The Navy can reopen a $746 million competition for the operation of its ocean surveillance and range instrumentation ships, after the Government Accountability Office rejected the awardee's attempt to keep its win. In a decision dated Sept. 17, 2026, GAO denied the protest of Patriot Contract Services, LLC (B-424516.2, B-424516.3). The ruling affects every offeror in the Military Sealift Command (MSC) competition, because all offerors in the competitive range now get a chance to revise their proposals.
The solicitation, RFP N3220524R4070, covers operation and maintenance of the Navy's T-AGOS ocean surveillance ships and T-AGM range instrumentation ships. Patriot did not protest a loss. It protested the Navy's decision to take its own award apart.
How Did a $746M Award End Up Back in Discussions?
The Department of War's April 27, 2026 contract announcement, mirrored by GlobalSecurity, listed Patriot Contract Services LLC as the winner of a $746,045,386 firm-fixed-price award-fee contract, N3220526C4070. The announcement said the work was solicited as a total small business set-aside and that "four proposals were received." It describes a 12-month base period, four 12-month options and a six-month option under FAR 52.217-8, which would carry the work to 2032 if the Navy exercised everything. It also reports $18,165,081 in FY2026 working capital funds obligated at award.
GAO's decision says that on April 28, 2026, MSC notified KIRA Information Solutions, LLC that award had been made to Patriot. KIRA then filed its own protest, asserting that Patriot made a material misrepresentation in its proposal and that the agency unreasonably evaluated price and technical risk generally.
The Navy responded with corrective action rather than defending the award. It said it would re-open discussions, issue updated evaluation notices to all offerors in the competitive range, amend the solicitation to correct and clarify proposal instructions and evaluation criteria, request final revised proposals, reevaluate, and make a new source selection decision. That decision could reaffirm Patriot's award or put the contract in another offeror's hands.
Patriot then protested the corrective action. It argued that MSC "had not identified any prejudicial impropriety in the evaluation or award that warranted this expansive corrective action."
The Navy's Four Reasons for Reopening
According to GAO's account, the Navy documented several reasons for the redo, and they go well beyond the allegations in KIRA's protest. GAO summarized them as "potential impacts to offerors' pricing due to a variety of events and a variety of issues with the non-price proposals as submitted."
Stale prices. GAO wrote that "the record shows that final revised price proposals were submitted back in October 2025." By the time of the April award and the corrective action that followed, those prices were months old.
A pending wage determination. The Navy told GAO that a new Department of Labor wage determination will be issued and will affect wages. On a labor-heavy services contract, a new wage determination changes what a realistic price looks like.
The Strait of Hormuz. The Navy said recent events in the Strait of Hormuz had unanticipated impacts on civilian mariner compensation. T-AGOS and T-AGM ships are crewed by civilian mariners, so a shift in what those mariners are paid reaches directly into the cost of performance.
Evaluation errors outside price. The Navy identified errors in its own evaluation of the non-price factors. These included a failure to evaluate offerors' compliance with FAR clause 52.219-8(b), which concerns procedures for timely payment to small business subcontractors. They also involved Coast Guard paperwork: the solicitation required "no-sail" CG-835s and contract deficiency reports from the prior three years, and GAO recorded that Patriot's past performance proposal failed to attach them.
Why GAO Sided With the Navy
GAO started from a settled principle. In the decision's words, "Agencies have broad discretion to take corrective action where the agency has determined that such action is necessary to ensure fair and impartial competition." The question was not whether the Navy's original award could have survived. It was whether the Navy had a reasonable basis to start over.
GAO found that it did. It concluded that the record showed the Navy "did not waive material requirements and that there are numerous serious errors in the evaluation of the non-price factors." Its closing line was short: "The protest is denied."
The ruling shows how far agency discretion extends. Patriot argued that the corrective action was too expansive, and in a narrow sense the Navy did go beyond KIRA's allegations. It reopened the competition partly because of pricing conditions and its own evaluation mistakes, not only because of KIRA's misrepresentation claim. GAO's decision indicates that an agency may fix the problems it finds in a procurement once it decides to take corrective action, rather than limiting the fix to what the original protester raised.
What Happens to the $746M Competition Now?
The protest denial clears the way for the steps the Navy described. MSC will hold discussions with the offerors in the competitive range, amend the solicitation, and request final revised proposals. The Navy will then reevaluate and issue a new source selection decision. The decision could name Patriot again or someone else.
One detail in the record is unsettled. GAO describes Patriot as a small business of Houston, Texas, while the Department of War's contract announcement lists Patriot in Concord, California. The two sources disagree, and this article does not resolve it.
What It Means for Contractors
For awardees, the lesson is that winning an award and defending a corrective action are different fights. GAO reviews corrective action for reasonableness, and an agency with a documented reason has wide latitude. Patriot lost this round at GAO, and its award now depends on the reopened competition.
For competitors in the range, the ruling reopens a procurement that looked closed. Offerors get another chance to price against current labor conditions. Anyone bidding crewed-vessel work should assume that wage determinations and mariner compensation can move between proposal and award, and that an agency may treat months-old prices as too old to rely on.
Small business offerors should note the FAR 52.219-8(b) finding. The Navy's own evaluation failed to examine procedures for timely payment to small business subcontractors, and that gap contributed to the redo. Proposals on set-aside work should document subcontractor payment practices clearly enough that the evaluator cannot skip them.
Offerors should also confirm their past performance volumes attach every required Coast Guard document, including CG-835s and contract deficiency reports. Patriot's proposal was recorded as missing them.
Finally, for any awardee facing a corrective action, the practical advice is to prepare for the reopened competition rather than rely on a protest to stop it. GAO's denial means the revised proposal deadline is the next event that matters.
