Army Corps upholds decision to keep IT work in-house
Contractor that competed for the jobs has until Aug. 28 to file an appeal outside the agency.
An in-house bid to perform information technology and management work for the Army Corps of Engineers survived an appeal by the sole competing contractor, the agency announced Thursday.
The decision on the agency-level challenge gives contractor Northrop Grumman Corp. 10 days to decide whether to appeal to the Government Accountability Office or the Court of Federal Claims. If the company does not appeal, then the in-house team will take over the work, which is currently performed by about 1,100 employees, shortly after the next fiscal year starts on Oct. 1, said George Halford, an Army Corps spokesman.
Northrop Grumman spokeswoman Juli Ballesteros said Monday that the company had been notified of the decision: "At this time, we are considering our options," she said.
The proposal submitted by the in-house team, termed a "most efficient organization" under the Office of Management and Budget Circular A-76 rules that govern public-private competitions, is unusual in splitting the work between federal employees and a subcontract with Bethesda, Md.-based Lockheed Martin Corp.
Details of the contract are not publicly available and will not be disclosed until the appeals process is complete. The initial award announcement indicated the winning proposal was worth $447 million over six years, but did not reveal the number of federal jobs that would be retained or the value of the Lockheed subcontract. Halford said the basis for the appeal and the decision to reject it also could not be revealed until the award decision is finalized.
The Army Corps on Aug. 8 released a solicitation for quality assurance to oversee the service provider ultimately selected. The indefinite delivery-indefinite quantity contract will be issued as a set-aside for a small business owned by a service-disabled veteran, has a one-year performance period and four option years and is scheduled to start in early October.
Agencies have recently focused more closely on accountability for the work performed after public-private job competitions, as they work through the implementation of an updated competition rule book issued in 2003.
In some contentious competitions, industry representatives and federal employee unions have accused each other of submitting low-ball bids while planning to make up the difference later by requesting more funds once the work is under way. In the case of contracts that stay in-house, the letter of obligation for the MEO bid is a binding legal document, but functions slightly differently from a contract. Industry groups have sometimes charged that agencies do not hold employee teams to the agreed standards.
The initial award decision for the Army Corps' IT contract was announced in May after two delays resulting from internal Defense Department reviews. At that time Ray Navidi, competitive sourcing program manager for the Army Corps, said the competition was attracting special attention because it was the largest public-private competition to be conducted by Defense under the new rules. When it was first announced, the competition affected 1,350 employees, but those numbers have dwindled over the past two years due to a hiring freeze.