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Editor’s Note: Lee Moon is president of Iona Moon, LLC, a full-service business development and management consultancy with extensive experience with Seaport-e , having won the base contract and several task orders for 23 companies over the past four years. The full text of this article may be found here.

 

Navy Systems Commands, including Naval Air Systems Command, headquartered at Patuxent River Naval Air Station, have run afoul of Federal Acquisition Regulations and Department of Defense Acquisition regulations with the use of the Seaport-e contract vehicle, according to a report by the Department of Defense Inspector General  issued earlier this month.

By not following the Concepts of Operations issued by the Seaport-e program manager, the Inspector General found that NAVAIR and other agencies restricted competition, performed inadequate market research, improperly set-aside some work for small businesses, failed to enact measurable quality standards for contract performance, and failed to control the scope of contracts across functional areas, effectively using some task orders as indefinite- delivery/indefinite-quantity (IDIQ) contracts.

The IG cited 133 task orders across all ordering agencies, including 17 from NAVAIR, and determined that 39, valued at nearly $500-million, were awarded without fair competition. Of the 17 NAVAIR task orders examined during the year-long audit, the IG found 7 were set-aside improperly and 15 did not follow quality assurance requirements. 

 

 

Small business set-asides illegal?
Further, the report finds some task-orders were improperly set-aside for small business without proper market research and possibly against FAR regulations. FAR 19.502-2(b) states: “the contracting officer shall set aside any acquisition over $100,000 when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns.” The report cites a recent protest of an NAVAIR task-order award by Delex Systems, Incorporated, a small business prime contractor on Seaport-e, which leaned heavily on that FAR clause.

 

 

The report cites lack of training of contracting officers writing the task orders, insufficient understanding of performance-based contracting practices, and inadequate oversight to standardize and enforce CONOPS at each ordering agency.

Some task orders were used as IDIQs in and of themselves, the report charges — “undefinitized” or