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By Nick Wakeman

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Nick Wakeman

Inside CSC's lost IRS bid protest

Computer Sciences Corp. has been fighting hard to keep its business with the IRS, including filing bid protests.

The Government Accountability Office released its decision this week siding with the agency in awarding a contract to Northrop Grumman for infrastructure shared services. The $62.3 million contract was competed through the Treasury Department’s Total Information Processing Support Services 4 contract.

CSC has been the long-time incumbent on this work as it was originally part of the $8 billion prime contract it won in 1998.

But when the competition opened for this particular task to be competed, CSC had to go to GAO to even be allowed back into the competitive range. Ultimately, the IRS awarded the work to Northrop and CSC had to protest again.

As I reported in January, CSC lost the protest, and now after nearly a month, the details of the GAO decision are available.

The company used a shotgun approach in its protest, challenging every non-cost factors listed in the solicitation. It also alleged that discussions were unequal and misleading, and that the award decision was flawed and not properly documented.

GAO shot down all of those changes, but that doesn’t mean that CSC didn’t make some good points. In fact, as you read GAO’s summary of the evaluation of CSC’s bid, it is very positive. But Northrop’s was deemed stronger in one critical area, and its price was lower.

CSC’s key personnel ranking was good, but Northrop’s was excellent. The scores in the other non-cost areas of technical approach, project management, corporate experience and past performance were rated as good for both companies.

But for price, Northrop’s proposal was $62.3 million, compared to CSC’s $65.7 million. That’s a gap that’s hard to overcome.

CSC criticized Northrop for proposing the use of subcontractors for the bulk of the work. CSC thought Northrop’s technical evaluation should have been dinged because the heavy reliance on subcontractors is too risky, according to CSC. CSC claims that Northrop would be subcontracting 96.2 percent of the work.

However, CSC couldn’t point to anything in the solicitation that would require the IRS to downgrade Northrop’s technical score for this reason, GAO said in its decision.

In the key personnel area – where Northrop received a higher score than CSC – CSC argues that parts of its proposal were identical to Northrop’s, but Northrop received higher evaluations. Both companies identified five people in their proposals as key personnel. All of them were deemed qualified, but the IRS scored Northrop higher because it identified its personnel as IT subject matter experts, which “demonstrated an excellent understanding of the support required,” GAO wrote.

Despite CSC’s argument of unequal treatment, GAO said that it couldn’t find any evidence in its review of its record.

Another major point in its protest involved how the companies were evaluated for their project management skills. Both received good ratings. Both companies’ proposals involved no transition risk because of the experience of the people that would be on the job.

But CSC argued that it was entitled to a higher score because it would be retaining the incumbent management team, and there would be no ramp up time or need for knowledge transfer.

GAO, however, said that the IRS evaluation was reasonable and within their discretion. CSC didn’t offer an argument that would override that discretion, according to GAO.

CSC declined to comment on the GAO decision, but I can easily imagine their disappointment. There is nothing in the GAO report that indicates that CSC made a mistake or that they didn’t file a solid proposal. It’s just that Northrop’s was a little bit better.

And in the protest, they couldn’t find the legal argument or flaw in the IRS's decision that would lead GAO call for a recount.

It’s kind of like losing the Super Bowl on an interception at the goal line as time runs out. You can second guess, but the call was reasonable.

It’s time to shake hands and walk away.

Posted by Nick Wakeman on Feb 05, 2015 at 9:30 AM

Reader Comments

Thu, Feb 12, 2015 Lisa Wolford

Excellent analysis. It was a big contract and a great win for Northrop and a hard loss for CSC but illustrative of the highly competitive environment.

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