L-3 Out, Dyncorp-McNeil in for $4.65B Iraq Translation Contract?

Translators on the ground are an often-overlooked but critically important aspect of US operations in Iraq, Afghanistan, et. al. Indeed, when L-3 Communications acquired Titan Corp. in a $2+ billion June 2005 deal, one of the strengths it was buying was Titan’s status as the U.S. Government’s leading supplier of linguists and interpreters under the U.S. Army Intelligence and Security Command’s (INSCOM) Worldwide Linguist Support Contract.

In a services business, however, such strengths are only as durable as the contracts they’re associated with. Indeed, this is one of the reasons services businesses tend to have low acquisition multiples.

A December 2006 US Army award brought that principle into sharp focus, by handing the 5-year, $4.65 billion contract for Iraq-related translation and interpretation services to Global Linguistic Solutions LLC (GLS), a joint venture formed by security contractor DynCorp International (51%) and McNeil Technologies. But a GAO protest placed the whole process into limbo – and the GAO’s ruling stirred the issue up further. The process has finally resolved again after almost a full year, with L-3 providing all translation services in the interim. And the winner is…

The GLS team worked to overcome L-3’s incumbent advantages by leveraging Iraq-related experience of their own that included both training functions and linguists, all led by the creator of the coalition’s Iraq Language Program in 2003 and a former commandant of the Defense Language Institute. See release for further details.

Under the contract, GLS will provide foreign-language interpretation and translation services to the United States Army and other U.S. government agencies supporting OIF, including embedded Iraqi translators who will operate with U.S. forces. GLS will employ up to 6,000 locally-hired translators and up to 1,000 United States citizens with security clearances who are native speakers of languages spoken in Iraq. Full contract performance will begin in March 2007.

L-3 Communications downgraded its 2007 revenue forecast in response – but that wasn’t their only response. Which brings us to…

Controversy and Updates

Dec 7/07: Dyncorp’s GLS partnership wins the revised RFP as well. Under the contract, GLS will provide foreign-language interpretation and translation services to the U.S. Army and other U.S. government agencies supporting OIF, including embedded Iraqi translators who will operate with U.S. forces. GLS will employ up to 6,000 locally hired translators and up to 1,000 U.S. citizens with security clearances who are native speakers of languages spoken in Iraq. Dyncorp release.

L-3’s release expresses its disappointment, and makes no mention of challenges to the decision. It adds:

“L-3 is proud to have had the opportunity to support the U.S. and Coalition efforts in Iraq. The company noted that the loss of the linguist contract has no impact on its previously announced financial guidance for the years ending December 31, 2007 and 2008, which included the linguist contract through December 9, 2007, and as a result, the company is reaffirming its guidance for both periods.”

Aug 14/07: Dyncorp announces that the U.S. Army Intelligence and Security Command (INSCOM) has issued an amendment to the (renewed) solicitation for translation and interpretation services in support of Operation Iraqi Freedom.

The Army’s amendment to the solicitation revises 3 evaluation subfactors, and specifies a 5-page proposal limit for each subfactor. The subfactors are those dealing with fill rate (the ability to deploy qualified personnel on a timely basis), experience, and transition plan. Revised proposals are due to the Army on August 24, 2007.

June 8/07: The GAO denies the US Army’s Request for Reconsideration. From the GAO decision:

“Under our Bid Protest Regulations, to obtain reconsideration the requesting party must show that our prior decision contains errors of fact or law that warrants reversal or modification of our decision. 4 C.F.R. 21.14(a)(2007). As discussed above, the agency’s reconsideration request fails to make that showing. The request for reconsideration is denied.”

April 11/07: DynCorp International LLC announces that the U.S. Army has filed a rare Request for Reconsideration with the Government Accountability Office (GAO), challenging the GAO’s decision to sustain the protest filed by L-3. In requesting reconsideration, the Army has asked GAO to reverse its March 29, 2007, bid protest decision. This is the first time that the Army has filed a request for reconsideration in the past 10 years, according to Dyncorp’s search of GAO bid protest decisions since 1996. In addition to identifying errors of law and other flaws in the GAO’s earlier decision, the Army has requested that the GAO issue its decision on the reconsideration request expeditiously. DynCorp release | IBT report.

March 29/07: The US Government Accountability Office upholds L-3’s protest, because the Army did not “reasonably apply” the evaluation factors stated in the bidding process. The GAO raps the Army on 3 grounds. One, for rating GLS and L-3 as equal in the Strengths section, where L-3 had more closely related experience. Two, for their approach to evaluating the offerors’ respective transition strategies, which the GAO believes penalized L-3 for being the incumbent. Third and most important, they believe the Army penalized L-3 for proposing a certain number of translators above the contract requirement of 7,217 available personnel in order to compensate for the fact that some translators are out of theater or unavailable for duty part of the time. The Army believed this would create a relative shortfall vs. the GLS proposal – but the GAO ruling found no basis for this:

“Here, it is clear that the critical criterion for assessing how many additional linguists will be needed to successfully meet the task order 1 fill rate requirements for annual productive hours is the amount of time an offeror’s linguists are expected to be in a non-productive status. Accordingly, it appears the only logical basis for the agency’s conclusion that GLS’s proposal of [deleted] linguists is more likely to meet the fill rate requirements than L-3’s proposal of [deleted] linguists would be a rationally supported conclusion that GLS’s [deleted] linguists are likely to spend [deleted] less time in a non-productive status than are L-3’s [deleted] linguists. The record, however, is devoid of any meaningful analysis addressing that issue. Indeed, at the GAO hearing, the MET chair testified that the agency gave no consideration to whether the additional personnel proposed by GLS will be sufficient to compensate for its linguists’ scheduled holidays and sick leave. Tr. at 526. Consistent with this testimony the record reflects no agency consideration of whether GLS’s linguists will spend more or less time in a non-productive status, either scheduled or unscheduled, than L-3’s linguists–nor has the agency represented that such analysis was performed. Absent the agency’s consideration of this issue, reasonably documented and rationally supported by credible data, we are unable to conclude that the agency reasonably evaluated L-3’s proposal of [deleted] linguists as being more likely to create a shortfall against the required fill rate than GLS’s proposal of [deleted] linguists.”

L-3’s press release adds that:

“During the protest, L-3 has continued to perform under its existing linguist contract and, in fact, is providing additional resources in support of the President’s troop surge.”

See also | Boston.com | CNN Money reports.

Jan 11/07: Global Linguistic Solutions LLC in Springfield, VA also received a delivery order amount of $49 million as part of a $4.65 billion contract. Work will be performed in Iraq and any related mission location, and is expected to be complete by Dec. 8, 2011. Bids were solicited via the World Wide Web on June 29, 2006, and 3 bids were received by the U.S. Army Intelligence and Security Command in Fort Belvoir, VA (W911W4-07-D-0001). See DID coverage… we think the Pentagon may have got the company name wrong in its release.

Dec 22/06: L-3 files a bid protest with the US Government Accountability Office, #B-299317.001. In response, the Army extended L-3’s contract, which expires on March 9, 2007, for 90 days. It also put the new contract on hold, until the GAO review is complete.

Dec 17/06: The US Federal Business Opportunity site officially announces the award of a $4.65 billion linguistic services contract to “Global Linguist Solutions, LLC, 6564 Loisdale Ct., Suite 900, Springfield, VA 22150.” DynCorp release | DynCorp International and McNeil Technologies release.

Aug 14/06: Closing date for proposals. The GAO later reveals that bids were submitted by 3 offerors, including GLS and L-3, but declines to identify the 3rd bidder.

Additional Readings & Sources

• DID: Lend Me Your Ears: US Military Turns to Contractor Linguists

• Washington Technology (Dec 18/07) – L-3 loses Army linguistics deal, revises ’07 financial guidance