Mil-Mar Century Corp. v. United States

In the United States Court of Federal Claims

No. 13-131 C

(E-Filed Under Seal: May 23, 2013) 1

(E-Filed with Redactions: June 12, 2013)

________________________________________

)

)

MIL-MAR CENTURY CORP., )

)

Plaintiff, )

v. ) Post-Award Bid Protest; Claims

) by Incumbent Contractor of

THE UNITED STATES OF AMERICA, )

Improper Technical Evaluation of

)

Proposals, Unequal Discussions,

Defendant, )

) Improper Price Realism Analysis,

& ) and Flawed Best Value Analysis

)

THE ENTWISTLE CO., )

)

Defendant-Intervenor. )

)

________________________________________ )

Barbara Ann Duncombe, Dayton, OH, for plaintiff. Suzanne Sumner, Tricia C. Bell,

Casie E. Hollis and Joshua D. Prentice, Dayton, OH, of counsel.

Barbara E. Thomas, Trial Attorney, with whom were Stuart F. Delery, Principal Deputy

Assistant Attorney General, Jeanne E. Davidson, Director, and Deborah A. Bynum,

Assistant Director, Commercial Litigation Branch, Civil Division, United States

1

This Opinion was filed under seal on May 23, 2013, Docket Number (Dkt. No.) 44.

The court instructed the parties to file any requests for the redaction of protected material on or

before June 5, 2013. Id. at 1, n.1. In response to the court’s directive of May 23, 2013, plaintiff

timely filed Plaintiff’s Motion to Redact the Court’s Opinion, Dkt. No. 46, and defendant filed

Defendant’s Unopposed Motion for Leave to File Proposed Redactions Out of Time (defendant’s

Motion for Leave), Dkt. No. 47. In an order dated June 6, 2013, the court granted defendant’s

Motion for Leave and ordered defendant to “file a motion to redact protected materials on or

before Monday, June 10, 2013.” Order of June 6, 2013, Dkt. No. 48. In response to the court’s

directive of June 6, 2013, defendant timely filed Defendant’s Motion to Redact Protected

Material Contained in the Court’s Sealed May 23, 2013 Opinion, Dkt. No. 49. The parties’

motions to redact are GRANTED.

Department of Justice, Washington, DC, for defendant. Wade L. Brown, Associate

Command Counsel, and George W. Day, Attorney-Advisor, United states Army

TACOM, of counsel.

Henry E. Steck, Fort Worth, TX, for defendant-intervenor.

OPINION

HEWITT, Chief Judge

This is a post-award bid protest brought by plaintiff Mil-Mar Century Corp. (Mil-

Mar or plaintiff), the incumbent contractor responsible for designing and manufacturing

Load Handling System Compatible Water Tank-Rack Systems (known as Hippos). See

Compl. for Declaratory and Injunctive Relief (Complaint or Compl.), Docket Number

(Dkt. No.) 1, ¶¶ 2, 14-17. Plaintiff protests the award by the Army Contracting

Command-Warren (the Agency) to The Entwistle Company (Entwistle or intervenor) of a

contract valued at $69 million for the production of Hippos. See id. ¶¶ 2, 16. Plaintiff

contends that “[t]he Agency’s actions were irrationally based, arbitrary, capricious, and

contrary to applicable statutes and regulations.” Id. ¶ 4.

Before the court are plaintiff’s Complaint, filed February 20, 2013; Plaintiff’s

Motion and Memorandum in Support of Motion for Judgment upon the Administrative

Record (plaintiff’s Motion or Pl.’s Mot.), Dkt. No. 28, filed March 18, 2013 2; Defendant-

Intervenor’s Response Opposing Plaintiff’s Motion for Judgment on the Administrative

Record and Cross-Motion for Judgment on the Administrative Record with Supporting

Memorandum (intervenor’s Motion or Intervenor’s Mot.), Dkt. No. 29, filed April 1,

2013; Defendant’s Opposition to Plaintiff’s Motion for Judgment upon the

Administrative Record and Cross-Motion for Judgment upon the Administrative Record

2

Plaintiff’s Motion and Memorandum in Support of Motion for Judgment upon the

Administrative Record (plaintiff’s Motion or Pl.’s Mot.), Dkt. No. 28, filed March 18, 2013,

seeks to “incorporate[] . . . by reference” facts and arguments from plaintiff’s Memorandum in

Support of Plaintiff’s Motion for Preliminary Injunction (plaintiff’s Motion for Preliminary

Injunction), Dkt. No. 5. See, e.g., Pl.’s Mot. 2 n.1, 6 n.3, 15 n.7. The court denied plaintiff’s

Motion for Preliminary Injunction in an order dated February 21, 2013. Order of Feb. 21, 2013,

Dkt. No. 16. Rule 5.4(b)(3) of the Rules of the United States Court of Federal Claims (RCFC)

provides, “A party must not incorporate a brief or memorandum by reference; the court will

disregard any such incorporation.” RCFC 5.4(b)(3). The court therefore disregards the attempt

by Mil-Mar Century Corp. (Mil-Mar or plaintiff) to incorporate by reference all or any portion of

plaintiff’s Motion for Preliminary Injunction. Cf. Def.’s Opp’n to Pl.’s Mot. for J. upon the

Admin. R. & Cross-Mot. for J. upon the Admin. R. (defendant’s Motion or Def.’s Mot.), Dkt.

No. 30, at 2 n.1 (objecting “to plaintiff’s attempts to evade the page limitations set forth in the

Court’s rules--and agreed upon during the initial status conference in this litigation--by

‘incorporating’ portions of other filings into its motion for judgment”).

(defendant’s Motion or Def.’s Mot.), Dkt. No. 30, filed April 1, 2013; Plaintiff’s

Response to Defendant’s Motion for Judgment upon the Administrative Record (Pl.’s

Resp.), Dkt. No. 31, filed April 8, 2013; Defendant-Intervenor’s Reply to Plaintiff’s

Response, Dkt. No. 32, filed April 15, 2013; and Defendant’s Reply in Support of Its

Cross-Motion for Judgment upon the Administrative Record (Def.’s Reply), Dkt. No. 34,

filed April 15, 2013.

The United States (the government or defendant) filed the Administrative Record

(AR) on March 4, 2013, see Def.’s Notice of Filing of Admin. R., Dkt. No. 25, and the

court granted Defendant’s Consent Motion for Leave to File Corrected Administrative

Record, Dkt. No. 26, on March 11, 2013, see Order of Mar. 11, 2013, Dkt. No. 27. The

parties completed briefing on April 15, 2013, and the court held oral argument on Friday,

April 19, 2013 at 10:00 a.m. Eastern Daylight Time. 3 See Order of Feb. 21, 2013, Dkt.

No. 14, at 2.

Plaintiff argues that “[t]he Agency improperly and unequally evaluated

[Entwistle’s] technical proposal, conducted unequal discussions, . . . conducted an

improper price realism analysis” and conducted a flawed best value analysis. Compl. ¶ 3.

Defendant counters that, despite plaintiff’s “flurry of arguments to the contrary,” Def.’s

Mot. 17, the Agency “acted reasonably and in accordance with the solicitation at each

stage of its Hippo procurement,” Def.’s Reply 1.

For the reasons stated below, plaintiff’s Motion is DENIED, and the Motions of

defendant and intervenor are GRANTED.

I. Background 4

A. The Solicitation

On March 20, 2012 the Agency issued Solicitation No. W56HZV-11-R-0171 (the

Solicitation or Request for Proposals (RFP)), a 100% small business set aside that sought

proposals for a firm fixed-price, three-year Indefinite Delivery/Indefinite Quantity

contract for the manufacture and supply of Hippos. Compl. ¶ 16, 28. See generally AR

71-281 (RFP). Hippos are framed stainless steel water tanks, see AR 488, 490-91 (Hippo

3

The oral argument held on Friday April 19, 2013 was recorded by the court’s

Electronic Digital Recording (EDR) system. The times noted in citations to the oral argument

refer to the transcript of the EDR record of the oral argument (Tr.).

4

The facts are taken from plaintiff’s Complaint for Declaratory and Injunctive Relief

(Complaint or Compl.), Dkt. No. 1, the corrected Administrative Record, see Dkt. Nos. 25-27,

plaintiff’s Motion and defendant’s Motion. Unless otherwise noted, the facts do not appear to be

in dispute.

Purchase Description) (stating that the water tank was to be made of stainless steel and

describing frame requirements), that are “capable of transporting 2000 gallons of potable

water, and can operate at temperatures of -25 degrees Fahrenheit,” 5 AR 72 (RFP). The

frame of a Hippo water tank is designed to “meet International Organization for

Standardization (ISO) container requirements to allow stacking of tankracks and meet

requirements of worldwide intermodal shipping.” AR 480 (Hippo Purchase Description).

In addition to water tanks and frames, Hippos are equipped with heating devices, hose

reels, water pumps and engines. Id. at 480, 494.

The Solicitation represented the first competitive procurement for Hippos. AR

1767 (Initial Price Evaluation Report (Initial PER)). All previous procurements had been

awarded to plaintiff on a sole-source basis. 6 Compl. ¶ 14. Although the Agency

considered its contracts with Mil-Mar successful, the Agency found “no compelling

reason to believe” that its contracts with Mil-Mar yielded “the optimum in price.” AR

2665 (Acquisition Plan).

The Solicitation provided that the offeror selected for award would be required to

have “six First Article Testing (FAT) units” approved by the Agency before the Agency

ordered production of the remaining units. AR 72 (RFP). Once the Agency approved the

FAT units, the selected offeror would be responsible for producing up to 311, 260 and

274 Hippos in the first, second and third years of production, respectively, id. at 76, at an

estimated maximum production rate of thirty-five Hippos a month, id. at 72. The

selected offeror would also be responsible for developing technical manuals for the

Hippos. Id. at 132.

Offerors were to submit proposals that would include volumes dedicated to the

discussion of three factors: Production Capability, Experience 7 and Price. Id. at 262.

5

Load Handling System Compatible Water Tank-Rack Systems (known as Hippos)

“fullfil[] the [United States] Army requirement for . . . mobile hard-wall water tanker[s] to

transport and distribute water at the brigade level.” AR 2658 (Acquisition Plan).

6

The first non-competitive Hippo contract was awarded to plaintiff on September 21,

2001. AR 1767 (Initial Price Evaluation Report (Initial PER)). Plaintiff produced fifty-four

Hippos under the first contract, which established plaintiff as the original manufacturer of the

Hippo. Id. On August 25, 2006, plaintiff was awarded the second non-competitive Hippo

contract, pursuant to which plaintiff produced approximately 770 Hippos, and, on December 17,

2010, plaintiff was awarded the third non-competitive Hippo contract, pursuant to which plaintiff

produced 469 Hippos. Id.

7

The primary difference between an agency’s evaluation of offerors’ experience versus

offerors’ past performance is that an evaluation of experience “does not consider the quality of

the work performance, whereas” evaluation of past performance does. AR 2189 (Procuring

Contracting Officer Determination to Waive Past Performance as an Evaluation Factor); see also

Section L of the Solicitation provided offerors with instructions regarding the required

content of the proposals, see id., and Section M of the Solicitation provided offerors with

information regarding the Agency’s evaluation of the proposals, see id. at 276. The court

discusses Section L and Section M of the Solicitation in more detail below.

1. Section L of the Solicitation: Instructions, Conditions and Notices to

Offerors

Section L of the Solicitation provided offerors with instructions, conditions and

notices. Id. at 262. Section L.4 of the Solicitation discussed what information offerors

were to include in the volume dedicated to the Production Capability factor. Id. at 263.

Under this factor, offerors were to provide letters of commitment from sub-contractors

and to address the following considerations: manufacturing facilities, production

approach, key tooling and equipment and time-phased critical path schedule. Id. at 263.

Plaintiff does not raise any specific arguments related to the Production Capability factor.

See Tr. 58:3-5 (Barbara E. Thomas (Ms. Thomas)) (“Mil-Mar hasn’t made any

arguments that Entwistle submitted insufficient information about its production

capabilities.”).

Section L.5 of the Solicitation discussed what information offerors were to include

in the volume dedicated to the Experience factor. AR 264 (RFP). Under this factor,

offerors were to identify up to five “relevant [c]ontracts” that had been performed in the

past three years. Id. Section L.5.3 defined relevant contracts as those that “are

comparable in scope to the requirements of this RFP” and further provided that “relevant

Experience with the following scope of work [(SOW)] requirements [would] be assessed

by the Government:” (1) comparable items, or the “[s]upply of sanitary liquid handling

and storage systems of a complexity comparable to the Hippo”; (2) technical manuals, or

the “[s]upply of Technical Manuals of a complexity comparable to the Technical

Manuals required in this RFP”; (3) delivery, or the “[d]elivery of water handling and

storage systems of complexity comparable to the Hippo” at a production rate comparable

to thirty-five Hippos a month; (4) low temperature requirement, or the production of

“sanitary liquid handling and storage systems capable of meeting . . . low-temperature

requirements”; and (5) welding, or the “[w]elding [of] stainless steel in accordance with

American Welding Society [Standard] D18.3/18.3M.” Id. at 265. Section L.5.4 provided

that, for each of the contracts identified, offerors should include, among other

information, copies of the actual SOW provisions of each contract and “[a] discussion of

specific similarities between these contract [SOWs] and the [SOW] herein.” Id. Section

L.5.4 also stated that “[f]ailure to provide the information requested under [Section] L.5.4

. . . so that the Government can verify claimed experience may result in a determination

AR 2281 (Source Selection Authority (SSA) Final Briefing) (stating that “[f]or purposes of this

evaluation, ‘past performance’ will be interpreted to mean ‘experience’ and the evaluation will

not consider the quality of performance on prior offeror efforts”).

that your proposal is unacceptable and the elimination of your proposal from

consideration for award.” Id.

Section L.6 of the Solicitation discussed the information offerors were to include

in the volume dedicated to the Price factor. Id. Under this factor, offerors were to list all

proposed prices in a Microsoft Excel spreadsheet labeled as Attachment 16, including

proposed material costs, subcontractor costs over $5,000 and labor-related costs (broken

down into labor rates and hours). Id. at 265-66; cf. AR 550-54 (Attachment 16 template).

Attachment 16 included a Bill of Material, in which offerors were to identify all items

with an estimated cost of $500 or more; offerors were allowed to aggregate the total

value of items costing less than $500. See AR 266 (RFP); AR 554 (Bill of Material).

Section L.6.6 provided that “the Government reserves the right, as a clarification under

[Federal Acquisition Regulation (FAR)] 15.306(a), to request additional or more detailed

price breakdown data to support its determination of price reasonableness.” AR 266

(RFP).

2. Section M of the Solicitation: Evaluation Factors for Award

Section M of the Solicitation addressed the criteria by which the Source Selection

Evaluation Board (SSEB) would evaluate proposals for award. Id. at 276-77; AR 1857

(Contract Review Board Abstract) (discussing the SSEB’s role in evaluating proposals).

The findings of the SSEB would inform the decision of the Source Selection Authority

(SSA), AR 1857 (Contract Review Board Abstract), “the official designated to direct the

source selection process and select the Offeror for contract award,” AR 277 (RFP); see

AR 2341 (Source Selection Organization Chart) (illustrating the relationship between the

SSA and the SSEB).

The Solicitation provided that the SSA would evaluate proposals “using a trade-

off process to determine which proposal provides the most advantageous and realistic

proposal (i.e. best value) considering the three factors: 1) Production Capability, 2)

Experience, and 3) Price.” AR 276 (RFP). That is, “in selecting the offer which is most

advantageous and represents the best value to the Government,” the SSA would consider

“the relative strengths/weaknesses and risks of each Offeror’s proposal in the non-price

factors as well as the total evaluated price.” Id. The Solicitation provided that the

government would award the contract to the offeror that (1) represented the best value to

the government, (2) submitted a proposal that met “all the material requirements of [the]

solicitation” and (3) met certain responsibility requirements. Id. at 277.

Section M.4 of the Solicitation discussed the relative weight to be given to each

factor: “Production Capability is the most important factor and is slightly more important

than [E]xperience,” with “Experience [being] slightly more important than Price.” Id.

When combined, the non-price factors would be considered more important than price.

Id. at 278. However, the Solicitation provided that--“[n]otwithstanding the relative order

of importance of the evaluation factors as stated”--the Price factor “may be controlling

when . . . [t]he advantages of a higher rated, higher price[d] proposal are not considered

to be worth the price premium.” Id. at 277.

With respect to the volume dedicated to the Production Capability factor, Section

M.5 provided that the government would assess “offerors[’] capacity to provide for

timely delivery of supplies in satisfaction of contract requirements,” id. at 278, and

offerors would be a assigned a rating of outstanding, good, acceptable, marginal or

unacceptable, AR 2412 (Source Selection Plan). With respect to the volume dedicated to

the Experience factor, Section M.6 provided that “the Government [would] assess the risk

that the offeror [would] successfully meet contract requirements based upon prior

experience with the [five SOW] requirements” set forth in Section L.5.3, see AR 278

(RFP), and offerors would be assigned a rating of very relevant, relevant, somewhat

relevant or not relevant, 8 AR 2413 (Source Selection Plan); Compl. ¶ 36. Section M.7

addressed the volume dedicated to the Price factor, in which the government would

“assess the total evaluated price to the Government.” AR 278 (RFP). Section M.7 also

provided that the government would evaluate “the reasonableness of the proposed prices

to accomplish the solicitation requirements,” and that “[t]he Government may reject a

proposal which is not realistic, or not reasonable, as to price.” Id.; cf. id. (stating that

“[r]easonableness exists when an offered price does not exceed what would be incurred

by a prudent person in the conduct of competitive business”); infra Part III.D (discussing

the Agency’s price realism analysis).

Section M of the Solicitation also listed circumstances under which the

government could reject proposals. AR 276 (RFP). The Solicitation provided that the

government “may” reject proposals that “omit[] significant material data and information

required by Section L;” are “unrealistically . . . low in price” and “reflect[] an inherent

lack of technical competence or a failure to comprehend the complexity and risks

required to perform the solicitation requirements;” or “contain[] any unexplained

significant inconsistency between the proposed effort and cost and/or price, which

8

These experience ratings are described by the Source Selection Authority (SSA) as

follows:

[A]n assessment of Very Relevant Experience will be considered to reflect a very

low risk of unsuccessful performance[,] . . . an assessment of Relevant Experience

will be considered to reflect a low risk of unsuccessful performance[,] . . . an

assessment of Somewhat Relevant Experience will be considered to reflect a

moderate risk of unsuccessful performance[,] . . . [and] an assessment of Not

Relevant Experience will be considered to reflect a high risk of unsuccessful

performance.

AR 2281 (SSA Final Briefing); AR 2413 (Source Selection Plan).

implies the offeror . . . has an inherent misunderstanding of the scope of work, or . . . has

an inability to perform the resultant contract.” Id.

The Solicitation further provided that the government intended to award the

contract without conducting discussions. Id. “Where award will be made without

discussions, exchanges with Offerors are limited to clarifications as defined in FAR

15.306(a).” Id. Although “the Government reserve[d] the right to hold discussions, if

necessary,” the Solicitation advised offerors to submit their “best terms with respect to

the price and non-price factors.” Id.

B. Responses to the Solicitation and the SSEB’s Evaluation of Proposals

Seven offerors submitted proposals in response to the Solicitation: [* * *],

Entwistle, [* * *], [* * *], [* * *], Mil-Mar, and [* * *]. AR 1878 (Source Selection

Decision Document (SSDD)). Proposals were received May 21, 2012; however, on June

6, 2012 the Agency issued amendments to the Solicitation, 9 and the seven offerors

submitted modified proposals on June 14, 2012. Id.; AR 1857 (Contract Review Board

Abstract).

The SSEB evaluated the proposals submitted by the seven offerors pursuant to

Section M of the Solicitation. AR 1878 (SSDD); cf. supra Part I.A.2 (discussing Section

M). The SSEB assigned Mil-Mar the highest ratings in both the Production Capability

and Experience factors. AR 1879 (SSDD). However, Entwistle’s total evaluated price of

$69,063,943 was approximately [* * *]% lower than that of Mil-Mar’s ($[* * *]) and

approximately [* * *]% lower than that of the next lowest offeror, [* * *] ($[* * *]). See

id.; see also id. at 1905 (stating that Mil-Mar’s total evaluated price was [* * *]% higher

than Entwistle’s and that the second lowest offeror’s price was [* * *]% higher than

Entwistle’s); AR 1857 (Contract Review Board Abstract) (same). A chart of the ratings

the SSEB assigned each offeror for the Production Capability and Experience factors and

each offeror’s total evaluated price is below:

Offeror Production Capability Experience Total Evaluated Price

[* * *] Good Relevant $[* * *]

Entwistle Good Relevant $69,063,943

[* * *] Good Relevant $[* * *]

[* * *] Acceptable Somewhat Relevant $[* * *]

[* * *] Marginal Not Relevant $[* * *]

Mil-Mar Outstanding Very Relevant $[* * *]

9

The amendments to Solicitation No. W56HZV-11-R-0171 (the Solicitation or Request

for Proposals (RFP)) issued on June 6, 2012 “clarif[ied] certain matters related to projected

delivery requirements.” AR 1878 (Source Selection Decision Document (SSDD)).

[* * *] Marginal Not Relevant $[* * *]

AR 1879 (SSDD).

C. Requests for Clarification

Because Entwistle’s total evaluated price was “substantially less than any other

offeror’s,” the government sought “to clarify” Entwistle’s pricing. Def.’s Mot. 10; see

Pl.’s Mot. 15-16 (stating Entwistle’s “extremely low” price “forced the Agency to

consider the price realism of Entwistle’s proposal to ascertain whether or not it reflected

an understanding of the technical requirements of the Hippo or would expose the

Government to undue risk”). As described above, see supra Part I.A.1, Section L.6.6 of

the Solicitation provided that, pursuant to FAR 15.306(a), the government could “request

additional or more detailed price breakdown data to support its determination of price

reasonableness” as a clarification, AR 266 (RFP).

On July 25, 2012 the government issued to Entwistle four requests for clarification

that, defendant contends, were permissible under FAR 15.306(a) and Section L.6.6 of the

Solicitation. 10 See AR 1772-73 (Initial PER); AR 1844-54 (four requests for

clarification); cf. supra Part I.A.1 (discussing Section L.6.6). The four requests for

clarification are below:

[(1)] Please substantiate your proposed tank and engine price with quotes,

invoices, and item/material specifications.

....

[(2)] Please clarify the cost (material and labor) associated with fabricating

the ISO frame.

....

[(3)] Please address the discrepancies in your direct labor hours as

described below:

- There is a difference in the assembly hours shown in the [P]rice

Volume . . . and the Production [Capability] Volume . . . . Please

clarify which assembly hour reference is correct and provide the

basis for the total hours identified.

10

Plaintiff contends that two of these exchanges constituted discussions. See Compl. ¶¶

14-15; Pl.’s Mot. 18-20. The court addresses this dispute in Part III.C below.

- Total direct hours in the Price Volume . . . do not correspond to the

direct labor cost . . . . Please clarify hours and cost.

....

[(4)] Please clarify how your proposed labor hours are adequate to carry out

the steps necessary for production of the [FAT] items and production

quantities.

AR 1773 (Initial PER).

Entwistle responded to the four requests for clarification two days later, on July

27, 2012. Id. at 1772. In response to the first request for clarification, Entwistle attached

quotations from its proposed subcontractors for the water tank and engine. Id. at 1773;

see id. at 1775 (water tank quotation), 1776 (engine quotation). In response to the second

request for clarification, Entwistle stated: “The estimated material cost for the frame is

$[* * *]. The estimated labor for fabricating the frame is [* * *] hours.” Id. at 1773. In

response to the third request for clarification, Entwistle stated: “The [P]rice Volume . . .

represents the final [direct labor hour] estimate[],” and that “[t]he total direct [labor]

hours in the Price Volume . . . should reflect [* * *] hours”; Entwistle also attached a

corrected Attachment 16 that incorporated the clarification to its total direct hours. See

id. (showing attachment); see id. at 1777 (corrected Attachment 16); AR 1833 (Entwistle

Price Evaluation Report (Entwistle PER)) (addressing Entwistle’s response to the third

request for clarification). In response to the fourth request for clarification, Entwistle

stated: “The production labor hours were estimated for each labor category based on our

understanding of the solicitation requirements. Based on our experience with design

programs, a factor was applied to the production hours to arrive at the first article labor

hours.” AR 1774 (Initial PER).

D. Price Evaluation Reports

After the Agency received Entwistle’s responses to its requests for clarification,

the SSEB prepared the following price evaluation reports: (1) the Initial Price Evaluation

Report, dated July 31, 2012, which was prepared as to all offerors, see AR 1765 (Initial

PER); (2) the Price Evaluation Report, dated August 8, 2012, and the Addendum to the

Price Evaluation Report, dated August 15, 2012, which were specific to Entwistle, see

AR 1782 (Entwistle PER); AR 1832 (Addendum to the Entwistle Price Evaluation Report

(Entwistle PER Addendum)); and (3) the Final Price Evaluation Report, dated August 23,

2012, which was prepared as to all offerors, see AR 1835 (Final Price Evaluation Report

(Final PER)). The court discusses each evaluation report, in turn, below.

1. The Initial Price Evaluation Report

The SSEB prepared the Initial Price Evaluation Report in accordance with Section

M.7.1 of the Solicitation, which required the government to assess “‘the reasonableness

of the proposed prices to accomplish the solicitation requirements.’” AR 1766 (Initial

PER) (quoting Section M.7.1 of the Solicitation); cf. AR 278 (RFP) (stating that

“[r]easonableness exists when an offered price does not exceed what would be incurred

by a prudent person in the conduct of competitive business”). The SSEB concluded that

each offeror’s total proposed price was reasonable based on adequate price competition.

AR 1768-70 (Initial PER); cf. id. at 1767 (defining “adequate price competition” under

FAR 15.403-1(c)(1)).

“For evaluation purposes to test price realism,” the SSEB reviewed “five major

items from each offeror’s Bill of Material [in Attachment 16]”: the frame, water tank,

engine, hose reel and pump. Id. at 1768. The SSEB verified that, with the exception of

Entwistle and [* * *], all of the offerors included the costs of each of these five items in

their Bill of Material. See id. at 1768-70. Although Entwistle failed to include the cost

of the frame in its Bill of Material, the SSEB verified that this was because Entwistle

planned to “build and fabricate the frame” rather than purchase it. 11 See id. at 1768.

Moreover, recognizing that Entwistle’s price was “very low in comparison to the

other offerors as well as in comparison to past history,” the SSEB attempted to verify

certain information in Attachment 16 of Entwistle’s Price Volume. Id. For example, the

SSEB verified Entwistle’s proposed cost of the water tank “via telephone with the tank

vendor.” Id. Notwithstanding the fact that Entwistle’s “total price appear[ed] to be very

low,” the SSEB concluded that it “ha[d] no basis to question the reasonableness of the

total price offered by Entwistle.” Id.

2. The Entwistle Price Evaluation Report and Addendum to the Entwistle

Price Evaluation Report

On August 8, 2012 the SSEB prepared a Price Evaluation Report specific to

Entwistle, in which the SSEB evaluated Entwistle’s proposal “for reasonableness and

realism.” AR 1782-83 (Entwistle PER). On August 15, 2012 the SSEB prepared an

Addendum to the Price Evaluation Report, in which the SSEB “provide[d] additional

evaluation and analysis of Entwistle’s responses to the Government’s requests for

clarification[].” 12 AR 1832 (Entwistle PER Addendum); cf. supra Part I.C (discussing

11

Similarly, [* * *] did not include the cost of either the water tank or the frame in its

Bill of Material because it planned to “build[] and fabricat[e] the tank and frame.” See AR 1769-

70 (Initial PER).

12

As plaintiff correctly points out, see Pl.’s Mot. 17, although the Initial Price

Evaluation Report included the four requests for clarification and responses by The Entwistle

Company (Entwistle), see AR 1772-74 (Initial PER), the Source Selection Evaluation Board

(SSEB) did not document any evaluation or analysis of Entwistle’s responses until it prepared its

the government’s requests for clarification). The SSEB concluded in both reports that the

total evaluated price offered by Entwistle was both reasonable and realistic. See AR

1790 (Entwistle PER); AR 1833 (Entwistle PER Addendum).

The Entwistle Price Evaluation Report included a comparison of the items that

Entwistle listed in its Bill of Material--that is, items with an estimated cost of $500 or

more--with the historical prices of these items and prices culled from market research.

AR 1786 (Entwistle PER). Entwistle’s [* * *] was the water tank, which Entwistle

planned to purchase from its proposed subcontractor, [* * *], at a cost of $[* * *]. Id.

The historical price for the water tank, which was derived from previous procurements

with Mil-Mar, was $[* * *]. See id.; cf. supra note 6 (discussing the sole-source contracts

awarded to Mil-Mar for the production of Hippos). However, because Mil-Mar had

purchased the water tank as a framed unit and because Entwistle planned to purchase the

water tank and manufacture the frame, the SSEB considered impossible “an ‘apples to

apples’ comparison between [the historical price of] the [water] tank/frame and the

[water] tank that Entwistle is offering.” AR 1787 (Entwistle PER); cf. id. at 1785 (stating

that “Entwistle’s total proposed unit price for the HIPPO [* * *] is less than the historical

negotiated price for [Mil-Mar’s] tank/frame”).

Because Entwistle’s water “tank price was so much lower than [the historical

price],” and in an attempt to “mitigate[] some of the risk inherent with using a new

source,” the SSEB sought to verify the price of the water tank that Entwistle proposed to

purchase from [* * *]. Id. at 1786. Although the SSEB did find an [* * *] water tank

truck (priced at $[* * *]) on the price list of the General Services Administration (GSA)

online database system, id.; see also AR 1815-17 (GSA price list guide); AR 1818-31

(GSA price list for [* * *]), it could not find a “stand alone” [* * *] water tank, AR 1786

(Entwistle PER) (internal quotation marks omitted). The SSEB therefore “contacted

[* * *] and asked if it [sold] the water tank on a stand-alone basis and at what price.” Id.

[* * *] responded that the price for a stand-alone water tank “would be ‘around

$[* * *].’” Id. The SSEB found that “[t]his research pricing substantiates the validity of

the [price of the water] tank Entwistle proposed,” id., and concluded that Entwistle’s

“proposed price for the water tank certainly appear[ed] reasonable,” id. at 1787; see also

id. at 1786 (stating that “[t]he tank price is further supported by the [* * *] GSA price list

for the entire vehicle with tank and pumping system”).

The SSEB also observed that “Entwistle did not comply with Section L.6

instructions to offerors, in its entirety.” Id. at 1785. Specifically, Entwistle “did not

provide all of the requested information in Attachment []16 under the [Bill of Material].”

Id. For example, Entwistle failed to include the part numbers for the items listed in its

August 15, 2012 Addendum to the Price Evaluation Report, see AR 1832 (Addendum to the

Entwistle Price Evaluation Report).

Bill of Material. Id. at 1786; cf. Compl. ¶ 69 (listing the information that Entwistle failed

to include in its Bill of Material); infra Part III.C (discussing Entwistle’s failure to

include the cost of the frame in the Bill of Material). The SSEB concluded, however, that

“the data that was omitted was not significantly material to reject [Entwistle’s] proposal.”

AR 1785 (Entwistle PER); cf. AR 276 (RFP) (providing that an offeror’s proposal may

be rejected if “[t]he proposal fails to meaningfully respond to the instructions in Section

L of this solicitation” such as by “fail[ing] to provide any of the data and information

required in Section L”).

In the Addendum to the Price Evaluation Report, the SSEB examined Entwistle’s

responses to the government’s requests for clarification. AR 1832 (Entwistle PER

Addendum); cf. supra Part I.C (discussing the government’s requests for clarification).

Owing to certain errors in Entwistle’s Price Volume not at issue here, the SSEB found

that “Entwistle ha[d] understated [its] direct costs by a total of $[* * *]” and adjusted

Entwistle’s price accordingly. See AR 1833 (Entwistle PER Addendum). The SSEB

found this amount to be to be “negligible,” however, given that it was “only [* * *]% of

the total proposed price” and could likely “be ‘negotiated’ downward between

[Entwistle] and [* * *].” Id. at 1833-34. Notably, the SSEB did not adjust Entwistle’s

price as a result of the exchange between Entwistle and the government regarding

Entwistle’s estimated cost to manufacture the Hippo frame. Cf. id. at 1833 (noting that,

in response to the government’s second request for clarification, Entwistle stated that its

estimated material cost for the frame was “$[* * *] and the estimated labor for fabricating

the frame is [* * *] hours”).

3. The Final Price Evaluation Report

On August 23, 2012 the SSEB prepared a report titled “Final Price Evaluation

Report,” AR 1835 (Final PER) (capitalization omitted), the purpose of which was “to

determine if the offers [were] reasonable and realistic,” id. at 1837. The Final Price

Evaluation Report included much of the same information that was provided in the Initial

Price Evaluation Report. Compare id. at 1835-43 with AR 1765-74 (Initial PER). Both

reports, for example, indicated that Entwistle’s water tank price had been “verified via

telephone with the tank vendor.” See AR 1839 (Final PER); AR 1768 (Initial PER). The

Final Price Evaluation Report, however, added that Entwistle’s water tank price had also

been verified, pursuant to requests for clarification, “via vendor quotation.” AR 1839

(Final PER). As it did in the Initial Price Evaluation Report, see AR 1768 (Initial PER),

the SSEB concluded in the Final Price Evaluation Report that it “ha[d] no basis to

question the reasonableness of the total price offered by Entwistle,” AR 1839 (Final

PER).

E. Best Value Analysis and Contract Award

On September 28, 2012 the SSA prepared a thirty-one-page Source Selection

Decision Document (SSDD) in which he concluded that, because “the proposal from

[Entwistle] represents the best value to the Government,” award should be made to

Entwistle. AR 1878, 1908 (SSDD). In reaching this conclusion, the SSA reviewed and

adopted the ratings the SSEB assigned each offeror under the Production Capability and

Experience factors. See AR 1878-79; cf. supra Part I.B (discussing the ratings assigned

by the SSEB). The SSA also compared the proposals submitted by the offerors “utilizing

a ‘trade-off’ process, giving appropriate consideration to the evaluation criteria set forth

in the RFP and their relative importance.” AR 1878 (SSDD); see id. at 1880-1904

(comparing Entwistle’s proposal against each of the other offerors’ proposals). The court

addresses the SSA’s best value trade-off analysis in more detail in Part III.E below.

The SSA also stated that, because Entwistle’s price was “significantly lower” than

that of the next lowest offeror, the contracting officer had “employed cost analysis

techniques to determine whether it [was] reasonable to conclude that Entwistle [could]

perform the requirements of the contract based on its offered price.” Id. at 1906; cf. AR

276 (RFP) (providing that the government may reject a proposal that “contains any

unexplained significant inconsistency between the proposed effort and cost and/or price,

which implies the offeror . . . has an inherent misunderstanding of the scope of work,

or . . . has an inability to perform the resultant contract”). The cost analysis techniques

included “a comparison of cost elements, and a review of Entwistle’s labor hours and

material type(s) to determine risk of successful performance at the offered price.” AR

1906 (SSDD). The SSA reviewed the contracting officer’s “assessment of price

fair[ness] and reasonableness to assure that awarding the contract at Entwistle’s proposed

price [was] prudent,” id. at 1905, and concluded that Entwistle’s “total proposed price [of

$67,960,541] [did] not appear to be unreasonably low,” id. at 1908. The court addresses

the SSA’s cost analysis in more detail in Part III.D below.

F. Procedural History

Mil-Mar learned that it was not selected for award on September 28, 2012. AR

2439 (Government Accountability Office (GAO) Protest). Plaintiff filed a protest with

the GAO on October 9, 2012, see id. at 2435, and, on January 17, 2013, GAO denied

Mil-Mar’s protest, AR 2637-38 (GAO Decision). On February 20, 2013, Mil-Mar filed

its Complaint with this court. See generally Compl. (filed February 20, 2013).

II. Legal Standards

A. Jurisdiction

The Tucker Act, as amended by the Administrative Dispute Resolution Act of

1996, codified in relevant part at 28 U.S.C. § 1491(b)(1) (2006), affords the United States

Court of Federal Claims

jurisdiction to render judgment on an action by an interested party objecting

to a solicitation by a Federal agency for bids or proposals for a proposed

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

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

proposed procurement[,] . . . [regardless of] whether suit is instituted before

or after the contract is awarded.

28 U.S.C. § 1491(b)(1). A plaintiff therefore does not have standing to bring a protest

action in this court unless it is an “interested party.” See id.; [* * *] Containers, Inc. v.

United States, 103 Fed. Cl. 471, 479 (2012). Because “standing is a jurisdictional

requirement, a protestor’s failure to establish standing precludes a ruling on the merits.”

Sci. Applications Int’l Corp. v. United States (Sci. Applications), 102 Fed. Cl. 644, 650

(2012) (internal quotation marks omitted).

To show that it is an “interested party” within the context of § 1491(b)(1), a

plaintiff must “establish that it (1) is an actual or prospective bidder, and (2) possesses the

requisite direct economic interest.” Rex Serv. Corp. v. United States, 448 F.3d 1305,

1307 (Fed. Cir. 2006); see also Am. Fed’n of Gov’t Emps., AFL-CIO v. United States,

258 F.3d 1294, 1302 (Fed. Cir. 2001) (defining an “interested party” as 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”). To establish that a plaintiff’s

“direct economic interest” is affected in the post-award bid protest context, a plaintiff

“must show it would have been ‘a qualified bidder,’ i.e., that it had a ‘substantial chance’

of being awarded the contract.” See Microdyne Outsourcing, Inc. v. United States, 72

Fed. Cl. 230, 232 (2006) (quoting Myers Investigative & Sec. Servs., Inc. v. United

States, 275 F.3d 1366, 1370-71 (Fed. Cir. 2002)).

B. Motion for Judgment on the Administrative Record

Motions for judgment on the administrative record are governed by Rule 52.1(c)

of the Rules of the United States Court of Federal Claims (RCFC). See RCFC 52.1(c). A

motion for judgment upon the administrative record is distinguishable from a motion for

summary judgment. See Bannum, Inc. v. United States, 404 F.3d 1346, 1355 (Fed. Cir.

2005); RCFC 52.1 rules committee notes (2006) (“Summary judgment standards are not

pertinent to judicial review upon an administrative record.”). When evaluating cross-

motions for judgment on the administrative record, the court considers “whether, given

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

evidence in the record.” DMS All-Star Joint Venture v. United States (DMS), 90 Fed. Cl.

653, 661 (2010) (citing Bannum, Inc., 404 F.3d at 1356-57). “The existence of a

question of fact thus neither precludes the granting of a motion for judgment on the

administrative record nor requires this court to conduct a full blown evidentiary

proceeding.” CRAssocs., Inc. v. United States, 102 Fed. Cl. 698, 710 (2011) (citing, inter

alia, Bannum, Inc., 404 F.3d at 1356), aff’d, 475 F. App’x 341 (Fed. Cir. 2012).

“The standards and criteria governing the court’s review of agency decisions vary

depending upon the specific law to be applied in particular cases.” RCFC 52.1 rules

committee notes (2006). Here, the standards of review and burdens of proof and

persuasion are set by the Administrative Procedure Act (APA), 5 U.S.C. § 706 (2006), as

interpreted and applied in binding precedent, see 28 U.S.C. § 1491(b)(4); NVT Techs.,

Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004); see also infra Part II.C

(describing APA standard).

C. Standard of Review

“A bid protest proceeds in two steps.” Bannum, Inc., 404 F.3d at 1351. The first

step is to demonstrate error, that is, to show that the agency acted in an arbitrary and

capricious manner, without a rational basis or contrary to law. See id. The second step is

to determine whether the error was prejudicial. Id.

1. The Plaintiff Must Establish Error

Under the APA, an agency’s decision shall be set aside if it is “arbitrary,

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

706(2)(A); see also Galen Med. Assocs., Inc. v. United States (Galen), 369 F.3d 1324,

1329 (Fed. Cir. 2004) (applying the APA standard). Under the arbitrary or capricious

standard of review, an agency’s decision must be sustained if it has a rational basis. See

Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co. (State

Farm), 463 U.S. 29, 43 (1983). “The arbitrary and capricious standard applicable here is

highly deferential. This standard requires a reviewing court to sustain an agency action

evincing rational reasoning and consideration of relevant factors.” Advanced Data

Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (citing Bowman

Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974)). In particular, the

reviewing court may not substitute its judgment for that of the agency. State Farm, 463

U.S. at 43. The question for the court is not whether the agency is correct or whether the

court would have reached the same conclusion as the agency, but whether there was a

reasonable basis for the agency’s actions. See Honeywell, Inc. v. United States, 870 F.2d

644, 648 (Fed. Cir. 1989) (“If the court finds a reasonable basis for the agency’s action,

the court should stay its hand even though it might, as an original proposition, have

reached a different conclusion as to the proper administration and application of the

procurement regulations.” (internal quotation marks omitted)).

In the procurement context, “a bid award may be set aside if either: (1) the

procurement official’s decision lacked a rational basis; or (2) the procurement procedure

involved a violation of regulation or procedure.” Impresa Construzioni Geom. Domenico

Garufi v. United States (Impresa), 238 F.3d 1324, 1332 (Fed. Cir. 2001). “[T]his

standard recognizes the possibility of a zone of acceptable results in a particular case and

requires only that the final decision reached by an agency be the result of a process which

‘consider[s] the relevant factors’ and is ‘within the bounds of reasoned decisionmaking.’”

CRAssocs. Inc., 102 Fed. Cl. at 710 (second alteration in original) (quoting Balt. Gas &

Electric Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87, 105 (1983)). When a

plaintiff challenges a procurement based upon a violation of statutes or regulations, “the

disappointed bidder must show ‘a clear and prejudicial violation of applicable statutes or

regulations.’” Impresa, 238 F.3d at 1333 (quoting Kentron Haw., Ltd. v. Warner, 480

F.2d 1166, 1169 (D.C. Cir. 1973)).

When a plaintiff challenges a procurement based upon a claim that a procurement

official’s decision is irrational, the court must determine whether the procuring agency

“provided a coherent and reasonable explanation of its exercise of discretion.” Id. at

1332-33 (internal quotation marks omitted). This entails an examination of whether the

procuring agency “‘entirely failed to consider an important aspect of the problem, offered

an explanation for its decision that runs counter to the evidence before the agency,’” or

reached a decision that was “‘so implausible that it could not be ascribed to a difference

in view or the product of agency expertise.’” Ala. Aircraft Indus., Inc.-Birmingham v.

United States (Ala. Aircraft), 586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting State Farm,

463 U.S. at 43). The scope of review under this standard is narrow and the court “should

intervene only when it is clearly determined that the agency’s determinations were

irrational or unreasonable.” Baird Corp. v. United States, 1 Cl. Ct. 662, 664 (1983).

“The wide discretion afforded contracting officers extends to a broad range of

procurement functions, including the determination of what constitutes an advantage over

other proposals.” One Largo Metro, LLC v. United States (One Largo), 109 Fed. Cl. 39,

74 (2013). The discretion afforded to contracting officers is greater in negotiated

procurements, as compared to sealed bid procurements, and the protester has an even

“heavier burden of proof.” L-3 Commc’ns EOTech, Inc. v. United States (L-3

Commc’ns I), 83 Fed. Cl. 643, 650 (2008), appeal dismissed by stipulation, 356 F. App’x

390 (Fed. Cir. 2009); cf. AR 71 (RFP) (indicating that the Solicitation used “Negotiated”

as opposed to “Sealed” bidding). A plaintiff’s burden is further “elevated where the

solicitation contemplates award on a best value basis.” Brooks Range Contract Servs.,

Inc. v. United States (Brooks Range), 101 Fed. Cl. 699, 707 (2011) (internal quotation

marks omitted); cf. AR 276 (RFP) (indicating that the Solicitation contemplated award on

a best value basis). “Thus, the protestor’s burden is especially heavy in negotiated, best

value procurements,” L-3 Commc’ns I, 83 Fed. Cl. at 650, where a contracting officer is

afforded a substantial degree of deference, and, accordingly, “[a]n agency’s contract

award is . . . least vulnerable to challenge when based upon a best value determination,”

PlanetSpace Inc. v. United States, 96 Fed. Cl. 119, 125 (2010) (citing Galen, 369 F.3d at

1330).

In determining whether an agency acted rationally, the court is also particularly

deferential to the agency’s technical evaluation. L-3 Commc’ns EOTech, Inc. v. United

States, 87 Fed. Cl. 656, 664 (2009); see E.W. Bliss Co. v. United States, 77 F.3d 445, 449

(Fed. Cir. 1996) (stating that “such matters as technical ratings” involve “the minutiae of

the procurement process . . . that a court will not second guess”). “This is because the

evaluation of proposals for their technical excellence or quality is a process that often

requires the special expertise of procurement officials, and thus reviewing courts give the

greatest deference possible to these determinations.” One Largo, 109 Fed. Cl. at 74

(internal quotation marks and alteration omitted).

2. The Plaintiff Must Establish Prejudice

In order to prevail in a bid protest, the plaintiff must demonstrate both that an error

occurred and that such error was prejudicial. Data Gen. Corp. v. Johnson, 78 F.3d 1556,

1562 (Fed. Cir. 1996); see Alfa Laval Separation, Inc. v. United States (Alfa Laval), 175

F.3d 1365, 1367 (Fed. Cir. 1999) (“To prevail in a bid protest, a protester must show a

significant, prejudicial error in the procurement process.”). If the court finds that there is

no error, there is no prejudice and the government’s decisions must be left undisturbed.

See Alfa Laval, 175 F.3d at 1367 (stating that to establish prejudice and prevail, a

protester must show that it had a substantial chance of receiving the award “but for that

error”). Furthermore, “non-prejudicial errors in a bid process do not automatically

invalidate a procurement.” Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1380

(Fed. Cir. 2009). “In the context of a post-award bid protest, the plaintiff must

demonstrate substantial prejudice by showing that there was a substantial chance it would

have been awarded the contract but for the agency’s error.” Brooks Range, 101 Fed. Cl.

at 707 (internal quotation marks omitted); see Bannum, Inc., 404 F.3d at 1353 (stating

that “[t]o establish ‘significant prejudice’ [the plaintiff] must show that there was a

‘substantial chance’ it would have received the contract award but for the [alleged]

errors” (quoting Info. Tech. & Applications Corp. v. United States (ITAC), 316 F.3d

1312, 1319 (Fed. Cir. 2003) and Alfa Laval, 175 F.3d at 1367)).

III. Discussion

A. Plaintiff Has Standing to Bring This Protest

Although the parties do not challenge plaintiff’s standing to bring this protest,

because “standing is a jurisdictional requirement,” Sci. Applications, 102 Fed. Cl. at 650,

the court addresses this issue sua sponte, John R. Sand & Gravel Co. v. United States,

457 F.3d 1345, 1353 (Fed. Cir. 2006) (“Under federal rules any court at any stage in the

proceedings may address jurisdictional issues. Thus, even if the issue is not properly

raised, this court sua sponte may consider all bases for the trial court’s jurisdiction.”

(internal quotation marks and alteration omitted)), aff’d, 552 U.S. 130 (2008). 13 For the

following reasons, the court finds that Mil-Mar is an interested party--that is, that Mil-

Mar is an actual bidder and possesses a direct economic interest in the award of the

Solicitation--and therefore has standing to bring this protest. Cf. Rex Serv. Corp., 448

F.3d at 1307 (describing requirements to be an “interested party”).

Mil-Mar is an actual bidder that has submitted a proposal in response to the

Solicitation, see supra Part I.B, and therefore meets the first prong of the interested party

test, cf. Orion Tech., Inc. v. United States, 102 Fed. Cl. 218, 226 (2011) (finding that the

first prong was met when there was “no dispute that [the] plaintiff [was] an actual

bidder”), aff’d, 704 F.3d 1344 (Fed. Cir. 2013); Chenega Mgmt., LLC. v. United States

(Chenega), 96 Fed. Cl. 556, 571 (2010) (finding that the plaintiff was an actual bidder

because it had submitted a proposal in response to the solicitation). With respect to the

second prong of this test, Mil-Mar has a direct economic interest in the award because

Mil-Mar is the incumbent contractor and, in fact, the only contractor ever to have

produced Hippos, AR 1767 (Initial PER), and received the highest ratings in both the

Production Capability and Experience factors, AR 1879 (SSDD). If the court were to

find in plaintiff’s favor and the Agency were obligated to reopen the procurement, see

Compl. ¶ 139 (requesting, inter alia, that the court order the Agency “to open discussions,

request a final proposal revision from all offerors, [and] re-evaluate proposals in

accordance with the Solicitation”); Pl.’s Mot. 37-38 (requesting, inter alia, that the court

order the Agency to “re-compete the contract”), the court finds that Mil-Mar would have

a substantial chance of receiving an award, cf. Impresa, 238 F.3d at 1334 (finding that the

plaintiff had standing where, assuming that its protest was successful, the plaintiff had a

substantial chance of being awarded the government’s re-solicitation of the contract);

13

The court addresses the issue of prejudice twice in bid protest disputes. DynCorp Int’l

LLC v. United States, 76 Fed. Cl. 528, 536 n.4 (2007). The court first “weigh[s] prejudice as it

pertains to standing, and then more thoroughly weigh[s] prejudice to determine whether a

plaintiff shall be afforded relief.” Id. “This first showing of prejudice to the protestor, in order

to prove standing, must occur before reaching the merits of the bid protest review.” Id. (citing

Info. Tech. & Applications Corp. v. United States (ITAC), 316 F.3d 1312, 1319 (Fed. Cir. 2003)

(stating that “because the question of prejudice goes directly to the question of standing, the

prejudice issue must be reached before addressing the merits”)). “[T]he prejudice requirement

for standing is less stringent than that required for success on the merits.” Allied Tech. Grp., Inc.

v. United States, 94 Fed. Cl. 16, 37 (2010), aff’d, 649 F.3d 1320 (Fed. Cir. 2011); see Global

Computer Enters., Inc. v. United States, 88 Fed. Cl. 350, 401 (2009) (“A prejudice determination

for the purpose of evaluating standing is a limited review that seeks minimum requisite evidence

necessary for plaintiff to demonstrate prejudice and therefore standing.” (internal quotation

marks omitted)), modified, 88 Fed. Cl. 466 (2009). These two prejudice requirements have been

viewed as “incongruent, although slightly overlapping, standards,” Dyonyx, L.P. v. United

States, 83 Fed. Cl. 460, 466 n.2 (2008), and the application of the two standards “may yield

different results,” Sys. Application & Techs., Inc. v. United States, 100 Fed. Cl. 687, 707 n.15

(2011), aff’d, 691 F.3d 1374 (Fed. Cir. 2012).

Esterhill Boat Serv. Corp. v. United States, 91 Fed. Cl. 483, 486 (2010) (“If the

allegations are correct and the Government were obligated to rebid the contracts, [the]

plaintiff could win with resubmitted proposals.”), appeal dismissed, 452 F. App’x 947

(Fed. Cir. 2010). The court is satisfied that Mil-Mar is an interested party within the

meaning of 28 U.S.C. § 1491(b)(1) and therefore has standing to bring this bid protest

action.

B. The Agency Treated the Offerors Equally and Rationally in

Its Evaluation of Experience

Plaintiff argues that the Agency’s evaluation of the offerors’ experience lacked a

rational basis and violated FAR 1.602-2, see Pl.’s Mot. 6, 15, which requires contracting

offers to “[e]nsure that contractors receive impartial, fair, and equitable treatment,” FAR

1.602-2 (2012). Specifically, plaintiff contends the Agency failed to treat offerors fairly

and impartially by “consistently and favorably consider[ing] experience submitted by

Entwistle that did not include information required by Section L.5.4[] of the RFP, but . . .

not extend[ing] the same treatment to the other offerors.” Pl.’s Mot. 6; see also Compl. ¶

128 (“[T]he Agency repeatedly treated Entwistle more favorably than other offerors and

considered its experience, despite the fact it was missing information required by the

RFP, but refused to consider . . . missing information required by the RFP when it was

offered by another offeror.”). Defendant counters that “[t]he agency’s differing

evaluations of offerors’ experience were rationally based on differences in the offerors’

proposals.” Def.’s Mot. 20; see also id. at 18 (“[T]he agency’s detailed assessments of

offerors’ experience were carefully tailored to respond to the varying content of each

proposal; differences in evaluations resulted from differences among the proposals.”).

Defendant also argues that, even if plaintiff could establish that the Agency treated the

offerors unequally and irrationally, plaintiff could not establish prejudice because none of

plaintiff’s unequal treatment claims actually involves Mil-Mar. Id. at 29.

As discussed above in Part I.A.1, Section L.5 of the Solicitation addressed the

Experience factor, under which offerors were to identify up to five “recent and relevant”

contracts that had been performed in the past three years that were “comparable in scope

to the requirements of this [Solicitation].” AR 264-65 (RFP). Section L.5.4 provided

that, for each of the contracts identified, proposals were to include the following

information: the contract numbers and types; contact information for the government or

commercial contracting authority, the technical representative of the government or

commercial contracting authority and the administrative and procuring contracting

officers; copies of the SOW provisions in each contract that demonstrated relevant

experience with the five SOW requirements (comparable items, technical manuals,

delivery, low temperature requirement and welding); and “[a] discussion of specific

similarities between these contract [SOWs] and the [SOW] herein.” Id. at 265. Section

L.5.4 further provided that “[f]ailure to provide the information requested under [Section]

L.5.4 . . . so that the Government can verify claimed experience may result in a

determination that your proposal is unacceptable and the elimination of your proposal

from consideration for award.” Id.

In this section, the court first provides background information regarding the

Agency’s evaluation of the offerors’ experience and then addresses the parties’

arguments. For the reasons stated below, the court finds that plaintiff has failed to show

that the Agency violated FAR 1.602-2 or otherwise acted without a rational basis, and

that, even if plaintiff could make this showing, plaintiff has failed to establish any

resulting prejudice.

1. The Experience of Entwistle, [* * *], [* * *] and [* * *]

Plaintiff claims that the Agency treated Entwistle more favorably than it treated

[* * *], [* * *] and [* * *], see Pl.’s Mot. 10-13, all offerors that, according to plaintiff,

“claimed experience in a manner similar to Entwistle,” see id. at 7. The court now

provides a brief summary of the information submitted by each of these offerors to

describe its experience.

The Experience Volume submitted by Entwistle consisted of approximately

twenty-nine pages and included descriptions of end products, excerpts from purchase

descriptions, and SOW provisions for one contract. 14 See AR 1699-1727 (Entwistle’s

Revised Experience Volume); see also AR 1757-59 (Entwistle’s Final Evaluation Report)

(summarizing the contracts submitted by Entwistle). The first contract Entwistle

identified was a contract for the production of Fuels Operational Readiness Capability

Equipment (FORCE) Systems 15 (FORCE contract), and, as supporting material,

Entwistle included a description of the program requirements, a list of specifications

common to both the FORCE contract and the Solicitation and several pages of excerpts

from the FORCE contract’s SOW and associated purchase descriptions. See AR 1702-12

(Entwistle’s Revised Experience Volume). The second contract Entwistle identified was

14

The record includes two Experience Volumes submitted by Entwistle, the original

Experience Volume dated May 21, 2012, see AR 1628-55 (Entwistle’s Original Experience

Volume), and a revised Experience Volume dated June 8, 2012, AR 1699-1727 (Entwistle’s

Revised Experience Volume). As discussed above, see supra Part I.B, Entwistle’s Revised

Experience Volume was submitted in response to a June 6, 2012 amendment to the Solicitation,

which “clarif[ied] certain matters related to projected delivery requirements,” AR 1878 (Source

Selection Decision Document (SSDD).

15

A Fuels Operational Readiness Capability Equipment (FORCE) System is “essentially

a Type 3 hydrant fuel delivery system” and “is designed to provide up to 2700 Gallons per

Minute . . . of fuel to multiple aircraft.” AR 1757 (Entwistle’s Final Evaluation Report).

a contract for the production of Tank Cleaning Vacuum Systems 16 (Vacuum contract),

and, as supporting material, Entwistle provided a summary of the principal components

of the end product and a list of similarities between the Solicitation and the Vacuum

contract--using excerpts from the associated purchase descriptions. See id. at 1713-18.

The third contract Entwistle identified was a contract for the production of Shipboard

Fire Fighting Vehicles 17 (Fire Fighting Vehicle contract) and, as supporting material,

Entwistle provided a description of the end product and identified three military standards

required by the Fire Fighting Vehicle contract. See id. at 1719-23. The fourth and fifth

contracts Entwistle identified were contracts of [* * *], “Entwistle’s proposed sub-

contractor for the water tank for the HIPPO system,” for the production of Potable Water

Tank Trucks and, as supporting material, Entwistle provided a description of the end

product. 18 See id. at 1724-27.

The Experience Volume submitted by [* * *] consisted of approximately twenty-

seven pages and included descriptions of [* * *]’s responsibilities and performance under

each contract and also included SOW provisions for two of its contracts. See AR 3473-

99 ([* * *]’s Experience Volume); see also AR 4302-03 ([* * *]’s Final Evaluation

Report) (summarizing the contracts submitted by [* * *]). For [* * *]’s first contract, a

contract for the production of containerized kitchens, 19 [* * *] included a one-page

discussion that primarily focused on [* * *]’s quality of performance and ability to foster

working relationships with customers, engineers and contracting officers. See AR 3481-

82 ([* * *]’s Experience Volume). For [* * *]’s second contract, a contract for the

production of Reverse Osmosis Water Purification Units (ROWPU contract), [* * *]

included an excerpt from the ROWPU contract’s SOW and a brief description of [* * *]’s

responsibilities and delivery requirements under the ROWPU contract. See id. at 3482-

16

“The tank cleaning vacuum system is a rugged piece of equipment” that “remove[s] all

types of oily water and sludge from bilges, lubricating oil tanks and fuel tanks during cleaning

operations, while maintaining a constant suction on bilges.” AR 1714 (Entwistle’s Revised

Experience Volume).

17

“The Shipboard Fire Fighting Vehicle is a self-propelled, self[-]contained all weather

fire fighting vehicle. It is used on aircraft carriers and amphibious assault ships to extinguish a

fire or limit the severity of the fire until other systems can be activated.” Id. at 1720.

18

Entwistle also included an excerpt from a military performance specification for one

of the [* * *] contracts, see id. at 1726, but the SSEB found the application of this specification

to the Solicitation questionable and, “[a]s a result, [Entwistle] was not accorded credit for the

specification excerpts, and [was] assessed as having not provided verification of effort for this

contract,” AR 1760 (Entwistle’s Final Evaluation Report).

19

Containerized kitchens are “complex modified [International Organization for

Standardization (ISO)] container system[s].” AR 3481 ([* * *]’s Experience Volume).

83. For [* * *]’s third contract, a contract for the production of shower facilities and

water heaters, [* * *] included a brief description of the product and an excerpt from a

“Contractor Performance Assessment Report.” See id. at 3484-85. For [* * *]’s fourth

contract, a contract for the production of shower facilities, [* * *] included a one-

paragraph description of [* * *]’s responsibilities and performance under the contract.

See id. at 3485. Finally, for [* * *]’s fifth contract, a contract for the production of

Expeditionary Tricon Systems (Tricon contract), 20 [* * *] included approximately twelve

pages from the Tricon contract’s SOW, id. at 3487-99, a brief description of the product

and a few paragraphs describing [* * *]’s responsibilities and performance under the

Tricon contract. See id. at 3486-87.

The Experience Volume submitted by [* * *] consisted of approximately eight

pages and focused primarily on describing the end product of each contract. See AR

4241-48 ([* * *]’s Experience Volume); see also AR 4320-22 ([* * *]’s Final Evaluation

Report) (summarizing the contracts submitted by [* * *]). 21 For [* * *]’s first contract, a

contract for the production C-5 Isochronal Maintenance Stands, 22 [* * *] provided a brief

description of the end product and a brief reference to the welding requirements. See AR

4242-43 ([* * *]’s Experience Volume). For [* * *]’s second and third contracts,

contracts for the production of 2,000 gallon and 4,000 gallon fuel tanks, [* * *] provided

a brief description of the fuel tanks to be produced under each contract and noted that, for

both contracts, “[t]he tanks meet ISO requirements for shipping containers.” See id. at

4244, 4246. For [* * *]’s fourth contract, a contract for the production of Multi-Class

DMD Complexes, 23 [* * *] provided a half-page description of the end product and

[* * *]’s responsibilities under the contract and also noted that “certified welders were

used to perform the . . . stainless steel welding.” See id. at 4245.

20

Expeditionary Tricon Systems consist of shipping containers that house a shower,

latrine, laundry and a kitchen. Id. at 3486.

21

The court describes only the four contracts that the SSEB considered in its evaluation

of [* * *]’s experience. See AR 4320-22 ([* * *]’s Final Evaluation Report). The fifth

“contract” that [* * *] identified actually consisted of several contracts, see AR 4247 ([* * *]’s

Experience Volume) (listing eight contract numbers), and the SSEB refused to give [* * *] credit

for this experience “because the multiple contracts cited result[ed] in more than five contracts

being identified in the proposal, exceeding the number allowed per Section L.5.1 of the [RFP],”

AR 4322 ([* * *]’s Final Evaluation Report).

22

“C-5 Isochronal Maintenance Stands supply personnel access to the wings, fuselage,

and engines of the C-5 aircraft.” AR 4242 ([* * *]’s Experience Volume).

23

Multi-Class DMD Complexes “are used in support of the [United States] Navy nuclear

submarine overhaul program.” Id. at 4245 (capitalization omitted).

The Experience Volume submitted by [* * *] consisted of approximately

seventeen pages and is considerably less detailed than those of the other offerors. See

AR 3698-3714 ([* * *]’s Experience Volume); see also AR 4339-40 ([* * *]’s Final

Evaluation Report) (summarizing the contracts submitted by [* * *]). 24 The first contract

identified by [* * *] was a contract for the production of trailers and, as support, [* * *]

included one sentence that described the welding requirements under the contract and a

copy of an ISO certificate awarded to [* * *] for the “[d]esign and manufacture of

medium and heavy duty trailers.” See AR 3702-04 ([* * *]’s Experience Volume). The

second contract identified by [* * *] was a contract awarded to a proposed subcontractor

for the production of diesel fuel trucks, and, as support, [* * *] included a few sentences

that described the quality of the subcontractor’s performance under the contract. See id.

at 3709-10. The third contract [* * *] identified was a contract awarded to a proposed

subcontractor for the production of technical manuals; as support for this contract, [* * *]

included approximately three pages of information about the subcontractor’s experience

developing technical manuals. See id. at 3711-14.

2. The Agency’s Evaluation of the Experience of Entwistle, [* * *], [* * *]

and [* * *]

A summary of the SSEB’s assessment of the risk associated with the prior

experience of Entwistle, [* * *], [* * *], and [* * *] is below:

Overall Comparable Technical Low Temp

Offeror Delivery Welding

Experience Items Manuals Requirement

Entwistle Low Very low Moderate Moderate Low Moderate

24

The court describes only the three contracts that the SSEB considered in its evaluation

of [* * *]’s experience. See AR 4341 ([* * *]’s Final Evaluation Report). The two “contracts”

that the SSEB refused to consider, see id., included a contract awarded to proposed subcontractor

Brenner Tank, LLC (Brenner Tank) for the production of stainless steel water tanks (Brenner

Tank contract) and purchase orders awarded to Brenner Tank for the production of stainless steel

water trailers (Brenner Tank purchase orders), see AR 3705-07 ([* * *]’s Experience Volume).

The SSEB did not credit [* * *] with experience under the Brenner Tank contract “because the

resultant contract number under which this asserted effort was performed is unknown,” AR 4341

([* * *]’s Final Evaluation Report), and therefore could not be verified, id. at 4346; see AR 1903

(SSDD) (stating that the Brenner Tank contract “was not taken into consideration based on the

inability of the evaluators to verify that the solicitation resulted in a contract being awarded to”

the prime contractor identified by [* * *]). The SSEB also refused to credit [* * *] with

experience under the Brenner Tank purchase orders “because the multiple purchase orders

referenced would [have] result[ed] in more than five contracts being identified in the proposal,

exceeding the number allowed per Section L.5.1 of the [RFP].” AR 4341 ([* * *]’s Final

Evaluation Report); see AR 1903 (SSDD) (stating that, because [* * *] did not provide any

supporting information to verify the Brenner Tank purchase orders, “it was impossible for the

evaluators . . . to identify the specific experience related to any one of the cited purchase orders

so that they could be evaluated without violating the five-contract limit”).

[* * *] Moderate Moderate Low risk Moderate High High

[* * *] High Moderate High High High High

[* * *] High High High Moderate High High

See AR 1763-64 (Entwistle’s Final Evaluation Report); AR 4307 ([* * *]’s Final

Evaluation Report); AR 4326-27 ([* * *]’s Final Evaluation Report); AR 4345 ([* * *]’s

Final Evaluation Report); cf. supra note 8 (explaining the Agency’s adjectival ratings of

the Experience factor). As noted above in Part I.E, the SSA adopted the ratings assigned

by the SSEB. See supra Part I.E.

In its evaluation of Entwistle’s Experience Volume, the SSEB identified one

strength and three weaknesses associated with Entwistle’s past experience. AR 1764

(Entwistle’s Final Evaluation Report). The SSEB considered as a strength Entwistle’s

“experience supplying systems that are collectively very comparable to the Hippo,

involving essentially the same scope and magnitude of effort and level of complexity as

required by this solicitation.” Id.; see also AR 1883 (SSDD) (agreeing with the SSEB’s

“very low risk assessment” for Entwistle “because experience with the major elements of

a HIPPO system is a larger risk mitigator than the experience with integration of the

elements into a complete system” and stating that “[t]he complexity of the HIPPO lies in

the major elements”). 25 As a weakness, the SSEB found that although [* * *] had

25

Plaintiff argues that the Agency’s determination that Entwistle has experience

manufacturing products that “collectively involve the major elements of sanitary liquid handling

and storage systems . . . is arbitrary and capricious.” Pl.’s Mot. 13 (internal quotation marks

omitted). As support, plaintiff claims that “Entwistle had no welding experience, offered no

experience making the ISO frame and relied on” its proposed subcontractor, [* * *], “with 1

month of production quantities of 30 items to establish its delivery experience,” while “Entwistle

itself had no comparable delivery experience.” Id. at 13-14.

As an initial matter, the court agrees with the United States (the government or

defendant) that plaintiff’s arguments are “inaccurate and unsupported.” See Def.’s Mot. 31.

First, the record does not support plaintiff’s contention that “Entwistle had no welding

experience.” See infra note 26 (discussing Entwistle’s welding experience); cf. Pl.’s Mot. 13.

Second, with respect to the [* * *] contract to which plaintiff refers, the SSEB determined that

[* * *] had six months of experience delivering twenty to thirty products per month, see AR

1761 (Entwistle’s Final Evaluation Report), not one month of delivery experience as plaintiff

contends, cf. Pl.’s Mot. 14. Moreover, as defendant correctly notes, even if [* * *] did have only

one month of experience delivering thirty items, plaintiff “has failed to explain why it is per se

unreasonable for the agency to consider that experience relevant.” See Def.’s Mot. 31; cf. AR 72

(RFP) (indicating that the offeror selected for award would be expected to manufacture and

deliver up to an estimated thirty-five Hippos a month); AR 1883 (SSDD) (same). Finally, the

Solicitation did not require offerors to submit information that suggested they had experience

manufacturing ISO frames, see AR 264-65 (RFP) (listing the information that offerors were to

submit in support of their recent and relevant experience), so the fact that the Agency did not

penalize Entwistle for not providing evidence of this experience is not unreasonable.

experience delivering “sanitary liquid handling and storage system[s] at a rate very close

to that required by the solicitation, the end item produced under the contract is . . . only

somewhat comparable in scope to the Hippo.” AR 1764 (Entwistle’s Final Evaluation

Report). The SSEB also identified as weaknesses Entwistle’s lack of experience in

developing technical manuals of the type required by the Solicitation and in welding

stainless steel in accordance with the standards required by the Solicitation. Id.

The SSEB identified zero strengths and four weaknesses associated with [* * *]’s

past experience. AR 4308 ([* * *]’s Final Evaluation Report). The SSEB found that

[* * *]’s “[c]ited experience references comparable items that involve only some of the

scope and magnitude of effort and complexities required by this solicitation.” Id. The

SSEB also found that [* * *] failed to demonstrate experience delivering products “with a

complexity comparable to the Hippo at the rate required by the solicitation.” Id. The

SSEB further found that [* * *] lacked experience in manufacturing products that could

meet the low temperature requirement and in welding stainless steel in accordance with

the standards required by the Solicitation. Id.

The SSEB identified zero strengths and several weaknesses associated with the

past experience of both [* * *] and [* * *]. See AR 4327 ([* * *]’s Final Evaluation

Report); AR 4346 ([* * *]’s Final Evaluation Report). The SSEB assigned [* * *] and

[* * *] five weaknesses each for failing to provide “verifiable experience” with respect to

any of the Solicitation’s five SOW requirements. See AR 4327 ([* * *]’s Final

Moreover, the court finds that the Agency acted well within its discretion when it

determined that Entwistle “has experience supplying systems that are collectively very

comparable to the Hippo,” see AR 1764 (Entwistle’s Final Evaluation Report), and that plaintiff

has failed to meet the heavy burden of proof necessary to show that this determination lacked a

rational basis, cf. L-3 Commc’ns EOTech, Inc. v. United States, 83 Fed. Cl. 643, 650 (2008)

(“[T]he protestor’s burden [of proof] is especially heavy in negotiated, best value

procurements.”), appeal dismissed by stipulation, 356 F. App’x 390 (Fed. Cir. 2009); Banknote

Corp. of Am. v. United States, 56 Fed. Cl. 377, 384 (2003) (determining that “naked claims” of

disagreement with evaluations, “no matter how vigorous, fall far short of meeting the heavy

burden of demonstrating that the findings in question were the product of an irrational process

and hence were arbitrary and capricious”), aff’d, 365 F.3d 1345 (Fed. Cir. 2004). The court

defers to the Agency’s technical determination that--despite the fact that Entwistle lacked

“experience with integration of the [Hippo] elements into a complete system”--one of the

strengths of Entwistle’s proposal was its collective “experience with the major elements of a

HIPPO system.” See AR 1883 (SSDD); cf. One Largo Metro, LLC v. United States, 109 Fed.

Cl. 39, 74 (2013) (“[T]he evaluation of proposals for their technical excellence or quality is a

process that often requires the special expertise of procurement officials, and thus reviewing

courts give the greatest deference possible to these determinations.” (internal quotation marks

omitted)). Absent a finding that “the agency’s determinations were irrational or unreasonable,”

the court will “not substitute its judgment . . . for that of the agency.” Baird Corp. v. United

States, 1 Cl. Ct. 662, 664 (1983).

Evaluation Report); AR 4346 ([* * *]’s Final Evaluation Report). The SSEB assigned an

additional weakness to [* * *] for failing to provide “actual contract SOWs . . . to

describe previous experience” and failing to discuss the similarities between its five most

recent and relevant contracts and the “current solicitation.” AR 4327 ([* * *]’s Final

Evaluation Report).

3. The Agency Treated Offerors Equally and Rationally in Its Evaluation of

Experience

Plaintiff argues that the Agency violated FAR 1.602-2 and “[a]bused its discretion

by treating the offerors unequally” in its evaluation of experience. See Pl.’s Resp. 8; Pl.’s

Mot. 6 (arguing that “[t]he Agency’s evaluation of the offerors’ proposals violated FAR

1.602-1”), 15 (similar); cf. FAR 1.602-2 (providing that contracting officers must

“[e]nsure that contractors receive impartial, fair, and equitable treatment”). According to

plaintiff, “the Agency was unable to verify whether Entwistle’s claimed experience was

actually relevant to the Hippo RFP,” given the limited amount of information provided by

Entwistle, Pl.’s Mot. 8, and that, unlike its assessment of other offerors, the Agency did

not consider Entwistle’s failure to verify its experience a weakness, id. at 9. Plaintiff

contends that the Agency did not extend the same type of treatment to the other offerors

“who claimed experience in a manner similar to Entwistle,” id. at 7; see id. at 14

(claiming that other offerors were “assigned negative risk ratings or a weakness when

their proposals lacked verifiable information”), and that, “[i]nstead, the Agency

consistently disregarded the RFP’s requirements when it evaluated Entwistle’s proposal,

which resulted in Entwistle receiving artificially inflated ratings and ultimately being

included in the best value trade-off,” id. at 9.

Defendant responds that “the agency had applied precisely the same standard--

whether each offeror had supplied sufficient information to permit verification of claimed

experience--to each proposal, and reached different ratings for different offerors only as a

result of significant differences between proposals.” Def.’s Reply 2 (internal quotation

marks and alteration omitted); see Def.’s Mot. 18 (arguing that any “differences in

evaluations resulted from differences among the proposals”). According to defendant,

“because ascertaining the nature of an offeror’s experience--rather than policing strict

compliance with every single instruction in the solicitation--was the agency’s goal, the

agency did not automatically penalize an offeror simply for failing to submit a [SOW].”

Def.’s Mot. 23. Defendant claims that the Agency “gave offerors credit for relevant

experience that was described with reasonable specificity” regardless of whether it came

“in the form of a [SOW] excerpt.” Id.; see id. at 21 (stating that “the agency did not

penalize any offeror for failing to submit a [SOW] from a given contract so long as the

offeror submitted sufficient other information to make clear the nature of the work

involved”); accord Intervenor’s Mot. 20 (stating that “the Agency did not eliminate any

of the [Experience Volumes] from consideration for award because it failed to include

copies of [SOWs], but, rather, the agency evaluated each one in light of and utilizing the

information provided”).

“[I]t is beyond peradventure that a contracting agency must treat all offerors

equally, evaluating proposals evenhandedly against common requirements and evaluation

criteria.” Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377, 383 (2003), aff’d,

365 F.3d 1345 (Fed. Cir. 2004); cf. Chenega, 96 Fed. Cl. at 585 (“This court has held that

unequal treatment claims are the quintessential example of conduct which lacks a rational

basis.” (internal quotation marks and emphasis omitted)). “Equal treatment, however,

does not require that all proposals be treated the same.” Chenega, 96 Fed. Cl. at

585 (citing FAR 1.102-2(c)(3) (“All contractors and prospective contractors shall be

treated fairly and impartially but need not be treated the same.”)).

Plaintiff’s argument that the Agency treated the offerors unequally, see Pl.’s Mot.

12, simply is not supported by the administrative record. 26 First, the administrative

26

Moreover, the court finds that many of plaintiff’s claims in support of this argument,

see Pl.’s Mot. 10-14; Pl.’s Resp. to Def.’s Mot. for J. upon the Admin. R. (Pl.’s Resp.), Dkt. No.

31, at 5-6, are misleading and based on incomplete portions of the administrative record. To

illustrate, the court addresses plaintiff’s arguments involving the Agency’s evaluation of the

welding requirement.

Plaintiff alleges that the Agency assigned [* * *] a high risk rating for welding because

“[[* * *]’s] experience did not explicitly address welding to [American Welding Society (AWS)

Standard] D18.3./18.3M,” and that “the Agency assessed Entwistle as only ‘Moderate Risk,’

even though ‘none of . . . [Entwistle’s] referenced experience explicitly addressed welding

stainless steel in accordance with AWS D18.3/18.3M.’” Pl.’s Mot. 10 (second alteration in

original) (emphasis omitted) (quoting AR 1763 (Entwistle’s Final Evaluation Report)). Plaintiff

fails to mention, however, that the full extent of [* * *]’s references to welding consisted of

unsupported assertions that three of its contracts required “stainless steel welding.” See AR

3481-82, 3486 ([* * *]’s Experience Volume); see also AR 1891 (SSDD) (stating that [* * *]

received a high risk rating “because it simply mentioned stainless steel welding” without

providing any “other scope of work documentation . . . to substantiate the [* * *] proposed

experience”).

By contrast, Entwistle included actual excerpts of the Scope of Work (SOW)/purchase

description from its contract for the production of FORCE Systems (FORCE contract), which

specifically addressed the welding requirements of the FORCE contract. See AR 1710

(Entwistle’s Revised Experience Volume) (“Piping shall be welded IAW ASME B31.3. All

welding procedures and welder[s] employed shall be certified IAW ASME Boiler and Pressure

Vessel Code, Section IX. Steel shall be welded IAW AWS D1.1.”). Entwistle also included

purchase description excerpts from its contract for the production of Tank Cleaning Vacuum

Systems (Vacuum contract), which implicated the welding codes associated with the

manufacturing standards under the Vacuum contract. See id. at 1716 (stating that the Tank

Cleaning Vacuum Systems “are manufactured in accordance [with] A[SM]E-BPVC Section

record does not support plaintiff’s assertion that [* * *], [* * *] and [* * *] all “claimed

VIII, Div.”). Given this information, the SSEB considered Entwistle’s welding experience under

both the FORCE contract and the Vacuum contract “somewhat relevant” and rated Entwistle as

“moderate risk.” See AR 1763 (Entwistle’s Final Evaluation Report) (capitalization omitted).

Specifically, the SSEB found the FORCE contract “somewhat relevant because it involves the

welding of piping to ASME B31.3, . . . welders and welding procedures that are certified to

ASME BPVC Section IX[,] [and] . . . requires steel [to] be welded to AWS D1.1.” Id. The

SSEB also found the Vacuum contract “somewhat relevant because it requires tanks [to] be

manufactured in accordance with the ASME BPVC,” and, according to the SSEB, “[w]elding to

these codes equates to meeting some of the magnitude of effort and complexities required by this

solicitation.” Id. Given the foregoing, the Agency acted with a rational basis when it rated the

welding experience of Entwistle as moderate risk and the welding experience of [* * *] as high

risk. Cf. E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996) (stating that “such

matters as technical ratings” involve “the minutiae of the procurement process . . . that a court

will not second guess”). In the light of the foregoing, the court finds that the Agency did not

hold Entwistle to a different standard than [* * *].

Plaintiff also claims that the Agency considered relevant Entwistle’s experience welding

to the AWS D1.1 standard but that the Agency ignored similar welding experience of [* * *] and

[* * *]. See Pl.’s Mot. 12 (“[U]nless you were Entwistle, the Agency was not interested in your

ability to weld to AWS D.1.1.”). As support, plaintiff claims that the Agency considered

Entwistle’s FORCE contract “to be somewhat relevant because it required steel to be welded to

AWS D1.1,” id. at 11, which “is contrary to what the Agency said about [* * *]’s experience

welding to AWS D1.1 and D1.2,” id. at 12. Plaintiff misconstrues the facts.

As noted above, the Agency found the FORCE contract somewhat relevant because, in

addition to requiring steel to be welded to AWS D1.1, it also found that the FORCE contract

“involve[d] the welding of piping to ASME B31.3, and welders and welding procedures that are

certified to ASME BPVC Section IX.” AR 1763 (Entwistle’s Final Evaluation Report).

Moreover, unlike Entwistle’s provision of excerpts from the SOW or purchase description of the

FORCE contract, see AR 1710 (Entwistle’s Revised Experience Volume), both [* * *] and

[* * *] simply asserted, without support, that one of their contracts required welding to the AWS

D1.1 standard, see AR 4243 ([* * *]’s Experience Volume) (stating that [* * *]’s contract for C-

5 Isochronal Maintenance Stands required “[w]elding per AWS D1.1”); AR 3702 ([* * *]’s

Experience Volume) (stating that [* * *]’s contract for the production of trailers “was welded

I.A.W. AWS.D1.1”). The Agency did not find the welding experience of either [* * *] or [* * *]

relevant because neither provided information that verified its experience. See AR 4326

([* * *]’s Final Evaluation Report); AR 4344 ([* * *]’s Final Evaluation Report); AR 1884, 1905

(SSDD) (stating that [* * *]’s and [* * *]’s “assertions regarding [welding] experience lacked

meaningful credibility where [they] failed to include [SOW] or paraphrased/quoted contract

provision extracts in [their] proposal[s]”). Given the foregoing, the court finds that the Agency

acted reasonably and well within its discretion when it gave Entwistle a welding experience

rating of moderate risk, while rating the welding experiences of both [* * *] and [* * *] as high

risk. Cf. E.W. Bliss Co., 77 F.3d at 449. Accordingly, the court finds that the Agency did not

hold Entwistle to a different standard than [* * *] or [* * *].

experience in a manner similar to Entwistle.” Cf. Pl.’s Mot. 7. In fact, these “offerors

supplied the agency with widely varying amounts of information to document their

experience.” See Def.’s Mot. 25; supra Part III.B.1 (summarizing the information

provided by each offeror).

Moreover, plaintiff has failed to establish that the Agency addressed the varying

amounts information provided by the offerors in an unfair or irrational manner. When an

offeror provided verifiable experience, regardless of whether that included excerpts of

SOWs or a discussion of similarities between these relevant SOWs and the Solicitation’s

SOW, the SSEB credited the offeror with that experience and did so in a fair and rational

manner. See, e.g., AR 1760 (Entwistle’s Final Evaluation Report) (crediting Entwistle

for its inclusion of “purchase description requirements” for the Vacuum contract under

the comparable items consideration); AR 4305 ([* * *]’s Final Evaluation Report)

(crediting [* * *] for “[a] number of paraphrased system requirements” that [* * *]

provided in support of its comparable item experience). Similarly, when an offeror failed

to provide verifiable experience, the SSEB downgraded the offeror’s ratings fairly and

rationally. See, e.g., AR 1760-61 (Entwistle’s Final Evaluation Report) (downgrading

Entwistle’s technical manual rating because of the limited information Entwistle provided

regarding the technical manuals supplied under the FORCE contract); AR 4324 ([* * *]’s

Final Evaluation Report) (assigning [* * *] a high risk technical manual rating because of

[* * *]’s failure to provide supporting documentation); see also supra notes 18 (noting the

Agency’s refusal to credit Entwistle with experience associated with a military

specification because the application of the specification to the Solicitation was

considered questionable), 24 (noting the Agency’s refusal to credit [* * *] with

experience associated with a contract because the award of the contract could not be

verified).

Plaintiff has failed to meet the heavy burden required to show that the Agency

violated FAR 1.602-2 and treated Entwistle, [* * *], [* * *] and [* * *] unequally in its

evaluation of experience. Cf. FAR 1.602-2 (providing that contracting officers must

“[e]nsure that contractors receive impartial, fair, and equitable treatment”); L-3

Commc’ns I, 83 Fed. Cl. at 650 (“[T]he protestor’s burden [of proof] is especially heavy

in negotiated, best value procurements.”). To the extent that the Agency “assessed

[Entwistle] more favorable risk ratings than other offerors,” see Pl.’s Resp. 8, the court

finds that the Agency’s evaluation of the offerors’ experience was rational and reasonable

and that the Agency “provided a coherent and reasonable explanation of its exercise of

discretion,” cf. Impresa, 238 F.3d at 1332-33 (internal quotation marks omitted). As

intervenor points out, “[a]ssessing the significance of the differences in each offeror’s

experience, as reflected in its proposal, is the heart of the proposal evaluation process

entrusted to the Agency.” See Intervenor’s Mot. 22; see also id. at 23 (“The fact that

Plaintiff disagrees with the judgment reached by the SSEB in this matter . . . falls far

short of meeting Plaintiff’s heavy burden to set aside the Agency’s technical evaluation

in this negotiated, best value procurement.”); cf. E.W. Bliss Co., 77 F.3d at 449 (stating

that “such matters as technical ratings” involve “the minutiae of the procurement

process . . . that a court will not second guess”); One Largo, 109 Fed. Cl. at 74 (stating

that “the evaluation of proposals for their technical excellence or quality is a process that

often requires the special expertise of procurement officials, and thus reviewing courts

give the greatest deference possible to these determinations” (alteration and internal

quotation marks omitted)). 27

27

In its Response, plaintiff appears to argue, in the alternative, that the Solicitation

required offerors to provide copies of SOWs and that the “Agency’s waiver” of this requirement

for “some offerors,” that is, Entwistle, [* * *], [* * *] and [* * *]--but not for Mil-Mar--“was

arbitrary, capricious and resulted in disparate treatment.” Pl.’s Resp. 1; see id. at 1-2 (arguing

that a “plain reading of the RFP” suggests that a failure to submit copies of SOWs equates to “a

failure to submit sufficient information about prior experience” (internal quotation marks

omitted)); cf. Def.’s Reply in Supp. of Its Cross-Mot. for J. upon the Admin. R. (Def.’s Reply),

Dkt. No. 34, at 2 (claiming that, after defendant “made [the] showing” that the Agency

evenhandedly “assess[ed] the sufficiency of information provided about offerors’ experience,”

plaintiff “shifted its argument[]” and asserted that this approach to evaluating experience was

prohibited under the Solicitation). According to plaintiff, “the Agency’s use of an evaluation

methodology different from what was stated in the RFP benefited Entwistle and prejudiced Mil-

Mar,” Pl.’s Resp. 7, because Mil-Mar, unlike “most of the competition,” submitted a “100%

compliant proposal,” id. at 6-7.

As plaintiff points out, see Pl.’s Mot. 6, most of the offerors failed to include, for each of

the recent and relevant contracts identified, copies of actual SOW provisions, see Part III.B.1

(discussing offerors’ prior contract submissions). Under Section L.5.4 of the Solicitation, the

Agency could have found these proposals “unacceptable” and eliminated them “from

consideration for award.” See AR 265 (RFP). However, rather than “eliminat[ing] most of the

competition,” plaintiff argues that the Agency “tried to evaluate offerors based on some ad hoc

and unsubstantiated methodology that was not in accord with the RFP.” Pl.’s Resp. 7; see id. at

2 (arguing that the Solicitation does not permit the Agency to rely on “this Government-

proffered alternative method of evaluating claimed experience,” that is, submission of “sufficient

other information about . . . prior experience” (internal quotation marks omitted)).

Defendant counters, and the court agrees, that “the agency’s assessment of experience

was entirely consistent with the terms of the solicitation.” Def.’s Reply 4; see Tr. 60:24-61:5

(Barbara E. Thomas (Ms. Thomas)) (“Nothing in the solicitation required that the agency could

only look at [SOWs]. Nothing said that the agency can’t look at other types of information about

contracts that are submitted, and nothing in the solicitation said the agency must refuse to give

credit for experience on a contract for which an offeror didn’t submit a [SOW].”). Section L.5.4

of the Solicitation provided that “[f]ailure to provide the information requested under [Section]

L.5.4”--which included copies of actual SOW provisions--“so that the Government can verify

claimed experience may result in a determination that” the offeror’s proposal was unacceptable

and, therefore, eliminated “from consideration for award.” AR 265 (RFP) (emphasis added); see

also id. at 276 (providing that the Agency “may” reject a proposal if the proposal “provides some

data but omits significant material data and information required by Section L”). Defendant

argues that, “by providing that a proposal ‘may’ be found unacceptable if it fails to include the

Finally, defendant argues that even if plaintiff could establish that the Agency

treated Entwistle more favorably than [* * *], [* * *] and [* * *], plaintiff could not

establish prejudice because none of plaintiff’s unequal treatment claims actually involve

Mil-Mar. Def.’s Mot. 29; see id. at 30 (“Mil-Mar has failed to demonstrate that the

absence of the supposedly disparate treatment it describes would have had any effect on

its own chances of winning the Hippo contract.”); cf. Data Gen. Corp., 78 F.3d at 1562

(stating that, in order to prevail in a bid protest, the plaintiff must demonstrate both that

an error occurred and that the error was prejudicial). Defendant contends that plaintiff’s

“arguments therefore differ drastically from those of protestors who have successfully

presented disparate treatment arguments” because, “[i]n those cases, the protestor

typically argued that its own proposal had been subject to disparate treatment.” Def.’s

Mot. 29-30 (citing BayFirst Solutions, LLC v. United States, 102 Fed. Cl. 677, 690-91

(2012) and Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243, 273-74 (2004), modified, 63

Fed. Cl. 141 (2004)).

Plaintiff contends that if the Agency had treated all offerors equally, Entwistle

would have received “higher risk ratings for several of the considerations, which would

have materially altered the Agency’s best value tradeoff,” and that “Mil-Mar, with the

highest rating and a competitive price, would have had a substantial chance of receiving

the award.” Pl.’s Mot. 15; see also Pl.’s Resp. 7 (“But for Entwistle’s artificially inflated

ratings, the Government’s trade off would have been between Mil-Mar and other

similarly priced offerors and there is a substantial chance Mil-Mar would have been

awarded the contract.”). Defendant counters that plaintiff fails to consider that, but for

information requested, the solicitation contemplates that . . . a proposal may be found acceptable

even though it fails to include some requested information.” Def.’s Reply 3.

Defendant’s argument is further supported by Section M.3.5 of the Solicitation, which

provides that the successful offeror’s proposal must “meet[] all the material requirements of this

solicitation.” AR 277 (RFP) (emphasis added). “As that language indicates, the agency

expressly anticipated, and the solicitation explained, that even the ultimately successful offeror

might not meet every requirement of the solicitation.” Def.’s Reply 3; see Tr. 62:17-20 (Ms.

Thomas) (“[The solicitation] expressly contemplated that even if an offeror didn’t submit all the

information that the solicitation said was ‘required’, that they still might win the award.”).

Accordingly, the court does not consider the Agency’s decision to rely on other information to

verify claimed experience as “a failure to follow the terms of its own Solicitation,” cf. Hunt

Bldg. Co. v. United States, 61 Fed. Cl. 243, 273 (2004) (“The agency’s failure to follow the

terms of its own Solicitation and selection of an offeror based upon different requirements than

those imposed upon the only other offeror are quintessential examples of conduct which lacks a

rational basis.”), modified, 63 Fed. Cl. 141 (2004); infra note 33 (noting that although the

Solicitation appears to require certain information in one section, it affords the Agency flexibility

regarding that information in another).

the alleged disparate treatment, the Agency would have assigned the other offerors lower

risk ratings. See Def.’s Mot. 30.

The court finds that plaintiff’s attenuated argument does not support a showing of

“substantial prejudice.” Cf. Brooks Range, 101 Fed. Cl. at 707 (“In the context of a post-

award bid protest, the plaintiff must demonstrate substantial prejudice by showing that

there was a substantial chance it would have been awarded the contract but for the

agency’s error.” (internal quotation marks omitted)). Plaintiff cites to no authority, and

the court is aware of none, that supports plaintiff’s argument that a party not subject to

the alleged unequal treatment claims can demonstrate prejudice. See Tr. 46:19-24

(colloquy between the court and Barbara Ann Duncombe (Ms. Duncombe)) (the court:

“[D]o you all have any authority . . . in support of a finding of unequal treatment when

the Plaintiff was not the subject [of the unequal treatment claims]?” Ms. Duncombe:

“No, Your Honor.”). Although plaintiff may be “looking to make some new case[]law,”

see Tr. 46:25 (Ms. Duncombe), the court is not similarly inclined.

C. The Agency Did Not Conduct Improper, Unequal Discussions

Plaintiff argues that the government engaged in exclusive discussions with

Entwistle that allowed Entwistle to revise its proposal to make it compliant with the terms

of the Solicitation. See Compl. ¶ 117; Pl.’s Resp. 9. Specifically, plaintiff contends that

two of the government’s requests for clarification and Entwistle’s responses (the two

exchanges) constituted unequal discussions in violation of FAR 15.306. See Pl.’s Mot.

17-20; cf. supra Part I.C (discussing the content of the two exchanges). Plaintiff further

contends that “[h]ad the Agency not entered into unequal discussions with Entwistle, it

would have concluded that it could not adequately evaluate Entwistle’s significantly

lower price for realism and would have rejected its offer.” Compl. ¶ 117; see Pl.’s Resp.

9 (claiming that the alleged discussions “help[ed] make [Entwistle’s] proposal compliant

with the RFP’s requirements”). Defendant counters that “[t]here is no reasonable basis

for concluding that these two exchanges constituted discussions,” Def.’s Mot. 33, and

that, “[e]ven if the agency’s exchanges with Entwistle had constituted discussions, . . .

Mil-Mar has not demonstrated that it was prejudiced,” id. at 34. For the following

reasons, the court finds that the two exchanges did not constitute discussions and that,

therefore, the Agency did not enter into unequal discussions with Entwistle. The court

further finds that, even if the two exchanges had constituted discussions, plaintiff has

failed to establish prejudice.

“In negotiated procurements, the procuring agency may engage in a wide range of

exchanges with offerors in order to facilitate the evaluation process and to permit the

agency to make an informed award decision.” Linc Gov’t Servs., LLC v. United States,

96 Fed. Cl. 672, 714 (2010) (citing FAR 15.306 and ITAC, 316 F.3d at 1320-23).

“Different exchanges are permitted under different circumstances and at various stages of

the procurement process.” Id. For example, “negotiations” are exchanges “that are

undertaken with the intent of allowing the offeror to revise its proposal,” and

“discussions” are negotiations that occur “after establishment of the competitive range”

in competitive acquisitions. FAR 15.306(d). “The primary objective of discussions is to

maximize the Government’s ability to obtain best value, based on the requirement and the

evaluation factors set forth in the solicitation.” FAR 15.306(d)(2); see ITAC, 316 F.3d at

1322 (“[W]hen discussions are opened, bidders have the opportunity to revise their

proposals, in order ‘to maximize the Government’s ability to obtain best value.’” (quoting

FAR 15.306(d)(2))). When an agency decides to hold discussions, they “must be

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

FAR 15.306(e) (providing that the government “shall not engage in conduct that . . .

[f]avors one offeror over another”).

Where, as here, see AR 276 (RFP), a solicitation provides “that the Government

intends to evaluate proposals and make award without discussions,” FAR 15.306(a)(3),

an agency may engage offerors in clarifications, see FAR 15.306(a). FAR 15.306(a)

defines clarifications as “limited exchanges,” FAR 15.306(a)(1), that are intended to give

offerors “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) or to resolve minor

or clerical errors,” FAR 15.306(a)(2). 28 Unlike discussions, which must be conducted

equally with all offerors within the competitive range, see FAR 15.306(d)(1), an agency

has the discretion to engage in clarifications with just one offeror, DynCorp Int’l LLC v.

United States (DynCorp), 76 Fed. Cl. 528, 540 (2007).

Section L.6.6 of the Solicitation provided that “the Government reserves the right,

as a clarification under FAR 15.306(a), to request additional or more detailed price

breakdown data to support its determination of price reasonableness.” AR 266 (RFP).

Although it is “[t]he actions of the parties, not the characterization by the agency, [that]

determine whether discussions have been held,” Allied Tech. Grp., Inc. v. United States

(Allied Tech.), 94 Fed. Cl. 16, 44 (2010), aff’d, 649 F.3d 1320 (Fed. Cir. 2011), the

agency’s characterization of an exchange as a clarification is entitled to deference from

the court, G4S Tech. CW LLC v. United States (G4S), 109 Fed. Cl. 708, No. 12-705C,

28

The court notes that, in 1997, “the definition of ‘clarifications’ was significantly

broadened” by amendment to the Federal Acquisition Regulations (FAR). ITAC, 316 F.3d at

1321-22 (comparing FAR 15.601 (1991) with FAR 15.306(a)(2) (2002)); see also Linc Gov’t

Servs., LLC v. United States, 96 Fed. Cl. 672, 715 (2010) (noting that “the 1997 amendments to

the FAR were intended to broaden significantly the definition of ‘clarifications’”). “The stated

purpose of the 1997 amendments to section 15 of the regulations was to ‘provide for

empowerment and flexibility’ and ‘shift from rigid rules to guiding principles.’” ITAC, 316 F.3d

at 1321 (quoting Federal Acquisition Circular 97-02, 62 Fed. Reg. 51,244, 51,225 (Sept. 30,

1997)). “Specifically, the new regulations were intended to support more open exchanges

between the Government and industry.” Id. (alterations and internal quotation marks omitted).

2013 WL 935890, at *12 (Fed. Cl. Mar. 12, 2013) (citing ITAC, 316 F.3d at 1323).

“Thus, this court must give deference to an agency’s view that an [exchange] was a

clarification, as long as that interpretation was permissible and reasonable.” Dyncorp, 76

Fed. Cl. at 542 (internal quotation marks omitted); see ITAC, 316 F.3d at 1323 (stating

that the United States Court of Appeals for the Federal Circuit (Federal Circuit) “recently

emphasized that the [federal] acquisition regulations entrust the contracting officer with

especially great discretion, extending even to his application of procurement regulations”

(alteration and internal quotation marks omitted)).

The two exchanges that plaintiff challenges took the form of limited e-mail

correspondence between the agency and Entwistle. See supra Part I.C (describing the

two exchanges). Each of the government’s requests for clarification included the

following disclaimer: “[N]either this communication nor your submission of requested

clarification information in response to this communication will constitute discussions as

described in FAR 15.306(d) . . . . Be advised that this clarification request does not allow

you to modify your proposal, including your proposed prices, in any way.” AR 1848,

1853 (two requests for clarification). In the first request, the Agency asked Entwistle to

“clarify the cost (material and labor) associated with fabricating the ISO frame.” AR

1773 (Initial PER). Entwistle responded as follows: “The estimated material cost for the

frame is $[* * *]. The estimated labor for fabricating the frame is [* * *] hours.” Id. In

the second request, the Agency asked Entwistle to “clarify how [its] proposed labor hours

are adequate to carry out the steps necessary for production of the First Article Test items

and production quantities.” Id. Entwistle responded as follows: “The production labor

hours were estimated for each labor category based on our understanding of the

solicitation requirements. Based on our experience with design programs, a factor was

applied to the production hours to arrive at the first article labor hours.” Id. at 1774.

Plaintiff argues that these two exchanges amounted to discussions because the

Agency “gave Entwistle an opportunity to revise its proposal by asking it to provide

material information that was required, but omitted, from Entwistle’s proposal, and that

was critical to the Agency’s ability to evaluate the realism of Entwistle’s price.” 29 Pl.’s

Mot. 18 (emphasis omitted); see also Tr. 11:21-23 (Ms. Duncombe) (conceding that the

first exchange “gave Entwistle the opportunity to basically cure a proposal deficiency

with material information that it had omitted”); Pl.’s Mot. 20 (arguing that, in the second

exchange, Entwistle made “its proposal more appealing to the Agency by submitting

29

Plaintiff also contends that, by allowing Entwistle to provide information regarding the

cost and labor associated with the ISO frame, “the Agency gave Entwistle the opportunity to cure

a material omission in violation of FAR [] 15.306(b)(2).” Pl.’s Mot. 19. However, as defendant

correctly points out, see Def.’s Mot. 32, FAR 15.306(b) concerns communications, a type of

exchange not at issue here, cf. FAR 15.306(b) (2012) (defining “communications” as

“exchanges, between the Government and offerors, after receipt of proposals, leading to the

establishment of the competitive range”).

information that the Agency thought was necessary for its analysis of Entwistle’s

proposed price”). Plaintiff also contends that neither exchange is governed by Section

L.6.6 of the Solicitation because “the Agency requested Entwistle [to] provide key

pricing information not present in its proposal--not additional information or more

details.” See Compl. ¶ 78; see Tr. 13:11-14 (Ms. Duncombe) (conceding that “any time

the government issues a question to an offeror, . . . it’s going to be asking for additional

information”); cf. AR 266 (RFP) (providing in Section L.6.6 that “the Government

reserves the right, as a clarification under FAR 15.306(a), to request additional or more

detailed price breakdown data to support its determination of price reasonableness”).

Defendant responds that plaintiff’s argument “is predicated upon the incorrect assertion

that the information provided by Entwistle to the agency during these two exchanges was

required by the solicitation.” Def.’s Reply 6; cf. Allied Tech., 94 Fed. Cl. at 45

(determining that an exchange was a clarification partly because “nothing in the

Solicitation expressly required” the information requested by the Agency).

The court finds that the information provided by Entwistle in the first exchange--

the estimated material cost and labor hours for fabricating the ISO frame--was required

by the Solicitation, but that the information provided by Entwistle in the second

exchange--an explanation of how its proposed labor hours were estimated--was not.

With respect to the first exchange, Section L.6 of the Solicitation required offerors to

identify all parts with an estimated cost of $500 or more in their Bill of Material and also

to provide their proposed direct labor hours. AR 265-66 (RFP) (stating that offerors

“shall” provide this information in Attachment 16); see supra Part I.A.1 (discussing

Attachment 16). The record suggests that Entwistle failed to include the cost of the ISO

frame in its proposal despite this requirement. 30 See AR 1656-60 (Entwistle’s

Attachment 16) (listing no identifiable costs associated with the frame); AR 1785

(Entwistle PER) (observing that Entwistle “did not provide all of the requested

information in [the Bill of Material in] Attachment []16”). The record is less clear as to

whether Entwistle included in Attachment 16 the [* * *] labor hours it estimated it would

take to manufacture an ISO frame. In response to the third request for clarification

regarding direct labor hours, which plaintiff does not dispute, see Pl.’s Mot. 18-20

(disputing only the second and fourth requests for clarification), Entwistle provided a

corrected Attachment 16, in which Entwistle estimates [* * *] hours of machining and

[* * *] hours of welding, see AR 1777 (corrected Attachment 16); AR 1833 (Entwistle

30

Entwistle estimated that the material cost of the ISO frame was $[* * *], AR 1773

(Initial PER), and the court considers it unlikely that none of the parts Entwistle intended to use

to manufacture the frame cost more than $500, cf. AR 266 (RFP) (requiring offerors to “enter all

parts with the extended cost per system of $500 or higher in the [Bill of Material]”); Def.’s Reply

6 (arguing that “although the solicitation did ask offerors to specify the cost of parts with an

extended value of more than $500, Mil-Mar has not shown that any of the parts Entwistle

intended to use to build its frame had an extended value of more than $500” (internal citation

omitted)).

PER Addendum) (discussing Entwistle’s corrected Attachment 16). The Agency appears

to have viewed the summation of these two categories of work as constituting the [* * *]

labor hours estimated by Entwistle to manufacture the frame. See AR 1868 (Aug. 29,

2012 e-mail from Agency engineer Catherine Thomas to contracting officer Yvette

Thompson (August 29, 2012 e-mail or Aug. 29, 2012 e-mail)) (stating that, based on her

“review of [an] ISO frame on a completed Hippo from [Agency] inventory,” she could

not “conclude that an offeror, with [* * *] hours of machining and [* * *] hours of

welding, [would] not be able to successfully perform and meet the solicitation

requirements”); infra Part III.D.2 (discussing the August 29, 2012 e-mail). The court

does not consider this view unreasonable.

With respect to the second exchange, the court agrees with defendant that nothing

in the Solicitation required offerors to describe “how offerors estimated their labor

hours.” See Def.’s Reply 6; cf. AR 265 (requiring offerors only to provide “the total

proposed direct labor hours and direct labor hours broken down by proposed labor

category”).

To the extent that Entwistle provided required information that was missing from

its proposal through the two exchanges, plaintiff asserts that such information was

material information that was necessary for the Agency to evaluate Entwistle’s proposal.

See Pl.’s Mot. 18; Tr. 14:7-8 (Ms. Duncombe) (arguing that the Agency sought “material

information that was missing from [Entwistle’s] proposal”). As to the information

provided in the first exchange, plaintiff contends that the “ISO frame is one of the two

most important and expensive parts of the Hippo,” and that without the cost of the frame,

the Agency “could not evaluate the realism of Entwistle’s price.” Pl.’s Mot. 19. Indeed,

the SSEB considered the frame a “major item” and reviewed the offerors’ cost of the

frame in the Initial Price Evaluation Report for the purpose of “test[ing] price realism.”

AR 1768 (Initial PER). However, the SSEB also found the information that Entwistle

omitted from its Attachment 16, which included the material costs of the frame over $500

and possibly the number of labor hours necessary to manufacture the frame, “was not

significantly material to reject [Entwistle’s] proposal.” 31 AR 1785 (Entwistle PER); cf.

31

When questioned by the court about the SSEB’s finding during oral argument, counsel

for plaintiff suggested that “the agency was blinded by the low price, and they really wanted to

find a way to make sure [Entwistle’s] really substantially lower price proposal could be awarded

the contract.” Tr. 17:15-19 (Ms. Duncombe); see id. at 17:19-22 (arguing that the Agency

attempted to “justify [Entwistle’s] lower price” “throughout this whole evaluation”).

Defendant argues, and the court agrees, that to the extent plaintiff claims that the Agency

carried out the evaluation in bad faith--“that the agency somehow engaged in a conspiracy to

elevate the . . . ratings of Entwistle’s proposal so that it could take advantage of this low price” or

“that it was engineering [the evaluation] in some way to produce a result that wasn’t justified by

the actual content[] of the proposal[],” Tr. 65:7-14 (Ms. Thomas)--plaintiff has failed to rebut

with “well-nigh irrefragable proof” the presumption that “government officials discharge their

AR 277 (RFP) (stating that the contract awardee must meet “all the material requirements

of [the] solicitation” (emphasis added)). Determining whether a requirement of the

Solicitation is considered a material requirement is a matter within the Agency’s

discretion. See Allied Tech., 94 Fed. Cl. at 40 (“[T]he Court only will overturn an

agency’s determination that an offeror’s proposal failed to satisfy the material

requirements of the solicitation if such a finding was arbitrary and capricious.”). And

plaintiff has failed to meet the heavy burden necessary to show that the Agency abused

its discretion by finding that the cost of the ISO frame--including materials and possibly

labor hours--was not a material requirement. 32 See AR 1785 (Entwistle PER); cf. L-3

Commc’ns I, 83 Fed. Cl. at 650 (“[T]he protestor’s burden is especially heavy in

negotiated, best value procurements.”). The court finds that the Agency’s decision had a

rational basis and the court will not substitute its judgment for the Agency’s. Cf.

Honeywell, Inc., 870 F.2d at 648 (“If the court finds a reasonable basis for the agency’s

action, the court should stay its hand even though it might, as an original proposition,

have reached a different conclusion as to the proper administration and application of the

procurement regulations.” (internal quotation marks omitted)); Baird Corp., 1 Cl. Ct. at

664 (stating that, under the APA standard of review, the court “should intervene only

when it is clearly determined that the agency’s determinations were irrational or

unreasonable”).

As to the information provided in the second exchange, the court finds that

plaintiff has failed to make any showing that Entwistle’s description of how its proposed

labor hours were estimated, see AR 1774 (Initial PER), was material information that was

essential for the Agency to evaluate Entwistle’s proposal.

duties, correctly, lawfully, and in good faith,” John Massman Contracting Co. v. United States,

23 Cl. Ct. 24, 33 (1991) (internal quotation marks omitted); see also Schism v. United States,

316 F.3d 1259, 1302 (Fed. Cir. 2002) (en banc) (stating that government officials are presumed

to “perform their duties correctly, fairly, in good faith, and in accordance with law and governing

regulations . . . and [that this presumption] is valid and binding unless well-nigh irrefragable

proof rebuts or overcomes it” (internal quotation marks and citation omitted)).

32

The court observes that the Independent Government Cost Estimate (IGCE) indicated

that manufacturing an entire Hippo unit would cost $[* * *], see AR 1871 (IGCE), and that

manufacturing the ISO frame would cost $[* * *] in materials, id. at 1872, and approximately

$[* * *] in labor, see id. at 1874 (stating that “[l]abor hours were increased . . . due to fabrication

process of ISO frame . . . by [* * *] hours for welder, [* * *] hours for production supervisor,

[* * *] hours for quality, and [* * *] hours for material handler); id. at 1874-75 (providing hourly

rates of $[* * *] for welding, $[* * *] for production supervision, $[* * *] for quality control

inspection and $[* * *] for material handling). The fact that the IGCE suggested that the total

cost of the ISO frame--including materials and labor--should be some $[* * *], or approximately

[* * *] % of the estimated total cost of manufacturing an entire Hippo unit, supports a finding

that the Agency’s determination that the omitted cost of the ISO frame was not material had a

rational basis.

Even if the court were to find that, through the two exchanges, Entwistle provided

the Agency with information that was essential for the Agency to evaluate Entwistle’s

proposal, the Federal Circuit has found that “[t]here is no requirement in [FAR 15.306(a)]

that a clarification not be essential for evaluation of the proposal.” ITAC, 316 F.3d at

1323; see id. (rejecting the appellant’s contention that “a clarification cannot call for new

information if the information is necessary to evaluate the proposal” (internal quotation

marks omitted)). Although plaintiff argues that the facts here are distinguishable from

those before the Federal Circuit in ITAC, see Tr. 15:23-16:23 (Ms. Duncombe); Pl.’s

Resp. 8-9, the Federal Circuit’s reading of FAR 15.306(a) is not fact-dependent. Thus,

an exchange can constitute a clarification, and not a discussion, even where the

information provided was “essential to evaluation criteria, increase[d] a past performance

score or tip[ped] the scales toward the offeror providing the clarification.” DynCorp, 76

Fed. Cl. at 542 (citing ITAC, 316 F.3d at 1323). This is in line with the Federal Circuit’s

caution against “cramped conception[s] of ‘clarification[s],’” which are “not in harmony

with the stated purpose of the 1997 amendments [to the FAR], . . . to ‘[s]upport[] more

open exchanges between the Government and industry.’” ITAC, 316 F.3d at 1323 (some

alterations in original) (quoting Federal Acquisition Circular 97-02, 62 Fed. Reg. 51,224,

51,224 (Sept. 30, 1997)); cf. supra note 28 (discussing the 1997 amendments to the

FAR).

Moreover, as defendant correctly notes, see Def.’s Mot. 33, the Agency neither

sought nor received revisions to the terms of Entwistle’s proposal, cf. ITAC, 316 F.3d at

1322-23 (finding that, partly 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,” the exchanges in question “did

not constitute discussions”); G4S, 2013 WL 935890, at *12 (finding that exchanges were

clarifications partly because the record did not “suggest that any negotiations took place”

or, “[m]ore importantly, . . . that [the offeror] was given the opportunity to revise its

proposal”); Allied Tech., 94 Fed. Cl. at 45 (finding that exchanges were clarifications

partly because the offeror “provided no revisions or changes to its pricing in light of the

[agency’s] inquiry”); DynCorp, 76 Fed. Cl. at 544 (same); SecureNet Co. v. United

States, 72 Fed. Cl. 800, 815 (2006) (same). Indeed, the record does not suggest that the

two exchanges at issue here were “undertaken with the intent of allowing [Entwistle] to

revise its proposal.” See AR 1848, 1853 (two requests for clarification) (stating that

clarifications are “necessary to support the Government’s assessment of the

reasonableness of your proposed price” and advising that the clarification requests do

“not allow you to modify your proposal, including your proposed prices, in any way”);

cf. FAR 15.306(d) (defining “negotiations” as exchanges “that are undertaken with the

intent of allowing the offeror to revise its proposal” and defining “discussions” as

negotiations that occur “after the establishment of the competitive range” in competitive

acquisitions).

Nor does the court find that Entwistle revised its proposal as result of the two

exchanges. As to the first exchange, although Entwistle may have provided the Agency

with required information that was not included in its proposal, the court does not find

that Entwistle revised its proposal because Entwistle did not change its total price and did

not “change the terms of its proposal to make it more appealing to the government.” Cf.

ITAC, 316 F.3d at 1322; id. (stating that the FAR “contemplates discussions as occurring

the context of negotiations”). And, as to the second exchange, the court finds

unpersuasive plaintiff’s conclusory statement that “the Agency gave Entwistle an

opportunity to materially revise and update its proposal in narrative form,” see Pl.’s Mot.

20, when the additional information provided by Entwistle neither changed its total price

nor changed “the terms of its proposal to make it more appealing to the government,” cf.

ITAC, 316 F.3d at 1322.

Given the foregoing, the court finds reasonable the Agency’s interpretation of the

two exchanges as clarifications, see AR 1848, 1853 (two requests for clarification)

(characterizing the requests as clarifications), and therefore defers to the Agency’s view

that the two exchanges were clarifications, cf. DynCorp, 76 Fed. Cl. at 542 (“[T]his court

must give deference to an agency’s view that an [exchange] was a clarification, as long as

that interpretation was permissible and reasonable.” (internal quotation marks omitted)).

Finally, defendant argues that “[e]ven if the agency’s exchanges with Entwistle

had constituted discussions, . . . Mil-Mar has not demonstrated that it was prejudiced.”

Def.’s Mot. 34; see id. (arguing that plaintiff has “made no effort to show--and indeed,

cannot show--that the information obtained from Entwistle during the exchanges in

question had any significant effect on the probability that the agency would award the

Hippo contract to Entwistle”). Plaintiff counters that the alleged discussions “help[ed]

make [Entwistle’s] proposal compliant with the RFP’s requirements,” Pl.’s Resp. 9, and

argues that “[h]ad the Agency not entered into unequal discussions with Entwistle, it

would have concluded that it could not adequately evaluate Entwistle’s significantly

lower price for realism and would have rejected its offer,” Compl. ¶ 117; see Tr. 14:6-8,

:16-17 (Ms. Duncombe) (arguing that the Agency sought “material information that was

missing from the proposal” and that, “without this information[,] [Entwistle’s] proposal

would have had to be found unacceptable”).

The court disagrees with plaintiff’s reading of the Solicitation and finds,

notwithstanding plaintiff’s assertions to the contrary, that the two exchanges did not

provide Entwistle with “an opportunity to take an otherwise unacceptable proposal and

make it acceptable.” Cf. Pl.’s Resp. 9 n.3. Section L of the Solicitation did require

certain information--including itemized material costs estimated at over $500 per part and

proposed direct labor hours--to be included in Attachment 16 of an offeror’s Price

Volume. See AR 265-66 (RFP) (stating that offerors “shall” provide this information in

Attachment 16); supra Part I.A.1 (discussing Attachment 16). However, the Solicitation

afforded the Agency several opportunities to exercise its discretion in accepting proposals

that did not include required information. 33 For example, the Solicitation provided that

the Agency “may” reject proposals that “fail[] to provide any of the data and information

required in Section L” or “omit[] significant material data and information required by

Section L.” AR 276 (RFP). And, although the Solicitation stated that the Agency would

award a contract only to an offeror that submitted a proposal that “[met] all the material

requirements of [the] solicitation,” id. at 277, the Agency determined that the omitted

requirements were not material, see AR 1785 (Entwistle PER) (stating that the

information that Entwistle omitted from its Attachment 16 “was not significantly material

to reject [Entwistle’s] proposal”), and the court defers to the Agency’s discretion in

making that determination, cf. Allied Tech., 94 Fed. Cl. at 40 (“[T]he Court only will

overturn an agency’s determination that an offeror’s proposal failed to satisfy the material

requirements of the solicitation if such a finding was arbitrary and capricious.”).

Moreover, as to plaintiff’s argument that, but for the improper discussions, the Agency

would have rejected Entwistle’s proposal because “it could not adequately evaluate

Entwistle’s significantly lower price for realism,” Compl. ¶ 117, the Solicitation also

provided that the Agency “may reject a proposal which is not realistic . . . as to price”;

the Solicitaiton did not state that the Agency was required to do so, AR 278 (RFP); see

also id. at 276 (stating that the government “may” reject a proposal that “is unrealistically

. . . low in price”); cf. infra Part III.D (discussing the Agency’s price realism analysis). 34

Given the foregoing, the court finds that plaintiff has failed to show that, but for the

alleged improper discussions, plaintiff had “a substantial chance it would have been

awarded the contract,” and that, therefore, plaintiff has failed to show substantial

prejudice. Cf. Brooks Range, 101 Fed. Cl. at 707 (internal quotation marks omitted).

D. The Agency’s Price Realism Analysis Was Rationally Based

33

The court observes that the drafting of the Solicitation helped to create this protest

because, where the Solicitation appears to require certain information in one section, it affords

the Agency flexibility in another. If plaintiff considered the terms of the Solicitation an issue,

plaintiff should have objected to the terms prior to the close of bidding. Blue & Gold Fleet, L.P.

v. United States (Blue & Gold), 492 F.3d 1308, 1313 (Fed. Cir. 2007) (“[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 [United States] Court of Federal Claims.”).

34

Moreover, plaintiff fails to account for the possibility that, had the Agency engaged in

discussions with Entwistle, it could have satisfied FAR 15.306(d)(1) by opening up discussions

with all of the offerors. Cf. FAR 15.306(d)(1) (providing that when the government decides to

hold discussions, they “must be conducted . . . with each offeror within the competitive range”).

Plaintiff does not suggest that its own proposal would have changed if the Agency had held

discussions with all of the offerors. Cf. SecureNet Co. v. United States, 72 Fed. Cl. 800, 815

n.23 (2006) (noting, in concluding that communications did not amount to discussions, that the

plaintiff did “not offer any reason to believe its own proposal would have changed if

comparative questions” were asked of the plaintiff).

Although the FAR requires contracting officers to evaluate the reasonableness of

offerors’ proposed prices to ensure that the prices are fair and reasonable, 35 FAR 15.404-

1(a)(1), “the FAR does not mandate that either a ‘cost realism analysis’ or ‘price realism

analysis’ be performed,” Info. Scis. Corp. v. United States, 73 Fed. Cl. 70, 101 (2006)

(emphasis omitted), reconsidered in part on other grounds, 75 Fed. Cl. 406 (2007); see

First Enter. v. United States, 61 Fed. Cl. 109, 123 (2004) (stating that although the FAR

requires “the contracting officer to do a price reasonableness analysis, there is no similar

requirement to do a cost realism analysis”). Pursuant to the FAR, agencies perform cost

realism analyses “to determine whether the estimated proposed cost elements are realistic

for the work to be performed; reflect a clear understanding of the requirements; and are

consistent with the unique methods of performance and materials described in the

offeror’s technical proposal.” FAR 15.404-1(d)(1).

Where, as here, an Agency contemplates a fixed-price contract, Compl. ¶ 28, “the

‘realism’ of offerors’ proposed prices would not ordinarily be considered[] because the

fixed-price [contract] puts the risk of underpriced offers on the contractor,” Afghan Am.

Army Servs. Corp. v. United States (Afghan Am.), 90 Fed. Cl. 341, 356 (2009); see

Ceres Envtl. Servs., Inc. v. United States (Ceres), 97 Fed. Cl. 277, 306 (2011) (stating

that in “a fixed-price contract[,] . . . the risk for not performing at the contractually

binding price falls squarely and exclusively on the contractor[]”). However, an agency

“may” perform price realism analyses 36 “on competitive fixed-price-type contracts when

35

“Price reasonableness generally addresses whether a price is too high . . . .” First

Enter. v. United States, 61 Fed. Cl. 109, 123 (2004); see DMS All-Star Joint Venture v. United

States (DMS), 90 Fed. Cl. 653, 657 n.5 (2010) (“[A] price reasonableness analysis has the goal

of preventing the government from paying too much for contract work.”). “Normally,

competition establishes price reasonableness.” FAR 15.305(a)(1). In accordance with the FAR,

the Solicitation provided that the Agency’s evaluation of proposals would “include an

assessment of the reasonableness of the proposed prices to accomplish the solicitation

requirements” and stated that the Agency “may reject a proposal which is not . . . reasonable[] as

to price.” AR 278 (RFP); cf. supra Part I.D (discussing the price evaluation reports in which the

Agency analyzed the reasonableness of the offerors’ prices). Plaintiff does not raise any

arguments with respect to the Agency’s price reasonableness analysis.

36

Of note, the FAR does not explicitly address price realism. See DMS, 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, and may include the cost realism analysis referenced in FAR 15.404-

1(d).”); Ralph C. Nash & John Cibinic, Price Realism: It’s Different from Price Reasonableness,

17 No. 3 Nash & Cibinic Rep. ¶ 14 (2003) (stating that FAR 15.404-1(d)(3) “is a cryptic way of

dealing with price realism by addressing the use of cost realism on fixed-price type contracts”);

cf. Afghan Am. Army Servs. Corp. v. United States, 90 Fed. Cl. 341, 355 (2009) (stating that

“cost realism” is “frequently referred to as price realism” (internal quotation marks omitted)).

new requirements may not be fully understood by competing offerors,” and the “[r]esults

of the analysis may be used in performance risk assessments and responsibility

determinations,” FAR 15.404-1(d)(3); see Ceres, 97 Fed. Cl. at 303 (“[A]n agency may,

at its discretion, provide for the use of a price realism analysis to measure an offeror’s

understanding of the solicitation requirements, or to avoid the risk of poor performance

from a contractor who is forced to provide goods or services at little or no profit.”). A

price realism analysis addresses whether the offeror “is proposing a price so low that

performance of the contract will be threatened.” DMS, 90 Fed. Cl. at 657 n.5; see Ceres,

97 Fed. Cl. at 303 (“Arguments that an agency did not perform an appropriate analysis to

determine whether prices are too low, such that there may be a risk of poor performance,

concern price realism.” (internal quotation marks omitted)). The results of an agency’s

price realism analysis cannot be used to adjust the offered prices. See FAR 15.404-

1(d)(3).

“[U]nless the agency commits itself to a particular methodology in a solicitation,”

Afghan Am., 90 Fed. Cl. at 358, “the nature and extent of a price realism analysis, as well

as an assessment of potential risk associated with a proposed price, are generally within

the sound exercise of the agency’s discretion,” id. at 357 (internal quotation marks

omitted); see Ceres, 97 Fed. Cl. at 303 (“The Court’s review of the agency’s [price

realism] analysis is limited to determining whether the evaluation was reasonable and

consistent with the solicitation’s evaluation criteria.”). “The agency’s discretion is even

more pronounced when the Solicitation is silent regarding the methodology to be used in

conducting a price realism analysis . . . .” Afghan Am., 90 Fed. Cl. at 358 (internal

quotation marks omitted); see Ne. Military Sales, Inc. v. United States, 100 Fed. Cl. 103,

118 (2011) (stating that an agency “enjoy[s] broad discretion in conducting its price

realism analysis” when “[t]he Solicitation does not describe the methodology required to

conduct [a] price realism analysis” (first alteration in original) (internal quotation marks

omitted)). However, if an agency made “irrational assumptions or crucial

miscalculations,” the court may find that the agency’s price realism analysis lacked a

rational basis. Afghan Am., 90 Fed. Cl. at 358 (internal quotation marks omitted); see

Ceres, 97 Fed. Cl. at 307 (“This Court recognizes that an agency’s price-realism analysis

lacks a rational basis if the contracting agency made irrational assumptions or critical

miscalculations or used an evaluation method that produced a misleading result.”

(internal quotation marks omitted)).

Here, the Solicitation neither required that the Agency perform a price realism

analysis nor provided that, if the Agency did perform a price realism analysis, a particular

methodology must be used. See AR 276-78 (RFP) (stating the evaluation factors for the

contract award). Instead, the Solicitation stated that the Agency “may” reject a proposal

that “reflects an inherent lack of technical competence or a failure to comprehend the

complexity and risks required to perform the solicitation requirements due to submission

of a proposal which is unrealistically . . . low in price,” id. at 276; see id. at 278 (stating

that the Agency “may reject a proposal which is not realistic . . . as to price”), or that

“contains any unexplained significant inconsistency between the proposed effort and cost

and/or price, which implies the offeror [either] . . . has an inherent misunderstanding of

the [SOW], or . . . has an inability to perform the resultant contract,” id. at 276. Given

that Entwistle’s price was approximately [* * *]% lower than that of the next lowest

offeror’s price, see AR 1905 (SSDD) (observing that the next lowest offeror’s price was

[* * *]% higher than Entwistle’s), the contracting officer acted within the Agency’s

discretion, cf. Afghan Am., 90 Fed. Cl. at 357-58, and “employed cost analysis 37

techniques to determine whether it [was] reasonable to conclude that Entwistle [could]

perform the requirements of the contract based on its offered price,” AR 1906 (SSDD)

(footnote added); cf. Tr. 20:20-22 (Ms. Duncombe) (stating that the Agency performed a

price realism analysis because Entwistle’s price was significantly lower than that of the

other offerors).

Further, where a solicitation provides that an agency may perform a price realism

analysis to assess “an offeror’s understanding of the solicitation’s requirements” or to

“assess[] the risk inherent in an offeror’s proposal,” an acceptable price realism

methodology might include “comparison of the prices received with each other;

comparison of previously proposed prices for the same or similar items; comparison with

the [IGCE]; and analysis of pricing information provided by the offeror.” Afghan Am.,

90 Fed. Cl. at 358. Here, the Agency compared Entwistle’s estimated material costs to

those of the other offerors and the IGCE, see infra Part III.D.1, evaluated Entwistle’s

estimated prices of the engine, tank and frame, see infra Part III.D.2, and compared

Entwistle’s proposed labor hours to those of the other offerors, see infra Part III.D.3; see

also AR 1906 (SSDD) (stating that “[t]he applied cost analysis techniques consisted of a

comparison of cost elements, and a review of Entwistle’s labor hours and material type(s)

to determine risk of successful performance at the offered price”); Tr. 20:23-21:8 (Ms.

Duncombe) (describing the Agency’s price realism methodology). Based on this

analysis, the Agency concluded that Entwistle’s price was not unrealistically low. See

AR 1906-08 (SSDD) (describing the Agency’s findings).

Plaintiff argues that the Agency’s price realism analysis lacked a rational basis.

See Pl.’s Mot. 31. Plaintiff states that “[a]lthough the Agency attempted to use several

acceptable methods to analyze Entwistle’s price, . . . its analyses failed because they were

based on irrational assumptions and/or critical miscalculations.” Id. at 21; see Pl.’s Resp.

10 (“[I]t is not the methodology that Mil-Mar challenges; it is the implementation of the

methodology.”); see also Tr. 21:9-13 (Ms. Duncombe) (“[O]n its face, it sounds like this

37

FAR 15.404-1(c)(1) defines “[c]ost analysis” as “the review and evaluation of any

separate cost elements and profit or fee in an offeror’s . . . proposal, as needed to determine . . .

cost realism.” FAR 15.404-1(c)(1); see FAR 15.404-1(a)(4) (stating that cost analysis may be

used “to determine . . . cost realism”). “[W]hen contracting on a firm-fixed-price . . . basis,

comparison of the proposed prices will usually satisfy the requirement to perform a price

analysis, and a cost analysis need not be performed.” FAR 15.305(a)(1).

would be a reasonable methodology, but once you get into it and really look at the things

that they compared, it demonstrates that it was simply done to justify Entwistle’s price.”).

Specifically, plaintiff contends that the Agency employed irrational material cost

comparison techniques, conducted an irrational evaluation of Entwistle’s frame and

conducted an irrational comparison of labor hours. See Pl.’s Mot. 32. Plaintiff also

accuses the Agency of cherry-picking its price realism analysis “in an effort to find a few

numbers to reach its desired end, i.e., that Entwistle’s significantly lower price is realistic

and poses no undue risk to the Government.” Id. at 31. 38

Defendant counters that there is no basis to conclude that the Agency’s price

realism analysis lacked a rational basis, see Def.’s Reply 5-6, and that plaintiff’s

arguments to the contrary “simply amount to a disagreement with the agency’s

reasoning,” Tr. 73:17-19 (Ms. Thomas); see Def.’s Mot. 38 (claiming that plaintiff’s

arguments amount to “nothing more than . . . unsupported disagreements with the

substance of the agency’s conclusions”). Defendant further contends that plaintiff’s

arguments “all involve exactly the sort of flaw that Mil-Mar accuses the agency’s

analysis of including.” Tr. 72:11-13 (Ms. Thomas). That is, defendant accuses plaintiff

of “cherry pick[ing]” comparisons that “Mil-Mar believes support[] the conclusion it

wants to reach, which is Entwistle’s price was too low.” Id. at 72:14-16; accord Tr.

82:18-23 (Henry E. Steck) (“[W]e can slice and dice these cost proposals 25 different

ways and pick out parts and say . . . we think the agency compared this to that, but it

should have compared something else. Those were judgments within the agency’s

discretion.”). Defendant observes that the price realism analysis that the Agency

conducted sufficiently satisfied the Agency that Entwistle’s price did not reflect either “a

lack of understanding of the requirements of the contract” or “that Entwistle wasn’t

capable of meeting the requirements of the contract.” Tr. 71:8-15 (Ms. Thomas); see id.

at 68:8-10 (claiming that the Agency “looked extensively at Entwistle’s price” and

“determined that it wasn’t undertaking any particular risk”); cf. AR 276 (RFP) (stating

38

Plaintiff contends that the Agency demonstrated a “willingness to ignore any

information that called into question Entwistle’s understanding of the technical requirements.”

Pl.’s Mot. 31; see Tr. 17:15-19 (Ms. Duncombe) (claiming that “the agency was blinded by

[Entwistle’s] low price, and [that the agency] really wanted to find a way to make sure this really

substantially lower price proposal could be awarded the contract”). To the extent plaintiff claims

that the Agency carried out its price realism analysis in bad faith, plaintiff has failed to rebut with

“well-nigh irrefragable proof” the presumption that “government officials discharge their duties,

correctly, lawfully, and in good faith.” John Massman Contracting Co., 23 Cl. Ct. at 33 (internal

quotation marks omitted); see also Schism, 316 F.3d at 1302 (stating that government officials

are presumed to “perform their duties correctly, fairly, in good faith, and in accordance with law

and governing regulations . . . and [that this presumption] is valid and binding unless well-nigh

irrefragable proof rebuts or overcomes it” (internal quotation marks and citation omitted)); cf.

supra note 31 (finding that, with respect to the Agency’s overall evaluation of the proposals,

plaintiff failed to rebut the presumption that government officials properly perform their duties).

that the Agency may reject a proposal that reflects either “an inherent misunderstanding

of the scope of the work, or . . . an inability to perform the resultant contract”).

For the following reasons, the court finds that the Agency’s price realism analysis

was rationally based.

1. The Agency’s Comparison Techniques for Material Costs Was Rationally

Based

As part of its price realism analysis of Entwistle’s material costs, the Agency

compared two categories of Entwistle’s material costs--costs of parts below $500 and

total material costs (the sum of parts above and below $500)--to those of the other

offerors and the IGCE. See AR 1906 (SSDD) (comparing costs). The material cost

information relied on by the Agency is provided in the following chart:

[* * *] Entwistle [* * *] [* * *] [* * *] Mil-Mar [* * *] IGCE

Parts >

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

$500

Parts <

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

$500

Total

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

Costs

See id. With respect to parts below $500, the Agency observed that Entwistle was

“within the range of the other offerors, particularity that of [* * *], [* * *] and Mil-Mar

(the second, third and fourth low offerors), whose prices are within [* * *]% of each

other.” Id. With respect to total material costs, which account for “66% to 87% of total

price,” the Agency observed that “Entwistle’s total material cost of $[* * *] compare[d]

favorably to the IGCE cost of $[* * *].” Id.

Plaintiff contends that the Agency’s analysis of these two categories does not

support the realism of Entwistle’s price. See Pl.’s Mot. 22-24. First, plaintiff argues that

the costs of parts below $500 “is a small category of the total cost (10% to 30%) for the

Hippo,” id. at 23, so relying “on that to determine if Entwistle understood the complexity

of this RFP or whether [Entwistle’s] price was realistic really doesn’t make sense,” Tr.

24:17-20 (Ms. Duncombe). Second, plaintiff argues that, instead of “compar[ing]

Entwistle’s total material costs to any of the other offerors,” the Agency compared

Entwistle’s total material costs to those of the IGCE “because that’s the only one that it

would have been comparable to.” Id. at 22:21-23; see id. at 23:16-18 (claiming that the

Agency “chose the one thing that it could compare[,] the IGCE to Entwistle[,] to find that

[Entwistle’s] cost was realistic”). 39

Plaintiff argues that the Agency should have instead looked at the costs of parts

above $500. See Pl.’s Mot. 23-24. As plaintiff sees it, “it makes no sense that the

Agency completely disregarded the costs of the Parts Above $500 among the offerors and

the IGCE, especially [because] that is the category where the offerors’ costs show the

greatest disparity.” Id. at 23. Plaintiff also argues that the Agency “ignored” the fact that

the most important and expensive parts of the Hippo are those above $500--the tank and

the frame. See id. at 22, 24. As support, plaintiff cites to an August 28, 2012 Final SSA

Brief that includes a chart titled “Comparison of Common Material Items Over $500.”

See id. at 24 (citing AR 2336 (Final SSA Brief)). A modified 40 excerpt of this chart,

showing only the costs of the tank and frame (whether bid separately or together), is

below:

Item [* * *] Entwistle [* * *] [* * *] [* * *] Mil-Mar [* * *] IGCE

Tank/ $[* * *] -- -- $[* * *] -- $[* * *] --

Frame

Tank -- $[* * *] $[* * *] -- -- -- $[* * *] $[* * *]

Frame -- $[* * *] 41 $[* * *] -- -- -- $[* * *] $[* * *]

39

Plaintiff also argues that the Agency “totally ignore[d] the fact that Entwistle’s

proposal was missing information about its material costs.” Pl.’s Mot. 22-23; see Tr. 22:25-23:9

(Ms. Duncombe) (stating that the Agency “ignored the fact that Entwistle’s proposal was missing

information” regarding the cost of the frame as well as costs of parts below $500); cf. id. at

24:21-25:22 (explaining how the Agency calculated Entwistle’s cost of parts below $500). The

record does not support plaintiff’s argument. As discussed in Part III.C above, the Agency

recognized that Entwistle did not provide all of the requested material cost information in its

Attachment 16 but concluded that the omitted information “was not significantly material.” See

AR 1785 (Entwistle PER); supra Part III.C. Therefore, the Agency did not “entirely fail[] to

consider an important aspect of the problem.” Cf. Ala. Aircraft Indus., Inc.-Birmingham v.

United States (Ala. Aircraft), 586 F.3d 1372, 1376 (Fed. Cir. 2009) (internal quotation marks

omitted). Instead, the court finds that “[t]he agency is going into this procurement with its eyes

wide open.” Cf. Ceres Envtl. Servs., Inc. v. United States (Ceres), 97 Fed. Cl. 277, 306 (2011).

40

The chart in the Final SSA Brief included additional information but did not include a

row that tabulated the total prices or a column for the IGCE. See AR 2336 (Final SSA Brief).

The court notes that the price for the frame in the IGCE does not include labor hours, see AR

1872 (IGCE) (listing material costs only); cf. supra note 32 (calculating $[* * *] as the total cost

of the IGCE frame, inclusive of materials and labor), but that the price for Entwistle’s frame does

include labor hours, in addition to other expenses, see infra note 41.

41

The SSA calculated the cost of Entwistle’s ISO frame because this information was

not provided by Entwistle. See AR 2336 (Final SSA Brief) (stating that the cost of Entwistle’s

frame consisted of “material + direct labor + [overhead], [general and administrative expenses],

Total $[* * *] $[* * *] $[* * *] $[* * *] -- $[* * *] $[* * *] $[* * *]

see AR 2336 (Final SSA Brief); AR 1872 (IGCE). 42 According to plaintiff’s calculations,

the total cost of Entwistle’s tank and frame is [* * *]% lower than that of the IGCE, Pl.’s

Mot. 25, and “would have to increase by nearly [* * *]% to reach the next lowest offer

for these same two items ([* * *]’s estimate of $[* * *]),” id. at 24 (emphasis omitted).

Plaintiff concludes that had the Agency considered this “readily apparent information” it

would have realized “just how understated Entwistle’s prices were on the Hippo’s most

important (and costly) components.” Id. at 25. However, the “calculations” offered as

part of plaintiff’s argument, see id. at 24-25, result in an overstatement of the difference

between the numbers compared. For example, the difference between the total cost of

Entwistle’s tank and frame and the total cost of the IGCE tank and frame is $[* * *]. See

AR 2336 (Final SSA Brief) (listing $[* * *] as the total cost of Entwistle’s tank and

frame); AR 1872 (IGCE) (listing $[* * *] as the total cost of the IGCE tank and frame);

cf. supra note 40 (noting that the cost of the IGCE frame does not include labor hours).

The $[* * *] difference does not reflect, as plaintiff claims, that the price of Entwistle’s

tank and frame was [* * *]% lower than the price of the IGCE tank and frame. Cf. Pl.’s

Mot. 25. Instead, the $[* * *] difference reflects that the price of the IGCE tank and

frame was approximately [* * *]% higher than that of Entwistle 43 or, stated another way,

that Entwistle’s price was approximately [* * *]% lower than the price of the IGCE tank

and frame. 44

Defendant contends, and the court agrees, that nothing in the Solicitation required

the Agency to make observations about the costs of parts over $500, Def.’s Reply 7, or to

compare Entwistle’s total material costs to those of the other offerors. Such matters are

Profit”); Pl.’s Mot. 24 n.15; cf. AR 1907 (SSDD) (stating that the Agency calculated a cost of

$[* * *] for Entwistle’s ISO frame).

42

[* * *], [* * *] and Mil-Mar planned to purchase the tank and frame as a combined

unit, see AR 1839-40 (Final Price Evaluation Report (Final PER)); Tr. 27:20-22 (Ms.

Duncombe); [* * *] planned to purchase the tank and frame separately, Tr. 27:23-24 (Ms.

Duncombe); see AR 1839 (Final PER); [* * *] and Entwistle planned to purchase the tank and

manufacture the frame, AR 1839, 1841 (Final PER); Tr. 27:25-28:1 (Ms. Duncombe); and

[* * *] planned to manufacture both the tank and the frame, AR 1840 (Final PER). The IGCE

was based on purchasing the tank and manufacturing the frame. See AR 1872, 1874 (IGCE).

43

The court reached this figure by dividing the difference between the total cost of

Entwistle’s tank and frame and the total cost of the IGCE tank and frame ($[* * *]) by the total

cost of Entwistle’s tank and frame ($[* * *]).

44

The court reached this figure by dividing the difference between the total cost of

Entwistle’s tank and frame and the total cost of IGCE tank and frame ($[* * *]) by the total cost

of IGCE’s tank and frame ($[* * *]).

entirely within the Agency’s discretion. See Afghan Am., 90 Fed. Cl. at 357-58.

According to defendant, “[t]he SSA expressly chose to compare the IGCE materials cost

to Entwistle’s materials cost because materials costs represented the overwhelming

majority of the total costs involved in performance of the contract.” Def.’s Mot. 36-37;

see Tr. 72:23-73:2 (Ms. Thomas) (“The agency identified the aspects of the price that it

believed were important. Notably, the materials cost, because that did represent for every

offeror between 66 and 83 percent of the total cost . . . .”). To the extent plaintiff argues

“that the agency ‘ignored,’ ‘completely disregarded,’ or ‘failed to evaluate’ a variety of

pieces of information related to price,” Def.’s Mot. 36 (quoting Pl.’s Mot. 23), defendant

argues that plaintiff is merely “complaining that the agency did not conclude . . . that

Entwistle’s price was unrealistic,” id. at 37. Indeed, the record does not support

plaintiff’s argument that the Agency ignored the most expensive and important parts of

the Hippo--namely the tank and frame. Cf. Pl.’s Mot. 22, 24. As intervenor correctly

observes, “[t]he total material cost assessed by the [Agency] would necessarily include

the cost of those major components,” and, “[f]urther, the SSDD specifically documents

the [Agency’s] evaluation of Entwistle’s pricing for the water tank [and] ISO frame.”

See Intervenor’s Mot. 26; infra Part III.D.2 (discussing the Agency’s evaluation of

Entwistle’s costs of the tank and frame).

Further, where, as here, a solicitation is silent as to the methodology to be used in

performing a price realism analysis, the Agency “enjoy[s] broad discretion in conducting

its price realism analysis.” Ne. Military Sales, Inc., 100 Fed. Cl. at 118 (alteration in

original) (internal quotation marks omitted). Plaintiff has simply failed to establish that

the Agency’s examination of total material costs and the costs of parts below $500 relied

on “irrational assumptions” or made “crucial miscalculations.” Cf. Afghan Am., 90 Fed.

Cl. at 358 (internal quotation marks omitted). Therefore, “given the deference to be

afforded the agency in price realism assessments and the agency’s willingness to assume

risk,” Ceres, 97 Fed. Cl. at 308; cf. AR 1786 (Entwistle PER) (observing that “utilizing a

firm-fixed price contractual instrument . . . mitigates the Government’s risk”), the court

finds that the Agency’s price realism analysis of the material costs was reasonable and

had a rational basis.

2. The Agency’s Evaluation of the Frame Was Rationally Based

The Agency’s price realism analysis also included an evaluation of Entwistle’s

engine, tank and frame. See AR 1906 (SSDD). The Agency’s analysis of Entwistle’s

engine and tank, which plaintiff does not contest, see Pl.’s Mot. 25-28 (disputing only the

Agency’s analysis of the frame), included performing market research, reviewing quotes

provided by Entwistle, and securing review by the United States Army Tank Automotive

Research, Development and Engineering Center (TARDEC), see AR 1906-07 (SSDD);

AR 1869 (Memorandum for Record (MFR)) (discussing the reviews by TARDEC). The

Agency’s analysis of Entwistle’s frame included reviews obtained from a Production

Capability evaluator and a TARDEC engineer. See AR 1907 (SSDD). The following

passage

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