GAO Denies Protest of $3.01 and $2.55 Billion NASA Commercial Space Transportation Awards

The Comptroller General has denied Sierra Nevada Corporation’s protest of two contract awards for the development of commercial crew space transportation capability.

The technical evaluation subfactor of the request for proposals included consideration of the offeror’s approach to obtaining government certification of its transportation system by 2017.

Three contractors submitted proposals: Sierra, of Louisville, Colorado; The Boeing Company, Space Exploration, of Houston, Texas; and Space Exploration Technologies Corporation, of Hawthorne, California.

The source selection authority selected Boeing’s highest-rated $3.01 billion proposal and SpaceX’s second highest-rated $1.75 billion proposal over Sierra’s $2.55 billion proposal.

According to the protester, the government improperly emphasized certification in 2017 as a critical evaluation factor, and elevated the goal to a de facto mandatory solicitation requirement.

However, the RFP clearly advised offerors their proposals would be evaluated against the goal of certification by the end of 2017. Thus, consistent with the terms of the RFP, the government considered the extent to which offerors demonstrated their ability to meet this objective.

The record demonstrated “no improper consideration of schedule by the SSA.” Instead, the record showed that the SSA “conducted a fulsome analysis of the underlying strengths and weaknesses of the three proposals, highlighting areas in which the [evaluators] and SSA perceived discriminators between the proposed approaches, and concluded that [the protester’s] proposal did not represent the best value to the government.” According to the Comptroller General, “[s]uch a comparative analysis is a hallmark of a rational best-value award decision.”

The Comptroller General also rejected the protester’s challenge to the conduct of discussions, and to the price realism, technical, and past performance evaluations.

For the full text of the decision, see Sierra Nevada Corporation, B-410485,B-410485.2,B-410485.3,  January 5, 2015.

Iron Mountain Settles FCA False Billings Case for $44.5 Million

The Department of Justice has announced that Iron Mountain Incorporated and Iron Mountain Information Management LLC, of Boston, Massachusetts, has paid $44.5 million to resolve allegations under the False Claims Act that Iron Mountain overcharged federal agencies for record storage services under General Services Administration contracts.

The settlement involves contracts where Iron Mountain provided record storage services from 2001 to 2014 through GSA’s Multiple Award Schedule program.  Iron Mountain allegedly failed to meet its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and failed to comply with the price reduction clause of the GSA contracts by not extending lower prices to government customers during its performance of the contracts.  The settlement also resolves an allegation that Iron Mountain charged the government for storage meeting National Archives and Records Administration requirements when the storage provided did not meet such requirements.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the FCA.  The lawsuit was filed by a former Iron Mountain employee and a former records management industry worker, who collectively will receive $8,010,000.

For more information, see the DOJ release.

Lockheed Subsidiary to Pay $27.5 Million to Settle Overbilling Allegations

The Department of Justice has announced that Lockheed Martin Integrated Systems has agreed to pay $27.5 million to resolve allegations that it violated the False Claims Act by knowingly overbilling the government for work performed by LMIS employees who lacked required job qualifications.  LMIS is a subsidiary of Lockheed Martin Inc., headquartered in Bethesda, Maryland.

The alleged mischarging occurred on two contracts with the Army Communication and Electronics Command to provide rapid access to products and services in Iraq and Afghanistan. Individual task orders were to be separately negotiated to quickly meet the needs of CECOM.

LMIS allegedly violated the terms of the contracts by using under-qualified employees who were billed to at the rates of more qualified employees.  The overbilling allegedly resulted in greater profit for LMIS.

For more information, see the DOJ release.

GAO Announces 5% Increase in Bid Protests for FY 2014, 13% Sustain Rate

The Government Accountability Office has released its Bid Protest Annual Report to Congress for Fiscal Year 2014.  In addition to providing data concerning GAO’s overall protest filings for the fiscal year, the report includes information on each instance in which an agency did not fully implement a recommendation in connection with a bid protest. The report also summarizes the most prevalent grounds for sustaining protests.

For FY 2014, GAO received 2,561 cases, an increase of 5 percent over FY 2013.  The cases consisted of 2,445 protests, 50 cost claims, and 66 requests for reconsideration. Of the 2,458 cases GAO closed, 292 were attributable to GAO’s bid protest jurisdiction over task orders.

The report notes an effective rate of 43 percent.  This is where a protester obtained some form of relief from the agency, as reported to GAO, either as a result of voluntary agency corrective action or GAO sustaining the protest.

GAO used alternative dispute resolution procedures in 96 cases, and reports an effective rate of 83 percent for those matters.

Of the 556 decisions resolved on the merits, GAO sustained 13 percent. The most prevalent reasons for sustaining the protests were failure to follow the evaluation criteria, flawed selection decision, unreasonable technical evaluation, and unequal treatment.

42 cases, or 4.7 percent, went to hearing.

Only one agency did not implement a GAO bid protest recommendation. The decision, Asiel Enterprises, Inc., B-408315.2, September 5, 2013, involved the Air Force’s efforts to implement its Food Transformation Initiative without following applicable competitive procurement procedures.

For more information, see the full report.

Government Recovered Nearly $6 Billion from False Claims Cases

The Justice Department has announced that the federal government recovered $5.69 billion from False Claims Act cases in fiscal year 2014. According to a DOJ press release, this is the first annual recovery to exceed $5 billion. Although mortgage, housing and health care fraud dominated recoveries, DOJ aggressively pursued fraud in government procurement and other federal programs. Significant recoveries included settlements with Hewlett-Packard Co and The Boeing Co. Hewlett-Packard paid $32.5 million to resolve claims involving a contract for IT products and services with the Postal Service. Boeing paid $23 million to settle alleged false claims for labor on maintenance contracts for the C-17 Globemaster aircraft with the Air Force.

In addition, the government filed suits against a number of government contractors. In a lawsuit against Kellogg, Brown & Root and two foreign subcontractors arising from claims in connection with KBR’s contract with the Army to provide wartime logistical support, the government alleged that KBR employees took kickbacks from two subcontractors in return for favorable treatment in the award and performance of numerous subcontracts for maintenance, transportation and other services in Iraq. Also, the government filed a complaint against global software provider CA Inc. after intervening in a whistleblower suit against the company. The government’s complaint alleged that CA knowingly overcharged the government for software licenses and maintenance in connection with a General Services Administration Multiple Award Schedule contract.