Air Force’s NETCENTS-2 marks new round of delays with protest re-bid

Service pummeled with protests following April selection of contract winners

The Air Force’s Network Centric Solutions 2 (NETCENTS-2) IT contracting vehicle, already fraught with multi-year delays because of its complexity, has hit another speed bump after its long-awaited $6.9 billion award in April triggered sharp protests from losing bidders.

NETCENTS-2 is the Air Force’s replacement procurement plan for the service’s network-centric services and supplies, networking hardware and software, as well as system development, integration and security. The contracting vehicle – valued in total at $24 billion over 7 years – replaces multiple indefinite-delivery, indefinite-quantity contracts of the current NETCENTS vehicle.

The service was pummeled with protests following the April 16 selection of nine companies to provide IT products. The follow-on to the original NETCENTS, however, had already been plagued with contracting holdups. The Air Force made initial NETCENTS-2 awards for advisory and assistance services (ANAS) in November 2010, more than a year after the service’s original program was set to expire , and which was extended to cover the gap.

Following protests, Air Force officials issued a notice of corrective action on the request for proposal in late May, but stopped short of promising the action would result in new awards. “During debriefings and the subsequent protests, it became apparent that offerors may have inconsistently interpreted the requirements of the RFP as it related to completing contractual documentation and - in some aspects - the technical and price requirements,” the service stated in a May 31 memo. “While the Air Force did not respond on the merits to any allegations nor agreed any allegations had merit, it provided notification to the GAO that the following corrective action is being taken as it relates to subject solicitation to ensure fairness to all offerors and to ensure the best products for the Air Force will be obtained at fair and reasonable prices.”

The Air Force said corrective actions to be taken included reopening discussions with bidders in the competitive range, allowing those bidders an opportunity to resubmit another round of final proposal revisions, considering a new award decision and taking any additional action that might be needed to ensure NETCENTS procurement follows all laws and regulations. Bids were due in early June, just before going to press. Air Force representatives would not offer comment for this article.

The NETCENTS-2 bidding process brought in a large number of offers, Stephen Davis, chief of the Enterprise Systems Branch of the Air Force Program Executive Office – Enterprise Information Systems (AFPEO-EIS) told Defense Systems earlier this year. “Despite that robust response that we got from them, what we’ve needed to do is still be very thorough in our evaluation so that we insure that we are being fair to all of those offers. It takes time to do that and do that right,” he said as the service considered the initial bids. “There’s a lot of business that’s on the line for industry and we want to be sure to give them our full diligence in going through the evaluations. At the same time, there’s a lot that’s at stake for the Air Force that we want to be sure we get it right.”

For existing NETCENTS contractors, however, the most recent delay in a NETCENTS-2 award hasn’t been all bad news. The rebid process has “extended our ability to leverage NETCENTS,” according to Willie Callahan, vice president of information technology services at Lockheed Martin, which sells a range of IT products and services through the NETCENTS vehicle and also submitted a bid for NETCENTS-2. While Lockheed Martin is one of the contractors under NETCENTS, it has not yet been awarded any NETCENTS-2 contracts and was not party to the round of complaints. “Given the ceiling of the existing NETCENTS vehicle, the primary affect to companies would likely be a shortening of periods of performance, as the new vehicle is being competed,” he said.

“The NETCENTS vehicle nearly reached its maximum ceiling over an eight year-period,” Callahan said. “That has to be considered a success,” he added.

As acquisition systems have grown larger, pre-vetting contractors for larger defense contracts is becoming more common, especially when contracts total tens of billions, according to Barry Watts, a defense acquisition analyst for the Washington, D.C.-based Center for Strategic and Budgetary Assessments.

The Air Force’s Rapid Capabilities Office’s Long Range Strike program is an example of such streamlining, he said. “While they’re keeping it in the black, an organization has been created to bypass most of the red tape and inertia in the acquisition system,” Watts said. “In lieu of repairing the acquisition system, the Air Force saw fit to set up a special office to develop systems where the fundamental intent was to avoid all the red tape in the acquisition system, which tells you how convoluted things have gotten.”

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