Perspecta is in talks with the Justice Department to stop Leidos from continuing work on its Next Generation Enterprise Network contract while a lawsuit is pending in federal court, according to recently unsealed court documents.
"Counsel for Perspecta has been in communication with the Department of Justice about a potential stay of performance of the awarded contract and an expedited schedule for this protest in order to obviate the need for a temporary restraining order or preliminary injunction," according to court documents.
A Navy spokesman declined to comment on the possible stay, citing the pending litigation. The Justice Department, which is representing the Navy in the lawsuit, did not respond to a request for comment.
Perspecta did not respond to a query. Leidos declined to comment.
The complaint, which was recently unsealed and is partially redacted, shows Perspecta largely relitigating many of the same issues featured in its Government Accountability Office bid protest.
The company alleges the Navy failed to fairly resolve a conflict of interest; conducted misleading discussions and made numerous errors in its price and technical evaluations when it awarded Leidos a $7.7 billion contract to provide services for the Navy-Marine Corps Intranet.
"The result of these errors is that the Navy's best value decision is premised on illusions," the company wrote in its complaint. "For these reasons, the Navy's award decision is arbitrary and capricious and ultimately cannot stand."
Perspecta filed a lawsuit against the Navy in the Court of Federal Claims in early July following GAO's dismissing its bid protest. GAO concluded that while the Navy did make some errors, those problems did not amount to a "competitive prejudice" against Perspecta.
Perspecta is asking the court to prohibit the Navy from continuing to work on the NGEN contract with Leidos as well as direct the service to re-open discussions for the competition.
Inside Defense earlier this month reported the program's scheduled transition -- from incumbent contractor Perspecta to Leidos -- has already been delayed due to the lawsuit.
"As the NGEN protest has moved from the GAO, where it was fully decided to the Court of Federal Claims, we remain confident that this protest will be resolved in our favor," James Reagan, Leidos' chief financial officer, said during an Aug. 4 call with investors. "However, this does delay the full transition until late in the fourth quarter, continuing into 2021."
Perspecta's chief executive Mac Curtis in a separate Aug. 6 earnings call predicted his company would receive a six-month extension to its current NGEN services contract.