Groundswell challenges Army's award of business system consolidation contract

Groundswell has gone to the U.S. Court of Federal Claims with a protest against the Army’s award of a contract to consolidate a group of business systems using the latest version of SAP’s software.

In early October, Accenture's U.S. federal subsidiary won the contract known as Enterprise Business Systems – Convergence. Accenture Federal Services is a long-time incumbent and provider of SAP software to many agencies, including the Army.

Groundswell filed its protest at the court on Wednesday under the name of one of its subsidiaries, Telesto Group.

The initial award is worth $69.4 million, other sources place the ceiling value at around $1 billion over its eight-year run.

Groundswell's complaint is sealed, so the legal grounds of its protest are not available.

Army, Accenture Federal and Groundswell officials declined requests for comment.

But in tracking this procurement over the last year, there are several areas that could be the basis for Groundswell’s protest.

Groundswell is likely taking issue with how the Army conducted evaluations and discussions with bidders, along with the branch's conclusion that Accenture Federal represented the best-value choice for the project.

The EBS-C effort is focused on consolidating these five logistics and financial business systems into a single environment:

• Army Enterprise Systems Integration Program
• General Fund Enterprise Business System
• GFEBS-Sensitive Activities
• Global Combat Support System-Army
• Logistics Modernization Program

The Army ran a different kind of competition for EBS-C, using an Other Transaction Authority process that began with three competitors. The competition then became a run-off between Accenture and Groundswell after IBM dropped out.

The Army wanted to “transform the way we have done business,” Col. Matthew Price told Washington Technology in September 2023.

Under the OTA, Accenture and Groundswell built prototypes using SAP software in the Army’s operational environment. The choice of Accenture was based on an evaluation of those prototypes.

“We’ve taken this very complex endeavor and broken it down into manageable, measurable intervals,” said Lee James III, acting project manager for EBS-C, at the time of that same September 2023 interview.

The OTA approach also emphasized using commercial best practices. The Army team operated with the motto: “Commercial as possible, military as necessary.”

The Army required both teams to use SAP because it is the dominant ERP software used by the service branch. The Army said that sticking with SAP was the most effective way to move forward with the consolidation.

Accenture also is a long-time provider of SAP to the Army and the rest of the Defense Department, going back nearly 25 years when it won the Defense Logistics Agency Business Systems Modernization contract in 2000.

That $500 million, five-year contract was the beginning of SAP’s rise in the defense market with Accenture as its most common systems integration partner.

Given that background, it should not be surprising that Accenture won the EBS-C contract.

But there is another side to that perspective as well, because the Army made it a point of pride that it was trying something new with the OTA. But the Army ended up picking a long-entrenched player over the new challenger.

We’ll have to watch to see if Groundswell leans on that point in its protest.

For now, the Groundswell complaint is sealed as it requested. Eventually, the court will release a redacted version of the complaint.

Accenture will likely join the Army as what is known as a “defendant intervenor” because as the winner it has a stake in the outcome.

Judge Richard Hertling has been assigned to the case. His first action was to grant Groundswell’s motion to seal the complaint.

Hertling will set a schedule for filings and future motions. One motion we expect Groundwell to file is a request for what is known as a “Stay,” which would prevent the Army and Accenture from moving forward with the contract.

Groundswell filed the protest at the court because the Government Accountability Office does not have authority over OTA-related protests.