Air Force to revise selection criteria for launch procurement in wake of Blue Origin’s successful protest
WASHINGTON — The U.S. Air Force will change the criteria for evaluating launch providers that have submitted proposals for the National Security Space Launch program, the Air Force’s senior acquisition executive Will Roper announced Nov. 21.
The evaluation criteria was one of a series of objections raised by Blue Origin in a pre-award protest filed Aug. 12 with the Government Accountability Office. GAO on Nov. 18 announced it sided with Blue Origin in that the basis for award set by the Air Force is “inconsistent with applicable procurement law and regulation, and otherwise unreasonable.”
In a request for proposals (RFP) issued May 3, the Air Force said it would make two awards by picking two independently developed proposals that, “when combined,” offered the best value to the government.
Roper said the “when combined” clause will be removed in accordance with what GAO recommended.
“The Air Force will evaluate each offeror independently against the RFP evaluation criteria based on the merits of its own proposal and will amend the solicitation to make clear that each award will be made solely on the basis of the defined criteria,” Roper said in a statement. “We are committed to awarding to the two offerors representing the best value to the government, consistent with the RFP criteria.”
Each company will be evaluated individually based on their ability to meet all national security launch mission requirements “with acceptable risk,” said Roper.
In the National Security Space Launch Phase 2 Launch Service Procurement, the Air Force intends to award in mid-2020 five-year contracts to two providers. Four companies submitted proposals: Blue Origin, Northrop Grumman, SpaceX and United Launch Alliance.
Although Blue Origin challenged the Air Force’s decision to pick two providers as harmful to the industrial base, GAO had no objections to that approach.
“On the whole, we are pleased that the GAO upheld the major components of the National Security Space Launch competition, especially award timelines, quantities, and period of performance,” said Roper.
The Air Force accepts GAO’s decision that there is ambiguity in the “when combined” RFP language for selecting the best pair of launch companies, Roper added. “We will implement GAO’s recommendation in a manner that should not materially delay contract award.”
Why GAO objected to selection criteria
Federal acquisition regulations assume that contractors are competing independently unless they state upfront they’ll bid as a team, a government procurement expert who asked to not be quoted by name told SpaceNews.
If the Air Force wants to evaluate independent bids as pairs then it has to tell vendors how it will do that, the expert said.
The Air Force, hypothetically, could look at the proposals from vendors A and B together, and those from vendors A and C, and compare the A-B pairing against A-C to see which combination met their needs. Based on their combined capabilities two vendors would get contracts.
Although the Air Force laid out a list of requirements that all NSSL bidders have to meet to win an award, it didn’t tell them what attributes the government would value when combining two proposals.
“You can combine them as a team but you have to tell them on what basis,” the expert said. “Once you combine them, neither of those vendors knows what strengths and weaknesses in their proposals, once combined, are going to meet the government’s needs.”
This means the Air Force might not necessarily select the top two ranked offers, but could select any two that they claim combine to provide the best value. For example, it would choose to pair a solid and a liquid fueled rocket, vehicles with different engines. The expert said the Air Force could do that but would have to specify what criteria it would use to judge the two when combined.
What happens next
Roper said the RFP would be amended but did not elaborate.
One option would be to revert to an earlier draft of the Phase 2 launch procurement RFP that did not include the “when combined” phrase. That was added later to the final RFP. The basis for award in a draft RFPs stated: The offeror determined to be the best value to the government will be designated the “Requirement 1” provider. The offeror determined to be the next best value to the government will be designated as the “Requirement 2” provider.
This is more like the traditional way that agencies inform competing vendors how they’re going to evaluate: Award 1 goes to the best value and Award 2 to the second best value. The expert said that if the Air Force had stuck with that version and not added “when combined,” GAO most likely would not have had any objection.
Another option favored by commercial launch companies would be to award two Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts which government agencies use when they want to select more than one vendor which would then compete for individual task orders.
Blue Origin has advocated for a multiple-award ID/IQ approach for national security launch services. That was one of the recommendations in an April 2019 study by the Center for the Study of the Presidency and Congress, titled “Integrating Commercial Space Innovations into National Security Missions.” The study was funded by Blue Origin, Leidos and RocketLab.
The study says the government should certify multiple vendors based on “agreed-upon base standards for mission assurance, capability and business capacity.” Those companies would receive base ID/IQ contracts and then compete for “task order” launches.
The Air Force since it began to plan the NSSL Phase 2 procurement has said it only wants to work with two companies for the five-year period. The idea that the two should be selected as a pair came out late in the process, sources said, in order to give the Air Force more latitude. Three of the four bidders are proposing newly designed launch vehicles, which complicates the evaluation, according to these sources, who noted that that the ability to pick two providers as pair would have given the Air Force more flexibility to decide where to take more risks.
Roper addressed that issue in his statement:
“The launch competition is atypical in that we are selecting two companies, vice one, in a technology field where government funding is motivating launch companies to be dual use: capable of meeting both commercial and more-stringent military launch needs,” he said.
The RFP evaluation criteria were established, said Roper, “to enable the Air Force to comparatively evaluate differing technological approaches to get the best overall risk-reward balance.”
Industry sources told SpaceNews Nov. 21 that the Air Force had not yet contacted bidders about what the next steps will be. When the RFP is amended, the Air Force will have to inform competitors and give them an opportunity to revise their proposals.