Professional Service Industries, Inc. v. United States
129 Fed. Cl. 190
| Fed. Cl. | 2016Background
- FHWA issued a solicitation for laboratory support services at TFHRC; the Program Manager (PM) was designated key personnel with specified duties and minimum management experience requirements.
- Two offerors responded: incumbent PSI and Genex. The Technical Evaluation Team (TET) rated both proposals "satisfactory" but identified Genex’s proposed PM as lacking required management experience.
- FHWA awarded the contract to Genex after concluding its mitigation (corporate support, mentoring) reduced risk; PSI protested to GAO, which sustained PSI’s protest, finding Genex’s proposed PM did not meet the solicitation’s minimum qualifications.
- In response to GAO, FHWA terminated Genex’s award and issued Amendment 002, materially reducing PM duties and watering down experience requirements (and adding a 15-hour on-site minimum), then solicited revised proposals under the amended criteria.
- PSI filed suit in the Court of Federal Claims seeking to enjoin use of Amendment 002 and to require re-evaluation under the original solicitation; the court reviewed cross-motions on the administrative record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSI has standing | PSI (interested party) had a substantial chance to win absent the flawed corrective action | FHWA argued the corrective action followed GAO and so no prejudice | Held: PSI has standing; corrective action caused non-trivial competitive injury |
| Whether FHWA’s amendment was a reasonable corrective action | Amendment 002 was overbroad and not narrowly targeted to GAO’s finding; FHWA should have re-evaluated under original criteria | FHWA/Genex: GAO permitted either re-evaluation or amendment; agency acted within discretion and followed GAO’s option to amend | Held: FHWA’s amendment was arbitrary and capricious because the record lacks a rational basis for changing PM duties/qualifications and does not show the agency assessed needs |
| Whether the record supports FHWA’s rationale for changing PM duties/qualifications | PSI: record contains no contemporaneous needs analysis and changes mirror Genex’s proposal, suggesting impermissible tailoring | Govt: TET and source selection panel had concluded a less-experienced PM could meet needs with mitigation; following GAO was proper | Held: Court rejects govt’s inference; record shows no reasoned explanation and changes align with Genex’s proposal, so amendment set aside |
| Prejudice and remedy | PSI: will suffer irreparable harm by being forced to re-compete and lose the advantage from GAO’s finding | Govt: public interest and potential cost savings weigh against injunction | Held: PSI showed prejudice; permanent injunction issued prohibiting re-solicitation/evaluation under Amendment 002; court did not order re-evaluation but left agency free to document/reconsider its needs |
Key Cases Cited
- Res. Conservation Grp., LLC v. United States, 597 F.3d 1238 (Fed. Cir. 2010) (procurement includes all acquisition stages and informs jurisdiction/standing analysis)
- Systems Application & Technologies, Inc. v. United States, 691 F.3d 1374 (Fed. Cir. 2012) (agency has broad discretion to take corrective action but re-competing can cause competitive injury)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) (standing requires competitive injury/prejudice)
- Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir. 2003) (post-award protest standing requires substantial chance of award but for error)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency must examine relevant data and provide reasoned explanation for actions)
- Centech Grp., Inc. v. United States, 554 F.3d 1029 (Fed. Cir. 2009) (following GAO recommendations is proper unless GAO decision itself is irrational)