Kvichak Marine Industries, Inc. v. United States

In the United States Court of Federal Claiitts
No. 14~280 C
(Filed Under Seal: August 29, 2014)
(Reissued for Publication: September 15, 2013)
KVICHAK MARINE INDUSTRIES, )
)
lNC.,
Plaintiff, )
v. ) Bid Protest; l\/lotions for Judginent on
) the Administrative Record; Patent
THE UNITED STATES, ) Ainbiguity; Technical Evaluation; Best
Defendant, ) Value.
and
BIRDON AMERICA, INC.,
Intervenor.
)
)
)
)
)
Wz``I/z'anz A. Shook, Seattle, Washington, for plaintiff.
Mczrtz``n M. Tomlz``rzson, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Washington, D.C., with whom appeared Stuarz.‘ F.
De/ery, Assistant Attorney General, Robert E. Kz``rschnzan, Jr., Director, and
Stephen J. Gz``llz``nghane, Assistant Director, for defendant. Stephanz``e Magnell, Trial
Attorney.
W. Jay De Vecchz``o, Washington, D.C., for intervenor
OPINION
Merow, Senz``or Jua'ge
This bid protest is currently before the court for the resolution of five
motions: Kvichak l\/larine Industries, lnc.’s ("Kvichak") motion seeking
preliminary and permanent injunctions, Doc. 2; a motion for judgment on the
administrative record from each of the three parties, Docs. 2l, 23, and 24; and the
government’s motion to strike exhibits Kvichak submitted in support of its motion
for judgment on the administrative record, Doc. 22.
I. INTRODUCTION
Kvichak filed the instant post-award protest challenging the award of a
contract for the government’s purchase of Bridge Erection Boats ("BEB") to
Birdon America, Inc. ("Birdon"). See Doc. l.
The government issued solicitation number W56HZV~l2-R-0445 for the
production of BEBS on january 25, 2()13. AR at 5(), 57. As explained in the
solicitation, the purpose of BEBs is as follows:
The BEBs [sic] primary mission is to support tactical float bridge and
rafting operations while operating on let Propellant (JP)-S fuel. The
BEB must be rapidly deployed from its transporter launch/retrieval
platform, and maneuver float rafts or bridges. The BEB must also
suppoit diving operations, transport personnel, and act as a water
safety vessel.
AR at 57. The solicitation stated that a firm fixed price contract would be awarded
to the offeror who offered the best value to the government. AR at 230.
Each proposal was reviewed by a Source Selection Evaluation Board
("SSEB"), and a Source Selection Advisory Council ("SSAC"), but the awardee
was ultimately selected by the designated Source Selection Authority ("SSA").
AR at 231.
The government first decided which proposals were acceptable, and those
deemed acceptable were then more thoroughly scrutinized See AR at 23l-232.
'l``he acceptable proposals were evaluated on four factors: (l) technical, (2) price,
(3) data rights, and (4) small business participation See AR at 232. Each proposal
was then subjected to a best value tradeoff analysis. See z``a’. The solicitation
specified that the non-price factors were more important than the price. See z'a.'.
This protest focuses on the evaluation of the technical merits of Kvichak’s
proposal versus the technical merits of Birdon’s proposal. The technical factor was
divided into three parts for analysis: (l) reliability, (2) conventional rafting speed,
and (3) forward top speed. See AR at 232.
On March 25, 20l3, the government received five proposals in response to
the solicitation, including the two proposals at issue here.l See Doc. 23 at l2. The
SSEB evaluated each proposal, and assigned the technical ratings used in
determining which proposal offered the best value to the governinent. See i``d.
Kvichak’s proposal was rated "good" for reliability, "good" for conventional
rafting speed, and "outstanding" for forward top speed. AR at 5818-5846.
Birdon’s proposal was rated "outstanding" for reliability, "outstanding" for
conventional rafting speed, and "good" for forward top speed. AR at 500l-5()28.
The SSAC reviewed the SSEB’s findings, and issued its report on November
l3, 20l3. See AR at 306-330. ln its report, the SSAC compared Kvichak’s and
Birdon’s proposals, and found "meaningful distinctions" between them on all three
technical factors. AR at 320, 322. The SSAC noted that Birdon’s proposal was
"significantly more advantageous" to the governinent, particularly considering its
superior presentation on reliability and rafting speed. AR at 323. The SSA
ultimately agreed that, despite the fact that Birdon’s proposal was more expensive,
it offered the best value to the government. AR at 304-05.
Kvichak now claims that the government both incorrectly and unfairly
applied the terms of the solicitation as to all three aspects of the technical
evaluation. See Doc. l.
II. M()TION TO STRIKE
As a preliminary matter, the government has asked the couit to exclude three
exhibits that Kvichak attached to its motion for judgment on the administrative
record, on the grounds that the exhibits are not part of the administrative record,
and that the documents are inadmissible expert testiinony. See Doc. 22. All three
exhibits are technical in nature, with the first two discussing various aspects of
hydraulic systems, see Doc. 2l-3 at l-l8; Doc. 32 at 2-3, and the third explaining
the Brinnel scale, which rates the hardness of various substances, see Doc. 21-3 at
2l; Doc. 32 at 3.
Kvichak acknowledges that the articles are not part of the administrative
record, see Doc. 32 at 2-3, but argues that the court should take judicial notice of
the facts in these articles under the portion of Federal Rule of Evideiice 201 that
states: "The court may judicially notice a fact that is not subject to reasonable
dispute because it . . . can be accurately and readily determined from sources
l Kvichak submitted two separate proposals, referred to as KVA and KVB. ()nly KVA is at
issue in this protest See Doc. 2]-2 at l2 n.3.
whose accuracy cannot reasonably be questioned." FED. R. EviD. 201(b)(2); Doc.
32 at 1.
Under the Federal Circuit’s decision in Axi``om Resource Mcznagement, Inc. v.
Unz``tea’ Smres, judicial review of an administrative record should focus on "the
administrative record already in existence, not some new record made initially in
the reviewing court." 564 F.3d 1374, 1379 (2009) (quoting Ccmip v. Pz``tts, 411
U.S. 138, 142 (1973)). That is not to say that a court can never consider extra-
record documents, but "supplementation of the record should be limited to cases in
which ‘the omission of extra-record evidence precludes effective judicial review."’
Ia’_ (quoting Mw'akaiizi`` v. Um'tea’ States, 46 Fed. Cl. 731, 735 (2000), czjj"’d, 398
F.3d 1342 (Fed. Cir. 2005)).
Kvichak has established neither that the articles it submitted are properly the
subject of judicial notice, nor that they are necessary for the court’s review of this
case. Kvichak failed to provide the court with any evidence of the accuracy or
credibility of the exhibits it attached to its motion. And there is nothing apparent
on the face of exhibits themselves that suggest such reliability-~they are siinply
printouts of information from websites that have no force of authority to the court’s
know1edge. As such, the court will not take judicial notice of the facts contained in
the exhibits.
Even assuming that the websites were sufficiently authoritative to warrant
judicial notice of the posted information, the court finds that the information that
Kvichak urges the court to consider is unnecessary, and therefore improper, to the
court’s review of this matter. Kvichak attempts to use the exhibits to challenge the
government’s substantive, technical decisions. Doc. 21-2 at 14-16 (arguing that
the government did not properly assess changes to Birdon’s hydraulic system);
Doc. 21-2 at 18-19 (arguirig that the government did not properly credit the
changes it made to its hydraulic system). An evaluation of such decisions falls
outside the purview of this court. Textron, Inc. v. Unz``ted States, 74 Fed. Cl. 277,
286 (Fed. Cl. 2006) ("technical ranking decisions made by the agency are
‘minutiae of the procurement process . . ., which involve discretionary
determinations of procurement officials that a court will not second guess"’)
(quoting E. W. Bliss C0. v. Unz``red Smtes, 77 F.3d 445, 449 (Fed. Cir. 1996)).
The government’s motion to strike is, therefore, GRANTED.
III. M()TIONS FOR JUDGMENT ()N THE ADMINISTRA'I``IVE
RECORD
The plaintiff, the government, and the intervenor have each filed a motion
for judgment on the administrative record. See Docs. 21, 23, and 24. Because
each motion raises the same issues, the following decision applies equally to all
three.
A. Standard of Review
"In a bid protest case, the inquiry is whether the agency’s action was
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
[the] law and, if so, whether the error is prejudicial." Glenn Def Marz``ne (AS]A),
PTE Lla’. v. Uni``tea’ States, 720 F.3d 901, 907-08 (Fed. Cir. 2013) (citing 28 U.S.C.
§ 1491(b)(4) (adopting the standard of 5 U.S.C. § 706)); see Bcmnum, Inc. v.
Uni``ted Staz‘es, 404 F.3d 1346, 1351 (Fed. Cir. 2005). The couit must decide
whether: "(1) the procurement official’s decision lacked a rational basis; or (2) the
procurement procedure involved a violation of regulation or procedure." Weeks
Marz'ne, ]rzc. v. Urzz``tea’ States, 575 F.3d 1352, 1358 (Fed. Cir. 2009).
As the Federal Circuit has explained:
When a challenge is brought on the first ground, . . . contracting
officers are entitled to exercise discretion upon a broad range of issues
confronting them in the procurement process. Accordingly, the test for
reviewing courts is to determine whether the contracting agency
provided a coherent and reasonable explanation of its exercise of
discretion, and the disappointed bidder bears a heavy burden of
showing that the award decision had no rational basis. When a
challenge is brought on the second ground, the disappointed bidder
must show a clear and prejudicial violation of applicable statutes or
regulations
]mpresci Consz‘rzrziom`` Geom. Domenl``cr) Gczrzzf v. Um``ted Stcztes, 238 F.3d 1324,
1332-33 (Fed. Cir. 2001)(internal quotation marks and citations omitted).
Given the considerable discretion allowed contracting officers, the standard
of review is "highly deferential." Acz’vcmcecz’ Daza Concepts, ]ne. v. Unz``tea’ Si‘ates,
216 F.3d 1054, 1058 (Fed. Cir. 2000).
B. Kvichak’s Challenge to the Terms of the Solicitation
Kvichak bases its protest priinarily on the fact that the government rated
Birdon’s proposal as "very low risk" with regard to two important components_
the hydraulic system and the water jet impeller’s gear ratio. See Doc. 21-2 at 12-
17. Kvichak alleges that the low risk ratings were unwarranted, and violated the
terms of the solicitation, because the two configurations in Birdon’s proposal were
not supported with test data. See Doc. 21-2 at 4-5.
ln support of its argument that the government improperly assigned a low
risk rating to the untested configurations, Kvicliak focuses on two isolated
provisions of the solicitation. The first states: "During the source selection for the
Production Phase contract, any offeror proposing BEB solutions reflecting untested
and/or un-validated designs, or only partially tested design, will be evaluated at
higher risk." AR at 1213 § A.2. The second states: "A lack of test data for the
proposed configuration/components will be considered higher risk." Id. at 1388-89
§ 1\/1.8.3.
Kvichak contends that the mandatory nature of these statements should have
prevented the government from rating Birdon’s design at the lowest risk level.
"Based on the explicit terms of the solicitation under which all offerors were to
compete, the government did not have the discretion to assess the Birdon proposal
with the lowest risk rating when it submitted a design and components that directly
affect BEB’S reliability and were untested." See Doc. 21-2 at 18.
Even assuming Kvichak’s argument is meritorious, it is untimely.
Kvichak’s protest relies heavily, indeed almost entirely, on the language in
sections A.2 and l\/l.8.3 of the solicitation. These sections, however, conflict with
section l\/l.8.4, which of course immediately follows l\/l.8.3, and reads: "Proposed
corrective actions or design changes which are either untested or partially tested
may increase risk." AR at 1389.
Kvichak has offered no plausible reconciliation of these provisions that
militate in its favor, and the court finds that the solicitation contains a patent
ambiguity. As the Federal Circuit has noted, "[a] patent ambiguity is present when
the contract contains facially inconsistent provisions that would place a reasonable
contractor on notice and prompt the contractor to rectify the inconsistency by
inquiring of the appropriate paities." Stratos Mobz``le Nezit)o)"ks, USA, LLC v.
Um'ted Sz‘cztes, 213 F.3d 1375, 1381 (Fed. Cir. 2000). The operative word in the
first two provisions is "will," while the operative word in the competing provision
6
is "inay." The mandatory versus permissive nature of these statements places them
in direct and patent conf1ict.
When a solicitation contains such an ambiguity, the Federal Circuit has
recognized what is known as the doctrine of patent ambiguity. "Under the
doctrine, where a government solicitation contains a patent ambiguity, the
government contractor has ‘a duty to seek clarification from the government, and
its failure to do so precludes acceptance of its interpretation’ in a subsequent action
against the government." Blue & Gold Fleet, L.P. v. Unz'ted States, 492 F.3d 1308,
1313 (Fed. Cir. 2007) (citing Strazos, 213 F.3d at 1381).
As the Circuit has explained, the doctrine:
was established to prevent contractors from taking advantage of the
government, protect other bidders by assuring that all bidders bid on
the same specifications, and materially aid the administration of
government contracts by requiring that ambiguities be raised before
the contract is bid, thus avoiding costly litigation after the fact.
Cmz§y. Heczting & Plunil)z'ng Co. v. Kelso, 987 F.2d 1575, 1580 (Fed. Cir. 1993).
Because Kvichak did not challenge the patent ambiguity prior to award, it cannot
mount a protest on the basis of the mandatory language in sections A.2 and M.8.3
of the solicitation at this stage.
C. Fair Application of the Solicitation Criteria
Patent ambiguity or no, however, the requirements of a solicitation must be
applied equally to all bidders. 48 CFR § 1.602-2(b) (contracting officers must
"[ejnsure that contractors receive impartial, fair, and equitable treatment");
Hczmi'lton Sundstrarza’ Poii)e)' Sys., [nc. v. Unz``tea’ States, 75 Fed. Cl. 512, 516
(2007) (a contracting agency "must treat all offerors equally, evaluating proposals
evenhandedly against common requirements and evaluation criteria") (citing
Banknote Cor_i). of/lmerz``ca v. Unz'ted Slates, 56 Fed. Cl. 377, 384 (2003), ajj‘"’d 365
F.3d 1345 (Fed. Cir. 2004)). See also 48 C.F.R. § 1.102-2(c)(3) ("All contractors
and prospective contractors shall be treated fairly and impartially but need not be
treated the sanie."). Kvichak points to several instances in which it alleges it was
unfairly treated differently than Birdon, in violation of this principle.
1. Unfairness in evaluating reliability
Kvichak claims that the different reliability ratings resulted from the
government’s application of different standards to the proposed design changes
submitted by Kvichak and Birdon:
[T]he SSA failed to assess any increased risk to Birdon’s proposal as a
result of the untested design changes that directly affected reliability
and were made by Birdon to correct reliability failures and based his
award decision on those untested changes while finding the tested
changes proposed by Kvichak to be risky because the changes had
been tested, but not on an integrated water jet.
Doc. 21-2 at 20. "Simply stated, Kvichak’s proposal was held to a different
standard and evaluation process than Birdon’s proposal." Doc. 21-2 at 19. This
claim does nothing more than recast Kvichak’s argument that the government
violated the terms of the solicitation by failing to penalize Birdon when it did not
submit testing data on its hydraulic system, which it argues was required under the
terms of the solicitation. For the reasons stated above, Kvichak has waived the
right to make this argument.
Even if Kvichak had not waived this argument, however, the fact that the
government believed that test data in a representative environment was warranted
with regard to Kvichak’s proposal, but not Birdon’s, does not necessarily indicate
disparate treatment. NCL Logz``stics Co. v. Um``tea' Stales, 109 Fed. Cl. 596, 627
(2013) (finding that plaintiffs disparate treatment argument failed because the
awardee and the protestor had different past performance records).
2. Unfairness in evaluating other technical factors
In addition to challenging the fairness of the evaluation process with regard
to the reliability rating, Kvichak claims that the government did not equitably
assess the conventional rafting speed and forward top speed technical factors.
Doc. 21-2 at 21-22. The solicitation required a threshold rafting speed of 6 feet per
second, and set an objective rafting speed of 8 feet per second. AR at 233.
Kvichak argues that it was improper for the government to rate its proposal as
"good" when it achieved 90% of the objective rafting speed (7.2 feet/second),
while rating Birdon’s proposal as "outstanding" when it achieved 96% of the
objective rafting speed (7.7 feet/second). See Doc. 21-2 at 21. According to
Kvichak, the 6% variance did not justify the different adjectival scores.z
Kvichak alleges that the disparate treatment is further demonstrated by
comparing the conventional rafting speed ratings with the forward top speed
ratings See z``cz’. The government rated Kvichak’s forward top speed as
"outstanding" when its BEB achieved 24 knots, and rated Birdon’s forward top
speed as "good" at a 25% lower speed of 18 knots. See i``d. at 21~22. Wliat
Kvichak seems to suggest is that the government was lenient with Birdon, giving it
a "good" score when its top speed was 25% lower than Kvichak’s, while being less
generous with Kvichak, giving it a "good" score when its rafting speed was only
6% lower than Birdon’s.
There are two significant problems with Kvichak’s position. First, Kvichak
has presented no logical basis for crediting such a simplistic comparison of rafting
speed percentages with top speed percentages. Because Kvichak has made no
effort to explain why this comparison has any value, it appears to the court that
Kvichak has an apples and oranges problem.
Perhaps more importantly, the conclusion that Kvichak asks the court to
draw wades far too deeply into the technical aspects of the proposals. Kvichak
does not claim that the agency used incorrect or incomplete information in
assessing the rafting speed and top speed factors; rather, it challenges the technical
judgment the agency used to arrive at the ultimately assigned adjectival ratings.
See Doc. 21-2 at 21-22; Doc. 27 at 17. But the court’s role is to determine whether
the agency’s actions were arbitrary, not whether they were technically correct.
E.W. Blz``ss C0. v. Um``ted States, 77 F.3d 445, 449 (Fed. Cir. 1996) (stating that
technical ranking decisions are "the minutiae of the procurement process . . .,
which involve discretionary determinations of procurement officials that a court
will not second guess"); Cube Corp. v. Unz``rea’ Szates, 46 Fed. Cl. 368, 386 (2005)
(noting that "the determination of the relative desirability and technical adequacy
of proposals is priinarily a matter of agency discretion").
2 Kvichak also claims that the government’s evaluation of the rafting speed and top speed factors
was inconsistent with the solicitation’s provision for proportional credit, which states: "For
proposed performance between the threshold and objective, proportional extra credit may be
given to the extent that it benefits the Goveriiineiit." AR at 1389 § l\/I.8.8. See Doc. 21-2 at 21;
Doc. 27 at 17. Kvichak does not support its claim with any substantive argument about how the
proportional credit provision is meant to work or how it was allegedly misapplied. The court
will not attempt to fill in the blanks
Disagreement with the agency’s decision is not enough for Kvichak to
prevail. Banknore Corp. of/l)n., [nc. v. Urzz'tea’ States, 56 Fed. Cl. 377, 384 (2003),
a]j"d, 365 F.3d 1345 (Fed. Cir. 2004) (noting that "naked claims [of disagreementj,
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"); Femme Comp. Inc. v. Unz``z‘ed
Stazes, 83 Fed. Cl. 704, 740 (2008)("A protester’s mere disagreement with an
evaluation does not provide an adequate basis to overturn the agency’s decision.").
Here, the record demonstrates that the agency reviewed and analyzed the
technical aspects of each proposal in depth before making its decision with regard
to the rafting speed and top speed ratings. See AR at 5001~5008 (final evaluation
of Birdon’s conventional rafting speed proposal); AR at 5009-5016 (final
evaluation of Birdon’s forward top speed proposal); AR at 5818-5825 (final
evaluation of Kvichak’s conventional rafting speed proposal); AR at 5826-5832
(final evaluation of Kvichak’s forward top speed proposal). Each evaluation
includes a review of the relevant solicitation provisions a description of the
offeror’s proposal, a narrative supporting the adjectival rating, and a summary that
designates the rating and lists the proposal’s strengths and weaknesses. See z``a’.
The agency then made a detailed comparison between Birdon’s and
Kvichak’s proposals See AR at 319-325. The SSAC found "meaningful
distinctions" between the two proposals with regard to both conventional rafting
speed and forward top speed. See AR at 322. ln a reasoned conclusion, the SSAC
explained:
Birdon offers the Government a 7.7 fps Conventional Rafting Speed
when compared to [Kvichak’s] 7.2 fps. This extra 0.5 fps is
substantial as the difference in thrust equates to approximately XXXX
XXX of additional thrust per BEB which has significant operational
implications This additional thrust allows for better control of bays
during rafting and allows for rafting in higher speed currents. While
[Kvichak] offers the Government the advantage of 24 knots when
compared to Birdon’s 18 knots in Forward Top Speed, the least
important subfactor under Technical, the significant advantages
offered by Birdon’s very low risk that it will meet the Reliability
requirements combined with the additional thrust in Conventional
Rafting Speed results in a better value to the Government and merits
payment of the preiniuin price.
10
AR at 324-325. The Source Selection Decision Document, in which the agency
formally chose Birdon’s proposal, explicitly agreed with the SSAC’s analysis and
included additional discussion of the relative merits of the proposals See AR at
301-305. Kvichak has given the court no reason to question the agency’s
proficiency to make such technical determinations In fact, in its motion, Kvichak
notes that the source selection panels were comprised of "technically qualified
individuals." See Doc. 21-2 at 7. The thorough discussion of each proposal, and
the comparison made between Kvichak’s and Birdon’s submissions evinces a
rational basis for the agency’s ratings
Because Kvichak has failed to show that the agency acted arbitrarily, abused
its discretion, or violated any applicable statutes or regulations while rating the
rafting speed and top speed factors, the court need not consider whether Kvichak
was prejudiced by the agency’s actions. See Bcznnum, ]nc. v. Unz``z‘ea’ States, 404
F.3d 1346 (Fed. Cir. 2005) (explaining that the court only conducts a prejudice
analysis if it finds the government’s actions were arbitrary or contrary to law).
Kvichak’s motion for judgment on the administrative record, see Doc. 21, is
DENIED; the government’s motion for judgment on the administrative record, see
Doc. 23, is GRANTED; and Birdon’s motion for judgment on the administrative
record, see Doc. 24, is GRANTED.
IV. lVIOTION FOR PRELIMINARY AND PERMANENT INJUNCTIONS
Kvichak has also asked the couit to grant both preliminary and permanent
injunctions "enjoining Defendants, their officers, agents, employees and
representatives from performance of the contract" awarded to Birdon pursuant to
the solicitation. Doc. 2 at 1.
The court must consider four factors to determine whether permanent
injunctive relief is appropriate:
(1) whether, as it must, the plaintiff has succeeded on the merits of the
case; (2) whether the plaintiff will suffer irreparable harm if the court
withholds injunctive relief; (3) whether the balance of hardships to the
respective parties favors the grant of injunctive relief; and (4) whether
it is in the public interest to grant injunctive relief.
PGBA, LLC v. Uni``red Szates, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004). "The
standard for a preliminary injunction is essentially the same as for a permanent
injunction with the exception that the plaintiff must show a likelihood of success
11
on the merits rather than actual success." See i``a’. at 1229 (quoting Amoco Proa’.
Co. v. Vill. OfGambell, Alaska, 480 U.S. 531, 546 n.12 (1987)).
Because Kvichak has not succeeded on the merits of its case, neither
preliminary nor permanent injunctive relief is appropriate.
Kvichak’s motion for preliminary and permanent injunctive relief, see Doc.
2, is, therefore, DENIED.
ln accordance with the reasoning in this opinion, the clerk is directed to
enter judgment dismissing the case.
SO ()RDERED.
s/ James F. Merow
J ames F. Merow
Senior Judge
12