Military

CSAR-X Award Protests

After the initial award in November 2006, Boeing rivals Lockheed Martin and Sikorsky subsequently filed and won two rounds of protests with the Government Accountability Office (GAO). Sikorsky Aircraft Company and Lockheed Martin Systems Integration-Owego (LMSI) protested the Department of the Air Force's award of a contract to The Boeing Company, under request for proposals (RFP) No. FA8629-06-R-2350, for the Combat Search and Rescue Replacement Vehicle (CSAR-X). Sikorsky and LMSI challenged the evaluation of proposals and resulting source selection.

On 26 February 2007, based upon GAO's review of the record, including a hearing conducted by our Office, GAO found that the Air Force's evaluation of operations and support (O&S) costs was inconsistent with the RFP. An agency may not announce in the solicitation that it will use one evaluation plan and then follow another; once offerors are informed of the criteria against which their proposals will be evaluated and the source selection decision made, the agency must adhere to those criteria or inform all offerors of significant changes.

Offerors were required to provide estimates of specified O&S costs for their proposed aircraft through FY 2029, when the last of the new CSAR-X aircraft were to become fully operational. The agency then extended all O&S costs from FY 2029 to generate a complete life cycle for each aircraft, resulting in an overall CSAR-X life cycle through FY 2039. In addition, offerors were required to comply with, and furnish "sufficient detail for effective evaluation and for substantiating the validity of stated claims" with respect to, various requirements in the CSAR-X System Requirements Document (SRD) quantifying the amount of maintenance the proposed aircraft would need during their service life.

Sikorsky and LMSI assert that the agency's calculation of O&S costs using the same estimated cost for Unit Mission Personnel and Indirect Support for all proposals, irrespective of the aircraft offered, unreasonably failed to account for the reduced maintenance required by their generally newer design, smaller helicopters. They claim that this was inconsistent with the RFP's requirement for detailed information regarding O&S costs generally, and maintenance costs specifically. The protesters read this information requirement, together with the MPLCC evaluation approach, as indicating that the O&S cost evaluation would take into account the helicopter offered. GAO agreed with the protesters.

The New York and Connecticut Congressional delegations called on Secretary of the Air Force Michael W. Wynne to reopen the selection process for the Air Force's contract for the Combat Search and Rescue Replacement Vehicle (CSAR-X). Congressman Christopher Shays (Conn-4): "The Air Force selection process needs to be fair. With the GAO clearly calling this process into question, it seems to me the Air Force should be more focused on correcting the process than on completing an improper one."

On 29 March 2007, the GAO found that the Air Force had reasonably determined that Lockheed Martin Systems Integration-Owego's recent, seriously deficient performance on a highly relevant contract for a similar aircraft warranted a past performance rating of little confidence, notwithstanding that protester also had very good performance on another highly relevant contract.

Lockheed Martin Systems Integration-Owego (LMSI) and Sikorsky Aircraft Company protested the corrective action undertaken by the Department of the Air Force in response to GAO's decision of 26 February 2007. LMSI and Sikorsky principally allege that, although the amendment to the solicitation issued by the agency in response to GAO's decision materially altered the stated evaluation methodology, it limits the extent to which offerors are permitted to revise their proposals; the protesters maintain that, given the change in the evaluation methodology, the limitation on revisions is unreasonable.

The protesters also asserted that the agency's methodology for evaluating O&S costs improperly fails to fully account for likely fuel costs in that it: (1) does not consider the likely increase in the number of flying hours during wartime, which the protesters maintain is inconsistent with the fact that the MER, from which the number of Unit Mission Personnel is derived, and the agency's groundrules for calculating potential maintenance efficiencies, were both based upon the staffing required for a wartime level of operations; and (2) assumes as the cost of fuel the price paid by the Defense Energy Support Center, without consideration for the much higher fully burdened cost of fuel (including the cost of transportation, storage, etc.).

On 30 August 2007 GAO sustained the protest, where agency amended solicitation after prior sustained protest to eliminate consideration of the unique aspects of the proposed helicopters (including maintenance requirements) in calculating certain aspects of the evaluated Most Probable Life Cycle Cost, substituting a subjective consideration of potential maintenance efficiencies for the prior direct impact upon evaluated cost, but nevertheless precluded offerors from generally revising their proposals. GAO noted that it is fundamental that, where an agency revises the criteria against which offers are to be evaluated or otherwise materially changes the solicitation's evaluation scheme, offerors must be given a reasonable opportunity to respond to the revised criteria or evaluation scheme.

GAO recommended that the Air Force permit offerors to revise both the cost/price and non-cost/price aspects of their proposals in response to the new evaluation scheme.

The Draft Request for Proposals (RFP) Amendment 5 was posted for comment as corrective action in response to GAO Bid Protest Decision B299145.5 dated 30 Aug 2007. CSAR-X Offerors were to review DRAFT RFP Amendment 5 and provide written comments no later than 1600 EST, 30 Oct 2007 to the Contracting Officer. Request for Proposals (RFP) Amendment 5 was posted in response to GAO Bid Protest Decision B299145.5 and B299145.6, dated 30 Aug 2007. CSAR-X offerors were to provide written updated proposals no later than 1500 EST, 07 January 2008 to the Contracting Officer. CSAR-X RFP Amendment 5 allowed the CSAR-X offerors to make changes to all price/cost and non-price/cost portions of their proposals. RFP Amendment 5 incorporated the following changes to the CSAR-X RFP: 1) Conversion of priced contract options from date-based exercise to event-based exercise. 2) Incorporation of Title 10 U.S.C. Section 2366a Technology Maturity Certification requirements. 3) Changes to dates within the RFP (e.g. IOC requirements). 4) Clarifications to RFP Sections L and M. 5) Miscellaneous administrative changes (such as names and addresses) 6) Incorporation of oral presentations.

In late 2007 the CSAR-X program office at Air Force Special Operations Command (AFSOC) modified the "Key Performance Parameter" Deployability requirement. The change made vague the required maximum allowable of time in which a helicopter must be ready to fly missions after being deployed via cargo aircraft from a clear three hour standard that had previously existed. Initially, the aircraft had to be "mission" ready in three hours. This was later changed to "flight" ready. The changes to the deployability standards by AFSOC made it possible for Boeing's entry to fall within the required mission ready time limit. A report released 15 November 2007 by the Project On Government Oversight (POGO) suggested the KPP change may have been ordered because the Pentagon wanted the Chinook so much that high-level parts of the Defense Department pressured the Air Force to consider the helicopter for sole-source procurement.