NORSAT INTERNATIONAL [AMERICA], INC v. USA

Filing 42

PUBLISHED OPINION. Signed by Judge Nancy B. Firestone.(dpk) Copy to parties.

The United States Court of Federal Claims
No. 13-41C
(Filed: April 16, 2013)*
*Opinion originally filed under seal on April 5, 2013
* ********************
NORSAT INTERNATIONAL
[AMERICA], INC.,
Plaintiff,
v.
THE UNITED STATES,
Defendant,
and
ENCOMPASS DIGITAL MEDIA,
INC.,
Defendant-Intervenor.

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* Bid Protest; Technical Evaluation;
* Deference; Agency Evaluation; Lack of
* Significant Prejudice
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*

* ********************

Janine S. Benton, Falls Church, VA, for plaintiff. Kathy C. Potter, John M. Murdock and
Rosanne E. Stafiej, Falls Church, VA, of counsel.
William J. Grimaldi, U.S. Department of Justice, Washington, DC, with whom were
Stuart F. Delery, Principal Deputy Assistant Attorney General, and Jeanne E. Davidson,
Director, for defendant.
John E. McCarthy, Jr., Washington, DC, for defendant-intervenor. David C. Hammond
and Grant J. Book, Washington, DC of counsel.

OPINION
FIRESTONE, Judge.
In this bid protest case, Norsat International [America] Inc., (“Norsat” or “the
plaintiff”) challenges the United States Department of the Army’s (“the Army,” “the
defendant,” or “the government”) decision to award a contract for the continued
development and maintenance of the Defense Video and Imagery Distribution System
(“DVIDS”) to Encompass Digital Media, Inc. (“Encompass” or “the defendantintervenor”). Norsat argues that the Army arbitrarily and capriciously concluded that
Encompass’s proposal, which was rated as “Good—Low Risk,” was a better value to the
government than Norsat’s proposal, which cost nearly * * * more (roughly 36%) and was
rated “Outstanding—Very Low Risk.” The plaintiff, which was the incumbent
contractor, seeks declaratory relief and an injunction ordering the suspension of
performance and termination of Encompass’s contract. Encompass also seeks attorney’s
fees and costs. 1
Presently before the court are the parties’ cross-motions for judgment on the
administrative record under Rule 52.1 of the Rules of the United States Court of Federal
Claims (“RCFC”), the government’s partial motion to dismiss under Rule 12(b)(1), and
the government’s motion to strike portions of the materials included in the appendix to
the complaint. As discussed below, because Norsat has failed to show that the Army’s
conduct was arbitrary, capricious, an abuse of discretion, or contrary to law, the court
1

The government informed the court that Encompass had begun performing under the new
contract during the initial joint status conference.

2

DENIES the plaintiff’s motion for judgment on the administrative record and GRANTS
the United States’ and the defendant-intervenor’s cross-motions for judgment on the
record. The government’s other motions are also addressed below.
I.

STATEMENT OF FACTS
A.

The DVIDS Program

The DVIDS program facilitates the transmission of public affairs audio, video
(including live interviews), still imagery, and print products throughout the Department
of Defense (“DoD”). AR 443. The legacy DVIDS system consists of a network of
portable Ku-band satellite transmitters located throughout the world and a distribution
hub in Atlanta, Georgia. AR 59-60. In total, the network includes more than 200
systems concentrated in Afghanistan, the United States, Germany, Kuwait, Bahrain,
Qatar, Japan, the Horn of Africa, and Cuba. AR 443.
The plaintiff began developing satellite communications equipment for the
DVIDS program in 2003 as part of the predecessor contract. AR 59-60. Norsat helped
conceive, design, field, and support all DVIDS transmitters, AR 524, and between 2004
and 2012 the program deployed over 200 terminals. AR 59, 524. During this period
Encompass, the defendant-intervenor, provided direct support to the DVIDS program
including managing the Atlanta Hub and staffing a 24/7/365 helpdesk for DVIDS users.
AR 916. The record does not indicate that Encompass had any responsibility for the
design or development of the legacy DVIDS terminals.

3

B.

The Solicitation and Performance Work Statement

The Army issued a solicitation on March 5, 2012 to continue the support and
development of DVIDS systems. AR 1-2. The solicitation’s Performance Work
Statement (“PWS”) contained detailed descriptions of the five primary tasks to be
performed under the contract, including (1) maintaining and repairing legacy DVIDS
systems; (2) providing a 24/7/365 helpdesk; (3) the option to develop and field new
DVIDS systems; (4) maintaining and repairing new DVIDS systems; and (5) the option
to provide training. 2 AR 445, 448-49, 453, 456.
With regard to legacy systems, the PWS stated that the contractor “shall be
capable of providing support to all legacy systems within 15 days of contract award[,] to
include maintenance and processing of all spare part order requests.” AR 445. In this
connection, offerors were given the option of either acquiring the legacy software and
equipment or implementing “new software that w[ould] be capable of operating legacy
systems . . . .” AR 448. The PWS required that contractors “have operational knowledge
of all satellite technologies necessary for fielded legacy DVIDS systems . . . .”, and also
provided detailed requirements as to response times for maintenance requests. AR 448.
With regard to helpdesk support, the PWS provided, in part:
The contractor shall ensure [that] access to a helpdesk technician is possible
on a 24 hours a day, seven (7) days a week, 365 days a year basis by
DVIDS [Satellite Communication (“SATCOM”)] terminal operators worldwide. . . . Technicians manning the helpdesk shall have sufficient
education, knowledge and experience on the operation and [maintenance]
2

The instant litigation primarily relates to the offerors’ responses to the first three general
performance requirements (i.e., legacy systems, helpdesk, and new DVIDS systems).

4

of mobile satellite communications systems. . . . A technician shall be
accessible who is knowledgeable of the system configuration for which
assistance is needed.
AR 448. In particular, offerors were required to detail (1) how their personnel would
travel to support terminals located both within the continental United States (“CONUS”)
and outside the Continental United States (“OCONUS”); (2) how they would respond to
customer service requests on a 24/7/365 basis; (3) a proposed organizational structure; (4)
how they would allocate work among team members; (5) how they would obtain, hire
and/or retain necessary personnel; (6) how they would communicate with the
government; (7) how they would manage quality control; and (8) how they would access
and maintain the data repository of fielded DVIDS systems. See AR 45.
As to the third requirement, the development of new DVIDS systems, the PWS
stated that the contractor would develop new ground satellite terminals capable of
operating within a 6.5 MHZ Ku satellite bandwidth. AR 449. Specifically, this
requirement described five system capability types, including (1) Deployable; (2)
Transportable; (3) Manpackable; (4) Vehicle Mounted; and (5) Maritime. AR 450-51.
Contractors were not limited to proposing “transmitters or transmitter types that [were]
like the legacy systems.” AR 449. Further, the PWS stated that, “[the contractor] is not
confined to the technical means by which the legacy systems operate as long as the
capabilities below are met.” AR 449. The PWS then enumerated 11 capabilities, such as
the ability to conduct a live High Definition and Standard Definition interview, the ability
to mount the transmitter on a vehicle and a maritime vessel at sea, and the ability to
operate in an X-Band environment. AR 449-50. In addition, the PWS’s tenth
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requirement stated that, “[d]epending on [the] military unit using the transmitter or
transmitter type, size, weight and portability will be a factor.” AR 450.
The solicitation also included, at the end of the PWS, a 53-page section entitled
“Technical Exhibit 1 – Legacy Systems,” (“Technical Exhibit”). AR 464-516. This
section, which had “For Informational Purposes Only” written in bold print on the top of
the first page, described aspects of the mobile SATCOM terminals that were either
currently in use or that were expected to be fielded in the near term. 3 AR 464. The
introduction to the Technical Exhibit stated, in part:
SATCOM systems acquired over the performance period of this contract
must conform as closely as possible to the operational parameters of the
current systems. . . . System descriptions define not only equipment
parameters and complement of tools, equipment and manuals, but includes
language that might be seen in a Performance Work Statement (PWS)
accompanying a solicitation for proposal (e.g. “the contractor shall
provide…”) . . . . PLEASE NOTE: For the purposes of [this] solicitation . .
., there is no restriction to use any legacy system component associated
with this requirement. Any reference to legacy system equipment or name
brand components is strictly as an example (e.g. Ku-Band PPL 1000HA
(Norsat) LNA, Panasonic CF-18 laptop). Unless specifically stated within
this document, suitable substitute components or equipment which offers
equal or greater operating parameters, range, efficiency and/or which meets
or exceeds those factors at a cost savings, may be used in instances where
name brand components are given as an example.
AR 464. 4 The Technical Exhibit then listed performance specifications associated with
each of the five legacy transmitter types, which were labeled A-E. AR 465 (Type-A,
3

In addition to the first page of the Technical Exhibit, the PWS twice stated that the Technical
Exhibit was for “informational purposes only.” See AR 443, 450.

4

In April 2012 the government responded to questions from the offerors, several of which
pertained to the purpose and effect of the Technical Exhibit. See AR 256-63, 356-63. For
example, in response to a question about whether it was “the government’s intent that the
contractor’s proposal provides answers and pricing for all ‘shall’ statements in Technical Exhibit

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Deployable; Type-B, Transportable; Type-C, Manpackable; Type-D, Vehicle Mounted;
Type-E, Maritime). For example, the Technical Exhibit stated that the mean amount of
time allowable to repair the transmitter (i.e., the “mean time to repair” (“MTTR”)) could
be no more than 30 minutes for each transmitter type. See AR 467 (Type-A MTTR), 477
(Type-B MTTR), 486 (Type-C MTTR), 496 (Type-D MTTR), 507 (Type-E MTTR).
Similarly, the Technical Exhibit referred to weight “maximums” for each transmitter
type. See AR 473 (280-pound maximum for Type-A), 482 (1,850-pound maximum for
Type-B), 492 (220-pound maximum for Type-C), 503 (350-pound maximum for TypeD), 514 (500-pound maximum for Type-E).
C.

Special Contract Requirements

Section H of the solicitation enumerated 11 additional special contract
requirements. One of these special requirements, H-8, supplemented the existing
requirement under Federal Acquisition Regulation (“FAR”) Clause 52.228-3, which
requires contractors to provide and maintain workers’ compensation insurance as called
for by the Defense Base Act (“DBA”), 42 U.S.C. § 1651 et seq. (2012). 5 AR 16.

1,” the government responded that the Technical Exhibit was only for informational purposes.
AR 357. Similarly, in response to a question about whether the Technical Exhibit established
requirements for antenna aperture and amplifier sizes, the government stated that, “[b]y the
operational requirements, Technical Exhibit 1 is merely a guideline to reflect what currently
works in the DVIDS integrated environment. New [s]ystems do not have to be built to match the
legacy system types.” AR 361; see also AR 359 (contractor not confined to building transmitters
like the legacy systems), 360 (“This is not a proposed question, rather just a statement pulled
from the informational purposes only Technical Exhibit 1.”), 361 (offerors have discretion to
select video compression scheme).
5

The act applies the provisions of the Longshore and Harbor Workers’ Compensation Act to the
employees of American contractors who are engaged in certain types of work overseas (i.e.,

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Specifically, H-8 required the awardee to provide the contracting officer with proof of
DBA insurance prior to performing the contract. AR 16 (“The contractor shall submit
either proof of a valid DBA Insurance policy or acceptance of an application with CNA
Insurance for the Prime and their Subcontractors at every tier prior to performance of the
contract.”). The clause warned that failure to obtain insurance could constitute a material
breach of its contract and lead to termination for default. AR 17. The clause also
required offerors to agree to insert a substantially similar requirement for DBA insurance
coverage “in all subcontracts (at every tier) to which DBA is applicable.” AR 16.
D.

The Evaluation Scheme

The solicitation stated that award would be based on “the best overall (i.e. best
value) proposal that is determined to be the most beneficial to the Government, with
appropriate consideration given to four evaluation factors: (1) Technical, (2) Past
Performance, (3) Price, and (4) Small Business Participation.” AR 54. The Technical
factor was to be the most significant evaluation factor, followed by Past Performance,
Price, and Small Business Participation. 6 AR 54.
The Technical factor contained two sub-factors: Design Specification / Technical
Data Package (“TDP”), and Repair and Maintenance Plan (“RMP”). AR 54. Under the

OCONUS) in support of the United States and/or its allies. See 42 U.S.C. § 1651 (2012);
Truczinskas v. Dir., Office of Workers’ Comp. Programs, 699 F.3d 672, 674 (1st Cir. 2012);
Serv. Employees Int’l, Inc. v. Dir., Office of Workers Comp. Program, 595 F.3d 447, 452 (2d
Cir. 2010).
6

Norsat does not challenge either the Small Business Participation or the Past Performance
factors as part of this litigation. See Pl. Mot. 7, n.2.

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TDP sub-factor, the Army planned to evaluate the offerors’ design and technical
specifications of its proposed system under the development option. AR 54. The
solicitation instructed offerors that they should “address the layout, model, features, size,
and weight of the design(s) it will be submitting per the [PWS].” AR 55. The TDP subfactor would “be evaluated by how definitive the written explanation of the design
specification and technical data package of the one system capability the offeror is
choosing to submit pricing and for the [vehicle mounted] and [m]aritime systems.” AR
54.
Under the RMP sub-factor, the offerors were required to describe their ability to
accept and respond to service requests anywhere DVIDS terminal systems are deployed
on a 24/7/365 basis. AR 55. The agency planned to evaluate this sub-factor based on,
among other things, the extent to which an offeror demonstrated the capability of its
personnel “to travel to equipment locations throughout various areas of CONUS as well
as locations OCONUS” to provide maintenance and help desk support. AR 55. Offerors
were required to submit proposals that detailed their team structures and how they
planned to “obtain or hire and retain the necessary qualified personnel with the requisite
knowledge, skills, experience and training to successfully” perform on the contract. AR
55.
The adjectival ratings for the Technical factors were as follows:
Outstanding: Proposal meets requirements and indicates an exceptional
approach and understanding of the requirements. The proposal contains
multiple strengths and no deficiencies. Risk of unsuccessful performance is
very low.

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Good: Proposal meets requirements and indicates a thorough approach and
understanding of the requirements. Proposal Contains at least one strength
and no deficiencies. Risk of unsuccessful performance is low.
Acceptable: Proposal meets requirements and indicates an adequate
approach and understanding of the requirements. Proposal has no strengths
or deficiencies. Risk of unsuccessful performance is no worse than
moderate.
Marginal: Proposal does not clearly meet requirements and has not
demonstrated an adequate approach and understanding of the requirements.
Risk of unsuccessful performance is high.
Unacceptable: Proposal does not meet requirements and contains one or
more deficiencies. Proposal is unawardable.
AR 55.
For the Price evaluation, the solicitation explained that the Army would evaluate
“price based on prices/costs proposed for all [contract line items (“CLINs”)] and any and
all other price/cost related factors required by the solicitation.” AR 56-57. The
solicitation noted the Army would perform a price reasonableness analysis for the fixedprice CLINs and other price/cost related factors, including DBA insurance for staff who
would work OCONUS. 7 See AR 47, 56-57.
E.

Encompass’s Proposal Submission

The Army received proposals from two offerors: Norsat and Encompass. AR 517667, 912-1051. With regard to new DVIDS systems, Encompass proposed four systems
7

Section 3.3.2 of the solicitation provided, “[f]or DBA Insurance . . . Bidders/Offerors should
compute the total compensation . . . to be paid to employees who will be covered by DBA
insurance . . . . The [computed total cost] . . . and a copy of the insurance quote shall be provided
with the proposal.” AR 47-48. The solicitation further provided that “[a]ll CLINs are [Firm
Fixed Price] or [Cost Plus Firm Fixed Price] in the solicitation except for shipping and DBA
(OCONUS) which are No-Fee Bearing Cost CLINs.” AR 278.

10

to address the five different types of system capabilities as part of a . AR 930.
Specifically, Encompass proposed (1) a combined system for the Deployable and
Manpackable capabilities; 8 (2) a separate system for the Transportable capability; (3) a
separate Vehicle Mounted system; and (4) a separate Maritime system. AR 930, 105253. Encompass’s proposal also described a 40-pound, 65 cm X-band terminal as an
option available for future purchase, however Encompass cautioned that “[t]his solution
is not being proposed now because it operates on X-Band and the DVIDs integrated
environment is Ku-band only.” 9 AR 938.
In order to address the requirement for repair and maintenance of legacy DVIDS
terminals, Encompass proposed either working with Norsat after award or, in the
alternative, developing a workaround:
* * *.
AR 960. In addition, Encompass stated that it would leverage its teammate,
Telecommunications Systems, Inc. (“TCS”), to support existing legacy systems:
TCS is unique in that they support all satellite terminal manufacturers,
including General Dynamics, Wavestream, Norsat, Cisco, Panasonic,

8

Encompass proposed a combined system that was “based upon the GDST Warrior SMT 1.0
meter KU/X/KA-band terminal.” AR 930. As it clarified in its first proposal addendum,
Encompass proposed “X-band kits [to] allow quick and easy band changes between Ku and Xband. . . . The X-band kit is packaged in a padded transit case that . . . weighs ≤ 52 lbs. Total
system weight is ≤ 170 lbs. as KU-band; ≤ 222 lbs. as KU/X band.” AR 1052. Encompass also
stated that the MTTR would be less than 30 minutes, “assuming available spare parts.” AR 934.
9

Encompass’s proposal further stated that, “Team Encompass offers an optional X-band
Manpackable System based on Tampa Microwave’s TM-X850MP 65cm antenna, which was
specifically designed for Soldiers; it weighs only 27 lbs. and can be packed into a single, small
backpack that weighs less than 40 lbs.” AR 938.

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Comtech, and AvL Technologies. TCS personnel are cross-trained on all
manufacturers. . . . * * *.
AR 967.
F.

Agency Discussions

The Source Selection Evaluation Board (“SSEB”) completed three rounds of
evaluations and conducted two rounds of discussions in between those evaluations. See
AR 759-65, 1078-89. Both Norsat and Encompass were assigned deficiencies and/or
weaknesses, two of which are particularly relevant to the case at bar. During the first and
second round of discussions, the Army found that Encompass’s terminal help desk
proposal posed a significant risk to the government * * *. See AR 1056, 1079, 1085,
1170-71, 1181. 10 In its June 12, 2012 addendum to its proposal, Encompass sought, for
the second time, to address this weakness:
Encompass acknowledges the government’s concerns regarding * * *
issues and, as such, we will modify our proposed support model and * * *.
AR 1063. Encompass’s addendum then proceeded to describe the qualifications of the
engineers who would staff the help desk. AR 1063-65. In its final Technical evaluation,
the Army stated that Encompass had “addressed the weakness * * *.” AR 1194.
In addition, the Army assigned deficiencies to both Encompass’s and Norsat’s
Price proposals for failing “to provide the Government with an insurance quote for the
DBA Insurance.” AR 763, 1087. In response, both offerors identified the pages of their

10

In the second round of discussions, the SSEB stated that Encompass’s revised proposal to hire
three engineers instead of two, “still identifies the current DVIDS’s Hub staff as the first line of
support and offers 3 not-clearly-defined-engineers/[h]elp desk technicians.” AR 1085, 1181.

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initial proposals which contained their quotes for DBA insurance and attached copies to
their discussion responses. AR 741, 744, 1069-70. The government subsequently
concluded that both estimates were based on industry standards and found that both
proposals met the solicitation’s requirements. AR 1143, 1198.
G.

The SSEB’s Final Evaluation

In its final Technical evaluation, the SSEB credited Encompass with five strengths
across the two technical sub-factors and no weaknesses. AR 1190-97, 1309, 1341.
Specifically, Encompass received two strengths under the TDP sub-factor for (1) the
auto-acquire technology that was included as part of the Encompass’s proposed
manpackable solution, and (2) the light (40 pound) weight of the optional manpackable
single backpack X-band system. AR 1341. Encompass also received three RMP
strengths because (1) Encompass’s partner, TCS, had 200 engineers who were already
deployed worldwide; (2) some or all of the companies on Team Encompass were
International Organization for Standardization (“ISO”) 9001 or ISO 14001 certified; 11
and (3) Encompass had already built into its workflow the use of the “Transmitter
Tracker” system. AR 1309, 1341. Encompass was assigned a score of “Good-Low
11

As discussed infra, the parties dispute the basis of Encompass’s strength for ISO certification.
The June 27, 2012 Technical evaluation worksheet prepared for Encompass by the SSEB stated
that “[t]he proposal contains a Strength. All Vendors are ISO certified Equipment manufacturers
and repair/maintenance partner companies [are] all ISO 9001 or 14001 certified.” AR 1196.
The award brief to the SSA, dated September 19, 2012, stated that “[a]ll vendors are ISO
certified [e]quipment manufacturers and repair/maintenance partner companies are all ISO 9001
or 14001 certified.” AR 1309. The SSEB summary report that was provided to the SSA on or
before September 25, 2012, AR 1351, stated that, “[Encompass] and all subcontractors are all
ISO 9001 or 14001 certified.” AR 1341. Notably, the source selection decision document
signed by the SSA on September 28, 2012 does not discuss ISO certifications whatsoever. See
AR 1353-57.

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Risk” for each sub-factor and an overall Technical score of “Good-Low Risk.” The
SSEB noted that Encompass’s proposal was “Good,” and not “Exceptional,” because the
“strengths, while potentially advantageous to the Government, are not such that they will
provide immediate, material benefit and as such, do not elevate the overall proposal
higher than Good-Low Risk.” AR 1341.
Norsat received four strengths under the TDP sub-factor, five strengths under the
RMP sub-factor, and no weaknesses or deficiencies. AR 1342-43. As a result, Norsat
received an “Outstanding-Risk Very Low” rating for both technical sub-factors and for its
overall technical rating. AR 1343. The SSEB’s evaluation across all criteria is
reproduced in the table below:
Encompass
Overall Technical
Good – Risk Low
(a) Design Specification / TDP Good – Risk Low
(b) Repair & Maintenance Plan Good – Risk Low
Past Performance
Substantial Confidence
Small Business Participation
Marginal
Price
$* * *

Norsat
Outstanding – Risk Very Low
Outstanding – Risk Very Low
Outstanding – Risk Very Low
Substantial Confidence
Marginal
$* * *

AR 1350. On or about September 25, 2012, the SSEB’s report was forwarded to the
Source Selection Authority (“SSA”) to help make a final award decision. AR 1351.
H.

The SSA’s Final Decision and Award to Encompass

On September 28, 2012, the SSA decided that, despite Norsat’s higher-rated
Technical proposal, Norsat’s nearly * * * 36.2 %—price premium made Encompass’s
proposal the best value to the government. AR 1357. In her findings, the SSA stated that
she had received a detailed briefing from the Procuring Contract Officer (“PCO”) on the

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SSEB analysis and had reviewed the SSEB report. AR 1354. The SSA then compared
the offerors based on the evaluation criteria. AR 1354-57. The evaluation results across
all evaluation criteria are summarized below:
Encompass
Overall Technical
Good – Risk Low
(a) Design Specification / TDP Good – Risk Low
(b) Repair & Maintenance Plan Good – Risk Low
Past Performance
Substantial Confidence
Small Business Participation
Marginal
Price
$* * *

Norsat
Outstanding – Risk Very Low
Outstanding – Risk Very Low
Outstanding – Risk Very Low
Substantial Confidence
Marginal
$* * *

AR 1354.
After noting that neither offeror’s Technical proposal received any deficiencies or
weaknesses, the SSA discussed the benefits of each offerors’ Technical solution. AR
1354. For example, the SSA described how Encompass’s “technical data package for the
man-packable, portable 40 pound-system is a benefit to the government due to the
system’s small size and low weight.” AR 1355. The SSA also explained that the
inclusion of auto-acquire technology in the manpackable solution was unique to
Encompass and would “dramatically lessen the difficulty and time required to move the
dish up and down and polarize it to connect with the correct satellite.” 12 AR 1355. With
regard to Encompass’s RMP, the SSA recognized a strength based on the geographic
12

Encompass proposed a combined deployable/manpackable terminal with an auto-acquire
motorized antennae that, according to Encompass’s proposal, enables an operator to push “a
single button to deploy, acquire the target satellite, and begin transmitting.” AR 930-31.
Although Norsat proposed auto-acquire technology for its motorized terminals, AR 554, neither
Norsat’s deployable (i.e., DVIDS A BLOCK III) nor its manpackable system (i.e., DVIDS C
BLOCK III) clearly indicated the use of a motorized terminal and/or auto-acquire technology.
See AR 554-557 (DVIDS A BLOCK III description), 562-65 (DVIDS C BLOCK III
description).

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distribution of TCS’s 200 employees. AR 1356. Norsat’s technical proposal was
recognized for three strengths under the TDP sub-factor and four strengths in the RMP
sub-factor. AR 1355-56.
Both Norsat and Encompass received the same scores for their Past Performance
(Substantial Confidence) and Small Business (Marginal) proposals. The SSA stated that
she had reviewed multiple Past Performance questionnaires submitted for each proposal,
as well as information in the government’s Past Performance Information Referral
System (“PPIRS”). The SSA noted that both Norsat and Encompass had “received a
number of favorable comments from respondents . . . and in the PPIRS. There was no
indication in the past performance assessments that would bring into question an award to
either offeror.” AR 1356. The SSA concluded that, “[i]t is my position that there is
substantial confidence that either offeror . . . can successfully perform the requirements of
the solicitation.” AR 1356. In addition, both proposals received a “Marginal” rating for
the Small Business Participation factor because “their proposed small business
participation percentages fell significantly below the 13% goal (8.1% for [Encompass];
and 6.7% for [Norsat].” AR 1356.
With regard to Price, Norsat’s proposal of * * * was * * * more expensive than
Encompass’s. AR 1357. The SSA stated that, following a cost realism analysis
performed on the DBA insurance, no cost adjustment was made. AR 1357.
Summarizing the price evaluation, the SSA concluded that “the price difference stems
primarily from the forces of competition and each offeror’s approach to satisfying the
Government’s requirements.” AR 1357.
16

After acknowledging the relative importance of each of the evaluation criteria, the
SSA stated why Norsat’s higher Technical score did not justify award:
I recognized the benefits in [Norsat’s] proposal. However I did not find
enough benefit in [Norsat’s] proposal that would be worth the additional *
* * premium of 36.2%. I also note that Section M of the solicitation stated
that the closer the ratings are in the non-price factors, the more significant
Price becomes.
AR 1357. Based on this analysis, the SSA determined that Encompass’s proposal
represented the best value to the government. AR 1357. Award was made on September
28, 2012, AR 1358, and Norsat received a debriefing on October 9, 2012. AR 1412.
I.

The GAO Protest

Also on October 9, 2012, Norsat filed a protest with the United States Government
Accountability Office (“GAO”), as well as supplemental protests on October 19, 2012
and November 19, 2012. AR 1443, 1471, 1552. The protest challenged several aspects
of the award, such as the agency’s alleged deviation from the solicitation’s evaluation
scheme, failure to conduct a proper Technical evaluation, and failure to conduct a proper
Past Performance evaluation. AR 1455, 1457, 1477. The protest was withdrawn on
January 8, 2013. Intervenor Mot. 13, Gov. Mot. 9.
J.

The Instant Litigation

Invoking the court’s Tucker Act Jurisdiction under 28 U.S.C. § 1491(b)(1) (2012),
Norsat timely filed this action on January 16, 2013 and moved for a Temporary
Restraining Order (“TRO”) and a preliminary injunction. ECF No. 2 (TRO); ECF No. 3
(preliminary injunction). The court granted Encompass’s motion to intervene on January
17, 2013. Order, ECF No. 11. Following a status conference with the parties on January
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18, 2013, the court denied the plaintiff’s motion for a TRO and the parties agreed to
consolidate the plaintiff’s motion for a preliminary injunction with its cross-motion for
judgment on the administrative record. Order, ECF No. 13. On February 13, 2013, the
government moved to strike portions of the declaration of a * * *, a Norsat Vice
President, which had been attached to the plaintiff’s complaint. Motion to Strike, ECF
No. 28. Briefing on all motions was completed on March 1, 2013, and argument was
heard on March 18, 2013.
II.

DISCUSSION
A.

Standard of Review

This court’s bid protest jurisdiction extends to actions “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). In such cases, the court’s role is defined by the standards of the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (2012). See 28 U.S.C. §
1491(b)(4) (adopting APA standard of review). Under the APA standard, the court asks
whether the agency’s decision was “within the bounds of reasoned decisionmaking.”
Baltimore Gas & Elec. Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87, 105 (1983).
Thus, an award will not be set aside unless the plaintiff carries its burden of showing that
the agency acted in a manner that was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” Banknote Corp. of Am., v. United States, 365
F.3d 1345, 1350 (Fed. Cir. 2004) (citations omitted).
18

In bid protest cases, the court can set aside an award as arbitrary or capricious if
the plaintiff carries the burden of showing that either “(1) the procurement official’s
decision lacked a rational basis; or (2) the procurement procedure involved a violation of
regulation or procedure.” Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358
(Fed. Cir. 2009). Under the first prong, the plaintiff carries a “heavy burden” of
demonstrating that the contracting agency failed to provide “a coherent and reasonable
explanation of its exercise of discretion.” Banknote, 365 F.3d at 1351. Even when a
plaintiff demonstrates that a procurement official acted irrationally, the plaintiff must
demonstrate that, as a factual matter, the official’s conduct was prejudicial. See BINL,
Inc. v. United States, 106 Fed. Cl. 26, 36 (2012) (quoting Bannum, Inc. v. United States,
404 F.3d 1346, 1351 (Fed. Cir. 2005)).
When analyzing procurement decisions, agency officials are afforded substantial
latitude “to determine which proposal represents the best value for the government,”
E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996), and this court
presumes that procurement officials “perform their duties correctly, fairly, in good faith,
and in accordance with law and governing regulations . . . .” Schism v. United States,
316 F.3d 1259, 1302 (Fed. Cir. 2002). Moreover, the court generally will not second
guess an agency’s assessment of risk stemming from the chosen procurement strategy or
a particular offeror’s capacity to perform. See CHE Consulting, Inc. v. United States,
552 F.3d 1351, 1356 (Fed. Cir. 2008) (agency provided rational basis for conclusion that
de-bundling procurement posed unacceptable risk); Impresa Construzioni Geom.
Domenico Garufi v. United States, 238 F.3d 1324, 1337-38 (Fed. Cir. 2001) (evidence
19

that winning contractor was subject to improper control was sufficient to rebut
presumption of regularity as to agency’s conclusion regarding contractor’s
responsibility). “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 . . . .” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir.
1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)).
Alternatively, a protester can prevail by showing that it was prejudiced by a clear
violation of applicable statutes or regulations. See Banknote, 365 F.3d at 1351 (quoting
Impresa, 238 F.3d at 1331-32). The prejudice caused by the violation must be
“significant” in order to warrant setting aside the award. See Bannum, 404 F.3d at 1354.
Put another way, a protester must show that there was a “substantial chance” it would
have received the contract award in the absence of the agency’s error. See id. at 1358;
Banknote, 365 F.3d at 1351.
B.

The Army’s Technical Evaluation Was Not Arbitrary, Capricious, an
Abuse of Discretion, or Contrary to Law

The plaintiff contends that the Army’s Technical evaluation was arbitrary,
capricious, and an abuse of discretion—and that the best-value determination must
therefore be set aside—because Army officials (1) did not require Encompass to propose
a system that conformed to the weight and MTTR “requirements” found in the Technical
Exhibit; (2) did not require Encompass to propose a help desk solution that would be
fully staffed on the date of award; (3) unreasonably relied on alleged material
misrepresentations made by Encompass in reaching a best value determination; (4)

20

provided briefing slides to the SSA that incorrectly credited Encompass (or its
teammates) with ISO 9001 or 14001 certifications; and (5) credited a portion of
Encompass’s proposal with a strength in violation of the solicitation’s requirements.
Because, for the reasons discussed below, the record demonstrates that (1) the Army had
a coherent and reasonable explanation for rating Encompass’s Technical proposal as
“Good-Low Risk” and (2) the SSA’s single error in evaluating Encompass’s Technical
proposal was not significantly prejudicial to Norsat, the court concludes that the Army’s
Technical evaluation was not arbitrary, capricious, an abuse of discretion, or contrary to
law.
1.

The Army’s Conclusion that Encompass’s
Deployable/Manpackable Solution Complied with the
Solicitation’s Technical Requirements Was Not Irrational

The plaintiff contends that the government abused its discretion by waiving or
relaxing the solicitation’s 220-pound weight and 30-minute MTTR “requirements” when
it evaluated Encompass’s proposal. Pl. Mot. 18-21. Specifically, the plaintiff argues in
its briefs that the plain language of the Technical Exhibit set forth general design
parameters that could only be avoided in cases where “a specific design component or
parameter was specifically stated.” Pl. Reply 3-6. For example, the plaintiff contends
that the use of the word “shall” and/or “maximum” in connection with the Technical
Exhibit’s discussion of weight and MTTR created mandatory design parameters. Id.
Given this reading, the plaintiff concludes that the Army abused its discretion in
accepting Encompass’s proposal because it “ignored the fact that Encompass’s proposed
Manpackable system . . . exceeded the 220 pound weight limit.” Pl. Mot. 19. The
21

government and defendant-intervenor counter that the plain language of the solicitation
unambiguously stated that Technical Exhibit 1 was for informational purposes only and
was therefore not binding on Encompass. See Gov. Mot. 17-18; Intervenor Mot. 18-19.
As such, the Army was under no obligation to enforce the specific weight or MTTR
requirements set forth in the Technical Exhibit.
The court agrees with the government and the defendant-intervenor and concludes
that the solicitation did not establish binding weight or MTTR requirements. A review of
the record demonstrates that the Technical Exhibit was for informational purposes only
and did not establish detailed requirements for the new DVIDS terminals. As such, the
government did not abuse its discretion when it evaluated Encompass’s proposal.
The solicitation makes clear that offerors were to have broad latitude in proposing
solutions that differed from Norsat’s DVIDS systems. The PWS stated, in part, that “[the
c]ontractor is not confined to the technical means by which the legacy systems operate as
long as the capabilities below are met. [The c]ontractor is not confined to building
transmitter or transmitter types that are like the legacy systems.” AR 449. The PWS
then enumerated 11 capabilities that broadly defined the required functionality of the new
DVIDS systems—none of which included the specific weight or MTTR requirements
identified in the Technical Exhibit. AR 449. In fact, only requirements 5 and 10 even

22

indirectly implicated size or mobility requirements and Encompass’s proposal conformed
to those requirements. 13
More importantly, however, the introduction to the Technical Exhibit specifically
stated that it wasn’t binding. The words “For Informational Purposes Only” are written
in bold print at the top of the page, indicating that the agency intended—as it had twice
stated in the body of the PWS—that the Technical Exhibit did not serve to create binding
requirements. AR 450, 464. In addition, the introduction states that, “SATCOM systems
acquired over the performance period of this contract must conform as closely as possible
to the operational parameters of the current systems.” AR 464 (emphasis added). These
words expressly contemplate the possibility that offerors could deviate from the
operational parameters described therein and still meet the PWS requirements. This view
is confirmed by other language in the introduction to the Technical Exhibit, which states
that, “[f]or the purposes of [the solicitation], there is no restriction to use any legacy
system component associated with this requirement. Any reference to legacy system
equipment or name brand components is strictly as an example (e.g. Ku-Band PPL
100HA (Norsat) LNA, Panasonic CF-18 laptop).” AR 464. In the face of the
unambiguous language in the PWS and Technical Exhibit, the plaintiff’s argument that
the Technical Exhibit by its terms created binding requirements against which to judge
Encompass’s proposal cannot be sustained.

13

Requirement 5 stated that, “Transmitter or Transmitter type must be able to mount on a vehicle
and a maritime vessel at sea.” AR 449. Requirement 10 stated that, “Depending on military unit
using the transmitter or transmitter type, size, weight and portability will be a factor.” AR 450.

23

The court acknowledges that there are places where the Technical Exhibit
identifies certain components of the legacy system by name, and thus offering a different
component from those identified in the Exhibit might have raised issues. See AR 489
(listing Microsoft Windows operating system). However, legacy or name brand
components were not mentioned in the MTTR or weight specifications, and therefore this
argument is not necessary to resolve the case at bar. See AR 467 (A-MTTR), 473 (Aweight), 477 (B-MTTR), 482 (B-weight), 486 (C-MTTR), 492 (C-weight), 496 (DMTTR), 503 (D-weight), 507 (E-MTTR), 514 (E-weight).
Finally, the extensive record of questions and answers between the agency and the
offerors on the significance of the Technical Exhibit confirm the government’s position.
In response to a question about whether it was “the government’s intent that the
contractor’s proposal provides answers and pricing for all “shall” statements in Technical
Exhibit 1 . . . or is Technical Exhibit 1 for informational purposes only?” the agency
responded, “Technical Exhibit 1 is only for informational purposes as now stated in the
PWS.” AR 357. Similarly, in response to a question about whether the Technical
Exhibit established requirements for antenna aperture and amplifier sizes, the agency
stated that, “[b]y the operational requirements, Technical Exhibit 1 is merely a guideline
to reflect what currently works in the DVIDS integrated environment. New systems do
not have to be built to match the legacy system types.” AR 361 (emphasis added).
Put simply, because the Technical Exhibit did not create binding requirements for
the weight or MTTR of new terminals, the plaintiff’s argument that the Army abused its

24

discretion by failing to enforce such “requirements” and find Encompass’s proposal nonconforming is without merit. 14
2.

The Army’s Conclusion that Encompass’s Help Desk Solution
Complied with the Solicitation’s Requirements Was Not
Irrational

Next Norsat argues that the Army’s conclusion that Encompass’s proposal—* * *
—satisfied the PWS’s help desk requirements was irrational. See Pl. Mot. 22-23; Pl.
Reply 8-10. In response, the government and defendant-intervenor argue that the
government’s decision was supported because the solicitation expressly contemplated
post-award hiring, as evidenced by the statement “[t]he Offeror shall include details that
demonstrate its ability to . . . [o]btain or hire and retain the necessary qualified personnel
with the requisite knowledge, skills, experience and training to successfully execute the
requirement[.]” 15 Gov. Mot. 20 (citing AR 45); Intervenor Mot. 22.

14

In light of the clear language of the PWS, Technical Exhibit, and the answers to the Q&A, this
court does not reach the question of whether statements by the Procuring Contracting Officer,
SSEB, and SSA describing Encompass’s proposed systems as below the “maximum” weight
somehow transformed the Technical Exhibit into a requirements document. See Pl. Reply 4-7
(quoting AR 1547). The court notes, however, that the solicitation made clear that terminal
weight was a factor—albeit not a specific minimum or maximum requirement—in evaluating
technical proposals. See AR 450 (“Depending on [the] military unit using the transmitter or
transmitter type, size, weight and portability will be a factor.”). The court also does not reach the
question of whether, as the defendant-intervenor contends, Norsat failed to show prejudice
because, “Norsat’s proposed Type C system weighs 247 pounds when the X-band module is
added.” Intervenor Reply 7-8.
15

The government alternatively moves to dismiss the plaintiff’s arguments related to
Encompass’s proposed help desk solution on the ground that the plaintiff is actually objecting to
the awardee’s ability to perform under the contract, which is a matter of contract administration.
Def. Mot. 12-14. Because the plaintiff’s challenge is properly understood as an objection to the
agency’s Technical evaluation of Encompass’s proposal, jurisdiction is proper under 28 U.S.C. §
1491(b). Therefore the court DENIES the government’s motion to dismiss this claim.

25

The court again agrees with the government and defendant-intervenor that the
Army’s evaluation and acceptance of Encompass’s proposed help desk solution was not
irrational on the grounds that it presented an unreasonable risk. Contrary to plaintiff’s
contentions, the PWS did not expressly state that all help desk hiring must be completed
as of the date of award. Rather, offerors were required to explain how they planned to
“obtain or hire and retain” the necessary personnel to staff the help desk capability. AR
45. It is true, as the plaintiff notes, that the Army initially questioned Encompass’s help
desk proposal on the grounds that it posed a significant risk to the government. See AR
1063-65, 1194. Eventually, however, the government accepted Encompass’s proposal *
* *. AR 1063. In its final analysis, the Army determined that Encompass’s proposal met
the requirements for help desk staffing without presenting an unacceptable risk to the
government. AR 1194.
At core, the plaintiff’s disagreement with the Army is over its assessment of the
risk associated with postponing some help desk hiring until after award. This court,
however, must generally defer to an agency’s assessment of risk that accompanies a
given procurement strategy. See CHE Consulting, 552 F.3d at 1356. Where, as here,
Encompass proposed a facially plausible means to “ensure [that] access to a helpdesk
technician is possible,” and the record demonstrates that the Army thoughtfully
considered the risks associated with that approach, this court cannot second-guess the
correctness of the SSA’s decision. 16 See Honeywell, 870 F.2d at 648.

16

The court also rejects the plaintiff’s argument that the government treated the offerors
unequally when it accepted Encompass’s proposal to hire help desk staff after award, but refused

26

3.

The Army’s Conclusion that Encompass Could Meet the Legacy
System Repair and Maintenance Requirements Was Not
Irrational

The plaintiff argues that the award to Encompass must be overturned because (1)
Encompass intentionally made a false statement in its proposal and (2) the Army relied
on that statement in making its award. See, e.g., GTA Containers, Inc. v. United States,
103 Fed. Cl. 471, 483 (2012); Blue & Gold Fleet, LP v. United States, 70 Fed. Cl. 487,
495 (2006), aff’d 492 F.3d 1308 (Fed. Cir. 2007). In general, Norsat disputes the
veracity of several statements in Encompass’s proposal that indicated that Encompass
would be able to perform maintenance and processing of all DVIDS legacy software and
spare parts within 15 days of contract award. 17 Pl. Mot. 27-31. Relying on GTA

to give Norsat credit for its plan to increase small business participation after award. In the
absence of contrary language in the solicitation, the Army’s decision not to credit—as part of the
Small Business Participation evaluation—an offeror’s intent to increase future small business
participation has no bearing on the propriety of the Army’s Technical evaluation.
17

In support of this contention, the plaintiff attached to its complaint a declaration of * * *, who
is the Vice President, Satellite Sales, North America, of Norsat International. See ECF No. 1
Pages 548-54. On February 13, 2013, the government moved to strike paragraphs 3-19 of the
declaration. See Motion to Strike, ECF No. 28. The government argues that (1) the plaintiff
failed to file a proper motion to supplement the administrative record, (2) the material is not
necessary for effective judicial review, and (3) the material in paragraphs 15-17, and paragraph
19, includes impermissible hearsay. Def. Mot. Strike 4-6.
The court concludes that, in this unique case, resort to extra-record information in paragraphs 17, 9-11, 15, and 17-18 of the * * * Declaration is necessary for effective judicial review. The
plaintiff’s material misrepresentation theory is premised on the steps that the plaintiff took to
prevent others (including the awardee) from gaining knowledge of the proprietary technology
that was central to a key aspect of the procurement at issue. As such, information concerning
those steps based on * * * personal knowledge may be considered by the court to determine
whether, as the plaintiff essentially contends, it was technologically impossible for any offeror
other than Norsat to claim that it intended to service the legacy systems without Norsat’s
participation. See Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1379-81 (Fed. Cir.
2009).

27

Containers, 103 Fed. Cl. 471 and Johnson Controls Sec. Sys., B-296490, B-296490.2,
2007 CPD ¶ 102 (Comp. Gen. 2005), the plaintiff asserts that, because the SSA did not
properly consider how Encompass could execute its proposal without Norsat’s
cooperation, which Encompass knew Norsat had refused to offer, the SSA’s reliance on
Encompass’s representations must be re-evaluated.
The plaintiff begins by claiming that, because Norsat had twice rejected
Encompass’s overtures to establish a teaming arrangement, Encompass’s proposal falsely
represented that it would partner with Norsat. 18 A fair reading of Encompass’s proposal,
however, demonstrates that Encompass did not actually represent to the Army that Norsat
would be an Encompass teammate. Rather, Encompass proposed that it would either
contract with Norsat after award or, failing that, Encompass would “develop a GUI
interface to operate with the legacy systems . . . .” AR 960. As the government correctly
notes, Encompass’s proposal did not list Norsat as a member of its team. 19 Gov. Mot 26

By contrast, the statements by * * * speculating as to the capabilities of Encompass (or its
teammates) are not based on personal knowledge and will not be considered. Thus the remaining
paragraphs (8, 12-14, 16, and 19-23) are stricken. In addition, the court will scrupulously
disregard those portions of paragraphs 6, 9, 10, 11, and 17 in which* * * speculates as to the
capabilities of third parties to service legacy DVIDS equipment. Accordingly, the government’s
motion to strike is GRANTED-in-PART and DENIED-in-PART, and the plaintiff’s motion to
supplement the administrative record is GRANTED-in-PART and DENIED-in-PART.
18

According to * * *, prior to submitting a proposal in this procurement, “Encompass contacted
Norsat on two occasions to request that Norsat team with Encompass as a subcontractor to
Encompass, which Norsat declined, and had made clear to Encompass that it would not
collaborate with it in any way on the Solicitation.” * * *. ¶ 17.
19

The government alternatively moves to dismiss the plaintiff’s arguments related to
Encompass’ ability to repair and maintain legacy systems within the 15-day period specified in

28

(citing AR 921-26). By contrast, the awardees in GTA Containers, Inc. and Johnson
Controls made affirmative—and false—representations about specific actions that they
had taken prior to submitting their proposals. 20 As such, these cases are distinguishable.
In addition, the plaintiff has failed to carry its burden of demonstrating that
Encompass materially misrepresented that TCS personnel could support Norsat
equipment. Although * * *, a Vice President of Norsat, lists various steps Norsat has
taken to prevent third parties from gaining access to Norsat’s proprietary technology (for
example, * * * states that “Norsat has trained only two individuals in the private sector on
the repair and maintenance of the DVIDS equipment . . . .” * * *. ¶ 6, 21 there is no reason
to believe that TCS employees were not trained by parties who had received Norsat-led

the contract on the ground that the plaintiff is actually objecting to the awardee’s ability to
perform under the contract. As discussed, because the plaintiff’s challenge is properly
understood as an objection to the agency’s Technical evaluation of Encompass’ proposal,
jurisdiction is proper under 28 U.S.C. § 1491(b). Therefore the court DENIES the government’s
motion to dismiss this claim.
20

In GTA Containers, the parties agreed that the defendant-intervenor had represented that a
particular subcontractor was being offered as a component part supplier, despite the absence of
an intent or agreement to do so. 103 Fed. Cl. at 485-86. In Johnson Controls, the awardee’s
proposal claimed that it was “working with [a vendor] to obtain the certifications required by the
RFP . . . .”, however the awardee later admitted that it had not arranged or coordinated with the
necessary vendor to obtain such certifications. 2007 CPD ¶ 102, at *5-6.
21

According to * * *, (1) Norsat holds patents in the equipment and software used by the DVIDS
program; (2) Norsat does not subcontract support on its technology to third parties; (3) third
party manufacturers are prohibited from selling Norsat equipment to non-Norsat entities; (4)
Norsat has only trained two individuals in the private sector on the repair and maintenance of
DVIDS equipment; (5) Norsat’s licensing agreement with the government prevents the
government from making changes or accessing certain DVIDS software; (6) Norsat
manufactures most of the spare parts for DVIDS equipment; (7) DVIDS equipment training
manuals are proprietary to Norsat, which has not licensed the manuals to third parties; and (8)
Norsat does not sell its custom spare parts unless it performs the repair and maintenance service.
See * * *. ¶¶ 3-9, 10-11, 18.

29

training or that TCS engineers were not otherwise capable of designing software to run
the legacy system.
Similarly, the plaintiff has failed to demonstrate that it was irrational for the Army
to conclude that Encompass would be able, with or without Norsat’s support, to provide
repair and maintenance on legacy DVIDS systems within 15 days of award. Apart from
* * *statement that Norsat does not allow its source code to be distributed, the plaintiff
offers no evidence to establish that Encompass (or its teammates) would be unable to
perform as proposed. Indeed, during oral argument counsel for the plaintiff conceded
that it could be possible for a sophisticated company like Encompass to develop such
software within a brief period. Given the undisputed record evidence of the quality of
TCS’s engineers, the plaintiff’s evidence does not raise serious questions about the
veracity of this or any other element of Encompass’s proposal. As such, the plaintiff has
failed to establish that the SSA relied on a material misrepresentation when she decided
to award the contract to Encompass.
4.

The SSEB’s Characterization of Team Encompass’s ISO
Certifications Did Not Significantly Prejudice Norsat

The plaintiff also argues that the court must set aside the award to Encompass
because the SSEB provided materials to the SSA that inaccurately stated that Encompass
and some of its other teammates held various ISO certifications. Pl. Mot 24-25; Pl. Reply
10-12. Relying on Huntsville Times Co., v. United States, 98 Fed. Cl. 100, 119 (2011),
the plaintiff claims that “it is well established if an SSEB erroneously concludes that an
awardee has a strength, and that conclusion is provided to the SSA in the reports and

30

briefings, and the SSA makes no disagreement with the SSEB’s conclusion, the award
decision must be overturned.” Pl. Reply 12. Based on this authority, the plaintiff draws
attention to a concededly inaccurate statement in the SSEB’s summary document:
“[Encompass] and all subcontractors are all ISO 9001 or 14001 certified.” Pl. Mot. 25
(citing AR 1341). In addition, the plaintiff disputes the accuracy of a slide in the SSEB’s
briefing package, which credited Encompass with a strength because “[a]ll Vendors are
ISO certified Equipment manufacturers and repair/maintenance partner companies are all
ISO 9001 or 14001 certified.” Pl. Reply 11 (citing AR 1309). Norsat contends that
because the SSA did not address these misstatements in her source selection decision
document, the Army “erroneously inflated Encompass’s qualifications,” and that this
“incorrect finding was a material factor in the best value analysis.” Pl. Mot. 25.
In response, the government argues that the factual misstatement in the SSEB’s
summary document (i.e., that Encompass was ISO-certified) was actually corrected in the
briefing materials provided to the SSA. Gov. Mot. 22. The government and defendantintervenor further contend that, read in context, the SSEB’s briefing slides were accurate
and reasonable because the companies that were proposed as the principle equipment
manufacturers or repair/maintenance partner companies (i.e. General Dynamics
SATCOM Technologies, Tampa Microwave, and TCS) did, in fact, possess the
certifications for which the SSEB credited Encompass. Intervenor Mot. 26; Gov. Mot.
10-11. The government and defendant-intervenor further note that Norsat has failed to
demonstrate prejudice in light of the absence of any reference to ISO certification in the

31

SSA’s source selection document. Gov. Mot. 23; Gov. Reply 12-13; Intervenor Mot. 27;
Intervenor Reply 11-13.
Regardless of whether the SSEB included Encompass among the list of
contractors having ISO certifications in the briefing slides, the plaintiff’s argument
ultimately fails because Norsat has not demonstrated “significant prejudice.” It is well
established that a party cannot prevail in a bid protest unless it establishes that it has been
significantly prejudiced by the agency action being challenged. See BINL, Inc., 106 Fed.
Cl. at 36; Weston Solutions, Inc. v. United States, 95 Fed. Cl. 311, 322 (2010) (citing
Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1378 (Fed. Cir. 2009)). It is not
enough for Norsat to prove that the SSEB made an erroneous statement to the ultimate
decision-maker. See Huntsville Times, 98 Fed. Cl. at 119-21 (determination of whether
SSA relied on evaluation committee’s errors necessary prior to granting plaintiff relief).
Rather, Norsat must demonstrate that the SSA relied on the erroneous statement(s) in
reaching her ultimate decision to award the contract to Encompass. See id. In other
words, Norsat must show that the SSA’s decision lacked a rational basis supported by the
record such that, but for the SSA’s reliance on the SSEB’s errors, Norsat would have had
a substantial chance of receiving the award.
In this case, the SSA awarded Encompass a total of three technical strengths.
Under the TDP sub-factor, Encompass was recognized for the small weight of its X-Band
only pack, as well as the auto-acquire technology used in its deployable/manpackable
solution. In addition, Encompass received a strength under the RMP sub-factor in
recognition of the wide geographic distribution of TCS’s employees. Nowhere in the
32

source selection decision document did the SSA indicate that ISO certification played a
role in her decision. Thus, even if the court assumes that the SSEB should not have given
Encompass a strength based on its ISO certifications (which is not certain given the
certifications of its team members), this would not change the three strengths (and
absence of deficiencies) that were the basis of the SSA’s decision. As noted, the criteria
for a rating of “Good-Low Risk” was that the offeror received no deficiencies and at least
one strength. Encompass was therefore entitled to its rating. Norsat has failed to provide
the court with a suitable justification for concluding that, but for the SSEB’s
misstatements, Encompass’s technical evaluation would have been downgraded and
Norsat would have had a substantial chance of receiving the award. Therefore the court
must agree with the government and defendant-intervenor that Norsat has failed to
demonstrate the significant prejudice necessary to warrant granting relief.
5.

The SSA’s Decision to Evaluate Encompass Based Partly on an
Optional 40-Pound Manpackable System Did Not Significantly
Prejudice Norsat

At oral argument, counsel for the plaintiff asserted for the first time that it was
impermissible for the Army to credit Encompass with a strength based on Encompass’s
proposed option for a future 40-pound X Band DVIDS system. Specifically, the plaintiff
argued that this option was not listed separately in the pricing matrix, and therefore could
not be a proper basis for receiving a strength. In response, the government directed the
court to a page in Encompass’s proposal that stated that, “[t]his X-band terminal can be
substituted for the current terminal on CLIN 0009AB on Attachment 0002 Pricing Matrix
at an identical price.” AR 938. The government argued that, because Encompass had
33

provided a means to determine the pricing for the X-band terminal, it was proper for the
SSA to credit Encompass with an additional strength.
The court concludes that although the 40-pound terminal might be highly
beneficial to the government, Encompass should not have received a strength under the
solicitation’s terms. It is axiomatic that an agency must assess the relative qualities of
competitive proposals “solely on the factors and subfactors specified in the solicitation.”
48 C.F.R. §§ 15.305(a), 15.308. The solicitation stated that the TDP sub-factor would
“be evaluated by how definitive the written explanation of the design specification and
technical data package of the one system capability [for which] the offeror is choosing to
submit pricing . . . .” AR 54. None of the terminals that Encompass proposed for any of
the system capabilities consisted of a 40-pound terminal that operated in X-band only.
AR 930. In fact, Encompass’s proposal stated that the 40-pound terminal was “not being
proposed now because it operates on X-Band and the DVIDs integrated environment is
Ku-band only.” AR 938.
In her source selection decision document, the SSA stated that Encompass’s “manpackable, portable 40 pound system is a benefit to the Government due to the system’s
small size and low weight.” AR 1355. Based on this statement the SSA does not appear
to have been referring to the integrated multi-band solution that was actually proposed as
Encompass’s combined Deployable/Manpackable system capability. 22 In this
22

The defendant-intervenor’s motion for judgment confirms that the 40-pound terminal was not
what Encompass actually proposed as part of its manpackable system. See Intervenor Mot. 19
(describing the X-band module of its proposed manpackable solution as, “a separate module
[that] weighs 52 pounds”).

34

circumstance, the SSA erred in crediting Encompass with a strength for an item it
proposed for the future but was not part of its current proposal. 23
Notwithstanding this error, Norsat has failed to demonstrate how it was
prejudiced. As noted, supra, the criteria for a Technical score of “Good—Low Risk” was
the absence of any weaknesses/deficiencies and the presence of one or more strength.
Even eliminating Encompass’s TDP strength for the 40-pound terminal, Encompass still
would have received a TDP strength for its auto-acquire technology and a RMP strength
for the wide geographic coverage of its proposed TCS staff. In other words, Encompass
still would have qualified for a “Good—Low Risk” overall rating. In such
circumstances, the SSA’s overall Technical evaluation of Encompass would not have
changed and Norsat has again failed to establish significant prejudice. Accordingly,
Norsat’s argument must be rejected.
C.

The Army’s Evaluation of Encompass’s Price Proposal Was Not
Arbitrary, Capricious, an Abuse of Discretion, or Contrary to Law

The plaintiff contends that the agency’s evaluation of price was improper because
Encompass was not required to provide proof of its own DBA insurance policy. See Pl.
Mot. 23. According to the plaintiff, the plain language of the solicitation required that
offerors provide proof of DBA insurance for the prime and all subcontractors. Norsat
contends that by accepting Encompass’s price proposal despite the absence of a proper
23

The court cannot accept the government’s argument that, because Encompass’s proposal stated
that the 40-pound terminal would be offered at the same price as the proposed (and priced)
Manpackable/Deployable system, the 40-pound terminal was a proper basis for award. The
SSA’s ability to ascertain the future terminal’s price does not change the fact that Encompass
expressly did not include the 40-pound terminal in its official proposal.

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quote for the cost of DBA insurance for Encompass, the agency failed to conduct a
proper cost reasonableness analysis. In response, the government argues that acquisition
of appropriate DBA insurance is a matter of contract administration, and therefore is not
a proper basis for relief. Def. Mot. 5, 12-14. Moreover, the government contends, the
DBA insurance requirement applies only to contractors who will be operating OCONUS,
and Encompass offered proof of DBA insurance for the only teammate—TCS—who was
proposed for OCONUS work. 24 Further, the government asserts that, even if
Encompass’s failed to properly account for the cost of DBA insurance, the cost is so
small that any prejudice to Norsat was de minimis. Gov. Mot. 32.
The court agrees with the government that the solicitation only required offerors to
address the cost of DBA insurance for teammates that were proposed for OCONUS work.
Section 3.3.2 of the solicitation implicitly recognizes that some employees would not be
covered by the DBA insurance requirement. AR 47-48 (offerors must compute
compensation paid to employees who will be covered). See also AR 278 (“All CLINs are
[Firm Fixed Price] or [Cost Plus Firm Fixed Price] in the solicitation except for shipping
and DBA (OCONUS).”) (emphasis added). As such, the Army’s price evaluation of
Encompass’s DBA insurance costs would not be erroneous unless they excluded costs for

24

The government alternatively moves to dismiss the plaintiff’s arguments related to
Encompass’s acquisition of DBA insurance on the ground that the plaintiff is actually objecting
to the awardee’s ability to perform under the contract. Because the plaintiff’s challenge is
properly understood as an objection to the agency’s evaluation of Encompass’s proposal,
jurisdiction is proper under 28 U.S.C. § 1491(b). Therefore the court DENIES the government’s
motion to dismiss this claim.

36

teammates who were proposed for OCONUS work. 25 Because the plaintiff has not
demonstrated that Encompass specifically proposed to use any of its teammates (other
than TCS) for OCONUS work, the plaintiff has failed to demonstrate that the SSA
erred. 26
Moreover, even if Encompass had been required to provide a DBA insurance
quote for every member of the Encompass team, Norsat has failed to demonstrate
sufficient prejudice in the price evaluation to overturn the award. Norsat’s quoted price
for DBA insurance was * * *, which was * * * less than Encompass’s quoted price of * *
*. AR 1439. Even multiplying Encompass’s insurance quote by a factor of ten, the
difference in total cost between Encompass’s and Norsat’s DBA insurance would only
have been * * *. This would represent approximately .38% of the total difference in price
between the offerors. This minimal sum would not be sufficient to overturn an award
that will save the government * * *. 27

25

The court rejects the plaintiff’s argument that various DoD Policy Instruction Letters required
Encompass to propose DBA insurance for itself and its other teammates. See Pl. Reply 13-14.
Even assuming that the court would construe these letters in a manner beneficial to Norsat, the
plaintiff has failed to establish that these letters carry the force of law. See Hamlet v. United
States, 63 F.3d 1097, 1105 (Fed. Cir. 1995) (articulating test for determining whether agency
pronouncement carries force of law); Frazier v. United States, 79 Fed. Cl. 148, 164 (2007)
(solicitation prospectus did not carry force of law) aff’d, 301 F. App’x 974 (Fed. Cir. 2008).
26

Norsat’s argument that the Army treated Norsat differently from Encompass with regard to
DBA insurance is also without merit. As discussed, the Army initially believed that both
offerors had failed to provide DBA insurance quotes. The Army resolved any confusion during
discussions. See AR 741, 744, 763, 1069-70, 1087.
27

Having failed to establish that the government’s technical or price evaluations were “arbitrary,
capricious, an abuse of discretion, or otherwise contrary to law,” Banknote, 365 F.3d at 1350, the
court has no basis to grant the plaintiff’s request for a permanent injunction. Centech Group,
Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (citing PGBA, LLC v. United States,

37

III.

CONCLUSION
For the forgoing reasons, the plaintiff’s motion for judgment on the administrative

record is DENIED and the government’s and Encompass’s cross-motions are
GRANTED. Each party shall bear its own costs. The Clerk is directed to enter
judgment accordingly.
IT IS SO ORDERED.

s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge

389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (entitlement to permanent injunction requires success
on the merits)).

38