A Calamity of Errors: GAO Sustains Boeing's Protest of the Refueling Tanker Contract
Citing 10 reasons in a 67-page opinion, GAO sustained a protest filed by The Boeing Company (“Boeing”) of the highly-publicized award by the Air Force to Northrop Grumman Systems Corporation (“Northrop”) for its new generation aerial refueling tankers. Boeing prevailed on several garden variety protest grounds often seen, but usually unsuccessful in GAO protests. Here, GAO found that the Air Force made “significant errors” in evaluating proposals, engaged in inadequate and unequal discussions, improperly evaluated costs, and therefore made an improper source selection decision. GAO also addressed several other arguments, including those related to timeliness and document requests under GAO regulations.
The Agency Made Several Errors In Its Evaluation of Proposals
Boeing’s protest included several specific grounds related to evaluation of both proposals. Boeing prevailed on many of these grounds. In sustaining Boeing’s protest, GAO pointed to several flaws in the agency’s evaluation of proposals, finding that: (1) the agency did not assess the relative merits of proposals in accordance with evaluation criteria; (2) the agency gave credit to Northrop for exceeding a performance objective when the RFP specified that no credit would be given for exceeding objectives; and (3) the agency unreasonably determined that the awardee could meet the requirements of the solicitation.
First, Boeing objected to the agency’s evaluation of both proposals under the key system requirements subfactor, one of the most important subfactors in the procurement. The RFP directed offerors to meet “as many ….requirements as possible” under this subfactor. GAO found that the record did not demonstrate that the agency had given any credit to Boeing for meeting more of the subfactors than Northrop. GAO rejected the agency’s argument that the assignment of adjectival ratings generally should not be based on a simple counting of strengths and weaknesses finding that when, as here, the RFP specifically requires offerors to satisfy as many requirements as possible, consideration should be given to the offeror meeting that requirement.
Second, GAO addressed Boeing’s argument that the agency gave credit to Northrop for exceeding the aerial refueling subfactor. Here, GAO found that the RFP advised offerors “unambiguously” that proposals would not receive additional credit for exceeding proposal objectives. Yet, the agency gave Northrop additional credit for exceeding the aerial refueling specification contained in the RFP. GAO sustained the protest on this ground, finding that “this was a key reason supporting the SSA’s determination that Northrop Grumman’s proposed aircraft was more advantageous than Boeing’s aircraft…”
Third, GAO found that the agency unreasonably determined that Northrop could meet the solicitation requirements for aerial refueling. Specifically, Northrop’s proposed aircraft could not meet the air speed required for refueling. Northrop attempted to explain during discussions how this objective could be achieved. However, GAO found that the Air Force did not understand Northrop’s response made during discussions. Accordingly, GAO found the agency’s evaluation of this subfactor as unreasonable and sustained the protest on this ground.
Finally, GAO found that Northrop’s proposal was technically unacceptable under the Product Support subfactor and thus could not form the basis for award because Northrop had refused to commit to the RFP’s two-year time frame required for establishment of depot-level maintenance support. GAO agreed with Boeing that Northrop’s refusal to commit to the two-year time frame was a material solicitation requirement and that Northrop’s failure to make such a commitment rendered its proposal technically unacceptable. Northrop and the Air Force argued that Northrop’s failure to commit to this requirement was an “administrative oversight.” GAO was not convinced. Relying on the record and testimony at the hearing, GAO concluded: “the Air Force improperly accepted Northrop Grumman’s proposal, where that proposal clearly took exception to a material solicitation requirement.”
The Agency Engaged In Inadequate and Unequal Discussions
GAO found that the agency conducted inadequate discussions because it informed Boeing during negotiations that Boeing had fully satisfied all of the thresholds under one of the proposal’s objectives (KPP No. 7). However, it later changed its evaluation of Boeing under this objective. The agency argued that because it had changed its evaluation of Boeing after the close of discussions, it did not have an opportunity to inform Boeing of its failure to satisfy this objective. GAO rejected this argument, holding that the agency could not change its conclusion that Boeing had met this objective without affording Boeing the opportunity to correct this requirement. Furthermore, GAO found that the Air Force had treated offerors unequally by providing Northrop continued discussions on the same issue (KPP No. 7). Considering the great weight given to this factor in the evaluation of proposals, GAO found the Air Force’s misleading and unequal discussions prejudicial.
The Agency’s Cost Realism Evaluation Was Flawed
Boeing complained, and GAO agreed, that the Air Force’s evaluation of MILCON costs was flawed. To determine MICLON costs, the Air Force visited four air force bases prior to the receipt of proposals. The Air Force used information based on the commercial version of the two aircraft proposed to determine MILCON costs. It then extrapolated these results to additional air force bases including two OCONUS bases. GAO first noted that the Air Force admitted to certain errors made in the calculation of MILCON costs during the protest which collectively rendered Boeing as the offeror with the lowest MPLCC. GAO went on to find that the record did not support a finding that the Air Force’s cost determinations were reasonable. Furthermore, the Air Force adjusted Boeing costs upward without first finding those costs to be unreasonable. GAO found that the Air Force could not make such a cost realism adjustment without first finding Boeing’s costs to be unreasonable.
The Limited Scope of Discovery In Bid Protest Cases
In addition to the substantive issues addressed in this protest, GAO addressed some procedural issues raised by the parties. GAO denied a document request submitted by the Air Force to Boeing, finding that the request was overly broad. GAO emphasized that agency document requests in a protest setting are very limited. In contrast to the Federal Rules of Civil Procedure, GAO protest document requests are limited in scope to “a specific relevant document or documents, of which the agency is aware and does not itself possess.” Because the documents request by the agency here was broad in scope, GAO denied the request.
Protest of Evaluation Is Timely If Filed Within 10 Days of Debriefing Regardless of When Basis for Protest Is Known
Filing deadlines in GAO protests are jurisdictional. If a protest is not timely filed, it generally must be dismissed. Here, the agency and Northrop sought to have significant portions of Boeing’s protest dismissed as untimely. They argued that several of Boeing’s protest grounds were either challenges to solicitation requirements, or that Boeing was allegedly aware of the improprieties during the competition because it had learned of the agency’s evaluation of its proposal during the competition. GAO rejected all of these arguments and found that Boeing’s protest was timely filed.
First, GAO found that Boeing was not objecting to the evaluation criteria themselves, but the evaluation of proposals in accordance with those criteria. Then GAO addressed the agency’s argument that Boeing’s protest was untimely because Boeing knew of the Air Force’s view of the merits of its proposal during the competition. Here, the agency argued that because Boeing’s protest was filed more than 10 days after it learned of the agency’s view of its evaluation, Boeing’s protest was untimely. GAO rejected this argument, finding that challenges to procurements conducted on competitive proposals where a debriefing is required if requested, a protest is timely if filed within 10 days of the required debriefing even if the protestor had knowledge of the protest grounds during the procurement process.
