Protest of huge IT services contract upheld

A federal judge this week ruled in favor of a protest filed by eight companies that submitted unsuccessful bids for the General Services Administration's Alliant contract. In sustaining part of the protest, the judge acknowledged that GSA had been "arbitrary and capricious" in awarding the contract and prohibited the agency and its contractors from performing any work related to Alliant.

In a decision released Wednesday afternoon, Judge Francis Allegra of the U.S. Court of Federal Claims wrote that GSA attached "talismanic significance to technical calculations that suffer from false precision" and the agency "made distinctions that, in their own right, likely were arbitrary, capricious and contrary to law, but certainly became so when the agency failed adequately to account for price and to make appropriate tradeoff decisions."

In his conclusions, Allegra enjoined GSA from relying on the faulty data and ordered the agency to consider price and price reasonableness in all future Alliant awards.

"[The decision] basically stops the Alliant program dead in the water," said Ray Bjorklund, senior vice president and chief knowledge officer for FedSources, a McLean, Va. consulting firm. "The ruling suggests that perhaps GSA and the plaintiffs could work it out; it's still very possible. But it puts responsibility back on GSA to work out a solution to all parties' satisfaction." Bjorklund added that the decision also could put Alliant Small Business at risk if the same selection process were used.

Alliant is a $50 billion, 10-year governmentwide acquisition contract that federal agencies were supposed to begin using in 2007 to buy an array of IT services. Sixty-two companies submitted bids and 29 were selected as service providers on July 31. Following the contract award, eight companies filed protests arguing that the process used to evaluate them was arbitrary and contrary to the law. The protests were then combined under the protest filed by Serco Inc. in federal claims court.

According to the ruling, GSA assigned adjectival (verbal) ratings to each bidder on the basis of numerous technical factors and then converted those descriptive evaluations into whole numbers (3, 4, 5 etc.) that were used to calculate a technical score for each bidder. The fact the scores were carried out to three decimal places (e.g. 3.987) led to the judge's reference to "false precision."

From those scores the agency identified 28 "presumptive awardees" before conducting further price analysis. In his ruling, Allegra noted that despite including some companies with the highest price estimates, none of the original 28 presumptive nominees was displaced by a lower-priced bidder, leading to the conclusion that price was not a significant factor in awarding the contract.

The heart of the protest is a survey conducted by Calyptus. The polling firm was employed to check references and research the past performance of contract bidders, doing what Bjorklund termed an inherently governmental task. "It's not unusual for outside contractors to help with government sources selection activity, but it sounds like GSA handed much of that responsibility to Calyptus, and then didn't really follow through with quality assurance to make sure what they were providing would be useful in the selection process," Bjorklund said.

In his ruling, Allegra noted that given Calyptus' lack of familiarity with ratings scales and the Alliant procurement, it was hardly surprising that the answers received did not provide much useful information. As evidence, she wrote, "more than one reference simply responded 'very good' 'very well' or 'very effectively'…it was left to the evaluators to extrapolate a rating out of these two-word descriptions."

In response, Dirk Fillpot, senior communications adviser for GSA said, "GSA is committed to addressing the issues identified in the ruling and moving forward with the Alliant contract to provide the best-value IT product and service solutions federal agencies need to achieve their missions."

"We're obviously pleased with the decision," said Chuck Saffell, chief executive officer of Nortel Government Solutions, one of the plaintiffs. "We're eager to help GSA and federal agencies achieve their program goals." Stephanie Ambrose, vice president of CGI Federal, another plaintiff, said the process "worked as it should." and expressed her company's pleasure in the decision. "We have believed all along that we should have been selected by GSA to receive an Alliant award," she said.