Labor rates sparked fight over $4B Air Force contract Pattanaphong Khuankaew

Hidden from sight for more than a year, a newly-released bid protest decision shows why even a winning contractor can find reasons to make such a filing.

In 2021, ManTech and two other companies won positions on a $4 billion contract for security support services to the Air Force.

As we reported around that time, ManTech filed a protest despite being one of the winners and got a favorable ruling from the Government Accountability Office in June of that year.

Since then there’s been Silence has fallen over the contract since then because the Special Access Program Security Support Services was highly-classified. GAO had to rely on the Air Force to determine what could be released to the public.

The Air Force uses the contract for classified security support services such as analytical and program support and surge requirements. Contractor personnel also may be required to travel into areas of unrest.

The silence surrounding the contract and the protest ended Friday (March 17), when the GAO released the public version of its decision.

ManTech’s protest looked unusual from the start because they were one of the winners of the contract along with General Dynamics and Northrop Grumman. Peraton acquired Northrop Grumman’s IT services business at around the time of awards and took that position on the contract.

The companies compete against each other for task orders. Now that the GAO decision is public, we have a better understanding of why ManTech filed its protest.

ManTech objected to the labor rates submitted by GD. According to the decision, ManTech complained about how GD submitted rates that were too low and the Air Force didn’t properly evaluate them.

ManTech was an incumbent on one of the contracts rolled into SAP SSS and knew that GD’s pricing was lower than the labor rates on its contract.

In its protest, ManTech challenged the way the Air Force conducted the analysis of the labor rates. GAO agreed there was an issue.

To evaluate the rates, the Air Force established what it called “government average” rates. GAO criticized the Air Force because it didn’t disclose the “specific basis for the agency’s calculation.”

This is important because in its proposal, GD said it could recruit a certain percentage of ManTech’s personnel and the Air Force accepted that assertion. But ManTech said that wasn’t a reasonable assertion because the company was paying a higher rate to its employees.

GAO said the Air Force should have seen that as a risk factor in GD’s proposal instead of evaluating the bid as low risk.

GAO questioned GD’s ability to meet the requirements of the contract with the lower rates because as the bid protest oversight agency sees it, GD likely would not be able to recruit the needed numbers of ManTech personnel.

The number of people GD said it could recruit is redacted in the decision.

GAO has told the Air Force to re-evaluate proposals by looking at the labor rates proposed by GD and comparing the rates to ManTech’s incumbent rates. Then the Air Force should make a new award decision.

It does not appear that the Air Force removed GD from the contract and all three companies are still competing with each other for task orders.

In my reading of the decision, ManTech had to challenge the labor rates because it would be at a disadvantage when it came time to compete for task orders. GD’s lower labor rates would be baked into the contract.

With GAO’s decision, ManTech won that point. But the story doesn’t end there.

ManTech came back with another protest in February 2022 that ended with a corrective action by the Air Force in April. Given the classified nature of the contract, no one is talking.

I believe ManTech wasn’t happy with how the Air Force was implementing the GAO recommendations. Or it was protesting a specific task order award. We likely will never know.