PERSPECTA ENTERPRISE SOLUTIONS LLC v. United States
1:20-cv-00814
Fed. Cl.Jan 15, 2021Background
- Navy issued RFP N00039-18-R-0005 (NGEN-R) for secure end-to-end IT services; anticipated single award up to ~$7.7 billion over 5+3 years; evaluation: Technical (Factor 1), Management (Factor 2), Past Performance, Transition, Cost/Price (Factor 5), and Gate Criteria.
- Perspecta (incumbent), Leidos, and a third firm submitted proposals; Perspecta and Leidos entered competitive range; final proposal revisions due Sept. 12, 2019; award to Leidos announced Feb. 5, 2020.
- SSEB rated Leidos far superior (many strengths; few weaknesses); SSA found Leidos’ technical approach superior and Perspecta technically inferior and higher-priced, declined a tradeoff in Perspecta’s favor.
- Perspecta protested at GAO (denied) and then filed suit in the Court of Federal Claims alleging: improper handling of an OCI, material misrepresentation about personnel, flawed price/cost realism and unequal cost treatment, inadequate/unequal discussions, and disparate technical evaluation.
- Court reviewed administrative record and denied Perspecta’s motion for judgment, granting the government and Leidos’ cross-motions — finding waiver of the OCI claim, no material misrepresentation, rational price/cost analyses, meaningful discussions, and no disparate technical treatment sufficient to show prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Organizational Conflict of Interest (OCI) | Leidos employed a former Navy official with access to nonpublic competitively useful info; CO failed to investigate | Perspecta knew or should have known pre-award about the employee and thus waived the OCI challenge | Waived under Blue & Gold doctrine; Perspecta had public notice and failed to raise pre-award challenge |
| Material misrepresentation (personnel availability) | Leidos knowingly misrepresented availability of a proposed manager whose role was critical | RFP did not require naming/key-personnel; the unnamed/non-key departure was not material to evaluation | No material misrepresentation; personnel was not required or shown as material to evaluation |
| Price and cost realism / unequal cost treatment | Navy used flawed labor-rate methodology and failed to assess technical risk from Leidos’ low fixed-price CLINs; Navy treated Perspecta more stringently on CPFF rates | Agency had discretion on realism methodology, used IGCE and statistical analysis; Leidos provided justifications; amendment allowed offerors to raise rates or justify them | Agency’s price and cost realism analyses were within discretion and rational; no unequal treatment or prejudice shown |
| Meaningful discussions / technical evaluation / disparate treatment | Navy failed to surface many weaknesses during discussions and then downgraded Perspecta for issues that existed earlier; similar features credited for Leidos were downgraded for Perspecta | Many weaknesses arose from Perspecta’s revisions; agencies need not re-open discussions for new weaknesses in revised proposals; proposals were substantively different | Discussions were meaningful; agency’s technical judgments were rational and not shown to be disparate or prejudicial |
Key Cases Cited
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (pre-award solicitation objections that could have been raised before award are waived)
- Inserso Corp. v. United States, 961 F.3d 1343 (Fed. Cir. 2020) (waiver doctrine applies to OCI claims when protestor was on notice pre-award)
- Afghan Am. Army Servs. Corp. v. United States, 90 Fed. Cl. 314 (2010) (agency has broad discretion in price realism analyses absent a prescribed solicitation methodology)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir. 2004) (unequal treatment in evaluation can constitute an abuse of discretion)
- OMV Med., Inc. v. United States, 219 F.3d 1337 (Fed. Cir. 2000) (price realism lacks rational basis only where agency made irrational assumptions or critical miscalculations)
- Information Technology & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir. 2003) (to prove prejudice protestor must show a substantial chance it would have received the award but for the error)
- Motor Vehicle Manufacturers Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard requires a rational connection between facts and agency decision)