Strategic Business Solutions, Inc. v. United States
711 F. App'x 651
Fed. Cir.2018Background
- The Defense Intelligence Agency (DIA) issued Solicitation HHM402-14-R-0005 for a follow-on financial management program; Amendment 04 clarified required redactions (e.g., company/personnel names and incumbent status).
- The Solicitation warned that offers failing to furnish required information could be excluded and stated the government may waive informalities or minor irregularities.
- Strategic Business Solutions, Inc. (SBSI) submitted a timely proposal but failed to redact required information in over 100 places; 15 omissions were intentional and the record supports that some omissions were deliberate to gain advantage.
- A DIA evaluator alerted the contracting officer (CO); the CO rejected SBSI’s proposal as unacceptable for failure to comply with redaction requirements.
- SBSI protested to GAO (denied), sought review which was transferred to the Court of Federal Claims; that court granted judgment for the government. SBSI appealed to the Federal Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CO was required to waive redaction deficiencies as mere informalities | SBSI: CO had to waive or allow correction of "informalities and minor irregularities" (reading "may" as "must") | Government: Solicitation used permissive "may"; CO had discretion not to waive material, deliberate nonconformance | Court: CO acted within discretion; refusal to waive was reasonable and not arbitrary |
| Whether rejection was arbitrary, capricious, or unlawful | SBSI: Rejection was improper given permissive waiver clause | Government: Rejection was lawful given deliberate failures and solicitation terms | Court: Agency decision survived arbitrary-and-capricious review; affirmed |
| Whether SBSI’s omissions were mere minor irregularities | SBSI: Many omissions were inadvertent/minor | Government: Record shows numerous and some intentional failures designed to advantage SBSI | Court: Finding that some failures were deliberate is not clearly erroneous; supports rejection |
| Whether procurement process violated statute/regulation | SBSI: CO abused discretion under procurement standards | Government: Process followed FAR terms and solicitation provisions; CO discretion honored | Court: No clear/provable violation; agency entitled to deference |
Key Cases Cited
- Glenn Def. Marine (Asia), PTE Ltd. v. United States, 720 F.3d 901 (Fed. Cir.) (standard of review in bid protests: arbitrary, capricious, abuse of discretion)
- Orion Tech., Inc. v. United States, 704 F.3d 1344 (Fed. Cir.) (procurement decisions receive high degree of agency deference)
- Croman Corp. v. United States, 724 F.3d 1357 (Fed. Cir.) (procurement decisions may be set aside if lacking a rational basis or involving prejudicial violation)