March 17, 2014

AFTER GAO LARGELY DISMISSES SECOND Y-12/PX PROTEST, WAITING BEGINS AGAIN

By ExchangeMonitor

All eyes are now on the National Nuclear Security Administration after the Government Accountability Office yesterday largely dismissed a protest of its Y-12/Pantex procurement, though for the moment, the agency isn’t saying much about its plans for the $22.8 billion management and operating contract. “We are reviewing the decision,” NNSA spokesman Josh McConaha said in an email to NW&M Monitor. “No immediate comment.” Most industry observers expect the NNSA to act quickly to award the contract a second time. The agency initially picked Bechtel-led Consolidated Nuclear Security for the combined management contract in January, but the GAO upheld protests by teams led by Babcock & Wilcox and Jacobs/Fluor. All three bidders submitted additional information to the NNSA in July, but a second protest by Y-12 and Pantex incumbent B&W prevented the NNSA from re-awarding the contract, though it was allowed to continue its evaluations.

In its eight-page decision, the GAO denied one of B&W’s contentions, said one issue was no longer timely, and dismissed a third contention as “premature,” opening the door for another protest by B&W once an award is made. B&W’s Nuclear Production Partners (NP2) team had argued in its second protest that bidders should have been allowed to revise their proposals in July rather than supplying additional information to the NNSA, and in its decision, the GAO declined to “reach any conclusions, at this time, as to the adequacy of discussions or the reasonableness of the agency’s limitations on proposal revisions, and we dismiss NPP’s protest regarding those matters as premature.” The GAO denied B&W’s contention that the NNSA should have amended the original Request for Proposals to reflect new information, and it ruled that B&W arguments that the cost savings proposed by each bidder should be subject to federal cost realism requirements were “not timely filed,” suggesting that the B&W team should have protested the NNSA’s decision not to perform a cost realism analysis when the RFP was initially released.

The B&W team could again protest the NNSA’s decision once it re-awards the contract, or it could take the matter to the U.S. Court of Federal Claims. In a statement, B&W Technical Services Group President George Dudich suggested the team was not giving up its fight. “With the agency maintaining that most of NP2’s protest is premature, we look forward to NNSA’s next steps in the process, knowing the strength of our proposal and team,” Dudich said. “In the meantime, we remain focused on operating Y-12 and Pantex safely and securely until a final decision on the contract is made.” Bechtel spokesman Jason Bohne said the company welcomed the GAO’s decision. “We definitely view it as good news,” Bohne told NW&M Monitor. “I think it’s a good indicator of the strength of NNSA’s original decision.” He added: “I think we provide NNSA with a sound and credible solution and that resulted in us winning the competition. The GAO considered a number of issues that have been brought before them. At the end of the day we’ve seen the NNSA’s decision has been found to be sound. Ultimately the NNSA has got the final decision here. We respect and appreciate that it’s their decision to make but we’re still confident in our solution and we’re ready to get to work.”

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