Court Opinion

ID: 2799953
Source: CourtListenerOpinion
Date Created: 2015-05-12 12:02:37.395548+00
Date Added: 2024-06-11T11:31:21.751717
License: Public Domain

In the United States Court of Federal Claims
                                          No. 14-723C
                                          (Bid Protest)
                                     (Filed: May 11, 2015)1

*************************
                             *                       Post-award Bid Protest; Supplementation
UNIQUE BUILDERS CONSTRUCTION *                       of the Record; United States Agency for
CO.,                         *                       International   Development       Mission
                             *                       Order 201.05; Ineligibility Determination.
          Plaintiff,         *
                             *
          v.                 *
                             *
THE UNITED STATES,           *
                             *
          Defendant.         *
                             *
*************************

      Michael A. Gordon, Michael A. Gordon, PLLC, 1629 K Street, NW,                   Suite 300,
Washington, D.C. 20006, for Plaintiff. Fran Baskin and Jason T. Edwards, Michael       A. Gordon,
PLLC, 1629 K Street, NW, Suite 300, Washington, D.C. 20006, Of Counsel.                Richard L.
Moorhouse, L. James D’Agostino, and Jozef S. Przygrodzki, Greenberg Traurig            LLP, 1750
Tysons Boulevard, Suite 1200, McLean, VA 22102, Of Counsel.

       Joyce R. Branda, Robert E. Kirschman, Jr., Deborah A. Bynum, and William P. Rayel,
United States Department of Justice, Civil Division, Commercial Litigation Branch, PO Box
480, Ben Franklin Station, Washington, D.C. 20044, for Defendant.
            _________________________________________________________

                               OPINION AND ORDER
             _________________________________________________________

WILLIAMS, Judge.

       In this post-award protest, Plaintiff, Unique Builders Construction Co. (“UBCC”),
challenges the Government’s determination that UBCC was ineligible to receive a contract for
road construction in Afghanistan pursuant to the United States Agency for International
Development’s (“USAID”) Mission Order 201.05. This matter comes before the Court on the

1
       The Court issued this opinion under seal on April 29, 2015, and directed the parties to file
proposed by redactions by May 8, 2015. The Court publishes this Opinion indicating redactions
and the errata corrected. Redactions are indicated by asterisks “[***].”
parties’ cross-motions for judgment on the Administrative Record (“AR”). This case involves
classified material which is discussed in a classified addendum. The Court denies UBCC’s
protest as UBCC failed to demonstrate that USAID’s ineligibility determination was arbitrary,
capricious, or illegal.

                                        Findings of Fact2

       The Solicitation

        On November 10, 2013, USAID issued solicitation number SOL-306-14-000003,
requesting proposals from pre-qualified organizations for the construction of the final 25
kilometers of the Gardez-to-Khost road, a 101-kilometer road in the Paktya and Khost provinces
of eastern Afghanistan. 3 AR 40, 2470. Widening, paving, and repairing this road is part of
USAID’s Afghanistan Infrastructure Reconstruction Program, which aims to provide a high-
speed, all-weather road to link Afghanistan with “major trading routes to Pakistan.” AR 2470.
By November 10, 2013, all but 25 kilometers of the road work, specifically kilometers 27-30,
36-50, and 57-65, had been completed. AR 1834, 1838.

       The deadline for proposals was December 10, 2013. Award of this contract in an amount
between $25,000,000 and $38,000,000 was to be made on a best value basis, considering
technical factors, past performance, and price. AR 40.

        The solicitation required that work be completed no more than 540 days after the notice
to proceed. AR 1834. The project required the construction of “an all asphalt bituminous cement
road[], bridges, causeways, culverts, retaining walls, pavements, drainage, etc.,” with the
contractor ensuring that the road would remain passable at all times of the year. AR 1839. The
contractor was to provide security for its personnel, laborers, and equipment and engage the
services of a de-mining subcontractor to remove landmines and unexploded ordinance. AR 1842-
1843, 1859.

        In the solicitation, USAID required compliance with Mission Order 201.05. The purpose
of this Mission Order is to “describe procedures intended to minimize the risk” that USAID
programs “do not provide, even inadvertently, support to Prohibited Parties . . . .” AR 1930,
1794. A “Prohibited Party” is defined as

2
        These findings of fact are based on the AR. Additional findings of fact, based upon a
classified AR (“CAR”), are addressed in the classified addendum.
3
        On September 27, 2012, USAID began the procurement process by posting pre-
qualification notices setting October 22, 2012, as the closing date for submission of all proposals.
AR 2470. After receiving proposals, USAID deemed nine firms pre-qualified and released a
solicitation to the pre-qualified firms. AR 2471. However, Procurement Integrity Act violations
were discovered, and this solicitation was cancelled. Id. Subsequently, USAID issued the instant
solicitation to the pre-qualified firms. Id.
                                                 2
       an individual or entity that USAID knows or has reasonable grounds to suspect (i)
       supports or has supported terrorist activities, (ii) is or has been engaged in terrorist
       activities, (iii) poses a significant risk of committing terrorist activities, or (iv) is
       or has been engaged in other activities which are contrary to the national security
       or foreign policy interests of the United States.

AR 1795.

        This Mission Order resulted from the Government’s concern that United States
reconstruction funds for Afghanistan were being diverted to Prohibited Parties. Id. Mission
Order 201.05 requires the vetting of all non-U.S. contractors or subcontractors receiving contract
awards of greater than $25,000 and their “key individuals” who are not U.S. citizens or legal
permanent residents. Key individuals include lead officers or anyone who effectively controls the
organization. AR 1799, 1801. After an organization submits its vetting data, including business
licenses and biographical information for its key individuals, USAID’s Vetting Support Unit
(“VSU”) makes an eligibility determination. AR 1802. An organization deemed ineligible
cannot receive the award, but is not precluded from applying for future awards. AR 1808.

        Evaluation and Award

       USAID received proposals from eight offerors, including UBCC and Mashriq
Engineering Construction Company (“MECC”), which had worked on other sections of the
Gardez-to-Khost road. AR 2471-73. According to USAID, UBCC’s [***]. AR 2461, 2463.4
UBCC identified Major Matthew Myers as a reference. Major Myers is employed with the
United States Army and worked with UBCC during five road projects in Afghanistan’s Kunar
province from 2007-2009. AR 2137. On January 16, 2014, Major Myers provided an excellent
recommendation, relating that the President of UBCC had accompanied him on a dangerous
seven-kilometer foot-patrol mission to observe the road quality and construction during a
previous project. AR 2135-39.

       In March 2014, USAID determined that four offerors, UBCC, MECC, [***], and [***],
were in the competitive range. AR 2473. USAID conducted discussions with these offerors in
March 2014. All four proposals received an “outstanding” technical rating. AR 2474. UBCC
submitted the lowest revised price of $[***], whereas MECC submitted the highest revised price
of $32,763,736.00. Id. As all the proposals received an outstanding technical rating, UBCC
would normally have been selected as the lowest-priced offeror. AR 2475. However, UBCC
and the two other offerors were deemed ineligible for award pursuant to Mission Order 201.05.
USAID awarded MECC the contract on June 26, 2014. AR 2475-76.

4
        In the vetting documents submitted with UBCC’s proposal, [***] is not listed. AR 2019.
[***] is also not included in UBCC’s organizational chart. AR 1988. The record contains
variations in spellings of these names, but the Court will use these versions.
                                                  3
       UBCC’s Ineligibility

         On May 15, 2014, after reviewing the vetting information submitted by UBCC, USAID’s
Vetting Support Unit sent Roy Plucknett, the Deputy Mission Director for USAID Afghanistan,
a memorandum requesting a final vetting determination for UBCC. AR 2466. The Vetting
Support Unit stated that the USAID Office of Security (“Security Office”) had identified
derogatory information about UBCC and recommended that it be deemed ineligible for the
award. Id. The Vetting Support Unit also stated that there were viable alternatives to UBCC and
that failure to have a contractor on the Gardez-to-Khost road could cause political instability and
potential violence. AR 2467. Pursuant to Mission Order 201.05, the memorandum provided Mr.
Plucknett with the choice of either concurring with that determination or not concurring with the
Security Office’s determination and referring the matter to USAID’s Assistant to the
Administrator, Office of Afghanistan and Pakistan Affairs. Id. Mr. Plucknett concurred with the
Security Office’s determination and concluded that UBCC was ineligible to receive the award.
AR 2468.

      On July 8, 2014, USAID informed UBCC that it had been found ineligible in accordance
with Mission Order 201.05 and that MECC had been selected. AR 2479. USAID also informed
UBCC that it vets potential contractors by award and that UBCC could apply for future awards
and would be re-reviewed again. Id.

        On July 13, 2014, UBCC requested a debriefing. AR 2480. USAID provided a written
debriefing on July 15, 2014, but did not provide any additional information about the ineligibility
determination. AR 2481. UBCC protested at the Government Accountability Office (“GAO”)
on July 21, 2014, but the GAO dismissed Plaintiff’s protest on August 12, 2014, after it filed its
protest in this Court. USAID overrode the GAO’s stay of MECC’s contract performance.
Defendant represents that MECC has begun work on the road and currently has [***] employees
mobilized. Def. Mot. at 7.

                                           Discussion

Plaintiff’s Motion to Supplement the Administrative Record

       As the United States Court of Appeals for the Federal Circuit recognized in Axiom
Resource Management, Inc. v. United States, supplementation of the record in a bid protest is
permissible when “‘the omission of extra-record evidence precludes effective judicial review.’”
564 F.3d 1374, 1380 (Fed. Cir. 2009) (quoting Murakami v. United States, 46 Fed. Cl. 731, 735
(2000), aff’d 398 F.3d 1342 (Fed. Cir. 2005)).

        In its motion to supplement the AR, Plaintiff seeks to add an undated statement of
Layaqutullah Babaker Khil, “the member of the Afghan Parliament from Khost Province, who
has knowledge of the facts of the construction of the Gard[e]z to Khost road.” Pl. Mot. to Suppl.
at 1. The document consists of one page in a foreign language and a second page purporting to
be a translation into English. Id. at Ex. 1. Although Plaintiff characterizes the document as an
affidavit, an affidavit must be made under oath and contain the signatures of both the affiant and
an officer authorized to administer oaths in the location where signing occurred. See Ham Invs.,

                                                4
Inc. v. United States, 89 Fed. Cl. 537, 550 n.8 (2009) (citing 2A C.J.S. Affidavits § 25 (2009);
see also 3 Am. Jur. 2D Affidavits § 9 (2009)). There is no indication in the translated version
that Mr. Khil’s statement was made under oath.

       The translated page states:

               To: The Government of the United State of America.
               I Layaqutullah Babaker Khil member of the Afghan Parliament from
       Khost Province.
               As I know and discussed with the Elders and Local community of Khost
       province.
               The Elders and local community of Khost province along the road are not
       satisfied from the construction work of MECC Company for Gardiz to Khost
       road.
               We and the Elders and local community always raised this issue with
       Khost Governor and complained to him (Abdul Jabar Naimi), but he is interested
       with MECC Company and does not show interest with UBCC Company.
               He also said to many people that I do not want UBCC Company here.
               Therefore, it confirms his favor to MECC Company and he did not
       mention the reason of his interest.

               Layaqullah Babaker Khil
               (Member of Afghan Parliament from Khost Province)

Pl. Mot. to Suppl. at Ex. 1. The English document contains the stamp of the “Shukran Sabil
Translation Center.” Id.

        Plaintiff argues that this document should be included in the AR because “without it, the
Court will be missing relevant information that can explain why USAID took the actions in
finding all proposals, but MECC’s, ineligible,” because it “provides the Court with information
about the pressures that may have been present on USAID from the local government officials in
Afghanistan,” and because it identifies the “attitude of the local governor towards the offerors.”
Id. at 1-2. In response, Defendant posits that Plaintiff is attempting to claim bias by suggesting
that USAID deemed Plaintiff ineligible and MECC eligible due to the influence of the Governor
of Khost. Def. Opp’n to Mot. to Suppl. at 3. Plaintiff avers that the Governor may have applied
pressure on USAID to eliminate UBCC from the competition and award to MECC, relying only
on the unsworn undated “affidavit” of Mr. Khil. Pl. Mot. to Suppl. at 1-2. If, as Plaintiff
suggests, USAID procurement officials permitted themselves to be swayed by a local Afghan
official and found a way to select an awardee the Afghan official favored -- throwing United
States procurement law to the wind -- this allegation is tantamount to bad faith.

        Like bias, allegations of bad faith must rest on a strong evidentiary footing to warrant
supplementation of the AR. L-3 Commc’ns Integrated Sys., L.P. v. United States, 91 Fed. Cl.
347, 356 (2010); Int’l Res. Recovery, Inc. v. United States, 61 Fed. Cl. 38, 43 (2004) (granting
supplementation of the AR because the plaintiff’s bad faith and bias allegations were
“sufficiently well grounded,” with evidence that the contracting officer had purposely failed to

                                                5
tell evaluators that the company’s prior termination for default had been converted into a
termination for convenience). Other than the unsworn “affidavit” of Mr. Khil, there is no
evidence in the record to support the undue influence or bad faith on the part of USAID
procurement officials. There is no other evidence that the Governor of Khost Province had any
involvement in the procurement or vetting process, or that the Governor had any contact with
USAID employees. The statement of Mr. Khil does not constitute a “strong evidentiary footing”
for the bad faith allegation -- it does not meet basic requirements for an affidavit and lacks the
indicia of reliability. See NCL Logistics Co. v. United States, 109 Fed. Cl. 596, 613 (2013)
(denying supplementation of administrative record with hearsay); L-3 Commc’ns Integrated
Sys., L.P., 91 Fed. C1. at 356; Ham Invs., Inc., 89 Fed. Cl. at 550 n.8.

       Plaintiff has not provided any reliable evidence that USAID employees knew about the
opinions of the Governor of Khost, much less that they deemed Plaintiff ineligible for any reason
unconnected with Mission Order 201.05. Vague generalizations of “pressures that may have
been present” during the procurement process do not warrant supplementation of the AR.
Therefore, the Court denies Plaintiff’s motion.

Defendant’s Unopposed Motion to Amend the Administrative Record

        In this motion, Defendant requests that the Court amend the AR to add the Government’s
independent cost estimate (“IGCE”), USAID’s price analysis of initial proposals and final
proposals, and the GAO decision dismissing Plaintiff’s GAO protest. Defendant seeks to add the
IGCE and USAID’s price analysis to the AR because Plaintiff challenges this price analysis and
argues that USAID knew MECC “had proposed a price substantially higher than market price by
millions of dollars [***].” Pl. Reply at 4. Further, Plaintiff asserts that USAID improperly
evaluated MECC’s price because “[i]nstead of engaging in additional discussions, to avoid
scrutiny that might have revealed its improper disparate treatment, USAID masked MECC’s
significantly higher price by intentionally removing [***] from its price realism ‘evaluation’ in
the source selection decision, and compared . . . MECC’s price [***] only with the [IGCE].” Id.
Plaintiff alleges that due to the deficient price realism assessment, “award was made to MECC at
a multi-million dollar price premium.” Id.

       Defendant correctly denominates its motion as one to “amend” not “supplement” the AR,
as the materials the motion is seeking to add should have been included in the AR in the first
place. As Defendant notes, the GAO decision is required to be included in the AR pursuant to 31
U.S.C. § 3556. See 31 U.S.C. § 3556 (2012) (stating that any decision or recommendation of the
Comptroller General under “subchapter [31 USCS §§ 3551 et seq.] with respect to such
procurement or proposed procurement shall be considered to be part of the agency record subject
to review”). So too, consistent with Appendix C to the Court of Federal Claims Rules,
evaluation materials should be part of the AR in a post-award bid protest. RCFC App. C part
VII.

                                                6
The Parties’ Cross-Motions for Judgment on the AR

       Standard of Review for Bid Protests

        The Court evaluates bid protests pursuant to the Administrative Procedure Act’s standard
of review for an agency action. 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)). Therefore, this Court will not disturb an agency’s procurement decision
unless the Court finds that it was “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 5 U.S.C. § 706(2)(A) (2012); see Adams & Assocs. v. United States,
741 F.3d 102, 105-06 (Fed. Cir. 2014). An agency action is arbitrary and capricious when the
agency “‘entirely failed to consider an important aspect of the problem, offered an explanation
for its decision that runs counter to the evidence before the agency, or [the decision] is so
implausible that it could not be ascribed to a difference in view or the product of agency
expertise.’” Ceres Envtl. Servs., Inc. v. United States, 97 Fed. Cl. 277, 302 (2011) (alterations in
original) (quoting Ala. Aircraft Indus., Inc.—Birmingham v. United States, 586 F.3d 1372, 1375
(Fed. Cir. 2009)). An “agency must examine the relevant data and articulate a satisfactory
explanation for its action including a ‘rational connection between the facts found and the choice
made.’” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)
(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).

         Under Rule 52.1, the parties are limited to the AR, and the Court makes findings of fact
as if it were conducting a trial on a paper record. See Bannum, 404 F.3d at 1356-57. Looking to
the AR, the Court must determine whether a party has met its burden of proof based on the
evidence in the record. Id. at 1357. The Court may overturn an agency’s decision if “(1) the
procurement official’s decision lacked a rational basis; or (2) the procurement procedure
involved a violation of regulation or procedure.” Centech Group, Inc. v. United States, 554 F.3d
1029, 1037 (Fed. Cir. 2009) (quoting Impresa Construzioni, 238 F.3d at 1332).

      Plaintiff Failed to Establish a Violation of Statute or Regulation or Arbitrary and
Capricious Agency Action

         The challenged eligibility determination is akin to a responsibility determination, in that
both necessarily consider aspects of a potential awardee’s integrity and ethics. The purpose of
Mission Order 201.05 is to ensure that USAID funds do not end up in the hands of Prohibited
Parties, persons or entities linked to terrorist activities or other activities contrary to United
States national security or policy interests. In a similar vein, a responsibility determination seeks
to avoid awarding a Government contract to a party that cannot perform due to lack of integrity
or capability, poor business ethics, or financial or technical problems. See 48 C.F.R. 9.104-1
(2012). Both determinations are aimed at ensuring that only trustworthy and capable contractors
are deemed “responsible” or “eligible” to receive and perform Government contracts. Because of
the similar purposes of these contractor qualification requirements and the dearth of precedent on
eligibility determinations under USAID Mission Order 201.05, this Court will look to cases
reviewing responsibility determinations.

                                                 7
        Importantly, “[c]ontracting officers are ‘generally given wide discretion’ in making
responsibility determinations and in determining the amount of information that is required to
make a responsibility determination.” Impresa Construzioni, 238 F.3d at 1334-35 (quoting John
C. Grimberg Co. v. United States, 185 F.3d 1297, 1303 (Fed. Cir. 1999)); NCL Logistics Co.,
109 Fed. Cl. at 610; Afghan Am. Army Servs. Co. v. United States, 106 Fed. Cl. 714, 722
(2012). The Court “cannot substitute [its] judgment for that of the contracting officer in making
responsibility determinations.” Bender Shipbuilding & Repair Co. v. United States, 297 F.3d
1358, 1362 (Fed. Cir. 2002). “When such decisions have a rational basis and are supported by
the record, they will be upheld.” Id. Furthermore, judicial review is extremely deferential “in an
area at the intersection of national security, foreign policy, and administrative law.” See NCL
Logistics, Co., 109 Fed. Cl. at 627 (quoting Islamic Am. Relief Agency v. Gonzales, 477 F.3d
728, 734, (D.C. Cir. 2007)). Upon review of the classified AR, the Court concludes that the
Agency’s ineligibility determination of UBCC was rational and supported by the record.

        As the remainder of the Court’s opinion refers to classified material, it is contained in the
classified addendum. The classified addendum was filed on April 29, 2015, with a United States
Department of Justice Classified Information Security Officer. The classified addendum also
contains additional findings of fact.

                                                Conclusion

       The Court issues the following orders:

       1. Plaintiff’s motion to supplement the AR is DENIED.

         2. Defendant’s unopposed motion to amend the AR is GRANTED, and the Court adds
the following documents to the AR: the independent Government cost estimate, USAID’s price
analysis of initial proposals and final proposals, and the GAO decision dismissing Plaintiff’s
protest.

       3. Plaintiff’s motion for judgment on the AR and for injunctive relief is DENIED.

       4. Defendant’s motion for judgment on the AR is GRANTED.

       The Clerk is directed to enter judgment accordingly.

                                              s/Mary Ellen Coster Williams
                                              MARY ELLEN COSTER WILLIAMS
                                              Judge

                                                 8