G4s Secure Integration LLC v. United States

In the United States Court of Federal Claims
No. 22-256 C
Filed Under Seal: July 28, 2022
Reissued: August 16, 2022 *
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G4S SECURE INTEGRATION LLC, *
et al., *
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Plaintiffs, *
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v. *
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THE UNITED STATES, *
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Defendant. *
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* * * * * * * * * * * * * * * * ** *
Richard P. Rector, with whom were C. Bradford Jorgensen, Thomas E. Daley, Ryan P.
Carpenter, and Christie M. Alvarez, DLA Piper LLP, all of Washington, D.C., for Plaintiffs.
Brendan D. Jordan, Trial Attorney, Commercial Litigation Branch, Civil Division, Department
of Justice, with whom were Corinne A. Niosi, Assistant Director, Patricia M. McCarthy,
Director, and Brian M. Boynton, Principal Deputy Assistant Attorney General, all of
Washington, D.C., for Defendant, and John W. Cox, Attorney Advisor, Office of the Legal
Adviser, U.S. Department of State, of Washington, D.C., of counsel.
OPINION AND ORDER
SOMERS, Judge.
This bid protest involves a Department of State (“State” or “DoS”) solicitation for a
contract to provide local guard services at the U.S. Embassy in Bratislava, Slovakia. Relevant to
this protest—because of the effect it had on State’s interpretation of the requirements or terms
and conditions of the instant solicitation—is the opinion issued by Judge Hertling in another
embassy guard services contract bid protest involving two of the three plaintiffs in this protest:
G4S Secure Integration LLC, et al. v. United States, No. 21-1817C, 2022 WL 211023 (Fed. Cl.
Jan. 24, 2022). In that opinion, Judge Hertling held that Federal Acquisition Regulation 52.204-
*
Pursuant to the protective order entered in this case, this opinion was filed initially under seal. The parties
provided proposed redactions of confidential or proprietary information. In addition, the Court made minor
typographical and stylistic corrections.
7 “requires, among other things, the offering entity to have entered all mandatory identifying
information in [the System for Award Management] and the profile to be marked as ‘active’ at
the time an offeror submits its offer.” G4S Secure Integration, LLC, 2022 WL 211023, at *6.
He further held that: 1) a joint venture formed by two of the plaintiffs in this protest was the
“offeror” in the solicitation at issue in the protest before him; and 2) that the joint venture was
not registered in the System for Award Management (“SAM”) at the time of proposal
submission. Accordingly, Judge Hertling determined that the joint venture was ineligible for
award and thus was not prejudiced by State’s decision to award the contract at issue in that
protest to another entity. Id. By State’s own admission, based on Judge Hertling’s decision, it
thereafter reexamined Plaintiffs’ eligibility to compete in the instant procurement and determined
that Plaintiffs were ineligible to remain in the competitive range. State reasoned that “in light of
a recent U.S. Court of Federal Claims decision, neither G4S nor were properly registered
as Joint Ventures in the Government’s SAM.gov system at the time of proposal submission.
Therefore, as required by FAR 52.204-7 and Section L of the solicitation, both and G4S
cannot be considered for award and are determined to be ineligible to continue in the competitive
range.” AR 3252.
This protest challenges that ineligibility determination by State. Plaintiffs assert that the
ineligibility determination constituted a change to the solicitation’s requirements or terms and
conditions with regard to SAM registration, and, therefore, State was compelled to amend the
solicitation, see 48 C.F.R. § 15.206, or conduct discussions, see 48 C.F.R. § 15.306. In addition,
Plaintiffs contend that this ineligibility determination was unreasonable because it failed to
consider an important aspect of the problem. For the reasons that follow, the Court sustains
Plaintiffs’ protest and enjoins the government from proceeding with the competition for, or
awarding a contract under, the solicitation at issue in this protest in a manner that is inconsistent
with this opinion and order.
BACKGROUND
The solicitation at issue in this case is for a contract to “provide local guard services at
the U.S. Embassy Bratislava.” AR 321. The services to be provided include to “protect life;
prevent unauthorized access; maintain order; deter criminal attacks against employees,
dependents, and property[;] prevent terrorist acts against all U.S. assets; and damage to
Government property.” AR 322. The solicitation was issued on August 27, 2021, and was
amended twice. AR 1, 212, 313. Proposals were due on October 4, 2021, and five proposals
were submitted before the deadline. AR 389, 2664.
The solicitation required contractors to provide a technical proposal, price proposal, an
executive summary, a joint venture agreement (if appropriate), company financial statements, a
management plan, and past performance information, among other materials. See AR 430–31.
Importantly, Section L of the solicitation provided that “[a]ll offerors (including Joint Venture
Partners) must have a Data Universal Numbering System (DUNS) number, be registered in the
System for Award Management (www.sam.gov), and have completed online representations and
certifications in order to be eligible for award.” AR 389. In addition, Section L required,
“[o]ffer[ors], including any offeror organized as a joint venture, [to] have an active SAM
registration at the time of proposal submission and throughout the procurement process. Any
2
offeror whose registration is not active in SAM at the time of proposal submission will be
excluded from the process and their proposals will not be evaluated.” AR 391. Section L also
stated that “[i]f the JV has not formally registered under a single DUNS [in SAM.gov], all JV
partners must be registered and provide proof of registration or submission of registration.” AR
394. Finally, the solicitation incorporated FAR 52.204-7 by reference: “[a]n Offeror is required
to be registered in SAM when submitting an offer or quotation, and shall continue to be
registered until time of award . . . . ” 48 C.F.R. § 52.204-7(b)(1).
In response to the SAM registration requirements, Plaintiffs submitted DUNS numbers
for each of the three individual joint venture members but did not submit a DUNS number for
the combined, unincorporated joint venture. AR 1195. According to Plaintiffs, they have been
awarded embassy guard services contracts in the past based on proposals submitted with DUNS
numbers and SAM registrations completed in the same manner as they did for the instant
solicitation at issue. ECF No. 28-1 at 10 (“Pls.’ MJAR”). In fact, Plaintiffs represented, and the
government did not contest, that since 2015, “approximately contracts to unincorporated G4S
joint ventures” have been awarded “pursuant to solicitation terms substantially the same as those
provided” in the instant solicitation. Id.; see also id. at 20.
After multiple phases of evaluation, State’s Technical Evaluation Panel (“TEP”)
determined, in a memorandum dated December 31, 2021, that only Plaintiffs and
submitted “technically acceptable” proposals. AR 3224. The TEP recommended “awarding to
the lower priced proposal” between the two acceptable offerors. Id. In a separate document,
dated January 11, 2022, State determined Plaintiffs were the lowest priced technically acceptable
offeror, thereby making them the presumptive awardee. AR 3239. After Judge Hertling’s
1
decision, however, State eliminated Plaintiffs and from further consideration, reasoning
in its Final Competitive Range Determination that
in light of a recent U.S. Court of Federal Claims decision, neither G4S nor
were properly registered as Joint Ventures in the Government’s SAM.gov system
at the time of proposal submission. Therefore, as required by FAR 52.204-7 and
Section L of the solicitation, both and G4S cannot be considered for award
and are determined to be ineligible to continue in the competitive range.
AR 3252. Moreover, State also found that
[b]oth and were properly registered within SAM at time of
proposal submission with presenting an Active SAM account for it’s
[sic] JV and presenting an Active SAM account as the lone offeror in it’s
[sic] proposal with no JV partner noted. Therefore, while neither is deemed
technically “Acceptable” at this time, it is determined that we can enter into a
final round of discussions so each vendor can present a chance to fix their
deficiencies.
Id.
1
Another unincorporated joint venture without an independent registration in SAM.
3
Accordingly, on February 15, 2022, State informed Plaintiffs that “G4S was not properly
registered as a Joint Venture in the Government’s SAM.gov system at the time of proposal
submission. . . . Therefore, G4S cannot be considered any further within the competitive range
and is removed from consideration.” AR 3255. Thereafter, on March 7, 2022, Plaintiffs filed
the instant protest to challenge that determination.
DISCUSSION
A. Jurisdiction and Standing
The Tucker Act, as amended by the Administrative Dispute Resolution Act, provides the
Court of Federal Claims with
jurisdiction to render judgment on an action by an interested party objecting to a
solicitation by a Federal agency for bids or proposals for a proposed contract or to
a proposed award or the award of a contract or any alleged violation of statute or
regulation in connection with a procurement or a proposed procurement.
28 U.S.C. § 1491(b)(1). In order to come within this jurisdictional grant, a protestor must
demonstrate that it has standing. Castle v. United States, 301 F.3d 1328, 1337 (Fed. Cir. 2002)
(“Standing is a threshold jurisdictional issue, which . . . may be decided without addressing the
merits of a determination.”); see also Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992) (“The
party invoking federal jurisdiction bears the burden of establishing [the] elements [of
standing].”). To establish standing, a protestor must prove that it is an “interested party.” 28
U.S.C. § 1491(b); see also Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384 (Fed.
Cir. 2012) (“Only an ‘interested party’ has standing to challenge a contract award.”) (citing Rex
Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006)). An interested party, in turn,
is an “actual or prospective bidder[] or offeror[] whose direct economic interest would be
affected by the award of the contract or by failure to award the contract.” Am. Fed’n of Gov’t
Emps., AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001). Accordingly, a
plaintiff must prove two elements to establish that it has standing: 1) that it is an actual or
prospective bidder/offeror, and 2) that it possesses a direct economic interest in the award of the
contract. CGI Fed. Inc. v. United States, 779 F.3d 1346, 1348 (Fed. Cir. 2015).
The government has not challenged Plaintiffs’ standing to bring the instant protest;
nonetheless, the Court has an independent duty to ensure that it has jurisdiction over the matter.
Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010) (“Courts have an independent obligation to
determine whether subject-matter jurisdiction exists, even when no party challenges it.”) (citing
cases). A review of the allegations in the complaint reveals that Plaintiffs have alleged sufficient
facts to demonstrate that they have standing to bring this protest. First, Plaintiffs were
indisputably actual offerors. See AR 2663. Moreover, although Plaintiffs were determined by
the agency to be ineligible for award and removed from the competitive range, AR 3252, it is
precisely that determination that Plaintiffs challenge in this protest. And, were Plaintiffs
successful in their challenge, they clearly have a direct economic interest, as the record indicates,
inter alia, that prior to being excluded from competition, Plaintiffs were poised to be awarded a
contract pursuant to the solicitation at issue. See, e.g., AR 3270 (“Based on this assessment, G4S
4
was selected for contract award.”); Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1362
(Fed. Cir. 2009) (to demonstrate prejudice in pre-award protests, it is a plaintiff’s burden to
demonstrate that it has suffered “a non-trivial competitive injury which can be addressed by
judicial relief”). Therefore, Plaintiffs have standing to bring this action.
B. Legal Standard
In bid protests, the Court is charged with reviewing an “agency’s decision pursuant to the
standards set forth in section 706 of title 5.” 28 U.S.C. § 1491(b)(4). Accordingly, the Court
examines whether an agency’s action was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706. Under such review, “[a] bid award may
be set aside if (1) the procurement official’s decision lacked a rational basis or (2) the
procurement procedure involved a violation of regulation or procedure.” DynCorp Int’l, LLC v.
United States, 10 F.4th 1300, 1308 (Fed. Cir. 2021) (internal quotations omitted).
On the first ground, “the courts have recognized that contracting officers are entitled to
exercise discretion upon a broad range of issues confronting them in the procurement process.”
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir.
2001) (citations and internal quotations omitted). Thus, the Court must “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.” Id. at 1332–33 (citations and internal quotations omitted). On the second
ground, “the disappointed bidder must show a clear and prejudicial violation of applicable
statutes or regulations.” Id. at 1333 (citation and internal quotation omitted).
Bid protests are generally decided on cross-motions for judgment on the administrative
record, pursuant to Rule 52.1 of the Rules of the United States Court of Federal Claims
(“RCFC”), which requires the Court to “make factual findings from the record evidence as if it
were conducting a trial on the record.” Bannum, Inc. v. United States, 404 F.3d 1346, 1354 (Fed.
Cir. 2005). “Unlike a motion for summary judgment, a genuine dispute of material fact does not
preclude a judgment on the administrative record.” Id. at 1355–56. Therefore, in reviewing
cross-motions for judgment on the administrative record, “the court asks whether, given all the
disputed and undisputed facts, a party has met its burden of proof based on the evidence in the
record.” Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 630 (2014).
C. Analysis
In some respects, Plaintiffs’ claims in this protest are relatively simple and
straightforward: State changed the solicitation’s SAM registration requirements and its
interpretation of those requirements but, in so doing, failed to: consider an important aspect of
the problem the changes created; amend the solicitation pursuant to FAR 15.206; or conduct
discussions pursuant to FAR 15.306. In other respects, this case is more complex, because
lurking in the shadows of this protest is the decision issued by Judge Hertling on January 24,
2022, which is currently on appeal to the Federal Circuit, concerning a different embassy guard
services procurement in which he determined that, under FAR 52.204-7, an unincorporated joint
5
venture is an “offeror” and, therefore, needs to itself be registered in SAM at the time of proposal
submission. See G4S Secure Integration, LLC, 2022 WL 211023, at *7.
Notably, Plaintiffs do not directly challenge Judge Hertling’s determination. Certainly,
they could have—the decision of one judge of this Court does not bind another, and the previous
decision is applicable only to the procurement at issue in that protest. Plaintiffs’ claims in this
protest, however, sidestep the question of whether FAR 52.204-7 requires an unincorporated
joint venture to be registered in SAM at the time of proposal submission. Although Plaintiffs
take some indirect shots at Judge Hertling’s decision, when boiled down to its simplest form, the
crux of Plaintiffs’ argument is that even if the January 24th decision is correct, State was still
obligated to amend the solicitation when it chose 2 at the eleventh hour to follow that decision
instead of the express SAM registration requirements contained in the solicitation and State’s
own longstanding interpretation of those requirements. See Pls.’ MJAR at 22–25. In other
words, Plaintiffs ask this Court to find that: 1) the solicitation’s SAM registration requirements
permitted an unincorporated joint venture to submit a proposal without being registered as a
separate entity in SAM, as long as the constituent members of the joint venture were
appropriately registered; and 2) regardless of whether FAR 52.204-7 permits the same, that when
State adopted Judge Hertling’s interpretation of FAR 52.204-7 as its own, it was required to
amend the solicitation. See id.The government disagrees with Plaintiffs’ assertions. First, the government—rather
curiously, given the record before the Court—argues that State did not change its position on
how the SAM registration requirements applied to unincorporated joint ventures. See ECF No.
33 at 13 (“Gov.’s MJAR”). Second, the government asserts that, in eliminating Plaintiffs from
the competitive range, State was merely following the unambiguous terms of the solicitation,
which allegedly required unincorporated joint ventures to be registered in SAM prior to proposal
submission. Id. at 13–14. Finally, the government contends that, to the extent State’s reading of
the solicitation’s SAM registration requirements is not the only reasonable reading of those
provisions, the resulting ambiguity is a patent one that Plaintiffs were required to raise with State
prior to proposal submission. See ECF No. 40 at 7–9 (“Gov.’s Reply”).
Accordingly, the Court must analyze whether State changed its interpretation of the SAM
registration requirements after Judge Hertling’s January 24th decision; whether the solicitation
required an unincorporated joint venture to register in SAM prior to proposal submission;
whether Plaintiffs have waived their claims in this protest under Blue & Gold Fleet, L.P. v.
United States, 492 F.3d 1308 (Fed. 2007); and, if there was no Blue & Gold waiver, whether
State was required to amend the solicitation or conduct discussions prior to eliminating Plaintiffs
from the competitive range. Alternatively, the Court must determine, regardless of how it
decides the above-outlined issues, whether when State chose to eliminate Plaintiffs from the
competitive range it fully considered important aspects of the problem and, therefore, made a
2
To be clear, State’s reinterpretation of the SAM registration requirements was a choice in the
sense that there was no binding court decision that mandated State’s reinterpretation. Judge Hertling’s
January 24th decision did not impose injunctive relief, and, even if it had, it almost certainly would not
have applied beyond the procurement at issue in that protest. Rather, State chose to change its
interpretation of the SAM registration requirements based on, by its own admission, one trial court
decision.
6
decision that was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.
As explained in more detail below, the Court disagrees with all of the government’s
assertions as to why it was not required to amend the solicitation when, in light of Judge
Hertling’s decision, it eliminated Plaintiffs from the competitive range. First, it is beyond
peradventure that State changed its interpretation of the SAM registration requirements when it
removed Plaintiffs from the competitive range. Second, the plain language of the solicitation
clearly permitted an unincorporated joint venture to meet the SAM registration requirements
through the registration of each of the joint venture partners in SAM; thus, State was not
applying the solicitation as written. Third, the Blue & Gold waiver rule is inapplicable here for
several reasons, most importantly that the issue that the government claims Plaintiffs were
required to challenge prior to proposal submission did not arise until sometime after January 24,
2022, and Plaintiffs were not made aware of the issue until February 15, 2022. See AR 3255.
Accordingly, the Court concludes that when State changed its interpretation of the application of
FAR 52.204-7 to the instant solicitation on February 8, 2022, it was required to amend the
solicitation pursuant to FAR 15.206 rather than taking the more expedient route of simply
eliminating Plaintiffs from the competitive range based on this revised interpretation.
Before turning to its analysis of the government’s errors, the Court must address briefly
what it is not deciding: whether Judge Hertling’s January 24th opinion correctly interpreted FAR
52.204-7 as it applies to unincorporated joint ventures. Although two of the three plaintiffs in
this protest are currently challenging that decision at the Federal Circuit, the decision in this
protest does not turn on the meaning of FAR 52.204-7. Rather, the question in this protest is
whether State may issue a solicitation that allowed Plaintiffs to compete for the procurement,
interpret the solicitation in a manner that allowed Plaintiffs to compete up to the eve of award,
and then, at the eleventh hour, eliminate Plaintiffs from competition based on a newly adopted
interpretation of a FAR provision (and, in turn, the solicitation itself), all without amending the
solicitation pursuant to FAR 15.206 or conducting discussions pursuant to FAR 15.306. In other
words, the Court must decide whether, assuming arguendo that State’s new interpretation of
FAR 52.204-7 is correct, State was required to amend its solicitation to conform with its new
interpretation of the FAR. As discussed below, because the solicitation was clearly written to
reflect State’s pre-February 8th interpretation of the FAR 52.204-7, when that interpretation
changed, State was required to amend the solicitation and notify offerors of the change. In
addition, State was required to consider important aspects of the problem that its new
interpretation created.
1. Prior to Judge Hertling’s January 24th Decision, State Clearly Interpreted Both
the Solicitation and the FAR to Allow Plaintiffs to be Eligible for Award
In response to Plaintiffs’ assertion that State changed its interpretation of the SAM
requirements, the government asserts that, rather than changing its interpretation, State “simply
applied the representations as stated in the Solicitation in a belated fashion, it did not switch or
go back on a previous interpretation . . . .” Gov.’s Reply at 20. The Court finds the
government’s position unsupported by the facts. The Court will not willingly suspend its
disbelief and pretend, as the government attempts to, that State “did not switch or go back on a
7
previous interpretation.” Clearly, based on the administrative record and by State’s own
admission, prior to Judge Hertling’s January 24th decision, State concurred with Plaintiffs’
interpretation of the SAM registration requirements and applied those requirements to all but
award the embassy guard services contract to Plaintiffs.
The record definitively supports a factual conclusion that, until the issuance of Judge
Hertling’s January 24th decision, State viewed Plaintiffs as in full compliance with the SAM
registration requirements. First, according to State’s Final TEP Report of December 2021,
Plaintiffs’ final proposal revisions were found “Technically Acceptable” and, therefore, were
“Include[d] in Range.” AR 3224. The same report makes clear that “panel members were
briefed by [the Office of Acquisition (‘AQM’)] on the following: . . . 2) the evaluation factors
for award contained in Sections L and M of the solicitation; 3) individual technical evaluation
forms; . . . and 5) the requirement for the TEP to come to a consensus for each offeror.” Id.(emphasis added). As the SAM registration requirements were located within Section L of the
solicitation, the Court can safely presume that members of the TEP were aware of such
“evaluation factors for award,” AR 3224, prior to conducting their final analyses. See Cleveland
Assets, LLC v. United States, 883 F.3d 1378, 1382 (Fed Cir. 2018) (‘“In the absence of clear
evidence to the contrary,’ the presumption of regularity allows courts to presume that ‘public
officers have properly discharged their official duties.”’) (quoting Butler v. Principi, 244 F.3d
1337, 1340 (Fed. Cir. 2001)). In short, the Final TEP Report raises no concern whatsoever with
Plaintiffs’ compliance with the requirements regarding SAM registration.
Moreover, State’s Final Price Analysis Report of January 11, 2022, raises not even a
specter of concern with Plaintiffs’ proposals being compliant with the SAM registration
requirements. See generally AR Tab 28. First, the report states that Plaintiffs’ “SF33
documentation is complete.” AR 3228. The Standard Form 33, the first page of the solicitation,
requires offerors to include their name, address, and DUNS number. See AR 1. Second, as to
“Proposal Requirement” Section L.2 of the solicitation, titled “Contract Award,” the report
reflects that Plaintiffs are “proposing a Joint Venture” and that each member is “Registered in
SAM.” AR 3228. Third, as to “Proposal Requirement” subsection L.11.1.5, titled “Business
Management,” the report reflects that Plaintiffs provided a “Signed JV agreement” and that
“SAM documentation [was] provided.” AR 3229 (emphasis added). Recall, subsection L.11.1.5
states that “[i]f the JV has not formally registered under a single DUNS, all JV partners must be
registered and provide proof of registration or submission of registration.” AR 394 (emphasis
added). The report simply does not suggest that Plaintiffs were falling short of any SAM
registration requirements. Rather, it concludes “the Government believes all four (4) evaluated
vendors provided clear responses to pricing, including all required information from the
solicitation.” AR 3238. Plaintiffs, thus, correctly observe that “Section L.11.1.[5] plainly
contemplated that an unincorporated joint venture would be eligible for award even if it was not
registered in SAM, provided that all of the joint venture members were registered in SAM.”
Pls.’ MJAR at 20. Time and again, State’s actions confirm this. Furthermore, FAR 4.1103
provides that the contracting officer “[s]hall verify that the offeror or quoter is registered in SAM
. . . at the time an offer or quotation is submitted.” 48 C.F.R. § 4.1103(a)(1). Absent clear
evidence to the contrary, the Court must presume this verification was done. See Cleveland
Assets, 883 F.3d at 1382.
8
Most tellingly, the agency’s Award Determination Memorandum of January 13, 2022,
provides:
In accordance with Section M.3, which states, “Award will be made to a responsive
responsible offeror on the basis of the lowest evaluated price of proposals meeting
or exceeding the technical requirements”, G4S was deemed technically acceptable
and their pricing was determined to be fair and reasonable in respect to the IGCE
and market value for such services within Bratislava, Slovakia. Based on this
assessment, G4S was selected for contract award.
AR 3270 (emphasis added). To repeat, State selected Plaintiffs for award.
In addition, the Final Competitive Range Determination of February 8, 2022, states that
“[o]nly four (4) [proposals] . . . provided all information in accordance with the instructions
stated in the solicitation.” AR 3242 (emphasis added). It continues, “[a]ll four (4) proposals
were reviewed to ensure that the offerors complied with the instructions and passed initial review
in accordance with Section L of the solicitation.” Id. (emphasis added). Plaintiffs were listed
first among the four “accepted offeror names.” Id.; see also AR 3243 (“All four (4) remaining
vendors (G4S, , , and ) provided proposals in accordance with the
requirements set forth in section L of the solicitation. No sections or documents were missing.”
(emphasis added)).
Nevertheless, the “Competitive Range” conclusion of the same document makes a sudden
about-face, providing that
[t]he TEP identified an award to be made to G4S or as both were deemed
technically “Acceptable”. However, in light of a recent U.S. Court of Federal
Claims decision, neither G4S nor were properly registered as Joint Ventures
in the Government’s SAM.gov system at the time of proposal submission. Therefore,
as required by FAR 52.204-7 and Section L of the solicitation, both and
G4S cannot be considered for award and are determined to be ineligible to continue
in the competitive range.
AR 3252 (emphasis added). State reached this conclusion despite determining up until this point
that Plaintiffs satisfied the SAM registration requirements.
To summarize, State’s own Competitive Range Determination states that Plaintiffs
“provided [a] proposal[] in accordance with the requirements set forth in section L of the
solicitation,” AR 3243 (emphasis added); FAR 4.1103 required the agency to verify SAM
registration compliance at the time Plaintiffs’ proposal was submitted; and Plaintiffs had been
recommended for award. Yet, State, in an about-face, concluded Plaintiffs “cannot be
considered for award.” AR 3252. This conclusion was clearly a change in State’s interpretation
of the SAM registration requirements.
9
2. The Solicitation’s Section L SAM Registration Requirements Unambiguously
Permitted an Unincorporated Joint Venture to Rely on the SAM Registrations of
Each of its Joint Venture Partners
With regard to the SAM registration requirements contained in Section L of the
solicitation, Plaintiffs argue: the terms of the solicitation provide that an unincorporated joint
venture, like the one formed by Plaintiffs, did not need to be registered in SAM; rather, for an
unincorporated joint venture, only the joint venture partners needed to be registered. In response
and to the contrary, the government asserts that “[t]he unambiguous language of FAR 52.204-7
and other provisions of the solicitation make clear that offerors organized as a Joint Venture
must register in SAM.gov as a Joint Venture and do so before submitting their proposal [and
that] G4S did neither.” Gov.’s MJAR at 2. In other words, according to the government, “[t]he
plain language of these clauses make clear that: a) a Joint Venture must be registered on
SAM.gov; b) registration must be as of the proposal submission date; and c) failure to abide by
either a or b may result in the ‘exclu[sion]’ of the proposal or the ‘proposal being deemed not
considered for award.’” Id. at 10 (citing AR 79, 167). Therefore, the government concludes,
State’s elimination of Plaintiffs from the competitive range was a decision that was consistent
with the terms of the solicitation. The Court, however, does not concur. Section L of the
solicitation unambiguously permitted an unincorporated joint venture to rely on the SAM
registrations of each of its members.
Both Plaintiffs and the government assert that the unambiguous language of the
solicitation supports their respective interpretations of the solicitation’s SAM registration
requirements. The terms of a solicitation are unambiguous if its language is only susceptible to
one reasonable interpretation. Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1353
(Fed. Cir. 2004) (“The solicitation is ambiguous only if its language is susceptible to more than
one reasonable interpretation.”). In interpreting Section L’s provisions related to SAM
registration, the Court must begin with the plain language of the document and give the words
their plain and ordinary meaning. See, e.g., Coast Fed. Bank, FSB v. United States, 323 F.3d
1035, 1038 (Fed. Cir. 2003) (en banc); see also Grumman Data Sys. Corp. v. Dalton, 88 F.3d
990 (Fed. Cir. 1996) (“The principles governing interpretation of Government contracts apply
with equal force to the interpretation of solicitations issued by the Government for such
contracts.”). Stated differently, “[i]f the provisions of the solicitation are clear and unambiguous,
they must be given their plain and ordinary meaning,” id., “unless it is apparent that some other
meaning was intended and mutually understood,” Ace Constructors, Inc. v. United States, 499
F.3d 1357, 1361 (Fed. Cir. 2007).
Moreover, in determining the meaning of the solicitation’s SAM registration
requirements, the Court must “interpret the [solicitation] in a manner that gives meaning to all of
its provisions and makes sense.” McAbee Constr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed.
Cir. 1996) (citing Hughes Commc’ns Galaxy, Inc. v. United States, 998 F.2d 953, 958 (Fed. Cir.
1993)). “An interpretation which gives a reasonable meaning to all provisions of a solicitation
will be preferred to one which leaves a portion of it useless or inexplicable.” Fulcra Worldwide,
LLC v. United States, 97 Fed. Cl. 523, 538 (2011) (citing Gould, Inc. v. United States, 935 F.2d
1271, 1274 (Fed. Cir. 1991)). In other words, the Court’s interpretive goal is to give effect to
and harmonize all the provisions of the solicitation, as opposed to interpreting the solicitation in
10
a manner that renders portions of it meaningless. Arizona v. United States, 216 Ct. Cl. 221, 235–
36 (1978) (“[A]n interpretation which gives a reasonable meaning to all parts will be preferred to
one which leaves a portion of it useless, inexplicable, inoperative, void, insignificant,
meaningless, superfluous, or achieves a weird and whimsical result.”). Furthermore, “the
language of a contract must be given that meaning that would be derived from the contract by a
reasonable[,] intelligent person acquainted with the contemporaneous circumstances,” Hol-Gar
Mfg. Corp. v. United States, 169 Ct. Cl. 384, 388 (1965) (citing cases), such that the Court
should “place itself into the shoes of a reasonable and prudent contractor and decide how such a
contractor would act in interpreting the contract documents,” H.B. Mac, Inc. v. United States,
153 F.3d 1338, 1345 (Fed. Cir. 1998).
Plaintiffs argue that the Court should accept their reading of the solicitation “because the
Solicitation does not unambiguously require unincorporated joint ventures to be registered in
SAM.gov.” Pls.’ MJAR at 19. In making this assertion, Plaintiffs point to several provisions of
Section L of the solicitation that indicate that in the case of an unincorporated joint venture it is
the joint venture partners that must be registered in SAM, including, most importantly, the clause
that provides that “[i]f the JV has not formally registered under a single DUNS, all JV partners
must be registered and provide proof of registration or submission of registration.” AR 394. In
addition, Plaintiffs direct the Court to “several Solicitation provisions [that] treat a joint venture’s
individual members as the ‘Offeror,’ namely past performance requirements and in-country
licensing requirements.” Pls.’ MJAR at 20 (citing AR 367, 396, 399, and 405). Furthermore,
Plaintiffs argue that the State Department’s conduct in this procurement and previous
embassy guard services procurements confirms their interpretation, because in those previous
procurements and the instant procurement (until Judge Hertling issued his January 24th decision)
State did not reject proposals from G4S unincorporated joint ventures for failure to register
formally in SAM. Id. at 20–21.
The government counters that “[t]he plain text of the Solicitation makes clear that ‘[a]ll
offerors (including Joint Venture Partners) must have a Data Universal Numbering System
(DUNS) number, be registered in the System for Award Management (www.sam.gov) . . . to be
eligible for award.’” Gov.’s MJAR at 9 (citing AR 77). The government goes on to argue that
Plaintiffs’ reliance on AR 394 (“[i]f the JV has not formally registered under a single DUNS, all
JV partners must be registered and provide proof of registration or submission of registration.”)
is misplaced because
[t]his clause does not say a Joint Venture itself need not register on SAM.gov, only
that in the circumstance where there is no singular DUNS for the Joint Venture, the
constituents of the Joint Venture must meet the additional requirements of
registering and providing proof of registration for the members of the Joint Venture.
Id. at 10. Additionally, the government contends that Plaintiffs’ assertion that the term “offeror”
refers to the constituent members of the unincorporated joint venture, rather than the joint
venture itself, is “contrary to the plain meaning” of the term. Id. at 11. Rather, according to the
government, the plain meaning of “offeror” inherently refers to a singular entity, as evidenced by
the term’s use throughout the solicitation. Id. (citing AR 79 and Banknote Corp. of Am., 365
F.3d at 1353).
11
Although the administrative record and solicitation in this case are lengthy, this protest
largely boils down to a handful of requirements found in Section L:
• All offerors (including Joint Venture Partners) must have a Data Universal Numbering
System (DUNS) number, be registered in the System for Award Management
(www.sam.gov), and have completed online representations and certifications in order
to be eligible for award. AR 389.
• Offer[or]s, including any offeror organized as a joint venture, must have an active SAM
registration at the time of proposal submission and throughout the procurement process.
Any offeror whose registration is not active in SAM at the time of proposal submisssion
[sic] will be excluded from the process and their proposals will not be evaluated.
AR 391.
• All Joint Venture partners shall sign the proposal using the Joint Venture signature
format provided. Failure to provide a signed Joint Ventures signature page may result
in the proposal being deemed not considered for award. . . . Please note that all JV
partners must be registered in SAM.gov. AR 392.
• System for Award Mangement [sic] (SAM.gov). In accordance with FAR 4.1102
prospective contractotrs [sic] shall be registered in the SAM database prior to award.
All offerors shall provide a copy of the SAM.Gov registration. If the JV has not
formally registered under a single DUNS, all JV partners must be registered and
provide proof of registration or submission of registration. In order to ensure payment
for services and compliance with SAM.gov, the Contractor shall provide banking
information for entities not currently listed with the Office of Foreign Assets Control
(https://sanctionssearch.ofac.treas.gov/)[.] AR 394.
The Court’s task then is to determine whether these Section L requirements had a clear
and unambiguous meaning. The Court begins this task with the solicitation’s requirement that
“All offerors (including Joint Venture Partners) must have a Data Universal Numbering System
(DUNS) number, be registered in the System for Award Management (www.sam.gov), and have
completed online representations and certifications in order to be eligible for award.” AR 389.
Overall, this provision is relatively uncomplicated: all offerors must have a DUNS number and
be registered in SAM to be eligible for award. There is, however, some nuance within this
provision that is critical to understanding the solicitation’s SAM requirements. First, the first
parenthetical in the provision (“including Joint Venture Partners”), like other similar wording in
the solicitation, requires joint venture partners to be registered in SAM. See id. Second, and
more importantly, the parenthetical, when read with the rest of the clause, clearly provides that
joint venture partners are “offerors.” Plaintiffs, of course, agree with this interpretation of the
clause. State also seemed to agree with this interpretation—stating in its Competitive Range
Determination, for instance, that a proposal submitted by a single company was submitted by a
“lone offeror” as opposed to a joint venture, which would have multiple offerors. See AR 3252
(stating that “ present[ed] an Active SAM account as the lone offeror in it’s [sic] proposal
with no JV partner noted”) (emphasis added). The government in its briefing does not offer an
12
alternative interpretation for this provision, seemingly agreeing that the plain meaning of the
provision is that joint venture partners are offerors. See, e.g., Gov.’s MJAR at 2 (noting that
“other provisions of the solicitation make clear that offerors organized as a Joint Venture must
register in SAM.gov”) (emphasis added).
Next, the Court turns to a second statement in the solicitation mandating, like the above
provision, that “all JV partners must be registered in SAM.gov.” AR 392. While this provision
does not mention offerors or provide any direct relationship between the terms “joint venture
partners” and “offeror,” it does show that State required each constituent member of any joint
venture to be registered in SAM.
The government relies heavily upon the next relevant provision: “[o]ffer[or]s, including
any offeror organized as a joint venture, must have an active SAM registration at the time of
proposal submission and throughout the procurement process.” AR 391. As an initial matter,
the Court agrees with the government that there is a typographical error in this provision and that
“offers” was intended to be “offerors.” ECF No. 40 at 4 (“Gov.’s Reply”) (“First, it is likely that
‘offer’ as it appears in this provision is a typographical error meant to refer to ‘offerors’ . . . .”).
One arrives at this conclusion easily if the sentence is read wholistically with the phrase
“including any offeror organized as a joint venture” as an appositive that “further identif[ies]”
the proceeding noun offeror. See THE CHICAGO MANUAL OF STYLE ¶ 5.23 (17th ed. 2017). It is
nonsensical that an offeror can modify an offer: one refers to an entity; the other is a type of
communication. From this the government argues that the Court should read this provision as
requiring a joint venture to be registered in SAM apart from its constituent members. See Gov.’s
MJAR at 11 (“The plain meaning of this clause is that the ‘offeror’ refers to a single entity,
which in the case of a Joint Venture would be the Joint Venture itself.”). The government asserts
its interpretation is bolstered by language from a form that was attached to the solicitation: “[i]f
Joint Venture, present a DUNS number above for the Joint Venture. Then, complete below as
applicable for each joint venture partner.” See Gov.’s MJAR at 9 (quoting AR 167) (emphasis
omitted). 3 Plaintiff responds that this provision is not as restrictive as the government interprets
it and that the term joint venture as used in the provision does not necessarily refer to
unincorporated joint ventures.
Although the Court finds the government’s interpretation of this provision in isolation
reasonable, the Court does not read provisions of a solicitation in a vacuum. Rather, it must
harmonize and effectuate this provision with the other SAM-related provisions. When it comes
to harmonization, Plaintiffs’ interpretation, which is also reasonable, may be harmonized with
the other SAM-related provisions. The government’s interpretation quite simply cannot. A
reasonable reading of this provision that also allows it to be harmonized with the other SAM-
related provisions and gives effect to those provisions is that the reference to “joint ventures” in
this provision refers to incorporated joint ventures and does not include unincorporated joint
ventures. This is readily arrived at when one notes the use of the phrase “organized as.” This is
3
The language the government relies on regarding presenting a DUNS Number for the Joint
Venture is not a part of the solicitation itself but, rather, is an asterisked clause on a form that offerors
were instructed to complete. See AR 427. In other words, in arguing for the Court to adopt its
interpretation of the solicitation, the government points only to what amounts to language in a footnote on
a form attached to the solicitation.
13
the only place in the solicitation in which the phrase “organized as” is used. Read in conjunction
with the rest of the solicitation’s SAM-related language, the only reasonable reading that
harmonizes and effectuates this language is that the clause “organized as a joint venture” means
a joint venture that is formally organized as a separate legal entity as opposed to an
unincorporated joint venture, which is not organized as a separate legal entity and is instead a
grouping of co-venturers, each of which could be organized as any number of types of entities
(e.g., a corporation, an LLC, or a partnership). In other words, incorporated joint ventures are
formal “organized” entities and unincorporated joint ventures—at least in the eyes of the drafters
of the solicitation—are not. There is no other way to read this provision and harmonize it with
the other SAM registration requirements in the solicitation (especially the next clause the Court
will analyze).
Moving to the last relevant Section L provision, the Court finds that it is impossible to
accept the government’s interpretation of the above-cited provision and harmonize it with, and
give effect to, the final relevant Section L provision: “All offerors shall provide a copy of the
SAM.Gov registration. If the JV has not formally registered under a single DUNS, all JV
partners must be registered and provide proof of registration or submission of registration.”
AR 394. If the Court were to accept the government’s interpretation—that any joint venture,
including an unincorporated joint venture, is the offeror and must be registered—how does the
government explain the meaning of this provision? It is impossible to harmonize the fact that the
solicitation explicitly provides a path by which only constituent members of a joint venture need
to be registered in SAM and find that the solicitation considered an unincorporated joint venture
as an independent entity to be an offeror that must register in SAM.
Despite this impossibility, the government nonetheless attempts to explain this provision
of the solicitation, arguing
the fact that a DUNS number is a prerequisite for SAM registration does not mean
that this clause requires only constituent members of a joint venture to register in
SAM without the joint venture they are part of also registering. This clause merely
states that when the joint venture has not formally registered under a single DUNS,
then the constituent members of the joint venture must register. If a joint venture
itself had multiple DUNS numbers or if the joint venture had registered in SAM,
but its registration was not rendered formal for whatever reason, then the joint
venture members must also register in SAM. Contrary to G4S’s characterization,
this clause does not say the joint venture need not register.
Gov.’s Reply at 5. There are several problems with the government’s argument. First, to
paraphrase the government: contrary to the government’s characterization, this clause absolutely
says that a joint venture need not register. To spell out the plain meaning of the clause a little
better so as to not have to repeat the entire paragraph of which it is a part—a paragraph titled
“System for Award Management”—the Court will insert “in SAM” at the appropriate places in
the provision in the manner that it plainly reads: “If the JV has not formally registered [in SAM]
under a single DUNS, all JV partners must be registered [in SAM] and provide proof of
registration . . . .” AR 394. The government tries to obscure this plain reading by talking
14
hypothetically about multiple DUNS numbers, but the fact of the matter is that an entity must
have a DUNS number in order to register in SAM. As Plaintiffs correctly point out:
The Government’s argument on this point is illogical because a DUNS number was
a prerequisite for an entity, itself, to be registered in SAM. At the time of proposal
submission, entities needed a DUNS number to register in SAM. See, e.g.,
SAM.gov Update, U.S. GENERAL SERVICES ADMINISTRATION,
https://www.gsa.gov/about-us/organization/federal-acquisition-service/office-of-
systems-management/integrated-award-environment-iae/iae-systems-information-
kit/samgov-update (last visited May 3, 2022) (“All entities wanting to register to
do business with the federal government or wanting to get a Unique Entity ID
(SAM) only before April 4, 2022, must first obtain a DUNS Number.”). It would
have been impossible for a joint venture to register in SAM without having a DUNS
number for the joint venture entity itself.
ECF No. 36 at 6 (“Pls.’ Response & Reply”) (emphasis added). In other words, the provision
plainly states that if the joint venture is not registered in SAM, it is still eligible to compete so
long as each joint venture partner is registered in SAM.
Moreover, the government’s assertion that the provision means that “if the joint venture
had registered in SAM, but its registration was not rendered formal for whatever reason, then the
joint venture members must also register in SAM” is inconsistent with its own arguments related
to FAR 52.204-7. The government asserts that a joint venture must be “registered in SAM when
submitting an offer.” Gov.’s MJAR at 11 (citations omitted). But if the government is correct,
then register means register—there is no acceptable “registration” pursuant to FAR 52.204-7 that
is “not rendered formal for whatever reason.” At the very least, the registration must be marked
by the government as “Active” to count as being “Registered in the System for Award
Management.” FAR 52.204-7(a)(4). An “Active” registration is not one that is “not rendered
formal for whatever reason.” See FAR 52.204-7(a) (defining what it means to be registered in
SAM). In other words, the government cannot argue that State’s reinterpretation of FAR 52.204-
7 applies when it helps the government’s argument and then ignore the strictures of that
regulation when it does not help its argument.
In sum, the plain meaning of the SAM registration requirements contained in Section L
of the solicitation—when read in context of the whole solicitation, in a manner that harmonizes
and gives effect to all of the SAM-related provisions and does not render any of the language
useless, inexplicable, void, or superfluous, and is consistent with the meaning that was intended
by State and would be understood by a reasonable, intelligent person acquainted with the
circumstances of embassy local guard services procurements—is that an unincorporated joint
venture did not need to register in SAM as long as each of the joint venture partners was
registered. The plain language of Section L also establishes that, at least for purposes of this
solicitation, a joint venture partner in an unincorporated joint venture is an offeror.
Ordinarily, the Court would now turn to the task of addressing the meaning of FAR
52.204-7, which was incorporated into the solicitation by reference and would apply even were it
not so incorporated; however, in this case, as mentioned above, Plaintiffs have not offered any
15
substantive argument regarding the meaning of FAR 52.204-7. Instead, the best way to view
Plaintiffs’ claim is to assume for the sake of argument that FAR 52.204-7 does require
unincorporated joint ventures to register but that this requirement is ambiguous, and, regardless
of whether it is ambiguous or not, State was required to amend the solicitation or conduct
discussions when it adopted its new interpretation of FAR 52.204-7. Accordingly, rather than
interpreting the meaning of FAR 52.204-7, the Court turns to the task of determining whether
Plaintiffs had a duty under the Blue & Gold waiver rule to raise with State prior to proposal
submission a potential conflict between the SAM requirements in Section L of the solicitation
and the requirements of FAR 52.204-7.
3. Plaintiffs Have Not Waived Their Challenge Under the Blue & Gold Waiver
Rule
Even assuming that FAR 52.204-7 requires unincorporated joint ventures to be registered
in SAM at the time of proposal submission, Plaintiffs were not required to raise the conflict
between Section L of the solicitation and FAR 52.204-7 with State prior to proposal submission
in order to avoid waiver for several reasons. First, the meaning of FAR 52.204-7 is not clear on
its face; thus, assuming that there is a conflict between the solicitation and the FAR, any
resulting ambiguity is latent. Second, even if the Court were to assume that FAR 52.204-7 is
clear on its face, the patent ambiguity that results between the terms of the solicitation and the
FAR would not be subject to the Blue & Gold waiver rule because: 1) both Plaintiffs and State
shared the view (at least until some point after Judge Hertling’s decision) that unincorporated
joint ventures did not need to register in SAM, and thus the issue had not arisen by the deadline
for proposal submission; and 2) raising the issue with State prior to the January 24th decision
would have been futile.
To review, there are two types of ambiguities: patent and latent. A patent ambiguity is
one that is so “obvious, gross, [or] glaring, . . . that [a] contractor ha[s] a duty to inquire about it
at the start.” NVT Techs., Inc. v. United States, 370 F.3d 1153, 1162 (Fed. Cir. 2004) (quoting
H & M Moving, Inc. v. United States, 204 Ct. Cl. 696, 716 (1974)). This includes facially
inconsistent provisions that would put a reasonable contractor on notice and prompt it to inquire
with the agency about the provision, see Stratos Mobile Networks USA, LLC v. United States,
213 F.3d 1375, 1381 (Fed. Cir. 2000), or another “obvious omission, inconsistency or
discrepancy of significance,” Per Aarsleff A/S v. United States, 829 F.3d 1303, 1312 (Fed. Cir.
2016) (quoting E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1339 (Fed. Cir. 2004)).
On the other hand, a latent ambiguity is “a hidden or concealed defect which is not apparent on
the face of the document, could not be discovered by reasonable and customary care, and is not
so patent and glaring as to impose an affirmative duty on plaintiff to seek clarification.” Id. at
1312–13 (quoting Analytical & Rsch. Tech., Inc. v. United States, 39 Fed. Cl. 34, 46 (1997)
(internal quotation marks and citation omitted)). In cases in which a “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. United States, 492 F.3d 1308, 1313
(Fed. Cir. 2007) (internal quotation marks and citation omitted). Latent ambiguities, by contrast,
“will . . . be construed against the government,” as they are not apparent on the face of the
16
solicitation. NVT Techs., 370 F.3d at 1162 (citing Edward R. Marden Corp. v. United States,
803 F.2d 701, 705 (Fed. Cir. 1986)).
Plaintiffs argue that any ambiguity between the solicitation and FAR 52.204-7 is latent
because
it only came into existence as a result of Judge Hertling’s opinion . . . and [State’s]
implementation of that opinion without allowing offerors the opportunity to revise
proposals. In other words, by not informing offerors that unincorporated joint
ventures could no longer satisfy the Solicitation’s SAM registration requirements,
[State] itself created an ambiguity that was not previously apparent to either party.
Pls.’ Response & Reply at 8. Moreover, they assert that “Judge Hertling’s interpretation of the
term ‘offeror’ in FAR 52.204-7 was not apparent from the plain language of that provision; if it
were, Judge Hertling would not have needed to resort to a comment in the Federal Register to
define the term.” ECF No. 46 at 10. Because of this, Plaintiffs argue that the ambiguity should
be construed against the government as drafter and was not one they were required to raise prior
to proposal submission. See id. at 9.
The government counters that if there is an ambiguity, it is patent because FAR 52.204-7
has been “clear and unambiguous” in requiring joint ventures to independently register in SAM
since it was rewritten in 2018 and, therefore, any conflict with the solicitation’s SAM-related
provisions was obvious and glaring. See Gov.’s Reply at 7–8. Additionally, according to the
government, even if the Court finds that there is a latent ambiguity, Plaintiffs’ interpretation “is
not more reasonable than [State’s],” and, accordingly, Plaintiffs’ interpretation cannot prevail
over the government’s interpretation, which “harmonizes all the terms regarding SAM
registration instead of ignoring the clear import of FAR 52-204-7 and Exhibit P of the
Solicitation[.]” Id. at 9 (citing AR 167).
The Court believes that the Plaintiffs have the better of the arguments. The ambiguity
that results—if one assumes that State’s reinterpretation of FAR 52.204-7 based on Judge
Hertling’s decision is correct—is a latent one, and the government’s interpretation does not, in
fact, harmonize all the terms regarding SAM registration.
First, as explained above, the administrative record clearly indicates that: 1) State
concluded Plaintiffs satisfied the SAM registration requirements prior to Judge Hertling’s
decision, see AR 3224, 3229, 3238; and 2) State was on the cusp of awarding Plaintiffs the
contract, see AR 3224, 3239, 3243, 3252. The Court cannot imagine how there could be such a
glaring inconsistency that would give rise to a patent ambiguity when, but for Judge Hertling’s
decision regarding a similar procurement, Plaintiffs were determined to be registered properly in
SAM and award of the contract to Plaintiffs was all but inevitable. In short, neither State nor
Plaintiffs thought unincorporated joint ventures needed to register in SAM until Judge Hertling’s
January 24th decision. This is precisely what a latent ambiguity is: latent ambiguities are of the
sort that are unknowable until there is some “objective circumstance[]” that makes multiple
interpretations reasonable. See Travelers Cas. & Sur. Co. of America v. United States, 75 Fed.
Cl. 696, 711 (2007) (citations and quotations omitted). A change in policy, namely State’s
17
regarding what constitutes an offeror in the case of an unincorporated joint venture, is such an
objective circumstance.
The unknowable, and thus latent, nature of this change of circumstances is further
emphasized when the Court examines the issue through the lens of a reasonable, intelligent
person acquainted with the contemporaneous circumstances. See Metric Constrs., Inc. v. Nat’l
Aeronautics & Space Admin., 169 F.3d 747, 752 (Fed. Cir. 1999) (“This court adheres to the
principle that ‘the language of a contract must be given that meaning that would be derived from
the contract by a reasonably intelligent person acquainted with the contemporaneous
circumstances.’”) (quoting Hol-Gar Mfg. Corp., 169 Ct. Cl. at 388). Not only did State
determine that Plaintiffs (along with , another unincorporated joint venture without an
independent registration in SAM) complied with Section L, see AR 3242, and all but award
Plaintiffs the contract, but State has awarded other embassy guard services contracts to
unregistered joint ventures. Indeed, this bid protest is the result of State’s reinterpretation of the
FAR and the provisions of the instant solicitation as a result of a different bid protest involving
State awarding an embassy security contract to an unregistered joint venture.
In other words, State has concluded in the past and for this solicitation (until Judge
Hertling’s January 24th decision) that unregistered joint ventures satisfied FAR 52.204-7. This
causes the Court to wonder, as the Court of Claims once did: “[i]f plaintiff’s error was so
glaringly obvious or patent that he should have discovered it or made inquiry of the contracting
officer, we find it difficult to understand why such a well-qualified representative of the
defendant made the same mistake.” Kraus v. United States, 177 Ct. Cl. 108, 118 (1966). It is
hard to envision that an inconsistency could be so apparent and glaring as to be patent and, yet,
that State, Plaintiffs, and another potential awardee would proceed in the manner they did. A
patent ambiguity “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.” Stratos Mobile Networks USA, LLC, 213 F.3d at 1381 (emphasis added).
Simply put, as neither State nor Plaintiffs proceeded as though there was any ambiguity between
FAR 52.204-7 and the solicitation’s SAM registration requirements until Judge Hertling issued
his January 24th decision, it would appear that any ambiguity is latent.
In addition, leaving aside the parties’ mutual understanding of the requirements, it does
not appear that FAR 52.204-7 is as “clear and unambiguous” as the government argues. Beside
the fact that State had a completely different interpretation of the provision and the solicitation
until some point after the January 24th decision, in the decision itself Judge Hertling did not
simply look to the text of FAR 52.204-7 to interpret the clause. Rather, he examined pre-2018
versions of the provision, how the provision fit in with other provisions of the FAR related to
SAM registration, and importantly, as it pertains to what constitutes an “offeror,” a comment in
the Federal Register regarding whether joint ventures should be exempt from the revised SAM
registration requirement. See G4S Secure Integration LLC, 2022 WL 211023, at *6 (“Thus, in
revising FAR 52.204-7 in 2018, the FAR Council specifically considered whether to exempt
joint ventures from being registered in SAM at the time they submitted offers to RFPs and
rejected the notion.”). While these are all obviously tools of statutory (or in this case regulatory)
construction, the resort to them undercuts the government’s argument that FAR 52.204-7 is so
18
“clear and unambiguous” that any ambiguity between the solicitation and the FAR must be
patent.
In short, both State and any reasonable contractor would have interpreted—and did in
fact interpret—the solicitation at issue to permit an unincorporated joint venture to meet the
SAM registration requirements by registering the members of the unincorporated joint venture in
SAM. This interpretation held true until sometime after January 24, 2022, when Judge Hertling
issued his decision.
What is more, although FAR 52.204-7 has an independent meaning—a meaning that was
not challenged in this protest—if the words of FAR 52.204-7 were not independent and were
simply another clause in Section L of the solicitation, they would be easily harmonizable with
the Section L SAM registration requirements. Recall that FAR 52.204-7 provides that “[a]n
Offeror is required to be registered in SAM when submitting an offer or quotation, and shall
continue to be registered until time of award . . . .” 48 C.F.R. § 52.204-7(b)(1). For this
solicitation, as established above, the plain language clearly provides, and the government does
not seem to contest, that a joint venture partner is an “offeror.” The solicitation also provides
that unincorporated joint ventures do not need to register in SAM; thus, State must not have
considered unincorporated joint ventures to be offerors when it wrote the solicitation. With these
two principles in place, it is clear that for this solicitation at least, each joint venture partner in an
unincorporated joint venture is an offeror; therefore, it was each joint venture partner in an
unincorporated joint venture that needed to be registered in SAM. This interpretation of offeror
would easily harmonize with the words of FAR 52.204-7 if it were simply another provision in
the solicitation rather than an independent clause in the FAR, lending further support to the
latency of the ambiguity.
Finally, even if the ambiguity between the SAM registration requirements in Section L of
the solicitation and FAR 52.204-7 was a patent ambiguity, Plaintiffs were not required to raise
this ambiguity with State prior to proposal submission. In general, “a party who has the
opportunity to object to the terms of a government solicitation containing a patent error and fails
to do so prior to the close of the bidding process waives its ability to raise the same objection
subsequently in a bid protest action in the Court of Federal Claims.” Blue & Gold Fleet, 492
F.3d at 1313 (emphasis added). However, the Federal Circuit has recognized an exception to this
general rule in instances in which it would have been futile for a protestor to seek clarification
from an agency. Boeing Co. v. United States, 968 F.3d 1371, 1377 (Fed. Cir. 2020) (“Although
Boeing advances several rationales for the inapplicability of waiver, we need not go beyond the
following [to determine the Blue & Gold waiver rule does not apply]. A pre-award objection by
Boeing to the Defense Department would have been futile . . . .”). Here, seeking clarification
from State regarding the SAM registration requirements would have been futile; therefore, the
Blue & Gold waiver rule would not apply even if the SAM requirements were patently
ambiguous.
The administrative record in this case is clear: if Plaintiffs had sought clarification of, or
lodged a formal objection to, the SAM registration requirements before Judge Hertling’s January
24, 2022, decision, State would have found Plaintiffs eligible to compete. First, State
determined, prior to January 24th, that Plaintiffs were eligible for award and were the lowest
19
priced, technically acceptable offeror and thus the presumptive awardee. Second, and more
importantly, at the same time State was evaluating the instant procurement, State was presented
with this exact question in the protest before Judge Hertling. State’s response in that protest was
that joint ventures were not required to register in SAM. Therefore, the government’s argument
that Plaintiffs “could have raised the SAM registration issue with [State] prior to proposal
submission and gotten a meaningful response” simply is not accurate. Gov.’s Reply at 12. We
know from the position the government took in the protest before Judge Hertling exactly what
State’s response would have been: “‘[t]here is no requirement that the DUNS number associated
with the joint venture be registered in SAM.’” G4S Secure Integration, LLC, 2022 WL 211023,
at *6 (citing the United States Cross-Motion for Judgment on the Administrative Record at 17).
Accordingly, it would have been futile for Plaintiffs to have attempted to clarify the SAM
registration requirements with State. State would have simply confirmed, just as it had already
determined in this procurement and just as it was simultaneously arguing in the protest before
Judge Hertling, that Plaintiffs satisfied the solicitation’s SAM registration requirements.
Furthermore, it does not appear that Plaintiffs would even have had standing prior to State’s
February 8, 2022, reversal of its interpretation of the SAM requirements to challenge Section L
as patently ambiguous, because, as the presumptive awardee, Plaintiffs were not harmed by the
SAM registration requirements until State reinterpreted them. See, e.g., Sys. Application & Tech.
v. United States, 100 Fed. Cl. 687, 707 (2011) (“[To establish standing in] the preaward context,
a protester must show a non-trivial competitive injury which can be addressed by judicial
relief.”).
In addition, if one analyzes the Federal Circuit’s application of Blue & Gold Fleet, as
Judge Solomson did in VS2, LLC v. United States, it becomes clear that in determining if a
protestor needed to challenge an issue at the agency prior to coming to this Court, a crucial
question is whether the issue had yet arisen. See 155 Fed. Cl. 738, 754–55 (2021). In COMINT
Sys. Corp. v. United States, the circuit held that “where bringing the challenge prior to the award
is not practicable, it may be brought thereafter. But, assuming that there is adequate time in
which to do so, a disappointed bidder must bring a challenge to a solicitation containing a patent
error or ambiguity prior to the award of the contract.” 700 F.3d 1377, 1382 (Fed. Cir. 2007).
Thus, Judge Solomson observed that COMINT Sys. Corp. should be read as “expanding the time
in which a solicitation challenge may be filed in this Court where the grounds for the protest did
not exist prior to the proposal due date.” VS2, LLC, 155 Fed. Cl. at 754 (citing COMINT Sys.
Corp., 700 F.3d 1377). This, according to Judge Solomson, is “a common sense proposition
given that a plaintiff could not, without the advantage of a time machine or crystal ball, have
known about the basis for its action.” Id. at 754–55. Here, it is clear that the issue that Plaintiffs
are challenging did not arise prior to the proposal due date. In fact, the issue did not arise until
February 8, 2022, when, according to State, in light of Judge Hertling’s decision, it reinterpreted
the SAM registration requirements. AR 3252 (“[I]n light of a recent U.S. Court of Federal
Claims decision, neither G4S nor were properly registered as Joint Ventures in the
Government’s SAM.gov system at the time of proposal submission.”). Plaintiffs were made
aware of this reinterpretation on February 15, 2022, AR 3255; immediately wrote to the agency
to see if the agency would allow them to revise their proposal in light of the new interpretation,
AR 3256; and filed a pre-award bid protest in this Court on March 7, 2022. In other words,
Plaintiffs raised this issue with State once it became known, AR 3256, and quickly thereafter
filed a pre-award bid protest in this Court.
20
4. Pursuant to FAR 15.206, State Was Required to Amend the Solicitation When It
Changed Its Requirements or Terms and Conditions
The remaining question is: what was State required to do when it changed its
interpretation of what is required with regard to SAM registration for unincorporated joint
ventures? Was State permitted, as it did, to simply issue a new competitive range determination
that eliminated Plaintiffs from the competitive range because their unincorporated joint venture
was not registered in SAM prior to proposal submission? Or, because State’s new interpretation
was inconsistent with the solicitation’s requirements or terms and conditions regarding SAM
registration, was State required to amend the solicitation?
“It is hornbook law that agencies must evaluate proposals and make awards based on the
criteria stated in the solicitation.” Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377, 386
(2003), aff’d, 365 F.3d 1345 (Fed. Cir. 2004) (emphasis added). “It thus is beyond peradventure
that the government may not rely upon undisclosed evaluation criteria in evaluating proposals,
and, where appropriate, must disclose the factors’ relative importance.” Id. (internal citations
omitted); see also Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367–68 (Fed.
Cir. 1999) (“[R]egardless of the panel’s view of the appropriateness of the standard [set out in
the RFP], the Navy is strictly bound by its terms, and in waiving a portion of the standard . . . ,
the Navy violated a clearly applicable procurement statute and regulation.”) (internal quotation
marks and citations omitted). Accordingly, when challenging an agency’s adherence to the
terms of a solicitation, “a protester must show that: (i) the procuring agency used a significantly
different basis in evaluating the proposals than was disclosed; and (ii) the protester was
prejudiced as a result—that it had a substantial chance to receive the contract award but for that
error.” Banknote Corp. of Am., 56 Fed. Cl. at 387 (footnote omitted).
With relative ease, the Court concludes that State ultimately “used a significantly
different basis in evaluating [Plaintiffs’] proposals than was disclosed.” Id. Rarely is an
administrative bait-and-switch so self-evident: the plain text of Section L of the solicitation
expressly permitted joint venture partners’ registration in SAM to meet the SAM registration
requirements; Plaintiffs satisfied that requirement according to State itself; and yet, State
subsequently removed Plaintiffs from the competitive range for failing to comply with the SAM
registration requirement based on State’s new interpretation of that requirement. Whether
viewed as a new interpretation of the same solicitation requirement or an entirely new
requirement writ large, State’s chosen course of action had the effect of imposing a new
requirement or term and condition on Plaintiffs long after they had submitted a proposal that,
according to State itself, was “in accordance with the requirements” of the solicitation.
AR 3243.
The Court only briefly notes the government’s factually unsupportable arguments to the
contrary. For example, in its cross-motion and opposition brief, the government takes the
position that “the Solicitation specifically contemplated disqualification for SAM registration
failure.” Gov.’s MJAR at 13. The government cites as support AR 79, which provides that
failure to register in SAM will result in an offeror being “excluded from the process and their
proposals will not be evaluated,” as well as AR 91, which provides that the government
“reserves the right to reject an offer if . . . [the] Offeror fails to submit any of the required
21
proposal documents required by Section L . . . .” Relying on these citations, the United States
concludes that, “[t]herefore, [State] was within its rights to summarily reject G4S’s proposal
. . . .” Id. at 14. The government’s contentions, however, run directly counter to the record
evidence, including the agency’s own conclusion in its Final Competitive Range Determination,
wherein State concludes that Plaintiffs “provided all information in accordance with the
instructions stated in the solicitation.” AR 3242 (emphasis added); see also AR 3229 (as to
“Proposal Requirement” section L.11.1.5, report reflects that Plaintiffs’ “SAM documentation
provided”). Moreover, because the solicitation clearly instructed that “[a]ny offeror whose
registration is not active in SAM at the time of proposal submisssion [sic] will be excluded from
the process and their proposals will not be evaluated,” AR 391, it must have been the case that
State considered Plaintiffs’ registration active in SAM since Plaintiffs were not excluded from
the process (until after Judge Hertling’s decision) and their proposal was evaluated. See, e.g.,
AR 3224 (Final TEP Report); AR Tab 28 (Final Price Analysis Report); AR 3270 (Award
Determination Memorandum); AR 3242 (Final Competitive Range Determination) (collectively
clearly demonstrating that State “evaluated” Plaintiffs’ proposal).
For good measure, the Court notes that even if the express terms and requirements of the
solicitation have always required SAM registration for an unincorporated joint venture itself, and
not just its constituent members—as the government strongly, though wrongly, contends—the
record before the Court makes abundantly clear that such is not how State itself applied the
requirements in this procurement. To review, State’s Final Competitive Range Determination
provides:
[t]he TEP identified an award to be made to G4S or as both were deemed
technically “Acceptable”. However, in light of a recent U.S. Court of Federal
Claims decision, neither G4S nor were properly registered as Joint Ventures
in the Government’s SAM.gov system at the time of proposal submission.
Therefore, as required by FAR 52.204-7 and Section L of the solicitation, both
and G4S cannot be considered for award and are determined to be ineligible to
continue in the competitive range.
AR 3252 (emphasis added). Plaintiffs, thus, “were . . . ‘Acceptable’” until “a recent U.S. Court
of Federal Claims decision.” Id. Try as it may, the government fails to convince the Court that
State’s requirements remained unchanged. See WaveLink, Inc. v. United States, 154 Fed. Cl.
245, 274 (2021) (“The Court rejects the government’s attempt to avoid the Solicitation’s plain
language by asserting that the Agency merely decided to read it differently.”).
The government’s briefing in this case also spills much ink on whether Plaintiffs
complied with FAR 52.204-7, as interpreted by Judge Hertling. As discussed above, Plaintiffs
are not challenging in this bid protest that interpretation of FAR 52.204-7. Rather, the question
before the Court in the instant matter is whether State faithfully applied the requirements or
terms and conditions of the instant solicitation. The Court has determined it did not.
The question then becomes, having found that State imposed a new requirement or term
and condition midstream, what was State compelled to do? The FAR provides a simple answer:
“[w]hen, either before or after receipt of proposals, the Government changes its requirements or
22
terms and conditions, the contracting officer shall amend the solicitation.” 48 C.F.R.
§ 15.206(a); see also ARxIUM, Inc. v. United States, 136 Fed. Cl. 188, 192 (2018) (“[I]t was
arbitrary for the government not to amend the solicitation and accept revised quotations after its
interpretation of the two requirements in question had changed.”). The Court notes that the text
of this provision is clear on its face and does not distinguish between instances in which (1) an
agency awards a contract to an offeror whose proposal did not otherwise meet the express
requirements of the solicitation (i.e., the agency relaxes a requirement), or (2) an agency
eliminates from competition an offeror whose proposal otherwise satisfies the express
requirements of the solicitation (i.e., the agency increases a requirement). See, e.g., Alfa Laval
Separation, Inc., 175 F.3d at 1368 (citing 48 C.F.R. § 15.606(a), (c), the predecessor to 48
C.F.R. § 15.206) (“48 C.F.R. § 15.606(a), (c) (1996) (requiring the government to issue a written
amendment to a solicitation when it ‘changes, relaxes, increases, or otherwise modifies its
requirements,’ and to provide an opportunity for competitors to submit new or amended
proposals when it prefers a proposal involving ‘a departure from the stated requirements’)”); see
also Seventh Dimension, LLC v. United States, No. 21-2275C, 2022 WL 1486504, at *10 (Fed.
Cl. May 4, 2022) (“To summarize, the CO must issue a solicitation amendment to capture any
government changes to requirements or terms and conditions.” (emphasis added)). Said another
way, “[i]f the agency changes any evaluation criterion after issuing the solicitation, it must
amend the solicitation and notify the offerors of the changed requirement.” Elec. Data Sys., LLC
v. United States, 93 Fed. Cl. 416, 430 (2010) (citing 48 C.F.R. § 15.206(a)). 4 State issued no
such amendment in this procurement, despite what in effect was its change to the SAM
registration requirements following receipt of proposals. Thus, the Court will apply FAR 15.206
to require State to properly amend, notify offerors, and issue a revised solicitation.
The Court takes no position at this juncture on whether such an amendment would trigger
the requirements of FAR 15.206(e), which provides:
If, in the judgment of the contracting officer, based on market research or otherwise,
an amendment proposed for issuance after offers have been received is so
substantial as to exceed what prospective offerors reasonably could have
anticipated, so that additional sources likely would have submitted offers had the
4
Another judge of this Court has previously seemingly suggested that mere technicalities in a
solicitation, such as extending deadlines, cannot be grounds for an agency’s violation of FAR 15.206(a).
In Guardian Moving & Storage Co. v. United States, Judge Kaplan opined—
[Plaintiff’s] premise that an agency must amend the solicitation when extending an FPR
deadline has no support in the language of the FAR or any case of which the Court is aware.
Under FAR 15.206(a), an amendment to the solicitation is required only “[w]hen, either
before or after receipt of proposals, the Government changes its requirements or terms and
conditions.” While [Plaintiff] views an extension of the FPR deadline as a change in the
“requirements or terms and conditions,” . . . case law and other authority suggest that FAR
15.206 refers to substantive changes in evaluation criteria that would cause offerors to alter
their proposals. See SP Sys., Inc. v. United States, 86 Fed. Cl. 1, 18 (2009) . . . .
Guardian Moving & Storage Co. v. United States, 122 Fed. Cl. 117, 134 (2015), aff’d, 657 F. App’x 1018
(Fed. Cir. 2016) (internal and other citations omitted). However, the Court in the instant matter finds the
solicitation’s SAM registration requirements as substantive and not a mere technicality.
23
substance of the amendment been known to them, the contracting officer shall
cancel the original solicitation and issue a new one, regardless of the stage of the
acquisition.
48 C.F.R. § 15.206(e). This provision of the FAR gives the contracting officer some discretion
in deciding whether to cancel the original solicitation and that discretion should be exercised
before the Court opines on its propriety.
Finally, the Court ponders whether State viewed itself as stuck between a rock and a hard
place: proceed with award to Plaintiffs in the wake of Judge Hertling’s decision and face a bid
protest for action allegedly contrary to law; or, exclude Plaintiffs based on State’s last minute,
newly adopted interpretation of FAR 52.204-7 and risk the very bid protest the agency finds
itself in today. The Court would sympathize with an agency in such a position, but for the fact
that State failed to take the one route prescribed by the FAR that could have avoided this
situation in the first place: formally amend the solicitation to account for State’s modified SAM
registration requirements. This State was compelled to do under FAR 15.206, and this State
failed to do. Plaintiffs have thus identified “a clear and prejudicial violation of applicable . . .
regulations.” Impresa Construzioni, 238 F.3d at 1333.
5. State’s Decision to Eliminate Plaintiffs from the Competitive Range Failed to
Consider an Important Aspect of the Problem
Alternatively, and independently of the above, State’s decision to solve the problem
created by its new interpretation of the SAM registration requirements was arbitrary and
capricious, because, in addressing the issue, “the agency ‘entirely failed to consider an important
aspect of the problem.’” Ala. Aircraft Indus., Inc. v. United States, 586 F.3d 1372, 1375 (Fed.
Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)); see also CBY Design Builders v. United States, 105 Fed. Cl. 303, 344 (2012) (“[T]he
Court finds that this is one of the rare cases in which the agency entirely failed to consider an
important aspect of the problem.” (internal quotations and citations omitted)). Although it is
“rare for our court to find that an agency’s decision was arbitrary because the agency entirely
failed to consider an important aspect of the problem,” the administrative record demonstrates
that this protest is such a case. ARxIUM, Inc., 136 Fed. Cl. at 200 (internal quotations and
citations omitted). Indeed, the very limited support in the administrative record for the action
that State did take once it changed its interpretation of the SAM requirements does not show
whether State considered any other way of solving the problem.
To review, all that is included in the administrative record showing what State
considered after its new interpretation of the SAM requirements caused its only two technically
acceptable proposals to be ineligible for award is the following:
However, in light of a recent U.S. Court of Federal Claims decision, neither G4S
nor were properly registered as Joint Ventures in the Government’s
SAM.gov system at the time of proposal submission. Therefore, as required by
FAR 52.204-7 and Section L of the solicitation, both and G4S cannot be
24
LLC, et al., v. United States, No. 21-1817 (Fed. Cl. Mar. 17, 2022) (“DoS could have reopened
the procurement to conduct discussions and permit revised offers to remedy the SAM
registration issue.”); see also id. at 2–3 (stating that the SAM registration issue is a deficiency
remediable via discussions); Hr’g Tr. at 68, G4S Secure Integration LLC, et al., v. United States,
No. 21-1817 (Fed. Cl. Mar. 30, 2022), ECF No. 70 (acknowledging that reopening discussions to
permit G4S to address its SAM registration “would be . . . within [DoS’s] discretion”). In other
words, State believed it could reopen discussions to solve the SAM registration issue with
Plaintiffs who had the lowest price, technically acceptable offer, but instead, without
explanation, decided to reopen discussions to allow two technically unacceptable proposals to
compete. Although it is possible State had an explanation for such an apparently unreasonable
decision, it is not documented in the record. Accordingly, State’s approach fails to address
important aspects of the problem and is thus unreasonable and Plaintiffs were clearly prejudiced
by this failure.
6. Plaintiffs Were Prejudiced by State’s Failure to Amend the Solicitation
Although State erred by failing to amend the solicitation to account for its newly adopted
SAM registration requirements and by removing Plaintiffs from the competitive range without
considering an important aspect of the problem, this alone does not entitle Plaintiffs to relief.
Rather, Plaintiffs must demonstrate that State’s errors were prejudicial. Bannum, Inc., 404 F.3d
at 1351 (“A bid protest proceeds in two steps. . . . [I]f the trial court finds that the government’s
conduct fails the APA review . . . , then it proceeds to determine, as a factual matter, if the bid
protester was prejudiced by that conduct.”); see also Ascendant Servs., LLC v. United States, No.
22-72 C, 2022 WL 2063327, at *8 (Fed. Cl. May 16, 2022) (“There is no presumption of
prejudicial error, even in cases where the agency’s action was irrational.”) (citing Sys. Studies &
Simulation, Inc. v. United States, 22 F.4th 994, 998 (Fed. Cir. 2021)). Prejudice, thus, is a
question of fact. Generally, the Court is to consider whether “there was a substantial chance that
[Plaintiffs] would have received the contract award but for [the agency’s] error.” Statistica, Inc.
v. Christopher, 102 F.3d 1577, 1582 (Fed. Cir. 1996). In the pre-award protest context, however,
the prejudice inquiry asks “whether [Plaintiffs have] demonstrated a non-trivial competitive
injury which can be addressed by judicial relief.” Weeks Marine, Inc., 575 F.3d at 1362 (internal
quotations omitted).
Plaintiffs contend that “[b]ecause DoS confirmed [Plaintiffs’] understanding of the
Solicitation’s SAM registration requirements before and after proposal submission, . . . the FAR
dictate[s] that the contracting officer did not have the discretion to eliminate [Plaintiffs] from the
competition without permitting [Plaintiffs] the opportunity to propose against DoS’s new
interpretation,” and, therefore, Plaintiffs were prejudiced. Pls.’ Response & Reply at 26
(emphasis omitted). Similarly, in its arguments as to standing, Plaintiffs contend that they were
“the lowest-priced, technically acceptable offeror and [were] apparently recommended for
contract award before DoS arbitrarily excluded [Plaintiffs] from the competition. Thus, but for
DoS’s arbitrary action, [Plaintiffs] would have won the contract.” Pls.’ MJAR at 18. Under
either allegation of prejudicial harm—and under either standard for prejudice—the Court firmly
concurs with Plaintiffs.
26
The record is clear that, but for the agency’s erroneous application of the requirements of
its own solicitation—and attendant failure to amend the solicitation pursuant to FAR 15.206—
the agency’s TEP had “identified an award to be made to [Plaintiffs] or as both were
deemed technically ‘Acceptable.’” AR 3252. In fact, Plaintiffs were not merely among the final
contenders for award but were the presumptive awardees. See AR 3270 (“Based on this
assessment, G4S was selected for contract award.”). Therefore, Plaintiffs have demonstrated
more than sufficient prejudice, meeting both the “substantial chance” standard, as well as the
pre-award-specific inquiry of “non-trivial competitive injury.” Whether viewed as a failure to
amend the solicitation pursuant to FAR 15.206 or a failure to consider an important aspect of the
problem, State was required to do more than make a conclusory determination that Plaintiffs
needed to be removed from the competitive range. Rather, State needed to amend the
solicitation to conform to its new interpretation of the SAM registration requirements and to
consider fully the problem it faced when it determined that its only two technically acceptable
proposals did not comply with this new interpretation. These failures prejudiced Plaintiffs.
7. State Engaged in Misleading Discussions in Violation of the FAR, But Under the
Express Terms of the Solicitation, Plaintiffs Were Not Prejudiced
The Court turns to Plaintiffs’ allegations regarding the discussions State held, which
Plaintiffs allege were misleading. See Pls.’ MJAR at 29–33. Specifically, Plaintiffs contend that
State failed to indicate to, or discuss with, Plaintiffs its new interpretation of FAR 52.204-7 and
the solicitation’s SAM registration requirements. According to Plaintiffs, State “conducted
discussions with G4S in December 2021 but did not raise any questions or concerns regarding
G4S’s SAM registration status or compliance with FAR 52.204-7,” and “[b]y failing to raise
those issues, DoS signaled that it was permissible for an unincorporated joint venture to submit a
proposal without registering in SAM.gov as long as the individual members were registered in
SAM.gov . . . .” Id. at 30. Furthermore,
[i]f [State] had instead believed that FAR 52.204-7 required even unincorporated
joint ventures to be registered in SAM.gov at the time of proposal submission, its
discussions with G4S would have had to address the issue, as the purpose of
discussions is to address “deficiencies [and] significant weaknesses” with each
offeror in the competitive range to “maximize the Government’s ability to obtain
best value.”
Id. at 31 (quoting FAR 15.306(d)(2)–(3)). Plaintiffs allege they were prejudiced “because, but
for [State’s] failure to reopen discussions with G4S to allow it the opportunity to revise its
proposal according to the Agency’s new interpretation, G4S would have registered its
unincorporated joint venture in SAM.gov and won the contract.” Id. (citation omitted) (emphasis
added).
The government counters that “G4S’s argument fails because [State] was not required to
discuss G4S’s registration failure and no discussion would have resulted in any action that would
rectify G4S’s failure to be registered in SAM at the time of proposal submission.” Gov.’s MJAR
at 15. According to the government, “[c]ontrary to G4S’s contention, FAR 15.306(d)(3) does
not require the agency to discuss G4S’s failure to register the joint venture in SAM,” because
27
“FAR 15.306(d)(3)’s statement that a contracting officer should discuss weaknesses is qualified
by a statement that, ‘[t]he scope and extent of discussions are a matter of contracting officer
judgment.’” Id. Furthermore, State “did not have any discretion to waive the requirement that
registration of the Joint Venture occur on or before October 4, 2021,” and “[d]iscussion of this
with G4S would have been fruitless given the lack of flexibility [State] had.” Id. at 16 (footnote
omitted).
The Court briefly reiterates the muddled facts of this case—which are entirely of the
government’s own making. The solicitation requires an active SAM registration “at the time of
proposal submission,” otherwise such offeror(s) “will be excluded from the process and their
proposals will not be evaluated,” AR 391 (emphasis added); following receipt of Plaintiffs’
proposals, State proceeded to evaluate such proposals, see, e.g., AR 3224 (Final TEP Report);
AR Tab 28 (Final Price Analysis Report); AR 3270 (Award Determination Memorandum); AR
3242 (Final Competitive Range Determination); State held discussions with Plaintiffs in
December 2021; then, after having such discussions, State “appreciated the import of the
Solicitation’s clauses” and “disqualified” Plaintiffs from the competition. Gov.’s Reply at 19.
Tabling for a moment the issue of prejudice, and if the Court assumes arguendo an additional
fact, the Court must conclude that State erred by failing to raise the SAM registration issue with
Plaintiffs during discussions—an omission that violates both the letter and spirit of the FAR. As
further explained below, if the Court accepts the government’s strongly held premise that SAM
registration failure was a defect warranting elimination from consideration, then it necessarily
operates as a “deficiency” under the FAR, thus necessitating that the government at the very least
notify Plaintiffs because it had previously held discussions.
First, the government glosses over the fact that, while the FAR indeed grants discretion to
contracting officers concerning the discussion of mere weaknesses, see Gov.’s MJAR at 15, the
FAR grants no such discretion concerning deficiencies. Rather, FAR 15.306(d)(3) in relevant
part provides—
At a minimum, the contracting officer must . . . indicate to, or discuss with, each
offeror still being considered for award, deficiencies, significant weaknesses, and
adverse past performance information to which the offeror has not yet had an
opportunity to respond. The contracting officer also is encouraged to discuss other
aspects of the offeror’s proposal that could, in the opinion of the contracting officer,
be altered or explained to enhance materially the proposal’s potential for award.
However, the contracting officer is not required to discuss every area where the
proposal could be improved. The scope and extent of discussions are a matter of
contracting officer judgment.
FAR 15.306(d)(3) (emphasis added). The FAR defines “deficiency” as “a material failure of a
proposal to meet a Government requirement . . . .” 48 C.F.R. § 15.001. Thus, said another way,
if Plaintiffs’ proposals suffered “a material failure . . . to meet a Government requirement,” then
“[a]t a minimum, the contracting officer must . . . indicate to, or discuss with” Plaintiffs such a
deficiency if Plaintiffs were “still being considered for award.”
28
So, did Plaintiffs’ proposals suffer from a deficiency? Plaintiffs repeatedly refer to their
SAM registration status, at least when viewed through the lens of the government’s new
interpretation of the solicitation’s SAM registration requirement, as a deficiency. See, e.g., Pls.’
MJAR at 32 (“G4S’s failure to register the unincorporated joint venture in SAM was a
deficiency that [State] should have identified and raised during discussions.”). Cleverly, the
government never appears to admit as much. Yet, its briefs seem to say everything but. The
government in its own cross-motion refers to Plaintiffs’ “failure to comply with the solicitation
and FAR’s SAM registration requirements,” which warranted disqualification. Gov.’s MJAR at
6 (emphasis added); see also id. at 10 (noting Plaintiffs’ “failure to both register the Joint
Venture itself and register it before the proposal submission deadline” and “the requirements . . .
in the Solicitation requiring that the Joint Venture itself be registered in SAM.gov”); Gov.’s
Reply at 18 (advocating for “a straightforward application of the Solicitation terms to G4S’s
failure to register in SAM”).
At the same time, the government insists “[i]t was . . . not an abuse of discretion for the
Contracting Officer to decide not to hold any discussions regarding a fatal defect . . . .” Gov.’s
Reply at 18. Yet, despite this “fatal defect,” State evaluated Plaintiffs’ proposals and proceeded
to hold discussions. The government, it seems, wants to enjoy the effect of a deficiency on
Plaintiffs without acknowledging the responsibility the FAR places in return on the contracting
officer. The Court cannot oblige. And FAR 15.306(d)(3) gives no shelter to an agency that
appears incapable, in this case, of maintaining a consistent interpretation of its own solicitation.
The Court thus assumes arguendo that if Plaintiffs’ SAM registration was not compliant
with the solicitation’s requirements—a “fatal defect”—such noncompliance would constitute a
deficiency. State’s failure to raise it during the discussions that State itself initiated violates the
mandate and spirit of FAR 15.306(d)(3), robbing Plaintiffs of meaningful discussions. And
although the government insists the December 2021 discussions overall “were simply
unnecessary,” Gov.’s Reply at 18, that does not absolve State of its duty to follow what the FAR
mandates.
Moreover, State’s failure to “indicate to, or discuss with” Plaintiffs the apparent
deficiency is equally offensive if the Court considers State’s read of the SAM registration
requirements as retroactively applied, after discussions had already taken place. In other words,
regardless of whether State initially viewed its solicitation as mandating a joint venture register
in SAM as a single entity or adopted that view post-hoc in light of Judge Hertling’s opinion,
State’s omission runs afoul of the FAR. See ARxIUM, Inc., 136 Fed. Cl. at 202 (“Retroactively
applying the GAO interpretation of requirement # 23 to ARxIUM’s proposal renders the
discussions arbitrary and unfair to plaintiff, as it was not afforded the opportunity to address the
failure of its proposal to meet the new interpretation.”).
Nevertheless, even in holding that State erred by misleading Plaintiffs during discussions
by failing to raise either Plaintiffs’ “fatal defect” or State’s new interpretation of the SAM
registration requirements, the Court finds that such objectionable error(s) would not be
prejudicial to Plaintiffs. Under the terms of this solicitation, SAM registration compliance was
relevant at the time of proposal submission, and there is no compelling authority before the Court
suggesting that, under a plain reading of this solicitation, discussions alone would be sufficient to
29
give Plaintiffs the opportunity to correct the SAM registration deficiency. Recall, subsection
L.11.1 of the solicitation provides—
Offer[or]s, including any offeror organized as a joint venture, must have an active
SAM registration at the time of proposal submission and throughout the
procurement process. Any offeror whose registration is not active in SAM at the
time of proposal submisssion [sic] will be excluded from the process and their
proposals will not be evaluated.
AR 79 (bold omitted, emphasis added). The government is therefore correct that under the terms
of this solicitation, “there is nothing G4S could have done during discussions in December 2021
that would have rectified its failure to be registered in SAM at the time of its proposal
submission in October 2021.” Gov.’s Reply at 18; see also Gov.’s MJAR at 16 (“[State] did not
have any discretion to waive the requirement that registration of the Joint Venture occur on or
before October 4, 2021, [and] [d]iscussion of this with G4S would have been fruitless given the
lack of flexibility [State] had.”).
In sum, State undertook discussions with Plaintiffs, which proved misleading and
contrary to the mandate of FAR 15.306(d)(3) if the Court assumes arguendo that Plaintiffs’
alleged SAM registration failure constitutes a deficiency. The agency cannot hide behind its
belated new interpretation—or its belated realization of the meaning of its own solicitation—to
negate its duty under the FAR to engage in meaningful discussions with Plaintiffs. However,
because the instant solicitation yielded no room for correction of that deficiency through
discussions alone, Plaintiffs were not prejudicially harmed by State’s error.
8. Plaintiffs Are Entitled to Injunctive Relief
As Plaintiffs have established that State’s failure either to follow the terms of the
solicitation or, if it wanted to change its requirements or terms and conditions, amend the
solicitation, was both contrary to law and prejudicial, as was its failure to consider an important
aspect of the problem, the Court addresses whether Plaintiffs are entitled to injunctive relief.
The Federal Circuit has articulated the test for a permanent injunction as follows:
To determine if a permanent injunction is warranted, the court must consider
whether (1) the plaintiff has succeeded on the merits of the case; (2) the plaintiff
will suffer irreparable harm if the court withholds injunctive relief; (3) the balance
of hardships to the respective parties favors the grant of injunctive relief; and (4)
the public interest is served by a grant of injunctive relief.
Centech Group, Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (citing PGBA, LLC
v. United States, 389 F.3d 1219, 1228–29 (Fed. Cir. 2004)). “‘[P]roving success on the merits is
a necessary element for a permanent injunction, [but the court] may balance the remaining three
Centech permanent injunction factors—irreparable harm, balance of hardships, and public
interest—when deciding whether to grant or deny injunctive relief . . . .” Dell Fed. Sys., L.P. v.
United States, 906 F.3d 982, 999 & n.13 (Fed. Cir. 2018).
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Here, Plaintiffs have succeeded on the merits—a “necessary element” of the injunctive
relief inquiry. State committed prejudicial error by failing to amend the solicitation pursuant to
FAR 15.206(a) when it modified the solicitation’s SAM registration requirements and by failing
to consider an important aspect of the problem. Therefore, the Court addresses the remaining
three injunctive relief factors and will balance them, if necessary.
First, the Court finds that Plaintiffs will suffer irreparable harm if the court withholds
injunctive relief. With respect to irreparable harm, the pertinent question is “whether plaintiff
has an adequate remedy in the absence of an injunction.” Magellan Corp. v. United States, 27
Fed. Cl. 446, 447 (1993); see also Younger v. Harris, 401 U.S. 37, 43–44 (1971) (“[T]he basic
doctrine of equity jurisprudence [is] that courts of equity should not act . . . when the moving
party has an adequate remedy at law and will not suffer irreparable injury if denied equitable
relief.”). Plaintiffs argue that “[a]bsent injunctive relief, [Plaintiffs] will suffer at least three
types of irreparable harm: loss of the opportunity to fairly compete for the contract; loss of
profits from the contract; and the loss of key personnel currently working on the incumbent
contract.” Pls.’ MJAR at 34.
“This court has recognized that a lost opportunity to compete for a contract—and the
attendant inability to obtain the profits expected from the contract—can constitute irreparable
injury.” Bluewater Mgmt. Grp., LLC v. United States, 150 Fed. Cl. 588, 619 (2020) (citing Akal
Sec., Inc. v. United States, 87 Fed. Cl. 311, 319 (2009); Hosp. Klean of Tex., Inc. v. United
States, 65 Fed. Cl. 618, 624 (2005)); see also CW Gov’t Travel, Inc. v. United States, 110 Fed.
Cl. 462, 494 (2013) (“The Court of Federal Claims has repeatedly held that a protester suffers
irreparable harm if it is deprived of the opportunity to compete fairly for a contract.”); Serco Inc.
v. United States, 81 Fed. Cl. 463, 501–02 (2008) (noting that because “the only other available
relief—the potential for recovery of bid preparation costs—would not compensate [the
protestors] for the loss of valuable business . . . loss, deriving from a lost opportunity to compete
on a level playing field for a contract, has been found sufficient to prove irreparable harm”). As
has been well-established above, State’s prejudicial error resulted in Plaintiffs being entirely
removed from competition without recourse, which necessarily carries with it the associated loss
of profits and key personnel currently working on the incumbent contract. Accordingly,
Plaintiffs will suffer irreparable harm if injunctive relief is not provided.
Next, the Court finds that the balance of hardships to the respective parties favors the
grant of injunctive relief. On this factor, the Court must determine whether the balance of
hardships to the government in issuing an injunction outweigh the harms to Plaintiffs. PGBA,
LLC, 389 F.3d at 1229. Here Plaintiffs have established irreparable harm, as explained above.
The government argues that “[g]ranting an injunction would prolong an already extended
procurement process, require [State] to administer short-term holdover contracts, and disrupt the
smooth transition between the incumbent contractor and prospective awardee,” which would all
“cause substantial disruption to [State’s] diplomatic mission in Slovakia.” Gov.’s MJAR at 23.
However, the harms asserted by the government do not outweigh the harm to Plaintiffs. State’s
failure to apply the terms of its own solicitation or to amend the solicitation pursuant to
FAR 15.206 was detrimental to Plaintiffs’ ability to meaningfully compete for the contract. The
government cannot now contend that costs and delays stemming from State’s own failures either
to follow the requirements of the solicitation or amend it as the FAR requires should prevent the
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issuance of an injunction. See CW Gov’t Travel, Inc. v. United States, 154 Fed. Cl. 721, 751
(2021). As Judge Hertling recently observed:
Requiring the government to continue purchasing the services from the incumbent
for the interim does not outweigh the irreparable harm to an offeror arising from an
agency’s own failure to comply with the law in awarding the contract. Further, the
resources needed to conduct a proper procurement are only those that should have
been employed originally by the Agency. Having to employ these resources again
is not a hardship, but an obligation.
Green Tech. Grp., LLC v. United States, 147 Fed. Cl. 231, 246 (2020) (citation omitted); see also
Caddell Constr. Co. v. United States, 111 Fed. Cl. 49, 116–17 (2013) (“[A]ny harm caused to the
[agency] by granting a permanent injunction regarding [awardee’s] performance of the []
contract is the result of defendant’s conduct during the procurement.”); Sheridan Corp. v. United
States, 94 Fed. Cl. 663, 670 (2010) (“From the Court’s view, these alleged harms are of the
agency’s own making.”).
Finally, the Court finds that the public interest is served by a grant of injunctive relief.
The Supreme Court has instructed that before a court “employ[s] the extraordinary remedy of
injunction,” it “should pay particular regard for the public consequences” of so doing.
Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). It is beyond dispute that “[t]here is
an overriding public interest in preserving the integrity of the procurement process by requiring
the government to follow its procurement regulations.” Turner Constr. Co. v. United States, 94
Fed. Cl. 561, 586 (2010) (citation and internal quotations omitted), aff’d, 645 F.3d 1377 (Fed.
Cir. 2011). Moreover, “the public interest in honest, open, and fair competition in the
procurement process is compromised whenever an agency abuses its discretion in evaluating a
contractor’s bid.” PGBA, LLC v. United States, 57 Fed. Cl. 655, 663 (2003). It is paramount
that State—as with any agency—abide by the terms of its solicitation and the FAR in order to
maintain public confidence in the procurement process. The Court finds this factor most
compelling in the instant case, in which State’s midstream, about-face modification of its own
requirements rendered Plaintiffs the presumptive awardees one day and completely out of the
competition the next. See AR 3252 (“The TEP identified an award to be made to [Plaintiffs]
. . . . However, . . . . [Plaintiffs] cannot be considered for award and are determined to be
ineligible to continue in the competitive range.”). Accordingly, this factor strongly weighs in
Plaintiffs’ favor.
Accordingly, because all factors weigh in Plaintiffs’ favor, no balancing is necessary.
Plaintiffs are entitled to injunctive relief in the instant matter.
CONCLUSION
For the reasons set forth above, the Court GRANTS Plaintiffs’ motion for judgment on
the administrative record, DENIES the government’s cross-motion for judgment on the
administrative record, and orders as follows:
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1. The United States, by and through the Department of State, its officers, agents, and
employees, is hereby PERMANENTLY RESTRAINED AND ENJOINED from
continuing procurement of Solicitation No. 19AQMM21R0194 at issue in this protest,
until such time as it amends Solicitation No. 19AQMM21R0194 pursuant to the FAR in a
manner that is consistent with this Opinion and Order.
2. The parties shall confer to determine agreed-to proposed redactions to this opinion. On
or before August 11, 2022, the parties shall file a joint status report indicating their
agreement on proposed redactions, attaching a copy of those pages of the Court’s opinion
that contain proposed redactions, with all proposed redactions clearly indicated; and
3. The Clerk shall ENTER final judgment accordingly.
IT IS SO ORDERED.
s/ Zachary N. Somers
ZACHARY N. SOMERS
Judge
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