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Nick Wakeman

Army gets GAO's OK to rework contract after award

Companies generally file a protest after a debriefing, but for Jacobs Technology it didn’t work out that way. 

The Army pulled the plug on the debriefing to take a corrective action involving an award it made to Serco Inc.

Serco won the $46.8 million contract to provide global logistics and staff augmentation services to the Army Sustainment Command.

But while Jacobs waited for its debriefing, the Army realized Serco didn’t include all of its costs in its labor rates. The Army thought that Serco expected a reimbursement for those costs.

The Army concluded that the solicitation wasn’t clear and canceled the contract with Serco, then reopened discussions and revised the solicitation to clarify the pricing instructions.

These actions led Jacobs to file a protest to the Government Accountability Office. Jacobs argued that the Army’s actions basically gave Serco the opportunity to correct mistakes it made in its original proposals. Jacobs said that Serco’s proposal should have been found unacceptable.

Jacobs argued that the original solicitation was clear and it was the only company to submit an acceptable offer. The Army should have awarded the contract to Jacobs.

But the Army countered that the solicitation didn’t provide enough detail on how bidders were to build their labor rates so the competition wasn’t fair.

GAO disagreed with Jacobs and ruled that the Army has broad discretion to correct errors when it discovers them.

It’ll be interesting what happens next, now that the Army is cleared to make an award. Under the old solicitation, Serco bid $46.8 million for the work and Jacobs' price was $62.2 million.

For Jacobs to have a chance, it will need to flip the pricing as the work is being competed as a lowest price, technically acceptable contract.

Posted by Nick Wakeman on Aug 14, 2018 at 12:35 PM

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