Dyncorp International, LLC v. United States
10 F.4th 1300
| Fed. Cir. | 2021Background:
- The Army solicited LOGCAP V, a global IDIQ procurement for logistics support; awards were to be made by best‑value tradeoff on four factors (technical/management, past performance, small business participation, cost/price).
- Price reasonableness (for the firm‑fixed‑price portions) had to be separately determined; an unreasonably high price would constitute a deficiency or significant weakness requiring discussions under FAR 15.306(d)(3).
- Six offerors competed; DynCorp proposed higher prices in several regions and received only “good” or “acceptable” technical ratings; the Army initially evaluated price reasonableness only for the lowest/winning offers.
- The Court of Federal Claims found that the solicitation required price‑reasonableness evaluation for all offers and remanded for corrective action; on remand the Army requested additional data and produced extensive memoranda analyzing price reasonableness for each offer and region, concluding all prices were reasonable.
- The Court of Federal Claims sustained the award after remand; the Federal Circuit affirmed, holding the Army did not violate FAR part 15 and its conclusions were not arbitrary or capricious.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAR 15.404‑1(b)(3) forbids using non‑preferred price‑analysis techniques unless the contracting officer first makes a documented determination that competitive or historical price information is unavailable/insufficient | DynCorp: FAR requires use of the two "preferred" techniques first and a formal determination (documented) before using other techniques | Government/Army: FAR guidance is permissive; contracting officers have discretion to select appropriate techniques and need not document a precondition | The court held FAR 15.404‑1(b)(3) is permissive, not prohibitory; contracting officers have discretion and the provision does not impose a documentation requirement |
| If a determination is required, whether the record shows the contracting officer made it | DynCorp: Record lacks the required determination that preferred techniques were insufficient | Army: Record (early comparisons, later requests for other data, and detailed memoranda) shows the officer reasonably treated preferred techniques as insufficient for overall reasonableness | Even if a formal determination were required, the court found the record shows a reasonable, discernible determination that the preferred techniques were insufficient |
| Whether the Army's conclusion that all offerors' prices were reasonable was arbitrary and capricious in light of wide price disparities and the Army's choice not to do a simple offer‑to‑offer comparison | DynCorp: Wide price gaps create a "critical logical gap"; at least DynCorp’s high price should have been found unreasonable (a deficiency) and discussed | Army: Price variance followed from different, reasonable technical approaches; the remand analysis explained price differences and evaluated reasonableness for each approach | The court held the agency was not arbitrary or capricious; price disparities were explained by differing but reasonable technical approaches and DynCorp identified no specific unreasonable pricing errors |
Key Cases Cited
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (standard for reviewing procurement evaluations and prejudice requirement)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (agency discretion in procurement and review under the APA)
- Agile Def., Inc. v. United States, 959 F.3d 1379 (Fed. Cir. 2020) (broad agency discretion in cost realism and related analyses)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious review requires rational connection between facts and agency choice)
- Glenn Def. Marine (Asia), PTE Ltd. v. United States, 720 F.3d 901 (Fed. Cir. 2013) (deferential review of procurement decisions and importance of prejudice showing)
- Palantir USG, Inc. v. United States, 904 F.3d 980 (Fed. Cir. 2018) (record sufficiency permits meaningful judicial review)
- Wheatland Tube Co. v. United States, 161 F.3d 1365 (Fed. Cir. 1998) (agency's decisional path must be reasonably discernible)