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Nick Wakeman

Army prevails on most ITES-3H protests

It looks like the Army is going to come out on top in the protest fight involving its $5 billion ITES-3H contract.

This is one where the Army has been running a two-phase competition for the hardware and related services contract. Companies have to pass muster under phase one to make the cut before they can be considered for a final award.

The Army eliminated a large number of companies during phase one, which resulted a nearly 20 protests being filed with the Government Accountability Office.

On its public docket, GAO has announced a decision denying the protests of three bidders: Presidio Networked Solutions, Mercom Corp., and MicroTech. All of those protests were denied.

But in a footnote in the decision, GAO talks about a second decision involving other bidders who also lost their protests. But that decision is still under a protective order while attorneys review it before it is released publicly.

Out of the 17 protests that were still active, all but four have been denied. Decisions are still pending involving protests by Dell, Telos, Hewlett-Packard and Dynamics Systems.

But it doesn’t necessarily mean those companies will come out on top. More likely there is something about their protests that prevented them from being lumped into a group decision. They likely raised different legal or process questions which would add some nuance or complexity.

The GAO decision also opens a shortcut for the Army to get the delayed ITES-3H contract back on track. The Army could take a corrective action for the four remaining bidders and allow them into the final phase of the competition.

They still ultimately might lose, but the Army at least would have a major contract moving forward. ITES-2H has been extended twice and runs through July 2015. The Army has said it wants to make awards to four large and four small businesses by the spring of 2015.

Of course, these pre-award decisions won’t stop any of the companies that make it to the final phase and then lose from filing protests of their own.

In reading the decision GAO released today, the companies were challenging how the Army evaluated their proposals, conducted discussions and made their competitive range determination.

From reading a lot of bid protest decisions, it seems to me that challenging how your proposal was evaluated is an uphill battle. GAO states that it doesn’t review evaluations. It only questions evaluations if the evaluation doesn’t have a reasonable basis or if it is inconsistent with the RFP.

In this case, GAO couldn’t find any basis to question how the Army evaluated the proposals. So, all the companies lost on that argument.

On the discussion question, the losing bidders said that the Army held discussions with some but not all bidders. But GAO says the Army only held discussions with bidders whose proposals were deemed unacceptable. The Army didn’t hold discussions with bidders whose proposals were acceptable because that’s the highest rating and couldn’t be improved. There was no need to talk with them.

The protesters also argued that the Army should have held discussions for phase one and phase two, but GAO said that the Army was clear that phase one and two were separate processes.

The GAO decision is divided into three general sections, which I encourage you to review. The first two sections are the background of the contract and the discussion of the general protest points. The third section describes in more detail the specifics of each company’s protest.

There are a couple good lessons in that last section. For example, MicroTech complained that the Army was wrong to dismiss the past performance for the Army ITES 2SB contract that it holds. But GAO agreed with the Army decision because the ITES 2SB contract is primarily services and ITES-3H is hardware.

Presidio also had one of its past performance references dismissed as not relevant because it was services and not hardware related.

So, for now, it looks like the Army is going to get out of this first phase in OK shape. Its process has held up.

Now it's onto phase two and the tough, final decision.

Posted by Nick Wakeman on Oct 31, 2014 at 12:02 PM


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