Safeguard Base Operations, LLC v. United States

In the United States Court of Federal Claims

No. 19-61C

Filed: July 2, 2019

Redacted Version Issued for Publication: August 12, 20191

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

SAFEGUARD BASE OPERATIONS, *

LLC, *

*

Protestor, *

* Post-Award Bid Protest; Motion to

v. * Dismiss; Cross-Motions for

* Judgment on the Administrative

UNITED STATES, Record; Standing; Solicitation

*

* Interpretation; Waiver; Clarifications;

Defendant,

Best-Value Tradeoff.

v. *

B&O JOINT VENTURE, LLC, *

Defendant-Intervenor. *

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

Alex D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman, LLP, Los Angeles, CA,

for protestor. Of counsel were Alexander B. Ginsberg, Pillsbury Winthrop Shaw Pittman,

LLP, McLean, VA, and Aaron S. Ralph and Kevin R. Massoudi, Pillsbury Winthrop

Shaw Pittman, LLP, Los Angeles, CA.

P. Davis Oliver, Senior Trial Attorney, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washington, D.C., for defendant. With him

were Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E.

Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant

Attorney General. Of counsel was James C. Caine, Attorney, Federal Law Enforcement

Training Centers, Glynco, GA.

Richard W. Arnholt, Bass, Berry & Sims PLC, Washington, D.C., for defendant-

intervenor. Of counsel were Todd R. Overman and Sylvia Yi, Bass, Berry & Sims PLC,

Washington, D.C.

1

This Opinion was issued under seal on July 2, 2019. The parties were asked to propose

redactions prior to public release of the July 2, 2019 Opinion. Protestor, defendant, and

defendant-intervenor all proposed redactions to the court’s July 2, 2019 Opinion. The

court has accepted some of the parties’ proposed redactions and has made additional

redactions to the July 2, 2019 Opinion. Words which are redacted are reflected with the

notation: “[redacted].”

OPINION

HORN, J.

In the above-captioned, post-award bid protest, Safeguard Base Operations, LLC

(Safeguard) challenges the award of a contract to B&O Joint Venture, LLC (B&O) under

Solicitation No. HSFLGL-17-R-00001 (the Solicitation) by the United States Department

of Homeland Security, Federal Law Enforcement Training Center (the Agency).

FINDINGS OF FACT

Safeguard is a joint venture consisting of Safeguard Security Solutions, LLC

(SSSL) and SRM Group, Inc. (SRM Group). Protestor contends that Safeguard is an 8(a)-

eligible joint venture and a “leading provider of dormitory services.” SSSL is the fifty-one

percent owner of the Safeguard joint venture and is an 8(a)-eligible firm. SRM Group is

the forty-nine percent owner of the Safeguard joint venture and currently is not 8(a)-

eligible. B&O, the defendant-intervenor in this protest, is an 8(a) joint venture consisting

of BPA Facility Services Inc. and Omni Corporation.

The parties have stipulated that, from June 2012 to October 2018, SRM Group

provided to the Agency the services that were procured under the Solicitation. SRM

Group’s prior contract with the Agency, Contract No. HSFLGL-12-C-00006 (the SRM

Group Contract), was awarded as an 8(a) contract. According to Agency contracting

officer Sheryle Wood’s October 29, 2018 statement of facts submitted to the United States

Government Accountability Office (GAO) in response to a protest filed at the GAO by

Safeguard,2 SRM Group graduated from the 8(a) program on February 23, 2013.

On October 11, 2017, the Agency issued the Solicitation at issue in this Opinion,

which was issued as a commercial item acquisition and was set-aside for 8(a)-eligible

contractors. The Solicitation indicated that the contract to be awarded under the

Solicitation would be a firm-fixed price contract for dormitory maintenance services to be

provided at the Agency’s training center in Glynco, Georgia, and would have “a base

period of nine (9) months and seven (7) 12-month option periods.” The Solicitation’s

performance work statement stated that the Agency’s training center in Glynco, Georgia,

has a lodging capacity of 2,093, that the Agency was responsible for training federal law

enforcement officers, and that the Agency “is responsible for providing certain core

instructional law enforcement programs as well as a variety of support services.” The

performance work statement also stated:

The Contractor shall provide all labor, supplies, materials, equipment,

including safety and protective gear, repair parts, tools, equipment,

planning, scheduling and coordination, training, licenses, permits,

2 As discussed below, based on the Agency’s actions relating to award under the

Solicitation, Safeguard has filed five protests with the GAO, one size protest with the

Small Business Administration (SBA), and one override protest with the United States

Court of Federal Claims, which was assigned to the undersigned and currently is on

appeal at the United States Court of Appeals for the Federal Circuit.

2

certificates, insurance, pre-employment screening, reports and files,

management, and supervision necessary to perform dormitory custodial,

desk clerk, locksmith, and maintenance services for nine (9) dormitories,

five (5) student centers, one (1) laundry center and other facilities as

described throughout the Performance Work Statement (PWS).

The Solicitation provided that award under the Solicitation would be made on a

best-value basis based on factors set forth in the Solicitation. As originally issued, the

Solicitation stated that Factor A1 was management and technical approach, Factor A2

was hazardous waste management plan, Factor B was past performance, and Factor C

was price. Amendment No. 3 to the Solicitation3 added corporate experience of the prime

contractor as a factor and changed the numbering of some of the factors to be evaluated

under the Solicitation. Amendment No. 3 stated that Factor A2 was to become corporate

experience of the prime contractor, and that hazardous waste management plan, which

previously had been listed as Factor A2, was to become Factor A3. Factor A1 remained

management and technical approach, Factor B remained past performance, and Factor

C remained price. The Solicitation, as well as Amendment No. 3 to the Solicitation,

indicated that, when combined, all non-price factors were approximately equal to price.

Section A of the Solicitation, titled “SECTION A SOLICITATION GENERAL

INFORMATION,” stated: “Pricing Schedule and Periods of Performance (POP) Service

dates for each CLIN [Contract Item Line Number] are detailed in Section B. Note:

Exceptions to line item structure in Section B may result in a bid not considered for award.”

(capitalization in original). The Solicitation also provided:

3 As discussed below, the Agency issued five amendments to the Solicitation.

3

The Solicitation also contained what protestor refers to as an “‘Order of Precedence’

Clause,” which stated:

(s) Order of precedence. Any inconsistencies in this solicitation or contract

shall be resolved by giving precedence in the following order: (1) the

schedule of supplies/services; (2) The Assignments, Disputes, Payments,

Invoice, Other Compliances, Compliance with Laws Unique to Government

Contracts, and Unauthorized Obligations paragraphs of this clause; (3) the

[Federal Acquisition Regulation (FAR)] clause at 52.212-5; (4) addenda to

this solicitation or contract, including any license agreements for computer

software; (5) solicitation provisions if this is a solicitation; (6) other

paragraphs of this clause; (7) the Standard Form 1449; (8) other

documents, exhibits, and attachments; and (9) the specification.

(capitalization and emphasis in original).

The Solicitation contained FAR clause 52.212-1, titled “Instruction to Offerors -

Commercial Items,” which stated that offers may be submitted on a government Standard

Form (SF) 1449, and that offers “must show” “Price and any discount terms.”

(capitalization in original). FAR clause 52.212-1 in the Solicitation further stated:

(g) Contract award (not applicable to Invitation for Bids). The Government

intends to evaluate offers and award a contract without discussions with

offerors. Therefore, the offeror’s initial offer should contain the offeror’s best

terms from a price and technical standpoint. However, the Government

reserves the right to conduct discussions if later determined by the

Contracting Officer to be necessary. The Government may reject any or all

offers if such action is in the public interest; accept other than the lowest

offer; and waive informalities and minor irregularities in offers received.

(emphasis in original). The Solicitation also contained an addendum to FAR clause

52.212-1, which stated that an offeror’s “[p]rice proposal shall include price for the phase-

in period, base period and seven option periods.” Moreover, the addendum to FAR clause

52.212-1 stated:

Offerors shall provide a detailed breakdown of how it arrived at proposed

costs as follows: Contract Line Item Number, Description, Service Contract

Act (SCA) Occupation Code, Firm Fixed Price (FFP) Direct Labor

Categories and Rates, for all proposed exempt and non-exempt positions;

clearly identifying the proposed positions as exempt or non-exempt, full time

equivalents for each labor category, productive hours, overtime hours and

rate, exempt and non-exempt fringe benefits . . . .

***

4

Price proposal shall include completed Schedule B. In the event there is a

discrepancy between sections of the price proposal and Schedule B,

Schedule B will govern.

The addendum to FAR clause 52.212-1 directed offerors to price proposals as Volume 3

and that:

Volume 3 shall be labeled Factor C-Price (Section B, to include price

breakdown), SF 1449, SF30 Amendments, Section B price and price

breakdown, required bond, completed HSAR clause at 3052.209-70,

Prohibition on Contracts with Corporate Expatriates by checking pertinent

block at paragraph (f) Disclosure and sign at end of clause (Section C

Contract Clauses), completed FAR Clause 52.212-3 Representations and

Certifications of this solicitation (Section E Solicitation Provisions).

(emphasis in original).

The Solicitation contained a modified version of FAR clause 52.212-2, titled

“Evaluation - Commercial Items,” which stated that the Agency “will evaluate offers for

award purposes by adding the total price for all options to the total price for the basic

requirement.” (capitalization in original). An addendum to the modified version of FAR

clause 52.212-2 in the Solicitation stated:

OFFERORS ARE ADVISED THAT THE GOVERNMENT INTENDS TO

MAKE AWARD WITHOUT DISCUSSION OR ANY CONTACT

CONCERNING THE PROPOSALS RECEIVED. Therefore, proposals

should be submitted initially on the most favorable price and technical

terms. Offeror should not assume that they will be contacted or afforded an

opportunity to qualify, discuss, or revise their proposals.

(capitalization in original). The addendum further stated:

If the Government determines an award cannot be made without

discussions, a competitive range determination will be made. . . . Should a

competitive range be established, written or oral discussions may be

conducted with all responsible offerors within the competitive range.

However, the Government reserves the right to make an award without

discussions based on initial proposals.

Regarding how the Agency would evaluate offerors’ price proposals, the

addendum to the modified version of FAR clause 52.212-2 in the Solicitation stated:

Evaluation of price will be conducted using one or more of the price analysis

and/or cost realism techniques outlined in FAR 15.305 and 15.404. CO

[contracting officer] reserves the right to conduct cost/price realism to

assess performance risk resulting from unrealistically low offers. Price will

5

be evaluated to determine if the offeror’s proposed price is fair and

reasonable, complete, balanced and/or realistic.

As part of the price analysis, the government will evaluate its option to

extend services (FAR Clause 52.217-8) by adding six months of the

offeror’s final option period price to the offeror’s total price. This will result

in the total evaluated price by which the determination cited under f. (1) will

be based, in part.

Offeror is required only to price the base and option periods.

The addendum to the modified version of FAR clause 52.212-2 defined

“Completeness/Accuracy” as “[t]he offeror’s proposal is in compliance with the Price

Volume instructions in the solicitation.” (emphasis and capitalization in original).

The Solicitation included a government SF 1449, titled

“SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS,” and a government

Optional Form (OF) 336, titled “CONTINUATION SHEET.” (capitalization in original). The

“SCHEDULE OF SUPPLIES/SERVICES” begins in block 20 on the SF 1449 and

continues throughout column “(B)” on the OF 336, which the parties have referred to as

“Schedule B.” (capitalization in original). The Schedule of Supplies/Services on the SF

1449 and OF 336 contained CLINs for the base period of performance, as well as the

seven one-year option periods of performance. For example, CLINs 0005 and 0006,

which were to be performed during the base period of performance, were listed as:

CLINs in option periods of performance were designated by inserting the number of the

option period of performance into the beginning of the CLIN in place of the first zero.

Thus, CLINs 1005 and 1006 were to be performed during the first option period of

performance and were listed as:

6

At issue in the above-captioned bid protest are the CLINs designated as 0007AA

and 0007AB in the base period of performance, as well as the CLINs in the option periods

of performance which correspond with CLINs 0007AA and 0007AB. The full list of the

sixteen CLINs at issue in this case are: 0007AA, 1007AA, 2007AA, 3007AA, 4007AA,

5007AA, 6007AA, 7007AA, 0007AB, 1007AB, 2007AB, 3007AB, 4007AB, 5007AB,

6007AB, and 7007AB.4 In the paragraph preceding the CLINs for the base period of

performance, the Solicitation stated that “CLIN 0007aa and 0007ab are pre-priced and

performed as authorized by the Contracting Officer. The amounts listed for these CLINS

are a ‘not to exceed’ amount with no guarantee that the total amount will be used.” As

indicated in the image on the following page, in the Solicitation, CLINs 0007AA and

0007AB were listed as:

4 When discussing CLINs 0007AA, 1007AA, 2007AA, 3007AA, 4007AA, 5007AA,

6007AA, and 7007AA, the parties have used, and the court will use in this Opinion, the

shorthand X007AA. When discussing CLINs 0007AB, 1007AB, 2007AB, 3007AB,

4007AB, 5007AB, 6007AB, and 7007AB, the parties have used, and the court will use in

this Opinion, the shorthand X007AB. Thus, CLINs X007AA and X007AB refers to CLINs

0007AA, 1007AA, 2007AA, 3007AA, 4007AA, 5007AA, 6007AA, 7007AA, 0007AB,

1007AB, 2007AB, 3007AB, 4007AB, 5007AB, 6007AB, and 7007AB.

7

8

The Solicitation, however, did not “list[]” a unit price, a government “[c]eiling” amount, or

a government not-to-exceed amount for either CLIN 0007AA or CLIN 0007AB.

The descriptions of CLINs 10007AA, 20007AA, 30007AA, 40007AA, 50007AA,

60007AA, and 70007AA contained the same language as in the description of CLIN

0007AA. The description of CLINs 1007AB, 2007AB, 3007AB, 4007AB, 5007AB,

6007AB, and 7007AB contained the same language as in the description of CLIN

0007AB. Before each option period of performance, the Solicitation stated that the CLINs

in that option period of performance associated with CLINs X007AA and X007AB “are

pre-priced and performed as authorized by the Contracting Officer. The amounts listed

for these CLINS are a ‘not to exceed’ amount with no guarantee that the total amount will

be used.” The Solicitation, however, did not provide a unit price, a government “[c]eiling”

amount, or a government not-to-exceed amount for CLINs 1007AA, 2007AA, 3007AA,

4007AA, 5007AA, 6007AA, 7007AA, 1007AB, 2007AB, 3007AB, 4007AB, 5007AB,

6007AB, or 7007AB.

After the Agency issued the October 11, 2017 Solicitation, the parties jointly have

stipulated:

On October 20, 2017, Safeguard protested DHS’s [the Department of

Homeland Security’s] decision to include requirements that exceeded the

Agency’s needs. This protest was docketed as Matter No. B-415588.1.

Safeguard filed a second pre-award protest, docketed as Matter No. B-

415588.2. Both pre-award protests were dismissed as academic on

November 21, 2017 when DHS announced that it would take corrective

action that remedied the infirmities Safeguard identified.

(internal references omitted). On February 8, 2018, the Agency issued Amendment No.

3 to the Solicitation, which contained answers from the Agency to 272 questions posed

by potential offerors.5 Question and answer 9 in Amendment No. 3 stated:

5 On October 23, 2017, the Agency issued Amendment No. 1 to the Solicitation, which

stated that the purpose of Amendment No. 1 was to correct typographical errors in the

Solicitation. On November 2, 2017, the Agency issued Amendment No. 2 to the

Solicitation, which indicated that the purpose of Amendment No. 2, temporarily, was to

cancel the date for receipt of proposals due to a large amount of questions received by

the Agency related to the Solicitation. On February 22, 2018, the Agency issued

Amendment No. 4 to the Solicitation, which stated that the Agency had received additional

questions and planned on providing responses to those questions. On February 26, 2018,

the Agency issued Amendment No. 5 to the Solicitation, which answered questions posed

by potential offerors and made revisions to the Solicitation in response to the received

questions.

9

(emphasis in original). The parties have correctly stipulated that the amounts listed in

answer 9 for CLINs X007AA and X007AB, when added together for the base period of

performance and for all option periods of performance, totals $6,121,228.00. Question

and answer 16 stated:

(emphasis in original).

Amendment No. 3 also amended a section of the Solicitation with a heading that

stated “SECTION B PRICE SCHEDULE,” which was changed to state:

(capitalization and highlight in original). The highlighted language in the above-image

reflects the language that was changed or added by Amendment No. 3 to the Solicitation.

10

On March 16, 2018, the Agency received seven proposals in response to the

Solicitation from seven offerors, including Safeguard and B&O. In B&O’s proposal, B&O

provided unit prices and amounts for CLINs 0007AA, 1007AA, 2007AA, 3007AA,

4007AA, 5007AA, 6007AA, 7007AA, 0007AB, 1007AB, 2007AB, 3007AB, 4007AB,

5007AB, 6007AB, and 7007AB in accordance with the amounts the Agency provided for

those sixteen CLINs in response to question 9 in Amendment No. 3. For example, B&O’s

proposal provided:

B&O’s proposal stated that B&O’s total proposed price for the base period of

performance and all option periods of performance was $79,105,840.96. B&O’s proposal

included a chart titled “CLIN Summary,” which provided a breakdown of prices per CLIN

in each period of performance. B&O included the government provided ceiling or not-to-

exceed amounts for CLINs X007AA and X007AB, which were provided in question and

answer 9 in Amendment No. 3. For instance, B&O’s proposal included the following chart

for the first option period of performance:

11

[redacted]

The amounts listed for CLINs 1007AA and 1007AB are consistent with the amounts

provided in the Agency’s answer to question 9 in the Amendment No. 3.

In Safeguard’s proposal, Safeguard did not include amounts for CLINs 0007AA,

1007AA, 2007AA, 3007AA, 4007AA, 5007AA, 6007AA, 7007AA, 0007AB, 1007AB,

2007AB, 3007AB, 4007AB, 5007AB, 6007AB, and 7007AB. For those sixteen CLINs,

Safeguard left the “UNIT PRICE” and “AMOUNT” blank. Safeguard’s proposal for CLINs

X007AA and X007AB, therefore, appeared as:

As indicated in the above image, Safeguard did not list any amount under the “UNIT

PRICE” or “AMOUNT” columns for CLINs X007AA and X007AB. (capitalization in

original).

Safeguard’s proposal included a chart indicating that Safeguard’s total proposed

price for the base period of performance and all option periods of performance was

[redacted]. The chart in Safeguard’s proposal indicated Safeguard’s pricing for each CLIN

in each period of performance. Safeguard’s chart, however, did not include pricing for

CLINs X007AA or X007AB. Rather, Safeguard’s chart provided as follows:

[redacted]

As indicated in the above image, Safeguard did not submit prices for “SWR [service work

requests] - Maintenance” or “SWR Direct Equipment” for the base period of performance

and for all seven option periods of performance.6 Safeguard’s total proposed price for the

base period of performance and all option periods of performance, therefore, did not

include the government provided ceiling or not-to-exceed amounts for CLINs 0007AA,

1007AA, 2007AA, 3007AA, 4007AA, 5007AA, 6007AA, 7007AA, 0007AB, 1007AB,

2007AB, 3007AB, 4007AB, 5007AB, 6007AB, and 7007AB.

According to an Agency document titled “SOURCE SELECTION PLAN,” which

was dated March 2, 2018, Joseph Williams was to serve as the Agency’s source selection

authority for the procurement under the Solicitation and was to make the “final source

selection decision.” (capitalization in original). Joseph Williams also was responsible for

approving any course of action involving the establishment of a competitive range or

discussions. The Agency’s Source Selection Plan identified Sheryle Wood as the

contracting officer for the procurement and stated that, in her role as contracting officer,

6Safeguard’s chart incorrectly lists “SWR Direct Equipment” as CLINs “7AA,” instead of

CLINs “7AB.”

12

Ms. Wood was responsible for deciding whether to establish a competitive range and

whether to conduct discussions with offerors in the competitive range, subject to Joseph

Williams’ approval. The Agency’s Source Selection Plan indicated that Sheryle Wood also

would serve as the source selection evaluation board chairperson. As the source

selection evaluation board chairperson, Sheryle Wood was to manage “the overall

activities of the SSEB [source selection evaluation board], distributing the workload, and

ensuring compliance with source selection information security procedures.” The

Agency’s Source Selection Plan indicated that the source selection evaluation board

would consist of the following three evaluation boards:

The Agency’s Source Selection Plan identified James Caine, an attorney advisor

in the defendant Agency’s Office of Chief Counsel, as the legal counsel for the

procurement under the Solicitation. As legal counsel, James Caine was to provide legal

advice to the source selection authority, Joseph Williams, and to the source selection

evaluation board. James Caine was to be a non-voting member of the source selection

evaluation board and was to “not participate in the caucus process unless specifically

asked to do so by the board Leader.” Regarding the Agency’s evaluation process, the

Source Selection Plan indicated, multiple times, that the Agency intended to award a

contract under the Solicitation without discussions and based on the initial proposals

received in response to the Solicitation.

On March 22, 2018, Sheryle Wood completed a document with the subject “Price

Evaluation Report.” In the Price Evaluation Report, Sheryle Wood determined that four of

the seven offerors, including Safeguard, had failed to include the government provided

amounts listed for CLINs X007AA and X007AB in the proposals, which were provided in

the Agency’s answer to question 9 in Amendment No. 3 to the Solicitation. Regarding

Safeguard’s proposal, Sheryle Wood stated that “[t]he correct pricing schedule (Section

B, Amendment 0003) and the correct estimated quantities were used; however, the

specific data to CLINS XXX7 AA and XXX7 AB were [sic] not plugged in for all years as

instructed by Amendment 0003.” Sheryle Wood asserted:

It is recommended that the Contracting Officer determine the [Safeguard’s]

price fair and reasonable as presented without need for discussion or

exchanges with regard to price. Once the competitive range has been

established, it is recommended that Safeguard Base Operations LLC (SBO)

be retained in the competitive range for purposes of discussion. Calculation

errors in all years, inclusion of the IDIQ data all years, and full breakdown

of phase in costs and ODCs [other direct costs] would be the discussion

element [sic] all years.

13

In the section of the March 22, 2018 Price Evaluation Report concerning B&O’s

proposal, Sheryle Wood stated that “[t]he correct pricing schedule (Section B,

Amendment 0003) and the correct estimated quantities were used and the specific data

to CLINS XXX7AA and XXX7AB were plugged in for all years as instructed by

Amendment 0003.” Sheryle Wood, therefore, indicated that B&O had included in its

proposal the government provided amounts for CLINs X007AA and X007AB, which were

provided in Amendment No. 3 to the Solicitation. Sheryle Wood also stated that she

recommended that the Contracting Officer determine the price fair and

reasonable as presented without need for discussion or exchanges with

regard to price. Once the competitive range has been established, it is

recommended that B&O Joint Venture LLC be retained in the competitive

range for purposes of discussion. Calculation errors would be the

discussion element all years.

Moreover, at the end of the March 22, 2018 Price Evaluation Report, Sheryle Wood

stated:

[redacted]

In the chart immediately above, Safeguard is listed as “SBO JV.” As indicated for the

purposes of the immediately above chart, Sheryle Wood increased Safeguard’s “Price as

Submitted” of [redacted] to a “Total evaluated with IDIQ lines/corrections” of [redacted].

(capitalization in original). Sheryle Wood, however, recommended that Safeguard be

retained in a competitive range if a competitive range was to be established.

On April 9, 2018, the Agency completed its past performance evaluation of the

seven offerors, which Michael Harris, chairperson of the past performance evaluation

board, documented in a memorandum with a subject of “Past Performance Evaluation

Board Report.” In the Past Performance Evaluation Board Report, Michael Harris

summarized the offerors’ proposals and identified the strengths, weaknesses, and

deficiencies of all seven offerors. Under a section titled “Recommendation,” Michael

Harris stated:

[redacted]

On June 22, 2018, Luke Rhaney completed a memorandum with a subject of

“Technical Evaluation of Proposals Submitted in Response to RFP [request for

proposals].” The Technical Evaluation of Proposals document stated that the “following

analysis findings are presented in part, per individual offer for non-price factors A1,

Management and Technical Approach; Factor A2, Corporate Experience of the Prime

Contractor, and Factor A3, Hazardous Waste Management Plan (HWMP) which were

reviewed individually by the Technical Evaluation Team followed by a consensus rating.”

According to the June 22, 2018 Technical Evaluation of Proposals document, the

technical evaluation board reached the following conclusions:

14

[redacted]

(emphasis in original). The Technical Evaluation of Proposals document stated that

“award could be made to the following offeror’s [sic] listed in order of ranking” and included

the following chart:

[redacted]

On June 8, 2018, the source selection authority, Joseph Williams, completed a

“Source Selection Decision Document,” which stated that the Agency had elected neither

to establish a competitive range nor to hold discussions with offerors, and that Joseph

Williams had determined that B&O’s proposal provided the best value to the government.

Regarding Safeguard’s proposal, Joseph Williams stated:

The price proposal [submitted by Safeguard] did not comply with

instructions, containing .pdf copies of their spreadsheets rather than in excel

as required, errors in pricing of extended amounts for all years, and

omission of the IDIQ pricing (as required by RFP amendment). There is no

yearly escalation except for the project management CLINs. (All other

proposals include escalation of at least [redacted] for all CLINs, which the

history of the current contract supports.) Their proposed price of [redacted]

is the third lowest and although it is reasonable, it may be considered

unrealistically low compared to the IGE. After accounting for errors and

adding escalation to all CLINs, their total evaluated price increased by

approximately [redacted] to [redacted] (without accounting for the floor

cleaning services that were to be at no expense to the Government).

[redacted] evaluated prices that are realistic, and awarding to this offeror

presents some risk to the Government without a completely revised price

proposal accounting for all costs, and given their Technical Approach and

Corporate Experience ratings are lower than other offerors.

Because of a non-compliant price proposal, and a price that is unrealistically

low, this proposal should have been eliminated from the competition without

a technical evaluation.

In his June 8, 2018 Source Selection Decision Document, Joseph Williams

determined that B&O’s proposal provided the best value to the government. Joseph

Williams asserted that “Prosperitus and B&O Joint Venture are the only two offers that

could be awarded a contract without discussions. Of these two, B&O’s non-price factor

ratings are higher and their total evaluated price is approximately $11M less, making them

the better value to the Government.” (emphasis in original). According to Joseph Williams,

“[d]iscussions and a substantial update to portions of their [Safeguard’s] technical

proposal as well as a completely revised price proposal would be necessary, but it is

unlikely they would become much more competitive.” (emphasis in original).

15

On June 14, 2018, the Agency sent a pre-award notice to Safeguard indicating

that the Agency had selected B&O as the “apparent successful offeror” under the

Solicitation. On June 15, 2018, Safeguard requested a debriefing. In a memorandum

dated June 15, 2018, which was signed by Sheryle Wood, the Agency provided

Safeguard with a written debriefing in response to Safeguard’s request for a debriefing.

Regarding Safeguard’s price proposal, in the June 15, 2018 memorandum, Sheryle Wood

stated:

Four (4) deficiencies noted: (1) failure to breakout all ODCs; (2) 7-day phase

in costs of $200,000 not broken down in the price proposal; (3) Amendment

0003 instructed offerors to plug in specific data to CLINS 7AA and 7AB in

all years which Safeguard did not; (4) errors in pricing of extended amounts

for all years. There was a modest escalation in the project management

CLIN in the out years only.

The total price of [redacted] as submitted is significantly lower than the

Independent Government Estimate (IGE) and is considered unrealistically

low.[7] After including the missing CLIN data, correcting for errors as

mentioned above, and adding a reasonably modest [redacted] escalation

for all CLINs (as supported by the history of the current contract), the total

evaluated price increased by approximately [redacted] to [redacted]. The

total evaluated price is more realistic, but it is still well below the IGE and

presents a slight performance risk.

Sheryle Wood further stated that, “[i]n an effort to improve proposal submissions for future

projects, it is imperative that you follow the proposal submission requirements exactly,

while paying close attention to the language describing what the Government will be

evaluating under each factor and subfactor.”

7 In his June 8, 2018 Source Selection Decision, Joseph Williams stated:

Their [Safeguard’s] proposed price of [redacted] is the third lowest and

although it is reasonable, it may be considered unrealistically low compared

to the IGE. After accounting for errors and adding escalation to all CLINs,

their total evaluated price increased by approximately [redacted] to

[redacted] (without accounting for the floor cleaning services that were to

be at no expense to the Government).

Joseph Williams also stated in the June 8, 2018 Source Selection Decision Document

that, “[b]ecause of a non-compliant price proposal, and a price that is unrealistically low,

this [Safeguard’s] proposal should have been eliminated from the competition without a

technical evaluation.”

16

The parties have stipulated that Safeguard filed its third protest at the GAO

concerning award under the Solicitation on June 21, 2018.8 The parties’ joint stipulations

of fact in this court states that Safeguard’s third protest “challenged DHS’s decision to

assign Safeguard a ‘deficiency’ for offering a no-charge benefit to DHS and selection of

B&O as the awardee.” On July 16, 2018, the Agency indicated that it would take corrective

action and would have source selection authority Joseph Williams reconsider the

evaluation results and render a new award decision. On July 19, 2018, the GAO

dismissed Safeguard’s third protest as “academic.”

Thereafter, Joseph Williams appears to have undertaken a reevaluation of the

proposals received in response to the Solicitation and to have documented his

reevaluation in a new Source Selection Decision Document, which is dated August 2,

2018. In the August 2, 2018 Source Selection Decision Document, Joseph Williams

raised Safeguard’s rating for subfactor A1-2, concerning Safeguard’s technical approach,

from its previous rating of unsatisfactory to marginal. Regarding Safeguard’s price

proposal, Joseph Williams indicated that Safeguard had “omitted the IDIQ pricing (as

required by RFP amendment),” and that, “[a]fter accounting for errors and adding

escalation to all appropriate CLINs, their total evaluated price increased by approximately

[redacted].” According to Joseph Williams, “[b]ecause of a non-compliant price proposal

with a questionable low price, and Corporate Experience and Past Performance volumes

that were submitted without discerning between the prime and sub-contractors in the joint

venture, this proposal could have been eliminated from the competition without a

technical evaluation.” Joseph Williams concluded, again, that B&O and Prosperitus

Solutions were the only two offerors which could be awarded a contract under the

Solicitation without discussions, and that B&O’s proposal provided the best-value to the

government and should be selected for award.

On August 7, 2018, the Agency awarded Contract No. 70LGLY18CGLB00003 (the

B&O Contract) to B&O. Also on August 7, 2018, the Agency sent a post-award notice to

Safeguard advising Safeguard that the Agency had awarded the B&O Contract to B&O.

In a written debriefing provided to Safeguard dated August 14, 2018, the Agency stated:

The price proposal also contained errors, though not technically rated as

weaknesses or deficiencies. ODCs were not fully identified as required,

although they were projected in the cost allocation of the proposal. Although

spreadsheets with pricing information were included, some were submitted

in .pdf format rather than Excel as required. Errors in pricing of extended

amounts in all years were discovered, and the pricing for the IDIQ CLINs

(XXX7AA and XXX7AB) were omitted. Further, [redacted] was proposed for

8 Additionally, according to Sheryle Wood’s October 29, 2018 contracting officer’s

statement of facts submitted to the GAO and included in the administrative record in the

above-captioned protest, Safeguard had filed a size protest with the SBA concerning the

size of B&O on June 18, 2018. In the October 29, 2018 contracting officer’s statement of

facts submitted to the GAO, Sheryle Wood states that the SBA denied Safeguard’s size

protest on July 20, 2018.

17

the project management CLIN only, when all other proposals included

escalation on all appropriate CLINs-which is supported by the history of the

current contract. Therefore, after accounting for errors, omissions and

escalations, the total evaluated price increased by approximately $6.2M.

The Agency also stated:

Although SBO did not receive any unsatisfactory ratings, discussions

leading to substantial updates to portions of the technical proposal and past

performance volume, as well as a revised price proposal would be

necessary to be more competitive. The successful offeror submitted the

most complete and sound technical proposal with no deficiencies and

several strengths identified by the technical evaluation team, resulting in

receiving the highest non-price factor ratings. They also submitted one of

only two compliant and complete price proposals without errors. Because

of their superior ratings and the identified strengths, demonstrated relevant

past efforts and performance of the prime contractor, and a complete

submitted price that is reasonable and realistic, the price premium over

SBO’s total evaluated price is justified for the assurance of superior services

when spread over the life of a seven-year contract.

On August 20, 2018, Safeguard filed its fourth protest involving award under the

Solicitation at the GAO. In its fourth protest at the GAO, Safeguard argued that the Agency

arbitrarily and capriciously evaluated Safeguard’s past performance, did not correctly

justify the price premium associated with B&O’s proposal, and that the Agency’s “actions

are biased against Safeguard.” Safeguard also argued:

DHS’s Post Award Debriefing cites purported errors in Safeguard’s

proposal with respect to pricing of extended amounts in all years, and states

that the pricing for the IDIQ CLINs (XXX:7AA and XXX:7AB) were omitted.

However, these CLINS were not required to be priced per the RFP. Rather,

they were costs that the Agency was to reimburse the contractor. It is our

understanding and alleged in this protest that the other offerors did not

include pricing for these CLINS either. Therefore, it would be arbitrary and

capricious for the Agency to fail to apply the same the evaluation criteria

and scoring method to the awardee’s proposal.

(citation omitted). On August 24, 2018, Safeguard filed an amended protest at the GAO,

which asserted that the Agency had violated FAR § 15.404-1(d)(3) by increasing the price

of Safeguard’s proposal during the Agency’s evaluations. The regulation at FAR § 15.404-

1(d)(3) (2019), which has not been altered since January 13, 2017, states:

Cost realism analyses may also be used on competitive fixed-price

incentive contracts or, in exceptional cases, on other competitive fixed-

price-type contracts when new requirements may not be fully understood

by competing offerors, there are quality concerns, or past experience

18

indicates that contractors’ proposed costs have resulted in quality or service

shortfalls. Results of the analysis may be used in performance risk

assessments and responsibility determinations. However, proposals shall

be evaluated using the criteria in the solicitation, and the offered prices shall

not be adjusted as a result of the analysis.

See FAR § 15.404-1(d)(3). In its August 24, 2018 amended protest, Safeguard also

argued:

[T]he Solicitation did not require offerors to price IDIQ CLINs (XXX:7 AA and

XXX:7 AB), so Safeguard did not err in omitting such pricing. Moreover,

Safeguard believes other offerors also did not price these CLINs. To the

extent DHS upwardly adjusted only Safeguard’s proposed price in

connection with these CLINs, DHS clearly engaged in disparate treatment.

The magnitude of the upward adjustment attributable to these CLINs

remains unclear, but it also would appear to be but a fraction of the total

adjustment of $6.2 million. Thus, it seems that DHS has effected further

undisclosed, and erroneous, adjustments to Safeguard’s proposed firm-

fixed price.

On August 28, 2018, James Caine, Agency counsel, sent a letter to the GAO

stating that, after reviewing Safeguard’s August 20, 2018 protest and August 24, 2018

amended protest at the GAO, the Agency had “discovered” that it had made mistakes

when evaluating the proposals received in response to the Solicitation and was going to

take corrective action to correct the mistakes by making a new source selection decision.

On August 31, 2018, the GAO dismissed Safeguard’s August 20, 2018 protest and

August 24, 2018 amended protest.

On September 20, 2018, source selection authority Joseph Williams completed his

third Source Selection Decision Document. The September 20, 2018 Source Selection

Decision Document provided:

[redacted]

Regarding Pleiades Group LLC (Pleiades Group), the September 20, 2018 Source

Selection Decision Document stated Pleiades Group’s price proposal lacked substantive

information, incorrectly priced cleaning rates on a monthly basis as opposed to a daily

basis, and “does not contain any totals per year or any grand totals. Additionally, their

price volume failed to include government provided amounts for the Service Work

Request CLINs, as required by Amendment 3 to the solicitation. Therefore, this offeror is

not eligible for award.” The September 20, 2018 Source Selection Decision Document

asserted that Ravi, Inc.’s price proposal did not include a “detailed cost breakdown,”

contained incorrect “calculation totals,” and “failed to include government provided

amounts for the Service Work Request CLINs, as required by Amendment 3 to the

solicitation. Therefore, this offeror is not eligible for award.”

19

According to the September 20, 2018 Source Selection Decision Document,

Prosperitus Solutions’ “price proposal was technically non-compliant because their price

volume failed to include government provided amounts for the Service Work Request

CLINs, as required by Amendment 3 to the solicitation. Therefore, this offeror is not

eligible for award.” Likewise, regarding Safeguard’s proposal, the September 20, 2018

Source Selection Decision Document stated that Safeguard’s “price proposal was

technically non-compliant because their price volume failed to include government

provided amounts for the Service Work Request CLINs, as required by Amendment 3 to

the solicitation. Therefore, this offeror is not eligible for award.”

On September 20, 2018, the Agency sent Safeguard a post-award notice stating

that the Agency had selected B&O for award under the Solicitation. The September 20,

2018 post-award notice also stated:

On September 25, 2018, Safeguard filed its fifth bid protest at the GAO, which

asserted that the Agency had acted arbitrarily and capriciously by not considering

Safeguard’s proposal because “the Solicitation did not require offerors to price IDIQ

CLINs (XXX:7 AA and XXX:7 AB), so Safeguard did not err in omitting such pricing.” On

October 12, 2018, Safeguard filed a supplemental protest at the GAO asserting that the

Agency had acted arbitrarily and capriciously because “the current DHS value of B&O’s

award at $77,734,857 is in fact $1.36 million LESS than the DHS value of the award per

the August 14, 2018 debriefing notice given to Safeguard indicating B&O’s pricing at

$79,095,987—despite no opportunity for revised pricing extended to all offerors.”

(capitalization and emphasis in original).

After Safeguard had filed its September 25, 2018 protest at the GAO, the Agency

overrode the automatic stay to performance of the B&O Contract required by the

Competition in Contracting Act (CICA), 31 U.S.C. § 3553 (2012), due to Safeguard’s

20

September 25, 2018 protest filed at the GAO. See Safeguard Base Operations, LLC v.

United States, 140 Fed. Cl. 670, 679-83 (2018). On September 30, 2018, SRM Group’s

incumbent dormitory maintenance services contract with the Agency expired. Id. at 680.

On October 1, 2018, the Agency transitioned to B&O’s Contract in order for B&O to

provide dormitory maintenance services. Id. Also on October 1, 2018, Safeguard filed a

bid protest challenging the Agency’s decision to override the CICA stay at the United

States Court of Federal Claims, which was docketed as Safeguard Base Operations, LLC

v. United States, Case No. 18-1515C, and was assigned to the undersigned.9 See id. On

October 24, 2018, the court issued an oral decision on the override complaint denying

Safeguard’s protest, and, on October 25, 2018, the court issued a written decision

memorializing the court’s October 24, 2018 oral decision and directed the Clerk of the

United States Court of Federal Claims to enter judgment. See id. at 680, 710. Thereafter,

Safeguard appealed the court’s October 25, 2018 Opinion and judgment to the United

States Court of Appeals for the Federal Circuit, which currently remains pending.

On December 14, 2018, the GAO issued a decision denying Safeguard’s fifth

protest at the GAO. See Safeguard Base Operations, LLC, B-415588.6, et al., 2018 WL

6617289, at *1 (Dec. 14, 2018). In its December 14, 2018 decision, the GAO stated:

Safeguard asserts that the solicitation did not provide that a proposal could

be rejected for not including the reimbursable CLINs, and therefore the

agency’s actions were unreasonable. While we agree with the protester that

the omitted price information is relatively trivial, we consider the source of

the controversy to be Safeguard’s failure to review the amendment

thoroughly, as opposed to any conduct attributable to the agency. Indeed,

if Safeguard had reviewed the amendment, then it would have recognized

that offerors were to include the government-provided amounts on their

price schedule and thus its price proposal would not have been an issue.

Thus, Safeguard effectively asks that we find that the agency should excuse

the protester’s own failure to follow explicit proposal preparation

instructions.

We decline to do so here because the solicitation’s evaluation criteria

specifically allowed the agency to reject proposals on this basis. The

evaluation criteria advised that offerors’ prices would be evaluated to

9 Alex Ginsburg was counsel of record for Safeguard in Case No. 18-1515C, and Alex

Tomaszczuk was designated as of counsel in Case No. 18-1515C. In the above-

captioned, current protest, Alex Tomaszczuk is counsel of record for Safeguard, and Alex

Ginsburg is designated as of counsel. In earlier-filed Case No. 18-1515C, B&O also had

filed a motion to intervene, which the court granted. Todd Overman originally was counsel

of record for intervenor B&O in Case No. 18-1515C. Subsequently in Case No. 18-1515C,

Richard Arnholt was substituted as counsel of record for intervenor B&O, and Todd

Overman was designated as of counsel. In the above-captioned, current protest, Richard

Arnholt is counsel of record for intervenor, and Todd Overman is designated as of

counsel.

21

determine whether the offered prices were “fair and reasonable, complete,

balanced and/or realistic.” (emphasis added). The fact that the evaluation

criteria advised that prices would be evaluated for completeness is critical

because that section defined a complete price as one that was “in

compliance with the Price Volume instructions in the solicitation.” In this

way, the evaluation criteria provided that proposals would be evaluated

based on their compliance with the proposal preparation instructions.

Further, the preparation instructions advise that proposals must include a

“completed Schedule B.” This instruction is significant because it means

that the evaluation would factor in whether offerors had submitted complete

price schedules and could reject proposals as noncompliant on this basis.

As a final step in this analysis, we highlight that the agency amended the

solicitation to require offerors to include the government-provided amounts

for the reimbursable CLINs on their price schedules. Thus, the terms of the

solicitation show that the evaluation criteria contemplated a compliance

check whereby the agency could reject a proposal as noncompliant when

the price schedule did not include the government-provided amounts for the

reimbursable CLINs. In view of the fact that Safeguard did not include the

government-provided amounts on its price schedule, we find that the

agency reasonably evaluated its proposal as noncompliant. Accordingly, we

deny this protest allegation.

Id. at 2-3 (internal references, citations, and footnote omitted).

On Friday, January 11, 2019, after the business hours of the Clerk’s Office had

ended, Safeguard filed a complaint in the above-captioned protest in this court. On

Monday, January 14, 2019, the court was closed due to inclement weather. On Tuesday,

January 15, 2019, the Clerk’s Office assigned the above-captioned protest to the

undersigned. That same day, defendant filed a motion to stay the above-captioned protest

due to a lapse of appropriations for the United States Department of Justice, which

defendant noted had started “[a]t the end of the day on December 21, 2018.” Also on

January 15, 2019, B&O filed a motion to intervene in this protest, which the court granted.

Additionally, on January 15, 2019, the court issued an Order directing protestor and B&O

to file responses to defendant’s motion to stay the above-captioned protest. In the

responses to defendant’s motion to stay, neither protestor nor B&O opposed defendant’s

January 15, 2019 motion to stay. Therefore, the court granted defendant’s motion to stay

the above-captioned protest. On January 31, 2019, after appropriations had been

restored to the Department of Justice, the court issued an Order lifting the stay in the

above-captioned protest.

On February 1, 2019, protestor filed a four-count amended complaint in this court.

In Count I of the amended complaint, protestor argues that the Agency arbitrarily and

capriciously disqualified Safeguard’s proposal for failing to include the government

provided “plug numbers” in Amendment No. 3 to the Solicitation. In Count II, protestor

asserts that the Agency’s disqualification of Safeguard was arbitrary and capricious

22

because the Agency did not consider whether the omission of the plug numbers was an

“‘informality’ or ‘minor irregularity’” subject to waiver under FAR clause 52.212-1. In Count

III of the amended complaint, protestor contends that the Agency breached the covenant

of good faith and fair dealing by failing to consider Safeguard’s proposal in a fair and

honest manner. Count III also asserts that the Agency’s disqualification of Safeguard was

“pretextual” because of “the checkered history and ongoing litigation between Safeguard

and the Agency.” In Count IV of the amended complaint, protestor requests a permanent

injunction, and, in protestor’s request for relief, protestor requests that the court

permanently enjoin performance under the B&O Contract and require that the Agency

reevaluate Safeguard’s proposal. Protestor also requests a declaration that the Agency’s

decision to disqualify Safeguard’s proposal was arbitrary and capricious, as well as

“[s]uch further relief as this Court deems just and proper, including attorney fees under

the Equal Access to Justice Act.”

On February 26, 2019, defendant filed the administrative record in the above-

captioned protest, which contained twenty-four tabs of documents. During the evening on

March 4, 2019, in accordance with the court’s instructions during an earlier conference

with the parties, counsel of record for protestor sent an email message to the court’s email

address, on which counsels of record for defendant and defendant-intervenor were

copied, asserting that the administrative record submitted by defendant was not complete

because the administrative record did not contain any documents relating to Count III of

the protestor’s amended complaint. In the March 4, 2019 email message, counsel of

record for protestor requested to take the depositions of “the Contracting Officer, the

Source Selection Authority, and the Legal Advisor.” On March 5, 2019, the court held a

hearing with the parties to discuss counsel of record for protestor’s March 4, 2019 email

message, and, on March 6, 2019, the court issued an Order denying protestor’s request

to depose Agency personnel, stating, “at this time, protestor has not sufficiently supported

its request for discovery related to Count III of protestor’s amended complaint.” (citing

AgustaWestland N. Am., Inc. v. United States, 880 F.3d 1326, 1332 (Fed. Cir. 2018);

Torres Advanced Enter. Sols., LLC v. United States, 133 Fed. Cl. 496, 521 (2017); and

Jacobs Tech. Inc. v. United States, 131 Fed. Cl. 430, 454-55 (2017)). In the March 6,

2019 Order, the court also directed counsel of record for defendant to consult with the

Agency in order to discuss the alleged omitted documents which protestor alleged should

have been included in the administrative record previously filed by defendant on February

26, 2019.

On March 15, 2019, defendant filed a corrected administrative record in the above-

captioned protest, which contained thirteen additional tabs of documents.10 Protestor also

moved to supplement the administrative record with a January 31, 2019 affidavit signed

by Diana Parks Curran, an attorney who had appeared for Safeguard in its protests at the

GAO and who was designated as of counsel in Case No. 18-1515C in this court,11 as well

10Any reference below to the administrative record in this Opinion refers to the corrected

administrative record filed by defendant on March 15, 2019.

11Diana Parks Curran has not been designated as of counsel in the above-captioned,

current protest.

23

as a March 11, 2019 affidavit signed by Sadananda Suresh Prabhu, the president of SRM

Group. In the affidavit signed by Diana Parks Curran, Ms. Curran discusses verbal

conversations between Ms. Curran and James Caine, legal advisor for the Agency, in

which Mr. Caine allegedly made statements such as “‘it is not a secret that there is bad

blood between FLETC and [SRM’s President] Suresh [Prabhu].’” (alterations in original).

Diana Parks Curran attached to her affidavit a timeline of events created by Ms. Curran,

which recounted her version of the events related to SRM Group’s protests at the GAO,

as well as events related to appeals filed by SRM Group at the United States Civilian

Board of Contract Appeals. In the March 11, 2019 affidavit signed by Sadananda Suresh

Prabhu, Mr. Prabhu alleges that James Caine called him “‘greedy’” and “‘unscrupulous.’”

According to Mr. Prabhu’s affidavit, after Safeguard had filed an amended request for an

equitable adjustment with the Agency:

[O]n or about September 25, 2017, Ms. Wood called me wanting to know

why SRM had chosen to file another REA [request for equitable

adjustment]. She stated that I had “humiliated” her by filing the Amended

REA and vowed never to work with me or SRM in the future. I asked her if

that meant that DHS would not renew SRM’s Contract, and her response

was, “Nobody who has ever sued the Government has been a [sic] awarded

a Contract.”

During that same telephone conversation in September 2017, Ms. Wood

told me that she would no longer talk to me or meet with me. Since then,

Ms. Wood has refused to meet with either me or SRM’s Program Manager

for the Contract, Mr. Larry McLendon.

Defendant and defendant-intervenor filed oppositions in response to protestor’s

March 15, 2019 motion to supplement the administrative record, and, on March 21, 2019,

the court held a hearing with the parties regarding the parties’ filings related to protestor’s

March 15, 2019 motion. On March 22, 2019, the court issued an Order denying protestor’s

March 15, 2019 motion and stating that “[s]upplementation of the administrative record

with the proffered documents is not warranted at this time because, for the reasons

discussed with the parties during the hearing, as well as the documents already included

in the administrative record, the proffered documents are not necessary for effective

judicial review.” (citing AgustaWestland N. Am., Inc. v. United States, 880 F.3d at 1331-

32; and Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1380 (Fed. Cir. 2009)).

On April 2, 2019, protestor and defendant filed simultaneous motions for judgment

on the administrative record. Also on April 2, 2019, defendant-intervenor filed a motion to

dismiss, or, in the alternative, cross-motion for judgment on the administrative record. In

its April 2, 2019 motion to dismiss, defendant-intervenor argued that the court should

dismiss Safeguard’s protest because Safeguard lacks standing, as Safeguard allegedly

is not an 8(a) eligible joint venture and, consequently, could not have been awarded a

contract under the Solicitation, which was set-aside for 8(a) offerors.12 On April 16, 2019,

12 Defendant has not argued that Safeguard lacks standing in the above-captioned

protest. At the May 1, 2019 oral argument, in response to a question by the court

24

protestor, defendant, and defendant-intervenor filed simultaneous replies. On May 1,

2019, the court heard oral argument in the above-captioned protest.

DISCUSSION

The parties have cross-moved for judgment on the administrative record. Rule

52.1(c)(1) (2019) of the Rules of the United States Court of Federal Claims (RCFC)

governs motions for judgment on the administrative record. The court’s inquiry is directed

to “‘whether, given all the disputed and undisputed facts, a party has met its burden of

proof based on the evidence in the record.’” Mgmt. & Training Corp. v. United States, 115

Fed. Cl. 26, 40 (2014) (quoting A & D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126,

131 (2006) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57 (Fed. Cir.

2005))); see also Centerra Grp., LLC v. United States, 138 Fed. Cl. 407, 412 (2018) (citing

Bannum, Inc. v. United States, 404 F.3d at 1356-57); Informatics Applications Grp., Inc.

v. United States, 132 Fed. Cl. 519, 524 (2017) (citation omitted); Strategic Bus. Sols., Inc.

v. United States, 129 Fed. Cl. 621, 627 (2016), aff’d, 711 F. App’x 651 (Fed. Cir. 2018);

Rotech Healthcare Inc. v. United States, 118 Fed. Cl. 408, 413 (2014); Eco Tour

Adventures, Inc. v. United States, 114 Fed. Cl. 6, 21 (2013); DMS All-Star Joint Venture

v. United States, 90 Fed. Cl. 653, 661 (2010). Pursuant to RCFC 52.1, in a bid protest,

the court reviews the agency’s procurement decision to determine whether it is supported

by the administrative record. See CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl.

462, 481 (2013); see also CR/ZWS LLC v. United States, 138 Fed. Cl. 212, 223 (2018)

(citing Bannum, Inc. v. United States, 404 F.3d at 1353-54).

The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,

§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)–(4)

(2018)), amended the Tucker Act to establish a statutory basis for bid protests in the

United States Court of Federal Claims. See Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001); see also Sys.

Application & Techs., Inc. v. United States, 691 F.3d 1374, 1380 (Fed. Cir. 2012)

(explaining that the Tucker Act expressly waives sovereign immunity for claims against

the United States in bid protests). The statute provides that protests of agency

procurement decisions are to be reviewed under APA standards, making applicable the

standards outlined in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and

the line of cases following that decision. See, e.g., Per Aarsleff A/S v. United States, 829

F.3d 1303, 1309 (Fed. Cir. 2016) (“Protests of agency procurement decisions are

reviewed under the standards set forth in the Administrative Procedure Act (‘APA’), see

28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706), ‘by which an agency’s decision is to be

set aside only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law[.]’” (quoting NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159

(Fed. Cir. 2004)) (citing PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.

2010))); Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332; Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir.

2010) (“Following passage of the APA in 1946, the District of Columbia Circuit in Scanwell

regarding defendant-intervenor’s motion to dismiss and whether there was a standing

issue, counsel of record for defendant stated, “I don’t perceive one, Your Honor.”

25

Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that challenges to awards of

government contracts were reviewable in federal district courts pursuant to the judicial

review provisions of the APA.”); Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,

1329 (Fed. Cir.) (citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d at 864, 868, for its

“reasoning that suits challenging the award process are in the public interest and

disappointed bidders are the parties with an incentive to enforce the law”), reh’g denied

(Fed. Cir. 2004); Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed.

Cir. 2004) (“Under the APA standard as applied in the Scanwell line of cases, and now in

ADRA cases, ‘a bid award may be set aside if either (1) the procurement official’s decision

lacked a rational basis; or (2) the procurement procedure involved a violation of regulation

or procedure.’” (quoting Impresa Construzioni Geom. Domenico Garufi v. United States,

238 F.3d at 1332)); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319.

When discussing the appropriate standard of review for bid protest cases, the

United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and

(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United

States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See

Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir.) (“‘[T]he proper standard

to be applied [to the merits of] bid protest cases is provided by 5 U.S.C. § 706(2)(A)

[(2006)]: 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.”’” (alterations in original)

(quoting Banknote Corp. of Am. v. United States, 365 F.3d at 1350-51 (citing Advanced

Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.), reh’g denied

(Fed. Cir. 2000)))), reh’g and reh’g en banc denied (Fed. Cir. 2013). The statute says that

agency procurement actions should be set aside when they are “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law,” or “without observance of

procedure required by law.” 5 U.S.C. § 706(2)(A), (D) (2018);13 see also Tinton Falls

13 The language of 5 U.S.C. § 706 provides in full:

To the extent necessary to decision and when presented, the reviewing

court shall decide all relevant questions of law, interpret constitutional and

statutory provisions, and determine the meaning or applicability of the terms

of an agency action. The reviewing court shall—

(1) compel agency action unlawfully withheld or unreasonably delayed;

and

(2) hold unlawful and set aside agency action, findings, and conclusions

found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

26

Lodging Realty, LLC v. United States, 800 F.3d 1353, 1358 (Fed. Cir. 2015); Orion Tech.,

Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir. 2013); COMINT Sys. Corp. v. United

States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We evaluate agency actions according to

the standards set forth in the Administrative Procedure Act; namely, for whether they are

‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”

(quoting 5 U.S.C. § 706(2)(A); and Bannum, Inc. v. United States, 404 F.3d at 1351));

Savantage Fin. Servs. Inc., v. United States, 595 F.3d 1282, 1285-86 (Fed. Cir. 2010);

Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009); Axiom Res.

Mgmt., Inc. v. United States, 564 F.3d at 1381 (noting arbitrary and capricious standard

set forth in 5 U.S.C. § 706(2)(A), and reaffirming the analysis of Impresa Construzioni

Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue & Gold Fleet, L.P. v.

United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry is whether the

[government]’s procurement decision was “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.”’” (quoting Bannum, Inc. v. United States, 404

F.3d at 1351 (quoting 5 U.S.C. § 706(2)(A) (2000)))); NVT Techs., Inc. v. United States,

370 F.3d at 1159 (“Bid protest actions are subject to the standard of review established

under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 28 U.S.C. §

1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is ‘arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law,’ 5 U.S.C. §

706(2)(A) (2000).” (internal citations omitted)); Info. Tech. & Applications Corp. v. United

States, 316 F.3d at 1319 (“Consequently, our inquiry is whether the Air Force’s

procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.’ 5 U.S.C. § 706(2)(A) (2000).”); Synergy Sols., Inc. v. United

States, 133 Fed. Cl. 716, 734 (2017) (citing Banknote Corp. of Am. v. United States, 365

F.3d at 1350); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. at 22; Contracting,

Consulting, Eng’g LLC v. United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest

case, the agency’s award must be upheld unless it is ‘arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.’” Turner Constr. Co. v. United States,

645 F.3d 1377, 1383 (Fed. Cir.) (quoting PAI Corp. v. United States, 614 F.3d at 1351),

(C) in excess of statutory jurisdiction, authority, or limitations, or short

of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject to sections

556 and 557 of this title or otherwise reviewed on the record of

an agency hearing provided by statute; or

(F) unwarranted by the facts to the extent that the facts are subject

to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the whole

record or those parts of it cited by a party, and due account shall be taken

of the rule of prejudicial error.

5 U.S.C. § 706.

27

reh’g en banc denied (Fed. Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United

States, 800 F.3d at 1358 (“In applying this [arbitrary and capricious] standard to bid

protests, our task is to determine whether the procurement official’s decision lacked a

rational basis or the procurement procedure involved a violation of a regulation or

procedure.” (citing Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285-86));

Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir.), reh’g

en banc denied (Fed. Cir. 2013); McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402

(2013) (“The first step is to demonstrate error, that is, to show that the agency acted in an

arbitrary and capricious manner, without a rational basis or contrary to law.”);

PlanetSpace, Inc. v. United States, 92 Fed. Cl. 520, 531-32 (“Stated another way, a

plaintiff must show that the agency’s decision either lacked a rational basis or was

contrary to law.” (citing Weeks Marine, Inc. v. United States, 575 F.3d at 1358)),

subsequent determination, 96 Fed. Cl. 119 (2010).

The United States Supreme Court has identified sample grounds which can

constitute arbitrary or capricious agency action:

[W]e will not vacate an agency’s decision unless it “has relied on factors

which Congress has not intended it to consider, entirely failed to consider

an important aspect of the problem, offered an explanation for its decision

that runs counter to the evidence before the agency, or is so implausible

that it could not be ascribed to a difference in view or the product of agency

expertise.”

Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting

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

also F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 552 (2009); Tinton Falls

Lodging Realty, LLC v. United States, 800 F.3d at 1358; Ala. Aircraft Indus., Inc.-

Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009), reh’g and reh’g en

banc denied (Fed. Cir. 2010); In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002)

(“[T]he agency tribunal must present a full and reasoned explanation of its decision. . . .

The reviewing court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v.

United States, 74 Fed. Cl. 277, 285-86 (2006), appeal dismissed sub nom. Textron, Inc.

v. Ocean Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States

Supreme Court also has cautioned, however, that “courts are not free to impose upon

agencies specific procedural requirements that have no basis in the APA.” Pension

Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654 (1990).

Under an arbitrary or capricious standard, the reviewing court should not substitute

its judgment for that of the agency, but should review the basis for the agency decision to

determine if it was legally permissible, reasonable, and supported by the facts. See Motor

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (“The scope of

review under the ‘arbitrary and capricious’ standard is narrow and a court is not to

substitute its judgment for that of the agency.”); see also Dell Fed. Sys., L.P. v. United

States, 906 F.3d 982, 990 (Fed. Cir. 2018); Turner Constr. Co., Inc. v. United States, 645

F.3d at 1383; R & W Flammann GmbH v. United States, 339 F.3d 1320, 1322 (Fed. Cir.

28

2003) (citing Ray v. Lehman, 55 F.3d 606, 608 (Fed. Cir.), cert. denied, 516 U.S. 916

(1995)); Synergy Sols., Inc. v. United States, 133 Fed. Cl. at 735 (citing Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33). “‘“If the

court finds a reasonable basis for the agency’s action, the court should stay its hand even

though it might, as an original proposition, have reached a different conclusion as to the

proper administration and application of the procurement regulations.”’” Weeks Marine,

Inc. v. United States, 575 F.3d at 1371 (quoting Honeywell, Inc. v. United States, 870

F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289,

1301 (D.C. Cir. 1971))); Limco Airepair, Inc. v. United States, 130 Fed. Cl. 544, 550 (2017)

(citation omitted); Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 631 (2014);

Davis Boat Works, Inc. v. United States, 111 Fed. Cl. 342, 349 (2013); Norsat Int’l

[America], Inc. v. United States, 111 Fed. Cl. 483, 493 (2013); HP Enter. Servs., LLC v.

United States, 104 Fed. Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United

States, 101 Fed. Cl. 765, 780 (2011).

Stated otherwise by the United States Supreme Court:

Section 706(2)(A) requires a finding that the actual choice made was not

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

with law.” To make this finding the court must consider whether the decision

was based on a consideration of the relevant factors and whether there has

been a clear error of judgment. Although this inquiry into the facts is to be

searching and careful, the ultimate standard of review is a narrow one. The

court is not empowered to substitute its judgment for that of the agency.

Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (internal citations

omitted), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see

also U.S. Postal Serv. v. Gregory, 534 U.S. 1, 6-7 (2001); Bowman Transp., Inc. v.

Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956

(1975); Co-Steel Raritan, Inc. v. Int’l Trade Comm’n, 357 F.3d 1294, 1309 (Fed. Cir. 2004)

(In discussing the “arbitrary, capricious, and abuse of discretion, or otherwise not in

accordance with the law” standard, the Federal Circuit stated: “the ultimate standard of

review is a narrow one. The court is not empowered to substitute its judgment for that of

the agency.”); In re Sang Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v.

United States, 216 F.3d at 1058 (“The arbitrary and capricious standard applicable here

is highly deferential. This standard requires a reviewing court to sustain an agency action

evincing rational reasoning and consideration of relevant factors.” (citing Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &

Space Co. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); By Light Prof’l IT Servs., Inc. v.

United States, 131 Fed. Cl. 358, 366 (2017); BCPeabody Constr. Servs., Inc. v. United

States, 112 Fed. Cl. 502, 508 (2013) (“The court ‘is not empowered to substitute its

judgment for that of the agency,’ and it must uphold an agency’s decision against a

challenge if the ‘contracting agency provided a coherent and reasonable explanation of

its exercise of discretion.’” (internal citations omitted) (quoting Keeton Corrs., Inc. v.

United States, 59 Fed. Cl. 753, 755, recons. denied, 60 Fed. Cl. 251 (2004); and Axiom

Res. Mgmt., Inc. v. United States, 564 F.3d at 1381)), appeal dismissed, 559 F. App’x

29

1033 (Fed. Cir. 2014); Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 382;

Alamo Travel Grp., LP v. United States, 108 Fed. Cl. 224, 231 (2012); ManTech

Telecomms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 63 (2001), aff’d, 30 F.

App’x 995 (Fed. Cir. 2002).

According to the United States Court of Appeals for the Federal Circuit:

Effective contracting demands broad discretion. Burroughs Corp. v. United

States, 223 Ct. Cl. 53, 617 F.2d 590, 598 (1980); Sperry Flight Sys. Div. v.

United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,

Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater

Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69

(1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d, 914

F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good

deal of discretion in determining which bid is the most advantageous to the

Government.” Tidewater Management Servs., 573 F.2d at 73, 216 Ct. Cl.

69.

Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958-59; see also Res-Care, Inc. v.

United States, 735 F.3d 1384, 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal

procurement entity, has ‘broad discretion to determine what particular method of

procurement will be in the best interests of the United States in a particular situation.’”

(quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009))), reh’g

en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995

(Fed. Cir. 1996); Geo-Med, LLC v. United States, 126 Fed. Cl. 440, 449 (2016); Cybertech

Grp., Inc. v. United States, 48 Fed. Cl. 638, 646 (2001) (“The court recognizes that the

agency possesses wide discretion in the application of procurement regulations.”);

Furthermore, according to the United States Court of Appeals for the Federal Circuit:

Contracting officers “are entitled to exercise discretion upon a broad range

of issues confronting them in the procurement process.” Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,

1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,

procurement decisions are subject to a “highly deferential rational basis

review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.

Cir. 2008) (internal quotation marks omitted).

PAI Corp. v. United States, 614 F.3d at 1351; see also AgustaWestland N. Am., Inc. v.

United States, 880 F.3d at 1332 (“Where, as here, a bid protester challenges the

procurement official’s decision as lacking a rational basis, we must determine whether

‘the contracting agency provided a coherent and reasonable explanation of its exercise

of discretion,’ recognizing that ‘contracting officers are entitled to exercise discretion upon

a broad range of issues confronting them in the procurement process.’” (quoting Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33 (internal

quotation marks and citation omitted))); Weeks Marine, Inc. v. United States, 575 F.3d at

1368-69 (“We have stated that procurement decisions ‘invoke [ ] “highly deferential”

30

rational basis review.’ Under that standard, we sustain an agency action ‘evincing rational

reasoning and consideration of relevant factors.’” (alteration in original) (quoting CHE

Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,

Inc. v. United States, 216 F.3d at 1058))).

A disappointed bidder has the burden of demonstrating the arbitrary and capricious

nature of the agency decision by a preponderance of the evidence. See Tinton Fall

Lodging Realty, LLC v. United Sates, 800 F.3d at 1364; see also Grumman Data Sys.

Corp. v. Dalton, 88 F.3d at 995-96; Enhanced Veterans Sols., Inc. v. United States, 131

Fed. Cl. 565, 578 (2017); Davis Boat Works, Inc. v. United States, 111 Fed. Cl. at 349;

Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 340. The Federal

Circuit has indicated that “[t]his court will not overturn a contracting officer’s determination

unless it is arbitrary, capricious, or otherwise contrary to law. To demonstrate that such a

determination is arbitrary or capricious, a protester must identify ‘hard facts’; a mere

inference or suspicion . . . is not enough.” PAI Corp. v. United States, 614 F.3d at 1352

(citing John C. Grimberg Co. v. United States, 185 F.3d 1297, 1300 (Fed. Cir. 1999)); see

also Turner Constr. Co., Inc. v. United States, 645 F.3d at 1387; Sierra Nevada Corp. v.

United States, 107 Fed. Cl. 735, 759 (2012); Filtration Dev. Co., LLC v. United States, 60

Fed. Cl. 371, 380 (2004).

A bid protest proceeds in two steps. First . . . the trial court determines

whether the government acted without rational basis or contrary to law when

evaluating the bids and awarding the contract. Second . . . if the trial court

finds that the government’s conduct fails the APA review under 5 U.S.C.

§ 706(2)(A), then it proceeds to determine, as a factual matter, if the bid

protester was prejudiced by that conduct.

Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs. Corp. v.

United States, 134 Fed. Cl. 550, 555 (2017); FirstLine Transp. Sec., Inc. v. United States,

119 Fed. Cl. 116, 126 (2014), appeal dismissed (Fed. Cir. 2015); Eco Tour Adventures,

Inc. v. United States, 114 Fed. Cl. at 22; Archura LLC v. United States, 112 Fed. Cl. at

496. To prevail in a bid protest case, the protestor not only must show that the

government’s actions were arbitrary, capricious, or otherwise not in accordance with the

law, but the protestor also must show that it was prejudiced by the government’s actions.

See 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of prejudicial error.”); see

also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid

protest case, the inquiry is whether the agency’s action was arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law and, if so, whether the error

is prejudicial.”); IT Enter. Sols. JV, LLC v. United States, 132 Fed. Cl. 158, 173 (2017)

(citing Bannum v. United States, 404 F.3d at 1357-58); Linc Gov’t Servs., LLC v. United

States, 96 Fed. Cl. 672, 694-96 (2010). In describing the prejudice requirement, the

Federal Circuit also has held that:

To prevail in a bid protest, a protester must show a significant, prejudicial

error in the procurement process. See Statistica, Inc. v. Christopher, 102

F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d

31

1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not

required to show that but for the alleged error, the protester would have

been awarded the contract.” Data General, 78 F.3d at 1562 (citation

omitted). Rather, the protester must show “that there was a substantial

chance it would have received the contract award but for that error.”

Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d

1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, 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.’” (citation omitted)).

Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g denied

(Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d

at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en

banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 316 F.3d

at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332-33; OMV Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000);

Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile

Networks USA, LLC v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).

In Data General Corp. v. Johnson, the United States Court of Appeals for the

Federal Circuit wrote:

We think that the appropriate standard is that, to 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 . . . . The standard reflects a

reasonable balance between the importance of (1) averting unwarranted

interruptions of and interferences with the procurement process and (2)

ensuring that protesters who have been adversely affected by allegedly

significant error in the procurement process have a forum available to vent

their grievances. This is a refinement and clarification of the “substantial

chance” language of CACI, Inc.-Fed. [v. United States], 719 F.2d at 1574.

Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.), reh’g denied, en banc

suggestion declined (Fed. Cir. 1996); see also Glenn Def. Marine (ASIA), PTE Ltd. v.

United States, 720 F.3d at 912; Bannum, Inc. v. United States, 404 F.3d at 1353, 1358

(“The trial court was required to determine whether these errors in the procurement

process significantly prejudiced Bannum . . . . To establish ‘significant prejudice’ Bannum

must show that there was a ‘substantial chance’ it would have received the contract award

but for the [government’s] errors” in the bid process. (citing Info. Tech. & Applications

Corp. v. United States, 316 F.3d at 1319; Alfa Laval Separation, Inc. v. United States,

175 F.3d at 1367; Statistica, Inc. v. Christopher, 102 F.3d at 1581; and Data Gen. Corp.

v. Johnson, 78 F.3d at 1562); see also Todd Constr., L.P. v. United States, 656 F.3d

1306, 1315 (Fed. Cir. 2011); Advanced Data Concepts, Inc. v. United States, 216 F.3d at

1057 (using a “reasonable likelihood” rule); Stratos Mobile Networks USA, LLC v. United

32

States, 213 F.3d at 1380 (using a “substantial chance” test); Am. Corr. Healthcare, Inc.

v. United States, 137 Fed. Cl. 395, 410 (2018) (using a “substantial chance” test); Vintage

Autoworks, Inc. v. United States, 132 Fed. Cl. 143, 149 (2017) (using a “substantial

chance” test); Active Network, LLC v. United States, 130 Fed. Cl. 421, 427 (2017) (using

a “substantial chance” test); Archura LLC v. United States, 112 Fed. Cl. at 496 (using a

“substantial chance” test); Info. Scis. Corp. v. United States, 73 Fed. Cl. 70, 96 (2006)

(using a “substantial chance” test), recons. in part, 75 Fed. Cl. 406 (2007).

Whether Offerors Were Required to Price CLINs X007AA and X007AB

In the above-captioned protest, protestor argues that the Solicitation did not require

offerors to price CLINs X007AA and X007AB, while defendant and defendant-intervenor

argue that the terms of the Solicitation, and amendments thereto, required offerors to

price CLINs X007AA and X007AB. Protestor notes that the descriptions in Schedule of

Supplies/Services for CLINs X007AA and X007AB stated “*****DO NOT SUBMIT

PRICING FOR THESE CLINS*****” and asserts that “[t]his explicit direction” was never

altered in any of the five amendments to the Solicitation. (capitalization in original).

Protestor argues that the statement in the Agency’s answer to question 9 in Amendment

No. 3 to the Solicitation, which stated to “please include” the list of “‘not-to-exceed’

amounts” for CLINs X007AA and X007AB, was a “suggestion” that was “precatory rather

than mandatory” and “cannot be a basis for disqualifying proposals as noncompliant.”

Protestor argues that its proposal, which did not include amounts for CLINs X007AA and

X007AB, complied with the statement in the Schedule of Supplies/Services to “NOT

SUBMIT PRICING FOR” CLINs X007AA and X007AB. (capitalization in original).

Protestor also argues that, “even if there were an argument that a superficial contradiction

existed between the original Solicitation and Q&A [question and answer] No. 9 in

Amendment 3, this argument would be foreclosed by the Solicitation’s Order of

Precedence Clause.” According to protestor:

This clause [the Order of Precedence clause] resolves any potential internal

conflict by stating that “[a]ny inconsistencies in this solicitation shall be

resolved by giving precedence in the following order: (1) the schedule of

supplies/services . . . (4) addenda to this solicitation or contract . . . .

Given this clause, even assuming, arguendo, that Q&A No. 9 required

offerors to fill in the plug numbers for the Service Work Request CLINs, the

language directing offerors not to submit pricing for these same CLINs –

which appears in the Schedule of Supplies/Services – would take

precedence and control.

(emphasis in original) (footnote omitted).

Both defendant and defendant-intervenor, however, assert that offerors were

required to include in their price proposals the pricing information for CLINs X007AA and

X007AB. In defendant’s cross-motion for judgment on the administrative record,

defendant argues that, “[a]lthough the solicitation originally omitted the Government-

33

provided pricing for the 16 maintenance request CLINs, Amendment 0003 to the

solicitation unequivocally remedied that omission and instructed offerors to ‘include’

Government-provided prices for these CLINS ‘for bidding purposes,’ which totaled

$6,121,228.”14 Defendant asserts:

As the Second Circuit stated in Weaver v. Axis Surplus Ins. Co., 639 Fed. Appx.

764, 767 (2d Cir. 2016), “[a] demand may be couched in the customarily-used

polite language of the day.” . . . Similarly, here, the word “please,” by itself, is not

sufficient to render Amendment 0003’s pricing instructions precatory.

(alteration in original). Regarding protestor’s argument concerning the Solicitation’s Order

of Precedence clause, defendant asserts that Amendment No. 3 to the Solicitation should

not be classified as “addenda” to the Solicitation, and that “the original instruction to not

submit prices was intended to direct offerors to not submit their own prices for the

maintenance request CLINs.” (emphasis in original).

In defendant-intervenor’s cross-motion for judgment on the administrative record,

defendant-intervenor argues:

The Solicitation required offerors to submit a completed Schedule B and to

include pricing for the phase-in period, base period, and seven option

periods, which included CLINs X007AA and X007AB. Here, the omitted

CLIN pricing represented a sum of $6,121,288 over 16 CLINs. While

Amendment 0003 clarified the amounts to insert into Schedule B for

offerors’ price proposals, the requirement to submit a completed Schedule

B was present from the time of the original Solicitation.

(internal references omitted). Defendant-intervenor also contends that, “[w]hile Court of

Federal Claims precedent does not appear to directly address the specific ‘please include’

language, GAO has found that even permissive language is not always permissive when

interpreted consistently with the solicitation as a whole.” (citation omitted). According to

defendant-intervenor, “the Solicitation read as a whole required a completed Schedule B,

and it was not possible to submit a completed Schedule B without the numbers that

offerors were instructed to ‘please include’ in Amendment 0003.” Additionally, defendant-

intervenor argues, as does defendant, that protestor’s assertion addressing the

Solicitation’s Order of Precedence clause fails because Amendment No. 3 is not

“addenda” to the Solicitation and “the proper interpretation [of Amendment No. 3] requires

reading the Solicitation as a whole and as amended.”

The interpretation of a solicitation is a question of law. See Synergy Sols., Inc. v.

United States, 133 Fed. Cl. at 736 (quoting Banknote Corp. of Am., Inc. v. United States,

14As noted above and discussed below, answer 9 in Amendment No. 3 to the Solicitation

stated: “For bidding purposes please include the following ‘not-to-exceed’ amounts

in the applicable CLIN” and provided a chart with amounts for CLINs X007AA and

X007AB. (emphasis in original).

34

365 F.3d at 1353); see also Greenland Contractors I/S v. United States, 131 Fed. Cl. 216,

227 (2017) (citing CBY Design Builders v. United States, 105 Fed. Cl. 303, 327 (2012)).

Regarding the interpretation of a solicitation, the United States Court of Appeals for the

Federal Circuit has stated:

[“]We begin with the plain language of the document. The solicitation is

ambiguous only if its language is susceptible to more than one reasonable

interpretation. If the provisions of the solicitation are clear and

unambiguous, they must be given their plain and ordinary meaning; we may

not resort to extrinsic evidence to interpret them. Finally, we must consider

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

gives reasonable meaning to all of its provisions.[”]

See Per Aarsleff A/S v. United States, 829 F.3d at 1309 (emphasis in original) (quoting

Banknote Corp. of Am., Inc. v. United States, 365 F.3d at 1353); see also ARxIUM, Inc.

v. United States, 136 Fed. Cl. 188, 198 (2018) (“When interpreting a solicitation, the

document must be considered as a whole and interpreted in a manner that harmonizes

and gives reasonable meaning to all of its provisions.” (internal quotation marks and

citations omitted)).

Interpretation of an amendment to a solicitation “begins with an examination of its

[the amendment’s] plain language.” Lab. Corp. of Am. v. United States, 108 Fed. Cl. 549,

563 (2012) (citations omitted). The court is to interpret the amendment and solicitation

“‘as a whole and in a manner which gives reasonable meaning to all parts and avoids

conflict or surplusage of its provisions.’” See HomeSource Real Estate Asset Servs., Inc.

v. United States, 94 Fed. Cl. 466, 483 (2010) (quoting the undersigned’s decision in

Metro. Van & Storage, Inc. v. United States, 92 Fed. Cl. 232, 264 (2010)), aff’d, 418 F.

App’x 922 (Fed. Cir. 2011); see also BayFirst Sols., LLC v. United States, 102 Fed. Cl.

677, 689 (2012) (considering the meaning of an amendment to a solicitation in the context

of the solicitation’s requirements).

In the above-captioned protest, the Solicitation’s Schedule of Supplies/Services

stated, in the all of the descriptions of CLINs X007AA, “*****DO NOT SUBMIT PRICING

FOR THESE CLINS*****.” (capitalization in original). All of the descriptions in the

Schedule of Supplies/Services of CLINs X007AB also stated “*****DO NOT SUBMIT

PRICING FOR THESE CLINS*****.” (capitalization in original). Notwithstanding that the

all of the descriptions for CLINs X007AA and X007AB stated “*****DO NOT SUBMIT

PRICING FOR THESE CLINS*****,” the Schedule of Supplies/Services provided a

“QUANTITY” amount of “1,” as well as a “UNIT” amount of “LO”15 for CLINs X007AA and

X007AB in each period of performance. (capitalization in original). The Schedule of

Supplies/Services also provided blank lines under a column labeled “UNIT PRICE” and

under a column labeled “AMOUNT” for CLINs X007AA and X007AB. (capitalization in

original).

15“LO” is not defined in the Solicitation. (capitalization in original). As discussed below,

however, “LO” appears to stand for “LOT.” (capitalization in original).

35

In the Solicitation at issue, below the statement “*****DO NOT SUBMIT PRICING

FOR THESE CLINS*****” in the descriptions of CLINs X007AA, the descriptions of CLINs

X007AA in the Schedule of Supplies/Services Solicitation stated that “[t]hese CLINS

[CLINs X007AA] shall be performed on a fixed price basis and used with service work

requests, internal orders, and over-and-above orders placed against this contract.”

(capitalization in original). Amendment No. 3 modified the above-quoted sentence to

state: “These CLINS [CLINs X007AA] shall be performed on a fixed price basis and used

with service work requests placed against this contract.” The description of CLINs

X007AA further stated: “The amount listed is the Government ‘Ceiling’ and is a ‘not-to-

exceed’ amount with no guarantee that this amount will be used. The amount provided is

shown as a lump sum; however, this does not mean that the contractor will be paid a

lump sum.” Regarding CLINs X007AB, the descriptions of CLINs X007AB stated that

CLINs X007AB were “for reimbursement, at cost, for replacement equipment,” such as

televisions, microwaves, and refrigerators. The description of CLINs X007AB stated:

The amount listed is a “Not-to-Exceed” amount with no guarantee that this

amount will be used. The contractor shall not exceed this amount without

prior approval of the Contracting Officer in writing. The Government will not

be liable for any costs in excess of this amount unless such prior approval

has been obtained.

(capitalization in original). In the paragraph before the CLINs were listed for the base

period of performance, the Schedule of Supplies/Services stated that CLINs 0007AA and

0007AB “are pre-priced and performed as authorized by the Contracting Officer. The

amounts listed for these CLINS are a ‘not to exceed’ amount with no guarantee that the

total amount will be used.” Identical language appeared in the Schedule of

Supplies/Services before the CLINs were listed for each option period of performance.

The Solicitation’s Schedule of Supplies/Services, therefore, indicated, multiple

times, that there should have been a government ceiling or not-to-exceed “amount listed”

or “amount provided” for each of CLINs X007AA and X007AB on the Solicitation’s

Schedule of Supplies/Services. All sixteen of the descriptions of CLINs X007AA and

X007AB indicated that there was to be a ceiling or not-to-exceed “amount listed” or

“amount provided” for CLINs X007AA and X007AB, which the paragraphs preceding each

period of performance stated were “pre-priced” amounts. Offerors were instructed to

“NOT SUBMIT PRICING FOR THESE CLINS [CLINs X007AA and X007AB]” because,

as indicated in the Schedule of Supplies/Services, CLINs X007AA and X007AB were

“pre-priced” by the government as ceiling or not-to-exceed amounts that could not be

exceeded without prior authorization by the contracting officer. Because the amounts for

CLINs X007AA and X007AB were “pre-priced” and the “amounts listed for these CLINS

[CLINs X007AA and X007AB] are a ‘not to exceed’ amount with no guarantee that the

total amount will be used,” offerors did not need to submit their own pricing amounts for

CLINs X007AA and X007AB, as the government already had predetermined the amounts

for CLINs X007AA and X007AB which offerors were not to exceed during performance.

It is undisputed, however, that the Schedule of Supplies/Services in the Solicitation did

not list government ceiling amounts or not-to-exceed amounts for CLINs X007AA and

36

X007AB. It also is undisputed that ceiling amounts or not-to-exceed amounts for CLINs

X007AA and X007AB did not appear elsewhere in the Solicitation as originally issued on

October 11, 2017, although the “pre-priced” amounts for CLINs X007AA and X007AB

subsequently were provided in Amendment No. 3 to the Solicitation.

In Amendment No. 3 to the Solicitation, the Agency responded to 272 questions

posed by potential offerors, including the following question:

(emphasis in original). The agency’s answer to question 9 states that offerors should

“please include” the provided government “‘not-to-exceed’ amounts” for CLINs X007AA

and X007AB “[f]or bidding purposes.” The Agency also provided offerors with the

government ceiling amounts or not-to-exceed amounts that were referenced, but omitted,

in the Solicitation’s Schedule of Supplies/Services for CLINs X007AA and X007AB. In the

Agency’s answer to question 9, the word “please” is used as an adverb to modify the verb

“include.” The Oxford English Dictionary defines the word “please,” when used as an

adverb, as “[u]sed in polite request or agreement, or to add a polite emphasis or urgency:

kindly, if you please.” Please, OXFORD ENGLISH DICTIONARY (3d ed. 2019). The Oxford

English Dictionary defines the word “include” as “[t]o have, put in, or incorporate as part

of a whole.” Include, OXFORD ENGLISH DICTIONARY (3d ed. 2019). Although the adverb

“please” may indicate a “polite request” or “add a polite emphasis,” the word “please” only

is the modifying adverb of the verb “include,” which indicates a direction to “put in.” The

Agency’s answer to question 9 provides the amounts for CLINs X007AA and X007AB

that bidders are to “put in” or “include” in their price proposals in response to the

Solicitation “[f]or bidding purposes.” “[T]he meaning of words depends on their context,”

see Madison Galleries, Ltd. v. United States, 870 F.2d 627, 631 (Fed. Cir. 1989), and the

language used in the Agency’s answer to question 9 can be read as an instruction to

insert the listed amounts for CLINs X007AA and X007AB into the proposals submitted in

response to the Solicitation, with the word “please” used as a “polite” modifier of the verb

“include,” as the more proper interpretation of the Solicitation as issued by the Agency,

including Amendment No. 3 and the answers to the questions which were part of the total

procurement process.

37

Moreover, the Agency’s answer to question 16 in Amendment No. 3 provided:

The Agency’s answer in response to question 16 indicated to offerors that the amounts

listed in the Agency’s answer in response to question 9 for CLINs X007AB were “to be

included for submission in Volume 3-Price.” Neither answer 9 nor answer 16 in

Amendment No. 3 indicate that offerors had discretion as to whether to include the

government ceiling or not-to-exceed amounts for CLINs X007AA and X007AB.

The court must interpret the Agency’s statements in Amendment No. 3 in the

context of the Solicitation. As discussed above, the Schedule of Supplies/Services

indicated that the Solicitation was supposed to have “listed” or “provided” “pre-priced”

government ceiling or not-to-exceed amounts for CLINs X007AA and X007AB. The

Agency did not provide those amounts in the Solicitation as originally issued on October

11, 2017, but the Agency provided the “pre-priced” government ceiling or not-to-exceed

amounts for CLINs X007AA and X007AB in the Agency’s answer to question 9 in

Amendment No. 3. In Amendment No. 3, the Agency instructed offerors to “include” the

amounts listed in answer 9 for CLINs X007AA and X007AB in their price proposals “[f]or

bidding purposes.” The Solicitation’s statement to “NOT SUBMIT PRICING FOR THESE

CLINS [CLINs X007AA and X007AB],” when read in the context of the entire Solicitation

and together with Amendment No. 3, indicated to offerors that offerors should not submit

their own independent pricing for CLINs X007AA and X007AB. Rather, the offerors, when

preparing their price proposals in response to the Solicitation, were to use the government

“pre-priced” ceiling or not-to-exceed amounts provided in Amendment No. 3 for CLINs

X007AA and X007AB and should not have failed to submit pricing information for CLINs

X007AA and X007AB. The court’s interpretation of the Solicitation and Amendment No.

3 provides meaning to all parts of the text of Solicitation, including the text of Amendment

No. 3, and produces no conflict or inconsistency between the terms in the Solicitation and

Amendment No. 3.

That the Schedule of Supplies/Services listed a “QUANTITY” amount of “1” and a

“UNIT” amount of “LO” for each of CLINs X007AA and X007AB also should have indicated

to offerors to include a “UNIT” price and “AMOUNT.” (capitalization in original). Each

period of performance on the Schedule of Supplies/Services is designated as a “LOT.” 16

(capitalization in original). For example, the base period of performance is “LOT I,” the

first option period of performance is designated as “LOT II,” the second option period of

performance is designated as “LOT III,” etc. (capitalization in original). The “QUANTITY”

amount of “1” and a “UNIT” amount of “LO” on the Schedule of Supplies/Services

indicates that offerors were to submit a single “UNIT PRICE” for the relevant “LOT” under

CLINs X007AA and X007AB. (capitalization in original). The “UNIT PRICE” information

16 Although the Solicitation indicated a “UNIT” amount of “LO,” each period of

performance was designated in the Solicitation as a “LOT.” (capitalization in original).

38

for each “LOT” was provided in answer 9 in Amendment No. 3 for CLINs X007AA and

X007AB. (capitalization in original). In B&O’s price proposal, B&O included the respective

CLIN amounts provided in answer 9 in Amendment No. 3 as the “UNIT PRICE” amounts,

as well as the total “AMOUNT” for each lot, for CLINs X007AA and X007AB. If offerors

were not to submit any “UNIT PRICE” or “AMOUNT” for CLINs X007AA and X007AB,

listing a “QUANTITY” amount of “1” and a “UNIT” amount of “LO” in the Solicitation for

each of CLINs X007AA and X007AB would have been unnecessary because the offerors

would not have needed to include the government provided amounts for CLINs X007AA

and X007AB in the “UNIT PRICE” and “AMOUNT” columns. (capitalization in original).

Moreover, protestor’s reliance on the Solicitation’s Order of Precedence clause is

misplaced. The Solicitation’s Order of Precedence clause states:

(s) Order of precedence. Any inconsistencies in this solicitation or contract

shall be resolved by giving precedence in the following order: (1) the

schedule of supplies/services; (2) The Assignments, Disputes, Payments,

Invoice, Other Compliances, Compliance with Laws Unique to Government

Contracts, and Unauthorized Obligations paragraphs of this clause; (3) the

[Federal Acquisition Regulation (FAR)] clause at 52.212-5; (4) addenda to

this solicitation or contract, including any license agreements for computer

software; (5) solicitation provisions if this is a solicitation; (6) other

paragraphs of this clause; (7) the Standard Form 1449; (8) other

documents, exhibits, and attachments; and (9) the specification.

(capitalization and emphasis in original). Because the terms of the Solicitation and

Amendment No. 3 do not conflict, as discussed above, however, the court need not reach

the Solicitation’s Order of Precedence clause to resolve alleged “inconsistencies in this

solicitation” when determining whether offerors were required to include the government

provided ceiling or not-to-exceed amounts for CLINs X007AA and X007AB.

Thus, the court finds that offerors were required to include in their price proposals

the government provided ceiling or not-to-exceed amounts for CLINs X007AA and

X007AB, and that it was not arbitrary and capricious for the Agency to require inclusion

of the amounts for CLINs X007AA and X007AB.

Whether the Agency Arbitrarily and Capriciously Disqualified Safeguard

Protestor argues that, even if the Solicitation and Amendment No. 3 required

offerors to include the “plug numbers” for CLINs X007AA and X007AB, it was

unreasonable for the Agency to disqualify protestor because the Agency did not

“reasonably announce” that offerors could be disqualified for failure to include the

government provided “plug numbers.” Protestor argues:

DHS represented that it disqualified Safeguard based on the following

Solicitation language: “Exceptions to the line item structure in Section B

may result in a bid not considered for award.” (emphasis added). This

39

provision is unqualified and pertains only to the structure of the line

items provided in Section B, which solely outlines a period of performance

schedule and gives a brief description of the phase-in period. Section B

does not refer to pricing any CLINs whatsoever other than CLIN 0001A for

the phase-in period only. The alleged non-compliance in Safeguard’s

proposal relates to Schedule B not Section B. Thus, even assuming

arguendo that DHS identified a non-compliance in Safeguard’s proposal,

DHS still has cited no reasonable basis to disqualify the proposal.

(emphasis in original) (internal references omitted).

Protestor also argues that the Agency arbitrarily and capriciously disqualified

Safeguard’s proposal for failing to include the government provided ceiling or not-to-

exceed amounts for CLINs X007AA and X007AB. Protestor argues that the Agency failed

to consider whether “Safeguard’s omission of the Agency plug numbers constituted an

‘informality’ or ‘minor irregularity’ subject to waiver, under FAR 52.212-1, which was

incorporated into the Solicitation.” According to protestor, the United States Court of

Federal Claims “has held that waiving such minor ‘form over substance’ types of

irregularities are proper exercises of an agency’s discretion.” (citations omitted). Protestor

further argues that the Agency could have resolved Safeguard’s omission of the “plug

numbers” for CLINs X007AA and X007AB through “clarifications.” Protestor also

contends that “the Agency had twice before been able to evaluate Safeguard’s proposal

despite the absence of the plug numbers.”

In defendant’s cross-motion for judgment on the administrative record, defendant

argues that the Solicitation “warns that ‘Pricing Schedule and Periods of Performance

(POP) Service dates for each CLIN are detailed in Section B’ and that ‘[e]xceptions to line

item structure in Section B may result in a bid not considered for award.’” According to

defendant, “Section B includes the Pricing Schedule, as exemplified by Amendment

0003’s reference to ‘Section B Price Schedule,’” and the “‘line item structure in Section B’

refers to CLINs, including the maintenance service request CLINs at issue. Thus,

Safeguard was on notice that its failure to follow Amendment 0003’s line item structure –

and include the maintenance request pricing in its proposal – could result in the rejection

of its proposal.” Defendant cites to FAR § 15.204-2 (2019), titled “Part I -- The Schedule,”

and argues that “Schedule B is simply another way to referring to Section B and vice

versa.”

According to defendant’s motion for judgment on the administrative record, under

FAR clause 52.212-1(g), the Agency may not waive “material errors,” and “[t]his Court

has repeatedly recognized that pricing omissions – like the ones that occurred here – are

material errors.” Defendant argues that Safeguard’s “pricing omissions” violate the terms

of the Solicitation because offerors were required to include the amounts provided by the

government for CLINs X007AA and X007AB. Defendant asserts that Safeguard’s “pricing

omissions” prohibited the Agency from making an “apples-to-apples” comparison of

Safeguard’s total price with other offeror’s total price, which included the government

provided amounts for CLINs X007AA and X007AB.

40

Defendant-intervenor also cites to FAR § 15.204-2 and argues that Safeguard’s

“tortured” argument involving Section B fails because “Section B contains the supplies or

services and their prices, and this section is to ‘[i]nclude a brief description of the supplies

or services; e.g., item number, national stock number/part number if applicable, nouns,

nomenclature, and quantities.’ Those brief descriptions are included on Schedule B.”

(emphasis in original) (quoting FAR § 15.204-2). Regarding the disputed Section B

language in the Solicitation, defendant-intervenor argues:

As Safeguard stated, its limited view of Section B only contained the periods

of performance for the base period and option years as well as a

requirement to price the phase-in period. That, of course, makes no sense.

The cautionary language clearly states that both the “Pricing Schedule” and

the “Periods of Performance for each CLIN” were in Section B, and

Safeguard itself managed to find Schedule B and quote prices for at least

some of the those CLINs.

(emphasis in original) (internal references omitted).

In defendant-intervenor’s motion for judgment on the administrative record,

defendant-intervenor argues that it was not arbitrary or capricious for the Agency to

disqualify Safeguard’s proposal for failing to include the amounts for CLINs X007AA and

X007AB. Defendant-intervenor contends that Safeguard’s omission of the amounts for

CLINs X007AA and X007AB was a material error not subject to waiver because the

amounts were required by the Solicitation and were necessary for the Agency to evaluate

Safeguard’s proposed total price. Defendant-intervenor asserts that Safeguard’s pricing

omission could not have been remedied through clarifications because it is improper to

resolve material errors through clarifications. Defendant-intervenor also argues that the

Solicitation informed offerors that the Agency was intending to award a contract under the

Solicitation without discussions.

The Solicitation in the above-captioned protest incorporated FAR clause 52.212-

1(g), which states that “[t]he Government may reject any or all offers if such action is in

the public interest; accept other than the lowest offer; and waive informalities and minor

irregularities in offers received.” See FAR § 52.212-1(g). Errors or omissions that are

considered to be “material” are not subject to waiver under FAR clause 52.212-1(g). See

ManTech Advanced Sys. Int’l, Inc. v. United States, 141 Fed. Cl. 493, 506 (2019)

(“Because DOJ [the Department of Justice] only had the discretion to waive ‘informalities

and minor irregularities’ [under FAR clause 52.212-1(g)], DOJ cannot waive errors that

were rationally categorized as material.”); see also Bus. Integra, Inc. v. United States,

116 Fed. Cl. 328, 337 (2014) (“Because Business Integra’s error was material, the

government was under no obligation to waive the error or allow Business Integra to

correct the error.”). Errors or omissions are considered to be material when the error or

omission violates an express provision in the Solicitation that serves “a substantive

purpose.” See ManTech Advanced Sys. Int’l, Inc. v. United States, 141 Fed. Cl. at 506

(citations omitted); see also MSC Indus. Direct Co. v. United States, 140 Fed. Cl. 632,

41

643 (2018) (“Under FAR § 52.212-1(g) material elements are those necessary for a

proposal to represent an offer to provide the exact thing called for in the request for

proposals.” (internal quotation marks and citation omitted)). A provision in the Solicitation

“is considered to have a substantive purpose when it is important to the government’s

evaluation, is binding on the offeror, or has more than a negligible impact on the price,

quantity, or quality of the bid.” ManTech Advanced Sys. Int’l, Inc. v. United States, 141

Fed. Cl. at 508 (citations omitted). Under FAR clause 52.212-1(g), “omissions in

proposals are material omissions when the excluded information is ‘important to the

government’s evaluation of the offer.’” MSC Indus. Direct Co. v. United States, 140 Fed.

Cl. at 643 (quoting Bus. Integra, Inc. v. United States, 116 Fed. Cl. at 334). Moreover,

even if an error or omission is subject to waiver under FAR clause 52.212-1(g), an agency

is not required to waive the error or omission. See T Square Logistics Servs. Corp. v.

United States, 134 Fed. Cl. at 558 (“The fact that an agency is permitted to waive the

submission format requirement, of course, does not mean it is required to do so.”

(emphasis in original)).

“Clarifications are limited exchanges, between the Government and offerors, that

may occur when award without discussions is contemplated.” FAR § 15.306(a)(1) (2019).

Clarifications provide offerors with an “opportunity to clarify certain aspects of proposals

(e.g., the relevance of an offeror’s past performance information and adverse past

performance information to which the offeror has not previously had an opportunity to

respond) or to resolve minor or clerical errors.” FAR § 15.306(a)(2) (2019). Clarifications

may not “‘be used to cure proposal deficiencies or material omissions, materially alter the

technical or cost elements of the proposal, or otherwise revise the proposal.’” Dell Fed.

Sys., L.P. v. United States, 906 F.3d at 998 (quoting JWK Int’l Corp. v. United States, 52

Fed. Cl. 650, 661 (2002), aff’d, 56 F. App’x 474 (Fed. Cir. 2003)); see also MSC Indus.

Direct Co. v. United States, 140 Fed. Cl. at 646 (“‘Clarifications’ are reserved for only

minor administrative errors and not material omissions.”).

“Flowing from the permissive wording of” FAR § 15.306, a contracting officer’s

“decision to seek (or not to seek) clarification from an offeror is within his discretion.”

Criterion Sys., Inc. v. United States, 140 Fed. Cl. 29, 37 (2018); see also Strategic Bus.

Sols., Inc. v. United States, 129 Fed. Cl. at 629 (stating that a contracting officer has

discretion when determining whether to seek clarifications); BCPeabody Constr. Servs.,

Inc. v. United States, 112 Fed. Cl. at 511 (stating that a contracting officer has discretion

when deciding whether to seek clarifications, but determining that the contracting officer

abused her discretion by not seeking clarifications). A Judge of the United States Court

of Federal Claims has stated:

While this court has found an abuse of discretion in bid protests governed

by FAR Part 15 where the government failed to inquire into copying errors

that affected the procuring authority’s evaluation of past performance, see

BCPeabody, 112 Fed. Cl. at 513, an omission of pricing information has not

been found to be a minor or clerical error in these types of procurements,

see ST Net[, Inc. v. United States], 112 Fed. Cl. [99,] at 111 [(2013)].

42

Bus. Integra, Inc. v. United States, 116 Fed. Cl. at 335; see also ManTech Advanced Sys.

Int’l, Inc. v. United States, 141 Fed. Cl. at 512 (“This court has determined in several

previous cases that proposals with missing mandatory price information contain material

errors, even when the price information has a minimal impact the total price, so long as

the needed prices will be considered in the evaluation process and binding on the

offeror.”).

The parties dispute concerning Schedule B and Section B requires the court to

interpret those two terms in the context of the Solicitation and the amendments thereto,

as neither term is explicitly defined in the Solicitation or the amendments. The issue

before the court is whether the “Schedule B” referenced in the Solicitation is considered

to be a part of “Section B.” The first two pages of the Solicitation are provided on a

government SF 1449, which is a government standard form “prescribed for use in

solicitations and contracts for commercial items.” See FAR § 53.212 (2019). Pages three

through thirty of the Solicitation are provided on government OF 336, which is a

government optional form. The regulation at FAR § 53.110 (2019) states that “all standard

forms prescribed by the FAR,” such as the government SF 1449, “may be continued on

(a) plain paper of similar specification, or (b) specially constructed continuation sheets

(e.g., OF 336).” See FAR § 53.110. In the Solicitation at issue in this protest, the

government OF 336 continued the government SF 1449. The Schedule of

Supplies/Services in the Solicitation begins in Block 20 on the SF 1449 and continues in

column “(B)” on the government OF 336. Together, the initial thirty pages of the

Solicitation consisted of the Schedule of Supplies/Services, including the CLINs,

descriptions of CLINs, quantity amounts, unit amounts, unit prices, and total amounts for

the base period of performance, as well as all seven option periods of performance. That

the Schedule of Supplies/Services continues throughout column (B) on the government

OF 336 appears to be the genesis of the name “Schedule B.”17 The Solicitation also states

that an offeror’s “[p]rice proposal shall include completed Schedule B. In the event there

is a discrepancy between sections of the price proposal and Schedule B, Schedule B will

govern.”

17Throughout this Opinion, the court has discussed the Schedule of Supplies/Services

present in the Solicitation. The part of the Solicitation that the parties refer to as “Schedule

B” is the same part of the Solicitation that the court refers to as the Schedule of

Supplies/Services.

43

Regarding Section B, which defendant and defendant-intervenor assert included

Schedule B, page thirty-one of the Solicitation provided the following overview of the

Solicitation:

The first subsection in the Solicitation, Section A, is labeled “SECTION A SOLICITATION

GENERAL INFORMATION.” (capitalization in original). Section A of the Solicitation

stated: “Pricing Schedule and Periods of Performance (POP) Service dates for each CLIN

are detailed in Section B. Note: Exceptions to line item structure in Section B may result

in a bid not considered for award.” (capitalization in original). The parties dispute

regarding Schedule B and Section B stems from the statement in Section A of the

Solicitation that “[e]xceptions to line item structure in Section B may result in a bid not

considered for award.”

According to the overview of the contents of the Solicitation, the second section in

the Solicitation was titled “SECTION B PRICE SCHEDULE GENERAL INFORMATION.”

(capitalization in original). The second section in the Solicitation, in its entirety, provided:

44

When the Agency issued Amendment No. 3 to the Solicitation, Section B was amended

to state:

(highlight in original). Protestor’s position is that the immediately above image is, in its

entirety, Section B, as amended, and that Schedule B is not included in Section B

because Schedule B is not contained in the above-image of “SECTION B PRICE

SCHEDULE.” (capitalization in original).

The Solicitation, however, indicates that Schedule B, which is the Schedule of

Supplies/Services, is included as part of Section B of the Solicitation, as Section A of the

Solicitation stated that “Pricing Schedule and Periods of Performance (POP) Service

dates for each CLIN are detailed in Section B. Note: Exceptions to line item structure in

Section B may result in a bid not considered for award.” (emphasis added) (capitalization

in original). When the Solicitation was issued, the section of the Solicitation labeled in the

overview of the Solicitation as “SECTION B PRICE SCHEDULE GENERAL

INFORMATION” contained information relating to the “Periods of Performance (POP)

Service dates,” but did not include information on “each CLIN” or the “line item structure

in Section B.”18 (capitalization in original). The section labeled “SECTION B PRICE

SCHEDULE GENERAL INFORMATION” did not include any information related to the

quantity, unit amount, unit price, or total amount of individual CLINs, which Section A of

the Solicitation indicated would be “detailed in Section B.” (capitalization in original).

The “Pricing Schedule,” which the Solicitation stated would be “detailed in Section

B,” appears to have referred to Schedule B, which is the Schedule of Supplies/Services.

18When the section in the overview of the Solicitation labeled as “SECTION B PRICE

SCHEDULE GENERAL INFORMATION” was amended by Amendment No. 3, that

section was amended to state that CLIN 001AA was to reflect a one-month phase-in

period, but that was the only CLIN mentioned in the the section in the overview of the

Solicitation labeled as “SECTION B PRICE SCHEDULE GENERAL INFORMATION.”

(capitalization in original).

45

Section A of the Solicitation indicated that the “line item structure” was contained “in

Section B.” Schedule B, the Schedule of Supplies/Services, contained all of the CLINs

and descriptions of the CLINs throughout the base period of performance and option

periods of performance. Schedule B provided offerors with the quantity amounts and unit

amounts that offerors were to price in the offerors’ proposals submitted in response to the

Solicitation. Schedule B also contained “Periods of Performance (POP) Service dates”

for the base period of performance and each option period of performance. (capitalization

in original). The section of the Solicitation labeled in the overview of the Solicitation as

“SECTION B PRICE SCHEDULE GENERAL INFORMATION” only appears to have

summarized the “Periods of Performance (POP) Service dates” in Schedule B in a chart

and appears to have provided “GENERAL INFORMATION” about the periods of

performance defined in Schedule B. (capitalization in original). If Schedule B was not part

of Section B, the statement in Section A that “[e]xceptions to line item structure in Section

B may result in a bid not considered for award” would have been meaningless, as the

section of the Solicitation labeled in the overview of the Solicitation as “SECTION B

PRICE SCHEDULE GENERAL INFORMATION,” as issued on October 11, 2017, did not

include any information related to contract line item numbers or “line item structure.”

(capitalization in original).

Moreover, an addendum to FAR clause 52.212-1 in the Solicitation stated that

“Volume 3 shall be labeled Factor C-Price (Section B, to include price breakdown), SF

1449, SF30 Amendments, Section B price and price breakdown.” (emphasis in original).

The addendum to FAR clause 52.212-1 in the Solicitation indicates that Section B of the

Solicitation included “price and price breakdown,” which is contained in Schedule B.

Information related to “price and price breakdown” is not contained in the section of the

Solicitation labeled in the overview of the Solicitation as “SECTION B PRICE SCHEDULE

GENERAL INFORMATION,” which indicates the Section B of the Solicitation

encompassed more than just the information contained in the section of the Solicitation

labeled as “SECTION B PRICE SCHEDULE GENERAL INFORMATION.” (capitalization

in original).

The Agency’s answers to questions in Amendment No. 3 to the Solicitation also

indicate that Schedule B is part of Section B.19 For example, the Agency categorized

question 9, which, as discussed above, asked about the omitted government ceiling or

not-to-exceed amounts for CLINs X007AA and X007AB on the Schedule of

Supplies/Services, as being related to “Section B Price Schedule.” (emphasis in

original). Question and answer 6 in Amendment No. 3 provided:

19Amendments No. 1, 2, 4, and 5 do not appear to address the organization of the

Solicitation or different references to Schedule B and/or Section B.

46

(emphasis in original). As noted above, the government SF 1449 and OF 336 comprised

Schedule B, which the Agency, in question 6, labeled as being part of the “Section B

Price Schedule.” (emphasis in original). The Agency’s answer to question 6 also

responds to questions about individual CLINs on the Schedule of Supplies/Services and

indicates that those CLINs are part of “Section B.” (emphasis in original). The CLINs in

question 6 were not included in the part of the Solicitation which protestor argues

contained the entirety of Section B.

The court, therefore, concludes that Schedule B, which is the Schedule of

Supplies/Services, was part of “Section B” of the Solicitation, and that the Solicitation

advised offerors that “[e]xceptions to line item structure in Section B may result in a bid

not considered for award.” In the above-captioned protest, as discussed above, offerors

were required to submit in their price proposals the government provided ceiling or not-

to-exceed amounts for CLINs X007AA and X007AB on the Schedule of Supplies/Service,

which were provided in the Agency’s answer to question 9 in Amendment No. 3 to the

Solicitation. The Solicitation stated that “[e]xceptions to line item structure” on the

Schedule of Supplies/Services “may result in a bid not considered for award.” The

Agency, therefore, reserved the right to exclude offerors which failed to include required

pricing information for the CLINs X007AA and X007AB.

Moreover, even if Section B did not include Schedule B, other sections of the

Solicitation required offerors to submit complete price proposals. The Solicitation

contained FAR clause 52.212-1, as well as an addendum to FAR clause 52.212-1. FAR

clause 52.212-1 in the Solicitation stated that, “[a]s a minimum, offers must show . . .

Price and any discount terms.” The addendum to FAR clause 52.212-1 stated that an

offeror’s “[p]rice proposal shall include price for the phase-in period, base period and

seven option periods.” The addendum to FAR clause 52.212-1 in the Solicitation also

stated: “Offerors shall provide a detailed breakdown of how it arrived at proposed costs

as follows: Contract Line Item Number . . . .” An offeror’s price proposal was required to

include “Section B price and price breakdown,” and, as stated in the Solicitation, an

offeror’s “[p]rice proposal shall include completed Schedule B.”

Safeguard’s price proposal, however, did not include the required amounts for

CLINs X007AA or CLINs X007AB, and, therefore, did not “include completed Schedule

B” as required by the Solicitation. Safeguard left the “UNIT PRICE” and “AMOUNT”

columns blank for CLINs X007AA and X007AB on the Schedule of Supplies/Services

Safeguard submitted as part of its price proposal. (capitalization in original). For example,

in Safeguard’s price proposal, CLIN X007AA appeared as:

As indicated in the immediately above image, Safeguard did not include a “UNIT PRICE”

or “AMOUNT” on the Schedule of Supplies/Services in its proposal for CLINs X007AA

and X007AB. (capitalization in original). Safeguard also failed to include subtotals for the

47

base period of performance and option periods of performance on the Schedule of

Supplies/Services that Safeguard submitted as part of its price proposal. For example,

regarding the fourth option period of performance, Safeguard’s price proposal stated:

Moreover, Safeguard submitted the following chart as part of its price proposal:

[redacted]

The immediately above chart, as well as the Schedule of Supplies/Service submitted as

part of Safeguard’s price proposal, indicate that Safeguard did not include the required

amounts for CLINs X007AA and X007AB as part of its price proposal in the base period

of performance or any of the option periods of performance. Consequently, Safeguard’s

total proposed price, which Safeguard calculated as being [redacted], did not include the

amounts associated with CLINs X007AA and X007AB, as Safeguard’s price proposal

effectively priced CLINs X007AA and X007AB at $0.00.

All offerors responding to the Solicitation were required to submit a complete price

proposal because price was one of the factors that the Agency considered when making

an award under the Solicitation. By failing to include the government ceiling or not-to-

exceed amounts for CLINs X007AA and X007AB listed in the Agency’s answer to

question 9 in Amendment No. 3, Safeguard failed to include prices for those sixteen

CLINs. The government provided the announced amounts for CLINs X007AA and

X007AB totaling $6,121,228.00 across the base period of performance and the seven

option periods of performance. Because Safeguard did not include the amounts for CLINs

X007AA and X007AB as instructed by the Solicitation and Amendment No. 3, Safeguard’s

total proposed price did not include the $6,121,228.00 associated with CLINs X007AA

and X007AB. Had Safeguard priced CLINs X007AA and X007AB in accordance with the

Agency’s instructions, Safeguard’s total proposed price would have been increased by

$6,121,228.00, which would have increased Safeguard’s total propose price from

[redacted] to [redacted]. Moreover, the amounts for CLINs X007AA and X007AB served

a substantive purpose in an offeror’s proposals because the amounts for CLINs X007AA

and X007AB were binding amounts that an offeror, if awarded a contract under the

Solicitation, would not be permitted to exceed without approval from the contracting

officer.

The amounts offerors were to include in their price proposals for CLINs X007AA

and X007AB also related to the Agency’s evaluation of proposals. Under the Agency’s

evaluation scheme established in the Solicitation, the Agency was to “evaluate offers for

award purposes by adding the total price for all options to the total price for the basic

requirement.” Additionally, the Solicitation stated:

48

As part of the price analysis, the government will evaluate its option to

extend services (FAR Clause 52.217-8) by adding six months of the

offeror’s final option period price to the offeror’s total price. This will result

in the total evaluated price by which the determination cited under f. (1) will

be based, in part.

Failure to meet the requirement that offerors include in the price proposals the

government ceiling or not-to-exceed amounts for CLINs X007AA and X007AB impacted

the Agency’s ability to evaluate an offeror’s price proposal because the amounts for

CLINs X007AA and X007AB were necessary as part of an offeror’s total proposed price.

Because Safeguard’s proposed prices for the base period of performance and for each

of the options periods of performance did not include amounts for CLINs X007AA and

X007AB, Safeguard’s total proposed price was listed as $6,121,228.00 in the proposal

lower than it would have been had Safeguard included the government ceiling or not-to-

exceed amounts for CLINs X007AA and X007AB. Absent inclusion, the Agency may have

been unable to compare Safeguard’s deflated total proposed price to other offerors’ total

proposed price in accordance with the evaluation scheme specifically established in the

Solicitation because Safeguard failed to include the amounts totaling $6,121,228.00 for

CLINs X007AA and X007AB that other offerors, such as B&O, had included in their price

proposals. Consequently, Safeguard’s omission of the amounts for CLINs X007AA and

X007AB was a material omission because the omission violated the terms of the

Solicitation and had “more than a negligible impact on the price” of Safeguard’s total

proposed price in its proposal. See ManTech Advanced Sys. Int’l, Inc. v. United States,

141 Fed. Cl. at 508. Safeguard’s omission of the amounts for CLINs X007AA and X007AB

also was a material omission because the omission hindered the Agency’s ability to

“evaluate offers for award purposes by adding the total price for all options to the total

price for the basic requirement,” as stated in the Solicitation. Safeguard’s failure to comply

with the terms of the Solicitation, and amendments thereto, was a material error not

subject to waiver under FAR clause 52.212-1(g), and the Agency did not act arbitrarily

and capriciously by declining to waive Safeguard’s material omission.

Moreover, the Agency should not have sought clarifications from Safeguard

regarding its failure to comply with the Solicitation’s directions and omission of the

amounts for CLINs X007AA and X007AB because clarifications may not be used to cure

“‘material omissions’” or revise the “‘cost elements of the proposal.’” See Dell Fed. Sys.,

L.P. v. United States, 906 F.3d at 998 (quoting JWK Int’l Corp. v. United States, 52 Fed.

Cl. 650, 661 (2002), aff’d, 56 F. App’x 474 (Fed. Cir. 2003)). As stated in Sheryle Wood’s

March 22, 2018 Price Evaluation Report, as well as in Joseph Williams’ June 8, 2018 and

August 2, 2018 Source Selection Decision Documents, in order to remedy Safeguard’s

failure to include the amounts for CLINs X007AA and X007AB, the Agency would have

had to establish a competitive range, engage in discussions with offerors, and obtain a

revised price proposal from Safeguard.20 A revised price proposal from Safeguard was

20Protestor’s amended complaint and reply in support of its motion for judgment on the

administrative record do not assert that it was arbitrary and capricious for the Agency to

decide to not establish a competitive range and hold discussions with offerors in the

competitive range. In protestor’s motion for judgment on the administrative record,

49

necessary because, in order to correct Safeguard’s material omission, Safeguard would

have needed to price the sixteen CLINs for CLINs X007AA and X007AB, recalculate its

prices for each period of performance, and recalculate its total proposed price. The

Agency, therefore, did not abuse its discretion by choosing not to seek clarifications from

Safeguard regarding its material omissions of the amounts for CLINs X007AA and

X007AB, as clarifications would have been an inappropriate tool to remedy Safeguard’s

material omissions.

Safeguard further argues that the “the Agency had twice before been able to

evaluate Safeguard’s proposal despite the absence of the plug numbers.” Documents in

the administrative record, however, indicate that the Agency previously had identified

Safeguard’s failure to include amounts for CLINs X007AA and X007AB as an issue

throughout the procurement process and that the Agency was not able to evaluate

Safeguard’s proposal as originally submitted by Safeguard, without unilaterally increasing

Safeguard’s total proposed price to account for the omitted amounts associated with

CLINs X007AA and X007AB. In contracting officer’s Sheryle Wood’s March 22, 2018

Price Evaluation Report, Ms. Wood stated that, in Safeguard’s price proposal, “the

specific data to CLINS XXX7AA and XXX7AB were not plugged in for all years as

instructed by Amendment 0003.” According to Ms. Wood, Safeguard’s total proposed

price, which Safeguard had listed as [redacted], was “closer to [redacted]” because “the

ODCS were only identified as a lump sum and errors in pricing of extended amounts for

all years plus the omission of the IDIQ pricing reflects the total cost to be closer to

[redacted].” It is true that, in the March 22, 2018 Price Evaluation Report, Ms. Wood

stated:

It is recommended that the Contracting Officer determine the [Safeguard’s]

price fair and reasonable as presented without need for discussion or

exchanges with regard to price. Once the competitive range has been

established, it is recommended that Safeguard Base Operations LLC (SBO)

be retained in the competitive range for purposes of discussion. Calculation

errors in all years, inclusion of the IDIQ data all years, and full breakdown

of phase in costs and ODCs [other direct costs] would be the discussion

element [sic] all years.

Sheryle Wood’s March 22, 2018 Price Evaluation Report indicates that, as early as March

22, 2018, the Agency determined that Safeguard needed to submit a revised price

proposal in order to correct errors in Safeguard’s price proposal, including Safeguard’s

omission of the government provided ceiling or not-to-exceed amounts for CLINs X007AA

and X007AB.

protestor mentions discussions once, stating: “At worst, Safeguard’s failure to regurgitate

DHS’s plug-in numbers constituted a mere ‘informality’ or non-material concern that could

have been easily resolved through clarifications (or discussions).” Protestor, however,

has not provided any argument specific to why the Agency should have held discussions

or cited to any case law addressing an Agency’s decision to not establish a competitive

range and hold discussions with offerors.

50

In source selection authority Joseph Williams’ June 8, 2018 Source Selection

Decision Document, however, Joseph Williams stated:

The price proposal [submitted by Safeguard] did not comply with

instructions, containing .pdf copies of their spreadsheets rather than in excel

as required, errors in pricing of extended amounts for all years, and

omission of the IDIQ pricing (as required by RFP amendment). There is no

yearly escalation except for the project management CLINs. (All other

proposals include escalation of at least [redacted] for all CLINs, which the

history of the current contract supports.) Their proposed price of [redacted]

is the third lowest and although it is reasonable, it may be considered

unrealistically low compared to the IGE. After accounting for errors and

adding escalation to all CLINs, their total evaluated price increased by

approximately [redacted] to [redacted] (without accounting for the floor

cleaning services that were to be at no expense to the Government).

[redacted] evaluated prices that are realistic, and awarding to this offeror

presents some risk to the Government without a completely revised price

proposal accounting for all costs, and given their Technical Approach and

Corporate Experience ratings are lower than other offerors.

Because of a non-compliant price proposal, and a price that is unrealistically

low, this proposal should have been eliminated from the competition without

a technical evaluation.

Joseph Williams also stated that “[d]iscussions and a substantial update to portions of

their [Safeguard’s] technical proposal as well as a completely revised price proposal

would be necessary, but it is unlikely they would become much more competitive.”

(emphasis in original).

Joseph Williams’ June 8, 2018 Source Selection Decision Document indicates

that, by June 2018, the Agency considered Safeguard’s proposal to be “non-compliant”

and as requiring a “completely revised price proposal” after discussions. (emphasis

omitted). Joseph Williams further asserted “this [Safeguard’s] proposal should have been

eliminated from the competition without a technical evaluation.” Joseph Williams’ June 8,

2018 Source Selection Decision Document also indicates that the Agency had increased

Safeguard’s total proposed price by more than [redacted] because of errors in

Safeguard’s price proposal, including Safeguard’s omission of the government provided

amounts for CLINs X007AA and X007AB. According to a chart in the June 8, 2018 Source

Selection Decision Document, the Agency’s “Total Evaluated Price” for Safeguard’s

proposal would have been [redacted], which was an increase from Safeguard’s total

proposed price of [redacted].

In Joseph Williams’ August 2, 2018 Source Selection Decision Document, which

was undertaken as part of corrective action taken by the Agency in response to

Safeguard’s June 21, 2018 protest at the GAO, Joseph Williams stated:

51

Their [Safeguard’s] proposed price of [redacted] is the third lowest and

although it is reasonable, it could potentially be unrealistically low compared

to the IGE. The price proposal did not comply with instructions, containing

.pdf copies of their spreadsheets rather than in excel as required, had errors

in pricing of extended amounts for all years, and omitted the IDIQ pricing

(as required by RFP amendment). Furthermore, there is no yearly

escalation except for the project management CLINs. (All other proposals

include escalation of at least [redacted] for all CLINs, which the history of

the current contract supports.) After accounting for errors and adding

escalation to all appropriate CLINs, their total evaluated price increased by

approximately [redacted]. This is the [redacted] total evaluated prices that

are realistic, but still approximately [redacted] the IGE. Awarding to this

offeror presents some risk to the Government without a completely revised

price proposal accounting for all costs, and given their [redacted].

Because of a non-compliant price proposal with a questionable low price,

and [redacted], this proposal could have been eliminated from the

competition without a technical evaluation.

According to the August 2, 2018 Source Selection Decision Document, “[d]iscussions and

a substantial update to portions of their technical proposal as well as a completely revised

price proposal would be necessary for them to be eligible for award, and it is unlikely they

would become much more competitive.” (emphasis in original). Thus, as in Joseph

Williams’ June 8, 2018 Source Selection Decision Document, Joseph Williams’ August 2,

2018 Source Selection Decision Document indicates that the Agency considered

Safeguard’s proposal to be non-compliant and as requiring a revised price proposal.

Joseph Williams’ August 2, 2018 Source Selection Decision Document also indicates that

Safeguard’s proposal was not “eligible for award” and “could have been eliminated from

the competition without a technical evaluation.” (emphasis in original). Additionally, the

August 2, 2018 Source Selection Decision Document provides that Safeguard’s “Total

Evaluated Price” was [redacted], which the Agency had computed as an increase from

Safeguard’s submitted price of [redacted].

The court also notes that, in Safeguard’s August 24, 2018 amended protest at the

GAO, however, Safeguard argued that the Agency had violated FAR § 15.404-1(d)(3) by

increasing the price of Safeguard’s proposal, which proposed a firm-fixed price. FAR

§ 15.404-1(d)(3) states:

Cost realism analyses may also be used on competitive fixed-price

incentive contracts or, in exceptional cases, on other competitive fixed-

price-type contracts when new requirements may not be fully understood

by competing offerors, there are quality concerns, or past experience

indicates that contractors’ proposed costs have resulted in quality or service

shortfalls. Results of the analysis may be used in performance risk

assessments and responsibility determinations. However, proposals shall

52

be evaluated using the criteria in the solicitation, and the offered prices shall

not be adjusted as a result of the analysis.

FAR § 15.404-1(d)(3). According to Safeguard’s August 24, 2018 amended protest at the

GAO, “in a firm-fixed price procurement, ‘an agency cannot make upward price

adjustments for cost elements that the agency thinks may be priced too low.’ IBM Corp.,

B-299504, et al., June 4, 2007, 2008 CPD ¶ 64 at 9.” In response to Safeguard’s August

24, 2018 amended protest at the GAO, on August 28, 2018, the Agency informed the

GAO and Safeguard that it was going to take corrective action to correct mistakes in the

Agency’s consideration of Safeguard’s proposal.

On September 20, 2018, source selection authority Joseph Williams issued his

third Source Selection Decision Document. The September 20, 2018 Source Selection

Decision Document, in which Safeguard was listed as Safeguard Base Operations JV,

provided:

[redacted]

Regarding Safeguard’s proposal, the September 20, 2018 Source Selection Decision

Document stated that Safeguard’s “price proposal was technically non-compliant

because their price volume failed to include government provided amounts for the Service

Work Request CLINs, as required by Amendment 3 to the solicitation. Therefore, this

offeror is not eligible for award.” Joseph Williams further stated that “B&O Joint Venture

is the only offer that could be awarded a contract without discussions. They submitted the

best technical proposal that resulted in receiving the highest non-factor ratings, and they

were one of only three offeros [sic] who submitted a compliant price proposal.” (emphasis

in original).

Although, in the June 8, 2018 and August 2, 2018 Source Selection Decision

Documents, the Agency added more than [redacted] to Safeguard’s proposed price and

discussed the contents of Safeguard’s proposal, in response to Safeguard’s August 24,

2018 amended protest at the GAO, which argued that the Agency inappropriately had

increased Safeguard’s firm-fixed price, the Agency undertook corrective action, including

a revised source selection decision. In the source selection decision following

Safeguard’s August 24, 2018 amended protest at the GAO, Joseph Williams declined to

increase Safeguard’s proposed price to remedy any errors in Safeguard’s price proposal,

perhaps in response to Safeguard’s articulation of an alleged violation of FAR § 15.404-

1(d)(3). Joseph Williams decision to disqualify Safeguard’s proposal, however, was based

on Safeguard’s failure to comply with the requirement in the Solicitation and Amendment

No. 3 to include the government provided amounts for CLINs X007AA and X007AB, and

the Solicitation stated that “[e]xceptions to line item structure in Section B may result in a

bid not considered for award” and required a “completed Schedule B.” As discussed

above, Safeguard’s failure to submit amounts for CLINs X007AA and X007AB was a

material omission, neither subject to waiver nor remediable through clarifications.

Moreover, source selection authority Joseph Williams, in each of his three source

selection decisions, consistently found Safeguard’s price proposal to be “non-compliant”

53

and subject to elimination without a technical evaluation, and that Safeguard’s proposal

would have required discussions and a revised price proposal in order to be eligible for

award. The court concludes that it was not arbitrary and capricious for the Agency to

disqualify Safeguard’s proposal based on Safeguard’s failure to submit amounts for

CLINs X007AA and X007AB.

Whether the Agency Failed to Properly Conduct a Best-Value Tradeoff

Protestor also asserts that the Agency failed to conduct a best-value tradeoff

analysis in accordance with the evaluation scheme established in the Solicitation.

According to protestor, the Agency’s September 20, 2018 Source Selection Decision

Document “provides no language referring to a comparison or weighing of the offerors’

proposals, particularly as regards Safeguard’s lower priced, second-ranked technically,

proposal.”

Defendant, however, argues that the Agency was not required to engage in a best-

value tradeoff between B&O’s proposal and Safeguard’s proposal because Safeguard’s

proposal was disqualified for failing to include the government ceiling or not-to-exceed

amounts for CLINs X007AA and X007AB. Defendant-intervenor argues that the Agency

did not need to consider Safeguard’s proposal in its best-value tradeoff decision because

Safeguard’s proposal was non-compliant.

An agency “has broad discretion when making” a best-value tradeoff decision.

Harmonia Holdings Grp., LLC v. United States, 136 Fed. Cl. 298, 313 (2018) (citing E.W.

Bliss Co. v. United States, 77 F.3d 445, 448 (Fed. Cir. 1996)); see also Mil-Mar Century

Corp. v. United States, 111 Fed. Cl. 508, 553 (2013) (quoting the undersigned’s decision

in One Largo Metro, LLC v. United States, 109 Fed. Cl. 39, 96 (2013)). The United States

Court of Appeals for the Federal Circuit has stated:

Procurement officials have substantial discretion to determine which

proposal represents the best value for the government. See Lockheed

Missiles & Space Co., Inc. v. Bentsen, 4 F.3d 955, 958 (Fed. Cir. 1993); cf.

Widnall v. B3H, 75 F.3d 1577 (Fed. Cir. 1996) (holding that Board of

Contract Appeals should defer to agency’s best value decision as long as it

is “grounded in reason. . . . even if the Board itself might have chosen a

different bidder”); In re General Offshore Corp., B-251969.5, B-251969.6,

94-1 Comptroller Gen.’s Procurement Decisions (Federal Publications Inc.)

¶ 248, at 3 (Apr. 8, 1994) (“In a negotiated procurement, any proposal that

fails to conform to material terms and conditions of the solicitation should

be considered unacceptable and may not form the basis for an award.

Where an evaluation is challenged, we will examine the agency’s evaluation

to ensure that it was reasonable and consistent with the evaluation criteria

and applicable statutes and regulations, since the relative merit of

competing proposals is primarily a matter of administrative discretion.”)

(citations omitted).

54

E.W. Bliss Co. v. United States, 77 F.3d at 449; see also Textron, Inc. v. United States,

74 Fed. Cl. at 326 (“[A]s defendant states, ‘it is perfectly appropriate for an agency to

refuse to further consider an offer once it has concluded that the offer is technically

unacceptable.’” (quoting the defendant’s brief in Textron, Inc. v. United States)).

In the above-captioned case, the Solicitation stated that, “[i]n accordance with FAR

52.212-2, award shall be made to the responsible offer on the basis of the best value that

meets or exceeds the acceptability standards for non-price factors (FAR 15.101-2).” The

Solicitation also stated that the “Government will award a contract resulting from this

solicitation to the responsible offeror whose offer conforming to the solicitation will be

most advantageous to the Government, price and other factors considered.” As discussed

above, the Agency properly found that Safeguard’s price proposal was non-compliant due

to Safeguard’s failure to price CLINs X007AA and X007AB and that Safeguard was not

eligible for award under the Solicitation because Safeguard did not submit a proposal

“conforming to the solicitation,” as required in order to be eligible for award. Joseph

Williams’ September 20, 2018 source selection decision contained the technical and past

performance ratings for Safeguard, as well as for all of the six offerors under the

Solicitation, and discussed each offeror’s proposal individually. Joseph Williams’

September 20, 2018 source selection decision stated that Safeguard’s proposal was non-

compliant and ineligible for award because Safeguard “price volume failed to include

government provided amounts for the Service Work Request CLINs, as required by

Amendment 3 to the solicitation.” Moreover, once the Agency properly determined that

Safeguard was ineligible for award because it did not submit a proposal conforming to the

requirements of the Solicitation, the Agency could not accept Safeguard’s ineligible

proposal.

Joseph Williams’ September 20, 2018 Source Selection Decision Document

further stated that B&O was the only offeror that was eligible to be awarded a contract

without discussions. Joseph Williams discussed the factors for award identified in the

Solicitation and indicated that B&O’s price was fair and reasonable, and that B&O’s

proposal had received the highest technical evaluation rankings. In the September 20,

2018 Source Selection Decision Document, Joseph Williams also recounted several

strengths identified in B&O’s proposal and asserted that “award to this offeror would

represent a good value to the Government due to the technical strengths and high

Corporate Experience and Past Performance ratings.” According to Joseph Williams,

“based on my integrated assessment of all proposals in accordance with the specified

evaluation factors and sub-factors, it is my decision that B&O Joint Venture’s proposal

offers the best overall value to the Government.” (emphasis in original). The Agency’s

best-value tradeoff, therefore, appears to have been properly supported by the

administrative record.

Whether the Agency Breached the Implied Duty of Good Faith and Fair Dealing

In Count III of protestor’s amended complaint, protestor asserts that the Agency

“breached the covenant of good faith and fair dealing by failing to fairly and honestly

consider Safeguard’s proposal,” and that the Agency’s decision to disqualify Safeguard’s

55

proposal was “pretextual.” According to protestor’s amended complaint, “this Court ‘has

jurisdiction to consider a claim of breach of the implied duty to fairly and honestly consider

a proposal in the context of a post-award bid protest.’” (quoting Innovative Test Asset

Sols. LLC v. United States, 125 Fed. Cl. 201, 216 (2016)). Protestor contends that the

Agency’s “refusal to evaluate Safeguard’s proposal fully during corrective action – as it

represented to the GAO it would – and its decision instead to change course and

disqualify Safeguard’s proposal after it already had successfully evaluated the proposal,

constitutes a breach of good faith and fair dealing.” (emphasis in original) (citations

omitted). In an attempt to support its argument, protestor cites to the January 31, 2019

affidavit signed by Diana Parks Curran, an attorney who had represented Safeguard

b

This text is long and has been trimmed here. Open the source document for the complete record.