I3 Cable & Harness LLC v. United States
132 Fed. Cl. 495
| Fed. Cl. | 2017Background
- DISA/DITCO solicited firm-fixed-price IDIQ Installation Kits (IKs) for the JBC‑P program via an LPTA evaluation; Attachment J‑3 price template required unit prices by quantity bands; the government would use undisclosed "Government‑possessed quantities" to compute total evaluated price (TEP).
- Five proposals were received; initial evaluation used 150 units per line-item which produced Ace as lowest-priced and apparent awardee; GAO protest prompted corrective action to re‑evaluate quantities and prices.
- During corrective action, the agency reclassified IKs/Spares into Items Purchased Often/Moderately/Rarely based on historical purchases and needs (per contemporaneous MFR) and recomputed TEPs, resulting in Tabet lowest, Ace second, i3 fourth; Tabet’s technical submission was unacceptable, Ace was technically acceptable, and Ace received award.
- i3 protested at GAO (dismissed as academic after corrective action) and then in the Court of Federal Claims, raising claims about (1) price evaluation/estimated quantities, (2) Ace’s technical acceptability (subcontracting/placement of work), (3) an OCI from Ace’s subcontractor Unicor, and (4) a late assertion of a "directed award"/bad‑faith bias.
- The court reviewed the agency record under the APA/arbitrary‑and‑capricious standard and denied i3’s motion, granting judgment to the government and Ace; key holdings: i3 waived challenges to undisclosed evaluation quantities; the corrective action’s re‑quantification was reasonable; i3 failed to prove technical deficiency, OCI, or agency bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Price evaluation / use of undisclosed estimated quantities | Agency used two different undisclosed quantity sets (initial and corrective) making price eval arbitrary and prejudicial | Solicitation permitted use of government‑possessed undisclosed quantities; challenge to solicitation terms was untimely; corrective re‑quantification was reasoned and based on history/needs | Waived as untimely to the extent challenging solicitation terms; on merits agency’s corrective re‑evaluation was reasonable and not arbitrary |
| Technical acceptability (subcontracting, place of performance) | Ace cannot be 100% responsible while subcontracting (Unicor) and thus violates SOW place‑of‑performance and management oversight requirements | Solicitation permits subcontracting; any tension with SOW was a patent ambiguity not timely challenged; no record evidence Ace lacks management/control or capability | Protestor failed to show error or prejudice; technical acceptability determination upheld |
| Organizational Conflict of Interest (Unicor) | Unicor (a federal entity) may have had unequal access to nonpublic info, giving Ace unfair advantage | CO had discretion; OCI claims require hard facts; protestor offered only speculation and irrelevant small‑business/job arguments | Dismissed: protestor provided no factual basis for an unequal‑access OCI; agency discretion upheld |
| Directed award / bad faith | Divergent price evaluations and alleged overlooking of technical faults show agency bias and a directed award to Ace | Agency acted in good faith; differences resulted from valid corrective action; no clear/convincing evidence of intent to injure or bias | Dismissed: no clear and convincing evidence of bad faith; presumption governmental good faith not overcome |
Key Cases Cited
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir.) (challenges to solicitation terms that are apparent must be raised before close of bidding or are waived)
- Am‑Pro Protective Agency, Inc. v. United States, 281 F.3d 1234 (Fed. Cir.) (protesting bad faith requires clear and convincing evidence; factual showing of specific intent to injure)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (U.S.) (standards for arbitrary and capricious review require reasoned explanation and consideration of relevant factors)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir.) (procurement decisions reviewed under APA arbitrary‑and‑capricious standard)