Judges: Lydia Kay Griggsby
Filed: Mar. 14, 2019
Latest Update: Mar. 03, 2020
Summary: In the United States Court of Federal Claims No. 18-542C Filed Under Seal: February 15, 2019 Reissued: March 14, 2019* NOT FOR PUBLICATION ) IT CONCEPTS INCORPORATED, ) ) Plaintiff, ) ) Post-Award Bid Protest; Motion For v. ) Judgment Upon The Administrative ) Record; RCFC 52.1; Injunctive Relief; THE UNITED STATES, ) Corrective Action. ) Defendant, ) ) v. ) ) AVANTGARDE, LLC, ) ) Defendant-Intervenor. ) ) Eric S. Crusius, Attorney of Record, Holland & Knight LLP, Tysons, VA; Mary Beth Bosco, Of
Summary: In the United States Court of Federal Claims No. 18-542C Filed Under Seal: February 15, 2019 Reissued: March 14, 2019* NOT FOR PUBLICATION ) IT CONCEPTS INCORPORATED, ) ) Plaintiff, ) ) Post-Award Bid Protest; Motion For v. ) Judgment Upon The Administrative ) Record; RCFC 52.1; Injunctive Relief; THE UNITED STATES, ) Corrective Action. ) Defendant, ) ) v. ) ) AVANTGARDE, LLC, ) ) Defendant-Intervenor. ) ) Eric S. Crusius, Attorney of Record, Holland & Knight LLP, Tysons, VA; Mary Beth Bosco, Of ..
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In the United States Court of Federal Claims
No. 18-542C
Filed Under Seal: February 15, 2019
Reissued: March 14, 2019*
NOT FOR PUBLICATION
)
IT CONCEPTS INCORPORATED, )
)
Plaintiff, )
) Post-Award Bid Protest; Motion For
v. ) Judgment Upon The Administrative
) Record; RCFC 52.1; Injunctive Relief;
THE UNITED STATES, ) Corrective Action.
)
Defendant, )
)
v. )
)
AVANTGARDE, LLC, )
)
Defendant-Intervenor. )
)
Eric S. Crusius, Attorney of Record, Holland & Knight LLP, Tysons, VA; Mary Beth
Bosco, Of Counsel, Rodney M. Perry, Of Counsel, Holland and Knight LLP, Washington, DC,
for plaintiff.
Steven C. Hough, Trial Attorney, Elizabeth M. Hosford, Assistant Director, Robert E.
Kirschman, Jr., Director, Joseph H. Hunt, Assistant Attorney General, Commercial Litigation
Branch, Civil Division, United States Department of Justice, Washington, DC; Abigail
Nawrocki, Of Counsel, P. Russell Wong, Of Counsel, United States Patent and Trademark
Office, for defendant.
William A. Shook, Counsel of Record, Law Offices of William A. Shook PLLC,
Washington, DC, for defendant-intervenor.
*
This Memorandum Opinion and Order was originally filed under seal on February 15, 2019
(docket entry no. 54). The parties were given an opportunity to advise the Court of their views
with respect to what information, if any, should be redacted from the Memorandum Opinion and
Order. The parties filed a joint status report on March 12, 2019 (docket entry no. 56)
proposing certain redactions, which the Court has adopted. And so, the Court is reissuing the
Memorandum Opinion and Order, dated February 15, 2019, with the agreed-upon redactions
indicated by three consecutive asterisks within brackets ([* * *]).
MEMORANDUM OPINION AND ORDER
GRIGGSBY, Judge
I. INTRODUCTION
In this post-award bid protest matter, IT Concepts Incorporated, (“ITC”) challenges the
decision of the United States Patent and Trademark Office (“USPTO”) to take certain corrective
action in connection with a solicitation for human resource information systems division support
services. See generally Am. Compl. The parties have filed cross-motions for judgment upon the
administrative record on the issues of whether the USPTO’s decision to take corrective action—
and the scope of the proposed corrective action—were rational, pursuant to Rule 52.1 of the
Rules of the United States Court of Federal Claims (“RCFC”). See generally Pl. Mot.; Def.
Mot.; Def.-Int. Mot. For the reasons discussed below, the Court: (1) DENIES ITC’s motion for
judgment upon the administrative record; (2) GRANTS the government’s and AvantGarde
LLC’s (“AvantGarde”) respective cross-motions for judgment upon the administrative record;
and (3) DISMISSES the complaint.
II. FACTUAL AND PROCEDURAL BACKGROUND1
A. Factual Background
ITC is the current awardee of a government contract to provide human resource
information system division support services (the “HRIS Contract”). AR Tab 33 at 1267. In this
post-award bid protest matter, ITC challenges the USPTO’s decision to take certain corrective
action following the award of the HRIS Contract to ITC and the filing of a United States
Government Accountability Office (“GAO”) protest related to the agency’s solicitation for that
contract by AvantGarde. Am. Compl. at ¶ 1. Specifically, ITC alleges that the USPTO’s
decision to take corrective action based upon the GAO protest is unreasonable under the
circumstances and that the scope of the agency’s corrective action is overly broad. Id. at ¶¶ 31-
40. And so, ITC requests, among other things, that the Court declare that the USPTO’s decision
1
The facts recited in this Memorandum Opinion and Order are taken from the administrative record
(“AR”); plaintiff’s amended complaint (“Am. Compl.”); plaintiff’s motion for judgment upon the
administrative record (“Pl. Mot.”); and the government’s and AvantGarde’s respective cross-motions for
judgment upon the administrative record (“Def. Mot.” and “Def.-Int. Mot.”). Except where otherwise
noted, all facts recited herein are undisputed.
2
to take corrective action is unreasonable and enjoin the USPTO from awarding the HRIS
Contract to any offeror other than ITC. Id. at Prayer for Relief.
1. The Solicitation
On December 19, 2017, the USPTO issued solicitation number 272P1800032 for human
resource information systems division support services as a United States Small Business
Administration set-aside (the “Solicitation”). AR Tab 6 at 60-61. The Solicitation sought
proposals to provide services that “support the HR Connect platform . . . report[] services for the
purpose of generating analytical information . . . internal web-site administration, and business
process review and improvement activities” and that “support the day to day operations and
objectives” of the agency. Id. at 124-25.
The Solicitation for the HRIS Contract involves an indefinite-delivery, indefinite-quantity
(“IDIQ”) contract with a one-year base period and four one-year options. Id. at 61. Pursuant to
the terms of the Solicitation, the USPTO intends to issue firm-fixed-price task orders against this
IDIQ contract, with the first task order to be issued in accordance with the Statement of Work
and future task orders issued on an “as required” basis.
Id.
The Solicitation provides that the USPTO would evaluate responsive proposals based
upon three evaluation factors: (1) Technical Capabilities and Experience; (2) Past Performance;
and (3) Price.
Id. at 119. The Solicitation further provides that the USPTO will award the HRIS
Contract based upon the “lowest evaluated price of responses meeting or exceeding the
acceptability standards for non-price factors.”
Id. at 121.
Specifically relevant to this dispute, the Solicitation requires that offerors submit firm-
fixed-price quotes for the base year and four option year periods. Id. In this regard, the
Solicitation provides that “[e]ach labor category represents a fully-burdened hourly rate for each
skills classification.”
Id. at 120. The Solicitation also provides that “[a]ll hourly rates are based
on a 40 hour work week,” and that “[a] Full Time Equivalent (“FTE”) is calculated at 1900 hours
per year.”
Id. at 120-21.
On January 11, 2018, the USPTO received responsive proposals to the Solicitation from
ITC, AvantGarde, and another offeror—[* * *]. See generally AR Tabs 9-11. Because the
USPTO found that these offerors submitted firm-fixed prices—and that there was “confusion”
3
[AvantGarde should] leave the 1900 hours in the block and just fill in the rate and
total for the CLIN. The CLIN [0007] is optional but the CLIN table should still be
completed to show what the price would be for the CLIN if it were in fact to be
funded.
AR Tab 17 at 468. Thereafter, AvantGarde telephoned the USPTO’s contracting officer “to
clarify . . . that the Amended [Solicitation] remained a fixed price quote.” AR Tab 50 at 1582
(“Is the government forcing me to bid exactly 1900 hours per FTE per CLIN or do I have the
discretion since this is a fixed-price to bid less per FTE like for example, if I wanted to bid say
1880 per year to further offer the government a discount, is that ok?”). The USPTO’s
contracting officer responded, in error, that “[t]his is a fixed price contract evaluated by Fixed
Price dollar amount for the base year plus option periods.” Id.2
2. Award To ITC
On January 23, 2018, ITC and AvantGarde submitted revised proposals in response to the
amended Solicitation. See generally AR Tabs 18-19. In their revised proposals, ITC and
AvantGarde both submitted firm-fixed-prices. AR Tab 18 at 472 (stating that AvantGarde’s
“Critical Assumptions” refer to “FP”); AR Tab 19 at 512 (“ITC’s pricing is provided as firm
fixed price.”).
During the evaluation of the revised proposals, the UPSTO evaluated the lowest-priced
offeror—AvantGarde—first, consistent with the terms of the Solicitation. See AR Tab 6 at 121.
The agency determined that AvantGarde “submitted a price quote that does not conform to the
instructions in the RFQ.” AR Tab 20 at 514. Specifically, the USPTO determined that
AvantGarde:
[P]roposed pricing for less than the minimum quantity of required hours. The RFQ
states a minimum requirement of 13,300 hours which equates to 7 Full Time
Equivalent (FTE) positions based upon the statement that 1,900 hours is equal to 1
FTE.
The vendor proposed [* * *]. This is not acceptable as it does not meet the minimum
number of required hours as stated in the RFQ.
2
The administrative record reflects that the USPTO’s contracting officer “do[es] not remember the exact
conversation that took place [with AvantGarde],” but does remember “confirming the contract type for
the task orders to be issued against the IDIQ will be Firm-Fixed-Price,” and that he “never stated that
decreasing or ‘discounting’ the hours would be acceptable.” AR Tab 46 at 1497.
5
AR Tab 27 at 1197. And so, the USPTO concluded that AvantGarde’s proposal was
unacceptable. AR Tab 31 at 1210.
During the evaluation of ITC’s revised proposal, the USPTO determined that ITC’s
“price quote was submitted in accordance with the instructions in the RFQ and is acceptable.”
Id.; AR Tab 20 at 514. The USPTO also determined that ITC’s proposal was technically
acceptable. AR Tab 30 at 1205-08; AR Tab 31 at 1210. And so, the USPTO awarded the HRIS
Contract to ITC on January 30, 2018. AR Tab 33 at 1267.
3. AvantGarde’s GAO Protest And The USPTO’s Corrective Action
On January 31, 2018, the USPTO notified AvantGarde that it had not been awarded the
HRIS Contract. AR Tab 35 at 1275. On February 1, 2018, AvantGarde filed a protest before the
GAO challenging the award of the HRIS Contract to ITC. See generally AR Tab 41.
During the GAO protest, AvantGarde argued, among other things, that the Solicitation as
amended contained a latent ambiguity “as to whether [an offeror] was required to bid 1900 hours
for each position even though it was offering to perform all of the work in the Statement of Work
for its annual fixed-price.” Id. at 1315. On February 14, 2018, the USPTO moved to dismiss
AvantGarde’s protest upon the grounds that: (1) the Solicitation was unambiguous; (2)
AvantGarde’s protest was untimely; and (3) AvantGarde lacked standing. AR Tab 46 at 1347-
51. On February 20, 2018, the GAO denied the USPTO’s motion to dismiss. AR Tab 51 at
1614.
After the GAO denied the USPTO’s motion to dismiss, the “USPTO determined that it is
in the agency’s best interest to take corrective action” and the agency stated its intent to
“amend[] the solicitation language, request[] updated proposals and conduct[] a new evaluation”
on February 27, 2018. AR Tab 53 at 1618. In reaching the decision to take this corrective
action, the USPTO determined that “the language in the [amended Solicitation] may not have
been clear enough for the [offerors] to understand the USPTO’s intentions.” AR Tab 70 at 1966-
67. And so, the agency concluded that “the purpose of the corrective action is to provide clarity
as to the agency’s requirement, so that all parties have the same understanding of the contract
type to be awarded and what the Agency is procuring (hours and not FTEs).” Id. at 1967.
6
4. United States Court Of Federal
Claims Litigation And Remand Proceedings
After ITC commenced this matter on April 13, 2018, the government successfully moved
to stay and voluntarily remand this matter to the USPTO, to permit the agency to reconsider the
determination that it is in the agency’s best interest to take corrective action, and to further
document the agency’s decision-making process. See generally Mot. to Remand, dated April 24,
2018; see also Stay and Remand Order, dated April 25, 2018.
On April 30, 2018, the USPTO issued two memoranda for the record stating the reasons
for the agency’s decision to take corrective action and the plan for implementing the proposed
corrective action. In the memoranda, the USPTO explained the reasons for its decision to take
corrective action as follows:
The RFQ was issued with the anticipation that the vendors would respond by
quoting 1,900 hours per CLIN. . . . It was anticipated that an IDIQ contract would
be awarded and the first Task Order would be issued for CLINs 0001– 0006 for a
fixed price per CLIN requiring the vendor to deliver 1,900 hours for each of the
labor categories described under CLINs 0001– 0006.
AR Tab 70 at 1966. The USPTO further explained that:
There was a fundamental misunderstanding of the Agency’s requirement. The
vendors each thought they were competing for a firm-fixed-price contract where
the Government was procuring a fixed scope of work . . . . There were
communications with the vendors that may have been construed that the Agency
intended a firm-fixed-price contract as opposed to an IDIQ.
Id. at 1966-67. And so, the USPTO concluded that “[c]orrective action is needed to clarify this
misunderstanding and to allow all parties to have the same understanding of the Agency’s
requirement.”
Id. at 1967.
In addition, the USPTO identifies several steps that it intends to take to implement the
proposed corrective action. See generally AR Tab 71. First, the USPTO states that:
[It] intends to revise the solicitation language to state that an Indefinite Delivery
Indefinite Quantity (IDIQ) contract will be awarded and the contract type for Task
Orders issued against the IDIQ will be Labor Hours. . . . It was determined that a
Firm-Fixed-Price contract type for the Task Orders does not provide the flexibility
the program office requires in order to operate successfully. The program officer’s
requirements are fluid in nature and Firm-Fixed-Price is not conducive to fluid
requirements. Labor Hours represents the best contract type to meet the
requirements of the program office.
7
AR Tab 71 at 1968. Second, the USPTO states that it will change the evaluation process for the
Solicitation from lowest price technically acceptable (“LPTA”) to a tradeoff, because the
“Tradeoff Process will result in a contract award that best meets the requirements of the program
office.” Id.
Lastly, the USPTO states that it will add language to the Solicitation to explain the
structure of the HRIS Contract.
Id. In this regard, the USPTO explains that:
Vendors will be required to respond to the solicitation with a price quote for the
requirements of the first Task Order (CLINs 0001– 0006). CLIN 0007 is optional
and if required, a separate Task Order will be issued. Additional Task Orders may
be issued in the future for within scope requirements on an as required basis.
Id.
B. Procedural Background
On April 13, 2018, ITC filed the complaint in this bid protest matter. See generally
Compl. On April 16, 2018, AvantGarde filed a motion to intervene, which the Court granted on
April 17, 2018. See generally Mot. to Intervene; Order, dated April 17, 2018. On April 17, 2018
the Court entered a Protective Order in this matter. See generally Protective Order.
On April 25, 2018, the Court granted the government’s motion to stay and voluntarily
remand this matter to the USPTO. See generally Stay and Remand Order, dated April 25, 2018.
Following the remand period, the government filed the administrative record on May 2,
2018. See generally AR. On May 16, 2018, ITC filed an amended complaint. See generally
Am. Compl.
On May 23, 2018, ITC filed a motion for judgment upon the administrative record. See
generally Pl. Mot. On August 3, 2018, the government and AvantGarde filed their respective
cross-motions for judgment upon the administrative record and responses and oppositions to
ITC’s motion for judgment upon the administrative record. See generally Def. Mot.; Def.-Int.
Mot.
On August 27, 2018, ITC filed a response and opposition to the government’s and
AvantGarde’s respective cross-motions for judgment upon the administrative record. See
generally Pl. Resp. On October 24, 2018, the government and AvantGarde filed their respective
8
reply briefs in support of their cross-motions for judgment upon the administrative record. See
generally Def. Reply; Def.-Int. Reply.
These matters having been fully briefed, the Court resolves the pending motions.
III. LEGAL STANDARDS
A. Bid Protest Jurisdiction
The Tucker Act grants the United States Court of Federal Claims jurisdiction over bid
protests brought by “an interested party objecting to a solicitation by a Federal agency for bids or
proposals for a proposed contract or to a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection with a procurement or a proposed
procurement.” 28 U.S.C. § 1491(b)(1). This Court reviews agency actions in bid protest matters
under the Administrative Procedure Act’s “arbitrary and capricious” standard. See 28 U.S.C. §
1491(b)(4) (adopting the standard of review set forth in the Administrative Procedure Act).
Under this standard, an award may be set aside if “‘(1) the procurement official’s decision lacked
a rational basis; or (2) the procurement procedure involved a violation of regulation or
procedure.’” Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004)
(quoting Impresa Construzioni Geom. Domenico Garufi v. United States,
238 F.3d 1324, 1332
(Fed. Cir. 2001)). In this regard, the United States Court of Appeals for the Federal Circuit has
explained that:
When a challenge is brought on the first ground, the test is whether the contracting
agency provided a coherent and reasonable explanation of its exercise of discretion,
and the disappointed bidder bears a heavy burden of showing that the award
decision had no rational basis. When a challenge is brought on the second ground,
the disappointed bidder must show a clear and prejudicial violation of applicable
statutes or regulations.
Id. at 1351 (internal citations omitted).
In reviewing an agency’s procurement decision, the Court also recognizes that the
agency’s decision is entitled to a “presumption of regularity.” Citizens to Preserve Overton
Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971), abrogated on other grounds by Califano v.
Sanders,
430 U.S. 99 (1977) (citations omitted). In addition, the Court should not substitute its
judgment for that of the agency. Cincom Sys., Inc. v. United States,
37 Fed. Cl. 663, 672 (1997).
And so, “‘[t]he protestor must show by a preponderance of the evidence that the agency’s actions
9
were either without a reasonable basis or in violation of applicable procurement law.’” Gentex
Corp. v. United States, 58 Fed. Cl. 634, 648 (2003) (quoting Info. Tech. & Applications Corp. v.
United States,
51 Fed. Cl. 340, 346 (2001), aff’d,
316 F.3d 1312 (Fed. Cir. 2003)).
This standard “is highly deferential.” Advanced Data Concepts, Inc. v. United States,
216 F.3d 1054, 1058 (Fed. Cir. 2000). As long as there is “a reasonable basis for the agency’s
action, the court should stay its hand even though it might, as an original proposition, have
reached a different conclusion . . . .” Honeywell, Inc. v. United States,
870 F.2d 644, 648 (Fed.
Cir. 1989) (citation omitted). But, if “the agency entirely fail[s] to consider an important aspect
of the problem [or] offer[s] an explanation for its decision that runs counter to the evidence
before the agency,” then the resulting action lacks a rational basis and, therefore, is defined as
“arbitrary and capricious.” Ala. Aircraft Indus., Inc.-Birmingham v. United States,
586 F.3d
1372, 1375 (Fed. Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.
Co.,
463 U.S. 29, 43 (1983)) (internal quotation marks omitted).
B. Judgment Upon The Administrative Record
Generally, RCFC 52.1 limits this Court’s review of an agency’s procurement decision to
the administrative record. RCFC 52.1; see Axiom Res. Mgmt., Inc. v. United States, 564 F.3d
1374, 1379 (Fed. Cir. 2009) (“[T]he focal point for judicial review should be the administrative
record already in existence.”). And so, unlike a summary judgment motion brought pursuant to
RCFC 56, “the existence of genuine issues of material fact does not preclude judgment on the
administrative record” under RCFC 52.1. Tech. Sys., Inc. v. United States,
98 Fed. Cl. 228, 242
(2011) (citations omitted); RCFC 56. Rather, 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,
72 Fed. Cl. 126, 131 (2006).
C. Corrective Action
An agency’s corrective actions are reviewed under the Administrative Procedure Act’s
“highly deferential” “rational basis” standard. Dell Fed. Sys., L.P. v. United States, 906 F.3d
982, 992 (Fed. Cir. 2018) (quoting Croman Corp. v. United States,
724 F.3d 1357, 1363 (Fed.
Cir. 2013) (internal quotation marks and citation omitted); see also Raytheon Co. v. United
States,
809 F.3d 590, 595 (Fed. Cir. 2015) (explaining that, “for us to uphold the [agency’s]
decision to reopen the bidding process, it is sufficient . . . that the grounds relied on by the
10
[agency] . . . rationally justified the reopening under governing law”). The Federal Circuit has
held that the rational basis test asks “whether the contracting agency provided a coherent and
reasonable explanation of its exercise of discretion.” Dell Fed. Sys., 906 F.3d at 992 (quoting
Banknote Corp. of Am., Inc. v. United States,
365 F.3d 1345, 1351 (Fed. Cir. 2004) (internal
quotation marks and citation omitted)).
This Court has also held that the government is not obliged to admit an error as a
precondition to proposing corrective action, nor is it “necessary for an agency to conclude that
the protest is certain to be sustained before it may take corrective action.” Data Monitor Sys.,
Inc. v. United States, 74 Fed. Cl. 66, 74 (2006) (quoting ManTech Telecomm. and Info. Sys.
Corp. v. United States,
49 Fed. Cl. 57, 72 n.24) (2001) (citation omitted). And so, “where the
agency has reasonable concern that there were errors in the procurement, even if the protest
could be denied . . . it [is] within the agency’s discretion to take the corrective action.”
Id.
The Federal Circuit has also observed that corrective action in the bid protest context is
an “agency action, usually taken after a protest has been initiated, to correct a perceived prior
error in the procurement process, or, in the absence of error, to act to improve the competitive
process.” Dellew Corp. v. United States,
855 F.3d 1375, 1378 n.2 (Fed. Cir. 2017); see also Dell
Fed.
Sys., 906 F.3d at 986 n.1. And so, the task of the Court in assessing whether corrective
action is reasonable is to determine: (1) whether the record supports the agency’s finding of
flaws in the procurement process warrants corrective action and (2) whether the corrective action
taken was reasonable under the circumstances. Sierra Nevada Corp. v. United States, 107 Fed.
Cl. 735, 750 (2012).
D. Injunctive Relief
Lastly, this Court “may award any relief [it] considers proper, including declaratory and
injunctive relief” pursuant to its bid protest jurisdiction. 28 U.S.C. § 1491(b)(2); see also
Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009). In deciding whether
to issue a permanent injunction, the Court “considers: (1) whether . . . the plaintiff has succeeded
on the merits of the case; (2) whether the plaintiff will suffer irreparable harm if the court
withholds injunctive relief; (3) whether the balance of hardships to the respective parties favors
the grant of injunctive relief; and (4) whether it is in the public interest to grant injunctive relief.”
PGBA, LLC v. United States,
389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (citing Amoco Prod. Co.
11
v. Vill. of Gambell, Alaska, 480 U.S. 531, 546 n.12 (1987) (“The standard for a preliminary
injunction is essentially the same as for a permanent injunction with the exception that the
plaintiff must show a likelihood of success on the merits rather than actual success.”); see also
Centech Grp.,
Inc., 554 F.3d at 1037. In this regard, the Federal Circuit has held that:
No one factor, taken individually, is necessarily dispositive. If a preliminary
injunction is granted by the trial court, the weakness of the showing regarding one
factor may be overborne by the strength of the others. If the injunction is denied,
the absence of an adequate showing with regard to any one factor may be sufficient,
given the weight or lack of it assigned the other factors, to justify the denial.
FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993) (citations omitted).
A plaintiff who cannot demonstrate actual success upon the merits cannot prevail upon a
motion for permanent injunctive relief. Cf. Nat’l Steel Car, Ltd. v. Canadian Pacific Ry., Ltd.,
357 F.3d 1319, 1325 (Fed. Cir. 2004) (finding that a plaintiff who cannot demonstrate likely
success upon the merits cannot prevail upon its motion for preliminary injunctive relief). In this
regard, this Court has also found success upon the merits to be “the most important factor for a
court to consider when deciding whether to issue injunctive relief.” Dellew Corp. v. United
States,
108 Fed. Cl. 357, 369 (2012) (citing Blue & Gold Fleet, L.P. v. United States,
492 F.3d
1308, 1312 (Fed. Cir. 2007)). But, while success upon the merits is necessary, it is not sufficient
alone for a plaintiff to establish that it is entitled to injunctive relief. See Contracting,
Consulting, Eng’g LLC v. United States,
104 Fed. Cl. 334, 353 (2012) ((“Although plaintiff’s
entitlement to injunctive relief depends on its succeeding on the merits, it is not determinative
because the three equitable factors must be considered, as well.”) (citations omitted)).
IV. LEGAL ANALYSIS
The parties have filed cross-motions for judgment upon the administrative record on the
issues of whether the USPTO’s decision to take corrective action in connection with the
Solicitation for the HRIS Contract—and the scope of the proposed corrective action—are
rational under the circumstances presented in this case, pursuant to RCFC 52.1. See generally
Pl. Mot.; Def. Mot.; Def.-Int. Mot. ITC argues in its motion for judgment upon the
administrative record that the USPTO’s decision to take corrective action is irrational because:
(1) the agency failed to articulate a reasonable explanation for this decision; (2) AvantGarde’s
GAO protest would have been dismissed or denied; and (3) AvantGarde was not eligible for
12
award of the HRIS Contract. Pl. Mot. at 8-18. ITC also argues that the scope of the USPTO’s
proposed corrective action is “irrationally overbroad,” because any flaws in the procurement
process for the HRIS Contract do not justify re-issuing the Solicitation and making a new award
decision. Id. at 18-19. And so, ITC requests that the Court set aside the USPTO’s decision to
take corrective action and declare that the USPTO properly awarded the HRIS Contract to ITC.
Id. at 20.
The government and AvantGarde counter in their respective cross-motions that the
USPTO’s decision to take corrective action—and the scope of the proposed corrective action—
are rational under the circumstances presented in this case, because there is a need for the
USPTO to: (1) clarify the type of contract being solicitated and that the USPTO is procuring
labor hours; (2) respond to the issues raises in AvantGarde’s GAO protest; and (3) ensure that
the services procured meet the agency’s needs. Def. Mot. at 14-21; Def.-Int. Mot. at 5. In
addition, the government argues that the USPTO has properly documented and explained the
decision to take corrective action in the administrative record. Def. Mot. at 15. And so, the
government and AvantGarde request that the Court sustain the USPTO’s decision to take
corrective action and dismiss this bid protest dispute. Def. Mot. at 31; see also Def.-Int. Mot. at
2, 5.
For the reasons discussed below, the administrative record in this matter shows that the
USPTO reasonably decided to take corrective action to address perceived prior flaws in the
Solicitation for the HRIS Contract and that the scope of the agency’s proposed corrective action
is reasonable considering AvantGarde’s GAO protest and the agency’s needs. And so, the Court:
(1) DENIES ITC’s motion for judgment upon the administrative record; (2) GRANTS the
government’s and AvantGarde’s respective cross-motions for judgment upon the administrative
record; and (3) DISMISSES the complaint.
A. The USPTO’s Decision To Take Corrective Action Is Reasonable
As an initial matter, the administrative record shows that the USPTO has provided a
reasonable and coherent explanation for its decision to take corrective action in connection with
the Solicitation for the HRIS Contract. It is well-established that this Court reviews the
USPTO’s decision to take corrective action under the Administrative Procedure Act’s “highly
deferential” “rational basis” standard. Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 992
13
(Fed. Cir. 2018) (quoting Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir. 2013)
(internal quotation marks and citation omitted)). And so, the Court will not set aside the
USPTO’s decision to take corrective action, unless the proposed corrective action is
unreasonable under the circumstances presented in this case.
Id.
In its cross-motion for judgment upon the administrative record, the government argues
that the USPTO appropriately determined that it was necessary to re-issue the Solicitation for the
HRIS Contract, so that the agency could clarify the type of contract being solicited, clarify that
the USPTO was procuring labor hours, and respond to the issues raised in AvantGarde’s GAO
protest. Def. Mot. at 16-19. The government also argues that the administrative record shows
that the USPTO’s decision to take this corrective action is reasonable for four reasons: (1) the
USPTO determined that there was a fundamental misunderstanding among the offerors about the
type of contract being procured by the USPTO; (2) the USPTO reasonably determined that it was
necessary to clarify that the agency was procuring labor hours rather than FTEs; (3) corrective
action is necessary to respond to AvantGarde’s GAO protest after the GAO denied the USPTO’s
motion to dismiss; and (4) taking corrective action would ensure that the services procured under
the HRIS Contract meet the USPTO’s needs.
Id. at 14-24. For the reasons set forth below, the
Court agrees.
First, the administrative record shows that the USPTO reasonably determined that there
was a “fundamental misunderstanding” among the offerors regarding the type of contract being
solicited in connection with the HRIS Contract. Specifically, the administrative record shows
that, during the procurement process for the HRIS Contract, several offerors raised questions, or
made statements to the USPTO, indicating that it was unclear that the USPTO was soliciting
proposals for an IDIQ contract. AR Tab 70 at 1966.
In this regard, the Solicitation as amended provides that:
The Government intends to award a single award Indefinite Delivery Indefinite
Quantity (IDIQ) contract for a base year and four one-year option periods . . . . The
Government intends to issue Firm-Fixed-Price Task Orders against the IDIQ.
AR Tab 14 at 385. But, despite the agency’s desire to award an IDIQ contract, the
administrative record shows that the USPTO determined that:
14
There was a fundamental misunderstanding of the Agency’s requirement. The
vendors each thought they were competing for a firm-fixed-price contract where
the Government was procuring a fixed scope of work . . . . There were
communications with the vendors that may have been construed that the Agency
intended a firm-fixed-price contract as opposed to an IDIQ.
AR Tab 70 at 1966. And so, the administrative record also shows that the USPTO concluded
that it needed to take corrective action to clarify the type of contact that the agency intended to
award.
The USPTO’s determination to take corrective action for this reason is reasonable. The
administrative record makes clear that there was uncertainty about the type of contract that the
USPTO was soliciting from the outset of this procurement. In fact, the record evidence shows
that the USPTO found that the initial proposals submitted by several offerors—including
AvantGarde and ITC—incorrectly assumed that the USPTO was procuring a firm-fixed-price
contract. See AR Tab 9 at 207 (stating that AvantGarde’s “Critical Assumptions” refer to “FP”);
AR Tab 10 at 258 (“ITC’s pricing is provided as firm fixed price.”); AR Tab 11 at 295 (“[* * *]
has included our firm-fixed price quote . . . .”).
The record evidence also shows that the USPTO’s efforts to correct this
misunderstanding by amending the Solicitation were unsuccessful. See AR Tab 14 at 383. After
AvantGarde inquired about whether the expectation was for the USPTO to receive a firm-fixed-
price quote under the amended Solicitation, the USPTO’s contracting specialist responded in
error that the agency expected to receive a firm-fixed-price quote. AR Tab 50 at 1582. The
record evidence also shows that ITC and AvantGarde both submitted firm-fixed-prices in their
revised proposals. AR Tab 18 at 472 (stating that AvantGarde’s “Critical Assumptions” refer to
“FP”); AR Tab 19 at 512 (“ITCs pricing is provided as firm fixed price.”). And so, the
government persuasively argues that the administrative record supports the USPTO’s
determination that corrective action is necessary to address misperceptions about the type of
contract that the agency intends to award.
While somewhat less persuasive, the government’s argument that corrective action is also
necessary in this case to clarify that the USPTO is procuring labor hours rather than FTEs under
the HRIS Contract has some support in the administrative record.
15
The administrative record shows that there was confusion—at least on the part of
AvantGarde—about whether the USPTO intended to procure labor hours during the procurement
process for the HRIS Contract. Specifically, the administrative record shows that, during the
initial round of the procurement, the USPTO found that AvantGarde was unclear regarding
whether the agency was procuring labor hours or FTEs. AR Tab 13 at 379-80; AR Tab 70 at
1966; see also AR Tab 18 at 472 (stating that AvantGarde’s critical assumptions state “basis of
hours on FTE at 1880 (discounted for USPTO from standard 1900)”). To clarify that the agency
was in fact seeking labor hours, rather than FTEs, the USPTO amended the Solicitation by
updating the pricing table to show “1900” as the “Quantity” for each CLIN and stating that CLIN
0007 was “Optional.” See AR Tab 14 at 383–87.
The agency also responded to a question from AvantGarde regarding the labor hours for
CLIN 0007 Data Analytics by stating that:
[AvantGarde should] leave the 1900 hours in the block and just fill in the rate and
total for the CLIN. The CLIN [0007] is optional but the CLIN table should still be
completed to show what the price would be for the CLIN if it were in fact to be
funded.
AR Tab 17 at 468. The administrative record shows, however, that AvantGarde remained
unclear about whether the USPTO required labor hours or FTEs. See AR Tab 20 at 514 (stating
that AvantGarde “submitted a price quote [in its revised proposal] that [did] not conform to the
instructions in the RFQ”). And so, there is some support in the record evidence for the USPTO’s
decision to take corrective action to clarify that the agency intends to procure labor hours.3
The Court is also not persuaded by ITC’s argument that the USPTO’s decision to take
corrective action is irrational, because the amended Solicitation is not ambiguous with regards to
the agency’s requirements. Pl. Mot. at 9-14. As the Federal Circuit has recognized, the USPTO
may take corrective action within the context of this bid protest “to correct perceived prior error
in the procurement process or, in the absence of error, to act to improve the competitive
process.” Dellew Corp. v. United States, 855 F.3d 1375, 1378 n.2 (Fed. Cir. 2017); see also Dell
Fed.
Sys., 906 F.3d at 986 n.1. And so here, the Court need not find that the amended
3
As ITC correctly observes in its motion for judgment upon the administrative record, the administrative
record also shows that ITC and other offerors complied with USPTO’s requirement. Pl. Mot. at 11; AR
Tab 19 at 502; AR Tab 22 at 598. But, AvantGarde’s confusion about the USPTO’s requirement is borne
out in the administrative record.
16
Solicitation is ambiguous to conclude that the USPTO reasonably decided to take steps to correct
prior perceived flaws in the Solicitation regarding the agency’s requirements.
The record evidence also shows that the USPTO appropriately decided to take corrective
action in response to AvantGarde’s GAO protest, after the GAO denied the agency’s motion to
dismiss. In its motion for judgment upon the administrative record, ITC argues that the
USPTO’s decision to take corrective action in response to AvantGarde’s GAO protest is
irrational, because that protest would have been denied or dismissed. Pl. Mot. at 15. But, as this
Court has long recognized, it is not necessary for the USPTO to conclude that the protest is
certain to be sustained before it may take corrective action. Data Monitor Sys., Inc. v. United
States, 74 Fed. Cl. 66, 74 (2006) (citations omitted).
In this case, the administrative record also shows that the USPTO reasonably decided to
take steps to clarify its requirements for the HRIS Contract after the GAO denied the agency’s
motion to dismiss AvantGarde’s GAO protest. Notably, the administrative record makes clear
that the USPTO unsuccessfully moved to dismiss that protest upon the grounds that AvantGarde
lacked standing, the protest was untimely, and that the amended Solicitation was not ambiguous.
AR Tab 46 at 1347-51; AR Tab 51 at 1614. While ITC makes similar arguments in this
litigation—to show that the USPTO’s decision to take corrective action is irrational—the GAO
rejected these arguments and allowed AvantGarde’s protest to proceed. AR Tab 51 at 1614.
Given this, ITC simply has not shown that the USPTO’s decision to take corrective action in
response to AvantGarde’s GAO protest lacks a rational basis.4
Lastly, the government persuasively argues that the USPTO reasonably determined that
taking corrective action in this case will ensure that the services procured under the HRIS
Contract meet the agency’s needs. In its April 30, 2018, memorandum regarding implementation
of the agency’s proposed corrective action, the USPTO explains that, “a firm-Fixed-Price
contract type for the Task Orders [to be issued under the HRIS Contract] does not provide the
flexibility that the program office requires to operate successfully.” AR Tab 71 at 1968. The
agency also explains that it needs to change the source selection process from lowest price
4
The Court is also not persuaded by ITC’s argument that the USPTO’s decision to take corrective action
is irrational because AvantGarde is not eligible for award of the HRIS Contract. As discussed above, it is
not necessary for AvantGarde’s protest to be sustained in order for the USPTO to take corrective action in
this case. Data Monitor Sys., Inc. v. United States, 74 Fed. Cl. 66, 74 (2006).
17
technically acceptable to tradeoff, because “a Tradeoff Process will result in a contract award
that best meets the requirements of the [agency’s] program office.”5 Id. Because the record
evidence shows that the USPTO has provided a reasonable and coherent explanation for its
decision to take corrective action to ensure that the HRIS Contract best meet the agency’s
procurement needs, the Court will not set aside the agency’s decision.
B. The Scope Of The USPTO’s Corrective Action Is Reasonable
ITC’s claim that the scope of the USPTO’s corrective action is overly broad, because it
“bears no rational relation to the purported procurement flaws and must be set aside,” also lacks
support in the administrative record. Pl. Mot at 19. In its motion for judgement upon the
administrative record, ITC argues that the Court should enjoin the USPTO from re-issuing the
Solicitation for the HRIS Contract and accepting new proposals, because the USPTO could use
data contained in AvantGarde’s current proposal to determine AvantGarde’s proposed price. Id.
at 18-19.
But, as the Federal Circuit recently confirmed in Dell Federal Systems, L.P. v. United
States, “corrective action only requires a rational basis for its implementation.” Dell Fed. Sys.,
906 F.3d at 991. And so, the USPTO’s corrective action plan in this case need not be the only—
or even the best—plan for correcting the perceived prior flaws in the procurement process for the
HRIS Contract. Rather, the USPTO’s corrective action must simply be rational.
As discussed above, the record evidence in this case shows that the USPTO’s proposed
corrective action will clarify the agency’s requirements and make changes to the procurement
process for the HRIS Contract to best meet the agency’s needs. See generally AR Tabs 70-71.
And so, ITC has simply not shown that the scope of the USPTO’s corrective action is irrational
or overly broad based upon the circumstances of this case.
C. ITC Is Not Entitled To Injunctive Relief
As a final matter, ITC has also not demonstrated that it is entitled to the injunctive relief
that it seeks in this matter because, ITC has not prevailed upon the merits of any of its claims.
5
The administrative record also shows that the USPTO adequately documented the reasons for the
agency’s corrective action in the agency’s two memoranda for the record, which set forth the reasons for
the decision to take corrective action and the plan for implementing the corrective action. See generally
AR Tabs 70-71.
18
This Court has held that a plaintiff that has not succeeded upon the merits of its claims cannot
prevail upon a request for injunctive relief. Argencord Mach. & Equip., Inc. v. United States, 68
Fed. Cl. 167, 176 (2005). And so, the Court must DENY ITC’s request for injunctive relief.
V. CONCLUSION
In sum, ITC has not shown that any of its challenges to the USPTO’s decision to take
corrective action are supported by the administrative record. Rather, the record evidence in this
case shows that the USPTO reasonably decided to take corrective action after determining that
there were “fundamental misunderstandings” among offerors about the agency’s requirements
during the procurement process for the HRIS Contract. The record evidence also shows that the
scope of the agency’s proposed corrective action is reasonable under the circumstances of this
case.
And so, for the foregoing reasons, the Court:
1. DENIES ITC’s motion for judgment upon the administrative record;
2. GRANTS the government’s and AvantGarde’s respective cross-motions for
judgment upon the administrative record; and
3. DISMISSES the complaint.
The Clerk shall enter judgment accordingly.
Each party shall bear their own costs.
Some of the information contained in this Memorandum Opinion and Order may be
considered protected information subject to the Protective Order entered in this matter on April
17, 2018. This Memorandum Opinion and Order shall therefore be filed UNDER SEAL. The
parties shall review the Memorandum Opinion and Order to determine whether, in their view,
any information should be redacted in accordance with the terms of the Protective Order prior to
19
publication. The parties shall FILE a joint status report identifying the information, if any, that
they contend should be redacted, together with an explanation of the basis for each proposed
redaction on or before March 15, 2019.
IT IS SO ORDERED.
s/ Lydia Kay Griggsby
LYDIA KAY GRIGGSBY
Judge
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