WEAPON SYSTEMS DEVELOPMENT COMPETITION A Strange Outcome

37 Nash & Cibinic Rep. NL ¶ 33

Nash & Cibinic Report | May 2023

The Nash & Cibinic Report

Competition & Award

Ralph C. Nash

¶ 33. WEAPON SYSTEMS DEVELOPMENT COMPETITION: A Strange Outcome

If you want to ponder how our current procurement process could take an agency off the tracks, read Sikorsky Aircraft Corp., Comp. Gen. Dec. B-421359, 2023 CPD ¶ ____, 2023 WL ____ (April 6, 2023). We’re not interested in the reasoning in the decision of the Government Accountability Office denying the protest or the fact that the protest was argued by 15 attorneys for the protester and 10 attorneys for the intervenor. What we want to discuss is the procurement process used by the Army and its bizarre outcome.

The Program

The program entailed the Army’s effort to replace the H-60 Black Hawk utility helicopter fleet (called the FLRAA program). There were only two competitors that had been involved in the program from its inception as described by GAO:

Both Sikorsky and Bell have been involved with FLRAA for a number of years. Sikorsky and Bell worked on other efforts—for example, in March 2020, they received project agreements (other transaction contracts) to develop conceptual prototype initial designs—that informed the development of the FLRAA requirements and demonstrated the industry’s ability to build and fly such advanced aircraft. Sikorsky and Bell also provided extensive information to the agency as it refined the [Request for Proposal’s] FLRAA weapon system development requirements when they, among other things: responded to the agency’s requests for information from February 2016 through May 2020; attended industry days in July 2019 and July 2020; responded to a sources-sought notice issued in June 2020; and reviewed the draft RFP released in December 2020, which included submitting comments and questions and conferencing with the agency.

As a result of this effort, and while the other transaction contracts were still being performed, the Army issued a solicitation for a development contract with prototypes and some production items on July 6, 2021.

The Competition

The solicitation had four evaluation factors: (1) engineering design and development; (2) product supportability; (3) cost/price with a value added component; and (4) small business commitment, and it stated that to be considered for award, a rating of no less than “acceptable” had to be received for each of the non-cost/price factors.

Proposals were submitted on September 8, 2021, and the agency conducted extensive discussions with the two companies using numerous evaluation notices. Final proposal revisions were then submitted on May 9, 2022. The results of the evaluation are depicted on the following chart:

As a result of Sikorsky’s unacceptable rating, award was made to Bell.

Our Problem

The unacceptable rating was the result of Sikorsky’s misunderstanding of the level of detail that the agency was calling for in order to evaluate whether the eventual system would meet its modular open systems approach (MOSA). Sikorsky was working on this issue under its other transaction contract and had completed the effort before the award, but the Army had built a firewall between the two contracts so that the people working on the prospective development contract had no access to this information. Thus, lacking this information, the Army gave the unacceptable rating to the “architecture” subfactor and carried it up to the “engineering design and development” factor.

Why do we think this was a bizarre result? It’s simple. The Army is entering into a contract with Bell for approximately $3.5 billion more than it would have given to Sikorsky but it doesn’t seem to have made a meaningful tradeoff analysis.

Now we don’t know what tradeoff analysis was actually made because the GAO denied jurisdiction of those aspects of the protest on the ground that Sikorsky was not an interested party because its unacceptable rating made its proposal unawardable. The decision describes the analysis as follows:

[T]he record shows and the agency explains that, “[d]espite only having one acceptable offeror to choose from after the evaluations were complete, the [source selection authority (SSA)] and the [source selection advisory council (SSAC)] did not simply choose that offeror.” The SSA considered Sikorsky’s unacceptable rating in reaching the decision to award the contract to Bell. While the SSA acknowledged the cost/price difference between the proposals—as noted above, Sikorsky’s $4.445 billion to Bell’s $8.087 billion—the SSA considered that Sikorsky’s “offer is based on an unacceptable engineering design” and Sikorsky’s “cost realism could not be fully assessed due to their unacceptable approach, which is therefore indicative of cost and performance risk.” Ultimately, the SSA concluded that Bell’s proposal provided “appreciable and meaningful advantages” and was “the most advantageous solution and best value to the government.”

We don’t see any indication that the Army considered the long-term unit costs of production items. Nor do we see that the Army addressed the question of which of these radically different designs would perform the mission in the most satisfactory manner from the point of view of operational pilots. On the “sustainment” factor we’re puzzled how Sikorsky received a larger VATEP credit yet received a lower overall rating than Bell. All in all, this seems like an inadequate source selection for a contract that will likely lock in the winner for many years of production and will force the operating forces to use the chosen vehicle. RCN

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