Lyon Shipyard, Inc. v. United States
113 Fed. Cl. 347
Fed. Cl.2013Background
- Lyon challenges Navy's Lot II ID/IQ award for marine boatyard services to Marine Hydraulics International (MHI).
- Solicitation advised best value with technical, past performance, and price factors; non-price factors prioritized but price may gain importance when equal.
- Two Lots, Lot II contested; multiple award permitted; LSB evaluated proposals and held discussions in 2011–2012; Lyon, among incumbents, submitted price proposals with notes on full burdening.
- Navy concluded Lyon's price was higher than the Government estimate and not in line with others; SSAC recommended award to MHI over Lyon.
- SSA awarded Lot II contracts to remaining competitive range offerors (excluding Lyon); Lyon protested after GAO denial; plaintiff sought injunctive relief here.
- Court reviews under Bannum standards; questions resolved on the administrative record with limited supplementation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Navy’s discussions were meaningful. | Lyon argues FAR 15.306(d) required meaningful discussions on price. | Navy had discretion; no obligation to discuss every weakness; price not always material for discussions. | No reversible error; discussions deemed not required to address Lyon's price as non-significant weakness. |
| Whether the Navy should have reopened discussions due to Lyon's price. | If price deemed excessive, discussions should be reopened. | Reopening is discretionary and not required absent significant weaknesses; here none justified reopening. | No mandatory reopening; discretion exercised within bounds. |
| Whether the Navy treated Lyon unfairly by considering MHI's task-order pricing. | Unequal treatment by evaluating MHI's task-order pricing while not similarly adjusting Lyon. | MHI's pricing deemed reasonable; any task-order pricing discussion did not prejudice Lyon. | No prejudicial error; no unequal treatment established. |
| Whether the use of the IGE and price comparisons was improper. | An apples-to-apples comparison with IGE misapplied Lyon's pricing. | IGE comparison and price reasonableness properly conducted; no harm shown. | No prejudice; Lyon's price significantly higher than MHI's. |
Key Cases Cited
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (distinguish judgment on the administrative record from summary judgment; reasonableness standard in bid protests)
- JWK Int'l Corp. v. United States, 279 F.3d 985 (Fed. Cir. 2002) (cost is not always material; agency has discretion on factors and discussions need not always address price)
- Elec. Data Sys., LLC v. United States, 93 F.3d 416 (Fed. Cl. 2010) (meaningful discussions and evaluation standards in bid protests)
- DMS All-Star Jt. Venture v. United States, 90 F.3d 653 (Fed. Cl. 2010) (discusses when agency must address costs in discussions)
- Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345 (Fed. Cir. 2004) (prejudice and competitive injury requirements in bid protests)