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Fcn, Inc. v. United States, 15-833 (2015)

Court: United States Court of Federal Claims Number: 15-833 Visitors: 1
Filed: Nov. 06, 2015
Latest Update: Mar. 02, 2020
Summary: In the United States Court of Federal Claims No. 15-833C (Originally Filed October 29, 2015) (Re-Filed November 6, 2015)1 ************************ FCN, INC., Bid Protest; Pre- Award; Judgment on Plaintiff, Administrative Record; Best Value Tradeoff; v. Competitive Range; FAR 15.402(a); FAR THE UNITED STATES, 15.306(c) Defendant. ************************ William T. Welch, Reston, VA, for plaintiff. Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Dep
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      In the United States Court of Federal Claims
                               No. 15-833C
                    (Originally Filed October 29, 2015)
                      (Re-Filed November 6, 2015)1

************************

FCN, INC.,                                      Bid Protest; Pre-
                                                Award; Judgment on
                           Plaintiff,           Administrative Record;
                                                Best Value Tradeoff;
v.                                              Competitive Range;
                                                FAR 15.402(a); FAR
THE UNITED STATES,                              15.306(c)

                           Defendant.

************************
    William T. Welch, Reston, VA, for plaintiff.

       Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, DC, with
whom were Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Robert E. Kirschman, Jr., Director, and Deborah A. Bynum, Assistant
Director, for defendant. MAJ Jamal A. Rhinehardt, of counsel, for defendant.

                            _______________

                               OPINION
                            _______________


BRUGGINK, Judge.

      This is a pre-award protest of a solicitation for commercial information


1
  This opinion was originally filed under seal. The parties were directed to
confer and propose redactions. The court adopted the parties’ suggested
redactions, removed the information, and inserted brackets to replace the
redacted content. The opinion is now prepared for release.
technology (“IT”) hardware for client, server, storage, and network
environments, along with related incidental services, referred to as the
Information Technology Enterprise Solutions-3 Hardware procurement
(“ITES-3H”). Plaintiff, FCN, Inc. (“FCN”) challenges the decision of the
United States Department of the Army, Army Contracting Command-Rock
Island (“the Army” or “the Agency”) not to include FCN in the competitive
range for the procurement. Currently before the court are the parties’
cross-motions for judgment on the administrative record (“AR”) pursuant to
Rule 52.1 of the Rules of the Court of Federal Claims (“RCFC”). The motions
are fully briefed, and we heard oral argument on October 27, 2015. For the
reasons explained below, we deny plaintiff's motion for judgment on the
administrative record, and we grant defendant’s cross-motion for judgment on
the administrative record.

                              BACKGROUND

I. The ITES-3H Solicitation

        The Army issued the Request for Proposal (“RFP”) for the IT services
on September 25, 2011. The solicitation will result in the award of multiple
Fixed Price Indefinite Delivery/Indefinite Quantity (“IDIQ”) contracts, with
a maximum amount of orders placed under each contract not to exceed
$5,000,000,000 over a five year period. The RFP provides that proposals will
be evaluated in a two-phase evaluation process. AR 3. Phase I, under which
proposals were submitted on or before October 22, 2012, involved the
evaluation of the offerors’ proposed equipment list and web-based support
capabilities/data, and was evaluated on an Acceptable/Unacceptable basis. AR
3, 126. Only offerors receiving an “Acceptable” under Phase I were allowed
to participate in Phase II. AR 126.

       Phase II establishes a competitive range after evaluation of the
proposals advancing beyond Phase I. The Phase II evaluation is based on
consideration of three factors: (1) Mission Support, which is divided into
subfactors of Management, Technology, and Small Business Participation; (2)
Past Performance; and (3) Price. AR 127. Phase II, the subject of this bid
protest, is evaluated using a “Best Value Tradeoff” process. AR 138. This type
of evaluation allows the Agency to award the contract to an offeror other than
the lowest price offeror or highest technically rated offeror. AR 450. When
considering the relative weight of the factors, mission support is more
important than past performance, and past performance is more important than

                                      2
price. AR 175. As part of the evaluation, the Army identified strengths,
deficiencies, weaknesses, significant weaknesses, and uncertainties for each
proposal. AR 128-29. Any offeror receiving a “deficiency” in any factor is
ineligible for a contract award. AR 138.

       The management subfactor evaluates the offeror’s proposed
management of the contract, timely delivery of reliable products, equipment
warranty, and customer support. AR 131. The offeror is also required to
identify its teaming partners and the commercial quality certifications or
process it proposes to use to meet contract requirements. 
Id. The technology
subfactor requires the offeror to show how it will
develop and maintain a list of compliant products and how it will maintain
“thin client”2 user configurations. AR 132. The small business participation
subfactor requires offerors to identify the extent to which various small
businesses would participate in the contract as well as the offerors’ past small
business participation. 
Id. Between the
three subfactors, management is more important than
technology, and technology is more important than small business
participation. AR 2006. As a whole, mission support would be rated by the
following standards:

       Outstanding: Proposal meets requirements and indicates an
       exceptional approach and understanding of the requirements.
       Strengths far outweigh any weaknesses. Risk of unsuccessful
       performance is low.

       Good: Proposal meets requirements and indicates a thorough
       approach and understanding of the requirements. Proposal
       contains strengths which outweigh any weaknesses. Risk of
       unsuccessful performance is very low.

       Acceptable: Proposal meets requirements and indicates an
       adequate approach and understanding of the requirements.
       Strengths and weaknesses are offsetting or will have little or no

2
  We presume the agency was not concerned with how much users weigh, as
the record contains no clues as to the meaning of this term. Offerors were
apparently not confused.

                                       3
       impact on contract performance. Risk of unsuccessful
       performance is no worse than moderate.

       Marginal: Proposal does not clearly meet requirements and has
       not demonstrated an adequate approach and understanding of
       the requirements. The proposal has one or more weaknesses
       which are not offset by strengths. Risk of unsuccessful
       performance is high.

       Unacceptable: Proposal does not meet requirements and
       contains one or more deficiencies. Proposal is not awardable.

AR 211. The RFP warned offerors that any offeror given a rating of lower than
“acceptable” for the mission support factor and all of its subfactors during
Phase II would ineligible for the contract award. AR 138.

        The past performance factor assesses the degree of confidence the
Government has that an offeror will successfully perform the solicitation
requirements based on the offeror’s record of recent and relevant contract
performance. AR 133. Offerors were required to submit, with their initial
proposal, a list of recent and relevant contracts, each with a minimum dollar
amount of $5,000,000 for equipment and related incidental services. 
Id. Recent contracts
are defined as prime contracts, delivery orders, or subcontracts where
the services were performed within three years of the issuance of the RFP. 
Id. Relevant contracts
are those in which contract performance demonstrates that
the offeror has successfully performed or is currently performing on contracts
or delivery orders that encompass equipment or incidental services that are the
same or similar to the requirements of the current solicitation. 
Id. The solicitation
rated the relevance of the past performance contracts in the
following manner:

       Very Relevant: Present/past performance effort involved
       essentially the same scope and magnitude of effort and
       complexities this solicitation requires.

       Relevant: Present/past performance effort involved similar
       scope and magnitude of effort and complexities this solicitation
       required.

       Somewhat Relevant: Present/past performance effort involved

                                       4
      some of the scope and magnitude of effort and complexities this
      solicitation required.

      Not Relevant: Present/past performance effort involved little or
      none of the scope and magnitude of effort and complexities this
      solicitation requires.

AR 212. The offerors’ past performance was rated as follows:

      Substantial Confidence: Based on the offerors recent/relevant
      performance record, the Government has a high expectation that
      the offeror will substantially perform the required effort

      Satisfactory Confidence: Based on the offerors recent/relevant
      performance record, the Government has a reasonable
      expectation that the offerror will substantially perform the
      required effort

      Limited Confidence: Based on the offerors recent/relevant
      performance, the Government has a low expectation that the
      offeror will successfully perform the required effort

      No Confidence: Based on the offerors recent/relevant
      performance, the Government has no expectation that the
      offeror will successfully perform the required effort

      Unknown Confidence (Neutral): No recent/relevant
      performance record is available or the offerors performance
      record is so sparse that no meaningful confident assessment
      rating can be reasonably assigned.

Id. The price
factor is not objectively scored. Rather, the Contracting
Officer is tasked with determining the reasonableness of the price, in
compliance with the Federal Acquisition Regulations. See AR 143; 48 C.F.R.
§ 15.402(a) (2014).

II. Evaluation of FCN’s Proposal


                                     5
       Evaluations of the Phase II proposals were initially prepared at the end
of March 2014 by the Source Selection Evaluation Board (“SSEB”). They
were reviewed by the SSEB Chair, Contracting Officer, legal advisor, and the
Source Selection Advisory Council (“SSAC”), and ultimately finalized on June
4, 2014. AR 7, 448.

       FCN was given an overall rating of [ ] for the mission support factor.
AR 681. Within this factor, FCN’s proposal was rated [            ] for the
management subfactor. 
Id. [ ],
relating to [ ]. AR 683. [ ] were identified.
AR 683-84. For the technology subfactor, FCN was given an [ ] rating. AR
681. [ ] were identified. AR 685. Lastly, FCN was given a rating of [ ] for
the small business participation subfactor. AR 681. [ ], were identified in
connection with this subfactor. However, these [ ] were outweighed by
FCN’s [ ]. AR 687.

        FCN submitted five contract references in response to the past
participation factor. All five were evaluated as [ ]. AR 691-94. FCN also
stated that it had [ ]. AR 697. Overall, the SSEB gave FCN a rating of [ ]
for the past participation factor. AR 696. The SSEB identified [ ] relating
to this factor, but did [ ], FCN’s [ ]. 
Id. FCN’s proposed
price was [ ], which was the [        ] price of the [   ]
offerors who included price in their proposals.

       The Source Selection Authority (“SSA”), Melanie Johnson, issued the
competitive range determination on July 11, 2014. AR 833-87. In making her
determination, she reviewed the SSAC’s evaluation, and then made her own
independent findings, after which determined the competitive range, which she
limited to offerors who received at least a “good” rating under the mission
support factor and at least “satisfactory confidence” under the past
performance factor. AR 884. Once that group of offerors was identified, she
further limited the competitive range to the [ ] offerors among them. AR 884.
FCN, despite its low price, was not considered for the competitive range
because its mission support rating was only [ ]. AR 886.3

       The Army notified FCN that it was not included in the competitive
range, and provided it with a debriefing. Following the debriefing, FCN filed

3
 Each offeror was assigned a three digit code during the evaluation process.
FCN’s code is [ ].

                                      6
a protest with the Government Accountability Office (“GAO”) on August 11,
2014. AR 20-26. FCN alleged that the agency’s conclusion that FCN failed to
meet the mission support and past performance requirements was incorrect,
arbitrary, and an abuse of discretion. 
Id. FCN also
contended that the [ ]
identified with regard to its past performance rating were incorrect. 
Id. On October
31, 2014, the GAO issued a decision denying FCN’s protest. AR
1157-59.

       Four other offerors Dell, HP, Dynamic Systems, Inc., and Telos
Corp. also separately protested at the GAO, alleging that they had been
improperly excluded from the competitive range. The Army responded with
corrective action allowing those offerors into the competitive range without
further evaluation of their proposals. FCN, however, was not brought into the
competitive range. FCN thereafter filed its first complaint in this court on
December 5, 2014, protesting its exclusion.

       After oral argument, the parties agreed to suspend the protest pending
corrective action by the government. Counsel for defendant reported that it
would take corrective action by re-scoring and re-evaluating FCN, along with
Dell, HP, Dynamic Systems, and Telos. FCN therefore moved for voluntary
dismissal, and the court dismissed the case without prejudice on February 25,
2015.

III. The Army’s Re-Evaluation

        The Army’s mission support technical evaluation team (“TET”) re-
evaluated and re-scored the proposals of FCN, Dell, Dynamic Systems, HP,
Telos, and MicroTechnologies, LLC with respect to the mission support
factor.4 It did not re-evaluate the past performance or price factors. During
FCN’s re-evaluation, the TET found [ ] under the management subfactor. AR
2027.5 Its management rating remained [ ], however, as did its ratings for the

4
 We will only discuss the re-evaluations of FCN, Dell, and HP because those
are the only re-evaluations with which plaintiff takes issue in its motion.
5
    The [       ] identified were as follows:

            [    ]

            [    ].

                                                7
technology and small business participation subfactors. 
Id. The re-evaluation
noted that FCN [ ] for the small business participation subfactor. AR 2010-
11. FCN’s overall mission support rating of [ ] remained [ ]. 
Id. During Dell’s
re-evaluation, the TET credited it with [ ] under the
management subfactor. AR 1971-74. The re-evaluation noted that Dell [ ] the
requirements for this subfactor. AR 2006-07. However, its original
management rating of [ ]. AR 1971-74. Its technology and small business
ratings of [ ] also remained [ ]. AR 2006. Overall, Dell’s mission support
rating was [ ] in the management subfactor. AR 1971-74.

       HP was credited with [     ] for the management subfactor, which
prompted the Army to [ ] its subfactor rating from [ ] to [ ]. AR 2008.
HP’s technology subfactor remained [ ] , as did its small business subfactor.
Id. The re-evaluation
noted that HP [     ] the requirements for both the
management and technology subfactors. AR 2009. Overall, its mission support
factor was increased from [ ] to [ ]. 
Id. The SSA
concurred with the changes to the offerors’ re-evaluations. AR
2020-30. This resulted in Dell, HP, Dynamic, and Telos now meeting the
SSA’s original criteria for inclusion in the competitive range a mission
support rating of at least [ ] and a past performance rating of at least [ ].
Rather than accepting only the [ ] offerors out of all of those with a [ ]
mission support rating, she expanded the competitive range to include Dell,
HP, Dynamic, and Telos. 
Id. She noted
that these offerors had [ ] than the [
 ] originally included in the competitive range, but found that they had [ ].
AR 2028. FCN was again left out of the competitive range. 
Id. The SSA
recognized that the biggest appeal of FCN’s proposal was its [ ], but because
price is the least important factor, it was insufficient to give FCN a realistic
chance of award because its proposal was not highly rated. AR 2029. FCN
was notified of the decision on July 8, 2015, and subsequently filed this action.


                                 DISCUSSION

      The Tucker Act, 28 U.S.C. § 1491, gives this court 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




                                       8
proposed award . . . or any alleged violation of statute or regulation in
connection with a procurement or a proposed procurement.” 28 U.S.C. §
1491(b)(1) (2012). FCN is an “interested party” because it is a prospective
bidder whose direct economic interest would be affected by its exclusion from
the competitive range.

        In deciding a motion for judgment on the administrative record, we
decide all issues of fact and law based upon the administrative record
generated at the agency level. See RCFC 52.1. This court will not disrupt an
agency’s decision unless it is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with the law.” 28 U.S.C. § 1491(b)(4); 5 U.S.C.
§ 706 (2012). Accordingly, great deference is given to the agency’s decision.
Banknote Corp. of America, Inc. v. United States, 
56 Fed. Cl. 377
, 380 (2003).
This deference is even more significant when the solicitation, as here, is
evaluated on a best value basis. 
Id. Additionally, the
plaintiff will not prevail
in a bid protest unless it shows that the error in the procurement process was
prejudicial, meaning that but for the error, there is a substantial chance that
plaintiff would have received the award. Medical Dev. Int’l., Inc. v. United
States, 
89 Fed. Cl. 691
, 701 (2009).

       Plaintiff argues that the decision not to include it in the competitive
range was arbitrary and capricious. The thrust of plaintiff’s argument is
directed at what it views as inconsistent treatment of it as compared to Dell
and HP. Plaintiff contends that, on re-evaluation, the Army failed to reasonably
consider the significant advantage of FCN’s price, while giving [ ] to the
technical ratings of Dell and HP. Moreover, plaintiff takes the position that the
Army improperly failed to recognize additional [ ] of its proposal under the
management and technology subfactors. According to plaintiff, these [ ]
would have yielded [        ] for these subfactors, thus allowing FCN to be
included in the competitive range.

        Plaintiff also takes issue with the fact that Dell and HP were given [
] in their ratings on re-evaluation, while the Army failed to correct FCN’s
allegedly flawed technology and past performance ratings. According to
plaintiff, this flawed past performance rating was prejudicial. For its rating, the
Army identified as one of FCN’s [ ] the fact that FCN did not [ ]. Plaintiff,
however, argues that it did submit this information, and it therefore should not
have been assigned a [ ]. Accordingly, plaintiff asks the court to grant a
permanent injunction, arguing that the balance of hardships tips in its favor,
and that absent an injunction, it would be irreparably harmed.

                                        9
        Defendant responds that its evaluation of FCN’s proposal was in
accordance with FAR 15.306(c). Defendant asserts that the Army properly
considered price, but ultimately was within its discretion in concluding that
despite FCN’s low price, it did not have a realistic chance of receiving an
award because it was rated only [ ] on the mission support factor. This is
consistent with the RFP, which states that price is the least important
evaluation factor. Moreover, defendant disputes the strengths that FCN
contends it should have been credited with under the management and
technology subfactors. Defendant also disagrees that plaintiff has made the
showing required to entitle it to a permanent injunction, and contends that
plaintiff failed to demonstrate prejudice from the alleged errors in its past
performance evaluation.

       Given the broad discretion afforded to a contracting officer’s
determination of the competitive range, we conclude that plaintiff has not
established that the Army’s evaluation of FCN’s proposal was unreasonable
or unlawful. See Birch & Davis Int’l, Inc. v. Christopher, 
4 F.3d 970
, 973
(Fed. Cir. 1993). Nor do we see any evidence of inconsistent treatment of
FCN, Dell, and HP.

        With regard to FCN’s price, during both the original Phase II evaluation
and the re-evaluation, the Army did consider all the evaluation factors. It
determined that even the [ ] would not warrant an award to an offeror whose
mission support rating was only [ ]. In fact, in both her original evaluation
and in her re-evaluation, the SSA stated that FCN’s low price was not
sufficient to give it a realistic chance of award due to its mission support
rating. AR 833, 2029. On re-evaluation, she further noted that price was the
least important factor in this procurement, and [ ]. AR 2029. Additionally,
during both evaluations, she explicitly stated that [ ]. AR 833; 2028. These
decisions refute plaintiff’s contention that the Army failed to consider the price
factor and are entirely consistent with the RFP and with the FAR. See 48
C.F.R. § 15.306(c). Where the Army has considered all the evaluation factors
and provided a reasonable explanation for its competitive range determination,
this court will not interfere. Birch & Davis 
Int’l, 4 F.3d at 973
.

        In any event, during re-evaluation, HP and Dell were both given ratings
of [ ] for the mission support factor. FCN, on the other hand, was rated [
]. Plaintiff has no grounds to argue inconsistent treatment where there is a
meaningful difference between its technical ratings and those of Dell and HP.
In her original Phase II evaluation, the SSA noted that she would not add any

                                       10
offerors whose mission support ratings were less than [ ] into the competitive
range. This decision remained consistent during re-evaluation, and thus Dell
and HP were allowed into the competitive range after receiving [ ] mission
support ratings.

        Thus, plaintiff’s real problem is that it received a mission support rating
of [ ]. Plaintiff acknowledges that the agency was within its discretion, when
confronted by a number of proposals with mission support ratings of [ ] or
higher, to limit further competition to those only with ratings of [ ] or higher.
Its argument that it should have been credited with additional strengths under
the management and technology subfactors merely constitutes disagreement
with the Army’s evaluation of its proposal, which is insufficient to establish
that the evaluation was unreasonable or unlawful. The Army provided its
reasoning for why it did not credit FCN with these strengths and ultimately
found that FCN [ ]. AR 1980-81. Consequently, FCN was found to have met,
but not exceed, the requirements for these subfactors. In contrast, the Army
found on re-evaluation that both Dell and HP exceeded the requirements for
the management subfactor, the most important subfactor within mission
support. We therefore have no basis for second-guessing the Army’s
evaluations.6

                                CONCLUSION

        We conclude that the Army’s decision to exclude FCN from the
competitive range was neither unreasonable nor unlawful. We therefore deny
plaintiff’s motion for judgment on the administrative record and grant
defendant’s cross-motion. The Clerk is directed to enter judgment accordingly.
No costs.

                                                    s/ Eric G. Bruggink
                                                    ERIC G. BRUGGINK
                                                    Judge




6
  Nor can we accept plaintiff’s argument that its past performance rating was
flawed, which, in any event, would not have been prejudicial given FCN’s
mission support rating. FCN disagrees with the Army’s finding that in its past
contract references, [ ]. AR 629-643.

                                        11

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