Avoid the ‘New and Improved’ Strain of Incumbentitis
January 20, 2015
By: Eric Whytsell
Just as people across the country have begun to recover from this year’s particularly nasty flu variant, the Government Accountability Office (GAO) has issued a decision involving an especially virulent form of Incumbentitis. This strain manifests as an incumbent’s touting a new and improved version of the same technology it used to perform the prior contract. However understandable this impulse, Lockheed Martin Corporation, B-410329; B-410329.2; B-410329.3 (December 11, 2014) makes clear that relying on upgrades to existing technology is not always a sound strategy.
Lockheed involved a contract for support services for the Army Corps of Engineers (Corps). When the Corps awarded the contract to a competitor, incumbent Lockheed protested, arguing in part that the agency had misevaluated its proposal under the technical/business management factor. Specifically, Lockheed alleged the Corps had unreasonably assigned a significant weakness based on Lockheed’s reliance on “dataBoard 4.0”, the successor to dataBoard 3.0, “a government/contractor developed enterprise dashboard and reporting system.”
From the outset, the Corps had concerns about Lockheed’s reliance on dataBoard 4.0, which it noted was still in development and would not, according to Lockheed’s own proposal, be fully deployed for up to two years after contract award. The agency articulated its concerns to Lockheed during discussions, asserting in an evaluation notice (EN) that, “There is no tangible evidence of the product capabilities, how it will be developed, sustained, managed, and an understanding of how it will enable the Offeror to meet the requirements of the PWS.” The Corps also clearly stated: “The timeline for full deployment of 2 years is unacceptable.” In other words, whatever evaluation credit Lockheed may have received for its existing (presumably “tried and true”) technology was eclipsed by the agency’s doubts about Lockheed’s proposed, yet-to-be-developed upgraded version.
In addition to explaining that its “approach to dataBoard 4.0 is to extend and evolve the existing . . . dataBoard 3.0 capability,” Lockheed responded to the Corps’ concerns by asserting that its proposed solution did not depend on any proposed upgrades to meet the [solicitation] requirements.” In its protest, it also argued that its revised proposal “made it clear that the proposed [dataBoard] updates . . . would be provided at Authorization to Proceed.”
GAO found the Corps’ evaluation to be reasonable. There could be no doubt that Lockheed’s proposal relied on the upgrades. GAO pointed out that, despite Lockheed’s assertions to the contrary, its first proposal revision continued to expressly reference dataBoard 4.0 in connection with numerous aspects of its proposed solution. In addition, GAO noted that Lockheed’s responses to the ENs confirmed that the updated dataBoard does not yet exist and “will not be completed for a significant period of time following award.” Lastly, Lockheed’s final proposal revision simply modified the prior references to dataBoard 4.0 by removing the version number and referencing “dataBoard” or replacing the reference altogether with one naming other software tools. GAO rejected Lockheed’s assertion that the upgrades “would be provided at Authorization to Proceed” because its proposal “specifically recognized that a portion of the proposed upgrades would not be available at that time.”
The case provides a further reminder of the danger of incumbent overconfidence – the belief that an approach to a prior contract can be easily transitioned into the follow-on. Here, as is often the case, the solicitation requirements differed substantially from the requirements of the earlier contract. But the primary problem appears to have been putting too much stock in existing technology and failing to meaningfully respond to agency concerns about whether, how, and when upgrades to that technology would be provided. Having an existing solution may be a valuable head start on a solution, but only if you can provide the finished solution in time – and convince the government that you will.
Eric Whytsell is responsible for the contents of this article @ Jackson Kelly PLLC