Air Force to rebid IT contract after protests from losing companies

May 6, 2012

The U.S. Air Force plans to restart competition on a sizeable technology contract following protests from a dozen losing bidders.

The April 16 award for network equipment, valued at as much as $6.9 billion, topped the more than 300 military contracts announced last month, with a total potential value of at least $24.4 billion, according to government data. Lockheed Martin, the Pentagon’s No. 1 defense contractor, received contracts estimated at $2.48 billion, the most of any single company.

Rival General Dynamics and technology company GTSI were among nine contractors picked to share the network equipment contract. Harris Corp., based in Melbourne, Fla., and Dell, based in Round Rock, Tex., were among those challenging the deal, according to the General Accountability Office, the investigative arm of Congress, which handles bid protests.

The companies’ protests were based in part on claims that the government failed to recognize artificially low offers and did not hold meaningful discussions with bidders. It is unclear how the decision will affect the nine companies selected for the award.

“On a competition of this magnitude, the Air Force wants to get the very best products at the best prices, and we want to have a fair and transparent competition on a level playing field,” Jennifer Cassidy, a spokeswoman for the service, said in an e-mail. “We want all the offerors to be assured that they understand what we want.”

The Air Force on April 26 informed the GAO, which handles bid protests, that “it had decided to reopen negotiations with all offerors in the competitive range,” according to Cassidy’s e-mail.

Ralph White, managing associate general counsel for procurement law at the GAO, said the office granted the Air Force’s request to dismiss the protests after it pledged to take corrective action.

“By definition, that means for now, all of these companies are still in the competition,” he said in a phone interview.

The contractors would provide biometric hardware and software to confirm identities using physical identification such as fingerprints and irises. The agreement through 2022 is part of a $24 billion program called Network-Centric Solutions-2, or NetCents-2, to consolidate the service’s technology purchases.

The challenges were not surprising, “because nobody wants to lose the ability to sell to the Defense Department,’’ said Mark Amtower, owner of a Highland, Md., company that advises contractors on government business.

Federal spending through multiple-award contracts rose 4 percent to $132 billion in fiscal 2011 from the previous year, while spending on all U.S. government contracts declined 1 percent to $530 billion during the same period, according to a March 27 Bloomberg Government study. The government uses multiple-award contracts to try to lower prices, according to the study.

“MAC contracts have become the gateway through which agencies buy IT services and products,” Larry Allen, president of Allen Federal Business Partners, a consulting company in McLean, said in a phone interview. “If you don’t have keys to the gate, then you have a tough time doing business with the government.”

The agreements ensure that the government gets “best value,” Jeremy Wensinger, chief operating officer at GTSI, said in an e-mail. The company anticipates pursuing more of these contracts in the future, he said.

A spokeswoman for General Dynamics declined to comment.

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