners, only two had their proposed price increased by DISA’s cost realism evaluation, according to Indigo.

The company claims that only a few of its labor rates were increased by DISA but then DISA adjusted the company’s overall price upwards, giving it a significant bump and knocking it out of the top 20.

Indigo wants the court to find that DISA’s evaluation was unreasonable and to declare that Indigo deserves an award.

No hearings have been set yet. DISA has filed its administrative record of the evaluation but that currently is under seal. There are several other filings and responses due through Jan. 18. A hearing will be set at that date.

Meanwhile, DISA has agreed not to move forward with the small business portion of Encore III while the protest is pending. DISA opened the large business track of the contract for business in March.