Mission1st Group, Inc. v. United States
144 Fed. Cl. 200
| Fed. Cl. | 2019Background
- The Army issued Solicitation W15P7T-15-R-0008 for multiple IDIQ C4ISR support contracts; awards based on acceptable corporate experience, past performance (more important), and total evaluated cost (Attachment 1 spreadsheet + cost narrative required).
- Solicitations required that rates in the cost narrative/supporting documentation exactly match rates in Attachment 1; government could make cost realism adjustments but was not obligated to do so.
- Mission1st submitted a Phase 1 proposal improperly formatted and was given Phase 2 opportunity; its Phase 2 revised submission contained a mismatch: the cost narrative indicated overhead (O/H) applied to (Direct Labor + Fringe) while Attachment 1 formulas applied O/H to Direct Labor only.
- The Army found Mission1st’s Phase 2 cost proposal noncompliant because the inconsistency prevented verification of proposed indirects and fee; total evaluated cost was therefore "Undetermined," rendering Mission1st ineligible for award.
- GAO denied Mission1st’s protest; Mission1st then sued in the Court of Federal Claims. The Court reviewed whether the Army acted arbitrarily in (1) failing to perform a probable-cost adjustment to reconcile the inconsistency, (2) failing to seek clarification, and (3) treating Mission1st differently than other offerors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the agency was required to make a probable cost adjustment (cost realism) to correct Mission1st’s spreadsheet error | Mission1st: Error was clerical/obvious; FAR 15.404-1(d) contemplates probable-cost adjustments, so Army should have adjusted Attachment 1 to match narrative | Government: Probable-cost adjustments are discretionary; here the inconsistency made offeror intent unclear and costs unverifiable, so agency reasonably declined to assume intent or alter proposal | Held: Agency acted rationally; no obligation to make adjustment when proposal and narrative were irreconcilable and intent was uncertain |
| Whether the agency abused discretion by not seeking a clarification under FAR 15.306(a) | Mission1st: Discrepancy was minor and should have been clarified (typographical/clerical) | Government: Clarifications are discretionary and cannot materially alter proposals; correcting Mission1st’s spreadsheet would materially alter cost/fee and require inferring intent | Held: No abuse; CO reasonably declined to seek clarification because error was not clearly clerical and clarification could amount to a prohibited proposal revision |
| Whether Mission1st was subject to disparate treatment compared to other offerors whose minor errors were ‘‘fixed’’ | Mission1st: Other offerors with similar mistakes had their submissions effectively corrected; denying Mission1st was unequal treatment | Government: Examples Mission1st cites were materially different—those errors were verifiable or typographical and did not require inferring intent or altering price | Held: No disparate treatment; other cases were distinguishable and Army treated like cases alike |
| Standing / pre-award prejudice to pursue protest | Mission1st: As a rejected offeror, it alleges it had a substantial chance but-for Army’s decisions | Government: Not disputed procedurally here | Held: Mission1st is an interested party with standing (assumption of alleged errors shows substantial chance of award absent the exclusion) |
Key Cases Cited
- Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374 (Fed. Cir. 2012) (standing/"interested party" standard in bid protests)
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (review on administrative record under RCFC 52.1)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard requires reasoned explanation)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) ("substantial chance" standard for prejudice/standing in post-award protests)
- Dell Fed. Sys., L.P. v. United States, 906 F.3d 982 (Fed. Cir. 2018) (clarifications cannot cure material deficiencies or revise proposal terms)