When the military announced Sept. 7 that G4S was being phased out due to contractual failures, guards were initially elated, thinking they had scored a victory.

Many now fear they face another pay cut.

Union leaders say the amount of C&S three-year contract with the military may not be enough to maintain current pay levels, much less increase them.

The $57.3 million C&S contract averages out to $19.1 million per year. The $108.3 million five-year contract with G4S averaged out to $21.66 million per year.

“If C&S will give us the same payment as we’ve had under G4S, why we should work under C&S?” said Park Deok Seo, head of one of three unions representing the guards. He said guards are ready to go on strike if C&S doesn’t give them raises.

“At first, our members thought we had won against G4S,” said Kim Hyunjoong, leader of another union. “But this isn’t a complete victory because we don’t know what will happen with C&S in the future.”

None of the union leaders said they had met with C&S yet, and the company has given them no specifics about pay.

A C&S official last week said the company is still reviewing the matter but does not plan to lower wages. He said he does not know if C&S will increase their pay or alter their work hours.

U.S. Army Installation Management Command Pacific region spokesman Larry Reilly attributed the price difference between the two contracts to their different durations and the estimated number of “overall guard hours the Army anticipated ordering throughout the life of the contract.”

“The exact number of guard hours ordered throughout the life of the contract is unknown and will vary depending on mission requirements,” Reilly said in an emailed statement.

Asked if there was concern that guards might strike, Reilly said the Army reviewed the “reasonableness” of C&S’ proposal by comparing it with bids from other companies and the prices charged by previous contractors.

“Based on this comparison, the government does not consider the prices proposed by C&S to be unreasonably low,” Reilly said.

A G4S official, speaking on condition of anonymity because he was not authorized to talk to the media, questioned whether C&S would be able to hire enough guards and said more protests are possible. He said G4S submitted a proposal for the contract but was underbid by C&S.

Great Britain-based G4S was also faulted for failing to hire enough guards to fulfill its contract with the London Olympics and has promised to reimburse the British government for the cost of deploying thousands of military personnel to provide security at the Games.

G4S has paid back half of the $750,000 it owes the U.S. government for its contractual failures in South Korea and will repay the rest in January.

Kim Ji-hyoung, another union leader, said he is ready to go on strike although his union has not made a decision yet. He said guards are frustrated with USFK and with what they see as ongoing problems with its security contractors. He faulted the military for repeatedly hiring the lowest bidder, not the company that can do the best job.

“How can USFK ask us to protect the lives of U.S. soldiers and their family members when we work under the worst of conditions?” he said.

The RFP, issued on June 7, 2012, provided for award of a fixed-price contract for security services at Forward Operating Base Lindsey, Afghanistan, for a 7-month base period and two 3-month option periods. Protest at 5. Offerors were informed that award would be made to the offeror providing the lowest-priced, technically acceptable offer. Proposals were evaluated on a pass-fail basis for technical capability, pricing, eligibility requirements, and past performance. Id. at 6-7. As relevant here, under the eligibility requirements evaluation factor, offerors were required to be affirmatively determined to be responsible in accordance with the standards of Federal Acquisition Regulation (FAR) Part 9 and the solicitation.

The Army received seven proposals, and in June awarded the contract to Olive Group. EOD received a written debriefing that informed the firm that, although EOD’s proposal was otherwise technically acceptable and offered the lowest price, it was determined to be not responsible. Id. at 10.

On July 5, EOD protested to our Office challenging the award to Olive Group and requesting that the Army suspend contract performance in accordance with the Competition in Contracting Act of 1984 (CICA). On July 13, the Army advised our Office that it would reevaluate EOD’s responsibility and eligibility for award, and that, if the reevaluation results in a determination that EOD is eligible for award, the Army would “proceed accordingly.” In light of the Army’s proposed corrective action, we dismissed EOD’s protest as academic on July 16.

On July 25, EOD learned that the Army had authorized Olive Group to begin transitioning activities for contract performance, and was informed that EOD should have received official notice that it had again been found nonresponsible. Protest at 11. On July 31, EOD again protested to our Office objecting to the nonresponsibility determination, as well as the Army’s implementation of the corrective action and authorization for Olive Group to perform the contract. On August 4, the Army requested that EOD respond to specific concerns raised about EOD’s responsibility. On August 14, EOD filed a supplemental protest, arguing that the agency improperly re-awarded the contract to Olive Group and/or authorized contract performance before completing its reevaluation of OED’s responsibility.

The Army requests that we dismiss EOD’s protest as premature, stating that the agency has not yet completed its reevaluation of EOD’s responsibility. With respect to Olive Group’s performance of the contract, the Army contends that the agency was not required to continue to suspend contract performance because the CICA stay expired when GAO dismissed its protest. The Army also explains that it began to transition the contract to Olive Group in order to avoid a lapse of services.

We agree with the Army that where, as here, the agency has not yet made a new finding concerning EOD’s responsibility, EOD’s protest of the agency’s nonresponsibility determination is premature. In the event that the Army concludes that EOD is nonresponsible, the protester may re-file its protest, subject to our timeliness rules.

With respect to EOD’s argument that FAR § 9.105-2(a) requires the Army to complete its determination of EOD’s responsibility before awarding the contract to Olive Group or authorizing performance, this section indeed requires that “[w]hen an offer on which an award would otherwise be made is rejected because the prospective contractor is found to be nonresponsible, the contracting officer shall make . . . a determination of responsibility, which shall state the basis for the determination.” Here, the contracting officer in fact found EOD to be nonresponsible prior to awarding the contract to Olive Group. Although the Army’s corrective action involves a reevaluation of EOD’s responsibility, this does not implicate the agency’s compliance with FAR § 9.105-2(a) prior to awarding the contract to Olive Group.

The protest is dismissed.

Lynn H. Gibson
General Counsel

credit: http://www.gao.gov