Digest: What the GAO’s Alliant 2 Dismissals Mean for Contracting

GAO SignAmid the inaugural hubbub, little attention was paid in the mainstream media to the GAO’s decision to deny the pre-award protests for the $50 billion Alliant 2 vehicle. But, government contractors may have felt the ground shake beneath their feet.

1) Why the Protest Denial Could Be a Big Deal

The GAO decision did a couple of important things. First, it validated the out-of-the-box thinking that the GSA exhibited when it constructed the Alliant 2 vehicle. Second, it verified that the methodologies used to put together Alliant 2 are legal and valid.

Deal 4More importantly, as Federal News Radio‘s Jason Miller writes, “The GAO ruling lets the GSA by USDA steak instead of mystery meat.”

Miller was referring to the a rarely used methodology that builds on the approach used in the One Acquisition Solution for Integrated Services and the Human Capital and Training Solutions contracts.

A methodology considered the opposite of lowest-price-technically-acceptable (LPTA), which has been a thorn in contractors’ sides for a long time.

Miller goes on to write that the decision could become a landmark ruling that puts the “first nail in the coffin of LPTA.

FAS Deputy Commissioner Kevin Youel Page explained to NextGov:

“How we’ve been working through Alliant 2, [GAO’s decision] really is a foot-stomp on the idea that GSA, in particular, is tremendously focused on value,” Youel Page said. “What we are trying to do is awarding to the highest-rated technical officers with a fair and reasonable price.”

If LPTA is on the left of the contracting spectrum, Youel Page said Alliant 2’s selection criteria “is the furthest thing on the right.”

“We are promoting best-value at the furthest part of the spectrum we can be at,” he said.

Barbara Kinosky, managing partner of Centre Law & Consulting LLC, was equally emphatic about the importance of the decision:

Lowest-price technically acceptable has been disfavored among contractors for putting price over innovation. Now, we have protesters who in essence claim that cost was only nominally and improperly considered in the Alliant 2 evaluation,” Kinosky told Federal News Radio. “We have seen DoD move away from LPTA. This is the first major requirement coming out of a civilian agency that is clearly saying, ‘Contractors, we are looking for smart over cheap. Give us the USDA steak, not the convenience store mystery meat.’ I am confident this is a trend we will now see more of since GSA has taken the lead in the technology area where we definitely need to excel.”

LPTA may have its place in contracting for something like commodity computer hardware. But, it makes no sense when searching for state-of-the-art cybersecurity solutions.

So, the GSA tried something different. NextGov writes, “Alliant 2’s contracting language combines an objective methodology — asking vendors to self-score criteria in points-based fashion — with a GSA-determined baseline for fair and reasonable pricing. Bidders are evaluated on capabilities, not simply price.”

Youel Page says that this approach has two advantages:

  1. It allows the GSA to “let industry come to us with the best they have to offer.” Contracting officers don’t have to engage in time-consuming tradeoffs that “tend to be the basis for disagreements that get litigated.”
  2. It also makes the evaluation process more cut-and-dried and less subjective. He noted that while bid protests can serve as important checks and balances for the contracting system, the dramatic rise in protests is driving many agencies to distraction.

So, more emphasis on value that cheap price, more objective evaluation, and the potential for a reduction in future protests. That’s something upon which both contract officers and contractors can agree.

This decision changes the paradigm of how the government has traditionally conducted price/cost analysis. It provides the precedent for innovation across the government during the source selection process,” said John Cavadias, the senior contracting officer for GSA’s Alliant 2 GWAC Procurement Contracting Office. “This could also result in a significant time savings (shorter procurement lead times), as it already has with programs in GSA.”

No doubt the contracting community will keep its fingers crossed.

For one more take on the Alliant 2 decision, procurement attorney Joseph Petrillo gives his take on what this all means in a podcast you can download here.

2) Spending Whiplash in the Trump Era

A change in leadership means a change in execution. The transition from the Obama White House to the Trump White House certainly means change on steroids.

Presidential Transition

Certainly an area of keen interest for contractors is spending.

What can we expect?

Here are two takes:

  1. Military Spending Increase – No one knows how much weight to put behind Trump campaign promises, but estimates are his wish list would add $500 billion to $1 trillion in new spending on everything from ships and planes to troop additions.
  2. Spending Reduction – On the opposite side there are inklings that the Trump team wants to reduce federal spending by $10.5 trillion over 10 years.

Exactly how you add half a trillion dollars to defense, cut a trillion dollars a year in domestic spending, pour a $1 trillion in infrastructure spendingslash taxes, and reduce the deficit has a lot more to do with alchemy than with arithmetic.

According to The Hill, the conservative Republican Study Committee (RSC), a caucus that represents a majority of House Republicans, plans to publish a 175-200 page “skinny budget” within 45 days. The Hill notes that the RSC already has a budget plan that would reduce federal spending by $8.6 trillion over the next decade. So, bumping those saving projections up a couple of trillion would just involve “tweaking.”

Trump vowed during the campaign not to cut Medicare and Social Security, a pledge that Rep. Tom Price (R-Ga.), his pick to head the Department of Health and Human Services, told lawmakers in testimony Wednesday has not changed,” The Hill reports.

So, how do you cut a trillion a year with all these constraints?

All we can say is, saddle up.

Other Contracting News
  • The GSA is adding two acquisition execs for IT servicesKeith Nakasone was named as deputy assistant commissioner for acquisition and Jose Arrieta as director of the Office of IT Schedule Contract Operations. Nakasone will oversee all acquisition vehicles — including Enterprise Infrastructure Solutions (EIS), Governmentwide Acquisition Contracts (GWACs) and others — while managing ITC’s strategy and acquisition workforce training. Arrieta will oversee ITC’s $15 billion IT Schedule 70 program, which includes contract vehicles for cybersecurity and health IT procurement. [Federal Times]
  • Contractors charged in “rent-a-vet” fraud schemePaul R. Salavitch, 56, of Kansas City, Mo., was charged with using his veteran status to obtain federal contracts as president of a construction company called Patriot Company, Inc., which was actually owned by Jeffrey K. Wilson, 51, of the Village of Loch Lloyd in Belton, Mo. The pair are charged with illegally obtaining $18.3 million in construction contracts. {Federal Times]

Cybersecurity News

  • Aaron Hughes, the DoD’s outgoing top cyber policy officialSaid the Obama Administration leaves office having deterred a “cyber Pearl Harbor.” He explained that nondestructive hacking, like the Russian interference with our recent election, is harder to stop. However, the military’s main mission is to stop catastrophic and destructive cyber attacks that resulted in mass casualties and destruction of property. On that front, he leaves office feeling very good. [NextGov]
  • However, before anyone gets too comfyMinn.-based RedTeam Security Consulting undertook a “white hat” hack of a Midwestern energy provider to test the company’s cyber defense. After social engineering failed, the team exploited IoT weaknesses to obtain the credentials need to break through security: [Fifth Domain]

Technology News

  • Army soldiers sent to locations overseasWill soon have access to a Foreign Language Translation System when language interpreters aren’t available. The system has been rolled out in pieces since 2011. military translation system currently supports two spoken languages — Pashto and Iraqi Arabic — and one written language, Modern Standard Arabic, but additions are being considered. The Army will “soon reach full deployment” of the platform, which runs on military and commercial devices, like laptops and phones, the translation industry publication, Slator, reported in December. [GovExec]
  • One of President Obama’s final actsWas to sign an order that makes the Innovation Fellows program permanent. [NextGov]

Congressional News

Defense News

International News


And, finally …

Quadrennial January 20th means different things to different people, depending on where you fall on the political spectrum in comparison to the new inhabitants of the White House.

But, for the people in charge of moving the outgoing First Family out and the incoming First Family into the White House, it’s basically the Alamo and Pearl Harbor rolled together into a 5-hour window.

Quartz reports that more than 90 permanent White House residence staff and a few contractors will scramble to move, including:

  • Staffers scrub the White House, polish furniture, clean the windows. The Obamas’ belongings, most of which have already been packed, are shipped out to their massive new Washington home. Both the incoming and outgoing families are responsible for their own packing.
  • Moving trucks arrive with the Trumps’ belongings and staffers scramble not only to unpack, with no item too small to put in its place. “When the Trumps come back to the White House, it’s as if they were there for four years,” Bradley Blakeman, who was an advisor to George W. Bush, told CBS News. “The toothbrush is where the toothbrush should be, the clothes are in the closet, and they are completely moved in.”

For a visual glimpse into the circus, we turn to the “Today Show:”

Let freedom ring …

Posted under: Acquisition, Army, Congress, Contract News, Cybersecurity, Defense, GAO, GSA, Innovation, Management, Protests, TechTalk

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