Contract analysis

I. Purpose This memorandum memorializes the outcome prediction alternative dispute resolution ("ADR") conference call conducted on Friday, December 8, 2023, by the United States Government Accountability Office ("GAO") in connection with the above-referenced bid protest. The conference was convened pursuant to GAO's established ADR procedures, which provide parties with a preliminary, non-binding assessment of the li

II. Background and Procedural Posture This section sets forth the factual background and procedural posture of the protest as of the date of the ADR conference, to provide context for the GAO attorney's preliminary assessment and the parties' respective positions discussed during the call. Filing and Timeliness. Whitmore Aerospace LLC filed its protest with GAO on September 26, 2023, which was four calendar days afte

III. Summary of GAO's Preliminary Assessment During the ADR conference, Ms. Palermino provided GAO's preliminary, non-binding assessment of the likely outcome of each protest ground. Ms. Palermino emphasized, as is customary in GAO outcome prediction conferences, that the assessment was preliminary and based on the record as currently developed, that it did not constitute a final determination, and that the assigned

IV. Agency's Position Following Ms. Palermino's preliminary assessment, counsel for the Air Force was given the opportunity to respond. Captain Hargrove stated that the Air Force maintains its position that the Source Selection Decision Document adequately documented the SSA's tradeoff rationale. Capt. Hargrove argued that the significant disparity in adjectival ratings under Factor 1 (Technical Approach), where Halc

V. Intervenor's Position Theodore J. Dunaway, speaking on behalf of intervenor Halcyon Defense Systems Inc., stated that Halcyon agrees with the Agency's positions on all grounds of the protest. On Ground 1, Mr. Dunaway argued that the $17.4 million evaluated price differential between Whitmore and Halcyon — which represents approximately 4.82 percent of Whitmore's proposed price — was modest relative to the total co

VI. Whitmore's Position and Response Following the Agency's and the intervenor's statements, the undersigned stated on behalf of Whitmore Aerospace LLC that Whitmore believes the record strongly supports sustaining Grounds 1 and 2 of the protest. The undersigned further stated that Whitmore declines any resolution short of a GAO decision on the merits — that is, Whitmore is not interested in settlement, and there is

VII. Whitmore's Decision: Decline Resolution, Proceed to Decision After receiving the preliminary assessment from Ms. Palermino and hearing the positions of all parties, the undersigned requested a brief off-the-record break to confer with co-counsel. During the break, Calderwood & Harkness's team — Claudia Merritt, Nathan Yardley, and Megan Zhao — conferred and confirmed the recommendation that Whitmore should decli

VIII. Rationale for Recommendation to Proceed Calderwood & Harkness recommended that Whitmore Aerospace LLC decline settlement and proceed to a GAO decision on the merits for the following reasons:

1. Strength of Grounds 1 and 2. GAO's preliminary assessment signals a likely sustain on both of the protester's primary grounds — the unreasonable best-value tradeoff analysis (Ground 1) and the materially unequal discussions (Ground 2). A sustain on these grounds would result in a GAO recommendation for corrective action requiring the Air Force to reevaluate proposals and conduct a new, properly documented best-val

2. Corrective Action Scope. A GAO sustain would result in a recommended corrective action that is likely broader in scope than any voluntary corrective action the Agency might undertake unilaterally. Specifically, a GAO decision sustaining both Grounds 1 and 2 would recommend reevaluation under both Factors 1 and 3 (at minimum) and a new, fully documented tradeoff decision. The Air Force would also be required to reo

3. Protest Cost Recovery. Under 4 C.F.R. § 21.8(d)(1), a sustained protest entitles the protester to reimbursement of the costs of filing and pursuing the protest, including reasonable attorneys' fees. Based on fees incurred through the date of the ADR conference call and projected fees through the completion of the January 4 hearing and any post-hearing briefing, Calderwood & Harkness estimates that Whitmore's total

4. Precedential Positioning. A written GAO decision sustaining the protest on the tradeoff and unequal discussions grounds would create a documented record that significantly strengthens Whitmore's position in several important respects. First, the decision would establish GAO's findings regarding the specific deficiencies in the Air Force's evaluation, which would constrain the scope and direction of any reevaluatio

5. No Credible Settlement Offer. Neither the Agency nor the intervenor proposed any specific corrective action, settlement terms, or other resolution during the ADR conference. The Agency affirmatively declined to offer voluntary corrective action. In the absence of any concrete proposal for resolution, there is nothing for Whitmore to evaluate or accept. Whitmore's only path to a meaningful remedy is through a GAO d

6. Manageable Risk on Ground 3. Even if Ground 3 (the OCI allegation) is denied following the January 4 hearing, a sustain on Grounds 1 and 2 would be independently dispositive and would require comprehensive corrective action. The outcome of the OCI ground, while potentially additive to Whitmore's position, is not necessary for Whitmore to obtain the full relief sought in this protest. The risk that Ground 3 may not

IX. Next Steps The following action items and anticipated events are noted for purposes of matter management and case preparation:

1. Hearing Preparation — Ground 3 (OCI). The firm must prepare for the January 4, 2024 telephonic hearing on Ground 3. Witness preparation for Donald R. Stokes, who will testify on behalf of Whitmore, is being led by Senior Associate Megan Zhao. A separate witness preparation memorandum will follow under separate cover. Mr. Stokes's preparation sessions are tentatively scheduled for December 18 and December 28, 2023.

2. Anticipated Opposing Witnesses. At the January 4 hearing, we anticipate testimony from Greta M. Holloway of Halcyon Defense Systems Inc. and Colonel Diane W. Prescott, USAF (the Contracting Officer for the procurement). Cross-examination outlines for both witnesses should be finalized by December 29, 2023.

3. Pre-Hearing Brief. A pre-hearing brief on Ground 3 must be prepared and filed in advance of the January 4 hearing. The filing deadline for pre-hearing submissions has not yet been set by GAO but is anticipated to be approximately five business days before the hearing date (i.e., on or about December 28, 2023).

4. Monitoring for Voluntary Corrective Action. Although the Agency's posture at the ADR conference strongly suggests that voluntary corrective action is unlikely, we should continue to monitor for any late-stage decision by the Air Force to take corrective action. Under GAO precedent, the agency retains the discretion to take voluntary corrective action at any time prior to the issuance of GAO's decision. If correcti

5. Fee Tracking. We must continue to track fees and costs against the $425,000 voluntary fee cap established in the engagement agreement. As of the date of this memorandum, approximately $268,000 in fees have been billed under engagement number 1019-00003. This leaves approximately $157,000 in remaining fee cap capacity, which should be sufficient to cover the hearing preparation, hearing, and post-hearing briefing t

6. Anticipated Decision Timeline. Based on the current procedural posture, we anticipate that GAO will issue its written decision approximately 30 to 60 days following the January 4, 2024 hearing, consistent with the 100-day statutory decision framework prescribed by 31 U.S.C. § 3554(a)(1). The 100-day statutory clock began running on or about September 27, 2023 (the date of filing), and the clock has been tolled dur

X. Distribution This memorandum is filed internally within Calderwood & Harkness LLP and is designated as attorney work product prepared in anticipation of litigation. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of Calderwood & Harkness attorneys and is protected from disclosure by the work product doctrine. This memorandum is not to be distributed to the client, Donald