GAO Sustains Bid Protests of $17.5B DISA Contract

Encore III, a controversial contract before the Defense Department began soliciting bids from industry to purchase up to $17.5 billion in IT services, received its strongest rebuke yet – this time from the Government Accountability Office.

The contract supports the department’s Joint Information Environment, a massive IT modernization project to globally connect the military services and defense agencies to supply “information on demand,” as the request for proposals states.

GAO announced yesterday it upheld pre-award bid protests from contractors CACI and Booz Allen Hamilton on grounds that the Defense Information Systems Agency – the Pentagon’s IT arm – failed on two grounds “to provide a reasonable basis for comparing the cost of competing proposals.”

The watchdog released a statement attributed to Kenneth Patton, managing associate general counsel for procurement law at GAO, explaining the sustainment. A public report is expected once attorneys for contractors scrub the ruling of proprietary information.

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“First, although the RFP contemplates awarding some portion of the task orders on a cost reimbursement basis—perhaps as many as half of the orders, according to the record developed during the protest—the solicitation does not seek any information for, or provide for the evaluation of, any of these costs,” Patton said.

He explained GAO also concluded the cost/price evaluation scheme DISA used to eliminate proposals was arbitrary and inconsistent with procurement laws.

The sustainment didn’t come as a surprise to industry groups, two of which—the Professional Services Council and the IT Alliance for the Public Sector—blasted DISA’s choice to use a “lowest price, technically acceptable” selection process for Encore III in April. The groups wrote a letter to Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall, urging DISA to alter its procurement.

Alan Chvotkin, executive vice president and counsel of the Professional Services Council, told Nextgov on Thursday the protest should get DISA to not only “rethink the specific grounds on which the protest was sustained,” but reconsider its decision to make this solicitation LPTA.

“The protest gives DISA an opportunity to re-inspect the entire acquisition strategy for Encore III, including the concerns we raised about using LPTA as their evaluation methodology,” Chvotkin said.

DISA’s procurement officials will weigh their options when the final protest report is publicly released.