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Supreme Foodservice Wins Protest of $10 Billion U.S. Award

Oct. 25 (Bloomberg) -- Supreme Foodservice AG won a protest seeking to overturn the awarding to a competitor of a $10 billion U.S. military contract for the distribution of food products in Afghanistan.

The U.S. Government Accountability Office, Congress’s investigative arm and an arbitrator of contract disputes, publicly released its decision on the almost six-year contract yesterday.

The agency agreed in part with the Amsterdam-based company’s argument that the Defense Logistics Agency’s competition, which originally resulted in an award to Dubai-based Anham FZCO, was flawed.

“We recommend that the agency reevaluate Supreme’s and ANHAM’s proposals in a manner that is reasonable and consistent with the solicitation’s evaluation criteria and this decision,” the GAO said. “If ANHAM’s proposal is not found to offer the best value to the government, the agency should terminate ANHAM’s contract.”

Supreme challenged the defense agency’s rating of its competitor’s past performance and said that its evaluations of the two proposals were inconsistent and unreasonable, according to the decision.

“DLA needs to do a partial reevaluation of the proposals,” Mimi Schirmacher, an agency spokeswoman, said in an e-mail. The DLA then will perform a “new trade-off analysis” to determine which represents the best value to the government, she said.

Stay Continues

“GAO did not agree with Supreme on all of the allegations raised in the protest,” she said. A stay issued by the DLA on the performance of the contract following the filing of the protest will remain in effect, Schirmacher said.

“We are pleased by the GAO decision,” Victoria Frost, a Supreme spokeswoman, said in an e-mail. “We are optimistic that DLA will recognize Supreme to be the organization best able to supply the food, water and other materials required for the troops in Afghanistan.”

Anham “has a long track record of conducting large scale, successful operations in the most demanding conditions and we look forward to building upon this legacy of exceptional service to American taxpayers and the United States Government,” Sam Fabens, a spokesman for Anham at the public relations firm Vox Global in Washington, said in an e-mail.

The solicitation for the work was issued April 26, 2011, and amended 12 times, according to the GAO decision. The military sought a food distributor to act as the prime contractor responsible for supplying and delivering semi-perishable and perishable items to the military and other federally-funded customers at more than 200 locations throughout Afghanistan.

To contact the reporter on this story: Danielle Ivory in Washington at divory@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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