MERCOM, INC., Plaintiff, v. UNITED STATES, Defendant.
No. 16-1475C
United States Court of Federal Claims.
March 14, 2017
Reissued: March 17, 2017
LETTOW, Judge.
Id. at 7.
At this time, the court is not convinced that the “quick peek” procedure permitted under the Federal Rules is appropriate. Rather, it is hereby ORDERED that defendant shall, on or by April 17, 2017, review its privilege log and, based on the court‘s September 20, 2016 ruling on plaintiffs’ motion to compel as well as the Federal Circuit‘s ruling on defendant‘s petition for a writ of mandamus, produce any additional documents listed on its privilege log that are either (1) no longer privileged in light of both courts’ rulings or (2) despite being privileged must nevertheless be produced in light of both courts’ rulings. It is further hereby ORDERED that defendant file, on or by April 17, 2017, a status report indicating that it has complied with the court‘s order.
In addition, the court adopts the parties’ jointly proposed briefing schedule:
- Within 45 days of the final resolution of the parties’ discovery disputes, plaintiffs in this and the related cases may file amended complaint(s).
- Defendant will file an omnibus motion to dismiss seeking dismissal of this and all related actions before this court no later than 120 days after the expiration of the period for filing the amended complaint(s).
- Plaintiffs in this case will file their response to defendant‘s omnibus motion to dismiss no later than 90 days following the filing of that motion, and plaintiffs in each of the related cases will be permitted to file their own separate response to defendant‘s motion also within 90 days following the filing of the omnibus motion to dismiss.
- Defendant will file a reply in support of its omnibus motion to dismiss no later than 90 days following the filing of response(s) to the motion in this and the related cases.
Finally, on February 21, 2017, defendant filed a response to the court‘s order regarding the payment of plaintiffs’ expenses. In its response, defendant argues first that an award of expenses is discretionary, pursuant to
IT IS SO ORDERED.
P. Davis Oliver, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. for defendant. With him on the briefs were Joyce R. Branda and Chad A. Readler, Acting Assistant Attorney Generals, Civil Division, and Robert E. Kirschman, Jr., Director, and Elizabeth M. Hosford, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C.
Post-award bid protest; challenge to agency‘s technical rating of protester‘s proposal
OPINION AND ORDER1
LETTOW, Judge.
This post-award bid protest arises from a solicitation by the United States Department of the Navy, Space and Naval Warfare Systems Center Atlantic (“Navy” or “agency“) for commercial, off-the-shelf command and control equipment, software, and hardware licenses and maintenance. The Navy anticipated making multiple awards for indefinite delivery/indefinite quantity (“IDIQ“), firm fixed-price contracts from this solicitation, and ultimately issued 21 contracts. Mercom, Inc. (“Mercom“), an incumbent contractor and offeror on the solicitation, was not among the awardees because its proposal received a rating of “Unacceptable” on a technical sub-factor specified in the solicitation. Mercom initially protested the Navy‘s award decision at the Government Accountability Office (“GAO“), alleging that the agency failed to follow the terms of the solicitation and that the “Unacceptable” rating assigned to Mercom‘s proposal was unreasonable. On October 25, 2016, GAO denied Mercom‘s protest on all grounds. Two weeks later, Mercom filed a bid protest in this court.
Mercom seeks to permanently enjoin the Navy from taking any action with regard to the solicitation until it awards a contract to Mercom or reevaluates Mercom‘s proposal and issues a new best value determination. In its protest, Mercom asserts that the Navy unreasonably assigned an “Unacceptable” rating to the technical support services sub-factor of the solicitation and failed to follow the terms of the solicitation by rolling up the “Unacceptable” sub-factor rating to the proposal as a whole. Pending before the court are the parties’ cross-motions for judgment on the administrative record. A hearing was held on February 17, 2017.
For the reasons stated, the court has concluded that plaintiff‘s motion should be denied and the government‘s motion should be granted.
FACTS2
A. The Agency‘s Mission
The Space and Naval Warfare Systems Center Atlantic, also referred to as “SPA-
B. Solicitation No. N65236-13-R-0016
On January 8, 2015, the agency issued its request for proposals (“RFP“) (solicitation number N65236-13-R-0016) for commercial, off-the-shelf command and control equipment and related services. AR Tab 6.4 The RFP contemplates multiple IDIQ contract awards with a cumulative value not to exceed $750 million. AR 6-152; -177. The contract period contemplated by the solicitation is five years, with a one-year base period and four option years. AR 6-152.
The purpose of the contracts is to “provid[e] Commercial Off-The-Shelf (COTS) equipment to [the Department of Defense] and [f]ederal [c]ivilian [a]gencies that will meet existing and future mission support requirements.” AR 7-258. The solicitation covers commercial, off-the-shelf command and control equipment, as well as software and hardware licenses and maintenance associated with the equipment “not available via mandatory sources.” Id. This includes license and maintenance renewals, warranties, and “associated incidental services.” Id.
The evaluation criteria in Section M of the RFP stated that the agency would conduct a best value analysis and award the contracts based on an assessment of five factors: (A) reseller relationships/agreements, (B) technical capability, (C) past performance, (D) small business participation, and (E) price. See AR 7-286 to -91.5 Factor (A) contained two sub-factors, A1-reseller/purchasing agreements and A2-Original Equipment Manufacturers (OEM) relationships. AR 7-287 to -88. Factor (B) also contained two sub-factors, B1-systems and equipment and B2-technical support services. AR 7-289. The agency told offerors that the non-price evaluation factors were more important than price. AR 7-287. Among the non-price factors and sub-factors, factor (A) was more important than factor (B), sub-factor A2 was more important than sub-factor A1, sub-factor B1 was more important than sub-factor B2, and factors (C) and (D) would be evaluated on an Acceptable/Unacceptable basis. AR 7-287 to -91.
Sub-factor B2 is specifically at issue in Mercom‘s protest. See Pl.‘s Mot. for Judgment Upon the Administrative Record (“Pl.‘s Mot.“) at 1, ECF No. 19. To demonstrate technical capability under factor (B), offerors were required to “identify current contracts which are relevant to the requirements of th[e] [RFP]” and “verify the[ir] specific demonstrated experience in performing the work identified.” AR 8-303. Specifically with regard to sub-factor B2, the offerors needed to demonstrate experience in: (1) “[p]erforming maintenance, overhaul, troubleshooting and repair of system(s) and/or equipment” (sub-
The Navy assessed the offerors’ proposals under factor (B) in two respects: (1) “[d]epth of experience (the frequency in which an offeror has completed same or similar tasks across the range of tasks within the element),” and (2) “[b]readth of experience (the multiplicity or variety of programs and/or projects [where] an offer [or] has completed same or similar tasks and the range of tasks within the element).” AR 7-289. Sub-factors B1 and B2 of the proposals were assigned an adjectival rating of “Outstanding,” “Good,” “Acceptable,” “Marginal,” or “Unacceptable” based on “an overall assessment of strengths, weaknesses, deficiencies, and risk for the entire sub[-]factor.” AR 3-101; 7-289. The ratings generally correspond to the following assessments:
| Color | Rating | Description |
|---|---|---|
| Blue | Outstanding | Proposal meets requirements and indicates an exceptional approach and understanding of the requirements. Strengths far outweigh any weaknesses. Risk of unsuccessful performance is very low. |
| Purple | Good | Proposal meets requirements and indicates a thorough approach and understanding of the requirements. Proposal contains strengths which outweigh any weaknesses. Risk of unsuccessful performance is low. |
| Acceptable | Proposal meets requirements and indicates an adequate approach and understanding of the requirements. Strengths and weaknesses are offsetting or will have little or no impact on contract performance. Risk of unsuccessful performance is no worse than moderate. | |
| Yellow | Marginal | Proposal does not clearly meet requirements and has not demonstrated an adequate approach and understanding of the requirements. The proposal has one or more weaknesses which are not offset by strengths. Risk of unsuccessful performance is high. |
| Unacceptable | Proposal does not meet requirements and contains one or more deficiencies. Proposal is unawardable. |
AR 3-101. Factor (B) was then assigned an adjectival rating on the same scale based on the agency‘s assessment of the two sub-factors. See AR 7-289.
The RFP also instructed offerors that their non-price proposals must be “sufficient to enable evaluators to make a thorough and complete evaluation, and to arrive at a sound determination as to whether the requirements of th[e] solicitation are understood and satisfied.” AR 8-301. To accomplish this goal, offerors were to be “sufficiently specific, detailed, and complete to demonstrate clearly and fully that [they] ha[d] a thorough understanding of the requirements for, and technical problems inherent in, the requirements of the solicitation.” Id. In this respect, the solicitation warned:
A concise and comprehensive proposal is desired. Organization, clarity, accuracy of information, relevance, and completeness are of prime importance. Statements such as “will comply,” or “noted and understood” without supporting narrative to define compliance are not acceptable. Cursory responses or responses which merely reiterate or reformulate solicitation language will not be considered as satisfying the requirements of the RFP or as demonstrating the ability to perform.
Id.
C. Evaluation of Mercom‘s Proposal
The offerors’ proposals were evaluated by a source selection team assembled by the Navy, consisting of the Source Selection Authority (“SSA“), the Source Selection Advisory Council (“SSAC“), and the Source Selection Evaluation Board (“SSEB“), among other procurement officials. AR 2-8. The SSEB evaluated each proposal and prepared a narrative report of its evaluations, the SSAC reviewed the SSEB‘s analysis of each proposal as it developed its comparative reports, and the SSA made the ultimate best-value assessments and source selection decisions. AR 2-8 to -10.
The SSA issued its source selection decision on June 1, 2016, in which Mercom received an overall technical rating of “Unacceptable” for factors (A) and (B). AR 20-1047. In light of this rating, the SSA deemed Mercom ineligible to receive a contract award. See AR 21-1051.
The SSEB specifically evaluated Mercom‘s proposal as follows:
| FACTORS | Factor A Color/Rating | Factor B Technical Capability Color/Rating | Factor C Acceptable/Unacceptable | Factor D Acceptable/Unacceptable |
|---|---|---|---|---|
| A: Reseller Relationships/Agreements | Outstanding | |||
| B: Technical Capability | Unacceptable | |||
| C: Past Performance | Acceptable | |||
| D: Small Business Participation | Acceptable | |||
| Overall Ratings | Outstanding | Unacceptable |
AR 18-772. To arrive at the “Unacceptable” rating for factor (B), the SSEB evaluated sub-factors B1 and B2 as follows:
| TECHNICAL CAPABILITY SUBFACTORS | Adjectival Rating |
|---|---|
| B1 - Systems and Equipment (PWS Para 3.1) | Good |
| B2 - Technical Support Services (PWS Para 3.3) | Unacceptable |
| OVERALL TECHNICAL CAPABILITY RATING | Unacceptable |
AR 18-868. Mercom had submitted ten contract references for factor (B), all of which met the currency and relevancy criteria of the RFP. AR 18-867. In evaluating these references, the SSEB determined that Mercom “failed to demonstrate any technical capability/experience as it pertains to the [s]ub[-f]actor B2 requirements.” AR 18-871.
The SSEB identified two “[s]ignificant [w]eaknesses”6 in Mercom‘s proposal respecting sub-factor B2. AR 18-869 to -71. First, “Mercom failed to document/substantiate a single instance in any of [its] submitted contract references of demonstrating experience in performing maintenance, overhaul, troubleshooting and repair of system(s) and/or equipment” as required by sub-sub-factor B2.1 of the RFP. AR 18-869. The SSEB considered that Mercom‘s proposal “parroted” the requirements of the solicitation and used generalized, conditional language (e.g., “Mercom may provide ...“; “if authorized by the contracting officer ...“) to explain its previous contract work rather than providing a detailed narrative describing the company‘s depth of experience in these regards. Id.
In light of both significant weaknesses, “the SSEB determined that ... Mercom‘s lack of demonstrated experience in performing the relevant technical services required in [s]ub[-]factor B2 resulted in increased risk of unsuccessful contract performance at the delivery order level to an unacceptable level.” AR 18-870 to -71. Therefore, as Mercom did not meet the requirements of the solicitation for sub-factor B2, the SSEB assigned Mercom‘s proposal a rating of “Unacceptable” for the sub-factor. AR 18-867. The SSEB then assigned an overall “Unacceptable” rating to factor (B) because sub-factor B2 was deemed not to meet the requirements of the solicitation. Id. Finally, in accord with the solicitation, the SSEB assigned Mercom‘s proposal an overall technical rating of “Unacceptable” for factors (A) and (B) because the proposal merited an “Unacceptable” rating for a “non-price factor,” i.e., factor (B). AR 18-865. Specifically, Mercom‘s proposal was deemed “Unacceptable” because it “[did] not meet the requirements, [did] not indicate an adequate understanding of the requirements[,] and the risk of unsuccessful performance [was] high.” Id.
In its review of the SSEB‘s analysis, the SSAC upheld the “Unacceptable” technical rating for Mercom‘s proposal. AR 19-1005. The SSAC reiterated that the proposal contained significant weaknesses with regard to sub-factor B2 because Mercom “failed to demonstrate any experience” in technical support services as required by the solicitation. AR 19-1006. The SSAC also noted that Mercom “provided high-level summaries concerning the types of services that [it] provides” and “largely relied upon generalized statements that were repeated for each contract reference,” representing a “material failure to meet the requirements of the solicitation.” Id. In combination, the significant weaknesses of sub-factor B2 of Mercom‘s proposal were deemed to “constitute a deficiency and an ‘Unacceptable’ adjectival rating” for factor (B) overall. Id.7
Relying on the analyses of the SSEB and the SSAC, the SSA ultimately determined in its best value assessment that Mercom “failed to meet the minimum solicitation requirements for Factor B,” rendering the entire proposal “Unacceptable” and ineligible to receive a contract award. AR 20-1048; 21-1051. Mercom timely requested a debriefing from the Navy to ascertain why it was not selected for an award, and the Navy reiterated the analysis of sub-factor B2 from the SSEB and SSAC reports. See AR 23-1069 to -72.
D. Mercom‘s GAO Protest
Mercom timely filed a protest at GAO on July 20, 2016, and filed a supplemental protest on July 22, 2016. AR Tabs 26-27. In its protest, Mercom alleged that the Navy failed to follow the terms of the solicitation for rejecting proposals with “Unacceptable” factor ratings, failed to properly weigh the factors being applied to Mercom‘s proposal in line with the terms of the solicitation, and unreasonably assigned a rating of “Unacceptable” to sub-factor B2. AR 26-1126 to -28; 27-1152 to -58. On October 25, 2016, GAO
E. Mercom‘s Protest in This Court
On November 8, 2016, Mercom filed its protest in this court. See Compl. In its complaint, Mercom asserts four counts regarding the Navy‘s procurement: (1) “the agency unreasonably assigned a rating of unacceptable under sub[-]factor B2” because Mercom‘s proposal demonstrated work it actually performed under the contracts provided, (2) “the agency unreasonably assigned a rating of Unacceptable under sub[-]factor B2” because Mercom‘s proposal demonstrated the depth and breadth of its work as required by the solicitation, (3) “the agency failed to follow the solicitation‘s terms regarding the rejection of proposals for a rating of unacceptable,” and (4) “the agency‘s best value determination was unreasonable.” Compl. ¶¶ 30-59. Contemporaneously with its complaint, Mercom filed an application for a temporary restraining order and a motion for preliminary injunction. Pl.‘s Appl. for TRO and Mot. for Prelim. Inj., ECF No. 4. During a hearing on November 14, 2016, “the parties represented that the government has agreed to voluntarily stay performance on the contract at issue until the resolution of plaintiff‘s protest.” Order of Nov. 14, 2016, ECF No. 14. The court therefore denied the application for a temporary restraining order and the motion for preliminary injunction as moot. Id.
Pursuant to the court‘s scheduling order, the government promptly filed the administrative record, ECF No. 18. The parties’ cross-motions for judgment on the administrative record have been submitted and fully briefed, and were addressed at a hearing.
JURISDICTION
Pursuant to the
STANDARDS FOR DECISION
The Administrative Procedure Act (“APA“), specifically
Notwithstanding this deferential standard, the court may set aside a procurement action if “(1) the procurement official‘s decision lacked a rational basis; or (2) the procurement proce[ss] involved a violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001) (citations omitted). The “agency must examine the relevant data and articulate a satis-
ANALYSIS
A. Technical Evaluation of Sub-Factor B2
Mercom argues that the agency unreasonably assigned an “Unacceptable” rating to sub-factor B2 of its proposal for two reasons. First, Mercom asserts that the ten contract references it provided for sub-factor B2 describe work actually performed by Mercom rather than just its technical approach under these contracts. Pl.‘s Mot. at 12-18. Second, Mercom claims that the portion of its proposal related to sub-factor B2 adequately demonstrated the depth and breadth of its experience in technical support services and satisfied the requirements of the RFP. Id. at 18-23.
In a bid protest, “[t]he evaluation of proposals for their technical excellence or quality is a process that often requires the special expertise of the procurement officials, and thus reviewing courts give greatest deference possible to these determinations.” CRAssociates, Inc. v. United States, 102 Fed. Cl. 698, 717 (2011) (citing E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996); Bannum, Inc. v. United States, 91 Fed. Cl. 160, 174 (2009)) (internal quotation marks omitted), aff‘d, 475 Fed. Appx. 341 (Fed. Cir. 2012). The agency need only show that it reached its final decision as “the result of a process which ‘consider[ed] the relevant factors’ and [wa]s ‘within the bounds of reasoned decisionmaking.‘” JWK Int‘l Corp. v. United States, 52 Fed. Cl. 650, 654 n.8 (2002) (quoting Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 105 (1983)), aff‘d, 56 Fed. Appx. 474 (Fed. Cir. 2003).
The offeror bears “the burden of presenting ‘an adequately written proposal’ that satisfies the requirements of the solicitation.” Westech Int‘l, Inc. v. United States, 79 Fed. Cl. 272, 296 (2007) (quoting United Enter. & Assocs. v. United States, 70 Fed. Cl. 1, 26 (2006)). Here, the Navy‘s assignment of an “Unacceptable” rating to sub-factor B2 of Mercom‘s proposal had a rational basis because Mercom failed to submit satisfactory evidence of qualifying experience related to sub-factor B2. Mercom‘s proposal does not describe its work under the contracts it cited in sufficient detail to enable the agency to reasonably conclude that Mercom performed all of the work stated and had the requisite depth and breadth of experience to be awarded the contract. The contract references provided by Mercom frame the company‘s work pursuant to sub-factor B2 hypothetically, i.e., in terms of work that Mercom could perform rather than work it actually did perform. See, e.g., AR 16-393; -399; -404; -409; -414; -419; -424; -429; -433; -439 (“In accordance with individual Delivery Orders, Mercom may provide incidental equipment support. ...“) (emphasis added). As the SSEB explained, this conditional and hypothetical language describes Mercom‘s “technical approach” rather than substantively explaining the services Mercom actually performed under these past contracts. See AR 18-869. Without an explanation of Mercom‘s past experience, the agency could not evaluate the frequency or “multiplicity or variety of programs and/or projects” performed by Mercom within the scope of sub-factor B2, as required by the RFP. AR 7-289. Thus, it was reasonable to assign Mercom‘s proposal an “Unacceptable” rating with respect to sub-factor B2 because Mercom failed to satisfy the requirements of the solicitation.
B. Assignment of “Unacceptable” Rating to Mercom‘s Full Proposal
Mercom further contends that the agency‘s assignment of an “Unacceptable” rating to Mercom‘s full proposal based on the “Unacceptable” rating for sub-factor B2 was unreasonable because it did not follow the terms of the solicitation. See Pl.‘s Mot. at 24-26. Specifically, Mercom argues that the solicitation stated that a proposal would be rejected for receiving an “Unacceptable” rating for a factor, not just a sub-factor, and that the assignment of an “Unacceptable” rating to factor (B) was unreasonable in light of the “Good” rating assigned to sub-factor B1 and the weighting scheme set forth in the solicitation. Id. at 24-25. Mercom believes that this rating approach amounted to an “automatic rejection” of its proposal without due consideration given to factor (B) as a whole. Id. at 26.
As Mercom notes, “[i]t is a fundamental tenet of procurement law that proposals must be evaluated in accordance with the terms of the solicitation.” Red River Holdings, LLC v. United States, 87 Fed. Cl. 768, 786 (2009) (quoting AshBritt, Inc. v. United States, 87 Fed. Cl. 344, 374 (2009), opinion clarified, 87 Fed. Cl. 654 (2009)). An agency‘s failure to follow the terms of its solicitation in evaluating and selecting offerors is arbitrary and capricious. See Q Integrated Cos. v. United States, 126 Fed. Cl. 124, 142-43 (2016), appeal dismissed, No. 2016-1991, 2016 WL 4363180 (Fed. Cir. June 2, 2016); Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243, 273 (2004) (citing Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004); LaBarge Prod., Inc. v. West, 46 F.3d 1547, 1555 (Fed. Cir. 1995)), opinion modified, 63 Fed. Cl. 141 (2004).
In sum, the Navy‘s decision to assign an “Unacceptable” rating to Mercom‘s factor (B) proposal, and consequently to deem the entire proposal ineligible for a contract award, was supported by the terms of the solicitation and was not arbitrary and capricious.8
CONCLUSION
For the reasons stated, Mercom‘s motion for judgment on the administrative record is DENIED and the government‘s cross-motion for judgment on the administrative record is GRANTED. The clerk is directed to issue final judgment in accord with this disposition.
No costs.
It is so ORDERED.
DAVITA HEALTHCARE PARTNERS, INC., (f/k/a/ Davita Inc., f/k/a Total Renal Care Holdings, Inc., f/k/a Medical Ambulatory Care Delaware, Inc.), and Physicians Dialysis, Inc., and Physicians Dialysis Ventures, Inc., and 175 Dialysis Center Owners (d/b/a 1,462 Dialysis Centers), Plaintiffs, v. The UNITED STATES, Defendant.
No. 11-297C
United States Court of Federal Claims.
Filed: March 17, 2017