Bona Fide Conglomerate, Inc. v. SourceAmerica et al

Filing 621

ORDER Granting in Part and Denying in Part 527 SourceAmerica's Motion for Summary Judgment or, Alternatively, Partial Summary Judgment. Signed by Judge Gonzalo P. Curiel on 3/26/19. (dlg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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BONA FIDE CONGLOMERATE, INC.,

Case No.: 3:14-cv-00751-GPC-AGS

Plaintiff,

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v.

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ORDER GRANTING IN PART AND
DENYING IN PART
SOURCEAMERICA’S MOTION
FOR SUMMARY JUDGMENT OR,
ALTERNATIVELY, PARTIAL
SUMMARY JUDGMENT

SOURCEAMERCA; PRIDE
INDUSTRIES, INC.; KENT, CAMPA &
KATE, INC.; SERVICESOURCE, INC.;
JOB OPTIONS, INC.; GOODWILL
INDUSTRIES OF SOUTHERN
CALIFORNIA; LAKEVIEW CENTER,
INC.; THE GINN GROUP, INC.;
CORPORATE SOURCE, INC.; CW
RESOURCES; NATIONAL COUNCIL
OF SOURCEAMERICA EMPLOYERS;
and OPPORTUNITY VILLAGE, INC.,

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Defendants.

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[ECF No. 527]

SOURCEAMERICA,
Counterclaimant,
v.
BONA FIDE CONGLOMERATE, INC.;
and RUBEN LOPEZ,
Counterdefendants.

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Pending before the Court is defendant SourceAmerica’s July 13, 2018 motion for

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summary judgment or, alternatively, partial summary judgment on Plaintiff Bona Fide

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Conglomerate’s tenth cause of action—breach of contract. (ECF No. 527.) The motion

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has been fully briefed. (ECF Nos. 555, 579.)

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Relevant to the disposition of this motion are the parties’ dueling Daubert motions

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to exclude each others’ expert witnesses. Both parties have designated experts to opine

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on Bona Fide’s claim that SourceAmerica breached the 2012 Settlement Agreement

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(“Settlement Agreement”) in its recommendations of Non-Profit Agencies (“NPAs”) for

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Opportunities within the federal government’s AbilityOne procurement program. Bona

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Fide’s motion to exclude SourceAmerica’s expert, Mary Karen Wills (ECF No. 561), has

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been granted in part and denied in part (ECF No. 620), and SourceAmerica’s motion to

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exclude Bona Fide’s expert, Kevin M. Jans (ECF No. 521), and its related motion to

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strike parts of his declarations (ECF No. 575), have also been granted in part and denied

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in part. (ECF No. 620.) The discussion below incorporates only those parts of the

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experts’ analyses that remain as a result of the Court’s order.

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The Court held a hearing on this motion on November 16, 2018. At that hearing,

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the Court issued a tentative ruling with respect to contract interpretation, breach, and

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causation. Thereafter, Bona Fide requested, and was granted leave to file supplemental

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briefing on the issue of proximate cause. (ECF Nos. 594 (Ex Parte Motion for Leave to

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File Supplement); 600 (Order Granting); 604 (Supplemental Briefing)). SourceAmerica

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was given an opportunity to rebut the supplemental papers. (ECF No. 607.)

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Having considered the applicable law and the parties’ arguments, the Court will

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GRANT IN PART AND DENY IN PART SourceAmerica’s motion for summary

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judgment. The Court will construe the Settlement Agreement as a matter of law, and

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using that interpretation, grant summary judgment with respect to Opportunities Nos.

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1692, 1944, 2075, 2161, 2379, and 2318. Summary judgment will be denied as to

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Opportunities 1483, 1741, 2693, 2705, and 2783. (ECF No. 527.)1

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I.

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PROCEDURAL AND FACTUAL BACKGROUND
Because much of the factual background of this case is familiar to the parties, the

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Court will provide a summary of only the facts relevant to Bona Fide’s breach of contract

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claim.

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A. General Background on AbilityOne and SourceAmerica

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The AbilityOne Program is a public-private procurement system designed to fulfill

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the objectives of the Javits-Wagner-O-Day (“JWOD”) Act, 41 U.S.C. § 8501 et seq., by

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requiring federal agencies to purchase select products and services from Non-Profit

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Agencies (“NPA”s) that provide employment and training opportunities for persons who

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are blind or have severe disabilities. 41 C.F.R. § 51-1.1. The AbilityOne Program is

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administered by the AbilityOne Commission (“AbilityOne Commission”)2, an

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independent federal agency which operates under the federal regulations at Federal

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Acquisition Regulation (“FAR”) 8.7 (“Acquisition from Nonprofit Agencies Employing

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People Who Are Blind or Severely Disabled”), and the AbilityOne Program-specific

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requirements at 41 C.F.R. Chapter 51 (“Committee for Purchase from People Who Are

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Blind or Severely Disabled”).

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SourceAmerica is one of two national organizations designated by the AbilityOne
Commission as a Central Nonprofit Agency (“CNA”). As a CNA, SourceAmerica assists

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The Court has considered all of the arguments presented in connection with the foregoing
motion, even those not discussed in this Order. If an argument is not explicitly addressed, the parties
may assume that it has been rejected. Specifically, the Court rejects SourceAmerica’s argument that it is
entitled to derivative sovereign immunity under Campbell-Ewald Co. v. Gomez, --- U.S. ----, 136 S. Ct.
663 (2016). As Bona Fide point outs, that case narrowly circumscribed the derivative immunity
available to government contractors, and in addition, was decided upon the contractor’s tortious conduct.
SourceAmerica has not provided support for the notion that derivative immunity can apply to breach of
contract claims.
The parties also have submitted reams of evidentiary objections. To the extent that the objectedto evidence is admissible, the Court has considered it; to the extent that it is inadmissible, the Court has
ignored it.

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The AbilityOne Commission was previously known as the AbilityOne Committee.
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NPAs participating in the AbilityOne Program, “functions as a technical evaluation panel

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and makes recommendations to the Commissions on the qualifications and abilities of

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prospective nonprofit agencies to perform the work.” Nat’l Telecommuting Inst., Inc. v.

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United States, 123 Fed. Cl. 595, 598 (2015). Under the Nonprofit Agency

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Recommendation Process, SourceAmerica designs and publishes Opportunity Notices, or

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Sources Sought Notices (“SSNs”), to the NPAs for consideration and response.

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First, SourceAmerica communicates with the procuring government agency, i.e.,

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the federal customer, about its need for a particular service, whether it is for grounds

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maintenance, or IT, or custodial services. Then, based on those inputs, SourceAmerica

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crafts Opportunity Notices, which communicate to NPAs the particular scope and

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requirements of the service sought. Each Opportunity Notice includes a description of

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the requirement, the estimated dollar value, and any special requirements or preferences

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of the federal contracting agency that will award the contract. Sometimes, Opportunity

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Notices will require responding NPAs to possess certain certifications, like security

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clearance. Other times, they will express preferences for NPAs with geographic

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experience, or other such criteria. By and large, most Opportunity Notices ask the

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responding NPA to provide a detailed account of their financial sustainability, and to

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discuss their past performance of similar services.

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After collecting responses from interested NPAs, SourceAmerica assesses the

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NPAs’ proposals for their ability to perform the service requested and the thoroughness

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of their response. Based off of its appraisal, SourceAmerica selects one NPA to

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recommend to the AbilityOne Commission for approval. With rare exception, the

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AbilityOne Commission will generally accept SourceAmerica’s recommendation as the

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contractor. The entirety of this process has been interchangeably referred to by the

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parties as the source-selection process, the acquisitions process, the NPA

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recommendation process, among other things.

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SourceAmerica’s involvement in the NPA recommendation process is guided by
policies and regulations from several different sources. First are the policies promulgated
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by the AbilityOne Commission. Those policies require SourceAmerica to “develop

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processes for project assignment and order allocation that result in fair, equitable, and

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transparent distribution of opportunities among NPAs, taking into account the unique

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mission and objectives of the AbilityOne Program.” AbilityOne Policy 51.301(6)(a)

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(approved May 30, 2012). They also mandate that SourceAmerica make its assignment

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and allocation decisions based on the following criteria:

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i.

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NPAs that can meet the customers’ technical and delivery requirements, while
maximizing labor hours for people with significant disabilities;

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The CNAs shall consider the impact of project assignment or allocation on
establishment and sustainment of employment of people who are blind or who
have other significant disabilities in the AbilityOne Program.

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CNAs shall consider qualitative and quantitative factors in making a decision.

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a. CNAs shall implement criteria that include the following minimum
standards for NPAs to be eligible for an assignment or allocation:

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1. NPA(s) must be in good standing in accordance with the CNA’s
policies and the definition herein.

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2. NPA(s) must be capable of providing all contractual requirements by
the Government-established date of performance.

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3. NPAs must agree to fulfill all legal requirements of the contract, to
include flow-down clauses.

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4. NPAs shall properly document all subcontracts, acknowledging
within them the Commission's authority regarding both
subcontracting policy and determination of the fair market price.
5. NPA(s) must have appropriate financial and management
qualifications related to capital intensive products and services,
including Base Supply Center (BSC) operation.
b. Special consideration may be provided in certain circumstances including,
but not limited to:
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1. NPA(s) that have lost AbilityOne work due to no fault of their own.
2. NPA(s) that have adopted the Quality Work Environment (QWE)
initiative, demonstrated by submission to their CNA of a self
assessment and current action plan.

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3. NPA(s) targeting and/or employing a significant number of
wounded warriors, service-disabled veterans or veterans with
significant disabilities.
4. NPA(s) demonstrating initiative in meeting or exceeding laws,
regulations, Executive Orders and industry standards on the
manufacture and use of environmentally preferable products.
5. CNAs will determine if special considerations are warranted. This
determination will be documented by the CNA and, upon request,
included in documents provided to the Commission for review when
products and services are being considered for addition to the
Procurement List.
AbilityOne Policy 51.301(6)(b).
In addition to the AbilityOne Policy, SourceAmerica, as a CNA, is expected to

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abide by the regulations that directly bear on the Commission. In that respect, 41 CFR §

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51-2.4 obligates SourceAmerica to consider whether the NPAs seeking recommendation

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could fulfil the requirement of “satisf[ying] the Committee as to the extent of the labor

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operations to be performed and that it will have the capability to meet Government

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quality standards and delivery schedules by the time it assumes responsibility for

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supplying the Government.” 41 CFR § 51-2.4(a)(3).

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Furthermore, FAR 1.102, which sets out the uniform policies and procedures for

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acquisition by all executive agencies, provides the guiding principles for the Federal

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Acquisition System as a whole. They state that the Federal Acquisition System will:

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(1) Satisfy the customer in terms of cost, quality, and timeliness of the
delivered product or service by, for example—
(i) Maximizing the use of commercial products and services;
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(ii) Using contractors who have a track record of successful past
performance or who demonstrate a current superior ability to perform;
and
(iii) Promoting competition;

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(2) Minimize administrative operating costs;
(3) Conduct business with integrity, fairness, and openness; and
(4) Fulfill public policy objectives.

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48 CFR § 1.102(b).
B. Prior Interactions of the Parties
Bona Fide is an NPA that has previously applied for, and obtained, a number of
AbilityOne Opportunities. Those include five custodial and grounds maintenance
contracts. As a result of several unsuccessful bids, Bona Fide sought to challenge certain
Opportunity assignments made by SourceAmerica in the Federal Court of Claims. Those
disputes resulted in the signing of the July 27, 2012 Settlement Agreement at the center
of this summary judgment motion. (ECF No. 519-4, at 7.)
In exchange for the release of Bona Fide’s claims against it, SourceAmerica
pledged, pursuant to section 1.2 of the Settlement Agreement, “to use best efforts to
provide that Bona Fide is treated objectively, fairly, and equitably in its dealings with
[SourceAmerica], with specific attention to contract allocation.” (Id.) It also committed
to “use best efforts to provide that Bona Fide is afforded equal access to services
provided by [SourceAmerica] including regulatory assistance; information technology
support; engineering, financial and technical assistance; legislative and workforce
development assistance; communications and public relations expertise; and an extensive
training program,” and to “reasonably monitor Bona Fide’s participation in the
AbilityOne Program for a period of three (3) years.” (Id.)
Since the parties entered into the Settlement Agreement, Bona Fide has submitted
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proposals for, or expressed interest in, approximately fifteen Opportunities administered

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by SourceAmerica. SourceAmerica has not recommended Bona Fide for any of these

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Opportunities, and Bona Fide has accordingly not received any of the contract awards.

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Bona Fide believes that it was punished for pursuing its prior bid protests in the

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Federal Court of Claims. (ECF No. 128, at 25.) Bona Fide’s beliefs were informed in

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part by the observations of Ms. Jean Robinson who, as the then-General Counsel for

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SourceAmerica, was tasked with monitoring SourceAmerica’s interactions with Bona

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Fide. (Id.) Ms. Robinson communicated with Ruben Lopez, Bona Fide’s CEO, about

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various abuses and conflicts of interests she observed during the course of her

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monitorship. Specifically, she explained to Mr. Lopez that SourceAmerica and certain

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other “cartel” NPAs acted in concert to pre-determine source-selection based not on

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merit, or AbilityOne procedure, but rather according to favoritism and self-interest.

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C. The Breach of Contract Claim
In 2014, Bona Fide filed a complaint in federal court against SourceAmerica and a

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number of other NPAs. As a result of protracted litigation, only one of Bona Fide’s

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original causes of action remains pending before the Court. That is Bona Fide’s breach

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of contract claim, in which it alleges that SourceAmerica had defaulted on the obligations

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in the Settlement Agreement. (See ECF No. 1, at 25 (Original Complaint), ECF No. 128,

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at 92 (Amended Complaint), ECF No. 267 (First Supplemental Complaint)).

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Bona Fide alleges that SourceAmerica breached the Settlement Agreement by (1)

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failing to treat Bona Fide objectively, fairly, and equitably in its NPA recommendation

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process; (2) subverting Ms. Robinson’s good-faith efforts to monitor Bona Fide’s

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participation in AbilityOne; and (3) not making any efforts whatsoever to provide Bona

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Fide with equal access to SourceAmerica services. (ECF No. 128, at 93.) Specifically,

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Bona Fide complains that SourceAmerica improperly used its role as a CNA to funnel

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contracts towards its favored NPAs and away from Bona Fide, preventing it from being

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recommended for the following 11 AbilityOne Opportunities: 1483 (Ft. Hood), 1692

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(Lakewood), 1690/1741 (DOD-IT), 1944 (USCG HQ), 2075 (NGA), 2161 (Puerto Rico),
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2379 (USDA), 2381 (Capitol), 2693 (Wright-Patterson), 2705 (Shaw AFB), and 2783

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(Chicago).3
D. SourceAmerica’s Motion for Summary Judgment

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SourceAmerica has moved for summary judgment on three items. (ECF No. 527.)

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First, it asks the Court to construe its obligations under the Settlement Agreement as a

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matter of law, contending that contract interpretation should not be left to the jury.

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SourceAmerica would have the Court construe section 1.2 as imposing on it no obligation

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other than what is already expected of it under the pre-existing web of FAR regulations

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and AbilityOne policies. It further interprets its obligations under those regulations and

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policies as a duty to recommend only the “best qualified” NPA.

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Second, SourceAmerica contends that there is no genuine issue as to whether it

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breached the Settlement Agreement under its proffered interpretation. That is, it argues

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that it has not breached the Settlement Agreement because it recommended only the “best

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qualified” NPA for each Opportunity challenged by Bona Fide.

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Finally, consistent with its argument that there was no breach, SourceAmerica

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urges summary judgment with respect to causation, because Bona Fide cannot establish

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that any alleged breach caused it damages.

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Bona Fide counters that factual issues as to contract interpretation preclude

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summary judgment. In the alternative, it argues that the Settlement Agreement should be

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interpreted with the parties’ prior disputes in mind, and that SourceAmerica’s obligations

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thereunder are not coterminous with its ordinary statutory and regulatory duties.

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II.

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Legal Standard
A. Summary Judgment

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On a motion for summary judgment, the Court must determine whether, viewing

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Originally, Bona Fide made allegations regarding several other Opportunities—i.e., Opportunity
Nos. 2410, 10709/090705, 1065, 1108, 1723, 2808, 2410 and RFI 1953. However, several of these
Opportunities (Nos. 10709/09075, 1065, 1108) pre-date the Settlement Agreement and are subject to the
release contained therein. In addition, Bona Fide has relinquished any claims of damages as to the
remainder (Nos. 1723, 2808, RFI 1953, 2410). Summary judgment as to those Opportunities is proper.
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the evidence in the light most favorable to the non-moving party, there are any genuine

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issues of material fact. Simo v. Union of Needletrades, Indus. & Textile Employees, 322

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F.3d 602, 609–10 (9th Cir. 2003); FED. R. CIV. P. 56. An issue is “genuine” only if there

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is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving

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party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is

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“material” only if it might affect the outcome of the suit under governing law. Id.

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When the non-moving party bears the burden of proving the claim, the moving

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party can meet its burden by pointing out the absence of evidence from the non-moving

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party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citation

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omitted). The moving party need not disprove the other party’s case. Celotex Corp. v.

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Catrett, 477 U.S. 317, 323, 325 (1986). Thus, “[s]ummary judgment for a defendant is

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appropriate when the plaintiff fails to make a showing sufficient to establish the existence

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of an element essential to [its] case, and on which [it] will bear the burden of proof at

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trial.” Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 805 (1999) (internal

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quotations and citation omitted).

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If the moving party meets its initial burden of informing the Court of the basis for

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its motion and identifying those portions of the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, which it

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believes demonstrate the absence of a genuine issue of material fact, the non-moving

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party must then set forth, by affidavit or as otherwise provided in Rule 56, facts showing

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that there is a genuine issue for trial. Celotex, 477 U.S. at 323; Anderson, 477 U.S. at

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250. To the extent that the non-moving party does not specifically and distinctly argue

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that factual disputes present a genuine issue of material fact, the court will not

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“manufacture arguments” on its behalf. Arpin v. Santa Clara Valley Transp. Agency, 261

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F.3d 912, 919 (9th Cir. 2001).

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A few words must be said about the quantum and quality of evidence marshalled

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pro and contra summary judgment. First, only admissible evidence may be considered in

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deciding a motion for summary judgment. Beyene v. Coleman Sec. Serv., Inc., 854 F.2d
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1179, 1181 (9th Cir. 1988). Even assuming admissibility, “[c]onclusory, speculative

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testimony in affidavits and moving papers is insufficient to raise genuine issues of fact

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and defeat summary judgment.” Soremekun, 509 F.3d at 984 (citations omitted). In

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other words, if “the [non-moving party’s] evidence is merely colorable, or is not

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significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249–

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50.

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B. Breach of Contract under Virginia Law
The Settlement Agreement provides that Virginia law governs an action for its
breach. Under Virginia law, “[t]he elements of a breach of contract action are (1) a

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legally enforceable obligation of a defendant to a plaintiff; (2) the defendant’s violation

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or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach

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or obligation.” Filak v. George, 267 Va. 612, 619 (2004).

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With respect to the first element—the existence of a legally-enforceable

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obligation—the Virginia Supreme has announced a general rule that “a contract made in

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violation of a statute is void.” Taylor Thiemann & Aitken v. Hayes, 244 Va. 198, 200

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(1922). Thus, “when a plaintiff must rely on the illegal contract to establish his cause of

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action, he may not recover for damages otherwise due him.” Id.

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With respect to the third element—causation—the party claiming lost profits must

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prove that its damages were “proximately caused by [the defendant’s] wrongful conduct.”

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Hop-In Food Stores, Inc. v. Serv-N-Save, Inc., 247 Va. 187, 190 (1994). To that end,

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Bona Fide must demonstrate—to “a reasonable certainty”—“a causal connection between

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[SourceAmerica’s] wrongful conduct and the damages asserted.” Saks Fifth Avenue, Inc.

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v. James, Ltd., 272 Va. 177, 189 (2006). Virginia’s standard for proximate cause does

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not require Bona Fide to establish causation with absolute “certainty as to exclude every

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other possible conclusion,” Wooldridge v. Echelon Serv. Co., 243 Va. 458, 461 (1992),

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but rather, commands that “speculation and conjecture cannot form the basis of the

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recovery.” Shepherd v. Davis, 265 Va. 108, 125 (2003) (quotation marks and internal

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citations omitted).
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III.

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Construing SourceAmerica’s Obligations under the Settlement Agreement
as a Matter of Law

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The parties dispute both whether the terms of the Settlement Agreement should be

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interpreted upon a motion for summary judgment, and what they should be construed to

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mean.

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A. Contract Interpretation Principles Applicable to Summary

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Judgment

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Courts may construe contracts on summary judgment, provided that the terms of

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the agreement are not ambiguous. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885,

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888 (9th Cir. 2003). “Where contractual language is susceptible to more than one

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reasonable interpretation,”—i.e., the contract is ambiguous—“summary judgment is

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ordinarily improper because ‘differing views of the intent of parties will raise genuine

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issues of material fact.’” Pardi v. Kaiser Foundation Hospitals, 389 F.3d 840, 848 (9th

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Cir. 2004) (quoting San Diego Gas & Elec. Co. v. Canadian Hunter Mktg. Ltd., 132 F.3d

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1303, 1307 (9th Cir. 1997)); see also Nat’l Union Fire Ins. Co. v. Argonaut Ins. Co., 701

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F.2d 95, 97 (9th Cir. 1983) (“[A]mbiguity in a contract raises a question of intent, which

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is a question of fact precluding summary judgment.”).

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If a contract is ambiguous, courts may at their election turn to extrinsic evidence to

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discern the intent of the parties to see if there is a “genuine issue of material fact” as to

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intent lying therein. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Argonaut Ins. Co.,

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701 F.2d 95, 97 (9th Cir.1983). If, after such an inquiry, and construing the evidence in

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the non-movant’s favor, the ambiguity cannot be resolved reasonably consistent with the

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non-movant’s position, summary judgment must be granted. S. Cal. Gas, 336 F.3d at

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889.
B. SourceAmerica’s Interpretation

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The parties posit starkly different interpretations of the “best efforts” provisions in
section 1.2.
SourceAmerica contends that the plain terms of the Settlement Agreement,
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requiring it to use its “best efforts” to treat Bona Fide “objectively, fairly, and equitably,”

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“with specific attention to contract allocation,” obliged it to afford to Bona Fide no more

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than the baseline treatment it affords to all other NPAs—that is, to treat them objectively,

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fairly, and equitably, without preferential treatment. (ECF No. 527, at 12–13.)

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SourceAmerica also denies that the other “best efforts” provision—obligating it to use

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best efforts to afford Bona Fide “equal access to services provided by [SourceAmerica]”

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meant that it had to furnish Bona Fide with any special training it does not offer to other

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NPA affiliates. (Id.)
C. Bona Fide’s Interpretation

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Bona Fide, on the other hand, vigorously argues that construction of the phrase

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“best efforts” is inappropriate for summary judgment disposition. It cites to a number of

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decisions which have counseled against interpreting “best efforts” provisions on

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summary judgment. See, e.g., Northrop Grumman Computing Sys. v. United States, 93

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Fed. Cl. 144, 150–51 n.7 (2010), rev’d on other grounds, 709 F.3d 1107 (Fed. Cir. 2013).

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Under Bona Fide’s competing interpretation, the “best efforts” clauses imposed on

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SourceAmerica a duty to perform with “a higher degree and grade of service” than the

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“ordinary and reasonable efforts implied by law” “where there is no such contract.”

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Hatton v. Mountford, 105 Va. 96, 103 (1906). Bona Fide interprets the contract to mean

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that SourceAmerica must “ensure Bona Fide was treated like [those previously] favored

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NPAs to redress the negative effects perpetrated on Bona Fide,” i.e., “to nurse Bona Fide

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back to health,” and provide Bona Fide with the same kind and degree of assistance and

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service that it was offering to those few NPAs. (ECF No. 558-1, at 20; ECF No. 558-2,

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at 108.) Bona Fide CEO Ruben Lopez views section 1.2 as an obligation to treat Bona

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Fide equally to “[t]he other NPAs [that] were being treated lavishly.” (ECF No. 558-2, at

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108.)

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Bona Fide finds support for its interpretation in the recitals to the Settlement

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Agreement, which recounts Bona Fide’s former bid protest allegations that

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SourceAmerica. It argues that the “best efforts” clauses must be understood as atonement
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for SourceAmerica’s prior wrongs. It also argues that if the “best efforts” obligations

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were interpreted to hold SourceAmerica to no more than its ordinary duties, Bona Fide

3

would have effectively bargained away its right to make a bid protest for nothing. Such a

4

reading, Bona Fide contends, “would eliminate the valuable consideration which

5

SourceAmerica gave Bona Fide in exchange for [Bona Fide] dismissing the prior claims

6

against it.” (ECF No. 555, at 25.)

7

D. The Court will construe the contract as a matter of law because there

8

is no ambiguity or factual disputes precluding interpretation on

9

summary judgment

10

The Court holds that there is no ambiguity in the Settlement Agreement and that it

11

may be interpreted on summary judgment. The authorities relied on by Bona Fide

12

indicate that fact issues may preclude summary judgment when the contract involves a

13

“best efforts” clause. But Bona Fide has not pointed to any factual issues that would

14

preclude summary judgment resolution in this case—in fact, all of its arguments are

15

addressed to what may be gleaned from the language, framework, and context of the

16

Settlement Agreement itself.

17

SourceAmerica’s duties under section 1.2 is clear, and its duties are exactly as the

18

contract states. SourceAmerica must diligently act to treat Bona Fide fairly, objectively,

19

and equitably, especially when it comes to Opportunity assignment, and with respect to

20

provision of SourceAmerica services. The text does not say that SourceAmerica must

21

afford Bona Fide special treatment or substantive boosts in consideration. While the

22

phrase “best efforts” might imply exceptional, rather than ordinary duties, that phrase is

23

immediately tempered by the ensuing phrases: “to treat fairly, objectively, and equitably,”

24

or “to provide . . . equal access to services.” Thus, section 1.2 is not an unfettered

25

promise by SourceAmerica to expend its best efforts to make sure that Bona Fide will

26

win a pro rata distribution of AbilityOne Opportunities. It is instead a promise to make

27

best efforts to comply with applicable evaluative and support measures.

28

None of Bona Fide’s contentions persuade the Court otherwise. The recitals cited
14
3:14-cv-00751-GPC-AGS

1

by Bona Fide (i.e., Recital D) does nothing to alter the meaning of section 1.2; the recitals

2

by SourceAmerica (i.e., Recital E), clarify that SourceAmerica had denied that it had

3

engaged in any wrongdoing. (ECF No. 519-4, at 7.) Therefore, Bona Fide’s recitals

4

cannot be offered as proof that the “best efforts” language entails an obligation on

5

SourceAmerica to right the wrong Bona Fide believes it has suffered. They certainly

6

cannot be offered to justify Bona Fide’s interpretation that it was owed the same kind of

7

favoritism and “lavish” treatment that motivated Bona Fide’s bid protests in the first

8

place.

9

Critically, if Bona Fide’s interpretation were to prevail, then the Settlement

10

Agreement would be unlawful and unenforceable. As SourceAmerica observed, it had no

11

authority to promise anything other than its ordinary procedures: “[t]he existence of a

12

settlement agreement does not permit the [government] contracting agency to act in ways

13

not otherwise permitted by applicable statutes and regulations.” WHR Grp. Inc. v. United

14

States, 121 Fed. Cl. 673, 678 (2015). Caselaw on bid protests counsels that “expectations

15

about future procurements,” as may arise as a result of settlement agreements, “may not

16

reasonably include an assumption that agencies will disregard statutory and regulatory

17

requirements.” York Int’l Corp., B-244748, 1991 WL 218506, at *2 (Comp. Gen. Sept.

18

30, 1991) (citing Techplan Corp., B-234151, 1989 WL 237486 (Comp. Gen. May 12,

19

1989)). In fact, “[t]he integrity of the government procurement process requires that

20

contracting officials not be permitted to enter into ancillary agreements . . . promising to

21

disregard applicable government-wide statutes and regulations.” Id. at *3. Bona Fide’s

22

proffered interpretation cannot reasonably be reconciled with the regulatory text, and

23

must be rejected on that basis.

24

Moreover, contrary to Bona Fide’s assertion, SourceAmerica’s reading does not

25

render the Settlement Agreement “meaningless.” (ECF No. 555, at 25.) Section 1.2 was

26

not the only consideration that SourceAmerica gave in exchange for Bona Fide releasing

27

its bid protests against it.

28

(ECF No. 535-2, at 12.) Section 1.1 vitiates Bona Fide’s argument that it
15
3:14-cv-00751-GPC-AGS

1

would have received no consideration whatsoever without its interpretation of section

2

1.2. Moreover, the fact that this matter is before this Court is proof enough that section

3

1.2 was not merely some illusory promise. By virtue of section 1.2, Bona Fide secured

4

the valuable consideration of being permitted to sue SourceAmerica in contract. Without

5

section 1.2, Bona Fide presumably would have been limited to pursuing administrative

6

remedies and instigating bid protests in the Federal Court of Claims.

7

As such, the Court has no difficulty in concluding that the Settlement Agreement

8

can be interpreted as a matter of law upon summary judgment.4 The Court rejects Bona

9

Fide’s interpretation that SourceAmerica has an obligation to treat it lavishly, single it out

10

for favorable treatment, or to furnish it with special services or access not granted to other

11

NPAs. The Settlement Agreement requires only that SourceAmerica treat Bona Fide

12

fairly, objectively, and equitably in its Opportunity assignment decisions and in receiving

13

SourceAmerica assistance and support.

14

IV.

15

Breach

SourceAmerica has also moved for summary judgment as to breach. It argues that

16

Bona Fide can establish breach only if it can show that it was the “best qualified” NPA

17

for each Opportunity at issue, and that SourceAmerica had chosen a different NPA in

18

spite of its qualifications.
The Court finds that SourceAmerica’s view of breach is predicated on an incorrect

19
20

legal premise, and that Bona Fide has set forth sufficient evidence to demonstrate that

21

genuine issues of material fact exist with respect to whether SourceAmerica breached its

22

contractual obligations. Thus, summary judgment as to breach is improper.

23
24
25
26
27
28

4

The parties have also offered various extrinsic evidence with regard to the disputed clause. They
have put forth interpretations of various Bona Fide and SourceAmerica personnel (see, e.g., ECF No.
555-1, 11–12, ECF No. 527-1, at 17), as well as expert testimony purporting to construe the same. (See
ECF No. 535–10, at 59 (Expert Report of Kevin M. Jans); ECF No. 558-28, at 31 (Declaration of Kevin
M. Jans); ECF No. 541, at 37, 40 (Expert Report of Mary Karen Wills).) The Court has elsewhere
excluded the expert testimony as improper legal opinion. (ECF No. 620). Moreover, the Court deems it
unnecessary to refer to any witness interpretation of the contract as a matter of law, and in light of the
clear lack of ambiguity in the text.
16
3:14-cv-00751-GPC-AGS

A. No regulations require SourceAmerica to select the “Best Qualified”

1
2

NPA

3

According to SourceAmerica, Bona Fide cannot demonstrate a breach of the

4

Settlement Agreement unless it can show that it was the “best qualified” NPA for each of

5

the 11 Opportunities at issue in this motion for summary judgment.

6

SourceAmerica’s position is bottomed on two problematic assumptions. First, it

7

argues that the federal regulations require it to select only the best qualified NPA for any

8

given Opportunity notice. Second, it argues if it complies with federal regulations and

9

policies, it is then necessarily in compliance with the Settlement Agreement. As a result

10

of these incorrect assumptions, SourceAmerica concludes that there is no breach unless

11

Bona Fide can establish that it had been the best qualified NPA for all of the 11

12

Opportunities in dispute, and that SourceAmerica had chosen another, less qualified NPA

13

instead.

14

The first premise in SourceAmerica’s contentions as to breach is flawed.

15

SourceAmerica insists that AbilityOne Commission Policy and the FAR constrain it to

16

recommend the “best qualified” NPA to the AbilityOne Commission for any particular

17

opportunity. (ECF No. 527-1, at 13.) In support, SourceAmerica proffers FAR

18

1.102(b)(ii), which it claims “requires SourceAmerica to recommend for AbilityOne

19

Opportunities only NPAs with ‘a track record of successful past performance or who

20

demonstrate a current superior ability to perform,’” and AbilityOne Policy 51.301, which

21

it claims “requires that SourceAmerica recommend only NPAs that can meet the

22

customers’ technical and delivery requirements.” (Id. at 13, 14.)

23

The Court, however, reads those regulations differently. It concludes that neither

24

of the cited provisions impose a legal obligation on SourceAmerica to choose only the

25

“best qualified” NPA.

26

FAR 1.102(b) does not set out any binding obligations on SourceAmerica. As

27

evident from its title, FAR 1.102 sets out but a “statement of guiding principles for the

28

Federal Acquisition System.” 48 CFR 1.102 (emphasis added). The Federal Court of
17
3:14-cv-00751-GPC-AGS

1

Claims has recognized as much: because the “text . . . imposes no specific substantive

2

obligations on the Government,” it is “therefore . . . not judicially enforceable.”

3

Information Sciences Corp. v. United States, 85 Fed. Cl. 195, 202 (2008); accord Am.

4

Tel. & Telegraph Co. v. United States, 307 F.3d 1374, 1380 (Fed. Cir. 2002). Indeed,

5

when viewed in a fuller context, it is clear that FAR 1.102 subsection (b) sets out an

6

aspiration, not a requirement. There, the FAR promises that the Federal Acquisition

7

System will “satisfy the [federal] customer in terms of cost, quality, and timeliness of the

8

delivered product or service by, for example, . . . [u]sing contractors who have a track

9

record of successful past performance or who demonstrate a current superior ability to

10

perform.” 48 CFR 1.102(b)(ii) (emphasis added). Moreover, the phrase “current

11

superior ability to perform,” does not necessarily indicate that SourceAmerica should

12

always choose the “most qualified” NPA, since a different part of that subsection also

13

provides that Federal Acquisition System will strive to “promot[e] competition.” 48 CFR

14

1.102(b)(iii). The Court espies no sign of a binding legal obligation to choose the “best

15

qualified” NPA stemming from the FAR.

16

Nor does AbilityOne Commission Policy 51.301 help SourceAmerica’s cause.

17

The language seized upon by SourceAmerica requires only that it “shall assign projects

18

and allocations to NPAs that meet the customers’ technical and delivery requirements.”

19

AbilityOne Policy 51.301(6)(b)(i). That language does not compel SourceAmerica to

20

choose the best qualified NPA, but only requires it to choose an NPA that can meet the

21

requirements set forth by the federal customer. Indeed, an ensuing provision clarifies that

22

once the condition in section 51.301(6)(b)(i) is satisfied, SourceAmerica must consider,

23

inter alia, whether “special considerations are warranted” in making a decision. Id. at

24

51.301(6)(b)(iii)(b)(5).

25

Thus, the Court is not persuaded as a matter of law that SourceAmerica was under

26

a legal obligation to choose only the “best qualified” NPA. The regulatory provisions

27

offered by SourceAmerica indicate, on the contrary, that it has considerable discretion to

28
18
3:14-cv-00751-GPC-AGS

1

recommend NPAs that were technically not the “best qualified.”5

2

B. Bona Fide has designated facts indicating a genuine issue as to

3

breach
Since SourceAmerica is not legally bound to select the “best qualified” NPA, it

4
5

cannot argue that Bona Fide must demonstrate that it was the best qualified NPA to prove

6

breach. The only pertinent inquiry for breach is whether a reasonable jury could view

7

SourceAmerica’s actions as violating its contractual obligation to use best efforts to be

8

fair, objective, and equitable to Bona Fide in the assignment of AbilityOne projects and

9

its provision of equal services.

10

Bona Fide has set forth substantial evidence—both through the testimony of Jean

11

Robinson, and the proffered testimony of its expert, Kevin M. Jans—which calls the

12

fairness of SourceAmerica’s Opportunity assignments vis-à-vis Bona Fide into question.

13

(ECF No. 558-1, at 20–23.)6

14
15

18

SourceAmerica has also argued that Bona Fide’s CEO, Mr. Lopez had conceded in deposition
that SourceAmerica was under a legal obligation to choose only the “best qualified” NPA. The Court
does not find that Bona Fide is bound to legal opinions offered by Mr. Lopez as its Rule 30(b)(6)
witness, because as Bona Fide notes, a “Rule 30(b)(6) deponent’s own interpretation of the facts or legal
conclusions do not bind the entity.” Snapp v. United Transp. Union, 889 F.3d 1088, 1104 (9th Cir.
2018).

19

6

16
17

20
21
22
23
24
25
26
27
28

5

Bona Fide has also submitted a request for judicial notice of a number of documents bearing on
its arguments for breach. (ECF No. 557-5.) It asks the Court to take judicial notice of various parts of
five documents (1) U.S. Department of Defense, Defense Security Service, National Industrial Security
Program Operating Manual (May 18, 2016) (the “DOD Manual”); (2) United States Department of
Defense, Defense Security Service, Industrial Letter 2006-02 (Aug. 22, 2006) (“Industrial Security
Letter); (3) 41 CFR 51-2.4; (4) National Institute for the Severely Handicapped’s 2004 Annual Report;
and (5) SourceAmerica’s 2014 Annual Report.
A court must take judicial notice if a party requests it and supplies the court with the requisite
information. FED. R. EVID. 201(d). “A judicially noticed fact must be one not subject to reasonable
dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2)
capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be
questioned.” Id. This Court may take judicial notice of documents that are public records and capable
of accurate and ready confirmation by sources that cannot reasonably be questioned. See MGIC Indem.
Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).
Despite the objections of SourceAmerica (ECF No. 579-4), the Court finds all documents sought
to be judicially noticed by Bona Fide pass muster under Rule 201(d). SourceAmerica is incorrect that
Bona Fide’s documents are inappropriate for judicial notice because they are presented for the truths set
19
3:14-cv-00751-GPC-AGS

1
2

i.

Ms. Robinson’s Deposition Testimony

For one, Ms. Robinson, the individual charged by SourceAmerica to fulfill the

3

monitoring duties promised in the Settlement Agreement, testified that during the course

4

of her monitorship, she became aware of facts suggesting that SourceAmerica was not

5

being fair or equitable with respect to Bona Fide. (ECF No. 558-13, at 12–25.) Ms.

6

Robinson testified that she found instances of “irregularities and occurrences and events

7

that occurred during . . . the competitions for contract allocation” at issue. (Id. at 20.)

8
9

For example, Bona Fide had made an allegation that SourceAmerica was inserting
unnecessary certification requirements into Opportunity requirements which were not

10

being requested from the federal customer. After investigating, Ms. Robinson “found at

11

least in the one instance where the allegation was made that the government did not

12

confirm that they wanted that particular requirement as part of the competitive process.”

13

(Id. at 14.) Furthermore, Ms. Robinson also indicated that SourceAmerica’s CEO, COO,

14

and members of its Board asked her to misrepresent facts she had learned about the NPA

15

recommendation process to Bona Fide. (Id. at 17–19.) When she refused, she was

16

terminated by SourceAmerica as a result of her “unwillingness to assist her client in

17

defrauding the government in depriving persons with significant disabilities from the full

18

employment they would have enjoyed absent SourceAmerica’s troubling practices.” (Id.)

19

Ms. Robinson’s testimony, standing alone, presents a genuine dispute as to breach.

20

ii.

Mr. Jans’s Expert Analysis

21
22
23
24
25
26
27
28

forth within. The restriction cited by SourceAmerica (id., at 3) appears to apply only to “documents
filed in other courts,” Karmer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991), and not to
government publications or statements released by a party in litigation. Indeed, the Ninth Circuit has
indicated that it is “appropriate to take judicial notice of [information similar to items 1-3] as it was
made publicly available by government entities.” United States Small Business Admin. V. Bensal, 853
F.3d 992, 1003 n.3 (9th Cir. 2017) (quoting Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th
Cir. 2010)). With respect to SourceAmerica’s attempt to exclude items 4-5, Bona Fide is convincing that
SourceAmerica cannot fairly question the information it itself has released in connection with its tax
returns.
Bona Fide’s request for judicial notice (ECF No. 557-5) is granted.

20
3:14-cv-00751-GPC-AGS

Mr. Jans’s expert report also precludes summary judgment on breach. Mr. Jans

1
2

analyzed the decisions made by SourceAmerica in its NPA recommendation process

3

from a holistic perspective. He segregated SourceAmerica’s influence over the NPA

4

recommendation process into four stages, termed the Acquisition Time Zones, and

5

identified actions taken by SourceAmerica at each of these junctures, which, in his

6

opinion constituted unfair and inequitable behavior.

7

In the first two zones, i.e., the Requirements and Market Research Zones, the

8

procuring agency decides what services it needs and what requirements it would demand

9

of the NPA eventually chosen to provide the service. Mr. Jans explains that

10

SourceAmerica wields significant influence in these initial zones, because it can define

11

and structure the procuring agency’s need and then transcribe those needs into mandatory

12

requirements in Opportunity Notices. Mr. Jans believes that SourceAmerica has exerted

13

its influence in favor of favored, larger NPAs to the detriment of smaller NPAs like Bona

14

Fide.

15

For example, Mr. Jans notes that in several instances, SourceAmerica could

16

theoretically have bifurcated contracts into smaller segments, but elected to design an

17

umbrella Opportunity which bundled the client’s requests for separate services. In

18

particular, with respect to Opportunity No. 2693, Mr. Jans contends that

19
20
21
22

With respect to Opportunity No.

23

1692, Mr. Jans notes that the Opportunity for the Federal Building at Lakewood,

24

Colorado, was structured to

25
26

A similar
situation played out with respect to Opportunity No. 2705. (Id. at 67–68.)

27

Consistent with Ms. Robinson’s testimony, Mr. Jans further observes that

28

SourceAmerica inserted special certifications into its Opportunity Notices, even though
21
3:14-cv-00751-GPC-AGS

1

the federal government client did not require such certifications. For example, with

2

respect to Opportunity No. 1483, SourceAmerica apparently instituted a mandatory

3

requirement for Cleaning Industry Management Standard for Green Buildings (“CIMS-

4

GB”) certification, a requirement which was not client-driven. (Id. at 48.) Similar

5

requirements for CIMS-GB certification not requested by the federal customer were

6

implemented in Opportunity No. 1944. (ECF No. 558-1, at 36.) On other occasions,

7

SourceAmerica would require NPAs to demonstrate current certification, when the

8

applicable regulations require only that the chosen NPA obtain such certification at some

9

point prior to project start.7 For example, with respect to Opportunity No. 2075,

10

SourceAmerica made it a mandatory requirement that NPAs have Top Secret / Sensitive

11

Compartmented Information (“TS/SCI”) security clearance at the time of proposal, as

12

opposed to by the date of performance. (ECF No. 558-1, at 39.)
According to Mr. Jans, SourceAmerica’s problematic treatment of Bona Fide was

13
14

not limited to zones 1 and 2. SourceAmerica also stands accused of misbehaving in

15

zones 3 (where it solicits proposals and responses to its Opportunity Notices) and 4,

16

(where it ultimately selects an NPA based off of its meeting stated criteria and the

17

adequacy of their stated work plan).

18

In some instances, SourceAmerica would change evaluative criteria after the

19

Opportunity Notice was released, and after proposals were evaluated. This was the case

20

in Opportunity Notice 1944. (ECF No. 535-10, at 54–55.)

21
22
23
24
25
26

41 CFR 51-2.4(a)(3) (“The nonprofit agency (or agencies) desiring to furnish a commodity or
service under the JWOD Program must satisfy the Committee as to the extent of the labor operations to
be performed and that it will have the capability to meet Government quality standards and delivery
schedules by the time it assumes responsibility for supplying the Government.” (emphasis added)).
7

27
28

22
3:14-cv-00751-GPC-AGS

1
2
3

Similar post-hoc changes in evaluative criteria are also presented with respect to

4

Opportunity Notice 2161. (Id. at 59–60.)

5

Conflicts of interest also asserted themselves in problematic ways in throughout all

6

four acquisition time zones. According to Mr. Jans’s analysis, many aspects of

7

SourceAmerica’s evaluative process were potentially tainted by improper connections

8

between key decision-making personnel and those NPAs who eventually were awarded

9

contracts sought by Bona Fide. (ECF No. 535-10, at 42–46.) These conflicts meant that

10

certain NPAs who enjoyed relationships with SourceAmerica decision-makers would

11

gain an unfair advantage when they submitted Opportunity responses. The conflicts

12

described by Mr. Jans permeate the evaluative process for Opportunity Notices

13

1690/1741 (id. at 50–54) and 2381 (id. at 61–64).

14

C. Conclusion on Breach

15

In light of Bona Fide’s summary judgment evidence, the Court agrees that a

16

genuine issue of material fact exists as to whether SourceAmerica’s actions in designing,

17

evaluating, and assigning Opportunity Notices breached its obligations to treat Bona Fide

18

fairly, objectively, and equitably. A reasonable jury could find—based on the facts8

19

adduced by Bona Fide with respect to conflicts of interest and SourceAmerica’s

20

discretionary control over Opportunity design and the institution of mandatory

21

certification requirements—that there are ways in which SourceAmerica exercised its

22

role as a CNA in ways that were unfair, unobjective, and unequitable to Bona Fide. The

23

Court denies summary judgment as to breach.

24
25
26
27
28

8

The Court is aware that SourceAmerica, and its expert witness, Ms. Wills, hotly contest these
facts. They point to a number of countervailing facts tending to show, inter alia, that it was the federal
customer’s requests that motivated SourceAmerica’s structuring decisions, and that SourceAmerica
followed all the applicable regulatory requirements. However, the existence of contrary facts only goes
to confirm the Court’s holding that there are genuine disputes of material fact precluding summary
judgment as to breach.

23
3:14-cv-00751-GPC-AGS

1
2
3

V.

Causation
SourceAmerica’s final argument on summary judgment is that there is no evidence

to support Bona Fide’s claim of causation.

4

A. Requirement of Proximate Cause

5

Recall that under Virginia law, a breach of contract claim requires the plaintiff to

6

demonstrate that its injuries were proximately caused by the defendant’s wrongful

7

conduct. Hop-In, 247 Va. at 190. Virginia defines a proximate act as “that act or

8

omission which, in natural and continuous sequence, unbroken by an efficient intervening

9

cause, produces the event, and without which that event would not have occurred.” Rich

10
11

v. Commonwealth, 292 Va. 791, 800 (2016).
Where, as here, the plaintiff’s alleged damages involve the loss of future contracts,

12

the proximate “causal connection” between its injuries and the opposing party’s breach

13

must be proven with “reasonable certainty.” Saks Fifth Ave, 272 Va. at 188. “Before a

14

question of fact with regard to proximate cause may be submitted to a jury, the evidence

15

proving the causal connection must be ‘sufficient to take the question out of the realm of

16

mere conjecture, or speculation, and into the realm of legitimate inference.’” Atrium Unit

17

Owners Ass’n v. King, 266 Va. 288, 294 (2003) (quoting Beale v. Jones, 210 Va. 519,

18

522 (1970)). At base, “prospective profits are not recoverable . . . ,” or subject to jury

19

determination “if it is uncertain that there would have been any profits . . . .” Saks Fifth

20

Ave, 272 Va. at 188–89; accord Shepherd v. Davis, 265 Va. 108, 125 (2003) (“[D]amages

21

based on uncertainties, contingencies, or speculation cannot be recovered.”).

22

At the same time, proximate cause does not demand “such certainty as to exclude

23

every other possible conclusion.” Wooldridge v. Echelon Serv. Co., 243 Va. 458, 461

24

(1992) (quotations and internal citation marks omitted). Moreover, once the initial

25

evidentiary hurdle—which detains any speculative or unsubstantiated allegations of

26

proximate cause—is met, there is no prohibition against establishing “reasonable

27

certainty” by circumstantial evidence. Id. Indeed, “facts may be established by

28

circumstantial evidence, such evidence ‘must be sufficient to establish the result alleged
24
3:14-cv-00751-GPC-AGS

1

is a probability rather than a mere possibility.’” Atrium, 266 Va. 288 (quoting Southern

2

States Coop., Inc. v. Doggett, 233 Va. 650, 657 (1982)). Pursuant to these governing

3

principles, Bona Fide acknowledges that it must show that it was reasonably certain that

4

it would have won each of the 11 disputed Opportunities had there not been a breach by

5

SourceAmerica.

6

B. The Parties’ Briefing as to Causation

7

Initially, Bona Fide advanced its proximate cause arguments only in the most

8

perfunctory and cursory of ways. Though Bona Fide filed a 44-page Opposition brief,

9

only two paragraphs in Bona Fide’s therein were addressed to the issue of causation.

10

And in those two paragraphs, Bona Fide blithely refers the Court to the expert reports of

11

Mr. Jans, with the following explanation: Mr. “Jans’ ‘but for’ causation opinion analyzes

12

the likelihood Bona Fide would have been awarded the opportunities at issue . . . . and

13

concludes that

14
15
16
17

(ECF No. 555, at 43–44.)
Unfortunately for Bona Fide, the Court has excluded the portions of Mr. Jans’s

18

report upon which Bona Fide exclusively relied. (See ECF No. 620.) As explained more

19

fully in ECF No. 620, there was “simply too great an analytical gap between the data and

20

the opinion proffered,” resulting in a situation where nothing connected Mr. Jans’s

21

conclusion to his analysis except his ipse dixit. Gen. Elec. Co. v. Joiner, 522 U.S. 136,

22

146 (1997) (courts need not admit an expert opinion that is connected to the underlying

23

data “only by the ipse dixit of the expert”). Specifically, Mr. Jans’s report was aimed

24

exclusively at breach—i.e., what did SourceAmerica do that was unfair to Bona Fide?—

25

but did nothing to establish causation—i.e., if Bona Fide were evaluated only according

26
27
28
25
3:14-cv-00751-GPC-AGS

1

to fair or uncompromised criteria, was it reasonably certain that Bona Fide could have

2

satisfied all of the requirements, such that it should have been the recommended NPA? 9

3

On the hearing held November 16, 2019, the Court addressed the dearth of

4

causation analysis put forth by Bona Fide. There, the Court observed that, despite having

5

cited the applicable Virginia law laying the burden of proving proximate cause on its

6

shoulders, see Saks Fifth Ave., 272 Va. at 188, Bona Fide did not endeavor to set forth in

7

argumentation any data—exclusive of Mr. Jans’s expert report—in support of causation.

8

The Court inquired of Bona Fide whether it could point to any record evidence tending to

9

show that it was reasonably certain that it could have won all 11 or one of the 11 disputed

10

opportunities but for SourceAmerica’s breach. (ECF No. 603, at 8 (Hr’g Tr., dated

11

November 16, 2018).) The Court registered its concern that Bona Fide’s Opposition

12

papers lacked any indication that Bona Fide would have been able to fulfill any of the

13

disputed Opportunity Notice requirements, even if unfair elements were to be removed.

14

(ECF No. 603, at 9.) In response, Bona Fide asserted that there was evidence in the

15

record that would establish that it would have been reasonably certain to win the disputed

16

Opportunities but for SourceAmerica’s breach.

17

After oral arguments, the Court permitted both parties to submit additional briefing

18

as to proximate cause. Bona Fide’s supplemental briefing addresses a number of the

19

logical and argumentation-based flaws which inhered in its original papers. (ECF No.

20

604.) The supplemental briefing sets out, in a more particularized fashion, Bona Fide’s

21

contentions with respect to each disputed Opportunity. SourceAmerica’s briefing

22

disputes the sufficiency of Bona Fide’s supplemental briefing. (ECF No. 607.)

23

SourceAmerica argues, inter alia, that Bona Fide has failed to address a number of

24
25
26
27
28

In addition, it has been made clear through Bona Fide’s Opposition brief that Mr. Jans’s
conclusion as to causation rested on an improper legal premise—that SourceAmerica breaches the
Settlement Agreement when it does not “give Bona Fide advantages in the process.” (ECF No. 555, at
44.) As discussed supra in Section III(D), there is nothing in the language of the Settlement Agreement
that obligates SourceAmerica to treat Bona Fide differently than any other NPA. Indeed, to construe the
Settlement Agreement to require preferential treatment would render it unenforceable.
9

26
3:14-cv-00751-GPC-AGS

1

superseding and intervening events that vitiated the causal relationship between any

2

breaching action and resulting harm, and that Bona Fide mischaracterized the record

3

evidence in its bid to prove causation.

4

C. Analysis

5

As the Court advised the parties at the hearing, the question for proximate cause is

6

whether Bona Fide has adduced sufficient evidence to demonstrate that it was reasonably

7

certain to have prevailed on the disputed Opportunities but for SourceAmerica’s alleged

8

breach.

9

Bona Fide insists that the present analysis should be guided by the decision of the

10

Virginia Supreme Court in Banks v. Mario Industries of Virginia, Inc., 274 Va. 438

11

(2007). In that case, Mario Industries, a lighting manufacturer, sued its former employee,

12

Cook, and Cook’s newly-erected rival business, Renaissance Contract Lighting &

13

Furnishings for, among other things, tortious interference with business relations. Id. at

14

442–47. The trial court awarded Mario damages with respect to two lighting contracts

15

(with Hilton Garden Inn and Benjamin West), which Mario alleged it lost as a result of

16

Cook’s erroneous submission of “bogus” and unreasonably-high project estimates. Id. at

17

458. On appeal, the defendants protested that “plaintiff’s damages evidence was

18

speculative, contingent, uncertain, failed to show the claimed damages with any

19

reasonable certainty, failed to show that the defendants’ acts or omissions were the direct

20

and cause of the claimed damages.” Id. at 454.

21

The Virginia Supreme Court affirmed the awards over defendants’ objections.

22

With respect to the Hilton Garden Inn, the court noted that Mario had an ongoing

23

exclusive contract to provide guest-room lighting. It further observed that Mario’s

24

president testified that Cook had submitted an improper quote that was 10% higher than

25

what should have been quoted, the amount of which “meant the difference between

26

getting a job and losing a job.” Id. at 457. Thus, despite Mario’s inability to establish the

27

amount of the winning bid, the foregoing evidence was sufficient to sustain a finding that

28

“Mario would have won the Hilton Garden Inn project based on Mario’s long-term
27
3:14-cv-00751-GPC-AGS

1

relationship with Hilton and Mario’s contract as ‘the exclusive guest room lighting

2

manufacturer.’” Id. Similarly, the Court found significant Mario’s “prior working

3

relationship with Benjamin West,” and affirmed the district court’s proximate cause

4

determination on this basis. Id.

5

SourceAmerica, on the other hand, directs the Court to cases like Gemalto Pte Ltd.

6

v. Telecomms. Indus. Ass’n., No. 1:08CV776 LMB/TRJ, 2009 WL 464484, at *1 (E.D.

7

Va. Feb. 24, 2009) and Saks Fifth Avenue, 272 Va. at 177.

8
9

In Saks Fifth Avenue, the Virginia Supreme Court found that the plaintiff, a highend men’s clothing retailer, had not established the requisite causal link between its

10

former employer’s breach of a non-compete agreement and its asserted lost profits. In

11

that case, the retailer’s expert did not adequately tie the retailer’s lost profits to any

12

breaching conduct. To wit: the expert’s damages model ascertained the amount of losses

13

the retailer sustained as a result of the employee’s departure, but because the employee

14

was an at-will employee who was legally permitted leave his employment at any time,

15

any losses so incurred could not be directly and proximately traceable to any wrongful

16

conduct. Id. at 189–190. To prevail, the retailer should have instead proffered analysis

17

specifically connecting the losses to prohibited conduct, such as misappropriation of the

18

retailer’s proprietary client information. Id.

19

In Gemalto, the plaintiffs, telecommunication companies both, alleged that the

20

defendant’s failure to provide user identification codes—R_UIM cards—deprived them

21

of millions of dollars in potential sales to five customers. The court granted summary

22

judgment for defendant on the lack of causation evidence as to plaintiffs’ lost profits,

23

finding dispositive the lack of evidence in the record that “either of the two plaintiffs sold

24

R_UIM cards directly to four of the five customers at issue . . . in the past.” Gemalto,

25

2009 WL 464484, at *4. As to the remaining potential customer, the Court remarked that

26

“evidence of past sales to the other customer . . . is weak at best.” Id. Without more,

27

plaintiffs’ lost profits failed for want of causation. Id. (“[P]laintiffs’ evidence that [they]

28
28
3:14-cv-00751-GPC-AGS

1

would have made the sales that they claim lost profits from is speculative and based on

2

contingencies.”).

3

The authorities cited by the parties provide useful guideposts for the Court’s

4

discussion on proximate cause. While none of those cases involved the lost profits

5

arising from the alleged unfair allocation of government contract opportunities, they do

6

provide guidance for the kind of proximate cause analysis that a plaintiff must set forth to

7

prevail in Virginia. Applying those principles to the 11 disputed Opportunities at hand,

8

the Court concludes that summary judgment should be granted as to Opportunities Nos.

9

2075, 1692, 1944, 2161, 2379, and 2318. Summary judgment is denied as to

10

Opportunities 1483, 1741, 2693, 2705, and 2783.

11

1. Opportunity No. 1483

12

Opportunity No. 1483 was a child care center cleaning services contract for two

13

buildings in Fort Hood, Texas, with an average annual value of

14

NPAs submitted proposals for SSN 1483, and CW Resources, Inc. (“CWR”) was

15

ultimately granted the contract.

16

. Eight

Bona Fide argues that SourceAmerica unfairly and unlawfully made the current

17

possession of a CIMS-GB certification a mandatory requirement, which had the effect of

18

eliminating Bona Fide’s proposal (Bona Fide’s proposal indicated that its application for

19

CIMS-GB certification was 65% complete). (ECF No. 604, at 14–15.) Bona Fide also

20

contends it was improper that SourceAmerica disqualified Bona Fide on the basis of an

21

incomplete IRS Form 990 when other NPAs were not penalized for failing to attach

22

various other financial documentation, and where Bona Fide asked for an opportunity to

23

provide the missing pages. (Id.) Bona Fide argues that if those two unfair evaluative

24

criteria were removed, its proposal would have been as, if not more, competitive as that

25

submitted by CWR, the contract winner. (Id. at 17.)

26

As an initial matter, the Court finds no evidence that Bona Fide was penalized for

27

the incompleteness of its IRS Form 990. On the contrary, the record evidence indicates

28

that
29
3:14-cv-00751-GPC-AGS

1
2
3
4
5
6

However, the Court agrees with Bona Fide that there is evidence upon which a

7

reasonable jury could conclude that SourceAmerica departed from the SSN’s stated

8

evaluation criteria when it based its recommendation on whether the NPA had a current

9

CIMS-GB certification. Although there is nothing inherently wrong with having a

10

preference for an NPA with current CIMS-GB certification, Ms. Robinson’s testimony

11

that SourceAmerica would often experience “irregularities” when it comes to imposing

12

heightened certification requirements (ECF No. 558-13 (Depo. of Jean Robinson, dated

13

April 12, 2018)), and especially as they relate to Bona Fide, permits the inference that

14

SourceAmerica’s insistence on a current CIMS-GB certification was borne out of a desire

15

to disadvantage Bona Fide.

16

Thus, the Court turns to whether Bona Fide can show that, but for the CIMS-GB

17

certification requirement, it would have been reasonably likely to prevail. Bona Fide

18

argues that a reasonable jury could conclude, based on a side by side comparison of its

19

proposal and CWR’s winning proposal, that Bona Fide had the superior bona fides. (ECF

20

No. 604, at 15.) The Court agrees that the relative merits of Bona Fide and CWR’s

21

proposals is a matter that should be presented to a jury.

22
23
24

That being the case, the

25

Court finds that Bona Fide has adduced non-speculative evidence of proximate cause.

26

Summary judgment as to SSN 1483 is accordingly denied.

27

2. Opportunity No. 1692

28
30
3:14-cv-00751-GPC-AGS

1

Opportunity No. 1692 was a grounds maintenance and snow and ice removal

2

contract in the Denver, Colorado area with an estimated annual value of $1.6 million.

3

SourceAmerica had recommended a different NPA for the Opportunity before the

4

Opportunity was cancelled by the AbilityOne Commission. Bona Fide alleges that

5

SourceAmerica met and exceeded all criteria for this Opportunity (and should have been

6

recommended), but that SourceAmerica unfairly penalized it for failing to submit a

7

complete IRS 990 form, an omission that SourceAmerica had previously excused for

8

other NPAs who pursued other Opportunities. SourceAmerica disputes that the

9

disqualification based on the incomplete IRS 990 form was un-uniformly applied, and

10

faults Bona Fide for not submitting into evidence its response to the Opportunity Notice.

11

Regardless of whether SourceAmerica unfairly held Bona Fide to a higher

12

standard—i.e., to the requirement of a completed IRS 990 form—Bona Fide fails to

13

establish the requisite causation with respect to Opportunity No. 1692. Most strikingly,

14

Bona Fide does not dispute that the AbilityOne Commission decided to revoke this

15

opportunity after declaring a severe impact on the incumbent contractor originally

16

servicing the Denver facility. The Court agrees with SourceAmerica that the AbilityOne

17

Commission’s independent, and intervening decision to pull Opportunity No. 1692

18

vitiates any claim by Bona Fide that it was SourceAmerica’s inequitable selection with

19

respect to, and design of, Opportunity No. 1692, that proximately caused Bona Fide to

20

lose out on the contract. Summary Judgment is granted with respect to Opportunity No.

21

1692.
3. Opportunity No. 1690/174110

22
23

SSN 1741 sought an NPA to provide enterprise-wide IT services for the

24

Department of Defense, and was valued at approximately $60-70 million. SSN 1741

25

garnered three proposals, from Lakeview Center Inc. (“Lakeview”), who subcontracted

26

with InspiriTec, Linden Resources, Inc., and PORTCO, Inc. (“PORTCO”), who

27
10

28

SSN 1690 was published on September 21, 2012, cancelled on October 12, 2012, and reissued as
SSN 1741 on October 17, 2012.
31
3:14-cv-00751-GPC-AGS

1

subcontracted with Bona Fide. Lakeview was awarded the opportunity after one of the

2

four SourceAmerica evaluators changed his initial vote from PORTCO to Lakeview after

3

a phone call with the rest of the team. (ECF No. 558-15, at 26-27 (Sealed).)

4

Bona Fide contends that Lakeview should have been barred from consideration

5

because (1) it failed to meet a mandatory minimum requirement—that is, a “no-go”

6

condition, and (2) two of the four SourceAmerica evaluators for SSN 1741, i.e., Peggy

7

Gritt and Daniel Woods, had ulterior motives—borne out of quid pro quo conflicts of

8

interest—for recommending Lakeview. (ECF No. 604, at 13.)

9

The bulk of Bona Fide’s allegations pertain to Mr. Woods.

10
11
12
13

Bona Fide identifies two
conflicts with respect to Mr. Woods.

14
15
16
17

Bona Fide suggests that the evidence

18

arguably demonstrates Mr. Woods maintained contact with Mr. Kessler during the

19

development of SSN 1741, and that Mr. Woods had designed the opportunity with

20

Lakeview in mind. For this, Bona Fide cites to

21
22
23
24

Second, Bona Fide alleges that whatever fledgling conflict of interest Mr. Woods

25

might have had owing to his acquaintanceship with Mr. Kessler deepened into an actual

26

conflict of interest when Mr. Woods took a job with Lakeview after he had voted to

27

recommend Lakeview, and while the source-selection process was pending. Lakeview’s

28

September 27, 2102 proposal for SSN 1741 advised that it would be hiring a new “Senior
32
3:14-cv-00751-GPC-AGS

1

Operations Executive” to oversee the project, if Lakeview were selected. Mr. Woods

2
3
4
5
6
7
8
9
10
11
12
Ms. Gritt, another evaluator on SSN 1741, and Mr. Woods’s supervisor, also left

13
14

SourceAmerica after recommending Lakeview for the opportunity.

15
16
17
18

In addition to these potential conflicts of interest, Bona Fide also points out that

19

Lakeview should not have been considered for SSN 1741 because it likely did not meet

20

one of the mandatory, go/no-go conditions for the opportunity. A “minimum criteria” for

21

SSN 1741 specified that “[i]f a[n NPA’s] AbilityOne Contract has been removed, it will

22

not be eligible for new opportunities until one year has elapsed and the [NPA] can

23

demonstrate renewed capacity.” (ECF No. 558-15, at 90 (Sealed).) After Lakeview was

24

recommended for SSN 1741, PORTCO advised SourceAmerica, on December 28, 2012,

25

that

26
27
28
33
3:14-cv-00751-GPC-AGS

1

A reasonable jury could find, on the basis of the foregoing, that SourceAmerica

2

breached its obligations to be fair, equitable, and objective, and that Lakeview should not

3

have been awarded SSN 1741. Furthermore, because the proposal from PORTCO (which

4

included Bona Fide as a subcontractor) was the only proposal other than Lakeview’s to

5

have garnered any votes, it was reasonably certain that, but for SourceAmerica’s

6

conflicted source-selection process, PORTCO would have been selected for the

7

opportunity.

8
9

Although SourceAmerica resists this conclusion on a couple of grounds, none of
them are availing. First, SourceAmerica argues that Bona Fide did not follow procedures

10

in the Settlement Agreement to alert SourceAmerica of its participation in PORTCO’s

11

proposal. But, Mr. Lopez’s testimony provides that he had,

12
13

Second, SourceAmerica

14

argues that Bona Fide was not qualified for the opportunity because it admitted that it had

15

no previous IT experience. However, Bona Fide points out that at the time of PORTCO’s

16

submission,

17

And, the fact

18

that Bona Fide was seeking to expand into a new area of business did not preclude at

19

least one SourceAmerica evaluator from initially recommending the PORTCO/Bona Fide

20

team over Lakeview. Third and finally, the Court does not find persuasive

21

SourceAmerica’s objection that it would be speculative to believe that a non-conflicted

22

team of evaluators would have voted for the PORTCO/Bona Fide team. Of the two non-

23

conflicted evaluators, one had voted for PORTCO before being persuaded to vote for

24

Lakeview. If Lakeview were not eligible for the recommendation, then it is reasonably

25

certain that PORTCO, as the runner-up in the source-selection process, would have been

26

selected. Summary judgment is denied as to SSN 1741.

27

4. Opportunity No. 1944

28
34
3:14-cv-00751-GPC-AGS

1

SSN 1944 was a custodial services contract for the Coast Guard’s Headquarters in

2

Washington D.C., administered by the General Services Administration (“GSA”), with an

3

annual value of $3.5 million.

4

Bona Fide alleges that SourceAmerica breached the Settlement Agreement by

5

unilaterally implementing

6

without GSA approval and selecting four NPAs to make presentations to GSA, instead of

7

permitting only three NPAs to make presentations, as was specified in the SSN. (ECF

8

No. 604, at 16.) Further, Bona Fide points out that SourceAmerica’s

9
10

requirements were unevenly applied against it, since The Chimes, an NPA
that was selected to present to GSA, also did not have either credential.

11

The Court, however, is not convinced that Bona Fide has shown that it would have

12

obtained the contract, had the allegedly-problematic requirements been removed. On this

13

point, the Court agrees with SourceAmerica that Bona Fide has failed to show how any of

14

the alleged breaches resulted in its loss of SSN No. 1944. First, the selection of four

15

NPA presenters instead of three cannot evince unfairness, inequality, or unobjectivenes;

16

if anything, increasing the pool of NPAs to present to GSA can only operate to Bona

17

Fide’s benefit.

18
19
20

Second, it is true that there is a genuine dispute as to who—either GSA, as the
client, or SourceAmerica, on its own accord—
. But regardless of their provenance, Bona Fide has not demonstrated

21

that it was the insertion of these requirements that doomed its proposal. Bona Fide relies

22

on a contorted argument that, because only its and CWR’s proposals are in evidence, and

23

because CWR should be disqualified, “only Bona Fide’s bid is eligible for an award.”

24

(ECF No. 604, at 17.) As with a similar assertion made with respect to Opportunity No.

25

2161, infra, the Court must reject this argument as wholly illogical. The only rationale

26

Bona Fide offers for disqualifying CWR is the fact that SourceAmerica expanded the

27

number of presenters from three, to four. But because the Court declines to find that

28

action inequitable, there is no reason to discount CWR’s proposal in the instant counter35
3:14-cv-00751-GPC-AGS

1

factual analysis. Moreover, the fact that the other NPAs’s proposals are not in evidence

2

is no reason to discount the possibility that they might have succeeded. Indeed, Bona

3

Fide cannot simply paper over an evidentiary lacuna for which it bears the burden of

4

production by stating carte blanche that it was told by SourceAmerica that it had

5

submitted “an excellent plan.” (ECF No. 604, at 17.) As Bona Fide was instructed at the

6

November 16, 2018 hearing, it must prove the requisite proximate causal relationship by

7

demonstrating that it was reasonably certain to prevail on any given opportunity.

8

Without demonstrating that it had a superior submission vis-à-vis any of the other NPAs

9

(minus the contested credentials) the Court cannot conclude that it would have been

10

reasonably certain to prevail.

11
12

Based on the foregoing, the Court cannot conclude that there was a direct and
proximate relationship between any unfair imposition of
requirements and Bona Fide’s loss of SSN 1944. Summary judgment as to SSN 1944

13
14

is proper.

15

5. Opportunity No. 2075
Opportunity No. 2075 was a Total Facilities Management (“TFM”) Tier 411 project

16
17

valued at approximately

18

Intelligence Agency in Missouri. Bona Fide argues that an incorrigible conflict of

19

interest pervaded the design and drafting of the Opportunity: by Bona Fide’s account,

20

SourceAmerica unfairly required NPAs to submit evidence of current TS/SCI clearance

21

and implemented a requirement that any NPAs must subcontract with a Service Disabled

to be performed for the National Geospatial

22
23
24
25
26
27
28

11

In 2015, SourceAmerica implemented a rubric for grouping and characterizing available
opportunities according to a system of tiered classifications known as the TFM Tiers. (See, e.g., ECF
No. 128, at 205.) AbilityOne projects and NPAs are both subject to Tier classifications. AbilityOne
projects are assigned Tier levels based on the estimated contract value and complexity of the tasks
requested, and NPAs are assigned Tiers based on, inter alia, their past work history, their geographic
reach and facility management presence. Tier levels range from 1, to 4, with Tier 1 NPAs handling
contracts totaling less than $3 million in annual value, and Tier 4 NPAs operating contracts in excess of
$10 million dollars annually.
SourceAmerica provides priority and preference to responses from NPAs within the same tier
classification as the opportunity. (See ECF No. 535-5, at 88.)
36
3:14-cv-00751-GPC-AGS

1

Veteran-Owned Business (“SDVOB”) at the behest of Kent, Campa, and Kate (“KCK”).

2

(ECF No. 604, at 28.) KCK, it is alleged, was both a qualifying SDVOB which benefited

3

from the restrictive requirement, and had representation on SourceAmerica’s Board of

4

Directors. (Id.).

5

Despite Bona Fide’s demonstration of a potential conflict of interest, Bona Fide

6

cannot survive summary judgment as to Opportunity No. 2075. Bona Fide failed to

7

prove that it lost Opportunity No. 2075 directly and proximately as a result of

8

SourceAmerica’s actions. First, and most critically, Bona Fide never submitted a

9

proposal for this Opportunity, making any finding that it might have prevailed thereupon

10

a matter of pure conjecture and speculation. Although Bona Fide attempts to diminish

11

the significance of this fact by arguing that it was deterred from applying because of

12

SourceAmerica’s prohibitive TS/SCI and SDVOB requirements, it has not pointed the

13

Court to any authority indicating that a court may overlook a significant, intervening

14

event—such as the plaintiff’s failure to enter a bid in the first place—in evaluating the

15

existence vel non of proximate cause.

16

In any event, it seems beyond peradventure that Bona Fide, as a Tier 1 NPA,

17

would have been woefully underqualified for the Opportunity. As explained supra in

18

footnote 11, Tier 4 projects, like Opportunity No. 2075, typically involve complex, high-

19

value operations. It is undisputed that the largest contract Bona Fide has handled has an

20

annual value of less than $500,000. To the extent that Bona Fide has suggested that it

21

might have sought to partner with a larger NPA,

22

such joint proposal was ever submitted for consideration by SourceAmerica, and the

23

hypothetical competitiveness of any such partnership cannot long detain the Court. See

24

Gemalto, 2009 WL 464484, at *4 (declining to credit evidence of lost profits based on

25

speculation and contingencies). Summary judgment is granted with respect to

26

Opportunity No. 2075.

27

for this Opportunity, no

6. Opportunity No. 2161

28
37
3:14-cv-00751-GPC-AGS

1

SSN 2161 was a custodial services contract in Puerto Rico with an estimated

2

annual value of

3

2161 was plagued with an intractable conflict of interest. According to Bona Fide,

4

SourceAmerica and the winning NPA, TCS, had a pre-existing understanding that TCS

5

would be awarded SSN 2161. (ECF No. 604, at 25.)

6

Bona Fide alleges that the source-selection process for SSN

The Court agrees that there are some signs of inequity in the way that

7

SourceAmerica designed and allocated SSN 2161. For one, the record evidence indicates

8

that SourceAmerica and TCS

9
10
11
12

Joseph
Diaz testified

13
14
15
16
17
18

If a jury believes that a conflict of interest permeated the design and allocation of

19

SSN 2161, as it reasonably might in light of the summary judgment evidence, the next

20

question becomes whether absent this conflict of interest, Bona Fide was reasonably

21

certain to prevail over TCS. Bona Fide argues that it would be problematic for this Court

22

to hold it to a set of selection criteria designed with another NPA in mind (ECF No. 604,

23

at 23–24), but does not otherwise provide the Court with any reason to believe that it

24

would have been qualified to perform the requested work in Puerto Rico. Moreover,

25

Bona Fide, citing Mario Industries, 274 Va. at 457–58, also argues that the Court need

26

not concern itself about the other three NPAs that submitted responses, since their

27
12

28
38
3:14-cv-00751-GPC-AGS

1

proposals were not included as part of the record. (ECF No. 604, at 26.) Because the

2

other NPAs’s proposals are not in evidence, and because TCS is alleged to be ineligible

3

to compete owing to the conflict of interest, Bona Fide reasons that it, as the only non-

4

conflicted NPA with a proposal in the record, should be given the green light to make its

5

pitch to a jury.

6

In so arguing, however, Bona Fide both misreads Mario Industries, and turns the

7

summary judgment standard on its head. The Virginia Supreme Court’s holding in Mario

8

Industries—that the party claiming damages for lost profits need not show evidence of

9

the amount of a competitor’s winning bid—cannot be imported wholesale into this case.

10

There, it was unnecessary for Mario to demonstrate the differences between its

11

unavailing bid and the ultimately successful one, because, given the long-standing

12

relationship between Mario and the Hilton Garden Inn, and their exclusivity agreement, it

13

was not at all speculative to conclude that but-for Cook’s erroneously-high bid, Mario

14

would have continued to be the Hilton Garden Inn’s lighting provider of choice. 274 Va.

15

at 457–58. Here, however, there is no similarly-strong indication that Bona Fide would

16

have otherwise acceded to SSN 2161. Moreover, once the moving party, i.e.,

17

SourceAmerica, has challenged a necessary element of Bona Fide’s claim—i.e.,

18

proximate causation—the burden shifts to Bona Fide to produce evidence sufficient to

19

resist summary judgment.
Thus, any failure to produce the other NPAs’s proposals, or to assert Bona Fide’s

20
21

ability to meet non-conflicted requirements of SSN 2161, must be laid squarely at its feet.

22

Summary judgment is proper.
7. Opportunity No. 237913

23
24
25
26
27
28

13

Bona Fide addressed SSN 2379 in its ex parte motion for leave to file a supplement. (ECF No.
594.) That ex parte motion contained an appendix laying out “a portion of its anticipated argument.”
(Id. at 11.) In response, the Court noted that, given the arguments in Bona Fide’s anticipated argument,
“ at least as was demonstrated with respect to Sources Sought Notice 2379, that there is competent
summary judgment evidence, already in the record, which might create a genuine issue as to causation,”
warranting leave to supplement. (ECF No. 600, at 4 (emphasis added).) Bona Fide takes that comment
39
3:14-cv-00751-GPC-AGS

1

SSN 2379 was a TFM Tier 1 opportunity for services at Peoria, Illinois, valued at

2

. This contract was ultimately cancelled after the AbilityOne Commission

3

determined that there would be an adverse impact on the incumbent service provider.

4

Bona Fide contends that SourceAmerica breached the Settlement Agreement by (1)

5

erroneously providing branch financial information, instead of parent company

6

information to the AbilityOne Commission for its adverse impact determination, and (2)

7

by failing to petition the AbilityOne Commission to re-visit its adverse impact

8

determination with parent company information once SourceAmerica knew that Bona

9

Fide had submitted a proposal. Bona Fide argues that it would have been awarded SSN

10

2379 absent an adverse impact determination because it was the only Tier 1 NPA to have

11

submitted a proposal.
SourceAmerica disputes that it “erroneously” provided information to the

12
13

AbilityOne Commission. It contends that the AbilityOne Commission was permitted to,

14

and in fact exercised its discretion to base its adverse impact determination on the

15

financial impact of the branch, instead of the overall parent company.

16

The Court agrees with SourceAmerica that the record evidence cited by Bona Fide

17

does not support its claim that SourceAmerica erred in providing only the incumbent

18

branch financial information to the AbilityOne Commission. The deposition testimony

19

relied on by Bona Fide14 instead indicates that it was up to the AbilityOne Commission

20

whether to consider branch or parent company information (ECF No. 558-25, at 23, 37),

21

and that the deponent recalled that SourceAmerica had engaged in efforts to get the

22

Commission to reconsider. (Id. at 35, 47.)

23
24

Because Bona Fide has no evidence that SourceAmerica breached the Settlement
Agreement with respect to SSN 2379, it cannot argue that the breach was proximately

25
26
27

as a firm ruling on whether there was proximate causation; it is not.
14

28

Bona Fide incorrectly identified the deponent as Mr. Stream, but it the actual deposition cited
contained testimony from Mr. Kevin Schmidt.
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1

related to its loss of the opportunity. In any event, even assuming that Bona Fide proved

2

breachful conduct, Bona Fide has not articulated through argument, or designated

3

supporting evidence in the record that it was, at the minimum, qualified for the

4

opportunity. While Bona Fide seems to gesture at its qualifications by pointing out that

5

its Tier level matched that on the SSN, that fact, standing alone, says nothing about

6

whether its proposal demonstrated a capability to perform the services requested by the

7

SSN. Bona Fide’s proof on this SSN is comparable to the evidence considered in

8

Gemalto, where “plaintiffs’ evidence that the named plaintiffs would have made the sales

9

that they claim lost profits from is speculative and based on contingencies.” 2009 WL

10

464484, at *4. Summary judgment is proper.

11
12

8. Opportunity No. 2381
Opportunity 2381 was a high-profile custodial services contract for the United

13

States Senate Office Buildings in Washington D.C. with an estimated annual value of

14

$650,000. Five NPAs submitted proposals, and ultimately, Davis Memorial Goodwill

15

Industries (“Davis Memorial”) was selected.

16

Bona Fide argues that Davis Memorial’s award of Opportunity No. 2381 came

17

about as a result of a conflict of interest. Bona Fide alleges that Davis Memorial, as one

18

of 161 member organizations under Goodwill International, benefited from Goodwill

19

International’s connections with SourceAmerica. At the time of Opportunity No. 2381,

20

Goodwill International was represented on the Board of Directors of SourceAmerica by

21

Catherine Meloy and Jim Gibbons. According to Bona Fide, the presence of Mr.

22

Gibbons and Ms. Meloy on the Board of Directors somehow caused SourceAmerica’s

23

“evaluators [to] engage[] in post-hoc evaluations of several SSN 2381 factors that

24

favored [Davis Memorial] and unfairly and inequitably disadvantaged Bona Fide.” (ECF

25

No. 604, at 22.)

26

After examining the record pages cited by Bona Fide, the Court agrees with

27

SourceAmerica that there is no evidence that SourceAmerica improperly applied any of

28

the SSN 2381 factors to benefit Davis Memorial. More importantly, Bona Fide never
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1

asserts that it was otherwise qualified to supply the services sought by Opportunity No.

2

2381. It only argues that it ought to have won the opportunity because the other NPAs

3

are also alleged to have benefited from SourceAmerica’s problematic post-hoc

4

evaluations, and must be disqualified on that basis. Because the Court finds no improper

5

application of any of the SSN 2381 factors, it has no reason to discount the possibility

6

that one of the other NPAs could have been awarded the contract. In such a case, it

7

would be too speculative to conclude that Bona Fide was reasonably certain to have won

8

the contract. Summary judgment is proper as to SSN 2381.

9

9. Opportunity No. 2693

10

SSN 2693 is a custodial and related services contract at the Wright-Patterson AFB

11

with an annual value of $840,000. Its “primary service requirements” include routine

12

custodial services, snow and ice removal, as well as Clean Room cleaning. (ECF No.

13

558-19, at 17.) Nine NPAs submitted proposals and CWR was ultimately selected.
Bona Fide contends that SourceAmerica recommended CWR “on the basis of post-

14
15

hoc standards” that made “prior clean room experience ‘critical and ‘required’ for an

16

award,” when no such prior experience was specified in the SSN. (ECF No. 604, at 18.)

17

According to Bona Fide, despite the absence of any hard and fast requirement of prior

18

experience with clean rooms, SourceAmerica advised Bona Fide during a post-award

19

debrief that the reason it was not selected to provide services at Wright-Patterson AFB

20

was because prior clean room background was “critical.” (ECF No. 558-19, at 23.) Bona

21

Fide further posits that it is canonical procurement law that a buying agency “may not

22

solicit proposals on one basis and make award on another basis,” Dubinsky v. United

23

States, 43 Fed. Cl. 243, 247–48 (1999).

24

SourceAmerica contests that the SSN adequately disclosed the requirement of past

25

clean room experience. SourceAmerica refers the Court to a passage in the SSN which

26

states:

27
28

T[he primary service requirements] also includes ‘Clean Room’ cleaning for
Buildings 20620 and 20644, which requires the use of specific cleaners that
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1
2

are provided by the government. Clean room gowns shall be worn when
entering the Clean Rooms. Refer to Section 1.1.6 of the provided draft PWS
for specific details regarding Clean Room requirements.

3

(ECF No. 558-8, at 12.) It also highlights a later passage in that same document which

4

asks responding NPAs to “ensure [that] any relevant past performance with . . . Clean

5

Room cleaning, is included.” (Id.)

6

The Court finds that Bona Fide has identified a triable issue of fact as to whether

7

SourceAmerica invoked post-hoc evaluation standards with respect to SSN 1692.

8

Although aspects of the SSN indicated that past experience would be relevant, nothing in

9

that notice commanded that prior experience with clean room cleaning was mandatory.

10

Indeed, here Bona Fide is arguing that the indispensability of Clean Room experience

11

was newly-instituted, and that is not contradicted by statements in the SSN which

12

required responding NPAs to enumerate “any relevant past performance with . . . Clean

13

Room cleaning.” Indeed, a reasonable jury could find that SourceAmerica properly

14

discounted Bona Fide because it didn’t meet its preference for an NPA with past clean

15

room experience; on the other hand, that same jury could, based on Ms. Robinson’s

16

deposition testimony, among other things, also find that SourceAmerica hardened the

17

preference for clean room experience into a firm requirement for less than equitable

18

reasons.

19

Furthermore, the Court agrees with Bona Fide that there is sufficient evidence that,

20

but for SourceAmerica’s improper reliance on undisclosed evaluative standards, Bona

21

Fide would have been reasonably certain to have prevailed as to SSN 1692.

22

SourceAmerica argues that the Court should not so find because only the proposals from

23

Bona Fide and CWR are in evidence, and without a side-by-side comparison of the merits

24

of all the proposals, no such conclusion ought be drawn. However, Bona Fide

25

convincingly argues that a reasonable jury could compare Bona Fide’s and CWR’s

26

technical solutions and find Bona Fide’s submission to be superior. (ECF No. 604, at

27

19.) That being the case, it is of no moment that the other NPAs’ responses are not

28

before the Court: if there is a colorable argument that Bona Fide’s submissions were
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1

more, or at least as, meritorious as the one submitted by the winning NPA, it follows that

2

a legitimate inference may be made that Bona Fide’s proposal was also superior to those

3

NPAs’s who did not make the cut. Atrium, 266 Va. at 294. Summary judgment as to

4

SSN 2693 is denied.

5
6

10. Opportunity No. 2705
Opportunity No. 2705 was a transfer of custodial services contract for Shaw Air

7

Force Base, South Carolina, with an estimated annual value of

8

Fide, relying on the opinion of its expert, Mr. Jans, alleges that SourceAmerica breached

9

its Settlement Agreement obligations when it “chose” to combine two existing contracts

Bona

10

into a single contract for comprehensive base-wide services, an election which

11

necessarily disadvantaged smaller NPAs like itself. (ECF No. 604, at 26.) Bona Fide

12

also contends that SourceAmerica used a financial sustainability worksheet—which

13

allegedly “did not reflect any customer requirement”—to appraise NPA responses. (ECF

14

No. 604, at 26.) CWR ultimately secured Opportunity No. 2705, whereas Bona Fide was

15

appraised as having an “overall acceptable technical plan,” but was not selected owing to

16
By Bona Fide’s

17
18

account, but for these two inequitable and unfair actions, it was reasonably certain to

19

have prevailed.

20

SourceAmerica, on the other hand, argues that it did not make an election to merge

21

two contracts into Opportunity No. 2705. It points out that Opportunity No. 2705 was a

22

“Transfer Opportunity” for base wide janitorial services, which

23
24
25

The thrust of this argument is that SourceAmerica was merely passing on a pre-

26

determined, pre-packaged Opportunity, and therefore did not “choose” to bundle two

27

smaller contracts together. But, SourceAmerica does not adequately address the heart of

28

Mr. Jans’s contention, which is that it was been possible for SourceAmerica to
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1

disentangle the two contracts from each other, even upon transfer.

2
3
4
5

SourceAmerica additionally claims that there was nothing improper about the

6

financial sustainability worksheet, because the only proof Bona Fide cited for the

7

proposition—a deposition exchange with SourceAmerica’s Thomas Hawkins—did not

8

evidence any impropriety. (ECF No. 607, at 27.) While the Court agrees that Mr.

9

Hawkins’s deposition does not contradict SourceAmerica’s claim, it does find that other

10

evidence on file shows that SourceAmerica recognized that Bona Fide should have

11

acceded to higher marks with respect to financial sustainability.15
Because SourceAmerica’s stated reasons for not choosing Bona Fide for

12
13

Opportunity No. 2705 were

14

, and because Bona Fide adequately challenged the fairness of those two

15

factors, the Court will deny summary judgment. The evaluative documents associated

16

with Opportunity No. 2705 indicate that, but for those two aspects, Bona Fide had an

17

acceptable proposal. And while the estimated value for the Shaw AFB project is

18

somewhat higher than Opportunities previously undertaken by Bona Fide, the value

19

differential is not so stark, in light of Bona Fide’s demonstrated past experience with

20

custodial contracts. Thus, the Court finds “evidence proving the causal connection . . .

21

‘sufficient to take the question out of the realm of mere conjecture, or speculation, and

22

into the realm of legitimate inference,’” to warrant posing the proximate cause issue to

23

the jury. Atrium, 266 Va. at 294 (quotation marks and citation omitted).

24

11. Opportunity No. 2783

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26
15

27

Specifically, the NPA Recommendation Process Team Evaluation Matrix for No. 2705 captured
the evaluators’ appraisal of Bona Fide as follows:

28
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SSN 2783 involved custodial and related services contract for four facilities in

2

Chicago, Illinois, with an estimated annual value of

3

that SourceAmerica breached the Settlement Agreement when it awarded CWR the

4

contract. Specifically, Bona Fide accuses SourceAmerica of disregarding SSN 2783’s

5

requirements and instead relying on an undisclosed,

6

. Bona Fide claims

in making the contract recommendation. (ECF No. 606, at 23 (Sealed).)

7

Bona Fide was told by SourceAmerica’s Executive Director, Chris Stream. at debriefing

8

that

9
10
11

Bona Fide, however, points out that the deficiencies noted by Mr.
Stream were all manufactured. For example, Mr. Stream apparently

12
13

However, Bona Fide points out that it

14
15
16
17
18

Mr. Stream also evidently
faulted Bona Fide
(Id. at 145.) But, Bona Fide points out that

19
20
21
22

The mismatch between SourceAmerica’s stated reasons for eliminating Bona Fide,

23

and the actual proposal submitted, led Bona Fide to conclude in its appeal letter to the

24

AbilityOne Commission that

25
26
27
28
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The Court concludes on the foregoing that a reasonable jury could find that

2

SourceAmerica breached its obligation to be fair, equitable, and objective to Bona Fide

3

with respect to SSN 2783. Indeed, the internal SourceAmerica evaluation matrix for SSN

4

2783 indicates that

5
6

And the section under which SourceAmerica
critiqued Bona Fide’s

7
8

The discrepancies between Mr. Stream’s debrief of Bona Fide’s

9

proposal and the evaluation conducted by the SourceAmerica team further inclines the

10

Court to find a triable issue as to breach.

11

The Court then looks to whether there is a causal nexus between SourceAmerica’s

12

breach and the resulting loss of the contract. Bona Fide argues that a jury could find that

13

it was reasonably certain to prevail on SSN 2783, given that Bona Fide had considerable

14

ties in the Chicago, Illinois area, provided customized plans of how it would service the

15

different buildings in SSN 2783, and had proven experience for snow removal for other

16

GSA facilities in Chicago. (ECF No. 604, at 21.) Bona Fide asserts that, by contrast,

17

CWR’s winning proposal was less tailored to the project’s requirements and contained

18

only generic statements about its various certifications and credentials. (Id. at 22.) It

19

further argues that absent the evident bias against Bona Fide, Bona Fide should have been

20

selected. Because both CWR’s proposal and Bona Fide’s are in evidence, and because

21

there is circumstantial evidence of a causal connection between Bona Fide’s loss of SSN

22

2783 and SourceAmerica’s unstated or unfairly-applied evaluative criteria, the Court

23

denies summary judgment.

24

VI.

Conclusion

25

For the above reasons, the Court construes the terms of the Settlement Agreement

26

as a matter of law, and in accordance with that interpretation, grants summary judgment

27

with respect to Opportunities 2381, 2379, 2161, 1944, 1692, and 2075. Summary

28

judgment is denied with respect to Opportunities 1483, 1741, 2693, 2705, and 2783.
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IT IS SO ORDERED.
Dated: March 26, 2019

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