The opinion
In the United States Court of Federal Claims
No. 14-429 C
(Filed September 10, 2014)1
* * * * * * * * * * * * * * * * *
BANNUM, INC., *
* Pre-Award Bid Protest;
Plaintiff, * Supplementation of the
* Administrative Record Not
v. * Appropriate; Rational
* Rejection of Protestor’s Bid
THE UNITED STATES, * for Failure to Provide Valid
* Proof of Zoning; No Evidence
Defendant, * of Disparate Treatment of
* Offerors.
ALSTON WILKES SOCIETY, INC., *
*
Intervenor Defendant. *
* * * * * * * * * * * * * * * * *
Joseph A. Camardo, Jr., Auburn, NY, for plaintiff. Justin T. Huffman,
Auburn, NY, of counsel.
Ryan M. Majerus, United States Department of Justice, with whom were
Stuart F. Delery, Assistant Attorney General, Robert E. Kirschman, Jr., Director,
Bryant G. Snee, Deputy Director, Washington, DC, for defendant. William
Robinson, United States Department of Justice, Federal Bureau of Prisons,
Washington, DC, of counsel.
James Lynn Werner, Columbia, SC, for intervenor-defendant. Lawrence M.
Hershon, Columbia, SC, of counsel.
1
/ This opinion was issued under seal on August 15, 2014. Pursuant to ¶ 7 of the
ordering language, the parties were invited to identify source selection, proprietary or
confidential material subject to deletion on the basis that the material was protected/privileged.
No redactions were proposed by the parties. Thus, the sealed and public versions of this opinion
are identical, except for the publication date and this footnote.
________________________________
OPINION AND ORDER
________________________________
Bush, Senior Judge.
This pre-award bid protest arises out of Request for Proposals (RFP) No.
200-1198-SE, by which the United States Department of Justice, Federal Bureau
of Prisons (BOP), seeks to procure residential reentry center services (a halfway
house and attendant services) for federal offenders in Columbia, South Carolina.
Bannum, Inc. (Bannum) filed a pre-award bid protest complaint on May 19, 2014
seeking declaratory and permanent injunctive relief associated with the BOP’s
decision to eliminate Bannum’s proposal from the competitive range. Before the
court is defendant’s motion to dismiss brought under Rule 12(b)(1) of the Rules of
the United States Court of Federal Claims (RCFC), and cross-motions for
judgment on the administrative record filed by all parties.
The administrative record (AR) was originally filed under seal on June 4,
2014, and was supplemented by the government on July 8, 2014.2 Briefing was
filed according to an expedited schedule and oral argument was held on July 22,
2014.
As discussed below, Bannum has standing to bring this suit; defendant’s
motion to dismiss is therefore denied. The BOP’s decision to eliminate Bannum’s
proposal from the competition, however, was proper. Accordingly, plaintiff’s
motion for judgment on the administrative record is denied, and defendant’s and
2
/ On July 2, 2014, the government filed an unopposed motion to supplement the AR
with two documents that had been inadvertently omitted from the AR. That same day,
intervenor-defendant Alston Wilkes Society, Inc. (AWS) filed a motion to supplement the AR
with a declaration prepared by Heather Andrews, Director of Residential Reentry Services at
AWS, as well as a document purporting to be AWS’s past performance submission delivered to
the BOP on March 21, 2013. Both plaintiff and the government oppose intervenor-defendant’s
motion. In orders dated July 7, 2014, the court granted the government’s unopposed motion to
supplement but deferred ruling on intervenor-defendant’s motion to supplement, which the court
addresses infra.
2
intervenor-defendant’s motions for judgment on the administrative record are
granted.
BACKGROUND3
I. Request for Proposals
On January 24, 2013, the BOP issued RFP No. 200-1198-SE to procure
residential reentry center (halfway house) services for federal offenders in
Columbia, South Carolina. AR Tab 1. The services include employment and
residence development as well as other self-improvement opportunities, and are
intended to assist federal offenders in their transition from prison to the
community. Id. at 57. These services are to be provided in accordance with task
orders issued pursuant to a firm-fixed price “indefinite delivery, requirements type
contract” for a two-year base period, followed by three one-year option periods.
Id. at 8; see also id. at 41.
The original deadline for the submission of proposals was March 27, 2013,
but the deadline was subsequently extended to April 3, 2013 through an
amendment to the RFP. AR at 5, 242. The RFP stated that award would be made
to the responsible offeror whose proposal was deemed to represent the best value
after evaluation in accordance with the factors and subfactors in the solicitation.
AR at 40; see also id. at 46. Section M of the RFP lists the evaluation factors for
award, and divides those factors into three broad areas: Past Performance,
Technical/Management, and Price. Id. at 46. Past Performance is more important
than Technical/Management; when combined, these two areas are significantly
more important than Price. Id.
Section L.6 of the RFP set forth the requirements for the
Technical/Management proposal (Volume I of each bid submission). Of particular
relevance here, section L.6 required that “offerors shall provide the Contracting
Officer with valid proof of all zoning and local ordinance requirements necessary
3
/ In the following section, the court sets forth its findings of fact drawn from the AR and
the parties’ submissions. See Bannum, Inc. v. United States, 404 F.3d 1346, 1356 (Fed. Cir.
2005) (stating that bid protest proceedings “provide for trial on a paper record, allowing fact-
finding by the trial court”). Unless otherwise noted, the facts do not appear to be disputed.
3
for the operation of [the] Residential Reentry Center, or any other program
specified on the Work Statement applicable to any and all proposed performance
sites.” AR at 45. Such proof of zoning was to be provided either in the offeror’s
initial proposal or, if not contained in the initial proposal, within sixty days after
the date of the initial proposal submission. Id. In addition, offerors were
“required to maintain proper zoning throughout the life of the contract.” Id.
Finally, section L.6 warned offerors that failure to establish and maintain valid
proof of zoning “may result in elimination prior to award and termination for
default following award.” Id.; see also id. at 208 (reiterating in the solicitation’s
“Compliance Matrix” the requirement to establish and maintain valid proof of
zoning, and stating that failure to meet the requirement could be grounds for
elimination or default termination).
II. Evaluation of Initial Proposals and Bannum’s Elimination
The BOP received proposals from two offerors: Bannum and Alston Wilkes
Society, Inc. (AWS), the incumbent BOP halfway house contractor in Columbia,
South Carolina. On March 27, 2013, Bannum submitted its proposal to operate a
halfway house located at 1315 Calhoun Street in Columbia, South Carolina (the
Calhoun Street property). AR Tab 5. Bannum did not provide proof of zoning for
the Calhoun Street property with its proposal. Instead, it provided a November 29,
2012 letter signed by K. Brian Cook, Zoning Administrator for the City of
Columbia, informing Bannum that it would have to obtain a “special exception”
from the city’s Board of Zoning Appeals in order to operate a halfway house at the
Calhoun Street property. Id. at 511. Because Bannum did not submit proof of
zoning with its proposal, the RFP required it to submit such proof no later than
May 28, 2013, i.e., sixty days after March 27, 2013.4 Id. at 45. Bannum never
submitted a request to the BOP for an extension of time in which to submit proof
of zoning for the Calhoun Street property.
Mr. Cook explained in his November 29, 2012 letter to Bannum that the
process for obtaining a zoning special exception takes approximately forty-five
days from the application deadline through the Board of Zoning Appeals’ review
and approval. AR at 511. The Board’s 2013 meeting calendar, available publicly
on its website, listed the special exception application deadlines and the
4
/ May 26, 2013 was a Sunday, and May 27, 2013 was a federal holiday, Memorial Day.
4
corresponding dates of public hearings at which the Board would hear those
applications. Id. at 1196-98. Four application deadlines – February 13, March 13,
April 10, and May 15 – passed between January 24, 2013, when the RFP was
issued, and May 28, 2013, which was Bannum’s deadline to provide proof of
zoning for the Calhoun Street property. Id. at 1196. Hearings on applications
filed during that period were scheduled to be held on March 12, April 9, May 14,
and June 11, with each hearing scheduled approximately one month after the
corresponding application deadline. Id.
Bannum did not file its application for a zoning special exception until the
May 15, 2013 deadline. Compl. ¶ 7; AR at 824, 834. According to the Board of
Zoning Appeals’ 2013 calendar, the hearing date for Bannum’s application was
scheduled for June 11, 2013, two weeks after Bannum’s May 28, 2013 deadline to
provide proof of zoning for the Calhoun Street property. Id. at 1196.
The Board approved Bannum’s requested special exception at the Board’s
June 11, 2013 meeting. Compl. ¶ 8; AR at 808-09, 824. The Board’s approval,
however, was subject to certain conditions, including: (1) that residents of
Bannum’s program “shall be non-violent Federal offenders”; and (2) that
Bannum’s “[a]pproved use of [the Calhoun Street property] must begin by
December 1, 2013.” Id. at 809.
On June 14, 2013, Bannum sent an e-mail to the BOP stating that it had
received zoning approval and would forward the Board’s written order to that
effect within a few days. AR at 934. On June 27, 2013, thirty days after
Bannum’s May 28, 2013 deadline to provide proof of zoning for the Calhoun
Street property, Bannum received the Board’s written order and forwarded it to the
BOP. Id. at 807-09.
On July 12, 2013, the BOP notified Bannum that it had been excluded from
the competitive range of proposals because it had failed to submit valid proof of
zoning for the Calhoun Street property within sixty days of submitting its
proposal. AR at 810-12. At Bannum’s request, the agency provided a written
debriefing on July 16, 2013, reiterating that Bannum had failed to satisfy the
requirement of the RFP that proof of zoning be provided within sixty days of
proposal submission. Id. at 814-20.
5
III. Bannum’s Agency and Government Accountability Office Protests
Bannum filed an agency protest on July 18, 2013, alleging that the BOP had
waived its right to enforce the sixty-day deadline for the submission of proof of
zoning because the agency waited too long to notify Bannum of its elimination
from the competitive range after the deadline had passed. AR Tab 12. The BOP
denied the agency protest on August 16, 2013, concluding that the contracting
officer acted reasonably and within his discretion in excluding Bannum from
consideration, and that the BOP was “not responsible for Bannum’s business
decision to submit an application [for a special exception] on a date that virtually
assured that Bannum would not receive proof of zoning prior to the 60-day
deadline.” Id. at 831.
On August 26, 2013, Bannum filed a protest with the Government
Accountability Office (GAO) in which it reiterated its argument that the BOP had
waived its right to eliminate Bannum from consideration because the agency did
not immediately eliminate Bannum after the sixty-day deadline for the submission
of proof of zoning had passed. AR Tab 15. On October 22, 2013, the GAO
dismissed the protest pursuant to 4 C.F.R. § 21.3(i) (2013) based on Bannum’s
failure to timely file its comments on the agency report. AR Tab 26.
IV. Bannum’s First Protest in This Court
More than two months later, on December 30, 2013, Bannum filed a bid
protest complaint in this court, alleging that the BOP improperly eliminated
Bannum from consideration for award. Bannum, Inc. v. United States, No.
13-1027. In that complaint, Bannum reiterated its contention that the BOP waived
its right to enforce the sixty-day deadline for the submission of proof of zoning.
Compl. ¶ 18. In addition, plaintiff asserted that its elimination from the
competitive range of proposals was improper because the agency’s decision
resulted in a competitive range of one offeror. Id. Bannum requested an
injunction directing the BOP to reinstate Bannum’s proposal into the competitive
range and to consider Bannum’s proposal for award.
On January 16, 2014, before the filing of the administrative record in that
case, the government filed notice that it would take corrective action by
conducting a new competitive range determination in which it would evaluate
6
Bannum’s proposal, including Bannum’s late-filed proof of zoning for the
Calhoun Street property. Based upon the BOP’s planned corrective action, and
pursuant to the parties’ joint stipulation of dismissal, Bannum’s protest was
dismissed without prejudice on January 30, 2014.
V. Corrective Action and Re-evaluation of Proposals
The BOP allowed Bannum back into the competition on January 22, 2014,
when it notified Bannum that it would evaluate Bannum’s proposal for award,
including Bannum’s proof of zoning for the Calhoun Street property. AR Tab 33.
Subsequently, in determining the new competitive range, the agency rated
Bannum’s technical proposal as deficient for its site location. Id. at 1302. Despite
this unfavorable rating, the BOP nevertheless included Bannum’s proposal in the
new competitive range for the purpose of conducting discussions. Id.
In its Discussion Notice #1 issued to Bannum on March 14, 2014, the BOP
noted the following deficiencies with respect to Bannum’s proof of zoning for the
Calhoun Street property:
1. Bannum’s zoning letter . . . states [that] “[r]esidents
shall be non-violent Federal offenders.” Please provide a
definition from the city of Columbia, SC as to what is a
non-violent federal offender. The statement of work
(SOW) states that the contractor will accept all offenders
for placement at the facility and manage any offender
referred by the Regional Reentry Manager or their
designee.
2. As stated in the corrective action for the Court of
Federal Claims Bid Protest, Bannum’s zoning is
accepted, but after an evaluation, it appears that
Bannum’s zoning letter states [that] “[a]pproved use of
this property must begin by December 1, 2013 . . . .”
Please submit official documentation that demonstrates
that Bannum has current zoning approval, and will
maintain zoning through the life of the contract. This
item is deficient.
7
AR at 1307. The BOP directed Bannum to provide a response to Discussion
Notice #1 by March 28, 2014. Id. at 1306.
On March 26, 2014, Bannum requested an extension of time in which to
respond to Discussion Notice #1. AR Tab 37. In its request, Bannum
acknowledged that its zoning approval for the Calhoun Street property had lapsed
and explained that it could not obtain new zoning approval for the Calhoun Street
property because a school had moved into an adjacent property. Id. at 1326.
Bannum requested additional time “to negotiate a new lease or purchase a new
property, affirm the zoning for the new property or apply for a Special Exception,
[and to] create new floor plans, performance layout, 120-day availability and site
plans as required by the solicitation.” Id. Bannum further noted that it was in the
process of negotiating for a new site location with the owners of seven potential
properties. Id.
On March 28, 2014, the BOP granted Bannum an extension until April 11,
2014 to respond to Discussion Notice #1, but noted that Bannum appeared to be
requesting a change in site location. AR at 1334. In that regard, the agency
referred Bannum to section L.6(f) of the RFP, which requires that any request to
change the site location be received by the contracting officer within sixty days of
initial proposal submission and provides that any other proposed site location
change would be “considered an unsolicited proposal modification which may
result in elimination from the competitive range.” Id. at 44; see id. at 1334. In
accordance with this provision, the BOP notified Bannum that any proposed site
change request would be considered late, even if the date of Bannum’s initial
submission were deemed to be January 22, 2014, when the agency initiated its
corrective action. Id. at 1335.
Bannum submitted its response to Discussion Notice #1 on April 11, 2014.
AR Tabs 39-40. In its response, Bannum requested permission to change its
proposed site location to 3715 Broad River Road in Columbia, South Carolina (the
Broad River Road property). Id. Tab 40. Bannum explained that it had applied to
the Board of Zoning Appeals for a special exception to operate a halfway house at
the Broad River Road property, and that the Board would consider the application
at its June 5, 2014 meeting. Id. at 1340.
8
On April 17, 2014, the BOP completed its revised technical evaluation of
proposals. AR Tab 41. The agency again rated Bannum’s proposal as deficient
for the site location factor because Bannum had not submitted acceptable proof of
zoning. Id. at 1455-56. The BOP found that Bannum’s proof of zoning for the
Calhoun Street property had expired on December 1, 2013 and did not allow for
the placement of all federal offenders, as required by the RFP. Id. at 1455-56; see
id. at 95 (stating that the contractor “will accept all offenders for placement at the
facility and manage any offender referred by the [BOP’s Regional Reentry
Manager]”). That same day, the BOP eliminated Bannum’s proposal from
consideration for award, reasoning as follows:
Bannum has failed to submit and maintain the required
proof of zoning. In addition, Bannum’s proposed site
change as indicated in its response to [Discussion Notice
#1] is not within the guidelines of section L.6(f)[] of the
solicitation and cannot be accepted. The reasons for not
accepting the site change were explained in detail in the
BOP’s March 28, 2014 letter to Bannum.
Id. at 1476.
VI. Bannum’s Second Protest in This Court
Bannum filed its current protest on May 19, 2014, alleging that it was
“improperly eliminated from the competitive range . . . because of the BOP’s
unreasonable and purposeful delay in issuing the corrective action, and their
improper manipulation of the RFP terms and conditions.” Compl. ¶ 29; see also
id. ¶¶ 22-25, 30. Plaintiff asserts that had the agency taken corrective action
during Bannum’s agency protest or GAO protest, Bannum would not have been
eliminated from consideration for award because its zoning special exception for
the Calhoun Street property would not have lapsed prior to the agency’s re-
evaluation of proposals. Id. ¶ 30. Because the BOP “knew or should have
known” that Bannum’s special exception for the Calhoun Street property had
expired by the time the agency took corrective action, plaintiff alleges that the
corrective action was an improper “subterfuge” designed to “make it essentially
impossible for Bannum to be included in the competitive range during the alleged
re-evaluation.” Id. ¶¶ 24-25; see also id. ¶¶ 22-23. Based upon the agency’s
9
alleged errors, Bannum seeks: (1) a declaration that it was improperly eliminated
from the competitive range; (2) an injunction directing the BOP to reinstate
Bannum’s proposal into the competitive range and to consider Bannum’s proposal
for award; and (3) in the alternative, a court order “directing the cancellation of all
bids, and that the contract be re-solicited.” Compl. at 8.
DISCUSSION
I. Bid Protest Jurisdiction
This court “shall have jurisdiction to render judgment on an action by an
interested party objecting to a solicitation by a Federal agency for bids or
proposals for a proposed contract or to a proposed award or the award of a
contract or any alleged violation of statute or regulation in connection with a
procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(1) (2012). The
jurisdictional grant is “without regard to whether suit is instituted before or after
the contract is awarded.” Id. As a threshold jurisdictional matter, however, the
plaintiff in a bid protest must show that it has standing to bring the suit. Info.
Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003)
(ITAC); Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366,
1369 (Fed. Cir. 2002).
II. Standards of Review
A. Motion to Dismiss under RCFC 12(b)(1)
In considering the issue of subject matter jurisdiction, this court must
presume all undisputed factual allegations in the complaint to be true and construe
all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S.
232, 236 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 457 U.S.
800 (1982); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.
Cir. 1988) (citations omitted). Where the court’s jurisdiction is challenged, the
plaintiff bears the burden of establishing subject matter jurisdiction by a
preponderance of the evidence. Alder Terrace, Inc. v. United States, 161 F.3d
1372, 1377 (Fed. Cir. 1998) (citing McNutt v. Gen. Motors Acceptance Corp. of
Ind., 298 U.S. 178, 189 (1936)); Reynolds, 846 F.2d at 748 (citations omitted). If
10
the plaintiff fails to meet this burden, and jurisdiction is therefore found to be
lacking, the court must dismiss the action. RCFC 12(h)(3).
B. Judgment on the Administrative Record
RCFC 52.1(c) provides for judgment on the administrative record. To
review a motion or cross-motions under RCFC 52.1(c), 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. Bannum, Inc. v. United States, 404 F.3d
1346, 1356-57 (Fed. Cir. 2005). The court must make factual findings where
necessary. Id. The resolution of RCFC 52.1(c) cross-motions is akin to an
expedited trial on the paper record. Id.
C. Bid Protest Review
The court first examines, as a threshold jurisdictional matter, whether the
plaintiff in a bid protest has standing to bring the suit. ITAC, 316 F.3d at 1319.
Bid protest standing is limited to those plaintiffs who are actual or prospective
bidders and whose direct economic interest would be affected by the award of the
contract or by the failure to award the contract. Orion Tech., Inc. v. United States,
704 F.3d 1344, 1348 (Fed. Cir. 2013). In the circumstances of a pre-award protest
where, as here, a protestor challenges the agency’s evaluation of proposals
received in response to a solicitation, the protestor must show that there was a
substantial chance it would have been awarded the contract but for the alleged
errors in the procurement process. Id. at 1348-49.
Upon determining that a plaintiff has standing to sue, the court next
considers the merits of the bid protest. A bid protest proceeds in two steps, with
the trial court first determining whether the government acted without a rational
basis or contrary to law. Bannum, 404 F.3d at 1351. If the award decision fails
review, the court then determines as a factual matter whether the plaintiff was
prejudiced by the arbitrary or unlawful conduct. Id.
The standard of review for a bid protest brought pursuant to section 1491(b)
is whether the agency action was arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law. 28 U.S.C. § 1491(b)(4) (2012)
(incorporating the standard set forth in 5 U.S.C. § 706 (2012)); Banknote Corp. of
11
Am. v. United States, 365 F.3d 1345, 1350-51 (Fed. Cir. 2004) (citing Advanced
Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir. 2000)).
Under this standard, a procurement decision may be set aside if it lacks a rational
basis or if the agency’s decision-making involved a clear and prejudicial violation
of statute or regulation. Banknote, 365 F.3d at 1351. “A court evaluating a
challenge on the first ground must determine ‘whether the contracting agency
provided a coherent and reasonable explanation of its exercise of discretion.’”
Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009)
(quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d
1324, 1333 (Fed. Cir. 2001)).
This court’s bid protest review is “highly deferential.” Advanced Data
Concepts, 216 F.3d at 1058. Under this standard, de minimis errors in the
procurement process do not justify relief. Grumman Data Sys. Corp. v. Dalton, 88
F.3d 990, 1000 (Fed. Cir. 1996) (citing Andersen Consulting v. United States, 959
F.2d 929, 932-33, 935 (Fed. Cir. 1992)). A bid protest plaintiff bears the burden
of proving that a significant error marred the procurement in question. Id. In
negotiated procurements, as here, the protestor’s burden is greater because of the
relatively high degree of discretion accorded to the contracting officer. Glenn Def.
Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907-08 (Fed. Cir. 2013)
(citation omitted). “‘If the court finds a reasonable basis for the agency’s action,
the court should stay its hand even though it might, as an original proposition,
have reached a different conclusion as to the proper administration and application
of the procurement regulations.’” Honeywell, Inc. v. United States, 870 F.2d 644,
648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301
(D.C. Cir. 1971)).
III. Standing
The court begins by addressing the threshold issue of Bannum’s standing,
which the government contests. See Def.’s Mot at 13-15; Def.’s Reply at 2-4. As
previously stated, to establish standing Bannum must show that it is an actual or
prospective bidder whose direct economic interest is affected by the award of the
contract – i.e., that Bannum is an interested party prejudiced by the errors alleged
to have been made by the agency. ITAC, 316 F.3d at 1319. It is undisputed that
Bannum is an actual bidder for this procurement. Thus, the only disputed issue is
whether Bannum has demonstrated prejudice by showing a substantial chance that
12
it would have received the contract award but for the alleged errors in the
procurement process. Orion, 704 F.3d at 1348.
Bannum has standing to bring this protest. Once the BOP took corrective
action and allowed Bannum back into the competition, it is clear that the agency
considered Bannum to be a viable candidate for award and included Bannum in
the competitive range of offerors. AR at 1302. This protest focuses on the entire
course of conduct of the procurement and includes an allegation that there was
disparate treatment of the offerors which favored AWS. If this allegation were
proved to be correct, Bannum, one of only two offerors in the competitive range,
would have a substantial chance of contract award once the agency corrected its
procurement error or errors. This is enough to show standing in the circumstances
of this procurement.
IV. Mootness
The government also argues that much of Bannum’s protest is moot because
it concerns pre-corrective action conduct of the procuring agency. Def.’s Mot. at
16-18. The government’s mootness challenge has some merit. The court
concedes, however, that the lack of clarity in plaintiff’s presentation of its protest
grounds makes a mootness analysis difficult.
The complaint, for example, is not divided into counts which could
differentiate, or even identify, Bannum’s grounds for protest. Instead, there is a
free-flowing commentary on the actions of the BOP which includes phrases such
as “egregiously bad faith behavior,” “attempt[] to improperly manipulate the bid
protest/corrective action process,” “the corrective action was disingenuous from
the outset,” and “the alleged corrective action was merely a subterfuge.” Compl.
at 5-6. This commentary is then summarized without specifically identifying a
particular violation of procurement law:
Bannum was improperly eliminated from the competitive
range, solely because of the BOP’s unreasonable and
purposeful delay in issuing the corrective action, and
their improper manipulation of the RFP terms and
conditions. . . . [T]he BOP intentionally manipulated
the corrective action process to further victimize
13
Bannum. The BOP created a situation where it would be
impossible for Bannum to comply with the terms of the
Solicitation. If a corrective action was taken during
either the Agency protest or GAO protest, Bannum
would not have lost its initial Special Exception.
Because the BOP unreasonably and purposefully delayed
the issuance of the corrective action, Bannum has again
been victimized by the BOP’s improper actions.
Additionally, Bannum has been further victimized by the
BOP’s attempt to egregiously use the terms of the RFP to
improperly deprive Bannum from exercising its rights
under the corrective action. Such unconscionable
actions cannot be tolerated.
Id. at 7. The complaint was never amended to clarify the specific grounds of
Bannum’s protest.
Plaintiff’s motion for judgment on the administrative record again sets forth
contentions of bad faith, and adds a series of truncated legal arguments
condemning the BOP’s treatment of Bannum. Under the heading of “The BOP
Improperly Eliminated Bannum’s Original Proposal from the Competitive Range,”
plaintiff alleges first that the agency waived, through delay, its ability to enforce
the solicitation’s requirement for timely proof of zoning. Pl.’s Mot. at 10. No
authority is cited for this proposition. Plaintiff also alleges that the BOP engaged
in disparate treatment of the offerors regarding their proof of zoning. Id. at 11.
Under the heading of bad faith, plaintiff argues that the BOP “never
intended to appropriately consider Bannum’s proposal.” Pl.’s Mot. at 12.
According to plaintiff, the record shows that “the BOP never truly intended to give
Bannum a fair opportunity at earning the subject contract.” Id. at 14. Under the
same heading, plaintiff argues that an agency’s corrective action must be
reasonable under the circumstances. Id. at 12 (citing Sheridan Corp. v. United
States, 95 Fed. Cl. 141, 151 (2010)).
Finally, plaintiff challenges the number of contracts submitted by AWS in
the Past Performance volume of its proposal as being insufficient, and claims that
14
AWS’s proposal was therefore “technically unacceptable[] and subject to
elimination from the competitive range.” Pl.’s Mot. at 15.
Neither the complaint nor plaintiff’s dispositive motion exhibits analytical
clarity as to whether the focus of plaintiff’s bid protest is on pre-corrective action
conduct, post-corrective action conduct, or both. At oral argument, the court
inquired into this issue:
So, once the corrective action has taken place, Bannum
does not view that the playing field is even. You have to
look back before the corrective action took place to
measure whether equal treatment was given?
Oral Argument Transcript (Tr.) at 12. Plaintiff’s counsel responded: “I think so.”
Id.
Defendant ably argues that a corrective action which moots a protest at this
court also can moot challenges to pre-corrective action conduct of the agency.
Def.’s Mot. at 16 (citing Galen Med. Assocs., Inc. v. United States, 56 Fed. Cl. 104
(2003) (Galen I), aff’d, 369 F.3d 1324 (Fed. Cir. 2004) (Galen II). Plaintiff does
not agree but only offers a cursory, unclear and ultimately unpersuasive treatment
of the issue:
While a corrective action may render [a challenge to a
prior solicitation process] moot, in this situation, the
corrective action was simply to re-consider Bannum’s
initial proposal. The evaluation process was not started
anew . . . . By simply going back in time and re-
considering Bannum’s earlier proposal, outdated
information was used. Since AWS was already
operating the incumbent contract, and had an obligation
to maintain zoning under that contract, AWS had an
unfair competitive advantage.
Pl.’s Reply at 6. Plaintiff never explains how its mootness analysis rebuts
defendant’s citation to multiple authorities discussing the mootness of prior protest
grounds once the agency has undertaken corrective action. See Def.’s Mot. at 16-
15
18. The court therefore agrees with defendant that plaintiff’s allegations of error
focusing narrowly on Bannum’s first elimination from the competition are moot.5
The court lacks jurisdiction over plaintiff’s claims, if any, that focus only on
Bannum’s first elimination from the competition and other pre-corrective action
conduct of the BOP.6 See Myers, 275 F.3d at 1369 (noting that mootness is a
“threshold jurisdictional issue”).
Defendant’s mootness challenge, however, must be rejected as to Bannum’s
assertion that disparate treatment marred this procurement.7 See Pl.’s Mot. at 11
(“The BOP engaged in disparate treatment of the proposals with respect to zoning,
in favor of AWS.”); Pl.’s Reply at 7 (“The alleged corrective action does not moot
out this disparate treatment.”). The United States Court of Appeals for the Federal
Circuit has addressed this issue, if obliquely. In Galen II, the Federal Circuit
5
/ Plaintiff also attacks the reasonableness of the BOP’s corrective action. Pl.’s Mot. at
12. The focus of this attack appears to be on the post-corrective action implementation of the re-
evaluation of Bannum’s proposal. Id. at 13-14 (arguing that the BOP did not give Bannum
enough time to find new zoning proof after its proposal was included in the competitive range,
and that the BOP enforced solicitation requirements too harshly in its re-evaluation). As stated
infra, the court’s finds the re-evaluation of Bannum’s proposal to have been reasonable.
In plaintiff’s reply brief, Bannum attacks the BOP’s corrective action on a new front,
arguing that the proper corrective action would have been to re-solicit the requirement for a
halfway house. Pl.’s Reply at 5, 7-8. Aside from plaintiff’s tardiness in raising this argument,
plaintiff cites no authority for this contention, and the court finds it unpersuasive. The BOP’s
corrective action was reasonable under the circumstances indeed, Bannum agreed to voluntarily
dismiss its protest in light of the corrective action proposed by the BOP.
6
/ As the court reads the complaint, its focus is on the corrective action taken by the BOP
and on subsequent events. To the extent that plaintiff has attempted to introduce claims in its
dispositive motion that solely attack pre-corrective action conduct in this procurement, those
claims are beyond this court’s jurisdiction. In particular, plaintiff’s protest grounds sounding in
waiver and estoppel fall into this category of moot claims. See Pl.’s Mot. at 3, 10-11.
7
/ Although this assertion is found nowhere in the complaint, plaintiff’s reference in the
complaint to the BOP’s “improper manipulation of the RFP terms and conditions,” Compl. ¶ 29,
might generously be construed to encompass an allegation of disparate treatment of the offerors.
In light of the expedited briefing schedule adopted in this case, the court will not deny plaintiff an
opportunity to reach the merits of this claim simply because it was never set forth in an amended
complaint.
16
noted that an agency’s corrective action mooted allegations of pre-corrective
action violations of law or regulation, but that pre-corrective action conduct might
be relevant to establish a pattern of erroneous conduct:
The Court of Federal Claims concluded that Galen’s
complaints regarding the initial solicitation were
rendered moot when the [the agency] vacated the award
and agreed to amend the solicitation. We agree that the
complaints based on pre-corrective action events are
moot where charged as a specific violation of a code or
statute, but are relevant in order to establish a possible
pattern of bias.
369 F.3d at 1333 (emphasis added). Because pre-corrective action conduct was
relevant to allegations of bias in Galen II, pre-corrective action conduct is likely
relevant to allegations of disparate treatment in this case.
Thus, plaintiff’s disparate treatment claim permits Bannum to challenge pre-
corrective action conduct of the BOP as allegedly showing evidence of disparate
treatment. As for bad faith, plaintiff has not pointed to any specific evidence in
the record of bad faith, and, at oral argument, plaintiff’s counsel would not assert
that the BOP had acted in bad faith in this procurement, despite being given
repeated opportunities to clarify his client’s position on this issue.8 Tr. at 7-8.
Thus, the court will not discuss further plaintiff’s cursory and inconsistent
attempts to allege bad faith on the part of the BOP. See, e.g., Galen II, 369 F.3d at
1330 (citing cases for the proposition that almost irrefragable proof is required to
establish bad faith on the part of a procuring agency).
In sum, plaintiff’s protest survives defendant’s mootness challenge to the
extent that Bannum alleges disparate treatment, either in the zoning proof required
8
/ Each of plaintiff’s allegations of evidence of bad faith are either vague generalizations
(“Bannum contends that the BOP’s entire course of conduct consists of the ‘well-nigh
irrefragable proof’ that is required [for bad faith]”) or insufficient to show bad faith on the part of
the BOP (imputing improper motive, without evidence as to motive, into the timing of various
BOP actions, the type of corrective action offered to Bannum, and the amount of time allowed to
Bannum to correct its zoning defects). Pl.’s Reply at 8.
17
of the two offerors, or in the acceptance of AWS’s past performance information
as adequate. The court now turns to intervenor’s motion to supplement the
administrative record, before returning to the topic of plaintiff’s allegations of
disparate treatment.
V. Intervenor-Defendant’s Contested Motion to Supplement the Record
A. Axiom
In Axiom, the Federal Circuit identified the acceptable circumstances under
which the administrative record may be supplemented in a bid protest. The Axiom
panel criticized a decision by this court which permitted supplementation of the
administrative record in a bid protest, and criticized the trial court’s over-broad
reliance on Esch v. Yeutter, 876 F.2d 976 (D.C. Cir. 1989), a case which provides
a list of justifications for the supplementation of the administrative record of an
agency action. Axiom, 564 F.3d at 1379-81. The Axiom standard provides that
“supplementation of the record [in a bid protest] should be limited to cases in
which ‘the omission of extra-record evidence precludes effective judicial review.’”
Id. at 1380 (quoting Murakami v. United States, 46 Fed. Cl. 731, 735 (2000), aff’d,
398 F.3d 1342 (Fed. Cir. 2005)).
B. Declaration Regarding Past Performance Contracts Submitted to
the BOP
The AR contains both AWS’s Past Performance submission to the BOP,
Volume III of its proposal, and the evaluation of that submission. AR at 493-98,
1478-87. According to these documents, AWS only submitted one contract in
Volume III of its proposal to demonstrate the relevance and quality of its recent
past performance. See id. at 495-97, 1480. The submitted contract in Volume III
is the incumbent contract for the services AWS is currently providing the BOP at
its halfway house in Columbia, South Carolina.
According to AWS, “the original paper version of the Proposal
submitted to the Government by AWS contained information on five contracts
[not just one] performed by AWS in the preceding three years.” AWS Supp. Mot.
at 2. In other words, AWS asserts that it submitted five contracts in a fifteen-page
document to the BOP in Volume III of its proposal, rather than one contract in a
18
three-page document. Offerors were limited to three pages per contract in their
Past Performance volume. AR at 205.
AWS therefore concludes that “the Administrative Record appears to be
incomplete, and it should be supplemented with the attached [fifteen-page Past
Performance volume] so that the Court can take proper review of the
record in front of it.” AWS Supp. Mot. at 2. AWS attaches a declaration
regarding the contents of the paper copy of its proposal that was submitted to the
BOP, as well as the fifteen-page Past Performance volume that the declarant states
was submitted to the BOP. Bannum and the government both oppose the motion
seeking to supplement the record with these documents.
The court must deny the motion. The government represents that the
existing record before the court contains the proposal AWS submitted to the BOP,
as well as the BOP’s evaluation of that volume; it is the government’s evaluation
of AWS’s Past Performance volume which must be reviewed by this court. It is
irrelevant to that review whether AWS submitted more pages than the three pages
of its Past Performance volume that were evaluated by the BOP. Because the
declaration and attached document are not necessary for effective judicial review
of the procurement actions in this bid protest, these documents shall not
supplement the administrative record filed by the government in this case.
VI. Analysis of the Merits
A. Zoning Proof for AWS and Bannum
1. Plaintiff’s Burden to Show Disparate Treatment
Plaintiff alleges that the BOP was more lenient regarding AWS’s proof of
zoning than it was for Bannum’s proof of zoning. The court notes first that AWS
and Bannum were not similarly situated as to their proposed properties. AWS is
the incumbent contractor operating the same halfway house that it proposes in its
offer. Bannum, in contrast, proposed to convert a vacant former auto parts store,
the Calhoun Street property, into a halfway house. AR at 806. Adequate proof of
zoning could reasonably differ for the two proposed facilities. See 48 C.F.R.
§ 1.102-2(c)(3) (2013) (“All contractors and prospective contractors shall be
treated fairly and impartially but need not be treated the same.”).
19
Furthermore, the BOP exercises discretion in determining the adequacy of
proof of zoning, and its decisions in this regard will only be overturned if arbitrary
and capricious. Bannum, Inc. v. United States, No. 07-109, 2007 WL 5172433, at
*4 & n.4 (Fed. Cl. May 21, 2007). The solicitation did not specify what
constitutes “valid proof” of zoning, but did indicate that failure to establish proof
of zoning could “result in elimination prior to award.” AR at 45; see also id. at
208 (requiring “official documentation . . . [of] zoning approval”). Evidence of
disparate treatment, in these circumstances, requires more than a simplistic
comparison of the communications between the BOP and the two offerors
regarding the proof of zoning requirement of the competition.
2. AWS Offered Adequate Proof of Zoning with Its Proposal
With its initial proposal AWS provided a 2011 letter from the zoning
authority of Columbia, South Carolina which described the zoning for AWS’s
existing halfway house, and noted that a certificate of occupancy had been issued
to AWS for the use of that property as a halfway house in 1986. AR at 272-73.
The BOP rationally concluded that AWS had submitted adequate proof of zoning
with its proposal. Id. at 858-59. There is nothing arbitrary in that decision.
Subsequently, as the BOP entered into discussions with AWS in September
of 2013, several matters were addressed to improve AWS’s proposal. These
included: (1) rectifying an incomplete attachment to the proposal (the
Environmental Checklist); (2) updating the Price Proposal if needed; (3)
addressing facility renovations; (4) providing credentials for therapeutic staff; and
(5) providing a current proof of zoning letter from the city. AR at 924-26.
Although plaintiff seizes upon this request as evidence that AWS’s proposal failed
to contain adequate proof of zoning at the outset, there is nothing in the record to
support that view. The subsequent request for a current proof of zoning letter, in
the context of improving AWS’s proposal for possible award, does not indicate
that the previously submitted zoning proof was in any way inadequate.
3. Bannum’s Proposal, Considered Twice by the BOP, Never
Contained Adequate Proof of Zoning
In contrast, with its proposal Bannum submitted a letter from the city’s
zoning authority stating that a special exception would be required from the Board
20
of Zoning Appeals for Bannum’s proposed site, the Calhoun Street property, to be
used as a residential care facility. AR at 511. Pursuant to the terms of the
solicitation, proof of zoning was required within sixty days of proposal
submission. Id. at 45, 208. Bannum was thus required to submit adequate proof
of zoning by May 28, 2013. Bannum’s first attempt to provide adequate proof of
zoning was an email dated June 14, 2013, id. at 934, announcing that it had
received approval for a special exception for the Calhoun Street property,
followed by the official letter confirming the approval of a special exception
attached to an email dated June 27, 2013, id. at 807-09.
Pursuant to the terms of the solicitation, Bannum’s proof of zoning was late
and as such constituted adequate reason to eliminate Bannum from the
competition. AR at 45. The BOP eliminated Bannum from the competition for
this reason on July 12, 2013. Id. at 810. There is nothing arbitrary or capricious
in the BOP’s decision.
Once the BOP undertook corrective action in January 2014 and agreed to
consider Bannum’s proposal despite the untimely submission of proof of zoning, a
substantial amount of time had elapsed. It is clear from the record that Bannum
knew, or should have known, that its special exception from the Board of Zoning
Appeals for the Calhoun Street property had lapsed on December 1, 2013. AR at
809. Nonetheless, the record contains no evidence that Bannum attempted to
timely obtain a current zoning special exception for the re-evaluation of its
proposal.9
On March 14, 2014, the BOP notified Bannum during discussions that its
proof of zoning did not appear to be current, and that a condition of its zoning
special exception did not conform to the solicitation’s requirements (that both
9
/ Indeed, Bannum appears to have made a business decision not to attempt to maintain
current proof of zoning for its proposed halfway house site during the pendency of its protests
before this court. See Pl.’s Reply at 5 (stating that “Bannum . . . had no further obligation to
maintain zoning on its proposed property” as of December 1, 2013). Loss of the opportunity to
compete for this contract appears to be largely the result of plaintiff’s business planning
decisions. See Bannum, Inc. v. United States, 56 Fed. Cl. 453, 460 (2003) (noting that while
procurement law protects fair and open competition, the law does not “‘wholly abandon an
assumption of Darwinian principles’” (quoting Razorcom Teleph & Net, LLC v. United States, 56
Fed. Cl. 140, 143-44 (2003))).
21
violent and non-violent offenders be housed at the halfway house). AR at 1307.
The BOP provided Bannum with two weeks to respond to this discussion notice,
and upon request from Bannum, extended that deadline by another two weeks, to
April 11, 2014. Id. at 1304, 1334. Bannum communicated to the BOP that its
original proposed site for a halfway house, the Calhoun Street property, was no
longer eligible for a zoning special exception, because a school had moved into a
neighboring property, and outlined its intention to find a new site. Id. at 1326.
The BOP warned Bannum that a change of site request would be untimely
pursuant to the terms of the solicitation. Id. at 1334-35.
Bannum nevertheless submitted a site change request to the BOP on April
11, 2014, and noted that its prior zoning special exception had lapsed. AR at
1340. The alternate site is another vacant building, the Broad River Road
property, and would require a zoning special exception that could not be
considered by the Board of Zoning Appeals until June 4, 2014. Id. at 1340, 1391.
The BOP eliminated Bannum’s proposal from the competitive range on April 17,
2014, noting that Bannum’s proof of zoning for the former site was too restrictive
(excluding violent offenders) and apparently expired, and that the alternate site
could not be accepted because the site change request was untimely. Id. at 1432,
1476. The court finds nothing arbitrary or capricious in the BOP’s decision to
eliminate Bannum from the competition for these reasons, and finds, too, that the
BOP’s corrective action was a reasonable effort to provide Bannum with a fair
chance of competing for the residential reentry services contract.
Although Bannum asserts that disparate treatment regarding the proof of
zoning requirement marred this procurement, the court finds none. AWS offered
the BOP adequate and timely proof of zoning and Bannum did not. Because
Bannum failed to comply with a material requirement of the competition, its
proposal was eliminated. Plaintiff’s protest based on a charge of disparate
treatment cannot be sustained on this record.
B. The BOP’s Acceptance of AWS’s Past Performance Submission
Was Rational
Bannum also argues that disparate or unequal treatment tainted its
elimination from the competition for deficiency in its proof of zoning, because at
the same time AWS’s submission of an incomplete Past Performance proposal was
22
excused by the BOP. Tr. at 36. This argument is entirely unsupported by relevant
authority addressing, even by analogy, the question of whether the submission of
five relevant contracts in a Past Performance volume is a material solicitation
requirement in negotiated procurements such as this one. The solicitation
provision regarding the submission of five relevant contracts in Volume III of an
offeror’s proposal is found in the solicitation’s Compliance Matrix. AR at 205-06.
The court notes, first, that some of the required information regarding
AWS’s five relevant contracts was provided in its Business Proposal (Volume II
of its offer), under the heading “(5) Most Recent and Relevant Contracts in the
Past Three Years.” See AR at 448-50. Additional information regarding these
five contracts was accessible in a database commonly used by federal agencies, the
Past Performance Information Retrieval System (PPIRS). In addition, three of the
contracts identified by AWS in its Business Proposal were BOP contracts for
residential reentry center services. The BOP considered the information contained
in AWS’s proposal, both in the Past Performance volume and in the Business
Proposal volume, as well as the information contained in PPIRS for all three BOP
residential reentry center services contracts, to rate AWS’s proposal as acceptable
for Past Performance. Id. at 1487.
Although the court agrees with plaintiff that AWS’s proposal does not
conform with the Past Performance submission requirements set forth in the
solicitation, the court also agrees with defendant that the requirement for the
submission of five relevant contracts was not a material term of the solicitation.
To be material, a solicitation requirement must have more than a negligible impact
on the evaluation of proposals. See Blackwater Lodge & Training Ctr., Inc. v.
United States, 86 Fed. Cl. 488, 505 (2009) (stating that “[a] solicitation term is
material where it has more than a negligible impact on the price, quantity, quality,
or delivery of the subject of the bid”) (emphasis added) (citation omitted). In the
circumstances of the BOP’s evaluation of AWS’s proposal, the requirement for the
submission of five relevant contracts in the Past Performance volume had only a
negligible impact on the competition.
The BOP had access to and considered the past performance information
regarding AWS’s performance of its highly relevant incumbent residential reentry
center services contract in Columbia, South Carolina in the Past Performance
volume of AWS’s proposal. The BOP also had access to and considered similar
23
information for AWS’s other highly relevant residential reentry center services
contracts in Charleston and Florence, South Carolina through PPIRS. The
incomplete information provided by AWS therefore had only a negligible impact
on the qualitative evaluation of AWS’s past performance. The BOP rationally
accepted the incomplete Past Performance volume provided by AWS and
rationally rated AWS as acceptable for this evaluation factor.
Finally, the court finds no disparate treatment in the BOP’s consideration of
past performance information that was not included in AWS’s Past Performance
volume, as compared with the elimination of Bannum from this competition for
lack of proof of zoning. The past performance information relied upon by the
BOP was “close at hand,” in that AWS had performed BOP residential reentry
center services contracts and the PPIRS database included detailed information on
the performance of those contracts. See Shaw Parsons Infrastructure Recovery
Consultants, LLC, B-401679.4, 2010 CPD ¶ 77 (Comp. Gen. Mar. 10, 2010)
(stating that “the very nature of the ‘close at hand’ principle . . . reflects the duty of
an agency to consider relevant information in its possession notwithstanding
whether it was actually submitted by an offeror”); see also BCPeabody Constr.
Servs., Inc. v. United States, 112 Fed. Cl. 502, 510 (2013) (holding that an agency
should have clarified the protestor’s “copying error in assembling its offer” which
omitted certain past experience information for its subcontractor, when that past
experience information was already in the possession of the proposal evaluator).
In contrast, adequate proof of zoning for Bannum’s proposed halfway house
was not close at hand when the agency evaluated Bannum’s proposal – in the first
instance, the proof of zoning was deficient because it was late (for the Calhoun
Street property), and in the second instance, the proof of zoning had either lapsed
and was too restrictive (for the Calhoun Street property) or did not yet exist (for
the Broad River Road property). The court concludes that Bannum did not
experience disparate treatment when the BOP rated AWS’s past performance as
acceptable.
CONCLUSION
Accordingly, it is hereby ORDERED that
24
(1) Plaintiff’s Motion for Judgment on the Administrative Record, filed
June 18, 2014, is DENIED;
(2) Defendant’s Motion to Dismiss, filed July 2, 2014, is DENIED;
(3) Defendant’s Cross-Motion for Judgment on the Administrative
Record, filed July 2, 2014, is GRANTED;
(4) Intervenor-defendant’s Cross-Motion for Judgment on the
Administrative Record, filed July 2, 2014, is GRANTED;
(5) Intervenor-defendant’s Motion to Supplement the Administrative
Record, filed July 2, 2014, is DENIED;
(6) The Clerk’s Office is directed to ENTER final judgment in favor of
defendant and intervenor-defendant, DISMISSING the complaint
with prejudice;
(7) On or before September 5, 2014, counsel for the parties shall
CONFER and FILE with the Clerk’s Office a redacted copy of this
opinion, with any material deemed proprietary or confidential marked
out and enclosed in brackets, so that a copy of the opinion can then be
prepared and made available in the public record of this matter; and
(8) Each party shall bear its own costs.
/s/Lynn J. Bush
LYNN J. BUSH
Senior Judge
25