Protest by Harris CapRock Stalls FCSA Contract Awards

by

WASHINGTON — A multibillion-dollar U.S. government procurement of commercial satellite telecom solutions that has stretched out nearly two years faces additional delays following a protest by an incumbent contractor that was disqualified in April.

Harris CapRock of Fairfax, Va., was bounced from the competition to provide end-to-end managed network services to U.S. defense and civilian agencies under the Future Comsatcom Services Acquisition (FCSA) program, according to multiple industry sources. The company filed a protest May 7 with the U.S. Government Accountability Office (GAO), a move that effectively puts contract awards on hold.

A GAO official confirmed Harris CapRock’s protest of the Custom Satcom Solutions, or CS2, procurement under the broader FCSA program but declined to provide additional details. “For us to describe the issues is to begin to decide them and we don’t do that,” Ralph White, GAO’s managing associate counsel for procurement law, said by phone May 23.

U.S. government procurement rules require that bid protests be resolved within 100 days of the filing date, meaning GAO should hand down a decision on Harris CapRock by mid-August. The remaining FCSA CS2 bidders have been told to expect contract awards around that time, industry sources said.

The disqualification is a serious blow to Harris CapRock, one of three companies that for the past decade have cobbled together satellite solutions for U.S. Defense Department customers under the Defense Satellite Transmission Services-Global program. That program, which is being replaced by FCSA, has been the Pentagon’s primary vehicle for procuring commercial satellite bandwidth and related services, with annual spending in the hundreds of millions of dollars.

Delays to the CS2 portion of the FCSA program have forced the U.S. Defense Information Systems Agency, which buys commercial satellite capacity on behalf of Pentagon users, to extend the legacy procurement vehicle, which had been slated to expire in February 2011. The contact is now effective through Aug. 15, 2012, and the agency on May 22 informed the three companies of its intent to further extend the deal to Feb. 15, 2013, according to Douglas Packard, vice director for procurement at the agency’s Defense Information Technology Contracting organization.

One industry source said the CS2 delays have diminished its potential value by forcing government agencies to find other avenues for procuring much-needed commercial bandwidth and related services and hardware. The CS2 procurement has a stated potential value of $2.6 billion, a pool of funding that would be doled out in the form of task orders among a stable of qualified contractors.

The massive FCSA program, being jointly managed by the civilian General Services Administration (GSA) and the Defense Information Systems Agency, has three main components: direct purchases of satellite bandwidth, mobile satellite services, and managed services, or CS2. The bandwidth and mobile services elements are already under contract, as is a CS2 set-aside for small businesses.

The GSA intends to award multiple indefinite-quantity, indefinite-delivery contracts under the full and open competition portion of CS2; the selected contractors will be eligible for task orders. The contract vehicle has a base operating period of three years with two one-year options, government procurement documents show.

A final request for proposals was issued in July 2010, and industry sources said contract awards were anticipated six to nine months later. But the program has been hobbled by its complexity and by multiple protests, industry sources said.

“Unusual and very frustrating,” is how one industry official described the process as it has unfolded.

Another industry source complained that the customer has not been clear about the direction the procurement might take. For example, prospective contractors were caught off guard when the GSA made a second downselect on the program in April, which disqualified Harris CapRock, among other contenders. “Nobody had any idea this second round was coming,” this source said.

The first downselect took place last summer when eight proposers were knocked out of the running, an event that spurred multiple bid protests, industry sources said. Integral Systems, a division of San Diego-based Kratos Defense and Security, protested to the GAO, as did Globecomm Systems of Hauppauge, N.Y., government documents show. Both protests were dismissed.

Industry sources said there were additional protests filed directly with the customer agencies and that these also were dismissed.

Meanwhile, however, the GSA in February managed to award contracts for the C2 small business set-aside, potentially valued at $900 million. The winning contractors are: AIS Engineering Inc., By Light Professional IT Services Inc., Knight Sky Consulting and Associates LLC., and UltiSat Inc.

Marc Raimondi, a spokesman for Harris Corp., the Melbourne, Fla.-based parent company of Harris CapRock, declined to provide details of his company’s C2 protest.

“Harris CapRock provides end to end satellite communications solutions to government and commercial markets in more than 150 countries around the world,” Raimondi wrote in a May 22 email. “While we aren’t in a position to make a statement regarding the ongoing CS2 proceedings, we remain committed to supporting the comprehensive communications needs of our government customers.”

Harris CapRock has a diverse global customer base that includes customers in the government as well as in the energy and shipping industries.

Industry sources speculated that Harris CapRock was disqualified on a technicality given its history and experience as a commercial satellite services integrator for the government. Unlike some of the other losing bidders, many of which were disqualified due to lack of relevant experience, Harris CapRock has proved itself capable of doing the job, these sources said.

Sources said fewer than 10 companies remain in the hunt for FCSA CS2 awards, a mix of contenders that includes satellite operators and integrators that provide solutions using leased capacity.