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No. 13-1012
(Judge Lettow)
(BID PROTEST)
IN THE UNITED STATES COURT OF THE FEDERAL CLAIMS
HYPERION, INC.,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO PLAINTIFF’S
MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD, AND CROSS-
MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD
STUART DELERY
Assistant Attorney General
OF COUNSEL: BRYANT G. SNEE
Acting Director
STEPHANIE MAGNELL
Trial Attorney KIRK T. MANHARDT
U.S. Army Legal Services Agency Assistant Director
Contract and Fiscal Law Division
9275 Gunston Road RYAN M. MAJERUS
Fort Belvoir, VA 22060 Trial Attorney
Commercial Litigation Branch
Civil Division
Department of Justice
P.O. Box 480
Ben Franklin Station
Washington, D.C. 20044
Tele: (202) 307-0163
Fax: (202) 307-0972
February 20, 2014 Attorneys for Defendant
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 1 of 41
i
TABLE OF CONTENTS
STATEMENT OF THE ISSUES.................................................................................................... 1
STATEMENT OF THE CASE ....................................................................................................... 2
I. Nature Of The Case ................................................................................................ 2
II. Statement Of Facts .................................................................................................. 2
SUMMARY OF THE ARGUMENT ............................................................................................. 4
ARGUMENT .................................................................................................................................. 6
I. Hyperion’s Protest Should Be Dismissed For Lack Of Jurisdiction
Because It Does Not Have Standing To Bring This Protest ................................... 6
A. Legal Standard ............................................................................................ 6
B. Hyperion Lacks Standing Because
, And It Cannot Show It Was Prejudiced By A
Significant Error In The Procurement Process ........................................... 8
C. Hyperion’s Attempts To Establish Standing By Arguing
That The Proposals Of The Offerors
Contained Deficiencies Such
That The Agency Should Have Found Them Unacceptable
Rest On Erroneous Grounds ..................................................................... 10
i. Hyperion's Claim That Did
Not Comply With FAR 52.219-14 Is Misplaced, Because
That Provision Concerns Contract Administration And
Is Not A Legitimate Basis For Protest .......................................... 10
ii. Hyperion's Claim That Did
Not Provide Price Realism Analyses In Their Proposals
Is Irrelevant And Misguided ......................................................... 14
iii. Hyperion's Claim That Failed
To Conform With A Formal Solicitation Question-And-
Answer Because Of Stated Assumptions In Their Proposals
Is Meritless .................................................................................... 17
II. Alternatively, The Court Should Enter Judgment Upon The
Administrative Record In Favor Of The Government, Because
The Agency’s Contract Award Was Reasonable And In
Accordance With Established Law ....................................................................... 20
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 2 of 41
ii
A. Legal Standard .......................................................................................... 21
B. Hyperion’s Claims That The Awardee’s Proposal Did Not
Lack Merit ................................................................................................. 22
i. Hyperion's Errs in Relying Upon FAR 9.104-2 As
Establishing The Responsibility Criteria That Apply
To This Protest, Because FAR 9.104-2 Does Not Apply
To This Solicitation....................................................................... 23
ii. Hyperion’s Claim That
Is Without Merit And Is Not Supported
By The Solicitation’s Terms ......................................................... 25
C. Hyperion’s Claim That
Is Misplaced, Because That Provision Concerns
Contract Administration And Is Not A Legitimate Ground
For Protest ................................................................................................. 29
D. Hyperion’s Claims That The Agency Erred In Not Conducting
A Price Realism Analysis Lack Merit And Have Been Waived .............. 31
E. Hyperion Has Not, And Cannot, Establish That It Was Prejudiced
By The Agency’s Award Of The Contract To TCSC ............................... 32
III. Hyperion Has Not Established That It Is Entitled To Injunctive Relief ............... 33
CONCLUSION ............................................................................................................................. 34
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 3 of 41
iii
TABLE OF AUTHORITIES
CASES
Advanced Data Concepts, Inc. v. United States,
216 F.3d 1054 (Fed. Cir. 2000)............................................................................. 21
Alfa Laval Separation, Inc. v. United States,
175 F.3d 1365 (Fed. Cir. 1999)............................................................................. 10
Am. Fed'n of Gov. Employees v. United States,
258 F.3d 1294 (Fed. Cir. 2001)............................................................................... 7
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) .............................................................................................. 21
Banknote Corp. of Am., Inc. v. United States,
365 F.3d 1345 (Fed. Cir. 2004)....................................................................... 22, 32
Bannum, Inc. v. United States,
404 F.3d 1346 (Fed. Cir. 2005)...................................................................... passim
Blount, Inc. v. United States,
22 Cl. Ct. 221 (1990) ................................................................................ 12, 13, 30
Blue & Gold Fleet, L.P. v. United States,
492 F.3d 1308 (Fed. Cir. 2007)...................................................................... passim
Camp v. Pitts,
411 U.S. 138 (1973) .............................................................................................. 21
Centech Grp., Inc. v. United States,
79 Fed. Cl. 562 (2007) .................................................................................... 13, 30
Centech Grp., Inc. v. United States,
554 F.3d 1029 (Fed. Cir. 2009)....................................................................... 13, 22
Ceres Envtl. Servs., Inc. v. United States,
97 Fed. Cl. 277 (2011) .............................................................................. 15, 16, 31
Chapman Law Firm v. United States,
63 Fed. Cl. 519 (2005) .......................................................................................... 13
Cincom Sys., Inc. v. United States,
37 Fed. Cl. 266 (1997) .......................................................................................... 33
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 4 of 41
iv
COMINT Sys. Corp. v. United States,
700 F.3d 1377 (Fed. Cir. 2012)............................................................................... 9
CRAssociates, Inc. v. United States,
95 Fed. Cl. 357 (2010) .......................................................................................... 15
Dalton v. Sherwood Van Lines, Inc.,
50 F.3d 1014 (Fed. Cir. 1995)......................................................................... 12, 29
Data Gen. Corp. v. Johnson,
78 F.3d 1556 (Fed. Cir. 1996)......................................................................... 10, 22
Emery Worldwide Airlines, Inc. v. United States,
264 F.3d 1071 (Fed. Cir. 2001)................................................................. 21, 22, 32
Eskridge Research Corp. v. United States,
92 Fed. Cl. 88 (2010) ............................................................................................ 21
Fisher v. Haliburton,
667 F.3d 602 (5th Cir. 2012) ................................................................................ 14
Frazier v. United States,
79 Fed. Cl. 148 (2007) .......................................................................................... 12
Gov't Technical Servs. LLC v. United States,
90 Fed. Cl. 522 (2009) .................................................................................... 12, 29
Impresa Construzioni Geom. Domenico Garufi v. United States,
238 F.3d 1324 (Fed. Cir. 2001)............................................................................. 22
Info. Tech. & Applications Corp. v. United States,
316 F.3d 1312 (Fed. Cir. 2003)................................................................................8
Jacobs Tech. Inc. v. United States,
100 Fed. Cl. 186 (June 8, 2011) ........................................................................ 9, 32
L-3 Commc'ns Corp. v. United States,
99 Fed. Cl. 283 (2011) .......................................................................................... 32
Labat-Anderson Inc. v. United States,
50 Fed. Cl. 99 (2001) ............................................................................................ 15
Labatt Food Serv., Inc. v. United States,
577 F.3d 1375 (Fed. Cir. 2009)...................................................................... passim
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 5 of 41
v
Lermer Germany GmbH v. Lermer Corp.,
94 F.3d 1575 (Fed. Cir. 1996)............................................................................... 33
Linc Gov't Servs., LLC v. United States,
96 Fed. Cl. 672 (2010) ...................................................................................... 8, 23
Masai Techs. Corp. v. United States,
79 Fed. Cl. 433 (2007) .......................................................................................... 16
Mil-Mar Century Corp. v. United States,
111 Fed. Cl. 508 (2013) ........................................................................................ 16
Myers Investigative & Sec. Servs., Inc. v. United States,
275 F.3d 1366 (Fed. Cir. 2002)........................................................................... 7, 8
PGBA, LLC v. United States,
389 F.3d 1219 (Fed. Cir. 2004)............................................................................. 33
Rex Serv. Corp. v. United States,
448 F.3d 1305 (Fed. Cir. 2006)............................................................................... 7
United States v. IBM Corp.,
892 F.2d 1006 (Fed. Cir. 1989)...................................................................... passim
USfalcon, Inc. v. United States,
92 Fed. Cl. 436 (2010) .......................................................................................... 32
Weeks Marine, Inc. v. United States,
575 F.3d 1352 (Fed. Cir. 2009)............................................................................... 7
STATUTES
5 U.S.C. § 706(2)(A)......................................................................................................... 21
15 U.S.C. § 637(a)(14) ...................................................................................................... 11
28 U.S.C. § 1491(b) .................................................................................................... 12, 28
28 U.S.C. § 1491(b)(1) ................................................................................................... 6, 7
28 U.S.C. § 1491(b)(4) ..................................................................................................... 21
31 U.S.C. § 3551 ................................................................................................................. 7
42 U.S.C. § 1651 ............................................................................................................... 14
42 U.S.C. § 1651(a)(3) ...................................................................................................... 14
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 6 of 41
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REGULATIONS
FAR 9.104-2 .............................................................................................................. passim
FAR 9.104-2(a) .......................................................................................................... passim
FAR 15.101-2 ..................................................................................................................... 2
FAR 15.306 ......................................................................................................................... 2
FAR 15.404-1 ................................................................................................................... 30
FAR 15.404-1(b) ............................................................................................................... 15
FAR 15.404-1(b)(2) .......................................................................................................... 30
FAR 15.404-1(b)(2)(i) ...................................................................................................... 30
FAR 15.404-1(b)(2)(v) ..................................................................................................... 30
FAR 15.404-3(b) ............................................................................................................... 15
FAR 52.219-14 .......................................................................................................... passim
FAR 52.219-14(c)(1) ........................................................................................................ 11
FAR 52.228-3 ................................................................................................................... 14
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 7 of 41
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
(BID PROTEST)
HYPERION, INC., )
)
Plaintiff, )
)
v. ) No. 13-1012
) (Judge Lettow)
THE UNITED STATES, )
)
Defendant. )
DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO PLAINTIFF’S
MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD, AND
CROSS-MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD
Pursuant to Rules 7, 12(b)(1), and 52.1 of the Rules of the United States Court of
Federal Claims (RCFC), as well as the Court’s December 30, 2013 scheduling order,
defendant, the United States, respectfully submits this combined motion to dismiss, cross-
motion for judgment upon the administrative record, and response to the motion filed by
plaintiff, Hyperion, Inc. (Hyperion), for judgment upon the administrative record. See
Dkt. 18-2 (Hyperion MJAR), filed February 5, 2014.
STATEMENT OF THE ISSUES
1. Whether Hyperion’s complaint should be dismissed for lack of standing to
pursue this bid protest, because Hyperion in this
lowest-priced, technically acceptable (LPTA) procurement.
2. Whether the defendant is entitled to judgment upon the administrative
record because the United States Army Contracting Command (agency) acted reasonably
and in accordance with the law when it awarded the contract to Technical
Communications Solutions Corporation (TCSC).
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 8 of 41
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STATEMENT OF THE CASE
I. Nature Of The Case
Hyperion brings this bid protest against the agency, challenging its award of an
LPTA contract to provide installation and infrastructure upgrades to fiber optic cable
networks in the Kingdom of Jordan, on behalf of the Jordanian Armed Forces.
II. Statement of Facts
On January 24, 2013, the agency issued Solicitation No. W15P7T-13-R-D002
(RFP or solicitation). Tab 5-1, AR 139, 141. This Foreign Military Sales (FMS)
acquisition has a twelve-month period of performance. Id. at 141. The agency employed
an LPTA source selection process, pursuant to FAR 15.101-2.1 Id. An offeror was only
eligible for award if, following agency evaluation, an offeror’s proposal received an
“Acceptable” rating in each of two non-price factors: technical approach and past
performance. Id. at 210. The LPTA solicitation was anticipated to generate “adequate
competition,” obviating the need for certified cost or pricing data. Id. at 212. The agency
similarly confirmed it would not perform a price realism analysis, but would still evaluate
offerors’ prices for reasonableness. Id.
Four offerors submitted proposals: (1) Hyperion;
and TCSC. See Tabs 6-1 – 9-8. The agency’s
Source Selection Team (SST) conducted its initial evaluation of proposals from May 6,
2013, to June 13, 2013. Tabs 10-1, 10-3.
1 FAR 15.101-2, which was incorporated into the solicitation, does not permit
tradeoffs, but discussions pursuant to FAR 15.306 between the agency and offerors are
permitted. See FAR 15.101-2(b)(2-4). The RFP states that “[t]he solicitation document
and incorporated provision to clauses are those in effect through Federal Acquisition
Circular FAC 2005-55, effective 2 February 2012," Tab 5-1, AR 141. In this brief, the
Government’s citations to the FAR refer to the FAR in effect as of that date.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 9 of 41
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As part of the agency’s past performance evaluation, the solicitation required the
agency to not only “conduct a performance risk assessment . . . of the Offerors [sic] past
performance,” but also assess the performance risk of offerors’ “major subcontractors.”
Tab 5-1, AR 211. The agency reserved the right to “use data provided in the Offerors
[sic] proposal and data obtained from other sources.” Id. at 211, 212. In evaluating the
offerors’ past performance, as described in the solicitation, the SST also assessed the past
performance of offerors’ major subcontractors as follows:
‘Offeror’ referred to the proposed prime contractor and all
proposed major subcontractors. A major subcontractor was
defined as one who would be providing hardware/material
or services considered necessary for successful operation of
the Prime’s proposed system architecture; and/or whose
subcontract is for more than 20% of the total proposed
price. The prime contractor and proposed major
subcontractors were assessed individually and the results
integrated to derive the Offeror’s Past Performance rating.
Tab 10-1, AR 1089.
The past performance of was determined to be See
generally Tab 10-1. The agency also evaluated the technical portions of offerors’
proposals to assess their understanding of the requirements and the soundness of their
approach. Tab 5-1, AR 211. The SST initially determined that
See generally Tab 10-3.
Consequently, after establishing the competitive range, which included
, the agency conducted discussions from July 24 to July 31,
2013. See Tab 15; see also Tabs 17-1 – 20-5. The agency issued Evaluation Notices and
requested revised submissions . Id. On August 26, 2013, and following
these discussions, the agency
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 10 of 41
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invited to submit final proposal revisions for
technical approach, past performance, and price. See Tabs 23-1, 24-2, 25-1, 26-1. Final
proposal revisions were received by September 3, 2013. See
generally tabs 23-1 – 26-6. The agency completed an interim technical evaluation on
October 16, 2013, and concluded that, after discussions and revisions,
Tab 22. The agency completed its final evaluations in
November 2013, with the following results:
Offeror Identifier Technical Past Performance Proposed Price
Tabs 10-4, 30.
Because
, the agency determined that award of the LPTA contract should be made to
TCSC, . Tab 30, AR 2149. The agency issued a single award to
TCSC on December 16, 2013. Tab 33-1. The agency determined TCSC’s price —
— was fair and
reasonable. Tab 21-5, AR 1687. The agency conducted post-award debriefings with all
offerors on December 20, 2013, and Hyperion filed this protest on December 23, 2013.
SUMMARY OF THE ARGUMENT
In its motion for judgment upon the administrative record, Hyperion challenges
the agency’s evaluation of the awardees’ proposals. Yet as a primary matter, Hyperion is
and, as such, lacks standing to challenge the
agency’s decision to award the contract to TCSC,
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 11 of 41
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. Hyperion has similarly failed to
establish the prejudice necessary to confer standing in this protest.
Hyperion’s brief raises various claims that allegedly disqualify not only the
awardee, but also . These arguments lack
merit. Hyperion relies on FAR clauses not in the solicitation and proceeds as if FAR
clauses contain certain terms of art that they do not. Hyperion relies upon FAR 52.219-
14, which concerns matters of contract administration and, therefore, is outside the
jurisdiction of the Court to entertain in this protest. Hyperion’s price realism challenges
are similarly not relevant, because the agency was not required under the solicitation to
conduct a price realism analysis. In sum, Hyperion’s arguments lack merit, and it
remains . As a result, Hyperion lacks
standing to pursue this bid protest.
Alternatively, the Court should grant the Government’s cross-motion for
judgment upon the administrative record and deny Hyperion’s motion, because the
agency’s contract award was reasonable and in accordance with law. Hyperion has not
shown that the awardee, TCSC, failed to .
Hyperion’s claim that FAR 9.104-2 establishes is also
erroneous, because FAR 9.104-2 does not apply to this solicitation, and any argument
that the agency erred in failing to incorporate FAR 9.104-2 into the solicitation has been
waived pursuant to Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed.
Cir. 2007). Hyperion’s claim that the awardee lacks
merit because not only does this provision concern contract administration matters
outside the Court’s jurisdiction, as noted above, but also
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 12 of 41
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. Moreover, Hyperion’s claim that the agency erred in
not conducting a price realism analysis lacks merit and has been waived pursuant to Blue
& Gold. Hyperion has also failed to establish that it was prejudiced by the agency’s
award of the contract to TCSC, because it cannot show that there was a substantial
chance it would have received the contract award but for alleged procurement errors.
Finally, Hyperion has not established that it is entitled to a permanent injunction
because it has failed to establish standing in this protest and has not shown that the
agency’s award of the contract was arbitrary, capricious, or contrary to law. Moreover,
Hyperion has not met its heavy burden of establishing entitlement to a permanent
injunction because it has not addressed irreparable harm, the balance of harms, or public
interest in its brief.
ARGUMENT
I. Hyperion’s Protest Should Be Dismissed For Lack Of Jurisdiction Because It
Does Not Have Standing To Bring This Protest__________________________
The complaint should be dismissed because Hyperion lacks standing to bring this
protest. Because Hyperion was , Hyperion cannot
show the direct economic interest necessary to establish standing in this case.
A. Legal Standard
This Court possesses jurisdiction “to render judgment on an action by an
interested party objecting . . . to a proposed award or the award of a contract[.]” 28
U.S.C. § 1491(b)(1). An interested party is an “actual or prospective bidder or offeror
whose direct economic interest would be affected by the award of the contract or by
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 13 of 41
7
failure to award the contract[.]”2 31 U.S.C. § 3551; Rex Serv. Corp. v. United States, 448
F.3d 1305, 1307 (Fed. Cir. 2006). This test “imposes more stringent standing
requirements than Article III[,]” and standing to bring a bid protest in this Court should
not be confused with the more liberal standing requirement observed under the
Administrative Procedures Act (APA). Weeks Marine, Inc. v. United States, 575 F.3d
1352, 1359 (Fed. Cir. 2009) (citing Am. Fed’n of Gov. Employees v. United States, 258
F.3d 1294, 1302 (Fed. Cir. 2001)); see also Myers Investigative & Sec. Servs., Inc. v.
United States, 275 F.3d 1366, 1370 (Fed. Cir. 2002) (noting 28 U.S.C. § 1491(b)(1) “did
not adopt the APA’s liberal standing standards”).
The protestor bears the burden of demonstrating that it possesses standing to
pursue its bid protest, and it may satisfy that burden by “show[ing] that it was prejudiced
by a significant error in the procurement process.” Labatt Food Serv., Inc. v. United
States, 577 F.3d 1375, 1378 (Fed. Cir. 2009) (citation omitted). A protestor demonstrates
prejudice by showing “but for the error, it would have had a substantial chance of
securing the contract.” Id. In a post-award protest, the protestor must demonstrate that
correction of the alleged procurement errors would put the protestor in a position to
actually receive the award. See United States v. IBM Corp., 892 F.2d 1006, 1010-12
(Fed. Cir. 1989) (“[O]nly the second-lowest bidder has a direct economic interest in the
award of the contract.”).
Moreover, this Court has explained that the prejudice inquiry relating to standing,
“allegational prejudice,” requires a “plaintiff [to] show that it would have had a
2 Hyperion erroneously asserts that the applicable legal precedent for standing in
this case is whether the protester “has suffered a non-trivial competitive injury.”
Hyperion MJAR at 25. That standard only applies to pre-award protests, not post-award
protests. See Weeks Marine, 575 F.3d at 1359.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 14 of 41
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substantial chance of being awarded the contract but for the combined impact of all
agency decisions alleged to be unlawful.” Linc Gov’t Servs., LLC v. United States, 96
Fed. Cl. 672, 696 (2010); see also id. at 693-97 (fully explaining the evolution of the
“three-step” prejudice analysis required in bid protests, and compartmentalizing standing
prejudice (for purposes of determining jurisdiction), merits prejudice (for purposes of
determining liability), and APA prejudice (for purposes of determining entitlement to
relief)). “[B]ecause the question of prejudice goes directly to the question of standing,
the prejudice issue must be reached before addressing the merits.” Labatt, 577 F.3d at
1378 (citing Info. Tech. & Applications Corp. v United States, 316 F.3d 1312, 1319 (Fed.
Cir. 2003)); Myers, 275 F.3d at 1370 (noting prejudice is a “necessary element of
standing”).
B. Hyperion Lacks Standing Because It Is ,
And It Cannot Show It Was Prejudiced By A Significant Error In
The Procurement Process______________________________________
The agency awarded the contract at issue by employing an LPTA source selection
process. See Tab 30, AR 2147. Four offerors submitted proposals that were determined
to be in terms of the two non-price factors: technical approach and past
performance. Accordingly, the agency awarded the contract to
TCSC:
Offeror Technical Past Performance Proposed Price
Id. at 2149. Hyperion’s proposal offered
— nearly $ than the awardee’s proposal.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 15 of 41
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Hyperion must be next-in-line for award if it is to show it had a substantial chance
of receiving the contract such that it has standing to bring this protest. See COMINT Sys.
Corp. v. United States, 700 F.3d 1377, 1384 (Fed. Cir. 2012) (affirming trial court’s
finding that protestor could not show a substantial chance of being awarded the contract,
because not only did it fail to show a particular marginal rating was legally erroneous, but
even if it could, it was not next-in-line to receive the contract award).
There is no dispute that Hyperion was . See Tab 35-
16, AR 2297 (indicating that Hyperion’s price was the ). The agency
reached this conclusion in accordance with the solicitation’s evaluation criteria, which
state explicitly that an offeror is eligible for award if its proposal is deemed “Acceptable”
on both the technical factor and the past performance factor. See Tab 30, AR 2147.
Although Hyperion was rated , it still
offered . Accordingly, if Hyperion were to be awarded the
relief that it seeks, and the Court were to set aside the contract award to TCSC, the
agency would make an award to , whose price was $
proposal and $ the protestor’s proposal.
Thus, even accepting as true the allegation that TCSC is
, Hyperion lacks standing to participate in this protest because it did not
. IBM Corp., 892 F.2d at 1011.
Thus, we respectfully request that the Court dismiss this protest for lack of jurisdiction.
In addition, for the same reasons, Hyperion cannot show that it was prejudiced by
a significant error in the procurement process. See Jacobs Tech. Inc. v. United States,
100 Fed. Cl. 186, 190 (2011) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1351
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 16 of 41
10
(Fed. Cir. 2005); Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1368 (Fed.
Cir. 1999); Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996)). As
discussed in the previous section, such prejudice is shown by establishing “that there was
a substantial chance it would have received the contract award but for th[e] error.” Alfa
Laval, 175 F.3d at 1367 (internal quotation marks omitted); see also IBM, 892 F.2d at
1010-12. Hyperion cannot show that there was a substantial chance it would have
received the contract award, because it was not next-in-line for the award. Thus,
Hyperion has failed to establish the prejudice necessary to confer standing to bring this
protest. See Labatt, 577 F.3d at 1378 (noting that “because the question of prejudice goes
directly to the question of standing, the prejudice issue must be reached before addressing
the merits.”) (internal quotation marks and citation omitted).
C. Hyperion’s Attempts To Establish Standing By Arguing That The
Proposals Of
Contained Deficiencies Such That The Agency Should Have Found
Them Unacceptable Rest On Erroneous Grounds_________________
Hyperion can only establish the direct economic interest necessary to establish
standing if it can show that the proposals of the offerors
contained deficiencies such that their
technical approach or past performance should have been deemed unacceptable. For the
reasons discussed below, Hyperion has failed to make this showing.
i. Hyperion's Claim That
FAR 52.219-14 Is Misplaced, Because
That Provision Concerns Contract Administration And
Is Not A Legitimate Basis For Protest________________
Hyperion suggests that
fail to comply with FAR 52.219-14, “Limitations On
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 17 of 41
11
Subcontracting (NOV 2011),” which is incorporated by reference into the solicitation.
Hyperion MJAR at 14-15; see also Tab 5-1, AR 177. Hyperion argues that FAR 52.219-
14 imposes an affirmative, self-performance requirement that must be presented by each
offeror in its proposal, as a necessary part of the Government’s evaluation of proposals.
Yet Hyperion fails to explain that this FAR clause concerns matters of contract
administration and is not relevant to the agency’s determination of the acceptability of a
particular proposal’s past performance or technical approach in this procurement. See
Hyperion MJAR at 7, 14-15.
Hyperion acknowledges that FAR 52.219-14 states that “the Offeror/Contractor
agrees that in performance of the contract . . . [a]t least 50 percent of the cost of contract
performance incurred for personnel shall be expended for employees of the concern.3
Hyperion MJAR at 7 (citing FAR 52.219-14(c)(1)) (emphasis added). FAR 52.219-14 is
included in the clauses of this solicitation with which an offeror must comply once it is
awarded the contract:
The Contractor shall comply with the FAR clauses in th[e]
paragraph (b) that the contracting officer has indicated as
being incorporated in this contract by reference to
implement provisions of law or Executive orders applicable
to acquisitions of commercial items: . . . 52.219-14,
Limitations on Subcontracting (Nov 2011) (15 U.S.C.
637(a)(14)).
Tab 5-1, AR 176-177 (emphasis added).
The compliance of an awardee with FAR 52.219-14 is a matter of contract
administration, which is not the proper subject of a suit brought under this Court’s bid
3 The Government does not argue that the applicable sub-clause covers anything
other than services, which is the highest requirement for percentage of self-performance
work by the contractor. See FAR 52.219-14(c)(1).
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 18 of 41
12
protest jurisdiction, pursuant to 28 U.S.C. § 1491(b). Rather, “[t]he Federal Circuit has
made it crystal clear that the CDA [Contract Disputes Act] is the ‘exclusive mechanism’
for the resolution of disputes arising . . . in contract management.” Gov’t Technical
Servs. LLC v. United States, 90 Fed. Cl. 522, 527 (2009) (citing Dalton v. Sherwood Van
Lines, Inc., 50 F.3d 1014, 1017 (Fed. Cir. 1995)). Essentially, Hyperion is suggesting
that not satisfy the percentage requirements provided in
FAR 52.219-14, assuming was awarded the contract. A claim that an
awardee will not , is a contract
administration issue, not a protest issue. See Frazier v. United States, 79 Fed. Cl. 148,
160 (2007) (“[T]he court is persuaded that pure contract claims are not appropriate in a
bid protest, even if clothed in the guise of a protest of an alleged[ly] statutory violation
occurring in relation to a procurement.”) (citation omitted).
do not provide any indication
do not intend to comply with FAR 52.219-14, should they be awarded the
contract and begin performance.
, and the
solicitation does not require them to provide that information.
Hyperion’s reliance upon Blount, Inc. v. United States, 22 Cl. Ct. 221 (1990), is
misplaced. In that case, Blount submitted a questionnaire with its bid stating that it
would self perform a percentage of the total amount of work under the contract lower
than that required by the Invitation For Bids (IFB) at issue. See id. at 228. Thus, the
Court found that “Blount took affirmative exception to a material provision of the IFB”
that “constituted a material deviation from the IFB which rendered its bid nonresponsive
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 19 of 41
13
. . . .” Id. In our case,
. Rather, the agency properly
, which
concerns matters of contract administration.
Hyperion’s reliance upon Centech Grp., Inc. v. United States, 79 Fed. Cl. 562
(2007), aff’d 554 F.3d 1029 (Fed. Cir. 2009), is distinguishable for the same reasons.
This Court found reasonable the agency’s decision to take corrective action in light of the
determination by the Government Accountability Office that the awardee’s proposal was
unacceptable, because it failed to comply with FAR 52.219-14, which was included in the
solicitation. See Centech, 79 Fed. Cl. at 564. The Court reasoned that the solicitation
required offerors to “agree to perform at least 50 percent of the cost of personnel with its
own personnel,” and that “[i]t is undisputed that Centech’s proposal, on its face, did not
do that” and, consequently, failed to comply with a material term of the solicitation. Id.
at 575-76. The Federal Circuit similarly noted on appeal that “a proposal that, on its face,
leads ‘an agency to the conclusion that an offeror could not and would not comply with
the subcontracting limitation’ is technically unacceptable and ‘may not form the basis for
an award.’” Centech, 554 F.3d at 1038 (quoting Chapman Law Firm v. United States, 63
Fed. Cl. 519, 527 (2005)). Because Centech represented that it would not comply, the
Government was on notice it could not ignore the contradiction between the solicitation
and Centech’s proposal. In our case,
.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 20 of 41
14
In essence, Hyperion is protesting
relating to contract administration.
Because Hyperion’s argument concerns matters of contract administration, it must be
rejected.4
ii. Hyperion's Claim That
Is
Irrelevant And Misguided
Hyperion argues that the price proposals
Hyperion MJAR at 18.
This claim is erroneous because not only does it improperly equate price realism analysis,
which is not relevant to the solicitation, with the obligation on the agency in this
procurement to evaluate proposals for price reasonableness, but also it makes an
incorrect assumption that the offerors themselves were required to provide a price realism
analysis. Neither argument is correct.
4 Hyperion’s argument that Defense Base Act insurance premiums are a
requirement under the limitations on subcontracting, FAR 52.219-14, is a non-sequitur.
See Hyperion MJAR at 17, 30. The Defense Base Act, 42 U.S.C. § 1651, requires
contractors to purchase a form of worker’s compensation insurance for their overseas
workers; in turn, compensation for injuries suffered by those workers is subject to the
limitations of the Defense Base Act. See Fisher v. Haliburton, 667 F.3d 602, 609 (5th
Cir. 2012). Hyperion implies that because companies employing Americans abroad
would be required to purchase Defense Base Act insurance, those company’s costs would
necessarily be higher than those of local foreign companies hiring local foreign workers.
See Hyperion MJAR at 17, 30. This assumption is incorrect. Foreign subcontractors are
not exempt from the requirement to purchase Defense Base Act insurance on public
works contracts with the U.S. Government. 42 U.S.C. § 1651. Pursuant to FAR 52.228-
3, incorporated by reference into the solicitation, (see Tab 5-1, AR 176), the Defense
Base Act insurance obligation applies not only to prime contractors, but also
subcontractors in public works programs, consistent with 42 U.S.C. § 1651(a)(3).
Because Hyperion’s argument relies upon a fundamental misunderstanding of the statute,
it should be rejected.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 21 of 41
15
Hyperion correctly notes that FAR 15.404-3(b) imposes an obligation on offerors
to “establish the reasonableness of proposed subcontract prices.” Hyperion MJAR at 18
(emphasis added). Moreover, Hyperion’s brief correctly recognizes that there are
distinctions between a price reasonableness analysis and a price realism analysis. See id.
at 4. Nevertheless, Hyperion asserts that
. See Hyperion MJAR at 18; see
also id. at 32 (stating that
Hyperion’s argument is a non-starter because the solicitation does not create any
affirmative obligation for the agency to conduct a price realism analysis, nor does it
create any obligation for the agency to consider price realism analyses performed in the
offerors’ proposals. This Court has recognized that “an agency may, at its discretion,
provide for the use of a price realism analysis to measure an offeror’s understanding of
the solicitation requirements . . . .” Ceres Envtl. Servs., Inc. v. United States, 97 Fed. Cl.
277, 303 (2011); see also CRAssociates, Inc. v. United States, 95 Fed. Cl. 357, 379
(2010) (noting price realism analysis is generally a matter committed to the agency's
discretion); Labat-Anderson Inc. v. United States, 50 Fed. Cl. 99, 106 (2001) (“[T]he
nature and extent of an agency's price realism analysis are matters within the agency's
discretion.”). Here, the agency, in its discretion, chose not to undertake a price realism
analysis. Rather, the solicitation made clear that “offeror proposed prices will ONLY be
evaluated for price reasonableness in accordance with FAR 15.404-1(b) as determined by
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 22 of 41
16
the Contracting Officer” and that “[c]ost analysis, cost realism analysis, and/or price
realism analysis will NOT be performed on offerors proposals.” Tab 5-1, AR 212.
Likewise, the solicitation does not contain any requirements for offerors to include a
price realism analysis in their proposals. Hyperion’s attempt to equate a price
reasonableness analysis, as required under the solicitation’s terms, with a price realism
analysis is erroneous and improper.
The discretion afforded to agencies to decide whether to conduct a price realism
analysis is particularly appropriate in this solicitation, which involves a firm-fixed-price
contract for trenching and laying cable. This Court has recognized that firm-fixed-price
contracts mitigate the Government’s risk, because offerors under such contracts not only
bear the risk of higher prices, but also are free to enter into losing contracts and may have
certain business reasons for doing so. Mil-Mar Century Corp. v. United States, 111 Fed.
Cl. 508, 546 (2013) (Ceres, 97 Fed. Cl. at 308); see also Masai Technologies. Corp. v.
United States, 79 Fed. Cl. 433, 436 n.7 (2007) (noting that the agency “would perform a
price reasonableness of evaluation, in lieu of a price realism evaluation, consistent with
the evaluation of firm fixed-price-offers.”).
In sum, Hyperion’s argument must be rejected because the agency properly
exercised its discretion in requiring a price reasonableness analysis, not a price realism
analysis, and no offeror can be deemed non-responsive for not including a price realism
analysis. Hyperion’s arguments in no way show that the agency could not consider
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 23 of 41
Failed
To Conform With A Formal Solicitation Question-And-
Answer Because Of Stated Assumptions In Their
Proposals Is Meritless_____________________________
Hyperion’s only other basis for suggesting that
concerns a published question and answer in the solicitation, regarding terrain and
site conditions that may affect pricing:
Question: Reference Tables 1 and 2 of the SRD [System
Requirements Document] lack detailed information
regarding the terrain. Will the Government allow price
adjustments after Contract award based on actual site
conditions such as those requiring asphalt cuts, concrete
cuts, the need for concrete encasements for Wadi crossings,
etc.? If not, since there was no mandatory site visit and no
description of the exact terrain involved, on what basis will
the Government conduct this Acquisition such that Offeror
pricing is formulated on a common understanding of the
tasks required?
Response: No. The decision to submit a proposal is a
business decision. This effort is being solicited on a Firm-
Fixed-Price Completion Basis only. It is the Offerors’
responsibility to do the appropriate research using available
information resources, assessing risks and proposing
accordingly.
Tab 5-1, AR 145. In attempting to show standing, by necessity, Hyperion argues that
neither is responsive because
. Hyperion MJAR at
21-22, 26-27. As explained below, Hyperion’s arguments are not supported by the
record.
Hyperion argues that
,
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 24 of 41
18
” Hyperion MJAR at
21 (quotation marks omitted). Hyperion’s argument lacks merit because it fails to
acknowledge that,
On July 24, 2013, the contracting officer
. See Tabs 17-1, 17-2.
Tab 17-2, AR 1274 (internal
citations omitted). In response, on July 31, 2013,
Tab 17-6, AR 1283-4.
. On September 3, 2013,
. Tab 23-4, AR 1695. Hyperion’s argument,
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 25 of 41
19
which rests entirely on
is therefore moot.5
Hyperion similarly argues that
. See Hyperion MJAR
at 22. Hyperion argues that the following paragraph from
:
.
Id. (citing Tab 24-5, AR 1728) (emphasis added). Hyperion relies on the portion of
.
Hyperion fails to note that
.” Tab 24-5,
5 In paragraph 28 of its proposed statement of facts (see Dkt. 18-1), Hyperion
cites not to (e.g., Tab 23-5, AR
1697-1698). This price proposal, September 3, 2013
(see Tab 23-4), . Any
.
. See id. On the basis of
the technical evaluation team found that
” Tab 28-1,
AR 2113.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 26 of 41
20
AR 1728. By stating such,
. Any error in would be the
responsibility of , which would not affect
.
. Id. Thus, contrary to
Hyperion’s assertion,
.
Hyperion cannot establish that it is an interested party such that it has standing in this
protest.
For all of these reasons and those discussed in the prior two sections of this brief,
Hyperion has failed to show that the proposals offered by
contained deficiencies rendering as to technical approach or past
performance, such that the agency should have excluded from consideration.
Absent such a showing, Hyperion cannot establish the direct economic interest necessary
to confer standing, because it remains in this LPTA
procurement.
II. Alternatively, The Court Should Enter Judgment Upon The Administrative
Record In Favor Of The Government, Because The Agency’s Contract
Award Was Reasonable And In Accordance With Established Law ________
The Court should dismiss Hyperion’s protest for lack of standing. Alternatively,
the Court should deny Hyperion’s motion and grant the Government’s cross-motion for
judgment upon the administrative record, because Hyperion has failed to show that the
agency’s award of the contract to TCSC is arbitrary, capricious, or contrary to law.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 27 of 41
21
A. Legal Standard
“In reviewing an agency’s procurement decision under RCFC 52.1, the court’s
role is limited.” Eskridge Research Corp. v. United States, 92 Fed. Cl. 88, 97 (2010).
The standard of review for a motion for judgment upon the administrative record,
pursuant to RCFC 52.1, is similar, but not identical to, a motion for summary judgment
under RCFC 56. Bannum, 404 F.3d at 1355. A motion for summary judgment considers
whether the moving party has proved its case as a matter of fact and law, or alternatively,
whether a genuine issue of material fact precludes judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986). By contrast, the Court’s inquiry under Rule 52.1 is
narrower: i.e., given all of the disputed and undisputed facts in the administrative record,
whether the plaintiff has met the burden of proof to show that an agency’s decision was
arbitrary or capricious, or was otherwise not in accordance with law. See Bannum, 404
F.3d at 1357.
In a bid protest, this Court will only set aside an agency procurement decision
where, after reviewing the administrative record, it assesses that the agency’s decision
was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A) (cited in 28 U.S.C. § 1491(b)(4)). Application of the
arbitrary and capricious standard involves neither judicial fact finding nor review of the
agency’s factual statements for “substantial evidence.” Advanced Data Concepts, Inc. v.
United States, 216 F.3d 1054, 1057 (Fed. Cir. 2000) (citing Camp v. Pitts, 411 U.S. 138,
142 (1973)). Pursuant to this standard, an agency’s procurement decisions are entitled to
a “presumption of regularity,” and “the agency’s action must be upheld as long as a
rational basis is articulated and relevant factors are considered.” Emery Worldwide
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 28 of 41
22
Airlines, Inc. v. United States, 264 F.3d 1071, 1085 (Fed. Cir. 2001) (citations omitted).
Thus, pursuant to this standard, an award may be set aside “if either: (1) the procurement
official’s decision lacked a rational basis; or (2) the procurement procedure involved a
violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi v.
United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001) (citations omitted).
In reviewing a challenge brought under the first ground, the Court “determine[s]
whether the contracting agency provided a coherent and reasonable explanation of its
exercise of discretion, and the disappointed bidder bears a heavy burden of showing that
the award decision had no rational basis.” Centech, 554 F.3d at 1037 (internal quotation
marks and citation omitted).
For a challenge brought under the second ground, “the disappointed bidder must
show a clear and prejudicial violation of applicable statutes or regulations.” (internal
quotation marks and citation omitted) Id.; see also Data Gen. Corp., 78 F.3d at 1562
(“[T]o prevail in a protest the protester must show not only a significant error in the
procurement process, but also that the error prejudiced it.”) (citation omitted). Showing
prejudice under this second ground requires the protestor to show that “there was a
‘substantial chance’ it would have received the contract award absent the alleged error.”
Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004)
(citing Emery, 264 F.3d at 1086); accord Bannum, 404 F.3d at 1353; Labatt, 577 F.3d at
1378.
In a post-award protest, the protestor’s burden is even heavier in that it must
demonstrate that correction of the alleged procurement errors would put the protestor in a
position to actually receive the award. See IBM, 892 F.2d at 1010-12 that is. Even if the
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 29 of 41
prejudice by showing that “it would have had a substantial chance of being awarded the
contract but for the combined impact of any agency decisions adjudged to be unlawful.”
Linc, 96 Fed. Cl. at 696 (citation omitted); see also id. at 693-97 (distinguishing standing
prejudice (to determine jurisdiction), merits prejudice (to determine liability), and APA
prejudice (to determine entitlement to relief)).
B. Hyperion’s Claims That
Lack Merit______
Hyperion claims that
. Hyperion
MJAR at 12. Hyperion alleges that the solicitation required a prime contractor to have
certain experience and that the agency should have
. See id. These arguments are without merit for the reasons discussed below.
i. Hyperion's Errs in Relying Upon FAR 9.104-2 As
Establishing The Responsibility Criteria That Apply To
This Protest, Because FAR 9.104-2 Does Not Apply To
This Solicitation__________________________________
Hyperion relies on definitive responsibility criteria allegedly found in FAR 9.104-
2(a), Special Standards. See Hyperion MJAR at 5. Hyperion’s brief refers to
“[d]efinitive Responsibility criteria that must be met by all Offerors . . .” and segues
immediately into a reference to FAR 9.104-2(a); in effect, Hyperion is trying to argue
that FAR 9.104-2 is incorporated into the solicitation and establishes responsibility
criteria applicable to this procurement. Id. Hyperion’s argument is flawed because FAR
9.104-2 is not incorporated into the solicitation.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 30 of 41
24
If Hyperion wished to challenge the agency’s failure to incorporate FAR 9.104-2
into the solicitation, it needed to raise that argument prior to submitting an offer. By
failing to do so, Hyperion has waived this challenge pursuant to Blue & Gold. “[A] party
who has the opportunity to object to the terms of a government solicitation containing a
patent error and fails to do so prior to the close of the bidding process waives its ability to
raise the same objection subsequently in a bid protest action in the Court of Federal
Claims.” Blue & Gold Fleet, 492 F.3d at 1313. Waiver prevents the situation in which
an offeror who has an objection to the agency’s proposed procuring method withholds the
objection until after it has lost the competition. See id. As the Federal Circuit explained
in Blue & Gold, this prevents an offeror from taking advantage of the other actors in the
procurement as well as costly after-the-fact litigation:
In the absence of a waiver rule, a contractor with
knowledge of a solicitation defect could choose to stay
silent when submitting its first proposal. If its first
proposal loses to another bidder, the contractor could then
come forward with the defect to restart the bidding process,
perhaps with increased knowledge of its competitors. A
waiver rule thus prevents contractors from taking
advantage of the government and other bidders, and avoids
costly after-the-fact litigation.
Id. at 1314. In this case, Hyperion had the opportunity to object to the exclusion of FAR
9.104-2 in the solicitation prior to the submission of its proposal but failed to do so,
thereby waiving its challenge.
Even if Hyperion did not waive this argument, there is no merit to Hyperion’s
implicit claim that FAR 9.104-2(a) was required to be included in the solicitation. FAR
9.104-2(a) grants great discretion to the Contracting Officer as to whether or not to
establish a special, higher standard of responsibility: “When it is necessary for a
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 31 of 41
25
particular acquisition or class of acquisitions, the contracting officer shall develop, with
the assistance of appropriate specialists, special standards of responsibility.” FAR 9.104-
2(a). The clause provides further guidance as to when this might be beneficial: “Special
standards may be particularly desirable when experience has demonstrated that unusual
expertise or specialized facilities are needed for adequate contract performance.” Id.
Moreover, the clause requires that “special standards shall be set forth in the solicitation
(and so identified) and shall apply to all offerors.” Id. The agency properly exercised its
discretion in not incorporating FAR 9.104-2 into the solicitation, especially considering
that this is an LPTA, commercial item acquisition, for trenching and installation of fiber
optic cable. See Tab 35-17, AR 2300.
As a result, Hyperion’s argument with respect to FAR 9.104-2 has not only been
waived under Blue & Gold, but also is not relevant because it has no bearing on the
performance required under the solicitation. Thus, it lends no support to Hyperion’s
claim that the agency’s award of the contract to TCSC was not rational.
ii. Hyperion’s Claim That
Is Without Merit And Is Not
Supported By The Solicitation’s Terms
Hyperion argues that it was improper for the agency to evaluate
. See Hyperion MJAR at 12 (arguing that
(emphasis omitted); see also id. at 13-
14 (claiming
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 32 of 41
.S.
26
); id. at 33 (claiming “
.”).
In support of its argument, Hyperion notes in its brief that the solicitation states:
“[t]he prime offeror must demonstrate that it has current or recent (within 3 years)
experience working in the Middle East or developing nations, and that projects were
completed successfully.” Hyperion MJAR at 6; see also Tab 5-1, AR 211. Yet Hyperion
fails to note that in the same section addressing Past Performance, the solicitation states:
A major subcontractor is defined as one who will be
providing critical hardware/material or services and/or
whose subcontract is for more than 20% of the total
proposed price. In either case, the prime contractor and
proposed major subcontractors will be assessed
individually and the results will then be assessed in their
totality to derive the Offerors Past Performance rating.
Tab 5-1, AR 211. Thus, the language of the solicitation, on its face, states that an
offeror’s performance will be evaluated by the agency based on the totality of the prime
contractor’s and any major subcontractor’s contributions: “The Past Performance
evaluation will assess the relative risks associated with an Offerors likelihood of success
in performing the solicitation's requirements as indicated by that Offerors record of past
performance for a period of three (3) years prior to the release of this solicitation. In this
context, ‘Offeror’ refers to the proposed prime contractor and all proposed major
subcontractors.” Tab 5-1, AR 211.
Moreover, the solicitation defines acceptable performance, under the header “Past
Performance Evaluation Rating,” as follows:
Acceptable - Based on the offeror's performance record, the
Government has a reasonable expectation that the offeror
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 33 of 41
27
will successfully perform the required effort, or the
offeror's performance record is unknown. In the context of
acceptability/unacceptability, offerors determined to have
unknown past performance shall be considered acceptable.
Tab 5-1, AR 210 (emphasis added). Hyperion complains that “
.” Hyperion MJAR at 12. However, in
evaluating past performance, the agency reasonably found
:
Tab 28-5, AR 2129; see also Tab 37-1. This agency finding
is rational and in accordance with the terms of the solicitation. Hyperion itself
acknowledges that, pursuant to statute, the agency is authorized to accept
Hyperion MJAR at 5. Still, Hyperion attempts to
divorce the agency’s past performance evaluation from the context of the solicitation’s
terms and, instead, impose the heightened responsibility standards of FAR 9.104-2(a) —
which are not incorporated in the solicitation. Hyperion's efforts to change the actual
evaluation criteria of the solicitation are misleading and without merit.6
6 Hyperion also argues that the agency
. See Hyperion MJAR at 13. This argument is meritless
because the agency clearly stated that, in evaluating past performance and “in conducting
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 34 of 41
28
In essence, as with FAR 9.104-2, Hyperion’s argument that
is
predicated on a challenge to the solicitation’s terms. Hyperion is arguing that the
solicitation erred in stating that the contributions of the prime contractor and the
subcontractor will be “assessed in their totality,” see Tab 5-1, AR 211, and that, instead,
the solicitation should have
. If Hyperion thought the language
of the solicitation was ambiguous, it was free, and nay required to, submit a question for
clarification. See Tab 5-1, AR 141-149 (questions posed by potential offerors requesting
clarification prior to the closing of bids, and answers to those questions, are incorporated
into the solicitation). Because Hyperion failed to raise this argument prior to submitting
its offer, it has waived that argument. Blue & Gold, 492 F.3d at 1313.
In sum, Hyperion not only waived its argument, pursuant to Blue & Gold, that
s, but also Hyperion’s
interpretation of the solicitation’s requirements is flatly contradicted by the solicitation.
See Tab 5-1, AR 211. Hyperion’s argument lacks merit and in no way shows that the
agency’s award of the contract was arbitrary, capricious, or contrary to law.
the performance risk assessment, the Government may use data provided in the Offerors
proposal and data obtained from other sources, including the Federal Past Performance
Information Retrieval System - Report Card (PPIRSRC), which includes Contractor
Performance Assessment Reports (CPARs).” Tab 5-1, AR 212 (emphasis added). Thus,
the terms of the solicitation grant the agency wide latitude as to the information it may
consider in evaluating past performance. Because Hyperion’s argument regarding
Hyperion's argument is contradicted by the text of the solicitation and,
consequently, lacks merit.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 35 of 41
29
C. Hyperion’s Claim That FAR 52.219-14
Is Misplaced, Because That Provision Concerns Contract
Administration And Is Not A Legitimate Ground For Protest_______
Hyperion claims that FAR 52.219-14 imposes a self-performance minimum
. See Hyperion MJAR at 14, 25. Hyperion’s
argument lacks merit for all the reasons noted in Section I(C)(i) of this brief. As
discussed in that section, FAR 52.219-14 concerns contract administration, which is not
the proper subject of a suit brought under this Court’s bid protest jurisdiction pursuant to
28 U.S.C. § 1491(b); see also Dalton, 50 F.3d at 1017; Gov’t Technical Servs., 90 Fed.
Cl. at 527.
As noted in Section I(C)(i) of this brief,
.
FAR 52.219-14, and the solicitation does not require to
provide that information.
the requirements of FAR 52.219-14 by self-performing,
. In its price proposal,
. See Tab 26-5 ).
.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 36 of 41
30
.7
FAR 52.219-14 concerns contract performance.8
Nonetheless, FAR 52.219-14.
This circumstance is distinguishable from Blount because Blount’s proposal “took
affirmative exception to a material provision of the IFB” that “constituted a material
deviation from the IFB which rendered its bid nonresponsive . . . .” 22 Cl. Ct. at 228.
Likewise, in Centech, the named party’s proposal “on its face” failed to comply with the
solicitation’s requirement that offerors “agree to perform at least 50 percent of the cost of
personnel with its own personnel.” 79 Fed. Cl. at 575-76. In our case,
.
7
8 Hyperion appears to suggest that FAR 52.219-14 includes some implicit
requirement regarding the distribution of percentages that is linked to the Independent
Government Cost Estimate (IGCE). See, e.g., Hyperion MJAR at 16. Hyperion cites no
legal support for this claim. The IGCE is merely the Government’s own estimate; it is
not a substitute for the results of free-market competition. In this solicitation, the IGCE
was solely used in conjunction with the Contracting Officer’s evaluation obligations,
pursuant to FAR 15.404-1, Proposal Analysis Techniques. The Contracting Officer may
rely upon several methods, consistent with FAR 15.404-1(b)(2), to determine if there is
fair and reasonable pricing in a commercial items acquisition, including, but not limited
to, adequate price competition, FAR 15.404-1(b)(2)(i), and “[c]omparison of proposed
prices with independent Government cost estimates,” FAR 15.404-1(b)(2)(v). In this
procurement, the contracting officer relied upon not only the IGCE in evaluating fair and
reasonable pricing, but also the adequate price competition among the offerors. See Tab
28-6, AR 2131.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 37 of 41
of contract
administration,
Hyperion’s arguments to the
contrary should be rejected.
D. Hyperion’s Claims That The Agency Erred In Not Conducting A
Price Realism Analysis Lack Merit And Have Been Waived_________
Hyperion argues that the agency erred in failing to conduct a price realism
analysis. See Hyperion MJAR at 32. This argument constitutes a challenge to the
solicitation’s terms that Hyperion failed to raise prior to submitting a proposal;
consequently, Hyperion has waived this argument. See Blue & Gold, 492 F.3d at 1313.
Moreover, Hyperion’s argument lacks merit for all the reasons noted in Section
I(C)(ii) of this brief. The solicitation does not create any affirmative obligation for the
agency to conduct a price realism analysis in this firm-fixed-price procurement, nor does
it create any obligation for the agency to consider price realism analyses performed in the
offerors’ proposals. See Ceres, 97 Fed. Cl. at 303. Hyperion improperly equates the
agency’s price reasonableness analysis, as required under the solicitation’s terms, with a
price realism analysis. See Tab 5-1, AR 212 (stating that “[c]ost analysis, cost realism
analysis, and/or price realism analysis will NOT be performed on offerors proposals.”).
Hyperion argues
. See Hyperion MJAR at 18, 20. This argument lacks merit for
the same reasons discussed above, and in Section I(C)(ii) of this brief regarding
The solicitation does not contain any requirements for offerors to
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 38 of 41
32
. For all of these reasons, Hyperion’s
arguments with respect to price realism must be rejected.
E. Hyperion Has Not, And Cannot, Establish That It Was Prejudiced By
The Agency’s Award Of The Contract To TCSC
Even assuming for argument’s sake that Hyperion has shown that the agency’s
award of the contract to TCSC was arbitrary, capricious, or contrary to law, Hyperion
must demonstrate that it is prejudiced by the agency’s action. See Jacobs Tech., 100 Fed.
Cl. at 190; see also L-3 Commc’ns Corp. v. United States, 99 Fed. Cl. 283, 289 (2011)
(citing USfalcon, Inc. v. United States, 92 Fed. Cl. 436, 450 (2010)) (“[T]he prejudice
determination for purposes of standing assumes all non-frivolous allegations to be true,
whereas the post-merits prejudice determination is based only on those allegations which
have been proven true.”).
Hyperion’s brief only includes a conclusory statement that the agency committed
“prejudicial evaluation errors.” Hyperion MJAR at 26. Hyperion’s brief includes
nothing of substance explaining how it was prejudiced by the contract award, which
should make it difficult, if not impossible, for Hyperion to argue that it has sustained its
burden. Nonetheless, Hyperion cannot establish prejudice because it cannot show that
there was a substantial chance it would have received the contract award but for alleged
procurement errors. Banknote, 365 F.3d at 1351 (citing Emery, 264 F.3d at 1086). Even
if Hyperion has shown that the agency’s award of the contract to TCSC was irrational,
for all the reasons discussed in this brief.
Because Hyperion has failed to establish prejudice, its motion for judgment upon the
administrative record should be denied.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 39 of 41
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III. Hyperion Has Not Established That It Is Entitled To Injunctive Relief
Hyperion seeks “a Permanent Injunction compelling U.S. Army Contracting
Command — Aberden Proving Ground to terminate Contract Number W15P7T-14-C-
0003, the Contract proposed by Solicitation Number W15P7T-13-R-D002 and awarded
to TCSC . . . .” Hyperion MJAR at 35. To obtain permanent injunctive relief, Hyperion
must demonstrate (1) entitlement to relief on the merits; (2) that irreparable harm would
result if an injunction does not issue; (3) that the harm suffered if injunctive relief is not
granted will outweigh the harm to the Government and third parties if the temporary
relief is granted; and (4) that granting the injunction serves the public interest. See
PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (citations
omitted). The grant of an injunction is “extraordinary relief,” and, therefore, the Court
applies “exacting standards.” Lermer Germany GmbH v. Lermer Corp., 94 F.3d 1575,
1577 (Fed. Cir. 1996). The party seeking injunctive relief bears the extremely heavy
burden of demonstrating its entitlement to this extraordinary relief by clear and
convincing evidence. E.g., Cincom Sys., Inc. v. United States, 37 Fed. Cl. 266, 268
(1997).
As we established in this brief, Hyperion fails to demonstrate that it has standing
to bring this protest, or that the agency’s award of the contract was arbitrary, capricious,
or contrary to law. Consequently, Hyperion is not entitled to injunctive relief. Further, to
the extent this Court determines that the agency committed a prejudicial procurement
error, Hyperion has not met its heavy burden of establishing entitlement to a permanent
injunction because it has not addressed irreparable harm, the balance of harms, or public
interest in its brief. See generally Hyperion MJAR.
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 40 of 41
34
CONCLUSION
For these reasons, defendant respectfully requests that this Court grant
defendant’s motion to dismiss Hyperion’s complaint in its entirety. Alternatively,
defendant respectfully requests that this Court grant defendant’s cross-motion for
judgment upon the administrative record and deny plaintiff’s motion for judgment upon
the administrative record and plaintiff’s requests for declaratory and injunctive relief.
Respectfully submitted,
STUART F. DELERY
Assistant Attorney General
BRYANT G. SNEE
Acting Director
/s Kirk T. Manhardt
KIRK T. MANHARDT
Assistant Director
OF COUNSEL: /s Ryan M. Majerus
RYAN M. MAJERUS
Stephanie Magnell Trial Attorney
Trial Attorney Commercial Litigation Branch
U.S. Army Legal Services Agency U.S. Department of Justice
Contract and Fiscal Law Division Civil Division
9275 Gunston Road P.O. Box 480
Fort Belvoir, VA 22060 Ben Franklin Station
Washington, DC 20044
Tel: (202) 307-0163
Fax: (202) 307-0972
February 20, 2014 Attorneys for Defendant
Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 41 of 41