BROOKS RANGE CONTRACT SERVICES, INC. v. USA
Filing
35
PUBLISHED OPINION. Signed by Chief Judge Emily C. Hewitt. (tm3) Copy to parties.
In the United States Court of Federal Claims
No. 11-700 C
(E-Filed Under Seal: December 19, 2011) 1
(Filed with Redaction: January 6, 2012)
________________________________________
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BROOKS RANGE CONTRACT
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SERVICES, INC.,
)
)
Plaintiff,
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v.
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THE UNITED STATES OF AMERICA,
)
)
Defendant,
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and
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URBAN SERVICES GROUP, INC., and
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MERIDIAN MANAGEMENT CORPORATION )
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Defendant-Intervenors.
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________________________________________ )
Bid Protest; Motion to Dismiss;
Cross-Motions for Judgment on
the Administrative Record
Johnathan M. Bailey, San Antonio, TX, for plaintiff.
1
This Opinion was filed under seal on December 19, 2011. The court directed that, if any party
believed that the December 19, 2011 Opinion contained protected material that should be
redacted before publication, that party shall, by motion filed on or before Tuesday, December 27,
2011 at 12:00 noon Eastern Standard Time, request that such protected material be redacted.
Plaintiff did not propose any redactions. On December 21, 2011, in response to the court’s
directive, defendant filed a motion (defendant’s Motion) requesting redactions of the actual
identities of each unsuccessful offeror except the plaintiff and noting that the reference to “Mr.
Len Wilson” that was quoted on page fourteen should be corrected to state “Ms. Len Wilson.”
Def.’s Proposed Redactions for December 19, 2011 Order, Dkt. No. 34. Defendant’s Motion is
GRANTED. The court substitutes generic identifiers for the unsuccessful offerors (except for
plaintiff) and changes the reference to Len Wilson on page fourteen to “[Ms.] Len Wilson.”
Devin A. Wolak, with whom were Tony West, Assistant Attorney General, Jeanne E.
Davidson, Director, Reginald T. Blades, Jr., Assistant Director, and Ryan M. Majerus, of
counsel, Commercial Litigation Branch, Civil Division, United States Department of
Justice, Washington, DC, for defendant. Leigh Ann Bunetta, Regional Counsel for the
General Services Administration, Denver, CO, of counsel.
Michael A. Gordon, Washington, DC, for defendant-intervenors. Fran Baskin,
Washington, DC, of counsel.
OPINION
HEWITT, Chief Judge
This is a post-award bid protest brought by plaintiff Brooks Range Contract
Services, Inc. (Brooks Range or plaintiff). Plaintiff challenges the award of a contract for
building management services at two federal buildings in Colorado to defendantintervenors Urban Services Group, Inc. and Meridian Management Corporation (Urban
and Meridian or intervenors). See generally Compl.
Before the court are plaintiff’s Verified Complaint for Declaratory and Injunctive
Relief (Complaint or Compl.), Docket Number (Dkt. No.) 1, filed October 24, 2011;
Plaintiff’s Motion for Judgment upon the Administrative Record, Dkt. No. 26, attached to
which is Plaintiff’s Memorandum in Support of Motion for Judgment upon
Administrative Record (plaintiff’s Memorandum or Pl.’s Mem.), Dkt. No. 26-1, filed
November 8, 2011; Defendant’s Motion to Dismiss, Cross-Motion for Judgment upon the
Administrative Record, and Response to Plaintiff’s Motion for Judgment upon the
Administrative Record (defendant’s Combined Motion or Def.’s Combined Mot.), Dkt.
No. 27, filed November 15, 2011; Intervenors’ Cross-Motion for Judgment on the
Administrative Record (intervenors’ Cross-Motion or Ints.’ Cross-Mot.), Dkt. No. 28,
filed November 15, 2011; Plaintiff’s Response to Defendant’s and Intervenor[s’] Motion
for Jud[g]ment on the Administrative Record (plaintiff’s Response or Pl.’s Resp.), Dkt.
No. 29, filed November 18, 2011; Defendant’s Reply in Support of Its Motion to Dismiss
and Motion for Judgment upon the Administrative Record (Def.’s Reply), Dkt. No. 30,
filed November 21, 2011; and Intervenors’ Reply to Plaintiff’s Response to Defendant’s
and Intervenors’ Motion for Judgment on the Administrative Record (Ints.’ Reply), Dkt.
No. 31, filed November 21, 2011.
Defendant filed the Administrative Record (AR), Dkt. No. 23, on November 1,
2011. The parties completed briefing on November 21, 2011 and the court held oral
2
argument on the motions telephonically on Tuesday, November 22, 2011 at 11:00 a.m.
Eastern Standard Time. 2 See Order of Oct. 24, 2011, Dkt. No. 14, at 2.
I.
Background
A.
Sources Sought Announcement and Solicitation
On May 5, 2011, the General Services Administration (GSA or the agency) issued
Solicitation No. GS-08P-11-JB-C-0028 (Solicitation) for building operations and
maintenance, custodial and groundskeeping services at the David Skaggs Research
Center in Boulder, Colorado, and the Fort Collins Federal Office Building in Fort Collins,
Colorado. AR Tab 3A (Solicitation) 19. The Solicitation required offerors to submit
proposals by June 8, 2011. Id. at 24.
The original Solicitation was limited to FSS 03FAC schedule holders. Before
issuing the Solicitation, GSA issued a “Sources Sought” announcement on eBuy, see AR
Tab 17 (Apr. 20, 2011 Note to File) 383, for operations and maintenance, custodial
services, and groundskeeping services at two federal facilities in Colorado, AR Tab 15
(Sources Sought Announcement) 372. The Announcement stated, “This procurement
will be open only to companies currently on contract under GSA FSS Schedule
03FAC/811 002 Complete Facilities Maintenance. Solicitation packages will be made
available only to qualified companies that have responded to this Sources Sought
Synopsis.” Id. 3
Twenty-five companies responded to the Sources Sought announcement. AR Tab
17 (Apr. 20, 2011 Note to File) 383. Plaintiff and defendant-intervenors were among
eleven contractors selected by the government to receive requests for proposals. Id.
Proposals were to be evaluated on a best-value basis. AR Tab 3A (Solicitation)
24. The original Solicitation required the evaluation of three factors: price, technical
capabilities and past performance. Id. The Solicitation stated:
2
The oral argument held on Tuesday, November 22, 2011 was recorded by the court’s
Electronic Digital Recording (EDR) system. The times noted in citations to the oral argument
refer to the EDR record of the oral argument and, in some cases, may not correspond exactly to
the time at which the proceeding was held.
3
In addition, the Federal Acquisition Regulations (FAR) provide that when an agency “plac[es]
orders under Federal Supply Schedule contracts using the procedures of [FAR] 8.405, ordering
activities shall not seek competition outside of the Federal Supply Schedules or synopsize the
requirement.” FAR 8.404(a).
3
Price is of the single greatest importance. Technical Capabilities is
weighted significantly more important than Past Performance. Technical
Capabilities and Past Performance factors, when combined, are weighted
slightly more important than Price. Using this criteria, award will be made
to the Offeror having the highest combined Technical Capabilities and Past
Performance rating possible representing the best value when compared to
any lower priced offeror.
Id.
B.
Amendments 001 and 002
Prior to the submission deadline of June 8, 2011, GSA issued two amendments to
the Solicitation, Amendment 001 and Amendment 002. AR Tab 3B (Amendment 001);
AR Tab 3C (Amendment 002). Amendment 001 added “small business status” to the
proposal evaluation factors and changed the description of how the non-price factors are
to be weighted. AR Tab 3B (Amendment 001) 215. The amended description stated,
“Proposals will be evaluated on Price, Technical Capabilities, Small Business Status, and
Past Performance. Small Business Status is equal in weighting to Past Performance.
Technical Capabilities is weighted approximately twice as important as either Small
Business Status or Past Performance. Non-price factors, when combined, are more
important than price.” Id.
Amendment 002 incorporated a question-and-answer exchange with offerors. AR
Tab 3C (Amendment 002) 218 (“Contract Questions and Answers . . . is incorporated
into the solicitation”). The questions and answers included an exchange regarding joint
ventures. AR Tab 3C (Amendment 002) 230. Question 87, reflecting an inquiry by
Urban and Meridian about submitting a proposal as a joint venture, AR Tab 28 (May 17,
2011 email exchange between Tannis Taylor and Cheryl Ansaldi) 1484, asked, “Can a
large business schedule holder form a joint venture with a small business schedule holder
and receive small business evaluation credit?”, AR Tab 3C (Amendment 002) 230. The
answer stated, “A joint venture would have to be considered a separate legal entity. Even
if both parties were on Schedule, the joint venture itself, would not be considered a
Schedule holder.” Id. The answer noted, however, that “a large business schedule holder
may form a Contractor Teaming Agreement [(CTA or Teaming Agreement)] with a
qualified small business schedule holder and receive the small business evaluation
credit.” Id.
C.
GSA Guidance on CTAs
4
The GSA website provides guidance regarding CTAs. One GSA webpage titled
“Schedule 03FAC User FAQ” explains “A GSA Schedule Contractor Team Arrangement
(CTA) is an arrangement between two or more GSA Schedule contractors to work
together to meet agency requirements.” AR Tab 3I (GSA Online Guidance) at 280,
available at http://www.gsa.gov/portal/content/230689. The GSA webpage explains that
the CTA documents are “solely between the team members,” and that “GSA strongly
encourages the submission of the CTA document in response to a Request for Quotation
(RFQ), so that an ordering activity may gain an understanding of how the arrangement
will work, and may identify any areas of responsibility that may require clarification.”
Id. at 287, available at http://www.gsa.gov/portal/content/202257.
GSA does not provide a sample GSA Schedule CTA; it is expected that CTA documents
“will vary from one CTA document to another.” Id.
Another GSA webpage, titled “Elements of a CTA Document” provides somewhat
more detailed guidance, stating, for example, that the CTA document “should” list the
types of activity covered by the arrangement, specify the duration of the team
arrangement, “specify and describe the individual duties of the team members,” specify
rates and pricing, establish liability, and “should state that all team members remain
independent contractors, responsible for their own employees.” AR Tab 3I (GSA Online
Guidance) 283-84, available at http://www.gsa.gov/portal/content/202253. The GSA
webpage also states, “The CTA document should not create a joint venture or separate
subsidiary.” Id. at 284.
D.
Proposals
Five offerors, including Urban and Meridian and Brooks Range, submitted timely
proposals. See AR Tab 22 (CO’s Proposal Analysis) 1345; AR Tab 19 (Urban and
Meridian’s Proposal) 391; AR Tab 21 (Brooks Range’s Proposal) 1149. Urban and
Meridian’s proposal contained a draft CTA. AR Tab 19 (Urban and Meridian’s Proposal)
399-413. A version of the draft CTA with minor changes was executed by
representatives of both Urban and Meridian on June 28, 2011. AR Tab 3E (executed
CTA) 260. Urban and Meridian’s draft CTA and the later executed version, form the
basis of plaintiff’s Complaint. See generally Compl.
Both the draft CTA and the executed CTA are titled “Urban Services Group,
Inc./Meridian Management Corporation Teaming Agreement.” AR Tab 19 (Urban and
Meridian’s Proposal) 399, AR Tab 3E (executed CTA) 249. The first few pages of the
CTAs contain provisions and references that appear to conform to the GSA guidance
regarding CTAs. For example, both CTAs state, “The parties hereto hereby associate
themselves as team members for the purpose of performing and completing the Work
contemplated by the Contract.” AR Tab 19 (Urban and Meridian’s Proposal) 400; AR
5
Tab 3E (executed CTA) 250. Additional provisions contemplate, among other things, a
single bank account held in the team’s name and the purchase of property in the name of
the team and provide that neither member could withdraw from the team. AR Tab 19
(Urban and Meridian’s Proposal) 405-409; AR Tab 3E (executed CTA) 255-58.
E.
Evaluation and Award
An agency acquisition team, composed of the contracting officer and the sixmember technical review board (TEB), reviewed the proposals. See generally AR Tab
22 (Proposal Analysis); Tab 23 (CO’s Notes); Tab 24 (TEB Report); Tab 25 (TEB
Worksheets); Tab 26 (Past Performance Worksheets); see also AR Tab 18 (Evaluation
Process) 388. Contracting officer Tannis Taylor (CO or Ms. Taylor) conducted an initial
review of proposals, AR Tab 23 (CO’s Notes) 1351; the TEB then conducted a technical
review, AR Tab 24 (TEB Report) 1354; then Ms. Taylor determined that Urban and
Meridian would “result in the greatest overall benefit to the Government in response to
the requirements,” AR Tab 22 (CO’s Proposal Analysis) 1350.
The Solicitation described how the agency was to weigh price and non-price
factors. It stated:
Proposals will be evaluated on Price, Technical Capabilities, 4 Small
Business Status, and Past Performance. Small Business Status is equal in
weighting to Past Performance. Technical Capabilities is weighted
approximately twice as important as either Small Business Status or Past
Performance. Non-price factors, when combined, are more important than
price.
AR Tab 3B (Amendment 001) 215 (footnote added).
In the agency’s evaluation of non-price factors, plaintiff Brooks Range received
one “adequate,” three “good” and one “exceptional” ratings in the five technical
subcategories. See AR Tab 22 (CO’s Proposal Analysis) 1348. Plaintiff’s past
performance also earned a “good” rating. Id. Plaintiff did not receive Small Business
Status evaluation credit. See AR Tab 24 (TEB Report) 1354. Intervenors, Urban and
Meridian, received one “adequate,” two “good” and two “exceptional” ratings in the five
technical subcategories. See AR Tab 22 (CO’s Proposal Analysis) 1348. Intervenors
also received a “good” past performance rating and Small Business Status evaluation
credit (based on their CTA). See id.; AR Tab 23 (CO’s Notes) 1352. [Offeror X], a third
offeror that becomes relevant when assessing plaintiff’s standing for this bid protest,
4
Technical capabilities were evaluated through five subcategories. See AR Tab 3A
(Solicitation) 25; AR Tab 22 (CO’s Proposal Analysis) 1348.
6
received two “marginal” and three “good” ratings in the five technical subcategories. AR
Tab 22 (CO’s Proposal Analysis) 1348. [Offeror X] received an “adequate” rating for its
past performance, and it, too, received Small Business Status evaluation credit. Id.
The contracting officer also examined the prices of each offeror in relation to each
other and to an independent government estimate (IGE). Id. Urban and Meridian,
[Offeror X], and Brooks Range all submitted offers priced below an IGE of
$14,326,963.70. Id. Of these three offerors, Brooks Range submitted the highest total
price ($13,630,971.71), Urban and Meridian submitted the next highest ($13,300,872.00),
and [Offeror X] submitted the lowest ($12,575,760.00). Id.
The agency then made an award “without contractor discussions, and without
negotiations.” Id. at 1343. The contracting officer’s proposal analysis states, “Evaluation
credit was given for Small Businesses and Large Businesses operating with a Small
Business partner under a [CTA]” and “Prices were checked for clerical accuracy and
compared against the Government Estimate/Opinion of Probabl[e] Cost for realism.” Id.
at 1345. Urban and Meridian’s proposal was “determined to offer the best value to the
Government,” AR Tab 22 (CO’s Proposal Analysis) 1349; and offerors were so notified
on June 27, 2011, AR Tab 29 (Award Email) 1485. The government awarded the
contract to Urban and Meridian on July 1, 2011. AR Tab 3F (Award Letter) 264 (stating
that the “task order is hereby issued to the contractor team of [Urban and Meridian] in the
amount of $13,300,872”).
F.
Agency Inquiry and GAO Protest
On July 8, 2011, following award of the contract to intervenors, plaintiff emailed
the agency to ask whether Urban and Meridian had received the contract as a joint
venture or as a prime contractor-sub contractor (“prime-sub”) relationship. AR Tab 3H
(GAO Protest) 272. The contracting officer replied to plaintiff by email on July 11, 2011,
stating that the contract “was awarded to Meridian and Urban under a Contractor
Teaming Arrangement in which Urban is the majority partner.” Id. The contracting
officer replied further that “[w]e would not have accepted a joint venture situation unless
the jv itself (not just the partners) were on schedule.” Id. In a follow-up email on July
11, 2011 Brooks Range asked the contracting officer to “clarify who the Prime contractor
was, Urban or Meridian.” Id. at 273. The contracting officer replied by email a few
hours later, stating, “It’s not a prime/sub relationship. The contract was awarded to the
team, subject to the terms of their CTA.” Id.
On July 11, 2011 plaintiff filed a protest at the Government Accountability Office
(GAO). See AR Tab 3H (GAO Protest) 270-76. Brooks Range alleged that “the
agency’s award of the delivery order is to an entity that does not have a FSS 03FAC
7
Schedule Contract and the Solicitation was limited to FSS 03FAC Schedule Contract
Holders.” Id. at 270. GSA filed its agency report on August 11, 2011. AR Tab 3
(Agency Report) 11. GAO denied plaintiff’s protest on October 12, 2011. See AR Tab
12 (GAO Order) 339, 343. GAO stated that the “Urban/Meridian submission in response
to the solicitation was specifically identified as a teaming agreement for the purpose of
providing services in response to the solicitation.” Id. at 343.
G.
Proceedings Before This Court
On October 24, 2011 Brooks Range filed its protest in this court. See generally
Compl. In its briefing, plaintiff contends that: (1) the Solicitation, as amended by
Amendment 002, prohibited an award to a joint venture that was not a schedule holder;
(2) Urban and Meridian formed a joint venture that was not a schedule holder; and (3) the
agency made the award to Urban and Meridian in violation of its Solicitation and GSA
requirements. 5 See Pl.’s Mem. 24, 35-36. Defendant counters, first, that plaintiff does
not have standing to bring an action within this court’s jurisdiction under 28 U.S.C §
1492(b)(1). Def.’s Combined Mot. 11. Defendant further contends that the contracting
officer’s actions were reasonable, id. at 16-23, and that the Urban and Meridian CTA
does not violate any GSA requirements, id. at 23-24.
II.
Legal Standards
A.
5
Standing
Plaintiff also argued that a “contractor team relationship” may only be a prime-sub contractor
relationship or a “partnership/joint venture” and, since the Urban Services Group, Inc. and
Meridian Management Corporation (Urban and Meridian) relationship is not a prime-sub
relationship, it must be a “partnership/joint venture.” Plaintiff’s Memorandum in Support of
Motion for Judgment upon Administrative Record (Pl.’s Mem.), Docket Number (Dkt. No.) 26-1
at 26 (citing FAR 9.601). To the extent that plaintiff’s argument challenges the Solicitation’s use
of contractor teaming agreements (CTAs) to create a third type of entity in violation of the FAR,
that argument is waived under Blue & Gold Fleet, L.P. v. United States. 492 F.3d 1308, 1313-15
(Fed. Cir. 2007) (“[A] party who has the opportunity to object to the terms of a government
solicitation containing a patent error and fails to do so prior to the close of the bidding process
waives its ability to raise the same objection subsequently in a bid protest action in the [United
States] Court of Federal Claims.”). A General Services Administration (GSA) reference manual
provides the following (very) limited guidance: “Do not confuse Schedule Contractor Team
Arrangements with the definition of [CTAs] found in FAR Subpart 9.6. None of the definitions
(the partnership/joint venture, or the prime/sub relationship) outlined in FAR Subpart 9.6 apply
to Schedule CTAs.” Administrative Record (AR) Tab 9A at 328; see also U.S. General Services
Administration, Multiple Award Schedules Desk Reference Version 4 (MAS Desk Reference) 77
(2011).
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The Tucker Act, as amended by the Administrative Dispute Resolution Act
(ADRA), 28 U.S.C. § 1491(b)(1) (2006), confers jurisdiction on this court:
to render judgment on an action by an interested party objecting to a
solicitation by a Federal agency for bids or proposals for a proposed
contract or to a proposed award or the award of a contract or any alleged
violation of statute or regulation in connection with a procurement or a
proposed procurement.
28 U.S.C. § 1491(b)(1). The court may “entertain such an action without regard to
whether suit is instituted before or after the contract is awarded.” Id.
As a threshold matter, a plaintiff must establish standing by showing that it is an
“interested party” within the court’s section 1491(b)(1) bid protest jurisdiction. See Rex
Serv. Corp. v. United States (Rex), 448 F.3d 1305, 1307 (Fed. Cir. 2006); Info. Tech. &
Applications Corp. v. United States (Info. Tech.), 316 F.3d 1312, 1319 (Fed. Cir. 2003).
To accomplish this, the United States Court of Appeals for the Federal Circuit (Federal
Circuit) has stated that a plaintiff must “establish that it (1) is an actual or prospective
bidder, and (2) possesses the requisite direct economic interest.” Rex, 448 F.3d at 1307
(citing Myers Investigative & Sec. Servs., Inc. v. United States (Myers), 275 F.3d 1366,
1370 (Fed. Cir. 2002)); see also Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d
1294, 1302 (Fed. Cir. 2001). In order to establish a direct economic interest, the protestor
“must show that there was a ‘substantial chance’ it would have received the contract
award but for the alleged error in the procurement process.” See Info. Tech., 316 F.3d at
1319. Stated differently, a protestor must demonstrate how an alleged error by the
government would result in “particularized harm” to the protestor. See Labatt Food
Serv., Inc. v. United States (Labatt), 577 F.3d 1375, 1380 (Fed. Cir. 2009). In the
absence of such a showing, this court lacks subject matter jurisdiction over the protest,
“regardless of whether the government’s conduct was arbitrary, capricious, or contrary to
law.” MED Trends, Inc. v. United States, No. 11-712, 2011 WL 5970954, at *4 (Fed. Cl.
Nov. 30, 2011).
B.
Bid Protest Standard of Review
“A bid protest proceeds in two steps.” Bannum, Inc. v. United States (Bannum),
404 F.3d 1346, 1351 (Fed. Cir. 2005). The first step involves demonstrating error, that is,
showing that the agency acted in an arbitrary and capricious manner, without a rational
basis or contrary to law. Id. The second step involves determining whether the error was
prejudicial. Id.
1.
The Plaintiff Must Establish Error
9
The court reviews a bid protest action under the standards set out in the
Administrative Procedure Act (APA), 5 U.S.C. § 706. 28 U.S.C. § 1491(b)(4); NVT
Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004). The APA provides
that an agency’s decision is to be set aside if it is “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (2006); see
also Bannum, 404 F.3d at 1351; Galen Med. Assocs., Inc. v. United States (Galen), 369
F.3d 1324, 1329 (Fed. Cir. 2004); Impresa Construzioni Geom. Domenico Garufi v.
United States (Impresa), 238 F.3d 1324, 1332 (Fed. Cir. 2001).
Under the arbitrary or capricious standard of review, an agency’s decision must be
sustained if it has a rational basis. See Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v.
State Farm Mut. Auto. Ins. Co. (State Farm), 463 U.S. 29, 43 (1983). “The arbitrary and
capricious standard applicable here is highly deferential. This standard requires a
reviewing court to sustain an agency action evincing rational reasoning and consideration
of relevant factors.” Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054,
1058 (Fed. Cir. 2000) (citing Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419
U.S. 281, 285 (1974)). In particular, the reviewing court may not substitute its judgment
for that of the agency. State Farm, 463 U.S. at 43. The question for the court is not
whether the agency is correct or whether the court would have reached the same
conclusion as the agency, but whether there was a reasonable basis for the agency’s
actions. Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (“‘If the
court finds a reasonable basis for the agency’s action, the court should stay its hand even
though it might, as an original proposition, have reached a different conclusion as to the
proper administration and application of the procurement regulations.’” (quoting M.
Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971))).
Under the APA standard of review, as applied in Scanwell Labs., Inc. v. Shaffer,
424 F.2d 859 (D.C. Cir. 1970), and now under the ADRA, “a bid award may be set aside
if either: (1) the procurement official’s decision lacked a rational basis; or (2) the
procurement procedure involved a violation of regulation or procedure.” Impresa, 238
F.3d at 1332. Challenges to decisions on the basis of a violation of a regulation or
procedure “must show ‘a clear and prejudicial violation of applicable statutes or
regulations.’” Id. at 1333 (quoting, inter alia, Kentron Hawaii, Ltd. V. Warner, 480 F.2d
1166, 1164 (D.C. Cir. 1973)).
A court reviewing an agency action in a best-value procurement must be highly
deferential. See Advanced Data Concepts, Inc., 216 F.3d at 1057-58; Fort Carson
Support Servs. v. United States (Fort Carson), 71 Fed. Cl. 571, 586 (2006). There is a
“strong presumption that government officials act correctly, honestly, and in good faith
10
when considering bids.” Savantage Fin. Servs., Inc. v. United States, 86 Fed. Cl. 700,
703 (2009), aff’d, 595 F.3d 1282 (Fed. Cir. 2010).
Moreover, a plaintiff’s burden “is elevated where the solicitation contemplates
award on a ‘best value’ basis.” Id. at 503 (citing Galen, 369 F.3d at 1330). In
determining whether an agency acted rationally, the court is particularly deferential to the
agency’s technical evaluation. L-3 Commc’ns EOTech, Inc. v. United States, 87 Fed. Cl.
656, 664 (2009); Fort Carson, 71 Fed. Cl. at 586.
2.
The Plaintiff Must Establish Prejudice
In order to prevail in a bid protest, the plaintiff must demonstrate both that an error
occurred and that the error was prejudicial. See Data Gen. Corp. v. Johnson, 78 F.3d
1556, 1562 (Fed. Cir. 1996); Alfa Laval Separation, Inc. v. United States (Alfa Laval),
175 F.3d 1365, 1367 (Fed. Cir. 1999). “If the court finds that there is no error, there is no
prejudice and the government’s decisions must be left undisturbed.” HomeSource Real
Estate Asset Servs., Inc. v. United States, 94 Fed. Cl. 466, 478 (2010) (citing Alfa Laval,
175 F.3d at 1367 (requiring that a protestor establish “significant, prejudicial error” to
prevail in a bid protest)). In the context of a post-award bid protest, “the plaintiff must
demonstrate ‘substantial prejudice’ by showing that there was a ‘substantial chance’ it
would have been awarded the contract but for the agency’s error.” Weeks Marine, Inc. v.
United States, 79 Fed. Cl. 22, 35 (2007) (quoting Bannum, 404 F.3d at 1353), aff’d in
relevant part, (Weeks Marine), 575 F.3d 1352 (Fed. Cir. 2009).
C.
Rule 12(b)(1) Motion to Dismiss
Rule 12(b)(1) governs dismissal of claims for lack of subject matter jurisdiction.
Rules of the United States Court of Federal Claims (RCFC) 12(b)(1). Subject matter
jurisdiction is a threshold matter that a court must determine at the outset of a case. Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998); PODS, Inc. v. Porta Stor,
Inc., 484 F.3d 1359, 1365 (Fed. Cir. 2007). When a defendant challenges this court’s
jurisdiction pursuant to RCFC 12(b)(1), the plaintiff bears the burden of establishing the
court’s jurisdiction by a preponderance of the evidence. Trusted Integration, Inc. v.
United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011); Reynolds v. Army & Air Force
Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). A dismissal under RCFC 12(b)(1) “is
warranted when, assuming the truth of all allegations, jurisdiction over the subject matter
is lacking.” Arakaki v. United States, 62 Fed. Cl. 244, 247 (2004) (internal quotation
marks omitted); see also Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995).
“When a party challenges the jurisdictional facts alleged in the complaint, the court may
consider relevant evidence outside the pleadings to resolve the factual dispute.” Arakaki,
62 Fed. Cl. at 247 (citing Reynolds, 846 F.2d at 747; Indium Corp. of Am. v. Semi11
Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985)); see also 2 James Wm. Moore et al.,
Moore’s Federal Practice § 12.30[3] (3d ed. 2004) (“[U]nlike a Rule 12(b)(6) dismissal,
the court need not confine its evaluation to the face of the pleadings . . . .”). If a court
determines that it does not have jurisdiction, it must dismiss the claim. See RCFC
12(h)(3).
D.
Motions for Judgment on the Administrative Record
Rule 52.1 of the RCFC provides for judgment upon the administrative record. See
RCFC 52.1. A motion for judgment upon the administrative record is distinguishable
from a motion for summary judgment. Bannum, 404 F.3d at 1355; see RCFC 52.1 Rules
Committee Note (2006) (“Summary judgment standards are not pertinent to judicial
review upon an administrative record.”). The standards and criteria governing the court’s
review of agency decisions in response to a motion for judgment on the administrative
record under RCFC 52.1 vary depending upon the specific law to be applied in the
particular case. See RCFC 52.1 Rules Committee Note (2006). Accordingly, the
standards of review and burdens of proof and persuasion are set by the terms of the
applicable substantive law--the APA as interpreted and applied in binding precedent. 28
U.S.C. § 1491(b)(4); see also supra Part II.B.
III.
Discussion
A.
Plaintiff Lacks Standing
“‘The party invoking federal jurisdiction bears the burden of establishing [the]
elements [of standing].’” Myers, 275 F.3d 1366 at 1369 (quoting Lujan v. Defenders of
Wildlife (Lujan), 504 U.S. 555, 561 (1992)). To satisfy the standing requirement in a bid
protest, the plaintiff must demonstrate that it is an interested party under 28 U.S.C. §
1491(b)(1). See Info. Tech., 316 F.3d at 1319. To establish that it is an interested party,
a plaintiff must show both that it is a prospective or actual bidder and that there was a
“‘substantial chance’ it would have received the contract award but for the alleged error
in the procurement process.” Id. The Federal Circuit has interpreted the latter
requirement to mean that “the protestor’s chance of securing the award must not have
been insubstantial.” Id. That is, the alleged error must have resulted in “particularized
harm” to the plaintiff. See Labatt, 577 F.3d at 1380. A party may waive arguments that
might demonstrate that it is an interested party if they are not presented in its opening
brief. Cf. United States v. Ford Motor Co. (Ford), 463 F.3d 1267, 1276-77 (Fed. Cir.
2006); Novosteel SA v. United States (Novosteel), 284 F.3d 1261, 1273-74 (Fed. Cir.
2002).
12
In this case, plaintiff has failed on two grounds to establish subject matter
jurisdiction. First, plaintiff has waived its prejudice argument; second, plaintiff has not
sufficiently alleged error that would, if proven, afford plaintiff a substantial chance to
obtain the award.
1.
Plaintiff Waived Its Prejudice Argument
a.
Plaintiff Failed to Raise Its Prejudice Argument in Its Opening Brief
The Federal Circuit has explained that both fairness to the opposing party and to
the trial court support the rule that a party waives issues not raised in its opening brief.
The Federal Circuit has stated, “It is unfair to consider an argument to which the
[opposing party] has been given no opportunity to respond.” Ford, 463 F.3d at 1277. In
addition, “parties must give a trial court a fair opportunity to rule on an issue other than
by raising that issue for the first time in a reply brief.” Novosteel, 284 F.3d at 1274; see
also Becton Dickinson & Co. v. C.R. Bard, Inc. (Becton), 922 F.2d 792, 800 (Fed. Cir.
1990). For the purpose of analyzing whether there has been a waiver in this case, it is
necessary to determine which of plaintiff’s filings the court should regard as plaintiff’s
opening brief.
To make this determination, the court examines plaintiff’s two briefs in the
context of this proceeding. On October 24, 2011 the court issued a scheduling order
instructing defendant to “file with the court and serve on plaintiff the Administrative
Record (AR) on or before Tuesday, November 1, 2011.” Oct. 24, 2011 Order
(Scheduling Order), Dkt. No. 14, at 2, filed Oct. 24, 2011. The court then provided
plaintiff the opportunity to open the briefing, id., and plaintiff did so by filing its motion
for judgment on the administrative record on November 8, 2011, see generally Pl.’s Mot.
Subsequently, on November 15, 2011 defendant filed a combined motion, titled
“Defendant’s Motion to Dismiss, Cross-Motion for Judgment upon the Administrative
Record, and Response to Plaintiff’s Motion for Judgment on the Administrative Record,”
moving the court to dismiss the case and, in the alternative, requesting that the court grant
defendant’s cross-motion for judgment on the administrative record. See Def.’s
Combined Mot. 1, 8-28. Intervenors also filed their cross-motion for judgment on the
administrative record on November 14, 2011. See generally Ints.’ Mot. In its scheduling
order, the court instructed plaintiff to file “its reply to defendant’s response and its
response to defendant’s motion” on or before November 18, 2011. Scheduling Order 2
(emphasis added). On November 18, 2011 plaintiff filed a document titled “Plaintiff’s
Response to Defendant’s and Intervenor’s Motion for Jud[g]ment on the Administrative
Record.” Pl.’s Resp. 1. Defendant then filed its reply in support of its motion to dismiss
and its motion for judgment on the administrative record on November 21, 2011. Def.’s
13
Reply 10. Intervenors also filed a reply to plaintiff’s response on November 21, 2011.
See generally Ints.’ Reply.
Black’s Law Dictionary defines “opening brief” as “[a] party’s first brief at a
given stage of a lawsuit.” Black’s Law Dictionary 218 (9th ed. 2009). Plaintiff’s
Motion, to which plaintiff’s Memorandum is attached, is therefore plaintiff’s opening
brief in this proceeding on the administrative record. See generally Pl.’s Mot.; Pl.’s
Mem. Significantly, plaintiff’s opening brief, which repeats large portions of its
Complaint, focuses on its argument that GSA erroneously awarded the contract to Urban
and Meridian, but fails to address any prejudice that would confer standing on plaintiff.
See Pl.’s Mem. 38-39 (alleging that GSA “failed to properly review [the CTA], failed to
note that it created a joint venture in violation of Amendment 0002, and failed to note
that the agreement also contravened multiple guidelines of the CTA program itself”
(emphasis omitted)). Indeed, plaintiff does not even argue that it discussed standing in its
opening brief. See Pl.’s Resp. 3 (“The simple reason it was not addressed [in plaintiff’s
opening brief] is because standing was not an issue in this case until the filing of
Defendant’s motion.”).
Instead, plaintiff waited until its Response (and later, oral argument) to articulate
its position that it had a substantial chance to receive the award because the agency did
not rank unsuccessful offerors or perform a tradeoff analysis as between [Offeror X] and
Brooks Range, and because Brooks Range “excelled in areas where [Offeror X] . . . did
not perform well.” Id. at 5, 8; see also Oral Argument of Nov. 22, 2011, Argument of
Mr. Johnathan Bailey at 12:53:13-38 (“What I challenge is . . . the notion that the CO
bought off on the statement by [Ms.] Len Wilson, a Technical Review Board member,
that [Offeror X] had been selected over Brooks as being technically superior. That
doesn’t follow from the scores that his own panel has assessed; it doesn’t follow from . . .
the numerous negative comments about [Offeror X]’s proposal that are in the record.”).
By failing to raise the issue in its opening brief--here, plaintiff’s Motion for judgment on
the administrative record--plaintiff has waived its right to assert that it was prejudiced by
agency error and may not later attempt to assert this challenge in subsequent briefing or
at oral argument. See Novosteel, 284 F.3d at 1274. Plaintiff’s suggestion that
defendant’s standing argument is merely “a litigation argument of counsel”--and that
absent the agency’s or defendant’s advising plaintiff that standing may indeed be an issue
plaintiff need not address standing in its opening brief--is unavailing. See Pl.’s Resp. 3-4.
In this case, it is plaintiff’s burden, as the party asserting federal jurisdiction, to
establish the elements of standing. Lujan, 504 U.S. at 561; Myers, 275 F.3d at 1369.
Further, “It is a long-settled principle that standing cannot be ‘inferred argumentatively
from averments in the pleadings.’” FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231
(1990) (quoting Grace v. Am. Cent. Ins. Co., 109 U.S. 278, 284 (1883)). Moreover, a
14
plaintiff’s burden of proof varies with the procedural context of the case. Lujan, 504 U.S.
at 561; Sierra Club v. Envtl. Prot. Agency (Sierra Club), 292 F.3d 895, 898 (D.C. Cir.
2002) (citing Lujan for the proposition that “the burden of production a plaintiff must
bear in order to show it has standing to invoke the jurisdiction of the district court varies
with the procedural context of the case”). While more general allegations may suffice
during the pleading stage, when “the petitioner is asking the court . . . for a final
judgment on the merits, based upon the application of its legal theory to facts established
by evidence in the record,” the requirement that plaintiff demonstrate standing is
heightened. Sierra Club, 292 F.3d at 899. These requirements are no less applicable in
the bid protest context, in which the standing requirements are “more stringent” than
those applicable under Article III jurisdiction. See Weeks Marine, 575 F.3d at 1359.
Despite having had the opportunity to review the AR and a “full opportunity,”
Becton, 922 F.2d at 800, to point out any agency error that prejudiced plaintiff--which
would have provided plaintiff with standing--plaintiff chose not to address prejudice, and
therefore standing, in its opening brief, see Pl.’s Mot. passim. Here, where plaintiff’s
standing was not evident in its Complaint, 6 see Compl. passim, “we see no reason to
depart from the sound practice that an issue not raised by [a plaintiff] in its opening
brief . . . is waived.” See Becton, 922 F.2d at 800; Sierra Club 292 F.3d at 900 (holding
that “a petitioner whose standing is not self evident should establish its standing by the
submission of its arguments and any affidavits or other evidence appurtenant thereto at
the first appropriate point in the . . . proceeding”). 7 Plaintiff may not later attempt to
6
Plaintiff states in its Complaint, “Jurisdiction in this action is conferred on this Court by 28
U.S.C. § 1491(b)(1). This is an action by an interested party objecting to an alleged violation of
statute or regulation in connection with a procurement.” Pl.’s Verified Compl. for Declaratory &
Injunctive Relief (Compl.), Dkt. No. 1, at 1, filed Oct. 24, 2011. However, plaintiff did not
provide sufficient factual allegations in its Complaint--it alleged only general “irreparable harm,”
see Compl. 25, rather than facts showing the “particularized harm”--that would support a finding
of jurisdiction under 28 U.S.C. § 1491(b)(1), see Compl. passim; Part II.A (citing Labatt Food
Serv., Inc. v. United States, 577 F.3d 1375, 1380 (Fed. Cir. 2009)).
7
The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has
observed that the “first appropriate point” may be either in response to a motion to dismiss for
lack of standing or in a petitioner’s opening brief. Sierra Club v. Envtl. Prot. Agency, 292 F.3d
895, 900 (D.C. Cir. 2002). The D.C. Circuit later refined this point to state that if standing is not
self-evident or the petitioner could not have reasonably believed that standing was self-evident,
the opening brief must include a claim of standing. Core Commc’ns, Inc. v. Fed. Commc’ns
Comm’n, 545 F.3d 1, 3-4 (D.C. Cir. 2008) (noting that “[a]t no point--much less in the opening
brief, as required for any element of standing that is not self-evident--does [plaintiff] show” how
it was being injured by the regulation at issue); see also Int’l Bhd. of Teamsters v. Transp. Sec.
Admin., 429 F.3d 1130, 1135-36 (D.C. Cir. 2005); Am. Library Ass’n v. Fed. Commc’ns
Comm’n, 401 F.3d 489, 490-92 (D.C. Cir. 2005) (declining to dismiss a case and requesting
15
assert that it was prejudiced by agency error and therefore has standing in its reply 8 or at
oral argument.
b.
Defendant’s Motion to Dismiss Did Not Provide Plaintiff With a Second
Opportunity to Assert Prejudice in This Proceeding
post-argument briefing when the plaintiff provided a short jurisdictional statement in its opening
brief and citations to the administrative record supporting its assertion and the parties
“reasonably . . . concluded that petitioners’ standing was self-evident, so neither party pursued
the matter in their opening briefs to the court”). An early showing of standing may be even more
important in bid protest cases, which this court handles on an expedited basis. Cf. Blue & Gold
Fleet, L.P., 492 F.3d at 1313 (citing 28 U.S.C. § 1491(b)(3) and noting that a waiver rule furthers
expeditious resolution of an action).
While plaintiff suggests that standing may have been self-evident from the time of its
agency protest, see Pl.’s Resp. to Def.’s and Ints.’ Mot. for Jud[g]ment on the Administrative
Record (Pl.’s Resp.), Dkt. No. 29, at 3, filed Nov. 18, 2011, or that a vague allusion made by
defendant during the court’s October 24, 2011 status conference provided nothing for plaintiff to
respond to, Oral Argument of Nov. 22, 2011, Argument of Mr. Johnathan Bailey at 12:19:38-55,
plaintiff’s standing was not evident to the court or to opposing counsel. Defendant’s counsel
indicated during the court’s status conference on October 24, 2011 that “Brooks Range is not in a
position to . . . receive the award if it was to prevail here, so we might have a standing issue that
could quickly dispose of this.” Status Conference of Oct. 24, 2011, Statement of Mr. Devin
Wolak at 3:11:15-25. When pressed by the court to articulate the standing issue, defendant
stated, “Brooks Range is not second in line . . . . Their only challenge is to the eligibility of the
awardee.” Id. at 3:11:58-12:07.
8
Plaintiff’s final filing in this case is titled “Plaintiff’s Response to Defendant’s and
Intervenor’s Motion for Jud[g]ment on the Administrative Record,” and could be construed as
either a reply or a response. See generally Pl.’s Resp. However, whether plaintiff’s “Response”
is construed to be a response or reply brief, plaintiff has failed to address standing in its opening
brief to the court, and has therefore waived it. See Fuji Photo Film Co. v. Jazz Photo Corp., 394
F.3d 1368, 1375 n.4 (Fed. Cir. 2005) (recognizing that briefs may serve multiple purposes but
refusing to “address arguments not properly raised” in a responsive brief that also served as an
opening brief for cross-appealed issues); Novosteel SA v. United States (Novosteel), 284 F.3d
1261, 1274 (Fed. Cir. 2002); Survival Systems, USA, Inc. v. United States, No. 11-534 C, 2011
WL 5904434, at *7 (Fed. Cl. Nov. 4, 2011). Plaintiff’s statement at oral argument, that it did not
waive a challenge to the agency’s evaluation of its proposal because the argument was raised in
“response to an issue that was first raised by the government in its moving papers,” is therefore
unavailing. Oral Argument of Nov. 22, 2011, Argument of Mr. Johnathan Bailey at 12:19:30-33.
16
After plaintiff filed its motion for judgment on the administrative record,
defendant filed a combined motion that included a motion to dismiss for lack of subject
matter jurisdiction under RCFC 12(b)(1). See generally Def.’s Combined Mot.
Contrary to plaintiff’s arguments, defendant’s Combined Motion, which, in part,
points out a deficiency in plaintiff’s argument in its opening brief, does not provide
plaintiff with a second chance to assert its standing in this proceeding on the
administrative record. See Ford, 463 F.3d at 1276-77 (holding that plaintiff had waived
its argument by failing to raise it in its opening brief on appeal); Fuji Photo Film Co. v.
Jazz Photo Corp., 394 F.3d 1368, 1375 n.4 (Fed. Cir. 2005) (“Although Fuji attempts to
raise a specter of this repair/reconstruction argument in a footnote in its opposition brief
and more fully in its reply brief, this court will not address arguments not properly raised
in an Appellee’s opposition brief, which also served as an opening brief for its crossappealed issues.” (citing, inter alia, Becton, 922 F.2d at 800)). 9
2.
Plaintiff Did Not Sufficiently Allege Error or Establish that It Has a
Substantial Chance of Receiving Award
In the portion of its Combined Motion seeking a dismissal of plaintiff’s
Complaint, defendant argues that Brooks Range does not have standing to bring this suit
because Brooks Range did not sufficiently allege error in its Complaint, moving brief, or
reply brief, that, if taken as true, would give plaintiff a substantial chance to obtain the
award. See Def.’s Combined Mot. 11-14; Def.’s Reply 4 (“These descriptions, although
filled with Brooks Range’s own gloss of the evaluators’ notes . . . do not actually
challenge any of those evaluations.” (footnote omitted)). Defendant asserts that a
summary prepared by the TEB, which determined that “[Offeror X] and Urban/Meridian
overall ratings were more acceptable than [that of] the other offerors,” indicates that
[Offeror X], rather than Brooks Range, would have been second in line for the award.
Def.’s Combined Mot. 11. Accordingly, defendant argues, even if the court overturns the
award, GSA will award the contract to [Offeror X], rather than Brooks Range. See id. at
13.
In its Response, plaintiff for the first time discusses--but does not challenge-- the
agency’s evaluation of proposals. See Pl.’s Resp. 5-8. Plaintiff argues that, under Info.
Tech., standing does not require the protestor to be “next-in-line [sic],” see Def.’s
9
This court has, on occasion, viewed the waiver issue differently. See Ironclad/EEI v. United
States, 78 Fed. Cl. 351, 358 (2007) (holding that where “defendants were able to fully respond to
[plaintiff’s] contentions regarding permanent injunctive relief in their reply briefs, the concept of
waiver announced in Novosteel is inapplicable” (citing Novosteel, 284 F.3d at 1274)); Turner
Constr. Co. v. United States, 94 Fed. Cl. 586, 593 (2010) (finding that intervenor’s jurisdictional
argument had not been waived because plaintiff had an opportunity to respond).
17
Combined Mot. 8, and that, due to the high technical ratings of plaintiff’s proposal, and
despite its higher price, “there is very good reason to believe that [Brooks Range’s]
proposal would be the best value,” see Pl.’s Resp. 4-6, 8. Plaintiff argues that defendant
cannot rely on the TEB’s relative ranking of [Offeror X] and Brooks Range because it is
a “single comment made by a lower level evaluator who was not the source selection
authority for this procurement.” Id. at 4.
Defendant is correct that plaintiff does not challenge the agency’s technical
evaluation or manner of comparing offerors. See id. passim; Oral Argument of Nov. 22,
2011, Argument of Mr. Johnathan Bailey at 12:53:07-13 (“I don’t challenge the
assessment of those capabilities.”). Instead, plaintiff argues that it had a fighting chance
to obtain the award because the source selection authority (the contracting officer in this
case) failed to rank all offerors, with the exception of Urban and Meridian, creating an
open field among the remaining offerors. See id. at 8. 10 Plaintiff continues to point only
to a single error--the one originally raised in its Complaint and in its Motion--that the
agency erroneously awarded the contract to Urban and Meridian. See id. at 8-14.
10
Plaintiff suggests that, were the court to overturn the award to Urban and Meridian, the
agency would then be required perform a best-value tradeoff between Brooks Range Contract
Services, Inc. (Brooks Range or plaintiff) and [Offeror X], permitting plaintiff to have a
“substantial chance” of obtaining the award. See Pl.’s Resp. 5; FAR 15.101-1(a). However, the
AR, in particular, the contracting officer’s proposal analysis, shows that although Brooks Range
was rated higher than [Offeror X] in three of the five technical sub-categories, [Offeror X] rated
higher than Brooks Range in one of the five technical sub-categories, received Small Business
Status evaluation credit and had the lowest price. AR Tab 22 (CO’s Proposal Analysis) 1348;
but see AR Tab 24 (TEB Report) 1355 (“Brooks . . . did not rate high enough in the technical
competencies.”). In such a case, all non-price evaluation factors--not just the technical factors-would need to be considered in accordance with the Solicitation’s instructions, see AR Tab 3B
(Amendment 001), and then weighed against Brooks Range’s higher price, see generally FAR
15.101-1(b)-(c). As the record reflects, the technical review board (TEB) analyzed Brooks
Range alongside [Offeror X] on the non-price evaluation factors, and the TEB determined that
the “[Offeror X] and Meridian/Urban overall ratings were more acceptable than the other
offerors.” AR Tab 24 (TEB Report) 1354. The TEB noted both that Brooks Range “did not rate
high enough in the technical competencies”--a position that plaintiff appeared to contest at oral
argument, Oral Argument of Nov. 22, 2011, Argument of Mr. Johnathan Bailey at 12:53:21-38-and that “Brooks also rated well in the technical competencies but was a large business.” AR
Tab 24 (TEB Report) 1354-55. As discussed more fully in the text, the record supports the
inference that the source selection authority--here, the contracting officer--agreed with the TEB’s
conclusion that [Offeror X] was rated higher on non-price evaluation factors taken together. AR
Tab 23 (CO’s Notes) 1353 (“I was in agreement with the Board’s assessments of Technical
Capabilities and Past Performance . . . .”).
18
Even if plaintiff had properly alleged error in the agency’s technical evaluation,
plaintiff fails to establish that it had a substantial chance to obtain the award. While
plaintiff need not be next in line for the award, it must have a substantial chance of
securing the award if the alleged errors are found in the Administrative Record. See Info.
Tech., 316 F.3d at 1319. In its Response, plaintiff argues that “the record definitely
demonstrates that if the Urban/Meridian joint venture were disqualified, [Brooks Range]
would have a substantial chance of receiving award if a rational best value trade[-]off is
performed.” Pl.’s Resp. 5. For most of its Response, however, plaintiff appears to agree
with the agency’s technical evaluation of both its proposal and of [Offeror X]’s proposal.
See e.g., id. at 5 (“That [Brooks Range] excelled in areas where [Offeror X], as noted
below, did not perform well, is shown in the specific observations made by the
evaluators.”).
The AR indicates that the contracting officer agreed with the TEB’s assessment of
the offerors’ technical capabilities and past performance and with the TEB’s final award
recommendation. After having conducted her own evaluation, and after the TEB had
conducted its own technical evaluation, the contracting officer conferred with the TEB.
AR Tab 23 (CO’s Notes) 1351, 1353. Her final report contains a table (reproduced
below) that reformats a table originally produced in the TEB report:
Non-price
Factor
Staffing Plan
Quality Control
Plan
Leed
Experience
Data Center
Experience
Lab Experience
Past
Performance
Business Size
Meridian/Urban
[Offeror X]
[Offeror Y]
[Offeror Z]
BRCS
Good
Exceptional
Marginal
Good
Marginal
Poor
Good
Exceptional
Good
Good
Adequate
Marginal
Marginal
Good
Good
Good
Good
Adequate
Exceptional
Exceptional
Exceptional
Good
Good
Adequate
Poor
Not Rated
Marginal
Not Rated
Adequate
Good
Small
Small
Large
Small
Large
AR Tab 22 (CO’s Proposal Analysis) 1348; see also AR Tab 24 (TEB Report) 1354. Her
report also contains, as part of a larger pricing summary, the following total price
information for the five offerors:
IGE
Total
%
from
IGE
$14,326,963.70
Meridian/
Urban
$13,300,872.00
-7.2%
[Offeror X]
[Offeror Y]
[Offeror Z]
BRCS
$12,575,760.00
-12.2%
$17,202,408.00
20.1%
$17,408,670.69
21.5%
$13,630,971.71
-4.9%
19
Id. The CO’s notes state, “Based on this discussion [with the TEB] and review of
contractor proposals, the [TEB’s] recommendation, and the [TEB’s] notes, I was in
agreement with the Board’s assessments of Technical Capabilities and Past Performance,
as well as their final recommendation for award to Meridian/Urban Services, after
evaluating price.” AR Tab 23 (CO’s Notes) 1353.
While the TEB’s evaluations may be persuasive to the contracting officer, the
TEB’s decision is not automatically adopted by the contracting officer. See FAR 15.308
(“While the [Source Selection Authority (SSA)] may use reports and analyses prepared
by others, the source selection decision shall represent the SSA’s independent
judgment.”); Cf. Portfolio Disposition Mgmt. Grp. LLC v. United States, 64 Fed. Cl. 1,
8-9 (2005) (concluding that “the [technical evaluation panel’s] responsibility is to
consider the findings of the [technical evaluation team], but that the development of its
consensus rating . . . is arrived at independently by the voting members of the Panel”). In
this case, however, the contracting officer’s statements in the record indicate that it is not
unreasonable to conclude that the contracting officer had similar confidence in the TEB’s
conclusion in its report that “[Offeror X] and Merdian/Urban overall [non-price] ratings
were more acceptable than the other offerors,” see AR Tab 24 (TEB Report) 1354, as she
did in the TEB’s ultimate award recommendation, see AR Tab 23 (CO’s Notes) 1353.
A finding of standing in a post-award bid-protest case requires that the protestor
have a “substantial chance” to obtain the contact if the alleged errors are found to exist.
See Info. Tech., 316 F.3d at 1319. In this case, Brooks Range has alleged no error other
than that the agency erroneously awarded the contract to Urban and Meridian. See Pl.’s
Compl. passim; Pl.’s Mem. passim; Pl.’s Resp. passim. 11 Further, if the award were in
fact erroneous, it is not unreasonable to conclude, based on the AR, that the award would
then go to [Offeror X] based on the agency’s relative assessment of the offerors on nonprice factors. 12 See AR Tab 24 (TEB Report) 1354; AR Tab 23 (CO’s Notes) 1353.
Even presuming the alleged error were established, Brooks Range would not have a
substantial chance to obtain the award and, therefore, lacks standing to protest.
11
On the last page of its Response, plaintiff states that “[Brooks Range] was prejudiced by this
error,” but this statement refers to the allegedly erroneous award to Urban and Meridian. Pl.’s
Resp. 14.
12
It also does not appear that it would have been unreasonable for the agency to have rated
Brooks Range more favorably than [Offeror X] on its non-price factors. See AR Tab 22 (CO’s
Proposal Analysis) 1348. However, the best value context and the weighing of qualitative
factors under the Solicitation permit a range of reasonable results and Brooks Range has failed to
establish a “substantial chance” of award.
20
B.
The Contracting Officer’s Decision Was Not “Arbitrary, Capricious or
Contrary to Law” 13
Even if Brooks Range were found to have standing, this court may overturn the
award to Urban and Meridian only if it finds error, namely that “(1) the procurement
official’s decision lacked a rational basis; or (2) the procurement procedure involved a
violation of regulation or procedure.” Impresa, 238 F.3d at 1332.
The focus of plaintiff’s Complaint and opening brief in this case is the allegation
that Urban and Meridian were parties to a joint venture agreement and that a joint venture
is not, unless it is itself a holder of the relevant GSA schedule contract, eligible for award
under the Solicitation. Compl. passim, Pl.’s Mem. passim.
The eligibility of a joint venture for award arose when Meridian’s business
development manager asked the contracting officer to comment on a joint venture
between Urban and Meridian, with Urban as the majority partner, would be evaluated
under Amendment 001. See AR Tab 28 (May 17, 2011 email exchange between Tannis
Taylor and Cheryl Ansaldi) 1484. 14 That inquiry was incorporated into Amendment 002
in the following question, “Can a large business schedule holder form a joint venture with
a small business schedule holder and receive small business evaluation credit?” AR Tab
3C (Amendment 002) 230. The agency’s response stated:
No. A joint venture would have to be considered a separate legal entity.
Even if both parties were on Schedule, the joint venture itself, would not be
considered a Schedule Holder.
However, a large business schedule holder may form a Contractor Teaming
Agreement with a qualified small business schedule holder and receive the
small business evaluation credit. (See gsa.gov/cta) To be considered, a
copy of the Teaming Agreement must be submitted along with the
proposal, and the Teaming Agreement must clearly show that the small
business is taking a lead position (performing the majority of the work).
13
See MED Trends, Inc. v. United States, No. 11-712 C, 2011 WL 5970954, at *4 (Fed. Cl.
Nov. 30, 2011).
14
The email from Meridian to the contracting officer asked, “Can you comment on how an
Urban/Meridian Joint Venture proposal would be evaluated under your Amendment 1 evaluation
criteria? Urban is a small business and a minority-owned business. The joint venture would be
structured with Urban as the majority partner.” AR Tab 28 (May 17, 2011 email exchange
between Tannis Taylor and Cheryl Ansaldi) 1484.
21
Id.
In response to the agency’s advice, Urban and Meridian submitted, with their
response to the Solicitation, a Teaming Agreement. AR Tab 19 (Urban and Meridian’s
Proposal) 399-413. Plaintiff’s Complaint and Response analyze certain provisions of
Urban and Meridian’s Teaming Agreement and contend that Urban and Meridian are
ineligible because certain provisions contained in the Teaming Agreement must be
interpreted as creating a joint venture under Georgia law, see Compl. 5-19; Pl.’s Mem. 521, 25-34, and that “[t]he agency failed to properly review [the Urban and Meridian
CTA]” and “failed to note that it created a joint venture in violation of Amendment
0002,” Pl.’s Mem. 38-39. (Subsequently, in its Response to defendant’s Combined
Motion, plaintiff also argues that the agency erred in failing to recognize Brooks Range’s
“clearly superior proposal.” Pl.’s Resp. 8.).
Contrary to plaintiff’s assertions, the record indicates that the contracting officer
acted reasonably and consistently with the Solicitation when she considered Urban and
Meridian’s proposal, including the draft Teaming Agreement, and when she awarded the
contract to Urban and Meridian.
The Solicitation identified only two prerequisites in order for “a large business
schedule holder [to] form a Contractor Teaming Agreement with a qualified small
business schedule holder and receive the small business evaluation credit.” AR Tab 3C
(Amendment 002) 230. First, the team must submit a copy of its teaming agreement
along with its proposal. See id. Second, the “Teaming Agreement must clearly show that
the small business is taking a lead position (performing the majority of the work).” Id.
Urban and Meridian submitted an unsigned draft of their Teaming Agreement with
their proposal. AR Tab 19 (Urban and Meridian’s Proposal) 399-413. Urban and
Meridian subsequently submitted an executed copy of their Teaming Agreement, signed
on June 28, 2011, a document substantially identical to the unsigned draft version. AR
Tab 3E (executed CTA) 260. Both iterations of the Teaming Agreement were titled
“Urban Services Group, Inc./Meridian Management Corporation Teaming Agreement.”
AR Tab 19 (Urban and Meridian’s Proposal) 399 (emphasis added); AR Tab 3E
(executed CTA) 249 (emphasis added). The draft agreement was twelve pages long, not
including a signature page and two pages of appendices, see AR Tab 3D (draft CTA); the
executed agreement was eleven pages long, not counting the signature page and the two
appendices, see AR Tab 3E (executed CTA). Both the draft and the executed copy of the
Teaming Agreement make it immediately clear that Urban--the small business--would be
taking the lead, that is, “performing the majority of the work” as required by the
Solicitation. See AR Tab 3D (draft CTA) 246; AR Tab 3E (executed CTA) 261. Page
two of the Teaming Agreement points the contracting officer to Appendix A of the CTA,
22
which shows that Urban would be responsible for all tasks and performing the majority
the work. AR Tab 3D (draft CTA) 234; AR Tab 3E (executed CTA) 250. Meridian, the
large business, was also responsible for some but not all the tasks listed. AR Tab 3D
(draft CTA) 234; AR Tab 3E (executed CTA) 250.
The contracting officer conducted the initial review of the proposals and “checked
for responsiveness.” AR Tab 23 (CO’s Notes) 1351. Her review included a
determination of which offerors would receive small business evaluation credit. Id. at
1352. She noted that “[Urban and Meridian’s] proposal included a Contractor Teaming
Agreement that conformed to the requirements provided via website link and Q&A
verbiage in amendment 002,” and stated that she instructed the TEB to give Urban and
Meridian small business evaluation credit. Id.
Plaintiff’s challenge to the award is that the CO did not recognize that Urban and
Meridian’s teaming agreement also contained features of a joint venture agreement under
Georgia law, and that the CO therefore awarded the contract to a joint venture that was
not a schedule holder in violation of the Solicitation. Pl.’s Mem. 24-34.
Plaintiff’s contention is grounded in plaintiff’s view that a contracting officer is
required to analyze a document styled a Teaming Agreement and undertake a rigorous
legal comparison between its terms and the terms of agreements that have been
determined to constitute joint ventures under Georgia law. 15 Plaintiff argues, in essence,
that the CO was required to determine whether a document that called itself a “teaming
agreement,” nowhere contained the words “joint venture” and satisfied the Solicitation’s
requirements for CTAs was in fact a joint venture under Georgia state law. See AR Tab
3D (draft CTA); AR Tab 3E (executed CTA); Pl.’s Resp. 12 (arguing that after having
incorporated Amendment 002 into the Solicitation, “[f]or Defendant to say that it was
unreasonable to expect that the Contracting Officer would make an effort to make sure
that the entity it was awarding to was not a joint venture defies logic and the plain
Solicitation language”). Plaintiff’s Complaint and opening brief, in dozens of pages,
provide examples of the analysis that plaintiff contends that the CO should have
undertaken. Compl. 5-19; Pl.’s Mem. 4-20, 25-34.
For instance, plaintiff points to language appearing on page three of the draft CTA
and the executed CTA, AR Tab 3D (draft CTA) 235; AR Tab 3E (executed CTA) 251,
that states:
15
The final page of the draft CTA and the executed CTA states, “This Agreement shall be
construed, interpreted and enforced in accordance with the laws of the State of Georgia.” AR
Tab 3D (draft CTA) 244; AR Tab 3E (executed CTA) 259.
23
Each member of the Management Committee shall have one vote, on behalf
of the Team which he/she represents, and all decisions will be unanimous
. . . . Neither Urban nor Meridian by itself, shall have any power or
authority to act or make decisions on behalf of the other member, or to
incur obligations or commitments binding the other member.
Pl.’s Mem. 8 (capitalization omitted), and to similar language found later in the
agreement on pages seven and eight, id. at 14-15; AR Tab 3D (draft CTA) 239-40; AR
Tab 3E (executed CTA) 255-56. Plaintiff argues that the provisions “unmistakably
provide[] the ‘rights of mutual control’ that mark a joint venture under Georgia law.”
Pl.’s Mem. 8. Relying on Georgia common law regarding joint ventures, plaintiff
endeavors to show that “the Urban/Meridian agreement is a ‘joint venture’ under Georgia
law because it does in fact provide for rights of mutual control.” Id. at 31; see generally
id. at 30-33.
Plaintiff also directs the court to language that appears on page eight of both the
draft CTA and the executed CTA, AR Tab 3D (draft CTA) 240; AR Tab 3E (executed
CTA) 256, providing that “[a]ll assets and property owned by the Team . . . shall be held
and recorded in the name of the Team, and purchased by the Team with Urban paying
51% and Meridian paying 49% of that sum in cash.” Pl.’s Mem. 16. Plaintiff argues,
“This is an essential feature of a joint venture,” id., and supports its contention by
providing citations to GAO decisions and decisions from the Court of Claims, id. at 2629. For example, plaintiff explains that “the GAO itself has observed in several cases:
‘A joint venture is an association of persons or firms with an intent, by way of contract,
to engage in or carry out a single business venture for joint profit for which they combine
their efforts, property, money, skill and knowledge.” Id. at 26 (quoting, inter alia, T.V.
Travel, Inc., 65 Comp. Gen. 109 (1985)).
Plaintiff’s proposed approach to document review by a contracting officer
awarding a task order appears to the court to be unrealistic in view of the well-known
burdens on contracting officers. In 2007, the federal government reported nearly four
million procurement actions by more than sixty agencies, including the Department of
Defense, the Department of Agriculture and the National Science Foundation. Global
Computer Enterprises, Inc., Federal Procurement Report FY 2007, at 10-11 (reporting a
total of 3,973,578 procurement actions across 62 agencies during the 2007 fiscal year).
In 2007, there were 28,434 contracting employees in the federal workforce. Federal
Acquisition Institute, FY 2009 Annual Report on the Federal Acquisition Workforce 7.
Nor does the court conclude that the contracting officer was required to follow
plaintiff’s suggestion--only made at oral argument--that, because contracting officers
have ready access to their agency’s legal department, the contracting officer or other
24
agency personnel should have analyzed the CTA under the law of Georgia to determine
whether or not it was a joint venture. Plaintiff’s counsel states:
I give procurement officials a little more credit than defendant and
intervenors are giving them. Joint venture proposals are submitted all the
time. Contracting officers are called upon to look even at prime-sub
proposals, and decide for themselves are these legitimate primes and subs
or are they not. The contracting official is given the power to file size
protests for that very reason . . . . That agreement is a joint venture
agreement under the law of all fifty states . . . this is not a hypertechnical
question. Furthermore, . . . Urban/Meridian itself said, “We would like to
propose a joint venture--can we do it?” The CO specifically consulted with
her legal counsel on that issue and said, “No, unless your joint venture has
its own schedule contract.”
Oral Argument of Nov. 22, 2011, Argument of Mr. Johnathan Bailey at 1:32:25-33:43.
This argument is unpersuasive, however, because it presupposes that the contracting
officer--after viewing a document that calls itself a “Teaming Agreement,” that nowhere
contains the word “joint venture,” and that satisfied the Solicitation’s requirements for a
CTA--would have recognized a potential legal issue: that some of the CTA’s provisions
resemble provisions in agreements found to have created joint ventures under Georgia (or
even another jurisdiction’s) case law. Cf. Pl.’s Mem. 4-21, 25-34; Pl.’s Resp. 9 (citing
cases from Georgia state courts and also citing cases from Louisiana state courts,
Louisiana federal district courts and the United States Court of Appeals for the Fifth
Circuit).
Even if plaintiff were able to show standing, the court is simply not persuaded that
the actions of the contracting officer in this case were arbitrary, capricious, or contrary to
law. 16
16
Plaintiff argues that Urban and Meridian’s CTA violates GSA requirements found on the
agency’s website, Pl.’s Mem. 35-39, for example, that the CTA omits certain of “GSA’s required
elements of a CTA,” id. at 35. Plaintiff’s contention is incorrect.
The language that plaintiff refers to is permissive. See Def.’s Mot. to Dismiss, CrossMot. for J. upon the Administrative Record, and Resp. to Pl.’s Mot. for J. upon the
Administrative Record (Def.’s Combined Mot.), Dkt. No. 27, at 23-24, filed November 15, 2011.
For example, the relevant GSA guidance provides in part, “The CTA document should state that
all team members remain independent contractors, responsible for their own employees,” AR
Tab 3I (GSA Online Guidance) 283, available at http://www.gsa.gov/portal/content/202253
(emphasis added), an item of permissive guidance that plaintiff characterizes as “required,” Pl.’s
Mem. 35. This guidance is prefaced by the statement:
25
Contractor Team Arrangement (CTA) documents are developed by the team
members themselves and will vary from one CTA document to another. While
not all-inclusive, the following CTA elements are areas that are typically of
interest to the government. GSA strongly encourages the submission of the CTA
document in response to a Request for Quotation (RFQ) so that an ordering
activity may gain an understanding of how the arrangement will work, and may
identify any areas of responsibility that may require clarification.
AR Tab 3I (GSA Online Guidance) 283.
There are only four elements on GSA’s website (also included in GSA’s Multiple Award
Schedules Desk Reference (Desk Reference), see MAS Desk Reference) that could possibly be
construed as CTA “requirements,” see Pl.’s Mem. 35; Ints.’ Cross-Motion for J. on the
Administrative Record (Ints.’ Cross-Mot.), Dkt. No. 28, at 10, filed November 15, 2011. The
website states: (1) “Each team member must have a GSA Schedule contract,” (2) “Each team
member is responsible for duties addressed in the CTA document,” (3) “Each Team member has
privity of contract with the government and can interact directly with the government,” and (4)
“The ordering activity is invoiced at each team member’s unit prices or hourly rates as agreed in
the task or delivery order or GSA Schedule BPA.” AR Tab 3I (GSA Online Guidance) 282; see
also MAS Desk Reference 78. Notwithstanding their mandatory phrasing, the four elements are
not contained in a document providing mandatory requirements for offerors. They are instead
found on GSA’s website and in GSA’s MAS Desk Reference, a guidance manual primarily
dedicated to providing tips to contracting officers overseeing schedule procurements. MAS
Desk Reference, Preface.
Moreover, plaintiff does not contest that the four elements appearing in the Desk
Reference have been met by the awardee. Pl.’s Mem. passim; Pl.’s Resp. passim. And whether
or not Urban and Meridian’s CTA adhered perfectly to GSA’s permissive online guidance, the
CTA does not appear to violate any GSA requirements.
This case should serve as a caution to agencies and draftspersons alike. The court
observes along with plaintiff that “[t]here is no FAR or GSAM FAR supplement regulation that
actually provides any definition of what a CTA is and what its elements must be. There is only
[GSA’s] website.” Pl.’s Resp. 10. Indeed, in order to find an example of a CTA that clearly
avoids a possible interpretation as a joint venture or other “formal business arrangement,”
plaintiff needed to go back to the A-12 litigation concerning a Navy program to develop attack
aircraft, which began in the 1980s. See Pl.’s Mem. 28-29 (citing McDonnell Douglas Corp. v.
United States (McDonnell Douglas), 25 Cl. Ct. 342 (1992). In that case, the teaming agreement
stated:
This Agreement does not constitute and shall not be construed or given effect as a
joint venture, partnership, pooling arrangement, or other formal business
organization, or as creating any fiduciary relationship. Except as expressly
26
IV.
Conclusion
For the foregoing reasons, plaintiff’s Motion is DENIED and defendant’s
Combined Motion and intervenors’ Cross-Motion are GRANTED. The Clerk of Court
shall DISMISS the Complaint for lack of subject matter jurisdiction. Judgment shall be
entered for defendant.
IT IS SO ORDERED.
s/ Emily C. Hewitt
EMILY C. HEWITT
Chief Judge
provided herein, nothing herein shall be construed as providing for the sharing of
profits or loss, nor shall either Party be liable to the other for any of the costs,
expenses, risks, or liabilities arising out of the other’s activities in connection with
the performance of programs outside this agreement.
McDonnell Douglas, 25 Cl. Ct. at 344 (emphasis omitted).
27
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