In the matter of L3Harris Technologies Integrated Systems L.P., the Government Accountability Office (GAO) denied a protest filed by L3Harris challenging the U.S. Army’s award to Sierra Nevada Company, LLC for the Army’s HADES (High Accuracy Detection and Exploitation Systems) aircraft effort.
GAO concluded that the Army reasonably found L3Harris’ proposal technically unacceptable under the solicitation and also held that Sierra Nevada remained eligible for award even though it converted from Sierra Nevada Corporation to an LLC while the procurement was underway.
Background
The protested contract covers testing, production, initial operation, and related services for the Army’s HADES ISR aircraft, with an initial award for one aircraft and options that could extend to as many as 14 aircraft for an estimated total value of $991.3 million. After an initial security assessment phase, the competition narrowed to two offerors, L3Harris and Sierra Nevada. The Army ultimately rejected L3Harris’ proposal as technically unacceptable based on deficiencies under the solicitation’s design and integration approach requirements and then awarded to Sierra Nevada as the only remaining eligible offeror.
L3Harris subsequently challenged Sierra Nevada’s eligibility by arguing that Sierra Nevada Corp. effectively “ceased to exist” before bidding because the company converted from a corporation to a limited liability company under state law. As described in the decision, Sierra Nevada sought to convert at the start of September 2023, did not receive formal approval from the state of Nevada until October, and continued to submit and act under the corporate name while its conversion and name-change steps were being processed and recognized for federal contracting purposes.
Why GAO Ruled the Way It Did
GAO’s denial rested on two core conclusions. First, GAO found the Army reasonably enforced the solicitation’s proposal instructions and evaluation criteria when it deemed L3Harris technically unacceptable. GAO credited the Army’s view that L3Harris failed to provide required materials in the specific locations the solicitation required, including a required diagram that L3Harris argued appeared elsewhere and an electrical load analysis that the agency determined was not included where required and was not actually present in the form L3Harris claimed. GAO also rejected unequal treatment arguments where the Army explained that the proposals were substantively distinguishable and Sierra Nevada provided more complete information responsive to the solicitation’s requirements.
Second, GAO rejected L3Harris’ argument that Sierra Nevada was ineligible because it “ceased to exist” after converting to an LLC. GAO pointed to Nevada law treating a conversion as a continuation of the legal entity rather than a dissolution, and GAO concluded the statutory framework supported the Army’s and Sierra Nevada’s position that the company continued to exist through the conversion in a different legal form. GAO also accepted that Sierra Nevada’s approach to bidding under its corporate name while awaiting formal state approval and federal recognition did not create an eligibility defect, particularly where the company followed the applicable process for notifying the Defense Contract Management Agency (DCMA) and transitioning its name and structure within the government’s contracting systems. GAO held it was reasonable for the company to bid and continue to act under the previous name until its change to an LLC was formally recognized.
Looking Ahead
For contractors, the decision reinforces that corporate conversions and name changes can be managed during an active procurement without automatically jeopardizing eligibility, but only if companies conduct due diligence and notify the appropriate parties.
In practice, that means aligning proposals and representations with how the entity is recognized in federal systems at the relevant time, promptly initiating the FAR and DCMA name-change process once state documentation is available, and ensuring continuity is maintained and is clearly tied to the offeror throughout the competition.
For protesters, the decision shows that “nonexistent entity” theories are unlikely to succeed absent a concrete record showing the agency actually awarded to a different legal entity, that the conversion introduced ambiguity about the offeror’s identity, or that the awardee failed to follow the government’s recognition requirements in a way that mattered to the procurement.
Finally, on the evaluation side, the case is another reminder that GAO will generally back agencies that enforce solicitation instructions as written, especially where missing or mislocated required content drives a technical unacceptability finding.
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