Quanterion Solutions, Inc v. United States, 20-1266

Background

DoD issued RFP FA 8075-20-R-0001 to consolidate three incumbent IAC Basic Centers of Operations (DSIAC, HDIAC, CSIAC) into one six-year single-award ID/IQ contract; CLINs 0001–0003 cover 90-day phase-in transitions for each legacy BCO and CLIN 0004 covers base-period operations.
Only two offerors submitted: incumbent SURVICE (DSIAC) and incumbent QSI (HDIAC & CSIAC). Evaluation factors: past performance, technical capability (with a transition subfactor rated acceptable/unacceptable), and cost/price; technical and past performance were most important.
SURVICE proposed transition CLINs that allocated only preparatory costs (mobilize, train, prepare); QSI allocated both preparatory and operational IAC costs during the 90‑day phase‑in, producing much higher transition CLIN prices.
The Agency rated both transition plans acceptable, found SURVICE’s overall proposal higher-rated and lower-priced, and awarded the contract to SURVICE without discussions; QSI protested to GAO (denied) and then to the Court of Federal Claims.
QSI alleged the Agency misinterpreted the RFP by allowing SURVICE to omit operational costs from the transition CLINs, and also challenged a mathematical error in the Agency’s IGCE (understated total transition IGCE in a spreadsheet).
The court denied the government’s dismissal motion as moot, reviewed the administrative record under the arbitrary-and-capricious standard, and entered judgment for the government and SURVICE, denying QSI injunctive relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the RFP required transition CLINs (0001–0003) to include full operational IAC costs during the 90‑day phase‑in	QSI: L5.2 and other language required pricing the initial 90 days of services in transition CLINs, i.e., include operational costs	Agency/SURVICE: RFP focuses on mobilization/preparation; agency explicitly left allocation to offeror business decision; CLINs intended for transition-in efforts	Court: RFP does not require transition CLINs to include operational IAC costs; SURVICE’s approach was permissible and its “acceptable” rating lawful
Whether any RFP ambiguity as to cost allocation was patent and thus waived by QSI	QSI: RFP ambiguous but not apparent pre‑proposal; challenge timely post‑award	Agency: Ambiguity (if any) was patent—offerors asked questions during draft and Q&A—so QSI had duty to seek clarification and waived post‑award challenge	Court: Any ambiguity was patent (questions in draft and Q&A); QSI’s failure to seek clarification bars its claim
Whether a mathematical error in the IGCE (incorrect transition subtotal) invalidated the cost realism analysis or prejudiced QSI	QSI: Agency used erroneous IGCE subtotal (~$303k) instead of correct (~$795k), undermining cost realism and prejudicing award	Agency/SURVICE: Error was minor; cost realism analysis examined specific cost elements, staffing, rates; transition CLINs small portion of total; no prejudice	Court: Mathematical error immaterial; agency’s cost analysis satisfied RFP/FAR requirements; no prejudice to QSI
Whether defendant’s RCFC 12(b)(6) dismissal should be granted on waiver grounds	Defendant: QSI proffered an interpretation contrary to clear RFP and thus waived challenge	QSI: Did not waive; ambiguity not apparent pre‑proposal	Court: Denied dismissal as moot; resolved merits on administrative record instead

Key Cases Cited

Banknote Corp. of Am. v. United States, 365 F.3d 1345 (Fed. Cir. 2004) (standard for setting aside agency procurement action under 5 U.S.C. § 706(2)(A))
Centech Grp., Inc. v. United States, 554 F.3d 1029 (Fed. Cir. 2009) (two-part arbitrary-and-capricious review and protestor burdens)
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (deference to procurement officials' discretion)
Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (Fed. Cir. 2000) (highly deferential review of agency procurement decisions)
E.W. Bliss Co. v. United States, 77 F.3d 445 (Fed. Cir. 1996) (deference to technical ratings)
Grumman Data Sys. Corp. v. Widnall, 15 F.3d 1044 (Fed. Cir. 1994) (avoid overturning awards for de minimis errors)
Stratos Mobile Networks USA, LLC v. United States, 213 F.3d 1375 (Fed. Cir. 2000) (patent ambiguity rule; duty to seek clarification)
Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (party who fails to object to patent solicitation defect waives later challenge)