# Kropp Holdings, Inc. v. United States

> United States Court of Federal Claims · May 28, 2025

URL: https://www.frixlaw.com/law-library/cases/11060540

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** May 28, 2025
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Zachary N. Somers
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11060540

## How later opinions describe it (automated extraction)

- stating that judges may grant a party’s MJAR if the party meets its burden of proof in showing prejudicial error
- finding that the government control exception applies to non–batch delivered electronic commerce because the “exception is not limited to any particular method of delivery”

## Opinion text

In the United States Court of Federal Claims
No. 24-2155
(Filed Under Seal: May 9, 2025)
Reissued: May 28, 2025 ∗

* * * * * * * * * * * * * * * * * * * * * *
*
KROPP HOLDINGS, INC., *
*
Plaintiff, *
*
v. *
*
THE UNITED STATES, *
*
Defendant, *
*
and *
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ASSOCIATED ENERGY GROUP, LLC, *
*
Defendant-Intervenor. *
*
*
* * * * * * * * * * * * * * * * * * * * * *

Craig A. Holman, with whom were Kara L. Daniels, Thomas A. Pettit, Roee Talmor, and
Nicole W. Williamson, Arnold & Porter Kaye Scholer, LLP, all of Washington, D.C., for Plaintiff.

John H. Roberson, Senior Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, with whom were Douglas K. Mickle, Acting Deputy Director,
Patricia M. McCarthy, Director, Yaakov M. Roth, Acting Assistance Attorney General, all of
Washington, D.C., for Defendant, and Steven Sosko, Senior Counsel, Defense Logistics Agency,
of Fort Belvoir, VA, of counsel.

Todd J. Canni, with whom were Ariella M. Cassell of Los Angeles, CA, and Kevin
Barnett, Stephen Ruscus, Kevin N. Dorn, and Kaitlyn E. Toth, Baker & Hostetler LLP, all of
Washington, D.C., for Defendant-Intervenor.

∗
Pursuant to the protective order entered in this case, this opinion was filed initially under seal.
The parties provided proposed redactions of confidential or proprietary information, which are redacted in
this version of the opinion. In addition, the Court made minor typographical and stylistic corrections to
this version of the opinion.
OPINION AND ORDER

SOMERS, Judge.

Whoever came up with the idiom “can’t win for losing” obviously did not have the
protestor, Kropp Holdings, Inc. (“KHI”), in mind, but they certainly could have. KHI has made
several trips to the Government Accountability Office (“GAO”) to protest the award of the
contract at issue here to Defendant-Intervenor Associated Energy Group, LLC (“AEG”) and has
now brought the instant protest in this Court. During this time, KHI has discovered that AEG
submitted a proposal that was ten pages beyond the page limits set forth in the solicitation. Yet,
the agency awarded AEG the contract despite AEG’s exceeding of the page limits. So KHI
protested this violation to GAO. What did the agency do? The agency took corrective action
and extended the page limits by ten pages and re-awarded the contract to AEG. So KHI again
protested to GAO because the corrective action did not address the fact that the agency had
conducted discussions with AEG based on the proposal with the extra pages without reopening
discussions with KHI. Next, the agency realized that AEG submitted a non-compliant proposal
because AEG failed to include a required “no cost” certification. What did the agency do? The
agency unlawfully conducted discussions with AEG only, which permitted AEG to correct its
disqualifying mistake and allowed the agency to award the contract to AEG once again. Finally,
once it received the complete administrative record in this Court, four years after the deadline for
initial proposal submission, KHI discovered that AEG had submitted its proposal after the
deadline for proposal submission. What is more, evidence in the record indicates that the agency
was aware that AEG’s proposal did not come in on time. What did the agency do? It did not
apply the “late is late” rule. Rather, the agency awarded AEG the contract despite its late
submission. In other words, despite all these disqualifiers and other procurement errors that will
be discussed below, AEG was awarded the contract at issue here. And KHI could not win for
losing.

At issue in this protest is the Defense Logistics Agency’s award of a contract to
administer an aviation fuel payment system known as the “AIR Card” program. The agency
awarded the contract to AEG over KHI, the incumbent on the contract and protestor here. KHI
filed this bid protest alleging eight grounds for why the Court should overturn the award of the
contract to AEG. Of those eight grounds, four are successful. First, AEG untimely submitted its
proposal; the agency’s acceptance of the late proposal and subsequent award of the contract to
AEG constituted prejudicial error. Second, the agency prejudicially erred by conducting
misleading discussions with KHI and unequally treating the offerors’ proposals. Third, the
agency irrationally attributed AEG’s corporate experience and past performance to a completely
walled-off division created by AEG to compete for the contract and relied on those flawed
attributions to award the contract. Such reliance is prejudicial error. Fourth, these above errors
directly impacted the agency’s best value determination, making that determination prejudicially
in error. Accordingly, as discussed in detail below, KHI’s motion for judgment on the
administrative record (“MJAR”) is granted, the cross-motions filed by the government and AEG
are denied, the award of the contract to AEG is held unlawful and set aside, and KHI is granted
injunctive relief.

2
BACKGROUND

A. Facts

The Defense Logistics Agency Energy (“DLA” or “agency”) is a major subordinate
command of the Defense Logistics Agency located in Fort Belvoir, Virginia. DLA is responsible
for acquiring energy-related resources and services for the U.S. Department of Defense (“DoD”).
ECF No. 78 at 2. As part of its responsibilities, DLA runs the Aviation Into-plane
Reimbursement (“AIR”) Card program. Tab 1 at Administrative Record (“AR”) 1. The AIR
Card program allows the military departments, defense agencies, and participating civilian
agencies to procure aviation fuel, fuel-related supplies, and ground services from commercial
merchants worldwide. Id. Prior to this procurement, KHI held a contract with DLA to provide
the transactional services needed to support the AIR Card program. Tab 14 at AR 680.

On June 22, 2021, DLA posted a Request for Proposals (“RFP”) for solicitation number
SPE608-21-R-0203 as a follow-on to KHI’s expiring contract, seeking transaction processing
services for the AIR Card program. See Tab 10 at AR 205; see also ECF No. 64 at 3. The RFP
sought a contractor to manage the Air Card program, which “provides the ability to procure
aviation fuel and ancillary ground services at commercial airports globally” through a
contractor-provided payment solution. Tab 201 at AR 6291. After DLA originally issued the
RFP on June 22, 2021, it amended the RFP sixteen times. See id. at AR 6288. Amendment 14 to
the original RFP contains the final proposal instructions, Tab 174 at AR 5422–40, and
Amendment 16 includes the final Performance Work Statement (“PWS”), Tab 201 at AR 6290–
6358.

The RFP ultimately required offerors to submit their proposals in four volumes, each
containing different information: Volume 1: Offeror Data; Volume 2: Technical Approach,
Management Approach, Past Performance; Volume 3: Electronic Access System (“EAS”),
Merchant Acceptance with Level III Data Plan; and Volume 4: Price Proposal. Tab 174 at AR
5424–31. In these four volumes offerors were required to provide information that would be
scored pursuant to six factors, comprising eleven subfactors, three of which are relevant here.
Within Volume 2, Subfactor 1(d) required offerors to provide information regarding their
corporate experience, which DLA would rate and take into consideration when awarding the
contract. See id. at AR 5427. According to the RFP, DLA weighted Subfactor 1(d) the same as
Subfactor 1(b), but less than the other subfactors under Factor 1. Id. at AR 5434. Also within
Volume 2, Factor 5, titled “Past Performance,” required offerors to provide DLA with references
to confirm the offerors’ transactional history and provided that DLA would review any past
performance ratings offerors may have received in the Contractor Performance Assessment
Reporting System. Id. at AR 5428–29. According to the RFP, DLA weighted Factor 5 the same
as Factor 2 but less than Factors 1, 3, and 4. Id. at AR 5434. Within Volume 3, Factor 3, titled
AIR Card EAS, required offerors to submit their offers to create a mobile application and digital
interface to support various transactions within the AIR Card program. See id. at AR 5430. The
RFP stated that Factor 3 would be equally weighted with Factors 1 and 4 and that these three
factors would be weighted more than all other factors. Id. at AR 5434. In addition to these three
requirements, relevant to this protest is a Preliminary Evaluation Factor that required offerors to
certify that their proposals were at no cost to the government. Id. Failure to include this

3
certification was grounds for deeming a proposal “unacceptable” and removing the offeror from
the competition. Id.

In response to the RFP, three offerors, including KHI and AEG, submitted proposals.
KHI submitted its proposal on August 18, 2021. Tab 14 at AR 631. AEG submitted its proposal
on August 19, 2021. See Tab 15 at AR 853. After concluding that KHI and AEG were the only
acceptable offerors, DLA awarded AEG the contract on June 3, 2022. See Tab 91 at AR 2739–
42.

B. Procedural History
This procurement has an extensive procedural history. On July 5, 2022, KHI filed a
post-award protest with GAO. Tab 103 at AR 3117. On July 25, 2022, the contracting officer
initiated corrective action, Tab 108 at AR 3686–87, DLA filed notice of that corrective action
with GAO one day later, Tab 105 at AR 3680, and GAO dismissed KHI’s protest on July 29,
2022, Tab 107 at AR 3682.

Several months later, on December 22, 2022, DLA engaged in additional discussions with
AEG and KHI. Tab 123 at AR 3804; Tab 124 at AR 3806. Following these discussions, in
January and February 2023, KHI filed two pre-award protests at GAO. Tab 139 at AR 4313; Tab
154 at AR 4594. These protests resulted in DLA filing a notice of corrective action, and GAO
subsequently dismissing KHI’s protests once more. Tab 173 at AR 5300–01.

On May 8, 2024, the source selection authority (“SSA”) completed a Source Selection
Decision Document (“SSDD”), concluding that AEG’s offer represented the best value to the
government, and the agency again awarded the contract to AEG. Tab 218 at AR 7780. On May
22, 2024, KHI filed another post-award protest at GAO, challenging the award of the contract to
AEG. Tab 225 at AR 8038.

On August 28, 2024, GAO issued a decision sustaining KHI’s protest, finding that the
agency erred by accepting AEG’s proposal despite the fact that AEG failed to list one of its
subcontractors in response to RFP Subfactor 1(a) and because of that, the record did not
demonstrate that the agency had reasonably considered this issue. See Kropp Holdings, Inc.,
B-420857.8, 2024 WL 4330024, at *11–14 (Comp. Gen. Aug. 28, 2024). In response to GAO’s
decision, on September 18, 2024, DLA convened a new Technical Evaluation Board (“TEB”) to
reevaluate AEG’s final revised proposal. Tab 252 at AR 9524. On October 24, 2024, the TEB
signed a report stating that the agency would assess AEG a weakness for failing to identify the
subcontractor with which it would execute the contract. Id. at AR 9524, 9527–28. On October
25, 2024, the SSA concurred with the TEB’s conclusions and awarded the contract to AEG once
again. Tab 253 at AR 9556.

On December 31, 2024, KHI filed the instant bid protest in this Court. ECF No. 1. The
parties filed cross-MJARs, ECF No. 47; ECF No. 64; ECF No. 65, and AEG also filed a motion
to dismiss certain of KHI’s claims, ECF No. 65. On March 26, 2025, the Court held oral
argument on the parties’ cross-motions. This case is now ripe for adjudication.

4
DISCUSSION

A. Standard of Review

The Tucker Act, as amended by the Administrative Dispute Resolution Act, provides the
Court of Federal Claims with “jurisdiction to render judgment on an action by an interested party
objecting to . . . the award of a contract or any alleged violation of statute or regulation in
connection with a procurement . . . .” 28 U.S.C. § 1491(b)(1). In such actions, the Court is to
“review the agency’s decision pursuant to the standards set forth in section 706 of title 5.” Id.
§ 1491(b)(4). To succeed in a bid protest, a protestor must make two showings. Bannum, Inc. v.
United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). First, a protestor must demonstrate error,
meaning that the agency violated the standards set forth in section 706 of the Administrative
Procedures Act (“APA”). Id.; see also 5 U.S.C. § 706(2)(A) (requiring the reviewing court to
“hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law”). Second, a
protestor must prove that such error was prejudicial. Bannum, Inc., 404 F.3d at 1351.

To show that an agency’s actions were in error, a protestor must demonstrate that the
agency “entirely failed to consider an important aspect of the problem, offered an explanation for
its decision that runs counter to the evidence before the agency, or [the decision] is so
implausible that it could not be ascribed to a difference in view or the product of agency
expertise.” Ala. Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1375 (Fed.
Cir. 2009) (alteration in original) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983)). Put differently, a procurement decision may be set aside if the
protestor proves that “(1) the procurement official’s decision lacked a rational basis; or (2) the
procurement procedure involved a violation of regulation or procedure.” Weeks Marine, Inc. v.
United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009) (quoting PGBA, LLC v. United States, 389
F.3d 1219, 1225 n.4 (Fed. Cir. 2004)). In addition, to demonstrate entitlement to relief, a
protestor must establish not only that the agency violated the APA standard, but also that such
violation prejudiced the protestor. Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.
1996) (“[T]o prevail in a protest the protester must show not only a significant error in the
procurement process, but also that the error prejudiced it.”); see also Sys. Studies & Simulation,
Inc. v. United States, 22 F.4th 994, 996–97 (Fed. Cir. 2021) (“In particular, the challenger of
agency action generally bears the burden of showing that an error was harmful—that is, that it
was prejudicial.”).

Bid protests are generally decided on cross-motions for judgment on the administrative
record, pursuant to Rule 52.1 of the Rules of the U.S. Court of Federal Claims (“RCFC”). RCFC
52.1 requires that the Court “make factual findings from the record evidence as if it were
conducting a trial on the record.” Bannum, Inc., 404 F.3d at 1354. Unlike a motion for summary
judgment, a genuine dispute of material fact does not preclude a judgment on the administrative
record. See id. at 1355–56. Rather, in reviewing cross-MJARs, “the court asks whether, given
all the disputed and undisputed facts, a party has met its burden of proof based on the evidence in
the record.” Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 630 (2014).

5
B. Analysis

KHI makes eight principal arguments in support of its protest of DLA’s award of the AIR
Card contract to AEG. See ECF No. 47-1. First, KHI argues that the agency erred by accepting
AEG’s late initial proposal. Id. at 14–17. Second, KHI asserts that the agency deviated from the
Federal Acquisition Regulation (“FAR”) by holding post-Final Proposal Revision (“FPR”)
discussions only with AEG, which allowed AEG to make its proposal awardable. Id. at 17–21.
Third, KHI contends that the agency failed to properly address AEG’s OCIs because, in its view,
a statute bars an awardee of this contract from having any OCIs and because the agency’s
acceptance of AEG’s proposed OCI mitigation plan was irrational. Id. at 21–31. Fourth, KHI
maintains that the agency misled KHI regarding acceptable approaches to the EAS. Id. at 31–35.
Fifth, KHI claims that the agency’s reevaluation was improper because the agency failed to
maintain consistency within the TEB and did not resolve the identification-of-subcontractor issue
identified by GAO. Id. at 35–42. Sixth, KHI asserts that the agency irrationally attributed the
corporate experience and past performance of AEG to its walled-off division, PPS; therefore,
AEG’s scores under those subfactors are not reasonable. Id. at 42–44. Seventh, KHI argues that
AEG’s proposal was nonresponsive because it violated the RFP’s prohibition on creating new
“business lines.” Id. at 44–45. Finally, KHI contends, based on the previous seven alleged
errors, that the agency’s best value determination was irrational. Id. at 45–46.

The Court addresses these arguments in the order presented before turning to discussions
of a sanction the Court assessed against the government and KHI’s request for injunctive relief.

1. DLA Erred by Accepting AEG’s Untimely Proposal.

“All errors are not equal. There are inherent competitive advantages to submitting a
proposal after all other parties are required to do so . . . . To avoid this potential for abuse,
submission deadlines are strictly enforced across the board. When the rules and procedures of a
bid process are applied equally to all parties, but one party submits a proposal past the deadline
for doing so, the untimely submission becomes a stranger to the process, and is disqualified from
the procurement. A late proposal is tantamount to no proposal at all. Such a party has no
‘substantial chance’ of award, and no more standing to sue than the proverbial man on the
street.” Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1381 (Fed. Cir. 2009). Put more
succinctly, “late is late” and late submissions are not awardable.

KHI argues that AEG did not timely submit its initial proposal; therefore, DLA’s
acceptance of AEG’s late submission violated the FAR and prejudiced KHI. ECF No. 47-1 at 2–
3. In response, both the government and AEG maintain that AEG timely submitted its proposal.
ECF No. 78 at 24; ECF No. 65-1 at 20. In the alternative, AEG, but not the government, asserts
that even if AEG did not timely submit its proposal, the circumstances surrounding AEG’s
submission fit within an exception to the FAR’s “late is late” rule. ECF No. 65-1 at 21–25. The
Court first addresses whether AEG’s initial proposal was timely before discussing AEG’s FAR
exception argument. The Court will then turn to whether DLA’s acceptance of AEG’s offer
prejudiced KHI.

6
a. AEG’s proposal was late.

The Court begins its discussion by recounting the unambiguous terms of the RFP. The
original RFP in this case established a submission deadline of August 6, 2021, at 3:00 p.m., Tab
10 at AR 206, before a later amendment changed that deadline to August 19, 2021, at 10:00 a.m.,
Tab 11 at AR 614. The RFP warned prospective offerors of the consequences of late offers and
potential issues that may arise when submitting an offer:

Offers must be received by August 6, 2021, 3:00 p.m. 1 Eastern Daylight Time, Ft.
Belvoir, VA LOCAL TIME. Any offer received after 3:00 PM will be considered
“Late” and may be determined to be unacceptable. (See FAR 52.212-1). A 3:00 PM
Eastern Time closing time for the signed solicitation (and any subsequent
amendments) AND proposal submission form is intentionally set to avoid any
potential receipt issues due to electronic transmission delays such as fire walls.
Each offer is encouraged to submit proposals as early as possible to the closing
time to ensure a timely proposal and to allow system transmission time.

Tab 10 at AR 208 (emphasis added). The RFP gave clear submission instructions, stating that
“Electronic Proposals shall be submitted . . . via email to: Energyfuelcards@dla.mil.” Id. at AR
210. Additionally, the RFP explicitly noted how the agency would determine submission
timeliness: “TIMELINESS OF AN OFFER WILL BE BASED UPON THE RECEIPT TIME
STAMP ON THE SUBMISSION INBOX.” Id. at AR 208 (emphasis in original). Other sections
warned of potential hang-ups with electronic submissions and reiterated the agency’s
encouragement of early submissions to avoid any delays. See id. at AR 329 (“The DLA Energy
e-mail filter will scan the incoming e-mail and attachments for viruses and key words. [Certain
abbreviations] for terms . . . are found in the filter’s adult content library and may result in the
e-mail delivery being delayed. Offerors are encouraged to verify receipt of e-mail offers by
contacting the Contracting Officer prior to the solicitation closing time.”).

With the clear terms of the RFP’s submission deadline established, the Court turns to the
facts surrounding AEG’s proposal submission. At the outset, PDFs of the emails transmitting
AEG’s proposal to DLA included in the administrative record have time stamps for the email
transmission of each of AEG’s submitted volumes. Inclusion of these PDFs in the administrative
record, showing the time stamp on the emails AEG sent to DLA to transmit its proposal, alerted
KHI nearly four years after the proposal submission deadline that AEG’s initial proposal did not
appear to be timely. ECF No. 47-1 at 16. As noted in KHI’s motion, two PDFs show time
stamps after the submission deadline: a time stamp of 10:07:10 a.m. for AEG’s Volume 1
submission, Tab 15 at AR 853; and a time stamp of 10:02:30 a.m. for AEG’s Volume 2
submission, id. at AR 1039. Given that the RFP established a deadline of “10:00 AM,” Tab 11 at
AR 614, AEG’s proposal is late on the face of the administrative record.

However, after reviewing KHI’s MJAR, the government argued that the PDFs in the
administrative record did not reflect the correct time stamps for when AEG submitted the

1
As previously discussed, this deadline was amended to August 19, 2025, at 10:00 a.m.
Tab 11 at AR 614.
7
proposal volumes in question, and it moved to complete the administrative record with
screenshots of the transmittal emails from Microsoft Outlook and with two declarations to
attempt to show that AEG’s submission was timely. See ECF No. 50. KHI opposed the
government’s motion to complete the administrative record but, alternatively, requested that if
the Court were to grant the motion, the email metadata also be included in the administrative
record. ECF No. 56 at 19. The Court granted the government’s motion to complete the
administrative record but required the government to include, in addition to its proffered
screenshots, a screenshot of the time stamps of the emails in the inbox of the
Energyfuelcards@dla.mil email address and the metadata for the emails in question. See ECF
No. 58; ECF No. 60; ECF No. 62. After multiple unresponsive screenshots—showing either
time stamps on the emails themselves or an inbox with no time stamps included—the
government provided the requested screenshot. ECF No. 61-1. The screenshot of the inbox
reflected a time stamp of receipt at 10:07 a.m. for AEG’s Volume 1 and a time stamp of receipt at
10:02 a.m. for AEG’s Volume 2. Id.; Tab 260 at AR 9592. This screenshot further confirms that
AEG’s proposal was submitted late. And to quote an argument the government probably wishes
it did not make, “screenshots cannot be changed by all the metadata (or depositions) in the
world.” ECF No. 57 at 2. The metadata, however, also confirms that the emails that had the first
and second volumes of AEG’s proposal attached to them were first visible in the relevant inbox
at 10:07 a.m. and 10:02 a.m., respectively. Tab 260 at AR 9593 (metadata showing a “received”
time stamp of 10:06:57 a.m. EST on August 19, 2021, for AEG’s Volume 1 submission); id. at
AR 9595 (showing a “received” time stamp of 10:02:02 a.m. EST on August 19, 2021, for
AEG’s Volume 2 submission); ECF No. 50-1 ¶ 4 (“When the three AEG emails were converted
from a .msg file to .pdf using the ‘Save as Adobe PDF’ function, Adobe used the metadata time
for when the email had passed through all DLA servers and was viewable by the recipient.”).

Despite the time stamps reflected on the PDFs in the administrative record, despite the
inbox time stamp on the screenshot added to the administrative record, and despite the fact that
the government itself proffered a declaration confirming that the metadata shows that the emails
in question were not visible in the submission inbox until after the deadline for receipt of
proposals, the government argues—without any evidentiary support—that the contracting officer
did not have the “received” header visible in her Microsoft Outlook inbox and, for that reason,
looked to the time stamp on the email itself to determine timeliness. See ECF No. 78 at 26–27.

To support its argument, the government cites to the contracting officer’s declaration, in
which she stated that she “determined AEG’s initial proposal was submitted timely based on the
time stamped [sic] that showed on the emails received in Outlook, which showed all the 4
required volumes were received on or before 10:00 a.m. EDT on August 19, 2021.” ECF No.
50-2 ¶ 3. While the Court obviously has the government’s argument stating the contracting
officer’s rationale before it, what it does not have is actual declaration testimony from the
contracting officer, or any other witness for that matter, regarding whether the contracting officer
mistook the time stamp on the emails themselves to be the time stamp “on the submission inbox”
per the terms of the RFP or whether she had the “received” header visible in her inbox. The
contracting officer only testified that she looked to the “time stamped [sic] that showed in the
emails received in Outlook” to determine timeliness. Id.

8
Thus, the first part of the government’s argument appears to be built on two post hoc
justifications supplied by government counsel, rather than the actual reasoning of the contracting
officer. First, nowhere in the administrative record or in her declaration does the contracting
officer state that she thought the time stamp on the emails was the inbox time stamp. Rather, she
simply states which time stamp she did use (the email time stamp) without any justification for
why she did so. Id. The justification is instead supplied by government counsel. Second, the
contracting officer also did not declare that the “received” header was not visible in her inbox.
Rather, the contracting officer simply states that she looked to the emails themselves to
determine timeliness. Id. There is no mention whatsoever of the “received” header in her
declaration. 2 Regardless of the merits of the argument that using the email time stamp is a
reasonable interpretation of the RFP’s requirement of using the inbox time stamp to determine
submission timeliness (it is not, as explained below), there is absolutely no support in the
administrative record or in the contracting officer’s declaration for this rationale. Instead, the
government’s argument is a completely unsupported post hoc rationalization supplied by a
Department of Justice attorney to try to explain away the contracting officer’s reliance on the
wrong times tamps (according to the RFP) to determine timeliness. The government submitted
three declarations in support of the argument for the timeliness of AEG’s proposal submission.
Yet not one of the three declarations addresses whether the contracting officer had the “received”
header visible in her inbox, nor do any of the declarations specifically address whether the
contracting officer relied on the email time stamps because she thought that was the inbox time
stamp or because she made a simple but material error.

Nonetheless, the proverbial nail in the coffin for the government’s argument comes
directly from the administrative record itself. Included in the administrative record is a telling
PDF containing an email sent by the contracting officer to AEG at 10:02 a.m. on the due date
asking, “[a]re we expecting Volumes 1 & 2?” Tab 15 at AR 1182. This email seems to confirm
that the contracting officer knew at the time she sent this email both that the 10:00 a.m. deadline
had passed and that AEG’s Volumes 1 and 2 were, at the very least, not visible in her inbox. One
of the government’s proffered declarations further confirms this conclusion. ECF No. 50-1. A
legal administrative specialist for e-discovery within DLA testified that “Adobe use[s] the
metadata time for when the email ha[s] passed through all DLA servers and [is] viewable by the
recipient.” Id. ¶ 4 (emphasis added). 3 Therefore, according to the government’s own

2
At best, the government argues based on the supposition that because over four years
after proposal submission the government was able to produce a screenshot of the inbox that did
not display the “received” header, there was no “received” header in the inbox four years ago
when proposals were originally submitted. But the present-day screenshot offers little to no
indication of whether the contracting officer had the “received” header visible in her inbox four
years ago, at the time of proposal submission. The fact that the government filed three
declarations in support of its timeliness argument but could not get one declarant, including the
contracting officer, to swear that the “received” header was not visible at the time of proposal
submissions significantly undercuts the government’s argument regarding the appearance of the
received header.
3
Although the government witness’s testimony is not part of the administrative record,
the Court may properly refer to such evidence in coming to a decision. “[A]llowing for

9
declaration, at least one, if not both, of AEG’s missing proposal volumes were not visible to the
contracting officer when she sent her 10:02 a.m. email asking why she had not received Volumes
1 and 2 of AEG’s proposal. See Tab 15 at AR 1182 (displaying a time stamp of 10:02 a.m. on the
contracting officer’s email).

Regardless of whether the contracting officer had the “received” header visible in her
inbox, the contracting officer’s reliance on the time stamps on the emails themselves to
determine timeliness, instead of the inbox time stamp, was not reasonable; rather, it was contrary
to the express terms of the RFP. Even if the contracting officer mistook the email time stamp for
the “receipt time stamp on the submission inbox,” her mistake would still be unreasonable and
contrary to law. Tab 10 at AR 208 (capitalization altered). “It is hornbook law that agencies
must evaluate proposals and make awards based on the criteria stated in the solicitation.”
Banknote Corp. of Am., Inc. v. United States, 56 Fed. Cl. 377, 386 (2003), aff’d, 365 F.3d 1345
(Fed. Cir. 2004) (emphasis added). Once an agency places requirements in the solicitation, the
agency must “either follow them or amend the [solicitation] to eliminate them.” CW Gov’t
Travel, Inc. v. United States, 154 Fed. Cl. 721, 732 (2021) (citing 48 C.F.R. § 15.206(a), (d)). It
is axiomatic that an agency must “evaluate proposals and assess their qualities solely based on
the factors and subfactors specified in the solicitation. If the agency changes any evaluation
criterion after issuing the solicitation, it must amend the solicitation and notify the offerors of the
changed requirement.” Elec. Data Sys., LLC v. United States, 93 Fed. Cl. 416, 430 (2010)
(citations omitted); see also Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367–68
(Fed. Cir. 1999) (“‘[R]egardless of the panel’s view of the appropriateness of the standard [set
out in the RFP], the [agency] is strictly bound by its terms,’ and in waiving a portion of the
standard[,] . . . the [agency] violated a clearly applicable procurement statute and regulation.”
(second alteration in original) (quoting Alfa Laval Separation, Inc. v. United States, 40 Fed. Cl.
215, 230 (1998), rev’d 175 F.3d 1365 (Fed. Cir. 1999)).

In short, a violation of the terms of a solicitation can constitute a violation of law under
the APA standard applied in bid protests. See Bannum, Inc., 404 F.3d at 1351 (“The lower court
ruled that [the agency]’s failure to comply with FAR 42.1503(b), and the terms of the RFP, were
violations of law under § 706(2)(A) . . . . [W]e find no error in these rulings.” (emphasis
added)). Accordingly, when challenging an agency’s adherence to the terms of a solicitation, “a
protester must show that: (i) the procuring agency used a significantly different basis in
evaluating the proposals than was disclosed; and (ii) the protester was prejudiced as a result—
that it had a substantial chance to receive the contract award but for that error.” G4S Secure
Integration LLC v. United States, 161 Fed. Cl. 387, 410 (2022) (quoting Banknote Corp. of Am.,
56 Fed. Cl. at 387).

deposition testimony of the contracting officer or other governmental official in a bid protest,
where appropriate, ‘may enable the court to satisfy its statutory duty to give due regard to the
need for expeditious resolution of the action.’” Pitney Bowes Gov’t Sols., Inc v. United States, 93
Fed. Cl. 327, 332 (2010) (quoting Asia Pac. Airlines v. United States, 68 Fed. Cl. 8, 18–19
(2005)). In addition, the deposition testimony the Court uses in this opinion was filed by the
government, but the Court uses it to support arguments made by KHI. The government can
hardly complain that its own deponents do not support its position here.
10
Here, the RFP clearly states that the “submission inbox” time stamp controls for purposes
of assessing timeliness of offers. Tab 10 at AR 208 (capitalization altered). It is commonly
understood that an email “inbox” is the folder that contains received emails and is not the email
messages themselves. There is broad consensus on the definition of an inbox in the email
context. See In-box, OXFORD AMERICAN DICTIONARY (2d ed. 2005) (defining “in-box” as “the
window in which an individual user’s received e-mail messages and similar electronic
communications are displayed”); In-box, WEBSTER’S NEW WORLD COLLEGE DICTIONARY (5th
ed. 2016) (defining “in-box” as “a folder, as in email software, in which received or unread
messages are automatically stored”); Inbox, CAMBRIDGE DICTIONARY 4 (defining “inbox” as “a
place on a computer where email messages arrive[;] a place on a computer where emails that are
sent to you are kept”); In-box, MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY (11th ed. 2020)
(defining “in-box” as “a computer folder devoted to incoming e-mail”); Inbox, PCMAG 5
(defining “inbox” as a “repository in an email application that accepts incoming messages”).
Accordingly, given this common understanding of what an inbox is, to mistake an inbox time
stamp for a time stamp on an email itself is not reasonable.

A physical, in-person analogue is illustrative of this point. If, instead of allowing email
submissions, the RFP only allowed physical, in-person submissions, any deviation from the RFP
in determining timeliness would be beyond question. For example, assume the RFP stated that
offers must be submitted to Room 1A of Fort Belvoir and that submission timeliness would be
determined by the “clock on the north wall of Room 1A.” If, at the time of AEG’s submission,
the clock on the north wall of Room 1A read 10:07 a.m., AEG’s submission would be untimely.
If the contracting officer looked to that clock, she would have no choice but to deem AEG’s
submission late. However, if the contracting officer instead looked to her wristwatch, which read
10:00 a.m. despite the wall clock displaying 10:07 a.m., to determine that AEG’s submission was
timely, her decision to determine timeliness based on the time on her wristwatch would certainly
be unreasonable and contrary to the hypothetical RFP, which clearly states that timeliness would
be controlled by the “clock on the north wall of Room 1A.”

Here, the fact that the RFP contemplates electronic submissions does not change this
conclusion. Just as the hypothetical RFP mandated that timeliness be determined by the “clock
on the north wall of Room 1A,” the actual RFP here mandated that timeliness be determined by
the “receipt time stamp on the submission inbox.” Tab 10 at AR 208 (capitalization altered).
The contracting officer’s determination of timeliness through any other means than those
designated by the RFP—whether by looking to her wristwatch in the hypothetical, or by
allegedly looking to the time stamp on emails themselves, as the government argues here—
would violate the RFP. Such timeliness determinations would constitute “a significantly
different basis in evaluating the proposals than was disclosed [in the RFP].” G4S Secure
Integration, 161 Fed. Cl. at 410 (quoting Banknote Corp. of Am., 56 Fed. Cl. at 387).
Accordingly, that timeliness determination would not be “based on the criteria stated in the
solicitation” and would, therefore, be contrary to law. See Banknote Corp. of Am., 56 Fed. Cl. at
386.

4
https://dictionary.cambridge.org/dictionary/english/inbox (last visited May 2, 2025).
5
https://www.pcmag.com/encyclopedia/term/inbox (last visited May 2, 2025).
11
In the alternative, the government argues that, despite the contracting officer’s reliance on
the email time stamp rather than the inbox time stamp, AEG’s proposal was timely submitted
because it was received by the first government server before the deadline set by the RFP. ECF
No. 78 at 7–8. KHI counters that the RFP designated the “submission inbox,” not the “first
contact with a DoD system,” as the location designated for receipt of offers. ECF No. 68 at 6.
KHI is correct.

The express terms of the RFP established the inbox time stamp as determinative of the
timeliness of submissions. Tab 10 at AR 208. Nowhere in the RFP does the language
contemplate server time stamps as instructive for determining timeliness. Even if a server time
stamp could determine timeliness here (it cannot), the government’s own declaration is fatal to
its argument: “[w]hen using Microsoft Outlook, the time stamped in a recipient’s inbox as
received is based on the time the email was received by the first DLA Server.” ECF No. 50-1 ¶ 3
(emphasis added). Therefore, the inbox time stamp reflects the time “the first DLA server”
received the email, according to the government’s declarant. As noted above, the screenshot of
the contracting officer’s email inbox showed time stamps of 10:07 a.m. for AEG’s Volume 1 and
10:02 a.m. for AEG’s Volume 2. Tab 260 at AR 9592; ECF No. 65-1 at 2. These screenshots
confirm that the emails did not reach the “first DLA server” until after the 10:00 a.m. deadline
and are fatal to the government’s argument.

Nonetheless, the government provided another declaration, this time from the chief
technology officer for the Defense Information Systems Agency (“DISA”), to establish that, at
the very least, a Defense Department server received AEG’s submissions before the deadline.
See ECF No. 78-1. However, just as the above-discussed declaration fell short of proving the
government’s point, this declaration also does not save the day for the government’s argument.
The chief technology officer testified that “the first contact [of AEG’s submission] with DOD
systems was the TLS handshake between the Microsoft commercial Office 365 servers (where it
appears the sender is hosted) and DOD’s Enterprise Email Message Security Gateway (EEMSG)
systems which hosts the Mail Exchange (MX) record on behalf of DLA.” Id. at 2. Specifically,
he “observed initial contact (TLS handshake) with EEMSG at the following times: . . . ‘Air Card
Volume 1’: 8/19/2021 [9]:59:50[,] ‘Air Card Volume 2’: 8/19/2021 [9]:58:31.” Id. (times
adjusted from UTC to EDT).

Once again, that this is all the government’s own declarant would provide is telling, and
the declarant’s silence as to any explanation of what happened after the initial TLS handshake is
deafening. He states that AEG’s submissions contacted the first Defense Department servers at
9:58:31 a.m. and 9:59:50 a.m. but is silent as to when AEG’s submissions first contacted DLA’s
servers. Therefore, even if server time stamps were relevant, the government has proffered
evidence only as to when AEG’s submissions contacted DISA’s servers and has submitted no
evidence as to when AEG’s submissions may have made first contact with DLA’s servers.
Without evidence as to when AEG’s submissions first contacted DLA’s servers, the Court cannot
conclude that DLA’s servers received AEG’s submissions before the deadline. However,
regardless of any server time stamps proffered by the government, if DLA wanted server time
stamps to control timeliness of offers, DLA should have included such language in the RFP.
Instead, the RFP mandated that the “receipt time stamp on the submission inbox” controls for
determining timeliness of offers. Tab 10 at AR 208 (capitalization altered). Under the RFP’s

12
timeliness criteria, AEG’s proposal was late. The agency may not engage in post hoc amendment
of the terms of the RFP to justify its acceptance of AEG’s late submissions.

To recap, the RFP establishes 10:00 a.m. as the submission deadline and states that
“timeliness of an offer will be based upon the receipt time stamp on the submission inbox.” Id.
(capitalization altered). The receipt time stamps on the Energyfuelcards@dla.mil submission
inbox show that AEG’s Volumes 1 and 2 were received after 10:00 a.m. Because DLA did not
timely receive AEG’s proposal, AEG’s proposal is late and thus “tantamount to no proposal at
all.” Labatt, 577 F.3d at 1381.

b. No exception to the FAR’s “late is late” rule applies here.
In the alternative, AEG, but not the government, 6 argues that DLA did not err in
accepting AEG’s late proposal because the “government control” exception to the “late is late”
rule, found in FAR 52.212-1, applies. ECF No. 65-1 at 21. KHI argues that the government
control exception is inapplicable to this procurement because the exception does not apply to
electronic submissions, and here, offerors were required to electronically submitted their
proposals. See ECF No. 68 at 9–11.

Under FAR 52.212-1(f)(2)(i), “[a]ny offer, modification, revision, or withdrawal of an
offer received at the Government office designated in the solicitation after the exact time
specified for receipt of offers is ‘late’ and will not be considered” unless certain criteria are met.
Those criteria are that the offer, modification, revision, or withdrawal of the offer was “received
before the award was made,” “the Contracting Officer determines that accepting the late offer
would not unduly delay the acquisition,” and one of the following circumstances exists:

(A) If it was transmitted through an electronic commerce method authorized
by the solicitation, it was received at the initial point of entry to the Government
infrastructure not later than 5:00 p.m. one working day prior to the date specified
for receipt of offers; or

(B) There is acceptable evidence to establish that it was received at the
Government installation designated for receipt of offers and was under the
Government’s control prior to the time set for receipt of offers; or

(C) If this solicitation is a request for proposals, it was the only proposal
received.

48 C.F.R. § 52.212-1(f)(2)(i)(A)–(C). Bid protest litigants commonly refer to FAR
52.212-1(f)(2)(i)(A) as the “electronic commerce” exception and FAR 52.212-1(f)(2)(i)(B) as the

6
The government expressly disclaimed this argument. ECF No. 73 at 3 (“KHI argues
that the United States must be invoking (as AEG does) FAR 52.212-1(f)(2)(i)(B) for the notion
that the Government’s control of AEG’s email definitively establishes that AEG’s offer was
received in a timely manner. We are not. Simply put, the United States does not believe that the
plain language of the Government Control exception (FAR 52.212-1(f)(2)(i)(B)) applies to
electronic submissions.” (footnote and citation omitted)).
13
“government control” exception to FAR 52.212-1(f)(2)(i), which itself is referred to as the “late
is late” rule. See, e.g., eSimplicity, Inc. v. United States, 162 Fed. Cl. 372, 377 (2022); Fed.
Acquisition Servs. Team, LLC v. United States, 124 Fed. Cl. 690, 702–03 (2016).

AEG argues that Volume 1 of its proposal was timely under the government control
exception because there is “acceptable evidence”—via government email screenshots and
declarant testimony—to establish that AEG’s Volume 1 was in the government’s control “prior to
the time specified for receipt of offers.” ECF No. 65-1 at 20–21 (quoting eSimplicity, 162 Fed.
Cl. at 386); ECF No. 74 at 10. Specifically, AEG asserts that DLA “has provided acceptable
evidence showing AEG’s proposal . . . was received on-time: . . . Volume 1 reached
Energyfuelcards@dla.mil at 10:00 AM.” ECF No. 65-1 at 21 (emphasis in original).

However, AEG’s argument fails at the outset. As AEG noted in its MJAR—in text that
was not only bolded but was also underlined and italicized, lest the Court have any doubt as to
how important a point AEG was making—for the government control exception to apply, there
must be “acceptable evidence to establish that . . . [the proposal] was under the Government’s
control prior to the time set for receipt of offers . . . .” ECF No. 74 at 9 (emphasis in original).
Therefore, AEG’s argument that “acceptable evidence” in the form of email time stamp
screenshots showing “10:00 AM” for receipt of AEG’s Volume 1, ECF No. 65-1 at 20–21 (citing
Tab 260 at AR 9589), fails because a 10:00 a.m. time stamp does not show that the email was in
the government’s control “prior to the time set for receipt of offers,” which was 10:00 a.m.
48 C.F.R. § 52.212-1(f)(2)(i)(B) (emphasis added). AEG attempts to sidestep this conclusion by
arguing that “because all four volumes of AEG’s initial proposal were received by the
submission inbox on time and prior to 10:01 AM, AEG’s initial proposal was timely.” ECF No.
65-1 at 21. But the RFP does not establish 10:01 a.m. as the deadline for submissions—it
establishes “10:00 AM Eastern Daylight Time” as the deadline. Tab 11 at AR 614. Accordingly,
to fall under the government control exception, AEG’s Volume 1 must have been received at
9:59:59 a.m. or earlier to have been received “prior to” 10:00 a.m., which was the “time set for
receipt of offers.” 48 C.F.R. § 52.212-1(f)(2)(i)(B). Because AEG argues that acceptable
evidence in the form of email screenshots establishes that its Volume 1 submission was received
at 10:00 a.m., and not prior to 10:00 a.m., AEG’s argument fails, and its submission cannot fall
under the government control exception. See ECF No. 65-1 at 21; FAR 52.212-1(f)(2)(i)(B).

Even if metadata could cure AEG’s argument (it cannot, as AEG waived any such
argument by not raising it in its motion), 7 AEG’s Volume 1 submission was still late according to
the metadata for purposes of the government control exception. As the parties correctly note,
judges of this Court have reached differing conclusions as to whether the government control
exception applies to electronic submissions. In cases in which judges of this Court have found
that the government control exception applies to electronic submissions, they most often come to

7
AEG does not develop this argument in briefing. Instead, AEG tried to argue this point
at oral argument. See ECF No. 85 at 95:8–12. Although AEG waived any metadata argument
because it did not make such argument in its MJAR, the Court will discuss the argument anyway,
as the discussion further demonstrates the lateness of AEG’s proposal. Sarro & Assocs. v. United
States, 152 Fed. Cl. 44, 58 (2021) (“A party’s failure to raise an argument in an opening or
responsive brief constitutes waiver.”).
14
this conclusion either by holding that an email server is a “Government installation” for purposes
of the exception and/or by finding that inclusion of electronic submissions in the government
control exception would not render the electronic commerce exception surplusage, as prohibited
by the canon against surplusage. 8 See, e.g., eSimplicity, 162 Fed. Cl. at 384 (finding that the
government control exception applies to electronic communications because “it does not appear
that applying both exceptions to electronic proposals would in fact turn the electronic commerce
exception into surplusage”); Fed. Acquisition Servs. Team, 124 Fed. Cl. at 704 (“[T]he Court
holds that when an e-mailed proposal is received by the first server designated by the
government to receive e-mails directed to the address contained in a solicitation, it has been
‘received at the Government installation designated for receipt of offers,’ for purposes of the
Government Control exception.” (citation omitted) (quoting 48 C.F.R.
§ 52.215-1(c)(3)(ii)(A)(2))); Insight Sys. Corp. v. United States, 110 Fed. Cl. 564, 577, 578
(2013) (holding that the “Government Control exception does not exclude from its coverage
electronic communications” because “a server controlled by the government most certainly can
be an ‘installation’ that receives electronic submissions”); Watterson Constr. Co. v. United States,
98 Fed. Cl. 84, 98 (2011) (finding that the government control exception applies to non–batch
delivered electronic commerce because the “exception is not limited to any particular method of
delivery”).

Conversely, in cases in which judges of this Court have found that the government
control exception does not apply to electronic submissions, those judges determined that
inclusion of electronic submissions under the government control exception would make the
electronic commerce exception surplusage. See Conscoop v. United States, 62 Fed. Cl. 219,
239–40 (2004) (“The Court agrees with the GAO [which states:] . . . . ‘[W]e think the
[government control] exception necessarily applies only to the proposals delivered by other than
electronic means . . . [because if] late electronically transmitted proposals could be considered
for award under the second exception[,] . . . this would essentially render the first exception a
nullity.’” (quoting Sea Box, Inc., B-291056, 2002 WL 31445297, at *2 (Comp. Gen. Oct. 31,
2002))).

Looking first at whether including electronic submissions within the government control
exception would render the electronic commerce exception surplusage, the Court concludes that
such inclusion would not make the electronic commerce exception extra or unnecessary. The
Court finds Judge Schwartz’s reasoning in eSimplicity, Inc. v. United States instructive on this
point. 162 Fed. Cl. at 372. In that case, Judge Schwartz reached concluded that reading the
government control exception to encompass electronic submissions would not render the
electronic commerce exception surplusage by examining each of the three exceptions to the “late
is late” rule. See id. at 386–87. As Judge Schwartz reasoned, if the first two exceptions under
FAR 52.212-1(f) are read as exclusively applying to a particular means of submitting of an offer
or proposal, application of the third exception would then become problematic. Id. at 386. The
third exception to the “late is late” rule provides that a proposal received after the deadline will
not be considered late “[i]f th[e] solicitation is a request for proposals, [and] it was the only
proposal received.” 48 C.F.R. § 52.212-1(f)(2)(i)(C). But if the electronic commerce exception

8
Advoc. Health Care Network v. Stapleton, 581 U.S. 468, 477 (2017) (“[T]he so-called
surplusage canon [is] the presumption that each word Congress uses is there for a reason.”)
15
is the only exception that applies to electronic submissions, what would the Court do with an
otherwise late electronic submission of a proposal that also happened to be the only proposal
received, as contemplated by the third exception? See eSimplicity, 162 Fed. Cl. at 386 (“On the
government’s logic, then, the third exception should be the only exception applicable to
responses to requests for proposals. But the conditions for applying the exceptions overlap:
What to do with an electronic response to a request for proposals?” (emphasis omitted)). The
answer to this question, as Judge Schwartz further explained, is to not treat each exception as
having an exclusive domain: “[t]reating the exceptions as exclusive within their domains, as the
government contends is required by the rule that the specific displaces the general, puts them in
conflict. The way to avoid the conflict is to treat the exceptions as limited, but not exclusive—in
which case there is no reason for the electronic commerce exception to displace the government
control exception.” Id.

In addition, the government control exception requires satisfaction of elements that are
slightly different than and beyond that which must be satisfied to invoke the electronic
commerce exception. Whereas the electronic commerce exception requires only a showing that
the proposal was “received at the initial point of entry to the Government infrastructure not later
than 5:00 p.m. one working day prior to the date specified for receipt of offers,” 48 C.F.R.
§ 52.212-1(f)(2)(i)(A), to fall under the government control exception, two elements must be
met. First, there must be “acceptable evidence to establish that [the proposal] was received at the
Government installation designated for the receipt of offers . . . .” 48 C.F.R.
§ 52.212-1(f)(2)(i)(B). Second, the proposal must have been “under the Government’s control
prior to the time set for receipt of offers.” Id. Given these distinctions between the two
exceptions, there are scenarios in which an electronic submission could have been “received at
the initial point of entry to the Government infrastructure” for electronic commerce exception
purposes, yet not be “received at the Government installation designated for receipt of offers” or
“under the Government’s control” for government control exception purposes. Accordingly, at
least as the cannon against surplusage is concerned, reading the government control exception to
apply to electronic submissions is not problematic.

A more interesting question regarding the applicability of the government control
exception to electronic submissions is whether an email server is a “Government installation.”
When one thinks of a government installation, one of the first things that comes to mind is a
physical complex or building, especially a military base. For instance, 32 C.F.R. § 842.64(a)
defines “government installation” as “[a] United States Government facility having fixed
boundaries and owned or controlled by the government.” An email server, on the other hand, is
not likely the first thing one thinks of when reading the term “Government installation.” That
said, at least two judges of this Court have held that an email server is a government installation
for purposes of the government control exception. See Insight Sys. Corp., 110 Fed. Cl. at 577–
78; Fed. Acquisition Servs. Team, 124 Fed. Cl. at 704. Although the undersigned is disinclined to
believe that an internet server is a “Government installation” because a natural reading suggests
that a “Government installation” is a physical location, such as a building or military base, the

16
Court need not reach a definitive conclusion on that point here. 9 This is because even if an email
server does constitute a government installation, AEG’s argument clearly fails with regard to
other aspects of the government control exception.

As stated above, to fall under the government control exception, a party’s proposal must
satisfy two elements: (1) “[t]here is acceptable evidence to establish that [the proposal] was
received at the Government installation designated for the receipt of offers,” and (2) the proposal
must have been “under the Government’s control prior to the time set for receipt of offers.” 48
C.F.R. § 52.212-1(f)(2)(i)(B). AEG’s proposal fails to satisfy either element.

First, leaving aside whether an email server is a government installation, there is not
acceptable evidence to establish that AEG’s proposal was “received at the Government
installation designated for the receipt of offers.” AEG offers no argument or evidence that its
proposal was received at the government installation designated for the receipt of offers, which
would be a DLA email server, much less the server that houses the Energyfuelcards@dla.mil
inbox. Instead, AEG relies on the DISA chief technology officer’s declaration to argue that its
proposal was received at a “Government installation” because all four of its volume submissions
“reached [DISA] servers before the proposal deadline.” ECF No. 74 at 10 (emphasis omitted)
(citing ECF No. 64-1 at 2). However, alleging receipt by DISA servers is not enough, as DLA,
not DISA, is the procuring entity.

Once again, an in-person hypothetical may be instructive. Suppose that the RFP stated
that offers must be hand-delivered to the contracting officer at DLA headquarters at Fort Belvoir,
in Virginia, on or before 10:00 a.m. on the due date. Instead of delivering its proposal to DLA at
Fort Belvoir, an offeror sends its courier to hand-deliver its proposal to DISA headquarters at
Fort Meade in Maryland, and the courier makes delivery at 9:59 a.m. on the due date. In this
hypothetical, the offer would not have been timely received at the “Government installation
designated for receipt of offers.” 48 C.F.R. § 52.212-1(f)(2)(i)(B). Instead of delivering the
proposal to the designated installation, Fort Belvoir, the offeror delivered it to Fort Meade.
Although Fort Meade is certainly a “Government installation,” Fort Meade is not the
“Government installation designated for receipt of offers,” as DLA is not headquartered at Fort
Meade. Therefore, the offeror would not have timely delivered its offer to the designated
government installation.

Here, assuming arguendo that an email server is a government installation, the RFP
established the “submission inbox” for Energyfuelcards@dla.mil as the “Government installation
designated for receipt of offers.” See Tab 10 at AR 210. And just as the hypothetical offeror did
not timely submit its offer by hand-delivering the proposal to Fort Meade instead of Fort Belvoir,
AEG did not timely submit its offer because, at best, its offer only connected with DISA’s server
prior to the deadline, not DLA’s servers. But to be timely, the offer must have been received by

9
This is an area the FAR Council may want to consider revisiting, as the exceptions to
the “late is late” rule are not a picture of clarity, including the interplay between the electronic
commerce and government control exceptions, and especially with regard to whether an email
server is a “Government installation.”
17
the submission inbox of Energyfuelcards@dla.mil before the deadline, which the government’s
proffered screenshot proves was not the case. Tab 260 at AR 9592.

Moreover, even if AEG’s proposal made it as far as a DLA server before the deadline, the
proposal would still not fall under the government control exception. To extend the physical
delivery hypothetical, assume the RFP established that offerors must hand-deliver their proposals
to the contracting officer in Room 1A of DLA headquarters at Fort Belvoir by 10:00 a.m., and an
offeror, instead of delivering its proposal in Room 1A by 10:00, is wandering around Fort
Belvoir at 10:00 a.m. trying to find Room 1A. That offeror’s proposal would then not have been
received at the “Government installation designated for receipt of offers” because, while it was
somewhere on Fort Belvoir at 10:00 a.m., it was not delivered to Room 1A. The same logic
applies to AEG’s electronic submission. AEG’s proposal hitting a DLA server is insufficient to
satisfy the first prong of the government control exception, as the “Government installation
designed for receipt of offers” is the submission inbox of Energyfuelcards@dla.mil, not just any
DLA server generally. In fact, AEG did not even attempt to establish that its proposal at least
made it to the DLA server that hosts the inbox for Energyfuelcards@dla.mil prior to the deadline
for proposal submission.

Second, AEG fails to establish that its proposal was “under the Government’s control
prior to the time set for receipt of offers.” 48 C.F.R. § 52.212-1(f)(2)(i)(B). AEG had to show, at
the very least, that DLA servers received AEG’s proposal before the deadline, and the chief
technology officer’s testimony on which it relies does not establish this. The chief technology
officer only testified that he “observed initial contact (TLS handshake) with EEMSG at the
following times[]: . . . Volume 1: . . . 09:59:50 AM EST.” ECF No. 78-1 at 2. But just because
servers initiated a TLS Handshake or because an email is in an EEMSG does not mean that the
email is in the government’s control. That is because a TLS Handshake and passage through an
EEMSG take place before email messages are even transmitted.

In layman’s terms, a “TLS Handshake” occurs when servers exchange messages and
certificates to establish a secure connection. TLS Handshake Protocol, MICROSOFT WINDOWS
APP DEVELOPMENT (Jan. 7, 2021). 10 Once complete, the “[c]lient and server can now exchange
application data over the secured channel they have established.” Id. (emphasis added); see also
An Overview of the SSL/TLS Handshake, IBM (Jan. 30, 2025) 11 (stating that, after a TLS
handshake establishes exchange of server certificates and symmetrically encrypted shared secret
keys, the server and client can then exchange messages for the duration of the TLS session). In
other words, a TLS Handshake is a precursor to the transmission of data between servers.

Similarly, an EEMSG is a security tool that acts as a firewall for email, scanning
incoming and outgoing emails for malicious content, spam, and other risks before they reach
users’ inboxes, preventing potential threats. See DEPARTMENT OF DEFENSE, CLOUD COMPUTING
SECURITY REQUIREMENTS GUIDE 123 (2017) 12 (“All email transfers inbound through the IAP
from an external email server destined to a L4/5 email server . . . must pass through the EEMSG

10
https://learn.microsoft.com/en-us/windows/win32/secauthn/tls-handshake-protocol.
11
https://www.ibm.com/docs/en/ibm-mq/9.4.x?topic=tls-overview-ssltls-handshake.
12
https://rmf.org/wp-content/uploads/2018/05/Cloud_Computing_SRG_v1r3.pdf.
18
inbound protections.”). Therefore, an EEMSG is a security protocol that occurs before messages
reach a user’s inbox for firewall purposes. There is no guarantee that an email that enters the
EEMSG will be delivered to the recipient’s inbox, or even be retrievable by the recipient,
because the vast majority of emails sent through the EEMSG are blocked for firewall purposes.
See Thuy Che, Enterprise Email Security Gateway, DISA Cyber Security and Analytics
Directorate 22 (Apr. 28, 2022) 13 (“Over 85% of Inbound email is dropped due to sender
reputation.”). Because the EEMSG blocks many emails from entry to government email
inboxes—and such emails are, therefore, unretrievable by the recipient—the fact that they
entered the EEMSG cannot, by itself, constitute government control over those emails.

All in all, the chief technology officer’s testimony is not helpful to establish AEG’s
argument, as all he “observed” was the “initial contact (TLS Handshake) with EEMSG”—two
processes that take place before any transmission of data from sender to recipient—at “09:59:50
AM” for AEG’s Volume 1 submission. ECF No. 78-1 at 2. Put differently, the chief technology
officer only testified that the precursors to delivering AEG’s email containing its proposal took
place one minute and ten seconds before the deadline established by the RFP passed or, as
relevant to the government control exception, ten seconds prior to the deadline. Neither the
government nor AEG proffered evidence or moved to supplement the administrative record with
any other information indicating that DLA had control of AEG’s proposal prior to the 10:00 a.m.
deadline. Without more, the Court cannot conclude that the Energyfuelcards@dla.mil
submission inbox, or even DLA servers for that matter, received AEG’s proposal before the
deadline. For these reasons, the Court concludes that AEG has not “met its burden of proof
based on the evidence in the record.” See Jordan Pond Co., LLC, 115 Fed. Cl. at 630.

Although the government control exception to the FAR’s “late is late” rule may
encompass electronic submissions (assuming an email server is a “Government installation”),
AEG’s late proposal does not fit within this exception because AEG failed to prove both that
there is “acceptable evidence to establish that [its proposal] was received at the Government
installation designated for receipt of offers” and that its proposal “was under the Government’s
control prior to the time set for receipt of offers.” 48 C.F.R. § 52.212-1(f)(2)(i)(B). Therefore,
the government control exception does not apply to AEG’s otherwise late proposal.

c. DLA’s acceptance of AEG’s late proposal prejudiced KHI.

As the Federal Circuit has conclusively stated, “a late proposal is tantamount to no
proposal at all.” Labatt, 577 F.3d at 1381. Therefore, DLA’s acceptance of AEG’s late proposal
constitutes error because it violates the FAR’s “late is late” rule. However, to succeed in a bid
protest, even if a protestor demonstrates a violation of law, the protestor must also establish that
the violation was prejudicial. To establish prejudice in the post-award bid protest context, a
protestor “must show that there was a ‘substantial chance’ it would have received the contract
award but for the errors” in the procurement process. Bannum, Inc., 404 F.3d at 1353 (quoting
Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003); Alfa
Laval, 175 F.3d at 1367).

13
https://events.afcea.org/afceacyber22/Custom/Handout/Speaker0_Session9376_1.pdf.
19
Here, if AEG effectively submitted no proposal at all because it submitted a late proposal,
KHI would be the only other acceptable offeror left to which DLA could award the contract.
Accordingly, DLA’s acceptance of AEG’s late proposal is obviously prejudicial to KHI. KHI
suffered prejudice because, but for DLA’s acceptance of AEG’s late proposal and subsequent
award of the contract to AEG, KHI would have been either selected as awardee of the contract or
permitted to submit another offer during re-solicitation. See Bannum, Inc., 404 F.3d at 1353.
Even if there were multiple acceptable offerors, which is not the case here, the elimination of one
offeror leads to much greater odds of selection of the remaining offerors. But given that KHI
was the only other acceptable offeror, prejudice to KHI cannot be more apparent.

In an attempt to persuade the Court that KHI faces no prejudice by AEG’s award of the
contract, AEG relies on Insight Public Sector, Inc. v. United States, 161 Fed. Cl. 760 (2022), and
KGL Food Services, WLL v. United States, 153 Fed. Cl. 497 (2021). ECF No. 74 at 9–16.
Neither case, however, supports AEG’s contentions. In Insight Public Sector, the protestor
argued, inter alia, that “Dell Marketing [the awardee] should not have been eligible for the award
because its initial proposal did not comply with the RFQ requirements within the time frame
required by the RFQ.” 161 Fed. Cl. at 804 (internal quotation marks and alterations omitted). In
other words, the protestor argued that the Dell Marketing’s proposal was late under Labatt and
the “late is late” rule. Judge Roumel rejected this argument, though, and determined that “Dell
Marketing submitted its initial proposal with the [agency’s] requested additions by the April 7,
2021 close of business deadline.” Id. at 805. Moreover, she determined that the “late is late”
rule was not even applicable to the FAR part 8 procurement at issue in that case. Id. (“[T]he ‘late
is late’ principle is inapplicable here.”). Simply put, in Insight Public Sector, the challenged
proposal was not late and the “late is late” rule did not even apply; that is not the case here.
Thus, Insight Public Sector is easily distinguishable and does not support AEG’s argument. To
the extent that AEG is merely relying on a stray quote from Computer Science Corp. v. United
States, 51 Fed. Cl. 297 (2002), used in dicta in Insight Public Sector, it is obvious why AEG did
not quote Computer Science Corp. directly, as that quote—an “evaluation of [the bidder’s] initial
proposal is irrelevant”—has nothing whatsoever to do with the “late is late” rule. Insight Pub.
Sector, Inc., 161 Fed. Cl. at 804 (alteration in original) (quoting Comp. Sci. Corp., 51 Fed. Cl. at
308). Rather, in Computer Science Corp., Judge Futey made the unremarkable observation that
the fact that an initial proposal was poorly rated does not mean that a revised final proposal
should not have received favorable ratings. 51 Fed. Cl. at 308. Stated differently, that
“evaluation of [the bidder’s subpar] initial proposal is irrelevant” to the evaluation of a revised
proposal says nothing about prejudice under the “late is late” rule. Id.

Similarly, AEG’s reliance on KGL Food Services is inapposite. In that case, the agency
initially set a deadline for revised proposal submissions of “3:00 PM Eastern Time (ET) on
Friday, May 22, 2020.” 153 Fed. Cl. at 501. Five of the six offerors that submitted initial
proposals submitted revised proposals by that deadline. Id. at 505 (“The DISA’s report
confirmed that five of the six emails arrived before 3 p.m. on May 22, 2020, and the sixth arrived
at 4:08 p.m.”). The agency, however, did not receive the sixth offeror’s revised proposal by the
deadline. Id. The agency in that procurement erroneously determined that submissions could
not be timely delivered to the agency due to “ongoing internal [agency] network issues,” and
modified the submission deadline, allowing for revisions to proposals to be submitted by a new
deadline of “9:00 AM ET on Monday, June 1, 2020.” Id. at 503. The protestor argued that the

20
agency erred by revising the submission deadline and that one of the offerors should be excluded
from competition because its revised proposal was not received by the original deadline. Id. at
511. The Court determined that the protestor was correct but that the protestor was not
prejudiced by the agency’s error. AEG relies on KGL Food Services because of this prejudice
determination. But there is a salient fact that makes KGL Food Services distinguishable and
AEG’s reliance upon it misplaced. While in that case one of the offeror’s missed the deadline for
revised proposals, that offeror did timely submit its initial proposal. Based on submission of a
timely initial proposal that offeror was not necessarily excluded from competition (and thus the
protestor did not demonstrate prejudice) because the agency potentially could have considered
the timely initial proposal against the other offerors’ timely revised proposals. But the KGL
Food Services court determined it could not “decide this issue on the record before it” and thus
the protestor had not carried its burden to establish prejudice. Id. at 512. Here, AEG failed to
meet the initial proposal deadline and, therefore, should have been excluded from competition
under the “late is late” rule. Accordingly, unlike in KGL Food Services, here, there is no
question regarding the consequence of the late submission, and the Court is not presented with a
prejudice question it cannot answer on the record before it.

In sum, DLA’s acceptance of AEG’s late proposal and subsequent award of the contract
to AEG was contrary to law and prejudiced KHI, the only other acceptable offeror.

2. While DLA’s Post-FPR Communications with AEG Constituted Improper
Discussions, KHI Has Not Established Prejudice for this Procurement Error.

KHI next argues that AEG’s failure to include a certification required under the
Preliminary Evaluation Factor, and DLA’s post-FPR discussions with AEG that allowed AEG to
fix this mistake, constituted “yet another opportunity [for AEG] to submit a compliant FPR
against the threshold gate after the common deadline,” which, in KHI’s view, “prejudicially
violated the RFP, FAR 15.307 (and the fairness principles that underlie it).” ECF No. 47-1 at 20.
The government and AEG respond by arguing that DLA’s communications with AEG are
“properly understood to be clarifications, and not discussions.” ECF No. 78 at 28; see also ECF
No. 65-1 at 29. In the alternative, the government argues that even if DLA’s communications
with AEG were discussions, such discussions were “undertaken as necessary corrective action to
ensure meaningful discussions with all offerors.” ECF No. 78 at 31.

As relevant here, the FAR distinguishes agency “exchanges” with offerors as either
“discussions” or “clarifications.” 14 48 C.F.R. § 15.306. The FAR defines “discussions” as
“negotiations [that] are conducted in a competitive acquisition . . . [that] take place after
establishment of the competitive range.” Id. § 15.306(d). Such discussions must be “tailored to
each offeror’s proposal[] and must be conducted by the contracting officer with each offeror
within the competitive range.” Id. § 15.306(d)(1) (emphasis added). Conversely, the FAR

14
FAR 15.306 also includes another category of exchanges: “communications.”
According to the FAR “[c]ommunications are exchanges, between the Government and offerors,
after receipt of proposals, leading to establishment of the competitive range.” 48 C.F.R. §
15.306(b). In other words, under the FAR there are three types of “[e]xchanges with offerors
after the receipt of proposals”: clarifications, communications, and discussions. Id. § 15.306.
21
defines “clarifications” as “limited exchanges, between the Government and offerors, that may
occur when award without discussions is contemplated.” Id. § 15.306(a)(1).

The distinction between discussions and clarifications is salient because case law
establishes different rules for agency exchanges with offerors depending on whether that
exchange is a discussion or clarification. For example, material errors cannot be fixed through a
clarification. See ManTech Advanced Sys. Int’l Inc. v. United States, 141 Fed. Cl. 493, 508
(2019) (“Material changes to proposals can only be accomplished through discussions and not
through clarifications.”). Any exchanges that cure, or attempt to cure, a material error are
considered discussions under the FAR. See id. An error is material, in turn, if “the error (1)
violates an express provision of the RFP and (2) the RFP provision violated serves a substantive
purpose in the evaluation process.” Id. (citing Bus. Integra, Inc. v. United States, 116 Fed. Cl.
328, 333 (2014)). And an RFP provision has a substantive purpose if that provision “is important
to the government’s evaluation, is binding on the offeror, or has more than a negligible impact on
the price, quantity, or quality of the bid.” Id.

The RFP in this procurement required, under “Preliminary Evaluation Factor—No Cost,”
that offerors include a certification that their proposal will be completed at no cost to the
government. Tab 174 at AR 5434 (capitalization altered). Specifically, the RFP delineated that
an “acceptable” offer would contain “no fee, cost, or any other charge to the Government for the
proposed work” and would include a certification stating verbatim: “[t]his is an offer for a
contract at no cost to the Government. The offeror certifies that the proposal does not contain
any fees, costs, or charges to the Government.” Id. The RFP also states that an “unacceptable”
offer either contains “a fee, cost, or other charge to the Government for the proposed work, or
the proposal lacks the following certification: ‘This is an offer for a contract at no cost to the
Government. The offeror certifies that the proposal does not contain any fees, costs, or charges
to the Government.’” Id. (emphasis added). According to the RFP, “[i]f an offeror is rated
‘Unacceptable’ under the preliminary evaluation factor, the offeror will not be eligible for
award,” and “if such an unacceptable offer has not already been removed from the competition
as of the deadline to submit final offers, the offer will not be evaluated under the Weighted
Evaluation Factors and will be eliminated from the competition.” Id. (emphasis added).

Despite this clear instruction, AEG did not include the certification required under the
Preliminary Evaluation Factor in its proposal. Instead, AEG certified the following: “[t]here are
no costs to the Government for this program. Contractor revenue is derived solely from the fees
charged to the merchants and a portion of these are refunded back to DLA. The terms and
conditions for design, use, fees and refunds are fully spelled out in the Solicitation which
combined with this response will encapsulate the terms and conditions for the AIR Card©
program.” Tab 207 at AR 7178. It is undisputed that this is not the certification required under
the Preliminary Evaluation Factor. In March 2024, DLA realized that AEG’s certification was
noncompliant. Tab 210 at AR 7642, 7641 (“AEG changed the certification language . . . . It is
unclear why AEG made this change because the discussion letter sent to AEG as part of the
corrective action did not address Volume 4.”). DLA observed that “[a]lthough the revised
language substantially meets the purpose of the certification language included in the preliminary
factor and indicates that AEG will not charge costs to the Government, the preliminary factor
requires offerors to provide that exact statement in their certifications.” Id. at 7641. DLA further

22
determined that “it is necessary to re-open discussions with AEG for the limited purpose of
raising [the certification] issue.” Id. at AR 7642. According to DLA, these discussions would
only consist of informing AEG “that the RFP requires that specific certification language under
the preliminary evaluation factor and it will be given an opportunity to revise only that aspect of
its Volume 4 proposal.” Id.

KHI contends that this exchange constitutes “discussions” as defined by the FAR. See
ECF No. 47-1 at 18. KHI argues that because “failure to provide the certification renders the
proposal unacceptable and ineligible for award,” DLA’s communication provided AEG the
opportunity to cure its certification defect and, therefore, circumvented elimination from
competition. See id. KHI is correct. This “no cost” certification is the backbone of DLA’s
ability to ensure that all proposals would be at no cost to the government. The certification is an
“express provision of the RFP” that serves a “substantive purpose in the evaluation process,” as
it ensures that an offeror has not hidden some cost to the government in what is supposed to be a
no-cost procurement. See ManTech Advanced Sys., 141 Fed. Cl. at 508. The fact that DLA
required this certification to be included verbatim in each offeror’s proposal to satisfy the
Preliminary Evaluation Factor and to be considered for award underscores the importance of the
certification, further demonstrating the “substantive purpose” it serves in the evaluation process.
See Tab 174 at AR 5434. Therefore, AEG’s failure to include a compliant certification
constituted a material error in its proposal. Such material errors can only be cured via
discussions, not clarifications. See Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 998 (Fed.
Cir. 2018) (“Clarifications are not to be used to cure proposal deficiencies or material omissions,
materially alter the technical or cost elements of the proposal, or otherwise revise the proposal.”
(quoting JWK Int’l Corp. v. United States, 52 Fed. Cl. 650, 661 (2002), aff’d, 56 F. App’x 474
(Fed. Cir. 2003))). For this reason, the government and AEG’s clarification arguments fail, and
DLA’s exchange with AEG was a “discussion” under the FAR.

Furthermore, the timing of exchanges can indicate whether they are better classified as
discussions or clarifications. FAR 15.306(d) authorizes agencies to conduct “discussions” with
offerors once the competitive range is determined. “If the agency decides to award the contract
after holding discussions, it must hold discussions with all responsible offerors within the
competitive range.” Wavelink, Inc. v. United States, 154 Fed. Cl. 245, 269 (2021) (quoting Info.
Tech., 315 F.3d at 1318); see also 48 C.F.R. § 15.306(d)(1) (setting forth that after establishing
the competitive range, any discussions conducted by an agency must be “tailored to each
offeror’s proposal, and must be conducted by the contracting officer with each offeror within the
competitive range” (emphasis added)). Once discussions have occurred, “each offeror still in the
competitive range shall be given an opportunity to submit a final proposal revision.” 48 C.F.R. §
15.307(b); see also Omniplex World Servs. Corp. v. United States, 105 Fed. Cl. 706, 715–20
(2012). As such, “[t]he acid test for deciding whether an agency has engaged in discussions is
whether the agency has provided an opportunity for quotations or proposals to be revised or
modified.” WaveLink, 154 Fed. Cl. at 269 (quoting Consol. Eng’g Servs., Inc. v. United States,
64 Fed. Cl. 617, 626 (2005)).

Here, in February 2024, DLA provided both AEG and KHI the opportunity to submit
FPRs as part of the corrective action it undertook in response to KHI’s most recent GAO protest.
Tab 205 at AR 6810 (AEG FPR invitation letter); Tab 206 at AR 6816 (KHI FPR invitation

23
letter). After establishing the competitive range, any discussions DLA had must have been
conducted with “each offeror within the competitive range.” 48 C.F.R. § 15.306(d)(1). It is
undisputed that DLA subsequently contacted AEG on March 18, 2024, regarding its failure to
include the verbatim “no cost” certification required by the RFP. Tab 210 at AR 7641–42; Tab
211 at AR 7643–44; ECF No. 47-1 at 19; ECF No. 78 at 32; ECF No. 65-1 at 29. DLA engaged
in no similar discussions with KHI after its February 2024 letter inviting KHI to submit FPRs.
Therefore, because DLA only contacted AEG, and not KHI, after receiving FPRs, DLA’s March
18, 2024, exchange with AEG constitutes post-FPR discussions that violate FAR 15.306(d)(1).

Having established that DLA’s unlawful post-FPR exchanges with AEG are discussions
under the FAR, the Court turns to whether such discussions prejudiced KHI. KHI argues that
“had DLA included KHI in further discussions and called for further FPRs, KHI would have
improved its proposal and its price as it had done on each other occasion it received such an
opportunity.” ECF No. 47-1 at 21 (citing Tab 79; Tab 194; Tab 208; Tab 91 at AR 2739; Tab 218
at AR 7790). However, this argument alone is insufficient to establish prejudice. While DLA
did participate in unlawful post-FPR discussions, KHI fails to state what, specifically, it would
have modified, had it been included in these discussions, beyond vague references to pricing
changes. KHI did not submit a declaration or any other evidence regarding how KHI would
have modified its prices if it had been included in discussions. Put differently, there is no factual
support in the record for KHI’s assertion that it would have changed its prices if it had been
included in discussions. Instead, KHI cites price changes in earlier versions of its proposal that
were separated by nearly two years as evidence that it would have changed its pricing during the
mere hours that discussions regarding correcting AEG’s certification were open on March 18,
2024. See ECF No. 47-1 at 21 (comparing Tab 91 at AR 2739, showing a 1.0% price-refund
offered on June 3, 2022, with Tab 218 at AR 7790, showing a 1.4% price refund offered on May
8, 2024); see also Tab 211 at AR 7643–44 (both informing AEG of the certification issue on, and
requiring AEG to provide the certification language by, March 18, 2024).

Even if KHI had offered evidence that it would have revised its price proposal if DLA
had conducted discussions with all offerors, KHI’s argument still fails. DLA re-opened
discussions with AEG “for the limited purpose of raising” the Preliminary Evaluation Factor
certification issue. See Tab 210 at AR 7642. DLA only permitted AEG to provide a “revised
Volume 4, page 6 . . . to the Government in response to the finding expressed in this letter . . . .”
Tab 211 at AR 7644. In other words, DLA only permitted AEG to provide the verbatim
certification required by the Preliminary Evaluation Factor and nothing more. Contracting
officers may, within their discretion, limit the scope of discussions. 48 C.F.R. § 15.306(d)(3)
(“The scope and extent of discussions are a matter of contracting officer judgment.”); see also
ENGlobal Gov’t Servs., Inc. v. United States, 159 Fed. Cl. 744, 755 (2022) (“This Court has
approved, for example, of an agency’s ability to limit the scope of discussions following
corrective action.”). Thus, the contracting officer was within her discretion to limit the scope of
these re-opened discussions only to cure AEG’s noncompliant certification. Given that any re-
opened discussions were limited only to curing AEG’s noncompliant certification, KHI cannot
assert that it would have revised its price proposal had DLA re-opened discussions with KHI as
well, because DLA did not re-open discussions for that purpose. For this second reason, KHI’s
prejudice argument also fails.

24
The Court cannot find prejudice on the record with the lack of evidence proffered by KHI
here. See Jordan Pond Co., LLC, 115 Fed. Cl. at 630 (stating that judges may grant a party’s
MJAR if the party meets its burden of proof in showing prejudicial error). For this reason,
although DLA engaged in unlawful post-FPR discussions by only communicating with AEG to
cure a material error after establishment of the competitive range, KHI fails to establish that it
was prejudiced by these unlawful discussions. Because a showing of prejudice is required to
establish entitlement for relief, see Data Gen. Corp., 78 F.3d at 1562, and KHI fails to make such
a showing, the Court cannot grant KHI’s motion on this count.

3. KHI’s Arguments Regarding AEG’s Organizational Conflicts of Interest Fail.

KHI makes two arguments regarding AEG’s Organizational Conflict of Interest (“OCI”)
mitigation plans. First, KHI argues that a statute bars an awardee of this contract from having
any OCIs; therefore, because AEG has OCIs that it intends to mitigate, DLA’s award of the
contract to AEG is not in accordance with law. ECF No. 47-1 at 23–26. Second, KHI asserts
that AEG has unmitigable impaired objectivity OCIs; thus, DLA’s award to AEG despite these
OCIs was irrational. Id. at 26–30. The Court addresses these arguments in the order presented.

a. KHI lacks standing to challenge DLA’s award under section 886.

KHI first argues that the Court need “not delve into the substance of [AEG’s] OCIs”
because “Congress has prohibited DLA from awarding the contract to an offeror if any OCI
exists.” Id. at 23. Specifically, KHI draws the Court’s attention to the Servicemember Quality of
Life Improvement and National Defense Authorization Act for Fiscal Year 2025, Pub. L. No.
118-159, § 886, 138 Stat. 1773, 2022–23 (2024) (“section 886”). According to KHI, section 886
requires “DLA not only to ensure no OCI exists but also to certify to Congress ‘that no conflict
of interest exists’—not that a conflict was identified and mitigated, but that a conflict of interest
does not exist.” ECF No. 47-1 at 24 (emphasis in original) (quoting section 886(c)).

The government responds by arguing that the plain language and legislative history of
section 886 support the notion that awardees of the AIR Card contract may have OCIs, so long as
they properly mitigate those OCIs. ECF No. 78 at 34–37. In response, AEG moved the Court
under RCFC 12(b)(6) to dismiss for failure to state a claim. See ECF No. 65-1 at 11–19. AEG
argues that the Court lacks jurisdiction over KHI’s section 886 claim because such a claim
pertains to contract administration, a topic beyond the Court’s bid protest jurisdiction under the
Tucker Act. Id. at 15–16. Additionally, AEG argues that KHI lacks Article III standing to bring
its section 886 claims because “KHI can neither demonstrate how a potential future funding
limitation would cause it any injury nor how this Court could offer KHI any relief” for violation
of the statute. Id. at 16. AEG argues in the alternative that KHI’s section 886 claim is not ripe
for adjudication because section 886 “only gives rise to a temporal limitation on payment come
June 1, 2025,” and, as “June 1 is . . . months away, KHI’s protest grounds based on Section 886
are not ripe and are premised on hypothetical scenarios as to what may occur in the future.” Id.
at 19. AEG is correct that KHI lacks standing to make its section 886 argument and is correct
that, even if KHI had standing, KHI’s section 886 argument is nonetheless not ripe for
adjudication.

25
Article III standing is a prerequisite to the Court exercising subject matter jurisdiction.
Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, 85 F.4th 1377, 1380 (Fed. Cir.
2023) (“To establish a case or controversy, a party invoking federal jurisdiction must meet the
‘irreducible constitutional minimum of standing.’” (quoting Lujan v. Defs. of Wildlife, 504 U.S.
555, 560 (1992))). In Lujan v. Defenders of Wildlife, the U.S. Supreme Court delineated three
elements a plaintiff must prove to meet its burden to demonstrate standing. 504 U.S. at 555.
First, a plaintiff must have suffered an “injury in fact—an invasion of a legally protected interest
which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or
hypothetical.” Id. at 560 (citations, quotation marks, and footnote omitted). Second, “there must
be a causal connection between the injury and the conduct complained of—the injury has to be
‘fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the
independent action of some third party not before the court.’” Id. at 560–61 (alterations in
original) (quoting Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 41–42 (1976)). Third, “it must
be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable
decision.’” Id. at 561 (quoting Simon, 426 U.S. at 38, 43).

KHI’s section 886 argument fails because KHI has not established that it has Article III
standing to bring such claim. For instance, KHI has not demonstrated how it has suffered an
“injury in fact” that is “concrete and particularized” or “actual or imminent” based on an alleged
violation of section 886. See id. at 560. Section 886 merely provides that the “Secretary of
Defense shall submit to the Committees on Armed Services of the Senate and House of
Representatives a written certification that no conflict of interest exists with respect to a contract
for financial management services for fuel contracts of the Department of Defense.” Section
886(c). Congress established a deadline of January 22, 2025, thirty days after the statute’s
enactment, by which the Secretary of Defense must provide that certification. See Tab 259 at AR
9583; see also section 886(b). However, any consequence for violating section 886 comes in the
form of a funding freeze, effective June 1, 2025, that lasts until the end of the 2025 fiscal year.
See section 886(d). A potential four-month freeze on funding for a contract to which KHI is not
even a party cannot give rise to a particularized or concrete injury. Furthermore, regarding
DLA’s potential violation of section 886, KHI is not an injured party. If anything, Congress
would be the injured party, as the “injury” here is DLA’s failure to provide the statutorily
prescribed certification to Congress. For these reasons, KHI’s alleged injury does not satisfy the
first prong of the Lujan standing analysis.

Even if KHI had alleged a sufficient injury in fact, KHI’s injury would not be redressable.
The remedy for any injury caused by DLA’s failure to provide the required certification to
Congress would be the funding freeze. In other words, Congress has already established the
remedy for violations of section 886, and that remedy does not, in any way, redress KHI’s
alleged “injury” by any violation of section 886. If, instead, section 886 prohibited DLA from
entering into a contract unless it provided Congress with the required certification, KHI would
potentially have standing here—although, even then, KHI’s standing would be questionable. But
that is not what section 886 says. The statute only requires the Secretary of Defense to provide
the required certification or be subject to a funding freeze, effective June 1, 2025. See section
886(d). Therefore, any “injury” potentially caused by a violation of section 886 is not
redressable by this Court, and KHI accordingly fails to satisfy the third prong of the Lujan
standing analysis.

26
Although KHI fails to clear the standing hurdle to bringing a challenge under section 886,
even if it had standing, it would then run into another hurdle in the form of ripeness for
adjudication. A claim accrues and is, therefore, ripe “when all the events have occurred which
fix the liability of the Government and entitle the claimant to institute an action.” See Goodrich
v. United States, 434 F.3d 1329, 1333 (Fed. Cir. 2006) (quoting Hopland Band of Pomo Indians
v. United States, 855 F.2d 1573, 1577 (Fed. Cir. 1998)); see also Doe v. Va. Dep’t of State Police,
713 F.3d 745, 758 (4th Cir. 2013) (“A claim should be dismissed as unripe if the plaintiff has not
yet suffered injury and any future impact ‘remains wholly speculative.’” (quoting Gasner v. Bd.
of Supervisors, 103 F.3d 351, 361 (4th Cir. 1996))).

KHI’s section 886 claim has not accrued because not “all the events have occurred which
fix the liability of the Government” and entitle KHI to relief. See Goodrich, 434 F.3d at 1333.
While DLA stated that it would not meet Congress’s certification deadline of January 22, 2025,
and it told Congress it would provide the required certification “by the end of March 2025,” Tab
259A at AR 9585, the funding freeze contemplated by the statute does not come into effect until
June 1, 2025. Section 886(d). It is well established that “courts must presume that a legislature
says in a statute what it means and means in a statute what it says there.” Barnhart v. Sigmon
Coal Co., Inc., 534 U.S. 438, 461–62 (2002) (quoting Conn. Nat. Bank. v. Germain, 503 U.S.
249, 253–54 (1992)). With this canon of statutory interpretation in mind, the Court notes that
Congress did not set a potential funding freeze to commence the day after January 22, 2025, if
certification did not timely occur, but instead provided that such a freeze would not start until
June 1, 2025, if necessary. That June 1 is not the day after January 22 suggests that Congress
contemplated some sort of process between the two dates before jumping to a funding freeze.
Nevertheless, any potential funding freeze appears to be curable if DLA provides the required
certification before June 1, 2025. Therefore, KHI’s section 886 challenge fails because it is not
yet ripe for adjudication, even if Article III standing existed.

b. KHI fails to demonstrate that DLA irrationally evaluated AEG’s OCI
mitigation plan.

KHI also argues that AEG has an unmitigable impaired objectivity OCI as both a fuel
merchant that supplies fuel to DLA and as the prospective administrator of the AIR Card
program. ECF No. 47-1 at 26. Specifically, KHI states that AEG’s plan to mitigate its OCIs—by
creating a firewalled division to handle work with which AEG would have a conflict of
interest—is inadequate because “organizational separation does not mitigate an impaired
objectivity OCI as a matter of law.” Id. at 28. Therefore, according to KHI, DLA erred by
awarding the contract to AEG despite AEG’s OCI mitigation plan. See id. at 26.

The government responds by reminding the Court that its task here is “limited to a
determination whether DLA’s acceptance of AEG’s mitigation plan was reasonable.” ECF No.
78 at 38. The government cites numerous cases to argue that “this Court has recognized that
organizational separation involving a firewall is a means to sufficiently mitigate impaired
objectivity OCI.” Id. at 39; see also id. at 39–40. The government further argues that DLA
reasonably determined that AEG’s OCI mitigation plan sufficiently mitigated any impaired
objectivity OCI. Id. at 41–46. AEG responds by arguing that DLA reasonably evaluated AEG’s

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OCI plan, that case law recognizes organizational separation as sufficient to mitigate impaired
objectivity OCIs, and that KHI’s allegations conflict with the record. ECF No. 65-1 at 33–38.

FAR 9.504(a) provides that contracting officers “shall analyze planned acquisitions in
order to- (1) Identify and evaluate potential organizational conflicts of interest as early in the
acquisition process as possible; and (2) Avoid, neutralize, or mitigate significant potential
conflicts before contract award.” See also Turner Constr. Co. v. United States, 645 F.3d 1377,
1386 (Fed. Cir. 2011). “A significant potential conflict [of interest] is one which provides the
bidding party a substantial and unfair competitive advantage during the procurement process on
information or data not necessarily available to other bidders.” PAI Corp. v. United States, 614
F.3d 1347, 1352 (Fed. Cir. 2010). FAR 9.504(e) further provides that “[t]he contracting officer
shall award the contract to the apparent successful offeror unless a conflict of interest is
determined to exist that cannot be avoided or mitigated.” Still, “the FAR recognizes that the
identification of OCIs and the evaluation of mitigation proposals are fact-specific inquiries that
require the exercise of considerable discretion.” Axiom Res. Mgmt. v. United States, 564 F.3d
1374, 1382 (Fed. Cir. 2009) (citing 48 C.F.R. § 9.505). The Court thus evaluates an agency’s
determination that an offeror’s mitigation plan sufficiently remedied an OCI for reasonableness.
Paradyme Mgmt. v. United States, 167 Fed. Cl. 180, 185–86 (2023)

“An ‘impaired objectivity’ OCI ‘occurs when a government contractor has conflicting
obligations under different government contracts,’” Sigmatech, Inc. v. United States, 144 Fed. Cl.
159, 181 (2019) (quoting Axiom Res. Mgmt., 78 Fed. Cl. at 592 n.17), or “is tasked with
‘evaluat[ing] its own offers for products or services, or those of a competitor,’” Paradyme
Mgmt., 167 Fed. Cl. at 186 (alteration in original) (quoting 48 C.F.R. § 9.505-3). “The primary
concern under this type of OCI is that a firm might not be able to render ‘impartial advice’ due
to” its other contract obligations or “its relationship with the entity being evaluated.” Turner
Constr. Co., 94 Fed. Cl. at 569 (quoting Aetna Gov’t Health Plans, Inc., B-254397, 1995 WL
449806, at *9 (Comp. Gen. July 27, 1995), aff’d, 645 F.3d 1377 (Fed. Cir. 2011)). To
demonstrate an impaired objectivity OCI, a party must point to “facts showing that ‘a
government contractor’s “work under one government contract could entail its evaluating itself,
either through an assessment of performance under another contract or an evaluation of
proposals.”’” Sigmatech, Inc., 144 Fed. Cl. at 181 (quoting Aegis Techs. Grp., Inc. v. United
States, 128 Fed. Cl. 561, 575 (2016)).

Although the parties dispute whether AEG’s mitigation plan is sufficient, it is undisputed
that AEG at the very least has an OCI with regard to this contract. ECF No. 47-1 at 26; ECF No.
78 at 40; ECF No. 65-1 at 33. AEG is both a fuel supplier to DLA, see Tab 207 at AR 6985
(“AEG has proudly supplied aviation fuel to the U.S. Government, including the Defense
Logistics Agency (DLA), for many years . . . .”), and, after award of this contract, is the AIR
Card program administrator. There is no doubt that AEG’s positions as AIR Card program
administrator, tasked with monitoring fuel transactions to identify potential misuse, fraud, and
abuse, conflicts with its role as a fuel provider seeking to maximize profits.

That said, the Court finds that KHI has not met its burden to demonstrate that DLA
unreasonably determined that AEG’s OCI mitigation plan cured its OCIs. According to KHI,
AEG’s OCI plan “involves three approaches: (1) firewalling PPS from the AEG Fuel Division;

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(2) AEG recusing itself ‘from participating in any and all non-contract location fuel supply
transactions’; and (3) using ‘a firewalled, non-conflicted subcontractor.’” ECF No. 68 at 26
(quoting ECF No. 65-1 at 34). KHI asserts that each of these three approaches is insufficient,
and that DLA erred in determining that each mitigated AEG’s related OCI. Id. at 26–29. The
problem for KHI, however, is that its arguments on these three points are largely conclusory and
do not meet its burden of showing that the agency acted irrationally. To be clear, “KHI has never
argued it is impossible for AEG to mitigate its OCIs.” Id. at 25. Rather, KHI’s issues are with
how AEG proposed to mitigate its OCIs and DLA’s acceptance of AEG’s approaches.

With regard to AEG’s plan to firewall PPS from AEG’s Aviation Fuel division, KHI
simply concludes, citing two GAO decisions, that “an organizational separation does not mitigate
an impaired objectivity OCI as a matter of law.” ECF No. 47-1 at 28. But this is not enough for
KHI to meet its burden. KHI does nothing to analyze whether the walled-off subdivision here is
anything like the organizational separations found to be insufficient in its two cited GAO
decisions. And the Court is certainly under no obligation to do KHI’s work for it. See Daniels v.
United States, 163 Fed. Cl. 363, 382 (2022) (“It is not up to a court to devise and develop
arguments for a party; it is the party’s responsibility to present arguments in a cogent manner in
support of a claim.”).

Despite its lack of obligation to do so, the Court entertains KHI’s undeveloped argument
solely to note that KHI’s reliance on the two GAO decisions is unpersuasive. KHI asserts that
the government and AEG’s reliance on cases from this Court is inapposite because the cited
cases pertain to “divesting work to firewalled subcontractors,” not to the question of whether “a
firewall resolves an impaired objectivity OCI between separate parts of the same company.”
ECF No. 68 at 26. Instead, KHI contends that two GAO decisions, Nortel Government
Solutions, Inc., B-299522.5 et al., 2008 WL 5473616 (Comp. Gen. Dec. 30, 2008) and Aetna
Government Health Plans, Inc., 1995 WL 449806, establish that an internal firewall cannot
mitigate an impaired objectivity OCI. ECF No. 68 at 26. This argument fails. At the outset,
GAO decisions are not binding on this Court. Caddell Constr. Co., Inc. v. United States, 111
Fed. Cl. 49, 76 (2013) (“GAO decisions, however, are not binding on this court.”). Even
acknowledging that GAO decisions are considered persuasive authority before this Court, KHI’s
reliance on Nortel and Aetna does not support its claim that internal firewalls are “virtually
irrelevant to an organizational conflict of interest involving potentially impaired objectivity.”
ECF No. 68 at 26 (quoting Aetna, 1995 WL 449806 at *10). GAO reached its decision in Nortel
by relying on Aetna, see Nortel, 2008 WL 5473616 at *6, and as the government aptly notes,
Aetna explicitly stated that its conclusion in that case, that an internal firewall was insufficient to
mitigate an impaired objectivity OCI, was “based, not on a per se approach” because a “per se
approach would be inconsistent with FAR subpart 9.5, which directs the contracting officer to
develop a course of action to avoid or mitigate organizational conflicts of interest, where that is
possible.” Aetna, 1995 WL 449806 at *11. Instead, GAO concluded that the awardee’s internal
firewall there was insufficient to mitigate its impaired objectivity OCI because of the “largely
subjective nature of the evaluation of probable health care costs in [that] procurement, where
probable cost calculations turn on whether the [awardee’s] evaluators have been persuaded that
an offeror will succeed in managing health care as proposed.” Id. Therefore, Aetna does not
stand for the proposition that internal firewalls can never mitigate impaired objectivity OCIs, but

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instead suggests that internal firewalls may be insufficient to mitigate such OCIs where the
awardee retains the ability to subjectively benefit itself as it performs the contract.

Applying the actual takeaway from Aetna to this case, the contracting officer explicitly
found no opportunities for AEG to subjectively benefit itself either in contract or non-contract
locations. Regarding contract locations, the contracting officer stated “[r]egarding the processing
of those transactions, because the terms of the contract are fixed and there is no opportunity for
subjective or substantive judgement or evaluation of its performance as the AIR Card®
contractor, there is no significant risk of impaired objectivity.” Tab 212 at AR 7656 (emphasis
added). Similarly, regarding non-contract locations, the contracting officer explained that “[t]he
Government will have the capability to conduct its audits independently of AEG’s assistance. As
such, the Government’s reliance on the AIR Card® contractor will be reduced in the new
contract with the pending use of the required data mining tool and ad hoc reporting ability.
Consequently, AEG is not in a position to make any subjective judgments regarding fuel
sales . . . .” Id. at 7657 (emphasis added). Thus, Aetna—a GAO decision that is already not
binding on this Court—is clearly distinguishable from the facts here, and KHI’s argument fails.

Second, KHI argues that AEG’s OCI mitigation plan does not resolve OCIs stemming
from AEG’s roles in the fuel supply market and its fuel supply market business relationships. To
the extent that this second argument relates to anything other than an OCI created by AEG’s fuel
supply market business relationships, that argument is waived because in KHI’s reply brief, KHI
exclusively addresses the potential OCI created by AEG’s fuel supply market business
relationships. See ECF No. 68 at 28–29; Sarro & Assocs., Inc. v. United States, 152 Fed. Cl. 44,
58 (2021) (“A party’s failure to raise an argument in an opening or responsive brief constitutes
waiver.” (emphasis added)). In this regard, DLA reasonably concluded that the conflict alleged
by KHI here does not exist. According to DLA, there was no risk of AEG attempting to steer
business toward itself or its interests “due to AEG’s recusal as a supplier for non-contract
purchases and the policy requiring card users to use Into-plane contracts where available.” Tab
212 at AR 7659. As DLA explained, “Into-plane contracts and non-contract suppliers are not in
competition with one another under the AIR Card® contract,” because DLA policy requires card
users “to search for and use [contracts suppliers] where available” and users “may only use
non-contract merchants at locations where a[] contract [merchant] is not available.” Id. at 7658.
And with regard to any potential for AEG to steer users to its own contract locations or those of
its partners, DLA concluded “[AEG] is unable to do so” because “[c]ard users determine the
locations they will use based on mission needs.” Id. at AR 7659.

Finally, KHI essentially argues that because AEG never identified the subcontractor it
proposes to use for rejected contract location transactions involving AEG, DLA’s acceptance of
AEG’s OCI mitigation in this regard is unreasonable: “AEG[’s] proposal never identifies the
purported unconflicted subcontractor, and DLA never evaluated whether the unnamed
subcontractor suffices to mitigate the OCI, much less perform the contract.” ECF No. 68 at 27.
(emphasis omitted). But KHI focuses on the identity of the subcontractor, not whether using a
subcontractor will solve the OCI issue. As the Court will explain below with regard to KHI’s
contentions regarding the TEB, AEG’s failure to identify its proposed subcontractor for this task
is not fatal. Consequently, KHI needed to do more than simply point to AEG’s failure to identify

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a subcontractor in order to show that DLA’s acceptance of this aspect of AEG’s OCI mitigation
plan was irrational.

Moreover, apart from its arguments on these three specific areas, KHI fails to address
DLA’s findings that AEG’s OCI mitigation plan exceeded the mitigation measures that KHI itself
used during the time that KHI was both the AIR Card contractor and owned by a fuel service
provider. See Tab 212 at AR 7654 (“The firewall techniques in AEG’s mitigation plan are very
similar to the firewalls which were put in place in the incumbent contract when incumbent KHI
was owned by World Fuel Services, Inc., another fuel service provider.”); Tab 230 at AR 9059
(“However, although the firewall techniques were similar, AEG’s mitigation plan provides
significantly more mitigation and avoidance than any of KHI’s past plans due to its complete
recusal from non-contract transactions, which are where the risk of impaired objectivity lie.”). If
KHI’s OCI mitigation plan was sufficient when it was the AIR Card contractor and owned by a
fuel service provider, and AEG’s OCI plan exceeds the effectiveness of KHI’s plan, then AEG’s
OCI mitigation plan would logically be sufficient and, without arguing anything to the contrary
in its briefs, KHI has waived any argument on this point.

For these reasons, KHI fails to meet its burden in arguing that DLA unreasonably
determined that AEG’s OCI plan mitigated its impaired objectivity OCIs.

4. DLA Erred by Misleading KHI and Treating the Offerors’ EAS Proposals
Unequally.

KHI next argues that “DLA misled KHI regarding acceptable approaches to the EAS”
because “DLA dissuaded KHI from proposing features that involved a virtual role for the card
user/pilot, yet never questioned and ultimately rewarded AEG for solutions based on the same
role for the user/pilot.” ECF No. 47-1 at 31. The government responds by arguing that “DLA’s
position has remained consistent and reasonable: offers must comply with the roles and
permissions listed in the RFP.” ECF No. 78 at 47. According to the government, “DLA never
expressed an issue with any feature offered by KHI. Rather, DLA assigned a weakness because
KHI had admitted its solution would not conform with the PWS roles and permissions
requirement.” Id. By contrast, the government states, “AEG proposed to follow the authorized
user roles and permissions in the PWS.” Id. AEG did not address this argument in its
cross-MJAR; therefore, AEG has waived argument regarding this topic. See Sarro & Assocs.,
Inc., 152 Fed. Cl. at 58–59.

“[M]isleading discussions are characterized by communications from the government
that are incorrect, confusing or ambiguous.” DMS All-Star Joint Venture v. United States, 90
Fed. Cl. 653, 670 (2010). The requirement that discussions be meaningful and not misleading
means that an agency must not “misdirect[] the protestor as it revises its proposal.” Green.
Contractors I/S v. United States, 131 Fed. Cl. 216, 225 (2017) (quoting DMS All-Star Joint
Venture, 90 Fed. Cl. at 670). “Equal treatment, however, does not require that all proposals be
treated the same.” Mil-Mar Century Corp. v. United States, 111 Fed. Cl. 508, 530 (2013)
(quoting Chenega Mgmt. v. United States, 96 Fed. Cl. 556, 585 (2010)). As with all alleged
procurement errors, “[t]o prevail on a claim for unequal treatment, a . . . protestor must show that

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DLA assessed KHI a weakness because its solution had not been “tested and proven” and relied
on ratings incorporating this assessed weakness in awarding the contract to AEG. Because
AEG’s untested and unproven EAS solution was not also assessed a weakness and AEG
ultimately won the contract due to its higher overall rating, DLA’s unequal treatment of the two
EAS solutions prejudiced KHI.

In sum, DLA did not treat KHI and AEG’s EAS proposals equally. DLA stated that
KHI’s proposal was noncompliant because it included a “user role” and was not “tested and
proven,” ultimately assessing KHI’s proposal with a weakness, which caused KHI to remove
these features from its final revised proposal. On the other hand, DLA commended AEG’s
substantially similar EAS proposal—which also included a “user role” and, at least as evidenced
by the record, was not “tested and proven.” DLA subsequently relied on these flawed ratings in
making its decision to award the contract to AEG. DLA treated the two offerors’ EAS proposals
unequally, and such unequal treatment prejudiced KHI, as DLA’s inconsistent rating system
simultaneously hurt KHI’s and helped AEG’s chances of being awarded the contract.

5. DLA Did Not Err in its Limited Re-evaluation of Factor 1 of AEG’s Proposal.

Following GAO’s sustention of KHI’s 2024 protest, see Kropp Holdings, Inc., 2024 WL
4330024, DLA empaneled a new TEB to reevaluate AEG’s proposal under Factor 1. See Tab 253
at AR 9540. The TEB assessed AEG a weakness for failing to identify by name the
subcontractor it intended to use as part of its OCI mitigation plan rather than deeming AEG’s
proposal altogether unacceptable. Tab 252 at AR 9527–28. Despite this weakness, the new TEB
ultimately concurred with the pre-2024 protest TEB’s conclusions, and “assess[ed] AEG as the
best overall value to the government.” Tab 253 at AR 9556.

In attempting to establish that DLA erred in its limited re-evaluation of Factor 1, KHI
makes two arguments. First, KHI argues that DLA’s use of a new TEB in its re-evaluation failed
to maintain consistency and was consequently erroneous. ECF No. 47-1 at 35–37. Second, KHI
asserts that DLA did not resolve the error identified by GAO by failing to require AEG to name
the subcontractor that it planned to use as part of its OCI mitigation plan. Id. at 37–42. This,
according to KHI, caused KHI prejudicial harm because DLA should have deemed AEG’s
proposal unacceptable and eliminated AEG from the competition for failing to identify the
proposed subcontractor. Id. at 42.

KHI’s first argument essentially asserts that, “[b]ecause the RFP and this Court’s case law
require consistency in evaluations, DLA should have evaluated both AEG and KHI’s proposals
under the same criteria, including by using the same evaluators.” Id. at 35. The government
counters by stating that “[t]he issue is not whether an agency has to reconvene the same TEB on
remand; the issue is whether the TEB’s evaluation on remand was reasonable under the
APA . . . .” ECF No. 78 at 53. Given the “highly deferential APA standard of review” with
which this Court reviews agency decisions in a bid protest, the government asserts that “the
notion that a new TEB panel might, in theory, reach a different reasonable conclusion on a given
issue, is not a reversible state of affairs . . . .” Id. AEG responds by pointing out that the SSA
remained the same during both the initial evaluation and the corrective action evaluation,

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effectively supplying “whatever consistency was required” and nullifying KHI’s argument. ECF
No. 65-1 at 42.

Although general consistency is required in TEB evaluations, KHI’s proposition that the
subsequent TEBs must consist of the “same evaluators” is without merit. See ECF No. 47-1 at
35. As AEG points out, KHI cites no authority stating that the same technical evaluators must
conduct the entire technical evaluation. ECF No. 65-1 at 41. This lack of authority makes sense,
as any requirement for TEBs to consist of the same evaluators would be impractical given that
procurements can, and often do, span months or even years. Such a requirement would put an
unrealistic burden on the agency to retain procurement officials for the entirety of a procurement.
Not only is this burden too high, but also this level of consistency is not needed to ensure
error-free procurements. Additionally, KHI’s contention that, when switching evaluators, an
agency must reassess the entire technical proposal is equally meritless. ECF No. 47-1 at 36–37.
Such a requirement would also impose too great a burden on procurement officials to again sift
through hundreds or thousands of procurement documents whenever switching evaluators during
lengthy procurements.

To be sure, technical evaluations must generally be conducted in a consistent manner.
Here, as AEG notes, the SSA remained the same during both the initial and corrective action
evaluations. ECF No. 65-1 at 42; compare Tab 218 at AR 7082 (showing the SSA for the initial
evaluation was Jamaal R. Rose) with Tab 253 at AR 9556 (showing that the SSA for the
corrective action evaluation was Jamaal R. Rose). The fact that the same SSA made the same
determinations in the subsequent evaluation as he did in the first evaluation cures any
inconsistency alleged by KHI.

Second, KHI argues that DLA did not require AEG to identify its OCI mitigation
subcontractor; therefore, DLA did not resolve the subcontractor error identified by GAO. ECF
No. 47-1 at 37–42. For this reason, KHI asserts that the TEB was required to rate AEG’s
proposal as unacceptable and remove AEG from the competition. Id. at 42. The government
responds by contending that “KHI’s arguments fail because they ignore the deference owed to
agency officials’ technical expertise.” ECF No. 78 at 54. The government asserts that, because
the “subcontractor [at issue] is only going to be rarely employed,” DLA was “within the realm of
reason to downgrade AEG for the lack of subcontractor information . . . to a weakness but not
find AEG’s offer altogether unacceptable.” Id. at 56.

“Procurement officials have substantial discretion to determine which proposal represents
the best value for the government.” E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.
1996). For that reason, the Court “should not second guess challenges to ‘such matters as
technical ratings . . . which involve discretionary determinations of procurement officials.’” Akal
Sec., Inc. v. United States, 103 Fed. Cl. 310, 329 (2011) (quoting E.W. Bliss Co., 77 F.3d at 449).

DLA determined that AEG’s failure to identify a proposed subcontractor was a weakness
and rated AEG’s proposal accordingly. Tab 252 at AR 9527 (“AEG did not provide or ‘explain
the relationships, duties and responsibilities of each subcontractor’ under Volume 2 . . . which
was evaluated as a ‘weakness’”). Despite this weakness, DLA noted that “AEG did explicitly
state the use of subcontractors teaming under Volume 1.” Id. at AR 9527–28. Simply put, AEG

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sought to use a non-conflicted subcontractor to cure any potential OCIs related to rejected AIR
Card transactions. Specifically, AEG proposed using such a subcontractor to “perform[]
transaction processing support[] on the small number of AEG’s rejected transactions that require
AIR Card® contractor involvement” to establish a firewall thereby preventing AEG from
obtaining “knowledge of [subcontractor] activities . . . which may influence the subcontractor
impartiality and other OCI mitigation procedures.” Id. at AR 9528. While failure to identify a
subcontractor for this role was “still a flaw in AEG’s proposal,” DLA determined that, “[g]iven
the fact that the subcontractor has a limited role handling a very small portion of transactions,”
AEG’s omission of this subcontractor’s identity had a “minimal impact on the performance risk”
and was not material. Id.

Despite the fact that the Court is not to “second guess challenges to ‘such matters as
technical ratings,’” Akal Sec., Inc., 103 Fed. Cl. at 329 (quoting E.W. Bliss Co., 77 F.3d at 449),
KHI essentially asks the court to do just that. As the above demonstrates, DLA considered
AEG’s failure to identify its subcontractor a weakness, yet it still determined that AEG’s
proposal provided the best value to the government. DLA’s justification further underscores the
reasonableness of this decision. As the TEB correctly notes, the RFP provides “no explicit
requir

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11060540. Public record. Not legal advice.