NKF Engineering, Inc. v. United States

33 Cont. Cas. Fed. 74,264, 9 Cl. Ct. 585, 1986 U.S. Claims LEXIS 903
CourtUnited States Court of Claims
DecidedFebruary 27, 1986
DocketNo. 723-85C
StatusPublished
Cited by9 cases

This text of 33 Cont. Cas. Fed. 74,264 (NKF Engineering, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NKF Engineering, Inc. v. United States, 33 Cont. Cas. Fed. 74,264, 9 Cl. Ct. 585, 1986 U.S. Claims LEXIS 903 (cc 1986).

Opinion

OPINION

WIESE, Judge.

Plaintiff NKF Engineering, Inc. (“NKF”) brought this suit seeking injunctive relief barring the United States Navy from proceeding with an intended contract award to Weidlinger Associates (“Weidlinger”), the third party in the action. The dispute centers on the Navy’s decision to disqualify NKF for award after that company had initially been selected as the apparent competitive winner in a negotiated procurement. The decision to disqualify was based upon the conclusion that NKF had obtained, or could be seen as having obtained, an unfair competitive advantage— reflected in its “best and final” offer to the Government—through its having hired, as a consultant, the former deputy director of the same Navy sub-group concerned with the contract award in question. Preservation of the integrity of the procurement process was thus thought to require NKF’s disqualification.

Based upon findings of fact previously entered by the court in an order of December 30, 19851 (reproduced, in part, as an appendix to this opinion) and the briefs thereafter submitted by the parties, the court entered an order on February 11, 1986 permanently enjoining the Navy from proceeding with a contract award to any offeror other than NKF. The order also provided instructions to the contracting officer with regard to any reexamination of the disqualification issue his office might deem appropriate to undertake. This opinion provides the reasons for that order in more detail.

Facts2

On March 22, 1983, the Naval Sea Systems Command (“NAVSEA”) issued Request For Proposals N00024-83-R-4175(Q) (“RFP 4175”) calling for technical and cost proposals to provide engineering services in support of Navy ships and ship systems. The proposal request contemplated award of a cost plus fixed fee “level of effort” contract involving 110,000 hours of engineering services covering a range of technological disciplines relating to ship survivability.

RFP 4175 originated in the survivability and readiness sub-group of the hull engineering group of NAVSEA. This subgroup, identified in Navy code parlance as “SEA 55X”, had as its deputy director a Mr. Yip Park—a civilian employee of the [588]*588Navy with approximately 30 years of experience in the field of weapons effects and ship survivability and protection.

Mr. Park had been designated the Contracting Officer’s Technical Representative for RFP 4175. In addition, he had also been named chairman of the Contract Award Review Panel (“CARP”), the group charged with overseeing the contractor selection process. In these dual capacities— one as technical representative and the other as CARP chairman—Mr. Park’s responsibilities included development of the following matters pertaining to RFP 4175: the evaluation plan pursuant to which the offerors’ initial technical proposals were to be evaluated, the Government’s estimates of the labor mix and the range of costs it considered reasonable, and the technical vs. cost weighting formula. Also, in his role as CARP chairman, Mr. Park learned the number of offerors who had chosen to participate in the procurement effort and their relative rankings following initial evaluation. More particularly, Mr. Park knew that of the five offerors involved, two— NKF and Weidlinger—had received nearly identical rankings on their technical proposals but stood over $2.5 million apart on cost with NKF being the higher of the two.

In late August of 1984, roughly one year after the initial round of proposals under RFP 4175 had been received and evaluated by the Government, Mr. Park announced his retirement from Government service. At about the same time, Mr. Park contacted several private companies concerning possible employment with them. One of these was NKF, where Mr. Park spoke with company president George Amir.

During the interviewing process, Mr. Amir asked Mr. Park to check with appropriate NAYSEA officials to verify that NKF’s employment of Mr. Park would not create a conflict of interest. Although he in fact never checked, Mr. Park later informed Mr. Amir that he had received assurances from NAVSEA legal counsel. With this confirmation, Mr. Amir offered Mr. Park a non-exclusive consulting job, and they soon signed an agreement. At the time this agreement was entered into, neither Mr. Amir nor anyone else at NKF was aware that Mr. Park had any involvement with RFP 4175 beyond having knowledge of its technical requirements as stated in the “Scope of Work”.

Some three months after Mr. Park began work with NKF, the contracting officer requested the submission of best and final offers under RFP 4175. Included as part of this request was an amendment to the solicitation, “Amendment 5”, which substantially revised the Statement of Work contemplated for RFP 4175. Amendment 5 greatly increased the importance of a particular low-cost technical area of the work statement, and necessarily decreased the relative importance of the high cost technical areas. Both NKF and Weidlinger viewed Amendment 5 as requiring a sweeping revision of their initial proposals. The Navy too shared much the same sense of the situation. In-house documentation reveals that Amendment 5 became necessary to accommodate a “major increase of work in the 55X2 Division” that had not been planned for in the initial request for proposals. This change in requirements was aimed at restructuring the expected scope of work so as “to provide equal weighting of effort between 55X1 and 55X2 [the coordinate branches of 55X] * *

Also included in the request for a best and final offer sent to NKF was an attachment in which the Government identified aspects of NKF’s initial cost proposal judged to be in need of reevaluation and improvement. The attachment clearly called for a reduction in all of the proposed costs mentioned. These suggestions, combined with Amendment 5’s discernible emphasis on lower cost contract services, persuaded NKF that, in order to be competitive, its best and final cost proposal would have to be much lower than its initial proposal had been.

Thus alerted, NKF re-costed the entirety of its proposal, an effort that led to a price reduction from an initial proposal figure of $16.7 million to one of $11.2 million—a downward revision of approximately 33 [589]*589percent. When all the procurement competitors submitted their best and final offers in March of 1984, this last proposal by NKF was the lowest. The other offerors too had reduced their final price, but none by more than 19 percent.

In the technical evaluations of the best and final offers, Weidlinger received the highest score, while NKF was rated second. However, when the CARP for RFP 4175 met and applied its predetermined weighting formula to both the technical and cost criteria, NKF received the highest overall score. Accordingly, on July 2, 1985, the CARP issued its final report recommending award to NKF.

Shortly after this report’s issuance, the contract negotiator on RFP 4175 voiced his concern over a possible conflict of interest involving NKF. He discussed the problem with Mr. Ralph Mills, head of the contracts division responsible for RFP 4175 and supervisor of the contracting officer. Mr. Mills then reviewed the situation with a number of other NAYSEA officials and, with their concurrence, decided to disqualify NKF on the ground of conflict of interest.

The triggering event which led to this disqualification was NKF’s submission of its best and final cost proposal.

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Bluebook (online)
33 Cont. Cas. Fed. 74,264, 9 Cl. Ct. 585, 1986 U.S. Claims LEXIS 903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nkf-engineering-inc-v-united-states-cc-1986.