Technatomy Corporation v. United States

In the United States Court of Federal Claims

No. 19-369C

(Filed under seal July 31, 2019)

(Reissued August 13, 2019) †

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

*

*

TECHNATOMY CORP., * Post-award bid protest; corrective

* action following GAO protest; no

Plaintiff, * waiver under Blue & Gold; price

* reasonableness; best-value tradeoff;

v. * neutral past performance.

*

THE UNITED STATES, *

*

Defendant, *

*

and *

*

SOLERS, INC., NORTHROP *

GRUMMAN SYSTEMS CORP. and *

BOOZ ALLEN HAMILTON, INC., *

*

Defendant–Intervenors. *

*

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

Julie M. Nichols, Roeder & Cochran, PLLC, with whom was James S.

Phillips, both of McLean, Va., for plaintiff.

Jessica L. Cole, Trial Attorney, Commercial Litigation Branch, Civil Division,

Department of Justice, with whom were Joseph H. Hunt, Assistant Attorney

General, Robert E. Kirschman, Jr., Director, and Patricia M. McCarthy, Assistant

Director, all of Washington, D.C., for defendant. Travis L. Vaughan, Office of

General Counsel, Defense Information Systems Agency, of Fort Meade, Md., of

counsel.

†This order was originally filed under seal, to allow the parties the opportunity to

propose redactions. No redactions were proposed. The order is reissued for

publication with a few minor, non-substantive corrections.

Michael J. Gardner, Greenberg Traurig, LLP, with whom were Shomari B.

Wade and Brett A. Castellat, all of McLean, Va., for defendant-intervenor Solers,

Inc.

Deneen J. Melander, Robbins, Russell, Englert, Orseck, Untereiner & Sauber,

LLP, with whom was Lanora C. Pettit, both of Washington, D.C., for defendant-

intervenor Northrop Grumman Systems Corp. Richard A. Sauber, of Washington,

D.C., of counsel.

Gary J. Campbell, Womble Bond Dickinson (US) LLP, of Boston, Mass., with

whom were G. Matthew Koehl and Nathaniel J. Greeson, both of Washington, D.C.,

for defendant-intervenor Booz Allen Hamilton Inc.

ORDER

WOLSKI, Senior Judge.

For the reasons stated on the record at the status conference held on

Thursday, July 18, 2019, the cross-motions for judgment on the administrative

record of defendant and defendant-intervenors are GRANTED, and plaintiff ’s

motion for judgment on the administrative record is DENIED. A brief summary of

that ruling follows.

In this case, after a Government Accountability Office (GAO) protest brought

by plaintiff Technatomy Corp. was sustained on two grounds and denied on several

others, see Admin. R. (AR) 36333–58, the Defense Information Systems Agency

(DISA or agency) undertook corrective action. This resulted in the award of task

order contracts to fifteen offerors, but the plaintiff was not among them. AR 36502.

Technatomy then filed this post-award bid protest, challenging the price

reasonableness and best value analyses conducted by DISA upon the GAO’s

recommendation, as well as several aspects of the technical evaluations that were

unsuccessfully advanced in the GAO protest. Compl. ¶¶ 176–212.

The Court determined that DISA conducted a meaningful price

reasonableness analysis, in compliance with 48 C.F.R. § 15.404-1(b)(2), by

comparing the prices of offerors to each other’s, to the average price, to the

independent government cost estimate, and to the prices under other contracts, and

by explaining that variations were due to differing risk preferences and technical

approaches. See AR 36359–62. The Court also found that it was not arbitrary for

DISA to perform best-value tradeoffs only between plaintiff and the awardees with

higher prices and higher technical ratings. When an offeror beats the protester on

both grounds, no tradeoff is even possible, see 48 C.F.R. § 15.101-1(a), and the Court

notes that at least three non-awardees --- IPKeys, LongView International

Technology Solutions, and Unisys, see AR 4329–32, 4364–68, 4435–40 --- had lower

prices and better technical ratings than Technatomy. The tradeoffs that were

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performed properly focused on whether the specific qualities, strengths, and

associated benefits of proposals justified paying a higher price than what plaintiff

offered. See AR 36464–502. And the agency followed the solicitation criteria, see AR

492, in assigning and treating a rating of neutral confidence for one offeror’s past

performance, AR 4261, 36475 --- a determination that the Court cannot find

improper, given the great deference afforded to such judgments, see Gulf Grp., Inc.

v. United States, 61 Fed. Cl. 338, 356–57 (2004).

Concerning aspects of the technical evaluations that were not addressed in

the corrective action, the Court found that none of Technatomy’s challenges

demonstrated arbitrary and prejudicial action by the agency. The sorting process

used by DISA in its initial source selection followed the relative importance of each

non-price factor and, contrary to Technatomy’s assertion, the second-most

important factor was decisive in the determination not to make an award to an

offeror. See AR 4462 (NCI, Inc.). The one weakness assigned plaintiff was

rationally supported, was based on solicitation criteria, and also did not affect its

technical rating. See AR 112–13, 2775, 4431–32. Although Technatomy appears to

be the only offeror to have received critical notations from the evaluation board

concerning proposal aspects that were not deemed weaknesses, see AR 4013, 4431,

these two notes did not factor into the best-value calculus, see AR 36464–502. The

Court found that the evaluation board’s failure to enter on a chart the dates that

the legal team and the board finished editing Technatomy’s evaluation did not

prove that the evaluation was not completed, but merely showed that the chart

itself was not completed --- as numerous other fields were left blank. See AR 3962–

68. The record did not support Technatomy’s speculative claim that evaluators

must have been too tired by the time they reached “T” in the alphabet to properly

focus on its problem statements submissions, as offerors Unisys and Vencore

received strengths for Factor 3. See AR 4436–38, 4444–46. 1 And plaintiff failed to

show that the agency arbitrarily deprived it of an “Outstanding” rating for Factor 4,

as the only offerors who achieved that rating had at least four strengths in the

factor, see AR 4271, 4299, 4312, 4368, 4375, 4404, 4418, 4440, 4448, compared to

Technatomy’s two, see AR 4433.

One issue presented in this protest does warrant further elaboration. The

government, and intervenors Northrop Grumman and Booz Allen Hamilton, each

argue that the waiver rule from the Federal Circuit’s decision in Blue & Gold Fleet,

L.P. v. United States, 492 F.3d 1308, 1313–15 (Fed. Cir. 2007), should be extended

to preclude the protest grounds that Technatomy unsuccessfully raised before the

GAO. While the Federal Circuit has not applied the waiver rule outside of the

context of challenges to solicitation language, see, e.g., Sys. Appl. & Techs., Inc. v.

1 The Court notes that Factor 3 submissions were reviewed from November 2, 2017

to March 19, 2018, AR 4021, and that nothing in the record indicates that they were

reviewed in alphabetical order.

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United States (SA-TECH), 691 F.3d 1374, 1384–85 (Fed. Cir. 2012) (explaining that

only the “[p]art of the proposed corrective action” that concerned a “proposed

amendment to the solicitation” would have been waived if not brought before the

proposal submission deadline), many of our court’s judges, including the

undersigned, 2 have recognized that the rule should be applied in additional

circumstances.

Typically, these circumstances involve bid protests brought by an initial

awardee challenging a decision to undertake corrective action, see NVE, Inc. v.

United States, 121 Fed. Cl. 169, 178–79 (2015), as such parties are injured by

having to win the same award twice, and the decision is neither interlocutory nor

without legal consequences, see SA-TECH, 691 F.3d at 1382, 1384. In contrast, the

initially unsuccessful offeror which obtains corrective action as a result of bringing

a GAO protest cannot usually be said to have been injured by this remedy,

particularly when the GAO recommended the course of action---as that office will

only do so when it has been convinced that the protester’s substantial chance of

winning the award would thereby be restored. See Statistica, Inc. v. Christopher,

102 F.3d 1577, 1581 (Fed. Cir. 1996) (citing McDonald-Bradley, B-270126, 96-1

CPD ¶ 54, 1996 WL 50643, *2 (Comp. Gen. Feb. 8, 1996)). 3 The government and its

allies nevertheless contend that by complaining about technical evaluation

determinations that were not revisited during the corrective action, Technatomy is

in reality attempting an untimely challenge to the scope of the corrective action.

The Court rejects these arguments for two reasons. First, the Court does not

find that Technatomy could have brought these challenges once the corrective

action, recommended by the GAO, had begun. Because of that corrective action, the

decision which injured plaintiff---the source selection decision---was no longer in

force, and none of the technical evaluation decisions which plaintiff challenges were

the sort which necessarily disqualified plaintiff. Until the technical determinations

are applied in a best-value analysis and an award (or competitive range) decision,

they are interlocutory by nature. Thus, plaintiff had neither standing nor a ripe

2 See, e.g., Land Shark Shredding, LLC v. United States, No. 18-482C, 2018 WL

2306869, *1 (Fed. Cl. May 21, 2018) (finding challenge to cancellation of earlier

solicitation waived by participation in subsequent procurement); Cargo Transp. Sys.

Co. v. United States, No. 16-1481C, 2017 WL 1406862, *1 (Fed. Cl. Apr. 20, 2017)

(finding challenge to negative responsibility determination waived because this

decision prevented award to the protester, which knew of its baseless nature prior

to submitting a revised proposal).

3 Sufficient injury to support standing may be found for an unsuccessful offeror

which believes that voluntary corrective action would be futile, due to the alleged

bias of the procurement officials who are to conduct this action. See Jacobs Tech.

Inc. v. United States, 131 Fed. Cl. 430, 442–46 (2017).

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claim to pursue once the corrective action was announced. To find otherwise would

open the floodgates to bid protests challenging evaluation minutiae brought by

parties that had not yet even been excluded from a competitive range. 4

Second, and more fundamentally, the Court finds that Technatomy preserved

these protest grounds by raising them before the GAO in the first place. The Blue

& Gold waiver rule takes aim at the inefficiencies that would otherwise result from

the strategic behavior of offerors who keep patent errors to themselves until a costly

and time-consuming stage of a procurement is avoidably conducted to completion.

See Blue & Gold, 492 F.3d at 1314–15. It is not disputed that plaintiff ’s protest

grounds concerning the technical evaluations of proposals were previously included

in the GAO protest, and a timely, formal objection is all that is necessary to

preserve grounds that are subject to Blue & Gold waiver. See DGR Assocs., Inc. v.

United States, 690 F.3d 1335, 1338–39, 1343 (Fed. Cir. 2012) (recognizing that a

challenge to a solicitation term, in a post-award bid protest filed in our court, was

preserved by the filing of a formal, agency-level protest before the proposal

submission deadline); cf. Synergy Sols., Inc. v. United States, 133 Fed. Cl. 716, 739–

40 (2017) (finding protest ground waived because it was not included in a previous

GAO protest rendered academic by voluntary corrective action). Far from waiving

these protest grounds, Technatomy preserved them by including them in its GAO

protest. See Vanguard Recovery Assistance v. United States, 99 Fed. Cl. 81, 90–92

(2011). While the extension of Blue & Gold urged by the government and two

intervenors would no doubt make the GAO a less attractive forum for bid protests,

the Court does not see how requiring winning GAO protesters to protest their own

corrective actions can be considered efficient.

For the foregoing reasons, as well as the reasons stated on the record at the

status conference held on Thursday, July 18, 2019, plaintiff ’s motion for judgment

on the administrative record is DENIED; the government’s, Northrop Grumman’s,

and Booz Allen Hamilton’s motions to dismiss Count III are DENIED; and

defendant’s and intervenors’ cross-motions for judgment on the administrative

record are GRANTED. The Clerk shall enter judgment accordingly.

IT IS SO ORDERED.

s/ Victor J. Wolski

VICTOR J. WOLSKI

Senior Judge

4 The only opinion from our court which could be viewed as supporting such a

result, Global Dynamics, LLC v. United States, 130 Fed. Cl. 211 (2016), involved an

agency request during discussions which the protester believed was unlawful in the

absence of certain solicitation language, similar to (or the flip-side of) the situation

presented in Blue & Gold. See id. at 214–16.

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