Bcpeabody Construction Services, Inc. v. United States

In the United States Court of Federal Claims

No. 13-378C

(Filed Under Seal: September 17, 2013)

(Reissued: September 25, 2013)

**********************************

)

BCPEABODY CONSTRUCTION )

SERVICES, INC., ) Post-award bid protest; best-value

) negotiated procurement conducted

Plaintiff, ) under FAR Part 15; a procurement

) official’s discretion to seek clarification

v. ) of minor or clerical errors in offers;

) FAR § 15.306(a)(2); abuse of discretion

UNITED STATES, )

)

Defendant, )

)

and )

)

EDENS CONSTRUCTION CO., INC., )

)

Defendant-Intervenor. )

)

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James E. Krause, Jacksonville, Florida, for plaintiff.

Elizabeth Anne Speck, Trial Attorney, Commercial Litigation Branch, Civil Division,

United States Department of Justice, Washington, D.C., for defendant. With her on the briefs

were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and

Kenneth M. Dintzer, Assistant Director, Commercial Litigation Branch, Civil Division, United

States Department of Justice, Washington, D.C. Of counsel was Carolyn J. Fox, Assistant

District Counsel, United States Army Corps of Engineers, Jacksonville, Florida.

William L. Bruckner, San Diego, California for defendant-intervenor.

OPINION AND ORDER 1

1

Because this opinion and order might have contained confidential or proprietary

information within the meaning of Rule 26(c)(1)(G) of the Rules of the Court of Federal Claims

(“RCFC”) and the protective order entered in this case, it was initially filed under seal. The

parties were requested to review this decision and provide proposed redactions of any

confidential or proprietary information. The resulting redactions are marked by asterisks

enclosed by brackets, e.g., “[***].”

LETTOW, Judge.

This post-award bid protest concerns a contract awarded by the Department of the Army,

United States Army Corps of Engineers, Jacksonville District (“the Corps” or “the government”),

for construction of a cutoff wall through abandoned culverts, placement of a drainage blanket, re-

pavement of a dike crown, and completion of other ancillary work in Okeechobee County,

Florida. The project was a small-business set aside, conducted as a competitive negotiated

procurement subject to the Federal Acquisition Regulations (“FAR”), 48 C.F.R. Part 15. The

contract was awarded to defendant-intervenor Edens Construction Co., Inc. (“Edens”).

BCPeabody Construction Services, Inc. (“BCPeabody”), a bidder for the contract, protests the

award. On June 21, 2013, the court granted plaintiff’s motion for preliminary injunction, barring

the government from proceeding with the award made to Edens. See BCPeabody Constr. Servs.,

Inc. v. United States, No. 13-378C, 2013 WL 3225844 (Fed. Cl. June 21, 2013). Immediately

thereafter, the court adopted an accelerated schedule of proceedings for resolution of this case.

Now pending before the court are the government’s motion for judgment on the administrative

record (“Def.’s Mot.”), ECF No. 37, Edens’s corresponding motion for judgment on the

administrative record, ECF No. 38, BCPeabody’s cross-motion for judgment on the

administrative record, (“Pl.’s Cross-Mot.”), ECF No. 39, and the government’s motion to correct

the administrative record, ECF No. 48. BCPeabody contends that the Corps did not treat all

offerors fairly and equally and that the contracting officer acted unreasonably when she failed to

clarify an alleged clerical mistake in its bid proposal before rejecting the proposal as technically

unacceptable.

FACTS 2

A. Solicitation

The solicitation at issue, No. W912EP-13-R-0001, called for proposals to complete

construction work for the Herbert Hoover Dike Rehabilitation Project, Culvert 7, Culvert 9, and

Taylor Creek Abandonment in Okeechobee County, Florida. AR 2-56. 3 The Corps’s

2

The recitations that follow constitute findings of fact by the court drawn from the

administrative record of the procurement filed pursuant to RCFC 52.1(a), see Bannum, Inc. v.

United States, 404 F.3d 1346, 1356 (Fed. Cir. 2005) (specifying that bid protest proceedings

“provide for trial on a paper record, allowing fact-finding by the trial court”), as well as from the

parties’ evidentiary submissions related to prejudice and equitable relief, see Holloway & Co. v.

United States, 87 Fed. Cl. 381, 391 n.12 (2009) (“It is the responsibility of th[e] [c]ourt, not the

administrative agency [conducting the procurement], to provide for factual proceedings directed

toward, and to find facts relevant to, irreparability of harms or prejudice to any party or to the

public interest through grant or denial of injunctive [or declaratory] relief.”) (quoting PGBA,

LLC v. United States, 60 Fed. Cl. 567, 568 n.1 (2004), aff’d, 389 F.3d 1219 (Fed. Cir. 2004)).

3

Citations to the administrative record refer to the record filed on June 19, 2013. That

record is paginated sequentially and also divided into tabs. In citing to the administrative record,

the court will first designate the tab, followed by page number, e.g., AR 2-56 refers to page 56,

which is located in tab 2 of the record.

2

Jacksonville District issued the solicitation pursuant to FAR § 15.101-2, i.e., invoking a

“[l]owest price, technically acceptable source selection process.” AR 2-73. The solicitation

stated that the “[g]overnment intends to evaluate proposals and award a contract without

discussions with offerors (except clarifications as described in FAR § 15.306(a)).” AR 2-65.

The solicitation listed two factors the Corps would evaluate in awarding the contract:

(1) Technical Acceptability and (2) Price. AR 2-74. The Technical Acceptability factor was

split into two sub-factors: (a) Demonstrated Experience and (b) Past Performance. Id. In turn,

the Demonstrated Experience sub-factor contained two sub-elements: (i) Cutoff Wall Experience

and (ii) Earthen Embankment Experience. AR 2-75. If an offeror received a rating of

unacceptable for either sub-element, the offeror would necessarily receive a rating of

unacceptable for both the Demonstrated Experience and Past Performance sub-factors of

Technical Acceptability, and its offer consequently would be rejected as technically

unacceptable. AR 2-76 to -78.

To receive a rating of acceptable for the sub-elements of Cutoff Wall Experience and

Earthen Embankment Experience, the bidders were required to submit project information sheets

for each sub-element to demonstrate that the offeror and its subcontractors had experience

performing the type of work requested in the solicitation. AR 2-75 to -76. One of the projects

submitted for the Cutoff Wall Experience had to include work “penetrating, excavating, and

backfilling through an obstruction that could not be removed by a typical backhoe or excavator

during cutoff wall construction.” AR 2-75.

B. Evaluation of Offers and Award

The Corps received timely proposals from five firms, including BCPeabody and Edens.

BCPeabody’s proposal identified Bauer Foundation Corporation (“Bauer”) as its major

subcontractor for the Cutoff Wall Experience sub-element and provided an unconditional letter

of commitment from Bauer stating that “[Bauer] will fulfill the duties of Cutoff Wall Installation

for the [project]” should BCPeabody receive the contract. AR 4-707. Although BCPeabody’s

proposal included two project information sheets demonstrating that Bauer had experience in

performing cutoff wall construction, AR 4-708 to -11, the two sheets were identical. BCPeabody

mistakenly included two copies of the same project information sheet regarding Bauer’s work.

Id. The submitted project information sheets did not supply the necessary experience regarding

cutoff wall construction in which a sub-surface obstruction was encountered that could not be

removed by a typical backhoe or excavator. AR 9-941. 4 Because of the missing project

information sheet, BCPeabody received a rating of unacceptable for Cutoff Wall Experience.

AR 9-942.

Regarding the second sub-element, Earthen Embankment Experience, BCPeabody

supplied an information sheet relating to its own work, and it received a rating of acceptable for

that sub-element. AR 13-973 to -74. Nonetheless, due to the rating of unacceptable for the

4

BCPeabody had been fully aware of the solicitation requirements and had requested the

appropriate project information sheets from Bauer, including one that would demonstrate its

experience penetrating, excavating, and backfilling through an obstruction that could not be

removed by a typical backhoe or excavator during cutoff wall construction. AR 14-985.

3

Cutoff Wall Experience sub-element, it received a rating of unacceptable for the Demonstrated

Experience sub-factor. AR 9-942. As a result, it also received a rating of unacceptable for Past

Performance. Id. BCPeabody’s offer was considered to be technically unacceptable by the

contracting officer, and she excluded it from the competition. Id. The technical rating process

and the determination that BCPeabody should be found technically unacceptable occurred

without alerting BCPeabody to the mistake in its proposal. BCPeabody’s proffered price was

$3,699,326.26. AR 4-736.

Edens’s proposal was the only proposal deemed technically acceptable, AR 9-946, and

Edens was awarded the contract on December 21, 2012. AR 10-948. Like BCPeabody’s,

Edens’s proposal contained a letter of commitment from Bauer to “fulfill the duties of Cutoff

Wall Installation for the [project]” in the event the contract was awarded to Edens. AR 5-772.

In addressing both sub-elements of the Demonstrated Experience sub-factor, Edens did not use

project information sheets as required by the solicitation. AR 9-944. Nonetheless, it provided

sufficient details about projects completed to receive a rating of acceptable for the sub-factor. Id.

For the Cutoff Wall Experience sub-element, Edens supplied information about two projects

completed by Bauer. See AR 9-943 to -44. The contracting officer thus knew that Bauer had the

requisite experience to perform the cutoff wall construction under either of the conditions

specified in the two sub-elements. Edens’s price quote was $4,783,688.00, more than

$1,000,000 greater than the price put forward by BCPeabody. AR 5-923.

[***] offerors relied on Bauer as a major subcontractor. AR 9-938 to -44. Nothing in

BCPeabody’s or Edens’s proposals indicated an intention to rely on any other subcontractor for

the cutoff wall construction. The proposals by BCPeabody and Edens were identical in that

respect, as were the commitment letters from Bauer that each had appended to its proposal. The

contracting officer indicated that she knew that BCPeabody intended to rely on Bauer for the

cutoff wall construction: “Based on BCPeabody’s proposal, it was clear that BCPeabody

intended to use Bauer as the subcontractor for the cut-off wall.” AR 19c-1046.

But for the unacceptable rating that BCPeabody received for Cutoff Wall Experience due

to its omission of a second project information sheet demonstrating Bauer’s experience with an

underground obstruction, it would have had the lowest priced, technically acceptable bid. The

other three offerors, [***], were all found technically unacceptable, but unlike BCPeabody, they

were found unacceptable for both the Cutoff Wall Experience and the Earthen Embankment

Experience sub-elements. AR 9-934. 5

C. Protests

Following notification that Edens had received the contract and that BCPeabody’s

proposal was found to be technically unacceptable, AR 11-950, BCPeabody requested a

debriefing from the contracting officer, which it received on January 9, 2013. See AR 14-980.

5

Two offerors provided project information sheets from Bauer and owned subsidiaries of

Bauer to demonstrate the necessary experience for the Cutoff Wall Experience sub-element.

Providing project information sheets from owned subsidiaries of Bauer created separate

problems for those two offerors. See AR 9-938 to -44.

4

BCPeabody first learned of the copying error from the debriefing. BCPeabody immediately filed

an agency level protest on January 10, 2013. AR 14-976.

As part of its protest, BCPeabody argued that the government abused its discretion by

failing to inquire about the collating mistake it made regarding information sheets concerning

Bauer’s cutoff wall experience. See AR 14-979 to -80. The agency denied BCPeabody’s

protest, concluding that the contracting officer had no obligation either to clarify the mistake or

to draw any inferences or make any assumptions regarding BCPeabody’s proposal. AR 15-1002,

1004. BCPeabody then filed a protest with the Government Accountability Office (“GAO”) on

February 21, 2013. AR 19q-1280. BCPeabody maintained its argument that the contracting

officer abused her discretion in failing to clarify the alleged clerical mistake, given her

knowledge that BCPeabody planned to use Bauer as the major subcontractor and her knowledge

that Bauer was well-qualified to perform the work. See AR 24-1455; see also BCPeabody

Constr. Servs., Inc., B-408023, 2013 CPD ¶ 120, 2013 WL 1944164, at *3 (Comp. Gen. May 10,

2013).

GAO disagreed with the agency’s conclusion that the contracting officer did not abuse

her discretion. It found that “[a]lthough an offeror has the burden of submitting an adequately

written proposal, and an agency may downgrade a proposal for the lack of requested information,

an agency may not ignore prior performance information of which it is aware.” AR 24-1456;

2013 WL 1944164, at *4 (citing Consolidated Eng’g Servs., Inc., B-279565.2, .3, 99-1 CPD

¶ 75, 1998 WL 1045204, at *4 (Comp. Gen. June 26, 1998)). Because the Corps’s contracting

officer was aware of Bauer’s experience from other proposals, including especially that by

Edens, she could not reasonably find Bauer’s experience acceptable for Edens but unacceptable

for BCPeabody. Id. (“Here, the proposals of both Edens and BCPeabody included [Bauer] as

their respective cut-off wall construction subcontractor, and it was not reasonable for the Corps

to find [Bauer’s] experience acceptable for Edens but unacceptable for BCPeabody.”).

GAO nonetheless denied BCPeabody’s protest, finding that it was not prejudiced by the

contracting officer’s error. AR 24-1457; 2013 WL 1944164, at *4. BCPeabody had included

with its briefing to GAO a project information sheet completed by Bauer Foundations Canada, a

separate legal entity from Bauer. That affiliated entity was not covered by Bauer’s letter of

commitment to BCPeabody, and therefore the protest was denied. AR 24-1457; 2013 WL

1944164, at *5.

Thereafter, BCPeabody filed suit in this court on June 6, 2013. Compl., ECF No. 1.

BCPeabody moved for a preliminary injunction on June 11, 2013 to bar the Corps from

proceeding with the contract. See Pl.’s Mot. for Preliminary Injunction, ECF No. 18. A hearing

was held on June 21, 2013, and the court granted the motion the same day. See Order Granting

Mot. for Preliminary Injunction, 2013 WL 3225844, ECF No. 29. All parties subsequently filed

and briefed cross-motions for judgment on the administrative record, and a hearing was held on

July 23, 2013. Subsequently, to support an argument the government had fleshed out and

elaborated in its reply brief on the merits, the government filed a post-hearing Motion to Correct

the Administrative Record, ECF No. 48, to add to the record proposals submitted by offerors

other than BCPeabody and Edens. Briefing on that motion was completed on August 12, 2013.

5

JURISDICTION

This court has jurisdiction over bid protests pursuant to the Tucker Act, 28 U.S.C.

§ 1491, as amended by the Administrative Dispute Resolution Act, Pub. L. No. 104-320, § 12,

110 Stat. 3870, 3784 (Oct. 19, 1996) (codified at 28 U.S.C. § 1491(b)). In pertinent part, the

Tucker Act vests this court with jurisdiction to

render judgment on an action by an interested party objecting to a

solicitation by a [f]ederal agency for bids or proposals for a

proposed contract or to a proposed award or the award of a

contract or any alleged violation of statute or regulation in

connection with a procurement or a proposed procurement.

28 U.S.C. § 1491(b)(1). “An interested party is an actual or prospective bidder whose direct

economic interest would be affected by the award of the contract.” Orion Tech., Inc. v. United

States, 704 F.3d 1344, 1348 (Fed. Cir. 2013). A party can show the existence of a “direct

economic interest” by demonstrating that it had a “substantial chance” of winning the award.

Rex Serv. Corp. v. United States, 448 F.3d 1305, 1308 (Fed. Cir. 2006) (internal citations

omitted). “[A] bidder has standing to challenge the lawfulness of discretionary acts that operate

to exclude the bidder from consideration in cases where the bidder’s ratings are such that had the

government acted lawfully the bidder would have had a substantial chance of winning the

contract.” ST Net, Inc. v. United States, __ Fed. Cl. __, __, (2013), 2013 WL 4128730, at *5

(citing G4S Tech. CW LLC v. United States, 109 Fed. Cl. 708, 719 (2013)).

BCPeabody is an “interested party” within the terms of the Tucker Act and has standing

to pursue its protest. BCPeabody submitted a bid for the award at issue and contends that only it

and Edens submitted technically acceptable offers. Because it had the lower price by more than

$1,000,000, BCPeabody would have had a substantial chance of winning the contract. 6

STANDARDS FOR DECISION

The Administrative Procedure Act (“APA”), 5 U.S.C. § 706, governs the court’s review

of a challenge to an agency’s contract award. See 28 U.S.C. § 1491(b)(4) (“In any action under

6

The government does not argue that BCPeabody’s copying and collating mistake

prevented BCPeabody from having standing to challenge the contracting officer’s determinations

about its offer, and, indeed, any argument against standing would have been unavailing. See ST

Net, __ Fed. Cl. at __, 2013 WL 4128730, at *6 (citing Orion Tech., 704 F.3d at 1349

(commenting that criticality of missing information is “relevant to the reasonableness of the

[agency’s] decision-making, not to determining prejudice for standing purposes”); MVS USA,

Inc. v. United States, 111 Fed. Cl. 639, 648-49 (2013) (holding that a protestor whose allegation

that the disqualifying flaw in its proposal was due to improper government action had standing to

challenge award); Castle-Rose, Inc. v. United States, 99 Fed. Cl. 517, 523 (2011) (concluding

that a protestor had pled sufficient facts to raise a question whether government properly deemed

its proposal to be late had standing to challenge award)).

6

this subsection, the courts shall review the agency’s decision pursuant to the standards set forth

in section 706 of title 5.”). For that proposition, BCPeabody rests on the potentially viable legal

position that it should have been given notice of its mistake in copying information about

Bauer’s experience and been given the opportunity to correct the mistake. The court may set

aside an agency’s procurement decision if it is “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law,” 5 U.S.C. § 706, subject to satisfying the criteria for

equitable relief, see PGBA, LLC v. United States, 389 F.3d 1219, 1224-28 (Fed. Cir. 2004). To

find that an agency’s decision was arbitrary, capricious, or an abuse of discretion, the court must

conclude that the “decision lacked a rational basis.” Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). The court “is not empowered to

substitute its judgment for that of the agency,” Keeton Corrs., Inc. v. United States, 59 Fed. Cl.

753, 755 (2004) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416

(1971), abrogated in part by Califano v. Sanders, 430 U.S. 99, 105 (1977) (abrogating Overton

Park to the extent that it recognized the APA as an independent grant of subject matter

jurisdiction)), and it must uphold an agency’s decision against a challenge if the “contracting

agency provided a coherent and reasonable explanation of its exercise of discretion.” Axiom Res.

Mgmt., Inc. v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (internal citations omitted).

ANALYSIS

I. Clarification and Unequal Treatment

BCPeabody contends that the contracting officer erred by failing to seek clarification of a

clerical mistake in its proposal and by unequally evaluating Bauer’s demonstrated experience as

a subcontractor for BCPeabody compared to Edens. BCPeabody avers that these actions were

unreasonable and fell outside the reconcilable bounds of the contracting officer’s discretion.

A. A Procuring Official’s Authority Regarding Clerical Errors

Procurement officers have authority to act regarding clerical errors in bid proposals, but

that authority varies depending on the type of procurement at issue – i.e., sealed bidding or

negotiated procurement. Where sealed bids are concerned, the rules regarding clerical and other

mistakes in offers are cast in mandatory terms. FAR Part 14 governs sealed bidding and

provides generally that “[in] cases of apparent mistakes and in cases where the contracting

officer has reason to believe that a mistake may have been made, the contracting officer shall

request from the bidder a verification of the bid, calling attention to the suspected mistake.” FAR

§ 14.407-1 (emphasis added). Regarding “[a]pparent clerical mistakes,” the contracting officer

“shall obtain from the bidder a verification of the bid intended” and attach it to the original bid.

FAR § 14.407-2(a)-(b). Respecting other mistakes disclosed before award, “[s]uspected or

alleged mistakes in bids shall be processed as follows[:] . . . . The contracting officer shall

immediately request the bidder to verify the bid. Action taken to verify bids must be sufficient to

reasonably assure the contracting officer that the bid as confirmed is without error, or to elicit the

allegation of a mistake by the bidder.” FAR § 14.407-3(g)-(g)(1). In instances where the low

bidder seeks to correct the bid but would remain the lowest bidder, the existence of the mistake

and the bid actually intended must be established by “clear and convincing evidence.” FAR

§ 14.407-3(a). The closer the corrected bid comes to the next lowest bid, the greater the scrutiny

7

that will be applied to the evidence of the mistake and the intended bid. In cases where the

corrected bid would be lowered enough to displace another bid as the lowest bid, a stricter

standard applies. Both the mistake and the intended bid must be “ascertainable substantially

from the invitation and the bid itself.” FAR § 14.407-3(a).

For procurements governed by FAR Part 14, GAO has allowed use of mistake-correction

techniques to enable nonresponsive bids to become responsive, applying the stricter standard to

correct bids which displace otherwise low bids. As stated in John Cibinic, Jr., Ralph C. Nash,

Jr., & Christopher R. Yukins, Formation of Government Contracts 649 (4th ed. 2011),

Most cases involving correction of nonresponsive bids have

involved invitations containing a number of bid items where

bidders have incorrectly entered or omitted prices for one or

more of the items. In Slater Elec. Co., Comp. Gen. Dec.

B-183654, 75-2 CPD ¶ 126, GAO dealt with this kind of

situation, stating: “Basically, even though a bidder fails to

submit a price for an item in a bid, that omission can be

corrected if the bid, as submitted, indicates not only the

probability of error but also the exact nature of the error and

the amount intended. The rationale for this exception is that

where the consistency of the pricing pattern in the bidding

documents establishes both the existence of the error and the

bid actually intended, to hold that the bid is nonresponsive

would be to convert what appears to be an obvious clerical

error of omission to a matter of nonresponsiveness.”

Id. (internal citations omitted).

In contrast to the mandatory instructions in FAR Part 14 for handling mistakes

discovered before award in sealed bidding situations, the regulatory provisions regarding

mistakes discovered before award in bids for negotiated procurements are largely discretionary.

FAR § 15.306(a)(1)-(2) allows clarification of certain aspects of proposals or to resolve minor or

clerical errors without the initiation of “discussions.” 7 Specifically, FAR § 15.306(a)(2)

provides that

“[i]f award will be made without conducting discussions, offerors

may be given the opportunity to clarify certain aspects of proposals

(e.g., the relevance of an offeror’s past performance information

and adverse past performance information to which the offeror has

not previously had an opportunity to respond) or to resolve minor

or clerical errors.”

7

Once discussions are initiated for a solicitation governed by FAR Part 15, discussions

must be entered into with all offerors whose proposals fall within a competitive range. See, e.g.,

FAR § 15.306(a)(3), (b)-(e).

8

Id. Clarifications are defined as “limited exchanges, between the [g]overnment and offerors, that

may occur when award without discussions is contemplated.” FAR § 15.306(a)(1). The FAR

does not define “minor or clerical errors.”

The original FAR Part 15, issued in 1984, defined “discussions” to include “information

essential for determining the acceptability of a proposal.” FAR § 15.601 (1997). Revisions to

FAR Part 15 in 1997 deleted this definition of “discussions,” which was viewed as too

constraining, in favor of allowing “as much free exchange of information between offerors and

the [g]overnment as possible, while still permitting award without discussions and complying

with applicable statutes. . . . This policy is expected to help offerors, especially small entities

that may not be familiar with proposal preparation, by permitting easy clarification of limited

aspects of their proposals.” 62 Fed. Reg. 51224, 51228-29 (Sept. 30, 1997) (emphasis added).

While the line between “clarification” and “discussion” is not always easy to demarcate,

some core concepts appertain. Changes to the terms of an offer made in a proposal cannot be

considered a clarification. John Cibinic, Jr., Ralph C. Nash, Jr., & Karen R. O’Brien-DeBakey,

Competitive Negotiation: The Source Selection Process 508 (3d ed. 2011). As Cibinic, Nash and

O’Brien-DeBakey explain, information exchanges that do not concern changes to the terms of

offers may be appropriate in the clarification process: “[I]t is useful to distinguish between

information concerning the capability of the offeror and information relating to the features of

the offer. Whereas the former should clearly be clarifications under FAR [§] 15.206(a), past

decisions dealing with information relating to the offer make inclusion of this type of

communication more problematic.” Id. at 509; see also Information Tech. & Applications Corp.

v. United States, 316 F.3d 1312, 1321 (Fed. Cir. 2003) (reviewing the regulatory history of the

revisions to Part 15 in 1997 regarding clarification and holding that communications for the

purpose of obtaining additional information about subcontractors listed in the offeror’s proposal

constituted clarifications rather than discussions); Mil-Mar Century Corp. v. United States, 111

Fed. Cl. 508, 539 (2013) (“[Although, in a clarification, the winning offeror] may have provided

the [a]gency with required information that was not included in its proposal, the court does not

find that [the offeror] revised its proposal because [it] did not change its total price and did not

‘change the terms of its proposal to make it more appealing to the government.’” (quoting

Information Tech & Applications, 316 F.3d at 1322)).

Despite the intention that the revisions to Part 15 in 1997 would enable more information

to be exchanged between the government and offerors without reaching the level of discussions,

the revisions stopped short of requiring contracting officers to clarify minor or clerical errors in

negotiated procurements, unlike the mandatory nature of the comparable provisions in Part 14

for sealed bidding. Consequently, a fairly sharp divide remains between the clarification rules in

Part 15 for negotiated procurements and the mandatory nature of comparable provisions in Part

14 for sealed bidding. For negotiated procurements, clarifications are to be obtained at the

discretion of the contracting officer. 8 Nonetheless, the permissive language of the clarification

8

Where contracting officers exercised their discretion to seek clarifications, but did not go

so far as to engage in “discussions,” the court has tended to uphold the contracting officers’

actions. See Allied Tech. Grp., Inc. v. United States, 94 Fed. Cl. 16, 44-45 (2010), aff’d, 649

9

provisions in Part 15 does not mean that those provisions are not susceptible to judicial

enforcement.

B. BCPeabody’s Error

BCPeabody alleges that the duplication of the same project information sheet regarding

Bauer’s experience with cutoff wall installation was a copying error in assembling its offer. Pl.’s

Cross-Mot. at 2. BCPeabody concedes that a contracting officer has discretion in clarifying such

clerical errors, but argues that, given the particular circumstances associated with its proposal, it

was unreasonable for the contracting officer to fail to do so. Id. The government responds that

the copying error was not a clerical error, and even if it were, the contracting officer was under

no duty to inquire into it. Def.’s Mot. at 7. According to the government, BCPeabody’s

proposal was incomplete, and the contracting officer had unqualified discretion to reject it as

technically unacceptable. Id.

The government goes too far in arguing that BCPeabody’s mistake was a “major

omission that made it impossible for the agency to fully evaluate BCPeabody’s [p]roposal.”

Def.’s Mot. at 7. The record shows that the proposal, taken as a whole, could be properly

evaluated despite the error. The contracting officer knew that BCPeabody intended to rely on

Bauer as the subcontractor for the cutoff wall construction, that Bauer had the requisite

experience to perform the work, and that BCPeabody mistakenly submitted two identical project

information sheets respecting Bauer’s experience. The circumstances are thus closely akin to

those at issue in Information Tech. & Applications and Mil-Mar Century where “clarifications”

provided essential information about a subcontractor and contractor, respectively, but did not

alter or revise the terms of the pertinent offers. See Information Tech. & Applications, 316 F.3d

at 1322; Mil-Mar Century, 111 Fed. Cl. at 539.

By contrast, in ST Net, the protestor had omitted material pricing information. See ST

Net, __ Fed. Cl. at __, 2013 WL 4128730, at *8. Had the protestor included the requisite pricing

items, its total evaluated price would have increased by roughly 7%. Id. Under those

circumstances, it was impossible for the agency accurately to evaluate the protestor’s proposal,

and the court accordingly held that the omission was not a clerical error. Id. at __, 2013 WL

4128730, at *10. In the instant case, the omitted project information sheet did not bear on price

or involve information that the contracting officer did not already know. Inclusion of a second

project information sheet would not have materially altered the terms of BCPeabody’s offer. It

only addressed Bauer’s suitability as a subcontractor, and the contracting officer was well aware

that Bauer was a qualified subcontractor. The court consequently is satisfied that BCPeabody’s

mistake constituted a clerical error within the meaning of FAR § 15.306(a)(2), a matter that

could have been the subject of inquiry by the contracting officer without provoking discussions.

C. The Contracting Officer’s Discretion

F.3d 1320 (Fed. Cir. 2011); see also Dyncorp Int’l, LLC v. United States, 76 Fed. Cl. 528, 540

(2007).

10

Undoubtedly, the language of FAR § 15.306(a)(2) is permissive, and a contracting officer

has discretion in determining whether to seek clarification. Whether that discretion is absolute

and whether an agency’s actions must be reasonable and rational are at issue here. The question

at hand focuses on the extent to which competitive negotiation is so far removed from sealed

bidding that a contracting officer’s reaction to a clerical mistake can be diametrically different in

the two types of procurement, despite factually comparable and compelling circumstances for

clarification. 9

The government points to Orion Technology, 704 F.3d 1344, as precedent for the

proposition that it is within an agency’s unqualified discretion to reject a technically incomplete

proposal. See Def.’s Mot. at 7, 12-13. In Orion, the protestor submitted a proposal on the last

possible day and omitted proprietary cost information for five of its eight subcontractors. Orion,

704 F.3d at 1346. Eight days later, the soliciting agency received the missing subcontractor data,

but refused to consider it. Id. The protestor’s proposal was subsequently rejected because,

without the subcontractor data, the agency could not perform a cost-realism analysis of the

proposal. Id. at 1346-47. The court of appeals held that it was within the agency’s discretion to

reject the belatedly submitted information and to exclude the proposal because it could not

perform the necessary cost-realism analysis. Id. at 1351. As in ST Net, the protestor’s omission

in Orion was material and prevented the soliciting agency from accurately evaluating the

proposal. The technical incompleteness in BCPeabody’s proposal does not rise to that level.

BCPeabody’s mistaken omission did not impair the contracting officer’s ability to evaluate

BCPeabody’s fitness or price quote for the contract.

9

A knowledgeable commentator has questioned whether the standards for correction of

minor or clerical errors should be sharply divergent between the two types of procurements. See

Ralph C. Nash, 27 No. 9 Nash & Cibinic Rep., Correcting Mistakes: Negotiation v. Sealed

Bidding, ¶ 41 (Sept. 2013) (“[W]e can’t see how the [g]overnment would be harmed by adopting

a mandatory verification and mistake correction rule when competitive negotiation is the

procurement technique. When the [g]overnment uses long and complex solicitations, mistakes

can be expected. It would seem that both parties would benefit from a rule that compensates for

such mistakes. Companies that spend the money required to compete in these circumstances

would be given fair treatment and the agencies would have a better chance of awarding to the

offeror(s) that really can deliver best value.”). This sentiment was evident in the court’s decision

in Griffy’s Landscape Maintenance LLC v. United States, 46 Fed. Cl. 257 (2000), where the

protestor’s contact information for its insurance representative was missing from the proposal.

The court held that the omission was clerical and that the contracting officer had a duty to

inquire into it even though it was a negotiated procurement and not a sealed bid procurement. Id.

at 259 (“In character it was the same as a sealed bid procurement where there are no post-

submission contacts with bidders.”). At the time of the solicitation, Griffy’s was performing

another contract for the Army, and the court reasoned that the Army could have easily discerned

the contact information from its own files or called Griffy’s. Id. at 260. The decision in Griffy’s

Landscape has been criticized for applying the criteria for correcting minor or clerical errors in

sealed bidding situations to a negotiated procurement. See C.W. Over & Sons, Inc. v. United

States, 54 Fed. Cl. 514, 521 (2002); see also Camden Shipping Corp. v. United States, 89 Fed.

Cl. 433, 438 & n.5 (2009).

11

A prior decision by this court can be read to imply that a contracting officer’s discretion

under FAR § 15.306(a) is so broad that he or she would never have a duty to seek clarifications.

In Gulf Group, Inc. v. United States, 61 Fed. Cl. 338 (2004), the court held that a contracting

officer did not abuse his discretion when, without explanation, he failed to clarify uncertainties in

the protestor’s past performance information even though the technical evaluation team reported

that clarifications were “required” before a final evaluation could be made. Id. at 360-61. In

describing FAR Part 15, the court wrote, “[W]henever the contracting officials think a

clarification of certain aspects of a proposal would be helpful, they have the discretion to seek

such a clarification, even when discussions with all bidders would not occur. The FAR allows,

but does not require, such exchanges to take place.” Id. at 360. Taken at face value, this court

concurs with such a statement, but it cannot accept the implication that there are never situations

in which a contracting officer’s discretion would be abused by a failure to seek clarification.

This is particularly true where, as here, the clerical error led the contracting officer to

evaluate the past performance of a subcontractor differently for two offerors. Contracting

officers are required to “ensure that contractors receive impartial, fair, and equitable treatment.”

FAR § 1.602-2(b). In addressing BCPeabody’s protest to GAO, that body pointed out that in a

procurement, “an agency may not ignore prior performance information of which it is aware.”

AR 24-1456, 2013 WL 1944164, at *4 (citing Consolidated Eng’g Servs., Inc., B-279565.2,

1998 CPD ¶ 75, 1998 WL 1045204, at *4 (Comp. Gen. June 26, 1998)). That principle applies

here. Once the contracting officer became aware of the suitability of Bauer’s past experience

with cutoff wall construction, she could not reasonably rate Bauer differently for BCPeabody as

contrasted to Edens. Given BCPeabody’s significantly lower bid, the contracting officer had

virtually overwhelming cause to contact BCPeabody about the clerical error or assign an equal

rating for Bauer as a subcontractor for both Edens and BCPeabody.

The government argues that requiring the contracting officer to clarify the copying

mistake in this case will “[obligate] the agency to correct each and every so-called ‘clerical error’

[and] create a paternalistic acquisition system that the drafters of the [FAR] rejected.” Def.’s

Mot. at 7. That argument amounts to a policy-based plea for the court to recognize an

unreviewable discretion on the part of the contracting officer to omit inquiring about “minor or

clerical errors.” As suggested previously, that contention is legally unpersuasive and factually

untenable on the record of this case. The contracting officer had all of the information she

needed about BCPeabody’s proposal, including all price information, and about Bauer’s

qualifications as a subcontractor.

In a last-ditch effort to sustain the contracting officer, the government makes a counter-

factual contention that it was “fundamentally unclear” to the contracting officer “whether Bauer

was the only major subcontractor that BCPeabody would use to perform the [subcontracted]

work.” Def.’s Reply at 6. The government points to two other offerors who proposed to use

Bauer for cutoff wall construction but to do so along with other subcontractors, including Bauer

Foundations Canada. Id. 10 This argument manifestly is a construct of counsel, not borne out by

the record of the contracting officer’s actions. The contracting officer excluded BCPeabody’s

10

In support, the government belatedly moved post-hearing to “correct” the record by

including the proposals of other contractors..

12

proposal solely because it was lacking a second project information sheet, not because it was

“fundamentally unclear” who BCPeabody intended to use as a subcontractor and whether that

subcontractor had the requisite experience. Indeed, BCPeabody, like Edens, had included as part

of its offer an unconditional commitment from Bauer that “[Bauer] will fulfill the duties of

Cutoff Wall Installation for the [project].” AR 4-707. That commitment was categorical and

unambiguous.

In short, BCPeabody has established that the contracting officer in this case abused her

discretion in two ways. First, she impermissibly found Bauer, the projected subcontractor for

both BCPeabody and Edens, to have acceptable experience insofar as Edens’s proposal was

concerned but not for BCPeabody’s competing proposal. Second, she improperly refused to seek

clarification from BCPeabody regarding the copying mistake in BCPeabody’s offer that related

to Bauer’s experience in cutoff wall construction in which a sub-surface obstruction was

encountered.

II. Prejudice

To succeed on the merits, a bid protestor must show not only that there was an error in

the procurement process but also that it was prejudiced by the error. See Data Gen. Corp. v.

Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996). In this respect, a protestor must demonstrate that

there was a “substantial chance it would have received [the] contract award, but for the alleged

error in the procurement process.” McAfee, Inc. v. United States, 111 Fed. Cl. 696, 712 (2013)

(quoting Gentex Corp. v. United States, 58 Fed. Cl. 634, 653 (2003) (in turn citing Information

Tech. & Applications, 316 F.3d at 1319)); see also Alfa Laval Separation, Inc. v. United States,

175 F.3d 1365, 1367 (Fed. Cir. 1999). This inquiry into “prejudice” is distinct from the inquiry

into standing. While both use the “substantial chance” doctrine, prejudice at the jurisdictional

threshold can be satisfied on the basis of the plaintiff’s allegations, whereas prejudice on the

merits can only be satisfied by the effect of an agency decision adjudged to be unlawful. See

Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 696 (2010).

BCPeabody has demonstrated that it was prejudiced by the contracting officer’s abuse of

discretion. If the contracting officer had acted reasonably in light of the facts and circumstances

at hand, BCPeabody would have had a “substantial chance” of receiving the contract.

BCPeabody would have been a technically acceptable bidder offering the lowest price by more

than $1,000,000.

III. Equitable Factors

To grant equitable relief which would set aside and enjoin the Corps’s award of the

contract to Edens, the court must consider “whether (1) the plaintiff has succeeded on the merits,

(2) the plaintiff will suffer irreparable harm if the court withholds the injunctive relief, (3) the

balance of hardships to the respective parties favors the grant of injunctive relief, and (4) the

public interest is served by a grant of injunctive relief.” Centech Grp., Inc. v. United States, 554

F.3d 1029, 1037 (Fed. Cir. 2009) (citing PGBA, LLC v. United States, 389 F.3d 1219, 1228-29

(Fed. Cir. 2004)).

13

Looking at each factor in turn, BCPeabody has succeeded on the merits by showing that

the contracting officer acted unreasonably by excluding BCPeabody’s proposal from

competition. She could have either clarified the clerical mistake or evaluated Bauer equally for

both Edens and BCPeabody. The first factor weighs in favor of BCPeabody.

BCPeabody argues that it will suffer irreparable harm if it is denied injunctive relief

because it will have been “denied a fair opportunity to compete under the solicitation and to

benefit from a lawful procurement process.” Pl.’s Mot. for Preliminary Injunction at 17. The

government argues that neither denial of a fair opportunity to compete nor lost economic profits

can constitute irreparable harm. Def.’s Reply at 26-27. The government inaccurately cites eBay,

Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), for the proposition that denial of a fair

opportunity to compete is not irreparable harm. See Def.’s Reply at 26-27. In eBay, the

Supreme Court simply held there should be no presumption that permanent injunctions should

issue in patent cases, and, instead, that such injunctions should be considered in accord with the

generic four-factor test, just as in any other case. 547 U.S. at 394. The Supreme Court said

nothing about denial of a fair opportunity to compete in the context of a bid protest. In

contradiction to the government’s second argument, the court has repeatedly held that the loss of

potential profits from a government contract can constitute irreparable harm. See Furniture by

Thurston v. United States, 103 Fed. Cl. 505, 520 (2012) (citing cases). In this instance, denial of

a fair opportunity to compete and loss of financial benefit from a lawful procurement process

constitute irreparable harm.

The court must balance the potential harm to the plaintiff of not granting the injunction

against the potential harm to the Corps and to the awardee should the injunction be granted. See

PGBA, 389 F.3d at 1231-32; Gentex, 58 Fed. Cl. at 654. Edens would suffer an economic

hardship if the contract award is rescinded, but if BCPeabody is only awarded bid preparation

costs, it would suffer a corresponding hardship. The government, however, has not indicated any

special consequence to delaying contract award and reevaluating the proposals. There is no

evidence that the construction work must be undertaken immediately to rectify a pressing

problem. The government has not demonstrated that the balance of hardships should weigh in its

favor.

It is well established that the public interest is well-served by ensuring that the

government procurement process is fair and even-handed. PGBA, LLC v. United States, 60 Fed.

Cl. 196, 221 (2004), aff’d, 389 F.3d 1219. The public has no urgent need for completion of the

construction work and will not be harmed by a short delay while the Corps reevaluates proposals.

Considering all of the factors, the court finds that a permanent injunction barring the

Corps from awarding the contract to Edens and requiring it to restore BCPeabody to the

competition and reevaluate proposals is justified.

CONCLUSION

For the reasons stated, BCPeabody’s motion for judgment on the administrative record is

GRANTED, as is BCPeabody’s Motion for Permanent Injunction, ECF No. 47. The

government’s and Edens’s motions for judgment on the administrative record are accordingly

14

DENIED. The Corps’s award of the contract to Edens is set aside, 11 and the Corps is required to

restore BCPeabody to the competition and to reevaluate the proposals that were submitted. 12

The clerk is directed to issue a final judgment in accord with this disposition. 13

Costs are awarded to plaintiff.

It is so ORDERED.

s/ Charles F. Lettow

Charles F. Lettow

Judge

11

This aspect of the decision has been amended to accord with the court’s grant of

defendant’s motion to clarify the judgment, filed September 24, 2013.

12

BCPeabody is relieved of the responsibility to maintain the security bond that it was

required to post pursuant to RCFC 65(c), in connection with the issuance of the preliminary

injunction.

13

BCPeabody’s Motion to File Affidavit in Support of Pl.’s Motion for Judgment on the

Admin. Record, ECF No. 40, is GRANTED IN PART. The affidavit is taken into the record of

the case but shall not be considered a supplement to the administrative record of the agency’s

actions in the procurement. The government’s Motion to Correct the Administrative Record,

ECF No. 48, is GRANTED.

15