GAO denies second protest of Navy’s $7.7 billion NGEN contract

For the second time in as many weeks, the Navy has prevailed in legal challenges to a $7.7 billion contract to operate its enterprise IT networks, potentially the largest information technology contract in government history.

The Government Accountability Office said Wednesday evening that it had denied a protest filed by Perspecta, the incumbent vendor on the Next Generation Enterprise Network (NGEN) contract. The Navy decided in February to award the largest portion of NGEN’s successor to Leidos.

The GAO decision came five days after the protest arbiter turned back another protest that had been filed by another losing bidder, General Dynamics Information Technology (GDIT).

In the Perspecta case, the company had claimed Leidos got an unfair advantage in the NGEN competition because the firm had recently hired a former government official, and that Leidos had an organizational conflict of interest, said Ralph White, GAO’s managing associate general counsel for procurement law.

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“GAO denied the protest concluding that the Navy reasonably determined that Leidos did not have an unfair competitive advantage, and the Navy’s decision to waive any remaining conflict complied with regulatory requirements,” White said in a statement. “GAO also concluded that the Navy’s evaluation was reasonable and that, to the extent that there were errors in the agency’s evaluation, those errors did not result in competitive prejudice to Perspecta because its proposal remains higher-priced and lower-rated than Leidos’s proposal.”

In GDIT’s case, GAO denied that company’s claims that the Navy had made improper assumptions about the pricing it offered in its bid.

Both of the losing NGEN bidders still have the option of lodging separate protests at the Court of Federal Claims, but neither has done so thus far.

The contract at issue is one of two the Navy solicited in its latest round of NGEN contracting, called NGEN-R. The Navy refers to the larger portion as Service Management, Integration and Transport (SMIT), and wants to use the vehicle, in part, to consolidate its remaining legacy networks into the Navy-Marine Corps Intranet.

A smaller contract, for end-user hardware, went to HP’s government services subsidiary, HPI Federal LLC, last October. That portion of NGEN-R, valued at up to $1.4 billion, never faced a bid protest, but Navy officials are still working to transition those hardware services from Perspecta to HP.