MARY ELLEN COSTER WILLIAMS, Judge.
In this post-award bid protest, involving multiple awards for trucking services in Afghanistan, Guzar Mirbachakot Transportation ("GMT") challenges the Department of the Army's failure to evaluate portions of its proposal on the ground that they were late. GMT claims that its entire proposal was submitted on time via e-mail using zip files and that the Army incorrectly interpreted the solicitation to prohibit this manner of transmission.
Upon consideration of the Administrative Record ("AR"), and the entire record herein, the Court concludes that the solicitation did not prohibit transmission via zip files and the Army's failure to evaluate GMT's full proposal, which was timely received in zip files, was arbitrary and capricious. As such, the Court enters an injunction directing the Army to evaluate GMT's full proposal and consider that proposal for an award. The Court also awards GMT limited bid and proposal preparation costs that were wasted due to GMT reorganizing and retransmitting its proposal eliminating zip files.
On February 22, 2011, the Army issued solicitation number W91B4N-11-R-5000 for National Afghan Trucking ("NAT") services in Afghanistan. AR 141. The purpose of the NAT contract was to provide a secure and reliable means of distributing reconstruction material, security equipment, fuel, miscellaneous dry cargo, and life support assets to forward operating bases and distribution sites throughout the combined joint operations area in Afghanistan. AR 1167. The Army anticipated the award of indefinite delivery/indefinite quantity contracts for trucking services in three suites: Suite 1, for bulk fuel; Suite 2, for dry cargo; and Suite 3, for heavy cargo.
There were three amendments to the solicitation. Amendment 0001, issued on March 13, 2011, extended the due date for receipt of proposals to April 8, 2011, 4:00 p.m. Afghanistan time ("AFT") and incorporated Questions & Answers 31 through 193. AR 245-46. Amendment 0002, issued on March 24, 2011, incorporated Questions & Answers 194 through 294. AR 425-26. Amendment 0003, issued on March 31, 2011, incorporated Questions & Answers 295 through 412. AR 1061-62.
The solicitation contained nine pages of proposal preparation and submission instructions. AR 1131-40. The Army instructed Offerors to submit proposals in four volumes — Contract Documents, Volume I, and Technical Capabilities for each of the three Suites, Volumes II-IV. AR 1131-32. The majority of the proposal submission instructions delineated which proposal documents should be placed in the respective volumes. AR 1133-40.
Only two paragraphs discussed electronic proposal submission requirements. First, under a paragraph titled "Proposal Format," the solicitation stated: "The contractors shall submit an original and redacted copy of their complete proposal. Proposals may be submitted in hard copy (mail, in-person, etc.) or via e-mail to the Contracting Officer." AR 1132. The solicitation continued:
AR 1132.
The solicitation further stated the requirements for electronic proposals as follows:
AR 1132 (emphasis added).
The only other guidance for electronic proposal submissions was contained in the Questions and Answers incorporated in the solicitation. Answers advised offerors of the correct e-mail address for transmission of proposals, instructed that the Government's e-mail system would not accept password-protected documents, and advised that both hard and e-mail copies of the proposal could be submitted but the Army would evaluate the last proposal received before the deadline. AR 383-84, 1203, 1206. In response to a question whether the military e-mail system had capability to receive e-mails with "more than 5 megabytes of size," the Government responded: "it will be the Offeror's responsibility to ensure proposal transmissions are received by the USG [United States Government] by the due date and time specified in the solicitation. The USG recommends that electronic file size(s) do not exceed 5MB." AR 395. There were no additional requirements for the electronic submission of proposals.
The procurement was to be conducted in accordance with FAR 15.101-2 as a Lowest Price Technically Acceptable ("LPTA") procurement. AR 1142. The first step in the LPTA process was a responsiveness evaluation. AR 1143. The solicitation contained strict requirements regarding responsiveness, stating:
AR 1143.
Once a proposal was deemed responsive to the solicitation, the Army planned to evaluate it under two factors — technical capability and price.
AR 1144-45. Proposals were to be scored as either "acceptable" or "unacceptable" for each subfactor. AR 1143. An acceptable rating indicated the offeror passed or met the minimum mandatory requirement, while an unacceptable rating indicated the offeror failed to meet the minimum mandatory requirements.
Only technically acceptable proposals would be evaluated for price. The price evaluation assessed whether an offeror's unit prices were fair, reasonable, and balanced.
The Army planned to repeat the process until it identified approximately 10 to 14 awards under each suite. AR 1146. While the Army intended to evaluate proposals and make awards without discussions, it reserved the right to conduct discussions, establish a competitive range, and allow offerors to furnish revised proposals. AR 1146-47.
GMT engaged a consultant, David Evans, to assist in preparing and transmitting its proposal for the NAT procurement. Since 1985, Mr. Evans has worked as a proposal manager and technical writer on over 150 federal solicitations. Evans Decl. (May 2, 2011) ¶ 1.
Mr. Evans explained his experience with zip files in federal procurements, stating:
Evans Decl. ¶¶ 2-4.
On the morning of April 8, 2011, beginning at 5:55 a.m. AFT, Mr. Evans began submitting GMT's proposal via e-mail. AR 1224-56. Mr. Evans explained how he transmitted the proposal as follows:
Evans Decl. ¶ 4.
Due to the warning in the solicitation concerning the intermittent availability of internet and e-mail in Afghanistan, Mr. Evans began transmitting GMT's proposal approximately eight hours in advance of the 4:00 p.m. AFT deadline.
That same day at 11:00 a.m. AFT, more than three hours after Mr. Evans had completed transmission of the proposal via zip files and five hours before the deadline for receipt of proposals, Mr. Evans received the following e-mail from Contract Specialist Moonan:
AR 1235. This was the only time in Mr. Evans' over 25 years of experience in which he encountered difficulty in transmitting compressed (zipped) files to a Federal government agency. Evans Decl. ¶¶ 1, 4. Further, this was the first time that a federal agency had refused to accept a zip file submission from him. At 12:49 p.m. AFT (4:19 a.m. ET), Mr. Evans responded "[w]e have stripped the proposal files from the Zip Files and are currently `sizing' the files to allow us to e-mail . . . . will send as soon as possible." AR 1336.
Because the Army had recommended that e-mailed proposal submissions not exceed five MB, Mr. Evans reorganized the proposal sections and attachments in the compressed (zipped) files into separate e-mails with attachments that approximated five MB in size. Mr. Evans then resent GMT's proposal, consisting of over 100 individual Word and/or PDF files, by attaching those files directly to several batches of e-mails. This task required Mr. Evans to split approximately 80 files to meet the file size requirements for transmission.
At 12:22 p.m. AFT, the Army began receiving GMT's proposal in the resent e-mails containing individual PDF and/or Word files. AR 1261-1899. While some of these e-mails were received prior to the deadline for proposal submissions, many e-mails did not arrive until after the 4:00 p.m. AFT deadline. AR 1917-18. Between 4:06 and 5:07 p.m. AFT, the contracting officer received an additional 10 e-mails from Mr. Evans containing parts of GMT's proposal.
On April 11, 2011, GMT's counsel sent an e-mail to the contracting officer inquiring as to what the Army had received from GMT. AR 1929. The contracting officer responded by attaching an e-mail providing the receipt times of 50 e-mails received on April 8, and stating that firms would be notified if their proposals were deemed late. AR 1933-46.
In an April 23, 2011 letter, the contracting officer notified GMT that "portions of GMT's proposal that were received prior to 4:00 p.m. local Afghan Time, 8 April 2011, will be evaluated" and "portions received after that time are determined to be late and, in accordance with FAR 15.208, may not be evaluated for award." AR 1958-59.
In late April 2011, the Army completed the responsiveness evaluations and concluded that only five out of 93 proposals met all of the responsiveness criteria. AR 2733. The Source Selection Evaluation Board ("SSEB") Chairperson noted that the stringent responsiveness criteria produced an "insufficient number of acceptable proposals for adequate competition," and that the Army would "not [be] able to satisfy the requirement in terms of awarding 10-14 contracts per suite."
AR 2741. On April 25, 2011, the SSA endorsed the SSEB's recommendation, and on April 26, 2011, the contracting officer and the SSEB Chairperson adopted the two parameters. AR 2733-34.
Despite relaxing the solicitation's responsiveness criteria, the Army was unable to identify a sufficient number of technically acceptable proposals.
On May 31, 2011, the contracting officer informed GMT that the timely portions of GMT's proposal had been evaluated for technical acceptability, that GMT's proposal for Suite 1 was determined to be technically unacceptable, and that GMT was excluded from the competitive range. AR 2706-07. GMT's proposal failed to receive an "Acceptable" technical evaluation rating for Subfactors 1A, 1B, 1C, 1D, and 1E — all of the technical subfactors but one. AR 2708-10. On August 5, 2011, GMT received similar notification regarding its proposals for Suites 2 and 3. AR 2711-12, 2716-17.
On May 3, 2011, GMT filed a protest at the Government Accountability Office ("GAO"). At GAO, GMT argued that the solicitation's electronic submission requirements were latently ambiguous, rendering the Army's decision to reject GMT's proposal transmissions sent via zip folders unreasonable. AR 129. After the Army filed its Agency Report with GAO in early June, 2011, GMT discovered information regarding the Army's e-mail systems and network architecture, and argued that the Army servers actually received the entirety of GMT's proposal in zip files prior to the deadline for the receipt of proposals and that the entire proposal was under the Government's control prior to the deadline. AR 2703-04.
On August 4, 2011, GAO dismissed GMT's protest as untimely because GMT was aware prior to the deadline for proposals that the Army interpreted the solicitation as prohibiting transmission of offers in zip files. AR 2702. GAO relied on the contract specialist's e-mail saying "We can not accept Zip files," to reach this conclusion, finding that by virtue of this e-mail, GMT learned of the Army's interpretation of the solicitation at least five hours before the deadline for submitting proposals. AR 2703.
On August 17, 2011, GMT filed the instant bid protest seeking a temporary restraining order and preliminary injunction. GMT argued that the solicitation instructions regarding electronic submissions were latently ambiguous, the Army's server received GMT's proposal submission via compressed (zipped) files prior to the deadline for proposals and its failure to evaluate the proposal was contrary to the solicitation and FAR 15.208, and the Army breached its duty of good faith and fair dealing because it knew its servers would strip zipped files, but failed to inform offerors.
This Court heard argument on the temporary restraining order and preliminary injunction on August 18, 2011, denied the motions in an oral ruling, and set an expedited schedule. Tr. and Order, Aug. 18, 2011. The Government filed the Administrative Record on August 23, 2011, and GMT filed its amended complaint on August 24, 2011. The amended complaint included a new count alleging disparate treatment of the offerors with respect to the responsiveness requirements of the solicitation stating:
Am. Compl. ¶¶ 41-42.
GMT filed its Motion for Judgment on the Administrative Record on August 31, 2011, and the Government filed its Cross-Motion and Opposition on September 7, 2011. The Court heard oral argument on the motions on September 19, 2011. Due to the technical nature of the issues regarding the nature of compressed zip files, the Court accepted expert testimony at a trial limited to this purpose. Order Regarding Experts, Sept. 6, 2011; Tr. 13, 75 (Sept. 19, 2011).
On September 30, 2011, the Army proposed GMT for debarment based on "evidence of false claims and forgery by GMT in its performance of trucking services under the [HNT] contract." Def.'s Mot. to Dismiss 1. On October 6, 2011, the Government filed a motion to dismiss this action on the ground that GMT was ineligible for award because it had been proposed for debarment. Following a conference with the parties on October 7, 2011, the Court stayed proceedings until the resolution of GMT's debarment proceedings. Order, Oct. 7, 2011.
On February 1, 2012, GMT notified the Court that GMT's proposed debarment had been terminated due to insufficient evidence. Pl.'s Resp. to Def.'s Mot. to Dismiss, Attach. 1 ("SDO Letter"). In a letter advising Plaintiff and its principals that the proposed debarment had been terminated, the Army's Suspension and Debarment Official ("SDO") stated:
Pl.'s Resp. to Def.'s Mot. to Dismiss, Attach. 1 at 2.
Although the September 30, 2011 proposed debarment had been terminated, the SDO [____]
On February 14, 2012, Defendant filed a motion requesting an enlargement of time of 60 days, to and including April 17, 2012, in which to file its reply to Plaintiff's opposition to its motion to dismiss, arguing that "the debarment proceedings remain pending [____] and that it would be inefficient for the Court to continue proceedings in this action. Def.'s Mot. for Enlargement 2-3. Plaintiff opposed Defendant's request for an enlargement. On February 21, 2012, the Court orally ruled that Defendant's motion to dismiss had been rendered moot by virtue of the termination of the September 30, 2011 proposed debarment. Order, Feb. 22, 2012.
On February 22, 2012, the Government orally requested a 21-day stay of this action [____] The Court granted a briefer stay until March 7, 2012, to enable the parties to clarify [] Order Staying Case, Feb. 22, 2012.
On March 5, 2012, Defendant filed a status report stating: [____]
On March 7, 2012, the Court held a telephonic conference with the parties, orally lifted the stay, and confirmed that the record was closed on the pending cross-motions for judgment on the AR.
This 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 proposed procurement." 28 U.S.C. § 1491(b)(1) (2006). An interested party is an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by the failure to award the contract.
In a bid protest, the Court reviews an agency's procurement decision under the standards enunciated in the Administrative Procedure Act ("APA"), 5 U.S.C. § 706; 28 U.S.C. § 1491(b)(4);
In resolving bid protests, the trial court is to make findings of fact weighing the evidence in the administrative record.
As the United States Court of Appeals for the Federal Circuit recognized in
Effective judicial review would be impeded where technical aspects of the procurement process remain unexplained, preventing the parties from engaging in informed advocacy and the Court from developing a full judicial record and accurate context for its decision. The Court of Federal Claims has routinely permitted supplementation of the record in a bid protest with expert testimony when necessary for the Court to understand technical or complex information involved in the challenged procurement.
This case involves the interpretation of a solicitation's requirement for electronic submission of proposals to be received via e-mail in Afghanistan. The parties dispute whether the solicitation's mandate that e-mailed proposal files be submitted in "Microsoft Office 2003 (Word and/or Excel) or PDF format only," precluded offerors from submitting proposals in zipped or compressed files. AR 1132. Specifically, they contest whether compressed or zip files are a "format" that necessarily differs from "Microsoft Office 2003 (Word and/or Excel) or PDF format" or whether zip files are a protocol or utility that merely entails different packaging of the proposals without altering their underlying format. The controversy thus centers on technical computer-related concepts and terminology.
Federal Rule of Evidence 702 permits expert testimony in precisely such a circumstance. The rule provides:
Consistent with this rule, expert testimony here will assist the Court in understanding technical issues regarding the nature of electronic file formats and zip files, the Army's e-mail network architecture, and common trade practice surrounding the use of compressed or zipped files. As such, this Court deems expert testimony to be essential for resolution of this protest and appropriate under
Prior to trial, Defendant moved to strike portions of Professor Gill's declaration and limit the scope of his testimony. In his declaration, Professor Gill opined that the solicitation requirements regarding the use of compressed or zipped files were ambiguous, and provided what he considered "the most reasonable interpretation" of the solicitation requirements. Gill Decl. (May 16, 2011). The Court orally granted Defendant's request to strike in part, prohibiting Professor Gill from offering legal conclusions. Specifically, the Court instructed Plaintiff that Professor Gill was not to render opinions as to whether there was a latent ambiguity in the solicitation, which is a legal conclusion, or whether Plaintiff's interpretation of the solicitation was reasonable in the legal sense. Tr. 6. However, the Court welcomed Professor Gill's testimony on custom and trade usage to aid in interpreting technical terms in the solicitation.
When interpreting a solicitation, this Court applies well-settled principles of contract interpretation.
The solicitation allowed offerors to submit their proposals via electronic means, but did not elaborate on the requirements for electronic transmission. While the solicitation reminded offerors that internet and e-mail availability was intermittent in the operating environment in Afghanistan, and that file size should not exceed five MB, the solicitation did not inform offerors of any other restrictions in the Government's server or architecture for receiving e-mailed proposals.
The solicitation's lone sentence containing the requirement for electronic submission provided: "if the proposal is submitted via electronic means, files shall be `Microsoft Office 2003 (Word and/or Excel) or PDF format only.'" AR 1132.
The parties attribute different meanings to the term "format," and dispute whether a zip file is itself a format or something else — a utility, protocol or transmission feature. GMT claims that a zip file is a file compression utility and analogizes a zip file to packaging that is separate from the underlying file format such as Microsoft Office Word or Excel. Thus, in Plaintiff's view, the solicitation permitted e-mail transmission of PDF and Word files packaged in compressed or zipped files — because zip files are not a "format."
The Army claims that the solicitation prohibited the use of compressed or zipped files because they are a type of file format, and the solicitation restricted formats to Microsoft Office 2003 (Word or Excel) or PDF format. The Army posits that the "format" of a file "refers to the manner in which the information in the file can be accessed by the operating system," and that formats are identified by three-letter suffixes after the file name, such as ".xls" or ".doc" or ".pdf." Because a zip file has its own three-letter suffix, ".zip" and because zip compression is sometimes described as a zip format, the Army viewed the "zip format" as being prohibited by the solicitation's requirement that proposal files were to be submitted in "Microsoft Office 2003 (Word or Excel) or PDF format only."
Here, neither party's interpretation of the solicitation is unreasonable. The different perspectives of the parties and the loose usage of the term "format" in both technical and common parlance contributed to the differing interpretations. As the experts acknowledged, a zip file can be referred to as a "format," and zip files bear a suffix (.zip), just as Word, Excel and PDF formats do. In sum, there is this legitimate debate about the nature of zip files, which calls into question the meaning of the term "format" in the solicitation, thereby rendering the solicitation ambiguous.
Having concluded that an ambiguity exists here, the Court must determine whether the ambiguity is latent or patent.
For the purpose of distinguishing between patent and latent ambiguities, the United States Court of Appeals for the Federal Circuit has explained:
The ambiguity here — the varying interpretations of the requirement that electronic files be "Microsoft Office 2003 (Word and/or Excel) or PDF format only" — falls within the grey zone of ambiguity. As the parties' interpretations have evidenced, the term "format" is susceptible to different meanings in technical parlance and in the context of transmitting e-mail files. Format can, as Plaintiff contends, refer to Word, Excel, or PDF files and not to a zip utility, or, using the term format more broadly as Defendant does, a zip file can be described as a zip format. Because the ambiguity here arises from the technical interpretation of a single term and not an apparent conflict on the face of the solicitation, the ambiguity is latent — not so glaring or obvious that it would give rise to a duty to inquire.
Where a contract has a latent ambiguity, under the rule of
Here, Plaintiff's interpretation is eminently reasonable. Because the solicitation restricted proposal files to the Microsoft Office 2003 (Word and/or Excel) or PDF format, and the use of zipped files would not have changed the format of the proposal files, it was reasonable for GMT to assume that it could submit its proposal in PDF or Word format attached to an e-mail using zip files. The parties' experts agreed that the use of zipped files did not alter the format of the documents placed into the files. Tr. 15-16, 44, 86-87. Rather, when a computer user compresses files, the files maintain their Excel or PDF character. Professor Gill analogized the compression process to folding of a piece of paper. He stated:
Defendant's expert agreed. Mr. Perez stated:
Tr. 86-87.
GMT's interpretation of the solicitation also comported with common trade practice and usage. The use of zip files is extremely common in the world of electronic communications and is a common feature of modern desktop environments. Tr. 17-18, 63. The Questions and Answers in the solicitation recommended that electronic submissions not exceed five megabytes. AR 1132. Zipped files are commonly used in the commercial marketplace to reduce the size of large file transfers. Tr. 18-19. As such, GMT reasonably used zipped files as a common commercial tool to shrink its proposal files.
The Army argues that GMT's interpretation is unreasonable in light of the Army's internal policy restricting the e-mailing of zip files. Def.'s Reply 15-16. However, this policy has never been published to the public or to offerors. Tr. 82, 120. In 2006, the Army issued a NETCOM TECHCON Implementation Memorandum ("email security policy"), providing a list of attachment types that were to be filtered from e-mail due to the risk of computer viruses and malware. AR 2694-99. This security policy required that e-mail traffic originating outside of the Army's network be scanned and stripped of a list of over 50 attachment types, including zip attachments. AR 2696-98.
The Army states that because the policy has been in place for over five years and is "representative of the type of policy that a reasonable contractor doing business with the Army would be aware of," the burden is on the offerors to know that policy. Def.'s Proposed Findings 17-18. The Army's application of this policy would impose far too heavy a burden on offerors. It is fundamental that compliance with a policy that was not disclosed in the solicitation cannot be imposed as a solicitation requirement. "Making offerors aware of the rules of the game in which they seek to participate is fundamental to fairness and open competition."
Because GMT reasonably interpreted the solicitation to permit submitting its proposal files via e-mail and PDF or Word documents packaged in zip files, the Army's rejection of that transmission and last minute insistence on a mechanism that delayed GMT's submission was arbitrary and capricious.
The Army's wholesale abandonment of the solicitation's responsiveness criteria before evaluating proposals heightens the arbitrariness of the treatment GMT received.
The solicitation expressly stated that the contracting officer, prior to evaluation by the SSEB, would "verify that each proposal meets the requirements of the solicitation
To obtain a permanent injunction, a party must show that: (1) it has succeeded on the merits; (2) it will suffer irreparable harm if such relief is not granted; (3) the balance of the hardships tips in the movant's favor; and (4) an injunction will serve the public interest.
Because GMT has succeeded on the merits of its case, this factor weighs in GMT's favor. GMT has also suffered irreparable harm. This Court has repeatedly held that a protestor suffers irreparable harm if it is deprived of the opportunity to compete fairly for a contract.
In considering whether the balance of the hardships tips in favor of a protestor, a court must balance the potential harm to the protestor of not granting the injunction against the potential harm to both the Government and the awardees should the injunction be granted.
Van Dyke Decl. ¶ 4 (Sept. 7, 2011).
The Court recognizes that the current Army staff in Afghanistan cannot be diverted from crucial mission responsibilities.
Finally, the Court finds that an injunction will serve the public interest, noting that "[i]t is well established that there is an overriding public interest in preserving the integrity of the federal procurement process by requiring government officials to follow procurement statutes and regulations."
GMT requests award of its bid and proposal costs. Under the Tucker Act, this Court "may award any relief that the court considers proper," including declaratory and injunctive relief and bid and proposal preparation costs. 28 U.S.C. § 1491(b)(2). This provision of the Tucker Act, "through use of the permissive `may,' provides the Court of Federal Claims with discretion in fashioning relief."
Bid and proposal preparation costs are a form of reliance damages which are properly awarded when costs have been wasted.