US Securities Associates, Inc. v. United States

In the United States Court of Federal Claims
No. 15-1197C
(Filed: November 2, 2015)
ISSUED UNDER SEAL 1
**********************
U.S. SECURITY ASSOCIATES, INC.,
Plaintiff,
v.
P ost-aw ard bid p ro test;
THE UNITED STATES, preliminary injunction;
likelihood of success on the
Defendant, merits; fixed price; lowest
priced technically acceptable
and offer.
SECURIGUARD, INC.
Intervenor.
**********************
Jerry A. Miles, Rockville, MD, for plaintiff, with whom was Ann M.
Golski.
Amanda L. Tantum, Trial Attorney, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, DC, with
whom were Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Robert E. Kirschman, Jr., Director, and Steven J. Gillingham, Assistant
Director, for defendant. William S. Meyers and Sigmund Adams, Office of the
General Counsel, Administrative Office of the United States Courts, of
counsel.
Kier X. Bancroft, Washington, DC, with whom was J. Scott Hommer,
1
This opinion is issued under seal pursuant to the protective order entered in
this case on October 16, 2015. The parties are directed to propose to chambers
appropriate redactions on or before November 9, 2015.
Washington, DC, for intervenor.
ORDER AND OPINION
BRUGGINK, Judge.
Pending in this bid protest is plaintiff’s motion for preliminary
injunctive relief.2 The matter is fully briefed. Subsequently, plaintiff filed a
notice of voluntary dismissal under RCFC 41(a)(1) along with a motion for
relief from the protective order in place in this case, in order for plaintiff to file
a new protest at the Government Accountability Office (“GAO”).3 The motion
indicates that, because access to the administrative record in this case suggests
what plaintiff’s counsel considers to be additional grounds beyond those of
which plaintiff was aware at the time of the GAO protest, it wishes
dispensation from the protective order here in order to return to GAO to
advance those new arguments there. Oral argument on both motions was
scheduled for October 29, 2015. At the beginning of oral argument, plaintiff
notified the court that it intended to withdraw its notice of dismissal and
proceed with the present suit. After oral argument, plaintiff affirmed that
intent by filing a notice of withdrawal of its notice of dismissal and withdrawal
of its motion for relief from the protective order. As announced at oral
argument, and for the reasons set out below, we deny the request for a
preliminary injunction.
PROCEDURAL AND FACTUAL BACKGROUND 4
Plaintiff, U.S. Security Associates, Inc., was one of several holders of
a Schedule 84 contract for security services with the General Services
Administration (“GSA”). On June 19, 2015, the Administrative Office of the
United States Courts (“AO”), acting under that contract, issued a Request for
Quotations (Solicitation No. 061915) for security services at the Thurgood
Marshall Building in Washington, DC. Those services are currently, and were
in the recent past, subject of a different contract issued by the Architect of the
2
Plaintiff also applied simultaneously for a temporary restraining order. By
order dated October 16, 2015, that application was denied without prejudice
to consideration of the motion for a preliminary injunction.
3
Plaintiff proceeded initially at GAO and was unsuccessful.
4
The facts are drawn from the Administrative Record
2
United States Capital, which has authority to act with respect to the Marshall
Building. The incumbent on that contract is CMI Management, Inc. (“CMI”).
Plaintiff is the primary subcontractor for CMI under the incumbent contract.
After an extension triggered by plaintiff’s protest at GAO, the incumbent
contract is currently scheduled to expire on October 31, 2015.
The RFQ proceeds under Federal Acquisition Regulation (“FAR”)
Subpart 8.4, which permits GSA to set up blanket purchase agreements
(“BPA”) and for authorized entities, such as the AO, to place task orders under
the BPA. The task orders can be competed among the holders of the BPA, as
the AO did here. The RFQ contemplated award of a fixed price task order to
a single awardee for one year with options potentially extending another four
and a half years. The award would be made to the “lowest price technically
acceptable” (“LPTA”) offeror. Offerors were asked to submit their quotations
in two volumes, one setting out their price proposal and the second in a
technical proposal. The procurement would then proceed in three steps. All
offerors who had self-certified that they had “at least 5 years security service
experience in a Level IV facility,” AR 43, were permitted to proceed to step
two. In step two, the overall lowest price offer was identified. Then in step
three, only that lowest price offer was evaluated to determine if the offeror’s
technical proposal was acceptable as measured against three evaluation factors
by the Technical Evaluation Team (“TET”): Key Personnel, Staffing Plan, and
Past Performance. If the lowest price proposal was acceptable, the search was
over and a contract awarded. If not, then the TET advanced to consideration
of the next lowest price offer.
With respect to key personnel, offerors were required to submit at least
one resume for two senior positions: On-Site Security Manager and Captain.
The staffing plan needed to reflect how the staff would be recruited, selected,
and allocated over the required posts. In order to satisfy the past performance
requirement, offerors were to submit information concerning five contracts of
similar size, scope and complexity in a comparable facility that had been
performed within the past three years or were being currently performed.
The AO received quotations from five entities, including plaintiff and
the intervenor, Securiguard, Inc. All five met the requirement of certifying
five years of security experience. The contracting officer then determined that
Securiguard offered the lowest proposed price. The TET therefore evaluated
Securiguard’s proposal and concluded that it was technically acceptable in all
areas and had no deficiencies. Securiguard was awarded the task order on
September 8, 2015.
3
Plaintiff filed a protest with GAO on September 14, and the statutory
stay attached. In order to maintain security services under the incumbent
contract, the Architect of the Capitol extended the contract with CMI through
the end of October. When the GAO denied the protest on October 8, the AO
instructed Securiguard to begin transition preparation with the goal of
commencing performance on November 1, 2015. Plaintiff filed its complaint
in this court on October 13, 2015, along with a motion for a temporary
restraining order and permanent injunction.
DISCUSSION
To obtain preliminary injunctive relief pursuant to Rule 65 of the Rules
of the United States Court of Federal Claims (“RCFC”), plaintiff must
persuade the court that it is likely to succeed on the merits of the protest, that
it will be irreparably harmed if an injunction is not awarded, that the harm to
it exceeds the harm to the United States and interested third parties if an
injunction is not granted, and that the public interest militates in favor of an
injunction. Because the matter is before us on a request for a preliminary
injunction, even if we deny the request, plaintiff may still proceed to seek a
permanent injunction. Similarly, if we grant the injunction now, the
government and intervenor may still argue that a permanent injunction is
unwarranted. There is no prejudicial effect to a grant or denial.5 Nevertheless,
while the harm and public interest considerations obviously will differ in
considering preliminary or permanent relief, there is no blinking the fact that,
with respect to the merits, consideration of the likelihood of success now
requires the court to look at the same arguments it likely will consider when
the request for permanent relief is addressed.
Defendant’s opposition to the request for a preliminary injunction raises
a subject matter jurisdiction defense and a defense of lack of standing, which,
in this context, also implicates jurisdiction. Normally we would have to satisfy
ourselves of subject matter jurisdiction and plaintiff’s standing in order to
proceed. Three factors persuade us that it is unnecessary to resolve those
questions now, however. First, we are confronted with an issue of whether
interim relief is appropriate, not a permanent resolution of the merits of the
case. Second, the question of subject matter jurisdiction, as even defendant
concedes, is not entirely straight forward. And the matter of standing is
factually muddled because there is at least a theoretical possibility that, if
5
See discussion below at page 7.
4
plaintiff is successful in knocking Securiguard out of the competition, the
agency would have to advance to the next lowest price offeror, which in turn
could be rejected, and so on, until plaintiff was reached. Third, we believe that
consideration of one of the elements of plaintiff’s burden of proof–likelihood
of success on the merits–is so weighted against plaintiff that it is unnecessary
to address, much less resolve, these otherwise preliminary issues at this point.
We therefore forego, for now, consideration of the government’s jurisdictional
defenses (as well as two of the three other factors which plaintiff must
establish) and move to the likelihood of plaintiff’s success on the merits.
Plaintiff must show that the AO’s decision was either arbitrary or
capricious or not in accordance with law. There is no hint of the latter in
plaintiff’s briefing, so the question is whether plaintiff is likely to persuade us
that the AO’s actions were arbitrary or capricious. Under any circumstances,
of course, a protestor faces a tough hurdle in overcoming the deference
accorded the actions of the procuring agency. Here, however, we conclude
that there is nothing close to a telling argument.
Plaintiff contends that the agency improperly treated Securiguard’s
proposal as technically acceptable because the intervenor’s proposed staffing
plan does not include or attach a code of conduct to which its employees
would be subject, failing thereby to satisfy the Staffing Plan, which indicates
that the evaluation team should review a copy of the offeror’s code of conduct.
AR 43. The contracting officer was not troubled by the omission, however,
because Securiguard had included a one page description of its “Codes of
Ethics and Conduct,” AR 343, which goes into some detail as to the
company’s general approach to discipline and with respect to the procedures
applied. As counsel for defendant pointed out at oral argument, the RFQ
merely called for a description of the offeror’s code of conduct, and it was only
in the RFQ’s explanation of what the evaluation team would look at that there
was a reference to review of the code itself. We can understand why the CO
was disinclined to reject the lowest price offer on this ground. Intervenor
plainly has a code of conduct, and its one page description of it met the
technical requirement of the RFQ. It would presumably be a simple matter to
ask for a complete copy. Rejecting the proposal for failure to submit it with
the proposal would arguably have been arbitrary in light of the failure to spell
out the requirement in the RFQ.
Plaintiff’s real argument is that Securiguard’s price is too low. Thus the
agency should have concluded that Securiguard’s price proposal was not
responsive to the RFQ and that its price was neither fair nor reasonable. FAR
5
9.103(a) dictates that awards can only be made to responsible offerors, which,
as plaintiff points out, means that the prospective contractor is “able to comply
with the required or proposed delivery or performance schedule, taking into
consideration all existing commercial and governmental business
commitments.” 48 C.F.R. 9.104-1(b) (2015). In a nutshell, plaintiff argues
that Securiguard’s price is so low that it could not possibly attract or keep
enough qualified staff to perform the contract and that it will run afoul of the
collective bargaining agreement (“CBA”) applicable to the employees it would
hire. Plaintiff argues that the solicitation requires compliance with the
prevailing wage rates as set by the CBA.6 Plaintiff argues that the awardee’s
prices are too low, at least in the contract’s out years, for the intervenor to pay
the hourly wages it proposes and still satisfy the CBA.
Plaintiff compares the CBA-mandated pay rates with intervenor’s
proposed labor rates for the options years, which show a slight decrease year-
over-year for pay rates for one of the positions. Plaintiff avers that its own
historical negotiations with the union have involved a yearly increase of 3-5
percent in labor rates. It concludes that the purported inconsistency between
intervenor’s proposed price and the CBA (or plaintiff’s experience with it)
demonstrate that the proposal was not responsive.
As the government points out, however, and as GAO concluded, there
are problems with this argument. First, plaintiff cannot, and indeed has not
attempted to draw into question the AO’s determination that Securiguard’s
technical proposal was acceptable. We must therefore assume that
Securiguard will perform as advertised. Second, plaintiff cannot demonstrate
that Securiguard will not pay its employees legally required wages. Indeed,
Securiguard’s proposal plainly states that it will comply with the CBA and that
it will pay prevailing wages.7 AR 363. Nor can plaintiff demonstrate that the
6
There was discussion during oral argument about whether the CBA had been
specifically incorporated by the solicitation. Plaintiff is correct that a
Questions and Answers sheet attached to solicitation amendment two implies
that the first amendment had incorporated the CBA. AR 166. What is not
stated there, however, or anywhere else in the solicitation, is a requirement that
the offeror promised to charge the government the full CBA rate for every
year.
7
Also in contrast to plaintiff’s allegations regarding Securiguard’s intent not
(continued...)
6
resumes of the key personnel are inadequate for the work required. What
plaintiff wants the court to do is step into the shoes of the agency and
substitute its judgment that the technical plan is inadequate in light of
Securigaurd’s proposed rates for future option years. If the TET was satisfied,
the court is in no better position to judge the adequacy of proposals. In any
event, if Securiguard promises to do the work required, its ultimate satisfaction
of that requirement is a matter of contract performance. Plaintiff’s doubts in
that regard are not a basis for enjoining performance. In the context of a fixed
price procurement, price risk is borne by the offeror not the agency.8
In short, there is no basis for disagreeing with the agency’s conclusion
that the technical proposal was acceptable. While plaintiff suggested the
problem could be cast in terms of price realism, or reasonableness, we
disagree. The prices were in a relatively close range, and clearly plaintiff does
not contend that the intervenor’s price was too high.
Even if the likelihood of success were not great, we would entertain an
argument that there is such a high likelihood of permanent and irreparable
harm to the movant that the likelihood of success is not determinative. Such
a risk has plainly not been established here, however. The court is committed
to determine promptly whether plaintiff is ultimately successful on the merits,
and, given plaintiff’s promptness in requesting injunctive relief, it will not be
prejudiced in obtaining permanent injunctive relief, if it is warranted. The
only injury we can see, therefore, is that plaintiff might miss out on as much
as one month’s net profit. That relatively minor financial harm certainly does
(...continued)
to follow the CBA are several statements earlier in Securiguard’s Technical
Proposal, where it detailed how it would handle unanticipated needs for
increased security staffing on site and its procedures for employee schedule
changes. In both instances, Securiguard confirmed its intent to follow the
applicable CBA. See AR 338, 339.
8
In fact, inervenor affirmed in paragraph 8 of its pricing narrative that it bears
the price risk, stating that it “understands [that] the Government shall not be
responsible for compensating Securiguard for any costs tied to solicitation
requirements but not factored in the proposed prices either by intention or
mistake.” AR 365. The very next paragraph offers its willingness to provide
the government with financial statements to prove its responsibility “in
accordance with FAR 9.104-1.” Id.
7
not outweigh the fact that the government has shown that it is paying more on
a monthly basis to keep the incumbent in place.
CONCLUSION
Because plaintiff has not established a likelihood of success on the
merits nor shown irreparable harm, its motion for a preliminary injunction is
denied. The parties are directed to confer and propose by November 9, 2015,
jointly if possible, a schedule for resolution of the merits through cross-
motions for judgment on the administrative record. Oral argument can be held
on December 1, 2, or 3, 2015.
s/Eric G. Bruggink
ERIC G. BRUGGINK
Judge
8