Small Business Fights Big Government and Wins Protest against the U.S. Army with Jackson Kelly’s Help

  • CLIENT: Azimuth, Inc.
  • CHALLENGE: When it learned it had been passed over for a sizable U.S. Army contract, Azimuth was certain the bid selection process had been tainted by improper behavior within the U.S. Army but it knew its suspicions would be hard to prove.
  • SOLUTION: Jackson Kelly attorney Eric Whytsell helped Azimuth report the suspected Procurement Integrity Act violations and protest the U.S. Army’s contract award decision before the Government Accountability Office (GAO).
  • RESULTS: The U.S. Army took “corrective action”, cancelling the award, replacing the contract selection panel, and clearing the way for a new procurement and evaluation process.

azimuth

THE STORY

Azimuth Inc. designs and manufactures complex electronics, software, and mechanical engineering products for federal agencies including the Department of Defense, FBI and NASA. The company’s products include naval diving systems, “bombots” that help with identification and removal of IEDs on and off the battlefield, military vessel navigation systems, and geographic information systems for coordinating combat engineering work in theater.

Founded in 1988 by Craig Hartzell, a retired Special Forces soldier, Azimuth Inc.’s number-one goal is to provide state-of-the-art, reliable equipment to the U.S. military.

“I’m a disabled U.S. military veteran,” says Hartzell. “I served in the 5th Special Forces Group. There isn’t a person in this company that does not have some sense of obligation and pride and motivation to support the defense of the United States.”

If you have questions regarding your company’s procurement matter or government contract, contact Jackson Kelly attorney Eric Whytsell at ewhytsell@jacksonkelly.com.

THE CHALLENGE

One of Azimuth’s most celebrated products is the Combat Terrain Information System (CTIS), which it developed in partnership with Northrop Grumman. (The system is also commonly known as ENFIRE.) The two companies had been making the systems for U.S. Army warfighters since 2005.

“We had glowing performance evaluation reports,” states Tina Belt, Vice President and CFO of Azimuth. “The government loved us.”

In the entire history of the CTIS program, there were only two companies in the world that had ever built the CTIS systems: Northrop Grumman and Azimuth. So, when the contract came back up for bid in 2013, the two companies felt good about their chances of retaining the contract.

But when the award was announced, they learned they had lost out to an inexperienced competitor who had previously only sold much less sophisticated general-purpose computers. What’s more, that company had promised the Army “fast-track” delivery of the CTIS products, something Azimuth was certain was impossible based on its first-hand experience with the supply chain. Belt knew “something fishy” was going on, but she needed help uncovering the facts and then presenting them to someone who could address the problem.

THE SOLUTION

Belt turned to her long-time counselor Jackson Kelly attorney Eric Whytsell, a member of the Firm’s Government Contracts and Investigations Practice Group, for advice.

When a company loses a bid for a Federal contract, it has 3 days to request a debriefing from the procuring agency. As soon as Whytsell received Belt’s call, he made sure Azimuth properly requested its debriefing. During that meeting, Whytsell and Belt learned that the competitor company had promised to deliver the CTIS systems on an impossible timeframe: one of the parts was only available from a specific vendor that Belt knew personally. Because Belt’s contact at that company had told her the part would not be available in time to meet the schedule promised by Azimuth’s competitor, Belt knew that the competitor’s promise was baseless. In addition, based on Azimuth’s (and Northrop’s) years of experience with the CTIS program, Belt knew the competing company’s price was too low to be accurate, particularly since they had no experience developing or manufacturing complex products like CTIS.

“I knew immediately something was wrong,” remembers Belt. “How could they do as well as us when the evaluation process weighs heavily on past performance? Ours [Northrop Grumman and Azimuth] were the only companies with any past experience developing this product.”

After the meeting, Belt and Whytsell also talked with a number of Northrup Grumman employees who had been working on-site at the Army.  They reported having seen a key member of the CTIS selection panel seemingly befriending one of the leaders of Azimuth’s competitor company.

“We learned this member of the selection committee had been out drinking with several of the competitor’s employees and was in the process of planning a trip to Thailand with one of them,” says Belt. “It broke all the rules.”

Based on these apparent improprieties, coupled with the competitor’s inexperience, unreasonably low pricing, and false promises, Azimuth felt it had strong grounds for a protest. But disappointed bidders like Azimuth only have a few days to file a protest at the Government Accountability Office (GAO). And protests alleging Procurement Integrity Act violations must be preceded by notice to the procuring authority describing the alleged violations. In addition, because the law presumes that government employees act in good faith, allegations of bias on the part of the government must meet a particularly high standard of proof.

Despite the short timeframes and the high burdens, however, Whytsell worked with Azimuth to gather and marshall the relevant facts and legal arguments – and then timely file both the required notice of PIA violations and the protest with the GAO.

THE RESULTS

After receiving Azimuth’s protest, the GAO was scheduled to hear the case against the Army. But the process never made it that far.

Whytsell says, “It was pretty clear early on that our case was solid. The Army considered the evidence and arguments we presented and pulled the plug. They decided to take corrective action instead of fighting Azimuth.”

The Army cancelled the contract awarded to the competitor company and put the requirement out for bid again, a clear victory for Azimuth.

Belt says that having Whytsell’s advice at hand whenever she needed it was critical to winning the protest.

“Eric and I talked weekends and nights,” she says. “He talked me off the ledge. He was the voice of reason. He is very good at going through the pros and cons of all of your options. If I thought of something in the middle of night and asked him about it the next day, he’d explain his thoughts based on the law or the rules.”

Belt adds, “If Eric thought I had a good idea, he’d say, ‘That’s great!” He just wanted to help us move forward. His ego never got in the way. Throughout the process, it felt like, when we would get bad news and the blows would come, Eric felt them just as hard as we did.  He has a ton of pride in our company and we feel like he is a part of our team.”

For his part, Whytsell says he was looking out for Azimuth in both the near- and long-term. “If the immediate problem calls for aggressive action, we’ll do whatever is necessary. But I always work with clients to understand their perspective with an eye on helping them achieve their broader business goals going forward.”

WhytsellE-web Eric Whytsell

(O): (303) 390-0354
(F): (303) 390-0177
(C): (202) 262-5283
(O2): (202) 973-0227
(E): ewhytsell@jacksonkelly.com

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