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Pre and Post Award Bid Protest

GAO Upholds $6.52 Billion Best Value Contract Award to Leidos Inc.

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In a decision released on March 31, the Government Accountability Office (GAO) announced it denied and dismissed General Dynamics Information Technology, Inc.’s (GDIT) protest of the Defense Information Systems Agency’s award of a $6.52 billion contract to Leidos Inc. (LDOS) for the Department of Defense Information Network support services.

LDOS was awarded the potential 10-year, $6.52 billion contract to help the Defense Information Systems Agency operate, maintain, and secure a military telecommunications infrastructure back in December 2019. The Global Solutions Management – Operations II (GSM-O II) award has a five-year base period, two two-year options, and a one-year option that would extend performance through December 31, 2030.

The contract tasks LDOS with operating the Pentagon’s Department of Defense Information Network (DODIN) and Defense Information System Network (DISN), both maintained by the Defense Information Systems Agency (DISA). The networks provide services to more than 3 million users throughout the Department of Defense (DoD) and the armed services.

LDOS was the incumbent on the previous contract, GSM-O, due to its 2016 acquisition of Lockheed Martin Corp.’s (LMT) information systems and global solutions business. GSM-O II is a follow-up to the 2012 Global Information Grid Services Management-Operations contract originally held by LMT.

Solicitation

The request for proposal (RFP) was issued on October 11, 2018, and contemplated the award of a single indefinite-delivery, indefinite-quantity (IDIQ) contract – under which various types of fixed-price and cost-reimbursement task orders would be placed – for a 5-year base period with two 2-year options and one 1-year option. The RFP contemplated 16 task areas and established that contract award would be made on a best-value tradeoff basis, based on four evaluation factors in descending order of importance: (1) technical/management, (2) past performance, (3) small business participation, and (4) cost/price.

Three offerors submitted proposals by the January 7, 2019 closing date. DISA conducted discussions, and offerors submitted their final proposal revisions (FPR) by the October 16 closing date.

On December 2, the agency source selection authority (SSA) concluded that the LDOS and GDIT proposals were relatively equal under the technical/management factor, “based upon the merit and benefit of the strengths when compared,” as well as being relatively equal under the past performance and small business participation factors. The SSA thereafter concluded that since the LDOS and GDIT proposals were equal under all non-cost/price factors, and LDOS’ proposal was $320 million lower in cost/price, LDOS’ proposal represented the overall best value to the government. Therefore, LDOS was awarded the contract.

GDIT Protest

On December 23, GDIT protested the award citing various issues regarding the agency’s evaluation of the technical and cost/price proposals and resulting award decision. On January 31, 2020, GDIT filed a supplemental protest and alleged for the first time that the agency improperly failed to investigate whether the actions of the former DISA employee provided LDOS an unfair competitive advantage.

The GAO struck down the unfair advantage argument because it was filed as part of a supplemental protest on January 31, and was well beyond the 10-day window required to make the claim following the December 10 contract award notice. A protest is considered untimely if it isn’t filed within 10-days of when the protestor knew or should have known of its reason for protest. Additionally, where a protester initially files a timely protest, and later supplements it with new grounds of protest, the later-raised allegations must independently satisfy the GAO’s timeliness requirements.

The ruling also denied GDIT’s claim that DISA officials misled the company regarding labor rates for the contract, causing GDIT to raise its rates and thus lose the award. The GAO ruled against GDIT on that claim, saying that the company “has not established that the information provided by the agency during discussions was inaccurate or communicated in bad faith.” The record demonstrated that, during discussions, the agency accurately raised its evaluation concerns regarding the realism of GDIT’s labor rates, and then asked GDIT to justify for its proposed direct labor rates. The GAO concluded that the agency’s conduct was fair and the agency satisfactorily supported its conclusion that this identified weakness continued to exist following the multiple discussions with GDIT.

Conclusion

The GAO concluded that DISA’s evaluation of all bidders were reasonable, despite GDIT’s contention that LDOS’ price proposal was flawed and improperly evaluated by DISA officials. The GAO explained that “[w]here, as here, the lower priced of two technically equal offers is selected for award, a tradeoff is not required.”

The GAO’s ruling allows work to proceed on the GSM-O II contract. In response to this ruling, Gerry Fasano, President of LDOS’ Defense Group, said: “We’re pleased the protest was quickly dismissed and are hitting the ground running. Leidos is thrilled to expand our work for DISA and provide next-generation network services for the warfighter.”

This contract was one of three massive contracts LDOS won in 2019, but all were halted due to subsequent protests. 

About the AuthorChloe Vickers

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