Opinion

Asset Protection & Security Services, L.P. v. United States

Court: United States Court of Federal Claims
Filed: Oct 1, 2020
Status: Published
Cited by: 0 cases
Authority: More cited than 12.7%

“[A]ny party may challenge, or the court may raise sua sponte, subject matter jurisdiction at any time.” (citing Arbaugh v. Y & H Corp., 546 U.S. at 506; Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2004

How later courts described this case

“[A]ny party may challenge, or the court may raise sua sponte, subject matter jurisdiction at any time.” (citing Arbaugh v. Y & H Corp., 546 U.S. at 506; Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2004
explaining that a federal court must satisfy itself of its jurisdiction over the subject matter before it considers the merits of a case
holding that the requirement to redact parts of a proposal was material because it “served a substantive purpose”
“Plaintiff’s failure to provide more detailed information is chargeable to it alone.”

Written by the judges who cited it.

The opinion

In the United States Court of Federal Claims

No. 20-449C

Filed: September 12, 2020

Redacted Version Issued for Publication: October 1, 20201

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

ASSET PROTECTION & SECURITY *

SERVICES, L.P., *

Protestor,

v. *

* Post-Award Bid Protest; Motion to

UNITED STATES, * Dismiss; Standing; Trade-Off

Defendant, * Analysis.

v. *

AKIMA GLOBAL SERVICES, LLC, *

Defendant-Intervenor. *

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

David T. Ralston, Jr. Foley & Lardner LLP, Washington, DC for protestor. With

him were Julia Di Vito and Frank Murray, Foley & Lardner LLP, Washington, DC.

Daniel B. Volk, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,

Department of Justice, Washington, DC, for defendant. With him were Douglas K.

Mickle, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr.,

Director, Commercial Litigation Branch, and Ethan P. Davis, Acting Assistant Attorney

General, Civil Division. Of counsel was Javier A. Farfan, Associate Legal Advisor, United

States Immigration and Customs Enforcement.

C. Peter Dungan, Miles & Stockbridge P.C., Washington, DC for defendant-

intervenor. With him were Alfred M. Wurglitz and Annie M. McGuire, Miles &

Stockbridge P.C.

1 This Opinion was issued under seal on September 12, 2020. The parties were asked to

propose redactions prior to public release of the Opinion. This Opinion is issued with the

redactions that the parties proposed in response to the court’s request. Words which are

redacted are reflected with the notation: “[redacted].”

OPINION

HORN, J.

In the above-captioned, post-award bid protest, protestor Asset Protection &

Security Services, L.P. (Asset, also referred to as APSS) challenges the decision by the

Department of Homeland Security, United States Immigration and Customs Enforcement

(ICE) to award a contract to intervenor Akima Global Services, LLC (Akima, also referred

to as AGS), arguing that the award was unreasonable, irrational, and arbitrary and

capricious.

FINDINGS OF FACT

On August 22, 2016, ICE issued a request for proposals for services, Solicitation

No. HSCEDM-16-R-00001 (the Solicitation), to operate a detention center in Florence,

Arizona. The Solicitation begins:

SOLICITATION FOR GUARD, FOOD AND TRANSPORTATION

SERVICES – FLORENCE SERVICE PROCESSING CENTER,

FLORENCE AZ

*Offerors must propose price/cost in order to be considered for award.

Offerors who fail to propose price/cost will be eliminated from competition

and will not be considered for award.

(capitalization in original).

The August 22, 2016 Solicitation indicated that “[t]he price/cost will consist of one

(1) Two-month transition period and one (1) Ten-month base period with seven (7) one-

year option periods, followed by a six (6) months extension in accordance with FAR

52.217-8.” The Solicitation, as evaluated, had four evaluation factors: (1) Demonstrated

Technical/Management Capability, (2) Past Performance, (3) Administration, and (4)

Price.2 The December 19, 2019 Source Selection Award Decision Memorandum, as

issued by the agency and signed by contracting officer serving as the source selection

authority, explained:

The four evaluation factors for this procurement are in descending order of

importance.

1) Demonstrated Technical/Management Capability

2) Past Performance,

2 The August 22, 2016 Solicitation indicated that “[t]here are three evaluation factors for

this procurement: 1) Demonstrated Technical/Management Capability, 2) Past

Performance, and 3) Price.” Although the Solicitation, as amended, included four

evaluation factors, with the addition of the evaluation factor of Administration, price was

always an evaluation factor.

3) Administration, and

4) Price[.]

For Evaluation Factor 1 - Demonstrated Technical/Management Capability, offerors’

proposals were to be evaluated on the “ability to fulfill the technical requirements while

meeting quality requirements and the Offeror’s business approach.” Evaluation

Factor 1 - Demonstrated Technical/Management Capability had four sub-factors: Sub-

factor 1: Performance Work Statement; Sub-factor 2: Quality Control Plan; Sub-factor 3:

Transition Plan; and Sub-factor 4: Staffing Plan. Evaluation Factor 1 and the Sub-factors

for Evaluation Factor 1 were to be evaluated as: Outstanding, Good, Acceptable,

Marginal, and Unsatisfactory. For Evaluation Factor 2 – Past Performance, offerors were

required to submit three past performance contracts. Past Performance was to be

evaluated as: Substantial Confidence, Satisfactory Confidence, Limited Confidence, No

Confidence, or Unknown Confidence. Evaluation Factor 3 – Administration had four sub-

factors: Sub-factor 1: Offer Letter; Sub-factor 2: Signed Solicitation Documents; Sub-

factor 3: Small Business Subcontracting Plan; and Sub-factor 4: Key

Personnel/Resumes. For Evaluation Factor 3 – Administration the offerors’ proposals

were evaluated for compliance with the four Sub-factors. Evaluation Factor 3 was to be

rated as Pass, Fail, or Not Applicable. The final Evaluation Factor was Evaluation Factor

4 – Price, which “was not adjectively rated but considered a factor in the best value

determination,” and according to the Solicitation, “[o]fferors who failed to propose pricing

were eliminated from competition and were not considered for award.”

Consistent with the above, the Solicitation, as amended by Amendment 17, which

was issued on May 28, 2019, indicated:

Pricing

The government is requesting a pricing quote from Offerors. Offerors are

encouraged to provide reasonable, but competitive prices and submit

pricing structures in accordance with the PWS [Performance Work

Statement].

The pricing structure consists of one (1) sixty (60) day transition, One (1)

ten (10) month base period and seven (7) one year options, followed by a

six (6) month extension in accordance with FAR 52.217-8. If an award

results from this solicitation, the Government intends to fund any Task

Orders through annually appropriated funds.

Note: Pricing shall be submitted in the following two (2) areas:

1.) Section B of the solicitation (Standard Form 33/Optional Form 336);

2.) Attachment 5 CLIN [Contract Line Item Number] Summary

The Government expects that adequate price competition will result from

this solicitation thereby negating the need for Offerors to submit certified

cost and pricing data (See FAR 15.403-1). A price analysis will be

performed to assess the reasonableness of the proposed prices under the

firm fixed price contract. The Government will conduct its price analysis

using one or more of the techniques specified in FAR 15.404-1(b). However,

in order to determine a fair and reasonable price in accordance with FAR

15.403-3(a)(1)(ii) and 15.403-5(b)(2), the Government shall require other

than certified cost and pricing data in responses to this RFP.

....

Contingency Pricing:

All proposed pricing must be accordance with [FAR] 52.222-43. Any form

of contingency pricing is unacceptable and your proposal will be removed

from competition as unresponsive.

(emphasis in original) (brackets added).

As indicated in the Source Selection Award Decision Memorandum:

All Sub-factors under Factor 1 were rated with equal importance. The

Demonstrated Technical/Management Capability (Factor 1) is more

important overall than Past Performance (Factor 2). Evaluation Factors 1

and 2 are more important that Evaluation Factor 3 (Administration). When

combined, Demonstrated Technical/Management Capability, Past

Performance, and Administration, are significantly more important than

Price (Factor 4).

On December 5, 2016, the agency issued Amendment No. 5 to the Solicitation,

which answered questions raised by prospective offerors. Question 246 asked: “Arizona

charges 4.5% ‘business tax’; will the Federal Government issue a tax exemption

certificate to the successful offeror?” to which the agency responded: “Yes.”

There were six offerors to the Solicitation, including protestor Asset, intervenor

Akima, and AKHI, LLC (AKHI). The initial award was made to Akima on September 26,

2018. As indicated in the December 19, 2019 Source Selection Award Decision

Memorandum for the award currently being protested, “[t]he Government received two

GAO [Government Accountability Office] protests of award; one from APSS and one

from AKHI respectively. AKHI submitted a Supplemental Protest to GAO as well. All

protests were dismissed by GAO due to the Government’s willingness to take corrective

action.” The GAO dismissed those protests on November 9, 2018.

After the agency agreed to take corrective action, on May 21, 2019, the agency

issued Amendment 16 to allow discussions with the offerors, and four offerors, including

protestor Asset, intervenor Akima, and AKHI, submitted timely, revised proposals by May

30, 2019. After review of the offerors’ proposals, on May 31, 2019 the agency issued

Amendment 19 to clarify the agency’s answers to Question 236 and Question 246, the

questions and answers the agency had previously provided. Regarding Question 246,

Amendment 19 stated:

Question#246: Arizona charges 4.5% “business tax”; will the Federal

Government issue a tax exemption certificate to the successful offeror?

Initial Government Response: Yes

Corrected Government Response: The Government CANNOT delegate its

tax exempt status to contractors for the performance of government

services.

(capitalization in original). Also on May 31, 2019, the agency sent an email to Asset which

stated: “Attached is Amendment 0019 concerning HSCEDM-16-R-00001. Please review

the documentation and respond accordingly.” The same day, May 31, 2019, [redacted],

the Vice President of Contract Administration & Business Development for Asset emailed

the agency and stated: “I have reviewed, signed and attached Amendment 19 hereto.

Asset’s proposal does not require further revision.” On June 4, 2019, the agency issued

Amendment 20, to provide further “clarification to the pricing proposed by Offerors and to

Question 236 and Question 246 of the Questions and Answers.” Amendment 20

reiterated the language of Amendment 19, and stated, with regards to Question 246:

2. Provide clarification to question and answer.

Question#246: Arizona charges 4.5% “business tax”; will the Federal

Government issue a tax exemption certificate to the successful offeror?

Initial Government Response: Yes

Corrected Government Response: No, the Government CANNOT delegate

its tax exempt status to contractors for the performance of government

services.

(capitalization in original). Also on June 4, 2019, the agency sent an email to Asset which

stated: “Attached is Amendment 0020 concerning HSCEDM-16-R-00001. Please review

the documentation and respond accordingly. Required documents are due by

Wednesday June 5, 2019 at 1100 EST.” The same day, June 4, 2019, [redacted] emailed

the agency and stated: “Asset has reviewed it [sic] price proposal in response to

Amendment 20. No changes are deemed necessary.” Asset’s price proposal, therefore,

continued to remain unchanged, and Asset’s price proposal stated:

Other Direct Costs have been included in the development of the fully-

loaded CLIN rates included in Section B. These costs represent the total

cost of providing office equipment, training, medical testing, transportation

vehicles and equipment, uniforms, duty gear, weapons, ammunition,

communications equipment, detainee tracking and accountability system,

administrative supplies, detention services, food service, certifications and

licenses, and management to the labor force, inclusive of all shipping fees,

& handling or processing fees. Sales taxes were not charged due to the

government’s expressed intent to provide Team Asset with a tax-exempt

certificate, where applicable.

On August 21, 2019, the agency again issued the award to the intervenor Akima.

The agency notified protestor Asset of the award on the same day and subsequently

provided Asset with an August 28, 2019 debriefing letter. The August 28, 2019 debriefing

letter informed Asset it was not eligible to receive the award because of defective pricing

in its proposal, and stated:

APSS was ineligible to receive award due to defective pricing. In

accordance with the solicitation “All proposed pricing must be in accordance

with 52.222-43. Any form of contingency pricing is unacceptable and your

proposal will be removed from competition as unresponsive.” APSS offered

contingency pricing on pg. 57 of their Volume IV proposal. APSS stated

“sales taxes were not charged due to the Government’s expressed intent to

provide Team Asset with a tax-exempt certificate, where applicable.” The

Government provided two amendments, 0019 and 0020, informing all

Offerors that the Government will not provide the tax-exempt number and

APSS failed to make the correction.

On September 3, 2019, Asset timely filed a second GAO bid protest.3

Subsequently, the agency again indicated its intent to take corrective action, and on

October 1, 2019, the GAO dismissed Asset’s September 3, 2019 protest. Thereafter, on

November 21, 2019, the agency issued Amendment 21. Amendment 21 stated:

The purpose of Amendment 0021 to HSCEDM-16-R-00001 is to

incorporate WD 2015-5469, Rev.-10, dated August 2, 2019 into the

solicitation.

1. Offerors are only allowed to provide updates to their pricing in

Volume IV. Offerors shall not alter any narratives. Updates to the pricing in

Volume IV are due November 25, 2019 at 0900 EST.

2. Offerors need to confirm that their proposals are valid through April

2020.

(capitalization in original). On November 21, 2019, [redacted] responded to the agency:

“Asset confirms that its proposal is valid through April 30, 2020,” and confirmed that “[n]o

3As with the previous protest at GAO, another unsuccessful offeror also filed a bid protest

with GAO.

changes to pricing that were not caused by the new Wage Determination were made.” 4

Asset’s final proposal, stated, in language that was unchanged from its earlier May 2019

proposal, “Asset is submitting this proposal as a Firm Fixed Price Proposal, inclusive of

the Transition Period, Base Period, all Option Periods, and the potential 6 month

Extension. We provided pricing for each Cost Line Item Number in this Price Proposal in

Section B and Attachment 5.” Also unchanged from its May 2019 proposal, Asset’s pricing

proposal, stated: “Sales taxes were not charged due to the government's expressed intent

to provide Team Asset with a tax-exempt certificate, where applicable.”

Three offerors submitted timely responses after the corrective action: protestor

Asset, intervenor Akima, and AKHI, and the agency evaluated the three offerors. The

Source Selection Award Decision Memorandum provides the following evaluation

summary for the three offerors:

Evaluation Factor 1: Demonstrated Technical/Management Capability FPR[5]

Quality Transition Overall

Offeror PWS Staffing Plan

Control Plan Plan Rating

AGS Outstanding Outstanding Outstanding Outstanding Outstanding

APSS Outstanding Outstanding Outstanding Outstanding Outstanding

AKHI Outstanding Outstanding Outstanding Outstanding Outstanding

Evaluation Factor 2: Past Performance FPR – Offerors were not required to submit a new Past Performance

Volume if no weaknesses or deficiencies were identified. No Offeror submitted a new Past Performance Volume.

Offeror Past Performance Rating

AGS Satisfactory Confidence

AKHI Satisfactory Confidence

APSS Satisfactory Confidence

Evaluation Factor 3: Administration FPR

Signed

Small Business Key

Offeror Cover Letter Solicitation

Plan Personnel/Resumes

Documents

AGS P P P P

AKHI P P N/A P

APSS P P P P

(emphasis in original). The December 19, 2019 Source Selection Award Decision

Memorandum indicated:

4 Protestor stated in the complaint, “Asset complied with Amendment 21, and on

November 21, 2019, timely submitted a revised price proposal revising only its pricing

and not its price narrative (as specifically instructed by ICE).”

5 The Solicitation states that FPR stands for “Final Proposal Revision.”

Period of Performance Period of Performance Dates

Transition Period (60 Days) 09/26/2018 - 11/26/2018

Base Period (10 months) 11/27/2018 - 09/25/2019

Option Period 1 09/26/2019 - 09/25/2020

Option Period 2 09/26/2020 - 09/25/2021

Option Period 3 09/26/2021 - 09/25/2022

Option Period 4 09/26/2022 - 09/25/2023

Option Period 5 09/26/2023 - 09/25/2024

Option Period 6 09/26/2024 - 09/25/2025

Option Period 7 09/26/2025 - 09/25/2026

Option Period 8 09/26/2026 - 03/25/2027

After identifying the periods of performance, the December 19, 2019 Source

Selection Award Decision Memorandum noted “[t]he IGCE [Independent Government

Cost Estimate] was calculated from historical contract analysis, the current contract, and

an escalation based on prevailing wage determinations and CBAs [Collective Bargaining

Agreements].” The Source Selection Award Decision Memorandum continued:

The Total IGCE is as follows:

Period of Performance IGCE

Transition Period (60 Days) $4,250,126.03

Base Period (10 months) $21,250,630.20

Option Period 1 $31,363,431.07

Option Period 2 $32,145,016.78

Option Period 3 $32,946,142.20

Option Period 4 $33,767,295.35

Option Period 5 $34,608,977.36

Option Period 6 $35,471,701.74

Option Period 7 $36,355,994.74

Option Period 8: FAR 52.217-8 $18,631,197.00

Extended Services: The contract will include FAR 52.217-8 “Option to Extend Services” for an additional six (6)

months of services; if necessary. The total estimated value of the effort is $280,790,512.47.

(emphasis in original). The Source Selection Award Decision Memorandum provides the

following evaluation summary regarding pricing:

Evaluation Factor 4: Price Analysis FPR

Offeror Proposed Price Price Percentage Differential

AKHI $263,413,870.66 Lowest Offer

APSS $273,697,209.72 3.903%

AGS $276,950,519.31 5.138%

(emphasis in original). In addition, the agency performed a best value trade-off analysis,

and as explained in the December 19, 2019 Source Selection Award Decision

Memorandum:

Award was made through a trade-off evaluation in accordance to the

evaluation process used to select the proposal that represents the best

value to the Government as described above and based on these four

categories:

1) Demonstrated Technical/ Management Capability (Factor 1),

2) Past Performance (Factor 2),

3) Administration (Factor 3), and

4) Cost/Price (Factor 4).

The Source Selection Award Decision Memorandum further explained:

The Government intends to award to the Contractor’s proposal that

represents the overall best value to ICE in accordance with the Solicitation’s

award selection process. The best value determination was made by

comparing the differences in the factor ratings and price and conducting a

trade-off analysis of benefits of superior abilities and probability of

successfully performing the contract versus the added cost. The best value

determination is determining when a superior technical capability is offered

that outweighed significantly higher overall costs.

AGS, APSS, and AKHI were evaluated and received the highest technical

rating “Outstanding”; AKHI’s proposal offered the lowest price. APSS’

offered the second lowest price. AGS’s proposal offered the highest price.

A trade-off analysis of the difference in the ratings between AGS and APSS

and AGS and AKHI was conducted in accordance with the Solicitation’s

Evaluation to determine the best value.

Before comparing the proposals, however, the agency concluded that:

APSS is ineligible to receive award due to defective pricing. APSS offered

contingency pricing on pg. 57 of their Volume IV proposal. APSS stated

“sales taxes were not charged due to the Government’s expressed intent to

provide Team Asset with a tax-exempt certificate, where applicable.” The

Government provided two amendments, 0019 and 0020, informing all

Offerors that the Government will not provide the tax-exempt number and

APSS failed to make a correction to their price proposal. Nevertheless, the

Government performed a tradeoff analysis in accordance with the

solicitation.

The December 19, 2019 Source Selection Award Decision Memorandum has a

detailed breakdown in the trade-off section regarding each element of the proposals. For

the Evaluation Factor 1: Demonstrated Technical/Management Capability, the Source

Selection Award Decision Memorandum indicated: “AGS ‘Outstanding’ proposal offers

overall best value above APSS’ Outstanding proposal. AGS provides a superior technical

capability over APSS.” For Evaluation Factor 2 – Past Performance, the Source Selection

Award Decision Memorandum stated: “Past Performance Determination Both AGS and

APSS received a Satisfactory Confidence level. The Government has an equal

reasonable expectation that the both Offerors will successfully perform.” (capitalization

and emphasis in original). For Evaluation Factor 3 – Administration, the Source Selection

Award Decision Memorandum stated: “Both AGS and APSS were rated overall ‘Pass.’”

For Evaluation Factor 4 – Price, the Source Selection Award Decision Memorandum

stated:

Factor 4 – Price

The Government conducted its price analysis using one or more of the

techniques specified in FAR 15.404-1(b) as per the solicitation. The

Government utilized FAR 15.404-1(b)(2)(i) and determined that the prices

offered by both AGS and APSS are fair and reasonable based on adequate

competition. The Government outlines this analysis below:

Offeror FPR Price Price Percentage Differential

APSS $273,697,209.72 N/A

AGS $276,950,519.31 1.119%

(capitalization and emphasis in original).6 The Source Selection Award Decision

Memorandum explained:

Additionally, the evaluated price will be based upon the provision of a

monthly rate for guaranteed minimum of 392 detainee beds each day

(i.e., FPC[7] capacity of 392) and a bed day rate for detention services

for the housing and care of up to an additional 320 detainees above the

guaranteed minimum (i.e. Florence Staging Facility capacity of 320).

Offerors shall propose a monthly rate for CLINs X002A which assumes

full capacity at FPC and a bed day rate for detainees in custody above

the guaranteed minimum for CLINs X002B.

In accordance with the solicitation, The [sic] Government has generated

a bed day rate comparison based on the 392 GM [Guaranteed Minimum]

bed CLIN for AGS and APSS based on their proposed 392 GM pricing.

[redacted]

The trade-off analysis between protestor Asset and intervenor Akima concluded: “Trade-

Off Determination: The Government has determined that AGS offered superior

6 The court notes that the Akima’s price as listed in the trade-off analysis with Asset is

different than the one listed in the trade off analysis with AKHI or in the final Source

Selection decision.

7“FPC” is not defined in the record before the court. “FDC,” however, is defined in the

Solicitation as the Florence Detention Facility.

solutions/approach to APSS, as determined though the evaluation factors, merits a higher

price, and therefore represents the best value to the Government.” (capitalization and

emphasis in original).

The trade-off analysis in the Source Selection Award Decision Memorandum

concluded:8

PART IV: SOURCE SELECTION

Demonstrated

Offeror Technical/Management Past Performance Administration Price

Capability FPR

AGS Outstanding Satisfactory Confidence Pass $276,950,519.31

APSS Outstanding Satisfactory Confidence Pass $273,697,209.72

AKHI Outstanding Satisfactory Confidence Pass $263,413,870.66

The results of the above consensus ratings revealed the following:

1. AGS, APSS, and AKHI all received an overall rating of ‘Outstanding’ in

the most important evaluation factor, Factor 1, Demonstrated

Technical/Management Capability. However, upon further analysis the

Outstanding ratings are not equal. AGS provides the best value to the

Government in terms of their proposed Demonstrated

Technical/Management Capability, Quality Control Plan, Transition Plan,

and Staffing Plan.

2. Based on the evaluation of Factor 2, Past Performance, all vendors

received a Satisfactory Confidence rating. Based on the submitted

contracts from vendors, the Government has a reasonable expectation that

the Offerors will successfully perform.

8 The Source Selection Award Decision Memorandum also provided a comparison

between AKHI and intervenor Akima, in a similar format to the comparison between Asset

and Akima. The price evaluation in the trade-off analysis between AKHI and Akima stated:

Offeror FPR Price Price Percentage Differential

AGS $276,656,452.43 N/A

AKHI $263,168,313.44 5.138%

(capitalization and emphasis in original). The trade-off analysis between AKHI and Akima

concluded: “Trade-Off Determination: The Government has determined that AGS

offered superior solutions/approach to AKHI, as determined though the evaluation factors,

merits a higher price, and therefore represents the best value to the Government,”

(capitalization and emphasis in original). The trade-off analysis between AKHI and Akima,

however, is not an issue before the court.

3. All Offerors were rated “Pass” for all subfactors in Evaluation Factor 3.

AKHI was the only vendor that received a “N/A” for the “Utilization of Small

Business” due to the Offeror being a Small Business.

4. For Factor 4, Price, AKHI offered the lowest Total Evaluated Price at

$263,413,870.66 but offered the second highest bed day rate; [redacted],

and the lowest above GM bed day rate, [redacted]. The second lowest

Offeror, APSS, offered pricing that was $10,283,339.06 (3.903%) higher

than the lowest price but offered the highest bed day rate; [redacted], and

highest above GM [redacted]. However, APSS’ pricing was determined to

be noncompliant with the solicitation requirements. APSS offered

contingency pricing on the belief that the Government would provide their

tax-exempt certification number. The Government provided two

amendments, 0019 and 0020, informing all Offerors that the Government

will not provide the tax-exempt number and APSS failed to make a

correction to their final pricing after amendments 0019 and 0020 were

issued. AGS offered pricing that was $13,536,648.65 (5.138%) higher than

the lowest price; but offered the lowest bed day rate; [redacted], second

highest above GM bed day, [redacted]. All proposed prices, to include

options, were evaluated and determined fair, balanced and reasonable.

5. Based on my review of the specific individual strengths and the evaluated

factors, AGS offers the best value to the Government. This determination

was reached in accordance with the “Award Selection” criteria and based

on the evaluation process established in the solicitation. All Offeror’s [sic]

received an overall “Outstanding” rating. However, AGS provides the best

value to the Government in terms of their proposed Demonstrated

Technical/Management Capability, Quality Control Plan, Transition Plan,

and Staffing Plan. All Offeror’s [sic] were rated with a ‘Satisfactory

Confidence’ level in Past Performance. All Offerors were rated ‘Pass’ or N/A

in all subfactors in Administration. Given the ‘Outstanding’ rating in Factor

1, coupled with the specific strengths found within Factor 1, [sic] -

Demonstrated Technical /Management Capability, the ‘Satisfactory

Confidence’ in Factor 2 - Past Performance, , [sic] Factor 3 - Administration,

‘Pass’ ratings for all subfactors, and fair and reasonable price for

Factor 4 - Price, AGS represents the best value to the Government. I

reviewed all Technical proposals and conducted trade-off for a price

premium with two Offerors who were technically acceptable that had a lower

price than AGS (APSS and AKHI). Based on my review and in accordance

with the Solicitation’s requirements, after conducting the required trade-off

and based on the demonstrated strengths, AGS’s technical offer warrants

a price premium.

6. In summary, based on my integrated assessment of all proposals in

accordance with the specified evaluation factors, sub-factors and award

selection process, it is my decision that Akima Global Services’ proposal

offers the best overall value to the Government.

(capitalization in original). The Source Selection Award Decision Memorandum

concluded with the following recommendation: “Based upon the above findings, in

accordance with FAR Part 15, the Contracting Officer recommends to the Source

Selection Authority (SSA) that award be made to Akima Global Services in the amount of

$276,950,519.31.”

The same day as the December 19, 2019 Source Selection Award Decision

Memorandum was issued, the agency awarded the contract, for a third time, to intervenor

Akima. Protestor Asset filed a third GAO protest, and argued to the GAO that the agency

unreasonably had determined that protestor’s proposal was ineligible due to a price

contingency. Additionally, Asset argued that the agency’s evaluation and trade-off

analysis for Evaluation Factor 1: Demonstrated Technical/Management Capability, and

specifically Sub-factors 1, 3, and 4 were unreasonable. Asset claimed that they were

assessed a weakness under Sub-factor 1: Performance Work Statement that intervenor

was not assessed a weakness for despite being identical to protestor. Asset claimed it

has superior past performance, although it was given the same rating as intervenor.

Finally, Asset alleged the best value trade-off “was based on arbitrarily determined

benefits without the required consideration of the qualitative value of the individual

benefits found in each offeror’s proposal, and that the best value tradeoff lacked a specific

explanation of why Akima’s allegedly technically superior proposal merited the price

premium over Asset’s proposal.”

On April 6, 2020, the GAO issued a decision denying Asset’s protest. See

generally Asset Prot. & Sec. Servs., L.P., B-417024.6, 2020 WL 1847740 (Comp. Gen.

Apr. 6, 2020). Regarding the Asset’s price proposal, the GAO concluded:

On this record, we do not find reasonable the agency’s conclusion that the

above-quoted statement in Asset’s price proposal created a contingency, or

took exception to the solicitation’s requirements to propose a fixed price.

While we agree that Asset’s price proposal may have relied on an incorrect

pricing assumption, on this record, we do not find that Asset’s price proposal

conditioned its fixed price on future negotiations. Further, to the extent that

the solicitation expressly required the inclusion of state sales taxes, Asset’s

proposal might reasonably be viewed as incomplete, however, nothing in

the proposal supports the agency’s conclusion that Asset’s pricing was

contingent on future negotiations. Nonetheless, we conclude that the

protester was not prejudiced by the agency’s error.

Id. at *5 (footnote omitted).9

9 Asset’s bid protest complaint notes that the GAO also found that the agency’s evaluation

and trade-off analysis between Asset and Akima with respect to Sub-factors 1, 3, and 4

for Evaluation Factor 1: Demonstrated Technical/Management Capability, and Evaluation

Factor 2: Past Performance, were reasonable.

Thereafter, Asset filed a bid protest complaint in this court. In Count 1, Asset states

Amendments 19 and 20 “subsequently stated ICE would not provide tax-exempt

certificates to the successful contractor. In response to these Solicitation amendments,

Asset signed the amendments (acknowledging that ICE would not provide tax-exempt

certificates) and stated that it did not deem any changes necessary to its previously

provided fixed prices.” Asset claims:

The SSA [Source Selection Authority], nonetheless, repeatedly seized on

Asset’s statement that it had not charged sales taxes, based on the

government’s previously expressed intent to provide a tax-exempt

certificate, to unreasonably conclude that Asset offered contingency pricing.

The SSA further repeatedly concluded that this alleged contingency pricing

rendered Asset’s price noncompliant with the Solicitation requirements and

ineligible for award.

The SSA’s evaluation and conclusion that Asset’s proposal was ineligible

for award were unreasonable because Asset’s proposed price did not

contain a pricing contingency, but instead contained only a pricing

assumption. Asset’s proposal contained no indication that its firm-fixed-

price would change if its pricing assumption proved incorrect, and Asset did

not reserve a right to receive, or even request, an adjustment to its pricing

based on the stated pricing assumption about tax-exempt certificates.

In its complaint, Asset also argues that the agency’s evaluation of the price

proposals was arbitrary and capricious, alleging

Asset was prejudiced by the SSA’s unreasonable determination that Asset’s

proposal contained a pricing contingency, as the SSA expressly found,

based on the erroneous pricing contingency conclusion, that Asset’s

proposal was noncompliant with the Solicitation and ineligible for award.

While the SSA then nominally included Asset’s proposal in the best value

tradeoff, and referred therein in passing to Asset’s proposal as “technically

acceptable,” the SSA conducted the price/technical best value tradeoff

analysis: (1) simultaneously with expressly determining that ICE could not

award to Asset because its proposal was ineligible for award, (2) in the wake

an August 2019 determination to the same effect, and (3) without providing

a record or explanation that the SSA’s unreasonable determination had

changed. Based on ICE’s own record, then, the SSA performed, without

explanation, a purported “best value tradeoff” in which one proposal

deemed eligible for award was considered against another that the SSA

simultaneously (and previously) deemed ineligible for award. Absent an

explanation in the record as to how or why the SSA changed the finding as

to Asset’s ineligibility, conducting such tradeoff between Asset’s and

Akima’s proposals when the SSA had already determined Asset’s proposal

to be ineligible for award is facially unreasonable.

In addition, regarding the best value trade-off analysis, protestor claims that the

Source Selection Award Decision Memorandum did “not even state the price difference

between Asset’s and Akima’s grand total price proposals, and does not evidence any

comparison of Asset’s grand total price against Akima’s grand total price, other than

noting that Akima’s price was the highest of the three offerors included in the best value

tradeoff,”10 and the agency “gave little or no consideration to the fact that Asset offered a

lower grand total price as compared to Akima, as that price advantage was not specifically

considered at all during the best value tradeoff.” Therefore, “[t]he best value tradeoff,

which was impermissibly premised on a finding that Asset’s proposal was ineligible for

award and a pricing evaluation that included unit pricing, was flawed and not determined

in accordance with the Solicitation.”

Count 2 of Asset’s complaint claims that the agency’s evaluation of the technical

proposals was arbitrary and capricious. In Count 3, Asset argues that the past

performance evaluations were flawed, because the agency “failed to substantively

compare Asset and Akima’s proposals under the Past Performance factor, and instead

concluded that the proposals were equivalent merely because each was assigned an

adjectival rating of Satisfactory Confidence under the Past Performance factor.” In Count

4, Asset alleges that “ICE’s overall decision to award the contract to Akima was

unreasonable, arbitrary, and capricious,” and argues that “ICE failed to follow the

Solicitation’s prescribed method of determining the best value offeror, and its conclusion

that Akima’s proposal presents the best value to the government was not reasonable or

adequately documented.”

In addition, to the above four counts in the complaint, Asset stresses it has standing

“because it was an actual bidder whose direct economic interest is affected by the award

of the contract to Akima.” Asset claims that it’s proposal “was highly rated and lower priced

as compared to Akima’s proposal, and Asset’s proposal was considered as one of just

three proposals in the best value tradeoff conducted by ICE.” Therefore, according to

protestor, “[b]ut for the errors in ICE’s evaluation and best value tradeoff, there is a

substantial chance that Asset would have received the contract award under the

Solicitation.”

10 The court notes that the December 19, 2019 Source Selection Award Decision

Memorandum calculated the price percentage difference between Asset and Akima’s

price proposals, as well as listed the three offerors’ grand total price proposals in the

trade-off analysis. As indicated above:

PART IV: SOURCE SELECTION

Demonstrated

Offeror Technical/Management Past Performance Administration Price

Capability FPR

AGS Outstanding Satisfactory Confidence Pass $276,950,519.31

APSS Outstanding Satisfactory Confidence Pass $273,697,209.72

AKHI Outstanding Satisfactory Confidence Pass $263,413,870.66

After Asset filed its bid protest, the court held an initial hearing. At the hearing, the

defendant and intervenor Akima argued that protestor Asset lacked standing to bring this

protest. After discussions with the parties, the court ordered the parties to brief the

jurisdictional issue of standing. Defendant argues that “Asset failed to submit a proposal

that conformed to the Solicitation’s terms.” Akima also contends “Asset’s Proposal was

noncompliant because it contained a contingency that took exception to the RFP’s

requirement for a firm-fixed price,” and “[o]fferors that submit noncompliant bids lack

standing because they do not have a substantial chance of being awarded the Contract.”

(capitalization in original). Asset responds that both motions to dismiss should be denied

because Asset has standing to bring its bid protest in this court.

DISCUSSION

It is well established that “‘subject-matter jurisdiction, because it involves a court’s

power to hear a case, can never be forfeited or waived.’” Arbaugh v. Y & H Corp., 546

U.S. 500, 514 (2006) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)).

“[F]ederal courts have an independent obligation to ensure that they do not exceed the

scope of their jurisdiction, and therefore they must raise and decide jurisdictional

questions that the parties either overlook or elect not to press.” Henderson ex rel.

Henderson v. Shinseki, 562 U.S. 428 (2011); see also Hertz Corp. v. Friend, 559 U.S. 77,

94 (2010) (“Courts have an independent obligation to determine whether subject-matter

jurisdiction exists, even when no party challenges it.” (citing Arbaugh v. Y & H Corp., 546

U.S. at 514)); Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 1342 (Fed. Cir. 2001)

(“[A] court has a duty to inquire into its jurisdiction to hear and decide a case.” (citing

Johannsen v. Pay Less Drug Stores N.W., Inc., 918 F.2d 160, 161 (Fed. Cir. 1990)));

View Eng’g, Inc. v. Robotic Vision Sys., Inc., 115 F.3d 962, 963 (Fed. Cir. 1997) (“[C]ourts

must always look to their jurisdiction, whether the parties raise the issue or not.”). “The

objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a party,

or by a court on its own initiative, at any stage in the litigation, even after trial and the

entry of judgment.” Arbaugh v. Y & H Corp., 546 U.S. at 506; see also Hymas v. United

States, 810 F.3d 1312, 1317 (Fed. Cir. 2016) (explaining that a federal court must satisfy

itself of its jurisdiction over the subject matter before it considers the merits of a case);

Cent. Pines Land Co., L.L.C. v. United States, 697 F.3d 1360, 1364 n.1 (Fed. Cir. 2012)

(“An objection to a court's subject matter jurisdiction can be raised by any party or the

court at any stage of litigation, including after trial and the entry of judgment.” (citing

Arbaugh v. Y & H Corp., 546 U.S. at 506)); Rick’s Mushroom Serv., Inc. v. United States,

521 F.3d 1338, 1346 (Fed. Cir. 2008) (“[A]ny party may challenge, or the court may raise

sua sponte, subject matter jurisdiction at any time.” (citing Arbaugh v. Y & H Corp., 546

U.S. at 506; Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.), reh’g and reh’g en

banc denied (Fed. Cir. 2004), cert. denied, 545 U.S. 1127 (2005); and Fanning, Phillips

& Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998))); Pikulin v. United States, 97 Fed.

Cl. 71, 76, appeal dismissed, 425 F. App’x 902 (Fed. Cir. 2011). In fact, “[s]ubject matter

jurisdiction is an inquiry that this court must raise sua sponte, even where . . . neither

party has raised this issue.” Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370

F.3d 1354, 1369 (Fed. Cir.) (citing Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481,

1485 (Fed. Cir.), reh’g denied and en banc suggestion declined (Fed. Cir.), cert. denied,

525 U.S. 826 (1998)), reh’g and reh’g en banc denied (Fed. Cir. 2004), cert. granted in

part sub. nom Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 546 U.S. 975 (2005),

cert. dismissed as improvidently granted, 548 U.S. 124 (2006).

This court has jurisdiction to hear bid protests pursuant to 28 U.S.C. § 1491(b)(1)

(2018) of the Tucker Act, which provides that this court has

jurisdiction to render judgment on an action by an interested party objecting

to a solicitation by a Federal agency for bids or proposals for a proposed

contract or to a proposed award or the award of a contract or any alleged

violation of statute or regulation in connection with a procurement or a

proposed procurement.

28 U.S.C. § 1491(b)(1); see also Weeks Marine, Inc. v. United States, 575 F.3d 1352,

1359 (Fed. Cir. 2009). The Administrative Dispute Resolution Act of 1996, codified at 28

U.S.C. § 1491(b)(1)–(4), 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).

The Tucker Act grants the United States Court of Federal Claims “jurisdiction to

render judgment on an action by an interested party objecting to a solicitation by a Federal

agency for bids or proposals for a proposed contract or to a proposed award or the award

of a contract or any alleged violation of statute or regulation in connection with a

procurement or a proposed procurement.” 28 U.S.C. § 1491(a)(1). In order to have

standing to sue as an “interested party” under this provision, a disappointed bidder must

show that it suffered competitive injury or was “prejudiced” by the alleged error in the

procurement process. See Todd Constr., L.P. v. United States, 656 F.3d 1306, 1315 (Fed.

Cir. 2011) (To prevail, a bid protester must first “‘show that it was prejudiced by a

significant error’ (i.e., ‘that but for the error, it would have had a substantial chance of

securing the contract).’” (quoting Labatt Food Serv., Inc. v. United States, 577 F.3d 1375,

1378, 1380 (Fed. Cir. 2009)); see also Eskridge & Assocs. v. United States, 955 F.3d

1339, 1345 (Fed. Cir. 2020) (“In a post-award bid protest, the relevant inquiry is whether

the bidder had a ‘substantial chance’ of winning the award—specifically, whether a

protestor ‘establish[ed] not only some significant error in the procurement process, but

also that there was a substantial chance it would have received the contract award but

for that error.’” (quoting Statistica, Inc. v. Christopher, 102 F.3d 1577, 1582 (Fed. Cir.

1996))) (alteration in original); Blue & Gold Fleet, L.P. v. United States, 492 F.3d at 1317;

AECOM Mgmt. Servs., Inc. v. United States, 147 Fed. Cl. 285, 290 (2020); Sci.

Applications Int’l Corp. v. United States, 108 Fed. Cl. 235, 281 (2012); Linc Gov’t Servs.,

LLC v. United States, 96 Fed. Cl. 672, 693 (2010) (“In order to establish standing to sue,

the plaintiff in a bid protest has always needed to demonstrate that it suffered competitive

injury, or ‘prejudice,’ as a result of the allegedly unlawful agency decisions.” (citing Rex

Serv. Corp. v. United States, 448 F.3d at 1308; Statistica, Inc. v. Christopher, 102 F.3d

1577, 1580–81 (Fed. Cir. 1996); Vulcan Eng’g Co. v. United States, 16 Cl. Ct. 84, 88

(1988); Morgan Bus. Assocs., Inc. v. United States, 223 Ct. Cl. 325, 332 (1980))). In order

to establish what one Judge on this court has called “allegational prejudice” for the

purposes of standing, the bidder must show that there was a “substantial chance” it would

have received the contract award, but for the alleged procurement error. See Linc Gov’t

Servs., LLC v. United States, 96 Fed. Cl. at 675; Hyperion, Inc. v. United States, 115 Fed.

Cl. 541, 550 (2014) (“The government acknowledges that proving prejudice for purposes

of standing merely requires “allegational prejudice,” as contrasted to prejudice on the

merits . . . .”); Bannum, Inc. v. United States, 115 Fed. Cl. 148, 153 (2014); see also

Bannum, Inc. v. United States, 404 F.3d 1346, 1358 (Fed. Cir. 2005); Galen Med.

Assocs., Inc. v. United States, 369 F.3d 1324, 1331 (Fed. Cir.), reh’g denied (Fed. Cir.

2004); Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.),

reh’g and reh’g en banc denied (Fed. Cir. 2003); Statistica, Inc. v. Christopher, 102 F.3d

at 1581; Archura LLC v. United States, 112 Fed. Cl. 487, 497 (2013); Lab. Corp. of Am.

v. United States, 108 Fed. Cl. 549, 557 (2012). Because standing is a jurisdictional issue,

this showing of prejudice is a threshold issue. See Corus Grp. PLC. v. Int’l Trade Comm'n,

352 F.3d 1351, 1357 (Fed. Cir. 2003); Myers Investigative & Sec. Servs., Inc. v. United

States, 275 F.3d 1366, 1370 (Fed. Cir. 2002).

In a post-award bid protest, such as the above-captioned bid protest, the “protestor

must ‘establish that it (1) is an actual or prospective bidder, and (2) possesses the

requisite direct economic interest.’” Mgmt. & Training Corp. v. United States, 137 Fed. Cl.

780, 783-84 (2018) (quoting Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed.

Cir. 2006)); see also Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384

(Fed. Cir. 2012) (“An interested party is an actual or prospective bidder whose direct

economic interest would be affected by the award of the contract. Thus, a party must

show that it is 1) an actual or prospective bidder and 2) that it has a direct economic

interest.”); AECOM Mgmt. Servs., Inc. v. United States, 147 Fed. Cl. at 290; PAE-Parsons

Global Logistics Servs,. LLC v. United States, 145 Fed. Cl. 194, 198 (2019); Timberline

Helicopters, Inc. v. United States, 140 Fed. Cl. 117, 120 (2018); Contract Servs., Inc. v.

United States, 104 Fed. Cl. 261, 269 (2012).

As noted above, in response to defendant’s and intervenor’s motions to dismiss,

Asset argues that Asset has standing “because it was an actual bidder whose direct

economic interest is affected by the award of the contract to Akima.” Asset claims its

proposal “was highly rated and lower priced as compared to Akima’s proposal, and

Asset’s proposal was considered as one of just three proposals in the best value tradeoff

conducted by ICE,” which “[b]ut for the errors in ICE’s evaluation and best value tradeoff,

there is a substantial chance that Asset would have received the contract award under

the Solicitation.” Asset also argues that defendant’s and intervenor’s claims that Asset

submitted a non-responsive bid, and, therefore, lacks standing to bring the above

captioned protest, are flawed. Asset’s pricing proposal, states, in part: