Alisud - Gesac Handling - Servisair 2 Scarl v. United States

In the United States Court of Federal Claims

No. 22-61

(Filed under Seal: August 26, 2022)

(Reissued for Publication: September 8, 2022) 1

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ALISUD - GESAC HANDLING – *

SERVISAIR 2 SCARL *

also known as *

ALGESE 2 SCARL *

also known as *

ALGESE *

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Plaintiff, *

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v. * Material Misrepresentation, Labor Unrest,

* Past Performance Evaluation,

THE UNITED STATES, * Responsibility, Technical Evaluation,

* Motion to Dismiss, MJAR

Defendant. *

*

and *

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LOUIS BERGER AIRCRAFT SERVICES, INC. *

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Defendant-Intervenors. *

*

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OPINION AND ORDER

DAMICH, Senior Judge

On January 19, 2022, Plaintiff Algese (“Plaintiff”), filed a post-award bid protest

challenging the United States Government’s (“Government”) award to Defendant-Intervenor

Louis Berger Aircraft Services, Inc. (“LBAS”). The bid protest concerns two contracts reflecting

request for proposals (“RFPs”) N68171-20R-0014 (the “Naples Contract”) and N68171-21R-

6001 (the “Rota Contract”). These contract awards were issued by the Department of the Navy’s

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This reissued Opinion and Order incorporated the agree-to redactions proposed b the

parties. The redactions are indicated with “XXXXX.”

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Fleet Logistics Center (the “Navy” or the “Agency”) for air terminal and ground handling

services at two Navy airfields, respectively located in Rota, Spain and Naples, Italy.

ASvi155LBAS is the incumbent for the Rota contract, which it has held since 2015.

Algese is the incumbent for the Naples contract, which it has held since 1981. Relevant to this

bid protest, Algese alleges that LBAS’s bids for the Rota and Naples contracts were misleading

and reflected material misrepresentations because LBAS’s Past Performance submissions did not

acknowledge that LBAS faced labor unrest and a number of workforce reduction-related lawsuits

in Spanish courts stemming from its post-2015 management of the Rota airfield.

On January 25, 2022, the Government requested that Algese’s bid protest be remanded to

the Navy in lieu of four Spanish court judgments against LBAS, “to reconsider the award

decisions” for the Rota and Naples contracts. ECF No. 21. On January 28, 2022, this Court

granted the Government’s Motion to remand to the Navy. ECF No. 27. On May 2, 2022, the

Navy submitted the result of its review, which concluded that award of both the Rota and Naples

contracts should properly remain with LBAS. ECF No. 31. On May 20, 2022, Algese filed an

Amended Complaint to proceed with challenging both contract awards to LBAS. ECF No. 35.

On June 29, 2022, Algese filed a Motion for Judgment on the Administrative Record. ECF No.

41. On August 3, 2022, the Government filed a Cross-Motion for Judgment on the

Administrative Record, including a Motion to Dismiss the Rota portion of Algese’s bid protest.

Also on August 3, 2022, LBAS filed a Cross-Motion and Response to Algese’s Motion. ECF

No. 45. On August 17, 2022, Algese filed a Response to the Government and LBAS. ECF No.

46. On August 24, 2022, the Government and LBAS both filed a Reply to Algese’s Response.

ECF No.’s 53-54.

The Government presents two arguments supporting its Motion to Dismiss Algese’s

protest of the Rota RFP (exclusively). First, the Government contends that Algese was

fundamentally ineligible for award of the Rota RFP because it was a foreign contractor without a

facilities clearance. However, the Government’s position is undermined in part by the fact that it

made representations to Algese about these clearance matters being addressed after rather than

before award. Second, the Government also argues that Algese lacks standing because it did not

even finish second in the bidding for the Rota RFP. However, Algese’s arguments, if proven on

the merits, would very likely move it into second place in line behind LBAS for award of the

Rota RFP. The Government may not contend that a Plaintiff must prove the merits of its case in

order to establish standing – therefore, questions about which bidder would have finished second

cannot be the basis for granting the Government’s Motion to Dismiss.

Nevertheless, the Government’s Cross-Motion for Judgment on the Administrative

Record succeeds with respect to both the Rota and Naples RFPs. Concerning the Rota RFP,

Algese’s case primarily turns on the emphasis of labor unrest at the Rota airbase and related

Spanish Court cases. Algese alleges that LBAS materially misrepresented its Past Performance

reference for its incumbent performance at the Rota airbase by omitting information about labor

unrest and related Spanish Court cases, and also that the unrest should have induced the Navy to

downgrade LBAS, or to make adverse responsibility findings. However, the Navy was already

well aware of the labor unrest, found that it did not impact LBAS’s performance at Rota, and

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even considered and then declined to add a “labor relations” evaluation category to the next

(current) Rota solicitation. The Navy also rationally found that the Spanish court cases

stemming from the unrest represented differences in national values between Spain and the

United States – the cases reflected routine process in Spain, not poor business ethics or disregard

for legal rights on the part of LBAS. Furthermore, the Spanish Ministry of Defense reportedly

considered disqualifying LBAS, and then issued an affirmative approval of LBAS’s eligibility

for the Rota RFP. The Court holds that the Navy rationally considered the labor unrest at Rota

during the bidding process. Accordingly, given the Navy’s familiarity with the labor unrest, the

Court additionally holds that LBAS’s failure to discuss the unrest in its Past Performance

submission does not constitute a material misrepresentation and did not taint the bidding process.

The Court further holds that the Navy rationally found that the Spanish court cases stemming

from the unrest did not materially undermine LBAS’s bid. Finally and separately, the Navy’s

finding that Algese’s technical proposal was “unacceptable” was also rational.

Concerning the Naples RFP, Algese’s arguments against award to LBAS are

preponderantly a response to LBAS submitting its incumbent performance at Rota as a Past

Performance reference (again without acknowledging labor unrest or Spanish court cases). Thus,

Algese makes many of the same labor unrest-related arguments and asserts that the labor unrest

at Rota will repeat at Naples. These arguments fall short for the same reasons that they are

insufficient to contest the Navy awarding the Rota RFP to LBAS.

Beyond the labor unrest arguments, Algese further challenges award of the Naples RFP

to LBAS by contending that the Navy (1) irrationally waived for LBAS the suggestion that

bidders submit Past Performance references for other entities involved in teaming arrangement

proposals and (2) that the Navy irrationally evaluated (overrated) LBAS’s technical proposal

(staffing plan). However, the entity ostensibly collaborating with LBAS was its own affiliate,

and the Navy’s evaluation of LBAS’s staffing plan – owed significant deference by this Court –

was rational.

Therefore, after careful consideration, and for the reasons set forth below, the Court

DENIES Defendant’s Motion to Dismiss with respect to the Rota RFP. The Court further

DENIES Plaintiff’s Motion for Judgment on the Administrative Record. The Court GRANTS

Defendant’s Cross-Motion for Judgement on the Administrative Record. The Court further

GRANTS Defendant-Intervenor LBAS’s Cross Motion for Judgment on the Administrative

Record.

I. Standard of Review

A. Standard for Motion for Judgment on The Administrative Record

This Court decides a motion for judgment upon the administrative record pursuant to

Rule of the Court of Federal Claims (“RCFC”) 52.1. The Court determines whether “given all

the disputed and undisputed facts, a party has met its burden of proof based on the evidence in

the record.” Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57 (Fed. Cir. 2005). “[T]he

judgment on an administrative record is properly understood as intending to provide for an

expedited trial on the record.” Id. at 1356.

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B. Standard of Review for Motions to Dismiss under RCFC 12(b)(1)

In addressing a RCFC 12(b)(1) motion, “determination of jurisdiction starts with the

complaint, which must be well-pleaded in that it must state the necessary elements of the

plaintiff’s claim, independent of any defense that may be interposed.” Holley v. United States,

124 F.3d 1462, 1464 (Fed. Cir. 1997) (citations omitted). The Court must assume that all

undisputed facts alleged in the complaint are true and must draw all reasonable inferences in the

plaintiff’s favor. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see also Henke v. United States,

60 F.3d 795, 797 (Fed. Cir. 1995). However, the Court is not restricted to the face of the

pleadings and may consider evidentiary matters outside the pleadings. Cedars-Sinai Medical

Center v. Watkins, 11 F.3d 1573, 1584 (Fed. Cir. 1993).

C. Bid Protest Standard of Review

In a bid protest, the trial court “review[s] the agency’s decision pursuant to the standards

set forth in section 706 of Title 5,” the Administrative Procedure Act (“APA”). 28 U.S.C. §

1491(b)(4); see Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1350 (Fed. Cir.

2004). An APA challenge requires showing that the agency action in question is "arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. §

706(2)(A); Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332

n.5 (Fed. Cir. 2001). Accordingly, "[a] bid award may be set aside" if (1) "the procurement

official's decision lacked a rational basis" or (2) "the procurement procedure involved a violation

of regulation or procedure." WellPoint Mil. Care Corp. v. United States, 953 F.3d 1373, 1377

(Fed. Cir. 2020) (quoting Impresa, 238 F.3d at 1332). The APA also requires that "due account

shall be taken of the rule of prejudicial error." 5 U.S.C. § 706. So, "[t]o prevail in a bid protest,

a protestor must show a significant, prejudicial error in the procurement process." WellPoint,

953 F.3d at 1377 (quoting Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367

(Fed. Cir. 1999)); see also Bannum, 404 F.3d at 1351.

In reviewing the agency’s procurement decisions, the Court does not substitute its

judgment for that of the agency. Redland Genstar, Inc. v. United States, 39 Fed. Cl. 220 (1997);

Cincom Sys., Inc. v. United States, 37 Fed. Cl. 663, 672 (1997); see also M.W. Kellogg Co. v.

United States, 10 Cl. Ct. 17, 23 (1986) (holding that “deference must be afforded to an agency’s .

. . procurement decisions if they have a rational basis and do not violate applicable law or

regulations.”). The disappointed bidder “bears a heavy burden,” and the contracting officer is

“entitled to exercise discretion upon a broad range of issues confronting [her].” Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)

(citations and quotes omitted). This burden “is not met by reliance on [the] pleadings alone, or by

conclusory allegations and generalities.” Bromley Contracting Co. v. United States, 15 Cl. Ct.

100, 105 (1988); see also Campbell v. United States, 2 Cl. Ct. 247, 249 (1983). A procurement

decision is rational if “the contracting agency provided a coherent and reasonable explanation of

its exercise of discretion.” Impresa, 238 F.3d at 1333. But “that explanation need not be

extensive.” Bannum, Inc. v. United States, 91 Fed. Cl. 160, 172 (2009) (citing Camp v. Pitts,

411 U.S. 138, 142-43 (1973)).

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The Court’s “highly deferential” review such that “the disappointed offeror bears a

‘heavy burden’ of showing that the award decision ‘had no rational basis’ is particularly the case

with respect to matters requiring technical judgment. See, e.g., Benchmade Knife Co., Inc. v.

United States, 79 Fed. Cl. 731, 740 (2007) (“Agencies are entitled to considerable discretion and

deference in matters requiring exercise of technical judgment.”); Beta Analytics Int’l, Inc. v.

United States, 67 Fed. Cl. 384, 395 (2005) (“the minutiae of the procurement process . . . involve

discretionary determinations of procurement officials that a court will not second guess.”)

(quoting E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996)). The protester’s

mere disagreement with the agency’s assessment is not “nearly enough” to demonstrate arbitrary

and capricious agency action. See CRAssociates, Inc. v. United States, 102 Fed. Cl. 698, 717-18

(2012).

II. The Two Contracts – Rota and Naples

The issue at the heart of this bid protest concerns LBAS’s incumbent performance of the

Rota contract (awarded in 2015), which LBAS cited in its Past Performance representations in its

bid for retaining the Rota contract and securing the Naples contract.

With the Rota RFP, Algese was disqualified from contention at an early stage because the

Navy did not accept Algese’s technical proposal; however, the Navy’s Rota award decision

implied that even if Algese’s technical proposal had been found acceptable, this would not have

changed the award decision because LBAS’s price was lower Algese’s. In other words, with the

Rota RFP, overturning Algese’s rejected technical proposal would not change the result because

this would simply repeat the circumstances of the Rota RFP – LBAS would still be selected over

Algese for award because LBAS’s bid had a lower price.

The Naples RFP was a Best Value solicitation in which LBAS and Algese effectively tied

aside from price, leading the Navy to select LBAS for award because its bid price was lower.

AR 1999.

In short, Algese’s primary challenge to the Rota and Naples awards to LBAS hinges on

LBAS’s Past Performance representations concerning the incumbent Rota contract – LBAS’s

submissions did not mention that reductions in the Rota airfield workforce led to local labor

disputes, leading to a number of lawsuits against LBAS in Spanish courts.

A. The Rota RFP – Background and Award to LBAS

i. Background

The Rota RFP featured a three-step structure for selecting an awardee. Step 1A involved

an evaluation of the baseline acceptability of the Offeror on a pass-fail basis. AR 5850. Offers

were to be deemed acceptable (to “pass”) when they assented to the terms and conditions of the

RFP. Id. Step 1B reflected an Evaluation of Cooperation Compliance with Spanish authorities;

the Navy would forward a list of potential contractors to the Spanish government (Ministry of

Defense), which had the option of disapproving a contractor for “reasons of security or due to the

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contractor’s prior misconduct with the Spanish armed forces,” disqualifying such an Offeror

from award. Id. Step 1C, Evaluation of Non-Price Factors, required the Navy to evaluate

proposals under two factors: (I) Technical Capability, and (II) Past Performance (with Factor III,

Price, to follow in Step 2). Id.

Step 2 featured the Navy’s (Factor III) Price inquiry, which reflected an evaluation of the

total proposed price of bids, reviewed for completeness and reasonableness. AR 5853. The RFP

also further stated that the Navy would assess pricing based on its realism, i.e., the possibility

that proposed prices might be so low as to present a risk.

Step 3, “Trade-Off Process” required the Navy to evaluate which proposal presented the

best value to the government, trading off the non-price and price factors. AR 5853.

The Rota RFP was also amended to include DFARS 252.222-7002, which requires that

“[t]he Contractor shall comply with all [l]ocal laws, regulations, and labor union agreements

governing work hours; and [l]abor regulations including collective bargaining agreements,

workers' compensation, working conditions, fringe benefits, and labor standards or labor contract

matters.” See AR 6864; DFARS 252.222-7002(a)(1-2).

Also, the Navy declined to make certain adjustments to the Rota RFP in relation to the

incumbent performance (by LBAS) of the contract. AR 6077. After award of the 2015 Rota

contract, as a business decision, LBAS reduced the workforce at the Rota airfield, resulting in a

series of disputes with employees and labor unions, including a strike and protests outside the

Rota base, as well as a number of lawsuits in Spanish courts. 2 See AR 2665-68; AR 7966-73;

see also AR 6076-77 (Government Past Performance Assessment of LBAS). With the 2021

Rota RFP, given the labor disputes stemming from the 2015 Rota contract, the Navy considered

but then declined to add conditions to the 2021 Rota RFP concerning the “contractor’s ability to

navigate and resolve labor disputes.” AR 6077. The Navy felt that such an evaluation factor

“would be difficult to structure and objectively evaluate,” and “[t]he sources of information for

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On remand, the Navy found: “… the [labor dispute] cases were ruled in favor of LBAS 69%

of the time. Furthermore, for the five (5) cases ruled against LBAS, the Contracting Officer has no

reason to believe that LBAS has not complied with the corrective action required by the courts. With

regard to cases with individual employees, the majority of them were dismissals [which] … appear to

reflect LBAS’s efforts to proportionally align its workforce with the aforementioned workload

reduction. It is reasonable that LBAS had to reassess the economic efficiencies of its workforce in

response to the new contract’s requirements, and a great portion of the litigation … was the result of

workforce restructuring to meet the performance requirements of the newly competed contract … at

the time. Thus, the majority of the employee dismissal cases do not seem to be arbitrary, result from

ill intent, or otherwise reflect poor business ethics.” AR 3139-40.

The Navy’s Contracting Officer further commented, “… it was my experience with such

issues in prior evaluations that labor unions and companies in the United States and abroad each have

competing values that are bound to lead to disagreements, and at times, labor disputes in presiding

courts. A disagreement between parties representing competing values, therefore, does not

necessarily reflect poor business ethics on behalf of either party or outright disregard for each other’s

legal rights.” Id.

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such labor disputes can be prone to bias and ascertaining facts and determinations would require

review of extensive legal documentation pertaining to complex local labor law.” Id.

ii. The Navy’s Technical Evaluation: Algese is Found Ineligible Due to an

Unacceptable Technical Proposal, and LBAS is Selected for Award

Many bidders, including both LBAS and Algese, were issued “pass” ratings in fulfillment

of Step 1A. See AR 5943-5950. Corresponding to Step 1B, the Spanish Ministry of Defense

advised that XXXXXXXXXX, two of the bidders, were not registered business entities in Spain

and required that they register to be eligible for award. AR 6095. However, the Ministry

apparently raised no negative concerns about LBAS for the purposes of the 2021 solicitation.

AR 6095. This is notable and relevant because Algese’s allegations against LBAS in large part

turn on the purported egregiousness of LBAS’s conduct in reducing the workforce at Rota. A

June 2021 article reported that the Spanish Ministry of Defense was assessing whether LBAS

should be disqualified in bidding to retain the contract for Rota. See AR 2658. But the Ministry

of Defense effectively issued an approval for LBAS to bid to retain the contract. AR 6095.

Also, beyond the Ministry of Defense issuing an approval to LBAS irrespective of the

past labor strife at Rota, LBAS positively cited its performance on the Rota contract as a “Past

Performance” reference for its bid. AR 5158-5161. Offerors were prompted to present “Clear

statements describing whether the contract was completed on time, with a quality product

conforming to the contract, without any degradation in performance or customer satisfaction.”

AR 5160-61. LBAS reported that performance had been a success, and cited an “exceptional”

rating conferred by Paul Campbell, the Contracting Officer. AR 5159. Also, when LBAS was

approved for bidding on the Rota contract, the pre-solicitation analysis of LBAS’s incumbent

performance in response to the labor unrest stated that “… despite the labor strikes, LBAS has

never failed to support XXXXXXXXXXXXXXXXXXXXX when requested by the

Government.” AR 6076.

During Step 1C, of the seven Offerors that submitted technical proposals in response to

the Rota RFP, the Navy ultimately found that only two were eligible for award while five,

including Algese, were found ineligible because they did not achieve an “acceptable” technical

rating. See AR 5965, 6111.

The Navy’s finding that Algese’s technical proposal was “unacceptable” stemmed

specifically from two problems with Algese’s staffing representations. First, the Navy found that

“Algese did not provide an example of a seven-day shift schedule with the minimum staffing

requirements in accordance with PWS paragraph 4.2.” AR 5965. Algese’s Table of Contents for

its proposed staffing listed a “7-day schedule.” AR 4095. However, the pertinent page to which

the Table of Contents referred did not appear to include a 7-day weekly schedule. 3 AR 4102.

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Another bidder, XXXXXXX, submitted an employment chart which appears somewhat

similar to the rejected Algese chart, and was accepted by the Navy. AR 4683; AR 6110. Unlike

Algese’s submission, XXXXXX chart is explicitly labeled as an “example of a weekly shift

schedule” in several places. AR 4683.

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Second, the Navy found that while Algese’s staffing submission credibly proposed

XXXXX full time employees, it “[did] not identify part-time positions within each functional

area any of the aforementioned part-time positions within each functional area nor are the length

of the work shifts clearly depicted.” AR 5965. In a written representation, Algese mentions the

planned hiring of XXX XXXX full-time employees, and also mentions “part-time employees”;

however, the corresponding chart lists a “workforce grand total” of XXXX employees,

seemingly omitting the possibility of part-time employees. AR 4101-02. Algese’s description

specifically stated:

Algese can face unexpected occurrences such as increases or any other

contingency because the assigned manpower (XXX FTE) will be composed by

full and part-time employees. The presence in the workforce of the part-time

personnel will increase the number of “bodies” and grant all the needed

flexibility.

AR 4101. The Navy observed, “Algese total workforce is expressed as XXXXXXX and it does

not identify any of the aforementioned part-time positions within each functional area nor the

length of the work shifts clearly depicted.” AR 5965.

After Algese and four other offerors rendered ineligible for award by “Unacceptable”

Technical ratings or “Limited” Past Performance ratings, only two offerors remained in

contention beyond the Technical proposal stage: LBAS and XXXXX. See AR 6111.

FACTOR LBAS Algese XXX XXX XXX XXX XXX

TOTAL PRICE € XXXXXXX XXXXXXX XXXXXXXX XXXXXXX XXXXXXXX XXXXXXXXX

40,738,238.66

TECHNICAL Acceptable Unacceptable XXXXXXX XXXXXXX XXXXXXX XXXXXXX XXXXXXX

II PAST Substantial Not Evaluated XXXXXXX XXXXXXX XXXXXXX XXXXXXX XXXXXXX

PERFORMANCE

III PRICE Complete and Not Evaluated XXXXXXX XXXXXXX XXXXXXX XXXXXXX XXXXXXX

F&R

Id.

As reflected in the chart above, only two of the seven offerors survived the Navy’s

Technical evaluation with an “Acceptable” rating: LBAS and XXXXXXX. LBAS received a

“Substantial Confidence” Past Performance assessment, and quoted a price of €40.7 million. AR

6111. XXXXXXXX received a “Neutral” Past Performance assessment, and quoted a XXX

million price. Id.

Choosing between LBAS and XXXXXXX, the Navy selected LBAS. Id. The Navy’s

award decision summary noted that the decision to select LBAS would not have changed even if

Algese had, like LBAS, achieved an “Acceptable” technical rating and a “Substantial

Confidence” Past Performance rating because LBAS’s price was still XXX lower than that of

Algese. Id.

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B. The Rota RFP – The Government’s Motion to Dismiss under RCFC 12(b)(1)

The Government moves to dismiss Algese’s bid protest with respect to the Rota RFP,

arguing that that Algese lacks standing because it is not an “interested party.” An “interested

party” is an “actual or prospective bidder[] or offeror[] whose direct economic interest would be

affected by the award of the contract or by failure to award the contract.” Rex Service Corp. v.

United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). To demonstrate a “direct economic

interest,” a protestor must allege (1) that a significant error was made in the procurement process

and (2) that there was “a substantial chance it would have received the contract but for that

error.” Id. at 1308.

The Government argues (1) that Algese was fundamentally ineligible for award of the

Rota RFP because it failed to qualify for or complete the steps to obtain a facility security

clearance (“FCL”) and (2) that because Algese was disqualified at the technical evaluation stage

(leaving two bidders to proceed to the award stage), it did not have been a substantial chance of

being selected for award.

i. The Government indicated to Algese that the DD-254 security clearance form

did not need to be completed until after award

First, the Government contends that because the Rota RFP included “handl[ing] classified

shipments” and loading classified material on and off aircraft, “even if Algese’s proposal had

been both price competitive and technically acceptable – which [it] was not – the Navy still

could not have accepted Algese’s performance because Algese cannot meet the FCL

requirement.” ECF No. 45 at 22; see also AR 7349-50. While Algese has been providing air

terminal support to the Navy in Italy for over 40 years, the Navy argues that entities not

incorporated in the United States are fundamentally ineligible for award because they cannot

achieve the proper security clearance status. ECF 45 at 21 (citing 32 C.F.R. § 117.9(c)(2)(i)).

However, the Navy disqualified Algese based on a technical evaluation, not Algese’s

security clearance status or a related form. Furthermore, and critically, Algese points to an

exchange underlying the RFP in which Algese asked, “please clarify if the [DD-254 form] must

be completed and submitted by Algese (foreign contractor) and, if yes, when?” AR 5823

(emphasis added). The Navy responded that “Contractors are not required to fill out or submit

this form with their proposals. The Government will prepare and incorporate a final version of

the DD Form 254 into the contract, which will include the contractor’s information.” Id. Also,

the Navy required that “[c]ontractor shall, within 60 days, provide the Cognizant Security Office

listed in block 6c, a copy of the award DD-254 with any continuation pages, attachments or

enclosures and the contract PWS.” AR 7350 (emphasis added). This suggests that Form DD-

254 was to be completed only following award and not earlier.

The Government argues that while the Navy disqualified Algese from award on grounds

unrelated to Algese’s security clearance status, this Court must still deny Algese standing

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because “the proposal on its face set[] out a requirement that the protestor cannot meet.” ECF

No. 45 at 22. However, when Algese inquired about the DD-254 Form, the Navy indicated that

clearance issues could be addressed later. The Court therefore holds that because of this

exchange, cited by Algese, the Navy cannot comfortably assert clearance issues or the DD-254

form issue to deny Algese standing.

ii. Algese’s substantive arguments, if proven, would likely result in Algese finishing

second behind LBAS for award of the Rota contract

Second, the Navy argues that Algese also lacks standing to challenge the Rota RFP award

to LBAS because Algese did not even finish second in the procurement. Indeed, Algese and four

other contractors were disqualified at a relatively early stage because the Navy found their

technical proposals unacceptable – this left only LBAS and XXXXXXX to proceed to the award

stage. On this basis, the Navy contends that Algese lacks a “direct economic interest” because,

purportedly, litigation could not put Algese in a position for award (because it ranked below

second in the evaluations behind XXXXXXX, the other contractor found to have an acceptable

technical proposal). See ECF No. 45 at 11-12 (citing United States v. IBM Corp., 892 F.2d 1006,

1011-12 (Fed. Cir. 1989)).

Algese argues that XXXXXXX surviving the technical stage (and finishing second to

LBAS) does not deprive Algese of standing because Algese is challenging its own

unacceptability rating. It is also the case that XXXXXXX bid was relatively weak –

XXXXXXXX bid was significantly more expensive than both those of LBAS and Algese, and

XXXXXXX managed only a “neutral” Past Performance rating. AR 6111. In other words, had

the Navy found Algese’s proposal technically acceptable, Algese likely “would have then been

in line for award over XXXXXXX.” See ECF No. 46 at 11 (citing AR 6111). 4 Algese thus

frames the Navy’s challenge based on standing as putting the cart before the horse: “[T]he

Government cannot require a plaintiff to prove the merits of its case in order to demonstrate

standing,” which “would lead the court in a round-robin through the arguments on the merits in

order to resolve a jurisdictional issue.” See Caddell v. United States, 125 Fed. Cl. 30 (2016)

(citing Textron v. United States, 74 Fed. Cl. 277, 284-85 (2006); see also ECF No. 46 at 7 (citing

Harmonia Holdings Grp., LLC v. United States, 146 Fed. Cl. 799, 811 (2020)).

The Court agrees that if Algese successfully challenges the “unacceptable” technical

rating it received from the Navy, Algese’s position likely would be leapfrogged past the

qualifying-but-weak bid of XXXXX, and into second place as the leading alternative to LBAS.

Because such a determination turns on the merits of the case, the Court agrees that Algese is

effectively being asked to prove the merits in order to demonstrate standing. The Court therefore

holds that Algese’s disqualification at the technical evaluation stage, under the circumstances,

does not foreclose Algese’s standing to pursue a bid protest for the Rota RFP.

4

Algese has provided air terminal support for the Navy for 40 years. ECF No. 46 at 9,

n.4.

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C. The Rota RFP -- Discussion

The gravamen of Algese’s argument that the 2021 Rota award to LBAS was arbitrary,

capricious or irrational centrally features the labor disputes surrounding LBAS’s workforce

reductions during performance of the 2015 incumbent Rota contract, and related cases in Spanish

courts. More specifically, Algese presents a cluster of arguments seizing on the fact that LBAS’s

Past Performance submission did not reference labor unrest at the Rota airfield or related court

cases. Algese argues (1) that LBAS’s omission of any reference to the labor unrest and court

cases constitutes a material misrepresentation, (2) that the labor disputes should have led the

Navy to downgrade LBAS, (3) that the labor disputes should have led to an adverse finding in

the Navy’s responsibility evaluation of LBAS, and (4) that the labor disputes mean that LBAS

breached DFARS 252.22-7002, a regulation requiring “compliance” with domestic (here,

Spanish) labor laws.

Separately, Algese also challenges as irrational the Navy’s finding that Algese’s technical

proposal (staffing plan) was “unacceptable.”

i. The Navy’s evaluation of LBAS’s Past Performance submission for Rota was

reasonable

Algese’s allegation that LBAS committed a material misrepresentation when it declined

to mention labor unrest in its Past Performance submission comes up short for two main reasons.

First, agency evaluations of Past Performance are entitled to overwhelming deference – “the

greatest deference possible.” Second and related, the Navy was well-aware of the labor unrest,

found on the merits that LBAS’s performance did not suffer because of the unrest, and regarded

LBAS’s workforce reduction as reflecting conventional business judgment.

Agency past performance evaluations are entitled to “the greatest deference possible,” –

the “triple whammy of deference.” See Bannum, Inc., 91 Fed. Cl. at 174; Gulf Group Inc. v.

United States, 61 Fed. Cl. 338, 351 (2004) (quoting Overstreet Elec. Co. v. United States, 59

Fed. Cl 99, 117 (2003)); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d

901, 909 (Fed. Cir. 2013) (agencies are afforded “broad discretion” in past performance

evaluations). “[E]valuation of experience and past performance, by its very nature, is subjective .

. . and an offeror's mere disagreement with an agency's evaluation judgments does not

demonstrate that those judgments are unreasonable.” ECF No. 45 at 30 (citations removed).

Also, deference to agency past performance evaluations extends to the extent of the

review – agencies must document their past performance evaluations, but those evaluations need

not be exhaustive. See Westech Int'l, Inc. v. United States, 79 Fed. Cl. 272, 294 (2007).

The record in this case shows that the Navy was aware of the labor unrest at Rota, and

that the Navy did not regard this as impairing performance. AR 6076 (Navy’s Past Performance

evaluation of LBAS). In response to the unrest at Rota, the Navy contemplated and declined to

add a “contractor’s ability to navigate and resolve labor disputes” assessment component to the

2021 RFP. AR 6077. Weighing the appropriate deference to the Navy, which expressly

11

considered the labor unrest and its implications, the omission of the unrest from LBAS’s Past

Performance submissions cannot be construed as a material misrepresentation.

The Court likewise holds that the Navy acted rationally when it declined to change its

Past Performance assessment of LBAS on remand, after assessing information about the Spanish

court cases. The Navy’s Contracting Officer, Jose Neto, found that the cases reflect “competing

values” differing between the United States and foreign countries – the cases “do[] not

necessarily reflect poor business ethics on behalf of either party or outright disregard of each

other’s legal rights.” AR 3140. LBAS suggests that such disputed employee terminations are

routine in Spain (which does not recognize at-will employment). See ECF No. 44 at 20 (citing

AR 3064). The Court agrees with the Navy and LBAS. Given that such labor dispute cases

reflect routine process, and that the Navy regarded LBAS’s staff reductions as business judgment

(AR 6076 (“a decrease in contract workload requirements from the predecessor contract”)),

LBAS not discussing the labor unrest and Spanish court cases on its Past Performance

submission does not readily translate into a material misrepresentation.

Furthermore, even beyond this, irrespective of the ostensible “competing values” of

Spain and the United States as reflected in LBAS’s labor practices, the Spanish Ministry of

Defense assessed whether to disqualify LBAS from bidding (see AR 2658), and then approved

LBAS’s eligibility. AR 6095. This yet further cuts against construing LBAS’s omission of the

labor unrest and court cases as a material misrepresentation.

Algese tries to support its argument by pointing out that offerors were asked to submit

"Clear statements describing whether the contract was completed on time, with a quality product

conforming to the contract, without any degradation in performance or customer satisfaction."

AR 5160-61. According to Algese, this language cannot be reconciled with LBAS declining to

mention the labor unrest. However, as noted above, the record shows that the Navy assessed the

impact of the labor unrest, considered the Spanish labor cases on remand, and declined to change

its position concerning LBAS’s Past Performance submission.

The Navy’s evaluation of LBAS’s Past Performance submission was reasonable; LBAS’s

non-inclusion of the labor strife at Rota and the Spanish court cases cannot be regarded as a

material misrepresentation, let alone one which overrides the overwhelming deference owed to

agency Past Performance evaluations.

ii. The Navy rationally decided not to downgrade LBAS’s “Substantial

Confidence” Past Performance rating because of the Spanish court cases

Algese alleges that the Navy’s remand decision – not to downgrade LBAS’s Past

Performance rating – was an irrational “post hoc rationalization” because, purportedly, the scope

of remand assessment was “rigidly narrow” and “bounded by the Lacave Declaration” so that it

did not reflect the true impact of the labor strife at Rota.

The Court finds this argument difficult to accept. As reviewed above, the Navy was

aware of the labor strife at Rota, assessed that it did not hurt LBAS’s performance, and further

12

decided that labor relations should not be incorporated into the 2021 Rota RFP. AR 6077.

Accordingly, the Government observes:

The technical evaluation of “past performance” included considering the

extent to which the offeror: “me[t] technical requirements; me[t] schedule

requirements; control[ed] contract costs; and [] demonstrated systemic

improvement actions taken to resolve past problems.” These criteria,

understandably, focus on how well the offeror actually performed on past

contracts, and not how tumultuous its labor practices were during the

performance of those contracts. Thus, on remand, the contracting officers

agreed that any labor disputes or litigation that Louis Berger had during

the course of its past performance were not “directly tied” to these criteria,

and that evaluation of such disputes was not called for in the solicitation.

ECF No. 45 at 31 (citations omitted).

The Court also strongly agrees with LBAS’s response to Algese’s argument about the

purportedly superficial scope of the remand decision:

This argument is nonsense. Algese filed a Complaint arguing that the

Navy should not have awarded LBAS the Naples and Rota contracts

because of “multiple Spanish court decisions” purportedly establishing

that LBAS violated Spanish labor law. So on remand, the Navy engaged

their inhouse Spanish legal expert, Tomas Lacave, to evaluate the

decisions. Mr. Lacave compiled a declaration that provided a high-level

overview of Spain’s labor laws and outlined the four cases Algese

identified plus 12 additional cases. The COs then incorporated Mr.

Lacave’s declaration into their existing evaluations of LBAS, which

included LBAS’s record of exceptional performance in Rota and similar

ATGHS contracts, and concluded that the information in Mr. Lacave’s

declaration did not alter their award decisions. ECF No. 44 at 36 (citing

AR 9198-9207).

As observed by LBAS, Algese seems to be implying that the remand decisions narrowly

evaluated the Lacave Declaration to the exclusion of their existing evaluations, but the remand

decisions instead seem to reflect existing evaluations with the addition of the Lacave declaration.

Algese cites caselaw for the proposition that “the Court appropriately is to consider ‘the

whole record before the agency.” ECF No. 41-1 at 23 (citing Syncon, LLC v. United States, 154

Fed. Cl. 442, 452 (2021)). Indeed, the Court recognizes that evaluating the “whole record before

the agency” – and also weighing the deference owed to the Navy – supports the Government’s

position and not Algese’s.

The Court holds that the Navy’s decision not to downgrade LBAS’s “Substantial

Confidence” Past Performance assessment was rational.

13

iii. The Navy rationally determined that LBAS was a responsible contractor

Algese also argues under FAR (Federal Acquisition Regulation) 9-104-1 that the Navy’s

finding that LBAS was a responsible offeror was irrational in light of the Rota labor disputes and

Spanish court cases.

Under FAR 9.104-1(a-d), to be determined responsible, a contractor must (a) have

adequate financial resources to perform a contract, (b) be able to comply with the required or

proposed delivery or performance schedule, taking into consideration all existing commercial

and governmental business commitments, (c) have a satisfactory performance record, and (d)

have a satisfactory record of integrity and business ethics. FAR 9.104-1.

Agency responsibility decisions “are largely a matter of judgment, and contracting

officers are normally entitled to considerable discretion and deference in such matters. When

such decisions have a rational basis and are supported by the record, they will be upheld.”

Bender Shipbuilding & Repair Co. v. United States, 297 F.3d 1358, 1362 (Fed. Cir. 2002), see

also Supreme Foodservice GmbH v. United States, 112 Fed. Cl. 402, 415 (2013) (responsibility

determination challenges “face[] a high hurdle.”).

First, Algese argues under FAR 9.104-1(a) that LBAS’s bid triggers financial

responsibility concerns because LBAS faces purported financial liabilities from the Rota-related

Spanish court cases – according to unions in Europe, LBAS “owes potentially 1.5 million Euros

… due to labor violations.” ECF No. 41-1 at 28-29. Second, Algese argues under FAR 9.104-

1(b) that LBAS cannot be considered responsible because of alleged “severe delays in

performance at the Rota facility.” ECF No. 41-1 at 29. Third, Algese argues under FAR 9.104-

1(c) that Rota had a substandard performance record because of the labor disputes at Rota. Id.

Fourth and finally, Algese argues under FAR 9.104-1(d) that LBAS does not have a satisfactory

record of integrity and business ethics because of the Rota labor strife and a past legal dispute.

Id. at 30.

The Navy’s finding that LBAS was a responsible contractor – owed significant deference

– is plainly rational. LBAS’s Past Performance submission states that the CO for the 2015 Rota

contract found LBAS’s performance “exceptional.” AR 5159. As noted above, the Navy knew

about the Rota labor disputes and assessed that operations at Rota were not harmed as a result.

See AR 6076. Furthermore, the Navy also recognized that LBAS’s reduction of the workforce as

a “restructuring” which was a business judgment response to “a decrease in contract workload

requirements from the predecessor contract.” Id.

Algese also raises a past bid protest case (a protest of the award to LBAS in 2015) in

which the Court of Federal Claims initially sustained a bid protest because of (undeclared)

criminal proceedings against LBAS’s parent company and other Louis Berger entities – the

Court remanded the protest to the Navy for a new responsibility determination, the Navy

reaffirmed its determination irrespective of the criminal proceedings, and the court deferred.

14

Algese 2 s.c.a.r.l. v. United States, 127 Fed Cl. 497, 499-500, 502-05 (2016). Similarly, here,

Algese argues that LBAS should not be found responsible because of a failure to disclose the

labor strife and court cases. But as noted above, the Navy recognized and explicitly considered

the labor unrest. AR 6076-77.

The Court holds that the Navy had a rational basis for determining that LBAS was a

responsible contractor.

iv. The Rota Contracting Officer rationally found that LBAS did not violate

DFARS 252.222-7002

DFARS 252.222-7002, “Compliance with Local Labor Laws (Overseas),” included in the

Rota RFP, requires “compl[iance] with all … [l]ocal laws, regulations and labor union

agreements governing work hours.” DFARS 252.222-7002. Algese argues that LBAS failed to

comply with DFARS 252.222-7002, and that the Navy improperly waived this compliance

requirement for LBAS, prejudicing Algese.

Algese’s arguments based on DFARS 252.222-7002 may be subdivided into policy and

textual prongs. On a policy basis, Algese alleges that LBAS’s workforce reductions in

performance of the incumbent Rota contract reflect a plan to reduce costs by “breaking” the

Spanish unionized workforce, conflicting with DFARS 252.222-7002. Algese alleges that this

“runs contrary to the Biden administration’s policy favoring continuity of workers,” as

purportedly reflected in Executive Order 14055 (Nov. 18, 2021), which post-dates LBAS’s

workforce reductions at Rota.

However, the Navy regarded LBAS’s workforce reductions as a “restructuring” which

was a business judgment response to “a decrease in contract workload requirements from the

predecessor contract.” AR 6076. Furthermore, even if Executive Order 14055 did apply

retroactively to LBAS’s workforce reductions, it seems to support those reductions. The Order

plainly states:

The contractor and its subcontractors shall determine the number of

employees necessary for efficient performance of this contract and may

elect to employ more or fewer employees than the predecessor

contractor employed in connection with performance of the work

solely on the basis of that determination.

EO 14055 at 3(a) (emphasis added).

Textually, Algese argues for a strict reading of the word “comply” under DFARS

252.222-7002, effectively contending that the Spanish court case rulings against LBAS

constitute non-compliance with labor laws. The Navy on remand took the position that the five

adverse judgments in Spanish court were part of the routine employment dispute process. Jose

Neto, the Rota Contracting Officer, found that the Spanish court cases reflect “competing

15

values” differing between the United States and foreign countries – and that the judgments “do[]

not necessarily reflect poor business ethics on behalf of either party or outright disregard of each

other’s legal rights.” AR 3140. Neto further stated that there is “no reason to believe that LBAS

has not complied with the corrective action required by the Courts.” AR 3139.

In the alternative, Algese also argues that even if the Navy’s reading of “comply” is

found reasonable, Algese’s definition is also reasonable. Therefore, purportedly, these conflicted

reasonable constructions of DFARS 252.222-7002 amount to a patent ambiguity, which Algese

alleges must be resolved by clarifying the Navy’s interpretation and soliciting revised proposals.

The Court agrees with the Navy and LBAS that such court cases reflect routine process

inherent in employment disputes rather than poor business ethics and disregard for legal rights.

See AR 3140. Furthermore, overarching this finding is the fact that the Spanish Ministry of

Defense contemplated whether to disqualify LBAS from bidding (see AR 2658), and then issued

an approval. AR 6095. This seems to suggest, likewise, that the Court decision against LBAS

reflecting routine process (followed by compliance) rather than disregard for legal rights or a

“violation.”

The Court holds that the Navy was rational to find that the Rota-related Spanish court

cases did not constitute a violation of DFARS 252.222-7002.

v. The Navy’s evaluation of Algese’s staffing plan was rational; and even if the

Navy had not disqualified Algese because of its staffing plan, LBAS still would

have been selected over Algese for the 2021 Rota award

The Navy found Algese’s technical proposal Unacceptable and declined to evaluate

Algese further. Algese argues that this finding was irrational, and also argues in the alternative

that the Navy acted irrationally in not raising the basis of the “unacceptable” finding during the

bidding process so that Algese could respond.

As noted above, the Court’s review of “matters requiring technical judgment” is “highly

deferential.” See, e.g., Benchmade Knife Co., Inc. v. United States, 79 Fed. Cl. 731, 740 (2007)

(“Agencies are entitled to considerable discretion and deference in matters requiring exercise of

technical judgment.”).

As also noted above, the Navy ascribed an “Unacceptable” technical rating to Algese for

two reasons. First, the Navy found that Algese did not provide an example of a seven-day shift

schedule with minimum staffing requirements, as requested. See AR 5965. Algese listed a

“Seven Day Shift Schedule” in its table of contents, but the page to which this entry

corresponded does not appear to have included a 7-day schedule. See AR 4095. Second, while

the solicitation sought submissions identifying part-time positions (and the length of work

shifts), Algese proposed XXXX full-time employees, with a chart listing a “workforce grand

total” of XXXX seemingly omitting part-time employees, and omitting details about the length

of shifts. AR 4101-02; AR 5965.

Algese argues that in fact they did provide a seven-day shift schedule, and that

XXXXXXX made a similar technical submission which was not found “Unacceptable” by the

16

Navy. The Court holds that the Navy was rational to regard Algese’s submission as not

including a seven-day shift schedule, and distinct from XXXXXXX; for example, unlike

Algese’s submission, XXXXXXX chart is explicitly labeled as an “example of a weekly shift

schedule.” See AR 4683.

Algese also argues that even if its submission did not specify part-time employees and

information about their shifts, the listing of XXXXXXX full-time employees would have been

enough to perform the contract. See ECF No. 41-1 at 43. However, the fact remains that as the

Navy observed, “Algese’s total workforce is expressed as XXXXX FTEs and it does not identify

any of the aforementioned part-time positions within each functional area nor the length of the

work shifts clearly depicted.” AR 5965.

Overarching these two substantive arguments, Algese additionally contends that in

response to these problems in Algese’s technical proposal, the Navy should have opened

discussions or sought clarification rather than simply issuing an “Unacceptable” technical rating

disqualifying Algese. See ECF No. 41-1 at 44-45. Algese points out that clarifications are

“limited exchanges, between the government and offerors that may occur when award without

discussions is contemplated” and provide offerors with “the opportunity to clarify certain aspects

of proposals,” including “minor or clerical errors.” Id. (citing FAR 15.306(a)(1)-(2)). Agencies

have discretion to decide whether to seek clarification and may be found to have abused that

discretion. See, e.g., Level 3 Commc'ns, LLC v. United States, 129 Fed. Cl. 487 (2016);

BCPeabody Constr. Servs., Inc. v. United States, 112 Fed. Cl. 502, 511-13 (2013).

This Court declines to find the Navy’s disinclination to open discussions or seek

clarifications on Algese’s bid amounts to an abuse of discretion by the Navy. As the record

reflects, even if Algese had been issued an “Acceptable” technical rating, this would have

rendered LBAS and Algese equivalent (in their ratings), except that Algese’s bid was

XXXXXXXXX more expensive. AR 6110. Therefore, LBAS would still have been selected for

award (even had Algese remained in contention) because then the Navy would have been faced

with two contractors with directly equivalent technical ratings, where one, LBAS, offered a

substantially lower price. Id.

The Court holds that the Navy had a rational basis to find Algese’s technical proposal

“Unacceptable.” The Court further holds that under the circumstances, the Navy did not abuse

its discretion by declining to open discussions or request a clarification from Algese.

D. The Naples RFP – Background and Award to LBAS

The Naples RFP established that award would be decided based on three factors: (1)

Technical Capability, (2) Past Performance, and (3) Price, to be assessed on a Best Value basis –

a combination of pass/fail ratings and a tradeoff approach. AR 758. In other words, the

Government was awarding the contract to the bid providing the “greatest overall benefit(s) in

response to the requirement.” Id. This left open the possibility that the lowest bid might not be

selected for award if a higher-priced and higher-rated bid was determined to be most beneficial

to the Government. Id.

17

Factor 1, Technical Capability, was to be “evaluated on an Acceptable/Unacceptable

basis.” Id. A proposal determined not to meet the minimum requirements of the RFP would be

found Unacceptable. Id. The Technical Capability assessment comprised three subfactors: (i)

Performance Work Statement (“PWS”) Capability Acknowledgment, (ii) Staffing and (iii)

Implementation. Id.

The PWS subfactor of Technical Capability directed offerors to submit a signed

acknowledgment letter representing that the Offeror is capable of performing work requirements.

Staffing subfactor assessments required offerors to demonstrate their planned staffing –

including the workforce levels and skills necessary to perform the work, an organizational chart

identifying on-site management and personnel, and other details corresponding to the required

minimum staffing requirements. AR 759. The Implementation subfactor required Offerors to

demonstrate their capacity to establish full operations by the designated performance start date.

Id.

Factor 2, Past Performance, enabled Offerors to submit up to three Past Performance

assessments. AR 755. The RFP further specified that “[i]f a joint venture or a teaming

arrangement of any sort is contemplated, there should be at least one reference from each party

with a total not exceeding overall references. Id. The RFP stipulated that Past Performance

assessment would reflect Offerors’ overall record of “recency, relevancy, and quality . . . .” Id.

Relevancy ratings ranged from Limited to Neutral, to Satisfactory, to Very Relevant. AR 759.

Past Performance Confidence assessment ratings ranged from No Confidence, Limited

Confidence, Neutral Confidence, Satisfactory Confidence and Substantial Confidence. AR 760.

Factor 3, Price, required the Navy to evaluate proposed prices for completeness and

reasonableness.

The Naples RFP was also amended to include Defense Federal Acquisition Regulations

Supplement (“DFARS”) 252.222-7002, which states, “The Contractor shall comply with all

[l]ocal laws, regulations, and labor union agreements governing work hours; and [l]abor

regulations including collective bargaining agreements, workers’ compensation, working

conditions, fringe benefits, and labor standards or labor contract matters.” AR 657; DFARS

252.222-7002 (a)(1-2).

While four contractors competed for the Naples RFP, only LBAS and Algese submitted

bids which the Navy found acceptable. AR 2009. Both contractors received matching

“acceptable” Technical Capability ratings. AR 1998. Likewise, both contractors received

“Substantial Confidence” Past Performance ratings. Id. However, the two contractors were far

apart in price: Algese bid XXXXXXXXX and LBAS bid $14,781,422.17. AR 1998-99. In other

words, LBAS’s bid was more than XXXXXXX less expensive, with ratings matching those of

Algese. The Navy determined that LBAS offered the best value and awarded it the contract. AR

2031. This leaves Algese in the position, as protestor, of trying to argue in part that LBAS’s

ratings should have been inferior to Algese’s, which might have justified award to Algese despite

its higher bid price.

18

E. The Naples RFP – Discussion

Because LBAS’s successful bid for the Naples contract included a Past Performance

reference to its prior 2015 incumbent performance of the Rota contract (which did not mention

labor disputes at Rota or related Spanish court cases), Algese’s challenge to LBAS winning the

Naples contract includes many of the same arguments made in relation to the Rota RFP, supra.

Accordingly, Algese alleges (1) that LBAS’s Naples award must be overturned because,

purportedly, LBAS’s incumbent Rota Past Performance submission reflects a material

misrepresentation, (2) that the Navy should have downgraded LBAS on remand because the Rota

Past Performance submission did not mention labor strife, (3) that LBAS should have been

penalized in the Navy’s LBAS Naples responsibility determination because, purportedly, the

labor strife at Rota will be repeated by LBAS at Naples, and (4) that LBAS’s performance at

Rota violated DFARS 252.222-7002, and that this purported violation will be repeated by

LBAS’s operations at Naples.

Separately, Algese makes several arguments independent of LBAS’s Rota Past

Performance submission. Algese alleges that LBAS violated a condition of the Naples RFP by

listing an affiliate involved with performance (a “teaming arrangement”), Louis Berger Italia

S.r.l., but without submitting a Past Performance reference for this affiliate. Algese also alleges

that LBAS’s staffing submissions conflicted with the requirements of the solicitation and should

have led the Navy not to award the Naples contract to LBAS.

i. The Navy’s evaluation of LBAS’s Past Performance submission for the Naples

RFP was reasonable

For its protest of the award of the Naples RFP to LBAS, Algese presents a series of

arguments relating to the labor disputes and Spanish court cases stemming from LBAS’s

incumbent performance of the Rota contract.

First, Algese argues that the labor strife at Rota and related Spanish court cases required

the Navy to find that LBAS’s Rota Past Performance submission (for the Naples RFP) – which

did not mention the labor unrest or Spanish court cases – reflected a material misrepresentation

or should have led the Navy to downgrade LBAS.

As noted above, agency assessments of Past Performance submissions are due

overwhelming deference. Here, the Navy knew about the labor unrest and found that it did not

impair LBAS’s “exceptional” performance at Rota. AR 5159; 6076. The Navy also

contemplated and then declined to add a labor relations component to the 2021 Rota RFP. AR

6077. On remand, the Navy considered the court cases and regarded these as reflecting

“competing [national] values,” rather than a reflection of poor business ethics or disregard for

legal rights. See AR 3140 (Rota CO Jose Neto); AR 3143-46 (Naples CO Danielle Lafferty).

The Court agrees with LBAS that the Spanish court cases appear to reflect customary legal

process for employment disputes in Spain. ECF No. 44 at 20 (citing AR 3064). On top of this,

Spain’s Ministry of Defense reportedly assessed disqualifying LBAS because of the labor

disputes (see AR 2658) and then in fact approved LBAS. AR 6095. The Court holds that the

Navy’s evaluation of LBAS’s Naples Past Performance submission was rational – the Navy was

19

rational to find that the Rota Past Performance submission did not reflect a material

misrepresentation. The Court further holds that the Navy’s decision not to downgrade LBAS

after reviewing the Spanish Court cases (on remand) was rational.

Second, Algese likewise invokes the labor unrest at Rota to question the Navy’s

responsibility determination for LBAS with respect to the Naples RFP, aligned against heavy

deference for agency responsibility determinations. When such decisions have a rational basis

and are supported by the record, they will be upheld.” Bender Shipbuilding & Repair Co. v.

United States, 297 F.3d 1358, 1362 (Fed. Cir. 2002), see also Supreme Foodservice GmbH v.

United States, 112 Fed. Cl. 402, 415 (2013) (responsibility determination challenges “face[] a

high hurdle.”).

Algese contends that unrest stemming from LBAS workforce reductions at Rota projects

likely similar unrest at Naples – Italian unions have threatened to strike against LBAS. AR

9215. However, as noted above, the Court holds that the Rota labor unrest and related Court

cases do not impugn LBAS’s financial responsibility (FAR 9.104-1(a)), ability to perform (FAR

9.104-1(b)), performance record (FAR 9.104-1(c)), or record of integrity and business ethics

(FAR 9.104-1(d)).

Algese makes two further arguments critiquing LBAS’s responsibility determination

regarding LBAS’s considerable track record for performing air terminal and ground handling

services. Algese argues that under FAR 9.104-1(e) that LBAS does not possess the operational

controls and technical skills to perform because of LBAS’s purported failure to engage with

Italian labor unions at the Naples facility, and that the Naples Contracting Officer failed to

evaluate this risk. AR 9209-10. Algese also argues that the Naples Contracting Officer

transgressively relied on LBAS’s parent company, WSP Global, to reach a responsibility

determination. See AR 963-64; AR 3145. Upon remand, the Naples Contracting Officer

conceded that WSP was cited as LBAS’s parent company in the context of reaching a

responsibility determination, but also stated that “other information within the responsibility

determination … fully substantia[d] LBAS’s [financial] responsibility.” AR 3145. Indeed,

LBAS has provided air terminal and ground handling services at many other airbases around the

world, including some which are much larger than Naples. See AR 1232; 1239; 1266. The

Court holds that the Navy’s responsibility determination for LBAS with respect to the Naples

RFP was rational.

Third, as noted above, the Court also holds that the Navy rationally found that DFARS

252.222-7002 was not “violated” by the labor unrest at Rota or the Spanish court cases. The

Navy regarded the workforce reductions at Rota as a “restructuring” which was a business

judgment response to “a decrease in contract workload requirements from the predecessor

contract.” AR 6076. The Contracting Officers for both Naples and Rota regarded the resulting

court cases as routine process, with which LBAS complied; and on top of this, the Spanish

Ministry of Defense contemplated disqualifying LBAS from bidding (see AR 2658) and then

issued an approval. AR 6095. The Court holds that the Navy was rational to not find a past

“violation” of DFARS 252.222-7002 at Rota in the first place and was therefore also rational not

to project such an ostensible violation onto LBAS’s future performance of the Naples contract.

20

ii. The Navy Reasonably found that Louis Berger Was Not Required to Submit a

Past Performance Reference for Its Italian Subsidiary

Algese argues that LBAS breached the terms of the Naples solicitation for failing to

submit a Past Performance reference for a subsidiary because the Naples RFP stated: “If a joint

venture or a teaming arrangement of any sort is contemplated, there should be at least one

reference from each part with a total not exceeding overall references.” AR 755 (emphasis

added).

Algese points to a letter submitted by LBAS introducing its technical capabilities, which

stated:

Louis Berger and our registered Italian entity Louis Berger Italia,

S.r.l. (Louis Berger) is pleased to present NAVSUP FLC Sigonella our

proposal to perform Air Terminal and Ground Handling Services

(ATGHS) at Naval Support Activity Naples (Military) Air Terminal

Capodichino, Naples, Italy.

AR 1768 (emphasis added). Algese also argues that LBAS’s use of pronouns such as “we” and

“our” elsewhere in its submissions further supports the idea that LBAS was engaged in a teaming

arrangement with Louis Berger Italia, S.r.l. ECF No. 41-1 at 33-34.

The Navy understood that Louis Berger Italia, S.r.l. was a subsidiary of LBAS, and that

the subsidiary was being used only to facilitate LBAS’s business in Italy. AR 9205. The Navy’s

finding is due significant deference. Beyond this, LBAS argues that likewise, Algese also

mentioned subsidiary or “sister” entities, GH Napoli SpA and Alisud SpA. See AR 934. LBAS

additionally argues that in any case, submission (or not) of past performance references for

subsidiaries was discretionary (not compulsory under the RFP) because the RFP states that

bidders “should” (not “shall” or “must”) submit Past Performance references.

The Court holds that the Navy rationally found that LBAS not submitting a Past

Performance reference for Louis Berger Italia, S.r.l. did not violate the terms of the Naples RFP.

iii. The Navy’s evaluation of LBAS’s Proposed Staffing was Rational and

Consistent with the Solicitation

Algese makes three arguments challenging the Navy’s technical assessment of LBAS’s

staffing plan. Algese alleges (1) that the Navy ignored performance risks associated with

LBAS’s ostensible planned workforce reductions at Naples, (2) that LBAS’s staffing plan – and

the number of Full Time Employees (FTE’s) advertised – was materially non-compliant with the

required level of effort to perform the contract and (3) that LBAS failed to show that it could

meet the minimum staffing requirements for two key positions necessary to managing the Naples

airfield.

First, Algese argues that because LBAS’s staffing plan for Naples projects a XXX

reduction of the workforce, the Navy’s positive evaluation of LBAS’s ability to perform was

irrational. See ECF No. 41-1 at 36. In other words, the Naples Contracting Officer purportedly

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failed to anticipatorily weigh the risk of a drop in performance due to future labor strife at the

Naples air base. Id. at 37. As with the Rota arguments, Algese also argues that LBAS’s

intended workforce reductions are “at odds with U.S. laws and traditions, a violation of U.S.

treaty obligations, and directly contrary to the Biden administration’s contracting policies.” Id.

Algese’s position is a stretch given that the Navy’s technical evaluations are due

significant deference. See E.W. Bliss Co., 77 F.3d at 449 (Fed. Cir. 1996) (“[T]echnical ratings

... involve discretionary determinations of procurement officials that a court will not second

guess.”). Beyond this, the Naples RFP did not require bidders to retain the same level of staffing

as under the incumbent contract – it required offerors to “demonstrate adequate staffing and

sufficient management to support the requirements identified in the PWS …”. See AR 3245.

Indeed, the Navy found that LBAS’s proposal reflected “a clear understanding of PWS

performance requirements.” AR 1189, 2027. The Navy’s Contracting Officer ultimately found

that there is “no reason to believe that LBAS will not be able to perform at this price and with

fewer FTE’s than Algese proposed to use.” See AR 2025. Algese predicts that LBAS’s

workforce reductions “will almost certainly encounter the same problems in Naples.” AR 41-1

at 37. However, as reviewed above, the Navy regarded LBAS’s reductions at Rota as

reasonable, found that performance was not impeded by the labor unrest, and considered and

then rejected adding a “labor relations” condition to the successor Rota RFP. See AR 6076-77.

In addition, Algese’s reliance on EO 14055 seems questionable given that the Order explicitly

directs that contractors “may elect to employ more or fewer employees than the predecessor

contractor … in connection with the performance of work.” EO 14055 at 3(a). Weighing the

required deference, the Court holds that the Navy rationally found that LBAS’s staffing plan did

not threaten operations at Naples based on the possibility of labor strife.

Second, Algese argues that the Navy “ignored clear inconsistencies” in LBAS’s staffing

plan for the Naples Contract. Algese accurately points to a spot in LBAS’s staffing submission

where “part time” employers are labeled “FTE” (“full time employee”). See AR 1769.

However, LBAS’s full “organizational structure” chart does distinguish between full time and

part-time employees and lists XXX total employees. AR 1772. The Navy was satisfied with

LBAS’s staffing plan and, reflecting the “organizational structure” chart, understood that that

there would be XXX total employees – XXX part-time and XXX full-time. AR 1189. In other

words, Algese’s argument mainly focuses on an oversight in one sub-area of LBAS’s staffing

plan submission (see AR 1769) which did not confuse the Navy, or prevent the Navy from

understanding LBAS’s planned balance between full and part-time employees. As noted above,

the Navy’s technical ratings are due significant deference. The Court holds that the

“inconsistencies” identified in LBAS’s staffing plan by Algese cannot support a finding that the

Navy’s assessment was arbitrary, capricious or irrational.

Third, Algese argues that LBAS’s proposed staffing submission was materially

noncompliant with the Naples RFP. The RFP directed offerors in part to submit (1) “a signed

Acknowledgment letter stating [that] the offeror is capable of performing all PWS requirements”

(AR 3241) and (2) “a plan which describes the proposed manning level and skills mix necessary

to ensure [that] all required personnel resources are provided to successfully accomplish all

performance requirements on the start date of the performance period.” Id (emphasis added).

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The RFP also specified that a Station Manager (or Alternate Station Manager) needed to be

available 24 hours per day, seven days per week, 365 days per year. See, e.g., AR 687.

LBAS’s proposed staffing submission in two spots appears to list one Station Manager

available for 8-hour shifts and one Alternate Station Manager also available for 8-hour shifts.

AR 1769, 1772. Algese thereby argues LBAS failed to comply with the RFP by not explicitly

listing Station Managers covering a full 24-hour workday. See ECF No. 41-1 at 39. Indeed, if

strictly construed as a comprehensive staffing plan, LBAS’s submission can be read as leaving a

gap of 8 hours per day when, purportedly, no Station Manager would be available. In other

words, Algese’s argument hinges on construing the RFP request for a staffing plan “which

describes … manning levels” as a strict requirement mandating comprehensive, explicit

submissions accounting for 24-hour per day staffing. But the Navy’s evaluation of LBAS’s

staffing submission approvingly stated, “LBAS indicated a staffing capacity and stated intent to

employ part-time personnel for additional hours to cover requirements to meet minimum staffing

requirements.” AR 1190.

In alignment with the Navy’s evaluation of LBAS’s staffing plan (AR 1190), the

Government contends that the solicitation did not require offerors to comprehensively list

staffing personnel. Rather, according to the Government, the RFP required bidders to submit

plans “which [merely] describe[]” staffing levels (AR 3241), and led bidders to certify their

staffing plans through an acknowledgement letter. See AR 1022 (LBAS acknowledgement

letter); AR 3241. Weighing the heavy deference afforded to agency technical assessments, the

Court holds that the Navy was rational to not reject LBAS’s technical proposal for listing only

two 8-hour Staffing Managers.

III. Conclusion

For the reasons set forth above, the Court DENIES Defendant’s Motion to Dismiss with

respect to the Rota RFP. The Court further DENIES Plaintiff’s Motion for Judgment on the

Administrative Record. The Court GRANTS Defendant’s Cross-Motion for Judgment on the

Administrative Record. The Court further GRANTS Defendant-Intervenor LBAS’s Cross

Motion for Judgment on the Administrative Record.

The parties are directed to file redactions within ten (10) days of the date of this Opinion

and Order.

IT IS SO ORDERED.

s/ Edward J. Damich

EDWARD J. DAMICH

Senior Judge

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