How GAO told the Air Force to redo $12B systems integration contract

The Government Accountability Office has sent the Air Force back to the drawing board as the branch struggles to award a $12 billion contract for systems integration support of next-generation nuclear missiles.

BAE Systems has held the Integration Support Contract since 2013, supporting the Minuteman III system.

The new contract is known as ISC 2.0 and is tied to the Sentinel missile program, which will replace the Minuteman III.

BAE first won the recompete in 2022, which Guidehouse successfully protested. GAO told the Air Force to re-evaluate proposals.

With the re-evaluation, the award went to Guidehouse in February 2024 and BAE responded with their own protest that GAO ruled in favor of. Once again, GAO told the Air Force to again re-evaluate proposals.

GAO released the decision on Wednesday, so more details are now available beyond what we reported earlier.

Much of the dispute revolves around the evaluation of compensation plans and how the Air Force accepted changes to Guidehouse's proposal that went beyond what the GAO decision allowed.

GAO told the Air Force to have BAE and Guidehouse submit revised cost/price proposals. The Air Force was not to accept updates to other parts of company proposals.

After Guidehouse won the contract, BAE claimed the pricing updates were inconsistent with its technical proposal.

In looking at the proposals and the Air Force’s evaluation, GAO found several examples where the Guidehouse proposal listed a higher level of technical skills but lower-level compensation for those skills.

GAO cited another example where Guidehouse relied on subcontractors in its technical proposal, but eliminated or reduced those labor categories in its revised pricing proposal.

BAE argued that Guidehouse should have been eliminated from the competition.

In its recommendation, GAO says that the Air Force should re-evaluate the entire proposals in accordance with the solicitation. But if the Air Force finds the solicitation no longer reflects how it wants to evaluate proposals, then the branch should amend the solicitation and ask for revised proposals.

At its essence, GAO is telling the Air Force to start over.

This back-and-forth protest battle is just one chapter in the Air Force’s troubled history to field the new Sentinel ICBM.

The Air Force recently fired the leader of the Sentinel program, Col. Charles Clegg. Costs for the new missile program have soared to $131 billion and it is now under congressional review, according to our sibling publication Defense One.