Tangle of government databases pose risk for contractors
Engility Corp.’s protest victory is a great example of the risks contractors face because of the tangle of government databases and requirements.
As with many large companies, Engility has been built on a variety of acquisition. There were acquisitions when it was part of L-3 Communications before being spun off in 2012, and the company has made other acquisitions since then.
One of its biggest acquisitions was the $1.3 billion deal it made in February 2015 for TASC.
It is the TASC acquisition that is at the heart of a protest Engility filed with the Government Accountability Office after the Army found the company “nonresponsible” and therefore ineligible for a contract worth between $200 million and $275 million.
Much of the work under the contract is for support of C4, business and logistics management systems, and the Army had a requirement that bidders have a top secret facility clearance.
Engility submitted the information, including a CAGE code (or commercial and government entity code) along with its bid in March 2016 – a year after the TASC acquisition closed. But when the Army went to verify the information it came back under the TASC name and a different address.
The Army checked with different databases and Defense Department offices. Because the checks kept coming back as TASC and not Engility and the databases didn’t show that the transaction had closed, the Army declared the company ineligible and informed Engility.
Engility responded that if the Army had check with the Systems for Award Management database, they would have found that their CAGE code matched up with Engility and that the address was its primary address since the merger with TASC. The company also said that its primary contact at the Defense Security Service could clear up any confusion.
The company did ask to substitute a different CAGE code so that it matched the specific facility in its proposal.
When the Army ran that code, it still came back as TASC and the Army stuck with its decision that Engility was nonresponsible.
After that, Engility filed its protest with GAO, arguing that the Army was being unreasonable.
The company provided ample evidence that it was novating contracts and updating its information in the various government databases.
“The record shows that the agency was aware of the merger transaction between TASC and Engility and also was aware of inconsistencies between information in the ISFD data base and other contractor databases,” GAO wrote. “Despite the agency’s knowledge and these evident inconsistencies, the agency made no effort to obtain accurate, up-to-date information from either the protester, or directly from the DSS office identified in the protester’s proposal.”
The Army’s conclusions were based on conjecture, and they discounted the evidence Engility provided that it indeed had the facility security clearances required, GAO said.
GAO has told the Army to reconsider its finding and allow Engility to compete for the task order. So the company is now back in the competition against two incumbents – Sotera Defense Solutions and ManTech International. And given the price tag, there are probably a couple others as well. The task order is being competed under the Software and Systems Engineering Services Next Generation contract, which has 15 primes.
While Engility was ultimately successful, their protest should be a warning to companies making acquisitions in today’s market. Everyone knows that there is a mishmash of databases where your company’s name is on file. Everyone knows that updating these databases and novating contracts is important.
But it is hard and not really exciting. There are contracts to win and other deals to make. That’s the fun stuff. Novating isn’t.
Engility was lucky because they could show what they were doing. They were moving forward crossing their T’s and dotting their I’s. And they still ran into trouble.
Posted by Nick Wakeman on Sep 21, 2016 at 9:26 AM