US court rules against Army on IT contracts
WASHINGTON, Oct 1 (Reuters) - The U.S. Court of Federal Claims has canceled U.S. Army contracts with three of five companies awarded information technology work worth up to $479 million in March, and ordered the Army to go back and reevaluate all bids submitted.
In a 93-page decision dated Sept. 12, Judge Margaret Sweeney concluded that the Army made mistakes in its original evaluation of the bids, and ordered it to issue new contracts after reviewing the bids.
"Because the Army awarded the contracts at issue in this case based upon improper evaluations and arbitrary, capricious, and unlawful best value tradeoffs, the public interest was compromised," Sweeney wrote in the decision.
A redacted version of the decision was released on Tuesday, and made available to Reuters on Wednesday.
The Army had no immediate comment on the ruling.
The case centers on five contracts awarded by the Army in March for information technology services across a broad range of areas, including security, contingency planning and logistics support. The deals were valued at up to $479 million, depending on the Army's needs.
The winners in the original competition were SRA International (SRX.N), Wyle Information Systems; Binary Group Inc, Savantage Solutions, and Booz Allen Hamilton.
Several of the losing bidders, including L-3 Communications Holdings Inc (LLL.N), Femme Comp Inc, Data Systems Analysts, and BearingPoint Inc BE.N filed suit with the federal claims court. Protests were also filed with the nonpartisan Government Accountability Office, although it later dismissed them since the matter was also pending before the claims court.
In her ruling, Sweeney said Femme Comp had no standing to challenge the Army contracts because the service properly excluded its proposal from the competitive range.
However, she upheld portions of the lawsuits filed by L-3, Data Systems and BearingPoint.
She set aside or canceled the Army's contract awards to SRA, Wyle and Booz Allen, and said the Army could not start work on its contracts with Savantage and Binary until it has re-awarded contracts under the other portion of the contracts.
"For all the proposals within the competitive range, except for the proposals submitted by Savantage and Binary, the Army shall reevaluate, at a minimum, the factors and/or criteria identified ... conducting another round of discussions if necessary," before making new contract awards, Sweeney wrote.
Sweeney said the Army official who made the contract decisions gave more weight to price than permitted by the terms of the competition, which led to best value tradeoffs that were "arbitrary, capricious, and not in accordance with the law."
She also cited "the appearance that the source selection authority went out of her way to undercut the superior technical evaluations of the higher-priced proposals." (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)
