Boeing protests GSA Seat shutout

Boeing Information Services last week protested the General Services Administration's decision to disqualify the company from its $9 billion Seat Management program earlier this month. Boeing is just one of several vendors claiming that agency procurement officials misled them into believing pricing would not be a major factor in their award decision.

The agency-level protest was heard late last week by an independent authority within GSA, an agency spokesman said. He said the authority has not yet ruled on Boeing's complaints.

Based on desktop outsourcing practices in the private sector, the Seat Management program will allow agencies to turn over the acquisition and management of their desktop computing environments to contractors.

GSA selected eight vendors last month to compete for Seat Management task orders but ruled that five additional vendors who submitted the highest bids would not participate in the program.

Boeing's criticism of the procurement was echoed by officials at other companies that were disqualified, although only Boeing so far has protested. Aside from Boeing, the four disqualified contractors were Computer Sciences Corp., Electronic Data Systems Corp., Lockheed Martin Corp. and Artel Inc.

A Boeing spokeswoman said company officials would not comment on the Seat Management complaint, but a source close to the protest said it deals predominantly with GSA's apparent decision to disqualify only vendors whose proposal exceeded $500 million. The source said the decision contradicts GSA's statements before the award that it was conducting a "best-value" procurement in which price would not be the overriding factor.

"The fundamental issue in their protest is that GSA claimed this was a best-value award, and yet they awarded exclusively based on price," the source said.

Analyst Warren Suss, president of Warren H. Suss Associates, said the disqualification of the five vendors will hurt the program as a whole. "Marketing and sales are going to be a key factor to the success of a new program like Seat Management," Suss said. "The paradox of what happened here is that vendors like EDS and CSC that could have made the greatest impact in terms of marketing and sales were the ones cut off based on pricing."

Pat Ways, senior vice president of business development for CSC's civilian group, noted that the disqualified vendors were, for the most part, the most experienced in providing the type of services GSA wants.

"If you look at bidders that were eliminated, they include Lockheed Martin, Boeing, and EDS, who you would probably consider to be tier-one companies that do this kind of business," Ways said. "And we were all more expensive than the other guys. Maybe we understand the business better."

The winning vendors were Wang Government Services Inc., Multimax Inc., Litton/PRC Inc., EER Systems Inc., IBM Global Government Industry, Federal Data Corp. and TechServ (a DynCorp affiliate).

Ways said the vendors that were selected, except for IBM, "are not tier-one outsourcers." He added that he was surprised that IBM's bid of just over $257 million was so low. CSC's seat management bid of $1 billion was the highest of the 13 companies that pursued the contract.

But CSC said it does not plan to protest the Seat Management award at this time.

Another losing bidder, who requested anonymity, said officials at his company were "livid" about the way GSA conducted the procurement. The source agreed with Boeing's assertion that GSA selected vendors solely on price.

The GSA spokesman said he could not comment on the protest and said the parties were still in the process of discussing it late last week.