A newly released Government Accountability Office ruling denying a bid protest by Sikorsky of the Army's Future Long-Range Assault Aircraft states the government found the engineering design and development "unacceptable," due to a lack of detail in the proposal. The Army made its decision despite the price of Sikorsky's bid being $3.6 billion lower than its competitor.
The Army awarded the FLRAA contract, worth more than $7 billion with all options, to Bell, owned by Textron, on Dec. 5. Service officials gave few details at the time about their rationale for the decision, saying they took a “best-value approach,” in selecting Bell’s V-280 Valor over Sikorsky’s DEFIANT X.
On Dec. 28, Sikorsky, owned by Lockheed Martin, filed a protest with GAO, arguing “the data and discussions lead us to believe the proposals were not consistently evaluated to deliver the best value in the interest of the Army, our soldiers and American taxpayers.”
On April 6, GAO denied Sikorsky’s protest, and the Army lifted the stop-work order on the program on April 10.
The full GAO report with proprietary information redacted was released Thursday afternoon. GAO notes that in making its decision, the government prioritizes engineering design and development above the cost of each bid proposal.
A side-by-side comparison for the evaluation of each company’s proposal by the Source Selection Evaluation Board concluded the engineering design and development of Sikorsky’s proposal was “unacceptable,” and Bell’s was considered “acceptable.” Additionally, Sikorsky scored “unacceptable” in the architecture subcategory, SSEB noted.
The SSEB’s evaluation states the value-adjusted total evaluated price for Bell’s proposal was $8.09 billion and Sikorsky’s was $4.45 billion. Additionally, both were rated as “acceptable” in their commitment to small business.
“While [Sikorsky’s] proposed price is lower, the offer is based on an unacceptable engineering design. Additionally, [Sikorsky’s] cost realism could not be fully assessed due to their unacceptable approach, which is therefore indicative of cost and performance risk. In contrast, [Bell’s] proposed price, in comparison to the design’s [independent government estimate], is reasonable and provides the best value to the government,” the SSEB stated in its evaluation.
Army, Sikorsky disagree on level of detail required in RFP
At issue in the protest was a phrase in the Army’s request for proposals asking industry to “allocate system functions to functional areas of the system.” The Army’s intent was for offerors to “allocate system functions to functional areas of the system as requiring the allocation of system functions down to the subsystem level,” the GAO report states.
“The agency’s technical evaluators explain that functions are ‘effectively actions or behaviors that a system may perform,’ and ‘items in the architecture need to be justified’ through allocation -- this is ultimately the development of the weapon system’s logical architecture that ‘convey[s] ideas of subsystems and components’ as opposed to a tangible, physical architecture,” the report explains.
However, Sikorsky interpreted the allocation requirement in the RFP as referring to “allocation of functions at the system level, which is the top of the system architecture,” the report states.
Among the RFP’s four evaluation factors, the Army considered engineering design and development one of the two most important.
Sikorsky, in its initial proposal, “included some, albeit incomplete, allocations of functions to the subsystem level,” the report stated. But the Army found that the proposal did not contain enough detail and that there were at least 20 “references to subsystems and flaws at the subsystem level of analysis.”
Among the flaws were that Sikorsky did not apply Modular Open System Approach (MOSA) requirements “holistically across the weapon system and throughout the lifecycle,” and that it was limited to the avionics subsystem. The Army found this to be a “weakness in the offeror’s proposal that will result in an increase of technical and cost risk for the government of not allocating requirements to lower tier subsystems and components,” the report states.
After Sikorsky asked the Army questions about its initial proposal and the service responded, Sikorsky eventually submitted its final proposal revisions, which “removed allocations of functions to the subsystem level that it had previously included in its initial proposal,” GAO stated.
In responding to the protest, the Army compared Sikorsky’s proposal to a drawing of a house’s exterior, indicating basic size and shape.
“Such a picture did not provide the functional detail that the Army required showing what the space would look like on the inside (i.e., how the system functions would be allocated to different areas of the system -- for example, that food storage and preparation would be allocated to a space for the kitchen),” the report stated.
Ultimately GAO agreed with the Army’s definition of the requirements laid out in the RFP.
“We find no basis to question the agency’s conclusion that Sikorsky’s inadequately detailed functional architecture model provided ‘insufficient evidence and inadequately defined scope to determine how [Sikorsky’s] proposed architecture would meet the government’s MOSA and architecture requirements’ and “present[ed] a cost and schedule impact resulting in an unacceptable risk,” GAO stated in the report.
Sikorsky released a statement Thursday afternoon, saying the company will “take the time to review [the report] and determine our next steps.”
“We remain confident the Lockheed Martin Sikorsky and Boeing team submitted the most capable, affordable and lowest-risk Future Long-Range Assault Aircraft solution,” the company said.