American K-9 Detection Services, LLC v. United States

In the United States Court of Federal Claims

Nos. 20-1614; 21-1165

(Filed: 16 August 2021*)

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AMERICAN K-9 DETECTION *

SERVICES, LLC, *

*

Plaintiff, *

*

v. *

* Organizational Conflict of Interest;

THE UNITED STATES, * Unequal Access to Information OCI;

* Biased Ground Rules OCI; USPS SP&Ps;

Defendant, * RCFC 52.2; Remand Without Vacatur;

* Bias Allegation; Technical Evaluation

and * Factors; Best-Value Tradeoff

*

MICHAEL STAPLETON *

ASSOCIATES, LTD., *

*

Defendant-Intervenor. *

*

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GLOBAL K9 PROTECTION GROUP, LLC, *

*

Plaintiff, *

*

v. *

*

THE UNITED STATES, *

*

Defendant, *

*

This Opinion and Order was originally filed under seal on 4 August 2021 pursuant to the protective order in this

case. The Court provided the parties the opportunity to review this Opinion for any proprietary, confidential, or

other protected information and submit proposed redactions no later than 13 August 2021 at 12:00 p.m. The parties

filed joint proposed redactions. See Joint Notice of Proposed Redactions to the Court’s Opinion and Order, ECF No.

111-1. The Court accepts the parties’ proposed redactions and reissues the order with a few minor, non-substantive

corrections and redacted language replaced as follows: “[xxxxx].”

*

and *

*

MICHAEL STAPLETON *

ASSOCIATES, LTD., *

*

Defendant-Intervenor. *

*

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Daniel J. Strouse, of Cordatis LLP, with whom was Joshua D. Schnell, all of Arlington,

VA, for plaintiff American K-9 Detection Services, LLC.

W. Brad English, of Maynard, Cooper & Gale, PC, with whom were Jon D. Levin, Emily

J. Chancey, J. Dale Gipson, and Nicholas P. Greer, all of Huntsville, AL, for plaintiff Global K9

Protection Group, LLC.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,

Department of Justice, with whom were Jeffrey Bossert Clark, Acting Assistant Attorney

General, Brian M. Boynton, Acting Assistant Attorney General, Robert E. Kirschman Jr.,

Director, Martin F. Hockey Jr., Acting Director, and Reginald T. Blades Jr., Assistant Director,

all of Washington, DC, and Shoshana O. Epstein, Attorney, Postal Service, for defendant.

Ryan C. Bradel, of Ward & Berry PLLC, with whom were P. Tyson Marx and Stephen G.

Darby, all of Tysons, VA, for defendant-intervenor.

OPINION AND ORDER

HOLTE, Judge.

This Opinion rules on two consolidated bid protests against the United States Postal

Service (“USPS,” “the agency,” or “the government”), in which the government awarded a

contract for canine explosive detection and alarm resolution services to defendant-intervenor

Michael Stapleton Associates, LTD (“MSA” or “defendant-intervenor”), under Solicitation No.

2B-20-A-0087 (“solicitation”). American K-9 Detection Services, LLC (“AMK9”) brought a

pre-award bid protest and, because the government continued with award and performance of the

contract, later amended its complaint to include a post-award protest. Global K9 Protection

Group, LLC (“GK9”) additionally brought a post-award bid protest. Pending before the Court

now are plaintiff AMK9’s pre-award and post-award motions for judgment on the administrative

record (“MJARs”), plaintiff GK9’s MJAR, the government’s pre-award and post-award cross-

MJARs, MSA’s cross-MJAR, and GK9’s motion to supplement the administrative record. For

the following reasons, the Court DENIES IN PART AND STAYS IN PART AMK9’s pre-

award and post-award MJARs, DENIES IN PART AND STAYS IN PART GK9’S MJAR,

GRANTS IN PART AND STAYS IN PART the government’s pre-award and post-award

cross-MJARs, GRANTS IN PART AND STAYS IN PART MSA’s cross-MJAR, and

REMANDS this case to USPS for complete investigation. While this Opinion fully considers

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and denies most of plaintiffs’ claims, it remands for the second time consideration of plaintiffs’

organizational conflict of interest (“OCI”) allegations given the continued lack of full

investigation from the contracting officer leading to several unresolved issues.

I. Background

Following the September 11th attacks, the National Commission on Terrorist Attacks

Upon the United States (“9/11 Commission”) issued a federal mandate to the Transportation

Security Administration (“TSA”) requiring “100% screening of all air cargo on passenger planes

by 2020.” Admin. R., ECF No. 23-2 (“AR”) at 3 (USPS Supply Management Competitive

Purchase Plan); see also 49 U.S.C. § 44901 (“The Administrator of the [TSA] shall provide for

the screening of all passengers and property, including United States mail, . . . that will be carried

aboard a passenger aircraft . . . .”). USPS is held to this mandate by TSA regulations under the

Aircraft Operator Standard Security Program, which includes mail over sixteen (16) ounces,

military mail, and registered mail. AR at 3. Currently, local law enforcement, funded by the

TSA, provides screening of mail delivered on airplanes. Id. at 4. Under this system, USPS has

“little, to no, oversight or ability to manage the screenings or the locations as the program is run

directly by TSA.” Id.

To grant USPS control over the package screening process and facilitate development of

a program expanding the number of sites with screening capabilities, TSA is currently

developing a policy to relieve TSA from package screening and “require the shift of the

explosives detection screening to the Postal Service.” Id. The government explained at the pre-

award MJAR oral argument this policy, called the “Mail Amendment,” is “the procedures by

which TSA would permit the screening to be done, locations, security requirements on the

ground . . . .” Transcript of 8 February 2021 Oral Argument on Cross-Motions for Judgment on

the Administrative Record (“Pre-Award OA Tr.”), ECF No. 44 at 112:15–17. The government

further described the mail amendment as follows:

TSA has regulatory authority under 49 CFR [5144] . . . to modify the procedures

for air cargo security. And using that regulatory authority for the purposes of this

new contract, the 3PK9 program, for the [P]ost [O]ffice to conduct screening, part

of that authority has set up procedures by which it would have the screening be

permitted so that it could be part of the same overall screening process that goes

onto airlines.

Id. at 111:9–17. The mail amendment is “not published in the Federal Register or CFR,” and its

contents “were only released to the specific awardee and were designated as sensitive

information.” Id. at 111:18–21. Counsel for the government explained, “USPS asked TSA

whether it would permit release of the Mail Amendment to prospective bidders in September of

2020, and TSA denied that authorization to USPS.” Id. at 108:23–25. The mail amendment was

finalized June 2020. Id. at 108:19–20.

Christopher Shelton is vice president of air cargo for MSA, and he:

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[S]erved as the Supervisory Air Marshal in Charge of the TSA Canine Training

Center. He supervised canine team training for the largest explosive detection

canine program in DHS and was responsible for training, deploying and evaluating

over 1,000 TSA and law enforcement-led canine teams for aviation, multimodal,

maritime, mass transit and cargo environments. Mr. Shelton was instrumental in

the development and implementation of the Certified Cargo Security Program –

Canine (CCSP-K9), the TSA program regulating the use of third-party canine

providers for explosive detection screening in regulated air cargo environments.

AR at 621, n.6 (citing MSA Leadership Team: Chris Shelton, MSA Sec.,

http://www.msasecurity.net/msa-leadership/msa-leadership-chris-shelton) (AMK9 Business

Disagreement). Prior to the release of the solicitation in this case, defendant-intervenor

participated in a pilot program administered by USPS. See id. at 816 (USPS Supplier

Disagreement Resolution No. SDR-21-CS-001). In October 2019, Mr. Shelton left TSA and

began working for defendant-intervenor. Id. at 621. Mr. Shelton manages defendant-

intervenor’s air cargo business line and, while at TSA, was closely involved in the development

of TSA’s canine screening program. Id.

On 14 August 2020, USPS issued a request for information (“RFI”) inviting “vendors in

the marketplace to register their interest in providing services to the USPS should the USPS

decide to develop the [3PK9-C] program.” AR at 24 (USPS RFI). The RFI was sent to seven

potential offerors “from TSA’s list of SAFETY Act certified and in-process SAFETY Act

certified organizations.” Id. at 6–7 (USPS Supply Management Competitive Purchase Plan). In

the RFI, USPS stated it was “peppering the market” regarding the “potential and ability” for

suppliers to “provide the USPS with the canines and program management necessary, should the

USPS invest in and develop a 3PK9-C program to screen cargo and mail being transported on

domestic and international passenger commercial air carriers on a nationwide basis.” Id. at 24

(RFI). If the 3PK9-C program were to be developed, the RFI stated USPS would need “an

Alarm Resolution protocol for instances when a canine alerts to a mail piece,” among other

detection, analysis, and interpretation technology services. Id. Anticipating its need for alarm

resolution services, the RFI inquired about offerors’ “capabilities around Alarm Resolution” and

“procedure for clearing Alarms.” Id. at 25.

USPS’s Competitive Purchase Plan (“CPP”) explained its need for mail screening and

resolution services. See AR at 3–4 (USPS Supply Management Competitive Purchase Plan).

Owing to the ongoing COVID-19 pandemic, Air Transportation Operations predicted “a package

shift in the global network of air carriers,” resulting in “a Peak Season shortfall on the Postal

Service’s planned capacity with FedEx.” Id. at 3. The CPP described a preference for offerors

who “have SAFETY Act certified technology and processes to provide Real-Time X-Ray

analysis and interpretation by trained bomb technicians for alarm resolution.” Id. at 7. The

government acknowledged requiring SAFETY Act certification would limit the number of

offerors who could submit responsive proposals but determined “this will not preclude diversity

in the types and sizes of offerors.” Id. The CPP reiterated such a contract “will allow the Postal

Service to control the [mail] screening process.” Id. at 4.

A. The Solicitation

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On 22 September 2020, USPS issued Solicitation No. 2B-20-A-0087 for “the

procurement of Third-Party Canine-Mail Screening with Real-Time X-ray Analysis [and]

Interpretation.” AR at 118 (Solicitation). The solicitation contemplated a four-year base period

award with two two-year renewal options. Id. at 97. The pricing method for the contract

contemplated: (1) a contract for 3PK9-C services, (2) a contract for alarm resources services, or

(3) a combined contract for both 3PK9-C services and Alarm Resolution single award. Id.

USPS specifically sought service contracts which included:

1. The services of a TSA-approved Third Party Canine-Cargo (3PK9-C teams)

explosive detection canine team offeror to screen Priority Mail and mail weighing

16 ounces or greater transported on domestic and international passenger

commercial air carriers on a nationwide basis. The offeror shall have the capability

for 3PK9-C teams to respond at the request of a USPIS Postal Inspector on a

nationwide basis . . . for investigative and preventative call-outs.

2. Alarm Resolution protocols for instances when a canine alerts to a mail piece.

The Postal Service requires a combined comprehensive improvised explosive

device (IED) screening, detection, analysis and interpretation solution which

includes technology used in conjunction with Postal Service or air transportation

offerors’ (air carriers) owned x-ray screening machines to facilitate remote alarm

resolution analysis by FBI Hazardous Device School (HDS) or Naval School

Explosive Ordinance Disposal (NAVSCOLEOD) certified bomb technicians.

Id. at 96–97.

Offerors would be evaluated under three factors: (1) capability (explosive detection

canines (“EDC”) service); (2) capability (alarm resolution); and (3) past performance. AR at

112–13. The government instructed offerors to “respond to the evaluation factors that are only

relevant to what they plan on bidding on (Evaluation Factor One or Evaluation Factor Two) in

addition to Evaluation Factor Three, which all bidders must respond to.” Id. at 77 (Solicitation).

Under the first capability factor, EDC service, an offeror would be evaluated on its “ability to

provide canine handler resources,” “ability to meet the required or proposed delivery schedules,”

“management and staffing plan,” and its “ability to obtain the necessary certifications and

security badges required at each location” relative to the SAFETY Act and Certificate of

SAFETY Act Designation. Id. at 78 (Solicitation). The second capability factor, alarm

resolution, would consider the “[o]fferor’s Alarm Resolution Plan,” the “[o]fferor’s Management

and Staffing Plan for K9’s [sic] and Handlers,” and the “[o]fferor’s Quality Assurance and

Performance Tracking Plans.” Id. The evaluation of past performance would include, but would

not be limited to, “[d]emonstrated support for the execution of canine handler teams across the

U.S.[,] including the planning and administration of such a national level program”; “[p]roven

experience in developing national level canine handler programs”; and “[o]fferor’s National

Roll-out Canine Support Experience.” Id.

The intention of the procurement was “to award one or more contracts based on a best

value determination.” AR at 56 (Statement of Work (“SOW”)), 96 (Solicitation). The

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solicitation noted USPS’s “strong preference for awarding one award that will encompass all as

[sic] requirements of the SOW,” although the USPS was “willing to consider multiple awards, if

that were determined to provide best value.” Id. at 113. First, USPS would “make a preliminary

best value decision among offerors who have proposed on the entire scope of work”; then, if

satisfied with its first best value determination, USPS would “proceed to award without further

best value considerations.” Id. In making its best value determination, USPS would consider

“whether pricing is reasonable compared to internal cost estimates and whether it is satisfied

with the overall technical abilities for the proposed awardee of the single award.” Id.

B. The Parties’ Proposals

Each offeror submitted a proposal for a “combined effort” of both the government’s EDC

services and alarm resolution services. AR at 796 (Award Recommendation). AMK9’s final

negotiated price for the contract was $[xxxxxxxxxxxxx], MSA’s price was $[xxxxxxxxxxxxx],

and GK9’s was $[xxxxxxxxxxxxx]. Id. at 794–95.

C. AMK9’s Pre-Award Business Disagreement Protest

On 5 October 2020, AMK9 filed a pre-award protest with the contracting officer (“CO”),

which USPS refers to as a “business disagreement,” challenging the terms of the solicitation and

arguing it was prejudiced by those terms. AR at 616 (AMK9 Business Disagreement). AMK9

protested on three grounds: (1) “[t]he Solicitation improperly bundles requirements for 3PK9-C

services with alarm resolution services, unduly restricting competition”; (2) “the requirements

have been written around a single offeror’s product, removing the adequate competition

requirement”; and (3) “the Solicitation includes unreasonable evaluation methods, contains

ambiguous and incomplete provisions, and implicates TSA regulations that are known only to

one offeror.” Id.

Regarding AMK9’s argument concerning the restriction of competition, AMK9 stated

“there are many offerors capable of providing 3PK9-C services, and many offerors capable of

providing Alarm Resolution, real-time x-ray analysis and interpretation,” yet “MSA is the only

offeror currently providing 3PK9-C and Alarm Resolution services.” Id. at 622. AMK9

described the government’s preference for bundling of services as a “subjective and self-serving

determination that a single contract for both services provides the ‘best value.’” Id.

AMK9 also argued the evaluation methodology unreasonably favored the award of a

single contract, noting language from the solicitation: “The Postal Service will first make a

preliminary best value decision among offerors who have proposed on the entire scope of work.

Should the Postal Service be satisfied with that best value determination, it will proceed to award

without further best value consideration.” Id. at 623 (citing Solicitation) (emphasis omitted).

AMK9 understood this language to mean “if there is an offer that can meet the requirements to

provide both 3PK9-C and Alarm Resolution services, the agency will not even consider the

comparative value of 3PK9-C services from other offerors who cannot meet or choose not to bid

on the Alarm Services requirement.” Id.

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AMK9 also observed the government admitted the requirement for alarm resolution

services constituted a “novel process.” AR at 623. AMK9 then noted the solicitation was

amended eight days after publication, “to increase the value of Alarm resolution experience.” Id.

at 624. AMK9 challenged the logic of increasing the significance of past performance providing

alarm resolution services “given that the agency admits the services constitute a ‘novel process.’”

Id. The solicitation also provided, “USPS reserves the right to contact some, all, or none of the

Offerors for clarifications or additional explanations concerning their respective proposals.” Id.

(citing Solicitation). AMK9 argued this language granted the government a patently unfair,

arbitrary, and capricious process to “give certain offerors opportunity to clarify or explain [their]

proposal, . . . without affording all offerors the same opportunity.” Id.

AMK9’s final ground for protest argued both the solicitation wrongly excluded the mail

amendment and MSA had an OCI. Id. at 625. According to the solicitation offerors were to be

compliant with TSA standard certifications for 3PK9-C mail screening, as prescribed in the mail

amendment; however, “neither the agency nor TSA are making the Mail Amendment available

until after award.” Id. AMK9 stated only one offeror, defendant-intervenor, “has some insight

into the provisions of the Mail Amendment” because its vice president of air cargo, Mr. Shelton,

“previously worked for TSA and helped to develop the 3PK9 mail screening program.” Id.

AMK9 asserted this meant “MSA has an organizational conflict of interest to the extent Mr.

Shelton has knowledge about the Mail Amendment that no other offeror has.” Id. Defendant-

intervenor also obtained nonpublic information, according to AMK9, when it participated in the

pilot program for 3PK9 mail screening. Id. AMK9 concluded the “requirements of Section

3.2.1 of the SOW are in direct conflict with the agency’s answers to questions, creating a patent

ambiguity.” Id. AMK9 requested the government sustain its protest and recommended a reissue

of the solicitation to procure 3PK9-C services separately from alarm resolution services and

provide all offerors with the mail amendment. Id. at 626.

In support of this OCI challenge, AMK9 cited defendant-intervenor’s public website,

which provides the following biography for Mr. Shelton and lists him as “Vice President, Air

Cargo”:

Mr. Shelton is a 17-year veteran with the Federal Air Marshal Service (FAMS), a

United States federal law enforcement agency under the supervision of the

Transportation Security Administration (TSA) of the United States Department of

Homeland Security (DHS). During his tenure with FAMS, Mr. Shelton served as

the Supervisory Air Marshal in Charge of the TSA Canine Training Center. He

supervised canine team training for the largest explosive detection canine program

in DHS and was responsible for training, deploying and evaluating over 1,000 TSA

and law enforcement-led canine teams for aviation, multimodal, maritime, mass

transit and cargo environments. Mr. Shelton was instrumental in the development

and implementation of the Certified Cargo Security Program – Canine (CCSP-K9),

the TSA program regulating the use of third-party canine providers for explosive

detection screening in regulated air cargo environments. With a long-time passion

for security and explosive detection canines, Mr. Shelton began his career with a

decade of service as a municipal law enforcement officer.

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AR at 621, n.6 (citing MSA Leadership Team: Chris Shelton, MSA Sec.,

http://www.msasecurity.net/msa-leadership/msa-leadership-chris-shelton). AMK9 also cited

another public website’s announcement of Mr. Shelton joining defendant-intervenor, which

stated:

Shelton joins MSA following 17 years with the TSA’s Federal Air Marshal Service,

where he most recently served as the Supervisory Air Marshal in Charge of the

TSA Canine Training Center, overseeing canine team training for the largest

explosive detection canine program in the Department of Homeland Security. He

was responsible for training, deploying, and evaluating over 1,000 TSA and law

enforcement-led canine teams for aviation, multimodal, maritime, mass transit and

cargo environments. Over the past several years, Shelton was instrumental in the

development of the Certified Cargo Security Program – Canine (CCSP-K9), the

TSA program regulating the use of third-party canines for explosive detection

screening in regulated air cargo environments.

Id. at 621 n.7 (citing TSA Canine Training Specialist Joins MSA Security, Homeland Sec. Today

(Oct. 8, 2019), https://www.hstoday.us/industry/tsa-canine-training-specialist-chris-joins-msa-

security/). Additionally, AMK9 noted defendant-intervenor “has developed a ‘Patented

Advanced Alarm Resolution (AAR) process’ specifically ‘for the Air Cargo Industry . . . to

address the Alarm Resolution process that will be included in the expected implementation of the

TSA 3rd Party Canine Program, set for release in early fall.’ Notwithstanding MSA’s

expectations that TSA would implement Alarm Resolution into the 3PK9 program, to date no

such program exists.” Id. (emphasis and internal citations omitted).

D. USPS’s Pre-Award Investigation of Defendant-Intervenor’s Potential OCI

On 8 October 2020, a USPS CO contacted MSA to request a response concerning

whether an OCI existed, noting Mr. Shelton, one of MSA’s “[xxxxxxxxxxxxxxxxxxxxxx], . . .

was a TSA employee who had a supervisory role at the TSA Canine Training Center and was

involved in the USPS canine screening pilot program, both from the perspective of TSA rules

and regulations and approvals of USPS processes in the pilot program.” AR at 614 (Email from

CO Jeremy Baker, USPS, to Gerald Goss, MSA). Less than an hour later, an executive at MSA

replied:

Regarding the matter of potential OCI, MSA gave that topic thoughtful

consideration and determined it not to be an issue based on the following; [sic]

Mr. Shelton was not in Phoenix and didn’t witness or plan the pilot testing. While

he was at the TSA, he was responsible for training. TSA personnel at the pilot were

focused on regulatory and compliance, functions that did not report to Mr. Shelton.

Mr. Shelton conferred with TSA attorneys upon exiting the Agency and no

restrictions were placed upon him in coming to MSA.

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Id. at 613 (Email from Gerald Goss, MSA, to CO Jeremy Baker, USPS). USPS concluded a

“medium” level of conflict of interest may exist for MSA, stating: “Medium—The contracting

officer contacted MSA on the employment history concerning one of its employees. MSA

provided a response which addressed the matter. The contracting officer does not view there is

[sic] a conflict of interest.” Id. at 798 (Award Recommendation). The Court later discovered

during a status conference Mr. Shelton also “received an exit letter when he left TSA with

respect to whether there were conflicts,” which the government reports to be the product of “an

investigation by or at least a review by TSA officials, including their ethics office.” See infra

discussion regarding 16 February 2021 Status Conference. 16 February 2021 Status Conference

Transcript (“SC Tr.”), ECF No. 47 at 13:16–20. The government stated it is not “aware of” any

prohibition on the CO requesting an exit letter from TSA. Id. at 14:21–25.

E. CO’s Resolution of AMK9’s Pre-Award Business Disagreement

On 15 October 2020, the CO denied AMK9’s business disagreement in its entirety. AR

at 627 (CO Resolution of AMK9’s Pre-Award Business Disagreement). The CO defended the

government’s stated preference for one supplier over two because the services “are

interdependent pieces of the two step screening process. Effective and efficient interoperability

between the K9 detection and technological alarm resolution serves both to support airline safety

and law enforcement efforts the Inspection Service may need to undertake in relation to suspect

pieces.” Id. at 627–28. The CO further justified the single supplier preference as stemming

“from inefficient and inconsistent results with respect to alarm clearing under the current

screening methods . . . . A single integrated solution is most likely to ensure smooth program

administration . . . .” Id. at 628.

In response to AMK9’s argument only one offeror could satisfy the government’s single-

supplier preference, the CO clarified USPS received “numerous responses to its Solicitation, in

which a fully integrated solution to the entire Statement of Work was offered.” Id. The CO also

explained USPS modified the past performance factor because the government mistakenly

removed the alarm clearing portion of the SOW as an element for past performance

consideration; the government wanted to ensure receipt of past performance data from offerors

for both portions of the SOW, not just one. Id. at 629. Responding to AMK9’s final evaluation

method argument, the CO noted while “clarifications may occur when necessary,” such

clarifications “[do] not indicate that unfair treatment will occur during the evaluation process.”

Id.

Regarding AMK9’s argument USPS’s alarm resolution solicitation was duplicative of

existing airline processes, the CO explained, “airlines are not present at all of our locations

where mail will be screened.” Id. at 628. The CO responded to AMK9’s argument USPS’s

withholding of the mail amendment created unfair competition by explaining USPS did not have

the authority to release TSA’s mail amendment, nor did TSA provide USPS with authorization to

release the mail amendment when USPS sought such authorization. Id. at 630. Relatedly,

regarding the OCI issue, the CO stated Mr. Shelton “had no role in the TSA regulatory and

compliance function, which would have been involved in Mail Amendments.” Id.

F. AMK9’s Request for Final Resolution and the Government’s Decision

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If USPS does not resolve a business disagreement to a supplier’s satisfaction, the supplier

may appeal to a higher official, the Supplier Disagreement Resolution Official (“SDRO”), for

“final resolution of the matter.” 39 C.F.R. § 601.108(a). On 23 October 2020, AMK9 requested

final resolution of its pre-award business disagreement challenging the terms of the solicitation.

AR at 632 (Request for Final Resolution). AMK9 set forth the same grounds in its request for

final resolution as it did in its initial business disagreement with the CO: “[t]he solicitation is

unduly restrictive”; “[t]he solicitation prescribes an unreasonable evaluation method”; and “[t]he

solicitation contains incomplete provisions.” Id. at 638–41. On 27 November 2020, the USPS

SDRO informed AMK9 they “reviewed the matter and conclude[d] that AMK9 has not raised

any valid challenges to the Solicitation” and therefore “decid[ed] to deny AMK9’s business

disagreement.” AR at 816 (AMK9 Pre-Award SDRO decision).

The SDRO found AMK9 offered little support beyond “conclusory allegations that the

bundling was either improper or unfairly restricted competition.” Id. at 813. The SDRO also

found the government’s preference for a single supplier to be appropriate because no law or

regulation limits USPS COs from including two interdependent services under one contract;

further, “[a]ll offerors were permitted to subcontract any portion of the work they could not self-

perform.” Id. at 814. The SDRO also confirmed the CO’s explanation regarding the mail

amendment, stating AMK9’s argument “assumes that the Postal Service had the ability to

disclose the Mail Amendment to offerors, a false assumption that the CO already corrected.” Id.

at 816. According to the SDRO, because no offeror had access to the mail amendment, AMK9

could not have suffered prejudice from the nondisclosure. Id. The SDRO also dismissed

AMK9’s allegations regarding defendant-intervenor’s acquisition of nonpublic information and

any OCI: “the Mail Amendment was not finalized until after the conclusion of MSA’s pilot

program with the Postal Service, and AMK9 offers no support for its allegation that Mr. Shelton

had access to the Mail Amendment while employed with TSA.” Id. For the above reasons, the

SDRO denied AMK9’s pre-award business disagreement. Id.

G. Technical Evaluation Team Findings

On 6 November 2020, the Technical Evaluation Team’s (“TET”) award recommendation

presented MSA’s proposal to be the absolute best value. AR at 796 (Award Recommendation).

AMK9’s proposal ranked fourth and GK9’s proposal ranked second. Id. MSA’s technical

evaluation consensus was rated “Excellent,” and its past performance rated “Very Good.” Id. at

780. In comparison, AMK9’s technical evaluation consensus was rated “Fair,” and its past

performance rated “Good.” Id. GK9’s technical evaluation consensus and past performance

rated “Good.” Id. MSA was rated “Excellent” under the first factor, EDC service capability,

while AMK9’s first factor rating was “Fair” and GK9’s was rated “Good.” Id. To provide EDC

service, AMK9 would need to recruit handlers and acquire SIDA [Security Identification Display

Area] badging to allow those handlers on airport grounds, and “[r]ecruitment deficiencies raise

the risk of a delay in meeting the roll-out schedule.” Id. at 785. Under the second factor, alarm

resolution services, MSA was rated “Excellent.” AR at 780. AMK9’s second factor proposal

was rated only “Fair,” in part because it did not illustrate “the usage of [AMK9’s] alarm

resolution technology that meets the requirements of the SOW.” Id. at 787. GK9 rated “Fair” on

the second factor because evaluators viewed GK9’s technology as possibly unreliable and easily

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distorted. AR at 786–87. For the past performance factor, MSA was the only offeror to be rated

“Very Good.” Id. at 780. AMK9’s past performance was rated “Good” as it demonstrated “its

proven experience in national screening, national level Alarm Resolution, and national level roll-

out support.” Id. at 788. The TET, however, found no clear explanation of how AMK9

previously provided alarm resolution technology nationwide nor how it implemented alarm

resolution services. Id. GK9’s past performance was rated “Good” for GK9’s demonstrated

history of operations at 33 airports, although GK9 did not provide an explanation of its past

experience in national alarm resolution technology roll-outs. Id.

H. Contract Award

Each of the seven offerors submitted a proposal for combined 3PK9-C services and alarm

resolution services, but MSA was recommended for the award as the CO determined MSA

“provide[d] the best tradeoff between technical, risk, and price.” AR at 805 (Award

Recommendation). On 9 November 2020, USPS informed AMK9 and GK9 it awarded the

contract to MSA. See AMK9 Am. Compl., Ex. 1, ECF No. 20-1 at 2 (Attachments to AMK9

Amended Complaint); GK9 Am. and Restated Compl., ECF No. 82 at 5 (GK9 Amended

Complaint).

I. AMK9’s Post-Award Administrative Dispute and Appeal

AMK9 filed a post-award business disagreement with USPS on 27 November 2020,

challenging the award of the contract to defendant-intervenor. AR at 1976–90. AMK9 alleged

an “unreasonable and inconsistent” evaluation of its proposal and “clear Organizational Conflicts

of Interest that should have warranted MSA’s removal from consideration for award.” Id. at

1976. AMK9 further alleged USPS used an “unstated evaluation factor” to evaluate AMK9’s

proposal, assigned “unreasonable” weakness to AMK9’s proposal, “ignored portions of AMK9’s

proposal,” conducted an unreasonable tradeoff analysis, and “failed to consider the

Organizational Conflict of Interest.” Id. at 1976–90. The CO denied AMK9’s post-award

business disagreement on 7 December 2020. Id. at 1991–97. On 17 December 2020, AMK9

appealed to the SDRO, who denied the appeal on 21 April 2021. Id. at 1999, 2017–26.

J. GK9’s Administrative Dispute and Appeal

On 30 November 2020, GK9 filed a post-award business disagreement with USPS. AR

at 1937–45. GK9 disputed USPS’s effective identification, and resolution, of an “obvious” OCI

involving MSA. Id. at 1942–44. GK9 further alleged USPS improperly evaluated technical

aspects of its proposal, including aspects related to x-ray technology, the number of command

center locations, past rollouts, and projected staffing to meet the rollout schedule. Id. at 1944.

The USPS CO denied GK9’s post-award business disagreement on 10 December 2020. Id. at

1946–51. On 17 December 2020, GK9 appealed the CO’s denial to the USPS SDRO. Id. at

1952–63. On 13 April 2021, the SDRO denied GK9’s appeal. Id. at 1964–72.

II. Procedural History Before This Court

A. Pre-Remand

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On 18 November 2020, AMK9 filed its pre-award complaint in this bid protest, its

motion to seal the complaint, and a proposed redacted complaint. See AMK9 Pre-Award

Compl., ECF No. 1; Mot. for Leave to File Under Seal, ECF No. 2; AMK9 Pre-Award Proposed

Redacted Compl., ECF No. 3. On 20 November 2020, MSA filed a motion to intervene. See

Mot. by Michael Stapleton Associates, Ltd. to Intervene as Def., ECF No. 10. The Court held an

initial telephonic scheduling conference on 23 November 2020, and, on the same day, the Court

filed an order granting MSA’s motion to intervene, granting AMK9’s motion for leave to file the

complaint under seal, and ordering the government to file a status report updating the Court on

the SDRO’s then-pending decision on AMK9’s pre-award appeal within USPS. Order, ECF No.

13. On 24 November 2020, AMK9 filed a motion for protective order, which the Court granted

on the same day. See Unopposed Mot. for Protective Order, ECF No. 14; Order, ECF No. 15.

The government filed a status report on 27 November 2020 reporting the SDRO issued a

decision on the same day. See Def.’s Status Report, ECF No. 16.

On 1 December 2020, AMK9 and the government filed a joint status report with separate

proposed schedules for further proceedings, with AMK9 noting it “intends to file a request for a

temporary restraining order and a preliminary injunction.” Joint Status Report ECF No. 18 at 4.

The Court issued a scheduling order on 2 December 2020. See Order, ECF No. 19. On 3

December 2020, AMK9 filed an amended complaint and a motion for TRO and preliminary

injunction. See AMK9 Am. Compl., ECF No. 20; Pl.’s Mot. for a TRO and Prelim. Injunction,

ECF No. 21. The Court held a status conference on AMK9’s motion for TRO and preliminary

injunction on 4 December 2020. See Order, ECF No. 19. On 7 December 2020, the Court

issued a scheduling order maintaining the previously agreed deadline for the government to file

the administrative record and noting both “AMK9 agreed [at the 4 December status conference]

for its motion for TRO and PI to be construed only as a motion for PI” and the parties agreed to

meet and confer to discuss the need for, and details of, a preliminary injunction hearing and to

propose an MJAR briefing schedule. Order, ECF No. 22 at 1. On 9 December 2020, the Court

stayed AMK9’s motion for preliminary injunction and TRO and set the schedule for MJAR

proceedings. See Order, ECF No. 25. On 21 December 2020, AMK9 filed its pre-award MJAR.

See Pl.’s Mot. for J. on the Admin. Record, ECF No. 27 (“AMK9 Pre-Award MJAR”). MSA

filed a response to AMK9’s MJAR on 8 January 2021. See Def.-Intervenor MSA’s Resp. to Pl.’s

Mot. for J. on the Admin. Record, ECF No. 31 (“MSA Pre-Award Resp.”). The government

filed an HSD-redacted response to AMK9’s pre-award MJAR and cross-MJAR on 15 January

2021. See Def.’s Resp. to Pl.’s Mot. for J. on the Admin. Record and Cross-Mot. for J. on the

Admin. Record, ECF No. 36 (“Gov’t Pre-Award Cross-MJAR”). On 15 January 2021, AMK9

filed its response to the government’s cross-MJAR and reply in support of its MJAR. See Pl.’s

Resp. to the Cross-Mot. for J. on the Admin. Record and Reply in Supp. of Pl.’s Mot. for J. on

the Admin. Record, ECF No. 37 (“AMK9 Pre-Award Resp.”). On 22 January 2021, the

government filed a reply in support of its cross-MJAR. See Def.’s Reply in Supp. of its Cross-

Mot. for J. on the Admin. Record, ECF No. 39 (“Gov’t Pre-Award Reply”).

On 8 February 2021, the Court held a sealed oral argument via Zoom on the parties’ pre-

award cross-MJARs. See Order, ECF No. 29. On 16 February 2021, the Court held a sealed in-

person status conference to discuss HSDs, during which the Court ordered the government to file

a joint status report on or before 22 February 2021. See Order, ECF No. 45. On 23 February

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2021, AMK9 filed a pre-filing notice for a potential post-award bid protest related to its pre-

award protest. On 2 March 2021, AMK9 filed a sealed motion for evidentiary hearing and

request for status update on administrative matters, which included in part a request the Court

issue an order requiring the government to show cause for why it “has not yet filed a redacted

transcript of the February 16, 2021” status conference. Mot. for Evidentiary Hearing and

Request for Status Update on Admin. Matters (“Mot. for Evidentiary Hearing”), ECF No. 46 at

1–2. On 5 March 2021, the Court ordered the government to file sealed HSD-removed versions

of the 16 February 2021 status conference transcript and the 22 February 2021 joint status report

(“JSR”). See Order, ECF No. 48. Later the same day, the government filed a sealed proposed

redacted status conference transcript and a sealed proposed redacted JSR. See SC Tr.; Joint

Status Report, ECF No. 49. On 8 March 2021, the Court remanded this case with instructions

for the CO to review specific items related to the OCI investigation into defendant-intervenor

and Mr. Shelton. See Opinion and Order, ECF No. 55 (“Remand Order”). On 1 April 2021,

GK9 submitted pre-filing notice of its post-award bid protest.

B. Post-Remand

On 2 April 2021, the CO issued his post-remand review, entitled “Contracting Officer

Organizational Conflict of Interest (OCI) Review Pursuant to Court of Federal Claims Remand.”

AR at 1862–69. On 14 May 2021, GK9 and the government filed a joint motion to consolidate

the hearing on GK9’s motion for preliminary injunction with the Court’s consideration of the

merits of AMK9’s bid protest, which the Court granted on the same day. See Joint Mot. to

Consolidate Hearing on Mot. for Prelim. Inj. with the Court’s Consideration of the Merits, ECF

No. 79; Order, ECF No. 80. On 19 May 2021, GK9 filed an amended complaint and a post-

award MJAR. See Am. and Restated Compl., ECF No. 82; Global K9 Protection Group, LLC’s

Mot. for J. on the Administrative R. and Incorporated Br., ECF No. 83 (“GK9 MJAR”). AMK9

filed a post-award MJAR on the same day. See Plaiontiff’s[sic] Mot. for J. on the Administrative

R., ECF No. 84 (“AMK9 Post-Award MJAR”). On 20 May 2021, the government filed a sealed

motion to strike GK9’s amended complaint and post-award MJAR and AMK9’s post-award

MJAR. See Def.’s Mot. to Strike Am. Compl. and Mots. for J. on the Administrative R., ECF

No. 85. The Court denied the government’s motion to strike on 28 May 2021. See Order, ECF

No. 92.

On 1 June 2021, the government filed its response to AMK9 and GK9’s motions for

judgment on the administrative record and cross-motion for judgment on the administrative

record. See Def.’s Resp. to Pls.’ Mots. for J. on the Admin. Record and Cross-Mot. for J. on the

Admin. Record, ECF No. 93 (“Gov’t Post-Award Cross-MJAR”). Also on 1 June 2021, MSA

filed a response to AMK9 and GK9’s motions for judgment on the administrative record and

cross-motion for judgment on the administrative record. See Def.-Intervenor’s Cross-Mot. for J.

on the Admin. Record, ECF No. 94 (“MSA Post-Award Cross-MJAR”). GK9 filed its response

to MSA and the government’s cross-MJARs and its reply in support of its MJAR on 5 June

2021. See Global K9 Protection Group, LLC’s Reply and Resp. to Defs.’ Mots. for J. on the

Admin. Record, ECF No. 96 (“GK9 Resp.”). Also on 5 June 2021, AMK9 filed its response to

MSA and the government’s cross-MJARs and its reply in support of its MJAR. See Pls. AMk9’s

Resp. to the Cross-Mots. for J. on the Admin. Record and Reply in Supp. of its Mot. for J. on the

Admin. Record, ECF No. 97 (“AMK9 Post-Award Resp.”). The government filed a reply in

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support of its cross-MJAR on 10 June 2021. See Def.’s Reply in Supp. of its Cross-Mot. for J.

on the Admin. Record, ECF No. 100. MSA also filed a reply in support of its cross-MJAR on 10

June 2021. See Def.-Intervenor MSA’s Reply for J. on the Admin. Record, ECF No. 101. On 22

June 2021 the Court held in-person oral argument on the post-award cross-MJARs. See Order,

ECF No. 102.

III. USPS Remand OCI Investigation

On 8 March 2021, the Court remanded the case to USPS and directed the CO to “reopen

the OCI investigation into defendant-intervenor and Mr. Shelton according to guidelines

provided by the SP&Ps and reassess a complete and documented review of the OCI.” See

Remand Order at 32. The Court instructed the CO to reexamine the case to consider records he

previously did not fully investigate, including Mr. Shelton’s TSA exit letter, communications

between USPS and TSA, and any other additional evidence viewed as necessary to determining

MSA’s potential OCI. See id.1

Following remand, the CO noted in his remand investigation analysis that he conducted

“a much more thorough review of the potential OCI.” AR at 1869. As part of the remand

investigation, the CO reviewed Mr. Shelton’s TSA exit clearance memorandum, reviewed the

record of communications between USPS and TSA, and questioned MSA about the website’s

description of Mr. Shelton’s experience. Id. at 1863–69 (USPS CO’s OCI Review Following

Remand). The CO acknowledged Mr. Shelton may have been involved in drafting the mail

amendment throughout “TSA’s policy development process,” but stated Mr. Shelton was “not

directly involved in creating the mail amendment or other TSA regulations relating to mail.” Id.

at 1865–66, 1869. The CO also determined, “[w]ith respect to Mr. Shelton’s post-employment

ethics advice received from TSA, Mr. Shelton and TSA had different recollections.” Id. at 1866.

The CO nonetheless stated the TSA and Mr. Shelton are “essentially in agreement regarding Mr.

Shelton’s work at TSA.” Id. at 1864. The CO concluded, although MSA was issued a mail

amendment, the mail amendment did not create an unfair competitive advantage for MSA, there

was no evidence Mr. Shelton committed an ethics violation, and there was no evidence offerors

were prejudiced by not having access to the mail amendment. Id. at 1869.

IV. Legal Standards

A. Bid Protest Jurisdiction & APA Standard of Review

The Tucker Act provides this Court jurisdiction to “render judgment on an action by an

interested party objecting to a solicitation by a Federal agency for bids or proposals for a

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

statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S.C.

§ 1491(b)(1). To be an interested party, a protestor must show that it is an “actual or prospective

bidder or offeror whose direct economic interest would be affected by the award or failure to

award the contract.” PDS Consultants, Inc. v. United States, 907 F.3d 1345, 1356 (Fed. Cir.

2018) (internal quotation marks and citations omitted).

1

The Court discusses its Remand Order in greater detail in the OCI section, VIII. B. infra.

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In rendering such judgment, this Court “review[s] the agency’s decision pursuant to the

standards set forth in section 706 of title 5” of the Administrative Procedure Act (“APA”).

Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir.

2001) (citing 28 U.S.C. § 1491(b)(4)) (internal quotation marks omitted). “Among the various

APA standards of review in section 706, the proper standard to be applied in bid protest cases is

provided by 5 U.S.C. §706(2)(A): 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.’”

Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1350–51 (Fed. Cir. 2004) (citing

Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057–58 (Fed. Cir. 2000)).

Under this standard, “a court is not to substitute its judgment for that of the agency.” Motor

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

“Courts have found an agency’s decision to be arbitrary and capricious when the agency ‘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 [the decision] is so implausible that it could

not be ascribed to a difference in view or the product of agency expertise.’” Ala. Aircraft Indus.,

Inc.-Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting Motor Vehicle

Mfrs. Ass’n, 463 U.S. at 43). “The arbitrary and capricious standard . . . is highly deferential”

and “requires a reviewing court to sustain an agency action evincing rational reasoning and

consideration of relevant factors.” Advanced Data Concepts, 216 F.3d at 1058 (citing Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974)).

MSA previously argued the Court has jurisdiction under the APA according to Scanwell

Laboratories v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970). See Pre-Award OA Tr. at 14:24–16:25.2

All parties now agree this Court has jurisdiction pursuant to the Tucker Act. See AMK9 Post-

Award MJAR at 14; GK9 MJAR at 11; Gov’t Post-Award Cross-MJAR at 17; MSA Post-Award

Cross-MJAR at 13; Transcript of 22 June 2021 Oral Argument on Cross-Motions for Judgment

on the Administrative Record, ECF No. 104 (“Post-Award OA Tr.”) at 81:15–17 (Counsel for

MSA agreeing MSA “no longer suggests the Scanwell jurisdiction.”). As stated in the Remand

Order, “jurisdiction in this USPS bid protest [is] pursuant to the Tucker Act as amended by the

ADRA, which ‘subsumed’ Scanwell APA jurisdiction.” Remand Order at 14 (citing 28 U.S.C.

§ 1491(b)(1)).

B. USPS SP&Ps

As the Court previously concluded, “[t]he text of the SP&Ps is clear they only provide

guidance and are not binding regulations.” Remand Order at 17. This Court stated:

Even assuming arguendo the SP&Ps are binding, the SP&Ps related to OCI are not

binding, as the Federal Circuit is clear even the OCI provisions of the FAR, a

binding regulation, are to be treated under Domencio Garufi’s first “arbitrary and

2

THE COURT: [Y]our argument . . . seems to assume that this Court is hearing the case under the APA according

to Scanwell jurisdiction rather than according to the Tucker Act. Is it your argument, then, that this is a Scanwell

case rather than a Tucker Act case?

DEFENDANT-INTERVENOR: Yes, it is, Your Honor.

Pre-Award OA Tr. at 14:24–15:6.

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capricious” or “rational basis” standard, rather than its second “violation of

regulation or procedure” ground, owing to “the discretion given to COs” and the

Federal Circuit’s wish for this Court [to] avoid “trigger[ing] de novo review.”

Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374,1381–82 (Fed. Cir. 2009).

Id. The Court reviews whether the USPS CO’s “decision lacked a rational basis” according to

guidance from the SP&Ps, rather than treating the SP&Ps as binding regulations. Domenico

Garufi, 238 F.3d at 1332; see also Pre-Award OA Tr. at 25:12–26:20 (Government counsel

arguing: “The Court is always engaging in a rational basis of review. We do not believe that the

specific language of the SP&Ps is binding such that the SP&Ps are treated as a regulation or

procedure that a deviation from would automatically constitute a failure under an APA review.”).

C. Judgment on the Administrative Record in a Bid Protest

RCFC 52.1(c) “provides for judgment on the administrative record.” Huntsville Times

Co. v. United States, 98 Fed. Cl. 100, 104 (2011). Rule 52.1(c) was “designed to provide for trial

on a paper record, allowing fact-finding by the trial court.” Bannum, Inc. v. United States, 404

F.3d 1346, 1356 (Fed. Cir. 2005).

This Court may set aside a contract award if: “(1) the procurement official’s decision

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

procedure.” Domenico Garufi, 238 F.3d at 1332. In pre-award protests, a plaintiff must

demonstrate “that it suffered a ‘non-trivial competitive injury which can be addressed by judicial

relief.’” Orion Tech., Inc. v. United States, 704 F.3d 1344, 1348 (Fed. Cir. 2013) (citing Weeks

Marine, Inc. v. United States, 575 F.3d 1352, 1361 (Fed. Cir. 2009)). A post-award bid protest

plaintiff must establish “errors in the procurement process significantly prejudiced [the

plaintiff]” by showing “there was a ‘substantial chance’ it would have received the contract

award but for the errors.” Bannum, Inc., 404 F.3d at 1353 (quoting Info. Tech. & Applications

Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003)).

“Contracting officers are not obligated by the APA to provide written explanations for

their actions,” and agency decisions are “entitled to a presumption of regularity.” Domenico

Garufi, 238 F.3d at 1337–38. There is a “strong presumption that government officials act

correctly, honestly, and in good faith when considering bids.” Savantage Fin. Servs., Inc. v.

United States, 86 Fed. Cl. 700, 703 (2009), aff’d, 595 F.3d 1282 (Fed. Cir. 2010). “Given the

presumption of regularity and good faith, a heavy burden rests upon [a plaintiff] to demonstrate

that [an] absence of documentation reflects a failure to perform the organizational conflict of

interest review.” Beta Analytics Int’l, Inc. v. U.S., 61 Fed. Cl. 223, 228 (2004) (citing Domenico

Garufi, 238 F.3d at 1338).

“Hard facts” and “concreteness” are necessary to show a contracting officer’s OCI

determination lacked a rational basis under the APA’s arbitrary and capricious standard;

“sufficient alignment of interests,” “vague allegations,” “mere suspicion and innuendo” are not

enough. Turner Constr. Co. v. United States, 645 F.3d 1377, 1385 (Fed. Cir. 2011) (internal

quotation marks omitted). “‘[H]ard facts’ do not need to show an actual conflict—a potential

conflict can be sufficient.” Id. at 1387. “An ‘unequal access to information’ conflict occurs

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when a government contractor has access to non-public information in connection with

performance of a government contract that may afford a competitive advantage in subsequent

competition for a government contract.” Axiom Res. Mgmt., 564 F.3d at 1377 n.1.

For a plaintiff alleging bias “to overcome the presumption of good faith [on behalf of the

government], the proof must be almost irrefragable.” Galen Medical Associates, Inc. v. United

States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (citing Info. Tech. Applications, 316 F.3d at 1323

n.2). “Almost irrefragable proof” amounts to “clear and convincing evidence.” Am-Pro

Protective Agency, Inc. v. United States, 281 F.3d 1234, 1239–40 (Fed. Cir. 2002) (“[W]e must

determine if a reasonable fact finder could find, by clear and convincing evidence, that the CO

did not act in good faith.”). “In the cases where the court has considered allegations of bad faith,

the necessary ‘irrefragable proof’ has been equated with evidence of some specific intent to

injure the plaintiff.” Galen, 369 F.3d at 1330 (citing Torncello v. United States, 231 Ct. Cl. 20,

45 (1982)).

D. Relief

Mitigation actions contemplated by the SP&Ps “may include, but are not limited to”:

(a) developing a solicitation provision restricting competition to offerors without

conflicts of interest, (b) including a contract clause limiting the supplier’s eligibility

for future contracts and subcontracts, and (c) the adoption of other measures to

ensure as fair a competition as possible. Any limit on future contracts must be for

a reasonable period sufficient to avoid unfair competitive advantage or potential

bias.

SP&P 7-15.2.1. The SP&Ps further guide: “If it becomes apparent when proposals are received

that participation by a particular offeror could lead to an organizational conflict of interest and

unfair competition, the offeror may be disqualified and its proposal rejected. The contracting

officer may take actions necessary and in the interest of the Postal Service and the offerors, to

avoid, neutralize or mitigate the potential or apparent conflict of interest.” Id.

When deciding whether a permanent injunction is warranted, a court considers:

(1) whether, as it must, the plaintiff has succeeded on the merits of the case; (2)

whether the plaintiff will suffer irreparable harm if the court withholds injunctive

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

of injunctive relief; and (4) whether it is in the public interest to grant injunctive

relief.

PGBA, LLC v. United States, 389 F.3d 1219, 1228–29 (Fed. Cir. 2004).

V. USPS’s Allegations of Special Treatment Within Government Contracting

Amongst other arguments, the government asserts USPS reserves the discretion to waive

“minor informalities” in keeping with its “business-oriented procurement process.” Post-Award

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OA Tr. at 20:1–13; see also Gov’t Post-Award Cross-MJAR at 8. The government claims

special treatment status for the Postal Service on the basis of the Postal Reorganization Act and

internal guidance, arguing USPS is a more “businesslike” organization and that its procurement

process, separate and distinct from the Federal Acquisitions Regulation, affords additional

leeway. Post-Award OA Tr. 21:10–16.

The agency created the Supplying Principles and Practices (“SP&Ps”) in May 2006

(revised June 2020) to guide the procurement process in a “business oriented” direction. UNITED

STATES POSTAL SERVICE, SUPPLYING PRINCIPLES AND PRACTICES (2020) (“USPS SP&Ps”) at a,

3. According to USPS, the SP&Ps are not “binding regulations” on the USPS, but instead act as

a “guide” for “obtaining [the] best value and efficiency.” Id. at 3. Thus, the SP&Ps do not

create “rights, substantive or procedural, enforceable against the Postal Service.” Id. Further,

“[t]he Postal Service may reject any or all offers if such action is in the best interest of the Postal

Service; accept other than the lowest offer, [sic] and waive informalities and minor irregularities

in offers received.” Id. at 484.

The solicitation’s “Instructions and Evaluation Criteria” reiterates USPS’s flexibility to

“waive minor informalities and irregularities in the proposals it receives.” AR at 214

(Solicitation). The government proposes font size as an example of “the type of informality that

USPS explicitly reserved the right to waive in the Solicitation.” Gov’t Post-Award Cross-MJAR

at 27. The solicitation does not define the terms “informality,” “minor defect,” or “irregularity.”

The SP&Ps further do not define these terms, nor do the SP&Ps offer guidance on discretionary

acceptance of solicitations.

The government asserts USPS’s special treatment status under 39 U.S.C. § 410(a) offers

USPS the discretion to approve or deny without oversight. See Gov’t Post-Award Cross-MJAR

at 20. Reviewing various USPS procurement cases, the Court notes this is not the first time the

government has generally sought special treatment for USPS. See, e.g., Emery Worldwide

Airlines, Inc. v. United States, 264 F.3d 1071, 1083 (Fed. Cir. 2001) (“[T]he government’s

position amounts to an argument that no judicial forum is available to review USPS pre-award

government contract protests.”); Banknote Corp. of America, Inc. v. United States, 365 F.3d

1345, 1357 (Fed. Cir. 2009); Asia Pac. Airlines v. United States, 68 Fed. Cl. 8, 21 (2005). In

Emery, the Federal Circuit reviewed a bid protest decision in which the USPS argued this court

lacked subject matter jurisdiction because USPS is not a “federal agency” for purposes of the

Tucker Act. Emery Worldwide Airlines, 264 F.3d at 1075. The Federal Circuit rejected USPS’s

argument, holding USPS was a federal agency and thus subject to the government contract

procurement protest jurisdiction of this court. Id. at 1081. In Banknote, the Federal Circuit

acknowledged the different standards under the Purchasing Manual, a precursor to the SP&Ps, as

compared to the Federal Acquisitions Regulation. Banknote Corp. of America, 365 F.3d at 1349

n.1 (“The Purchasing Manual, not the Federal Acquisition Regulations (FAR), applies to USPS

procurements.”). Nonetheless, in holding for the government, the Federal Circuit stated, “[t]he

USPS Purchasing Manual sets forth the policies and procedures for the USPS’s purchasing

activities and is incorporated by reference into USPS regulations.” Id. In Asia Pacific, USPS

argued before this court the Purchasing Manual was unenforceable based on a disclaimer in the

manual stating that the manual did not “create any right or benefit, substantive or procedural by a

party against the Postal Service or the United States.” Asia Pac. Airlines, 68 Fed. Cl. at 28 n.14

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(2005) (citing the Purchasing Manual § 1.1.1.b.4). The court rejected USPS’s claim, finding the

Purchasing Manual was “incorporated by reference in the Code of Federal Regulations,” before

holding the USPS acted arbitrarily and capriciously in removing an offeror based on ambiguous

terms in the solicitation that failed to meet Purchasing Manual criteria. Id. at 21, 24.

The Postal Reorganization Act may have made the Postal Service more businesslike, but

the Act did not abrogate the Postal Service’s purpose: to serve the public interest. See 39 U.S.C.

§ 101(a) (“The United States Postal Service shall be operated as a basic and fundamental service

provided to the people by the Government of the United States . . . .”). Fairness in the

procurement process is fundamental to serving the public interest. See Asia Pacific, 68 Fed. Cl.

at 27 (“[I]t is well-established that the public interest is well-served by ensuring that the

government procurement process is fair.”) (citing Doty v. United States, 53 F.3d 1244, 1251

(Fed. Cir. 1995)). Government contract disputes are resolved in the Court of Federal Claims “to

ensure national uniformity in government contract law.” Texas Health Choice, L.C. v. Off. of

Personnel Mgt., 400 F.3d 895, 899 (Fed. Cir. 2005); see also Emery, 264 F.3d at 1079 (“[T]o

prevent forum shopping and to promote uniformity in government procurement award law,

Congress sought to channel the entirety of judicial government contract procurement protest

jurisdiction to the Court of Federal Claims.”).

In addition to other arguments in this protest, the government attempts to define and

apply standards in font size, page length, and late submissions all as minor informalities post

hoc. As explained infra, post hoc definitions of procurement requirements fail to meet the

government’s duty of providing a rational basis for decisions, particularly when the government

acknowledges these “minor informalities” can “conceivably” create unfair advantage. Post-

Award OA Tr. 29:4–8; see PGBA, LLC v. United States, 60 Fed. Cl. 196, 207, aff’d, 389 F.3d

1219 (Fed. Cir. 2004) (“[U]neven treatment goes against standard of equality and fair-play that is

a necessary underpinning of the federal government’s procurement process and amounts to an

abuse of the agency’s discretion.”). The Court notes generally that while USPS is governed by a

different procurement process, it is also mandated to have a fair procurement process. See Asia

Pacific Airlines v. United States, 68 Fed. Cl. 8, 21 (2005). While the Post Office argues the

Court must award it special treatment, the purpose of the SP&Ps is to create a “fair, objective”

standard for business, and the Postal Office is not exempt from the standard. SP&Ps at 6; see

Emery, 264 F.3d at 1079, 1083.

VI. Parties’ Arguments

In its pre-award protest, AMK9 argues USPS arbitrarily combined alarm resolution

services and K-9 services into a single solicitation, the combination of services unduly restricted

competition, and the government unlawfully crafted the solicitation to favor MSA. See AMK9

Pre-Award MJAR at 9, 15–26. The government responds USPS acted within its discretion when

the agency combined awards and “rationally determined” a single solicitation would better. See

Gov’t Pre-Award Cross-MJAR at 22–27. Further, the government argues competition was

sufficient for the solicitation and the requirements of the solicitation both are rational and do not

demonstrate favor for MSA. See id. at 27–28.

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Regarding post-award protests, both AMK9 and GK9 argue USPS acted arbitrarily and

capriciously for accepting MSA’s proposal because the proposal allegedly contained text with

font size smaller than eleven in violation of the solicitation’s requirement. See AMK9 Post-

Award MJAR at 16–17; GK9 MJAR at 18–20. GK9 argues MSA’s failure to comply with the

solicitation’s font size requirement allowed MSA to condense 27 pages of information down to

the required 20 pages, and, had MSA followed the font requirements, MSA would not have been

able to respond to every aspect of the Solicitation. See GK9 MJAR at 20. The government

argues in response the font size requirement was not a material consideration for whether a

proposal was acceptable, and USPS has the discretion to “waive minor informalities” in the

proposals. Gov’t Post-Award Cross-MJAR at 26–27. MSA argues that neither protestor raised

this issue at the administrative level, and in the alternative, the font size limitation was not a

requirement of the solicitation. See MSA Post-Award Cross-MJAR at 44–47. AMK9 initially

also argued USPS acted arbitrarily and capriciously by accepting MSA’s submission, which

AMK9 alleged was submitted four minutes after the deadline. See AMK9 Post-Award MJAR at

15. Both the government and MSA argued in response MSA submitted its proposal before the

deadline. See Gov’t Post-Award Cross-MJAR at 25–26, MSA Post-Award Cross-MJAR at 47.

AMK9 waived this argument in its reply and at oral argument. See Post-Award OA Tr. at

52:13–23.

AMK9 and GK9 also accuse MSA of various organizational conflicts of interest, which

plaintiffs allege required USPS to disqualify MSA. See AMK9 Post-Award MJAR at 17–25;

GK9 MJAR at 12–18. AMK9 and GK9 both claim MSA had unequal access to information

through MSA’s participation in USPS’s pilot program for mail screening and through MSA’s

exposure to the USPS’s mail amendments. See AMK9 Post-Award MJAR at 18–20; GK9

MJAR at 16–18. AMK9 and GK9 also claim a biased ground rules organizational conflict of

interest existed by way of MSA’s participation in the pilot program allegedly “set[ting] the

ground rules” of the solicitation. GK9 MJAR at 12; see also AMK9 Post-Award MJAR at 24.

AMK9 and GK9 argue USPS failed to fully consider the organizational conflicts of interest. See

AMK9 Post-Award MJAR at 20–23; GK9 MJAR at 16–17. Both the government and MSA

contend USPS adequately reinvestigated the OCI and found no evidence. See Gov’t Post-Award

Cross-MJAR at 20–25; MSA Post-Award Cross-MJAR at 36–44. According to the government,

MSA had access to a draft of the mail amendment, but the mail amendment “did not contain

material information beyond that given in the Solicitation of Work to all bidders.” See Gov’t

Post-Award Cross-MJAR at 25.

AMK9 and GK9 argue USPS favored MSA in its treatment of offerors. See AMK9 Post-

Award MJAR at 31–37; GK9 MJAR at 21–23. AMK9 alleges USPS “treated offerors

disparately” by assigning strengths to MSA without acknowledging the same strengths in

AMK9’s proposal and assigning MSA unwarranted strengths. AMK9 Post-Award MJAR at 31–

34. GK9 emphasizes a series of best practices presentations presented by USPS, referenced as a

“3PK9 playbook,” noted MSA’s technology and participation in the pilot program prior to

contract solicitation without identifying any other TSA-certified 3PK9 vendors. See GK9 MJAR

at 21–23. The government responds to AMK9’s argument by distinguishing between offerors’

proposals to show why it believed the assignment of certain strengths was warranted and

responds to GK9’s argument by contending USPIS created these presentations, rather than MSA.

See Gov’t Post-Award Cross-MJAR at 23, 28–33. MSA contends USPS planned to implement a

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new program and had an obligation, fulfilled through the “playbook,” to inform airlines and

others of the lessons the agency learned from the pilot program and what USPS “would consider

as ‘best practices.’” MSA Post-Award MJAR at 36.

AMK9 and GK9 also argue USPS acted arbitrarily and capriciously in evaluating both

offerors’ proposals. See AMK9 Post-Award MJAR at 35; GK9 MJAR at 21. AMK9 argues

USPS assigned a weakness to AMK9 based on the offeror’s initial proposal. See AMK9 Post-

Award MJAR at 25–26. AMK9 further argues USPS inaccurately assessed AMK9’s proposal,

compared to MSA’s proposal, when USPS conducted its tradeoff analysis. AMK9 Post-Award

MJAR at 34–35. AMK9 and GK9 additionally argue USPS relied on unstated evaluation factors

when assigning weaknesses to each offeror’s proposal. See AMK9 Post-Award MJAR at 26;

GK9 MJAR at 20–26. The government contends USPS reasonably evaluated proposals and any

errors did not prejudice AMK9 or GK9. See Gov’t Post-Award Cross-MJAR at 28–37.

VII. The Court’s Findings Regarding AMK9’s Pre-Award Protest Claims

A. Whether the Government Arbitrarily and Capriciously Combined Alarm

Resolution Services and K-9 Services in the Solicitation Rather than Conducting

Two Separate Procurements

AMK9 argues “USPS did not require 3PK9 services and alarm resolution services under

one procurement,” therefore, by including “alarm resolution services into a procurement for

3PK9 services—and including specifications and evaluation methodologies favoring MSA—

USPS crafted a Solicitation exceeding its minimum needs in a manner that was overly restrictive

and limited competition.” AMK9 Pre-Award MJAR at 15. AMK9 asserts “a solicitation must

state the agency’s ‘minimum needs,’ and overstating those needs creates a restrictive

competition.” Id. at 17 (citing Am. Safety Council, Inc. v. United States, 122 Fed. Cl. 426

(2015); Chas H. Tompkins Co. v. United States, 43 Fed. Cl. 716, 723 (1999)). AMK9 contends

alarm resolution is not a need of USPS and will in fact “run concurrently with the Air

Transportation CAIR contract” thereby creating a redundant service. Id. at 19. Further, AMK9

argues the government, by combining two services unnecessarily, “prevented offerors from

picking and choosing what to apply for.” Pre-Award OA Tr. at 44:11–12.

The government contends USPS “properly exercised it [sic] authority” under 39 U.S.C §

401(3) when it “rationally determined that it preferred to have both canine screening (as certified

by TSA) and alarm resolution service together in one contract.” Gov’t Pre-Award Cross-MJAR

at 22–23. The government proffers three reasons supporting the bundling of K-9 and alarm

services into a single solicitation. First, the government argues USPS concluded a single award

would provide “seamless integration of canine explosive detection and alarm resolution

services,” and therefore support public safety and law enforcement purposes. Gov’t Pre-Award

Reply at 9. Second, the government argues USPS “rationally concluded that a contract for both

canine detection and alarm resolution services would ‘allow the Postal Service control over the

[mail] screening process.’” Gov’t Pre-Award Cross-MJAR at 23 (citing AR 568). Third, the

government contends “inconsistencies in the legacy (TSA screening) with alarm resolution

service, ‘prevented prompt notification of alerts to the USPIS’” and USPS rationally concluded

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two interrelated services performed by a single supplier “are far more likely to operate

seamlessly.” Id. at 25 (citing AR at 814 (SDRO Pre-Award Decision)).

The government notes AMK9 cites “no law or regulation that limits the USPS’s ability to

‘include two interdependent services under one contract.’” Id. at 24–25 (citing AR at 814

(SDRO Pre-Award Decision)). MSA adds the combined services would “quickly and efficiently

determine if [an] alert is an emergency,” in compliance with the ten-minute threat resolution

solicitation requirement. MSA Pre-Award Resp. at 16 (citing AR at 727).

Federal agencies conducting procurements have “broad discretion to determine what

particular method of procurement will be in the best interests of the United States in a particular

situation.” Tyler Const. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009). Agencies

determine their own minimum needs for a procurement solicitation. See XTRA Lease, Inc. v.

United States, 50 Fed. Cl. 612, 625 (2001) (“The determination of an agency’s minimum needs

is a matter within the broad discretion of agency officials.”). The solicitation requirements must

only have a rational basis, and the rational basis review is “highly deferential.” CHE Consulting,

Inc. v. United States, 552 F.3d 1351, 1354 (Fed. Cir. 2008). At oral argument, AMK9

acknowledged the 3PK9 services and alarm resolution services are “connected.” Pre-Award OA

Tr. at 67:8–9 (AMK9 counsel “agree[ing] . . . that from a human perspective [3PK9 services and

alarm resolution services] are connected”). The two services “replace and expand” upon a

screening formerly provided by TSA and together allow USPS to screen U.S. mail for explosives

using a “novel process.” AR at 627, 629 (CO Resolution of AMK9 Business Disagreement), 169

(Solicitation Amendment 001). The SDRO concluded “two interrelated services are far more

likely to operate seamlessly,” which “is of the utmost importance” for “a bomb detection system

for mail that is loaded onto commercial passenger planes.” Id. at 814 (Supplier Disagreement

Resolution). The government noted a single award would “enable the law enforcement arm [of

USPS] to inspect any dangerous mail and to follow up and perhaps apprehend wrongdoers[]” in

accordance with “consistent safety standards” defined by USPS. Pre-Award OA Tr. at 45:17–19,

46:2. AMK9 conceded USPS has the authority to resolve alarms in accordance with its own

standard. Id. at 73:13–20. Based on precedent related to assessing and avoiding risks, the

government reasonably concluded a combined services solicitation would better serve public

safety and law enforcement priorities. See CHE Consulting, 552 F.3d at 1355 (“Indeed [the

government agency] has a responsibility to assess risks and avoid them before they become a

historical fact.”). Examining the USPS solicitation, USPS rationally concluded a single award

would provide “continuity and cohesion” in the system through a “single point of contact.” AR

at 572 (Supply Management Purchase Plan); CHE Consulting, 552 F.3d at 1355.

Prior to the solicitation, USPS considered, inter alia, increased demand for parcel

services, increased need to screen mail on international flights, and a lack of oversight over the

previous screening program. AR at 567–68 (Supply Management Purchase Plan). USPS noted

the new program would allow “the Postal Service to control the screening process and the

subsequent development of a program that will enable the Postal Service to expand the number

of sites with screening capabilities.” Id. at 568. USPS also considered additional potential future

costs in ground transportation resulting from global trend shifts and anticipated the proposed

solicitation would reduce expenses and fulfill a need “critical to the Postal Service.” Id. at 567.

USPS provided a rational basis for concluding the combined services would “allow the Postal

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Service to control the screening process and the subsequent development of a program that will

enable the Postal Service to expand. . . .” Id. at 568; see also Input/Output Tech., Inc. v. United

States, 44 Fed. Cl. 65, 72 n.9 (1999) (“[T]his court’s role is not to second guess what the

[procuring agency] has determined to be its needs.”).

The contracting officer and supplier disagreement resolution officer both noted the

“pattern of inconsistencies that have resulted under the legacy screening system, particularly

with Alarm Resolution services, which have prevented prompt notification of alerts to USPIS.”

AR at 814 (SDRO Pre-Award Decision). USPS expected a single supplier would lead to

“[e]ffective and efficient interoperability,” reducing the errors in the legacy program. Id. While

AMK9 argues the combined services were “unnecessary” for the government’s solicitation, the

Federal Circuit has clearly stated, “competitors do not dictate an agency’s minimum needs, the

agency does.” Pre-Award OA Tr. 96:1–4; Savantage Fin. Serv., Inc., 595 F.3d 1282, 1286 (Fed.

Cir. 2010). USPS rationally concluded a single award would avoid the “inefficient and

inconsistent” results of the previous screening method. AR at 628; see also Savantage Fin.

Serv., 595 F.3d at 1286–87 (holding an agency’s solicitation requirement for an integrated

system was rational based on the agency’s previous experience and the experience of other

agencies and department).

The solicitation sought to implement a “novel process” for mail screenings, conducted

exclusively under USPS authority. AR at 695 (Solicitation Amendment). In preparing the

solicitation, USPS considered its own experience, conducted market research, and implemented a

pilot program. Id. at 568–69, 2536–39. USPS concluded a bundling of the two services would

lead to “seamless” operations, greater oversight, and reduced errors. Id. at 628 (Contracting

Officer’s Resolution of Business Disagreement). The noted justifications provided by the

government independently serve as a rational basis for finding USPS’s bundling of services into

a single solicitation was not arbitrary and capricious. See Advanced Data Concepts, Inc. v.

United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (“[The arbitrary and capricious] standard

requires a reviewing court to sustain an agency action evincing rational reasoning and

consideration of relevant factors.”).

B. Whether the Government Unduly Restricted Competition by Issuing the

Solicitation in a Manner Encouraging a Single Award

AMK9 argues, “USPS set itself up to award a contract to a single entity that could

provide both services without ever comparing the value of an offeror proposing just canine

services against an offeror proposing both services.” AMK9 Pre-Award MJAR at 20. AMK9

argues the solicitation “prevented offerors from reasonably competing for 3PK9 services without

also proposing to offer alarm resolution services.” AMK9 Pre-Award Resp. at 9. AMK9 asserts

by extending the solicitation “beyond [USPS] requirements” and “combining both services”

USPS “unduly restricted competition” in a way “which render[ed] USPS’ [sic] actions arbitrary,

capricious, an abuse of discretion, and contrary to law.” AMK9 Pre-Award MJAR at 9. The

government contends in response competition under the solicitation’s terms was “adequate.”

Gov’t Pre-Award Cross-MJAR at 27. The government explains AMK9, along with four other

offerors, submitted proposals that “qualified for both canine detection and alarm resolution.” Id.

The government further notes “[USPS] allowed for subcontracting and partnering” and this

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“rebut[s] the contention that the solicitation restricted competition.” Id. at 29–30. MSA

emphasizes AMK9 “points to no regulations violated by the USPS” and AMK9 “solely disagrees

with how USPS determined—in its reasonable discretion—to award the contract.” MSA Pre-

Award Resp. at 18.

A plaintiff challenging an unduly restrictive solicitation “bears the burden of showing

that the allegedly restrictive solicitation term ‘is so plainly unjustified as to lack a rational

basis.’” Cleveland Assets, LLC v. United States, 132 Fed. Cl. 264 (2017), aff’d, 883 F.3d 1378

(Fed. Cir. 2018) (quoting Savantage Fin. Serv., 595 F.3d at 1286–87). Federal agencies

conducting procurement have “broad discretion to determine what particular method of

procurement will be in the best interests of the United States in a particular situation.” Tyler

Const. Grp., 570 F.3d at 1334. Congress authorized the USPS to “determine the character of,

and necessity for, its expenditures.” 39 U.S.C. § 401(3). The USPS is “exempted from all

federal procurement laws not specifically enumerated in 39 U.S.C. §410(a),” which includes an

exemption from the Competition in Contracting Act. Emery Worldwide Airlines, Inc. v. United

States, 264 F.3d 1071, 1079 n.7 (Fed. Cir. 2001). In reviewing Agency procurement decisions,

the Court must not “substitute its judgment for that of an agency.” Telos Identity Mgmt. Sols.,

LLC v. United States, 143 Fed. Cl. 787, 792 (2019).

AMK9’s argument the solicitation was unduly restrictive is undermined by the five

qualified offers USPS received for both services. AR at 780; see also American Safety Council,

122 Fed. Cl. at 436 (stating the presence of multiple proposals “undercut[s] the argument that the

terms are unduly restrictive”). The government identified legacy program errors and delays and

believed a solicitation combining the two services would reduce these issues. AR at 752.

Further, USPS believed sourcing both alarm detection and resolution from a single point of

contact would offer greater supervision over the mail screening process. Id. The solicitation

stated, despite these preferences, the agency would consider offers that did not provide both

services, and it is firmly within the agency’s discretion to determine the number of contract

awards. Id. at 719; see Am. Safety Council, 122 Fed. Cl. at 439 (“[I]t is within the sound

discretion of an agency to determine its minimum needs and determine the number of contract

awards, consistent with a solicitation’s requirements.”). The government provided a rational

basis for combining the solicitation and therefore did not unduly restrict competition. See

Savantage Fin. Serv., 595 F.3d at 1286–87.

C. Whether the Government Unlawfully Crafted the Solicitation to Favor MSA

AMK9 asserts “USPS drafted evaluation factors in a manner that would ensure MSA

received additional credit for the alarm services it previously performed—even though these

services were not necessary to satisfy USPS’ minimum needs.” AMK9 Pre-Award MJAR at 22.

AMK9 argues: “USPS stated that holding a SAFETY Act designation for alarm resolution

services ‘is desirable’”; “offerors were to provide ‘historical data of their current processes to

provide’ alarm resolution services over the last 12 months”; and “the Solicitation included a past

performance requirement for ‘[d]emonstrated support for the execution of this program across

the U.S.’ and ‘Proven [sic] experience in developing national level screening and alarm

resolution.’” Id. at 22–23 (emphasis omitted). According to AMK9, “the inclusion of alarm

services in this Solicitation was unnecessary and allowed MSA to benefit considerably,” and

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USPS “continually built in evaluation factors that extended beyond its needs in a manner that

favored” MSA. Id. at 23–24. AMK9 cites USPS’s statement it “only ‘preferred’ to receive these

two services in one procurement” as evidence USPS acted improperly in “adding in requirements

(or desires) that only MSA could meet and benefit from . . . .” Id. at 24. AMK9 alleges neither

“bad faith [n]or that USPS intended to favor MSA,” but rather “asserts that the solicitation, as

drafted, favors one offeror over another, preventing offerors from having a reasonable

opportunity for award.” AMK9 Pre-Award Resp. at 11 n.8.

The government notes AMK9 “fails to provide any proof that any USPS official intended

to favor MSA, much less the clear and convincing proof required to overcome the presumption

of good faith on the part of USPS.” Gov’t Pre-Award Cross-MJAR at 28 (citing Am-Pro

Protective Agency, Inc. v. United States, 281 F.3d 1234, 1239–40 (Fed. Cir. 2002) (requiring

“clear and convincing evidence” for a Court to conclude a CO did not act in good faith); Galen

Medical Associates, Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (requiring

“irrefragable proof” for a plaintiff to overcome the presumption of good faith on behalf of the

government)). The government argues AMK9 “has pointed to nothing in the record, or

otherwise, indicating that USPS had any intent to favor one offeror over another in the crafting

of the solicitation, or that it had any intent to injure AMK9.” Id. at 29. The government further

argues its preference for “one prime contractor responsible for both” services is based on

“rational explanations,” none of which “favored a specific offeror.” Id. The government also

argues USPS’s inclusion of an element for prior experience, experience which defendant-

intervenor had from the pilot program, “fails to demonstrate . . . that USPS included those

elements to favor MSA, rather than the entirely rational preference to have an awardee who was

prepared to offer the full range of services requested.” Id. According to the government, AMK9

“fails to show that the solicitation had either the effect or motivation to exclude offerors other

than” defendant-intervenor, since the solicitation allowed for subcontracting, “did not limit

experience to the pilot program,” and “USPS received five qualified bids for both canine

detection and alarm resolution, including” AMK9’s. Id. at 29–30.

MSA notes the fact it is “simply meeting a preference of USPS’s Solicitation [for a

SAFETY Act designation in alarm resolution services] does not mean, without any other

evidence, that the USPS specifically crafted the solicitation for” MSA. MSA Pre-Award Resp.

at 19. Additionally, MSA observes USPS’s requirement that offerors provide “historical data of

their current processes to provide alarm resolution services over the last 12 months” could not

have been intended to unfairly favor MSA because “[t]he evaluation team noted a strength for

another offeror, [an offeror not involved in this case], for its ‘twelve (12) months of usage

history.’” Id. at 19–20 (citing AR at 786 (TET Award Recommendation)). MSA characterizes

AMK9’s objection here as “a mere disagreement that the alarm resolution services were needed

by the USPS.” Id. at 20.

Specifications must be “reasonably related to the agency’s minimum needs.” Software

Testing Sols., Inc. v. United States, 58 Fed. Cl. 533, 535 (2003). Determining an agency’s

minimum needs is broadly within the discretion of agency officials and not for the court to

second guess unless the action does not “evince rational reasoning and consideration of relevant

factors.” Savantage Financial Services, 595 F.3d at 1286 (internal quotation marks omitted).

The solicitation required offerors either to have or be in the process of obtaining SAFETY Act

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certification. AR at 756. The SAFETY Act limits liability for claims against companies that

create or deploy technology related to countering terrorism, and certification is the process a

company goes through to enroll in the SAFETY Act protections. Id. at 582. To obtain

certification, the technology must “perform as intended, conform to the seller’s specifications,

and [be] safe for use as intended.” Designation and Certification, SAFETY Act,

https://www.safetyact.gov/help-doc/3561.htm (last visited Jul. 14, 2021). The government

described the SAFETY Act certification as fulfilling a “safety purpose” and as a “limitation on

liability” by ensuring offerors were trained in K-9 procedures. Pre-Award OA Tr. at 104:5–7.

Five of the offerors met the SAFETY Act certification requirement, weakening AMK9’s

argument the requirement favored MSA. AR at 784–85 (Supply Management Competitive

Award Recommendation). Further, the government rationally included SAFETY Act

certification as a criterion because compliance certifications that support an offeror’s ability to

adequately perform a required service are reasonably related to the government’s needs. See,

e.g., Parcel 49C Ltd. P’ship v. United States, 130 Fed. Cl. 109, 127 (2016) (holding National

Environmental Policy Act compliance requirements reasonable in bid contract).

Several competitors received positive marks for SAFETY Act certification, and MSA

was not the only offeror to receive a strength for providing its history of alarm resolution

services. AR at 786. An offeror not involved in this litigation specifically received strengths for

“twelve (12) months of usage history.” Id. Counsel for AMK9 was not able to “speak to” this

fact at oral argument but stated AMK9 is “not alleging bad faith or even bad intent.” Pre-Award

OA Tr. at 97:19, 98:16–17. Rather, counsel for AMK9 argued at oral argument the

consequences of requiring historical data and past experience sufficiently “favor MSA” for

USPS’s actions to be arbitrary and capricious. Id. at 98:16–18. The government’s interest in

awarding the contract to an offeror with historical data and past performance is rational, and

USPS acted rationally when it included the three terms in the solicitation. Savantage Fin. Serv.,

595 F.3d at 1286; see also CGS Administrators, LLC v. United States, 110 Fed. Cl. 431, 439–40

(2013) (holding an agency acts rationally when it evaluates the past performance of bidders,

especially when it evaluates relevant types of past performance).

VIII. The Court’s Findings Regarding AMK9 & GK9’s Post-Award Protests

A. Whether USPS Overlooked Alleged Flaws in MSA’s Submission

1. Whether USPS Irrationally Accepted MSA’s Submission Without

Considering Font Size and Page Length

AMK9 argues “MSA did not comply with the required font size” in the text of several

charts and tables labeled as exhibits throughout the proposal. AMK9 Post-Award MJAR at 16.

Amendment 001 contains a series of questions from offerors and answers from the government.

See AR at 161–175 (Solicitation Amendment 001). Question 34 asked: “Can USPS specify if

there are any font size limitations/restrictions for the written responses and

graphics/tables/figures?” Id. at 165. USPS responded: “The USPS would like to keep Font Size

no smaller 11 [sic].” Id. Question 68 asked: “Is there a font size limitation for the Technical

Proposal? Does this limitation apply to any graphics to tables used in the proposal responses?”

Id. at 170. USPS responded: “Please keep the Font Size no smaller than 11. This applies to all

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graphics, labels, and tables as well.” Id. According to AMK9, the government erred in

“accept[ing] and consider[ing]” MSA’s proposal “without considering MSA’s failure to conform

to the Solicitation’s terms” by including fonts smaller than 11. Id. at 17. GK9 also argues

MSA’s failure to comply with the font size requirement allowed MSA to condense a 27-page

offer into a 20-page offer to comply with the Solicitation’s page limit. GK9 MJAR at 20.

According to GK9, this means MSA would not have been able to respond to every aspect of the

Solicitation had it fully complied with the font and page requirements. Id.

The government argues plaintiffs “fail to demonstrate . . . that this provision was material

in light of USPS’s request of the 11-point font only in response to a question from offerors and

[USPS’s] discretion to waive minor irregularities in proposals.” Gov’t Post-Award Cross-MJAR

at 26–27. The government explains, “[t]he alleged improper font size discrepancies contained on

the pages of MSA’s 20 page proposal . . . are the type of informality that USPS explicitly

reserved the right to waive in the Solicitation.” Id. at 27. MSA argues this issue is not ripe

before the Court because plaintiffs must first challenge it through mandatory administrative

remedies. MSA Post-Award Cross-MJAR at 44 (citing 39 C.F.R. § 601.108(h) (“The party

lodging the disagreement may seek review of the Postal Service’s final contract award only after

the mandatory administrative remedies provided under § 601.107 and § 601.108 have been

exhausted.”)). MSA alternatively argues the government did not “intend[] to amend the

Solicitation to import this ‘requirement’” because the government issued a request, not a

mandate, when it responded to questions about font size by saying “[p]lease keep the Font Size

no smaller than 11” and “USPS would like to keep Font Size no smaller 11 [sic].” Id. at 45

(quoting AR at 696 (Email re: Amendment Template Request by 3PK9-C Bidders (Oct. 15,

2020)), AR at 691 (Email re: Amendment Template Request by 3PK9-C Bidders (Oct. 15,

2020))) (emphasis in MSA Post-Award Cross-MJAR). MSA does not dispute its “font size

irregularities” and instead explains they were the result of shrinking charts to fit within margin

requirements. Id. at 45–46. MSA also argues the government did not “inconsistently appl[y] the

solicitation requirements” because “other offerors were allowed to submit their proposals with

lesser font sizes without disqualification,” and therefore the requirement should not be applied

only to MSA. Id. at 47. Finally, MSA notes the solicitation did not require disqualification for

failure to follow font requirements; rather, “USPS noted that an offeror [sic] ‘may result in the

Offeror being eliminated from the selection process at the Postal Service’s discretion.’” Id.

(quoting AR at 212).

The government agreed at oral argument USPS amended the solicitation to “say please

keep font size under 11,” a statement which includes the font of “graphics, labels, and tables.”

Post-Award OA Tr. at 28:16–21; AR at 212 (“Factors requirements are limited to a total of

twenty (20) pages, not including any requested or relevant attachments.”), 696 (“Please keep the

Font Size no smaller than 11. This applies to all graphics, labels, and tables as well.”); see Per

Aarsleff A/S v. United States, 829 F.3d 1303, 1311 (Fed. Cir. 2016) (“[A]nswers [to an offeror’s

questions], when circulated to all [offerors] as an attachment to an amendment signed by the

contracting officer, constitute an amendment of the solicitation.”) (quoting BayFirst Sols., LLC v.

United States, 102 Fed. Cl. 677, 689 n.15 (2012)). The government also agreed an offeror would

“[c]onceivably” gain an unfair advantage by using a smaller font, because using a smaller font

would allow the submission of proposals with “ a lot more words.” Post-Award OA Tr. at 29:1–

7. The solicitation reads: “Failure to provide complete information in the format specified may

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result in the Offeror being eliminated from the selection process at the Postal Service’s

discretion.” AR at 212. The solicitation also allows: “USPS may reject any and all proposals

and may waive minor informalities and irregularities in the proposals it receives.” Id. at 214.

The solicitation does not appear to state what qualifies as a minor informality or irregularity or

how the government should waive such informalities or irregularities. Another judge on this

court has found, even when the CICA and FAR do not apply, this court may investigate whether

“[a]n agency’s failure to follow the terms of its own Solicitation” is conduct that “lacks a rational

basis.” Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243, 273, modified, 63 Fed. Cl. 141 (2004).

Before considering plaintiffs’ argument regarding font size on the merits, the Court

addresses MSA’s argument this issue is not ripe because the issue was not raised in

administrative proceedings. MSA Post-Award Cross-MJAR at 44. As GK9 notes, plaintiffs

were not on notice of the variety of font sizes in MSA’s submission until the government filed

the administrative record in this proceeding, by which time the 10-day filing deadline for

administrative review with USPS had long passed. GK9 Resp. at 8–9 (citing 39 C.F.R. §

601.107(b)). The regulation states: “The party lodging the disagreement may seek review of the

Postal Service’s final contract award only after the mandatory administrative remedies provided

under § 601.107 and § 601.108 have been exhausted.” 39 C.F.R. § 601.108(h). While MSA

raises an exhaustion issue, it does not dispute plaintiffs exhausted administrative remedies for

review of the Postal Service’s final contract award. Plaintiffs had no opportunity to pursue their

font size argument through administrative review because the government provided the

administrative record containing the issue to plaintiffs after their deadline to file for

administrative review. Under MSA’s theory the font size argument is unripe as before this

Court, plaintiffs would effectively have no recourse for their font size argument, as it would also

be untimely for plaintiffs to raise the argument before USPS. 39 C.F.R. § 601.107(b). Plaintiffs

were not on notice of the issue regarding the font size of parts of MSA’s offer until the offer was

part of the administrative record; therefore, plaintiffs have the right to raise this issue at this stage

of proceedings, and it is ripe for review. See The Ravens Grp., Inc. v. United States, 78 Fed. Cl.

390, 402 (2007) (considering “a new argument in [plaintiff’s] opposition brief . . . because these

allegations are presumably the result of the Plaintiff’s access to the Administrative Record

during litigation”). The Court will consider the merits of plaintiffs’ argument.

While the government argues the font-size requirement is “the type of informality that

USPS explicitly reserved the right to waive in the Solicitation,” it does not cite anywhere in the

record where USPS identified MSA’s failure to comply with the font-size requirement and

waived the problem. Gov’t Post-Award Cross-MJAR at 27. As counsel for GK9 observed, the

government “should have done a compliance analysis.” Post-Award OA Tr. at 25:25–26:1. The

government also does not cite anywhere in the record where USPS determined its font-size

requirement to be a minor issue. On the contrary, at oral argument, counsel for the government

agreed it is “the Government’s position now that USPS first became aware of the font size

discrepancy only at the MJAR briefing.” Id. at 30:2–5. Counsel for the government also agreed,

although there is no “specific requirement in terms of documentation” of the government’s steps

in recognizing, reviewing, and accepting or rejecting minor informalities, “in general . . .

decisions are supposed to be accompanied by the reasoning behind the decision.” Id. at 42:14–

21. The government did not dispute at oral argument counsel for AMK9’s observation that

“[t]he government did no analysis in the record as to whether or not MSA’s proposal was

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compliant, and it clearly was not.” Id. at 18:11–13. In notable contrast, the government

specifically asserted it observed and waived late submissions, viewed by the government as

“another minor informality,” for several parties. See id. at 54:14–55:3.

MSA argues the solicitation was ambiguous as to whether USPS established a

requirement, rather than a preference, that the font size in submissions was to be no smaller than

11; the government at one point in the oral argument agreed with MSA, stating “the answer to

the question does create [a] guideline.” Id. at 21:18–23:2, 28:14–16. The government appeared

to contradict this position, however, by stating “[o]ur understanding is answers to questions are

incorporated into the solicitation,” meaning the government’s answer did “create a requirement

as an amendment to the solicitation.” Id. at 28:3–9. MSA later agreed, stating, “[i]f you are

reading [question] 68 alone, then I would agree that our font size was not consistent with what

[question] 68 says.” Id. at 39:2–4.

Under the Court’s APA standard of review, “[c]ourts have found an agency’s decision to

be arbitrary and capricious when,” among other reasons, “the agency ‘entirely failed to consider

an important aspect of the problem.’” Alabama Aircraft Indus., Inc.-Birmingham v. United

States, 586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm

Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). In Emery, the Federal Circuit held when this Court

reviews USPS actions under the APA standard, “the agency’s action must be upheld as long as a

rational basis is articulated and relevant factors are considered.” Emery Worldwide Airlines, Inc.

v. United States, 264 F.3d 1071, 1085 (Fed. Cir. 2001). MSA’s failure to comply with the

government’s font requirement was a glaring submission violation the government should have

recognized. Once USPS created a submission rule for font size, it was bound to acknowledge the

issue in the proposal and decide whether to enforce or specifically disregard the rule. The

government does not dispute it “entirely failed to consider” MSA’s lack of compliance with the

font-size requirement. Alabama Aircraft, 586 F.3d at 1375; see also Post-Award OA Tr. at

30:2–5 (government counsel agreeing it is “the [g]overnment’s position now that USPS first

became aware of the font size discrepancy only at the MJAR briefing”). The government cannot

demonstrate on the record where “a rational basis is articulated and the relevant factors are

considered,” and the Court finds USPS acted irrationally in failing to consider MSA’s violations

of USPS’s font size requirements. Emery, 264 F.3d at 1085.

Counsel for AMK9 argued at oral argument, “[f]ont size is a material requirement that

allows offerors to all compete on a level playing field such that each offeror can submit their

proposal understanding what the Government is going to evaluate.” Id. at 39:22–40:1. “[A]

proposal that fails to conform to the material terms and conditions of the solicitation should be

considered unacceptable and a contract award based on such an unacceptable proposal violates

the procurement statutes and regulations.” Allied Tech. Grp., Inc. v. United States, 649 F.3d

1320, 1329 (Fed. Cir. 2011) (quoting E.W. Bliss Co. v. United States, 77 F.3d 445, 448 (Fed. Cir.

1996)). This court has found an error to be “material when it (1) violates an express provision of

the RFP and (2) that provision serves a substantive purpose. A substantive purpose is one

important to the government’s evaluation of the offer, is binding on the offeror, or impacts the

price, quantity, or quality of the proposal.” ManTech Advanced Sys. Int’l, Inc. v. United States,

141 Fed. Cl. 493, 511 (2019) (citing Bus. Integra, Inc. v. United States, 116 Fed. Cl. 328, 335

(2014), ST Net, Inc. v. United States, 112 Fed. Cl. 99, 108 (2013), Blackwater Lodge & Training

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Ctr., Inc. v. United States, 86 Fed. Cl. 488, 504 (2009)). When the government does not enforce

its own requirements, offerors may exceed the content limitations that page length and font size

requirements impose, which in turn directly “impacts the . . . quality of the proposal.” Id. The

font size requirement is material because: (1) it violates an express provision of the solicitation;

and (2) it “serves a substantive purpose” by “impact[ing] the . . . quality of the proposal.” Id.

While the Court finds the government’s action arbitrary and capricious, the Court will further

consider infra whether the action was prejudicial and what relief is merited. See Allied Tech.

Grp., 649 F.3d at 1329.

2. Whether the Government Improperly Accepted Late Submissions

As the lead argument in its post-award MJAR, AMK9 argues “USPS should have

disqualified MSA from the competition because MSA submitted a late proposal after the

submission deadline.” AMK9 Post-Award MJAR at 15. According to AMK9, “MSA submitted

its proposal at 1604:33 PM MT, four minutes after the deadline,” in violation of USPS’s

statement it would not accept late proposals. Id. at 15–16. AMK9 also noted USPS stated it

would only accept late proposals if a late proposal were “determined to be in the best interests of

the Postal Service,” but there is no record of USPS making such a determination. Id. at 16

(citing AR at 84). Additionally, AMK9 noted in a footnote, “USPS also accepted Global K-9’s

late proposal submission.” Id. at 16 n.4 (citing AR at 987). The government argues the same

email string AMK9 referenced demonstrates MSA made a timely submission, and the

government attached the email of the timely submission to its cross-MJAR. Gov’t Post-Award

Cross-MJAR at 25; Attachment A, ECF No. 93-1 (MSA Offer Email Submission, received 5

October 2020 at 5:58:38 p.m.). The government alternatively argues its “right to ‘waive minor

informalities and irregularities in the proposals it receives” means “AMK9’s argument that any

deviation from proposal requirements automatically compels disqualification is unfounded.”

Gov’t Post-Award Cross-MJAR at 26 (citing AR at 85, 126, 213). MSA offered similar

arguments in its cross-MJAR, and also argued “USPS’s discretion to accept late proposals is not

ripe for review” because “USPS has not inconsistently applied objective solicitation criteria” by

denying another late proposal while accepting MSA’s. MSA Post-Award Cross-MJAR at 47–48.

GK9 did not respond in its reply brief to AMK9’s argument regarding whether the

government improperly accepted late submissions. See generally GK9 Resp. AMK9 stated in a

footnote in its response to the government and MSA’s cross-MJARs: “After the government

corrected the record on June 2, 2021, it became clear that MSA submitted a timely proposal.

Therefore, AMK9 withdraws this argument.” AMK9 Post-Award Resp. at 2 n.1. At oral

argument, counsel for AMK9 stated in response to the government, “[w]e have no reason to

doubt that the [g]overnment isn’t being truthful as to whether or not the proposal was submitted

on time. And therefore, unless somebody else is seeing something that I haven’t, we would

waive that argument.” Post-Award OA Tr. at 50:2–6. Counsel for AMK9 additionally stated,

however, “We believe GK9’s submission was also late. It came in at 6:01 p.m.” Id. at 51:17–18.

GK9 responded, “we understood from [counsel for AMK9] that he was going to withdraw this

argument.” Id. at 52:4–5. Counsel for AMK9 replied, “I do withdraw.” Id. at 52:7. Counsel for

GK9 also noted, “[g]iven we are not the awardee, I don’t think it would be a ripe issue for the

Court to decide at this point.” Id. at 53:2–4. The government clarified it believed several offers

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were late, but USPS did not reject these offers because “that’s another minor informality the

Postal Service waived.” Id. at 54:24–55:1.

The Court takes notice of AMK9’s decision at oral argument to waive its arguments

regarding the timing of MSA and GK9’s filing of their offers. Id. at 50:2–6. Additionally, the

government sufficiently demonstrated MSA made a timely submission. Gov’t Post-Award

Cross-MJAR at 25; Attachment A. The timing of GK9’s submission is not before the Court at

this time, and the Court notes GK9’s argument that the record is incomplete regarding its time of

submission. See Post-Award OA Tr. at 52:13–23.

3. Additional Arguments Regarding MSA’s Strengths

a. AMK9’s Allegations of Unwarranted Strengths Assigned to MSA

AMK9 additionally argues USPS favored MSA by assigning it unwarranted strengths for

its [xxxxxxxxxxxxxxxxxxx], [xxxxxxxxxxxxxxxxxxxxxxxxx], and proposed rollout schedule.

AMK9 Post-Award MJAR at 33–34. The government credited MSA with being “the only

offeror that provided a [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx], [xxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxx],” based on an attachment listing [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxx]. AR at 784 (Supply Management Competitive Award Recommendation),

1239–43 (MSA Technical Proposal). The government demonstrated rational reasoning when it

awarded MSA a strength for submitting a proposal that provided a level of detail into MSA’s

capability that no other offeror provided. See Advanced Data Concepts, Inc. v. United States,

216 F.3d 1054, 1058 (Fed. Cir. 2000) (“The arbitrary and capricious standard . . . requires a

reviewing court to sustain an agency action evincing rational reasoning and consideration of

relevant factors.”); AR at 784. AMK9 argues, “[t]he administrative record contains no indication

that MSA’s proposal uses [xxxxxxxxxxxx],” but AMK9 does not dispute that the government

credited MSA’s network proposal for “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” but also

providing [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. AR at 1230

(MSA Technical Proposal); see AR at 1354 (AMK9 Technical Proposal), 1712 (Supply

Management Competitive Award Recommendation). The government thus did not act

irrationally when it awarded a strength to MSA for its proposal’s [xxxxxxxxxxxxxxxxxxxxx].

See Advanced Data Concepts, 216 F.3d at 1058. AMK9 argues MSA’s ability to [xxxxxxxxxxx

xxxxxxxxxxxxxx] was an unwarranted strength because USPS later stated it “could only work at

one airport at a time.” AMK9 Post-Award MJAR at 34. For support, AMK9 cites the

government’s declaration in January 2021, months after the award recommendation, that the

agency was limited to completing rollouts one airport at a time. Id. AMK9 provides no

justification from the record for its assertion “USPS knew or should have known” of its limited

rollout ability when it conducted the award recommendation months earlier. AMK9 Post-Award

Reply at 22. Further, MSA’s ability to “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” shows

flexibility that is relevant to the solicitation’s evaluation of offerors on their “ability to meet the

required or proposed delivery schedules.” AR at 1204 (MSA Technical Proposal), 1669

(Solicitation). MSA’s offer to not only meet but exceed the government’s rollout capabilities

supports a finding the government was rational in assigning MSA a strength. See Advanced

Data Concepts, 216 F.3d at 1058.

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b. GK9’s Allegations of Unwarranted Strengths Assigned to MSA

GK9 argues USPS unfairly assigned MSA strengths for certain aspects of its proposal,

namely its [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. See GK9 MJAR at

21–26. [xxxxxxxx] is a [xxxxxxxxxxxxxxx] MSA developed to [xxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

MSA’s solution “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” and “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].”

GK9 MJAR at 21. GK9 argues the government irrationally gave GK9’s technology weaknesses

despite its solution being “modern” and irrationally assigned strengths to MSA’s “outdated” and

“cumbersome” technology. Id. at 22. USPS’s decision was not arbitrary and capricious because

it demonstrated thorough consideration of the strengths and weaknesses of MSA’s [xxxxxxxxx]

solution. AR at 1494 (“The TET evaluated MSA’s Alarm Resolution technology as the highest

ranked when compared to that proposed by the other offerors. The TET evaluated MSA’s Alarm

Resolution technology as excellent in [eleven] areas.”); Ala. Aircraft Indus., Inc.-Birmingham v.

United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009).

GK9 also argues USPS unfairly assigned MSA strengths for its [xxxxxxxxxxxxxxxxxxx]

because [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. GK9 MJAR

at 23. GK9 reasons, “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxx]” and “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxx].” Id. GK9 asserts USPS failed to consider associated risk: “While

USPS might be able to negotiate exceptions to warranties for the x-ray machines it owns, it lacks

any privity to negotiate or manage agreements between airlines and their x-ray machine

providers.” Id. USPS’s decision is not arbitrary and capricious because it thoroughly considered

the strengths and weaknesses of MSA’s [xxxxxxxxxxxxx] solution. AR at 1494 (“MSA’s Alarm

Resolution technology requires a [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]; MSA provides [xxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].”); see

Ala. Aircraft Indus., 586 F.3d at 1375.

GK9 asserts the government’s rating of MSA’s rollout plan was irrational because “[xxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” and,

consequently, increases “the risk to MSA of COVID-19.” Id. at 25. GK9 also argues it was

irrational for USPS to deem GK9’s roll-out approach to present a COVID-19 risk given the

potential for MSA’s roll-out solution to present a risk. Id. USPS rationally rated MSA’s rollout

plan because it thoroughly considered the strengths and weaknesses of MSA’s rollout

information. AR at 1454 (“Offeror provided detailed description of how it would meet the

rollout plan”); 1496 (“The TET determined MSA’s proposal offered a [xxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].”); see Ala. Aircraft Indus., 586 F.3d at

1375.

GK9 also argues USPS arbitrarily “assigned MSA a strength for [xxxxxxxxxxxxxxxxxxx

xxxxxx]” when “MSA’s proposal does not discuss this, and the Agency does not cite to anything

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in MSA’s proposal that addresses it.” Id. at 25. MSA described its [xxxxx] capabilities in its

proposal: “[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxx].” AR at 1202. USPS noted MSA’s “[xxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” and MSA “[xxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxx].” Id. at 1455. USPS has not “entirely failed to consider an important

aspect of” MSA’s strength [xxxxxxxxxxxxx] in its proposal. Ala. Aircraft Indus., 586 F.3d at

1375; AR at 1454–1456 (TET Evaluation).

B. Review of Post-OCI Remand Investigation

On 8 March 2021, the Court issued a Remand Order regarding OCI and found the following:

The CO’s OCI report did not review Mr. Shelton’s TSA exit letter or include any

other communication with TSA regarding defendant-intervenor’s potential OCI,

but instead took the party being investigated at its word that there was no OCI. The

TSA exit letter was in the hands of the government (at least the TSA) and the 16

February 2021 status conference discussion demonstrates the TSA performed

something akin to an OCI review in preparing the TSA exit letter for Mr. Shelton.

SC Tr. at 13:16–20; 14:2–20. The CO did not report requesting or receiving any

TSA input and instead took defendant-intervenor’s conclusory email denying any

OCI at face value. AR at 630. The Court therefore finds the CO’s OCI

investigation process, and the SDRO’s affirmation of the OCI decision detailing a

lack of proper OCI investigation, to lack a rational basis—the OCI investigation

was arbitrary and capricious for conducting such a limited OCI review and reaching

a premature conclusion of no OCI risk. See AR at 630, 798, 815–16; Alabama

Aircraft Indus., 586 F.3d at 1375; U.S. Postal Serv., Supplying Principles and

Practices 7-15.2.1, Avoiding Real or Apparent Organizational Conflicts of Interest;

PAI Corp., 614 F.3d at 1352; Turner Const. Co., 645 F.3d at 1387. See Nat’l Org.

of Veterans’ Advocs., Inc. v. Sec’y of Veterans Affs., 260 F.3d 1365, 1380 (Fed. Cir.

2001) (finding the agency did not “provide a reasonable explanation for its

decision,” remanding for further consideration, and “further decid[ing] that the

[agency action] will remain in effect during the [remand].”). It further does not

appear the CO tracked the process outlined in the SP&P procedures as was required

to guide the OCI review process: insofar as the SP&Ps provide a guidance to

follow, the CO’s decision not to follow the SP&Ps after identifying a potential

OCI—without providing any explanation for the decision to divert from the

guidelines—further “lack[s] a rational basis.” See Domenico Garufi, 238 F.3d at

1332; OA Tr. at 25:12–26:20 (Government counsel noting the CO decision must

withstand rational basis scrutiny insofar as it was to be guided by an SP&P OCI

investigation process).

Remand Order at 24–25 (footnote omitted). The Court ordered a remand investigation,

according to the following:

USPS shall reopen the OCI investigation into defendant-intervenor and Mr. Shelton

according to guidelines provided by the SP&Ps and reassess a complete and

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documented review of the OCI in light of: (1) the government’s assertions at the

16 February 2021 status conference regarding the possibility of the record being an

incomplete representation of the CO’s actual 2020 investigation; (2) TSA or

defendant-intervenor’s production of Mr. Shelton’s TSA exit letter; (3) the

possibility of investigation or communication within USPS, or between USPS and

TSA, related to defendant-intervenor’s potential OCI not currently reported in the

record; (4) the MSA website detail regarding Mr. Shelton’s experience from

working with TSA; and (5) any other evidence USPS reflects as necessary to

consider regarding defendant-intervenor’s potential OCI.

. . . . The administrative record of remand proceedings shall include, as suggested

by the government at the 16 February 2021 status conference: (1) in camera review

of the Mail Amendment as agreed by the parties; (2) a copy of Mr. Shelton’s TSA

exit letter as defendant-intervenor agreed Mr. Shelton would submit; (3) the product

of TSA investigation behind Mr. Shelton’s exit letter; (4) any communications

within USPS or between USPS and TSA related to defendant-intervenor’s potential

OCI; and (5) summary report of additional review USPS conducts or action USPS

decides to take regarding defendant-intervenor’s potential OCI, including a

complete OCI decision based on all additional information.

Id. at 32.

The Post Office’s SP&Ps define an OCI as follows:

An organizational conflict of interest exists when the nature of the work to be

performed under a contract may give an offeror or supplier an unfair competitive

advantage and when an offeror or supplier has other interests that may impair its

objectivity or ability to render impartial assistance or advice or to provide

objectivity in performing the contract work.

USPS SP&Ss at 7-15.2, Organizational Conflicts of Interest (Suppliers). The SP&Ps further

advise:

As part of purchase planning (see 2-1, Develop Purchase Plan), contracting officers,

with the assistance of the purchase/SCM team, must attempt to identify

organizational conflicts of interest so that they may be avoided, neutralized or

mitigated (when purchases will be made noncompetitively, certain disclosures must

be made – see 2-10, Determine Extent of Competition). When a potential

organizational conflict is foreseeable, the contracting officer should consult with

assigned counsel and obtain the assistance of appropriate technical specialists to

consider the potential to avoid, neutralize or mitigate the organizational conflict of

interest. Mitigation actions may include, but are not limited to (a) developing a

solicitation provision restricting competition to offerors without conflicts of

interest, (b) including a contract clause limiting the supplier’s eligibility for future

contracts and subcontracts, and (c) the adoption of other measures to ensure as fair

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a competition as possible. Any limit on future contracts must be for a reasonable

period sufficient to avoid unfair competitive advantage or potential bias.

If it becomes apparent when proposals are received that participation by a particular

offeror could lead to an organizational conflict of interest and unfair competition,

the offeror may be disqualified and its proposal rejected. The contracting officer

may take actions necessary and in the interest of the Postal Service and the offerors,

to avoid, neutralize or mitigate the potential or apparent conflict of interest.

If the contracting officer decides to neutralize or mitigate a potential or apparent

organizational conflict of interest, he or she should include a written analysis of the

decision and the chosen course of action in the contract file. The analysis should

include a consideration of the potential benefits and detriments to the Postal Service

(including consideration of the overall business and competitive interests of the

Postal Service and how the appearance of an organizational conflict of interest may

affect them) and the offerors, and may consider information provided by offerors

in response to the solicitation, or obtained during discussions and negotiations.

SP&P 7-15.2.1, Avoiding Real or Apparent Organizational Conflicts of Interest.

On 5 April 2021, the government filed the administrative record of the CO’s remand OCI

investigation and analysis. See Index to the Remand Administrative Record at i, ECF No. 57-2.

The CO’s remand review stated the pre-existing record contained the entirety of the CO’s prior

OCI investigation and analysis: “I could not find and do not recall other non-privileged records

relating to my OCI analysis.” AR at 1863. The CO did not dispute the Court’s finding that the

initial OCI investigation record was insufficient; rather, the CO implicitly agreed with the

Court’s finding: “I undertook a renewed OCI review and produced a much more robust record

of the facts and my analysis.” Id. The CO explained he: “prepared a thorough set of questions

for both MSA and TSA”; “conducted telephonic interviews of.[sic] Gerald Goss of MSA and

Christopher Shelton of MSA”; conducted further written conversations and clarifications with

Mr. Goss and Mr. Shelton; and “further asked a couple of follow-up questions of TSA in

writing.” Id.

The CO determined the TSA and Mr. Shelton “both are essentially in agreement

regarding Mr. Shelton’s work at TSA, especially with respect to the mail amendment and the

USPS/TSA pilot for mail screening,” despite some apparent disagreement between the parties.

Id. at 1864–66. The CO acknowledged Mr. Shelton was involved in drafting the mail

amendment but concluded “[h]e did not have an active role in developing the mail amendment

(or any mail screening protocols) or the mail pilot. . . . [H]is involvement in developing mail

screening policies and in the mail pilot was at a minimum.” Id. at 1865–66. In contrast, the TSA

explained to the CO that Mr. Shelton contributed to formulating the mail amendment and the

pilot program, which led to this procurement. See id. at 1843–45.

The CO also determined, “[w]ith respect to Mr. Shelton’s post-employment ethics advice

received from TSA, Mr. Shelton and TSA had different recollections.” Id. at 1866. The CO

noted that “[i]n contrast” to Mr. Shelton’s recollections, “TSA has not located records of specific

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advice provided to Mr. Shelton regarding post-employment restrictions.” Id. The TSA told the

CO: “TSA Ethics attorneys have no written records of Mr. Shelton requesting, prior to his

departure, any investigations or research into whether the ethics restrictions would restrict his

employment with MSA.” Id. (quoting TSA Response to CO’s March 16 Questions, Question

1).3 The CO did not explore this contradiction further and instead determined, “it does not

appear to me that Mr. Shelton engaged in any conduct prohibited by the TSA Exit Clearance

Memorandum that he received.” Id.

The fact “that MSA received an initial version of the mail amendment to be able to

perform the pilot program,” according to the CO, “did not create an inappropriate unequal access

to information or unfair competitive advantage.” Id. at 1866–67. The CO determined this is

because not only will the pilot program performer receive a copy of the mail amendment, but

“[e]ach USPS supplier that performs this work will necessarily be issued a mail amendment by

TSA.” Id. at 1867. The CO found that if merely receiving a copy of the mail amendment

“created an unequal access to information OCI, the Postal Service would have to solicit only

non-incumbents each time it competed the requirement.” Id. The CO also noted “the

information learned from the pilot was included in the SOW that was provided to everyone.” Id.

Additionally, the CO explained, a system in which “those that participated in creating and

innovating new methods through a pilot with government agencies were banned from bidding on

any contract for the services,” the government “would never attract the help we need” for its

pilot programs. Id.

The CO noted that following the pilot program, MSA participated in “conversations

involv[ing] explanations by MSA of the proof of concept that was demonstrated through the pilot

program,” but “MSA did not participate in drafting the SOW.” Id. at 1868. The CO also quotes

the TSA’s explanation of the purpose of the pilot program: “The goals of the pilot were to verify

and evaluate the ability of a 3PK9-C to effectively screen U.S. Priority Mail in various

configurations, identify any operational issues or other factors impacted by the configurations,

and evaluate the alarm resolution processes for mail which contains a potential threat.” Id.

(quoting TSA Responses to CO’s March 16 questions at 4). The CO determined the SOW made

“key elements” of the mail amendment available to all offerors, so possession of the mail

amendment “was not critical to potential offerors in submitting offers.” Id. Additionally, the CO

noted “it did not appear that the mail amendment was used in evaluating the offers in any way.”

Id. at 1869. According to the CO, “the mail amendment could not have created an unfair

3

The CO also explained: “When I issued follow-up questions to TSA following my review of the MSA responses

to my questions, I asked specifically if the two TSA attorneys mentioned by Mr. Shelton (Ms. Fulp and Ms.

Flockhart), as having provided advice to him prior to his departure from TSA, had any recollection or record of such

conversations, which Mr. Shelton had stated were oral conversations. TSA responded that Ms. Fulp, the ethics

counsel mentioned by Mr. Shelton, did not recall providing written advice, but that her e-mail records were being

searched (although that process is ongoing at this time). TSA did not specifically comment whether she recalled

oral advice, which is what Mr. Shelton alleged occurred. From TSA’s response, I further understood that Ms.

Flockhart recalled speaking to him before his departure, and she recalled him saying that he had previously received

ethics advice relating to post-employment from Ms. Fulp but that Ms. Flockhart did not, herself, provide any such

advice. On April 1, 2021, we requested TSA ask Ms. Fulp whether she recalled providing Mr. Shelton any verbal

advice. TSA responded the same day as follows: ‘She did not recall. However, because she left TSA almost two

years ago and the fact that our attorneys also provide informal, general ethics guidance, it is difficult to assert

unequivocally that she did not speak with him about the relevant rules.’” AR at 1866 (citing March 31 TSA

Responses to CO Follow-up Questions, Question 1; TSA April 1 e-mail) (internal citation omitted).

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competitive advantage for MSA if MSA neither used the information in creation of its offer, nor

did the USPS evaluation team use it in evaluating offers.” Id.

The CO concluded the following: (1) MSA’s receipt of the mail amendment for the pilot

program “did not create an unfair competitive advantage for MSA”; (2) “any knowledge [Mr.

Shelton] had would not have informed MSA’s proposal”; (3) “[p]ossession of the mail

amendment does not create an unfair competitive advantage”; and (4) there is “no evidence that

any offerors were prejudiced by not having access to the mail amendment.” Id. The CO asserts

his remand investigation was “a much more thorough review of the potential OCI,” apparently

accepting the Court’s finding that the original OCI investigation was insufficient. Id. The fact

that at least three of the main conclusions in the CO’s “conclusions” section related to the mail

amendment demonstrates tunnel vision on the mail amendment during the OCI investigation.

See id. This demonstrates the remand investigation was itself insufficient and in violation of the

remand order, as the order did not mention the mail amendment in its instructions to the CO and

only instructed the administrative record of remand proceedings to include discussion of the mail

amendment in relation to proposals regarding in camera review of the mail amendment. See

Remand Order at 32.

The SP&Ps direct contracting officers to “attempt to identify organizational conflicts of

interest so that they may be avoided, neutralized or mitigated.” SP&P at § 7-15.2.1. “An

unequal access to information OCI may arise in situations where an offeror, by virtue of [prior]

performance on a government contract, obtains access to non-public information that other

offerors do not have, which provides it an unfair competitive advantage on a new procurement.”

Ernst & Young, LLP v. United States, 136 Fed. Cl. 475, 508 (2018) (quoting Jacobs Tech. Inc. v.

United States, 100 Fed. Cl. 198, 210 (Fed. Cl. 2011)). “[A]n unequal access OCI requires that a

firm have access to non-public information that is competitively useful.” Turner Const. Co. v.

United States, 645 F.3d 1377, 1387 (Fed. Cir. 2011) (citing Axiom Res. Mgmt. v. United States,

564 F.3d 1374, 1377 n.1 (Fed. Cir. 2009)). “To prevail on an OCI claim of unequal access to

information, it is axiomatic that the government contractor must have access to the kind of

specific, sensitive information that would create an OCI.” Alabama Aircraft Indus., Inc.-

Birmingham v. United States, 83 Fed. Cl. 666, 688 (2008) (internal quotation marks omitted),

rev’d on other grounds, 586 F.3d 1372 (Fed. Cir. 2009). “Thus, for a bid protester to succeed on

an ‘unequal access to information’ OCI claim, it must demonstrate ‘the awardee was in the

unique position of [] having access to information to which no other offeror had access.’” Id.

(internal quotation marks omitted); see also Johnson Controls World Servs., Inc., B–286714.2,

2001 WL 122352, at *5, Feb. 13, 2001 (finding an “unequal access to information” OCI existed

when the incumbent had access to a database that provided more detailed information about the

procurement than was available in the public domain).

A biased ground rules OCI exists when contractors, “by participating in the process of

setting procurement ground rules, have special knowledge of the agency’s future requirements

that may skew the competition in its favor.” Turner Const., 645 F.3d at 1382. A biased ground

rules OCI may occur when a firm “has, in some sense set the ground rules for another

government contract by, for example, writing the statement of work or the specifications.” Sys.

Plus, Inc. v. United States, 69 Fed. Cl. 757, 773 (2006) (quoting Aetna Gov’t Health Plans, Inc.,

Found. Health Fed. Servs., Inc., B-254397 et al., 1995 WL 449806 (Comp. Gen. July 27, 1995)).

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A biased ground rules OCI also “may occur in situations where an offeror, as part of [prior]

performance of a government contract, has provided input to the statement of work or

specifications of a [solicitation] in such a way as to provide the firm a competitive advantage in

responding to the [solicitation].” Jacobs Tech., 100 Fed. Cl. at 210 (citing Turner Const., 94

Fed. Cl. at 569). The FAR contains a “development and design” exception to the biased ground

rules OCI. FAR 9.505-2(b)(1)(ii); see AAR Manufacturing v. United States, 149 Fed. Cl. 514,

526–28 (2020) (“The FAR justifies that exception because [i]n development work, it is normal to

select firms that have done the most advanced work in the field.”) (internal citations and

quotation marks omitted).

“Hard facts” and “concreteness” are necessary to show that a contracting officer’s OCI

determination lacked a rational basis under the APA’s arbitrary and capricious standard—

“sufficient alignment of interests,” “vague allegations,” “mere suspicion and innuendo” are not

enough. Turner Constr., 645 F.3d at 1385 (Fed. Cir. 2011) (internal quotation marks omitted).

“‘Hard facts’ do not need to show an actual conflict—a potential conflict can be sufficient.” Id.

at 1387. “An OCI must be established by ‘hard facts’ that indicate the existence or potential

existence of a conflict,” but “[t]hese ‘hard facts’ do not need to show either an actual conflict or

a negative impact from a conflict.” Turner Const. Co. v. United States, 94 Fed. Cl. 561, 573

(2010), aff’d, 645 F.3d 1377 (Fed. Cir. 2011) (citing CACI, Inc. v. United States, 719 F.2d 1567,

1582 (Fed. Cir. 1983)). “The ‘hard facts’ that indicate the existence or potential existence of

impropriety stand opposed to inferences based upon ‘suspicion and innuendo.’” Id. (citing

CACI, 719 F.2d at 1582). “If ‘hard facts’ establish the appearance of impropriety, it is not

irrational for a reviewing body to” find the agency action arbitrary and capricious. Id.

Even “a finding of an appearance of impropriety” is sufficient for a finding of OCI. NKF

Engineering, Inc. v. U.S., 805 F.2d 372, 376 (1986). In NKF Engineering, Mr. Park, a civilian

employee of the Navy who chaired a Contract Award Review Panel applied to work at contractor

NFK after it submitted a bid for a contract for which Mr. Park helped prepare the terms of the

solicitation. Id. at 373-74. Mr. Park told the NFK that Navy legal counsel cleared him to work

for the contractor, “[a]lthough he in fact never checked” with the Navy, and nobody at NFK

“was aware that Mr. Park had involvement with [the solicitation] beyond having knowledge of

its technical requirements as stated in the contract’s ‘Scope of Work.’” Id. at 374. NFK then

“submitted the winning bid that included a [significant] price revision.” Id. at 376. The Federal

Circuit held, “[w]hether or not inside information was actually passed from [the government

official] to [the awardee], the appearance of impropriety was certainly enough for the CO to

make a rational decision to disqualify [the awardee].” Id. The Federal Circuit also held “an

appearance of impropriety” can exist even if the employee moving from the government to an

offeror “was not ‘substantially’ participating in the contract at the time he was negotiating for

employment.” Id. at 376–77.

“Incumbent status by itself is insufficient to create an OCI.” Alabama Aircraft Indus., 83

Fed. Cl. at 686; see also WinStar Commc’ns, Inc. v. United States, 41 Fed. Cl. 748, 763 (1998)

(“An offeror’s competitive advantage gained through incumbency is generally not an unfair

advantage that must be eliminated.”). In Turner, the Federal Circuit upheld this court’s

determination the GAO’s finding of OCI was flawed because the GAO only established that

“employees ‘may have had access’ to unidentified information,” which is a finding merely of

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“possible rather than actual access.” Turner Const., 645 F.3d at 1387. This finding of possible

access was insufficient because “an unequal access OCI requires that a firm have access to non-

public information that is competitively useful.” Id. (citing Axiom, 564 F.3d at 1377 n.1).

1. Whether the CO Sufficiently Investigated the Timing of Mr. Shelton’s

Job Search in Contrast to the Procurement Timeline

AMK9 argues: the CO “should have disqualified MSA from the competition based on

Mr. Shelton’s possession of non-public competitively useful information that he obtained while

working with TSA and USPS to develop and implement the 3PK9-C Mail Amendments and

Pilot Program. Instead, [the CO] issued a decision that failed to meaningfully consider whether

MSA’s employment of Mr. Shelton created an unequal access OCI.” AMK9 Post-Award MJAR

at 20. Specifically, AMK9 alleges, the CO “failed to consider the information that Mr. Shelton

could have obtained as an employee of TSA that could have provided MSA with an advantage.”

Id. at 21. AMK9 observes MSA received several strengths in its proposal that went beyond the

requirements of the solicitation, and AMK9 alleges: “While this may have been a matter of

MSA proposing something on its own that exceeded USPS’s objectives, it is just as likely a

practice that Mr. Shelton established or created while at TSA that did not constitute a

requirement.” Id. AMK9 argues the CO “did not resolve the factual dispute as to whether Mr.

Shelton was told by TSA attorneys that no ethical or conflict of interest restrictions applied to his

employment with MSA.” Id. at 22. Counsel for GK9 noted at oral argument, “there’s a lot that

[Mr. Shelton] said that has borne out to be untrue, and the investigation there is incomplete as it

relates to the ethics record and these conflict letters he supposedly did or didn’t get.” Post-

Award OA Tr. at 64:13–16.

The post-remand filings clarify the following facts related to the CO’s OCI investigation.

The USPS “Start the Clock Date” on the solicitation was 18 July 2018; USPS issued a request

for information on 14 August 2020; USPS issued the solicitation on 21 September 2020; and the

proposal due date was 5 October 2020. AR at 24 (RFI), 776. On 8 October 2020, the CO wrote

an email to MSA stating USPS “recalls that Mr. Shelton was a TSA employee who had a

supervisory role at the TSA Canine Training Center and was involved in the USPS canine

screening pilot program, both from the perspective of TSA rules and regulations and approvals

of USPS processes in the pilot program.” Id. at 614. Meanwhile, USPS began the pilot program

with MSA on 20 August 2019, and it concluded 15 November 2019. Id. at 2538. Mr. Shelton

states TSA attorneys Katherine Fulp and Wendy Flockhart cleared him to work at MSA without

restriction. Id. at 1777–78. Ms. Fulp left TSA around 3 May 2019, nearly five months before

Mr. Shelton left TSA to become MSA’s vice president of air cargo on 2 October 2019. Id. at

621, 1855. If Mr. Shelton discussed joining MSA with Ms. Fulp, as he states he did, this means

Mr. Shelton had conversations about joining MSA no later than around 3 May 2019 or earlier;

however, Mr. Shelton may have engaged in conversations with MSA and other employers about

opportunities even before this time period. The timeline of the creation and procurement for the

pilot program in relation to Mr. Shelton’s pursuit of private employment opportunities is unclear,

although this information is highly relevant to the CO’s OCI investigation. The CO does not

explain why he did not further investigate this information.

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During the remand investigation, the TSA informed USPS Mr. Shelton was still at the

TSA during the pilot program, participated in that program on the government’s behalf, and

helped develop the mail mmendments. Id. at 1843–45. The TSA stated Mr. Shelton, among

other things: assigned a CTC team to work with TSA Policy, Plans, and Engagement; TSA

Compliance; and TSA Chief Counsel offices to develop the TSA 3PK9-C program. Id. at 1843.

Mr. Shelton was consulted as a subject matter expert on canine screening for the mail screening

pilot. Id. at 1844. The TSA agreed Mr. Shelton had some knowledge of the mail amendment

and worked on pilot program plans, as Mr. Shelton was copied on edits to the mail amendment in

August 2019, after he apparently spoke with Ms. Fulp about his decision to join MSA as early as

May 2019. See AR at 1855, 1864–65. The CO did not follow up to investigate the timeline of

Mr. Shelton’s agreement to join MSA, when he was involved in the process of editing the mail

amendment months later and potentially 10 months following the “start the clock date” on the

solicitation. Id. at 1864 (“According to the information that I received from TSA and Mr.

Shelton, they both are essentially in agreement regarding Mr. Shelton’s work at TSA, especially

with respect to the mail amendment and the USPS/TSA pilot for mail screening, which occurred

in late 2019.”).

Even MSA recognized Mr. Shelton’s move from the TSA to MSA could create an OCI or

appearance of OCI because MSA initially “walled off [Mr. Shelton] from participation in the

pilot program to avoid any possibility or appearance of a conflict of interest.” Id. at 1773. While

Mr. Shelton was walled off until the end of the pilot program in November 2019, the CO was

aware MSA does not assert he was walled off from this procurement. Id. at 1866 (quoting Mr.

Shelton as stating to the CO: “Once I began employment with MSA, my duties were [xxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. However, in recent months I

have begun to work [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].”). The

CO made a preemptive conclusion without fully resolving whether the risk MSA identified that

caused it to wall off Mr. Shelton in October of 2019 also applied to this procurement.

The CO also did not fully resolve whether there was any OCI or appearance of OCI for

Mr. Shelton to continue working for TSA if he was applying to industry jobs or may have

secured a future work agreement with MSA. See Turner Const., 94 Fed. Cl. at 573. The CO did

not ask Mr. Shelton when he first contacted MSA, when he signed for employment, when he was

walled off, why he was walled off, or what work he was walled off from and for how long. In

light of Mr. Shelton’s job search timeline and continued work on issues related to this proposal,

the CO preemptively concluded the investigation: (1) answered these questions; and (2) resolved

any concerns as to Mr. Shelton not being walled off from the proposal for this procurement. The

TSA-work information Mr. Shelton had may have been competitively useful because, through

his participation in the pilot and the development of the mail amendment, Mr. Shelton may have

helped form and gain understanding of the TSA and USPS’s goals in this procurement, giving

MSA a competitive advantage. See AR at 1843–45 (TSA discussing Mr. Shelton’s experience

developing the mail amendment and pilot program). The Court therefore finds the CO’s

investigation into this aspect of MSA’s appearance of unequal access OCI to be incomplete and

not fully substantiated by the record—the CO did not inquire as to any competitive advantage in

this procurement MSA might have obtained through Mr. Shelton’s experience or MSA’s refusal

to wall Mr. Shelton off from this procurement. The remand OCI investigation into the timing of

Mr. Shelton’s job search still leaves the CO and the Court unable to determine whether MSA has

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an OCI. SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“Chenery I”) (“The grounds upon

which an administrative order must be judged are those upon which the record discloses that its

action was based.”); Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d

1324, 1327 (Fed. Cir. 2001) (holding remanding the case avoids invading the province of the

agency and substituting the court’s judgment); Nat’l Org. of Veterans’ Advocs., Inc. v. Sec’y of

Veterans Affs., 260 F.3d 1365, 1380 (Fed. Cir. 2001) (“It may be that the agency can provide a

reasonable explanation for its decision[,] . . . [b]ut it has not yet done so.”).

A biased ground rules OCI occurs when a firm “has, in some sense set the ground rules

for another government contract by, for example, writing the statement of work or the

specifications.” Sys. Plus, 69 Fed. Cl. at 773 (citing Aetna Gov’t Health Plans, Inc., Found.

Health Fed. Servs., Inc., B-254397 et al., 1995 WL 449806 (Comp. Gen. July 27, 1995)). Based

on the timeline established supra, the CO should have also inquired as to whether a biased

ground rules OCI existed as a product of Mr. Shelton formulating the mail amendment and pilot

program that led to this procurement while under agreement to work at MSA. See 1843–45. The

CO preemptively rejected the possibility of a biased ground rules OCI because “MSA did not

help draft the Statement of Work” without fully resolving the timeline of Mr. Shelton’s

involvement. AR at 1863. The CO has not fully investigated how much risk it was for Mr.

Shelton to keep working for TSA if he was already job searching and might have had an

agreement to work for MSA, since Mr. Shelton could have been contributing to the ground rules

of the solicitation with the knowledge he was seeking employment with—or already agreed to

work for—an offeror for this procurement. As the CO did not fully investigate the timing of Mr.

Shelton’s employment search in comparison with his USPS and TSA contributions, the remand

OCI investigation still leaves the CO and the Court unable to determine whether MSA has an

OCI. Chenery I, 318 U.S. at 87; Domenico Garufi, 238 F.3d at 1327; Nat’l Org. of Veterans’

Advocs., 260 F.3d at 1380.

2. Whether the CO Resolved Factual Disputes as to Whether Mr. Shelton

Sought and Obtained Ethics Clearance from the TSA to Work for a

Contractor on this Procurement

AMK9 argues the CO “did not resolve the factual dispute as to whether Mr. Shelton was

told by TSA attorneys that no ethical or conflict of interest restrictions applied to his

employment with MSA.” Post-Award MJAR at 22 (citing AR at 1866). GK9’s reply also states,

“the contracting officer ignored TSA’s statement that it did not have an ethics letter for Mr.

Shelton.” GK9 Resp. at 5–6 (citing AR at 1843). At oral argument, counsel for GK9 noted

unresolved OCI issues in this case “could have been resolved if there had been an ethics letter

which specifically addressed th[em], and there is not and potentially, if the contracting offer had

engaged in that discussion with TSA, but he didn’t.” Post-Award OA Tr. at 112:9–13. Also at

oral argument, counsel for the government agreed the exit letter was a “generic exit letter” and

stated it was “the only one that I believe has been produced by TSA or MSA relating to Mr.

Shelton.” Id. at 111:5–10.

At the 16 February 2021 status conference, counsel for the government stated Mr.

Shelton “received an exit letter when he left TSA with respect to whether there were conflicts,”

which was the product of “an investigation by or at least a review by TSA officials, including

their ethics office.” 16 February 2021 SC Tr. at 13:16–20. The government stated it was not

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“aware of” any reason the CO could not have requested this letter from the TSA as part of his

initial investigation into Mr. Shelton. Id. at 14:21–15:11. Counsel for the government

explained, “we know that the Postal Service did reach out to TSA with respect to the request to

release the Mail Amendment to bidders, which was denied by TSA. So I’m not aware at this

time of whether there was a reason the CO couldn’t have reached out to TSA.” Id. at 15:4–8.

The government later stated, “we don’t know is what, if any, file there was leading up to the

issuance of the letter, the exit letter for Mr. Shelton. So . . . whether there were interviews or

documents or things of that nature, we don’t know what’s in the file since we haven’t been

shown it.” Id. at 43:3–8. The Court’s Remand Order found “the CO’s OCI investigation

process, and the SDRO’s affirmation of the OCI decision detailing a lack of proper OCI

investigation, to lack a rational basis—the OCI investigation was arbitrary and capricious for

conducting such a limited OCI review and reaching a premature conclusion of no OCI risk.”

Remand Order at 24–25.

The CO observed in his discussion of his post-remand investigation, “[w]ith respect to

Mr. Shelton’s post-employment ethics advice received from TSA, Mr. Shelton and TSA had

different recollections.” AR at 1866. The CO noted, “TSA has not located records of specific

advice provided to Mr. Shelton regarding post-employment restrictions.” Id. The CO further

discussed his follow-up with TSA regarding the two TSA attorneys Mr. Shelton states he

received advice from regarding ethics conflicts: “I asked specifically if the two TSA attorneys

mentioned by Mr. Shelton (Ms. Fulp and Ms. Flockhart), as having provided advice to him prior

to his departure from TSA, had any recollection or record of such conversations, which Mr.

Shelton had stated were oral conversations.” Id. According to the CO, “TSA did not specifically

comment whether [Ms. Fulp] recalled oral advice, which is what Mr. Shelton alleged occurred,”

and “Ms. Flockhart recalled speaking to him before his departure, and she recalled him saying

that he had previously received ethics advice relating to post-employment from Ms. Fulp but that

Ms. Flockhart did not, herself, provide any such advice.” Id. The CO also reports Ms. Fulp

reported “[s]he did not recall” whether she provided Mr. Shelton with any ethics advice, but “it is

difficult to assert unequivocally that she did not speak with him about the relevant rules.” Id.

Mr. Shelton and MSA report he spoke with Ms. Fulp and then Ms. Flockhart “in or about

September, 2019.” Id. at 1777. TSA reports, in contrast, “Ms. Fulp left TSA in early May

2019,” while “Ms. Flockhart did not provide Mr. Shelton with any post-employment

counseling.” Id. at 1855. The CO’s attempt to resolve this factual conflict is incomplete because

it is not fully substantiated by the record; rather, the CO immediately transitioned to asserting,

“Mr. Shelton stated that when he joined TSA [sic], he did not focus on any work for the

government for a period of one year to avoid any ethics issue.” Id. at 1866.

The TSA reported to the CO: “TSA Ethics attorneys have no written records of Mr.

Shelton requesting, prior to his departure, any investigations or research into whether the ethics

restrictions would restrict his employment with MSA. TSA Ethics has no responsive records to

this request.” Id. at 1843. The CO’s remand investigation was incomplete and not fully

substantiated because the CO failed to conduct any analysis into the conflicting reports from Mr.

Shelton and the TSA or any follow-up with the TSA about their records and standard ethics

review record-keeping practices; the CO instead preemptively took Mr. Shelton at his word and

in conflict with TSA records. Nat’l Org. of Veterans’ Advocs., 260 F.3d at 1380 (“It may be that

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the agency can provide a reasonable explanation for its decision[,] . . . [b]ut it has not yet done

so.”).

The CO determined: “From the facts before me, it does not appear to me that Mr.

Shelton engaged in any conduct prohibited by the TSA Exit Clearance Memorandum that he

received.” AR at 1866. The CO accepted the TSA exit letter as a definitive statement of Mr.

Shelton’s lack of ethical conflicts without fully investigating its provenance, despite it being a

form letter that: (1) does not provide any substantiation that TSA counsel provided the letter as a

product of legal counseling with Mr. Shelton; (2) does not identify Mr. Shelton or his position at

TSA; (3) does not discuss Mr. Shelton’s future employment; (4) provides no timeline or date of

ethics approval; and (5) contains no other facts or legal analysis regarding Mr. Shelton’s

employment with MSA. The CO stated, “I had communications with counsel pursuant to the

SP&Ps guidance during my initial OCI review,” and he also stated he prepared the remand

investigation questions for MSA and TSA “with the assistance of counsel.” Id. at 1863. The CO

did not provide in the remand record any analysis from a legal or ethics expert in coming to his

conclusion of no OCI (or appearance of OCI), and he does not state whether his conclusions

were substantiated by legal counsel. The SP&Ps require: “When a potential organizational

conflict is foreseeable, the contracting officer should consult with assigned counsel and obtain

the assistance of appropriate technical specialists to consider the potential to avoid, neutralize or

mitigate the organizational conflict of interest.” USPS SP&Ps at 7-15.2.1. The CO’s remand

investigation did not fully detail whether the CO consulted with counsel in forming legal

conclusions that did not fully resolve contradictory factual reports from the remand investigation

into: (1) the provenance of Mr. Shelton’s exit letter; and (2) whether or not Mr. Shelton

consulted with agency counsel on post-government-employment OCI issues. The unresolved

factual disputes related to Mr. Shelton’s pursuit of ethics clearance still leaves the CO and the

Court unable to determine whether MSA has an OCI. Chenery I, 318 U.S. at 87; Domenico

Garufi, 238 F.3d at 1332; Nat’l Org. of Veterans’ Advocs., 260 F.3d at 1380.

The CO also did not fully substantiate the timeline or the factual basis for his conclusion

that Mr. Shelton sufficiently addressed OCI concerns by being walled off from ethical conflicts

within MSA: “Mr. Shelton stated that when he joined [MSA], he did not focus on any work for

the government for a period of one year to avoid any ethics issue.” AR at 1866. Mr. Shelton

instead reported to the CO: “Once I began employment with MSA, my duties were [xxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]” without mentioning a time

period on this walling off, and Mr. Shelton stated, “in recent months I have begun to [xxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].” Id. at 1836. The CO did not

provide any reason to believe the federal government contract projects Mr. Shelton began

working on in recent months did not include MSA’s 5 October 2020 proposal, which [xxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. AR at 1210. At oral argument, MSA

admitted the veracity of Mr. Shelton’s reported walling off is based on “only just MSA’s

representation.” Post-Award OA Tr. at 106:19. This demonstrates the CO did not fully

substantiate in the record whether OCI concerns were addressed by MSA’s walling off

procedures or if Mr. Shelton was actually walled off; rather, the CO did not appear to inquire

into any further details related to MSA and Mr. Shelton’s walling off procedures, nor did he ask

the TSA or USPS whether it understood procedures to be sufficient.

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Counsel for AMK9 also noted at oral argument the TSA form exit letter “seems to

provide no restrictions, and I believe the [g]overnment also finds that there’s no restrictions. So

to the extent that MSA apparently took this broad step to avoid some sort of ethics concern, it’s

not supported by the documents we have.” Post-Award OA Tr. at 112:19-24. The CO also has

not yet investigated why MSA felt the need to take such a broad step to avoid ethical conflicts

before then allowing Mr. Shelton to be involved with this procurement; rather, the CO credited

Mr. Shelton’s form exit letter and MSA’s walling off Mr. Shelton from other conflicts as

evidence that Mr. Shelton’s involvement presented no OCI in this procurement. The CO has not

fully explained why MSA walling Mr. Shelton off did not at least lead to investigation by the CO

as to what conflicts or potential conflicts MSA identified and sought to avoid and why this

procurement was not part of MSA’s walling off. The CO noted in a remand investigation

question to MSA: “On MSA’s website, Mr. Shelton was described as being ‘instrumental in the

development and implementation of the Certified Cargo Security Program Canine (CCSP-K9),

the TSA program regulating the use of third-party canine providers for explosive detection

screening in regulated air cargo environments.’” AR at 1774. The CO has not asked why MSA

was advertising Mr. Shelton’s experience in this way if he was walled off from government

contract work; instead, the CO asked MSA for insight into Mr. Shelton’s work at the TSA, which

is a question he should have instead asked the TSA or Mr. Shelton. The CO’s decision to treat

MSA’s walling off of Mr. Shelton from past procurements as proof there is no OCI in this

procurement, from which Mr. Shelton was not walled off, is not fully substantiated by the record.

The CO preemptively concluded this walling off and the form ethics letter resolved issues related

to unanswered questions in the timeline of Mr. Shelton’s conversations with TSA ethics

attorneys—a complete OCI investigation must include resolution of these issues in light of

MSA’s past walling off of Mr. Shelton being insufficient for resolution. See Alabama Aircraft

Indus., 586 F.3d at 1375; SP&P 7-15.2.1; Turner Const., 645 F.3d at 1387. The CO’s decision

to accept MSA’s walling off of Mr. Shelton without further investigation still leaves the CO and

the Court unable to determine whether MSA has an OCI. See Chenery I, 318 U.S. at 87;

Domenico Garufi, 238 F.3d at 1332; Nat’l Org. of Veterans’ Advocs., 260 F.3d at 1380.

3. Whether the CO Sufficiently Resolved Mr. Shelton’s Appearance of OCI

Regarding the Mail Amendment and Pilot Program

GK9 notes the “TSA acknowledged that Mr. Shelton ‘was consulted as [a] canine subject

matter expert (SME)’ in connection with the mail amendment.” GK9 MJAR at 15 (citing AR at

1844). AMK9 explains its understanding of the CO’s error in three steps: (1) in finding “that

TSA, MSA, and Mr. Shelton ‘are essentially in agreement regarding Mr. Shelton’s work at TSA,

especially with respect to the mail amendment and the USPS/TSA pilot for mail screening,

which occurred in late 2019’”; AMK9 Post-Award MJAR at 20 (quoting AR at 1864); (2) in

failing “to consider the information that Mr. Shelton could have obtained as an employee of TSA

that could have provided MSA with an advantage”; id. at 21; and (3) in “not resolv[ing] the

factual dispute as to whether Mr. Shelton was told by TSA attorneys that no ethical or conflict of

interest restrictions applied to his employment with MSA.” Id. at 22 (citing AR at 1866).

The government arg

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