Harmonia Holdings Group, LLC v. United States
132 Fed. Cl. 129
| Fed. Cl. | 2017Background
- SBA/DOI issued RFQ for firm-fixed-price task order (GSA Schedule 70, HUBZone set-aside) to maintain DCMS reporting systems; IGE ≈ $3.74M.
- Original RFQ required three key personnel by title but did not specify education, years of experience, GSA labor-category crosswalks, or signed commitment letters; price and technical evaluated separately with a best-value tradeoff.
- Six offers were received including Harmonia (HHG) and incumbent Java Productions (JPI); evaluators rated JPI "Excellent" overall and awarded JPI despite higher price; HHG protested to GAO.
- GAO protest triggered agency corrective action: DOI amended the RFQ to add minimum education/experience for key personnel, require GSA labor-category crosswalks and signed commitment letters, explicitly allow price-realism analysis, clarify modernization-planning duties, and replace QASP with a QCP.
- HHG challenged the amended RFQ in a new GAO protest, then filed this pre-award protest in the Court of Federal Claims claiming the amendments were unnecessary, favored JPI, and constituted bad faith.
- Court upheld DOI’s corrective action: plaintiff had standing; amendments were reasonable and related to identified defects (not arbitrary or biased); no clear-and-convincing evidence of agency bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to bring pre-award protest | HHG is interested party as competitive-range offeror; alleged competitive injury from amended RFQ | DOI argued lack of standing | Court: HHG has standing (prospective offeror + alleged non-trivial competitive injury) |
| Proper scope of corrective action (amend RFQ vs. reevaluate under original RFQ) | Amending RFQ was overbroad and retroactively justified flawed evaluation; agency should have only reevaluated | Agency may amend solicitation to reflect actual needs discovered during protest review; contracting officers have broad corrective-action discretion | Court: Amendment was reasonable and related to defects revealed (e.g., ambiguous key-personnel needs); amendment permissible |
| Addition of price-realism analysis | Introducing price realism was irrational and designed to penalize low-price offers | Low, heavily discounted prices prompted legitimate concern about offerors’ ability to perform; explicit notice was reasonable | Court: Inclusion of potential price-realism analysis was reasonable given record concerns about unrealistically low pricing |
| Alleged favoritism/bad faith toward incumbent JPI | Amendments tracked JPI’s proposal and therefore were intended to "hardwire" award to JPI; agency acted in bad faith | No evidence of intentional bias; amendments addressed genuine solicitation ambiguities and evaluation issues | Court: No clear-and-convincing evidence of bad faith; favoritism claim rejected |
Key Cases Cited
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (APA standard and Rule 52.1 paper-record review in bid protests)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (standards for bid protest review)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) (Tucker Act standing requirements for bid protesters)
- Rex Serv. Corp. v. United States, 448 F.3d 1305 (Fed. Cir. 2006) (definition of interested party under §1491)
- CGI Fed., Inc. v. United States, 779 F.3d 1346 (Fed. Cir. 2015) (pre-award protest standing principles)
- Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281 (U.S. 1974) (agency decisions upheld if path reasonably discernible)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (U.S. 1983) (agency must examine relevant data and provide reasoned explanation)
- Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324 (Fed. Cir. 2004) (bad-faith/bias requires clear-and-convincing proof)