The Tampa Tribune / TBO.com
Military News
TAMPA — A series of protests and lawsuits has bogged down a $1.5 billion U.S. Special Operations Command program designed to maximize competition and improve performance of contracts for a broad array of services, training and support.
Even before decisions were made about which companies could try to win contracts under the program, administered at Socom headquarters on MacDill Air Force Base, protests had been filed with the Government Accounting Office from bidders unhappy with the process. Additional protests were lodged in August after Socom announced who won the right to bid on work through the new Socom-Wide Mission Support program, or SWMS.
Socom’s response, essentially, was to blow up the bulk of the program and start from scratch, drawing a lawsuit that claims Socom engaged in arbitrary, capricious and unlawful practices. The command’s responses also have raised concerns that small businesses wasted time and money bidding on contracts they might otherwise have avoided.
Socom officials said they cannot comment on the lawsuit, but they do say decisions were made to ensure fairness, competitiveness and the most efficient use of taxpayer dollars.
It is all part of what one local contractor calls the “new norm” for doing business with the military in a climate where companies are in an increasingly desperate fight for diminishing defense dollars.
According to a recently released Pentagon study, mandatory cuts left less money for contracts, including those issued by Socom. Across the military, spending on contracts dropped from $320 billion in fiscal 2012 to $287 billion in fiscal 2014. Further cuts are expected over the next decade.
“This is the new norm as so many companies are vying for a finite amount of dollars that has been cut and cut and cut,” says Tim Jones, president and CEO of Cybrix Group, a Tampa information technology services and support firm that was just added to a list of small businesses eligible to bid on work under the SWMS program.
“If a company has spent $25,000 or $100,000 or $1 million on biding for a contract and lost, there is a minimal cost to filing a protest with a potentially huge upside.”
Statistics compiled by the Congressional Research Service back up what Jones said.
The number of bid protests against the Department of Defense closed out by the GAO each year rose steadily between 2001 and 2013, more than doubling from about 600 to about 1,400 before dropping back to about 1,200 in 2014, according to a recently released CRS report on bid protests.
This new norm has frustrated both Socom, which is responsible for training and equipping the nation’s commandos, and contractors, who have invested millions just to qualify for preparing the complex bid proposals. Some say they now are being forced to cut pay, trim jobs and consider going out of business.
A 308-word announcement in the Pentagon’s Oct. 13 daily roundup of contract awards was the latest flashpoint in the SWMS controversy.
It was an update showing that the number of small businesses eligible to bid on contracts under SWMS had quadrupled from eight to 32.
SWMS is planned as a replacement for the Global Battlestaff and Program Support, which went on line in 2010.
Small businesses make up one of three categories in the SWMS program, which sets aside portions of Socom’s $4 billion annual acquisition and sustainment funding to buy services quicker and cheaper. Interested companies submitted proposals laying out their capabilities and cost estimates, and the command selected winners to compete against each other for all future contracts, known as task orders.
The top tier, known as Group A, initially consisted of four large companies that would compete on up to $900 million in contracts over the next five years to provide services such as intelligence analysis, testing and evaluation, program management and engineering support, said Lt. Cmdr. Matt Allen, a Socom spokesman.
The second tier, known as Group B, selected small companies to compete for as much as $450 million over five years to provide education, training and management services, Allen said.
A third tier, known as Group C, is a single contract worth up to $150 million over five years that will go to a business owned by a service-disabled veteran. The contract will be for services including budget, system requirements and procurement support, Allen said.
Protests were filed against the command in all three tiers. The Group A protest is in court, a Group C protest was denied Friday by the GAO and Group B was rendered moot when Socom increased the number of eligible companies.
The command says it opted to expand the list of Group B awardees to address problems raised in a protest. According to a copy of the protest obtained by the Tribune, ITility, of Herndon, Virginia, complained that Socom did not properly take into account the cost of paying high-quality, well-trained personnel to maintain continuity of services.
That move came after a decision last month to rebid Group A and rescind task order awards, in the wake of protests filed by three unsuccessful bidders.
“When USSOCOM views concerns expressed in protests from our industry partners as valid, we will take corrective action in advance of waiting for the decision from an external review,” Allen says, speaking of the expansion of Group B. “These decisions are always made to ensure strict adherence to the letter and intent of our solicitation and ensure equitable evaluation of all offeror proposals.”
Socom “agreed with one offeror’s concern that we had inadequately reviewed their proposal and took corrective action,” Allen says.
But a consultant representing dozens of mostly small companies who do business or are seeking to do business with Socom has a different take.
“Clearly, they screwed it up and we are paying the price,” says Leslie Leaver, who used to work for a company doing business with Socom and who now runs Strategic Business Solutions.
On Aug. 18, Leaver hosted a meeting between Socom and representatives of the defense industry to see how industry and government can work to curb the trend of bid protests.
“My clients spent hundreds of thousands of dollars each bidding on this program,” she says. “When a protest is filed, it delays procurement, delays the opportunity to earn back that money you’ve spent to bid the thing.”
The businesses came away from that meeting feeling good about the future, “only to be followed up with Socom’s decision to respond to the protest by adding 24 more companies,” Leaver says.
Quadrupling the number of companies eligible to bid reduces the chances any one competitor can obtain work from Socom, making it harder, and in many cases impossible, to recoup the cost of making a bid. Many companies, she adds, would have opted not to go through the time and expense of bidding on the SWMS program had they known there would be so many other awardees.
This is especially true given that the government had told industry all along there would only be four to six awardees.
At least one company, she says, is considering shutting down.
Six of the eight companies on the original Group B list are from the Tampa area.
Jones, who runs Cybrix Group, agrees that more is not necessarily merrier.
“It helps us, in that we were not one of original eight,” says Jones, whose company is one of six in the Tampa area to be added to the list. “At least we get the opportunity to bid. But it is watered down now that 32 companies have to bid these tasks.”
The bottom line, says Jones, is that in an effort to trim overhead to make more attractive bids, companies are going to be cutting costs.
“There will be reductions in pay and benefits across the board,” says Jones, estimating the range at 5 to 25 percent.
From Socom’s perspective, there is no dilution of value by having more companies eligible to bid. Nor were there any set limits on the number of companies that could take part.
“Each awardee has the same opportunity to compete on specific task order requirements,” Allen says. “When Socom sent out the solicitation, we did not limit ourselves to the number of awardees we would ultimately seek. No set awardee number was part of the solicitation process. Instead, the goal was always to ensure competitiveness, efficient use of our limited taxpayer dollars and to get the best services for our operators.”
The additions were made, Allen says, after a protest was filed.
“After we announced the initial group of awardees and reviewed the valid concerns in an agency level protest of one offeror, we determined a number of contracts offered value to the government,” he says.
On July 30, Socom announced it was awarding the right to bid on $900 million worth of task orders to the largest part of SWMS, Group A — to Booz Allen Hamilton, CACI, Raytheon Blackbird Technologies and MacAulay-Brown. That same day, the command awarded two task orders to Booz Allen Hamilton and one to MacAulay-Brown.
A little more than two weeks later, the protests started rolling in from Academi Training Center, Fulcrum IT Services and Jacobs Technologies, according to documents filed in a lawsuit over the SWMS Group A contract award. Jacobs had been a prime contractor on the program SWMS was replacing.
The three companies had several claims, but all stated that Raytheon, which recently purchased Blackbird, had “an impermissible conflict” which should have rendered it ineligible to bid on SWMS.
On Sept. 3, Socom told GAO it was going to take “corrective action” because it did not “properly evaluate” discussions of organizational conflict of interest plans.
Saying that its failure to do so was “inconsistent with the terms of the solicitation,” Socom threw out the four awards given under SWMS Group A and rescinded the task orders, according to legal documents.
With so much money at stake, and its bid information turned over to the companies protesting the Group A award, MacAulay-Brown filed a protest lawsuit in U.S. Court of Federal Claims in Washington D.C., alleging that by forcing the rebid of Group A, Socom engaged in arbitrary, capricious and unlawful practices.
The company argued unless the court intercedes, it will “suffer irreparable harm … and require MacAulay-Brown to expend significant resources to compete for the same award again, this time at a competitive disadvantage because its price has been exposed to its competitors.”
Because the matter is now in court, Socom officials offered only a limited response.
Once a decision is rendered, Socom “will continue to follow all federal acquisition regulations and ensure we work with our industry partners in a way that ensures fairness, competitiveness and the most efficient use of taxpayer dollars,” Allen says.
Neither MacAulay-Brown officials nor their attorney have responded to requests for comment.
Jones, CEO of Cybrix Group and a Navy veteran, says the entire Defense Department “is in a very tough situation” when it comes to the procurement process.
“You can’t put it on the local acquisition people,” he says. “They work very hard to get the biggest amount of work and services and products for finite dollars. They are trying to be the best stewards of the taxpayer they can. It’s a really tough position.”
Leaver, representing contractors, says Socom has brought these problems on itself.
By reworking both Groups A and B, she says, the command “set a precedent that will take years and years to overcome.”
Socom, she says, “just told industry that if you don’t like our award decision, just protest it and we will give it to everybody.”
That makes no sense, says Leaver, given the chances a protest will ever be sustained.
GAO statistics show that since 2008, less than 4 percent of protests against the Department of Defense have been sustained by GAO, according to CRS.
“That tells you if just stand up to protests, they would most likely get dismissed,” Leaver says. “Then you can move forward with actually awarding and executing work.”
Socom doesn’t use how seldom a protesting bidder wins as a metric for determining how to take action.
“That is not our measure of success,” says Allen. “Effective teaming with our industry partners in support of our mission is.”
Original URL: http://www.tbo.com/list/military-news/companies-irked-by-how-socom-awards-contracts-20151018/
