Legal battle over FAA outsourcing decision begins

An appeal challenging the Federal Aviation Administration's February decision to outsource more than 2,000 flight service jobs could put a crimp in the agency's preparations for transferring the work to Lockheed Martin Corp. this fall.

Procedural errors and oversights raise questions about the FAA's contracting decision, the bid protest alleges. The appeal, filed Friday on behalf of the in-house team that lost the job competition, asks the agency's Office of Dispute Resolution for Acquisition to order a fresh team of officials to rethink the award.

Until the reevaluation is complete, the FAA should suspend arrangements for an Oct. 1 handoff to Lockheed, said Cyrus Phillips IV, the in-house team's attorney, in the protest. The errors were substantial enough that a review "may well" result in the selection of a different flight service provider, he wrote. Money spent on the transfer to Lockheed would then have been wasted.

Lockheed already has held open houses at nearly 20 of the 58 flight service stations encompassed in the job contest in an effort to recruit federal specialists. The contractor has guaranteed all of the roughly 2,300 remaining government employees jobs at salary and benefits levels comparable, if not better, than at the FAA.

But by accepting Lockheed's offers, specialists not yet eligible to retire from the government would lose federal pension benefits. The Lockheed jobs also would require specialists working at the 38 facilities scheduled to shut down over an 18-month period beginning in October to move.

As of early March, Lockheed had received about 900 applications, according to Joe Wagovich, a company spokesman. The contractor is asking the federal specialists to send in applications by April 15 and plans to mail offer letters on May 1.

"These job offers will put the air traffic control specialists in a conflicted and confused position," Phillips wrote in the appeal. "They will have stress about whether to accept the job in lieu of not having a job, or whether to turn down the job offer awaiting the outcome of this contest."

Acceptance of the Lockheed's offers could also take flight service specialists out of the running for preferred placement programs designed to help them find other FAA jobs, Phillips noted. The specialists provide weather briefings and other services to pilots of non-commercial aircraft, but do not keep planes a safe distance from one another. A number of them, however, would be qualified to work at air traffic control towers or elsewhere within the agency's air traffic organization.

"This certain prospect of immediate, irreparable injury is sufficient to compel the immediate suspension of further procurement activities by Lockheed Martin," Phillips argued in the protest.

If the FAA allows the four blue-chip companies that submitted bids and the in-house team to send in revised proposals, and asks a team composed of "individuals whose present employment is entirely independent from the supervision, influence and control" of officials involved in February contract award, to reevaluate the proposals, the in-house team could prevail, Phillips said.

The in-house proposal, submitted by a team that included federal specialists and employees of IT contractor Harris Corp., would cost the FAA $2.1 billion over 10 years, $166 million more than the agency agreed to pay Lockheed over the same time, according to figures cited in the appeal. But the difference in cost could be inflated because FAA source selection officials failed to adequately consider all of the expenses that will be incurred in implementing Lockheed's proposal, Phillips claimed.

"Nowhere does the source selection evaluation board or the source selection authority analyze the obvious differences between the solutions, and the systems, proposed by Lockheed Martin, and [those] proposed [by the in-house team]," the appeal stated. For example, Lockheed plans to construct three hub facilities and renovate 17 stations. The contractor also would like to introduce equipment that has yet to be certified and connected to other FAA technological systems. Employees would need to be trained on the equipment.

By contrast, the in-house team proposed reducing 58 flight service stations to four buildings already equipped with the FAA telecommunications infrastructure. Specifically, the proposal suggested hubs in Carlisle, Pa., Kansas City, Kan., and Hood River, Ore., and a satellite station near Honolulu International Airport. The in-house team also suggested using flight plan and weather briefing systems already familiar to federal specialists.

The source selection officials comparing the proposals didn't adequately weigh these differences, Phillips stated in the appeal. The officials also penalized the in-house team for circumstances beyond its control, he argued. For instance, the in-house team received a lower rating because it didn't offer to pay the FAA a penalty fee if it fails to meet performance standards. Instead, it offered to provide the agency with a plan to correct any deficiencies.

"It should have been apparent to the source selection organization that a public sector entity . . . could not offer monetary credits by docking the pay of its federal employees," the bid protest noted.

FAA spokesman Paul Takemoto declined to comment on the protest. The agency does not discuss pending litigation, he said.

James Washington, the agency tender official who headed the in-house team, declined to elaborate on his reasons for deciding that the protest, filed by Phillips at his request, would be appropriate. In an e-mail sent to flight service stations Friday, he informed the federal specialists of the appeal and urged them to stay focused on work.

"I realize that this contest will create more questions and uncertainty for our employees," Washington wrote. "I know the next few weeks and months will be difficult. Please continue to do what you have always done-provide outstanding service for our customers."

The FAA's dispute resolution office asked competitive sourcing officials to respond to the in-house team's request for a suspension in procurement activities in time for a preliminary scheduling conference. That meeting will take place Wednesday morning unless lawyers for both parties agree on an alternate time.