GDIT may have squandered chances at $2.7B DHS cloud contract

General Dynamics IT apparently didn’t take advantage of the opportunities the Homeland Security Department gave it during the competition for a $2.7 billion cloud computing migration and services contract.

Peraton won the Data Center and Cloud Optimization Support Service contract in October via a bid from the former Perspecta business. After that, GDIT went to the Government Accountability Office and challenged nearly every aspect of the evaluation.

GAO’s newly-released decision against GDIT's protest shows the competition for the contract came down to them and Peraton/Perspecta as the companies wound through a three-phase source selection process.

During phase three, problems with GDIT’s proposal cropped up and DHS entered into discussions with the company.

One problem was that the solicitation had a requirement for a dashboard to be created with financial data and costs associated with the migration to the cloud all included.

That dashboard would be delivered by day 120. GDIT said it could deliver the dashboard, but wouldn’t include the financial data until later on.

DHS lost confidence in GDIT and gained no more of it when the agency asked the company about it during the discussions. The department felt that GDIT’s answers were “confusing and contradictory,” according to GAO.

GDIT also wasn’t clear about some of its steps during the transition during the Q&A portion of its oral presentation, DHS said in its statements to GAO.

The technical evaluation team called GDIT’s answers “disjointed, inconsistent, contradictory and difficult to understand,” GAO wrote in quoting the team’s report.

Both companies' scores were the same in all other categories of evaluation. Technical score was the only one where GDIT was ranked below Peraton with a Some Confidence rating, compared to Peraton’s High Confidence rating.

GDIT tried to argue that the lower technical score was unjustified, but GAO said it could find nothing in the record of the procurement to support that argument.

GDIT declined to comment on the protest.

Given the lower technical score and GDIT’s higher price at $996.3 million, DHS had little choice but to award the contract to Peraton using a best-value trade-off formula. DHS could not justify paying GDIT more for a lower-rated proposal.

GDIT criticized how DHS conducted the discussions because the agency didn’t correlate its questions with the level of concerns it had.

“While the fact that GDIT’s responses to the agency’s discussion questions did not fully address and/or eliminate the agency’s concerns may reflect on GDIT’s understanding of the solicitation requirements, not establish that the discussions were less than meaningful,” GAO wrote.

Not to be too harsh on GDIT, especially when they've declined to share their side. But in reading the decision, it sounds like GDIT was given chances to improve their proposal but missed DHS' hints.

GAO’s decision upholds an important win for Peraton, which came into the competition through its combination with Perspecta. Perspecta was already deep into the procurement when that transaction closed in May 2021. DHS awarded the contract in September 2021.