# I n the United States Court of Federal Claims

No. 12-353C

(Filed Under Seal : October 29, 2012) (Reissued: November 6, 2012)

J.C.N. CONSTRUCTION, INC.,

Plaintiff,

v.

UNITED STATES,

Defendant. ) ) ) ) ) ) ) ) ) ) ) ) Post-award protest of a procurement award by the Postal Service of work to renovate the HVAC system in the principal post office in Portland, Maine; unequal treatment of offerors; evaluation of past performance; the covenant of good faith and fair dealing; prejudice; remedy

Robert J. Symon, Bradley Arant Boult Cumm ings LLP, Washington, D.C., for plaintiff. With him on the briefs was Aron C. Beezley, Bradley Arant Boult Cummings LLP, Washington,

D.C.

Courtney S. McNamara, Trial Attorney, Co mmercial Litigation Branch, Civil Division, United States Department of Jus tice, Washington, D.C., for defe ndant. With her on the briefs were Stuart F. Delery, Acting Assistant Attorn ey General, Jeanne E. Davidson, Director, and Todd M. Hughes, Deputy Director , Commercial Litigation Branc h, Civil Division, United States Department of Justi ce, Washington, D.C.

OPINION AND ORDER 1

LETTOW, Judge.

This post-award bid protest is before the court on plaintiff’s motion for judgment upon

the administrative record and the government’s cross-motion for judgment. Plaintiff, J.C.N. Construction, Inc. (“JCN”), contends that the Un ited States Postal Service (“Postal Service” or the “agency”) improperly evaluate d proposals in connection with th e award of a firm, fixed-price contract for replacement of the heating, ventilation, and air conditioning system (“HVAC system”) in the principal post office in Portland, Maine. See Mem. in Support of Pl.’s Mot. for

1 Because this opinion and order might have contained confidential or proprietary information within the meaning of Rule 26(c)(1)(G) of the Rules of the Court of Federal Claims (“RCFC”) and the protective order entered in this case, it was initially filed under seal. The parties were requested to revi ew this decision and to provide proposed redactions of any confidential or proprietary informati on. No redactions were requested.2 Permanent Injunctive Relief, Declaratory Reli ef and Judgment on the Admin. Record (“Pl.’s Mem.”) at 1-2. Specifically, JCN claims that the Postal Service treated offerors unfairly by allowing the chosen offeror, Paul J. Rogan Co., Inc. (“Rogan”), to have inside information concerning the scope and timing of work to be performed, misapplying the solicitation evaluation criteria, and providi ng an improper advantage to R ogan by breaching its implied duty to consider proposals fairly a nd honestly in an earlier solic itation for the same work. See id.

FACTS 2

A. The First Solicitation

In preparing to award a contract to replace th e HVAC system at the Postal Service’s main office in Portland, Maine, a 250,000-square-foot f acility, the agency fi rst solicited bids and proposals for the award on July 1, 2011. See AR 1-2. 3 That solicitation, No. 082530-11-A-0042 (“Solicitation I”), was issued by its Northeast Faci lities Service Office, located in Connecticut.

Id . Besides detailed design drawings, the solicita tion set forth a summary of the scope of work to be performed, including removal of asbestos and the replacement and maintenance of the post office’s HVAC system, AR 1-54, as well as a phasi ng schedule that suggested the order in which the work should be performed, AR 1- 699; see also AR 1-14 (stating that the offeror could suggest an “‘alternate’ proposal with a revised pe rformance time, shorter or longer” to the Postal Service). Proposals were due August 2, 2011, AR 1- 2, and the contract was to be awarded to “the firm providing the best value based on the combination of qualifications provided in the [firm’s required] Qualification Statement and th e contractor’s cost proposal.” AR 1-379. The Qualification Statement consisted of three parts: the contractor’s experience, as evidenced by its completion of at least two comparable projects within the previous fi ve years; its bonding capability; and its safety record. AR 1-379 to -83. The solicitation stated that “[o]ffers or modifications of offers received at the address sp ecified for the receipt of offers after the exact time specified for receipt of offers will not be considered unless determined to be in the best

interests of the Postal Service.” AR 1-12. 4

2 The recitations that follow constitute findings of fact by the court drawn from the administrative record of the procurement and the parties’ evidentiary submissions. See Bannum,

Inc. v. United States , 404 F.3d 1346, 1356 (Fed. Cir. 2005) (bid protest proceedings “provide for trial on a paper record, allowing f act-finding by the trial court”); Santiago v. United States , 75 Fed. Cl. 649, 653 (2007) (“In accord with RCFC 52.1, the court ‘is required to make factual findings . . . from the [administrative] record as if it were conducting a trial on the record.’”) (quoting Acevedo v. United States , 216 Fed. Appx. 977, 979 (Fed. Cir. 2007)).

3 “AR ____” refers to the administrative record filed with the court in accord with RCFC 52.1(a). The administrative record has been subdivide d into tabs. The first nu mber in a citation to

the administrative record refers to a particular tab, and the numb er after the hyphen refers to the particular page number of the administrative record, e.g., “AR 6-28.” The pages of the administrative record are paginated seque ntially without regard to the tabs.

4 “Postal Service contracts are not governed by the [Federal Acquisition Regulations set out in 48 C.F.R. Parts 1-99].” Tip Top Constr., Inc. v. Donahoe , 695 F.3d 1276, 1281 n.1 (Fed.3 JCN submitted its bid of $2,624,370 and other re quired materials, on August 2, 2011. AR 3-811. Rogan submitted its proposal, with a price of $2,683,488 on August 1, 2011. AR 2-758. On August 3, 2011, one day after the solicitati on had closed, Rogan, however, submitted via facsimile, a bid adjustment that lowered its price by $60,000 — to $2,623,488 — which was $882 less than JCN’s bid. AR 8-963 to -64. The Po stal Service thereafter awarded the contract (“Contract I”) to Rogan, ranking the firm’s proposal as the “bes t value” for the Service. AR 10- 985; see also AR 11-986.

JCN was notified of the award on Septembe r 9, 2011. AR 13-1007. Soon after, it began the process of disputing the awar d with the Northeast Facilities Service Office, orally and in writing. AR 15-1013; AR 18-1021 to -25. After receiving no ameliorating responses from the contracting officer at that o ffice, on October 7, 2011, JCN lodged an appeal with the Postal Service’s supplier disagreement resolution division in Washington, D.C. AR 20-1031 to -35. In the appeal, JCN alleged that Solicitation I wa s not conducted properly because (1) the agency inadequately “debriefed” JCN afte r the contract was awarded; (2) the “slight price discrepancy” of $882 between JCN’s and Rogan’s bids made it likely “that discussions between [the Postal Service] and Rogan [had] occurre d subsequent to proposal submi ssion;” (3) the Postal Service conducted an improper evaluation of JCN because it “did not consider all aspects of JCN’s technical proposal;” and (4) the Postal Service awarded Rogan the contract even though “JCN believe[d] that Rogan [could not] comply with th e requirement to directly perform 12% of the [c]ontract work.” AR 20-1033 to -34.

JCN’s appeal was sustained on October 19, 2011 by the Postal Service’s Supplier Disagreement Resolution Official Trent Ensley, who found that “the evaluation of offers does not appear to have been conducted in accordance with the terms of th e solicitation and does not appear to have been properly documented.” AR 25-1049. He ordered th e Northeast Facilities

Service Office to “conduct a new evaluation of all of the offers received in a manner that is consistent with the solicitation’s stated evaluation criteria to determine which offer presents the

best value to the Postal Service.” Id

.

The Postal Service reevaluated the proposals, see AR 26-1050 to -79, and again awarded the contract to Rogan. See AR 27-1080; see also AR 28-1081. JCN repeated the appeal process. This time, it alleged that (1) officials of the Postal Service had provided JCN’s bid price to Rogan, allowing Rogan to underbid JCN by a very slight amount, and (2) the Postal Service did not conduct a proper reevaluation of the proposal s. AR 36-1094 to -95. Mr. Ensley again suspended the contract on December 6, 2011, and as ked the Northeast Facilities Service Office to inform interested parties — “actual or pros pective offerors whose direct economic interests would be affected by the award of, or failure to award, the c ontract” — of JCN’s appeal, but cautioned “not [to] send a copy of the disagreement or any additional material to the interested parties.” AR 40-1120. That same day, the Postal Service issued to Rogan a notification of the

Cir. 2012) (citing In re Appeal of Kirkpatrick , PSBCA No. 3832, 96-2 B.C.A. (CCH) ¶ 28,599, 1996 WL 590751 (Oct. 11, 1996)). As a consequence, the Postal Service’s procurements are not subject to the more stringent timing rules for offers set out in 48 C.F.R. §§ 15.208(b)(1), 52.215- 1(c)(3)(ii)(A). See Geo-Seis Helicopters, Inc. v. United States , 77 Fed. Cl. 633, 640 & n.20 (2007) (applying the “late is late” rules of the FAR).4 suspension, providing a communication that made no mention of the details of JCN’s allegations. AR 41-1121. Three days later, Rogan sent a lett er to Mr. Ensley, commenting that the company “thought it might be appropriate at this time to explain [its] normal procedure for bidding local Postal Service projects that require the bid to be submitted [to the Northeast Facilities Service Office in Connecticut].” AR 42-1126. According to the letter, Rogan customarily provides the Postal Service with a bid package that includes “budget[ed] values,” but completes the final bid package “almost always after the bid time . . . [and ] then send[s] the face of the bid via fax to the Postal Service with the appropriate add or deduct, if needed, which represents [its] hard bid final price.” AR 42-1126 to -27. Rogan added that “[ t]he procedure is a one[-]sided exercise” in

which it “is not in contact with the Po stal Service in any way.” AR 42-1127.

On December 13, 2011, Mr. Ensley issued a de cision to terminate the first contract, finding that neither Rogan nor JCN submitted “i nformation establishing that they met the Minimum Company Performance Requirements,” thus raising “serious doubt s as to whether the

evaluation team conducted an effective evaluatio n, either in the initial evaluation or the

reevaluation.” AR 43-1130 to - 31. Mr. Ensley did not reach th e merits of “JCN’s allegation regarding the potential dissemination of its pricin g information before the initial award,” noting that “JCN presented only limite d, circumstantial evidence in suppor t of this allegation.” AR 43- 1131. He also commented that the Contracting Officer in the Postal Service’s Northeast Facilities Service Office “presented evidence[] whic h appeared to refute th e allegation . . . [and] the awardee’s response to JCN’s disagreement speci fically denied that the awardee had received any information regarding JCN’s pricing duri ng the purchasing process, and adequately explained the facts and circumstance s surrounding its price proposal.” Id

.

The Postal Service terminated Contract I, effective February 17, 2012. AR 50-1159. The two-month lapse between the termination decision and effective termination date allowed Rogan to perform work to close out the project and return the building to its normal state. See AR 50- 1160 to -63 (listing construction work that Rogan was to perform that had not been outlined in the original contract).

B. The Second Solicitation

The second solicitation, No. 072382-12-A-0004 (“Solicitation II”), was issued on February 13, 2012, by the Postal Service’s Wester n Facilities Constructi on Office located in Denver, Colorado, to which the procuremen t was transferred. AR 52-1166, AR 46-1137. Solicitation II again requested bids to replace and repair the HVAC system in the main Portland post office. AR 52-1243. A pre-proposal meetin g and “walk thru” was conducted at the site, which representatives from JCN and Rogan attende d. AR 54-1680 to -81. Both companies bid on Solicitation II. JCN’s bid was $2,328,780, while Rogan bid $2,133,000. AR 69-2021. The Postal Service awarded the second contract (“Co ntract II”) to Rogan on March 23, 2012. AR 74-

2046.1. The award took a somewhat unusual form. The agency did not actually award a new contract; rather, it modified th e existing contract to account for the “work completed prior to the December 2011 suspension, the work completed as a result of the previous Termination for

Convenience and the work associated with the new solicitation,” resultin g in an increase of $358,979.53, for a total contract price of $2,982,467.53. AR 74-2046.1.5 JCN filed an agency protest of the Solicitation II award with the Postal Service’s Western Facilities Construction Office on April 10, 2012, a lleging that the award was improper because (1) Rogan had not demonstrated that it met the requi site criteria, (2) Rogan was ineligible for the award until the allegations of JCN’s November 28, 2011 protest of Solicit ation I were properly adjudicated, and (3) Rogan had received an unf air advantage and pref erential treatment over

other offerors. AR 79-2063 to -64. The o ffice denied JCN’s protest on April 18, 2012. See AR 81-2084 to -87. JCN timely filed an appeal with the Postal Service’s Supplier Disagreement

Resolution division. See AR 83-2127 to -32. That appeal was denied by letter dated May 25,

2012. AR 91-2177 to -82. JCN filed suit in this court on June 4, 2012.

STANDARDS FOR DECISION

Pursuant to 28 U.S.C. § 1491(b)(4), the cour t reviews a challenge to an agency’s award of a contract using the standards set out in th e Administrative Procedure Act, 5 U.S.C. § 706.

See 28 U.S.C. § 1491(b)(4) (“In any action under this [S]ubsection, the cour ts shall review the agency’s decision pursuant to the standards set forth in [S] ection 706 of title 5.”). These standards permit the court to set aside an agen cy’s contracting decisi on if it is “arbitrary, capricious, an abuse of discretion, or otherw ise not in accordance with law,” 5 U.S.C. § 706(2)(A), assuming the criteria for equitable relief are satisfied, see PGBA, LLC v. United

States , 389 F.3d 1219, 1224-28 (Fed. Cir. 2004).

This standard of review requires that consid erable deference be given to the agency’s procurement decision. Advanced Data Concepts, Inc. v. United States , 216 F.3d 1054, 1058 (Fed. Cir. 2000). It “requires a reviewing court to sustain an agency action evincing rational reasoning and consideration of relevant factors.” Id. (citing Bowman Transp., Inc. v. ArkansasBest Freight Sys., Inc. , 419 U.S. 281, 285 (1974)). The cour t must especially defer to the agency’s technical evaluations, past performance ratings, and other “minutiae of the procurement process . . . which involve discretionary de terminations of procurement officials.” E.W. Bliss

Co. v. United States , 77 F.3d 445, 449 (Fed. Cir. 1996); see also Seaborn Health Care, Inc. v. United States, 101 Fed. Cl. 42, 48 (2011); Pitney Bowes Gov't Solutions, Inc. v. United States, 94 Fed.Cl. 1, 6–7 (2010).

The court may overturn an agency’s decisi on only “if ‘(1) the procurement official’s decision lacked a rational basis; or (2) the pr ocurement procedure invo lved a violation of regulation or procedure.’” Centech Grp., Inc. v. United States , 554 F.3d 1029, 1037 (Fed. Cir. 2009) (quoting Impresa Construzioni Geom. Dome nico Garufi v. United States , 238 F.3d 1324, 1332 (Fed. Cir. 2001)). To show that a government decision lacked a rati onal basis, a protester must show that the agency’s contracting officer “entirely failed to consider an important aspect of the problem, offered an explanation for its deci sion that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Keeton Corrs., Inc. v. United States , 59 Fed. Cl. 753, 755 (2004) (quoting Motor Vehicle Mfrs. Ass’n of the United States v. Stat e Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983)).

Moreover, to prevail in a bid protest, “a pr otester must show a si gnificant, prejudicial error in the procurement process.” Alfa Laval Separation, Inc. v. United States , 175 F.3d 1365,6 1367 (Fed Cir. 1999); see also Bannum , 404 F.3d at 1351 (“[I]f the trial court finds that the government’s conduct fails the APA review under 5 U.S.C. § 706(2)(A), then it proceeds to determine, as a factual matter, if the bid pr otester was prejudiced by that conduct.”). To “establish ‘significant prej udice’ [a protester] must show that there was a ‘substantial chance’ it

would have received the contract aw ard but for the [agency] errors.” Id . at 1353 (citing Information Tech. & Applica tions Corp. v. United States , 316 F.3d 1312, 1319 (Fed. Cir. 2003));

see also A lfa Laval Separation , 175 F. 3d at 1367; Data Gen. Corp. v. Johnson , 78 F.3d 1556, 1562 (Fed. Cir. 1996).

ANALYSIS

JCN’s arguments supporting its motion for j udgment on the administrative record fall under three main headings. The first two concer n only Solicitation II; th e third contention also relates back to Solicitation I. First, JCN claims that the Postal Service gave Rogan preferential treatment because Rogan, as the incumbent cont ractor under Solicitati on I, knew that certain details regarding the scope of work and the pha sing requirements set out in Solicitation II were

inaccurate and overstated the work to be performed under Solicitation II. Pl.’s Mem. at 15-19. In addition, JCN argues that the Postal Service told Rogan it w ould modify the first contract instead of creating a new one, allowing Rogan to delete insurance and bonding costs from its Solicitation II bid price and thus underbid JCN. Hr’g Tr. 11:1-14:11 (Sept. 20, 2012); 5 see also Hr’g Tr. 51:23-52:15. Second, JCN contends that th e Postal Service erred in finding that Rogan possessed the requisite experience to meet Solicita tion II’s evaluation criteria. Pl.’s Mem. at 19- 21. Third, JCN asserts that the Postal Service bre ached its implied duty to consider the proposals fairly and honestly because the Postal Service a llowed Rogan to enter a late modification to its bid price for Solicitation I, enabling the company to use a “curious late modification” to underbid JCN by $882, and consequently gain an advantage that carried over into Solicitation II. Pl.’s

Mem. at 21-26.

The government has filed a cross-motion fo r judgment on the administrative record, contending “that the [Postal Serv ice] acted properly in making th e award and JCN has failed to establish that the [Postal Service] acted arbitrar ily, capriciously[,] or otherwise in violation of any applicable law or regulation in making the award.” Def.’s Cross-Mot. for Judgment on the Admin. Record and Opp’n to Pl.’s Mot. for Perm anent Injunctive Relief, Declaratory Relief, and Judgment on the Admin. Record (“Def.’s Cross-Mot.”) at 1.

A. Unequal Treatment

At the core of this case are the Postal Serv ice’s actions with resp ect to Solicitation II — both its preparation of the terms of the solicitation and its conf ormation of Contract I after it awarded the project to Rogan for the second time . JCN argues that the Postal Service omitted important details regarding the scope of work a nd the phasing requirements in Solicitation II, and that Rogan, as the incumbent contractor, knew of those inaccuracies and used that knowledge unfairly to submit a lower bid. Pl.’s Mem. at 16-17. In addition, JCN argues that the Postal

5 All subsequent references to the transcri pt of the hearing co nducted on September 20, 2012, will omit the hearing date.7 Service’s decision to modify Contract I, inst ead of creating a new c ontract after Rogan was awarded Solicitation II, allowed Rogan to delete insurance and bonding costs from its Solicitation II bid price and underb id JCN. Hr’g Tr. 11:1-14:11 see also Hr’g Tr. 51:23-52:15. In response, the government contends that JCN waived its unequal-information claims because it failed to object to the terms of Solicitation II prior to the close of bidding. Def.’s Cross-Mot. at 16-21. Alternatively, it argues that JCN’s claims fail because the company did not substantiate “bad faith” or provide “hard f acts” that would establish Roga n’s unequal access to information.

Def.’s Cross-Mot. at 21-27.

JCN’s claim that Rogan was afforded an unequal bidding advantage can be broken into three aspects in which Rogan may have had supe rior information that allowed it to lower its proposal price for Solicitation II. First, JCN asserts that work perf ormed by Rogan before

Contract I’s termination on Febr uary 17, 2012 was included in the scope of work of Solicitation II. Pl.’s Mem. at 16-17. Speci fically, JCN points to an invoic e from Rogan that lists the following categories in which Rogan had completed work on or before January 31, 2012: chilled water piping; temperature control system; register s, grills, and diffusers; and ductwork. AR 53-

1642. JCN contends that these we re “items of work that [wer e] required by th e contract under Solicitation [II],” Hr’g Tr. 15:1- 3, and that it “appear[s] from [the record] that this work was performed” under Solicitation I. Hr’g Tr. 17:7-8. In this respect also, both parties agree that

Solicitation II included asbestos abatement work that had been performed under Solicitation I.

See Pl.’s Mem. at 17; Def.’s Cross-Mot. at 24 ; AR 81-2085 to -86 (Letter from Martin Petrey, Contracting Officer, Postal Se rvice, to Steve Bennett, JC N (April 18, 2012) (denying JCN’s agency protest but noting that “approximately 80 pe rcent of the asbestos shown in the scope of work [for Solicitation II] has, in fact, already been ab ated”)). Secondly, JCN asserts that the Postal Service permitted Rogan to use a “relaxed phasing schedule,” Pl.’s Mem. at 17, but that Solicitation II “said [the work] was phased, th at you had to do work [in one area] and you couldn’t go to the next location un til you finished that work.” Hr’g Tr. 21:19-22. According to JCN, this allowed Rogan to “save general condi tions costs” such as supplemental heating or cooling, which therefore did not have to be included in Rogan’s So licitation II proposal. See Hr’g Tr. 22:7-8. Thirdly, JCN asserts that Rogan did not have to include the costs of insurance, bonding, and sub-bonding in its bid for Solicitation II because the government modified Contract I to include Solicitation II’s scope of work rather than awarding a new contract. See Hr’g Tr. 13:21-14:6; AR 74-2046.1. As evidence that Rogan knew it need not factor in new bonding and insurance costs, JCN points to an e-mail dated March 23, 2012, from the Postal Service’s Contracting Officer to Rogan, which states, “ As previously discussed , because your firm held the

first contract related to this project, and in order to address some internal [Postal Service] accounting issues, the determination has been made that we will modify your existing contract . . . and not issue a new contract number.” AR 74-2046.1 (emphasis added); see also Hr’g Tr.

52:8-15.

1. Waiver.

The government contends JCN waived its claim associated with inaccuracies in

Solicitation II because it did not identify and raise these inaccuraci es with the Postal Service before the close of bidding. Def.’s Cross-Mot. at 16. The government argues that Solicitation II “patently did not contain specific information about all the work that was previously performed8 by Rogan.” Id . at 19. The government also asserts th at JCN specifically waived its claimregarding the inaccurate scope of work for asbestos abatement because JCN attended a preproposal meeting and “asked no que stions about the asbestos requi rement and raised no issue with respect to the disparity between th e site conditions and the solicitation.” Id . at 20-21. JCN responds that it was diligent in addressing the scope of work in Solicitation II, having submitted clarification requests to the Po stal Service prior to submitting a proposal in response to that solicitation. See Pl.’s Reply Brie f in Support of its Mot. for Judgment on the Admin. Record and Opp’n to Def.’s Cross-Mot. for Judgment on th e Admin. Record (“Pl.’s Reply”) at 8 n.6. Correlatively, JCN indicates that it examined the dr awings that were part of the solicitation and participated in the walk-through prior to maki ng its proposal. Hr’g Tr. 52:23 to 53:8. JCN argues that “the fact that 120 f eet of chilled water pipe may be installed somewhere and already covered, there would have been no way to tell that that work wa s done.” Hr’g Tr. 53:8-11.

In addressing whether Solicitation II contained inaccuracies that were patent or latent, this court applies standard rule s of contract interpretation. See Banknote Corp. of Am., Inc. v.

United States , 365 F.3d 1345, 1353 n.4 (Fed. Cir. 2004); Guzar Mirbachakot Transp. v. United

States , 104 Fed. Cl. 53, 64 (2012). “When a contract is susceptible to more than one reasonable interpretation, it contains an ambiguity.” Metric Constructors, Inc. v. National Aeronautics & Space Admin. , 169 F.3d 747, 751 (Fed. Cir. 1999). If the court determines that an ambiguity exists, it must then determine whether the ambiguity is patent or latent. Id.

A latent ambiguity “ is not apparent on the face of the so licitation and is not discoverable through reasonable or customary care.” Guzar Mirbachakot Transp. , 104 Fed. Cl. at 65. A patent ambiguity is “present wh en the contract contains facial ly inconsistent provisions that would place a reasonable contractor on notice and prompt the contractor to rectify the inconsistency by inquiring of the appropriate parties.” Stratos Mobile Networks USA, LLC v.

United States , 213 F.3d 1375, 1381 (Fed. Cir. 2000). Subtle inconsistencies do not put a reasonable contractor on notice; ra ther, a patent ambiguity is one that is “‘obvious, gross, [or] glaring.’” Grumman Data Sys. Corp. v. Dalton , 88 F.3d 990, 997 (Fed. Cir. 1996) (alteration in original) (quoting H & M Moving, Inc. v. United States , 204 Ct. Cl. 696, 716 (1974); see also Guzar Mirbachakot Transp. , 104 Fed. Cl. at 65. If the ambi guity is patent, a “government contractor has ‘a duty to seek clarification from the governme nt, and its failure to do so precludes acceptance of its interpretation.’” Blue & Gold Fleet, L.P. v. United States , 492 F.3d 1308, 1313 (Fed. Cir. 2007) (quoting Stratos Mobile Networks , 213 F.3d at 1381). In other words, “a party who has the opportu nity to object to the term s of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest.” Id.

In this instance, the government’s waiver argum ent is without merit. Before the close of Solicitation II, JCN did not have access to any of the documents indicating specific work Rogan had performed work under Contract I. See Hr’g Tr. 25:16-26:17. Solic itation II did not contain any obvious discrepancies or ambiguities regarding the work to be performed. Contrary to the government’s suggestion, Blue & Gold does not require offerors to second guess the plain language of a solicitation and inquire about the veracity or accuracy of every assertion set out in

a solicitation.9 Regarding phasing, the government nonetheless argues that a patent ambiguity does exist

in the text of Solicitation II. Def.’s Cross-Mo t. at 18-19. In support of this position, it points to

several sections of text within Solicitation II. First, the solic itation says that “[c]ontractors may also submit an ‘alternate’ proposal with a revi sed performance time, shorter or longer, with associated costs. The [Postal Service] may ne gotiate changes to any a lternate proposals and may accept if determined to be in th e best interest of the Postal Service or reject.” AR 52-1178. Second, the summary of work states that “[t]he Contractor shall phase an d coordinate his work with the [Postal Service] to minimize the disrup tion to the facility’s normal operation.” AR 52- 1268. Third, the summary states “[t]here will be no work [performed] at the facility between the dates of November 15 and January 5.” Id . The government argues th at this language patently conflicts with the phasing plan set forth in the So licitation II drawings that is split into six-week increments, a strict reading of which would require work to continue until November 24. Def.’s

Cross-Mot. at 19.

Again, the administrative record negates th e government’s contention that a patent ambiguity existed in Solicitation II. The incons istencies in describing the phasing requirements are not gross, glaring, or obvious, such that a reasonable offeror would identify them and inquire about the inconsistency. The only actual conflict to which th e government points concerns the

work schedule that runs into the third week of November 2012, and the provision that prohibits work from November 15 to January 5. Howe ver, the schedule itself does not mention November. Determining that the plan would require work through November 24 requires a

contractor to infer dates that ar e not apparent on the face of the so licitation. The resulting latent ambiguity did not require JCN to raise it before th e close of Solicitation II. There is no waiver.

2. Unequal treatment because of inaccuracies in the terms of Solicitation II and the modification of Contract I.

At the core of this case is the question wh ether the inaccuracies regarding the scope of work and the phasing requirements, along with th e modification of Cont ract I that allowed Rogan to use its previous bonding and insuranc e payments, amounted to unequal treatment of offerors that was arbitrary, capricious , or an abuse of discretion.

It is well-established that a “contracting agen cy must treat all offe rors equally, evaluating proposals evenhandedly against common requi rements and evaluation criteria.” Banknote Corp. of Am., Inc. v. United States , 56 Fed. Cl. 377, 383 (2003), aff’d , 365 F.3d 1345 (Fed. Cir. 2004); see also Afghan Am. Army Servs. Corp. v. United States , __ Fed. Cl. __, __, 2012 WL 4857802, at *17 (Fed. Cl. Oct. 15, 2012). “[U]neven treatment goes against the standa rd of equality and fair-play that is a necessary underpinning of th e federal government’s procurement process and

amounts to an abuse of th e agency’s discretion.” PGBA, LLC v. United States , 60 Fed. Cl. 196, 207 (2004), aff’d , 389 F.3d 1219 (Fed. Cir. 2004); see also Gentex Corp. v. United States , 58 Fed. Cl. 634, 653 (2003) (“The lack of clarity in the RFP, the disc ussions which suggested that Scott, but not Gentex, consider a CAIV tradeoff in connection with batterie s, and the Air Force's failure to correct Gentex's differing understa nding of the evaluati on scheme of the RFP combined to render this procurement unfair.”); TLT Constr. Corp. v. United States , 50 Fed. Cl.10 212, 216 (2001) (“A fundamental principle of governme nt procurement is that [the agency] treat
all offerors equally and consisten tly apply the evaluation factors li sted in the solicitation.”).

A lack of clarity in Solicita tion II about the scope of wo rk engendered such “uneven treatment” here. Solicitation II was markedly imprecise about the scope of work left to be performed. It appeared to reflect only small cha nges in the scope of work from Solicitation I.

Neither the statement of work nor the attend ant drawings disclosed the work previously performed by Rogan on chilled water piping; the temperature control system; registers, grills, and diffusers; and ductwork. Solicitation II also contained an error re garding the scope of asbestos abatement; in fact, as the Postal Service concluded, eighty percent of the work mentioned in the solicitation had already been completed by Rogan. Rogan, as the Contract I awardee, had specific and accurate information about the actual scope of work that needed to be performed under Solicitation II and could craft a bid that omitted the cost of extraneous work. Thus, the scope of work of Solic itation II contained inaccuracies that caused the Postal Service to treat the bids of Rogan and the other offerors unequally, an abuse of th e agency’s discretion.

Respecting the insurance and bonding costs, an e-mail in the record alludes to prior discussions between the agency and Rogan about a modification of Contract I to include

Solicitation II’s work. That e-mail was sent mo re than two weeks after the Postal Service decided to award Solicitation II to Rogan and mo re than three weeks after Rogan submitted its

bid. See AR 74-2046.1 (E-mail from Petrey to Rogan). Thus, the e-mail, without more, does not conclusively show that the Postal Service inform ed Rogan about the possibility of modifying the earlier contract before Rogan submitted its offer in response to Solicitation II. Nonetheless, although Rogan provided insuranc e and bonding under Contract I, it was reimbursed by the government for most of the insurance and bonding costs via the first payment application under that contract. Hr’g Tr. 12:11 to 13:7. When the contact was not terminated, but rather modified by the second award to Rogan, Rogan was not requi red to give a credit as it would have under a termination for convenience of Contract I. Hr’g Tr. 13:13 to 14:11. As a result, Rogan retained a benefit under Contract I that gave it a price advantage in bidding for Solicitation II.

Regarding the phasing requirements, however, th e evidence to which JCN points to show uneven treatment is simply too sc ant to support JCN’s claim. Noth ing in the record demonstrates that the Postal Service knew its language concerning the phasing plan was ambiguous, and the Postal Service had no reason to question JCN’ s submittal of a proposal that followed the suggested phasing schedule.

B. Past Performance

JCN’s second claim is that the agency erre d in finding that Rogan’ s past experience met the requirements set forth in Solicitation II, because Rogan submitted projects smaller in size than the Postal Services’s project for a 250,000- square-foot facility. Pl.’s Mem. at 20. Solicitation II asked companies to submit record s of “[c]ompletion of a minimum of two (2) comparable projects within the past five (5) y ears . . . [which are of] similar size, cost, type[,] and complexity” as the HVAC system project. AR 52-1243. JCN conte nds that by accepting11 Rogan’s submissions, the agency “misevaluated R ogan’s experience.” Pl.’s Mem. at 20. The government counters that “JCN’s argument amounts to nothing mo re than a disagreement with the agency’s determination of what constitutes a relevant project for the purposes of evaluation [of] past performance.” Def.’s Cross-Mot. at 29.

JCN’s challenge to the Postal Service’s ev aluation of past performance focuses on the fact that it submitted past performance information on projects that were all larger than any of the completed projects submitted by Rogan. Th is claim nonetheless is a difficult one to establish. An agency’s technical rankings and other “minutiae of the procurement process . . . involve discretionary determinations of procurem ent officials that a court will not second guess.”

E.W. Bliss Co. , 77 F.3d at 449. Moreover, a challenger to an agency’s determination of what constitutes comparable past experience “fights an uphill battle against the well-established principle that ‘what does or does not constitute “relevant” past performance falls within the [source selection authority]’s considered discretion.’” Vanguard Recovery Assistance v. United

States , 101 Fed. Cl. 765, 785 (2011) (alter ation in original) (quoting PlanetSpace, Inc. v. United

States , 92 Fed. Cl. 520, 539 (2010)). Challengers “must do more than point out mere ‘mistakes’ or ‘missteps;’ they must ‘show that the claimed misstep was so excessive as to fall outside the

decision-maker’s ambit of discretion.’” Antarctic Support Assocs. v. United States , 46 Fed. Cl. 145, 155 (2000) (quoting Cubic Def. Sys., Inc., v. United States , 45 Fed. Cl. 450, 457–58 (1999)).

The Postal Service had wide latitude to determine what types of projects it deemed comparable to the HVAC systems project. It aw arded points, up to 30 for each project, based on the project’s location, size, completion date, build ing type, contract type , the difference between the original and final price of the contract, the original and final contract duration, and any

awards received. See

, e.g. , AR 66-1928. It then took each of feror’s two highest scores and totaled them, meaning 60 points was the highest sc ore an offeror could obtain for the Service’s evaluation of past performance. See AR 66-1930. Four evaluators scored the submissions. See generally AR 65-1893 to 68-2020. JCN and Rogan scored 57 and 58 points, respectively. AR 66-1930; AR 66-1938.

A review of the record demonstrates that JCN submitted six projects, five of which were 100,000 square feet or larger in size, and one of which tota led 60,000 square feet. AR 66-1927 to -30. Three projects received awards, such as achievement of Leadership in Energy and Environmental Design (“LEED”) “Gold” or “Silver” Status. Id. Rogan also submitted six projects, all of which were smaller. Five of Rogan’s projects ranged from 36,000 to 53,800 square feet, with the sixth tota ling 10,000 square feet. AR 66-1935 to -38. For two of those projects, the building’s owner awarded a “100%” rating. Id. The evaluators varied in their generosity in awarding points to each company, but each ranked JCN and R ogan within at least two points of the other. 6

If this court had evaluated the offerors’ pa st experience, it would have graded them differently; however, the “role of the court is ‘not to substitute its judgment for that of the

6 For example, one evaluator awarded 57 point s to JCN and 58 points to Rogan. AR 66- 1930; AR 66-1938. Another awarded 59 points to JCN and 57 to Rogan. AR 68-2010; AR 68-

2018.12 agency,’ but rather to determine whether the agency had a rational ba sis for its decision.” Vanguard Recovery Assistance , 101 Fed. Cl. at 785 (citing Alabama Aircraft Indus., Inc.- Birmingham v. United States , 586 F. 3d 1372, 1376 (Fed. Cir. 2009)). It was rational for four separate evaluators, all e xperienced in their field, to conclude in an instance where neither of the offerors had completed a project in a building as large as the 250,000-square-foot post office, that differences in the square footages of the projects submitted did not greatly detract from the ability of either offeror to perform the solici ted work. The court will not second guess these decisions, and cannot say that the Postal Service’s eval uation of past performance was arbitrary and capricious.

C. The Aftereffects of the Postal Service’s Acceptance of Rogan’s Late Bid Modification Under Solicitation I

Finally, JCN claims that the Postal Service did not eradicate its breach of the implied duty to consider offerors’ proposals fairly and hone stly in response to Solicitation I. JCN avers that the Postal Service had improperly disclose d JCN’s bid price to Rogan, allowing Rogan to decrease its bid price by $60,000 to just $882 be low JCN’s price, and accepted this late modification of price even though it was made one day after the proposal submission deadline. Pl.’s Mem. at 23-24. In turn, “[this] improper award of Contract I to Rogan gave Rogan an unfair competitive advantage when it came to bidding on Solicitation II because Rogan’s performance under Contract I gave it accurate information about the de-scoped work that was not reflected in Solicitation II and the [Posta l Service’s] relaxed phasing schedule.” Id . The government contends that, as a legal matter, th e court does not possess ju risdiction to consider any claims that it breached an implied duty. Def. ’s Cross-Mot. at 30-32. Alternately, if the court has jurisdiction, the government argues that (1) JC N has waived the claim because it should have been raised prior to the close of bidding on the second solicitation, a nd (2) JCN has failed to demonstrate any events connected to Solicitation I caused it to suffer prejudi ce in the Solicitation II process. Id . at 33-34.

1. Ability to consider a claim for breach of an implied duty of good faith and fair dealing in a bid protest.

The government argues that the “implied-in-fact contract of fair a nd honest consideration under 28 U.S.C. § 1491(a) did not survive the pass age of the Administrative Dispute Resolution Act ([‘]ADRA[’]) for cases in which Section 1491(b) jurisdiction exists.” Def.’s Cross-Mot. at 30. To support this contention, the government relies upon the Federal Circuit’s decision in Resource Conservation Group, LLC v. United States , 597 F.3d. 1238 (Fed. Cir. 2010), which held that this court’s implied-in-fact jurisdiction over non -procurement bid protest cases survived

the enactment of the ADRA in 1996.

As the government itself recognizes, its conten tion directly conflicts with this court’s

decision in Castle-Rose, Inc. v. United States , 99 Fed. Cl. 517, 531 (2011), which held that a protester can bring a claim for vi olation of the implied covenant of good faith and fair dealing in a bid protest being heard under 28 U.S.C. § 1491(b). See Def.’s Cross-Mot. at 31, n.7. As the

court reasoned in Castle-Rose

,13 Resource Conservation indeed stated, “Congre ss intended the [Section] 1491(b)(1) jurisdiction to be exclusive where [Section] 1491(b)(1) provided a remedy (in procurement cases).” The court in terprets this language to state that a protester can bring a claim for violation of the implied covenant of good faith and fair dealing; the jurisdiction for brin ging the claim arises under Section 1491(b), not Section 1491(a). Accordingly, [prote ster] has stated a viable claim.

Castle-Rose, Inc., 99 Fed. Cl. at 531 (citations omitted). A recent decision by the Federal Circuit supports this rationale. See Systems Application & T echs., Inc. v. United States , 691 F.3d 1374 (Fed. Cir. 2012). In Systems Application , the court of appeals cite d approvingly its earlier

decision in United States v. John C. Grimberg Co. , 702 F.3d 1362, 1367 (Fed. Cir. 1983) (en banc), for the proposition that “there is an imp lied contract that the procurement process will be conducted fairly and honestly.” Systems Application , 691 F.3d at 1382-83; see also Southfork Sys., Inc. v. United States , 141 F.3d 1124, 1132 (Fed. Cir. 1998) (a post-ADRA case, referring to an unsuccessful bidder’s reliance on “the implied-in-f act contract to consider all bids fairly and honestly”) (citing Keco Indus., Inc. v. United States , 492 F.2d 1200, 1203 (Ct. Cl. 1974)). The court accordingly finds no reason to abandon its interpretation of Resource Conservation

. Protesters may bring claims for breach of an im plied covenant of fair and honest consideration, and the court has jurisdiction to hear such claims under 28 U.S.C. § 1491(b). Thus, JCN has stated a jurisdictionally appropriate claim.

2. Waiver.

The government cites a single case to support its proposition that JCN has waived its claim, arguing that “by holding its fire until afte r the contract was awarded to its competitor, [plaintiff] waived its opportunity to raise issu es concerning [the incumbent awardee’s] prior performance of the enjoined contract. Def.’s Cross-Mot. at 33 (quoting CRAssociates, Inc. v.

United States , 102 Fed. Cl. 698, 713 (2011)). The government has disingenuously taken this quote out of context. CRAssociates concerned an offeror who failed to raise “objections to the

terms of a solicitation.” 102 Fed. Cl. at 712. In th at case, an offeror had asked the government agency to amend its solicitation to address two concerns arising from another offeror’s prior performance of an en joined contract. Id. When the government ignored the offeror’s concerns, the offeror took no action, “acting only after the second contract was awarded to [a competing company].” Id. The court held that the offeror could not argue “after the award . . . that the agency erred in failing to amend the [solicitation] to deal with the concerns” because it “failed to assert [problems with the solicitation], via protest, prior to the award.” Id.

Unlike the offeror in CRAssociates , who had specific concerns about the terms of a second solicitation, JCN’s claim that the Postal Se rvice breached its duty to consider offerors’ proposals fairly and honestly does not relate to patently inaccu rate terms of Solicitation II. Rather, JCN argues that the agency’s actions in connection with Solicitation I gave Rogan the ability to look past mistakes in Solicitation II and craft a proper bid — mistakes that were not apparent on the face of Solicitati on II, giving JCN no reason to request amendments. The court

concurs that there was no reason for JCN to rais e the issue before the aw ard of Solicitation II. Consequently, the governme nt’s argument based on CRAssociates is not well founded, and JCN

has not waived its claim.14 3 . The earlier acceptance by the Postal Serv ice of a bid modification after the published proposal submission due date.

“The ultimate standard for determining wh ether an unsuccessful bidder is entitled to relief on the ground that the government breached the implied-in-fact cont ract to consider all bids fairly and honestly is whether the govern ment's conduct was arbitrary and capricious.” Southfork Systems , 141 F.3d at 1132 (citing Keco Indus. , 492 F.2d at 1203). Four additional factors are “generally relevant to the determin ation of whether the government has breached its duty[, including] . . . (1) subj ective bad faith on the part of the government; (2 ) absence of a

reasonable basis for the administ rative decision; (3) the amount of discretion afforded to the procurement officials by applicable statutes and re gulation; and (4) proven vi olations of pertinent statutes or regulations.” Id. However, “there is no requirement or implication in Keco Industries

that each of the factors must be present in order to establish ar bitrary and caprici ous action by the government.” Prineville Sawmill Co., Inc. v. United States , 859 F.2d 905, 911 (Fed. Cir. 1988).

It is undisputed that the Po stal Service allowed Rogan to lower its proposed price for Solicitation I one day after bidding closed. AR 8-963 to -64. The record shows that Rogan originally submitted a proposed price of $2,683,488 on August 1, 2011, AR 2-758, but the Postal Service accepted a modification of that bi d (a price decrease of $60,000) on August 3, 2011, after the close of bidding. See AR 8-963 to -64. The acceptance of the late modification allowed Rogan to underbid JCN by a mere $882. Compare AR 3-811 with AR 8-963 to -64.

Furthermore, Solicitation I stated that “[o]ffe rs or modifications of offers received at the address specified for the receipt of offers after the exact time specified for receipt of offers will

not be considered unless determined to be in the best interests of the Post al Service.” AR 1-12. The Postal Service explained that it “will accept adjustments in price proposals via fax or e[- ]mail” if it is in its best interest to do so, and that for Solicitation I, it accepted two “faxed adjustments, which [were] placed in a folder w ith submitted sealed proposals.” AR 36-1097.

JCN contends that the Postal Service enga ged in an “apparent improper disclosure of JCN’s pricing information to Rogan[,] . . . secur[ ed] Rogan’s award of the initial contract[, . . . and] gave Rogan an unfair competitive advantag e when it came to bidding on Solicitation II.” Pl.’s Mem. at 24. While the timing of Rogan’s late submission and the proximity of its modified bid to JCN’s price certainly raises very s ubstantial questions, JCN’ s concerns about the procurement process were at least in part overtaken by the Postal Service’s subsequent suspension and initial cancellation of Contract I, coupled with tran sfer of the management of the procurement to its Colorado office. That th e decision to terminate Contract I and issue Solicitation II was purportedly ma de to rectify imprope r evaluation of offerors’ past experience does not change the analysis. The Postal Service’ s issuance of a new solicitation and its transfer of the solicitation evaluation pro cess to a different office offere d the prospect of curing any unfair behavior on the part of Postal Service officials and R ogan or dishonest evaluation of offerors that may have occurred during Solicitation I.15 D. Prejudice and Relief

The Postal Service’s overstatement of th e scope of work in Solicitation II and inappropriate handling of insurance and bonding costs amounted to arbitrary and capricious

conduct on behalf of the Postal Se rvice. This finding does not end the inquiry, however. “Not every error by a [contracting officer] justifies overturning an award.” CRAssociates, Inc. v.

United States , 95 Fed. Cl. 357, 389 (2010) (alteration in original) (quoting United Int'l Investigative Servs., Inc. v. United States , 42 Fed. Cl. 73, 87 (1998), aff'd , 194 F.3d 1335 (Fed. Cir. 1999)). Rather, “[t]o prevail in a bid pr otest, a disappointed offeror must show both significant error in the procurem ent process and prejudice to it s posture in the process.” PGBA,

LLC v. United States , 60 Fed. Cl. at 203 (citing Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057). To establish prejudice, “a protes ter must show that there was a ‘substantial

chance’ it would have received the contra ct award absent the alleged error.” Banknote , 365 F.3d

at 1351.

The question, then, is whether JCN has shown th at it had a substant ial chance of winning

Solicitation II but for the inaccuraci es in Solicitation II’s scope of work and the inappropriate handling of insurance and bonding requireme nts. Rogan’s winning proposal was $2,133,000, AR 74-2046.1, while JCN bid $2,328,780. AR 69-2021. Thus, Rogan’s and JCN’s bids were close to each other, and both were te chnically qualified for the work.

Combining the value of the concededly incorre ct scope of asbestos abatement with the HVAC work Rogan performed under Contract I th at was nonetheless incl uded in Solicitation II produces a total value of $169,898. 7 By taking account of insurance and bonding costs, JCN’s bid would be lower than Rogan’s bid. Thus, JCN has shown that it would have had a substantial prospect of receiving the award of the contract had the Postal Service properly conducted the second solicitation. In short, JC N has shown that it was prejudiced by the Postal Service’s errors in the procurement.

Despite this finding of prejudice, equitable relief is not approp riate in this case. At the hearing conducted on September 20, 2012, Mr. Andr ew Stein, the Postal Service’s architectengineer acting as the contracti ng officer’s representative respec ting the HVAC project, testified that at that time work on the contract was 93 pe rcent finished. Hr’g Tr. 58:22-23. Only two main items remained to be completed: (1) ad dressing a punch list of co rrective matters, and (2) balancing the system. Hr’g Tr. 59:9 to 60:24. C onsidering the four factors that govern equitable relief, 8 it is apparent that an injunction would be of little utility, given the near completion of the

7 This work includes costs related to chilled water piping; the temper ature control system; registers, grills, and diffusers ; and ductwork. The record shows the following completed work

and associated costs in those areas for the work period through January 31, 2012, when Rogan was performing work under Contract I: (1) Chilled Water Piping: $59,160 (work completed before the period) + $18,044 = $77,204; (2) Temperature Control System: $13,473; and (3) RGDs (Registers, Grills and Diffusers) plus Ductwork = $40,401.00. See AR 53-1642.

8 In deciding whether to issue a permanent injunction, the court must consider four factors: (1) whether the plainti ff has succeeded on the merits of its case, (2) whether the plaintiff16 work covered by the contested procurement awar d. “This court has r ecognized that ‘when a contract has been substantially co mpleted, it is impossible, or at l east imprudent, for the court to

order that the cont ract be rebid.” Furniture by Thurston v. United States , 103 Fed. Cl. 505, 521 (2012) (quoting Forestry Surveys & Data v. United States , 44 Fed. Cl. 485, 491 (1999)).

JCN is not without any remedy. Be cause it has prevailed on the merits of its protest, it is entitled to an award of bid prep aration and proposal costs pursuan t to 28 U.S.C. § 1491(b)(2). See Furniture by Thurston , 103 Fed. Cl. at 522 (citing PGBA , 60 Fed. Cl. at 222).

CONCLUSION

For the reasons stated, the plaintiff’s moti on for judgment on the administrative record is GRANTED IN PART and DENIED IN PART, and the government’s cross-motion for judgment

on the administrative record is GRANTED IN PART and DENIED IN PART. No injunctive relief will issue, but JCN shall recover its reas onable bid preparation and proposal costs.

JCN shall submit a reckoning of such co sts on or before November 16, 2012. The government shall respond to JCN’s submi ssion of such costs by November 30, 2012.

It is so ORDERED

.

s/ Charles F. Lettow

Charles F. Lettow Judge

will suffer irreparable harm absent injunctive relief, (3) whether such harm would outweigh the harm of the government, and (4) whether an in junction would serve th e public interest. See

PGBA , 389 F.3d 1228-29.