United States Court of Appeals for the Federal Circuit 

2009-5076 

SAVANTAGE FINANCIAL SERVICES, INC., 

 Plaintiff-Appellant, 

v. 

UNITED STATES, 

Defendant-Appellee. 

. 

Timothy Sullivan, Thompson Coburn, LLP, of Washington, DC, argued for 

plaintiff-appellant. 

A. Bondurant Eley, Attorney, Commercial Litigation Branch, Civil Division, United 

States Department of Justice, of Washington, DC, argued for defendant-appellee. With 

her on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, 

Director, and Bryant G. Snee, Deputy Director. 

Appealed from: United States Court of Federal Claims 

Senior Judge Bohdan A. Futey 
United States Court of Appeals for the Federal Circuit 

2009-5076 

SAVANTAGE FINANCIAL SERVICES, INC., 

Plaintiff-Appellant, 

v. 

UNITED STATES, 

Defendant-Appellee. 

Appeal from the United States Court of Federal Claims 

in 08-CV-021 and 09-CV-113, Senior Judge Bohdan A. Futey. 

 

__________________________ 

DECIDED: February 22, 2010 

__________________________ 

Before NEWMAN, BRYSON, and PROST, Circuit Judges. 

BRYSON, Circuit Judge. 

 In this pre-award bid protest case, Savantage Financial Services, Inc., 

challenges the terms of a request for proposals from the Department of Homeland 

Security (“DHS”). The request sought proposals to implement an agency-wide financial, 

acquisition, and asset management system. The request required proposers to offer a 

system that is integrated and currently fully operational within the federal government. 

Although the Court of Federal Claims had previously enjoined DHS from using an earlier 

solicitation, the court concluded that the requirements of the new solicitation were not 

unlawful. Savantage appeals, contending that the new solicitation, like the previous 
2009-5076 2 

one, unduly restricts competition, in violation of the Competition in Contracting Act 

(“CICA”), 10 U.S.C. § 2304(a)(1). 

I 

 DHS was established in 2003 through the merger of 22 federal agencies. As a 

result of the merger, DHS inherited five different financial management software 

systems and a number of different acquisition management and asset management 

systems. The use of different financial systems within the agency has caused logistical 

difficulties and has been the subject of criticism and concern from federal auditors and 

lawmakers. As a result, DHS has devoted considerable effort to obtaining an integrated 

financial, acquisition, and asset management system. 

In January 2004, DHS launched its first effort to integrate its financial systems 

through a project entitled Electronically Managing Enterprise Resources for Government 

Effectiveness and Efficiency (“eMerge2

”). The plan underlying the eMerge2 project was 

to purchase commercial off-the-shelf software products and to integrate them so as to 

facilitate communication among all the Department’s components. That project was a 

complete failure; in December 2005, after spending $52 million with no discernible 

results, the agency abandoned the eMerge2 program. 

 DHS initiated its second effort to integrate its financial systems in 2007, through 

the Transformation and Systems Consolidation (“TASC”) initiative. Its initial request for 

proposals contained a series of task orders proposing the “migration” of all DHS 

components to one of two integrated “shared software baselines” already in use within 

the agency: (1) the Oracle financial management system integrated with the 

Compusearch PRISM and Sunflower Assets systems, or (2) an integrated system from 
2009-5076 3 

Systems Applications Products (“SAP”). In response, Savantage filed a pre-award bid 

protest with the Court of Federal Claims in January 2008. In April 2008, the court ruled 

in favor of Savantage, concluding that DHS’s decision to require migration to the Oracle 

or SAP financial software systems constituted an improper sole-source procurement. 

See Savantage Fin. Servs., Inc. v. United States (“Savantage I”), 81 Fed. Cl. 300, 308 

(2008). The court enjoined DHS from proceeding with its solicitation until it had 

conducted a competitive procurement. Id. at 311. 

 Following the court’s ruling, DHS spent 10 months conducting market research 

regarding the integration and implementation of financial systems in an effort to develop 

a new solicitation. The result was a new request for proposals, issued on January 9, 

2009, and amended on February 14, 2009. The new request sought a financial, 

acquisition, and asset management system that “will be provided as an integrated 

solution that is currently fully operational in the Federal government.” The new TASC 

procurement was to be conducted as “a full and open competition” in two separate 

phases: (1) identification of viable offerors through submission of information to DHS; 

and (2) submission and demonstration of proposals by viable offerors. 

That process was halted following the receipt of the first phase submissions, 

when Savantage filed the present bid protest action with the Court of Federal Claims. 

Savantage argued that DHS’s requirements unduly restricted full and open competition, 

in violation of CICA, because the requirements effectively eliminated all solutions except 

for Oracle-based systems. Both parties moved for judgment on the administrative 

record. 
2009-5076 4 

In an April 2009 opinion, the trial court denied the protest, holding that Savantage 

“ha[d] not met its burden of demonstrating that the requirement of a fully integrated, 

currently operational system lacks a rational basis” and thus “defer[ring] to the agency’s 

discretion in determining its own needs.” Savantage Fin. Servs., Inc. v. United States

(“Savantage II”), 86 Fed. Cl. 700, 706 (2009). Savantage appealed to this court. 

 On appeal, Savantage argues that by requiring a system that is integrated and 

currently operational in the federal government, the new solicitation unduly restricts 

competition. Savantage contends that DHS’s attempts to justify those requirements are 

based on conclusory statements lacking factual support in the administrative record. 

Savantage further asserts that DHS’s requirements effectively guarantee that only the 

Oracle financial management product (coupled with the PRISM acquisition 

management and the Sunflower asset management products) will qualify for selection. 

According to Savantage, the requirements of the new solicitation are pretextual, 

disguising DHS’s efforts to favor Oracle—one of the solutions DHS was enjoined from 

selecting by specific designation in the prior solicitation. 

II 

 In a bid protest case, an agency’s action must be set aside if it is arbitrary, 

capricious, an abuse of discretion, or otherwise not in accordance with law. See

Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005); see also 28 

U.S.C. § 1491(b)(4); 5 U.S.C. § 706(2)(A). The court’s task is to determine whether “(1) 

the procurement official’s decision lacked a rational basis; or (2) the procurement 

procedure involved a violation of regulation or procedure.” Weeks Marine, Inc. v. United 

States, 575 F.3d 1352, 1358 (Fed. Cir. 2009). Savantage does not allege a procedural 
2009-5076 5 

violation, but argues that DHS’s restrictions on the solicitation lacked a rational basis 

and were therefore unlawful. 

Contracting officers “are entitled to exercise discretion upon a broad range of 

issues confronting them in the procurement process.” Impresa Construzioni Geom. 

Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). For that 

reason, procurement decisions “invoke[] ‘highly deferential’ rational basis review.” CHE 

Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed. Cir. 2008). Under that 

standard, we must sustain an agency action unless the action does not “evince[] rational 

reasoning and consideration of relevant factors.” Advanced Data Concepts, Inc. v. 

United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000). Upon review of the record in this 

case, we agree with the trial court that there is a rational basis for the three contested 

requirements of the new solicitation: (1) that the proposed financial, acquisition, and 

asset management system be “integrated”; (2) that it be “currently fully operational”; and 

(3) that it be “currently fully operational in the Federal government.” 

With respect to the requirement that the system be integrated, we agree with the 

trial court that it is “logical that [DHS] would want to ensure its success by seeking a 

fully integrated system, both on the basis of its own experiences and those of other 

agencies and departments.” Savantage II, 86 Fed. Cl. at 706. As the administrative 

record amply shows, the failure of DHS’s own eMerge2

 project—largely due to the 

contractors’ inability to provide functional integration among components—underscored 

the risks of building an entirely new system using separate, unintegrated, off-the-shelf 

components. Internal DHS documents indicate that the Department responded to that 

failure by rejecting a piecemeal approach and electing to acquire a core financial 
2009-5076 6 

system pre-integrated with other key systems. As we have held, an agency “has no 

obligation to point to past experiences substantiating its concerns in order to survive 

rational basis review . . . [as CICA does not require the agency] to supply a historical 

record of failures to substantiate a risk.” CHE Consulting, 552 F.3d at 1355. 

Nonetheless, DHS’s prior “fifty-two million-dollar failure at integration,” Savantage II, 86 

Fed. Cl. at 705, provides support for its decision to obtain a pre-integrated system. 

Savantage contends that there is no justification for DHS’s choice of a preintegrated solution, rather than implementing a core financial system first and then 

separately integrating and implementing feeder systems. Savantage points to evidence 

that building a fully integrated solution at the outset is more difficult than subsequently 

integrating feeder systems into a core financial system, and that a pre-integrated 

solution is thus more likely to fail. On a question such as whether to implement a preintegrated system or to build a system by beginning with a core financial system and 

then integrating other systems afterwards, an agency’s preferences are entitled to great 

weight. As the trial court noted, “competitors do not dictate an agency’s minimum 

needs, the agency does.” Savantage II, 86 Fed. Cl. at 706. And determining an 

agency’s minimum needs “is a matter within the broad discretion of agency officials . . . 

and is not for [the] court to second guess.” Wit Assocs., Inc. v. United States, 62 Fed. 

Cl. 657, 662 (2004). We agree with the trial court that Savantage has failed to meet its 

burden of showing that the agency’s decision to require a fully integrated system is so 

plainly unjustified as to lack a rational basis. 

 Similarly, DHS’s requirement that the financial management, asset, and 

acquisition system be currently fully operational cannot be considered unreasonable. 
2009-5076 7 

Having already failed to build an operational system from the ground up, DHS could 

reasonably prefer a system that is already operating successfully. Savantage’s 

contention that a pre-integrated system is difficult to implement supports DHS’s decision 

to require a system that has been shown to work. 

Savantage focuses principally on DHS’s final requirement, that the system be 

currently operational in the federal government. Savantage asserts that the 

administrative record is devoid of evidence connecting DHS’s needs to that requirement 

of the new solicitation. We disagree. 

Contrary to Savantage’s suggestion, DHS was not required to synthesize its 

thinking and its market research into a prelitigation written explanation of the rationale 

for each of the solicitation requirements. DHS’s rationale for its “in the federal 

government” requirement is apparent from, and supported by, the agency record. The 

$52 million loss resulting from the failed eMerge2

 program, which was discussed in June 

2007 testimony before a Senate Committee, prompted DHS to investigate ways to 

leverage its resources and those of other federal agencies to save money and avoid 

unnecessary duplication of efforts. See Meeting the Challenge: Are Missed 

Opportunities Costing Us Money?: Hearing Before the Subcomm. on Fed. Fin. Mgmt., 

Gov’t Info., Fed. Servs., and Int’l Sec. of the S. Comm. on Homeland Sec. & 

Governmental Affairs, 110th Cong. 27-39 (2007). The “process overview” of the new 

request for proposals explains the need to “leverage the tremendous investment that 

DHS and the Federal government have made” and to “utilize and reuse work already 

completed” within the federal government. DHS’s TASC documentation also expresses 

the agency’s intention to comply with Office of Management and Budget Circular A-130. 
2009-5076 8 

While Circular A-130 does not directly favoring the sharing of information systems, it 

expresses a preference for “satisfy[ing] new information needs through interagency or 

intergovernmental sharing of information . . . , where appropriate, before creating or 

collecting new information.” OMB, Circular No. A-130 § 8(a)(1)(d). 

 In addition, numerous DHS documents express the need for a system that 

complies with standards and requirements specific to the government and to DHS. For 

example, the solicitation’s statement of objectives explains that success in achieving 

DHS’s goals of producing timely, accurate, and useful financial information and ensuring 

the integrity of internal controls and clean audit reports “rests upon an integrated core 

financial management system that meets FSIO [Financial Systems Integration Office] 

and DHS-specific requirements,” and complies with statutory and regulatory standards. 

As DHS has explained, federal government accounting practices differ significantly from 

those of private commercial entities. Although Savantage asserts that the requirement 

of FSIO compliance alleviates any concerns regarding the viability of systems from 

outside the federal government, the FSIO requirement does not render irrational DHS’s 

insistence on a contractor with experience in successfully executing a task of a similar 

nature, context, and scope. 

Savantage argues that this case is similar to Redland Genstar, Inc. v. United 

States, 39 Fed. Cl. 220 (1997), in which the Court of Federal Claims held that changes 

to procurement requirements were unsupported by rationales belatedly offered by the 

Army Corps of Engineers. Unlike this case, Redland concerned an agency’s changes 

to its requirements (and attempted justifications) after the filing of a bid protest; the court 

nevertheless considered the late-proffered justifications, but concluded that those 
2009-5076 9 

justifications were unpersuasive. 39 Fed. Cl. at 232-34. Like bid protest cases 

generally, the decision in Redland is highly fact-specific. Whether an agency’s 

explanation for its bid proposal requirements is reasonable depends on the particular 

circumstances of each case; in this case, we find nothing unreasonable in the means 

DHS has devised to improve its likelihood of success in obtaining the agency-wide 

financial system that it has pursued, so far unsuccessfully, for more than six years. 

Finally, we find no support for Savantage’s argument that DHS’s requirements 

constitute a pretextual attempt to circumvent the trial court’s earlier injunction and 

procure an Oracle-based system. As an initial matter, government officials are 

presumed to act in good faith. See Alaska Airlines, Inc. v. Johnson, 8 F.3d 791, 795 

(Fed. Cir. 1993) (“[T]here is a presumption that public officers perform their duties 

correctly, fairly, in good faith, and in accordance with the law and governing regulations 

. . . . [T]his presumption stands unless there is irrefragable proof to the contrary.”). 

There is no evidence in the record to suggest that DHS acted with intent to injure 

Savantage or any other potential bidder. See Galen Med. Assocs., Inc. v. United 

States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (“In the cases where the court has 

considered allegations of [governmental] bad faith, the necessary ‘irrefragable proof’ 

has been equated with evidence of some specific intent to injure the plaintiff.”). 

 Savantage’s “pretext” argument rests on its contention that DHS’s new 

solicitation requires the use of the PRISM acquisition management system and the 

Sunflower asset management system, which are already used by several of DHS’s 

components. Although the solicitation does not require the use of the PRISM and 

Sunflower systems, Savantage argues that in light of the widespread current use of 
2009-5076 10 

those systems by DHS components, “it doesn’t take much analysis to deduce DHS’s 

unstated requirement that the integrated solution must include the PRISM and 

Sunflower systems.” Savantage further argues that, among the integrated systems 

currently in operation in the federal government, only Oracle is integrated with the 

PRISM and Sunflower systems. Accordingly, Savantage contends that the solicitation, 

although general in form, is designed to ensure that an Oracle-based system is 

selected. 

 Savantage’s argument that DHS is committed to an integrated system using 

PRISM and Sunflower components is speculative and lacks support in the record. The 

Frequently Asked Questions for the new solicitation explicitly states that “[o]fferors are 

free to propose any software and solutions, if appropriate to meet DHS’ requirements” 

and that “corporate experience is not limited to previous experience within DHS.” Other 

DHS documents contrast the new solicitation, which seeks a solution from either inside 

or outside DHS, with the previous solicitation, which limited solutions to those already in 

use within DHS. Finally, there is record support for DHS’s assertion that at least two 

systems other than Oracle are presently integrated and fully operational within the 

federal government. Therefore, we reject Savantage’s contention that DHS’s 

requirements constitute a pretextual cover for demanding an Oracle-based system. 

 Because we agree with the trial court that DHS has a rational basis for requiring 

an integrated financial, acquisition, and asset management system that is currently fully 

operational within the federal government, we uphold the judgment of the Court of 

Federal Claims. 

AFFIRMED.