In its recent denial of industry protests over the U.S. Coast Guard’s Offshore Patrol Cutter design contracts, the U.S. Government Accountability Office Comptroller General showed a pretty keen interest in past-contract performance. Contractors may be wise to take note.
Huntington Ingalls Industries and VT Halter Marine protested the awards to Bath Iron Works, Eastern Shipbuilding and Bollinger Shipyards for design work on the OPC.
The Coast Guard informed competitors “of weaknesses in their respective past performance,” GAO reports. “Huntington Ingalls, VT Halter Marine, and Bath Iron Works were informed of marginal ratings in past performance and were requested to document any corrective action taken with regard to negative past performance.”
The Coast Guard’s past performance evaluation team (PPET) reviewed the past performance questionnaires for contracts “identified by the offerors for recency and relevance.” GAO says. “With respect to Bollinger, the PPET determined that the offeror had satisfactory past performance based upon three past performance questionnaires. One of the questionnaires addressed the performance of Bollinger’s design agent, Gibbs & Cox, on the Littoral Combat Ship.”
GAO notes, “The prime contractor, who completed the questionnaire, rated Gibbs & Cox’s performance as marginal with respect to its ‘ability to manage an acceptable ratio of negotiated costs to actual costs.’ The PPET contacted the prime contractor, who stated that the design agent did not meet some contractual requirements and that costs surged as additional government requirements were added to the contract. The PPET also contacted the Navy personnel responsible for the program; those individuals stated that the contractual issues were not entirely the fault of the design agent because the construction of the ship was simultaneous with its design, and a requirement to adhere to Naval Vessel Rules was added during contract administration.”
The PPET concluded, based upon the Navy’s opinion, “the design agent’s marginal rating was mitigated by circumstances that were not the agent’s fault.”
The Navy awarded multiple contracts for the Littoral Combat Ship, GAO points out. One contract was awarded to Lockheed Martin for the design and construction of the Freedom variant of the ship; Gibbs & Cox was the design agent under this contract. Another contract was awarded to Bath Iron Works for the first two ships of the USS Independence variant, LCS 2 and LCS 4.
GAO says, “The prime contractor noted in the questionnaire’s narrative that ‘[c]osts were dramatically different for the completed design . . . for many reasons beyond [Gibbs & Cox’s] control.’”
Two of Bollinger’s questionnaires addressed the firm’s performance of contracts for the Coast Guard’s Fast Response Cutter and the Bee Mar offshore supply vessel, GAO says, which the PPET also found to be recent and relevant.
“With respect to the fast response cutter, the most recent … report included four marginal ratings in the areas of schedule, management, management responsiveness, and logistic support/sustainment,” GAO says. “The … report stated that the schedule for soft deliverables was unsatisfactory. The more recent past performance questionnaire for the fast response cutter, by the same individual that (previously) reported, rated Bollinger’s performance as mostly exceptional to satisfactory, with no marginal or unsatisfactory ratings.”
Although the questionnaire’s narrative indicated some areas of concern, such as non-compliant “soft deliverables,” GAO says, “It noted the firm’s substantial organizational and management change, which had resulted in improved performance.
PPET concluded that Bollinger “met previous contractual requirements with no marginal or unsatisfactory past performance reports,” GAO says, “and stated that, with respect to timeliness of performance, Bollinger had addressed its initial delivery problems and was on schedule, due to improvements in Bollinger’s management structure.”
With respect to Eastern, GAO says, the PPET determined “the offeror’s past performance was superior, based upon five past performance questionnaires. Two of the questionnaires addressed the performance of Eastern’s design agent, STX Marine, on the Irish offshore patrol vessel and the New Zealand offshore patrol vessel. As relevant here, the questionnaire for the Irish offshore patrol vessel was completed by the prime contractor on the contract, Babcock International, who provided positive evaluations. The PPET assigned Eastern a superior rating under past performance.”
With respect to Bath Iron Works, the PPET determined the “offeror’s past performance was satisfactory.”
One questionnaire addressed the performance of Bath Iron Works’ design agent, Navantia S.A., on the Spanish navy’s Buque de Acción Maritima. Two questionnaires addressed the performance of Bath Iron Works on the U.S. Navy’s DDG 51 Arleigh-Burke and DDG 1000 Zumwalt class guided missile destroyers.
“The PPET also identified … reports for Bath Iron Works’ contracts for two Littoral Combat Ships (LCS 2 and LCS 4), which were determined to be relevant,” GAO says. “The PPET initially assigned Bath Iron Works a marginal rating largely based on its performance on the LCS 2 and LCS 4 contracts. In this regard, the PPET noted that, with regard to customer satisfaction, the Navy customer rated Bath Iron Works as marginal or worse on both the LCS 2 and LCS 4 contracts for management responsiveness, cost control, quality of product, and schedule.”
The PPET conducted follow-up telephone calls to obtain updated information on the Littoral Combat Ship contracts, the GAO says, and the team was informed “performance had improved since the Navy stopped changing the requirements and that schedule issues continued to improve over time. The customer on the Littoral Combat Ships (LCS 2 and LCS 4) informed the PPET that Bath Iron Works was meeting contract requirements and had learned how to weather problems caused by outside forces--such as Hurricane Katrina and the U.S. Navy deciding to use the Naval Vessel Rules--that played a large part in Bath Iron Works’ lateness and failure to meet schedule requirements earlier in the contract.
The PPET determined that the past performance problems on the Littoral Combat Ship contracts were not the fault of Bath Iron Works.
With respect to Huntington Ingalls, the PPET determined “the offeror’s past performance was marginal. The PPET received past performance questionnaires for four contracts for the Coast Guard’s National Security Cutters and the U.S. Navy’s DDG 51 destroyer. All were found to be recent and relevant, and included mostly positive comments.”
However, the PPET noted that a report for the National Security Cutter No. 5 contract indicated schedule problems, GAO says. The PPET also identified three reports for Huntington Ingalls’ contract for LPD 17 class amphibious transport dock ships.
“The PPET found that the … reports, which covered performance from October 2009 to September 2012, included adjectival ratings that ranged from exceptional to unsatisfactory,” GAO says. “In this regard, the PPET noted that, although the customer that completed the … report stated that it ‘probably would’ again award a contract to Huntington Ingalls [,the] report included numerous adverse comments. The PPET noted Huntington Ingalls’ unsatisfactory rating for cost control, under which the LPD customer commented that ‘[c]ost performance . . . has degraded’ over the performance period.”
The PPET’s follow-up conversations on the LPD contract “indicated that negative performance was continuing.” GAO says. “The customer for the LPD contract noted that Huntington Ingalls’ work had deteriorated prior to Hurricane Katrina, worsened after the hurricane, and had improved to be ‘stabilized at a poor level.’”
The PPET concluded that “Huntington Ingalls’ failure to meet contract requirements was the contractor’s fault.”
With respect to VT Halter Marine, the PPET determined “the offeror’s past performance was marginal. The PPET received past performance questionnaires for five contracts. Three of the questionnaires addressed the performance of VT Halter Marine’s design agent, DCNS, on the Singapore navy’s Formidable Class Frigate, the French navy Multi-Mission Class Frigate, and the French navy Horizon Class Frigate, “and provided very positive comments on DCNS’s performance.”
The remaining two questionnaires addressed the performance of VT Halter Marine on the Egyptian navy Fast Missile Craft and the U.S. Navy’s T-AGS 66 oceanographic survey ship.
“The PPET also identified … (other) reports for the two VT Halter Marine contracts, as well as reports for the U.S. Navy’s T-AGM 25 unarmed missile range instrumentation ship,” GAO says. The PPET concluded that the T-AGM 25 was relevant due to the similarity of work in both type and complexity as that required by the offshore patrol cutter, and was comparable due to similar sizes, speeds, and draft requirements.
“The PPET noted the … reports and questionnaires indicated problems under the Egyptian Navy and T-AGM 25 contracts with respect to VT Halter Marine’s performance in delivering a quality product in a timely fashion,” GAO says. “The PPET concluded that VT Halter Marine’s multiple instances of failing to meet contract requirements merited a marginal past performance rating.”