PATRICIA E. CAMPBELL-SMITH, Chief Judge.
This is a post-award bid protest filed by Progressive Industries, Inc. (Progressive or plaintiff) against the United States Department of Veterans Affairs (VA, the agency, or defendant). Compl. ¶ 1, ECF No. 1, Dec. 22, 2014. Progressive challenges the VA's source selection decisions awarding firm-fixed price, indefinite-delivery/indefinite-quantity (IDIQ) contracts for the supply of medical cylinder gases to locations and facilities identified by the VA.
On April 16, 2014, the VA issued its source selection decision, awarding the contracts to two veteran owned small businesses,
Progressive then filed this protest on December 22, 2014.
At oral argument, it became apparent that the significance of the evaluation criteria and evaluation sequence detailed in the Source Selection Plan (SSP) is a critical source of contention between the parties. Following oral argument, the court ordered the parties to file supplemental briefing addressing the legal impact, if any, of the agency's evaluation of the offerors in a manner different from what was set forth in the SSP. The parties filed their briefs, Pl.'s Suppl. Br., ECF No. 117, Def.-Int.'s Suppl. Br., ECF No. 118, and Def.'s Suppl. Br., ECF No. 119.
For the reasons explained below, the court
The contracting officer and designated Source Selection Authority (SSA) for this procurement, Ms. Kimberly Hurt, and the technical evaluation team (TET) chair, Ms. Jodi Cokl, approved the SSP in June 2013. Tab 9, AR 119, 122.
The SSP was marked: "For Official Use Only Source Selection Information."
The SSP contained "the source selection criteria and the evaluation procedures used to submit [a] final award recommendation to the source selection authority (SSA)." Tab 9, AR 122. As set forth in the SSP, each proposal was to be evaluated for the following criteria in the order listed:
As to the relative importance of the evaluation factors, technical capability was deemed more important than past performance and veterans participation.
To aid in evaluating technical capability, the Technical Evaluation Team (TET) "suggested topics for discussions and questions/statements to be presented to offerors in the event discussions [were] to be conducted." Tab 9, AR 125.
As to past performance, the SSP limited the type of relevant experience to be considered to the followoing:
Tab 9, AR 135-36.
As to veterans participation, each offeror was asked to furnish a representation, modeled on those found at FAR 52.212-3 or 52.219-1, as to whether it qualified as a service-disabled small business ("SDVOSB") or a veteran-owned small business ("VOSB"). Tab 9, AR 138.
As to price, the SSP stated that "[a]fter an evaluation of the Technical Capability, Past Performance, and Veteran Business Participation[] has been completed and rankings have been established[,] price will be compared against these rankings to determine the combination most advantageous to the Government." Tab 9, AR 129-30.
The SSP further stated that the evaluation team would "identify deficiencies and/or significant weaknesses in an offeror's quote, and record them on the applicable scoring sheet for a particular evaluation factor." Tab 9, AR. 126. The SSP defined a "deficiency" using the FAR 15.001 definition; which provides that a "[d]eficiency is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level." Tab 9, AR 126. The SPP identified two specific examples of material deficiencies:
Tab 9, AR 126 (emphasis in the original). The SSP also made clear that those participating in the source selection process were to "avoid any discussions with offerors regarding proposals or any related matters to preclude even the appearance of favoritism or any other improper action." Tab 9, AR 123. As the court evaluates Progressive's challenges to the agency's conduct of the procurement, it gives consideration to the SSP, which is identified in RCFC App. C as one of the "relevant core documents" to be included in the administrative record.
On July 23, 2013, the VA issued a Request for Proposal (RFP or Solicitation), numbered as VA 240C-13-R-0054, for the supply of medical cylinder gases to locations and facilities within Veteran's Integrated Service Networks (VISNs) 9-12, 15, 16, and 23. Tab 11, AR 161-230. These VISNs spanned the twenty states that encompass the VA's Service Area Office (SAO) Central Region.
The VA intended to award a firm-fixed price IDIQ contract for a base year and four option years. Tab 11, AR 171, 179. The VA indicated that it would make its source selection without discussions, as contemplated by FAR 52.212-1(g).
The evaluation criteria and their relative importance were outlined in the RFP which mirrored what was set forth in the SSP.
The RFP also provided that "[a]ny offer, modification, revision, or withdrawal of an offer received at the Government office designated in the solicitation after the exact time specified for receipt of offers [would be deemed] `late' and [would] not be considered unless it [was] received before award is made." Tab 11, AR 200. But, the RFP allowed that "a late modification of an otherwise successful offer, that makes its terms more favorable to the Government, [would] be considered at any time it [was] received and [might] be accepted."
As amended, the RFP required the offerors to submit their proposals on CD-ROM, but the offerors could exercise the "OPTION of [also] submitting a printed copy" of their proposals. Tab 12(c), AR 314 (emphasis in the original). Offerors were advised to "include on the CD-ROM all required submittal information as outlined in the solicitation."
Six offerors submitted proposals by the amended closing date of September 27, 2013.
Progressive contends that in contrast to its initial proposal, which "met all of the [submission] requirements of the Solicitation," (Pl.'s Mot. 13), the manner in which Irish submitted its proposal and the pricing information contained in Irish's submission did not comply with the terms of the Solicitation. Pl.'s Resp. to Def. 3-4.
The AR does not address the manner in which the offerors submitted their proposals.
The parties' dispute the legal effect of Irish's paper submission.
As to pricing, Progressive asserts that, unlike the contract awardees [Offeror A] and Irish, it included in its initial proposal pricing information for all of the VISNs listed in the RFP, for both the base year and the four option years. Tab 15, AR 541-712, 724; Tab 21, AR 1177-1180. The AR shows that [Offeror A]'s initial proposal included pricing information solely for VISN 16. Tab 16, AR 962-971. But as to Irish's initial proposal, Progressive insists that it contained no pricing information whatsoever. Pl.'s Resp. to Def. 2-4, 6; Hr'g Tr. 56. Progressive insists that Irish first submitted its pricing information in its revised proposal.
Defendant disagrees. Defendant argues that Irish's "initial [proposal did] include[] pricing for VISNs 12 and 23, but omitted option [year] four pricing." Def.'s Mot. 24 (citing Tab 85, AR 3103-12).
The parties dispute the legal significance of the different pricing information provided by the offerors.
Progressive also challenges, as unfair, the communications that occurred between the VA and Irish prior to the agency's evaluation of the proposals. The AR indicates that Irish's account manager Ms. Cheryl Jacobson e-mailed a note of gratitude to the VA's contract specialist Ms. Nicole Kutsi
Less than four hours later that same day, the contracting specialist sent Irish's account manager another e-mail asking Irish to submit "updated pricing for Option year 4, [as Irish's] current pricing only goes to Option year 3." Tab 86, AR 3113. In a reply e-mail that same afternoon, Ms. Jacobson sent a spreadsheet that included pricing information for option year four.
The next morning, the VA's contracting officer e-mailed Irish's account manager to learn whether Irish's proposal addressed all of the locations within VISNs 12 and 23. Tab 87, AR 3145. The contracting officer attached to her e-mail "the newest schedule of items that [had been] published in one of the solicitation amendments" and asked Irish to respond by noon that same day.
As asked, Irish's account manager timely responded on Irish's behalf with another Excel spreadsheet. Tab 87, AR 3145. She confirmed that Irish's proposal included all of the locations within VISNs 12 and 23, and she noted that she had "populated the pricing columns in the file you sent."
After receiving the information sought from Irish, the agency began the evaluation process.
The TET convened in Minneapolis, Minnesota on the afternoon of November 19, 2013, to evaluate the offerors' proposals. Suppl. Hurt Decl. ¶ 43 (ECF No. 41). Using the Technical Capability Evaluation Sheet included in the SSP, each TET member completed a handwritten evaluation of each offeror's technical capability, past performance, and veterans participation. Tabs 17-19, AR 994-1167; Tab 72, AR 2543-62; Suppl. Hurt Decl. ¶¶ 39, 49 (ECF No. 41). According to Ms. Hurt, "the TET [members] submitted their individual evaluation sheets to the TET Chair, and the TET Chair convened a meeting to reconcile [the] disagreements and varying ratings among the evaluators."
Rather than recommending that the contracting officer eliminate certain offerors before establishing the competitive range, the TET itself eliminated two offerors, [Offeror B] and [Offeror C], from further consideration. Tab 21, AR 1178. The TET reasoned that [Offeror B] and [Offeror C] had failed to submit "[t]he majority of information requested for evaluation in the RFP."
The TET consensus evaluation memorandum's findings are summarized below:
Tab 21, AR 1177-78. Only Irish and [Offeror A] received credit for factor 3, veterans participation.
Also included in the TET consensus evaluation memorandum were the evaluation summaries for the proposal of each offeror that remained within the competitive range. Tab 21, AR 1178-79. In the summary the TET found that "[o]verall, [Irish's] proposal was lacking relevant information."
The summaries for [Offeror A] and Progressive were more favorable than for Irish. The TET found [Offeror A]'s proposal to be a "[v]ery detailed outline of their capabilities, which met or exceeded the statement of work.
After establishing the competitive range, the TET determined that discussions were needed to continue the source selection process. The TET then created discussion topics "based on each offeror's proposal strengths, weaknesses, and deficiencies." Tab 21, AR 1179. Among the identified topics to be discussed with Irish, Progressive, and [Offeror A] were: (1) the offeror's capabilities, to include supplying other VISNs detailed in the Solicitation; (2) the offeror's transition plan; (3) the offeror's contingency plan; (4) the offeror's pricing schedule; (5) the offeror's use of distribution centers and medical suppliers; and (6) the offeror's licensing, insurance, and invoicing flexibility.
On November 21, 2013, the agency held discussions with the remaining offerors. Tabs 23-29, AR 1289-1309. Then, the contracting officer made her competitive range determination and formally eliminated [Offeror B] and [Offeror C] from further consideration. Tab 31, AR 1325.
As is reflected in the following excerpted table from the post-discussion technical evaluation consensus memo, Irish benefited most from the agency's discussions with the offerors.
Tab 30, AR 1310-12. Most notably, Progressive's rating dropped from excellent to fair and Irish's increased from fair to good.
The remaining offerors were asked, by letter, to submit revised proposals by "no later than 3:00 PM [Central Time], on December 19, 2013."
At the request of [Offeror A]'s president, the VA granted an extension of time for the submission of its revised proposal. The contracting specialist enlarged the filing deadline for [Offeror A] only, from 3:00 PM on December 19, 2013 to 10:00 AM, on December 20, 2013. Tab 34, AR 1334; Tab 98, AR 3215-16. [Offeror A]'s president had explained to the VA that his company was "deep into finalizing this proposal and [was] request[ing] . . . [an] extension for our electronic submission." Tab 98, AR 3216. [Offeror A]'s president subsequently acknowledged the VA's extension of time, with a note in the post script of his e-mail response of "Thank you Santa!"
On April 14, 2014, the contracting officer made the initial source selection decision, recommending contract awards to [Offeror A] for VISNs 9, 10, 11, 15, and 16, and contract awards to Irish for VISNs 12 and 23. Tab 45, AR 2024.
Receiving notice that it was an unsuccessful offeror on April 16, 2014 (Tab 47, AR 2027), Progressive filed an agency level protest the next day. Tab 49, AR 2031-2111. The VA agreed to take corrective action. Tab 51, AR 2137. By November 18, 2014, the VA had reevaluated the offerors' proposals and issued a corrective action source selection decision that mirrored the VA's initial source selection decision. Tab 59, AR 2384-85. On reevaluation, the VA again awarded contracts to [Offeror A] and Irish.
Both the source selection decision and corrective action source selection decision state that the offers were evaluated using the same five-step process described in the SSP. Tab 45, AR 2015; Tab 59, AR 2370. But the records reflect differences between the evaluation methods described in the SSP and the evaluation method used to reach the corrective action source selection decision. The first step of the evaluation in both the source selection decision and the corrective action source selection decision was modified to include a determination of "the acceptability of each offer by evaluating the consistency of each Offeror's promises with the [RFP's] terms and conditions."
In its complaint before the court, Progressive protests the VA's original evaluation of the offerors' proposals and the VA's contract awards to Irish and [Offeror A].
On September 25, 2015, Progressive filed a motion for judgment on the AR (Pl.'s Mot.), asserting that both the VA's initial award and corrective action "were irrational, arbitrary, capricious, an abuse of discretion and otherwise in violation of regulations, procedure and other applicable law." Pl.'s Mot. 1-2.
On October 30, 2015, the government and defendant-intervenor filed their respective cross-motions for judgment on the AR and responses to plaintiff's motion for judgment on the AR. The government asserts that plaintiff is not entitled to injunctive relief because the relevant legal factors favor the government. Def.'s Mot. 43-48 (citing
The matter is now ripe for a ruling.
The court has "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) (2012). The court's "bid protest" jurisdiction encompasses the following types of agency actions: "(1) pre-award protests (i.e., objections `to a solicitation by a Federal agency for bids or proposals for a proposed contract' or award); (2) post-award protests (i.e., objections to `the award of a contract'); and (3) any `alleged violation of statute or regulation in connection with a procurement or a proposed procurement.'"
To establish standing under the Tucker Act, a protestor must establish that it qualifies as an "interested party."
A protestor's showing of prejudice differs depending upon the nature of the protest. In a post-award bid protest, a protester demonstrates the requisite prejudice by showing that it would have had a "substantial chance" of receiving the contract award but for the alleged errors in the procurement process. That is, a post-award protestor must show that its "chance of securing the award must not have been insubstantial."
Neither defendant nor defendant-intervenor has challenged plaintiff's standing in this matter. Progressive was an actual bidder and was included in the competitive range for the contract award. The court finds that Progressive has satisfied the substantial chance requirement and has standing to bring this protest.
The Administrative Procedure Act (APA) standard of review applies to the court's examination of an agency's contract award decision. Thus, the court will not set aside an agency decision unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2012). Rule 52.1 permits the court to review an administrative record and to rule on a motion for judgment on that record. RCFC 52.1(c).
"Under the APA standard . . . `a bid award may be set aside if either (1) the procurement official's decision lacked a rational basis; or (2) the procurement procedure involved a violation of regulation or procedure.'"
The Supreme Court has counseled that:
The court's analysis of a "bid protest proceeds in two steps."
An agency is entitled to considerable deference in negotiated "best-value" procurements.
Moreover an agency is afforded broad discretion in various aspects of the procurement process. Thus, "a court will not second guess . . . such matters as technical ratings and the timing of various steps in the procurement, which involve discretionary determinations of procurement officials."
Progressive challenges the agency's substantive evaluation of the proposals and identifies a number of technical errors the VA committed. However in the court's view, more problematic is the VA's: (1) inconsistent treatment of the offerors when it established the competitive range; and (2) grant of an extension of time only to [Offeror A] for the submission of its revised proposal. The record shows that the agency did not treat the offerors equally, and the court finds that the unequal treatment of the offerors prejudiced Progressive. Moreover, the court is unable to discern from the record when and how the agency evaluated the pricing of the offerors' proposals. Although not the most important facto to be considered, the agency was to consider it. Unable to review the agency's price evaluation, the court cannot make a finding that the agency acted rationally.
The court addresses these issues in turn.
Progressive asserts that the VA: (1) conducted an unreasonable evaluation of the submitted proposals, Pl.'s Mot. 25-27, 33-36; (2) engaged in discussions although it had indicated that it would not,
Unsatisfied with the VA's evaluation of the respective offerors' past performance, Progressive points to the disparity between its own wide-ranging experience, Tab 15, AR 490-540, and the limited prior experience of [Offeror A], Tab 16, AR 855-866, 957-960, and of Irish, Tab 14, AR 398-403, 449-455. Progressive adds that Irish failed to provide any past performance materials in its initial proposal. Pl. Mot. 35. As was proper, the TET first assigned Irish a neutral rating for its past performance. But, after learning more from the offerors during the well-documented discussions, the VA adjusted their past performance ratings—as well as their technical capability ratings. As to both factors, Progressive's ratings fell. Because the VA's reasons for its findings were supported by the record, the court finds no error.
Progressive complains that the VA employed discussions as a means of allowing Irish and [Offeror A] to submit "pricing for VISNs that were not part of their initial proposal." Pl.'s Mot. 27. Progressive contends that the VA's additional discussions with [Offeror A] and Irish about their contingency plans and their transition plans were improper because these topics were not among the subfactors enumerated in the RFP.
Progressive claims that the VA did not comply with the FAR when it failed to document its reasons for holding discussions, after stating that it would it make the contract award(s) without discussions. Pl. Mot. 26 (citing the FAR 15.306(a)(3) ("Award may be made without discussions if the solicitation states that the Government intends to evaluate proposals without discussions. If the solicitation contains such a notice and the government determines it necessary to conduct discussions, the rationale for doing so shall be documented in the contract file.").
But, in both the SSP and the RFP, the VA had reserved the right to conduct discussions. Tab 9, AR 125-26 (the SSP directed the TET to develop discussion questions);
Progressive also suggests that it was treated unfairly during discussions with the agency about the topics identified by letter to the respective offerors. Pl.'s Mot. 25-27; Hr'g Tr. 190. But the record shows that Progressive gave a number of unimpressive responses to the agency's questions and those answers compromised the agency's view of its technical capability and past performance. Tab 30, AR 1311. For example, the agency found that Progressive "didn't seem to understand the logistical operations of their subcontractor's delivery procedures" or "infection control requirements." Tab 30, AR 1311. Progressive does not persuade the court on this point.
The court declines Progressive's invitation to exercise hindsight and to criticize these various reasoned determinations by the procuring agency.
The third amendment to the RFP required the offerors to submit their proposals on CD-ROM. Tab 12(c), AR 314. Irish submitted its initial proposal in paper form. 3d Suppl. Hurt Decl. ¶ 2 (ECF No. 73); Hr'g Tr. 424. Progressive argues that by doing so, Irish's submission failed to comply with the terms of the RFP. Pl.'s Resp. to Def. 3 n.3; Pl.'s Sur-Reply 4 n.1.
Defendant asserts that the contracting officer properly exercised her broad discretionary authority under FAR 52.212-1(g) to "waive informalities and minor irregularities in [the] offers received." Hr'g Tr. 25; Def.'s Reply 6. Defendant adds that the language in the Solicitation is permissive rather than mandatory, as it states: "Nonconformance with the instructions provided . . .
Progressive insists that a requirement that has become the subject of an amendment to the RFP cannot be recast, at defendant's later convenience, as a mere informality. Hr'g Tr. 35-36;
FAR Part 15 does not define the terms "informalities" and "minor irregularities" that appear in FAR 52.212-1(g). Defendant asserts that in such a circumstance, courts have looked to other provisions of the FAR for definitional guidance, and defendant points the court to FAR 14.405, which defines "[a] minor informality or irregularity [as] one that is merely a matter of form and not of substance." Def.'s Reply 6-7. Defendant also points to case law to support its position.
The court finds that, consistent with FAR 14.405 and FAR 52.212(1)(g), the agency properly exercised its discretion in waiving, as an informality, the submission format requirement.
The AR shows that the VA engaged in exchanges with Irish that allowed Irish to make material alterations to its proposal. The AR also shows that the VA treated the offerors differently as it established the competitive range. Moreover, the VA failed to provide a reasoned explanation as to how it performed its price analysis and the court cannot discern from the AR how the agency did so.
The court addresses these matters in turn.
Progressive argues that the e-mail exchanges on November 18 and 19, 2013, between Irish's account manager, the VA's contract specialist, and the contracting officer were violative of the FAR. FAR 15.306(b)(2) prohibits the use of "communications . . . to cure proposal deficiencies or material omissions, materially alter the technical or cost elements of the proposal, and/or otherwise revise the proposal." FAR 15.306(b)(3) provides that "communications shall not provide an opportunity for the offeror to revise its proposal." A violation of either of these FAR provisions also might constitute a violation of FAR 15.306(e)(1), which specifically prohibits an exchange that "[f]avors one offeror over another."
The two day period of email exchanges in November 2013—which preceded the agency's evaluation of the offerors' proposals—shows that Irish had pricing issues, among other issues, in its initial proposal. Tab 86, AR 3113, 3128; Tab 87, AR 3145. Irish, in fact, admitted at oral argument that its initial proposal lacked pricing information for option year four for VISNs 12 and 23. Hr'g Tr. 203-05. But, even after Irish revised its initial proposal to include pricing for an additional option year, the contracting officer still could not discern whether the proposal encompassed all of the locations for VISNs 12 and 23. Tab 87, AR 3145. The contracting officer then forwarded to Irish, in electronic form, the "newest schedule of items that was published in one of the solicitation amendments."
Progressive characterizes Irish's omission of key components, to include certain pricing information from its initial proposal, as a material deficiency. Pl.'s Mot. 14-15.
Defendant disagrees, asserting that Irish's "omission of option [year] four pricing from its initial proposal [for example] did not render [its] proposal unacceptable because FAR 15.306(b)(3) permits communications between the Government and offerors," after the receipt of proposals if such communications are intended to "address[] ambiguities in the proposals or other concerns such as perceived deficiencies, errors, omissions, or mistakes." Def.'s Mot. 24. Defendant characterizes Irish's use of the "wrong schedule of items . . . [as] a mistake." Hr'g Tr. 139-40. Defendant adds that even if "the VA improperly permitted Irish Oxygen to submit option [year] four pricing, Progressive was not prejudiced because it [too] was included within the competitive range." Def.'s Mot. 24.
The TET's consensus evaluation memorandum does not address either the shortcomings in Irish's initial proposal or the exchanges between the VA and Irish that occurred before the TET began evaluating the proposals. Tab 21, AR 1177-80; Tab 86, AR 3113. But the TET's consensus evaluation memorandum does address the TET's elimination of two offerors, [Offeror B] and [Offeror C], from the competitive range due to the "spotty coverage" of the various VISNs proposed by the two offerors. Tab 21, AR 1177-80.
Progressive insists that Irish unfairly had an opportunity to fix its critical problems before the TET evaluated its proposal. Plaintiff argues that instead of allowing Irish to address its deficiencies prior to the establishment of the competitive range, the agency should have excluded Irish from the competitive range as it excluded [Offeror B] and [Offeror C]. Hr'g Tr. 409;
Irish responds that "the V.A. had the discretion, if not a duty, to allow Irish to correct [minor technical errors or deficiencies] under applicable case law, and [to] include Irish within the Competitive Range." Def.-Int.'s Reply 6-7;
In
The Solicitation at issue in this case incorporated FAR 52.212-1(g) and stated that an "offeror's initial [proposal] should contain the offeror's best terms from a price and technical standpoint" because the "[g]overnment intends to evaluate offers and award a contract without discussions with offerors." Tab 11, AR 201. Irish's assertion that the government had a duty to notify Irish of its material deficiencies does not square with the VA's discretion "to make an award based on initial offers received, without exchanges of such offers."
Irish's ability to modify aspects of its proposal before the agency's initial evaluation also calls into question the "late is late" rule. FAR 52.212-1(f)(2)(i) provides that, "[a]ny offer, modification, revision, or withdrawal of an offer received at the Government office designated in the solicitation after the exact time specified for receipt of offers is `late' and will not be considered unless it is received before [an] award is made."
The "late is late" rule does not apply in circumstances in which "the [c]ontracting [o]fficer determines that accepting the late offer would not unduly delay the acquisition" and "[t]here is acceptable evidence to establish that [the proposal] was received at the Government installation designated for receipt of proposals and was under the Government's control prior to the time set for receipt of offers." FAR 15.208(b)(1)(ii);
This exception to the "late is late" rule is limited by FAR 52.212-1(f)(2)(ii), which allows the consideration and acceptance of "a late modification of an
The "late is late" rule prohibits an agency from accepting proposal modifications or revisions after the deadline established by the agency. FAR 52.212-1(f). As noted by the Federal Circuit, "[t]here are inherent competitive advantages to submitting a proposal after all other parties are required to do so," including the ability to make "last minute changes to the proposal."
The TET seems to have made the competitive range determination that the contracting officer later ratified.
By delegating this authority to the TET, the contracting officer not only violated the RFP and FAR 15.306(c)(1), but more importantly, the contracting officer also seems to have kept from the TET's awareness the significant deficiencies that were identified in Irish's initial proposal.
The Federal Circuit has stated, "[w]hen procedural violations committed by the agency are egregiously removed from fairness, this constitutes an abuse of the agency's administrative discretion."
The SSP stated that "[p]rice [would] be compared against [the other evaluation factors] to determine the combination most advantageous to the Government." Tab 9, AR 129-30. The RFP stated that "[i]n determining the competitive range, price [would] be considered." Tab 11, AR 217. The RFP also stated that "[price would] be evaluated in terms of fairness and reasonableness."
The AR contains an undated one-page document, entitled "Price Evaluations (Initial Award)," that details each offerors' pricing for the VISNs they proposed to service. Tab 22, AR 1181. The document shows that the offerors were not ranked substantively, but by their individually quoted prices. Tab 31, AR 1326. Because, the document includes pricing for Irish's proposal to service VISNs 12 and 23 for option year four, it appears to have been prepared after the VA's e-mail exchanges with Irish on November 18 and 19, 2013. Hr'g Tr. 204-05;
In the TET's consensus evaluation memorandum, the agency indicated that "[p]ricing [would] be evaluated separately." Tab 21, AR 178. Although the SSP and the RFP indicate that the non-price evaluation factors were significantly more important than price, price was to be evaluated nonetheless.
The record shows that the VA's Contract Review Board (CRB), which is tasked with reviewing the agency's high dollar value procurements to ensure compliance with acquisition policies and procedures, expressed concern that price had not been addressed before the competitive range was established. Tab 94, 3197-98. The CRB specifically questioned the adequacy of the agency's documentation of its evaluation methods, writing to the contracting officer:
Tab 94, AR 3199.
Responding to the CRB's concerns, the contracting officer wrote that FAR 15.306(C) and FAR 15.305(a) allowed "price . . . not [to be] evaluated until after [the] revised proposals were submitted." Tab 97, AR 3211. Although, the contracting officer's response was "[c]orrected" later, the March 14, 2014 source selection decision was not. Tab 45, AR 2022. In her corrected response, the contracting officer explained that even if a price evaluation were deemed necessary, no meaningful evaluation could have occurred before the competitive range determination.
The agency also violated the FAR. FAR 15.306(c)(1) requires that "the contracting officer establish a competitive range comprised of all of the most highly rated proposals . . . [b]ased on the ratings of each proposal
Moreover, FAR 15.308 requires documentation of the source selection decision and such documentation should "include the rationale for any business judgments and tradeoffs
The contracting officer did perform a tradeoff analysis in the corrective action source selection decision, but she did not address how the proposed pricing for the various VISNs was assessed. Tab 59, AR 2381-85. Nor can the court discern from the record how the agency evaluated the pricing in each offeror's proposal based on the offerors' different plans to service assorted VA locations.
The VA's price comparison, if performed at all, is very poorly documented in the corrective action source selection decision, as is reflected by the CRB's recommendation that the agency provide a more detailed price comparison of the various VISNs the offerors proposed to service. Without any record of a meaningful price comparison by the agency, the court cannot discern the agency's rationale for its source selection decision. Nor can the court find the VA's decision to establish the competitive range— without first evaluating price—either to have been rational or in accordance with law.
The deadline for submitting the final revised proposals was "3:00 PM [Central Time], on December 19, 2013."
Defendant asserts that the contracting officer's decision to accept [Offeror A]'s late revised proposal was a permissible exercise of discretion. Def.'s Mot. 19 (citing
The court in
Plaintiff argues that both the
The VA treated [Offeror A] differently and—in effect—preferentially by extending its submission deadline, without offering a correlative extension to the other offerors. It is not clear to the court that [Offeror A] would have been able to complete and to submit its revised proposal without the extension it received because, as [Offeror A]'s president explained in its request for more time, [Offeror A] was "deep into finalizing [its] proposal." Tab 98, AR 3216. But what is clear is that [Offeror A] received a benefit that the other offerors did not when the agency afforded it additional time to prepare its submission. It is this type of unfair treatment that is expressly prohibited under FAR 3.101-1.
Ordinarily, in the circumstance of a post-award bid protest, the court examines whether the procuring agency has evaluated the proposals and made an award decision in a manner that comports with the stated criteria in the Solicitation and in accordance with the FAR.
Review of the AR indicates that the agency deviated, without a written explanation, from the evaluation procedures prescribed by the SSP, and the rationale for the VA's departure cannot be discerned from the record. In evaluating the legal effect of the agency's actions, the court looks to the history and purpose of SSPs, as well as the expanding role of SSPs in judicial review of procurement decisions.
The only mention in the FAR of this particular document is in the definition of the term "source selection information." FAR 2.101. Prior to the rewrite of FAR Part 15 in 1997, FAR 15.612 required a SSP for all "formal" source selections, which generally applied to high-dollar-value acquisitions. Among other requirements, FAR 15.612(3)(c)(5) specifically directed the SSP to contain "[a] description of the evaluation process, methodology, and techniques to be used."
The court's rules identify the SSP as one of the "relevant core documents" to be included in the administrative record that the agency must produce early in a bid protest action to "expedite final resolution of the case." RCFC App. C, 22(b). The SSP may assist the court in understanding why an agency took a particular action. In
Although SSPs are widely used by agencies for source selection, and are mandatory for certain types of acquisitions under DFARS 215.303(b)(2), their use is no longer required by the FAR. The FAR has no requirement that an agency disclose its "rating methods" in a solicitation. Instead, an agency only need describe its "general approach for evaluating past performance information." FAR 15.304(d).
Historically, the purely internal use of SSPs led the Claims Court to conclude that "when rules and regulations are promulgated for the benefit of the government and no one else, the other party to a contract cannot complain if such regulations are not complied with."
Plaintiff asserts that an agency's departure from the evaluation criteria and procedures provided by the SSP "can undermine the rationality of the ultimate source selection decision." Pl.'s Supp. Br. 5-6 (citing
Relying on a series of cases, defendant argues that the VA's deviation from the SSP does not furnish a ground for Progressive to protest.
As the case law reveals, the court has looked to prepared SSPs in certain limited circumstances.
In
The court, however, exercises care not to review a SSP as it would a solicitation. Rather it looks to the SSP to evaluate the rationality of the agency's departure from its procurement plan. The court may consider whether the deviations from the SSP are reasoned departures.
When the AR reveals a disparity between the SSP and the solicitation, the court will examine the record further to find the agency's expressed rationale for the divergence or to understand the circumstances that led to the change in the evaluation criteria or procedures. Such variance is not necessarily indicative of an irrational agency action. As the court observed in
Here, the court relies upon more than the agency's deviation from the procedures set forth in the SSP to conclude that it cannot make a finding that the VA's corrective action source selection decision was a rational one. The court makes this conclusion based on the agency's inability to describe its own evaluation procedures in a clear or consistent manner.
In this bid protest, the contracting officer offered an affidavit describing evaluation procedures that differed from those set forth in the corrective action source selection decision,
Although the court may uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned, the marked inconsistencies between the evaluation procedures described in the SSP, the corrective action source selection decision, and in the contracting officer's affidavit do not permit the court to follow the agency's path.
Here, the agency appears to have adopted different procedures from those set forth in the SSP—without explanation as to why or how it did so.
Thus the court looks to the SSP, at defendant's invitation, to evaluate the rationality of this procurement process.
Defendant relies on the SSP to show that the agency contemplated both establishing a competitive range and holding discussions. Def.'s Mot. 18. Defendant further relies on the SSP to justify the contracting officer's position on price analysis. Def.'s Mot. 8-9; Hr'g Tr. 78 (citing Tab 45, AR 2022-24; Tab 59 AR 2381-85), 108.
But, the VA's reevaluation of technical capability did not comport with the evaluation methodology set forth in the SSP.
The contracting officer referenced the SSP in her description of the TET's evaluation methods. She stated that "the first step required by each TET member [in evaluating the revised final proposals] was an evaluation of the technical capability of each offeror." Suppl. Hurt Decl. ¶¶ 39-40 (ECF No. 41). This described process differs from the iterative process described in the SSP—which did not provide for the reevaluation of technical capability.
Progressive asserts that the VA acted in contravention of the SSP by revisiting the technical capability factor after conducting the initial evaluation. Pl. Mot. 23-24 (citing Tab 9, AR 125; Tab 45, AR 2015). Essentially, Progressive asks the court to disallow any deviation from the evaluation criteria and methods set forth in the SSP, in the agency's reevaluation of the offerors' technical capability as part of its corrective action.
Defendant maintains the position that VA "did not deviate from the SSP by reevaluating the technical capability factor after the competitive-range determination." Def.'s Supp. Br. 4. The VA explained at oral argument that the disparity between the evaluation procedures of the SSP and those documented in the corrective action source selection decision "is . . . an issue of form over substance." Hr'g Tr. 23. Defendant points to the sentence in the SSP addressing the possibility of reevaluating technical capability after the competitive range determination: "In the event that additional capability information is desired before making a source selection, discussions [might] be held for those offerors with a realistic chance for award (competitive range)." Def.'s Suppl. Br. 5 (citing Tab 9, AR 125). Defendant insists that the placement of that sentence before the instruction that only past performance, veterans preference, and price (steps two through five) would receive agency reevaluation makes clear that the phrase "[s]teps two through five" is a typographical error. Def.'s Suppl. Br. 5 (citing Tab 9, AR 125). Defendant's explanation for the disparity between the contracting officer's characterization of the five-step evaluation process in the corrective action source selection decision—which was derived purportedly from the SSP—and those described in the SSP is summary and unsupported. Compare Suppl. Hurt Decl. ¶ 40,
Although the contracting officer states in her supplemental affidavit that the TET's first step in reevaluating proposals was to assess the offerors' technical capability, Suppl. Hurt Decl. ¶ 40 (ECF No. 41), the first step described in the corrective action source selection decision was "a determination of the acceptability of each offer by evaluating the consistency of each Offeror's promises with the terms and conditions in the RFP." Tab 59, AR 2370. The corrective action source selection decision also described technical capability comprised of: (1) individual evaluations; and (2) "an overall group consensus on findings leading to a competitive range."
Looking to the SSP to understand how the VA arrived at its corrective action source selection decision, the court finds the explanation for the disparity between the evaluation procedures as described in the contracting officer's affidavit and those found within the corrective action source selection decision to be wanting.
Progressive's initial technical capability and past performance evaluation scores— as well as its inclusion within the competitive range—positioned it to have had a "substantial chance" to receive a contract award. Tab 21, AR 1177-78.
Defendant claims that Progressive suffered no prejudice because it, like the contract awardees, fell within the competitive range and remained under consideration for award during the pendency of the procurement process. Def.'s Reply 11 (citing
Even if the court were to accept defendant's claims as true, the court is persuaded that the VA compromised the competitive fairness of this procurement by granting [Offeror A] an extension of time to submit its revised proposal and thus, maintain its eligibility to be considered for a contract award. Moreover, the agency compromised the competitive fairness of the procurement by allowing Irish to address the type of gaps in its proposal that were deemed problematic for other offerors—who were not afforded a similar opportunity to address their marked gaps in information and thus were excluded from the competitive range.
Whether [Offeror A] could have met the filing deadline without the extension it received is uncertain. Also uncertain is whether Irish would have been included in the competitive range if it had not been afforded an opportunity to cure the shortcomings in its initial proposal. It is these allowances by the agency, as well as the manner in which the agency conducted the reevaluation, that call into question the fairness of the procurement process and the rationality of the agency's award decision. The court finds these errors to have been prejudicial.
Pursuant to the Tucker Act, the court may award "any relief that the court considers proper, including declaratory and injunctive relief" in bid protest cases. 28 U.S.C. § 1491(b)(2) (2012). To decide whether a permanent injunction is warranted,
No individual factor carries dispositive weight, and the court must "weigh and measure each factor against the other factors and against the form and magnitude of the relief requested."
Progressive seeks to enjoin the VA from awarding the contracts at issue to Irish and [Offeror A].
"When assessing irreparable injury, `[t]he relevant inquiry . . . is whether plaintiff has an adequate remedy in the absence of an injunction.'"
Defendant argues that for a showing of irreparable harm, more than a mere showing of lost profits is required; rather, the alleged loss must be sufficiently severe that it threatens the survival of the movant's business. Def.'s Mot. 46 (citing
Defendant misrelies on
Progressive proposed to service all of the VISNs listed in the RFP, and included, in both its initial and revised proposals, pricing information for the base and four option years as to each VISN. Tab 15, AR 541-712, 724; Tab 21, 1177-1180. Progressive is the incumbent contractor and the loss of the opportunity to supply even one of the VISNs will cause Progressive to suffer economic harm.
When evaluating the balance of hardships, the court must weigh the irreparable harm plaintiff would suffer without an injunction against the harm an injunction would inflict on defendant and defendant-intervenor.
The court acknowledges that plaintiff, as the incumbent contractor, has benefited from its continued performance on a substantial portion of the work covered by the Solicitation during the pendency of this bid protest.
Progressive asserts that had the VA performed its source selection in accordance with the SSP and the FAR, Irish would have been eliminated from the competitive range. Hr'g Tr. 402. Progressive adds that it "had a very good chance of receiving the contract for all of the VISNs in all locations, just like they had proposed," as "[Offeror A] had only submitted a proposal for [VISN] 16."
Defendant counters that because the VA's "best-value determination was reasonable and adequately documented," the agency would be harmed by the grant of injunctive relief. Def.'s Mot. 46. Defendant adds that "Progressive hasn't established any prejudice [and asserts that] . . . . there's an extensive discussion in the contracting officer['s] source selection decision as to the reasons why the Government believed that Progressive's [sic] final proposal revisions were insufficient or inadequate." Hr'g Tr. 416-17 (citing Tab 59, AR 2383-84).
The VA's arguments do not persuade. Defendant relies on the VA's corrective action source selection decision, in which the agency addressed why it selected [Offeror A] and Irish over Progressive. But the errors that occurred earlier in the procurement process tainted the later stages of the agency's procurement process.
On this record, the balance of hardships militates in favor of Progressive.
The public has a strong interest in ensuring that the government procurement process is fair.
Defendant points to the VA's corrective action source selection decision to support the agency's contract awards. Def.'s Mot. 47 (citing Tab 59, AR 2384-85). But defendant ignores the lack of equal treatment given to the offerors.
The public, and in this case the veteran recipients of medical support, are well served by the procurement of medical cylinder gases for various VA locations by means of a competitive marketplace. When offerors compete to provide the best value for needed goods and services, they are expected to meet the requirements of the Solicitation or risk elimination from consideration. This is particularly true when, as in this case, discussions between the government and offerors are not anticipated, and no opportunity to cure an otherwise insufficient proposal is expected.
The court was prevented from making findings as to the rationality of certain agency action in this procurement due to inadequate documentation and explanation in the AR. In particular, the court was unable to review the agency's consideration of the price component of the offers, as well as the manner in which it conducted the reevaluation of the revised offers. Moreover, the VA's inconsistent treatment of the offerors when it established the competitive range and its election to grant an extension of time only to [Offeror A] for the submission of its revised proposal do not serve the government's procurement system well.
Here, the public's interest in ensuring the integrity and fairness of the procurement process outweighs the public's interest in permitting the VA to conduct its source selection with prejudicial errors and evidence of unequal treatment of the offerors.
For the reasons discussed fully above, plaintiff's motion for judgment on the administrative record is
IT IS SO ORDERED.
Additionally, the sealed Order issued on November 23, 2016, ECF. No. 134, should be considered in conjunction to this Order and Opinion because it clarified the judgment to be entered in accordance with this Order and Opinion.
The parties have not notified the court of the decision's impact on this case. Thus, the court does not consider it here.
