Quanterion Solutions, Inc v. United States

In the United States Court of Federal Claims
No. 20-1266C
(Filed Under Seal: January 26, 2021)
(Reissued for Publication: February 18, 2021) *
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QUANTERION SOLUTIONS, INC., *
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Plaintiff, *
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v. *
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Postaward Bid Protest; Cross-Motions for
THE UNITED STATES, *
Judgment on the Administrative Record;
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Evaluation of Proposals; Transition Plan
Defendant, *
and Costs; Cost Realism Analysis
*
and *
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SURVICE ENGINEERING CO., LLC, *
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Defendant-Intervenor. *
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Bret S. Wacker, Detroit, MI, for plaintiff.
Kyle S. Beckrich, United States Department of Justice, Washington, DC, for defendant.
Donald J. Walsh, Baltimore, MD, for defendant-intervenor.
OPINION AND ORDER
SWEENEY, Senior Judge
In this postaward bid protest, plaintiff Quanterion Solutions, Inc. (“QSI”) contends that
the United States Department of the Air Force (“Agency”) improperly awarded a research and
development services contract to an offeror that submitted a technically unacceptable proposal.
The awardee of the contract, SURVICE Engineering Co., LLC (“SURVICE”), intervenes in this
suit. QSI seeks a permanent injunction of the award to SURVICE.
*
The court initially issued this Opinion and Order under seal with instructions for the
parties to propose any redactions. The parties informed the court that no redactions were
necessary to the Opinion and Order.
Before the court are cross-motions for judgment on the administrative record filed by QSI
and SURVICE pursuant to Rule 52.1(c) of the Rules of the United States Court of Federal
Claims (“RCFC”), along with a combined RCFC 12(b)(6) motion to dismiss and RCFC 52.1
cross-motion for judgment on the administrative record filed by the United States. For the
reasons set forth below, the court denies defendant’s motion to dismiss as moot, grants
SURVICE’s and defendant’s cross-motions for judgment on the administrative record, and
denies QSI’s motion for judgment on the administrative record and its request for permanent
injunctive relief.
I. BACKGROUND
A. History of the Procurement
1. Request for Proposal
The dispute in this case arises from Request for Proposal FA 8075-20-R-0001 (“RFP”),
in which the Agency combines the work of three incumbent contracts into one successor
contract. Each of the incumbent contracts concerns research services for a particular grouping of
topics of interest to the military through the operation of an Information Analysis Center
(“IAC”). Administrative R. (“AR”) 1169. As explained in the RFP, the Department of Defense
(“DoD”) “IACs function as centers of excellence to engage in collecting, analyzing,
synthesizing, and disseminating engineering, scientific and technical information (STI) in clearly
defined specialized technical focus areas of significant DoD interest or concern.” Id. The first
incumbent contract is for the Defense Systems IAC (“DSIAC”), the second is for the Homeland
Defense and Security IAC (“HDIAC”), and the third is for the Cyber-Security and Information
Systems IAC (“CSIAC”). Id.
The contractor for an IAC maintains a Basic Center of Operations (“BCO”). Id. Until
this current procurement, each of the three incumbent BCO contracts was awarded to a small
business under a six-year indefinite delivery/indefinite quantity (“ID/IQ”) contract. Id. Through
this RFP, however, the three BCOs would be consolidated under a single BCO contract,
sometimes referred to as the IAC BCO ID/IQ contract or the DoD IAC BCO contract. Id. at
1274, 1279. SURVICE is the incumbent contractor for the DSIAC BCO and QSI is the
incumbent contractor for the HDIAC and CSIAC BCOs. Id. at 3344.
The Agency issued the RFP on November 12, 2019. Id. at 545-1127. The contracting
vehicle is an “Indefinite Delivery, Indefinite Quantity Cost Plus Fixed Fee . . . , Cost
Reimbursable, and Firm Fixed Price . . . six (6) year single award contract, with an estimated
ceiling value of $99.1” million. Id. at 1272. Of particular interest to this protest are the first four
Contract Line Item Numbers, CLINs 0001 through 0004. CLIN 0001 pays for the transition
from the incumbent DSIAC contract, CLIN 0002 pays for the transition from the incumbent
HDIAC contract, CLIN 0003 pays for the transition from the incumbent CSIAC contract, and
CLIN 0004 pays for contract performance for the first two years, i.e., the base period, of the IAC
BCO ID/IQ contract. See id. at 562-63, 1279, 1281. Both CLIN 0001 and CLIN 0004 were
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scheduled to start on July 1, 2020. Id. at 562-63. CLIN 0002 and CLIN 0003 were scheduled to
start at later dates, creating a staggered transition from the incumbent IAC contracts. Id.
The RFP was amended several times, but the text of the provisions most relevant to this
protest were not significantly altered. Of more interest are several questions posed on the topic
of the transition CLINs and the pricing of the first ninety days of contract performance. These
questions and the Agency’s answers will be discussed in the analysis section of this opinion.
Offerors were to submit their proposals in four separate volumes (Volumes I-IV): Past
Performance, Technical Capability, Cost/Price, and Contract Documentation. Id. at 1274.
Volume I was due on December 31, 2019; the other volumes were due on January 17, 2020. Id.
at 1165. SURVICE and QSI, the incumbent contractors, were the only offerors to submit
proposals. Id. at 3356.
2. Evaluation Scheme
The Agency opted for a best-value evaluation model to select the offeror that would “best
meet, or exceed, the [contract] requirements.” Id. at 1251. The evaluation factors to be weighed
in this decision were past performance, technical capability (with subfactors for transition,
operations approach, and management approach), and cost/price. Id. The past performance and
technical capability factors were of equal importance and were significantly more important than
cost/price when combined. Id. at 1252.
The transition subfactor of technical capability would be rated as acceptable or
unacceptable, unlike the other subfactors of technical capability where strengths, weaknesses,
significant weaknesses, and deficiencies would be identified, and which would be rated on a
scale from outstanding to unacceptable. Id. at 1251, 1256-57. Most of the attention in this
protest is on the transition subfactor, sometimes referred to as technical capability subfactor 1.
3. Evaluation of Proposals
For past performance, SURVICE received a higher “substantial” confidence rating
compared to QSI’s “satisfactory” confidence rating. Id. at 3498-99. For the transition subfactor
of technical capability, both proposals were rated “acceptable.” Id. at 3501, 3504. For the other
technical capability subfactors, SURVICE received a “good” rating and an “acceptable” rating,
whereas QSI received two “acceptable” ratings. Id. at 3501-06. Nothing in the record of the
Agency’s evaluation of proposals suggests that the difference in the offerors’ transition plans, or
the difference in the associated transition costs proposed by the offerors, was considered to be a
discriminating factor between the proposals submitted by QSI and SURVICE. See, e.g., id. at
3501-10. The Source Selection Authority (“SSA”) noted that “SURVICE ha[d] a higher rated
proposal at a lower cost/price than that of QSI.” Id. at 3510. The SSA decided to award the IAC
BCO ID/IQ contract to SURVICE without discussions. Id. at 3509-10.
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B. Protest History
On May 19, 2020, QSI received a written debriefing regarding its nonselection for award.
Id. at 3564-69. The Agency also answered QSI’s follow-up questions in a written statement
provided on May 21, 2020. Id. at 3570-72. Subsequently, QSI filed a timely protest with the
Government Accountability Office (“GAO”), which was denied on September 3, 2020. 1 Id. at
3575-5629.
QSI filed the instant protest on September 24, 2020. In its complaint, QSI asserts that the
Agency’s evaluation of SURVICE’s transition plan was inconsistent with the terms of the RFP,
and that it was prejudiced by this error. The Agency agreed to delay performance of the IAC
BCO ID/IQ contract until the end of January 2021 to accommodate this litigation, and the
parties, pursuant to their agreed-upon briefing schedule, have now fully briefed cross-motions for
judgment on the administrative record and defendant’s RCFC 12(b)(6) motion to dismiss. None
of the parties requested oral argument and this matter is ripe for decision.
II. DISCUSSION
In their briefs, the parties address QSI’s contention that the Agency’s evaluation of the
transition plan in SURVICE’s proposal was improper. This dispute largely turns on the correct
interpretation of the RFP and, secondarily, if the relevant RFP provisions are ambiguous,
whether the RFP contains a patent or a latent ambiguity regarding technical capability factor 1.
A final concern is whether a mathematical error in a component of the Agency’s Independent
Government Cost Estimate (“IGCE”) invalidates the Agency’s award decision.
As a threshold matter, defendant raises the issue of waiver in its RCFC 12(b)(6) motion
to dismiss: “Whether [QSI] has waived its challenge to the [RFP] when it proffers an
interpretation of a[n] [RFP] requirement that is contrary to the clear and unambiguous terms of
the [RFP].” Def.’s Mot. 1. However, the proper interpretation of the RFP terms concerning
transition plans is the primary inquiry in this protest, and this issue requires a close examination
of extrapleading materials in the AR provided by the Agency. Only after examining the AR can
the court determine whether the RFP terms were ambiguous and if any such ambiguity was
patent, requiring QSI to seek clarification prior to the proposal submission deadline.
In consequence, the optimal procedural approach is for the court to resolve the parties’
motions for judgment on the administrative record, which will address the patent ambiguity issue
as an integral part of the analysis. This approach renders it unnecessary for the court to resolve
defendant’s motion to dismiss. See Hyperion, Inc. v. United States, 120 Fed. Cl. 504, 510 (2015)
(proceeding under RCFC 52.1 because “the court’s consideration of these extra-pleading
materials requires conversion of the government’s motion to dismiss or for summary judgment
into a motion for judgment on the administrative record”); cf. RCFC 12(b)(6)(d) (requiring
1
Due to differences in the arguments considered by the GAO, that forum’s analysis
sheds no light on the issues before the court.
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conversion of the motion to dismiss to a motion for summary judgment if “matters outside the
pleadings are presented to and not excluded by the court”). Therefore, the court denies
defendant’s motion to dismiss under RCFC 12(b)(6) because it is moot. 2
To frame its analysis, the court turns to the standard of review to be applied in this
protest.
A. Bid Protest Review
The court reviews challenged agency actions in a procurement pursuant to the standards
set forth in 5 U.S.C. § 706. 28 U.S.C. § 1491(b)(4). Specifically, “the proper standard to be
applied in bid protest cases is provided by 5 U.S.C. § 706(2)(A): a reviewing court shall set
aside the agency action if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.’” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350 (Fed. Cir.
2004). Under the arbitrary and capricious standard, the court
may set aside a procurement action if “(1) the procurement official’s decision
lacked a rational basis; or (2) the procurement procedure involved a violation of
regulation or procedure.” A court reviews a challenge brought on the first ground
“to determine whether the contracting agency provided a coherent and reasonable
explanation of its exercise of discretion, and the disappointed bidder bears a
heavy burden of showing that the award decision had no rational basis.” “When a
challenge is brought on the second ground, the disappointed bidder must show a
clear and prejudicial violation of applicable statutes or regulations.”
Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (quoting Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332-33 (2001)); accord
Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (“The
arbitrary and capricious standard . . . requires a reviewing court to sustain an agency action
evincing rational reasoning and consideration of relevant factors.”).
Procurement officials “are ‘entitled to exercise discretion upon a broad range of issues
confronting them’ in the procurement process.” Impresa Construzioni Geom. Domenico Garufi,
238 F.3d at 1332-33 (quoting Latecoere Int’l, Inc. v. U.S. Dep’t of the Navy, 19 F.3d 1342, 1356
(11th Cir. 1994)). Thus, the court’s review of a procuring agency’s decision is “highly
deferential.” Advanced Data Concepts, Inc., 216 F.3d at 1058; see also Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (“The court is not empowered to
substitute its judgment for that of the agency.”). Furthermore, a “protestor’s burden of proving
that the award was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
2
Defendant’s motion to dismiss also does not address the mathematical error in a portion
of the Agency’s IGCE, an issue that must be addressed before the court can determine whether
dismissal of this protest is warranted. For this reason, as well, the parties’ cross-motions for
judgment on the administrative record are the proper focus of the court’s analysis here.
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with law is greater [in negotiated procurements] than in other types of bid protests.” Galen Med.
Assocs., Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004). In addition, technical
evaluation ratings produced by the procuring agency, in particular, are entitled to deference.
E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996) (“[T]echnical ratings
. . . involve discretionary determinations of procurement officials that a court will not second
guess.”); accord Goldschmitt & Assocs., LLC v. United States, 149 Fed. Cl. 401, 405 (2020)
(“[T]his Court gives great deference to ‘evaluations of proposals for their technical quality’ by
‘an agency’s subject-matter experts.’” (quoting RX Joint Venture, LLC v. United States, 145
Fed. Cl. 207, 213 (2019))).
“[O]verturning awards on de minimis errors wastes resources and time, and is needlessly
disruptive of procurement activities and governmental programs and operations.” Grumman
Data Sys. Corp. v. Widnall, 15 F.3d 1044, 1048 (Fed. Cir. 1994) (alteration in original) (quoting
Andersen Consulting Co. v. United States, 959 F.2d 929, 932 (Fed. Cir. 1992)). To mount a
successful challenge to a contract award, a protestor must identify “a significant error in the
procurement process” and show “that the error prejudiced it.” Data Gen. Corp. v. Johnson, 78
F.3d 1556, 1562 (Fed. Cir. 1996); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United
States, 720 F.3d 901, 907 (Fed. Cir. 2013) (“In a bid protest case, the inquiry is whether the
agency’s action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law and, if so, whether the error is prejudicial.”); Bannum, Inc. v. United States, 404 F.3d
1346, 1351 (Fed. Cir. 2005) (holding that if the procuring agency’s decision lacked a rational
basis or was made in violation of the applicable statutes, regulations, or procedures, the court
must then “determine, as a factual matter, if the bid protester was prejudiced by that conduct”).
“[T]o establish prejudice, a protester must show that, had it not been for the alleged error in the
procurement process, there was a reasonable likelihood that the protester would have been
awarded the contract.” Data Gen. Corp., 78 F.3d at 1562.
B. Analysis
The parties’ primary dispute in this protest is illustrated by the different approaches the
offerors took in proposing costs of performance during transition periods. SURVICE’s approach
to the transition of each of the incumbent IAC contracts was to allocate to CLINs 0001-0003
only the actual costs required to prepare for contract performance as the provider of that set of
services. QSI’s approach was to include in CLINs 0001-0003 not only the preparation costs for
the assumption of duties for each of the incumbent IAC contracts, but also its contract
performance costs within the ninety-day transition period for providing that set of IAC services.
As a result, SURVICE proposed a total price of $266,450 for CLINs 0001-0003, AR 2827,
whereas QSI proposed a total price of $1,154,231 for these CLINs, id. at 2130. The Agency
found the offerors’ proposed costs, as well as the markedly different transition approaches of the
offerors, to be acceptable. Further, the evaluation record contains no statement that either QSI or
SURVICE correctly or incorrectly interpreted the RFP as to the allocation of costs to CLINs
0001-0003. With this illustration of the offerors’ different approaches in mind, the court turns
first to the relevant terms of the RFP.
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1. The RFP Does Not Require Transition CLINs to Include IAC Operational Costs
QSI vigorously defends its interpretation of the terms of the RFP that are relevant to
transition plans and transition costs. However, QSI’s position is unjustified when the RFP is
considered as a whole. See Banknote Corp. of Am., 365 F.3d 1353 (“[W]e must consider the
solicitation as a whole, interpreting it in a manner that harmonizes and gives reasonable meaning
to all of its provisions.” (citing Coast Fed. Bank, FSB v. United States, 323 F.3d 1035, 1038
(Fed. Cir. 2003))). In other words, QSI’s proposed interpretation of an isolated sentence cannot
control if, as is the case here, all of the relevant terms of the RFP can be harmonized to provide a
reasonable and coherent transition requirement. In addition, because the RFP was amended by
the Agency’s answers to questions from potential offerors, AR 1261-67, 1270-71, 1307, all of
the RFP terms that address transition plans and costs, and the Agency’s answers to questions
related to transition plans and costs, must be harmonized. See, e.g., BayFirst Sols., LLC v.
United States, 102 Fed. Cl. 677, 689 & n.15 (2012) (relying on answers to questions from
offerors to interpret an RFP). Once all of the relevant RFP elements have been considered,
QSI’s interpretation of the RFP cannot stand.
Three sections of the RFP, two sections of the Performance Work Statement (“PWS”),
and three Agency answers to questions are relevant to the parties’ dispute. First, Section L of the
RFP, providing “General Instructions and Information,” AR 1272, contains the following
instruction regarding the offeror’s transition plan in L.4.3.1:
The Offeror shall provide a Phase-In Transition Plan. All Offerors shall describe
their approach to transition from the legacy CS[IAC], DS[IAC], and HD[IAC]
contracts to full performance using 90-day phase-in periods for each legacy
contract. The Offeror shall describe how it will use the phase-in period to
mobilize, train, and otherwise prepare to assume complete responsibility for the
BCOs. Volume III pricing of CLIN 0001, [0]002, and [0]003 shall align with the
Offeror’s Phase-In Transition Plan approach.
Id. at 1279. Section L also provides instruction in L5.2:
Phase-In Transition (CLIN 0001 (DS[IAC]), CLIN 0002 (HD[IAC]), CLIN 0003
(CS[IAC])). The Offeror shall propose Cost Plus Fixed-Fee (CPFF) amounts for
the efforts required in the assumption of full responsibility of the DSIAC,
HDIAC, and CSIAC BCO requirements. If an Offeror proposes no need to
transition from another contractor or a shorter than 90 day transition period, the
Offeror shall still price out all CLINs based on their proposed cost to perform the
initial 90 days of services after contract award. The Offeror’s approach to
providing services during the initial 90 day period shall be addressed in Technical
Capability Volume II.
Id. at 1281. Turning to Section M of the RFP, “Evaluation Factors for Award,” id. at 1251, the
Agency’s evaluation criterion for transition plans is succinctly summarized in M.3.2.2.1.1:
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The proposal provides a feasible approach to execute a sound and feasible
transition for all three legacy BCOs that ensures seamless uninterrupted
service delivery within 90 days from the first date of phase-in performance,
starting with the day of award. The proposal provides details of the phase-in of
personnel and management of phase-in efforts. The phase-in approach identifies
key personnel positions in the organizational structure and their time phasing,
even if they are proposing no need to transition from a different contractor or are
proposing a shorter than 90 day transition period. The Phase-In Transition Plan
meets the requirements in PWS paragraphs 3.1 and 3.2.
Id. at 1257. Based on these three statements, at least one transition requirement is clear—that for
each incumbent IAC the transition must take no longer than ninety days.
Turning to the PWS, there is a rather lengthy description of the transition requirement.
The most relevant excerpts are reproduced here. First, in PWS 3.1, “Phase-In—Introduction and
Overview,” the following guidance is given:
For Phase-In, the contractor performing at the start of this contract is
referred to as the “successor Contractor” and the contractors performing the BCO
functions on contracts FA8075-14-D-0001 (DSIAC), FA8075-18-D-0029
(HDIAC), and FA8075-17-D-0001 (CSIAC) are referred to as the “incumbent
contractors”.
The successor contractor shall perform phase-in/transition activities to
transition to full performance of this PWS, taking over the BCO functions of the
incumbent DSIAC, HDIAC, and CSIAC contractors. The period of performance
for the contractor’s phase-in of each legacy contract shall not exceed 90 days.
The legacy BCO contracts’ transition phase-in will be staggered within a year.
....
It is anticipated that the start dates of the DSIAC BCO transition period
will coincide with the award date of this contract. This 90 day transitioning
period will commence upon the Government’s issuance of the first transition task
orders for the first legacy contract to transition. The Government reserves the
right to revise the dates of transition by contract modification.
Phase-In activities will be performed by the contractor in accordance with
the specific requirements of subsection 3.2 below, where the BCO contractor for
this contract shall perform the role of “successor contractor” and the prior DSIAC
contractor for contract FA8075-14-D-0001, HDIAC contractor for contract
FA8075-18-D-0029, and CSIAC contractor for contract FA8075-17-D-0001 will
perform the role of “incumbent contractor” as those terms are used in this PWS.
The Government will order and obligate funding for the transition-in services to
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be performed by the contractor. The period of performance for the contractor’s
phase-in for each legacy contract shall not exceed 90 days. This 90 day period
will commence upon the Government’s issuance of the Task Order obligating
transition-in services funding.
Prior to the end of each legacy BCO contract, that incumbent contractor
will be required to submit a phase-out plan for Contracting Officer approval.
Their plan will include transitioning the BCO IAC subject matter experts list and
other relevant resources (similar to the start of the transition-in period, the
Government will also issue a Phase-Out Transition Task Order to each legacy
BCO contractor that will order and obligate funding for their transition-out
activities under their contract). Each legacy BCO contractor will then work with
the successor BCO contractor to synchronize the respective transition plans and
activities of each. These communications shall build upon and provide further
detail on the specific transition roles and transition requirements in the BCO
contract included herein and the incumbent’s phase-out/transition-out plan.
The contractor’s approved Phase-In/Transition Plan, as stated in its
proposal (or as modified based on negotiation with the Contracting Officer, if
discussions are conducted before contract award) shall be made an attachment to
the contract at time of award and/or will be referenced in the Task Order covering
phase-in/transition. These services will be procured under the Phase-In/Transition
CLIN in the contract. The contractor shall report on its phase-in progress in
accordance with the Phase/In Transition Plan . . . .
Id. at 1198-99. The Agency provided further guidance in PWS 3.2, titled “Phase-In—Specific
Requirements”:
This section applies to the BCO contractor as “successor contractor”. All
services required under this subsection will be ordered and funded through
issuance of one (1) or more Phase-In Task Orders, citing this PWS subsection, the
applicable contract phase-in contract line item (CLIN)(s), and incorporating the
successor contractor’s accepted Transition Plan as an attachment to the Phase-In
Task Order(s) that will serve as the Government’s requirements document for the
Task Order(s). It is anticipated that the Phase-In Task Order(s) will be issued
within the first 90 days of BCO contract award. The successor contractor shall
work with each incumbent contractor on the legacy CSIAC, DSIAC, and HDIAC
BCO contracts to ensure seamless transfer of the functions for the full
responsibility of the BCO requirement. Deliver weekly status reports, until the
phase-in has been completed. These reports shall provide detailed information on
the transition status and highlight any problems that occur during this timeframe
....
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Within 90 days of contract award, the BCO contractor shall receive
government provided training about evaluating, processing, and uploading STI
....
Id. at 1199. Again, it is clear that the transition from each incumbent IAC contract must occur
within ninety days of the contract award date or other triggering event in the staggered transition
schedule, and that there will be responsibilities for both the successor contractor and the
incumbent contractor during these ninety-day periods.
Putting these various RFP provisions together, the transition activities encompassed in
CLINs 0001-0003 would include efforts to “mobilize, train, and otherwise prepare to assume
complete responsibility for the BCOs.” Id. at 1279. Further, an offeror’s transition plan would
be evaluated to determine if that plan “execute[s] a sound and feasible transition for all three
legacy BCOs that ensures seamless uninterrupted service delivery within 90 days from the first
date of phase-in performance, starting with the day of award.” Id. at 1257. And the allocated
costs in CLINs 0001-0003 would include “amounts for the efforts required in the assumption of
full responsibility of the DSIAC, HDIAC, and CSIAC BCO requirements.” Id. at 1281.
Unfortunately for QSI’s chances of success in this protest, however, there is no clear instruction
in the RFP that CLINs 0001-0003 must also include an amount of nontransition-related contract
performance costs during the ninety-day transition periods.
QSI relies principally on the following excerpted sentence from RFP L5.2: “If an Offeror
proposes no need to transition from another contractor or a shorter than 90 day transition period,
the Offeror shall still price out all CLINs based on their proposed cost to perform the initial 90
days of services after contract award.” Id. at 1281. According to QSI, this directive shows the
“Government’s intention to have all offerors, incumbents and non-incumbents, propose full
90-day Phase In periods, including costs to perform [IAC services], regardless of whether an
actual transition was required . . . .” QSI’s Mot. 18. Although such an intent is perhaps
plausible, in light of these RFP terms, QSI’s contention does not rise above the level of
speculation.
The court finds no clear statement in Section L, Section M, or the PWS of the RFP that
mandates that an offeror’s transition CLINs include not only the costs of preparing to perform
but also the costs of actually performing IAC services. Indeed, the majority of the verbiage in
the RFP addressing an offeror’s transition plan and costs focuses instead on mobilizing and
gearing up to perform, rather than performing, IAC services.
Answers to three offeror questions show that the Agency refused to firmly delineate the
scope of the activities that should be allocated to CLINs 0001-0003, and instead permitted an
offeror to choose its own approach to proposing costs for the transition periods. The first
question sought clarity on precisely this point:
Q: In paragraph L5.2, does the phrase “price out all CLINS” refer to CLINs
(0001, 0002, 0003) or to CLINs (0001, 0002, 0003, and 0004)? “If an Offeror
proposes no need to transition from another contractor or a shorter than 90 day
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transition period, the Offeror shall still price out all CLINs based on their
proposed cost to perform the initial 90 days of services after the contract award.”
A: L5.2 refers to Phase-In Transition CLINS for the efforts required in the
assumption of full responsibility of the DSIAC, HDIAC, and CSIAC BCO
requirements (CLIN 0001 (DS), CLIN 0002 (HD), CLIN 0003 (CS)).
Id. at 1263. No guidance was given as to the “price out all CLINs” phrase in Section L, id. at
1281, but the Agency reiterated, as it had elsewhere in the RFP, that CLINs 0001-0003 addressed
“the efforts required in the assumption of full responsibility of the DSIAC, HDIAC, and CSIAC
BCO requirements,” id. at 1263. This answer neither confirms QSI’s view of the transition
period requirement nor refines the guidance in the RFP as to the appropriate allocation of costs to
CLINs 0001-0003.
The second question also sought clarity regarding the cost allocation to CLINs
0001-0004:
Q: Since the Transition CLINs ((0001 (DS[IAC]), 0002 (HD[IAC]), 0003
(CS[IAC])) and the Operation CLIN (0004) overlap, do the instructions mean that
only costs associated with transition (e.g., cost associated with mobilizing,
training, and otherwise preparing to assume complete responsibility of an IAC)
are to be priced in a transition CLIN and that any costs associated with IAC
operations that are assumed or ongoing during the 90-day transition period are to
be priced to the Basic Center Operations (BCO) CLIN (0004)?
A: The transition CLINS refer to the 90 day transition-in period for DS[IAC],
CS[IAC], and HD[IAC] to include the costs associated with transition and
ramping up services to full operational capability. Please see Section F,
Deliveries Performance.
Id. at 1264. Here again, the Agency did not fix a firm boundary between the costs that should be
allocated to CLINs 0001-0003 and CLIN 0004, as requested, but restated the guidance that
CLINs 0001-0003 “include the costs associated with transition and ramping up services to full
operational capability.” Id. This answer, too, provides no confirmation of any Agency intention
that contract performance costs of IAC services during the ninety-day transition period should be
included in CLINs 0001-0003 of the successor contract.
Finally, the Agency once more resisted an attempt to firmly establish a boundary between
the costs of preparation for IAC contract performance as contrasted with IAC contract
performance costs during the transition periods. The third question offered a rewrite of RFP
L5.2:
Q: Is this an accurate interpretation of paragraph L5.2? “Phase-In Transition
(CLIN 0001 (DS[IAC]), CLIN 0002 (HD[IAC]), CLIN 0003 (CS[IAC])). The
Offeror shall propose Cost Plus Fixed-Fee (CPFF) amounts for the efforts
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required in the assumption of full responsibility of the DSIAC, HDIAC, and
CSIAC BCO requirements. If an Offeror proposes no need to transition from
another contractor or a shorter than 90 day transition period, the Offeror shall still
price out all transition CLINs (0001, 0002, 0003) based on their proposed cost to
perform the initial 90 days of transition services after contract award. The
Offeror shall price all BCO services (non-transition services) assumed or
on-going during the initial 90 day period to the BCO CLIN (0004). The
offeror’s approach to providing services during the initial 90 day period shall be
addressed in Technical Capability Volume II.”
Id. (bold text indicates the offeror’s additions to RFP L5.2, underlined text indicates the offeror’s
suggested deletion from RFP L5.2). The Agency did not rewrite the provision, however, and
instead provided this answer:
A: As indicated in Section L5.2, the Offeror shall still price out all CLINs
based on their proposed cost to perform the initial 90 days of services after
contract award. It is a business decision to be made by the offeror as to how they
will fulfill the 90 day transition period requirement.
Id.
Reading the RFP as a whole, as the court must, it is clear that the Agency refused to
firmly define the scope of costs that could be included in CLINs 0001-0003, and gave guidance
that these transition CLINs were focused on the costs of preparing to perform, not performance
of, IAC services. QSI’s interpretation of the RFP is not reasonable. SURVICE chose not to
include performance of IAC services in its transition CLINs, and it was not required to do so by
the RFP. The Agency’s acceptable rating for SURVICE’s technical capability subfactor 1
therefore does not violate the terms of the RFP. Because this protest ground is founded on the
alleged violation of an RFP requirement that is nowhere stated in the RFP, it cannot be sustained.
2. Even if the RFP Could Be Considered to Be Ambiguous, Any Ambiguity Was Patent
Under binding precedent, this court cannot entertain a protest founded on the protestor’s
interpretation of a patent ambiguity in an RFP that the protestor should have protested before
submitting its proposal. See Stratos Mobile Networks USA, LLC v. United States, 213 F.3d
1375, 1381 (Fed. Cir. 2000) (observing that when an RFP includes a patent ambiguity, a
potential offeror has “a duty to seek clarification from the government, and its failure to do so
precludes acceptance of its interpretation” (quoting Statistica, Inc. v. Christopher, 102 F.3d 1577,
1582 (Fed. Cir. 1996))), quoted in Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313
(Fed. Cir. 2007). An ambiguity in an RFP is generally patent if offerors seek clarification of the
ambiguous provision prior to submitting their proposals. See Per Aarsleff A/S v. United States,
829 F.3d 1303, 1312-13 (Fed. Cir. 2016) (“[T]he ambiguity in the solicitation was patent, as
reflected in the questions received by the Air Force and the two plausible interpretations
indicated above. Following clarification during the question and answer period, the ambiguity
was removed, and so there was at that time neither a patent nor a latent ambiguity.”). Assuming
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that the RFP here contained some ambiguity regarding transition plans and costs, which is not
how the court reads the RFP, see supra Section II.B.1, the ambiguity was patent because it was
repeatedly questioned by potential offerors, as explained below.
First, the Agency released a draft RFP for comment on September 4, 2019. AR 184-443.
Many of the terms in the draft RFP relevant to an offeror’s transition plan and costs were either
similar, or identical, to the same terms in the RFP issued on November 12, 2019. Both
SURVICE and QSI expressed concern that it was not clear how they should allocate costs to the
transition CLINs. Id. at 476 (comment 1), 480 (comment 44), 484 (comment 10). In other
words, they responded to the transition-related requirements set forth in the draft RFP and sought
further clarity on the topic, reflecting that they found the terms of the draft RFP unclear.
Second, potential offerors responded to the RFP with three questions that sought further
clarity regarding the transition plan requirement and, specifically, the costs that should be
allocated to CLINs 0001-0003. See supra Section II.B.1. That such questions were asked
shows, again, that the RFP’s ambiguity regarding the transition requirement, if any, was patent.
Although QSI contends that any ambiguity in the RFP as to transition costs was not
apparent at the time of proposal submission, see QSI’s Reply 7 (“To the extent there is any
ambiguity in the terms of the RFP, that ambiguity didn’t arise until the GAO protest.”); id. at 10
(stating that the Agency’s interpretation of the transition requirement in the RFP was “not
apparent prior to submission of proposals”), that assertion is not supported by the record of this
procurement, see AR 476, 480, 484, 1263-64. If the RFP was ambiguous as to transition
requirements, any such ambiguity was patent.
Rather than lodging a protest of the transition provisions of the RFP, QSI submitted a
proposal that expressed an assumption regarding transition requirements that the Agency had
never confirmed. See id. at 1938 (QSI proposal) (“The RFP requires that operating costs be bid
for any time within the first 90 days after transition is complete.”), 1939 (QSI proposal) (“It
should be noted that comparing our fully operational costs within the first 30 days of the contract
to other offerors’ transition costs for the entire transition period is not an equitable analysis.”).
Because any ambiguity in the RFP as to transition plans and costs was patent, QSI could not wait
until after award to assert its interpretation of the transition requirement. See Stratos Mobile
Networks USA, LLC, 213 F.3d at 1381 (stating that the protestor’s interpretation of an
ambiguous solicitation term could not be accepted because “[a] patent ambiguity . . . would place
a reasonable contractor on notice and prompt the contractor to rectify the inconsistency by
inquiring of the appropriate parties”). As a result, to the extent that QSI’s protest is founded on
its interpretation of a patently ambiguous RFP term, such a challenge is barred by the patent
ambiguity rule stated in Stratos Mobile Networks USA, LLC. 3
3
As QSI notes, the waiver rule relied upon by defendant, see Blue & Gold Fleet, L.P.,
492 F.3d at 1313 (“[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.”), specifically applies to patent defects or errors336 in a solicitation, and United
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3. A Mathematical Error in the Agency’s Evaluation Does Not Invalidate the Award
Turning now to the other concern raised by QSI, the court considers whether a
mathematical error in one portion of the IGCE rendered the Agency’s award decision irrational
and whether the error was prejudicial to QSI.
In preparing the IGCE, the Agency estimated the transition costs for the three incumbent
IAC contracts, entered these values, separately, in spreadsheet cells for each of the transitions,
and included these amounts in the total IGCE of $98,292,531. AR 1-4. For the DSIAC
transition, which was designated in other parts of the RFP as CLIN 0001, the estimate was
$240,988; for the HDIAC transition, linked to CLIN 0002 in the RFP, the estimate was
$245,808; and for the CSIAC transition, linked to CLIN 0003 in the RFP, the estimate was also
$245,808. Id. at 2. In a column designated “TRANSITION,” the Agency also allocated some
“shared services,” perhaps allocable to all three transition CLINs, in the amount of $62,805. Id.
Then, at the bottom of the TRANSITION column, the Agency combined the DSIAC transition
costs of $240,988 with the shared transition costs of $62,805 to arrive at a total figure of
$303,803. Id.
It is this figure of $303,803 that is consistently represented in the Agency’s record of this
procurement as the IGCE for the transition costs of the IAC BCO ID/IQ contract. See id. at 2,
3332, 3341-42, 3378-79, 3407-08, 3476, 3486. As QSI points out, however, this figure ignores
the IGCE costs allocated to the HDIAC and CSIAC transitions, which were originally estimated
to be $245,808 each, for a total of $491,616 in transition costs that are not represented in the
$303,803 figure. There can be no doubt that the IGCE total transition costs figure should have
been, by the Agency’s own data and logic, closer to $795,419 than to $303,803. 4
The overall IGCE figure $98,292,531 is not contested. Indeed, the spreadsheet indicates
that the costs for the HDIAC and CSIAC transitions were included in the total IGCE figure. Id.
States Court of Appeals for the Federal Circuit’s analysis in that decision only references the
doctrine of patent ambiguity as support for the waiver rule. The effect of a patent ambiguity in a
solicitation is exactly the same, however, in that the protestor, after having submitted its
proposal, loses, or waives, its right to rely on its interpretation of the patently ambiguous term as
a ground for overturning a contract award. See, e.g., Grumman Data Sys. Corp. v. Dalton, 88
F.3d 990, 998 (Fed. Cir. 1996) (“Grumman did not seek clarification of the patently ambiguous
provision or the patently ambiguous answer [provided by the agency]. This failure prohibits
Grumman from now arguing that its interpretation of the provision is the correct
interpretation.”); Tetra Tech AMT v. United States, 128 Fed. Cl. 169, 181 (2016) (“[W]here the
ambiguity is a patent one, the opportunity to challenge it is waived if the offeror fails to seek
clarification from the government prior to the award.”).
4
At the GAO, the Agency contended that a more accurate total would have been $4810
less than $795,419, due to a misplaced year of performance for CLIN 0002, which would reduce
this figure to $790,609. AR 5592.
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at 1-2. And, throughout the proposal evaluation and award decision process, the Agency
continued to use the $98,292,531 figure from its IGCE spreadsheet. Id. at 3332, 3341-42, 3379,
3476, 3508.
The AR shows that SURVICE allocated $34,094 to CLIN 0001, $113,246 to CLIN 0002,
and $119,110 to CLIN 0003, for a total transition cost of $266,450. Id. at 2827, 3379. The
Agency compared this figure to the incorrect IGCE transition figure, $303,803, rather than the
more accurate figure of $795,419. Id. at 3379. QSI’s transition cost figure of $1,154,231, which
included IAC operational costs, was also compared to the erroneous IGCE figure of $303,803.
Id. In QSI’s view, the award to SURVICE cannot stand because the “Agency failed to perform
the required cost [realism] analysis for each CLIN.” QSI’s Mot. 31. The court cannot agree.
The Agency did not violate the RFP in its cost/price analysis. The cost realism analysis
required by the RFP was neither tied to specific elements of the IGCE nor defined as a
CLIN-by-CLIN analysis. AR 1259. The IGCE was used for a price analysis of the “Offeror’s
prices,” which does not constrain the Agency in the way QSI argues here. Id. The cost realism
analysis, itself, addressed a group of eleven CLINs, and there is no mention in the RFP of a
transition-specific cost realism analysis. Id. Instead, any cost realism analysis was required to
examine specific cost elements of the offerors’ proposals. Id. As defendant notes, specific cost
elements such as levels of staffing and labor rates were examined as part of the Agency’s cost
analysis of both SURVICE’s and QSI’s proposals. Def.’s Mot. 21 n.2 (citing AR 3408-09,
3517); Def.’s Reply 10-11 (same). QSI asks the court to hold the Agency’s cost analysis to a
higher standard than that required by the RFP, which the court must not do. Ala. Aircraft Indus.,
Inc.-Birmingham v. United States, 586 F.3d 1372, 1375-76 (Fed. Cir. 2009).
QSI also contends that the Agency’s cost/price analysis of SURVICE’s transition CLINs
violated provisions of the Federal Acquisition Regulation (“FAR”) requiring adequate award
decision documentation, FAR 15.308, and effective cost realism analyses, FAR 15.404-1. The
court has reviewed the relevant portions of the evaluation of SURVICE’s proposal and cannot
conclude that either FAR 15.308 or FAR 15.404-1 was violated. The documentation of the cost
and price analyses conducted by the Agency in this procurement contains the level of detail
needed under the circumstances. As for the Agency’s cost realism analysis, it met the
requirements of the RFP and QSI has not shown how FAR 15.404-1 imposes stricter
requirements that were not met here. QSI has not met its burden to show that the Agency
violated the FAR in its award to SURVICE.
Indeed, in the context of the IAC BCO ID/IQ procurement, the mathematical error in the
IGCE was a minor error. The transition CLINs constituted less than one percent of the total
contract costs in the IGCE, even when the $795,419 figure is used. Further, as both SURVICE
and defendant note, the transition costs of an incumbent IAC contractor such as SURVICE
would almost certainly be less than those of nonincumbent offerors, which mitigates the
difference between SURVICE’s proposed transition costs and the transition costs estimated in
the IGCE. Whether SURVICE’s costs are compared to $303,803, the erroneous IGCE figure, or
$795,419, the more accurate IGCE figure, it is reasonable to describe SURVICE’s transition
costs as acceptable.
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In other words, the fact that SURVICE’s figure for its transition was approximately
one-third of the transition costs estimated in the IGCE does not impair the rationality of the
Agency’s cost/price analysis or its award decision. Both QSI and SURVICE submitted
proposals that were very close in total price, and the IGCE, too, was very much in line with the
total price submitted by SURVICE. The decision to accept both offerors’ transition plans and
costs as acceptable, as reflected in the record of this procurement, appears to the court to be a
fundamentally rational decision.
Lastly, QSI has not shown that it was prejudiced by the flaw in the transition costs figure
used by the Agency. The same flawed figure was compared to each offeror’s transition costs.
The Agency did not state that it had any preference for the transition costs of SURVICE, or for
those of QSI, and each offeror was rated exactly the same on its transition plan. AR 3340, 3425,
3501, 3504. Absent “disparate treatment or particularized harm,” there is no prejudicial error for
the court to remedy. Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1380 (Fed. Cir.
2009). The court concludes that there was no prejudice to QSI from the Agency’s mathematical
error and that QSI is not entitled to judgment on its motion.
III. CONCLUSION
The court has considered all of the parties’ arguments. To the extent not discussed
herein, they are unpersuasive, without merit, or unnecessary for resolving the issues currently
before the court.
QSI’s construction of the RFP is not supported by that document, and the alleged
violations of the RFP in SURVICE’s proposal, and in the Agency’s evaluation of SURVICE’s
proposal, are not grounded in the RFP’s terms. In the alternative, if the RFP’s requirement
regarding transition plans and costs could be considered to be ambiguous, any ambiguity was
patent and QSI was obliged to protest the ambiguous term before submitting its proposal.
Further, the Agency’s cost/price analysis was not irrational or contrary to the requirements in the
RFP or the FAR and the mathematical error in the IGCE did not prejudice QSI. Finally, because
QSI has not succeeded on the merits of its protest, the court need not discuss the factors that
permit this court to award injunctive relief to a protestor. See Dell Fed. Sys., L.P. v. United
States, 906 F.3d 982, 999 (Fed. Cir. 2018) (stating that “proving success on the merits is a
necessary element for a permanent injunction”).
For these reasons, the court DENIES defendant’s motion to dismiss as moot, DENIES
QSI’s motion for judgment on the administrative record, and GRANTS SURVICE’s and
defendant’s cross-motions for judgment on the administrative record. The clerk is directed to
enter judgment accordingly and dismiss the case. No costs.
The court has filed this ruling under seal. The parties shall confer to determine agreed-to
proposed redactions. Then, by no later than Wednesday, February 17, 2021, the parties shall
file a joint status report indicating their agreement with the proposed redactions, attaching a
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copy of those pages of the court’s ruling containing proposed redactions, with all proposed
redactions clearly indicated.
Further, the court reminds the parties of their obligation under paragraph 12 of the
protective order filed on September 29, 2020, to file redacted versions of protected documents
for the public record. If the parties have not already filed redacted versions of their motions and
supporting briefs, they shall file a joint status report by no later than Wednesday, February 17,
2021, explaining the reason for the delay.
IT IS SO ORDERED.
s/ Margaret M. Sweeney
MARGARET M. SWEENEY
Senior Judge
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