Owl International Inc., d/b/a Global, a 1st Flagship Company (B-423281; B-423281.2)

You should care.

Category: Technical evaluation, cost or price evaluation, past performance, process issue

Date: 25 April 2025

URL: https://www.gao.gov/products/b-423281%2Cb-423281.2

Owl International Inc., the majority owner of the incumbent joint venture Global PCCI JV, protested the Navy’s award of a $315 million IDIQ contract to its former JV partner and minority owner, PCCI, Inc., for global emergency ship salvage and spill response services. Owl alleged that Navy misevaluated proposals under nearly every factor—especially in its failure to assess professional compensation under FAR 52.222-46—and unreasonably awarded the contract to PCCI despite Owl’s lower evaluated price and stronger incumbent workforce.

GAO sustained the protest in part, finding that Navy failed to conduct the required evaluation of professional employee compensation, despite having collected data sufficient for such an assessment. The omission undermined the integrity of the cost realism analysis and invalidated the Navy’s best value tradeoff. GAO recommended reevaluation consistent with FAR 52.222-46, potential reopening of discussions, and reimbursement of protest costs.

Other challenges dismissed or denied included:

• Responsibility determination: GAO would not second-guess the agency's affirmative responsibility finding absent clear, disqualifying evidence, which Owl failed to provide.
• Technical and past performance ratings: GAO upheld Navy’s ratings, finding the agency reasonably assessed both offerors' capabilities and experience under the ESSM contract, including proper credit for performance as joint venture partners.
• Cost realism of capped indirect rates: GAO ruled that under the RFP’s terms, proposed ceilings were deemed realistic by definition—thus rejecting Owl’s argument that low caps posed unacceptable performance risk.

GAO sustained in part and denied in part. Navy must reevaluate compensation realism and reassess the best value decision. Inclusion of FAR 52.222-46 in a solicitation requires real analysis of employee pay, but capped indirect rates may pass realism checks where the solicitation says so.

Digest

1. Protest that agency misevaluated proposals by failing to assess professional compensation plans as provided in Federal Acquisition Regulation provision 52.222-46 is sustained where solicitation required offerors to submit information necessary to perform an evaluation and agency did not perform the required evaluation.
2. Protest that agency misevaluated technical and past performance proposals is denied where the evaluation was reasonable and consistent with the solicitation criteria.
3. Protest that agency misevaluated proposed costs by considering capped indirect costs to be realistic is denied where the solicitation provided for that treatment, and the evaluation was thus consistent with the terms of the solicitation.