Navy unfairly evaluated Saildrone MUSV proposal, court finds

PARIS — The US Navy unfairly evaluated maritime drone manufacturer Saildrone’s proposal for the service’s medium unmanned surface vessel (MUSV) program, according to a ruling from the US Court of Federal Claims. 

As a result, the Navy must reevaluate Saildrone’s proposal within the next two months, and is barred from spending a large chunk of its MUSV budget until that process is complete.

Saildrone and maritime tech startup Blue Water Autonomy filed lawsuits in June challenging the Navy’s decision to eliminate their respective proposals — Saildrone’s Spectre and Blue Water Autonomy’s Liberty — from the MUSV competition. The companies argued that their platforms met the Navy’s requirements for the MUSV marketplace, which launched in March, and that the service didn’t stick to its own evaluation guidance in the request for proposals (RFP).

“The Court finds that the Navy engaged in disparate treatment, and thus, acted in an arbitrary and capricious manner in its review of Saildrone’s proposal,” Judge Philip Hadji wrote in his opinion, which was originally issued Oct. 30 and publicly released on Wednesday. 

The Navy originally disqualified Saildrone from advancing to on-water testing due to discrepancies between the company’s proposal and a summary document known as a J-8 Placemat, which is related to the maximum displacement of the design. The opinion said the Navy “eliminated Saildrone because its Placemat reported loaded displacements exceeded the stated maximum displacement.”

However, the court determined that Saildrone received disparate treatment compared to other firms because the Navy advanced a proposal from Sea Machines despite similar issues involving maximum displacement. It’s unclear which Sea Machines vessel — either the Steamracer of the Steamrunner — the Navy evaluated, the opinion said. However, the court noted that the distinction did not affect its finding.

“Because the Navy accepted from Sea Machines a Placemat that either reported both payload-condition displacements above the stated ‘Max Displacement,’ as Saildrone’s did (STEAMRUNNER), or left those fields blank (STEAMRACER), the Court finds the Navy’s subsequent treatment of the proposals disparately favored Sea Machines and arbitrarily held Saildrone to a higher standard,” the opinion said.

Under the ruling, the court ordered the Navy to reevaluate Saildrone’s proposal within 60 days, applying the same evaluation approach it used for companies that advanced in the competition. The ruling also prohibits the Navy from relying on its previously withdrawn findings under two other evaluation criteria to eliminate Saildrone.

The court also barred the Navy from spending more than $1.5 billion of the $2.1 billion allocated for the program on production until it completes that reevaluation.

A US Navy spokesperson told Breaking Defense that it will comply with the court’s order and reevaluate Saildrone’s proposal to determine if it will qualify for on-water testing.

“The future of naval warfare will be fought on the water, not in a courtroom,” Richard Jenkins, Saildrone’s founder and CEO, said in a statement on Monday. “We are eager to move beyond this litigation and return our entire focus to delivering world-leading maritime autonomy for the US Navy, to help secure America’s future maritime dominance. This ruling is a win for fair competition, for taxpayers, and for national security.”

Blue Water Ruling

However, Hadji reached a different conclusion regarding Blue Water Autonomy, determining that “the Navy reasonably rated Blue Water unacceptable.” 

The service eliminated the company from the competition for several reasons, including because it claimed that Blue Water’s test vessel — a twin-hulled catamaran — was not “representative” of its production vessel, an axe-bow monohull.

However, Blue Water Autonomy argued that the Navy deviated from its own evaluation requirements because “[h]ull and machinery plants are not listed as assets to be evaluated in the testing.”

The court disagreed, and the opinion said that “the Court concludes that ‘representative’ unambiguously calls for comparing the test vessel with the production vessel,“ and noted that the solicitation did not exclude hull form or propulsion architecture from that comparison.

Even so, Austin Gray, co-founder and chief strategy officer at Blue Water Autonomy, said in a statement to Breaking Defense that “nothing about the test vessel was core to our technology, our ship, or our product.”

Gray also said the Navy has made positive changes in Phase II of its MUSV program the service unveiled in September.

For example, Phase I required proposals to travel 2,500 nautical miles at 25 knots in sea state 4 conditions with a payload capacity of two 40-foot containers. In contrast, Phase II requires that proposals include a payload capacity of at least two standard 20-foot shipping containers and eliminates the high-speed requirement. 

“The Navy’s new leadership team has already leaned ahead and fixed problems highlighted by the protest,” Gray said. “The Medium USV Phase II program steers away from the prescriptive, compliance-centric testing rules of the previous competition, a change made by thoughtful Navy acquisition professionals months ago.”

Christopher Miller, Direct Reporting Portfolio Manager for robotic and autonomous systems (DRPM RAS) recently acknowledged some difficulties that Phase I requirements presented for industry. He said the Navy wants to “open the aperture” for new entrants and increase options for other services that may be interested in the capabilities. 

“What I’m trying to do is also give more industry opportunities for companies that have something ready to go,” Miller told reporters in September. “Obviously with Phase I, there were some more challenging requirements that they had to meet, and so I’m trying to back off of those so that I can have a healthy, competitive industrial base and really use that to help us identify near-term opportunities to meet our operational demands.”