Raymond Express International, LLC v. United States

120 Fed. Cl. 413, 2015 U.S. Claims LEXIS 216, 2015 WL 881521
CourtUnited States Court of Federal Claims
DecidedMarch 3, 2015
Docket14-1179 C
StatusPublished
Cited by4 cases

This text of 120 Fed. Cl. 413 (Raymond Express International, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Raymond Express International, LLC v. United States, 120 Fed. Cl. 413, 2015 U.S. Claims LEXIS 216, 2015 WL 881521 (uscfc 2015).

Opinion

Pre-Award Bid Protest; No Violation of Statute or Regulation; Adequate Market Research; No Ambiguity in Solicitation Price Evaluation Scheme; Rational Test for Price Reasonableness.

OPINION

Bush, Senior Judge.

Plaintiff Raymond Express International, LLC (REI) filed its pre-award bid protest complaint on December 8, 2014 and amended its complaint on December 11, 2014. In its four-count amended complaint, REI challenges Solicitation No. HDEC09-14-R-0002, a solicitation which has been amended six times. Some of the amendments were in response to three prior protests brought by REI — an agency-level protest and two protests at the Government Accountability Office (GAO).

The solicitation seeks bids on a contract (or contracts) to provide fresh fruit and vegetables (FFV) to Department of Defense commissaries in South Korea, Japan and Guam (the “Pacific Area”). The soliciting agency'is the Defense Commissary Agency (DeCA). In this protest, REI seeks injunctive and declaratory relief regarding various terms and provisions of the solicitation.

The administrative record (AR) of this procurement was filed on December 19, 2014 and briefing was filed according to an expedited schedule. Oral argument was held on January 26, 2015. As discussed below, plaintiff has not shown that the terms of the solicitation violated procurement laws or regulations or were arbitrary or capricious. Defendant’s motion for judgment on the admin *417 istrative record is therefore granted and plaintiff’s motion for judgment on the administrative record is denied.

BACKGROUND

1. Introduction

This protest poses four basic questions: (1) Does DeCA have the discretion under applicable laws and regulations to change its fresh fruit and vegetables contracting from a model where the contractor procured most items in the United States and had the items shipped at the government’s expense to the Pacific Area, to a model where the contractor ships such items at its own expense to DeCA commissaries in the Pacific Area?; (2) Did DeCA conduct adequate market research to support this change in contracting for the Pacific Area?; (3) Is the solicitation unambiguous as to how proposals would be evaluated when certain produce items were unavailable either locally (in South Korea, Japan or Guam) or globally?; and, (4) Was the price evaluation scheme composed of rational measures with which DeCA could determine the price reasonableness of the proposals? All of these questions must be answered in the affirmative. The court offers here a brief discussion of the background facts underlying its analysis. 2

II.Incumbent Contract and FFV Contracts Elsewhere

REI is the incumbent contractor supplying FFV to DeCA commissaries in South Korea, Japan — including Okinawa, and Guam. The incumbent contract is a small business set-aside. AR at 3784. The incumbent contract includes a transportation subsidy, because “[t]he Government [pays] transportation costs from designated points within the United States to the commissary locations located throughout South Korea, Guam, Okinawa and Japan.” Id. at 3804. One effect of the subsidy is to lower the price that patrons of the commissaries in the Pacific Area pay for fresh produce. See id. at 298 (noting that patrons of Pacific Area commissaries “enjoy[ ] U.S. quality produce at very low prices compared to the local economy in any of the countries”).

It is undisputed that the transportation subsidy for the Pacific Area comes at a substantial cost to the taxpayer. One estimate for the annual cost of the subsidy for REI’s contract is $36 million. Oral Argument Transcript (Tr.) at 25. DeCA has been able to contract elsewhere for FFV without providing the transportation subsidy, which reduces the costs of the commissary program.. AR at 298, 491 (no transportation subsidy for FFV for commissaries in Alaska, Hawaii and Puerto Rico); Tab 43 (no transportation subsidy for FFV for commissaries in Germany, Belgium and the Netherlands); Tab 44 (no transportation subsidy for FFV for commissaries in the United Kingdom). With the transportation subsidy removed, the FFV contracts in other regions utilize the delivery term “F.O.B. Destination,” where the contractor delivers the produce to each commissary and title to the goods passes to the government only upon delivery to that commissary. E.g., id. at 3889, 3897.

III.Acquisition Planning and Market Research

As REI’s incumbent contract was nearing its original completion date, DeCA decided the time had come to remove the transportation subsidy from the next Pacific Area FFV contract. AR at 491, 498-99. This decision was founded, in part, on the agency’s understanding of the global market for produce. Id. at 491 (noting that the F.O.B. Destination business model “takes advantage of the distribution process efficiencies that commercial industry has developed which allows them to offer quality products from their worldwide sources”). DeCA also believed it could replicate, in the Pacific Area, the newer business model’s success in other regions such as Europe. Id. This belief was founded on market *418 research conducted by a DeCA contracting team based in Germany. See id. Tab 4.

The source selection plan was approved on January 30, 2014. AR at 532. Because much of the contract would be performed outside the United States, DeCA removed the small business set-aside requirement. Id. at 492. An offeror could bid on all three regions in the Pacific Area (South Korea, Japan and Guam), or could bid on only one or two regions. Id. at 497. The contracting period would be for an initial two-year base period, with three option years. Id. at 500.

The original schedule called for DeCA to issue a Request for Proposals (RFP or solicitation) in February 2014, make an award (or awards) in June 2014, and have contract performance begin in September 2014. Id. at 504. That projected schedule was interrupted and delayed by REI’s protests. See infra. REI continues to fulfill the FFV needs of the Pacific Area commissaries and will continue to do so through March 31, 2015. See id. Tab 41; Pl.’s Mot. Ex. 1 at 4.

IV. The Solicitation

Solicitation No. HDEC09-14-R-0002, “Solicitation of Fresh Fruits & Vegetables— Pacific Area,” was issued by DeCA on February 3, 2014. AR at 31204. The produce needs of the commissaries of South Korea, Japan and Guam were divided into distinct Contract Line Item Numbers (CLINs), so that an offeror could submit a proposal for any number of the three CLINs. Id. at 33. The estimated valué of the contract was $200 million for the base period and all option periods if an offeror provided FFV for all three CLINs. Id. at 288, 293 (clarification provided by Amendment 0001). The F.O.B. Destination contract term was clearly indicated in both the Solicitation itself and in letters sent to potential offerors. Id. at 62-63, 206-37.

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120 Fed. Cl. 413, 2015 U.S. Claims LEXIS 216, 2015 WL 881521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/raymond-express-international-llc-v-united-states-uscfc-2015.