Peraton's $2B DHA win clears protests
Family ties do not show there was a conflict-of-interest in this enterprise IT contract, according to a new bid protest ruling.
Deloitte and ManTech may have gained early traction in their argument that Peraton should not have won a $2 billion enterprise IT services contract with the Defense Health Agency, but the Government Accountability Office has denied both protests.
A family connection was at the protesters' allegations that Peraton had an organizational conflict-of-interest when pursuing the potential 10-year, $2 billion Military Health System Enterprise IT Services contract.
One employee at Peraton’s teammate Capgemini had a brother working at ZYGOS Consulting, an advisory firm DHA was using to develop the blanket purchase agreement.
The former Perspecta, which is now absorbed into Peraton, submitted a proposal for the contract prior to that transaction's closure in May 2021. Perspecta disclosed the connection before the solicitation's release in February of that year and mitigation processes were put in place.
DHA first selected the Perspecta proposal for an award in August 2021, after which Deloitte and ManTech filed protests raising the issue of the conflict.
Those protests pushed DHA to pull back the award and conduct an investigation.
DHA then awarded the contract to Peraton for a second time, which led to round two of protests and this final decision by GAO.
In its decision released last week, GAO rebuffed the protest with a detailed review of the conflict-of-interest investigation by DHA’s contracting officer after the allegations were raised.
The contracting officer conducted interviews with the evaluation board chair, the technical and price factor chairs, and technical subfactor leads. The contracting officer also reviewed Capgemini’s mitigation measures.
“Nothing about the relationship between (Mr. X) and his brother creates any significant potential OCI,” the contracting office said.
GAO's decision uses the Mr. X label to identify the ZYGOS employee and Mr. Y for the Capgemini staffer.
Capgemini established an organizational, physical and informational firewall that removed Mr. Y from participating in the response to the solicitation after the company learned of the family connection. That took place before DHA released the solicitation.
The two brothers didn’t discuss the procurement with each other, according to Capgemini.
Mr. X’s role was to help DHA develop an evaluation methodology. His focus was on process and not on the evaluation results, the contracting officer said.
GAO said it accepted the contracting officer’s investigation and conclusions.
It was up to Deloitte and ManTech to “present hard facts to demonstrate that there is any organizational connection between ZYGOS and Capgemini or (Peraton),” and they didn’t do that, GAO wrote.
ManTech separately argued that because the bid first came in from Perspecta and then that company combined into Peraton, the original entity submitting the bid no longer existed.
DHA's contracting officer also considered that but found that everything of any significance -- key personnel and resources -- was unchanged in the move from Perspecta to Peraton.
The officer believed that change of ownership didn’t have an impact on the proposal and GAO agreed, rejecting that claim of ManTech's.