Englobal Government Services, Inc. v. United States

In the United States Court of Federal Claims

No. 21-2317C

(Filed Under Seal: May 4, 2022)

(Reissued for Publication: May 12, 2022)

)

ENGLOBAL GOVERNMENT )

SERVICES, INC., )

)

Plaintiff, )

)

v.

)

THE UNITED STATES, )

)

Defendant, )

)

and )

)

KBR SERVICES, LLC, )

Defendant- )

Intervenor. )

)

Alexander J. Brittin, Brittin Law Group, PLLC, Washington, D.C., for Plaintiff. Of

counsel were Mary Pat Buckenmeyer and A. Jonathan Brittin, Jr., Dunlap Bennett &

Ludwig, PLLC.

Shari A. Rose, Commercial Litigation Branch, Civil Division, United States Department

of Justice, Washington, D.C., for Defendant. With her on the briefs were Brian M.

Boynton, Acting Assistant Attorney General, Civil Division, Patricia M. McCarthy,

Director, and Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washington, D.C. Of counsel were Adam

J. Heer and Rachel M. Noble, United States Defense Logistics Agency — Land and

Maritime.

Seth M. Locke, Perkins Coie LLP, Washington, D.C., for Defendant-Intervenor. With him

on the briefs were Julia M. Fox and Paul M. Korol.

OPINION AND ORDER *

SOLOMSON, Judge.

Following the buildup of the United States military during World War II, the

federal government sought ways to coordinate logistics support across the armed

forces. 1 A postwar commission led by former President Herbert Hoover recommended

a centralized system of logistics management; in the following decades, the military

began to coordinate military support through various formal bodies, including a system

of commodity manager agencies located within the various military branches. 2

Eventually, the government established a single agency to coordinate logistics support

— the Defense Supply Agency, 3 which in 1977 was officially renamed the Defense

Logistics Agency (“DLA” or the “Agency”). 4 Today, DLA employs a staff of roughly

26,000, annually procures more than $41 billion in goods and services, and “manages

the end-to-end global defense supply chain,” coordinating a vast range of items ranging

from medical equipment to construction material to petroleum products. 5

In this post-award, bid protest-type action pursuant to 28 U.S.C. § 1491(b),

Plaintiff, ENGlobal Government Services, Inc. (“EGS”), challenges the decision of

Defendant, the United States, acting by and through DLA, to award a single firm-fixed-

price indefinite-delivery, indefinite-quantity (“IDIQ”) contract to Defendant-Intervenor,

KBR Services, LLC (“KBR”), for the maintenance of automated fuel handling equipment

(“AFHE”) systems. EGS objects to the award to KBR as arbitrary, capricious, and

otherwise contrary to law. The parties filed cross-motions for judgment on the

*Pursuant to the protective order in this case, the Court initially filed this opinion under seal on

May 4, 2022, and directed the parties to propose redactions of confidential or proprietary

information by May 11, 2022. The parties have jointly submitted proposed redactions to the

Court. ECF No. 37. The Court adopts those redactions, in part, as reflected in this public

version of the opinion. Words or phrases that are redacted have been replaced with [ * * * ].

1 History — Origins, Defense Logistics Agency, https://www.dla.mil/AboutDLA/History/

(last visited Apr. 11, 2022).

2For example, “[t]he Army managed food and clothing; the Navy managed medical supplies,

petroleum and industrial parts; and the Air Force managed electronic items.” Id.

3 Id.

4 History — Growing, Defense Logistics Agency, https://www.dla.mil/AboutDLA/History/

(last visited Apr. 11, 2022).

5About the Defense Logistics Agency, Defense Logistics Agency,

https://www.dla.mil/AboutDLA/ (last visited Apr. 11, 2022).

2

administrative record pursuant to Rule 52.1 of the Rules of the United States Court of

Federal Claims (“RCFC”).

For the reasons set forth below, the Court GRANTS the government’s and

Defendant-Intervenor’s respective motions for judgment on the administrative record.

The Court DENIES EGS’s motion for judgment on the administrative record.

I. FACTUAL BACKGROUND 6

A. The Solicitation and Proposals

Seeking proposals for the maintenance of all AFHE 7 sites worldwide, DLA

issued Solicitation SP4702-20-R-0014 on June 17, 2020 (the “Solicitation”) as a request for

proposals (“RFP”). AR 337–42; AR 1317 (Performance Work Statement) (“PWS”). The

ultimate awardee would provide DLA with, among other things, all the personnel,

equipment, materials, and services required to maintain its AFHE sites, which span

from Japan to Greenland to Beaufort, South Carolina. AR 1317–18 (PWS). EGS is the

incumbent contractor for the services sought.

The Solicitation anticipated awarding a single, fixed-price IDIQ contract with a

one-year base period and four one-year options; the contract’s guaranteed minimum

value is $100,000 and its maximum value is $49,500,000. AR 345; AR 630 (§ M.1.4); AR

294 (Acquisition Plan). The Solicitation provided for the contract to be awarded

pursuant to a best value tradeoff analysis, considering five factors: (1) Technical

Approach (Factor 1); (2) Maintenance Program Management Approach and Personnel

Qualifications (Factor 2); (3) Past Performance (Factor 3); (4) CyberSecurity (Factor 4);

and (5) Price (Factor 5). AR 630 (§ M.2.1).

6This background section constitutes the Court’s findings of fact drawn from the administrative

record. Judgment on the administrative record, pursuant to RCFC 52.1, “is properly

understood as intending to provide for an expedited trial on the record” and requires the Court

“to make factual findings from the record evidence as if it were conducting a trial on the

record.” Bannum, Inc. v. United States, 404 F.3d 1346, 1354, 1356 (Fed. Cir. 2005); see also infra

Section IV. Citations to the administrative record (ECF No. 22, as corrected by ECF No. 23) are

denoted as “AR” followed by the page number. Additional findings of fact are contained in

Section V.

7 The Solicitation explains that “the primary purpose” of the AFHE system is “to automate both

transfer and inventory functions in order to reduce the risk of spills and leakage of petroleum

products, thus reducing the risk of polluting the environment.” AR 1317 (Performance Work

Statement). The system “includes automation of valves, fuel transfer pumps, tank gauging,

metering systems, and pipeline instrumentation.” AR 1317.

3

Regarding price, the Solicitation established multiple fixed-price contract line

item numbers (“CLINs”). AR 638. Of particular relevance to this protest is CLIN 0001,

“Transition-In Plan,” which set “a 90 calendar day transition period” at the beginning of

the contract in order to “minimize any decrease in productivity and to prevent possible

negative impacts on additional services.” AR 1330 (PWS). CLIN 0001 provided that

throughout the 90-day transition, the “Predecessor Contractor” — in this case, EGS, see

AR 4063 — was to “retain full responsibility for tasks and deliverables”; the awardee

would assume responsibility only after the 90-day transition period. AR 1330.

Accordingly, the Solicitation allowed offerors to propose no transition costs. AR 626

(§ L.3.5.2.a.i) (“The Offeror may propose zero cost if there is no cost, however, the

Offeror is responsible for providing all support required.”).

The Solicitation further provided that “Factor 1 is significantly more important

than Factor[s] 2, 3 and 4” and that the “non-price factors (Factors 1, 2, 3 and 4), when

combined[,] are significantly more important than price.” AR 630 (§ M.2.2). Consistent

with a typical best value framework, the Solicitation provided that “[a]s the non-price

ratings become more equal among proposals, the evaluated price becomes more

important.” AR 630 (§ M.2.2). 8 The government intended to conduct discussions. AR

629 (§ M.1.2) (“The Government intends to hold discussions but reserves the right to

make awards without discussion.”).

The Solicitation established that the government would evaluate Factors 1 and 2

using a color-based and adjectival rating system. AR 632 (§ M.3.2). The government

would evaluate Factor 3 with an adjectival “Performance Confidence Assessment.” AR

635 (§ M.3.3.6) (listing ratings ranging from “substantial confidence” to “no confidence”

or “neutral confidence”). 9 The government was to evaluate Factor 4 via a binary

“acceptable” or “unacceptable” rating method. AR 637 (§ M.3.4).

8 The Solicitation also provided that the Price factor ultimately could be dispositive:

Accordingly, when Offerors are considered essentially equal in terms of technical

capability, price may become the determining factor for award. The Government

reserves the right to award to a lower cost Offeror when the offers are considered

essentially equal in terms of technical capability, or when specific strengths and/or

benefits associated with a technically superior offer do not support the payment

of any associated cost or price premium.

AR 629 (§ M.1.1).

9The Solicitation described three “aspects” within Factor 3 that would receive independent

adjectival ratings — recency, relevance, and quality. AR 633–35 (§§ M.3.3.1–3.3.6). The ratings

for these “aspects” ultimately rolled up into an overall “performance confidence assessment”

for Factor 3. AR 635 (§ M.3.3.6).

4

Finally, as explained below, the Solicitation required a price realism analysis as

part of DLA’s evaluation of Factor 5, Price. AR 637 (§ M.3.5) (providing that DLA may

reject “[p]roposals which are unrealistic in terms of technical or schedule commitments,

or unrealistically high or low in terms of cost”).

B. Initial Submissions, Evaluation, and Award

DLA received timely proposals from three offerors: EGS, KBR, and Arseal

Technologies, LLC. AR 2468 (Pre-Negotiation Briefing Memorandum).

In accordance with the Source Selection Plan, the Source Selection Team was

comprised of a Source Selection Authority (“SSA”), a Source Selection Evaluation Board

(“SSEB”), and a Procuring Contracting Officer (“PCO”). AR 311 (Source Selection Plan).

The SSEB, in turn, was comprised of several independent evaluation teams, including:

a Technical Evaluation Team (“TET”) to evaluate Technical Approach and Maintenance

Program Management Approach and Personnel Qualifications, a Past Performance

Evaluation Team, a CyberSecurity Evaluation Team, and a Price Evaluation Team

(“PET”). AR 311–315 (Source Selection Plan).

After evaluating the proposals, DLA established a competitive range — which

included all three offerors — and conducted two rounds of discussions. AR 3616–20

(Price Negotiation Memorandum (“PNM”)). The first round of discussions, which the

government held via teleconference on September 23, 2020, involved both KBR and

EGS. AR 3619 (PNM).

During this first round of discussions, and as relevant to this protest, the

government advised EGS to lower several of its proposed cost elements. AR 1912

(EGS’s Evaluation Notices (“ENs”)). Specifically, the government advised EGS to:

(1) lower its labor rate mark-up from [ * * * ]% to [ * * * ]%; and (2) lower its “Material,

Travel, and [Other Direct Cost (“ODC”)]” rates from [ * * * ]% to [ * * * ]%. AR 1912. In

response, in EGS’s Final Proposal Revision (“FPR”), EGS lowered its labor rate mark-up

only to [ * * * ]%, not [ * * * ]%, and its Material, Travel, and Other ODC rates to [ * * * ]%,

not [ * * * ]%. AR 2277–79 (EGS Response to ENs); AR 2573 (EGS FPR) (implementing

EN responses and indicating “no changes to the [EN] response”).

During discussions, the government also questioned EGS’s proposed cost for

CLIN 0001, Transition-In, given EGS’s incumbency: “Looking at the CLIN 0001

(Transition In) cost, how was the $[ * * * ] calculated? . . . [T]he labor for transition seems

high with no understanding of how that cost was calculated since the contract transition

should be minimal since EGS is the incumbent.” AR 1912 (emphasis added); see also AR 626

(§ L.3.5.2.a.i) (providing, with respect to CLIN 0001, that offerors “may propose zero

5

cost if there is no cost”). EGS, however, chose to keep its transition cost in its FPR

without any downward adjustment. AR 2280. EGS explained that its “transition-in

period . . . is equal in price to ¼ of the first year[’s] (12 months) costs for the contract”

and that “[w]hile EGS is the incumbent contractor, we needed to bid this opportunity as

though the transition-in period began at the end of the current maintenance contract.”

AR 2280.

On October 14, 2020, prior to accepting FPRs, the government held additional

discussions with only KBR, as only KBR “had outstanding weakness[es], deficiencies,

and uncertainties.” AR 3620 (PNM). This second round was intended “to address

unresolved questions regarding . . . how [KBR’s] proposed costs were developed.” AR

3623 (PNM). 10

On November 2, 2020, EGS and KBR submitted their respective FPRs. AR 2573

(EGS); AR 2584 (KBR). 11 Arseal Technologies withdrew its proposal during discussions.

AR 3618.

On December 9, 2020, the SSA finalized an initial decision summarizing the

proposal evaluations. AR 2611–16 (SSA Decision (“SSAD”) of December 9, 2020 (“First

SSAD”)). The SSA concluded that “both proposals demonstrated that the offerors

understood the technical requirements of the performance work statement.” AR 2615.

The SSA summarized her rankings in a chart:

EGS KBR

Rating Rating

Factor 1: Technical Approach Good Good

Factor 2: Maintenance Program

Management Approach / Personnel Good Acceptable

Qualifications

Factor 3: Past Performance

- Recency of Prior Contracts Very Recent Very Recent

- Relevancy of Prior Contracts Very Relevant Relevant

- Quality of Products or Service Good Good

- Performance Confidence

Satisfactory Confidence Satisfactory Confidence

Assessment

Factor 4: CyberSecurity Acceptable Acceptable

Price $46,749,493.71 $38,109,181.90

10The Agency viewed KBR’s responses as resolving the PCO’s questions: “KBR’s pricing is

understood and how their costs were calculated. Mainly, KBR is proposing to have technicians

be [ * * * ] in lieu of having [ * * * ].” AR 2532 (PET Report of October 20, 2020).

Although the administrative record refers to a “second round of negotiations,” AR 3623, there

11

was only a single set of FPRs requested and submitted.

6

AR 2615 (alterations underlined).

The SSA noted that the proposals were “essentially equal” for all but one of the

non-price factors, remarked that as a result “the evaluated price has become more

important,” and described how KBR’s unique technical approach lowered its price:

In reviewing[] KBR’s informal cost breakdown and narrative,

they are proposing [ * * * ] their technicians in lieu of having

technicians [ * * * ]. The solicitation did not require

technicians [ * * * ] . . . . In addition, KBR’s narrative indicated

that . . . not having technicians [ * * * ], allows for lower costs

[such] as not requiring [ * * * ].

AR 2614–15 (explaining that “EGS’s proposal was 3.8% less than the [Independent

Government Cost Estimate (“IGCE”)] and KBR’s proposal was 27.4% less than the

IGCE”). The SSA concluded: “I do not believe it is in the Government’s best interest to

pay approximately $8 million more for the slight difference between the proposals with

regard to the strength identified in EGS’s proposal for Factor 2.” AR 2615.

Accordingly, the SSA determined that KBR’s proposal represented the best value

to the government pursuant to the Solicitation and recommended KBR for award. AR

2616. The government awarded KBR the contract on February 9, 2021, AR 2655, and

notified EGS of the award the same day. AR 2647.

C. EGS’s First GAO Protest

On February 22, 2021, EGS filed a protest with the Government Accountability

Office (“GAO”). AR 3149. EGS alleged that DLA: (1) improperly evaluated various

evaluation factors; (2) improperly evaluated the risk caused by KBR’s proposed

“capture” of EGS’s non-professional workforce; (3) failed to conduct meaningful

discussions and misled EGS into believing that lowering its price would make its

proposal more competitive; (4) failed to evaluate price realism; and (5) conducted an

improper tradeoff analysis and best value determination. AR 3149–85.

On April 2, 2021, EGS filed a supplemental protest with the GAO, adding

allegations that DLA: (1) only conducted a price reasonableness analysis despite

conceding the need for a price realism analysis; (2) disparately treated the proposals

regarding CLIN 0001, Transition-In, and improperly ignored the offerors’ different

approaches to it; (3) unreasonably removed a weakness from KBR’s proposal due to

KBR’s plan to hire incumbent EGS staff; (4) improperly converted the procurement into

7

a lowest price, technically acceptable (“LPTA”) source selection; and (5) disparately

treated the proposals regarding past performance. AR 3341.

The GAO denied the protest on May 14, 2021. AR 3467. The GAO found, inter

alia, that EGS’s allegations regarding the non-price factors constituted mere

“disagreement with the agency’s evaluation.” AR 3473. The GAO also concluded that

many of EGS’s arguments were “largely based on [its] belief that, as the incumbent

contractor, its proposal merited the highest evaluation ratings.” AR 3470–71 (noting

that “there is no requirement that an incumbent be given extra credit for its status as an

incumbent”). Regarding EGS’s allegations that DLA failed to properly evaluate KBR’s

low price, the GAO concluded that DLA “was aware of, and concerned about,” KBR’s

price and took steps to address it, including during discussions. AR 3473–74.

D. EGS’s First Court of Federal Claims Protest and DLA’s Corrective Action

On May 24, 2021, EGS filed a complaint in this Court. Complaint, ENGlobal Gov’t

Servs., Inc. v. United States (EGS I), No. 21-1388C (Fed. Cl. May 24, 2021), ECF No. 1.

EGS alleged virtually the same protest grounds as it did before the GAO. Id. ¶¶ 63–165.

On June 7, 2021, EGS filed an amended complaint which alleged, for the first time, that

DLA improperly evaluated EGS’s proposal pursuant to FAR 52.222-46 (“Evaluation of

Compensation for Professional Employees”). Amended Complaint ¶¶ 93–110, EGS I,

No. 21-1388C (Fed. Cl. June 7, 2021), ECF No. 24. 12

On July 7, 2021, the government filed a notice of corrective action. Defendant’s

Notice of Corrective Action, EGS I, No. 21-1388C (Fed. Cl. July 7, 2021), ECF No. 30. 13

The government represented that DLA “intends to amend [the Solicitation] to remove

reference to FAR 52.222-46, which was inadvertently incorporated by reference in

Section L.” Id. at 1. The government also explained that offerors would be allowed “to

submit revisions to the price proposals to the extent that removal of FAR 52.222-46

affects their price proposals” and that DLA would subsequently perform a new price

evaluation and issue a new SSAD. Id.

Later that same day, the Court held a telephonic status conference with the

parties to discuss the government’s proposed corrective action. Minute Order, EGS I,

12 FAR 52.222-46 is discussed in detail infra Section V.C.

13“A ‘corrective action in the bid protest context’ is an ‘agency action, usually taken after a

protest has been initiated, to correct a perceived prior error in the procurement process, or, in

the absence of error, to act to improve the competitive process.’” Dell Fed. Sys., L.P. v. United

States, 906 F.3d 982, 986 n.1 (Fed. Cir. 2018) (quoting Dellew Corp. v. United States, 855 F.3d 1375,

1378 n.2 (Fed. Cir. 2017)).

8

No. 21-1388C (Fed. Cl. July 7, 2021). Five days later, the government filed a notice

informing the Court that DLA had “reconsidered its plans for corrective action.”

Defendant’s Amended Notice of Corrective Action, EGS I, No. 21-1388C (Fed. Cl. July

12, 2021), ECF No. 32. Citing “concerns raised by the Court and the parties during the

status conference,” the government made the following additional representations

regarding its proposed corrective actions:

DLA has determined that it will amend the solicitation to take

corrective action to evaluate price proposals in accordance

with FAR 52.222-46 and Sections L and M of the solicitation.

DLA will afford offerors the opportunity to submit a total

compensation plan in accordance with FAR 52.222-46. . . . DLA

will then perform a new evaluation of offerors’ proposed

pricing, including preparing a new price evaluation team

report, a new price negotiation memorandum, and a new

price realism analysis. Following its evaluation, DLA will

issue a new source selection authority decision.

Id. at 1–2 (emphasis added). The government also noted that neither EGS nor KGB had

submitted a total compensation plan (“TCP”) “with the supporting narrative and data

required by FAR 52.222-46.” Id. at 2.

Accordingly, on July 15, 2021, DLA issued Amendment 0007, which formalized

DLA’s corrective action:

As part of the corrective action, the Agency will re-evaluate

price proposals, make a new price realism analysis, and make

a new source selection decision. The Agency does not expect

to re-open negotiations or conduct discussions, but the

Agency reserves the right to do so. Offerors are now being

afforded the opportunity to submit a total compensation plan

in accordance with FAR 52.222-46. The total compensation

plan is separate and distinct from the previously submitted

informal cost breakdowns and statements made in the price

and non-price proposals.

AR 3480; see also AR 3484 (indicating that DLA issued the Amendment on July 15, 2021).

Amendment 0007 also required offerors to ensure that their TCPs were

“accompanied with a cover letter and narrative explaining the plan,” limited the TCP

submissions to “no more than eight (8) pages in length,” and provided that “[n]o other

changes to proposals are permitted.” AR 3480 (emphasis added).

9

Following Amendment 0007, the Court dismissed EGS I, without prejudice, as

moot. Order of Dismissal, EGS I, No. 21-1388C (Fed. Cl. July 15, 2021), ECF No. 34. On

July 26, 2021, EGS and KBR both submitted TCPs in response to Amendments 0007 and

0008. 14 AR 4060. No party challenged the propriety of either Amendment 0007 or

Amendment 0008.

E. DLA’s Requested “Clarification” of KBR’s Total Compensation Plan

After EGS and KBR submitted their respective TCPs, the PET re-evaluated their

price proposals and conducted “a new price realism analysis” on July 27, 2021. AR

4060, 4078 (PET Report of August 2, 2021 (“Second PET Report”)). The Second PET

Report observed that although the salaries in EGS’s TCP were “higher than the national

average,” EGS “provided sufficient documentation to demonstrate that its total

compensation plan is realistic for the work to be performed.” AR 4072. The PET

concluded that “[n]o clarifications or discussions are required” from EGS. AR 4072.

The PET also found KBR’s proposed compensation to be “realistic for the work to be

performed” and that it “aligns with [the] supplemental data that was provided.” AR

4078. The PET concluded that KBR’s TCP’s “position descriptions and supporting

documentation raise no concerns about KBR’s ability to perform the requirements of the

PWS.” AR 4078 (emphasis added).

Nevertheless, the PET determined that “[o]ne clarification is required” from KBR.

AR 4078 (emphasis added). Accordingly, on July 29, 2021, the government emailed

KBR a request for additional information regarding its TCP:

Based on the supplemental data that was provided by KBR,

the hourly rates for the project labor title match but the annual

pay does not match. For example, the [Maintenance Personnel

Manager (“MPM”)] shows in Exhibit 1 an annual pay of

$[ * * * ] but on page 9 of the narrative, the salary shown for

the MPM is $[ * * * ]. This should be a simple clarification with

KBR to understand the Exhibit 1 annual pay column.

AR 3565 (emphasis added). The Agency’s request references “supplemental data” —

nine pages appended to KBR’s TCP that show how KBR calculated its compensation for

each position. AR 3553–61. In particular, the supplemental data consists of annotated

screenshots describing compensation for each position addressed in the TCP, based on

either current, internal corporate data or compensation surveys. AR 3553–61; see also

14On July 16, 2021, DLA issued Amendment 0008 to answer questions the offerors submitted in

response to Amendment 0007. AR 3488–89.

10

ECF No. 34 (“Tr.”) 49:7–11 (discussing “a PeopleSoft [human resources] type of

system”).

The government’s clarification request pointed out that the annual pay in some

screenshots did not match the annual pay in the body of the TCP; this discrepancy is

evident in a comparison of the TCP itself with an excerpt from its supplemental data:

Exhibit 1. Detailed Salary and Fringe Benefits Compensation for Professional (non-SCA) Employees

Base Applied

Annual Annual Fringe Total Annual

Project Labor Title Hourly Hourly Rate

Pay Benefits Compensation

Rate (Escalated)

Year 1

Maintenance

Program Manager $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ]

(MPM)

AR 3548 (TCP Exhibit 1) (emphasis added). While the TCP thus indicated Annual Pay

as $[ * * * ] and Total Annual Compensation (including fringe benefits) as $[ * * * ], the

TCP’s supplemental data contained a different salary sum:

Proposal Job Title Employee Number Hourly Rate

Maintenance Program Manager (MPM) [***] $[ * * * ] / 2080 Hours = $[ * * * ]/hr

AR 3554 (emphasis added).

In response to the government’s clarification request, KBR emailed the

government a timely explanation of how it calculated total compensation and included

a clarified TCP. AR 3564–65; AR 3570–84 (“Corrected TCP”). KBR explained the minor

edits as follows:

The annual pay shown in screen shots is a combination of

compensation paid to an employee to include productive

hours (1848 hrs), and non-productive hours (240 hrs). The

table previously provided, calculated the non-productive

hours (which is a combination of holiday pay and paid time

off) as part of the fringe rate. The base hourly rate shown in

the table is the employee’s annual compensation (shown in

screen shots) divided by total number of productive hours

plus non-productive hours (2080 hrs). In calculating salaries,

2080 hours per year (52 weeks), is used to determine the

hourly rate from the annual pay.

11

...

We use the applied hourly rate (which includes an annual

escalation) and not the base hourly rate to derive total annual

compensation. . . . The applied hourly rate is used to calculate

productive and non-productive hours, to derive the total

annual pay (which is greater than the annual compensation

shown in the screen shot due to escalation). Then we combine

the total annual pay with the annual fringe to derive the total annual

compensation for each employee.

AR 3564 (emphasis added).

KBR’s explanation can be illustrated with a simple example. In KBR’s initial

TCP, the “Detailed Salary and Fringe Benefits Compensation for Professional (non-

SCA) Employees” table included six columns breaking down total annual pay for each

position by year. For example, KBR represented pay for the “Engineer/Scientist 2”

position in “Year 2” as follows:

Base Hourly Applied Hourly Annual Fringe Total Annual

Project Labor Title Annual Pay

Rate Rate (Escalated) Benefits Compensation

Engineer/Scientist 2 $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ]

AR 3549 (KBR’s initial TCP) (emphasis added). In this table, “Total Annual

Compensation” is the sum of “Annual Pay” and “Annual Fringe Benefits.” See AR 3564

(explaining that KBR “combine[d] the total annual pay with the annual fringe to derive

the total annual compensation”). 15

15Fringe benefits are non-salary benefits like 401(k) plans, health insurance, and paid time off,

among other things. AR 4075 (Second PET Report) (explaining KBR’s benefits included in

KBR’s fringe rate). At oral argument, KBR’s counsel described how the fringe benefit

calculations represented in the TCP were internal to KBR:

THE COURT: So whether you call it fringe or you call it

nonproductive salary, who cares?

[KBR COUNSEL]: I will make one more point about that . . . . It

does not matter to the employee itself. None of this matters to the

employee itself —

THE COURT: In terms of recruitment and retention?

[KBR COUNSEL]: In terms of retention. They are getting the same

benefits. They are getting the same annual pay. And by the way,

12

KBR’s Corrected TCP submission included additional columns in the chart:

Annual

Annual

Fringe

Applied Annual Annual Pay

Base Benefits

Project Labor Hourly Pay Pay (Non- (Productive Total Annual

Hourly (Excluding

Title Rate (Productive Productive + Non- Compensation

Rate Non-

(Escalated) Hours) Hours) Productive

Productive

Hours)

Hours)

Engineer /

$[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ] $[ * * * ]

Scientist 2

AR 3571 (emphasis added).

In KBR’s Corrected TCP, the “Total Annual Compensation” column remains the

same as in the initial TCP — with one exception discussed below — as do the “Base

Hourly Rate” and “Applied Hourly Rate (Escalated)” columns. Compare AR 3549, with

AR 3571. The difference lies in the four emphasized columns. The “Annual Pay”

column in the initial TCP is labeled “Annual Pay (Productive Hours)” in the Corrected

TCP. Compare AR 3549, with AR 3571. The “Annual Fringe Benefits” column in the

initial TCP is then split into two columns in the Corrected TCP: “Annual Pay (Non-

Productive Hours)” and “Annual Fringe Benefits (Excluding Non-Productive Hours).”

Compare AR 3549, with AR 3571. Finally, the new column in the Corrected TCP —

“Annual Pay (Productive + Non-Productive Hours)” — is, as its title suggests, the sum

of the “Annual Pay (Productive Hours)” and “Annual Pay (Non-Productive Hours)”

columns. See AR 3571.

Finally, KBR’s Corrected TCP corrects an apparent math error present only in

Year 1. AR 3548–49, AR 3564, AR 3570–71. Correcting that error increased “Total

Annual Compensation” for Year 1 by a negligible $2,503.63. 16 The “Total Annual

Compensation” column was unchanged in all other years.

KBR is paying internally the same fringe costs. It’s just they

presented it in a different format in the updated table.

Tr. 55:7–18; see also Tr. 91:14–15 (KBR counsel explaining that the fringe benefit calculations are

“internal to KBR” and have “nothing to do with the agency’s evaluation”).

16In the email accompanying KBR’s Corrected TCP, KBR explained its math correction: “In

reviewing the salaries to provide clarification to the Government, we noticed that the

compensation for Year 1 only, did not correlate with the final pricing files previously submitted

to the Government. As such, we have made corrections to Year 1, correlating to our submitted

final pricing[.]” AR 3564–65 (emphasis added). Correcting this mathematical error did not

change KBR’s contract price. Compare AR 2615 (First SSAD, reflecting KBR’s final price as

13

In sum, KBR’s Corrected TCP adds new details but did not substantively alter

KBR’s price proposal in any way. Rather, the Corrected TCP: (1) renames the former

“Annual Pay” column as “Annual Pay (Productive Hours)”; (2) splits the initial TCP’s

“Annual Fringe Benefits” column into two columns (i.e., “Annual Pay (Non-Productive

Hours)” and “Annual Fringe Benefits (Excluding Non-Productive Hours)”); and

(3) creates a new column, “Annual Pay (Productive + Non-Productive Hours),”

representing the sum of the former “Annual Pay” column and the new “Annual Pay

(Non-Productive Hours)” column. AR 3570–72. Again, however, the Court notes that

KBR did not change the “Total Annual Compensation” column outside of a $2,503.63

modification in Year 1 due to a math error. Compare AR 3548–49, with AR 3570–71.

F. The SSA’s Second Evaluation and Second Award to KBR

DLA issued a new SSAD on August 5, 2021. AR 3609–15 (“Second SSAD”). The

Second SSAD compared the offerors under each factor, reaffirmed the prior technical

ratings, 17 and included an analysis of the TCPs. AR 3609–15. The SSA once again

recommended award to KBR, finding that “the proposals are essentially equal,” that

“the evaluated price has become more important,” and that it was not “in the

Government’s best interest to pay approximately $8 million more for the slight

difference between the proposals.” AR 3614.

The Second SSAD summarized the offerors’ ratings with the same chart used in

the prior SSAD. AR 3614; see also supra Section I.B.

The Second SSAD contrasted the offerors’ proposed prices in more detail than

did the First SSAD, observing that “[t]he offerors’ respective pricing is consistent with

the various elements of their technical proposals. EGS proposed to include technicians

[ * * * ] while KBR proposed to have the technicians [ * * * ] allowing for less [sic]

technicians, which drives to a lower overall price.” AR 3611. The SSA acknowledged

that “KBR’s price is significantly lower than the IGCE,” but explained that “the IGCE

was based on the Cost contract using the incumbent’s structure, which . . . is different

$38,109,181.90), with AR 3614 (Second SSAD, reflecting the same price). Instead, as KBR

explained, the changes conformed the TCP to KBR’s FPR pricing, which was not revised in any

way. In any event, the total value of the corrected salaries increased by only $2,503.63, which is

approximately .005% of the contract’s total maximum value. Compare AR 3548–49, with AR

3570–71 (indicating minor salary increases for Year 1).

17The Second SSAD incorporated virtually all of the First SSAD’s analysis of the non-price

factors. Compare AR 2611–16 (First SSAD), with AR 3609–15 (Second SSAD); see also AR 3480

(Amendment 0007, providing that “[n]o other changes to proposals are permitted” outside of

the TCPs).

14

than the KBR’s proposed strategy.” AR 3613. The Second SSAD found that “[a]lthough

the incumbent managed the AFHE maintenance differently, there were no identified

technical concerns with KBR’s proposal and [because] this is a firm fixed price contract,

the risk will rest on KBR.” Id.

Finally, the SSA concluded that both offerors’ TCPs were “realistic for the work

to be performed.” AR 3614. The SSA also noted that the “positions and the salaries

with fringe benefits indicate the capability of the proposed compensation structure to

obtain and keep suitable qualified personnel to meet mission objectives” and that “the

differences in skills, the complexity of various disciplines, and professional job

difficulty have been evaluated and considered.” AR 3614.

On September 1, 2021, DLA notified EGS of the Agency’s new decision to award

the contract to KBR. AR 3629–31. DLA held an oral debriefing with EGS on September

2, 2021, and conducted further debriefing via email. AR 3645–51.

G. EGS’s Second GAO Protest

On September 10, 2021, EGS filed a second protest with the GAO, this time

challenging DLA’s post-corrective action contract award decision. AR 3664. EGS

argued that DLA: (1) failed to perform a price realism analysis regarding KBR’s

professional employees; (2) performed an unreasonable price realism analysis of KBR’s

non-professional employees; (3) engaged in unequal discussions during corrective

action, failed to engage in meaningful discussions regarding EGS’s “misunderstanding”

of CLIN 0001, and engaged in misleading discussions regarding EGS’s price;

(4) improperly evaluated past performance; (5) failed to properly evaluate KBR’s

“unrealistically low” price; (6) failed to properly evaluate technical approach; and

(7) improperly converted the procurement into an LPTA source selection or,

alternatively, conducted an improper best value tradeoff analysis. AR 3664–3708.

The GAO denied the protest on December 15, 2021. AR 4045; ENGlobal Gov’t

Servs., Inc., B-419612.3, 2022 CPD ¶ 12, 2021 WL 6423779 (Comp. Gen. Dec. 15, 2021).

The GAO found untimely all of EGS’s arguments that “pertain[ed] to the agency’s prior

evaluation and award decision” because those “were clearly unaffected by the agency’s

corrective action.” AR 4048. Accordingly, the GAO considered those arguments “either

a request for reconsideration of [GAO’s] prior decision,” or “a challenge to the scope of

the agency’s corrective action,” both of which were untimely. AR 4048.

Although GAO denied EGS’s protest, the GAO also concluded that the email

exchange between DLA and KBR following corrective action constituted discussions, as

EGS claimed, and not a clarification, as DLA and KBR had argued. AR 4049–52. Citing

15

GAO precedent, 18 the decision concluded that the exchange “ultimately constituted

discussions” because “KBR submitted a revised proposal that was evaluated by the

agency in reaching its decision to select KBR for award.” AR 4052. Specifically, the

GAO characterized KBR’s response to DLA’s question as “a revised exhibit with

additional columns, pricing information, and revised pricing totals, and a narrative in

an email detailing how its prices were calculated.” AR 4052 (finding that the “revised

exhibit and the accompanying narrative were reviewed and incorporated by the agency

in its evaluation documents”). As a result, the GAO concluded that DLA should have

also opened discussions with EGS. AR 4052.

Despite labeling KBR’s submission of its Corrected TCP a discussion, the GAO

denied EGS’s protest because DLA’s failure to conduct discussions with EGS “did not

prejudice” it. AR 4052. According to the GAO, “[i]n the context of unequal discussions,

the focus of our inquiry is on whether the protester, had it been afforded meaningful

discussions, could have revised its proposal in a manner that would result in a

substantial chance of the protester receiving the award.” AR 4052. Because “the agency

did not identify any concerns with EGS’s professional compensation plan that [DLA]

would have been required to raise had [DLA] opened discussions with EGS,” the GAO

concluded that EGS was not prejudiced by DLA’s further discussions with KBR. AR

4052.

In so holding, the GAO rejected EGS’s argument that “had [EGS] been afforded

the opportunity for a post-corrective action round of discussions, it would have revised

its proposal in other ways.” AR 4052–53. Agencies, the GAO observed, “may . . .

reasonably limit the scope of revisions” allowed in discussions. AR 4053. In this case,

DLA “permitted the offerors to submit . . . professional compensation plans for the

purposes of evaluating in accordance with FAR provision 52.222-46 and specified that

‘[n]o other changes to proposals are permitted.’” AR 4053 (emphasis added) (quoting AR

3480 (Amendment 0007)). Accordingly, “even if [DLA] had also opened discussions

with EGS,” EGS “has not established that the agency would have been required to allow

EGS to revise other areas of its proposal, such as its proposed transition-in costs.” AR

4053.

18See AR 4051 (“the test for deciding whether an agency has engaged in discussions is whether

the agency has provided an opportunity for proposals to be materially changed” (citing Priority

One Servs., Inc., B-288836, 2002 CPD ¶ 79, 2001 WL 1872433 (Comp. Gen. Dec. 17, 2001))); see also

id. (“[t]he agency’s characterization of a communication as clarifications or discussions is not

controlling; it is the actions of the parties that determine whether discussions have been held”

(citing Priority One Servs., 2001 WL 1872433)).

16

The GAO also rejected EGS’s argument that DLA improperly evaluated EGS’s

professional employee compensation plan under FAR 52.222-46. AR 4053–55. The

GAO concluded that DLA’s evaluation met the “two required analyses that the agency

must perform” pursuant to FAR 52.222-46 and GAO precedent — “one based on the

price realism of the compensation plan and the other considering whether the

compensation plan will allow for program continuity.” AR 4054–55.

Following this second GAO decision, EGS once again filed suit in this Court.

II. PROCEDURAL HISTORY

On December 21, 2021, EGS filed its latest complaint, initiating this case. ECF

No. 1. EGS alleges that: (1) DLA failed to conduct fair and equal discussions during

corrective action and improperly allowed KBR to change its pricing, Compl. ¶¶ 87–102

(Count One); (2) DLA disparately treated EGS and KBR in evaluating transition-in costs

and failed to hold meaningful discussions regarding price, id. ¶¶ 103–31 (Count Two);

(3) DLA failed to properly evaluate the proposed professional employee compensation in

KBR’s TCP pursuant to FAR 52.222-46, id. ¶¶ 132–37 (Count Three); (4) DLA failed to

properly evaluate the price realism of KBR’s proposed non-professional employees

covered by the Service Contract Act (“SCA”), 19 id. ¶¶ 138–158 (Count Four); and

(5) DLA conducted an improper tradeoff analysis and best value determination, id.

¶¶ 159–65 (Count Five).

KBR filed a motion to intervene on December 21, 2021, which the Court granted

the same day. ECF No. 9; Minute Order (Dec. 21, 2021). On December 22, 2021, the

Court held a telephonic preliminary status conference, to discuss, among other things,

the briefing schedule and the fact that EGS represented in its complaint that it was not

19 The McNamara-O’Hara Service Contract Act of 1965 § 2(a), 41 U.S.C. §§ 6702–6703, provides

that every contract, subject to a few exceptions, entered into by the federal government or

District of Columbia for more than $2,500 and “has as its principal purpose the furnishing of

services in the United States through the use of service employees” must include various wage-

protection provisions, including one “specifying the minimum wage to be paid to each class of

service employee engaged in the performance of the contract,” and one “specifying the fringe

benefits to be provided to each class of service employee engaged in the performance of the

contract.” The FAR defines “service employee” as “any person engaged in the performance of

this contract other than any person employed in a bona fide executive, administrative, or

professional capacity.” FAR 52.222-41. This Court has observed that “the primary purpose of

the SCA is to protect ‘wage standards of employees’ by preventing ‘federal purchasing power

[from] playing a role in suppressing wage rates,’ with particular emphasis given to the impact

of that power in rebiddings and successor contracts.” CRAssociates, Inc. v. United States, 95 Fed.

Cl. 357, 370 (2010) (alteration in original) (quoting Ft. Hood Barbers Ass’n v. Herman, 137 F.3d 302,

309 (5th Cir. 1998)).

17

seeking a temporary restraining order (“TRO”) or preliminary injunction (“PI”). ECF

No. 13; ECF No. 20. EGS asserted that it was not seeking a TRO or PI because the

government tentatively had agreed to a voluntary stay through April 22, 2022. Compl.

at 2 n.1. During the status conference, the government confirmed this voluntary stay.

See ECF No. 20 at 1. Accordingly, the Court explained in its subsequent order that

“[t]he Court views such a voluntary stay as having the effect of a preliminary injunction

in terms of preserving the status quo should EGS succeed on the merits of its complaint

and otherwise demonstrate that a permanent injunction is warranted” and that “[i]f the

government views the nature of its voluntary stay differently, the government shall

promptly notify the parties and the Court.” Id. at 1–2.

The government filed the administrative record on January 14, 2022. ECF No.

22. 20On February 4, 2022, the government filed an unopposed motion for leave to

correct the administrative record, ECF No. 23, which the Court granted, Minute Order

(Feb. 6, 2022). The parties filed timely cross-motions for judgment on the administrative

record on February 11, 2022. ECF Nos. 25 (“Pl. MJAR”); 26 (“KBR MJAR”); 27 (“Def.

MJAR”). The parties filed timely response briefs on March 11, 2022. ECF Nos. 29 (“Def.

Resp.”), 30 (“Pl. Resp.”), 31 (“KBR Resp.”).

The Court held oral argument on the parties’ various motions on March 29, 2021.

ECF No. 32.

III. JURISDICTION AND STANDING

The Tucker Act provides that an “interested party” may file an “action” in this

Court “objecting [1] to a solicitation by a Federal agency for bids or proposals for a

proposed contract or [2] to a proposed award or [3] the award of a contract or [4] any

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

proposed procurement.” 28 U.S.C. § 1491(b)(1); see also Tolliver Grp., Inc. v. United States,

20On February 11, 2022, EGS moved to include a declaration of an EGS vice president “in the

Court Record.” ECF No. 24 at 1. EGS contends that the Court “regularly includes in the Court

Record declarations from protestors addressing irreparable harm, the balance of harm, and the

public interest injunctive relief factors” and that “[t]he Declaration is limited to evidence

supporting these three factors.” Id. The government argued that EGS’s motion was

unnecessary. ECF No. 28 at 1. While the government is correct that EGS did not need to file a

motion to allow the Court to consider its Declaration, see, e.g., L-3 Commc’ns Corp. v. United

States, 99 Fed. Cl. 283, 288–89 n.4 (2011), the Court nevertheless GRANTS EGS’s motion.

18

151 Fed. Cl. 70, 84 & n.11 (2020); Aero Spray, Inc. v. United States, 156 Fed. Cl. 548, 559 &

n.18 (2021) (“Section 1491(b) actions are typically referred to as ‘bid protests.’”).21

Thus, to establish standing in a bid protest action, a plaintiff must demonstrate

that it is an “interested party.” Aero Spray, 156 Fed. Cl. at 559 (explaining that “the

Tucker Act, as amended by the Administrative Dispute Resolution Act of 1996, Pub. L.

No. 104-320, 110 Stat. 3870[,] . . . defines not only this Court’s jurisdiction over what

actions may be brought against the government, but also who has standing to pursue

them”). An “interested party” is “[1] an actual or prospective bidder or offeror [2]

whose direct economic interest would be affected by the award of the contract or by

failure to award the contract.” Am. Fed’n of Gov’t Emps., AFL-CIO v. United States, 258

F.3d 1294, 1302 (Fed. Cir. 2001) (quoting 31 U.S.C. § 3551(2)).

No party challenges either the Court’s jurisdiction or EGS’s standing in this case.

Nevertheless, the Court has an independent duty to ascertain whether it possesses

jurisdiction to decide EGS’s claims and whether EGS has standing to pursue them.

RCFC 12(h)(3); see also FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990) (“The

federal courts are under an independent obligation to examine their own jurisdiction,

and standing ‘is perhaps the most important of [the jurisdictional] doctrines.’”

(alteration in original) (quoting Allen v. Wright, 468 U.S. 737, 750 (1984))).

The Court has considered the allegations in EGS’s complaint and concludes that

EGS qualifies as an interested party with respect to the procurement at issue. EGS has

sufficiently alleged facts that, if proven, demonstrate the requisite prejudice for the

purposes of interested party status and jurisdiction. See Am. Relocation Connections,

L.L.C. v. United States, 789 F. App’x 221, 226 (Fed. Cir. 2019) (“For standing, we presume

the party bringing a bid protest will succeed on the merits of its claim and ask whether

it has alleged an injury (or prejudice) caused by the procuring agency’s actions. . . . But

once we find that a party has standing, we must turn to the merits of the party’s claim

and determine whether it can prove it was prejudiced based on the record evidence.”);

see also James v. J2 Cloud Servs., LLC, 887 F.3d 1368, 1372 (Fed. Cir. 2018) (courts

reviewing a dismissal “for want of standing . . . must accept as true all material

allegations of the complaint, and must construe the complaint in favor of the

complaining party” (quoting Warth v. Seldin, 422 U.S. 490, 501 (1975))); Blue Origin Fed’n,

21Cf. Tolliver, 151 Fed. Cl. at 96–97 (“[A]lthough ‘[the Administrative Dispute Resolution Act]

covers primarily pre- and post-award bid protests,’ the Federal Circuit in RAMCOR explicitly

reversed this Court’s determination ‘that a [plaintiff] could only invoke § 1491(b)(1) jurisdiction

by including in its action an attack on the merits of the underlying contract award’ or the

solicitation.” (alteration in original) (quoting RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d

1286, 1289 (Fed. Cir. 1999))).

19

LLC v. United States, 157 Fed. Cl. 74, 89 (2021) (“For the limited purpose of determining

whether it has standing, a protestor’s allegations are assumed to be true.”); Yang Enters.,

Inc. v. United States, 156 Fed. Cl. 435, 444 (2021) (“The Court assumes well-pled

allegations of error to be true for purposes of the standing inquiry.”). 22

IV. STANDARD OF REVIEW

Judgment on the administrative record, pursuant to RCFC 52.1, “is properly

understood as intending to provide for an expedited trial on the record.” Bannum, Inc. v.

United States, 404 F.3d 1346, 1356 (Fed. Cir. 2005). The Rule requires the Court “to make

factual findings from the record evidence as if it were conducting a trial on the record.”

Id. at 1354. Accordingly, this Court asks whether, given all the disputed and

undisputed facts, a party has met its burden of proof based on the evidence contained

in the administrative record. Id. at 1356–57.

Generally, in an action brought pursuant to § 1491(b) of the Tucker Act, the

Court reviews “the agency’s actions according to the standards set forth in the

Administrative Procedure Act, 5 U.S.C. § 706.” See Nat’l Gov’t Servs., Inc. v. United States,

923 F.3d 977, 981 (Fed. Cir. 2019). That APA standard, in turn, requires the Court to

determine “whether the agency’s action was arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” Id. (citing 5 U.S.C. § 706(2)). In

other words, the Court must “determine whether ‘(1) the procurement official’s

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

of regulation or procedure.’” Id. (quoting Weeks Marine, Inc. v. United States, 575 F.3d

1352, 1358 (Fed. Cir. 2009)). “When a challenge is brought on the first ground, the test is

whether the contracting agency provided a coherent and reasonable explanation of its

exercise of discretion, and the disappointed bidder bears a heavy burden of showing

that the award decision had no rational basis.” Banknote Corp. of Am., Inc. v. United

States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (internal citation marks omitted). “When a

challenge is brought on the second ground, the disappointed bidder must show ‘a clear

and prejudicial violation of applicable statutes or regulations.’” Impresa Construzioni

Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1333 (Fed. Cir. 2001) (quoting

Kentron Hawaii, Ltd. v. Warner, 480 F.2d 1166, 1169 (D.C. Cir. 1973)).

22The fact that a plaintiff may “successfully allege[] an injury (or prejudice) for standing

purposes” — because if the plaintiff “succeeded on the merits . . . it would have a ‘greater than

an insubstantial chance of securing the contract’” — does not excuse a plaintiff from proving

prejudice on the merits based on the administrative record. Am. Relocation Connections, 789 F.

App’x at 227 (quoting Info. Tech. & Applications Corp. v. United States (ITAC), 316 F.3d 1312, 1319

(Fed. Cir. 2003)).

20

“In applying the APA standard of review, this Court affords considerable

deference to an agency’s procurement decisions.” IAP Worldwide Servs., Inc. v. United

States, -- Fed. Cl. --, 2022 WL 1021781, at *13 (2022) (citing Advanced Data Concepts, Inc. v.

United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000)). In particular, protests involving “the

minutiae of the procurement process in such matters as technical ratings . . . involve

discretionary determinations of procurement officials that a court will not second

guess.” E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996). Thus, in

reviewing an agency’s procurement decision, the Court shall merely “determine

whether ‘the contracting agency provided a coherent and reasonable explanation of its

exercise of discretion.’” Impresa, 238 F.3d at 1332–33 (quoting Latecoere Int’l, Inc. v. U.S.

Dep’t of Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)). Accordingly, the Court “will uphold

a decision of less than ideal clarity if the agency’s path may reasonably be discerned.”

Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974) (citing

Colorado Interstate Gas Co. v. Fed. Power Comm’n, 324 U.S. 581, 595 (1945)). “On the other

hand, the Court will not put words in an agency’s mouth or invent supporting

rationales the agency has not itself articulated in the administrative record; post hoc

explanations for agency decisions ordinarily will be rejected.” IAP Worldwide Servs.,

2022 WL 1021781, at *13; see also Sys. Stud. & Simulation, Inc. v. United States, 152 Fed. Cl.

20, 32 (2020) (“The court must be wary of ‘post-hoc rationale,’ or ‘any rationale that

departs from the rationale provided at the time the procuring agency made its

decision.’” (quoting Raytheon Co. v. United States, 121 Fed. Cl. 135, 158 (2015), aff’d, 809

F.3d 590 (Fed. Cir. 2015))), aff’d, 22 F.4th 994 (Fed. Cir. 2021).

To establish prejudice on the merits in a post-award challenge, a plaintiff must

show that, but for the agency’s error, “the protestor’s chance of securing the award

[would] not have been insubstantial” but for the alleged error. ITAC, 316 F.3d at 1319;

see also Oak Grove Techs., LLC v. United States, 155 Fed. Cl. 84, 98 (2021) (discussing

standard of review and showing of prejudice in bid protest cases).

V. DISCUSSION

A. The Government’s Exchange with KBR During Corrective Action Was a

Mere Clarification and Not Another Round of Discussions Entitling EGS to

Another FPR (Count One)

In Count One of EGS’s complaint, EGS alleges that the emails exchanged

between the government and KBR during corrective action constituted discussions that

improperly and materially prejudiced EGS. Compl. ¶¶ 87–102. Specifically, EGS

asserts: (1) KBR’s Corrected TCP included different prices and more detailed pricing

tables than did its initial TCP, id. ¶¶ 89, 95; (2) KBR’s proposal was unacceptable and

unawardable before KBR provided its Corrected TCP, id. ¶¶ 90, 93–94; (3) the

21

government’s failure to permit EGS to change its price constituted disparate treatment,

id. ¶¶ 91–92, 96, 99; and (4) given the opportunity, EGS could have lowered its price,

which would have provided EGS a substantial chance at award, id. ¶ 100.

This Court concludes that the exchange between the government and KBR

during corrective action constituted clarifications, not discussions. Moreover, even if

the exchange could be construed as discussions, EGS has not demonstrated prejudice.

1. The FAR Distinguishes Between Discussions and Clarifications

The FAR defines a “discussion” as an exchange between the government and an

offeror intended to allow that offeror to revise its proposal, typically in a FPR. In that

regard, the FAR provides:

Negotiations are exchanges, in either a competitive or sole

source environment, between the Government and offerors,

that are undertaken with the intent of allowing the offeror to

revise its proposal. . . . When negotiations are conducted in a

competitive acquisition, they take place after establishment of

the competitive range and are called discussions.

FAR 15.306(d); see also FAR 15.307(b) (“At the conclusion of discussions, each offeror

still in the competitive range shall be given an opportunity to submit a final proposal

revision.”).

During discussions, a contracting officer (“CO”) “must . . . indicate to, or discuss

with, each offeror . . . deficiencies, significant weaknesses, and adverse past

performance information to which the offeror has not yet had an opportunity to

respond.” FAR 15.306(d)(3). Once discussions are initiated, they “must be

conducted . . . with each offeror within the competitive range.” FAR 15.306(d)(1). The

United States Court of Appeals for the Federal Circuit, our appellate court, has

explained that “[t]he purpose of the rule that the government may not hold discussions

with only one bidder is ‘to prevent a bidder from gaining an unfair advantage over its

competitors by making its bid more favorable to the government in a context where the

other bidders have no opportunity to do so.’” ITAC, 316 F.3d at 1320 (quoting Data Gen.

Corp. v. Johnson, 78 F.3d 1556, 1561 (Fed. Cir. 1996)).

The CO retains some discretion, however, and “is not required to discuss every

area where the proposal could be improved”; instead, both “[t]he scope and extent of

discussions are a matter of [CO] judgment.” FAR 15.306(d)(3). This Court has phrased

the rule even more bluntly: “meaningful discussions” do not require “an agency . . . to

22

‘spoon-feed’ offerors[.]” Carahsoft Tech. Corp. v. United States, 86 Fed. Cl. 325, 343 (2009).

Finally, the FAR provides that “[a]t the conclusion of discussions, each offeror still in

the competitive range shall be given an opportunity to submit a final proposal

revision.” FAR 15.307(b).

In contrast to discussions, clarifications are “limited exchanges, between the

Government and offerors, that may occur when award without discussions is

contemplated.” FAR 15.306(a)(1) (emphasis added). Examples of clarifications include

asking an offeror to explain “the relevance of an offeror’s past performance

information,” to address “adverse past performance information to which the offeror

has not previously had an opportunity to respond,” or to correct “minor or clerical

errors.” FAR 15.306(a)(2); see also WaveLink, Inc. v. United States, 154 Fed. Cl. 245, 270

(2021) (holding that a series of exchanges constituted clarifications because they all

“merely amounted to correcting mistakes that were either clearly clerical or relatively

minor errors or where the information was readily present elsewhere in the proposal”).

Also, unlike discussions, the government is permitted to engage in clarifications with

fewer than all offerors (i.e., even with only one offeror). See, e.g., Mil-Mar Century Corp.

v. United States, 111 Fed. Cl. 508, 535 (2013) (citing DynCorp Int’l LLC v. United States, 76

Fed. Cl. 528, 540 (2007)).

The Federal Circuit has held that clarifications can provide information not

previously included in an offeror’s proposal, including information necessary to

evaluate the proposal. ITAC, 316 F.3d at 1323 (explaining that “[a]ny meaningful

clarification would require the provision of information,” that “the example of a

clarification given in the regulation, ‘the relevance of an offeror’s past performance

information,’ requires the provision of information,” and that “[t]here is no requirement

in the regulation that a clarification not be essential for evaluation of the proposal”

(emphasis added) (quoting FAR 15.306(a)(2))). Finally, the Federal Circuit has warned

against applying a “cramped conception of ‘clarification’” in light of the FAR’s 1997

amendments. ITAC, 316 F.3d at 1323 (explaining that one of the purposes of the 1997

amendments was to “[s]upport[ ] more open exchanges between the Government and

industry, allowing industry to better understand the requirement [sic] and the

Government to better understand industry proposals” (alteration in original) (quoting

Federal Acquisition Regulation; Part 15 Rewrite; Contracting by Negotiation and

Competitive Range Determination, 62 Fed. Reg. 51224, 51225 (Sept. 30, 1997))).

Critically, for our purposes, the Federal Circuit has held that the FAR Council’s

1997 FAR revisions “significantly broadened” the scope of exchanges between the

government and an offeror that may be covered by the term “clarifications.” ITAC, 316

F.3d at 1322. The Federal Circuit explained its reasoning in some detail:

23

We first note that the regulations were altered significantly in

1997. Compare 48 C.F.R. §§ 15.601, 15.607, 15.610 (1991), with

48 C.F.R. § 15.306 (2002). The preexisting regulations strictly

limited the definition and purpose of clarifications. Section

15.601 specified that clarifications were “for the sole purpose

of eliminating minor irregularities, informalities, or apparent

clerical mistakes in the proposal.” 48 C.F.R. § 15.601 (1991).

All communications for larger purposes, specifically

communications “(a) involv[ing] information essential for

determining the acceptability of a proposal, or (b) provid[ing]

the offeror an opportunity to revise or modify its proposal,”

constituted discussions. Id.

Under the new regulation, 48 C.F.R. § 15.306, “clarifications”

are defined as “limited exchanges, between the Government

and offerors, that may occur when award without discussions

is contemplated.” 48 C.F.R. § 15.306(a) (2002). The regulation

further provides examples of clarifications[.]

ITAC, 316 F.3d at 1321. Thus, exchanges that an agency previously may have classified

as discussions may now be treated as mere clarifications.

To determine whether a particular exchange qualifies as a clarification or

constitutes discussions, this Court repeatedly has held that the “acid test” is “[w]hether

an agency afforded an offeror the opportunity to revise or modify its proposal.” See,

e.g., Orca Nw. Real Est. Servs. v. United States, 65 Fed. Cl. 1, 11 (2005). Where a proposal

has been substantively revised or modified, discussions have occurred. Conley &

Assocs., Inc. v. United States, 142 Fed. Cl. 177, 184 (2019) (“The ‘acid test’ for whether an

agency has engaged in discussions is whether it provided an opportunity for proposals

to be revised or modified.”); RMGS, Inc. v. United States, 140 Fed. Cl. 728, 742 (2018)

(“Thus, ‘the acid test for deciding whether discussions have been held is whether it can

be said that an offeror was provided the opportunity to revise or modify its proposal.’”

(quoting DynCorp Int’l, 76 Fed. Cl. at 541)); Rivada Mercury, LLC v. United States, 131 Fed.

Cl. 663, 679 (2017) (“In applying the definitions set forth in the FAR, ‘the acid test for

deciding whether discussions have been held is whether it can be said that an offeror

was provided the opportunity to revise or modify its proposal.’” (quoting Davis Boat

Works, Inc. v. United States, 111 Fed. Cl. 342, 353 (2013))). The Federal Circuit similarly

has emphasized that discussions involve the opportunity for substantive proposal

revisions. See Galen Med. Assocs. v. United States, 369 F.3d 1324, 1332 (Fed. Cir. 2004)

(“[I]n the context of a government contract proposal, the term ‘discussions’ has a

specific legal definition: ‘discussions involve negotiations’ and ‘are undertaken with

24

the intent of allowing the offeror to revise its proposal.’” (quoting ITAC, 316 F.3d at

1321)).

The parties’ actions during an exchange — and not the agency’s label of the

exchange — ultimately determine whether it was a clarification or discussions. Mil-

Mar, 111 Fed. Cl. at 535. Nevertheless, in close cases the Court must give deference to

an agency’s reasonable interpretation of that exchange. See, e.g., ITAC, 316 F.3d at 1323

(“[W]e give deference to an agency’s permissible interpretation of its own

regulations.”); Mil-Mar, 111 Fed. Cl. at 535 (“[T]he agency’s characterization of an

exchange as a clarification is entitled to deference from the court[.]”); DynCorp Int’l, 76

Fed. Cl. at 542 (“[F]ollowing ITAC as it must, this court resolves very close questions

about an EN in favor of the government, if the EN was intended as a clarification, was

labeled as such, did not clearly violate the limitations on clarifications expressed in FAR

15.306(a), and did not clearly stray into the forbidden zone of discussions described in

FAR 15.306(d).” (emphasis added)).

2. The Government’s Exchange with KBR During Corrective Action

Was a Clarification Because Amendment 0007 Did Not Permit KBR

to Revise Its Proposal

The Court holds that the email exchange between the government and KBR

during corrective action was a clarification, not discussions. Following the offerors’

TCP submissions, DLA’s further exchange with KBR merely corrected a discrepancy

within KBR’s TCP but did not otherwise allow KBR to revise its proposal. See FAR

15.306(d) (labeling discussions as “negotiations . . . that are undertaken with the intent

of allowing the offeror to revise its proposal”).

Indeed, while Amendment 0007 “afforded [the offerors] the opportunity to

submit a total compensation plan in accordance with FAR 52.222-46[,]” that

Amendment expressly precluded any other proposal updates. AR 3480. In that regard,

FAR 52.222-46 covers “Evaluation of Compensation for Professional Employees” and

requires offerors, “[a]s part of their proposals,” to “submit a total compensation plan

setting forth salaries and fringe benefits proposed for the professional employees who

will work under the contract.” FAR 52.222-46(a). The FAR further requires the

government to “evaluate the plan to assure that it reflects a sound management

approach and understanding of the contract requirements.” Id. In particular, the

evaluation must “include an assessment of the offeror’s ability to provide uninterrupted

high-quality work” — i.e., the government must consider the proposed professional

compensation “in terms of its impact upon recruiting and retention, its realism, and its

consistency with a total plan for compensation.” Id. The FAR “caution[s]” offerors

25

“that lowered compensation for essentially the same professional work may indicate

lack of sound management judgment and lack of understanding of the requirement,”

FAR 52.222-46(b), and that “unrealistically low” professional compensation “may be

viewed as evidence of failure to comprehend the complexity of the contract

requirements,” FAR 52.222-46(c); see also FAR 52.222-46(d) (“Failure to comply with

these provisions may constitute sufficient cause to justify rejection of a proposal.”).

Here, both KBR and EGS included labor costs in their original proposals. AR

1542 (EGS’s informal cost breakdown, listing labor costs); AR 1840 (KBR’s informal cost

breakdown, listing labor costs). Within that context, the TCP in this procurement was

simply an opportunity for the offerors to show their work, so to speak, in calculating

these labor costs — not to change their final calculations. See Sparksoft Corp. v. United

States, 141 Fed. Cl. 609, 624 (2019) (“A key purpose of FAR § 52.222-46 is ‘to evaluate

whether offerors will obtain and keep the quality of professional services needed for

adequate contract performance, and to evaluate whether offerors understand the nature

of the work to be performed.’” (quoting CRAssociates, Inc. v. United States, 95 Fed. Cl.

357, 369-70 (2010))).

KBR’s initial TCP submission complied with FAR 52.222-46. KBR’s TCP

included a six-column table breaking down total annual compensation for its ten

professional positions for each of the contract’s five contract years. AR 3548–49. That

table shows that KBR determined “total annual compensation” for each position as the

sum of “annual pay” (the employee’s salary) and “annual fringe benefits” (e.g., health

insurance, some cost of which is paid for by employers but is not included in an

employee’s salary). AR 3548–49; see also AR 4075 (Second PET Report) (describing

KBR’s fringe benefits as non-salary benefits like 401(k) plans and health insurance). 23

KBR further supported its TCP with several pages of data, as detailed above. See AR

3553–61.

In any event, what is clear is that FAR 52.222-46 operates independently of the

Solicitation’s Section M evaluation factors (and its best value framework) to impose a

“compensation realism analysis” — a sort of targeted form of price realism analysis

which “evaluates whether a proposed compensation is too low.” Eskridge & Assocs. v.

United States, 955 F.3d 1339, 1346 (Fed. Cir. 2020); see also Sparksoft Corp., 141 Fed. Cl. at

627 (concluding that an agency “ha[d] an obligation to undertake a realism analysis of

the professional compensation rates . . . to ensure they will satisfy the requirements of

FAR § 52.222-46 and provide the government ‘uninterrupted high-quality work’”

23See also Tr. 52:6–12 (KBR counsel explaining “[w]hen a person receives their salary, that’s the

money they are taking home. And then on top of that they get all sorts of fringe benefits, health

care, days off, vacation, sick time, 401(k), and . . . [even] pet insurance . . . .”).

26

(quoting FAR 52.222-46)); Abacus Tech. Corp., B-417749, 2020 CPD ¶ 125, 2020 WL

1547463, at *4 n.2 (Comp. Gen. Mar. 9, 2020) (recognizing that FAR 52.222-46 provides

for, “in effect, a price realism evaluation regarding an offeror’s proposed

compensation”); Sys. Plus, Inc., B-413323, 2017 WL 2570951, at *5 (Comp. Gen. May 11,

2017) (GAO “has noted that this FAR provision anticipates an evaluation of whether an

awardee understands the contract requirements, and has proposed a compensation

plan appropriate for those requirements — in effect, a price realism evaluation

regarding an offeror’s proposed compensation.”).

Accordingly, there was no reason for DLA to require or to permit an entirely new

FPR as part of corrective action where, as here, all that was left for the Agency to do was

to receive the information FAR 52.222-46 required offerors to submit and for the Agency

to analyze it. If EGS had any objections to this limited scope of corrective action, EGS

should have challenged the terms of Amendment 0007 when DLA issued it (perhaps

before the submission of the TCPs and definitely no later than award); in any event, the

time for such challenges has long passed. See COMINT Sys. Corp. v. United States, 700

F.3d 1377, 1381–82 (Fed. Cir. 2012). In COMINT, the Federal Circuit applied the Blue &

Gold waiver rule 24 to hold that a disappointed offeror waived its objection to a post-

proposal submission solicitation amendment because the offeror did not object to the

amendment until after contract award. Id. at 1381–82. The agency in that case issued an

amendment that restricted the contract’s scope “[d]uring the course of the review of the

submitted bids.” Id. at 1380. The disappointed offeror, COMINT, “signed and returned

its copy of the amendment to the agency” but did not file its action challenging the

amendment until after contract award. Id. at 1380–82. The Federal Circuit held that

COMINT waived its objection because “the reasoning of Blue & Gold applies to all

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

before the award and failed to do so.” Id. at 1381–82. The Federal Circuit explained that

COMINT’s signing the amendment “signal[ed]” COMINT’s “agreement with” the

amendment’s terms — and that COMINT “had two and a half months” before award in

which to challenge the amendment, which provided “more than an adequate

opportunity to object.” Id. at 1382–83.

The same reasoning in COMINT applies to bar any objection EGS now has to the

scope of Amendment 0007. Like COMINT, EGS “signed and returned its copy of the

amendment to the agency.” 700 F.3d at 1382; AR 3543 (EGS signed Amendment 0007,

dated July 26, 2021). EGS also had almost two months to object to the terms of

24See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007) (holding that “a

party who has the opportunity to object to the terms of a government solicitation containing a

patent error and fails to do so prior to the close of the bidding process waives its ability to raise

the same objection subsequently in a bid protest action in the Court of Federal Claims”).

27

Amendment 0007. AR 3484 (showing that DLA issued Amendment 0007 on July 15,

2021); AR 3631 (showing that DLA notified EGS of the award to KBR on September 1,

2021). EGS thus had “more than an adequate opportunity to object” to Amendment

0007. COMINT, 700 F.3d at 1383. 25

Thus, notwithstanding DLA’s clear intent that corrective action would be limited

to the Agency’s receipt and analysis of TCPs (i.e., to meet the requirements of FAR

52.222-46), EGS effectively attempts to rewind the clock so that it can challenge the

Agency’s entire approach. In particular, EGS wants the opportunity to submit an

entirely new FPR, complete with new pricing. Because EGS could not submit a FPR

pursuant to the express terms of Amendment 0007, EGS instead attempts to avoid those

plain terms by arguing that DLA engaged in discussions with KBR about its TCP, thus

requiring a new round of FPRs anyhow. Putting aside the Court’s doubts about the

basic premise of that argument, the Court concludes that DLA did not engage in

discussions with KBR regarding its TCP.

When reviewing KBR’s TCP, the government noticed what turned out to be a

straightforward and easily explained discrepancy: the numbers in the chart’s “annual

pay” column did not match the salaries KBR listed in the supplemental materials. AR

4077–78. DLA emailed KBR to resolve the inconsistency: “Based on the supplemental

data . . . the hourly rates for the project labor title match but the annual pay does not

match. . . . This should be a simple clarification . . . to understand the Exhibit 1 annual pay

column.” AR 3565 (emphasis added).

KBR responded the next day, explaining that the supporting pay data it provided

in the TCP contained higher totals than the annual pay reflected in the table because the

supporting data included “non-productive hours” — “a combination of holiday pay

and paid time off” — in annual pay, while the table’s “annual pay” column included

25In VS2, LLC v. United States, 155 Fed. Cl. 738 (2021), this Court explained Blue & Gold, and

subsequent Federal Circuit cases applying Blue & Gold, in some detail. Specifically, the Court

described how in COMINT — and in a more recent case, Inserso Corp. v. United States, 961 F.3d

1343 (Fed. Cir. 2020) — the Federal Circuit “shift[ed], until the contract award date, the cut-off for

a challenge to a solicitation that would not have been possible prior to the proposal due date.”

VS2, 155 Fed. Cl. at 754 (emphasis added). In VS2, the government urged the Court to apply

Blue & Gold because the plaintiff, VS2, in effect challenged a GAO decision recommending

award to another offeror only after the agency implemented the GAO’s recommendation. Id. at

752–53. The Court declined to apply Blue & Gold because VS2 “could not have immediately filed

suit challenging” the GAO decision (a non-binding recommendation); there was no agency

action to challenge until the agency implemented the GAO’s recommendation by making a new

award decision. Id. at 756 (emphasis added). In contrast, Blue & Gold applies here because EGS

could have challenged Amendment 0007 before award but chose not to do so.

28

only productive hours. AR 3564. The table included non-productive hours in its

“Annual Fringe Benefits” column. AR 3564. This explanation fully accounts for the

immaterial discrepancy.

As explained above, see supra Section I.E, to address the discrepancy DLA had

identified, KBR provided the government the Corrected TCP, containing a more

detailed chart depicting separate columns for “Annual Pay (Productive Hours)” and

“Annual Pay (Productive + Non-Productive Hours).” AR 3564. In other words, the

“Annual Pay (Productive + Non-Productive Hours)” was updated to include the non-

productive hours previously included in the “Annual Fringe Benefits” column, which

reduced the amounts listed in the Corrected TCP’s “Annual Fringe Benefits (Excluding

Non-Productive Hours)” column. AR 3564. This remedied the discrepancy the

government had identified and fully addressed its clarification request. AR 4076

(Second PET Report) (“Based on the clarification, no additional clarifications were

required.”).

To be clear, the Corrected TCP altered neither the “Total Annual Compensation”

column for Years 2 through 5, AR 3571–72, nor the proposal’s proposed prices. Compare

AR 2615 (First SSAD) (indicating KBR’s pre-TCP price of $38,109,181.90), with AR 3614

(Second SSAD) (indicating that KBR’s price remained the same). As noted supra, while

the “Total Annual Compensation” column for Year 1 in the Corrected TCP reflected

slightly different salary amounts for each position, those changes corrected small math

errors; they had zero impact on KBR’s price proposal and were immaterial in terms of

the TCP itself. 26 Again, offerors were precluded from using the TCPs to change their

proposed prices or any other aspect of their proposals. AR 3480 (Amendment 0007)

(providing that the offerors’ TCPs were “to support the already submitted [FPRs]” and

that “[n]o other changes to proposals are permitted” (emphasis added)).

At oral argument, counsel for EGS all but conceded this point in confirming that

the sole problem with KBR’s initial TCP was that it appeared to contain contradictory

numbers. 27 In asking for this information, the government did not allow, and did not

intend to allow, KBR to revise its price, as it may have done in discussions. See FAR

15.306(d) (providing that discussions “are undertaken with the intent of allowing the

offeror to revise its proposal”). Instead, the government requested only that KBR

reconcile a discrepancy within its TCP. In sum, DLA did nothing more than “clarify

26 See supra n.16.

27Tr. 25:7–12 (“THE COURT: So it was a contradiction within the total compensation plan

between the two sets of numbers? [EGS COUNSEL]: There was a contradiction. THE COURT:

And the government said[,] can you explain the distinction? [EGS COUNSEL]: Exactly, can you

explain it.”).

29

certain aspects of proposals . . . or . . . resolve minor or clerical errors,” FAR 15.306(a)(2),

and, therefore, DLA’s subsequent communication with KBR about its TCP was a

clarification.

EGS argues, however, that DLA’s exchange with KBR constitutes discussions

because “KBR revised its proposal . . . by correcting inconsistencies and including

additional narrative to explain the changes and KBR’s modified proposal.” Pl. MJAR at

17. The fact that EGS describes the purpose of KBR’s TCP changes as “correcting

inconsistencies” reveals the minor scale of KBR’s changes, which were only to the TCP

and not KBR’s proposal generally. Again, KBR’s Corrected TCP merely corrected a

discrepancy within its TCP. See WaveLink, 154 Fed. Cl. at 270 (labeling a series of

proposal revisions as clarifications because the revisions “merely amounted to

correcting mistakes that were either clearly clerical or relatively minor errors or where

the information was readily present elsewhere in the proposal” (emphasis added)); cf. G4S

Tech. CW LLC v. United States, 109 Fed. Cl. 708, 722 (2013) (concluding that where

communications “merely sought and provided confirmation of information already present in

[a] proposal,” they were “not ‘discussions,’ [but] [i]nstead, . . . were ‘clarifications.’”

(emphasis added)).

EGS’s argument that KBR’s provision of “additional narrative” renders the

exchange discussions is similarly unavailing. Pl. MJAR at 17. Indeed, the Federal

Circuit has held that “[a]ny meaningful clarification would require the provision of

information[.]” ITAC, 316 F.3d at 1323 (emphasis added).

EGS nevertheless attempts to characterize KBR’s Corrected TCP as significant

because of the Agency’s praise for KBR’s corrected fringe rates. Pl. Resp. at 7.

Specifically, EGS notes that the “original price analysis report” included “no mention of

Annual Pay or Fringe Benefits,” while the “corrective action PNM” described KBR’s

salaries and fringe benefits as aligned with market conditions. Id. As an initial matter,

the “original price analysis report” to which EGS cites was signed on October 20, 2020

— almost ten months before DLA issued Amendment 0007 asking for the TCP. AR

2517 (PET Report of October 20, 2020); AR 3480 (Amendment 0007); AR 3484 (indicating

that DLA issued Amendment 0007 on July 15, 2021). The Court thus fails to understand

how the first price analysis report possibly could have analyzed KBR’s TCP (including

annual pay and fringe benefits). In other words, there is no reason the Court would

find some analysis of planned compensation pre-corrective action. See AR 3480 (noting

that, as of July 15, 2021, “[n]either party [had] submitted a total compensation plan with

the supporting narrative and data required by FAR 52.222-46”).

In any event, the heart of EGS’s argument — that “DLA could not have made the

finding it relied upon to conclude that KBR’s compensation was realistic” until DLA

30

“permit[ted] KBR to shift Fringe Benefits into Annual Pay,” Pl. Resp. at 7 — is

unsupported by the administrative record. EGS points to no evidence in the record that

the Agency would have reached a different conclusion based upon the initial TCP (i.e.,

in the absence of the subsequent clarification). Indeed, the Agency’s evaluation of

KBR’s initial TCP — written before the clarification — expressly indicates that DLA

approved of the salary and fringe benefits in KBR’s initial TCP. AR 4078 (Second PET

Report) (noting, on July 27, 2021, that “KBR’s total compensation plan that was

provided is realistic for the work to be performed and aligns with the supplemental

data that was provided. . . . Combined, the salaries and fringe benefits raise no concerns

about KBR’s ability to fill the two vacant positions and retain the professionals currently

employed.” (emphasis added)). 28

For the reasons explained above, the Court concludes that the exchange between

the government and KBR at issue constituted a clarification, not discussions — and it is

not a particularly close call. Even if it were a closer question, however, the Court would

defer to DLA’s conclusion in light of its contemporaneous characterization of the

exchange as a “clarification.” AR 4075 (Second PET Report) (“This should be a simple

clarification with KBR to understand the Exhibit 1 annual pay column.”); AR 3565

(email from the government to KBR, noting “[t]his should be a simple clarification with

KBR to understand the Exhibit 1 annual pay column.”); see also Tr. 24:3–6 (EGS counsel

conceding that DLA considered the exchange a clarification). The Court’s conclusion, in

that regard, is consistent with binding Federal Circuit precedent instructing that we

must give deference to an agency’s view of an exchange. ITAC, 316 F.3d at 1323 (“[W]e

give deference to an agency’s permissible interpretation of its own regulations.”); see

also, e.g., Davis Boat, 111 Fed. Cl. at 354 (“Finally, in close cases, it is well-established that

the government’s classification of a particular communication as a clarification

or . . . discussion[s] ‘is entitled to deference from the court,’ as long as that classification

is permissible and reasonable.” (quoting Linc Gov’t Servs., LLC v. United States, 96 Fed.

Cl. 672, 717 (2010), abrogated on other grounds by Safeguard Base Operations, LLC v. United

States, 98 F.3d 1236 (Fed. Cir. 2021))); 29 Mil-Mar, 111 Fed. Cl. at 535 (“[T]he agency’s

28Moreover, even if DLA had needed the information in KBR’s Corrected TCP to evaluate it ,

the subsequent exchange still may have qualified as a clarification. See DynCorp. Int’l, 76 Fed.

Cl. at 542 (“If a response to an EN provides information essential to evaluation criteria,

increases a past performance score or tips the scales toward the offeror providing the

clarification, it still may only be a clarification.”). In this case, however, KBR’s additional

information did not relate to evaluation criteria, its past performance evaluation, or the best

value calculus, and, thus, there is even less reason for characterizing the subsequent exchange

as discussions.

29The government cites Davis Boat, 111 Fed. Cl. at 354, to support its contention that the

exchange with KBR was a clarification, Def. Resp. at 4–5. The Court, however, does not

necessarily agree with that decision’s conclusion that an agency may accept an extensive,

31

characterization of an exchange as a clarification is entitled to deference from the

court[.]”); DynCorp Int’l, 76 Fed. Cl. at 542 (“[F]ollowing ITAC as it must, this court

resolves very close questions about an EN in favor of the government, if the EN was

intended as a clarification, was labeled as such, did not clearly violate the limitations on

clarifications expressed in FAR 15.306(a), and did not clearly stray into the forbidden

zone of discussions described in FAR 15.306(d).” (emphasis added)).

3. The Court Rejects the GAO’s Conclusion that the Exchange at Issue

Constituted Discussions

EGS brandishes the GAO’s December 15, 2021, decision in this case, labeling the

exchange at issue discussions. Pl. MJAR at 17–18. While the Court often finds GAO

decisions helpful and persuasive given its expertise in Federal procurement law, this

Court is not bound by GAO decisions, see Allied Tech. Grp., Inc. v. United States, 649 F.3d

1320, 1331 n.1 (Fed. Cir. 2011) (citing Honeywell, Inc. v. United States, 870 F.2d 644, 648

(Fed. Cir. 1989)), and respectfully disagrees with the GAO in this case.

The GAO’s decision in this matter presented the facts of the exchange in some

detail — reproducing the two tables from KBR’s respective TCPs, and quoting excerpts

from KBR’s narrative — and explained the GAO’s legal standards for distinguishing

between clarifications and discussions. AR 4049–52. As far as the Court can tell,

though, GAO’s analysis of the particular facts in this case consisted exclusively of the

following sentences:

KBR’s contemporaneous response included, as discussed

above, a revised exhibit with additional columns, pricing

information, and revised pricing totals, and a narrative in an

email detailing how its prices were calculated. That revised

exhibit and the accompanying narrative were reviewed and

incorporated by the agency in its evaluation documents.

Under these circumstances, we conclude that the communications

here ultimately constituted discussions.”

AR 4052 (emphasis added).

This conclusory holding, however, relies on the phrase “under these

circumstances” in lieu of any analysis of the differences between clarifications and

discussions as applied to the TCPs. While the GAO’s decision correctly recites the

GAO’s test for discussions — “whether the agency has provided an opportunity for

entirely missing, but required, document from one offeror in order to cure a proposal defect and

call it a clarification. See Davis Boat, 111 Fed. Cl. at 354.

32

proposals to be materially changed,” AR 4051 (citing Priority One Servs., Inc., 2001 WL

1872433) — the GAO failed to explain how KBR’s updated TCP, including, e.g., the

“additional columns,” materially altered KBR’s proposal. Similarly, the GAO’s

decision, AR 4052, cites the FAR definition of clarification and establishes that

“clarifications are not to be used to . . . revise the proposal,” but fails to explain why the

exchange cannot be a clarification even under that standard.

4. Clarification Timing — Dubinsky v. United States

Throughout briefing and oral argument, neither party raised the holding of

Dubinsky v. United States, 43 Fed. Cl. 243 (1999). Nevertheless, because Dubinsky may be

read as directly addressing the question before the Court, we consider the application of

that decision here.

In Dubinsky, the procuring agency held discussions with all offerors by sending

them letters informing them of proposal deficiencies. 43 Fed. Cl. at 249. After receiving

a response from the eventual awardee — but before receiving responses from the other

offerors — an evaluating official telephoned the eventual awardee “to discuss areas of

[its] responses that [the official] found to be problematic.” Id. at 250. The eventual

awardee addressed those concerns during the telephone call. Id. In the subsequent bid

protest, the protestor alleged that the phone call constituted improper discussions in

violation of FAR 15.307(b). Id. at 260.

This Court in Dubinsky sided with the plaintiff protestor, holding that the letters

the agency sent requesting FPRs constituted discussions, and after an agency engages in

discussions, it “generally may not engage in further discussions with any offerors.” 43

Fed. Cl. at 261. Thus, the Court held that the official’s telephone call with only the

eventual awardee constituted another round of discussions, which the agency denied to

the other offerors, thereby violating FAR 15.307(b). Id. at 262; see also FAR 15.307(b)

(requiring that “[a]t the conclusion of discussions, each offeror still in the competitive

range shall be given an opportunity to submit a final proposal revision”). This case is

clearly distinguishable on the grounds that DLA never sought FPRs in Amendment

0007 or thereafter.

Relevant to this protest, however, the Court in Dubinsky further held that the

telephone call with the eventual awardee could not have been merely a clarification

because of its timing in the procurement process. 43 Fed. Cl. at 262. Specifically, the

Court concluded: “Clarifications . . . are exchanges conducted in procurements where

discussions are not expected to be held; the term has no application to exchanges that occur

after discussions have been conducted with offerors.” Id. at 262 (emphasis added). In other

words, Dubinsky appears to hold that clarifications can only occur in a procurement

33

where the government has never conducted discussions. Applying that holding to this

procurement — in which the government conducted discussions prior to its contract

award decision that preceded corrective action — would mean the exchange at issue

cannot, by definition, be a clarification.

The Dubinsky decision gives this Court some pause. Nevertheless, the Court is

not persuaded to apply Dubinsky here for several reasons.

First, Dubinsky’s reading of the applicable FAR provision adds a restriction on

agency action not present in the regulation’s plain language. FAR 15.306(a)(1) provides

that “[c]larifications are limited exchanges, between the Government and offerors, that

may occur when award without discussions is contemplated.” The Court reads this to

mean that the government is permitted to engage in clarifications even when the

solicitation at issue anticipates making award without discussions. Dubinsky, in

contrast, appears to read that provision as if the word “only” has been inserted between

“may” and “occur” (rendering the phrase “clarifications . . . may only occur when

award without discussions is contemplated”). The Court does not read the regulation’s

plain language this way. See White v. United States, 543 F.3d 1330, 1337 (Fed. Cir. 2008)

(“[I]t is a bedrock canon of statutory construction that our judicial inquiry ends where

statutory language is plain and unambiguous.”).

Adopting Dubinsky here would also create an unduly rigid and restrictive rule,

particularly in the context of corrective action, that the FAR does not require. The

following hypothetical demonstrates this point. Imagine that a procurement involved

discussions with all offerors, after which the offerors submitted FPRs, the government

made a contract award, and a disappointed offeror protested. In the protest, the

disappointed offeror claims the awardee failed to provide an adequate explanation of

the relevancy of its past performance information; so, the agency takes corrective action

to allow offerors to submit additional information. The agency presumably would be

able to ask for clarification regarding the additional information concerning relevancy

because “the relevance of an offeror’s past performance information” is an explicit

example of a “clarification.” See FAR 15.306(a)(2) (“offerors may be given the

opportunity to clarify certain aspects of proposals (e.g., the relevance of an offeror’s past

performance information and adverse past performance information to which the

offeror has not previously had an opportunity to respond)”). Applying Dubinsky,

however, would automatically render such an exchange discussions — requiring the

agency to allow every offeror to submit another FPR, see FAR 15.307(b) — simply

because the procurement previously involved discussions. The Court does not believe

that the FAR establishes such a hair-trigger for additional rounds of FPRs. Cf. WaveLink,

154 Fed. Cl. at 272 (“Although the RFP mentioned that . . . clarifications would take

place as part of the initial screening period, there is no reason that such exchanges

34

should be converted into discussions just because they take place later in the process.”

(emphasis added)). 30

ITAC, a case decided four years after Dubinsky, further counsels against our

applying Dubinsky’s holding regarding the timing of a particular exchange. In ITAC,

the Federal Circuit explored “the distinction between ‘clarifications’ and ‘discussions’

under the 1997 revision to Subpart 15.3 of the [FAR].” 316 F.3d at 1315. The Federal

Circuit held that a series of ENs the government sent an offeror were not discussions

because “the government did not give [the offeror] the opportunity to revise its

proposal, and [the offeror] did not change the terms of its proposal to make it more

appealing to the government.” Id. at 1322. The court also explicitly warned against

applying “cramped conception[s] of ‘clarification,’” particularly because one of the “the

stated purpose[s] of the 1997 amendments . . . was to ‘[s]upport[ ] more open exchanges

between the Government and industry, allowing industry to better understand the

requirement [sic] and the Government to better understand industry proposals.’” Id. at

1323 (third, fourth, and fifth alterations in original) (quoting 62 Fed. Reg. at 51224).

The Court does not believe that requiring agencies to fully re-open discussions

following every exchange in a procurement, including those that would otherwise

qualify as clarifications, simply because discussions were previously held, “support[s]

more open exchanges between the Government and industry.” Id. (quoting 62 Fed.

Reg. at 51224). This is particularly true in the context of corrective action, in which

agencies will inevitably have simple questions about minor aspects of proposals “to

which the offeror has not previously had an opportunity to respond.” FAR 15.306(a)(2).

Indeed, applying Dubinsky in a case of corrective action, like this procurement, would

force agencies to fully re-open discussions each time they had a question — however

minor, and including, for example, the “clerical errors” referenced in FAR 15.306(a)(2)

— about an offeror’s submission, if the corrective action occurred after discussions. In

sum, the Court does not read the FAR to require a new round of FPRs whenever an

agency seeks a clarification about a FPR.

30Even counsel for EGS agreed that the government can seek clarifications on FPRs. Tr. 21:14–

21 (“THE COURT: Let me give you another case. Let’s say the government issues an

amendment to a solicitation changing a particular technical criteria and it gives everyone the

opportunity to submit a FPR . . . . Can the government ask for a clarification about the

submitted FPRs without reopening discussions? [EGS COUNSEL]: Absolutely.”).

35

5. Even if the Exchange Between KBR and the Government Was a

Discussion, EGS Cannot Demonstrate Prejudice

To demonstrate prejudice, a disappointed offeror must demonstrate that “but for

the alleged error, there was a substantial chance that [it] would receive an award.”

Allied Tech. Grp., 649 F.3d at 1326 (alteration in original) (quoting Statistica, Inc. v.

Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996)). While the Court concludes that the

exchange at issue between the government and KBR was a clarification, the Court holds

that even if the exchange were discussions entitling EGS to a corresponding proposal

revision, EGS would not be able to demonstrate prejudice because: (1) EGS only would

have been able to modify its TCP, which needed no revisions; and (2) EGS has not

demonstrated that KBR was somehow unawardable before it clarified its TCP.

a. Even If the Government’s Exchange with KBR Were a

Discussion, EGS Could Only Modify Its TCP Pursuant to

Amendment 0007

The FAR, as a general rule, requires the government to hold discussions with all

offerors, and allow all offerors to submit FPRs, if it holds discussions with one. FAR

15.306(d)(1) (“Discussions are tailored to each offeror’s proposal, and must be

conducted by the contracting officer with each offeror within the competitive range.”);

FAR 15.307(b) (“At the conclusion of discussions, each offeror still in the competitive

range shall be given an opportunity to submit a final proposal revision.”). EGS argues,

pursuant to these FAR provisions, that the government’s “discussion” with KBR about

its TCP should have triggered discussions with EGS that should have enabled EGS to

revise other aspects of its proposal, like its price in particular. Compl. ¶¶ 96 (“Despite

being in the competitive range, DLA did not provide EGS an equal opportunity to

change its prices or total compensation”), 98 (“If DLA had engaged in fair and equal

discussions, EGS could have lowered its total compensation and hence its price,

resulting in a lower price . . . .”); Pl. MJAR at 23 (“If EGS had been afforded an

opportunity to materially change its proposal like KBR, EGS could have removed the

$1,855,814” that it proposed as its CLIN 0001 price).

EGS is mistaken for several reasons.

First, the record reveals no reason for this Court to conclude that the government

would have provided a wider scope for post-TCP submissions than the Agency

provided in Amendment 0007 for the TCP itself. See AR 3480 (Amendment 0007) (“No

other changes to proposals are permitted.”). EGS’s suggestion to the contrary all but

necessarily assumes that the government invalidly limited the scope of proposal

revisions to begin with. If EGS wished to challenge the scope of the corrective action to

36

permit unlimited proposal revisions, however, EGS should have done so prior to

submitting its TCP. See supra Section V.A.2. EGS did not challenge the scope of

Amendment 0007, as its counsel conceded at oral argument, 31 thus waiving its objection

to the parameters of the corrective action DLA implemented.

Second, the government in any event may limit the scope of discussions, and

corresponding final proposal revisions, in a variety of circumstances, 32 including those

at issue here.

This Court has approved, for example, of an agency’s ability to limit the scope of

discussions following corrective action. In Carahsoft Technology Corp. v. United States, a

GAO “outcome prediction procedure” led to limited corrective action which included

“another round of FPRs . . . from both offerors.” 86 Fed. Cl. at 334–35. The corrective

action permitted both offerors “unlimited freedom as to the amount they wish to

propose from a price standpoint,” but disallowed any “technical changes.” Id. The

Court noted that the Court of Federal Claims “has recognized that subsequent to an

‘outcome prediction,’ an agency may re-open a solicitation and allow offerors to make only

limited revisions to their proposals.” Id. at 345 (citing Consol. Eng’g Servs., Inc. v. United

States, 64 Fed. Cl. 617, 627–29 (2005)). 33 The Court upheld the limited scope of FPRs,

concluding that an “agency may salvage those portions of the procurement untainted

by the problems identified in the protest,” and that “[e]very problem identified in a

procurement does not necessitate an entirely new competition.” Id. at 345. This Court

similarly held in WaveLink, Inc. v. United States that there is no “per se obligation to

permit all offerors to submit completely new or amended proposals just because the

[a]gency amends a solicitation in some respect” and that, instead, “the degree to which

an agency must permit the submissions of revised proposals depends upon whether a

protester can show that the addition or deletion of a requirement or evaluation factor

somehow prejudiced the protester.” 154 Fed. Cl. at 288.

Tr. 11:9–11 (“THE COURT: But you didn’t challenge the propriety of this amendment? [EGS

31

COUNSEL]: No, we didn’t.”).

32Indeed, at oral argument, counsel for EGS conceded that agencies can limit the scope of FPRs

as long as no party is prejudiced by the limitation. Tr. 41:13–18 (“THE COURT: I assume you

agree that where the government engages in discussions, it has the discretion to limit the scope

of proposal revisions so long as one party isn’t prejudiced? [EGS COUNSEL]: Correct.”).

33The Court reasoned that the agency’s “ability to limit proposal revisions derives, in part, from

contracting officials’ ‘broad discretion to take corrective action where the agency determines

that such action is necessary to ensure fair and impartial competition.’” Carahsoft, 86 Fed. Cl. at

345 (quoting DGS Contract Serv., Inc. v. United States, 43 Fed. Cl. 227, 238 (1999)).

37

This Court also has held that an agency may conduct post-corrective action

discussions with only one offeror. In Logistics Health, Inc. v. United States, 154 Fed. Cl.

51, 80–82 (2021), the Court upheld the agency’s post-corrective action discussions with

just one offeror when the discussions limited that offeror’s revision to the deficiency

identified during corrective action. In upholding the limited discussions, the Court

rejected arguments similar to those EGS makes here. The Court found, for example,

that the protestor “had no remaining deficiencies; rather, it merely hoped to have

another opportunity to improve its offer.” Id. at 80–81. The Court further explained that

the protestor “offers no convincing argument for why fairness requires the Court to

grant plaintiff the opportunity to now adjust its price, rather than merely to offer a new

program manager, which is all the GAO’s corrective action allowed [the awardee] to

do.” Id. at 81.

This Court specifically has cautioned against allowing unlimited FPRs when the

awardee’s price has been publicly disclosed. For instance, in Caddell Construction Co. v.

United States, 125 Fed. Cl. 30, 55 (2016), abrogated on other grounds by Sys. Stud. &

Stimulation, Inc. v. United States, 22 F.4th 994, 998 (Fed. Cir. 2021), the Court ordered the

government to cure a misleading round of discussions by providing an offeror — in

that case, the awardee — a chance to revise its price after providing the awardee the

information previously withheld. The Court held that reopening discussions to all

offerors was “unnecessary” to remedy the error and, moreover, “would cause more

harm than good.” Id. Specifically, the Court reasoned that “[t]he other offerors had a

fair shot at revising their final pricing proposals, and it would be unfair to give them

another bite at the apple, especially given that all the other offerors now know the

IG[C]E and [the awardee]’s final award price[.]” Id. The Court held, instead, that

“reopening discussions with all offerors and soliciting revised prices would unfairly

harm [the awardee].” Id. at 56.

In light of these decisions, it is clear that DLA permissibly limited the scope of

any discussions occurring during corrective action to offerors’ TCPs. In this case, just as

in Carahsoft, the offerors’ failure to submit TCPs was a “problem identified in [the]

procurement” that did “not necessitate an entirely new competition.” 86 Fed. Cl. at 345.

Instead, DLA permissibly elected to remedy the problem through corrective action

consisting of a limited acceptance of additional information necessary to comply with

FAR 52.222-46. Thus, even if the exchange between the government and KBR was a

discussion, EGS cannot demonstrate prejudice because its own TCP had no deficiencies.

See Pl. MJAR at 20 (referencing “[t]he fact that EGS did not need to make any changes to

its TCP”); AR 4072 (Second PET Report) (noting, on July 27, 2021 — two days before the

government emailed KBR — that it evaluated EGS’s TCP and “[n]o clarifications or

discussions are required”). In other words, the most that DLA would have been

38

required to do here is to provide EGS with an opportunity to further revise its TCP. But

in this case EGS’s TCP was not a problem, and was not standing in the way of a contract

award; revising it would not have changed the outcome of this procurement. 34

Third, EGS’s argument that it would have reduced its overall proposal price if

given the opportunity to submit a FPR, see Compl. ¶ 100; Pl. MJAR at 23, is particularly

unavailing because EGS previously disregarded DLA’s advice that EGS should do just

that. As discussed above, the government advised EGS during discussions to lower

two of its proposed costs: (1) its labor rate mark-up, from [ * * * ]% to [ * * * ]%, and

(2) its “Material, Travel, and Other ODC” rates, from [ * * * ]% to [ * * * ]%. AR 1912. In

response, EGS lowered its labor rate mark-up only to [ * * * ]%, not [ * * * ]%, and its

Material, Travel, and Other ODC rates to [ * * * ]%, not [ * * * ]%. AR 2277. EGS

concedes that meeting the government target for its labor rate mark-up alone would

have lowered its proposal cost by over $[ * * * ]. Pl. MJAR at 25. In another instance, the

government questioned the nearly $2 million cost EGS — the incumbent — proposed

for CLIN 0001, Transition-In. AR 1912 (providing that “the contract transition should

be minimal since EGS is the incumbent” (emphasis added)); see also AR 626 (§ L.3.5.2.a.i)

34 EGS also argues that an offeror’s “lack of weakness or deficiency is immaterial” to that

offeror’s right to revise its proposal during discussions. Pl. MJAR at 20 (citing Centerra Grp.,

LLC v. United States, 138 Fed. Cl. 407, 418 (2018), for the proposition that “[t]o the extent that

defendant and [awardee] argue that the FAR permits discussions with only one offeror, during

a corrective action taken in response to a bid protest, where the other remaining competitor’s

proposal contains no weaknesses, significant weaknesses or deficiencies, . . . the court must

disagree”); Pl. Resp. at 11 (same). Centerra, however, does not support EGS’s position. In that

case, the government moved to remand the case back to the procuring agency so it could

reconsider its award decision. Centerra, 138 Fed. Cl. at 410. The government provided the court

with “almost no details” regarding how it would conduct corrective action, which ultimately

“consisted of a fundamentally unfair and anti-competitive invitation to [the awardee] to revise

its proposal so that Centerra’s protest grounds would be rendered moot.” Id. The agency gave

Centerra no corresponding opportunity to revise its proposal. Id. The Court characterized the

agency’s behavior as “not corrective action, but a mockery of fundamental fairness” and found

that the agency “allow[ed] [Centerra’s] competitor to redress every flaw in its proposal, as

pointed out by the protestor, so that the agency’s award decision may withstand review.” Id. at

416. The Court also remarked that it would have rejected the proposed corrective action if the

agency had communicated its scope. Id. at 417. Finally, Centerra protested the corrective action

in its protest. Id. at 410. The facts of Centerra render its holding inapposite to the limited scope

of corrective action in this case; here, DLA provided offerors equal opportunity to submit a

TCP, no other proposal revisions were allowed, and EGS did not object to the scope of the

corrective action. See discussion supra Section V.A.2; see also Logistics Health, 154 Fed. Cl. at 80

(describing Centerra’s holding as a “fact-dependent determination” and finding that the case

does not “establish[] a rule for how this Court should treat corrective action resulting from

government error in the evaluation process, particularly as similar corrective action was

approved in Caddell” and other cases).

39

(noting, regarding CLIN 0001, that offerors “may propose zero cost if there is no cost”).

EGS conceded as much at oral argument. Tr. 42:16–18 (“THE COURT: But you agree

that [EGS] had the chance to address its higher price with the first FPR? [EGS

COUNSEL]: Yes, it did have that option.”); Tr. 46:13–15 (“THE COURT: And the price

you already had a chance to correct. [EGS COUNSEL]: Right, we did.”).

EGS, however, chose to keep its transition cost in its updated proposal. AR 2280.

EGS is essentially asking for “another bite at the apple,” Caddell Constr., 125 Fed. Cl. at

56, but only after refusing the first. In addition to the unfairness of allowing a

disappointed offeror to lower its price after seeing the awardee’s price, see id. at 55–56,

the Court finds that EGS was prejudiced here, if at all, not by DLA’s actions, but rather

by EGS’s own failure to lower its price when it had the chance to do so. Put differently,

KBR never received an opportunity to adjust its proposal price that EGS did not also

have. Both offerors submitted FPRs; EGS just wants another chance to get it right.

For the above reasons, the Court finds that — even if the exchange between KBR

and the government were discussions — the government permissibly limited the scope

of discussions to the offerors’ TCPs, and EGS cannot demonstrate prejudice. 35

b. The Administrative Record Does Not Support EGS’s

Assertion that KBR’s Proposal Was Unawardable Before the

Clarification

EGS also cannot demonstrate prejudice because there is no evidence that KBR’s

initial TCP rendered its proposal unawardable, as EGS claims. See Compl. ¶¶ 90, 93–94;

Pl. Resp. at 13–14 (“KBR’s proposal was unacceptable because its July 26 TCP proposed

Fringe Benefits that were not comparable to ‘market conditions’ and not ‘notably

similar’ to the Fringe Benefits proposed by EGS and found in the IGCE.” (quoting AR

3624 (PNM))). 36

35The GAO came to the same conclusion. AR 4053 (GAO Decision of Dec. 15, 2021) (“Even if

the agency had also opened discussions with EGS, as it did with KBR, the protester has not

established that the agency would have been required to allow EGS to revise other areas of its

proposal, such as its proposed transition-in costs. Therefore, while we find that the agency

engaged in discussions with the awardee, this issue is insufficient to sustain the protest because

of a lack of competitive prejudice to the protester.”).

36 The PNM actually reads that “there was notable similarity in the fringe benefits,” not that the

fringe befits were “notably similar,” as EGS quotes the document. AR 3624 (emphasis added).

Compare AR 3624 (PNM), with Pl. Resp. at 9, 14. Not a material discrepancy, to be sure, but the

Court notes it, nevertheless.

40

EGS provides no proof, or even any suggestion, from the record that KBR’s

proposal was somehow unawardable based on the quality of KBR’s initial TCP standing

alone. See Compl. ¶¶ 90, 93–94; Pl. Resp. at 13–14 (citing the PNM for the proposition

that KBR’s proposal was awardable after its Corrected TCP). When asked at oral

argument to identify where the record indicates that KBR’s original TCP was

insufficient to make KBR’s proposal awardable, counsel for EGS was unable to do so.

Tr. 75:9–10 (“THE COURT: Did [DLA] ever say [KBR’s proposal] was unawardable?

[EGS COUNSEL]: It does not say it’s unawardable[.]”)

Indeed, if anything, DLA’s July 27, 2021, evaluation of KBR’s initial TCP

indicates that KBR’s proposal was awardable even before the clarification:

KBR’s total compensation plan that was provided is realistic

for the work to be performed and aligns with [the]

supplemental data that was provided. . . . While having [sic]

a clarification from KBR is needed, the benefits discussed

align with the private sector. The salaries are within the

ranges provided in the supporting documentation, and the

fringe benefits are comprehensive. Combined, the salaries

and fringe benefits raise no concerns about KBR’s ability to fill the

two vacant positions and retain the professionals currently

employed. The position descriptions and supporting

documentation raise no concerns about KBR’s ability to perform

the requirements of the PWS.

AR 4078 (Second PET Report) (emphasis added). The Second PET Report repeated

much of this analysis after receiving KBR’s Corrected TCP. See AR 4078 (including both

the PET’s pre-clarification and post-clarification analysis of KBR’s TCP). The fact that

the Agency was able to repeat much of its analysis is yet further indication that KBR’s

Corrected TCP was not central to KBR’s receiving the award.

6. DLA Did Not Conduct Misleading Discussions with EGS Regarding

Its CLIN 0003 Pricing

EGS argues that DLA “engaged in misleading discussions with EGS” during the

initial, pre-corrective action award phase. Pl. MJAR at 23. Specifically, EGS argues that:

(1) DLA’s “Negotiation Target” for EGS under CLIN 0003, Preventive Maintenance, was

$[ * * * ], which is approximately $[ * * * ] less than EGS’s proposed price for CLIN 0003;

(2) DLA never told EGS of this target, and instead only asked EGS to lower its prices by

various percentages that would not enable EGS to meet the negotiation target; and

(3) EGS “lowered its rates as suggested by DLA,” but “[e]ven with these reductions, the

41

price difference . . . remained over $8 million.” Id. at 24–25. This argument does not

appear in EGS’s complaint and is not related to EGS’s central contention in Count One

that DLA failed to conduct equal discussions during corrective action. Nevertheless,

the Court examines the argument and finds it to be without merit.

As an initial matter, the administrative record supports EGS’s claim that DLA

failed to inform EGS of the “negotiation target” for CLIN 0003 and instead advised EGS

to reduce its price by various percentages. See AR 4063 (Second PET Report) (listing

CLIN 0003 “negotiation targets” for each offeror, including one of $[ * * * ] for EGS); AR

1912 (EGS ENs) (showing that the government advised EGS to lower its labor rate

mark-up down to [ * * * ]%, from [ * * * ]%, and to lower its ODC rates to [ * * * ]%, from

[ * * * ]%). EGS, however, cites no legal authority to support the contention that DLA’s

strategy of suggesting reduced rates constituted misleading discussions. Indeed, EGS’s

argument fails to meet the standard for misleading discussions, which “are

characterized by communications from the government that are incorrect, confusing or

ambiguous.” DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 670 (2010); see

also Agile Def., Inc. v. United States, 143 Fed. Cl. 10, 20 (2019) (“Additionally, discussions

are misleading ‘when the agency misdirect[s] the protestor as it revises its proposal.’”

(alteration in original) (quoting Greenland Contractors I/S v. United States, 131 Fed. Cl.

216, 225 (2017))), aff’d, 959 F.3d 1379 (Fed. Cir. 2020).

EGS points to no evidence that DLA provided any “incorrect, confusing[,] or

ambiguous” information regarding EGS’s CLIN 0003 price. DMS All-Star, 90 Fed. Cl. at

670. To the contrary, DLA unambiguously recommended that EGS reduce its price for

that CLIN. AR 1912 (EGS ENs). Even worse for EGS, it chose to not meet the

government’s suggested price cuts. See Pl. MJAR at 24 (conceding that “EGS lowered

its mark up of its Material, Travel, and Other ODCs to [ * * * ]%,” not [ * * * ]%, “and

lowered its labor rates from [ * * * ]% to [ * * * ]%,” not [ * * * ]%). In EGS’s own words, it

lowered its price by “approximately [ * * * ]” but fell more than $[ * * * ] shy of the

government’s recommendations. Id. at 25 (“The difference of [ * * * ]% lower for EGS’s

labor rates, would have amounted to an approximate reduction of $[ * * * ] in EGS’s

overall price.”). The fact that EGS fell short of DLA’s price reduction recommendations

by more than [ * * * ]% undercuts EGS’s argument that DLA’s discussions regarding

price were misleading — it indicates, instead, that EGS disregarded the government’s

expressed concerns.

Moreover, under the circumstances of this case, the Court is unconvinced that

DLA had any duty to mention EGS’s CLIN 0003 price in discussions.

The law is clear that contracting officers have a great deal of discretion regarding

the content and method of discussions. FAR 15.306(d)(3) (“[T]he contracting officer is

not required to discuss every area where the proposal could be improved. The scope

and extent of discussions are a matter of contracting officer judgment.”). The Federal

42

Circuit unequivocally reaffirmed this discretion in JWK International Corp. v. United

States, holding:

All aspects of the discussions, their subject, breadth, and

extent, are within the purview of the contracting officer.

Under the regulation, aside from areas of significant weakness

or deficiency, the contracting officer need not discuss areas in

which a proposal may merely be improved. Therefore, absent

bad faith or an abuse of discretion, the contracting officer

need not conduct discussions.

279 F.3d 985, 988 (Fed. Cir. 2002) (emphasis added) (citation omitted).

In JWK, the Federal Circuit upheld an agency’s decision not to hold discussions

on the offerors’ cost proposals when the agency rated both cost proposals as

“adequate.” 279 F.3d at 987. This Court similarly has confirmed contracting officer

discretion regarding discussions. See, e.g., Lyon Shipyard, Inc. v. United States, 113 Fed.

Cl. 347, 356 (2013) (holding that agencies only need to discuss an offeror’s proposed

price if the price “would preclude award to the firm” (quoting DMS All-Star, 90 Fed. Cl.

at 669)); IAP Worldwide Servs., 2022 WL 1021781, at *40(holding “where an agency has

not assessed a proposal with a deficiency or significant weakness, the government is not

required to engage in discussions with that offeror”).

In this case, EGS’s price did not “preclude award” to EGS. Lyon Shipyard, 113

Fed. Cl. at 356. To the contrary, the PET found that EGS’s initial proposal costs

“appear[ed] to align to the IGCE.” AR 2525–29 (PET Report of October 20, 2020) (noting,

instead, that discussions were only necessary “to ensure there is an understanding of

how the proposed prices were established”); see also AR 2614–15 (First SSAD) (finding

that EGS’s proposal was 3.8% less than the IGCE).

Considering that EGS’s pricing did not constitute a proposal deficiency or

significant weakness, DLA may not have been required to discuss pricing with EGS at

all. See JWK, 279 F.3d at 988. In any event, the Court finds that DLA’s discussions with

EGS regarding its CLIN 0003 pricing were not misleading.

For the above reasons, the Court rejects all of EGS’s claims as to Count One.

B. The Government Did Not Fail to Evaluate the Price Disparity Associated

with Transition-In Costs, Did Not Fail to Engage in Meaningful

Discussions Regarding Transition-In Costs, and Did Not Engage in

Disparate Treatment (Count Two)

As described above, the Solicitation’s first CLIN, “Transition-In Plan,” establishes

a 90-day transition period at the beginning of the new contract in order to minimize

43

performance delays. AR 1330 (PWS). EGS makes three related arguments regarding

CLIN 0001: (1) the Agency failed to properly evaluate the offerors’ approaches to CLIN

0001 (Transition-In), Compl. ¶¶ 104–109, 129–30; Pl. MJAR at 28–30; (2) the Agency

failed to engage in meaningful discussions regarding transition-in costs because if it

did, it would have either advised EGS to remove its transition-in costs or removed the

costs directly, Compl. ¶¶ 109–122, 126–28, 131; Pl. MJAR at 31–32; and (3) the Agency

engaged in disparate treatment regarding transition-in costs by requiring EGS to

explain its higher price but failing to require KBR to explain its significantly lower price

and potentially greater risk, Compl. ¶¶ 124–25; Pl. MJAR at 30–31. None of these

arguments have merit.

1. The Government Properly Evaluated the Price Disparity Associated

with Transition-In Costs

First, EGS argues that DLA “never analyzed the differences” between the two

offerors’ approaches to CLIN 0001 and never analyzed “what the different approaches

meant for the agency.” Pl. MJAR at 28. The administrative record, however, indicates

that DLA rigorously analyzed the different approaches.

One obvious difference DLA identified was the price for CLIN 0001 — EGS

proposed a price of $1,855,814.80, while KBR proposed a price of $[ * * * ]. AR 3611

(Second SSAD). During the first round of discussions, DLA questioned why EGS, as the

incumbent contractor, proposed such a high transition-in cost. AR 1912 (“Looking at

the CLIN 0001 (Transition In) cost, how was the $[ * * * ] calculated? . . . [T]he labor for

transition seems high with no understanding of how that cost was calculated since the

contract transition should be minimal since EGS is the incumbent.” (emphasis added)). 37

EGS responded “that it did not have any transition-in costs.” Compl. ¶ 107 (emphasis

added). Nevertheless, EGS proposed a transition cost over $1.8 million; it “used the

figure of $1,855,814.80 to represent a quarter of its proposed first year price . . . i.e., a

price to assist DLA with the approximate three (3) month gap between the end of the

prior contract . . . and the beginning of the new contract.” Id. ¶ 107; AR 1926 (EGS

37The language of CLIN 0001, which indicates quite clearly that the incumbent contractor

should have no transition costs, justifies DLA’s questions. AR 1330 (PWS) (providing that the

“Predecessor Contractor” would “retain full responsibility for tasks and deliverables”

throughout the transition and that the awardee would assume responsibility only after the

transition period). As noted above, the Solicitation also allowed offerors to propose no

transition costs if they would realistically incur none. AR 626 (§ L.3.5.2.a.i) (“The Offeror may

propose zero cost if there is no cost[.]”).

44

Response to ENs) (“There is no additional costs [sic] as EGS is the incumbent, just the

costs of 3 months of performance.”).

The Second PET Report explained the implications of EGS’s proposed transition

cost:

EGS explained their CLIN 0001 is based on how the current

cost-plus fixed fee for AFHE maintenance is completed. If

EGS, who currently holds the cost-plus fixed fee contract has

its three-month option exercised, then the cost for this

implementation will be zero. However, [if] the three-month

option is not exercised, then the CLIN 0001 cost will be as

stated in their proposal.

AR 4068.

KBR, in contrast, did not factor any award delay into its CLIN 0001 cost, nor did

KBR propose any cost for [ * * * ] during the transition. AR 2433 (KBR Response to

ENs). The government initially expressed concern about KBR’s low transition cost. AR

4062 (Second PET Report) (“KBR’s proposed price [for CLIN 0001] . . . is nearly [ * * * ]%

lower than the incumbent, which leads to questions about why the proposed price is so

much lower compared to the incumbent and why the incumbent is so much higher than

another proposal.”). The government inquired about this during discussions. AR 2433

(“Does Transition In really have [ * * * ] costs associated with that CLIN?”). KBR

responded by (1) explaining that “KBR did not include any [ * * * ] costs into [the]

Transition In CLIN” because “it is KBR’s understanding that [the] Predecessor[

Contractor]’s full responsibility for tasks and deliverables includes providing any

necessary [ * * * ],” and (2) citing the Solicitation provision placing all responsibility for

tasks and deliverables during the transition period on the incumbent contractor. AR

2433. 38

The government analyzed, and was satisfied with, KBR’s response:

For CLIN 0001, which is a one-time cost, KBR’s price of

$[ * * * ] includes all set-up and transition actions required to

start performing on the contract after the 90-day transition

period. KBR’s price is nearly [ * * * ] of the price of EGS and

EGS is the incumbent. During negotiations, KBR confirmed

38This alone disproves EGS’s contention that the Agency “never made KBR justify how it could

perform transition-in without [ * * * ].” Pl. MJAR at 29.

45

their CLIN 0001 price and indicated in their informal

breakdown of the actions that were comprised into their

development of CLIN 0001. Based on their technical proposal

and that there are no outstanding weaknesses, deficiencies, or

uncertainties, KBR has a clear understanding of what is needed to

perform.

AR 3625 (PNM) (emphasis added).

In other words, a simple review of the record thoroughly disproves EGS’s claim

that “DLA never reconciled or considered that EGS’s and KBR’s approaches and

strategies were completely different.” Pl. MJAR at 29; Compl. ¶ 109. Indeed, EGS’s

own complaint and MJAR reference DLA’s analysis. Compl. ¶ 106 (alleging that the

Second PET Report “noted the large price disparities and questioned KBR’s price”); Pl.

MJAR at 28 (referencing the “round of discussions held with EGS” regarding EGS’s

CLIN 0001 cost); id. at 29 (referencing the fact that “KBR explained its low proposed

price for CLIN 0001” to DLA (citing AR 2433, KBR Response to ENs)). In sum, the

Court finds no support for EGS’s claim that the Agency failed to consider the offerors’

different approaches to CLIN 0001.

EGS further argues that DLA should have, but never, “advised EGS during

discussions that [EGS] did not need to include an anticipated delay . . . as part of its

transition-in costs.” Pl. MJAR at 29. The Court disagrees; as explained above, the

Agency advised EGS of exactly that concern during discussions. See AR 1912 (EGS

ENs) (informing EGS, inter alia, that “the contract transition should be minimal since EGS is

the incumbent” (emphasis added)). EGS has only itself to blame for failing to heed

DLA’s warnings to reduce transition-in costs. See Carahsoft, 86 Fed. Cl. at 343 (“[A]n

agency is not required to ‘spoon-feed’ offerors in order to have meaningful

discussions.”). In sum, the Court agrees with KBR’s characterization of EGS’s final

CLIN 0001 price: “EGS made the business decision to include $1,855,814.80 in its final

price proposal.” KBR MJAR at 24.

2. The Government Did Not Engage in Disparate Treatment

Next, EGS argues that the Agency engaged in disparate treatment regarding

transition-in costs. Pl. MJAR at 30. This claim is also meritless.

The Federal Circuit recently articulated the two-part standard for a disparate

treatment claim; a plaintiff protestor must show either: (1) “that the agency

unreasonably downgraded [the protestor’s] proposal for deficiencies that were

‘substantively indistinguishable’ or nearly identical from those contained in other

46

proposals”; or (2) “that the agency inconsistently applied objective solicitation

requirements between [the protestor] and other offerors, such as proposal page limits,

formatting requirements, or submission deadlines.” Off. Design Grp. v. United States, 951

F.3d 1366, 1372 (Fed. Cir. 2020); see also Golden IT, LLC v. United States, 157 Fed. Cl. 680,

693–95 (2022) (rejecting disparate treatment argument pursuant to the Office Design

Group standard); IAP Worldwide Servs., 2022 WL 1021781, at *30–32 (same).

Despite the fact that EGS does not cite this binding standard in any of its briefs, 39

this Court interprets EGS’s argument as falling under the first prong of the Office Design

Group standard. See Pl. MJAR 30–31 (arguing that “DLA held EGS to a different

standard by requiring EGS to explain its higher price but failing to require KBR to

explain its significantly lower price and potentially greater risk”).

EGS defeats its own disparate treatment claim by repeatedly arguing in its own

briefs that the proposals were not similar. Pl. MJAR at 28 (“For CLIN 0001, Transition-

In, EGS and KBR proposed entirely different approaches and strategies as reflected in their

proposed prices and accompanying explanations. . . . Despite the significant differences,

DLA never analyzed the differences . . . . The disparity in the two proposals was so

stark . . . .” (emphasis added)); id. at 29 (asserting that “EGS’s and KBR’s approaches

and strategies were completely different” (emphasis added)).

The record supports EGS’s characterization. See AR 1926 (EGS Response to ENs)

(describing that “EGS calculated the total cost for the first 12 months of the contract and

then divided by 4 to arrive at a price for the 3 month (1/4 of a year) transition period”);

AR 2433 (KBR Response to ENs) (“[I]t is KBR’s understanding that [the] Predecessor[

Contractor]’s full responsibility for tasks and deliverables includes providing any

necessary [ * * * ] for services performed through the end of their period of performance.

Therefore, KBR did not include any [ * * * ] cost into [the] Transition In CLIN.”); see also

discussion supra Section V.B.1 (finding that the Agency thoroughly evaluated the

differences in the offerors’ proposals regarding CLIN 0001).

Accordingly, the Court finds no merit to EGS’s self-contradictory claim of

disparate treatment and rejects it.

39 Seegenerally Pl. MJAR; Pl. Resp. Contra Def. MJAR at 29–30 (citing Office Design Group). EGS

instead paraphrases, and arguably misstates, a standard from a Court of Federal Claims case

decided before Office Design Group: “It is axiomatic that agencies must treat prospective offerors

in a fair and consistent fashion.” Pl. MJAR at 30 (citing Afghan Am. Army Servs. Corp. v. United

States, 106 Fed. Cl. 714, 729 (2012), for the proposition that “an agency action is arbitrary when

the agency offered insufficient reasons for treating similar situations differently”). In any event,

this Court is bound by the Office Design Group standard and applies it here.

47

3. The Agency Was Not Required to Give EGS the Opportunity to

Remove Its Transition-In Costs During Corrective Action or to

Otherwise Ignore the Costs EGS Proposed

Finally, EGS argues that DLA failed to conduct meaningful discussions with EGS

regarding EGS’s transition costs and, alternatively, that DLA should have removed

EGS’s transition costs. Both arguments fail.

EGS’s first argument is that “[d]uring corrective action, DLA had every

opportunity to engage in discussions with EGS, just as it did with KBR” and should

have “allow[ed] EGS an opportunity to change its pricing for CLIN 0001.” Pl. MJAR at

31. As discussed above, this argument fails because: (1) the exchange between KBR

and the government during corrective action was a clarification, not a discussion, and

thus did not entitle EGS to additional proposal revisions; and (2) even if the exchange

were a discussion, the Agency properly limited the scope of corrective action to revising

the TCPs, which provided EGS no opportunity to revise its CLIN 0001 pricing. See

discussion supra Section V.A. 40

EGS next argues that DLA “removed all transition-in costs from [EGS’s proposal

in] the Interim Support contract,” Pl. MJAR at 29 n.3, and thus should have “removed

transition-in costs from EGS’s proposal” in this contract, id. at 30. The Court struggles

to understand EGS’s argument. In any event, there is no administrative record

evidence to support this argument because no documents address any interim bridge

contract. Counsel for EGS conceded this at oral argument. Tr. 89:7–14 (“THE COURT:

[I]t sounds like none of this is in my record. [EGS COUNSEL]: It’s not.”). 41

For the above reasons, the Court rejects all of EGS’s claims as to Count Two.

40To the extent that EGS argues that the “$1,855,814 [that EGS proposed] for delay costs

amounts to a deficiency or material mistake in EGS’s proposal that DLA considered during the

corrective action evaluation,” and thus entitled EGS to additional discussions, Pl. MJAR at 31,

the Court finds, again, that DLA did raise this issue with EGS during discussions, and EGS

simply chose to ignore it, see AR 1912 (EGS ENs) (noting, inter alia, that “the contract transition

should be minimal since EGS is the incumbent” (emphasis added)).

41 See also Tr. 88:10–19 (“THE COURT: How did they do it in the bridge contract? First of all, is

any of that in the record, the bridge contract materials? [EGS COUNSEL]: I asked for it to be in

the record, but they wouldn’t allow us to have it in the record. THE COURT: And you didn’t

file a motion to make them, so I don’t have any of that information. I don’t know what I’m

supposed to do with any of that.”).

48

C. The Government Reasonably Evaluated KBR’s TCP Pursuant to FAR

52.222-46 (Count Three)

EGS characterizes Count Three as a cohesive claim that DLA conducted an

improper price realism analysis. Compl. at 25 (“DLA Failed to Properly Evaluate the

Price Realism of KBR’s Proposed Professional Employees Under FAR 52.222-46”

(capitalization altered)). There are two problems with this description. First, FAR

52.222-46 requires a compensation realism analysis, not a price realism analysis. See, e.g.,

Eskridge & Assocs., 955 F.3d at 1346. Second, most of EGS’s arguments within Count

Three are completely unrelated to either price realism or compensation realism.

Nevertheless, the Court addresses each argument in turn and finds them all to be

without merit.

1. Price Realism and Compensation Realism Analyses — General

Principles

A price realism analysis is an agency’s evaluation of an offeror’s overall price

conducted to ensure that the price is not so low as to threaten contract performance.

See, e.g., Asset Prot. & Sec. Servs., L.P. v. United States, 5 F.4th 1361, 1363 (Fed. Cir. 2021)

(describing an agency’s determination “whether [prices] were unreasonably low” as

“price realism”); DMS All-Star, 90 Fed. Cl. at 663 (“A ‘price realism analysis,’ a term not

employed in the FAR, examines the performance risk of proposals in a fixed-price

contract procurement, with particular attention to the risk of low-priced proposals[.]”

(emphasis added)); Vernon J. Edwards, Price Realism: A Primer, 28 Nash & Cibinic Rep.

NL ¶ 1 (Jan. 2014) (“Price realism analysis is done in fixed-price acquisitions to

determine whether a price is unrealistically low and to what degree, and to figure out

why it is low so that risk can be properly assessed.”).

In contrast to a price realism analysis, a compensation realism analysis per FAR

52.222-46, see supra Section V.A.2, is narrower and involves only “evaluat[ing] whether

a[n offeror’s] proposed compensation is too low.” Eskridge & Assocs., 955 F.3d at 1346

(emphasis added); see also Sparksoft Corp., 141 Fed. Cl. at 627 (holding that FAR 52.222-46

imposed on an agency “an obligation to undertake a realism analysis of the professional

compensation rates”); Abacus Tech. Corp., 2020 WL 1547463, at *4 n.2 (holding that FAR

52.222-46 requires, “in effect, a price realism evaluation regarding an offeror’s proposed

compensation”).

DLA inaccurately described the analysis necessitated by FAR 52.222-46 as a price

realism analysis. See AR 3480 (Amendment 0007) (“Neither party submitted a [TCP]

with the supporting narrative and data required by FAR 52.222-46 to permit the price

49

realism analysis required by the clause.” (emphasis added)). EGS appears to have

followed DLA’s lead. See Compl. ¶ 136–37 (alleging that DLA failed “to conduct a price

realism analysis of professional employees as required under FAR 52.222-46”). 42

Pointing out this inaccuracy may seem pedantic, but the difference between the

two types of analyses is significant. Price realism requires an agency to evaluate

offerors’ pricing (i.e., the amount the government will be charged), whereas the

narrower compensation realism analysis focuses on the possible impact to the

government of paying employees too little; relatedly, FAR 52.222-46 is also intended, in

part, as a worker-protection provision:

[T]he clause is designed to afford professional services

employees protections mirroring those afforded other

workers under the [SCA]. The primary purpose of the SCA is

to protect “wage standards of employees” by preventing

“federal purchasing power [from] playing a role in

suppressing wage rates,” with particular emphasis given to

the impact of that power in rebiddings and successor

contracts.

CRAssociates, 95 Fed. Cl. at 370 (third alteration in original) (footnote omitted) (quoting

Ft. Hood Barbers Ass’n, 137 F.3d at 309).

Despite the parties’ imprecise phrasing, the Court finds that DLA properly

evaluated KBR’s TCP pursuant to FAR 52.222-46.

2. DLA Reasonably Evaluated KBR’s Proposed Professional

Compensation Pursuant to FAR 52.222-46

FAR 52.222-46(a) requires the government to evaluate TCPs to ensure that they

“reflect[] a sound management approach and understanding of the contract

requirements,” and to consider the proposed compensation “in terms of its impact upon

recruiting and retention, its realism, and its consistency with a total plan for

compensation.” FAR 52.222-46(a); see also CSC Gov’t Sols., LLC v. United States, 129 Fed.

Cl. 416 (2016) (“[B]ased on the text of [FAR 52.222-46], the procuring agency must

conduct a rational analysis of the realism of the offerors’ proposed salaries with regard

to program continuity, retention, and ‘uninterrupted high-quality work.’” (quoting

42See also Pl. MJAR at 34 (“The evaluation documents do not show DLA conducted a price

realism analysis as required by FAR 52.222-46[.]”); Pl. Resp. at 10 (“The sole purpose of the TCP

was to allow DLA to perform a price realism analysis as required by FAR 52.222-46.”).

50

OMV Med., Inc. v. United States, 219 F.3d 1337, 1339 (2000))). EGS seizes upon some of

the language in FAR 52.222-46(a), arguing: (1) that the Agency failed to “indicate that it

considered whether KBR proposed a ‘sound management approach,’” Pl. MJAR at 34

(quoting FAR 52.222-46(a)); and (2) that DLA failed to analyze “whether the

compensation [KBR is paying] its current employees will ensure ‘uninterrupted high-

quality work’ or whether placing these employees in new roles will” harm retention.

Pl. MJAR at 35 (quoting FAR 52.222-46(a)).

The Second PET Report, however, reflects the Agency’s due and reasonable

consideration of these factors for KBR’s proposal, finding, inter alia: (1) the professional

positions’ “salaries with fringe benefits indicate the capability of the proposed

compensation structure to obtain and keep suitable qualified personnel to meet mission

objectives”; (2) “the differences in skills, the complexity of various disciplines, and

professional job difficulty have been evaluated and considered”; and (3) “[t]he position

descriptions and supporting documentation raise no concerns about KBR’s ability to

perform the requirements of the PWS.” AR 4078 (emphasis added). The Second PET

Report thus shows that DLA also evaluated KBR’s TCP and found that it reflected an

“understanding of the contract requirements,” as required by FAR 52.222-46(a). The

PNM reflects similar considered analysis. AR 3624 (“Also, eight of KBR’s ten

professional employees are already employed, mitigating any risk of KBR having the

personnel necessary to perform when it replaces the incumbent.” (emphasis added)).

Accordingly, EGS’s arguments regarding FAR 52.222-46(a) fail.

FAR 52.222-46(b) reiterates the importance of employee retention. FAR 52.222-

46(b) (providing that proposed compensation levels “should reflect a clear

understanding” of contract work and “should indicate the capability of the proposed

compensation structure to obtain and keep suitably qualified personnel to meet mission

objectives”). Similarly, that subparagraph notes that offerors proposing lower

compensation than that of the incumbent “will be evaluated on the basis of maintaining

program continuity, uninterrupted high-quality work, and availability of required

competent professional service employees.” Id. Relatedly, “[o]fferors are cautioned

that lowered compensation for essentially the same professional work may indicate lack

of sound management judgment and lack of understanding of the requirement.” Id.

EGS relies on FAR 52.222-46(b) to claim that DLA was required to “compare the

incumbent EGS rates [with] the KBR proposed rates.” Pl. MJAR at 36. Over time, this

Court has been inconsistent regarding whether this provision requires, or merely

encourages, an agency to directly compare proposed salaries with incumbent salaries.

Compare CRAssociates, 95 Fed. Cl. at 371 (Allegra, J.) (holding that the provision requires

agencies to compare offerors’ proposed salaries to the incumbent’s salaries, because

“[a]lthough not exactly plain, the clause’s language certainly infers the need for such a

51

comparison as it requires the agency to perform additional analysis when an offeror’s

compensation levels are lower than those paid by the incumbent”), with CSC Gov’t Sols.,

129 Fed. Cl. at 432 n.15 (Lettow, J.) (declining to apply CRAssociates because “[u]nless

the RFP directs the procuring agency to perform its analysis according to a particular

process or formula, a rational evaluator only needs to follow the general guides

regarding compensation rate evaluations as set forth in FAR 52.222-46”). 43

This Court need not definitively interpret this aspect of FAR 52.222-46, however,

because DLA adequately and reasonably compared the proposed compensation plans,

to include the incumbent’s. AR 3612 (Second SSAD) (“Although KBR proposed

[ * * * ]% lower salary for the Project Manager and KBR proposed lower salaries for at

least three of their professional employees, their proposed compensation was still

within the range of similarly situated professionals in the commercial marketplace as

evidenced by their supporting data.”). In other words, DLA met the requirements of

FAR 52.222-46 as CRAssociates explained them; DLA compared KBR’s proposed

compensation with EGS’s proposed compensation, the first CRAssociates prong, and

found KBR’s proposed compensation realistic, the second CRAssociates prong.

CRAssociates, 95 Fed. Cl. at 371.

EGS asserts that DLA violated FAR 52.222-46 because DLA “never evaluated or

even considered whether imposing greater oversight responsibilities” on KBR’s

professional employees by [ * * * ] its technicians “would impact KBR’s Technical

Approach or negatively affect its understanding of the requirements.” Pl. MJAR at 33–

34. EGS never ties this hypothesis — that [ * * * ] some of KBR’s non-professional

employees would impact performance of its professional employees — with the language

or requirements of FAR 52.222-46. Indeed, this argument appears to be nothing more

43The cases also differ in the application of a Federal Circuit case, OMV Medical, Inc. v. United

States, 219 F.3d 1337 (Fed. Cir. 2000), in which “the Federal Circuit interpreted a predecessor

version of the clause in question.” CRAssociates, 95 Fed. Cl. at 371. In CRAssociates, Judge

Allegra held that OMV requires agencies “to make two separate determinations”: (1) “whether

each offeror’s compensation package was generally consistent with the [incumbent’s] salaries”;

and (2) “whether each offeror’s compensation plan was realistic, i.e., whether it indicated that

the offeror understood the scope of the work.” Id. In CSC Government Solutions, in contrast,

Judge Lettow found that OMV “does not lay out a mandatory two-prong framework” for FAR

52.222-46 analyses; instead, “the two-step analytical method addressed in OMV was advanced by

[the agency] in the RFP for the procurement at issue in that case.” 129 Fed. Cl. at 432 (emphasis

added) (noting that the Federal Circuit held in OMV that the predecessor version of FAR 52.222-

46 generally “does ‘not require the preparation of minimum acceptable salary levels’ and

‘nothing prohibit[s] the [government] from awarding the contract to an offeror with salary

levels lower than the minimum salary levels’ derived from incumbent rates” [alteration in

original] (quoting OMV, 219 F.3d at 1344)).

52

than an attack on the Agency’s technical evaluation, but without reference to any such

evaluation criteria or documents. The Court therefore rejects this argument to the

extent it challenges DLA’s compensation realism analysis. To the extent the argument

attempts to reframe EGS’s problems with KBR’s technician [ * * * ], the Court finds that

the record, again, clearly explains and adequately supports the Agency’s evaluation of

KBR’s proposed [ * * * ]. 44

Finally, the Court holds that the Agency’s analysis of the TCPs did not

“parrot[],” Pl. MJAR at 34, the requirements of FAR 52.222-46 but instead constituted

the thoughtful analysis required.

For these reasons, the Court finds that DLA conducted a valid compensation

realism analysis pursuant to FAR 52.222-46.

3. The Court Rejects EGS’s Remaining Arguments as Unsupported by

the Administrative Record or Because They Reflect a Mere

Disagreement with the Agency’s Considered Judgment

The remaining arguments EGS deploys constitute a miscellany of assorted

grievances with the procurement, all of which are either unsupported by the record or

amount to mere disagreement with the Agency’s considered judgment — a legally

insufficient ground for protest. See, e.g., E.W. Bliss Co., 77 F.3d at 449 (“Procurement

officials have substantial discretion to determine which proposal represents the best

value for the government.”); Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377, 384

(2003) (“[A]n offeror’s mere disagreement with the agency’s judgment concerning the

adequacy of the proposal is not sufficient to establish that the agency acted

unreasonably” (quoting Carlson Wagonlit Travel, B-287016, 2001 CPD ¶ 49, 2001 WL

254317 (Comp. Gen. Mar. 6, 2001))), aff’d, 365 F.3d 1345 (Fed. Cir. 2004); Harmonia

Holdings Grp., LLC v. United States, 152 Fed. Cl. 97, 111 (2021) (“[Plaintiff protestor] may

disagree with the agency’s assessment, but such a disagreement does not allow a court

to displace the reasoned and rational judgment of the agency.”).

44See AR 2557 (TET Report) (concluding that KBR’s responses to Agency questions on KBR’s

staffing plan provided “sufficient detail [to] demonstrate[] that KBR has an adequate

understanding of the requirements and will be able to . . . meet the requirements of PWS Section

5.1.”); see also AR 3623–24 (Second SSAD) (explaining, under a “Price Realism” subheading, that

(1) the Agency conducted a second round of discussions with KBR regarding KBR’s

understanding of the PWS, (2) the Agency consulted the TET after KBR disclosed its [ * * * ]

plan, and (3) the TET found the plan “to be acceptable since the solicitation did not require

technicians [ * * * ]”).

53

For example, EGS contends DLA should have lowered KBR’s rating of “Good”

under Factor 1, Technical Approach, because KBR proposed lower salaries than did

EGS for at least four of its professional employees. Pl. MJAR at 33. The record,

however, shows that the Agency took KBR’s lower salaries into consideration in

awarding KBR its “Good” rating. AR 3612 (Second SSAD) (“Although KBR proposed

[ * * * ]% lower salary for the Project Manager and KBR proposed lower salaries for at

least three of their professional employees, their proposed compensation was still

within the range of similarly situated professionals in the commercial marketplace as

evidenced by their supporting data.”). Accordingly, EGS’s contention amounts to mere

disagreement with the Agency’s judgment, and this argument fails. See, e.g., Banknote,

56 Fed. Cl. at 384. 45

Next, EGS argues that DLA never “considered whether KBR’s proposed

personnel are considered professional employees and thus exempt from the SCA.” Pl.

MJAR at 35. The Court fails to understand this argument. EGS provides no support for

that assertion — either legal or factual (in the administrative record) — and, in any

event, FAR 52.222-46 does not require agencies to independently verify whether an

offeror’s proposed professional employees are exempt from the SCA. The Court also

agrees with KBR that EGS does not identify any specific labor position that the Agency

allegedly misidentified. KBR Resp. at 19. This argument is not well developed or

supported, and the Court rejects it.

EGS next asserts agency error related to KBR’s putative plan to hire at least some

professional employees directly from EGS. Pl. MJAR at 35–36 (“DLA failed to consider

the inherent risk associated with hiring incumbent employees. . . . DLA’s evaluation of

KBR’s professional employees that it proposed to hire from EGS is . . . arbitrary and

capricious[.]”). EGS provides no support from the administrative record for EGS’s

assertion that KBR plans to hire EGS’s professional employees. Id. Further, both the

government and KBR flatly dispute the claim. Def. Resp. at 16 (“KBR did not, as EGS

contends, propose hiring any of EGS’s professional employees[.]”); KBR Resp. at 21

(“KBR’s plan does not rely on hiring EGS professional employees; KBR has been

independently recruiting to fill its two open positions.”).

The Court finds, as a factual matter, that the government and KBR are correct.

See AR 3574 (KBR’s Corrected TCP) (“Our proposed professional service employees are

current KBR employees . . . who are ready to start the transition period work

immediately to ensure uninterrupted program continuity. To fill the two new hire

45If EGS intends this argument to mean that the Agency should have lowered KBR’s Technical

rating because of KBR’s TCP, the Court agrees with KBR that this claim “improperly conflates

the Technical and Price factors.” KBR Resp. at 19.

54

positions, we are currently conducting interviews to identify, hire, and prepare our new

support personnel to join the transition effort.” (emphasis added)). 46 Accordingly, this

argument regarding KBR’s hiring plan is also baseless. 47

Finally, EGS contends that “DLA only considered KBR’s base year salary rates”

and “arbitrarily failed to . . . evaluate the salary reduction each year of the contract.” Pl.

MJAR at 38 (citing only “Tab 104” of the administrative record, the 21-page Second PET

Report). EGS argues this putative failure matters because “an agency may not consider

professional salary in just the base year but must also consider all periods of

performance.” Pl. MJAR at 38 (citing in support only two GAO decisions, SURVICE

Eng’g, B-414519, 2017 CPD ¶ 237, 2017 WL 3309909 (Comp. Gen. July 5, 2017), and L-3

Nat’l, B-411045, 2016 CPD ¶ 233, 2015 WL 12631232 (Comp. Gen. Apr. 30, 2015)).

Once again, the Court finds that the record disproves EGS’s assertion. While the

Second PET Report to which EGS cites includes a chart focusing only on “total annual

compensation for year 1 of the contract,” the same page of the report also notes that:

(1) “KBR provided total annual compensation for all five years”; and (2) “[w]hile not

included in the narrative, KBR has applied an average of [ * * * ]% escalation for each

year; specifically [ * * * ]% from year 1 to year 2, [ * * * ]% from year 2 to year 3, [ * * * ]%

from year 3 to year 4 and [ * * * ]% from year 4 to year 5.” AR 4074. In other words,

DLA did exactly what EGS claims the Agency should have done — DLA “consider[ed]

all periods of performance” when evaluating salary.

This text is long and has been trimmed here. Open the source document for the complete record.