Court Opinion

ID: 9370127
Source: CourtListenerOpinion
Date Created: 2023-02-10 21:01:18.275131+00
Date Added: 2024-06-11T17:16:19.635633
License: Public Domain

In the United States Court of Federal Claims
                                      No. 22-816C
                               Filed: November 30, 2022
               Redacted Version Issued for Publication: February 10, 20231

      * * * * * * * * * * * * * * * * **
    KOAM ENGINEERING SYSTEMS,
    INC.,                                     *
                                              *
                                              *
                       Protestor,
                                              *
    v.                                        *
    UNITED STATES,                            *
                                              *
                       Defendant,             *
                                              *
    v.
                                              *
    MCKEAN DEFENSE GROUP, LLC,                *
             Defendant-Intervenor.            *

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

     Richard Rector, DLA Piper, LLP, Washington, DC for protestor. With him were
Tom Daley and Leslie Edelstein, DLA Piper, LLP, Washington, DC.

      Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, DC, for defendant. With her were
William Grimaldi, Assistant Director, Commercial Litigation Branch; Patricia M.
McCarthy, Director, Commercial Litigation Branch, and Brian M. Boynton, Principal
Deputy Attorney General, Civil Division. Tracey Ferguson, Trial Attorney, Associate
Counsel Commercial Litigation Branch, Naval Information Warfare Center Pacific, of
counsel.

     Rebecca Pearson, Venable LLP, Washington, DC; for intervenor. With her were
J. Scott Hommer, III, Lindsay M. Reed, and Allison M. Siegel, Venable LLP,
Washington, DC.

1This Opinion was issued under seal on November 30, 2022. The parties were asked to
propose redactions prior to public release of the Opinion. This Opinion is issued with the
some of the redactions that the parties proposed in response to the court’s request. Words
which are redacted are reflected with the notation: “[redacted].”
                                      OPINION

HORN, J.

      In the above-captioned, post-award bid protest, protestor KOAM Engineering
Systems, Inc. (KOAM) challenges the decision by the United States Department of the
Navy to award a contract to defendant-intervenor, McKean Defendant Group, LLC
(McKean).2 Protestor KOAM alleges that the Navy failed to “meet its obligation to strictly
avoid even the appearance of a conflict of interest,” and that the Navy’s cost realism
evaluation of McKean’s proposal was arbitrary and capricious. The parties have briefed
cross-motions for judgment on the Administrative Record.

                             FINDINGS OF FACT

        On January 27, 2021, the Navy issued request for proposals No. N66001-21-R-
0041 (the RFP) for engineering support services for the Navy’s Network Integration
Engineering Facility (NIEF). KOAM was the incumbent contractor for the Navy on the prior
contracts. The RFP explained that “Naval Information Warfare Center – Pacific (NIWC
Pacific) is responsible for basic research, end-to-end system design, prototype
development, systems engineering, integration, production, software loading, Pre-
Installation Testing and Checkout (PITCO), deployment, and life cycle support of
Command, Control, Communications, Computer, Intelligence, Surveillance, and
Reconnaissance (C4ISR) systems.” The RFP contemplated an indefinite-delivery,
indefinite-quantity (IDIQ) single award contract with cost-plus-fixed-fee pricing
arrangement over a potential five year performance period, with one base year and four
one-year option periods. The RFP provided:

      (a) The contract resulting from this solicitation will be awarded to the
      responsible offeror whose offer conforming to the solicitation, is determined
      to provide the “best value” to the Government. Such offer may not
      necessarily be the proposal offering the lowest cost or receiving the highest
      technical rating.

      (b) Proposals will be rated using a four-step methodology. Step One is an
      evaluation of Acceptability of the Offer. Step Two is an evaluation of
      Capability (including Technical Approach, Past Performance, and Small
      Business Participation). Step Three is an evaluation of the proposed cost.
      Step Four is a cost/technical (non-cost evaluation factors) trade-off analysis
      in order to determine the best value source selection decision.

2 As noted in intervenor’s motion for judgment on the Administrative Record: “McKean
was indirectly acquired by Noblis Inc. on April 30, 2021, through Noblis Parent’s
acquisition of the equity in McKean Defense Group, LLC’s parent company and
subsequently renamed Noblis MSD, LLC.” The parties refer to intervenor as McKean in
their submissions in the above captioned protest. The court refers to intervenor as
McKean in this Opinion, but leaves quotations unchanged.

                                            2
       (c) Source Selection Factors.

       Non-Cost Evaluation Factors

       Factor I – Technical Approach

       Factor II – Past Performance

       Factor III – Small Business Participation

       Relative Importance of the Evaluation Factors

       (d) The non-cost evaluation factors, when combined, are significantly more
       important than cost. However, the degree of importance of cost will increase
       with the degree of the equality of proposals in terms of the non-cost
       evaluation factors.

       (e) Technical Approach is more important than Past Performance and Small
       Business Participation. Past Performance is more important than Small
       Business Participation.

       (f) Evaluation of an offeror’s proposal shall be based on the information
       presented in the proposal and information available to the contracting office
       from sources deemed appropriate. Sources typically considered include
       Defense Contract Audit Agency, Defense Contract Management
       Administration offices, other contracts with same firms for similar items or
       services, known commercial sources such as Data Resources, Inc.,
       Standard and Poor, etc. If the proposed contract requires the delivery of
       data, the quality of organization and writing reflected in the proposal will be
       considered an indication of the quality of organization and writing which
       would be prevalent in the proposed deliverable data. Subjective judgment
       on the part of the Government evaluators is implicit in the entire process.

(capitalization and emphasis in original).

      For Step One, the RFP explained, “[t]he Government will determine the
acceptability of each offer on a pass or fail basis,” and for Step Two, the RFP indicated
“the Government will evaluate the capability of each offeror on the basis of its: (I)
Technical Approach, (II) Past Performance, and (III) Small Business Participation.” For
“Factor I – Technical Approach,” the RFP explained that

       Considering the identified strengths and weaknesses, the SSEB [Source
       Selection Evaluation Board] will then assign an overall factor rating for
       technical approach. The factor rating is based on the collective
       effectiveness of the offeror’s technical approach in meeting the
       Government’s requirements in the SOW [Statement of Work] across all

                                             3
      submitted responses. Risk will not be evaluated as a separate factor, but
      will be evaluated as one aspect inherent in the evaluation of the Technical
      Approach. Technical Approach will receive one of the following combined
      technical/risk ratings: Outstanding, Good, Acceptable, Marginal, or
      Unacceptable.

(alterations added). For “Factor II – Past Performance,” the RFP indicated:

      The past performance evaluation is an assessment of the offeror’s
      probability of meeting the solicitation requirements. The past performance
      evaluation considers the offeror’s demonstrated recent and relevant record
      of performance in supplying products and services that meet the contract’s
      requirements. In accordance with FAR 15.305(a)(2), the currency and
      relevance of the information, source of the information, context of the data,
      and general trends in contractor’s performance shall be considered. These
      are combined to establish one performance confidence assessment rating
      for each offeror.

For “Factor III – Small Business Participation,” the RFP provided:

      The Government will evaluate the total percentage of small business
      participation. The inclusion of each subcontractor in the cost proposal shall
      serve as evidence that the prime contractor and subcontractor have entered
      into a business agreement; no further evidence of a business agreement is
      required. Only the portion of small business participation that is both listed
      in the matrix and substantiated by the cost proposal will be considered in
      the evaluation.

For Step Three, Cost, the RFP stated:

      The Government will evaluate the estimated cost and proposed fee of each
      offer for realism and reasonableness in accordance with FAR Subpart 15.4
      and as described below. The purpose of this evaluation will be (a) to verify
      the offeror's understanding of the requirements; (b) to assess the degree to
      which the cost/price proposal reflects the approaches and/or risk
      assessments made in the proposal as well as the risk that the offeror will
      provide the supplies or services for the offered prices/cost; and (c) assess
      the degree to which the cost reflected in the cost/price proposal accurately
      represents the work effort included in the proposal. Proposed costs may be
      adjusted, for purposes of evaluation, based upon the results of the cost
      realism evaluation. In a competitive environment, an offeror is incentivized
      to propose the lowest possible price; therefore, downward cost realist
      adjustments generally will not be made. When a cost realism analysis is
      performed, the resulting realistic cost estimate will be used in the evaluation.
      Cost realism analysis may be limited to those offerors whose proposals
      represent the most likely candidate(s) for award, based on the

                                             4
      Government’s technical evaluation and the offeror(s) proposed costs. In
      addition to easily identifiable cost adjustments, unrealistic cost proposals
      may result in a re-evaluation and concurrent rescoring of technical
      proposals. Such re-evaluation based on cost or realistic cost analysis could
      negatively impact the technical rating and ranking of the proposal.
      Depending on the number of offerors and the number and dollar amount of
      proposed subcontractors, the Government may choose to limit the extent of
      the cost realism analysis of offerors’ proposed subcontractor costs. In such
      instance, the Government will establish a threshold whereby individual
      subcontractor cost proposals that do not meet the threshold will not undergo
      a cost realism analysis. The threshold established by the Government may
      consist of a percentage of the prime contractor’s proposed costs, or a dollar
      amount, or a combination thereof. All offers with separately priced line items
      will be analyzed to determine if the prices are unbalanced. Offers may be
      rejected if the Contracting Officer determines the lack of balance poses an
      unacceptable risk to the Government.

Finally, for Step Four, the “Trade-Off Process,” the RFP explained:

      The contract resulting from this RFP will be awarded to the responsible
      offeror whose offer, conforming to the RFP, is determined to provide the
      best value to the Government, which may not necessarily be the proposal
      offering the lowest cost, nor receiving the highest technical rating. In order
      to select the winning offeror, the Government will compare all offerors under
      consideration for award by trading off the differences in the non-cost factors
      against the difference in most probable cost and proposed fee between the
      offerors, as follows:

      (a) If an offeror is better in terms of the non-cost factors and has the lower
      evaluated cost and proposed fee, then the Government will consider that
      offeror to be the better value.

      (b) If an offeror is better in terms of the non-cost factors but has the higher
      evaluated cost and proposed fee, then the Government will decide whether
      the differences in the non-cost factors are worth the difference in cost and
      fee. If the Government will consider the differences in the non-cost factors
      to be worth the difference in evaluated cost and proposed fee, then the
      Government will consider the offeror with the higher evaluated cost and
      proposed fee to be the better value. If not, then the Government will
      consider the offeror with the lower evaluated cost and proposed fee to be
      the better value.

      (c) The Government will continue to make comparisons among all offerors
      in this way until the Government has decided which offeror is the best value.

      The RFP also indicated that

                                            5
       [t]he Contract Specialist will be the sole evaluator for Acceptability of the
       Offer, Small Business Participation, and Cost. The Contract Specialist will
       not evaluate any other factors. Input from the SSEB Chairperson and other
       SSEB members may be solicited. Except for the Contract Specialist, the
       SSEB will not have access to cost proposals; however, with approval of the
       SSA, the Contract Specialist may disclose selected cost information as
       required (e.g., when technical analysis is necessary to make a realism or
       reasonableness determination).

(alteration added).

       The RFP further explained:

       The Contractor shall perform work at the contractor’s facilities and/or onsite
       at government facilities and on travel in support of designated activities.
       Because the NIWC Pacific Code 42150 leadership resides in San Diego,
       the majority of the production and PITCO/GAT support will be required to
       be supported within the NIWC Pacific (4301 Pacific Highway, San Diego,
       CA) Area of Responsibility (10 Miles). The majority of engineering support
       is expected to be off site at the contractor facility.

      Included with the Technical Approach Worksheet in the Source Selection Plan
were questions and answers:

       1.) What tools and techniques will you employ to manage Cost,
       Schedule, and Performance of the multiple projects and associated
       C4ISR     [Command,       Control,  Communications,    Computers,
       Intelligence, Surveillance and Reconnaissance] Task Orders that will
       be accomplished during the execution of this contract?

       The written technical approach should address but is not limited to
       discussion     of    applications    and     or   existing     company
       policies/procedures that will enable you to track and report financials,
       such as funds received, funds expended, and funds remaining at the
       CLIN [Contract Line Item Number] level within Task Orders and for the
       contract as a whole. Describe your approach for tracking and
       reporting the status of deliverables and all milestones to achieve
       timely distribution of deliverables? What system(s) will you employ to
       track and report risks and issues that need to be addressed in order
       to minimize delays to scheduled deliveries?

       2.) What tools and techniques will you use to manage the inventory,
       tracking, and reporting of C4ISR materials that will be moving between
       the different functional areas and physical locations within the NIEF?

                                             6
       The written technical approach should address but is not limited to
       the discussion of applications and or existing company
       policies/procedures that will enable you, in real time, to track and
       report receipt, storage and movement of all material in the
       possession of the NIEF. This would include the receipt and storage
       in the warehouse facility that is cataloged and auditable at any time
       to ensure accountability. This also includes means of tracking
       material as it is removed from the warehouse and delivered to a
       different physical functional area such as the Quality Assurance area
       or the Production floor.

       3.) Question: What tools and techniques will you use for management
       and completion of C4ISR engineering projects from Requirements to
       Delivery, for the development of Engineering Development Model
       (EDM) / First Article System (FAS), and execution of Environmental
       Qualifications Testing (EQT)?

       The written technical approach should address but is not limited to
       the discussion of applications and or existing company
       policies/procedures that allow you to organize, develop and document
       the processes required to deliver an EDM or First Article. Identify and
       describe the System Engineering Plan that you intend to implement to
       manage the above and keep track of milestones throughout the
       process. Identify the milestone achievements/reviews you plan to
       monitor in the lifecycle of the Systems Engineering Technical Review
       (SETR) process. Provide a detailed approach to how you will execute
       Environmental Qualifications Testing.

       4.) Question: What tools and techniques will you use to properly
       execute Pre-Installation Check-out and Operational (PITCO) Testing
       and Government Acceptance Testing (GAT) as well as Factory
       Acceptance Testing (FAT) for C4ISR systems and components that are
       received or developed by the NIEF?

       The written technical approach should address but is not limited to
       the discussion of applications and or existing company
       policies/procedures that allow you to organize, execute, track and
       document the successful completion of PITCO testing and GAT/FAT
       requirements. Describe your approach and the sequence in which you
       plan to perform these tests and report status and percentage of
       completion. What is your approach for tracking discrepancies and the
       ability to correct these discrepancies if required?

(capitalization and emphasis in original; alterations added).

                                             7
      In response to the RFP, only KOAM and McKean submitted proposals on February
26, 2021. During the evaluation process, the Navy contacted McKean to clarify its
proposal and asked:

         In order to complete our cost realism analysis additional clarification is
         required. The subject RFP states some of the work is required to be
         performed in the San Diego, CA area. In order to complete our cost realism
         analysis using the actual rates submitted in your cost proposal, we need
         you to clarify for each of the named individuals, where the work was
         performed for the rates submitted.

McKean subsequently submitted the requested information.

      As indicated in the Source Selection Authority’s August 23, 2021 Business
Clearance Memorandum:

         Recommend approval to award a single IDIQ contract to McKean under
         solicitation N66001-21-R-0041 as a five (5) year contract valued at
         $187,467,409.92. Based on the analysis herein, McKean’s proposal
         represents the best value to the Government. Recommend award be made
         based on initial offers. The solicitation included FAR provision 52.215-1,
         which notified potential offerors, “the Government intends to evaluate
         proposals and award a contract without discussions with offerors.”

         A summary of Best Value Ranking and Most Probable Costs are as follows:

 Best       Offeror   Acceptability   Factor I    Factor II Past   Factor III      Proposed Cost     Probable Cost
 Value                                Technical   Performance      Small
 Rank                                 Approach                     Business
                                                                   Participation
 1          McKean    Acceptable      Good        Satisfactory     Good            $187,467,409.92   $195,045,486.39
                                                  Confidence
 2          KES       Acceptable      Good        Satisfactory     Outstanding     $204,870,045.22   $204,870,045.22
                                                  Confidence

         Regarding McKean’s cost proposal, the Source Selection Authority noted:

         McKean combined with their subcontractors proposed all hours and
         overtime hours in accordance with the RFP. McKean proposed prime hours
         on 69% of the overall level of effort in terms of hours. McKean proposed on
         a CPFF [Cost Plus Fixed Fee] basis. According to DCAA Audit Report No.
         6151-2015T17741001 dated 6 February 2015, McKean’s accounting
         system was found adequate. Therefore, McKean’s accounting system is
         considered suitable for a cost reimbursement contract. Based on the
         analysis below, McKean’s proposed costs were found to be 3.89% or
         $7,578,076.48 below the realistic cost; therefore, a cost realism adjustment

                                                   8
      was made and McKean’s cost was realized up from $187,467,409.92 to
      $195,045,486.39.

      (i). Prime Direct Labor.
      McKean proposed direct labor rates for 28 labor categories with a list of
      rates for 128 employees. McKean’s direct labor rates were developed by
      using the actual salaries for the proposed current McKean employees or the
      contingent salaries (three employees) for the proposed contingent McKean
      employees, in which signed Letters of Intent were provided. Although
      McKean’s rates were substantiated with corresponding employee payroll
      information, clarifications revealed not all of the payroll information provided
      was for work within San Diego. Twenty of the 128 proposed rates were
      based on actual labor rates for named individuals whose labor rate were
      substantiated by payroll records and whose place of performance of work
      was San Diego, CA, were deemed realistic and reasonable and are shown
      in averages in the first table below. The rates for 108 of the 128 rates
      proposed by McKean were based on work performed outside of San Diego.
      24 of the 108 non-San Diego based rates were found to be equal or above
      the average San Diego Rates identified in the San Diego Rates Utilized for
      Cost Realism Analysis Table on page 24 and no cost realism adjustment
      was made. However, 84 of the 108 non-San Diego based rates for
      individuals in the remaining 21 labor categories were lower than the San
      Diego Rates Utilized for Cost Realism Analysis Table on page 24. The direct
      labor rates for these 84 employees were realized up accordingly to the San
      Diego Rates identified in the San Diego Rates Utilized for Cost Realism
      Analysis Table on page 24, as shown in the second table below. The tables
      below includes direct labor rates proposed per labor category for the base
      year, which were escalated by [redacted]% year over year for the option
      years. Proposed overtime hours for exempt and non-exempt employees
      were reviewed and found to be realistic. Overtime rates for non-exempt
      employees working as Junior Configuration Management Specialist, Senior
      Material      Specialist,     Material    Specialist,      Technical      Typist,
      Warehouse/Forklift Operator, and Assembler Electronic/Electrical were
      proposed [redacted]. Overtime rates for the remaining labor categories
      proposed were for exempt individuals that were proposed [redacted]. Based
      on the rationale above, McKean’s direct labor rates were realized up
      accordingly.

(alteration added). Regarding KOAM’s cost proposal, the Source Selection Authority
stated:

      KES combined with their subcontractors proposed all hours and overtime
      hours in accordance with the RFP. KES proposed prime hours on 84.5% of
      the overall level of effort in terms of hours. KES proposed on a CPFF basis.
      The DCMA administrative contracting officer (ACO) sent a final
      determination letter, which formally approved KES’ accounting system

                                             9
      based on a post award review of KES accounting system documented in
      DCAA Audit Report No. 4151-2020C17741003 on 12 August 2020.
      Therefore, the KES’s accounting system is considered suitable for a cost
      reimbursement contract. Based on the analysis below KES’s proposed
      costs were found to be realistic; therefore, no cost realism adjustment was
      made.

      (i). Prime Direct Labor.
      KES proposed direct labor rates for 30 labor categories with a list of rates
      for 160 employees. KES’ direct labor rates were developed for most labor
      categories and hours using named individuals currently supporting the
      existing NIEF requirement. All of KES rates for named individuals were
      substantiated with corresponding employee payroll information for work
      performed in San Diego. According to KES’ proposal, “labor categories that
      KES did not have enough named individuals to support the number of hours
      in a labor category, KES utilized labor category averages based on named
      individuals of in their proposal in those respective labor categories. KES
      utilized an ERI rate for one labor category.” This method to use the average
      rate of named individuals for work performed in San Diego or ERI was
      determined reasonable.

      The Source Selection Authority conducted a trade-off analysis explained that

      McKean and KES[3] received the same rating for the most important non-
      cost factor, Factor I – Technical Approach, as they each received Good
      ratings for demonstrating a thorough approach and understanding of the
      requirements. KES’ received twenty-eight (28) strengths, and thirteen (13)
      weaknesses, and McKean received three (3) significant strengths, nineteen
      (19) strengths and eight (8) weaknesses. Neither KES nor McKean received
      any significant weaknesses.

(footnote added). The Source Selection Authority concluded, regarding Factor I “[o]verall,
the Government did not find any trade-off appropriate with regard to Technical Approach
based upon the various significant strengths, strengths and weakness assigned to KES
and McKean as described above,” and “[t]aken as a whole, both offerors demonstrated a
thorough technical approach, and there was no trade-off warranted.” The Source
Selection Authority continued:

      Based on the past performance evaluation, the Government has a
      reasonable expectation that either offeror will successfully perform the
3 The Navy’s evaluation documents, and other documents in the Administrative Record
refer to KOAM as “KES.” Most of the filings in the above captioned protest refer to
protestor as “KOAM.” The court refers to protestor as KOAM unless quoting directly from
the Administrative Record.

                                           10
required effort. The Government did not find any trade-off appropriate with
regard to Past Performance. Although McKean’s past performance was
less relevant, it had higher quality ratings that were supported by comments
in the CPARS [Contractor Performance Assessment Reporting System].
The higher quality gave the Government reasonable confidence that
McKean will be able to perform even though the references were less
relevant. While KES’ Past Performance was very relevant, the
quality/success ratings were lower. While the Government has reasonable
confidence that KES can perform, the confidence is decreased by the
continuing issues with performance for the most relevant work. Overall,
while different in terms of the underlying relevance and quality ratings, the
Government’s confidence is similar with both, and did not find any trade-off
appropriate for past performance.

McKean and KES were very close in the least important non-cost factor,
Factor III - Small Business Participation, as McKean was rated Good for
indicating a thorough approach and understanding and KES was rated
Outstanding for indicating an exceptional approach and understanding of
the small business objectives. Although, McKean received a slightly lower
rating than KES in Small Business Participation, McKean was only half a
percent away from being assessed as Outstanding. Meanwhile KES, as a
small business, received an Outstanding rating, as they easily met the 20%
threshold needed to obtain an Outstanding rating in Small Business
Participation by proposing to perform about 82% of the work in house as
the prime contractor.

In terms of cost, McKean’s proposed cost were adjusted during the cost
realism analysis. KES’ proposed realistic direct and indirect cost that were
compared to company payrolls, and indirect rate information provided by
DCAA and DCMA, and were not adjusted during the cost realism analysis.
McKean’s probable cost of $195,045,486.39 was 4.80% or $9,824,558.83
lower than KES’ probable cost of $204,870,045.22.

With regard to Small Business Participation, KES demonstrated an
outstanding use of small business with 82% small business utilization.
McKean also demonstrated a very high Small Business utilization of
19.47%, which is just below the outstanding level as well. There is a benefit
to KES’ higher small business utilization, but Small Business is the least
important non-cost factor. In terms of trade-off the Government finds that
KES’ better Small Business Utilization does not warrant a premium of 4.80%
or $9,824,558.83.

KES did receive a higher rating in small business participation; however,
McKean was a fraction of a percent from matching KES rating of
Outstanding for small business participation. Consistent with M-2 of the
solicitation, “If the Government will consider the differences in the non-cost

                                     11
      factors to be worth the difference in evaluated cost and proposed fee, then
      the Government will consider the offeror with the higher evaluated cost and
      proposed fee to be the better value. If not, then the Government will
      consider the offeror with the lower evaluated cost and proposed fee to be
      the better value.” The differences between KES’ and McKean’s non-cost
      factors were not enough to overcome the difference between the evaluated
      costs, where McKean’s evaluated cost was 4.80% or $9,824,558.83 lower
      than KES.

      Based on the rationale above, McKean was evaluated as the best value
      contractor after consideration of both cost and non-cost factors.

      Source Selection: I, Sharon Pritchard, the Source Selection Authority for
      this procurement, have independently reviewed all SSEB evaluations
      provided herein. As a result of such review, I have determined McKean’s
      proposal represents the best value to the Government and, therefore,
      McKean to be the awardee.

Therefore, on August 21, 2021, the Navy awarded a contract to McKean.

       After the Navy provided an Unsuccessful Offeror Notice to KOAM, KOAM
requested a debriefing and provided the Navy with a list of 55 debriefing questions,
including: “Freddie Saucedo, a member of McKean’s senior management staff, is married
to a NIWC PAC contracting officer’s representative on KES’ existing contract, and the
contracting officer’s representative has access to KES’ proprietary cost data. What
actions did the Government take to address this issue and ensure the integrity of the
procurement?” On September 2, 2021, the Navy provided KOAM with a written debriefing.

      After the debriefing, on September 14, 2021, KOAM filed a protest at the United
States Government Accountability Office (GAO) alleging, among other issues, that “the
Navy’s decision to award the contract to McKean (the only other offeror) is flawed and
deeply concerning because McKean has proposed labor costs so low that McKean will
be unable to provide contractor personnel at the Navy’s facilities in the San Diego area,
as required,” and alleging “the Navy’s apparent failure to address an appearance of
impropriety concerning a familial relationship between a McKean executive and one of
the Contracting Officer’s Representatives (‘CORs’) on the incumbent contract.” In
response to the protest, on September 27, 2021, the Navy informed the GAO that, “[a]fter
reviewing the subject protest, the Agency will undertake corrective action” and
represented to the GAO that “the Agency will conduct an investigation into a possible
organizational conflict of interest, and possible personal conflict of interest. After
completing both steps, the Agency will make a new source selection decision, as
appropriate.” On September 30, 2021, the GAO dismissed KOAM’s protest.

       Upon the dismissal of the GAO protest, the Navy undertook an investigation into
the conflict of interest issue raised by KOAM. In defendant’s cross-motion for judgment
on the Administrative Record, defendant represents: “Upon being notified of the potential

                                           12
personal conflict of interest, the Navy immediately began its investigation of the apparent
personal conflict of interest before GAO even dismissed KOAM’s first protest,” which is
reflected in an exchange of emails between the contract specialist, Johannes Cardenas,
and Ms. Saucedo, sent on September 20, 2021 and September 21, 2021. The email
below includes the questions asked by Contract Specialist Cardenas and the answers
provided by Ms. Saucedo and is presented in full:

      Good afternoon,

      Please note, due to the confidentiality of the contents within: This e-mail
      message, including any attachments, is for the sole use of the intended
      recipients and may contain confidential and privileged information. Any
      unauthorized review, use, disclosure or distribution is prohibited.

      PLEASE DO NOT FORWARD OR DISCUSS THE CONTENTS OF THIS
      EMAIL WITH ANYONE BESIDES THE CONTRACTS AND LEGAL TEAM,
      WHICH CONSIST OF NORMAN JULIEN, JOHANNES CARDENAS, AND
      TRACEY FERGUSON[4] WITHOUT THE EXPRESS WRITTEN
      PERMISSION OF SENDER. THIS EMAIL CONTAINS QUESTIONS THAT
      REQUIRE A RESPONSE BY COB TOMORROW, 21 SEPTEMBER 2021.
      IF FOR ANY REASON, YOU ARE UNABLE TO ANSWER THE
      QUESTIONS BE THE DEADLINE, PLEASE LET ME KNOW
      IMMEDIATELY AND PROVIDE A REASON WHY.

      NIWC Pacific received a post award protest in response to the recent award
      of the NIEF Engineering contract that resulted from solicitation N66001-21-
      0041. The unsuccessful offeror presented the following argument:

      The Navy Failed To Reasonably Consider A Conflict And Appearance of
      Impropriety Concerning A COR On The Incumbent Contract….a COR for
      the incumbent contract, Ms. Jaime Saucedo, is married to a McKean
      executive (Mr. Freddie Saucedo). As a COR for the incumbent contract, Ms.
      Saucedo may have participated personally and substantially in the subject
      procurement and, even if she did not, still had access to KES’s cost
      information and cost proposals under the incumbent contract. Because Ms.
      Saucedo’s marriage to a McKean executive creates a conflict of interest and
      an appearance of a potential impropriety.

4 Norman Julien was the contracting officer for the procurement at issue in the above
captioned bid protest and the author of the personal conflict of interest memorandum.
Johannes Cardenas was the contract specialist for the procurement at issue and was the
author of the email sent to Ms. Saucedo on September 20, 2021. Tracey Ferguson was
an attorney with the Naval Information Warfare Center Pacific and is of counsel in the in
the above captioned bid protest.

                                            13
I’m reaching out to you to assist the contracting officer in the investigation
of whether an OCI was present during the preparation for or during the
evaluation of the NIEF Engineering requirement, solicitation N6001-21-R-
0041.

The question we are seeking to address is whether McKean had an
“unequal access to information OCI” via information that may have been
shared between a COR on the current NIEF Engineering contract N66001-
18-D-0075 held by KES, and whom the protest documents refer to as the
COR’s husband and also a McKean executive.

“An ‘unequal access to information’ OCI arises where ‘a firm has access to
nonpublic information as part of its performance of a government contract
and where that information may provide the firm a competitive advantage in
a later competition for a government contract.’ In such cases, the primary
concern is minimizing the risk that a firm will gain an unfair competitive
advantage over other offerors. The FAR contemplates that an OCI may
arise from access to proprietary information and source selection
information” (Conflict and Intrigue in Government Contracts: A Guide to
Identifying and Mitigating Organizational Conflicts of Interest; Public
Contract Law Journal; Volume 35, No. 4; Summer 2006).

In order to validate whether an “unequal access to information OCI” may
have existed, it’s important that the contracting officer receives answers to
several questions. Please review and provide your response to the following
questions, and return to the following members of the contracts and legal
team:
(norman.p.julien.civ@us.navy.mil), (johannes.t.cardenas.civ@us.navy.mil),
and (tracey.l.ferguson3.civ@us.navy.mil).

1) What is your job?

I [Ms. Saucedo] am a project manager and COR [Contracting Officer
Representative] for several programs at the NIEF.

2) What are your duties?

Develop task orders based on sponsor requirements, oversee task orders,
and other COR duties.

3) What role do you have in relation to the NIEF Engineering contract?

N6001-18-D-0075, my role is project manager and COR of multiple projects.

                                     14
      4) How long, how much of your job/work is as a COR and how much as a
      COR for NIEF?

      I have been at NWIC PAC since 2012 and have worked at the NIEF since
      5 April 2018. I have been a COR my entire time at the NIEF.

      5) Who is your Supervisor, Branch head, and Division Head?

      [redacted] was my branch head up through July 2021 – [redacted] and
      [redacted] are currently acting branch heads.

      6) Which contracting officers do you work with?

      Marianito "Nito" Rosal is the KO and Bennett McDonald is the CS.

      7) What KES[5] non-public information did you have access to in the past
      year? (Examples would include access to proposals containing labor rates,
      indirect rates, etc.)

      As a COR on this contract I have had access to task order proposals which
      include all financial data (labor rates, indirect rate, ect) [sic]

      8) Did you have ANY input into drafting the requirements, IGCE, CDRLS,
      solicitation, etc. for the NIEF engineering requirement that became RFP
      N6001-21-R-0041?

      I did not have any input in drafting the requirements for RFP N6001-21-R-
      0041, nor have I had any access to the solicitation package.

      9) Did you have any other role/discussion/access to anything related to the
      requirements, development of the RFP/solicitation, evaluation, IGCE, etc.

      No, I did not have any role in anything related to RFP N6001-21-R-0041.

      10) Did you participate at all in the evaluation process?

      No, I was not involved in the evaluation process of RFP N6001-21-R-0041.

      11) Are you married or in a close personal relationship? To whom? For how
      long?

      I am married to Alfredo Saucedo and have been for 8 years.

      12) How long have you known Mr. Freddie Saucedo? Do you live together?
5Ms. Saucedo and Contract Specialist Cardenas both refer to KOAM as KES in the email
exchange.

                                           15
I have known Alfredo Saucedo for 13 years, we have lived together for 10
years.

13) Was Mr. Saucedo ever a government employee?

Mr. Saucedo served in the Navy, but has never been a federal employee.

14) Do you work with Mr. Saucedo? On what types of things?

No, I do not currently work with Mr. Saucedo on any projects.

15) Did you ever discuss your work as a COR on the KES contract with Mr.
Saucedo? How often? What types of things concerning the contract were
discussed?

The only thing I have discussed with Mr. Saucedo regarding my work at the
NIEF is high level project details, never have discussed my role as COR or
the details of that work.

16) What non-public information, if any, did you share with Mr. Saucedo and
when? For example, did you ever discuss labor rates such as pay between
KES and McKean?

I have never discussed any labor rates or any other financial contract
information with Mr. Saucedo.

17) Have you worked from home? If so, for how long, how often, etc.?

I have been working full time from home due to the COVID 19 Pandemic.

18) Are you in the same household? If the answer to question is yes, To
your knowledge, did he ever have access to any information provided by
KES to the Government? Is it possible that he may have had access to
information provided by KES without your knowledge via access to
documents, emails, or your government computer?

Yes, we are married and live in the same household. My government
computer requires a CAC [Common Access Card] to log in and Mr. Saucedo
does not have access to my computer. We have to separate offices in our
home and I always close the door when I have any discussions on the
phone regarding anything related to my COR duties.

19) Did you ever discuss Mr. Saucedo’s job with your co-workers? Who,
when and how often?

                                    16
I haven’t discussed his job with co-workers, however, co-workers know he
works for Cabrillo. In his current role, he does work with the NIEF on
projects, not any projects I am responsible for.

20) Do you know any of Mr. Saucedo’s co-workers? If so who, how well,
how much contact?

I know several of Mr. Saucedo’s co-workers, many of them I have worked
with before on previous projects. I do have a close personal relationship
with [redacted], however, have not had any real contact with her over the
past year and a half, just some texting, but nothing about work.

21) Did you ever discuss your work with Mr. Saucedo’s co-workers as a
COR, or anything about KES?

I do not discuss anything that is contract sensitive with anyone, I understand
it is unethical for me to divulged any financial data – IGCE’s, Labor Rates,
Cost Proposals – none of this is ever discussed expect with other CORs of
the contract. I also do not discuss KES with anyone, but other CORs on the
contract.

22) Were you aware that Mr. Saucedo’s company was competing for the
NEIF Engineering contract? If so, when did you find out? How or from whom
did you find out?

I did know the company was developing a proposal for this contract, Mr.
Saucedo told me. I am not sure when the contract actually went out for
bidding but I knew before the proposal was submitted. Other than knowing
they were developing a proposal, we did not have any other discussion
about the contract.

23) If known, when did Mr. Saucedo find out that his company had proposed
on the NIEF Engineering contract? Did Mr. Saucedo know he was named
in the proposal for the NIEF Engineering contract?

I am not exactly sure when Mr. Saucedo new [sic] his company was bidding
on the NIEF engineering contract. It is my understanding he knew he was
named in the proposal.

24) Did you ever share concerns about your role as a COR in conjunction
with Mr. Saucedo’s job at McKean with anyone at work? With the KO? Your
supervisor? A Coworker?

My supervisor and IPT [Integrated Product Team] lead both know that Mr.
Saucedo works for Cabrillo. When McKean won the contract, we did discuss

                                     17
       that my role as COR would have to end and I would need to have another
       role within the NIEF.

       25) If there were concerns, did you tell anyone within NIWC PAC about a
       potential OCI [Organizational Conflict of Interest]?

       I really didn’t have huge concerns as I was completely excluded from the
       entire contract development and selection process. I did not read the PWS
       or have any input into the package at all. I am not even aware of how many
       companies submitted proposals.

(capitalization and first alteration in original; footnote added).

      On October 21, 2021, counsel for KOAM, and protestor’s counsel of record in the
above captioned protest, sent the Navy a letter, which stated in part:

       Following the dismissal of the [GAO] protest as academic, KES learned that
       Ms. Saucedo has communicated with her husband in the past about
       ongoing Navy programs in which McKean was involved. Specifically, KES
       has been advised that, in multiple meetings in the past, NIEF government
       project leads have discussed problems and concerns regarding the Military
       Sealift Command (“MSC”) program office, on which McKean and Mr.
       Saucedo provide contract support to PMW 160. When the NIEF MSC
       government project lead expressed frustration with the MSC program and
       its effects on the NIEF during weekly meetings of government project leads,
       Ms. Saucedo has spoken up to defend the MSC program based on
       information she has learned from her husband. In other words, Ms. Saucedo
       clearly has information about McKean and her husband’s work on the MSC
       program that is unrelated to her role at the NIEF, and she has shared that
       information with NIEF officials in the past in a way that has been helpful to
       McKean. Although this may not, in and of itself, constitute improper
       behavior, it does demonstrate that Mr. and Ms. Saucedo discuss details of
       their work for the Navy and share certain program-related information. Thus,
       it supports the concern about an appearance of impropriety, so we felt
       compelled to relay the information to you.

      Both Ms. Saucedo and Mr. Saucedo subsequently provided sworn declarations.
Mr. Saucedo’s declaration, executed on February 12, 2022, stated in full:

       I, Alfredo “Freddy” Saucedo, Senior Systems Engineer for Noblis MSD, LLC
       declare:

       1. I am over the age of twenty-one and have personal knowledge of all
       representations contained herein.

                                              18
2. I am a Senior Systems Engineer for Noblis MSD, LLC, formerly McKean
Defense Group, LLC (“McKean”) (collectively "Noblis") on mechanical
engineering and system development and networks. I have served in this
role since 2014. I am responsible for providing direct technical support to
the Other Costumer Funds (“OCF”) Assistant Program Manager (“APM”),
and the Technical Design Agents (“TDA”) on all matters related to
production engineering, systems engineering, design, and shipboard
installation. My tasking requires me to collaborate with Program off ice
government leads, Network Integration and Engineering Facility (“NIEF”)
Government project lead(s), NIEF production integrators, Shipboard
installers, project leads and engineers (U.S. Government and contractors).
My current support role is limited to projects under the OCFs umbrella.

3. I, Inc. ( “KES” or “Protester”), at the U.S. Government Accountability
Office, docketed as File No. B-42157, challenging the evaluation and award
of a contract by the United States Department of the Navy, Naval
Information Warfare Systems Center Pacific (the “Navy” or “Agency”) to
Noblis under Solicitation No. N6600121R0041 (“RFP” or “Solicitation”). I
have reviewed the redacted version of the Protest filed by KES.

4. As KES described in its protest, the Solicitation at issue provides:

       the Navy with program management, basic research, end-to-
       end system design, prototype development, systems
       engineering, integration, environmental qualification testing
       (“EQT”) , production, software loading, pre-installation testing
       and checkout ( “PITCO”), deployment, and life cycle support
       of Command, Control, Communications, Computer,
       Intelligence, Surveillance, and Reconnaissance (C4ISR)
       systems for the NIWC Pacific Network Integration
       Engineering Facility (“NIEF”) .

Redacted Protest at 4.

5. In its protest, KES alleged that I was an “executive” of McKean Defense
Group, LLC and that my relationship with my wife, who is a Contracting
Officer's Representative (“COR”) on KES's incumbent contract, creates an
"appearance of potential impropriety." Redacted Protest at 28.

6. I have never served as an executive of McKean Defense Group, LLC or
Noblis. Instead, I am a Senior Systems Engineer. In its proposal in response
to the Solicitation, Noblis proposed me in a key personnel role as Senior
Systems Engineer.

7. My wife, Jaime Saucedo, serves as the COR administering the incumbent
contract for this effort, which is currently being performed by KES at the

                                     19
Naval Information Warfare Systems Center Pacific, NIEF. My wife also
serves as a Project Lead at NIEF. She and I do not work on the same
projects.

8. My wife and I do not discuss her management of contracts. Accordingly,
I am not aware of my wife's specific duties as a COR regarding
administration of KES's incumbent contract. I do know that she has never
shared with me any proprietary or sensitive information of a contractor that
she oversees, including KES.

Access to or Knowledge of KES’s Proposal

9. KES’s protest alleges that “[a]s a COR for the incumbent contract,
[redacted], [she] may have participated personally and substantially in the
subject procurement . . .” That allegation is incorrect. Redacted Protest at
28. My wife and I do not discuss her role, if any, in the evaluation of
proposals or award decision resulting in a contract being awarded to Noblis
under the current Solicitation.

10. I have never had access to, viewed, nor possessed any portion of or
information regarding KES’s proposal for the NIEF contract at any time,
either under the incumbent effort or the proposal KES submitted under
current Solicitation for this effort.

11. My wife and I have not discussed KES’s proposal under the current
Solicitation. To the best of my knowledge, my wife is not involved in the
protested procurement and I am not aware that she has access to KES's
proposal or the evaluation thereof. Nor have I ever received or been told
any information regarding KES’s price or costs under KES’s incumbent
contract by my wife.

Access to Jaime Saucedo’s Work Files

12. I have never accessed my wife's Navy computer or work files at any
time.

13. While we both work from home, especially since the pandemic, we both
maintain separate offices. My wife has her own office where she keeps her
work computer. She accesses her files electronically from her work
computer through the Navy/Marine Corps Intranet (“NMCI”) system which
requires multi-factor authentication to confirm her identity. To my
knowledge, her Navy computer remains locked when she is not using it.

14. I cannot and have not ever accessed any of her work files, including any
files related in any way to KES’s incumbent contract or proposal submitted
in response to the Solicitation.

                                    20
       15. I do not possess any of her passwords or credentials for her Navy
       computer, databases, files, etc.

       Involvement in Noblis' Proposal Submission

       16. In the Summer of 2021, I provided input on discrete technical matters
       during the drafting of McKean Defense’s (now Noblis) technical proposal
       submitted in response to the Solicitation. Specifically, I provided early input
       regarding rack configuration and installation technical drawings, system
       development, and installation processes given my expertise as a production
       engineer. While the inputs I provided on such technical matters were used
       to draft portions of Noblis’ technical proposal, I did not myself draft the final
       technical section of the proposal, nor did I review the technical proposal
       before submission.

       17. I was never contacted or asked to provide any input whatsoever on
       Noblis’ cost/price proposal submitted in response to the Solicitation, nor did
       I ever provide any input on the cost/price proposal whatsoever. I neither
       viewed nor had access to Noblis’ cost/price proposal or any cost details
       used as inputs for that cost/price proposal prior to submission. In fact, to
       this day I have never seen the details of this cost/price proposal.

       18. I was not involved in any way in Noblis’ decision to compete under the
       Solicitation.

       Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
       foregoing is true and correct.

(capitalization, emphasis and alterations in original; footnote omitted).

       Ms. Saucedo’s declaration, executed on February 23, 2022, stated in full:

       I, JAIME SAUCEDO, declare:

       1. I am currently the Project Manager and Contracting Officer
       Representative (COR) for several programs at the Network Integration
       Engineering Facility (NIEF) at the Naval Information Warfare Center Pacific
       (NIWC PAC). I began this position in April of 2018. Prior to this position, I
       worked as a COR for one year for another project. I have worked for the
       federal government since December 2012.

       2. In my position as the NIEF Engineering COR for Contract N66001-18-D-
       0075, I am responsible for developing task orders based on sponsor
       requirements, overseeing task orders, and other COR assigned duties. I am
       and have been a COR on other contracts at the NIEF, Production MAC

                                              21
N66001-16-D-032033, SAIC (Science Applications                   International
Corporation) and SERCO INC are the primes.

3. Until July 2021, my first-line supervisor was Branch Head [redacted].
Currently, I am supervised by [redacted].

4. During my tenure as the COR on N66001-18-D-0075, I only worked on
one PMW-160 project which was short term. I do not recall attending a
government or government/contractor meeting wherein I discussed Military
Sealift Command NIEF related efforts.

5. As a COR on contract N66001-18-D-0075, I have access to task order
proposals, which include financial data, such as, labor rates, indirect rates,
etc….

6. I did not have any involvement in drafting the requirements for Request
for Proposal (RFP) N66001-21-R-0041, nor did I have access to the
solicitation package. I did not have any role/involvement or have any
discussion/access to information related to the requirements, development
of the RFP/solicitation, Independent Government Cost Estimate (IGCE),
acquisition strategy, development of source selection criteria, evaluation of
proposals or the award decision.

7. I have been married to Alfredo Saucedo for 8 years. Alfredo Saucedo is
employed by Noblis as an engineer. Mr. Saucedo served in the Navy, but
has never been a federal employee. I do not currently work with Mr.
Saucedo on any projects.

8. I have never discussed my role as COR or the details of that work with
my husband. I have never disclosed any third party proprietary information,
like KES or its subcontractors’ labor rates, or any other financial or contract
information with Mr. Saucedo. The only thing I have discussed with Mr.
Saucedo regarding my work at the NIEF is very high-level project details.

9. I have been working full time from home due to the COVID 19 Pandemic.
Mr. Saucedo and I are married and share the same household. We have
two separate offices in our home and I always close the door when I have
any discussions on the phone regarding anything related to my COR duties.
My government computer requires a CAC to log in and Mr. Saucedo does
not have access to my computer. I do not have a government cell phone. I
do not scan or print any documentation in my home office. I do not have a
hard copy material in home office other than hand written notes for my own
tasking that did not include third party proprietary or source selection
sensitive information. When I am not in front of my computer, the CAC is in
a secure location.

                                      22
       10. I know several of Mr. Saucedo’s co-workers, many of them I have
       worked with before on previous projects. I have a close personal
       relationship with [redacted]; however, I have not had real contact with her
       over the past year and a half, just some texting, but nothing work related.

       11. I only disclose nonpublic information to include proprietary or source
       selection sensitive information to government employees with a need to
       know. I fully understand my ethical and legal obligations regarding use,
       disclosure and safeguarding nonpublic information I have access to at work
       to include the requirements to not disclosure any financial data, such as
       IGCEs, Labor Rates, Cost Proposals, etc. I maintain an annual OGE 450
       on file wherein I disclose my husband’s employment.

       12. I was aware that Mr. Saucedo’s company was developing a proposal
       for the NIEF Engineering contract because Mr. Saucedo told me. I am not
       sure when the contract actually went out for bidding but I knew before the
       proposal was submitted. Other than knowing they were developing a
       proposal, we did not have any other discussion about the RFP or contract.
       I did not know that Mr. Saucedo was listed as key personnel on the contract.

       Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
       foregoing is true and correct.

(capitalization and alteration in original).

        After completing the investigation, on February 24, 2022, the contracting officer
issued a “Personal Conflict of Interest Memorandum,” which include the correspondence
and declarations quoted above. The contracting officer determined that “[t]here is no
evidence that Ms. Saucedo participated personally and substantially in the Procurement.”
(alteration added). The contracting officer noted:

       The PCI [Personal Conflict of Interest] investigation confirmed from multiple
       sources including the written interviews of [redacted] (NIEF Branch Head
       and SSEB Chair), [redacted] (NIEF IPT Lead/Program Manager and initial
       SSEB Chair), the other SSEB members, and Ms. Saucedo (one of several
       CORs on KES’ NIEF contract, N66001-18-D-0075) that Ms. Saucedo did
       not participate personally or substantially, or really in any capacity, with the
       follow-on NIEF Engineering source selection, including with the
       development of the statement of work, drafting of the source selection
       strategy, drafting the RFP, participating in the evaluation of proposals or
       selecting the awardee resulting in the NIEF Contract awarded to McKean.

(capitalization in original; internal reference omitted; alteration added). The contracting
officer also noted that “[a]ll members of the SSEB (Mr. [redacted], Mr. [redacted], Mr.
[redacted], and Ms. [redacted], and Mr. [redacted]) confirmed that Ms. Saucedo had no
role in the evaluation of the proposals,” and the contracting officer added, “[a]s

                                               23
Contracting Officer for this procurement, to my knowledge and from my review of the
contract file, Ms. Saucedo had no role in any part of this procurement.” (alterations
added). Therefore, the contracting officer wrote:

      The PCI investigation revealed the absence of any PCI concern prior to
      award, since Ms. Saucedo was completely excluded from the acquisition
      planning and throughout the source selection process for the follow-on NIEF
      contract. The concern of impropriety was not a pre-award concern, since
      Ms. Saucedo did not have any role in the source selection process for the
      follow-on NIEF and the evaluation of proposals. Furthermore, the SSEB
      members were not given access to the cost proposals, and therefore, would
      not have known that Mr. Saucedo was listed as a proposed employee for
      McKean. The SSEB did not have any available information in the non-cost
      proposal documents provided for their review to know that Mr. Saucedo was
      either proposed or if he had any involvement with McKean’s proposal. When
      McKean received the follow-on NIEF contract award Ms. Saucedo had a
      discussion with her supervisor that her role would need to change in order
      to avoid any PCI that could arise in administration of the follow-on contract,
      which her husband would be employed under.

       The contracting officer further determined that “although Ms. Saucedo had access
to KES’ Cost Proposals under KES’ Prior Contracts, the evidence supports that she did
not provide that information to her husband,” and elaborated:

      The PCI investigation revealed that Ms. Saucedo is one of several CORs
      (8-10 at any given time) under KES’ existing contract, N66001-18-D-0075,
      and also a project manager for several programs under the NIEF. According
      to Ms. Saucedo, her duties include the development of task orders based
      on sponsor requirements, overseeing task orders, and other standard COR
      duties. As one of the CORs, Ms. Saucedo had access to some of KES’ non-
      public labor and indirect rate information under KES’ existing NIEF contract
      in order to review KES’ task order proposals. The contract file documents
      her review of one such task order proposal in October 2020.

      Although Ms. Saucedo had access to some of KES’ cost information under
      the incumbent contract, Ms. Saucedo specifically denied, under penalty of
      perjury, providing any of KES’ cost information to her husband. She also
      described how she protected the proprietary information she had in
      connection with her COR duties. While Ms. Saucedo stated she lives in the
      same household with Mr. Saucedo, she stated she followed proper
      protocols as a COR to safeguard non-public/sensitive information as
      required on all contracts. Ms. Saucedo’s government computer requires a
      CAC and pin to log in, and Ms. Saucedo stated that Mr. Saucedo does not
      have access to her computer. Ms. Saucedo and Mr. Saucedo have separate
      offices in their home. Ms. Saucedo stated, “I always close the door when I
      have any discussions on the phone regarding anything related to my COR

                                           24
duties.” Ms. Saucedo stated that she has “never discussed any labor rates
or any other financial contract information with Mr. Saucedo.” Ms. Saucedo
also said, “I do not discuss anything that is contract sensitive with anyone,
I understand it is unethical for me to divulge any financial data – IGCE’s,
Labor Rates, Cost Proposals – none of this is ever discussed except with
other CORs of the contract. I also do not discuss KES with anyone, but
other CORs on the contract.”

The PCI investigation revealed that although Ms. Saucedo has not
discussed Mr. Saucedo’s job with her co-workers, Ms. Saucedo along with
some fellow co-workers knew he worked for Cabrillo, which is a unit within
McKean and now owned by Noblis-MSD. Mr. Saucedo does not work on
any projects or programs that Ms. Saucedo is involved in with the NIEF.

The PCI investigation revealed Ms. Saucedo was aware of Mr. Saucedo’s
company competing on the requirement. Ms. Saucedo stated, “I did know
the company was developing a proposal for this contract, Mr. Saucedo told
me. I am not sure when the contract actually went out for bidding but I knew
before the proposal was submitted. Other than knowing they were
developing a proposal, we did not have any other discussion about the
contract.” Ms. Saucedo also mentioned, “I am not exactly sure when Mr.
Saucedo knew his company was bidding on the NIEF engineering contract.
It is my understanding he knew he was named in the proposal.” The above
does not present a competitive source selection advantage to McKean, but
it does present a potential postaward contract administration conflict in
which Ms. Saucedo will not be appointed as the COR for the new NIEF
Engineering contract award to avoid such a conflict during contract
administration.

The PCI investigation revealed no reluctance on Ms. Saucedo’s behalf
when she was requested to provide a written response to a list of 25
questions. She provided complete, and timely cooperation (i.e., within less
than 24 hours).

Similarly, Mr. Saucedo specifically declared, under penalty of perjury, that
Ms. Saucedo has never shared any proprietary or sensitive information of a
contractor that she oversees, including KES. Mr. Saucedo also explained
he did not have access to any portion of or information regarding the
proposal KES submitted, and that he cannot and has not ever accessed
any of her work files. Additionally, Mr. Saucedo stated he is not a McKean
executive, was not involved in any way with preparation of McKean’s cost
proposal submitted for the RFP, and he only had a limited role in preparing
the technical proposal response.

The PCI investigation revealed that [redacted] and [redacted] are the only
members of the SSEB who know Mr. Saucedo, but do not have a personal

                                     25
      relationship with him, and their interactions with Mr. Saucedo did not
      otherwise raise any issues for concern.

      I did not uncover any further information related to KES counsel’s 18
      October 2021 email stating the KES learned that Ms. Saucedo spoke up to
      defend the MSC program, and thereby McKean. The information provided
      was vague, and offered no information as to any dates or timeframes it was
      alleged to have occurred. Ms. Saucedo stated in her declaration that she
      did not recall attending a government or government/contractor meeting
      wherein she discussed Military Sealift Command NIEF related efforts. Given
      the declarations by both Ms. Saucedo and Mr. Saucedo regarding Ms.
      Saucedo not revealing any proprietary information regarding KES to Mr.
      Saucedo, other information detailed above, and KES’ admission that its
      allegation would not constitute improper behavior, I do not find this
      allegation affects my findings. Furthermore, the allegation is more about Mr.
      Saucedo discussing his work with Ms. Saucedo (not the reverse) which is
      not improper. Finally, the discussion of problems or concerns with regards
      to the MSC program office would not provide new or competitively useful
      information that would have given McKean an advantage over KES, who
      has overseen the full scope of work for the NIEF Engineering contract under
      its incumbent contracts.

(capitalization in original; internal reference omitted). The contracting officer also
determined that “the evidence does not support a violation of FAR 3.104-3(a) or (b),” and
explained:

      Although KES did not specifically mention the Procurement Integrity Act
      (PIA) in its protest, or otherwise, to the extent that KES’ allegation that Ms.
      Saucedo had access to KES’ cost information and cost proposals may be
      construed as a possible violation of the PIA, my investigation showed no
      evidence that Ms. Saucedo provided cost proposals or cost information to
      her husband or anyone at McKean. Ms. Saucedo specifically denied, under
      penalty of perjury, providing any of KES’ cost information to her husband.
      She also described how she protected the proprietary information she had
      in connection with her COR duties. In accordance with the COR
      appointment letter, Ms. Saucedo complied with her COR duties, including
      paragraph 5.(e) in which it states “You shall NOT…Discuss acquisition
      plans, strategies or provide any advance information that might give one
      contractor an advantage over another contractor in forthcoming
      procurements.” Ms. Saucedo took steps to safeguard any cost information
      she had access to by keeping it stored on her secure CAC enabled
      machine.

      Similarly, Mr. Saucedo specifically declared, under penalty of perjury, that
      Ms. Saucedo has never shared any proprietary or sensitive information of a
      contractor that she oversees, including KES. Mr. Saucedo also explained

                                            26
      he did not have access to any portion of or information regarding the
      proposal KES submitted, and that he cannot and has not ever accessed
      any of her work files. Additionally, Mr. Saucedo declared he was not
      involved in any way with preparation of McKean’s cost proposal submitted
      for the RFP, and he only had a limited role in preparing the technical
      proposal response.

      Additionally, the circumstances of this procurement would limit the
      competitive usefulness of any cost proposal information under KES’
      incumbent contract. While cost proposal information might be competitively
      useful in some situations, the structure of the RFP evaluation factors and
      type of contract (i.e., Cost type contract) limited the competitive usefulness
      of the cost information Ms. Saucedo had access to. The reason the
      information is not competitively useful is in a cost type contract, cost realism
      analysis is utilized to realize up any unrealistic direct labor rates (e.g. rates
      not based on local payrolls, which fall below the average rates for the
      specific locality), as well as, any indirect labor rates that fell below the
      contractor’s approved rates from DCAA or DCMA in the form of Provisional
      Billing Rates (PBR), Forward Pricing Rate Agreement (FPRA), or Forward
      Pricing Rate Recommendation (FPRR). The labor categories and level of
      effort or hours to be proposed were provided in the RFP to all offerors.
      McKean proposed in accordance with the level of effort identified within the
      RFP.

(capitalization and alteration in original). Therefore, the contracting officer reasoned,
“[c]onsequently, the application of cost realism analysis would have limited the
competitive usefulness of any cost information Ms. Saucedo had access to.” (alteration
added).

      The contracting officer concluded:

      Based upon the above analysis, I find no conflict of interest affecting the
      award to McKean. I found no evidence that: (1) Ms. Saucedo participated
      personally and substantially in the NIEF Engineering source selection,
      including development of the statement of work, drafting of the source
      selection strategy, request for proposals, or participated in the evaluation of
      proposals resulting in the NIEF Contract awarded to McKean; and (2) Ms.
      Saucedo disclosed any competitively useful nonpublic information. I also
      found no evidence that Ms. Saucedo provided contractor bid or proposal
      information or source selection information to McKean before the award or
      that McKean obtained contractor bid or proposal information or source
      selection information before the award. Therefore, I find “no impact” on the
      award of the contract to McKean in accordance with FAR 3.104-7(a).
      Additionally, as discussed above, even if there were disclosure of cost
      information as alleged by KES, I do not believe that such cost information
      would have provided a competitive advantage due to the nature of the cost

                                             27
        evaluation. Although some may believe there is an appearance of
        impropriety based upon Ms. Saucedo’s position as COR and her
        relationship with a McKean employee, the above information, findings and
        conclusions, do not support any actual impropriety. I do not believe the
        appearance of impropriety by itself sufficient to impact the award of the
        contract to McKean given all of the above.

        The contracting officer’s Personal Conflict of Interest Memorandum was included
as an attachment to the Source Selection Authority’s February 24, 2022 Business
Clearance Memorandum, which again recommended McKean for award. In the February
24, 2022 Business Clearance Memorandum, the Source Selection Authority first noted
that “[n]o PCI Found During Investigation,” and elaborated

        the Contracting Officer found no evidence that: (1) Ms. Saucedo
        participated personally and substantially in any capacity in the NIEF
        Engineering source selection, including development of the statement of
        work, drafting of the source selection strategy and request for proposal, or
        participated in the evaluation of proposals resulting in the NIEF Contract
        awarded to McKean; and (2) Ms. Saucedo disclosed any competitively
        useful nonpublic information, and what information she did possess would
        not have provided a competitive advantage due to the nature of the
        evaluation factors including cost.

(alteration added; internal reference omitted).

       As reflected, the Navy’s evaluations of protestor and intervenor in the February 24,
2022 Business Clearance Memorandum were identical to the evaluations in the Source
Selection Authority’s August 23, 2021 Business Clearance Memorandum as reflected in
the table below:

  Offeror   Acceptability   Factor I    Factor II Past   Factor III      Proposed Cost     Probable Cost
                            Technical   Performance      Small
                            Approach                     Business
                                                         Participation
  McKean    Acceptable      Good        Satisfactory     Good            $187,467,409.92   $195,045,486.39
                                        Confidence
  KES       Acceptable      Good        Satisfactory     Outstanding     $204,870,045.22   $204,870,045.22
                                        Confidence

     Regarding McKean’s cost proposal, in the February 24, 2022 Business Clearance
Memorandum, the Source Selection Authority stated:

        McKean combined with their subcontractors proposed all hours and
        overtime hours in accordance with the RFP. McKean proposed prime hours
        on 69% of the overall level of effort in terms of hours. McKean proposed on
        a CPFF [Cost Price Fixed Fee] basis. According to DCAA Audit Report No.
        6151-2015T17741001 dated 6 February 2015, McKean’s accounting

                                                   28
      system was found adequate. Therefore, McKean’s accounting system is
      considered suitable for a cost reimbursement contract. Based on the
      analysis below, McKean’s proposed costs were found to be 3.89% or
      $7,578,076.48 below the realistic cost; therefore, a cost realism adjustment
      was made and McKean’s cost was realized up from $187,467,409.92 to
      $195,045,486.39.

      (i). Prime Direct Labor.
      McKean proposed direct labor rates for 28 labor categories with a list of
      rates for 128 employees. McKean’s direct labor rates were developed by
      using the actual salaries for the proposed current McKean employees or the
      contingent salaries (three employees) for the proposed contingent McKean
      employees, in which signed Letters of Intent were provided. Although
      McKean’s rates were substantiated with corresponding employee payroll
      information, clarifications revealed not all of the payroll information provided
      was for work within San Diego. Twenty of the 128 proposed rates were
      based on actual labor rates for named individuals whose labor rate were
      substantiated by payroll records and whose place of performance of work
      was San Diego, CA, were deemed realistic and reasonable and are shown
      in averages in the first table below. The rates for 108 of the 128 rates
      proposed by McKean were based on work performed outside of San Diego.
      24 of the 108 non-San Diego based rates were found to be equal or above
      the average San Diego Rates identified in the San Diego Rates Utilized for
      Cost Realism Analysis Table on page 24 and no cost realism adjustment
      was made. However, 84 of the 108 non-San Diego based rates for
      individuals in the remaining 21 labor categories were lower than the San
      Diego Rates Utilized for Cost Realism Analysis Table on page 24. The direct
      labor rates for these 84 employees were realized up accordingly to the San
      Diego Rates identified in the San Diego Rates Utilized for Cost Realism
      Analysis Table on page 24, as shown in the second table below. The tables
      below includes direct labor rates proposed per labor category for the base
      year, which were escalated by [redacted]% year over year for the option
      years. Proposed overtime hours for exempt and non-exempt employees
      were reviewed and found to be realistic. Overtime rates for non-exempt
      employees working as Junior Configuration Management Specialist, Senior
      Material      Specialist,     Material    Specialist,       Technical     Typist,
      Warehouse/Forklift Operator, and Assembler Electronic/Electrical were
      proposed [redacted]. Overtime rates for the remaining labor categories
      proposed were for exempt individuals that were proposed [redacted]. Based
      on the rationale above, McKean’s direct labor rates were realized up
      accordingly.

(alteration added). Regarding KOAM’s cost proposal, in the February 24, 2022 Business
Clearance Memorandum, the Source Selection Authority indicated:

                                             29
      KES combined with their subcontractors proposed all hours and overtime
      hours in accordance with the RFP. KES proposed prime hours on 84.5% of
      the overall level of effort in terms of hours. KES proposed on a CPFF basis.
      The DCMA administrative contracting officer (ACO) sent a final
      determination letter, which formally approved KES’ accounting system
      based on a post award review of KES accounting system documented in
      DCAA Audit Report No. 4151-2020C17741003 on 12 August 2020.
      Therefore, the KES’s accounting system is considered suitable for a cost
      reimbursement contract. Based on the analysis below KES’s proposed
      costs were found to be realistic; therefore, no cost realism adjustment was
      made.

      (i). Prime Direct Labor.
      KES proposed direct labor rates for 30 labor categories with a list of rates
      for 160 employees. KES’ direct labor rates were developed for most labor
      categories and hours using named individuals currently supporting the
      existing NIEF requirement. All of KES rates for named individuals were
      substantiated with corresponding employee payroll information for work
      performed in San Diego.

     The Source Selection Authority conducted a new trade-off analysis, and similar to
the earlier Source Selection Authority’s August 23, 2021 Business Clearance
Memorandum, the February 24, 2022 Business Clearance Memorandum explained that

      McKean and KES received the same rating for the most important non-cost
      factor, Factor I – Technical Approach, as they each received Good ratings
      for demonstrating a thorough approach and understanding of the
      requirements. KES’ received twenty-eight (28) strengths, and thirteen (13)
      weaknesses, and McKean received three (3) significant strengths, nineteen
      (19) strengths and eight (8) weaknesses. Neither KES nor McKean received
      any significant weaknesses.

The Source Selection Authority concluded “[o]verall, the Government did not find any
trade-off appropriate with regard to Technical Approach based upon the various
significant strengths, strengths and weakness assigned to KES and McKean as described
above,” and “[t]aken as a whole, both offerors demonstrated a thorough technical
approach, and there was no trade-off warranted.” (alterations added).

      For Factor II – Past Performance, and Factor III – Small Business Participation,
the Source Selection Authority determined:

      Based on the past performance evaluation, the Government has a
      reasonable expectation that either offeror will successfully perform the
      required effort. The Government did not find any trade-off appropriate with
      regard to Past Performance. Overall, while different in terms of the
      underlying relevance and quality ratings, the Government’s confidence is

                                          30
      similar with both, and did not find any trade-off appropriate for past
      performance.

      McKean was rated Good and KES was rated Outstanding for Factor III -
      Small Business Participation. KES, as a small business, received an
      Outstanding rating, since they exceeded the 20% threshold needed to
      obtain an Outstanding rating by proposing to perform approximately 82% of
      the work in house as the prime contractor. McKean also demonstrated a
      very high SBC utilization rate of 19.47%, which is just below the 20% level
      needed for an Outstanding rating and accomplishes the goal of encouraging
      small business participation to a good, and almost outstanding level. So
      while there is a distinction between the two offerors in terms of Small
      Business Participation, it is not a great one in terms of value to the
      Government.

The Source Selection Authority, in the February 24, 2022 Business Clearance
Memorandum explained, although in greater detail than it had in the original Source
Selection Authority’s August 23, 2021 Business Clearance Memorandum,

      [i]n terms of cost, the risk of unrealistic cost was addressed by performing
      cost realism analysis of all cost information included within the proposals
      for all prime contractors and the respective subcontractors. The risk of
      accepting cost based on unbalanced pricing or underestimating the number
      of hours required to perform was mitigated by verifying that each of the
      prime contractors and all subcontractors proposed hours that added up to
      the total level of effort identified within the RFP per labor category and
      overall. The risk of accepting unrealistically low cost based on acceptance
      of rates generated from payroll information outside of the San Diego locality
      was mitigated via a two-part process, which consisted of: 1) identification of
      all non-San Diego based rates through review of each contractor’s
      proposals or via clarification, and 2) application of an upward adjustment of
      non-San Diego rates to the average San Diego rate proposed by all offerors
      for each labor category. Using the risk mitigation tools referenced above,
      McKean’s proposed cost were adjusted during the cost realism analysis.
      KES’ proposed realistic direct and indirect cost that were compared to
      company payrolls, and indirect rate information provided by DCAA and
      DCMA, and were not adjusted during the cost realism analysis. McKean’s
      probable cost of $195,045,486.39 was 4.80% or $9,824,558.83 lower than
      KES’ probable cost of $204,870,045.22. Furthermore, the adjustment does
      not indicate a lack of understanding of the requirements or a concern
      regarding performance as based upon their performance in the non-costs
      factors they understand the work and have done similar work before and
      well.

(alteration added). The Source Selection Authority further explained that

                                           31
       KES and McKean received the same ratings in all non-cost factors except
       for the Small Business Participation factor, and no tradeoff was found
       appropriate in either Technical Approach or Past Performance. KES did
       receive a higher rating in small business participation; however, McKean
       was a fraction of a percent from matching KES rating of Outstanding for
       small business participation, and Small Business Participation is the least
       important non cost factor. Consistent with M-2 of the solicitation, “If the
       Government will consider the differences in the non-cost factors to be worth
       the difference in evaluated cost and proposed fee, then the Government will
       consider the offeror with the higher evaluated cost and proposed fee to be
       the better value. If not, then the Government will consider the offeror with
       the lower evaluated cost and proposed fee to be the better value.” The
       differences between KES’ and McKean’s non-cost factors were not enough
       to overcome the difference between the evaluated costs, where McKean’s
       evaluated cost was 4.80% or $9,824,558.83 lower than KES. Based on the
       comparison above, McKean was evaluated as the best value contractor
       after consideration of both cost and non-cost factors.

Therefore, the Source Selection Authority concluded:

       I, Sharon Pritchard, the Source Selection Authority for this procurement,
       have independently reviewed all SSEB evaluations provided herein. As a
       result of such review, I have determined McKean’s proposal represents the
       best value to the Government and, therefore, McKean to be the awardee.

       Recommendation: The Government’s findings from the review process
       conducted after GAO’s dismissal of KES’ protest, reaffirmed that McKean’s
       proposal represents the best value to the Government. Therefore, approval
       is requested to award an Indefinite Delivery, Indefinite Quantity (IDIQ),
       Cost-Plus-Fixed-Fee (CPFF) and Cost (no fee) Contract to McKean under
       solicitation number N66001-21-R-0041. Based on the analysis herein, the
       recommended awardee’s proposal represents the best value to the
       Government and the proposed cost has been reviewed and determined to
       be reasonable and realistic. Recommend award be made based on initial
       offers without discussions as permitted by FAR 15.306(a) and 52.215-1.

(internal reference omitted).

       On March 14, 2022, the Navy informed McKean and KOAM that McKean was
again the awardee of the contract. On March 29, 2022, KOAM filed another bid protest
with GAO and again alleged a conflict of interest and also alleged that the Navy had
incorrectly evaluated cost realism. On July 6, 2022, the GAO denied KOAM’s protest.

      On July 26, 2022, KOAM filed a bid protest complaint in this court, followed by an
amended complaint on August 16, 2022. KOAM’s amended complaint alleges three
counts, first, “the Navy failed to sufficiently investigate the alleged conflict of interest,”

                                             32
second, “the Navy failed to ‘avoid strictly’ the appearance of a conflict of interest,” and
third, “the Navy failed to adjust McKean’s ‘Combined Technical/Risk Rating’ based on the
risk of McKean’s unrealistic staffing approach.” In its request for relief, KOAM seeks:

      1. A declaratory judgment finding that the Navy failed to sufficiently
      investigate the alleged conflict of interest, failed to meet its obligation to
      avoid “strictly” even the appearance of a conflict of interest, and/or failed to
      properly adjust McKean’s “combined technical/risk rating” based on the risk
      of its unrealistic staffing approach, and further finding that each such failure
      was arbitrary, capricious, an abuse of discretion, and/or contrary to law; and

      2. Permanent injunctive relief enjoining the Navy from proceeding with the
      contract awarded to McKean and ordering the Navy to: (a) terminate the
      contract awarded to McKean based on the appearance of a conflict of
      interest, or cancel the Solicitation and start a new procurement with
      appropriate mitigation techniques to address the apparent conflict of
      interest, or further investigate the apparent conflict of interest consistent
      with the Court’s decision and make a new award decision; and/or (b)
      reevaluate and rescore McKean’s technical proposal to consider the risk of
      McKean’s unrealistic staffing approach, consistent with the terms of the
      Solicitation and the Court’s decision, and make a new award decision based
      on that reevaluation; and

      3. Such other relief as the Court may deem just and proper, including
      payment of attorney fees pursuant to the Equal Access to Justice Act.

        After the complaint was filed, and again after the amended complaint was filed, the
court held hearings with the parties and set a schedule to brief cross-motions for judgment
on the Administrative Record. In KOAM’s motion for judgment on the Administrative
Record, protestor argues that “[t]he Navy’s investigation failed to reasonably consider
whether there was an impermissible appearance of a conflict of interest,” and that “[t]he
close relationship between a Navy Contractor Officer Representative and a key person
for McKean created an appearance of a conflict of interest.” (alterations added).
Defendant argues that “[t]he Contracting Officer reasonably determined that the apparent
personal conflict of interest did not impact the procurement and KOAM’s confidential
information was not improperly shared with a competitor,” and that “[t]he scope of the
personal conflict of interest investigation was proper.” (alterations added). Intervenor
similarly argues that “[t]he Navy’s conflict of interest investigation was well-supported,
reasonable, and rational,” and “[t]he Navy reasonably considered whether there was an
impermissible appearance of a conflict of interest.” (alterations added).

       Separately, KOAM argues “[t]he Navy failed to adjust McKean’s ‘Combined
Technical/Risk Rating’ based on the risk of McKean’s unrealistic staffing approach,” to
which defendant responds that “[t]he Agency’s Cost Realism analysis was reasonable
and in accordance with the Solicitation.” (alterations added). Intervenor also argues that
“the Navy reasonably found that McKean’s technical proposal adhered to the terms of the

                                            33
RFP and did not pose risk that required rescoring. KOAM’s arguments to the contrary are
mere disagreement with the Navy’s reasoned evaluation determinations and prescribed
discretion under the terms of the RFP and the FAR.” The parties have fully briefed cross-
motions for judgement on the Administrative Record, and the court held oral argument.

                                       DISCUSSION

       As indicated above, the parties have filed cross-motions for judgment on the
Administrative Record. Rule 52.1(c)(1) (2021) of the Rules of the United States Court of
Federal Claims (RCFC) governs motions for judgment on the administrative record. The
court’s inquiry is directed to “‘whether, given all the disputed and undisputed facts, a party
has met its burden of proof based on the evidence in the record.’” Mgmt. & Training Corp.
v. United States, 115 Fed. Cl. 26, 40 (2014) (quoting A & D Fire Prot., Inc. v. United
States, 72 Fed. Cl. 126, 131 (2006) see also Superior Optical Labs, Inc. v. United States,
150 Fed. Cl. 681, 691 (2020) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356-
57 (Fed. Cir. 2005)); see also AAR Manufacturing, Inc. v. United States, 149 Fed. Cl. 514,
522 (2020); Glocoms, Inc. v. United States, 149 Fed. Cl. 725, 731 (2020); Centerra Grp.,
LLC v. United States, 138 Fed. Cl. 407, 412 (2018) (citing Bannum, Inc. v. United States,
404 F.3d at 1356-57); Informatics Applications Grp., Inc. v. United States, 132 Fed. Cl.
519, 524 (2017) (citation omitted); Strategic Bus. Sols., Inc. v. United States, 129 Fed. Cl.
621, 627 (2016), aff’d, 711 F. App’x 651 (Fed. Cir. 2018); Rotech Healthcare Inc. v. United
States, 118 Fed. Cl. 408, 413 (2014); Eco Tour Adventures, Inc. v. United States, 114
Fed. Cl. 6, 21 (2013); DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 661
(2010). Pursuant to RCFC 52.1, in a bid protest, the court reviews the agency’s
procurement decision to determine whether it is supported by the administrative record.
See CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. 462, 481 (2013); see also
CR/ZWS LLC v. United States, 138 Fed. Cl. 212, 223 (2018) (citing Bannum, Inc. v.
United States, 404 F.3d at 1353-54).

        The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,
§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)–(4)),
amended the Tucker Act to establish a statutory basis for bid protests in the United States
Court of Federal Claims. See Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001); see also Sys. Application & Techs., Inc.
v. United States, 691 F.3d 1374, 1380 (Fed. Cir. 2012) (explaining that the Tucker Act
expressly waives sovereign immunity for claims against the United States in bid protests).
The statute provides that protests of agency procurement decisions are to be reviewed
under APA standards, making applicable the standards outlined in Scanwell Labs., Inc.
v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and the line of cases following that decision.
See, e.g., Per Aarsleff A/S v. United States, 829 F.3d 1303, 1309 (Fed. Cir. 2016)
(“Protests of agency procurement decisions are reviewed under the standards set forth
in the Administrative Procedure Act (‘APA’), see 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C.
§ 706), ‘by which an agency’s decision is to be set aside only if it is arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law[.]’” (quoting NVT Techs.,
Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)) (citing PAI Corp. v. United
States, 614 F.3d 1347, 1351 (Fed. Cir. 2010))); Dell Fed. Sys., L.P. v. United States, 906

                                             34
F.3d 982, 990 (Fed. Cir. 2018); Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d at 1332; Res. Conservation Grp., LLC v. United States, 597 F.3d 1238,
1242 (Fed. Cir. 2010) (“Following passage of the APA in 1946, the District of Columbia
Circuit in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that
challenges to awards of government contracts were reviewable in federal district courts
pursuant to the judicial review provisions of the APA.”); Galen Med. Assocs., Inc. v. United
States, 369 F.3d 1324, 1329 (Fed. Cir.) (citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d
at 864, 868, for its “reasoning that suits challenging the award process are in the public
interest and disappointed bidders are the parties with an incentive to enforce the law”),
reh’g denied (Fed. Cir. 2004). In Banknote Corp. of Am., Inc. v. United States, 365 F.3d
1345 (Fed. Cir. 2004), the Federal Circuit explained that “[u]nder the APA standard as
applied in the Scanwell line of cases, and now in ADRA cases, ‘a bid award may be set
aside if either (1) the procurement official’s decision lacked a rational basis; or (2) the
procurement procedure involved a violation of regulation or procedure.’” Id. at 1351
(quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at
1332)); see also Harmonia Holdings Grp., LLC v. United States, 999 F.3d 1397, 1403
(Fed. Cir. 2021); Palantir USG, Inc. v. United States, 904 F.3d 980, 990 (Fed. Cir. 2018);
AgustaWestland North Am., Inc. v. United States, 880 F.3d 1326, 1332 (Fed. Cir. 2018);
Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.), reh’g
and reh’g en banc denied (Fed. Cir. 2003).

       When discussing the appropriate standard of review for bid protest cases, the
United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and
(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See
Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir.) (“‘[T]he proper standard
to be applied [to the merits of] bid protest cases is provided by 5 U.S.C. § 706(2)(A)
[(2006)]: a reviewing court shall set aside the agency action if it is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.”’” (alterations in original)
(quoting Banknote Corp. of Am. v. United States, 365 F.3d at 1350-51 (citing Advanced
Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.), reh’g denied
(Fed. Cir. 2000)))), reh’g and reh’g en banc denied (Fed. Cir. 2013). The statute says that
agency procurement actions should be set aside when they are “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law,” or “without observance of
procedure required by law.” 5 U.S.C. § 706(2)(A), (D) (2018);6 see also Veterans
6 The   language of 5 U.S.C. § 706 provides in full:

        To the extent necessary to decision and when presented, the reviewing
        court shall decide all relevant questions of law, interpret constitutional and
        statutory provisions, and determine the meaning or applicability of the terms
        of an agency action. The reviewing court shall—
            (1) compel agency action unlawfully withheld or unreasonably delayed;
                and

           (2) hold unlawful and set aside agency action, findings, and conclusions
               found to be—

                                             35
Contracting Grp., Inc. v. United States, 920 F.3d 801, 806 (Fed. Cir. 2019) (“In a bid
protest, we follow Administrative Procedure Act § 706 and set aside agency action ‘if it is
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”
(quoting Palladian Partners, Inc. v. United States, 783 F.3d 1243, 1252 (Fed. Cir. 2015));
Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d 1353, 1358 (Fed. Cir. 2015);
Orion Tech., Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir. 2013); COMINT Sys.
Corp. v. United States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We evaluate agency
actions according to the standards set forth in the Administrative Procedure Act; namely,
for whether they are ‘arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.’” (quoting 5 U.S.C. § 706(2)(A); and Bannum, Inc. v. United States,
404 F.3d at 1351)); Savantage Fin. Servs. Inc., v. United States, 595 F.3d 1282, 1285-86
(Fed. Cir. 2010); Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir.
2009); Axiom Res. Mgmt., Inc. v. United States, 564 F.3d at 1381 (noting arbitrary and
capricious standard set forth in 5 U.S.C. § 706(2)(A), and reaffirming the analysis of
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue
& Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry
is whether the [government]’s procurement decision was “arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.”’” (quoting Bannum, Inc. v. United
States, 404 F.3d at 1351 (quoting 5 U.S.C. § 706(2)(A) (2000)))); NVT Techs., Inc. v.
United States, 370 F.3d at 1159 (“Bid protest actions are subject to the standard of review
established under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 28
U.S.C. § 1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’ 5
U.S.C. § 706(2)(A) (2000).” (internal citations omitted)); Info. Tech. & Applications Corp.
v. United States, 316 F.3d at 1319 (“Consequently, our inquiry is whether the Air Force’s
procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.’ 5 U.S.C. § 706(2)(A) (2000).”); Synergy Sols., Inc. v. United
States, 133 Fed. Cl. 716, 734 (2017) (citing Banknote Corp. of Am. v. United States, 365
F.3d at 1350); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. at 22; Contracting,

             (A) arbitrary, capricious, an abuse of discretion, or otherwise not in
                 accordance with law;
             (B) contrary to constitutional right, power, privilege, or immunity;
             (C) in excess of statutory jurisdiction, authority, or limitations, or short
                 of statutory right;
             (D) without observance of procedure required by law;
             (E) unsupported by substantial evidence in a case subject to sections
                 556 and 557 of this title or otherwise reviewed on the record of
                 an agency hearing provided by statute; or
             (F) unwarranted by the facts to the extent that the facts are subject
                 to trial de novo by the reviewing court.

      In making the foregoing determinations, the court shall review the whole
      record or those parts of it cited by a party, and due account shall be taken
      of the rule of prejudicial error.

5 U.S.C. § 706.

                                             36
Consulting, Eng’g LLC v. United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest
case, the agency’s award must be upheld unless it is ‘arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.’” Turner Constr. Co. v. United States,
645 F.3d 1377, 1383 (Fed. Cir.) (quoting PAI Corp. v. United States, 614 F.3d at 1351),
reh’g en banc denied (Fed. Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United
States, 800 F.3d at 1358 (“In applying this [arbitrary and capricious] standard to bid
protests, our task is to determine whether the procurement official’s decision lacked a
rational basis or the procurement procedure involved a violation of a regulation or
procedure.” (citing Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285-86));
Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir.), reh’g
en banc denied (Fed. Cir. 2013); McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402
(2013) (“The first step is to demonstrate error, that is, to show that the agency acted in an
arbitrary and capricious manner, without a rational basis or contrary to law.”);
PlanetSpace, Inc. v. United States, 92 Fed. Cl. 520, 531-32 (“Stated another way, a
plaintiff must show that the agency’s decision either lacked a rational basis or was
contrary to law.” (citing Weeks Marine, Inc. v. United States, 575 F.3d at 1358)),
subsequent determination, 96 Fed. Cl. 119 (2010).

       The United States Supreme Court has identified sample grounds which can
constitute arbitrary or capricious agency action:

       [W]e will not vacate an agency’s decision unless it “has relied on factors
       which Congress has not intended it to consider, 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 is so implausible
       that it could not be ascribed to a difference in view or the product of agency
       expertise.”

Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)); see
also F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 552 (2009); Tinton Falls
Lodging Realty, LLC v. United States, 800 F.3d at 1358; Ala. Aircraft Indus., Inc.-
Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009), reh’g and reh’g en
banc denied (Fed. Cir. 2010); In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002)
(“[T]he agency tribunal must present a full and reasoned explanation of its decision. . . .
The reviewing court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v.
United States, 74 Fed. Cl. 277, 285-86 (2006), appeal dismissed sub nom. Textron, Inc.
v. Ocean Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States
Supreme Court also has cautioned, however, that “courts are not free to impose upon
agencies specific procedural requirements that have no basis in the APA.” Pension
Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654 (1990).

        Under an arbitrary or capricious standard, the reviewing court should not substitute
its judgment for that of the agency, but should review the basis for the agency decision to
determine if it was legally permissible, reasonable, and supported by the facts. See Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (“The scope of

                                             37
review under the ‘arbitrary and capricious’ standard is narrow and a court is not to
substitute its judgment for that of the agency.”); see also Dell Fed. Sys., L.P. v. United
States, 906 F.3d 982, 990 (Fed. Cir. 2018); Turner Constr. Co., Inc. v. United States, 645
F.3d at 1383; R & W Flammann GmbH v. United States, 339 F.3d 1320, 1322 (Fed. Cir.
2003) (citing Ray v. Lehman, 55 F.3d 606, 608 (Fed. Cir.), cert. denied, 516 U.S. 916
(1995)); Synergy Sols., Inc. v. United States, 133 Fed. Cl. at 735 (citing Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33). “‘“If the
court finds a reasonable basis for the agency’s action, the court 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.”’” Weeks Marine,
Inc. v. United States, 575 F.3d at 1371 (quoting 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))); Limco Airepair, Inc. v. United States, 130 Fed. Cl. 544, 550 (2017)
(citation omitted); Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 631 (2014);
Davis Boat Works, Inc. v. United States, 111 Fed. Cl. 342, 349 (2013); Norsat Int’l
[America], Inc. v. United States, 111 Fed. Cl. 483, 493 (2013); HP Enter. Servs., LLC v.
United States, 104 Fed. Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United
States, 101 Fed. Cl. 765, 780 (2011).

       Stated otherwise by the United States Supreme Court:

       Section 706(2)(A) requires a finding that the actual choice made was not
       “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
       with law.” To make this finding the court must consider whether the decision
       was based on a consideration of the relevant factors and whether there has
       been a clear error of judgment. Although this inquiry into the facts is to be
       searching and careful, the ultimate standard of review is a narrow one. The
       court is not empowered to substitute its judgment for that of the agency.

Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (internal citations
omitted), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see
also U.S. Postal Serv. v. Gregory, 534 U.S. 1, 6-7 (2001); Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956
(1975); Co-Steel Raritan, Inc. v. Int’l Trade Comm’n, 357 F.3d 1294, 1309 (Fed. Cir. 2004)
(In discussing the “arbitrary, capricious, and abuse of discretion, or otherwise not in
accordance with the law” standard, the Federal Circuit stated: “the ultimate standard of
review is a narrow one. The court is not empowered to substitute its judgment for that of
the agency.”); In re Sang Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v.
United States, 216 F.3d at 1058 (“The arbitrary and capricious standard applicable here
is highly deferential. This standard requires a reviewing court to sustain an agency action
evincing rational reasoning and consideration of relevant factors.” (citing Bowman
Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &
Space Co. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); Sys. Studies & Simulation, Inc.
v. United States, 146 Fed. Cl. 186, 199 (2019); By Light Prof’l IT Servs., Inc. v. United
States, 131 Fed. Cl. 358, 366 (2017); BCPeabody Constr. Servs., Inc. v. United States,
112 Fed. Cl. 502, 508 (2013) (“The court ‘is not empowered to substitute its judgment for

                                            38
that of the agency,’ and it must uphold an agency’s decision against a challenge if the
‘contracting agency provided a coherent and reasonable explanation of its exercise of
discretion.’” (internal citations omitted) (quoting Keeton Corrs., Inc. v. United States, 59
Fed. Cl. 753, 755, recons. denied, 60 Fed. Cl. 251 (2004); and Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d at 1381)), appeal dismissed, 559 F. App’x 1033 (Fed. Cir. 2014);
Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 382; Alamo Travel Grp.,
LP v. United States, 108 Fed. Cl. 224, 231 (2012); ManTech Telecomms. & Info. Sys.
Corp. v. United States, 49 Fed. Cl. 57, 63 (2001), aff’d, 30 F. App’x 995 (Fed. Cir. 2002).

       According to the United States Court of Appeals for the Federal Circuit:

       Effective contracting demands broad discretion. Burroughs Corp. v. United
       States, 223 Ct. Cl. 53, 617 F.2d 590, 598 (1980); Sperry Flight Sys. Div. v.
       United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,
       Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater
       Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69
       (1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d, 914
       F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good
       deal of discretion in determining which bid is the most advantageous to the
       Government.” Tidewater Management Servs., 573 F.2d at 73, 216 Ct. Cl.
       69.
Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958-59; see also Res-Care, Inc. v.
United States, 735 F.3d 1384, 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal
procurement entity, has ‘broad discretion to determine what particular method of
procurement will be in the best interests of the United States in a particular situation.’”
(quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009))), reh’g
en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995
(Fed. Cir. 1996); Geo-Med, LLC v. United States, 126 Fed. Cl. 440, 449 (2016); Cybertech
Grp., Inc. v. United States, 48 Fed. Cl. 638, 646 (2001) (“The court recognizes that the
agency possesses wide discretion in the application of procurement regulations.”).

        Furthermore, according to the United States Court of Appeals for the Federal
Circuit:

       Contracting officers “are entitled to exercise discretion upon a broad range
       of issues confronting them in the procurement process.” Impresa
       Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
       1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,
       procurement decisions are subject to a “highly deferential rational basis
       review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.
       Cir. 2008) (internal quotation marks omitted).

PAI Corp. v. United States, 614 F.3d at 1351; see also AgustaWestland N. Am., Inc. v.
United States, 880 F.3d at 1332 (“Where, as here, a bid protester challenges the

                                            39
procurement official’s decision as lacking a rational basis, we must determine whether
‘the contracting agency provided a coherent and reasonable explanation of its exercise
of discretion,’ recognizing that ‘contracting officers are entitled to exercise discretion upon
a broad range of issues confronting them in the procurement process.’” (quoting Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33 (internal
quotation marks and citation omitted))); Weeks Marine, Inc. v. United States, 575 F.3d at
1368-69 (“We have stated that procurement decisions ‘invoke [ ] “highly deferential”
rational basis review.’ Under that standard, we sustain an agency action ‘evincing rational
reasoning and consideration of relevant factors.’” (alteration in original) (quoting CHE
Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,
Inc. v. United States, 216 F.3d at 1058))).

       “Contracting officers ‘are entitled to exercise discretion upon a broad range of
issues confronting them in the procurement process,’” PAI Corp. v. United States, 614
F.3d at 1351 (quoting Impresa Construzioni Geom. Domenico Garufi v. United States,
238 F.3d at 1332), and “[a]ccordingly, procurement decisions are subject to a ‘highly
deferential rational basis review.’” Id. (quoting CHE Consulting, Inc. v. United States, 552
F.3d at 1354 (internal quotation marks omitted).

       When the contracting officer’s discretion grows, so does the burden on the
protestor. As noted in D & S Consultants, Inc. v. United States:

       The protestor’s burden becomes more difficult the greater the degree of
       discretion vested in the contracting officer. DynCorp Int’l v. United States,
       76 Fed. Cl. 528, 537 (2007). Negotiated procurements afford the contracting
       officer a “breadth of discretion;” “best-value” awards afford the contracting
       officer additional discretion. Id. Therefore, in a negotiated, best-value
       procurement, the “protestor’s burden is especially heavy.” Id.

D & S Consultants, Inc. v. United States, 101 Fed. Cl. 23, 33 (2011), aff’d, 484 F. App’x
558 (Fed. Cir. 2012); see also Galen Med. Assocs., Inc. v. United States, 369 F.3d at
1330 (noting that contracting officers have great discretion in negotiated procurements
but even greater discretion in best-value determinations than in procurements based on
cost alone); PHT Supply Corp. v. United States, 71 Fed. Cl. 1, 11 (2006) (“It is critical to
note that ‘a protestor’s burden is particularly great in negotiated procurements because
the contracting officer is entrusted with a relatively high degree of discretion, and greater
still, where, as here, the procurement is a “best-value” procurement.’” (citations omitted)).
“It is well-established that contracting officers have a great deal of discretion in making
contract award decisions, particularly when, as here, the contract is to be awarded to the
bidder or bidders that will provide the agency with the best value.” Banknote Corp. of Am.
Inc. v. United States, 365 F.3d at 1355 (citing TRW, Inc. v. Unisys Corp., 98 F.3d 1325,
1327-28 (Fed. Cir. 1996); E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.
1996); Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958–59); see also Am. Tel.
& Tel. Co. v. United States, 307 F.3d 1374, 1379 (Fed. Cir. 2002); Lockheed Missiles &
Space Co. v. Bentsen, 4 F.3d at 958; Brooks Range Contract Servs., Inc. v. United States,
101 Fed. Cl. 699, 707 (2011) (“[A] plaintiff’s burden ‘is elevated where the solicitation

                                              40
contemplates award on a “best value” basis.’” (internal citations omitted)); Matt Martin
Real Estate Mgmt. LLC v. United States, 96 Fed. Cl. 106, 113 (2010); Serco v. United
States, 81 Fed. Cl. 463, 496 (2008) (“To be sure, as noted at the outset, plaintiffs have a
significant burden of showing error in that regard because a court must accord
considerable deference to an agency’s best-value decision in trading off price with other
factors.”).

        A disappointed bidder has the burden of demonstrating the arbitrary and capricious
nature of the agency decision by a preponderance of the evidence. See Tinton Fall
Lodging Realty, LLC v. United Sates, 800 F.3d at 1364; see also Grumman Data Sys.
Corp. v. Dalton, 88 F.3d at 995-96; Enhanced Veterans Sols., Inc. v. United States, 131
Fed. Cl. 565, 578 (2017); Davis Boat Works, Inc. v. United States, 111 Fed. Cl. at 349;
Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 340. The Federal
Circuit has indicated that “[t]his court will not overturn a contracting officer’s determination
unless it is arbitrary, capricious, or otherwise contrary to law. To demonstrate that such a
determination is arbitrary or capricious, a protester must identify ‘hard facts’; a mere
inference or suspicion . . . is not enough.” PAI Corp. v. United States, 614 F.3d at 1352
(citing John C. Grimberg Co. v. United States, 185 F.3d 1297, 1300 (Fed. Cir. 1999)); see
also Turner Constr. Co., Inc. v. United States, 645 F.3d at 1387; Sierra Nevada Corp. v.
United States, 107 Fed. Cl. 735, 759 (2012); Filtration Dev. Co., LLC v. United States, 60
Fed. Cl. 371, 380 (2004).

       A bid protest proceeds in two steps. First . . . the trial court determines
       whether the government acted without rational basis or contrary to law when
       evaluating the bids and awarding the contract. Second . . . if 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
       protester was prejudiced by that conduct.

Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs. Corp. v.
United States, 134 Fed. Cl. 550, 555 (2017); FirstLine Transp. Sec., Inc. v. United States,
119 Fed. Cl. 116, 126 (2014), appeal dismissed (Fed. Cir. 2015); Eco Tour Adventures,
Inc. v. United States, 114 Fed. Cl. at 22; Archura LLC v. United States, 112 Fed. Cl. at
496. To prevail in a bid protest case, the protestor not only must show that the
government’s actions were arbitrary, capricious, or otherwise not in accordance with the
law, but the protestor also must show that it was prejudiced by the government’s actions.
See 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of prejudicial error.”); see
also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid
protest case, the inquiry is whether the agency’s action was arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law and, if so, whether the error
is prejudicial.”); IT Enter. Sols. JV, LLC v. United States, 132 Fed. Cl. 158, 173 (2017)
(citing Bannum v. United States, 404 F.3d at 1357-58). In describing the prejudice
requirement, the Federal Circuit also has held that:

       To prevail in a bid protest, a protester must show a significant, prejudicial
       error in the procurement process. See Statistica, Inc. v. Christopher, 102

                                              41
       F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d
       1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not
       required to show that but for the alleged error, the protester would have
       been awarded the contract.” Data General, 78 F.3d at 1562 (citation
       omitted). Rather, the protester must show “that there was a substantial
       chance it would have received the contract award but for that error.”
       Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d
       1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, protester
       must demonstrate that but for the alleged error, “‘there was a substantial
       chance that [it] would receive an award--that it was within the zone of active
       consideration.’” (citation omitted)).

Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g denied
(Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d
at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en
banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 316 F.3d
at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at
1332-33; OMV Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000);
Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile
Networks USA, LLC v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).

Conflict of Interest

        Protestor first argue that “[t]he Navy did not meet its obligation to strictly avoid even
the appearance of a conflict of interest, but instead considered only whether an actual
conflict had been proven,” and contends, that “[i]f the high standards of conduct that the
Government has established for Federal procurement are to mean anything, they must
be followed. Here, the Navy did not meet these standards.”7 (alterations added). KOAM
also argues the “Navy’s personal conflict of interest analysis, ‘entirely failed to consider
an important aspect of the problem,’ because it failed to reasonably consider whether
there was an appearance of a conflict of interest, as opposed to an actual conflict, that
the Navy was required to strictly avoid pursuant to FAR 3.101-1.” (quoting Motor Vehicle
Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43) (internal refence omitted).

        This court is cognizant of the Federal Circuit’s indication that “the FAR recognizes
that the identification of OCIs and the evaluation of mitigation proposals are fact-specific
inquiries that require the exercise of considerable discretion.” Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d at 1381-82 (citing FAR § 9.505).

       As recently explained by the United States Court of Appeals for the Federal Circuit:

7At the oral argument, counsel of record for protestor confirmed that protestor only raised
an apparent conflict of interest, explaining: “We are alleging that the Navy had an
obligation to evaluate whether there was an appearance of a conflict of interest and to
strictly limit the appearance of a conflict of interest. We are not alleging that there is an
actual conflict of interest.”

                                               42
      The standard for Claims Court review of a contracting officer’s decision with
      regard to a conflict of interest is highly deferential. A contracting officer's
      conflict of interest determination will be upheld unless it is “arbitrary,
      capricious, or otherwise contrary to law.” PAI Corp. v. United States, 614
      F.3d 1347, 1352 (Fed. Cir. 2010). If the contracting officer's findings are
      rational, they will be upheld on judicial review. See Turner Constr. Co. v.
      United States, 645 F.3d 1377, 1383–87 (Fed. Cir. 2011).

Oracle Am., Inc. v. United States, 975 F.3d 1279, 1296 (Fed. Cir. 2020), cert. denied, 142
S. Ct. 68 (2021); see also Turner Constr. Co. v. United States, 645 F.3d at 1386 (citing
PAI Corp. v. United States, 614 F.3d at 1352) (“The CO has considerable discretion in
determining whether a conflict is significant.”); see also Parcel 49C Ltd. P’ship v. United
States, 130 Fed. Cl. 109, 123 (2016) (citing PAI Corp. v. United States, 614 F.3d at 1352).

      Additionally, a Judge of the United States Court of Federal Claims explained:

      As with all agency decision-making, the Court must analyze whether the
      Agency conducted an adequate investigation consistent with the arbitrary
      and capricious standard of review. See PAI Corp. v. United States, 614 F.3d
      1347, 1352–53 (Fed. Cir. 2010) (reviewing conflict of intertest investigation
      under APA standard); cf. Former Emps. of Ameriphone, Inc. v. United
      States, 288 F. Supp. 2d 1353, 1355 (C.I.T. 2003) (“Courts have not
      hesitated to set aside agency determinations which are the product of
      perfunctory investigations.” (footnote omitted)). Notwithstanding the
      significant discretion vested in procurement officials, this Court must
      ascertain whether there exists a “rational connection between the facts
      found and the choice made.” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, 103
      S. Ct. 2856 (internal quotation marks omitted).

Oak Grove Techs., LLC v. United States, 155 Fed. Cl. 84, 115–16 (2021). As noted by a
Judge of this court:

      The United States Court of Appeals for the Federal Circuit has held that an
      agency can base a decision to disqualify a bidder on the appearance of
      impropriety. See NKFEngineering, Inc. v. United States, 805 F.2d 372, 376
      (Fed. Cir. 1986). Whether there is an appearance of impropriety sufficient
      to disqualify a bidder “depend[s] upon the circumstances in each case.” Id.
      There is no appearance of impropriety when “[a] disinterested observer
      knowing all the facts and the applicable law would see nothing improper.” R
      & W Flammann GmbH v. United States, 339 F.3d 1320, 1324 (Fed. Cir.
      2003). But, an appearance of impropriety must be based on “hard facts” and
      not “suspicion and innuendo.” CACI, Inc.–Fed. v. United States, 719 F.2d
      1567, 1581–82 (Fed. Cir. 1983); see also Harkcon, Inc. v. United States,
      133 Fed. Cl. 441, 463–64 (Fed. Cl. 2017) (applying the “hard facts” standard
      to an appearance of impropriety claim).

                                            43
Partner 4 Recovery v. United States, 141 Fed. Cl. 89, 131 (2018) (footnote omitted); Sys.
Plus, Inc. v. United States, 69 Fed. Cl. 757, 768 (2006) (citing NKFEngineering, Inc. v.
United States, 805 F.2d at 376-78) (“Even though the appearance of impropriety can be
a valid reason for disqualifying an offeror, the appearance of impropriety must be based
on actual facts.”).

        KOAM argues “the Navy was required to strictly avoid” an appearance of a conflict
of interest “pursuant to FAR 3.101-1.” FAR 3.101-1 provides:

       Government business shall be conducted in a manner above reproach and,
       except as authorized by statute or regulation, with complete impartiality and
       with preferential treatment for none. Transactions relating to the
       expenditure of public funds require the highest degree of public trust and an
       impeccable standard of conduct. The general rule is to avoid strictly any
       conflict of interest or even the appearance of a conflict of interest in
       Government-contractor relationships. While many Federal laws and
       regulations place restrictions on the actions of Government personnel, their
       official conduct must, in addition, be such that they would have no
       reluctance to make a full public disclosure of their actions.

48 C.F.R. § 3.101-1 (2021); see also Lawrence Battelle, Inc. v. United States, 117 Fed.
Cl. 579, 583 n.4 (2014). Oak Grove Techs., LLC v. United States, 155 Fed. Cl. at 115
(“This FAR provision further instructs that ‘[t]he general rule is to avoid strictly any conflict
of interest or even the appearance of a conflict of interest in Government-contractor
relationships.’ FAR 3.101-1.”) (emphasis in original).

       As discussed above, on February 24, 2022, the contracting officer issued the
Personal Conflict of Interest Memorandum and, the contracting officer concluded: “I find
no conflict of interest affecting the award to McKean.” The contracting officer “found no
evidence” that “Ms. Saucedo participated personally and substantially in the NIEF
Engineering source selection, including development of the statement of work, drafting of
the source selection strategy, request for proposals, or participated in the evaluation of
proposals resulting in the NIEF Contract awarded to McKean,” or that “Ms. Saucedo
disclosed any competitively useful nonpublic information.” The contracting officer also
determined:

       I also found no evidence that Ms. Saucedo provided contractor bid or
       proposal information or source selection information to McKean before the
       award or that McKean obtained contractor bid or proposal information or
       source selection information before the award. Therefore, I find “no impact”
       on the award of the contract to McKean in accordance with FAR 3.104-7(a).
       Additionally, as discussed above, even if there were disclosure of cost
       information as alleged by KES, I do not believe that such cost information
       would have provided a competitive advantage due to the nature of the cost
       evaluation. Although some may believe there is an appearance of
       impropriety based upon Ms. Saucedo’s position as COR and her
       relationship with a McKean employee, the above information, findings and

                                               44
       conclusions, do not support any actual impropriety. I do not believe the
       appearance of impropriety by itself sufficient to impact the award of the
       contract to McKean given all of the above.

KOAM states “[t]he Navy’s PCI Memorandum reached six conclusions,” as described
immediately above, and “[t]he Navy’s first four conclusions, as documented in paragraphs
35 and 36 of the PCI Memorandum, addressed whether Ms. Saucedo and McKean acted
in a criminal manner and whether McKean had an unfair competitive advantage.”8
Protestor argues

       it was important for the Navy to consider whether Ms. Saucedo or McKean
       acted in a criminal manner and whether McKean had an unfair competitive
       advantage, such findings do not address whether there was an appearance
       of a conflict of interest that the Navy was required to strictly avoid under
       FAR 3.101-1 and would not negate a finding of an appearance of a conflict
       of interest.

(emphasis in original; alterations added). Protestor continues:

       The Navy’s fifth and sixth conclusions, as documented in paragraph 37 of
       the PCI Memorandum, similarly miss the mark.[9] The only statement in the

8 Specifically, according to KOAM, the first four conclusions in the personal conflict of
interest memorandum were:

       (1) Ms. Saucedo did not participate “personally and substantially” in the
       source selection; (2) Ms. Saucedo did not disclose “competitively useful
       nonpublic information”; (3) Ms. Saucedo did not provide “bid or proposal
       information or source selection information to McKean” and McKean did not
       otherwise obtain such information prior to award; (4) even if disclosure of
       such information occurred, the information would not provide a “competitive
       advantage” to McKean[.]

(internal references omitted; alteration added).
9Protestor claims the five and sixth conclusions in the personal conflict of interest
memorandum were

       (5) “[a]lthough some may believe there is an appearance of impropriety
       based upon Ms. Saucedo’s position as COR and her relationship with a
       McKean employee, the above information, findings and conclusions, do not
       support any actual impropriety”; and (6) “I do not believe the appearance of
       impropriety by itself sufficient to impact the award of the contract to McKean
       given all of the above[.]”

(internal reference omitted; first alteration in original).

                                               45
       PCI Memorandum that attempted to address whether there was an
       appearance of a conflict was the Contracting Officer’s conclusory statement
       that he did “not believe the appearance of impropriety by itself sufficient to
       impact the award of the contract to McKean given all of the above.” The
       Contracting Officer appears to be acknowledging that an “appearance of
       impropriety” exists, yet asserting that the appearance is not “sufficient to
       impact the award” to McKean. The Contracting Officer’s conclusion
       regarding the impact appears to be based on the immediately preceding
       sentence, which provides that, “[a]lthough some may believe there is an
       appearance of impropriety based upon Ms. Saucedo’s position as COR and
       her relationship with a McKean employee, the above information, findings
       and conclusions, do not support any actual impropriety.” The “above
       information, findings and conclusions” refer to the first four conclusions,
       which, as discussed, only addressed whether Ms. Saucedo and McKean
       acted in a criminal manner and whether McKean had an unfair competitive
       advantage under FAR 9.505(b). By focusing on whether there was “any
       actual impropriety,” and basing the conclusion of whether there was an
       appearance of impropriety on whether there was an actual impropriety, the
       Navy entirely failed to consider an important aspect of the problem.

(emphasis in original; internal references omitted). Therefore, protestor argues: “Allowing
the Navy to find that there was no appearance of a conflict of interest based on the alleged
lack of an actual conflict would essentially read the ‘appearance of a conflict of interest’
language out of FAR 3.101-1.” Intervenor argues

       KOAM’s argument that these six conclusions prove that the Agency did not
       consider whether there was an appearance of a COI is disproven by the
       plain language of the PCI Memorandum; the Navy obviously considered
       whether there was an appearance of impropriety given this concept is
       mentioned multiple times in the PCI Memorandum:

              Although some may believe there is an appearance of
              impropriety based upon Ms. Saucedo’s position as COR and
              her relationship with a McKean employee, the above
              information, findings and conclusions, do not support any
              actual impropriety.

       Tab 36c at AR2746 (emphases added); see id. at 2738. KOAM merely
       disagrees with the Navy’s conclusion that there was no appearance of a
       COI—a determination found reasonable by the GAO. While KOAM attempts
       to treat the CO’s statement contained in the PCI Memorandum explaining
       that “I do not believe the appearance of impropriety by itself sufficient to
       impact the award of the contract to McKean given all of the above” as an
       admission that an appearance of a conflict exists, this argument completely
       ignores the preceding sentence in the PCI Memorandum, noting that while

                                            46
       “some may believe there is an appearance of impropriety,” the CO himself
       did not.

(emphasis in original). Protestor responds

       The referenced quotation from the PCI Memorandum, however, does not
       demonstrate that the Navy considered whether there was an appearance
       of impropriety that it needed to strictly avoid. As discussed above, “a factual
       inquiry into whether an actual impropriety has transpired is unnecessary”
       because the issue is whether the facts support an appearance of an
       impropriety, not whether there is an actual impropriety. See Compliance
       Corp., 22 Cl. Ct. at 199. Thus, the Navy’s conclusion regarding an actual
       impropriety in no way answers the question of whether there was an
       appearance of an impropriety that the Navy needed to strictly avoid.
       Moreover, the Navy was required to undertake the appearance analysis in
       order to determine whether it had complied with FAR 3.101-1, and it was,
       therefore, arbitrary and capricious for the Navy to fail to do so.

(emphasis in original). As noted by defendant,

       KOAM unreasonably faults the Navy for not conducting a separate
       “appearance analysis” of impropriety to determine whether there was an
       appearance of a COI rather than an actual COI. KOAM Reply at 15-16.
       Common sense dictates that if an appearance of a COI is alleged, then an
       investigation must necessarily consider whether there is an actual COI. In
       its one-page argument, KOAM tellingly offers no suggestions on how the
       Court could even differentiate an apparent COI investigation from that of an
       actual COI investigation. Id. Perhaps that is because an appearance of a
       COI investigation is necessarily subsumed into an actual COI investigation;
       thus, the Court should reject this argument.

KOAM does not explain what a separate “appearance analysis” would encompass, or
how it would differ from the conflict of interest investigation undertaken by the contracting
officer in the above captioned bid protest except to conduct in-person interviews of Mr.
and Ms. Saucedo rather than accepting sworn declarations, in-depth email review, and
consultation with a designated agency ethics official.10 Although a contracting officer’s
conflict of interest investigation and conclusions about possible conflicts can prove to be
insufficient, based on the facts presented, the court does not create a blanket rule that
any conflict of interest investigation must be segregated into an actual conflict
investigation and an apparent conflict investigation. Nor can the court determine, as
argued by KOAM, that based on the contracting officer’s investigation and conclusions
that no investigation into an apparent conflict of interest occurred. As identified at the end
of the contracting officer’s analysis, the contracting officer in the above captioned protest
indicated, perhaps with inartful wording:
10As discussed below, KOAM challenges these aspects of the contracting officer’s
conflict of interest investigation.

                                             47
      Although some may believe there is an appearance of impropriety based
      upon Ms. Saucedo’s position as COR and her relationship with a McKean
      employee, the above information, findings and conclusions, do not support
      any actual impropriety. I do not believe the appearance of impropriety by
      itself sufficient to impact the award of the contract to McKean given all of
      the above.

The court interprets “given all of the above” to refer to all the findings made by the
contracting officer and any possible impact on the procurement discussed in the lengthy
Personal Conflict of Interest Memorandum.

        Furthermore, the beginning of the analysis in the Personal Conflict of Interest
Memorandum cited to the statutory and regulatory guidance for both actual and apparent
conflicts of interest. The Personal Conflict of Interest Memorandum stated:

      PCI ANALYSIS

      Authority: 41 U.S.C., Chapter 21, Restrictions on Obtaining and Disclosing
      Certain Information, Federal Acquisition Regulation (FAR) Part 3.1; 18
      U.S.C. § 208 Acts affecting a personal financial interest, 5 CFR Part 2635.
      Additionally, the following is a brief overview of some of the main regulations
      relevant to this analysis:

      1. FAR 2.101, which implements 41 U.S.C. § 2101, defines “Source
      Selection Information” to include: “Other information marked as ‘Source
      Selection Information – See FAR 2.101 and 3.104’ based on a case-by-
      case determination by the head of the agency or the contracting officer, that
      its disclosure would jeopardize the integrity or successful completion of the
      Federal agency procurement to which the information relates.”

      2. FAR Subpart 3.101-1 states: “Government business shall be conducted
      in a manner above reproach and, except as authorized by statute or
      regulation, with complete impartiality and with preferential treatment for
      none. Transactions relating to the expenditure of public funds require the
      highest degree of public trust and an impeccable standard of conduct. The
      general rule is to avoid strictly any conflict of interest or even the
      appearance of a conflict of interest in Government-contractor relationships.
      While many Federal laws and regulations place restrictions on the actions
      of Government personnel, their official conduct must, in addition, be such
      that they would have no reluctance to make a full public disclosure of their
      actions.”

(capitalization and emphasis in original). The contracting officer was aware and
considered 18 U.S.C. § 208, FAR Part 3.1, and FAR 3.101-1 when conducting his conflict
of interest investigation.

                                            48
       Turning to the specific facts of the award to McKean, KOAM also argues:

       The administrative record reflects that there was the appearance of a
       significant personal conflict of interest that was based on the fact that
       McKean drafted its proposal with assistance from a key person (i.e., Mr.
       Saucedo) who was married to, living with, and working in the same house
       as a Navy Contracting Officer Representative (i.e., Ms. Saucedo) who had
       ongoing access to, and knowledge of, KOAM’s confidential cost and pricing
       data and contract performance data, as well as source selection information
       relating to the procurement under the Solicitation.

(emphasis in original). In response, defendant argues that “the Court should find that
there is not a shred of evidence that Ms. Saucedo shared proprietary information with her
husband.” Intervenor argues “[d]espite KOAM’s unsupported claims to the contrary, the
Agency properly determined there was no conflict surrounding Mr. and Ms. Saucedo’s
marriage.” (alteration added).

        Protestor cites to no regulation or statute that provides marriage, or individuals
living shared quarters, creates an apparent conflict of interest in and of itself. In the above
captioned protest, Mr. and Ms. Saucedo took a number of steps to avoid even the
appearance of a conflict of interest, specifically, separate home office spaces, restricted
access to Ms. Saucedo’s computer, seriously restricting discussion of her work, and
awareness by Ms. Saucedo’s colleagues of Mr. Saucedo’s employment. The court
acknowledges the language in the recent United States Court of Federal Claims decision
in Appsential , LLC v. United States, stated: “Appsential is correct that a marriage between
an agency employee and an employee of an offeror could create the appearance of a
conflict of interest, as noted by the contracting officer.” Appsential, LLC v. United States,
153 Fed. Cl. 610, 619 (2021). In Appsential, however, the court explained the individuals
were

       [***], a division director in DOE’s [Department of Energy’s] Office of the
       Chief Financial Officer, is married to [***], who is a Principal Solutions
       Architect at GDIT [General Dynamics Information Technology, Inc.]. Early
       on, [***] was involved in drafting and reviewing documents related to this
       solicitation. [***], specifically, “provided input into one of the six order
       Performance Work Statements ... and reviewed the Independent
       Government Cost Estimate” between March and May of 2018.

Id. at 618 (second and fourth alterations added; internal references omitted). The
individuals in Appsential, therefore, appeared to have been critically involved in the
procurement for both the government and an offeror with one individual drafting
documents related to the solicitation and reviewing the Independent Government Cost
Estimate before the Department of Energy issued a request for quotations for the
solicitation at issue in Appsential. After recusals of one of the individuals in Appsential:

                                              49
       The contracting officer conducted a review of the potential OCI on February
       4, 2020. The contracting officer interviewed [***], reviewed the documents
       that [***] had worked on, and discussed the situation with the prior
       contracting officer. While the contracting officer determined that there were
       “no substantial changes” in the documents between the time [***] worked
       on the documents and when the RFQ was publicly released in November
       2019, the documents had gone “through multiple subsequent reviews”
       following [***]’s recusal, “and contain[ed] similar requirements to prior IT
       contracts issued to meet DOE's needs,” Ultimately, the contracting officer
       determined that there was no “substantial risk to the integrity of the
       competition, or unfair competitive advantage, nor [was] there risk to the
       government that could outweigh a potential award to GDIT.”

Id. (alterations in original; internal references omitted). The Judge in Appsential ultimately
reasoned:

       The contracting officer determined, after review of the circumstances, that
       “no additional steps [needed] to be taken to mitigate this possible OCI.” The
       court does not find that the contracting officer's decision was unreasonable.
       The administrative record indicates that the prior contracting officer did not
       believe additional actions were necessary beyond [***]’s recusal.
       Additionally, the contracting officer thoroughly investigated the matter,
       determined that mitigation efforts already taken were sufficient, and
       recommended additional steps should GDIT be awarded the contract. While
       Appsential suggests additional steps that the contracting officer could have
       taken, the absence of these actions no not render the contracting officer's
       conclusion arbitrary and capricious.

Id. at 619 (alterations in original; internal references and footnote omitted). Therefore, the
Judge in Appsential concluded: “Without more than this speculation, Appsential has failed
to meet its burden of identifying the requisite facts in the administrative record that support
its claim that GDIT had an unequal access to information OCI.” Id.

       In the bid protest now under review in this court, there is no suggestion that either
Mr. Saucedo or Ms. Saucedo was as critical to the procurement as the individuals in
Appsential, which is borne out by the information in Ms. Saucedo’s initial response to the
Navy’s email questions and in the sworn declarations of both Mr. Saucedo and Ms.
Saucedo, nor has KOAM presented any hard information that either Mr. Saucedo or Ms.
Saucedo played a critical role during the development of the RFP or the evaluation of the
proposals received, as discussed below. In his sworn declaration, Mr. Saucedo notes that
“I have never served as an executive of McKean Defense Group, LLC or Noblis. Instead,
I am a Senior Systems Engineer. In its proposal in response to the Solicitation, Noblis
proposed me in a key personnel role as Senior Systems Engineer.” Mr. Saucedo further
declared:

       16. In the Summer of 2021, I provided input on discrete technical matters
       during the drafting of McKean Defense’s (now Noblis) technical proposal

                                              50
      submitted in response to the Solicitation. Specifically, I provided early input
      regarding rack configuration and installation technical drawings, system
      development, and installation processes given my expertise as a production
      engineer. While the inputs I provided on such technical matters were used
      to draft portions of Noblis’ technical proposal, I did not myself draft the final
      technical section of the proposal, nor did I review the technical proposal
      before submission.

      17. I was never contacted or asked to provide any input whatsoever on
      Noblis’ cost/price proposal submitted in response to the Solicitation, nor did
      I ever provide any input on the cost/price proposal whatsoever. I neither
      viewed nor had access to Noblis’ cost/price proposal or any cost details
      used as inputs for that cost/price proposal prior to submission. In fact, to
      this day I have never seen the details of this cost/price proposal.

      18. I was not involved in any way in Noblis’ decision to compete under the
      Solicitation.

Ms. Saucedo declared in her declaration:

      I did not have any involvement in drafting the requirements for Request for
      Proposal (RFP) N66001-21-R-0041, nor did I have access to the solicitation
      package. I did not have any role/involvement or have any discussion/access
      to information related to the requirements, development of the
      RFP/solicitation, Independent Government Cost Estimate (IGCE),
      acquisition strategy, development of source selection criteria, evaluation of
      proposals or the award decision.

    Protestor, in its motion for judgment on the Administrative Record, however, cites to
the following what it describes as “hard facts,” to demonstrate there was an appearance
of a conflict of interest in this protest: “Mr. Saucedo was involved in the preparation of
McKean’s proposal submitted in response to the Solicitation,” “Ms. Saucedo had access
to KOAM’s cost and pricing data and performance data under the incumbent contract,”
and “Ms. Saucedo was involved in, and had access to information relating to, the Navy’s
procurement under the Solicitation, including source selection information.” From these
facts, protestor argues:

      In sum, Ms. Saucedo’s access to KOAM’s incumbent rate and performance
      information and her access to sensitive information regarding, and
      involvement in, the Navy’s procurement under the Solicitation, coupled with
      her husband’s involvement in the preparation of the awardee’s proposal and
      role as a key personnel, created an appearance of a conflict of interest that
      the Navy, pursuant to FAR 3.101-1, should have strictly avoided. Given that
      the Saucedos were working full-time in their shared home throughout the
      procurement, Ms. Saucedo could have easily shared the information with
      Mr. Saucedo.

                                             51
Defendant responds that

       the record contains no hard facts that Mr. Saucedo gained access to
       KOAM’s incumbent information. Although Mr. Saucedo confirmed he had
       some input on some engineering aspects of McKean’s proposals and was
       listed as a key person as a senior systems engineer, he declared under
       oath that he did not talk about McKean’s proposal with his wife and had no
       input on McKean’s cost proposal. Nor did he discuss any of the cost aspects
       of KOAM’s incumbent contract with his wife, or have any access to his wife’s
       Navy computer, despite working from the same home during the COVID-19
       pandemic.

(emphasis in original; internal references omitted). In his sworn declaration, Mr. Saucedo
declared:

       8. My wife and I do not discuss her management of contracts. Accordingly,
       I am not aware of my wife's specific duties as a COR regarding
       administration of KES's incumbent contract. I do know that she has never
       shared with me any proprietary or sensitive information of a contractor that
       she oversees, including KES.

       Access to or Knowledge of KES’s Proposal

       9. KES’s protest alleges that “[a]s a COR for the incumbent contract,
       [redacted], [she] may have participated personally and substantially in the
       subject procurement . . .” That allegation is incorrect. Redacted Protest at
       28. My wife and I do not discuss her role, if any, in the evaluation of
       proposals or award decision resulting in a contract being awarded to Noblis
       under the current Solicitation.

       10. I have never had access to, viewed, nor possessed any portion of or
       information regarding KES’s proposal for the NIEF contract at any time,
       either under the incumbent effort or the proposal KES submitted under
       current Solicitation for this effort.

       11. My wife and I have not discussed KES’s proposal under the current
       Solicitation. To the best of my knowledge, my wife is not involved in the
       protested procurement and I am not aware that she has access to KES's
       proposal or the evaluation thereof. Nor have I ever received or been told
       any information regarding KES’s price or costs under KES’s incumbent
       contract by my wife.

(capitalization and emphasis in original).

       Additionally, defendant challenges KOAM’s “hard facts” by arguing that

                                             52
      there is nothing to support KOAM’s argument that Ms. Saucedo’s access to
      information under its incumbent contract presents an appearance of a
      conflict of interest. It is undisputed that as one of eight to nine contracting
      officer representatives under the KOAM incumbent contract, Ms. Saucedo
      would have had access to the task orders she oversaw. But KOAM points
      to no hard facts that she actually shared any proprietary information with
      her husband gleaned from her role as a contracting officer representative;
      rather, the only evidence is that Ms. Saucedo cooperated with full candor
      within 24 hours to responding to a series of questions, and that both Mr.
      and Ms. Saucedo declared under oath that Ms. Saucedo has never shared
      any proprietary information.

(emphasis in original; internal references omitted). As referenced above, in response to
the questions raised by the contract specialist: “Did you ever discuss your work as a COR
on the KES contract with Mr. Saucedo? How often? What types of things concerning the
contract were discussed?” Ms. Saucedo responded: “The only thing I have discussed with
Mr. Saucedo regarding my work at the NIEF is high level project details, never have
discussed my role as COR or the details of that work.” Similarly, in response to the
contract specialist questions: “What non-public information, if any, did you share with Mr.
Saucedo and when? For example, did you ever discuss labor rates such as pay between
KES and McKean?” Ms. Saucedo answered: “I have never discussed any labor rates or
any other financial contract information with Mr. Saucedo.” In her declaration, under
penalty of perjury, Ms. Saucedo stated:

      I have never discussed my role as COR or the details of that work with my
      husband. I have never disclosed any third party proprietary information, like
      KES or its subcontractors’ labor rates, or any other financial or contract
      information with Mr. Saucedo. The only thing I have discussed with Mr.
      Saucedo regarding my work at the NIEF is very high-level project details.

      In Mr. Saucedo’s declaration, under penalty of perjury, he stated:

      My wife and I do not discuss her management of contracts. Accordingly, I
      am not aware of my wife's specific duties as a COR regarding administration
      of KES's incumbent contract. I do know that she has never shared with
      me any proprietary or sensitive information of a contractor that she
      oversees, including KES.

      Separately, KOAM argues

      The Independent Government Cost Estimate that Ms. Saucedo had access
      to also was competitively valuable. The Independent Government Cost
      Estimate, which was not disclosed to offerors, utilized historical pricing
      information from the incumbent contract to provide a forecasted value of
      $221,340,961.00 for the procurement. Tab 36.a at AR 2634. Having access

                                            53
      to the Independent Government Cost Estimate, or knowledge of the
      estimated value, would have provided McKean with a benchmark in terms
      of price.

The court notes that protestor does not cite to any “hard facts” that suggest Ms. Saucedo
provided the Independent Government Cost Estimate to Mr. Saucedo. Intervenor notes
that protestor’s argument relies in part on a PowerPoint presentation, which as intervenor
argues, took place ”three months after the Agency received KOAM’s and McKean’s cost
proposal.” Intervenor also argues that

      [w]hile KOAM asserts that the presentation contains source selection
      information, it is neither marked as containing source selection sensitive
      information, nor does it reference an IGCE. Rather, it contains only a
      bottom-line “predicted value” of the Solicitation in the amount of $221M,
      which is $341K lower than the IGCE of $221,340,961. This chart does not
      support KOAM’s assertion, and is not a “hard fact” proving a COI. Notably,
      KOAM has not explained how it would have been prejudiced by Ms.
      Saucedo’s knowledge of a “predicted value” of the procurement shared
      three months after final proposals were submitted, where (1) the RFP
      provided that an offeror’s cost would be evaluated on adjusted rather than
      proposed costs, (2) for all but three employees, McKean proposed its
      employees actual salaries, and (3) offerors did not have the opportunity to
      amend their proposed approaches or costs following the presentation.
      Moreover, KOAM cannot demonstrate prejudice where both it and
      McKean’s proposed and evaluated costs were significantly below the IGCE.

(emphasis in original; internal references omitted; alteration added). Defendant also
argues “it was not improper for Ms. Saucedo to have access to the estimated value of the
IGCE, because there was similarly no evidence that she had access to the IGCE itself.”
(emphasis in original). The court finds no basis to question the contracting officer’s
conclusions in the Personal Conflict of Interest Memorandum regarding Ms. Saucedo’s
access to relevant information about the RFP including the Independent Government
Cost Estimate.

      KOAM separately suggests

      the Navy was not aware of the potential conflict of interest prior to award
      because neither Ms. Saucedo, nor McKean, raised the potential issue, even
      though “Ms. Saucedo was aware of Mr. Saucedo’s company competing on
      the requirement.”. Ms. Saucedo’s lack of candor regarding her potential
      financial interest in an award to McKean further contributed to the
      appearance of a personal conflict of interest.

(internal references and footnote omitted). The court notes that the contracting officer’s
conclusions in the Personal Conflict of Interest Memorandum stated:

                                           54
       The PCI investigation revealed that although Ms. Saucedo has not
       discussed Mr. Saucedo’s job with her co-workers, Ms. Saucedo along with
       some fellow co-workers knew he worked for Cabrillo, which is a unit within
       McKean and now owned by Noblis-MSD. Mr. Saucedo does not work on
       any projects or programs that Ms. Saucedo is involved in with the NIEF.

       The PCI investigation revealed Ms. Saucedo was aware of Mr. Saucedo’s
       company competing on the requirement. Ms. Saucedo stated, “I did know
       the company was developing a proposal for this contract, Mr. Saucedo told
       me. I am not sure when the contract actually went out for bidding but I knew
       before the proposal was submitted. Other than knowing they were
       developing a proposal, we did not have any other discussion about the
       contract.”

In addition, intervenor argues that “Ms. Saucedo did disclose Mr. Saucedo’s employment
annually on her Office of Government Ethics Form 450 pursuant to her Designation of
Contracting Officer’s Representative - Ms. Saucedo could not possibly have lacked
candor when she disclosed her marriage and Mr. Saucedo’s employment to the US
government.” (internal reference omitted). The contracting officer determined, on
balance, in the Personal Conflict of Interest Memorandum that Ms. Saucedo’s relationship
did not rise to an actual or apparent conflict of interest that required further action. The
court does not disturb the contracting officer's conflict of interest determination.

       Protestor also argues that

       the Navy’s “interviewing” and fact-gathering processes were carried out in
       a perfunctory manner. Critically, the investigation did not include interviews
       with the two individuals at the center of the allegations (i.e., the Saucedos).
       Instead, the Navy relied on a written email response that Ms. Saucedo had
       less than twenty-four hours to prepare, see Tab 36.c at AR 2750-54, and
       self-interested declarations from the Saucedos in which they denied acting
       in a criminal manner.

KOAM also contends that the “Navy unreasonably failed to conduct any document or
email review in connection with its investigation, aside from ‘a review of internal
contractual documentation.’” KOAM argues that “[d]ocument and email review is a
routine, and often initial, investigatory step, and it could have been used to test the Navy’s
conclusions that Ms. Saucedo did not participate in the procurement and did not
communicate with Mr. Saucedo regarding the procurement or KOAM.” (alteration added).
Defendant argues that “the contracting officer’s determination was reasonable that the
oral interviews and written responses from all the SSEB members and the declarations
under oath from Mr. and Ms. Saucedo was sufficient.” (emphasis in original).

       A contracting officer has discretion as to how he or she conducts a conflict of
interest investigation, and that discretion is reviewed by this court for arbitrariness and
capriciousness. The contracting officer in the above captioned bid protest concluded that

                                             55
the email exchange between Ms. Saucedo with the contract specialist and the sworn
declarations from both Mr. and Ms. Saucedo, as well as responses from all members of
the Source Selection Evaluation Board was sufficient to reach a decision on the conflict
of interest issues ,both actual and apparent. KOAM, however, argues Ms. Saucedo had
less than 24 hours to respond to the lengthy number of questions posed by the contract
specialist, which forced Ms. Saucedo to respond quickly. The court notes that the answers
offered by Ms. Saucedo in the email exchange are very similar to the statements provided
in her sworn declaration submitted under the penalty of perjury. Although protestor
disagrees with the breadth of the investigation, unless the contracting officer’s
determinations were arbitrary and capricious, mere disagreement is not sufficient for the
court to conclude the investigation was insufficient. See Appsential, LLC v. United States,
153 Fed. Cl. at 619. The Federal Circuit in Oracle America, Inc. v. United States
explained:

      The standard for Claims Court review of a contracting officer’s decision with
      regard to a conflict of interest is highly deferential. A contracting officer's
      conflict of interest determination will be upheld unless it is “arbitrary,
      capricious, or otherwise contrary to law.” PAI Corp. v. United States, 614
      F.3d 1347, 1352 (Fed. Cir. 2010). If the contracting officer's findings are
      rational, they will be upheld on judicial review. See Turner Constr. Co. v.
      United States, 645 F.3d 1377, 1383–87 (Fed. Cir. 2011).

Oracle Am., Inc. v. United States, 975 F.3d at 1296; see also Turner Constr. Co. v. United
States, 645 F.3d at 1386 (citing PAI Corp. v. United States, 614 F.3d at 1352) (“The CO
has considerable discretion in determining whether a conflict is significant.”). The court
concludes that the scope of the contracting officer’s investigation was sufficient.

        Protestor also argues that it “was unreasonable for the Navy to not consider, as
reflected in KOAM’s October 18, 2021 letter to the Navy, allegations that Ms. Saucedo
has, on multiple occasions, defended McKean’s performance under another contract
during Navy meetings based on information she had learned from her husband, which
reflects that Ms. and Mr. Saucedo exchange information regarding their work.” As noted
above, KOAM sent the Navy a letter which stated, in part:

      Following the dismissal of the protest as academic, KES learned that Ms.
      Saucedo has communicated with her husband in the past about ongoing
      Navy programs in which McKean was involved. Specifically, KES has been
      advised that, in multiple meetings in the past, NIEF government project
      leads have discussed problems and concerns regarding the Military Sealift
      Command (“MSC”) program office, on which McKean and Mr. Saucedo
      provide contract support to PMW 160. When the NIEF MSC government
      project lead expressed frustration with the MSC program and its effects on
      the NIEF during weekly meetings of government project leads, Ms. Saucedo
      has spoken up to defend the MSC program based on information she has
      learned from her husband. In other words, Ms. Saucedo clearly has
      information about McKean and her husband’s work on the MSC program
      that is unrelated to her role at the NIEF, and she has shared that information

                                            56
       with NIEF officials in the past in a way that has been helpful to McKean.
       Although this may not, in and of itself, constitute improper behavior, it does
       demonstrate that Mr. and Ms. Saucedo discuss details of their work for the
       Navy and share certain program-related information. Thus, it supports the
       concern about an appearance of impropriety, so we felt compelled to relay
       the information to you.

The contracting officer, however, specifically addressed KOAM’s letter in the February
24, 2022 Personal Conflict of Interest Memorandum. The contracting officer wrote:

       I did not uncover any further information related to KES counsel’s 18
       October 2021 email stating the KES learned that Ms. Saucedo spoke up to
       defend the MSC program, and thereby McKean. The information provided
       was vague, and offered no information as to any dates or timeframes it was
       alleged to have occurred. Ms. Saucedo stated in her declaration that she
       did not recall attending a government or government/contractor meeting
       wherein she discussed Military Sealift Command NIEF related efforts. Given
       the declarations by both Ms. Saucedo and Mr. Saucedo regarding Ms.
       Saucedo not revealing any proprietary information regarding KES to Mr.
       Saucedo, other information detailed above, and KES’ admission that its
       allegation would not constitute improper behavior, I do not find this
       allegation affects my findings. Furthermore, the allegation is more about Mr.
       Saucedo discussing his work with Ms. Saucedo (not the reverse) which is
       not improper. Finally, the discussion of problems or concerns with regards
       to the MSC program office would not provide new or competitively useful
       information that would have given McKean an advantage over KES, who
       has overseen the full scope of work for the NIEF Engineering contract under
       its incumbent contracts.

Based on the facts of the present bid protest, and the deference given to a contracting
officer to conduct a conflict of interest investigation, the court finds it was sufficient and
reasonable for the contracting officer to conclude the investigation as he did. As
articulated by the contracting officer, Ms. Saucedo declared, under penalty of perjury, that
she did not recall attending any meetings discussing the Military Sealift Command NIEF
related efforts and both Mr. Saucedo and Ms. Saucedo declared that Ms. Saucedo did
not provide any proprietary information to Mr. Saucedo. Therefore, it was reasonable for
the contracting officer not to inquire further about unsupported and unspecified allegations
of impropriety raised by protestor.

    Protestor also argues:

       Finally, there is no evidence that the Contracting Officer consulted with the
       designated agency ethics official regarding the alleged conflict. This was a
       significant oversight, as designated agency ethics officials are subject-
       matter experts responsible for, among other things, “[p]roviding advice and
       counseling to prospective and current employees regarding government

                                             57
       ethics laws and regulations” and “[t]aking appropriate action to resolve
       conflicts of interest and the appearance of conflicts of interest.”

(emphasis and alterations in original). Intervenor responds: “Again, KOAM does not cite
any regulatory or statutory requirement for this measure, nor is it required by the FAR.
KOAM merely disagrees with the Navy’s chosen investigation techniques and attempts
to override the Agency’s discretion in determining the proper methodologies for the COI
investigation.” Defendant argues “KOAM offers no authority, nor are we aware of any,
when a contracting officer must consult ethic officials on the basis of an apparent conflict
of interest.” (emphasis in original; internal cites omitted). The court agrees that the
decision not to consult a designated agency ethics official does not render the contracting
officer decision arbitrary or capricious. Given the highly deferential standard this court
applies to the contracting officer's conflict of interest determination, the investigation the
contracting officer undertook, and the documentation in the Personal Conflict of Interest
Memorandum, the court finds the decision not to include the ethics official not dispositive
or irrational given the facts of the bid protest currently before the court. See Turner Constr.
Co. v. United States, 645 F.3d at 1383–87. In Harkcon, Inc. v. United States, 133 Fed.
Cl. 441 (2017), a Judge of the United States Court of Federal Claims determined “the
contracting officer’s finding that there was no appearance of impropriety—and no actual
impropriety, including no OCI or PIA violation—was neither irrational nor contrary to law.”
Id. at 466. The Judge in Harkcon also noted: “Under the ‘“highly deferential” rational basis
view’ that applies in bid protests, CHE Consulting, Inc. v. United States, 552 F.3d 1351,
1354 (Fed. Cir. 2008) (quoting Advanced Data, 216 F.3d at 1058), overturning a
contracting officer's determination that there was no appearance of impropriety should be
done sparingly.” Harkcon, Inc. v. United States, 133 Fed. Cl. at 466. Based on the above
discussion, this court does not find the contracting officer’s decision that there was no
actual conflict or the appearance of a conflict of interest to have been arbitrary or
capricious when he allowed the procurement process to proceed.

        Even if the court were to determine that the contracting officer improperly
concluded that the relationship between Ms. Saucedo and Mr. Saucedo did not create
the appearance of a conflict, which the court pointedly has not, under the holding of Oracle
America, Inc. v. United States, 975 F.3d 1279, the court would still have to find that the
conflict of intertest tainted the procurement or had a significant impact on the procurement
at issue in the protest currently before this court in order to find in favor of protestor.
Defendant also argued that the facts of this protest do not meet “the Oracle test where a
conflict of interest must actually ‘taint’ or ‘significantly impact the procurement.’”

       In Oracle, the Federal Circuit explained:

       The procurement at issue in this case, known as the Joint Enterprise
       Defense Infrastructure (“JEDI”) Cloud procurement, is directed to the long-
       term provision of enterprise-wide cloud computing services to the
       Department of Defense. The JEDI Cloud solicitation contemplated a ten-
       year indefinite delivery, indefinite quantity contract. The Defense
       Department decided to award the contract to a single provider rather than
       making awards to multiple providers. The JEDI Cloud solicitation included

                                              58
       several “gate” provisions that prospective bidders would be required to
       satisfy.

Id. at 1283. Separate from issues related to the gate provisions, the Federal Circuit stated
that

       the Claims Court examined Oracle’s claims that several Department
       officials who were involved in some way with the procurement had conflicts
       of interest, and that Amazon Web Services, Inc., (“AWS”), one of the
       bidders on the contract, had an organizational conflict, all of which infected
       the procurement. The court addressed the question whether the contracting
       officer had properly assessed the impact of the conflicts on the procurement
       and found that she had. The court then concluded that the contracting
       officer had properly exercised her discretion in finding that the individual and
       organizational conflicts complained of by Oracle did not affect the integrity
       of the procurement.

Id. at 1288. Specifically related to the conflicts of interest, the Federal Circuit further
indicated that

       [w]hen the claimed conflicts surfaced, the contracting officer conducted a
       detailed investigation and made findings as to the conflicts and their effects
       on the procurement. She determined that although there were conflicts of
       interest on the part of two of the employees, those conflicts and the asserted
       conflict on the part of the third employee did not have any effect on the
       procurement.

Id. at 1295 (alteration added). According to the Federal Circuit, after the trial court
reviewed the contracting officer's findings, the Judge of the United States Court of Federal
Claims “concluded that the contracting officer’s investigation was thorough and her ‘no
effect’ determination was reasonable.” See id. To begin its analysis, the Federal Circuit
specifically noted it would “reject Oracle’s argument that the conflicts of interest in this
case invalidate the solicitation regardless of whether they had any effect on the
procurement,” and stated:

       The three former Defense Department employees whose conduct is at
       issue are Deap Ubhi, Anthony DeMartino, and Victor Gavin. Oracle
       challenges the Claims Court's conclusions as to the conflict of interest
       claims with respect to all three employees. Specifically, Oracle contends
       that the conflicted employees influenced the procurement by affecting the
       decision to use a single award and the selection of the gate criteria. While
       we share the views of the contracting officer and the Claims Court that some
       of the conduct at issue is troubling, at the end of the day we agree with the
       Claims Court that the conflict of interest problems of those three individuals
       had no effect on the JEDI Cloud solicitation.

                                             59
Id. at 1296-97. The Federal Circuit fist addressed Deap Ubhi:

      Mr. Ubhi was employed by AWS until January 2016. After a period of time
      working for the Defense Department between August 2016 and November
      2017, he returned to AWS. The contracting officer found that during Mr.
      Ubhi's tenure in the Department, he was involved in marketing research
      activities for the JEDI Cloud procurement and that he participated in drafting
      and editing some of the first documents shaping the procurement. In
      October 2017, Mr. Ubhi advised the Department that a company he had
      founded might be engaging in discussions with Amazon, the owners of
      AWS, and that he was recusing himself from further involvement in the JEDI
      Cloud procurement. The contracting officer subsequently concluded that
      Mr. Ubhi’s involvement in the procurement did not materially impact the
      procurement, for several reasons: the restrictions on his involvement based
      on his prior employment had expired by the time he began working on the
      procurement; his participation in the procurement was limited; and he
      promptly recused himself when the potential conflict arose.

      It was later determined that the reason Mr. Ubhi gave for his recusal was
      false, and that instead he was negotiating for employment with AWS during
      the period before his recusal. When that fact came to light, the contracting
      officer reassessed the impact of Mr. Ubhi’s actions in light of the new
      information. While the contracting officer found that Mr. Ubhi’s behavior was
      troubling, she again determined that Mr. Ubhi's conflict of interest had not
      tainted the JEDI Cloud procurement. The Claims Court agreed with the
      contracting officer that Mr. Ubhi's behavior was troubling. The court agreed
      with the contracting officer that despite being aware of his ethical
      obligations, Mr. Ubhi ignored them and remained involved in the
      procurement when he should not have been.

      The situation with respect to Mr. Ubhi is more complex than is the case for
      the other alleged conflicts of interest. As the contracting officer recognized,
      his behavior was “disconcerting,” as he was aware of his ethical obligations,
      but “ignored them.” Oracle, 144 Fed. Cl. at 122. The contracting officer
      concluded that Mr. Ubhi had violated FAR 3.101-1 and possibly other
      statutory and regulatory provisions governing conflicts of interest, including
      18 U.S.C. § 208. Nonetheless, the contracting officer and the Claims Court
      noted that when Mr. Ubhi returned to AWS, he did not work on the JEDI
      Cloud proposal team or in AWS’s Federal Business Sector or its DoD
      Programs section. Moreover, the contracting officer found no evidence that
      Mr. Ubhi had shared any information with the team at AWS that was working
      on the JEDI Cloud procurement. The court found that the contracting
      officer's investigation in that regard was thorough and that there was no
      reason to disturb it. The contracting officer also found that even if Mr. Ubhi
      had disclosed nonpublic information to AWS, none of it would have been
      competitively useful. And she found that his seven-week period of work on
      the preliminary planning stage of the JEDI Cloud procurement did not

                                            60
      introduce bias in favor of AWS. The Claims Court found the contracting
      officer's conclusions on those issues to be supported by the record. The
      Claims Court, moreover, found that Mr. Ubhi’s primary role was industry
      liaison; the record did not “warrant attributing to him any serious
      involvement in the technical or security aspects of the gate criteria.” Oracle,
      144 Fed. Cl. at 123.

      Based on its review of the record, the Claims Court found that the
      contracting officer correctly concluded that although Mr. Ubhi should not
      have worked on the JEDI Cloud procurement, his involvement did not affect
      the procurement in any material way. With regard to the decision whether
      to use a single award or multiple awards, the Claims Court noted that the
      Defense Department’s Cloud Executive Steering Group (of which Mr. Ubhi
      was not a member) expressed a preference for a single-award approach
      early on in the process, before Mr. Ubhi’s involvement. Yet even after Mr.
      Ubhi left the Department, “the Deputy Secretary remained unconvinced
      regarding which approach to use,” and the contracting officer recalled that
      as of April 2018, long after Mr. Ubhi was gone, “the single award decision
      was still being vigorously debated.” Oracle, 144 Fed. Cl. at 123–24. Thus,
      the contracting officer concluded that Mr. Ubhi had no effect on the decision
      to use a single-award approach or the fashioning of the gate criteria. The
      Claims Court sustained that judgment.

Oracle Am., Inc. v. United States, 975 F.3d at 1297-98. On appeal, Oracle argued that

      the Ubhi no-impact determination “runs counter to the evidence before the
      agency.” There is no force to this argument. Oracle's contention that Mr.
      Ubhi “deliberately, systematically, and successfully influenced individuals to
      adopt the single-award approach” far outruns the limited evidence Oracle
      cites to support it. First, Oracle cites two separate instant messages in
      which a Department attorney told Mr. Ubhi, “Single is assumed now,” and
      added, “Really glad you were here this week.” That is not evidence that Mr.
      Ubhi's support for a single-award approach was important to the decision.
      Moreover, as the contracting officer found, the evidence shows that the
      issue of single-versus multiple contract awards was debated long after Mr.
      Ubhi's departure from the agency, contrary to the implication in the instant
      message. Second, Oracle cites an instant message from Mr. Van Name in
      which he stated: “The single [vs.] multiple conversation is done. Everyone
      that matters is now convinced; Thursday’s meeting was decidedly clear that
      we are all in favor of a single award.” That message, however, does not
      remotely suggest that Mr. Ubhi’s preference for a single-award approach
      was important to, or otherwise materially affected, the decisionmakers'
      selection. Oracle next argues that the contracting officer was wrong to state
      that there was no evidence that Mr. Ubhi’s participation “had any
      substantive impact on the procurement decisions or documents,” because
      there was evidence that Mr. Ubhi “edited material in October 2017” that the

                                            61
      Department ultimately included in the solicitation. But the contracting officer
      reviewed Mr. Ubhi’s “edits” in detail, and concluded that Mr. Ubhi's
      “influence and direct edits to the documents were minimal.” The contracting
      officer estimated that Mr. Ubhi contributed an estimated 100 changes to the
      Problem Statement, “ranging in significance from formatting and grammar
      to revision of sentences and paragraphs,” which were made as part of a
      group effort. In addition, the contracting officer noted, Mr. Ubhi’s
      participation “contributed a total of eight (8) edits to the [request for
      information], all of which were contained within two sentences.” Contrary to
      Oracle's contention, the evidence amply supports the contracting officer’s
      conclusion that Mr. Ubhi did not materially impact the solicitation,
      particularly with respect to the single-award approach and the gating
      requirements.

      On a separate issue, Oracle briefly contends that the contracting officer was
      wrong to find that there was “no evidence that ... [Mr.] Ubhi obtained or
      disclosed any competitively useful nonpublic information.” In fact, Oracle
      argues, Mr. Ubhi had access to sensitive information, including the JEDI
      Cloud team's Google drive, which he had on his computer. The contracting
      officer, however, found that Mr. Ubhi did not share any competitively useful
      nonpublic information with AWS and was not in a position to do so. The
      contracting officer noted that when Mr. Ubhi was rehired by AWS, he did
      not join AWS’s JEDI Cloud proposal team, but joined the commercial team
      that was not involved in government contracts. Moreover, Mr. Ubhi was
      subject to firewalls within AWS, and the contracting officer reviewed
      numerous affidavits from AWS employees stating that he had not disclosed
      nonpublic information and that he was excluded from any involvement with
      AWS’s JEDI Cloud proposal. In light of the deferential standard of review
      for contracting officers’ findings regarding conflicts of interest, the finding
      that Mr. Ubhi did not share sensitive information with AWS must be
      sustained.

Oracle Am., Inc. v. United States, 975 F.3d at 1300-1301 (alterations in original).
Regarding the second individual,

      Mr. DeMartino was a consultant for AWS before joining the Defense
      Department and therefore was prohibited by applicable ethics rules from
      participating in matters involving AWS throughout his tenure at the
      Department. At the Department he occupied two positions at different times:
      Deputy Chief of Staff for the Secretary of Defense and Chief of Staff for the
      Deputy Secretary. In the course of his duties, Mr. DeMartino had limited
      involvement in the JEDI Cloud procurement. The contracting officer
      characterized Mr. DeMartino’s involvement in the procurement as
      “ministerial and perfunctory” and noted that he “provided no input into the
      JEDI Cloud acquisition documents.” The contracting officer noted that the
      Department’s Standards of Conduct Office had determined that “Mr.

                                            62
      DeMartino’s involvement in ministerial/administrative actions (such as
      scheduling meetings, editing/drafting public relations,[ ] etc.) did not
      constitute participating in the JEDI Cloud acquisition itself,” and that Mr.
      DeMartino therefore was not in violation of the applicable ethical standards.
      However, in light of the high visibility of the procurement and in an
      abundance of caution Mr. DeMartino was advised that he should consider
      recusing himself from even ministerial and administrative matters related to
      the JEDI Cloud procurement, and he did so. In light of Mr. DeMartino’s
      limited role, the contracting officer concluded that his activities “did not
      negatively impact the integrity” of the procurement.

      The Claims Court upheld that determination, finding that none of the facts
      in the case contradicted the contracting officer's determination that Mr.
      DeMartino’s involvement with the JEDI Cloud project had no substantive
      impact on the procurement. According to the court, the contracting officer
      rationally determined that Mr. DeMartino “was merely a go-between for the
      Deputy Secretary and did not have substantive input into the structure or
      content of the solicitation.” Oracle, 144 Fed. Cl. at 121. The court found that
      Mr. DeMartino “did not have a voice in whether DoD should use a single or
      multiple award approach and did not craft the substance of the evaluation
      factors.” Id.

      Oracle contends that the contracting officer failed to consider an important
      aspect of the problem and that her conclusions were contrary to the
      evidence. Oracle points to various communications among Department
      officials, including Mr. DeMartino, and a draft public statement relating to
      the JEDI Cloud procurement that Mr. DeMartino participated in editing. The
      evidence cited by Oracle does not establish that Mr. DeMartino was
      significantly involved in crafting the substance of the procurement. We
      conclude that the record supports the contracting officer's finding, upheld
      by the Claims Court, that Mr. DeMartino’s role in the procurement was
      limited, largely nonsubstantive, and did not significantly impact the
      procurement.

Oracle Am., Inc. v. United States, 975 F.3d at 1301-1302 (alterations in original; footnote
omitted).

      Finally, for the third individual challenged by Oracle:

      During the procurement, Mr. Gavin was a Deputy Assistant Secretary of the
      Navy. Between August 2017 and January 2018, he discussed retirement
      plans with an AWS recruiter. In October 2017, he attended a meeting of the
      Cloud Executive Steering Group, which was planning the JEDI Cloud
      procurement, to share the Navy's experience with cloud services. In
      January 2018, he submitted a Request for Disqualification from Duties,
      asking that he be excluded from matters affecting the financial interests of

                                            63
AWS. Later that month, he interviewed with AWS, and on March 29, 2018,
he was offered a position with AWS, which he later accepted. On April 5,
2018, Mr. Gavin attended a meeting at which the attendees discussed the
Draft Acquisition Strategy for the JEDI Cloud procurement. The contracting
officer attended the same meeting and recalled that Mr. Gavin did not
advocate for any particular vendor but instead advocated for a multiple-
award approach.

After beginning his employment with AWS, Mr. Gavin was instructed by
AWS that he was subject to an information firewall that prohibited him from
disclosing any nonpublic information about the JEDI Cloud procurement to
anyone at AWS. He agreed to comply with the firewall requirement.
Following her investigation of the conflicts of interest involving the JEDI
Cloud procurement, the contracting officer concluded that Mr. Gavin had
violated FAR 3.101 and possibly 18 U.S.C. § 208. But the contracting officer
found that Mr. Gavin's involvement in the JEDI Cloud project did not taint
the procurement. In particular, the contracting officer found that Mr. Gavin
had limited access to the Draft Acquisition Strategy, did not furnish any input
to that document, did not introduce bias into any of the meetings that he
attended, and did not disclose any competitively useful information to AWS.
Although Mr. Gavin spoke with one member of the AWS JEDI Cloud
proposal team before the firewall was instituted, that member and Mr. Gavin
represented that Mr. Gavin had not disclosed any nonpublic information
about the JEDI Cloud procurement.

The Claims Court found that the contracting officer's conclusions regarding
Mr. Gavin were “well-supported.” Oracle, 144 Fed. Cl. at 121. In particular,
the court concluded that the record supported the contracting officer's
findings that Mr. Gavin was involved in the procurement “only to offer his
knowledge of the Navy's cloud services experience,” and was not a member
of any team that was working on the JEDI Cloud procurement. Id. at 121–
22. The court noted that Mr. Gavin did not “assist in crafting the single award
determinations or the technical substance of the evaluation factors.” Id. at
122. At most, the court concluded, Mr. Gavin “attended a few JEDI Cloud
meetings.” Id. Moreover, the court added, Mr. Gavin did not appear to have
obtained any contractor bid or proposal information, nor did he appear to
have introduced any bias toward AWS in the meetings he attended. Id.

The court agreed with the contracting officer that Mr. Gavin had acted
improperly in having a conversation with an AWS employee about the JEDI
Cloud procurement after Mr. Gavin began working for AWS. The court
found, however, that the contracting officer had “reasonably determined that
Mr. Gavin simply did not have access to competitively useful information to
convey to AWS.” Id. at 122. Oracle argues that the Claims Court's statement
that Mr. Gavin did not have access to competitively useful information to
convey to AWS is contrary to the contracting officer's findings that Mr. Gavin

                                      64
       had access to the draft Acquisition Strategy in April 2018. That draft
       Acquisition Strategy, according to the contracting officer, contained
       nonpublic information that could be competitively useful. The Claims Court
       observed, however, that by the time Mr. Gavin began working at AWS, the
       draft request for proposals had been released. The draft request for
       proposals, the court explained, provided AWS “access to the relevant
       information that also appeared in the draft Acquisition Strategy.” Id. The
       court's observation that the information in the draft Acquisition Strategy had
       become public by the time Mr. Gavin began working for AWS thus provided
       support for the contracting officer's finding that Mr. Gavin did not disclose
       any competitively useful nonpublic information to AWS; it did not reflect a
       conflict between the findings of the contracting officer and the decision of
       the Claims Court.

Oracle Am., Inc. v. United States, 975 F.3d at 1302-1303.

       Regarding Oracle, defendant in the above captioned bid protest argues:

       Analysis of the involvement of two other employees also revealed
       insignificant involvement, such that it did not “taint the procurement” or
       “significantly impact the procurement.” But even though the one employee
       violated FAR 3.101-1, and possibly other statutes, the Court determined
       that this individual “did not furnish any input to the Draft Acquisition Strategy
       [document], did not furnish any input to that document, did not introduce
       any bias into any of the meetings that he attended, and did not disclose any
       competitively useful information to AWS.” Thus, there was no conflict of
       interest.

(alteration in original; citations omitted). In response, KOAM contends that

       whether an agency violated FAR 3.101-1 based on a failure to strictly avoid
       an appearance of a conflict of interest was not at issue in Oracle. Rather,
       the conflict-of-interest issues in Oracle fall into two categories: (1) alleged
       violations of the criminal conflict-of-interest statute, 18 U.S.C. § 208; and (2)
       the impact of alleged violations of the Procurement Integrity Act, 41 U.S.C.
       §§ 2101–2107, on the procurement pursuant to FAR 3.104-7.

Protestor also argues that “[n]otably, the protestor’s briefs filed before the Federal Circuit
in Oracle did not argue that the procurement should be invalidated because the agency
failed to avoid an appearance of a conflict of interest pursuant to FAR 3.101-1.” (alteration
added). Therefore, KOAM contends that “Oracle does not graft an ‘impact the
procurement’ requirement onto the unambiguous language in FAR 3.101-1 that an
agency must strictly avoid the appearance of a conflict of interest.” Intervenor responds
that

                                              65
       Even though Oracle involved an agency’s analysis of whether action was
       needed in light of an appearance of impropriety under FAR 3.101-1 (which
       KOAM’s complaint alleges, ECF 22 at ¶4) KOAM insists that Oracle is
       irrelevant because the protester there did not specifically allege a violation
       of FAR 3.101-1 and instead relied on the Procurement Integrity Act. ECF
       33, at 11-13. KOAM also offers a detailed discussion of portions of the
       Oracle decision that neither McKean nor the United States mention, and
       which are wholly irrelevant to this case. Neither argument changes the
       Federal Circuit’s holding.

Similarly, defendant counters, referring to the Oracle decision:

       As an overarching matter, KOAM incorrectly argues that Oracle is
       inapplicable because it allegedly did not involve a violation of FAR 3.101-1,
       because only the criminal COI statute, 18 U.S.C. § 208, and the
       Procurement Integrity Act, 41 U.S.C. §§ 2101-2107, were at issue in Oracle.
       KOAM Reply at 11-13. KOAM ignores that the contracting officer’s
       investigation also specifically found violations of FAR 3.101-1, which this
       Court sustained.

(emphasis in original). The court notes that the Judge of the United States Court of
Federal Claims in Oracle concluded regarding Mr. Gavin:

       The CO decided that Mr. Gavin violated FAR 3.101-1, and possibly 18
       U.S.C. § 208 (2012), but that his involvement did not taint the procurement.
       The CO specifically found that he had limited access to the draft Acquisition
       Strategy and did not furnish any input on the document; he did not disclose
       any competitively useful nonpublic information; he did not obtain or disclose
       other bid information to AWS; and he did not introduce bias into the
       meetings he attended. Regarding AWS, she concluded that it had not
       received any competitively useful information or an unfair advantage
       through Mr. Gavin.

Oracle Am., Inc. v. United States, 144 Fed. Cl. 88, 109 (2019), aff’d, 975 F.3d 1279 (Fed.
Cir. 2020), cert. denied, 142 S. Ct. 68 (2021). When evaluating the contracting officer’s
determination the Judge in Oracle determined:

       The CO likewise considered all of the relevant facts regarding Mr. Gavin’s
       involvement. First, her conclusion that “Mr. Gavin violated FAR 3.101-1, and
       possibly violated 18 U.S.C. § 208 and its implementing regulations,” is well-
       supported. The CO properly went on to ask whether, in light of the conflict,
       Mr. Gavin impacted the procurement. The record supports her conclusion
       that Mr. Gavin was involved only to offer his knowledge of the Navy's cloud
       services experience. He was not a member of the Cloud Executive Steering
       Group, Defense Digital Service, the Chief Information Office, or any other
       team tasked with spearheading aspects of this procurement. As far as we
       can tell from the record, he did not assist in crafting the single award

                                            66
       determinations or the technical substance of the evaluation factors. At most,
       he attended a few JEDI Cloud meetings. He does not appear to have
       obtained any contractor bid or proposal information nor does he appear to
       have introduced any bias toward AWS into the meetings he attended. It
       would have been proper for the CO to discount Mr. Gavin's affidavit as she
       did Mr. Ubhi's, because she felt he had violated FAR 3.101-1. Even when
       his involvement is considered without his own assurances that he did not
       act improperly, the CO’s review of the record was reasonable that Mr. Gavin
       was involved solely to offer his past experience with cloud computing
       contracts.

Oracle Am., Inc. v. United States, 144 Fed. Cl. at 121–22. Additionally, the Judge in
Oracle wrote regarding Mr. Ubhi: “First, the CO reached the obvious conclusion that Mr.
Ubhi violated the FAR 3.101-1 requirement that officials “avoid strictly any conflict of
interest or even the appearance of a conflict of interest in Government contractor
relationships” and thus the matter had to be referred to the DoD Inspector General.”
Oracle Am., Inc. v. United States, 144 Fed. Cl. at 122. This court, therefore, disagrees
with protestor that FAR 3.101-1 was not addressed in Oracle. The Federal Circuit also
referred to the contracting officer’s investigation and consideration of FAR 3.101:
“Following her investigation of the conflicts of interest involving the JEDI Cloud
procurement, the contracting officer concluded that Mr. Gavin had violated FAR 3.101
and possibly 18 U.S.C. § 208. But the contracting officer found that Mr. Gavin's
involvement in the JEDI Cloud project did not taint the procurement.” Oracle Am., Inc. v.
United States, 975 F.3d at 1303.

        Although review of agency’s conflicts of interest investigations “are fact-specific
inquiries,” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d at 1381-82, the language
used by the United States Court of Appeals for the Federal Circuit in the Oracle decision
regarding conflicts of interest was broad and not limited to a criminal conflict of interest
statute or the Procurement Integrity Act. As noted above, the Federal Circuit declared it
would “reject Oracle’s argument that the conflicts of interest in this case invalidate the
solicitation regardless of whether they had any effect on the procurement.” Oracle Am.,
Inc. v. United States, 975 F.3d at 1296. As argued by defendant:

       Broadly speaking, KOAM’s interpretation of Oracle’s holding is also
       puzzling. KOAM seems to agree, as it must, that criminal COIs and
       violations of the Procurement Integrity Act must “significantly impact” or
       “taint” a procurement before a procurement decision is set aside. KOAM
       Reply at 11-13. But pursuant to FAR 3.101-1, where the “general rule is to
       avoid strictly any [COI] or even the appearance of a [COI] in Government-
       contractor relationships,” KOAM argues that “an offeror may be disqualified
       based on an appearance of a personal COI, even if there was no improper
       exchange of information.” Id. (emphasis added).

(emphasis and alterations in original). This court agrees with defendant and intervenor
that KOAM’s argument is not grounded in the Federal Circuit’s decision. Both defendant
and intervenor argue convincingly that and if a conflict of interest exists under FAR 3.101,

                                            67
to succeed, a protestor would need to demonstrate the FAR 3.101 conflict “tainted the
procurement.” See Oracle Am., Inc. v. United States, 975 F.3d at 1303. Therefore, the
court cannot subscribe to KOAM’s interpretation of the Oracle decision.

       Even if the contracting officer in the above captioned bid protest had found an
apparent conflict of interest, the Oracle decision argues against a finding in favor of
protestor. As described in the February 24, 2022 Personal Conflict of Interest
Memorandum, the contracting officer determined that “[t]here is no evidence that Ms.
Saucedo participated personally and substantially in the Procurement.” (alteration
added). The contracting officer also indicated:

       The PCI investigation confirmed from multiple sources including the written
       interviews of [redacted] (NIEF Branch Head and SSEB Chair), [redacted]
       (NIEF IPT Lead/Program Manager and initial SSEB Chair), the other SSEB
       members, and Ms. Saucedo (one of several CORs on KES’ NIEF contract,
       N66001-18-D-0075) that Ms. Saucedo did not participate personally or
       substantially, or really in any capacity, with the follow-on NIEF Engineering
       source selection, including with the development of the statement of work,
       drafting of the source selection strategy, drafting the RFP, participating in
       the evaluation of proposals or selecting the awardee resulting in the NIEF
       Contract awarded to McKean.

(capitalization in original; internal reference omitted). The contracting officer’s Personal
Conflict of Interest Memorandum revealed that “[a]ll members of the SSEB (Mr.
[redacted], Mr. [redacted], Mr. [redacted], and Ms. [redacted], and Mr. [redacted])
confirmed that Ms. Saucedo had no role in the evaluation of the proposals,” and the
contracting officer added, “[a]s Contracting Officer for this procurement, to my knowledge
and from my review of the contract file, Ms. Saucedo had no role in any part of this
procurement.” (alteration added). Therefore, the contracting officer wrote:

       The PCI investigation revealed the absence of any PCI concern prior to
       award, since Ms. Saucedo was completely excluded from the acquisition
       planning and throughout the source selection process for the follow-on NIEF
       contract. The concern of impropriety was not a pre-award concern, since
       Ms. Saucedo did not have any role in the source selection process for the
       follow-on NIEF and the evaluation of proposals. Furthermore, the SSEB
       members were not given access to the cost proposals, and therefore, would
       not have known that Mr. Saucedo was listed as a proposed employee for
       McKean. The SSEB did not have any available information in the non-cost
       proposal documents provided for their review to know that Mr. Saucedo was
       either proposed or if he had any involvement with McKean’s proposal. When
       McKean received the follow-on NIEF contract award Ms. Saucedo had a
       discussion with her supervisor that her role would need to change in order
       to avoid any PCI that could arise in administration of the follow-on contract,
       which her husband would be employed under.

                                            68
Further, in the February 24, 2022 Business Clearance Memorandum, the Source
Selection Authority noted that there was “[n]o PCI Found During Investigation,” and
elaborated

       the Contracting Officer found no evidence that: (1) Ms. Saucedo
       participated personally and substantially in any capacity in the NIEF
       Engineering source selection, including development of the statement of
       work, drafting of the source selection strategy and request for proposal, or
       participated in the evaluation of proposals resulting in the NIEF Contract
       awarded to McKean; and (2) Ms. Saucedo disclosed any competitively
       useful nonpublic information, and what information she did possess would
       not have provided a competitive advantage due to the nature of the
       evaluation factors including cost.

(alteration added; internal reference omitted).

        In sum, even if the contracting officer had determined that there was an apparent
conflict of interest as a result of the relationship between Mr. Saucedo and Ms. Saucedo,
given the facts of the protest currently before the court, the contracting officer’s Personal
Conflict of Interest Memorandum demonstrates that the relationship did not taint or
meaningfully impact the procurement as “Ms. Saucedo did not participate personally or
substantially, or really in any capacity, with the follow-on NIEF Engineering source
selection, including with the development of the statement of work, drafting of the source
selection strategy, drafting the RFP, participating in the evaluation of proposals or
selecting the awardee resulting in the NIEF Contract awarded to McKean.” KOAM does
not succeed on its apparent conflict of interest claim under the Oracle framework or
otherwise. Many of protestor’s allegations were speculative based on what could have
happened, not what did happen. For example, as discussed above, KOAM conjectured
that “[g]iven that the Saucedos were working full-time in their shared home throughout
the procurement, Ms. Saucedo could have easily shared the information with Mr.
Saucedo.” (internal reference omitted; alteration added). Protestor also claimed “McKean
could have used KOAM’s direct labor rates to develop the exact staffing approach that
McKean used to win the contract – i.e., a solution that would underbid KOAM by cherry-
picking McKean employees from around the country with labor rates that were lower than
KOAM’s employees.” The court finds that the agency’s determination that there was not
an actual or apparent conflict of interest and the procurement was not tainted by a conflict
was not arbitrary and capricious, and was sufficient to not disqualify McKean from
competing under the RFP. See Oracle Am., Inc. v. United States, 975 F.3d at 1296 (citing
PAI Corp. v. United States, 614 F.3d at 1352).

Cost Realism

        In addition to arguing that there was an the apparent conflict of interest, KOAM
argues “[t]he Navy failed to adjust McKean’s ‘Combined Technical/Risk Rating’ based on
the risk of McKean’s unrealistic staffing approach,” and “[t]he Navy’s decision to not adjust
McKean’s “combined technical/risk rating” based on the risk of its unrealistic staffing

                                             69
approach was arbitrary, capricious, and contrary to law.” (alterations added). Defendant
responds that the “Agency’s Cost Realism analysis was reasonable and in accordance
with the Solicitation.”

         The Federal Circuit in DynCorp succinctly explained: ‘“Cost realism’ asks if a cost
estimate is too low; ‘price reasonableness’ asks if a proposed price is too high.” DynCorp
Int'l, LLC v. United States, 10 F.4th 1300, 1305 (Fed. Cir. 2021). The Federal Circuit in
Agile Defense, Inc. v. United States explained, regarding cost realism:

       The regular view of the Court of Federal Claims, which we approve, is that
       contracting agencies enjoy wide latitude in conducting the cost realism
       analysis. See, e.g., Mission1st Grp., Inc. v. United States, 144 Fed. Cl. 200,
       211 (2019) (“It is well established that contracting agencies have broad
       discretion regarding the nature and extent of a cost realism analysis, unless
       the agency commits itself to a particular methodology in a solicitation.”
       (citation and internal quotation marks omitted)); Dellew Corp. v. United
       States, 128 Fed. Cl. 187, 194 (2016) (“The Agency has demonstrated that
       it considered the information available and did not make irrational
       assumptions or critical miscalculations. To require more would be infringing
       on the Agency’s discretion in analyzing proposals for cost realism.” (citation
       and internal quotation marks omitted)); United Payors & United Providers
       Health Servs., Inc. v. United States, 55 Fed. Cl. 323, 329 (2003)
       (emphasizing that the procuring “agency is in the best position to make [the]
       cost realism determination” (citation and internal quotation marks omitted)).

Agile Def., Inc. v. United States, 959 F.3d 1379, 1385–86 (Fed. Cir. 2020). A Judge of the
United States Court of Federal Claims described:

       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)
       (internal citations omitted) (internal quotations omitted). When reviewing an
       agency's cost realism determination, “the Court defers to those agency
       conclusions that are rational and based on reasoned judgment.” United
       Payors & United Providers Health Servs., Inc. v. United States, 55 Fed. Cl.
       323, 329 (2003).

Perspecta Enter. Sols. LLC v. United States, 151 Fed. Cl. 772, 785 (2020).

       The FAR also provides a framework for the cost realism. The FAR at FAR 15.404-
1(d) states:

       (d) Cost realism analysis.

       (1) Cost realism analysis is the process of independently reviewing and
       evaluating specific elements of each offeror's proposed cost estimate to
       determine whether the estimated proposed cost elements are realistic for

                                            70
      the work to be performed; reflect a clear understanding of the requirements;
      and are consistent with the unique methods of performance and materials
      described in the offeror's technical proposal.

      (2) Cost realism analyses shall be performed on cost-reimbursement
      contracts to determine the probable cost of performance for each offeror.
      (i) The probable cost may differ from the proposed cost and should reflect
      the Government's best estimate of the cost of any contract that is most likely
      to result from the offeror's proposal. The probable cost shall be used for
      purposes of evaluation to determine the best value.
      (ii) The probable cost is determined by adjusting each offeror's proposed
      cost, and fee when appropriate, to reflect any additions or reductions in cost
      elements to realistic levels based on the results of the cost realism analysis.

      (3) Cost realism analyses may also be used on competitive fixed-price
      incentive contracts or, in exceptional cases, on other competitive fixed-
      price-type contracts when new requirements may not be fully understood
      by competing offerors, there are quality concerns, or past experience
      indicates that contractors' proposed costs have resulted in quality or service
      shortfalls. Results of the analysis may be used in performance risk
      assessments and responsibility determinations. However, proposals shall
      be evaluated using the criteria in the solicitation, and the offered prices shall
      not be adjusted as a result of the analysis.

FAR 15.404-1(d) (2021). FAR 15.404-1(c) also provides:

      (c) Cost analysis.

      (1) Cost analysis is the review and evaluation of any separate cost elements
      and profit or fee in an offeror's or contractor's proposal, as needed to
      determine a fair and reasonable price or to determine cost realism, and the
      application of judgment to determine how well the proposed costs represent
      what the cost of the contract should be, assuming reasonable economy and
      efficiency.

      (2) The Government may use various cost analysis techniques and
      procedures to ensure a fair and reasonable price, given the circumstances
      of the acquisition. Such techniques and procedures include the following:
      (i) Verification of cost data or pricing data and evaluation of cost elements,
      including—
      (A) The necessity for, and reasonableness of, proposed costs, including
      allowances for contingencies;
      (B) Projection of the offeror’s cost trends, on the basis of current and
      historical cost or pricing data;
      (C) Reasonableness of estimates generated by appropriately calibrated and
      validated parametric models or cost-estimating relationships; and

                                             71
      (D) The application of audited or negotiated indirect cost rates, labor rates,
      and cost of money or other factors.

FAR 15.404-1(c). FAR 15.305 provides:

      (a) Proposal evaluation is an assessment of the proposal and the offeror's
      ability to perform the prospective contract successfully. An agency shall
      evaluate competitive proposals and then assess their relative qualities
      solely on the factors and subfactors specified in the solicitation. Evaluations
      may be conducted using any rating method or combination of methods,
      including color or adjectival ratings, numerical weights, and ordinal
      rankings. The relative strengths, deficiencies, significant weaknesses, and
      risks supporting proposal evaluation shall be documented in the contract
      file.
      (1) Cost or price evaluation. Normally, competition establishes price
      reasonableness. Therefore, when contracting on a firm-fixed-price or fixed-
      price with economic price adjustment basis, comparison of the proposed
      prices will usually satisfy the requirement to perform a price analysis, and a
      cost analysis need not be performed. In limited situations, a cost analysis
      may be appropriate to establish reasonableness of the otherwise successful
      offeror's price (see 15.403-1(c)(1)(i)(C)). When contracting on a cost-
      reimbursement basis, evaluations shall include a cost realism analysis to
      determine what the Government should realistically expect to pay for the
      proposed effort, the offeror's understanding of the work, and the offeror's
      ability to perform the contract. Cost realism analyses may also be used on
      fixed-price incentive contracts or, in exceptional cases, on other competitive
      fixed-price-type contracts (see 15.404–1(d)(3)). (See 37.115 for
      uncompensated overtime evaluation.) The contracting officer shall
      document the cost or price evaluation.

FAR 15.305(a) (2021).

      The RFP at issue in the above captioned protest contemplated an IDIQ single
award contract with cost-plus-fixed-fee pricing arrangement over a potential five year
performance period, with one base year and four one-year option periods. The RFP
provided that

      The Contractor shall perform work at the contractor’s facilities and/or onsite
      at government facilities and on travel in support of designated activities.
      Because the NIWC Pacific Code 42150 leadership resides in San Diego,
      the majority of the production and PITCO/GAT support will be required to
      be supported within the NIWC Pacific (4301 Pacific Highway, San Diego,
      CA) Area of Responsibility (10 Miles). The majority of engineering support
      is expected to be off site at the contractor facility.

During the evaluation process, the Navy requested McKean to clarify its proposal and
asked:

                                            72
      In order to complete our cost realism analysis additional clarification is
      required. The subject RFP states some of the work is required to be
      performed in the San Diego, CA area. In order to complete our cost realism
      analysis using the actual rates submitted in your cost proposal, we need
      you to clarify for each of the named individuals, where the work was
      performed for the rates submitted.

As indicted above, McKean subsequently provided the requested information. In the
Source Selection Authority’s February 24, 2022 Business Clearance Memorandum, the
Source Selection Authority noted with regards to McKean’s cost proposal:

      McKean combined with their subcontractors proposed all hours and
      overtime hours in accordance with the RFP. McKean proposed prime hours
      on 69% of the overall level of effort in terms of hours. McKean proposed on
      a CPFF [Cost Price Fixed Fee] basis. According to DCAA Audit Report No.
      6151-2015T17741001 dated 6 February 2015, McKean’s accounting
      system was found adequate. Therefore, McKean’s accounting system is
      considered suitable for a cost reimbursement contract. Based on the
      analysis below, McKean’s proposed costs were found to be 3.89% or
      $7,578,076.48 below the realistic cost; therefore, a cost realism adjustment
      was made and McKean’s cost was realized up from $187,467,409.92 to
      $195,045,486.39.

      (i). Prime Direct Labor.
      McKean proposed direct labor rates for 28 labor categories with a list of
      rates for 128 employees. McKean’s direct labor rates were developed by
      using the actual salaries for the proposed current McKean employees or the
      contingent salaries (three employees) for the proposed contingent McKean
      employees, in which signed Letters of Intent were provided. Although
      McKean’s rates were substantiated with corresponding employee payroll
      information, clarifications revealed not all of the payroll information provided
      was for work within San Diego. Twenty of the 128 proposed rates were
      based on actual labor rates for named individuals whose labor rate were
      substantiated by payroll records and whose place of performance of work
      was San Diego, CA, were deemed realistic and reasonable and are shown
      in averages in the first table below. The rates for 108 of the 128 rates
      proposed by McKean were based on work performed outside of San Diego.
      24 of the 108 non-San Diego based rates were found to be equal or above
      the average San Diego Rates identified in the San Diego Rates Utilized for
      Cost Realism Analysis Table on page 24 and no cost realism adjustment
      was made. However, 84 of the 108 non-San Diego based rates for
      individuals in the remaining 21 labor categories were lower than the San
      Diego Rates Utilized for Cost Realism Analysis Table on page 24. The direct
      labor rates for these 84 employees were realized up accordingly to the San
      Diego Rates identified in the San Diego Rates Utilized for Cost Realism

                                            73
      Analysis Table on page 24, as shown in the second table below. The tables
      below includes direct labor rates proposed per labor category for the base
      year, which were escalated by [redacted]% year over year for the option
      years. Proposed overtime hours for exempt and non-exempt employees
      were reviewed and found to be realistic. Overtime rates for non-exempt
      employees working as Junior Configuration Management Specialist, Senior
      Material     Specialist,   Material    Specialist,    Technical     Typist,
      Warehouse/Forklift Operator, and Assembler Electronic/Electrical were
      proposed [redacted]. Overtime rates for the remaining labor categories
      proposed were for exempt individuals that were proposed [redacted]. Based
      on the rationale above, McKean’s direct labor rates were realized up
      accordingly.

(alteration added). Regarding KOAM’s cost proposal, in the February 24, 2022 Business
Clearance Memorandum, the Source Selection Authority noted:

      KES combined with their subcontractors proposed all hours and overtime
      hours in accordance with the RFP. KES proposed prime hours on 84.5% of
      the overall level of effort in terms of hours. KES proposed on a CPFF basis.
      The DCMA administrative contracting officer (ACO) sent a final
      determination letter, which formally approved KES’ accounting system
      based on a post award review of KES accounting system documented in
      DCAA Audit Report No. 4151-2020C17741003 on 12 August 2020.
      Therefore, the KES’s accounting system is considered suitable for a cost
      reimbursement contract. Based on the analysis below KES’s proposed
      costs were found to be realistic; therefore, no cost realism adjustment was
      made.

      (i). Prime Direct Labor.
      KES proposed direct labor rates for 30 labor categories with a list of rates
      for 160 employees. KES’ direct labor rates were developed for most labor
      categories and hours using named individuals currently supporting the
      existing NIEF requirement. All of KES rates for named individuals were
      substantiated with corresponding employee payroll information for work
      performed in San Diego.

(alteration added). Regarding KOAM’s cost proposal, in the February 24, 2022 Business
Clearance Memorandum the Source Selection Authority noted:

      KES combined with their subcontractors proposed all hours and overtime
      hours in accordance with the RFP. KES proposed prime hours on 84.5% of
      the overall level of effort in terms of hours. KES proposed on a CPFF basis.
      The DCMA administrative contracting officer (ACO) sent a final
      determination letter, which formally approved KES’ accounting system
      based on a post award review of KES accounting system documented in
      DCAA Audit Report No. 4151-2020C17741003 on 12 August 2020.

                                          74
      Therefore, the KES’s accounting system is considered suitable for a cost
      reimbursement contract. Based on the analysis below KES’s proposed
      costs were found to be realistic; therefore, no cost realism adjustment was
      made.

      (i). Prime Direct Labor.
      KES proposed direct labor rates for 30 labor categories with a list of rates
      for 160 employees. KES’ direct labor rates were developed for most labor
      categories and hours using named individuals currently supporting the
      existing NIEF requirement. All of KES rates for named individuals were
      substantiated with corresponding employee payroll information for work
      performed in San Diego.

      Protestor argues

      The Navy’s decision to not adjust McKean’s “combined technical/risk rating”
      based on the risk of its unrealistic staffing approach was arbitrary,
      capricious, and contrary to law for multiple reasons. First, the record
      indicates that the Navy did not even consider this issue prior to its original
      award decision to McKean. Specifically, there is no mention in the original
      Business Clearance Memorandum (or in any prior document) of the Navy
      considering whether McKean’s technical evaluation should be adjusted
      based on its unrealistic staffing approach; rather, the Navy created its one-
      sentence explanation for the decision after KOAM’s original GAO protest
      and during corrective action. Thus, the Navy’s explanation not only
      postdates the Navy’s original award to McKean, it also post-dates the
      initiation of the protest process. As such, there is questionable reason for
      deference to the Navy’s decision.

(emphasis in original). The operative Business Clearance Memorandum before the court
is the Source Selection Authority’s February 24, 2022 Business Clearance Memorandum.
The original Business Clearance Memorandum, dated August 23, 2021, before the first
GAO protest, and the Navy’s evaluations before the first GAO protest are not before this
court. After KOAM protested the original decision to award the contract to McKean to the
GAO, the Navy indicated to GAO in its September 27, 2021 correspondence: “After
reviewing the subject protest, the Agency will undertake corrective action.” The Navy
noted that it would “make a new source selection decision, as appropriate.” Once an
agency takes corrective action, earlier claims about the agency’s evaluation process are
moot. See Savantage Fin. Servs., Inc. v. United States, 118 Fed. Cl. 487, 491 (2014).
The Navy, thereafter, issued a new source selection decision in the Source Selection
Authority’s February 24, 2022 Business Clearance Memorandum. The court only
considers the Navy’s evaluations in the February 24, 2022 Business Clearance
Memorandum.

    Regarding protestor’s claim that the Navy offered a “one-sentence explanation,”
KOAM argues “the Navy’s reason for not reevaluating McKean’s technical proposal fails

                                           75
to articulate a ‘a rational connection between the facts found and the choice made.’”
(quoting CRAssociates,Inc. v. United States, 95 Fed. Cl. 357, 376 (2010)). Protestor
argues: “There is a single, conclusory sentence in the record that explains this decision:
‘[T]he adjustment [made to McKean’s labor rates] does not indicate a lack of
understanding of the requirements or a concern regarding performance as based upon
their performance in the non-costs factors they understand the work and have done
similar work before and well.’” (alterations in original). Intervenor argues that the Navy
“offered more than a sentence in support of its conclusion that McKean understood
contract requirements and proposed in accordance with all hours/LOE [level of effort]
requirements, and these conclusions were sufficient bases upon which the Agency could
rely in declining to downgrade McKean’s Technical Approach score.” (alteration added).

      As indicated above, in the Source Selection Authority’s February 24, 2022
Business Clearance Memorandum, the Source Selection Authority noted with regards to
McKean’s cost proposal:

      McKean combined with their subcontractors proposed all hours and
      overtime hours in accordance with the RFP. McKean proposed prime hours
      on 69% of the overall level of effort in terms of hours. McKean proposed on
      a CPFF [Cost Price Fixed Fee] basis. According to DCAA Audit Report No.
      6151-2015T17741001 dated 6 February 2015, McKean’s accounting
      system was found adequate. Therefore, McKean’s accounting system is
      considered suitable for a cost reimbursement contract. Based on the
      analysis below, McKean’s proposed costs were found to be 3.89% or
      $7,578,076.48 below the realistic cost; therefore, a cost realism adjustment
      was made and McKean’s cost was realized up from $187,467,409.92 to
      $195,045,486.39.

      (i). Prime Direct Labor.
      McKean proposed direct labor rates for 28 labor categories with a list of
      rates for 128 employees. McKean’s direct labor rates were developed by
      using the actual salaries for the proposed current McKean employees or the
      contingent salaries (three employees) for the proposed contingent McKean
      employees, in which signed Letters of Intent were provided. Although
      McKean’s rates were substantiated with corresponding employee payroll
      information, clarifications revealed not all of the payroll information provided
      was for work within San Diego. Twenty of the 128 proposed rates were
      based on actual labor rates for named individuals whose labor rate were
      substantiated by payroll records and whose place of performance of work
      was San Diego, CA, were deemed realistic and reasonable and are shown
      in averages in the first table below. The rates for 108 of the 128 rates
      proposed by McKean were based on work performed outside of San Diego.
      24 of the 108 non-San Diego based rates were found to be equal or above
      the average San Diego Rates identified in the San Diego Rates Utilized for
      Cost Realism Analysis Table on page 24 and no cost realism adjustment
      was made. However, 84 of the 108 non-San Diego based rates for

                                            76
      individuals in the remaining 21 labor categories were lower than the San
      Diego Rates Utilized for Cost Realism Analysis Table on page 24. The direct
      labor rates for these 84 employees were realized up accordingly to the San
      Diego Rates identified in the San Diego Rates Utilized for Cost Realism
      Analysis Table on page 24, as shown in the second table below. The tables
      below includes direct labor rates proposed per labor category for the base
      year, which were escalated by [redacted]% year over year for the option
      years. Proposed overtime hours for exempt and non-exempt employees
      were reviewed and found to be realistic. Overtime rates for non-exempt
      employees working as Junior Configuration Management Specialist, Senior
      Material     Specialist,   Material    Specialist,    Technical     Typist,
      Warehouse/Forklift Operator, and Assembler Electronic/Electrical were
      proposed [redacted]. Overtime rates for the remaining labor categories
      proposed were for exempt individuals that were proposed [redacted]. Based
      on the rationale above, McKean’s direct labor rates were realized up
      accordingly.

(alteration added). The Source Selection Authority’s February 24, 2022 Business
Clearance Memorandum also included the following tables:
                                      [redacted]

In addition, the Source Selection Authority considered McKean’s overhead rates when it
considered the cost realism analysis and noted:

      McKean proposed four OH [overhead] rates, each associated with a
      different cost pool in accordance with their accounting system. The OH
      rates were compared with the 2021 PBRs [Provisional Billing Rates] that
      were approved by DCAA on 15 January 2021. Since McKean’s proposed
      OH rates for Government Site and Contractor Site matched the approved
      PBRs for 2021, the proposed OH rates are considered reasonable, and no
      cost realism adjustment was made.

(alterations added). The Source Selection Authority’s February 24, 2022 Business
Clearance Memorandum included the following tables regarding overhead:

                                      [redacted]

The Source Selection Authority further considered McKean’s fringe rates when it
considered the cost realism analysis and noted:

      McKean’s proposed fringe rates was compared with the 2021 PBRs that
      were approved by DCAA [Defense Contract Audit Agency] on 15 January
      2021. Since McKean’s proposed fringe rates for Government Site and
      Contractor Site matched the approved PBRs for 2021, the proposed fringe

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       rates are considered reasonable, and no cost realism adjustment was
       made.

(alteration added). The Source Selection Authority’s February 24, 2022 Business
Clearance Memorandum included the following tables regarding fringe rates:

                                         [redacted]

(alterations added).

      After review of the above, the Source Selection Authority, in the February 24, 2022
Business Clearance Memorandum, determined:

       In terms of cost, the risk of unrealistic cost was addressed by performing
       cost realism analysis of all cost information included within the proposals
       for all prime contractors and the respective subcontractors. The risk of
       accepting cost based on unbalanced pricing or underestimating the number
       of hours required to perform was mitigated by verifying that each of the
       prime contractors and all subcontractors proposed hours that added up to
       the total level of effort identified within the RFP per labor category and
       overall. The risk of accepting unrealistically low cost based on acceptance
       of rates generated from payroll information outside of the San Diego locality
       was mitigated via a two-part process, which consisted of: 1) identification of
       all non-San Diego based rates through review of each contractor’s
       proposals or via clarification, and 2) application of an upward adjustment of
       non-San Diego rates to the average San Diego rate proposed by all offerors
       for each labor category. Using the risk mitigation tools referenced above,
       McKean’s proposed cost were adjusted during the cost realism analysis.
       KES’ proposed realistic direct and indirect cost that were compared to
       company payrolls, and indirect rate information provided by DCAA and
       DCMA, and were not adjusted during the cost realism analysis. McKean’s
       probable cost of $195,045,486.39 was 4.80% or $9,824,558.83 lower than
       KES’ probable cost of $204,870,045.22. Furthermore, the adjustment does
       not indicate a lack of understanding of the requirements or a concern
       regarding performance as based upon their performance in the non-costs
       factors they understand the work and have done similar work before and
       well.

Therefore, it was not a single sentence that lead the Source Selection Authority to
determine that the adjustments to intervenor’s costs did “not indicate a lack of
understanding of the requirements or a concern regarding performance as based upon
their performance in the non-costs factors they understand the work and have done
similar work before and well.”

       For KOAM’s claim that the “Navy’s decision to not adjust McKean’s ‘combined
technical/risk rating’ based on the risk of its unrealistic staffing approach was arbitrary,
capricious, and contrary to law,” the court notes that for the Cost analysis, the RFP stated:

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      The Government will evaluate the estimated cost and proposed fee of each
      offer for realism and reasonableness in accordance with FAR Subpart 15.4
      and as described below. The purpose of this evaluation will be (a) to verify
      the offeror's understanding of the requirements; (b) to assess the degree to
      which the cost/price proposal reflects the approaches and/or risk
      assessments made in the proposal as well as the risk that the offeror will
      provide the supplies or services for the offered prices/cost; and (c) assess
      the degree to which the cost reflected in the cost/price proposal accurately
      represents the work effort included in the proposal. Proposed costs may be
      adjusted, for purposes of evaluation, based upon the results of the cost
      realism evaluation. In a competitive environment, an offeror is incentivized
      to propose the lowest possible price; therefore, downward cost realist
      adjustments generally will not be made. When a cost realism analysis is
      performed, the resulting realistic cost estimate will be used in the evaluation.
      Cost realism analysis may be limited to those offerors whose proposals
      represent the most likely candidate(s) for award, based on the
      Government’s technical evaluation and the offeror(s) proposed costs. In
      addition to easily identifiable cost adjustments, unrealistic cost proposals
      may result in a re-evaluation and concurrent rescoring of technical
      proposals. Such re-evaluation based on cost or realistic cost analysis could
      negatively impact the technical rating and ranking of the proposal.
      Depending on the number of offerors and the number and dollar amount of
      proposed subcontractors, the Government may choose to limit the extent of
      the cost realism analysis of offerors’ proposed subcontractor costs. In such
      instance, the Government will establish a threshold whereby individual
      subcontractor cost proposals that do not meet the threshold will not undergo
      a cost realism analysis. The threshold established by the Government may
      consist of a percentage of the prime contractor’s proposed costs, or a dollar
      amount, or a combination thereof. All offers with separately priced line items
      will be analyzed to determine if the prices are unbalanced. Offers may be
      rejected if the Contracting Officer determines the lack of balance poses an
      unacceptable risk to the Government.

The RFP stated that “unrealistic cost proposals may result in a re-evaluation and
concurrent rescoring of technical proposals. Such re-evaluation based on cost or realistic
cost analysis could negatively impact the technical rating and ranking of the proposal,”
and that “[d]epending on the number of offerors and the number and dollar amount of
proposed subcontractors, the Government may choose to limit the extent of the cost
realism analysis of offerors’ proposed subcontractor costs,” are discretionary decisions
by the agency. (alteration added). As noted by defendant: “There was no requirement for
the agency to adjust McKean’s technical rating.”

      Protestor also argues: “Second, there is no evidence in the record that the
Contracting Officer or the Contracting Specialist even communicated with the technical

                                            79
evaluators about the cost realism evaluation or the potential risk of McKean’s staffing
approach.” Protestor contends:

      The Source Selection Plan states that the Contracting Specialist will be the
      “sole evaluator” of cost and that technical evaluators will not have access
      to cost proposals; however, it further provides that, with approval of the
      Source Selection Authority, the Contract Specialist “may disclose selected
      cost information as required (e.g., when technical analysis is necessary to
      make a realism or reasonableness determination).” (emphasis added).
      Thus, although the Source Selection Plan expressly contemplated that the
      Contract Specialist could communicate with the technical evaluators to
      obtain technical analysis that was necessary to the cost realism evaluation,
      there is no evidence that such a communication ever occurred.

(emphasis in original; internal reference omitted). Further, as discussed above, the RFP
provided:

      The Contract Specialist will be the sole evaluator for Acceptability of the
      Offer, Small Business Participation, and Cost. The Contract Specialist will
      not evaluate any other factors. Input from the SSEB Chairperson and other
      SSEB members may be solicited. Except for the Contract Specialist, the
      SSEB will not have access to cost proposals; however, with approval of the
      SSA, the Contract Specialist may disclose selected cost information as
      required (e.g., when technical analysis is necessary to make a realism or
      reasonableness determination).

The court agrees with intervenor that “the Contract Specialist did not abuse their
discretion in failing to seek the SSA’s approval to transmit the cost realism evaluation
results to the Technical Team,” because the RFP gave the Contract Specialist discretion
to determine if the Contract Specialist required help from the Source Selection Evaluation
Board to evaluate Cost. As defendant explained, “[t]his reference to ‘realism or
reasonableness determination’ is with respect to whether the contract specialist needed
assistance from the SSEB members in order to calculate costs, and the contract specialist
was not required to consult with the technical evaluators.”11 (emphasis in original;
alteration added).

      Additionally, protestor argues that

      the Navy’s explanation that McKean “understand[s] the work and [has] done
      similar work before and well” fails to accord with – or even consider – three
      material facts contained in the record. First, the Navy “recognized the risk”
      in McKean’s cost proposal of proposing a workforce with more than half of

11In defendant’s motion for judgement on the Administrative Record, defendant also
suggests because “KOAM has abandoned its challenge to the agency’s methodology of
conducting the cost realism analysis of McKean’s proposal, it appears this point is moot.”

                                            80
       the individuals from outside the San Diego area. 49.b at AR 3219. This fact
       is material because the risk recognized in the cost proposal is equally
       relevant to the “combined technical/risk” rating assigned to McKean’s
       technical proposal.

(alteration in original). Intervenor points out

       As for the first “material fact” cited by KOAM, the Navy did not recognize
       risk in McKean’s proposal for “a workforce with more than half of the
       individuals from outside the San Diego area.” This is a blatant
       misrepresentation of the Agency’s legal memorandum filed in the GAO
       protest (not an evaluation document). The Agency’s counsel instead noted
       that “the Navy recognized the risk in McKean’s cost proposal with regard to
       providing more than half of the labor rates from individuals from outside the
       San Diego area, and addressed that in the cost realism analysis.”

(emphasis in original; internal reference omitted).

       Protestor additionally argues that

       three of the four questions addressed in the technical evaluation (Questions
       2, 3, and 4) focused on work to be performed at the Navy’s Network
       Integration Engineering Facility in San Diego Tab 22 at AR 1529-30, and
       the “risk of unsuccessful performance” was to be evaluated as “one aspect
       inherent in the evaluation” of an offeror’s technical approach. Tab 7 at AR
       161. This fact is material because the availability of McKean’s broadly
       dispersed staff to support performance at the Network Integration
       Engineering Facility raised serious concerns about the company’s “ability to
       perform the contract,” which must be evaluated in a cost realism analysis
       pursuant to FAR 15.305(a)(1).

     As indicated above, the four questions included with the Technical Approach
Worksheet in the Source Selection Plan stated:

       1.) What tools and techniques will you employ to manage Cost,
       Schedule, and Performance of the multiple projects and associated
       C4ISR Task Orders that will be accomplished during the execution of
       this contract?

       2.) What tools and techniques will you use to manage the inventory,
       tracking, and reporting of C4ISR materials that will be moving between
       the different functional areas and physical locations within the NIEF?

       3.) Question: What tools and techniques will you use for management
       and completion of C4ISR engineering projects from Requirements to
       Delivery, for the development of Engineering Development Model

                                              81
       (EDM) / First Article System (FAS), and execution of Environmental
       Qualifications Testing (EQT)?

       4.) Question: What tools and techniques will you use to properly
       execute Pre-Installation Check-out and Operational (PITCO) Testing
       and Government Acceptance Testing (GAT) as well as Factory
       Acceptance Testing (FAT) for C4ISR systems and components that are
       received or developed by the NIEF?

(capitalization and emphasis in original). As correctly observed by the defendant, the
questions “refer to tools and techniques, not the location of the labor force.” (emphasis in
original).

       Furthermore, KOAM argues that

       during clarifications, McKean clearly stated its understanding that
       performance locations were not specified in the Solicitation, when in fact the
       Solicitation contemplated that most of the work – and specific, significant
       elements of that work – would be performed in San Diego. This fact is
       material because it demonstrates that McKean lacked “an understanding”
       of the requirements and the work to be performed under the contract, which
       was one of the three cost realism elements to be evaluated pursuant to the
       Solicitation, FAR 15.305(a)(1), FAR 15.404-1(d), and 48 C.F.R. § 215.300.

Intervenor argues “McKean did not propose to have a majority of its workforce located
outside of San Diego, but merely substantiated the majority of its proposed labor rates
with actual rates of individuals currently located outside of San Diego.” (emphasis in
original). As noted above, RFP indicated:

       The Contractor shall perform work at the contractor’s facilities and/or onsite
       at government facilities and on travel in support of designated activities.
       Because the NIWC Pacific Code 42150 leadership resides in San Diego,
       the majority of the production and PITCO/GAT support will be required to
       be supported within the NIWC Pacific (4301 Pacific Highway, San Diego,
       CA) Area of Responsibility (10 Miles). The majority of engineering support
       is expected to be off site at the contractor facility.

The court notes that the RFP is not precise on the specific location of the work to be
performed under the contract. For example, the Section 3.6.5 of the RFP, “Environmental
Qualification Testing (EQT) Lab Support” states:

       As directed by individual TO [Task Order], the Contractor shall assist in
       operating and maintaining requirements associated with NIWC Pacific
       Code 42150 Environmental Qualification Testing (EQT) services.
       Assistance will include development of EQT procedures, conducting EQT,
       providing test results, and providing technical support services as required

                                            82
      per individual task order. The Contractor will primarily conduct required work
      within the immediate San Diego geographical area; however, as detailed
      per individual task order, other locations outside of the San Diego area may
      be required.

(alteration added). Even if McKean did not understand the location, which, as noted
above, intervenor strenuously disagrees, the Navy adjusted McKean’s rates in
intervenor’s proposal to account for intervenor’s employees’ locations. As noted above,
the Navy determined:

      (i). Prime Direct Labor.
      McKean proposed direct labor rates for 28 labor categories with a list of
      rates for 128 employees. McKean’s direct labor rates were developed by
      using the actual salaries for the proposed current McKean employees or the
      contingent salaries (three employees) for the proposed contingent McKean
      employees, in which signed Letters of Intent were provided. Although
      McKean’s rates were substantiated with corresponding employee payroll
      information, clarifications revealed not all of the payroll information provided
      was for work within San Diego. Twenty of the 128 proposed rates were
      based on actual labor rates for named individuals whose labor rate were
      substantiated by payroll records and whose place of performance of work
      was San Diego, CA, were deemed realistic and reasonable and are shown
      in averages in the first table below. The rates for 108 of the 128 rates
      proposed by McKean were based on work performed outside of San Diego.
      24 of the 108 non-San Diego based rates were found to be equal or above
      the average San Diego Rates identified in the San Diego Rates Utilized for
      Cost Realism Analysis Table on page 24 and no cost realism adjustment
      was made. However, 84 of the 108 non-San Diego based rates for
      individuals in the remaining 21 labor categories were lower than the San
      Diego Rates Utilized for Cost Realism Analysis Table on page 24. The direct
      labor rates for these 84 employees were realized up accordingly to the San
      Diego Rates identified in the San Diego Rates Utilized for Cost Realism
      Analysis Table on page 24, as shown in the second table below. The tables
      below includes direct labor rates proposed per labor category for the base
      year, which were escalated by [redacted]% year over year for the option
      years. Proposed overtime hours for exempt and non-exempt employees
      were reviewed and found to be realistic. Overtime rates for non-exempt
      employees working as Junior Configuration Management Specialist, Senior
      Material      Specialist,     Material    Specialist,       Technical     Typist,
      Warehouse/Forklift Operator, and Assembler Electronic/Electrical were
      proposed [redacted]. Overtime rates for the remaining labor categories
      proposed were for exempt individuals that were proposed [redacted]. Based
      on the rationale above, McKean’s direct labor rates were realized up
      accordingly.

                                             83
The Source Selection Authority’s February 24, 2022 Business Clearance Memorandum
reflected this adjustment and determined:

       In terms of cost, the risk of unrealistic cost was addressed by performing
       cost realism analysis of all cost information included within the proposals
       for all prime contractors and the respective subcontractors. The risk of
       accepting cost based on unbalanced pricing or underestimating the number
       of hours required to perform was mitigated by verifying that each of the
       prime contractors and all subcontractors proposed hours that added up to
       the total level of effort identified within the RFP per labor category and
       overall. The risk of accepting unrealistically low cost based on acceptance
       of rates generated from payroll information outside of the San Diego locality
       was mitigated via a two-part process, which consisted of: 1) identification of
       all non-San Diego based rates through review of each contractor’s
       proposals or via clarification, and 2) application of an upward adjustment of
       non-San Diego rates to the average San Diego rate proposed by all offerors
       for each labor category. Using the risk mitigation tools referenced above,
       McKean’s proposed cost were adjusted during the cost realism analysis.
       KES’ proposed realistic direct and indirect cost that were compared to
       company payrolls, and indirect rate information provided by DCAA and
       DCMA, and were not adjusted during the cost realism analysis. McKean’s
       probable cost of $195,045,486.39 was 4.80% or $9,824,558.83 lower than
       KES’ probable cost of $204,870,045.22. Furthermore, the adjustment does
       not indicate a lack of understanding of the requirements or a concern
       regarding performance as based upon their performance in the non-costs
       factors they understand the work and have done similar work before and
       well

        As discussed above, “[c]ontracting officers ‘are entitled to exercise discretion upon
a broad range of issues confronting them in the procurement process,’” PAI Corp. v.
United States, 614 F.3d at 1351 (quoting Impresa Construzioni Geom. Domenico Garufi
v. United States, 238 F.3d at 1332), and “[a]ccordingly, procurement decisions are subject
to a ‘highly deferential rational basis review.’” Id. (quoting CHE Consulting, Inc. v. United
States, 552 F.3d at 1354) (internal quotation marks omitted; alterations added). The
Navy’s decision not to adjust intervenor’s Combined Technical/Risk Rating was not
arbitrary, capricious, or an abuse of discretion. KOAM disagrees with how the Navy
evaluated McKean’s proposal, however, “[a] protester's mere disagreement with an
evaluation does not provide an adequate basis to overturn the agency's decision.” Femme
Comp Inc. v. United States, 83 Fed. Cl. 704, 740 (2008) (citing Banknote Corp. of Am. v.
United States, 56 Fed. Cl. 377, 384 (2003), aff’d, 365 F.3d 1345 (Fed. Cir. 2004)); see
also Precise Sys., Inc. v. United States, 122 Fed. Cl. 263, 270 (2015). Based on the facts
of the bid protest currently under review, the agency did not act arbitrarily or capriciously
in awarding the contract to McKean.

                                             84
                                  CONCLUSION

       The court, therefore, finds that the agency’s actions were not arbitrary or
capricious. The contracting officer acted within his discretion by deciding that there was
not a conflict of interest, apparent or otherwise. Further, the agency’s cost realism
analysis was rational. Protestor’s motion for judgment on the Administrative Record is
DENIED. Defendant’s and intervenor’s cross-motions for judgment on the Administrative
Record are GRANTED. The Clerk of the Court shall enter JUDGMENT consistent with
this Opinion.

   IT IS SO ORDERED.

                                                    s/Marian Blank Horn
                                                    MARIAN BLANK HORN
                                                             Judge

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