Improperly crushed grain is the most likely culprit when OG is low. Next in line would be incorrect volumes and poor process including temperature control, pH, etc.
His process doesn't sound far removed from what i do as a BIABer. My sparge is essentially a pour over sparge(water runs straight through, no sitting, stirring, vorlauf etc and I mash with fairly typical grain/water ratios unlike most BIABers) and I never end up with low OG. If he's pouring water into the tun and letting it sit for any amount of time before draining he should be fine. Stirring and vorlaufing would also help.
To diagnose any further we'd need better info. 12 lbs of what? if strike was 170 what was mash temp? Volume of mash and strike used? etc
The strike temp is too high and could be of concern but I'd still place my bet on crush.