Office Design Group v. United States

951 F.3d 1366

• Court: Court of Appeals for the Federal Circuit
• Decided: March 6, 2020
• Docket: 19-1337
• Status: Published

Opinion

Case: 19-1337 Document: 70 Page: 1 Filed: 03/06/2020

United States Court of Appeals for the Federal Circuit ______________________

OFFICE DESIGN GROUP, Plaintiff-Appellant

v.

UNITED STATES, CUNA SUPPLY, LLC, Defendants-Appellees

GOVSOLUTIONS, INC., Defendant ______________________

2019-1337 ______________________

Appeal from the United States Court of Federal Claims in No. 1:18-cv-01147-RHH, Senior Judge Robert H. Hodges, Jr. ______________________

Decided: March 6, 2020 ______________________

JOSEPH ANTHONY WHITCOMB, Whitcomb, Selinsky, PC, Denver, CO, argued for plaintiff-appellant. Also repre- sented by TIMOTHY TURNER.

TANYA KOENIG, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washing- ton, DC, argued for defendant-appellee United States. Also represented by JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN, JR., DOUGLAS K. MICKLE. Case: 19-1337 Document: 70 Page: 2 Filed: 03/06/2020

MATTHEW THOMAS SCHOONOVER, Koprince Law LLC, Lawrence, KS, for defendant-appellee Cuna Supply, LLC. ______________________

Before LOURIE, REYNA, and HUGHES, Circuit Judges. REYNA, Circuit Judge.

Office Design Group appeals from an order of the United States Court of Federal Claims granting judgment on the administrative record for the government and Cuna Supply, LLC. Because Office Design Group fails to estab- lish that the government’s evaluation of its proposal was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, we affirm. I. On May 5, 2017, the United States Department of Vet- erans Affairs (“VA”) issued five Requests for Proposals (“RFP”) for the provision of healthcare furniture and re- lated services for VA facilities. The five RFPs were essen- tially identical, except that each related to a separate geographic region. Each RFP contemplated awarding three to five contracts for indefinite delivery, indefinite quantity, with each contract having a five-year base period and one five-year option period. The RFP 1 established that the VA would award con- tracts based on a best-value trade off selection process that considered three primary evaluation factors: Technical Ca- pability, Past Performance, and Price. The VA deemed

1 To simplify, this opinion will refer to RFP in the singular when discussing the RFPs’ requirements and evaluation criteria. Case: 19-1337 Document: 70 Page: 3 Filed: 03/06/2020

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Technical Capability more important than Past Perfor- mance, and Past Performance more important than Price. Central to this appeal is Technical Capability subfac- tor 3. Subfactor 3 specified that an offeror’s technical pro- posal must include a narrative “addressing each of the items listed under SV1, SV2, SV3, and SV4 as defined” in the Statement of Work (“SOW”). J.A. 128. SV1, SV2, SV3, and SV4 are codes corresponding to the specific services and products sought by the RFP. Subfactor 3 also required an offeror to address eight “key” elements, which included an offeror’s staffing plan, inventory and cataloging process, personnel experience and qualifications, and process used for warranty repairs. Subfactor 3 also provided that the VA would evaluate each offeror’s technical volume of its proposal, i.e., its “tech- nical proposal,” based on the offeror’s ability “to meet all services as defined in the Statement of Work.” The RFP noted that an “unacceptable” rating for any technical sub- factor would result in an overall “unacceptable” technical proposal. An offeror with an unacceptable Technical Capa- bility subfactor was ineligible for a contract award. The RFP also included “Attachment 15,” an evaluation questionnaire containing thirty-three yes or no questions regarding the service requirements from the SOW and the eight key elements listed under subfactor 3. The question- naire was divided into four sections, each corresponding to the four SOW sections—SV1, SV2, SV3, SV4. Reproduced below are the first seven questions of Attachment 15, which correspond to SV1 of the SOW. Case: 19-1337 Document: 70 Page: 4 Filed: 03/06/2020

J.A. 166 In an amendment to the RFP, the VA clarified that At- tachment 15 was to be used by the agency as a checklist to evaluate offerors’ technical proposals. The amendment pro- vided that “Attachment 8 Sample Project Tech Evaluation and Attachment 15 Service Technical Questions are infor- mational only. They are the checklists that will be used to evaluate the technical proposals.” J.A. 141 (emphasis added). During contract evaluation, the VA assigned an offeror 2 points for each question in Attachment 15 that the offeror sufficiently addressed in its technical proposal. To receive a passing score for its technical proposal, an offeror needed to receive a minimum of 40 points, i.e., a “yes” for twenty of the thirty-three questions in Attachment 15. Office Design Group (“ODG”) submitted a proposal for all five regions. The VA assigned ODG an unacceptable rating for its technical proposal, rendering ODG’s overall proposal ineligible for award. The VA noted in its evalua- tion report that it was only able to locate responses to six of the thirty-three questions in Attachment 15 in ODG’s technical proposal, resulting in a failing score of 12 points. The VA explained that ODG’s technical proposal “lacked detail” and contained “vague info.” J.A. 120. The VA also Case: 19-1337 Document: 70 Page: 5 Filed: 03/06/2020

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noted that ODG’s technical proposal failed to address the following seven SOW service requirements: (1) a staffing plan, (2) information regarding inventory, cataloging, and protecting VA property information, (3) information about protecting furniture from damage and loss, (4) information about executing a warranty, (5) information about provid- ing AUTOCAD or PDF files, (6) information about its team members’ experience in the healthcare and federal indus- tries, and (7) information about whether its personnel had knowledge about life safety, infection control, and patient privacy standards. The VA awarded contracts to nine offerors under each of the five RFPs. Each of the awardees earned at least 40 points for its technical proposal. ODG filed a bid protest before the Government Accountability Office (“GAO”), alleging that the VA (1) unreasonably and disparately evaluated its technical proposal in comparison to the awardees’ technical proposals and (2) improperly relied on Attachment 15 to evaluate its technical proposal. The GAO denied ODG’s protest on both grounds. ODG then filed a bid protest before the Claims Court, alleging the same two grounds. 2 The Claims Court determined that the VA’s use of Attachment 15 was proper and that ODG had not shown that the VA’s alleged disparate treatment was prejudicial error. The Claims Court denied ODG’s motion for judgment on the administrative record and granted the government’s and the defendant-intervenor’s cross-motion for judgment on the administrative record. ODG timely appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(3).

2 ODG also alleged in the Claims Court that four of these offerors colluded and provided substantially the same technical proposal. ODG, however, does not raise the collusion issue on appeal. Case: 19-1337 Document: 70 Page: 6 Filed: 03/06/2020

DISCUSSION We review the grant of a motion for judgment on the administrative record in a bid protest action de novo. Glenn Defense Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir. 2013). In a bid protest case, the inquiry is whether the agency’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, and if so whether the error is prejudicial.” Id.; see also Alabama Aircraft Indus., Inc. Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009). “The court’s task is to determine whether ‘(1) the procurement official’s decision lacked a rational basis; or (2) the procurement pro- cedure involved a violation of regulation or procedure.’” Savantage Fin. Servs., Inc. v. United States, 595 F.3d 1282, 1285–86 (Fed. Cir. 2010) (quoting Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009)). On appeal, ODG raises the same two challenges it raised before the GAO and the Claims Court. First, ODG argues that the VA’s reliance on Attachment 15 during the evaluation process was inconsistent with the terms of the RFP. Second, ODG argues that the VA disparately evalu- ated its technical proposal in comparison to those of vari- ous awardees. We address each argument in turn. I. ODG argues that the VA unreasonably strayed from the terms of the RFP by relying on Attachment 15 to eval- uate its technical proposal. According to ODG, “the prob- lem for the VA, is that it never announced . . . that it planned to use responses to Attachment 15 . . . as the ru- bric against which proposals were scored and evaluated.” Appellant’s Br. 13. We reject this argument. The VA informed all offerors, including ODG, that At- tachment 15 would be used to evaluate technical proposals. An amendment to the RFP noted that Attachment 15 was to be used as a “checklist[]” that “will be used to evaluate Case: 19-1337 Document: 70 Page: 7 Filed: 03/06/2020

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the technical proposals.” J.A. 141. Thus, contrary to ODG’s contention, the record establishes that the VA pro- vided clear, reasonable notice that the VA planned to use Attachment 15 to evaluate proposals. II. ODG argues that the VA disparately evaluated its technical proposal. According to ODG, although its tech- nical proposal was sufficiently similar to the awardees’ pro- posals, the VA improperly assigned ODG’s technical proposal a failing score. ODG provides seven examples of the VA’s alleged disparate treatment of its technical pro- posal. The Federal Acquisition Regulation requires an agency to treat offerors fairly and impartially. 48 C.F.R. § 1.602– 2(b) (“Contracting officers shall . . . ensure that contractors receive impartial, fair, and equitable treatment.”). This ob- ligation necessarily encompasses an agency’s obligation to fairly and impartially evaluate all proposals. Equal evalu- ation of proposals, however, does not translate into identi- cal evaluations. An agency is under no obligation to assign dissimilar proposals the same evaluation rating. 48 C.F.R. § 1.102–2(c)(3) (“All contractors and prospective contrac- tors shall be treated fairly and impartially but need not be treated the same.” (emphasis added)). Upon review, it appears that this court has not yet ar- ticulated a standard for evaluating disparate evaluation claims. The Claims Court, however, has done so, having adjudicated numerous disparate evaluation claims. To prevail at the Claims Court, a protestor must show that the agency unreasonably downgraded its proposal for deficien- cies that were “substantively indistinguishable” or nearly identical from those contained in other proposals. See En- hanced Veterans Solutions, Inc. v. United States, 131 Fed. Cl. 565, 588 (2017); see also Red River Comput. Co. v. United States, 120 Fed. Cl. 227, 238 (2015); Sci. Applica- tions Int’l Corp. v. United States, 108 Fed. Cl. 235, 272 Case: 19-1337 Document: 70 Page: 8 Filed: 03/06/2020

(2012); Chenega Mgmt., LLC v. United States, 96 Fed. Cl. 556, 585 (2010); Hamilton Sundstrand Power Sys. v. United States, 75 Fed. Cl. 512, 516 (2007). 3 A protestor may also prevail by showing that the agency inconsistently applied objective solicitation requirements between it and other offerors, such as proposal page limits, formatting re- quirements, or submission deadlines. See Sci. Applications Int’l Corp., 108 Fed. Cl. at 272 (citing BayFirst Sols., LLC v. United States, 102 Fed. Cl. 677 (2012)). We see no reason to depart from the Claims Court’s “substantively indistinguishable” standard. If a protestor meets this threshold, a reviewing court can then compara- tively and appropriately analyze the agency’s treatment of proposals without interfering with the agency’s broad dis- cretion in these matters. See, e.g., COMINT Sys. Corp. v. United States, 700 F.3d 1377, 1384 (Fed. Cir. 2012). If a protestor does not, then the court should dismiss the claim. To allow otherwise would give a court free reign to second- guess the agency’s discretionary determinations underly- ing its technical ratings. This is not the court’s role. E.W. Bliss Co. v. United States, 77 F.3d 445, 440 (Fed. Cir. 1996)

3 Several of the above-cited Claims Court cases ad- dress disparate evaluation claims in the context of compet- itive range determinations. An agency may select a competitive range of proposals that have been more highly ranked to continue in the competition. 48 C.F.R. § 15.306(c)(1). Proposals that have not met the competitive range threshold are eliminated from the competition. 48 C.F.R. § 15.306(c)(4). We see no relevant difference for pur- poses of disparate evaluation claims whether the alleged disparate evaluation occurred at the threshold competitive range determination or at the ultimate award decision. An agency is obligated to fairly evaluate proposals at both stages. See 48 C.F.R. § 1.102–2(c)(3); 48 C.F.R. § 1.602– 2(b). Case: 19-1337 Document: 70 Page: 9 Filed: 03/06/2020

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(noting that the court “will not second guess” the “minutiae of the procurement process in such matters as technical ratings . . . , which involve discretionary determinations of procurement officials”). The record indicates that ODG’s proposal was substan- tively distinguishable from other proposals in various re- spects. 4 The RFP required offerors to provide a description of their interior designer’s “experience and qualifications working on healthcare facilities and what hardware and software that will be used to produce digital and hard copy drawings.” J.A. 131. Unlike the awardees’ proposals, ODG’s proposal did not address the hardware and software requirements. Compare J.A. 94-100, with J.A. 32. The RFP also required an offeror to describe the “expe- rience of the installation staff and Interior Design staff” as well as their “knowledge regarding life safety codes, infec- tion control standards and patient privacy standards.” J.A. 131. Unlike the awardees’ proposals, ODG’s proposal did not address whether its staff had experience with life safety codes, infection control standards, and patient pri- vacy standards. Compare J.A. 94-100, with J.A. 25-26, 55, 88. The RFP required offerors to provide a staffing plan that included its key personnel’s qualifications and experi- ence in a healthcare environment. But, as the Claims Court found, ODG submitted a staffing plan “that could not be compared to others.” J.A. 7. The Claims Court also noted that ODG’s proposal said “little of the staff’s qualifi- cations in healthcare,” and that the comparators’ proposals were “more responsive and descriptive.” Id. The RFP required offerors to describe the “technical ca- pabilities of staff producing AutoCAD and/or PDF

4 ODG makes no allegation that the VA inconsist- ently applied objective solicitation requirements. Case: 19-1337 Document: 70 Page: 10 Filed: 03/06/2020

drawings of the as-built furniture installation.” J.A. 131. Unlike the awardees’ proposals, ODG did not address whether its staff will use AutoCAD or PDF to produce drawings. Compare J.A. 94-100, with J.A. 30, 55, 71, 88. In light of these substantive differences, ODG cannot prevail on most of its claims of disparate treatment. ODG, however, has sufficiently established that the VA dispar- ately evaluated its technical proposal in two instances. Both ODG and awardee A. Pomerantz failed to provide a (1) description of the process of inventory, cataloging and protecting VA property and (2) description of materials used and how they are applied to protect VA property dur- ing installation. The VA assigned 6 points to this awardee as if it had provided this information yet did not assign ODG any points. To prevail, ODG must show that this instance of une- qual treatment was prejudicial. Glenn Def. Marine (ASIA), 720 F.3d at 907. To establish prejudicial error, a protestor must show that but for that error, the protestor had a sub- stantial chance of receiving a contract award. Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999). De minimis errors in the procurement process do not justify relief. Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 1000 (Fed. Cir. 1996); Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 960 (Fed. Cir. 1993). Prej- udice is a question of fact that we review for clear error. CliniComp Int’l, Inc. v. United States, 904 F.3d 1353, 1359 (Fed. Cir. 2018). The Claims Court found that ODG was not prejudiced by the VA’s disparate treatment. We see no error in this finding. Even if the VA awarded ODG the additional 6 points it afforded to the awardee, ODG’s technical score would only increase to 18 points, well below the acceptable 40-point threshold for award. In sum, many of ODG’s various claims of disparate treatment amount to a request for this court to reevaluate Case: 19-1337 Document: 70 Page: 11 Filed: 03/06/2020

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its technical proposal and those of the various awardees. We are in no position to do so. For the few instances in which the VA did engage in disparate treatment, ODG has failed to establish that such error was prejudicial. CONCLUSION We have considered ODG’s other arguments and find them unpersuasive. We affirm.

AFFIRMED COSTS No costs.