ADVANCED CONCEPTS ENTERPRISES, INC. v. USA

Filing 42

REPORTED Opinion - Denying Plaintiff's Motion for Judgment on the Administrative Record and Motion for Preliminary and Permanent Injunction 20 , 13 and Granting Defendant's Cross-Motion for Judgment on the Administrative Record 26 . Signed by Senior Judge Nancy B. Firestone. (gd) Service on parties made.

In the United States Court of Federal Claims
No. 18-1637C
(Filed: February 26, 2019)
*Opinion originally filed under seal on February 21, 2019

ADVANCED CONCEPTS
ENTERPRISES, INC.,
Plaintiff,
v.
THE UNITED STATES,
Defendant.

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Pre-Award Bid Protest; Subject Matter
Jurisdiction; Standing; Qualified to
Compete; Nontrivial Competitive
Injury; Office of Hearing and Appeals;
NAICS Code; Past Performance
Evaluation.

Robert John Wagman, Jr., Washington DC, for plaintiff, Laura Prebeck Hang and
Joshua M. Freda, Washington DC, of counsel.
Amanda L. Tantum, Civil Division, United States Department of Justice, Washington,
DC, with whom were Joseph H. Hunt, Assistant Attorney General, Robert E. Kirschman,
Jr., Director, and Martin F. Hockey, Jr., Deputy Director, for defendant. Brian
Chapuran, Associate General Counsel – Acquisition, Missile Defense Agency, Office of
General Counsel, Washington DC, of counsel.
OPINION
FIRESTONE, Senior Judge
Plaintiff, Advanced Concepts Enterprises, Inc. (“ACEs”) brought this pre-award
bid protest matter seeking to enjoin the United States Department of Defense, Missile
Defense Agency (“MDA”) from proceeding with the Request for Proposals No.
HQ01470-18-R-0009 (the “Solicitation”) on the grounds that (1) the United States Small
Business Administration’s Office of Hearings and Appeals (“OHA”) decision to uphold

MDA’s designation of the North American Industry Classification System (“NAICS”)
code 5417151 for the Solicitation was arbitrary, capricious, an abuse of discretion, and
contrary to law because NAICS code 5415132 was more applicable to the Solicitation’s
work, and (2) MDA’s selection of past performance evaluation criteria in the Solicitation
contrary to law because it failed to provide for a comparative evaluation of past
performance among offerors and because it treated offerors with no relevant past
performance as “acceptable” and thus favorably.
The parties have filed cross-motions for judgment on the administrative record
pursuant to Rule 52.1 of the Rules of the United States Court of Federal Claims
(“RCFC”). ACEs’ Mot. for J. on the Admin. Rec. (“Pl.’s MJAR”) (ECF No. 20); Def.’s
Cross-Mot. for J. on the Admin. Rec. (“Def.’s MJAR”) (ECF No. 26). Also pending is
plaintiff’s motion for preliminary and permanent injunctive relief. (ECF No. 13).

NAICS code 541715 titled, “Research and Development in the Physical, Engineering, and Life
Sciences (except Nanotechnology and Biotechnology” provides “This U.S. industry
compromises establishments primarily engaged in conducting research and experimental
development (except nanotechnology and biotechnology research and experimental
development) in the physical, engineering, and life sciences, such as agriculture, electronics,
environmental, biology, botany, computers, chemistry, food, fisheries, forests, geology, health,
mathematics, medicine, oceanography, pharmacy, physics, veterinary and other allied subjects.”
NAICS Manual 2017 at 476. The NAICS code includes a special provision, Footnote 11(d),
which states that “research and development for guided missiles and space vehicles includes
‘evaluations and simulations, and other services requiring thorough knowledge of missiles and
spacecraft.” MDA relied on this provision in assigning NAICS code 541715 to this procurement.
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NAICS code 541513 titled “Computer Facilities Management Services” provides “This U.S.
industry comprises establishments primarily engaged in providing on-site management and
operation of clients’ computer systems and/or data processing facilities. Establishments
providing computer systems or data processing facilities support services are included in this
industry.” NAICS Manual 2017 at 470.
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For the reasons discussed below, the court GRANTS the government’s crossmotion for judgment on the administrative record and DENIES ACEs’ motion for
judgment on the administrative record together with its motion for injunctive relief.
I.

FACTUAL BACKGROUND
On September 10, 2018, MDA issued the Solicitation seeking a contractor to

support the “Advanced Research Center (“ARC”) facility at Redstone Arsenal, located in
Huntsville, Alabama. AR 3878. This procurement will result in the award of one fiveyear contract with three one-year and one half-year options. The estimated value is $308
million. AR 3743. The Solicitation has been set aside for Woman-Owned Small
Businesses and the NAICS code 541715, Research and Development in the Physical,
Engineering Life Sciences has a size standard of 1,250 employees. AR 1354, 3878.
A. Background
ARC is a contractor-owned General Service Administration (“GSA”) leased
Research, Development, Test and Evaluation (“RDT&E”) facility designed and operated
to support Ballistic Missile Defense System (“BMDS”)3 Hardware-in-the-Loop
(“HWIL”) Ground Test (“GT”) and Flight Test (“FT”) activities.” AR 3349. ARC’s
Mission is to perform network/infrastructure design, to house and maintain the BMDS
guided missiles and space tactical hardware and software, to maintain cybersecurity

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BMDS is an integrated, layered architecture that provides multiple opportunities to destroy
missiles and their warheads before they can reach their targets. Specifically, it “comprises spacebased sensors, ground- and sea-based radars, ground-and sea-based interceptor missiles, and a
command and control system[.]” MDA Faces Challenges in BMDS Concurrency and Integration
Reporting, 57 No. 19 Gov’t Contracts ¶ 147 (May 13, 2015).

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compliance, and to perform lab asset management to realistically emulate/simulate the
complex weapon systems of the BMDS in support of BMDS Ground Testing and BMDS
Flight Test Risk Reduction Activities. Id. Under this Solicitation, the systems will be
expanded to include new sensors and tactical systems requiring ARC system design and
development activities to integrate new programs into the BMDS. Id.
MDA is also transitioning to a new ground test concept that includes Continuous
Integration and Continuous Agile Testing (“CI/CAT”). AR 3879. Continuous Integration
(“CI”) testing includes Continuous Development Integration (“CDI”) and Continuous
System Integration (“CSI”) testing. As a result of CDI objectives, the contractor selected
under the Solicitation will need to develop new processes and tools to respond to changes
driven by CDI. This will include network design and expansion as well as installation and
integration of Software/Hardware updates provided by elements as a result of CDI
discoveries. AR 3880. Testing will be managed via a Resource Management Cell and this
contract. Id.
MDA is also beginning the design and development of the new Combined Test
Center (“CTC”) facility to house the Missile Defense Data Center, the ARC, and related
test assets. Id. Under this Solicitation, the selected contractor will participate in the
system design activities to implement improvements that contribute to CI/CAT, asset
management, and data flow across all MDA systems housed in the CTC. Id.
Because the Solicitation is designed to take on many improvements, developing
the Solicitation involved a lengthy process which is summarized below.

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B. Pre-Solicitation Market Research and Industry Day
In March and April 2016, MDA conducted market research related to the subject
Solicitation. AR 19. MDA sent a Request for Information (“RFI”) inviting contractors
that could “assume all Research, Test and Evaluation, and Operation and Maintenance
Functions” which included “in-progress tests, experiments, exercises, war-games and
other customer programs as well as upgrade and modernization tasks involving facility,
hardware, and software efforts” to submit a statement of capabilities. AR 1-2. MDA
indicated that “capability statements will be separate from, and have no bearing on,
submissions in response to any future Request for Proposal[.]” AR 3. The statement of
capabilities was to include a description of the contractor’s technical abilities, including
network design capabilities. AR 12.
On January 12, 2017, MDA produced its first Market Research Report. AR 18-19.
The January Report stated, regarding the selection of a NAICS code that “[o]ut of the 11
potential sources, 8 sources agreed 541712 [now 54715- the code at issue] was
appropriate for this effort.” Id. Two sources believed NAICS code 541513 was
appropriate. Id.
On May 8, 2017, MDA invited prospective contractors to the ARC facility. AR
27. That same day, MDA requested industry input on its draft statement of proposed
work (“PWS”) and Technical Library content. AR 31. Thereafter, on June 30, 2017,
MDA issued its second Market Research Report. AR 72. In the June Report, MDA
announced the selection of NAICS code 541715. AR 74.

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The third and final Market Research Report was issued on December 8, 2017. AR
162. The December Report focused on MDA’s Organizational Conflict of Interest
(“OCI”) Policy. AR 163. The Report concluded that “absolute OCI restrictions should
only be applied” in limited circumstances and “[a]ll other OCI concerns should be
addressed under normal Agency OCI policy review procedures[.]” AR 165.
C. Draft Solicitations, OCI Schedule, and Questions and Answers
On March 13, 2018, MDA issued the Draft Request for Proposals (“DRFP”). AR
205. Of significance here, the March RFP indicated that past performance “evaluation
will result in a Performance Confidence Assessment” that included five rating categories:
“Substantial Confidence,” “Satisfactory Confidence,” “Neutral Confidence,” “Limited
Confidence,” and “No Confidence.” AR 732, 734. The DRFP indicated that for offerors
“without a record of relevant past performance or for whom information on past
performance is not available . . . the offeror may not be evaluated favorably or
unfavorably on past performance” and “shall be determined to have ‘Neutral
Confidence[.]’” AR 734. It further stated that “a record of ‘Substantial’ or ‘Satisfactory’
Confidence will be considered more advantageous to the Government than a record of
‘Neutral Confidence.’” Id. Past performance was part of the tradeoff analysis. AR 728.
On April 4, 2018, MDA released another DRFP. AR 745-48. The April DRFP
indicated that “[i]f an offeror believes that the requirements in these instructions contain
an error, omission, ambiguity, or are otherwise unsound, the offeror shall immediately
notify the PCO in writing with supporting rationale no later than five (5) days after the
release of this solicitation.” AR 1192. The April DRFP further indicated that regarding
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past performance, “the Government will conduct an assessment of the offerors’, Team
Members’, and Major Subcontractors’ Past Performance.” AR 1289. It also stated that
past performance would now be evaluated either acceptable or unacceptable where
acceptable meant that “the Government has a reasonable expectation that the offeror will
successfully perform the required effort, or the offeror’s performance record is
unknown.” AR 1286. The DRFP stated that offerors with no relevant past performance
will “be determined to have an unknown past performance” and that an “unknown”
determination is considered “acceptable.” Id.
On May 21, 2018, the Independent Government Estimate (“IGE”) and Technical
teams evaluated the performance work statement in the DRFP. AR 1351. Part of the
evaluation included considering which NAICS codes should apply to various Contract
Line Item Numbers (“CLINS”). Id. Eventually, the IGE and Technical teams concluded
that NAICS code 541715 was appropriate. Id. The evaluators considered the following
NAICS codes: 541513 for “Computer Facilities Management,” 541330 for “Engineering
Services Military and Aerospace Equipment and Military Weapons,” 518210 for “Data
Processing, Hosting, and related Services,” and 519190 for “All Other Information
Services.” AR 1355. The evaluators concluded that NAICS code 541715 was appropriate
because 41% of the work was under CLIN 006 which called for Network Design and fit
under NAICS code 541715. AR 1351, 1356. The IGE team concluded that NAICS code
541513 accounted for 17% of the work. AR 1356.
On July 10, 2018, MDA posted its second round of questions and answers. AR
1367. Although ACEs submitted a question regarding the selection of NAICS code
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541715, MDA did not answer the question. AR 1369. As the below-quoted text of the
question makes clear, ACEs did not ask for an alternative NAICS code designation:
Although the Agency may perform RDT&E [research and development,
testing and evaluation] activities in the ARC facility, those activities appear
to be performed on other contract vehicles. The work to be performed on
the ARC contract, as described in the Agency’s draft PWS, is clearly to
operate and maintain an environment to support testing, not to perform the
actual test or analysis activities. The NAICS code for this procurement
currently is listed as 541715, which applies to “Research and Development
in the Physical, Engineering and Life Sciences (except Nanotechnology and
Biotechnology).” The currently selected NAICS code for the procurement
does not appear to be appropriate for this procurement for several reasons.
Please describe the Agency’s rational for NAICs selection as it relates to
each of the following:
-Reference: Draft RFP Sec. K. According to the PWS, the principal purpose
of the contract is not to conduct research and development but to “support
the management of the Special Purpose Processing Node, Unclassified
Networks, and other Government Furnished Equipment compromising the
ARC, providing the infrastructure necessary to support Hardware-in-theLoop Ground Test and tenant/stakeholder activities as part of the SPPN.”
-Reference: Draft RFP Sec. K. GAO decided recently in ASM Research, B412187 (Jan. 7, 2016) a firm maintaining a test environment is precluded
from conducting testing in that environment because it presents an
organizational conflict of interest. Because the contractor will be precluded
from performing any research and development in the ARC, the NAICS
code designated on the RFP is inapplicable.
-Reference: Draft RFP Sec. K. The NAICS code for this procurement
currently is listed as 541715, which applies to “Research and [sic]
Id. While MDA listed the question, MDA never responded to ACEs’ question regarding
the selection of NAICS code 541715.
D. Final Solicitation and Amendments
On September 10, 2018, MDA posted the Final Solicitation. AR 1539. Four days
later, MDA posted the first amendment to the Solicitation. AR 2103. The final
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Solicitation was posted on October 17, 2018. AR 3265. The deadline for submissions was
October 25, 2018 at 16:00 central time, and offerors were required to “confirm their
delivery date and time with the Contracting Officer . . . by 16:00 central time, October
22, 2018.” AR 3221.
For purposes of this bid protest, the relevant information in the Solicitation
pertaining to the NAICS code selected and the past performance evaluation criteria are
described separately.
1. Described Work in the PWS
The Solicitation includes a PWS that showed what type of work would be required
and under which CLIN the work was categorized. AR 3250-3371. In total, there are six
CLIN categories. The court draws from OHA’s thorough descriptions of these CLIN
categories.
CLIN 001 is titled Contract and ARC Management. Under CLIN 001, the
contractor shall manage and maintain cost, schedule, performance, risk, subcontracts,
vendors, test assets and associated maintenance agreements, infrastructure, and data to
sustain ARC operations. AR 3880 (citing PWS § 3.1(a)). The contractor shall maintain a
Program Management Plan that details the complete structure of contractor support, shall
participate in facility expansion or modification planning meetings to ensure coordination
with ARC long-range planning, testing activities, security requirements, and MDA
guidance. Id. (PWS § 3.1(a), (e)). The contractor shall monitor all ARC networks for
proper operation, throughput, quality of service, security compliance, and that
cybersecurity policies and guidelines are followed in all aspects of network operations
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and system administration. Id. (PWS § 3.2). The contractor shall develop a maintenance
plan for ARC test assets and obtain/maintain software licensing, and shall evaluate, test,
and integrate all software into the ARC networks. Id. (PWS § 3.3(a), (c)). The contractor
shall manage and operate a shipping and receiving department/property office to inspect
and verify deliveries, maintain property control records, and perform a quarterly
inventory audit. Id. (citing PWS § 3.3(e)). CLIN 001 accounts for 15 percent of the
estimated work. AR 1351.
CLIN 002 is titled Network Management. Under CLIN 002, the contractor shall
maintain the schedule of all ARC activities/projects and a fully resource loaded
Integrated Master Schedule (“IMS”), conduct weekly IMS review meetings, facilitate
asset allocation, de-confliction, configuration management and test event certification,
and provide utilization and integration metrics. AR 3880-81 (citing PWS § 4.1). Also, the
contractor shall integrate ARC test asset schedules with the ARC Master Schedule, and
resolve conflicts between test asset requests, infrastructure needs, and facility
maintenance. AR 3881 (citing PWS § 4.1). The contractor shall maintain ARC
configuration files off-site, develop and execute documentation and procedures for IT
Contingency and Disaster Recovery (“DR”), and conduct quarterly DR tests. Id. (citing
PWS § 4.2).
The contractor shall establish and maintain a centralized helpdesk and log of all
incidents and requests; establish incident management procedures for all facility,
software, hardware, and communications problems; and provide support services for
briefings and demonstrations. Id. (citing PWS § 4.3). Also, the contractor shall develop,
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implement, and maintain a Configuration Management Plan, maintain test asset data, and
operate software systems that record, reserve, and schedule ARC test assets. Id. (citing
PWS § 4.4). Regarding Special Purpose Processing Node (“SPPN”) Management, the
contractor shall plan, implement, and operate the ARC and provide utilization metrics on
all ARC test assets. Id. (citing PWS § 4.5(a), (e)). The contractor shall develop and
implement solutions to profile traffic flow to predict problems. Id. (citing PWS § 4.5(f)).
Also, the contractor shall evaluate new hardware and software technologies for ARC
networks, provide strategic planning, and recommend approaches in designing system
and network configurations, software/script development, power usage, and Reliability,
Availability and Maintainability engineering support in the development of new ARC
systems. Id. (citing PWS § 4.5(g)).
The contractor shall provide network analysis and communications engineering
support for telecommunications and network systems, including the ARC side of remote
nodes and ARC based customers. Id. (citing PWS § 4.5(h)). The contractor shall support
Communications Security (“COMSEC”) maintenance and engineering activities for
BMDS test and evaluation networks. Id. (citing PWS § 4.5(i)). The contractor shall
collaborate to plan, document, and execute network communication interfaces between
ARC network infrastructure and other network infrastructures. Id. (citing PWS § 4.5(j)).
The contractor shall manage IT infrastructure and networks comprised of
commercial and tactical systems to include asset allocation and de-confliction,
configuration management, and Integrated Master Schedule development, management,
and execution. Id. (citing PWS § 4.5(k)). The contractor shall manage network bandwidth
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allocation, and metrics monitoring utilization and downtime for all Laboratories, HWIL,
and formal ground test activities. Id. (citing PWS § 4.5(l)). The contractor shall develop
network diagrams for all ARC networks / enclaves, and perform OEM-recommended
preventive maintenance. Id. (citing PWS § 4.5(m), (n)). Also, the contractor shall develop
a Technology Refresh plan for the IT Infrastructure, taking into account synergies
derived from the CI/CAT, Combined Test Center design, and BMDS expansion
activities. Id. (citing PWS § 4.6). CLIN 002 accounts for 17% of the assigned work. AR
1351.
CLIN 003 is titled Cybersecurity. The ARC handles Restricted Data and Critical
Nuclear Weapon Design Information on a daily basis when executing the requirements of
this contract. AR 3881. The contractor shall control access to information systems within
the ARC, and shall create, maintain and manage all BMDS test and evaluation assets and
infrastructure user accounts. Id. (citing PWS § 5.0). The contractor shall implement a
cybersecurity program for all classified and unclassified networks and will support a
broad-based capability of general cybersecurity services protection for the MDA ARC
test labs and assets such as hardware/software products, computer systems and
subsystems, and network and communications resources. AR 3881-82. (citing PWS
§ 5.01(a), (b)). Also, the contractor shall continually monitor all external/ internal traffic
and report monthly the health, status, and utilization of the network(s). AR 3882. (citing
PWS § 5.0(c)).
The contractor shall monitor and comply with all instructions for Security
Technical Implementation Guides (STIGs). Id. (citing PWS § 5.1(a)). In addition, the
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contractor shall respond promptly and comply with MDA Cyber Tasking Orders (CTOs).
Id. (citing PWS § 5.1(a)). Weekly, the contractor shall perform a system wide analysis on
all IT systems and infrastructure to identify vulnerabilities and implement risk mitigation
recommendations. Id. (citing PWS § 5.1(b)). The Contractor shall safeguard and protect
Controlled Unclassified Information (“CUI”); develop and institute a training program
for ARC Contractor personnel, and monitor training and certification status of all
cybersecurity personnel. Id. (citing PWS § 5.1(e)).
Further, the contractor shall develop and maintain security accreditation packages
for ARC Network and Infrastructure hardware, software and networks; support activities
required to maintain MDA system/enclave cybersecurity approvals; and also support
BMDS Element Accreditation activities. Id. (citing PWS § 5.1(f)). Also, the contractor
shall develop Risk Management Framework (“RMF”) packages and artifacts for
classified and unclassified networks, and shall develop, update, and execute the Concept
of Operations to include Cybersecurity, Information Assurance, and RMF. Id. (citing
PWS § 5.1(h), (i)).
Under Security Management, the contractor shall continually demonstrate that it is
capable of protecting critical unclassified and classified information, and provide
personnel to support Government security personnel. Id. (citing PWS § 5.2(a)). The
contractor shall assist in the development and implementation of all day-to-day security
procedures including information security, physical security, COMSEC, and Operations
Security (OPSEC). Id. (citing PWS § 5.2(b)).

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The contractor shall closely monitor changes to STIGs covering security
requirements, identify requirements not being met, and assist the government in
developing new processes and procedures as a result of updated or changed Accreditation
Authority guidance. Id. (citing PWS § 5.2(c)). Also, the contractor shall implement
modified processes and procedures to protect BMDS data and information at all times. Id.
(citing PWS § 5.2(c)).
The contractor shall assist the Government to develop and incorporate OPSEC
guidance in day-to-day activities to mitigate security and program risks associated with
the collection and analysis of MDA information by adversaries, and actions against the
MDA mission and its personnel. Id. (citing PWS § 5.2(e)). The contractor shall
implement MDA policies and procedure to maintain compliance with all applicable
COMSEC guidance. Id. (citing PWS § 5.2(f)). The contractor shall design or procure,
incorporate and operate security resources required to support the security requirements
of ARC’s programs, projects and assets. Id. (citing PWS § 5.2(g)).
The contractor shall implement practices to restrict unnecessary sharing and/or
flow of CUI down the entire supply chain based on need-to-know. Id. (citing PWS
§ 5.3(b)). The contractor shall develop an Information Management and Control Plan
(“IMCP”) that shall identify practices to restrict the unnecessary sharing and/or flow of
CUI, address procedures for reporting a cyber-incident, and document the process by
which System Security Plans and Plan of Action and Milestones are developed and
maintained to protect CUI within the contractor’s/subcontractor’s unclassified IT

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systems. AR 3882-83. (citing PWS § 5.3(c)). CLIN 3 accounts for 14% of the work. AR
1351.
CLIN 004 is titled Test Support. The contractor shall facilitate test asset hardware
and software upgrades, design and implementation. AR 3883. (citing PWS § 6.1(a)). The
contractor shall develop and implement a configuration control process by which
lockdown is implemented prior to a test event and rescinded after completion. Id. (citing
PWS § 6.1(b)). The contractor shall provide infrastructure, network design and
configuration design to meet test event and training requirements and issue resolution in
support of Test, Integration Management, Test Execution Center (TEC) management, and
Advance Training Operational Center training exercises. Id. (citing PWS § 6.1(c)). The
contractor shall perform technical analysis to support design, development, integration,
execution, and analysis of experiments, test, and exercises, and demonstrations of
distributive software technology, real-time algorithms, and information assurance. Id.
(citing PWS § 6.1(d)). The contractor shall develop an automated system for test set-up
and related configuration control. Id. (citing PWS § 6.2). The contractor shall support the
test event certification process and ensure formal certification is received prior to test
execution. The contractor shall develop Certification Data Packages of ARC assets to
support formal ground tests. Id. (citing PWS § 6.3).
The contractor shall support BMDS Integration and Development testing in the
TECs and ARC test assets; this includes risk reduction, software checkout, keep alive
runs, and other non-IMTP events. Id. (citing PWS § 6.4(a)). The contractor shall provide
video projection engineering and support for test execution and operator control rooms
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requiring situational awareness and visualization during IMTP testing or BMDS test and
execution element checkouts. Id. (citing PWS § 6.4(a)). The contractor shall configure
Test Support System equipment to allow routing of situational awareness screens to the
TECs. Id. (citing PWS § 6.4(b)). The contractor shall provide personnel to integrate
Ground Based Midcourse (GM) defense and Sensor (SN) assets, act as test “conductor”,
and provide statistics on integration runs for GM and SN assets. Id. (citing PWS
§ 6.4(c)).
The contractor shall collect data for MDA test events, provide storage, and
coordinate data collection. Id. (citing PWS § 6.5). The contractor shall design, develop
and execute network scripts or other software for data collection, storage, and eventual
dissemination of test data to the Missile Defense Data Center. Id. (citing PWS § 6.5).
CLIN 004 accounts for 12% of the work. AR 1351.
CLIN 005 is titled Task Instructions – Real World Events. Performance under this
Task Instruction (TI) Contract CLIN will be in support of activities for “real world”
events such as analysis assigned to elements from external agencies to include Warfighter
Request for Analysis/Requests for Real World Events/Urgent Unknowns. The contractor
shall support any real world event identified by the Government and perform by
reprioritizing work and adjusting work schedules to ensure mission success. AR 3883
(citing PWS § 7.0).
CLIN 006 is titled Network Design. Performance under this CLIN includes
research and development engineering activities. AR 3884. (citing PWS § 8.0). The
contractor shall develop network scripts and new software tools. Software development
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includes designing, developing and implementing solutions to support CI/CAT through
Rapid Reconfiguration of System Test Architectures; automated health and status tools
compatible with the HWIL GT environment; and Independent Verification & Validation
(IV&V) processes, systems, software or hardware to support the acceptance and
integration of new BMDS elements into the ARC infrastructure. Id. (citing PWS
§ 8.1(a)). New elements could include additional HWIL assets, or new BMDS
representation/HWIL assets such as new sensors, interceptors, and systems such as
Patriot and Integrated Air and Missile Defense (IAMD). Id. (citing PWS § 8.1(a)).
The contractor shall design, develop and prepare an Analysis of Alternatives
(“AoA”) for Hardware and Software solutions for rapid reconfiguration to support
improvements in system reconfiguration and Configuration Management necessary to
support Agile Testing (Continuous Integration/Continuous Agile Testing). Id. (citing
PWS § 8.2(a)). The contractor shall re-design network architecture to support increased
data transmission for CI/CAT. Id. (citing PWS § 8.2(b)). The contractor shall design,
develop and prepare an AoA to implement automated Health and Status and
Configuration Control to tactical HWIL systems. Id. (citing PWS § 8.3). The contractor
shall design, develop and prepare an IV&V suite of tools to support integration and
acceptance of new BMDS assets delivered to the ARC. Id. (citing PWS § 8.4).
Under Network Design, the contractor shall design and implement a network
engineering, management, and monitoring capability that encompasses all unclassified
and classified networks in the ARC. Id. (citing PWS § 8.5(a)). The contractor shall
design, develop and implement network designs in support of HWIL, test lab emulation,
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and cybersecurity. Id. (citing PWS § 8.5(b)). Network Design activities also include
expansion and/or changes to existing network designs to: incorporate hardware and
software solutions to integrate additional BMDS systems into the ARC infrastructure;
incorporate new BMDS systems such as LRDR and HDR into BMDS representation;
update the BMDS Independent and Development Lab (“BID Lab”) Architecture for
inclusion of CI/CAT-related CDI; incorporate into the ARC architecture new BMDS
design solutions to support Hypersonic Glide Vehicle, UAV platform, and Advance
Tactical Aircraft; design and develop system architecture re-designs to support the
Combined Test Center (CTC); and design and update the HWIL architecture to include
existing BMDS assets such as IAMD and Patriot. Id. (citing PWS § 8.5(b)). As discussed
above, CLIN 006 accounts for 41% of the contract work. AR 3884.
2. Past Performance Evaluation
The past performance evaluation criteria in the third amended Solicitation are the
same as those found in the April DRFP. The Solicitation provides that MDA will
evaluate past performance for recency, relevancy, and quality. AR 3259-60. The
relevancy assessment will measure “the extent of similarity between the service/support
effort, complexity, dollar value, contract type, and subcontract/teaming” and the “scope
and magnitude of effort and complexities this solicitation requires.” AR 3260. After this
review, the offeror’s past performance will be rated either “acceptable” or
“unacceptable.” AR 3256, 3259. Acceptable is defined as “[b]ased on the offeror’s
performance record, the Government has a reasonable expectation that the offeror will
successfully perform the required effort, or the offeror’s performance record is
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unknown.” AR 3256. Unacceptable is defined as “[b]ased on the offeror’s performance
record, the Government has no reasonable expectation that the offeror will successfully
perform the required effort.” Id. Additionally, the Solicitation included a note that said
“[i]n the case of an offeror without a record of relevant past performance or for whom
information on past performance is not available or so sparse that no meaningful past
performance rating can be reasonably assigned, the offeror may not be evaluated
favorably or unfavorably on past performance (see FAR 15.305 (a)(2)(iv)[.]” Id. The
Solicitation states that offerors with “unknown past performance,” in the context of
Acceptability / Unacceptability, “shall be considered ‘Acceptable.’” Id.
Past performance was Factor 3 in the final Solicitation’s list of evaluation factors.
AR 3255. Furthermore, the final Solicitation stated, as it had in the April DRFP, that the
“selection decision will document tradeoffs between Factors 4, 5, and 6 in the
competitive range [for those offerors receiving] receiving an acceptable rating for Factors
1-3.” Id. Thus, past performance was not a tradeoff criteria.
E. ACEs’ Protest Before OHA
ACEs filed a protest on September 11, 2018 before the SBA’s Office of Hearings
and Appeals (OHA) contesting MDA’s selection of NAICS code 541715. AR 3828. On
September 12, 2018, OHA issued an order in response to ACEs’ protest. AR 3838.4 In
that order, OHA asked the Contracting Officer (“CO”) to “[n]otify OHA of any

The facts surrounding OHA’s procedure are relevant here because ACEs alleges that this court
should set OHA’s decision aside and remand the case back to OHA because OHA violated its
own procedures by considering an amendment to the Solicitation made after the close of record
date.
4

19

additional amendments to the solicitation, any contract award, or any other litigation
affecting this procurement, while this appeal is pending.” AR 3839. OHA closed the
record on September 27, 2018, AR 3840, and thereafter on October 28, 2018, issued its
decision upholding the MDA’s selection of NAICS code 541715. AR 3847. OHA relied
on a version of the Solicitation amended on October 16, 2018 in its analysis. AR 3879.
The changes to the Solicitation were:
1. “Urgent, Non-Test, Network down reporting: 4 hours” was removed from Section

4.3.1(e)(2).
2. Section 5.2, subsections (a)-(d), of the original PWS were replaced with Section

5.2, subsections (a)-(g), in the revised (Rev 01) PWS.
3. Section 5.2, subsections (e), (f), and (g), of the original PWS were moved to

Section 5.0, subsections (a), (b), and (c), of the Rev 01 PWS.
4. In Section 5.3(d)(6), “1000 business days” was changed to “45 business days.”
5. In Section 5.3(f), the citation “sections 3a-e” was changed to “sections 5.3(c)1-5.”
6. In Sections 9 and 11, a parenthesis was added in the header to reflect the CLIN

numbers.
7. Section 12.0(c) and the “Staffing Requirements” table were updated to number the

key personnel for clarity.
The October 16, 2018 changed none of the substance in Section I.D.1 above. Out
of the above changes, OHA only relied on Section five where subsections were moved
around. The following is an outline of the relevant portions of OHA’s decision.
1. Description of ACEs’ Arguments
20

OHA explained that ACEs “contends that NAICS code 541715 is inappropriate
for this RFP because this is not a research and development procurement” and that ACEs
“urges OHA to conclude NAICS code 541513, Computer Facilities Management
Services, with a $27.5 million annual receipts size standard, is the appropriate NAICS
code” for the Solicitation. AR 3885. OHA further stated that ACEs argued “that contracts
to support or assist a research organization cannot be automatically deemed to be
research and development procurements.” Id. ACEs cited several previous OHA
decisions to show that OHA rejects using NAICS code 541715 for contracts that support
for agency research and development. Id. (citing Size Appeal of Professional Project
Services, Inc., SBA No. SIZ-5411 (2012); NAICS Appeal of Bevilacqua Research Corp.,
SBA No. NAICS-5243 (2011); NAICS Appeal of Information Ventures, Inc., SBA No.
NAICS-4953 (2008)).
In particular, ACEs argued that CLIN 006, which “is the single largest CLIN,
making up 41% of the Full Time Equivalents (FTE) for the instant procurement,”
includes required tasks which “are not research and development, but design and
implementation of hardware and software solutions that support MDA.” Id. Therefore,
OHA explained, ACEs argued that because both research and development were required
for MDA to assign NAICS code 541715, MDA’s decision was clearly erroneous. Id.
(citing NAICS Appeal of Dayton T. Brown, Inc., SBA No. NAICS-5164, 2010 WL
9012920 (2010)).
2. Relevant Definitions

21

OHA laid out the definitions of NAICS Code 541715, 541513, and the general
definition of research from the NAICS Manual. OHA stated that NAICS code 541715
covers: “establishments primarily engaged in conducting research and experimental
development (except nanotechnology and biotechnology research and experimental
development) in the physical, engineering, and life sciences, such as agriculture,
electronics, environmental, biology, botany, computers, chemistry, food, fisheries,
forests, geology, health, mathematics, medicine, oceanography, pharmacy, physics,
veterinary and other allied subjects.” AR 3888-89. OHA explained that research is
defined as “original investigation undertaken on a systematic basis to gain new
knowledge”, and “experimental development” as “the application of research findings or
other scientific knowledge for the creation of new or significantly improved products or
processes[.]” AR 3889. OHA explained that NAICS code 541513 includes
“establishments primarily engaged in providing on-site management and operation of
clients’ computer systems and/or data processing facilities. Establishments providing
computer systems or data processing facilities support services are included in this
industry.” Id.
Additionally, OHA considered the footnotes to NAICS code 541715. OHA
explained that Footnote 11(a) for NAICS code 541715 states that research and
development “means laboratory or other physical research and development. It does not
include economic, educational, engineering, operations, systems, or other nonphysical
research; or computer programming, data processing, commercial and/or medical
laboratory testing.” Id. And OHA then said that Footnote 11(d) states that research and
22

development “for guided missiles and space vehicles includes evaluations and simulation,
and other services requiring thorough knowledge of complete missiles and spacecraft.”
Id.

3. OHA’s Analysis
OHA began by acknowledging that “OHA has long held that procurements
classified under a research and development NAICS code ‘must be for research and
development, and thus must look to creating new processes or products.’” AR 3890
(citing NAICS Appeal of Dayton T. Brown, Inc., SBA No. NAICS-5164, 2010 WL
9012920, at *5 (Nov. 8, 2010)). OHA then went on to explain that a special rule applies
with regard to guided missiles and space vehicles, stating that in “Footnote 11(d), the
regulation provides that research and development for guided missiles and space vehicles
includes ‘evaluations and simulations, and other services requiring thorough knowledge
of missiles and spacecraft.’” Id. Based on this provision, OHA explained that a research
and development procurement involving missiles and spacecraft “is therefore not as strict
as it is in other disciplines.” Id. (referencing NAICS Appeal of Millennium Eng’g and
Integration Co., SBA No. NAICS-5309, 2011 WL 6183624, at *11-12 (Dec. 12, 2011)).
OHA concluded that “an RFP which requires evaluations and simulations involving
missiles and similar devices, as well as a thorough knowledge of these technologies, may
be designated under the NAICS 541715, under the Guided Missiles and Space Vehicles

23

exception.” Id. (citing NAICS Appeal of DCS Corp., SBA No. NAICS-5703, 2016 WL
270949, at *4 (Jan. 6, 2016)).
Tested by these standards, OHA explained that “this RFP explicitly requires
services involving evaluations and simulation of missiles, requiring a thorough
knowledge of missiles, and thus fits into the description of the NAICS exception in
Footnote 11(d).” AR 3891. In this connection, OHA stated that “BMDS is an
extraordinarily complicated and sophisticated undertaking, compared to ‘hitting a bullet
with a bullet.’ The lab assets include the hardware and software necessary for guided
missiles and space vehicles. This contract will expand these systems to include new
sensors and tactical systems ARC designs, and development to integrate new programs
into BMDS.” AR 3890. OHA further stated that the “contractor will be servicing the
necessary modeling and simulation equipment.” AR 3890-91. OHA concluded that
because a thorough knowledge of BMDS is required to perform this contract, the
Solicitation “explicitly requires services involving evaluations and simulation of missiles,
requiring a thorough knowledge of missiles, and thus fits into the description of the
NAICS exception in Footnote 11(d).” AR 3891.
Then, OHA discussed the work OHA relied on to conclude that the Solicitation
required evaluations, simulations, and other services requiring a thorough knowledge of
missiles. First, and foremost, OHA concluded that CLIN 006 on network design, called
for research and development. AR 3891. OHA stated that the “contractor is required to
develop new tools and processes to respond to changes required by the results of testing”
and that the “contractor will participate in the system design activities to implement
24

improvements to CI/CAT, asset management and all of MDA’s data flow.” Id. OHA
specifically concluded that under CLIN 006, the “contractor’s work will include original
investigation, or research, to obtain necessary knowledge to develop the AoA for
hardware and software solutions necessary to support the CI/CAT.” Id. OHA stated that
CLIN 006 “represents the largest portion of this contract” because it represents 41% of
the work and “includes research and development of the software which will be an
integral part of the essential simulations to support the BMDS.” Id. Therefore, OHA
concluded, “the CO was correct in characterizing this CLIN as research and
development.” Id.
OHA further noted that CLIN 004 expressly calls for research and development.
AR 3891. OHA stated that under CLIN 004 the contractor is required “to collect data for
MDA test events” and “[t]his constitutes original investigation, or research, and is
necessary for the support of MDA.” Id. With regard to Footnote 11(d), OHA stated that
“[t]he contractor must further use this research to develop software and systems to
support the tests and simulations for BMDS.” Id.
Finally, OHA relied on CLIN 003 regarding cybersecurity, stating that CLIN 003,
“supports a research and development designation.” Id. OHA explained that CLIN 003
requires the contractor “to implement a cybersecurity program for all the networks” and
“develop new processes and procedures” to address the cybersecurity requirements. Id.
OHA further stated that “once investigated and created, new cyber tools, standards,
processes and method must be continually refined, tested and improved.” Id. OHA cited a
previous OHA decision where OHA “found that a procurement for cyber warfighting
25

capabilities was properly designated as a Research and Development procurement,
because the new cyber tools must be created in the first instance, even if the procurement
did not specifically call for laboratory research.” Id. (citing NAICS Appeal of Tech. Sec.
Assoc., Inc., SBA No. NAICS-5950, 2018 WL 6113389, at *12 (Aug. 13. 2018)).
Overall, OHA concluded that “this RFP requires the contractor to engage in original
investigation, or research to obtain the necessary knowledge to develop the software and
hardware to support the testing and simulation of the BMDS program, and it requires the
contractor to have a thorough knowledge of the program to perform the procurement.”
AR 3891.
Having concluded that ACEs had not established that NAICS code 541715 was
clearly erroneous for this RFP, OHA stated that “it is unnecessary to consider the NAICS
code [ACEs] advocates.” AR 3892. OHA explained that “OHA will not assign a different
NAICS code to a procurement unless the CO’s NAICS code classification is shown to be
clearly erroneous.” Id. (citing NAICS Appeal of Tech. Sec. Assoc., Inc. SBA No. NAICS5950, at *14 (2018)).
II.

PROCEDURAL HISTORY
On October 24, 2018, the day before proposals were due on the Solicitation, ACEs

submitted a complaint in this court requesting a temporary restraining order, preliminary
injunction, permanent injunction, and declaratory judgment with regard to both the
Solicitation’s designation of NAICS code 541715 and the Solicitation’s evaluation
criteria for past performance. Compl. ¶ 1 (ECF No. 1). ACEs also filed motions for a
temporary restraining order and permanent injunction that same day. (ECF Nos. 2,3).
26

Later that day, OHA released its decision affirming MDA’s designation of NAICS code
541715 for this Solicitation. AR 3878. ACEs did not submit a proposal.
The following day, October 25, 2018, this court denied ACEs’ motion for a
temporary restraining order. (ECF No. 9). The court reasoned that “because proposals
have to be submitted in person on October 25, 2018, the court finds that the request for a
TRO filed one day before proposals were due is untimely and further that the issuance of
a TRO would greatly prejudice both the government and potential offerors that have
submitted or have committed to submit proposals on the due date set forth in the
solicitation.” Id.
On October 31, 2018, ACEs submitted an amended complaint challenging OHA’s
decision. Amend. Compl. (ECF No. 12). That same day, ACEs filed a renewed motion
for a preliminary and permanent injunction. Pl.’s Renewed Mot. (ECF No. 13). The
government filed the administrative record on November 5, 2018. (ECF No. 17). On
November 19, 2018, ACEs filed its motion for judgment on the administrative record and
on November 19, 2018, the government filed its cross-motion for judgment on the
administrative record. (ECF Nos. 20, 26). Briefing was completed on December 14,
2018. Oral argument was February 5, 2019. (ECF No. 36).
III.

SUBJECT MATTER JURISDICTION AND STANDING
Before turning to the merits of ACEs’ complaint, the court must first “‘satisfy

itself that it has jurisdiction to hear and decide a case.’” Hardie v. United States, 367 F.3d
1288, 1290 (Fed. Cir. 2004) (quoting PIN/NIP, Inc. v. Platte Chem. Co., 304 F.3d 1235,
1241 (Fed. Cir. 2002)); see Remote Diagnostic Techs., LLC v. United States, 133 Fed. Cl.
27

198, 202 (2017) (citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998))
(“Jurisdiction is a threshold matter that must be resolved before the Court can take action
on the merits.”)). The court has jurisdiction under 28 U.S.C. § 1491(b)(1) to “render
judgment on an action by an interested party objecting to . . . any alleged violation of
statute or regulation in connection with a procurement or proposed procurement.”
Because standing is a jurisdictional question, the court must also “determine
whether [the] plaintiff has standing before it can proceed to a decision on the merits.”
Remote Diagnostic Techs., LLC, 133 Fed. Cl. at 202. The protestor, as the party invoking
this court’s jurisdiction, “bears the burden of establishing [standing], and must ultimately
do so by a preponderance of the evidence.” RMGS, Inc. v. United States, 140 Fed. Cl.
728, 737 (2018) (citing Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748
(Fed. Cir. 1988) and Rocovich v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991)). “[A]
plaintiff must demonstrate standing for each claim he seeks to press[.]” Davis v. Federal
Election Com’n, 554 U.S. 724, 734 (2008) (quoting Daimler Chrysler Corp. v. Cuno, 547
U.S. 332, 352 (2006)).
Importantly, standing under Section 1491(b)(1) “imposes more stringent standing
requirements than Article III.” Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359
(Fed. Cir. 2009) (citation omitted). “To demonstrate standing under 28 U.S.C.
§ 1491(b)(1), a plaintiff must show that it is an ‘interested party’ who suffered prejudice
from a significant procurement error.” Thomas-Sea Marine Constructors, LLC v. United
States, 141 Fed. Cl. 185, 209 (2018) (citing CliniComp Int’l, Inc. v. United States, 904
F.3d 1353, 1358 (Fed. Cir. 2018)). In order to be an interested party, the protestor must
28

first show that it was an “actual or prospective bidder.” Digitalis Educ. Sols, Inc. v.
United States, 664 F.3d 1380, 1384 (Fed. Cir. 2012).5 Second, the protestor must show
that it has a “direct economic interest” in the contract. Id. Where a “prospective bidder
challenges the terms of the solicitation itself . . . the protestor can establish standing by
demonstrating that it suffered a ‘non-trivial competitive injury which can be redressed by
judicial relief.’” Orion Tech., Inc. v. United States, 704 F.3d 1344, 1348 (Fed. Cir. 2013)
(quoting Weeks Marine, Inc., 575 F.3d at 1361-62). The Federal Circuit has recently held
that “to suffer a non-trivial competitive injury, [the protestor] must at least be qualified to
compete for the contract it seeks.” CliniComp, Int’l, Inc. v. United States, 904 F.3d 1353,
1360 (Fed. Cir. 2018).6
Here, the government argues in its cross-motion for judgment on the
administrative record that this protest must be dismissed because ACEs has not shown

5

Where the protestor has failed to submit a proposal by the deadline, the protestor can still
become a “prospective bidder” if the protestor submits a timely protest and is “expecting to
submit an offer prior to the closing date of the solicitation.” Rex Serv. Corp. v. United States, 448
F.3d 1305, 1308 (Fed. Cir. 2008) (quoting MCI Telecommunications Corp. v. United States, 978
F.2d 362, 365 (Fed. Cir. 1989). “[T]he opportunity to become a prospective bidder ends when
the proposal period ends.” Digitalis Educ. Sols., Inc., 664 F.3d at 1385 (citation omitted).
Additionally, the Federal Circuit has clarified that in addition to filing a timely protest, the
protestor may only be considered a “prospective bidder” if it continues “to pursue its right in a
diligent fashion.” CGI Fed. Inc. v. United States, 779 F.3d 1346, 1350-51 (Fed. Cir. 2015).
Standing also requires a protestor to show that it “was prejudiced by a significant error in the
procurement process.” CliniComp Int’l, Inc., 904 F.3d at 1358. “Although the inquiries may be
similar, prejudice must be shown either as part of, or in addition to, showing a direct economic
interest.” Id. Just as a protestor must demonstrate that it is an interested party, so too must the
protestor establish standing before the court can address the merits. Info. Tech. & Applications
Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003) (“In fact, because the question of
prejudice goes directly to the question of standing, the prejudice issue must be reached before
addressing the merits.”).
6

29

that it has standing to bring this protest. According to the government ACEs has not
demonstrated that it is qualified to compete for this procurement and it therefore does not
have a direct economic interest in the subject procurement. Def.’s MJAR at 6-13. In
support of its standing argument, the government relies on the allegations in ACEs’
complaint, which the government argues are not sufficient to meet the minimum
requirements for award. In particular, the government argues that nowhere in its
complaint does ACEs allege that it has the network design capability described and
necessary to perform CLIN 006 or the cybersecurity background needed. In addition, the
government argues that the size of the contract to be awarded under the subject
Solicitation, which exceeds $300 million, is much greater than any contract ACEs has
ever received. Relying on uncontested data from the USASpending.gov, a webpage
which tracks contract awards, spending, and evaluations under those contracts, it appears
that within the last five years, ACEs has been awarded government contracts with a total
potential value of $20.1 million. Def.’s MJAR at Appx 10; Appx 12-116. ACEs’ largest
government contract award was for a one-year contract in 2010 for $13.8 million. Id. at
Appx 11-12. ACEs’ government contracts have mainly involved training and instruction,
customer service support, and other support services. Def.’s MJAR at Appx 13, 20, 27,
34, 41, 48, 55, 69, 76, 83. None of ACEs prior contracts were assigned NAICS code
541715.
ACEs does not dispute the government’s factual assertions regarding standing but
argues that it is nonetheless a qualified bidder. First, ACEs argues that the government
did not challenge ACEs’ qualifications before OHA and has thus conceded it is qualified.
30

Pl.’s Resp. at 3 (citing AR 3857). Second, ACEs contends that to the extent it does not
have in-house capabilities to meet the requirements of the Solicitation, ACEs can
accomplish certain requirements, including, cybersecurity requirements with off-the-shelf
products, Pl.’s MJAR at 40, and can meet any of the CLIN 006 requirements by hiring
subcontractors. Pl.’s Resp. at 4 (ECF No. 28). ACEs argues that with the off-the-shelf
products and subcontractors it can satisfy the capabilities identified by MDA, namely it
can assume of “all Research, Test and Evaluation, and Operation and Maintenance
Functions,” including “in-progress tests, experiments, exercises, war-games and other
customer programs as well as upgrade and modernization tasks involving facility,
hardware, and software efforts.” AR 1-2.
The Federal Circuit in CliniComp Int’l, Inc. held that to demonstrate standing a
prospective contractor must be able to “demonstrate an ability to perform specific
requirements that are set forth in the administrative record.” 904 F.3d at 1360. In that
case involving a challenge to the government’s decision to negotiate a sole source
contract, the Federal Circuit examined whether CliniComp would be capable of
performing the work in the challenged contract. After reviewing the complaint and
evidence presented, the Federal Circuit measured CliniComp’s alleged qualifications
against the Determination and Findings which authorized the federal agency “to negotiate
a sole-source contract” with a particular company. Id. at 1356. The Federal Circuit
concluded that CliniComp’s alleged qualifications were not sufficient to meet the
government’s stated contract needs and thus CliniComp would not qualify for the
contract had it been open for competition. Id. at 1360. Specifically, in CliniComp Int’l
31

Inc., the contract required outpatient services and the Circuit found that CliniComp had
not demonstrated its ability to perform outpatient services and thus by itself would not be
qualified. The Circuit also found that CliniComp could not satisfy the contract’s
requirements by alleging that it could partner with another contractor. The Circuit
explained that vague allegations regarding the ability to hire out services that it could not
perform were not sufficient to prove that the protestor was qualified. Id. at 1360-61. For
all of these reasons, the Circuit agreed with the trial court that the protestor was not
qualified to perform the necessary work and thus affirmed the dismissal for lack of
standing. Id.
Tested by the CliniComp standards, the court finds that ACEs has not shown that
it could satisfy the specific requirements in the Solicitation and that its suggestion that it
could hire subcontractors to perform work is insufficient to establish standing.
Here, the Solicitation explicitly calls for the contractor to perform network design.
Specifically, the Solicitation states:
The contractor shall re-design network architecture to support increased
data transmission for CI/CAT. . . .
The contractor shall design and implement a network engineering,
management, and monitoring capability that encompasses all unclassified
and classified networks within the ARC. . . .
The contractor shall design, develop and implement network designs in
support of HWIL, test lab emulation and cybersecurity. These network
design activities will include expansion and/or changes to existing network
designs.
These network design activities will include expansion and/or changes to
existing network designs to . . . [i]ncorporate new BMDS systems such as
LRDR and HDR into the complex BMDS representation at the ARC.
32

AR 3367. Indeed, network design was subfactor 4 of the technical evaluation criteria. AR
3739.
ACEs’ complaint provides no information regarding its ability to perform network
design and ACEs had not provided any additional evidence to contradict the
government’s assertion that ACEs is not capable of creating new network designs.
Rather, ACEs originally argued that it would be able to “utilize commercial off-the-shelf
products” to meet the network design requirements. See Pl.’s MJAR at 40. ACEs
clarified during oral argument that its statement regarding off-the-shelf products applied
to cybersecurity requirements. Oral Argument 14:37:50-14:38:08. ACEs now argues that
it would partner with subcontractors to meet the work requirements set forth in CLIN
006.
Both arguments fail. First, to the extent ACEs still believes it could rely on offthe-shelf products for network design the argument is unsupported. The Solicitation
clearly requires the contractor to “design, develop and implement network designs”
which will respond to expansions of the “new BMDS systems.” AR 3367. These are
requirements for “new processes and tools to respond to changes . . . to include network
design and expansion.” See AR 3880. Therefore, off-the-shelf products cannot satisfy
requirements for new products unique to the ARC.
Second, ACEs claim that it could partner with subcontractors to meet CLIN 006
requirements, without more details, is not sufficient to establish that ACEs is qualified.
ACEs argues that it “routinely works with numerous other companies and could easily
33

form a qualified team.” Pl.’s Resp. at 4. ACEs does not identify any such partner, nor
does it provide any details as to how this could be done. As noted above, the Federal
Circuit rejected a nearly identical argument in CliniComp Int’l Inc. 904 F.3d at 1360. The
Federal Circuit found that argument “unpersuasive” because the protestor had “not
supplied any details regarding how, or with whom, it would subcontract to perform what
is required.” Id. The Federal Circuit stated that the protestor’s “vague, cursory references
to using subcontractors to perform the work it is unable to do are insufficient” to
demonstrate standing. Id. at 1360-61. Here, ACEs’ statement that it can and routinely
does form partnerships is just as vague as the protestor’s statement that it could
subcontract work in CliniComp, Int’l Inc. ACEs provides no details regarding how or
with whom it would work to create a qualified team. Therefore, the court concludes that
where a solicitation contains extensive work in network design and the protestor
concedes it does not have the necessary qualifications and provides no facts to support
how it will complete that work has failed to demonstrate by a preponderance of the
evidence that it is a qualified bidder with standing.
In addition to the foregoing issues with ACEs standing, the government also
argues that ACEs has not “demonstrated that it can perform a contract as large as the
ARC contract.” Def.’s MJAR at 8. This challenge to ACEs’ standing is again similar to
the standing challenge the protestor faced in CliniComp Int’l Inc. In that case, the
protestor “only had experience provid[ing] services at 100 facilities” and the contract
“would require comprehensive services . . . at 1,600 VA healthcare cites.” 904 F.3d at
1359. The Federal Circuit found the protestor’s inexperience with contracts the size of the
34

one at issue was another reason why the protestor was not qualified to compete. Id at
1360.
Here, the ARC contract is expected to reach $308 million in funding over the
course of five years, three one-year option periods, and one half-year option period. AR
3743. The contract is estimated to run from $38 to $42 million yearly. AR 204. ACEs
does not dispute the information from USASpending.gov, which shows that ACEs has
only been awarded contracts “with a total potential value of $20.1 million” and that its
largest contract has had a $13.8 million value. Def.’s MJAR at 9. In response, ACEs
argues, again, that it can handle a contract of the size at issue by partnering with other
organizations. As discussed above, ACEs’ argument, without more factual support, fails.
ACEs has not shown that it has the financial resources to perform the ARC contract.
Therefore, for this reason as well, ACEs does not have standing to bring its claims.7

7

The government further argues that ACEs is not qualified to compete because ACEs failed to
submit necessary information and obtain necessary information to compete for the contract.
Def.’s MJAR at 9. In particular, the government argues that by failing to meet the October 22,
2018 deadline to confirm submitting proposals, the October 25, 2018 deadline to submit a
proposal, and the May 17, 2018 deadline to submit the OCI review forms, ACEs failed to show it
was qualified to compete for the contract. AR 2563 (submission deadline), 2653 (deadline to
confirm submitting proposal); AR 1343 (OCI review form request). The government argues that
ACEs failed to obtain necessary information by not accessing information necessary to submit a
bid until October 2, 2018 and not participating in industry day tours. Def.’s MJAR at Appx2 ¶ 6.
The government cites no legal authority in making these arguments. The court does not find the
government’s arguments persuasive. To extent that ACEs intended to protest the NAICS code
designation and compete if the contract were resolicited, ACEs alleges it would submit the
required documents. Additionally, attendance at industry day was not required to compete in the
contract, AR 29, and the court cannot find that accessing necessary information to compete for
the contract later than other offerors made ACEs unqualified to compete. Similarly, the
government conceded in oral argument that submission of OCI information was not a
requirement to compete for the contract. Oral Arg. 14:01:00-14:03:00.

35

For all of these reasons, the court finds that ACEs has failed to establish that it is
qualified for an award of the subject contract and has thus failed to establish an economic
harm sufficient to establish standing.
IV. MERITS DISCUSSION
Although for the above-stated reasons the court finds that ACEs has failed to
establish standing, in the interest of judicial economy, the court will address the merits of
ACEs’ claims.8
A. OHA’s Decision Is Supported
ACEs argues that OHA’s decision to affirm MDA’s selection of NAICS code
541715 was arbitrary, capricious, an abuse of discretion, and not in accordance with the
law.9 First, ACEs argues that OHA abused its discretion by violating its procedures when
it considered a version of the Solicitation amended after OHA’s close of record date.
ACEs argues that OHA’s consideration of amendments made after the record was closed
violates 13 C.F.R. § 134.226 which states that the “record will constitute the exclusive

8

Assuming as discussed above that ACEs does have standing, this court does have jurisdiction
over ACEs’ appeal of the OHA decision and challenge to the terms of the Solicitation under 28
U.S.C. § 1491(b)(1). See Palladian Partners, Inc. v. United States, 783 F.3d 1243, 1254 (Fed.
Cir. 2015). The standards of review under Section 1491(b)(1) are well settled. The court must
determine whether the agency decision “lacked a rational basis” or “involved a violation of
regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi v. United States, 238
F.3d 1324, 1332 (Fed. Cir. 2001). With regard to alleged errors of law, a protestor must
demonstrate “a clear and prejudicial violation of applicable statutes or regulations.” Id. at 1333.
While ACEs attempts to challenge MDA’s NAICS code decision separate from the OHA
decision, the challenge has no merit. See Pl.’s MJAR at 21. OHA has the “exclusive jurisdiction
to review the [CO’s] determination of the appropriate NAICS code designation.” Ceres Envtl.
Servs., Inc. v. United States, 52 Fed. Cl. 23, 33 (2002) (citing 13 C.F.R. § 121.1102)). Because
OHA is the final decision maker, the NAICS code challenge is limited to OHA’s appeal.
9

36

basis for a decision,” and the decision should therefore be set aside. Second, ACEs argues
that OHA acted irrationally when affirming MDA’s NAICS code designation. ACEs
argues that NAICS code 541513 (“Computer Facilities Management Services”) with a
small-business size standard of $27.5 million was a more appropriate NAICS code for the
subject Solicitation. For the reasons discussed below, both of ACEs’ arguments are
without merit.
1. OHA’s Consideration of October Amendments to the Solicitation
ACEs claims that OHA “abused its discretion” by violating its regulatory
procedures when OHA considered the October 16, 2018 Solicitation amendments. Pl.’s
MJAR at 36-37. To support this argument, ACEs cites two regulations. First, ACEs cites
13 C.F.R. § 134.226 which states the “record will constitute the exclusive basis for a
decision.” Second, ACEs cites 13 C.F.R. § 134.225 which indicates that OHA “will set
the date upon which the pre-decisional record of the case will be closed, and after which
no additional evidence or argument will be accepted.” ACEs argues that in conjunction,
these two regulations prohibit OHA from considering amendments to the Solicitation
made after OHA sets the record to be closed.
The government responds that OHA did not violate the regulations, and that even
if OHA did violate the regulations, the violation amounted to a harmless error. First, the
government argues that ACEs misconstrues the regulations and that in NAICS appeals,
the record includes the Solicitation and all its amendments. See Def.’s MJAR at 30-31.
The government explains that the regulations ACEs relies on are contained in Subpart B,
while OHA appeals are “[t]he rules of practice set out in . . . Subpart C.” 13 C.F.R.
37

§ 134.301. Pursuant to Subpart C, Subpart B may apply “[e]xcept where inconsistent with
this subpart[.]” 13 C.F.R. § 134.313. Further, Subpart C indicates that “the contents of the
record also include the case file or solicitation submitted to OHA in accordance with
§ 134.306.” 13 C.F.R. § 134.315 (emphasis added). 13 C.F.R. § 134.306 requires the CO
to send OHA “an electronic link to or a paper copy of both the original solicitation
relating to that procurement and all amendments.” The case file itself is defined to
include “the solicitation and amendments.” Therefore, the government argues that where
OHA reviews a NAICS code appeal, the record also includes amendments to the
solicitation. Second, the government argues that even if OHA violated its own
procedures, the violation amounted to a harmless error because the relevant amendments
to the Solicitation were only stylistic. As discussed above, there were only seven changes
to the Solicitation:
1. “Urgent, Non-Test, Network down reporting: 4 hours” was removed from Section

4.3.1(e)(2).
2. Section 5.2, subsections (a)-(d), of the original PWS were replaced with Section

5.2, subsections (a)-(g), in the revised (Rev 01) PWS.
3. Section 5.2, subsections (e), (f), and (g), of the original PWS were moved to

Section 5.0, subsections (a), (b), and (c), of the Rev 01 PWS.
4. In Section 5.3(d)(6), “1000 business days” was changed to “45 business days.”
5. In Section 5.3(f), the citation “sections 3a-e” was changed to “sections 5.3(c)1-5.”
6. In Sections 9 and 11, a parenthesis was added in the header to reflect the CLIN

numbers.
38

7. Section 12.0(c) and the “Staffing Requirements” table were updated to number the

key personnel for clarity.
The court agrees with the government’s arguments. First, the court finds that
because Subpart C and not Subpart B governs the dispute, OHA did not violate its own
procedures by considering the October Solicitation amendments. Second, the court agrees
with the government that even if there were an error, it would be harmless. See Trans
Dig. Techs., LLC v. United States, 138 Fed. Cl. 34, 41 (2018) (“We also apply the rule of
harmless error, requiring protestors to show that they were in fact harmed by agency
actions alleged to be improper.”). At oral argument, when asked about how ACEs was
harmed, ACEs argued that the procedures are mandatory and any failure to follow the
regulations is grounds for reversal of OHA’s decision. Oral Arg. 14:31:10-14:31:50. This
is not the case. Where the government demonstrates that the relevant amendments to the
Solicitation were stylistic and not substantive and ACEs does not identify any alleged
harm from the inclusion of the last Solicitation amendment, the court finds that even if
there was a procedural error, that error was harmless and does not provide a basis for
setting aside OHA’s decision.
2. OHA’s Affirmance of NAICS Code 541715
ACEs claims that OHA’s decision finding no clear error in MDA’s selection of
NAICS code 541715 for this Solicitation was arbitrary, capricious, and an abuse of
discretion. Pl.’s Resp. at 14-20. First, ACEs argues that OHA’s conclusion that the
description of research and development under Footnote 11(d) was applicable to work
described in the Solicitation was arbitrary, capricious, and an abuse of discretion because
39

OHA’s conclusion was not supported by the record. Second, ACEs argues that because
Footnote 11(d) is inapplicable, this Solicitation does not otherwise qualify as research
and development under NAICS code 541715. The court begins by reviewing OHA’s
decision.
ACEs argued before OHA that NAICS code 541715 is inappropriate for this
Solicitation because “this is not a research and development procurement” and urged
“OHA to conclude NAICS code 541513, Computer Facilities Management Services, with
a $27.5 million annual receipts size standard, is the appropriate NAICS code” for the
Solicitation. AR 3885. ACEs’ principal argument was that “contracts to support or assist
a research organization cannot be automatically deemed to be research and development
procurements.” Id. In particular, ACEs argued that CLIN 006, which “is the single largest
CLIN, making up 41% of the Full Time Equivalents (FTE) for the instant procurement,”
includes required tasks which “are not research and development, but design and
implementation of hardware and software solutions that support MDA.” Id.
OHA concluded that “an RFP which requires evaluations and simulations
involving missiles and similar devices, as well as a thorough knowledge of these
technologies, may be designated under NAICS 541715, under the Guided Missiles and
Space Vehicles exception.” AR 3890. (citing NAICS Appeal of DCS Corp., SBA No.
NAICS-5703, 2016 WL 270949, at *4 (Jan. 6, 2016)). Regarding this procurement, OHA
explained that “this RFP explicitly requires services involving evaluations and simulation
of missiles, requiring a thorough knowledge of missiles, and thus fits into the description
of the NAICS exception in Footnote 11(d).” AR 3891.
40

Specifically, OHA concluded that CLIN 006 on network design, call for services
that qualify as research and development under Footnote 11(d). AR 3891. OHA stated
that the “contractor is required to develop new tools and processes to respond to changes
required by the results of testing” and that the “contractor will participate in the system
design activities to implement improvements to CI/CAT, asset management and all of
MDA’s data flow.” Id. OHA specifically concluded that under CLIN 006, the
“contractor’s work will include original investigation, or research, to obtain necessary
knowledge to develop the AoA for hardware and software solutions necessary to support
the CI/CAT.” Id. OHA stated that CLIN 006 “represents the largest portion of this
contract, with 41% of FTEs to be worked” and “includes research and development of the
software which will be an integral part of the essential simulations to support the
BMDS.” Id. Therefore, OHA concluded, “the CO was correct in characterizing this CLIN
as research and development.” Id. OHA added that because ACEs had not shown that
“NAICS code 541715 is clearly erroneous for this RFP, it is unnecessary to consider the
NAICS code [ACEs] advocates.” AR 3892.
ACEs argues that OHA failed to cite any evidence for the conclusion that “this
RFP explicitly requires services involving evaluations and simulations of missiles,
requiring a thorough knowledge of missiles, and thus fits into the description of NAICS
exception in Footnote 11(d).” Pl.’s MJAR at 38 (citing AR 3891). In this connection,
ACEs argues that OHA mischaracterized the Solicitation’s statement that a “thorough
knowledge of the BMDS and the interdependency of these labs is required to manage the
assets” to mean a thorough knowledge of missiles is required. Pl.’s MJAR at 38. Instead,
41

ACEs argues that the prior statement in the Solicitation merely requires understanding
“how MDA is organized and how it manages the BMDS.” Id. Similarly, ACEs argues
that because the terms “evaluations and simulations of missiles” and “thorough
knowledge of missiles” appears nowhere in the Solicitation, OHA’s application of
Footnote 11(d) was arbitrary and capricious. Id. at 38-39. ACEs argues that if Footnote
11(d) is read broadly enough to cover the services in this Solicitation, “any services
performed in the ARC (e.g., construction, maintenance, security) could ‘involve’
evaluations and simulations that require a ‘thorough knowledge of complete missiles and
spacecraft.’” Pl.’s Resp. at 15.
The government argues first that ACEs’ challenge to OHA’s decision regarding
the application of Footnote 11(d) is contradicted by the record and thus without merit.
Contrary to ACEs’ claims, the government points to the Solicitation’s requirement “for a
“thorough knowledge of the BMDS and the interdependency of these labs” as plain
support for OHA’s decision. AR 3891.
The court agrees with the government that it was not irrational for OHA to treat
the Solicitation as requiring an awardee to have both a “thorough knowledge of the
BMDS” and a thorough knowledge of “the interdependency of these labs.” See Def.’s
MJAR at 25.10 For this reason, OHA’s reliance on Footnote 11(d) was not misplaced on
the first ground asserted by ACEs.

ACEs’ reliance on Millenium Eng’g & Integration Co., SBA No NAICS-5309, 2011 WL
6183624, at *11 (Dec. 12, 2011) for the proposition that Footnote 11(d) does not apply even
when “knowledge of missiles and spacecraft is the heart of the RFP” is misplaced. In Millenium,
OHA affirmed the NAICS code designation for engineering services because while Footnote
10

42

Second, the government argues that while the Solicitation does not use the exact
language in Footnote 11(d) regarding “evaluations and simulations of missiles” and
“thorough knowledge of missiles,” OHA rationally concluded that under CLIN 006 as
described in the PWS, “[t]he contractor is required to develop new tools and processes to
respond to changes required by the results of the test[,] . . . participate in the system
design activities[,] . . . [and] obtain necessary knowledge to develop the AoA for
hardware and software solutions necessary to support the CI/CAT,” AR 3891, and thus
“contractor’s work will include original investigation, or research, to obtain necessary
knowledge to develop the AoA for hardware and software solutions necessary to support
the CI/CAT.” Id.
Again, the court agrees that OHA rationally determined that the tasks identified
above meet the criteria for Footnote 11(d). The Solicitation called for the contractor to
respond to results of tests, develop tools, participate in system design, and obtain
knowledge for hardware and software and because completion of those services will
require a thorough knowledge of a missile defense system, it was not irrational for OHA
to conclude that those services fall under Footnote 11(d)’s definition of research and
development.
Moreover, the court finds that the OHA decision, contrary to ACEs’ contentions,
is consistent with past OHA decisions applying Footnote 11(d). See NAICS Appeal of
DCS Corp., NAICS-5703, 2016 WL 270949, at *4 (Jan. 6, 2016) (affirming the

11(d) could apply, the agency’s view of the services as engineering services rather than research
and development was not clear error. Millenium, SBA No. NAICS-5309, at *11.

43

application of Footnote 11(d) to work “assessing aircraft safety and performance in
connection with the loading, carriage, and release of aircraft”); Inkling Media Co., LLC,
NAICS-4850, 2007 WL 1537649, at *5 (May 16, 2007) (affirming the application of
Footnote 11(d) where the purpose of the RFP was to obtain services “to coordinate all
technology base development to maximize benefits for strategic and theater missile
defense”).
In view of the foregoing, the court finds that ACEs’ concern that OHA applied
Footnote 11(d) too broadly so as to include “any services performed in the ARC (e.g.,
construction, maintenance, security)” is without merit. See Pl.’s Resp. at 15. OHA did not
conclude that all the work in the contract was research and development; OHA identified
the work in certain CLINs that was research and development. Because CLIN 006
accounted for 41% of the work and no other one NAICS code covered more than 41% of
the work, it was not irrational for OHA to affirm the NAICS code 541715 designation.
See FAR § 19.102(d) (requiring the contractor to assign the NAICS code “accounting for
the greatest percentage of the contract price”).11

11

To that extent ACEs argues that even if CLIN 006 calls for research and development, NAICS
code 541715 is inappropriate because CLIN 006 does not represent the majority of work under
the Solicitation, its argument also fails. See Pl.’s MJAR at 34. First, this argument has been
waived because it was not raised before OHA. See Palladian Partners, Inc. v. United States, 783
F.3d 1243, 1261 (Fed. Cir. 2015) (dismissing the protestor’s claim where the protestor “fail[ed]
to present this argument in the pending OHA appeal”). Indeed, ACEs made the opposite
argument by relying on CLIN 006 exclusively in its arguments to OHA that NAICS code 541513
covered the majority of the contract work. AR 3885. Second, ACEs provides no evidence to
show that any other single NAICS code covers more than the 41% of the work in CLIN 006.
Thus, OHA’s conclusion regarding the NAICS code covering the largest amount of the contract
work was CLIN006 is supported.

44

B. The Past Performance Evaluation Criteria Are In Accordance With the
Law and ACEs Was Not Prejudiced by the CO’s Past Performance
Evaluation Approach
ACEs argues that MDA’s change of past performance evaluation criteria from the
March DRFP which included five rating categories to the current Solicitation which only
gives an acceptable or unacceptable rating was not in accordance with the law for two
reasons. First, ACEs claims that the Solicitation’s acceptable/unacceptable eligibility
scheme fails to make a comparative analysis as required by 48 C.F.R. § 15.305(a)(2)(i)
which states the “comparative assessment of past performance information is separate
from the responsibility determination.” Second, ACEs argues that assigning offerors with
no relevant past performance an “acceptable” rating for past performance is not in
accordance with 41 U.S.C. § 1126(b) and 48 C.F.R. § 15.305(a)(2)(iv) which both state
“if there is no information on past performance of an offeror or the information on past
performance is not available, the offeror may not be evaluated favorably or unfavorably
on the factor of past performance.”12 ACEs argues that it is prejudiced by the past
performance evaluation terms because the terms unlawfully prevent ACEs from getting
credit from its allegedly excellent past performance. For the reasons that follow, both
arguments are meritless.

48 C.F.R. § 15.305(a)(2)(iv) states “In the case of an offeror without a record of relevant past
performance or for whom information on past performance is not available, the offeror may not
be evaluated favorably or unfavorably on past performance.”
12

45

ACEs’ argument that 48 C.F.R. § 15.305(a)(2)(i) requires comparative analysis
that goes beyond a pass/fail scheme is unsupported.13 ACEs argues that “under the FAR,
past performance is a mandatory evaluation factor” and that an acceptable/unacceptable
evaluation does not satisfy the regulations requirement for a “comparative” analysis. Pl.’s
Resp. at 8. In making this argument, ACEs asserts that Section 15.305(a)(2)(i) requires
MDA to “conduct a comparative analysis of performance histories beyond a threshold
inquiry of eligibility.” Pl.’s MJAR at 25.
The government contends, however, that this Solicitation satisfies Section
15.305(a)(2)(i) by comparing the past performance of offerors to the requirements in the
Solicitation to arrive at the acceptable or unacceptable rating and that ranking based on
past performance is not required.
In full, Section 15.305(a)(2)(i) states:
Past performance information is one indicator of an offeror’s ability to
perform the contract successfully. The currency and relevance of the
information, source of the information, context of the data, and general
trends in contractor’s performance shall be considered. This comparative
assessment of past performance information is separate from the
responsibility determination required under subpart 9.1.

13

To the extent that ACEs argues that 48 C.F.R. § 15.305(a)(2)(i) requires comparing the
offerors’ past performance against one another, this argument is without support. First, ACEs
states in its response that it “made no such argument.” Pl.’s Resp. at 8. But even if it did, that
argument would fail. This court has previously interpreted Section 15.305(a)(2)(i) to require a
comparison of an offeror’s past performance to the contract requirements. United Concordia
Cos., Inc. v. United States, 99 Fed. Cl. 34, 45 (2011) (“The term ‘comparative’ is used in this
section in the sense that the offerors’ past performance is compared with the requirements of the
contract.”). Indeed, “the comparative analysis sought by plaintiff would require an ‘apples-tooranges’ comparison because the offeror’s past efforts arise out of different contract.” See id.

46

The government thus argues that when read in its entirety, Section 15.305(a)(2)(i) makes
clear that “this comparative assessment” refers to the earlier stated requirement to
evaluate whether the offeror could perform the contract successfully by looking to the
“currency, relevance, source, context, and general trend” of the offeror’s past
performance. The sentence also requires that this assessment be different than the
responsibility determination. According to the government, this Solicitation does exactly
that. AR 3259-60 (evaluating the offerors’ past performance on recency, relevancy, and
quality and clarifying that the past performance evaluation is different than the
responsibility determination). The government argues that this court has defined
“comparative” to mean that the “offerors’ past performance is compared to the
requirements of the contract.” United Concordia Cos., Inc. v. United States, 99 Fed. Cl.
34, 45 (2011).
The court agrees with the government’s reading of 48 C.F.R. § 15.305(a)(2). In
addition, the court finds that ACEs’ reliance on Al Ghanim Combined Group Co. Gen.
Trad. & Cont. W.L.L. v. United States, 56 Fed. Cl. 502 (2009) is misplaced. Al Ghanim
involved 48 C.F.R. § 15.305(a)(3)’s technical evaluation requirements not 48 C.F.R.
§ 15.305(a)(2)’s past performance evaluation requirements. See id. at 519.14 The
government’s reading of 48 C.F.R. § 15.305(a)(2)(i) is supported and ACEs has not

48 C.F.R. § 15.305(a)(3) provides “Technical Evaluation. When tradeoffs are performed (see
15.101-1), the source selection records shall include – (i) An assessment of each offeror’s ability
to accomplish the technical requirements; and (ii) A summary, matrix, or quantitative ranking,
along with appropriate supporting narrative, of each technical proposal using the evaluation
factors.” This references 48 C.F.R. § 15.101-1 which describes how a tradeoff process functions.
14

47

shown that the agency violated the provision by having only acceptable or unacceptable
as the standards for evaluating past performance.
Regarding ACEs’ second argument that the Solicitation’s past performance
evaluation criteria violate 41 U.S.C. § 1126(b) and 48 C.F.R. § 13.305(a)(2)(iv), the court
finds as follows.15 ACEs argues that the Solicitation effectively treats “any offeror with
no past performance history . . . favorably by being rated as ‘Acceptable’ – the highest
possible rating.” Pl.’s MJAR at 25. ACEs asserts that at best those contractors lacking
relevant past performance experience should receive only a “neutral” rating. See Pl.’s
MJAR at 5 n.1, 25. As ACEs explained at oral argument, a lawful Solicitation would
provide a “neutral” but not “acceptable” rating to those with no past performance. ACEs
conceded, however, that those with no past performance, under either formulation should
be allowed to compete. Oral Arg. 15:10:40-15:11:30.
The government argues that because under either formulation those without
relevant past performance would be eligible to compete for the award, ACEs cannot show
any prejudice from MDA’s “acceptable” and “unacceptable” rating system. Def.’s MJAR
at 40.
The court agrees with the government that because under ACEs’ proposed
formulation contractors without relevant past experience would be eligible to compete,
ACEs has not shown how it would benefit from a change in the Solicitation’s past
performance approach to include a neutral rating. It is for this reason that ACEs has not

The parties’ arguments for both 41 U.S.C. § 1126(b) and 48 C.F.R. § 15.305(a)(2)(iv) are one
and the same.
15

48

established prejudice. To establish prejudice, ACEs would have to show that a higher
past performance rating would impact the agency’s tradeoff evaluation so that offerors
with higher past performance ratings would be given a better opportunity for award than
those with no relevant past performance. In this Solicitation, however, MDA elected not
to include past performance in the tradeoff evaluation and ACEs has not challenged that
decision.
It is clear from its complaint that ACEs has not alleged that MDA unlawfully
failed to include past performance in its tradeoff analysis. The Solicitation explicitly
indicates, as noted above, that the “selection decision will document tradeoffs between
Factors 4, 5, and 6 in the competitive range [for those offerors receiving] receiving an
acceptable rating for Factors 1-3.” AR 3226. Past performance was Factor 3 and therefore
not part of the tradeoff analysis. Id. ACEs’ amended complaint makes no challenge to the
aforementioned language. Instead, ACEs only challenges the past performance evaluation
criteria to the extent that assigning a rating of “Acceptable” to “any offeror without a
record of relevant past performance or for whom information on past performance is not
available” as opposed to “neutral” violates 41 U.S.C. § 1126(b) and 48 C.F.R.
§ 15.305(a)(2)(iv). Amend. Compl. ¶¶ 31-35. A challenge to the past performance criteria
is not the same as a challenge to the tradeoff analysis criteria.
Having failed to challenge MDA’s decision not to include past performance in the
tradeoff evaluation, ACEs cannot demonstrate that there would be any difference to its
award potential under the current Solicitation’s formulation of Factor 3 or under the
approach it advocates. In such circumstance, ACEs failed to demonstrate prejudice.
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V.

CONCLUSION
In sum, ACEs has not met its burden to show that it has standing to pursue this

pre-award protest. Furthermore, even if it could establish standing, ACEs has failed to
meet its burden to demonstrate that OHA was arbitrary, capricious, abused its discretion,
or was not in accordance with the law when it affirmed the CO’s designation of NAICS
code 541715 for this Solicitation. In addition, ACEs has not established that the CO’s
past performance evaluation approach violated 48 C.F.R. § 15.305(a)(2)(i), or that the
approach prejudiced ACEs under 41 U.S.C. § 1126(b) or 48 C.F.R. § 15.305(a)(2)(iv)
where ACEs had not challenged the CO’s tradeoff criteria. For the forgoing reasons, the
court GRANTS the government’s cross-motion for judgment on the administrative
record and DENIES ACEs’ motion for judgment on the administrative record together
with its motion for injunctive relief. Each party shall bear its own costs.
IT IS SO ORDERED.

s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge

50