Court Opinion

ID: 4682543
Source: CourtListenerOpinion
Date Created: 2021-04-29 20:02:08.511681+00
Date Added: 2024-06-11T09:00:31.425147
License: Public Domain

In the United States Court of Federal Claims
                                         No. 20-1557
                                     Filed: April 14, 2021
                                   Reissued: April 29, 2021 1

                                             )
    PAE APPLIED TECHNOLOGIES, LLC,           )                          Redacted Version
                                             )
                   Plaintiff,                )
                                             )
    v.                                       )
                                             )
    THE UNITED STATES,                       )
                                             )
                   Defendant,                )
                                             )
                   and                       )
                                             )
    RELIANCE TEST & TECHNOLOGY,              )
    LLC,                                     )
                                             )
                   Defendant-Intervenor.     )
                                             )

Robert Stephen Nichols, Nichols Liu, LLP, Washington, DC, for plaintiff.

Albert Salvatore Iarossi, U.S. Department of Justice, Civil Division, Washington, DC, for
defendant.

Douglas Leo Patin, Bradley Arant Boult Cummings LLP, Washington, DC, for
defendant-intervenor.

                                   OPINION AND ORDER

SMITH, Senior Judge

        This post-award bid protest is before the Court on the parties’ Cross-Motions for
Judgment on the Administrative Record. Plaintiff, PAE Applied Technologies, LLC (“PAE”),
challenges the evaluation of offerors and the award decision issued by the Department of the
Navy, Naval Air Systems Command (“Navy” or “Agency”) for technical support services for
missions conducted by Navy’s Atlantic Test Range (“ATR”) and Atlantic Targets and Marine
Operations (“ATMO”) Division under Request for Proposal No. N0042118R0038 (“RFP” or
“Solicitation”). Administrative Record 1479 [hereinafter AR]. Specifically, plaintiff challenges

1       An unredacted version of this opinion was issued under seal on April 14, 2021. The
parties were given an opportunity to propose redactions and those redactions are included herein.
the Agency’s award to defendant-intervenor, Reliance Test & Technology, LLC (“RTT”), based
on the following: (1) the technical risks and associated cost risks with RTT’s Staffing Approach;
(2) the Navy’s evaluation of PAE’s key personnel; (3) the Navy’s evaluation of PAE’s past
performance, and (4) the Navy’s cost realism analysis. See generally Plaintiff’s Motion for
Judgment on the Administrative Record, ECF No. 54 [hereinafter Pl.’s MJAR]. In response,
defendant and defendant-intervenor contend that plaintiff’s proposal was unawardable due to the
resignation of a required key person from PAE’s subcontractor, Sabre Systems Inc. (“Sabre”).
See generally Defendant’s Response in Opposition to Plaintiff’s Motion for Judgment upon the
Administrative Record, and Cross-Motion for Judgment upon the Administrative Record, ECF
No. 61 [hereinafter Def.’s CMJAR]; Defendant-Intervenor’s Cross-Motion for Judgment on the
Administrative Record and Response to Plaintiff’s Motion for Judgment on the Administrative
Record, ECF No. 60 [hereinafter Def.-Int.’s CMJAR]. For the reasons set forth below, the Court
denies plaintiff’s Motion for Judgment on the Administrative Record and grants defendant and
defendant-intervenor’s Cross-Motions for Judgment on the Administrative Record.

   I.        Background

        A.      Solicitation

        Plaintiff is the incumbent contractor for the Navy’s predecessor Atlantic Ranges
Technical Support Services (“ARTSS”) contract. See generally AR 6372–8027. On May 21,
2019, the Navy issued the Solicitation, which sought services such as research and development,
engineering, maintenance, operation, support of facilities, systems, and equipment to support the
engineering development and operational testing and fleet training missions conducted by the
ATR and ATMO Division. AR 1433, 1479. The RFP provided for a best-value trade-off source
selection based on the following four factors: (1) Mission Support, (2) Corporate Experience, (3)
Past Performance, and (4) Cost/Price. AR 1734. The first three factors were equal in
importance, each factor being more important than Cost, and the first three factors in
combination were significantly more important than Cost. AR 1734.

             1. Mission Support Evaluation Factor

        For the Mission Support Evaluation Factor, the RFP stated that the Navy would “evaluate
the proposal to determine the Offeror’s understanding of, approach to and ability to meet the
solicitation requirements.” AR 1734. As part of that evaluation, the Navy assessed each
proposal “with respect to its compliance with the solicitation requirements and the risk
associated with the Offerors approach.” AR 1734. Consequently, the Navy assigned offerors a
Mission Support Rating and a Risk Rating. AR 1735.

        The Mission Support Rating assessed offerors for “compliance with the solicitation
requirements and merit which considers the benefits and detriments related to program
performance and operations.” AR 1735. The Navy would assess the “degree of benefit” to the
Navy by “determining whether the Offeror’s approach and understanding of requirements rises
to a level of being thorough or exceptional.” AR 1735. Additionally, the Navy would assign a
Risk Rating associated with the offeror’s Mission Support approach. AR 1735. This assessment
would “consider[] the potential for disruption of schedule, increase in costs, degradation or

                                              -2-
performance, the need to increase Government oversight, or the likelihood of unsuccessful
contract performance.” AR 1735.

       For Mission Support, the Navy assigned offerors ratings of “Outstanding”, “Good”,
“Acceptable”, “Marginal”, or “Unacceptable.” AR 1737. For Risk, the Navy assigned ratings of
“Low”, “Moderate”, “High”, or “Unacceptable”. AR 1738. If offerors received a Mission
Support Rating of “Unacceptable” or “Marginal”, or a Risk Rating of “High” or “Unacceptable”,
these offerors were considered unawardable and their entire proposal may be considered
unacceptable and eliminated from the competition. AR 1735.

       Central to this dispute is a Mission Support requirement. Specifically, offerors were
required to fulfill three key personnel positions: (1) Senior Radar Cross Section (“RCS”)
Engineer, (2) General Operations Manager, and (3) Aerial Targets Site Lead Operations
Manager. AR 1707. Offerors were required to provide resumes demonstrating the “relevant
experience of the proposed Key Personnel in tasks similar to those outlined in the [Statement of
Work].” AR 1707. For contingency hires, offerors were required to submit letters of intent. AR
1707.

              2. Cost Evaluation Factor

       For the Cost Evaluation Factor, the RFP stated that the Navy would “perform a cost
realism analysis to determine the most probable cost (MPC) for each applicable Offeror’s
proposal.” AR 1736. In relevant part, the RFP detailed the Navy’s process for its cost realism
evaluation as follows:

       [T]he Government may review the Offeror’s proposed direct labor rates and compare the
       proposed rates to payroll verification, Letters of Intent, historical rate ranges provided in
       the solicitation, or other substantiated data. Direct labor rates for SCA covered labor
       categories will also be reviewed to ensure they are in compliance with the applicable
       [Area Wage Determination] (at or above the AWD minimum rate). Pertinent cost
       information, including but not limited to, historical rates and DCAA approved or
       recommended rates for such costs as direct labor, overhead, G&A, etc., as necessary and
       appropriate, will be used to arrive at the Government determination of the MPC for the
       performance of this contract.

       . ..

       The MPC is an Offeror’s total cost, including fee, and any additional adjustments to the
       rates that the Government has determined necessary to make the proposed cost realistic
       for all periods.

AR 1736.

      The RFP provided the following instructions regarding direct labor for proposed current
employees, contingent hires, and key personnel:

                                               -3-
       For all proposed current employees, Offerors shall provide certified payroll verification
       that consists of a form containing the title, current direct labor rate, and a signed
       certification by an authorized representative of the company that the payroll information
       contained in the form is current and accurate.

       A “contingent hire” is an individual who has committed, under a signed letter of intent,
       inclusive of salary information, to being employed by the Offeror if the Offeror is
       awarded the contract. All proposed contingent hires shall have a letter of intent submitted
       under the Cost Volume outlining salary information (specified as an agreed to direct
       hourly rate) for the contingent hire employee. The letter of intent is a separate written
       agreement signed by the potential employee(s) to work for the Offeror effective at
       contract award.

       For any proposed prospective hires, Offerors shall utilize the table below that provides a
       rate range of direct labor rates based off of historical rates for each labor category. The
       only acceptable substantiation for proposing less than the Government provided labor
       rate range for each category is payroll verification for current employees or Letters of
       Intent for Contingent Hires.

       For proposed Key personnel, the proposed direct labor rate should be based on either
       certified payroll data if currently employed by the Offeror or based on the salary
       information (specified as an agreed to direct hourly rate) in the submitted Letter of Intent
       if the proposed individual is categorized as a contingent hire.

AR 1718.

        For offerors proposing prospective hires, the Navy provided rate ranges of direct labor
rates for all labor categories except for key personnel. AR 1718. The Solicitation stated that
“[t]he Government considers these rates realistic as they are based off of historical rate
information. This information is provided to all Offerors to ensure the realism of direct labor
rates.” AR 1718–19.

       B. Offerors and PAE’s Proposal

       The Navy received six proposals in response to the RFP, including a proposal from PAE.
See AR 19897; see also AR 19553–54; AR 6372. The Navy determined that discussions were
necessary to address proposal weaknesses, deficiencies, and solicitation compliance issues. AR
19897. A competitive range was established with all six offerors. AR 19897. On December 9,
2019, the Navy opened discussions. AR 19897. On April 24, 2020, the Navy closed discussions
and requested final proposal revisions (“FPRs”). AR 18000–02. On April 28, 2020, PAE
submitted its FPR. AR 18340. The remaining five offerors successfully submitted their FPRs by
the April 29, 2020 deadline. See generally AR 18020, 18335, 18729.1, 18730, 19033.

     For PAE’s proposal, it provided three current employees for the key personnel positions.
AR 6451–52; see also AR 6453–64. Pertinent to this case, PAE proposed a current employee,
              , of its subcontractor, Sabre, to fill the key personnel position of Senior RCS

                                               -4-
        On July 31, 2020, the Source Selection Advisory Council (“SSAC”) reviewed the SSEB
report and provided their assessment in a Proposal Analysis Report (“PAR”). See generally AR
19895. The SSAC reported that PAE was the only offeror with an “Unacceptable” rating under
the Mission Support Factor due to a key personnel deficiency for the Senior RCS Engineer
position, a deficiency which was discovered after close of discussions. AR 19904. The
evaluators noted that “without the assessed Deficiency, PAE still would have been ranked near
the bottom among all offerors in the [Mission Support] Factor.” AR 19904. As such, the SSAC
concluded that “even if PAE were given the opportunity to correct this Deficiency, it still would
not be among the most highly evaluated offerors . . . in the trade off analysis.” AR 19905.
Therefore, the SSAC agreed with the SSEB’s assessment including the decision not to reopen
discussions. AR 19905.

         The Source Selection Authority (“SSA”) reviewed the SSAC’s assessment and, pertinent
to this case, agreed with its analysis of the Mission Support Factor. The SSA specifically noted
PAE’s lack of an RCS Engineer and explained that it was a “significant concern.” AR 19925.
Specifically, the SSA noted that the difficulty in filling these key personnel positions “led to the
inclusion of Key Personnel as an Element to the Mission Support Factor.” AR 19925. Further,
the SSA confirmed that “reopening discussions to give PAE the chance to address the deficiency
would not allow PAE to improve its standing to become among the most highly rated proposals.”
AR 19925. As such, the SSA concluded that RTT represented the “best value to the
Government, all factors considered.” AR 19933. On September 1, 2020, the Navy informed
PAE it had awarded the contract to RTT. AR 20898.

       C. GAO Protest and Current Procedural History

        On September 14, 2020, PAE filed a protest with the Government Accountability Office
(“GAO”), challenging the Agency’s award decision. AR 21188–258. On November 4, 2020,
the GAO denied PAE’s protest, concluding that the Navy’s evaluation was “reasonable and in
accordance with the stated evaluation factors, and that the Navy reasonably found PAE’s
proposal unacceptable and ineligible for award.” AR 21831. As such, the GAO concluded that
PAE lacked standing to pursue its challenge against the Navy because PAE was “not an
interested party for purposes of questioning the remainder of the agency’s evaluation of
proposals and resulting award decision.” AR 21831. This protest followed.

         On November 9, 2020, PAE filed its Complaint with this Court. See generally
Complaint, ECF No. 1 [hereinafter Compl.]. On November 20, 2020, defendant-intervenor filed
its Motion to Dismiss. See generally RTT Motion to Dismiss, ECF No. 25 [hereinafter Def.-
Int.’s MTD]. On January 7, 2021, plaintiff filed its Motion for Judgment on the Administrative
Record. See generally Pl.’s MJAR. On February 2, 2021, defendant filed its Response and
Cross-Motion. See generally Def.’s CMJAR. Defendant-intervenor filed its Response and
Cross-Motion that same day. See generally Def.-Int.’s CMJAR. On February 16, 2021, plaintiff
filed its Reply and Response. See generally Plaintiff’s Response and Reply in Support of its
Motion for Judgment on the Administrative Record, ECF No. 62 [hereinafter Pl.’s Resp.]. On
March 2, 2021, defendant and defendant-intervenor filed their respective Replies. See generally
Defendant’s Reply in Support of its Cross-Motion for Judgment Upon the Administrative
Record, ECF No. 65 [hereinafter Def.’s Reply]; Defendant Intervenor RTT’s Reply in Support of

                                               -6-
its Cross-Motion for Judgment on the Administrative Record, ECF No. 64 [hereinafter Def.-
Int.’s Reply]. The Court held oral argument on March 12, 2021. The parties’ Motions are fully
briefed and ripe for review.

   II.     Standard of Review

       This Court’s jurisdictional grant is found primarily in the Tucker Act, which provides the
Court of Federal Claims with the power “to render any judgment upon any claim against the
United States founded either upon the Constitution, or any Act of Congress or any regulation of
an executive department, or upon any express or implied contract with the United States . . . in
cases not sounding in tort.” 28 U.S.C. § 1491(a)(1) (2012). Although the Tucker Act explicitly
waives the sovereign immunity of the United States against such claims, it “does not create any
substantive right enforceable against the United States for money damages.” United States v.
Testan, 424 U.S. 392, 398 (1976). Rather, to fall within the scope of the Tucker Act, “a plaintiff
must identify a separate source of substantive law that creates the right to money damages.”
Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in relevant part).

        The Tucker Act also affords this Court with jurisdiction over bid protest actions. 28
U.S.C. § 1491(b). This Court evaluates bid protests under the Administrative Procedure Act’s
(“APA”) standard of review for agency actions. See Bannum, Inc. v. United States, 404 F.3d
1346, 1351 (Fed. Cir. 2005) (citing Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)). Under APA standards, agency procurement
actions may be set aside if they are “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with the law.” 28 U.S.C. § 1491(b)(4); 5 U.S.C. § 706(2)(A). In other words, a
bid protest may be set aside if “(1) the procurement official’s decision lacked a rational basis; or
(2) the procurement procedure involved a violation of regulation or procedure.” Impresa, 238
F.3d at 1332 (internal citations omitted). If a challenge is brought on the first ground, the court
must determine “whether the contracting agency provided a coherent and reasonable explanation
of its exercise of discretion.” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1381
(Fed. Cir. 2009) (quoting Impresa, 238 F.3d at 1333). “When a challenge is brought on the
second ground, the disappointed bidder must show a clear and prejudicial violation of applicable
statutes or regulations.” Id.

        The arbitrary and capricious standard is a highly deferential one. Advanced Data
Concepts, 216 F.3d 1054, 1058 (Fed. Cir. 2000). “If the [C]ourt finds a reasonable basis for [an]
agency’s action, the [C]ourt should stay its hand even though it might, as an original proposition,
have reached a different conclusion as to the proper administration and application of the
procurement regulations.” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989)
(quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)). “The Court
cannot substitute its judgment for that of the agency, even if reasonable minds could reach
differing conclusions.” DynCorp Int’l LLC v. United States, 139 Fed. Cl. 481, 486 (2018) (citing
Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281, 285–86 (1974)).

       Under Rule 52.1 of the Rules of the Court of Federal Claims (“RCFC”), a party may file
a motion for judgment upon the administrative record for the Court to assess whether an
administrative body, given all disputed and undisputed facts in the record, acted in compliance

                                                -7-
with the legal standards governing the decision under review. See Supreme Foodservice GmbH
v. United States, 109 Fed. Cl. 369, 382 (2013) (citing Fort Carson Supp. Servs. v. United States,
71 Fed. Cl. 585 (2006)). On a motion for judgment upon the administrative record, the parties
are limited to the Administrative Record, and the Court makes findings of fact as if it were
conducting a trial on a paper record. RCFC 52.1; Bannum, 404 F.3d at 1354. Looking to the
Administrative Record, the Court must determine whether a party has met its burden of proof
based on the evidence in the record. Bannum, 404 F.3d at 1355.

   III.        Discussion

          A.      Key Personnel

        In its Motion for Judgment on the Administrative Record, plaintiff argues that the
Agency disqualified it from consideration “based on an unfounded conclusion” that PAE’s key
personnel was unavailable. Pl.’s MJAR at 11. Plaintiff further argues that the Agency’s
determination was arbitrary and capricious because, rather than clarifying whether plaintiff’s key
personnel was actually unavailable, the Agency instead relied on GAO case law that an agency
can either evaluate a proposal as submitted or open discussions to allow the offeror to amend its
proposal. See generally Pl.’s MJAR at 11–18. Finally, plaintiff alleges that the Agency could
have engaged in clarifications because plaintiff did not need to change its proposal as its RCS
Engineer,                   , was and is available to work on the current contract. Pl.’s MJAR at
13.

        In response to plaintiff’s allegations, defendant argues that the Navy properly concluded
that PAE’s Senior RCS Engineer,                      , was unavailable for the new contract because
he resigned from his employment with PAE’s subcontractor, Sabre. Def.’s CMJAR at 18–19.
Defendant disagrees that the Navy relied on “unverified conjecture” regarding
availability because                 stopped showing up for work on the incumbent contract, and
his resignation was communicated to a member of the Navy’s evaluation board. Def.’s CMJAR
at 19–21. Further, defendant argues that the Agency would have to engage in discussions, not
clarifications, to correct the deficiency in PAE’s proposal because PAE would have to revise its
proposal “to either identify a new RCS Engineer, or to add a new . . . signed letter of intent
between                  and PAE.” Def.’s CMJAR at 22. Defendant-intervenor likewise argues
that plaintiff’s proposal became unawardable when a key person resigned after discussions
closed. See generally Def.-Int.’s CMJAR at 9–14.

        When it comes to unavailable key personnel, this Court has already taken the position
that an “agency has a choice between evaluating the original proposal as submitted, or opening
discussions to allow for modified proposals.” Chenega Healthcare Servs., LLC v. United States,
141 Fed. Cl. 254, 260 (2019) (citing Chenega Healthcare Servs., LLC, B-416158, 2018 CPD ¶
200 at 4, n.2 (Comp. Gen. June 4, 2018)). Further, this Court has noted that “any post-
submission key personnel [runs] the risk of rendering the offeror’s proposal unacceptable, with
no opportunity to cure the defect during discussions.” Id. (internal citation omitted). Finally, as
articulated above, the reviewing court will only set aside agency action if it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with the law.” 28 U.S.C. §

                                               -8-
1491(b)(4); 5 U.S.C. § 706(2)(A). The arbitrary and capricious standard is a highly deferential
one. Advanced Data Concepts, 216 F.3d 1054, 1058 (Fed. Cir. 2000).

       Here, the Agency acted rationally and in accordance with the Solicitation when it rated
PAE “Unacceptable” under the Mission Support Factor for a deficiency related to key personnel.
The RFP required offerors to fill three key personnel positions, one of which is the Senior RCS
Engineer position. AR 1707. After discussions had closed and FPRs were submitted, it became
apparent that PAE was not able to meet this requirement through discussions between PAE
employee,               and a member of the Navy’s evaluation board,                  y. On June
9, 2020,          , informed               , that its proposed RCS Engineer had resigned from its
subcontractor, Sabre, with his last day being June 19, 2020. See AR 21765–67. Thus, starting
from June 19, 2020, PAE no longer had an RCS Engineer.

        After                resigned, the Administrative Record shows that PAE attempted to
directly hire               to comply with the RFP’s requirement to have an RCS Engineer. On
June 22, 2020,             informed Mr. Ashley that there were discussions with
about working directly for PAE, but                 said that he would “think about it over the
weekend” but that he was “definitely interested.” AR 21768. By July 22, 2020,
informed              that “[w]e have not heard back yet” but that PAE would “continue to
search for a radar expert or two for you.” See AR 21769. Accordingly, the Administrative
Record shows that, while PAE attempted to hire                  , there was no employment
agreement between the parties.

        Consequently, the Court finds that the Navy properly concluded in its evaluation that
PAE had a deficiency under the Mission Support Factor for failing to provide an RCS Engineer.
The Agency “ha[d] a choice between evaluating the original proposal as submitted, or opening
discussions to allow for modified proposals.” Chenega Healthcare, 141 Fed. Cl. at 260 (internal
citation omitted). The Navy chose to evaluate PAE’s proposal as submitted. PAE’s proposal at
the time of FPR submission was deficient under the Mission Support Factor for failing to provide
an RCS Engineer. Moreover, clarifications would not have resolved this deficiency in PAE’s
proposal as offerors were required to submit a letter of intent for contingent hires in accordance
with the Solicitation. See AR 1707. PAE did not submit a letter of intent because, as stated by
PAE, its “proposed key personnel are currently employed on the ATR/ATMO contract;
therefore, we have no contingency hires.” See AR 6452. Thus, the Agency acted rationally and
in accordance with the Solicitation when it evaluated and rated PAE’s proposal “Unacceptable”
under the Mission Support Factor for a deficiency related to key personnel.

        Finally, the Court finds this issue dispositive as, pursuant to the express terms of the
Solicitation, offerors are considered unawardable if they receive an “Unacceptable” rating under
the Mission Support Factor. However, the Court will address specific arguments related to cost
realism and past performance below.

       B.      Cost Realism

        Plaintiff argues that the Navy failed to assess the cost risk involved with RTT’s labor
rates, where both PAE and RTT proposed to utilize the same incumbent workforce but RTT

                                               -9-
“proposed to pay them far less.” Pl.’s MJAR at 25. Plaintiff contends that the Navy should have
adjusted RTT’s proposed rates to the “same current incumbent wages that the Agency required
PAE to use for its incumbent workforce.” Pl.’s MJAR at 29. Ultimately, plaintiff asserts that a
“proper cost realism adjustment would have increased RT[]T’s [Most Probable Cost] direct labor
cost by approximately $ million over the contract life.” Pl.’s MJAR at 30.

        In response, defendant argues that the Navy conducted its cost realism evaluation in
accordance with the Solicitation. See generally Def.’s CMJAR at 37–40. Defendant notes that
the Solicitation specifically considered RTT’s proposed direct labor rates realistic. Def.’s
CMJAR at 38–39. Defendant also notes that PAE even used the “exact same minimum rate
ranges that RTT did in its proposal” for over % of PAE’s positions. Def.’s CMJAR at 39.
Similarly, defendant-intervenor argues that the “fact that PAE itself proposed personnel at the
low range of the rate table undermines the argument that the Agency irrationally failed to assign
greater technical risk to RT[]T’s proposal.” Def.-Int.’s CMJAR at 31. Finally, defendant argues
that an agency must evaluate offerors in accordance with the RFP and not to the “undisclosed
and unknowable labor rates [of] the incumbent contractor.” Def. Reply at 15.

        It is well settled that “contracting agencies enjoy wide latitude in conducting the cost
realism analysis.” Agile Def., Inc. v. United States, 959 F.3d 1379, 1385–86 (Fed. Cir. 2020)
(internal citation omitted). To successfully challenge a cost realism analysis, a protestor must
demonstrate “the absence of a rational basis for the agency’s decision.” CSC Gov’t Sols. LLC v.
United States, 129 Fed. Cl. 416, 429 (2016) (citing A-T Solutions, Inc., v. United States, 122 Fed.
Cl. 170, 180 (2015)). “In a best value procurement such as this one, the contracting officer
inherently exercises significant discretion.” Id. (citing Galen Med. Assocs., Inc. v. United States,
369 F.3d 1324, 1330 (Fed. Cir. 2004)).

        The Court is not convinced by plaintiff’s arguments. PAE contends that the Navy should
have accounted for cost risk in its cost realism evaluation by adjusting RTT’s proposed direct
labor rates to reflect PAE’s incumbent rates. See Pl.’s MJAR at 28. Yet, the Solicitation
specifically considered the minimum rate range used by RTT as “realistic.” AR 1718–19. As
noted by defendant and defendant-intervenor, the Solicitation states that the Navy’s cost realism
evaluation would utilize direct labor rates as follows:

       For any proposed prospective hires, Offerors shall utilize the table below that
       provides a rate range of direct labor rates based off of historical rates for each
       labor category. The only acceptable substantiation for proposing less than the
       Government provided labor rate range for each category is payroll verification for
       current employees or Letters of Intent for Contingent Hires.

       . ..

       The table below provides a rate range of direct labor rates for all of the labor
       categories identified under this solicitation (exclusive of Key Personnel). The
       Government considers these rates realistic as they are based off of historical
       rate information. This information is provided to all Offerors to ensure the realism
       of direct labor rates.

                                               - 10 -
AR 1718–19 (emphasis added). Accordingly, RTT proposed prospective hires using direct labor
rates specifically provided for in the RFP. As defendant argues, PAE even proposed the same
minimum rate range as RTT did in its proposal for more than % of its positions. Def.’s
CMJAR at 39; see also AR 16424. Therefore, the Court finds that the Navy did not lack a
rational basis in its cost realism evaluation of RTT’s direct labor rates.

        Moreover, PAE takes issue with the Navy’s assessment of RTT because RTT’s labor
rates are lower than incumbent wage rates. However, RTT had no way of knowing direct labor
rates for incumbent employees. Indeed, even if RTT had wanted to submit current wage rates for
its prospective hires, this information was not publicly available. For the reasons set forth above,
the Agency’s cost realism evaluation was neither arbitrary nor capricious, and, thus, the Court
declines to set aside those evaluations now.

       C.      Past Performance

        Plaintiff alleges various arguments regarding the Navy’s review of PAE’s Contract
Performance Assessment Reporting System (“CPARS”) and its past performance rating. Pl.’s
MJAR at 18–24. Specifically, PAE alleges that the Navy “cherry-picked negative comments”
from its CPARs which ultimately affected its rating. Pl.’s MJAR at 20. Plaintiff contends that it
received high scores, such as “Exceptional” or “Very Good” on over % of its CPARs; yet,
despite these high scores the “Agency arbitrarily focused on a series of negative incidents in the
text of CPARs.” Pl.’s MJAR at 20. As a result, plaintiff alleges that the Navy acted “irrationally
and arbitrarily in violation of the RFP and case law.” Pl.’s MJAR at 21.

        In response, defendant argues that PAE simply took its ratings from its CPARs, tallied
the number of positive comments, and then compared those to the number of negative comments
it received to conclude that the ratio justified a higher past performance rating. See Def.’s
CMJAR at 32. Defendant contends that there is nothing in the RFP “that suggests that the
Navy’s evaluation method was to simply calculate the arithmetic percentage of positive and
negative comments in order to assess a past performance rating.” Def.’s CMJAR at 32. Further,
defendant disagrees that the Navy “cherry-picked negative comments” from PAE’s CPARS. See
Def.’s CMJAR at 33. Rather, defendant contends that the Navy looked at both positive and
negative information from the CPARS. See Def.’s CMJAR at 33.

         An Agency is “entitled to great deference” in bid protests challenging past performance
evaluations. Al Andalus Gen. Contracts Co. v. United States, 86 Fed. Cl. 252, 264 (2009)
(quoting Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272, 293 (2007)). The Court’s review
of an Agency’s past performance evaluation is limited “to ensure that it was reasonable and
consistent with the stated evaluation criteria and applicable statutes and regulations, since
determining the relative merits of the offerors’ past performance is primarily a matter within the
contracting agency's discretion.” See Glenn Def. Marine Asia v. United States, 105 Fed. Cl. 541,
564 (2012) (internal citations omitted). Even if “the agency’s interpretation of the facts giving
rise to the perception of substandard prior performance is disputed by the contractor, the
agency’s evaluation will not be overturned as long as it is reasonable.” SDS Int’l v. United
States, 48 Fed. Cl. 742, 756 (2001) (internal citations omitted).

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        The Court finds plaintiff’s past performance arguments unavailing. PAE contends that
the Navy “cherry-picked negative comments” from its CPARs, but the Administrative Record
shows that the evaluation board considered both the positive and negative aspects of PAE’s
proposal. See generally AR 19786–802. The evaluation board noted PAE and its principal
entities’ performance as predominantly “Very Good and Exceptional on the most recent
[CPARS] and Past Performance Questionnaires (PPQs).” AR 19787. However, as defendant
argues, the Navy noted its concern that “there is a theme across PAE contracts involving careless
                  resulting in the                                               .” See AR
19789.

       Indeed, the Navy’s assessment of PAE’s positive and negative attributes were
summarized in the SSA’s Source Selection Decision Memorandum (“SSDM”). See generally
AR 19912–13. Specifically, the SSA stated that “there was more positive findings and trends as
opposed to adverse,” but noted two significant adverse findings of
                                                                    .” AR 19912. The SSA
concluded that “there is a reasonable expectation that PAE will be able to perform the effort” but
“the presence of                     adverse findings leads to PAE being viewed as the least
favorable offeror in terms of the Past Performance factor.” AR 19913.

       The Administrative Record demonstrates that the Navy meaningfully considered PAE’s
positive and negative past performance record before assigning it a rating of “Satisfactory,” the
second-highest rating for Past Performance. See generally AR 1738. As such, where, as here,
the Agency gives meaningful consideration to past performance, and its evaluation thereof is
reasonable, the Court will not infringe upon the Agency’s decision-making. See Glenn Def.
Marine, 105 Fed. Cl. at 564. Accordingly, the Court finds that the Navy appropriately evaluated
and rated PAE’s past performance.

       D.      Prejudice and Injunctive Relief

        Plaintiff alleges that it was “prejudiced by the Navy’s arbitrary and capricious evaluation
of its key personnel because, had the Navy not assigned the deficiency, PAE’s proposal would
have been acceptable and earned a rating of ‘Good’ (at least), putting PAE on par with RT[]T
and providing it a substantial chance at award.” Compl. at 15–16; see also Pl.’s MJAR at 3–4.
In response, defendant argues that the “fatal problem with all of PAE’s arguments regarding
prejudice . . . is that it is ineligible for contract award, due to its failure regarding the key
personnel issue.” Def.’s CMJAR at 47.

        This Court “will not disturb a best-value award so long as the agency ‘documents its final
award decision and includes the rationale for any business judgments and tradeoffs made.’”
Afghan Am. Army Servs. Corp. v. United States, 90 Fed. Cl. 341, 360 (2009) (quoting Blackwater
Lodge & Training Ctr. v. United States, 86 Fed. Cl. 488, 514 (2009)) (citation omitted). So long
as there exists a “rational connection between the facts found and the choice made,” the Court
will not set a procurement decision aside. Banknote Corp. of Am. v. United States, 56 Fed. Cl.
377, 390 (2003) (quoting Motor Vehicle Mfrs. Ass’n v. State farm Mut. Auto. Ins. Co., 463 U.S.
29, 43 (1983)). The Court is inclined to agree with defendant for all of the reasons articulated
above. Additionally, the Navy documented that even if PAE had resolved its deficiency

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regarding key personnel, “it still would not be among the most highly evaluated offerors.” AR
19944. Accordingly, the Court finds that plaintiff suffered no prejudice.

       Finally, plaintiff alleges that it is entitled to permanent injunctive relief. When analyzing
whether a permanent injunction is proper, a court must analyze “whether, as it must, the plaintiff
has succeeded on the merits of the case.” PGBA, LLC v. United States, 389 F.3d 1219, 1229
(Fed. Cir. 2004). As the plaintiff did not succeed on the merits of its case, the Court need not
analyze whether it is entitled to permanent injunction.

   IV.     Conclusion

       For the reasons set forth above, plaintiff’s MOTION for Judgment on the Administrative
Record is hereby DENIED. Defendant and defendant-intervenor’s CROSS-MOTIONS for
Judgment on the Administrative Record are hereby GRANTED. Accordingly, defendant-
intervenor’s Motion to Dismiss is hereby DENIED AS MOOT. The Clerk is directed to enter
judgment in favor of defendant and defendant-intervenor, consistent with this opinion.

       IT IS SO ORDERED.
                                                        s/   Loren A. Smith
                                                    Loren A. Smith
                                                    Senior Judge

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