“A latent ambiguity should be construed against the Government in accordance with the recognized contract interpretation principle of contra proferentum [sic].” (alteration added)
How later courts described this case
- “A latent ambiguity should be construed against the Government in accordance with the recognized contract interpretation principle of contra proferentum [sic].” (alteration added)
Written by the judges who cited it.
The opinion
In the United States Court of Federal Claims
No. 16-544 C
Filed: August 16, 2016*
**************************************** Administrative Procedures Act
* (“APA”), 5 U.S.C. § 706;
T.W. LAQUAY MARINE, LLC, * Bid Protest Jurisdiction, 28 U.S.C. §
* 1491;
Plaintiff, * Competition In Contracting Act
* (“CICA”),
v. * 10 U.S.C. § 2304(a);
* 31 U.S.C. § 3551;
THE UNITED STATES, * Federal Acquisition Regulation
* (“FAR”),
Defendant, * FAR § 1.403 (Individual
* Deviations);
and * FAR § 15.101-2 (Lowest Priced
* Technically Acceptable Source
JAR ASSETS, LLC, * Selection Process);
* FAR § 15.303(b)(6)
Defendant-Intervenor. * (Responsibilities);
* Rules of the United States Court of
**************************************** Federal Claims (“RCFC”),
RCFC 52.1 (Administrative
Record).
Mark R. Thomas, Reid Law PC, Denver, Colorado, Counsel for Plaintiff.
Mark Edward Porada, United States Department of Justice, Civil Division, Washington, D.C.,
Counsel for the Government.
William Barron Arbuthnot Avery, Baker & Hostetler, LLP, Washington, D.C., Counsel for the
Defendant-Intervenor.
MEMORANDUM OPINION AND FINAL ORDER
BRADEN, Judge.
*On August 9, 2016, the court forwarded a sealed copy of this Memorandum Opinion And
Final Order to the parties to redact any confidential and/or privileged information from the public
version, and note any citation or editorial errors requiring correction.
I. RELEVANT FACTUAL BACKGROUND.1
On September 16, 2015, the United States Transportation Command (“USTRANSCOM”)
issued Solicitation HTC711-15-R-W004 (“Solicitation”) for tug and barge services to transport
bulk jet fuel in the Gulf of Mexico and the Lower Mississippi River. AR Tab 13 at 95, 144. The
Solicitation provided that a Firm Fixed Price contract would be awarded using low priced
technically acceptable (“LPTA”) source selection procedures. AR Tab 13 at 122. The Solicitation
identified five factors that would be used to evaluate offers:
FACTOR 1: Price
FACTOR 2: Technical Capability
Subfactor A: Equipment
Subfactor B: Management of Operations
FACTOR 3: Past Performance
FACTOR 4: Cyber Security
FACTOR 5: Evaluation of Use of U.S. Shipyards
AR Tab 13 at 123.
On October 1, 2015, USTRANSCOM issued an Amendment that modified 3.1.1 of the
Performance of Work Statement (“PWS”) to provide that the offerors’ barges could not be more
than twelve years old. AR Tab 16 at 188, 203. The October 1, 2015 Amended Solicitation also
provided that the offerors’ proposals first would be ranked in price order from lowest to highest,
based on the total proposed price (“TPP”). AR Tab 16 at 188.
The October 1, 2015 Amended Solicitation also provided that the Source Selection
Evaluation Board would evaluate each offeror’s Factor 2 Technical Capability at the subfactor
level and rate each subfactor “Acceptable or Unacceptable.” AR Tab 16 at 188. Next, the Source
Selection Evaluation Board would evaluate the Factor 3 Past Performance of the lowest ranked
TPP offeror with Acceptable ratings. AR Tab 16 at 188. Factor 3 Past Performance would be
rated Acceptable or Unacceptable. AR Tab 16 at 188. Next, the lowest ranked TPP offeror with
Acceptable Technical Capability and Past Performance ratings would be evaluated for Factor 4
Cyber Security. AR Tab 16 at 188. Factor 4 Cyber Security would be rated Acceptable or
Unacceptable. AR Tab 16 at 188. Next, the lowest ranked TPP offeror with Acceptable Technical,
Past Performance, and Cyber Security ratings would be evaluated under Factor 5, i.e., use of United
States shipyards for certain overhaul, repair, and maintenance work. AR Tab 16 at 188. The
Source Selection Evaluation Board would rate Factor 5 as Acceptable or Unacceptable. AR Tab
16 at 188. Finally, the lowest TPP proposal with Acceptable ratings for Technical Capability, Past
Performance, Cyber Security and U.S. [United States] shipyard use would be evaluated to
determine “whether the prices offered are fair and reasonable . . . using one or more techniques set
forth in FAR 15.404-1(b)(2).” AR Tab 16 at 188. If the lowest ranked TPP offeror’s prices were
determined to be fair and reasonable, that offer would be determined to represent the “best value”
1
The facts discussed herein were derived from the May 11, 2016 Administrative Record
(“AR Tabs 1–132,” comprised of pages 1–2998).
2
for the Government and the evaluation would end and award would be made to that offeror
“without further consideration of any other offers.” AR Tab 16 at 188.
If the Government was unable to determine the lowest ranked TPP offeror’s prices to be
fair and reasonable or if an Unacceptable rating was received,
the next lowest ranked TPP offer [would] be evaluated. This process [would]
continue (in order of ascending price) until an offeror [was] judged to have
[Acceptable] ratings . . . or until all offerors have been evaluated. At this point, the
Source Selection Authority [would] determine whether it is in the Government’s
best interest to award without discussions or enter into discussions.
AR Tab 16 at 188.
On October 8, 2015, USTRANSCOM issued another Amendment that: extended the
proposal due date from October 16, 2015 to October 19, 2015; extended the deadline for the Past
Performance Questionnaire to October 19, 2015; revised paragraphs 3.1.1 and 3.1.1.1. of the PWS;
and revised the Pricing Matrix. AR Tab 21 at 237.
On October 19, 2015, USTRANSCOM received proposals from JAR Assets, Inc. (“JAR”),
T.W. LaQuay Marine, LLC (“LaQuay”), and [REDACTED]. AR Tab 33 at 825. [REDACTED]
TPP was the lowest and [REDACTED] TPP was the highest. AR Tab 33 at 825.
On November 5, 2015, USTRANSCOM rated all proposals as Unacceptable, based on the
Technical Capability subfactors. AR Tab 37 at 852. USTRANCOM suspended further proposal
evaluations and decided to conduct discussions with all offerors “with the intent of allowing the
offerors to revise their technical proposals to enhance their proposal’s potential for award[.]” AR
Tab 37 at 853. That same day, USTRANSCOM issued seven evaluation notices each to all three
offerors. AR Tabs 38–40.
On November 17, 2015, LaQuay responded to the seven evaluation notices. AR Tabs 59–
66. On November 20, 2015, JAR responded to the seven evaluation notices. AR Tabs 67–73. On
November 25, 2015, [REDACTED] responded to the seven evaluation notices. AR Tabs 74–79.
On December 30, 2015, USTRANSCOM sent an email to LaQuay with a Final Proposal
Revisions Request, stating “[t]he Government has completed its evaluation of your responses to
our Evaluation Notices and concluded all technical discussion issues have been resolved.” AR
Tab 106 at 2657. Specifically, USTRANSCOM determined that all of LaQuay’s Factors were
“Acceptable,” and LaQuay’s TPP was $76,532,080.56. AR Tab 106 at 2656–57. That same day,
USTRANSCOM also sent an email to [REDACTED] with a Final Proposal Revisions Request,
stating “[t]he Government has completed its evaluation of your responses to our Evaluation
Notices and concluded all technical discussion issues have NOT been resolved.” AR Tab 107 at
2660–61. Specifically, USTRANSCOM determined that [REDACTED] Factor 2 Technical
Capability was still “Unacceptable.” AR Tab 107 at 2661. That same day, USTRANSCOM also
sent an email with a Final Proposal Revisions Request to JAR, stating that “[t]he Government has
completed its evaluation of your responses to our Evaluation Notices and concluded all technical
discussion issues have been resolved.” AR Tab 105 at 2652–53. Specifically, USTRANSCOM
3
determined that all of JAR’s Factors were “Acceptable,” and JAR’s TPP was [REDACTED]. AR
Tab 105 at 2653.
On January 4, 2016, JAR submitted a revised Final Proposal. AR Tab 109. On January 5,
2016, LaQuay elected not to submit any revisions2 and submitted a Final Proposal. AR Tab 110.
On January 7, 2016, [REDACTED] submitted a revised Final Proposal. AR Tab 112.
On January 27, 2016, USTRANSCOM awarded the contract to JAR. AR Tab 122 at 2710.
On February 1, 2016, LaQuay requested a debriefing. AR Tab 126 at 2782. On February
3, 2016, USTRANSCOM provided LaQuay with a written explanation. AR Tab 128.
II. PROCEDURAL HISTORY.
A. Proceedings Before The United States Government Accountability Office.
On February 16, 2016, LaQuay filed a protest with the United States Government
Accountability Office (“GAO”), alleging that USTRANSCOM’s initial evaluation of LaQuay’s
proposal was “irrational and unreasonable,” because “LaQuay’s price was in the competitive range
and its technical proposal was objectively [A]cceptable from the outset[.]” AR Tab 129 at 2788.
On April 7, 2016, the GAO dismissed LaQuay’s protest, because “[t]he [Solicitation] provided for
[an] award . . . without discussions where the firm that submitted the lowest-priced initial proposal
was also determined to have submitted a technically [A]cceptable proposal; however, where the
lowest-priced initial proposal was not found to be [A]cceptable, the agency retained the right to
conduct discussions[.]” AR Tab 132 at 2996.
B. Proceedings Before The United States Court Of Federal Claims.
On May 3, 2016, LaQuay (“Plaintiff”) filed: a Complaint; a Motion For Temporary
Restraining Order; a Motion For Preliminary Injunction; a Motion For Permanent Injunction; a
Motion For Protective Order; a Rule 7.1 Disclosure Statement; and a Motion To Seal The Motion
For Protective Order, Motion For Temporary Restraining Order, Motion For Preliminary
Injunction, Motion For Permanent Injunction, Disclosure Statement, And Complaint.
On May 4, 2016, the court convened a telephone status conference, wherein the court
denied Plaintiff’s Motion For Temporary Restraining Order, subject to the Government’s filing of
appropriate verification from agency counsel substantiating the Government’s representations
during the status conference regarding the necessity of uninterrupted fuel services to support jet
warfighters at up to [REDACTED] military installations made.
On May 5, 2016, JAR (“Defendant-Intervenor”) filed, under seal, a Motion To Intervene
that the court granted on May 10, 2016. On May 11, 2016, the court issued a Protective Order.
That same day, the Government filed a Notice Of Filing Administrative Record And Certification
LaQuay submitted a “corrected pricing matrix,” but this was because USTRANSCOM
2
provided a pricing spreadsheet with an error in the Solicitation. As such, USTRANSCOM
corrected the error and requested all offerors to re-submit pricing on the corrected spreadsheet.
AR Tabs 105–107.
4
Of The Administrative Record and a Response To Plaintiff’s May 3, 2016 Motion For Temporary
Restraining Order, under seal. On May 14, 2016, Plaintiff filed, under seal, an Unopposed Motion
To Amend Schedule that the court granted on May 16, 2016. On May 17, 2016, the court granted
Plaintiff’s May 3, 2016 Motion To Seal. On May 18, 2016, Plaintiff filed, under seal, a Reply To
The Government’s May 11, 2016 Response To Plaintiff’s May 3, 2016 Motion For Temporary
Restraining Order.
On May 20, 2016, Plaintiff filed an Amended Complaint (“Am. Compl.”) with two counts.
Count I alleged that USTRANSCOM violated the Federal Acquisition Regulations (“FAR”). Am.
Compl. ¶¶ 102–04. Specifically, Count I of the May 20, 2016 Amended Complaint alleged that
USTRANSCOM’s evaluation and award decision violated FAR §§ 1.401 and 15.101-2 by
deviating from the LPTA source selection procedures outlined in FAR Part 15. Am. Compl. ¶¶
105–11. The May 20, 2016 Amended Complaint also alleged that USTRANSCOM violated FAR
§ 15.303(b)(4) by imposing evaluation criteria not discussed in the Solicitation. Am. Compl. ¶¶
112–15. The May 20, 2016 Amended Complaint also alleged that USTRANSCOM violated FAR
§ 15.303(b)(5), because USTRANSCOM did not select Plaintiff as providing the “best value” to
the agency. Am. Compl. ¶¶ 117–21. Count II of the May 20, 2016 Amended Complaint alleged
that USTRANSCOM’s evaluation and award decision did not have a rational basis and was
irrational. Am. Compl. ¶¶ 122–42. That same day, JAR filed, under seal, a Response To Plaintiff’s
May 3, 2016 Motion For Preliminary Injunction.
On May 31, 2016, Plaintiff filed, under seal, a Motion For Judgment On The
Administrative Record and attached thereto a Memorandum In Support Of Plaintiff’s Motion For
Judgment On The Administrative Record (“Pl. MMJAR”). On June 24, 2016, the Government
filed, under seal, an Opposition To Plaintiff’s Motion For Judgment On The Administrative Record
And Cross-Motion For Judgment On The Administrative Record (“Gov’t MJAR”). On June 25,
2016, Defendant-Intervenor filed an Unopposed Motion For Extension Of Time Until 6/25/16 To
File Cross-Motion And Opposition and filed, under seal, a Cross-Motion And Response To
Plaintiff’s Motion For Judgment On The Administrative Record (“D.I. MJAR”) And Partial
Motion To Dismiss (“D.I. Mot.”). On June 27, 2016, the court granted Defendant-Intervenor’s
June 25, 2016 Unopposed Motion For Extension Of Time. On July 1, 2016, Plaintiff filed, under
seal, a Response To The Government’s And Defendant-Intervenor’s Cross-Motions For Judgment
On The Administrative Record (“Pl. Resp.”). On July 11, 2016, the Government filed a Reply To
Plaintiff’s Response To Defendant’s Cross-Motion For Judgment On The Administrative Record
(“Gov’t Reply”). That same day, the Defendant-Intervenor also filed a Reply To Plaintiff’s
Response To Cross-Motion And Opposition To Judgment On The Administrative Record (“D.I.
Reply”).
5
III. DISCUSSION.
A. Jurisdiction.
Pursuant to 28 U.S.C. § 1491(b)(1), the United States Court of Federal Claims has
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 proposed procurement.
28 U.S.C. § 1491(b)(1).
The May 20, 2016 Amended Complaint alleges that USTRANSCOM erred in awarding
the contract to JAR. Am. Compl. ¶¶ 12–13. 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 to adjudicate the claims
in LaQuay’s May 20, 2016 Amended Complaint.
B. Standing.
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, LaQuay submitted a proposal in response to the Solicitation. AR Tab 32. As
an actual bidder, LaQuay satisfies the first element of the “interested party” test.
See Distrib. Solutions, 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, the May 20, 2016 Amended Complaint alleges that had USTRANSCOM
6
conducted a proper LPTA procurement, LaQuay would have been the only eligible offeror.
Am. Compl. ¶ 12. Thus, LaQuay satisfies the second element of the “interested party” test.
As to prejudice, the May 20, 2016 Amended Complaint alleges that USTRANSCOM’s
violations of the FAR and/or the irrational evaluation of the proposals resulted in
USTRANSCOM’s failure to award LaQuay the contract. Am. Compl. ¶¶ 102–42.
USTRANSCOM’s violation of the FAR and/or an irrational evaluation would prejudice LaQuay,
because “there is a ‘substantial chance’ [that the plaintiff] would have received the contract award
but for the . . . error[] in the bid process.” Bannum, Inc. v. United States, 404 F.3d 1346, 1358
(Fed. Cir. 2005).
For these reasons, the court determines that LaQuay has standing to seek adjudication of
this bid protest.
C. Whether The Source Selection Authority Violated FAR §§ 15.101-2, 1.4,
15.303(b)(4), And 15.303(b)(5).
1. Plaintiff’s Argument.
The Solicitation required USTRANSCOM to conduct an LPTA procurement. Pl. MMJAR
at 17 (citing AR Tab 21 at 28). Specifically, the Solicitation stated that, “Award will be made to
the lowest priced responsible offeror whose proposal meets the requirements for technical
capability, past performance, cyber security, use of U.S. shipyards and whose price is determined
fair and reasonable.” Pl. MMJAR at 17 (emphasis in Plaintiff’s brief) (quoting AR Tab 13 at 122).
FAR § 15.101-2(b)(1) requires that an agency conducting an LPTA procurement “shall specify [in
the solicitation] that award will be made on the basis of the lowest evaluated price of proposals
meeting or exceeding the acceptability standards for non-cost factors.” Pl. MMJAR (emphasis in
Plaintiff’s brief) (quoting § 15.101-2(b)(1)). LaQuay’s October 19, 2015 Proposal and LaQuay’s
January 5, 2016 Proposal were exactly the same. Pl. MMJAR at 10. Accordingly, LaQuay’s
October 19, 2015 Proposal should have been rated Acceptable and LaQuay should have been
awarded the Contract under LPTA procedures. Pl. MMJAR at 18. Therefore, USTRANSCOM’s
discussions with two Unacceptable offerors, when LaQuay’s October 19, 2015 Proposal was
initially Acceptable, violated FAR § 15.101-2 “by creating evaluation criteria other than approved
LPTA procedures . . . , which improperly replaced FAR 15.101-2 without prior approval.” Pl.
MMJAR at 18.
In addition, USTRANSCOM violated FAR Subpart 1.4, “which prescribes the policies and
procedures for authorizing deviations from the FAR,” by replacing FAR-mandated LPTA
procedures without authorization. Pl. MMJAR at 19. “[D]eviations from the FAR must be
affirmatively granted by the agency head, and the ‘contracting officer must document the
justification and agency approval in the contract file.’” Pl. MMJAR at 18 (citing FAR § 1.403).
A deviation is “a policy, procedure, solicitation provision . . . , contract clause . . . , method, or
practice of conducting acquisitions of any kind at any stage of the acquisition process that is
inconsistent with the FAR.” Pl. MMJAR (quoting FAR § 1.401(a)). LaQuay argued that
USTRANCOM improperly deviated from LPTA procedures in FAR § 15.101-2 by conducting
discussions with all offerors. Pl. MMJAR at 18–19. To the extent that the Government contended
7
that the Solicitation authorized FAR deviations, “the language notifying offerors of the deviation
without citation to the granting authority expressly prescribed by FAR § 1.403 constituted a latent
ambiguity that could not have been discovered by a reasonable offeror at the time of proposal
submission.” Pl. MMJAR at 19.
LaQuay also argued that USTRANSCOM violated FAR § 15.303(b)(4), by imposing
evaluation criteria not stated in the Solicitation. Pl. MMJAR at 19. FAR § 15.303(b)(4) requires
that the Source Selection Authority “[e]nsure . . . proposals are evaluated based solely on the
factors and subfactors contained in the solicitation[.]” Pl. MMJAR at 19. USTRANSCOM
improperly sought additional information through evaluation notices, claiming that LaQuay’s
October 19, 2015 Proposal did not contain the requisite information. Pl. MMJAR at 20.
USTRANSCOM’s improper determination that additional information was required “led to it
making the improper initial determination that LaQuay’s Technical Proposal was Unacceptable.
This determination in turn led [USTRANSCOM] to wrongfully open discussions with other
offerors[.]” Pl. MMJAR at 20.
And, LaQuay argued that USTRANSCOM violated FAR § 15.303(b)(6)3 requiring an
agency to “[s]elect the source or sources whose proposal is the best value to the Government.” Pl.
MMJAR at 20 (quoting FAR § 15.303(b)(6)). Prior to discussions, there was only one technically
[A]cceptable proposal—LaQuay’s. Pl. MMJAR at 21. “[USTRANSCOM’s] failure to award
[LaQuay] . . . clearly prejudiced LaQuay because it was the Best Value offeror and should have
received the contract award.” Pl. MMJAR at 21.
2. The Government’s And Defendant-Intervenor’s Responses.
The Government responded that the May 20, 2016 Amended Complaint’s allegation that
USTRANSCOM improperly deviated from the FAR is untimely. Gov’t MJAR at 12. LaQuay
waived the right to challenge the Solicitation’s terms by failing to raise the challenges before the
close of bidding. Gov’t MJAR at 12 (citing Bannum, Inc. v. United States, 779 F.3d 1376, 1380
(Fed. Cir. 2015)). Because LaQuay raised this claim for the first time post-award, LaQuay “has
waived any right to challenge the terms of the [S]olicitation or the evaluation process[.]” Gov’t
MJAR at 12–13.
The Government also contended that, even if LaQuay established that the October 19, 2015
Proposal “should have been found technically [A]cceptable at the outset,” the Solicitation’s terms
did not require an automatic award of the contract to LaQuay. Gov’t MJAR at 13–14. The plain
3
LaQuay cited FAR § 15.303(b)(5) as requiring an agency’s source selection authority to
“[s]elect the source or sources whose proposal is the best value to the Government[.]” Pl. MMJAR
at 20–21. But, FAR § 15.303(b)(5) states that an agency’s source selection authority only will
“[c]onsider the recommendations of advisory boards or panels (if any)[.]” FAR § 15.303(b)(5).
The court interprets LaQuay’s citation to FAR § 15.303(b)(5) as a mistake and assumes that
LaQuay intended to refer to FAR § 15.303(b)(6), requiring an agency’s source selection authority
to “[s]elect the source or sources whose proposal is the best value to the Government[.]” FAR §
15.303(b)(6).
8
language of the Solicitation made clear that automatic award would occur only if the offeror with
the lowest ranked TPP had Acceptable ratings and if the Government determined that that offeror’s
price was fair and reasonable. Gov’t MJAR at 14 (citing AR 16 at 188). “Here, it is undisputed
that LaQuay did not have the lowest ranked [TPP]; [REDACTED].” Gov’t MJAR at 14 (emphasis
in original). [REDACTED] had the lowest TPP. Gov’t MJAR (citing AR Tab 37 at 852). Under
the Solicitation’s terms, if USTRANSCOM determined that [REDACTED] initial proposal
technically was Acceptable and the proposed price was fair and reasonable, then “the award would
have been issued to [REDACTED] without further consideration of the competing offers.” Gov’t
MJAR at 14. But, USTRANSCOM determined [REDACTED] proposal was technically
Unacceptable, and therefore, was free to engage in discussions with the three offerors. Gov’t
MJAR at 14 (citing AR Tab 16 at 188).
In addition, the Solicitation incorporated FAR § 52.212-1(g).4 Gov’t MJAR at 15 (citing
AR Tab 13 at 95, 117). Specifically, “although [USTRANSCOM] intended to award a contract
without discussions if able to do so, [USTRANSCOM] ‘reserve[d] the right to conduct discussions
if later determined by the Contracting Officer to be necessary.’” Gov’t MJAR at 15 (citing AR
Tab 13 at 117). As such, in the event that the lowest ranked TPP offeror did not have Acceptable
ratings and/or a fair and reasonable price, then USTRANSCOM would “determine whether it is in
the Government’s best interest to award without discussions or enter into discussions.” Gov’t
MJAR at 15 (quoting AR Tab 16 at 188). As the Contracting Officer explained:
It is determined to be in the Government’s best interest to keep all three Offerors in
the competitive range and open discussions. The SSEB [Source Selection
Evaluation Board] technical team determined that through discussions it is
anticipated each offeror[’s] technical proposal can be altered or explained to
enhance materially the proposal’s potential for a technically [A]cceptable rating.
Discussion ENs [Evaluation Notices] were generated because the offerors left out
information required by the solicitation/PWS [Performance Work Statement]
and/or did not adequately explain or demonstrate specific requirement capabilities.
Gov’t MJAR at 15 (quoting AR Tab 37 at 852).
4
FAR § 52.212-1(g) provides:
Contract award (not applicable to Invitation for Bids). The Government intends to
evaluate offers and award a contract without discussions with offerors. Therefore,
the offeror’s initial offer should contain the offeror’s best terms from a price and
technical standpoint. However, the Government reserves the right to conduct
discussions if later determined by the Contracting Officer to be necessary. The
Government may reject any or all offers if such action is in the public interest;
accept other than the lowest offer; and waive informalities and minor irregularities
in offers received.
48 C.F.R. § 52.212-1(g).
9
Therefore, “[e]ven assuming LaQuay’s proposal was found technically [A]cceptable, and
the other two proposals had been found technically [U]nacceptable, the [S]olicitation on its face
allowed [USTRANSCOM] to conduct discussions with offerors . . . prior to making any award.”
Gov’t MJAR at 16.
Next, the Government rebutted LaQuay’s contention that the Solicitation did not clearly
state that the modified evaluation process had been approved by USTRANSCOM in accordance
with FAR § 1.403 and thus, contained a “latent ambiguity.” Gov’t MJAR at 17 (citing Pl. MMJAR
at 19). FAR § 1.403 provides that a solicitation may deviate from standard FAR solicitation terms,
if approved and documented by the agency. Gov’t MJAR at 17–18 (citing FAR § 1.403). “[E]ven
if the omission of that certification of authorization possibly could be viewed as creating any
ambiguity in the evaluation process stated in the [S]olicitation, it would be a patent ambiguity.”
Gov’t MJAR at 18 (citing Newsom v. United States, 676 F.2d 647, 650 (Ct. Cl. 1982)). “If a
contract contains a patent ambiguity, the contractor is under a duty to inquire and must seek
clarification of the proper contract interpretation.” Gov’t MJAR (quoting Cmty. Heating &
Plumbing Co. v. Kelso, 987 F.2d 1575, 1579 (Fed. Cir. 1993)).
Finally, the Government concluded that USTRANSCOM did not violate FAR §
15.303(b)(6) as it states that a source selection authority will “[s]elect the source or sources whose
proposal is the best value to the Government.” Gov’t MJAR at 19 (quoting 48 C.F.R. §
15.303(b)(6)). But, an agency “has considerable discretion in determining which proposal
represents the best value.” Gov’t MJAR at 19 (citing Glenn Def. Marine (ASIA), PTE Ltd. v.
United States, 720 F.3d 901, 908 (Fed. Cir. 2013) (“This court accords contracting officers an even
greater degree of discretion when the award is determined based on the best value to the agency.”);
Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1355 (Fed. Cir. 2004) (“It is well-
established that contracting officers have a great deal of discretion in making contract award
decisions, particularly when, as here, the contract is to be awarded to the bidder or bidders that
will provide the agency with the best value.”)). USTRANSCOM’s determination that JAR’s
proposal offered the “best value” is fully explained in detail in the record. Gov’t MJAR at 20
(citing AR Tab 119).
The Defendant-Intervenor added that the terms of the Solicitation are “unambiguous,”
because the Solicitation plainly specifies only one situation where USTRANSCOM would award
the contract without discussions: “if the lowest priced TPP offer were found to [have] a Technically
Acceptable proposal with a fair and reasonable price[.]” D.I. MJAR at 10–11 (citing AR Tab 16
at 188). In the absence of such an offeror, the Solicitation provided that the Source Selection
Authority had the discretion to determine, if “it is in the Government’s best interest to award
without discussions” or to enter discussions. D.I. MJAR at 11 (citing AR Tab 16 at 188).5
5
Plaintiff countered, “LaQuay’s argument is that [USTRANSCOM’s] interpretation and
application of the [S]olicitation . . . improperly led it to ignore a technically [A]cceptable proposal,
which (1) effectively constituted an improper FAR deviation, and (2) conflicted with the terms of
the [S]olicitation when read as a whole and in conjunction with the FAR.” Pl. Resp. at 4. “In fact,
rather than the language of the [S]olicitation itself patently contravening the FAR, it was
[USTRANSCOM’s] subsequent actions that actually contravened the FAR LPTA procedures.”
10
3. The Court’s Resolution.
i. The May 20, 2016 Amended Complaint’s Count I Claims Based
On FAR §§ 1.4 And 15.101-2 Are Untimely.
It is well-established that “a party who has the opportunity to object to the terms of a
government solicitation containing a patent error and fails to do so prior to the close of the bidding
process waives its ability to raise the same objection subsequently in a bid protest action in the
[United States] Court of Federal Claims.” Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308,
1313 (Fed. Cir. 2007) (emphasis added). LaQuay argued that the Solicitation’s provisions
allowing USTRANSCOM to conduct discussions was not a patent error, but a latent ambiguity
and therefore, LaQuay’s challenge is timely. Pl. MMJAR at 19.
In determining whether a solicitation’s provisions contain a patent error or a latent
ambiguity, the court must first determine whether the Solicitation’s provisions governing
discussions were ambiguous. See NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159
(Fed. Cir. 2004) (“To show an ambiguity it is not enough that the parties differ in their respective
interpretations of a contract term. [Instead], both interpretations must fall within a ‘zone of
reasonableness.’”); see also Avedon Corp. v. United States, 15 Cl. Ct. 771, 776 (1988) (“A contract
is ambiguous[,] if it sustains the interpretations advanced by both parties.”). Under LaQuay’s
interpretation, the Source Selection Authority must automatically award a technically Acceptable
offeror that has the highest price, without discussion. Pl. MMJAR at 17–18. But this interpretation
directly contradicts the terms of the Solicitation. The Solicitation clearly stated that the Source
Selection Authority would conduct discussions if the lowest ranked TPP offeror did not have
Acceptable ratings or a fair and reasonable price. AR Tab 16 at 188 (“If the Government is unable
to determine the lowest ranked TPP offeror’s prices to be fair and reasonable or if an
[U]nacceptable rating is received . . . , the next lowest ranked TPP offer will be evaluated. This
process will continue (in order of ascending price) until an offeror is judged to have . . .
[A]cceptable [ratings] . . . or until all offerors have been evaluated. At this point, the Source
Selection Authority will determine whether it is in the Government’s best interest to award without
discussions or enter into discussions.”). LaQuay’s interpretation is unreasonable and the
Solicitation is not ambiguous. Accordingly, the May 20, 2016 Amended Complaint’s challenge
based on FAR 1.4 and the Source Selection Agency’s decision to engage in discussions with
offerors is untimely.
Even assuming arguendo that the May 20, 2016 Amended Complaint’s allegation was
timely, USTRANSCOM did not improperly deviate from the FAR by conducting discussions. An
improper deviation from the FAR occurs when an agency uses “a policy, procedure, solicitation
provision . . . , contract clause . . . , method, or practice of conducting acquisitions of any kind at
any stage of the acquisition process that is inconsistent with the FAR.” FAR § 1.401(a). Individual
Pl. Resp. at 4. LaQuay only learned of USTRANSCOM’s interpretation and application of the
Solicitation after the award was made; LaQuay is “not expected to exercise clairvoyance in
spotting hidden ambiguities in the bid documents[.]” Pl. Resp. at 5 (quoting Blount Bros. Constr.
Co. v. United States, 346 F.2d 962, 973 (Ct. Cl. 1965)).
11
deviations from the FAR “may be authorized by the agency head. The contracting officer must
document the justification and agency approval in the contract file.” FAR § 1.403. The
Solicitation expressly stated that it would use “low priced technically acceptable (LPTA) source
selection procedures (FAR 15.101-2).” AR Tab 16 at 188. The LPTA procedures in FAR §
15.101-2 permits an agency to engage in discussions with offerors when conducting an LPTA
procurement. FAR § 15.101-2(b)(4) (“Exchanges may occur[.]”). As such, even assuming
LaQuay’s October 19, 2015 Proposal should have been determined technically Acceptable,
USTRANSCOM’s decision to conduct discussions with offerors did not deviate from the FAR.
In addition, the May 20, 2016 Amended Complaint’s claim based on FAR § 15.101-2 also
is untimely. The Solicitation enumerated the specific procedures that USTRANSCOM would
consider in evaluating the offers and was unambiguous about the Source Selection Authority’s
discretion to engage in discussions. AR Tab 16 at 188. For example, the Solicitation provided
that only the lowest ranked TPP offeror with Acceptable ratings and whose price is determined to
be fair and reasonable will be awarded the contract without further discussions. AR Tab 16 at 188.
In the event the lowest ranked TPP offeror’s prices were not fair and reasonable or if the lowest
ranked TPP offeror receives an Unacceptable rating, then the Source Selection Authority would
evaluate the next lowest TPP offeror. AR Tab 16 at 188. If the next lowest TPP offeror receives
Acceptable ratings, then “the Source Selection Authority will determine whether it is in the
Government’s best interest to award without discussions or enter into discussions.” AR Tab 16 at
188 (emphasis added). The parties do not dispute that LaQuay’s October 19, 2015 Proposal
offered [REDACTED] TPP. AR Tab 33 at 825. Therefore, under the Solicitation’s terms, even if
LaQuay’s October 19, 2015 Proposal was the only proposal with Acceptable ratings, the Source
Selection Authority should have found that it was in the best interest of the Government to enter
into discussions. AR Tab 16 at 188. Accordingly, the May 20, 2016 Amended Complaint’s
challenge is untimely. Even if the May 20, 2016 Amended Complaint’s challenge, based on FAR
§ 15.101-2 was timely, the LPTA procedures in FAR § 15.101-2 permits an agency to engage in
discussions with offerors when conducting an LPTA procurement. See FAR § 15.101-2(b)(4)
(“Exchanges may occur[.]”). As such, USTRANSCOM did not violate FAR § 15.101-2 by
conducting discussions with offerors.
For these reasons, the court has determined that the May 20, 2016 Amended Complaint’s
FAR § 1.4 et seq. and FAR § 15.101-2 challenges to the Solicitation are untimely. Nevertheless,
USTRANSCOM did not deviate from the FAR and therefore, has not violated FAR § 1.4 et seq.
The court also has determined that USTRANSCOM did not violate FAR § 15.101-2.
iii. The Source Selection Authority Did Not Violate FAR §
15.303(b)(4).
FAR § 15.303(b)(4) requires that proposals should be evaluated “based solely on the
factors and subfactors contained in the solicitation.” FAR § 15.303(b)(4). USTRANSCOM issued
seven evaluation notices to LaQuay. AR Tab 39. LaQuay argues that these evaluation notices
improperly sought information beyond what the Solicitation required. Pl. MMJAR at 19–20.
Based on the court’s evaluation of the Administrative Record, infra, the court has determined that
12
USTRANSCOM’s evaluation notices did not seek information beyond what was required in the
Solicitation.
iv. The Source Selection Authority Did Not Violate FAR §
15.303(b)(6).
FAR § 15.303(b)(6) provides that an agency “shall . . . [s]elect the source or sources whose
proposal is the best value to the Government[.]” FAR § 15.303(b)(6). In this LPTA procurement,
the best value proposal was defined as the proposal that had “the lowest evaluated price . . . meeting
or exceeding the acceptability standards for non-cost factors.” FAR § 15.101-2(b)(1). The
Solicitation specified that automatic award would be made to the lowest ranked TPP offeror that
had Acceptable ratings and whose price was determined to be fair and reasonable. AR Tab 16 at
188. It is undisputed that LaQuay’s October 19, 2015 Proposal had [REDACTED] TPP. AR Tab
33 at 825. As such, USTRANSCOM did not violate FAR § 15.303(b)(6) by conducting
discussions with the offerors rather than automatically awarding the contract to LaQuay based on
LaQuay’s October 19, 2015 Proposal.
D. Whether The Source Selection Authority’s Decision Lacked A Rational Basis.
1. Plaintiff’s Argument.
LaQuay argued that although USTRANSCOM identified seven problems with LaQuay’s
October 19, 2015 Proposal, “it is apparent that none of the discussion issues raised in the seven
Evaluation Notices justify the . . . initial determination that LaQuay’s Technical Capabilities Factor
was [U]nacceptable.” Pl. MMJAR at 23 (emphasis in original).
USTRANSCOM’s Evaluation Notice LAQ-0001 stated that LaQuay’s October 19, 2015
Proposal was defective, because LaQuay provided documentation for only four motor vessels and
four barges when the Solicitation required documentation for four motor vessels and eight barges.
Pl. MMJAR at 23 (citing AR Tab 39 at 900). But, the Solicitation only required offerors to provide
documentation “for the primary four barges, not the optional four barges.” Pl. MMJAR at 23
(emphasis in original). Specifically, the Solicitation required “[t]wo barge tows . . . [and] [e]ach
tow shall consist of either two individual 25,000 barrel barges, or not more than three barges
total[.]” AR Tab 21 at 253–54. The Solicitation also required “two (2) additional optional on-call
tows” that could be ordered separately. AR Tab 21 at 254. In addition, LaQuay’s October 19,
2015 Proposal specifically provided that [REDACTED].” Pl. MMJAR at 25 (quoting AR Tab 32
at 809). LaQuay also provided that it had [REDACTED].” Pl. MMJAR at 25 (quoting AR Tab
32 at 809). Because the Solicitation stated that USTRANSCOM “may optionally require . . . two
additional “on call” tows . . . [, USTRANSCOM’s] assertion that . . . ‘Offeror is required to provide
information on the four (4) additional barges: USCG certificates, specification sheets, and proof
of ownership or long term lease agreement . . .’ is simply not supported[.]” Pl. MMJAR at 25
(quoting AR Tab 32 at 809). Although LaQuay responded to Evaluation Notice LAQ-001
[REDACTED],” LaQuay did not incorporate these letters into the final January 5, 2016 Proposal.
Pl. MMJAR at 26 (citing AR Tab 59 at 2241).
13
In Evaluation Notice LAQ-0002, USTRANSCOM explained that LaQuay’s October 19,
2015 Proposal was defective, because LaQuay allegedly failed “to provide evidence or supporting
documentation that the barges offered are double hulled[.]” Pl. MMJAR at 27 (quoting AR Tab
39 at 901). But, LaQuay’s Technical proposal states that [REDACTED].” Pl. MMJAR at 27.
Moreover, the Solicitation “did not require specifications or drawings of the proposed barges.”
Pl. MMJAR at 28 (emphasis in original) (citing AR Tab 21 at 253–54). “Although this information
was not required, in response to the . . . Evaluation Notice, LaQuay provided [REDACTED].” Pl.
MMJAR at 28 (citing AR Tab 60). LaQuay did not incorporate this information into the January
5, 2016 Proposal. Pl. MMJAR at 28.
In Evaluation Notice LAQ-0003, USTRANSCOM also stated LaQuay’s Technical
Proposal was defective, because LaQuay failed “to adequately demonstrate/confirm that all offered
barge equipment have Cargo Tank Stripping system(s) and Water Stripping System(s)
‘independent’ of the main cargo tank pumping system and that all offered barge equipment have
trim correction tables and legible draft markings.” Pl. MMJAR at 28–29 (citing AR Tab 39 at
902). But, LaQuay’s October 19, 2015 Proposal provided [REDACTED]. Pl. MMJAR at 30
(citing AR Tab 32 at 809–10). Therefore, USTRANSCOM’s determination that LaQuay did not
address the “independence of these systems reflects a [clear] misunderstanding of technical
systems . . . and [USTRANSCOM’s] unreasonable interpretation of LaQuay’s Proposal and the
[Solicitation].” Pl. MMJAR at 30. Cargo Tank Stripping Systems and Water Stripping Systems
are “inherently independent of the onboard pumping main cargo pumping system and of each
other[.]” Pl. MMJAR at 30–31. Specifically, USTRANSCOM’s Team Technical Evaluation, AR
Tab 88, “noted that the Offeror ‘needs to clarify that Cargo Tank Stripping system(s) and Water
Stripping system(s) are ‘independent’ of the main cargo tank pumping system[.]’” Pl. MMJAR at
31 (citing AR Tab 88 at 2588). As such, USTRANSCOM admitted that this issue could have been
resolved by a clarification from LaQuay rather than opening up discussion with all offerors. Pl.
MMJAR at 31. Nevertheless, LaQuay submitted additional documentation [REDACTED]. Pl.
MMJAR at 31–32 (citing AR Tab 61 at 2262). LaQuay did not revise the January 5, 2016 Proposal
in response to this Evaluation Notice. Pl. MMJAR at 42.
In Evaluation Notice LAQ-0004, USTRANSCOM stated LaQuay’s October 19, 2015
Proposal was defective, because LaQuay failed “to describe and provide information on how it
intends to comply with the gauging operations and completion of the Vessel Ullage Report[.]” Pl.
MMJAR at 32 (citing AR Tab 39 at 903). But, the Solicitation did not require a narrative for
gauging. Pl. MMJAR at 32 (citing AR Tab 21, at 241–42). Specifically, the Solicitation provided:
Gauging of the vessel is performed jointly. A Government Representative must
witness gauging of the vessel. Contractor Representative(s) personnel are
responsible to perform gauging of the vessel. Gauging equipment used for quantity
determination must be in proper serviceable condition. The contractor shall ensure
that responsible Contractor Representative(s) personnel are readily available for
gauging operations so as not to unduly delay release and departure of the
equipment. The contractor shall ensure that a Vessel ullage report is
annotated/completed at both the loading and discharge locations. In cases where
14
the Government Representative annotates/completes the report, the Contractor will
verify and agree with gauge figures and readings annotated by signing the report.
Pl. MMJAR at 33 (quoting AR Tab 21 at 261).
Although LaQuay was not required to provide a narrative, LaQuay’s October 19, 2015
Proposal stated that [REDACTED].” Pl. MMJAR at 33–34 (emphasis in Plaintiff’s brief) (quoting
AR Tab 32 at 813). In addition, LaQuay responded to Evaluation Notice 0004, stating that it had
[REDACTED]. Pl. MMJAR at 34 (quoting AR Tab 62 at 2272). USTRANSCOM reviewed
LaQuay’s response and determined that no further information was required. Pl. MMJAR at 34
(citing AR Tab 62 at 2272). LaQuay did not change the January 5, 2016 Proposal in response to
Evaluation Notice LAQ-0004. Pl. MMJAR at 34.
In Evaluation Notice LAQ-0005, USTRANSCOM stated that LaQuay’s October 19, 2015
Proposal was defective, because it failed to demonstrate the “managerial and supervisory ability
of key personnel, operational controls, lines of authority, necessary staffing, and customer service
as required by the [S]olicitation.” Pl. MMJAR at 34 (quoting AR Tab 39 at 904). But, LaQuay’s
October 19, 2015 Proposal provided [REDACTED]. Pl. MMJAR at 35, (citing AR Tab 32 at 812–
13). Specifically, LaQuay advised that [REDACTED].” Pl. MMJAR at 36 (citing AR Tab 32 at
812). In addition, LaQuay’s October 19, 2015 Proposal stated that [REDACTED].” Therefore, a
Quality Control Plan was not required in the Technical Proposal. Pl. MMJAR at 36 (citing AR
Tab 21 at 265). As such, USTRANSCOM’s determination that LaQuay’s October 19, 2015
Proposal was “Unacceptable” lacked a rational basis. Pl. MMJAR at 37. LaQuay did not revise
the January 5, 2016 Proposal in response to this Evaluation Notice. Pl. MMJAR at 42.
In Evaluation Notice LAQ-0006, USTRANSCOM stated that LaQuay’s Technical
Proposal was Unacceptable, because LaQuay’s Proposal “failed/fails to demonstrate the ability to
comply with the Cargo, Liability, Pollution, and Environmental Insurance requirements[.]” Pl.
MMJAR at 37 (quoting AR Tab 39 at 905). The Solicitation, however, did not require offerors to
submit proof of insurance. Pl. MMJAR at 37. Nevertheless, LaQuay responded to the Evaluation
Notice by providing a certificate of insurance. Pl. MMJAR at 38 (citing AR Tab 64). LaQuay did
not revise the January 5, 2016 Proposal in response to this Evaluation Notice. Pl. MMJAR at 38.
In Evaluation Notice LAQ-0007, USTRANSCOM stated that LaQuay’s Technical
Proposal was Unacceptable, because it “failed/fails to adequately demonstrate how it intends to
comply with [Performance Work Statement] section 4.5.2.—Readiness Notice.” Pl. MMJAR at
38 (quoting AR Tab 39 at 906). Here, USTRANSCOM “failed to account for the section of
LaQuay’s Proposal that addressed the use of a Notice of Readiness[.]” Pl. MMJAR at 38.
Specifically, LaQuay’s October 19, 2015 Proposal stated: [REDACTED].” Pl. MMJAR at 39
(quoting AR Tab 32 at 813). Therefore, LaQuay posited that “[t]he Team Evaluation must have
entirely missed this portion of LaQuay’s Proposal[.]” Pl. MMJAR at 39. Notwithstanding,
LaQuay responded to the Evaluation Notice by stating [REDACTED].” Pl. MMJAR at 39
(quoting AR Tab 65). In support, LaQuay also attached [REDACTED]. Pl. MMJAR at 39 (citing
AR Tab 65). USTRANSCOM then determined that LaQuay sufficiently addressed the Evaluation
15
Notice. Pl. MMJAR at 39 (citing AR Tab 65). LaQuay did not revise the January 5, 2016 Proposal
in response to this Evaluation Notice. Pl. MMJAR at 42.
In sum, “[a] review of all seven Evaluation Notices reveals that [USTRANSCOM’s]
asserted bases for finding LaQuay’s Technical Proposal to be Unacceptable are without merit and
are not supported by the Solicitation requirements.” Pl. MMJAR at 41. This is evidenced by the
fact that, even though USTRANSCOM invited offerors to submit Final Proposal Revisions,
LaQuay relied upon the October 19, 2015 Proposal. Pl. MMJAR at 42 (citing AR Tab 110).
Although LaQuay responded to the seven Evaluation Notices, “LaQuay never modified its
proposal. . . . However, to the extent such information was not already included in LaQuay’s
original Technical Proposal, such information was not necessary to properly respond to the
[Solicitation].” Pl. MMJAR at 42. To the extent that USTRANSCOM relied on LaQuay’s
responses to the Evaluation Notices, USTRANSCOM “effectively created and utilized unstated
evaluation criteria,” contrary to law and the Solicitation’s requirements. Pl. MMJAR at 42–43.
Finally, LaQuay concluded that the Solicitation clearly stated that award “will be made to
the lowest priced responsible offeror whose proposal meets the requirements for technical
capability, past performance, cyber security, use of U.S. shipyards and whose price is determined
fair and reasonable.” Pl. MMJAR at 44–45 (emphasis in Plaintiff’s brief) (quoting AR Tab 16 at
188). As the only technically Acceptable offer with a fair and reasonable price, “award was
required to have been made to LaQuay.” Pl. MMJAR at 45. The Solicitation “only authorized
discussions in this procurement where [USTRANSCOM] did not have before it a technically
[A]cceptable proposal with a fair and reasonable price; i.e., only when discussions were
determined to be ‘necessary’ and ‘in the Government’s best interest.” Pl. MMJAR at 45 (emphasis
in original) (citing AR Tab 13, at 117; AR Tab 16, at 188). Therefore, USTRANSCOM
“irrationally interpreted the [Solicitation] to permit discussions if the lowest priced technically
[A]cceptable offeror did not have the overall lowest total proposed price . . . of all offerors,
regardless of whether those offerors submitted [U]nacceptable proposals and even if the prices
were fair or unreasonable.” Pl. MMJAR at 46 (emphasis in original). “[E]ven if this [c]ourt
determines the language is ambiguous as to whether discussions were permitted, such a latent
ambiguity should be construed against the Government in accordance with the recognized contract
interpretation principle of contra proferentum.” Pl. MMJAR at 47 (citing Triax Pac., Inc. v. West,
130 F.3d 1469, 1475 (Fed. Cir. 1997) (“More subtle ambiguities are deemed latent and are
accorded an interpretation favorable to the contractor under the doctrine of contra proferentem.”).
USTRANSCOM’s irrational decision to engage in discussions permitted Unacceptable offerors to
make material changes to Technical Proposals, “presumably guided by Evaluation Notices which
provided a roadmap of how to become ‘Acceptable.’” Pl. MMJAR at 47.
2. The Government’s And Defendant-Intervenor’s Responses.
The Government responded that USTRANSCOM did not act irrationally in finding
LaQuay’s initial October 19, 2015 Proposal Unacceptable under the Technical subfactors. Gov’t
MJAR at 22. USTRANSCOM initially rated LaQuay’s proposal as “Unacceptable” under the
Technical subfactors. Gov’t MJAR at 22–23 (citing AR Tab 37 at 861–63; AR Tab 39 at 900–
02). “LaQuay now challenges [USTRANSCOM’s] [U]nacceptable ratings, essentially asking the
[c]ourt to re-evaluate the substance of its barge transportation proposal[.]” Gov’t MJAR at 23.
16
But, the court should defer to USTRANSCOM’s assessment, because this contract involves fuel
transportation for the military and “[i]t is well established that courts typically show great
deference to the judgment of military authorities on procurement issues related to national
security.” Gov’t MJAR at 23 (citing Winter v. Nat’l Res. Def. Council, Inc., 555 U.S. 7, 24 (2008)).
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0001. Gov’t
MJAR at 24. USTRANSCOM determined LaQuay’s October 19, 2015 Proposal was
Unacceptable under the Equipment Technical Subfactor, because LaQuay failed to provide
certifications and documentations for [REDACTED]. Gov’t MJAR at 24–25 (citing AR Tab 37
at 861). USTRANSCOM also determined LaQuay’s proposal was Unacceptable, because LaQuay
failed to provide information or documentation for [REDACTED]. Gov’t MJAR at 25 (citing AR
Tab 37 at 861). Accordingly, USTRANSCOM issued Evaluation Notice LAQ-0001 to provide
LaQuay with an opportunity to present information on [REDACTED]. Gov’t MJAR at 25 (citing
AR Tab 39 at 900). LaQuay responded by “representing that it was in [REDACTED][.]” Gov’t
MJAR at 25–26 (citing AR Tab 59 at 2241). “LaQuay did not assert that [USTRANSCOM] was
incorrectly interpreting or applying the [Solicitation.]” Gov’t MJAR at 25. It was not irrational
for USTRANSCOM to request additional information and documentation rather than accepting
LaQuay’s “bald statement” in the proposal. Gov’t MJAR at 25.
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0002. Gov’t
MJAR at 26. The Solicitation required two double hulled barge tows of not more than 25,000
barrels per barge that were not more than 12 years old. Gov’t MJAR at 26 (citing AR Tab 37 at
862). Instead, USTRANSCOM determined that LaQuay’s proposal did not provide evidence or
documentation that the barges were [REDACTED]. Gov’t MJAR at 26 (citing AR Tab 37 at 862).
LaQuay represented its equipment had [REDACTED]. Gov’t MJAR at 26 (citing AR Tab 37 at
862). But, USTRANSCOM’s Evaluation Notice LAQ-0002 asked LaQuay to provide evidence
or documentation that the barges were [REDACTED] and LaQuay complied. Gov’t MJAR at 27
(citing AR Tab 39 at 91; AR Tab 60). Therefore, “it was not irrational for [USTRANSCOM] to
ask LaQuay to provide documentation demonstrating that its barges were, in fact, [REDACTED]
[.]” Gov’t MJAR at 27.
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0003. Gov’t
MJAR at 27. LaQuay’s October 19, 2015 Proposal merely stated that the “[REDACTED]” and
“[REDACTED]” without [REDACTED]. Gov’t MJAR at 28. USTRANSCOM issued Evaluation
Notice LAQ-0003, asking LaQuay to provide evidence or documentation substantiating these
statements. Gov’t MJAR at 28 (citing AR Tab 39). LaQuay responded [REDACTED]. Gov’t
MJAR at 28 (citing AR Tab 61). LaQuay argued that USTRANSCOM “should have assumed the
systems were independent, based on general familiarity with the way those systems typically
operate. But it was not irrational for the agency to engage in discussions with LaQuay to confirm
the independence of the systems[.]” Gov’t MJAR at 29.
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0004. Gov’t
MJAR at 30. USTRANSCOM’s Evaluation Notice LAQ-0004 asked LaQuay to describe and
provide information on how LaQuay would comply with gauging operations and complete a vessel
ullage report as required by PWS section 4.4.2 of the Solicitation. Gov’t MJAR at 30 (citing AR
17
Tab 39 at 903). LaQuay’s October 19, 2015 Proposal did not identify [REDACTED]. Gov’t
MJAR at 30–31. LaQuay responded to the Evaluation Notice with [REDACTED]. Gov’t MJAR
at 31 (citing AR Tab 62). LaQuay argued that it was not required to identify the third-party
gauging service provider, because the Solicitation did not specifically identify section 4.4.2, as
requiring a narrative answer. Gov’t MJAR at 31 (citing Pl. MMJAR at 32). Although the
Solicitation may not have required a narrative answer to section 4.4.2, the Solicitation did state
that the proposals must “effectively demonstrate the offer’s ability to comply with PWS paragraphs
. . . 4.–5.5.2.” Gov’t MJAR (quoting AR Tab 16 at 190). “LaQuay’s single-sentence statement in
its proposal, parroting the language of the PWS [did] not [specify] in detail how it would meet the
requirements of section 4.4.2[.]” Gov’t MJAR at 31.
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0005, because
LaQuay’s October 19, 2015 Proposal did not outline “managerial and supervisory ability of key
personnel, operational controls, lines of authority, necessary staffing, customer service as required
by [the] [S]olicitation.” Gov’t MJAR at 32 (quoting AR Tab 37 at 863). LaQuay responded to
LAQ-0005 by submitting [REDACTED]. Gov’t MJAR at 33 (citing AR Tab 63). “Whether
LaQuay’s narrative provided sufficient information to satisfy the [S]olicitation requirements . . .
is the quintessential type of discretionary judgment exercised by the procuring agency[.]” Gov’t
MJAR at 33 (citing Matt Martin Real Estate Mgmt. LLC v. United States, 96 Fed. Cl. 106, 113
(2010)).
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0006, because
LaQuay’s October 19, 2015 Proposal did not address insurance, as required by Section 1.5.1 of
the Solicitation. Gov’t MJAR at 33 (citing AR Tab 16 at 201; AR Tab 64). LaQuay responded
by providing a certificate of insurance. Gov’t MJAR at 34 (citing AR Tab 64). Therefore,
USTRANSCOM did not act irrationally in engaging in discussions to determine whether LaQuay
was able to comply with the terms of the Solicitation. Gov’t MJAR at 34–35.
USTRANSCOM did not act irrationally in issuing Evaluation Notice LAQ-0007, because
Section 4.5.2 of the Solicitation’s PWS required a contractor to maintain contact with “the
contracting officer’s representative, consignors, consignees, and a Government quality
surveillance representative, to ensure prompt and efficient cargo movement.” Gov’t MJAR at 35
(citing AR Tab 16 at 211–12). USTRANSCOM determined LaQuay’s October 19, 2015 Proposal
was Unacceptable, because it did not demonstrate how it would comply with Section 4.5.2 and
issued an Evaluation Notice asking for this information. Gov’t MJAR at 35 (citing AR Tab 37 at
864; AR Tab 37 at 906). Specifically, LaQuay’s October 19, 2015 Proposal did not state
[REDACTED]. Gov’t MJAR at 35 (citing AR Tab 32 at 813). Instead, LaQuay responded by
representing that the [REDACTED]. Gov’t MJAR (citing AR Tab 65).
The Defendant-Intervenor added that LaQuay’s responses to USTRANSCOM’s
Evaluation Notices materially changed LaQuay’s October 19, 2015 Proposal. D.I. MJAR at 16.
18
3. The Court’s Resolution.
As a threshold matter, 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 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). Both LaQuay and the Government
misconstrue the APA standard. Instead, the gravamen of this argument is whether
USTRANSCOM’s Evaluation Notices and determinations were arbitrary and capricious. 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)).
With respect to Evaluation Notice LAQ-0001, the Solicitation required 4 barges with an
option to add 4 additional barges with a minimum of 15 days’ notice. AR Tab 21 at 253–54. The
Solicitation also required offerors to provide descriptions of the equipment that would “allow the
Government to determine compliance with service requirements[.]” AR Tab 16 at 189.
Accordingly, it was not arbitrary or capricious for USTRANSCOM to issue an Evaluation Notice,
requesting specifications, certifications, and proof of ownership, or a lease agreement for the 4
additional barges. AR Tab 39 at 900. In addition, because the Solicitation specified that
USTRANSCOM required an option for 4 additional barges, the Evaluation Notice did not
improperly seek to evaluate proposals via unstated evaluation criteria. As such, USTRANSCOM
did not violate FAR § 15.303(b)(4).
With respect to Evaluation Notice LAQ-0002, the Solicitation required all barges to be
“double hulled.” AR Tab 210 at 254. The Solicitation also required offerors to provide
descriptions of the equipment that would “allow the Government to determine compliance with
service requirements[.]” AR Tab 16 at 189. LaQuay’s October 19, 2015 Proposal stated that
[REDACTED]. AR Tab 32. Accordingly, it was not arbitrary or capricious for USTRANSCOM
to issue Evaluation Notice LAQ-0002, requiring “evidence or supporting documentation that the
barges offered are double hulled[.]” AR Tab 39 at 901. In addition, because the Solicitation
specified that USTRANSCOM required barges to be double hulled, the Evaluation Notice did not
improperly seek to evaluate proposals via unstated evaluation criteria. As such, USTRANSCOM
did not violate FAR § 15.303(b)(4).
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With respect to Evaluation Notice LAQ-0003, the Solicitation required barges to be
equipped with a cargo pumping system, cargo tank stripping system, water stripping system, gauge
point marks, and calibration charts. AR Tab 21 at 254–55. Moreover, the Solicitation stated that
proposals “shall be clear, concise, and shall include sufficient detail for effective evaluation and
for substantiating the validity of stated claims. The proposal should not simply rephrase or restate
the [G]overnment’s requirements but rather shall provide convincing rationale to address how the
offeror intends to meet these requirements.” AR Tab 21 at 239 (emphasis added). LaQuay’s
October 19, 2015 Proposal stated that [REDACTED]. AR Tab 32 at 809–10. But, LaQuay did
not provide any specifications or documentation to support their statement. AR Tab 32.
Accordingly, it was not arbitrary or capricious for USTRANSCOM to issue Evaluation Notice
LAQ-0003, requiring that LaQuay “adequately demonstrate/confirm that all offered barge
equipment have Cargo Tank Stripping system(s) and Water Stripping system(s) ‘independent’ of
the main cargo tank pumping system and that all offered barge equipment have trim correction
tables and legible draft markings.” AR Tab 39 at 902. In addition, because the Solicitation
specified that USTRANSCOM required barges to be so equipped and because the Solicitation also
required “[o]fferors [to] assume that the Government has no prior knowledge of their equipment
facilities and experience,” the Evaluation Notice did not improperly seek to evaluate proposals via
unstated evaluation criteria. As such, USTRANSCOM did not violate FAR § 15.303(b)(4).
With respect to Evaluation Notice LAQ-0004, the Solicitation requires that the offeror be
able to perform joint gauging of the vessel. AR Tab 21 at 261. LaQuay’s October 19, 2015
Proposal [REDACTED]. AR Tab 32. Although the Solicitation did not specifically require
offerors to provide a written narrative for gauging, AR Tab 21 at 241, the Solicitation required
offerors to provide descriptions of the offeror’s equipment that would “allow the Government to
determine compliance with service requirements[.]” AR Tab 16 at 189. LaQuay’s October 19,
2015 Proposal did not include [REDACTED]. AR Tab 32. Accordingly, it was not arbitrary or
capricious for USTRANSCOM to issue Evaluation Notice LAQ-0004, requiring “information on
how [the offeror] intends to comply with the gauging operations[.]” AR Tab 39 at 903. In addition,
because the Solicitation specified that an offeror must be able to perform joint gauging, the
Evaluation Notice did not improperly seek to evaluate proposals under unstated evaluation criteria.
As such, USTRANSCOM did not violate FAR § 15.303(b)(4).
With respect to Evaluation Notice LAQ-0005, the Solicitation required proposals to
include “a comprehensive document that outlines the company’s concept of operations, to include
its skills and capability to meet the requirements of this acquisition. The offeror must demonstrate
managerial and supervisory ability of key personnel, operational controls, [and] lines of
authority[.]” AR Tab 21 at 242 (emphasis added). LaQuay’s October 19, 2015 Proposal stated
that [REDACTED]. AR Tab 32 at 812. LaQuay’s October 19, 2015 Proposal did not include an
organizational chart or other documentation, demonstrating the skills and capabilities of the
company. AR Tab 32. Accordingly, it was not arbitrary or capricious for USTRANSCOM to
issue Evaluation Notice LAQ-0005, requiring “information on managerial and supervisory ability
of key personnel, operational controls, lines of authority, necessary staffing, and customer
service.” AR Tab 39 at 904. In addition, because the Solicitation specified that it required a
“comprehensive document” outlining management of operations, the Evaluation Notice did not
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improperly seek to evaluate proposals via unstated evaluation criteria. As such, USTRANSCOM
did not violate FAR § 15.303(b)(4).
With respect to Evaluation Notice LAQ-0006, the Solicitation required cargo, liability,
pollution, and environmental insurance. AR Tab 21 at 252. Although the Solicitation did not
require a written narrative addressing these insurance requirements, the Solicitation did provide
that proposals should “include sufficient detail for effective evaluation and for substantiating the
validity of stated claims.” AR Tab 21 at 239. LaQuay’s October 19, 2015 Proposal did not address
insurance. AR Tab 32. Accordingly, it was not arbitrary or capricious for USTRANSCOM to
issue Evaluation Notice LAQ-0006, requiring LaQuay to demonstrate “the ability to comply with
the Cargo, Liability, Pollution, and Environmental Insurance requirements.” AR Tab 39 at 905.
In addition, because the Solicitation specified that it required offerors to have insurance, the
Evaluation Notice did not improperly seek to evaluate proposals via unstated evaluation criteria.
As such, USTRANSCOM did not violate FAR § 15.303(b)(4).
With respect to Evaluation Notice LAQ-0007, the Solicitation required offerors to be able
to provide a written Notice of Readiness documentation “immediately upon the tow’s arrival[.]”
AR Tab 21 at 327. The Solicitation also stated that proposals “shall be clear, concise, and shall
include sufficient detail for effective evaluation and for substantiating the validity of stated claims.
The proposal should not simply rephrase or restate the [G]overnment’s requirements but rather
shall provide convincing rationale to address how the offeror intends to meet these requirements.”
AR Tab 21 at 239. LaQuay’s October 19, 2015 Proposal stated that [REDACTED].” AR Tab 32
at 813. But, LaQuay’s October 19, 2015 Proposal never demonstrated how it would provide
documentation. AR Tab 32. Accordingly, it was not arbitrary or capricious for USTRANSCOM
to issue Evaluation Notice LAQ-0007, requiring LaQuay “to adequately demonstrate how it
intends to comply with the written Notice of Readiness.” AR Tab 39 at 906. In addition, because
the Solicitation specified that it required offerors to be able to provide a written Notice of
Readiness documentation, the Evaluation Notice did not improperly seek to evaluate proposals via
unstated evaluation criteria. As such, USTRANSCOM did not violate FAR § 15.303(b)(4).
With respect to LaQuay’s contention that the October 19, 2015 Proposal and the January
5, 2016 Proposal were identical, and therefore USTRANSCOM’s initial determination was
arbitrary or capricious, the Administrative Record shows that the Source Selection Evaluation
Board relied upon LaQuay’s responses to the Evaluation Notices in determining that the January
5, 2016 Proposal was Acceptable. AR Tab 120 at 2705 (“T.W. LaQuay’s response to the ENs
[Evaluation Notices], along with associated proposal revisions, were determined to be
[A]cceptable.”). As such, USTRANSCOM “provided a coherent and reasonable explanation” for
differentiating between LaQuay’s October 19, 2015 Proposal and January 5, 2016 Proposal.
IV. CONCLUSION.
For reasons discussed herein, Plaintiff’s May 3, 2016 Motion For Permanent Injunction
and May 31, 2016 Motion For Judgment On The Administrative Record are denied. The
Government’s June 24, 2016 and Defendant-Intervenor’s June 25, 2016 Cross-Motions For
Judgment On The Administrative Record are granted. All other pending motions are denied as
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moot. Accordingly, the Clerk is directed to enter judgment on behalf of the Government and
Defendant-Intervenor.
No costs.
IT IS SO ORDERED.
s/ Susan G. Braden
SUSAN G. BRADEN
Judge
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