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General Dynamics loses shot at lucrative Army intelligence system

It looks like General Dynamics won’t get a chance to compete a lucrative Army intelligence program.

The Government Accountability Office denied General Dynamics' protest, clearing the way for Raytheon and Palantir to continue their one-on-one competition for the Distributed Common Ground System-Army.

Raytheon and Palantir will vie for task orders under an $876 million contract to build a battlefield network for the Army to gather and share information.

GD's Mission Systems business submitted a proposal to build a secure network for sharing of intelligence data on the battlefield. Despite a proposal $100 million less than Raytheon’s and Palantir’s, GDMS received several unacceptable ratings in its technical evaluation.

Those low scores were at the heart of GDMS' protest. They argued that the Army didn’t follow the evaluation process that was described in the solicitation.

Each bidder had to present a demonstration of its solution. For GDMS, the business used its GeoSuite software.

The bidders received a walkthrough of what was required during the demonstration and GDMS argued that the demonstration guidelines changed between the time of the walkthrough and the demonstration.

GDMS also said that the demonstration guidelines limited what the company could showcase. For example, GDMS’ solution includes automation but because the guidelines state no steps could be skipped, the automation portion of their demo was limited.

But GAO found that GDMS' arguments “lacked merit.” Changes in the demonstration guidelines were not significant and amounted to mostly renumbering steps, GAO said.

The demonstrations had to cover 32 tasks listed in the solicitation. A deficiency in any one task could result in a bid being found unacceptable.

According to GAO’s decision, the Army deemed eight demonstration tasks to have a “weakness” and six more that had a “significant” weakness.

GDMS disputed all of these ratings, GAO said. GDMS did not challenge the quality of the evaluations of Raytheon’s and Palantir’s proposals.

This contract has a long history of disputes. Two years ago, Palantir sued the government because the original solicitation called for a custom-built system. The company had to go to court just to have the opportunity to bid.

Palantir argued successfully at the Court of Federal Claims that because commercial products such as theirs were available, the government had to use a commercial product. The court issued an injunction and the 2017 National Defense Authorization Act required the Army to use a commercial product.

One of the points in Palantir's argument was that a commercial software product would be less expensive than a custom built one. Raytheon bid its commercial FoxTEN product.

But it is interesting to note that Palantir had the highest bid at $349.3 million and Raytheon’s bid was $305.4 million. General Dynamics' bid came in at $202.2 million, according to GAO.

The protest decision has cleared the way for Raytheon and Palantir to continue their competition through a “test-fix-test” phase where soldiers will use the products, including the software as well as ruggedized laptops and servers. The Army wants better tools for intelligence gathering, processing and sharing.

There is another larger demonstration phase but eventually the Army intends to pick a single winner to move into large-scale production.

General Dynamics seems to be taking the loss in stride:

"General Dynamics Mission Systems remains committed to delivering mission-critical solutions to the Army and we look forward to future opportunities," a spokeswoman told me. 

Posted by Nick Wakeman on Jul 13, 2018 at 12:20 PM

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