March 17, 2014

GAO DECISION SHEDS LIGHT ON REJECTION OF Y-12/PX PROTEST

By ExchangeMonitor

A 19-page protest decision released yesterday by the Government Accountability Office sheds light on the GAO’s decision to reject the latest protest of the National Nuclear Security Administration’s Y-12/Pantex contract by Babcock & Wilcox-led Nuclear Production Partners (NP2), including an evaluation of NP2’s cost savings that was central to the company’s wide-ranging protest. The protest was NP2’s third since the NNSA first selected Bechtel-led Consolidated Nuclear Security in January of 2013. In defending the NNSA’s evaluation of the feasibility of the cost savings proposed by the bidders, the GAO said the NNSA performed a “comprehensive analysis” and was within its rights to judge the cost savings initiatives proposed by the bidders. “These judgments were based on the substantial experience and technical expertise of the agency’s personnel and consultants,” the GAO said. “While [NP2] is clearly dissatisfied with the agency’s various judgments and comparative assessments, it has failed to demonstrate that they were, in any material way, unreasonable.”

In its protest, NP2 argued the NNSA should have opened up discussions to address its determination that an unspecified percentage of NP2’s cost savings proposals were deemed not feasible. While the NNSA deemed a portion of the cost savings not feasible—previous protest documents suggested cost savings proposed by both CNS and NP2 were less than 80 percent of their total proposed savings, the threshold for earning a contract extension—it still rated NP2’s management approach/cost savings as excellent, though it found that a lower percentage of NP2’s cost savings were feasible when compared to those proposed by CNS.

According to the GAO’s decision, CNS got the edge from NNSA due to its cost savings approach, its “superior approach to small business utilization,” its “approach to creating a culture of continuous improvement that increases the likelihood of the Government realizing proposed savings” as well as another reason that was redacted from the protest document. The lower percentage of feasible cost savings also clearly hurt NP2, as Source Selection Authority Bob Raines concluded that “NPP [NP2] would need to ‘reach farther’ than CNS to extend contract performance, noting that NPP’s efforts in this regard ‘could lead to a loss of management focus on security, safety, and mission,’” the GAO’s decision revealed.

The government is required to open up discussions with a bidder if there are significant weaknesses, deficiencies, or adverse past performance to which it hasn’t had a chance to respond, but the GAO said “an agency need not discuss areas in which a proposal may merely be improved, nor is an agency required to point out every aspect of a proposal that offers a less desirable approach than that offered by its competitors.”

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