Mortgage Contracting Services, LLC v. United States

In the United States Court of Federal Claims

No. 20-1230C

Filed: February 7, 2021

Redacted Version Issued for Publication: March 18, 20211

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MORTGAGE CONTRACTING *

SERVICES, LLC, *

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Protestor *

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v.

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THE UNITED STATES, *

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Defendant, *

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v. *

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INFORMATION SYSTEMS & *

NETWORKS CORPORATION, *

Defendant-intervenor. *

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Greg S. Jacobs, Polsinelli, PC, Washington, DC for protestor. With him was Erin

Felix, Polsinelli, PC.

Ashley Akers, Department of Justice, Washington, DC, Trial Attorney,

Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, for

defendant. With her were Robert E. Kirschman, Jr., Director, Commercial Litigation

Branch, and Brian Boynton, Acting Assistant Attorney General, Civil Division.

Matthew T. Schoonover, Schoonover & Moriarty LLC, Olathe, KS for intervenor.

1 This Opinion was issued under seal on February 7, 2021. 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 and other

conforming redactions. Words which are redacted are reflected with the notation:

“[redacted].”

OPINION

HORN, J.

In the above-captioned post-award bid protest, protestor Mortgage Contracting

Services, LLC (MCS) challenges the decision of the United States Department of

Agriculture (USDA) to award a contract to intervenor, Information System and Networks

Corporation (ISN), arguing that the award was “arbitrary and capricious” and should be

reversed. This Opinion memorializes the oral decision issued by the court which granted

protestor’s motion for injunctive relief, effective immediately at the time of the oral

decision.

FINDINGS OF FACT

The solicitation at issue in the above captioned protest, Solicitation No.

12SAD119R0003 (the Solicitation), explained that the National Account and Financial

Operations Center (NFAOC) is a unit within the USDA’s Rural Division (RD) and is

charged with servicing mortgage loans and grants extended to individuals

in rural areas throughout the United States, Puerto Rico, American Samoa,

the U.S. Virgin Islands, and the Pacific Trust Territories. Beginning

operation in October 1996, NFAOC has serviced as many as 650,000

government loans and grants originating with U.S. Treasury funds.

NFAOC’s mission is to be a cost effective service provider that strives to

keep individuals and families in their homes through the use of various

servicing tools including payment subsidies, moratoriums on payments,

partial payment agreements and other methods. Low and very low income

families are provided this subsidized loan program through a network of field

offices across the United States of America (USA), its territories, and

commonwealths.

(capitalization in original). The Solicitation continued:

The USDA, RD, NFAOC provides exceptional servicing to 258,020 Single

Family Homes (SFH) Direct Loans (DL) made or insured by the Rural

Housing Service (RHS). Currently the loans are valued at over $14 billion

in unpaid principal balance. Under the DL program, individuals and families

receive direct financial assistance from the RD Housing Programs in the

form of home loans to eligible low, and very low-income households, at

affordable interest rates to achieve homeownership. The agency is

committed to providing an opportunity for rural Americans to become and

remain successful homeowners.

(capitalization in original).

2

On April 27, 2019, the USDA issued the Solicitation for property preservation and

inspection services for its rural property portfolio. The Solicitation contemplated a single

award, indefinite-delivery, indefinite quantity contract to the offeror evaluated as the best-

value offeror. The indefinite-delivery, indefinite quantity contract was to be for a total of

18-months, and contemplated the work to be issued under two task orders: Task Order 1

was to be issued for the first 12 months, and was to be issued at the time of award of the

total contract, and Task Order 2 was to be issued for the remaining six months.

Under the heading: “Relative Importance of Factors” the Solicitation stated:

The award resulting from this solicitation will be made based on the best

overall proposal that is determined to be the most beneficial to the

Government (i.e., best value tradeoff process). The Technical Capability

Factor is slightly more important than the Past Performance Factor.

Technical Capability Subfactors, 1.1, 1.2, 1.3, 1.4 and 1.5, are rated in

descending order of importance. Overall, Non-Price Factors, when

combined, are significantly more important than Price. Price is not an

adjectivally rated Factor; however, the Price Factor will become the more

dominant factor as technical proposals reach technical equality. In such

cases, where all non-priced factors being evaluated are virtually the same,

best value may be represented by the lowest-priced proposal. For each

proposal received, the Government will evaluate the following factors:

Factor 1: Technical Capability (overall capabilities to encompass

subfactors belows [sic]:

Subfactor 1.1 Relevant Experience

Subfactor 1.2 Nationwide Coverage, Geographic Service Area

Subfactor 1.3 Management Approach, to include QASP [Quality

Assurance Surveillance Plan]

Subfactor 1.4 Staffing Plan, Key Personnel Resumes,

Subcontractors; Subcontracting Plan

Subfactor 1.5 Property Management System

Factor 2: Past Performance

Factor 3: Price

Contents of the written proposals will be evaluated to determine the degree

and extent to which the requirements set forth in the RFP are satisfied. If a

proposal is determined to be incomplete or fails to fully meet any material

requirement of the RFP, that may render a proposal unacceptable and,

thus, ineligible for award.

In accordance with 52.215-1(f)(4), it is the Government’s intent to award

without discussion; therefore, it is incumbent upon all offers to submit their

best proposal. Award may not necessarily be made to the lowest price(s)

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offered. As such, offerors are encouraged to submit their best proposal

upon initial submission.

(capitalization and emphasis in original).

The work to be performed under the contract was broken down into six separate

contract line items (CLINs): (1) “CLIN 0001: Property Inspections (REO [Real Estate

Owned] and Foreclosure Custodial Properties);” (2) “CLIN 0002: Property Preservation

(REO and Foreclosure Custodial Properties);” (3) “CLIN 003: Reports, NSP [Not

Separately Priced];” (4) “CLIN 004: Contingency Preservation, Pass Through Expenses

(Cost Reimbursable IAW Price List);” (5) “CLIN 005: Other Direct Costs – Travel, NTE

[Not to Exceed];” and (6) “CLIN 006: TRANSITION-IN/OUT.” (all capitalization original).

As reflected below, only CLIN 0001 (CLIN 1) and CLIN 0002 (CLIN 2) were priced.2

For the Technical Factor, the Solicitation stated:

FACTOR 1 – Technical Capability – Overall the Technical Capability will

be evaluated based on the extent to which it is demonstrated a likelihood of

successful performance of the requirements of the Performance Work

Statement (PWS) (Attachment A). The effectiveness and feasibility of the

proposed Technical Capability and the offerors understanding of the work

will be considered as part of the assessing the likelihood of successful

performance.

(capitalization and emphasis in original). The Solicitation explained:

There are five technical capability subfactors that will be evaluated and

considered in descending order of importance as follows and evaluated

based on:

Sub-factor 1.1 - Relevant Experience - Demonstration of experience in

providing services to assist USDA, RD in providing a variety of

property/asset management services associated with pre and post

liquidation of SFH rural properties serving as security for rural housing loans

and guarantees of equivalent portfolio size, as specifically listed in the PWS.

Sub-factor 1.2 – Nationwide Coverage – Geographical Service Area

Demonstration of the capacity to provide a nationwide “Heatmap” of

available personnel for property preservation services

(vendors/subcontractors); displaying the ability, currently or in the future, to

provide services to all 50 United States and the territories of Puerto Rico,

the Virgin the Western Pacific U.S. Territories. To confirm this ability

required, the Offeror must submit a service Heatmap, as discuss in the PWS

[Performance Work Statement] (also see Heatmap Information, Attachment

C1) that reflects coverage of all the states, counties, and territories, and

2The court notes the numbering of the CLINs was inconsistent. For example, CLIN 1 was

sometimes labeled as CLIN 0001 and other times labeled as CLIN 001 or CLIN 1.

4

must also include a plan with tentative timelines to provide 100% coverage

for all USDA services areas.

Sub-factor 1.3 – Management Approach - Demonstration that the offeror

can provide all management, supervision, labor, tools, supplies, insurance,

taxes, fees, permits to complete the services, including all reporting and

documentation as explicitly set forth in the PWS. A demonstration of how

offeror will manage RD’s large nationwide portfolio and an and all quality

assurance implementation. A QASP must be submitted with this plan (see

QASP Template Attachment C2).

Sub-factor 1. 4 – Staffing Plan - Demonstration that current staff available

along with planned staffing levels to meet the technical requirements and

schedules identified in the PWS. Demonstration of ability to onboard and

ramp-up staffing in a given service area. Demonstration of staffing (or a

network of subcontractors (available to handle hazardous materials

remediation (Meth/LB Paint/Mold). To minimally satisfy this sub-factor the

submission must identify staff to be used to satisfy the scope of this

requirement to include both prime and subcontracting staffs. Staffing levels

that are deemed as unrealistic to satisfy the requirement scope will receive

an “Unacceptable” rating. The Offeror is required to include resumes for key

personnel positions and emergency points of contacts. Offeror’s

subcontracting plan must be discussed in this section, and the

subcontracting plan (see C5, Subcontracting Plan Template included with

information submitted with Volume 4, Other Documents).

Sub-factor 1.5 Property Management System – Demonstration that

Offeror has a system that is able to identify real time status (ordering and

tracking) of each RD property, and demonstrate the capability to timely

exchange data with other clients’ loan servicing systems (i.e, USDA utilizes

LoanServ); and must demonstrate that USDA personnel will have access

to request work orders review documentation, and approve/reject items,

etc.

(capitalization and emphasis in original). The Solicitation provided that the technical

aspect of each proposal would be evaluated using a “Combined Technical/Risk Rating,”

which included “consideration of risk in conjunction with the strengths, weaknesses,

uncertainties, and deficiencies in determining technical ratings.” The Solicitation provided

the following table on which the offerors’ technical capabilities would be evaluated:

5

The Solicitation defined the terms strength, weakness, deficiency, and risk as:

Strength - any aspect of a proposal when judged against a stated

evaluation criterion enhances the merit of the proposal or increases the

probability of successful performance of the contract. A significant strength

appreciably enhances the merit of a proposal or appreciably increases the

probability of successful contract performance.

Weakness - A flaw in the proposal that increases the risk of unsuccessful

contract performance. A significant weakness in a proposal is a flaw that

appreciably increases the risk of unsuccessful contract performance.

Deficiency -material failure of a proposal to meet a Government

requirement or a combination of significant weaknesses in a proposal that

increases the risk of unsuccessful contract performance to an unacceptable

level.

Risk – Assessment of risk considers potential for disruption of schedule,

increased costs, degradation of performance, the need for increased

Government oversight, or the likelihood of unsuccessful contract

performance. Factor ratings can be adjusted based on a risk consideration.

(capitalization and emphasis in original). For the Past Performance Factor, the Solicitation

stated:

FACTOR 2 – Past Performance

The past performance confidence assessment rating is based on the

offeror’s overall record of recency, relevancy, and quality of performance.

In addition, for large business concerns, the Government will evaluate past

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performance to determine the extent to which offeror has attained

applicable goals for small business participation under prior contracts that

required subcontracting plans. Relevant experience must be demonstrated

within the last three years of providing property preservation and inspection

services as required in the PWS. Specifically, a review of record of quality

of service, personnel, adhering to contract schedule and cost contract, and

attainment of subcontracting goals, if applicable. In accordance with FAR

15.305(a)(2), the currency and relevance of the information, source of the

information, context of the data, and general trends in contractor’s

performance shall be considered. These are combined to establish one

performance confidence assessment rating for each offeror. In addition, this

assessment of offeror’s performance will contribute to the responsibility

determination.

(capitalization and emphasis in original). Regarding the Past Performance Factor, each

proposal was to be evaluated under the following method:

Regarding the Price Factor, the Solicitation stated:

The base IDIQ 18-month effort as well as Task Order 1, CLINs 001 and

002, will be evaluated for price reasonableness, realism and balance, as

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further described below. The total pricing, including the NTE [Not to Exceed]

plug-in CLINs 004, 005, and 006 will be totaled to come up with the total

IDIQ ceiling price.

CLINS 003 Reports is Not Separately Priced (NSP) and thus not be [sic]

evaluated.

CLINs 004, 005 and 006 also will not be evaluated. The amounts for these

CLINs are estimated plug-in amounts, as shown in C4 Pricing Worksheets.

As noted above, the plug-in amounts will be included in the ceiling total from

CLIN 001 and 002 for the total IDIQ ceiling price; and for Task Order 1, the

total task order price. . . .

7.1 Proposal Analysis

The Contracting Officer is responsible for evaluating price/cost proposals

using the methods of price and cost analysis in accordance with the Federal

Acquisition Regulations. The CO will use the processes of price and realism

analysis, and review service prices for balance in pricing as discussed

below.

7.2 Price Analysis

Price analysis is a process of examining and analyzing a proposed price

without evaluating separate cost elements and proposed profit/fee to

ensure that the proposed price is fair and reasonable. The CO may use the

following techniques in performing price analysis:

(a) Comparison of proposed prices received in response to the Solicitation;

(b) Comparison of previously proposed prices and contract prices with

current proposed prices for the same or similar services (labor categories)

in comparable quantities; and,

(c) Comparison of proposed prices with independent cost estimates.

7.3 Realism Analysis

The purpose of realism analysis is to ensure that proposed prices are not

so low such that contract performance is put at risk from either a technical

and/or cost perspective. It is separate from analyses performed to

determine price reasonableness. Realism analysis determines whether an

offeror’s proposed costs and/or prices:

(a) Are realistic for the work to be performed;

(b) Reflect a clear understanding of the requirements; and

(c) Are consistent with the various elements of the offeror's technical

proposal.

8

Price Realism analysis is an objective process that focuses on the proposed

price and performance risks. Price realism is used when requirements may

not be fully understood by the offeror, there are quality concerns, past

experience indicates that contractors’ proposed prices have resulted in

quality of service shortfalls. Results of the analysis may be used in

performance risk assessments and responsibility determinations.

(capitalization and emphasis in original).

Under section 8, the Solicitation explained the basis for the award:

The award will be made based on the best overall (i.e., best value tradeoff

process) proposal that is determined to be the most beneficial to the

Government, with appropriate consideration given to three (3) evaluation

factors on a trade-off basis: (1) Technical Capability, (2) Past Performance

and (3) Price. All proposals shall be subject to evaluation by a Technical

Evaluation Team (TET). Proposals will be evaluated according to the

evaluation criteria stated above. In conducting its evaluation, the

Government intends to determine which offer proposes the best value.

Accordingly the Government may award any resulting contract to other than

the offer proposing the lowest price or other than the offer achieving the

highest rating. To receive consideration for award, a rating of no less than

“Acceptable” must be achieved for the Technical Capability Factor. The

Government is more concerned with obtaining superior technical features

than with making an award at the lowest overall cost to the Government.

However, the Government will not make an award at a significantly higher

overall cost to the Government to achieve slightly superior technical or

management features. No proposal shall be considered for award that fails

to reflect the offeror’s clear intent to provide the full amount of work

described in this solicitation.

In addition, USDA intends to award a contract without discussions with

offerors but reserves the right to conduct discussions and/or negotiations

with any and/or all offerors, as determined by the Contracting Officer to be

necessary.

(capitalization and emphasis in original).

In response to the Solicitation, 11 offerors submitted proposals, including protester

MCS and intervenor ISN, each of which submitted their proposals on May 28, 2019. MCS’

initially offered price was $[redacted] for Task Order 1 (12 months), and $57,183,879.00

for the total IDIQ contract (18 months). According to the protestor’s complaint, however,

“[f]ollowing discussion questions received from USDA on August 29, 2019, MCS

submitted an updated price proposal on September 4, 2019. In its updated proposal,

MCS’ proposed prices were reduced to $[redacted] for Task Order 1 and $[redacted] for

the 18-month IDIQ.” After discussions, ISN’s final price proposals was $[redacted] for

9

Task Order 1 and $38,213,017.00 for the total ceiling price. After the updated proposals

were received, the agency reached out to the ISN on January 2, 2020 with a request for

clarification on two issues. First, to confirm that ISN understood “that 100% of the

properties requiring Property Preservation Services will be located in Rural America?” to

which ISN responded “yes,” and second, to confirm that ISN fully understood “all of the

PWS requirements for each of the service line items in which you submitted pricing for?”

to which ISN responded “yes.”

Regarding the technical capabilities and past performance factors of the offerors’

proposals, the Technical Evaluation Team (TET) for the USDA RD documented its

findings of the offerors’ proposals in a Consensus Narrative Report, dated January 21,

2020. The TET ranked each of the 11 offerors’ proposals for the Technical Capability

Factor and Past Performance Factor as follows:

As indicated in the above table, protestor MCS and intervenor ISN submitted the only

proposals to achieve both an “Outstanding” rating for the Technical Capability Factor, and

a “Substantial Confidence” rating for the Past Performance Factor. Specifically, according

to the TET, MCS submitted the best proposal for non-price factors, and the TET

summarized its ratings as:

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OFFEROR: MORTGAGE CONTRACTING SERVICES (MCS) CONSENSUS RATING

Factor 1: Technical Capability & Subfactors OUTSTANDING

Subfactor 1 Relevant Experience Outstanding

Subfactor 2: Nationwide Coverage - Geographical Service Area Outstanding

Subfactor 3: Management Approach, w/QASP Outstanding

Subfactor 4: Staffing, and Key Personnel Resumes Outstanding

Subfactor 5: Property Management System Outstanding

Factor 2: Past Performance Confidence Rating Substantial Confidence*

The TET ranked ISN was the second best proposal for non-price factors, and its ratings

were summarized as:

OFFEROR: Information Systems & Networks Corporation (ISN) CONSENSUS RATING

Factor 1: Technical Capability & Subfactors OUTSTANDING

Subfactor 1 Relevant Experience Outstanding

Subfactor 2: Nationwide Coverage - Geographical Service Area Outstanding

Subfactor 3: Management Approach, w/QASP Outstanding

Subfactor 4: Staffing, and Key Personnel Resumes Outstanding

Subfactor 5: Property Management System Outstanding

Factor 2: Past Performance Confidence Rating Substantial Confidence

After evaluation, the agency selected ISN for award and the contracting officer

Shelia Stoddard informed ISN that it had been selected for award on January 31, 2020.

Subsequently, on February 5, 2020, Ms. Stoddard informed MCS that it had not been

selected for award; and on February 11, 2020, the USDA RD issued a debriefing letter to

MCS. With regard to MCS’ price, the debriefing letter stated:

CLIN 001 Inspections - Pricing is comparable to the Competition Price

Results (CPR) and comparable to CLIN 001 pricing for other competitive

proposals. Therefore CLIN 001 is found fair and reasonable. However, for

CLIN 002 Property Preservation Services, the individual service items on

the price list are higher, especially in the case of [redacted], which are in

most instances [redacted]% over the CPR and on the higher side of the

competitive prices offered by the other offerors. Offeror as the incumbent,

indicated their pricing is based on their respective cost experience, their

technical approach and the nature of the work for rural America. Therefore,

MCS’s price is found realistic and in conformity for their proposed technical

approach.

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Summarily, CLIN 001 and 002 combined are higher than CPR (compared

to other competitive prices) received with a technical rating of acceptable

and above. In accordance with evaluation criteria set forth in Section M

paragraph 4., “the Price Factor will become the more dominant factor as

technical proposals reach technical equality. In such cases, where all non-

priced factors being evaluated are virtually the same, best value may be

represented by the lowest-priced proposal.” Therefore, notwithstanding,

MCS’ price finding to be competitive in price, they are not determined to be

the best value to the Government in accordance with the evaluation criteria.

On February 18, 2020, MCS filed a protest of the award to ISN with the United

States Government Accountability Office (GAO). In MCS’ protest, MCS alleged that

USDA made numerous errors in its evaluation and award process under the

Solicitation, resulting in its unreasonable and unsupportable determination

to make award to ISN. First, ISN has an ‘unequal access to information’

organizational conflict of interest (“OCI”) stemming from its work as a

support contractor to the U.S. Department of Housing and Urban

Development (“HUD”), through which ISN receives extensive proprietary

and confidential information regarding MCS and other property preservation

and inspection field operators. The Agency unreasonably failed to disqualify

ISN based on that OCI. In addition, USDA failed to recognize the unrealistic

nature of ISN’s price proposal, which was apparently based on service

pricing that would be appropriate for HUD’s urban property portfolio, but will

create significant performance issues in the context of USDA’s rural

properties. The Agency also unreasonably awarded ISN the highest

possible ratings for Past Performance and Technical Capability. The

information on ISN’s own website makes clear that, under the Solicitation’s

stated evaluation criteria, ISN did not warrant the highest rating for either of

those Factors. Finally, SDA incorrectly evaluated MCS’ original price

proposal, and failed to account for the updated pricing that MCS provided

on September 4, 2019.

On February 19, 2020, the USDA issued a Stop Work Order to ISN, and in a February

28, 2020 letter to the GAO, counsel for the USDA RD responded to MCS’ protest at the

GAO, stating:

This letter is to notify GAO and the parties that the agency will take

corrective action in the above-referenced bid protest. The agency has

begun an investigation into the potential conflict of interest identified by the

protester, the facts of which were unknown to the agency prior to the award.

In addition, the agency identified errors in the evaluation process that could

have affected the award decision. The agency will correct the errors and

make a new and potentially different award decision, which will render moot

the award decision now challenged by MCS. Accordingly, the agency

requests that GAO dismiss the protest.

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Thereafter, the GAO dismissed MCS’ protest and the USDA RD took corrective action.

On March 23, 2020, the agency issued an OCI Memo for the Record which determined

that the employees at ISN who worked on the HUD contract who were alleged to have

provided unequal information “provided no input and were not a part of the proposed team

for this effort” and “[t]he quoted pricing by ISN provided under this procurement appears

to be in line with commercial pricing, and in line with the other commercial competitive

pricing of offeror’s that were rated ‘acceptable’ in this competition.” The March 23, 2020

OCI Memo for the Record concluded with the “Contracting Officer’s Determination,” which

stated: “After investigating this claim and reviewing the supporting information from ISN,

I have determined the OCI alleged by MSN does not exist, and I have not identified any

other OCI. As such, a conflict of interest does not preclude ISN from award/performance

of a contract with Rural Development for Property Preservation Services.”

In addition to the OCI Memo for the Record, as part of the corrective action the

USDA re-evaluated the 11 proposals submitted in response to the Solicitation. On April

6, 2020, the agency issued a Proposal Analysis Report. Regarding the USDA evaluation

of MCS’ proposal, the Proposal Analysis Report stated:

2.1 OFFEROR 1: MCS Consensus Rating: Outstanding

2.1.1 Offeror 1 – MCS - Key Technical Evaluation, Past Performance

and Price Findings

Summarily, MCS’s proposal received an Outstanding overall rating, that

demonstrated a strong technical foundation, relevant experience,

nationwide coverage reaches, management and staffing capabilities and a

solid property management system that would exceed all performance

expectations of requirements in the PWS. There were multiple “Strengths”

in all the Subfactors.

Subfactor 1.1 Experience:

Strength(s)

• Demonstrated extensive experience property preservation and

inspection services, [redacted]

Weaknesses: None

Deficiency(ies) None

Subfactor 2.2 Nationwide Coverage:

Strength(s)

• [redacted] that can do both property preservation and inspections;

• ability to retain rural vendors with a [redacted] % turnover rate;

• [redacted]

Weaknesses: None

Deficienc(ies) None

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Subfactor 1.3 Management Approach/QASP:

Strength(s)

• Demonstrated a management approach [redacted], ensures

effective, cost-efficient work performance.

• Proven management processes ensure continued emphasis on

customer-focused services [redacted];

• PM has [redacted] years of experience supporting the USDA-RD in

all aspects of Property Preservation and Property Inspections program

execution

Weaknesses: None

Deficienc(ies) None

Subfactor 1.4 Staffing Plan, Key Personnel, Resumes Subcontractors;

Subcontracting Plan

Strength(s)

• Demonstrated maintenance of a strong national vendor network of

approximately [redacted] vendors that are experienced in all areas of

property preservation and inspections and includes an inspections network

consisting of [redacted] vendors as well as a network of over [redacted]

vendors [redacted]

• Dedicated [redacted]

• Demonstrated a subcontracting plan, that provides [redacted]%

small business subcontracting opportunities, exceeding the mandated of

[redacted]%.

• Demonstrated [redacted]

Weaknesses: None

Deficienc(ies) None

Subfactor 1.5 Property Management System

Strength(s):

• Demonstrated [redacted] an enhanced feature in its PMS, that uses

[redacted] that have helped to [redacted] in a cost-effective manner.

• Demonstrated [redacted] – MCS has conducted [redacted]

Weaknesses: None

Deficienc(ies) None

2.1.2 PAST PERFORMANCE

2.1.2.1 Performance Confidence Assessment - Observations and

Conclusions

Past Performance was rated as Substantial Confidence, with findings

indicating that as the incumbent contractor, MCS had an overall record of

[redacted], and several other contracts relevant in size and scope. There

were no [redacted] reported. There were two Past Performance

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Questionnaires received for review, in which it indicated MCS exceeded and

met performance standards (Ref. PPET Report, Contract File Index B20).

2.1.3 PRICE FACTOR

2.1.3.1 Summary of Proposed and Evaluated Cost/Price

(MCS) – Task Order 1 Price Compared to Competition Price Results

(CPR)

Task Order 1 CLIN PROPOSED PRICE TO CLINs 1 & 2 CPR CLINs 1 & 2

Inspections CLIN 001 [redacted] [redacted] 3,395,537.00

Property Preservations CLIN 002 [redacted] [redacted] 23,054,219.00

Reports/NSP CLIN 003 [redacted] 0

Contingency PropPres CLIN 004 [redacted]

ODC's-Travel CLIN 005 [redacted]

Transition In/Out CLIN 006 [redacted] 0

TOTAL TO CEILING PRICE [redacted]

COMPARISON CLIN

TASK ORDER /CPR PRICE [redacted] $[redacted]

COMPETITIVE PRICE CHART

ISN [redacted] [redacted [redacted MCS [redacted] [redacted]

CLIN 001 TOTAL IDIQ 18 $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

CLIN 001 TOTAL TASK $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

ORDER

CLIN 002 TOTAL IDIQ 18 $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

CLIN 002 TOTAL TASK $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

ORDER

BOTH CLINS TOTAL IDIQ $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

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BOTH CLINS TOTAL $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

TASK

ORDER 12 MONTH

CLIN 001 Inspections - Pricing is below the CPR, and comparable to CLIN

001 pricing for ISN, [redacted] and [redacted]. Therefore CLIN 001 is found

fair and reasonable.

CLIN 002 Property Preservation Services - The individual services items on

the price list are higher, especially in the case of [redacted], which are in

most instances [redacted]% TO [redacted]% over the CPR and on the

higher side of the competitive prices offered by the offerors indicated in the

competitive chart above, and found to be unreasonably high. Offeror as the

incumbent, indicated their pricing is based on their respective cost

experience, their technical approach and the nature of the work for rural

America.

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Summarily, CLIN 001 and 002 combined are higher than the CPR as shown

in the table above and compared to other competitive prices received with

a technical rating of acceptable or above. In accordance with evaluation

criteria set forth in section M paragraph 4., “the Price Factor will become the

more dominant factor as technical proposals reach technical equality. In

such cases, where all non-priced factors being evaluated are virtually the

same, best value may be represented by the lowest-priced proposal.”

Therefore, even though MCS’s pricing is found to be realistic and in

conformity for their proposed technical approach, their pricing is

unreasonably high based on the comparative analysis performed for this

solicitation. Therefore, MCS is not determined to be the best value in

accordance with the evaluation criteria. MCS tied ISN in their technical

rating with an “outstanding” but had an overall higher price. *Competition

Price Results (Ref. B19 Price Proposal Evaluation-Price Competition

Memo).

(capitalization and emphasis in original). Regarding ISN’s proposal, the Proposal Analysis

Report stated:

3.1 OFFEROR 2 – ISN Consensus Rating: Outstanding

3.1.1 Offeror 2 – ISN- Technical Evaluation, Past Performance and

Price Findings

ISN strongly demonstrated that they have the overall technical

understanding and capabilities to successfully exceed the performance

requirements of the solicitation’s PWS. ISN demonstrated experience in all

phases of property preservation services with a leadership team with over

50 year of property preservation and inspection services experience;

Nationwide coverage was comprehensively demonstrated; a management

plan and QASP that were premised on their being a Capability Maturity

Model Integration (CMMI) Level 3 company; a thorough staffing plan was

provided; with a PMS that surpass the requirements of the PWS. ISN

consensus ranking was “Outstanding” in all the Factor 1 Subfactors; and

their Past Performance Confidence Assessment was “Satisfactory

Confidence.” The multiple “Strengths” in Subfactors 1.1 to 1.5 “Strengths”

are synopsized below

Subfactor 1.1 Experience:

Strength(s):

• Robust Quality Control (QC) processes to review and confirm the

quality and accuracy of inspection reports and photographs to determine

necessary repairs and other work

16

• Subcontractor [redacted] experience to include their vendor network

to cover all 50 states to include the needed territories

• Demonstrated experience on other federal contracts (USMS and

HUD) providing services in most rural and remote areas

• Leadership team with over 50 years of PPIS experience

• Demonstrated a detailed experience in all phases of property

preservation services

• Provided mitigation solutions for the challenges pertaining to

property preservation in rural areas

Weaknesses: None

Deficienc(ies) None

Subfactor 1.2 Nationwide Coverage:

Strength(s):

• Demonstrated strong nationwide coverage; with a network of

[redacted] geographically disbursed inspectors and contractors

• Provided multiple Heatmaps to clearly demonstrate available

personnel for current and future USDA PPIS requirements in all 50 US

States and Territories

Weaknesses: None

Deficienc(ies) None

Subfactor 1.3 Management Approach/QASP:

Strength(s)

• Offeror appraised as a Capability Maturity Model Integration (CMMI)

Level 3 company, signifying their expertise in the best practices used to

deliver continuous and reliable support services through structured

management solutions

• Quality assurance: indicated staffing Independent QA team headed

by a dedicated QA Manager

• Training and Ongoing Support delivered to nationwide staff that

would cover RD’s scope of work and administrative roles, responsibilities,

policies and procedures

• Continuous Process Improvement (CPI )process to learn from

previous mistakes

• Data Monitoring to ensure assigned timelines and quality metrics are

met

• [redacted]

Weaknesses: None

Deficienc(ies) None

Subfactor 1.4 Staffing Plan, Key Personnel, Resumes

Subcontractors; Subcontracting Plan

Strength(s)

• Comprehensive training provided to all employee Offeror provided

a rational on how it would manage nationwide coverage by [redacted]

17

Weaknesses: None

Deficienc(ies) None

Subfactor 1.5 Property Management System

Strength(s):

• [redacted] to keep timelines on track

• [redacted]

• Demonstrated a [redacted]

Weaknesses: None

Deficienc(ies) None

3.1.2 PAST PERFORMANCE FACTOR

3.1.2.1 Performance Confidence Assessment - Observations and

Conclusions

ISN is assigned as Substantial Confidence. Summarily, Offeror provided

substantial past performance both for ISN and its major subcontractor

[redacted]. The proposal indicated three contracts for past performance,

two performed by the prime and one performed by major subcontractor

[redacted]. There were no CPARs or PIPRs [Past Performance Information

Retrieval System] reported. The team received only one Past Performance

Questionnaire for review. The questionnaire from HUD reflected a rating of

“Five” (exceeds) in the areas of delivery performance and problem solving

and a rating of “four” (meets and occasionally exceeds) in overall quality,

quality of service, and quality of personnel (Ref. B20 Performance

Evaluation Report).

3.1.3 PRICE FACTOR

3.1.3.1 Summary of Proposed and Evaluated Cost/Price

(ISN) – Task Order 1 Price Compared to CPR

Task Order 1 CLIN PROPOSED PRICE TO CLINs 1 & 2 CPR CLINs 1 & 2

Inspections CLIN 001 [redacted] [redacted] [redacted]

Property Preservations CLIN 002 [redacted] [redacted] [redacted]

Reports/NSP CLIN 003 [redacted] 0

Contingency PropPres CLIN 004 [redacted]

ODC's-Travel CLIN 005 [redacted]

Transition In/Out CLIN 006 [redacted] 0

TOTAL TO CEILING PRICE [redacted]

COMPARISON CLIN

TASK ORDER /CPR PRICE [redacted] $26,449,756.00

18

COMPETITIVE PRICE CHART

ISN [redacted] [redacted] [redacted] MCS [redacted] [redacted]

CLIN 001 TOTAL IDIQ 18 $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

CLIN 001 TOTAL TASK $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

ORDER

CLIN 002 TOTAL IDIQ 18 $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

CLIN 002 TOTAL TASK $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

ORDER

BOTH CLINS TOTAL IDIQ $28,418,630.00 $31,648,267. $35,921,357.00 $40,811,827.00 $[redacted] $50,631,272.00 $60,270,725.00

18 00

BOTH CLINS TOTAL

TASK $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted] $[redacted]

ORDER 12 MONTH

CLIN 001 Inspections - Pricing is below the CPR, and comparable to CLIN

001 pricing for MCS, [redacted] and [redacted]. Therefore CLIN 001 is found

fair and reasonable.

CLIN 002 Property Preservation Services - The individual service items on

the price list are lower than the CPR and is competitive with prices received

as shown in the chart above. The Offeror indicated in their Vol 3 Price

Proposal, that their pricing was “well researched, and was 100 percent

compliant, based on existing rates, other Government work similar in

nature, numerous independent surveys and market data which lower

staffing in their approach.” Further justification for pricing is that the offeror

indicated through a clarification that they are aware this requirement is for

rural America and that their pricing reflects that fact. Therefore, their price

is found realistic and in conformity with their proposed technical approach.

The offerors combined CLIN 001 and 002 price is competitive with other

offered prices, and in accordance with evaluation criteria set forth in section

M paragraph 4., “the Price Factor will become the more dominant factor as

technical proposals reach technical equality. In such cases, where all non-

priced factors being evaluated are virtually the same, best value may be

represented by the lowest-priced proposal.”

ISN tied MCS in their technical rating with an “outstanding” but had an

overall lower price. ISN is found to be fair and reasonable and has been

determined to be the best value with an outstanding technical rating and

lowest price out of the two offerors whom received an outstanding

rating*Competition Price Results (Ref. B19 Price Proposal Evaluation-Price

Competition Memo).

(capitalization and emphasis in original).

After noting the 11 proposals, the Proposal Analysis Report focused on the two

proposals submitted by MCS and ISN:

19

Both MCS and ISN were rated technically “Outstanding” but are as for

pricing were at opposite ends of the CPR price spectrum, high to low

respectively. MCS’ pricing for the Task Order 1 at $[redacted] is [redacted]%

higher than CPR; whereas ISN is significantly lower than CPR by 30%

lower. Both MCS and ISN indicated their pricing was based on their

respective historical pricing charges to their clients, both Government and

private sector. Both Offerors having technically “Outstanding” ratings

demonstrated clear understanding of the requirements, and their respective

pricing is consistent with their technical approaches in their proposals.

Technical Rating: Outstanding– ISN, MCS

MCS pricing for Task Order 1 at $[redacted] is [redacted]% over the CPR,

and not in line with the competitive price proposals received in response to

the solicitation, which made its overall price a high outlier. MCS pricing is

based on their historical pricing provided to USDA-RD for the past seven

years; and their proposal indicated that their price proposal has been kept

consistent with their existing USDA-contract. MCS pricing is found to be fair,

reasonable, and realistic for the work to be performed when you take into

consideration their exceptional technical approach. They offered a superior

technical proposal with an overall Outstanding rating, as well as outstanding

in all the subfactors and was assessed as Substantial confidence rating for

past performance. However, their offer, as a high outlier, is not determined

to be the best value to the Government under this solicitation.

ISN pricing on the Task Order 1 at $[redacted] was [redacted]% lower than

the CPR, closer in line with the competitive price proposals received in

response to the solicitation. ISN indicated that their pricing was based on

their historical experience, research, and their technical approach using

industry standard technology. ISN pricing was found to be fair, reasonable,

and realistic for the work to be performed under the solicitation and in

accordance with their exceptional technical approach. ISN offered a

technical superior proposal with Outstanding ratings overall and in all the

subfactors. They also were assessed a Substantial Confidence rating in

Past Performance. With a superior technical proposal and comparative

competitive pricing, the Contracting Officer founds and recommends ISN as

providing the best overall value to the Government for this solicitation. (See

(Ref. B19 Cost/Price Proposal Evaluation – Price Competition

Memorandum).

4.1.2 Adequate Price Competition Determination

As discussed above four(4) of the eleven(11) offerors competing for the

Property Preservation and Inspection contract were determined not to have

submitted technical acceptable proposals: CWIS (Marginal); IEI, NHC, UFS

(all “Unacceptable”). That left remaining seven(7) that were considered to

have a technically “Acceptable” proposals that rated from Acceptable-

20

Good-Outstanding. Of the seven(7), technical acceptable proposal, their

pricing for Task Order 1, has a CPR of approximately $25M to $28M, on the

CPR price spectrum.

Therefore, based on the foregoing findings, and because multiple offers

were received from several offerors that were considered responsible and

were competing independently for the subject contract, the Technical

Evaluation Team (TET) and the Source Selection Authority (SSA)

determined that, in accordance with the provisions of FAR 15.403-1,

Adequate Price Competition did exist for the procurement.

In evaluating price, it was indicated in the solicitation, Attachment C-4,

Instructions to Offerors, Evaluation and Basis for Award, par. 4, that “Price

is not an adjectivally rated Factor; however, the Price Factor will become

the more dominant factor as technical proposals reach technical equality.

In such cases, where all nonprice factors being evaluated are virtually the

same, best value may be represented by the lowest-priced proposal.

Upon information above, and upon performing an integrated assessment of

technical (including past performance) and price this competition came

down to ISN and MCS, both providing technical exceptional proposals, and

competitive pricing as being in line for award. However, in accordance with

the solicitation and the CO’s determination and recommendation in the

Price Competition Memorandum, of the two exceptionally technically equal

offerors, ISN, as the lowest price, provides the best overall value to the

Government, with a technically superior proposal at a price that is

comparatively competitive, fair and reasonable, balanced and realistic for

the work.

Therefore, there is no need for establishing a competitive range and going

into discussions, because two highly rated exceptional proposals were

received and there are no improvements required from either a technical or

cost standpoint. There is no basis for a tradeoff between ISN and MCS due

to MCS did not supply any features which would warrant the premium in

price offered over the lower price offered from ISN. Best value has been

established with a superior technical proposal, with substantial past

performance confidence rating, and reasonable, balanced and realistic

pricing, all resulting in no risk to contract performance.

...

5. AWARD RECOMMENDATION

5.1 Source Selection Recommendation

21

After performing an integrated analysis, the TET Chair & the Contracting

Officer hereby recommend to the SSA, awarding to the offeror, Information

Systems & Networks Corporation (ISN), the offeror that submitted a

proposal under the solicitation that was rated technically superior with an

“Outstanding” with pricing that is considered both reasonable, balanced and

realistic for the work.

Therefore, IAW the terms and conditions set forth in the Property

Preservation and Inspection Services, Request for Proposal (RFP),

Solicitation 12SAD119R0003, the SSB [Source Selection Board]

determined that the proposal submitted by ISN offered the best overall value

for satisfying the Government’s stated requirements. The RFP if award

would be made to the offeror whose proposal represented the best value to

the government using a competitive combination source selection

approach. Proposals were evaluated for “Technical Merit” and was rated

“Outstanding” and with past performance was assessed as “Substantial

Confidence” and the pricing was considered reasonable, balanced and

realistic for the work. In adhering to RFP instructions, terms and conditions,

the SSB is recommending to the SSA Panel that, “INFORMATION

SYSTEMS & NETWORKS CORPORATION” be selected as the contract

awardee based on a “Best Value Decision.” It is imperative that this Source

Selection Competitive contract be awarded to an offeror that has proven

technical capabilities to ensure no interruptions in property preservation and

inspections service to occur. Since INFORMATION SYSTEMS &

NETWORKS exceeds the technical criteria established in the RFP and

offered a fair and reasonable for the Total Evaluated Price for the 12-month

Task Order 1, of $[redacted] and the 18-month base IDIQ ceiling at

$34,983,380.58, as determined by “Adequate Price Competition,

INFORMATION SYSTEMS & NETWORKS CORPORATION is clearly the

offeror representing the Best Value to the USDA-RD for the Property

Preservation and Inspection Services acquisition. Therefore, the TET Chair

and the Contracting Officer puts forward, as a recommendation to the SSA,

that INFORMATION SYSTEMS & NETWORKS be awarded this contract.

(capitalization and emphasis in original).

The contracting officer, Shelia Stoddard, also issued a Price Competition Memo,

dated May 29, 2020, which explained that “[a]s part of a Corrective Action Plan, the

original cost proposals where [sic] re-evaluated.” With regard to MCS’ pricing, the Price

Competition Memo stated:

CLIN 001 Inspections - Pricing is below the CPR, and comparable to CLIN

001 pricing for ISN, [redacted], [redacted] and [redacted]. Therefore CLIN

001 is found fair and reasonable.

CLIN 002 Property Preservation Services - The individual services items on

the price list are higher, especially in the case of [redacted], which are in

22

most instances [redacted]% to [redacted]% over the CPR and on the higher

side of the competitive prices offered by the offerors indicated in the

competitive chart above. The offeror as the incumbent offered their

historical pricing, which have been used the past four years. The offeror

maintains the realism of their pricing based on their respective cost

experience, their technical approach and the nature of the work for rural

America. Summarily, CLIN 001 and 002 combined are higher than the CPR

as shown in the table above and compared to other competitive prices

received with a technical rating of acceptable or above. This results in their

Task Order 1 pricing of $[redacted] approximately $[redacted] higher than

the CPR, and for the IDIQ priced at $[redacted] is approximately $[redacted]

over the estimated CPR of $[redacted]. Although MCStechincal [sic] rating

is outstanding, pricing is at the higher end of the CPR, and is much higher

than other similar ranked proposals which precludes them from being in line

for an award. Note, in accordance with evaluation criteria set forth in Section

M paragraph 4., “the Price Factor will become the more dominant factor as

technical proposals reach technical equality. In such cases, where all non-

priced factors being evaluated are virtually the same, best value may be

represented by the lowest-priced proposal.”

(capitalization in original).

With regard to ISN’s pricing, the Price Competition Memo stated:

CLIN 001 Inspections - Pricing is in line with the CPR, and comparable to

CLIN 001 pricing for MCS, [redacted] and [redacted]. Therefore CLIN 001

is found fair and reasonable.

CLIN 002 Property Preservation Services - The individual service items on

the price list are lower than the CPR, however, are competitive with prices

received as shown in the chart above. The Offeror indicated in their Vol 3

Price Proposal, that their pricing was “well researched, and was 100 percent

compliant, based on existing rates, other Government work similar in

nature, numerous independent surveys and market data which lower

staffing in their approach.” Further justification for pricing is that the offeror

indicated through a clarification that they are aware this requirement is for

rural America and that their pricing reflects that fact.

The offerors combined CLIN 001 and 002 price is competitive with other

offered prices, and in accordance with evaluation criteria set forth in section

M paragraph 4., “the Price Factor will become the more dominant factor as

technical proposals reach technical equality. In such cases, where all non-

priced factors being evaluated are virtually the same, best value may be

represented by the lowest-priced proposal.”

ISN tied MCS in their technical rating with an “outstanding” but had an

overall lower price. ISN pricing at $[redacted] for Task Order 1; and, IDIQ

23

18-month ceiling of $$34,983,380.00 is found to be fair and reasonable.

Their pricing is also determined to be realistic in accordance with their

technical approach and understanding of the work, as demonstrated in their

“outstanding” technically rated proposal and through clarification, as stated

above.

(capitalization in original).

Under the heading labeled “CONTRACTING OFFICER RECOMMENDATION,”

the Price Competition Memo stated:

Best Value/Trade-Off. It is found that a trade-off analysis is not required

based on my findings in the technical and pricing received from all offerors

which had a lower technical rating and higher price than the recommended

awardee. Technically, two offerors were rated “outstanding” and there were

no discriminators in their technical ratings to lean towards performing a

tradeoff.

The only discriminator, as indicated below is the divergent pricing, with MCS

on the higher spectrum of the CPR, and ISN on the lower side. Note, the

solicitation indicated that where all “non-price factors being evaluated are

virtually the same, best value may be represented by the lowest-priced

proposal.” That is the case as noted below in this competition, where CLINs

one and two were evaluated for the task order.

(capitalization and emphasis in original). The Price Competition Memo concluded that

ISN’s proposal was “the best value with an outstanding technical rating and lowest price

out of these two offerors who both received outstanding ratings,” and recommended to

the Source Selection Authority that ISN be awarded the contract.

On May 29, 2020, the agency issued the Source Selection Decision Document

which stated, in part:

4. INDEPENDENT ANALYSIS – FACTORS 1 AND 2

I have accomplished an independent analysis of the information provided in

order to accomplish an integrated assessment of the findings of my TET.

As noted in the above chart in paragraph 3.1, Factor 1 Overall Ratings

indicated that out of the eleven offerors competing for the Property

Preservation and Inspection Services solicitation, two were rated rating

“Outstanding,”, MCS and ISN. Three Offerors rated as “Good”, namely,

[redacted]; and then two rated “Acceptable”, [redacted]. CWIS rating was

“Marginal” and lastly, [redacted] were all rated “Unacceptable”.

24

5. INTEGRATED ASSESSMENT AND SOURCE SELECTION

The solicitation indicated that to be considered for award, Offerors must be

rated overall as “Acceptable”. Since [redacted] were rated below

“Acceptable,” and had pricing issues ranging from not fair, reasonable,

realistic or balanced, incompliant with the solicitation, their proposals were

found to be un-awardable for this solicitation requirement. Five of the

Offerors ([redacted]) were rated “Acceptable” to “Good”. Overall, my review

concurs with the finding that their respective ratings ranging from

“Acceptable” and “Good”, does not demonstrate the highest understanding

of the requirement, and therefore un-awardable for this solicitation

requirement. Two of the Offerors, ISN and MCS, both rated “Outstanding”

demonstrating that their technical proposals provided the highest

understanding of the requirement. In addition, both Offerors were assessed

Past Performance Confidence rating of “Substantial. However, the greatest

discriminator between the Offeror’s proposal was in their pricing. MCS

pricing was higher and outside of the competitive pricing of other acceptable

offerors; whereas, ISN’s pricing was the lowest, and comparable to the

competitive pricing from other CPR range Offerors. Below is an integrated

assessment for both MCS and ISN proposals.

Information Systems and Network Corporation

ISN submitted a superior technical proposal with an overall rating of

“Outstanding” in Technical Factor 1, as well as for Subfactor 1.1 thru 1.5.

Substantial Confidence was their past performance assessment. As for

pricing, their price proposal was found to be fair, reasonable, balanced and

realistic for the work to be performed in rural America, in addition to being

aligned with their technical approach. Also, it is noted that ISN provided an

affirmative response to the clarification question as to their understanding

that their pricing was realistic for rural America.

ISN’ [sic] proposal demonstrated their relevant experience that far

exceeded the solicitation requirement needs. Under Subfactor 1.1,

Experience, they have extensive experience in property preservation and

Inspection services – REO and foreclosure, to rural and remote areas. ISN

contracted with the U.S. Marshals Service (USMS) for 6-years delivering

asset management services to a portfolio of over [redacted] seized or

forfeited to the Department of Justice (DOJ) Assets Forfeiture Fund and

been working with the Department of Housing and Urban Development

(HUD) National Servicing Center’s Mortgagee Compliance Manager (MCM)

since 2015, servicing over [redacted] properties per year. For Subfactor 1.2,

Heatmap, ISN demonstrated thoroughly their capability to provide the

available personnel and used multiple heatmaps indicating

vendor/subcontractor coverage to all the United States and its Territories.

ISN also provided a plan for servicing properties located in Western Pacific

US Territories, if needed. Under Subfactor 1.3, ISN’s management

25

approach was strongly demonstrated via and extensive Project

Management Plan, that [redacted]. One of their strong attributes is that they

are a Capability Maturity Model Integration (CMMI) Level 3 company, which

indicates ISN are experts and efficient at using best practices to deliver

continuous and reliable support service through structured management

solutions. Their proposal also indicated a robust QA team which would have

a dedicated QA Manager. Subfactor 1.4, Staffing, Key Personnel, etc. it was

demonstrated that the ISN had a thorough staffing plan that would provide

nationwide staffing coverage [redacted]. The staffing plan included a

detailed narrative on their ability to identify, recruit, screen, onboard, train

and retain quality candidates with relevant property preservation

experience, including proposed head count at all levels to ensure they can

meet the requirements of the PWS. Also, their plan demonstrated ramp-up

capabilities. [redacted] ISN’s subcontracting plan at [redacted]% for small

businesses, exceeds the 22% RD/SBA [Small Business Administration]

goal as stipulated in the solicitation. Subfactor 1.5 Property Management

System (PMS), it was demonstrated that the Offeror’s PMS exceeds the

requirement’s needs. ISN utilize the software tool “Salesforce” which will

fully integrate with USDA LoanServe. ISN system was noted as being able

to be [redacted]

ISN Past Performance Confidence rating of “Substantial” was reviewed and

assessed on information reviewed by the TET on three contracts. Two of

the contracts ISN was the Prime and with the third contract performed by

their major proposed subcontractor [redacted]. The ISN prime contract

values ranged from $22M to 42M, which is comparable in size and scope

to this solicitation requirement. There were no CPARs on record. A Past

Performance Questionnaire from HUD was received reflecting “Five”

(exceeds) in the areas of delivery performance and problem solving and a

rating of “four” (meets and occasionally exceeds) in overall quality, quality

of service, and quality of personnel.

Overall pricing for the Task Order 1 of $[redacted], is aligned with the CPR,

and other comparatively priced offerors submitted in response to this

solicitation requirement. Further, pricing for some of the individual service

items appear to be aligned with the corrective action Attachment 2, Unit

Price Analysis, which was an average of other agency’s public price lists.

Therefore, their pricing was deemed fair, reasonable, realistic and balanced

for the work under this requirement with the unique feature different from

other property preservation contracts in that in the commercial market this

work is most often in rural areas that are oftentimes difficult to reach.

Therefore, I concur with the TET, and the Contracting Officer’s

recommendation that ISN’s proposal is determined to be the best value in

accordance with the evaluation criteria discussed in the solicitation.

26

Management Contracting Services, LLC (MCS)

MCS submitted a superior technical proposal with an overall rating of

“Outstanding” in Technical Factor 1, with Subfactor 1.1 thru 1.5

Outstanding; Substantial Confidence past performance assessment.

Although a high outlier, their pricing was found to be fair, reasonable,

balanced and realistic for the work to be performed in rural American and

aligned with their technical approach.

MCS’ proposal demonstrated they had the relevant experience that

exceeded the requirement needs. MCS is presently the incumbent

contractor. Under Subfactor 1.1, Experience, they have successfully

provided property preservation and Inspection services to [redacted]

properties. For Subfactor 1.2, Heatmap, MCS’s provided a [redacted] areas

stipulated in the solicitation. The Subfactor 1.3, their [redacted]; and their

QASP was thorough and comprehensive. Findings under Subfactor 1.4,

their Staffing information indicated that there is [redacted]. The

subcontracting plan exceeded the [redacted]% SBA goal, indicating

[redacted]%. Their PMS exceeds what is required by the solicitation

[redacted].

MCS’s Past Performance Confidence rating of “Substantial” was based on

their successfully performing the requirement as the incumbent contractor;

and two other contracts in the private sector.

MCS’s Pricing for both the Task Order 1 and IDIQ are well over the

respective CPR: Task Order 1 of $[redacted] ( CPR, $28,794,738.00); IDIQ

ceiling $[redacted] (CPR $43,239,629.00) and even though deemed fair,

reasonable, realistic and balanced in accordance with their technical

approach, and historical pricing, their pricing is not competitive for this

solicitation.

MCS’ price for Task Order 1, at $[redacted] is approximately $[redacted]

over ISN price of $21,288,840.00; and for the overall IDIQ is approximately

$[redacted] higher. Therefore, I concur with the TET, and the Contracting

Officer’s evaluation that MCS’s proposal is not determined to be the best

value in accordance with the evaluation criteria discussed in the solicitation.

The solicitation, under Attachment C4, par. 4, entitled Competition

Instructions, Evaluation and Basis for award, it is [sic] stated that:

“Overall, Non-Price Factors, when combined, are significantly

more important than Price. Price is not an adjectivally rated

Factor; however, the Price Factor will become the more

dominant factor as technical proposals reach technical

equality. In such cases, where all nonprice factors being

27

evaluated are virtually the same, best value may be

represented by the lowest-priced proposal”.

Upon reviewing the information provided by the TET, as summarized above

for the two technically highest rated Offerors, it is determined that Offeror,

Information Systems and Network Corporation clearly provided the best

value proposal, all factors considered. Their proposal was technically

outstanding as well as appropriately priced and aligned with their technical

approach to the solicitation requirement.

In my integrated assessment, I reviewed, in detail, both the merits and

confidence ratings achieved by the highest rated offerors across the

spectrum of evaluation factors and subfactors to select, with certainty, the

most highly rated and qualified offeror, given the importance of the

individual factors, for this solicitation requirement.

In summary, the integrated assessment revealed that INFORMATION

SYSTEMS AND NETWORK CORPORATION provided a proposal that

generated the best overall value to the Government and yielded the greatest

level of confidence that successful performance of the Property

Preservation and Inspection Services will be realized.

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

concluded:

6. RECOMMENDATION FROM THE SSB

In accordance with the terms and conditions set forth in the “Property

Preservation and Inspection Services” Request for Proposal

RFP12SAD119R0003, the SSB determined that the proposal submitted by

INFORMATION SYSTEMS AND NETWORK CORPORATION offered the

best overall value for satisfying the USDA’s stated requirements.

7. SUMMARY DETERMINATION

The RFP if award would be made to the offeror whose proposal represented

the best value to the government using a competitive combination source

selection approach. It also indicated, as noted above, “where all non-priced

factors being evaluated are virtually the same, best value may be

represented by the lowest-priced proposal”.

ISN and MCS’ proposals were both rated as superior proposals with both

having key attributes that will successfully meet the Government’s needs

with no risk for this solicitation requirement. Their proposals were evaluated

and found virtually the same, with no real differentiators between them

technically that would require any tradeoff. However, the Offeror’s were on

28

divergent ends in their respective pricing. ISN, is lower, for the Task Order

1 at $[redacted]; and MCS is higher, at $[redacted], which is a $[redacted]

difference. And for the IDIQ, ISN overall pricing at $34,983,380.58, is

approximately $[redacted] less than MCS overall pricing at $[redacted].

Therefore, the proposal from MCS did not supply any features which would

warrant the significantly higher premium in price.

Therefore, after a thorough consideration it is determined that

INFORMATION SYSTEMS AND NETWORK CORPORATION superior

technical solution combined with the cost/price savings of $14.8M on the

Task Order 1 and overall on the IDIQ of $22.2M, and past performance

assessment of “Substantial Confidence” is a better value to the Government

than MCS’s higher priced technical proposal.

In summary, based on my integrated assessment of the proposals, and in

accordance with the evaluation criteria, set forth in the solicitation, for the

“Property Preservation and Inspection Service” it is my decision that the

proposal submitted by INFORMATION SYSTEMS AND NETWORK

CORPORATION represents the best overall value to the Government. I

direct contract award to INFORMATION SYSTEMS AND NETWORK

CORPORATION.

(capitalization and emphasis in original).

On May 29, 2020, the contracting officer sent a letter to ISN, which stated in part,

“the stay of contract has been lifted. The agency has resolved the corrective action for

the issues alleged in the protest that was filed. As of this date your company can proceed

with work under this contract.” The same day, May 29, 2020, the contracting officer sent

MCS a letter which stated:

The Agency has completed the corrective actions described in its

submission to GAO dated February 28, 2020, in bid protest B-418483, and

has determined that no Organizational Conflict of Interest (OCI) existed with

respect to awardee ISN. In addition, the Agency determined that errors

identified in the evaluation process had no effect on the award decision.

Accordingly, the stay of performance imposed on ISN that was triggered by

your bid protest has been lifted and the transition of services will resume.

(capitalization in original).3 Also on May 29, 2020, MCS requested a debriefing after the

revised award to ISN, but the contracting officer declined, explaining in a May 29, 2020

email:

3 It is unclear what the errors during the initial evaluations or why the “errors identified in

the evaluation process no effect on the award decision.”

29

Consistent with its corrective action notice, the agency has revised its award

documentation to reflect the results of the OCI investigation and the

correction of identified errors, none of which resulted in a different award

decision. Because the decision to award the contract to ISN was merely

confirmed, and no new award decision was made, you are not entitled to a

debriefing. The information provided in your original debriefing remains

unchanged. Except that in the original debrief there was a typographical

error in IDIQ Ceiling Price for ISN where it said $[redacted] , and it should

have been $34,983,380.58.

(capitalization in original).

On June 5, 2020 MCS filed a second protest with the GAO, and alleged, “[t]his

Protest follows corrective action that USDA took in response to a previous bid protest that

MCS filed with your Office, B-418483. USDA informed MCS of its decision to again make

award to ISN following the completion of its corrective action process on May 29, 2020.”

MCS also stated that “rather than remedy the mistakes in its original evaluation through

corrective action, the Agency has repeated and compounded its errors.” MCS alleged

that

USDA’s new determination to once again make award to ISN is

unreasonable and unsupportable. First, ISN has an ‘unequal access to

information’ organizational conflict of interest (“OCI”) stemming from its

work as a support contractor to the U.S. Department of Housing and Urban

Development (“HUD”), through which ISN receives extensive proprietary

and confidential information regarding MCS and other property preservation

and inspection field operators. The Agency unreasonably failed to disqualify

ISN based on that OCI and ISN’s failure to disclose that it had an actual or

potential OCI. In addition, USDA failed to recognize the unrealistic nature

of ISN’s price proposal, which was apparently based on service pricing that

would be appropriate for HUD’s urban property portfolio, but will create

significant performance issues in the context of USDA’s rural properties.

The Agency also unreasonably awarded ISN the highest possible ratings

for Past Performance and Technical Capability. The information that was

on ISN’s own website at the time of award makes clear that, under the

Solicitation’s stated evaluation criteria, ISN did not warrant the highest

rating for either of those Factors. Finally, USDA incorrectly evaluated MCS’

original price proposal, and failed to account for the updated pricing that

MCS provided on September 4, 2019.

(capitalization and quotation marks in original).

On September 10, 2020, the GAO issued its decision and denied all MCS protest

grounds. See generally Mortg. Contracting Servs., B-418483.2, B-418483.3, 2020 WL

6625956 (Comp. Gen. Sept. 10, 2020). Regarding the organizational conflict of interest,

the GAO found that “the agency meaningfully investigated the alleged OCI and, based on

that investigation, reasonably concluded that the invoice information at issue did not

30

provide ISN with an unfair competitive advantage,” and noted that “the contracting officer

also determined that access to the invoice information was restricted to certain ISN

personnel that had no involvement in the proposal effort,” the GAO determined “that the

agency reasonably concluded that ISN did not derive an unfair competitive advantage

from its role on the HUD contract.” Id. at *4-5. With regard to MCS’ Past Performance

allegations, the GAO explained:

While the protester notes aspects of two of ISN's contracts that were

dissimilar to the instant effort, the evaluation record demonstrates that ISN's

overall past performance and experience supports the agency's assigned

ratings. In this respect, ISN submitted two contract references involving

property management services, including a contract performed by ISN's

subcontractor with a value of $425 million. The third contract, the HUD

contract, involved the provision of portfolio management services for

approximately 60,000 properties per year. While such services were merely

“related to” property preservation and inspection services, we find that the

agency nonetheless acted reasonably in considering the HUD contract as

part of ISN's overall past performance and relevant experience. In sum, we

find that the agency reasonably found that ISN's overall experience and

past performance were relevant and merited the high ratings assigned to

ISN under those factors.

Id. at *8 (internal references omitted). Regarding price, the GAO likewise found “the

agency's evaluation to be reasonable,” explaining:

In this regard, the agency compared ISN's prices to two benchmarks, the

CPR and the AAP. For CLIN 0002, ISN's task order and IDIQ contract prices

were more than [DELETED] percent lower than the CPR, but this gap was

reduced for the overall IDIQ and task order ceiling prices (19 percent and

26 percent respectively). And, ISN's total prices were largely in line with the

AAP pricing index, a benchmark created based on similar federal agency

price lists. The protester argues that ISN's pricing is only in line with the

AAP because the benchmark is based on the same flawed HUD data set

used to create ISN's pricing. We note, however, that the AAP was not based

only on prices from HUD properties but was also based on price lists from

the Department of Veteran Affairs, FannieMae and FreddieMac. While the

protester contends that these other agency pricing lists also do not reflect

the realistic costs associated with servicing the rural properties involved in

this procurement, we find this assertion to be largely unsupported.

In addition to these price comparisons, the agency considered the

explanation provided by ISN for its pricing, which was that the pricing was

“well researched, and was 100 percent compliant, based on existing rates,

other Government work similar in nature, [and] numerous independent

surveys and market data.” The agency further issued a clarification asking

ISN if it was aware that the requirement is for rural America and if their

pricing reflects that fact, to which ISN responded in the affirmative.

31

We conclude that this analysis was reasonable. While the protester asserts

that the agency should have examined ISN's pricing with more scrutiny, we

find that the depth of the USDA's analysis fell within the sound exercise of

its discretion. See Citywide Managing Servs. of Port Washington, Inc.,

supra. We also find that the agency's use of a second benchmark (the AAP)

was a reasonable further step to consider and compare the pricing received

to the pricing received by other agencies for similar services, and find no

support for the protester's assertion that this extra step was arbitrary or

unnecessary. The protest is denied.

Mortg. Contracting Servs., LLC, B-418483.2, B-418483.3, 2020 WL 6625956, at *9-10

(capitalization and brackets in original) (internal references omitted).

On September 18, 2020, the protestor filed the above captioned bid protest in the

United States Court of Federal Claims and alleged four counts: First, “USDA

unreasonably evaluated ISN’s Past Performance Factor,” second, “USDA unreasonably

evaluated ISN’s relevant experience subfactor,” third, “the agency unreasonably

evaluated ISN’s price realism,” and fourth, “the agency made an unreasonable award

determination.”4 Additionally, MCS asserts it has standing to bring the bid protest as an

“interested party” upon an allegation of the “USDA’s unreasonable evaluation of ISN’s

proposal and the USDA’s arbitrary and capricious determination that ISN represented the

best value in accordance with the Solicitation,” and that but for the USDA’s “unreasonable

actions, MCS would have had a substantial likelihood of receiving award.”

After an initial hearing with the parties, on October 1, 2020, protestor filed a motion

for preliminary and permanent injunctive relief. Consistent with the complaint, protestor

alleged that the “USDA unreasonably gave ISN a Substantial Confidence rating for Past

Performance,” the “USDA Unreasonably Rated ISN as Outstanding for [Technical] Factor

1, Subfactor 1,” and the “USDA failed to properly evaluate ISN’s unrealistically low

pricing.” Additionally, regarding protestor’s claim in the amended complaint, that the

USDA irrationally failed to assign a deficiency to ISN’s proposal, MCS alleged the

“Solicitation included a clear requirement that PWS Tasks 1-6 be performed in

accordance with the following AQL [Acceptable Quality Levels]: ‘95% of tasks will be

completed within 10 days. The remaining 5% will be completed within 21 days unless

there is an exception granted by the Government.’” Protestor argued that “ISN did not

meet the AQL requirement to perform 95% of each of PWS Tasks 1-6 within 10 days.

Instead, for each of those Tasks, ISN proposed to perform 95% of the work within 14

days,” and the “USDA should have assigned ISN a Deficiency in accordance with the

Solicitation’s stated evaluation criteria.”

On October 3, 2020, defendant responded to protestor’s claims, first arguing that

MCS lacks standing to bring the protest as “the agency determined that because MCS’s

proposal price was unreasonably high, MCS could not be in line for the award,” and “there

4Protestor did not raise the issue of organizational conflict of interest at the United States

Court of Federal Claims as it had in both GAO protests.

32

is no substantial chance that MCS would have received the contract award, and the Court

should dismiss this protest for lack of standing.” On the merits defendant argued that

[a]s it relates to MCS’s challenge of the agency’s evaluation of ISN’s

technical and past performance proposal, MCS contends that ISN does not

meet the “Relevant Experience” and “Past Performance” requirements.

MCS reads into the solicitation language that is not there. MCS complains

that ISN’s past performance examples did not involve precisely the same

type and quantity of work as the present contract. But those requirements

are absent from the solicitation, and MCS’s argument is meritless in that

absence.

Defendant further argued, “[a]s it relates to MCS’s challenge of ISN’s pricing proposal,

MCS complains that ISN’s pricing was unrealistically low. MCS cites nothing in support

of this argument beyond its own assessment that performing the scope of work would

cost more than ISN’s proposed price.” Regarding protestor’s additional claim, defendant

argued that “MCS ignores that the solicitation required the agency to evaluate an offeror’s

Technical Approach under five sub-factors. MCS fails to identify the relevant sub-factor

(Management Approach) under which the agency evaluated the narrative and fails to cite

the evaluation criteria for the relevant sub-factor.”

Also on October 3, 2020 intervenor filed its opposition to protestor’s motion for

injunctive relief, first alleging that MCS does not have standing to bring suit for the

injunction, and, second, if MCS does have standing, MCS would not succeed on the

merits because the USDA’s past performance evaluation was reasonable, the USDA

properly evaluated the ISN proposal in Technical Capacity subfactor 1.1, the USDA

properly evaluated the price realism of the ISN proposal, and that evaluation should be

upheld. Regarding protestor’s additional claim in the amended complaint, ISN argued that

“[a] full and fair read of ISN’s proposal” “shows that ISN repeatedly confirmed it would

meet all required timeframes,” and the “USDA reasonably determined that ISN’s proposal

met the Solicitation’s requirements.”

After all the submissions were reviewed, and in response to the agency’s request

that a decision be made as soon as possible, the court issued an oral decision to the

parties, and explanation of its decision. The court’s oral decision granted protestor’s

motion for injunctive relief, effective immediately. As noted above, this decision

incorporates and memorializes the oral decision.

DISCUSSION

Rule 52.1(c)(1) (2020) of the Rules of the United States Court of Federal Claims

(RCFC) governs motions for judgment on the administrative record. The court’s inquiry is

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

burden of proof based on the evidence in the record.’” Mgmt. & Training Corp. v. United

States, 115 Fed. Cl. 26, 40 (2014) (quoting A & D Fire Prot., Inc. v. United States, 72 Fed.

Cl. 126, 131 (2006) see also Superior Optical Labs, Inc. v. United States, 150 Fed. Cl.

681, 691 (2020) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57 (Fed. Cir.

2005)); see also AAR Manufacturing, Inc. v. United States, 149 Fed. Cl. 514, 522 (2020);

33

Glocoms, Inc. v. United States, 149 Fed. Cl. 725, 731 (2020); Centerra Grp., LLC v.

United States, 138 Fed. Cl. 407, 412 (2018) (citing Bannum, Inc. v. United States, 404

F.3d at 1356-57); Informatics Applications Grp., Inc. v. United States, 132 Fed. Cl. 519,

524 (2017) (citation omitted); Strategic Bus. Sols., Inc. v. United States, 129 Fed. Cl. 621,

627 (2016), aff’d, 711 F. App’x 651 (Fed. Cir. 2018); Rotech Healthcare Inc. v. United

States, 118 Fed. Cl. 408, 413 (2014); Eco Tour Adventures, Inc. v. United States, 114

Fed. Cl. 6, 21 (2013); DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 661

(2010). Pursuant to RCFC 52.1, in a bid protest, the court reviews the agency’s

procurement decision to determine whether it is supported by the administrative record.

See CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. 462, 481 (2013); see also

CR/ZWS LLC v. United States, 138 Fed. Cl. 212, 223 (2018) (citing Bannum, Inc. v.

United States, 404 F.3d at 1353-54).

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

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

amended the Tucker Act to establish a statutory basis for bid protests in the United States

Court of Federal Claims. See Impresa Construzioni Geom. Domenico Garufi v. United

States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001); see also Sys. Application & Techs., Inc.

v. United States, 691 F.3d 1374, 1380 (Fed. Cir. 2012) (explaining that the Tucker Act

expressly waives sovereign immunity for claims against the United States in bid protests).

The statute provides that protests of agency procurement decisions are to be reviewed

under APA standards, making applicable the standards outlined in Scanwell Labs., Inc.

v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and the line of cases following that decision.

See, e.g., Per Aarsleff A/S v. United States, 829 F.3d 1303, 1309 (Fed. Cir. 2016)

(“Protests of agency procurement decisions are reviewed under the standards set forth

in the Administrative Procedure Act (‘APA’), see 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C.

§ 706), ‘by which an agency’s decision is to be set aside only if it is arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law[.]’” (quoting NVT Techs.,

Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)) (citing PAI Corp. v. United

States, 614 F.3d 1347, 1351 (Fed. Cir. 2010))); Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d at 1332; Res. Conservation Grp., LLC v. United States,

597 F.3d 1238, 1242 (Fed. Cir. 2010) (“Following passage of the APA in 1946, the District

of Columbia Circuit in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held

that challenges to awards of government contracts were reviewable in federal district

courts pursuant to the judicial review provisions of the APA.”); Galen Med. Assocs., Inc.

v. United States, 369 F.3d 1324, 1329 (Fed. Cir.) (citing Scanwell Labs., Inc. v. Shaffer,

424 F.2d at 864, 868, for its “reasoning that suits challenging the award process are in

the public interest and disappointed bidders are the parties with an incentive to enforce

the law”), reh’g denied (Fed. Cir. 2004). In Banknote Corp. of Am., Inc. v. United States,

365 F.3d 1345 (Fed. Cir. 2004), the Federal Circuit explained that “[u]nder the APA

standard as applied in the Scanwell line of cases, and now in ADRA cases, ‘a bid award

may be set aside if either (1) the procurement official’s decision lacked a rational basis;

or (2) the procurement procedure involved a violation of regulation or procedure.’” Id. at

1351 (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d

at 1332)); see also Palantir USG, Inc. v. United States, 904 F.3d 980, 990 (Fed. Cir.

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

34

2018); 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).

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

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

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

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

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

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

[(2006)]: a reviewing court shall set aside the agency action if it is “arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.”’” (alterations in original)

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

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

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

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

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

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

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

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

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

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

of an agency action. The reviewing court shall—

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

and

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

found to be—

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

accordance with law;

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

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

of statutory right;

(D) without observance of procedure required by law;

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

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

an agency hearing provided by statute; or

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

to trial de novo by the reviewing court.

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

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

of the rule of prejudicial error.

5 U.S.C. § 706.

35

Contracting Grp., Inc. v. United States, 920 F.3d 801, 806 (Fed. Cir. 2019) (“In a bid

protest, we follow Administrative Procedure Act § 706 and set aside agency action ‘if it is

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

(quoting Palladian Partners, Inc. v. United States, 783 F.3d 1243, 1252 (Fed. Cir. 2015));

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

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

Corp. v. United States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We evaluate agency

actions according to the standards set forth in the Administrative Procedure Act; namely,

for whether they are ‘arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.’” (quoting 5 U.S.C. § 706(2)(A); and Bannum, Inc. v. United States,

404 F.3d at 1351)); Savantage Fin. Servs. Inc., v. United States, 595 F.3d 1282, 1285-86

(Fed. Cir. 2010); Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir.

2009); Axiom Res. Mgmt., Inc. v. United States, 564 F.3d at 1381 (noting arbitrary and

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

Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue

& Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry

is whether the [government]’s procurement decision was “arbitrary, capricious, an abuse

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

States, 404 F.3d at 1351 (quoting 5 U.S.C. § 706(2)(A) (2000)))); NVT Techs., Inc. v.

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

established under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 28

U.S.C. § 1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is

‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’ 5

U.S.C. § 706(2)(A) (2000).” (internal citations omitted)); Info. Tech. & Applications Corp.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

36

The United States Supreme Court has identified sample grounds which can

constitute arbitrary or capricious agency action:

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

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

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

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

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

expertise.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

37

Stated otherwise by the United States Supreme Court:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the agency.”); In re Sang Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v.

United States, 216 F.3d at 1058 (“The arbitrary and capricious standard applicable here

is highly deferential. This standard requires a reviewing court to sustain an agency action

evincing rational reasoning and consideration of relevant factors.” (citing Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &

Space Co. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); Sys. Studies & Simulation, Inc.

v. United States, 146 Fed. Cl. 186, 199 (2019); By Light Prof’l IT Servs., Inc. v. United

States, 131 Fed. Cl. 358, 366 (2017); BCPeabody Constr. Servs., Inc. v. United States,

112 Fed. Cl. 502, 508 (2013) (“The court ‘is not empowered to substitute its judgment for

that of the agency,’ and it must uphold an agency’s decision against a challenge if the

‘contracting agency provided a coherent and reasonable explanation of its exercise of

discretion.’” (internal citations omitted) (quoting Keeton Corrs., Inc. v. United States, 59

Fed. Cl. 753, 755, recons. denied, 60 Fed. Cl. 251 (2004); and Axiom Res. Mgmt., Inc. v.

United States, 564 F.3d at 1381)), appeal dismissed, 559 F. App’x 1033 (Fed. Cir. 2014);

Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 382; Alamo Travel Grp.,

LP v. United States, 108 Fed. Cl. 224, 231 (2012); ManTech Telecomms. & Info. Sys.

Corp. v. United States, 49 Fed. Cl. 57, 63 (2001), aff’d, 30 F. App’x 995 (Fed. Cir. 2002).

According to the United States Court of Appeals for the Federal Circuit:

Effective contracting demands broad discretion. Burroughs Corp. v. United

States, 223 Ct. Cl. 53, 617 F.2d 590, 598 (1980); Sperry Flight Sys. Div. v.

United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,

Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater

Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69

(1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d, 914

F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good

deal of discretion in determining which bid is the most advantageous to the

Government.” Tidewater Management Servs., 573 F.2d at 73, 216 Ct. Cl.

69.

38

Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958-59; see also Res-Care, Inc. v.

United States, 735 F.3d 1384, 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal

procurement entity, has ‘broad discretion to determine what particular method of

procurement will be in the best interests of the United States in a particular situation.’”

(quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009))), reh’g

en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995

(Fed. Cir. 1996); Geo-Med, LLC v. United States, 126 Fed. Cl. 440, 449 (2016); Cybertech

Grp., Inc. v. United States, 48 Fed. Cl. 638, 646 (2001) (“The court recognizes that the

agency possesses wide discretion in the application of procurement regulations.”);

Furthermore, according to the United States Court of Appeals for the Federal Circuit:

Contracting officers “are entitled to exercise discretion upon a broad range

of issues confronting them in the procurement process.” Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,

1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,

procurement decisions are subject to a “highly deferential rational basis

review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.

Cir. 2008) (internal quotation marks omitted).

PAI Corp. v. United States, 614 F.3d at 1351; see also AgustaWestland N. Am., Inc. v.

United States, 880 F.3d at 1332 (“Where, as here, a bid protester challenges the

procurement official’s decision as lacking a rational basis, we must determine whether

‘the contracting agency provided a coherent and reasonable explanation of its exercise

of discretion,’ recognizing that ‘contracting officers are entitled to exercise discretion upon

a broad range of issues confronting them in the procurement process.’” (quoting Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33 (internal

quotation marks and citation omitted))); Weeks Marine, Inc. v. United States, 575 F.3d at

1368-69 (“We have stated that procurement decisions ‘invoke [ ] “highly deferential”

rational basis review.’ Under that standard, we sustain an agency action ‘evincing rational

reasoning and consideration of relevant factors.’” (alteration in original) (quoting CHE

Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,

Inc. v. United States, 216 F.3d at 1058))).

“Contracting officers ‘are entitled to exercise discretion upon a broad range of

issues confronting them in the procurement process,’” PAI Corp. v. United States, 614

F.3d at 1351 (quoting Impresa Construzioni Geom. Domenico Garufi v. United States,

238 F.3d at 1332), and “[a]ccordingly, procurement decisions are subject to a ‘highly

deferential rational basis review.’” Id. (quoting CHE Consulting, Inc. v. United States, 552

F.3d at 1354 (Fed. Cir. 2008) (internal quotation marks omitted).

When the contracting officer’s discretion grows, so does the burden on the

protestor. As noted in D & S Consultants, Inc. v. United States:

The protestor’s burden becomes more difficult the greater the degree of

discretion vested in the contracting officer. DynCorp Int’l v. United States,

76 Fed. Cl. 528, 537 (2007). Negotiated procurements afford the contracting

officer a “breadth of discretion;” “best-value” awards afford the contracting

39

officer additional discretion. Id. Therefore, in a negotiated, best-value

procurement, the “protestor’s burden is especially heavy.” Id.

D & S Consultants, Inc. v. United States, 101 Fed. Cl. 23, 33 (2011), aff’d, 484 F. App’x

558 (Fed. Cir. 2012); see also Galen Med. Assocs., Inc. v. United States, 369 F.3d at

1330 (noting that contracting officers have great discretion in negotiated procurements

but even greater discretion in best-value determinations than in procurements based on

cost alone); PHT Supply Corp. v. United States, 71 Fed. Cl. 1, 11 (2006) (“It is critical to

note that ‘a protestor’s burden is particularly great in negotiated procurements because

the contracting officer is entrusted with a relatively high degree of discretion, and greater

still, where, as here, the procurement is a “best-value” procurement.’” (citations omitted)).

“It is well-established that contracting officers have a great deal of discretion in making

contract award decisions, particularly when, as here, the contract is to be awarded to the

bidder or bidders that will provide the agency with the best value.” Banknote Corp. of Am.

Inc. v. United States, 365 F.3d at 1355 (citing TRW, Inc. v. Unisys Corp., 98 F.3d 1325,

1327-28 (Fed. Cir. 1996); E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.

1996); Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958–59); see also Am. Tel.

& Tel. Co. v. United States, 307 F.3d 1374, 1379 (Fed. Cir. 2002); Lockheed Missiles &

Space Co. v. Bentsen, 4 F.3d at 958; Brooks Range Contract Servs., Inc. v. United States,

101 Fed. Cl. 699, 707 (2011) (“[A] plaintiff’s burden ‘is elevated where the solicitation

contemplates award on a “best value” basis.’” (internal citations omitted)); Matt Martin

Real Estate Mgmt. LLC v. United States, 96 Fed. Cl. 106, 113 (2010); Serco v. United

States, 81 Fed. Cl. 463, 496 (2008) (“To be sure, as noted at the outset, plaintiffs have a

significant burden of showing error in that regard because a court must accord

considerable deference to an agency’s best-value decision in trading off price with other

factors.”).

A disappointed bidder has the burden of demonstrating the arbitrary and capricious

nature of the agency decision by a preponderance of the evidence. See Tinton Fall

Lodging Realty, LLC v. United Sates, 800 F.3d at 1364; see also Grumman Data Sys.

Corp. v. Dalton, 88 F.3d at 995-96; Enhanced Veterans Sols., Inc. v. United States, 131

Fed. Cl. 565, 578 (2017); Davis Boat Works, Inc. v. United States, 111 Fed. Cl. at 349;

Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 340. The Federal

Circuit has indicated that “[t]his court will not overturn a contracting officer’s determination

unless it is arbitrary, capricious, or otherwise contrary to law. To demonstrate that such a

determination is arbitrary or capricious, a protester must identify ‘hard facts’; a mere

inference or suspicion . . . is not enough.” PAI Corp. v. United States, 614 F.3d at 1352

(citing John C. Grimberg Co. v. United States, 185 F.3d 1297, 1300 (Fed. Cir. 1999)); see

also Turner Constr. Co., Inc. v. United States, 645 F.3d at 1387; Sierra Nevada Corp. v.

United States, 107 Fed. Cl. 735, 759 (2012); Filtration Dev. Co., LLC v. United States, 60

Fed. Cl. 371, 380 (2004).

A bid protest proceeds in two steps. First . . . the trial court determines

whether the government acted without rational basis or contrary to law when

evaluating the bids and awarding the contract. Second . . . if the trial court

finds that the government’s conduct fails the APA review under 5 U.S.C.

§ 706(2)(A), then it proceeds to determine, as a factual matter, if the bid

protester was prejudiced by that conduct.

40

Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs. Corp. v.

United States, 134 Fed. Cl. 550, 555 (2017); FirstLine Transp. Sec., Inc. v. United States,

119 Fed. Cl. 116, 126 (2014), appeal dismissed (Fed. Cir. 2015); Eco Tour Adventures,

Inc. v. United States, 114 Fed. Cl. at 22; Archura LLC v. United States, 112 Fed. Cl. at

496. To prevail in a bid protest case, the protestor not only must show that the

government’s actions were arbitrary, capricious, or otherwise not in accordance with the

law, but the protestor also must show that it was prejudiced by the government’s actions.

See 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of prejudicial error.”); see

also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid

protest case, the inquiry is whether the agency’s action was arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law and, if so, whether the error

is prejudicial.”); IT Enter. Sols. JV, LLC v. United States, 132 Fed. Cl. 158, 173 (2017)

(citing Bannum v. United States, 404 F.3d at 1357-58); Linc Gov’t Servs., LLC v. United

States, 96 Fed. Cl. 672, 694-96 (2010). In describing the prejudice requirement, the

Federal Circuit also has held that:

To prevail in a bid protest, a protester must show a significant, prejudicial

error in the procurement process. See Statistica, Inc. v. Christopher, 102

F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d

1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not

required to show that but for the alleged error, the protester would have

been awarded the contract.” Data General, 78 F.3d at 1562 (citation

omitted). Rather, the protester must show “that there was a substantial

chance it would have received the contract award but for that error.”

Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d

1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, protester

must demonstrate that but for the alleged error, “‘there was a substantial

chance that [it] would receive an award--that it was within the zone of active

consideration.’” (citation omitted)).

Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g denied

(Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d

at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en

banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 316 F.3d

at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332-33; OMV Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000);

Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile

Networks USA, LLC v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).

Past Performance

Regarding the agency’s evaluation of ISN’s past performance, MCS argued that

the “USDA failed to follow the Solicitation’s stated criteria in evaluating ISN’s Past

Performance submission. In particular, USDA failed to recognize that two out of ISN’s

three Past Performance examples did not meet the Solicitation’s established criteria for

relevance.” Defendant responded that the USDA’s Past Performance evaluation was

reasonable and in accordance with the Solicitation,” and intervenor similarly argued that

the “USDA’s past performance evaluation was reasonable.”

41

Consistent with the above arbitrary or capricious standard, a Judge of the United

States Court of Federal Claims explained, “[i]n the bid protest context, the assignment of

a past performance rating is reviewed ‘only to ensure that it was reasonable and

consistent with the stated evaluation criteria and applicable statutes and regulations,

since determining the relative merits of the offerors’ past performance is primarily a matter

within the contracting agency’s discretion.’” Todd Constr., L.P. v. United States, 88 Fed.

Cl. 235, 247 (2009) (quoting Clean Venture, Inc., B-284176, 2000 WL 253581, at *3

(Comp. Gen. Mar. 6, 2000)), aff’d, 656 F.3d 1306 (Fed. Cir. 2011); see also Glenn Def.

Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 911 (citing E.W. Bliss Co. v. United

States, 77 F.3d at 449); Vanguard Recovery Assistance v. United States, 101 Fed. Cl. at

785 (It is a “‘well-recognized’ principle that ‘an agency’s evaluation of past performance

is entitled to great deference.’” (quoting Al Andalus Gen. Contracts Co. v. United States,

86 Fed. Cl. 252, 264 (2009) (citing Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272,

293 (2007)))); SP Sys., Inc. v. United States, 86 Fed. Cl. 1, 23 (2009) (A “past

performance evaluation ‘will not be disturbed unless it is unreasonable or inconsistent

with the terms of the solicitation or applicable statutes or regulations.’” (quoting Consol.

Eng’g Servs., Inc. v. United States, 64 Fed. Cl. at 637)). “‘When the Court considers a bid

protest challenge to a past performance evaluation conducted in the course of a

negotiated procurement, “the greatest deference possible is given to the agency.”’”

FirstLine Transp. Sec., Inc. v. United States, 100 Fed. Cl. 359, 396 (2011) (quoting Univ.

Research Co. v. United States, 65 Fed. Cl. 500, 505 (2005) (quoting Gulf Grp., Inc. v.

United States, 61 Fed. Cl. at 351)); see also Plasan N. Am., Inc. v. United States, 109

Fed. Cl. 561, 572, appeal dismissed (Fed. Cir. 2013); Fort Carson Support Servs. v.

United States, 71 Fed. Cl. 571, 598 (2006) (“Evaluation of past performance is ‘within the

discretion of the contracting agency and will not be disturbed unless it is unreasonable or

inconsistent with the terms of the solicitation or applicable statutes or regulations.’”)

(quoting Consol. Eng’g Servs. v. United States, 64 Fed. Cl. 617, 637 (2005))). Likewise,

the court in Seaborn Health Care, Inc. v. United States, wrote:

A similar deferential standard applies when the Court is reviewing an

agency's assessment of past performance evaluations. Commissioning

Solutions Global, LLC v. United States, 97 Fed. Cl. 1, 9 (2011) (“[I]n cases

such as this, when a negotiated procurement is involved and at issue is a

performance evaluation, the greatest deference possible is given to the

agency—what our Court has called a ‘triple whammy of deference.’”)

(quoting Gulf Grp., Inc. v. United States, 61 Fed. Cl. 338, 351 (2004))); see

also Blackwater Lodge & Training Center Inc. v. United States], 86 Fed. Cl.

488, 493 (2009) (“mere disagreement” with past performance evaluations

is insufficient to disturb agency's decision).

Seaborn Health Care, Inc. v. United States, 101 Fed. Cl. 42, 48 (2011). Continuing, the

court stated:

In evaluating an offeror's past performance, FAR 15.305(a)(2) affords

agencies considerable discretion in deciding what data is most relevant.

PlanetSpace Inc. v. United States, 92 Fed. Cl. 520, 539 (2010). “Thus, when

evaluating an offeror's past performance, the [contracting officer] ‘may give

unequal weight,’ or no weight at all, ‘to different contracts when [the

42

contracting officer] views one as more relevant than another.’” Linc Gov't

Servs., LLC v. United States, 96 Fed. Cl. 672, 718 (2010) (quoting SDS Int'l,

Inc. v. United States, 48 Fed. Cl. 759, 769 (2001)).

Seaborn Health Care, Inc. v. United States, 101 Fed. Cl. at 51 (modifications in original);

see also Fluor Intercontinental, Inc. v. United States, 147 Fed. Cl. 309, 329 (2020); Torres

Advanced Enter. Sols., LLC v. United States, 133 Fed. Cl. 496, 531 (2017) (“When a

protestor challenges a procuring agency's evaluation of past performance, the court's

review is limited to ensuring that the evaluation was reasonable and performed in

accordance with the solicitation; in other words, the procuring agency's evaluation is

entitled to great deference.”); Vanguard Recovery Assistance v. United States, 101 Fed.

Cl. at 787. “The court must especially defer to the agency's technical evaluations, past

performance ratings, and other ‘minutiae of the procurement process . . . which involve

discretionary determinations of procurement officials.’” J.C.N. Constr., Inc. v. United

States, 107 Fed. Cl. 503, 510 (2012) (quoting E.W. Bliss Co. v. United States, 77 F.3d at

449), subsequent determination, 2013 WL 593479 (Fed. Cl. Feb. 15, 2013). A Judge of

this court also has determined that, in a negotiated performance, a protestor must

overcome a “triple whammy of deference by demonstrating by a preponderance of the

evidence that the SSA lacked any rational basis” to assign a given past performance

rating. Overstreet Elec. Co., Inc. v. United States, 59 Fed. Cl. 99, 117 (2003), appeal

dismissed, 89 F. App’x 741 (Fed. Cir. 2004) (emphasis in original); see also CGS Adm’rs,

LLC v. United States, 110 Fed. Cl. 431, 450 (2013) (stating that “past performance

evaluations in this type of procurement are accorded a ‘triple whammy of deference’”

(quoting Overstreet Elec. Co., Inc. v. United States, 59 Fed. Cl. at 117)); Plasan N. Am.,

Inc. v. United States, 109 Fed. Cl. at 572; Tech Sys., Inc. v. United States, 98 Fed. Cl.

228, 243 (2011). Despite the foregoing, although highly deferential, the court’s review of

an agency’s past performance evaluation is neither an automatic endorsement of the

agency’s actions nor tolerant of observable mistakes and each past performance

evaluation must be reviewed on a fact-specific basis.

As indicated above, in the above captioned protest, for the Past Performance

Factor, the Solicitation stated:

FACTOR 2 – Past Performance

The past performance confidence assessment rating is based on the

offeror’s overall record of recency, relevancy, and quality of performance.

In addition, for large business concerns, the Government will evaluate past

performance to determine the extent to which offeror has attained

applicable goals for small business participation under prior contracts that

required subcontracting plans. Relevant experience must be demonstrated

within the last three years of providing property preservation and inspection

services as required in the PWS. Specifically, a review of record of quality

of service, personnel, adhering to contract schedule and cost contract, and

attainment of subcontracting goals, if applicable. In accordance with FAR

15.305(a)(2), the currency and relevance of the information, source of the

information, context of the data, and general trends in contractor’s

performance shall be considered. These are combined to establish one

43

performance confidence assessment rating for each offeror. In addition, this

assessment of offeror’s performance will contribute to the responsibility

determination.

(capitalization and emphasis in original).6 Regarding the Past Performance Factor, each

proposal was to be evaluated under the following method:

6 Additionally, the instructions to the offerors indicated:

The offeror shall submit a list of the last three contracts completed during

the past three years or currently being performed that are similar to the

solicitation size, scope, and complexity, and that are specifically related to

property preservation and inspection services. Work that is of particular

relevance to this solicitation and PWS includes, but is not limited to:

• Nationwide Property Inspections (REO and Foreclosure Custodial)

• Nationwide Property Preservation (REO and Foreclosure Custodial)

44

The USDA’s evaluation of ISN’s past performance in the Proposal Analysis Report states:

3.1.2 PAST PERFORMANCE FACTOR

3.1.2.1 Performance Confidence Assessment - Observations and

Conclusions

ISN is assigned as Substantial Confidence. Summarily, Offeror provided

substantial past performance both for ISN and its major subcontractor

[redacted]. The proposal indicated three contracts for past performance,

two performed by the prime and one performed by major subcontractor

[redacted]. There were no CPARs or PIPRs reported. The team received

only one Past Performance Questionnaire for review. The questionnaire

from HUD reflected a rating of “Five” (exceeds) in the areas of delivery

performance and problem solving and a rating of “four” (meets and

occasionally exceeds) in overall quality, quality of service, and quality of

personnel (Ref. B20 Performance Evaluation Report).

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

concluded, regarding ISN’s Past Performance:

ISN Past Performance Confidence rating of “Substantial” was reviewed and

assessed on information reviewed by the TET on three contracts. Two of

the contracts ISN was the Prime and with the third contract performed by

their major proposed subcontractor, [redacted]. The ISN prime contract

values ranged from $22M to 42M, which is comparable in size and scope

to this solicitation requirement. There were no CPARs on record. A Past

Performance Questionnaire from HUD was received reflecting “Five”

(exceeds) in the areas of delivery performance and problem solving and a

rating of “four” (meets and occasionally exceeds) in overall quality, quality

of service, and quality of personnel.

As noted above, protestor MCS alleged that “[t]wo out of three of ISN’s Past

Performance examples did not meet the Solicitation’s definition of how offerors would

demonstrate relevance,” and, therefore, the agency’s Substantial Confidence rating for

ISN’s past performance was unreasonable.7 MCS first cites to the Nationwide Asset

Management Services for the United States Marshalls Service (USMS) contract.

7 Regarding the third past performance contract submitted by ISN for the Past

Performance Factor, the contract by subcontractor [redacted] Nationwide Asset

Management Services for [redacted], MCS conceded that “[u]nder the terms of the

Solicitation, the Agency properly considered” the contract to be relevant, but argued that

“ISN only proposed that [redacted] perform 30% of the contract work.” (internal references

omitted). Additionally, MCS argued it “would be irrational for USDA to find that one out of

three relevant contract examples entitled ISN to the highest Past Performance rating.”

45

Regarding the USMS contract, ISN’s proposal stated in part:

ISN supported the USMS by delivering an array of asset management

services to a revolving portfolio of approximately [redacted] nationwide

residential, commercial, and multi-family properties that were in the process

of receiving Preliminary Order of Forfeiture (POF) or Final Order of

Forfeiture (FOF) status to become REO in the DOJ AFF. ISN provided

property maintenance and management services, routine inspections for

condition assessment, vendor management, tenant rents and lease

administration, data quality assurance, reporting, and much more.

Property Management and Maintenance: For this effort, ISN managed a

wide range of properties, to include vacant and occupied residential and

commercial buildings. ISN performed regular site visits to assess

conditions, photograph property, and verify compliance with local code

regulations. For properties with tenants, ISN performed lease and rent

administration services, eviction proceedings, and the handling of

delinquencies in rent. For properties without tenants, our management team

worked with an expansive network of vendors to obtain bids and perform all

recurring and emergency maintenance services.

Staffing: In order to properly staff the USMS contract, ISN utilized existing

knowledgeable property management personnel, reallocated personnel,

and hired approximately 8 additional staff members. Our teams of

professionals worked hand and hand with USMS personnel daily to ensure

the properties were properly preserved in order to fast track them for sale.

We were able to use our nationwide, readily available field staff to provide

personnel to support the management and maintenance of assets within

the United States and all U.S. territories. Additionally, ISN demonstrated

strong capability to minimize staff augmentation and other expense

increases even as the scope of work was expanded throughout the course

of the contract.

(capitalization and emphasis in original). Regarding the size of the USMS contract, which

included a “revolving portfolio of approximately [redacted] nationwide residential,

commercial, and multi-family properties,” protestor noted that

[b]y contrast, USDA’s portfolio consists of approximately [redacted]

properties, a difference in magnitude of over [redacted]%. Similarly, the total

contract price for ISN’s USMS contract was $22.5M over six years, or

approximately $3.75M per year. Even at ISN’s unrealistically-low pricing [for

the Solicitation at issue in the above captioned protest], the present

procurement would be approximately [redacted]% greater in annual value

than ISN’s USMS contract.

(internal reference omitted).

46

The Source Selection Decision Document noted for ISN’s three Past Performance

references: “The ISN prime contract values ranged from $22M to 42M, which is

comparable in size and scope to this solicitation requirement.” The Source Selection

Decision Document did not note, as protestor did, that the $22 million contract for USMS

was a 6 year contract, and, therefore, did not explain how it would comparable in size and

scope to this solicitation requirement.” Similarly, the Proposal Analysis Report stated, in

part: “ISN is assigned as Substantial Confidence. Summarily, Offeror provided substantial

past performance both for ISN and its major subcontractor [redacted]. The proposal

indicated three contracts for past performance, two performed by the prime and one

performed by major subcontractor [redacted]. There were no CPARs or PIPRs reported.

The team received only one Past Performance Questionnaire for review.” The court notes

that the Past Performance Questionnaire was not for the USMS contract, but for the

United States Department of Housing and Urban Development contract discussed below.

It is unclear how the Proposal Analysis Report could have determined that ISN could meet

the requirements of the Solicitation based on the USMS contract, much less reach that

conclusion with substantial confidence, which required that “the Government has a high

expectation that the offeror will successfully perform the required effort.”

Intervenor responded that the “USDA acted within its (considerable) discretion in

evaluating this effort, and stated:

Under this [USMS] contract, ISN delivered “an array of asset management

services to a revolving portfolio of approximately [redacted] nationwide

residential, commercia, and multi-family properties” that were in the process

of becoming REO assets. AR 409. This included “property maintenance and

management services, routine inspections for condition assessment,

vendor management, tenant rents and lease administration, data quality

assurance, reporting, and much more.” Id. These services were performed

“in all 50 U.S. States and its Territories,” and specifically involved

“performing weekly, biweekly, and monthly property inspections with

photographs; . . . completing emergency repairs; . . . inspecting, reporting,

and abating/remediating environmental hazards;” and more. AR 413.

Moreover, as part of this effort, ISN “developed a network of approximately

[redacted] geographically dispersed inspectors to deliver high quality, timely

property inspections.” Id. Considering the totality of this effort—and ISN’s

high performance marks under it (AR 413–14)—USDA considered this

project as part of its Substantial Confidence past performance score.

(capitalization, emphasis and alterations in original). Intervenor, however, only quoted its

own proposal, and aside from highlighting the deference owed the agency, does not

attempt to explain how the agency determined the “Substantial Confidence” rating was

warranted.

Defendant argued that

MCS highlights the “difference” between the USMS contract and the USDA

contract, by contraposing the quantity of properties serviced under each

contract. MCS contends that, under the USMS contract, the portfolio is

47

[redacted] properties whereas the current USDA contact requires service of

[redacted] properties. Thus, MCS suggests that ISN did not fulfill the past

performance requirement. MCS’s argument has no merit.

(internal references omitted). Furthermore, defendant reasoned “the solicitation does not

identify or define what constitutes ‘similar in size, scope, and complexity,’ and, thus, that

determination is left to the broad discretion of the agency.” Like intervenor, defendant

does not rely on any documented rationale of the agency, or offer an explanation for why

the difference in scope and price for the USMS contract would warrant a strong past

performance evaluation. Defendant simply defaults to the deference to the agency

argument. Although agency decisions are entitled to deference under APA review, see

also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 911 (citing E.W.

Bliss Co. v. United States, 77 F.3d at 449), the deference is not absolute, and courts will

reject an agency’s determinations if they are unreasonable. See SP Sys., Inc. v. United

States, 86 Fed. Cl. at 23. The court finds that with respect to the Past Performance

evaluation for the USMS contract, the agency’s determination was unreasonable. The

agency provided no explanation for why the USMS contract met the past performance

requirements, did not attempt to justify the difference in the size and scope of the contract,

or explain why a past performance questionnaire was not obtained for the USMS

reference. Given the difference, in the size and scope for the USMS contract versus the

anticipated contract to be award under the Solicitation, it was incumbent on the agency

to document some rationale for giving ISN the highest past performance rating.

As noted above, only MCS and ISN were given Technical Factor ratings of

Outstanding and Past Performance ratings of Substantial Confidence. As the Solicitation

explained in the “Relative Importance of Factors:”

The award resulting from this solicitation will be made based on the best

overall proposal that is determined to be the most beneficial to the

Government (i.e., best value tradeoff process). The Technical Capability

Factor is slightly more important than the Past Performance Factor.

Technical Capability Subfactors, 1.1, 1.2, 1.3, 1.4 and 1.5, are rated in

descending order of importance. Overall, Non-Price Factors, when

combined, are significantly more important than Price. Price is not an

adjectivally rated Factor; however, the Price Factor will become the more

dominant factor as technical proposals reach technical equality.

Had ISN not received a Substantial Confidence rating like MCS, the agency may have

determined MCS was entitled to contract award. Given the requirement, the paucity of

information about the USMS contract in the agency’s evaluations is glaring.

MCS also questions a second contract that ISN included for its past performance,

Mortgagee Compliance Management for the United States Department of Housing and

Urban Development (HUD). As indicated in the Administrative Record, as Mortgagee

Compliance Manager

ISN is responsible for assigned Mortgagee

Compliance Manager functions including:

• [redacted]

48

• [redacted]

• [redacted]

• [redacted]

• [redacted]

• [redacted]

• [redacted]

• [redacted]

MCS notes that for Past Performance submissions, the Solicitation required “[r]elevant

experience must be demonstrated within the last three years of providing property

preservation and inspection services as required in the PWS.” Protestor argued that “ISN

provided financial and title-related services to HUD, while MCS and other field service

organizations performed the property preservation work,” and “[b]ecause ISN’s HUD

contract did not involve ‘providing property preservation and inspection services’ for any

period of time, it is not relevant under the terms of the Solicitation.”

Regarding the HUD contract, defendant argued: “[A]s noted by the agency, the

HUD contract involved providing services in rural and remote areas (similar to USDA’s

contract), AR 1586, performance involved servicing [redacted] properties per year

(exceeding USDA’s contract), AR 1586, and performance involved pre and post

foreclosure services (similar to USDA’s contract), AR 1586.” The court notes, however,

all three of defendant’s citations are to the exhibits at the GAO. Moreover, the exhibits

defendant refers to are from the past performance evaluation of the HUD contract prior

to the corrective action, and not to the one currently before the court. Similarly,

intervenor, citing to its proposal in the Administrative Record, argued the HUD contract

involved

“pre- and post-foreclosure services to approximately [redacted] properties

per year,” including “processing property preservation requests on behalf of

HUD; reviewing property inspections conducted on defaulted single family

(SF) FHA properties; submitting contingency preservation requests to the

COR for emergency repairs or environmental hazard abatement; providing

daily, weekly, and monthly reporting on property volume, revenue

recovery/expenditures, and contract performance.”

Additionally, intervenor argued that “though USDA recognized that this work did not

involve actually performing the services, it did ‘indicate[] experience with pre- and post-

foreclosure services, and detailed support that [redacted].” The court notes, however, like

with defendant’s argument, the agency’s past performance evaluation of the HUD

contract is from the first evaluation, prior to the corrective action. It does not appear again

in the agency’s evaluation after the corrective action. Moreover, ISN left out an important

part of the evaluation in its quotation. The sentence ISN quoted states in full: “The team

noted that past performance record number two supporting HUD which indicated

experience with pre- and post-foreclosure services, [redacted] as opposed to performing

the services.” (emphasis added) Moreover, the intervenor does not contradict protestor’s

claim that “ISN provided financial and title-related services to HUD, while MCS and other

49

field service organizations performed the property preservation work,” and admits that the

USDA “recognized that this work did not involve actually performing the services.” ISN’s

work for the HUD contract appears to be substantially different than the work ISN would

be expected to perform for the USDA, and raises questions as to why the HUD contract

would warrant a past performance rating of Substantial Confidence from the agency’s

evaluation of ISN’s proposal.

As noted above, regarding ISN’s past performance, the agency in the Proposal

Analysis Report indicated:

ISN is assigned as Substantial Confidence. Summarily, Offeror provided

substantial past performance both for ISN and its major subcontractor

[redacted]. The proposal indicated three contracts for past performance,

two performed by the prime and one performed by major subcontractor

[redacted]. There were no CPARs or PIPRs reported. The team received

only one Past Performance Questionnaire for review. The questionnaire

from HUD reflected a rating of “Five” (exceeds) in the areas of delivery

performance and problem solving and a rating of “four” (meets and

occasionally exceeds) in overall quality, quality of service, and quality of

personnel (Ref. B20 Performance Evaluation Report).

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

concluded, regarding ISN’s Past Performance:

ISN Past Performance Confidence rating of “Substantial” was reviewed and

assessed on information reviewed by the TET on three contracts. Two of

the contracts ISN was the Prime and with the third contract performed by

their major proposed subcontractor, [redacted]. The ISN prime contract

values ranged from $22M to 42M, which is comparable in size and scope

to this solicitation requirement. There were no CPARs on record. A Past

Performance Questionnaire from HUD was received reflecting “Five”

(exceeds) in the areas of delivery performance and problem solving and a

rating of “four” (meets and occasionally exceeds) in overall quality, quality

of service, and quality of personnel.

(capitalization in original).8 The agency provides no insight for why the HUD contract

warranted the strong past performance reference. Moreover, the USDA did not explain

8The court notes, in the original evaluation by the agency before the corrective action,

which the defendant and intervenor cite to, the USDA determined with regard to ISN’s

past performance:

ISN provided past performance information on three contracts, two

performed by the prime and one performed by major subcontractor

[redacted]. The first record, performed by ISN, cited a contract value of

approximately $22M and supported the USMS by delivering asset

management services to a revolving portfolio of approximately [redacted]

50

why the HUD contract met the requirements of “[r]elevant experience must be

demonstrated within the last three years of providing property preservation and inspection

services as required in the PWS.” The agency did not even describe if the HUD contract

had involved performance of “preservation and inspection services.” Instead, the agency

simply stated that ISN’s HUD contract had a strong reference with its Past Performance

Questionnaire.

In its brief, protestor argued that “[t]his case is similar to FFL Pro LLC, 124 Fed.

Cl. 536, 555 (2015), in which the Court set aside an agency’s past performance

evaluation,” and the court agrees. In FFL Pro LLC v. United States, the United States

Department of State's Office of Antiterrorism Assistance (ATA) issued a solicitation for

the acquisition of overseas cyber security training services and supplies. See id. at 539.

In FFL Pro LLC, a Judge of the United States Court of Federal Claims explained that

“proposals would be evaluated according to five factors; in descending order of

importance, these factors were: (1) Technical Compliance With all of the Terms and

Conditions of the Solicitation (‘Technical Compliance’); (2) Corporate Experience; (3) Past

Performance; (4) Status of Property Management; and (5) Price.” Id. at 540 (footnote

omitted). Regarding Past Performance, the solicitation in In FFL Pro LLC stated that:

Offerors are advised to use references from projects involving relevant IT

supplies and IT training services within the scope of this solicitation and in

compliance with [Federal Acquisition Regulation (“FAR”) ] 52.212–1. (i)

Provide a description of the offeror's experience in the professional

information technology services and cyber training services industries

referenced in the [request for proposals]. Describe three completed or on-

going project(s), similar in size and complexity to the effort contemplated

herein and in sufficient detail for the Government to perform an evaluation.

nationwide residential, commercial, and multi-family properties (occupied

and vacant). The second record, performed by ISN, cited an awarded value

of $42M over the period 06/01/2015 to 5/31/2020 and supports the current

Department of Housing and Urban Development (HUD) National Servicing

Center’s (NSC’s) Mortgagee Compliance Manager (MCM). The third

record, performed by [redacted], cited a contract value of $425M from

08/2009 to present. This effort provides nationwide Real Estate Owned

(REO) asset management, title services, field services, valuations,

brokerage, online marketing, and settlement services in support of

[redacted]. The team noted that past performance record number two

supporting HUD which indicated experience with pre- and post-foreclosure

services, [redacted] as opposed to performing the services.

There were no CPARs or PIPRs reported. The team received only one Past

Performance Questionnaire for review. The questionnaire from HUD

reflected a rating of “Five” (exceeds) in the areas of delivery performance

and problem solving and a rating of “four” (meets and occasionally exceeds)

in overall quality, quality of service, and quality of personnel.

51

FFL Pro LLC v. United States, 124 Fed. Cl. at 541 (brackets in original). Awardee VariQ

Corporation (VariQ) was awarded an “Exceptional” past performance rating, and protestor

FFL Pro LLC challenged the past performance rating, among other claims at the Court of

Federal Claims. See id. at 546. The Judge in FFL Pro LLC recognized that the “evaluation

and rating of proposals is within the discretion of the procuring agency,” but in the FFL

Pro LLC case,

the Technical Evaluation Team's evaluation of VariQ's past performance—

twice endorsed by the contracting officer—does not meet these standards

because it does not address any of the criteria set forth in the Past

Performance factor description; in other words, it does not evince a

consideration of relevant factors. Indeed, the narrative summary provided

by the Technical Evaluation Team in support of its exceptional rating is little

more than a copy-and-paste of the solicitation’s definition of “exceptional.”

FFL Pro LLC v. United States, 124 Fed. Cl. 536, 555–56 (2015) (footnote omitted).

Therefore, the Judge concluded “[i]n the absence of a coherent and reasonable

explanation from the ATA of its evaluation of VariQ's proposal under the Past

Performance factor, the court cannot ascertain whether the ATA's evaluation had a

rational basis.” Id. at 557 (footnote omitted). Similarly in the above captioned protest, the

court cannot determine how the agency determined the HUD contract warranted a past

performance rating of Substantial Confidence, or how the agency even determined that

the work performed by ISN was in line with the requirements for performance of the

contract to be award by the USDA. Despite the great deference afforded the agency for

its past performance evaluations, see Todd Constr., L.P. v. United States, 88 Fed. Cl.

247; Vanguard Recovery Assistance v. United States, 101 Fed. Cl. at 785, given the

USDA’s minimal explanation of how the agency evaluated ISN’s HUD past performance,

the court finds the agency’s conclusion was not reasonable.

Having found that the USDA’s evaluations of two of ISN’s three past performance

references were not reasonable, and not performed in accordance within the

requirements of the Solicitation, the agency’s decision to award ISN a past performance

rating of Substantial Confidence rating, the highest possible rating and the rating which

requires the agency to determine that based on the relevant performance record, “the

Government has a high expectation that the offeror will successfully perform the required

effort,” the agency acted unreasonably, see Torres Advanced Enter. Sols., LLC v. United

States, 133 Fed. Cl. at 531, and the agency’s past performance evaluation of ISN,

therefore, was arbitrary and capricious.

The court notes that the GAO reached the opposite conclusion about the USDA’s

past performance evaluation. As noted above, the GAO determined:

While the protester notes aspects of two of ISN's contracts that were

dissimilar to the instant effort, the evaluation record demonstrates that ISN's

overall past performance and experience supports the agency's assigned

ratings. In this respect, ISN submitted two contract references involving

52

property management services, including a contract performed by ISN's

subcontractor with a value of $425 million. The third contract, the HUD

contract, involved the provision of portfolio management services for

approximately 60,000 properties per year. While such services were merely

“related to” property preservation and inspection services, we find that the

agency nonetheless acted reasonably in considering the HUD contract as

part of ISN's overall past performance and relevant experience. In sum, we

find that the agency reasonably found that ISN's overall experience and

past performance were relevant and merited the high ratings assigned to

ISN under those factors.

Id. at *8 (internal references omitted). With respect to the GAO,9 the GAO’s conclusions

regarding ISN’s past performance appear summary, and did not fully address the

differences in the size and scope of ISN’s past performance references. Most notably,

with regard to the HUD contract, the GAO indicated the services performed were “merely

‘related to’ property preservation and inspection services,” the GAO found “that the

agency nonetheless acted reasonably in considering the HUD contract as part of ISN's

overall past performance and relevant experience.” Id. As the solicitation at issue was for

property preservation and inspection services for USDA’s rural property portfolio the

GAO’s decision does not reflect sufficient analysis of the reasonableness by the agency

to find the HUD contract warranted a Past Performance rating of “Substantial

Confidence.”

As the USDA’s evaluations of two of ISN’s past performance references were not

reasonable, this calls into question the agency’s evaluation of the Technical Factor’s first

sub-factor. As noted above, for the Technical Factor, the Solicitation stated:

FACTOR 1 – Technical Capability – Overall the Technical Capability will

be evaluated based on the extent to which it is demonstrated a likelihood of

successful performance of the requirements of the Performance Work

Statement (PWS) (Attachment A). The effectiveness and feasibility of the

proposed Technical Capability and the offerors understanding of the work

will be considered as part of the assessing the likelihood of successful

performance.

(capitalization and emphasis in original). The Solicitation explained that

[t]here are five technical capability subfactors that will be evaluated and

considered in descending order of importance as follows and evaluated

based on:

9

Although Judges of the United States Court of Federal Claims, including the

undersigned, have high respect for the expertise of the GAO, and often consider the

reasoning included in GAO decisions when reaching their own opinions, GAO decisions

are not binding on the United States Court of Federal Claims. See Cleveland Assets, LLC

v. United States, 132 Fed. Cl. 264, 280 n.15 (2017); see also Centech Grp., Inc. v. United

States, 554 F.3d at 1038.

53

Sub-factor 1.1 - Relevant Experience - Demonstration of experience in

providing services to assist USDA, RD in providing a variety of

property/asset management services associated with pre and post

liquidation of SFH rural properties serving as security for rural housing loans

and guarantees of equivalent portfolio size, as specifically listed in the PWS.

(capitalization and emphasis in original). Therefore, the Technical Factor’s first sub-factor

was considered the most important technical sub-factor. The requirement required the

“[d]emonstration of experience in providing services to assist USDA,” however, as

determined above, the experience provided by ISN in its proposal was not sufficient to

demonstrate ISN had performed similar work to the work required by the agency for

successful performance of the contract. The agency should have more carefully

considered whether ISN’s insufficient past performance references warranted an overall

Technical rating of Outstanding, which requires that the “[p]roposal indicates an

exceptional approach and understanding of the requirements and contains multiple

strengths, and risk of unsuccessful performance is low.”

Price

Additionally, protestor alleged that the “USDA failed to properly evaluate ISN’s

unrealistically low pricing,” and claimed that the “Agency performed an irrational price

realism evaluation of ISN.” In response, defendant argued that the “USDA’s price realism

analysis was reasonable and in accordance with the Solicitation.” Similarly, ISN claimed

the “USDA’s thorough price realism evaluation should be upheld.”

A price realism analysis considers whether an offeror’s price is too low, such that

it indicates a risk of poor performance and a lack of understanding of the solicitation

requirements. See KWR Constr., Inc. v. United States, 124 Fed. Cl. 345, 356 (2015)

(“Generally, a price realism analysis examines the performance risk of proposals in a

fixed-price contract procurement, with particular attention to the risk of low-priced

proposals. . . .”) (internal citations removed). A price realism analysis differs from a price

reasonableness analysis because a price reasonableness analysis considers whether an

offeror’s price is too high.10 See Munilla Constr. Mgmt., LLC v. United States, 130 Fed.

Cl. 635, 649 (2017) (explaining that an agency’s concern in making a price

reasonableness determination is whether the prices are too high, and a “determination of

whether an offeror’s prices are too low is made when an agency conducts a cost or price

realism analysis”); see also EMTA Isaat, A.S. v. United States, 123 Fed. Cl. 330, 338 n.9

(2015) (“In general, a price reasonableness analysis has the goal of preventing the

government from paying too much for contract work. A price realism analysis, on the other

hand, investigates whether the contractor is proposing a price so low that performance of

the contract will be threatened.”). Price realism is not defined in the Federal Acquisition

10 FAR 15.404-1(a) requires a price reasonableness evaluation and provides that the

“contracting officer is responsible for evaluating the reasonableness of the offered prices”

in a negotiated procurement. 48 C.F.R. § 15.404-1(a)(1) (2019). The parties do not

dispute that the agency considered price reasonableness.

54

Regulation (FAR). See Mil-Mar Century Corp. v. United States, 111 Fed. Cl. 508, 541

n.36 (2013); DMS All-Star Joint Venture v. United States, 90 Fed. Cl. at 663 n.11 (quoting

Ralph C. Nash & John Cibinic, Price Realism Analysis: A Tricky Issue, 12 No. 7 Nash &

Cibinic Rep. ¶ 40 (July 1988) (citing 48 C.F.R. § 15.404–1(d)(1), (3)) (“A price realism

analysis ‘is analysis to determine if the offeror’s proposed prices are unrealistically

low.’”).11

The Federal Circuit has explained that Judges of this court should determine

“whether the agency's price-realism analysis was consistent with the evaluation criteria

set forth in the RFP, see Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330

(Fed. Cir. 2004), not to introduce new requirements outside the scope of the RFP.” See

Alabama Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d at 1375–76

(emphasis in original). The Federal Circuit in Agile Defense, Inc. v. United States, also

indicated, albeit with regard to cost realism:

The regular view of the Court of Federal Claims, which we approve, is that

contracting agencies enjoy wide latitude in conducting the cost realism

analysis. See, e.g., Mission1st Grp., Inc. v. United States, 144 Fed. Cl. 200,

211 (2019) (“It is well established that contracting agencies have broad

discretion regarding the nature and extent of a cost realism analysis, unless

the agency commits itself to a particular methodology in a solicitation.”

(citation and internal quotation marks omitted)); Dellew Corp. v. United

States, 128 Fed. Cl. 187, 194 (2016) (“The Agency has demonstrated that

it considered the information available and did not make irrational

assumptions or critical miscalculations. To require more would be infringing

on the Agency’s discreti

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