Precision Asset Management Corp. v. United States
16-261
| Fed. Cl. | Dec 13, 2017Background
- HUD issued Solicitation DU204SA-13-R-0005 for asset management services; Area 3A (Illinois) was at issue. Evaluation: technical pass/fail, then best value comparing past performance and price of technically acceptable offers.
- Precision submitted proposals and was initially rated Technically Acceptable but received a Neutral/Unknown Confidence past-performance rating for Area 3A due to concerns about relevancy, magnitude of prior efforts, and lack of a teaming partner; Precision was invited to submit a final proposal in written discussions.
- Alpine-First Preston JV II submitted a proposal identifying past performance performed by HomeTelos (an affiliate of First Preston). The TEP upgraded Alpine’s past-performance rating to Excellent/High Confidence based on HomeTelos’s performance; the SSA relied on mentor/partner support and awarded the contract to Alpine despite a higher price.
- Precision protested, arguing HUD failed to conduct meaningful discussions about significant weaknesses in Precision’s proposal, mis-evaluated Precision’s past performance, and improperly credited Alpine by attributing HomeTelos’s performance to Alpine (mistakenly treating HomeTelos as a JV partner or mentor).
- The Court found HUD violated FAR 15.306(d)(3) by failing to engage in meaningful discussions with Precision regarding significant weaknesses (risk of nonperformance) and also concluded HUD irrationally evaluated Alpine by relying on a mistaken view of HomeTelos’s role; Precision was prejudiced.
- Remedy: Judgment for Precision; award set aside after current option year (through May 31, 2018). HUD must either reopen procurement with meaningful discussions and allow Precision to revise, or resolicit. Precision awarded bid-preparation costs; parties to propose redactions and bear own litigation costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HUD engaged in meaningful discussions under FAR 15.306(d)(3) | Precision: HUD failed to disclose and discuss significant weakness(s) (inability to handle scope/quantities, lack of teaming partner, relevance problems) so Precision could not amend proposal. | U.S.: No significant weaknesses or deficiencies existed; a Neutral/Unknown rating is not unfavorable and did not require discussion. | Court: HUD failed to conduct meaningful discussions; the TEP’s concerns amounted to a significant weakness and HUD should have disclosed it. |
| Whether Precision was prejudiced by lack of meaningful discussions | Precision: Would likely have a substantial (non-insubstantial) chance to improve rating/compete if given meaningful discussions and chance to revise. | U.S.: Even with correction, Precision could not overcome competitors (price and past performance). | Court: Prejudice established—meaningful discussions could have led to significant revisions making Precision competitive; award may have changed. |
| Whether HUD properly attributed HomeTelos’s past performance to Alpine | Precision: Alpine’s rating improperly rested solely on HomeTelos, which was neither a JV partner nor the mentor or disclosed subcontractor, so attributing those efforts was irrational. | U.S.: Agency reasonably relied on proposal showing HomeTelos resources/personnel/address and key personnel connections to attribute past performance. | Court: Award irrational—TEP/SSA mischaracterized HomeTelos as JV partner/mentor; reliance on HomeTelos was unsupported and the evaluation was improper. |
| Appropriate remedy for procurement errors | Precision: Seek declaratory relief, reopen procurement, meaningful discussions, resubmissions, reevaluation, and termination if necessary. | U.S.: Defend award; argue no relief warranted. | Court: Permanent injunctive relief granted—award set aside after current option year; HUD must reopen discussions and allow revisions or resolicit; Precision awarded bid-prep costs. |
Key Cases Cited
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir.) (two-step bid protest review framework)
- Glenn Defense Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901 (Fed. Cir.) (APA standard governs procurement review)
- Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365 (Fed. Cir.) (prejudice standard: substantial chance of award)
- Statistica, Inc. v. Christopher, 102 F.3d 1577 (Fed. Cir.) (prejudice standard explanation)
- Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (Fed. Cir.) (highly deferential review to contracting officers)
- Bowman Transportation, Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281 (U.S.) (scope of arbitrary-and-capricious review)
- Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (U.S.) (agency action review principles)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir.) (factors for permanent injunction)
- Information Technology & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir.) (definition of substantial chance of award)
- Impresa Construzioni Geom. Domenici Garufi v. United States, 238 F.3d 1324 (Fed. Cir.) (clear and prejudicial regulatory violation required for relief)