Business Integra, Inc. v. United States
116 Fed. Cl. 328
Fed. Cl.2014Background
- DHS issued a negotiated target RFP (EAGLE II) under FAR Part 15 for IT services with small business and unrestricted tracks; this matter concerns FC1, the small business 8(a) group.
- Proposals required complete pricing for 36 labor categories across base and option years, with omissions rendering proposals ineligible.
- Business Integra submitted a timely FC1, 8(a) proposal but omitted Year 5 Level I Systems Analyst pricing and left other years dependent on a formula, resulting in $0.00 for several years.
- DHS deemed the BI omission a material non-conformity and eliminated BI from consideration for award despite strong non-price factors.
- BI protested, arguing the omission was de minimis and deference should be given to corrections or waivers; DHS argued the omission affected evaluation and pool integrity.
- The court must apply FAR Part 15 standards and review DHS’s discretionary decision under the APA to determine if the action was arbitrary or capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the pricing omission is a material term under the EAGLE II RFP. | BI contends the omission is de minimis and not material. | DHS says any pricing omission is a material non-conformity that disqualifies the proposal. | Omission deemed material; proposal ineligible. |
| Whether DHS abused discretion by not waiving or correcting the error. | DHS should have corrected or waived the error; pricing pattern allowed projection. | Given materiality, waiver or correction was not required; discretion to reject stands. | No abuse; DHS acted within discretion. |
| Whether negotiating procurement rules require treatment of price omissions differently from sealed-bid cases. | Part 15 allows some corrections; cites ST Net as analogue. | Distinguishes Part 15 from Part 14; omissions in Part 15 are not minor errors. | Part 15 framework applies; omissions here are material. |
| Whether ST Net and related precedents require a different approach to de minimis pricing omissions. | Omission amount is minuscule (0.0041%); not warranting rejection. | Even small omissions can be material under the solicitation’s explicit terms. | ST Net not controlling given EAGLE II’s specific materiality rule. |
Key Cases Cited
- ST Net, Inc. v. United States, 112 F. Cl. 99 (Fed. Cl. 2013) (material pricing information crucial to evaluation in negotiated procurements)
- Linc Gov’t Servs., LLC v. United States, 108 F.3d 473 (Fed. Cir. 2012) (formatting/blank pricing treated as immaterial under Part 14, not controlling here)
- DMS All-Star Joint Venture v. United States, 90 F.3d 653 (Fed. Cl. 2010) (non-price omissions context; Part 15 distinctions apply)
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed. Cir. 2009) (agency rationality and discretionary evaluation standards)
- Centech Grp., Inc. v. United States, 554 F.3d 1029 (Fed. Cir. 2009) (materiality and rational basis in procurement decisions)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (procurement decision must have rational basis)