Incumbency is not a guarantee

Incumbency is not a guarantee

It is well documented that the incumbent has an advantage in contract renewals. But complacency can still lose a company a contract.

Protesting contractor: Science Applications International Corp., McLean

Contracting agency: Department of the Navy

Issue: Whether the agency properly evaluated pricing and technical aspects of the winning proposal.

GAO decision, June 7, 2012: Denied.

Post-mortem: In 1984 the University of Miami Hurricanes were the defending college football national champions. They were ranked 6th in the county when in November the Maryland Terrapins played them in the Orange Bowl. At half-time Miami led 31-0 and a win seemed guaranteed.

Any coach will tell you that the hardest game to coach is one where you have a large lead at the half. In the end, the Terps claimed a 42-40 win over the defending champions, considered by many to be the greatest comeback in the history of sports.

Compare that to the protest filed by SAIC, the incumbent for a contract awarded to Lockheed Martin in Bethesda for information technology services and systems support. SAIC’s arguments centered on its incumbency and what it claimed were the overlooked advantages of its prior experience on the contract.

For example, SAIC argued that some of Lockheed’s proposed labor rates were too low. The Navy contacted the Defense Contract Audit Agency for information on the rates and requested an explanation from Lockheed. In the end, the Navy determined that Lockheed’s rates for the protested labor categories, although lower than SAIC’s proposed rates, were reasonable.

And while the Navy found that SAIC had proposed a technical approach that did not propose “any new innovations,” Lockheed proposed a “combination of innovative ideas and sound approaches and business practices.”

That was good enough for the Government Accountability Office, which found that based on Lockheed’s “elevated detailed approach” the Navy did not act unreasonably in replacing SAIC with Lockheed.

SAIC, like Miami, went into the locker room ahead. And like Miami, the company struggled with what to change in its game plan. Lockheed, emulating the Terps, threw caution to the wind. The company was innovative and detailed, and cut its costs to be competitive. For Lockheed the pay off was a $33 million dollar contract leaving SAIC, like Miami, to wonder how they could have lost the game.