In the United States Court of Federal Claims
                                          Bid Protest
                                        No. 15-1351C
             (Filed Under Seal: September 8, 2016 | Reissued: September 23, 2016)*



                                                 )
 MCCONNELL JONES LANIER &                        )     Keywords: Bid Protests; 28 U.S.C.
 MURPHY LLP,                                     )     § 1491(b)(1); Judgment on the
                                                 )     Administrative Record; Motion to
                        Plaintiff,               )     Supplement the Administrative Record;
                                                 )     Agency’s Technical Evaluation; Cost
        v.                                       )     Realism Analysis; FAR 15.305(a)(1); Best
                                                 )     Value Determination.
 THE UNITED STATES OF AMERICA,                   )
                                                 )
                        Defendant.               )
                                                 )


Gail Lindsay Simmons, Jackson Kelly, PLLC, Washington, DC, for Plaintiff. Eric Whytsell and
Hopewell H. Darneille III, Jackson Kelly, PLLC, Of Counsel.

Joshua D. Schnell, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice,
Washington, DC, with whom were Douglas K. Mickle, Assistant Director, Robert E. Kirschman,
Jr., Director, and Benjamin C. Mizer, Principal Deputy Assistant Attorney General, for
Defendant. David R. Koeppel, Savannah L. Wilson, and Dennis A. Adelson, Department of
Labor, Office of the Solicitor, Of Counsel.

                                     OPINION AND ORDER

KAPLAN, Judge.

       This post-award bid protest concerns a contract with the Department of Labor (DOL) to
provide comprehensive support services for the Shriver Job Corps Center. After DOL awarded
the contract to Alternative Perspective, Inc. (API), Plaintiff McConnell Jones Lanier & Murphy,
LLP (MJLM), a disappointed offeror, filed this action. MJLM asserts that the agency improperly
evaluated the technical aspects of the proposals, that it failed to conduct a proper cost realism
analysis, and that its best value determination was unreasonable.

_____________________
      *This Opinion was originally issued under seal, and the parties were given the
opportunity to request redactions. In light of the parties’ suggested redactions, filed on
September 22, 2016, the Opinion is now reissued with redactions indicated by brackets.

                                                 1
       Pending before the Court are the parties’ cross-motions for judgment on the
administrative record, as well as MJLM’s Motion to Supplement the Administrative Record and
the government’s Motion to Strike. For the reasons set forth below, MJLM’s Motion for
Judgment on the Administrative Record is DENIED, and the government’s cross-motion is
GRANTED. In addition, the government’s Motion to Strike is DENIED and MJLM’s Motion to
Supplement the Administrative Record is GRANTED for limited purposes, as set forth below.

                                         BACKGROUND

I.        The Solicitation

     A.      The Request for Proposals

         DOL administers the Job Corps program to help “young people learn a career, earn a high
school diploma or GED, and find and keep a good job.” See DOL, Job Corps, www.jobcorps.gov
(last visited September 8, 2016). The program operates 125 centers nationwide and serves over
60,000 students. DOL, Find a Job Corps Center, www.jobcorps.gov/centers.aspx (last visited
September 8, 2016). Each center works to address barriers to employment by providing students
with career development services that include “academic, career technical, career success and
independent living skills, career readiness training, and support services.” Administrative Record
(AR) Tab 6 at 46.

        On December 14, 2012, DOL issued a request for proposals (RFP) DOL12QA20003,
which solicited proposals to operate the Shriver Job Corps Center (Shriver), located in Boston,
Massachusetts. 

The RFP was a small business set-aside that contemplated the award of
a cost-plus-incentive-fee contract for a two-year base period with three one-year options. 

       According to the Statement of Work contained in the solicitation, the contractor would
“provide material, services, and all necessary personnel” to operate Shriver and serve
approximately 272 residential students and 28 nonresidential students. 

Specifically,
the contractor would do the following:

     (1) Provide academic, career technical, career success, employability, and independent
         living skills training.

     (2) Provide health care, counseling, and other support services as needed.

     (3) Conduct program operations in a setting that is clean, well maintained, and safe.

     (4) Assist youth in obtaining employment, additional education or training, or entry
         into the Armed Forces.

     (5) Provide support that prepares graduates to maintain long-term attachment to the
         labor market or further educational opportunities.



                                                 2
      (6) Integrate center operations with the local workforce development systems,
          employers, the business community, and community-based organizations.

instructed to submit a technical proposal, past performance information, a
business management proposal, and a management capability review. 

As relevant
to this bid protest, the technical proposal was broken into two parts, a technical approach
proposal and a staff resources proposal. 

157.

        Pursuant to the RFP, an offeror’s technical approach proposal would include the
following, among other things: 1) methods for conducting outreach and establishing community
partnerships; 2) admissions procedures; 3) strategies and methods for providing instruction and
meeting the needs of students during the Career Preparation and Career Development Periods; 4)
strategies to assist students in developing healthy lifestyles and to ensure a safe and healthy
living and learning environment for students; and 5) methods/strategies for managing the Career
Transition Period, to assist students in securing placement in their chosen fields. 

Offerors were advised that in addressing these matters, they were to “demonstrate [their]
understanding of the work and how [their] approach will meet the required outcomes and quality
indicators specified in the [solicitation].” 

        The staff resources proposal would consist of specified information such as
organizational charts, staff schedules, position descriptions, resumes, identification of key
personnel, an explanation of corporate services and support, a narrative detailing how staff
would be developed, retained, and rewarded, and a transition/phase-out plan. 

The
RFP did not specify any particular number of staff (or “FTE”) the contractor would be required
to assign to the Center.

      B.    The RFP’s Evaluation Criteria

         Under the solicitation, the agency would consider four factors in its evaluation of the
offerors’ proposals, which were, in descending order of importance: 1) technical approach; 2)
staff resources; 3) past performance; and 4) costs. This protest concerns the agency’s evaluation
of the first, second, and fourth evaluation factors. The third factor—past performance—is not at
issue.

        The RFP provided that both the technical approach and staff resources factors would be
evaluated by a panel, which would assign to each of the factors either an exceptional, very good,
satisfactory, marginal, or unsatisfactory rating. 

The RFP specified that “all ratings
are considered advisory only, and are not binding on the source selection official.” 

       The technical approach factor contained six subfactors, listed as follows in descending
order of importance: 1) career development period; 2) career transition services; 3) career
preparation period; 4) admissions; 5) outreach; and 6) administrative and management support
services. 

at 323.1–23.3. For each subfactor, the RFP provided that the agency’s
evaluation would be based upon: 1) the extent to which the proposal demonstrated an

                                                 3
“understanding of the work to be accomplished” and how that work will be performed in
accordance with the Job Corps program’s mission and policies; 2) how effectively the proposal
recognized and tailored the programs “to operate in the context of the State’s eligible population,
and the local and regional labor market;” and 3) how effective the proposal was “in offering
feasible strategies and methods to ensure the achievement of Job Corps’ specified outcomes and
quality indicators.” 

resources factor contained the following six subfactors, which are also listed
in descending order of importance: 1) adequacy of staffing; 2) corporate oversight and support;
3) proposed center director; 4) key personnel; 5) staff development and incentives; and 6)
transition/phase out plan. 

at 323.3–23.4. In general, the RFP stated that DOL would
rate these subfactors based on the appropriateness, adequacy, and quality of the proposed staffing
resources. 

provided that, in accordance with FAR 15.404-1, DOL would conduct a price
analysis “to assess whether the price proposed is fair and reasonable.” 

“In addition,”
the RFP stated, “a cost realism analysis shall be performed to determine the probable cost of
performance for each offeror.” Id.; see FAR 15.404-1(d)(2). Under the RFP, and again consistent
with the FAR, the agency’s cost realism analysis would “reflect the [g]overnment’s best estimate
of the cost of a contract that is most likely to result from the Offeror’s proposal.” AR Tab 6b at
323.5; FAR 15.404-1(d)(2)(i). The RFP further stated that “[t]he [g]overnment shall determine
the probable cost by adjusting each Offeror’s proposed cost to reflect any additions or reductions
in cost elements to realistic levels based on the results of the [g]overnment’s cost realism
analysis.” AR Tab 6b at 323.5.

        Finally, the RFP explained that DOL intended to award the contract to “the responsible
Offeror whose proposal is responsive to the solicitation and is determined to be the best value to
the [g]overnment.” 

at 178. “Selection of the best value,” the RFP stated, “is determined
through the process of evaluating the strengths and weaknesses of each Offeror’s technical
proposal in accordance with the evaluation criteria stated herein.” 

determining the best value, technical evaluation criteria are significantly more
       important than evaluated cost. The [g]overnment is more concerned with obtaining
       a superior technical proposal than making an award at the lowest evaluated cost.
       Thus, the closer or more similar in merit that the Offeror’s technical proposals are
       evaluated to be; the more likely the valuated cost may be the determining factor in
       selection for award. However, the [g]overnment will not make an award at a
       premium it considers disproportionate to the benefits associated with the evaluated
       superiority of one technical proposal over another. Evaluated cost will not be
       adjectivally rated. The [g]overnment will assess whether the strengths and
       weaknesses between or among competing technical proposals indicate superiority
       from the standpoint of what the difference might mean in terms of expected
       performance and what the evaluated cost to the [g]overnment would be to take
       advantage of the difference.

       Evaluation and Initial Award

      A.      Review by the Technical Evaluation Panel

         DOL received proposals from six offerors in response to the RFP. 

at 2749.
The agency then convened a technical evaluation panel (TEP) to review the technical approach,
staff resources, and performance factors and, consistent with the RFP’s evaluation scheme,
assign adjectival ratings to those factors. See 

at 3537. To that end, the TEP reviewed
the proposals, identified their strengths and weaknesses, developed narrative descriptions of the
proposals’ technical aspects, and assigned adjectival ratings. See 

at 3167–92
(MJLM’s TEP report); 

at 3315–36 (API’s TEP report).

         Based on the TEP’s initial evaluation, the agency established a competitive range that
included API and MJLM. 

at 2766. The agency then held discussions with both
offerors and received their final proposal revisions on June 16, 2015.1 See 

at 6702.
After reviewing the final proposals, the TEP found that both API’s and MJLM’s technical
approaches merited an overall “very good” rating. 

at 3540. The TEP awarded API a
“very good” for its staff resources proposal, while MJLM received a “satisfactory” rating for that
factor. 

of the TEP’s adjectival ratings for each subfactor is as follows:

               Evaluation Factor/Subfactor              API               MJLM
             Overall Technical Approach             Very Good           Very Good
             - Career Development Period            Very Good            Very Good
             - Career Transition Services           Very Good           Satisfactory
             - Career Preparation Services          Exceptional         Satisfactory
             - Admissions                           Very Good           Satisfactory
             - Outreach                             Very Good            Very Good
             - Admin. & Mgmt. Services              Very Good            Very Good
             Overall Staff Resources                Very Good           Satisfactory
             - Adequacy of Staffing                  Marginal           Satisfactory
             - Corp. Support & Oversight            Very Good           Satisfactory
             - Proposed Center Director             Very Good            Very Good
             - Key Personnel                        Very Good            Very Good
             - Development & Incentives             Very Good           Satisfactory
             - Transition Plan                      Satisfactory        Satisfactory


1
 The lengthy delay between the solicitation and the evaluation of the proposals was a result of a
series of protests filed by the incumbent contractor. See Adams & Assocs., Inc. v. United States,

(2013), aff’d, 

(Fed. Cir. 2014), reh’g en banc denied; Adams &
Assocs., Inc., B-409680 et al., 

(Comp. Gen. Apr. 22, 2014), reconsideration
denied, B-409680.2 et al. (Comp. Gen. Nov. 12, 2014); Adams & Assocs., Inc. v. United States,

(2015).


                                                5


at 3187; 

at 3332–33.

       B.      Cost Realism Report

       As noted above, offerors were required to submit a business management proposal in
response to the RFP. 

at 161–67. These proposals were reviewed by a cost evaluator
who compared the costs contained in the business management proposals submitted by API and
MJLM to an independent government cost estimate (IGCE). 

at 3425–96 (API Cost
Evaluation); 

at 3499–3534 (MJLM Cost Evaluation). That estimate was “based
primarily on historic prices paid for the operation of the Shriver Job Corps Center with
modifications for Center and market trends.” 

0 at 6713 (Award Determination).

        The cost evaluator concluded on the basis of her analysis that MJLM’s cost proposal
appeared reasonable to meet the contract goals. 

at 3418. On the other hand, she
found several “significant weaknesses” and some “deficiencies” in API’s cost proposal. 

at 3425–96; 

at 3418. As a result, she expressed concerns with API’s ability to
perform the contract at its proposed cost. 

at 3418.

       C.      Review by the Contracting Officer and Initial Award

        Contracting Officer (CO) Vogt served as the source selection authority on the initial
award. He reviewed the TEP’s report, as well as API’s and MJLM’s past performance
evaluations, and the cost realism report. He found that although “[b]oth API’s and MJLM’s
overall technical proposals were rated as Very Good. . . . [T]he overall technical proposal of API
[was] significantly stronger than MJLM.” 

at 3544. In reviewing the cost of each of the
proposals, CO Vogt did not directly address the concerns raised by the cost evaluator about
API’s proposal. He found, however, that API’s and MJLM’s “proposed costs [were] realistic in
their own right and no adjustments need[ed] to be made.” 

       In light of API’s stronger technical proposal and the fact that its cost was 1.5% lower
than MJLM’s, CO Vogt concluded that a “contract award to API is in the best interest of the
government and [offers] the best value in terms of technical quality, staff experience,
management and price.” 

Accordingly, on June 30, 2015, the agency awarded API the
contract. 

at 3548.

III.        GAO Protest and This Action

       A.      Protest Before GAO

        On July 14, 2015, MJLM filed a bid protest with GAO. See McConnell Jones Lanier &
Murphy, LLP, B-409681.3 et al., 

(Comp. Gen. Oct. 21, 2015). MJLM alleged
that the agency engaged in misleading discussions, improperly evaluated the offerors’ technical
proposals by favoring strategies characterized as “innovative” over proven approaches,
improperly evaluated MJLM’s past performance, conducted an improper organizational conflict
of interest (OCI) evaluation, and made a selection that was tainted by bias. 

                                                6
        GAO found that MJLM’s arguments “provide[d] no basis on which to sustain the
protest.” 

MJLM’s challenge to the agency’s evaluation of the technical proposals,
concluding that MJLM “fail[ed] to demonstrate that the evaluation was not in accord with the
solicitation.” 

GAO also specifically addressed MJLM’s argument that the agency
improperly considered innovation as an unstated evaluation criterion. It found that “the agency’s
consideration of the innovations proposed . . . was consistent with the stated evaluation criteria”
because “innovative approaches proposed by an offeror to accomplish a specified task logically
relate[] to the effectiveness of the offeror’s technical approach.” 

    B.       This Action

         On November 10, 2015, MJLM filed the instant bid protest in the Court of Federal
Claims. See Compl., ECF No. 1. MJLM’s original complaint raised many of the same arguments
that it had raised unsuccessfully before GAO, including arguments that the agency failed to
conduct a proper OCI evaluation, that the agency conducted misleading discussions with MJLM,
that the agency improperly evaluated MJLM’s past performance and technical proposals, and
that, as a result of these failures, the agency’s best-value analysis was flawed. See 

        In response to MJLM’s complaint, the government filed a Notice of Corrective Action on
December 15, 2015. ECF No. 24. The government stated in the Notice that DOL intended to
conduct a new organizational conflict of interest evaluation, draft a new source-selection
decision, and confirm or make a new award decision. 

request of the government,
the Court stayed the case for sixty days to permit the government to complete the corrective
action. See Order, ECF No. 23. The Court subsequently extended the stay until April 15, 2016.
ECF Nos. 27 and 29.

    C.     DOL’s Corrective Action and New Award Decision

        On April 15, 2016, the parties filed a joint status report notifying the Court that the
agency had completed its corrective action. ECF No. 31. As a result of a new OCI investigation,
the agency found that “neither MJLM nor API had an OCI by virtue of having obtained access to
nonpublic information that was competitively useful.” AR Tab 60 at 6700. CO Matz, the Chief
of the Division of Job Corps Procurement, who was designated as the new source selection
authority, issued a decision awarding the contract to API. 

In the new award
determination memo, CO Matz “largely affirmed the rationale” in the original award memo. 

        For purposes of the issues before the Court, the principal difference between the initial
award decision and the award decision executed by CO Matz involved the treatment of the
evaluator’s cost realism analysis. In the original award decision, CO Vogt found both offerors’
cost proposals reasonable and realistic without explicitly discussing the specific concerns the
cost evaluator raised regarding API’s proposal. See 

. In the new decision memo, CO
Matz “independently review[ed] both offerors’ final revised business management proposals and

2
 During the course of the litigation, the original contracting officer was assigned to a new
position at DOL. As a result, Ms. Matz, who was familiar with the procurement, stepped in to act
as the CO and source selection authority. See AR Tab 60 at 6699–6700.
                                                 7
their respective evaluation[s].” 

0 at 6700. Based upon that review, she rejected the cost
evaluator’s recommendations because, she concluded, the evaluator had “marked every deviation
from the [IGCE] as an item of concern” and had recommended adjustments to those line items
“without reference to the offeror’s technical approach or other considerations.” 

According to CO Matz, she “took a closer look and found that variations [from the IGCE]
generally reflect[ed] the unique technical approaches of the offerors.” 

accordingly
concluded, in agreement with CO Vogt, that “the costs proposed by both MJLM and API were
fair, reasonable, and realistic.” 

         After reviewing the final proposals and the TEP’s findings, CO Matz found that “API’s
Technical Proposal [was] significantly stronger than MJLM’s.” 

She also determined
that “the difference in Cost between the two offerors did not serve as a significant discriminator.”

As a result, CO Matz concluded that “contract award to API is in the best interest of
the [g]overnment and offers the best value in terms of technical approach, staff resources, past
performance, and cost.” 

        In light of the agency’s corrective action, MJLM amended its complaint. See Am.
Compl., ECF No. 39. In its amended complaint, MJLM alleges that the agency unreasonably
evaluated the technical proposals submitted by MJLM and API, that it failed to conduct a proper
cost realism analysis, and that, as a result, the agency’s best value determination and award of
the contract to API was arbitrary, capricious, and not supported by the record. See id.3

       The government filed the administrative record on April 15, 2016, and the parties
subsequently filed cross-motions for judgment on the administrative record. On August 17, 2016
the Court heard oral argument on those motions, as well as on the government’s Motion to Strike
the Declaration of Stephen Kilary (which MJLM submitted with its Response Brief), and
MJLM’s Motion to Supplement the Administrative Record with that declaration.

                                          DISCUSSION

I.     Jurisdiction

        The Court of Federal Claims has “jurisdiction to render judgment on an action by an
interested party objecting 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). A party is an “interested party” with standing to bring suit under
28 U.S.C. § 1491(b)(1) if the party “is an actual or prospective bidder whose direct economic
interest would be affected by the award of the contract.” Orion Tech., Inc. v. United States, 

, 1348 (Fed. Cir. 2013). A bidder has a direct economic interest if the alleged errors in
the procurement caused it to suffer a competitive injury or prejudice. Myers Investigative & Sec.

3
  MJLM’s amended complaint also alleged that the agency conducted misleading discussions
that caused MJLM to increase its proposed price. See Am. Compl. ¶¶s 207–09. However, MJLM
did not provide any support for this allegation in its motion for judgment on the administrative
record. Because MJLM failed to develop this argument or provide any evidence that the agency
conducted misleading discussions, the Court deems the argument waived. See SmithKline
Beecham Corp. v. Apotex Corp., 

, 1319 (Fed. Cir. 2006) (finding that “arguments
not raised in the opening brief are waived”).
                                                 8
Servs., Inc. v. United States, 

, 1370 (Fed. Cir. 2002) (holding that “prejudice (or
injury) is a necessary element of standing”).

        In a post-award bid protest, the protestor has suffered prejudice if it would have had a
“‘substantial chance’” of winning the award “but for the alleged error in the procurement
process.” Info. Tech. & Applications Corp. v. United States, 

, 1319 (Fed. Cir.
2003) (quoting Alfa Laval Separation, Inc. v. United States, 

, 1367 (Fed. Cir.
1999)); see also Weeks Marine, Inc. v. United States, 

, 1359 (Fed. Cir. 2009); Rex
Serv. Corp. v. United States, 

, 1308 (Fed. Cir. 2006). In other words, the
protestor’s chance of securing the award absent the alleged error “must not have been
insubstantial.” Info. 

.

        The government does not dispute that MJLM is an “interested party” in this case. MJLM
was, of course, an actual offeror for the contract in question; and, as noted above, MJLM was the
only other offeror in the competitive range for the award of the contract. See AR Tab 16 at 2766.
MJLM challenges the agency’s rationale for awarding the contract to API on a number of
grounds which, if found meritorious, would require, at the least, a re-evaluation of the offerors’
proposals. It follows, therefore, that MJLM had a substantial chance of winning the award but for
the errors it alleges. See Impresa Construzioni Geom. Domenico Garufi v. United States, 

(Fed. Cir. 2001) (finding standing where “the government would be obligated to rebid
the contract, and [the protestor] could compete for the contract once again”).

II.    Standard for Granting Judgment on the Administrative Record

        Pursuant to RCFC 52.1, the court reviews an agency’s procurement decision based on the
administrative record. Bannum, Inc. v. United States, 

, 1354 (Fed. Cir. 2005). The
court makes “factual findings under RCFC [52.1] from the record evidence as if it were
conducting a trial on the record.” 

Thus, “resolution of a motion respecting the
administrative record is akin to an expedited trial on the paper record, and the Court must make
fact findings where necessary.” Baird v. United States, 

, 116 (2007). The court’s
inquiry is “whether, given all the disputed and undisputed facts, a party has met its burden of
proof based on the evidence in the record.” A&D Fire Prot., Inc. v. United States, 

, 131 (2006). Unlike a summary judgment proceeding, genuine issues of material fact will
not foreclose judgment on the administrative record. Bannum, 

.

III.   Standard of Review in Bid Protest Cases

       The court reviews challenges to a contract award under the same standards used to
evaluate an agency action under the Administrative Procedure Act, 5 U.S.C. § 706. See 28
U.S.C. § 1491(b)(4) (stating that “[i]n any action under this subsection, the courts shall review
the agency’s decision pursuant to the standards set forth in section 706 of title 5”). Thus, to
successfully challenge an agency’s procurement decision, a plaintiff must show that the agency’s
decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A); see also Bannum, 

. This “highly deferential”
standard “requires a reviewing court to sustain an agency action evincing rational reasoning and
consideration of relevant factors.” Advanced Data Concepts, Inc. v. United States, 

1054, 1058 (Fed. Cir. 2000) (citing Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc.,

, 285 (1974)).

        In a bid protest action, the disappointed offeror “bears a heavy burden” in attempting to
show that a procuring agency’s decision lacked a rational basis. Impresa Construzioni 

. And “the protestor’s burden is greater in [a] negotiated procurement, as here,
than in other types of bid protests because ‘the contracting officer is entrusted with a relatively
high degree of discretion.’” Glenn Defense Marine (ASIA), PTE Ltd. v. United States, 

, 907 (Fed. Cir. 2013) (quoting Galen Med. Assocs., Inc. v. United States, 

,
1330 (Fed. Cir. 2004)). Further, the court “accords contracting officers an even greater degree of
discretion when the award is determined based on the best value to the agency.” Glenn 

(internal citations omitted); see also Croman Corp. v. United States, 

, 1363 (Fed. Cir. 2013); Galen Med. 

; Banknote Corp. of Am. Inc.
v. United States, 

, 1355 (Fed. Cir. 2004); Am. Tel. & Tel. Co. v. United States,

, 1379 (Fed. Cir. 2002); Advanced Data 

; E.W. Bliss
Co. v. United States, 

, 449 (Fed. Cir. 1996); Lockheed Missiles & Space Co. v.
Bentsen, 

, 958–59 (Fed. Cir. 1993). In short, an agency’s contract award is “least
vulnerable to challenge” when it is based on a best-value determination. PlanetSpace Inc. v.
United States, 

, 125 (2010) (citing Galen Med. 

).

         Given this highly deferential standard of review, the court’s function is limited to
“determin[ing] whether ‘the contracting agency provided a coherent and reasonable explanation
of its exercise of discretion.’” Impresa 

–33 (quoting Latecoere
Int’l, Inc. v. U.S. Dep’t of Navy, 

, 1356 (11th Cir. 1994)). To prevail, the agency
need only articulate a “rational connection between the facts found and the choice made;” and
the court will “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 

, 43 (1983)
(quotations omitted). Thus, the agency’s action is vulnerable to challenge only if the plaintiff can
show that the agency “entirely failed to consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence before the agency, or [made a
decision that] is so implausible that it could not be ascribed to a difference in view or the product
of agency expertise.” Ala. Aircraft Indus., Inc.–Birmingham v. United States, 

,
1375 (Fed. Cir. 2009) (alteration in original) (quoting State 

).

IV.    Challenges to Evaluation of Technical Proposals

        As described above, the technical proposals were evaluated with respect to two factors:
technical approach and staffing resources. Based on the recommendations of the TEP, which the
CO endorsed, both MJLM and API received overall ratings of “very good” on the technical
approach factor. MJLM, however, received a “satisfactory” rating on three technical approach
subfactors (career transition, career preparation, and admissions) for which API received higher
ratings. With respect to the staff resources factor overall, API received a rating of “very good”
and MJLM received a rating of “satisfactory.” AR Tab 24 at 3540–43; 

at 3187; 

at 3332–33.




                                                 10
        Based on her “review of the relative strengths and weaknesses identified [by the TEP], as
well as the ratings provided, and the overall benefits offered by the offerors,” CO Matz found
that API’s technical proposal was “significantly stronger than MJLM’s.” 

0 at 6710.
MJLM challenges this finding as well as the reasonableness of the ratings assigned to the
technical approach and staffing resources factors. For the reasons set forth below, the Court finds
MJLM’s arguments unpersuasive.

    A.     Technical Approach

        MJLM poses several interrelated arguments to challenge the reasonableness of DOL’s
evaluation of the offerors’ technical approach proposals. The gravamen of those arguments is
that the adjectival ratings the agency assigned to the proposals (on both an overall and subfactor
by subfactor basis) are presumptively unreasonable because the TEP identified a substantially
greater number of strengths and several fewer weaknesses in MJLM’s technical approach
proposal than were identified in API’s proposal. Pl.’s Opp’n to Def.’s Cross-Mot. for J. on the
Admin. R. (Pl.’s Opp’n) at 16, ECF No. 56. MJLM contends that extra scrutiny of the ratings is
warranted given what it views as a discrepancy between the raw number of strengths and
weaknesses identified as to each proposal and the adjectival ratings assigned. MJLM suggests
that these discrepancies occurred because DOL improperly used “innovation” as an “unstated
evaluation criteria” that served as a “secret, magic key” to higher ratings. 

        It is axiomatic that “[t]he evaluation of proposals for their technical excellence or quality
is a process that often requires the special expertise of procurement officials, and thus reviewing
courts give the greatest deference possible to these determinations.” One Largo Metro, LLC v.
United States, 

, 74 (2013) (alteration in original) (quoting Beta Analytics Int’l,
Inc. v. United States, 

, 395 (2005)). “In particular, technical ranking decisions
made by the agency are ‘minutiae of the procurement process . . . which involve discretionary
determinations of procurement officials that a court will not second guess.’” Textron, Inc. v.
United States, 

, 286 (2006) (quoting E.W. Bliss 

), appeal
dismissed sub nom. Textron, Inc. v. Ocean Tech. Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007);
see also Elec. On-Ramp, Inc. v. United States, 

, 522 (2015).

       These principles suggest that absent a facial conflict between the adjectival ratings
assigned and the narrative justifications the agency provided (or some other dramatic internal
inconsistency, e.g., FirstLine Transp. Sec., Inc. v. United States, 

, 377 (2011)),
the Court must grant great deference to the decisions of agency experts as to whether a particular
proposal’s strengths and weaknesses support a “very good” rather than “satisfactory” rating, or
an “exceptional” rather than “very good” rating.4 This is particularly true where, as here, the RFP

4
  The court found such a dramatic inconsistency in FirstLine, where it observed that it could “not
fathom how the [agency] would have reached the conclusion that the [protestor’s] proposal was
only ‘moderately better’ than the [awardee’s] proposal” where the awardee’s proposal had one
strength and one weakness, while the protestor’s had thirty-three strengths and no 

. For the reasons set forth in the text, there is no similar facial inconsistency in
this case between the number of strengths assigned to each offeror’s proposal, and the adjectival
ratings assigned.
                                                  11
does not define what is required for a proposal to be rated “exceptional,” “very good,”
“satisfactory,” “marginal,” or “unsatisfactory.” See AR Tab 6 at 173.

        The Court is not persuaded by MJLM’s argument that increased scrutiny of the adjectival
ratings assigned is warranted in light of MJLM’s tally of the number of strengths and weaknesses
the TEP identified for each offeror. First, it bears noting that neither the TEP nor the CO
undertook the effort of counting the raw number of strengths and weaknesses assigned to each
offeror’s proposal.5 That is not surprising given that, as even MJLM acknowledges, a simple
comparison of the number of strengths or weaknesses identified in each proposal could not
reasonably serve as the basis for determining either their adjectival ratings or relative value. See
Pl.’s Opp’n at 15–16. The analysis to be undertaken under the RFP was a qualitative, not
quantitative one. Thus, the RFP specified that DOL would “assess whether the strengths and
weaknesses between or among competing technical proposals indicate superiority from the
standpoint of what the difference might mean in terms of expected performance and what the
evaluated cost to the [g]overnment would be to take advantage of the difference.” AR Tab 6 at
178. And common sense counsels that the strengths and weaknesses identified in each proposal
are not fungible—some strengths would be more important than others to the Shriver Center’s
success, and some weaknesses would pose greater risks.

        Nor is it appropriate for the Court to second guess the weight the agency gave to the
various strengths and weaknesses the TEP and CO Matz identified when they decided the
adjectival ratings to be assigned to the technical approach factor and its component subfactors.
The agency, not the Court, possesses the necessary expertise to determine the most effective
strategies and methods for the successful operation of the Shriver Center. For that reason, the
Court defers to the agency’s exercise of its discretion to evaluate which strengths are most likely
to lead to the achievement of the objectives and outcomes that DOL has set, and which
weaknesses pose the greatest risks to the government.

        In this case, the extensive narrative comments contained in the highly detailed TEP
reports and the award decision provide ample support for the agency’s assignment of an overall
“very good” rating for both proposals, given that both proposals offered effective strategies to
meet the goals of the solicitation, and that both proposals contained many strengths and very few
weaknesses. AR Tab 21a at 3167; 

at 3315–32. Similarly, both the TEP report and the
award decision provide ample explanation of the bases for the adjectival ratings assigned to the
subfactors for each proposal and for the CO’s ultimate decision that API’s proposal was
technically superior. See 

at 6710.

     In that regard, the Court finds no merit to MJLM’s argument that—to the extent that
DOL gave higher ratings to API based on the fact that its proposal contained more innovative


5
  In fact, the government and MJLM have each done their own tallies of strengths and
weaknesses which resulted in discrepant computations. MJLM claims that it counted 92
strengths and 8 weaknesses overall in API’s technical approach, and 151 strengths and 4
weaknesses in MJLM’s technical approach. Pl.’s Mot. at 10–11. The government, on the other
hand, counted 121 strengths and 3 weaknesses for MJLM, and 76 strengths and 6 weaknesses for
API. Def.’s Cross-Mot. at 15–16.
                                                12
strategies and methods than did MJLM’s—the agency employed an “unstated evaluation
criteria,” in violation of FAR 15.305(a). Pl.’s Mot. 11–16. Thus, the FAR requires agencies to
“evaluate competitive proposals and then assess their relative qualities solely on the factors and
subfactors specified in the solicitation.” FAR 15.305(a). An agency is prohibited from relying on
“undisclosed evaluation criteria when evaluating proposals.” Acra, Inc. v. United States, 44 Fed.
Cl. 228, 293 (1999). However, the “solicitation need not identify each element to be considered
by the agency during the course of the evaluation where such element is intrinsic to the stated
factors.” ACC Contr. Co., Inc. v. United States, 

, 671–72 (2015) (quoting NEQ,
LLC v. United States, 

, 48 (2009)).

        In this case, the RFP indicated that each offeror’s proposal would be evaluated to
determine how effective its strategies and methods would be “to ensure the achievement of Job
Corps specified outcomes and quality indicators.” AR Tab 6 at 173–75. MJLM argues that
‘“innovative’ approaches and/or solutions are not reasonably and logically encompassed within
the stated evaluation criteria” because the RFP emphasizes “successful performance;”
accordingly, MJLM contends, the RFP “clearly favors proven strategies, staffing, and programs
over ‘innovative,’ untested strategies, staffing, and programs.” 

disagrees. The dictionary defines “innovate” as to “bring in new methods,
ideas, etc.” Oxford English Reference Dictionary 726 (Rev. 2d Ed. 2002). As GAO observed
when rejecting this very same argument, “innovative approaches proposed by an offeror to
accomplish a specified task logically relate[] to the effectiveness of the offeror’s technical
approach.” See McConnell Jones Lanier & Murphy, LLP, 

at *7. And
methods and ideas that are new (or “innovative”) are not necessarily “untested” or unreliable.
Indeed, in noting the innovative aspects of API’s overall technical approach the TEP observed
that there was “some evidence or documentation to support the likelihood that the ideas were
feasible and would be effective in delivering outcomes and quality indicators.” AR Tab 22a at
3315. The CO similarly noted that API had “provided evidence that demonstrated” that their
proposed “innovative” strategies “had produced successful outcomes.” 

0 at 6706.

        Further, it is certainly within the agency’s discretion to decide that—in the interest of
greater efficiency and the accomplishment of its goals—it will assign greater value to a proposal
that contains new methods or strategies that appear promising to the agency, even if those
methods and strategies have not yet been tested. And such a proposal might reasonably be
viewed as more likely to lead to improved outcomes than a proposal that uses existing strategies
and methods, even if those strategies and methods are “tried and true.”

       Nor does the agency’s evaluation of the proposals reflect that undue weight was given to
innovation as a basis for distinguishing API’s proposal from MJLM’s. In its discussion of
MJLM’s proposal, the TEP wrote that MJLM “primarily described” what the TEP characterized
as a “well-performing approach” that was already in place at the Shriver Center. 

at
3167. The TEP and the CO assigned MJLM an overall “very good” rating on its technical
approach. Thus, the TEP (and the CO) did not discount the value of the “tried and true” approach
represented by MJLM’s proposal. They simply found API’s proposal superior because, among




                                                13
other reasons, it contained innovations that the agency apparently believed might enhance the
Center’s effectiveness.6

        Finally, MJLM argues that, even if it was reasonable for the agency to consider the
innovativeness of the technical approach proposals, DOL’s consideration of the value of
innovation to the offerors’ proposals was “inconsistent, unreasonable, arbitrary, and capricious.”
Pl.’s Mot. at 17. MJLM points to the fact that the agency rated it as “satisfactory” on the career
preparation period subfactor notwithstanding that the TEP identified a number of elements of
MJLM’s proposal which went above and beyond what was required by the Job Corps Policy and
Requirements Handbook. Pl.’s Mot. 17–18. API, on the other hand, received an “exceptional”
rating on this subfactor because the agency concluded that its proposal “was innovative, student-
oriented, and went over and beyond the [g]overnment’s requirements.” AR Tab 22a at 3321.
MJLM argues that the “only difference between the two proposals is the characterization of
API’s proposal as ‘innovative’ and ‘student-oriented.’” Pl.’s Mot. at 18. But contrary to MJLM’s
argument, the panel did not simply characterize API’s proposal with respect to the career
preparation period as “innovative” and “student oriented;” it listed numerous specific learning
strategies included in the proposal which justified the higher rating. AR Tab 22a at 3315.

        MJLM also claims inconsistent treatment in the consideration of innovation with respect
to the rating of the admissions subfactor. It points out that the panel gave MJLM a “satisfactory”
rating for the subfactor and noted that MJLM did not “propose sufficient innovative approaches
to support a higher rating.” Pl.’s Mot. at 18; AR Tab 21a at 3171–72. MJLM complains that
API’s “admission” subfactor, on the other hand, was rated “very good,” despite the fact that none
of the TEP’s comments noted any “innovative” approaches. Pl.’s Mot. at 18; AR Tab 22a at
3318. But notwithstanding the fact that API’s admissions proposal was not characterized as
“innovative,” the panel report identifies a number of strengths in API’s proposal that were not
present in MJLM’s and which could reasonably support a higher “very good” rating. AR Tab 22a
at 3318 (noting “extensive Job Corps experience of proposed staff;” use of peer mentors;
incentives for attainment of admissions goals; and other considerations).

       In short, the record reflects that the agency gave careful consideration to each offeror’s
technical approach proposal and supplied a detailed explanation of the adjectival ratings it
assigned to each proposal for each subfactor. Further, there was nothing improper about the
agency attributing greater value to aspects of API’s proposal that were innovative in nature.
Given the high degree of deference afforded to an agency’s evaluation of proposals for their
technical quality, MJLM’s arguments do not supply an adequate basis for this Court to overturn
DOL’s evaluation of the technical approach subfactor.


6
  MJLM also claims that “it remains unclear what criteria were used by DOL to determine which
strategies were ‘innovative’” given that the term was not defined in the RFP. Pl.’s Mot. at 21. It
points to a strategy proposed by API which the agency described as “innovative” but which was
“known to the Job Corps Community since February 2011.” 

It is plain to the Court,
however, that an approach that was “known” in 2011 can still be considered innovative several
years later if it had not been used before at the Shriver Center. And because it lacks the necessary
expertise to do so, the Court declines MJLM’s invitation to second guess the agency’s
characterization of particular methods and strategies as “innovative.”
                                                14
    B.     Staff Resources

        As noted, MJLM also challenges DOL’s evaluation of API’s technical proposal with
respect to the staff resources factor. It asserts that the agency acted unreasonably when it
assigned API a “very good” rating on staff resources, “despite its having been rated as only
[m]arginal on the most important subfactor, Adequacy of Staffing.” Pl.’s Mot. at 23. In addition,
again relying upon the relative number of strengths and weaknesses assigned to each offeror’s
proposal, this time with respect to staff resources, MJLM argues that it was unreasonable,
arbitrary, and capricious for the agency to assign it only a “satisfactory” rating while assigning
API a higher “very good” rating. 

         The Court finds these arguments unpersuasive. Thus, the TEP found that API’s staff
resources proposal “demonstrated a good understanding of the organization, qualifications,
staffing and support needed to deliver the Job Corps Program.” 

at 3335. To support
this conclusion, the report stated that “[a]ll proposed staff members appear[ed] to be well
qualified and either met or exceeded position descriptions and [solicitation] requirements.” 

on numerous identified strengths, the TEP assigned API “very good” ratings as to
four of the six staffing resources subfactors (corporate oversight and support; proposed center
director; key personnel; and staff development and incentives).7 

at 3333. Thus, the
TEP report noted that API’s President and COO each had over twenty years of Job Corps
experience, that its proposed Center Director had fourteen years of Job Corps experience, and
that its Chief Financial Officer had over thirty years of government contracting experience. 

The TEP also noted that all of the proposed key staff “had Job Corps experience and
appeared to be well qualified for the positions for which they were proposed.” 

report identified as strengths aspects of API’s proposal that provided for staff training, staff
awards, and staff team building.

        MJLM emphasizes, however, that the TEP found a weakness in API’s proposal based on
the fact that the total number of staff API proposed was “4.65 FTEs below the [IGCE]” 

at 3335; see also 

(identifying several “[m]ajor staff inconsistencies with the
government’s estimate” that were included in API’s initial proposal, including among others that
“total academic staffing” was 3 FTE lower than the estimate; a higher level of CTT staffing; and
Medical/Dental staffing that was 1.275 FTEs below the IGCE). And, as MJLM notes, it was this
discrepancy between the number of FTEs in API’s proposal and the number in the government’s
estimate that apparently led the TEP to assign API a “marginal” rating with respect to the
adequacy of staffing subfactor. 

MJLM argues that it was “flatly contradictory” for
the agency to find that API demonstrated a “good understanding” of the staffing needed to
support the Shriver Center notwithstanding that API received a “marginal” rating on the
“adequacy of staffing” subfactor. Pl.’s Mot. at 24–25. It further argues that—in any event—the
agency failed to adequately explain its basis for discounting the “marginal” rating assigned. 

received a satisfactory rating for the least important subfactor, “transition/phase out.” AR
Tab 22a at 3333.
                                                 15
       The Court disagrees. First, notwithstanding the “marginal” rating assigned to the
adequacy of staffing subfactor, API’s proposed staffing levels were only 4.65 FTE lower than the
government’s estimate, or 126.05 FTEs as compared to the total government’s estimate of 130.7
FTEs. CO Matz apparently considered this shortfall less significant than did the TEP. Compare
AR Tab 22a at 3333 (TEP characterizes inconsistencies as “major”), with AR Tab 60 at 6710
(CO notes “some” inconsistencies between API proposal and government’s estimate). And
notably, the RFP did not require the offerors to propose any particular number of staff for the
Center; nor did the agency provide its staffing estimate to the offerors. See AR Tab 60 at 6714.

        Moreover, the Court rejects MJLM’s argument that the agency failed to provide an
explanation for why it assigned API an overall “very good” rating as to the staffing resources
factor notwithstanding the “marginal” rating assigned to the adequacy of staffing resources
subfactor. As noted above, an agency is only required to articulate a “rational connection
between the facts found and the choice made” and the Court will “uphold a decision of less than
ideal clarity if the agency’s path may reasonably be discerned.” State 

(quotations omitted). In this case, the Court can discern from the TEP’s report and CO Matz’s
award decision that API’s overall rating of “very good” on the staffing resources factor was
grounded in the “very good” ratings that the TEP assigned to four of the other five staffing
resources subfactors and in the underlying strengths that supported those ratings. Further, the
CO’s award decision suggests that the agency ultimately concluded that the staffing
discrepancies did not reflect an insufficient understanding of the solicitation’s requirements, but
rather a different technical approach to meeting them. See AR Tab 60 at 6713 (CO noting that
she “took a closer look” where proposals “differed markedly from the [g]overnment’s estimate”
and found that “these variations generally reflect[ed] the unique technical approaches of the
offerors, rather than insufficient understanding” of the solicitation requirements).

         For reasons similar to those set forth above, the Court rejects MJLM’s second argument
that the ratings awarded to API and MJLM “run counter to the underlying technical evaluations,
as evidenced by the number of strengths and weaknesses assigned to the two offerors.” Pl.’s Mot.
at 26–27. As described above, the raw number of strengths and weaknesses identified as to each
proposal is not determinative of whether the adjectival ratings assigned are reasonable because
not all strengths are equally valuable and not all weaknesses present the same risks. Thus, the
fact that the TEP identified numerous strengths in MJLM’s proposal and concluded that MJLM’s
staffing resources proposal demonstrated its understanding of the work and offered effective
strategies to meet outcomes and objectives is not conclusive. See AR Tab 21a at 3187–91.
Indeed, the TEP gave MJLM “satisfactory” ratings with respect to two of the subfactors
(corporate oversight and support, and staff development and incentives) for which it had rated
API “very good;” and this apparently resulted in a lower overall rating for MJLM of
“satisfactory.”

         While neither the CO nor the panel set forth an explicit reason why MJLM received
lower ratings for these subfactors, the Court notes that eight of the strengths assigned to MJLM’s
staff resources proposal involved what could just as easily been identified as a single strength—
the use of staffing schedules that went beyond the requirements of the RFP. 

Further, the panel found a weakness in MJLM’s proposal in that it was unclear how incentive
earnings would be awarded. 

And while the TEP observed that staff training and

                                                16
development under API’s proposal exceeded the requirements of the Job Corps Handbook, 

at 3333; see also 

(identifying proposed training needs assessment and
training program proposed by API as a strength), MJLM’s proposal merely adopted the
incumbent contractor’s existing training program. 

at 3188. The TEP accordingly did
not err when it concluded that “[c]onsidering the positive, but primarily tried and true responses
and proposals, [MJLM’s] overall rating for Staff Resources is Satisfactory.” Id.8
         In short, MJLM’s challenges to the ratings assigned for the staff resources factor are
unpersuasive for much the same reasons that the Court rejected MJLM’s arguments with respect
to the technical approach factor. Thus, the record reflects careful consideration of both offerors’
staff resources proposals, detailed explanations of the adjectival ratings assigned, and a listing of
what the agency saw as the strengths and weaknesses of each proposal. These determinations lie
squarely within the expertise of the agency and the Court has no basis for second guessing them.
Therefore, MJLM’s challenge to the agency’s finding that API’s technical proposal provided
greater benefits to the government than MJLM’s technical proposal is without merit.

V.        Challenge to Cost Realism Analysis

        In addition to its challenge to the agency’s evaluation of its technical proposal, MJLM
contends that the agency did not conduct a proper cost realism analysis. It argues that CO Matz
failed to adequately explain why she rejected the original cost evaluator’s report; that CO Matz’s
own cost realism analysis was flawed; and that she erred by not adjusting API’s costs upward to
reflect additional staff included in the government’s estimate. For the reasons set forth below, the
Court finds that MJLM has failed to show that it was prejudiced by any alleged errors with
respect to the cost realism analysis and that, in any event, MJLM’s arguments lack merit.

     A.      Cost Realism Requirement

         FAR 15.305(a)(1) provides that “[w]hen contracting on a cost-reimbursement basis,
evaluations shall include a cost realism analysis to determine what the Government should
realistically expect to pay for the proposed effort, the offeror’s understanding of the work, and
the offeror’s ability to perform the contract.” See also AR Tab 6 at 177 (RFP stating that the
government would conduct a cost analysis to determine cost reasonableness and cost realism).
Put another way, a cost realism analysis (frequently referred to as a “price realism” analysis), is
used “to determine whether the estimated proposed cost elements are realistic for the work to be
performed; reflect a clear understanding of the requirements; and are consistent with the unique


8
  According to MJLM, CO Matz “ignored four and a half paragraphs” of the TEP Report
describing MJLM’s strengths, as evidenced by the fact that her award determination letter
reproduced only the first portion of the TEP’s evaluation summary of MJLM’s Staff Resources
strengths. Pl.’s Mot. at 29–31. The Court disagrees that CO Matz’s failure to include a recitation
of this information suggests that she ignored it. To the contrary, at the end of her truncated
summary of the TEP’s evaluation, she cross-referenced the entire report, see AR Tab 60 at 6710,
as she did throughout her discussion of the technical proposals. Particularly given the
presumption of good faith and regularity that is applicable here, see Info. 

n.2, the Court declines to infer that CO Matz ignored any part of the TEP report in
conducting her evaluation.
                                                 17
methods of performance and materials described in the offeror’s technical proposal.”
FAR 15.404-1(d)(1); see also Afghan Am. Army Servs. Corp. v. United States, 

,
355 (2009).

        Another purpose of the cost realism analysis is to determine “the probable cost of
performance for each offeror,” which “may differ from the proposed cost and should reflect the
Government’s best estimate of the cost of any contract that is most likely to result from the
offeror’s proposal.” FAR 15.404–1(d)(2)(i). The probable cost so determined is used for
evaluation purposes to determine the best value. Id.; see also AR Tab 6 at 177 (RFP stating that
“the [g]overnment shall determine the probable cost of performance for each offeror” and that
“the [g]overnment shall determine the probable cost by adjusting each offeror’s proposed cost to
reflect any additions or reductions in cost elements to realistic levels based on the results of the
[g]overnment’s cost realism analysis”).

   B.      Scope of Review

        It is well established that the “extent of a price realism analysis for each procurement can
vary, and generally is within the discretion of the agency.” FCN, Inc. v. United States, 115 Fed.
Cl. 335, 375 (2014) (citations omitted); see also Afghan Am. Army 

–58
(observing that “the nature and extent of a price realism analysis, as well as an assessment of
potential risk associated with a proposed price, are generally within the sound exercise of the
agency’s discretion . . . . [u]nless the agency commits itself to a particular methodology in a
solicitation”); Ceres Envtl. Servs., Inc. v. United States, 

, 303 (2011) (“The nature
and extent of an agency’s price realism analysis, as well as an assessment of potential risk
associated with a proposed price, are matters within the agency’s discretion.”). Where, as here,
the solicitation does not set forth a particular methodology for the cost realism analysis, the
agency “enjoy[s] broad discretion” in conducting it. Northeast Military Sales, Inc. v. United
States, 

, 118 (2011) (internal quotations omitted); see also FAR 15.404-1
(stating that “the contracting officer is responsible for evaluating the reasonableness of the
offered prices” and that “the complexity and circumstances of each acquisition should determine
the level of detail of the analysis required”).

        In light of the broad discretion an agency possesses in determining methodology, the
court’s scope of review of an agency’s cost realism determination is very narrow. To overturn
the determination, “[a] plaintiff must establish that [the agency’s decision] lacked a rational
basis.” Westech Int’l, Inc. v. United States, 

, 286 (2007) (citing JWK Int’l Corp.
v. United States, 

, 393 (2001) and CTA, Inc. v. United States, 

,
693 (1999)); see also A-T Sols., Inc. v. United States, 

, 180 (2015) (observing
that “the Court will not overturn a cost realism determination unless the plaintiff demonstrates
the absence of a rational basis for the agency’s decision”). As GAO observed in Info. Ventures,
Inc., “[a]n agency’s cost realism analysis requires the exercise of informed judgment . . . . The
analysis need not achieve scientific certainty; rather, the methodology employed must be
reasonably adequate and provide some measure of confidence that the agency’s conclusions
about the most probable costs under an offeror’s proposal are reasonable and realistic in view of
other cost information reasonably available to the agency as of the time of its evaluation.” B-


                                                 18
297276.2, et al., 

at *6 (Comp. Gen. Mar. 1, 2006).9 In order to pass muster, it
is therefore unnecessary “for an agency to demonstrate that a required cost realism analysis was
conducted with ‘impeccable rigor.’” A-T 

(quoting OMV Med. Inc. v.
United States, 

, 1344 (Fed. Cir. 2000)).

        Of course, notwithstanding the highly deferential standard of review of cost realism
determinations, “[t]he protestor’s burden is not insurmountable.” FCN, 

.
Thus, “if an agency made irrational assumptions or crucial miscalculations, the court may find
that the agency’s price realism analysis lacked a rational basis.” 

Century
Corp. v. United States, 

, 541 (2013) (internal quotations omitted)).

    C.     Motion to Supplement the Record

       Before addressing the substance of MJLM’s objections to the agency’s cost realism
analysis, the Court must address the extent to which MJLM can rely upon the Declaration of
Stephen Kiraly in support of its arguments.10 According to MJLM, “[t]he primary purpose of the
Kiraly Declaration – and reason for its submission – is to help MJLM explain how the existing
administrative record reveals the fatal shortcomings of the agency’s cost realism analysis.” Pl.’s
Opp. to Def.’s Mot. to Strike at 4, ECF 62 (emphasis in original). Its “secondary purpose,”
MJLM states, “is to help demonstrate prejudice by presenting a quantitative analysis of the
potential impact of DOL’s failure to conduct a valid cost realism analysis.” 

n.3 (citing
Kiraly Decl. ¶ 29).

        “As a general rule, in determining whether an agency’s actions are arbitrary or irrational,
the ‘focal point for judicial review [of the agency’s decision] should be the administrative record
already in existence, not some new record made initially in the reviewing court.’” Knowledge
Connections, Inc. v. United States, 

, 759 (2007) (alteration in original) (quoting
Fla. Power & Light Co. v. Lorion, 

, 743 (1985)). The purpose of this rule “is to
guard against courts using new evidence to ‘convert the “arbitrary and capricious” standard
[applicable in bid protest cases] into effectively de novo review.’” Axiom Res. Mgmt., Inc. v.
United States, 

, 1380 (Fed. Cir. 2009) (quoting Murakami v. United States, 

, 735 (2000), aff’d, 

(Fed. Cir. 2005)). Therefore, “supplementation of
the record should be limited to cases in which ‘the omission of extra-record evidence precludes
effective judicial review.’” 

(quoting 

).



9
  Decisions of GAO are not binding on this court. See Thompson v. Cherokee Nation of Okla.,

, 1084 (Fed. Cir. 2003). Nonetheless, given GAO’s expertise in the technical
aspects of the procurement process, such as cost realism analyses, its opinions are instructive and
should be “prudently consider[ed].” Id.; see also Centech Group, Inc. v. United States, 

, 1038 n.4 (Fed. Cir. 2009).
10
   MJLM submitted the declaration of Mr. Kiraly (whom it identifies as an expert consultant)
when it filed its response brief. See Pl.’s Opp’n App. Ex. A, Kiraly Decl. (hereinafter, “Kiraly
Decl.”). The government subsequently moved to strike the declaration and MJLM then moved to
supplement the record to include it. ECF Nos. 60, 62.

                                                19
        In light of these principles, MJLM will be permitted to supplement the record with Mr.
Kiraly’s declaration for limited purposes: to give the Court the benefit of his quantitative analysis
of the impact of the errors the agency allegedly committed. See Kiraly Decl. ¶¶s 18–20, 26, 27,
29; FirstLine Transp. 

(admitting expert’s quantitative analysis of
offerors’ pricing information). Because the award decision speaks for itself, however, the Court
will not consider Mr. Kiraly’s declaration for purposes of addressing MJLM’s argument that CO
Matz did not conduct a line-by-line analysis of the costs in the offerors’ proposals. See Kiraly
Decl. ¶¶s 17, 22, 23, 24. Nor will the Court consider the declaration for purposes of deciding
whether—absent such a line-by-line analysis—the CO’s determination was invalid, because the
question of whether a line-by-line analysis must be conducted in order for the Court to uphold
the CO’s determination is a legal one, not a technical one. For similar reasons, and because the
Court is not reviewing the agency’s decision de novo, it will not consider Mr. Kiraly’s assertions
regarding what documentation he would have provided had he performed a cost realism analysis.
E.g., 

(opining that given the “significant variances” the original cost evaluator identified,
Mr. Kiraly “would have expected to see explanations of why those significant variances were
ultimately determined to not require a [most probable cost] adjustment”). Finally the Court does
not consider it appropriate to consider Mr. Kiraly’s legal conclusions regarding whether the CO’s
analysis was compliant with the FAR and the RFP, 

or whether any upward adjustment
in API’s costs would have resulted in a different source selection decision, 

        Based on the foregoing, the Court will GRANT MJLM’s Motion to Supplement the
Administrative Record, for the limited purpose outlined above. The government’s Motion to
Strike, accordingly, is DENIED.

   D.      MJLM’s Arguments

       In this case, as described above, a government cost evaluator conducted an initial cost
realism analysis by comparing the costs contained in the business management proposals
submitted by API and MJLM to the IGCE. AR Tab 23c 3425–96 (API cost evaluation); 

3499–3534 (MJLM cost evaluation). The cost evaluator concluded on the basis of her
analysis that MJLM’s cost proposal appeared reasonable to meet the contract goals. 

at 3418. On the other hand, she found several “significant weaknesses” and some “deficiencies”
in API’s cost proposal and expressed concerns about API’s ability to perform the contract at its
proposed cost. 

3425–96; 

at 3418.

        CO Matz found the cost evaluator’s analysis and her conclusions flawed in several
respects. In particular, she expressed concern that the evaluator had “marked every deviation
from the [IGCE] as an item of concern” and had recommended adjustments to the line items for
which deviations existed “without reference to the offeror’s technical approach or other
considerations.” 

0 at 6713. CO Matz concluded that “the issues identified by the cost
evaluator were not truly problems with the proposals; rather, the majority of the issues identified
were line items that differed from the [g]overnment’s estimate in one way or another.” 

In her view, these discrepancies reflected “the unique technical approaches of the offerors,
rather than insufficient understanding of th[e RFP’s] requirement[s].” 

see also 

(observing that “the cost evaluator did not provide any rationale for her recommended cost


                                                 20
adjustments, which appear to be based solely on nonconformities with the [g]overnment’s
estimates”).

       Upon rejecting the cost evaluator’s report on this basis (among others), CO Matz
conducted her own review of the proposals. Based upon her review, she determined that no cost
adjustments were warranted. 

She concluded that “both offerors’ prices are fair and
reasonable in light of the price competition for this requirement and with reference to the IGCE.”

that CO Matz failed to adequately explain why she rejected the cost
evaluator’s analysis. Pl.’s Mot. at 36. It further argues that the cost realism analysis CO Matz
performed lacked validity because she did not adjust API’s costs upward to reflect the difference
between the staffing levels set forth in API’s proposal and those contained in the government’s
estimate. 

It also contends that CO Matz’s conclusions were flawed because she
allegedly did not conduct a line-by-line comparison of API’s proposed costs to the line items in
the IGCE, but instead relied upon a comparison of each offeror’s total proposed cost to the total
proposed cost in the government’s estimate. 

Finally, MJLM argues that to the
extent that the CO did base her decision on line-by-line comparisons, she provided insufficient
explanation for her ultimate conclusion that “the issues identified by the cost evaluator do not
reflect defects, significant weaknesses, or weaknesses in the proposals or reasons to find the
proposed prices other than reasonable and realistic.” 

(quoting AR Tab 60 at 6714).

     E.     Prejudice to MJLM

         Before turning to the substance of MJLM’s challenges to the agency’s cost realism
analysis, the Court addresses whether—even assuming their merit—MJLM would be entitled to
relief. Thus, it is well-established that “[a] protester must show not simply a significant error in
the procurement process, but also that the error was prejudicial, if it is to prevail in a bid protest.”
Statistica, Inc. v. Christopher, 

, 1581 (Fed. Cir. 1996) (citing Data Gen. Corp. v.
Johnson, 

, 1562 (Fed. Cir. 1996)). In that regard, “[a] party has been prejudiced
when it can show that but for the error, it would have had a substantial chance of securing the
contract.” Labatt Food Serv., Inc. v. United States, 

, 1378 (Fed. Cir. 2009) (citing
Bannum, 

); Galen Med. 

; Info. 

.

        Here—even assuming that MJLM was correct that the CO’s cost analysis was flawed—it
cannot meet its burden of showing prejudice. Thus, according to MJLM, if the CO had accepted
the cost evaluator’s analysis in its entirety, the result would have been to require an upward
adjustment in API’s price of some $1.6 million and in MJLM’s by $262,000. See Pl.’s Mot. at
44–45. In that case, MJLM’s proposed costs over a five-year period would have been $629,000
less than API’s (rather than $756,495 greater as the CO determined). Id.11 But the value of the



11
  Mr. Kiraly conducted his own analysis to determine what the upward adjustment in API’s
proposal would have been had the agency added the cost of 4.65 FTEs (to account for the
weakness assigned API in its staffing resources proposal). He concluded that a $1.3 million
                                                  21
contract over the five-year period was close to $50 million, and price was the least important
consideration in choosing the awardee under the RFP. AR Tab 6 at 178. The RFP, in fact,
provides that the adjectival ratings for the technical evaluation criteria, when combined, are to be
considered “significantly more important” than cost. 

CO’s award determination memorandum makes it clear that a small price
advantage in MJLM’s favor would not have changed the result because the agency had
determined that API’s proposal was “significantly stronger than MJLM’s.” 

0 at 6710.

As CO Matz explained:

        [T]he differences in Cost between the two offerors did not serve as a significant
        discriminator in my decision. Both offerors proposed costs that were determined to
        be fair, reasonable, and realistic. Even though API’s proposed cost was 1.5% lower
        than the overall cost proposed by MJLM and 1% below the IGCE, I did not view
        that as a significant factor in the evaluation here since this is a cost reimbursement
        contract, so I viewed the two proposed costs as roughly equivalent, with API having
        just a slight edge for this factor.

Indeed, CO Matz stated that even “if API’s costs had been adjusted to be higher than
MJLM’s probable cost, that would not have altered my best value determination.” 

       In short, even assuming that the agency erred by not adjusting API’s costs upward by as
much as $1.6 million, as MJLM urges it should have done, MJLM has not demonstrated that it
suffered prejudice. For that reason alone, MJLM’s arguments based on the agency’s cost realism
analysis are unavailing.

   F.      Merits of MJLM’s Challenge to the Cost Realism Analysis

        In any event, the Court finds MJLM’s arguments regarding the validity of the CO’s cost
realism analysis unpersuasive. First, the Court rejects MJLM’s argument that the CO did not
adequately explain her decision to reject the cost evaluator’s conclusions. To the contrary, CO
Matz explained her disagreements with the cost evaluator’s approach in detail, as set forth above.
See 

it was reasonable for the CO to fault the cost evaluator for failing to
take into consideration the specific methods API proposed to employ in its operation of the
Shriver Center. See FAR 15.404-1(d)(1) (“Cost realism analysis is the process of independently
reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine
whether the estimated proposed cost elements are . . . consistent with the unique methods of
performance and materials described in the offeror’s technical proposal.”)(emphasis supplied);
Alcazar Trades, Inc., B-410001.4 et al., 

, at *5 (Comp. Gen. Apr. 1, 2015)
(finding that a “price realism evaluation must consider the unique technical approaches proposed



upward adjustment would be required, resulting in MJLM being the lowest priced offeror by
some $487,000. Kiraly Decl. ¶ 29.

                                                 22
by each offeror” and “an agency may not mechanically apply its own estimates to an offeror’s
proposal without considering the offeror’s unique approach”).

        For similar reasons, the Court finds no merit to MJLM’s argument that the CO was
required to adjust API’s costs upward some $1.3 million to reflect 4.65 additional FTEs as
contained in the IGCE. Pl.’s Mot. at 39–42; Kiraly Decl. ¶ 29. MJLM bases this contention on
the fact that, as discussed in greater detail above, the technical evaluators assigned API a
“marginal” rating on the adequacy of staffing subfactor. Pl.’s Mot. at 39–40. But notwithstanding
the “marginal” rating, DOL assigned API’s staffing resources proposal a “very good” rating
overall and awarded the contract to API with full awareness that it proposed to staff the Center at
a lower FTE level than was reflected in the government’s estimate. Under these circumstances
the agency was not required to adjust API’s proposal upward; indeed, it would have arguably
been inappropriate for it to do so. See Honeywell Tech. Sols., Inc., B–292354 et al., 

, at *7–*8 (Comp. Gen. Sept. 2, 2003) (cost evaluation was unreasonable where agency
found that awardee was rated as “appropriate” under technical evaluation, yet also concluded that
awardee had proposed insufficient staffing under cost realism analysis); see also A-T Sols., 

(finding that “there is no basis for the Court to impose the so-called cost
realism adjustment Plaintiff proposes” notwithstanding that staffing levels were below the
[g]overnment’s estimate, where “the Agency reasonably determined that they were not too
low”).

        The Court is also not persuaded by MJLM’s argument that the CO’s cost realism analysis
was irrational because she allegedly failed to conduct a line-by-line comparison of API’s
proposal to the IGCE. To begin with, when conducting a cost realism analysis, “agencies are not
required to conduct an in-depth analysis or verify each and every item to a scientific certainty,
but rather to perform a reasonable evaluation.” Raytheon Tech. Servs. Co. LLC, B-406136 et al.,

, at *4 (Comp. Gen. Feb. 15, 2012); see also L-3 Sys. Co., B-404671.2 et al.,

, at *7 (Comp. Gen. Apr. 8, 2011) (“[A]n agency is not required to verify each
and every item in assessing cost realism; rather, the agency must perform a reasonable
evaluation, which may, and should, include the informed judgments of the contracting agency.”).
In particular, because “[t]he depth of an agency’s price analysis is a matter within the sound
exercise of the agency’s discretion” a line-by-line analysis is not necessarily required when
conducting a cost realism analysis. Symbion Power, LLC-Haytrac, B-405507 et al., 

, at *4 (Comp. Gen. Nov. 16, 2011) (rejecting the argument that agency’s price analysis
was flawed because it did not conduct line-by-line analyses of offerors’ prices) (citing Computer
Sys. Int’l, Inc., B–276955 et al., 

(Comp. Gen. Aug. 13, 1997)).

       Further, contrary to MJLM’s argument, the record demonstrates that when the CO
conducted her own review of the costs proposed by the offerors, she did not rely exclusively on a
bottom line comparison of API’s proposal, MJLM’s proposal, and the IGCE. To be sure, she
properly found that such a bottom line comparison was hardly irrelevant, recognizing that
“despite some significant variances in certain line items, the offerors’ proposed base period costs
were less than $[ . . . ] apart (or approximately [ . . . ]%) as well as just 2.7% below (API) and




                                                23
[ . . . ]% above (MJLM) the IGCE.” AR Tab 60 at 6713.12 But she explicitly noted that she had
also conducted an in-depth review of the line item costs in API’s proposal and their variances
with the line items in the government’s estimate. She explained that “[w]here certain line items
differed markedly from the [IGCE], I took a closer look and found that these variations generally
reflect[ed] the unique technical approaches of the offerors, rather than insufficient understanding
of this requirement.” 

these considerations, as well as the fact that the differences between the
offerors’ overall proposed costs were relatively slight, the CO concluded that “the costs proposed
by both MJLM and API were fair, reasonable, and realistic.” 

Moreover, she declined
to “find fault with the proposals for their divergence from the [g]overnment’s estimate on
specific line items or minor inconsistencies with how they account for specific costs.” 

that the proposed prices were “not unreasonably low so as to present a risk to the
[g]overnment” and that each offeror’s proposed costs should be treated as its “probable cost” and
used for the best value determination. 

       MJLM’s criticisms of the CO’s analysis as insufficiently precise are also unavailing. As
noted above, the Court’s standard of review of agency cost realism analyses does not require
such analyses to reflect “impeccable rigor.” In this case, the record reflects that CO Matz made
“a good faith effort to consider material facts that a reasonably prudent person would consider
relevant to the procurement decision,” and that her decision was not ‘“tainted by irrational
assumptions or critical miscalculations.’” United Payors & United Providers Health Servs., Inc.
v. United States, 

, 330 (2002) (quoting OMV Med. 

).

        Thus, when CO Matz reviewed the offerors’ cost proposals, she compared them to the
IGCE and examined the reasons for the line item deviations the evaluator identified as
problematic. She determined that the discrepancies were either minor or based on the offeror’s
particular technical approach. She based her conclusions as to whether the discrepancies justified
an upward adjustment in costs on her considerable experience regarding the operation of Job
Corps Centers and the fact that, at the bottom line, the costs proposed did not diverge
significantly from the government’s estimates. The Court is satisfied that the award decision
contains sufficient explanation to establish a rational connection between the record before the
CO and the conclusions she reached regarding whether the costs proposed by the offerors were
reasonable and realistic.

        Finally, the Court addresses what MJLM calls “a number of glaring factual errors and
inconsistencies” that it says “severely undercut DOL’s claim that a true cost realism analysis was
performed or that the cost realism analysis, if performed, is entitled to deference.” Pl.’s Opp’n at
4. The first of these is that the award determination memorandum includes two IGCE amounts—
$50,102,872 and $50,606,375—that are different than the $49,137,698 sum that Mr. Kiraly


12
   This summary of the differences between the proposals is not entirely accurate. According to
the CO, MJLM’s proposed base period costs were $[ . . . ]and API’s proposed base period costs
were $[ . . . ]. AR Tab 60 at 6713. Therefore, the difference between the proposals was $[ . . . ],
not “less than $81,000.” Nonetheless, the CO was correct that the proposals were approximately
[ . . . ]% apart.
                                                24
found represented the total IGCE. See 

compare AR Tab 60 at 6701; 6705 with AR
Tab 5 at 40–40.1; Kiraly Decl. ¶ 19. In response, the government asserts that “the contracting
officer has represented” that her cost realism analysis relied on the $49,137,698 amount and not
the incorrect amounts set forth in her award determination memorandum. Def.’s Reply to Pl.’s
Opp’n to Def.’s Cross-Mot. at 4–5, ECF No 61. It claims that the record supports this conclusion
because CO Matz determined that API’s proposed base costs were 2.7% below the IGCE while
MJLM’s costs were [ . . . ]% above the IGCE. See 

Tab 60 at 6713).

        The Court agrees that the record supports the government’s representation that CO Matz
did not rely upon either of the totals set forth in the award memorandum ($50,102,872 and
$50,606,375). If she had used these incorrect figures, then she would not have characterized
MJLM’s proposed costs as being above the government’s estimate during the base years. On the
other hand, the government’s argument that she actually used $49,137,698 as the applicable
government estimate, is consistent with both her statement that MJLM’s proposal for the base
years was above the estimate, and her finding that API’s was below, as stated in her award
decision. Therefore, the Court finds her incorrect citations of the $50,102,872 and $50,606,375
amounts in her award decision were de minimis errors that do not affect the outcome of this
protest. See Glenn 

(finding that “[d]e minimis errors in the procurement
process do not justify relief” (citing Grumman Data Sys. Corp. v. Dalton, 

, 1000
(Fed. Cir. 1996))).

        Second, MJLM asserts that the contracting officer’s cost realism analysis did not consider
costs related to outreach and admissions or career transition services because those costs are not
reflected in certain cost realism analysis spreadsheets that are in the record. See Kiraly Decl. ¶ 20
(citing AR Tab 21(d)(ii), Tab 22(b)(ii)). But notwithstanding the content of these two
spreadsheets, the costs of outreach and admissions and the costs of career transition services are
included in the offerors’ business proposals, e.g., AR Tab 7c at 908–31; 

at 1381–
1451, and in the cost evaluator’s evaluation sheets, 

at 3254–59; 

at 3385–
86. In addition, the award decision reflects the contracting officer’s consideration of the offerors’
proposed costs for outreach and admissions and career transition services in her review of the
cost evaluation. See 

at 6714 (referring to “Line 4” for “Media Advertising Expenses”
and referring to MJLM’s proposal to open six offices).

        Lastly, MJLM correctly notes that a sentence in the award determination memorandum
inaccurately describes the cost evaluator’s conclusions about API’s cost proposal. See Pl.’s
Opp’n at 5–6. That sentence states as follows: “Although the cost evaluator identified some
concerns, she concluded – and as the contracting officer and Source Selection Authority, I
confirmed – that both offerors’ proposed costs were reasonable and realistic.” AR Tab 60 at
6705–06. In fact, as MJLM correctly notes, the cost evaluator did not conclude that API’s
proposed costs were reasonable and realistic. But the award decision in its entirety makes clear
that the CO understood that the cost evaluator had taken issue with a number of the line items in
API’s proposal and found them unreasonable. This errant sentence, accordingly, does not
undermine the rationality of the CO’s cost realism analysis or suggest that DOL failed to conduct
a “true cost realism analysis,” as MJLM asserts.




                                                 25
VI.    Best Value Determination

       MJLM’s final argument is that the agency’s best value determination “was seriously
flawed based upon all of the errors discussed above, which permeated its Technical Approach,
Staff Resources, and Cost Realism analyses.” Pl.’s Mot. at 46. In short, MJLM asserts, “a best
value award determination based upon erroneous information is unreasonable.” 

reasons set forth above, the Court has concluded that DOL acted reasonably and
within its discretion in its review and evaluation of both API’s and MJLM’s technical proposals,
that it provided a reasonable explanation for its cost realism analysis, and that, in any event,
MJLM was not prejudiced by any error with respect to the cost realism analysis. Accordingly,
MJLM’s challenge to the agency’s best value determination cannot be sustained.

                                        CONCLUSION

        For the reasons discussed above, the government’s Cross-Motion for Judgment on the
Administrative Record is GRANTED, and MJLM’s Motion for Judgment on the Administrative
Record is DENIED. The Clerk of the Court is directed to enter judgment accordingly. In
addition, MJLM’s Motion to Supplement the Administrative Record is GRANTED, for the
limited purposes outlined above, and the government’s Motion to Strike is DENIED.

         Pursuant to the Court’s November 12, 2015 Protective Order, this Opinion and Order has
been issued under seal. The parties shall have two weeks to propose redactions and, accordingly,
shall file such proposed redactions by September 22, 2016. To aid the Court’s evaluation of the
proposed redactions and in light of the “presumption of public access to judicial records,”
Baystate Techs., Inc. v. Bowers, 283 Fed. App’x 808, 810 (Fed. Cir. 2008), the parties shall file a
memorandum explaining why redactions are necessary for each item of information for which a
redaction is proposed.


       IT IS SO ORDERED.

                                                     s/ Elaine D. Kaplan
                                                     ELAINE D. KAPLAN
                                                     Judge




                                                26