Laerdal Medical Corp. v. United States

In the United States Court of Federal Claims
No. 13-256 C
(E-Filed Under Seal: July 23, 2013) 1
(E-Filed: July 29, 2013)
)
LAERDAL MEDICAL CORP., )
)
Plaintiff, ) Bid Protest; Cross-Motions for
) Judgment on the Administrative
v. ) Record; Dispute Regarding Technical
) Evaluation of Mannequins to Be Used
THE UNITED STATES, ) to Train Army Combat Medics
)
Defendant, )
)
& )
)
CAE HEALTHCARE, INC., )
)
Defendant-Intervenor. )
)
Cyrus E. Phillips, IV, Arlington, VA, for plaintiff.
Michael D. Snyder, Trial Attorney, with whom were Stuart F. Delery, Acting Assistant
Attorney General, Jeanne E. Davidson, Director, and Martin F. Hockey, Jr., Assistant
Director, Commercial Litigation Branch, Civil Division, United Stated Department of
Justice, Washington, DC, for defendant. Debra J. Talley, Associate Command Counsel,
Protest Division, Army Materiel Command, Redstone Arsenal, AL, of counsel.
Joseph P. Hornyak, McLean, VA, for defendant-intervenor.
OPINION
HEWITT, Chief Judge
1
This Opinion was filed under seal on July 23, 2013, and the parties were offered an
opportunity to propose redactions. No party having proposed a redaction, see Pl.’s Mot. to
Release Unredacted and Public Opinion, Docket Number (Dkt. No.) 47, at 2 (stating that “[t]he
Parties have conferred and neither the Plaintiff, nor the Defendant, nor the Intervenor will
request that designated material be redacted”), the Opinion filed on July 23, 2013 is now
republished.
This is a post-award bid protest brought by Laerdal Medical Corporation (Laerdal
or plaintiff), the awardee of Contract Number W900KK-12-D-0050 (the contract or
Laerdal’s contract) for the delivery of mannequins used to train combat medics. Post-
Award Procurement Protest Compl. (Compl.), Docket Number (Dkt. No.) 1, ¶¶ 1-2. In
this suit, Laerdal challenges a decision by the United States, acting through the United
States Department of the Army’s Program Executive Office, Simulation Training and
Instrumentation Acquisition Center (PEO STRI, the Army, the government or defendant)
to take corrective action in the form of terminating Laerdal’s contract in response to a bid
protest filed with the United States Government Accountability Office (GAO). Id.
Plaintiff and defendant have filed cross-motions for judgment on the
administrative record. Before the court are plaintiff’s and defendant’s cross-motions for
judgment on the administrative record and the associated briefing: Plaintiff’s Motion for
Judgment on the Administrative Record (plaintiff’s Motion), Dkt. No. 31, filed May 7,
2013 with plaintiff’s Statement of Facts, Dkt. No. 31-1, and Plaintiff’s Brief in Support of
Motion for Judgment on the Administrative Record (Pl.’s Mem.), Dkt. No. 31-2;
Defendant’s Opposition to Plaintiff’s Motion for Judgment upon the Administrative
Record and Cross-Motion for Judgment upon the Administrative Record (defendant’s
Motion or Def.’s Mot.), Dkt. No. 40, filed May 31, 2013; Plaintiff’s Opposition to
Defendant’s Cross-Motion for Judgment on the Administrative Record, Dkt. No. 42, filed
June 12, 2013 with plaintiff’s Counter-Statement of Facts, Dkt. No. 42-1, and Plaintiff’s
Brief in Support of Plaintiff’s Opposition to Defendant[’s] Cross-Motion for Judgment on
the Administrative Record (Pl.’s Resp.), Dkt. No. 42-2; and Defendant’s Reply in
Support of Its Cross-Motion for Judgment upon the [Administrative] Record (Def.’s
Reply), Dkt. No. 43, filed June 28, 2013. Defendant-intervenor CAE Healthcare, Inc.
(CAE or defendant-intervenor) has not filed briefing.
I. Background
A. The Solicitation
On April 23, 2012 the government issued Solicitation Number W900KK-12-R-
0013 (the solicitation 2), Admin. R. (AR) 918 (request for proposals (RFP)), for delivery
of high-fidelity tetherless mannequins to be used to train soldiers “to treat wounds in the
combat environment,” AR 1025 (statement of work). The solicitation provided for the
delivery of thirty-eight mannequins during the base year of contract performance and
delivery of up to a total of 130 additional mannequins during four one-year option
periods. AR 629 (Army GAO mem.) (providing contracting officer’s statement of facts);
2
The solicitation consisted primarily of a request for proposals (RFP), see Admin. R.
(AR) 918-1022 (RFP), a statement of work, see AR 1023-41 (statement of work), and a
document providing submission instructions and describing the evaluation criteria to be applied,
see AR 1042-57 (evaluation criteria).
2
AR 1981 (CAE 2d debriefing); see also AR 920-65 (RFP) (listing individually the items
to be delivered). The mannequins were to be purchased as commercial items pursuant to
Federal Acquisition Regulation part 12. See AR 918 (RFP) (titled, in part, “Order for
Commercial Items”); cf. 48 C.F.R. (FAR) pt. 12 (2012) (governing acquisition of
commercial items). The solicitation also provided for the delivery of certain associated
services and equipment. See AR 1026-30 (statement of work) (stating that the awardee
would be required to “provide all commercial products and services necessary to
complete the tasks in this [statement of work]”); see, e.g., AR 920 (RFP) (requiring
delivery of new equipment training).
The solicitation listed forty-nine numbered requirements, which it stated each
mannequin “shall include.” AR 1037-40 (statement of work); see also id. at 1026 (stating
that the awardee “shall deliver [mannequins] that meet the requirements as defined in this
[statement of work]--including the [forty-nine numbered] Requirements”). Seven of
these requirements were identified as “critical requirements.” 3 AR 1055-56 (evaluation
criteria). Of particular relevance to this case: The mannequins were required to permit
remote, tetherless operation and to “allow radio operation from a distance of 300 feet that
is not [in the] direct line of sight.” AR 1037-38 (statement of work). They were to
include “anatomically correct pulse sites,” id. at 1039, and “life-like ears with the
capability to ooze simulated fluids appropriate to related injuries,” id. at 1038.
Additionally, the mannequins were to be able to “simulate bi-lateral tension
pneumothorax” and “human responses to both correctly and incorrectly performed needle
decompression procedures.” 4 Id. at 1039. The mannequins were required to be equipped
3
The “critical requirements” were: facial features, pulses, airway management, a trauma
feature known as surgical cricothyroidotomy, needle capabilities, tourniquet procedures and
antecubital IV placement. AR 1055-56 (evaluation criteria). The critical requirements were
identified using the numbers provided in the list of forty-nine requirements contained in the
statement of work and a short description. See id. (identifying, for example, “A.1.27 Trauma
Features: Surgical Cricothyroidotomy” as a critical requirement). However, the court notes that
some of the numbers by which the critical requirements were identified appear to be off by one,
based on the requirement descriptions. Compare id. and AR 1061-62 (demonstration plan)
(describing how the critical requirements were to be assessed, for example, stating that for
A.1.27 “[e]valuators will perform a cricothyroidotomy”) with AR 1037-40 (statement of work)
(listing forty-nine requirements by number, for example, listing as A.1.27 that the mannequins
“[s]hall provide the capability to perform bilateral chest tube training” but listing as A.1.28 that
the mannequins “[s]hall be capable of being used to demonstrate a surgical Cricothyroidotomy”).
4
Plaintiff Laerdal Medical Corporation (Laerdal or plaintiff) states that “[t]ension
pneumothorax is an abnormal collection of air or gas in the chest cavity that separates the lung
from the chest wall and interferes with normal breathing.” Statement of Facts, Dkt. No. 31-1, at
10. The court understands needle decompression of tension pneumothorax to be the insertion of
a needle into the chest cavity to allow collected air or gas to escape. See id. at 28 (stating that a
mannequin simulated the physiological result of needle decompression by emitting a “hiss of air”
when a needle was inserted into its chest).
3
with “sternal [intraosseous] acceptance sites . . . with the ability to provide fluid
resuscitative treatment.” 5 Id. The mannequins also were to “be capable of being used to
demonstrate the proper procedure for insertion of an IV in brachial veins.” Id. at 1040.
Award was to be made on a best value basis, based on three factors: Technical,
Performance Risk 6 and Price. AR 1053 (evaluation criteria); AR 1011 (RFP). The
Technical factor was to be “significantly more important than the Performance Risk”
factor, and the Performance Risk factor was to be “significantly more important than” the
Price factor. AR 1053 (evaluation criteria); AR 1011 (RFP). Award was to be made
according to “an integrated tradeoff assessment among the evaluation factors and by the
exercise of sound business judgment.” AR 1053 (evaluation criteria).
The solicitation stated that, with respect to the Technical factor, the government
would assign each proposal one of the following five adjectival ratings (Technical
ratings):
Color Rating Description
Blue Outstanding Proposal meets requirements and indicates an exceptional
approach and understanding of the requirements. Strengths far
outweigh any weaknesses. Risk of unsuccessful performance
is very low.
Purple Good Proposal meets requirements and indicates a thorough
approach and understanding of the requirements. Proposal
contains strengths which outweigh any weaknesses. Risk of
unsuccessful performance is low.
Green Acceptable Proposal meets requirements and indicates an adequate
approach and understanding of the requirements. Strengths
and weaknesses are offsetting or will have little or no impact
on contract performance. Risk of unsuccessful performance
is no worse than moderate.
5
The court understands sternal intraosseous infusion to be the infusion of fluids into the
sternum when infusion into a vein or bone in a limb is not possible--for instance, due to
battlefield injury. Oral Argument of July 9, 2013 (Oral Argument), Argument of Cyrus E.
Phillips, IV (Mr. Phillips) at 10:05:29-06:19 (describing sternal intraosseous infusion). (The oral
argument held on July 9, 2013 was recorded by the court’s Electronic Digital Recording system
(EDR). The times noted in citations to the oral argument refer to the EDR.).
6
Each offeror’s performance risk was to be evaluated using its past performance
submission. AR 1047 (evaluation criteria).
4
Yellow Marginal Proposal does not clearly meet requirements and has not
demonstrated an adequate approach and understanding of the
requirements. The proposal has one or more weaknesses which
are not offset by strengths. Risk of unsuccessful performance
is high.
Red Unacceptable Proposal does not meet requirements and contains one or more
deficiencies. Proposal is unawardable.
Id. at 1055 (emphasis omitted). To be considered for award, offerors had to achieve a
Technical rating of at least “Acceptable.” Id. at 1053. This protest concerns the
government’s technical evaluation only. 7 See infra Part III.B-C.
The Technical ratings contemplated that the government’s evaluators would weigh
each offeror’s strengths and weaknesses and would reject any proposal with a deficiency.
See id. at 1055. Accordingly, the following definitions were implemented to facilitate
evaluation under the Technical ratings:
Significant Strength An aspect of the Offeror’s proposal that
appreciably enhances the merit of the
proposal or appreciably increases the
probability of successful contract
performance.
Strength An aspect of the Offeror’s proposal that has
merit or exceeds specified performance or
capability requirements in a way that will
be advantageous to the Government during
contract performance.
Weakness A flaw in the proposal that increases the
risk of unsuccessful contract performance.
Significant Weakness A flaw in the Offeror’s proposal that
appreciably increases the risk of
unsuccessful contract performance.
Deficiency A material failure of a proposal to meet a
Government requirement or a combination
of significant weaknesses in a proposal that
increases the risk of unsuccessful contract
performance to an unacceptable level.
7
Because the parties do not contend that the Performance Risk factor or the Price factor
were evaluated incorrectly, the court does not describe the evaluation of these factors.
5
AR 1501 (1st proposal evaluation report) (emphasis omitted); cf. FAR 15.001 (providing
nearly identical definitions of the terms “deficiency,” “weakness” and “significant
weakness” for use in contracting by negotiation).
The government’s evaluation was to “encompass two distinct events: a system
[capability] demonstration . . . , and a written proposal evaluation.” See AR 1011 (RFP);
see also AR 1475 (technical evaluation I) (stating that the technical evaluation “consisted
of product demonstrations with hands-on evaluations and a thorough review of each
Offeror[’s] written proposal”). In each offeror’s system capability demonstration, the
offeror would be given an opportunity to demonstrate “the extent to which the proposed
product meets or exceeds” the seven requirements that the solicitation described as
“critical requirements.” AR 1055 (evaluation criteria). The government would then
“perform procedures on each system in order to assess each product.” Id.
As to the written proposals, the solicitation provided that the government would
“evaluate the written proposals to determine the extent to which the proposed product
meets or exceeds all requirements stated in the [statement of work].” AR 1022 (RFP).
Offerors were also required to submit a “transmittal letter” with their written proposals, in
which they were to “state that the Offeror is able to meet all requirements.” AR 1045
(evaluation criteria). Offerors “[were] cautioned that while the Government will not
evaluate every . . . requirement . . . for the purposes of the source selection evaluation, the
awardee Contractor will be required to comply with the . . . requirements during delivery
order performance.” Id. at 1054; see also id. at 1044 (stating that “[t]he successful
Offeror will be required to comply with all aspects of the requirements documents
[including the statement of work]”). And offerors were also cautioned that the
government reserved discretion to find that a mannequin did not meet the requirements--
making it ineligible for award--based solely on its evaluation of the offeror’s written
proposal:
The Government may determine, at its discretion, that an Offeror’s
proposal is non-compliant, and therefore, ineligible for award if the
proposal indicates that: it cannot or will not meet any of the . . .
requirements; provides an approach that clearly does not meet any of
the . . . requirements; or, includes data which prompts the Government to
question the Offeror’s compliance with any of the . . . requirements.
Id. at 1054; see also infra Part III.C (discussing the government’s discretion in this
regard).
B. Evaluation and the Award to Laerdal
6
The government evaluated mannequins provided by plaintiff, by CAE and by two
additional offerors. 8 See AR 1475 (technical evaluation I). The government assigned a
Technical rating of “Unacceptable” to the mannequins submitted by the two additional
offerors, which rendered the additional offerors ineligible for award. See AR 1531-32
(1st source selection decision doc.).
With respect to CAE’s mannequin, the government’s evaluators identified three
weaknesses, two significant weaknesses and no deficiencies, certain of which are
particularly relevant to this protest. 9 See AR 1477-79 (technical evaluation I).
Specifically, during the system capability demonstration, CAE’s mannequin did not
properly simulate a reaction when needle decompression of tension pneumothorax was
correctly performed on its right side (a weakness). Id. at 1477-78. The evaluators also
experienced difficulty palpating the mannequin’s carotid pulse and determined that two
of the mannequin’s other pulse sites were “anatomically incorrect” (collectively, a
significant weakness). Id. at 1478. And the evaluators noted that efforts to employ a
particular airway adjunct 10 were unsuccessful (a significant weakness). Id. at 1478-79.
The government rated CAE’s mannequin “Marginal,” which rendered CAE ineligible for
award. AR 1529-30 (1st source selection decision doc.).
With respect to Laerdal’s mannequin, the government’s evaluators identified three
weaknesses, no significant weaknesses and no deficiencies. Id. at 1480-81 (technical
evaluation I). Among the weaknesses was that, during Laerdal’s system capability
demonstration, Laerdal’s mannequin did not properly simulate a reaction to a correctly
performed needle decompression of tension pneumothorax on its left side. Id. at 1481.
Nevertheless, the contracting officer determined that the weaknesses of Laerdal’s
mannequin “[were] offset by the Strengths.” AR 1536 (1st source selection decision
doc.). The government rated Laerdal’s mannequin “Acceptable,” AR 1475 (technical
evaluation I), making Laerdal the only offeror eligible for award, AR 1534 (1st source
selection decision doc.). The contracting officer determined that Laerdal’s mannequin
“[was] the best value to the government” and awarded the contract to Laerdal. Id. at
1535-36.
8
The evaluation and source selection documents refer to the offerors as “Offeror A,”
“Offeror B,” “Offeror C” and “Offeror D.” See, e.g., AR 1475 (technical evaluation I). “Offeror
A” is CAE Healthcare, Inc. (CAE). AR 1564 (CAE 1st debriefing); AR 1994 (CAE 2d
debriefing). “Offeror B” is Laerdal. AR 2058 (Laerdal debriefing).
9
The parties do not challenge the strengths found in each proposal.
10
An airway adjunct is a device that allows medical personnel to assist a patient who is
unable to breathe normally. See, e.g., AR 1599-1602 (describing airway adjuncts produced by
one manufacturer).
7
C. The First GAO Protests and Defendant’s Corrective Action
On September 14, 2012 CAE filed a bid protest with GAO, see generally AR 723-
46 (CAE GAO protest I), focusing primarily on the government’s technical evaluation of
CAE’s and Laerdal’s mannequins, see id. at 732-43 (discussing the government’s
technical evaluation). On September 17, 2012 the government issued a stop work order
to Laerdal. See AR 1594-95 (stop work order). On October 22, 2012, after receiving the
agency record and other discovery documents, CAE filed a supplemental protest, again
focusing on the technical evaluation of CAE’s and Laerdal’s mannequins. See generally
AR 1773-80 (CAE GAO protest I supp.). The government informed GAO that it would
take corrective action by reevaluating the mannequins, and on November 8, 2012 GAO
dismissed CAE’s protest and supplemental protest as academic. AR 1901 (GAO decision
I).
The government reevaluated the CAE and Laerdal written proposals, and on
December 4, 2012 the government conducted a second set of system capability
demonstrations. AR 2363 (2d source selection decision doc.).
As to CAE’s mannequin, the evaluators identified seven weaknesses, one
significant weakness and no deficiencies. See AR 1934-38 (technical evaluation II).
Most of the new weaknesses were identified based on CAE’s written proposal. See id. at
1934-37 (describing the new weaknesses). However, of significance to this protest,
during the second capability demonstration one weakness and one significant weakness
that had occurred during the first capability demonstration did not recur, and two
additional weaknesses were observed for the first time. See id.; see also infra Part III.B
(discussing plaintiff’s contentions with respect to repeatability of observations).
Specifically, during the second demonstration the evaluators were able to perform needle
decompression of tension pneumothorax on the right side, whereas the failure to perform
such decompression had been listed as a weakness after the first demonstration. Compare
AR 1477-78 (technical evaluation I) (listing failure to perform such decompression as a
weakness during the first demonstration) with AR 1934-37 (technical evaluation II) (not
listing failure to perform such decompression as a weakness). During the second
demonstration, the evaluators were also able to employ an airway adjunct, whereas the
inability of evaluators to employ an airway adjunct had been listed as a significant
weakness after the first demonstration. Compare AR 1478-79 (technical evaluation I)
(listing the inability of evaluators to employ an airway adjunct as a significant weakness)
with AR 1937-38 (technical evaluation II) (not listing the inability of evaluators to
employ an airway adjunct as a significant weakness). Further, the evaluators observed
for the first time during the second demonstration that CAE’s mannequin had pre-cut
holes for use in simulating needle decompression of tension pneumothorax. AR 1936-37
(technical evaluation II). The evaluators determined that the pre-cut holes would prevent
“realistic training” because they “reveal the answer to the trainee rather than allow the
Instructor to teach and test the trainee on the proper needle chest decompression
8
procedure,” which involves identifying the correct location for insertion of the needle.
Id. at 1937. Finally, the evaluators observed for the first time during the second
demonstration that the brachial vein was in the wrong location on CAE’s mannequin,
preventing proper simulation of IV therapy using the brachial vein. Id. at 1936. The
government again rated CAE’s mannequin “Marginal.” See id. at 1938.
As to Laerdal’s mannequin, the evaluators identified three weaknesses and no
significant weaknesses or deficiencies. Id. at 1941-42. The three weaknesses were
substantially the same as those identified after the first system capability demonstration.
Compare id. with AR 1480-81 (technical evaluation I). The government again rated
Laerdal’s mannequin “Acceptable.” AR 1943 (technical evaluation II). The contracting
officer again determined that Laerdal’s mannequin offered the best value to the
government and selected Laerdal for award. See AR 2372 (2d source selection decision
doc.).
D. The Second GAO Protests and Defendant’s Corrective Action
On February 6, 2013 CAE filed a second bid protest with GAO. AR 2083 (Apr. 5,
2013 letter from Army to GAO). CAE filed supplemental protests on February 11, 2013
and March 25, 2013. Id. In a letter dated April 5, 2013, the government advised GAO as
follows:
The Army has reviewed the solicitation, the Statement of Work, and the
Proposal Evaluation Report in light of Protester’s supplemental protest
grounds and has concluded that this solicitation should be cancelled
because neither the Protester’s mannequin nor Laerdal’s mannequin
satisfied the requirements of the solicitation and Statement of Work. The
Army will re-evaluate its requirement and the availability of technology in
existence to meet the requirement. It may or may not issue a new
solicitation for mannequins at some point in the future as need and
availability of technology occur.
Id. at 2084. The government requested that GAO dismiss the protest as academic, see id.,
which GAO did on April 8, 2013, AR 1930 (GAO decision II). On April 9, 2013 the
government notified Laerdal by e-mail that it was terminating the contract for
convenience. AR 1944-45 (termination for convenience).
Plaintiff filed this action the same day. See generally Compl. (bearing an April 9,
2013 date stamp).
On April 17, 2013 Joseph A. Giunta, Jr. (Mr. Giunta), principal assistant
responsible for contracting at PEO STRI and director of the PEO STRI Acquisition
Center, signed a “Memorandum for Record,” explaining why he decided to take
9
corrective action after the second GAO protests by terminating Laerdal’s contract for
convenience. 11 AR 1954-55 (Giunta mem.) (some capitalization omitted). Mr. Giunta
explained that this decision “was based upon the fact that the solicitation did not permit
trade-offs within the technical evaluation factors . . . , and upon the fact that the
solicitation required that the mannequins meet every one of the 49 required technical
requirements to be considered for award.” Id. at 1954. Mr. Giunta noted that, according
to CAE’s own proposal, CAE’s mannequin did not comply with three of the solicitation
requirements: the capacity for radio operation at a distance of 300 feet, ears that ooze
simulated fluids and sternal intraosseous acceptance sites. Id. at 1954-55. Mr. Giunta
also noted that, although the solicitation required each mannequin to simulate accurate
responses to correctly and incorrectly performed needle decompression of tension
pneumothorax, the government’s evaluators were unable to perform this procedure on the
left side of Laerdal’s mannequin during the system capability demonstration. Id. at 1955
(Giunta mem.). Mr. Giunta stated that, “[s]ince neither of the Offerors’ proposals could
clearly meet the Solicitation requirements[,] I determined that the most appropriate
course of action would be to terminate the contract with Laerdal for convenience and
cancel the current Solicitation.” Id. He intends to revise and recompete the solicitation.
See id.
II. Legal Standards
A. Jurisdiction
Subject matter jurisdiction is a threshold matter that a court must determine at the
outset of a case. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998);
PODS, Inc. v. Porta Stor, Inc., 484 F.3d 1359, 1365 (Fed. Cir. 2007). The United States
Court of Federal Claims (Court of Federal Claims) has “jurisdiction to render judgment
on an action by an interested party objecting to . . . the award of a contract [by a federal
agency] or any alleged violation of statute or regulation in connection with a procurement
or a proposed procurement.” 28 U.S.C. § 1491(b)(1) (2006). In the context of a
challenge to a procuring agency’s corrective action, “[t]he Court of Federal Claims
possesses jurisdiction to determine if a corrective action taken by an agency in response
to a bid protest was reasonable under the circumstances.” Centech Grp., Inc. v. United
States, 79 Fed. Cl. 562, 574 (2007) (citing, inter alia, Chapman Law Firm Co. v.
Greenleaf Constr. Co., 490 F.3d 934, 938 (Fed. Cir. 2007)), aff’d, 554 F.3d 1029 (Fed.
11
Agency counsel represents that this decision was made by Joseph A. Giunta, Jr. (Mr.
Giunta) because the contracting officer was out of the office to recover from surgery.
Telephonic Status Conference (TSC) of Apr. 9, 2013, at 5:17:19-28 (Debra Talley). (The TSC
held on April 9, 2013 was recorded by the court’s EDR system. The times noted refer to the
EDR record of the TSC). Agency counsel also represents that Mr. Giunta is the contracting
officer’s supervisor. See id. at 5:17:19-26. This information, however, does not appear to be in
the administrative record.
10
Cir. 2009). A protestor must show that it has standing by meeting the “interested party”
standard, that is, by showing that it (1) is an actual or prospective bidder or offeror, and
(2) has a direct economic interest in the outcome of the procurement. Rex Serv. Corp. v.
United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006).
B. Motions for Judgment on the Administrative Record
Rule 52.1(c) of the Rules of the United States Court of Federal Claims (RCFC)
provides for motions for judgment on the administrative record. See RCFC 52.1(c)(1).
A motion for judgment on the administrative record is “distinguish[able]” from a motion
for summary judgment in that there is no requirement that all material facts be
undisputed. Bannum, Inc. v. United States (Bannum), 404 F.3d 1346, 1355 (Fed. Cir.
2005); see also RCFC 52.1 rules committee notes (2006) (“Summary judgment standards
are not pertinent to judicial review upon an administrative record.”). Instead, judgment
on the administrative record “provide[s] for an expedited trial” on the evidence in the
administrative record, permitting the court to make factual findings. See Bannum, 404
F.3d at 1356.
C. Bid Protest Standard of Review
“The standards and criteria governing the court’s review of agency decisions [on a
Rule 52.1(c) motion] vary depending upon the specific law to be applied in particular
cases.” RCFC 52.1 rules committee notes (2006). In the bid protest context, the court
“shall review the agency’s decision pursuant to the standards set forth in section 706 of
title 5” of the United States Code, 28 U.S.C. § 1491(b)(4), that is, under the
Administrative Procedure Act standard, Impresa Construzioni Geom. Domenico Garufi v.
United States (Impresa), 238 F.3d 1324, 1332 (Fed. Cir. 2001).
“A bid protest proceeds in two steps.” Bannum, 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. Id.; accord PAI Corp. v.
United States, 614 F.3d 1347, 1351 (Fed. Cir. 2010); cf. 5 U.S.C. § 706(2)(A) (2006)
(stating that the reviewing court shall set aside an agency decision that is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law”). The second
step is to determine whether the error was prejudicial. Bannum, 404 F.3d at 1351.
“The arbitrary and capricious standard [applied in the first step] . . . is highly
deferential” and “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); see also PAI Corp., 614 F.3d at
1351 (“[P]rocurement decisions are subject to a highly deferential rational basis review.”
(internal quotation marks omitted)). “[T]he test for reviewing courts is to determine
whether the contracting agency provided a coherent and reasonable explanation of its
exercise of discretion.” Impresa, 238 F.3d at 1332-33 (internal quotation marks omitted).
11
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, 586 F.3d 1372, 1375
(Fed. Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983)). The contracting officer’s decision may be found
to lack a rational basis, for example, if the agency “fail[ed] to follow the terms of its own
Solicitation and select[ed] . . . an offeror based upon different requirements than those
imposed upon [another] offeror.” Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243, 273,
modified on other grounds per stipulation, 63 Fed. Cl. 141 (2004). When examining
agency corrective action, the court considers whether the corrective action was
“reasonable under the circumstances.” Sierra Nev. Corp. v. United States, 107 Fed. Cl.
735, 750 (2012); see Sheridan Corp. v. United States, 95 Fed. Cl. 141, 151 (2010)
(“[T]his Court . . . will not object to an agency’s proposed corrective action provided it is
reasonable under the circumstances.” (alteration and omission in original) (internal
quotation marks omitted)), appeal dismissed per stipulation, 453 F. App’x 973 (Fed. Cir.
2011) (unpublished); ManTech Telecomms. & Info. Sys. Corp. v. United States, 49 Fed.
Cl. 57, 65 (2001) (same), aff’d per curiam, 30 F. App’x 995 (Fed. Cir. 2002)
(unpublished).
Technical evaluations “involve discretionary determinations of procurement
officials that a court will not second guess.” E.W. Bliss Co. v. United States, 77 F.3d
445, 449 (Fed. Cir. 1996). Accordingly, a particularly high level of deference is granted
to the agency’s technical evaluation. L-3 Commc’ns EOTech, Inc. v. United States (L-3
EOTech), 87 Fed. Cl. 656, 664 (2009); see also Fort Carson Support Servs. v. United
States (Fort Carson), 71 Fed. Cl. 571, 586 (2006) (“In particular, 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.”).
To determine whether the error was prejudicial, the second step of bid protest
review, the court must determine whether “there was a ‘substantial chance’ [that the
plaintiff] would have received the contract award but for the errors” in the bid process.
Bannum, 404 F.3d at 1353 (quoting Info. Tech. & Applications Corp. v. United States,
316 F.3d 1312, 1319 (Fed. Cir. 2003)).
D. Contract Interpretation
“Contract interpretation begins with the plain language of the agreement.” Foley
Co. v. United States, 11 F.3d 1032, 1034 (Fed. Cir. 1993). “When interpreting the
contract, the document must be considered as a whole and interpreted so as to harmonize
and give reasonable meaning to all of its parts.” NVT Techs., Inc. v. United States, 370
F.3d 1153, 1159 (Fed. Cir. 2004). If a solicitation contains a patent ambiguity, meaning
12
that it “contains facially inconsistent provisions,” Stratos Mobile Networks USA, LLC v.
United States, 213 F.3d 1375, 1381 (Fed. Cir. 2000), “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. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007) (internal
quotation marks omitted).
III. Discussion
Plaintiff requests judgment on the administrative record as to two issues: that the
system capability demonstrations conducted by the government’s evaluators do not
support the government’s decision to take corrective action, Pl.’s Mem. 27-29; and that
the government’s decision to take corrective action must be set aside because it was
based on a mistaken belief that the solicitation required the offerors to meet each of forty-
nine numbered requirements, id. at 32. 12 The court considers plaintiff’s arguments in
turn.
A. The Court Has Jurisdiction
12
Plaintiff also asks the court to find that the decisions to make an award to plaintiff and
to renew the award after the first GAO protests were rational. See Pl.’s Br. in Supp. of Mot. for
J. on the AR (Pl.’s Mem.), Dkt. No. 31-2, at 30, 34. Because the court upholds the decision to
terminate plaintiff’s contract, see infra Parts III-IV, it does not reach this issue. The court notes,
however, the contradiction in plaintiff’s arguments. Plaintiff contends that the government’s
decision to take corrective action was irrational because it was based in part on the system
capability demonstrations. See Pl.’s Mem. 27-29. Yet plaintiff also contends that the award
decisions were rational, see id. at 30, although they were based in part on the system capability
demonstrations, see AR 1525-36 (1st source selection decision doc.) passim (referring to the first
system capability demonstrations); AR 2362-72 (2d source selection decision doc.) passim
(referring to the second system capability demonstrations). Plaintiff was unable to explain this
inconsistency at oral argument. See Oral Argument of Mr. Phillips at 10:20:02-21:41.
Initially, plaintiff also contended that the government’s decision to take corrective action
was “unauthorized and an unlawful violation of Federal Acquisition Regulation . . . 1.602-
1(a), . . . because it [was] made by [in-]house counsel at Army Materiel Command and not by
the . . . Contracting Officer.” Post-Award Procurement Protest Compl., Dkt. No. 1, ¶ 5; see also
Pl.’s Mem. 33-34 (requesting declaratory judgment that the decision to take corrective action
was “unauthorized and . . . unlawful”). At oral argument, however, in response to the court’s
question whether plaintiff had conceded this point in light of the memorandum written by Mr.
Joseph A. Giunta, Jr. (Mr. Giunta), plaintiff stated: “Now that the Army has provided the
justification [in the Giunta memorandum] . . . . I think the Army is entitled to the benefit of the
assumption that it just took a while for the documentation to catch up to the decision.” See Oral
Argument of Mr. Phillips at 10:19:15-49. Therefore, the court understands plaintiff to have
withdrawn this argument.
13
Subject matter jurisdiction is a threshold matter that a court must determine at the
outset of a case. See Steel Co., 523 U.S. at 94-95. In the context of a challenge to a
procuring agency’s corrective action, “[t]he Court of Federal Claims possesses
jurisdiction to determine if a corrective action taken by an agency in response to a bid
protest was reasonable under the circumstances.” Centech Grp., Inc., 79 Fed. Cl. at 574.
A protestor must show that it has standing by meeting the “interested party” standard,
that is, by showing that it (1) is an actual or prospective bidder or offeror, and (2) has a
direct economic interest in the outcome of the procurement. Rex Serv. Corp., 448 F.3d at
1307. Defendant does not contend that the court lacks jurisdiction to hear plaintiff’s
claims, presumably because the facts of this case lend themselves to a finding that
jurisdiction in this court is proper. Specifically, in this action, plaintiff challenges the
government’s corrective action, see Compl. ¶ 1, making this court’s jurisdiction proper,
cf. Centech Grp., Inc., 79 Fed. Cl. at 574. In addition, plaintiff has standing because, as
the awardee of the contract terminated by the government’s corrective action, see Compl.
¶ 1, plaintiff is an actual offeror with a direct economic interest in the outcome of the
procurement, cf. Rex Serv. Corp., 448 F.3d at 1307.
B. The Army’s Reliance on the System Capability Demonstrations Was
Reasonable
Mr. Giunta’s decision to take corrective action was based in part on the evaluators’
observation, during the system capability demonstrations, that Laerdal’s mannequin did
not meet the requirement to “simulate human responses to both correctly and incorrectly
performed needle decompression procedures.” See AR 1955 (Giunta mem.) (internal
quotation marks omitted); cf. AR 1039 (statement of work) (stating same); see also supra
Part I.B-C (describing the system capability demonstrations).
Plaintiff contends that the system capability demonstrations do not support the
government’s decision to take corrective action because they were flawed in two
respects. Pl.’s Mem. 27-29. First, the evaluators made somewhat different observations
in the two demonstrations. See id. In the first demonstration, the evaluators were unable
to use a particular airway adjunct with CAE’s mannequin, which they determined was a
significant weakness. See id. at 27; supra Part I.B (describing the first demonstration).
In the second demonstration, the evaluators were able to use the airway adjunct, but
noticed that CAE’s mannequin had pre-cut holes for insertion of the needle used in
simulated decompression of tension pneumothorax. Pl.’s Mem. 27-28; supra Part I.C
(describing the second demonstration). Because the pre-cut holes would “not allow for
realistic training,” the evaluators assigned CAE’s mannequin an additional weakness.
See AR 1936-37 (technical evaluation II). The evaluators also observed that the brachial
vein was in the wrong location on CAE’s mannequin, which would not allow correct
training on IV infusion, and assigned CAE another weakness on this basis. Id. at 1936.
Plaintiff contends that “Occam’s razor, his theory of parsimony, demands repeatable
14
observations,” and that “[w]ithout repeated observations of the same phenomenon, any
conclusions are random, and therefore . . . irrational.” 13 Pl.’s Mem. 28.
Second, plaintiff contends, the system capability demonstrations were flawed
because “[s]ome of PEO-STRI’s Technical Evaluators were more skilled, others less so--
and some were more recently experienced conducting the seven required procedures.”
Id. Paraphrasing the declaration of one of plaintiff’s employees, Jimmy Glover (Mr.
Glover), plaintiff states that some of the government’s evaluators found the difficulty
other evaluators experienced in conducting the procedures “laughable.” See id. The
relevant portion of Mr. Glover’s declaration states that he was present during the second
system capability demonstration, see AR 2080 (Glover decl.), and describes the
evaluators’ levels of skill as follows:
It was obvious to me and to numerous evaluators[] that some of the
evaluators were either more skilled or that some were more recently
practiced than other evaluators. Some of the evaluators actually joked at
the difficulties some other evaluators were having at performing the
prescribed procedure. Those difficulties were most obvious when some
were handling and using the various airway adjuncts, performing a
clinically correct surgical cricothyroidotomy, correctly palpating the site for
and inserting a needle for chest decompression, and in correctly performing
an IV in a brachial vein. While some had these difficulties, other evaluators
were able to perform all of the required skills and procedures effortlessly.
id. at 2082; see also id. (stating that Mr. Glover is an employee of Laerdal).
“The arbitrary and capricious standard . . . is highly deferential” and “requires a
reviewing court to sustain an agency action evincing rational reasoning and consideration
of relevant factors.” Advanced Data Concepts, Inc., 216 F.3d at 1058. In particular, the
contracting agency’s technical evaluation “involve[s] discretionary determinations of
procurement officials that a court will not second guess,” E.W. Bliss Co., 77 F.3d at 449,
and is entitled to a high level of deference, L-3 EOTech, 87 Fed. Cl. at 664; see also Fort
Carson, 71 Fed. Cl. at 586 (similar). When examining agency corrective action, the court
13
Plaintiff does not define Occam’s razor but cites Wikipedia, see Pl.’s Mem. 28, which
provides the following definition: “Occam’s razor . . . is a principle of parsimony, economy, or
succinctness used in logic and problem-solving. It states that among competing hypotheses, the
hypothesis with the fewest assumptions should be selected.” Occam’s razor, Wikipedia,
http://en.wikipedia.org/wiki/Occam%27s_razor (last visited July 19, 2013). Wikipedia does not
state that Occam’s razor requires results to be repeatable. At oral argument, plaintiff stated--
without citation to authority--that the requirement of repeatability is “[a] common principle of
science.” Oral Argument of Mr. Phillips at 10:11:10-14.
15
considers whether the corrective action was “reasonable under the circumstances.” Sierra
Nev. Corp., 107 Fed. Cl. at 750; see Sheridan Corp., 95 Fed. Cl. at 151 (similar).
Applying this standard, the court finds plaintiff’s first argument--that the results of
the two system capability demonstrations were “random” and “irrational” because they
differed, see Pl.’s Mem. 28--unpersuasive. Plaintiff cites no case in which retesting of
products by a procuring agency was found invalid because the second test yielded a
different outcome than the first test. Instead, it appears reasonable to the court that, upon
retesting the mannequins, the evaluators might observe features that had previously
escaped their notice and succeed in using an airway adjunct they had been unable to
employ during the previous system capability demonstration. Such differences appear to
the court to reflect not random or arbitrary results but rather the results of additional
observation of the mannequins and greater familiarity with their use. Cf. Advanced Data
Concepts, Inc., 216 F.3d at 1058; E.W. Bliss Co., 77 F.3d at 449; Sierra Nev. Corp., 107
Fed. Cl. at 750.
With respect to plaintiff’s second contention--that certain of the government’s
evaluators were less qualified than others, Pl.’s Mem. 28--“[t]he composition of an
agency’s evaluation team is a matter in which the agency has great discretion,” Software
Eng’g Servs., Corp. v. United States (Software Eng’g), 85 Fed. Cl. 547, 556 (2009);
accord Chenega Mgmt., LLC. v. United States, 96 Fed. Cl. 556, 587 (2010).
Accordingly, if “the expertise of the evaluators is unrelated to bad faith, conflict of
interest, or bias, this Court will not question the composition of the technical evaluation
team.” Software Eng’g, 85 Fed. Cl. at 557. Because plaintiff has not alleged bad faith, a
conflict of interest or bias on the part of the evaluators, the court will not question the
qualifications of the government’s evaluators. Cf. id.
The court therefore concludes that Mr. Giunta’s decision to take corrective action
was not unreasonable under the circumstances because of his reliance on the system
capability demonstrations or on evaluators whose qualifications plaintiff questions. 14 Cf.
Sierra Nev. Corp., 107 Fed. Cl. at 750; Sheridan Corp., 95 Fed. Cl. at 151.
14
Plaintiff also contends that the determination by Mr. Giunta to terminate the contract for
convenience was “arbitrary or capricious” because the memorandum in which he memorialized
the decision did not “demonstrate[] consideration of all the facts.” Pl.’s Br. in Supp. of Pl.’s
Opp’n to Def.’s Cross-Mot. for J. on the AR (Pl.’s Resp.), Dkt. No. 42-2, at 29; see also Pl.’s
Mem. 33 (requesting declaratory judgment based on an alleged lack of consideration of relevant
facts). Specifically, plaintiff contends, Mr. Giunta failed to consider the fact that Laerdal’s
written proposal stated that its mannequin was capable of simulating needle decompression of
tension pneumothorax on both sides of the body and that Laerdal’s employees were able to
perform this procedure during the system capability demonstrations. See Pl.’s Resp. 29.
16
C. The Solicitation Required Compliance with the Forty-Nine Numbered
Requirements
In his memorandum, Mr. Giunta stated that his decision to terminate Laerdal’s
contract was based, in part, “upon the fact that the solicitation required that the
mannequins meet every one of the 49 required technical requirements to be considered
for award.” AR 1954 (Giunta mem.). In Mr. Giunta’s view, the solicitation did not allow
tradeoffs to be made between a proposal’s strengths and its failures to meet solicitation
requirements. See id.; see also supra Part I.B-C (describing the contracting officer’s
tradeoff analysis). Mr. Giunta noted that, according to CAE’s own proposal, CAE’s
mannequin did not comply with three of the solicitation’s requirements: the capacity for
radio operation at a distance of 300 feet, ears that ooze simulated fluids and sternal
intraosseous acceptance sites. AR 1954-55 (Giunta mem.). Mr. Giunta also noted that,
although the solicitation required each mannequin to simulate responses to correctly and
incorrectly performed needle decompression of tension pneumothorax, the government’s
evaluators were unable to perform this procedure on the left side of Laerdal’s mannequin
during the system capability demonstrations. Id. at 1955; see also supra Part I.B
(describing the contracting officer’s determination that Laerdal’s mannequin did not
perform this function). Mr. Giunta stated that, “[s]ince neither of the Offerors’ proposals
could clearly meet the Solicitation requirements[,] I determined that the most appropriate
course of action would be to terminate the contract with Laerdal for convenience and
cancel the current Solicitation.” AR 1955 (Giunta mem.).
Relying on the proposition that a procurement decision “based on irrelevant
factors . . . is arbitrary” and must be set aside, plaintiff contends that Mr. Giunta’s
decision to terminate Laerdal’s contract was arbitrary and must be set aside because it
was based on his incorrect belief that the solicitation required the mannequins to comply
with each of the forty-nine requirements. See Pl.’s Mem. 32-33 (citing Advanced Data
Concepts, Inc., 216 F.3d at 1058). Rather than requiring offerors to meet each technical
requirement, plaintiff continues, the solicitation granted the contracting officer
“discretion to decide which, if any, of the forty-nine specific requirements for the . . .
mannequins would be disqualifying.” Id. at 32 (emphasis omitted). As support for its
position, plaintiff quotes the following passage of the solicitation:
Mr. Giunta’s reliance on the evaluators’ observations was consistent with the evaluation
framework set out in the solicitation, pursuant to which--regardless of the offerors’ claims in
their written proposals--certain of each mannequin’s capabilities were to be assessed directly by
the government’s evaluators after demonstration by the offeror’s employees. Cf. AR 1055
(evaluation criteria) (stating that, during the system capability demonstrations, “the Government
will perform procedures on each system in order to assess each product”). Therefore, no
explanation was required for Mr. Giunta’s reliance on the evaluators’ observations.
17
The Government may determine, at its discretion, that an Offeror’s
proposal is non-compliant, and therefore, ineligible for award if the
proposal indicates that: it cannot or will not meet any of the [statement of
work] . . . requirements; provides an approach that clearly does not meet
any of the [statement of work] . . . requirements; or, includes data which
prompts the Government to question the Offeror’s compliance with any of
the [statement of work] . . . requirements.
Id. at 10 (emphasis and internal quotation marks omitted); cf. AR 1054 (evaluation
criteria) (stating same).
Plaintiff further contends that the solicitation created a “scheme where observed
‘Strengths’ and ‘Weaknesses’ could be offset, one against the other.” Pl.’s Resp. 28; see
Oral Argument of July 9, 2013 (Oral Argument), Argument of Cyrus E. Phillips, IV at
10:24:19-31 (“The solicitation provides a rating scheme where you trade off what
capabilities you comply with with which capabilities you can’t and what additional
capabilities you offer.”). “What would be the point,” plaintiff asks, “of the adjectival
ratings set out in the [solicitation] if all that was required was a check-list for the forty-
nine capabilities listed in the Statement of Work?” Pl.’s Resp. 30-31. Plaintiff further
asserts that “‘[w]herever reasonable, the manifestations of intention of the parties to a
promise or agreement are interpreted as consistent with each other and with any relevant
course of performance, course of dealing, or usage of trade.’” Id. at 31 (alteration in
original) (quoting Restatement (Second) of Contracts § 202 (1981)). Plaintiff argues that
the contracting officer’s decisions to award the contract to Laerdal and to award the
contract to Laerdal again after the first GAO protests formed a course of conduct
suggesting that “a single non-compliance with [the forty-nine requirements] set out . . . in
[the] Statement of Work was not automatically disqualifying.” Id. at 31-32.
Defendant responds that “offerors were required to meet all the requirements of
the Solicitation--including the 49 specific requirements enumerated in . . . the [statement
of work]--and neither Laerdal nor CAE met all of the requirements.” Def.’s Mot. 14.
Defendant contends that the evaluation process resulting in the awards to Laerdal was
flawed and suggests that “the genesis of the problem” was that the evaluators incorrectly
classified failures to meet solicitation requirements as “weaknesses,” which could be
offset by strengths, instead of defining them as “deficiencies,” a mistake the contracting
officer failed to correct. See Oral Argument of Michael D. Snyder (Mr. Snyder) at
10:50:14-37; cf. AR 1501 (1st proposal evaluation report) (defining a “Weakness” as “[a]
flaw in the proposal that increases the risk of unsuccessful contract performance” and a
“Deficiency” as including “[a] material failure of a proposal to meet a Government
requirement”); AR 1055 (evaluation criteria) (allowing for tradeoffs between strengths
and weaknesses but stating that a proposal “contain[ing] one or more deficiencies” is
“unawardable”). According to defendant, the Army “erroneously engaged in ‘trade-off’
analysis[] [when awarding the contract to Laerdal although] neither CAE nor Laerdal met
18
the 49 requirements.” Def.’s Mot. 16. Because the resulting awards to Laerdal were
incorrectly made, defendant argues, “cancelation of the solicitation was appropriate.”
Def.’s Reply 4; see also Oral Argument of Mr. Snyder at 10:25:25-34 (“The Army acted
rationally and reasonably by canceling this solicitation . . . . The Army would have acted
irrationally and unreasonably if it had not done so.”).
“The arbitrary and capricious standard . . . is highly deferential” and “requires a
reviewing court to sustain an agency action evincing rational reasoning and consideration
of relevant factors.” Advanced Data Concepts, Inc., 216 F.3d at 1058; see also PAI
Corp., 614 F.3d at 1351 (similar). However, the contracting officer’s decision may be
found to lack a rational basis if the agency “fail[ed] to follow the terms of its own
Solicitation.” Hunt Bldg. Co., 61 Fed. Cl. at 273. When examining agency corrective
action, the court considers whether the corrective action was “reasonable under the
circumstances.” Sierra Nev. Corp., 107 Fed. Cl. at 750; see Sheridan Corp., 95 Fed. Cl.
at 151 (similar). In this case, whether the government’s corrective action should be
sustained depends on interpretation of the solicitation. Interpretation of a solicitation
“begins with the plain language of the [solicitation].” See Foley Co., 11 F.3d at 1034.
“When interpreting the [solicitation], the document must be considered as a whole and
interpreted so as to harmonize and give reasonable meaning to all of its parts.” See NVT
Techs., Inc., 370 F.3d at 1159.
The court agrees with defendant that the plain language of the solicitation required
the mannequins to comply with each of the forty-nine requirements. Cf. Foley Co., 11
F.3d at 1034 (stating that interpretation of a solicitation “begins with the plain language
of the [solicitation]”). First, the Technical ratings set out in the solicitation were defined
in such a manner that an offeror who did not meet all of the requirements was ineligible
for award. Specifically, a proposal that “[did] not clearly meet [the] requirements” was to
be rated “Marginal,” AR 1055 (evaluation criteria), and therefore ineligible for award,
see id. at 1053 (defining eligibility). A proposal that “[did] not meet [the] requirements
and contain[ed] one or more deficiencies,” was to be rated “Unacceptable,” AR 1055
(evaluation criteria), and therefore ineligible for award, see id. at 1053; see also AR 1501
(1st proposal evaluation report) (defining a deficiency, in part, as “[a] material failure of a
proposal to meet a Government requirement”). The three Technical ratings making a
proposal eligible for award, see AR 1053 (evaluation criteria) (defining eligibility)--
“Outstanding,” “Good” and “Acceptable”--could only be assigned to proposals that
“me[t] [the] requirements,” id. at 1055. The solicitation contemplated that strengths
would be weighed against weaknesses to arrive at a Technical rating. See id. For
instance, if a proposal’s “[s]trengths far outweigh [its] weaknesses,” the proposal was to
be rated “Outstanding.” Id. However, at no point did the solicitation suggest that a
19
strength could be weighed against a deficiency, such as a failure to meet solicitation
requirement. 15
Consistent with this evaluation framework, the solicitation repeatedly stressed that
offerors were required to meet each of the solicitation requirements. Specifically, the
solicitation stated that the mannequins “shall include” the forty-nine numbered
requirements. AR 1037 (statement of work) (emphasis added); see also id. at 1026
(stating that the awardee “shall deliver [mannequins] that meet the requirements as
defined in this [statement of work]--including the [forty-nine numbered] Requirements”).
The solicitation also required offerors to send a transmittal letter, which was to “state that
the Offeror is able to meet all requirements,” AR 1045 (evaluation criteria), and
“cautioned” offerors that, “while the Government will not evaluate every [statement of
work] . . . requirement . . . , the awardee Contractor will be required to comply with the
[statement of work] . . . requirements during delivery order performance,” id. at 1054; see
also id. at 1044 (stating that “[t]he successful Offeror will be required to comply with all
aspects of the requirements documents,” including the statement of work). Additionally,
it stated that, during the technical evaluation, “[t]he evaluators [would] evaluate the
written proposals to determine the extent to which the proposed product meets or exceeds
all requirements stated in the [statement of work].” Id. at 1056 (emphasis added).
Contrary to plaintiff’s view, the solicitation provision upon which plaintiff relies,
see Pl.’s Mem. 10 (citing the evaluation criteria provision discussing the government’s
discretion to reject a proposal as noncompliant), is also consistent with an evaluation
framework in which offerors had to meet each of the forty-nine requirements, 16 cf. NVT
Techs., Inc., 370 F.3d at 1159 (stating that a contract “must be considered as a whole and
interpreted so as to harmonize and give reasonable meaning to all of its parts”). The
15
At oral argument, defendant provided the following example of how weaknesses and
the requirements might interact: “You could technically meet a requirement but still have a
weakness with respect to that requirement. Perhaps technically you can perform a certain task,
but you are concerned that the durability of that component of the mannequin is weak and it
could break easily.” Oral Argument of Michael D. Snyder at 10:27:55-28:10.
16
To the extent that plaintiff may believe that the reference to the government’s discretion
rendered the solicitation ambiguous as to whether a contractor was required to meet the forty-
nine numbered requirements, plaintiff was required to seek clarification from the government
before the close of bidding. Cf. Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313
(Fed. Cir. 2007) (stating that, under the doctrine of patent ambiguity, “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” (internal quotation marks
omitted)); Stratos Mobile Networks USA, LLC v. United States, 213 F.3d 1375, 1381 (Fed. Cir.
2000) (“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 parties.”).
20
solicitation’s reference to the government’s discretion in its statement that “[t]he
Government may determine, at its discretion, that an Offeror’s proposal is non-compliant,
and therefore, ineligible for award,” AR 1054 (evaluation criteria), did not allow the
contracting officer to waive solicitation requirements. Instead, it described the
contracting officer’s discretion to find that a mannequin did not meet the requirements,
making it ineligible for award, based solely on his evaluation of the offeror’s written
proposal. Cf. id.; see also id. at 1056 (“The evaluators will evaluate the written proposals
to determine the extent to which the proposed product meets or exceeds all requirements
stated in the [statement of work].”). The solicitation provision relied upon by plaintiff
then described the bases upon which the contracting officer could exercise his discretion
in finding a proposal noncompliant: the written proposal indicated that the offeror
“cannot or will not meet any of the [statement of work] . . . requirements; provides an
approach that clearly does not meet any of the [statement of work] . . . requirements; or,
includes data which prompts the Government to question the Offeror’s compliance with
any of the [statement of work] . . . requirements.” Id. at 1054. Plaintiff’s contention that
this provision granted the contracting officer “discretion to decide which, if any, of the
forty-nine specific requirements for the . . . mannequins would be disqualifying,” Pl.’s
Mem. 32 (emphasis omitted), is incorrect.
The court therefore concludes that the government did not “fail[] to follow the
terms of its own Solicitation” by determining that award could not be made to offerors
who did not meet each of the solicitation requirements. Cf. Hunt Bldg. Co., 61 Fed. Cl.
at 273. Instead, because the solicitation required offerors to meet each of the forty-nine
numbered requirements, the government’s decision to terminate Laerdal’s contract for
convenience owing to its failure to meet all of the requirements was “reasonable under
the circumstances.” Cf. Sierra Nev. Corp., 107 Fed. Cl. at 750; Sheridan Corp., 95 Fed.
Cl. at 151.
IV. Conclusion
For the foregoing reasons, the government’s decision to take corrective action by
terminating plaintiff’s contract for convenience was “reasonable under the
circumstances,” see supra Part III.B (finding reasonable the Army’s reliance on the
system capability demonstrations as a basis for canceling the contract), III.C (finding
reasonable the government’s decision to cancel the contract because no offeror complied
with all forty-nine numbered requirements), and consistent with the terms of the
solicitation, see supra Part III.C (finding that the solicitation required compliance with all
forty-nine numbered requirements). The court therefore holds that the corrective action
was not arbitrary or capricious, without a rational basis or contrary to law. Cf. Advanced
Data Concepts, Inc., 216 F.3d at 1058 (stating that, under the “highly deferential”
arbitrary and capricious standard, a reviewing court must “sustain an agency
determination evincing rational reasoning and consideration of relevant factors”); PAI
Corp., 614 F.3d at 1351 (similar). Further, because the court finds that the corrective
21
action did not constitute an error by the government, plaintiff suffered no prejudice. Cf.
Bannum, 404 F.3d at 1351 (requiring an error as a prerequisite to the court’s prejudice
determination).
Plaintiff’s Motion is DENIED and defendant’s Motion is GRANTED. The Clerk
of Court shall ENTER JUDGMENT in favor of defendant and defendant-intervenor,
dismissing plaintiff’s claims with prejudice.
No costs.
IT IS SO ORDERED.
s/ Emily C. Hewitt
EMILY C. HEWITT
Chief Judge
22