Dellew Corporation v. United States

128 Fed. Cl. 187, 2016 U.S. Claims LEXIS 1351, 2016 WL 5231840
United States Court of Federal Claims·Decided August 26, 2016·No. 16-671 C·Published·Cited by 6 cases

Opinion

OPINION AND ORDER

SMITH, Senior Judge

This bid protest arises out of the problem at the very core of procurement law. We do not trust the discretion of procurement officials or contractors, but we cannot make rational procurement decisions without that discretion. This dispute occurs at the border where the law and regulations set up a check point of objective criteria. These are designed to eliminate and contain that untrustworthy and unquantifiable discretion. Objective decisions are so much easier and honest, but discretion breaks through our border against the nonobjective. It breaks through for one reason. It is needed, and it is essential in matching the objective facts of offer-ors’ proposals with the circumstances and purposes of each specific government procurement.

This problem is particularly emphasized here because the defendant-intervenor’s narrow margin of victory over the plaintiff appears to be the result of a few factors where discretion played the key role. In this stylized almost ritualistic version of the private procurement world, gut instincts are to be suppressed. - Procedures are designed as much to limit the discretion of contracting officers as to obtain the best product for the government. The scheme that has been created inevitably leads to procurement decisions that, on a number of occasions, lack transparency. Despite this, the Court must decide bid protests as they arise. In this case, the Contracting Officer could have reasonably awarded the contract to either Del-lew or TSI, but he ultimately awarded the procurement to TSI. The Court, however, cannot overturn this decision, as it is clear that the Contracting Officer acted within the zone of reason and within the bounds of his discretion in making this close call. It was not arbitrary and capricious or an abuse of discretion based upon the facts available in the Administrative Record.

This post-award bid protest comes before the Court on the parties’ cross-motions for judgmient on the Administrative Record. Plaintiff, Dellew Corporation (“Dellew”), challenges the United States Army Contracting Command—Roek Island’s (the “Agency”) Solicitation No. W52P1J-13-R-0038 (“Solicitation,” “Request for Proposals,” or “RFP”). Plaintiff alleges that the Agency failed to follow the RFP’s stated evaluation criteria and applicable procurement law in evaluating past performance, and it failed to perform and/or document an adequate cost realism analysis. Plaintiff requests that the Court declare that (1) the award of the contract to TSI was arbitrary, capricious, and contrary to law and the terms of the RFP; (2) the contract awarded to TSI must be terminated for convenience; and (3) the Agency be directed to reevaluate proposals in accordance with the RFP criteria and the FAR, and award the contract to the offeror that represents the best value. For the reasons explained below, plaintiffs motion for judgment on the Administrative Record is denied, and defendant and defendant-intervenors’ cross-motions for judgment on the Administrative Record are granted.

I. Factual and Procedural History

On or about September 27,2013, the Agency issued Solicitation No. W52P1J-13-R-0038 for logistical support services at Scho-field Barracks, Hawaii. Amended Complaint (hereinafter “Am. Compl.”) at 3. The RFP was issued as a set-aside for small business *190 Basic Ordering Agreement (“BOA”) holders in the Agency’s Enhanced Army Global Enterprise (“EAGLE”) program. Id. at 4. The RFP contemplated the award of “a single combination Cost Plus Fixed Fee (“CPFF”) contract with a Firm Fixed Price CLIN (“Transition CLIN”) task order with a 60-day transition period, one (1) ten (10) month base period and four (4) one (1) year options.” Id. The fixed price portion was only applicable to the transition period, and the remainder of the contract was CPFF. Id.

The RFP evaluated pi’oposals in three phases. In Phase 1, the Agency made sure the offeror had the required facility security clearance. Id. In Phase 2, offerors’ technical proposals were evaluated on an Aeeeptable/Unaeceptable basis. Id. In Phase 3, offers were evaluated on Past Performance and Cost/Price factors. Id. The Agency then conducted a best value tradeoff analysis. Id. According to the RFP, the total evaluated price must include the total of an offeror’s proposed price for the base period, four subsequent option periods plus one-half of the fourth option, and any identified probable cost adjustments resulting from the Agency’s cost realism analysis. Id. The RFP stated that the “Firm Fixed Price and Cost Proposals will be evaluated on price analysis and cost realism IAW FAR 16.404-1, Proposal Analysis Techniques.” Id. at 4-5. The RFP also required each offeror (and its major subcontractors/teammates) to provide historical and budgeted indirect rate data for several items including overhead, general and administrative (“G & A”) expenses, and fringe benefit costs. Id.

In response to the RFP, the Agency received proposals from 21 offerors. Id. at 5. Fourteen offerors made it to Phase 2. Id. Six offerors made it to Phase 3, including Dellew and TSI. Id. The Agency then engaged in discussions with the remaining offerors. Id. During discussions, Dellew agreed to cap its G & A rates for the duration of the contract. Id. In its discussions with TSI, the Agency asked TSI to cap its G & A rates twice, to which TSI refused. Id. at 6.

On or about October 27, 2014, the Agency completed its eosVprice evaluation of proposals, including a cost realism analysis. Id. at 7. As part of the analysis, the Agency considered the realism of each offerors’ indirect rates, including G & A rates. Id. The Agency’s Cost/Price Team (“CPT”) performed the analysis. Id. The Source Selection Evaluation Board (“SSEB”), the Source Selection Advisory Council (“SSAC”), and the Source Selection Authority (“SSA”) “fully relied” on the CPT’s cost realism analysis. Id. at 8. Based on total evaluated prices, TSI was the lowest priced technically acceptable offeror (***), and Dellew was the second lowest priced technically acceptable offeror (***). Id. TSI and Dellew were both rated Substantial Confidence on the past performance factor. Id.

On November 14, 2014, the Agency accepted TSI’s final proposal and sent TSI an award package which included a contract. Id. at 8-9. The contract included a cap on TSI’s G & A rate. Id. at 9. TSI objected to the inclusion of the G & A rate cap in the contract. Id. The Agency informed TSI that it would lose the award unless TSI agreed to cap the G & A rate. Id. TSI signed the contract. Id.

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Dellew Corporation v. United States, 128 Fed. Cl. 187, 2016 U.S. Claims LEXIS 1351, 2016 WL 5231840 (uscfc 2016).

128 Fed. Cl. 187 (Dellew Corporation v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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