Csc Government Solutions LLC v. United States
129 Fed. Cl. 416
| Fed. Cl. | 2016Background
- USSTRATCOM issued an RFP for the ITCC II contract to provide long‑term IT operations, engineering, program management, and a phased transition to a new headquarters; award was single‑contract, 10 years, with CLIN X101 (Engineering) as the sole cost‑reimbursable CLIN.
- Evaluation factors: Technical Approach/Technical Risk (with Management/Phase‑in subfactor), Past Performance, and Cost/Price (cost realism for CLIN X101 and FAR § 52.222‑46 compensation plan review); price was decisive among technically acceptable proposals.
- Five offerors responded; after rounds of discussions the Air Force awarded the contract to HP Enterprise Services (HPES); incumbent CSC contested the award at GAO (denied) and then in the Court of Federal Claims.
- CSC alleged misleading, unequal, and coercive discussions; inadequate cost‑realism analyses (including failure to evaluate option years and direct labor rates); improper application of FAR § 52.222‑46 regarding compensation/retention; flawed phase‑in staffing evaluation; and unreasonable past‑performance rating for HPES.
- The court reviewed the administrative record under the APA’s arbitrary and capricious standard and denied CSC’s motion, granting judgment to the government and HPES.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Cost‑realism for CLIN X101 (option years and labor rates) | CSC: agency only analyzed base year, failed to assess option‑year staffing realism and direct labor rates, producing incorrect probable cost adjustments | Gov: analysis covered base + option years; DCAA and agency compared proposed rates to salary surveys and performed independent realism checks | Held: Agency considered all years and performed a rational labor‑rate realism analysis; CSC failed to show lack of rational basis |
| FAR § 52.222‑46 compensation analysis | CSC: agency should have compared offerors’ proposed salaries to incumbent rates and evaluated retention risk; lower rates risked loss of incumbents | Gov: FAR clause requires a rational assessment of recruiting, retention, and continuity; RFP did not mandate incumbent‑comparison step; evaluators considered fringe benefits and retention plans | Held: Agency complied with FAR § 52.222‑46; its explanation that compensation plans were realistic and supported retention is rational |
| Consistency between technical (phase‑in staffing) and cost evaluations | CSC: technical Acceptable rating conflicted with cost realism findings that staffing was unrealistically low | Gov: technical and cost evaluations address different criteria (approach/management vs. realism of proposed costs); final ratings found consistency after CSC revised its FPRs | Held: No irrational inconsistency; differences are explainable and final assessments were consistent |
| Past performance evaluation of HPES (failure to consider NASA ACES issues) | CSC: agency ignored known negative ACES contract performance that would undermine HPES’s Substantial Confidence rating | Gov: agency reasonably relied on offeror‑provided references meeting RFP recency/relevancy rules; not required to search all sources and record shows multiple strong references | Held: Evaluation was rational; inclusion of ACES would not have changed the Substantial Confidence rating |
| Discussions (misleading, unequal, coercive) | CSC: agency misled/coerced CSC into raising costs and applied unequal scrutiny between offerors | Gov: discussions were tailored, specific, addressed weaknesses, and any price changes were business judgments by offerors | Held: Discussions were meaningful, not misleading or coercive, and differences in treatment were justified by proposal differences |
Key Cases Cited
- A‑T Solutions, Inc. v. United States, 122 Fed. Cl. 170 (Fed. Cl. 2015) (cost‑realism determinations are within agency discretion and overturned only for lack of rational basis)
- OMV Med., Inc. v. United States, 219 F.3d 1337 (Fed. Cir. 2000) (FAR § 52.222‑46 does not require setting minimum salary levels or a mandated two‑step incumbent comparison)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (procurement actions set aside where decision lacked rational basis or violated procedure)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29 (U.S. 1983) (agency must articulate rational connection between facts and decision under arbitrary and capricious review)
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (standing in bid protests requires showing substantial chance of award absent the alleged errors)