Opinion

Fp-Faa Seattle, LLC v. United States

124 Fed. Cl. 236
2015 U.S. Claims LEXIS 1581
2015 WL 7717206

Court: United States Court of Federal Claims
Filed: Nov 30, 2015
Status: Published
Author: Braden
On the bench: Susan G. Braden
Cited by: 1 cases
Authority: More cited than 47.0%

The opinion

In the United States Court of Federal Claims

No. 15-949

Filed: November 30, 20151

**************************************** Administrative Procedures Act

* (“APA”), 5 U.S.C. § 706;

FP-FAA SEATTLE, LLC, * Bid Protest Jurisdiction, 28 U.S.C. §

* 1491;

Plaintiff, * Competition In Contracting Act,

* 31 U.S.C. § 3551;

v. * General Services Administration

* Regulation,

THE UNITED STATES, * 48 C.F.R. § 570.306(a),

* Evaluating Offers,

Defendant, * 48 C.F.R. § 570.303-4(a),

* Changes to Solicitations For

and * Offers;

* Interested Party

DES MOINES CREEK BUSINESS * 28 U.S.C. § 1491(b)(1);

PARK PHASE II, LLC, * Rules of the United States Court of

* Federal Claims (“RCFC”)

Defendant-Intervenor. * RCFC 57, Declaratory Judgment,

* RCFC 52.1, Administrative

**************************************** Record.

William M. Jack, Kelley Drye and Warren LLP, Washington, D.C., Counsel for the Plaintiff.

Robert Mark Norway, United States Department of Justice, Civil Division, Washington, D.C.,

Counsel for the Government.

Richard J. Conway, Dickstein Shapiro, LLP, Washington, D.C., Counsel for Defendant-

Intervenor.

MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

On November 18, 2015, the court forwarded a sealed copy of this Memorandum

Opinion And Final Order to the parties to delete any confidential and/or privileged information

from the public version, and note any citation or editorial errors requiring correction.

I. RELEVANT FACTUAL BACKGROUND.2

A. Solicitation No. 3WA0392.

On August 1, 2014, the United States General Services Administration (“GSA”) issued a

Request For Lease Proposals No. 3WA0392 (“RLP”) to provide office space for the United

States Federal Aviation Administration (“FAA”) within a 10 mile radius of 1601 Lind Avenue,

S.W., Renton, Washington. AR Tab 4, at 59–60; see also AR Tab 19, at 2773.

FP-FAA Seattle, LLC (“FP-FAA”), the plaintiff in this case, currently leases the office

space to FAA. AR Tab 8, at 1064. The RLP requires that the new FAA office space provides “a

maximum of 300,000 rentable square feet (RSF) of space [from] a minimum of 259,500 to

262,100 of American National Standards Institute/Building Owners and Managers Association

(ANSI/BOMA) Office Area (ABOA) square feet (SF) [collectively, “ABOA SF”].” 3 AR Tab 4,

at 59.

The RLP also requires that offerors “demonstrate that the Government’s leased premises

can be 100% occupied by August 1, 2017.” AR Tab 4, at 82.

Initial lease proposals were due by October 3, 2014. AR Tab 4, at 70.

The August 1, 2014 RLP is a “best-value tradeoff” procurement. AR Tab 4, at 77 (“The

best value tradeoff process permits tradeoffs among price and technical factors, allowing the

Government to make an award to other than the lowest priced offeror or other than the highest

technically rated Offeror.”). But, the RLP also required that offerors submit proposals that

addressed both pricing and technical factors. AR Tab 4, at 78. In addition, Offerors were

required to submit one proposal in two separate volumes: Volume 1—Technical; and Volume

2—Pricing. AR Tab 4, at 78.

The award factors for the technical volume of the proposals are listed here in descending

order of importance:

1. Site Layout and Security;

2. Quality of Location;

3. Proposed Design Approach and Technical Quality;

4. Project Management Plan; and

5. Past Performance of Relevant Experience

The facts discussed herein were derived from the September 11, 2015 Administrative

Record (“AR Tabs 1–103,” comprised of pages 1–3796).

ABOA SF differs from Rentable Square Feet in that ABOA SF is “the area where a

tenant normally houses personnel and/or furniture[.]” AR Tab 4, at 100. Rentable Square Feet is

the “area for which a tenant is charged rent[.]” AR Tab 4, at 100. Rentable Square Feet is based

on and calculated from ABOA SF. AR Tab 4, at 100 (“Rentable Square Feet is calculated using

the following formula for each type of Space (e.g., office, warehouse, etc.) included in the

Premises: ABOA SF of Space x (1 + [Common Area Factor]) = RSF.”).

AR Tab 4, 77–78.

The RLP required Volume 2 to include the price proposal for the project, including shell

rent, real estate taxes, amortization of the tenant improvement allowance, operating services, and

any other concessions such as free rent. AR Tab 4, at 78. But, the technical award factors were

deemed to be “slightly more important than price.” AR Tab 4, at 77.

After the Lease Contracting Officer reviewed the technical and price volumes of the

proposals, it was delegated the responsibility to determine which offers should be included in the

“competitive range.” AR Tab 4, at 78. Next, the Lease Contracting Officer was required to

negotiate with offerors in the competitive range. AR Tab 4, at 78. After evaluations,

discussions, negotiations apprising offerors as to any weaknesses in their proposals and

providing a reasonable determination about corrections, the Lease Contracting Officer would

request final proposals from the offerors. AR Tab 4, at 78. The Source Selection Evaluation

Board then would evaluate the final proposals and recommend “the proposal that represents the

best value to the Government considering technical evaluation factors and price” to the Source

Selection Authority. AR Tab 4, at 78.

B. The Proposals.

On October 3, 2014, nine timely proposals were submitted:

1. FP-FAA Seattle, LLC;

2. Des Moines Creek Business Park Phase II, LLC;4

3. [REDACTED];

4. [REDACTED];

5. [REDACTED];

6. [REDACTED];

7. [REDACTED];

8. [REDACTED]; and

9. [REDACTED].

AR Tab 19, at 2776–77.

On November 13, 2014, after receiving the offers from the Lease Contracting Officer, the

Source Selection Evaluation Board convened and reached a consensus on the technical

proposals. AR Tab 19, at 2778. Pricing was not considered. AR Tab 19, at 2778, 2796. Based

on the technical evaluations, the Source Selection Evaluation Board recommended

[REDACTED], Des Moines, and [REDACTED] to be included in the competitive range. AR

Tab 25, at 2908.

On December 11, 2014, after considering the Source Selection Evaluation Board’s

recommendations, the Lease Contracting Officer deemed four proposals to be in the competitive

range—[REDACTED], Des Moines, [REDACTED], and FP-FAA. AR Tab 25, at 2908–09.

The Administrative Record refers to Des Moines Creek Business Park Phase II, LLC as

“Panattoni Development Company, Inc.” or “Panattoni.”

The offerors were invited to submit revisions to their Initial Proposal by January 9, 2015 and

then, a Final Proposal by February 6, 2015. AR Tab 30, at 3033 (Dec. 19, 2014 e-mail from

CBRE Group (“CBRE”), GSA’s broker, to Des Moines); AR Tab 15, at 2616 (Dec. 19, 2014 e-

mail from CBRE, GSA’s broker, to FP-FAA); Tab 25, at 2880 (April 28, 2015 Source Selection

Decision describing the procurement).

1. FP-FAA Seattle, LLC’s Proposals.

a. The Initial Proposal.

FP-FAA submitted a timely Initial Proposal on October 3, 2014. AR Tab 8, at 818. FP-

FAA’s Initial Proposal stated that it would fulfill the RLP’s requirements through “a phased

addition and renovation of [the current office FAA occupies].” AR Tab 8, at 876. FP-FAA’s

initial proposal received a rating of: “Very Good” for its Site Layout And Security; “Acceptable”

for the Quality Of Location; “Very Good” for its Proposed Design Approach And Technical

Quality; “Marginal” for its Project Management Plan; and “Marginal” for its Past Performance

Of Relevant Experience. AR Tab 19, at 2781–82. The Source Selection Evaluation Board

identified some risk with FP-FAA’s plans to renovate its proposed building site. AR Tab 19, at

2781–82. Specifically, the Source Selection Evaluation Board stated that FP-FAA’s Initial

Proposal did “not adequately address impact to [the] tenant occupying the building during major

renovation[.]” AR Tab 19, at 2782. Overall, the Source Selection Evaluation Board gave FP-

FAA’s Initial Proposal a rating of “Adequate” with respect to its technical evaluation. AR Tab

19, at 2796.

b. The Final Proposal.

FP-FAA timely submitted a Final Proposal on February 6, 2015. AR Tab 8, at 1898.1.

FP-FAA’s Final Proposal received a rating of: “Very Good” for Site And Security; “Acceptable”

for Quality Of Location; “Very Good” for Proposed Design Approach And Technical Quality;

“Marginal” for Project Management Plan; and “Marginal” for Past Performance. AR Tab 25, at

2955–57. The Board again expressed concern that FP-FAA did not provide a plan to address the

“construction and disruption risk[.]” AR Tab 25, at 2956. Specifically, the Source Selection

Evaluation Board noted that during a February 17, 2015 oral presentation of FP-FAA’s Final

Proposal, FP-FAA stated that it “would need concessions from the government relative to the

existing lease contract in order to deliver the space under the new lease . . . . [REDACTED].”

AR Tab 25, at 2902. As such, the Board concluded that FP-FAA “did not adequately address

risk to the successful completion of the new construction due to the existing building being

occupied.” AR Tab 25, at 2905.

Overall, FP-FAA’s Final Proposal ranked third with respect to its technical rating,

receiving a technical score of 260.9. AR Tab 25, at 2885. FP-FAA’s Final Proposal had the

lowest price. AR Tab 25, at 2886. Its overall rating was “Acceptable.” AR 2955. FP-FAA’s

Final Proposal was considered one of the top two proposals. AR Tab 25, at 2887.

2. Des Moines Creek Business Park Phase II, LLC’s Proposal.

a. The Initial Proposal.

Des Moines timely submitted its Initial Proposal on October 3, 2014. AR Tab 9, at 1899.

Des Moines’ Initial Proposal received a rating of: “Very Good” for its Site Layout and Security;

“Acceptable” for its Quality Of Location; “Very Good” for its Proposed Design Approach And

Technical Quality; “Acceptable” for its Project Management Plan; and “Marginal” for its Past

Performance of Relevant Experience. AR Tab 19, at 2787–88. GSA’s broker, CBRE, however,

calculated that Des Moines’ Initial Proposal exceeded the RLP’s maximum ABOA SF

requirement by 6.94%. AR Tab 30, at 3034. Overall, Des Moines’ Initial Proposal received a

rating of “Very Good” from the Source Selection Evaluation Board. AR Tab 19, at 2787.

b. The Final Proposal.

Des Moines timely submitted a Final Proposal on February 6, 2015. AR Tab 9, at 2408.

To address CBRE’s concern that Des Moines exceeded the maximum ABOA SF requirement,

Des Moines included an Area Reduction Tracking Summary, as well as computer-aided design

(“CAD”) plans to demonstrate compliance with the RLP’s ABOA SF requirement. AR Tab 9, at

2436–41.

Des Moines’ Final Proposal received a rating of: “Excellent” for Site And Security;

“Very Good” for Quality Of Location; “Very Good” for Proposed Design Approach And

Technical Quality; “Acceptable” for Project Management Plan; and “Marginal” for Past

Performance. AR Tab 25, at 2958–60. Des Moines’ Final Proposal received the second highest

ranking with respect to pricing. AR Tab 25, at 2896.

Overall, Des Moines’ Final Proposal ranked first, with respect to the technical evaluation,

receiving a technical score of 335.3. AR Tab 25, at 2885. Des Moines’ Final Proposal had the

second lowest price. AR Tab 25, at 2886. Des Moines’ Final Proposal also received a rating of

“Very Good,” making it one of the top two proposals. AR Tab 25, at 2887, 2958.

On February 12, 2015, however, CBRE determined that Des Moines’ Final Proposal

exceeded the maximum ABOA SF requirement by 8,936 SF. AR Tab 28, at 2988–90. Upon

review, the Lease Contracting Officer determined that CBRE’s calculation was incorrect. AR

Tab 83, at 3487. Specifically, the Lease Contracting Officer determined that “[CBRE’s

calculation] centered around misplacement of polylines on each floor to assist in calculating the

square footage, misunderstanding aspects of the space that may be part of an excluded area, and

a misunderstanding of the Government’s calculation methodology to the standard.” AR Tab 83,

at 3487. The Lease Contracting Officer concluded that “the difference between the

measurements of space was not significant, that CBRE’s calculation could have been flawed, and

that Des Moines, based upon their revised calculations and supporting documents did not offer

any additional space outside the requirements of the RLP.” AR Tab 83, at 3487.

C. The Award.5

On April 28, 2015, the Source Selection Evaluation Board recommended awarding the

lease to Des Moines. AR Tab 25, at 2906–07. In an April 29, 2015 letter, GSA informed FP-

FAA of its intent to award the lease to Des Moines. AR Tab 25, at 3515.

II. RELEVANT PROCEDURAL HISTORY.

A. Proceedings Before The Government Accountability Office.

On May 18, 2015, FP-FAA filed a protest with the United States Government

Accountability Office (“GAO”). AR Tab 85, at 3492–3522. FP-FAA protested that, in deciding

to award Des Moines the lease, GSA deviated from the stated evaluation criteria, failed to

engage in meaningful discussions, evaluated proposals in a disparate manner, and unreasonably

evaluated proposals. AR Tab 85, at 3499.

On June 26, 2015, FP-FAA filed a supplemental protest, arguing that Des Moines’ Final

Proposal did not conform to the RLP’s ABOA SF requirement. AR Tab 98, at 3647–72.

On July 2, 2015, the Lease Contracting Officer submitted to the GAO a supplemental

Statement Of Fact, wherein he explained that “the difference between the measurements of space

was not significant, that CBRE’s calculation could have been flawed, and that Des Moines,

based upon their revised calculations and supporting documents did not offer any additional

space outside the requirements of the RLP.” AR Tab 83, at 3487.

On July 7, 2015, GSA filed an Agency Report. AR Tab 99, at 3673. On July 13, 2015,

Des Moines filed Comments on the Agency Report as an intervenor. AR Tab 100, at 3706.

On August 26, 2015, the GAO determined that GSA’s “evaluation was reasonable and

consistent with the evaluation criteria, and that offerors were treated equally.” AR Tab 102, at

3779. The GAO determined that Des Moines met the 262,100 ABOA SF requirement. AR Tab

102, at 3787–88. Therefore, the GAO denied in part and dismissed in part FP-FAA’s protest.

AR Tab 102, at 3790.

B. Proceedings Before The United States Court Of Federal Claims.

On August 31, 2015, FP-FAA filed a Complaint with the United States Court of Federal

Claims under seal (“Compl.”). The Complaint alleged that GSA’s intent to award the contract to

Des Moines was improper, because Des Moines’ proposal failed to adhere to the maximum

allowable ABOA SF. Compl. ¶¶ 3, 28. In addition, the Complaint requested a temporary

restraining order and preliminary injunction, requiring GSA to suspend the lease award to Des

Moines. Compl. ¶ 51(1). The Complaint also requested a declaratory judgment pursuant to 28

Although this is a pre-award bid protest, this case resembles a post-award bid protest,

because GSA made an award decision and then issued notice that it “intended” to award the

contract to Des Moines. AR Tab 25, at 3515.

U.S.C. § 2201 et seq.6 and Rule 57 of the Rules of the Court of Federal Claims (“RCFC”),7

because GSA’s “award decision was unreasonable, arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law[.]” Compl. ¶ 51(2). The Complaint also requested a

permanent injunction and either, the costs of pursuing this action, or bid preparation and proposal

costs, pursuant to 28 U.S.C. § 1491(b)(2).8 Compl. ¶ 51(5). On that same day, FP-FAA also

filed: a Proposed Redacted Document; a Motion For Temporary Restraining Order; a Motion For

Preliminary Injunction; a Sealed Memorandum In Support Of Motion For Temporary

Restraining Order And Motion For Preliminary Injunction; a Motion For Leave To File Under

Seal The Memorandum And Complaint; a Motion For Protective Order; and a Disclosure

Statement.

On September 1, 2015, the court held a telephone status conference. That same day, Des

Moines filed an Unopposed Motion To Intervene.

On September 2, 2015, the Government filed a Response To FP-FAA’s August 31, 2015

Motion For Protective Order. That same day, the court granted FP-FAA’s August 31, 2015

Motion For Protective Order.

On September 3, 2015, the parties filed a Joint Notice Regarding Preliminary Injunctive

Relief And Scheduling (“Joint Notice”). Therein, the Government agreed, at the court’s request,

to withhold awarding the contract and signing the lease “until the earlier of November 30, 2015

or the Court’s resolution of the parties’ cross-motions for judgment upon the administrative

record.” Joint Notice at 1. Consequently, FP-FAA withdrew its August 31, 2015 Motion For

Temporary Restraining Order and Motion For Preliminary Injunction. Joint Notice at 1.

Section 2201 of the Declaratory Judgments Act, in relevant part, provides that:

[A]ny court of the United States, upon the filing of an appropriate

pleading, may declare the rights and other legal relations of any interested party

seeking such declaration, whether or not further relief is or could be sought. Any

such declaration shall have the force and effect of a final judgment or decree and

shall be reviewable as such.

28 U.S.C. § 2201.

RCFC 57, in relevant part, provides that, “[t]he existence of another adequate remedy

does not preclude a declaratory judgment that is otherwise appropriate. The court may order a

speedy hearing of a declaratory-judgment action.” RCFC 57.

Section 1491(b)(2) of the Tucker Act, in relevant part, provides, “the courts may award

any relief that the court considers proper, including declaratory and injunctive relief except that

any monetary relief shall be limited to bid preparation and proposal costs.” 28 U.S.C. §

1491(b)(2).

On September 9, 2015, the court entered: a Scheduling Order; an Order Withdrawing FP-

FAA’s August 31, 2015 Motion For Temporary Restraining Order And Motion For Preliminary

Injunction; and an Order Granting Des Moines’ September 1, 2015 Motion To Intervene.

On September 11, 2015, the Government filed the Administrative Record under seal.

On September 18, 2015, under seal FP-FAA filed: an Amended Complaint (“Am.

Compl.”); a Motion For Judgment On The Administrative Record (“Pl. Mot.”); and a

Memorandum In Support Of Plaintiff’s Motion For Judgment On The Administrative Record

(“Pl. Mem.”). The September 18, 2015 Amended Complaint alleged that, in accepting Des

Moines’ Final Proposal, GSA had not complied with 48 C.F.R. § 570.3069 and 48 C.F.R. §

570.303-4.10 Am. Compl. ¶ 42–45. The September 18, 2015 Amended Complaint also alleged

that GSA’s decision was arbitrary and capricious. Am. Compl. ¶ 46.

On September 25, 2015, Des Moines filed under seal an Opposition To Plaintiff’s Motion

for Judgment Upon The Administrative Record, Cross-Motion for Judgment Upon The

Administrative Record, And Supporting Memorandum (“Int. Opp.”). That same day, the

Government filed a Motion To Dismiss, Cross Motion For Judgment Upon The Administrative

Record, and Response To FP-FAA’s Motion For Judgment On The Administrative Record

(“Gov’t Mot.”) under seal.

On October 2, 2015, FP-FAA filed under seal a Response And Reply (“Pl. Resp.”) both

to the Government’s Cross-Motion and Response and Des Moines’ Cross-Motion and Response.

On October 9, 2015, Des Moines filed under seal a Reply To FP-FAA’s October 2, 2015

Response To Des Moines’ Cross Motion For Judgment Upon The Administrative Record (“Int.

Reply”). That same day, under seal the Government filed a Reply In Support Of Its September

25, 2015 Motion To Dismiss And Cross-Motion For Judgment Upon The Administrative Record

(“Gov’t Reply”).

Section 570.306 of the General Services Administration Regulation (“GSAR”)

provides, in relevant part, that “[t]he contracting officer must evaluate offers solely in

accordance with the factors and subfactors stated in the SFO [Solicitation For Offers].” 48

C.F.R. § 570.306.

Section 570.303-4 of the GSAR provides, in relevant part, that “[i]f the Government’s

requirements change, either before or after receipt of proposals, issue an amendment.” 48 C.F.R.

570.303-4.

III. DISCUSSION.

A. Jurisdiction.

Pursuant to 28 U.S.C. § 1491(b)(1), the United States Court of Federal Claims has

jurisdiction:

[T]o 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 proposed

procurement.

28 U.S.C. § 1491(b)(1) (emphasis added).

The September 18, 2015 Amended Complaint alleges that GSA’s April 29, 2015 letter of

intent, indicating a decision to award the lease to Des Moines was “arbitrary, capricious, and in

violation of GSA’s regulations.” Am. Compl. ¶ 3. The United States Court of Federal Claims

has jurisdiction to adjudicate allegations by an interested party objecting to a proposed contract

or award. See 28 U.S.C. § 1491(b)(1). Therefore, the court has jurisdiction over the allegations

in FP-FAA’s September 18, 2015 Amended Complaint.

B. Standard Of Review.

Pursuant to the Tucker Act, as amended by the Administrative Dispute Resolution Act,

Pub. L. No. 104-320 § 12, 110 Stat. 3870, 3874 (Oct. 19, 1996), the United States Court of

Federal Claims is authorized to review challenges to agency decisions, pursuant to the standards

set forth in the Administrative Procedure Act (“APA”), 5 U.S.C. § 706. See 28

U.S.C. § 1491(b)(4) (“In any action under this subsection, the courts shall review the agency’s

decision pursuant to the standards set forth in section 706 of title 5.”); see also 5

U.S.C. § 706(2)(A) (“The reviewing court shall . . . 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[.]”); see also Banknote Corp. of Am., Inc. v. United States,

365 F.3d 1345, 1350 (Fed. Cir. 2004) (“Among the various APA standards of review in section

706, the proper standard to be applied in bid protest cases is provided by 5 U.S.C. § 706(2)(A): a

reviewing court shall set aside the agency action if it is ‘arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.’”) (citations omitted).

When a bid protest is based on a regulatory or procedural violation, i.e., “not in

accordance with law,” the United States Court of Appeals for the Federal Circuit also has

imposed an additional requirement that “the disappointed bidder must show a clear and

prejudicial violation of applicable statutes or regulations.” Axiom Res. Mgmt., Inc. v. United

States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (internal quotations and citations omitted). This

burden is even greater when the procurement is a “best value” procurement, as is the case here.

See Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (“[A]s the

contract was to be awarded based on ‘best value,’ the contracting officer had even greater

discretion . . . . [T]he relative merit of competing proposals is primarily a matter of

administrative discretion.”) (citations omitted); see also TRW, Inc. v. Unisys Corp., 98 F.3d

1325, 1327 (Fed. Cir. 1996) (“In determining whether the agency has complied with the

regulation authorizing best value procurements, the [reviewing authority] may overturn an

agency’s decision if it is not grounded in reason.”).

If an award decision is challenged, because it was made without a rational basis, the trial

court must determine “whether the contracting agency provided a coherent and reasonable

explanation of its exercise of discretion, and the disappointed bidder bears a heavy burden of

showing that the award decision had no rational basis.” Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d 1324, 1332–33 (Fed. Cir. 2001) (citations and quotations

omitted); see also Savantage Fin. Servs., Inc. v. United States, 595 F.3d 1282, 1287 (Fed. Cir.

2010) (“[W]e must sustain an agency action unless the action does not evince rational reasoning

and consideration of relevant factors.”) (internal alterations, quotations, and citations omitted);

Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1368–69 (Fed. Cir. 2009) (“We have stated

that procurement decisions invoke highly deferential rational basis review . . . . Under that

standard, we sustain an agency action evincing rational reasoning and consideration of relevant

factors.”) (citations omitted).

In the alternative, if an award decision is challenged on the grounds that an agency acted

in an arbitrary or capricious manner, the court may intervene “only in extremely limited

circumstances.” United States v. John C. Grimberg Co., Inc., 702 F.2d 1362, 1372 (Fed. Cir.

1983). “Courts have found an agency’s decision to be arbitrary and capricious when 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) (quoting

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

In this case, the parties have filed Cross-Motions For Judgment On The Administrative

Record, requiring the court to conduct a proceeding akin to an expedited trial on the record. See

RCFC 52.1;11 see also Bannum, Inc. v. United States, 404 F.3d 1346, 1356 (Fed. Cir. 2005)

(“[T]he judgment on an administrative record is properly understood as intending to provide for

an expedited trial on the record.”). The existence of a material issue of fact, however, does not

prohibit the court from granting a motion for judgment on the administrative record, although the

court has not conducted an evidentiary proceeding. See Bannum, 404 F.3d at 1357 (authorizing

the court to make “factual findings under RCFC [52.1]12 from the [limited] record evidence as if

it were conducting a trial on the record.”).

RCFC 52.1, in relevant part, provides, “When proceedings before an agency are

relevant to a decision in a case, the administrative record of those proceedings must be certified

by the agency and filed with the court.” RCFC 52.1.

In 2006, RCFC 56.1 “Review of a Decision on the Basis of the Administrative Record”

was repealed and replaced with RCFC 52.1, to conform to the United States Court of Appeals for

the Federal Circuit’s decision in Bannum, 404 F.3d at 1354 (holding that the court should “make

factual findings from the record evidence as if it were conducting a trial on the record”). See

RCFC 52.1, 2006 Rules Committee Notes.

C. Whether FP-FAA Has Standing.

1. The Government’s And Defendant-Intervenor’s Argument.

The Government and Des Moines argue that FP-FAA does not have standing to contest

the GSA’s decision, because FP-FAA did not have a substantial chance of winning the contract

award. Gov’t Mot. at 20; Int. Opp. at 22, 24.

Specifically, FP-FAA’s Final Proposal was nonconforming, because it could not meet the

RLP’s August 1, 2017 occupancy deadline. Gov’t Mot. at 22–23. In fact, FP-FAA’s oral

presentation admitted that it “would need concessions from the [G]overnment relative to the

existing lease contract in order to deliver the space under the new lease” rendered FP-FAA’s

Final Proposal nonconforming. Gov’t Mot. at 21 (citing AR Tab 25, at 2902). Specifically, FP-

FAA stated that [REDACTED]. AR Tab 25, at 2903. Therefore, the Source Selection

Evaluation Board concluded that “[FP-FAA] failed to demonstrate its capacity to timely deliver

the space as part of their offer.” AR Tab 25, at 2904. Because FP-FAA’s Final Proposal

contained material misrepresentations about FP-FAA’s ability to meet the August 1, 2017

occupancy date, FP-FAA’s Final Proposal was nonconforming and did not have a substantial

chance of winning the award. Gov’t Mot. at 22–23.

2. FP-FAA’s Response.

FP-FAA responds that it “did not condition its proposal upon obtaining concessions

under the existing lease for the [FAA] building.” Pl. Resp. at 3. FP-FAA’s Final Proposal also

stated that occupancy would be available “[p]rior to August 1, 2017.” AR Tab 8, at 1898.17. As

for the Source Selection Evaluation Board’s statements about FP-FAA’s ability to meet the

August 1, 2017 deadline, those statements “indicate[] that [GSA] considered [FP-FAA’s]

existing lease obligations to be a matter of proposal risk, not technical acceptability.” Pl. Resp.

at 5 (emphasis added). The Source Selection Evaluation Board’s decided that FP-FAA was “one

of the top two proposals, with a high technical score and the lowest price of all the offerors.” Pl.

Resp. at 6. Consequently, FP-FAA had a substantial chance of obtaining the contract with

standing to challenge the award. Pl. Resp. at 6.

3. The Court’s Resolution.

As a threshold matter, a plaintiff contesting the award of a federal contract must establish

that it is an “interested party” to have standing under 28 U.S.C. § 1491(b)(1). See Myers

Investigative & Sec. Servs. v. United States, 275 F.3d 1366, 1369–70 (Fed. Cir. 2002)

(“[S]tanding is a threshold jurisdictional issue[.]”). The United States Court of Appeals for the

Federal Circuit has construed the term “‘interested party’ in section 1491(b)(1) . . . in accordance

with the Competition in Contracting Act (“CICA”), 31 U.S.C. §§ 3551–56[.]” Rex Serv.

Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). “[T]o come within the [United

States] Court of Federal Claims’ section 1491(b)(1) bid protest jurisdiction, [the protester] is

required to establish that it (1) is an actual or prospective bidder, and (2) possesses the requisite

direct economic interest.” Distrib. Solutions, Inc. v. United States, 539 F.3d 1340, 1344 (Fed.

Cir. 2008) (citations omitted).

In addition to establishing “interested party” status, a protestor must show that the alleged

errors in the procurement were prejudicial. See Labatt Food Serv., Inc. v. United States, 577

F.3d 1375, 1378–79 (Fed. Cir. 2009) (“It is basic that ‘because the question of prejudice goes

directly to the question of standing, the prejudice issue must be reached before addressing the

merits.’”); see also Myers, 275 F.3d at 1370 (“[P]rejudice (or injury) is a necessary element of

standing.”).

In this case, FP-FAA submitted a proposal in response to the RLP. AR Tab 8, at 818–

1898. As an actual bidder, FP-FAA satisfies the first element of the “interested party” test.

See Distrib. Sols., Inc., 539 F.3d at 1344 (“To qualify as an ‘interested party,’ a protestor must

establish that . . . it was an actual or prospective bidder or offeror[.]”).

As to the second element, i.e., that the plaintiff “had a direct economic interest” in the

proposed procurement, FP-FAA submitted the lowest price bid and the record shows that FP-

FAA was one of the top two bidders. AR Tab 25, at 2887. Thus, FP-FAA satisfies the second

element of the “interested party” test. See United States v. International Business Machines

Corp., 892 F.2d 1006, 1011 (Fed. Cir. 1989) (“[O]nly the second-lowest bidder is an interested

party entitled to protest the award of the contract, . . . because only it stands to receive the

contract in lieu of the challenged awardee.”) (citation omitted).

As to prejudice, FP-FAA contends that GSA failed to exclude Des Moines’ Final

Proposal, despite that fact that it was not in compliance with the maximum ABOA SF

requirement. Pl. Mem. at 15 (“Des Moines’ proposal should have been eliminated from the

competition based on its failure to comply with the material RLP ABOA SF requirement.”).

GSA’s failure would constitute an error. As such, the alleged error would prejudice FP-FAA,

because “there is a ‘substantial chance’ [that the plaintiff] would have received the contract

award but for the . . . error[] in the bid process.” Bannum, 404 F.3d at 1358.

For these reasons, the court determines that FP-FAA has standing to seek an adjudication

of this bid protest.

D. Whether General Services Administration’s Contract Award To Des Moines

Violated The Administrative Procedures Act.

1. FP-FAA’s Argument.

FP-FAA argues that GSA’s decision was arbitrary and capricious under section

706(2)(A) of the Administrative Procedures Act. First, GSA’s acceptance of Des Moines’ Final

Proposal violated 48 C.F.R. § 570.30613 and 48 C.F.R. § 570.303-414 (collectively, “GSAR

Section 570.306 of the General Services Administration Regulation (“GSAR”)

provides, in relevant part, that “[t]he contracting officer must evaluate offers solely in

accordance with the factors and subfactors stated in the SFO [Solicitation For Offers].” 48

C.F.R. § 570.306.

provisions”), because Des Moines improperly offered “approximately” rather than exactly

262,100 ABOA SF. Second, GSA’s determination that Des Moines complied with the RLP’s

ABOA SF requirement did not have a rational basis. Am. Compl. ¶¶ 42–45; see also Pl. Mem. at

14–16, 25.

FP-FAA contends that GSA violated the GSAR provisions, because despite the RLP

requesting an exact amount of ABOA SF, Des Moines’ Final Proposal conditioned its offer on an

approximate amount of ABOA SF. Pl. Mem. at 15–16. The RLP specifically requested a

“maximum of 300,000 rentable square feet (RSF) of space yielding a minimum of 259,000 to a

maximum of 262,100 of American National Standards Institute/Building Owners and Managers

Association (ANSI/BOMA) Office Area (ABOA) square feet (SF).” AR Tab 4, at 59. Yet, Des

Moines stated in its Final Proposal that the “offered space . . . will yield approximately 262,100

[ABOA SF] as depicted on the plans of the offered space included elsewhere in this Offer.” AR

Tab 9, at 2499 (emphasis added). The RLP’s ABOA SF maximum requirement mandated exact

compliance, not an approximation. Pl. Mem. at 17–18. In fact, “the word ‘approximately’ does

not appear anywhere in the RLP’s requirement regarding ABOA SF for the building.” Pl. Mem.

at 19. Because Des Moines improperly conditioned its offer on an approximate ABOA SF

estimate rather than an exact ABOA SF calculation, Des Moines’ proposal was unacceptable and

the decision to award the lease to Des Moines violated the GSAR provisions. Pl. Mem. at 19.

In addition, GSA’s decision lacked a rational basis. Pl. Mem. at 22. “[T]he

Administrative Record is devoid of any analysis by the Lease Contracting Officer to verify Des

Moines’ compliance with the ABOA SF requirement.” Pl. Mem. at 22. FP-FAA notes that the

Lease Contracting Officer did not “identify the space scaling report he reviewed . . . nor did he

provide his own calculations of the space offered by Des Moines to verify CBRE’s calculations

were incorrect.” Pl. Mem. at 23. Moreover, the Area Reduction Tracking Summary in Des

Moines’ final proposal showed “reductions in the rentable square footage . . . offered . . ., not

reductions in ABOA SF.” Pl. Mem. at 23–24 (emphasis added) (citing AR Tab 9, at 2436

(“Revisions meet the GSA requirement that the ABOA range be between 259,500sf – 262,100sf

via a reduction of 18,195sf Total Rentable Area to the original submitted building design.”)

(emphasis added)). The Lease Contracting Officer’s statement to the GAO that CBRE

miscalculated Des Moines’ ABOA SF is not supported by the record. Pl. Mem. at 24.

Moreover, the Lease Contracting Officer’s statement “runs counter to the overwhelming

evidence of Des Moines[’] repeated failure to meet the ABOA SF requirement[.]” Pl. Mem. at

25 (citing Motor Vehicles Ass’n, 463 U.S. at 43 (defining arbitrary and capricious to include

where an agency “has offered an explanation for its decision that runs counter to the evidence

before the agency.”).

Section 570.303-4 of the GSAR provides, in relevant part, that “[i]f the Government’s

requirements change, either before or after receipt of proposals, issue an amendment.” 48 C.F.R.

570.303-4.

2. The Government’s and Defendant-Intervenor’s Response.

The Government and Des Moines respond that Des Moines’ Final Proposal met the

RLP’s ABOA SF requirement and did not improperly offer an “approximate amount of space.”

Gov’t Mot. at 2; see also Int. Opp. at 1. Moreover, the Lease Contracting Officer’s

determination that Des Moines complied with the RLP was rationally based. Gov’t Mot. at 2;