Bid Protest; Post-Award;

Judgment on Administrative

Record; Contract Modification;

10 U.S.C. § 2304 (a)(1)(A);

Security Clearance; Contract

Interpretation

In the United States Court of Federal Claims

Nos. 15-616C, 15-617C, 

15-618C, 15-619C, 15-620C

(Originally Filed: September 9, 2015)

(Re-filed: September 17, 2015)1

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

SCHOTT GOVERNMENT SERVICES, LLC,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

ORAN SAFETY GLASS, INC.,

Intervenor.

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

 

Lee Dougherty, Tysons Corner, VA, for plaintiff, with whom was

Katherine A. Straw, Tysons Corner, VA, of counsel.

Devin A. Wolak, Trial Attorney, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washington, DC, with

whom were Benjamin C. Mizer, Principal Deputy Assistant Attorney

General, Robert E. Kirschman, Jr., Director, and Martin F. Hockey, Jr., for

defendant.

1

 This opinion was originally filed under seal. The parties were directed to

confer and propose redactions. The court adopted the parties’ suggested

redactions, removed the information, and inserted brackets to replace the

redacted content. The opinion is now prepared for release.
Richard L. Moorhouse, McLean, VA, for intervenor, with whom

were L. James D’Agostino, McLean, VA, of counsel, and Ryan Bradel,

Washington, DC, of counsel.

_______________

OPINION

_______________

BRUGGINK, Judge.

This is a post-award protest of a solicitation for transparent armor

windows for use on Mine-Resistant Ambush-Protected (“MRAP”) vehicles

known as MRAP All-Terrain Vehicles (“M-ATV”). Plaintiff, Schott

Government Services, LLC (“Schott”) challenges the Defense Logistics

Agency’s (“DLA” or “the Agency”) award of five separate contracts for the

supply of the windows to the awardee, Oran Safety Glass (“OSG”). OSG

intervened in the action. Currently before the court are the parties’

cross-motions for judgment on the administrative record (“AR”)2pursuant to

Rule 52.1 of the Rules of the Court of Federal Claims (“RCFC”). The motions

are fully briefed, and we heard oral argument on September 1, 2015. For the

reasons explained below, we deny plaintiff's motion for judgment on the

administrative record and we grant defendant’s and intervenor’s cross-motions

for judgment on the administrative record.

BACKGROUND

The M-ATV transparent armor was developed by the government prior

to this procurement for use on MRAP vehicles. Subsequent to its development,

the transparent armor was assigned a National Stock Number (“NSN”), which

is a label used by the government to identify an item that is routinely procured,

stocked, and used by the government. After an NSN is assigned to a product,

the government seeks approved sources to manufacture and supply the NSN

through the Source Approval Request (“SAR”) process. Once approved,

2The facts are drawn from the administrative record, which is presented in a

unique fashion in this case. There are 8 sections: AR 118, AR 119, AR 120,

AR 121, AR 137, CT(DLA), CT(TACOM), and CT(DIS). Each section is

separately paginated. 

2
sources can submit bids for later solicitations, seeking to be awarded a specific

contract to supply that NSN. 

OSG submitted itsinitial Source Approval Request (“SAR”) in October

2011, seeking to be one of the approved sources for the NSNs sought in the

procurement at issue in this case. CT(DLA)-148. In its SAR, OSG indicated

that it followed U.S. ArmyTACOM Armor Transparent Purchase Description

2532 (“ATPD 2532") “for all test procedures, according to ballistic protection

class defined by classified Annex [] DTA-184044.” CT(DLA)-211; see also

CT(DLA)-302. DTA-184044 is a drawing which provides precise protection

class threat specifications. CT(DLA)-309. It is classified as SECRET, and

“[p]roof of proper authorization and security clearance shall be required to

obtain copies.” Id. Also in its SAR, OSG represented to the Agency that it

would follow a specific recipe for the composition of the windows, recipe [

]. CT(DLA)-147, 212; Defendant’s Appendix ¶ 8 (hereinafter Def.’s App.).

This recipe had been previously approved as satisfying ATPD 2532. Id. OSG

was subsequently approved as a source for the M-ATV transparent armor.

Schott was later added as an approved source for the transparent armor in July

2014.3

In June 2014, DLA issued five Requests for Proposals (“RFP”) for the

supplyofthe M-ATV transparent armor.4The M-ATV Solicitations sought the

supply of transparent armor with the same NSNs for which OSG and Schott

had been approved as sources through the SAR process. The acquisition plan

specifically noted that “[t]his acquisition will not be involving any classified

documents or information.”5 AR 118-3-5; AR 119-3-5; AR 120-3-4; AR 121-

3-5; AR 137-3-5. The procurements were conducted on a limited-source basis,

3

 The original acquisition plan, created in June 2014, did not list Schott as

an approved source. The plan was amended in July 2014 to add Schott as an

additional approved source for the M-ATV transparent armor. 

4

 Nos. SPE7L3-14-R-0118, SPE7L3-14-R-0119, SPE7L3-14-R-0120,

SPE7L3-14-R-0121, and SPE7L3-14-R-0137 (collectively, the “M-ATV

Solicitations”).

5

 The acquisition plan for the M-ATV Solicitations is a classified document,

which is not released to the approved sources, but the placement of this

statement in it shows that the government intended that the solicitations not

involve any classified material or information.

3
as only OSG and Schott had been previously approved through the SAR

process as sources for the NSNs sought. Proposals were evaluated according

to “Best Value” procedures, and OSG was awarded the contracts during

October 2014 and January 2015. Schott was subsequently notified that its

offers were not accepted because they were not the low price offers after

consideration of all the evaluation factors.

In January 2015, Schott contacted the Agency to express its concerns

that OSG had changed its recipe for the transparent armor. Subsequently, the

Army’s Project Manager MRAP office (“PM MRAP”) contacted the Agency

in February 2015 regarding these concerns, and requesting production control

testing, including re-certification of the recipe during ballistic testing. PM

MRAP cited ATPD 2532 section 4.2.1, which stated that any changes made in

the manufacturing process may be subject to First Article Testing (“FAT”).

CT(DLA)-20. After analyzing the transparent armor manufactured by OSG,

PM MRAP discovered that OSG had manufactured multiple configurations,

only one of which had been submitted to the government through its SAR

process. This discovery sparked concerns that OSG was delivering a

configuration that had not been approved by the government. PM MRAP

informed the Agency of its findings in March 2015, and provided a list of

information that the Agency should request from OSG. CT(DLA)-144. A

March 27, 2015 letter to OSG from the Agency advised OSG that the Agency

had been made aware of its possible failure to comply with the contract. This

letter informed OSG that the delivery of any composition other than [ ]

was not authorized and would be considered non-compliance, and requested

that OSG provide the Agency with quality/inspection records identifying the

recipe that was or would be delivered pursuant to each contract. 

OSG responded by letter on April 8, 2015, providing an analysis of

what it suggested was a misunderstanding between OSG and the Agency, and

citing ATPD 2532 paragraph 3.2, which provides that “[a]fter FAT approval,

no material or process changes that may affect product performance, including

ballistic integrity and environmental durability, shall be made without the

procuring activity approval.” CT(DLA)-367. According to the letter, after

performing the necessary tests, OSG concluded that the new recipe, [ ],

did not affect performance. Therefore, OSG believed that based on its

interpretation of ATPD 2532, it could substitute recipe [ ] for recipe [ 

 ] in its deliveries to DLA, and thus began to deliver recipe [ ]to fulfill

its contracts with the Agency. OSG suggested that it had begun to develop

recipe [ ] after developing some concerns regarding the availability and

4
quality of some M-ATV raw materials. Moreover, OSG indicated that this

new recipe had been submitted on April 8, 2015, for a source approval request.

DLA subsequently responded with a cure notice on April 21, 2015. The

notice informed OSG that the government considered OSG’s supply of

nonconforming parts as endangering contract performance, and warned that

unless the condition was cured within 10 days after receipt of the letter, the

government might terminate the contract for default. The Agency stated that

any cure had to result in the supply of transparent armor manufactured using

recipe [ ], and had to address DLA’s ability to identify and segregate any

nonconforming parts that had already been sent to DLA. OSG responded with

a cure plan, proposing new delivery dates for shipment of the [ ] recipe.

The Agency was not satisfied with this cure plan because it did not address

OSG’s ability to obtain sufficient quantities of the recipe [ ] raw material

to fulfill the remaining deliveries required by the contracts, it did not propose

consideration for the delivery extensions, and because OSG failed to include

data on the [ ] transparent armor that had been previously delivered under

the contracts. The Agency requested that OSG fix these inadequacies by May

4, 2015. OSG subsequently provided the requested information within the

requisite time frame, and the parties began negotiating an appropriate

settlement. 

An affidavit of the Agency’s contracting officer, [ ], lists the

events that took place during the negotiation process, and details the settlement

eventually worked out by the parties. See Def.’s App. The affidavit notes a

number of the Agency’s concerns about whether or how to proceed with a

settlement. The Agency had outstanding orders from the military for the

windows, and a number of windows had already been delivered and accepted,

as some of the contracts were well into performance. Meanwhile, on June 4,

2015, the Army had approved the [ ] recipe through its SAR process, thus

indicating to the Agency that the recipe was technically acceptable. 

The Agency went ahead with modifications rather than complete

cancellations on June 24, 2015. The modifications required that all future

deliveries be in conformance with the original contract, meaning that OSG

would deliver the originally approved [ ] recipe, and required that OSG

make a cash payment and an in-kind payment to cover the government’s cost

in handling and processing nonconforming goods previously delivered.

Additionally, the modifications allowed OSG to extend its time for deliveryfor

5
all outstanding deliveries due under the contract in exchange for cash

consideration. All of the cash payments required of OSG totaled [ ], and

the value of the in-kind payments was [ ]. In accordance with the modified

contracts, final delivery has occurred with respect to some of the contracts, and

all remaining deliveries of the transparent armor are scheduled to occur by the

end of October 2015. 

DISCUSSION

Pursuant to the Tucker Act, this court has jurisdiction to “render

judgment on an action by an interested party objecting to a solicitation by a

Federal Agency for bids or proposals for a proposed contract or to a proposed

award . . . or any alleged violation of statute or regulation in connection with

a procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(1) (2012). 

Schott is an “interested party” because it is a prospective bidder “whose direct

economic interest would be affected by the award of the contract.” Am. Fed’n

of Gov’t Emps., ALF-CIO v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 

2001) (quoting 31 U.S.C. § 3551(2)(a) (2012)). 

This court’s review is limited to the existing administrative record

generated by the Agency in connection with the procurement action at issue.

See RCFC 52.1. We review the administrative record pursuant to the standards

set forth in section 706 of the Administrative Procedure Act (“APA”), 5 U.S.C.

§ 706(2)(A) (2012). Thus, we may set aside an Agency’s decision only if it is

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

with the law.” 5 U.S.C. § 706(2)(A) (2012). The protestor bears the burden of

establishing that the Agency’s decision lacked a rational basis or was

otherwise in violation of applicable law or regulation. See Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332

(Fed. Cir. 2001).Additionally, plaintiffmust show prejudice, meaning that had

it not been for the error in the procurement process, there is a reasonable

likelihood that the challenger would have been awarded the contract. Data

Gen. Corp. v Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996).

Plaintiff challenges two aspects ofthe procurement. Plaintiff’s primary

challenge is directed at the modifications to OSG’s contract after the Agency

discovered that OSG was delivering nonconforming windows. Plaintiff

contends that the modifications lacked a rational basis because the Agency

unreasonably accepted OSG’s contention of an alleged latent ambiguity in the

solicitation, allowing OSG to supply products that did not conform to the

required technical specifications. According to plaintiff, this decision violated 

6
the Competition in Contracting Act (“CICA”)6

in that it thwarted full and open

competition. Plaintiff’s second argument is that the initial award of the

contracts to OSG violated law and regulation because the Agency awarded the

contract to OSG despite its lack of a required facility clearance (“FCL”) to

supply the transparent armor. 

Plaintiff’s first argument, that the contract modifications lacked a

rational basis, rests on plaintiff’s belief that OSG never intended to supply a

conforming product under the contracts, and that DLA’s acceptance of

nonconforming products as part of themodifications effectivelyeliminated any

competition. In its reply brief it argues that the contract modification brought

the contracts outside the scope of the solicitation, and therefore, under CICA,

a new procurement was required in order to preserve the competitive bidding

process. See 10 U.S.C. § 2304 (a)(1)(A) (2011) (“[T]he head of an Agency in

conducting a procurement for property or services . . . shall obtain full and

open competition through the use of competitive procedures . . . .”); CCL, Inc.

v. United States, 39 Fed. Cl. 780, 791 (1997) (explaining that CICA’s

requirements “cannot be avoided by using the device of contract

modification”).

As support for its position that OSG never intended to supply

conforming products, plaintiff relies on an April 15, 2015 letter from OSG’s

President and CEO to DLA setting out an analysis of the misunderstanding

between the parties. See CT(DLA)-367-70. This letter suggests that after OSG

was approved as a source, it discovered some risks regarding the availability

of M-ATV raw materials, which would lead it unable to produce composition

[ ]. As a result, OSG began testing other compositions of the formula for

the transparent armor, and developed a different composition, [ ]. Plaintiff

does not accept the truth of OSG’s responses to the Army, and suggests that

OSG had always intended to supply composition [ ], in violation of the MATV Solicitations, which specified the correct NSNs and which explicitly

disallowed substitution. Schott argues that it was unreasonable and prejudicial

to it to allow OSG to rely on a supposed alleged latent ambiguity to deliver

substitute products because it was inconsistent with the terms of the original

solicitation and thus precluded Schott from competing.

Defendant recognizes in its response that there were serious errors with

OSG’s performance under the contracts, but maintains that these issues are not

6

10 U.S.C. § 2304 (a)(1)(A) (2011). 

7
the proper subject for a bid protest. It argues that Schott cannot rest a bid

protest on what amounts to a matter of post-award contract performance,

something beyond the reach of the court’s bid protest jurisdiction under 28

U.S.C. § 1491(b). Relying on the affidavit of DLA’s Contracting Officer,[

 ], defendant contends that the award to OSG cannot be faulted, because

it proposed to supply the exact product. It was only after the awards were

made and well after performance had commenced that the government became

aware that OSG was providing nonconforming products. 

Defendant also argues that Schott’s argument is factually unfounded,

in that the Agency rejected OSG’s interpretation of the contract. It never

knowinglyaccepted non-conforming product and merelydevised a solution for

a serious problem after it was discovered. Because a majority of the deliveries

had been accepted and paid for by the time DLA discovered that they were

nonconforming, the agency’s rights were governed by FAR 52.246-2(k) and

(l). This regulation stipulates that the government’s acceptance of an item

“shall be conclusive, except for latent defects, fraud, [or] gross mistakes

amounting to fraud.” FAR 52.246-2(k) (2014). The regulation further provides

that following non-conclusive acceptance, the government may elect to have

the awardee “repay such portion of the contract as is equitable under the

circumstances if the Contracting Officer elects not to require correction or

replacement,” FAR 52.246-2(l) (2014), which defendant contends is exactly

what the Agencydid. We agree with defendant. The agency never endorsed the

manner in which OSG proceeded with these contracts and instead devised a

practical solution to a problem of OSG’s making. Schott’s CICA rights, in

other words, were not compromised by anything the agency did. 

We note, moreover, that in exercising jurisdiction over a bid protest,

“the courts shall give due regard to the interests of national defense and

national security and the need for expeditious resolution of the action.” 28

U.S.C. § 1491(b)(3). The [ ] affidavit makes clear the agency’s concern

that the military not be delayed in getting armored windows for its vehicle for

use in a combat zone. Returning the parties to the position they were in prior

to contracting would require pulling the M-ATV fleet out of service until

replacement transparent armor windows could be obtained through a new

procurement. Id.

We do not mean to suggest that circumstances could not arise in which

a contract modification might depart materially from the contract’s original

scope so as to trigger this court’s bid protest jurisdiction. See, e.g., Glob.

8
Computer Enter.’s, Inc. v. United States, 88 Fed. Cl. 359, 452 (2009);

Cardinal Maint. Serv., Inc. v. United States, 63 Fed. Cl. 98, 108 (2004). In this

case, however, given the passage of time, the security concerns involved, and

the agency’s insistence on compensation for non-performance, we are

persuaded that concerns reflected in other cases are not triggered here. 

In a separate argument, plaintiff alleges that the initial awards to OSG

violated law and regulation because OSG did not have the facilities clearance

to access the classified performance specifications required to ensure ballistic

qualification during First Article Testing (“FAT”) and Production Control

Testing (“PCT”). Although nothing in the solicitations at bar makes reference

to the need for any security clearances, plaintiff puts together its argument by

drawing from general regulatory requirements (award can only be made to

bidders who are capable of performing the contract, FAR 9.103) and from

requirements associated with SAR approval. According to plaintiff, because

the ballistic protection level for the transparent armor is classified as SECRET,

plaintiffs should have had an FCL to access it during SAR approval. See DoD

5220.22-M, 2-100 (“[T]he contractor will not be afforded access to classified

information until the FCL has been granted.”). Plaintiff notes that nowhere in

the record is there an indication that the Agency confirmed that OSG held an

FCL.

Defendant does not dispute that OSG lacks an FCL, but contends that

an FCL was not required for award of this contract. Defendant’s position is

that these contracts were simply part-number buys for the supply of

previously-approved products. These parts were approved in 2011 to be

manufactured to composition [ ] after approval of OSG’s SAR. Moreover,

defendant contends that to the extent plaintiff asks the court to review OSG’s

access to classified material during the SAR process, such matters are

nonjusticiable and reserved to the executive. 

Because we do not construe plaintiff’s argument as requiring review of

a decision to award or deny access to classified information, we see no need

to entertain the government’s nonjusticiabilityargument. Defendant is correct,

however, that an FCL was not required for award of these contracts. Nowhere

in the record is there any indication that the M-ATV Solicitations required an

FCL. In fact, the Federal Acquisition Regulations require that in the event a

solicitation involves classified information, the contracting officer must

include a security requirements clause in the solicitation. FAR 4.403, 4.404,

52.204-2 (2014). There were none here. Plaintiff may be correct that

9
participation in the MRAP M-ATV programand becoming an approved source

through the SAR process required a facilities security clearance, but the award

of the parts contracts themselves do not,7so the issue is outside the bid protest

jurisdiction of this court. 

As for the parties’ remaining arguments, we do not find them relevant

to our decision. Defendant’s laches argument is unpersuasive. Laches serves

to bar a claim when plaintiff has delayed filing suit for an inexcusable amount

of time so as to result in prejudice to the defendant. Vita-Mix Corp. v. Basic

Holding, Inc., 581 F.3d 1317, 1333 (Fed. Cir. 2009). However, the record does

not show that plaintiff’s delayin filing this claimwas inexcusable. Plaintiff did

not sit on its rights; starting in January 2015 it was active in seeking

information from the Agency regarding OSG’s delivery of nonconforming

products, and was not given information adequate to support its claim until

well into 2015. See CT(TACOM)-1-35. Moreover, because we do not find

that the Agency’s decisions to award the contracts to OSG and to modify the

contracts were unreasonable or violated law or regulation, we do not need to

assess whether plaintiff was prejudiced, and need not consider the merits of

plaintiff’s claim for injunctive relief.

CONCLUSION

We conclude that the agency exercised reasonable judgment both in

awarding the contracts to OSG and in entering into contract modifications

upon its discovery of OSG’s delivery of nonconforming parts. We therefore

deny plaintiff’s motion for judgment on the administrative record and grant

defendant and intervenor’s cross-motions. The Clerk is directed to enter

judgment accordingly. No costs.

s/ Eric G. Bruggink 

ERIC G. BRUGGINK

Judge

7Although it would not have been available to the bidders, the source

acquisition plan explicitly states that security clearances are not required

under the solicitations. 

10