Progress for Bakersfield Veterans, LLC v. United States

No. 20-1050C

(Filed: December 22, 2020)

(Re-Filed: January 7, 2021) 1

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PROGRESS FOR BAKERSFIELD

VETERANS LLC,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

and

SASD DEVELOPMENT GROUP LLC,

Intervenor.

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Elizabeth Newell Jochum, Washington, DC, for plaintiff, with whom

was Zachary D. Prince, Nora K. Brent, Jessica L. Nejberger, and Robert C.

MacKichan, Jr., of counsel.

Reta E. Bezak, Trial Attorney, United States Department of Justice,

Civil Division, with whom were Jeffrey Bossert Clark, Acting Assistant

Attorney General, Robert E. Kirschman, Jr., Director, and Douglas K.

Mickle, Assistant Director, for defendant. Kathryn M. Downey, U.S.

Department of Veterans Affairs, of counsel.

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This opinion was originally issued under seal in order to afford the parties

an opportunity to propose redactions of protected material. Plaintiff filed an

unopposed document with proposed redactions on December 30, 2020 (ECF

No. 61). We thus reissue this opinion with the proposed redactions.

Patrick T. Rothwell, Esq., Washington, DC, for intervenor. Jonathan

T. Williams, Timothy F. Valley, and Jonathan I. Pomerance of counsel.

OPINION

BRUGGINK, Judge.

In this pre-award bid protest, Progress for Bakersfield Veterans, LLC.

(“PBV”), alleges that the Department of Veterans Affairs (“VA”) unlawfully

excluded PBV’s three offers from the competitive range and included only

SASD Development Group, LLC’s (“SASD”) offer based on a defective

proposal evaluation that was not in accordance with the solicitation or

Federal Acquisition Regulation (“FAR”) Part 15. Plaintiff also asserts that

the agency showed bias through a preference for SASD’s proposal and that

the award of a 20-year lease under this solicitation would violate the Anti-

Deficiency Act (“ADA”), 38 U.S.C. § 8104. Plaintiff seeks a permanent

injunction requiring the VA to select a new Technical Evaluation Board to

conduct an evaluation of all offers in accordance with the solicitation,

appoint a new Source Selection Official to make a new competitive range

determination and, or alternatively, award determination, and engage in full

and open discussions with all offerors included in the competitive range. The

parties have filed cross-motions for judgment on the administrative record,

which are fully briefed. Also pending are defendant’s and intervenor’s

partial motions to dismiss plaintiff’s Anti-Deficiency Act (“ADA”) and bias

claims for failure to state a claim.

Oral argument was held on December 8, 2020. Because the VA

properly documented its decision and its analysis was reasonable, we grant

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

record and deny plaintiff’s motion. Additionally, we grant defendant’s and

intervenor’s partial motions to dismiss regarding plaintiff’s Anti-Deficiency

Act and bias claims because PBV waived these arguments.

BACKGROUND

On December 9, 2019, the VA issued a solicitation for a 20-year lease

of 30,100 square feet of space to be used for a Community Based Outpatient

Clinic providing primary, specialty, and mental health care to veterans in

Bakersfield, California. Plaintiff is the incumbent on the contract, which is

currently being fulfilled at PBV’s existing facility located at 1801 Westwind

Drive.

2

A. Prior Solicitation

This solicitation followed a prior solicitation involving the same

competition for an outpatient clinic in Bakersfield, California. In the prior

procurement, PBV submitted two proposals, both of which were excluded

from the competitive range. PBV requested a pre-award and post-award

debriefing, but the VA did not provide a debriefing to PBV until after it

executed a lease with the awardee SASD. PBV then filed a protest at GAO.

Before GAO reached a decision, the VA filed a notice of corrective action

indicating that “because the lease contract [with SASD] d[id] not contain a

termination for convenience clause,” it could take no further action regarding

the lease, but would reimburse PBV its bid and proposal costs as well as its

reasonable costs associated with the protest. Complaint (ECF No. 32 at 5).

Over the objection of PBV, GAO dismissed the protest as academic. PBV

filed a protest with this court on March 4, 2019, seeking to enjoin the award

to SASD. The VA again responded with a notice of corrective action, this

time promising that it would reinstate PBV’s proposals into the competitive

range and engage in discussions with PBV regarding the proposals. That did

not occur, however. Instead of reinstating plaintiff, the VA canceled SASD’s

award and issued the current solicitation to begin a new procurement. The

VA sent a notice of cancellation to SASD, directing it to stop all work.

B. Current Solicitation

The current solicitation stated that it would use best value trade off

source selection procedures to award a firm-fixed price lease to the

responsible offeror who represented the best value to the government. The

solicitation allowed offerors to submit multiple bids. Initially, award offers

were due by January 8, 2020, but the deadline was later extended to January

23, 2020.

Offerors were required to submit two proposal volumes, a technical

proposal and a price proposal. The solicitation provided criteria for

evaluating each factor. The solicitation also provided drawings depicting the

VA’s concept plan for site design, floor plan, and parking. The Technical

Evaluation Board (“TEB”) considered the following technical factors, listed

in descending order of importance: Technical Quality, Offeror’s

Qualifications and Past Performance (“Q&PP”), Operations and

Maintenance Plan (“O&M Plan”), and the Offeror’s Socio-Economic Status.

The solicitation included an adjectival rating scale for evaluation factors

which are defined in the description, including: Superior, Highly Successful,

Successful, Marginal, or Poor.

3

The Contracting Officer (“CO”) evaluated price proposals by using a

net present value price evaluation. Both price and the technical factors were

given approximately equal weight in determining the best value. The

solicitation stated that the VA intended to award without discussions but

reserved the right to conduct discussions if the CO determined discussions

were necessary. The solicitation also stated that, if the CO was unable to

make an award after evaluating all proposals, then a “competitive range

comprised of all the most highly rated proposals will be established” with

which to conduct discussion. Administrative Record (“AR”) 185.

C. Evaluation

The agency received six proposals from four offerors, two of which

were considered nonresponsive and were not evaluated by the TEB. The

remaining offers were submitted by PBV and SASD and were evaluated by

the TEB, composed of members of the procurement team and the Source

Selection Authority (“SSA”). The TEB evaluated and documented the

strengths, deficiencies, weaknesses and risks associated with the evaluation

of each offer.

PBV submitted three alternative proposals, all in Bakersfield,

California, two of which were offers to renovate its existing clinic at 1801

Westwind Drive (Westwind Offer #1 and Westwind Offer #2). The third,

the [ ] proposal, was an offer for a new clinic. SASD submitted a

single proposal for a new clinic in Bakersfield, California.

In its initial evaluation, the TEB rated the remaining four offers for

each Technical Proposal evaluation criteria:

Offeror Technical Q&PP O&M Plan Socio-

Quality Economic

Status

PBV’s Marginal Successful Successful Neutral

[ ]

facility

PBV’s 1801 Marginal Marginal Successful Neutral

Westwind

#1 facility

PBV’s 1801 Poor Marginal Successful Neutral

Westwind

#2 facility

SASD Highly Highly Successful Neutral

Successful Successful

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AR 10211.

After the TEB’s evaluation, the SSA elected to establish a competitive

range determination of the most highly rated proposals. The SSA

determined, however, that SASD’s offer had the highest rating and that none

of PBV’s three offers were sufficiently highly rated to merit characterization

as among the highest rated. She concluded that the difference between the

proposals meant that only SASD’s offer would be included in the competitive

range. The agency sent three letters to the plaintiff on April 21, 2020,

notifying PBV that none of its offers were “among the most highly rated

proposals considered for inclusion in the competitive range and therefore

your offer[s] ha[ve] been eliminated from further consideration.” AR 10212-

14 (Pre-award Notice of Elimination from the Competitive Range). The VA

sent a letter to SASD on April 24, 2020, requesting a revised proposal from

SASD. Prior to sending the letter to SASD, the agency conducted

discussions with SASD. SASD submitted its revised proposal to the VA on

May 4, 2020.

D. PBV’s Protests

PBV filed a protest with GAO on May 1, 2020, protesting the VA’s

decision to remove PBV’s proposals from the competitive range. After

extensive briefing, GAO conducted outcome prediction alternative dispute

resolution advising the parties of the probable outcomes of the issues raised

in PBV’s protest. In response, the VA filed a notice of corrective action and

requested dismissal of the protest from GAO, indicating that it would correct

issues GAO identified as “likely to be sustained” or “litigation risks.” AR

13677-78. The VA’s notice promised to reevaluate offers and issue a new

award decision. GAO dismissed the protest as academic.

E. The Reevaluation

The SSA, 2 Ms. Anntwinette Dupree-Hart, and the TEB Chairperson,

Ms. Allyson Lee, reassessed the proposals and assigned new adjectival

ratings to the technical proposals. 3 The reevaluation focused solely on the

four factors of the Technical Proposal evaluation criteria. The TEB

2

The SSA is also the CO for this solicitation.

3

The SSA and the TEB Chairperson annotated the previous TEB report with

colored highlights to remove certain weaknesses and deficiencies from their

consideration, as well as upgrade certain other omissions to deficiencies,

weaknesses to significant weaknesses, and assess new adjectival ratings.

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Chairperson gave SASD the highest ranking among the four proposals

submitted because SASD’s proposal received Highly Successful ratings for

both the Technical Quality and Q&PP factors, “which are the two most

heavily weighted factors.” AR 13715. PBV’s offers received lower rankings

because none of PBV’s offers received better than a Marginal rating under

the Technical Quality and Q&PP factors. All four proposals received a

Successful rating for the O&M Plan factor and a Neutral rating for the Socio-

Economic Status factor, which are the least weighty factors. The TEB

Chairperson’s and SSA’s reevaluation is described in detail below, with the

reevaluation of PBV’s three offers detailed first and the reevaluation of

SASD’s proposal described last.

PBV’s Westwind #1 proposal once again received a Marginal

Technical Quality rating because the SSA and TEB Chairperson concluded

that the proposal contained several significant weaknesses which were not

readily correctible, including what they viewed as the space plan’s significant

departure from the VA’s concept plan, the building structure’s functional,

programmatic, and spatial relationship issues, and the current design’s

operational problems for managing clinic resources, which would require a

major re-design effort. The Westwind #1 offer’s Q&PP was once again rated

as Marginal because the SSA and TEB Chairperson found that the proposal

had significant weaknesses, as plaintiff’s proposal failed to provide the

required financial statements on the net income or cash flow of PBV’s

current projects, and thus, the VA was unable to assess PBV’s liquid assets,

and its ability to fund the project. Additionally, the SSA and TEB

Chairperson found that PBV’s offer lacked information describing the

offeror’s approach to successfully complete contract requirements. The

Westwind #1 offer’s O&M Plan once again received a Successful rating

although the SSA and TEB Chairperson found that the offeror’s O&M Plan

still contained several weaknesses, as it failed to explain how PBV would

implement and manage its quality assurance plan, failed to provide detail on

how PBV would manage its Operations and Management subcontractor, or

identify who would be on site, and did not state the subcontractor’s

experience level. The Westwind # 1 offer again received a Neutral rating for

Socio-Economic Status.

PBV’s Westwind #2 proposal again received a Poor Technical Quality

rating because the SSA and TEB Chairperson found that the proposal

contained numerous weaknesses, including a building interior that appeared

to be sterile and not patient-centric and because the floor plan failed to

implement the model required by the solicitation. This proposal again

received a Marginal Q&PP rating because the SSA and TEB Chairperson

found that the proposal still contained deficiencies and weaknesses, as it did

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not provide financial statements required by the solicitation regarding the net

income or cash flow of PBV’s current project, nor did it provide sufficient

information on how PBV would approach successful completion of the

contract solicitation requirements. The Westwind #2 proposal again received

a Successful O&M Plan rating, as the proposal met the solicitation’s

minimum requirements. However, the SSA and TEB Chairperson found that

the offeror’s O&M Plan still contained weaknesses as it failed to explain how

PBV would implement and manage its quality assurance plan. PBV’s

Westwind #2 proposal again received a Neutral Socio-Economic status

rating.

PBV’s [ ] proposal once again received a Marginal Technical

Quality rating because the SSA and TEB Chairperson determined that the

proposal contained several significant weaknesses which were not readily

correctable, including parking discrepancies, failure to present detail

regarding its plan for successful contract completion, and failure to explain

a strategy for sequencing the work as the solicitation required. The Q&PP

rating was lowered from Successful to Marginal as the evaluators found that

the [ ] proposal contained deficiencies and a significant weakness

because the proposal failed to provide PBV’s net income, required financial

statements, information on the income and cash flow of PBV’s current

project, and detail on how PBV would approach the successful completion

of solicitation requirements. The O&M Plan again received a Successful

rating as the evaluators found that the proposal met the minimum solicitation

requirements although the SSA and TEB Chairperson found that the offeror’s

O&M Plan contained several weaknesses because it failed to explain how

PBV would implement and manage its quality assurance plan, failed to

provide detail on how PBV would manage its Operations and Management

subcontractor, failed to identify who would be on site, and did not state the

subcontractor’s experience level. PBV’s [ ] proposal again received

a Neutral Socio-Economic Status rating.

SASD’s proposal again received a Highly Successful Technical

Quality rating as the SSA and TEB Chairperson found that the proposal

exceeded the VA’s evaluation standards by providing a site that appeared

well situated near public transportation, amenities, and highways, had

multiple entrances, excellent traffic flow, clearly distinguished parking for

employees and visitors, a garden, and appealing landscaping. The offer’s

Q&PP rating remained Highly Successful as the evaluators determined that

the offer provided a strong and detailed financial resources plan, information

on SASD’s cash on hand to fund up-front costs, and financial statements.

SASD’s O&M Plan again received a Successful rating because the evaluators

found that the offer provided a strong maintenance plan and exhibited a clear

7

understanding of the VA’s requirements. SASD’s proposal again received a

Neutral Socio-Economic Status rating.

F. Competitive Range Determination

After reevaluation, the SSA established a new competitive range. The

SSA once again evaluated all offers and determined “which were the most

highly rated and eligible for inclusion in the competitive range relying on the

merits of each offer.” AR 13718. Each offer’s merits were determined by

(1) the “quality of the technical (non-price) proposal based on the ratings of

each proposal against all evaluation criteria, as defined” by the solicitation;

(2) “the Present Value (PV) analysis of the price proposals as defined in” the

solicitation. AR 13719. 4 The SSA’s competitive range determination was

based upon the TEB Chairperson’s comparison of the four offers’ ratings,

comments, and assessments of weaknesses, significant weaknesses, and

strengths. The new determination, including a weighing of both technical

and price considerations, was documented for the record. The SSA explained

that the competitive range determination would be made based on a

“comparative assessment of proposals against all selection criteria in the

Solicitation.” AR 13723.

1. Technical Proposal

Given that PBV’s offers received Marginal to Poor ratings, the SSA

found that none of PBV’s bids were highly rated enough to be included in

the competitive range. The SSA determined that both of PBV’s Westwind

proposals lacked sufficient information on PBV’s approach for successful

completion of contract requirements and failed to discuss a strategy for

sequencing the work as required by the solicitation. The SSA also found that

PBV’s Westwind #1 & Westwind #2 proposals were riddled with

weaknesses under all three evaluation factors. The SSA determined that

PBV would have to make multiple, substantial revisions to its proposal to be

considered for award.

Additionally, the SSA found that both of PBV’s Westwind proposals

raised issues that were not readily correctible. The SSA explained that “[to]

be considered readily correctable, the change would be a minor revision,

4

Although the solicitation required offerors to meet Office of Management

and Budget (“OMB”) standards prior to award by qualifying as an operating

lease, the SSA stated that her determination of the competitive range would

not yet consider whether an offer would score as an operating lease treatment

by OMB Standards.

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rather than a wholesale redesign of the proposed interior layout or site plan

that would not tax the VA’s time and resources.” AR 13722-23. She

concluded that both of PBV’s Westwind proposals contained significant

departures from the VA’s concept floor plan, as entire departments or

functions were relocated, creating operation problems for management of

clinic resources. The SSA determined that this issue was not readily

correctable because it would require a major re-design effort.

Lastly, the SSA determined that PBV’s Westwind offers failed to

provide the required financial statements on the annual net income or cash

flow of PBV’s current projects. The SSA found that PBV’s failure to provide

these required financial statements presented an unacceptable risk to the

contract because neither offered the minimum information needed to verify

PBV’s ability to fund the project and its liquid assets. Although both PBV’s

Westwind offer’s O&M Plan met the minimum solicitation requirements by

providing a basic maintenance plan using the solicitation as a template, the

offers failed to explain how PBV would manage and implement PBV’s

quality assurance plan, failed to include information on how plaintiff would

manage its Operations and Management subcontractor, did not identify the

subcontractor that would be on site, and did not describe the subcontractor’s

experience level.

The SSA also concluded that PBV’s [ ] offer had several

significant weaknesses that were not readily correctable, including issues

with parking and site circulation. Although she determined that the site was

well situated near amenities and public transportation, provided easy access

to surrounding streets, and was well maintained, she noted that the parking

plan lacked dedicated garage spaces, the garage apparently lacked an

elevator, which was required by the solicitation, the garage was further away

from the Community-Based Outpatient Clinic (“CBOC”), and the site did

not have a clear walking path connecting the CBOC to the garage. The SSA

found that the occupied buildings surrounding the site prohibited correction

of these issues.

Additionally, the SSA stated that PBV’s [ ] offer lacked

sufficient information on PBV’s approach to successfully complete contract

requirements and did not address its plan to sequence work, and she found

that PBV’s offer failed to provide required financial statements on the

income or cash flow of PBV’s current projects. This lack of information

presented an unacceptable level of risk, she found, as the agency would be

unable to verify PBV’s liquid assets and its ability to fund this project.

Although the SSA determined that the PBV’s O&M Plan met the minimum

solicitation requirements by providing a basic maintenance plan using the

9

solicitation as a template, the SSA found that it failed to explain how PBV

would manage and implement PBV’s quality assurance plan, did not include

information on how plaintiff would manage its Operations and Management

subcontractor, did not identify the subcontractor that would be on site, and

did not describe the subcontractor’s experience level.

The SSA found that with SASD’s Highly Successful Technical

Quality rating, the technical proposal was conditionally acceptable. The SSA

explained that conditionally acceptable means that even though the proposal

may have deficiencies and weaknesses, the deficiencies and weaknesses do

not limit SASD’s understanding and ability to complete the project

successfully. The SSA found that SASD’s offer presented a building design

with high quality materials and construction, access to daylight, and

incorporating wellness and wayfinding concepts. The SSA determined that

SASD’s proposal also included detailed information about its financial plan,

including information on its cash flow to provide for up-front costs, and

financial statements sufficiently showing SASD’s financial capability. The

SSA found that because the solicitation required evidence of independent

CPA verification and three years of tax returns, SASD’s failure to provide

these documents was considered a readily correctable omission as the SSA

found that this issue was readily correctable. The SSA determined that this

issue was readily correctible because the omitted information “is highly

likely to be available within days upon request, as the documentation should

already exist based on the documentation reviewed.” AR 13724.

2. Price Proposal

The SSA explained that her competitive range determination would

be based on a comparative assessment of all the proposals against the

solicitation requirements. The SSA determined the price rankings of each of

the proposals, and then the SSA made her final competitive range

determination by weighing the technical proposals and the price proposals of

each offer.

PBV’s Westwind Offer #2 was ranked first out of four offers in terms

of price as it provided the lowest composite annual price among all offers.

SASD’s offer was ranked second out of four offers as it provided the second

lowest composite annual price among all offers. PBV’s Westwind Offer #1

provided the third lowest composite annual price among all offers. PBV’s

[ ] proposal was ranked fourth out of four offers.

The SSA eliminated PBV’s Westwind Offer #1 from further

consideration because of the combination of the proposal’s Marginal

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technical rating and its price ranking. It was ranked third for its price, with

a PV of $55.52/sf for 20-year lease and received a Marginal Technical

Quality Rating, demonstrating PBV’s failure to fully meet solicitation

requirements, and the SSA found that the offer contained weaknesses and

significant weaknesses that were not readily correctable. While the SSA

found that the risks presented by a Marginal rating were not as significant as

a Poor rating, the SSA concluded that the Marginal rating still presented a

great risk to the project.

Although PBV’s Westwind Offer #2 had the lowest price out of all

the offered leases, with a PV of $42.08/sf 20-year lease, it received a Poor

Technical Quality rating, the lowest possible rating, meaning that the

proposal contained uncorrected or uncorrectable deficiencies. The SSA

found that such deficiencies presented an unacceptable, high risk of

unsuccessful performance on the contract. This offer, she found, also

contained significant weaknesses and omissions, showing that the offeror did

not understand the VA’s requirements. The SSA found that this lack of

understanding presented a risk to the project’s cost and schedule, and thus,

she eliminated this proposal from consideration.

PBV’s [ ] proposal was the most expensive lease offered, with

a PV of $66.56/sf 20-year lease, which is $15.64/sf more than SASD’s offer.

This proposal also contained significant weaknesses and deficiencies that the

SSA found were not readily correctable. The SSA determined that the

proposal’s Marginal Technical Quality rating presented an unacceptable,

high risk of unsuccessful performance on the contract. She thus eliminated

the [ ] proposal from consideration because of its Marginal Technical

Quality rating combined with the fact that it offered the most expensive

proposal.

SASD’s proposal had the [ ] lowest price offered, which was [ ]

% below the prospectus rental rate. Additionally, the SSA stated that “there

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is a good chance that the cost/price can be improved to the Government’s

benefit after discussions.” AR 13724. SASD received a Highly Successful

Technical Quality rating, and the SSA found that SASD’s deficiencies were

readily correctable, and thus, did not present risks to successful contract

completion. The SSA again selected SASD as the only proposal in the

competitive range determination because of the combination of SASD’s

price proposal and its Highly Successful Technical Quality rating.

5

The prospectus rental rate is $88.94/NUSF (2020 escalation) for a 20-year

firm term with a 24-month construction period.

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In conclusion, the SSA concluded that all three of PBV’s proposals

presented risks such that the offers could not be placed in the competitive

range for further consideration. The SSA determined that the competitive

range would consist only of SASD’s proposal, which, even though it could

not be awarded outright, had correctible weaknesses.

The agency sent plaintiff three letters notifying PBV of the

elimination of its offers from the competitive range. According to the

representations of the parties during the oral argument held on December 8,

2020, the VA has not yet awarded the contract to SASD, and the VA has not

yet conducted a second round of discussions with SASD. Plaintiff filed its

complaint here on August 20, 2020.

DISCUSSION

Plaintiff has many arguments challenging the VA’s reevaluation of

offers and the procurement itself: (1) the VA acted arbitrarily and

capriciously when it conducted evaluations; (2) the VA acted unreasonably

in performing its OMB scoring analysis; (2) the VA unreasonably established

its competitive range determination; (3) the VA engaged in disparate

treatment of PBV vis-à-vis SASD; (4) the VA’s reevaluation was

insufficient; (5) the solicitation violates the Anti-Deficiency Act; (6) the

VA’s conduct shows bias against PBV.

Our review is deferential in accordance with the standard set forth in

the Administrative Procedures Act, 5 U.S.C. § 706, which is to say that we

review agency action in a procurement for illegality and a lack of rationality.

Impressa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d

1324, 1332-33 (Fed. Cir. 2001). So long as the agency’s decision was not

irrational or otherwise illegal, we will leave it undisturbed.

I. Defendant’s and Intervenor’s Partial Motion to Dismiss

Defendant argues that plaintiff’s Anti-Deficiency Act and bias claims

were waived and thus should be dismissed pursuant to Rule 12(b)(6) for

failure to state a claim. Intervenor contends that plaintiff’s ADA claim

should be dismissed under Rule 12(b)(1) for lack of standing, under the

Doctrine of Laches, or alternatively under Rule 12(b)(6) for failure to state a

claim. Intervenor also argues that plaintiff’s bias claim should be dismissed

under Rule 12(b)(1) for lack of standing, or alternatively under the Doctrine

of Laches. As explained below, we grant defendant’s and intervenor’s partial

motion to dismiss plaintiff’s ADA and bias claims under Rule 12(b)(6) for

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failure to state a claim on the grounds of waiver. It is thus unnecessary to

address intervenor’s additional arguments in favor of dismissal.

PBV alleges that an award of a 20-year lease under this solicitation

would violate the Anti-Deficiency Act, 38 U.S.C. § 8104, because the ADA

requires congressional approval for funding certain federal medical facilities

and the authorizing legislation for this procurement contains a limitation that

the lease should end no later than 2032. Plaintiff argues that the legislation’s

limitation of the lease period prevents the full execution of a 20-year lease,

as award of the lease in 2020, or later, will go several years beyond the

congressional authorization. The government responds that plaintiff has

waived this argument because PBV did not raise this argument prior to

submitting a bid. We agree.

The solicitation was clear on its face that a 20-year lease was

contemplated. If plaintiff was concerned with the legality of such a contract,

the time to complain was prior to bidding. Not having done so, the issue was

waived. Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314 (Fed.

Cir. 2007) (quoting N.C. Div. of Servs. for the Blind v. United States, 53 Fed.

Cl. 147, 165 (2002) (describing “the proper procedure for the offeror to

follow is not to wait to see if it is the successful offeror before deciding

whether to challenge the procurement, but rather to raise the objection in a

timely fashion.”)). The rule in Blue & Gold has been “applied to all situations

in which the protesting party had the opportunity to challenge a solicitation

before the award and failed to do so.” COMINT Sys. Corp. v. United States,

700 F.3d 1377, 1382 (Fed. Cir. 2012). Plaintiff had every opportunity to

raise this argument prior to submitting its bid. It is too late now.

PBV also claims that this procurement is inherently biased because of

the VA’s decision to cancel the prior procurement instead of following

through with its proposed corrective action. Plaintiff has three allegations

which it claims are evidence of bias. First, plaintiff claims that the VA’s

decision to cancel the 2018 procurement instead of taking corrective action

is evidence of bias. Next, PBV alleges that the agency’s decision to re-issue

the solicitation on December 9, 2019, with a deadline for offerors to respond

by January 8, 2020, gave an advantage to SASD over PBV, as it left little

time for substantial revision. Lastly, PBV claims that the VA committed

procurement violations and engaged in disparate treatment in both its

evaluation and reevaluation of the 2020 procurement. The first two

arguments, however, were available to plaintiff prior to submitting its bid for

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competition in this solicitation. Thus, PBV’s failure to raise these arguments

regarding bias has resulted in waiver of the arguments under Blue & Gold.

The last argument in support of plaintiff’s bias claim is dealt with on the

merits below. 6 We grant defendant’s and intervenor’s partial motion to

dismiss these allegations for failure to state a claim under Rule 12(b)(6).

II. Injunctive Relief

We now move to the merits of plaintiff’s request for a permanent

injunction on the remaining grounds at issue. A party seeking the

extraordinary remedy of an injunction “bears the burden of proving

entitlement to relief, central to which are success on the merits and

irreparable harm.” Red River Serv. Corp. v. United States, 60 Fed. Cl. 532,

541 (2004) (citing Sofamor Danek, 74 F.3d 1216 at 1219 (Fed. Cir. 1996)).

When considering whether to grant a permanent injunction, the court must

consider whether “(1) the plaintiff has succeeded on the merits, (2) the

plaintiff will suffer irreparable harm if the court withholds injunctive relief,

(3) the balance of hardships to the respective parties favors the grant of

injunctive relief, and (4) the public interest is served by a grant of injunctive

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

2009). Although an award of injunctive relief is based on consideration of

this four-factor test, failure to achieve success on the merits is dispositive.

See Career Training Concepts, Inc. v. United States, 83 Fed. Cl. 215, 219

(2008) (“[A] permanent injunction requires actual success on the merits.”).

A. Success on the Merits

PBV advances four challenges to the VA’s reevaluation of offers: (1)

the VA acted arbitrarily and capriciously when it conducted evaluations; (2)

the VA unreasonably established its competitive range determination; (3) the

VA engaged in disparate treatment of PBV vis-à-vis SASD; (4) the VA’s

reevaluation was insufficient. We find that all four of plaintiff’s challenges

lack merit. We consider each in turn.

1. The VA acted reasonably when it conducted evaluations

in this solicitation

PBV makes several arguments regarding the VA’s weighing of the

relative strengths and weaknesses of PBV’s and the intervenor’s offers,

6

Even if elements of bias were not waived, we note in the merits discussed

below that the agency’s reevaluation was reasonable.

14

including the following: (1) the VA arbitrarily and capriciously assessed

weaknesses and failed to assess strengths to PBV’s offers; (2) the VA used

unstated evaluation criteria in its reevaluation; (3) the VA’s evaluation

omitted the required consideration of moving costs; (4) the VA arbitrarily

and capriciously evaluated SASD’s proposal.

a. PBV’s Evaluation

PBV contends that the VA’s evaluation loosely applied rating

definitions to an offer without considering the weaknesses and strengths of

the offer. We find no merit to these allegations. The TEB and SSA

documented the strengths and weaknesses of each offer in a descriptive,

narrative format. The SSA’s reevaluation and new competitive range

determination clearly considered the relative weight of these ratings,

especially of the weaknesses, and determined whether they were easily

correctable or not. The record does not support PBV’s contention that the

VA mechanically applied adjectival ratings, forsaking any meaningful

consideration of the proposals. We find no basis to question the ratings and

subsequent consideration of them.

PBV also argues that the VA arbitrarily and capriciously assessed

weaknesses and failed to assess strengths to PBV’s offers, including the

following two features: an adjacent space offered in PBV’s Westwind #1

proposal, and the parking garage offered in its [ ] proposal. PBV

contends that the VA acted arbitrarily and capriciously by assessing both a

strength and a significant weakness to the adjacent space in its Westwind #1

proposal. In the Westwind #1 offer, the VA found that the empty space

adjacent to the building could provide a benefit if the right tenant utilized the

space, but the evaluator noted that the VA would have no say as to who will

lease the newly annexed and adjacent space, thus presenting a risk to the VA.

The agency, however, perceived a potential risk and a potential reward in this

aspect of PBV’s proposal. We find no inherent irrationality in recognizing

both for the same feature.

PBV further argues that the assigned weakness for this location was

not warranted because PBV explained in its proposal that “direct access to

this north swing space will be closed” after the completion of renovations

and “[i]f, but only if the VA agrees, the north swing space could be made

available in the future for occupancy by private organization and volunteer

groups that provide services to veterans.” AR 3208. As defendant correctly

15

points out in its brief, however, PBV did not explicitly promise in its proposal

that the VA would have a role in selecting the organization that would move

into the swing space. Thus, it is not irrational for the SSA to have evaluated

this as a potential risk.

PBV also argues that the VA failed to recognize the benefits of a

parking garage when it considered PBV’s [ ] offer. In its evaluation,

the agency apparently assumed that PBV’s proposal lacked an elevator in the

garage. Defendant points out that PBV did not make explicit that the garage

had an elevator. Not having made this feature explicit, we find no failure on

the part of the agency in not assigning a strength for the parking garage

elevator. 7 It is reasonable for an agency to rely upon the terms of a proposal.

It is the offeror who “bears the burden of presenting an adequately written

proposal that satisfies the terms of the solicitation . . . and an offeror’s mere

disagreement with an agency's decision does not render that decision

unreasonable.” Poplar Point RBBR, LLC v. United States, 147 Fed. Cl. 201,

223 (2020) (internal citations omitted).

b. The VA did not apply unstated evaluation criteria

The SSA and TEB Chairperson framed their reevaluation around the

comments to the original evaluation but indicated that comments highlighted

by grey shading “were not considered.” AR 13683. There were many such

highlights and thus numerous comments concerning weaknesses and

deficiencies which were not taken into account in the reevaluation. In

explaining what was done, however, the SSA created some confusion and

thus room for an argument by plaintiff. The entire explanatory paragraph

reads as follows: “Comments highlighted in Grey were not considered by the

SSA & TEB Chairperson; believed to be non-applicable to the requirements

of the Solicitation. These comments did not contribute to the TEB

Chairperson’s overall rating.” Id. From this, plaintiff creates an argument

that is based on the assumption that if a weakness or deficiency were

highlighted anywhere in any of the three proposal evaluations none of the

evaluation criteria associated with that weakness should be applied to any of

the other proposals. Plaintiff argues that the VA inconsistently removed

7

We also find that it was rational for the VA to consider other weaknesses

of parking in the [ ] proposal, such as the walking distance of the

garage to the clinic.

16

items from consideration in the reevaluation, resulting in the application of

evaluation criteria which was not stated in the solicitation.

Without going into the details put forward by plaintiff, it is sufficient

to observe that virtually the entire argument is based on a false premise. It is

apparent to the court that it was not the SSA’s intent to deem all highlighted

weaknesses as associated with inapplicable evaluation criteria. Indeed, the

extensive commentary left standing, plus the reevaluation commentary

makes clear that the only instance of the VA backing away from a solicitation

criterion relates to the application of Interim Life and Safety Plan and

Infection Control Risk Assessments code-based requirements. As to that one

evaluation criterion, the disavowal applied to all proposals containing

comments pertaining to this criterion. There is, in short, no inconsistency in

the application of evaluation criteria.

c. Evaluation of Offerors’ Moving Costs

PBV argues that the VA’s reevaluation omitted the required

consideration of the cost of furniture, telecommunications, replications costs,

and other related moving costs, and that it was prejudiced because the agency

omitted this consideration and failed to document the decision to do so.

However, this assertion is misguided. The solicitation only required the

inclusion of moving costs in the price evaluation, “if applicable.” AR 172.

The VA stated before GAO that it did not consider moving costs, explaining

that “the cost of relocation of furniture, telecommunication, replication costs,

and other move-related . . . were determined not to be applicable in the VA’s

evaluation of PBV’s proposals (or for any other offeror) as these items would

not be relocated.” 8 AR 13509. We find no reason, nor has plaintiff provided

one, to conclude that the decision was wrong.

Moreover, the VA’s decision to not account for such moving costs did

not disadvantage PBV in any way because the agency did not consider the

moving costs in the price evaluation for any offeror. Additionally, there is

8

The agency explained that the VA’s current clinic “was constructed over

28 years ago, and at this point the tenant improvements, furniture, and

telecommunication equipment are beyond their useful life. The entire facility

will need to be updated to align with the VA’s more modernized healthcare

delivery model.” AR 13509.

17

no evidence that consideration of moving costs would have benefitted PBV

in any way. 9

d. Evaluation of SASD’s Proposal

Next PBV asserts that the VA arbitrarily and capriciously evaluated

SASD’s proposal because it should have found that SASD’s proposal failed

to meet several solicitation requirements. Plaintiff argues that (1) the VA

failed to recognize that SASD did not submit a required zoning letter and

proposed a site not properly zoned; (2) the VA failed to find that SASD’s

proposed site is subject to an easement and is therefore not “free of any

encumbrances,” as required by the solicitation; (3) the VA failed to assess a

weakness to SASD’s proposal for site adjacencies; and (4) the VA failed to

assess a weakness to SASD’s proposal because it was unclear whether the

stated enhancements and modifications in SASD’s proposal were included

in its offer.

As to the first issue, the solicitation required offerors to submit a letter

from the local zoning authority showing that the offered property meets the

VA’s intended use as currently zoned. PBV contends that the VA failed to

recognize that SASD did not submit the required zoning letter and proposed

a site not zoned for a CBOC.

The solicitation contained two provisions relating to zoning. First, the

solicitation stated that offerors should provide, “A letter/letters from the AHJ

[Authority Having Jurisdiction] providing evidence of current zoning of the

property/properties being offered at time of initial proposal submission that

the property/properties as zoned meets the VA’s intended use or how the

property could be made to meet the VA’s intended use.” AR 156. There is

also, however, a provision which stated that an offeror must:

Provide evidence of compliance with local zoning laws or

evidence of variance, if any, approved by the proper local

authority. Provide evidence of compliance with any specific

zoning conditions that may be required in order to develop the

9

Defendant argues that consideration of moving costs would likely have

harmed PBV’s chances of selection for the competitive range determination,

as PBV’s Westwind proposals included renovations and construction, which

would have required the VA to move twice, first to the temporary space made

available during renovation and second to the new clinic after renovation.

18

property. At the discretion of the Contracting Officer, other

forms of documentation demonstrating the probability of

receiving such variances may be acceptable.

AR 184.

Defendant argues that SASD’s proposal met the solicitation’s zoning

requirement by demonstrating that its proposed site is zoned for a CBOC.

The government cites the Kern County zoning map submitted by SASD with

its proposal that shows that the offered land is zoned as “M-2” (“Medium

Industrial”), AR 8615, and a county zoning ordinance provided by SASD

detailing permitted uses for M-2 districts, also, which includes “[c]linic,

medical or physical therapy, out-patient only.” AR 8622. Intervenor adds

that SASD corrected any ambiguity in this regard by including with its

revised proposal a letter from the Kern County Planning Director confirming

that SASD’s location was in the M-2 Zone and that the property met the VA’s

intended use. 10

We find this requirement met by the map and zoning ordinance

submitted by intervenor with its proposal. This is supported by the VA’s

letter to SASD requesting a revised proposal, “Per SFO Par. 2.5, 11 you did

provide sufficient evidence of compliance with local zoning laws. However,

if you do have a letter or email from the local authority to this effect, please

include it with your revised proposal.” AR 10216. Although this

demonstrated that the agency was satisfied that SASD’s zoning requirements

were met, the VA went on to request a zoning letter from SASD. Thus, the

agency treated this issue as one that was readily correctible, and SASD

corrected the issue by providing the letter in its revised proposal to the VA.12

10

We note that the record shows that the letter which intervenor refers to in

its motion (ECF No. 47 at 30) was actually from the City of Bakersfield

Planning Director.

11

Solicitation paragraph 2.5 is the same language in the block quote above,

located on AR 184.

12

While plaintiff also argues that SASD relied on the wrong zoning

authority, we find that the VA had sufficient evidence to conclude that Kern

County was the proper zoning authority for SASD’s proposed site.

19

PBV further asserts that the VA failed to recognize that SASD’s

proposed site is subject to an easement and is therefore not “free of any

encumbrances,” as required by the solicitation, which stated that the offered

site should “be free of any encumbrances or contingencies, including use

restrictions, which may limit the rights, responsibilities or liabilities of the

parties to the VA lease.” AR 156, 184. SASD’s proposal included a legal

description of the proposed land, and this description identified a public-

right-of way easement between Knudsen Drive and Landco Drive.

Defendant and intervenor point out that the solicitation did not require

the proposed site to be free from all easements, but merely those that in some

way “limit the rights, responsibilities or liabilities of the parties to the VA

lease.” AR 156. The government further argues that the street containing

this public right-of-way is outside the property line of the proposed site, and

that, because the road is public, rather than limiting the use of the street or

the property, the easement provides additional access to the proposed site.

We conclude that it was reasonable for the VA to not consider a public

right-of-way easement as an encumbrance or otherwise a meaningful

limitation on the property’s use. The easement lies outside of the proposed

property line and defendant’s larger point is well taken that its actual effect

on the property is to ensure greater access.

Relatedly, PBV argues that the VA failed to assess a weakness to

SASD’s proposal for site adjacencies. The solicitation indicated offerors

would be evaluated for the characteristics of their site’s location, including

site adjacencies. PBV contends that the VA’s first evaluation of SASD’s

proposal was correct when it assessed a weakness for its site characteristics

because the development lacked any other class A buildings. PVB asserts

that the deletion of this weakness from the VA’s reevaluation of SASD was

in error because the lack of positive adjacencies had not changed.

The government counters that the agency’s explanation during

reevaluation shows the rationality of the decision not to find a weakness:

The TEB Chairperson & SSA determined the comment

regarding the site not being around any other Class A buildings

inapplicable. SFO Section 1.11, Site Selection Criteria, lists

the minimum characteristics which the site offered must meet.

Being in “close proximity to other Class A buildings,” per the

20

Evaluator’s comment, is not a requirement of the [solicitation]

and therefore, the comment did not contribute to the Offeror’s

overall rating.

AR 13711. Defendant also points out that, although the “Quality of Site

Characteristics” section of the solicitation identifies “site adjacencies” as a

consideration, AR 173, nothing in the solicitation states that the presence of

other Class A buildings benefits a proposed site. Thus, the government

contends that PBV failed to demonstrate that this observation should be

considered a weakness. 13

PBV next argues that the VA should have assessed a weakness to

SASD’s proposal because it was unclear whether the stated enhancements

and modifications were included in the proposal, triggering the need for

further clarification. PBV argued that because TEB was unable to determine

what elements of SASD’s design were included in the offer, this aspect of

the proposal should have received a significant weakness, i.e., “A flaw in the

proposal that appreciably increases the risk of unsuccessful contract

performance.” AR 10178.

The government contends that, at worst, this omission was an

ambiguity and that plaintiff has not shown why the agency should have

considered it a weakness. Thus, in defendant’s and intervenor’s view, this

argument is a mere disagreement with the agency’s evaluation.

We agree. The solicitation did not require that these particular

enhancements and modifications be provided in the first place. Although the

VA did not assign a strength, likely because it was unclear whether these

enhancements would convey, that does not mean that a weakness was

appropriate.

2. The VA reasonably established its competitive range

determination

Plaintiff asserts that the competitive range determination was flawed

because the VA failed to properly conduct its OMB scoring analysis.

Plaintiff relies on language stated in the solicitation that a lease is awardable

only if the lease scores “as an operating lease under Office of Management

13

The solicitation defines a “weakness” as “[a] flaw in the proposal that

increases the risk of unsuccessful contract performance.”

21

and Budget Circular A-11, Appendix B.” AR 162. In the reevaluation, the

VA conducted an OMB scoring analysis and found that only SASD’s offer

and PBV’s Westwind #2 offer scored as operating leases. PBV argues that

the VA conducted its OMB scoring analysis improperly as to both SASD’s

and PBV’s proposals. The short answer to these arguments is that what is in

front of the court is only the reevaluation and the competitive range

determination and not the award. The record is clear that the CO did not use

the OMB scoring analysis as a device to make the competitive range

determination.

PBV also contends that the competitive range determination was

flawed because it resulted in a competitive range of one offeror. The

government responds that FAR § 15.306(c) gives an agency discretion in

establishing a competitive range with only one offeror, as FAR merely

requires an agency to consider the “most highly rated proposals.” Sys.

Dynamics Int’l v. United States, 130 Fed. Cl. 499, 514 (2017) (quoting FAR

§ 15.306(c)). Thus, this court has found that an agency’s competitive range

determination composed of only one offer is reviewed under “the usual

arbitrary and capricious standard . . . .” Id. at 515.

Here, the VA offered a detailed explanation for its decision to include

only SASD’s offer in the competitive range. The agency described PBV’s

proposals as containing many weaknesses which were not “readily

correctable,” and would require “multiple revisions to their proposal in order

to be realistically considered for award.” 14 AR 13722. Additionally, while

the VA rated several of the technical factors in PBV’s proposals as

“Marginal” or “Poor,” the VA rated those same factors in SASD’s proposal

as “Highly Successful.” AR 13719. In short, the agency determined not only

that SASD’s proposal was the most highly rated, but that the three remaining

proposals were qualitatively so much poorer that there was no point including

any of them in the competitive range. Because we find no error in the

agency’s assessment of the four proposals and their correctability, as

explained below, we find that the VA’s decision to place only the most highly

rated proposal, SASD’s proposal, within the competitive range is supported

by the record and is not arbitrary or capricious.

3. Disparate Treatment of PBV

14

“To be considered readily correctable, the change would be a minor

revision, rather than a wholesale redesign of the proposed interior layout or

site plan that would not tax the VA’s time and resources.” AR 13722.

22

PBV contends that the VA treated PBV disparately in its evaluation

of similar aspects of PBV’s and SASD’s proposals. Plaintiff begins by

observing that the identification of an issue as readily correctable by an

evaluator played an important part in the assessment of adjectival ratings.

PBV then argues that the agency evaluated PBV and SASD disparately by

exaggerating the importance of issues raised with respect to PBV’s

proposals, issues which plaintiff alleges were readily correctable, and

disregarding issues with SASD’s proposal that plaintiff alleges were not

correctable.

The issues which the VA considered weaknesses but PBV claims

should have been considered readily correctable include landscaping,

wayfinding (signage), trash enclosure locations, pharmacy entrances, lack of

financial information, lack of pedestrian walkway identification, and

reception desk orientation. Other than identifying the weaknesses the agency

assigned to PBV’s proposals which plaintiff believes were readily

correctible, plaintiff does not further explain why the listed weaknesses in

PBV’s proposals should have been considered readily correctable. Plaintiff

also argues, in its reply, that had the VA considered several of plaintiff’s

flaws as readily correctible, then PBV’s adjectival ratings would have been

higher. 15

The government argues that an agency can find an item to be readily

correctible and still assign it a weakness, as a weakness is defined as “[a]

flaw in the proposal that increases the risk of unsuccessful contract

performance.” AR 10178. To find that a flaw is readily correctable, “the

change must be minor, rather than a total redesign of the proposed interior

layout or site plan that would tax the VA’s time and resources to review and

approve.” AR 13686. In its evaluation, the VA detailed the reasons why it

15

PBV most likely refers to a few of the adjectival ratings which the

solicitation defines: “Highly Successful: Meets and to some extent exceeds

evaluation standard; no Deficiencies or Significant Weaknesses are present.

May contain a few Weaknesses which are readily correctable. Contains

several Strengths. Successful: Meets evaluation standard; Deficiencies,

Weaknesses and Significant Weaknesses are readily correctable. Marginal:

Does not fully meet the evaluation standard; contains a number of

Weaknesses or Significant Weaknesses which are not readily correctable.”

AR 10177-78.

23

assessed PBV’s proposals weaknesses and significant weaknesses, as it

found these issues were not readily correctable.

As defendant argues, plaintiff’s allegation does not support a disparate

treatment claim. It is instead a thinly disguised disagreement with the

agency’s belief that the stated weaknesses were not easily correctable. To

prevail on a disparate treatment claim, “a protestor must show that the agency

unreasonably downgraded its proposals for deficiencies that were

‘substantively indistinguishable’ or nearly identical from those contained in

other proposals.” Off. Design Grp. v. United States, 951 F.3d 1366, 1372

(Fed. Cir. 2020) (quoting Enhanced Veterans Sol., Inc. v. United States, 131

Fed. Cl. 565, 588 (2017)). PBV has not shown that the VA “unreasonably

downgraded its proposals for deficiencies that were ‘substantively

indistinguishable’ or nearly identical from those contained in other

proposals.” Id.

PBV further alleges that the VA engaged in disparate treatment when

evaluating SASD’s and PBV’s proposals by assessing weaknesses to PBV

and not to SASD for similar issues, including: (1) the number of fixtures in

restrooms; (2) views of the highway; (3) distance of proposed parking; and

(4) financial information provided. Finally, plaintiff argues that it was

treated disparately when the VA decided to remove PBV’s offers from the

competitive range without first giving it the chance to have discussions.

For the first issue, PBV claims that the VA assessed a weakness to its

Westwind #1 proposal for including two family restrooms in the lobby with

only one toilet (i.e., single usage), but unfairly did not assess a similar

weakness to SASD’s proposal for including family restrooms with only one

toilet, a textbook example of treating the same issue differently across

offerors.

We disagree. The government correctly points out that intervenor’s

proposal was not the same in this regard. In addition to the two single use

restrooms containing one toilet fixture each, SASD’s site also offered

separate men’s and women’s restrooms that each included three toilet

fixtures. PBV received a weakness for only including two single use

restrooms in the lobby because the VA’s reference concept design, included

in the solicitation, included two family restrooms in the lobby, both of which

had three fixtures each. Thus, PBV’s proposal, which included two family

restrooms with only one fixture each, had less to offer than the concept

24

design, and SASD’s proposal, which included two single-gender restrooms

with three fixtures each and two single-fixture restrooms.

PBV also contends that the VA assessed weaknesses to PBV’s

Westwind offers for having a highway view, while ignoring the fact that

SASD’s proposed site has a highway behind it, also providing a highway

view. Defendant responds that PBV’s argument regarding the highway

discrepancy ignores the distinct features that each site offers. The Westwind

site immediately abuts a highway, that is visible from the parking lot and

three sides of the facility. On the other hand, SASD’s proposed site is further

removed from the highway and borders it on only one side. Thus, the

government argues that the VA appropriately exercised its discretion in

evaluating the distinct features of the two sites differently.

We agree. The record supports the distinction between the two sites. 16

They are differently situated with respect to highways and thus were not

treated disparately.

PBV next contends that the VA treated PBV’s [ ] proposal

and SASD’s proposal disparately by criticizing the [ ] parking as

distant from the CBOC when much of SASD’s proposed parking appeared

to be just as far from the CBOC as PBV’s proposal. PBV also contends that

the VA incorrectly assumed that the [ ] site did not contain an elevator

in the proposed parking garage and a clear walking path from the garage to

the CBOC. However, it was reasonable for an agency to rely upon the terms

of the proposal as written. It is the offeror who “bears the burden of

presenting an adequately written proposal that satisfies the terms of the

solicitation . . . and an offeror’s mere disagreement with an agency's decision

does not render that decision unreasonable.” Poplar Point RBBR, LLC v.

United States, 147 Fed. Cl. 201, 223 (2020) (internal citations omitted).

Intervenor responds that the issue regarding the distance of the

parking lot from the CBOC differs between PBV’s and SASD’s proposals.

While PBV’s [ ] proposal had a parking garage located a distance

away from the CBOC, SASD’s proposed location had dedicated parking near

the CBOC facility, as well as additional parking located at a distance from

the CBOC.

We find that these distinctions are readily apparent in the record, and thus,

16

were appropriate to have been made by the agency at the time.

25

We find that the VA did not treat PBV’s [ ] proposal regarding

the parking plan disparately in comparison with SASD’s proposal, as the

parking plans were different in several respects, and the VA reasonably relied

on the wording of PBV’s proposal. The distance of the parking lot to the

CBOC was not the only issue the VA considered with respect to PBV’s

[ ] parking plan. The TEB Chairperson had several concerns with the

[ ] parking plan, including a lack of dedicated parking spaces, lack of

an elevator in the garage, and lack of a clear walking path from the garage

leading to the main entrance of the CBOC. Her evaluation also mentioned

that the proposal was unclear as to who owns the parking garage and how

“that may impact other areas of the lease such as maintenance.” AR 13703.

Additionally, she commented that for the “Parking to the west of the site,

people [will] have to cross the main entry off of [ ] [in order to enter

the CBOC].” AR 13703.

With respect to whether there was an elevator in PBV’s proposed

garage at the [ ] site, it was reasonable for an agency to rely upon the

terms of the proposal as written. It is the offeror who “bears the burden of

presenting an adequately written proposal that satisfies the terms of the

solicitation . . . and an offeror’s mere disagreement with an agency's decision

does not render that decision unreasonable.” Poplar Point RBBR, LLC v.

United States, 147 Fed. Cl. 201, 223 (2020) (internal citations omitted).

Next, PBV argues that the VA showed disparate treatment when it

evaluated PBV’s and SASD’s proposals regarding financial documents that

were missing. In this respect, in its Notice of Corrective Action to GAO, the

VA stated that it “will reevaluate financial documents provided by SASD

and will treat the omission of required documents as a weakness.” AR

13667. In the reevaluation, however, the TEB Chairperson and SSA found

only an omission in this regard for intervenor. All three of PBV’s offers were

assessed weaknesses for failure to provide financial information.

Defendant argues that the different results are justified because the

missing financial information differed greatly as between the two offers. The

reevaluation comments explain that PBV failed to provide financial

statements backing up loan commitment letters and failed to identify what its

expenses were, which made determination of PBV’s net income or

profitability impossible. The evaluator’s stated that “Without the Financial

Statements required by the [solicitation], the VA was unable to interpret

26

PBV’s liquid assets and their ability to fund this project.” AR 13689-90. On

the other hand, SASD provided evidence of cash-on-hand resources as well

as personal financial statements for the principals. Thus, “TEB determined

that these submittals adequately demonstrated the offerors’ financial

capability,” despite the omission of tax returns for the previous three years.

AR 13713. The two omissions thus were, according to the government, not

a comparison of apples to apples.

Intervenor adds that the agency’s actions were consistent with its

notice to GAO that it would “review the evaluation of SASD’s initial

proposal with regard to the submitted financial documents and will assign a

new adjectival rating as needed.” AR 13674. It argues that this was done as

evidenced by the evaluator’s comments, which show the VA’s reasoning for

again assessing an omission to SASD rather than a weakness:

The offer included a strong, detailed financial resources plan,

including cash on hand to fund up-front costs, and financial

statements that adequately demonstrated the offerors’ financial

capability. However, since the SFO does call for evidence of

independent CPA verification and three years of tax returns,

the TEB Chairperson and SSA acknowledge these as

omissions. This deficiency is readily correctible as the omitted

documentation, causing the technical deficiency, is highly

likely to be available within days upon request, as the

documentation should already exist based on the

documentation reviewed.

AR 13724. Thus the SSA and TEB Chairperson found that SASD’s

missing financial information was “an omission because failure to submit

this documentation does not present the same risks as being a deficiency . .

. .” AR 13713. On the other hand, the evaluators determined that PBV’s

Westwind offers lacked significant financial information warranting a

weakness.

PBV presented several loan commitment letters and claimed

substantial gross income from existing projects, but failed to

provide the required financial statements or information on

their current projects’ actual net income/cash flow. The lack of

Financial Statements, as required by SFO Section 2.4.2(B)(2),

introduced an unacceptable level of risk since PBV failed to

provide VA the necessary minimum documentation necessary

27

to verify PBV’s liquid assets and their ability to fund this

project.

AR 13723.

We find that it was reasonable for the agency to have made differing

assessments of PBV’s and SASD’s proposals in this regard as the missing

documents were materially different in kind. It was not unreasonable for the

agency to have found the information omitted by plaintiff to read more

heavily on the question of financial capability. There was no unequal

treatment.

Finally, plaintiff argues that it was treated disparately when the VA

decided to remove PBV’s offers from the competitive range without first

giving it the chance to engage in discussions. PBV argues that it was

particularly unreasonable for the VA to compare SASD’s offer, which had

benefitted from two previous rounds of discussions with the VA, to PBV’s

offers which did not receive this same benefit. Thus, PBV concludes that in

order to have an equal competitive range determination, the VA needs to

consider if PBV’s offers would stand a reasonable chance of award after

discussions.

We disagree. The agency’s competitive range determination stressed

the importance of the correctability of weaknesses and deficiencies in its

determination of which proposal to include in the competitive range

demonstrating that the VA gave PBV the benefit of that same inquiry in the

new, and independent solicitation.

4. The agency provided sufficient documentation in its

reevaluation

Finally, PBV contends generally that the VA’s reevaluation, after the

GAO protest, was insufficient because the VA did not reconvene the TEB

for a new evaluation and because the SSA and the TEB Chairperson, who

both conducted the reevaluation, did not explain any differences with the

TEB’s evaluation. PBV further alleges that SSA and TEB Chairperson erred

by changing evaluator comments and rating PBV’s proposal more harshly

than the first evaluation without providing a sufficient explanation. Plaintiff

points to the ratings of the evaluation and reevaluation of the [ ]

proposal’s Qualifications and Past Performance, in which the proposal

received a successful rating in the evaluation and a marginal rating in the

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reevaluation. PBV argues that the SSA and TEB Chairperson downgraded

the [ ] proposal without explanation.

The government responds that agencies are not required to start from

scratch when they find that reevaluation of a procurement is needed and

argues that the SSA and TEB Chairperson fully documented the aspects of

the evaluation in which they disagreed with the assessment of a strength or

weakness previously assessed, specifically in detailing why a rating of

Marginal was warranted for the Qualifications and Past Performance factor

of PBV’s proposals.

We agree. The Federal Circuit has “consistently reviewed agencies’

corrective actions under the APA’s highly deferential rational basis

standard.” Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 992 (Fed. Cir.

2018). We find that the SSA and TEB Chairperson adequately documented

their disagreements with the evaluator’s earlier assessments and explained

the reasoning for the changes to ratings.

CONCLUSION

Plaintiff has not established that the VA was unreasonable in its

reevaluation or that it acted in an arbitrary or capricious manner in making

its competitive range determination. Plaintiff’s arguments regarding the

lease length and the prior evaluation come too late. With respect to other

challenges, we find that the VA properly conducted its reevaluation decision.

Not having shown success on the merits, we need not consider the other

injunctive factors. No relief is warranted. Accordingly, plaintiff’s motion

for judgment on the administrative record is denied. Defendant’s and

intervenor’s cross-motions are granted. The Clerk of Court is directed to

enter judgment for defendant. No costs.

s/Eric G. Bruggink

ERIC G. BRUGGINK

Senior Judge

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