B2G Blog - Protest

Fort Wayne bidding process met with controversy

Mon, 21 Nov 2011 10:13:00 -0400

Proposals were received from several agencies in response to Fort Wayne, Indiana’s solicitation for a new emergency communications system for its police, fire, and paramedics agencies. After the bidding process was complete, Motorola was found to have submitted the only complete bid for the system.

The city of Fort Wayne along with Allen County encompass the Multi-Agency Communications Partnership (MACP) responsible for releasing the request for proposals (RFP) that has created backlash from participating vendors, most notably Raytheon.

Raytheon Network Centric Systems submitted a letter on October 26 claiming Fort Wayne’s bidding process was unfair, not subject to competition, and that the specifications were biased and catered toward Motorola. The core of the argument comes from the need for compatibility between the requested P25 radio system and the current SmartNet system provided by Motorola. The county’s SmartNet system is an 800MHz trunked radio system used by all public service entities. The specifications for the new radio system required interoperability and full integration with the existing Motorola SmartNet system, but the city stated it is willing to consider other solutions.

Others have joined Raytheon in voicing their concern about the unfair bidding process and are arguing that because specifications are company-specific, they will cost taxpayers millions of unnecessary dollars. The city estimates the project could cost up to $24 million, but a representative from RELM Wireless Corporation, another bidder on the project, said the city could save between $2.8 million and $6.3 million by considering another solution.

This story is not so unfamiliar. Earlier in 2011, Raytheon and Motorola were at odds when Raytheon was selected for a $700 million contract to build out the Los Angeles Regional Interoperable Communications System (LA-RICS). During negotiations with Raytheon, Motorola issued a protest against the award and claimed the county had distributed proprietary information, which caused the project to ultimately be rebid.

Analyst’s Take

It is not uncommon for procurement practices to be challenged, especially with $24 million on the line. In the case of Fort Wayne, the city could be searching for its own ways to save money. By integrating the new radio system with the current SmartNet system, although seemingly biased, the city avoids having to replace the county’s entire communications system. Although this project is much smaller in scope than LA-RICS, Motorola and Raytheon once again prove to be the front runners for communications system contracts.

It is important for vendors to make sure they address their proposals in such a way to meet a city, county or state’s current needs. Vendors should always be aware of existing systems and technologies and propose a viable solution to work with those components, or structure their proposals to offer something better. Vendors should also familiarize themselves with different protest rules and regulations in case bidding procedures are challenged. In addition, vendors should learn how to appeal an award in the event the resulting contract is protested.

STARCOM 21 Resurfaces

Fri, 16 Sep 2011 11:21:00 -0400

The state of Illinois' STARCOM 21 project that roared with controversy earlier this year has resurfaced once again. A lot of backlash resulted from STARCOM 21's $114 million soul-source contract to Motorola, awarded in May, but that hasn't stopped the project from expanding. Illinois recently decided to contract out radio equipment compatible with the STARCOM 21 network through a new invitation for bid (IFB) released on September 13, 2011. Initially, Harris Corporation filed a formal protest alleging the awarded Motorola contract was a monopoly and bypassed open competition between vendors. The STARCOM 21 network services more than 18,000 subscribers and is owned and operated by Motorola. The intention of the past state procurement was to allow continued use of the existing STARCOM 21 network in order to maintain infrastructure and leverage the original investment. The new solicitation is looking to establish a statewide indefinite quantity master contract(s) for the purchase of STARCOM 21 compatible subscriber radio equipment (P25) along with associated installation, extended warranty, parts, and accessories for various state agencies, officials, boards and commissions. All radios must be FCC type-accepted and PC programmable. Proposals are due October 4, 2011. Vendors with equipment not currently approved for the STARCOM 21 network are eligible to bid, but must have the equipment approved to operate on the network after the award is posted. Analyst's Take With this contract being more equipment-based as opposed to infrastructure-related, this may be an opportunity for new vendors to gain the upper hand. It is likely that big-name corporations such as Motorola or Harris Corporation may not even bid on this contract. Although much controversy may not arise this time around, it is still important for vendors to thoroughly research before bid proceedings. Vendors should find out what most satisfies the customer and then properly gauge their pricing accordingly. Also, it is always important to be aware of protest procedures in the event a contract is deemed unfair.

Justice, public safety and homeland security August review

Wed, 07 Sep 2011 07:45:00 -0400

Office work tends to slow to a crawl in August with employees taking advantage of school breaks and warm weather to get out of the office. Government is no different. August proved to be a slow month for the justice and public safety market. That said, several trends emerged throughout the month, including an increase in the number of local governments focusing on purchasing new or upgraded radio systems. Numerous counties in Pennsylvania, including Clinton, Montgomery and Schullykill, are moving closer to releasing solicitations while determining what sort of system to implement. Chester County, Pa. released a solicitation for a 700/800MHz public safety radio system. Two counties in Georgia also released solicitations for new radio systems. Gordon County is calling for an 800MHz, APCO P25 system. Rockdale County, on the other hand, has not specified what type of system it prefers; county officials have stated that either a 700 or 800 MHz system is acceptable so long as it meets the FCC narrowbanding requirements. The second trend that emerged in August was the move toward kiosk-based services for motor vehicle departments and inmate registration. New Mexico released a request for information (RFI) for a motor vehicle division kiosk project similar to the RFI released in 2010 by the Connecticut Department of Transportation. Nevada awarded two kiosk projects in August ? one for DMV registration, which was awarded to Intellectual Technology Inc. for $27,591,949. The second was for inmate kiosks and was awarded to Keefe Group and JPay Inc. for a total of $26.8 million. It is too early to tell whether kiosks will be an emerging trend; however, it is likely that they will become an attractive option as states and counties are forced to cut their budgets (including personnel). While the initial expenditure is often substantial, they could save millions in salary expenditures, not to mention time for those waiting at the DMV. As mentioned in last month's recap, the Los Angeles Regional Interoperable Communications System (LA-RICS) project, which had originally been slated to be awarded to Raytheon, was waylaid due to a breach in the state's procurement laws. It was announced that the project should have been procured for using three separate solicitations rather than one overarching request for proposals (RFP). Just six short weeks after making the announcement, Los Angeles is expected to release the new solicitations sometime this week. As these solicitations will each cover a smaller scope than the original RFP, this will provide smaller and more specialized vendors the chance to get in the game either though responding to the solicitation on their own or through partnering with larger companies. For companies that responded to the original solicitation, this rerelease provides an opportunity to rethink pricing strategy and respond in a more competitive fashion. Florida reached a milestone on September 1 that many thought would never come: the implementation of the state's prescription drug monitoring program (PDMD), the Electronic Florida Online Reporting Controlled Substance Evaluation (E-FORCSE). After many problems and several false starts, the contract was finally awarded to Health Information Designs last spring. The program ran into problems early in the process when a protest was lodged on the contracting process shortly after the release of an RFP. Next, Governor Scott threatened to stop the creation of the program, which Deltek Analyst Evan Halperin discussed in his February blog. After requests from the ONDCP and significant negotiation pleas from governors of states impacted by Florida's pill mills, the program was finally launched. Tennessee, which had a much smoother procurement of its own controlled substance monitoring database, awarded a contract in August to Optimum Technology, but has not yet set a date for the program's implementation. Analyst's Take: As summer vacation draws to a close and people begin to refocus on work, there is likely to be an increase in the number of solicitations released this fall. This is particularly true for states whose fiscal year began on July 1. GovWin expects radio systems will be the focus of many smaller cities and counties over the next few months as they gear to meet the FCC's January 1, 2013 narrowbanding deadline. While many of the larger entities have already made the switch, smaller counties ? particularly those experiencing funding difficulties ? have yet to make a determination about which system to purchase or whether to release a solicitation for the project. It would behoove vendors to work with those counties still reviewing their system and implementation options, particularly given that the largest impediment to meeting the narrowbanding requirement is often the lack of funding. Vendors who are willing to work with these struggling localities could win big when they finally decide to go out to bid for the system. As covered in the state budget projections for justice, public safety and homeland security blog, radio communications is one area where both federal and state and local spending is expected to remain steady, if not increase in the next few years. Therefore, it is worth it for vendors to continue targeting these areas. As far as PDMPs go, there are still more than 10 states that have not yet implemented a program. Given the pressure that the nation's drug czar and neighboring states put on Florida to enact a PDMP, it is likely that other states will face similar pressure to move forward with these types of programs. Vendors should therefore begin speaking with states that have not yet implemented the program, particularly those that have enacted legislation mandating it, but have not taken any further steps.

A do-over for LA-RICS?

Fri, 29 Jul 2011 13:00:00 -0400

As reported in this morning's Los Angeles Times, Los Angeles County announced its estimated $700 million Regional Interoperable Communications System (LA-RICS) project is in jeopardy. Patrick Mallon, the project's executive director, announced yesterday that, to comply with various California codes, the project should have been divided into three separate contracts: one for design and implementation of the system's technical components; one for the design of the signal towers and other structures; and one for the actual building of the towers and structures. As it stands now, the project was only procured for through one, all-encompassing solicitation meant to lead to a single contract. The goal of the project, which has been in the works for three years, was to create a modern, integrated wireless voice and data communications system to support more than 34,000 first responders and mission-critical personnel within the Los Angeles region. The project was originally designed after September 11, 2001, when it became clear that interoperability among first responders was a vital, yet severely lacking component to emergency response. The county began planning the project to ensure the thousands of first responders and emergency workers could communicate in the event of a large-scale crisis. While the events of 9/11 precipitated dozens of hearings on the issue of interoperability, and hundreds of similar ventures across the county, the LA-RICS project is one of the largest and most well-known of its kind. The county received more than $250 million in federal funding to complete the project, which could be lost if the procurement process has to start over since the majority of funding streams have strict deadlines associated with them. Without federal funding, the entire project could be in jeopardy. Members of the project's oversight board are expected to travel to Washington, D.C. to request extensions of the various deadlines so the money can still be used. Analyst's Take: This contract has been marred with numerous problems, including delays and protests, since the early procurement stages. A solicitation released on April 5, 2010, was open until August 4, 2010, and required potential vendors to attend two mandatory conferences. The county began negotiating a contract with Raytheon just last month after resolving an initial protest from Motorola. Given the recent developments, it seems Motorola and other interested parties may still have a chance to secure involvement in at least a portion of the project. The field of participants is likely to open up now that the scope of work is smaller, and more specialized firms will now have a chance to get a piece of the pie. Los Angeles County has shown its cards, and while the details of the new solicitations remain unknown, the specifications and requirements are likely to be largely the same. This will give vendors already familiar with the project a leg up as they begin to rework their responses. Interested vendors should begin to gear up again and start reviewing previously submitted proposals and pricing requirements. Vendors should also begin determining which solicitation they will respond to in case restrictions limit companies from responding to more than one. With so much up in the air, including whether the project will even survive if federal funding is lost, vendors are likely to have a significant amount of time to prepare their new responses; however, they should begin reaching out to project officials in the near future.

Health care and social services June review

Tue, 05 Jul 2011 10:27:00 -0400

Arkansas made great strides in the Medicaid and health information technology (HIT) arenas in June, with the release of three requests for proposals (RFPs) for the planning, development, and implementation of its Arkansas Medicaid Enterprise (AME). The state initially planned to release 23 individual RFPs, but after multiple revisions to its strategic plan, the state settled on just three RFPs for an AME core system, AME professional services, and AME products. The state also released a request for information (RFI) that takes the place of an RFP for an integrated electronic health record (EHR) solution for the Department of Public Health. Additionally, the state awarded a health benefits exchange consultant contract to First Data. Also on the Medicaid front, Louisiana ? after issuing an intent to award its Medicaid Management Information System (MMIS) replacement contract to CNSI, Inc. ? is subsequently handling protests filed by ACS State Healthcare LLC and Molina Medicaid Solutions, both of which competed for the lucrative contract. These companies speculate that CNSI, Inc. received special treatment from the Louisiana Department of Health and Hospitals' (DHH) Secretary Bruce Greenstein, who was employed with the company from 2005 to 2006. Also noteworthy, the New York Department of Health (DOH), Office of Health Insurance Programs (OHIP), awarded the HIT Operational Support Services for the Provider Incentive Payment Program to Computer Sciences Corporation (CSC). Other notable solicitations released in June include:

Iowa: The state of Iowa Department of Human Services (DHS), Iowa Medicaid Enterprise (IME), released an RFP for IME System Services on June 6, 2011.
Illinois: The state of Illinois DHS released an RFP for FY 2012 Illinois Human Services and Healthcare Framework today. The RFP covers the assistance, research, documentation, analysis, and planning for the development and implementation of the enterprise solution.
Rhode Island: The Rhode Island Department of Administration/Division of Purchases, on behalf of the Rhode Island Department of Health (DOH), Special Supplemental Nutrition Program for Women, Infant, and Children (WIC) Program released an RFP for a WIC Electronic Benefit Transfer (EBT) System Feasibility Study and Cost Analysis on June 15, 2011.
District of Columbia: The District of Columbia Office of Contracting and Procurement, on behalf of the DOH WIC State Agency, released an RFP on June 20, 2011 for assisting DC WIC in developing plans for the implementation of a WIC EBT system.

Upcoming procurements in the health care and social services arena include:

Florida: The Florida Agency for Health Care Administration (AHCA) may have a requirement for a vendor to provide evaluation services for the statewide health information exchange (HIE). The HIE Coordinating Council (HIECC) held a meeting on May 20, 2011, in which the potential performance measures to be tracked by the future evaluation vendor were discussed.
Iowa: The state of Iowa Department of Public Health, Iowa e-Health, released an RFI for Technical Assistance to Providers Adopting and Implementing EHR Systems and Connecting to the Statewide HIE on June 8, 2011.
New Mexico: The New Mexico Human Services Department (HSD) may release an RFP for Child Support Enforcement System (CSES) Services. The department released an RFI on June 17, 2011.
Texas: The Texas Department of Agriculture and the Texas Department of State Health Services may have a requirement for an EBT system to support the Summer Nutrition Program. The departments, in conjunction with ABT Associates, are conducting a pilot study in summer 2011 that will engage 2,500 randomly selected children in the El Paso, TX area.
Maine: The Health Data Workgroup to the Maine Advisory Council on Health Systems Development identified the redesign of the All-Payer Claims Database (APCD) as a future goal for the Maine Department of Health and Human Services. According to a report by Deloitte Consulting, the current APCD is inadequate at providing timely, actionable information to providers. The future APCD must be capable of providing real-time data to all users of the APCD.

With the June federal appeals court ruling that Congress can require all Americans to carry some form of health insurance coverage, states will certainly be busy planning for the procurement of health insurance exchange (HIX) systems in the coming months. While some states including New Mexico and Alaska have focused on battling the national health insurance mandate, they will likely switch gears and begin focusing on developing statewide plans for the planning, development, and implementation of these systems.

$345 million Maryland Public Safety Communications System protested again

Wed, 01 Dec 2010 13:45:00 -0400

The month of November has been one of the busiest months for the Maryland Board of Public Works and the Maryland Department of Information Technology. Earlier in the month, the Board was asked to approve a contract with Motorola for the Statewide Public Safety Wireless Communication System. Following the discussion, the Board moved to approve Motorola of the $345 million contract, which could be in place for 14 years if all options are pursued. Once approved, ARINC issued a formal protest of this contract. This was the second protest ARINC has issued for this contract. ARINC's second protest revolved around the change in the Minority Business Enterprise (MBE) requirements that Motorola issued earlier this month when their MBE goal was deemed low for inclusion of African Americans. ARINC is claiming that this is a breach of state contracting law as it allows Motorola to provide a second best and final offer, when other contractors were not given this opportunity. ARINC's first protest in April stated that the state used criteria not outlined in the solicitation document to evaluate proposals. That protest was thrown out by the Board of Contract Appeals. Discussion was held by the Board of Public Works regarding the protest and if it should be sent to the Board of Contracts Appeals. DOIT stated that this project has been too long in the making and needs to be approved as soon as possible to ensure that the state does not lose out on its FCC license for this project. Currently, the state has a 700 MHz license from the FCC for this project, which is set to expire January 2012. Regardless of the points made by both the Board and DOIT, the Board motioned to approve the contract with Motorola in order to ensure that the state complies with its FCC license. The Board of Contract Appeals will still hear the protest by ARINC, and if their findings differ, the contract will be reviewed.

Harris Corporation protests Radio Project in Nashville/Davidson County

Fri, 16 Apr 2010 11:03:00 -0400

Last month, the Metropolitan Government of Nashville and Davidson County issued an RFP for a new 800 MHz Trunked Simulcast Public Safety Radio System. After just three weeks of the RFP being on the street, Harris Corporation lodged a formal protest to the Metropolitan Government. Harris Corp. cited that while the RFP intends to solicit a system that is not proprietary or restricted to a single manufacturer, the terms of the RFP make it impossible for Harris Corp (or other manufacturers) to submit a bid for the public safety system. Harris requested a change in the RFP language or a cancelation of the solicitation. The Metropolitan Government of Nashville and Davidson County acknowledged the protest and while they did review the complaint, there has not been any amendments issued to cite changed in the RFP document. What makes this situation interesting is the idea that there may be numerous RFPs issued across the country that are intended as to solicit vendor competition, while at the same time, requesting specifications that single out a particular vendor. Each city, county and state has different regulations for their solicitation process, often allowing for a single sole sourced purchase, which may be in the best interest of that locality. In other cases however, localities may be benefited by reviewing bids from various vendors who may offer different products that could be a potential fit. Most vendors would argue that fully open and competitive solicitations give them the best opportunity to showcase their products quality and cost effectiveness. However, I think that vendors would obviously rather see themselves picked as the sole source vendor. For purchasing offices, it is a difficult line to walk, in the interest of their locality, their citizens and the vendor community.

GAO Reports a Significant Increase in Bid Protests

Fri, 29 Jan 2010 10:27:00 -0400

In a recently published report, the GAO stated that there was a 20% increase in bid protests in FY 2009, as compared to FY 2008.

As protest regulations have evolved, the government has seen a steady increase in the number of protests since FY 2006, but this increase from 1,652 protests in FY 2008 to 1,989 protests in FY 2009 appears especially noteworthy. The GAO, however, stated that this increase was expected for three reasons. First, the option to protest task order opportunities was granted due to the growing use of contract vehicles such as EAGLE, NETCENTS, and SeaPort; second, federal employees were allowed to protest the decision to outsource requirements; and finally, the Transportation Security Administration (TSA) opportunities became susceptible to bid protests in FY 2009. Previously, TSA fell under the Federal Aviation Administration's (FAA) regulatory procedures. Below is a chart depicting the GAO Bid Protest statistics in recent years:

GAO Bid Protest statistics for FY 2005 through FY 2009

	FY2009	FY2008	FY2007	FY2006	FY2005
Cases Filed	1,989	1,652	1,394	1,326	1,356
Cases Closed	1,920	1,582	1,411	1,275	1,341
Filed based on Merit (Sustain/Deny decisions)	315	291	335	251	306
Number of Sustains	57	60	91	72	71
Sustain Rate	18%	21%	27%	29%	23%

Source: GAO

Below is a list of current or recently determined opportunities that have been affected by the surge of bid protests. For TSA's Information Technology Infrastructure Program (ITIP) in particular, the awarded contractor has endured numerous work stoppages because of management authority disputes in protest handling between GAO and TSA. These delays can and have caused major funding issues in the form of bridge contracts and extensions until a final decision is made:

Title	Agency	Value ($K)	Status
ITIP	TSA/DHS	$493,000	Protest
SBINet Program Integration and Management Support Services	CBP/DHS	$98,000	Protest
Field Office Support Services	USCIS/DHS	$120,175	Protest
Public Assistance and Technical Assistance Contracts (PA-TAC)	FEMA/DHS	$500,000	Protest
AFRICAP Program	State	$1,500,000	Protest
Material Management, Unit Readiness Mission & Distribution Management Center	Army Sustainment Command	$128,124	Protest
Goddard Unified Enterprise Services and Technology (GUEST)	NASA	$85,000	Protest

As bid protests on federal contract awards are likely to continue increasing, the need to shorten the process will also increase. Bid protests can extend the timeframe for award up to 6 months with the net results being delays in program schedule, fiscal complications, and general strain among government and private personnel. If protests are to be minimized, contracting personnel will likely have to take extra steps when sole-sourcing and/or assigning the competition type. They will also undoubtedly be stricter when evaluating proposals resulting in vendors having to be as clear, concise and accurate as possible during the bid and proposal process.

Andrew Endicott also contributed to this report.

Rapidly Responding to the R23G Surprises

Thu, 14 May 2009 13:47:00 -0400

Earlier this week, the U.S. Army's Communications and Electronic Command's (CECOM) much anticipated follow-on to CECOM's Rapid Response Program (CR2), Rapid Response ? Third Generation (R2-3G) publicly posted award notices. R2-3G provides a streamlined task order process that allows agencies to rapidly obtain contractor services in support of urgent requirements. A total of seven contracts have been awarded with a combined ceiling value of $16.4 billion over a five year performance period. Vendors awarded on the R2-3G program include Raytheon Company, Lockheed Martin Integrated Systems, Booz Allen Hamilton, Computer Sciences Corporation, General Dynamics Global Force, Adams Communications & Engineering Technology (an 8a veteran-owned small business) and R4 Inc (a service disabled veteran-owned small business). The most surprising element of this awarded contractor's listing is not whose names are on it, but the CR2 incumbents whose names are not; specifically, ARINC and VSE Corporation. ARINC, a top contractor on CR2, had accumulated over $1.84 billion in tracked obligated funding to date. At this point, it is unclear as to why ARINC was not included in the follow-on vehicle. As of 2:15 PM EST this afternoon, a protest has not been filed with the GAO but perhaps one will be posted shortly. VSE's total obligated value for CR2 task orders to date stands at $1.68B, a momentum that appears to have been gained post Lockheed Martin's inability to obtain additional work (based on the reach of the program ceiling). So what can we expect from this next generation of awardees? If the spending pattern remains the same for R23G as it was for CR2, Lockheed Martin will hit the ground running. Under CR2, it won over 90% of awarded work serving to fulfill materiel requirements at Army as well as other Defense agencies. Since FY03, CECOM has awarded 1,636 task orders through CR2 totaling over $11 billion in obligated funding. The system includes analysis of task orders issued through the end of January 2009 and will run concurrently with the vehicle's January 2011 expiration date. GovWin's Federal Task Order database has information on 1,636 CR2 task order awards including 1,564 statements of work along with details on over 13,000 CR2 task order modifications. According to the database, there are 344 task orders that will expire between now and January 30, 2011 including Northrop Grumman's $250 million task order for aircraft survivability equipment. As deadlines and ceiling values approach, CECOM will need to start seeking new options for completing these tasks which opens the door for vendors to go after the recompete work. GovWin's Federal Task Order Database is designed to help companies identify possible teaming and recompete opportunities. Top CR2 Contractors (by Obligations to date):

Another GAO Protest, More Questions for Task Order Competition and Industry

Tue, 18 Nov 2008 14:49:00 -0400

Recently, the Government Accountability Office (GAO) sustained a protest by Delex Systems, which argued that the Navy should have limited competition of a delivery order to small businesses because at least two small firms could have offered bids, according to Federal Computer News. This means that competition under Multiple Award Contracts (MACs) and Government-Wide Acquisition Contracts (GWACs) where two or more small businesses are eligible --- task orders should be set-aside. This broadens the so-called "rule of two".

Last month, GovWin's Deniece Peterson provided further insight into the Rule of Two in this posting.

Obviously there are significant FAR and competition implications associated with changes to task order competition and mentality. However, I'm interested in the article's comments regarding the relationship between contractors (both large and small) and the federal agencies. Apparently, this decision can strain the relationship between small businesses and agencies. Agencies could push back against GAO authority driving more business to full and open competition to avoid the new complications of task order competition.

FCW's Matthew Weigelt writes, "Officials and experts agree that the ruling could widen the rift between government and industry. Already, agencies and firms are slow to trust one another. Some experts speculated that agencies now might assume that contractors plan to protest losses and even factor the costs of pursuing those protests into their bids, raising the costs to government."

What could happen to government-industry relationship if the number of protests continues to rise? For example, if government doesn't trust that industry will be fair about when to protest, the following actions may result:

Contracting shops end up spending more time making requirements and evaluation criteria simple and straight-forward
Agencies must take more time for evaluation to make sure awards are "protest-proof"
Implementing new evaluation factors that can be used to better distinguish bidders (i.e. better differentiation of one bidder over another)

On the positive side, it may also encourage government to share more pre-RFP information with industry, incorporate industry into requirements-building (as suggested by DoD acquisition reform panels), and other collaborative activities to help mitigate protests before they happen.

Current impacts to government-industry relationships:

The government is contracting more work. With tight budgets and goals toward efficiency, agencies are already bringing in contractors for work (perhaps begrudgingly) previously performed by government employees.
Similarly, the human capital crunch continues to hit many offices. As contractors fill more and more desks, some government positions remain empty. As a result, contracting offices (specifically) are stretched beyond capacity. Considering the more efficient methods, like task order competition, are becoming more arduous, it only complicates the contracting mission.
Protest as competition strategy. Protests are increasing as more firms look to the Protest process to reverse losses.

This brings to mind a question. Should industry and government have a better relationship than most industries? Clearly, many federal contractors used to work in these agencies and most members of this industry also see themselves as part of the overall agency mission. I'm not saying it is supposed to be a contentious or antagonistic relationship, but it seems more personal than in many industries. Yet these rumors of distrust abound. The government has always had the position of leverage as the purveyor of massive amounts of money but even more than that as the not-for-profit, honest spender of taxpayer dollars. The business and moral high-ground, if you will.

As federal contractors become more willing to protest and information becomes increasingly public, the contracting industry is more ready than ever to challenge the government's decisions. This is also due in part to increased competition, decreasing budgets leading to fewer available contracts, and tightening regulations from Congress. This means that contractors have a greater impact on the agencies' ability to get things done. Whether or not this shift will redefine old stereotypes remains to be seen because both sides are dependent on the other. Either way, we know the business of government does not always move as quickly as the technologies that the government relies on. However, these changes coupled with the potential for the Obama administration to infuse greater transparency and reliance on technology into the industry could mark a shift in how these two parties view each other moving forward. While we hope that the aforementioned agency-industry relationship grows more positive and united, it is likely that many factors outside industry or agency control could challenge the status quo.

Army Tests New Task Order Regulations

Wed, 12 Nov 2008 14:47:00 -0400

Over the summer, many in the government contracting industry studied the new task order regulations included in the National Defense Authorization Act of 2008 but waited to see what the practical implications would be. At that time GovWin weighed in, saying it would be interesting to see if federal agencies attempted to keep their task orders below $10 million to avoid the protest potential or what unforeseen ways task order competition might be affected. More recently, we've heard from government sources expressing concern about vendors using protests as a business strategy for either getting another chance to win or extending current work until the protest is resolved. In general, protests have gone from 1411 in FY2007 to an estimated 1700 in FY2008.

As the result of a recent Army protest, the Government Accountability Office (GAO) ruled that all parts of an agency's order are open to review and protest. Although the GAO ultimately denied the protest, its decision sketched out more of its authority regarding task and delivery order protests, according to Federal Computer News. The article went on to say that the Army is concerned that this ruling will establish the Federal Acquisition Regulation (FAR) Part 15 regulations which govern competitive and noncompetitive negotiated acquisitions for task order competition. FAR Part 15 includes proposals, awards, and notifications to contractors about the acquisition.

One obvious implication of the legislation and new GAO ruling is agencies will likely spend more time/resources processing task orders as well as reporting to and working with the GAO. In addition, a process which was supposed to save time and resources by streamlining the competition process to pre-approved federal contractors is becoming more like market competition. While this impedes the overall efficiency, a process typically shielded from public information and reporting is now being opened up to scrutiny and oversight. As an industry analyst, I will probably benefit from that aspect even as I understand, but don't agree with, the agencies' (in this case, Army's) position to maintain the old system. If Congress and the GAO begin removing many of the benefits of task order competition, aren't they rendering the process useless by causing many of the same inefficiencies of full and open competition?

The larger complexity highlighted here is the struggle between a secretive (non-public) task order process where many large federal contractors win a majority of the prime contracts and an efficient process which gets solutions, capabilities, and technology in the hands of warfighters and government customers much quicker. As this process moves forward, it will be interesting to see if the task order process begins to look more like the full and open process and, if so, what that will do to the use of multiple award contracts (MACs) and GWACs.

Task Order Protests Set to Drive Significant Change in IDIQ Contracting

Fri, 24 Oct 2008 11:38:00 -0400

The drive towards transparency and small business contracting reform is heating up. This year has introduced two major initiatives that will be significant game-changers for contractors on multiple award contracts. Considering the increase in the use of these types of contracts, new task order rules impact nearly everyone.

There have been 2 major rulings that will change the landscape of task order contracting:

Task Order Protests. The FY2008 Defense Authorization Act cleared the way for protests on task order contracts over $10 million. It went into affect in May of this year under the authority of GAO, and many contractors have already tested the waters. According to GAO's Assistant General Counsel Ralph White, his office has received about 70 task order protests since the rule went into effect. At a recent event, government speakers expressed their increasing concern about protests as a business strategy for either getting another chance to win or extending current work until the protest is resolved. In general, protests have gone from 1411 in FY2007 to an estimated 1700 in FY2008.

Rule of Two. The FAR's "Rule of Two," which requires agencies to provide setaside opportunities for small businesses for acquisitions over $100,000 if there is a "reasonable" expectation that the agency would receive offers from at least two small businesses. GAO recently sustained a protest against the Navy initiated by Delex Systems, a small business providing technical training services, regarding a $75 million task order initially released as a small business setaside. To make a long but interesting story short, Delex was one of 4 small businesses on the NAVAIR TSC IDIQ contract. Following the recertification requirement by the Small Business Administration, only 2 small businesses were eligible as "small business concerns" (including Delex). The Navy decided to open the task order up to all contract holders, large and small, using a number of factors as the basis:

Because the field of small business offerors was limited, there was "no guarantee that proposals will be received from more than one small business concern."

They'd only received two proposals from small businesses on a past solicitation for similar work (back when there were 4 small business participants)

The scope and complexity was estimated at $75 million (GAO read this as Navy's assumption that a small business couldn't handle the work)

The Navy's defense: the Rule of Two does not apply to task orders. GAO's response: Oh, yes it does. This has likely opened up a can of worms that could change task order contracting in the near future in several ways:

Although government sees the value in protests in helping increase transparency and improve requirements development, it slows the procurement process and generally makes contracting officers fearful of making mistakes. Acquisition managers are starting to review all of their IDIQs for issues and contracting officers are adding more review time to the process for "protest-proofing." As a result, some mission critical programs are being delayed - either because of closer review on the back end or protests on the front end.

GAO's decision regarding the Rule of Two could lead to revisions of the FAR to include it as a permanent rule. This could open up more opportunity to small businesses.

On the flip side, the Rule of Two provision could force large businesses to have to rethink their pricing strategies on task order vehicles. Because pricing is often based on the ability to compete for all task orders, this rule could force them to develop new pricing strategies in anticipation of being locked out of some task order competitions. Visibility into the task order environment has been a major concern for lawmakers. With the tough language about transparency and procurement reform coming from both Presidential candidates, I am expecting to see building momentum in this area as the veil is pulled back and both government and industry become more aware of the problems and limitations.

Task Order Protests: A Few Months In

Mon, 20 Oct 2008 13:35:00 -0400

The Government Accountability Office (GAO) was given the authority to review task order protests since May, through a provision in the Defense Authorization Act of 2008. Now that several months have passed: What has been the overall impact of this change on the procurement process, and what does it mean for the future?

The above question was the overall theme of an ACT-IAC sponsored panel on task order protests late last week. Overall, the picture painted by the impact of this rule on the contracting community was often bleak. According to panelists like Karen Kopf and Jim Ghiloni, whose respective offices are involved in the ongoing GSA FAME and Alliant procurements, contracting personnel are overworked, overstressed, and scared of missteps that might be cause for protest later in the process. Despite being short staffed, procurement offices are spending more time reviewing each procurement, and even building time for protests into their schedule.

Several government representatives at the event supported the idea of oversight on task orders, recognizing that task orders look more like contracts than in years past, when they were designed to be more streamlined.

The officials acknowledged weakness in their own internal procedures such as:

Poorly written requirements
Insufficient oversight
Increased workload

The real issue from the Government perspective seems to be the perceived free reign given to contractors in submitting protests without repercussion as part of their business strategy. One official expressed concerns over incumbents who file protests when they lose the recompete of a contract ? giving themselves another shot at winning but also guaranteeing a few more months on the job while the protest is being reviewed.

Despite the fears expressed, Ralph White, an Assistant General Counsel for GAO, noted that although protests have increased, the GAO is able to dismiss most protests by the 30th day of review. The GAO maintains standards for each protest, allowing them to dismiss unsubstantiated protests early in the process. Additionally, protests often help government, industry, and procurement in general, by adding greater transparency and oversight to the task order process which will ideally lead to better procurements.

Several officials have found that protests decrease with open and early communication with industry through draft RFPs and industry days. Senior Contracting Officer for NIH's Image World 3 procurement, Donald Wilson, said many problems can be prevented simply by ensuring that all contract holders have a fair chance to compete for each task order. The debrief process is also significant as it gives losing bidders a chance to understand how to be more successful. However, as incoming protests increase, changes in the protest process may be necessary in order to recoup the financial burden placed on government resources. With the issue of contracting coming up frequently in this year's presidential race, perhaps the new administration and Congress will address this arena.

Air Force Tanker Deal Gets Tanked

Wed, 10 Sep 2008 17:13:00 -0400

In a surprising move this morning, Secretary Robert Gates announced to Congress that the US Air Force acquisition of the KC-X Refueling Tanker has been cancelled. Secretary Gates, with the aid of Defense and Air Force officials, determined the re-competition of the refueling tankers would not be completed by January 2009. As a result, Secretary Gates is asking for a "cooling off" period to allow for an administration change, and the Department of Defense (DoD) will continue to maintain the current KC-135 fleet with additional funding in FY09. At this time, the DoD is planning to continue funding the KC-X program in the FY10 to FY15 budgets.

The sordid story of this procurement underscores the problems the government faces in managing large scale acquisitions. To come this far only to end in a canceled procurement costs the U.S. taxpayer millions of wasted dollars and subjects companies to millions of dollars in lost profits. In a procurement this size, it also has a material impact on the ecconomy. The GAO indicated earlier that requirements were not clearly defined and cited flaws along the source selection process. The Air Force is now reaping what it sowed.

But, is the Government fully to blame?

The acquisition process may have been badly managed, but the level of scrutiny and interference by Congress and the political issues surrounding this program have surely contributed to this particular outcome.

TSA ITIP Drops Protests, Raises Questions

Tue, 19 Aug 2008 12:59:00 -0400

Both Unisys and Northrop Grumman's protests have been answered. TSA has reopened the ITIP competition, allowing both companies to compete for the $2 billion contract. As discussed in a recent GovWin blog, protests were filed with GAO and the FAA Office of Dispute Resolution for Acquisition in July 2008 after both companies were left off the down select list of final bidders.

This is great news for Unisys, the incumbent for the ITIP program, and Northrop Grumman, but it brings up some good questions. As we all know, both companies filed protests only after being passed over during selection for the down select list of final bidders. Less than a month later, they were allowed to compete. This is the first task order protest under GAO jurisdiction since the change in rules which allows protests for task orders greater than $10 million. It is also the first time GAO heard protests of TSA procurements since TSA was recently made subject to the FAR. I wonder if TSA is setting a precedent...

Can vendors expect to just submit a protest and get back into competition?

What is going to happen once this contract is awarded?

Is it safe to assume that additional protests will be filed and, if so, what does TSA plan to do at that point?

Is this another example of vendors positioning Protests as part of their capture strategies?

The award is anticipated by the end of the year, so all we can do is wait and see who the victorious vendor is and the effect of that award determination on post-award protests.