WASHINGTON — The Government Accountability Office has rejected a protest filed by L3Harris over NASA’s award of a contract to Ball Aerospace for a next-generation weather satellite instrument.
NASA announced Sept. 11 that it awarded a $486.9 million contract to Ball Aerospace to develop an instrument for the Geostationary Extended Observations, or GeoXO, weather satellite program for the National Oceanic and Atmospheric Administration. The instrument, called the GeoXO Sounder or GXS, is a hyperspectral infrared instrument.
L3Harris filed a protest with the GAO arguing that NASA’s evaluation of the technical and cost proposals from the two companies, the only bidders on GXS, was “unreasonable, irrational, and inadequately documented.” A key issue for L3Harris was that it had a higher score in its technical approach but NASA picked Ball because of a lower price.
L3Harris’s proposal received a technical approach score of 600 points out of 750, while Ball’s proposal received 563 points. The two companies received similar scores on two other aspects, management approach and small business utilization. Ball submitted a bid of $486.9 million while L3Harris bid $764.9 million.
The GAO, in its evaluation of the protest publicly released Dec. 28, concluded that NASA made clear in the request for proposals that technical approach is only one of several factors it incorporated into its evaluation. NASA also made “cost realism” adjustments to Ball’s bid to address weaknesses, such as “a schedule with non-credible aspects” that would likely result in delays.
Those adjustments led NASA to estimate a probable cost of Ball’s bid of $553.9 million, still significantly less than L3Harris’s proposal. NASA concluded the “very significant cost advantage” of Ball’s proposal outweighed the “slight” technical advantage of L3Harris’s proposal.
L3Harris argued that NASA should have made an even larger adjustment because Ball was proposing fewer labor hours than L3Harris. NASA countered that the difference in labor could be explained by a “more complex architecture” that L3Harris offered for the instrument and greater use of subcontractors, among other factors.
The GAO found that NASA acted properly when adding hours and cost to Ball’s bid and assessing the difference in overall labor hours between the two proposals. “In sum, we find the agency reasonably explained and adequately documented its cost realism analysis of Ball’s proposal,” the GAO stated, rejecting L3Harris’s claims.
A second reason for L3Harris’s protest was that BAE Systems announced Aug. 17 that it planned to acquire Ball Aerospace for $5.5 billion. That deal was announced after NASA’s source evaluation board had completed its work reviewing the two proposals and had briefed the source selection authority (SSA), the NASA official responsible for awarding the contract. NASA checked with Ball, which said it did not expect the acquisition to have any “meaningful impact” on the proposal or the company’s ability to do the work.
L3Harris argued that the acquisition would drive up Ball’s rates and that NASA should have included that in its cost realism analysis. The GAO disagreed. “Other than its expectation that Ball’s rates will be higher, the protester does not demonstrate that NASA had a justifiable basis to make such an adjustment since the transaction had not been completed, or even possessed reliable data to form a basis to compute what the adjustment should be,” the GAO’s evaluation stated.
The final argument L3Harris made in its protest was there was an “unmitigable appearance of impropriety” in the procurement because a former Ball executive was now the director of NASA’s Goddard Space Flight Center, the center responsible for the GXS procurement. (The GAO evaluation identifies that person only as “Dr. X” because of a GAO policy not to disclose names of specific individuals; NASA announced in April it hired Makenzie Lystrup, former vice president and general manager of civil space at Ball Aerospace, as the new Goddard director.)
NASA officials said that Lystrup was not involved in the procurement in any way, with Lystrup telling the GAO that she only found out Ball was selected “after it was reported in the news.” She had also divested any financial interests in Ball by the time NASA selected the company for the GXS award.
The GAO accepted that explanation. “In our view, the facts here do not establish any impropriety requiring Ball’s disqualification for award, or otherwise indicate that the SSA had a conflict of interest that prejudiced the protester,” its evaluation concluded.
Having rejected all of L3Harris’s arguments, the GAO denied the protest. A spokesperson for L3Harris did not respond to a request for comment on the GAO’s decision or whether the company would seek to appeal that denial to the Court of Federal Claims.
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