A federal judge will allow the Air Force to move forward with a $40 million bridge contract for satellite ground systems support, but she’s concerned with how the Air Force has dealt with a $655 million contract since it was awarded in January.
Judge Patricia Campbell-Smith ruled July 22 that Peraton had no standing to challenge the bridge contract and did not grant the company the temporary restraining order it sought. However, the court is asking for more information to ensure the Air Force is running a fair and open competition for the larger contract.
The judge’s ruling follows a months long investigation of the award by the Government Accountability Office, the awarding of a $40 million bridge contract, and a lawsuit from Peraton, a competitor for the original $655 million contract.
At the time of the award, Lockheed Martin was providing ground systems support. But that contract was set to expire July 5, and the Air Force wanted to find a replacement who could also begin transitioning to a common ground service. Peraton submitted the lowest bid, but the Air Force determined Engility was the better fit and awarded them the contract in January. Work began February 6.
But just two months later, the Air Force hit a stumbling block. Peraton filed a protest bid with the Government Accountability Office in March. Among the claims, Peraton alleged Engility hadn’t met the small business requirements. Both the Air Force and the company had used bad math in estimating what percent of the subcontracting would go to small businesses. When Peraton reran the numbers, they found that Engility’s subcontracting percentage was 1.2 percentage points below the requirement, making them technically ineligible.
On March 7, a stop work order was issued, although it was ultimately lifted April 18 after the Air Force successfully argued that part of the work was too urgent to be further delayed. Then, on June 11, the GAO determined that the contract had been incorrectly awarded to Engility and the Air Force would either have to award the contract to one of the other competitors or reopen the competition and adjust the small business portion of the contract.
The Engility contract was dead, and the Lockheed Martin contract expired July 5. Without quick action, the Air Force would face the prospect of not having ground systems support.
On June 21, the Air Force awarded Engility a $40 million bridge contract renewable in three month periods for up to a year to continue its work while they tried to correct the issues raised by the GAO. Five days later Peraton sued in federal claims court, alleging the bridge contract is a bad faith attempt by the Air Force to ensure Engility ultimately gets the main contract. To correct this, Peraton asked the court to put a stop to the bridge contract and force the Air Force to comply with the spirit of the GAO ruling.
The court issued an initial ruling. On July 22, Campbell-Smith found that the bridge contract can move forward, but she wants more information on how the Air Force is correcting issues raised by the GAO. The judge placed a preliminary injunction on the awarding of the main contract until she is convinced that the Air Force has reopened the competition in good faith and not merely as cover for re-awarding the contract to Engility,
Neither representatives of Peraton or Science Applications International Corp., which acquired Engility in January, responded to requests for comment.
CORRECTION: This story has been updated to show that Peraton submitted the lowest bid on the Air Force contract.