# In the United States Court of Federal Claims

No. 15

- 111 C

(Filed Under Seal : May 18 , 2015 )

(Reissued for Publication: May 27, 2015) 1

********* *************************** ** *

Post

- Award Bid Protest; N avy Procurement for NSA Bethesda and
Walter Reed Janitorial and Custodial Services; Time for Challenging an Agency’s Corrective Action Decision ; Discretion in Performing Best Value Evaluation; Rational Basis Standard; Judgme nt on the Administrative Record

. * NVE, INC., *

*
Plaintiff

, *

*

v. *

* THE UNITED STATES, *

* Defendant,

and

ACE MAINTENANCE & SERVICES, INC.

,

Defendant

- Intervenor. *

*

*

*

*

*

*

*

********* ************************** *** *

Keith L. Baker

, Barton, Baker, Thomas & Tolle, LLP, McLean, Virginia for Plaintiff.

Alexis J. Echols , Trial Attorney, with whom were Benjamin C. Mizer , Assistant Attorney General, Robert E. Kirschman, Jr. , Director, Claudia Burke , Assistant Director, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Washington, D.C.,
and Ann L. Giddings , NAVFAC, Of Counsel, for Defendant

.

Adam K. Lasky

, Oles Morrison Rinker & Baker LLP, Seattle

, Washington for Intervenor.

1 The Court issued this opinion under seal on May 18 , 2015 and gave the parties until May 26, 2015, to submit any proposed redactions of competition

- sensitive, proprietary, confidential, or other protected
information. The parties submitted their proposed redactions, which have been accepted by the Court

. Redactions are indicated by [* * *]. The Court also corrects a typographical error made on page 8 of the opinion.2 OPINION AND ORDER

WHEELER, Judge.

In this bid protest, Plaintiff NVE, Inc. (“NVE”) challeng es a contract award by the Naval Facilities Engineering Command (“ NAVFAC ”) to ACE Maintenance & Services, Inc. (“ACE”) for janitorial and custodial services at the Naval Support Activity medical
f acility in Bethesda, Maryland (“NSA Bethesda”) . This facility includes the Walter Reed National Military Medical Ce nter (“ Walter Reed ”)

. NVE’s protest c oncerns the agency’s third round of proposal evaluations , following two protests at the Government Accountability Office (“ GAO ”) and agency corrective action decisions in response to the
protests

.

In the first round of proposal evaluations, NAVFAC determined that NVE’s proposal offered the best value to the Government and the agency awarded a contract to
NVE on February 28, 2014. ACE and another offeror, Fresh Air Duct Cleaning, LLC (“Fresh Air”) protested th is award at the GAO o n multiple gro unds

, including that the

a gency failed to engage in meaningful discussions. Believing it had not engaged in meaningful discussions, NAVFAC took corrective action, and the GAO dismissed both
protests as moot . The a gency then reopened discussions and reevaluated the offerors’ proposals. Following the reevaluation, NAVFAC found ACE to be the apparent successful offeror. NVE protested th is award at the GAO and the agency once again decided to take
corrective action. After a nother round of proposal evaluations, NAVFAC again
determined ACE to be the successful offeror and awarded ACE the NSA Bethesda contract on January 22 , 2015

.

NVE protested the award to ACE at th is Court on February 3, 2015. The Court permitted ACE to intervene on the side of Defendant. The parties filed cross

- motions for judgment on the administrative record and the Court heard oral argument on May 5, 2015.

The Court finds that NVE ’s challenge s to NAVFAC’s corrective action decision s after submitting a proposal for reevaluation are waived . An offeror cannot fully participate in a second round of proposal submission s and then later challenge the a gency’s corrective
action decision. Instead, the law requires NVE to submit its challenges to a n agency’s corrective action before the due date for proposal resubmission

. Blue & Gold Fleet, L.P.
v. United States , 492 F.3d 1308, 1313 (Fed. Cir. 2007). NVE’s other arguments lack merit.
The a gency’s evaluation of proposals and its best value determi nation during the third round of proposal evaluations w ere rational . E ven if the agency ’s evaluation was not entirely rational, NVE suffered no prejudice

. NVE’s price was significantly higher than
ACE’s

, and NAVFAC was justified in selecting the lower

- pr iced proposal if it found that
the differences in the non

- price technical factors did not justify a [* * *] price premium.3

Accordingly, for the reasons explained below, Plaintiff’s motion for judgment on the
admini strative record is denied. Defendant’s and Intervenor’s cross

- motions for judgment on the administrative record are granted.

Factual Background 2

NAVFAC issued a solicitation requesting proposals for a firm fixed

- price indefinite delivery /indefinite quantity (“IDIQ”) contract to p erform janitorial and custodial services

at NSA Bethesda on June 11, 2013. Administrative Record (“ AR ”) Ta b 1 , at 1, 6

. NSA
Bethesda includes Walter Reed , the largest medical complex within the Department of
Defense

, with more than 2.4 million square fee t of clinical space

. Walter Reed provides care to approximately one million beneficiaries each year. NSA Bethesda’s base also includes the President’s Hospital which provides care for members of Congress and senior government officials. AR 11.

The solicitation specified that the contract was a small business set

- aside for a one

year base period with four one

- year option periods, not to exceed a total of five years. AR

6. T he contract required the awardee to “ furnish all labor, supervision, managem ent, tools, materials, equipment, facilities, transportation, incidental engineering, and other items necessary” to provide the specified janitorial and custodial services. AR 10. The solicitation also stated that the “Service Contract Act (SCA) Wage Det ermination and a Collective Bargaining Agreement [(CB A )] are included in this solicitation.” AR 6.

A. Solicitation Requirements and Evaluation Factors

Under the terms of t he solicitation , the c ontract award would be made to the offeror whose proposal off

ered the best value to the Government. AR 170. The following non

price factors were evaluated as the basis for a best value tradeoff analysis : (1) Technical/Management Approach; (2) Corporate Experience; (3) Safety; and (4) Past Performance on Recent, Relevant Projects. Past P erformance was the most important non

price factor. AR 170, 181

. The technical factors and the Past Performance facto r , when combined, were equal in impo rtance to price. AR 170, 181. T he solicitation also stated that “[t]he importance of price [would] increase if the Offerors’ non

- cost/price proposals
are considered essenti ally equal in terms of overall quality, or if price is so high as to significantly diminish the value of a non

- cost/price proposal’s superiority to the
Government.” AR 181.

2 The facts in this decision are taken from the ad ministrative record. The pages in the administrative record are numbered in sequence, and the documents are divided by tabs. The Court’s citations to the administrative record generally are to the page numbers, except that large documents are referenced by the
tab number.4

For Factor 1, Technical/Management Approach

, the a gency assigned each offeror an adjectival rating of “Outstanding, Good, Acc eptable, Marginal, or Unacceptable.” AR
171. A rating of “Outstanding” meant the proposal met the solicitation requirements and demonstrated an “exceptional approach and understanding of the requirements” with very low risk of unsuccessful performance. A rating of “Good” meant the proposal met the requirements and demonstrated “a thorough approach and understanding of the requirements” with low risk of unsuccessful performance. Id. The solicitation called for a transition plan that would accomplish pha se

- in within 6 0 days. 3 AR 182

.

For Factor 2, Corporate Experience, the solicitation required that each offeror
submit three projects showing “Recent, R elevant corporate experience. ” “ Recent, Relevant corporate experience ” is defined as “ [ e ] xperience of the team with respect to the proposed responsibility regarding hospital/healthcare and commercial janitorial services of similar size, scope, and complexity to this requirement performed within the last five years preceding the release date of the soli citation. ” AR Tab 2 , at 208

. Similar size meant the project was for “ $10 [ million ] or greater during any one contract period under one

contract

. ” AR Tab 3, at 213

. Each offeror would then be assigned a relevancy rating : “Very Relevant, Relevant, Somewhat Relevant, or Not Relevant” based upon the breadth and depth of experience in projects of sim ilar size, scope and complexity submitted

. AR Tab 1, at 172. A rating of “Very Relevant” meant the “[p]resent/past performance effort
involved essentiall y the same scope and magnitude of effort and complexities th[e] solicitation required.” A rating of “Relevant” meant the “ present/past performance effort involved similar scope and magnitude of effort. ” An offer or received a rating of “Somewhat Relevant” if the “ present/past performance effort involved some of the scope and magnitude of effort. ” Id.

Factor 3, S afety

, was comprised of three elements: Experience Modification Rate (“EMR”); Occupational Safety and Health Association (“OSHA”) Days Away f rom Work, Job Restriction, or Transfer (“DART”) rate ; and Technical Approach to Safety. AR 173. The solicitation directed the evaluators to consider the three elements collectively when assigning the overall adjectival rating . It also provided the following guideline s to the
evaluators of what EMR and DART rate s corresponded to one of the following risk ratings: “Very Low Risk, Low Risk, Moderate Risk, Hi gh Risk, or Extremely High Risk

. ” Id.

3 The Agency later amended the transition period to 30 days and offerors submitted revised transition plans. AR Tab 11, at 302

.5 Risk EMR Rate Very Low Risk Less than 0.6
Low Risk From 0.6 to less than 0.8
Moderate Risk From 0.8 to 1.0 High Risk Greater than 1.0 to 1.1 Extremely High Risk Greater than 1.1

Risk DART Rate Very Low Risk Less than 1.0
Low Risk From 1.0 to 1.99
Moderate Risk From 2.0 to 2.99 High Risk From 3.0 to 4.0 Extremely High Risk Greater than 4.0

Id. Like the C orporate E xperience evaluation, the first aspect of the Past
P erformance evaluation was based upon relevancy considering the size, scope and complexity of the project s submitted

. AR 1 73

- 74 ( offerors would receive an adjectival rating of “Very Relevant, Relevant, Somewhat Relevant, or Not Relevant”). This factor

, however, also included a performance confidence assessment to determine how well the contractor performed on previous projects. Ea ch offeror was then assigned one of the following adjectival ratings: “Substantial Confidence, Satisfactory Confidence, Limited Confidence, No Confidence, or Unknown Confidence.” A rating of “Substantial Confidence” meant the Government had a “high expect ation that the offeror [would] successfully perform the required effort.” A rating of “ Satisfactory Confidence” meant the
“Government has a reasonabl e expectation that the offeror wil l successfully perform the required effort. ” AR 174

- 75

.

For the price proposal, NAVFAC requested that the offerors provide: (a) “a narrative description of the price proposal and any underlying assumptions that influenced its preparation”; (b) “a narrative detailing the linkage of the proposed price with the

pro posed level of effort proposed in Factor 1

– Technical / Management Approach ” ; (c ) “a narrative of the rationale for the inflation rates applied to each of the option yea rs pricing ” ; and ( d ) an Excel spreadsheet providing the detailed basis for the prices li sted in the Exhibit Line Item Numbers (“ ELINs ”) so that the Government “ may gain insight into unit prices
in order to validate them .” 4 The solicitation also specified that the Government would “evaluate the consistency of the linkage of the proposed price with the proposed level of effort proposed in Factor 1

– Technical/Management Approach .” AR 182. NAVFAC
would then evaluate t he total price to ensure that it was fair and reasonable

. Id.

4 The s olicitation also requested offerors, as part of their price proposal, to complete Section B, Contract Line item Numbers (CLINs) 7000 through 9004 and to complete Section J, ELIN Pricing, Attachment J

0200000

- 06 ELINS.xls. AR Tab 1, at 182.6

B. First Round of Proposal Evaluations

Offerors submitted their initial proposals in August 2013. See, e.g.

, AR Tabs 13

- 14 (ACE’s and NVE’s initial proposal submissions) . NAVFAC received timely proposals from seven offerors, including NVE and ACE. AR Tab 17, at 9 77 . On February 2 8 , 2014,
the Source Selection Autho rity (“SSA”) concluded that NVE’s proposal offered the best
value to the Government and made an award to NVE. AR Tabs 30

- 3 1 A (“NVE’s proposal clearly demonstrates superior experience through its successful management and execution of all projects submitte d . . . . Additionally, NVE’s proposal provides a vastly superior technical approach and management plan”). ACE and Fresh Air protested the award at the
GAO

, alleging that NAVFAC made errors in its proposal evaluations

, failed to conduct

mea ningful discussions , and its short 30

- day transition plan was unduly restrictive of competition in favor of the incumbent, NVE . AR Tabs 49 , 53.

NAVFAC voluntarily took corrective action, believing that it had not engaged in meaningful discussions . AR Tab s 50 , 54

. The a gency also revised the s olicit ation to amend the transition period from 30 days back to 60 days. See AR Tab 1, at 182; AR Tab 12, at
303

- 05. Accordingly, the GAO dismissed the ACE and Fresh Air protests as moot. AR Tabs 52, 5 7

. On March 13, 2014, the a gency issued a stop work order to NVE requiring
NVE to cease all work under the contract awarded on February 2 8 , 2014, “until further
notice.” AR Tab 60. On April 2, 2014, NAVFAC de

- obligated funds under NVE’s
contract. AR Tabs 61

- 63.

C. Sec ond Round of Proposal Evaluations

Following GAO ’s dismissal of the ACE and Fresh Air protests, NAVFAC reopened
discussions with the four offerors in the competitive range : ACE, NVE, Fresh Air and Zero Waste Solutions, Inc. AR Tabs 32

- 33 , 39

. During th e discussions, NAVFAC addressed
weaknesses in ACE’s initial proposal , including its transition plan and corporate experience. AR Tab 33a

. Offerors submitted final proposal revisions on June 23, 2 014.
AR Tab 35, at 1592 (ACE); AR Tab 36, at 1904 (NVE)

. ACE included a transition plan showing that phase

- in would be completed within 60 days as required by the solicitation

. AR Tab 35, at 1603. In its initial proposal, ACE had proposed [* * *] days, with transition
for a significant portion of the buildings to be completed within [* * *] days. AR Tab 13,
at 317. This transition plan resulted in the a gency assigning a significant weakness to ACE

on F actor 1 because the a gency considered the phase

- in period to be unrealistically expeditious. AR Tab 21, at 1 319.

The Technical Evaluation Team (“ TET ”) continued to assign ACE a weakness for its phase

- i n plan, however, due to a clerical error in ACE’s transition plan, showing that7

ACE planned for a [* * *]

- day transition period, instead of the required 60 days. AR Tab
37 at 2059 ( stating that “[o]fferor [] acknowledges the 60 day phase in period, but their transition plan shows that it will take [* * *] days to fully assume all locations listed in the [soli citation] ” ). After ACE clarified in writing that its phase

- in start date was July 3, 2014
and not August 1, 2014 as listed in its transition plan chart , the Source Selection Evaluation Board (“ SSEB ”) remove d the weakness the TET had assigned to ACE, and c hanged its rating on Factor 1 from Acceptable to Good. AR Tab 39, at 2079. This change lifted ACE’s overall technical rating from Acceptable to Good. Id. In its final proposal revision

, ACE also provided additional information on its example projects for the Corporate Experience evaluation factor. The additional information demonstrated that ACE’s example projects met the solicitation’s $10 million size

- relevancy standard. ACE also
subs tituted one of its example projects for another that more clearly met the solicitation’s
size standard. AR Tab 33a, at 1585

- 87. This change removed the significant weakness assigned in the first round of proposal evaluations and ACE received a rating of “Very Relevant/Good” for the Corporate Experience Factor. AR Tab 37, at 2060

- 61.

In reevaluating NVE’s proposal, the a ge ncy eliminated two of the four strengths on Factor 1 that NVE had received in the first round of the proposal evaluations, which
low ered its rating on Factor 1 from “Outstanding” to “Good.” Compare AR Tab 30, at
1550

- 1551 with AR Tab 37, at 2047. However, the Overall Technical Rating of NVE’s proposal remained “Good.” AR 2046.

After evaluati ng the final revised proposals, NAVFAC determined that ACE’ s proposal offered the best value

. See AR Tab 40, at 20 85

. The a gency notified NVE on July 23, 2014 that ACE was the apparent successful offeror. AR Tab 40a. NVE protested
the award to the GAO alleging that the a gency did not identify additional strengths in NVE’s technical proposal which would have resulted in a technical rating of “Outstanding”

, did not validate unit prices, or evaluate the linkage between the offerors’ proposed prices with the level of effort proposed in Fac tor 1 as required by the s olicitation

. AR Tab 41 , at 2088

. Following the protest, NAVFAC determined that a reevaluation of
the final revised proposals was necessary, and informed GAO that it again intended to take corrective action. Accordingly, on Sept ember 9, 2014, the GAO dismissed NVE’s protest.
AR Tab 43. NVE also protested the award to ACE at the U.S. Small Business
Administrat ion (“SBA”)

, challenging ACE’s size status due to its use of a non

- small
business subc ontractor, J&J Maintenance, Inc . T he SBA denied NVE’s size protest and the SBA Office of Hearing and Appeals affirmed (“OHA” )

. Notice of SBA OHA Decision No. 5638, Dkt. No. 21.8

D. Third Round of Proposal Evaluations

In reevaluating the offerors’ final revised proposals, t he SSEB reviewed the reports
of the TET and the price evaluator. AR Tab 46, at 2147. The Board then summarized the findings of the TET and the price evaluator a s follows :

NVE ACE

Factor 1: Technical/Management Approach Good Good

Factor 2: Corporate Experience Very Relevant/Outstanding Very Relevant/Good

Factor 3: Safety Acceptable Good

Overall Technical Rating Good Good

Factor 4 : Past Performance Very Relevant/ Substantial
Confidence Very

Relevant/ Satisfactory
Confidence

Price [* * *] $69,698,540

AR 21 47

- 48. The SSEB considered the technical ratings of each offeror along with the prices submitted and conduct ed a comparative analysis to arrive at its recommendation.
AR 2148. In considering the offerors ’ proposals , the SSEB concluded that ACE’s and NVE’s proposals were superior to the other offerors under the technical factors. It found
ACE ’s and NVE’s proposals “somewhat comparable ” unde r the past performance factors.
The SSEB recommended award to ACE because it would “save the government mor e than [* * *] million dollars over the life of the contract, ” and there was “no technical advantage of NVE’s proposal that [was] significant enough to outweigh the considerable price premium associated with its proposal.” AR 2150. The SSA agreed

, finding that although
NVE’s non

- price proposal rated higher than ACE’s, the benefits did not outweigh the [* * *] price differential. Further, it cited concerns with NVE’s proposal on the Safety factor,
as NVE received [* * *] ratings in both the EMR and DART rates. AR Tab 47, at 2154

- 55

.9

NAVFAC awarded ACE the contract on January 22, 2015. AR Tab 48. NVE filed this protest at the Court on February 3 , 2015. NVE filed its motion for judgment on the administrative record on March 30, 2015. Dkt . No. 53 (corrected) . Defendant and
Defendant

- Intervenor filed their cross

- motions for judgment on the administrative record

on April 13, 2015 . The Court heard oral argument on May 5 , 2015.

Discussion

I. Jurisdiction and Standard of Review

Under the Tucker Act, the Court has jurisdiction over an action by an interested party objecting to “the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S.C. § 1491 (b)(1)

. The Court reviews bid protests in accordance with the standards of the Administrative Procedures Act (“APA”). Impresa Construzionoi Geom. Domenico Garufi v. United
States , 238 F.3d 1324, 1332 (Fed. Cir. 2001). Under the APA, a gency action shall be set
aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.” 5 U.S.C. § 706; see also Impresa Construzioni , 238 F.3d at 1332 (procurement decision may be set aside if (1) “ the procurement official’s decision lacked a rational
basis ” ; or (2) “ the procurement procedure involved a violation of regulation or procedure ” )

. To prevail, a protestor must not only show a significant error in the procurement process, but also that the error prejudiced the protestor. See, e.g.

, H omeSource Real Estate Asset Servs., Inc. v. United States , 9 4 Fed. Cl. 466, 478 (2010). In a post

- award bid protest such
as this one , th e standard requires th e plaintiff to demonstrate that there was a “substantial
chance it would have received the contra ct award

, but for the alleged error in the procurement process.” Info. Tech. & Applications Corp. v. United States , 316 F.3d 1312, 1319 (Fed. Cir. 2003).

In a best value procurement, the agency has even greater discretion than if the

contr act were awar ded based upon price alone. E.W. Bliss Co. v. United States , 77 F.3d 445, 449 (Fed. Cir. 1996). For example, in determining the proposal that offers the best value to the Government, the “agency has the discretion to select a lower

- priced, lower

technically

- rated proposal if it decides that the higher price of a higher

- technically

- rated proposal is not justified .” Blackwater Lodge & Training Ctr., Inc. v United States , 86 Fed. Cl. 488, 514 (2009)

. The agency will be able to demonstrate pro per discretion if “it documents its final award decision and includes the rationale for any business judgments
and tradeoffs made. ” Id.

Review of an agency’s procurement decision is generally limited to the
administrative record. See Axiom Res. Mgmt., Inc. v. United States , 564 F.3d 1374, 1379 (Fed. Cir. 2009) (“[T]he focal point for judicial review should be the administrative record10

already in existence”)

. Unlike a Rule 56 summary judgment motion, t he existence of genuine issues of material fact doe s not preclude judgment on the administrative record
under Rule 52.1. Tech

. Sys., Inc. v. United States , 98 Fed. Cl. 228, 242 (2011). Rather, the Court’s inquiry is whether , “given all the disputed and undisputed facts, a party has met its burden of proof based on the evidence in the record.” A&D Fire Prot., Inc. v. United
States , 72 Fed. Cl. 126, 131 (2006).

Under its bid protest jurisdiction, the Court is “empowered t o award any relief [it] considers proper, including declaratory and injunctive relief.” 28 U.S.C. § 1491 (b)(2) ; see also Centech Grp., Inc. v. United States , 554 F.3d 1029, 103 7 (Fed. Cir. 2009). For a permanent injunction to issue, the Court consider s t he following four factors: (1) whether plaintiff succeeded on the merits; (2) whether plaintiff will suffer irreparable harm in the absence of injunctive relief; (3) whether the balance of hardships to the parties favors granting injunctive relief; and (4) whether it is in the public interest to grant injunctive
relief. PGBA, LLC v. United States , 389 F.3d 1219, 1228

- 29 (Fed. Cir. 2004). While n o single factor is dispositive, “the absence of an adequate showing with regard to any one factor may be suffici ent, given the weight or lack of it assigned the other factors, to justify the denial of injunctive relief.” Linc Gov’t Servs., LLC v. United States , 96 Fed. Cl. 672, 701 (2010). Plaintiff must show entitlement to injunctive relief by clear and convincin g evidence. CSE Constr. Co. v. United States , 58 Fed. Cl. 230, 261 (2003).

II. Analysis

NVE ’s challenges to NAVFAC’s award of the NSA Bethesda contract to ACE can be summarized in three broad categories: (1) the a gency’ s decision to reopen discussions with offerors in the competitive range after it already had awarded the contract to NVE ; (2) the propriety of the a gency’s third evaluation of the offerors’ proposals ; and (3) the
SSA’s final best value determination

. For the reasons explained below, none of Plaintiff’s challenges has merit.

A. NVE Waived its Right to Challenge t he Agency’s Corrective Action
Decision

.

As an initial matter, the Court finds that NVE wai ved its right to challenge the

a gency’s decision to take corrective action and to reopen discussions and reevaluate proposals with offerors in the competitive range after NAVFAC already awarde d NVE the
NSA Bethesda contract

. A party who participates in a second round of proposal
submiss ions rather than protesting cannot subsequently challenge an agency’s decision to reopen discussions or reevaluate proposals. See Sheridan Corp. v. United States , 95 Fed. Cl. 141, 149

- 150 (2010) (“were the Court to dismiss Sheridan’s claims as not ripe fo r review, the current protest grounds later could be challenged as untimely if Sheridan does11

not prevail during the resolicitation process”); see also Cubic Def. Sys. v. United States

, 45 Fed. Cl. 450, 461 (1999) ( “Cubic failed to complain of this allege d error at the appropriate time

– when the Air Force continued to allow Metric to compete, or at least prior to submitting its final offer” )

. Vendors cannot “sit on their rights to challenge what they believe is an unfair solicitation, roll the dice and s ee if they receive award and then, if unsuccessful, claim the solicitation was infirm.” Blue & Gold Fleet , 492 F.3d at 1313

.

Here, o nce NAVFAC notified NVE that it would reopen discussions with offerors in the competitive range, the a gency’s proposed c orrective action became ripe for protest.
See AR Tab 50

. Thus , i f NVE had concerns with the a gency’s proposed corrective action, the time to protest was before the revised proposals were due

. See Cubic Def. Sys. , 94
Fed. Cl. at 461

. NVE wa s not permitted to wait for the a gency to complete the corrective
action to see if it received the award

. Blue & Gold Fleet

, 492 F.3d at 1313

. Plaintiff fully participated in the second round of proposal evaluations instead of protesting the a gency’s
actions

. See AR Tab 36, at 1 904

. Accordingly, NVE’s challenges regarding NAVFAC’s
decision to take corrective action are waived.

B. The Agency’s Third E valuation of Proposals Was Rational and Did Not Prejudice NVE.

The Court next examines NVE’ s arguments regarding the a gency’s third round of proposal evaluations

. Specifically

, NVE contends that NAVFAC’s reevaluation of the proposals was flawed because: (1) the a genc y did not “ evaluate the consistency of the linkage of ACE’s proposed price with the level o f effort proposed in Factor [1]

– Technical/Management Approach ” as required by the s olicitation; (2) the a gency did not validate the unit prices as required by the solicitation or it would have determined that ACE did not price its proposal in accordance with t he CBA wage rates; and (3) the a gency irrationally, and without explanation, eliminated two strengths from NVE’s proposal on Factor 1, Technical/Management Approach and eliminated evaluated weaknesses of
ACE ’s proposal , which raised ACE’s technical ratings

. See Pl.’s Mot. for J. on the Admin. R. (“ Pl.’s MJAR ”) at 4, 25

- 34 , Dkt. No. 53

.

1. The Agency Properly Evaluated the Consistency of the Linkage Between
ACE’s Proposed Price with its Proposed Level of Effort and Was Not Required to Conduct a Price Realism Analysis

.

First, NVE argues that NAVFAC did not evaluate the “ consistency of the linkage
of ACE’s proposed price with the level of effort proposed in Factor [ 1 ]

– Technical/Management approach.” See Pl.’s MJAR at 13

. As support for its argument

, NVE cites a discussion question from the a gency to ACE which states “[y]our proposed price appears significantly low in relation to your estimated level of effort . . . . Please12

review your proposal and explain your execution and pricing strategy. ” Pl.’ s MJAR at 15; AR Tab 23, at 1347. According to Plaintiff , this discussion question demonstrates that the

a gency was aware of ACE’s price being too low compared to its proposed number of Full Time Equivalent (“ FTE ”) personnel . D espite this awareness, NVE asserts that the a gency did not evaluate the consistency of the linkage between ACE’s proposed price and its proposed level of effort. Pl.’s MJAR at 1 5

- 17. Further, NVE argues that it was irrational
for the a gency to ignore the risk associated with ACE’s proposal since ACE adjusted the required labor hours per position by the use of a “Productive Factor” that was based on ACE’s experiences and efficiencies. Id. at 16

- 17.

Th e Government and ACE claim NVE is arguing that NAVFAC should have
conducte d a price realism analysis to determine if ACE’s price was unreasonably low. See
Def.’s Cross

- M ot. for J. on the Admin. R. (“Def.’s M JAR ”) at 19

- 23 , Dkt. No. 57 ; Intervenor’s Cross

- M ot. for J. on the Admin. R. (“Intervenor’s MJAR”) at 29

- 33 , Dkt. No.
58

. They claim o nly a price reasonableness analysis was required by the solicitation as this

wa s a fixed

- price contract and under the terms of the solicitation, a proposal could not be rejected for offering a low price. Def.’s MJAR at 19 ; Intervenor’s MJAR at 30

- 33 ; AR Tab 1, at 182 ( p rice will be evaluated to determine if it is “fair and reasonable”)

.

A n agency is required to evaluate proposals only in accordance with the terms of
the solicitation. See Banknote Corp. of America v. United States , 56 Fed. Cl. 377, 386 (2003). The Government cannot “rely upon undisclosed evaluation criteria in evaluating proposals.” Id. Where an a ward of a fixed

- price contract is contemplated, “a proposal’s price realism is not ordinarily considered, since a fix ed

- price contract places the risk ” of
loss on the contractor. See Acad

. Facilities Mgmt. v. United States , 87 Fed. Cl. 441, 466 (2009) (citing FAR 15.404

- 1) . Thus, f or a price realism analysis to a pply in a fixed

- price contract, the solicitation must expr essly or implicitly require a price realism analysis for a proposal to be rejected for an unrealistically low price

. Ceres Envtl. Serv., Inc. v. United
States , 97 Fed. Cl. 277, 306 (2011).

The administrative record suggests that NAVFAC evaluated the linkage b etween ACE’s proposed price and proposed level of effort in its Technical/Management approach

. Both NVE and ACE provided a detailed narrative and an Excel spreadsheet with specific
base s for the prices listed in the ELINs. See AR Tab 1, at 7; AR Tab 35.5 , at 1657 (ACE states they use d a productive hour rate to determine the number of FTEs needed to perform the required services)

, AR Tab 35.9 (ACE’s Excel Spreadsheet); AR Tab 36 , at 1922 (NVE explains how they calculated the number of FTEs for the required hours of service), AR Tab 36.2, at 1929 ( NVE’s Excel spreadsheet)

. The a gency also provided a review and evaluation of the offerors’ prices in the October 29, 2013 Price Analysis. AR Tab 17, at
10 47 (chart compares offerors’ firm

- fixed

- price wi th the number of FTEs proposed)

. Moreover, th e discussion question that the a gency submitted t o A CE regarding its number13

of F TEs suggests that the a gency at least contemplated the connection between the offerors’ total price with their proposed number of FTEs

. See AR Tab 23, at 1347. Finally

, nothing in the record demonstrates that ACE’s price became inher ently risky because it used a
“P roductiv e F actor” to calculate the required number of FTEs as NVE suggests

. The
Productiv e Factor was based upon reasonable sources

– ACE’s own contract experience
and the International Sanitary Supply Association (“ ISS A ”) standards

. See AR Tab 1, at 108 (ISSA provides the “cleaning industry time standards used for estimating/bi dding projects/jobs/contracts ” ); AR Tab 13a, at 340

- 41. NAVFAC reasonably accepted ACE’s
use of a “Productiv e Factor” in its price proposal.

However, e ven if the a gency did not evaluate the “consistency of the linkage ”
between ACE’s proposed price and proposed level of effort, NVE was not prejudiced because ACE’s proposal could not be eliminated for an unrealistically low price. The solicitation did not expressly or impliedly state that a price realism analysis would be
conducted

. See , e.g. , Ceres Envtl.

, 97 Fed. Cl. at 306

. Indeed, h ad the a gency conducted a price realism analysis, an offeror could have challenge d the analysis as “arbitrary, capricious, or an abuse of discretion” because the a gency would be re lying upon

un disclosed evaluation criteria in making its award

. See Banknote Corp. , 56 Fed. Cl. at
386. If ACE proposed an unreasonably low price, the risk of loss is on the contractor. I t would be irrational for the a gency to reject ACE’s proposed price simply because it was
the lowest when all of the offerors , including NVE, proposed significantly lower prices
than the Independent Government Estimate by approximately [* * *] percent to [* * *]
percent

. AR Tab 44, at 2114 (noting “all four offeror s [’] total prices [were] within 8% of the average”)

.

2. In a Fixed

- Price Contract, the Contractor Bears the Risk of Loss for Below CBA Wage Rates and Offerors Were Not Permitted to Escalate
CB A Wage Rates in the Option Years

.

Next, NVE argues that NAVFAC did not “validate the unit prices” of ACE’s proposal or it would have “determined that ACE priced the base year of the contract using wage rates in effect for October 1, 2013 to September 30, 2014, not wage rates in effect fo r the base year of the c ontract ” and did not escalate wage prices for the option years. See
Pl.’s MJAR at 20 , 22

- 25

. The difference s between ACE’s and NVE’s proposal on the
wage rates used for the base year plus option years of the contract make up approximately $2, 6 00,000 of the more than [* * *] price difference between NVE’s proposal and ACE’s proposal. See Report of Jimmy J. Jackson, at 9 , Dkt. No. 53

- 1 (ACE’s price would increase by [* * *] ).

Even though ACE and NVE used different CBA wage rates for the base year and option years of the contract , it ha s no effect on the outcome of this protest. First, e ven if14

ACE did not use the correct CBA wage rates in pricing the base year of its contract, this
fact would only result in a [* * *] price increase to ACE’s contrac t for the base year

. See
id. at 11. There would still be a significant gap between ACE’s proposed price and NVE’s proposed price. S uch a small increase to ACE’s proposed price likely woul d not have affected the best value determination. In a fixed pric e contract, the offeror bears the risk of using the wrong CBA wage rates, unless it shows an intent not to be bound by the Service
Contract Act

. See K

- Mar Indus., Inc. v. United States , 91 Fed. Cl. 20, 22

- 23 (2010). Here,

n othing in the administrative record demonstrates that ACE took an exception to the
solicitation’s CBA wage requirements that would render its bid nonresponsive.

Further, under the term s of the solicitation, NVE was not permitted to escalate wage

rates for the option years. See AR Tab 7, at 263 (stating that “[a]pplicable wage adjustments will be made in ac cordance with FAR 52.222

- 43, Fai r Labor Standards Act
and Service Contract Act

– Price Adjustment (Multiple Year and Option Contracts) ” ) ; FAR
52.222

- 43 ( the clause mandates that offerors “not include any allowance for any contingency to cover increased costs” for any option year ) . Even if the escalation was permitted, or if the a gency had evaluated NVE’s price and ACE’s price using identical
CBA wage rates for the base year and all of the option years

, NVE could not show prejudice
because there would still be a significant difference between ACE’s proposed price and NVE’s proposed price. Def.’s MJAR at 22

- 23 (approximately [* * *] difference). Thus,
NAVFAC would be acting well within its discretion if it determined that a [* * *] price difference did not warrant acceptance of a n equal or slightly superior technical proposal.
See Blackwater Lodge , 86 Fed. Cl. at 514

.

3. NAVFAC Had a Rational Basis for Changing its Evaluation of NVE’s and ACE’s Proposals on the Non

- Price Factors

.

Plaintiff also argues that it was irrational for the a gency to eliminate two of its strengths on Factor 1 while raising ACE’s technical ratings without a documented explanati on during the reevaluation of the proposal s

. See Pl .’s MJAR at 2 5

- 34

. Specifically

, NVE contends that the a gency : (1) should not have removed the weakness

asse ssed by the TET for ACE’s phase

- in plan; (2) did not provide a rational explanation for raising ACE’s relevancy rating on the C orporate E xperience factor from “Relevant” to “Very Relevant” and raising its Corporate Experience rating from “Marginal” to “Good”; (3) did not provide a rational explanation for raising ACE’s Safety rating from “Acceptable ” to “Good” or explain why NVE’s weakness on the Safety factor became a significant aspect of the source selection decision ; (4) did not provide a rational explanation for raising ACE’s relevancy rating on Factor 4 from “Relevant” to “Very Relevant”; and ( 5) did not provide a rational explanation for raising ACE’s overall technical rating from “Satisfactory” to “Good.” Pl.’s MJAR at 30

- 34.15

When an agency requests offerors to submit revised proposals

, it may reevaluate

t hose proposals and modify an offeror’s strengths and weaknesses. See Atlantic Driving Supply, Inc. v. United States , 107 Fed. Cl. 244, 261 (2012) (“[C]hanges in opinion between
the initial evaluation and the reevaluation

, and between the individual reviews and the
consensus, are not u nusual and do not indicate any ‘ illegitimate ’ action on the part of the Agency”). Thus, the mere fact that an offeror’s scores changed upon reevaluation does not mean an offeror was treated unfairly. See id.

Here, t he a gency had a rational basis for improving ACE’s technical scores. The discussion questions and responses from ACE resulted in an improved technical proposal
in the round three proposal evaluations

. See, e.g.

, AR Tab 106, at 3261 (clarifying qualifications for key personnel); AR Tab 33 a , at 1585

- 87 ( showing that ACE replaced one of its projects to meet the $10 million size standard ). For example, in the first round of the proposal evaluations, the TET assigned ACE a rating of “Somewhat Relevant/Unacceptable” on the Corporate Experience factor because it only evaluated one project that was worth $5 million as ACE’s proposal exceeded the solicitation’s 125 page
limit. See AR Tab 17, at 1011 . In round three, however, the TET evaluated three projects,
all of which exceeded $10 million in size. See AR Tab 45, at 2136

- 37

. Similarly, the

a gency rationally changed ACE’s rating on the Safety factor by adhering more closely to
the definitions in the solicitation

. See AR Tab 49, at 2207

. Simply because NAVFAC did not provide a detailed written explanation comparing the differences between ACE’s round

o ne proposal and its round t hree proposal does not mean it was irrational for NAVFAC to improve ACE’s rating on the non

- price factors when ACE submitted a superior proposal.

NAVFAC als o acted within its discretion in deciding that two of NVE’s “strengths” on Factor 1 no longer qualified as strengths

. See Atlantic Driving , 107 Fed. Cl. at 261. Moreover, NVE’s argument overlooks that it is the third round of proposal evaluations
which i s at issue here

. Its arguments concerning the second round of proposal evaluations
were waived. See supra , at I I.A. During the third round of proposal evaluations, th e TET assigned NVE a new strength that it was lacking during the round two proposal evaluations. Compare AR Tab 37 , at 2047 with AR Tab 45, at 2122. The changes in the number of strengths assigned to NVE on Factor 1 simply reflect the a gency’s change of opinion from

one evaluation to another

. Further, not hing in the record demonstrates tha t the a gency improperly based its decision on NVE’s Safety rating. Rather, p rice appeared to be the
determinative factor for the a gency considering that both offerors submitted sound technical proposals . Finally

, the a g ency’s evaluation did not prejudice NVE. NVE’s overall technical rating remained “Good” throughout all of the rounds of the evaluation s even when it received a rating of “Outstanding” on Factor 1 . Compare AR Tab 30, at 1549 with AR Tab 46, at 2147

- 48. Accordingly, a rating of “Outstanding” on Factor 1 could not have improved NVE’s overall technical proposal to make a meaningful difference in the16

best value determination and thereby have give n NVE a substantial chance of receiving the
contract award

.

C. The Agency’s Best Value Determination Was Rational and Did Not Prejudice NVE.

NVE contends that the a gency placed too much importance on price in making its
best value determination while d eemphasizing the importance of past p erformance

. Specifically, NVE points to the SSA’s decision , which stated “[w] ith price being the overwhelming ly important aspect of the solicitation (approximately equal to ALL non

price factors combined), ACE’s proposal clearly demonstrates a better overall value to the
Governmen t

. ” AR Tab 4 7 , at 2 154

. NVE asserts that price was only equal to the non

- price factors and therefore, could not have been “ the overwhelmingly important aspect ” of the
solicitation. See Pl.’ s MJAR at 36

- 37

. NVE also takes issue with the a gency’s evaluat ion of past performance. First, NVE says the SSEB’ s conclusion that ACE and NVE were “somewhat comparable” on the Past Performance factor was erroneous as NVE received the highest possible Acceptable rating while ACE received the lowest

. Pl.’s MJAR at 35

- 36; AR Tab 46, at 2150. Second, the SSA did not mention any of the “ e xcellent” and “exceptional ” evaluations in its tradeoff analysis for NVE’s past performance and irrationally adopted the SSEB’s analysis that the two offerors were “some what comparable” on the Past Performance factor. See Pl .’s MJAR at 35

- 36.

The Court finds that t here was nothing irrat ional about the SSA’s best value
determination. NVE misreads the SSA’s analysis regarding price . The SSA recognized that price was “a pproximately equal” to all non

- price factors as specified in the solicitation.
AR Tab 47 , at 2 154 . While the a gency might not have chosen the best adjectives to describe the importance of price in the tradeoff analysis, this word choice did not mean the

a gency’s best value determination was irrational . The SSA appeared to apply the appropriate weights to the price and non

- price factors in making the best value
determination. See AR Tab 47, at 2154 ( “ NVE’s higher rating in corporate experience . .
. and its substantial confidence rating in past performance does not warrant paying [* * *] [ million ] more when ACE has a solid technical proposal at a significantly lower price”).
Further , the solicitation specified that price would become “increasingly impor tant” if the offerors were relatively equal on the non

- price factors. U nlike in the first round of proposal
evaluations , ACE’s overall technical rating im proved from “Marginal” to “Good, ” the same overall technical rating that NVE received. Compare AR Ta b 30 with AR Tab 4 7

. ACE’s non

- price proposal became more comparable to NVE’s non

- price proposal even though NVE remained superior on the most important non

- price factor, Past Performance. Thus, NAVFAC acted well within its discretion to choose ACE’s low er

- priced proposal despite NVE’s slightly superior technical proposal

. See Blackwater Lodge , 86 Fed. Cl. at
514.17

Finally, t here wa s no prejudice to NVE even if the a gency erred by not recognizing significant differences between ACE’s proposal and NVE’s proposal on the Past
Performance confidence assessment . T here is no indication that had NAVFAC not deemed the two offerors “somewhat comparable” on past p erformance

, the a gency would have
recommended award to N VE, particularly given the stark difference in price between the
two offerors. NVE cannot overcome its heavy burden to show that the a gency acted irrationally or that it was prejudiced in this case.

Conclusion

For the foregoing reasons, Plaintiff’s motion for judgment on the administrative
record and request for a permanent injunction are DENIED. The Government’s and
Intervenor’s cross

- motions for judgment on the administrative record are GRANTED

.

On or before May 2 6

, 2015 the parties shall care fully review this opinion for competition

- sensitive, proprietary, confidential or other protected information, and submit to the Court proposed redactions to this opinion, if any, before it is released for publication. The parties are requested to minim iz e their requested redactions s o that the Court may publish as much of the decision as possible.

IT IS SO ORDERED.

s/ Thomas C. Wheeler
THOMAS C. WHEELER Judge