Harmonia Holdings Group, LLC v. United States

Procedural entryThis page is a short order in Harmonia Holdings Group, LLC v. United States. Read the opinion of the Court — 20 F.4th 759
Court of Appeals for the Federal Circuit·Decided December 7, 2021·No. 20-1538·Published

Opinion

Case: 20-1538 Document: 52 Page: 1 Filed: 12/07/2021

United States Court of Appeals for the Federal Circuit ______________________

HARMONIA HOLDINGS GROUP, LLC, Plaintiff-Appellant

v.

UNITED STATES, DEV TECHNOLOGY GROUP, INC., Defendants-Appellees ______________________

2020-1538 ______________________

Appeal from the United States Court of Federal Claims in No. 1:19-cv-00674-LAS, Senior Judge Loren A. Smith. ______________________

Decided: December 7, 2021 ______________________

WALTER BRAD ENGLISH, Maynard, Cooper & Gale, PC, Huntsville, AL, argued for plaintiff-appellant. Also repre- sented by EMILY J. CHANCEY, MICHAEL W. RICH.

DAVID MICHAEL KERR, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for defendant-appellee United States. Also represented by DEBORAH ANN BYNUM, JEFFREY B. CLARK, ROBERT EDWARD KIRSCHMAN, JR.

WILLIAM SHOOK, Law Offices of William A. Shook, PLLC, Washington, DC, argued for defendant-appellee Case: 20-1538 Document: 52 Page: 2 Filed: 12/07/2021

Dev Technology Group, Inc. Also represented by STEVEN BARENTZEN, Law Office of Steven Barentzen, Washington, DC. _____________________

Before REYNA, SCHALL, and WALLACH, ∗ Circuit Judges.

REYNA, Circuit Judge. Harmonia Holdings Group, LLC appeals a decision by the U.S. Court of Federal Claims granting the defendants United States and Dev Technology Group, Inc.’s Cross-Mo- tion for Judgment on the Administrative Record. Harmo- nia contends that the Court of Federal Claims erred in determining that Harmonia waived its right to assert be- fore the court the same challenges that it asserted in its pre-award protest to U.S. Customs and Border Protection. We agree and reverse the Court of Federal Claims’ decision on waiver; vacate the Court of Federal Claims’ decision that Customs and Border Protection did not act in an arbi- trary or capricious manner in evaluating Harmonia’s pro- posal and in making an award decision; and remand for the Court of Federal Claims to determine in the first instance the merits of Harmonia’s pre-award protest to Customs and Border Patrol and what relief, if any, Harmonia is en- titled to based on its pre-award protest. Because the Court of Federal Claims could determine on remand that Harmo- nia is entitled to submit a wholly revised proposal requir- ing a new technical evaluation by Customs and Border Protection, we decline, on mootness grounds, to reach the merits of the Court of Federal Claims’ decision with respect to Customs and Border Protection’s technical evaluation of Harmonia’s proposal submitted on November 13, 2018.

∗ Circuit Judge Evan J. Wallach assumed senior sta- tus on May 31, 2021. Case: 20-1538 Document: 52 Page: 3 Filed: 12/07/2021

HARMONIA HOLDINGS GROUP, LLC v. UNITED STATES 3

BACKGROUND U.S. Customs and Border Protection (“CBP”) is an agency within the U.S. Department of Homeland Security (“DHS”) with a broad mandate to provide security at the nation’s borders. See, e.g., 6 U.S.C. § 211(c). CBP is a law enforcement organization charged with controlling and monitoring traffic at the borders, including the flow of ve- hicles, cargo, and people. See id.; see also J.A. 10292. CBP’s Cargo Systems Program Directorate (“CSPD”) man- ages a commercial trade processing system called the Au- tomated Commercial Environment (“ACE”), which “helps reduce the Nation’s vulnerability to changing threats with- out diminishing economic security, by providing threat awareness, prevention, and protection for the homeland.” J.A. 10293. “ACE is the backbone of CBP trade processing and risk management activities and the key to implement- ing many of the agency’s trade transformation initiatives.” Id. ACE provides CBP and DHS automated tools and in- formation for making admissibility decisions before ship- ments reach U.S. borders and supports cargo revenue collection. Id. Further, ACE “is not a single operating sys- tem but a collection of applications built on diverse multi- vendor technological platforms.” Id. CPSD manages ACE by developing and deploying software code, maintaining existing system architecture, and developing new architec- ture to support the expanding ACE environment. Id. The Competition On July 12, 2018, CBP issued a solicitation requesting quotes for “application development and operation and maintenance support services” as part of CSPD’s effort to develop and support cargo systems applications. Case: 20-1538 Document: 52 Page: 4 Filed: 12/07/2021

J.A. 10292. The solicitation involved six tasks 1: (1) Con- tractor Transition In; (2) Contractor Transition Out; (3) Cargo Systems Application Development; (4) Dev/Ops Configuration and Release Management; (5) IT System Se- curity Analysis; and (6) Operations and Maintenance. J.A. 10297–307, 11274–87. The solicitation required each offeror to submit a proposal in two volumes, each contain- ing certain specified information. See J.A. 10276–77. The solicitation explained that the acquisition would be conducted in two phases. J.A. 10235. In Phase I, titled “Oral Presentations,” CBP would seek to understand the offerors’ responses to certain questions provided by CBP relating to CBP’s requirements. Id. CBP would evaluate the Phase I responses “holistically with an overall adjec- tival quality rating” and advise the offerors of their likeli- hood of being selected. J.A. 10280–81. The intent of this procedure was “to minimize proposal development costs for those [o]fferors with little or no chance of receiving an award.” J.A. 10235. Nevertheless, notwithstanding CBP’s advice at Phase I, all offerors that participated in Phase I could participate in Phase II. Id. In Phase II, titled “Written Responses,” CBP would evaluate the offerors’ proposals in accordance with certain evaluation criteria and could make an award without ne- gotiations to the proposal deemed the best value to the gov- ernment. Id. The evaluation criteria included five factors: • Factor 1: Technical Excellence o Sub-Factor 1: Tasks 3, 4, and 6 o Sub-Factor 2: Task 5 o Sub-Factor 3: Risk Mitigation Plan

1 The original solicitation included seven tasks, but Amendment 4 dated September 7, 2018, eliminated one task and renumbered the tasks prior to the parties’ sub- mission of their initial proposals. See J.A. 11274. Case: 20-1538 Document: 52 Page: 5 Filed: 12/07/2021

HARMONIA HOLDINGS GROUP, LLC v. UNITED STATES 5

• Factor 2: Management Approach o Sub-Factor 1: Staffing Plan/Key Personnel o Sub-Factor 2: Program Management o Sub-Factor 3: Sub-Contracting Manage- ment/Teaming Plan • Factor 3: Quality Assurance o Sub-Factor 1: Transition-In Plan o Sub-Factor 2: Transition-Out Plan • Factor 4: Past Performance • Factor 5: Price J.A. 10281–85, 13062–63. The solicitation also explained that the factors decreased in importance from factor 1 to factor 5: Factor 1 is more significantly important than Fac- tors 2, 3, and 4; Factors 2 and 3 are of equal im- portance and significantly more important than Factor 4. The sub-factors are hereby described as follows: all sub-factors within Factors 1, 2 and 3 are of equal importance to the other sub-factors within the same Factor. The non-Price Factors, when combined, are significantly more important than the Price Factor (Factor 5). J.A. 10286. For Factors 1–3, the solicitation explained that CBP would assess whether each offeror’s proposal “exhibit[ed] a thorough understanding of the complexity and magnitude of the requirement and [the] likelihood that the [o]fferor will be successful in performance under each tasking of the [statement of work].” Id. CBP would assign an overall ad- jectival rating for each of the three factors and assign a risk rating for each of their sub-factors. Id.

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