GAO Denies latest Colt M4 protest

[imschur]

http://militarytimes.com/blogs/gearscout/2012/11/28/gao-denies-latest-colt-m4-protest-could-this-be-it/

The lights are on and the credits are rolling in the Army’s M4 contract drama. And, the story doesn’t appear to be ending well for Colt Defense. The GAO has released a decision dismissing Colt’s latest protest of the $84m M4 contract award to Remington. The latest decision, dated November 16, 2012, dismisses Colts protest of the Army’s interpretation of the M4 technical data package licensing agreement. This is a complicated issue, but it’s dismissal should clear the way for the Remington to resume work on $83.9m M4 contract.

It should be noted that the GAO says they “will not resolve a dispute involving interpretation of a license agreement… because this involves a matter of contract administration not subject to GAO’s review.” In effect, this allows Colt to take the matter before a government contract appeals board or the Court of Federal Claims.

The Army responded to our questions about the status of the contract award by saying they would have a statement for us in the morning.

Colt hasn’t yet responded to our email.

And, Remington spokesperson Teddy Novin didn’t have much to say tonight, “We are awaiting next steps and remain confident that the Army will make the right decision for its personnel and the American taxpayer.” No doubt, Remington is holding its breath as they await word that the Army has cleared the docket of any other protests and that their award still stands.

While we already reported on the first, July 24, 2012 protest decision, we were working from extracts provided by the GAO and with both decisions now in hand, we can shed some light on the basis of Colt’s protests as well as issues surrounding the award itself.

Quick Recap: The source selection report presented to the source selection authority determined Remington represented the best value to the government. Their decision was based on four criteria – Remington presented the best production capability approach, utilized small business appropriately, showed satisfactory past performance of government contract work and had the lowest price.

• August 19, 2011: Army issues a solicitation for up to 120k M4/M4A1 carbines.
  
• April 20, 2012: Army awards contract to Remington
  
• April 26, 2012: Colt protests the following:
  • The way the Army performed its price evaluation.
    
  • Army’s evaluation of Remington’s past performance.
    
  • Army’s evaluation of Remington’s production capability.
    

  [*]July 24, 2012: GAO sustains one of Colt’s three challenges. Namely, the way the Army applied the M4 royalty adjustment to bids. Dismisses others.

  [*]Sept. 12, 2012: Army issues updated solicitation. Submission deadline is Oct. 9, 2012.

  [*]Sept. 20-ish, 2012-: Colt files protest of adjusted royalty terms with Army.

  [*]Sept. 28, 2012: Army dismisses protest.

  [*]October 9, 2012: Colt files protest of adjusted royalty terms with GAO.

  [*]Nov. 16, 2012: GAO dismisses Colt’s protest.

According to the GAO’s July 24 decision, Colt was unimpressed with the way the Army evaluated Remington’s production capability and their past performance. Both are criterion in the source selection authority’s determination of the manufacturer’s suitability for the contract. Colt also raised issues with the way the Army calculated the royalties that would have to be paid by any offeror that didn’t have rights to the M4s technical data package; essentially any company other than Colt.

PRODUCTION CAPABILITY: As far as the Army’s evaluation of Remington’s production capability, Colt says they should have been rated higher than Remington since Colt has the facilities, machinery and tooling already in place to build the guns. Remington does not. The GAO agreed with the Army’s stance that Remington has “more than ample facilities to meet the requirement with no additional facilities required. . . . Remington has some, but not all the required key tooling and equipment in place, but its proposal provided a very detailed plan for key tooling and equipment…”

The GAO concluded that the Army is capable of making this determination and denied Colt’s protest.

PAST PERFORMANCE: The next protest issue dealt with the way the Army evaluated Remington’s past contracting performance. The Army determined that Remington only had two contracts on which it could base it’s rating for past performance. Initially, the source selection board (SSB) decided that the two contracts didn’t offer a enough information on which to base a “meaningful performance risk prediction”. The board assigned a rating of “unknown confidence” for the past performance criterion.

Later, the source selection advisory council, whom the SSB reported to, judged those two contracts enough to raise the rating from “unknown confidence” up to “satisfactory confidence”.

According to the decision, the GAO finds “nothing unreasonable about the agency’s assignment of a satisfactory confidence rating to Remington’s past performance and we find that the conclusion is supported by the underlying record.”

PRICE EVALUATION: The GAO upheld Colt’s initial protest about the way the Army applied the royalty fees to the offerors price but they denied the second.

The solicitation’s language suggested that the Army would simply tack 5% on to any offerors price if they didn’t own or have license to use technology or technical data that belongs to Colt. Here’s the actual language:

“The royalty rate is 5%. If an offeror does not indicate that it is the owner or a licensee of the technology/technical data, its offer will be evaluated by adding an amount equal to the royalty to its proposed prices.“

Instead of applying a flat rate, the Army went through the carbine submissions part-by-part to determine just how much of the current M4 design was still subject to the 1997 M4 Carbine Addendum to Technical Data Sales and Patent License Agreement. The Army broke the gun down into it’s components to arrive at an aggregate percentage representing the Colt proprietary parts and applied the 5% surcharge to the cost of only those parts.

This is germane because Colt likely relied on the solicitation’s blanket 5% guide when gaming their price. If Remington’s gun cost $1000, then it would be subject to a $50 royalty adjustment. Colt no doubt used this math as a basis to estimate their competitors prices. When the Army used a different formula, Colt contended, the playing field was no longer level.

At issue is the wording, “an amount equal to the royalty”. Colt argued this meant 5% as it stated in the sentence preceding it. But, the Army meant the amount would be calculated based on the 5% royalty but didn’t elaborate further, leaving room for ambiguity.

In short, the GAO agreed and sustained this portion of their protest. The Army responded by putting out an amended solicitation laying out just how this calculation would be done and invited the offerors to resubmit their proposals.

That brings us to the latest Colt protest and the second GAO decision, dated November 16, also based on royalty calculations.

PRICE EVALUATION II- The amended solicitation went out with an attachment laying out how the royalty would be calculated. The solicitation also listed weapon configurations and the appropriate royalty percentage to be applied to each.

Colt had a look at the amended solicitation and protested with the Army. The Army denied the protest, then Colt protested with the GAO.

The basis for their second price evaluation protest was based on the fact that Colt and the Army haven’t yet agreed on the royalty schedule at the heart of this M4 contract. Colt says that since they haven’t come to an agreement on the actual royalties they are due, then there is no way the Army can accurately calculate the royalty rate.

The GAO applied logic and determined that since the basis for the Army’s calculation was laid plainly out for all the offerors, then things were fair. Whether it was based on estimates or real numbers is irrelevant. They denied the protest.

Now What: It’s up to the Army to re-award the contract, or in the case that Remington Defense is still the awardee, lift the stop order and let them get to making the guns.

That is, unless Colt Defense takes their case to a DoD contracting board of appeals or files in Federal Court.

[unforgiven]

http://freedom-group.com/  So then was this the end around for these guys in thier aquisitions of the other companies to get the contract? <dontknow>

[planeflyer21]

What a dilemma!

I despise the penny-pinching cheap asses at Freedom Group.  It wouldn't surprise me a bit if some of their board pulled political strings to get this contract.

On the other hand, screw you Colt and your abandonment of the American civilian market a generation ago.  I'll buy a Remington branded M-4 style carbine just to spite your elitist corporate attitude.  Farquahds.

Jon

[Guill732]

I despise the penny-pinching cheap asses at Freedom Group.  It wouldn't surprise me a bit if some of their board pulled political strings to get this contract.

Isn't that the reason colt had the contract in the first place!? And why we have the M16 at all!

[98Z5V]

When was the last time Colt got awarded the mil contract to supply bolt action sniper rifles?  (Remington)  When was the last time Colt got awarded the mil contract to supply semi-auto sniper rifles? (KAC)

With those two companies fully capable of manufacturing a precision military rifle, Remington being one, I'm positive Remington can build a fucking 4MOA M4 carbine just fine.  Colt is crying.  Tough poop.

[Robocop1051]

W/E... I just want my Remington ACR PDW! I refuse to put any gear in my saddle bag hoping an SBR mysteriously shows up in there.

[planeflyer21]

Speaking of that Robo, I keep trying to get a photo of the local motorcycle deputies, that now have M-4s attached onto their saddle bags.

Definately fills a lacking niche!

Jon

[Oz]

Nov. 16, 2012: GAO dismisses Colt’s protest.

Insert ---> Nov. 15, 2012, Remington acquires LAR Manufacturing.

I don't actually know when it was announced publicly.  But I have a feeling that Remington made it clear to the right Government decision makers that they were acquiring LAR before it was announced publicly.

http://aftermathgunclub.com/?p=1470

http://www.thefirearmblog.com/blog/2012/11/28/lar-manufacturing-acquired-by-remington/