Multimax, Inc. v. Federal Aviation Administration
231 F.3d 882 | D.C. Cir. | 2000
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 11, 2000 Decided November 21, 2000
No. 99-1515
Multimax, Inc.,
Petitioner
v.
Federal Aviation Administration,
Respondent
Informatica of America, Inc.,
Intervenor
On Petition for Review of an Order of the
Federal Aviation Administration
Katherine S. Nucci argued the cause for petitioner. With
her on the briefs was Timothy Sullivan.
Daniel L. Kaplan, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
David W. Ogden, Acting Assistant Attorney General, Mark B.
Stern, Attorney, and Wilma A. Lewis, U.S. Attorney. Wil- liam G. Kanter, Deputy Director, U.S. Department of Jus- tice, entered an appearance.
Patricia H. Wittie was on the brief for intervenor Informa- tica of America, Inc.
Before: Edwards, Chief Judge, Rogers, Circuit Judge and
Silberman, Senior Circuit Judge.*
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: The Federal Aviation Administra- tion ("FAA") awarded a contract to Multimax, Inc. ("Multi- max"), but reversed its decision after an unsuccessful bidder,
Informatica of America, Inc. ("Informatica"), protested the
award to FAA's Office of Dispute Resolution for Acquisition
("ODRA"). ODRA found the contract award to Multimax to
be "without a rational basis and contrary to the [required
procurement] evaluation criteria." The FAA Administrator
issued a final order adopting ODRA's findings and recommen- dations to terminate Multimax's contract and hire Informatica
to complete the contract. On appeal, Multimax contends that
ODRA applied the wrong standard of review, that its key
findings of fact are unsupported by substantial evidence, and
that its disregard of evidence was arbitrary and capricious,
resulting in an abuse of discretion and a decision contrary to
law. We deny the petition for review.
I.
On May 11, 1999, the FAA announced a solicitation for bids
on a contract to provide information technology support ser- vices at the William J. Hughes Technical Center (the "Cen- ter"), a New Jersey facility for research, development, and
testing of aviation programs.1 The solicitation informed pro- __________
* Senior Judge Silberman was in regular active service at the
time of oral argument.
1 The FAA's Acquisition Management System was developed in
response to Congress' directive "notwithstanding the provisions of
Federal acquisition law," to provide for more timely and cost- effective acquisitions of equipment and materials. 49 U.S.C.
s 40110(d) (West, WESTLAW through P.L. 106-274, approved
Sept. 22, 2000). ODRA is a review body that was created pursuant
spective bidders that their proposals would be subjected to a
"best value" evaluation-a type of bidding process in which
"combined technical criteria are more important than price."
Thus, the solicitation stated that "the successful offeror may
not necessarily be the [one providing the] lowest priced
offer," but also advised that "[p]rice may become more impor- tant as the difference between competing technical scores
decrease[s]."
At the Center, a five-member Technical Evaluation Team
(the "TET"), chaired by Dennis Steelman, evaluated the
contract proposals. After the TET eliminated non- competitive proposals, four offerors remained, including In- formatica and Multimax. The TET considered and ranked
the proposals according to five factors: (1) Management
Plan/Technical Approach; (2) Key Personnel; (3) Oral Pre- sentation; (4) Staffing Plan; and (5) Past Performance. The
offerors were also required to submit a price proposal, sepa- rately from their technical proposal, about which the TET
was not supposed to learn or take into account until its
technical report was completed. By late August 1999, the
TET had reached a consensus that Informatica had provided
the "technically superior offer," and recommended that Infor- matica be awarded the contract. Informatica had scored
about three and a half points higher than its closest competi- tor on TET's combined evaluation, and its proposal was the
only one ranked "excellent" (the other three fell into the
"good" range).
The TET reported to the Integrated Products Team (the
"IPT"), which consisted of Dennis Steelman and Anne Marie
Ternay. The IPT was responsible for completing a Technical
Evaluation Report and an Award Recommendation and De- termination. On Friday, August 27, 1999, Steelman submit- ted an initial version of the Technical Evaluation Report to
the appropriate FAA contracting official, Michael Ward.
This report recommended awarding the contract to Informati- ca, based on its clear technical superiority. The same day,
__________ to this mandate, and it handles protests and contract disputes that
arise under the Acquisition Management System. See 14 C.F.R.
part 17 (2000).
Steelman learned price information for the four finalists.
The following Tuesday, August 31, 1999, Ternay notified
Steelman that the Factor 5 scoring had been completed
incorrectly, because Informatica had been judged on the past
performance of its subcontractor.2
The next day, September 1, 1999, the TET was reconvened,
and its members agreed that a Factor 5 scoring error had
been made. Informatica was given the opportunity to submit
additional past performance references. However, the TET
found these references lacking, and Informatica's score on
Factor Five was reduced considerably, from average to poor.
After the Factor 5 rescoring, on September 3, 1999, the TET
characterized Informatica as the "marginally technically supe- rior offeror." Informatica's edge over its closest competitor
had dropped from three and a half to two points, although its
proposal was still the only one that had won an "excellent"
rating.
However, the revised Technical Evaluation Report complet- ed by the IPT after the Factor 5 rescoring did not reflect the
TET's consensus that Informatica still possessed a measura- ble and meaningful technical edge over its competitors. In- stead, this report stated that "the overall technical ratings of
each proposal are too close to identify the superior offeror,
that each is capable of providing the services called for ...
and for the purposes of this technical evaluation each is the
equal of the other." The final Award Recommendation and
Determination, prepared by Steelman, Ternay, and Ward,
awarded the contract to Multimax. It stated that "there is
insufficient demonstrated technical superiority on the part of
Informatica to justify the additional expense of awarding the
IT contract to that offeror. Over the life of the contract,
Informatica would cost almost a million dollars more than
Multimax. [$23,926,570.40 for [Informatica]; $22,960,852.00
__________
2 As noted subsequently by ODRA, potential offerors and con- tracting officials at the Center demonstrated some confusion about
whether Factor 5 was confined to evaluation of performance as a
general contractor only.
for Multimax....]" A contract with Multimax was executed
on September 15, 1999.
Informatica filed a protest with ODRA on September 28,
1999, charging that the Center had departed from the evalua- tion criteria set forth in the Screening Information Request,
and in subsequent materials stating that its proposals would
have "looked very different" if it had understood price would
be given a central role in the selection decision. Multimax
intervened, and after receiving the parties' comments and
responses, ODRA issued its findings and recommendations.
ODRA's report suggested that the IPT allowed concerns
about price to corrupt the evaluation process. ODRA deter- mined that "the Center improperly 'departed' from the Solici- tation's evaluation criteria, abandoning the 'best value'
scheme and effectively making an award to the lowest
price/technically acceptable offeror." Additionally, the ODRA
report stated,
without a rational basis, [Steelman] re-worded the [TET]
report, systematically eradicating the previous conclusion
that [Informatica's] proposal was technically superior to
that of Multimax. The ODRA concludes that Mr. Steel-
man's actions, which were taken 'with the result [of
awarding the contract to Multimax] in mind,' leveled the
technical field completely (at least on paper), allowing
low price to determine the award decision.
ODRA bolstered its conclusions by referring to an email
message that was sent from Ternay to Steelman on Septem- ber 8, 1999, after the Factor 5 rescoring that narrowed
Informatica's edge over its competitors. This message in- cluded a draft award recommendation that stated, in part,
"given the solicitation's emphasis on technical superiority over
price, the qualitative differences between the two companies
fully justifies [sic] paying a 4% premium for Informatica over
Multimax." Based on this email message, ODRA drew the
inference that on September 8 Ternay believed that even
though Informatica's margin of technical superiority over its
competitors had shrunk, Informatica still provided the best
value. However, draft documents that Steelman transmitted
to Ternay, Ward, and other officials at the Center on Septem- ber 8 characterized the offerors as equally capable and rec- ommended awarding the contract to Multimax. ODRA inter- preted the events of September 8 as evidence of a dramatic
difference in viewpoint between Steelman and Ternay on that
date. Thus, ODRA considered Steelman's drafts expressing
a preference for Multimax to be a "total about-face" from the
judgment of Ternay that was unduly influenced by price
information.
In view of its findings, ODRA recommended that the
contract with Multimax be terminated, and remaining parts of
the contract be awarded to Informatica. ODRA's report
stated that "it is clear that [Informatica] should have been
awarded the contract, had the Solicitation's evaluation criteria
been followed, and there is nothing that would render imprac- ticable an [Informatica] takeover at this stage." The FAA
Administrator adopted ODRA's findings and recommenda- tions, and Multimax challenges the Administrator's order,
requesting that it be vacated with instructions to terminate
the contract with Informatica and to execute a new contract
with Multimax.
II.
On appeal, Multimax challenges the FAA's Order in three
respects. First, Multimax contends that ODRA impermissi- bly substituted its judgment for that of the Center's person- nel by relying on inferences from an incomplete review of the
evolving evaluation and source selection process, rather than
considering the reasonableness of the Center's final evalua- tion and award decisions. Second, Multimax contends that
ODRA erred as a matter of law in concluding that the
Center's award decision was contrary to the "best value"
criteria based on an inference drawn from the events of one
day, September 8, 1999. Third, Multimax contends that
ODRA's key findings are unsupported by substantial evi- dence. Multimax asserts that ODRA ignored Steelman's
sworn testimony and documentary evidence available in dis- covery materials provided to ODRA to which that testimony
referred, namely that the so-called critical "Price/Technical
Trade-off" section in the September 8 version of the award
recommendation document was created before the Factor 5
rescoring.
Our review is confined to determining whether the FAA's
order adopting the ODRA's findings and recommendations is
arbitrary or capricious or contrary to law. See 5 U.S.C.
s 706(2)(A). Thus, as the court recently stated in J.A. Jones
Management Services v. FAA, 225 F.3d 761 (D.C. Cir. 2000),
"[u]nder this standard, [the court] 'may reverse only if the
agency's decision is not supported by substantial evidence, or
the agency has made a clear error in judgment.' " Jones, 225
F.3d at 764 (quoting Kisser v. Cisneros, 14 F.3d 615, 619
(D.C. Cir. 1994)); see also 49 U.S.C.A. s 46110(c) (West
1997). The court's scrutiny is highly deferential because the
court is reviewing an agency procurement decision that impli- cates the agency's technical expertise. "Where a procure- ment decision requires an agency to assess an offeror's
qualifications to perform a contract, our review is 'especially
deferential.' See Iceland S.S. Co., Ltd.-Eimskip v. United
States Dept. of the Army, 201 F.3d 451, 461 (D.C. Cir. 2000).
[The court is] particularly reluctant to second-guess agency
decisionmaking on these " 'delicate questions.' " Elcon En- ters., Inc. v. Washington Metro. Area Transit Auth., 977 F.2d
1472, 1479 (D.C. Cir. 1992) (quoting Delta Data Sys. Corp. v.
Webster, 744 F.2d 197, 203 (D.C. Cir. 1984))." Jones, 225 F.3d
at 765.
Thus, Multimax's contention that ODRA applied the wrong
standard of review is misplaced. To the extent that ODRA
was required to apply an arbitrary and capricious standard of
review, ODRA met this requirement. Because ODRA deter- mined that the IPT had impermissibly deviated from a "best
value" evaluation scheme, it was not unreasonable for ODRA
to recommend that Informatica's protest be sustained. Given
our highly deferential scrutiny, we conclude, in the absence of
evidence that ODRA's decision process "involved a clear and
prejudicial violation of applicable statutes or regulations,"
that ODRA's findings and recommendations are consistent
with arbitrary and capricious review. Elcon Enters., 977
F.2d at 1478 (quoting Kentron Hawaii, Ltd. v. Warner, 480
F.2d 1166, 1169 (D.C. Cir. 1973) (internal quotation marks
omitted)); see also Kisser, 14 F.3d at 618.
Similarly, Multimax fails to demonstrate that ODRA erred
by substituting its technical judgment for the Center's assess- ment of price and technical tradeoffs, instead of simply check- ing to see that the Center's final procurement decision was
rational. ODRA's report focused on the integrity of the
procurement process, and correctly scrutinized the actions of
the Center's officials to determine whether they adhered to a
"best value" evaluation. Furthermore, the regulations that
govern ODRA afford it broad discretion to choose an appro- priate remedy for a successful protest. See 14 C.F.R. s 17.21
(2000).
Multimax's contention that ODRA's findings are not sup- ported by substantial evidence also fails. Substantial evi- dence is defined as "more than a 'scintilla,' but less than a
preponderance of the evidence." Evans Fin. Corp. v. Di- rector, Office of Workers Compensation Programs, 161 F.3d
30, 34 (D.C. Cir. 1998) (citations and internal quotation marks
omitted). Again, Jones provides useful guidance. "[T]he
question [the court] face[s] is 'not whether [petitioner's] view
of the facts supports its version of what happened, but rather
whether the [agency's] interpretation of the facts is reason- ably defensible.' Harter Tomato Prods. Co. v. NLRB, 133
F.3d 934, 938 (D.C. Cir. 1998) (internal quotation marks
omitted)." Jones, 225 F.3d at 765.
Multimax relies heavily on a document that is not in the
administrative record to dispute ODRA's conclusions about
the email messages that Ternay and Steelman sent on Sep- tember 8, 1999. Multimax attempts to call our attention to
this new evidence to prop up its contention that ODRA
mistakenly inferred that on this date disagreement about the
merits of the offerors' proposals existed between Ternay and
Steelman, and mistakenly concluded that Steelman's Septem- ber 8 drafts should be characterized as a dramatic "about- face." It would, however, be fundamentally inappropriate for
the court to consider this new evidence. Although this evi- dence was made available to Multimax during discovery, it
was not made part of the administrative record, and hence
ODRA had no opportunity to rule on it. Multimax was a
party to the ODRA adjudication, received during discovery
the document that it now uses to dispute ODRA's findings,
and is unable to provide any excuse for its failure to bring the
document to ODRA's attention. "The burden of uncovering
and pointing to the facts relevant to the case before the
agency [belongs to] the parties most concerned in the matter
... Our role is to review the agency's handling of the
objections put before it, not to provide a forum for new
arguments based upon different facts that the petitioner could
have but did not bring out below." Sprint Communications
Co., L.P. v. FCC, 76 F.3d 1221, 1227-28 (D.C. Cir. 1996).
In view of the record before it, ODRA's inference that the
language in Ternay's September 8 email message supported
the conclusion that the Technical Evaluation Report departed
from the principles of "best value" proposal evaluation was
reasonable. Furthermore, even if that particular inference
about the events of September 8 could be considered dubious,
ODRA's decision remains supported by substantial evidence.
Even if there was no disagreement between Ternay and
Steelman on September 8, there is still evidence to support
the conclusion that the IPT deviated from the principles of
"best value" assessment. Contrary to Multimax's contention,
ODRA's findings are not solely based on its interpretation of
the email messages sent by the IPT on September 8. Rath- er, the bulk of ODRA's findings and the core elements of its
recommendations are supported by at least three other con- siderations.
First, ODRA noted the dichotomy between the consensus
the TET reached, that Informatica's proposal was measurably
superior to the other offerors' proposals, and the conclusion
the IPT presented in the final Technical Evaluation Report,
that each offeror was equally "capable." The use of the term
"capable" is strongly indicative of a "lowest priced/technically
acceptable" evaluation rather than a "best value" analysis.
Second, ODRA pointed to Steelman's admission that he had
drafted the final TET report, which was supposed to present
an objective perspective on the technical merits of the propos-
als, with the particular result of awarding the contract to
Multimax in mind. Third, ODRA was influenced by the way
that Steelman revised the Technical Evaluation Report and
the Award Recommendation and Determination after he
learned about the prices of the proposals, making Informati- ca's strengths seem less significant and making Multimax's
weaknesses appear less problematic. These three factors
serve as substantial evidence to support ODRA's conclusion
that the IPT abandoned the "best value" analysis to which it
was required to adhere. Thus, any mistaken inference that
ODRA may have made does not require reversal. See Jones,
225 F.3d at 764, citing 5 U.S.C. s 706.
Accordingly, we deny the petition for review.