Thank You, Next: Incumbent Loses Contract Despite Decades of Service

The incumbent contractor challenged the agency’s decision to issue a task order for airport security screening services to a competitor. The protester argued the agency unreasonably evaluated the awardee’s past performance, botched the price realism analysis, and conducted a flawed best-value tradeoff. GAO denied the protest, finding the agency’s evaluation was reasonable and consistent with the solicitation’s stated criteria.

Covenant Aviation Security LLC, GAO, B-423995; B-423995.2

• Background – The Transportation Security Administration issued a task order request for proposals for comprehensive security screening services at San Francisco International Airport (SFO) under its Screening Partnership Program (SPP). The protester, the incumbent since the SPP began in 2004, lost the competition to another offeror whose price was nearly $24 million lower. Both proposals received the highest possible ratings across all non-price factors. SFO is the only Category X (largest, highest-risk) airport in the SPP, making it significantly larger than any other airport in the program. The protester filed this protest challenging the award decision after a debriefing.
• Past Performance Relevance – The protester argued the awardee’s three past performance references were not similar in size or complexity because they involved smaller airports with fewer lanes, gates, and passengers. GAO disagreed and denied this ground. The record showed the agency expressly acknowledged the size differences but reasonably concluded the references were relevant because all three involved the exact same scope of SPP screening work, similar duties, and similar equipment. GAO noted that, as the longtime sole incumbent at the only Category X airport in the program, the protester essentially demanded an impossible standard—no other offeror could submit an SPP reference of equivalent size.
• Past Performance Rating – The protester argued it was “patently unreasonable” to assign the awardee and the protester the same high confidence rating, given the protester’s incumbency and stronger CPARS scores. GAO rejected this argument, reiterating the well-established rule that there is no requirement to give incumbents extra credit or reserve the highest rating for them. The record showed the awardee consistently exceeded performance measures across all three references, with numerous exceptional and very good CPARS ratings and no negative findings or marginal ratings.
• Price Realism-Fringe Benefits and Blended Rates –  The protester claimed the agency failed to scrutinize the awardee’s allegedly low fringe benefit rates and its blended rate for regular and premium (overtime) hours. GAO denied this challenge. The record showed the agency reviewed the awardee’s total hourly compensation rates (wages plus fringe) and confirmed they met or exceeded TSA minimums and Service Contract Labor Standards. The protester’s comparison to its own rates did not demonstrate the evaluation was unreasonable.
• Non-Labor Costs The protester argued the awardee’s proposal was noncompliant because it omitted line items for insurance and leased space. GAO denied this ground, taking the solicitation as a whole into account. While the contract required the awardee to maintain insurance approved by SFO, nothing in the solicitation required offerors to separately price insurance or leased space. The pricing template merely listed examples of potential non-labor cost categories that offerors *could* include.
• Best-Value Tradeoff – The protester argued the agency relied on adjectival ratings rather than looking behind them to compare the proposals’ actual merits. GAO denied this ground, finding the protester had ignored more than 15 pages of detailed factor-by-factor and strength-by-strength analysis. The agency documented why the protester’s slight technical edge under two factors did not justify its $24 million price premium.

The protester is represented by Dana B. Pashkoff, Asher F. Young, and Jessica C. Abrahams of Faegre Drinker Biddle & Reath LLP. The intervenor, VMD Systems Integrators, LLC, is represented by Craig A. Holman, Thomas A. Pettit, and Kristina Lorch of Arnold & Porter Kaye Scholer LLP. The government is represented by Michael Kiffney and Christopher J. Curry of the Department of Homeland Security. GAO attorneys Christine Martin and Tania Calhoun participated in the decision.