The Veterans Affairs Department’s multibillion dollar information technology contract – called Transformation 21 Total Technology (T4) program – is under siege.
Two more vendors have lodged protests with the Government Accountability Office and a third vendor sent a complaint to the Court of Federal Claims.
General Dynamics IT and Standard Communications filed objections with GAO on Aug. 8, joining IBM as unsuccessful contractors, who filed protests based on VA’s evaluations of their bids. IBM also filed a supplemental protest on Aug. 8
Meanwhile, D&S Consultants filed its second protest, this time with the Court of Federal Claims, for a different issue than the three other protestors. D&S is unhappy about VA’s decision to disqualify the company from making a final bid on the procurement.
Last month, VA chose 14 vendors under the T4 multiple award contract. The contract has a ceiling of $12 billion over five years and will be the agency’s main contract vehicle for a wide variety of IT purchases.
Even as T4 has come under fire lately, VA awarded SAIC the 15th spot on the contract. Both a SAIC spokeswoman and VA spokeswoman confirmed the agency’s decision, but neither would comment further.
‘End run’ around GAO?
IBM’s initial protest put the contract on hold because under the Competition in Contracting Act, any bid protest filed in the first 10 days after the unsuccessful vendors’ debrief must be stayed.
But VA decided it had an “urgent and compelling” need to continue with the contract instead of waiting for GAO to resolve the protests, said VA spokeswoman Jo Schuda in an email to Federal News Radio.
Additionally, VA has been awarding non-competitive contracts to the T4 winners, which Schuda said the agency is allowed to do to maintain the project’s minimum requirements.
“Award of initial task orders was done non-competitively — this is not an allegation but permitted by the regulation and was done in accordance with the regulation,” Schuda wrote. “Every prime contractor received (or is in the process of receiving) an initial task order non-competitively to ensure that we cover the requirements for the minimum under their IDIQ contract. In accordance with federal contracting procedures, the T4 IDIQ contracts contained terms providing that the government will order a minimum quantity of work. Failure of the government to comply with the contract terms can open the government to claims from the contractors.”
However, while the T4 minimum guarantee is only $50,000 per winning vendor, VA’s awards are topping $65 million, said Ashok Mehan, the founder of FedMine a market research firm. He said FedMine can confirm nine task orders under T4, including $9 million contracts to Booz Allen Hamilton and Harris Corp. and another one for almost $8 million to 7 Delta.
And, it turns out the issuing of minimum guarantees is somewhat rare.
“Civilian agencies issue it not very often at all,” said Bill Shook, an attorney with Shook Doran Koehl, who is not involved in the protests. “You will see it issued by DoD agencies when it involves military necessity.”
Shook said the only way to stop the contract from going forward would be to file for a temporary injunction with the Court of Federal Claims.
This is a definite option, according to lawyers involved in the case.
Cy Alba, a partner with PilieroMazza in Washington who represents Standard Communications, said he thinks VA is trying to do an end run around GAO and possibly the Court of Federal Claims.
“It seems a little dubious, the rationale behind the awards,” Alba said. “This is somewhat speculation, but because of a recent case I had, the reason these awards were made could be an attempt to frustrate the protest process. If, post-protest, a contract continues far enough there’s less likelihood the further and further it goes that GAO and the Court of Federal Claims will render meaningful relief aside from simply paying your bid and proposal costs. It’s less likely they will upset an award or tell to the agency to go back and reevaluate because they made errors. Even if they find errors, they’ll say it’s too far down the tracks so we can’t interrupt it, it’s not in the best interest of the government. Instead we will just give you your bid and proposal costs.”
Calls to the attorneys for IBM and General Dynamics IT were also not returned. A General Dynamics spokesman said it is company policy not to comment on bid protests.
Case could be settled in court
Currently, there is a hold on the contract for competitive awards through Sept. 15, said Anthony Anikeeff, a partner with Williams Mullen, who represents D&S Consultants.
He said VA agreed to a stay with the Court of Federal Claims after D&S filed a protest in July.
Anikeeff said his client is challenging VA’s decision to exclude D&S from the competitive range.
“Our case is different than the other protests; we are trying to get back into competitive range to compete for the award,” Anikeeff said.
D&S Consultants lost its initial case before GAO along with STG, both of which protested being excluded from the down-select to compete for a spot on the contract.
The protests from IBM, GDIT and Standard Communications came after VA made awards.
Ralph White, GAO’s managing associate general counsel for procurement law, said he couldn’t say much about the bid protests except all three vendors thought VA misevaluated their bids.
Alba said his client believes VA misevaluated Standard Communications proposal in two main ways.
“One of the awardees, Adams Communications and Engineering Technology, was given an unacceptable rating for one of the three sample task orders, so you’ve got an awardee who in our opinion missed the boat on one-third of contract’s critical requirements,” Alba said. “So how could they be awarded a contract over Standard who got a rating of good overall for those three task orders?”
Alba said a second major issue is VA awarded contract to several offerors who have not had good past performance experience working at VA. He said a May 2011 VA inspector general report criticized the agency for hiring contractors who pose high risk because they have no experience at the agency.
“There are a lot of risks VA didn’t take in to account,” he said referring to T4’s awardees.
GAO is expected to decide IBM’s case by Nov. 10, and GDIT and Standard Communications’ by Nov. 16.
Alba said GAO could dismiss those three protests because D&S Consultants filed with the Court of Federal Claims. The court has precedence over GAO when it comes to bid protests. If GAO does dismiss, the vendors would have to re-file with Court of Federal Claims.
“Yesterday was the deadline to submit comments to GAO about why GAO should maintain jurisdiction, but we will see what happens,” Alba said.
Anikeeff said he expects the protests to end up in the Court of Federal Claims.
“GAO takes the view that the subject matter is broadly defined, and they believe there are some connections between our protest and other protests,” he said. “They believe if we would succeed in our protest, it would affect the protests before them.”