Lockheed rebuked - hearing excerpts

December 6, 1996
By Peter Samuel

Lockheed rebuked - hearing excerpts

Originally published in issue 10 of Tollroads Newsletter, which came out in Dec 1996.


Subjects:protest complaint

Facilities:NJ New Jersey Turnpike



Poor Lockheed —  a public flogging

Edward Gross actg chief exec. of the New Jersey Turnpike held a formal hearing lasting several days on Lockheed's compaint against New Jersey (NJ) Transp. Commissioner Frank Wilson and the state's conduct of the e-toll acquisition early November. Gross issued his finding Nov 15, in a 44 page document. Highlights of the NJ finding:

• "This RFP is not the run of the mill, garden variety RFP (request for proposal) regularly issued by public agencies. It is performance-driven thus encouraging the prequalified vendors to provide creative and innovative approaches for building, integrating and operating an ETC (electronic toll collection) system. It encourages cost-saving techniques and invites options outside of the core project which reduce cost and/or generate revenue for the consortium. Finally it provides for direct negotiation after the initial proposal review and acceptance, and therefore an opportunity for the proposers to submit best and final offers. The RFP can best be described as a public/private dialog with each proposer to achieve the best ETC system at the least cost to the consortium. It is not a rigid specification-driven and dictatorial RFP as is commonly issued by most public agencies." (p6)

• "Lockheed considers itself the dominant and most qualified entity in the nation to build, integrate and operate an ETC system. In contrast it acknowledges its lack of expertise in the telecommunications field...Lockheed's objective was to persuade the NJ toll roads not to allow fiber optics as part of its ETC procurement." (p8)

• "Lockheed asked if fiber would be a permissible option...Paul Carris, (NJ) ETC program manager said any option that reduces cost and/or generates revenue may be proposed....(At the protest hearing Lockheed) offered testimony which was contradictory and evasive." (p11)

• "...(If) Lockheed elected to develop a team only capable of a minor fiber proposal either through a flawed interpretation of the RFP terms or as a result of its own self-confidence that no competitor could possibly be its equal...then it must only look within its own board room to establish fault for its current belief that its proposal is inferior ro that (of) MFS." (p12)

• "If Lockheed has failed to provide the proposal that the consoritum accepts as its "best value" it has only itself to blame. Public entities have a fiduciary responsibility to...expend the public funds in the most judicious manner. Lockheed serves its own bottom line. Its judgment on its dominance and superiority in this industry is for the public entities to evaluate. To find against Lockheed does not create a flawed procurement process." (p15

• "The apparent inconsistency in Lockheed's current position, compared to its position in July can only result from its present perception that it will not be awarded the contract. To permit a proposer to await a contract award before protesting...is funadamentally against the public interest." p23

• "No formal site visits (complaint):...It is not Lockheed who establishes the evaluation procedure....ETC staff visited Lockheed's ETRC operation in Georgia. The extent of site visits and software demonstration is not the subject of a legitimate protest..." (p27)

• "An administrative error caused Lockheed to receive MFS's questions and MFS to receive Lockheed's questions...Neither party filed a (regular) protest (until Lockheed's letter of Oct 21) (p28)

• "Lockheed contends (a NJDOT consultant) is lying. (This) represents a desperate eleventh hour effort to salvage a perceived loss of contract..." (p32)

• "Lockheed and MFS were on an equal basis regarding the submission of a fiber option. Lockheed elected to file a minor fiber proposal. If as MFS, as Lockheed suspects, submitted a major fiber proposal, and obtains the contract, Lockheed has only itself to blame." (p33)

• "...Once again Lockheed seeks to cast blame on everyone but itself for its perceived loss of the (contract)." (p34)

• (NJ Commissioner Frank Wilson) discussed only administrative procedure and policy matters. He never discussed any matter associated with the evaluation of the proposals. He was diligent and circumspect in bhis behavior. He was absolutely faithful to his voluntary recusal...(He) could not, and did not, have any negative impact on Lockheed's proposal... The procurement process is untainted." (p40)

• "Lockheed could have called Commissioner Wilson as a witness. It did not do so. Thus drawing a negative inference from (his) failure to appear...is inappropriate." (p41)

• "The effect of Lockheed's baseless charges against (Wilson) caused a public questioning of (his) integrity. Irrespective that this decision fully exonerates him (he) will not go unscarred...Lockheed's charges...without any supporting evidence only add to public cynicism. (He) will continually battle to preserve his reputation (whereas) Lockheed will just move on to another procurement. There appears to be significant inequity in this result." (p43)

• "Conclusion: Lockheed has failed to offer credible testimony to support any element of its protest. The procurement process should proceed...Accordingly the stay of award...is rescinded." (p44) Copies available: 908 247 0900

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