LPTA lives on as DISA reissues $17.5B ENCORE III contract

A month after being rebuked by the Government Accountability Office for the way it planned to pick vendors in a 10-year, $17.5 billion IT services contract, the Defense Information Systems Agency issued a revised request for proposals Wednesday, giving vendors a little more than three weeks to submit new bid packages.

As expected, the changes DISA made in the revised ENCORE III solicitation are fairly narrow, responding only to the grounds on which GAO found the original RFP to be problematic. Crucially, to the chagrin of vendors and industry groups, the agency still will use a lowest-price technically acceptable methodology to pick winning firms for the indefinite delivery/indefinite quantity contract.

Although GAO’s August 3 decision rejected CACI and Booz Allen’s claims that LPTA was improper for ENCORE III, it did find that DISA couldn’t use that approach as it first intended. The agency had planned to exclude vendors on the basis of a “trimmed average” made up of all bidders’ prices, effectively disqualifying the ones whose prices were actually the lowest. GAO said that strategy was arbitrary and inconsistent with LPTA.

In the updated RFP, DISA says it will award spots on the ID/IQ contract — 20 in the full and open competition category and 20 in the small business category — based on their lowest evaluated prices.

In coming up with those “evaluated prices,” the agency will address another element of the GAO decision: the fact that it expected to award cost-reimbursable task orders under ENCORE III, but never asked companies to bid their expected rates for the cost plus portions of the contract, saying that would only be done in competitions for individual task orders.

Instead, the new solicitation requires bidders to propose rates for both fixed-price and cost-reimbursable task orders across 116 different labor categories. For the cost plus portions, they’ll only need to include the first year of the contract, 2017, but they’ll have to back up their labor rate estimates with solid documentation such as payroll records or salary survey data and be prepared to have their prices audited by the Defense Contract Audit Agency.

DISA’s source selection team will then take all of the cost-reimbursable proposals and determine whether any individual bidders’ expected prices are  realistic by looking at an average of the prices each vendor proposed in each labor category.

From there, they’ll calculate a “most probable cost” for the cost reimbursable parts of ENCORE III, add them together with each company’s proposals for the fixed-price portions of the contract and then choose the cheapest vendors that meet the agency’s tests for technical capability in both the full-and-open and small business categories.

The agency indicated it’s eager to get on with the ENCORE III source selection after several months of delays caused by the successful pre-award protests.  Companies have only until next Tuesday to submit any questions they might have about the revised RFP, and their final proposals are due Sept. 30.

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