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DDG-1000 Zumwalt - Design Agent

Prior to cancellation of the DD 21 program on November 30, 2001, NAVSEA had completed phases I (system concept design) and II (initial systems design), under which two teams, including a Gold Team (with Ingalls as the prime contractor and Raytheon Corporation as the system integrator), and a Blue Team, (with Bath Iron Works Corporation's (BIW) as the prime contractor and Lockheed Martin Corporation as the systems integrator), had developed independent designs for the DD 21 destroyer.

The DD(X) design agent solicitation N00024-02-R-2302, issued on 30 November 2001, contemplated a cost-plus-award-fee contract under which the selected DD(X) design agent contractor was required to (1) design, develop and build, and conduct factory tests, land-based tests, and (where specified) at-sea tests of engineering development models (EDMs), and (2) engineer the results of the testing into the DD(X) system design based on the contractor's DD 21 Phase II engineering, and that will meet the operational needs and requirements established in the DD 21 Operational Requirements Document. The solicitation specified a minimum of 11 EDMs: advanced gun system and munitions, integrated power system (IPS), volume search radar (VSR), VSR/SPY-3 multi-function radar (MFR) suite, total ship computing environment, advanced vertical launching system (VLS), integrated deckhouse, autonomic fire suppression system, infrared mock-ups, hull form scale models and integrated undersea warfare system.

Award was to be made on a best value basis in accordance with specified evaluation factors (management approach, technical approach, past performance, cost) where non-cost evaluation factors when combined were more important than cost. Offerors were cautioned, however, that in order to be considered for award, the government's evaluated cost of their proposals must not exceed the total RTD&E budget listed in the RFP (i.e., $2.865 billion).

The agency received and evaluated proposals from Bath Iron Works Corporation's (BIW) and Northrop-Grumman Ingalls, conducted several rounds of oral and written discussions, and received and evaluated final proposal revisions. In earlier phases of the Land Attack Destroyer Program, the Blue Team (with BIW as the prime contractor) and the Gold Team (with Ingalls as the prime contractor) had developed individual destroyer designs.

After receiving initial proposals from the Blue and Gold Teams by the February 4, 2002 closing time, NAVSEA commenced discussions with both offerors. Several rounds of oral and written discussions were held, during which offerors were furnished the agency's interim evaluation of proposals, including the evaluated strengths, weaknesses, deficiencies and risks. NAVSEA then requested the submission of final proposal revisions (FPR) by 02 April 2002. The results were as follows:


 


 

BLUE TEAM

 

GOLD TEAM

 

 

Adjective

Risk

Adjective

Risk

PROGRAM MANAGEMENT

Very Good

Low

Very Good

Low

Program
Management
Approach

Outstanding

Low

Outstanding

Low

Integration of
Second
Shipbuilder

Outstanding

Low

Outstanding

Low

Combat
System
Solution

Very Good

Low

Very Good

Low

Software
Development

Very Good

Moderate

Satisfactory

Moderate

Data/Patent
Rights

Satisfactory

Low

Satisfactory

Low

TECHNICAL

Very Good

Moderate

Very Good

Moderate

EDMs

Very Good

Moderate

Outstanding

Moderate

Parallel
Design

Very Good

Low

Very Good

Low

Total Ship
System
Engineering

Outstanding

Low

Outstanding

Low

Total Ship
Computing
Environment

Outstanding

Moderate

Very Good

Moderate

Specified
Performance

Very Good

Moderate

Outstanding

Moderate

PAST PERFORMANCE

Good

 

Good

 

EVALUATED COST

$[DELETED]Billion

 

$[DELETED]Billion

 

Although both proposals received overall ratings of very good for the program management and technical factors, and ratings of good for the past performance factor, the source selection authority (SSA), concurring with the recommendation of the source selection advisory council (SSAC), concluded that the Gold Team's proposal was "clearly superior" with respect to the EDM and specified performance subfactors. In this regard, the SSA and SSAC determined that the proposed Gold Team DD(X) design was superior to the Blue Team design in several significant areas, and represented "significant advances in technology, warfighting capability and survivability." The SSA also concurred in the SSAC's finding that the Gold Team's EDM testing program was more robust than the Blue Team's, and thus will more effectively mitigate the risks associated with development of the EDM systems.

The SSA, concurring with the recommendation of the SSAC, concluded that the Gold Team proposal's superiority with respect to the EDM and specified performance subfactors, which reflected the additional, advanced warfighter capability and the greater flexibility to meet future needs of the Gold Team's approach, outweighed both the Blue Team proposal's advantage with respect to software management and total ship computing environment, and the Blue Team's less than one-percent advantage in evaluated cost, such that the Gold Team proposal represented the best value.

Upon learning of the resulting award to Ingalls, and after being debriefed, BIW filed this protest. Accordingly, the agency made award to Northrop-Grumman Ingalls, and a protest by Bath followed.

Bath first asserted that the agency failed to conduct the competition on a common basis when it denied Bath's request to use a decommissioned DD 963-Class destroyer for at-sea testing while at the same time accepting for purposes of the evaluation the Ingalls's proposed use of that type of platform. GAO stated that offerors must be treated equally and be provided with a common basis for the preparation of their proposals. In this case, Bath failed to pursue the agency's Inactive Ship Program Program Office's denial of a ship with the DD(X) program office or with the activity responsible for granting or denying such a request, thus supporting the conclusion that use of that ship was not considered by Bath as a significant consideration. Furthermore, the agency reasonably determined that Bath would not have obtained a material technical benefit from proposing a decommissioned DD-963 instead of the large commercial ship it proposed as its IPS EDM at-sea test platform. Finally, Bath's failure to propose a decommissioned DD-963 did not materially affect the evaluation.

Second, Bath asserted that the agency underestimated the Ingalls's likely cost of performance such that, instead of being $500,000 below the RTD&E cap, the likely cost of performance would exceed the cap. GAO responded that the agency had additional money available in its program budget to fund higher contract costs. Under such circumstances GAO will not sustain a protest even if the agency has effectively waived the funding requirements where competitive prejudice did not result. In this case, Bath failed to demonstrate it would have increased its proposed effort so as to materially improve its competitive position had it known that additional funding in the amount of any likely overrun would be available.

Third, Bath asserted that the agency's acceptance of the Ingalls's closely integrated radar approach (i.e., VSR and MFR radars) was inconsistent with a firewall the agency established that was established to govern access to radar information created by a member of the awardee's team and thus gave the awardee an improper advantage. GAO stated that Bath could not identify any firewall provision that precluded a closer integration of the two radars than it chose to offer; in fact, the protester's proposed radar suite was significantly more integrated than that proposed by the awardee. Moreover, GAO ruled that the evaluators did not act unreasonably or inconsistent with the RFP evaluation criteria in considering outside knowledge that they had concerning the offerors and their proposed radar approaches.

Fourth, Bath asserted that the agency's source selection decision failed to account for the development risk associated with Ingalls's proposed dispersed missile vertical launching system (VLS) by not considering that there was a significant likelihood that the development of such a system would be abandoned and that the awardee instead would rely on its fallback unitary VLS (i.e., where the missiles would be located in only two places on the ship). GAO stated that the Navy had recognized the developmental risk associated with the dispersed VLS but reasonably concluded - based upon its familiarity with the Ingalls's prior and proposed risk reduction efforts - that the overall development risk was low/manageable/satisfactory. As a result, GAO could find no basis to question the agency's determination that the superiority of the awardee's proposal with respect to the EDM and specified performance subfactors outweighed both the protester's advantage with respect to software management and total ship computing environment, and cost, such that the awardee's proposal represented the best value.

Competition to design and build the Navy's next generation destroyer reached a pivotal stage on 19 August 2002, when the GAO denied [B-290470] Bath Iron Works Corporation's (BIW) protest of a multi-billion dollar award to Ingalls Shipbuilding to serve as the DD(X) program's design agent for technology development. With resolution of the DD(X) bid protest in late 2002, Northrop Grumman was on track to complete the DD(X) system design and associated engineering development models (EDM) by 2005. The scope and complexity of the design work, which includes development and integration of new hull and ship systems as well as advanced combat systems, is unprecedented for a U.S. Navy surface combatant. Northrop Grumman is responsible for the total ship system design, as well as development and testing of 11 EDMs.



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