VETERANS EVALUATION SERVICES, INC. v. United States
1:17-cv-00083
Fed. Cl.Jul 12, 2017Background
- The VA issued an RFP for IDIQ contracts to provide medical disability examinations across seven districts; awards would be made on a best-value tradeoff (non-price factors > price).
- After initial awards (March 2016) to VES, VetFed, and QTC, GAO sustained protests in part, finding the VA’s original price evaluation unreasonable and its benchmark methodology impermissibly changed during the process. VA issued Amendment 8, adopted a sample task order for price evaluation, and allowed limited proposal revisions.
- Offerors (including QTC and VES) submitted revised proposals, the VA conducted discussions and final proposal revisions, then made new awards. QTC and VES filed post-award bid protests in the Court of Federal Claims.
- Plaintiffs raised multiple challenges: misleading/unequal discussions about price; improper inclusion of high/non-competitive prices in benchmark calculations; unlawful awards to LHI and MSLA despite their common parent (alleged OCI/violation of the RFP); price evaluation limited to base year; and failure to document best-value determinations.
- The government moved to strike a litigation-created declaration and calculations submitted by QTC. The Court struck those materials, found several plaintiff claims untimely/waived, rejected the remaining merits challenges, and denied injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Benchmark methodology (use of all offeror prices / median effects) | Plaintiffs: VA’s benchmark unreasonably included high/non-competitive prices, skewing price reasonableness. | Gov: VA disclosed methodology before final revisions; plaintiffs waived challenge by not protesting then. | Waived/untimely — plaintiffs knew methodology before final proposals and failed to protest. |
| Misleading or unequal discussions about price (including bridge-contract talk) | Plaintiffs: VA’s discussions were misleading and deprived them of meaningful discussions (including suggesting bridge contract), causing prejudice. | Gov: Discussions concerned potential improper technical changes and simply sought confirmation; offerors were told to submit final revisions; no prejudice shown. | Waived/untimely and unsubstantiated on the merits; no shown prejudice. |
| Use of sample task order limited to base year (VES challenge) | VES: RFP required evaluating base and option years; use of base-year-only sample task order was improper. | Gov: Amendment 8 expressly defined use of a sample task order considering base-year pricing; any ambiguity should have been timely protested. | Waived/untimely; amendment controlled and VES failed to timely protest. |
| Awards to LHI and MSLA / alleged OCI | Plaintiffs: Same-district awards to affiliated entities violated the RFP and created an unmitigated OCI. | Gov: RFP did not prohibit awards to affiliated entities; VA investigated and mitigated any OCI and found distinct provider/IT networks; award furthers VA’s goals. | Rejected — awards did not violate RFP and any OCI was addressed reasonably. |
| Supplementation of the administrative record (Cullum declaration) | QTC: proffered declaration/calculations to explain/evaluate price issues. | Gov: Proffered materials were created for litigation, post-hoc, and unnecessary for APA review. | Struck — supplementation unwarranted under Axiom; materials were post-hoc. |
Key Cases Cited
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed. Cir. 2009) (limits on supplementing the administrative record)
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (untimeliness/waiver when solicitation errors are not protested before close of bidding)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (standard for arbitrary and capricious review)
- Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345 (Fed. Cir. 2004) (distinguishing APA review and burdens in procurement challenges)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir. 2004) (factors for injunctive relief in procurement cases)
- Honeywell, Inc. v. United States, 870 F.2d 644 (Fed. Cir. 1989) (deference to agency decisions when a reasonable basis exists)