1019-00003 · Whitmore Aerospace LLC · Decision and Corrective Action

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PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 1750 K Street NW, Suite 1100 Washington, D.C. 20006

MEMORANDUM

February 1, 2024

TO: Claudia Merritt, Responsible Partner

FROM: Lt. Col. (Ret.) Nathan Yardley, Of Counsel, Government Contracts

RE: Corrective Action Monitoring Strategy — Whitmore Aerospace LLC v. Department of the Air Force, GAO Case No. B-422187; B-422187.2

MATTER/ENGAGEMENT NO.: 1019-00003

CLIENT: Whitmore Aerospace LLC

CONFIDENTIALITY NOTICE: This memorandum is protected by attorney-client privilege and the work product doctrine. It is intended solely for internal use by the engagement team and should not be shared with any party outside the firm without prior authorization. This document contains mental impressions, conclusions, opinions, and legal theories of attorneys and is prepared in anticipation of litigation and in furtherance of the provision of legal advice to the client.

I. PURPOSE AND EXECUTIVE SUMMARY

The purpose of this memorandum is to outline the firm's strategy for monitoring the U.S. Department of the Air Force's implementation of the corrective action recommended by the Government Accountability Office ("GAO") in its January 29, 2024, decision sustaining the bid protest of our client, Whitmore Aerospace LLC ("Whitmore"), on Grounds 1 and 2. The decision was authored by Kenneth R. Woodley, Managing Associate General Counsel, Procurement Law, and issued under the case caption Whitmore Aerospace LLC, B-422187; B-422187.2 (Comp. Gen. Jan. 29, 2024).

The underlying protest challenged the Air Force's award of Contract No. FA8222-23-D-0193 — an indefinite-delivery/indefinite-quantity ("IDIQ") contract with a ceiling value of $387.5 million for advanced infrared countermeasure ("IRCM") pod assemblies — to Halcyon Defense Systems Inc. ("Halcyon") under Solicitation No. FA8222-23-R-0087. The solicitation was issued by the Air Force Life Cycle Management Center ("AFLCMC"), Sensors Directorate, located at Wright-Patterson Air Force Base, Ohio.

GAO sustained the protest on two of the four grounds raised by Whitmore:

• Ground 1 (Unreasonable Best-Value Tradeoff): The Source Selection Decision Document ("SSDD") prepared by the Source Selection Authority ("SSA"), Brigadier General Harlan T. Jeffcoat, failed to provide substantive rationale for paying a $17.4 million price premium (4.82% above Whitmore's lower-priced proposal) to select Halcyon's higher-priced proposal. The SSDD merely restated adjectival ratings without articulating with particularity what specific technical advantages or discriminators in Halcyon's proposal warranted the significant price premium, in violation of FAR 15.308 and applicable case law.

• Ground 2 (Materially Unequal Discussions): The Contracting Officer, Colonel Diane W. Prescott, conducted materially unequal discussions during the competitive range phase. Specifically, the Air Force issued multiple Evaluation Notices ("ENs") to Whitmore raising concerns about its Supply Chain Risk Management approach, but failed to issue any ENs to Halcyon regarding the Source Selection Evaluation Board's ("SSEB's") documented "significant concern" about Halcyon's sole-source reliance on Meridian Semiconductor GmbH, a German firm, for gallium arsenide ("GaAs") sensor wafers — a critical component of the IRCM pod assembly. This constituted a failure to conduct meaningful discussions with Halcyon on a matter that the SSEB itself identified as a significant concern, in violation of FAR 15.306(d)(3).

GAO denied Ground 3 (organizational conflict of interest arising from Halcyon Analytical Services LLC's participation in the Analysis of Alternatives study) and did not reach Ground 4 (labor rate realism analysis).

The corrective action recommended by GAO consists of four elements: (1) reevaluation of proposals under Factors 1 and 3; (2) conduct of a new best-value tradeoff with documented rationale; (3) if Whitmore is selected following the reevaluation, termination of Halcyon's existing contract for the convenience of the government; and (4) reimbursement of Whitmore's protest costs, including reasonable attorneys' fees. GAO recommended that the corrective action be completed within 60 calendar days, establishing a deadline of March 29, 2024.

As of the date of this memorandum, the Air Force Contracting Officer, Colonel Diane W. Prescott, has not yet formally notified GAO of the agency's intent to implement the corrective action. However, based on standard GAO practice and established precedent, we anticipate that this notification will be transmitted imminently — likely no later than February 5, 2024, and in all probability confirming the Air Force's intent to implement the corrective action in full. In our experience, agencies very rarely decline to implement GAO sustained recommendations, given the reporting obligations to Congress under 31 U.S.C. § 3554(e)(1).

This memorandum identifies the key milestones and deadlines governing the corrective action period, analyzes the scope of the reevaluation required, assesses potential risks and contingencies that may arise during the corrective action process, outlines a communication strategy for interactions with agency counsel and the client, and sets forth specific action items and assignments for the engagement team. It is intended to serve as the primary reference document for the monitoring effort through the expiration of the 60-day corrective action window and any subsequent proceedings that may be required.

II. GAO CORRECTIVE ACTION RECOMMENDATIONS — SUMMARY

The GAO decision sets forth four specific recommendations that together constitute the corrective action the agency is expected to implement. Each recommendation is discussed in detail below, along with the strategic implications for our monitoring effort.

A. Recommendation 1: Reevaluation of Proposals Under Factors 1 and 3

GAO recommended that the Air Force reevaluate the proposals submitted by both Whitmore and Halcyon under Factor 1 (Technical Approach) and Factor 3 (Management Approach). These are the two non-price evaluation factors most directly affected by the errors identified in the decision.

Factor 1: Technical Approach is the most important evaluation factor under the solicitation's stated evaluation scheme. It comprises three subfactors:

• Subfactor 1(a): System Design & Integration — evaluating the offeror's proposed design for the IRCM pod assembly, including sensor integration, software architecture, and compatibility with existing aircraft platforms.

• Subfactor 1(b): Manufacturing Readiness — evaluating the offeror's ability to transition from development to full-rate production, including manufacturing processes, tooling, quality assurance, and production capacity.

• Subfactor 1(c): Test & Evaluation Plan — evaluating the offeror's proposed developmental and operational test and evaluation approach, including test milestones, facilities, and methodology.

Factor 3: Management Approach is rated "Important" under the solicitation's evaluation scheme and comprises three subfactors:

• Subfactor 3(a): Program Management — evaluating the offeror's proposed program management structure, key personnel, and project execution methodology.

• Subfactor 3(b): Supply Chain Risk Management — evaluating the offeror's approach to identifying, assessing, and mitigating supply chain risks, including single-source dependencies, foreign supplier risks, and counterfeit part prevention.

• Subfactor 3(c): ITAR/Export Compliance — evaluating the offeror's compliance framework for International Traffic in Arms Regulations and export control requirements.

For reference, the original adjectival ratings assigned by the SSEB to each offeror are summarized below:

GAO's decision makes clear that the reevaluation must address, at minimum, the Manufacturing Readiness subfactor under Factor 1(b) and the Supply Chain Risk Management subfactor under Factor 3(b), as these are the areas most directly affected by the errors identified on Grounds 1 and 2, respectively. With respect to Ground 2, the unequal discussions finding directly implicates Factor 3(b): the SSEB documented "significant concern" regarding Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers but never raised this concern with Halcyon during discussions, while simultaneously issuing ENs to Whitmore on supply chain matters. This deficiency cannot be cured through reevaluation alone; it requires either the reopening of discussions or a fundamental reassessment of Halcyon's subfactor rating.

Factor 2 (Past Performance) and Factor 4 (Price/Cost) were not specifically ordered to be reevaluated. Both offerors received ratings of "Substantial Confidence" under Factor 2. Under Factor 4, Whitmore's evaluated price was $343.8 million and Halcyon's evaluated price was $361.2 million — a difference of $17.4 million representing a 4.82% premium over Whitmore's lower-priced proposal. While these factors are not subject to formal reevaluation, they will necessarily feed into the new best-value tradeoff analysis required by Recommendation 2.

B. Recommendation 2: New Best-Value Tradeoff with Documented Rationale

GAO recommended that the SSA, Brigadier General Harlan T. Jeffcoat, prepare a new Source Selection Decision Document that identifies specific technical discriminators or benefits justifying any price premium paid, consistent with the requirements of FAR 15.308 and the solicitation's stated evaluation criteria. The GAO decision was emphatic that the new SSDD must not merely restate adjectival ratings or offer conclusory assertions that the higher-rated proposal is "worth the premium." Rather, the SSA must articulate with particularity the specific advantages, innovations, risk mitigations, or other benefits identified in the higher-priced proposal that, in the reasoned judgment of the SSA, justify the additional cost to the government.

This recommendation flows directly from the Ground 1 sustain, in which GAO found that the original SSDD was legally deficient because it failed to engage in any meaningful comparative analysis of the proposals' substantive content. The SSDD stated, in its entirety regarding the tradeoff, that Halcyon's "Outstanding rating under the most important evaluation factor (Technical Approach) represents a significant advantage over Whitmore's Good rating and warrants the modest price premium." GAO found this rationale to be conclusory and insufficient, noting that a mere recitation of adjectival ratings does not satisfy the SSA's obligation to conduct a qualitative assessment of what the government is getting in return for paying a higher price. See, e.g., Ashbury Partners LLC, B-404998, 2011 CPD ¶ 232; Westvale Partners LLC, B-411465, 2015 CPD ¶ 198.

The requirement for a new SSDD is critically important to Whitmore's competitive position. Whitmore's $17.4 million price advantage is substantial and represents significant value to the government. If the SSA is required to identify specific, substantive reasons — beyond adjectival labels — for paying an additional $17.4 million, the analysis may well favor Whitmore, particularly given that both offerors received identical ratings on the System Design & Integration subfactor (Outstanding) and the Test & Evaluation Plan subfactor (Good), leaving Manufacturing Readiness as the primary differentiator under Factor 1.

C. Recommendation 3: Potential Termination for Convenience

GAO recommended that if the reevaluation results in the selection of Whitmore, the Air Force must terminate Halcyon's existing contract (FA8222-23-D-0193) for the convenience of the government. This is a significant operational and programmatic consideration for the Air Force. Contract No. FA8222-23-D-0193 is a $387.5 million ceiling IDIQ contract supporting critical warfighter capabilities — advanced IRCM pod assemblies designed to protect tactical aircraft from infrared-guided missile threats. Termination for convenience of a contract of this magnitude and operational significance is not a step the Air Force will take lightly, and this consideration may factor into the agency's deliberations regarding the corrective action timeline and, potentially, the ultimate source selection outcome.

We should be attentive to the possibility that the significance of this termination may create institutional pressure within the Air Force to reach the same selection decision (i.e., selecting Halcyon again), this time with more robust documentation. While such an outcome is not inherently unlawful — an agency may reach the same result on reevaluation if the decision is adequately documented and supported — it must be the product of a genuine, good-faith reevaluation, not a predetermined outcome with post hoc rationalization.

D. Recommendation 4: Reimbursement of Protest Costs

GAO recommended that the Air Force reimburse Whitmore's protest costs, including reasonable attorneys' fees, pursuant to 31 U.S.C. § 3554(c)(1)(A) and 4 C.F.R. § 21.8(d). This recommendation is standard in sustained decisions where the protester prevailed on the merits.

The firm is preparing a certified protest cost claim in the amount of $365,959.72, consisting of $347,216.50 in attorneys' fees and $18,743.22 in costs (including filing fees, photocopying, travel, and expert consulting fees). This claim is being finalized for submission on February 7, 2024, in accordance with the 60-day deadline for cost claim submission following a sustained decision. The claim will be submitted to the Contracting Officer, Colonel Prescott, with a copy to agency counsel.

Separate tracking of the cost claim submission and any negotiations regarding the claim amount is being handled as a distinct workstream under the supervision of Claudia Merritt and associate Sara Hendricks. This memorandum focuses on the corrective action monitoring aspects of the engagement; however, coordination between the two workstreams is necessary because the cost claim arises from the same GAO recommendation and will be submitted to the same Contracting Officer managing the corrective action.

III. KEY DEADLINES AND MILESTONES

A. 60-Day Corrective Action Deadline

GAO's decision recommended that the corrective action be completed within 60 calendar days from the date of the decision. The decision was issued on January 29, 2024. Accordingly, the calculated deadline for completion of the corrective action is March 29, 2024.

It is important to note that "completion" of corrective action, as interpreted in GAO precedent, means the issuance of a new source selection decision and notification to offerors — not merely the commencement of reevaluation activities. The agency must have completed the entire corrective action process, including reconvening the SSEB, conducting the reevaluation, reopening discussions (if applicable), soliciting and evaluating revised FPRs (if applicable), preparing the new SSDD, and making a new award decision by this date. See Pemberton Enterprises, B-400771.8, 2010 CPD ¶ 52 (GAO noting that agencies are expected to complete, not merely commence, corrective action within the recommended timeframe).

While the 60-day recommendation is not a hard statutory deadline — GAO cannot compel agency compliance with its recommendations — failure to meet the deadline may be reported by GAO to Congress under 31 U.S.C. § 3554(e)(1), and may provide a basis for Whitmore to file a new protest or take other action if the delay is prejudicial.

B. Anticipated Agency Timeline

Based on our experience with corrective action proceedings at AFLCMC and the Sensors Directorate specifically, and based on the scope of the reevaluation required, we anticipate the following general sequence of agency actions:

1. Formal Notification of Intent to Comply: The Contracting Officer, Colonel Prescott, will transmit a letter to GAO confirming the Air Force's intent to implement the recommended corrective action. This notification is expected no later than the first week of February 2024. Per standard GAO practice, the Contracting Officer typically notifies GAO within 5 to 10 business days of the decision date. We anticipate this notification will be issued by approximately February 5, 2024.

2. Corrective Action Determination Memorandum: Colonel Prescott will issue an internal Corrective Action Determination memorandum directing the reconvening of the SSEB and establishing the procedures and scope of the reevaluation. This memorandum will set the framework for the balance of the corrective action process. We anticipate this will be issued within the first two weeks of February.

3. Reconvening of the SSEB: The Source Selection Evaluation Board, chaired by Dr. Yolanda R. Fenn, will be reconvened to conduct the reevaluation of proposals under Factors 1 and 3. This step requires reassembling the evaluation team, scheduling board sessions, and reviewing the existing evaluation record in conjunction with the GAO decision.

4. Reopening of Discussions (If Applicable): If the agency determines — as it should — that discussions must be reopened to cure the unequal discussions deficiency identified on Ground 2, the Contracting Officer will notify both Whitmore and Halcyon that discussions are being reopened. New Evaluation Notices will be prepared and transmitted. This step is critical and may add two to three weeks to the timeline.

5. Revised Final Proposal Revisions (If Applicable): If discussions are reopened, both offerors may be given the opportunity to submit revised FPRs addressing the areas discussed. This step would require a response period (typically 10 to 14 calendar days) and subsequent evaluation by the SSEB.

6. New SSDD Preparation and SSA Decision: Following the reevaluation, the SSEB will prepare an updated Comparative Analysis Report, and the SSA, Brigadier General Jeffcoat, will prepare a new SSDD in accordance with FAR 15.308 and the GAO's recommendation.

7. Formal Notification to Offerors: The Contracting Officer will notify both offerors of the new award decision and offer debriefings in accordance with FAR 15.506.

C. Milestone Tracking Table

The following table will be used to track key milestones throughout the corrective action period. The "Estimated Date" column reflects our current best estimates based on the anticipated timeline discussed above. The "Actual Date" and "Status" columns will be updated as events occur.

This table should be maintained as a living document and updated at least weekly by the engagement team. Nathan Yardley will serve as the primary point of contact for milestone tracking.

IV. SCOPE OF REEVALUATION — STRATEGIC CONSIDERATIONS

The scope of the Air Force's reevaluation is the single most consequential issue in the corrective action monitoring effort. The GAO decision provides a floor — the minimum scope of corrective action that the agency must undertake — but the agency retains discretion to broaden the scope if it determines that a more comprehensive reevaluation is warranted. Our strategic interest lies in ensuring that the scope of the corrective action is sufficiently broad to cure both errors identified by GAO and to provide Whitmore a meaningful opportunity to compete on a level playing field.

A. Minimum Scope Required by GAO Decision

As discussed in Section II.A above, the reevaluation must encompass, at minimum, Factor 1 (Technical Approach) and Factor 3 (Management Approach). The GAO decision identifies two specific areas of concern within these factors that the agency must address:

First, with respect to Ground 1 (unreasonable best-value tradeoff), the reevaluation must focus on Factor 1(b) (Manufacturing Readiness), which represents the primary rating differential between Whitmore (Acceptable) and Halcyon (Outstanding) under the most important evaluation factor. The new SSDD must articulate why, if applicable, Halcyon's "Outstanding" rating under this subfactor warrants a $17.4 million premium over Whitmore's "Acceptable" rating. The SSA must identify the specific technical advantages, risk mitigations, or other benefits in Halcyon's Manufacturing Readiness approach that justify the additional cost. Conclusory assertions that "Outstanding is better than Acceptable" will not suffice.

Second, with respect to Ground 2 (unequal discussions), the reevaluation must address Factor 3(b) (Supply Chain Risk Management) and the agency's failure to raise with Halcyon the SSEB's documented "significant concern" regarding Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers. This concern was discussed at length in the SSEB's internal deliberations and is reflected in the Comparative Analysis Report, yet the Contracting Officer never issued an Evaluation Notice to Halcyon on this topic — while simultaneously issuing ENs to Whitmore on supply chain matters. To cure this deficiency, the agency must either: (a) reopen discussions and issue one or more ENs to Halcyon specifically addressing the Meridian Semiconductor sole-source dependency; or (b) reassess Halcyon's Factor 3(b) rating in light of the concerns that were documented but never raised.

Option (a) is the more appropriate course of action and the one we will advocate for. Option (b) alone may be insufficient because the purpose of discussions is to give the offeror an opportunity to address the agency's concerns and revise its proposal accordingly. If the agency simply downgrades Halcyon's rating without giving Halcyon the opportunity to address the concern, Halcyon would have a strong basis for a counter-protest. Conversely, if the agency reopens discussions and Halcyon provides a satisfactory response to the Meridian Semiconductor concern, the agency's ratings may be adjusted upward — but this is a risk Whitmore should be willing to accept in exchange for a level playing field on which Whitmore's own strengths can be fairly evaluated.

The new best-value tradeoff must integrate all four evaluation factors — Technical Approach, Past Performance, Management Approach, and Price — even if Factors 2 and 4 are not formally reevaluated. The ratings and evaluated prices from Factors 2 and 4 will carry forward into the tradeoff analysis and must be considered alongside the revised ratings under Factors 1 and 3.

B. Risk That Agency Narrows Scope Improperly

One of the most significant risks we face during the corrective action period is that the Air Force attempts to limit the reevaluation to a narrow "paper exercise" — essentially rewriting the SSDD to backfill rationale for the same outcome without meaningfully reevaluating proposals under Factors 1 and 3 and without reopening discussions to cure the unequal discussions deficiency.

This risk is not hypothetical. In our experience, agencies sometimes respond to GAO sustain decisions by taking the minimum possible corrective action — particularly where the existing awardee has already begun performance and the agency has institutional reasons to prefer maintaining the status quo. The Air Force may view the Ground 1 sustain as requiring only that the SSA write a more detailed SSDD, while treating the Ground 2 sustain as capable of being addressed by merely reevaluating Halcyon's Factor 3(b) rating without reopening discussions.

Such an approach would be legally deficient and would not comply with the GAO recommendation. A narrowly scoped corrective action that fails to reopen discussions cannot cure the unequal discussions finding. The violation identified on Ground 2 was not a flaw in the evaluation ratings themselves; it was a flaw in the competitive process — the failure to give Halcyon an opportunity to address a documented agency concern during discussions, while simultaneously raising similar concerns with Whitmore. The remedy for a process-based violation is to correct the process, not to adjust the output ratings while leaving the flawed process intact.

If the agency takes corrective action that is inadequate in scope, Whitmore would have standing and strong grounds to file a new protest at GAO challenging the corrective action itself. See DLT Sols., Inc., B-411901.2, 2016 CPD ¶ 43 (sustaining protest challenging inadequate corrective action where agency failed to meaningfully address GAO's prior recommendation); Hollowell Life Insurance Gov't Servs., LLC, B-401068.4, 2010 CPD ¶ 10 (similar).

C. Whitmore's Position on Scope

Our position, which we will communicate to agency counsel in a formal letter, is that the corrective action must include the following elements to comply with the GAO recommendation:

1. Reopening of discussions with both Whitmore and Halcyon on Factors 1 and 3, not limited to specific subfactors but encompassing the full scope of both factors;

2. Issuance of Evaluation Notices to Halcyon regarding Supply Chain Risk Management (Factor 3(b)), specifically addressing the SSEB's documented "significant concern" about Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers;

3. An opportunity for both offerors to submit revised Final Proposal Revisions following the close of discussions, reflecting any modifications or enhancements to their proposals responsive to the Evaluation Notices; and

4. A new, fully documented best-value tradeoff conducted by the SSA in accordance with FAR 15.308, integrating the reevaluated ratings under Factors 1 and 3 with the existing ratings under Factors 2 and 4, and articulating with particularity any rationale for paying a price premium if the SSA again selects the higher-priced proposal.

A letter to Captain Lucas M. Hargrove, agency counsel, articulating this position is currently being prepared. The target date for transmission of this letter is the week of February 5–9, 2024, with a firm deadline of February 10, 2024. The letter will be signed by Claudia Merritt as Responsible Partner and will be submitted on Calderwood & Harkness letterhead.

We recognize that our position on the scope of corrective action is advisory in nature — the agency retains discretion to determine the scope and methodology of its reevaluation, provided it complies with the GAO recommendation. However, communicating our position clearly and on the record serves two purposes: it puts the agency on notice of our expectations, and it preserves the record in the event a subsequent protest challenging the corrective action becomes necessary.

V. POTENTIAL RISKS AND CONTINGENCIES

The corrective action period presents several risks that must be monitored and, to the extent possible, mitigated. Each risk is discussed below along with its probability, potential impact, and recommended mitigation measures.

A. Risk 1: Agency Non-Compliance or Delayed Compliance

Description: The Air Force fails to complete the corrective action within the 60-day deadline (by March 29, 2024), or implements corrective action that does not conform to GAO's recommendation in substance or scope.

Probability: Low to moderate. Agencies generally comply with GAO recommendations, and the 60-day timeline, while ambitious given the scope of the reevaluation, is achievable. However, delays are possible due to the complexity of reconvening the SSEB, the potential need to reopen discussions and solicit revised FPRs, and competing priorities within AFLCMC and the Sensors Directorate.

Impact: High. Delayed compliance prolongs uncertainty for Whitmore and may allow the Air Force to issue task orders under the existing Halcyon contract, further entrenching Halcyon's position as incumbent. Non-compliance in substance — e.g., a paper exercise that does not genuinely cure the identified errors — would require Whitmore to file a new protest, adding months to the procurement timeline.

Mitigation:

• Monitor the timeline through periodic inquiries to agency counsel (Captain Hargrove and Ms. Castellano).

• Send an initial inquiry letter to Captain Hargrove by February 15, 2024, requesting confirmation of the corrective action timeline and a general description of the process the agency intends to follow.

• If the agency fails to implement the corrective action by March 29, 2024, or implements corrective action that is substantively inadequate, Whitmore may file a new protest at GAO or seek relief at the U.S. Court of Federal Claims ("COFC").

• GAO reports non-compliance to Congress under 31 U.S.C. § 3554(e)(1), but this is a soft enforcement mechanism with no direct legal consequence. The primary enforcement vehicle available to Whitmore is a new protest or COFC action.

Action Item: Nathan Yardley to send initial inquiry letter to Captain Hargrove by February 15, 2024, requesting confirmation of corrective action timeline and process.

B. Risk 2: Halcyon Challenge at the U.S. Court of Federal Claims (COFC)

Description: Halcyon Defense Systems Inc. may file a post-award bid protest at the COFC challenging the GAO decision itself, the Air Force's implementation of the corrective action, or the termination of Halcyon's contract. Halcyon's counsel of record is Kessler, Pratt & Dunaway LLP ("KPD"), with lead partner Ted Dunaway and associate Rachel Sorensen. KPD is an experienced government contracts litigation firm with a well-established COFC practice.

Probability: Moderate. The GAO decision represents a significant adverse outcome for Halcyon, which holds an awarded contract valued at up to $387.5 million. The financial stakes are substantial, and Halcyon has retained sophisticated counsel. While GAO decisions are not directly appealable to the COFC, a disappointed party may file a new bid protest at the COFC challenging the same procurement on the same or different grounds. COFC proceedings under the Tucker Act, 28 U.S.C. § 1491(b), are de novo — the COFC does not defer to or review GAO decisions but conducts its own independent analysis of the protest grounds.

Potential Grounds: Halcyon may argue that: (a) the Air Force's corrective action improperly disrupts its awarded contract without adequate basis; (b) the GAO decision was factually or legally erroneous (although the COFC would not "review" the GAO decision per se, Halcyon could raise the same underlying procurement issues); or (c) the corrective action process itself is being conducted in a manner prejudicial to Halcyon's interests.

Potential Timeline: To seek meaningful injunctive relief, Halcyon would need to file promptly — typically within 10 to 14 days of the Corrective Action Determination memorandum or the notification of a new award decision adverse to Halcyon. If Halcyon seeks a temporary restraining order ("TRO") to prevent termination of its contract, it would need to demonstrate irreparable harm, likelihood of success on the merits, balance of hardships, and public interest under the traditional four-factor test.

Mitigation:

• Monitor the COFC docket (Court of Federal Claims PACER system) on a regular basis for any filing by Halcyon or KPD. Megan Zhao is assigned to conduct weekly docket checks.

• If Halcyon files at the COFC, Whitmore would likely need to intervene as an interested party under RCFC 24(a) to protect its interests. Intervention is typically granted as of right in bid protest cases where the intervenor has a direct economic interest in the outcome.

• Assess whether Calderwood & Harkness has sufficient COFC litigation capability in-house or whether co-counsel with specialized COFC trial experience would be needed. Ian Blackwood in the firm's litigation group should be consulted on this question. If co-counsel is required, potential candidates should be identified proactively.

• Prepare a preliminary assessment of the strength of any potential Halcyon COFC challenge, focusing on the likelihood that the COFC would reach a different conclusion than GAO on Grounds 1 and 2.

Action Item: Megan Zhao to begin weekly COFC docket monitoring immediately. Claudia Merritt and Ian Blackwood to assess COFC litigation readiness on a contingent basis.

C. Risk 3: Agency Override of CICA Stay or Award During Corrective Action

Description: Although the Competition in Contracting Act ("CICA") automatic stay under 31 U.S.C. § 3553(c)(1) attached upon the filing of the protest and was in effect during the pendency of the GAO proceeding, the corrective action phase operates under a different legal framework. There is no statutory stay during the corrective action period. The GAO decision does not impose a legal prohibition on the Air Force's continued use of the Halcyon contract. Accordingly, the Air Force could theoretically continue to issue task orders under Contract No. FA8222-23-D-0193 while the reevaluation is underway.

Probability: Moderate. The IRCM pod assembly program supports critical warfighter requirements, and the Air Force may face operational pressure to continue procurement activities during the reevaluation period. If significant task orders are issued under the Halcyon contract during the corrective action period, this could further entrench Halcyon as the incumbent and create switching costs that make termination for convenience more costly and less likely.

Impact: Moderate to high. Issuance of task orders during the corrective action period could prejudice Whitmore's competitive position and undermine the purpose of the corrective action. It could also create practical obstacles to termination for convenience if Whitmore is ultimately selected.

Mitigation:

• Inquire of agency counsel whether the Air Force intends to issue any task orders under FA8222-23-D-0193 during the corrective action period. This inquiry should be included in the initial letter to Captain Hargrove.

• If the agency issues task orders before completing the reevaluation, Whitmore may have grounds for a new protest arguing that such actions prejudice the corrective action process and undermine the purpose of the GAO recommendation. See SYTEC, Inc., B-289448.3, 2003 CPD ¶ 73 (finding that agency's continued performance of work under protested contract during corrective action period was inconsistent with the purpose of the corrective action).

• Document any task orders or contract modifications issued during the corrective action period for use in any subsequent protest or COFC proceeding.

D. Risk 4: Changed Requirements or New Solicitation

Description: The Air Force could elect to cancel Solicitation No. FA8222-23-R-0087 entirely and issue a new solicitation rather than complete the reevaluation of existing proposals. While this is within the agency's discretion — agencies generally have broad authority to cancel solicitations, even after award, provided there is a reasonable basis — it could significantly delay the procurement and would require Whitmore to prepare and submit an entirely new proposal.

Probability: Low. Cancellation and reissuance of a solicitation of this magnitude is a drastic step that would delay the IRCM pod assembly program by many months, if not years. The Air Force has operational urgency to field IRCM capabilities, and cancellation would be contrary to the agency's programmatic interests. However, the possibility cannot be ruled out entirely, particularly if the agency encounters complications during the reevaluation process or if requirements have changed since the original solicitation was issued.

Impact: High. A new solicitation would reset the competitive clock, require substantial proposal preparation effort and expense by Whitmore, and potentially open the competition to additional offerors.

Mitigation:

• Monitor for any cancellation notice or amendment to the solicitation through FedBizOpps/SAM.gov and through communications with agency counsel.

• Advise Whitmore to begin refreshing its proposal materials proactively, ensuring that manufacturing readiness data, past performance references, and supply chain documentation are current. This is prudent regardless of whether a new solicitation is issued, as updated materials may also be useful if revised FPRs are requested as part of the corrective action.

• Specifically, Whitmore should verify that the information regarding its critical subcontractor, Pinnacle Precision Manufacturing Inc. (6220 Industrial Parkway, Beavercreek, OH 45431), is current — including facility security clearance status (Secret clearance, held since 2014), manufacturing capacity data, and workforce availability.

E. Risk 5: Personnel Changes Affecting Reevaluation

Description: There is a risk that key agency personnel involved in the original evaluation and source selection may rotate out, be reassigned, or retire before the reevaluation is complete. Key personnel include the SSA (Brigadier General Harlan T. Jeffcoat), the SSEB Chair (Dr. Yolanda R. Fenn), the Contracting Officer (Colonel Diane W. Prescott), and the Contract Specialist (Vincent Talmadge). Military personnel, in particular, are subject to reassignment on relatively short notice, and BGen Jeffcoat's assignment at AFLCMC may be time-limited.

Probability: Low to moderate over the 60-day corrective action window, but non-trivial given the pace of military reassignments.

Impact: Variable. Personnel changes could affect continuity and institutional knowledge, potentially slowing the reevaluation process. On the other hand, new evaluators may bring fresh perspective and may be less invested in defending the original evaluation outcome, which could work to Whitmore's advantage.

Mitigation:

• Our ability to influence agency staffing decisions is limited. We can monitor for personnel changes through communications with agency counsel and through publicly available information (e.g., change of command announcements, assignment orders).

• If a new SSA is designated, Whitmore may benefit because the new SSA would not be in the position of reviewing and potentially reversing his or her own prior decision.

• If the SSEB composition changes significantly, the quality and consistency of the reevaluation may be affected, and this should be monitored for any irregularities.

VI. COMMUNICATION STRATEGY

Effective communication management is essential during the corrective action period. This section outlines the protocols for communications with agency counsel, the client, and intervenor's counsel.

A. Communications with Agency Counsel

All communications with the Air Force regarding the corrective action must be directed through agency counsel. The designated agency counsel for this matter are:

• Captain Lucas M. Hargrove, USAF, JAG — Trial attorney, Air Force Legal Operations Agency, assigned to AFLCMC, Sensors Directorate, Wright-Patterson AFB, OH 45433.

• Miriam T. Castellano — Senior attorney, Office of the General Counsel, SAF/GCQ, AFLCMC, Sensors Directorate, Wright-Patterson AFB, OH 45433.

No direct contact between Whitmore personnel — including Donald R. Stokes (VP, Government Contracts) or Marcus J. Whitmore (CEO) — and the Contracting Officer, the SSA, or any SSEB members is permitted regarding the reevaluation. Any such contact could be perceived as improper ex parte communication during the source selection process and could jeopardize Whitmore's competitive position. This prohibition should be communicated clearly and in writing to all Whitmore personnel who may have occasion to interact with Air Force personnel in other contexts, including through industry conferences, professional associations, or existing business relationships.

The following formal correspondence is planned during the corrective action period:

1. Letter to Captain Hargrove regarding scope of corrective action — This letter will articulate Whitmore's position on the minimum scope of the reevaluation necessary to comply with the GAO recommendation, as discussed in Section IV.C above. Target date: February 10, 2024. The letter will be prepared jointly by Claudia Merritt and Nathan Yardley and will be transmitted via email with hard copy follow-up.

2. Follow-up inquiry on timeline — A follow-up letter or email to Captain Hargrove requesting a status update on the corrective action timeline, including confirmation that the SSEB has been reconvened and a general indication of whether discussions will be reopened. Target date: Late February / early March 2024, adjusted as necessary based on the agency's progress.

Additional correspondence may be necessary depending on developments during the corrective action period, including responses to agency communications, requests for information, or notifications regarding the reopening of discussions.

B. Communications with Client

Regular status updates will be provided to the primary client contacts at Whitmore Aerospace LLC, 2400 Dominion Ridge Parkway, Suite 800, Herndon, VA 20171:

• Donald R. Stokes — Vice President, Government Contracts

• Marcus J. Whitmore — Chief Executive Officer

Status updates should be provided at least biweekly during the corrective action period, with immediate notification of any significant developments (e.g., receipt of agency notification, reopening of discussions, new award decision). Updates should be provided by telephone or video conference, followed by a brief written summary for the file.

In addition to routine status updates, the following specific advisories should be communicated to Whitmore at the earliest opportunity:

1. Maintain Proposal Team Readiness. Whitmore should maintain its proposal team in a state of readiness to respond promptly in the event discussions are reopened and revised FPRs are requested. This includes retaining the services of Janet K. Overmeyer at Ridgeline Consulting Group LLC (4501 Fairfax Drive, Suite 200, Arlington, VA 22203), who served as the lead proposal consultant during the original proposal preparation and competitive range phase. Ms. Overmeyer's familiarity with the solicitation requirements, evaluation criteria, and Whitmore's proposal is invaluable and would be difficult to replicate with a new consultant on short notice.

2. Update ITAR Compliance Documentation. Whitmore should ensure that all ITAR compliance documentation, including the materials submitted under CDRL A015, is current and updated. Whitmore received an "Outstanding" rating on Factor 3(c) (ITAR/Export Compliance) — a significant competitive advantage — and maintaining the currency of its compliance documentation is essential to preserving this advantage during the reevaluation. Any changes to Whitmore's ITAR registration, export licenses, technology control plans, or empowered official designations since the original proposal submission should be documented and ready for inclusion in any revised FPR.

3. Verify Subcontractor Information. Whitmore should verify that the information regarding its critical subcontractor, Pinnacle Precision Manufacturing Inc. (6220 Industrial Parkway, Beavercreek, OH 45431), is current and accurate. Specifically:

• Pinnacle's facility security clearance (Secret level, continuously maintained since 2014) should be confirmed as current through the Defense Counterintelligence and Security Agency ("DCSA") database.

• Manufacturing capacity data, including production line status, workforce levels, and equipment certifications, should be updated to reflect current conditions.

• Any changes to Pinnacle's ownership, management, or financial condition should be assessed for potential impact on Whitmore's proposal.

4. Refresh Pricing Data. Whitmore's CFO, Patricia "Trish" Langford, should be engaged to ensure that pricing data is current in the event cost/price proposals need to be refreshed as part of the corrective action process. While Factor 4 (Price) is not subject to formal reevaluation, the agency may request updated pricing if discussions are reopened and revised FPRs are solicited. Additionally, changes in material costs, labor rates, or subcontractor pricing since the original proposal submission should be assessed for their impact on Whitmore's competitive position.

C. Communications with Intervenor's Counsel

No affirmative communication with Kessler, Pratt & Dunaway LLP — whether with Ted Dunaway, Rachel Sorensen, or any other attorney at the firm — is contemplated at this time. We do not anticipate any need for direct communication with Halcyon's counsel unless and until one of the following events occurs:

• A COFC action is filed by Halcyon, necessitating coordination on scheduling, briefing, or other procedural matters;

• Protective order compliance issues arise requiring communication between counsel; or

• The agency directs counsel to participate in some aspect of the corrective action process that requires inter-party coordination.

It should be noted that the GAO Protective Order issued in B-422187; B-422187.2 remains in effect with respect to all protected materials produced during the protest. All documents designated as protected under the protective order — including proprietary proposal excerpts, source selection evaluation materials, and other competition-sensitive information — must continue to be handled in strict accordance with the terms of the protective order and the firm's internal protective order compliance procedures. Specifically, access to protected materials remains limited to counsel admitted under the protective order (Claudia Merritt, Nathan Yardley, and Sara Hendricks), and no protected materials may be shared with client personnel or any other person not admitted under the order.

VII. PROTEST COST CLAIM — COORDINATION

As noted above, the firm is preparing the certified protest cost claim for submission on February 7, 2024. This section addresses the coordination between the cost claim workstream and the corrective action monitoring effort.

The total claim amount is $365,959.72, consisting of:

• Attorneys' fees: $347,216.50

• Costs (filing fees, photocopying, travel, expert consulting fees): $18,743.22

The total attorneys' fee component of $347,216.50 is well within the $425,000 voluntary fee cap established in the engagement letter dated September 18, 2023, as amended on November 2, 2023. The claim will be submitted to the Contracting Officer (Colonel Prescott) in accordance with GAO's recommendation and the procedures set forth in 4 C.F.R. § 21.8(f). A copy of the claim will be transmitted simultaneously to agency counsel (Captain Hargrove).

The cost claim is a separate workstream that is being managed by Claudia Merritt and associate Sara Hendricks. However, coordination between the cost claim and the corrective action monitoring effort is necessary for several reasons:

• Both the cost claim and the corrective action are elements of the same GAO recommendation, and both are directed to the same Contracting Officer (Colonel Prescott).

• The agency's handling of the cost claim may provide insight into the agency's overall posture regarding the GAO decision — prompt and cooperative handling may indicate good faith compliance, while delays or disputes may signal resistance.

• If the Air Force disputes the claim amount, further proceedings may be necessary. Protest cost claims are typically handled administratively, but if the parties cannot reach agreement, Whitmore may need to pursue the claim through other channels, potentially including a claim under the Contract Disputes Act ("CDA") or a request for GAO to resolve the dispute under 4 C.F.R. § 21.8(f)(2).

The cost claim submission will include detailed contemporaneous time records, invoices, and a certification by the client that the claimed amounts were actually incurred. The claim has been reviewed for compliance with GAO's reasonableness standards and applicable case law regarding recoverable protest costs.

VIII. ACTION ITEMS AND ASSIGNMENTS

The following table summarizes the key action items arising from this memorandum, with responsible attorney assignments and target dates. This table should be reviewed and updated at each weekly team meeting during the corrective action period.

All action items should be documented in the firm's matter management system under engagement number 1019-00003. Significant developments, correspondence, and internal memoranda should be saved to the matter file in accordance with the firm's document retention policies.

IX. POTENTIAL NEED FOR ADDITIONAL PROTEST

If the Air Force's corrective action proves inadequate — for example, if the agency merely rewrites the SSDD without reopening discussions to cure the unequal discussions deficiency, or if the agency selects Halcyon again without providing proper documented tradeoff rationale that explains why the government is paying a $17.4 million premium — Whitmore would have standing to file a new protest at GAO challenging the corrective action.

The filing deadline for any such protest would be 10 days after Whitmore receives notice of the new award decision (typically through a debriefing), in accordance with 4 C.F.R. § 21.2(a)(2). This is a strict deadline that cannot be extended. The engagement team must be prepared to act immediately upon receipt of the award notification and debriefing to assess whether a new protest is warranted and, if so, to prepare and file the protest within the 10-day window.

Alternatively, Whitmore could pursue relief at the COFC under 28 U.S.C. § 1491(b)(1). The COFC filing deadline is less rigid than GAO's — while timeliness is required, the COFC applies a flexible "blue pencil" analysis rather than a strict 10-day rule. However, a COFC proceeding would be more resource-intensive and expensive than a GAO protest, and the firm's COFC litigation capability would need to be assessed (as discussed in Section V.B above).

Any new protest or COFC proceeding would require a new engagement authorization from the client and would be billed under the existing engagement number (1019-00003) or a successor engagement number, depending on the scope and nature of the proceeding. A revised fee estimate and, if necessary, an amendment to the engagement letter would be required before the new matter is opened.

We recommend that the engagement team begin preliminary planning for a potential follow-on protest by approximately mid-March 2024, once the agency's corrective action process is sufficiently advanced to assess its adequacy. This planning should include identification of potential protest grounds, review of applicable GAO precedent on challenges to corrective action, and preparation of a preliminary draft protest filing that can be finalized quickly once the new award decision is received.

X. BUDGET CONSIDERATIONS

The corrective action monitoring phase is expected to require a relatively modest commitment of attorney time. Based on the scope of activities contemplated — correspondence with agency counsel, client communications, docket monitoring, milestone tracking, and contingency planning — we estimate approximately 15 to 25 hours of attorney time through the March 29, 2024 corrective action deadline.

The current budget status is as follows:

The monitoring phase fees are well within the remaining balance of the $425,000 fee cap established in the engagement letter. No amendment to the fee cap is required for the monitoring activities contemplated in this memorandum.

However, if a new protest or COFC proceeding becomes necessary, the costs would be substantially higher. Based on our experience with comparable proceedings, we estimate that a follow-on GAO protest challenging the corrective action would require approximately $150,000 to $225,000 in attorney time, while a COFC bid protest proceeding could require $300,000 to $500,000 or more, depending on the scope and duration of the litigation. In either case, a revised fee estimate and engagement letter amendment would be required before the new matter is initiated. This should be discussed with Mr. Stokes and Mr. Whitmore as part of the contingency planning process.

XI. CONCLUSION AND RECOMMENDATION

Based on the analysis set forth in this memorandum, we recommend the following course of action for the corrective action monitoring period:

1. Submit the certified protest cost claim on February 7, 2024, in the amount of $365,959.72, to Contracting Officer Colonel Prescott, with a copy to agency counsel.

2. Send a letter to agency counsel (Captain Hargrove) articulating Whitmore's position on the scope of the corrective action by February 10, 2024, emphasizing that the corrective action must include reopening of discussions with both offerors, issuance of Evaluation Notices to Halcyon regarding Supply Chain Risk Management, an opportunity for revised FPRs, and a new, fully documented best-value tradeoff.

3. Actively monitor the Air Force's compliance with the 60-day corrective action deadline through periodic inquiries to agency counsel, beginning with an initial inquiry by February 15, 2024, and continuing through the March 29, 2024 deadline.

4. Monitor the COFC docket on a weekly basis for any filing by Halcyon Defense Systems Inc. or Kessler, Pratt & Dunaway LLP challenging the GAO decision or the corrective action.

5. Advise the client to maintain proposal team readiness, update ITAR compliance documentation, verify subcontractor information (particularly Pinnacle Precision Manufacturing Inc.), and refresh pricing data in preparation for a potential reopening of discussions and request for revised FPRs.

Overall Assessment: The GAO sustain on Grounds 1 and 2 provides a strong foundation for Whitmore's competitive position going forward. The corrective action, if properly implemented, should result in a meaningful reevaluation that gives Whitmore a fair opportunity to compete — and to prevail — on the merits. Whitmore's $17.4 million price advantage (4.82% lower than Halcyon's evaluated price of $361.2 million) is substantial and will be difficult for the SSA to overcome in a properly documented best-value tradeoff absent clear, articulable technical discriminators of significant value. Whitmore's strong ratings on key subfactors — "Outstanding" on System Design & Integration (Factor 1(a)) and ITAR/Export Compliance (Factor 3(c)) — position the company well against Halcyon across the evaluation scheme. The principal risk to Whitmore is a narrowly scoped corrective action that permits the agency to reach the same result with improved documentation but without genuinely curing the process errors identified by GAO.

We recommend that this memorandum be discussed with the full engagement team at the earliest opportunity and that a client call be scheduled with Donald R. Stokes and Marcus J. Whitmore to review the monitoring strategy, communicate the specific client advisories regarding proposal team readiness and documentation updates, and discuss the contingency scenarios outlined herein. A suggested date for the client call is the week of February 5–9, 2024, coordinated with the transmission of the letter to Captain Hargrove.

This memorandum will be updated as developments warrant. The next scheduled update is anticipated for the week of February 19, 2024, or upon the occurrence of any significant event, whichever is earlier.

Lt. Col. (Ret.) Nathan Yardley Of Counsel, Government Contracts Practice Group Calderwood & Harkness LLP 1750 K Street NW, Suite 1100 Washington, D.C. 20006

Distribution: Claudia Merritt (Responsible Partner); Sara Hendricks (Associate); Megan Zhao (Associate); Ian Blackwood (Litigation Group — for information only)

Filed: Matter No. 1019-00003

Factor / Subfactor	Whitmore Aerospace	Halcyon Defense Systems
Factor 1: Technical Approach (Overall)	Good	Outstanding
1(a) System Design & Integration	Outstanding	Outstanding
1(b) Manufacturing Readiness	Acceptable	Outstanding
1(c) Test & Evaluation Plan	Good	Good
Factor 3: Management Approach (Overall)	Good	Good
3(a) Program Management	Good	Good
3(b) Supply Chain Risk Management	Good	Acceptable
3(c) ITAR/Export Compliance	Outstanding	Good
Milestone	Estimated Date	Actual Date	Status	Notes
1. Air Force notification to GAO of intent to comply	Feb. 5, 2024	—	Pending	Expected imminently
2. Contracting Officer issues Corrective Action Determination memorandum	Feb. 9–16, 2024	—	Pending	Internal agency document; may not be shared with offerors
3. SSEB reconvened for reevaluation	Feb. 12–23, 2024	—	Pending	Chaired by Dr. Fenn
4. Discussions reopened (if applicable)	Feb. 19 – Mar. 1, 2024	—	Pending	Critical step re: Ground 2
5. Revised FPRs requested (if applicable)	Mar. 1–8, 2024	—	Pending	Response period ~10–14 days
6. New SSDD issued by SSA	Mar. 18–25, 2024	—	Pending	BGen Jeffcoat
7. New award decision / notification to offerors	Mar. 22–28, 2024	—	Pending	Debriefing request to follow
8. 60-day deadline	Mar. 29, 2024	—	Tracking	Hard target
No.	Action Item	Responsible Attorney	Target Date	Status
1	Prepare letter to Capt. Hargrove regarding scope of corrective action	Claudia Merritt / Nathan Yardley	February 10, 2024	In progress
2	Submit certified protest cost claim to Contracting Officer	Claudia Merritt / Sara Hendricks	February 7, 2024	In progress
3	Monitor for Air Force notification to GAO of intent to comply	Nathan Yardley	Ongoing (expected by Feb. 5, 2024)	Pending
4	Monitor COFC docket for Halcyon filing	Megan Zhao	Ongoing through March 29, 2024	Pending
5	Advise client to maintain proposal team readiness and update documentation	Claudia Merritt	February 5, 2024	Pending
6	Send follow-up inquiry to agency counsel on reevaluation timeline	Nathan Yardley	Late February 2024	Not yet due

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1750 K Street NW, Suite 1100 Washington, D.C. 20006
MEMORANDUM
February 1, 2024
TO: Claudia Merritt, Responsible Partner
FROM: Lt. Col. (Ret.) Nathan Yardley, Of Counsel, Government Contracts
RE: Corrective Action Monitoring Strategy — Whitmore Aerospace LLC v. Department of the Air Force, GAO Case No. B-422187; B-422187.2
MATTER/ENGAGEMENT NO.: 1019-00003
CLIENT: Whitmore Aerospace LLC
CONFIDENTIALITY NOTICE: This memorandum is protected by attorney-client privilege and the work product doctrine. It is intended solely for internal use by the engagement team and should not be shared with any party outside the firm without prior authorization. This document contains mental impressions, conclusions, opinions, and legal theories of attorneys and is prepared in anticipation of litigation and in furtherance of the provision of legal advice to the client.
I. PURPOSE AND EXECUTIVE SUMMARY
The purpose of this memorandum is to outline the firm's strategy for monitoring the U.S. Department of the Air Force's implementation of the corrective action recommended by the Government Accountability Office ("GAO") in its January 29, 2024, decision sustaining the bid protest of our client, Whitmore Aerospace LLC ("Whitmore"), on Grounds 1 and 2. The decision was authored by Kenneth R. Woodley, Managing Associate General Counsel, Procurement Law, and issued under the case caption Whitmore Aerospace LLC, B-422187; B-422187.2 (Comp. Gen. Jan. 29, 2024).
The underlying protest challenged the Air Force's award of Contract No. FA8222-23-D-0193 — an indefinite-delivery/indefinite-quantity ("IDIQ") contract with a ceiling value of $387.5 million for advanced infrared countermeasure ("IRCM") pod assemblies — to Halcyon Defense Systems Inc. ("Halcyon") under Solicitation No. FA8222-23-R-0087. The solicitation was issued by the Air Force Life Cycle Management Center ("AFLCMC"), Sensors Directorate, located at Wright-Patterson Air Force Base, Ohio.
GAO sustained the protest on two of the four grounds raised by Whitmore:
• Ground 1 (Unreasonable Best-Value Tradeoff): The Source Selection Decision Document ("SSDD") prepared by the Source Selection Authority ("SSA"), Brigadier General Harlan T. Jeffcoat, failed to provide substantive rationale for paying a $17.4 million price premium (4.82% above Whitmore's lower-priced proposal) to select Halcyon's higher-priced proposal. The SSDD merely restated adjectival ratings without articulating with particularity what specific technical advantages or discriminators in Halcyon's proposal warranted the significant price premium, in violation of FAR 15.308 and applicable case law.
• Ground 2 (Materially Unequal Discussions): The Contracting Officer, Colonel Diane W. Prescott, conducted materially unequal discussions during the competitive range phase. Specifically, the Air Force issued multiple Evaluation Notices ("ENs") to Whitmore raising concerns about its Supply Chain Risk Management approach, but failed to issue any ENs to Halcyon regarding the Source Selection Evaluation Board's ("SSEB's") documented "significant concern" about Halcyon's sole-source reliance on Meridian Semiconductor GmbH, a German firm, for gallium arsenide ("GaAs") sensor wafers — a critical component of the IRCM pod assembly. This constituted a failure to conduct meaningful discussions with Halcyon on a matter that the SSEB itself identified as a significant concern, in violation of FAR 15.306(d)(3).
GAO denied Ground 3 (organizational conflict of interest arising from Halcyon Analytical Services LLC's participation in the Analysis of Alternatives study) and did not reach Ground 4 (labor rate realism analysis).
The corrective action recommended by GAO consists of four elements: (1) reevaluation of proposals under Factors 1 and 3; (2) conduct of a new best-value tradeoff with documented rationale; (3) if Whitmore is selected following the reevaluation, termination of Halcyon's existing contract for the convenience of the government; and (4) reimbursement of Whitmore's protest costs, including reasonable attorneys' fees. GAO recommended that the corrective action be completed within 60 calendar days, establishing a deadline of March 29, 2024.
As of the date of this memorandum, the Air Force Contracting Officer, Colonel Diane W. Prescott, has not yet formally notified GAO of the agency's intent to implement the corrective action. However, based on standard GAO practice and established precedent, we anticipate that this notification will be transmitted imminently — likely no later than February 5, 2024, and in all probability confirming the Air Force's intent to implement the corrective action in full. In our experience, agencies very rarely decline to implement GAO sustained recommendations, given the reporting obligations to Congress under 31 U.S.C. § 3554(e)(1).
This memorandum identifies the key milestones and deadlines governing the corrective action period, analyzes the scope of the reevaluation required, assesses potential risks and contingencies that may arise during the corrective action process, outlines a communication strategy for interactions with agency counsel and the client, and sets forth specific action items and assignments for the engagement team. It is intended to serve as the primary reference document for the monitoring effort through the expiration of the 60-day corrective action window and any subsequent proceedings that may be required.
II. GAO CORRECTIVE ACTION RECOMMENDATIONS — SUMMARY
The GAO decision sets forth four specific recommendations that together constitute the corrective action the agency is expected to implement. Each recommendation is discussed in detail below, along with the strategic implications for our monitoring effort.
A. Recommendation 1: Reevaluation of Proposals Under Factors 1 and 3
GAO recommended that the Air Force reevaluate the proposals submitted by both Whitmore and Halcyon under Factor 1 (Technical Approach) and Factor 3 (Management Approach). These are the two non-price evaluation factors most directly affected by the errors identified in the decision.
Factor 1: Technical Approach is the most important evaluation factor under the solicitation's stated evaluation scheme. It comprises three subfactors:
• Subfactor 1(a): System Design & Integration — evaluating the offeror's proposed design for the IRCM pod assembly, including sensor integration, software architecture, and compatibility with existing aircraft platforms.
• Subfactor 1(b): Manufacturing Readiness — evaluating the offeror's ability to transition from development to full-rate production, including manufacturing processes, tooling, quality assurance, and production capacity.
• Subfactor 1(c): Test & Evaluation Plan — evaluating the offeror's proposed developmental and operational test and evaluation approach, including test milestones, facilities, and methodology.
Factor 3: Management Approach is rated "Important" under the solicitation's evaluation scheme and comprises three subfactors:
• Subfactor 3(a): Program Management — evaluating the offeror's proposed program management structure, key personnel, and project execution methodology.
• Subfactor 3(b): Supply Chain Risk Management — evaluating the offeror's approach to identifying, assessing, and mitigating supply chain risks, including single-source dependencies, foreign supplier risks, and counterfeit part prevention.
• Subfactor 3(c): ITAR/Export Compliance — evaluating the offeror's compliance framework for International Traffic in Arms Regulations and export control requirements.
For reference, the original adjectival ratings assigned by the SSEB to each offeror are summarized below:
GAO's decision makes clear that the reevaluation must address, at minimum, the Manufacturing Readiness subfactor under Factor 1(b) and the Supply Chain Risk Management subfactor under Factor 3(b), as these are the areas most directly affected by the errors identified on Grounds 1 and 2, respectively. With respect to Ground 2, the unequal discussions finding directly implicates Factor 3(b): the SSEB documented "significant concern" regarding Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers but never raised this concern with Halcyon during discussions, while simultaneously issuing ENs to Whitmore on supply chain matters. This deficiency cannot be cured through reevaluation alone; it requires either the reopening of discussions or a fundamental reassessment of Halcyon's subfactor rating.
Factor 2 (Past Performance) and Factor 4 (Price/Cost) were not specifically ordered to be reevaluated. Both offerors received ratings of "Substantial Confidence" under Factor 2. Under Factor 4, Whitmore's evaluated price was $343.8 million and Halcyon's evaluated price was $361.2 million — a difference of $17.4 million representing a 4.82% premium over Whitmore's lower-priced proposal. While these factors are not subject to formal reevaluation, they will necessarily feed into the new best-value tradeoff analysis required by Recommendation 2.
B. Recommendation 2: New Best-Value Tradeoff with Documented Rationale
GAO recommended that the SSA, Brigadier General Harlan T. Jeffcoat, prepare a new Source Selection Decision Document that identifies specific technical discriminators or benefits justifying any price premium paid, consistent with the requirements of FAR 15.308 and the solicitation's stated evaluation criteria. The GAO decision was emphatic that the new SSDD must not merely restate adjectival ratings or offer conclusory assertions that the higher-rated proposal is "worth the premium." Rather, the SSA must articulate with particularity the specific advantages, innovations, risk mitigations, or other benefits identified in the higher-priced proposal that, in the reasoned judgment of the SSA, justify the additional cost to the government.
This recommendation flows directly from the Ground 1 sustain, in which GAO found that the original SSDD was legally deficient because it failed to engage in any meaningful comparative analysis of the proposals' substantive content. The SSDD stated, in its entirety regarding the tradeoff, that Halcyon's "Outstanding rating under the most important evaluation factor (Technical Approach) represents a significant advantage over Whitmore's Good rating and warrants the modest price premium." GAO found this rationale to be conclusory and insufficient, noting that a mere recitation of adjectival ratings does not satisfy the SSA's obligation to conduct a qualitative assessment of what the government is getting in return for paying a higher price. See, e.g., Ashbury Partners LLC, B-404998, 2011 CPD ¶ 232; Westvale Partners LLC, B-411465, 2015 CPD ¶ 198.
The requirement for a new SSDD is critically important to Whitmore's competitive position. Whitmore's $17.4 million price advantage is substantial and represents significant value to the government. If the SSA is required to identify specific, substantive reasons — beyond adjectival labels — for paying an additional $17.4 million, the analysis may well favor Whitmore, particularly given that both offerors received identical ratings on the System Design & Integration subfactor (Outstanding) and the Test & Evaluation Plan subfactor (Good), leaving Manufacturing Readiness as the primary differentiator under Factor 1.
C. Recommendation 3: Potential Termination for Convenience
GAO recommended that if the reevaluation results in the selection of Whitmore, the Air Force must terminate Halcyon's existing contract (FA8222-23-D-0193) for the convenience of the government. This is a significant operational and programmatic consideration for the Air Force. Contract No. FA8222-23-D-0193 is a $387.5 million ceiling IDIQ contract supporting critical warfighter capabilities — advanced IRCM pod assemblies designed to protect tactical aircraft from infrared-guided missile threats. Termination for convenience of a contract of this magnitude and operational significance is not a step the Air Force will take lightly, and this consideration may factor into the agency's deliberations regarding the corrective action timeline and, potentially, the ultimate source selection outcome.
We should be attentive to the possibility that the significance of this termination may create institutional pressure within the Air Force to reach the same selection decision (i.e., selecting Halcyon again), this time with more robust documentation. While such an outcome is not inherently unlawful — an agency may reach the same result on reevaluation if the decision is adequately documented and supported — it must be the product of a genuine, good-faith reevaluation, not a predetermined outcome with post hoc rationalization.
D. Recommendation 4: Reimbursement of Protest Costs
GAO recommended that the Air Force reimburse Whitmore's protest costs, including reasonable attorneys' fees, pursuant to 31 U.S.C. § 3554(c)(1)(A) and 4 C.F.R. § 21.8(d). This recommendation is standard in sustained decisions where the protester prevailed on the merits.
The firm is preparing a certified protest cost claim in the amount of $365,959.72, consisting of $347,216.50 in attorneys' fees and $18,743.22 in costs (including filing fees, photocopying, travel, and expert consulting fees). This claim is being finalized for submission on February 7, 2024, in accordance with the 60-day deadline for cost claim submission following a sustained decision. The claim will be submitted to the Contracting Officer, Colonel Prescott, with a copy to agency counsel.
Separate tracking of the cost claim submission and any negotiations regarding the claim amount is being handled as a distinct workstream under the supervision of Claudia Merritt and associate Sara Hendricks. This memorandum focuses on the corrective action monitoring aspects of the engagement; however, coordination between the two workstreams is necessary because the cost claim arises from the same GAO recommendation and will be submitted to the same Contracting Officer managing the corrective action.
III. KEY DEADLINES AND MILESTONES
A. 60-Day Corrective Action Deadline
GAO's decision recommended that the corrective action be completed within 60 calendar days from the date of the decision. The decision was issued on January 29, 2024. Accordingly, the calculated deadline for completion of the corrective action is March 29, 2024.
It is important to note that "completion" of corrective action, as interpreted in GAO precedent, means the issuance of a new source selection decision and notification to offerors — not merely the commencement of reevaluation activities. The agency must have completed the entire corrective action process, including reconvening the SSEB, conducting the reevaluation, reopening discussions (if applicable), soliciting and evaluating revised FPRs (if applicable), preparing the new SSDD, and making a new award decision by this date. See Pemberton Enterprises, B-400771.8, 2010 CPD ¶ 52 (GAO noting that agencies are expected to complete, not merely commence, corrective action within the recommended timeframe).
While the 60-day recommendation is not a hard statutory deadline — GAO cannot compel agency compliance with its recommendations — failure to meet the deadline may be reported by GAO to Congress under 31 U.S.C. § 3554(e)(1), and may provide a basis for Whitmore to file a new protest or take other action if the delay is prejudicial.
B. Anticipated Agency Timeline
Based on our experience with corrective action proceedings at AFLCMC and the Sensors Directorate specifically, and based on the scope of the reevaluation required, we anticipate the following general sequence of agency actions:
1. Formal Notification of Intent to Comply: The Contracting Officer, Colonel Prescott, will transmit a letter to GAO confirming the Air Force's intent to implement the recommended corrective action. This notification is expected no later than the first week of February 2024. Per standard GAO practice, the Contracting Officer typically notifies GAO within 5 to 10 business days of the decision date. We anticipate this notification will be issued by approximately February 5, 2024.
2. Corrective Action Determination Memorandum: Colonel Prescott will issue an internal Corrective Action Determination memorandum directing the reconvening of the SSEB and establishing the procedures and scope of the reevaluation. This memorandum will set the framework for the balance of the corrective action process. We anticipate this will be issued within the first two weeks of February.
3. Reconvening of the SSEB: The Source Selection Evaluation Board, chaired by Dr. Yolanda R. Fenn, will be reconvened to conduct the reevaluation of proposals under Factors 1 and 3. This step requires reassembling the evaluation team, scheduling board sessions, and reviewing the existing evaluation record in conjunction with the GAO decision.
4. Reopening of Discussions (If Applicable): If the agency determines — as it should — that discussions must be reopened to cure the unequal discussions deficiency identified on Ground 2, the Contracting Officer will notify both Whitmore and Halcyon that discussions are being reopened. New Evaluation Notices will be prepared and transmitted. This step is critical and may add two to three weeks to the timeline.
5. Revised Final Proposal Revisions (If Applicable): If discussions are reopened, both offerors may be given the opportunity to submit revised FPRs addressing the areas discussed. This step would require a response period (typically 10 to 14 calendar days) and subsequent evaluation by the SSEB.
6. New SSDD Preparation and SSA Decision: Following the reevaluation, the SSEB will prepare an updated Comparative Analysis Report, and the SSA, Brigadier General Jeffcoat, will prepare a new SSDD in accordance with FAR 15.308 and the GAO's recommendation.
7. Formal Notification to Offerors: The Contracting Officer will notify both offerors of the new award decision and offer debriefings in accordance with FAR 15.506.
C. Milestone Tracking Table
The following table will be used to track key milestones throughout the corrective action period. The "Estimated Date" column reflects our current best estimates based on the anticipated timeline discussed above. The "Actual Date" and "Status" columns will be updated as events occur.
This table should be maintained as a living document and updated at least weekly by the engagement team. Nathan Yardley will serve as the primary point of contact for milestone tracking.
IV. SCOPE OF REEVALUATION — STRATEGIC CONSIDERATIONS
The scope of the Air Force's reevaluation is the single most consequential issue in the corrective action monitoring effort. The GAO decision provides a floor — the minimum scope of corrective action that the agency must undertake — but the agency retains discretion to broaden the scope if it determines that a more comprehensive reevaluation is warranted. Our strategic interest lies in ensuring that the scope of the corrective action is sufficiently broad to cure both errors identified by GAO and to provide Whitmore a meaningful opportunity to compete on a level playing field.
A. Minimum Scope Required by GAO Decision
As discussed in Section II.A above, the reevaluation must encompass, at minimum, Factor 1 (Technical Approach) and Factor 3 (Management Approach). The GAO decision identifies two specific areas of concern within these factors that the agency must address:
First, with respect to Ground 1 (unreasonable best-value tradeoff), the reevaluation must focus on Factor 1(b) (Manufacturing Readiness), which represents the primary rating differential between Whitmore (Acceptable) and Halcyon (Outstanding) under the most important evaluation factor. The new SSDD must articulate why, if applicable, Halcyon's "Outstanding" rating under this subfactor warrants a $17.4 million premium over Whitmore's "Acceptable" rating. The SSA must identify the specific technical advantages, risk mitigations, or other benefits in Halcyon's Manufacturing Readiness approach that justify the additional cost. Conclusory assertions that "Outstanding is better than Acceptable" will not suffice.
Second, with respect to Ground 2 (unequal discussions), the reevaluation must address Factor 3(b) (Supply Chain Risk Management) and the agency's failure to raise with Halcyon the SSEB's documented "significant concern" regarding Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers. This concern was discussed at length in the SSEB's internal deliberations and is reflected in the Comparative Analysis Report, yet the Contracting Officer never issued an Evaluation Notice to Halcyon on this topic — while simultaneously issuing ENs to Whitmore on supply chain matters. To cure this deficiency, the agency must either: (a) reopen discussions and issue one or more ENs to Halcyon specifically addressing the Meridian Semiconductor sole-source dependency; or (b) reassess Halcyon's Factor 3(b) rating in light of the concerns that were documented but never raised.
Option (a) is the more appropriate course of action and the one we will advocate for. Option (b) alone may be insufficient because the purpose of discussions is to give the offeror an opportunity to address the agency's concerns and revise its proposal accordingly. If the agency simply downgrades Halcyon's rating without giving Halcyon the opportunity to address the concern, Halcyon would have a strong basis for a counter-protest. Conversely, if the agency reopens discussions and Halcyon provides a satisfactory response to the Meridian Semiconductor concern, the agency's ratings may be adjusted upward — but this is a risk Whitmore should be willing to accept in exchange for a level playing field on which Whitmore's own strengths can be fairly evaluated.
The new best-value tradeoff must integrate all four evaluation factors — Technical Approach, Past Performance, Management Approach, and Price — even if Factors 2 and 4 are not formally reevaluated. The ratings and evaluated prices from Factors 2 and 4 will carry forward into the tradeoff analysis and must be considered alongside the revised ratings under Factors 1 and 3.
B. Risk That Agency Narrows Scope Improperly
One of the most significant risks we face during the corrective action period is that the Air Force attempts to limit the reevaluation to a narrow "paper exercise" — essentially rewriting the SSDD to backfill rationale for the same outcome without meaningfully reevaluating proposals under Factors 1 and 3 and without reopening discussions to cure the unequal discussions deficiency.
This risk is not hypothetical. In our experience, agencies sometimes respond to GAO sustain decisions by taking the minimum possible corrective action — particularly where the existing awardee has already begun performance and the agency has institutional reasons to prefer maintaining the status quo. The Air Force may view the Ground 1 sustain as requiring only that the SSA write a more detailed SSDD, while treating the Ground 2 sustain as capable of being addressed by merely reevaluating Halcyon's Factor 3(b) rating without reopening discussions.
Such an approach would be legally deficient and would not comply with the GAO recommendation. A narrowly scoped corrective action that fails to reopen discussions cannot cure the unequal discussions finding. The violation identified on Ground 2 was not a flaw in the evaluation ratings themselves; it was a flaw in the competitive process — the failure to give Halcyon an opportunity to address a documented agency concern during discussions, while simultaneously raising similar concerns with Whitmore. The remedy for a process-based violation is to correct the process, not to adjust the output ratings while leaving the flawed process intact.
If the agency takes corrective action that is inadequate in scope, Whitmore would have standing and strong grounds to file a new protest at GAO challenging the corrective action itself. See DLT Sols., Inc., B-411901.2, 2016 CPD ¶ 43 (sustaining protest challenging inadequate corrective action where agency failed to meaningfully address GAO's prior recommendation); Hollowell Life Insurance Gov't Servs., LLC, B-401068.4, 2010 CPD ¶ 10 (similar).
C. Whitmore's Position on Scope
Our position, which we will communicate to agency counsel in a formal letter, is that the corrective action must include the following elements to comply with the GAO recommendation:
1. Reopening of discussions with both Whitmore and Halcyon on Factors 1 and 3, not limited to specific subfactors but encompassing the full scope of both factors;
2. Issuance of Evaluation Notices to Halcyon regarding Supply Chain Risk Management (Factor 3(b)), specifically addressing the SSEB's documented "significant concern" about Halcyon's sole-source reliance on Meridian Semiconductor GmbH for GaAs sensor wafers;
3. An opportunity for both offerors to submit revised Final Proposal Revisions following the close of discussions, reflecting any modifications or enhancements to their proposals responsive to the Evaluation Notices; and
4. A new, fully documented best-value tradeoff conducted by the SSA in accordance with FAR 15.308, integrating the reevaluated ratings under Factors 1 and 3 with the existing ratings under Factors 2 and 4, and articulating with particularity any rationale for paying a price premium if the SSA again selects the higher-priced proposal.
A letter to Captain Lucas M. Hargrove, agency counsel, articulating this position is currently being prepared. The target date for transmission of this letter is the week of February 5–9, 2024, with a firm deadline of February 10, 2024. The letter will be signed by Claudia Merritt as Responsible Partner and will be submitted on Calderwood & Harkness letterhead.
We recognize that our position on the scope of corrective action is advisory in nature — the agency retains discretion to determine the scope and methodology of its reevaluation, provided it complies with the GAO recommendation. However, communicating our position clearly and on the record serves two purposes: it puts the agency on notice of our expectations, and it preserves the record in the event a subsequent protest challenging the corrective action becomes necessary.
V. POTENTIAL RISKS AND CONTINGENCIES
The corrective action period presents several risks that must be monitored and, to the extent possible, mitigated. Each risk is discussed below along with its probability, potential impact, and recommended mitigation measures.
A. Risk 1: Agency Non-Compliance or Delayed Compliance
Description: The Air Force fails to complete the corrective action within the 60-day deadline (by March 29, 2024), or implements corrective action that does not conform to GAO's recommendation in substance or scope.
Probability: Low to moderate. Agencies generally comply with GAO recommendations, and the 60-day timeline, while ambitious given the scope of the reevaluation, is achievable. However, delays are possible due to the complexity of reconvening the SSEB, the potential need to reopen discussions and solicit revised FPRs, and competing priorities within AFLCMC and the Sensors Directorate.
Impact: High. Delayed compliance prolongs uncertainty for Whitmore and may allow the Air Force to issue task orders under the existing Halcyon contract, further entrenching Halcyon's position as incumbent. Non-compliance in substance — e.g., a paper exercise that does not genuinely cure the identified errors — would require Whitmore to file a new protest, adding months to the procurement timeline.
Mitigation:
• Monitor the timeline through periodic inquiries to agency counsel (Captain Hargrove and Ms. Castellano).
• Send an initial inquiry letter to Captain Hargrove by February 15, 2024, requesting confirmation of the corrective action timeline and a general description of the process the agency intends to follow.
• If the agency fails to implement the corrective action by March 29, 2024, or implements corrective action that is substantively inadequate, Whitmore may file a new protest at GAO or seek relief at the U.S. Court of Federal Claims ("COFC").
• GAO reports non-compliance to Congress under 31 U.S.C. § 3554(e)(1), but this is a soft enforcement mechanism with no direct legal consequence. The primary enforcement vehicle available to Whitmore is a new protest or COFC action.
Action Item: Nathan Yardley to send initial inquiry letter to Captain Hargrove by February 15, 2024, requesting confirmation of corrective action timeline and process.
B. Risk 2: Halcyon Challenge at the U.S. Court of Federal Claims (COFC)
Description: Halcyon Defense Systems Inc. may file a post-award bid protest at the COFC challenging the GAO decision itself, the Air Force's implementation of the corrective action, or the termination of Halcyon's contract. Halcyon's counsel of record is Kessler, Pratt & Dunaway LLP ("KPD"), with lead partner Ted Dunaway and associate Rachel Sorensen. KPD is an experienced government contracts litigation firm with a well-established COFC practice.
Probability: Moderate. The GAO decision represents a significant adverse outcome for Halcyon, which holds an awarded contract valued at up to $387.5 million. The financial stakes are substantial, and Halcyon has retained sophisticated counsel. While GAO decisions are not directly appealable to the COFC, a disappointed party may file a new bid protest at the COFC challenging the same procurement on the same or different grounds. COFC proceedings under the Tucker Act, 28 U.S.C. § 1491(b), are de novo — the COFC does not defer to or review GAO decisions but conducts its own independent analysis of the protest grounds.
Potential Grounds: Halcyon may argue that: (a) the Air Force's corrective action improperly disrupts its awarded contract without adequate basis; (b) the GAO decision was factually or legally erroneous (although the COFC would not "review" the GAO decision per se, Halcyon could raise the same underlying procurement issues); or (c) the corrective action process itself is being conducted in a manner prejudicial to Halcyon's interests.
Potential Timeline: To seek meaningful injunctive relief, Halcyon would need to file promptly — typically within 10 to 14 days of the Corrective Action Determination memorandum or the notification of a new award decision adverse to Halcyon. If Halcyon seeks a temporary restraining order ("TRO") to prevent termination of its contract, it would need to demonstrate irreparable harm, likelihood of success on the merits, balance of hardships, and public interest under the traditional four-factor test.
Mitigation:
• Monitor the COFC docket (Court of Federal Claims PACER system) on a regular basis for any filing by Halcyon or KPD. Megan Zhao is assigned to conduct weekly docket checks.
• If Halcyon files at the COFC, Whitmore would likely need to intervene as an interested party under RCFC 24(a) to protect its interests. Intervention is typically granted as of right in bid protest cases where the intervenor has a direct economic interest in the outcome.
• Assess whether Calderwood & Harkness has sufficient COFC litigation capability in-house or whether co-counsel with specialized COFC trial experience would be needed. Ian Blackwood in the firm's litigation group should be consulted on this question. If co-counsel is required, potential candidates should be identified proactively.
• Prepare a preliminary assessment of the strength of any potential Halcyon COFC challenge, focusing on the likelihood that the COFC would reach a different conclusion than GAO on Grounds 1 and 2.
Action Item: Megan Zhao to begin weekly COFC docket monitoring immediately. Claudia Merritt and Ian Blackwood to assess COFC litigation readiness on a contingent basis.
C. Risk 3: Agency Override of CICA Stay or Award During Corrective Action
Description: Although the Competition in Contracting Act ("CICA") automatic stay under 31 U.S.C. § 3553(c)(1) attached upon the filing of the protest and was in effect during the pendency of the GAO proceeding, the corrective action phase operates under a different legal framework. There is no statutory stay during the corrective action period. The GAO decision does not impose a legal prohibition on the Air Force's continued use of the Halcyon contract. Accordingly, the Air Force could theoretically continue to issue task orders under Contract No. FA8222-23-D-0193 while the reevaluation is underway.
Probability: Moderate. The IRCM pod assembly program supports critical warfighter requirements, and the Air Force may face operational pressure to continue procurement activities during the reevaluation period. If significant task orders are issued under the Halcyon contract during the corrective action period, this could further entrench Halcyon as the incumbent and create switching costs that make termination for convenience more costly and less likely.
Impact: Moderate to high. Issuance of task orders during the corrective action period could prejudice Whitmore's competitive position and undermine the purpose of the corrective action. It could also create practical obstacles to termination for convenience if Whitmore is ultimately selected.
Mitigation:
• Inquire of agency counsel whether the Air Force intends to issue any task orders under FA8222-23-D-0193 during the corrective action period. This inquiry should be included in the initial letter to Captain Hargrove.
• If the agency issues task orders before completing the reevaluation, Whitmore may have grounds for a new protest arguing that such actions prejudice the corrective action process and undermine the purpose of the GAO recommendation. See SYTEC, Inc., B-289448.3, 2003 CPD ¶ 73 (finding that agency's continued performance of work under protested contract during corrective action period was inconsistent with the purpose of the corrective action).
• Document any task orders or contract modifications issued during the corrective action period for use in any subsequent protest or COFC proceeding.
D. Risk 4: Changed Requirements or New Solicitation
Description: The Air Force could elect to cancel Solicitation No. FA8222-23-R-0087 entirely and issue a new solicitation rather than complete the reevaluation of existing proposals. While this is within the agency's discretion — agencies generally have broad authority to cancel solicitations, even after award, provided there is a reasonable basis — it could significantly delay the procurement and would require Whitmore to prepare and submit an entirely new proposal.
Probability: Low. Cancellation and reissuance of a solicitation of this magnitude is a drastic step that would delay the IRCM pod assembly program by many months, if not years. The Air Force has operational urgency to field IRCM capabilities, and cancellation would be contrary to the agency's programmatic interests. However, the possibility cannot be ruled out entirely, particularly if the agency encounters complications during the reevaluation process or if requirements have changed since the original solicitation was issued.
Impact: High. A new solicitation would reset the competitive clock, require substantial proposal preparation effort and expense by Whitmore, and potentially open the competition to additional offerors.
Mitigation:
• Monitor for any cancellation notice or amendment to the solicitation through FedBizOpps/SAM.gov and through communications with agency counsel.
• Advise Whitmore to begin refreshing its proposal materials proactively, ensuring that manufacturing readiness data, past performance references, and supply chain documentation are current. This is prudent regardless of whether a new solicitation is issued, as updated materials may also be useful if revised FPRs are requested as part of the corrective action.
• Specifically, Whitmore should verify that the information regarding its critical subcontractor, Pinnacle Precision Manufacturing Inc. (6220 Industrial Parkway, Beavercreek, OH 45431), is current — including facility security clearance status (Secret clearance, held since 2014), manufacturing capacity data, and workforce availability.
E. Risk 5: Personnel Changes Affecting Reevaluation
Description: There is a risk that key agency personnel involved in the original evaluation and source selection may rotate out, be reassigned, or retire before the reevaluation is complete. Key personnel include the SSA (Brigadier General Harlan T. Jeffcoat), the SSEB Chair (Dr. Yolanda R. Fenn), the Contracting Officer (Colonel Diane W. Prescott), and the Contract Specialist (Vincent Talmadge). Military personnel, in particular, are subject to reassignment on relatively short notice, and BGen Jeffcoat's assignment at AFLCMC may be time-limited.
Probability: Low to moderate over the 60-day corrective action window, but non-trivial given the pace of military reassignments.
Impact: Variable. Personnel changes could affect continuity and institutional knowledge, potentially slowing the reevaluation process. On the other hand, new evaluators may bring fresh perspective and may be less invested in defending the original evaluation outcome, which could work to Whitmore's advantage.
Mitigation:
• Our ability to influence agency staffing decisions is limited. We can monitor for personnel changes through communications with agency counsel and through publicly available information (e.g., change of command announcements, assignment orders).
• If a new SSA is designated, Whitmore may benefit because the new SSA would not be in the position of reviewing and potentially reversing his or her own prior decision.
• If the SSEB composition changes significantly, the quality and consistency of the reevaluation may be affected, and this should be monitored for any irregularities.
VI. COMMUNICATION STRATEGY
Effective communication management is essential during the corrective action period. This section outlines the protocols for communications with agency counsel, the client, and intervenor's counsel.
A. Communications with Agency Counsel
All communications with the Air Force regarding the corrective action must be directed through agency counsel. The designated agency counsel for this matter are:
• Captain Lucas M. Hargrove, USAF, JAG — Trial attorney, Air Force Legal Operations Agency, assigned to AFLCMC, Sensors Directorate, Wright-Patterson AFB, OH 45433.
• Miriam T. Castellano — Senior attorney, Office of the General Counsel, SAF/GCQ, AFLCMC, Sensors Directorate, Wright-Patterson AFB, OH 45433.
No direct contact between Whitmore personnel — including Donald R. Stokes (VP, Government Contracts) or Marcus J. Whitmore (CEO) — and the Contracting Officer, the SSA, or any SSEB members is permitted regarding the reevaluation. Any such contact could be perceived as improper ex parte communication during the source selection process and could jeopardize Whitmore's competitive position. This prohibition should be communicated clearly and in writing to all Whitmore personnel who may have occasion to interact with Air Force personnel in other contexts, including through industry conferences, professional associations, or existing business relationships.
The following formal correspondence is planned during the corrective action period:
1. Letter to Captain Hargrove regarding scope of corrective action — This letter will articulate Whitmore's position on the minimum scope of the reevaluation necessary to comply with the GAO recommendation, as discussed in Section IV.C above. Target date: February 10, 2024. The letter will be prepared jointly by Claudia Merritt and Nathan Yardley and will be transmitted via email with hard copy follow-up.
2. Follow-up inquiry on timeline — A follow-up letter or email to Captain Hargrove requesting a status update on the corrective action timeline, including confirmation that the SSEB has been reconvened and a general indication of whether discussions will be reopened. Target date: Late February / early March 2024, adjusted as necessary based on the agency's progress.
Additional correspondence may be necessary depending on developments during the corrective action period, including responses to agency communications, requests for information, or notifications regarding the reopening of discussions.
B. Communications with Client
Regular status updates will be provided to the primary client contacts at Whitmore Aerospace LLC, 2400 Dominion Ridge Parkway, Suite 800, Herndon, VA 20171:
• Donald R. Stokes — Vice President, Government Contracts
• Marcus J. Whitmore — Chief Executive Officer
Status updates should be provided at least biweekly during the corrective action period, with immediate notification of any significant developments (e.g., receipt of agency notification, reopening of discussions, new award decision). Updates should be provided by telephone or video conference, followed by a brief written summary for the file.
In addition to routine status updates, the following specific advisories should be communicated to Whitmore at the earliest opportunity:
1. Maintain Proposal Team Readiness. Whitmore should maintain its proposal team in a state of readiness to respond promptly in the event discussions are reopened and revised FPRs are requested. This includes retaining the services of Janet K. Overmeyer at Ridgeline Consulting Group LLC (4501 Fairfax Drive, Suite 200, Arlington, VA 22203), who served as the lead proposal consultant during the original proposal preparation and competitive range phase. Ms. Overmeyer's familiarity with the solicitation requirements, evaluation criteria, and Whitmore's proposal is invaluable and would be difficult to replicate with a new consultant on short notice.
2. Update ITAR Compliance Documentation. Whitmore should ensure that all ITAR compliance documentation, including the materials submitted under CDRL A015, is current and updated. Whitmore received an "Outstanding" rating on Factor 3(c) (ITAR/Export Compliance) — a significant competitive advantage — and maintaining the currency of its compliance documentation is essential to preserving this advantage during the reevaluation. Any changes to Whitmore's ITAR registration, export licenses, technology control plans, or empowered official designations since the original proposal submission should be documented and ready for inclusion in any revised FPR.
3. Verify Subcontractor Information. Whitmore should verify that the information regarding its critical subcontractor, Pinnacle Precision Manufacturing Inc. (6220 Industrial Parkway, Beavercreek, OH 45431), is current and accurate. Specifically:
• Pinnacle's facility security clearance (Secret level, continuously maintained since 2014) should be confirmed as current through the Defense Counterintelligence and Security Agency ("DCSA") database.
• Manufacturing capacity data, including production line status, workforce levels, and equipment certifications, should be updated to reflect current conditions.
• Any changes to Pinnacle's ownership, management, or financial condition should be assessed for potential impact on Whitmore's proposal.
4. Refresh Pricing Data. Whitmore's CFO, Patricia "Trish" Langford, should be engaged to ensure that pricing data is current in the event cost/price proposals need to be refreshed as part of the corrective action process. While Factor 4 (Price) is not subject to formal reevaluation, the agency may request updated pricing if discussions are reopened and revised FPRs are solicited. Additionally, changes in material costs, labor rates, or subcontractor pricing since the original proposal submission should be assessed for their impact on Whitmore's competitive position.
C. Communications with Intervenor's Counsel
No affirmative communication with Kessler, Pratt & Dunaway LLP — whether with Ted Dunaway, Rachel Sorensen, or any other attorney at the firm — is contemplated at this time. We do not anticipate any need for direct communication with Halcyon's counsel unless and until one of the following events occurs:
• A COFC action is filed by Halcyon, necessitating coordination on scheduling, briefing, or other procedural matters;
• Protective order compliance issues arise requiring communication between counsel; or
• The agency directs counsel to participate in some aspect of the corrective action process that requires inter-party coordination.
It should be noted that the GAO Protective Order issued in B-422187; B-422187.2 remains in effect with respect to all protected materials produced during the protest. All documents designated as protected under the protective order — including proprietary proposal excerpts, source selection evaluation materials, and other competition-sensitive information — must continue to be handled in strict accordance with the terms of the protective order and the firm's internal protective order compliance procedures. Specifically, access to protected materials remains limited to counsel admitted under the protective order (Claudia Merritt, Nathan Yardley, and Sara Hendricks), and no protected materials may be shared with client personnel or any other person not admitted under the order.
VII. PROTEST COST CLAIM — COORDINATION
As noted above, the firm is preparing the certified protest cost claim for submission on February 7, 2024. This section addresses the coordination between the cost claim workstream and the corrective action monitoring effort.
The total claim amount is $365,959.72, consisting of:
• Attorneys' fees: $347,216.50
• Costs (filing fees, photocopying, travel, expert consulting fees): $18,743.22
The total attorneys' fee component of $347,216.50 is well within the $425,000 voluntary fee cap established in the engagement letter dated September 18, 2023, as amended on November 2, 2023. The claim will be submitted to the Contracting Officer (Colonel Prescott) in accordance with GAO's recommendation and the procedures set forth in 4 C.F.R. § 21.8(f). A copy of the claim will be transmitted simultaneously to agency counsel (Captain Hargrove).
The cost claim is a separate workstream that is being managed by Claudia Merritt and associate Sara Hendricks. However, coordination between the cost claim and the corrective action monitoring effort is necessary for several reasons:
• Both the cost claim and the corrective action are elements of the same GAO recommendation, and both are directed to the same Contracting Officer (Colonel Prescott).
• The agency's handling of the cost claim may provide insight into the agency's overall posture regarding the GAO decision — prompt and cooperative handling may indicate good faith compliance, while delays or disputes may signal resistance.
• If the Air Force disputes the claim amount, further proceedings may be necessary. Protest cost claims are typically handled administratively, but if the parties cannot reach agreement, Whitmore may need to pursue the claim through other channels, potentially including a claim under the Contract Disputes Act ("CDA") or a request for GAO to resolve the dispute under 4 C.F.R. § 21.8(f)(2).
The cost claim submission will include detailed contemporaneous time records, invoices, and a certification by the client that the claimed amounts were actually incurred. The claim has been reviewed for compliance with GAO's reasonableness standards and applicable case law regarding recoverable protest costs.
VIII. ACTION ITEMS AND ASSIGNMENTS
The following table summarizes the key action items arising from this memorandum, with responsible attorney assignments and target dates. This table should be reviewed and updated at each weekly team meeting during the corrective action period.
All action items should be documented in the firm's matter management system under engagement number 1019-00003. Significant developments, correspondence, and internal memoranda should be saved to the matter file in accordance with the firm's document retention policies.
IX. POTENTIAL NEED FOR ADDITIONAL PROTEST
If the Air Force's corrective action proves inadequate — for example, if the agency merely rewrites the SSDD without reopening discussions to cure the unequal discussions deficiency, or if the agency selects Halcyon again without providing proper documented tradeoff rationale that explains why the government is paying a $17.4 million premium — Whitmore would have standing to file a new protest at GAO challenging the corrective action.
The filing deadline for any such protest would be 10 days after Whitmore receives notice of the new award decision (typically through a debriefing), in accordance with 4 C.F.R. § 21.2(a)(2). This is a strict deadline that cannot be extended. The engagement team must be prepared to act immediately upon receipt of the award notification and debriefing to assess whether a new protest is warranted and, if so, to prepare and file the protest within the 10-day window.
Alternatively, Whitmore could pursue relief at the COFC under 28 U.S.C. § 1491(b)(1). The COFC filing deadline is less rigid than GAO's — while timeliness is required, the COFC applies a flexible "blue pencil" analysis rather than a strict 10-day rule. However, a COFC proceeding would be more resource-intensive and expensive than a GAO protest, and the firm's COFC litigation capability would need to be assessed (as discussed in Section V.B above).
Any new protest or COFC proceeding would require a new engagement authorization from the client and would be billed under the existing engagement number (1019-00003) or a successor engagement number, depending on the scope and nature of the proceeding. A revised fee estimate and, if necessary, an amendment to the engagement letter would be required before the new matter is opened.
We recommend that the engagement team begin preliminary planning for a potential follow-on protest by approximately mid-March 2024, once the agency's corrective action process is sufficiently advanced to assess its adequacy. This planning should include identification of potential protest grounds, review of applicable GAO precedent on challenges to corrective action, and preparation of a preliminary draft protest filing that can be finalized quickly once the new award decision is received.
X. BUDGET CONSIDERATIONS
The corrective action monitoring phase is expected to require a relatively modest commitment of attorney time. Based on the scope of activities contemplated — correspondence with agency counsel, client communications, docket monitoring, milestone tracking, and contingency planning — we estimate approximately 15 to 25 hours of attorney time through the March 29, 2024 corrective action deadline.
The current budget status is as follows:
The monitoring phase fees are well within the remaining balance of the $425,000 fee cap established in the engagement letter. No amendment to the fee cap is required for the monitoring activities contemplated in this memorandum.
However, if a new protest or COFC proceeding becomes necessary, the costs would be substantially higher. Based on our experience with comparable proceedings, we estimate that a follow-on GAO protest challenging the corrective action would require approximately $150,000 to $225,000 in attorney time, while a COFC bid protest proceeding could require $300,000 to $500,000 or more, depending on the scope and duration of the litigation. In either case, a revised fee estimate and engagement letter amendment would be required before the new matter is initiated. This should be discussed with Mr. Stokes and Mr. Whitmore as part of the contingency planning process.
XI. CONCLUSION AND RECOMMENDATION
Based on the analysis set forth in this memorandum, we recommend the following course of action for the corrective action monitoring period:
1. Submit the certified protest cost claim on February 7, 2024, in the amount of $365,959.72, to Contracting Officer Colonel Prescott, with a copy to agency counsel.
2. Send a letter to agency counsel (Captain Hargrove) articulating Whitmore's position on the scope of the corrective action by February 10, 2024, emphasizing that the corrective action must include reopening of discussions with both offerors, issuance of Evaluation Notices to Halcyon regarding Supply Chain Risk Management, an opportunity for revised FPRs, and a new, fully documented best-value tradeoff.
3. Actively monitor the Air Force's compliance with the 60-day corrective action deadline through periodic inquiries to agency counsel, beginning with an initial inquiry by February 15, 2024, and continuing through the March 29, 2024 deadline.
4. Monitor the COFC docket on a weekly basis for any filing by Halcyon Defense Systems Inc. or Kessler, Pratt & Dunaway LLP challenging the GAO decision or the corrective action.
5. Advise the client to maintain proposal team readiness, update ITAR compliance documentation, verify subcontractor information (particularly Pinnacle Precision Manufacturing Inc.), and refresh pricing data in preparation for a potential reopening of discussions and request for revised FPRs.
Overall Assessment: The GAO sustain on Grounds 1 and 2 provides a strong foundation for Whitmore's competitive position going forward. The corrective action, if properly implemented, should result in a meaningful reevaluation that gives Whitmore a fair opportunity to compete — and to prevail — on the merits. Whitmore's $17.4 million price advantage (4.82% lower than Halcyon's evaluated price of $361.2 million) is substantial and will be difficult for the SSA to overcome in a properly documented best-value tradeoff absent clear, articulable technical discriminators of significant value. Whitmore's strong ratings on key subfactors — "Outstanding" on System Design & Integration (Factor 1(a)) and ITAR/Export Compliance (Factor 3(c)) — position the company well against Halcyon across the evaluation scheme. The principal risk to Whitmore is a narrowly scoped corrective action that permits the agency to reach the same result with improved documentation but without genuinely curing the process errors identified by GAO.
We recommend that this memorandum be discussed with the full engagement team at the earliest opportunity and that a client call be scheduled with Donald R. Stokes and Marcus J. Whitmore to review the monitoring strategy, communicate the specific client advisories regarding proposal team readiness and documentation updates, and discuss the contingency scenarios outlined herein. A suggested date for the client call is the week of February 5–9, 2024, coordinated with the transmission of the letter to Captain Hargrove.
This memorandum will be updated as developments warrant. The next scheduled update is anticipated for the week of February 19, 2024, or upon the occurrence of any significant event, whichever is earlier.
Lt. Col. (Ret.) Nathan Yardley Of Counsel, Government Contracts Practice Group Calderwood & Harkness LLP 1750 K Street NW, Suite 1100 Washington, D.C. 20006
Distribution: Claudia Merritt (Responsible Partner); Sara Hendricks (Associate); Megan Zhao (Associate); Ian Blackwood (Litigation Group — for information only)
Filed: Matter No. 1019-00003
Factor / Subfactor | Whitmore Aerospace | Halcyon Defense Systems
Factor 1: Technical Approach (Overall) | Good | Outstanding
1(a) System Design & Integration | Outstanding | Outstanding
1(b) Manufacturing Readiness | Acceptable | Outstanding
1(c) Test & Evaluation Plan | Good | Good
Factor 3: Management Approach (Overall) | Good | Good
3(a) Program Management | Good | Good
3(b) Supply Chain Risk Management | Good | Acceptable
3(c) ITAR/Export Compliance | Outstanding | Good
Milestone | Estimated Date | Actual Date | Status | Notes
1. Air Force notification to GAO of intent to comply | Feb. 5, 2024 | — | Pending | Expected imminently
2. Contracting Officer issues Corrective Action Determination memorandum | Feb. 9–16, 2024 | — | Pending | Internal agency document; may not be shared with offerors
3. SSEB reconvened for reevaluation | Feb. 12–23, 2024 | — | Pending | Chaired by Dr. Fenn
4. Discussions reopened (if applicable) | Feb. 19 – Mar. 1, 2024 | — | Pending | Critical step re: Ground 2
5. Revised FPRs requested (if applicable) | Mar. 1–8, 2024 | — | Pending | Response period ~10–14 days
6. New SSDD issued by SSA | Mar. 18–25, 2024 | — | Pending | BGen Jeffcoat
7. New award decision / notification to offerors | Mar. 22–28, 2024 | — | Pending | Debriefing request to follow
8. 60-day deadline | Mar. 29, 2024 | — | Tracking | Hard target
No. | Action Item | Responsible Attorney | Target Date | Status
1 | Prepare letter to Capt. Hargrove regarding scope of corrective action | Claudia Merritt / Nathan Yardley | February 10, 2024 | In progress
2 | Submit certified protest cost claim to Contracting Officer | Claudia Merritt / Sara Hendricks | February 7, 2024 | In progress
3 | Monitor for Air Force notification to GAO of intent to comply | Nathan Yardley | Ongoing (expected by Feb. 5, 2024) | Pending
4 | Monitor COFC docket for Halcyon filing | Megan Zhao | Ongoing through March 29, 2024 | Pending
5 | Advise client to maintain proposal team readiness and update documentation | Claudia Merritt | February 5, 2024 | Pending
6 | Send follow-up inquiry to agency counsel on reevaluation timeline | Nathan Yardley | Late February 2024 | Not yet due
7 | Assess need for co-counsel if COFC litigation arises | Claudia Merritt / Ian Blackwood | As needed | Contingent
8 | Track 60-day corrective action deadline | Nathan Yardley | March 29, 2024 | Tracking
Item | Amount
Engagement letter fee cap | $425,000.00
Total fees billed through protest (as of Jan. 31, 2024) | $347,216.50
Remaining fee cap balance | $77,783.50
Estimated monitoring phase fees (15–25 hours) | $12,000 – $20,000
Estimated remaining cap space after monitoring phase | ~$57,000 – $66,000

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

MEMORANDUM

MATTER/ENGAGEMENT NO.: 1019-00003

I. PURPOSE AND EXECUTIVE SUMMARY

III. KEY DEADLINES AND MILESTONES

V. POTENTIAL RISKS AND CONTINGENCIES

VI. COMMUNICATION STRATEGY

VIII. ACTION ITEMS AND ASSIGNMENTS

IX. POTENTIAL NEED FOR ADDITIONAL PROTEST

X. BUDGET CONSIDERATIONS

XI. CONCLUSION AND RECOMMENDATION

Record

Parties

Dates

Amounts