Synergy Solutions, Inc. v. United States

In the United States Court of Federal Claims

No. 17-836C

(Filed Under Seal: September 12, 2017)

(Reissued for Publication: October 12, 2017) 1

*************************************

SYNERGY SOLUTIONS, INC., *

*

Plaintiff, * Postaward Bid Protest; Judgment on the

* Administrative Record; Blue & Gold Fleet

v. * Waiver Rule; Corporate Experience; Past

* Performance; Cost Realism; Prejudice

THE UNITED STATES, *

*

Defendant. *

*************************************

Julia Diane Di Vito, Washington, DC, for plaintiff.

Eric Evan Laufgraben, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

SWEENEY, Judge

In this bid protest, plaintiff Synergy Solutions, Inc. (“SSI”) challenges the award of a

contract by the United States Department of Energy’s (“DOE”) National Nuclear Security

Administration (“NNSA”) to TUVA, LLC (“TUVA”). Currently before the court are the parties’

cross-motions for judgment on the administrative record. As explained below, because the

NNSA did not act arbitrarily, capriciously, or contrary to law, the court denies SSI’s motion for

judgment on the administrative record and grants defendant’s cross-motion for judgment on the

administrative record.

1

This reissued Opinion and Order incorporates the redactions proposed by the parties in

their September 26, 2017 joint status report as well as two additional redactions imposed sua

sponte by court. The court’s redactions appear in lines 3 and 10 of the second paragraph on page

50; both redactions are of information the parties jointly agreed to redact but inadvertently failed

to designate in their status report. Redactions are indicated with a bracketed ellipsis (“[. . .]”).

The court notes that the parties were not in complete agreement with respect to the proposed

redactions, as discussed in footnote 5.

I. BACKGROUND

A. The Solicitation

The NNSA’s mission

is to strengthen national security through the military application

of nuclear energy and by reducing the global threat from terrorism

and weapons of mass destruction. DOE/NNSA is a vital

contributor to reducing the global nuclear danger through its

national security, nuclear safety, nonproliferation activities, and

nuclear materials stabilization by supporting a safe, secure, reliable

stockpile, and the safe dismantlement and disposal of excess

nuclear weapons.

AR 112. 2 “The multi-disciplined DOE/NNSA safeguards and security programs . . .

directly support protection of NNSA personnel, facilities, nuclear weapons, and information

from a full spectrum of threats . . . .” Id. The NNSA’s Office of Personnel and Facility

Clearances (“OPFC”), located on Kirtland Air Force Base in Albuquerque, New Mexico, “is

responsible for the management and implementation” of these programs. Id.

On June 10, 2013, the NNSA prepared an Independent Government Cost Estimate

(“IGCE”) for the provision of “Personnel Security and Facility Clearance Programs Support

Services” over a five year period. Id. at 1-4. The total cost was estimated at $32,123,912. Id. at

1. On March 13, 2014, the NNSA developed a corresponding Acquisition Strategy Plan. Id. at

5-11. On February 23, 2015, the NNSA issued its Source Selection Plan (“SSP”), which set

forth “the criteria, evaluation process and procedures, and rating methodology to be used by the

Integrated Project Team (IPT) to evaluate offers for . . . Request for Proposal [(“RFP”) or

“solicitation”)] No. DE-SOL-0006736.” Id. at 14.

The RFP was issued on February 25, 2015. Id. at 32. It specifically sought a contractor

to provide, on a cost-plus-fixed-fee basis, “all personnel security program support to the NNSA

clearance population of approximately 49,000 contractor and federal employees.” Id. at 33, 112-

13. In particular, as set forth in the RFP’s Performance Based Work Statement (“PBWS”), the

successful offeror would be responsible for “numerous and varied personnel security access

authorization adjudicative and processing activities, as well as investigating and analyzing the

required background investigations of approximately 8,200 clearance holders and 3,100

applicants per year.” Id. at 113; see also id. at 199 (identifying four PBWS areas: Program

Management, Processing, Adjudication, and Foreign Ownership, Control, and Influence

(“FOCI”)), 214 (identifying, in the RFP Questions and Answers (“Q&A”), the six skill set

categories of Adjudication, Administrative, Processors, Professional/Executive Administrative,

FOCI, and Vault Activities). In addition, “OPFC conducts security reviews for approximately

9,500 human reliability program incumbents per year and performs the processing of

2

The facts in this section are derived from the corrected administrative record (“AR”),

which was filed on July 31, 2017.

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investigations for approximately 4,000 applicants for [Homeland Security Presidential Directive-

12 (“HSPD-12”)] Personal Identification Verification per year.” Id. at 113.

In section L of the RFP, the NNSA described the information that offerors were required

to provide in their proposals. Id. at 86-107. Offerors were directed to submit their proposals in

three volumes: Volume I: Offer and Other Documents; Volume II: Technical and Management

Information; and Volume III: Cost Proposal. Id. at 94-95. Offerors were told that the

information in Volumes II and III would be evaluated pursuant to five evaluation criteria:

Criterion 1: Technical Approach; Criterion 2: Staffing Plan and Narrative and Program

Manager (“PM”) Qualifications; Criterion 3: Corporate Experience; Criterion 4: Past

Performance; and Criterion 5: Cost. Id.

Then, in section M of the RFP, the NNSA indicated how the proposals would be

evaluated, describing each of the five criteria. Id. at 109-11. In descending order of importance,

the criteria were:

Criterion 1 The Government will evaluate the Offeror’s understanding of the

(Technical requirements, and the completeness and feasibility of the proposed technical

Approach) approach associated with the PBWS requirements identified for this Criterion

in Section L. The Government will also evaluate the extent to which the

Offeror’s technical approach demonstrates a thorough understanding of any

technical risks and the effectiveness of Offeror’s approach to avoid or

minimize those risks.

Criterion 2 (A) Staffing Plan:

(Staffing Plan

and Program The Government will evaluate the Offeror’s Staffing Plan to determine the

Manager degree to which the proposed staffing levels and skill mix are likely to result

Qualifications) in efficient and successful performance of the PBWS. Additionally, the

Offeror’s approach to staffing during workload fluctuations will be evaluated

to determine the degree to which the approach is likely to result in continuity,

and successful accomplishment of the PBWS during workload fluctuation

periods.

(B) Program Manager Qualifications:

The Government will evaluate the extent to which the proposed Program

Manager possesses the education and relevant experience to effectively

execute the duties and responsibilities of the Program Manager considering

the nature, size, and scope of the work required in the PBWS, including

consideration of the Minimum Personnel Qualifications for the Program

Manager position at Section J Attachment 6. The resume of the proposed

Program Manager, without the documentation required in provision

L.24(b)(2)(B) (if not currently employed by the Offeror), will be evaluated;

however, the omitted documentation (letter of intent) will be noted as a

performance risk.

Criterion 3 The Government will evaluate and assess the relevancy[ ] (similarity in

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(Corporate nature, size in dollars, and complexity) and depth of the Offeror’s (or team

Experience) member’s or subcontractor’s) experience (provided in Attachments L-9 and

L-10) 3 as it relates to performing the portions of the PBWS the Offeror (or

team member or subcontractor) is proposed to perform. Any discrepancies

between Offerors’ Staffing Plan and Offerors’ experience listed in

Attachment L-10 will be noted as a performance risk under this Corporate

Experience evaluation criterion. The Government may consider the

corporate experience of a predecessor or affiliated company of a team

member as though the experience were the team member’s if the Government

determines that the assets or resources of the predecessor or affiliated

company will be brought to bear in performance under this contract. Only

corporate experience that complies with the instructions contained in

provision L-24(b)(3)[, which provides, in part, that “[c]ontracts listed shall

include federal customers only,”] will be evaluated.

Criterion 4 Past performance is the measure of how well the Offeror has performed work

(Past similar to that required in this solicitation. The Government will evaluate the

Performance) Offeror’s (or team member’s or subcontractor’s) relevant information from

the Past Performance Questionnaires, the self-assessment information

submitted for Criterion 3, and any relevant past performance information the

Government may obtain from other sources, to determine the degree to which

the past performance demonstrates the Offeror’s (or team member’s or

subcontractor’s) ability to successfully perform the portions of the PBWS the

Offeror (or team member or subcontractor) is proposed to perform.

Additionally, the Government will consider the Offeror’s historic ability to

recruit and retain personnel and ensure all required personnel are available

for contract start-up. The Government may consider the past performance of

a predecessor or affiliated company of a team member as though the past

performance were the team member’s if the Government determines that the

assets or resources of the predecessor or affiliated company will be brought

to bear in performance under this contract. Past performance information

must be within the last three years and in place for at least three months in

order to be evaluated. If the Offeror (or team member or subcontractor) does

not have a record of relevant past performance information on contracts

similar to the PBWS, or past performance information is otherwise not

available, the Offeror will not be evaluated favorably or unfavorably on past

performance and will be assigned a neutral rating.

Criterion 5 The cost proposal will not be rated, but will be used in determining the best

(Cost) value to the Government in accordance with Section M.2 NNS-M-1002. The

cost proposal will be evaluated in accordance with [Federal Acquisition

Regulation (“FAR”)] 15.404 to determine cost reasonableness and realism.

A significant cost deficiency or weakness that may cause the offer to be

3

Attachment L-9 to the RFP is captioned “Corporate Experience & Self-Assessment

Form.” AR 197; accord id. at 95. Attachment L-10 to the RFP is a form captioned “Corporate

Experience Matrix.” Id. at 95; 199.

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rejected is defined as one that is lacking in reasonableness or realism, and the

correction of which would cause a material alteration or revision of the

Offeror’s cost proposal. An unrealistic, unreasonable, or incomplete cost

proposal may be evidence of the Offeror’s lack of, or poor, understanding of

the requirements of the solicitation, and thus may adversely affect the

Offeror’s rating on the Technical Proposal criteria.

Pursuant to FAR 15.404, the following will be evaluated:

(A) Reasonableness:

The total price proposed for the five year period plus the Six-Month Option

to Extend Services price, including the Government baselined transition

period and [Other Direct Costs (“ODC”)] amounts, and proposed fee will be

used to evaluate price reasonableness. The cost proposal will be evaluated to

determine the appropriateness of the underlying assumptions and estimating

techniques used to generate the proposed costs and the consistency of those

assumptions and techniques with the proposed accomplishment of the

required work. The Government may use any of the cost or price analysis

techniques specified in FAR 15.404-1 to determine reasonableness. The

Government may determine the offer unreasonable if the Offeror’s priced

[Contract Line Item Numbers] are materially unbalanced.

(B) Realism:

The cost proposal will be evaluated to determine if the estimated proposed

cost elements are realistic for the work to be performed, reflect a clear

understanding of the PBWS requirements, and are consistent with the

Staffing Plan Summary submitted by the Offeror. Inconsistencies between

the cost proposal and other portions of the proposal could raise concerns

regarding the Offeror’s understanding of the requirements and its ability to

perform the work for the proposed cost, and may affect the Government’s

rating of the Offeror’s Technical Proposal. As a result of its cost realism

analysis, the Government may adjust the Offeror’s proposed costs to reflect

any additions or reductions in cost elements to realistic levels. Cost realism

analysis will be used by the Government to establish each Offeror’s total

probable cost for the best value determination. The total probable cost

(evaluated price) includes the sum of the Government evaluated costs of the

Offeror’s proposal including the Six-Month Option to Extend Services price,

the Government baselined transition and ODC amounts, and total proposed

fee for all requirements in the PBWS. The Offeror’s cost/price proposal will

be evaluated using the probable cost computed by the Government. The

Offeror’s proposed estimated costs shall not be controlling for source

selection purposes.

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Id. at 109-11 (footnote added). According to the NNSA:

In determining the best value to the Government, Evaluation

Criteria 1-4, when combined, are significantly more important than

cost/price; however cost/price will contribute substantially to the

selection decision. The Government is more concerned with

obtaining a superior technical proposal than making an award at

the lowest evaluated total cost to the Government (including fee).

Id. at 109.

In section M of the RFP, the NNSA further indicated that the contract, which was set

aside for small businesses, id. at 33, would be evaluated by the NNSA’s IPT, id. at 108. The

NNSA intended “to make the award without discussions.” Id. If such an award could not be

made on the basis of the offerors’ initial proposals, then the RFP provided that the Contracting

Officer would “establish a competitive range for proposals submitted as a result of this

solicitation, comprised of all the most highly rated proposals.” Id. Proposals were due on March

30, 2015. Id. at 205.

B. SSI’s and TUVA’s Proposals

On March 30, 2015, the NNSA received ten proposals, id. at 2262, including proposals

from SSI, the incumbent, 4 and TUVA, the eventual awardee. See id. at 284-519 (SSI’s

proposal), 520-755 (TUVA’s proposal). In April 2015, the NNSA asked the Defense Contract

Audit Agency (“DCAA”) to perform a cost realism analysis of TUVA’s cost proposal. See id. at

4508-09 (letter regarding SAVA’s cost proposal), 4513-14 (letter regarding TUVA’s cost

proposal), 4515-18 (DCAA memorandum regarding the NNSA’s request for an analysis of

Inquiries’s cost proposal).

On June 30, 2016, the NNSA conducted technical evaluations of both SSI’s and TUVA’s

cost proposals. See id. at 861-62 (evaluation of SSI’s proposal), 863-64 (evaluation of TUVA’s

proposal). On July 8, 2016, the NNSA concluded, “on the basis of the [IPT’s] evaluation and

rating of each proposal against the evaluation criteria specified in the [RFP],” that both SSI and

TUVA were in “the competitive range for the purpose of conducting discussions.” Id. at 866-67.

The NNSA separately informed SSI and TUVA, by letter dated July 28, 2016, that they were

each within the established competitive range and that the NNSA had decided to enter into

written discussions with them: “The main purpose of these discussions is to notify [the offeror]

of significant weakness, deficiencies, any pertinent adverse past performance information, and

instances where the offeror’s price is considered to be too high, or too low by the Government.”

Id. at 874 (SSI’s letter), 904 (TUVA’s letter). In the letters, the NNSA also informed SSI and

TUVA that they were each permitted to submit a final proposal revision (“FPR”) by August 12,

2016. Id. Both SSI and TUVA submitted timely FPRs. See id. at 948-1457 (SSI’s FPR), 1458-

2135 (TUVA’s FPR).

4

Id. at 209.

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In its FPR, SSI proposed the provision of personnel security and facility clearances

support services for a total estimated cost of $26,199,522, to include both the base and option

periods. Id. at 1284. SSI’s total proposed price of $28,672,731 included SSI’s total proposed fee

(for both periods) of $1,348,209. Id. In Attachment L-9 to its FPR, SSI identified three prior

contracts as evidence of its relevant corporate experience:

Contract Date & Client Amount Invoiced Description

Number to Date or Final /

Initial Contract

Price

DE-AC52- 11/17/09 $[. . .] / Incumbent contract.

10NA29739 NNSA $[. . .]

DESC0007680 12/28/12 $[. . .] / SSI to provide “security support

DOE $[. . .] services for federal personnel, prime

contractors, and subcontractors.”

DE- 12/19/11 $[. . .] / SSI to provide “expert and

SC0006145 DOE $[. . .] professional technical assistance to

conduct facility security surveys;

review security plans; review

vulnerability analyses; perform

Personnel Security tasks; conduct

Information Security tasks; conduct

Incidents of Security Concern tasks;

and conduct or assist in self-

assessments of all security program

areas to identify deficiencies and

required corrective actions.”

See id. at 1161-75 (11/17/09 contract), 1176-78 (12/28/12 contract), and 1179-80 (12/19/11

contract). 5 In Attachment L-10 to its FPR, SSI proposed, based on its previous corporate

5

Error! Main Document Only.There is a well-established presumption in favor of

public access to court records and proceedings. See Nixon v. Warner Commc’ns, 435 U.S. 589,

597 (1978) (“[T]he courts of this country recognize a general right to inspect and copy public

records and documents, including judicial records and documents.”); In re Violation of Rule

28(d), 635 F.3d 1352, 1356 (Fed. Cir. 2011) (“There is a strong presumption in favor of a

common law right of public access to court proceedings.”). This presumption applies to court

records in civil adjudicatory proceedings, AmerGen Energy Co. by & Through Exelon

Generation Co. v. United States, 115 Fed. Cl. 132, 136 (2014), including the records maintained

by the Court of Federal Claims, 28 U.S.C. § 174(b) (2012); Pratt & Whitney Canada Inc. v.

United States, 14 Cl. Ct. 268, 273 (1988). The presumption of public access, however, “is not

absolute. Every court has supervisory power over its own records and files, and access [may be]

denied where court files might . . . become a vehicle for improper purposes.” Nixon, 435 U.S. at

598. Thus, “the decision as to access is one best left to the sound discretion of the trial court, a

discretion to be exercised in light of the relevant facts and circumstances of the particular case.”

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Id. at 599. In exercising that discretion, a court “weigh[s] the interests advanced by the parties in

light of the public interest and the duty of the courts.” Id. at 602; accord AmerGen Energy, 115

Fed. Cl. at 137 (“[T]his court must weigh the private interests advanced by the parties against the

public’s interest in access to judicial proceedings.”). The party seeking to restrict access to court

records bears a “heavy burden of overcoming the presumption of open judicial records.” Pratt &

Whitney, 14 Cl. Ct. at 275. Indeed, only a “compelling justification” will suffice to overcome

the presumption. Id. at 274; accord In re Violation of Rule 28(d), 635 F.3d at 1358 (remarking

that another federal appellate court had concluded that “‘only the most compelling showing can

justify’ limitations on the disclosure of ‘testimony or documents actually introduced at trial’”

(quoting Poliquin v. Garden Way, Inc., 989 F.2d 527, 533 (1st Cir. 1993))); AmerGen Energy,

115 Fed. Cl. at 137 (“[A] party seeking to prevent disclosure of information submitted as

evidence in dispositive judicial proceedings, whether at trial or in connection with a motion for

summary judgment, must demonstrate compelling reasons for keeping such information out of

public view.”); see also Pratt & Whitney, 14 Cl. Ct. at 276 (“The common law right of access is

particularly strong with respect to materials considered by a court.”). One circumstance in which

courts will deny public access to its records is when those records contain “business information

that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598. Indeed, the

protective order in this case allows for the redaction of “information that must be protected to

safeguard the competitive process, including source selection information, proprietary

information, and confidential information . . . .” Protective Order ¶ 1; see also In re Violation of

Rule 28(d), 635 F.3d at 1360 (noting that the court’s local rule–Rule 28(d)–makes it “clear that

the parties must confine their confidentiality markings [in their briefs] to information covered by

a protective order”); Def. Tech., Inc. v. United States, 99 Fed. Cl. 103, 103 n.* (2011) (rejecting

the proposed redaction of information that did not fall within the protective order’s definition of

protected information); Magnum Opus Techs., Inc. v. United States, 94 Fed. Cl. 512, 519 n.*

(2010) (rejecting proposed redactions “not concerning ‘protected information’ as defined in the

protective order”); cf. Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 724 (2010)

(“The purpose of redaction . . . is to safeguard the competitive process, not to withhold

information that a party frowns on making public.”). However, if the redactions would be so

extensive as to render the affected document incomprehensible, the court may exercise its

discretion and decline to make them. See, e.g., In re Violation of Rule 28(d), 635 F.3d at 1360

(noting that “[t]he confidentiality markings in this case were so extensive that the non-

confidential version of the brief is virtually incomprehensible” and that such “an improper casual

approach to confidentiality markings . . . ignores the requirements of public access[ and]

deprives the public of necessary information”); Allied Tech. Grp., Inc. v. United States, 94 Fed.

Cl. 16, 23 n.1 (2010) (“[I]f the court were to accept all of [the] proposed redactions, it would . . .

result[] in a nearly incomprehensible public document.”); MVM, Inc. v. United States, 46 Fed.

Cl. 137, 137 n.* (1999) (“If the language were redacted, the opinion would be

incomprehensible.”).

In this case, the parties agree that the information in the third column, captioned “Amount

Invoiced to Date or Final/Initial Contract Price,” of the table appearing on pages 6 and 7 of the

version of the opinion filed under seal should be redacted. September 26, 2017 Joint Status

Report, Proposed Redactions 6-7. However, plaintiff also seeks to redact the information under

the first, second, and fourth columns, respectively captioned “Contract Number,” “Date &

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experience, “100% self-performance of [the] PBWS.” Id. at 1279. SSI also provided a corporate

experience matrix that identified SSI’s experience in the PBWS areas of (1) Program

Management, (2) Processing, (3) Adjudication, and (4) Foreign Ownership, Control, or Influence

(“FOCI”). Id.

TUVA is a “privately held, wholly owned subsidiary of AKIMA, LLC, 6 which is a

wholly owned subsidiary of NANA Development Corporation.” Id. at 1463-64 (footnote added).

AKIMA, LLC has twenty-eight subsidiaries, id. at 3967, including SAVA Workforce Solutions,

LLC (“SAVA”), id. at 1464, AKIMA Security, id. at 1862-63, and AKIMA Infrastructure, LLC,

id. In its FPR, TUVA proposed to satisfy the contract’s requirements by joining forces with

SAVA and another company, Inquiries, Inc. (“Inquiries”). Id. at 1463. TUVA’s total proposed

price was $24,997,054, which covered both the base and option periods. Id. at 1468. Included in

TUVA’s contract price are TUVA’s indirect and direct labor rates, which are described at length

in its FPR. See id. at 1675-88, 1955-56.

Lastly, TUVA’s FPR provides information regarding its and its affiliates’ previous

corporate experience. For example, in Attachment L-9 to its FPR, TUVA identified seven prior

contracts as evidence of its relevant corporate experience:

Client,” and “Description.” September 26, 2017 Joint Status Report 1. According to plaintiff,

the information is proprietary and if known to plaintiff’s competitors, “could give [them] insight

into the specific references on which [plaintiff] would rely for this type of contract.” Id. In

addition, plaintiff claims that because its “past performance and corporate experience [were] not

at issue in this protest,” the public does not need to have the information in order to understand

the court’s reasoning. Id. Defendant counters that the information should not be redacted

because it “is publicly available and has no bearing on the competitive process.” Id. at 2.

Plaintiff’s argument is not persuasive. First, constraints that apply to federal procuring

agencies and their officials do not apply to this court. See Torres Advanced Enter. Sols., LLC v.

United States, No. 17-868C, 2017 WL 4366238, at *5 (Oct. 2, 2017). Second, allegations of

competitive harm must be supported if they are to rebut the presumption of public access to court

records. See AmerGen Energy, 115 Fed. Cl. at 140-41 (noting that because broad, nebulous, or

conclusory allegations of competitive harm are insufficient to establish good cause for the

issuance of a protective order under Rule 26(c)(1) of the Rules of the United States Court of

Federal Claims, “such allegations are insufficient to meet the more stringent compelling reasons

standard required to rebut the presumption of public access with respect to judicial records”).

Here, not only does plaintiff fail to specify what actions a competitor would take if it had access

to information related to plaintiff’s past performance, but plaintiff also fails to specify what harm

would result from those actions. In sum, plaintiff has not advanced a compelling justification for

the court to redact the information described above from its September 12, 2017 Opinion and

Order.

6

AKIMA is referred to in the administrative record as both “AKIMA” and “Akima.”

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Contract Date & Client Amount Invoiced Description

Number to Date or Final /

Initial Contract

Price

HSSCCG-08- 4/22/08 $[. . .] / Inquiries to provide “personnel

D-00009 Department of $[. . .] security support services.”

Homeland

Security

(“DHS”)

DJD-10-C- 12/28/09 $[. . .] 7 / SAVA to provide “qualified Project

0014 (original) Drug $[. . .] Management, Administrative, and

Enforcement Data Analysis Support services with

DJD-16-R- Administration the prerequisite technical and

0004 (bridge) (“DEA”) administrative knowledge, skills,

and abilities to enhance the

operational performance of the

[DEA’s Tactical Diversion

Squads].”

JFBI-10-035 5/5/10 $[. . .] / TUVA and SAVA to provide

Federal Bureau $[. . .] subject matter expert services “such

of as investigations, adjudications, data

Investigation analysis, program management,

(“FBI”) training, identifying threats to the

U.S. such as foreign investments,

insider threats, etc.”

DTFAWA-14- 6/23/14 $[. . .] / TUVA to provide “direct support to

C-00023 Federal $[. . .] FAA . . . in carrying out many

Aviation [human resources (“HR”)] program

Administration services such as compensation and

(“FAA”) benefits, work-life, talent

development, business management,

performance management, labor and

employee relations, and regional HR

services across the U.S.”

HQ0034-14-C- 9/9/14 $[. . .] / Inquiries to provide DOD with

0059 Department of $[. . .] “Adjudications and Administrative

Defense Support Services.”

(“DOD”)

HC1028-14-P- 9/12/14 $[. . .] / SAVA to “track and analyze

0271 (prime United States $[. . .] metrics, as well as implement

contract) Army Office of [knowledge management] to ensure

the Provost [their customers] capture, develop,

7

[. . .].

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PO Marshal share, and effectively use

I321000013 General organizational knowledge.”

(contract with (“Army

Prime) OPMG”)

Task Order 9/16/14 $[. . .] / SAVA to provide a Project Manager

QOU United States $[. . .] with “funding for five

OHRT201400 Capitol Police Investigator/Adjudicators to support

003 against (“USCP”) the USCP” Office of Human

GSA Schedule Resources.

Contract GS-

07F-0451Y

See id. at 1689-94 (5/5/10 contract), 1694-96 (6/23/14 contract), 1696-98 (9/16/14 contract),

1698-1701 (9/12/14 contract), 1701-03 (12/28/09 contract), 1703-05 (9/9/14 contract), and 1705-

08 (4/22/08 contract) (footnote added). In addition, in Attachment L-10 to its FPR, TUVA

provided a corporate experience matrix that identified which of the various tasks identified in the

four PBWS areas. Id. at 1709-11.

On August 30, 2016, following SSI’s and TUVA’s submission of their FPRs, the IPT

once again conducted a technical evaluation of both offerors’ cost proposals. See id. at 2136-37

(evaluation of SSI’s proposal), 2138-39 (evaluation of TUVA’s proposal). On September 8,

2016, the IPT issued its final evaluation report. See id. at 2140-210.

C. Initial Award and First Bid Protest

On September 28, 2016, the SSA issued her Source Selection Document (“SSD”). See

id. at 2261-70. Two days later, on September 30, 2016, the NNSA notified SSI that the contract

had been awarded to TUVA. Id. at 2274. In its notification letter to SSI, the NNSA stated that

TUVA was selected because its proposal provided the best value to the government in terms of

technical merit and price, considering the RFP’s evaluation criteria. Id. The NNSA also

provided SSI with a table summarizing the NNSA’s assessment of the two offerors’ proposals. 8

Criterion 1 Criterion 2 Criterion 3 Criterion 4 Criterion 5

(Technical (Staffing Plan (Corporate (Past (Cost)

Approach) & Program Experience) Performance) * in millions

Manager of dollars

Qualifications)

TUVA Excellent Excellent Good Very Good $24.99

SSI Good Satisfactory Good Very Good $28.67

Id. at 2275. Further, the NNSA attached to its notification letter a copy of its technical

evaluation of SSI’s proposal that described all of the strengths and weaknesses that were

8

The table is not reproduced in its exact format.

-11-

assessed. Id. at 2277-301. Of particular note is the significant weakness that the NNSA assessed

for SSI’s staffing plan:

In SSI’s FPR they described job duties for Adjudication Major

Services (PBWS 4.3.1) for the Personnel Security Specialist 1 that

does not include the [. . .]. This is not efficient and does not lend

to proficient [. . .]. . . . [SSI’s] approach does not provide the

appropriate skill mix that is likely to result in efficient and

successful contract performance related to all PBWS functions.

This is a flaw in the proposal that appreciably increases the risk of

unsuccessful contract performance.

Id. at 2288-89; accord id. at 2194-95 (containing the IPT’s September 8, 2016 final evaluation

report). In addition, the NNSA informed SSI that it was entitled to a debriefing, which meant

that SSI was permitted to submit written questions to the NNSA. Id. In one of its written

questions, SSI sought more information regarding the NNSA’s assignment of that significant

weakness: “In Criterion 2 – Staffing Plan & PM Quals, can the Government explain why the

Weakness discussed was considered significant?” Id. at 2306. In a response dated October 6,

2016, id. at 2302, the NNSA stated: “The Government determined the proposed job duties/skill

mix in the Staffing Plan were not likely to result in efficient and successful performance of the

PBWS, and it is a flaw in the proposal that appreciably increases the risk of unsuccessful

contract performance,” id. at 2306.

Less than one week later, on October 11, 2016, SSI filed a bid protest with the United

States Government Accountability Office (“GAO”) challenging the NNSA’s award of the

contract to TUVA. Id. at 2310-70. During the proceedings, the NNSA produced certain

documents, including copies of TUVA’s proposal and the NNSA’s evaluation of TUVA’s and

SSI’s proposals. Id. at 2456-64. In response, SSI filed a supplemental bid protest with the GAO

on November 4, 2016. Id. at 2465-75. On November 10, 2016, the NNSA filed a Notice of

Corrective Action and Request to Dismiss the Protest (“Notice of Corrective Action”), wherein it

indicated that it would reevaluate the acceptable offerors’ proposals, review the acceptable

offerors’ size qualifications, and prepare a new selection decision. Id. at 2491; see also id. at

2534 (indicating that only the proposals evaluated by SSI and TUVA were deemed acceptable).

Then, on November 15, 2016, the NNSA clarified the scope of the corrective action: “Should

the agency identify new weaknesses and/or deficiencies in its reevaluation of proposals that it

would have been obligated to raise in the previous round of discussions, the agency will give

acceptable offerors an opportunity to address the new weaknesses and/or deficiencies in

additional discussions.” Id. at 2524. The following day, the GAO dismissed SSI’s bid protest,

finding that the NNSA’s promise to reevaluate the offerors’ proposals rendered SSI’s protest

academic. Id. at 2500.

D. Reevaluation and Second Bid Protest

On February 22, 2017, the NNSA’s IPT issued its Corrective Action Final Evaluation

Report (“Revised IPT Report”). See id. at 2521-610. In its Revised IPT Report, the NNSA used

“the methodology described in the SSP to assess each proposal’s merit in relation to the

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evaluation criteria stated in the RFP.” Id. at 2527. Specifically, the NNSA compared the

offerors’ past experiences with the list of tasks required in the PBWS. See id. at 2537-569

(evaluation of TUVA’s FPR), 2575-604 (evaluation of SSI’s FPR). With respect to Criterion 1

(Technical Approach), Criterion 2 (Staffing Plan and Program Manager Qualifications), and

Criterion 3 (Corporate Experience), the following adjectival rating definitions were applied:

Rating Definition

Excellent The Proposal addresses the requirements in an exceptional manner normally

evidenced by at least one significant strength or a combination of strengths

and no weaknesses and a very high probability of successful contract

performance with a low degree of risk.

Good The Proposal addresses the requirements in a comprehensive manner

normally evidenced by strengths that outweigh any weaknesses and a high

probability of successful contract performance with a low degree of risk.

Satisfactory The Proposal addresses the requirements in an acceptable manner normally

evidenced by strengths and weaknesses that are generally offsetting and a

reasonable probability of successful contract performance with a moderate

degree of risk.

Less Than The Proposal addresses the requirements in a less than acceptable manner

Satisfactory with weaknesses that outweigh strengths, if any; and a low probability of

successful contract performance with a moderate to high degree of risk.

Id. at 2529. With respect to Criterion 4 (Past Performance), different adjectival rating definitions

were used:

Rating Definition

Exceptional Performance meets contractual requirements and exceeds many requirements

to the government’s benefit.

Very Good Performance meets contractual requirements and exceeds some to the

government’s benefit.

Satisfactory Performance meets contractual requirements.

Marginal Performance does not meet some contractual requirements. The element

being assessed reflects a serious problem for which the contractor has not yet

implemented satisfactory corrective actions.

Unsatisfactory Performance does not meet contractual requirements and recovery is not

likely in a timely manner. Contractor’s corrective actions to date are

ineffective.

Neutral The Vendor lacks a record of relevant or available past performance or for

whom information on past performance history is not available. There is no

expectation of either successful or unsuccessful performance based on the

Vendor’s past record.

Id. Lastly, the NNSA performed a cost realism analysis of both proposals. See id. at 2570-74

(analysis of TUVA’s FPR), 2605-06 (analysis of SSI’s FPR).

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The next day, February 23, 2017, the SSA issued her Revised Source Selection Decision

(“Revised SSD”). Id. at 2611-19. Significantly, the SSA concluded that there was no evidence

of underbidding in TUVA’s cost proposal. Id. at 2618. That same day, the NNSA again notified

SSI that the contract had been awarded to TUVA and again provided SSI with a table

summarizing its assessment of the two offerors’ proposals. 9 Id. at 2620-52.

Criterion 1 Criterion 2 Criterion 3 Criterion 4 Criterion 5

(Technical (Staffing Plan (Corporate (Past (Cost)

Approach) & Program Experience) Performance) * in millions

Manager of dollars

Qualifications)

TUVA Excellent Excellent Good Very Good $24.99

SSI Good Satisfactory Excellent Very Good $28.67

Id. at 2621. According to the NNSA, “[t]he rationale for the award [to TUVA was that] TUVA’s

proposal represents the best value to the Government in terms of technical merit and price

considering the evaluation criteria in the solicitation.” Id. Both parties then received, as they

had before, explanatory debriefing letters. See id. at 2690-94 (TUVA’s letter), 2695-98 (SSI’s

letter).

On March 7, 2017, SSI filed its second bid protest with the GAO. Id. at 2699-779.

According to SSI, the NNSA (1) failed to advise SSI of a significant weakness during

discussions, (2) unreasonably and unequally evaluated the proposals pursuant to Criterion 2, (3)

misevaluated TUVA’s proposal pursuant to Criterion 3 and Criterion 4, (4) failed to perform a

proper cost realism analysis, (5) misevaluated TUVA’s proposal pursuant to Criterion 1 and

Criterion 2, and (6) unreasonably assigned two weaknesses to SSI’s proposal pursuant to

Criterion 1. Id. at 2705-24. On April 4, 2017, the NNSA issued its Contracting Officer’s

Statement of Facts and Agency Memorandum of Law. Id. at 2838-79.

Approximately two months later, on June 15, 2017, the GAO denied SSI’s protest. See

id. at 2953-67. First, the GAO concluded that two of the protest grounds raised by SSI were

untimely. Id. at 2958-59. They were (1) SSI’s claim that “three of the contract references

provided for two of TUVA’s subcontractors (contracts HC1028-14-P-0271 and DJD-10-C-0014

for SAVA, and contract HSSCCG-08-D-00009 for Inquiries) are not relevant to the work

required pursuant to the RFP given the lack of similarity and complexity to the work here,” and

(2) SSI’s claim that the NNSA failed to notify it during discussions of the NNSA’s assessment of

a significant weakness—that SSI failed to state that its Personnel Security Specialist (“PSS”) I

personnel would [. . .]. Id.

Second, the GAO concluded that SSI’s claim that the agency unreasonably evaluated the

realism of TUVA’s proposed costs lacked merit. Id. at 2959-60. Rather, the GAO found that (1)

the NNSA was not required to perform an in-depth cost analysis, or to verify each item in

assessing cost realism; (2) the NNSA was not required to achieve scientific certainty in its cost

9

The table is not reproduced in its exact format.

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realism analysis; (3) the NNSA’s cost realism analysis was reasonable because it used a variety

of methods to evaluate the direct rates, to include a discrete analysis of labor rates by category;

(4) the NNSA’s determination that TUVA’s “allocation of labor categories and skill mix for the

tasks [was] sufficient and realistic to accomplish the PBWS” was proper; and (5) the NNSA’s

evaluation of TUVA’s indirect rates, in light of the information provided by TUVA and the

NNSA’s comparison of “TUVA’s proposed indirect rates with its DCAA-provided Forward

Budget Submission” was appropriate. Id. at 2960-61.

Third, with respect to SSI’s argument that the NNSA’s discussions with SSI and TUVA

were not equal, the GAO noted that while an agency must treat offerors equally, in that “offerors

must be afforded equal opportunities to address the portions of their proposals that require

revision, explanation, or amplification,” the actual discussions need not be “identical.” Id. at

2962. The GAO then concluded that SSI’s complaint in this respect was based on a comparison

of “two very different discussion scenarios,” and that overall, the NNSA’s discussions with SSI

and TUVA were “reasonable and equal, particularly when the content of the discussions, not just

the length, are taken into account.” Id. at 2963.

Fourth, the GAO concluded that SSI’s claim that the NNSA improperly assigned SSI two

weaknesses for the same issue relating to its technical approach—“that [SSI’s] proposal

regarding risk mitigation for the OPFC did not provide an effective approach to avoid or

minimize risks”—was without merit. Id. Noting that its review was limited to determining

whether the NNSA’s “evaluation conclusions were reasonable and consistent with the terms of

the solicitation and applicable procurement laws and regulations,” the GAO concluded that the

two weaknesses were appropriately assigned because “each weakness align[ed] with a specific

portion of the PBWS.” Id. at 2963-64.

Fifth, the GAO concluded that SSI’s claim that the NNSA improperly gave TUVA’s

staffing plan a rating of “Excellent” was baseless. Id. at 2964-65. According to the GAO, (1)

the NNSA’s findings with respect to TUVA’s plan and its proposed PM were amply supported

by the record, and (2) the NNSA’s assignment of a significant weakness only to SSI’s proposal

when TUVA’s proposal had the same problem did not prejudice SSI because the SSA did not

rely on this distinction in making her best-value decision. Id.

Lastly, with respect to SSI’s claim that the NNSA’s assignment of the rating of “Good”

for TUVA’s corporate experience and “Very Good” for TUVA’s past performance was not

merited, the GAO concluded that (1) the first rating was warranted because “[a]n agency

properly may attribute the experience or past performance of a parent or affiliated company,”

and because “the solicitation specifically allowed for the consideration of corporate experience

and past performance of subcontractors,” id. at 2965-66; and (2) the second rating was warranted

because “the solicitation specifically stated that the agency would consider the offeror’s (or team

member’s or subcontractor’s) experience as it related to performing the portions of the PBWS

that it was proposed to perform,” and because the solicitation also permitted consideration of the

past performance of team members and subcontractors, id. at 2966.

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E. The Instant Protest

Five days after the GAO denied its protest, SSI filed the instant protest. SSI sets forth

three claims for relief in its complaint. First, SSI claims that the NNSA failed to advise it of a

significant weakness during discussions. Compl. ¶¶ 44-52. According to SSI, the NNSA

concluded that SSI’s proposal contained a significant weakness pursuant to Criterion 2. Id. ¶ 46.

SSI further avers that the NNSA then failed to notify SSI of that weakness during the discussion

period: “NNSA failed to follow the requirements of FAR 15.306(d) that a contracting officer

must indicate to or discuss ‘significant weaknesses’ with each offeror in the competitive range

and, as a result, the discussions that NNSA held with SSI were not meaningful.” Id. ¶ 49. SSI

contends that this significant weakness was material to NNSA’s evaluation of SSI’s proposal and

ultimate decision to award the contract to TUVA. Id. ¶¶ 48, 50.

Second, SSI claims that the NNSA’s evaluation of TUVA under the corporate experience

and past performance criteria was arbitrary and capricious. Id. ¶¶ 53-63. According to SSI, the

NNSA unreasonably permitted TUVA to rely on experience references provided by TUVA and

its subcontractors. Id. ¶¶ 54-59. Specifically, SSI claims that (1) the NNSA unreasonably

permitted TUVA to rely on subcontractor SAVA’s experience for an area of the contract that

does not involve SAVA, and that if SAVA’s experience for PBWS Area 5.0 had been properly

excluded, TUVA would have been rated “Satisfactory” rather than “Good” for Criterion 3, id. ¶¶

54-56; (2) the NNSA unreasonably found TUVA’s sole experience reference and two of

subcontractor SAVA’s experience references to be relevant when they related to contracts that

were not similar in size to the contract at issue, id. ¶ 57; and (3) the NNSA unreasonably found

TUVA’s sole experience reference, one of subcontractor SAVA’s experience references, and one

of subcontractor Inquiries’s experience references to be relevant when none was performed as a

federal prime contractor, id. ¶ 58. Lastly, SSI contends in its second count that the NNSA’s

evaluation of TUVA under the past performance criterion was unreasonable because the NNSA

considered experience that was not relevant, as relevance was defined in the RFP. Id. ¶ 61.

Third, SSI claims that the NNSA failed to properly conduct a cost realism evaluation. Id.

¶¶ 65-70. According to SSI, in evaluating TUVA’s proposal for cost realism, a review required

by the RFP, the NNSA failed to recognize TUVA’s unrealistically low direct rates and failed to

adjust TUVA’s probable cost on this basis. Id. ¶ 66. In addition, SSI contends that the NNSA

failed to recognize that TUVA’s indirect rates were too low to provide the employee benefits

TUVA promised in its proposal and failed to adjust TUVA’s probable cost accordingly. Id. ¶ 67.

SSI also contends that the NNSA (1) failed to consider whether TUVA’s technical approach was

consistent with its proposed costs—according to SSI, TUVA’s cost proposal was inconsistent

with incumbent retention; and (2) misevaluated TUVA’s staffing plan, ignored an inconsistency

between TUVA’s cost proposal and its technical approach, and erroneously concluded that

TUVA would be capable of meeting the RFP’s requirements. Id. ¶ 68. In SSI’s view, the

NNSA’s cost realism analysis was insufficiently documented and there is no evidence in the

contemporaneous record of a reasonable cost realism evaluation. Id. ¶ 69.

In its request for relief, SSI claims it is entitled to a permanent injunction that requires the

NNSA to: “(i) refrain from proceeding with TUVA’s contract; (ii) allow SSI to submit a new

FPR addressing Criterion 2; (iii) reevaluate TUVA’s proposal under the corporate experience

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and past performance criteria; and (iv) conduct a proper cost realism analysis.” Compl. 12.

In light of the NNSA’s agreement to stay the performance of TUVA’s contract for ninety

days to allow for the resolution of this protest, id. ¶ 39, the court entered a scheduling order

providing for the briefing of cross-motions for judgment on the administrative record. Briefing

has concluded, and the court heard argument on September 12, 2017.

II. STANDARD OF REVIEW

When entertaining a motion for judgment on the administrative record in a bid protest,

the United States Court of Federal Claims (“Court of Federal Claims”) reviews the challenged

agency action pursuant to the standards set forth in 5 U.S.C. § 706. 28 U.S.C. § 1491(b)(4)

(2012). Although section 706 contains several standards, “the proper standard to be applied in

bid protest cases is provided by 5 U.S.C. § 706(2)(A): a reviewing court shall set aside the

agency action if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

with law.’” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350 (Fed. Cir. 2004).

Under this 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.’” Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir.

2009) (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,

1332 (Fed. Cir. 2001)).

“[C]ontracting officers are ‘entitled to exercise discretion upon a broad range of issues

confronting them’ in the procurement process.” Impresa, 238 F.3d at 1332-33 (quoting

Latecoere Int’l, Inc. v. U.S. Dep’t of Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)). Thus, the

court’s review of a procuring agency’s decision is “highly deferential.” Advanced Data

Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000); see also Citizens to

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (“The court is not empowered to

substitute its judgment for that of the agency.”). Indeed, “technical ratings . . . involve

discretionary determinations of procurement officials that a court will not second guess.” E.W.

Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996); accord Isometrics v. United States,

5 Cl. Ct. 420, 423 (1984) (“[W]here an agency’s decisions are highly technical in nature, . . .

judicial restraint is appropriate and proper.”). Furthermore, when engaging in a negotiated

procurement, a “protester’s burden of proving that the award was arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law is greater than in other types of bid

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

And, when a contract is to be awarded on a “best value” basis, contracting officers have “even

greater discretion than if the contract were to have been awarded on the basis of cost alone.” Id.

(citing E.W. Bliss Co., 77 F.3d at 449) (“Procurement officials have substantial discretion to

determine which proposal represents the best value for the government.”)).

Given the highly deferential standard of review, when a protester challenges the

procuring agency’s decision as lacking a rational basis, “the test for reviewing courts is to

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, 238 F.3d at 1332-33 (citation and internal

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quotation marks omitted); accord Advanced Data Concepts, 216 F.3d at 1058 (“The arbitrary and

capricious standard . . . requires a reviewing court to sustain an agency action evincing rational

reasoning and consideration of relevant factors.”). When a protester claims that the procuring

agency’s decision violates a statute, regulation, or procedure, it must show that the violation was

“clear and prejudicial.” Impresa, 238 F.3d at 1333 (internal quotation marks omitted).

In addition to showing “a significant error in the procurement process,” a protester must

show “that the error prejudiced it.” Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.

1996); see also Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005) (holding

that if the procuring agency’s decision lacked a rational basis or was made in violation of the

applicable statutes, regulations, or procedures, the court must then “determine, as a factual

matter, if the bid protester was prejudiced by that conduct”); PGBA, LLC v. United States, 60

Fed. Cl. 196, 203 (2004) (“To prevail in a bid protest, a disappointed offeror must show both

significant error in the procurement process and prejudice to its posture in the process.”). “To

establish prejudice . . ., a protester must show that there was a ‘substantial chance’ it would have

received the contract award absent the alleged error.” Banknote, 365 F.3d at 1351 (quoting

Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1086 (Fed. Cir. 2001)); see

also Data Gen., 78 F.3d at 1562 (“[T]o establish prejudice, a protester must show that, had it not

been for the alleged error in the procurement process, there was a reasonable likelihood that the

protester would have been awarded the contract.”); Statistica, Inc. v. Christopher, 102 F.3d 1577,

1581 (Fed. Cir. 1996) (“To establish competitive prejudice, a protester must demonstrate that but

for the alleged error, there was a ‘substantial chance that [it] would receive an award—that it was

within the zone of active consideration.’” (quoting CACI, Inc.-Fed. v. United States, 719 F.2d

1567, 1574-75 (Fed. Cir. 1983))); accord Overstreet Elec. Co. v. United States, 47 Fed. Cl. 728,

742-43 (2000).

III. ANALYSIS

A. Standard for Interpreting a Solicitation

As an initial matter, the court must define the NNSA’s obligation when reviewing the

various proposals it received in response to its solicitation. The court interprets a solicitation in

the same manner as it would a contract. See Banknote, 365 F.3d at 1353 n.4 (citing Grumman

Data Sys. Corp. v. Dalton, 88 F.3d 990, 997-98 (Fed. Cir. 1996)). Thus, as with the

interpretation of a contract, the “[i]nterpretation of the solicitation is a question of law . . . .” Id.

at 1353. The court begins by examining the solicitation’s plain language, and in doing so

considers “the solicitation as a whole, interpreting it in a manner that harmonizes and gives

reasonable meaning to all of its provisions.” Id. “If the provisions of the solicitation are clear

and unambiguous, they must be given their plain and ordinary meaning; [the court] may not

resort to extrinsic evidence to interpret them.” Id.

However, when the language of the solicitation “is susceptible to more than one

reasonable interpretation,” the solicitation is ambiguous. Id. If the solicitation contains an

ambiguity, then the court must determine whether that ambiguity is patent. Grumman Data Sys.,

88 F.3d at 997. “A patent ambiguity is present when the contract contains facially inconsistent

provisions that would place a reasonable contractor on notice and prompt the contractor to rectify

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the inconsistency by inquiring of the appropriate parties.” Stratos Mobile Networks USA, LLC

v. United States, 213 F.3d 1375, 1381 (Fed. Cir. 2000). Patent ambiguities are “‘obvious, gross,

[or] glaring.’” Grumman Data Sys., 88 F.3d at 997 (quoting H & M Moving, Inc. v. United

States, 499 F.2d 660, 671 (Ct. Cl. 1974)). If a solicitation contains a patent ambiguity, the

protester’s interpretation of the solicitation will fail unless it previously sought clarification from

the procuring agency regarding the ambiguous language. Id. at 997-98; accord Stratos Mobile

Networks USA, 213 F.3d at 1381. If the ambiguity is not patent and the protester demonstrates

that it relied upon the ambiguity, then the ambiguity will be construed against the drafter of the

solicitation—the procuring agency. See NVT Techs., Inc. v. United States, 370 F.3d 1153, 1162

(Fed. Cir. 2004).

B. SSI Cannot Prevail on the Merits of Its Protest

1. SSI Waived Its Right to Object to the NNSA’s Failure to Disclose a Significant

Weakness During Discussions

SSI’s first claim concerns the NNSA’s failure to disclose the significant weakness

pertaining to the job duties/skill mix described in the staffing plan during discussions.

According to SSI, although a description of the duties of the PSS I position was present in its

initial proposal, when the NNSA assigned this particular significant weakness, it only referenced

SSI’s FPR. Pl.’s Mot. 11 (citing AR 2194-95). SSI claims that the only change it made to its

description of the duties of the PSS I position in its FPR was to add that “[t]he Personnel

Security Specialists are responsible for all tasks in PBWS 4.3.1 and 4.3.2.” Id. (citing AR 1235).

SSI argues, therefore, that the NNSA’s failure to reopen discussions to advise SSI of its

assignment of a significant weakness so that SSI would have an opportunity to amend its FPR

was a violation of the FAR. Id. at 13. SSI concludes: “Thus, NNSA’s evaluation of SSI under

Criterion 2 was flawed, and the resulting award decision based on that evaluation was

unreasonable, arbitrary, and capricious.” Id.

Defendant contends that SSI waived its argument that the NNSA erred by failing to

engage in discussions with SSI regarding a significant weakness in its staffing plan. Def.’s

Cross-Mot. & Resp. 14-18. Relying on Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308

(Fed. Cir. 2007), a decision of the United States Court of Appeals for the Federal Circuit

(“Federal Circuit”), defendant argues that SSI forfeited its right to challenge the NNSA’s

decision in this regard because SSI did not raise its objection after the NNSA’s November 10,

2016 notice of its intent to take corrective action and prior to the NNSA’s award of the contract

to TUVA. Id. According to defendant, pursuant to the Blue & Gold Fleet waiver rule, bidders

are encouraged “to raise issues early on so the agency can expeditiously address and resolve

them in connection with the procurement, rather than through costly, after-the-fact litigation.”

Id. at 14. In addition, defendant avers that although the waiver rule was originally interpreted as

applying solely to solicitations, the Federal Circuit expanded application of the rule to cover “all

pre-award situations.” Id. at 15 (quoting Comint Sys. Corp. & EyeIT.com, Inc., Joint Venture v.

United States, 700 F.3d 1377, 1382 (Fed. Cir. 2012)). Defendant concludes: “Thus, to the

extent that a bidder perceives any defect, ambiguity, or error regarding the scope of the proposed

corrective action, then it must raise that concern before the agency engages in that action should

it wish to preserve its objection.” Id.

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SSI disputes defendant’s interpretation of the Blue & Gold Fleet waiver rule. Pl.’s Reply

& Resp. 2-5. According to SSI, the waiver only applies to challenges alleging errors in the

solicitation, not to challenges alleging errors in the evaluation process. Id. at 3-4. Quoting

Vanguard Recovery Assistance v. United States, 99 Fed. Cl. 81, 92 (2011), SSI argues that “had

[the agency] at any point in taking corrective action modified its solicitation and called for new

proposals, then the somewhat extended doctrine of timeliness and waiver represented by the

progeny of Blue & Gold Fleet in this court could well have been triggered.” Id. (internal

quotation marks omitted). In addition, SSI contends that it would have been premature for it to

protest immediately following NNSA’s notice that it intended to take corrective action because

“the determination during the reevaluation that this aspect of SSI’s proposal was a significant

weakness had not yet been made.” Id. at 3 n.2.

Defendant counters that SSI’s reliance on Vanguard Recovery Assistance is misplaced.

Def.’s Reply 4-5. According to defendant, in Vanguard Recovery Assistance, the court held that

the Blue & Gold Fleet waiver rule was inapplicable to the protester’s challenge because it related

to “perceived evaluation defects in connection with the agency’s corrective action after a GAO

protest,” whereas in the instant case, SSI’s challenge relates to a procedural error—SSI’s claim

that the NNSA failed to follow the requirements of FAR 15.306(d) by precluding SSI from

submitting a revised FPR to address the significant weakness in its staffing plan—yet SSI failed

to raise the issue prior to the NNSA’s award of the contract to TUVA. Id. In addition, defendant

challenges SSI’s claim that it would have been premature for SSI to challenge the agency’s

corrective action because the NNSA had not yet determined whether to assign SSI’s proposal a

significant weakness. Id. at 5. Defendant claims that SSI was aware of the agency’s analysis in

this respect by the time it filed its first protest and certainly was aware by the time the NNSA

took corrective action. Id.

In the instant case, it is undisputed that, pursuant to the FAR, “[e]xchanges with offerors

after establishment of the competitive range” are intended to be meaningful conversations

between the parties:

Negotiations are exchanges, in either a competitive or sole source

environment, between the Government and offerors, that are

undertaken with the intent of allowing the offeror to revise its

proposal. These negotiations may include bargaining. Bargaining

includes persuasion, alteration of assumptions and positions, give-

and-take, and may apply to price, schedule, technical requirements,

type of contract, or other terms of a proposed contract. When

negotiations are conducted in a competitive acquisition, they take

place after establishment of the competitive range and are called

discussions.

FAR 15.306(d). Significantly, “the contracting officer must . . . indicate to, or discuss with, each

offeror still being considered for award, deficiencies, significant weaknesses, and adverse past

performance information to which the offeror has not yet had an opportunity to respond.” FAR

15.306(d)(3). It is further undisputed that the NNSA failed to conduct such discussions with SSI

prior to the NNSA’s initial award of the contract to TUVA. See Def.’s Cross-Mot. & Resp. 15-

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16 (“[W]e recognize that NNSA did not conduct such discussions regarding a significant

weakness in [SSI’s] staffing plan such that [SSI] could have addressed the significant weakness

in its [FPR].”); Def.’s Reply 2 (“In our cross-motion, we acknowledged that NNSA did not re-

open discussions with [SSI] to address a significant weakness in its Staffing Plan (Criterion 2)

that the agency identified in its evaluation of [SSI’s FPR]. . . . Thus, [SSI] did not have an

opportunity to address the significant weakness before the agency completed its initial evaluation

of proposals.”). Nevertheless, pursuant to the Blue & Gold Fleet waiver rule, SSI had an

obligation to object to this error in a timely fashion.

In Blue & Gold Fleet, the Federal Circuit affirmed the conclusion of the Court of Federal

Claims that the protester’s challenge to the terms of the solicitation, which was not raised until

after the deadline for the submission of proposals, was untimely. 492 F.3d at 1312-16. In doing

so, the Federal Circuit recognized, for the first time, a waiver rule for bid protests:

[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 Court

of Federal Claims.

Id. at 1313; accord id. at 1315; Bannum, Inc. v. United States, 779 F.3d 1376, 1380 (Fed. Cir.

2015). It found support for such a waiver rule in (1) the statutory mandate of 28 U.S.C. §

1491(b)(3) that courts are to “give due regard to . . . the need for expeditious resolution of” bid

protests, (2) the fairness rationale underlying the doctrine of patent ambiguity, (3) the GAO’s

rule that challenges to the terms of a solicitation must be brought prior to the deadline for

submitting bids or proposals, and (4) the analogous doctrines of laches and equitable estoppel in

the patent context. Blue & Gold Fleet, 492 F.3d at 1313-15. Of these rationales for the

recognition of a waiver rule, the Federal Circuit placed particular emphasis on fairness and the

expeditious resolution of bid protests:

In the absence of a waiver rule, a contractor with knowledge of a

solicitation defect could choose to stay silent when submitting its

first proposal. If its first proposal loses to another bidder, the

contractor could then come forward with the defect to restart the

bidding process, perhaps with increased knowledge of its

competitors. A waiver rule thus prevents contractors from taking

advantage of the government and other bidders, and avoids costly

after-the-fact litigation.

Id. at 1314; see also id. at 1315 (“[T]he statutory mandate of [28 U.S.C.] § 1491(b)(3) for courts

to ‘give due regard to . . . the need for expeditious resolution of the action’ and the rationale

underlying the patent ambiguity doctrine favor recognition of a waiver rule.”); DGR Assocs.,

Inc. v. United States, 690 F.3d 1335, 1343 (Fed. Cir. 2012) (“[I]f there is a patent, i.e., clear,

error in a solicitation known to the bidder, the bidder cannot lie in the weeds hoping to get the

contract, and then if it does not, blindside the agency about the error in a court suit.”).

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The Federal Circuit revisited the Blue & Gold Fleet waiver rule in Comint Systems. In

that case, the procuring agency amended the solicitation four months after the proposal

submission deadline. 700 F.3d at 1380. More than two months later, it awarded three contracts

pursuant to the amended solicitation. Id. The protester objected to the terms of the amendment,

but did not lodge a protest until after the procuring agency awarded the contracts. Id. at 1380-81.

Specifically, the protester lodged a protest with the GAO almost two weeks after the contracts

were awarded. Id. at 1380. Then, two months later—after the GAO denied its protest—the

protester filed a complaint in the Court of Federal Claims. Id.

Upon review, the Federal Circuit agreed with the government that the protester failed to

preserve its challenge to the terms of the solicitation amendment by not raising it prior to the

award of the contracts. Id. at 1381. Although it recognized that the Blue & Gold Fleet waiver

rule was not directly applicable to the circumstances before it because the solicitation was

amended after the proposal submission deadline, the Federal Circuit concluded that the reasoning

of Blue & Gold Fleet “applie[d] to all situations in which the protesting party had the opportunity

to challenge a solicitation before the award and failed to do so.” Id. at 1382; see also id.

(remarking that the policy behind the Blue & Gold Fleet waiver rule supported the extension of

the rule “to all pre-award situations”). Accordingly, it held that “assuming that there is adequate

time in which to do so, a disappointed bidder must bring a challenge to a solicitation containing a

patent error or ambiguity prior to the award of the contract.” Id.; accord id. (“[W]here bringing

the challenge prior to the award is not practicable, it may be brought thereafter.”); see also

Bannum, 779 F.3d at 1381 (holding that the protester had waived its “solicitation challenge by

not properly raising it before the close of bidding” and noting that the protester had not argued

that such a challenge would be “impractical” or that its failure to raise such a challenge was

excusable for good cause).

In the case at bar, the issue presented is whether SSI waived its right to object to the

NNSA’s conceded failure to conduct discussions regarding the significant weakness in SSI’s

FPR. As noted above, the GAO concluded that because SSI failed to raise the issue between

September 30, 2016, the date SSI learned that it was unsuccessful in its bid, and February 23,

2017, the date the NNSA issued its Revised SSD, it waived the right to raise the issue before the

GAO in its March 7, 2017 second bid protest. See AR 2958-59. The GAO focused on the fact

that SSI failed to challenge the scope of the corrective action when it was discussed by the

parties in several electronic-mail messages dated November 15, 2016. Id. at 2958-59.

Specifically, the GAO noted that when TUVA asked the NNSA whether its corrective action

would include reopening discussions, the NNSA stated: “Should the agency identify new

weaknesses and/or deficiencies in the reevaluation of proposals that it would have been obliged

to raise in the previous round of discussions, the agency will give acceptable offerors an

opportunity to address the new weaknesses and/or deficiencies in additional discussions.” Id. at

2957 (quoting the November 15, 2016 electronic-mail message from DOE to GAO). In other

words, the GAO did not find that the NNSA’s decision to take corrective action was a decision to

start the process anew. Rather, the GAO viewed the NNSA’s decision to take corrective action,

when informed by the NNSA’s electronic-mail message regarding the scope of its proposed

corrective action, as a continuation of the process that began on the date TUVA was first

awarded the contract. Thus, in response to SSI’s argument that “because the agency conducted a

full reevaluation and made a new award decision these issues are timely filed,” the GAO stated:

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The fact that the agency made a new source selection decision (and

provided the offeror with a debriefing concerning that decision)

does not provide a basis for reviving otherwise untimely protest

allegations concerning corrective action. . . . Such unwarranted

piecemeal presentation or development of protest issues

undermines our goal of affording parties the opportunity to present

their cases with the least disruption possible to the orderly and

expeditious conduct of government procurements. . . .

Accordingly, we see no reason to provide the protester here with a

“second bite at the apple,” nor condone a situation where an

agency takes corrective action in response to a protest, and the

protest then advances issues that could have and should have been

raised in the previous protest.

Id. at 2959.

This court agrees with the GAO’s reasoning and similarly concludes that SSI forfeited its

right to claim that the NNSA failed to engage in discussions with SSI regarding its assignment of

a significant weakness for SSI’s staffing plan. Viewing the NNSA’s evaluation of SSI’s

proposals as a singular process that began on March 30, 2015, the date of SSI’s initial proposal,

and continued until February 23, 2017, the date of the NNSA’s Revised SSD, it is clear that SSI

had an obligation to raise its concern over the lack of discussions in connection with its initial

GAO protest—filed on October 11, 2016, or its supplemental GAO protest—filed on November

4, 2016. Thus, by the time SSI filed it second GAO protest, on March 7, 2017, SSI’s protest was

untimely or stale.

In so ruling, this court stresses its reliance on the Federal Circuit’s expanded

interpretation and application of the Blue & Gold Fleet waiver rule in Comint Systems, wherein

it held that the prejudiced offeror was obliged to raise its objection to the amended solicitation as

early as possible and at a minimum, prior to the agency’s award of the contract:

In summary, Comint had ample time and opportunity to raise its

objections to [the amendment to the solicitation prior to the award

of the contract], but chose instead to wait and see whether it would

receive an award of the contract. Having done so, Comint cannot

now “come forward with [its objections] to restart the bidding

process,” and get a second bite at the apple. . . . Comint failed to

preserve its objections to [the amendment] by not raising them

until after the award of the contract.

700 F.3d at 1383 (quoting Blue & Gold Fleet, 492 F.3d at 1314). Thus, the court respectfully

declines to follow the reasoning in Vanguard. As noted above, in that case—which is not

binding authority—the court drew a distinction between perceived defects in the solicitation

versus perceived defects in the evaluation process. The undersigned does not view the reasoning

of the Federal Circuit in Comint Systems as being so limited. Rather, the language in Comint

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Systems expresses a clear, practical intent to expand the reach of the Blue & Gold Fleet waiver

rule to include any defects that could potentially be raised and resolved prior to the contract

award, despite the fact that in Comint Systems, the defect at issue related to an amended

solicitation and not a defect arising during the evaluation process. See also Jacobs Tech., Inc. v.

United States, 100 Fed. Cl. 179, 182 n.4 (2011) (“Although [Blue & Gold Fleet] deals with a

protester’s objections to terms of the solicitation, this Court suggests that it raises legitimate

concerns for prudent protesters challenging the solicitation process or the evaluation of offerors’

proposals.”).

2. The NNSA Did Not Misevaluate TUVA’s Corporate Experience and Past Performance

SSI next claims that the NNSA’s evaluation of TUVA’s proposal on Criterion 3

(Corporate Experience) and Criterion 4 (Past Performance) was flawed. Pl.’s Mot. 13-14. In

SSI’s view, the experience listed by TUVA was both irrelevant and inapplicable. Id. SSI

advances four arguments in support of its contention that the NNSA’s evaluation of TUVA’s

proposal was unreasonable, arbitrary, and capricious in that NNSA failed to utilize the requisite

evaluation criteria. Id. at 14-20. Conversely, defendant argues that the NNSA’s evaluation of

TUVA’s corporate experience and past performance was both rational and supported by the

record, and specifically counters each of SSI’s arguments. Def.’s Cross-Mot. & Resp. 18-24.

a. TUVA May Rely on Its Subcontractor’s Experience for Areas of the Contract the

Subcontractor Will Not Perform

SSI’s first argument is that TUVA cannot rely on the experience of one of its

subcontractors for areas of the contract that TUVA does not intend for that subcontractor to

perform. Pl.’s Mot. 14-17. SSI concedes that the NNSA may, pursuant to Criterion 3 and

Criterion 4, “‘consider [the corporate experience or past performance] of a predecessor or

affiliated company of a team member as though [the corporate experience or past performance]

were the team member’s if [it] determines that the assets or resources of the predecessor or

affiliated company will be brought to bear in performance under this contract.’” 10 Id. at 14

(quoting AR 110). SSI further concedes that the NNSA may, pursuant to these criteria, consider

the experience of an offeror’s team member as it relates to the portion of the PBWS the team

member will be working on. Id. SSI does not concede, however, that it was appropriate for the

NNSA to evaluate SAVA’s experience and attribute it to TUVA when that experience was not

relevant to SAVA’s proposed duties pursuant to TUVA’s FPR. Id.

Specifically, SSI points to the NNSA’s consideration of SAVA’s experience pursuant to

an FBI contract (contract number J-FBI-10-035). Id. at 14-17 (citing AR 1689). According to

SSI, the NNSA erroneously concluded that SAVA’s experience—as a result of the FBI

contract—was relevant to PBWS Area 5.0, which deals with FOCI support and Facility

Clearance (“FCL”) support. Id. at 16 (citing AR 2561-62). In fact, SSI contends, TUVA did not

10

SSI does not challenge TUVA’s claim that it is affiliated with SAVA, noting that both

TUVA and SAVA are “Alaska Native Corporations” and “subsidiaries to a common parent

(Akima, LLC).” Pl.’s Mot. 15; accord id. (“TUVA is presumably affiliated with SAVA due to

their common ownership.”).

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propose to the NNSA that SAVA would provide work in this area. Id. at 15-16. Rather, SSI

claims that TUVA proposed that SAVA would provide [. . .] full time equivalent (“FTE”)

positions that fall into PBWS categories 4.1, 4.2, and 4.3, id. at 15 (citing AR 1886, 1974-76),

and that TUVA would itself provide all of the personnel required to perform services pursuant to

PBWS Area 5.0. Id. at 16 (citing AR 1868, 1874). This misplaced reliance, SSI argues, caused

the NNSA to improperly assign TUVA a strength for having experience in all PBWS areas rather

than recognizing that TUVA lacked experience providing FOCI/FCL support services and

therefore merited the “Satisfactory” rating it originally received for Criterion 3. Id. at 16-17

(citing AR 923, 2561-62).

Further, SSI claims that the “NNSA was permitted only to evaluate an offeror’s corporate

experience references that were provided in Attachments L-9 and L-10 that complied with the

instructions contained in provision L-24(b)(3).” Pl.’s Reply & Resp. 6. According to SSI, the

NNSA erroneously relied upon the corporate experience references of AKIMA, LLC and

AKIMA Security, even though they were not listed in Attachments L-9 and L-10 to TUVA’s

proposal. Id. at 6-7.

Defendant claims that the RFP permitted the NNSA to consider the resources of

TUVA’s predecessors and affiliates when evaluating TUVA’s corporate experience. Def.’s

Cross-Mot. & Resp. 19-21. In addition, defendant claims that TUVA was not obliged to

designate its affiliates as subcontractors in order to demonstrate how their resources would

support TUVA’s performance of the contract. Id. at 19. According to defendant, TUVA’s only

obligation was to demonstrate how resources such as the workforce, management, or facilities of

its affiliates would be committed to the contract. Id. Furthermore, in response to SSI’s

contention that the NNSA improperly considered SAVA’s experience because TUVA’s proposal

did not indicate that a SAVA employee was to provide FOCI/FCL support, defendant argues that

the RFP allowed the NNSA to consider both SAVA’s assets and resources as well as its

employees. Id. (citing AR 110). Finally, defendant notes that when the GAO considered these

same arguments, it found “no basis to question [the NNSA’s] determination.” Id. at 21 (quoting

AR 2966).

Then, in response to SSI’s claim that it improperly considered corporate experience

references that did not comply with the terms of the RFP in that they were not listed in

Attachments L-9 and L-10, defendant notes first that “[a]lthough SAVA is both TUVA’s

subcontractor and affiliate, the agency considered TUVA’s explanation of the assets and

resources that SAVA would contribute to FOCI/FCL work as an affiliate.” Def.’s Reply 7

(citing AR 1843, 2562). Second, defendant notes that TUVA’s FPR included an updated version

of Attachment L-9, which contained additional information regarding SAVA’s corporate

experience. Id. (citing AR 1843). Third, defendant notes that TUVA’s FPR explained that not

only did AKIMA, LLC have specific FOCI/FCL experience, but that AKIMA, LLC would

provide TUVA with access to its Facility and Corporate Security Officer in addition to providing

financial and administrative resources. Id.

Pursuant to Criterion 3 of the RFP, an offeror’s corporate experience may be evaluated in

two ways. First, the NNSA stated that it “will evaluate and assess the relevancy . . . and depth of

[the offeror’s or its team member’s or subcontractor’s] experience . . . as it relates to performing

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the portions of the PBWS [the offeror proposes that it or its team member or subcontractor is] to

perform.” Id. at 110 (emphasis added). In other words, the NNSA was obliged to consider the

corporate experience of TUVA or its team members or subcontractors if it was related to PBWS

tasks that TUVA proposed it or they would perform. Second, the NNSA stated that it “may

consider the corporate experience of [a predecessor or affiliated company] as though the

experience [was the offeror’s if the NNSA] determines that the assets or resources of the

predecessor or affiliated company will be brought to bear in performance under this contract.”

Id. (emphasis added). In other words, with respect to TUVA’s predecessors or any companies

affiliated with TUVA, the NNSA was permitted, but not obliged, to consider the entity’s assets

or resources as belonging to TUVA if they would be brought to bear in the performance of the

contract.

TUVA’s FPR provided that in addition to the work performed by TUVA, work would be

performed by SAVA and Inquiries, acting as subcontractors. See id. at 1458-66. TUVA also

indicated in its FPR that SAVA possessed significant FOCI/FCL experience as a result of work

on a particular FBI contract. See AR 1843-48. In addition, TUVA indicated in its FPR that it

would receive security support, to include its Facility and Corporate Security Officer, from

AKIMA, LLC, its parent company. Id. at 1862-63. TUVA also described, for the first time in its

revised Attachment L-9, in section captioned “Additional Corporate Experience,” its ability to

rely on the expertise of AKIMA Security:

Additionally, AKIMA Security has experience supporting one of

our sister companies, AKIMA Infrastructure, LLC, that provides

support to the Sandia National Laboratory and the Lawrence

Livermore Laboratories, so they are familiar with the DOE’s

processes and procedures. AKIMA Security has expertise,

knowledge, and skills affecting the Foreign Ownership, Control, or

Influence Program (FOCI).

Id. In its revised Attachment L-9, TUVA also modified its description of the work performed by

SAVA on the FBI contract, further highlighting TUVA’s ability to satisfy the FOCI/FCL

requirements of the instant contract. See id. at 1843-44 (“SAVA has developed a breadth of

experience in identifying, investigating, analyzing, and assessing both individuals and entities

with any foreign nexus and its impact on Security and the US Intelligence Community through

its extensive work on multiple FBI/[Subject Matter Expert (“SME”)] Contract Task Orders, such

as the Security Division, Counterintelligence and Directorate of Intelligence. . . . TUVA/SAVA

believes this extensive experience with analytical and investigative work on both individuals and

other entities by their SMEs, coupled with their knowledge and ability to adhere to agency

regulations, policies and procedures, mitigates the lack of specific corporate experience

pertaining to the PBWS FOCI/FCL Task (5.0).”), 1862-63 (“TUVA receives security support, to

include our Facility and Corporate Security Officer, from our parent company, AKIMA, LLC,

that provides these services for all of its subsidiary companies. Additionally, AKIMA Security

has experience supporting one of our sister companies, AKIMA Infrastructure, LLC, that

provides support to the Sandia National Laboratory and the Lawrence Livermore Laboratories,

so they are familiar with the DOE’s processes and procedures. AKIMA Security has expertise,

knowledge, and skills affecting the Foreign Ownership, Control, or Influence Program

-26-

(FOCI).”), 1863 (“Acknowledging the DOE has its own processes and procedures for FOCI,

Team TUVA is confident our reach back to our experienced security staff coupled with the

knowledge gained from our experience investigating foreign ownership, influence, and threats to

our national security through our FBI SME contract will assist us in fully executing the

requirements of the PBWS and any resulting contract. Additionally, based on our experience

successfully staffing contracts with existing incumbent personnel, our team is confident we will

be able to retain the existing FOCI/FCL knowledge base.”).

In evaluating TUVA’s corporate experience pursuant to the RFP’s evaluation criteria, the

IPT, in its Revised IPT Report, explained:

TUVA provided Corporate Experience that is somewhat relevant

for FOCI/FCL PBWS (5.0). TUVA/SAVA had SME[s] that

supported the FBI counterintelligence and Counterespionage

missions. The SME[s] gained experience in research to determine

if foreign influence was present and posed a threat to security.

SME[s] supported the identification, analysis and dissemination of

information regarding threats to national security as a result of

foreign investments/ownership in the US. This included reviewing

applications with information related to newly acquired foreign

acquisitions, foreign ownership or influence. TUVA’s general

knowledge/expertise will assist in performing some of the

necessary services to the FOCI/FCL PBWS.

Id. Then, in her Revised SSD, the SSA explained:

TUVA received a “Good” rating for Corporate Experience.

Cumulatively, TUVA and their subcontractors provided Corporate

Experience for each of the PBWS areas. TUVA provided

Corporate Experience that was highly relevant for Program

Management, Processing and Adjudication, and somewhat relevant

for FOCI/FCL. As a result, TUVA demonstrated depth of

experience, as it relates to performing the PBWS and increases the

likelihood of successful contract performance. Overall, TUVA

received 3 significant strengths, 1 strengths and no weaknesses.

Id. at 2617. In addition, in an internal memorandum captioned “Ostensible Subcontracting

Review,” which was prepared by the NNSA during the corrective action, not only did the NNSA

indicate that FOCI/FCL experience was only relevant to a small part of the work pursuant to the

contract, but the NNSA also stated that “[e]ven if SAVA’s Corporate Experience and Past

Performance contracts had been removed from consideration under the criteria of the same name,

TUVA would still have been able to demonstrate Corporate Experience in three of the four task

areas and highly rated Past Performance.” AR 2688. Furthermore, in a footnote to this

statement, the NNSA added:

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Between TUVA and Inquiries, similarly situated small businesses

under the NAICS for this procurement, only experience under the

[FOCI] task area would have been lacking. This is a relatively

small scope of the work under this requirement for [which] both

TUVA and SSI proposed only 3 FTEs. At worst, TUVA would

have received a “Satisfactory” rating like other Offerors who were

missing experience in one area . . . , including [in] more significant

scope areas of performance. With respect to Past Performance,

between TUVA and Inquiries, there was highly rated Past

Performance such that it is unlikely the rating assigned of “Very

Good” would have been different.

Id. In sum, the NNSA assessed TUVA’s corporate experience, which included SAVA’s

“somewhat relevant” experience, in accordance with the evaluation criteria in the RFP. Its

assessment, therefore, was not irrational.

Finally, the court notes that although defendant’s description of the GAO’s conclusion

regarding the NNSA’s assessment of TUVA’s corporate experience is accurate, it is irrelevant:

When the GAO denies a bid protest, and finds the agency decision

reasonable, the GAO decision drops out of the equation when a

subsequent protest is brought in our court. See Data Mgmt. Servs.,

J.V. v. United States, 78 Fed. Cl. 366, 371 n.5 (2007) (explaining

that the GAO decision “is given no deference”); All Seasons

Constr., Inc. v. United States, 55 Fed. Cl. 175, 177 n.1 (2003). The

Court is not aware of any Federal Circuit opinions in which the

GAO’s seal of approval brings with it any enhanced deference

toward the agency decision—after these opinions note the GAO’s

denial of a protest, the GAO decisions do not figure into the

Circuit’s analysis. See, e.g., Ala. Aircraft [Indus., Inc.-

Birmingham v. United States], 586 F.3d [1372,] 1374-76 [(Fed.

Cir. 2009)]; Axiom Res. Mgmt.[, Inc. v. United States], 564 F.3d

[1374,] 1378, 1381-84 [(Fed. Cir. 2009)]; Tip Top Constr., Inc. v.

United States, 563 F.3d 1338, 1341-47 (Fed. Cir. 2009); Info.

Tech. [& Applications Corp. v. United States], 316 F.3d [1312,]

1317, 1319-24 [(Fed. Cir. 2003)]. In the admittedly rare case in

which the GAO sustains a protest but the agency chooses not to

follow that office’s recommendation, it seems the agency’s initial

procurement decision (not the decision to eschew the

recommendation) would be the topic of a resulting bid protest in

court, and the deference given the agency’s decision is not reduced

due to the GAO’s disagreement. See Delta Data Sys. Corp. v.

Webster, 744 F.2d 197, 201-02 (D.C. Cir. 1984) (Scalia, J.)

(“regard[ing] the assessment of the GAO as an expert opinion,

which we should prudently consider but to which we have no

obligation to defer” and “reject[ing the] contention that every

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decision of the GAO should be adopted and enforced by the court

unless that decision lacks a rational basis”).

CBY Design Builders v. United States, 105 Fed. Cl. 303, 339-40 (2012).

b. The NNSA’s Assessment of TUVA’s Corporate Experience Was Neither Arbitrary Nor

Capricious

Second, SSI claims that three of the experience references TUVA provided the NNSA

were not relevant pursuant to the terms of the RFP because they related to contracts that were not

similar in size to the one described in the RFP. Pl.’s Mot. 17-18 (citing AR 110). According to

SSI, the first such contract is a subcontract TUVA performed for Lynxnet, LLC in support of the

FAA (contract number DTFAWA-14-C-00023), which was valued by TUVA at $240,098.50.

Id. at 17 (citing AR 1695). Because TUVA proposed to perform the current contract for nearly

$25 million, SSI argues that the FAA contract cannot be considered pursuant to Criterion 3 or

Criterion 4 since it is not similar in “size in dollars” to the contract contemplated by the RFP. Id.

(citing AR 1933).

The other two experience references challenged by SSI are for contracts performed by

SAVA, TUVA’s subcontractor. Id. The first is SAVA’s contract with the USCP (contract

number QOU-OHRT201400003), which was valued at $[. . .]. Id. (citing AR 1697). The second

is SAVA’s contract with the Army OPMG (contract number HC1028-14-P-0271), which was

valued at $[. . .]. Id. (citing AR 1698). SSI contends that these contracts, like TUVA’s FAA

contract, are irrelevant pursuant to Criterion 3 and Criterion 4 and should not have been

considered by the NNSA. Id. at 17-18.

In addition to challenging the relevance of TUVA’s experience references, SSI contends

that the NNSA failed to explain why it deemed contracts with much lower values—such as

$[. . .]—similar in “size in dollars” to the solicited contract, which was valued at more than $32

million. Pl.’s Reply & Resp. 8-9. According to SSI, “[w]here the agency lacks a coherent and

reasonable explanation of its evaluation of proposals, the Court cannot ascertain whether the

agency’s evaluation had a reasonable basis,” and therefore “the Court cannot find that deeming

these contracts relevant was proper.” Id. at 9.

Defendant argues that TUVA’s proposal included relevant corporate experience. Def.’s

Cross-Mot. & Resp. 21-22. Noting that an agency’s “‘determination of relevance is owed

deference as it is among the minutiae of the procurement process which [courts] will not second

guess,’” id. at 21 (quoting Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901,

909 (Fed. Cir. 2013)), defendant claims that SSI “attempts to impose a restriction on the

agency’s discretion to determine relevance where none exists,” id. According to defendant, the

RFP does not define relevant contracts as those similar in dollar value. Id. In addition,

defendant avers that the NNSA’s evaluation of SSI’s corporate experience included the

consideration of four contracts that had a dollar value of less than ten percent of the instant

contract. Id. at 21-22. Lastly, defendant states that the NNSA’s decision to interpret the phrase

“similar in size” broadly was appropriate given that the contract was set aside for a small

business. Id. at 22 (citing AR 7).

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In response to SSI’s contention that the NNSA failed to provide any explanation of its

analysis with respect to the relevance of these smaller contracts, defendant claims that the

NNSA’s “key relevance consideration was the ‘degree of similarity between the experience

proposed to the work required by the [PBWS].’” Def.’s Reply 9 (quoting AR 2555). In

addition, defendant notes that the NNSA performed an “item-by-item comparison of tasks

required by the [PBWS] with specific experience obtained by TUVA (or its subcontractors).” Id.

(citing AR 2556-61).

The NNSA was required, pursuant to the corporate experience criterion of the RFP, to

“evaluate and assess the relevancy[ ] (similarity in nature, size in dollars, and complexity) and

depth of the Offeror’s (or team member’s or subcontractor’s) experience (provided in

Attachments L-9 and L-10) as it relates to performing the portions of the PBWS the Offeror (or

team member or subcontractor) is proposed to perform.” AR 110. Furthermore, pursuant to the

past performance criterion of the RFP, the NNSA was required to assess “how well the Offeror

has performed work similar to that required in this solicitation.” Id. The RFP does not define,

either in its descriptions of the criteria to be considered or anywhere else, what it means for an

offeror’s corporate experience or past performance to be similar in nature, dollar value, or

complexity. The issue therefore is whether the NNSA’s consideration of contracts that ranged in

dollar value from approximately $[. . .] to approximately $[. . .] was reasonable in light of the

fact that TUVA offered to perform the instant contract for approximately $25 million. The

answer is yes.

As defendant aptly notes, the NNSA’s discretion in this area is broad. See, e.g., Linc

Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 718 (2010) (“Thus, when evaluating an

offeror’s past performance, the SSA ‘may give unequal weight,’ or no weight at all, ‘to different

contracts when the SSA views one as more relevant than another.’” (quoting SDS Int’l, Inc. v.

United States, 48 Fed. Cl. 759, 769 (2001))); 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 SSA’s considered discretion.”). In fact, in its Revised IPT

Report, the NNSA clearly states—in the context of evaluating an offeror’s corporate

experience—that it broadly construed relevancy:

Relevancy was met if the work[ ] was similar in nature, meaning

similar to portions of the work required under the PBWS; if the

complexity of the Corporate Experience was related and aligned o

portions of the work required under the PBWS; and if the size in

dollars proposed to perform was similar (applied with broad

discretion). The thresholds of relevancy are based on the degree of

similarity between the experience proposed to the work required

by the PBWS.

AR 2555 (emphasis added).

The NNSA’s application of this standard to TUVA’s corporate experience—specifically

the NNSA’s awarding TUVA three significant strengths for its corporate experience pursuant to

Criterion 3—reflects this broad approach. Id. at 2557-62. For example, the NNSA began its

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discussion of the first significant strength by stating that TUVA provided highly relevant

corporate experience for program management. Id. at 2557. Next, the NNSA described the

tasks performed by TUVA, its affiliates, and its subcontractors. Id. Regarding TUVA/SAVA’s

corporate experience in one aspect of program management, the NNSA concluded:

TUVA/SAVA conducted studies and analyses directed by the

government. They identified efficiencies in program processes and

determined which recommendations would be implemented. They

assisted and conducted training for the government and developed

presentation and training materials in the oversight of training

deliverables. They provided coaching and advisory services to

achieve improvement in functions and operations. Their PM

interfaced with the [contracting officer] on a regular basis, as well

as the Contracting Officer Technical Representative (COTR). The

PM managed all phases of the subject matter expert’s work flow,

quality and program deliverables. The PM provided risk

assessment and maintained accountability for quality

assurance/quality control schedules, cost and contract performance.

The PM prepared monthly invoices and formal status

reports/meeting for the FBI COTR. Contract # J-FBI-10-035

Id. Therefore, that the NNSA considered contracts that were not performed solely by TUVA

does not render the agency’s evaluation in this regard arbitrary or capricious.

In addition to the NNSA’s broad discretion to assess the relevancy of an offeror’s

corporate experience, the NNSA also has broad discretion to determine whether an offeror’s

previous contracts are similar in “size in dollars” to the solicited contract. For example, in the

three PBWS areas of Program Management, Processing, and Adjudication, the NNSA relied

upon Inquiries’ $[. . .] DOD prime contract and Inquiries’ $[. . .] million DHS first level

subcontract. See id. at 2556-57. In doing so, the NNSA did not merely acknowledge that

Inquires had experience in those areas, but it specifically identified the tasks performed. Thus, in

the area of Program Management, the NNSA wrote the following regarding Inquiries’ work on

the DOD contract:

Inquiries developed and maintained quality control plans. They

were responsible for the overall management of the contract and

personnel. They handled report generation and analysis, briefings,

compiling training manuals and work instructions and SOP

documents. They ensured all personnel were fully trained and

qualified to meet or exceed the government’s timeliness standards,

quality standards and deliverables. They were responsible for the

execution of all tasks, program management and subcontractor

management.

Id. at 2558. The NNSA also provided the following comment regarding Inquiries’s work on the

DHS contract: “Inquiries provided direct customer service and quality control. Their active site-

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lead oversaw day-to-day operations of contractor staff, who directly supported operations within

the Personnel security Division.” Id. Therefore, that the NNSA considered contracts that were

less than 10% of the solicited contract does not render the agency’s evaluation in this regard

arbitrary or capricious.

c. SSI Was Not Prejudiced by the NNSA’s Consideration of TUVA’s Experience on

Projects Where TUVA Was Not the Prime Contractor

Third, SSI complains that three of the experience references TUVA lists in its proposal

were not relevant pursuant to Criterion 3 and Criterion 4 because TUVA was not the prime

contractor on those contracts. Pl.’s Mot. 18-19. SSI notes that the RFP stated that an offeror’s

corporate experience contracts “‘shall include federal customers only.’” Id. at 18 (quoting AR

98). In addition, SSI notes that during the RFP Q&A period, the NNSA clarified that activities

performed “in accordance with federal regulations”—to include “work for other subcontractors

and [Maintenance and Operations (“M&O”)] contractors that support DOE/Federal facilities”—

would not be considered. Id. (quoting AR 210). Thus, SSI concludes, only experience

references in which TUVA acted as the prime contractor to a federal government agency may be

considered, id., and therefore, the NNSA should not have considered the following contracts in

its assessment of TUVA’s proposal: (1) contract number DTFAWA-14-C-00023, because

TUVA acted as a subcontractor pursuant to Lynxnet’s prime contract with the FAA, id. (citing

AR 98); (2) contract number POI321000013, because SAVA acted as a subcontractor pursuant to

another entity’s prime contract with the Army OPMG, id. (citing AR 795, 1698); and (3) contract

number HSSCCG-08-D-00009, because Inquiries acted as a subcontractor pursuant to Alutiiq

Business Services, LLC’s prime contract with the DHS, id. at 18-19 (citing AR 802, 1706).

Defendant claims that the RFP permits consideration of experience obtained by the

offerors and their subcontractors as both prime and subcontractors on federal contracts. Def.’s

Cross-Mot. & Resp. 22-23. According to defendant, SSI misinterprets the NNSA’s response

during the Q&A period. Id. at 22. Defendant contends that when the NNSA answered “no” to a

request to allow consideration of “all activities that are in accordance with federal regulations to

include commercial facilities that are governed under [DOE] guidelines and work for other

subcontractors and M&O contractors that support DOE/Federal facilities,” id. at 22 (quoting AR

210), it only intended to preclude consideration of insufficiently relevant work experience, e.g.,

work experience that complied with DOE/Federal guidelines for commercial facilities, id. at 22-

23. In defendant’s view, “[t]he RFP—and evaluation—focused on the relevancy of the

experience, not the offeror’s role as the prime contractor or subcontractor.” Id. (citing AR 110,

2555-62). Defendant further claims that “TUVA’s proposal does not rely on contracts with

commercial facilities, other subcontractors, or M&O contractors.” Def.’s Reply 10.

As SSI contends, the RFP provides that, when completing Attachment L-9, the

“Corporate Experience & Performance Self-Assessment Form,” offerors were instructed to list

contracts that “include federal customers only.” AR 98. However, the RFP does not indicate

whether those contracts may only be ones in which the offeror acted as the prime contractor or

whether federal contracts for which the offeror acted as the subcontractor may be listed as well.

Because this provision within the RFP “is susceptible to more than one reasonable

interpretation,” Banknote, 365 F.3d at 1353, the solicitation is ambiguous. Therefore, the court

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must determine whether that ambiguity is latent or patent. See Grumman Data Sys., 88 F.3d at

997. In this case, SSI was not presented with “facially inconsistent provisions,” Stratos Mobile

Networks USA, LLC, 213 F.3d at 1381, which would have placed it on notice and prompted it to

make inquiries.

That said, based on the plain language of the Q&A exchange concerning relevant

experience, it is clear that all offerors received clarification from the NNSA that (1) activities

relating to commercial facilities governed by DOE guidelines would not be considered, and (2)

work for other subcontractors and M&O contractors in support of DOE/Federal facilities would

not be considered. Thus, despite defendant’s claim that the NNSA only intended to preclude

consideration of work performed on commercial facilities, the NNSA actually precluded

consideration of two types of experience: work for commercial facilities and “work for other

subcontractors and M&O contractors in support of DOE/Federal facilities.” AR 210. Thus, the

Q&A exchange does not clarify the latent ambiguity.

The next question is whether SSI relied on the ambiguity. See NVT Techs., 370 F.3d at

1162. On this point, the record is unclear. Although SSI does not explicitly state that it relied on

the ambiguity, it did not list any contracts on its “Corporate Experience & Performance Self-

Assessment Form,” in which it was the subcontractor. See id. at 1161-80. In any event, even if

SSI relied on the ambiguity, and the ambiguity must therefore be construed against the NNSA,

SSI has not shown that it was prejudiced by such reliance. In other words, without more, SSI

cannot argue that TUVA’s receipt of a “Good” rating with respect to its corporate experience, as

compared to SSI’s receipt of an “Excellent” rating, was sufficiently prejudicial to SSI such that

the NNSA’s decision to award the contract to TUVA must be deemed arbitrary, capricious, and

without basis. Moreover, SSI cannot argue that absent this error in the NNSA’s evaluation of the

various proposals, SSI would have been awarded the contract.

d. The NNSA Did Not Misevaluate TUVA’s Past Performance Pursuant to Criterion 4

Finally, SSI argues that the NNSA misevaluated TUVA’s past performance pursuant to

Criterion 4. Pl.’s Mot. 19-20. Specifically, SSI contends that the NNSA’s assessment was

flawed because it erroneously deemed all of TUVA’s and its subcontractors’ experience

references relevant, even though three of the contracts—one of TUVA’s and two of SAVA’s—

were not relevant. Id. This led, SSI avers, to the NNSA improperly assigning TUVA three

strengths for Criterion 4 when it should only have assigned two—one strength for its past

performance and one strength for its ability to recruit and retain personnel. Id. (citing AR 2563-

69). SSI concludes:

These errors impacted the evaluation of offerors and the final

tradeoff decision, as SSI was assigned a rating of Very Good under

Criterion 4 based on its having one significant strength, three

strengths, and no weaknesses, including receiving Exceptional and

Very Good ratings on the incumbent contract. It is likely that,

without three of its assigned strengths, TUVA would not be

viewed as favorably when the offerors were compared, and TUVA

would be found to be Satisfactory instead of Very Good under

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Criterion 4.

Id. at 20 (citation omitted).

Defendant argues that the NNSA’s evaluation of TUVA’s past performance was rational.

Def.’s Cross-Mot. & Resp. 23-24. First, with respect to SSI’s contention that TUVA should

have received a “Satisfactory” rather than a “Very Good” rating because three of the contracts

the NNSA considered were not relevant, defendant contends that SSI fails to acknowledge the

broad discretion afforded the agency. Id. Second, with respect to SSI’s claim that the NNSA

considered TUVA’s past performance on contracts that were smaller in size and value, defendant

counters that despite the differences, these contracts were nevertheless still relevant. Id. at 24

(citing AR 2567). Third, defendant claims that the RFP does not, as SSI asserts, prohibit

consideration of work TUVA performed for a federal agency as a subcontractor. Id. Finally,

defendant argues that SSI has not offered any concrete evidence to support its contention that the

NNSA’s assessment of TUVA’s past performance ultimately affected its best value trade-off

decision. Id. In the NNSA’s view, not only was SSI afforded an advantage in the category of

past performance, but even if SAVA’s experience had not been considered, TUVA and Inquiries

were rated highly for past performance and thus it is likely that TUVA’s past performance would

still have been rated “Very Good.” Id. (citing AR 2688).

SSI quarrels with defendant’s conclusion that it is unlikely that errors in the NNSA’s

assessment of TUVA’s past performance affected the ultimate award decision. Pl.’s Reply &

Resp. 11-12. According to SSI, defendant’s argument “ignores that the RFP provided for a best

value analysis, where the evaluation factors were more important than price, but as technical

proposals became close or similar in merit, the evaluated cost is more likely to be a determining

factor.” Id. (citing AR 109). Thus, SSI contends that if the NNSA ultimately concluded that

SSI’s proposal was superior to TUVA’s proposal with respect to past performance, “the

magnitude of that superiority is critical to the best value tradeoff.” Id. at 12.

Because SSI’s arguments regarding NNSA’s evaluation of TUVA’s proposal under

Criterion 4 mirror those SSI advanced with respect to Criterion 3, the court’s analysis of those

arguments is also the same. See Section III.B.2.b-c, supra. In a nutshell, not only did the NNSA

possess broad discretion to evaluate TUVA’s and SSI’s past performance, to include the

consideration of contracts smaller in size and value than the instant contract, but more

importantly, SSI has once more failed to offer any evidence that but for the NNSA’s

consideration of TUVA’s and its subcontractor’s experience references, SSI would have been

awarded the contract. As noted in the RFP, “[i]n determining the best value to the Government,

Evaluation Criteria 1-4, when combined, are significantly more important than cost/price . . . .

The Government is more concerned with obtaining a superior technical proposal than making an

award at the lowest evaluated total cost to the Government (including fee).” AR 109. Thus,

although SSI suggests that TUVA’s receipt of a lower rating for past performance would have

affected the outcome of the NNSA’s calculus, such a broad statement cannot be made in this

case, given the NNSA’s use of a trade-off analysis. In other words, even if TUVA had only

received a “Satisfactory” rating pursuant to Criterion 4, it still would have received higher

ratings in three of the four criteria (Criterion 1, Criterion 2, and Criterion 5), two of which were

deemed more important than Criterion 4. Lastly, although SSI’s contention regarding the

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significance of the magnitude of SSI’s superiority in the area of past performance is sound, it is

no substitute for concrete evidence that but for TUVA’s receipt of a “Very Good” rating in this

category, SSI would have been awarded the contract.

3. The NNSA’s Cost Realism Analysis Was Rational

Plaintiff’s final claim concerns the NNSA’s cost realism analysis. The contract that the

NNSA sought to award is a cost reimbursement contract. Thus, as noted above, the RFP

required a cost realism analysis “to ensure that the final agreed-to price is fair and reasonable.”

FAR 15.404-1(a). A cost realism analysis is

the process of independently reviewing and evaluating specific

elements of each offeror’s proposed cost estimate to determine

whether the estimated proposed cost elements are realistic for the

work to be performed; reflect a clear understanding of the

requirements; and are consistent with the unique methods of

performance and materials described in the offeror’s technical

proposal.

FAR 15.404-1(d)(1). Agencies tasked with performing such an analysis must make appropriate

probable cost adjustments such that an offeror’s proposed cost best reflects the estimated cost of

performance. FAR 15.404-1(d)(2)(i). Thus, agencies must consider “the information available”

and must “not make ‘irrational assumptions or critical miscalculations.’” Univ. Research Co.,

LLC v. United States, 65 Fed. Cl. 500, 509 (2005) (quoting OMV Med., Inc. v. United States,

219 F.3d 1337, 1344 (Fed. Cir. 2000)). In addition, agencies must “make a good faith effort to

consider material facts that a reasonably prudent person would consider relevant to the

procurement decision.” United Payors & United Providers Health Servs., Inc. v. United States,

55 Fed. Cl. 323, 329 (2003).

To overturn an agency’s cost realism determination, a protester must establish that the

agency’s decision lacked a rational basis. JWK Int’l Corp. v. United States, 49 Fed. Cl. 371, 393

(2001); see also CTA, Inc. v. United States, 44 Fed. Cl. 684, 693 (1999) (“‘Decisions on cost

realism are within the agency’s sound discretion and expertise, and the judgment will not be

overturned absent any rational basis.’” (citation omitted)). While an agency’s cost realism

analysis need not have been performed with “impeccable rigor” to be rational, OMV Med., 219

F.3d at 1344, the analysis must reflect that the agency considered the information available and

did not make “irrational assumptions or critical miscalculations.” Id.; see also United Payors &

United Providers Health Servs., 55 Fed. Cl. at 329 (“‘Because the agency is in the best position

to make this cost realism determination, our review is limited to determining whether its cost

evaluation was reasonably based and not arbitrary.’” (citation omitted)). Finally, in the context

of a best value procurement, the court’s consideration of an agency’s decision is particularly

deferential. See Galen Med. Assocs., 369 F.3d at 1330.

Because “contracting officers are vested with wide discretion with regard to the

evaluation of bids,” Labat-Anderson, Inc. v. United States, 42 Fed. Cl. 806, 846 (1999), and are

entitled to “broad discretion . . . to determine whether a proposal is technically acceptable, [a]

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plaintiff has an unusually heavy burden of proof in showing that the determination made in this

regard was arbitrary and capricious.” Cont’l Bus. Enters. v. United States, 452 F.2d 1016, 1021

(Ct. Cl. 1971).

According to SSI, the NNSA neglected to perform a reasonable cost realism analysis of

TUVA’s proposal. Pl.’s Mot. 20-34. SSI advances four arguments in support of its contention.

Id. Defendant counters that the NNSA’s cost realism analysis had a rational basis. Def.’s Cross-

Mot. & Resp. 25-35. According to defendant, because the NNSA was given broad discretion to

devise its own methodology for analyzing cost proposals, the court’s review therefore is

necessarily “‘very narrow.’” Id. at 25 (quoting McConnell Jones Lanier & Murphy LLP v.

United States, 128 Fed. Cl. 218, 236 (2016)). Defendant also urges the court to give prudent

consideration to the GAO’s conclusion that the NNSA’s cost realism analysis was reasonable

and supported by the record. Id. at 26 (citing AR 2959-61 and McConnell Jones Lanier &

Murphy, 128 Fed. Cl. at 236 n.9). For the reasons set forth below, plaintiff fails to meet its

burden.

a. The NNSA’s Evaluation of TUVA’s Direct Labor Rates Was Rational

First, SSI avers that the NNSA failed to appropriately account for what SSI characterizes

as TUVA’s unrealistically low direct labor rates. Pl.’s Mot. 22-26. Specifically, SSI contends

that the NNSA should have realized that TUVA’s proposed price was much too low to support

the technical approach described in TUVA’s proposal. Id. In support of its position, SSI argues

that a simple comparison of the direct labor rates proposed by SSI with those proposed by

TUVA, for [. . .] labor categories, demonstrates that TUVA’s proposed direct labor costs are

[. . .]% lower than SSI’s. Id. at 23. SSI also suggests that the NNSA should have appreciated

that TUVA’s commitment to retaining a minimum of [. . .]% of the incumbent personnel, AR

1679, at comparable labor rates, id. at 2017, was inconsistent with TUVA’s concurrent promise

of low direct labor rates. Pl.’s Mot. 23-24. According to SSI, “[i]t is well-established that a cost

realism analysis requires consideration of whether the offeror’s proposed cost reflects a clear

understanding of the requirements to be performed, and is consistent with the unique methods

and materials described in the offeror’s technical proposal,” id. at 24 (citation omitted), and

although the NNSA appropriately concluded “that TUVA’s rates were too low to retain [. . .]%

of the incumbent workforce, the NNSA did not assign a weakness,” id. (citing AR 2573). Had

the NNSA conducted a reasonable cost realism analysis, SSI adds, the NNSA would have made

a probable cost adjustment instead of simply accepting TUVA’s low proposed direct labor rates.

Id. at 25-26 (citing AR 2571).

Defendant claims that the NNSA reasonably evaluated TUVA’s direct labor rates. Def.’s

Cross-Mot. & Resp. 26-30. Specifically, defendant notes that the NNSA (1) used several

techniques to evaluate TUVA’s direct labor rates; (2) appropriately considered TUVA’s proposal

to maintain [. . .]% of the incumbent staff since TUVA never proposed to retain those individuals

at their incumbent salaries; and (3) properly evaluated the realism of TUVA’s proposed direct

labor rates in accordance with TUVA’s proposal since TUVA proposed the retention of [. . .]%

of NNSA’s benchmark of [. . .] FTEs. Id. at 26-30.

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In response to defendant’s defense of the NNSA’s analysis of TUVA’s direct labor rates,

SSI contends that the NNSA’s methodology is “insufficient.” Pl.’s Reply & Resp. 13.

According to SSI, the NNSA’s standard deviation analysis, which compared TUVA’s average

total direct labor rates with SSI’s average total direct labor rates—for both management and

nonmanagement positions—does not satisfy the requirements of FAR 15.404-1(d)(1). Id. at 13-

14. Rather, SSI argues that the NNSA should have performed such an analysis for each labor

category. Id. at 14. In addition, SSI claims that although the NNSA attempted to determine

whether TUVA could retain at least [. . .]% of the incumbent personnel at its proposed direct

labor rates, the NNSA “largely disregarded the results of its analysis.” Id. In SSI’s view, the

NNSA’s Revised IPT Report demonstrated that to reach [. . .]% retention, TUVA would have

had to raise the rates for certain positions and lower the rates for others. Id. at 15. Thus, SSI

contends, the NNSA should have made a “probable cost adjustment” to TUVA’s proposal. Id.

Finally, SSI claims that the NNSA failed to properly analyze TUVA’s proposal with respect to

retaining specific incumbent personnel at proposed rates. Id. at 16. In this regard, SSI claims

that the NNSA should have conducted a proper cost realism analysis to determine whether

TUVA’s technical approach aligned with its cost proposal. Id. at 16-17.

In a final defense of the NNSA’s analysis of TUVA’s proposal to retain [. . .]% of the

incumbent staff, defendant provides a detailed explanation of the NNSA’s analysis. Def.’s Reply

10-13. According to defendant, for each of the [. . .] labor categories identified in TUVA’s

proposal, the NNSA “tested the feasibility of maintaining [. . .] incumbent employees by

comparing (1) TUVA’s proposed rate for each labor category in the Staffing Plan with (2) the

incumbent rate for that category under multiple scenarios.” Id. at 10 (citing AR 2573). In one

scenario, the NNSA considered what would happen if TUVA did not retain any of the [. . .],

thereby retaining [. . .] incumbents with [. . .] new hires. Id. The NNSA concluded that at this

[. . .]% retention rate, there was no underbidding or lack of cost realism. Id. (citing AR 2573).

In an alternative scenario, the NNSA considered what would happen if TUVA retained, in a

given labor category, only those employees whose proposed direct labor rates were within

[. . .]% of the incumbent’s average rate in that category. Id. at 11 (citing AR 2573 and Tab 61).

Pursuant to this scenario, the NNSA found that TUVA would not retain any [. . .], or [. . .],

thereby retaining [. . .] incumbents with [. . .] new hires—a [. . .]% retention rate. Id. (citing AR

2573). Once more, the NNSA concluded that there was no lack of cost realism. Id. The NNSA

“also determined that such a scenario presented low risks because if TUVA increased direct

labor rates for [. . .] to incumbent rates, TUVA could likely meet its [. . .] percent retention goal

at an increased cost of only $[. . .]—less than [. . .] percent of TUVA’s proposed direct labor

costs for one year.” Id. (citing AR 2573). In response to SSI’s argument that the NNSA should

have determined whether, under TUVA’s proposal, certain incumbent personnel could be

retained, the agency contends that there was no need to do so since it had previously considered a

scenario in which TUVA did not retain individuals whose rates were [. . .]% less than incumbent

rates. Id.

Turning to the Revised IPT Report itself, the NNSA’s detailed explanation of its

evaluation of TUVA’s direct labor rates amply demonstrates that its analysis was thorough and

that its conclusions were rational. The NNSA’s price analyst began by assessing how close

TUVA’s proposed direct labor costs were to its probable direct labor costs:

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TUVA proposed $[. . .] in direct labor costs, which represents

[. . .]% of the total proposed price. TUVA estimated salaries by

using [. . .]. DCAA verified the proposed non Service Contract

Act (SCA) labor rates to labor rates in an updated salary ranges

document prepared by the contractor and to actual salaries in

payroll. DCAA determined that proposed labor rates are within

the [. . .]. The Government compared the proposed SCA labor

category rates to the Department of Labor (DOL) Wage

Determination No. 2005-2361, Revision 18, dated January 5, 2016

and all labor rates met or exceed SCA labor rates. The analyst

used Standard Deviation (SD) analysis and independent

assessment to evaluate the realism of proposed labor rates. SD was

calculated by isolating Management categories for all Offerors. A

second SD factor was also calculated for all other (non-

management) average rates by offeror. Applying the SD approach,

the rates fall slightly outside one SD of the respective mean. The

variance for management labor does not result in underbidding.

The variance for ‘other’ categories is approximately 1% less than

the SD range or 4% less than the mean. Based on DCAA’s review

and the minimal variances disclosed in the SD analysis no apparent

understatement of labor rates is found. TUVA proposed [. . .]%

annual escalation, which is in line with the market rate proposed by

other contractors under this solicitation. Escalation is proposed by

program year. The probable direct labor cost is the same as the

proposed.

AR 2571.

Next, the NNSA’s price analyst considered the viability of TUVA’s promise to retain

[. . .]% of the incumbent staff. Id. at 2573. First, she compared TUVA’s and SSI’s direct labor

rates and found that “TUVA’s average total rate was $[. . .] or [. . .]% less than SSI[’s].” Id.

Second, she isolated TUVA’s direct labor rates for management from the average rates and

found that TUVA’s average total rate for management was “[. . .]% or $[. . .] higher” than SSI’s

and that TUVA’s average total rate for nonmanagement was “within [. . .]%” of SSI’s. Id.

Third, she concluded that although TUVA’s total proposed direct labor rate was [. . .]% lower

than SSI’s, the majority of the difference was attributable to the fact that TUVA proposed [. . .]

direct productive labor hours per annum, while SSI proposed [. . .]. Id. When the NNSA’s price

analyst adjusted TUVA’s direct labor rate to reflect this difference, she concluded that TUVA’s

direct labor rate was [. . .]% higher than indicated in TUVA’s FPR ($[. . .] vs. $[. . .]). Id. In

other words, after she modified TUVA’s cost proposal such that she was able to conduct a true

comparison of TUVA’s and SSI’s direct labor rates, she found that TUVA’s rates were [. . .]%

higher. Id. However, she explained that she did not consider any further adjustment warranted

because TUVA never claimed that it would retain 100% of the incumbent workforce. Id. The

NNSA’s price analyst further noted that if TUVA did retain certain individuals from the

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incumbent workforce, NNSA was not required to pay 100% of their salaries. 11 Id.

In addition to taking the above steps, because the NNSA’s price analyst noticed that there

were significant ranges within the incumbent rates for processors (between $17.50 and $49.96

per hour, for an average hourly rate of $21.39) and adjudication (between $24.50 and $49.93 per

hour, for an average hourly rate of $30.22); and that lead positions could earn as much as double

the amount paid entry level employees, she performed a separate analysis of each labor category.

Id. Noting that to satisfy its promise of [. . .]% retention, TUVA would have to retain [. . .] FTEs

([. . .]% of the incumbent’s current staffing level of [. . .] FTEs), 12 she “noted that the Program

Analyst’s and lead positions would potentially be hard to maintain within budgeted costs while

the remaining incumbent labor [was] feasible.” Id. She then concluded that, if an adjustment

was made to [. . .] by 6%, the proposal was realistic. Id. Lastly, the NNSA’s price analyst

concluded that there was “no evidence of underbidding” in TUVA’s proposal. Id. As noted

11

In its opposition to SSI’s motion for judgment on the administrative record, defendant

relies on FirstLine Transportation Security, Inc. v. United States, 119 Fed. Cl. 116 (2014), in

support of its argument that TUVA’s proposal to retain [. . .]% of the incumbent labor force was

reasonable: “The agency considered the protester’s argument, but determined that the

compensation package described by the awardee, along with its independent consideration of

employee retention rates at other airports, sufficiently mitigated the risk that the awardee would

be unable to meet its retention plan.” Def.’s Cross-Mot. & Resp. 28 (citing FirstLine, 119 Fed.

Cl. at 130). SSI challenges defendant’s reliance on FirstLine on the grounds that although the

case involved an incumbent retention plan, it did not involve a cost realism analysis: “Instead,

the court’s analysis [was] focused on the reasonableness of the agency’s evaluation under two

technical evaluation factors unrelated to cost or price.” Pl.’s Reply & Resp. 16. In response,

defendant notes that although the court in FirstLine did not specify whether the agency’s analysis

was conducted as part of a cost realism analysis, the rationale behind both is the same—“to

ensure that an offeror’s technical approach is feasible at the proposed cost.” Def.’s Reply 12.

The court agrees. In FirstLine, the court held that the agency’s evaluation of the successful

offeror’s employee retention plan was rational. 119 Fed. Cl. at 129. Specifically, the court noted

the agency considered all aspects of the awardee’s plan, such as its compensation package, its

employee incentive program, and comparable retention rates at other similar facilities: “Rather,

the administrative record demonstrates that [the agency] considered all aspects surrounding [the

awardee’s] proposed retention rate and still found no risk.” Id. at 130 (emphasis added).

Furthermore, although the words “cost” or “price” do not appear in the court’s analysis, the

court’s description of the protester’s arguments clearly references cost and price: “According to

Plaintiff, Akal will not be able to retain [* * *] percent of the existing workforce, because it

proposed compensation packages to employees [that are] worth less than what FirstLine

currently offers to its screeners. . . . [Plaintiff] argue[s] that wage and hour cuts ‘materially

impact morale and retention,’ and it is patently irrational to conclude that these cuts can be

mitigated by the strategies Akal proposed.” Id. at 129. Thus, that the FirstLine court did not

indicate that its review was a cost realism analysis is immaterial. As defendant rightly contends,

the purpose behind the agency’s review was the same—to make sure the proposed workforce

(one element of which is compensation) was capable of performing the contract.

12

In its FPR, TUVA proposed [. . .] FTEs. AR 2573.

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above, this conclusion was affirmed by the SSA in her February 23, 2017 Revised SSD. See AR

Tab 38 at 2611, 2618. Thus, there is no evidence that NNSA’s evaluation of TUVA’s direct

labor rates was anything other than rational.

b. The NNSA’s Evaluation of TUVA’s Indirect Rates Was Rational

Second, SSI contends that the NNSA erred in its consideration of TUVA’s indirect labor

rates, which includes fringe benefits, labor overhead, and general and administrative (“G&A”)

costs. Pl.’s Mot. 26-27. According to SSI, TUVA proposed a “robust and competitive benefits

package,” which included “[. . .].” Id. at 26 (citing AR 1681-82, 1832, 1955-56). SSI further

notes that TUVA also promised to provide “[. . .],” all of which constitute additional indirect

labor costs. Id. (citing AR 1464, 2067). Yet, SSI argues, TUVA only “proposed a fringe rate of

[. . .]%, a labor overhead rate of [. . .]%, and a G&A rate of [. . .]%.” Id. (citing AR 1935). Had

the NNSA performed a proper cost realism analysis, SSI contends, it would have recognized that

these rates were far too low to cover the benefits TUVA proposed in its proposal. Id. In SSI’s

view, the fact that these expenses were not discussed in the NNSA’s Revised IPT Report renders

it unreasonable. Id. (citing AR 2571-72).

Defendant claims that the NNSA reasonably evaluated TUVA’s indirect labor rates.

Def.’s Cross-Mot. & Resp. 30-31. According to defendant, the NNSA’s reliance on TUVA’s

explanation that it would have access to the resources of AKIMA, LLC, its parent company—

thereby reducing TUVA’s costs for [. . .]—was appropriate. Id. at 30. Defendant further

contends that not only did outside information provided by the DCAA confirm the NNSA’s

conclusion that TUVA’s indirect labor rates were reasonable, id. at 30 (citing AR 2571), but the

GAO’s review of the NNSA’s cost analysis found “nothing objectionable,” id. (citing AR 2961).

SSI challenges defendant’s reliance on the DCAA’s approval of TUVA’s indirect labor

rates. Pl.’s Reply & Resp. 17. According to SSI, the DCAA was not privy to TUVA’s proposal

and its conclusion was based on a comparison of TUVA’s proposed indirect labor rates with

TUVA’s Forward Budget Submission. Id. (citing AR 4513-14). SSI further argues that in its

reliance on the DCCA’s analysis, the NNSA failed to conduct an independent evaluation of

TUVA’s indirect labor costs to determine whether they were reasonable. Id. at 17-18.

Defendant replies by noting once more that the NNSA has broad discretion to rely on both

TUVA’s claim that it had access to the financial and administrative resources of its parent

company and the DCAA’s analysis. Def.’s Reply 13-14.

The NNSA’s conclusions that there was “no evidence of underbidding,” AR 2571, and

that TUVA’s “proposed indirect rates [were] realistic and incorporated into the probable cost,”

id., were reasonable. First, the NNSA noted that TUVA’s proposed indirect labor costs of [. . .],

which constituted [. . .]% of its total proposed price, was “based on FY16 budgeted rates adjusted

for the impact of this contract.” AR 2571. In addition, although the NNSA noted that the

DCAA had determined, [. . .], it decided not to make an adjustment because “[. . .].” Id.

Significantly, the NNSA further found that any variances between TUVA’s proposed price and

the probable cost was “due to a decreased base, which excludes Inquiries rounding amounts,” id.,

amounts that the NNSA excluded from its probable cost figure because they were viewed as

contingency fees, id. at 2573; see also id. at 2572-73 (“Inquiries estimated indirect rates using its

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current business forecast. The cost proposal narrative provides the previous 3 year actual rates.

It should be noted that the actual experienced G&A rate for Inquiries is significantly higher than

the proposed rate. Inquiries’ narrative cost proposal indicated that the rate is proposed as a

ceiling or CAP rate. If awarded TUVA should include the proposed ceiling of [. . .]% within

Inquiries’ contract. Inquiries proposed a fee of [. . .]%. The proposed cost summary includes a

line for ‘rounding from the summary sheet to the Prime.’ The rounding amounts total to over

$[. . .]. The [government’s probable cost] excludes this amount as it is considered a contingency.

The [probable cost] for Inquiries results in a variance of $[. . .].”). The court cannot quarrel with

the NNSA’s exclusion of a contingency in its review of an offeror’s proposal, as these amounts

will necessarily vary from offeror to offeror and do not reflect probable costs to the government.

Next, as noted by the GAO in its review of SSI’s protest, AR 2961, TUVA’s proposal

indicated that TUVA would have access to the resources of its parent company:

TUVA has access to technical and administrative reach back to its

parent company, AKIMA, LLC. [. . .] Additionally, we are able to

offer lower indirect costs by virtue of a shared services platform

that provides various management services directly to our

company.

Id. 7. While is not clear from TUVA’s proposal what the dollar value of the various

management services—to include [. . .], it was not unreasonable for the NNSA to take into

account the resources of TUVA’s parent company when assessing TUVA’s proposed indirect

labor costs.

Furthermore, given the NNSA’s broad discretion in conducting a cost realism analysis in

the context of a best value procurement, it is of no moment that the NNSA chose not to conduct

its own evaluation of TUVA’s indirect labor rates. In addition, that the NNSA’s conclusions

regarding TUVA’s indirect labor rates were in part based on information provided by the DCAA

does not render those conclusions less valid. Lastly, although the court notes that the GAO

found “nothing objectionable” in the NNSA’s cost analysis of TUVA’s proposal, as the court

stated above, it owes no deference to the findings of the GAO. See Section III.B.2.a, supra.

c. The NNSA’s Evaluation of TUVA’s Staffing Plan Was Rational

Third, SSI advances a two-part argument in support of its contention that the NNSA’s

evaluation of TUVA’s staffing plan was unreasonable. Pl.’s Mot. 27-33. Defendant counters

that the NNSA’s evaluation of TUVA’s staffing plan was reasonable because TUVA’s cost

proposal was consistent with its staffing plan. Def.’s Cross-Mot. & Resp. 31-35.

i. The NNSA Did Not Ignore any Risks Associated With TUVA’s Staffing Plan

In the first part of its argument, SSI contends that, although the NNSA initially identified

several problems with TUVA’s staffing plan, it did not account for these deficiencies in its final

assessment. Pl.’s Mot. 27-29. Specifically, SSI notes that the NNSA at first found that (1)

TUVA “failed to assign job duties for some of the PBWS functions within the proposed labor

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categories,” AR 863; (2) TUVA “failed to assign job duties in four entire subsections within the

PBWS,” id.; (3) TUVA did not provide enough information for the NNSA to determine whether

the total number of hours proposed, by labor category, were sufficient to complete the work

described in the PBWS, id., and (4) there were material differences between TUVA’s proposed

cost and the IGCE, and between TUVA’s total direct labor hours and the IGCE, id. at 864. SSI

also notes that TUVA responded to these criticisms by making changes to its technical proposal,

to include additions to its staffing plan narrative. Id. However, SSI claims, TUVA did not adjust

its overall staffing plan or cost proposal. Pl.’s Mot. 27. In other words, SSI argues that although

TUVA added tasks to various positions, it never adjusted the number of FTEs or direct labor

hours required to perform that work and instead reduced its proposed price for work performed

during the base year. Id. at 29. In SSI’s view, the revisions TUVA made to its proposal actually

increased the risks to the NNSA, risks the NNSA ignored in its evaluation of TUVA’s FPR, thus

rendering the NNSA’s ultimate assessment of that proposal unreasonable. Id.

According to defendant, TUVA appropriately added information to its staffing plan

regarding the job duties within certain labor categories or PBWS functions in response to the

NNSA’s comments. Def.’s Cross-Mot. & Resp. 31 (citing AR 1825-28). Defendant argues that

the addition of this information did not require any further adjustment to TUVA’s staffing plan

because the NNSA became satisfied that “employees were assigned to all PBWS functions.” Id.

(citing AR 2550). In addition, defendant notes that although SSI responded to the same critique

from the NNSA by not only supplementing its staffing plan narrative but also by adding two

FTEs to Processing and removing two FTEs from Adjudication in its FPR, TUVA had no

obligation to do the same. Id. (citing AR 1147). Defendant further claims that the reason why

the NNSA was not concerned with the “minor cost reduction” in TUVA’s FPR was because

TUVA explained that the reduction was due to a change in TUVA’s indirect rates since the

submission of its first proposal: “TUVA’s final proposal revision indicates that the reduction

merely reflects changes to indirect rates (e.g. [. . .]) given the passage of time since the

submission of its first proposal; the proposed labor hours and rates remained the same.” Id. at 32

(citing AR 744, 1962). Lastly, defendant contends that SSI “identifies nothing irrational about

[the NNSA’s] determination that the efficiencies in TUVA’s staffing plan would allow it to

complete the scope of work within [fewer] labor hours than anticipated in the IGCE.” Id. at 32.

According to defendant, SSI “is currently performing the contract with [. . .] [fewer] FTEs than

TUVA proposes.” Id. (citing AR 2573).

In its reply, SSI claims that the NNSA failed to recognize that it was obliged to consider

the staffing plan in TUVA’s technical proposal as well as the staffing plan in TUVA’s cost

proposal. 13 Pl.’s Reply & Resp. 18. According to SSI, although TUVA made changes to the

13

Although SSI suggests, in its reply, that there are two staffing plans—one in TUVA’s

technical proposal and one in TUVA’s cost proposal, the court finds no support in the

administrative record for this claim. As noted in the NNSA’s September 28, 2016 SSD, the IPT

initially evaluated the four proposals within the competitive range pursuant to the four criteria

listed in the RFP: technical approach, staffing plan and program manager qualifications,

corporate experience, and past performance. AR 2263. Then, the IPT evaluated the cost of the

offerors’ proposals, noting that “[w]hen combined, the four criteria are significantly more

important than Cost; however, cost/price will contribute substantially to the selection decision.”

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staffing plan in its technical proposal, no changes were made to the staffing plan in its cost

proposal. Id. at 18-19. In addition, SSI claims that the NNSA failed to consider the effect that

changes to TUVA’s technical proposal would have on TUVA’s cost proposal. Id. at 19. In

SSI’s view, “TUVA proposed to do substantially more work with the same number of FTEs,

using the same number of hours, at a slightly lower price,” and the “NNSA accepted this without

question, disregarding the risks that it had previously assigned.” Id. at 20.

In its own reply, defendant claims that SSI waived its right to challenge the NNSA’s

evaluation of TUVA’s technical proposal with respect to Criterion 2 (Staffing Plan and Program

Manager Qualifications). Def.’s Reply 14-16. Specifically, defendant argues that SSI’s

complaint contains no such allegation and SSI cannot raise an allegation for the first time in its

reply brief. Id. at 15 (“Furthermore, defendant contends that SSI mistakenly assumes that

“additional detail regarding the tasks assigned to a labor category constitutes additional duties.”).

SSI did not, in its complaint, assert any allegations related to the NNSA’s assessment of

TUVA’s staffing plan. Therefore, as defendant rightly contends, SSI cannot make the argument

for the first time in its reply brief. See Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed.

Cir. 2002) (“Raising the issue for the first time in a reply brief does not suffice; reply briefs reply

to arguments made in the response brief—they do not provide the moving party with a new

opportunity to present yet another issue for the court’s consideration.”). Even if SSI had not

waived the argument, however, it still lacks merit.

TUVA’s augmentation of its staffing plan in its FPR to include additional information,

coupled with TUVA’s explanation of the decrease in its indirect labor rates and the NNSA’s

rational assessment of the number of FTEs required to perform the contract, confirm that the

NNSA did not ignore any risks in its assessment of TUVA’s plan. First, in its FPR, TUVA

responded to the NNSA’s concerns regarding its staffing plan by refining its descriptions of each

of the proposed labor categories and providing more information regarding the duties of each of

the positions. See AR 1825-29. For example, TUVA made the following modifications—a

strikeout indicates material that was removed and an underline indicates material that was

added—to the Program Analyst III labor category:

Program Analyst (PA) III - (PBWS 4.1.2) Team TUVA proposes

[. . .].

Id. at 1825. TUVA then added the following information to its description of the duties of the

PA III position:

Job Duties

$ Utilize database report generating software and programs $

Research, analyze, and evaluate complex data and review budget

data $ Perform supervisory and liaison functions and duties

Id. TUVA’s FPR only contains one staffing plan, which is described in its technical proposal

and valued in its cost proposal.

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between subordinate employees and between contractor and

government $ Interact with multiple levels of management $

Manage customer and contractor relationships and support

multiple projects $ Update database records of budget information

regarding initial investigations and reinvestigations $ Extract data

to prepare budget, statistics, management, survey/inspection,

reconciliation and ad hoc reports $ Administer and maintain a

clearance action tracking system sufficient to identify specific

clearance activities and time lines of clearance requests, such as to

accurately and timely identify the nature of clearance requests

received, status, and completion of personnel security clearance

and adjudication activities and actions

Id. TUVA made similar changes and additions to a total of eighteen labor categories and

corresponding job duties. Id. at 1825-29.

Second, given TUVA’s explanation for the decrease in its indirect labor costs, the fact

that TUVA proposed a price reduction does not, as SSI asserts, “def[y] realism.” Pl.’s Mot. 29.

Third, although SSI claims that “TUVA added numerous tasks to a given position but did

not adjust the number of FTEs or the number of direct labor hours required to perform the work,”

id., SSI has not demonstrated that the duties added would result in additional work and were not

simply the identification of tasks already assigned or expected of employees working within

those labor categories. In other words, SSI has not provided the court with any evidence that, for

example, the addition of the obligation to “[u]pdate database records of budget information

regarding initial investigations and reinvestigations” to the job duties of the PA III position was

intended to describe a responsibility separate and apart from the already listed duties to “[u]tilize

database report generating software and programs” and “[r]esearch, analyze, and evaluate

complex data and review budget data.” AR 1825.

Finally, defendant is correct in its assertion that SSI fails to identify anything irrational

regarding the NNSA’s conclusion that TUVA’s staffing plan, as configured, is efficient enough

to permit the performance of the contract with fewer labor hours than contemplated by the IGCE.

Rather, the fact that SSI is currently performing the contract with [. . .] fewer FTEs than TUVA

proposes in its FPR directly supports the rationality of the NNSA’s conclusion. See AR 2573

(“TUVA proposed [. . .] FTEs and the incumbent’s current staffing level is [. . .] FTEs.”).

ii. Although the NNSA’s Evaluation of TUVA’s Staffing Plan Contained a Typographical

Error, the NNSA Did Not Misread the Plan

In addition to arguing that the NNSA ignored risks associated with TUVA’s staffing plan,

SSI argues that the NNSA misread the plan. Pl.’s Mot. 30-33. According to SSI, in its Revised

IPT Report, the NNSA states:

SAVA’s cost proposal includes [. . .] FTEs listed as Personnel

Security Clearance Processing Team Leads. The ‘team lead’

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portion is a typo. The rate for this category is equivalent to the

Personnel Security Clearance Processor. Additionally, the staffing

plan confirms this typo as it lists [. . .] team lead FTEs and [. . .]

processor FTEs. The typo does not impact cost, as the correct rate

was used in the calculation of direct labor.

Id. at 30 (quoting AR 2571-72). SSI contends, however, that the NNSA’s statements and

conclusions are not supported by TUVA’s proposal. Id.

First, SSI asserts that SAVA did not propose [. . .] Personnel Security Clearance

Processing TLs in its cost proposal. Id. (citing AR 2114). According to SSI, the Personnel

Security Clearance Processing TL position is neither listed in SAVA’s cost proposal, id. at 30

(citing AR 2114), nor listed in SAVA’s staffing plan, id. (citing AR 1905). SSI further avers that

although SAVA did not propose any positions with equivalent rates, id., the NNSA erroneously

adjusted TUVA’s proposed cost to reflect such rates, id. at 30-31 (citing AR 2571-72).

Second, SSI claims that the following table, which appears in Attachment 3 to the

NNSA’s Revised IPT Report, misstates TUVA’s staffing plan. Id. at 31-33.

Technical Evaluation of the Cost Proposal

Categories Percentage % of FTEs 14 TUVA’s Proposed

Provided FTEs

Adjudication 26% [. . .] [. . .]

Administrative 11% [. . .] [. . .]

Processors 41% [. . .] [. . .]

Professional / 9% [. . .] [. . .]

Executive

Administrative

FOCI 5% [. . .] [. . .]

Vault 8% [. . .] [. . .]

TOTAL [. . .] [. . .]

AR 2607 (footnote added). According to SSI, the figures used by the NNSA in the table are not

an accurate representation of those provided by TUVA. Pl.’s Mot. 32. SSI identifies the

following discrepancies: (1) the NNSA lists [. . .] FTEs in Adjudication whereas TUVA lists

[. . .], and (2) the NNSA lists [. . .] FTEs in Processing whereas TUVA lists [. . .]. Id.

(comparing AR 2607 (Attachment 3) with AR 1714).

14

Although the heading states that the numbers in the third column are percentages, they

are in fact numbers—specifically, the number of FTEs that an offeror would have to allocate to

each of the six skill set categories to satisfy historical allocations, as represented by the

percentages listed in the second column.

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In response to SSI’s arguments, defendant concedes that the Revised IPT Report contains

a typographical error in that the NNSA erroneously stated that SAVA’s cost proposal listed [. . .]

FTEs as “Personnel Security Clearance Processing Team Leads” when it actually only listed

“Personnel Security Clearance Processors.” Def.’s Cross-Mot. & Resp. 32. However, defendant

claims that the NNSA never relied on the misimpression and therefore SSI was not prejudiced by

the NNSA’s mistake. Id. (citing AR 2571-72, 4520-22). Next, defendant contends that the table

is a comparison of the skill mix in TUVA’s staffing plan with historical values:

The first two columns show the skill set category and the historical

percentage of work associated with each category indicated in the

Q&A. . . . The third column shows the allocation of the offerors’

proposed FTEs based on the historical percentage. . . . The fourth

column shows the allocation of the offerors’ FTEs based on their

proposed staffing plans.

Id. at 33. Thus, defendant argues: “The comparison provided by [SSI] reflects no discrepancy

because the staffing plan attachments provide 4 PBWS staffing areas and the Q&A identified 6

skill sets, so the table in Attachment 3 does not reflect an apples-to-apples comparison.” Id.

Defendant then illustrates its point:

For instance, [SSI] notes that “Attachment 3 lists [. . .] FTEs in

Adjudication. TUVA’s Staffing Plan lists [. . .] FTEs.” . . . But

[SSI] ignores the actual, substantive descriptions of the job

categories contained in the Staffing Narrative. For instance,

TUVA’s staffing matrix shows [. . .] Personnel Security Specialist

(PSS) [TL] IIIs under “Program Management” and another [. . .]

PSS [TL] IIIs under “Adjudication.” . . . TUVA’s Staffing Plan

Narrative explains that all [. . .] PSS III TLs support the

Adjudication work. . . . The staffing matrix also shows an

administrative assistant under Adjudication, which NNSA included

in the “Administrative” category for the purposes of Attachment 3.

Accordingly, the Staffing Plan indicates that [. . .] FTEs listed

under “Program Management” and [. . .] FTEs listed under

“Adjudication” will support the Adjudication

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