Dellew Corporation v. United States
128 Fed. Cl. 187
| Fed. Cl. | 2016Background
- Army issued RFP W52P1J-13-R-0038 (small-business EAGLE BOA set-aside) for logistics support at Schofield Barracks; award was a CPFF contract (with a firm-fixed-price transition CLIN).
- RFP evaluation: security clearance (Phase 1), technical (Acceptable/Unacceptable) (Phase 2), then Past Performance and Cost/Price (Phase 3), followed by a best-value tradeoff; offerors required to provide historic/budgeted indirect rates.
- After multiple rounds, TSI and Dellew were in the competitive range; both rated Acceptable (Technical) and Substantial Confidence (Past Performance). TSI had the higher evaluated price but was selected as best value.
- Dellew protested (GAO, then Court). Agency took corrective actions twice, amended the RFP, reopened discussions, and ultimately reawarded the contract to TSI on May 24, 2016.
- Dellew challenged (1) past performance evaluation (failure to credit Dellew’s partner’s transportation experience; relevance findings for subcontracts/affiliates) and (2) adequacy/documentation of the cost realism analysis (direct labor, G&A, subcontract overhead). Dellew sought injunctive/declatory relief and termination of the award.
- The Court found the agency’s evaluations and cost realism analysis within the zone of reasonableness, denied Dellew’s motion, and entered judgment for the government and TSI.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Past performance — failure to credit Dellew’s partner (* ) for transportation experience | Dellew: partner’s transportation work was relevant and should have been credited in transportation subfactor | Gov: omission was not prejudicial because partner’s transportation value was small relative to TSI’s extensive transportation experience | Court: Agency should have credited the partner, but error was not prejudicial; no relief awarded |
| Past performance — relevance of incumbent and subcontractor/affiliate experience | Dellew: Agency unreasonably excluded incumbent subcontract and misattributed relevance to TSI’s subcontract/affiliate | Gov: Agency reasonably assessed relevance and relied on comparative weight of experience | Court: Agency’s relevance determinations were within its discretion; no arbitrary or capricious action shown |
| Cost realism — direct labor rates and classification (Salary.com data; systems administrator SCA classification) | Dellew: Salary.com data stale/inapplicable and TSI misclassified a systems admin, making its labor costs unrealistically low | Gov/TSI: data need not be 2016; analyses showed rates within reasonable medians and SCA wage met minimums; Agency reasonably reviewed assumptions | Court: Agency’s review of wage data and classification decisions was rational and not fatally flawed |
| Cost realism — G&A and subcontract overhead inconsistencies | Dellew: TSI’s proposed G&A materially lower than historic rates and subcontractor (* ) provided conflicting overhead info, undermining realism | Gov/TSI: TSI documented reasons for lower G&A (e.g., one-time legal fees previously) and Agency reasonably evaluated narratives; alleged wording inconsistencies did not prevent meaningful analysis | Court: Agency’s cost realism analysis for G&A and overhead was rational and adequately documented |
| Prejudice / best-value tradeoff | Dellew: errors in past performance and cost realism deprived Dellew of a substantial chance to win | Gov: even correcting the minor errors, SSA reasonably could have chosen TSI given its much greater transportation experience and other tradeoff considerations | Court: No prejudice shown; SSA’s discretion in the close best-value tradeoff was reasonable |
Key Cases Cited
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (standard for judicial review of agency procurement actions under the APA)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (deference to agency procurement decisions in negotiated procurements)
- Statistica, Inc. v. Christopher, 102 F.3d 1577 (Fed. Cir. 1996) (prejudice/substantial chance standard in bid protests)
- Overstreet Elec. Co. v. United States, 59 Fed. Cl. 99 (Fed. Cl. 2003) (deference in negotiated procurements and performance-standard contexts)
- A-T Solutions, Inc. v. United States, 122 Fed. Cl. 170 (Fed. Cl. 2015) (cost realism analysis requires more than a conclusory statement but need not be impecable)
- Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272 (Fed. Cl. 2007) (agency must avoid irrational assumptions or critical miscalculations in cost realism)
- United Payors & United Providers Health Servs. v. United States, 55 Fed. Cl. 323 (Fed. Cl. 2003) (material facts reasonably considered in cost realism)
- Glenn Defense Marine Asia v. United States, 105 Fed. Cl. 541 (Fed. Cl. 2012) (agency need not quantify non-cost factors exactly in tradeoffs)