Last week, the US Court of Federal Claims overturned a US Air Force contract award to Boeing for KC-135 program depot maintenance, but we didn't know why. The court finally released a redacted copy of the judge's decision yesterday, and the details don't do anything to improve the badly tarnished image of USAF acquisition.
Boeing won the contract partly by submitting a slightly lower-priced bid than Alabama Aircraft Industries, formerly Pemco Aeroplex.
That would seem entirely justified except for two problems: 1. Boeing dramatically lowered its price at the last minute, and 2. the USAF didn't bother to check if Boeing's new sums were feasible.
Most of Boeing's savings came from reducing its cost estimates for the latter years of the program. But known effects of aging aircraft mean that costs are likely to increase, not decrease, as more time passes.
The air force's defense? 1. It's RFP "actually assumes a non-aging fleet". 2. Both bidders understood that "out-year work packages changes would be negotiated" despite designating the contract as "fixed price".
The court's decision:
1. "The Air Force's price-realism analysis that relies upon a non-aging fleet for its conclusions is fatally flawed," the judge wrote.
2. "Rather than awarding a firm fixed price contract as envisioned, the air force's subsequent statements indicate that this 'fixed price' contract was subject to continued contractual renegotiations because of aging aircraft and was at best a firm fixed price contract only for the first year."
3. "Failing in the first instance to deal explicitly with the aging fleet issue in the RFP, as amended, and then seeking to sidestep the aging fleet issue in the price-realism analysis of Boeing's prevailing offer in this very close competition, renders the air force's award to Boeing unsustainable."
As a result, the court enjoined the air force from proceeding with the Boeing contract and ordered the air force to "resolicit the procurement and take the necessary steps in a new solicitation to address explicitly the role of an ever-aging KC-135 fleet on the PDM to be performed."
Boeing won the contract partly by submitting a slightly lower-priced bid than Alabama Aircraft Industries, formerly Pemco Aeroplex.
That would seem entirely justified except for two problems: 1. Boeing dramatically lowered its price at the last minute, and 2. the USAF didn't bother to check if Boeing's new sums were feasible.
Most of Boeing's savings came from reducing its cost estimates for the latter years of the program. But known effects of aging aircraft mean that costs are likely to increase, not decrease, as more time passes.
The air force's defense? 1. It's RFP "actually assumes a non-aging fleet". 2. Both bidders understood that "out-year work packages changes would be negotiated" despite designating the contract as "fixed price".
The court's decision:
1. "The Air Force's price-realism analysis that relies upon a non-aging fleet for its conclusions is fatally flawed," the judge wrote.
2. "Rather than awarding a firm fixed price contract as envisioned, the air force's subsequent statements indicate that this 'fixed price' contract was subject to continued contractual renegotiations because of aging aircraft and was at best a firm fixed price contract only for the first year."
3. "Failing in the first instance to deal explicitly with the aging fleet issue in the RFP, as amended, and then seeking to sidestep the aging fleet issue in the price-realism analysis of Boeing's prevailing offer in this very close competition, renders the air force's award to Boeing unsustainable."
As a result, the court enjoined the air force from proceeding with the Boeing contract and ordered the air force to "resolicit the procurement and take the necessary steps in a new solicitation to address explicitly the role of an ever-aging KC-135 fleet on the PDM to be performed."
And this contract passed muster with the GAO? Does this set the precedent that no matter if the GAO over-rules a protest, there's yet another level of review to go through making the process even harder?
Actually the Court of Federal Claims has been where you appeal GAO rulings, so that part isn't new. The GAO forced the USAF to resolicit the competition on the same grounds as the court. The re-competition was also protested by Alabama, but the GAO thought the USAF has overcome the price evaluation issue. The court obviously disagreed.