Virtual Border Fence Project Halted After Raytheon Protest

A prototype of a tower for a virtual fence along the U.S.-Mexico border at a test facility in Playas, N.M.

A prototype of a tower for a virtual fence along the U.S.-Mexico border at a test facility in Playas, N.M. U.S. Customs and Border Protection/AP

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GAO: DHS 'prejudiced' the contract during a botched competition for the $145 million surveillance project.

A major border security project involving the deployment of 50 surveillance towers across southern Arizona is temporarily on hold, following a protest by Raytheon that the government improperly awarded the work to a rival.

In a protest decision released Thursday afternoon, the Government Accountability Office ruled the Department of Homeland Security should reevaluate the competitors' proposals. Among other things, it is possible Raytheon was "prejudiced by the agency’s errors" during an evaluation of proposals, the ruling stated.

U.S. Customs and Border Protection -- part of DHS -- had planned to initially build seven towers during the first year of a potentially 8 and 1/2 year, $145 million deal with vendor EFW, of Fort Worth, Texas. The contract was awarded in February, after a two-year competition among 14 companies. 

GAO General Counsel Susan Poling wrote in her decision DHS should "make a new source selection decision based on that reevaluation. Should the agency conclude that a concern other than EFW properly is in line for award, we recommend that the agency terminate the contract awarded to EFW, and make award to the new concern."  

CBP will Take Action by August

On Friday, CBP spokeswoman Jenny Burke told Nextgov: "GAO has recommended we take corrective action on a fairly narrowly defined set of issues. CBP intends to follow that recommendation and then re-assess our contract award decision. We hope to complete the corrective action by early August."

She declined to comment on whether any of the seven towers is operational.

Raytheon challenged the award on several grounds, including that EFW got credit for the past performance of an affiliated company that will not be working on this contract. 

Border security is a key point of contention between the Obama administration and Republicans, as the government tries to stem an influx of migrants fleeing violence in Central America. Texas Gov. Rick Perry this week announced he is dispatching 1,000 National Guard troops to the border to deal with the crisis. 

If DHS cancels the EFW contract, it would be the second time the department has had to change course on a virtual fence initiative. The goal has long been to erect a series of towers flanked by networked radars and cameras to detect drug trafficking, human smuggling and other illicit activity.

Originally, a project called the Secure Border Initiative network, or SBINet, was awarded to Boeing in 2006. DHS terminated the contract in 2011, after realizing the department had invested $1 billion in an unworkable concept. The technical specifications couldn’t be achieved without development delays, cost overruns and camera performance problems, DHS concluded.

This time, the department opted for scaled back, already-developed technologies that are proven to work in desert conditions. Functioning SBInet towers in Tucson and Ajo, Arizona, will remain.

GAO: Raytheon Has Price Advantage

GAO lawyers said Raytheon might win the project if DHS reassess the proposals, citing "identified errors" and the company's million-dollar price advantage over its competitor -- although GAO redacted specific figures from the ruling. Given that, "it is possible that a best-value tradeoff decision might differ following a revised evaluation," Poling said.

For example, the agency’s comparison of each contractor's infrared camera systems lacked "a rational basis and evidences unequal treatment of offerors," she said. The department counted EFW’s enhanced digital image capability as a strength in two categories, while only counting Raytheon’s special high-resolution camera feature once. Also, the department's determination that EFW's technology "effectively reduced the amount of on-screen clutter finds no clear support in the record," Poling said.

EFW did not respond to a request for comment. 

In an emailed statement, Raytheon said the company is pleased with GAO's decision.

"As we’ve stated previously, Raytheon is confident in the solution it proposed and we look forward to working with the Department of Homeland Security on the next steps in response to the GAO decision," the company said in the statement.