Csc Government Solutions LLC v. United States

In the United States Court of Federal Claims

No. 16-1000C

(Filed Under Seal: November 22, 2016)

(Reissued: December 2, 2016)

)

CSC GOVERNMENT SOLUTIONS ) Post-award bid protest of an IT contract;

LLC, ) cost-realism analysis; application of FAR

) § 52.222-46 to realism of proposed

Plaintiff, ) salaries with regard to program continuity,

) retention of professional employees, and

v. ) “uninterrupted high-quality work;”

) consistency of the agency’s cost-price and

UNITED STATES, ) technical evaluations; past performance

) evaluation; discussions

Defendant, )

and )

)

HP ENTERPRISE SERVICES LLC, )

)

Defendant-Intervenor. )

)

)

Kevin P. Mullen and J. Alex Ward, Morrison & Foerster LLP, Washington, D.C. for

plaintiff. With them on the briefs and at the hearing was Sandeep N. Nandivada, Morrison &

Foerster LLP, Washington, D.C. Also with them on the briefs were Catherine L. Chapple and

Richard J. Vacura, Morrison & Foerster LLP, Washington, D.C.

Peter A. Gwynne, Trial Attorney, Commercial Litigation Branch, Civil Division, United

States Department of Justice, Washington, D.C. for defendant. With him on the briefs and at the

hearing were Michael G. McCormack, Senior Trial Attorney, and Matthew J. Ruane, Attorney

Advisor, United States Air Force. Also with him on the briefs were Benjamin C. Mizer,

Principal Deputy Assistant Attorney General, Civil Division, Robert E. Kirschman, Jr., Director,

and Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Civil Division,

United States Department of Justice, Washington, D.C.

Kevin J. Maynard, Wiley Rein LLP, Washington, D.C. for defendant-intervenor. With

him on the briefs and at the hearing were Jon W. Burd, George E. Petel, Gary S. Ward, and Tara

L. Ward, Wiley Rein LLP, Washington, D.C. Also with him on the briefs was Rand L. Allen,

Wiley Rein LLP, Washington, D.C.

OPINION AND ORDER1

LETTOW, Judge.

This post-award bid protest arises from a solicitation by the United States Department of

the Air Force, United States Strategic Command (“USSTRATCOM” or “government”) for the

Information Technology Capabilities Contract II (“ITCC II”). The ITCC II contract provides for

information technology (“IT”) capabilities and services at USSTRATCOM’s current

headquarters at the Curtis E. LeMay Building in Omaha, Nebraska, as well as for transitioning IT

services at some time after the second year of the contract to USSTRATCOM’s future

headquarters at the Command and Control Facility (“C2F”), also located in Omaha. Following

several rounds of proposals and evaluations, the government awarded the ITCC II contract to HP

Enterprise Services, LLC (“HPES”) on April 18, 2016. CSC Government Solutions LLC

(“CSC”), the incumbent contractor and also an offeror on the ITCC II contract, initially protested

this award at the Government Accountability Office (“GAO”), challenging the government’s

evaluation of the offerors’ proposals and past performance and alleging that the government

conducted misleading and coercive discussions with CSC. On August 10, 2016, GAO denied

CSC’s protest on all grounds. CSC subsequently filed a bid protest in this court on August 12,

2016.

CSC now seeks an injunction against the award to HPES, reasserting its argument that

the government engaged in misleading, unequal, and coercive discussions, and further arguing

that USSTRATCOM failed to properly evaluate the proposals of HPES and another offeror,

[***], particularly in its cost realism analyses and evaluations of the offerors’ phase-in plans for

staffing and retention. Pending before the court are the parties’ cross-motions for judgment on

the administrative record. A hearing was held on October 26, 2016.

For the reasons stated, the court has concluded that the plaintiff’s motion should be

denied and the government’s and defendant-intervenor’s motions should be granted.

FACTS2

A. USSTRATCOM: Background and IT Needs

1

Because this opinion and order might have contained confidential or proprietary

information within the meaning of Rule 26(c)(1)(G) of the Rules of the United States Court of

Federal Claims (“RCFC”) and the protective order entered in this case, it was initially filed under

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

confidential or proprietary information. The resulting redactions are shown by brackets

enclosing asterisks, e.g., “[***].”

2

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

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

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

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

2

USSTRATCOM is “one of nine unified combatant commands in the Department of

Defense.” Def.’s Resp. in Opp’n to Pl.’s Mot. for Judgment on the Administrative Record and

Def.’s Cross-Mot. for Judgment on the Administrative Record (“Def.’s Cross-Mot.”) at 4, ECF

No. 48. It “conduct[s] global operations” for and with the Department of Defense and

government agencies to “deter and detect strategic attacks against the U.S. and its allies, and be

prepared to defend the nation as directed.” AR 4-689.3 The headquarters of USSTRATCOM is

located at the Curtis E. LeMay Building in Omaha, Nebraska. Am. Compl. ¶ 6. A new

headquarters, C2F, is under construction and is expected to be completed during the performance

of the ITCC II contract. See Am. Compl. ¶ 11; AR 5a-829.

To carry out its mission, USSTRATCOM requires “numerous information technology

(IT) systems of various classification levels.” AR 4-689. Its specific IT requirements include:

“command and control, robust nuclear and conventional planning and planning support tools,

integrated shared awareness portals, real-time web-enabled reporting vehicles, and several

collaborative voice and video capabilities spanning all levels of classification.” Id.

USSTRATCOM’s IT contractor thus provides crucial support services to the agency, including

“[o]perations [and] [m]aintenance, systems engineering, and program management.” Id. CSC is

the incumbent IT contractor for USSTRATCOM under the first ITCC contract (“ITCC I”). Am.

Compl. ¶ 6. Its specific responsibilities include: “managing desktops, servers, networks, and

related functional services; reducing the cost to USSTRATCOM of delivering desktop, server,

and network services; and facilitating IT management through the evolution of a more common

IT environment [to] enhance[e] system and product interoperability.” Am. Compl. ¶ 7.

B. The Solicitation of the ITCC II Contract

After consulting with industry professionals for over a year, see AR Tab 3; Def.’s Cross-

Mot. at 5, USSTRATCOM issued its Source Selection Plan for the ITCC II contract on June 30,

2014 and issued its Request for Proposals (“RFP”) (solicitation number FA4600-14-R-0017) on

October 1, 2014. AR Tabs 4-5.4 The solicitation contemplated the award of a single contract

with multiple contract line item (“CLIN”) types, including firm-fixed-price, cost-plus-incentive-

fee, cost-plus-fixed-fee, and no-fee cost reimbursable. AR 5a-802. The contract covers a ten-

year period, with a one-year base period and nine additional option years. AR 5a-950. The base

year includes a three-month phase-in period and a nine-month full-performance period. Id.

The ITCC II contract at issue here is a continuation of the services provided by CSC

under the ITCC I contract. Def.’s Cross-Mot. at 4. The specific objectives of the contract are to:

3

Citations to the administrative record refer to the record as filed on August 26, 2016 and

corrected on August 29, 2016 and October 3, 2016. The record is paginated sequentially and is

also divided into tabs. In citing to the administrative record, the court will first designate the tab,

followed by the page number, e.g., AR 4-689 refers to page 689, which is located in tab 4 of the

record.

4

The solicitation was amended eight times between October 17, 2014 and June 12, 2015

for reasons unrelated to the instant protest. See AR Tab 5e; see also AR 1-6 to -8.

3

1) provide high-quality IT services to USSTRATCOM.

2) provide IT capabilities that meet mission standards where appropriate, and industry

standards elsewhere.

3) provide the IT capabilities necessary for customers to perform their operational

mission.

4) reduce the cost to USSTRATCOM of delivering services.

5) permit the contractor maximum flexibility in implementing IT to satisfy cost, schedule,

and performance parameters.

6) maintain high customer satisfaction.

7) facilitate IT management through the evolution of a more common IT environment,

thereby enhancing system and product interoperability.

8) [m]aintain required IA standards.

AR 5a-804. The contractor is thus expected to continue the same types of support services

provided under the ITCC I contract, specifically “[p]rogram [m]anagement,” “IT [o]perations

and [m]aintenance,” “[e]ngineering,” and “[a]pplications [s]upport.” AR 5a-805. The contract

also contemplates undertaking and completing USSTRATCOM’s transition to its new

headquarters during the life of the contract. See AR 5a-829. The contractor is responsible for

maintaining IT services in the old facility during the transition, and continuing these services in

the new building once the transition is complete. AR 5a-804, -29.

The evaluation criteria in Section M of the RFP stated that the government would

conduct a “best value” analysis and award the contract based on an assessment of three factors:

“[t]echnical [a]pproach/[t]echnical [r]isk,” “[p]ast [p]erformance,” and “[c]ost/[p]rice.” AR 5a-

971 to -72. Past performance and technical risk were deemed to be of equal importance, and the

cost-price factor was more important than the past performance and technical-risk factors

combined. See AR 5a-971. Therefore, all offerors “found to have presented an [a]cceptable

technical approach without [h]igh [r]isk” would be considered equally, and the contract would be

awarded to the offeror with the lowest price. See id.; Am. Compl. ¶¶ 35-36. USSTRATCOM

also reserved the right to select the second-lowest-priced offer (within 5% of the lowest priced

offer) if the lowest priced offer did not present the “best value” and the second lowest offer

“present[ed] [s]ubstantial [c]onfidence and [l]ow [t]echnical [r]isk in all sub-factors.” AR 5a-

971 to -72. Additionally, the government retained discretion to select an offer which was priced

more than 5% above the lowest-priced offer if the higher-priced offer “present[ed] a remarkably

better value proposal in terms of its past performance record and/or plan for dealing with,

mitigating or eliminating program risk.” AR 5a-972.

In the RFP, the government indicated that it would potentially award the contract without

discussions with the offerors. AR 5a-971. If discussions were deemed necessary, the

government would only hold them with “those offerors determined to be in the competitive

range.” Id. The government retained discretion over whether an offeror was in the competitive

range, and could eliminate an offeror from consideration during the course of discussions even if

it was initially determined to be in the competitive range. Id. Discussions would “include

issuance of evaluation notices,” and each offeror remaining in consideration at the conclusion of

discussions would have the “opportunity to submit a Final Proposal Revision (FPR).” Id.

4

1. The technical-approach/technical-risk evaluation factor.

The RFP outlined five sub-factors within the technical-approach/technical-risk evaluation

factor: (1) Technical, (2) Management Approach, (3) IT Systems Optional Tasks, (4)

Engineering, and (5) Small Business Participation Plan. AR 5a-972. The Technical sub-factor

involved an assessment of the offerors’ “capability to perform IT Operations and Maintenance in

a large multi-classified operational environment,” specifically in the areas of: (1) “service

center,” (2) “end user provisioning,” (3) “network services,” (4) “servers,” and (5) “enterprise

database services.” AR 5a-957. The Management Approach sub-factor involved the evaluation

of three aspects of the offerors’ program management approach: (1) the “phase-in” plan, (2)

“staffing, security clearances, certifications and skillsets,” and (3) day-to-day program

management. AR 5a-957 to -58. The IT Systems Optional Tasks sub-factor primarily would

assess the offerors’ plans for transitioning USSTRATCOM’s IT capabilities to the new C2F

headquarters. AR 5a-958 to -59. This sub-factor also involved the evaluation of the operation

and maintenance of USSTRATCOM’s command and control phone-switching system, as well as

the potential transition of unclassified LAN services, “[u]nclassified and/or [s]ecret LAN

SharePoint hosting services,” and classified e-mail services to a provider other than the ITCC II

contractor. AR 5a-959. The Engineering sub-factor would assess the “internal processes for

engineering requirements and project management, technical solution development, testing and

implementation/integration.” Id. Finally, the Small Business Participation Plan sub-factor

would evaluate “the offeror’s identification of and commitment to small business in contract

performance on the ITCC II program” in accord with the government’s goals for small business

participation in subcontracts. AR 5a-959 to -60.

Each sub-factor would receive a rating for both technical approach and technical risk.

AR 5a-972. The technical-approach rating would “reflect[] the degree to which the proposed

approach meets or does not meet the minimum requirement” for the sub-factor. Id. Technical

approach would be rated as either “Acceptable” or “Unacceptable,” and any proposal that

received an “Unacceptable” rating for one or more sub-factors would receive an overall

“Unacceptable” rating for the technical-approach evaluation factor. Id. The technical-risk rating

would assess the weaknesses of each offeror’s proposal for each sub-factor, considering the

“potential for disruption of schedule, increased costs, degradation of performance, the need for

increased [g]overnment oversight, or the likelihood of unsuccessful contract performance.” AR

5a-973. Each sub-factor would receive a technical-risk rating of Low (the most favorable

rating), Moderate, or High. Id. Any proposal with a technical-risk rating of High for any sub-

factor would be deemed ineligible to be awarded the ITCC II contract. Id.

2. The past performance evaluation factor.

The past performance evaluation factor would assess “related contracts from each

offeror” to make an “overall assessment of the [g]overnment’s confidence that the offeror will

successfully perform this contract.” AR 5a-974. Each offeror had to submit at least three

performance references with its proposal, but the government would “not evaluate more than six

offeror provided references.” Id. The government also reserved the right to obtain and assess

offeror past performance data from other sources, such as the Past Performance Information

5

Retrieval System (“PPIRS”), other government databases, interviews with former program

managers and contracting officers, and commercial sources. Id.

In evaluating this factor, the government would first determine whether each contract

submitted as a past performance reference met recency requirements, specifically that it was

performed on or after June 1, 2011 and that the performance was at least one year in length as of

the submission of the reference to USSTRATCOM. AR 5a-974. The government would next

assess the relevancy of each reference “as it relates to the scope, magnitude, and complexity of

efforts described in the ITCC II solicitation.” Id. The relevancy of each reference would be

assessed under the following four sub-factors, which mirror the technical-approach/technical-risk

sub-factors: (1) Technical, (2) Management Approach, (3) Engineering, and (4) Small Business

Participation. AR 5a-974 to -75. Each sub-factor, as well as the reference as a whole, would

receive one of the following relevancy ratings: Very Relevant, Relevant, Somewhat Relevant, or

Not Relevant. AR 5a-976. Finally, each sub-factor and the reference as a whole would receive a

qualitative performance rating of Exceptional, Very Good, Satisfactory, Marginal,

Unsatisfactory, or Not Applicable. AR 5a-976 to -77. Upon integrating the analyses for

recency, relevancy, and performance, the government would assign each offeror one of five

confidence assessments for the past performance factor: Substantial Confidence, Satisfactory

Confidence, Unknown Confidence (Neutral), Limited Confidence, or No Confidence. AR 5a-

977.

3. The cost-price evaluation factor.

The RFP stated that the cost-price evaluation factor would be “assessed for fairness and

reasonableness.” AR 5a-978. The reasonableness assessment would determine whether the

offeror’s price was “a price that a prudent and competent buyer would be willing to pay, given

data on competition, supply and demand, and general economic conditions.” Id. The price

evaluation would also include an assessment of the offerors’ plans for compensating professional

employees in accord with 48 C.F.R. [Federal Acquisition Regulation (“FAR”)] § 52.222-46. AR

5a-978.

For CLIN X101 (Engineering), the CLIN primarily at issue in this case and the only cost-

reimbursable CLIN in the ITCC II contract, the government would evaluate the proposals for

both cost realism and cost reasonableness.5 AR 5a-963, -78. Cost realism would be assessed via

three factors: (1) that the costs “are realistic for the work to be performed,” (2) that such costs

“reflect a clear understanding of the requirements,” and (3) that the costs “are consistent with the

various elements of the offeror’s technical proposal.” AR 5a-978. Upon conducting this

analysis, the government reserved the right to make adjustments to the offerors’ proposed costs

before and after they submitted their final proposals. Id.

5

CLIN X101 makes up about 7% of the projected costs of the ITCC II contract. Hr’g Tr.

at 69:13-14 (Oct. 26, 2016) (The date will not be repeated in further citations to the transcript of

the hearing.).

6

Finally, the RFP required offerors to submit a Total Evaluated Price (“TEP”) for all

CLINs that included the base period and all option years. AR 5a-978. The TEP was evaluated

for fairness and reasonableness. Id.

C. USSTRATCOM’s Evaluation of Proposals and Award Decision

USSTRATCOM received proposals from five offerors: CSC, HPES, [***],[***], and

[***]. AR 25-41668. [***] was eliminated from the competitive range prior to discussions. See

AR 25-41670; 42-45627.

After [***] was eliminated from consideration, discussions opened with the four

remaining offerors on June 12, 2015. AR 27-42016. USSTRATCOM conducted three rounds of

discussions with CSC, as well as a third round addendum. Am. Compl. ¶ 41. In the first round,

the government issued an evaluation notice (“EN”) to CSC stating that its “[p]roposed labor mix

for Engineering, CLIN X101 ha[d] been evaluated as unrealistically low” because CSC had

estimated that the labor for this CLIN could be reduced from 121,000 historical hours to [***]

hours, and that CSC could reduce the [***] hour figure to [***] hours through various

efficiencies. AR 10a-10233 to -34.6 The EN requested that CSC provide a detailed explanation

of these efficiencies that would justify the “substantial difference” between the proposal and the

historical engineering labor mix. AR 10a-10233. During the second round of discussions, CSC

proposed various efficiencies to show why [***] hours was a realistic labor estimate for CLIN

X101, including [***]. AR 10b-16117 to -18. USSTRATCOM rejected these proposals and

left the EN open, stating that CSC did not “demonstrate any unique and innovative approaches,

[did not] provide an adequate explanation regarding the unrealistically low staffing, and fail[ed]

to explain how the reasons provided w[ould] result in a manning level of [***] hours.” AR 10b-

16119. In the third round of discussions, CSC adjusted its labor mix totals, starting with about

[***] hours for the base year, dropping to about [***] hours in the first option year, and

ultimately proposing [***] to [***] hours for each of the following option years. AR 10c-21326

to -29. CSC justified these reductions based on five categories of proposed efficiencies: [***].

AR 10c-21326. USSTRATCOM largely rejected these proposed efficiencies as well. See AR

10c-21329 to -30.

HPES also engaged in discussions with USSTRATCOM regarding its labor mix for

CLIN X101. Similar to its first EN to CSC, USSTRATCOM issued an EN to HPES stating that

its proposed labor mix for CLIN X101 was “unrealistically low” because it had proposed staffing

levels at [***]% of historical hours. AR 19a-38350 to -51. HPES explained in its response that

the other [***]% of hours were accounted for under other CLINs in the proposal. AR 19a-

38349. As with CSC, USSTRATCOM rejected HPES’s justification and left the EN open. AR

19a-38350. In the second round of discussions, HPES revised its CLIN X101 estimates to reflect

[***]% of historical hours ([***] hours, or [***] FTEs) for the base year, with staffing reduced

in the option years to [***] FTEs for years 2 through 4 and to [***] FTEs for years 5 through 10.

AR 19b-39248 to -49. HPES explained that these reductions in hours would be accomplished by

clearing out a backlog of engineering projects during the first year of the contract, moving to a

USSTRATCOM considered that a full-time equivalent (“FTE”) employee worked

6

approximately 1,900 hours per year. See AR 10a-10234.

7

and increased its proposed costs by $[***] million. AR 28-42120, -242.7 USSTRATCOM

deemed this price to be “fair and reasonable” in its cost-realism analysis of the CSC FPR. AR

27-42024. The FPR cost/price figures for both HPES and[***] were lower than their pre-FPR

figures. AR 28-42242. HPES’s price was deemed “fair and reasonable,” while a $[***]

probable cost adjustment upward for CLIN X101 was applied to [***]’s FPR as a result of the

cost-realism analysis. AR 27-42024 to -25.

The SSEB and Contracting Officer briefed the Source Selection Authority (“SSA”) on

their analyses of the offerors’ Final Proposal Revisions on April 13, 2016. AR 30-42979; see

also AR Tabs 27-29. The SSA determined that HPES’s proposal represented the best value as

defined in the RFP. AR 30-42974. USSTRATCOM awarded the ITCC II contract to HPES on

that basis. AR 30-42979.

D. CSC’s GAO Protect

After being notified by USSTRATCOM that HPES was being awarded the ITCC II

contract, see AR Tab 31, CSC timely filed a protest of the award decision at GAO on May 2,

2016. AR Tab 2. On August 10, 2016, GAO denied CSC’s protest. AR 54-45924. In its

decision, GAO determined that USSTRATCOM’s discussions with CSC were not misleading,

unequal, or coercive, and that USSTRATCOM’s evaluation of CSC’s proposal was reasonable.

AR 54-45928 to -35. CSC was found not to have been misled into raising its proposed costs

through its discussions with USSTRATCOM because the record showed that “the price

evaluators had reasonable concerns regarding the staffing, hours, and cost proposed in CLIN

X101.” AR 54-45933. GAO determined that CSC’s decision to adjust its proposed staffing

levels and costs for CLIN X101 “reflected the exercise of the firm’s own business judgment and

not improper conduct by the agency.” AR 54-45933 to -34. Furthermore, GAO also concluded

that the discussions were not unequal among the offerors because they were properly tailored to

each offeror’s specific proposed approach. AR 54-45935.

E. CSC’s Protest in this Court

On August 12, 2016, two days after GAO issued its decision, CSC filed its protest in this

court. See Compl. In its complaint, CSC asserted five counts regarding the ITCC II

procurement: (1) “the agency engaged in misleading, unequal, and coercive discussions,” (2)

“the agency’s cost[-]realism analysis was inadequate,” (3) “the agency’s evaluation of HPES’s

transition and staffing approach was unreasonable,” (4) “the agency’s past performance

evaluation ignored recent and relevant negative past performance information regarding HPES’s

ability to perform the ITCC II contract,” and (5) “the best value decision was arbitrary and

capricious.” Compl. ¶¶ 84-124. Contemporaneously with its complaint, CSC submitted an

application for a temporary restraining order and a motion for preliminary injunction. Pl.’s Mot.

for TRO and Prelim. Inj., ECF No. 5. The court granted HPES’s motion to intervene on August

15, 2016. Order of Aug. 15, 2016, ECF No. 14. During a hearing on August 16, 2016, “the

7

CSC’s final proposed cost was still $[***] million less than the most probable cost

calculated by USSTRATCOM in its pre-FPR evaluation of CSC’s proposal. Compare AR 26-

41728, with AR 28-42242.

10

parties represented that the government has agreed to voluntarily stay performance on the

contract at issue until at least November 23, 2016.” Order of Aug. 16, 2016, ECF No. 30. The

court therefore denied the application for a temporary restraining order as moot and consolidated

the motion for preliminary injunction with the proceedings on the merits. Id.

CSC filed an amended complaint on August 23, 2016 to remove its request for immediate

injunctive relief and to add a new count alleging that USSTRATCOM’s analysis of the offerors’

proposals was deficient under FAR § 52.222-46. See Mot. for Leave to File an Am. Compl.,

ECF No. 36. Pursuant to the court’s scheduling order, the government filed the administrative

record on August 26, 2016, ECF No. 40.8 The parties’ cross-motions for judgment on the

administrative record have been submitted and fully briefed and were addressed at a hearing on

October 26, 2016.

JURISDICTION

Pursuant to the Tucker Act, this court 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 a proposed procurement.” 28

U.S.C. § 1491(b)(1), added by the Administrative Dispute Resolution Act, Pub. L. No. 104-

320, § 12, 110 Stat. 3870, 3874 (Oct. 19, 1996); see also Systems Application & Techs., Inc. v.

United States, 691 F.3d 1374, 1380-81 (Fed. Cir. 2012). To be an “interested party” under the

Tucker Act, the protestor must show that “(1) it was an actual or prospective bidder or offeror,

and (2) it had a direct economic interest in the procurement or proposed procurement.”

Distributed Solutions, Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir. 2008). To prove

direct economic interest, the offeror must show that it had a “substantial chance” of receiving the

contract but for the government’s alleged errors in the procurement process, i.e., that it was

prejudiced by such errors. Information Tech. & Applications Corp. v. United States, 316 F.3d

1312, 1319 (Fed. Cir. 2003).

There is no dispute that CSC was an actual offeror for the ITCC II contract. Furthermore,

although CSC was not next in line for the contract behind HPES, it was still within the

competitive range of a winning bid. See Science and Mgmt. Res., Inc. v. United States, 117 Fed

Cl. 54, 62 (2014) (“[A] bidder need not be next in line for the consideration of an award in order

to possess standing; the substantial chance requirement is met where, but for the government’s

alleged error, the protestor would have been within the zone of active consideration.”) (internal

quotation marks and citations omitted). HPES, [***], and CSC all had the same ratings for

technical approach/technical risk and past performance, and CSC’s final cost-price proposal was

$[***] million greater than HPES’s proposal and $[***] million greater than [***]’s proposal,

which translates to [***]% and [***]% differences in price, respectively. See AR 30-42977.

Because CSC’s bid was quite close to the winning and second-place bids, it was within the

competitive range. CSC has therefore demonstrated jurisdictional prejudice and has standing to

bring this suit. Compare Information Tech. & Applications, 316 F.3d at 1319 (discussing

8

The government filed corrected versions of the administrative record on August 29,

2016, ECF No. 41, and October 3, 2016, ECF No. 51.

11

jurisdictional prejudice), with Bannum, 404 F.3d at 1356-57 (addressing merits prejudice

pursuant to the standards of 5 U.S.C. § 706, which sets out a “rule of prejudicial error”). See

Digitalis Educ. Solutions Inc. v. United States, 97 Fed. Cl. 89, 93 (2011) (“A protestor must

demonstrate prejudice twice: first to establish standing and then again to prevail upon the

merits.”) (citations omitted), aff’d, 664 F.3d 1380 (Fed. Cir. 2012); National Air Cargo Grp.,

Inc. v. United States, 127 Fed. Cl. 707, 716 (2016) (same).

STANDARDS FOR DECISION

The Administrative Procedure Act (“APA”), specifically 5 U.S.C. § 706, governs the

court’s review of an agency’s contract award. 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.”). A court may set aside an agency decision that was

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2)(A). The “arbitrary and capricious” standard is “highly deferential,” see Advanced Data

Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000), and the court may not

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

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

(1971), abrogated in part by Califano v. Sanders, 430 U.S. 99, 105 (1977)), recons. denied, 60

Fed. Cl. 251 (2004).

Notwithstanding this deferential standard, the court may set aside a procurement action if

“(1) the procurement official’s decision lacked a rational basis; or (2) the procurement procedure

involved a violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi

v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001) (citations omitted). The “agency must

examine the relevant data and articulate a satisfactory explanation for its action including a

‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n

v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v.

United States, 371 U.S. 156, 168 (1962)). An agency’s decision lacks a rational basis, and is

therefore 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.” Alabama Aircraft Indus., Inc.-Birmingham v.

United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting State Farm, 463 U.S. at 43).

ANALYSIS

A. Cost-Price Analysis

CSC advances three primary arguments regarding USSTRATCOM’s evaluation of the

cost-price factor: (1) that the government failed to properly conduct a cost-realism analysis for

CLIN X101 of HPES’s and [***]’s proposals, (2) that the government did not perform the

compensation analysis required by FAR § 52.222-46, and (3) that the cost-price evaluation was

inconsistent with the technical evaluation of CSC’s proposal regarding CLIN X101. See Mem.

In Support of Pl.’s Mot. for Judgment on the Administrative Record (“Pl.’s Mot.”) at 8-25, ECF

No. 44-1.

12

1. Cost-realism analysis of CLIN X101.

CSC argues that USSTRATCOM made two material errors in the cost-realism analysis of

its competitors’ proposals for CLIN X101. First, CSC asserts that the government failed to

assess the option year costs for CLIN X101 in the other offerors’ proposals, instead focusing

only on the base year numbers. Pl.’s Mot. at 8. Second, CSC argues that USSTRATCOM did

not “evaluate the cost realism of the offerors’ direct labor rates.” Id.

In applying the arbitrary and capricious standard, the court has held that “cost[-]realism

determinations are within an agency’s ‘sound discretion and expertise,’ [and] the [c]ourt will not

overturn a cost[-]realism determination unless the plaintiff demonstrates the absence of a rational

basis for the agency’s decision.” A-T Solutions, Inc. v. United States, 122 Fed. Cl. 170, 180

(2015) (quoting CTA Inc. v. United States, 44 Fed. Cl. 684, 693 (1999)). The cost-realism

analysis “need not have been performed with ‘impeccable rigor,’” but it “must reflect that the

agency considered the information available and did not make ‘irrational assumptions or critical

miscalculations.’” Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272, 286 (2007) (quoting

OMV Med., Inc. v. United States, 219 F.3d 1337, 1344 (Fed. Cir. 2000)). In a best value

procurement such as this one, the contracting officer inherently exercises significant discretion.

See Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004).

Regarding the assessment of option year costs, CSC argues that the government did not

account for HPES’s reduced option year staffing when it closed the pertinent EN and accepted

the company’s proposal for CLIN X101 as realistic. See Pl.’s Mot. at 8-10. In response to the

evaluator’s assessment that HPES’s initial cost proposals were too low, HPES adjusted its

staffing approach to [***]% of historical hours, providing for [***] FTEs during the base period

and reducing staffing levels in the option years to [***] FTEs in option years 1 through 3 and to

[***] FTEs for the rest of the contract. AR 19b-39248 to -49. USSTRATCOM accepted this

proposal, stating:

The contractor increased the baseline engineering tasks to [***]% of historical hours and

states the remaining hours are covered through expansion tasking. The [***]% is based

on work done at other COCOM[, i.e., Combat Commands,] similar to STRATCOM size.

The contractor also assigns staff with specific skillsets to the appropriate WBS[, i.e.,

Work Breakdown Structure,] elements. There are no entry level Engineers and a good

mix of skill levels.

AR 19b-39249. CSC argues that this EN assessment indicates that USSTRATCOM evaluators

only considered the base period staffing and failed to evaluate the cost realism of the staff

reductions in the option period. Pl.’s Mot. at 10. Furthermore, CSC asserts that if the

government had properly performed the cost-realism analysis, it would have adjusted the option

year periods to reflect [***]% of historical hours, which would result in a probable cost

adjustment of $[***] (placing it at a higher cost than CSC’s proposal). Id. at 11 & Attach. Aff.

13

of Stephen J. Kiraly ¶ 16(d) (“Kiraly Aff.”), ECF No. 44-2.9 CSC makes similar arguments

regarding USSTRATCOM’s evaluation of [***]’s staffing and cost for CLIN X101 in the option

years.10

Contrary to CSC’s assertions, the record indicates that USSTRATCOM considered all

option years of HPES’s proposal in its cost-realism analysis. The final Proposal Analysis Report

states that the price analysis of all CLINs included the base period and all option years. AR 29-

42663. This is supported by USSTRATCOM’s calculations of engineering staffing levels in its

final cost evaluation of HPES’s proposal. See AR Tabs 23 and 44. Furthermore, the proposed

cost of CLIN X101 “was determined realistic and reasonable in accordance with the stated

methodology in M.3.3.2 [of the RFP].” AR 29-42663. These recitations and data adequately

indicate that USSTRATCOM considered the option periods in CLIN X101 in its cost-realism

analysis of HPES’s proposal, and thus had a rational basis for its realism findings.11 The

alternative calculations presented by CSC do not show that USSTRATCOM’s findings were

irrational; rather, they reflect disagreement with the evaluators’ assessment of the “unique

methods of performance” in the offerors’ proposals. See FAR § 15.404-1(d)(1).

Secondly, CSC argues that USSTRATCOM failed to evaluate the realism of the offerors’

proposed direct labor rates. CSC asserts that the government only compared the rates proposed

with rates on file with the Defense Contract Audit Agency (“DCAA”), and that neither the

government nor DCAA analyzed whether the proposed rates were actually realistic. Pl.’s Mot. at

12. USSTRATCOM requested field pricing assistance from DCAA for its assessment of direct

labor rates, and DCAA’s results “w[ere] relied upon as the primary form of cost analysis for

CLIN X101.” AR 29-42653. DCAA could not verify HPES’s proposed rates because they were

9

Pending before the court is the government’s motion to strike the Kiraly Affidavit, ECF

No. 49. The affidavit was filed as an exhibit to CSC’s motion for judgment on the administrative

record and evaluates USSTRATCOM’s cost-price assessment of HPES’s proposal. See

generally Kiraly Aff. The motion is granted in part and denied in part. The court will consider

Mr. Kiraly’s affidavit as part of the record in this case related to prejudice but not as an addition

or supplement to the administrative record.

10

CSC contends that “[t]he record is likewise devoid of any evidence that

[USSTRATCOM] conducted any meaningful analysis of the realism of [***]’s staffing and

associated cost for CLIN X101 in the option years.” Pl.’s Mot. at 10. Mr. Kiraly calculated that

if USSTRATCOM had adjusted [***]’s proposed costs in the option years to reflect the same

staffing levels proposed in the base period, it would have applied a probable cost upward

adjustment of $[***]. Kiraly Aff. ¶ 23.

11

The record also reflects that USSTRATCOM considered all years of [***]’s proposal in

its cost-realism analysis. See AR 89b-51342 (explaining that [***]’s proposed CLIN X101

staffing approach was realistic because, among other things, it included an “average of [***]

FTE - [***] FTE” over the contract period); AR 29-42801 to -02 (“The TEP is inclusive of all

CLINs for the base period (including the phase-in period), all option periods, and the 6-month

extension period . . . [and] CLIN X101 was determined realistic and reasonable in accordance

with the stated methodology in M.3.3.2.”).

14

based on the Economic Research Institute’s Salary Assessor Tool rather than the Forward

Pricing Rate Proposal rates on file with DCAA. See AR 23-41253, -56.12 CSC asserts that the

government did not perform any further cost-realism analysis of HPES’s direct labor rates, and

that this failure led it to overlook that HPES’s rates were “consistently and significantly lower”

than the rates paid by CSC as the incumbent contractor. Pl.’s Mot. at 13-14. Because HPES

“plan[ned] to rely extensively on incumbent personnel to perform the ITCC II [c]ontract,” CSC

argues that HPES’s proposed labor rates were unrealistic to actually retain incumbent personnel.

Id. at 14. According to Mr. Kiraly, had USSTRATCOM properly subjected HPES’s direct labor

rates to a cost-realism analysis, it would have made a proposed cost adjustment to CLIN X101 of

[***]. Kiraly Aff. ¶ 30.13

CSC incorrectly assumes that USSTRATCOM did not perform any cost-realism analysis

of the offerors’ direct labor rates. In fact, the record shows that USSTRATCOM performed an

independent cost-realism evaluation. Unless a specific methodology for conducting this analysis

has been specified, agencies have broad discretion to determine the realism of a cost proposal.

See Crowley Tech. Mgmt., Inc. v. United States, 123 Fed. Cl. 253, 260 (2015) (citing Afghan Am.

Army Servs. Corp. v. United States, 90 Fed. Cl. 341, 357-58 (2009) and Northeast Military Sales,

Inc. v. United States, 100 Fed. Cl. 103, 118 (2011)). As the government points out in its motion,

the DCAA analysis was merely the evaluation of the proposed direct rates during the assessment

of the initial proposals. Def.’s Cross-Mot. at 19. After introducing the DCAA analysis, the

Proposal Analysis Report explained that the government conducted a check against the

Economic Research Institute’s rates, leading to the conclusion that HPES’s “proposed direct

labor rates appear[ed] to accurately reflect its expected actual direct labor costs.” AR 29-42654.

Furthermore, the Proposal Analysis Report indicates that USSTRATCOM conducted a cost-

realism analysis of HPES’s Final Proposal Revision before issuing its final decision. The

USSTRATCOM evaluators again conducted a comparative analysis, in this instance between

HPES’s final proposed direct rates and the rates on file with DCAA. AR 29-42655. Although

the rates were slightly different, the government determined that both rates were “based on a

realistic and acceptable methodology” and that HPES’s rates were reasonable for performing the

work under CLIN X101. AR 29-42655 to -56. CSC has not demonstrated that this analysis was

insufficient to satisfy the cost-realism requirements of the RFP.14

12

CSC also asserts that the government’s analysis of [***]’s direct labor rates was limited

to the DCAA rate check. Pl.’s Mot. at 13. DCAA compared four similar job categories from its

data to [***]’s proposed direct labor rates, and the discrepancy between the selected rates ranged

from [***]% to [***]%. AR 29-42791. DCAA considered that the discrepancy between the

rates was explicable because the organization does not maintain “reliable and verifiable

information” for these types of labor rates and relied on a different salary survey to address the

comparison. AR 29-42794. [***] did not base its labor rates solely on either the DCAA

information or the alternative salary survey used in the DCAA analysis. Id.

13

Mr. Kiraly did not perform a similar analysis for [***]’s proposed direct labor rates.

14

CSC also has not demonstrated that USSTRATCOM’s analysis of [***]’s direct labor

rates was insufficient to satisfy the cost-realism requirements of the RFP. The Proposal Analysis

Report indicates that USSTRATCOM independently evaluated DCAA’s rate check analysis. See

15

In sum, CSC has failed to show that USSTRATCOM’s cost-realism analysis of CLIN

X101 lacked a rational basis.

2. Analysis under FAR § 52.222-46.

Next, CSC claims that USSTRATCOM failed to evaluate the offerors’ compensation

plans under FAR § 52.222-46, which was incorporated into the RFP by reference. See AR 5a-

970. This provision addresses offerors’ proposals that may reduce compensation (both salary

and fringe benefits) for incumbent employees. FAR § 52.222-46(a). It requires offerors to

“submit a total compensation plan setting forth salaries and fringe benefits proposed for the

professional employees who will work under the contract.” Id. The government then must

assess the plan “in terms of its impact upon recruiting and retention, its realism, and its

consistency with a total plan for compensation.” Id. Proposed compensation rates that are lower

than incumbent rates are “evaluated on the basis of maintaining program continuity,

uninterrupted high-quality work, and availability of required competent professional service

employees.” FAR § 52.222-46(b).

CSC contends that USSTRATCOM needed to follow a two-step analysis in assessing the

offerors’ compensation plans under FAR § 52.222-46: first, determining “whether each offeror’s

compensation package [is] generally consistent with the salaries being paid by the incumbent

contractor,” and second, determining “whether each offeror’s staffing plan is realistic, i.e.

whether it indicate[s] that the offeror under[stands] the scope of the work.” Pl.’s Mot. at 19-20

(citing OMV Med., 219 F.3d at 1343, and CRAssociates, Inc. v. United States, 95 Fed. Cl. 357,

371 (2010)). CSC argues that USSTRATCOM did not perform the first step of this analysis,

claiming that it “did not compare any offeror’s proposed compensation structure for the ITCC II

[c]ontract with the compensation paid under the incumbent contract.” Pl.’s Mot. at 20. Without

this analysis, according to CSC, USSTRATCOM failed to account for the fact that “[i]n ten of

eleven CLIN X101 labor categories, HPES proposed salaries that are anywhere from[***]% to

[***]% . . . lower than incumbent salaries.” Id. at 21 (citing Kiraly Aff. ¶¶ 48-49). CSC thus

argues that the government “was in no position to determine whether HPES or [***] had the

ability ‘to provide uninterrupted, high quality work,’ to recruit and retain professional

employees, and to ‘encourage continuity of work force,’” or whether their “proposed

compensation was realistic.” Id. at 24 (citing AR 29-42614 to -15, -750).

As an initial matter, CSC’s reliance on OMV is overstated. That decision does not lay out

a mandatory two-prong framework for all analyses to be conducted under FAR § 52.222-46.

AR 29-42794 (“The Cost Team reviewed each of the prime labor categories proposed by [***]

under CPIF CLIN X101, and did a comparative analysis between the [***] direct labor rates and

the DCAA Rate Check rates.”). USSTRATCOM determined that the discrepancy between the

rates could be understood by the difference in rate methodologies, see supra n. 12, and therefore

“t[ook] no exception to the [d]irect [l]abor [r]ates as proposed” and determined that the rates

were “realistic and reasonable.” AR 29-42791, -93. Similar to the analysis of HPES’s proposal,

these steps demonstrate that USSTRATCOM sufficiently considered the available information to

arrive at a rational cost-realism decision for [***]’s proposed direct labor rates. CSC’s assertion

that no such analysis was performed is contrary to the record.

16

Rather, the two-step analytical method addressed in OMV was advanced by the Air Force in the

RFP for the procurement at issue in that case. See OMV Med., 219 F.3d at 1343 (“As provided

in the RFPs, there were two components to the Air Force’s review of the offerors’ compensation

packages . . . .”). The RFP here contained no such instruction. Therefore, USSTRATCOM was

obliged to follow the requirements of FAR § 52.222-46 itself, not also additional criteria set out

in the RFP. According to the Federal Circuit in OMV, FAR § 52.222-46 does “not require the

preparation of minimum acceptable salary levels” and “nothing prohibit[s] the [government]

from awarding the contract to an offeror with salary levels lower than the minimum salary

levels” derived from incumbent rates. Id. at 1344. OMV thus does not superimpose a

requirement on FAR § 52.222-46 to compare incumbent salary rates with proposed rates.

Rather, based on the text of the regulation, the procuring agency must conduct a rational analysis

of the realism of the offerors’ proposed salaries with regard to program continuity, retention, and

“uninterrupted high-quality work.” Id. at 1339.15

USSTRATCOM satisfied the requirements of FAR § 52.222-46, as reflected in the

administrative record. In its final cost-price analysis of HPES’s proposal, USSTRATCOM

explained that the proposal satisfies FAR § 52.222-46 wholly apart from the overall cost-price

evaluation. The Proposal Analysis Report states:

HP’s Compensation Plan for Professional Employees was assessed in accordance with

FAR [§] 52.222-46 and found realistic, as the Plan reflects a sound management

approach and the ability to provide uninterrupted, high[-]quality work. No negative

impact to recruiting and retention of professional employees is expected, as HP offers its

employees a variety of benefits that encourage continuity of work force. These benefits

include a total rewards philosophy, including base pay, variable pay (pay for results),

rewards and recognition, a retirement plan, health and insurance benefits, and paid time

off.

AR 29-42614 to -15. CSC asserts that this analysis does not account for the fact that HPES’s

salary rates are lower than CSC’s incumbent rates. However, USSTRATCOM indicates that

HPES’s extensive offering of fringe benefits satisfies the requirements of FAR § 52.222-46 for

recruiting, retention, and continuity of high-quality work. Unlike in CRAssociates, where the

administrative record showed “no indication whatsoever that anyone at the [agency] focused

upon the requirements of this professional services clause during the evaluation process,” 90

15

CSC also cites the court’s decision in CRAssociates to support its argument that FAR §

52.222-46 requires a comparison between incumbent salaries and the offerors’ proposed salary

rates. See CRAssociates, 95 Fed. Cl. at 370-71 (applying OMV’s two-step test to a procurement

that did not mandate those particular criteria in the RFP). In the context of this case, the court

does not find the reasoning in CRAssociates persuasive and thus does not apply it here. Unless

the RFP directs the procuring agency to perform its analysis according to a particular process or

formula, a rational evaluator only needs to follow the general guides regarding compensation rate

evaluations as set forth in FAR § 52.222-46. Additionally, as the government notes in its brief,

the imposition of additional evaluation criteria outside the text of the FAR “would place an

unfair burden on agencies, who would then be required to perform FAR analyses with an eye to

every decision of the court.” Def.’s Cross-Mot. at 29 n. 11; see also Hr’g Tr. at 56:19-25.

17

Fed. Cl. at 372, USSTRATCOM noted specific examples from HPES’s proposal and tied them

to the requirements of FAR § 52.222-46. This explanation thus provides a sufficient basis to

conclude that USSTRATCOM’s analysis of HPES’s compensation proposal under FAR §

52.222-46 was rational and within the bounds of the government’s discretion.16

3. Consistency between USSTRATCOM’s cost-price analysis and its evaluation of

technical approach/technical risk.

CSC argues that USSTRATCOM’s cost-price analysis of its proposal was inconsistent

with the “Acceptable” rating given to its technical proposal, thus rendering the cost-price

determination irrational. The Management Approach sub-factor of the technical proposal

required an evaluation of staffing, specifically requiring offerors to “ensure adequate staffing”

during the phase-in process and the transition to the C2F building, and to “provide a staffing

approach to adequately manage the ITCC II contract with properly qualified, security cleared,

and certified personnel.” AR 5a-958. After modifying and fleshing out its proposal in response

to ENs, CSC’s Final Proposal Revision regarding this sub-factor was deemed Acceptable and

Low Risk. See AR 29-42291 to -98. CSC argues that this determination is inconsistent with

CSC’s discussions with the government regarding the cost-price factor, during which the

government considered that CSC had proposed “unrealistically low” staffing levels for CLIN

X101 that “could result in an MPC adjustment” if CSC failed to increase them. Pl.’s Mot. at 16.

The RFP stated that costs would be assessed under CLIN X101 according to the

following factors: whether they “(1) are realistic for the work to be performed, (2) reflect a clear

understanding of the requirements; and (3) are consistent with the various elements of the

offeror’s technical proposal.” AR 5a-978. CSC asserts that the government ignored the third

prong of this analysis by performing separate technical and cost-price evaluations and finding

that the staffing approach was Acceptable for the technical evaluation factor but not realistic on a

cost-price basis, thus leading to an “arbitrary and unreasonable” decision that prevented the

contract from being awarded to CSC. Pl.’s Mot. at 15-18.

16

Similarly, USSTRATCOM’s evaluation of [***]’s compensation proposal satisfied the

requirements of FAR § 52.222-46. In its assessment of [***]’s proposal in the Proposal Analysis

Report, USSTRATCOM explained:

[***] Compensation Plan for Professional Employees was assessed in accordance with

FAR [§] 52.222-46 and found realistic, as the Plan reflects a sound management

approach and the ability to provide uninterrupted, high quality work. No negative impact

to recruiting and retention of professional employees is expected, as [***] offers its

employees a competitive salary structure, a “promote-from-within” policy, and a variety

of benefits that encourage continuity of work force. These benefits include a retirement

plan, medical and dental coverage, life insurance, compensatory time off, and paid time

off.

AR 29-42750. By focusing on specific details of [***]’s proposal, including salary and fringe

benefits, to support its conclusion that the plan is realistic, USSTRATCOM’s analysis is rational

and sufficient to satisfy the requirements of FAR § 52.222-46.

18

CSC’s argument ignores the fact that its cost-price proposal was deemed realistic in

USSTRATCOM’s final analysis, and USSTRATCOM did not impose a probable cost

adjustment at that final stage. See AR 29-42404 (“The [g]overnment found each of the cost

elements to be realistic and reasonable based upon the above explanation, and no Probable Cost

Adjustment is required. CLIN X101’s pricing is hereby determined ‘realistic and reasonable.’”).

After the evaluators had assessed CSC’s proposed staffing levels to be “unrealistically low”

during the discussion phase, see, e.g., AR 10b-16116 to -17; AR 10c-21325, CSC voluntarily

adjusted its staffing levels in its Final Proposal Revision to improve the realism assessment. See

AR 12c-32411 (“CSC agrees with the [g]overnment’s assessment and most probable cost

adjustment for engineering and adjusted Volume III-Cost/Price accordingly.”).17 Ultimately, the

evaluations of CSC’s technical approach and cost-price plan were consistent because both

received the most positive rating possible in the final assessment.

Furthermore, regardless of the final assessment of the technical and cost-price factors, the

analysis of these factors during discussions was not inconsistent. The criteria for assessing

staffing levels was different under the technical and cost-price evaluation factors. The

Management Approach sub-factor of the technical assessment was evaluated based on processes,

structure, and management of staff, and offerors were explicitly told that their technical

proposals “shall not include cost/price information.” AR 5a-957 to -58. Contrastingly, the cost-

price analysis assessed the realism of the proposed costs and whether those costs accurately

reflected the approach proposed under the technical sub-factor. AR 5a-978. The factors thus

were related, but not the same. In short, although “the two ratings arguably should have a close

correlation,” they need not be identical to be rational. See Innovative Test Asset Solutions LLC v.

United States, 125 Fed. Cl. 201, 220 n. 20 (2016). USSTRATCOM’s technical evaluators could

logically find that CSC’s staffing approach was adequate, but the agency’s cost evaluators could

also conclude that CSC’s proposed cost proffered before the Final Proposal Revision was not

realistic to support that adequate staffing approach.

In sum, any differences between USSTRATCOM’s evaluation of the technical and cost-

price factors of CSC’s proposal during the final phases of the discussions were explicable,

rational, and within the government’s discretion, and the government’s final assessment

ultimately contained no such inconsistencies.

B. Technical Evaluation of Phase-In Staffing

Similar to its arguments regarding cost realism, CSC further contends that

USSTRATCOM did not have a rational basis for its findings related to the phase-in section of

the Management Approach sub-factor of the technical evaluation because it “failed to consider

whether offerors would be able to attract incumbent personnel given each offeror’s compensation

plan.” Pl.’s Mot. at 36. CSC reasserts that HPES’s proposed salaries were lower than the

incumbent rates, which created the “potential risk that HPES would not be able to hire most or

17

CSC asserts that toward the conclusion of the discussion phase, USSTRATCOM

coerced the company to make such an adjustment. The court is unpersuaded. See infra, at 25-

27.

19

all of the incumbents it proposed to retain.” Id. at 37. CSC asserts that HPES sought to retain

[***]% of incumbent personnel, an allegedly unrealistic figure when considering the proposed

salary differentials. See Am. Compl. ¶ 126; Pl.’s Mot at 38. CSC argues that USSTRATCOM

gave only cursory consideration to the salary and retention issue and baldly accepted HPES’s

proposals. Pl.’s Mot. at 36-41. CSC contends that a proper analysis would have yielded an

“Unacceptable” technical rating for the Management Approach sub-factor, which would have

disqualified HPES from consideration for the ITCC II contract. Id. at 41.18

As in its cost-realism analysis, CSC has failed to show that USSTRATCOM’s assessment

of phase-in staffing lacks a rational basis. In a bid protest, “[t]he deference afforded to an

agency’s decision must be even greater when a trial court is asked to review a technical

evaluation” because of the highly specialized, detailed, and discretionary analyses frequently

conducted by the government in that regard. L-3 Commc’ns EOTech, Inc. v. United States, 83

Fed. Cl. 643, 650 (2008) (citing E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.

1996)), appeal dismissed, 356 Fed. Appx. 390 (Fed. Cir. 2009).

For the ITCC II contract, a proposal that met “the minimum requirements of the

solicitation” under the technical evaluation sub-factor would receive an “Acceptable” rating for

that sub-factor. AR 5a-972. The phase-in plan, an element of the Management Approach sub-

factor, had three requirements: (1) “[i]mplement a phase-in process that is reasonable and

realistic for assumption of full responsibility with no interruption or degradation of service for

ITCC II requirements,” (2) “[i]dentify phase-in risks and measures to mitigate them,” and (3)

“[e]nsure adequate staffing with the appropriate security clearances, skillsets, and certifications

to ensure a successful phase-in.” AR 5a-958. CSC takes issue with USSTRATCOM’s

evaluation of the third requirement, claiming that the proposed incumbent staffing levels are not

“adequate” because the government failed to account for differences in salary levels.

First, CSC’s statement that HPES sought to retain [***]% of incumbent personnel is

incorrect. HPES sought to staff [***]% of the ITCC II contact with incumbent personnel. AR

21a-40528. Under HPES’s phase-in-plan, however, its proposal reduced the number of FTE

employees from 309 under the ITCC I contract to [***]. See AR 48-45723. To staff [***]% of

the contract with incumbent employees, HPES would have to retain [***] incumbent FTEs,

which equals only [***]% of the ITCC I personnel. Def.’s Cross-Mot. at 21.

Further, USSTRATCOM properly assessed HPES’s proposal for phase-in staffing in

light of the RFP requirements and its relatively low retention goals, and provided sufficient

reasoning to show that its assessments were rationally based. In the Proposal Analysis Report,

USSTRATCOM cites to HPES’s proposal for phase-in staffing to determine that the “plan is

well thought out and shows some experience phasing into contract support” and “clearly meets

18

CSC similarly avers that USSTRATCOM failed to assess [***]’s proposed retention of

incumbent personnel in light of [***]’s proposed reduced salaries. See Pl.’s Mot. at 41 (arguing

that USSTRATCOM “credited [***] for proposing to staff [***]% of the ITCC II contract with

incumbent personnel – calling it a ‘reasonable goal’ – even though the [government] never

evaluated whether [***]’s proposed [p]hase-[i]n plan was feasible given its proposed

compensation”).

20

the minimum requirements” of the solicitation. AR 29-42559. In that proposal, HPES detailed

how it would retain incumbent personnel and attract new employees, including the use of

dedicated recruitment websites, targeted job fairs, succession planning, and competitive and

comprehensive benefits plans. AR 21a-40583 to -88. HPES also emphasized its significant

experience in completing phase-in projects and recruiting and retaining highly qualified

personnel. See, e.g., AR 21a-40580 (“We have successfully completed more than 1,000

transitions using our Transition and Transformation Methodology (TTM), including hiring

incumbent staff and changing the contract approach.”). USSTRATCOM relied upon this

specific, detailed plan and experience to support its “Acceptable” rating of HPES’s phase-in

plan. That reliance is rational in light of the record.19

C. Past Performance Evaluation

CSC next asserts that USSTRATCOM’s “Substantial Confidence” assessment of HPES’s

past performance was arbitrary and capricious. CSC claims that the government should have

sought out and evaluated HPES’s performance on the 2014 NASA ACES contract, an IT

contract with parameters to similar to those of the ITCC II contract. See Pl.’s Mot. at 42. This

evaluation allegedly would have shown that HPES had “significant problems implementing the

ACES contract,” leading to continued difficulty throughout contract performance. Id. (citing

Paul K. Martin, National Aeronautics and Space Administration, Review of NASA’s Agency

Consolidated End-User Services Contract (IG-14-013) (Jan. 30, 2014),

https://oig.nasa.gov/audits/reports/FY14/IG-14-013.pdf.).

“In reviewing an agency’s rating of past performance, this court should focus on whether

‘the evaluation was reasonable, consistent with the stated evaluation criteria[,] and compli[ant]

with the relevant statutory and regulatory requirements.’” RISC Mgmt. Joint Venture v. United

States, 69 Fed. Cl. 624, 634 (2006) (quoting JWK Int’l Corp. v. United States, 52 Fed. Cl. 650,

659 (2002), aff’d, 56 Fed. Appx. 474 (Fed. Cir. 2003)). Agencies are given “broad discretion” in

evaluating past performance information, including the extent to which a prior contract is

considered “relevant.” Glenn Defense Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901,

910-11 (Fed. Cir. 2013) (citing PlanetSpace, Inc. v. United States, 92 Fed. Cl. 520, 539 (2010)

(“At the outset, it is important to note that what does or does not constitute ‘relevant’ past

performance falls within the [Source Selection Authority’s] considered discretion.”)).

19

Similarly, USSTRATCOM’s “Acceptable” rating for [***]’s phase-in plan is rationally

based on [***]’s detailed proposal. The government determined that “[t]he [t]echnical

[a]pproach rating [for the phase-in plan] of [A]cceptable is supported based on detailed

information in the contractor’s proposal that addressed each criteri[on] of the RFP; [p]hase-in,

staffing, security clearances, certifications, skillsets, and [p]rogram [m]anagement.” AR 29-

42689. [***] sought to staff the ITCC II contract with [***]% incumbent personnel. Id. In

[***]’s proposal, it explained how it would retain incumbent employees, such as through a

“talent engagement website,” in-person recruitment events, and career development programs, as

well as how it would attract new employees to fill the remainder of the positions. See AR 92a-

57275 to -83. This specific proposal provides a rational basis for USSTRATCOM’s

determination that [***] met the minimum requirements of the RFP for the phase-in plan.

21

It was within USSTRATCOM’s discretion to evaluate only the references provided by

HPES. According to the RFP, offerors were to submit at least three but no more than six

references of contracts they had performed since June 1, 2011. AR 5a-974. USSTRATCOM

reserved the right to seek out and assess other information regarding the offerors’ past

performance, including information from various government databases, AR 5a-974, but it was

not required to conduct such additional research. In HPES’s case, HPES submitted six

references that were deemed relevant, and USSTRATCOM located three additional contracts

that were deemed not to be relevant. AR 29-42585. USSTRATCOM conducted a detailed

evaluation of the six relevant references, see AR 29-42587 to -611, and determined that “HPES

has five Very Relevant past performance record[s] with two considered Exceptional and three

Very Good in Quality Performance, and one determined to be Relev[a]nt with Exceptional in

performance.” AR 29-42612. CSC does not dispute that this aspect of USSTRATCOM’s

evaluation was reasonable. See Def.’s Cross-Mot. at 44. According to the RFP, a Substantial

Confidence rating is warranted where “a minimum of two of the offeror-provided references . . .

[are] given both a Past Performance Relevancy Rating of either V[ery ]R[elevant] or R[elevant]

and a Performance Rating of either E[xceptional] or V[ery Good].” AR 5a-977. HPES’s past

performance review markedly exceeded the minimum requirements for the past performance

rating it received from USSTRATCOM.

Even so, CSC presses its contention, arguing that USSTRATCOM did not follow the

RFP when it searched for relevant contracts because it restricted its search to contracts that

started after June 1, 2011, rather than including all contracts that had been in the midst of

performance at that time. Pl.’s Mot. at 43. According to CSC, this resulted in the government’s

failure to consider the “highly-relevant” ACES contract. Id. Contrary to CSC’s assertions,

USSTRATCOM was not obligated to apply any particular search criteria when researching

offerors’ past performance; in fact, it was not obligated to conduct this research at all. It merely

had to ensure that the past contracts to be considered fit within the specifications of the RFP, i.e.,

that they had been performed after June 1, 2011 for at least one year.

CSC urges further that USSTRATCOM’s failure to analyze the ACES contract was

arbitrary and capricious because “an agency may not ignore prior performance information of

which it is aware.” Pl.’s Mot. at 44 (quoting BCPeabody Constr. Servs., Inc. v. United States,

112 Fed. Cl. 502, 512 (2013), appeal withdrawn, 559 Fed. Appx. 1033 (Fed. Cir. 2014)). It

argues that USSTRATCOM must have been aware of the ACES contract because HPES

referenced it in its proposal. Id.; see also Def.’s Cross-Mot. at 46. There is no indication in the

record, however, that USSTRATCOM actually was aware of HPES’s poor performance

evaluation under the ACES contract. HPES only referred to the contract fleetingly in its

proposal, see AR 21a-40527, -580, -593, -678, -731, and those references cannot be said to have

led the government to the ACES contract evaluation for use in its past performance assessment.

CSC has thus failed to show that it was irrational for USSTRATCOM to issue a past

performance evaluation for HPES in the absence of considering the ACES contract.

Finally, even if USSTRATCOM had negatively evaluated the ACES contract in its past

performance assessment, it would have no effect on HPES’s Substantial Confidence rating. As

previously explained, CSC does not dispute that USSTRATCOM’s evaluation of the contracts

provided by HPES was rational. The ratings given to the six references in that evaluation

22

exceeded the RFP requirements of two Very Relevant/Relevant and Exceptional/Very Good

references. The addition of the ACES contract would not bear on those ratings, and the

Substantial Confidence rating would therefore remain rational.

In sum, USSTRATCOM had a rational basis for giving HPES a Substantial Confidence

rating for the past performance factor, and CSC has failed to show that the decision was arbitrary

and capricious.

D. USSTRATCOM’s Discussions with Offerors

Finally, CSC maintains that its discussions with USSTRATCOM were misleading,

unequal, and coercive. Generally, discussions with offerors must be “meaningful,” meaning that

they “generally lead offerors into the areas of their proposals requiring amplification or

correction, which means that discussions should be as specific as practical considerations

permit.” Advanced Data Concepts, Inc. v. United States, 43 Fed. Cl. 410, 422 (1999), aff’d, 216

F.3d 1054. And, “[a] contracting officer has broad discretion in conducting discussions” as long

as they are meaningful. DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 668

(2010) (internal quotation marks and citations omitted).

1. USSTRATCOM’s discussions were not misleading.

“Discussions are misleading when a procuring agency issues ‘incorrect, confusing or

ambiguous’ communications that misdirect an offeror attempting to revise its proposal.” CEdge

Software Consultants, LLC v. United States, 117 Fed. Cl. 419, 434-35 (2014) (citing DMS All-

Star Joint Venture, 90 Fed. Cl. at 670); see also D&S Consultants, Inc. v. United States, 101 Fed.

Cl. 23, 40-41 (2011) (“[A]n agency is not permitted to mislead an offeror ‘into responding in a

manner that does not address the agency’s concerns; or that misinforms the offeror concerning its

proposal weaknesses or deficiencies.’”) (quoting Analytical & Res. Tech., Inc. v. United States,

39 Fed. Cl. 34, 48 (1997)), aff’d, 484 Fed. Appx. 558 (Fed. Cir. 2012). Here, CSC contends that

USSTRATCOM “affirmatively misled” it into raising its CLIN X101 costs “to a degree far

greater than was necessary to be considered realistic and eligible for the ITCC II [c]ontract

award.” Pl.’s Mot. at 26. Specifically, CSC argues that USSTRATCOM did not have a rational

basis for rejecting the efficiencies it proposed to justify the reduction of engineering hours from

its proposed [***]-hour baseline to [***] hours. Id. CSC further argues that USSTRATCOM

made a “greater than necessary MPC adjustment to [CSC’s] proposed CLIN X101 engineering

costs” that caused CSC to excessively raise its costs in the Final Proposal Revision. Id.

CSC proposed the [***] hour historical baseline for CLIN X101, and proposed various

efficiencies that would reduce actual hours to [***]. AR 10a-10233; 10b-16117 to -18. By the

final round of discussions, CSC had proposed five categories of efficiencies: [***]. AR 10c-

21326. USSTRATCOM considered these proposed efficiencies in its response. It first accepted

that [***] and [***] would contribute to reducing CLIN X101 hours. AR 10c-21329 to -30. In

rejecting the other proposed efficiencies, USSTRATCOM explained that CSC had not

“demonstrate[d] any unique and innovative approaches, [had not] provide[d] an adequate

explanation regarding the unrealistically low staffing, and fail[ed] to explain how the reasons

provided w[ould] result in a manning level of [***] hours.” AR 10c-21325; see also AR 10c-

23

21329 to -30. This explanation sets out a rational basis for rejecting CSC’s proposed efficiencies

because CSC had not justified how those efficiencies would realistically reduce engineering

hours for CLIN X101. CSC could not have been misled by these specific grounds for rejecting a

portion of its proposal.

CSC also claims that USSTRATCOM’s reliance on [***] hours as the baseline estimate

for CLIN X101 engineering hours prevented the government from considering any of its

proposed efficiencies. Pl.’s Mot. at 27. This argument lacks merit. First, as explained supra, it

is evident that USSTRATCOM did consider all of CSC’s efficiencies, accepting a few and

finding most to be unrealistic for reducing engineering hours to [***]. Further, CSC proposed

the [***]-hour estimate, not the government. The government performed its own calculations

and determined that required staffing levels for CLIN X101 would be approximately 76,800

hours, see AR 65b-46113 (Engineering tab, cell M39), but in the context of CSC’s proposal it

accepted the [***]-hour figure, AR 10a-10233. USSTRATCOM’s problem with CSC’s

proposed reduction in hours was not with the [***]-hour estimate, but rather was with CSC’s

failure to adequately justify the further reduction in hours from [***] to [***] via efficiencies.

The agency’s approach during discussions was rational and supported by the record, and

therefore was not misleading.

USSTRATCOM’s proposed MPC adjustment to CSC’s proposal was also not

misleading. In the pre-Final Proposal Revision stage, USSTRATCOM imposed an MPC

adjustment to CSC’s CLIN X101 proposal, resulting in an MPC of $[***]. AR 28-42117. CSC

claims that this MPC adjustment was misleading because it resulted in an MPC for CSC that was

$[***] million greater than the MPC for HPES, “despite finding that HPES’s Technical proposal

was not materially different from [CSC’s] proposal.” Pl.’s Mot. at 29. As a result, CSC asserts

that it would not have raised its proposed costs in its Final Proposal Revision but for this

allegedly misleading MPC adjustment. Id. However, as previously explained, USSTRATCOM

had a rational basis for rejecting CSC’s proposed efficiencies, and issued the MPC adjustment

when CSC failed to explain fully how it would reduce CLIN X101 engineering hours in light of

those rejections. CSC does not contend that HPES had similar cost-related disputes with the

government in the pre-FPR stage, and the government was under no obligation to explain the

posture of other offerors or differences between their proposals and CSC’s offering. See

WorldTravelService v. United States, 49 Fed. Cl. 431, 439 (2001) (“[A]gencies need not discuss

every aspect of the proposal that receives less than the maximum score or identify relative

weaknesses in a proposal that is technically acceptable but presents a less desirable approach

than others.”) (citations omitted). Furthermore, CSC explicitly accepted the MPC adjustment in

its Final Proposal Revision and provides no further evidence to show that the adjustment was

incorrect or improper. See AR 12c-32411 (“CSC agrees with the [g]overnment’s assessment and

most probable cost adjustment for engineering and adjusted Volume III-Cost/Price

accordingly.”). The MPC was rationally based, and CSC accepted it as such in exercising its

own business judgment by putting forward its Final Proposal Revision, so it cannot now claim to

have been misled because it failed to win the contract. See Academy Facilities Mgmt. v. United

States, 87 Fed. Cl. 441, 458 (2009) (finding that pricing differences between offerors arising

from discussions with the government were the result of the offerors’ business decisions).

2. USSTRATCOM’s discussions were not unequal.

24

CSC further asserts that the discussions were unequal and therefore unfair. The

government is required to conduct discussions with “integrity, fairness, and openness.” FAR

§ 1.102(b)(3). This duty of fairness in discussions bars the government from engaging in

“impermissible and prejudicial conduct favoring one offeror over another.” DMS All-Star Joint

Venture, 90 Fed. Cl. at 672. However, although preferential treatment is impermissible, the

government is “not required to conduct identical discussions with each offeror.” Id. (citing

Femme Comp. Inc. v. United States, 83 Fed. Cl. 704, 735 (2008)). Rather, discussions should be

tailored to each offeror’s proposal “with the scope and extent of discussions resting squarely

within the judgment of the contracting officer.” Id. (citing WorldTravelService, 49 Fed. Cl. at

440; FAR § 15.306(d)(3)).

CSC contends that USSTRATCOM unfairly held it to a higher standard than HPES in

discussions, “painstaking[ly] review[ing]” CSC’s proposals for CLIN X101 while allowing

HPES to escape scrutiny. Pl.’s Mot. at 30-31. CSC alleges that HPES and CSC proposed

similar efficiencies to reduce engineering hours for CLIN X101, but USSTRATCOM only

approved the efficiencies in HPES’s proposal. Id. at 31-33. What CSC fails to acknowledge,

however, is that both CSC’s and HPES’s initial hourly estimates were rejected by

USSTRATCOM in the first round of discussions as unrealistically low. See AR 10a-10235; 19a-

38351. Whereas CSC stuck to its [***] hour figure throughout discussions without explaining to

USSTRATCOM‘s satisfaction how that number was realistic for CLIN X101, HPES adjusted its

base year estimates upward to [***]% of historical hours and slowly decreased those hours over

the life of the contract (while keeping staffing levels significantly above [***] hours for all

years). Compare AR 10b-16117 to -19 and AR 10c-21329 to -30 (CLIN X101 staffing

discussions with CSC), with AR 19b-39248 to -49 (CLIN X101 staffing discussions with HPES).

USSTRATCOM only accepted HPES’s proposed efficiencies and its CLIN X101 proposal as

realistic when HPES made that significant adjustment to its estimates. AR 19b-39249. It was

not unequal for USSTRATCOM to accept HPES’s proposal and reject CSC’s when CSC failed

to account for the significant difference in engineering hours between the two proposals through

proposed efficiencies. USSTRATCOM’s treatment of HPES and CSC in discussions was

rational in light of the differences between these offerors’ proposals, so the court therefore

rejects CSC’s contention that discussions were unfair and unequal.

3. USSTRATCOM’s discussions were not coercive.

Finally, CSC asserts that USSTRATCOM’s discussions coerced it into raising its

proposed costs for CLIN X101 to levels that caused it to lose the ITCC II contract. As CSC puts

it, USSTRATCOM “threatened” CSC in its FPR request with a potential adverse responsibility

determination for failing to raise its CLIN X101 costs to realistic levels. Pl.’s Mot. at 33-34. In

pertinent respect, USSTRATCOM stated:

The significant discrepancy between [CSC’s] proposed costs for CLIN X101 and the

probable cost as determined [by USSTRATCOM] raises questions as to whether [CSC’s]

proposal meets the requirements of FAR [§] 9.104-1. Solicitation paragraph M1, Basis of

Award, states that “[a]ward will be made to the offeror who is deemed responsible in

accordance with FAR Part 9 . . . ,” while FAR [§] 9.103(c) states that “[t]he award of a

25

contract to a supplier based on lowest evaluated price alone can be false economy if there

is subsequent default, late deliveries, or other unsatisfactory performance resulting in

additional contractual or administrative costs. While it is important that [g]overnment

purchases be made at the lowest price, this does not require an award to a supplier solely

because that supplier submits the lowest offer. A prospective contractor must

affirmatively demonstrate its responsibility, including, when necessary, the responsibility

of its proposed subcontractors.” Should [CSC’s] FPR require a probable cost

adjustment and include a significant discrepancy between the proposed costs and

the probable cost, this may preclude the Contracting Officer from making an

affirmative determination of responsibility. The absence of an affirmative

determination of responsibility would render [CSC’s] proposal ineligible for award.

AR 11-32043 (emphasis in original). CSC argues that in light of USSTRATCOM’s emphatic

statement, it “had no choice but to acquiesce” and raised its price to avoid an adverse

responsibility determination that could have “undermined the company’s competitive position

for the foreseeable future.” Pl.’s Mot. at 34.

Even though USSTRATCOM’s FPR request affected CSC’s strategy in responding, CSC

cannot reasonably argue that it was coerced. First, the statement could have been true –

USSTRATCOM might have issued an adverse responsibility determination under the FAR if

CSC had not raised its prices or adequately justified its drastic reduction in engineering costs.

See 48 FAR §§ 9.103, 9.104. In any event, any adjustments that CSC made in its Final Proposal

Revision after receiving USSTRATCOM’s notice were made within the company’s business

judgment. Although CSC was “free to make any adjustment to its cost-savings proposals, or

none at all, based on its assessment of the validity of the [government’s] concerns,” Innovative

Test Asset Solutions, 125 Fed. Cl. at 226, it chose to acknowledge the pre-FPR MPC adjustment

and the concerns raised in USSTRATCOM’s notice, and raised its costs for CLIN X101 in its

FPR. See AR 12c-32411 (“CSC agrees with the [g]overnment’s assessment and most probable

cost adjustment for engineering and adjusted Volume III-Cost/Price accordingly.”). There is no

evidence in the record to show that CSC was coerced into making this adjustment. Because CSC

voluntarily made this change, and did so in a way that acknowledged the government’s concerns,

the court cannot find that USSTRATCOM’s actions were in any way improper. See Academy

Facilities Mgmt., 87 Fed. Cl. at 459 (concurring with an advisory opinion by GAO that a firm’s

decision to adjust prices as a result of discussions with the agency “reflects the exercise of the

firm’s own business judgment, not improper conduct by the agency”) (quoting Academy

Facilities Mgmt., B-401094.3, Advisory Opinion, at 6 (Comp. Gen. May 21, 2009)).

In sum, CSC has failed to demonstrate that USSTRATCOM’s discussions regarding

CLIN X101 were coercive or beyond the scope of its discretion.20

20

Because this court has found that USSTRATCOM’s evaluations with regard to the

technical, past performance, and cost-price factors were not arbitrary and capricious, it need not

independently address CSC’s summarizing argument that USSTRATCOM’s best-value

determination was flawed by the alleged errors in the evaluation process. See Pl.’s Mot. at 45.

26

CONCLUSION

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

DENIED. The government’s and HPES’s cross-motions for judgment on the administrative

record are GRANTED. As a result, CSC’s motion for a preliminary injunction is also DENIED.

The government’s motion to strike the Kiraly affidavit is GRANTED IN PART and DENIED IN

PART for the reasons explained supra, at 13-14 n. 9.21 The clerk is directed to issue final

judgment in accord with this disposition.

No costs.

It is so ORDERED.

s/ Charles F. Lettow

Charles F. Lettow

Judge

21

CSC’s motion for leave to file an amended complaint, ECF No. 36, see also ECF No.

39, is GRANTED.

27