BIW seeks contract investigation Shipbuilder charges Navy inconsistent in award of $2.9 billion deal

WASHINGTON – Bath Iron Works is demanding an investigation of the process behind the Pentagon’s recent $2.9 billion contract award to a Mississippi shipyard as lead designer for the Navy’s new DD-X program.

The Navy named Ingalls Shipbuilding of Pascagoula, Miss., to lead the three-year project at the end of April following a high-stakes bidding process between BIW and Ingalls.

On Thursday, however, BIW and the shipyard’s parent company, General Dynamics, filed a 72-page protest with the General Accounting Office, the investigative arm of Congress. The complaint charges the Navy’s handling of the two-year evaluation was unfair and flawed, according to Allan Cameron, president of Bath Iron Works.

“After careful review of the facts provided during the Navy’s debriefing, it is obvious to us that the selection process was not consistent with the established evaluation criteria, and thereby gave an unfair advantage [to Ingalls],” Cameron said.

Cameron further pointed out that the Navy’s Source Selection Advisory Committee improperly overturned the technical judgments of the Source Selection Evaluation Board, which has the authority on technical matters.

The bidding process divided the shipyards into two separate teams. Bath Iron Works led the Blue Team, which also included project partner Lockheed Martin Corp. Ingalls, which is owned by Northrop Grumman Ship Systems, led the Gold Team.

The Navy and Ingalls both claim that the evaluation was handled entirely above board and that they followed established rules and guidelines.

“I can’t address the specifics,” said Navy spokesman Lt. Bill Speaks, “but it was awarded according to appropriate federal acquisition procedures and competitively selected based on best value.”

But armed with e-mails and other correspondence, Cameron cited three main issues of concern in BIW’s complaint where he believes Ingalls received an unfair competitive edge.

At one pivotal moment during the competition last January, the Naval Sea Systems Command rejected BIW’s Blue Team request to use a DD-963 hull for engineering development models, according to an e-mail submitted by Cameron.

“We will not entertain a leasing or other agreement at this time to lease, loan, grant, sell, etc., a DD-963 Class ship in furtherance of the Blue team effort,” the e-mail said.

Yet, in the days following the contract award, the Navy praised Ingalls for proposing to use a DD-963 hull for at-sea testing of the radar, something that gave Ingalls “significant strength” in the competition.

BIW also is protesting that Navy personnel involved in reviewing proprietary technology of different projects were not adequately “fire walled” from the DD-X project. Cameron claims the circumstance prejudiced the Navy in favor of Ingalls because a Gold Team member, Raytheon, holds the contract to a related radar system, SPY-3.

Cameron also said that while the evaluation of ship performance was intended to be separate from evaluation of engineering development models, the Navy counted ship performance features not only toward ship performance, but also toward the grade given for engineering development models.

This double-counting was pivotal in the award to the Gold Team, according to BIW’s complaint.

“We are very concerned about the fundamental fairness of the award decision in the light of a clearly flawed process,” Cameron said.

Maine Sens. Olympia Snowe and Susan Collins, both Republican, endorsed the investigation.

“BIW has a number of legitimate questions that deserve answers,” said Collins, a member of the Senate Armed Services Committee. “In particular, I am disturbed that Naval officials appear to have given the two competing teams different answers to critical questions during the development of their DD-X proposals.”

“Given the importance of this contract, it is crucial that Navy contractors, and in particular the American people, have confidence that decisions of this magnitude are made with fairness and integrity,” Snowe said. “Bath Iron Works has outlined serious concerns that, if proven, would undermine my confidence in this process, and merit reopening of the … process.”