The GAO found so many errors that it recommended that the contract be rebid, and not just reevaluated in certain requirement areas as many, including many of us here at TWB, had expected.
On our documents site we have posted the official GAO statement on the decision for you to view in full.
We will completely analyse the GAO statement later, but we will comment that the sheer number of things the Air Force did wrong, and the implication that they may have been duplicitous in at least one area (see #4 below), is quite extraordinary.
Defense Secretary Gates and the head of DoD Procurement, John Young have continuously gone on record in support of the tanker contract decision on the belief that the selection was done correctly. It is hard to imagine that we will not see more Air Force personnel be fired or quietly announce their retirement in as a result of the GAO's slap down of that service's procurement missteps.
The list of things the GAO found wrong with the selection of the KC-30 is long. Specifically, they state they sustained the protest for the following reasons:
1. The Air Force, in making the award decision, did not assess the relative merits of the proposals in accordance with the evaluation criteria identified in the solicitation, which provided for a relative order of importance for the various technical requirements. The agency also did not take into account the fact that Boeing offered to satisfy more non-mandatory technical “requirements” than Northrop Grumman, even though the solicitation expressly requested offerors to satisfy as many of these technical “requirements” as possible.The GAO then closes their statement by recommending the following:
2. The Air Force’s use as a key discriminator that Northrop Grumman proposed to exceed a key performance parameter objective relating to aerial refueling to a greater degree than Boeing violated the solicitation’s evaluation provision that “no consideration will be provided for exceeding [key performance parameter] objectives.”
3. The protest record did not demonstrate the reasonableness of the Air Force’s determination that Northrop Grumman’s proposed aerial refueling tanker could refuel all current Air Force fixed-wing tanker-compatible receiver aircraft in accordance with current Air Force procedures, as required by the solicitation.
4. The Air Force conducted misleading and unequal discussions with Boeing, by informing Boeing that it had fully satisfied a key performance parameter objective relating to operational utility, but later determined that Boeing had only partially met this objective, without advising Boeing of this change in the agency’s assessment and while continuing to conduct discussions with Northrop Grumman relating to its satisfaction of the same key performance parameter objective.
5. The Air Force unreasonably determined that Northrop Grumman’s refusal to agree to a specific solicitation requirement that it plan and support the agency to achieve initial organic depot-level maintenance within 2 years after delivery of the first full-rate production aircraft was an “administrative oversight,” and improperly made award, despite this clear exception to a material solicitation requirement.
6. The Air Force’s evaluation of military construction costs in calculating the offerors’ most probable life cycle costs for their proposed aircraft was unreasonable, where the agency during the protest conceded that it made a number of errors in evaluation that, when corrected, result in Boeing displacing Northrop Grumman as the offeror with the lowest most probable life cycle cost; where the evaluation did not account for the offerors’ specific proposals; and where the calculation of military construction costs based on a notional (hypothetical) plan was not reasonably supported.
7. The Air Force improperly increased Boeing’s estimated non-recurring engineering costs in calculating that firm’s most probable life cycle costs to account for risk associated with Boeing’s failure to satisfactorily explain the basis for how it priced this cost element, where the agency had not found that the proposed costs for that element were unrealistically low. In addition, the Air Force’s use of a simulation model to determine Boeing’s probable non-recurring engineering costs was unreasonable, because the Air Force used as data inputs in the model the percentage of cost growth associated with weapons systems at an overall program level and there was no indication that these inputs would be a reliable predictor of anticipated growth in Boeing’s non-recurring engineering costs.
We recommended that the Air Force reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with our decision. We further recommended that, if the Air Force believed that the solicitation, as reasonably interpreted, does not adequately state its needs, the agency should amend the solicitation prior to conducting further discussions with the offerors. We also recommended that if Boeing’s proposal is ultimately selected for award, the Air Force should terminate the contract awarded to Northrop Grumman. We also recommended that the Air Force reimburse Boeing the costs of filing and pursuing the protest, including reasonable attorneys’ fees. By statute, the Air Force is given 60 days to inform our Office of the Air Force’s actions in response to our recommendations.
Normally the GAO takes a few weeks to release their full redacted decision report, but several offices on the Hill have been told that this process will be sped up significantly because of the sensitivity of the issue. As such, we expect see the full redacted GAO report out in less than a week.
Also, we have removed the Should Congress Stop the EADS Tanker Contract poll as the deadline to vote ended, and the GAO decision renders it moot.
For those 935 of you who voted no, you can feel vindicated as Congress will not have to stop the contract. For those 714 of you who voted yes, you can feel good that the tanker contract selection of the KC-30 team is for now effectively stopped.