PROTESTS HALT $100 MILLION NAVY PROJECT ON GUAM

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Contractors to fight contract award to Alaska company

By Maureen N. Maratita

HAGATNA, Guam (Marianas Business Journal, July 6, 2009) – Naval Facilities Marianas issued a stop work order to Chugach World Services late in the day on July 7 for the $100 million-plus housing contract awarded to Chugach on June 22. This followed two protests by what Journal sources said are locally owned companies on Guam.

Additionally, sources said, GFS Group was requested not to demobilise its present management of the contract. Journal sources said GFS will continue to operate the contract until such time as the Government Accountability Office can determine a course of action following the protests.

At least three of the eight bidders on the lucrative Navy and Air Force base housing and maintenance contract are ready to file protests on the award, according to Journal sources.

A fourth is considering protesting.

Chugach World Services was awarded the US$100 million-plus contract on June 22.

The Department of Defense announcement confirmed a base period of a $12,858,355 ($5,129,675 firm-fixed price and $7,728,680 indefinite-delivery indefinite-quantity) under a combination FFP/IDIQ contract. The contract has a total 59-month performance period consisting of a two-month mobilization period, six-month base period, and four 12-month option periods.

While declining to provide specific details concerning protests, sources told the Journal, "We'll file a protest. This is not going to go lightly. Everybody will protest and ask for corrective measures and a re-bid. This could tie up the contract for months."

The contract has been the subject of much discussion in contracting circles as one of the first and largest contracts to be awarded under the joint basing arrangement. The two lead contenders were generally agreed to be Chugach - a Native Alaskan Corporation which has been doing business on Guam for a number of years and GFS Group, a local company.

Journal sources said the award to a Native Alaskan company was a factor in the multiple protests expected.

"The Navy evaluation is subjective. Why would the Navy evaluation board not weigh a local incumbent company heavier than a Native Alaskan business that's only been in business for a year?"

Chugach World Services is a subsidiary of Chugach Alaska Corp. Sources said that Chugach had incorporated a new entity when the subsidiary that was originally doing business on Guam graduated from the 8(a) program after the allowed maximum term of nine years. "Only a Native Alaskan company has the ability to grow these offsprings this way. They will continue to incubate these companies for as long as they need to. This is the challenge Guam has with the buildup."

GFS officials also supplied the Journal with a statement. "We have been very pleased with our relationship and performance with the Navy," the statement said. "We continue to look forward to working with them. GFS is one of Guam's largest defense service contractors. We operate other contracts and continue to look forward to the future."

GFS declined to confirm or deny whether it would, as expected, file a protest. However, the statement went on to say, "On this contract, we are weighing our options."

Protests might delay implementation significantly, but ultimately one source said, the Navy had made the award, and was not going to willingly reconsider its decision.

Rey Llaneta, manager for the Western Pacific Region for Chugach Alaska Corp., told the Journal, "The Chugach companies have years of experience in managing similar housing contracts (See "Q&A" on Page 9.). "You don't get given contracts over and over because you are failing. We get our contracts because of our charter to exceed our customers' expectations." The award to Chugach, he said, was a positive development for another reason. "People will get to know ANCs," he said.

The Journal reported on June 8 that entities which bid on the current contract included a joint venture between Chugach Alaska Corp. and Agbayani Construction, Chenega Corp., GFS Group, Alutiiq, a joint venture between ACEPEX and Advance Management Inc., AETNA, All Star and a joint venture between Madison Construction and Tomyo. The process was long; 15 amendments to the solicitation were posted, and according to a Journal source, about 500 requests for clarification were fielded. The response date was extended to March 6 and then to April 15, with the award next expected to be made locally in mid-May, and then mid-June.

However, according to a Naval Facilities Marianas statement in early June, reasons for the delay were also administrative. "NavFac [headquarters] policy requires all awards totaling more than $100 million be reviewed and approved by NavFac HQ. This particular solicitation is undergoing internal NavFac review and evaluation," NavFac told the Journal.

In March 2007, GFS Group was awarded the most recent previous housing maintenance contract for $7.57 million. Work on that contract was due for completion in March.

Talk about awards to Alaskan native corporations is a subject of discussion in Washington, D.C. The Subcommittee on Contracting Oversight will hold a hearing on July 16 to review the number of contracts awarded to ANCs and other issues, according to the subcommittee.

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