Protest challenging agency’s past performance and cost realism evaluations is sustained in part. The agency’s evaluation of one of the awardee’s past performance references was inconsistent with the solicitation. The solicitation required offerors to perform a specific type of complex aircraft maintenance. The agency, however, only considered general maintenance experience, not the specific experience required by the solicitation when evaluating the awardee’s past performance. Additionally, the agency’s cost realism analysis was flawed. The awardee proposed overhead rates that were significantly lower than the rates incurred on its other contracts and lower than the rates on the incumbent contract. Rather than assess whether the awardee’s rates were realistic, the agency simply, and improperly, accepted the awardee’s proposed rates at face value.
The Navy issued a solicitation for maintenance of aircraft and aircraft engines. The solicitation sought the most complex type of aircraft maintenance called depot-level maintenance (DLM). The solicitation required the agency to make an award based on a best-value tradeoff between past performance and price.
After receiving proposals, the Navy established a competitive range consisting of three offerors: (1) Yulista Tactical Services, LLC; (2) Tyonek Global Services, LLC; and (3) Depot Aviation Solutions, LLC (DAS). The agency assigned each offeror a Substantial Confidence rating under the past performance factor, fing no meaningful difference among the offerors’ past performance records. Yulista, however, had a slightly lower price than Tyonek and DAS, so the Navy selected Yulista for award. Tyonek and DAS both protested, challenging the Navy’s past performance evaluation. In addition, Tyonek objected to the Navy’s cost realism analysis.
Tyonek and DAS argued that the Navy erred in assigning Yulista the highest possible relevancy rating on one of its past contracts maintaining aircraft for NASA. Tyonek and DAS contended that the NASA contract did not involve the type of DLM-specific work required by the solicitation. The Navy countered that in evaluating the Yulista’s NASA contract, it had focused more on the total maintenance support hours rather than DLM-specific hours. Moreover, the Navy continued, Yulista’s proposal explained that it performed more DLM related work than what was outlined in the NASA contract’s SOW.
GAO agreed with the protesters. GAO found that in light of the significant DLM-specific tasks required in this procurement, it was unreasonable for the Navy to evaluate relevance without considering the level of DLM work performed in Yulista’s past performance references. Indeed, the record showed that the Navy considered the DLM-specific work in evaluating other offerors’ past performance records; in fact, the Navy had conducted discussions with other offerors asking them to delineate the amount of DLM work performed on other contracts. Yulista’s NASA contract did not delineate the DLM-specific work, but the Navy simply credited all of the maintenance work on that contract as DLM work. While the NASA contract involved some DLM-specific work, the record failed to demonstrate the amount of DLM work Yulista actually performed.
Tyonek and DAS raised additional challenges to the past performance evaluation, but GAO rejected them. They argued that neither Yulista nor its team members had direct experience with the Navy aircraft that will be supported under the RFP. But the solicitation did not require experience with any particular aircraft, just general types of aircraft platforms.
The protesters also challenged the relevancy ratings of their own past performance references. Tyonek argued that it should have been given more credit for its performance as the incumbent. But GAO noted that Tyonek had only been performing that incumbent work for 100 days. In evaluating an offeror’s likelihood of success, a prior contract that is of limited duration is not as probative as a contract that has been performed for a lengthier period of time.
DAS complained that the Navy unreasonably focused on its lack of relevant experience as a joint venturer. GAO, however, noted that the solicitation expressly put offerors on notice that past performance as a principal team member will not be considered as significant as the past performance of a prime offeror. Thus, the Navy’s decision to give less weight to DAS’s joint venture experience was consistent with the terms of the solicitation.
Aside the past performance arguments, Tyonek raised three challenges to the Navy’s cost realism analysis. Tyonek argued that the Navy improperly rejected the G&A rates of one its team members. But GAO noted that team member did not provide any substantiating information to justify its proposed rates. In a related argument, Tyonek alleged the agency engaged in disparate treatment when it accepted the G&A rates from Yulista. GAO found, however, that Yulista provided information to support those rates.
But GAO found Tyonek’s third cost realism argument more compelling. Yulista and one of its subcontractors proposed overhead rates that were below their historical rates and below rates Tyonek had incurred as the incumbent. Tyonek contended the Navy had unreasonably accepted these rates without bothering to determine whether they reflected the most probable cost of performance.
GAO agreed, noting that the record did not demonstrate that the Navy independently assessed the realism of Yulista’s rates. Yulista’s overhead rates differed significantly from its rates under the NASA contract, yet Yulista failed to explain the difference. The Navy could not simply accept this difference without making some effort to determine whether the different rates were realistic.
Tyonek is represented by Jeffery M. Chiow, Stephen L. Bacon, and Richard M. Harris of Rogers Joseph O’Donnell, PC. DAS is represented by J. Bradley Reaves, and Beth V. McMahon of ReavesColey, PLLC. The intervenor, Yulista is represented by Lane Tucker and Bryn of Pallesen, Stoel Rives LLP. The agency is represented by Duncan Butts of the U.S. Navy. GAO attorneys Evan D. Wesser and Edward Goldstein participated in the preparation of the decision.
