In the United States Court of Federal Claims

No. 18-326C

(Filed: August 3, 2018)

(Re-filed: August 21, 2018)1

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

ADVANCED MANAGEMENT STRATEGIES

GROUP, INC./REEFPOINT GROUP, LLC,

Plaintiff,

v.

THE UNITED STATES,

Defendant, 

and

ENTERPRISE RESOURCE PERFORMANCE, INC.,

Intervenor.

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

Craig A. Holman, Washington, DC, with whom were Nathaniel E.

Castellano and Alexandra L. Barbee-Garret, for plaintiff. Carrol H. Kinsey,

Jr., Alexandria, VA, of counsel.

Sonia M. Orfield, Trial Attorney, United States Department of Justice,

Civil Division, Commercial Litigation Branch, Washington, DC, with whom

were Chad A. Readler, Acting Assistant Attorney General, Robert E.

Kirschman, Jr., Director, and Reginald T. Blades, Jr., Assistant Director, for

Post-award bid protest;

Standing; Zone of active

consideration; SDVOSB;

Affiliation. 

1 This opinion was originally issued under seal to afford the parties an

opportunity to propose redaction of protected information. The parties were

unable to agree. Plaintiff offered no redactions. In an abundance of caution,

we have adopted intervenor’s proposed redaction of the names of its subcontractors and teaming partners because that information is potentially

competition sensitive to an ongoing procurement. We have also adopted

defendant’s proposed redactions. 
defendant. Karen Hunter, Trial Attorney, U.S. Small Business Administration,

Office of General Counsel, of counsel. 

Julia Di Vito, Washington, DC, with whom were Antonio R. Franco,

Peter B. Ford, and Timothy F. Valley, for intervenor.

OPINION

BRUGGINK, Judge.

This is a post-award bid protest brought by Advanced Management

Strategies Group, Inc./Reefpoint Group, LLP (“AMSG”). Defendant is the

United States acting through the Department of Veterans Affairs (“VA”). The

awardee, Electronic Resource Performance, Inc. (“ERPi”), intervened. 

AMSG’s complaint asks the court to enjoin the VA from awarding to ERPi. 

The parties filed cross-motions for judgments on the Administrative Record

(“AR”). Oral argument was held on July 12, 2018. The court held a status

conference on July 20, 2018, during which we announced that we would

sustain the protest and enjoin the award to ERPi. We entered an injunction

that same day. Because the VA was arbitrary in crediting ERPi with the

Commercial Healthcare Experience of what could be, at best, only a very

minor subcontractor, the award must be set aside and the evaluation redone.2

BACKGROUND 

On September 28, 2017, the VA Strategic Acquisition Center issued

Request for Quotations No. VA119A-17-Q-0413 (“RFQ” or “solicitation”). 

It sought commercial healthcare consulting services to help transform the VA

health system into a more modern and veteran-centric healthcare system

pursuant to the Veterans Access, Choice, and AccountabilityAct of 2014, Pub.

L. No. 113-146, 128 Stat. 1754 (2014). The VA set aside the contract for

Service Disabled Veteran Owned Small Businesses (“SDVOSB”) under

2 This opinion deals only with the issues necessary to reach our conclusion:

ERPi’s eligibility for award as a small business, VA’s evaluation of ERPi’s

Corporate Healthcare Experience, and plaintiff’s standing to bring these

challenges. The other arguments raised by plaintiff’s motion were dealt with

on the record during the status conference held on July 20, 2018. It is

unnecessary to consider those arguments again in print. 

2
NAICS Code 541611, which has a size standard of $15,000,000.3 AR 178. 

The VA sought these services from holders of the General Services

Administration (“GSA”) Federal Supply Schedule (“FSS”) SIN 874-1

contracts for integrated consulting services. AR 239. The solicitation

promised award of a Blanket Purchase Agreement (“BPA”) to a single offeror

pursuant to Federal Acquisition Regulation (“FAR”) part 8.405-3, and that the

agency would issue its first order along with the BPA. AR 247. The agency

intended to do so without holding discussions with offerors, but reserved for

itself the right to ask for a price discount fromthe apparent awardee as allowed

in FAR part 8.405-4. Id. The solicitation was specific that the procurement

was not subject to FAR part 15,which deals with negotiated procurement. 

I. The Solicitation

The VA intended to award the BPA on the basis of a best value tradeoff process, which would consider three non-price factors and the offerors’

prices. The non-price factors are 1) Technical, consisting of three subfactors

(Technical Approach, Staffing/Management Plan, and Key Personnel

Resumes); 2) Commercial Healthcare Experience; and 3) Past Performance. 

Id. The technical and commercial healthcare factors were considered of equal

importance, and together these two factors “[were] significantly more

important than the Past Performance Factor. All non-Price Factors, when

combined, [were] significantly more important than Price.” AR 248. 

Under the Technical Factor evaluation, for the Technical Approach

subfactor, the agency sought to ascertain from offerors’ proposals their

understanding of the problem embraced by the work, the feasibility of

offeror’s proposed solutions, including “the level or effort and mix of labor

proposed to perform the tasks identified in the first BPA order,” and whether

the offers “have adequately and completely considered, defined, and satisfied

3

“NAICS” is an acronym for the North American Industry Classification

System. Industries and commercial activities are assigned codes by the by the

Office of Management and Budget. Contracting Officers select the

appropriate code for a procurement that is set aside for small businesses. The

Small Business Administration assigns dollar values to each code, which then

becomes the size limits for the purpose of whether companies are considered

to be small for any particular federal procurement. See generally InGenesis,

Inc. v. United States, 104 Fed. Cl. 43, 45 (2012).

3
the requirements specified in the solicitation.” AR 249. For the Key

Personnel and Staffing Plan subfactors, the agency considered whether

offerors would have adequate key personnel and other staff available to

perform the work within the requested period of time. 

With the second factor, Commercial Healthcare Experience, the VA

aimed at plumbing the depths of offerors’ and any subcontractor’s specific

experience with commercial healthcare projects based on “previous

demonstrated recent and/or relevant experience. The breadth and depth of the

experience, criticality of any experience gaps identified, relevance to the

solicitation, and the quoter’s approach” were all considered by the agency

under this factor. Id. The solicitation stated that a lack of such experience

would be a negative while demonstrated “experience in both commercial

healthcare and government healthcare with transformed organizations similar

in size and complexity to VA will be rated more favorably.” AR 249-50. In

the questions and answers, added by amendment to the RFQ, the VA clarified

that offerors could submit their own experience and the experience of any

proposed subcontractor, no matter the size. See AR 155. The solicitation later

stated that, for this factor, an offeror was considered to be the prime contractor

and “all proposed subcontractors, major or otherwise.” AR 249. A major

subcontractor was separately defined in the RFQ under the Past Performance

factor. 

The Past Performance Factor was concerned more broadlywith the risk

associated with offerors’ proposals as measured by the “historical quality of

a firm’s performance” because the agency viewed offerors’ past performance

history as having “predictive value when it comes to assessing the risk of

doing business with the firm.” AR 250. Offerors were evaluated on the basis

of their own past performance and that of any major subcontractors, defined

as “one whose subcontract is for more than 20% of the total proposed price.” 

Id. Prime contractors and major subcontractors were assessed individually

“and the results [were] then assessed in their totality to derive the quoter’s Past

Performance rating.” Id. The VA considered the “quality, relevancy (size and

scope, and complexity) and recency (within last 3 years)” of these companies’

past performance. Id. Offerors without such experience were given a neutral

rating.

Offerors’ prices were evaluated for the fairness and reasonableness of

their labor rates and the total price for the first order against the BPA,

including “the level of effort and mix of labor proposed to perform the specific

4
tasks being ordered.” AR 251. Offerors were warned that unreasonable prices

would be rejected, resulting in disqualification for award. AR 247.

II. Evaluation And Award

The agency received six proposals in response to the RFQ by the

November 6, 2017 deadline. All six were determined to be eligible as

SDVOSBs. Three proposals are relevant to this protest: plaintiff’s,

intervenor’s, and that from a third-party, [ ]. The

agency began evaluations on November 13, 2017. The technical evaluators

performed individual and consensus evaluations of each proposal received. A

separate team evaluated offerors’ prices. For the non-price factors, the

technical team assessed strengths and weakness, confidence ratings, any

deficiencies found, and assigned adjectival ratings. The consensus results

were as follows for the three relevant offerors:

Factor ERPi [ ] AMSG

Technical

Approach

Excellent Good Satisfactory

Commercial

Healthcare

Experience

Substantial

Confidence

Substantial

Confidence

Satisfactory

Confidence

Past

Performance

Moderate risk Moderate Risk Moderate Risk

Total Price $3,925,388.48 $5,046,135.36 $5,215,473.59

Price

Reasonableness

Fair and

Reasonable

Fair and

Reasonable

Fair and

Reasonable

 

See AR 1474.

The contracting officer (“CO”) did not change these ratings, and he

relied on them in making his best value determination. On January 22, 2018,

the CO requested a price reduction from ERPi prior to award, representing to

intervenor that it was among the highest rated quotes, but not revealing that it

was going to be the awardee. ERPi responded the next day with minor

discounts. 

5
The CO finalized the best value determination on January 30, 2018, the

same day that the technical evaluation team finalized its report. The best value

determination document included a best value trade-off analysis between ERPi

and [ ], AR 1477-79, and a separate trade-off between ERPi and plaintiff,

AR 1475-77. The CO found ERPi to represent the best value to the

government because it represented both the highest rated and the lowest priced

offer. AR 1479. The document also touts the experience of ERPi and its team

as providing exemplary Commercial Healthcare Experience. See AR 1475,

1477-78. The CO added an addendum to reflect ERPi’s discounted final

prices. The best value determination was signed on January 31, 2018. The

final consensus technical evaluation was signed by some of the evaluators on

February 1 and by others on February 2, 2018, but a notation appears next to

those signatures indicating that the report was finalized on January 30, 2018. 

AR 1234, 1254, 1276, 1297, 1316, 1336. The best value determination

indicated that performance would commence on February 1, 2018.

The VA notified offerors of the results on February 1, 2018. 

Debriefings were requested by the unsuccessful offerors, and those were

conducted on February 6, 2018.

III. Procedural History

Plaintiff submitted a small business size protest against ERPi on

February 6, 2018. The CO referred the challenge to the Small Business

Administration (“SBA”) the next day, and issued a stop work order on

February 8, 2018, pending resolution of the size protest.

On February 12, 2018, the regional SBA office dismissed plaintiff’s

size challenge as untimely because it was not brought within five days of the

award to ERPi. AR 1999-2001. SBA relied on the regulatory requirement

that, for contracts placed against a long-term multiple-award contract, size

challenges must be brought at the time of award of the original contract that

placed the offeror on the multiple-award schedule, here the original GSA FSS. 

No new opportunity for protest arose when the agency solicited a BPA against

the schedule contract. Plaintiff then appealed to the SBA’s Office of Hearings

and Appeals (“OHA”) which likewise dismissed the challenge as untimely. 

AR 2244-45 (SBA OHA decision of May 7, 2018). 

On March 2, 2018, plaintiff filed suit in this court prior to the resolution

of its appeal at SBA OHA. ERPi intervened on March 9, 2108. After OHA

6
denied plaintiff’s appeal on May 7, 2018, plaintiff was granted leave to amend

its complaint to add allegations concerning the SBA OHA size decision. The

parties completed two rounds of briefing for judgment on the administrative

record, the second round concerned solely with the issue of ERPi’s eligibility

as a small business. We held oral argument on July 12, 2018, and on July 20,

2018, we sustained the protest and entered an injunction after informing the

parties of the result during a telephonic status conference. Order, ECF No. 39

(July 20, 2018). 

DISCUSSION

This court has jurisdiction over challenges brought by interested parties

to actions taken by federal agencies in connection with the procurement of

goods and services. 28 U.S.C. § 1491(b)(1) (2012). We review such agency

action pursuant to the standards set forth in the Administrative Procedures Act

(“APA”), 5 U.S.C. § 706 (2012). 28 U.S.C. § 1491(b)(4) (setting the standard

of review for bid protests to those proscribed in the APA. Thus, to prevail the

protester must establish that the agency acted arbitrarily or capriciously or

acted in a manner that was not in accordance with law. 5 U.S.C. § 706. This

means that the protestor must demonstrate that the agency lacked a rational

basis or violated applicable law or regulation. See Impresa Construzioni

Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332–33 (Fed. Cir.

2001). If the agency “examines the relevant data and articulates a satisfactory

explanation,” the decision will not be second-guessed by the court. Gulf Grp.

Inc. v. United States, 61 Fed. Cl. 338, 351 (2004). But, “where the agency

fails to undertake a review or fails to documents such review, we must

conclude that it acted irrationally.” Starry Assocs., Inc. v. United States, 127

Fed. Cl. 539, 549 (2016) (citing AshBritt, Inc. v. United States, 87 Fed. Cl.

344, 370 (2009)). If the agency action is found to be illegal or otherwise

irrational, the protestor must also show that it was harmed; i.e., that had it not

been for the agency’s error, “it would have had a substantial chance of

securing the contract.” Labatt Food Servs., Inc. v. United States, 577 F.3d

1375, 1378 (Fed. Cir. 2009). 

I. Plaintiff Has Standing

We begin with the latter question: whether plaintiff has standing to

challenge the award. Defendant and intervenor aver that plaintiff has not been

harmed because it is not next in line to receive the award should the award to

7
ERPi be set aside. They point to [ ] as the next ranked offeror and most

likely to receive the award if the contract is not awarded to ERPi. 

Plaintiff responds by arguing that it need only show that it was “within

the active zone of consideration,” Alfa Laval Separation Inc. v. United States,

175 F.3d 1365, 1367 (Fed. Cir. 1999), and that the record shows just that with

respect to the agency’s consideration of its proposal. We agree. The record

shows that the agency performed a best value trade-off between ERPi’s

proposal and AMSG’s as well as a best value trade-off between ERPi and 

[ ]. AR 1475-79. Under these circumstances, we think plaintiff has

established standing. Although most of the cases cited by the parties deal with

situations in which the party found to have standing was second in line, a

protestor need not show that it would have received the award but for the

alleged error. Id. (citing Data General Corp. v. Johnson, 78 F.3d 1556, 1562

(Fed. Cir. 1996)). When the agency’s best value trade-off includes the

protestor, even when it was not notionally the second-rated offeror, the

protestor has established that it would have had a substantial chance of

receiving the award but for the alleged error.4 The law is plain that, in the

context of a best value procurement, agencies have broad discretion to award

for any reason that meets a bare standard of rationality. We thus cannot

conclude that there is no possible reason the agency might award to AMSG

over [ ]. In other words, here, the law will not assume it a fait accompli

that the next highest rated proposal would receive the award. Plaintiff has

established that there is a substantial chance that it might be awarded the

contract if ERPi is not selected and it thus has standing to maintain the protest. 

 

II. ERPi Was Eligible For Award

Plaintiff argues that ERPi was ineligible for award because it was not

small, per the applicable NAICS code, at the time of award of the BPA. 

Plaintiff points to the VA’s own published guidance, which goes beyond the

SBA regulations to require that an offeror represent that it is small at the time

of award. AMSG argues that this additional requirement is not met simply by

having the applicable certifications of eligibility on file, but rather that the

offerors must make new affirmative representations of their size status at the

4 Nowhere in the best value determination is it affirmatively stated that [ ]

was the next-in-line offeror. The ratings table provided above shows that it

had the second highest non-price ratings, from which we infer it to be the

second-rated. 

8
time of award. Plaintiff concludes that the SBA OHA decision dismissing the

size protest of ERPi was flawed when it failed to apply the VA’s own, more

stringent requirements. Even if the SBA was correct in following its own

regulations, plaintiff urges that its decision is irrelevant because the VA was

under an obligation to go further in assuring itself that the intervenor was in

fact eligible for award at the time of award. Plaintiff alleges that it was not,

and thus should not have received the award.

Defendant answers that the SBA did no more than lawfully follow its

own applicable regulations and that, even had it applied the VA’s guidance,

the result would not have changed. The government argues that the applicable

regulations, including the published guidance cited by plaintiff, do not require

a new size certification at the time of award, but rather that the agency was

permitted to rely at the time of award on ERPi’s on-record certifications that

it fit under the NAICS code.5 Defendant also argues that, to the extent plaintiff

is challenging the service disabled veteran status of ERPi, that challenge is not

ripe because plaintiff failed to pursue the issue administratively with the VA.6

A. Small Business Set-Aside Regulations

We begin with the applicable regulations. Two sets of regulations are

implicated bythis protest—the SBA’s and theVA’s—but the VA’s regulations

for small business set-asides tie the two together. FAR part 819 deals with

small business participation programs generally, and subpart 819.70

specifically applies to VA’s set-asides for veteran-owned small businesses. 

Subpart 7003 draws the link, stating that VA set-asides “continue[] to be

governed by the Small Business Administration regulations, 13 CFR subparts

125.8 through 125.13, as well as the FAR, except where expressly directed

otherwise by the VAAR, and 38 CFR verification regulations for SDVOSBs

5

Intervenor also argues that the VA’s class deviation was not legally binding

on the agency because it was not the subject of notice and comment rulemaking. We do not reach that question because we find that the result is the

same with or without the class deviation.

6 We do not, however, view plaintiff’s challenge as being directed at ERPi’s

veteran owned or service disabled status. Thus we do not treat the issue

below. Plaintiff’s attack is limited to the NAICS code size standard, which we

believe to be properly before us due to plaintiff having protested the issue to

the SBA and then appealed to SBA OHA. 

9
and VOSBs.” 48 C.F.R. § 819.7003(a) (2017). Subpart 7003 continues: “(b)

At the time of submission of offer, the offeror must represent to the

contracting officer that it is a - (1) SDVOSB concern or VOSB concern; (2)

Small business concern under the [NAICS] code assigned to the acquisition;

and (3) Verified for eligibility in the VIP database.” Id. § 819.7003(b). 

Subpart 819.7003(b)(2)’s requirement that offerors represent their size

standard under the applicable NAICS code at the time of offer mirrors the

applicable SBA-specific regulation, 13 C.F.R. § 125.14 (2017), which states

that “At the time of contract offer, an SDVO SBC must be small within the

size standard corresponding to the NAICS code assigned to the contract.” 

Section 121.404 answers the question of when the size status of a business

concern is determined: “SBA determines the size status of a concern . . . as of

the date the concern submits a written self-certification that it is small to the

procuring agency as part of its initial offer.” Id. § 121.404 (2017). 

The next question is when is an offeror required to submit such

certification. Section 121.404 goes on to deal specifically with orders issued

against a multiple award contract, such as the GSA FSS, and states that “SBA

determines size at the time of initial offer, . . . for a Multiple Award Contract.

. . . If a business is small at the time of offer for the Multiple Award Contract,

it is small for each order issued against the contract, unless a contracting

officer requests a new size certification in connection with a specific order.” 

Id. § 121.404(1)(i). If the CO “requests a new size certification for the order,”

then, and only then, “SBA will determine size at the time of initial offer . . . for

an order.” Id. § 121.404(1)(iii). In sum, when the award is for an order

against a multiple award schedule contract, as here, SBA will look to the

certifications made by offerors when they entered into the schedule contract,

not the order. The only exception is when the CO of an agency submitting an

order against the schedule requests new certifications.

SBA’s size protest timeliness rules predictably follow the same logic. 

Because this contract is an order awarded under a long-term GSA FSS

contract, SBA’s long-term contract (or multiple award contract) timeliness

regulation applies: 

For contracts with durations greater than five years (including

options), including all existing long-term contracts,

Multi-agencycontracts,Governmentwide Acquisition Contracts

and Multiple Award Contracts:

10
(i) Protests regarding size certifications made for

contracts must be received by the contracting officer

prior to the close of business on the 5th day, exclusive of

Saturdays, Sundays, and legal holidays, after receipt of

notice (including notice received in writing, orally, or via

electronic posting) of the identity of the prospective

awardee or award. 

. . . .

(iii) Protests relating to size certifications made in

response to a contracting officer’s request for size

certifications in connection with an individual order must

be received by the contracting officer prior to the close of

business on the 5th day, exclusive of Saturdays, Sundays,

and legal holidays, after receipt of notice . . . .

Id. § 121.1004(a)(3)(iii). Subsections (i) and (iii) read together mean that

protestors generally have five days from award of the master FSS contract to

protest an awardee’s size certification unless the CO requires re-certification

at the time of award of an order against the FSS contract. Here, the CO did not

ask for a new certification at any point.

The VA’s own supplemental procurement regulations, known as the

VA Acquisition Regulation (“VAAR”), add another level of administrative

requirements to VA procurements. From time to time, the VA issues new

rules that deviate from published FAR or VAAR provisions, called

“deviations.” Plaintiff cites to the class deviation issued by the VA on July 26,

2016, which purports to supercede FAR part 819.7003. The deviation

replaces subsection (b) with the following language: “At the time of

submission of offers/quotes, and prior to award of any contracts, the offeror

must represent to the contracting officer that it is . . .” and then it goes on to

list the same three requirements of eligibility: status as a SDVOSB/VOSB,

small under the NAICS code, and listed as verified in the VIP database. Class

Deviation—Veterans First Contracting Program (VFCP 2016), Attachment 4

§ 819.7003 (July 25, 2016) (emphasis added). This adds to FAR part 819.7003

the requirement that an offeror represent its eligibility to the CO at the time of

award in addition to at the time of offer. The impact of that additional

requirement is the issue raised by plaintiff.

 

11
B. ERPi Was Eligible at the Time of Award of its GSA FSS Contract

And at the Time of Award of the BPA

We hold that neither the VA nor the SBA erred. SBA simply applied

its timeliness requirements as written. Nothing in the VAAR or published

deviation purports to change the SBA’s size protest timeliness rules. That fact

dictates the result reached by SBA OHA. 13 C.F.R. § 121.1004(a)(3)(i) and

(iii) are clear that an offeror has five days from the award that places a

contractor on the schedule contract to protest that awardee’s size status or, if

the CO asks for new certifications when placing an order against the supply

schedule, a new five-day window is opened. Here, the CO disavowed on

multiple occasions the opportunity to ask for new certifications. Thus no new

window was opened to challenge ERPi’s size status, and OHA was neither

arbitrary nor capricious in finding so. Although our review could end here, we

also consider plaintiff’s alternative argument that the SBA’s decisions are

irrelevant given the VA’s class deviation’s requirements.

Plaintiff argues that, because SBA OHA did not attempt to circumvent

its own timeliness rules to take into account the VAAR deviation, the SBA

decision is irrelevant and the agency was otherwise under an independent duty

to assure itself of ERPi’s size at the time of award, which plaintiff avers would

have resulted in disqualification and award to another offeror. We do not view

the class deviation as quite so sweeping in its effect.

Although the VAAR class deviation does create a new point of inquiry

for the VA into the size of status of offerors, it does not change the existing

framework under which offerors certify themselves as small and veteran

owned and/ or service disabled. Offerors are required to represent to the

agency that they meet the size standards at the time of offer and award. We

take this, as the parties do, to mean also at the time of award of an order

against a schedule contract, but the process of making such representations we

view as unchanged. 

Here, the RFQ informed offerors that the VA would evaluate their 

eligibility through the SAM and VIP databases. AR 164 (Questions and

Answers); AR 248 (evaluation process graphic). Answer to question 84 stated

that the VA would “determine company size by referencing [SAM]

representations and certifications at the time of receipt of Quotes and at the

time of award.” AR 164. Question 86 specifically asked whether the agency

would include a requirement for re-certification of SDVOSB status. The

12
answer was in the negative, although offerors were given the option of

including updated certifications with their proposals if they did not want the

agency to rely on those found in the SAM database. Id. The agency did as

promised, and it found ERPi to have the necessary certifications in both the

SAM and VIP databases. AR 1356 (best value determination).

Thus, if an offeror’s on-file certification that it meets the NAICS code 

remains unchanged during a procurement, the agency is permitted to rely on

it both at the time of offer and again at the time of award. The regulations also

afford the agency discretion to require new certifications if the CO so chooses,

but neither the class deviation nor any other cited regulation requires the CO

to do so at the time of award. If an offeror’s status in the applicable database

should change for other reasons between the time of offer and award, it might

be rendered ineligible at the time of award under the VA’s class deviation, but

nothing in that deviation independently requires an offeror to make a new

certification at that time. 

In sum, the agency promised to avail itself of the record certifications

at the time of offer and award, and did so. We do not view the class deviation

as creating a new requirement that offerors re-certify themselves for every

offer that they submit to the VA and again at time of award. The FAR

mandates that contractors update their size certifications only annually. 48

C.F.R. § 4.1201 (2017). Businesses are eligible to remain in the VIP database

for three years unless they fall out of compliance. See 38 C.F.R. § 74.15(a)

(2017). The best value determination contains a screenshot of intervenor’s

VIP profile, which listed that it was last verified on January 11, 2016, and that

certification would not expire until January 11, 2019. AR 1356. Because the

agency did not request re-certificaton and because it was not required to do so,

the agency was not arbitrary or capricious and did not act contrary to law in

finding that ERPi was eligible for award.7 

 

7

Intervenor also argued that, even had it been required to re-certify, it would

have met the size requirements. Plaintiff alleges the opposite, and both parties

cite to extra-record materials for factual support. We do not reach that issue,

however, because the agency was proper in its reliance on the of-record

certifications at the time. 

13
III. The Agency’s Evaluation of ERPi’s Commercial Healthcare Experience

Was Arbitrary

Plaintiff’s other main challenge to the VA’s selection of ERPi concerns

how the agency viewed intervenor’s relationship to two entities of similar

name. One was offered by ERPi as a major subcontractor under the Past

Performance factor, and the other companywas invoked as a“strategic teaming

partner” that would provide experience and other non-specific support to

ERPi’s effort in performing the contract. The latter company was cited by

ERPi in its Commercial Healthcare Experience volume. 

The experience of [ ] was

touted by the VA in its evaluation of ERPi under the Commercial Healthcare

Experience factor as providing the basis for the agency’s award of a substantial

confidence rating. Plaintiff challenges that finding as unfounded by ERPi’s

proposal and likely the product of confusion on the part of the agency between

[ ] and [ ].

The Commercial Healthcare Experience factor was considered by the

agency to be of equal importance with the Technical factor. The solicitation

is clear that the agency was very interested in procuring consulting services

from companies with experience in transforming healthcare systems, be they

the prime contractor or its subcontractors. To that end, offerors were invited

to provide three examples of such past efforts under this factor from their own

or their subcontractor’s experience. AR 242. Offerors were provided five

pages to write a narrative description of those efforts focusing on how that

experience “equipped it with the knowledge, skills and ability to support

implementation of a health care delivery system for a large, complex

enterprise-wide healthcare network.” AR 243. As mentioned previously, no

distinction for this factor was made between major and other smaller

subcontractors.

On the first page of its proposal, in the first paragraph, intervenor listed

its team to perform the work: ERPi, “[

.]” AR

651. In the next paragraph, intervenor stated that, after reviewing the

statement of work, “we have carefully considered additional teammates to

augment our capabilities and perspectives and provide best value to the

government.” Id. It then listed these two key teammates: “[ 

 ]” and “[ .]” Id. Thus ERPi began its proposal by

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defining “[ ]” as referring to two separate entities, [ ]. 

It touted these entities as having more experience “orchestrating health system

modernization strategy and implementation than any other commercial firm.” 

Id. An effort to transform [ ] was cited as the example. 

In the Commercial Healthcare Experience section of its proposal

specifically, ERPi listed “[

]” as “strategic teaming partners.” 

AR 741. It again defined [ ] as a collective of the same two similarly named

entities with which it began its Technical volume. The next paragraph goes on

to list ten healthcare providers for which [ ] [has] provide[d] ‘strategy

through implementation’ services and successfully execute[d] complex

projects for” in a highly competitive market. Id. “[ ] brings the best of

commercial and Federal consulting to our clients to help them achieve

success.” Id. It is unclear which entity has which experience. Intervenor then

listed three specific past efforts in the field of healthcare consulting as invited

by the RFQ: [ ]. AR

743-45. All three were listed as performed by “[ ]” or “[ ].”

Although it is unclear from these statements taken alone which of the

two [ ] entities had performed these cited prior efforts, the technical

evaluators understood these references to have been performed by [ ]. 

See AR 1287-89 (“Work performed by [ ]). The

parties do not dispute that this work was performed by [ ] and not [

]. 

Some additional clarity is provided in the Past Performance section of

intervenor’s proposal. There it lists its major subcontractors–those performing

at least 20 percent of the work–as [ ] and [ ]. 

ERPi itself is listed as performing 50.25% of the work, [ ] 23.42%,

and [ ] 23.69%. AR 755. That chart also lists the statement

of work tasks that these companies would be performing. Id. (ERPi tasks 9.1-

9.6; [ ] tasks 9.2-9.6; and [ ] task 9.5). Those three

total 97.36% of the value of work under the contract. No breakdown of the

percentage of work or list of tasks to be performed is found anywhere in

ERPi’s proposal for [ ]. Also as part of its Past Performance proposal,

intervenor provided three past performance references as required by the RFQ. 

The first was performed by ERPi, the second by [ ] in which

ERPi was a subcontractor, and the third was performed by [ ]. 

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The VA technical evaluators considered each of the three examples

provided of Commercial Healthcare Experience. They listed each as having

been performed by [ ], not [ ], and credited the

experience to ERPi. The result was a “substantial confidence” rating, the

highest possible adjectival rating, for the Commercial Healthcare Experience

factor. AR 1290. The consensus rating report states that “[t]he Partnership

with [ ] and their example experience/projects suggest a high probability of

success with VA Modernization given the relevant comparisons of needed

effort.” Id. These examples “exhibited the ability of team ERPi to support

improvement and implementation of large healthcare delivery systems” and

“demonstrate that Team ERPi can deliver results that VA will expect.” Id. 

The CO relied on these findings in his best value determination,

agreeing with them all. He touted the experience of ERPi’s “key partner’s” as

driving the agency’s evaluation of intervenor’s Commercial Healthcare

Experience. In both trade-off analyses, ERPi’s “team of subcontractors” was

cited as a benefit to the government. See AR 1476, 1477. 

Read together, these record statements provide a clear picture that the

VA relied heavily on the experience provided by “team ERPi,” and most

specifically that provided by [ ]. [ ] , t h e m a j o r

subcontractor, however, performed none of the work on which intervenor

relied for its Commercial Healthcare Experience examples and on which the

evaluators and the CO relied as giving the VA substantial confidence in

ERPi’s handling of this contract. In fact, for the Past Performance evaluation,

wherein intervenor could rely only on its own and its major subcontractors’

experience ( i.e., not that of [ ]), the agency found moderate risk

associated with ERPi’s proposal. AR 1474. The question then is whether it

was reasonable for the agency to have found so much support in the undefined

role to be played by [ ], which by definition could not have consisted

of more than 3% of the effort. 

Plaintiff answers that question in the negative, and we agree. Plaintiff

avers that [ ] and [ ] are separate entities and cites to

extra-record materials to establish that they are no longer affiliated under a

parent company or other corporate relationship. Plaintiff also cites to other

recent bid protests in which the relationship between the two companies was

at issue. We need neither such reference to illuminate a problem that is

apparent from the record.

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Defendant relies on the solicitation’s allowance of any subcontractor’s

experience to be used for the Commercial Healthcare Experience factor, no

matter the anticipated scope or size of that company’s performance under the

solicited contract. Thus, in defendant’s view, the agency was entitled to rely

on whatever was provided by an offeror by way of a subcontractor’s previous

experience for this factor. The total lack of indication in the record that [

] would perform any particular work under the contract or otherwise

offer some specified support to intervenor’s and its major subcontractor’s

efforts is thus irrelevant in the government’s view. 

Intervenor takes a slightly different tack, arguing not that the

percentage of performance of the subcontractors relied on for Corporate

Healthcare Experience is irrelevant, but that the law provides for situations

like these by allowing offerors to rely on the experience of “affiliates” for

purposes of providing experience and other relevant solicitation requirements. 

Intervenor states that [ ] and [ ] are affiliates and were

thus properlyconsidered together bythe agencyfor their collective experience.

The connection not offered by either defendant or intervenor, however,

is the basis on which the agency could reasonably conclude that [ ] ’ s

experience would be meaningfully brought to bear by “Team ERPi.”8 Neither

intervenor’s proposal nor the agency’s evaluation provide the missing link. In

fact, the breakdown of performance in ERPi’s proposal suggests the opposite;

between ERPi, [ ], and [ ], 97.36% of the work was

accounted for, leaving only 2.64% for any other subcontractor to perform. 

And that tiny percentage also has to account for [ ], which 

was listed as a “strategic teaming partner” of ERPi as well as “industry

experts, luminaries, and academia.” AR 755 (stating that work not captured

8 At oral argument, intervenor’s counsel offered that [ ] would likely

be a “second-tier” subcontractor for this work, meaning that it would have a

contractual relationship as a sub-subcontractor to one of ERPi’s major

subcontractors, but no privity with the government. Such an arrangement

would provide for [ ] to in fact perform more than some share of the

2.64 percent left over for anyone other than ERPi, [ ], and [

]. That explanation provides no support for intervenor’s position,

however, because neither the agency nor the intervenor posited it as a rationale

at the time of award, nor does any other document in the record suggest such

a relationship.

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in the chart above would be performed by experts, luminaries, and academia). 

 

Only [ ] was offered by intervenor as performing a large

percentage of work as a subcontractor. No representation appears in the record

regarding the scope or size of [ ]’s anticipated performance. The

only thread connecting [ ] to ERPi’s proposed effort are several

instances where “[ ]” is defined in parentheses as including both [ 

] and [ ], but in no place does it explain the corporate relationship

between the two or make any other representation on which the agency could

conclude that [ ] was obligated either to ERPi or to [

] to provide support for their efforts under this contract.9It is also

important to note that the listing of [ ]’s three previous corporate

healthcare experience efforts is nothing more than a recitation of that

company’s experience. Without a legal link between the two, the agency

cannot reasonably have considered the experience relevant to ERPi or any of

its subcontractors. All this is too thin a reed. 

As to the argument from intervenor that [ ] is an affiliate of

[ ], we again note that no such connection is drawn byintervenor’s

proposal or the agency’s evaluation. This court has held that an agency can

rely on the experience or past performance of “a parent or affiliated company

. . . where the firm’s proposal demonstrates that the resources of the parent or

affiliated company will affect the performance of the offeror.” Femme Comp

Inc. v. United States, 83 Fed. Cl. 704, 747 (2008). The problem for defendant

and intervenor is that, other than naming the two entities together and citing

[ ]’s experience, the proposal draws no link to assure the agency

that “the resources of the . . . affiliated company will affect the performance

of the offeror.” Id. The court has only a fixed lense through which to view the

agency’s actions: the words contained in the contemporaneous record of the

procurement. Here, there is no documentary support for the agency’s reliance

on [ ]’s corporate healthcare experience as providing the critical

experience for intervenor. The agency may have known something about the

two entities’ corporate relationship or it may have inferred something from

ERPi’s proposal, but this speculation is not supported on the record. We

therefore conclude that the agency acted arbitrarily in awarding a “substantial

confidence” rating to ERPi for the Commercial Healthcare Experience factor. 

9 ERPi did list one individual for the Key Personnel technical subfactor as

coming from [ ]. We view that fact as insufficient to draw the

necessary link. 

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It necessarily follows that the best value determination and award to ERPi

were also irrational. 

IV. The Award Must Be Set Aside

Because defendant arbitrarily inflated the awardee’s rating for one of

the two most important factors, the award must be set aside and the evaluation

performed again. In order to enjoin any agency action, the court must consider

four factors in reaching that conclusion. They are: 1) whether plaintiff has

succeeded on the merits, as it must to receive permanent injunctive relief; 2)

whether plaintiff will suffer irreparable harmabsent the injunction; 3) whether

the balance of the hardships to the respective parties favors an injunction; and

4) whether it is in the public interest to grant the injunctive relief. PGBA, LLC

v. United States, 389 F.3d 1219, 1229 (Fed. Cir. 2004). The court considers

all of the factors together. No one factor is dispositive other than that plaintiff

must succeed on the merits in order to gain permanent injunctive relief. 

As we hold above, plaintiff has demonstrated standing and shown that

the agency irrationally evaluated the awardee’s proposal. The first hurdle is

met. As to the harm suffered by plaintiff absent relief, this court has often

found that the loss of an opportunity to fairly compete for a contract is a

significant and irreparable harm. We find so here. The balance of the harms

favors plaintiff. Other than delay, defendant has not shown how it will be

harmed by the injunction. Eventually the work can be performed one way or

the other. The provision of healthcare to veterans is not immediately

implicated by requiring additional time be taken for this procurement. 

Plaintiff, on the other hand, will be harmed by losing its opportunity to

compete for the work. The public’s interest always is in ensuring the lawful

expenditure of public funds, meaning that federal entities must meet the

standards prescribed by procurement statues and regulations as well as the

APA. A rational and fair acquisition process is part and parcel with this

interest, and defendant has not proffered any countervailing public interest. 

In sum, we find that injunctive relief is warranted. We entered an injunction

at the time of the status conference on July 20, 2018. 

CONCLUSION

Although the intervenor was eligible for the award—the VA’s reliance

on ERPi’s SAM and VIP certifications was not unlawful—the agency was

arbitrary and capricious in crediting it with the commercial healthcare

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experience of an entity that the agency had no apparent reason to think would

meaningfully support the work or would otherwise influence intervenor’s

performance in a significant way. Thus we previously granted plaintiff’s

motion for judgment on the administrative record, denied defendant’s and

intervenor’s cross-motions, and entered an injunction setting aside the award

to ERPi and instructing the VA to reevaluate ERPi’s proposal and make a new

award decision. We have also considered plaintiff’s other allegations, but as

explained on the record during the status conference, none provide a basis for

sustaining the protest. Accordingly, the Clerk of Court is directed to enter

judgment for plaintiff. No costs. 

s/Eric G. Bruggink 

ERIC G. BRUGGINK

Senior Judge

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