Court stops work on $50 billion Alliant contract

A federal judge has ordered the General Services Administration to stop all work on the $50 billion Alliant contract, ruling that the agency failed to consistently apply its award criteria when assessing the bids of the 62 vendors.
In an opinion released March 5, Judge Francis M. Allegra of the U.S. Federal Claims Court sustained many points of the protests filed by eight vendors. However, he left the door open for the contract to go forward, writing that the decision would not "prevent [GSA] and all or some of the plaintiffs from mutually agreeing to resolve this matter in such fashion as they deem appropriate."
Jim Williams, commissioner of GSA's Federal Acquisition Service, said GSA officials "are very disappointed in this decision," because they thought they had a done a good job of analyzing the bids and selecting the awardees.
The contracting team still needs to review the opinion fully and determine how to proceed. But scrapping the contract is not one of the options they will consider.  "We are absolutely committed to Alliant," he said.
The agency also does not plan to award contracts to all 62 bidders, he added.
In his ruling, Allegra also held that eight plaintiffs protesting GSA's award of the contract are correct in their assertions that they were treated unfairly.

Allegra sustained the plaintiffs’ protest in a ruling made March 3 and released March 5. Allegra enjoined GSA from making further award decisions based on several sources of information the agency used to make previous awards.

Allegra wrote that GSA is "enjoined from performing or allowing others to perform on the contract(s) awarded" under the Alliant solicitation.

However, the judge also wrote, "Nothing herein shall be deemed to prevent defendant [GSA] and all or some of the plaintiffs from mutually agreeing to resolve this matter in such fashion as they deem approrpriate."

In holding for the companies that brought the action, Allegra concluded that GSA attached “talismanic significance to technical calculations that suffer from false precision” and failed to give adequate weight to prices as it reviewed the 62 proposals for the 10-year, $50 billion information technology governmentwide acquisition contract. Those problems caused GSA to make arbitrary distinctions that were ultimately contrary to law, according to his opinion.

“Those compounding errors prejudiced the plaintiffs and oblige this court to set aside the awards in question,” according to the opinion.

Allegra said GSA made a good faith effort to distinguish among the 62 bidders. “Yet, on a variety of planes, the agency’s effort came up well short, resulting in award decisions that were arbitrary, capricious and otherwise contrary to law,” the also opinion states.

For example, the protesters said GSA gave them unequal treatment in gathering information about past performance. They agency used a survey to gather the information, but it relied on questions that were too general, the judge said. More importantly, GSA didn’t ensure that the information was relevant to the bid evaluations and didn’t check the accuracy of the survey’s sketchy information, according to the opinion.

Allegra also said “one of the grandest ironies” in the case was a fluctuating “natural break point” between the presumptive awardees and the other companies. Despite getting imprecise information, GSA evaluated proposals by calculating a technical score to the 8-thousandth of a point for each bidder based on an average of the bidder's past performance and basic contract plan.

Because of the minute yet inexact data, the break point continued to shift among the companies that may have awardees, the opinion states.

“This should have been a telltale sign that the break point here was not so ‘natural’ and that more caution was warranted in mining information from these statistics,” the document states.

The judge also ruled that GSA didn’t give enough weight to the prices the bidders proposed, despite GSA’s assertions that it adequately considered price.

Although GSA set up benchmarks related to price, it ultimately awarded spots on the contract to companies whose prices were some of the highest — for example 59, 60 and 61 out of the 62 bidders. Agency officials said the prices were fair and reasonable, even though they were twice as high as the lowest winning bidder and about 30 percent higher than the independent government cost estimate, according to the opinion.

“The agency’s inadequate treatment of price, therefore, constitutes yet another reason why the award decisions here must be set aside,” the opinion  states.

In July, GSA awarded 29 companies spots on the Alliant contract, and added Stanley Associates in January.

After the July awards, several companies that lost out on the contract filed protests with the Government Accountability Office. In September 2007, however, Serco, another losing bidder, filed a complaint in Federal Claims Court, and GAO dismissed the other protests to let the court decide the case.

For the case, Allegra upheld the protests, rejecting the awards to the 30 companies.

“The court is left with the firm conviction that the combined impact of the errors encountered here clearly prejudiced each of the protesters,” according to the opinion.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.


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