In response to a combined protest by IAP Worldwide Services and Contingency Management Group against the awarding of an Army logistics contract to KBR, GAO released this decision supporting the protest.
In brief, GAO pointed out the drastic discrepancy between the actual evaluation of KBR's past performance by the Defense Contract Audit Agency, which tended to rank somewhere between disappointing and adequate, and the "oustanding" rating given to KBR in considering its expected performance on the logistics contract. Rather than letting the Army's procurement folks slap undeserved gold stars all over KBR before handing them a pile of money, GAO is forcing them to reconsider the contract victory in light of KBR's history of lowballing their estimates, overcharging, and providing inadequate services.
No mention, of course, of the ongoing fraud at KBR, although one imagines that plays into their contracts going over budget and their failure to properly serve our troops.
Here's a relevant snippet from this long and complex (and partially redacted for public release) decision:
Based on our review, while we recognize that the agency considered the DCAA audit report to some extent during its evaluation of KBRSI’s proposal, we have concern that the record does not support the agency’s rating of KBRSI’s proposal as “outstanding” under the business systems subfactor. Even though the agency has supported its “outstanding” rating for this subfactor with numerous significant strengths, AR, Tab 8, SSEB Report, at 43-44, it is difficult to reconcile that rating with DCAA’s expressed concerns regarding KBRSI’s accounting, estimating, purchasing, and billing business systems. In this regard, as noted above, the business systems were to be evaluated as to “how well it is able to provide effective contract oversight and tracking of costs, subcontracts, equipment, personnel, and changes in requirements in a contingency environment,” and “how well the proposed systems will provide complete, reliable, timely, consistent and transparent data to permit effective Government oversight and management,” to which matters the DCAA concerns are very pertinent. See RFP at 100.
While the agency has pointed out that DCAA’s role in the government approval process and evaluation process of this procurement is advisory, that fact alone does not provide an adequate explanation as to why KBRSI’s proposal merited an “outstanding” rating, given DCAA’s expressed concerns.[17] Moreover, we find unreasonable the agency’s explanation that, despite DCAA’s expressed concerns regarding KBRSI’s accounting system, the simple fact that the ACO has not withdrawn its 1997 approval of the accounting system supports an “outstanding” rating under the business systems subfactor. The same conclusion can be drawn with regard to the deficiencies found by DCAA with regard to KBRSI’s billing system, where the agency explains only that KBRSI’s billing system was found “adequate” by DCMA in April 2007. Similarly, in addressing DCAA’s continuing view that KBRSI’s purchasing system has “significant deficiencies,” the agency points out that the DCMA ACO “continue[d] the approved status” of KBRSI’s purchasing system in October 2006. Agency Supp. Report, Tab 7.6, DCMA Letter to KBRSI (Oct. 3, 2006), at 1.
In sum, although the record indicates that the Army considered or was at least aware of DCAA’s concerns regarding KBRSI’s business systems, it appears that DCAA had ongoing concerns with KBRSI’s business systems that had not been completely addressed by the time of the evaluation here. The Army does not explain why these concerns did not remain a factor in the evaluation or why the DCMA ACO’s “approv[al]” (either previous or subsequent) of the business systems in question addressed DCAA’s concerns regarding the merits of the business systems proposed. We also have concerns about the apparent inconsistency between the numerous instances in which the record characterizes KBRSI’s business systems as “adequate” and the agency’s ultimate evaluation of KBRSI’s proposal under the business systems subfactor as “outstanding.”
This is at least the second time within the last year that KBR has been taken to task by GAO on the basis of their history of failure and misrepresentation. It can only be a good thing if other contractors smell blood in the water on this one, and KBR can be taken off the war profiteering free ride it's been on for so many years.
After all, if we're going to end up paying more anyway, we should employ contractors who will actually deliver the services they promise.