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By Nick Wakeman

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Nick Wakeman

GAO sides with incumbent in pricing dispute

ENSCO has successfully fought off a challenger to an incumbent contract it holds for assessing nuclear weapons systems.

The victory isn’t final as the Government Accountability Office is telling the Defense Threat Reduction Agency to re-evaluate bids but it is a positive step for the Falls Church, Virginia, company.

The contract worth $61.8 million has gone through two rounds of protests and each time ENSCO has prevailed but this one is covers the most substantive issues. The first protest was successful because the winning contractor CENTRA had exceeded the page limit set in the solicitation.

When they won the contract a second time, ENSCO challenged DITRA’s cost realism evaluation.

The problem, according to GAO, was that DITRA applied the cost realism evaluation unevenly and in a way that damaged ENSCO’s standing in the competition.

DITRA uses the contract for a variety of support services for what it calls ‘balanced survivability assessments” of nuclear weapons systems. Services include evaluating mission systems, networks, architecture, infrastructure and assets.

In the evaluation, costs were not be rated or scored but they were to be evaluated for realism, reasonableness and completeness.

DITRA determined that ENSCO’s probable cost was $79.9 million compared to CENTRA’s cost of $61.9 million. ENSCO’s management approach was rated higher with an “outstanding” score, compared to CENTRA’s “good.”

ENSCO argued that DITRA failed to properly assess CENTRA’s lower labor rates, despite the fact that CENTRA planned to recruit ENSCO’s staff. GAO agreed saying that DITRA never considered the impact on recruitment of CENTRA’s lower labor rates.

DITRA also adjusted ENSCO’s costs to correspond with Defense Contract Audit Agency-verified rates but failed to do the same thing with CENTRA’s labor rates. The agency conducted no meaningful comparison of CENTRA’s rates, GAO said.

In its recommendation, GAO says that DITRA needs to conduct a new cost realism analysis of the proposals and then conduct a new best-value analysis.

This gives ENSCO another shot at keeping the contract, but while it looks good, it shouldn’t celebrate yet.

Posted by Nick Wakeman on Aug 10, 2018 at 11:10 AM


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