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By Nick Wakeman

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Nick Wakeman

NetCents protests keep rolling in

Another five companies have filed protests against the Air Force’s NetCents 2 Products contract awards. That brings the total to 10 and the window for more protests is still open.

Sources tell me tat there were 24 bidders considered technically acceptable for the contract. Eight companies were picked as winners by the Air Force in the second round of the troubled $6.9 billion IT contract. Ten have filed protests, so there are potentially six more unhappy contractors that could file protests with the Government Accountability Office.

As one executive told me, nothing really changed between round one and round two of the contract, in terms of the information that the Air Force was collecting, or the reasoning behind their award decisions.

Well, one thing did change – five companies who won in round one were losers in round two, and nearly all of those have filed protests.

The new batch of protesters are:

  • Red River Computer Co. – a winner in round one
  • immixTechnology Inc.
  • Blue Tech Inc. – a winner in round one
  • Global Technology Resources Inc. – a winner in round one
  • Integration Technologies Group

They join the other protestors:

  • Dell Federal Systems,
  • MicroTech
  • M2 Technology – a winner in round one.
  • Sterling Computerschnology
  • Force3

The only winner from round one who hasn’t filed a protest is GTSI, but as I said, the window is still open. Companies have 10 calendar days to file a protest after receiving their debrief.

I’m hearing that a couple different things have raised the ire of the losing bidders. One is involving how unbalanced pricing was evaluated. Unbalanced pricing is where companies bid one price for a product in year one, a lower price in year two, and lower again in subsequent years. Often after year two, the product usually is near obsolete, so the price bid on years three and beyond is often minimal.

How prices slide can be gamed by companies to improve their pricing evaluation, but the Air Force had told companies they were going to be strict on this aspect. Some losing bidders were conservative in how they priced products, but feel the Air Force didn’t live up to the expectation they set.

Probably more problematic for the Air Force is the view that the Air Force did little to no verification of pricing and other aspects of the bid, and instead relied on self-certification.

As an executive told me, “What did they do for a year? They could have gone on CNET and looked things up.”

A third area revolves around compliance with FAR regulations, particularly trade regulations that restrict the countries where components in products are sourced. This source told me that there are non-compliant products – which can be cheaper – on several bids.

If the Air Force is headed down the same path as it did a year ago, where they had to pull back their awards, it is hard to imagine there being much patience for a third round.

They’ll either take some sort of corrective action, which could include adding more companies -- perhaps all of them -- to the contract.

Or, the Air Force could cancel the contract and turn to another vehicle to deliver IT products.

A cancellation would be embarrassing, and likely a career ender for someone, but it also might be the best way to move forward.

GAO’s decision due dates on the individual protests have a deadline to file ranging from Aug. 5 for Force3, the first protester, to Aug. 8 for the latest batch.

So, it looks like it might be a hot summer for the Air Force.

Posted by Nick Wakeman on May 02, 2013 at 9:50 AM

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