Court Opinion

ID: 9900179
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:01:44.445944+00
Date Added: 2024-06-11T09:21:01.505042
License: Public Domain

DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
               ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeal of -                                   )
                                               )
 Chugach Federal Solutions, Inc.               )     ASBCA No. 61320
                                               )
 Under Contract No. N44255-14-D-9000           )

 APPEARANCES FOR THE APPELLANT:                       Richard B. O’Keeffe, Jr., Esq.
                                                      William A. Roberts III, Esq.
                                                      Gary S. Ward, Esq.
                                                      Cara L. Lasley, Esq.
                                                       Wiley Rein LLP
                                                       Washington, DC

 APPEARANCES FOR THE GOVERNMENT:                      Craig D. Jensen, Esq.
                                                       Navy Chief Trial Attorney
                                                      David M. Marquez, Esq.
                                                      Robyn L. Hamady, Esq.
                                                      Anthony Hicks, Esq.
                                                       Trial Attorneys

           OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS

        In 2011, the Naval Facilities Engineering Systems Command (NAVFAC, Navy,
or government) issued a solicitation for the West Sound base services operating
contract. The solicitation was for a firm-fixed-priced, performance based, Indefinite
Delivery Indefinite Quantity contract to provide base operations support, such as fire
and emergency services, garbage collection and building maintenance, at Naval
Facilities in the Puget Sound, Washington area. The solicitation was intended to be a
follow-on contract to the existing base operations support contract. However, the
solicitation differed from the existing contract in at least one key detail: the existing
contract procured a set number of “trouble calls,” basically unscheduled building
maintenance issues, while the solicitation provided that the contractor would be
responsible for an unlimited number of trouble calls.

       As part of the solicitation process, the government prepared an independent
government estimate (IGE) of the cost of performing the contract. The IGE was
generated by government employees based on data from the incumbent contractor, and
the government estimators’ subjective, and typically conservative, projections of the
cost of performing a contract with unlimited trouble calls. The solicitation provided
most, but not all, of the incumbent contractor’s relevant data to the offerors. Chugach
Federal Solutions, Inc. (Chugach or CFSI) was one of nine offerors responding to the
 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
solicitation. Despite being a firm-fixed-price level of effort contract, the solicitation
requested that offerors provide staffing levels in their proposals. The government
evaluated the proposals through a technical team and a price team, which in turn
reported to a source selection committee. The technical team concluded that eight of
the nine offerors, including Chugach, had a major weakness in their proposed staffing
levels. The government determined that the offerors should be prompted to review the
performance work statement to ensure that they were including sufficient staffing to
deal with the change to unlimited trouble calls. In addition, the government
determined that it should review the accuracy of its own IGE.

       The government entered into negotiations with the offerors and asked Chugach
to review its proposal to ensure that it accounted for the change to unlimited service
calls. At the same time, the government noted that specific portions of Chugach’s
proposal had prices that were either too high or too low, relative to the remaining
offerors. Following proposal revisions, the government awarded the contract to
Chugach in March of 2014. During the transition period, Chugach recognized that it
had proposed inadequate staffing, and significantly increased its number of full time
equivalent employees before beginning full performance of the contact in October
2014. Even with the increased staffing, Chugach experienced problems meeting the
contract’s performance standards. The government noted deficiencies in Chugach’s
performance ratings and began withholding contract funds. In response, Chugach
increased its staffing, causing financial losses on the contract.

        In August 2016, Chugach submitted a certified claim seeking in excess of
$12 million in increased costs pursuant to a variety of theories. According to
Chugach, the government engaged in negligent negotiations because the government
failed to inform Chugach that the government had determined that Chugach was not
proposing enough staff to perform the contract. Alternatively, Chugach contends that
the government had superior knowledge regarding the staffing necessary to perform
the contract that it did not share with Chugach. Chugach also contends that the parties
were mutually mistaken regarding the staffing required to perform the contract, that
there was a constructive change to the contract, and that the government improperly
withheld payments.

       The matter is before the Board pursuant to Board Rule 11, “Submission
Without a Hearing,” permitting the Board to make findings of fact based on the
evidentiary record. Based on the record before us, we find that Chugach has not
produced evidence sufficient to support its theories of negligent negotiation, superior
knowledge, mutual mistake, or constructive change. With regard to the improper
withholding count, we find that the government did not support its decision to
withhold contract funds. We grant Chugach’s appeal only with regard to its challenge
to the Navy’s fixed percentage withholding.

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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                                FINDINGS OF FACT

   I. The Parties

       At the time of the relevant events, appellant, Chugach Federal Solutions, Inc.
was a subsidiary of Chugach Government Solutions, Inc. (CGS), which was, in turn, a
subsidiary of Chugach Alaska Corporation (CAC) (gov’t proposed finding of fact ¶
2; compl. ¶ 1). CAC was an Alaska Native Corporation created under the Alaska
Native Claims Settlement Act of 1971 (gov’t proposed finding of fact ¶ 2; compl. ¶ 1).
Chugach specializes in base operations support, logistics, public works, construction,
and IT services (R4, tab 4-1 at CFSI21902_7).

   II. The Solicitation

       A. Background

       On November 21, 2011, NAVFAC issued Solicitation N44255-10-R-5016
(WSBOS solicitation) for the West Sound Base Operations Support Contract (WSBOS
contract), a firm-fixed-priced, performance based, Indefinite Delivery Indefinite
Quantity (IDIQ) contract to provide base operations services at NAVFAC facilities in
the Puget Sound, Washington area, including Naval Base Kitsap (Bremerton, Bangor,
and Keyport) and Naval Magazine Indian Island (R4, tab 1-1.1 at GOV1-2; R4, tab 1-
1.4 at GOV363-65; compl. ¶10). The WSBOS contract was intended to follow
Contract No. N44255-05-D-5103 (EJB Contract), the expiring base operations services
contract then being performed by EJB Facilities Services (EJB) (app. supp. R4,
tab 60). The WSBOS solicitation anticipated an award based on competitive
acquisition, incorporating by reference Federal Acquisition Regulation (FAR) 52.215-
1 (R4, tab 1-18 at GOV18373).

       B. Evaluation Criteria

       The WSBOS solicitation provided for a price evaluation factor with no
subfactors and a non-price evaluation factor with six subfactors (R4, tab 1-18
at GOV18378-91). The solicitation provided that the non-price subfactors are
approximately equal to each other and the six non-price factors combined are
approximately equal to the total price for evaluation (id. at GOV18379). In addition,
Section M, Evaluation Factors for Award, Paragraph 3.a., Price, states in relevant part:

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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             (2) Basis of Evaluation:

             (a) . . . Analysis will be performed by one or more of the
             following techniques to ensure a fair and reasonable price:

             (i) Comparison of proposed prices received in response to
             the RFP.
             (ii) Comparison of proposed prices with the IGE.
             (iii) Comparison of proposed prices with available
             historical information.
             (iv) Comparison of market survey results.
             (v) Comparison with any other data source which assists in
             validating the price as fair and reasonable.

(Id. at GOV18381)

      The solicitation also includes Section M, Evaluation Factors for Award,
Paragraph 3.b.(2), Factor 2, Technical Approach/Method, which states in relevant part:

             2) Provide a completed Attachment J.M-5, Full Time
             Equivalent (FTE) Worksheet. Provide the annual hours,
             and FTEs proposed for performing each element of the
             contract as specified in the FTE worksheet.
             ...
             (b) Basis of Evaluation: Factor 2 will be evaluated as an
             overall factor with no subfactors. The Government will
             evaluate the offeror’s technical approach for adequate
             staffing levels and that the staffing plan offers a reasonable
             understanding of the requirements, labor quantities, and
             skills needed to successfully perform and meet the contract
             performance standards and objectives.

(Id. at GOV18384)

      C. The Performance Work Statement (PWS)

      The Solicitation’s Performance Work Statement (PWS) provides that:

             All terms and conditions of the contract award,
             performance work statement, and all attachments are
             applicable. The proposal presented by the offeror to whom
             the award is made will be incorporated, in whole or in part,
             into the contract at time of award. If the Contractor’s

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
             proposal contains terms or conditions more favorable to
             the Government, these more favorable terms and
             conditions shall be performed. However, the minimum
             requirements of the performance work statement must be
             met.

(Id. at GOV18303) The PWS similarly states that “[t]he Contractor warrants that its
proposal incorporated herein by reference will meet or exceed the performance
objectives set forth in this contract” (R4, tab 1-14.2 at GOV17269).

       The PWS is organized into annexes. Section J of the PWS includes multiple
attachments providing more than 9,000 pages of historical data reflecting EJB’s
performance of the EJB Contract, inventory and equipment lists, and other information
relevant to the WSBOS contract (R4, tab 1-12.5 at GOV14595 et seq.; R4, tabs 4-4
through 4-8). In addition to the information in Section J, there was a NAVFAC
technical library, which was made available to all the prospective offerors (R4, tab 1-
18 at GOV18369). There is no evidence, however, that CFSI ever used the resources
available through the technical library (R4, tab 5-1 at 80; R4, tab 5-8 at 77-79).

      1. Trouble Calls

       Annex 0100000, General Information, Specification Item 1.5, Verification of
Workload and Conditions, states in relevant part, in relation to the information
contained in Section J:

             Any historical workload data provided is from the most
             recent contract which differs significantly in both
             specification and liability limit from this contract. These
             workload quantities are for illustration purposes only and
             represent the types and mix of the various tasks required
             for the performance of the previous contract. This data is
             not intended to be all inclusive of the requirements for this
             contract or as limit for future workload. The Contractor
             shall be responsible to determine the required workload to
             meet the specifications of this contract. The Contractor
             shall perform all required repairs below the stated liability
             limits, regardless of the volume of work, with no additional
             cost to the Government.

(R4, tab 1-14.2 at GOV17267 (emphasis added))

      Annex 0100000, General Information, Specification Item 1.11, Technical
Proposal Certification, states: “The Contractor warrants that its proposal incorporated

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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herein by reference will meet or exceed the performance objectives set forth in this
contract” (id. at GOV17269).

        Also relevant to this appeal is Annex 1502000 (and a similar Annex 1502010
applicable to the Bureau of Medicine and Surgery (BUMED) Naval Hospital
Bremerton) Facility Investment. The scope of work in the annex generally includes
“infrastructure sustainment,” the maintenance and repair necessary to keep facilities in
“good working order.” (Id. at GOV17350, GOV17411) The Recurring Work for
Facility Investment is generally broken down into four categories: Spec Item 3.1
Trouble Calls, Spec Item 3.2 Maintenance, Spec Item 3.3 Inspection, Testing and
Certification, and Spec Item 3.4 Other Recurring Services (id. at GOV17347-49).
Annex 1502000, Facility Investment, Spec Item 3.1, Trouble Calls, requires the
Contractor to perform “work identified at a point in time that is necessary to return a
facility, structure, or piece of equipment to its intended use” (R4, tab 1-14.2
at GOV17357-59; R4, tab 1-12.7 at GOV14824). Examples of service calls would
include repairing a non-functioning HVAC unit, replacing lamps in light fixtures, and
unclogging drains (R4, tab 1-12.7 at GOV14824). The WSBOS Contract describes
“trouble calls” as follows:

              Trouble Calls are classified as emergency or service work
              requests. Trouble calls are called into the work reception
              center by building occupants or generated by designated
              Government or Contractor representatives; are brief in
              scope; and do not reasonably require detailed job planning.
              Multiple maintenance, repair, and minor construction
              requirements received for the same trade in the same
              building or structure at the same time will be combined
              into one trouble call as long as the trouble call threshold is
              not exceeded.

(R4, tab 1-12.5 at GOV14599)

        Under the EJB Contract, EJB would perform what were referred to as “service
calls” (app. supp. R4, tab 61 at CSUP2245) that were roughly equivalent to trouble
calls in the new contract. Under the EJB Contract, service calls were classified as
routine, urgent, or emergency calls (app. supp. R4, tab 61 at CSUP2247-49). Routine
calls were required to be completed within 60 calendar days, urgent calls within 15
calendar days, and emergency calls within 1 hour with work continuing until the
emergency has been arrested (id. at CSUP2247-48). Under the EJB Contract, service
calls had a maximum financial liability for the contractor of either $2,000 or $5,000
for the direct cost of labor and materials (id. at CSUP2245, CSUP2247-49). In the
solicitation, the dollar limit per call was $5,000 of direct labor and direct material per
occurrence (R4, tab 1-14.2 at GOV17358). The government highlighted this change

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during the solicitation process (R4, tab 1-19 at GOV18405, GOV18436; R4, tab 6-120
at CFSI 256231_43-44). In addition, the new contract required all non-emergency
trouble calls to be resolved within 30 calendar days (R4, tab 1-14.2 at GOV17359).

        Historical trouble call data was provided in an attachment. This information
provided offerors with guidance regarding the type and mix of work to expect under
this requirement. Specifically, J-1502000-06 contained 1,972 pages of historical data
regarding service calls performed by EJB from FY09 through FY11, representing
years 4 through 6 of EJB’s performance (R4, tab 4-6 at CFSI8949_2-1973). Chugach
calls attention to two specific service calls where it contends that the government
withheld material information: No. 3453054, where EJB incurred $2,126.30 in
material costs, plus 12 labor hours, on a call with a $2,000 limit; and No. 3221559
where EJB incurred $3,242.74 in subcontractor costs, again in excess of the $2,000
limit (app. br. at 23 (citing app. supp. R4, tab 103.02 [native])). Chugach additionally
notes that of the 24,027 service calls and bullets in the November 2009 report, 22.67%
were performed late (id. at 23-24); and that the records show that EJB repaired
equipment that did not have an equipment number, meaning that EJB was not
responsible for maintaining the equipment (id. at 24). Dale Hrenko, a NAVFAC
engineering technician, compiled the historical data based on reports from EJB; the
data originated from EJB’s computerized maintenance management system, known as
“Maximo” (gov’t ex. 2 ¶¶ 5, 11-13). The data provided to offerors included the
description, work type (routine, urgent, or emergency), the dollar threshold, location of
the work, and the labor hours expended (R4, tab 4-6 at CFSI18949_2-1973).
However, the government did not provide other information to offerors, such as the
date of the service request, the target and actual completion dates, and who requested
the work (app. supp. R4, tab 103.02 [native]). The service call historical data
indicated there was variability year-over year in the quantity of trouble calls, ranging
from approximately 21,000 to 25,000 trouble calls, on which EJB expended between
approximately 70,000 and 88,000 labor hours (gov’t ex. 4 ¶ 36).

        During EJB’s performance of the contract, the Navy’s demand for service calls
in some years exceeded the contractual number of calls. In these instances, the Navy
attempted to purchase additional service calls at a contractually pre-priced rate. (Gov’t
ex. 3 ¶ 4) However, some users “metered” or restricted their use of service calls to
avoid incurring additional costs (app. ex. 1 at 108-09; gov’t ex. 1 ¶ 21). Chugach
further contends that the Navy directed EJB not to “self-generate” service calls,
implying that EBJ was not to identify items needing to be repaired (app. supp. R4,
tab 143.01 at CSUP5028; tab 126 at CSUP4982); however, it is unclear whether the
dispute was regarding self-generated repairs, or if the Navy was concerned that EJB
was attempting to classify maintenance work as repair work (app. supp. R4, tab 143.01
at CSUP5027).

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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       2. Maintenance

        In addition to trouble calls, the WSBOS Solicitation required the contractor to
perform maintenance on identified systems and equipment. Specifically, the
contractor was required to “develop and implement a maintenance program . . . to
ensure proper operation, to minimize breakdowns, and to maximize useful life” (R4,
tab 1-14.2 at GOV17363). The performance standard required that “[m]aintenance is
accomplished in accordance with the Contractor’s maintenance program plan and
work schedule” (id.; gov’t ex. 1 ¶ 18). Thus, the contractor had flexibility to develop a
work plan that would minimize its costs. Equipment lists were provided for all of the
categories of equipment that the contractor was required to include in the maintenance
program (see, e.g., R4, tab 1-14.2 at GOV17365 (referring to the galley equipment list
at R4, tab 1-12.7 at GOV14880)). While performing the scheduled maintenance per
the contractor’s own maintenance plan, the contractor was also required to perform
any “incidental repairs, including replacement, discovered during schedule
maintenance up to $500 per occurrence . . . . Incidental repairs performed under
maintenance are not considered a Trouble Call, but part of the scheduled maintenance
service” (R4, tab 1-14.2 at GOV17362). This liability limit was also a change from
the lower $250 liability limit for the EJB contract (app. supp. R4, tab 1 at CSUP317).
The solicitation also required the contractor to add up to an additional 250 pieces of
equipment to the maintenance program each year, at a liability limit of $1,500 of direct
labor and direct material per piece of equipment (R4, tab 1-14.2 at GOV17362).

       In addition to the maintenance program where the contractor was to propose an
“economical approach” for maintenance, the contractor was also required to maintain
other categories of equipment according to “prescriptive maintenance,” where the
maintenance frequencies and tasks are dictated by regulation from federal, state, or
local governing agencies (R4, tab 1-14.2 at GOV17371; R4, tab 1-12.7 at GOV14822).

       An additional task not contained in the EJB contract, was to develop an
integrated maintenance plan encompassing both maintenance and repair for specific
categories of equipment (R4, tab 1-14.2 at GOV17378; R4, tab 5-6 at 142-43) rather
than a set schedule of maintenance tasks, as was the case under the EJB contract (R4,
tab 6-73 at CFSI115660_1; R4, tab 5-6 at 142-43). The RFP also provided that for
equipment and systems subject to an IMP “the Contractor has full responsibility for
any individual occurrence of repair, including replacement, up to and including
$10,000 in direct material and/or direct labor cost for each piece of equipment per
incident unless stated otherwise for specific equipment or systems” (R4, tab 1-14.2
at GOV17435).

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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       D. Maximo Data

       Annex 0200000, Management and Administration, Specification Item 2.6.7,
Computerized Maintenance Management Systems (CMMS), requires the contractor to
maintain a CMMS to manage all service operations and performance data (R4, tab 1-
14.2 at GOV17287-88). Maximo is a commercial software application that is known
as a “Computerized Maintenance Management System” or “CMMS” (see R4, tab 5-10
at 111). Although both the government and EJB used Maximo during EJB’s
performance of the EJB Contract, the government’s Maximo database and the EJB
Maximo database were separate databases (app. supp. R4, tab 61 at CSUP2149; R4,
tab 10-1 ¶ 133). EJB was contractually required to enter certain types of information
into the government’s Maximo database, however, it maintained even more detailed
information in its own database. See EJB Facilities Servs., ASBCA No. 57112, 15-1
BCA ¶ 35,867, at 175,358; R4, tab 10-1 ¶ 133.

        Prior to award of the WSBOS contract, CFSI reviewed the solicitations for both
the EJB contract and the WSBOS contract, both of which described the types of
information entered into the government’s Maximo database (R4, tab 5-10 at 113-14).
In addition, the government made the EJB contract available for review by prospective
offerors (R4, tab 1-19 at GOV18392). Chugach itself previously used Maximo on
at least two base operation services contracts with the Navy—the Whidbey Island (also
called North Sound) and Fallon contracts (R4, tab 5-10 at 111-12). Chugach
understood that Maximo includes functions for scheduling, inventory management,
property management, material management and contains work plans and performance
data, including the hours craftsmen spend on a work order (id. at 113).

       E. The Pre-Proposal Conference and Site Visit

        On December 12-13, 2011, the government held a pre-proposal conference and
site visit, which Mr. Hammock and Mr. Watts, members of Chugach’s proposal team,
as well as Matt Hayes (one of Chugach’s subsidiary presidents) attended (R4, tab 6-
119; R4, tab 6-120; R4, tab 5-3 at 59-60, 71-72). At the Pre-Proposal Conference and
Site Visit, the government described some of the differences between the EJB contract
and the WSBOS contract, including the new IMP requirement and the changes in
trouble call liability limits and completion times (R4, tab 6-120 at CFSI1256231_29-
35; gov’t ex. 5 at GOV1059689, GOV1059696-98). During a presentation at the Pre-
Proposal Conference and Site Visit, David Williams, NAVFAC’s Facility Support
Contract Program Manager, informed prospective offerors that, compared with the
EJB Contract, “[t]he service call approach, or trouble calls is different in [the WSBOS
contract]” (R4, tab 6-120 at CFSI256231_30). Mr. Williams informed offerors that “a
key difference” between the EJB contract and the WSBOS contract is that the
government changed “all our various size trouble calls to one size, with a maximum
$5,000 liability limit per trouble call.” He notified offerors that the “old data is based

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on two different [trouble call] sizes, $2,000 limit trouble call, and a $5,000 size.” (Id.
at CFSI256231_44) Mr. Williams also informed the prospective offerors that another
major change from the EJB contract was that “[t]his solicitation includes something
that we haven’t utilized here in the Northwest, and it’s [an] integrated maintenance
program, or an integrated maintenance program approach” (id. at CFSI256231_30).

       F. The Independent Government Estimate

       As part of the source selection process, the government developed an IGE that
was used to facilitate its planning and budgeting for the WSBOS contract, and was
intended to be available as a tool to evaluate proposals (gov’t ex. 2 ¶ 15; gov’t ex. 1
¶ 10; app. ex. 1 at 143; R4, tab 1-18 at GOV18381).

        At issue in this appeal is the IGE pertaining to trouble calls under the facility
investment annex. Mr. Hrenko, was primarily responsible for developing the IGE for
Annex 1502000, the “Facility Investment” work which includes maintenance and
repair of facilities (gov’t ex. 2 ¶ 14). For some lines of the IGE for 1502000, including
the trouble call lines, Mr. Hrenko used information from EJB’s historical performance,
and, based on his own judgment, adjusted for the projected impacts of the differences
between the EJB Contract and the WSBOS solicitation (id.; app. ex. 3 at 117-18). As
discussed in more detail below, Mr. Hrenko used certain of EJB’s historical
performance data that was not provided to offerors in the solicitation. In his
preparation of the IGE for Annex 1502000 trouble calls, Mr. Hrenko utilized a total
quantity of 19,395 trouble calls under ELIN 15AF and 3,153 IMP repairs under ELIN
15AG, for a total quantity of 22,548 trouble calls and IMP repairs (gov’t ex. 2 ¶ 16).
The data he provided for WSBOS solicitation attachment J-1502000-06 lists FY09–
FY11 trouble calls from the EJB contract (id.). For his estimate of trouble calls (TC)
in the IGE, Mr. Hrenko used the following factors: Emergency non-BEQ (Bachelor
Enlisted Quarters or bachelor housing) at 4.8 hrs/TC, Emergency BEQ at 3.8 hrs/TC,
Service non-BEQ at 6.6 hrs/TC, and Service BEQ at 5.0 hrs/TC (id. ¶ 17).

        In preparing his estimate, Mr. Hrenko estimated how the changes to the
requirements could impact the contractor’s effort related to trouble calls and IMP
repairs (id.). Mr. Hrenko estimated that all types of trouble calls would require a
higher number of hours than historical values based on this assumed impact (id.). As
noted above, in developing the Annex 1502000 IGE for trouble calls, Mr. Hrenko
estimated that each nonemergency, non-BEQ trouble call would require an average of
6.6 labor hours (i.e., approximately double the average under the incumbent EJB
Contract) because he assumed that the increase in liability limits (from a mix of $2,000
and $5,000 to only $5,000) from the EJB contract to the new WSBOS contract would
mean that the contractor would spend an increased amount of time performing trouble
calls (because the contractor would be responsible for a greater amount of cost before

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    DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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liability shifted to the government) (gov’t ex. 2 ¶ 18). 1 The 6.6-hour factor was
Mr. Hrenko’s projection as to what would, on average, be required to perform these
non-emergency calls given the increase in liability limit (id.). This estimation of 6.6
hours per trouble call was higher than EJB’s weighted average hours per trouble call
and higher than the average hours per trouble call that Mr. Hrenko had used in
negotiating changes with EJB on its contract (id.). In fact, Chugach’s experience in
performing the contract was substantially below 6.6 labor hours per service call (R4,
tab 10-1 ¶ 117).

        Mr. Hrenko estimated the future quantity of trouble calls under the WSBOS
contract by adjusting the historical quantities of service calls based on his personal
judgment (id. ¶ 21). For estimating the cost of materials associated with Annex
1502000, Mr. Hrenko used his personal judgment to estimate that materials would
generally be 30% of the direct labor cost (id. ¶ 23). He applied the 30% to trouble call
repairs, IMP repairs, and the facilities manager and data entry clerk (id.). Mr. Hrenko
also applied the material cost factor to labor elements that have limited to no
associated material costs, causing the IGE to be higher than it otherwise would have
been (id.). The IGE for Annex 1502000 materials (approximately $4.5 million/year
after sales tax) was conservative in comparison to Chugach’s actual recorded material
costs during performance of the WSBOS contract of approximately $2.37 million in
FY15 and $3.05 million in FY16 (app. supp. R4, tab 656 [native], Sheet: “ELIN-
BASE PERIOD FFP,” Cell N777 ($4,133,863.43 in Total Material Costs) and Cell
O777 ($355,512.26 in Materials Sales Tax); app. supp. R4, tab 1657 at CSUP65940,
CSUP65944). On a percentage basis, Mr. Hrenko’s 30% estimate for 1502000
materials (equates to an average of 27% due to not being applied to every labor dollar)
was conservative compared to the approximately 18.5% that CFSI actually incurred
for Annex 1502000 materials in FY15 and FY16, respectively. 2

1
  In his deposition, the government’s expert witness Mr. Schaeb testified that
        Mr. Hrenko could not explain how he came up with the 6.6 hour figure.
        Mr. Schaeb was of the opinion that the 6.6 hour figure was a mistake. (App. ex.
        13 at 175-77)
2
   The estimate is supported by calculations performed on spreadsheets in the record
        (app. supp. R4, tab 656, Sheet: “ELIN-BASE PERIOD FFP”, Cell N777
        ($4,133,863.43 in Total Material Costs) and Cell O777 ($355,512.26 in
        Materials Sales Tax) divided by the Sum of Cells M18 to M730 ($16,587,842
        in Direct Labor Costs); app. supp. R4, tab 1657 at CSUP65940 (FY15 Annex
        1502000: $2.37M in Direct Materials divided by $12.8M in combined Direct
        Labor, Direct Burden and Direct Fringe is approximately 18.5%), CSUP65944
        (FY16 Annex 1502000: $3.05M in Direct Materials divided by $16.5M in
        combined Direct Labor, Direct Burden and Direct Fringe is approximately
        18.5%)).
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   III. CFSI’S PROPOSAL

       A. General Background

       At the time of the competition, Chugach had never previously been awarded a
competitively bid base operations service (BOS) contract, but had performed BOS
contracts awarded as small business set-aside/sole source awards (R4, tab 5-3 at 176-
77). To develop CFSI’s proposal, Chugach assembled a proposal development team
consisting primarily of employees in its business development group and assisted by
employees of other Chugach corporate entities and third-party consultants (R4, tab 6-
47 at CFSI101373_4-7; R4, tab 5-3 at 9, 66). Chugach’s Mr. Hammock authored a
document known as the Capture Plan Worksheet, that included Mr. Hammock’s initial
“price-to-win-target price,” which Mr. Hammock initially believed to be $300 million,
with a “Recurring price” of $45 million per year (R4, tab 6-123 at CFSI98525_1;
tab 5-3 at 107-09). The term “price to win” refers to an overall bid price that has
“reached a level that we [Chugach] feel[s] is competitive.” To the extent Chugach’s
“solution price” is not at a competitive level, Chugach “look[s] for ways [to] achieve
reductions” (R4, tab 5-10 at 245).

        One of the proposal strategies within Chugach’s concept of operations (also
known as a “CONOPS”) was the “hub and spoke” concept, which Mr. Hammock
described as Chugach “center[ing] most of our resources at Bangor and then have
right-sized locations and then support them with push-out teams that would perform
maybe periodic type of maintenance” (R4, tab 5-3 at 79-80; R4, tab 6-123
at CFSI98525_4). Chugach held a kick-off meeting with its proposal team to discuss
the development of its proposal. In a kick-off meeting PowerPoint presentation dated
January 18, 2012, Chugach identified on a slide entitled “Capture Strategy/Win Plan
Overview” a “Price to Win target” of $300 million, comprised of $40 million for
recurring work and $20 million for non-recurring work. The slide also provided:
“Focus on reducing Recurring cost below $40M” noting that “FTE/Vehicles/IMP [are]
heavy cost drivers.” (R4, tab 6-124 at CFSI101373_38) Ultimately, CFSI bid roughly
$30 million per year for recurring work, or $10 million less than its initial price to win
target (R4, tab 2-39.1 at GOV468687_39; tab 6-123 at CFSI98525_1; Tab 5-3 at 107-
09).

        The kick-off meeting presentation also noted scope changes from the EJB
contract including increases because “trouble calls [are] now only $5K liability (vs
$2K and $5K)” and “New Integrated Maintenance Program (IMP) with $10K limit of
liability for all prescribed items (vs $500 threshold for other general PM)” (R4, tab 6-
124 at CFSI10373_19).

      During the development of CFSI’s proposal, Chugach’s business development
personnel generally did not involve Chugach’s/CFSI’s operations and management

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personnel (who would actually perform the work if awarded the contract) in
discussions of cost, out of concern that they “can’t take the tough cuts” and are “scared
to take a risk” (R4, tab 12-144.1 at CFSI104803_1).

       B. Chugach’s Use of Historical Workload Data Provided in the WSBOS
          Solicitation

        Chugach prepared estimates for the labor hours necessary to complete the
various contract requirements based upon industry guides such as RS Means, subject
matter experts within Chugach, and Chugach’s own experience with other BOS
contracts (R4, tab 5-10 at 96-97). For Annex 1502000 and 1502010 maintenance,
Chugach attempted to create an RS Means-based estimate for all of the assets and
facilities identified in the Annex 15 Attachments in Section J (R4, tab 6-54
at CFSI7359_1). Ultimately, a spreadsheet largely based on RS Means titled “West
Sound WBS Pricing (4)” formed the “numerical starting point[]” for Chugach’s effort
to develop its proposal for Annex 15 (R4, tab 12-247.1 (“West Sound WBS Pricing
(4)” spreadsheet); R4, tab 7-37 at 7; R4, tab 10-1 at 26-31; gov’t ex. 4 ¶¶ 47-54).
Upon developing labor hour estimates for the various specification items detailed in
the solicitation, whether by himself or in conjunction with other members of the
proposal development team, Mr. Watts recorded the estimates in a spreadsheet known
as the “Work Breakdown Structure” (WBS) or workload model (R4, tab 6-49; R4,
tab 5-10 at 141-42; R4, tab 5-3 at 36-37, 60, 231, 245-46; R4, tab 5-1 at 14-15). The
labor hour estimates in the WBS model were “a summary of CFSI’s estimated work
hours by labor craft” for various PWS spec items (R4, tab 7-37 at 2). Because staffing
represents about 85 percent of CFSI’s cost of performing base operations services,
Mr. Crosta relied on the labor hour estimates in the WBS to develop CFSI’s cost
model (R4, tab 5-3 at 36-37, 152). Mr. Crosta testified that the staffing estimated in
the WBS, including “labor category, labor type and the full-time equivalent(s)” flowed
directly into the cost model (R4, tab 5-1 at 12-13; R4, tab 7-37 at 5). The cost model
was then used to calculate the values (dollars, labor hours, and FTEs) presented in
Chugach’s final revised price (R4, tab 7-37 at 1).

       C. The “Option Year Modifier”

        One of the elements that Mr. Watts included in the WBS was titled an “option
year modifier” that modified the number of labor hours input into the WBS (R4, tab 6-
49 at Column Q). The specific option year modifier used in the WBS varies by
specification item, ranging from a modifier of 0% to a modifier of 112% (R4, tab 6-1
at Column Q; tab 6-49 at Column Q). The option year modifier applied to the total
labor hours assumed for the base year in addition to the option years (R4, tab 5-7
at 47). Mr. Hammock testified that the option year modifier is synonymous with an
“efficiency factor” (R4, tab 5-3 at 22-24; R4, tab 5-10 at 195-97). He testified that
Chugach typically applies an efficiency factor to staffing estimates developed for base

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    to an ASBCA Protective Order. This version has been approved for public release.
operations services proposals (R4, tab 5-3 at 137). According to Mr. Hammock, the
efficiency factor represents Chugach’s business judgment about how much more
efficiently it can perform the contract requirements compared to the “standard
approach” assumed by common estimating resources such as RS Means (id.; R4,
tab 5-10 at 89-90). Mr. Hammock also testified, however, that, with respect to the
WBS for the WSBOS contract, the option year modifier was applied not only against
RS Means-based labor hour estimates but also against labor hour estimates based on
Chugach’s past performance and labor hour estimates based on the judgment of
Chugach’s in-house subject matter experts (R4, tab 5-3 at 138-39; R4, tab 5-10 at 96-
97). Mr. Hammock, as Chugach’s corporate designee, testified that Chugach has no
data, documentation, or other files that show how Mr. Watts (or anyone else)
determined the specific option year modifier values in the WBS (R4, tab 5-10 at 92-
93). Mr. Hammock also testified that Chugach expected to be able to perform the
WSBOS contract relatively more efficiently because it would implement “[b]etter
scheduling techniques, better management oversight, [and] better supervision and
training” (id. at 146; 197).

        Mr. Williamson, who was tasked with assisting Chugach’s internal review of
Chugach’s losses in 2016, testified that he “just couldn’t make sense” of the WBS and
that Mr. Watts “would talk in circles” (R4, tab 5-9 at 102-04). Mr. Viramontes, the
former transition manager who was hired back as a consultant to assist the review,
testified that he “relentlessly chased [Mr. Watts], trying to just get some answers best
that he had. You know, he didn’t have a lot . . . .[W]e couldn’t get definitive answers
about how he came up with the numbers” (R4, tab 5-6 at 75-77). Mr. Hargis testified
that, when he met with Mr. Watts to get an understanding of the WBS, Mr. Watts
“provided some guidance as to his thought process [but it] really didn’t help us much,
because the numbers are what the numbers are” (R4, tab 5-4 at 65-67). Mr. Watts
testified at his deposition that he had no knowledge about the purpose of an option
year modifier, or how the option year modifier was derived (R4, tab 5-8 at 119-20).

        Regardless of how the option year modifier values were determined, their
overall effect on the WBS was to reduce the total recurring work labor hours from
682,501.91 to 414,101.18 labor hours and full time equivalents (FTEs), for Chugach’s
self-performed recurring work, from 363.10 FTEs to 220.37 FTEs (R4, tab 6-1 at Cells
S7 and T7; tab 10-1 ¶ 54). Chugach’s FTE count prior to application of the option year
modifier (363.10) is approximately the same number of FTEs that EJB performed with
in FY 2010. This figure was known to Chugach before it submitted its final proposal
revision for the WSBOS contract in November 2013 (R4, tab 6-52 (email dated
February 2, 2012 from Mr. Hammock, informing the proposal team that “as the WBS
starts to flesh out we need to be well below the current staffing level . . . in FY 10, we
saw that EJB had 364 employees plus 156 subcontract employees.”) R4, tab 6-124
at CFSI101373_38 (noting for FY10 “EJB FTE count 364 + 156 Subs.”)).

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    to an ASBCA Protective Order. This version has been approved for public release.
       D. The Learning Curve

        Chugach’s proposal also provided that it would reduce its total workforce by
3% each year for each of the option years (R4, tab 2-39.7 at GOV212643_4). If
implemented as proposed, this “learning curve workforce reduction” would result in a
staffing reduction of approximately 10.5% from the base year to the final option year.
This is a reduction of an additional 23.15 (220.85 - 197.70) FTEs of Chugach’s labor,
excluding subcontractors. (Id.) The 3% learning curve reduction was solely based on
Chugach’s business judgment (R4, tab 5-10 at 25-26; 65-66). Mr. Hargis testified
at his deposition that the learning curve was “not realistic,” “very aggressive,” and “a
flawed plan to begin with” (R4, tab 5-4 at 30-31, 76-77, 99-100, 288). In June 2014,
after Chugach was awarded the WSBOS contract but before it started performing,
Mr. Hargis wrote in an internal Chugach email that the learning curve was “a great
selling point but is BS from an Ops standpoint” (R4, tab 6-134 at CFSI132904_1; R4,
tab 5-4 at 77).

       E. Chugach’s Response to the Integrated Maintenance Program Requirement

        With respect to the integrated maintenance program (IMP) requirement,
Mr. Hammock testified that the requirement’s only impact to Chugach’s proposal was
that it comprised one of the underlying assumptions of the learning curve—the IMP
requirement did not otherwise impact Chugach’s staffing assumptions or proposal
price, despite being a completely different approach to maintenance from the
predecessor contract (R4, tab 5-10 at 13-19). However, in Chugach’s Kick-Off
Meeting the IMP was described as a “heavy cost driver[]” (R4, tab 6-124
at CFSI101373_38). Chugach recognized that failing to implement reliability centered
maintenance (RCM) was resulting in performance of “very labor-intensive” and
inefficient maintenance (R4, tab 5-7 at 89-91; R4, tab 6-73 at CFSI115660_1).
Mr. Hammock himself described the transition from time-based PMs to RCM as one
of the largest reductions to the WBS and implementing RCM would be one of the
“most impactful” ways for Chugach to reduce its costs (R4, tab 6-128
at CFSI110675_1).

       F. Chugach’s Treatment of Trouble Calls

        Chugach used the quantity of trouble calls for FY11 from the WSBOS
solicitation to determine the expected volume or number of trouble calls (R4, tab 7-37
at 6; R4, tab 10-1 ¶ 76). Chugach additionally used its own historical data from
Whidbey Island and Fallon to estimate the number of hours per trouble call (R4, tab 6-
13 at CFSI97123_1; R4, tab 5-10 at 96-99, 144, 151; R4, tab 10-1 ¶ 76). Chugach did
not specifically estimate the material costs for trouble calls, but instead relied upon a
contract-wide global estimate of material costs as 13.2% of “unwrapped costs” (labor,
vehicles/equip., and ODCs) (gov’t ex. 4 ¶ 13). However, because Chugach applied an

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    to an ASBCA Protective Order. This version has been approved for public release.
option year modifier of 55% to its original estimated level of effort to perform trouble
calls, the result was that Chugach assumed that it could perform more efficiently (i.e.,
using fewer hours per trouble call) than its own performance at Whidbey and Fallon
(R4, tab 5-10 at 151-53, 197; gov’t ex. 4 ¶¶ 39-40).

        Chugach’s employees recognized that the unlimited trouble calls in the WBOS
solicitation would result in increased numbers of trouble calls compared to historical
data. Mr. Hargis testified that the change to unlimited trouble calls “incentivized”
Navy customers to call in more trouble calls “because there’s no limit,” in contrast to
the EJB contract, under which those customers “were disincentivized because they had
to pay for” extra trouble calls (R4, tab 5-4 at 140-46). Mr. Viramontes testified that an
unlimited number of trouble calls makes the WSBOS contract more risky than the EJB
contract (R4, tab 5-7 at 75-76). With respect to the “unlimited” trouble calls
contemplated by the WSBOS solicitation, Mr. Hammock testified that Chugach
specifically identified the risk of an increase in workload “much greater than
historical” as a result of the change. Rather than model that risk as an increased
estimate for trouble call hours, Chugach opted to account for that risk in the profit
markup it would seek under its fee. (R4, tab 5-10 at 31-33; R4, tab 12-232.1
at CFSI107046_1; R4, tab 12-232.2 [native] at Sheet: Summary, Cells A22, C22
(determining after the Government provided clarification that trouble calls were
unlimited that there was no cost impact)) With respect to the shorter response times to
respond to trouble calls, Mr. Viramontes testified that shorter response times will
generally increase the number of FTEs needed to handle a given number of trouble
calls (R4, tab 5-6 at 190-91; R4, tab 5-7 at 40-41). With respect to the $5,000
limitation of liability for trouble calls, which was different from the EJB Contract’s
two-tier $2,000 and $5,000 limitations of liability, (R4, tab 6-124 at CFSI101373_19),
Chugach’s 30(b)(6) witness testified that the $5,000 limitation of liability on trouble
calls had no impact on Chugach’s proposal (R4, tab 5-10 at 55-56). However,
Mr. Haunton testified that the increase in liability limits from the EJB contract to the
WSBOS contract was significant: “Well, any time you double the cost . . . it’s
significant going from . . . a liability limit of $5,000 per work order and, for a utility
piece of equipment, to 10,000, that’s significant” (R4, tab 5-5 at 95). Mr. Haunton
testified that higher liability limits would, at least “in theory,” cause the FTEs for
recurring work to be higher (id. at 96-97; R4, tab 6-112 at CFSI239913_23 (May 16,
2016, Chugach presentation stating that the change in liability limits has “major cost
implications.”)). Mr. Crosta testified that the higher the liability limit the higher the
risk to a contractor (R4, tab 5-1 at 78-79; see also R4, tab 6-12 at CFSI98065_1).

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    to an ASBCA Protective Order. This version has been approved for public release.
   IV. THE SOURCE SELECTION

       A. Initial Proposals

        On or before the February 28, 2012 proposal deadline, CFSI and eight other
offerors submitted proposals in response to the RFP (compl. ¶ 36). One of the other
offerors was West Sound Services Group (WSSG), which was a Limited Liability
Company formed between J&J Worldwide Services and EMCOR Government
Services, which had been two of the three entities that formed EJB, the incumbent
contractor performing the EJB contract (R4, tab 2-35.16 at GOV549288_1; EJB
Facilities Servs., 15-1 BCA ¶ 35,867 at 175,350 n.1). WSSG represented that, through
its experience with EJB it possessed the “institutional knowledge that constitutes the
baseline for our technical approach” (R4, tab 2-35.16 at GOV549288_1). One of the
other offerors was LINC Government Services LLC (LGS), which was the successor
entity to BMAR & Associates, the third entity that comprised EJB (R4, tab 2-7.4
at GOV544202_4; EJB Facilities Servs., 15-1 BCA ¶ 35,867 at 175,350 n.1). One of
the other offerors was IAP-HILL, LLC (IAP), a joint venture managed by IAP
Worldwide Services, Inc (R4, tab 2-3.15 at GOV543992_1). Through its subsidiary
IAP World Services, Inc., IAP Worldwide Services had performed the base operating
services contract that preceded the EJB contract (id. at GOV543992_6-10). Moreover,
IAP Worldwide Services’ contract was the result of a successful rebid, meaning that
IAP Worldwide Services had actually performed base operations services at West
Sound for nearly 15 years prior to the EJB contract (see id. at GOV543992_9).

        Chugach’s proposal dated February 28, 2012, states that its bid is based on
achieving significant efficiencies and cost savings throughout the scope of the
contract. Under “Factor 2 – Technical Approach/Method,” the proposal states that
Chugach would perform the WSBOS contract with a “lean workforce” by using a
“‘hub and spoke’ concept of operations” and, of Chugach’s plan to further reduce its
workforce by 3% each year, asserted that Chugach had “achieved similar efficiencies”
on similar contracts (R4, tab 2-4.7 at GOV209039_30) Under “Factor 3, Management
Approach/Capability of Key Personnel,” Chugach’s proposal asserts that it expects to
achieve efficiencies from its “hub and spoke” concept of operations, and its adoption
of its RCM program in conjunction with Nelson Engineering (id. at GOV209039_75).

        Chugach’s proposal also asserts that “Chugach will enhance our workforce
flexibility through cross-utilization” and that cross-training and cross-utilization of
employees are “key components for gaining maximum efficiency from a lean
workforce . . .” (id. at GOV209039_81).

        Chugach’s proposal assumed a staffing level of 322.85 FTEs (id.
at GOV209039_45). Chugach’s estimate of approximately 323 FTEs was not an
outlier from the other offerors. Three offerors estimated fewer FTEs and five offerors

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    to an ASBCA Protective Order. This version has been approved for public release.
estimated more FTEs (R4, tab 2-5.16 at GOV544729_4 (WSSG, proposing 293 FTEs);
R4, tab 2-3.16 at GOV544015_21 (IAP-HILL, proposing 303 FTEs); R4, tab 2-6.11
at GOV1023145_16 (G4S, proposing 306 FTEs); R4, tab 2-4.7 at GOV209039_45
(Chugach, proposing 323 FTEs); R4, tab 2-7.4 at GOV544202_47 (LGS, proposing
324 FTEs); R4, tab 2-2.14 [native] (Exelis, proposing 324 FTEs); R4, tab 2-1.4
at GOV1022936_38 (Fluor, proposing 352 FTEs); R4, tab 2-8.5 at GOV1023289_17
(NWSS, proposing 396 FTEs); R4, tab 2-9.7 at GOV1023680_45 (Star3, proposing
428 FTEs)). Of the three offerors with prior experience at West Sound, WSSG (293
FTE) and IAP (303 FTE) both estimated fewer FTEs than Chugach, and LGS (324)
estimated 1 more FTE than Chugach (R4, tab 2-5.16 at GOV544729_4; R4, tab 2-3.16
at GOV544015_21; R4, tab 2-7.4 at GOV544202_47).

       NAVFAC did not evaluate the offerors’ original proposals because, on July 24,
2012, it issued Amendment 0011 which, among other things, made various
adjustments to the PWS (R4, tab 1-12.1 at GOV14201; R4, tab 6-62 at E1; R4, tab 4-
44 at GOV29294).

      B. The First Proposal Revisions

       On or before August 9, 2012, Chugach submitted a first proposal revision (R4,
tab 4-44 at GOV29294). Chugach’s first proposal revision estimated a staffing level
of 329.04 FTEs, an increase of 6.19 FTEs over its original proposal (see compl. ¶ 40).
Once again, Chugach’s staffing proposal was not an outlier, with five offerors
estimating fewer FTEs and three offerors estimating more FTEs (R4, tab 2-14.9
at GOV542646_4 (WSSG, proposing 290 FTEs); R4, tab 2-15.12 at GOV542048_16
(G4S, proposing 307 FTEs); R4, tab 2-12.12, GOV1022477_21 (IAP-HILL, proposing
308 FTEs); R4, tab 2-11.14, [native] (Exelis, proposing 323 FTEs); R4, tab 2-16.3
at GOV936647_2 (LGS, proposing 322 FTEs); R4, tab 2-13.9 at GOV208762_45
(Chugach, proposing 329 FTEs); R4, tab 2-10.4 at GOV541908_4 (Fluor, proposing
359 FTEs); R4, tab 2-17.7 at GOV542492_10 (NWSS, proposing 398 FTEs); R4,
tab 2-18.6 at GOV936713_46 (Star3, proposing 434 FTEs)). Of the three offerors
with prior experience at West Sound, all three estimated fewer FTEs than Chugach,
with WSSG estimating 290 FTEs, IAP estimating 308 FTEs, and LGS estimating 322
FTEs (R4, tab 2-14.9 at GOV542646_4 ; R4, tab 2-12.12, GOV1022477_21; R4,
tab 2-16.3 at GOV936647_2).

      In a memorandum dated August 15, 2012, NAVFAC’s Technical Team
documented its review of the first proposal revisions (R4, tab 2-42.2 at GOV474771).
Regarding the FTE’s estimated by Chugach’s First Proposal Revision, the Technical
Team’s report states:

             The hours proposed appear to be underestimated in annex
             020000, 150000, 16000, and 180000. This is also

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             represented in the number of FTE’s proposed in these
             annexes. The estimated level of effort in hours is not
             consistent or comparable with that estimated by the
             Government when considering the Key Personnel and
             administrative functions in Annex 020000 and the differing
             service call response times and IMP requirements of
             Annex 150000. Though little has changed with the
             requirements of Annex 180000, the man-hour estimate
             falls short of current Independent Government Estimate
             (IGE) figures based on the current workload.

             20000- FTE’s appear low in comparison to the IGE; the
             J.M-5 does not require that activities in annex 2 be
             separately listed so it cannot be determined what activity is
             understaffed. The proposal is 15 FTE’s less than the IGE.

             150000- FTE’s appear significantly low in trouble calls
             and maintenance. This demonstrates a misunderstanding of
             the staffing levels required to perform “no limit” trouble
             calls and meeting the requirements of IMP. The proposal
             is 75 FTE’s below the IGE.

             160000- FTE’s appear low in electrical utility operation
             requirements. The proposal appears to not consider the
             number of FTE’s required to perform these operations.

             180000- FTE’s appear low in hazardous waste
             management services. The proposal is 6 FTE’s below the
             IGE.

             This is also concerning because one of Chugach’s
             proposed objectives is to realize a “learning curve” and
             reduce FTE’s 3% over the life of the contract through
             efficiency.

             Staffing in all other annexes was approximately equal to
             the IGE.

(Id. at GOV474785-86)

        The Technical Team report also states, of Chugach’s first proposal revision,
that “[a]ll annexes demonstrate an understanding of the requirements and describe a
method and approach to accomplish RFP requirements” (id. at GOV474786). Of

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Chugach’s representation that it would partner with a third-party engineering firm
(Nelson Engineering) to develop and implement the required IMP program, the
Technical Team report states that “[t]his was viewed as a strength by the board due to
the importance of an IMP program that is continually monitored and adjusted to
realize a balance of performance and reliability” (id. at GOV47487).

        As a result of the Technical Team’s finding that Chugach’s estimated FTEs for
Annexes 020000, 160000, and 180000 appeared “low,” and that Chugach’s estimated
FTEs for Annex 150000 appeared “significantly low,” the Technical Team concluded
that Chugach’s First Proposal Revision had a “significant weakness” related to staffing
levels (id. at GOV474785-86, 88).

        The Technical Team’s findings regarding whether an offeror’s estimated FTEs
were “low,” “high,” “significantly low,” or “significantly high” were based on the
difference between the offeror’s estimated FTEs and the FTEs estimated by the IGE
(id. at GOV474785-86; app. ex. 3 at 132-33, 141, 143). The technical team assigned a
“significant weakness” related to staffing levels to eight of the nine offerors (R4, tab 2-
42.2 at GOV474788, GOV474813, GOV474839, GOV474863, GOV474888,
GOV474915, GOV474940, GOV474989).

       In a report dated September 11, 2012, the Source Selection Advisory Council
(SSAC) documented its review of the reports prepared by the Technical Team and
Price Team and provided its recommendations to the Source Selection Authority
(SSA) (R4, tab 2-42.4 at GOV1722534). With respect to the staffing estimated by the
offerors, the SSAC report states:

              One of the areas of concern is the number of offerors
              whose proposed staffing for recurring work was
              significantly less than the 396.64 FTEs estimated by the
              Government. WSSG, ICHS, and LGS proposed 246.84,
              283.21, and 291.63, respectively, and are approximately
              105 to 150 less than the GE. G4S, ESC, CFSI, and FSS
              proposed 307.2, 324.74, 328.91, and 358.50 FTEs,
              respectively. Although closer to the GE, the proposed
              FTEs ranged from approximately 38 to 89 less than the
              GE. With 398.27 and 400.87 FTEs proposed, NWSS and
              Star 3, respectively, were comparable to the GE; they are
              also the highest priced.

              The variance between the FTE count between most of the
              offerors and the GE can be attributed [to] several things.
              The GE could be in error, or offerors are attempting to
              position themselves favorably for contract award. It is also

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
             possible that a lower FTE count can be the result of
             improved, more efficient work practices or methodologies
             and an increased use of technology. However, the primary
             focus of this contract is the provision of public works
             maintenance services which are traditionally labor
             intensive. The wide range of FTEs is an indicator that
             offerors should be prompted to review the performance
             work statement to ensure their proposals include the level
             of effort required.

             Both the Technical and Price team reviewed proposed
             FTEs and developed proposed questions to support their
             concerns. The Technical Team’s review was based on a
             comparison of the offerors’ proposed staffing compared to
             the GE. The price report utilized a standard deviation
             analysis method that is more detailed and comprehensive
             than the Technical Team’s approach that included all
             offerors’ and the Government’s FTE estimates. Both
             teams considered the proposed FTEs by annex for
             recurring work. Despite the apparent duplication of effort,
             both teams focused on separate issues. The Technical
             Team’s proposed questions are focused on specific areas
             within an annex that appear under- or over-staffed while
             the price report approaches FTEs from a price perspective.
             The FTE concerns expressed by both teams are valid, and
             it is recommended that the questions prepared by each
             team be presented to the offerors during discussions.

(Id. at GOV1722546-47)

       The SSAC report recommended that all nine offerors remain in the competitive
range and be provided an opportunity to revise their proposals. With respect to CFSI,
the report states:

             Offering the lowest price and rated Acceptable overall,
             Chugach Federal Solutions appears to be a strong
             candidate for contract award. Discussions will permit the
             offeror to potentially increase its technical weaknesses in
             Factors 2 and 3. Discussions will also provide the offeror
             an opportunity to review its proposed 328.91 FTEs for
             recurring work to ensure its proposed workforce can
             comply with the RFP requirements.

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
(Id. at GOV1722547) In a memorandum dated September 26, 2012, Steve Shapro, the
designated Source Selection Authority (SSA), documented his agreement with SSAC’s
recommendation to enter discussions with all nine offerors. The SSA also documented
his comments about the difference between the IGE and the majority of the First
Proposal Revisions:

             As discussed in reference (a), the IGE price and FTEs are
             significantly higher than the price and FTEs on the
             majority of the proposals. [] As discussed at FAR 15.404-
             1, Proposal Analysis Techniques, the RFP states that price
             analysis will be performed by a number of techniques
             including the comparison of proposals to the IGE. Given
             the significant variation between the IGE and proposed
             prices and FTEs, the IGE should be validated by the
             Government team that developed it. If necessary, the IGE
             should be revised prior to completing the price evaluation
             of proposals received following discussions. The
             validation of the IGE and the rationale for any revisions
             should be documented in the Price Evaluation Team’s final
             report.

(App. supp. R4, tab 853 at CSUP29972-73)

       David Williams, the NAVFAC employee with overall responsibility for
compiling the IGE, subsequently undertook the requested “validation” of the IGE
(app. supp. R4, tab 1062 at CSUP38470). On November 7, 2012, NAVFAC issued an
evaluation notice to Chugach regarding Chugach’s first proposal revision (R4, tab 2-
42.5 at GOV474578). The evaluation notice sent to Chugach included eighteen
discussion questions directed at its price proposal (id. at GOV474583-84) and five
discussion questions directed at its nonprice proposal (id. at GOV474585). Among the
questions, regarding Factor 2, Technical Approach/Methods, the evaluation notice
asked

             After reviewing the Performance Work Statement for
             Annexes 020000, 150000, and 180000, please ensure your
             hour estimates and FTE staffing for these annexes has
             adequately addressed no limitation to trouble call
             quantities, the increased requirements of the RFP (over
             historical) maintenance program including IMP, and
             environmental services specifically hazardous waste
             management.
(Id.)

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    DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
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         C. Second Proposal Revisions

       Chugach and the other eight offerors submitted second proposal revisions on or
about November 20, 2012 (R4, tab 2-43.1 at GOV475007). Chugach’s second
proposal revision estimated a staffing level of approximately 318 FTEs (R4, tab 2-22.7
at GOV1602610_16 (Chugach, proposing 318 FTEs)). Once again, Chugach’s
estimate of approximately 318 FTEs was not an outlier from the other offerors. Three
offerors estimated fewer FTEs and five offerors estimated more FTEs (R4, tab 2-21.12
at GOV473763_4 (IAP-HILL, proposing 254 FTEs); R4, tab 2-23.11
at GOV1598994_4 (WSSG, proposing 290 FTEs); R4, tab 2-24.15 at GOV936827_8
(G4S, proposing 309 FTEs); R4, tab 2-20.17 [native] (Exelis, proposing 332 FTEs);
R4, tab 2-25.4 at GOV936873_32 (LGS, proposing 359 FTEs); R4, tab 2-19.6 [native]
(Fluor, proposing 371 FTEs); R4, tab 2-26.6 at GOV1723728_5 (NWSS, proposing
385 FTEs); app. supp. R4, tab 936 at CSUP36316 (Star3, proposing 423 FTEs)). Of
the three offerors with prior experience at West Sound, IAP (254 FTEs) and WSSG
(290 FTEs) estimated fewer FTEs and LGS (359 FTEs) estimated more FTEs (R4,
tab 2-21.12 at GOV473763_4; R4, tab 2-23.11 at GOV1598994_4; R4, tab 2-25.4
at GOV936873_32).

         In a report dated December 5, 2012 (R4, tab 2-43.2), the Technical Team
documented its review of Chugach’s second proposal revision, including its responses
to NAVFAC’s November 7, 2012 evaluation notice (id. at GOV475164-89). As part
of its analysis, the price team performed a “statistical” analysis that attempted to
identify bid prices for specific annexes as being high and low (R4, tab 2-42.1
at GOV474675). Chugach contends that the Navy’s analysis was flawed, because the
government assumed a normal distribution and then eliminated any prices that it
considered to be “outliers” and then recalculated the mean and standard deviation
(id.). 3 To the extent that the government eliminated outliers that it considered to be
“too high” the effect would be to reduce the mean and the standard deviation.
However, the government contends, in essence, that it was simply using the analysis as
a tool to identify prices that were high or low relative to the other offerors (that is,
descriptive statistics rather than inferential statistics) 4 (app. ex. 7 at 68-70; R4, tab 2-
42.1 at GOV474625). Chugach additionally contends that the standard deviations,
even after the elimination of outliers and recalculation, were too large to function as

3
  A standard deviation is measure of the variation or dispersion of a data set. A data
       set with a low standard deviation would have data points tightly clustered
       around the mean (mathematical average), while a data set with a large standard
       deviation would have data points with a greater spread.
4
  As an example, house prices do not follow a normal distribution. Descriptive
       statistics can tell whether the price of a particular house is high or low relative
       to other houses, but cannot estimate the probability that a house will be worth a
       certain price.
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    DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
       to an ASBCA Protective Order. This version has been approved for public release.
reliable tools (R4, tab 6-171 ¶ 105). However, to the extent the standard deviations
were too large to function as reliable tools, this would discredit Chugach’s superior
knowledge argument because the price team would not have known, from the standard
deviation that Chugach’s proposal prices were too high, or too low.

       Regarding CFSI’s response to the evaluation notice’s discussion question
regarding Factor 2 – Technical Approach/Methods, the Technical Team report states:

                DISCUSSION QUESTION: After reviewing the
                Performance Work Statement for Annexes 020000,
                150000, and 180000, please ensure your hour estimates
                and FTE staffing for these annexes has adequately
                addressed no limitation to trouble call quantities, the
                increased requirements of the RFP (over historical)
                maintenance program including IMP, and environmental
                services specifically hazardous waste management.

                RESPONSE: Chugach clarified that a review of the PWS
                was conducted and a revised J.M-5 was provided. The
                revised J.M-5 resulted in an overall loss of 12 FTE’s across
                all annexes with no changes to annex 020000 and 180000.
                Annex150000 and 160000 were reduced by approximately
                5 FTE’s and 6 FTE’s respectively.

                EVALUATION RESULTS OF RESPONSE: The board
                concluded that the contractor response and revised J.M-5
                did not adequately address the Government[’]s concern;
                however the revised proposal acknowledged that Chugach
                determined the staffing levels were sufficient to
                accomplish the requirements of the RFP. The significant
                weakness remains.

(R4, tab 2-43.2 at GOV475171-72)

       In a report dated December 10, 2012, the Price Team documented its review of
the offerors’ second proposal revisions (R4, tab 2-43.1 at GOV475007, GOV475156).
In a memorandum dated December 19, 2012, David Williams documented his IGE
“validation” (app. supp. R4, tab 1062 at CSUP38470; app. supp. R4, tab 1062.01
at CSUP38472-75). 5 Mr. Williams concluded that the IGE was a “reasonable”
estimate of the cost to fully and satisfactorily perform the requirements of the WSBOS
contract; however, he observed that the IGE was “conservative” compared to what

5
    The IGE validation memorandum is dated 9 days after the price team report.
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might be proposed by contractors in a competitive bidding environment (app. supp.
R4, tab 1062.01 at CSUP38473-74). In its report regarding the second proposal
revisions, the SSAC noted that the Technical Team “relied heavily upon the IGE when
evaluating proposed FTEs” (R4, tab 2-43.4 at GOV1202881). Given Mr. Williams’
conclusion that the IGE represented a conservative estimate, the SSAC concluded that
the IGE could be used as a benchmark for “a maximum staffing number that should
not be exceeded; however, it cannot offer assistance in determining the minimum
FTEs required” (id.). Accordingly, the SSAC compared the offerors to each other
rather than the IGE (id.). Based on that comparison, the SSAC report stated that “the
[SSAC] does not believe that the FTE significant weaknesses noted by the TT in
Factor 2 for CFSI, G4SGS, LGS, and ESC are appropriate” (id. at GOV1202882).
The SSAC report recommended removal of the significant weakness findings (id.). In
addition, the SSAC report recommended eliminating five of the offerors from the
competitive range: LGS, WSSG, G4SGS, NWSS, and Star3 (id. at GOV1202883-85).

       In a memorandum dated January 8, 2013, the Source Selection Authority
(SSA), Steve Shapro, documented his decision to eliminate five of the nine offerors—
G4SGS, LGS, NWSS, Star3, and WSSG—from the competitive range (app. supp. R4,
tab 1068 at CSUP38498-501). Remaining in the competitive range were CFSI, ESC,
FFS, and IAP (id. at CSUP38501-02).

      Regarding the IGE, the SSA’s memorandum states:

             During evaluation of initial proposals, it was noted that the
             IGE price and Full Time Equivalent staff (FTE) were
             significantly higher than the price and FTEs on most of the
             proposals. As a result, the Government team that
             developed the IGE was requested to validate it. The
             Government team verified the calculations, reviewed the
             estimates for realism, and confirmed underlying
             assumptions of the IGE.

             The Government determined the IGE by calculating the
             efforts and resources required to perform each annex
             independently. The individual annex estimates were then
             aggregated to develop an overall IGE. The Government
             took minimal risks in developing the IGE and did not
             attempt to incorporate resource leveling across the
             annexes. Conversely, the contractors’ price and FTE
             estimates most certainly include the cross utilization of
             personnel based on business decisions that reflect tradeoffs
             between risks and costs. This difference in approach is
             essential as it explains why there is such a difference

                                          25
 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
             between the “theory” used by the Government to develop
             its staffing estimate when compared to the offerors’
             practical and realistic approach of reallocating staffing
             resources to meet performance needs. As a result of the
             Government’s conservative methodology, the IGE is at the
             high end of the price and FTE spectrum. A review of the
             Price Report and SSAC reports indicate that the source
             selection team was cognizant of this information and
             addressed appropriately it [sic] in their analysis of the
             proposals.

(Id. at CSUP38498)

      Regarding Chugach’s second proposal revision, the SSA’s memorandum states:
            CFSI: CFSI offers a strong technical proposal and is rated
            Good overall. Technically, this firm is ranked fourth and
            offers the lowest price. At this stage of the competition,
            considering the technical factors and price, CFSI’s
            proposal is the most competitive for award.

(Id. at CSUP38501)

       On January 23, 2013, the Navy informed WSSG that it had been eliminated
from the competitive range (app. supp. R4, tab 1083.03 at CSUP38613; West Sound
Services Group, LLC, B-406583.2, B-406583.3, 2013 CPD ¶ 276 (Comp. Gen. Jul. 3,
2013)). Following an agency-level protest (R4, tab 8-30 at GOV1708526_1-2),
WSSG protested the Navy’s decision to the GAO on March 25, 2013 (id.). On July 3,
2013, GAO issued its decision sustaining the protest and recommending that WSSG be
added back into the competitive range (R4, tab 8-32 at GOV1709748_1-22).

      D. Third Proposal Revisions

       On or about February 1, 2013, after WSSG had been excluded from
competition but before the resulting protest had been resolved, Chugach, ESC, FFS,
and IAP, the four offerors remaining in the competitive range, submitted third proposal
revisions (R4, tab 2-27.2 at GOV548079_1; R4, tab 2-28.3 at GOV1599142_1; R4, tab
2-29.1 at GOV548591_1; R4, tab 2-30.3 at GOV212713_1). Chugach’s third proposal
revision estimated a staffing level of 288 FTEs (R4, tab 2-30.6 [native], Cell U73).
Chugach’s estimate of approximately 288 FTEs was not an outlier from the other
offerors. IAP, the remaining offeror with prior experience at West Sound, estimated
272 FTEs (R4, tab 2-29.12 J.M-1 Additional Pricing Info [native], Cell U73). FFS and
ESC estimated 342 and 327 FTEs, respectively (R4, tab 2-27.4, J.M-1 Additional

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Pricing Info [native], Cell U73; R4, tab 2-28.9, J.M-1 Additional Pricing Info, Cell
T73).

       On July 10, 2013, after reinstating WSSG and reopening discussions in
response to GAO’s decision in B-406583, the government issued an evaluation notice
to Chugach (R4, tab 2-44.4 at GOV474548). The evaluation notice included four
discussion questions, including the following:

              1.      Summary of Recurring Work FTEs Findings.
              Applies to both the price and non-price proposals. []
              While your overall recurring work FTEs are within an
              acceptable range, your recurring work FTEs for specific
              annexes 0401060, 1501000, 1502000, and 1502010 appear
              low, and your FTEs for 1503020, 1503030, 1600000,
              1602000, 1603000, 1605000, and 1607000 appear high.
              Please review and amend or confirm your FTEs for each
              listed annex as required.

(Id. at GOV474553)

       E. Fourth Proposal Revisions

       Chugach’s fourth proposal revision, dated July 25, 2013, estimated
approximately 292 FTEs (R4, tab 2-34.7 at GOV548623_7). Chugach’s estimate of
approximately 292 FTEs was not an outlier from the other offerors. IAP, which had
prior experience at West Sound, also estimated approximately 292 FTEs (app. supp.
R4, tab 1201.02 at CSUP41460 (IAP-HILL, proposing 292 FTEs); R4, tab 2-34.7
at GOV548623_7 (Chugach, proposing 292 FTEs); R4, tab 2-35.19 at GOV549313_4
(WSSG, proposing 295 FTEs); R4, tab 2-31.6 at GOV1057084_16 (Fluor, proposing
298 FTEs); R4, tab 2-32.14 [native] (Exelis, proposing 336 FTEs)). WSSG,
comprised of two of the three joint venturers that had performed the EJB Contract,
estimated approximately 295 FTEs (R4, tab 2-35.19 at GOV549313_4). Flour and
Exelis estimated approximately 298 and 336 FTEs, respectively (R4, tab 2-31.6
at GOV1057084_16; R4, tab 2-32.14 [native]). In a memorandum dated July 31,
2013, the Price Team documented its evaluation of the Fourth Proposal Revisions (R4,
tab 2-45.1 at GOV475476, GOV475511). In a memorandum dated August 8, 2013,
the Technical Team documented its evaluation of the fourth proposal revisions and
ranked Chugach’s fourth proposal revision second with a technical rating of “Good”
(R4, tab 2-45.2 at GOV475512-13). The Technical Team report summarizes the
strengths and weaknesses of Chugach’s fourth proposal revision as pertains to Factor
2, Technical Approach/Methods, as follows:

              Strengths:

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             • Contract Security Manager and HVAC/R Supervisor
             offers significant experience.
             • Third party engineering partner will be utilized to
             develop and continuously improve IMP program.
             • Technology based metric that defines activities
             performed to equipment under IMP.

             Weaknesses: None noted

             Significant Weaknesses:
             • Despite discussions, new electrical supervisor proposed
             lacks NERC Certification and does not meet RFP
             requirements.
             • [sic]
             Deficiencies: None noted

(Id. at GOV475528) In a memorandum dated September 12, 2013, the SSA
documented his decision to end discussions and request final proposal revisions from
the five offerors in the competitive range: Chugach, ESC, FFS, IAP, and WSSG (R4,
tab 2-45.5 at GOV475443, GOV475446). With respect to the IGE, the SSA
memorandum states:

             During evaluation of initial proposals, it was noted that the
             IGE price was significantly higher than the price on most
             of the proposals. As a result, the Government team that
             developed the IGE was requested to validate it. The
             Government team verified the calculations, reviewed the
             estimates for realism, and confirmed underlying
             assumptions of the IGE.

             The Government determined the IGE by calculating the
             efforts and resources required to perform each annex
             independently. The individual annex estimates were then
             aggregated to develop an overall IGE. The Government
             took minimal risks in developing the IGE and did not
             attempt to incorporate resource leveling across the
             annexes. Conversely, the contractors’ price most certainly
             includes the cross utilization of personnel based on
             business decisions that reflect tradeoffs between risks and
             costs. This difference in approach is essential as it
             explains why there is such a difference between the
             “theory” used by the Government to develop its staffing
             estimate when compared to the offerors’ practical and

                                          28
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    to an ASBCA Protective Order. This version has been approved for public release.
             realistic approach of reallocating costs and staffing
             resources to meet performance needs. As a result of the
             Government’s conservative methodology, the IGE is at the
             high end of the price spectrum. A review of the Price
             Report and SSAC reports indicate that the source selection
             team was cognizant of this information and addressed it
             appropriately in their analysis of the proposals.

(Id. at GOV475445)

       Regarding the SSA’s decision to end discussions and request final proposal
revisions, the SSA memorandum states:

             4. COMPETITIVE RANGE DECISION, ENDING
             DISCUSSIONS AND REQUESTING FINAL
             PROPOSAL REVISIONS
             Based on the Navy’s evaluation of revised proposals
             following the last round of discussions, all five offerors
             should remain in the competitive range. All firms are rated
             Good overall technically, and it is reasonable to assume the
             $36,892,887.52 or 13.03% variance between the lowest
             and highest priced offerors (CFSI and ESC, respectively)
             will decrease with the final proposals.

             As discussed at FAR 15.307, at the conclusion of
             discussions, each offeror remaining in the competitive
             range shall be given an opportunity to submit a final
             proposal revision. Accordingly, discussions should be
             ended and final proposal revisions should be requested
             from the five offerors in the competitive range: CFSI, ESC,
             FFS, ICHS and WSSG.

             A best value ranking of the firms will not be conducted
             until after receipt of final proposal revisions.

(Id. at GOV475446)

      F. Final Proposal Revisions

      Chugach’s Final Proposal Revision JM-5 reflected an estimate of
approximately 311 FTEs (R4, tab 2-39.7 at GOV00212643_13 (Chugach, proposing
311 FTEs); gov’t ex. 11 at 6). Chugach’s final price proposal for FY15 Recurring was
$31,613,147 (R4, tab 2-39.1 at GOV468687_39). Chugach’s estimate of

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    to an ASBCA Protective Order. This version has been approved for public release.
approximately 311 FTEs was not an outlier from the other offerors. Of the five
offerors remaining, three estimated fewer FTEs than Chugach, including IAP (284
FTEs), which had prior experience at West Sound, and WSSG (289 FTEs), which was
comprised of 2 of the 3 joint venturers that had performed the EJB Contract (R4, tab 2-
38.14 at GOV547785_4 (IAP-Hill, proposing 284 FTEs); R4, tab 2-40.13
at GOV547893_4 (WSSG, proposing 289 FTEs); R4, tab 2-36.5 [native] (Fluor,
proposing 298 FTEs); R4, tab 2-37.10 [native] (Exelis, proposing 336 FTEs); gov’t ex.
11 at 6).

        In a report dated December 4, 2013, the Technical Team documented its review
of final proposal revisions (R4, tab 2-46.2 at GOV475707). Regarding Chugach’s
final proposal revision, the Technical Team report states:

             Chugach was ranked second; their proposal had a technical
             rating of Good. The factor ratings are as follows; Factors
             1, Corporate Experience, Factor 2, Technical
             Approach/Methods and 3, Management
             Approach/Capability of Key Personnel, Factor 6, Small
             Business Utilization were determined to be Good. Factor
             5, Safety was rated Outstanding. The TT felt that the
             Technical Approach/Methods was a strength over that of
             the remaining offerors due to the qualifications of a few
             key personnel in Factor 2 exceeding RFP requirements.
             Other noted strengths proposed were a third party partner
             to develop and continuously improve the IMP program as
             well as evaluate program effectiveness. The FTE’s
             proposed by Chugach are second closest when compared
             to the IGE. The remaining significant weakness in Factor
             2 was the Electrical Supervisor not being compliant with
             NERC certification.

(Id. at GOV475710)

        In a memorandum dated January 10, 2014, the SSAC Chairperson, Audrey
Fitzgerald, documented the SSAC’s evaluation of the Technical Team’s, Price Team’s,
and SSEB’s supplemental findings and recommendation of which proposal offered the
best value to the government (R4, tab 2-46.4 at GOV1722627, GOV1722629). The
SSAC found that the Price Team “conducted a reasonable evaluation of the offerors’
final proposals in accordance with the RFP” and accepted the Price Team’s overall
findings (id.). The SSAC further noted that the IGE was not used in the price analysis
because “the proposed prices reflect the current market conditions and therefore a
more accurate expected value” (id. at GOV1722630). The SSAC noted that the IGE
had not been updated throughout the life of the procurement because “there was no

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expertise available to rectify erroneous assumptions made when the estimate was
initially prepared” (id.). The SSAC summarized several deficiencies in the IGE. For
example, the SSAC noted that NAVFAC had never previously used an Integrated
Maintenance Plan (IMP) concept in a regional facility maintenance contract, and so
the government had no relevant historical data or experience with which it could
estimate the IMP-associated costs (id.). Regarding the FTEs estimated by each
offeror, the SSAC concluded that it was appropriate to compare the offerors to each
other. All of the offerors demonstrated an understanding of the requirements and were
proposing similar methods to meet the performance objectives of the WSBOS
Contract. (Id. at GOV1722633)

       In a memorandum dated January 14, 2014, the SSA, Steve Shapro, found that
“[t]he proposal submitted by CFSI represents the best value to the Government” (R4,
tab 2-46.5 at GOV475656, GOV475670). Regarding the IGE, the SSA’s January 14,
2014 memorandum states:

             During evaluation of initial proposals, it was noted that the
             IGE price was significantly higher than the price on most
             of the proposals. As a result, the Government team that
             developed the IGE was requested to validate it. The
             Government team verified the calculations, reviewed the
             estimates, and confirmed underlying assumptions of the
             IGE. The Government determined the IGE by calculating
             the efforts and resources required to perform each annex
             independently. The individual annex estimates were then
             aggregated to develop an overall IGE. The Government
             took minimal risks in developing the IGE, and did not
             attempt to
             incorporate resource-leveling across the annexes, which
             would involve the cross-utilization of personnel to perform
             multiple functions. Conversely, based on our observation
             of BOSC contractor practices on current and prior BOSCs
             at the four major Naval installations within our Area of
             Responsibility, contractor price likely included the cross-
             utilization of personnel based on business decisions that
             reflect tradeoffs between risks and costs. Since each
             offeror’s approach to the risk and cost tradeoff will differ
             in a competitive environment, the Government cannot
             assume one approach over another and so took the more
             conservative approach. This difference in the approach to
             pricing explains why there is such a difference between the
             IGE price developed by the Government, and actual
             offered prices. As a result of the Government’s

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             conservative methodology, the IGE is at the high end of
             the price spectrum. A review of the Price Report and
             SSAC reports indicate that the source selection team was
             cognizant of this information, and addressed it
             appropriately in their analysis of the proposals.

(Id. at GOV475658-59)

     Regarding CFSI’s non-price proposal, the SSA’s January 14, 2014
memorandum states:

             CFSI offered the second strongest technical proposal. For
             Factor 5, Safety, CFSI greatly exceeds solicitation
             requirements and was evaluated as Outstanding.

                    ***
             For Factor 1, Experience, Factor 2, Technical
             Approach/Methods, Factor 3, Management
             Approach/Capability of Key Personnel, and Factor 6,
             Small Business Utilization, CFSI exceeded solicitation
             requirements and was assigned a rating of Good.

(Id. at GOV475661)

        Regarding CFSI’s price proposal, the SSA’s January 14, 2014 memorandum
states: “CFSI offers the lowest price. CFSI offers a total of 311.18 FTEs for recurring
work, slightly higher than the mean of the five offers” (id. at GOV475667). The SSA
ranked the five Final Proposal Revisions from lowest to highest price:

 Contractor          Total Evaluated Price     Total FTEs for Recurring Work
 CFSI                          $329,451,129.64                         311.18
 FFS                           $330,703,955.16                         298.06
 ICHS                          $348,946,841.89                          284.4
 WSSG                          $364,007,190.94                         288.70
 ESC                           $378,361,168.07                         335.72
 Mean Total FTEs for Recurring Work                                    303.61
 Range of One Standard Deviation of Mean                        282.93-324.29

(Id. at GOV475667)

      The SSA’s January 14, 2014 memorandum states:

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             CFSI offers the best value proposal and is ranked first. The
             firm offers the lowest evaluated price and is ranked second
             technically. Overall, its technical rating is Good with an
             Outstanding safety record. CFSI proposes innovative
             methods to convey safety awareness to their workforce and
             demonstrated an exceptionally strong approach to the
             evaluation and determination of subcontractor safety. An
             evaluation of Past Performance demonstrates there is
             substantial confidence in the offeror’s ability to perform
             the contract. For the price offered, CFSI offers good value
             in terms of recurring direct and total FTEs.

(Id. at GOV475667-68) (emphasis in original)

        On March 21, 2014, the government awarded the WSBOS contract to Chugach
(R4, tab 3-1 at GOV18529). The PWS in the WSBOS Contract contains the same
requirements, performance objectives, and performance standards as the WSBOS
solicitation. Consistent with the WSBOS solicitation’s intent to incorporate the
contractor’s proposal “in whole or in part,” the WSBOS contract incorporates parts of
Chugach’s Final Proposal Revision. Specifically, the WSBOS contract defines as
Attachments the J.B-1, the J.C-1, and the J.F-1, but does not incorporate the J.M-5 or
J.M-1 from Chugach’s proposal (id. at GOV18586).

   V. THE POST-AWARD BID PROTEST

       On or about March 31, 2014, WSSG filed a post-award protest with GAO,
asserting that the award of the WSBOS contract to Chugach was improper because of
various alleged source selection defects (R4, tab 8-2 at GOV1708553_1-2). Among
other things, WSSG’s protest asserted that the government failed to perform a realism
analysis of the FTEs proposed by Chugach and the other offerors (id. at
GOV1708553_6).

        During the course of the post-award protest, and subject to a GAO protective
order, the government provided Chugach with documentation including the existence
and amount of the IGE (R4, tab 12-372.1 at MSJ Exhibit 08_88 and 08_0124). On or
about April 16, 2014, the government and Chugach jointly requested that GAO issue a
partial summary dismissal of the protest, arguing in part that the WSBOS Solicitation
does not require a price realism analysis (R4, tab 12-368.1 at MSJ Exhibit 37_1).

       On April 23, 2014, GAO partially dismissed WSSG’s protest, finding “no legal
or factual basis” for WSSG’s claim that NAVFAC “failed to perform a price realism
analysis in accordance with the RFP” and that “the terms of the RFP did not require a
price realism analysis” (R4, tab 12-370.1at MSJ Exhibit 6_1). On or about May 5,

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2014, the government filed its Agency Report in response to WSSG’s protest (R4,
tab 12-394.1 at MSJ Exhibit 42_1). Among other things, the Agency Report explained
that NAVFAC’s source selection decision was based on a comparison of the offerors
to each other rather than to the IGE “because it recognized that a collective statistical
model of the offerors’ FTE counts better reflected current market conditions and the
approaches employed by the offerors than the IGE did” (id. at MSJ Exhibit 42_9).
Accordingly, NAVFAC used the IGE for “assessing the upper limits of price
reasonableness” (id. at MSJ Exhibit 42_22). On or about May 19, 2014, Chugach
submitted to GAO its comments on the Agency Report and “endorse[d] without
exception the Navy’s position” (R4, tab 12-405.1 at MSJ Exhibit 38_1). On or about
May 15, 2014, WSSG submitted a supplemental protest (R4, tab 12-403.1 at MSJ
Exhibit 40_1). On July 9, 2014, GAO denied WSSG’s original and supplemental
protests (R4, tab 12-435.1 at MSJ Exhibit 33_1). In its decision denying the protests,
GAO stated, in part:

              The Navy reviewed the offerors’ technical approach
              proposals and found that “[w]hile offerors differed in their
              approaches or methods for meeting the RFP requirements .
              . . no firm provided an approach or method that was so
              unique that [it] would noticeably impact staffing due to
              increased or decreased efficiencies.” AR, Tab G-1, SSAC
              Report, at G7. As a result, the technical team concluded
              that it was appropriate to compare offerors’ proposed FTEs
              to each other with a standard deviation analysis. Id.
              ***
              On this record, we find that the agency reasonably
              evaluated [WSSG’s] technical approach.

(Id. at MSJ Exhibit 33_6-8)

   VI. CFSI PERFORMS THE WSBOS CONTRACT

       A. The Transition Period

       After CFSI was awarded the WSBOS contract, but before it began
performance, Chugach stood up a transition team led by Robert (Chris) Viramontes,
who was CGS’ Vice President of Base Operations Support Services (R4, tab 5-6 at 27;
R4, tab 6-22 at 2). As part of his transition team duties, Mr. Viramontes conducted a
review of the WSBOS Contract and Chugach’s proposal (R4, tab 5-6 at 34).
Mr. Viramontes tasked Kevin Hargis, CGS Operations Manager, to identify items that
Chugach failed to price into its bid and estimate the financial impact of failing to
include those items in its bid (R4, tab 6-133 at CFSI128617_1; R4, tab 6-28 at
CFSI132774_1-2; R4, tab 5-4 at 41-51, 57-58). As a result of his review, Mr. Hargis

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projected that Chugach would lose between $4.7 to $5.4 million dollars per year (R4,
tab 5-4 at 70-71). Mr. Hargis believed the impact of the bid misses coupled with the 3
percent learning curve reduction would result in Chugach paying the government to
work for the government (id. at 77; R4, tab 6-134 at CFSI132904_1).

       During his review, Mr. Viramontes also had discussions with Robert Haunton,
the operations manager for the incumbent contractor, EJB (R4, tab 5-5 at 27, 52-53).
Chugach had hired Mr. Haunton part-time to assist with the transition and would
subsequently hire Mr. Haunton full-time in a management role (id. at 34, 52-53).
Mr. Haunton directed Mr. Viramontes to areas of the WSBOS contract’s performance
work statement that Mr. Haunton believed Chugach failed to adequately address in its
proposal pricing (id. at 53-55; 65-66). Mr. Haunton also stressed the “significant
planning” Chugach was going to need to manage the conversion to an RCM-based
maintenance program, emphasizing that, “[i]n order for us to be ready to support RCM
on 01 October ’14 we have to have a concrete plan on what we’re going to keep from
the old PM-centric plan and what we going to run-to-fail or engage in Total Predictive
Maintenance strategies” (R4, tab 6-89 at CFSI240939_1). Mr. Viramontes concluded
that CFSI had failed to price certain aspects of the WSBOS contract and
underestimated by approximately 80-90 FTEs the staffing level Chugach needed to
perform the contract requirements (R4, tab 5-6 at 34, 122-25). In an email exchange
regarding the cost model associated with another Chugach contract in August 2014,
Mr. Viramontes wrote: “We both know [Business Development] just arbitrarily cut
position to come up with their winning price. I’m seeing the same here at West Sound”
(R4, tab 6-63 at CFSI298501_1).

        As a result of Mr. Viramontes’ review of Chugach’s proposal, he increased
staffing from the 220 FTEs that Chugach bid for self-performed recurring work, to
307 FTEs, because he “didn’t perceive having enough staff to start the job at 220. So
[he] took it to 307 just to get [Chugach] up and running.” Mr. Viramontes attributed
this staffing shortfall in part to the option year modifier and in part due to various bid
misses. (R4, tab 5-7 at 64-66) Mr. Viramontes testified that the decision to increase
staffing from 220 to 307 was a decision made by Chugach and was not due to any
direction from the government (id. at 66-67). In addition to the hiring of Mr. Haunton
discussed above, during the transition period and early stages of performance,
Chugach hired many of EJB’s productive work force as well as management and
supervisory staff. Chugach also purchased EJB’s vehicle fleet, Maximo data,
operating procedures, and work plans. (R4, tab 12-458.1 at CFSI251320_1; R4, tab 5-
2 at 23; R4, tab 5-5 at 107-08; R4, tab 5-4 at 73-74, 105)

       The transition team saved money by using EJB’s Maximo data and work plans
to populate its own work plans, rather than having to develop their own work plans for
things like preventive maintenance (see R4, tab 12-451.1 at CFSI18311_3; R4, tab 5-5
at 107-08).

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   B. CFSI Performance of the Contract

       Chugach began full performance of the WSBOS Contract on October 1, 2014
(R4, tab 5-2 at 43; R4, tab 5-6 at 132-33). As of the start of performance, Chugach
was staffing approximately 305 employees to perform the Recurring work (app. supp.
R4, tab 1660 at CSUP66042). After correcting for work that Chugach bid as
subcontractor-performed work, but ultimately self-performed, this staff of 305 is an
increase of approximately 80 FTEs above what Chugach proposed (R4, tab 12-338.1,
Sheet: FFP Summary at Cell AG91 (indicating 214.79 FTEs excluding
subcontractors); R4, tab 12-498.1 at CFSI299179_1; R4, tab 10-1 ¶ 106 (CFSI
ultimately self-performed Annex 18, which was bid as 11 subcontractor FTEs); R4,
tab 2-39.7 at GOV212643_13).

        At the time of award, Chugach did not have Nelson Engineering under
subcontract to write and produce the IMP, even though Chugach’s proposal stated
“Nelson Engineering will develop our contract-specific IMP . . . .” (R4, tab 6-87
at B365; R4, tab 6-72 at CFSI115665_1; R4, tab 5-7 at 62-63; R4, tab 6-96
at CFSI181742_2). In November 2015, after Chugach realized Nelson Engineering
was not actually under contract to develop the IMP, Mr. Hargis informed Mr. Haunton
that Chugach was reaching out to Nelson “with an official SOW and RFP for all IMP’s
called out in [Chugach’s] contract” (R4, tab 6-96 at CFSI181742_1; R4, tab 12-726.1
at CFSI16366_6 (admitting that “the development of the IMP’s at WSBOSC is an
additional service above and beyond” Nelson Engineering’s existing contract.)). In
response to Mr. Hargis’ email, Mr. Haunton wrote: “All of this just sucks. I’m sure
Scott is saying; ‘when will the blood-letting ever end at West Sound.’ Believe me
when I say that we’re working very hard to find ways to not continue this money bath,
but it’s very hard as [Business Development] screwed this up so bad” (R4, tab 6-96
at CFSI181742_1).

        In January 2016, Chugach discovered that not only was Nelson Engineering not
under contract to develop the IMP, there was a dispute between Chugach and Nelson
Engineering as to the full scope of Nelson’s RCM-related work. Nelson asserted that
its contract with Chugach only included RCM analysis, not RCM “implementation”
which included not only the revision of “existing PM Job Plans and creat[ing] new PM
Job Plans to implement the RCM maintenance program recommendations . . . .” but
also “PT&I (predictive testing and inspection), RCM training, facility condition
assessments, and capital asset planning” (R4, tab 12-726.1 at CFSI16366_1, 5). In a
PowerPoint presentation dated January 27, 2016, Chugach described the dispute
pertaining to Nelson Engineering’s scope of work as it related to the “updating and/or
creating of PM plans” and “IMP plan development” as “costly” to the tune of
“$1.327M additional (unbudgeted) cost to West Sound” (R4, tab 12-728.2
at CFSI24364_1-2, 9).

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       In addition to not having Nelson Engineering under contract to write and
produce the IMP, Chugach failed to include approximately $100,000 worth of costs
associated with Nelson performing the RCM analysis in its bid (R4, tab 6-96 at
CFSI181742_3). As of March 7, 2016, 17 months into Chugach’s performance (the
middle of the second claim year), not one IMP had been completed or implemented
(R4, tab 6-161 at CFSI301675_1). Chugach admits that it had not implemented an
Integrated Maintenance Program as of the end of FY16 or 30 September 2016 (R4,
tab 7-37 at 9-10). Because it had not yet implemented any IMP or RCM efficiencies,
Chugach was following work plans and procedures it had purchased from EJB, the
incumbent contractor (R4, tab 6-81 at CFSI23535_20; R4, tab 5-4 at 105; R4, tab 5-2
at 179-80). Chugach continued to follow EJB’s work plans for at least approximately
two years (R4, tab 6-81 at CFSI23535_20; R4, tab 5-4 at 99-100, 105-08) and
continued performing time-based preventative maintenance which is “very labor
intensive” (R4, tab 5-7 at 89-90; R4, tab 6-73 at CFSI115660_1; R4, tab 6-112
at CFSI239913_12 (CFSI presentation to NAVFAC on or about May 16, 2016 stating
that “[u]ntil IMP components are submitted and approved, CFSI has no choice but to
accomplish all PMs based on the old, inefficient maintenance plans inherited from
predecessor” resulting in CFSI being “unable to gain the intended efficiencies of
RCM/IMP until halfway through the contract’s PoP . . . .”)).

        Chugach experienced difficulties meeting the performance requirements of the
WSBOS contract (R4, tab 6-90 at CFSI184604_1; R4, tab 5-4 at 81; R4, tab 5-9 at 89).
Approximately five months after performance began, Mr. Hargis, in consultation with
Mr. Haunton, recommended the hiring of approximately 60 more FTEs to improve
Chugach’s performance (R4, tab 6-90 at CFSI184604_2; R4, tab 5-4 at 81-87). By
email dated May 15, 2015, Mr. Haunton noted the hours used by Chugach’s bid
proposal team to calculate the number of FTEs required to perform the workload
captured in the WBS “was based on 1,880 hours or a full productive year” (R4, tab 6-
92 at 211991_1). Mr. Haunton believed using 1,880 productive hours per year “is not
realistic when calculating actual FTE numbers, whereas an industry standard of
between 1,400-1,500 hours would be expected based on myriad categories of non-
productive time that impact the [operations area of responsibility] of the West Sound”
(id., R4, tab 12-612.1 at CFSI183001_1).

       In May 2015, CFSI internally discussed that increasing staffing on WSBOS in
order to improve “on time performance,” even to the point of operating at a loss,
would still be beneficial and profitable to the company in the longer term: “Those
highly rated CPAR ratings and the positive reputation that would come from
successfully operating the WSBOSC (even at a loss), could lead Chugach to a strong
future on future Navy BOS contracts” (R4, tab 12-577.1 at CFSI28518_30). By
sometime in 2016, Chugach, in an effort to meet the performance standards under the
WSBOS contract, increased its recurring work staffing to approximately 425 FTEs

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(exclusive of subcontractors) (R4, tab 5-5 at 56). The government did not direct
Chugach to increase its staffing (id. at 77-78; R4, tab 5-2 at 76-82; R4, tab 5-4 at 83-
84, 171-72, 235).

   C. March 2016 “Huntsville” Investigation

       In March 2016, as part of Chugach’s effort to investigate its difficulties in
performing the WSBOS Contract, Daniel Fenza, the President of Chugach, hired
Mr. Viramontes, who was no longer a Chugach employee, as a consultant to assist
Chugach with the investigation, to include determining what areas of the contract, if
any, were underbid by Chugach (R4, tab 6-41 at CFSI24264_1; R4, tab 6-42 at
CFSI25872_1, CFSI25874_1-13; R4, tab 5-6 at 13-14, 147-49; 161-64; R4, tab 5-2
at 137-39).

        Among other things, Mr. Fenza and Mr. Viramontes discovered that the labor
hours assumed in Chugach’s proposal for the WSBOS Contract had been reduced by
approximately 258,000 hours prior to submission of the proposal (R4, tab 6-83
at CFSI115655_2-3). The 258,000-labor hour reduction identified by Mr. Viramontes
and Mr. Fenza approximates the overall 39% reduction attributable to the option year
modifier (R4, tab 6-1 at Cells S7 and T7 (Option Year Modifier reduced the total
recurring work Labor Hours from 682,501.91 to 414,101.18); tab 10-1 ¶ 54). In an
email dated March 7, 2016 from Mr. Fenza to Mr. Viramontes, Mr. Fenza states that
the 258,000 hours of reductions that took place in the WBS “[are] unaccounted for”
and Mr. Viramontes responds that “[g]iven the lack of knowing the basis for reducing
the hours this drastically I’m led to believe the cuts were simply arbitrary as a means
to get lean and competitive” (R4, tab 6-73 at CFSI115660_1). In furtherance of the
investigation, Mr. Fenza, Mr. Viramontes, Mr. Hargis, and Mr. Williamson gathered in
Huntsville, Alabama to discuss Chugach’s financial losses on the WSBOS contract
(R4, tab 5-9 at 162-64). Mr. Williamson testified at his deposition that the Huntsville
group did not determine the reason for the 40% reduction to Chugach’s labor hour
assumptions. He further testified that the speculation of the group was that the
reduction was made to make Chugach’s bid price more competitive (R4, tab 5-9
at 197, 202).

       While in Huntsville, the team assembled by Mr. Fenza compared the IGE FTE
and labor hour estimates with Chugach’s unmodified FTE and labor hour estimates.
The team concluded that the difference between the IGE labor hour estimate and
Chugach unmodified labor hour estimate was only 26,872 hours (or approximately 13
FTEs at 2,080 hours per year) (R4, tab 6-139 at VIRA34_1; R4, tab 5-4 at 205-06).

       Mr. Viramontes testified that the Huntsville team concluded that the historical
data provided in the solicitation for number of trouble calls was not out of tolerance
with the number of trouble calls that Chugach received while performing the WSBOS

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    to an ASBCA Protective Order. This version has been approved for public release.
contract (R4, tab 5-7 at 38; 72; R4, tab 6-67 at 1). While the number of trouble calls
experienced by Chugach was not out of tolerance with the historical data provided in
the solicitation, Chugach experienced a difference between the hours it estimated for
trouble calls and the hours it actually incurred for trouble calls (R4, tab 6-64 at 3-4;
R4, tab 5-7 at 37-39). Mr. Viramontes testified that during the Huntsville review, the
team noticed that indirect costs for Annexes 15 and 17 seemed “extremely high,”
which points to an issue with coding, resulting in costs not being charged “to the right
category of costs” (R4, tab 5-7 at 81-83).

   D. The July 2016 “Tiger Team” and Related Investigations

        In July and August 2016, Chugach assembled a “Tiger Team” to further
evaluate the causes of its financial losses and performance issues (R4, tab 6-79
at CFSI10224_2; R4, tab 12-1072.1 at CFSI117037_1-2; R4, tab 4-1
at CFSI21902_33). The Tiger Team consisted of “expert and experienced base
operations business capture and operations professionals” who “devote[d] significant
effort over a two-month period to analyze all aspects of the problem” (R4, tab 4-1
at CFSI21902_33). A “core element” of the Tiger Team’s mission was to “research
why so many more hours were recorded than expected” (id.). The Tiger Team’s
efforts resulted in over 200 discrete findings (R4, tab 6-142 at CFSI158857_1, 1-17).

        On July 26, 2016, Steve Hammock, who had served as a member of the Tiger
Team, wrote in an email to James Williamson that one of the biggest issues with
regard to WBS reductions was “really part of the overall cost strategy to incorporate
more modern RCM-based PM program so not necessarily a ‘miss’” (R4, tab 12-1195.1
at CFSI110695_1). On or about August 4, 2016, less than one month before Chugach
submitted its certified claim, Mr. Hammock wrote, among other things, that Chugach
“lack[ed] an apparent financial control process that establishes budget levels for shops
or activities, incorporates control measures, and quickly identifies and corrects
budgetary overruns” (R4, tab 6-128 at CFSI110674_1, CFSI110675_1). He also wrote
that Chugach “ha[d] not implemented a modern, engineering-based PM program that
eliminates legacy maintenance practices and optimizes maintenance actions.” He
continued, “[i]n my opinion, the most impactful actions are to implement a completely
revamped modernized maintenance program.” (Id. at CFSI110675_1)

       On August 12, 2016, James Williamson, another member of the Tiger Team,
provided a summary of his individual conclusions to Daniel Fenza and Kevin Hargis,
noting that there were “three major issues affecting financial performance at West
Sound:” “Flaws in bid strategy,” “Government administration of the contract
unfavorable to Chugach,” and “Poor management controls” (R4, tab 12-1447.1
at CFSI118789_1; R4, tab 12-1447.2 at CFSI118790_1). Mr. Williamson identified
several flaws in Chugach’s bid strategy, including Chugach’s decision to
underestimate trouble call hours. He noted that the three-year average of trouble call

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    to an ASBCA Protective Order. This version has been approved for public release.
hours in the RFP was 77,887 hours per year, but that Chugach’s proposal was based on
52,769 hours per year. (R4, tab 12-1447.2 at CFSI118790_1) Mr. Williamson wrote
that, in his view, poor management controls “is the area that could have the largest
impact on financial performance” (id. at CFSI118790_3). Among the issues he noted
were a “[l]ack of budgets and budget review” and “[i]mproper coding” (id.).
Mr. Williamson concluded his summary by writing, in part:

              At the heart of the issues that afflict the West Sound
              project is a lack of coordination between business
              functions at Chugach. Business Development did not
              adequately involve Operations in the development of the
              bid and Operations did not adequately involve Business
              Development in the startup. This resulted in executing a
              plan that was very different from the bid plan. While there
              were legitimate concerns about the bid strategy this could
              have easily been alleviated before the bid by adequate
              review and input from operations. Even after the bid much
              of the financial woes could have been mitigated by a
              cooperative relationship with business development in
              executing the project in a manner consistent with the bid
              strategy. Unfortunately neither of these occurred and the
              financial damage has been virtually unmitigated for nearly
              two years.

(Id. at CFSI118790_4)

        On or about June 26, 2017, Daniel Fenza, CFSI’s President, memorialized in
writing his “Lessons Learned from West Sound BOSC” (R4, tab 12-1985.2
at CFSI116818_1). While not directly tied to the Tiger Team’s effort, Mr. Fenza’s
“lessons learned” drew from the Tiger Team’s effort as well as “a variety of research
efforts and analyses conducted after the contract’s start date of October 2014” (id.).
Mr. Fenza noted several lessons learned, including that:

               CFSI had failed to heed the “danger signs” in the RFP
              regarding differences between the incumbent contract and
              the WSBOS Contract.
               Regarding CFSI’s use of the incumbent contractor’s job
              plans, CFSI “failed to realize that as a performance based
              contract, corrective actions were within our control and
              should have been addressed during the contract start-up
              phase.”

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              “Ops failed to realize that NAVFAC wanted a change
             agent on this contract who would convert the PM program
             from OEM based to RCM based.”
              “The initial cost coding structure established on this
             contract failed to allocate costs in a manner that would
             serve as an effective management tool or to allow for
             effective forensic accounting of job losses after the fact.”

(Id. at CFSI116818_1-2) However, Mr. Fenza testified that the Tiger Team’s findings
could not explain the differences in labor hours being experienced by Chugach, and
that the inefficiencies identified were “minimal” (R4, tab 5-5 at 183).

        Beginning in October 2016, after the Tiger Team concluded its investigation
and provided its findings and recommendations, Chugach began to reduce staffing,
initially by 86 FTEs and then further with subsequent reductions in force (R4, tab 6-
142 at CFSI158857_1; R4, tab 6-143 at 3; R4, tab 5-4 at 267-70). Eventually,
Chugach reduced its staffing to 280 FTEs (R4, tab 6-108 at 6).

   E. NAVFAC Withholds Payment

       The WSBOS Contract contained two clauses, 5252.246-9303,
CONSEQUENCES OF CONTRACTOR’S FAILURE TO PERFORM REQUIRED
SERVICES (OCT 2004) and 5252.246-9304, ESTIMATING THE PRICE OF
NONPERFORMED OR UNSATISFACTORY WORK (OCT 2004), which authorized
the government to withhold payment for non-performed or unsatisfactory work (R4,
tab 3-1 at GOV18541-42). Clause 5252.246-9303, CONSEQUENCES OF
CONTRACTOR’S FAILURE TO PERFORM REQUIRED SERVICES stated in part:

             The Contractor shall perform all of the contract
             requirements. The Government will inspect and assess
             Contractor performance in accordance with FAR 52.246-4,
             INSPECTION OF SERVICES – FIXED PRICE and the
             Section E provision entitled GOVERNMENT
             PERFORMANCE ASSESSMENT. The Government will
             require re-performance, withhold payment, or seek other
             suitable consideration for unsatisfactory or non-performed
             work. When defects can’t be corrected by re-performance,
             the Government may reduce the price to reflect the reduced
             value of services performed.

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(Id. at GOV18541) Clause 5252.246-9304, ESTIMATING THE PRICE OF
NONPERFORMED OR UNSATISFACTORY WORK stated in relevant part:

             In the event the price of non-performed or unsatisfactory
             work cannot be determined from the prices set out in the
             Schedule or on the basis of the actual cost to the
             Government, estimating methods may be used to
             determine an amount, which reflects the reduced value of
             services performed. The Government may estimate the
             cost using wage rates and fringe benefits included in the
             wage determinations included in the contract, Government
             estimates of the Contractor’s overhead and profit rates, and
             Government estimates of material costs if applicable.

(Id. at GOV18542)

      On or about June 23, 2015, NAVFAC finalized a Contractor Performance
Assessment Report (CPAR) for Chugach’s performance from October 1, 2014-
March 31, 2015 (R4, tab 11-2 at GOV1723310_1). The CPAR assigned Chugach a
“marginal rating for Schedule (id.).

        On November 14, 2015, Jim Niles, Administrative Contracting Officer, sent a
letter to Joan Mulholland, ACQ Director, Chugach Government Solutions, stating, in
part:

             This letter serves as written notice that the Government
             intends to deduct a portion of the Firm Fixed Price (FFP)
             invoice payment under the WSBOSC. This is to
             compensate the Government for non-performed
             Preventative Maintenance (PM) work in Annex 1502000,
             1602000, 1604000, 1607000, and not completed cross
             connect inspections, annual utility inventories, and unfilled
             key personnel identified in the basic contract. In addition,
             the Government will begin 10% temporary monthly
             withholdings due to continued nonconformance of the
             contract.

(R4, tab 12-632.3 at GOV421048_1)

        On November 30, 2015, Thomas Heck, Chugach’s project manager, responded
to the government’s November 14, 2015 withholding letter. Mr. Heck wrote that
“CFSI recognizes and acknowledges the FFP performance shortfalls indicated under
[the November 14, 2015 letter]. CFSI concurs with the proposed deducts with the

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   to an ASBCA Protective Order. This version has been approved for public release.
exception of the following: [] Staffing Deduction for Key Personnel [and] Annual
Utility Equipment Inventory” (R4, tab 12-637.1 at GOV54778_1). Mr. Heck proposed
that the amount of the deduct should be $311,733.47. He also wrote:

             As discussed in weekly partnering meetings with the
             Government, CFSI continues to apply resources to remedy
             the performance trends that resulted in these deductions.
             As also discussed, we are having difficulties recruiting and
             hiring High Voltage, Low Voltage, and HVAC/R
             technicians as we are just not getting applicants. Further,
             since May 2014, CFSI has expanded staff from 307 to 380
             personnel. Accordingly, CFSI will continue to support the
             Government in a quality manner.

(Id. at GOV54778_3)

      On or about January 7, 2016, the government finalized a CPAR for Chugach’s
performance from April 1, 2015-September 30, 2015, again assigning Chugach a
marginal rating for Schedule (app. supp. R4, tab 1428 at CSUP49927-28, 31). In its
response to the CPAR, CFSI stated in relevant part:

             Although unfilled key positions were contract
             requirements, other members of the Management Team
             stepped up to cover those Areas of Responsibilities
             (AORs). CFSI does not believe, in it’s entirety [sic], that
             untimely work completion and lower quality deliverables
             were a result of these vacancies, the real issue in our view
             is our inability to find qualified applicants for our critical
             hourly positions.

(Id. at CSUP49930-31)

        On November 14, 2015, the government notified Chugach that it intended to
withhold a portion of the firm-fixed-price invoice due to non-performed work (R4,
tab 12-632.1 at GOV421046_1). In a response dated November 30, 2015, Chugach
generally agreed with the specific deduction amounts (R4, tab 12-641.2
at GOV389012_1-3). On February 2, 2016, the government issued unilateral contract
modification no. A00003 formalizing a deduction of $439,353 for additional
nonperformance of FY15 work (R4, tab 3-26 at GOV18659-60). The government
prepared and Chugach commented on a CPAR for Chugach’s performance from
February 1, 2016-September 30, 2016 (R4, tab 11-6 at GOV1723325_1). The CPAR
assigned an unsatisfactory rating to Chugach for schedule and also for management
(id. at GOV1723325_2). With respect to Chugach’s performance during the review

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period, the CPAR (February 1, 2016-September 30, 2016) stated: “CFSI failed to
meet contract specified completion timeframes for Service Trouble Calls, Bullets
(small scope repair/renovation projects), and their scheduled dates for Preventative
Maintenance (PM) of equipment in the BUMED Facility Investment (1502010),
Facility Investment (1502000), and Utilities (1600000) Annexes.” “CFSI failed to
submit 35% of the deliverable reports per Section F of the contract.” “Vacant Key
Positions this performance period included; Utility Manager vacant since
October 2014 was filled February 2016. Utility Supervisor vacant since
February 2015 was filled September 2016.” (Id. at GOV1723325_2-3) NAVFAC
reduced its FY16 withholdings for unsatisfactory (late) and nonperformed FY16 work
from 10% to 5%: “In June [2016] the amount of late work decreased. As a result the
Administrative Contracting Officer (ACO) released 40% of prior withholdings and
decreased monthly withholding to 5% from 10% on CFSl’s monthly invoices. The
ACO continued withholding 5% due to the remaining incomplete work” (id.
at GOV1723325_3).

        Chugach admitted it was not fully performing the FY16 recurring work (gov’t
ex. 8 at CFSI161578_1). Mr. Hargis, in responding to a CPAR for period of
October 2015 through January 2016, indicates, “CFSI recognizes the impact that late
work has on the overall mission readiness of WSBOSC customers and has
implemented strategies to improve our ‘On Time Performance’ metrics’” (R4, tab 11-4
at GOV1723317_4). During the entirety of FY16, NAVFAC withheld 5% of the
recurring invoice amounts based upon the government’s determination that Chugach
had not performed or not performed satisfactorily certain FY16 work (R4, tab 11-6
at GOV1723325_3; R4, tab 12-2100.2 at CFSI292068_1). The 5% withheld was
NAVFAC’s estimate of the value of the non-performed and unsatisfactory work in
FY16 (gov’t ex. 1 ⁋ 20). As the government began withholding 5% in June 2016, it
made the determination before FY2016 performance was complete.

   VII. CFSI’S CERTIFIED CLAIM

       On May 27, 2016, representatives of the government and Chugach met to
discuss Chugach’s assertions that it had omitted costs in its bid, some elements of
which it believed NAVFAC should have known during proposal evaluations, and that
some terms of the contract as interpreted post award were causing CFSI to expend
more costs in materials and labor than were included in its price proposal (app. supp.
R4, tab 1446 at CSUP50017). Chugach requested that NAVFAC consider an
adjustment to the contract price (id.). By letter dated June 7, 2016, Audrey Fitzgerald,
Contracting Officer, responded to Chugach’s informal request for a contract price
adjustment indicating that NAVFAC did not find any evidence that the Government
should have known of any bid mistakes prior to award (id.). She closed the letter by
stating: “[t]he Government provided in the RFP a list of historical service calls to help
offerors estimate the effort and scope of trouble calls that it may receive each year and

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to use that data to build its proposal. Should Chugach discover that there is
significantly greater effort to perform trouble calls under its contract than the historical
data would indicate, the Government would give proper consideration to a request for
equitable adjustment to the price of the contract” (id. at CSUP50020).

        Rather than submit a request for equitable adjustment, on September 2, 2016,
Chugach submitted a certified claim for $12,174,903.61, representing losses it
allegedly incurred in FY15 as a result of either NAVFAC’s alleged failure to disclose
“vastly superior knowledge needed to project the level of effort and cost required to
perform” or the parties’ mutual mistake that the WSBOS Contract could “be
performed by a workforce of a similar size [as EJB]” (R4, tab 4-1 at CFSI21902_4-5,
45). Chugach developed its claim using its integrated accounting system, known as
Lawson, to allocate its management and administration costs across the other annexes
(app. supp. R4, tab 1657 at CSUP65931-61; R4, tab 7-11 at 3-4) and then calculating
the difference between its proposed and incurred costs, and then backing-out its
acknowledged bidding mistakes (R4, tab 12-1516.1 [native], app. ex. 12 at 4-5).
Chugach asserted in its claim that its losses stemmed solely from these preaward acts
or omissions:

              CFSI has several credible and compelling legal theories to
              establish that it is entitled to an adjustment in the Contract
              price, and they are all derived from the way that the Navy
              negotiated the WSBOSC. But simply put, the parties did
              not achieve a valid meeting of the minds during contract
              formation.

(R4, tab 4-1 at CFSI21902_6)

        On February 6, 2017, CFSI revised its claim to include FY16 costs of
$22,205,406.60 and withholdings of $1,663,634.80 for nonperformance of FY16 work
(R4, tab 4-43 at GOV29286). With this revision, Chugach’s total claim amount
increased to $36,043,945.01 (see id.). On July 28, 2017, Eileen Mitchell, Chief of the
Contracting Office, issued a Contracting Officer’s Final Decision denying Chugach’s
certified claim, as revised, in its entirety (R4, tab 4-44 at GOV29306).

        Contracting Officer’s Representative, Keith Sandoval, performed an analysis of
Chugach’s claim. Mr. Sandoval noted that Chugach reported an increase in trouble
calls and hours spent on those calls, as compared to the number of calls and hours
reported by EJB (App. supp. R4, tab 1523.01 at CSUP64641; app. ex. 4 at 198-99) In
a December 21, 2017 email, Mr. Sandoval shared his analysis of trouble calls with
other Navy employees (app. supp. R4, tab 1557 at CSUP65565). Chugach cites to this
email for the proposition that Mr. Sandoval “believed that there were ‘grounds for an
REA’” (app. proposed finding of fact ¶ 344 (quoting app. supp. R4, tab 1557

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    to an ASBCA Protective Order. This version has been approved for public release.
at CSUP65565)). However, Mr. Sandoval’s comments, read in their entirety were
obviously sarcastic:

              This is not true. Trouble call details, including labor hours,
              were identified in attachment J-150200-06. FY09-FY11
              historic average was 77,887 hours for trouble calls,
              including equipment repairs not under ICMR. CFSI final
              proposal was 71,456 hours, not including ICMR (no
              breakout in the proposal). Show me how significantly
              greater the effort to perform trouble calls was than
              historical average, CFSI. Oh, wait, CFSI, do you want me
              to do that for you? OK, that was 101,364 hours in FYl5
              and 102,103 hours in FY16. Thank you for the trouble call
              report. Seems like grounds for an REA to me! You’re
              welcome, CFSI.

(App. supp. R4, tab 1557 at CSUP65565) However, Chugach cites to Mr. Sandoval’s
deposition testimony that the increase in trouble calls from the historical average
would form the basis of a claim, but that he could not provide a conclusion because
Chugach had not provided supporting documentation as support for its claim (app.
ex. 4 at 199-200). Mr. Sandoval testified that Chugach had proposed less trouble calls
than the historical average but actually performed more trouble calls than the historical
average. Mr. Sandoval noted the change to unlimited service calls, and indicated that
Chugach “should take into consideration [that the solicitation included unlimited
service calls] and price it – price and risk it accordingly or propose with some risk
accordingly.” (Id. at 199) Although Mr. Sandoval believed that Chugach should have
proposed at least the number of service calls as the historical average, he also was of
the opinion that the level of service calls was high enough to provide the basis for a
claim (id. at 200). In response, the government submitted an affidavit by
Mr. Sandoval controverting Chugach’s proposed factual finding and stating that
Mr. Sandoval’s determination was that Chugach “did not provide enough information
for its claims to be analyzed, and that he was “unable to draw any substantive
conclusions from the comparison” without additional supporting documentation (gov’t
ex. 1 ¶¶ 22-23).

   VIII. Chugach Appeals To The Board

       A. Chugach’s Complaint

      On September 11, 2017, Chugach filed a timely notice of appeal with the
Board. On or about October 5, 2017, Chugach filed its complaint in ASBCA
No. 61320. In addition to repeating the certified claim’s allegations of superior
knowledge (Count II) and mutual mistake (Count III), the Complaint alleged that the

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government negligently negotiated (Count I) and constructively changed (Count IV)
the WSBOS contract, breached the covenant of good faith and fair dealing (Count V),
and improperly withheld payments from CFSI (Count VI).

       B. Discovery Disputes Regarding Historical Information

       Following a discovery dispute, the Navy filed a motion to compel Chugach to
respond to the government’s Interrogatory No. 11 (Order dtd. Apr. 1, 2019, at 2). The
interrogatory provided:

              For each MAXIMO data field identified in CFSI’s
              Supplemental Response to Interrogatory No. 2 as
              “containing information that CFSI contends constitutes
              superior knowledge”, state for which specific contract
              annex and SLIN the information in the data field is vital
              knowledge of a fact affecting CFSI’s
              estimated/proposed/bid cost or duration of performance,
              and describe how, why, and the extent to which CFSI’s bid
              pricing for that annex and SLIN would have been different
              had CFSI possessed the information contained in the data
              field.”

(R4, tab 7-17 at 3) On April 1, 2019, the Board entered an order stating, in part:

              As the MAXIMO database apparently contains between 1
              and 2 million records, the Navy is entitled to identification
              of the specific records Chugach contends to be relevant.
              To the extent Chugach’s claim depends upon the database
              in general and is not limited to specific data records, it
              should supplement its response to indicate this.

(Order dtd. Apr. 1, 2019, at 3)

      On May 1, 2019, CFSI provided a supplemental response to Interrogatory
No. 11, stating, in relevant part:

              In light of the Board’s April 1, 2019 order, we now
              interpret Interrogatory No. 11 as seeking an “identification
              of the specific records Chugach contends to be relevant” to
              its superior knowledge claim. CFSI contends that the
              database as a whole is relevant. The database provided the
              Navy with superior knowledge not necessarily because of
              the contents of any one row, but because it gave the Navy

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              the ability to query the aggregate of records, using the data
              fields identified in Response to Interrogatory No. 2, to
              identify historical metrics and trends that were relevant to
              estimating the level of effort. As the individual responsible
              for developing the IGE explained, “actual data” is
              preferable and “the bigger the database the better the data.”
              Williams Deposition Tr. 170:16-171:4.

(Gov’t ex. 9 at 6)

       In response to Chugach’s Supplemental Response to Navy Interrogatory
Nos. 10 and 11, the Navy filed a supplemental motion to compel Chugach to comply
with Board’s Apr. 1, 2019 Order and respond to Interrogatory No. 11 (Order dtd.
May 24, 2019 at 1). On May 24, 2019, the Board denied the Navy’s Supplemental
Motion to Compel. The Board also, however, clarified that Chugach is bound by its
discovery response that it is not relying on specific individual records to support its
claims in this appeal:

              Chugach is bound by its discovery responses, and we
              interpret its response to interrogatory No. 11 as providing
              that the entire MAXIMO database is relevant and that it is
              not relying upon specific individual records.
              […]
              Depending on the evidence adduced at a hearing,
              Chugach’s demonstration that the Navy had access to the
              MAXIMO database and an “ability to query the aggregate
              of records” may not be sufficient to establish that there was
              a “conscious omission to share superior knowledge [the
              Navy] possesses.” Thus, without deciding here whether
              Chugach’s reliance upon its theory that the Navy’s access
              to the MAXIMO database as a whole is adequate to
              establish its superior knowledge claim, if Chugach fails to
              identify with specificity the superior knowledge contained
              therein, it will bear whatever consequences that its decision
              entails. With this in mind, we find that Chugach has
              complied with the Board’s April 1, 2019 order and deny
              the government’s motion to compel.

(Order dtd. May 24, 2019, at 2-3)

       In addition to written discovery, the Navy attempted to obtain testimony
regarding what specific information Chugach believed should have been disclosed by
NAVFAC. Mr. Hammock, as Chugach’s corporate designee, testified that it wasn’t

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“able to conduct a complete analysis of the history of maintenance activities” such that
it prepared its bid “without the understanding of the actual condition or the history of
what had been done to that plant [facility]” (R4, tab 5-10 at 133-34, 136 (testifying
that CFSI was lacking knowledge of “the condition of the facilities and the historical
maintenance”)). Mr. Crosta, the lead cost estimator on the proposal team did not
identify any specific information that he believed NAVFAC should have disclosed
prior to award (R4, tab 5-1 at 94-95, 98). Similarly, Mr. Watts, who had primary
responsibility for estimating Chugach’s staffing requirements did not identify any
specific information that he believed NAVFAC should have disclosed prior to award
(R4, tab 5-8 at 140-42).

       C. Dispositive Motions

        On July 16, 2018, the Board granted the Navy’s opposed motion to amend its
answer to plead the affirmative defenses of estoppel and waiver. Chugach Federal
Sols., Inc., ASBCA No. 61320, 18-1 BCA ¶ 37,111 at 180,620 (Chugach I). On
April 10, 2019, the Board denied the Navy’s motion for partial summary judgment and
granted Chugach’s cross-motion for summary judgment, the latter of which resulted in
dismissal of the Navy’s affirmative defenses of estoppel and waiver. Chugach
Federal Sols., Inc., ASBCA No. 61320, 19-1 BCA ¶ 37,314 at 181,496 (Chugach II).
On May 16, 2019, the Board denied the Navy’s motion to dismiss Counts I, III, IV, V,
and VI. Chugach Federal Sols., Inc., ASBCA No. 61320, 19-1 BCA ¶ 37,380
at 181,720 (Chugach III). On May 27, 2020, the Board granted the Navy’s motion for
summary judgment as to Count V, and denied the Navy’s motion for summary
judgment as to Counts I, II, III, IV, and VI. Chugach Federal Sols., Inc., ASBCA
No. 61320, 20-1 BCA ¶ 37,617 at 182,597 (Chugach IV).

                                       DECISION

       By request of the parties, this appeal is being decided pursuant to Board
Rule 11, “Submission Without a Hearing.” Unlike a motion for summary judgment,
which must be adjudicated on the basis of a set of undisputed facts, pursuant to Board
Rule 11, the Board “may make findings of fact on disputed facts.” DG21, LLC,
ASBCA No. 57980, 15-1 BCA ¶ 36,016 at 175,909 n.1; aff’d DG21, LLC v. Mabus,
819 F.3d 1358 (Fed. Cir. 2016); Grumman Aerospace Corp., ASBCA No. 31585,
92- 3 BCA ¶ 25,059 at 124,886 n.13 (Kienlen, J. dissenting).

   I. Superior Knowledge

       We begin with Chugach’s superior knowledge claim. Chugach argues that the
government should not be allowed to “withhold vital information and negotiate for low
staffing levels to reap the benefit of lower prices, just to turn around and insist on far
higher staffing levels at the contractor’s expense during performance” (app. br. at 1).

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Chugach contends that the government failed to disclose three categories of superior
knowledge: historical workload data reflecting the costs required to perform the
predecessor contract; past practices whereby the government suppressed demand for
work under the predecessor contract; and, the technical team’s finding that Chugach
did not propose enough personnel to meet the contractual demands (id. at 142). The
government asks that we strike certain of Chugach’s arguments regarding the
historical workload data because Chugach failed to identify the arguments in response
to multiple discovery requests (gov’t resp. at 7-9). In addition, the government
contends that it did not withhold any superior knowledge; that the Navy did not
suppress demand for service calls; and that the evaluation team did not conclude that
Chugach could not perform the contract with the proposed staffing (gov’t resp. at 12-
32). Finally, the government contends that Chugach cannot establish that the alleged
undisclosed information affected its cost of performance because of problems caused
by its own business judgment (gov’t resp. at 32-41). We consider Chugach’s alleged
categories of superior knowledge sequentially.

      A. The Legal Standard For Superior Knowledge

        As a general rule, a contractor performing a fixed-price contract assumes the
risk of unexpected costs. See, e.g., Helene Curtis Indus., Inc. v. United States,
312 F.2d 774, 777-78 (Ct. Cl. 1963). However, the government has an implied duty to
“disclose to a contractor otherwise unavailable information regarding some novel
matter affecting the contract that is vital to its performance.” Scott Timber Co. v.
United States, 692 F.3d 1365, 1373 (Fed. Cir. 2012) (quoting Giesler v. United States,
232 F.3d 864, 876 (Fed. Cir. 2000). Superior knowledge generally applies when:

             (1) a contractor undertakes to perform without vital
             knowledge of a fact that affects performance costs or
             duration, (2) the government was aware the contractor had
             no knowledge of and had no reason to obtain such
             information, (3) any contract specification supplied misled
             the contractor or did not put it on notice to inquire, and (4)
             the government failed to provide the relevant information.

Hercules, Inc. v. United States, 24 F.3d 188, 196 (Fed. Cir. 1994) (quoting American
Ship Bldg. Co. v. United States, 654 F.2d 75, 79 (Ct. Cl. 1981)).

      B. Historical Workload Data

       Chugach’s main argument is that the Navy failed to disclose superior
knowledge in the form of historical workload data generated by the incumbent
contractor, EJB (app. br. at 142). Specifically, Chugach points to reports that EJB
provided to the Navy during performance of predecessor contract (id.). However,

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Chugach fails to identify information possessed by the Navy that constitutes “vital
knowledge of a fact that affects performance costs or duration.” Hercules, Inc.,
24 F.3d at 196. Instead, Chugach points to information possessed by the Navy and
speculates that knowledge of this information was the reason for the differences
between the government’s IGE and Chugach’s bid. Chugach fails to identify specific
information that would have affected its “performance costs or duration.” Instead,
Chugach simply points to the difference between its bid and the IGE. This argument
fails for two reasons. First, the Navy established that the IGE was prepared based on
projections made by Navy employees, and not solely historical data (although the
Navy did use some data not provided to Chugach). Second, other bidders that
participated in predecessor contracts submitted bids similar to that of Chugach.
Chugach fails to explain how the bidders possessing this “vital knowledge” did not
submit different bids. Third, Chugach did not perform the contract consistent with its
proposal.

        Chugach asserts that EJB provided to the Navy information pertaining to
trouble calls, bullets, and preventative maintenance actions, but that the Navy did not
provide all this information to bidders (app. br. at 142-47). For trouble calls, the Navy
provided what it considered to be the relevant information including the description of
the call, the location, labor hours, cost threshold, and work type (app. supp. R4,
tab 103.02 [native]). However, the Navy omitted data such as the date the Navy
requested the work, the date EJB completed the work, the piece of equipment being
repaired, the cost of materials, and subcontractor costs (app. br. at 143). For
maintenance, Chugach contends that the government withheld all information other
than the inventories of equipment to be maintained (id. at 145). The Navy did not
provide more information because of the change to the new IMP maintenance
procedure. Chugach additionally identifies four specific service calls as evidence of
superior knowledge. The first record (#3453054) shows that EJB incurred costs above
the contractual liability limit of $2,000 on the predecessor contract (id. at 23, 146).
From this single data point, Chugach speculates that the “undisclosed material costs
would have revealed significant material costs, including some instances where the
material costs exceeded the full liability limit under the previous EJB Contract” (id.
at 146).

        Chugach cites to a second record (#3221559) as evidence that subcontractor
costs could exceed the liability limit (id. at 23, 146). Chugach again speculates from
this single record that bidders would need the missing information to understand the
full volume of work, and that “[i]n some cases, that would significantly alter the
offeror’s understanding of the work” (id. at 146).

        Chugach additionally cites to EJB data demonstrating that EBJ took longer to
complete service calls than permitted under the contact on more than 20% of the work
(id. at 23-24). Chugach speculates that the “ordering and completion dates would have

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given additional context to . . . the difficulties of staffing these requirements to meet
fluctuating demand” (id. at 146). Chugach also points to the fact that EJB’s data are
missing the equipment number for many of the repair calls, and, thus, much of the
workload is to repair items for which the contractor does not have maintenance
responsibility (id. at 24). Chugach speculates that this information is essential to
determine the contractor’s ability to decrease demand through more effective
maintenance (id. at 147).

        We find that the information identified by Chugach does not constitute superior
knowledge with regard to the WBOS solicitation. We hold that Chugach has not
established by a preponderance of evidence that the information identified was “vital
knowledge of a fact that affects performance costs or duration.” While Chugach
argues that the identified information would have affected its performance costs, we
do not find that the limited information identified by Chugach was “vital” to
determining its bid. First, and most significantly, we find that the identified
information is too limited to constitute “vital” facts. Chugach has identified two
individual records that it contends contain errors out of 1,972 pages of historical data
that was provided to bidders. In addition, Chugach identified two data fields that were
not provided to bidders that it speculates would have influenced its bid. However,
Chugach fails to demonstrate how knowledge of this information would have
influenced its bid. In fact, Chugach seems to be unable to explain how its bid was
formulated. Because we determine that Chugach has not established the existence of
vital factual information, we do not reach the government’s argument that Chugach
has not established that the superior knowledge was responsible for its financial losses
on the contract (gov’t resp. at 32-41). However, we do note Chugach’s inability to
explain how its bid was formulated in determining that Chugach has not established
that the factual information was vital.

        Second, even if knowledge of this information could have been vital in bidding
for the existing WBOS contract, Chugach fails to address how this would be vital
information for the new WBOS contract. Specifically, Chugach points to information
regarding bullets that exceeded the $2,000 limit in the existing EJB WBOS contract
(app. br. at 23, 146). However, the new WBOS contract had a $5,000 limit. In
addition, much of the information regarding maintenance on equipment without
equipment numbers ignores that the new WBOS contract under bid had an entirely
different maintenance requirement.

       With regard to the second factor for superior knowledge, that the government
was aware that Chugach had no knowledge of and had no reason to obtain such
information, the government demonstrates that Chugach, as an established BOS
contractor should have known the types of information that existed (gov’t resp. at 20-
22). Moreover, the Navy notified bidders of the significant changes to the contract.

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       C. The Navy’s Purported Suppression of Demand

        Chugach additionally identified the Navy’s purported suppression of demand
for services as an example of superior knowledge (app. br. at 150-53). According to
this argument, the Navy required more service calls during performance of the EJB
base services contract, but was unable to agree to a price, and that the Navy therefore
“metered” its service calls to avoid exceeding the number of calls required by the
contract. In addition, Chugach argues that the Navy prohibited EJB from identifying
items that needed to be repaired through trouble calls (app. br. at 150-51).

        As the government notes, the data are from the EJB contract. However, the
contract at issue differed from the EJB contract in that the number of service calls was
unlimited (gov’t resp. at 24). Despite repeated cautions in the solicitation, and in
discussion questions, warning bidders to account for this significant change (R4,
tab 1- 14.2 at GOV17267; R4, tab 6-120 at CFSI256231_30, 44; R4, tab 2-43.1
at GOV475171-72) Chugach contends that it was unclear whether a change to
unlimited service calls would result in an increase or decrease in the number of service
calls (app. br. at 151-52). Chugach’s argument is contrary to the most basic principles
of economics—it is undisputed that demand will increase when the price of an
additional unit is essentially set to zero. See, e.g., Adam Smith, An Inquiry Into the
Nature and Causes of The Wealth of Nations 62-63 (Modern Library ed., Random
House 1937) (1776). Chugach’s employees recognized this simple economic fact (R4,
tab 5-4 at 141 (change to unlimited trouble calls “incentivized” Navy customers to call
in more trouble calls “because there’s no limit,” in contrast to the EJB contract, under
which those customers “were disincentivized because they had to pay for [extra
trouble calls]”); (R4, tab 5-7 at 75-76) (unlimited number of trouble calls makes the
WSBOS contract more risky than the EJB contract); R4, tab 5-10 at 31-33
(“unlimited” trouble calls created risk of increase in workload “much greater than
historical”)).

       Given the change in the structure of the contract, we hold that the purported
suppression of demand, even if proven, was not vital factual information that would
increase Chugach’s costs or performance time. Moreover, the solicitation clearly and
specifically notified bidders that there were changes to the treatment of service calls,
both in number and financial limit. Chugach relies upon the holding in Tripod, Inc.,
ASBCA No. 25104, 89-1 BCA ¶ 21,305 for the proposition that the government’s
knowledge that workload data provided was understated would constitute superior
knowledge (app. br. at 151). In Tripod, the government failed to notify bidders of a
longstanding obligation to provide a special lunch (the Mexican meal) each week. The
Board found that the special lunch involved additional time and effort and was more
heavily patronized, relative to other lunch services. Tripod, 89-1 BCA ¶ 21,305
at 107,438. The Board ultimately held that Tripod was entitled to compensation for
the additional costs of providing the special meal, because it would be unreasonable to

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    to an ASBCA Protective Order. This version has been approved for public release.
expect bidders to ask the government for the master menu or to inquire if there were
any special meals that were not disclosed. Id. at 107,444. As an initial point, it is not
even clear that Tripod is a superior knowledge case. The opinion notes that the
appellant argued superior knowledge, but the Board does not cite or apply the standard
for a superior knowledge claim. Id. Rather, it appear that the Board considered this to
be a contractual change. Regardless, even if the Board did base its award in Tripod on
the existence of superior knowledge, the case is factually distinct from this appeal. In
Tripod, the requirement for the special meal continued from the existing contract to the
new contract. Here, the contract substantially changed the requirements for service
calls.

       D. The Navy’s Purported Knowledge That Chugach Would Not Be Able to
          Perform the Contract With Its Proposed Staffing

       Chugach’s final allegation of superior knowledge is its contention that the
government knew that Chugach would not be able to perform the contract with its
proposed staffing. According to Chugach, the government prepared its IGE based, in
part, on the EJB workload data that the Navy did not provide to bidders. According to
Chugach, the fact that its proposal provided for substantially fewer full-time-
equivalent employees, means that the government knew that Chugach could not
perform the contract with its proposed staffing. (App. br. at 153-55)

        As the government notes, Chugach’s argument treats the IGE as the “known”
minimum staffing requirements for the contract (gov’t resp. at 14-18). In fact, the IGE
is a projection made by the government, incorporating discretionary judgments by a
number of government employees. For example, one of the key drivers in generating
the IGE was the estimate of the number of labor hours per service call. Chugach
contends that the government “knew” that the number of hours per service call would
be higher in the new contract based upon undisclosed data from the incumbent
contractor EJB. However, the EJB data show no such thing. Rather, the government
estimator made a projection that the number of hours per service call would double
from roughly 3.3 hours per service call experienced by EJB to 6.6 hours per service
call (gov’t ex. 2 ¶ 18). There was nothing in the EJB data to indicate such an increase.
In addition, it appears that the government projection overestimated the impact of the
contractual changes, because Chugach did not incur 6.6 labor hours per service call
(R4, tab 10-1 ¶ 117). The fact that the government’s staffing estimate was ultimately
more accurate than Chugach’s projection does not make it superior knowledge. As
noted in Northrop Grumman v. United States, 47 Fed. Cl. 20, 90 (2000) a difference in
technical judgment or prediction between the government and a contractor is not a
“fact” that affected performance cost or duration and, therefore, does not support a
superior knowledge claim. We hold that the staffing levels assumed in the
government’s IGE do not constitute “vital knowledge of a fact that affects

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       to an ASBCA Protective Order. This version has been approved for public release.
performance costs or duration.” Rather the IGE is a projection, and not a “fact.” The
contract specifications pointed Chugach to the changes in the new contract.

      II. Negligent Negotiation (Violation of FAR 15.306(d)

        Count I of Chugach’s complaint alleges that the Navy engaged in “negligent
negotiations” when it violated FAR 15.306(d) by failing to meaningfully discuss with
Chugach its concerns that Chugach had underestimated the necessary staffing. The
government previously moved to dismiss the negligent negotiations claim for lack of
subject matter jurisdiction. Under the standard of review for a motion to dismiss, we
denied the government’s motion, finding that Chugach had made jurisdictional
allegations sufficient to survive the motion to dismiss. Additionally, we noted that
“Chugach’s negligent negotiations claim is actually, for all intents and purposes, really
just an element of its superior knowledge claims . . . .” Chugach III, 19-1 BCA ¶
37,380, at 181,719. That is, that Chugach was alleging that the government had
superior knowledge regarding necessary staffing levels that it did not disclose during
contract negotiations. We held above that Chugach had not demonstrated the
existence of vital knowledge of a fact that affects performance costs or duration
information, thus we deny Chugach’s negligent negotiations claim to the extent it
asserts that the government possessed superior knowledge. 6

       Chugach also contends that a violation of FAR 15.306(d) provides an
independent basis for recovery, because the regulation exists for the benefit of
contractors (app. br. at 125-26). The government contends that FAR 15.306(d)
provides contractors with the fair opportunity to compete for an award, and does not
address the harm -- unprofitable performance -- alleged by Chugach (gov’t resp. at 44-
47).

       We previously held that FAR 15.306(d) existed, at least in part, for the benefit
of contractors. Chugach III, 19-1 BCA ¶ 37,380 at 181,718-19 (citing LaBarge
Products, Inc. v. West, 46 F.3d 1547, 1552 (Fed. Cir. 1995)). However, as explained
below, we hold that Chugach has not demonstrated a violation of the FAR provision.

       Pursuant to Federal Acquisition Regulation (FAR) 15.306(d), “Exchanges with
offerors after establishment of the competitive range:”

                Negotiations are exchanges, in either a competitive or sole
                source environment, between the Government and
                offerors, that are undertaken with the intent of allowing the

6
     Thus we need not reach the question of whether a cause of action based on negligent
         negotiations can provide a remedy when a contractor is unable to satisfy the
         four elements of a superior knowledge claim.
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                offeror to revise its proposal. [] When negotiations are
                conducted in a competitive acquisition, they take place
                after establishment of the competitive range and are called
                discussions.
                ...
                (2) The primary objective of discussions is to maximize the
                Government’s ability to obtain best value, based on the
                requirement and the evaluation factors set forth in the
                solicitation.

                (3) At a minimum, the contracting officer must, subject to
                paragraphs (d)(5) and (e) of this section and 15.307(a),
                indicate to, or discuss with, each offeror still being
                considered for award, deficiencies, significant weaknesses,
                and adverse past performance information to which the
                offeror has not yet had an opportunity to respond. [] The
                scope and extent of discussions are a matter of contracting
                officer judgment.

FAR 15.306(d) (emphasis added)

       Chugach asserts that the Navy violated FAR 15.306(d) when it did not
meaningfully discuss its concerns that Chugach had underrepresented the necessary
staffing such that the Navy did not believe that Chugach could perform the contract
(app. br. at 127-37). However, the government contends that it fully complied with
FAR 15.306 (gov’t reply at 47-62). Chugach alleges that it is entitled to relief upon
demonstrating that i) the FAR provision exists for the benefit of the contractor; ii) the
government violated the FAR provision; and iii) the violation harmed the contractor
(app. br. at 124, citing LaBarge Prods., 46 F.3d at 1552). 7 Here, we have already held
that FAR 15.306 exists, at least in part, for the benefit of the contractor. Turning to the
second factor, the parties dispute whether the government violated FAR 15.306(d).
Both Chugach and the government cite to decisions by the Government Accountability
Office and the United States Court of Federal Claims applying FAR 15.306(d) in the
context of bid protests (app. br. at 128; gov’t resp. at 48-49). Chugach cites to
decisions requiring that the government conduct discussions that are meaningful and
not misleading (app. br. at 128 (citing ACS Gov’t Sols. Grp., Inc., B-282098, 99-1
CPD ¶ 106 (Comp. Gen. June 2, 1999)). Conversely, the government contends that it
did comply with FAR 15.306 by directing Chugach to the areas of concern in its
proposal (gov’t reply at 47-62).

7
    LaBarge does not explicitly state such a rule, but as a general proposition, any appeal
        must demonstrate a violation of a contact term, law, or regulation and harm.
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        It is undisputed that in August 2012, the government technical evaluation team
assigned Chugach a significant weakness regarding its proposed staffing levels for
annexes 020000, 150000, 160000, and 180000 in its first proposal revision (R4, tab 2-
42.2 at GOV474788). In fact, the same report assigned 8 of the 9 offerors the same
significant weakness (id. at GOV474788, GOV474813, GOV474839, GOV474863,
GOV474888, GOV474915, GOV474940, GOV474989). The technical evaluation and
price evaluation reports both went through the Source Selection Advisory Council to
the source selection authority (the Contracting Officer). The next month, in
September 2012, the SSAC recognized the disparity between the IGE and the
proposals of 8 offerors, and indicated that the IGE could be at fault, or the offerors
might be attempting to position themselves for award, or that the offerors might be
planning on improved and more efficient work practices. (R4, tab 2-42.4
at GOV1722546) The SSAC concluded that the wide range of proposed FTEs “is an
indicator that offerors should be prompted to review the performance work statement
to ensure their proposals include the level of effort required” (id.). Thus, while the
technical team found a significant weakness, the SSAC, which reviews the technical
and price team reports, found that there was a concern with the staffing levels, but fell
short of identifying it as a weakness.

        Following these evaluations, in November 2012, the Navy issued discussion
questions to the offerors, including Chugach. Here, the Navy brought attention to the
issue by requesting that Chugach “ensure your work hour estimates and FTE staffing
for these annexes has adequately addressed no limitation to trouble call quantities, the
increased requirements of the RFP (over historical) maintenance program including
IMP, and environmental services specifically hazardous waste management” (R4,
tab 2-42.5 at GOV474585). This satisfies the FAR’s requirement that the contracting
agency direct the bidder’s attention to the area of concern. See, e.g., Advanced Data
Concepts, Inc. v. United States, 43 Fed. Cl. 410, 422 (1999), aff’d, 216 F.3d 1054
(Fed. Cir. 2000); see also, ORCA Nw. Real Estate Servs. v. United States, 65 Fed. Cl.
1, 9 (2005) (“The substance of the requirement is that the protestor should be given
at least one meaningful opportunity to respond to significant weaknesses”). Chugach
contends that the Navy’s question was inadequate to put it on notice of the significant
weakness, because the question did not identify that the concern was the proposed
hours were low or significantly low (app. br. at 131). We disagree. The discussion
question asks Chugach to make sure the work hour estimates and staffing reflect the no
limitation to trouble calls and the increased requirements of the new contract as
compared to the historical trouble call data (R4, tab 2-42.5 at GOV474585). While
Chugach contends that this could reflect a proposal that was too high or too low, we do
not see how references to “unlimited” service calls and “increased requirements” could
reasonably be interpreted as telling the contractor that its bid was proposing too much
staffing. Chugach similarly cites to deposition testimony from a Navy witness who
was a member of the SSAC, agreeing with Chugach’s question that the Navy’s
question did not “clearly signal that [Chugach has] a significant weakness” (app. reply

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at 20 (citing app. ex. 8 at 128)). However, we do not find testimony by a member of
the SSAC, six years after the events at issue, to predominate over the plain meaning of
the document. The testimony of the contracting officer that denied Chugach’s claim,
and who was not a member of the SSAC that issued the discussion questions, is even
less probative (app. reply at 20).

        Even if the initial discussion questions were not enough to satisfy FAR 15.306(d),
Chugach’s argument ignores the Navy’s determination that the IGE was too
conservative, that the proposals should be compared to each other, rather than to the
IGE, and that Chugach’s proposal did not have a weakness (R4, tab 2-43.4
at GOV1202881). Chugach submitted a third proposal revision (R4, tab 2-30.3
at GOV212713_1). Upon review of the third proposal revision, the Navy issued a third
set of discussion questions specifically noting that Chugach’s FTE’s for certain annexes
“appear low” and again asking Chugach to review its staffing (R4, tab 2-44.4
at GOV7474553). Once again, these discussion questions directed Chugach to the areas
of concern, consistent with the requirements of FAR 15.306(d). In the end, Chugach’s
technical proposal was rated “good” following discussions (R4, tab 2-45.2
at GOV475514). Chugach attempts to evade the impact of these later discussion
questions by arguing that the Navy’s later steps “only preserved the harm” (app. reply
at 27) and argues that the SSAC’s decision to rely on a price comparison between
offerors was unreasonable (id. at 28-34). If we were to accept Chugach’s argument that
discussion questions following a proposal revision “only preserve[] the harm” it would
make the entire proposal review process irrelevant. Rather, the requirement is simply
that offerors be provided with a chance to remedy any significant weaknesses. ORCA
NW Real Estate, 65 Fed. Cl. at 9. Further, we find no evidence that the decision to rely
upon a price comparison between offerors to be unreasonable. Chugach points to a
number of purported statistical errors in the evaluation process; however, here
Chugach’s argument becomes internally contradictory. Chugach simultaneously
contends that the government cunningly took advantage of its superior knowledge of the
true cost of performing the WBOS contract to entice contractors into underbidding the
contract to the financial benefit of the government while simultaneous contending that
the government employees performing the price analysis were incompetent. As we have
already held that the government did not possess superior knowledge, any statistical
errors were simply errors and not negligent negotiations. Moreover, we note that
Chugach previously endorsed the government’s statistical analysis before the GAO (see
R4, tab 12-394.1 at MSJ Exhibit 42_9; R4, tab 12-405.1 at 1). Accordingly, we hold
that Chugach has not demonstrated that the government violated FAR 15.306(d).

       Having determined that Chugach has not demonstrated that the government
violated FAR 15.306(d), we need not reach the question of whether Chugach has
demonstrated harm.

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   III. Mutual Mistake

       Chugach’s next theory is that it and the Navy were mutually mistaken that the
workload data contained in the solicitation could be “mapped to the current
requirements” (app. br. at 155). This is different from the statement in Chugach’s
complaint, and its claim, that the parties were mistaken in their belief that the contract
could “be performed by a workforce of a similar size” to that of the existing contractor
(compl. ¶ 143; R4, tab 4-1 at CFSI21902_45). The government asserts that this is a
“new claim” that was not presented to the contracting officer, and thus, that the Board
is without jurisdiction to entertain it (gov’t resp. at 64-65).

        To determine whether two claims are the “same claim” for jurisdictional
purposes, we look to see if they involve the same operative facts. Macro-Z Tech.,
ASBCA No. 60592, 19-1 BCA ¶ 37,358 at 181,659. Put another way, “[t]he test for
what constitutes a ‘new’ claim is whether ‘claims are based on a common or related
set of operative facts.’” Unconventional Concepts, Inc., ASBCA Nos. 56065 et al.,
10-1 BCA ¶ 34,340 at 169,591 (quoting Placeway Constr. Corp. v. United States,
920 F.2d 903, 907 (Fed. Cir. 1990)). Adding facts or legal arguments does not create a
different claim. K-Con Bldg. Systems, Inc. v. United States, 778 F.3d 1000, 1006 (Fed.
Cir. 2015). “The introduction of additional facts which do not alter the nature of the
original claim . . . or the assertion of a new legal theory of recovery, when based upon
the same operative facts as included in the original claim, do not constitute new
claims.” Trepte Constr. Co. Inc., ASBCA No. 38555, 90-1 BCA ¶ 22,595 at 113,385-
86. A claim is new when it “‘present[s] a materially different factual or legal theory’
of relief.” Lee’s Ford Dock, Inc. v. Sec’y of the Army, 865 F.3d 1361, 1369 (Fed. Cir.
2017) (quoting K-Con Bldg. Sys., Inc., 778 F.3d at 1006). “Materially different claims
‘will necessitate a focus on a different or unrelated set of operative facts.’” Id.
(quoting Placeway Constr., 920 F.2d at 907). Here, the operative facts for Chugach’s
statement of its claim in its rule 11 brief are EJB’s performance data contained in the
solicitation and the allegation that the parties shared an understanding of how the data
“mapped” to the requirements of the solicitation. Chugach does not define “mapping”
in its brief. While the term “mapping” has different meanings, we interpret Chugach’s
brief as using the mathematical definition, meaning to apply a function to the elements
of its domain. Put more simply, we interpret the statement as meaning that the parties
shared a belief that bidders could take the EJB data from the solicitation and, through
some unstated mathematical formulae, arrive at similar estimates of the number of
employees required to perform the work in the solicitation. Similarly, the operative
facts of Chugach’s statement of its claim in its complaint are EJB’s performance data
contained in the solicitation and the parties’ belief that the contract could be performed
by a workforce of a similar size. Although the complaint and the rule 11 brief are
worded differently, they are essentially the same theory because both versions
essentially argue that the parties believed that Chugach could perform with its

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    to an ASBCA Protective Order. This version has been approved for public release.
proposed staffing. Accordingly, we deny the government’s motion to dismiss Count
III.

      Turning to the merits of Count III, for a party to recover under the mutual
mistake theory it must demonstrate:

       (1) the parties to the contract were mistaken in their belief regarding a fact;
       (2) that mistaken belief constituted a basic assumption underlying the contract;
       (3) the mistake had a material effect on the bargain; and
       (4) the contract did not put the risk of the mistake on the party seeking
       reformation.

National Australia Bank v. United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006) (citing
Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir. 1990)). Chugach has not
established the existence of a mutual mistake.

        Chugach contends that the parties were mistaken in their belief that “the volume
and type of trouble calls in the solicitation data . . . aligned with the volume and type
of trouble calls for the WSBOS contract” (app. br. at 156). Chugach cites to the
Navy’s reliance on historical data to prepare the IGE as evidence that the Navy shared
in this belief (id.). The Navy counters that Chugach is alleging that the parties “were
mistaken about a prediction of the future, not about a fact existing in the present”
(gov’t resp. at 66). Under the appropriate standard of review, we denied the
government’s motion to dismiss Chugach’s mutual mistake count. Chugach III,
19- 1 BCA ¶ 37, 380 at 181,719. Pursuant to Rule 11, we are permitted to make
findings of fact based upon the record, and we find that Chugach’s theory of recovery
asserts a mistake of judgment and not a fact in existence. Accordingly we find that
Chugach cannot establish the existence of a mutual mistake. Kellogg Brown & Root
Servs., Inc., ASBCA Nos. 59385, 59744, 20-1 BCA ¶ 37,656 at 182,830
(“Assumptions about future facts cannot establish a mutual mistake claim.”) (citing
Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202-03 (Fed. Cir. 1994).
Additionally, the fixed price contract explicitly placed the risk of the alleged mistake
on Chugach. The contract provides that the “Contractor shall perform all required
repairs below the stated liability limits, regardless of the volume of work, with no
additional cost to the Government (R4, tab 1-14.2 at GOV17267). Chugach contends
that, just because the contract is a fixed price contract, it doesn’t prohibit a finding of
mutual mistake (app. reply at 93). Chugach also makes the unpersuasive argument
that “[b]y providing the historical data and directing offerors to use that data to
develop their proposals, the Navy intended to bear the risk of the mistake” (id.). Here,
the contract clause quoted above specifically assigns the very risk that Chugach
complains of to Chugach. We deny count III of Chugach’s complaint.

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   IV. Constructive Change

        Chugach additionally asserts a constructive change claim. For a contractor to
recover under a constructive change theory, it must demonstrate: 1) that it performed
work beyond the requirements of the contract; and 2) that the additional work was
ordered by the government. See, e.g., Bell/Heery v. United States, 739 F.3d 1324,
1335 (Fed. Cir. 2014). Here, Chugach does not identify any tasks that it performed
that were beyond the requirements of the contract. Rather, Chugach asserts that its
proposed staffing levels were incorporated into the contract, and that the Navy
required it to perform work requiring a larger staff than contained in its proposal (app.
br. at 158-63). Chugach also alleges that the Navy’s purported negligent negotiations
and withholding of superior knowledge can establish the government’s fault and result
in a constructive change (app. br. at 163). As we have already determined that the
government did not engage in negligent negotiations or withhold superior knowledge
we can reject this argument without further analysis.

       Turning to Chugach’s primary argument, we first review the language of the
contract. Chugach relies upon the performance work statement of the solicitation
provision, which states that “[t]he proposal presented by the offeror to whom the
award is made will be incorporated, in whole or in part, into the contract at time of
award” (R4, tab 3-1 at GOV18537), as providing that Chugach’s proposal was
incorporated in its entirety, including its proposed staffing levels (app. br. at 104, 159).
However, Chugach cites selectively from the performance work statement. The
contractual provision provides, in full, that:

              All terms and conditions of the contract award,
              performance work statement, and all attachments are
              applicable. The proposal presented by the offeror to whom
              the award is made will be incorporated, in whole or in part,
              into the contract at time of award. If the Contractor’s
              proposal contains terms or conditions more favorable to
              the Government, these more favorable terms and
              conditions shall be performed. However, the minimum
              requirements of the performance work statement must be
              met.

(R4, tab 3-1 at GOV18537) (emphasis added) Moreover, the solicitation’s “List of
Documents, Exhibits and Other Attachments” includes a number of documents to be
incorporated into the contract, but the list does not include attachment J.M-5 (the FTE
worksheet) (id. at GOV18586). Interpreting the contract as a whole, we find that, to
the extent Chugach’s proposal was incorporated into the contract, the full time
equivalent staffing worksheet does not relieve Chugach from meeting the performance

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standards of the contract. As stated in the solicitation, “the minimum requirements of
the performance work statement must be met” (id. at GOV18537).

        Chugach relies upon the contract’s order of precedence clause to argue that its
obligations pursuant to the contract were limited to the work it was capable of
performing with its proposed staffing levels (app. br. at 160-61). As noted above, the
staffing worksheet is not an attachment expressly incorporated into the contact, thus
the order of precedence clause is irrelevant. Even if the staffing worksheet were
incorporated into the contract, Chugach’s proposed interpretation of the attachment as
limiting the work required pursuant to the terms of the contract would only apply to
the extent that there was an inconsistency between contract documents. However,
Chugach has not identified a conflict between its staffing proposal and the express
provision that “the minimum requirements of the performance work statement must be
met” (R4, tab 3-1 at GOV18537). Chugach additionally cites to deposition testimony
of a retired contracting officer as evidence that Chugach’s proposal was incorporated
into the contract (app. reply at 95-96). However, interpretation of the terms of the
contract is the province of the Board and the deposition testimony of retired
government workers is not probative. Similarly, Chugach’s citation of parol evidence
such as comments on the draft of the solicitation, comments by the technical
evaluation team regarding proposals submitted by various offerors, negotiations with
offerors, a purported “agreement on staffing levels,” and comments supporting the
contract award decision (app. reply at 96-99) are irrelevant where, as here, the
solicitation is not ambiguous.

       Chugach also fails to establish that the Navy directed it to perform work beyond
the contract requirements. At most, Chugach demonstrates that the Navy encouraged
Chugach to meet the terms of the contract. Chugach contends that it was not a
volunteer and that the Navy pressured it to increase staffing beyond the levels
contained in its proposal (app. br. at 162-63). However, as held above, Chugach’s
proposed staffing levels were not incorporated into the contract and Chugach was
required to satisfy the minimum requirements of the contract’s performance work
statement. To the extent the government “pressured” Chugach to satisfy the minimum
requirements of the contract’s performance work statement, this did not constitute a
constructive change to the contract. In fact, the evidence of record demonstrates that it
was Chugach, and not the Navy, that made the decisions to increase staffing levels
(R4, tab 5-5 at 77-78; tab 5-2 at 81).

   V. Improper Withholding of Payment

       The final count of Chugach’s complaint seeks return of payments withheld by
the government. In the WBOS contract, the government retained payments for
specific tasks that Chugach failed to perform. Specifically, in a November 14, 2015
decision, the administrative contracting officer withheld $450,580.83 for certain

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identified preventative maintenance tasks that Chugach failed to perform, and two
positions that Chugach had not staffed (app. supp. R4, tab 1414 at CSUP 49777-78).
For these items, the Navy estimated the value of the work pursuant to 5252.242-9304
by estimating the number of hours Chugach would have incurred to fill the vacant
positions and perform the work (see app. supp. R4, tab 1416.01 at CSUP 49832-33).
Chugach does not challenge this withholding, except to the extent that it prevails in
one of its other theories and demonstrates that it performed additional work not
required by the contract (app. reply at 104). As we denied counts I through IV of
Chugach’s complaint, we hold that the government is entitled to the amounts
specifically identified and withheld. The November 14, 2015 decision also indicated
that the Navy would make temporary withholdings of 10% of the total contract
amount, with the withholding to become permanent at the end of the fiscal year (app.
supp. R4, tab 1416.01 at CSUP49833). The Navy subsequently reduced the
percentage of withholding to 5 %, and released 40% of the prior withholdings (R4,
tab 11-6 at GOV1723225_3). 8

        Chugach challenges this withholding for two reasons. First, Chugach contends
that the contract does not provide the government with the ability to withhold a fixed
percentage of the contract (app. br. at 164-65). Second, Chugach contends that the
government is not entitled to retainage because the government caused Chugach’s
inability to meet the contract requirements (app. br. 165). Chugach drops this second
argument in its reply brief, and asserts that the government failed to establish the
propriety or amount of its withholdings (app. reply at 109-14).

      Turning to Chugach’s first argument, we find that the contract does not prohibit
the Navy from retaining funds based on a percentage of contact value. Contract clause
5252.242-9304 provides in relevant part:

                In the event the price of non-performed or unsatisfactory
                work cannot be determined from the prices set out in the
                Schedule or on the basis of the actual cost to the
                Government, estimating methods may be used to
                determine an amount, which reflects the reduced value of
                services performed. The Government may estimate the
                cost using wage rates and fringe benefits included in the
                wage determinations included in the contract, Government
                estimates of the Contractor’s overhead and profit rates, and
                Government estimates of material costs if applicable.

8
    It is not clear from the document whether the 40% release applied to the $450,580.83
           or just to the 10% retainage (R4, tab 11-6 at GOV1723225_3).
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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
(R4, tab 3-1 at GOV18542) Chugach interprets the clause as limiting the
government’s ability to determine the value of the non-performed or unsatisfactory
work to estimates of wage rates, overhead, profit, and material costs (app. reply at 107-
08). Chugach cites to various rules of contract interpretation, such as specific
language qualifying general language, expression unius est exclusion alterius, an
interpretation giving meaning to all parts being preferable to one that renders another
part superfluous, and the rule of contra proferentem (app. reply at 108-09). However,
all of Chugach’s arguments ignore the language of the clause providing that
“estimating methods may be used” to estimate the costs (R4, tab 3-1 at GOV18542).
In a separate sentence, the provision states that the government “may use” certain
specified estimating techniques “if applicable” (id.). The contractual language
providing that the government “may estimate” the costs in the specified manner, if
applicable, does not limit government to estimating costs solely in that manner.

        As we have denied Counts I through IV of Chugach’s complaint, we similarly
find that Chugach had not demonstrated that the government was responsible for
Chugach’s failure to perform under the contract. This leaves only Chugach’s
argument in its reply brief that the Navy failed to establish the propriety or amount of
its withholdings. As an initial matter, we must consider whether Chugach’s argument,
raised in its reply brief, is timely. As a general rule, arguments raised for the first time
in a reply brief are waived. See, e.g., Buck Town Contractors & Co., ASBCA
No. 60939, 18-1 BCA ¶ 36,951 at 180,059. However, here, the retainage is a
government claim, and the government bears the burden of proof. The government
submitted declaration testimony to support its retainage as part of its post-hearing
response brief. Thus, Chugach’s reply brief was its first opportunity to respond to the
government’s new evidence. The government subsequently requested, and was
permitted to file, a sur-reply brief. Thus, we find that consideration of Chugach’s
argument from its reply brief does not prejudice the government.

       As we noted in Aegis Defense Services, LLC, d/b/a GardaWorld Fed. Servs.,
ASBCA No. 62442 et al., 22-1 BCA 38,099 at 185,029, the amount of a reduction in
contract amount is a matter of quantum, but the government must demonstrate harm in
the entitlement phase. In Aegis, the government asserted a diminution in value. Here
the Navy asserts that work was not performed or was performed late. However, the
Navy never identifies the work that it contends was not performed or was performed
late.

      The Navy submitted a number of proposed factual findings relating to its
withholding of contractual amounts (see Navy Proposed Findings of Fact ¶¶ 375-84).
The only costs specifically identified in the factual findings pertain to the deductive
modification that Chugach is not challenging (see Navy Proposed Findings ¶¶ 376,

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 DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
    to an ASBCA Protective Order. This version has been approved for public release.
383). At best, the Navy relies upon the declaration of the former Contracting Officer’s
Representative that:

             CFSI did fail to perform some work in accordance with the
             contract requirements, including the scheduled PM work
             based on the EJB work plans. The result was a large
             backlog of PM work orders that CFSI failed to complete in
             a timely manner. CFSI also failed to perform trouble calls
             in a timely manner and to staff some of the key personnel
             positions (e.g., Electrical Supervisor and Utilities
             Manager), for periods of time in FY15 and FY16.
             NAVFAC estimated the cost of the FY16 non-performed
             work as 5% of the contract value of the recurring work.

(Gov’t ex. 1 ¶ 20) This conclusory statement is unsupported by citation to any
workpapers or documentation of non-performed work. Moreover, Mr. Sandoval does
not state that he personally estimated the value of the non-performed, but just that
“NAVFAC” estimated the cost without identifying the individual or individuals that
purportedly estimated the value to be 5 percent (id.).

       The Navy additionally cites to its performance evaluations and Chugach’s
responses (gov’t ex. 8 at CFSI161578_1-2; R4, tab 11-2 at GOV172310_2; R4, tab 11-
4 at GOV172317_2-3; R4, tab 11-6 at GOV172325_3; app. supp. R4, tab 1428
at CSUP49928-29). These documents demonstrate that there was a backlog of work
that Chugach had not performed timely. However, contract clause 5252.242-9304
applies when work cannot be reperformed. The clause also permits the government to
require performance and to pay the contract amount. Here, the government cites to a
March 29, 2016 email from Chugach’s Robert Haunton with the subject line “Backlog
Reduction.xlsx” as evidence that Chugach had not performed the work required by the
contract (gov’t resp. at 82; gov’t proposed finding of fact ¶ 385 (citing gov’t ex. 8
at CFSI161578_1-2)). However, the cited document, and the attachment provided by
Chugach (app. ex. 17) also demonstrate that Chugach was increasing its staffing levels
to reduce the backlog, implying that the work was being performed, albeit late. Thus,
we hold that the government has not demonstrated by a preponderance of the evidence
that Chugach failed to perform contractual work, and therefore, is not entitled to a 5%
withholding of the contract amount.

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   DOCUMENT FOR PUBLICE RELEASE. The decision issued on the date below is subject
      to an ASBCA Protective Order. This version has been approved for public release.
                                     CONCLUSION

           For the reasons stated above, Chugach’s appeal is denied with regard to Counts
  I, II, III, and IV. Chugach’s appeal with regard to Count VI, pertaining to the 5%
  withholding, is granted and remanded to the parties to determine quantum.

            Dated: June 8, 2023

                                                  DAVID D’ALESSANDRIS
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                           I concur

 RICHARD SHACKLEFORD                                J. REID PROUTY
 Administrative Judge                               Administrative Judge
 Acting Chairman                                    Vice Chairman
 Armed Services Board                               Armed Services Board
 of Contract Appeals                                of Contract Appeals

      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 61320, Appeal of Chugach
Federal Solutions, Inc., rendered in conformance with the Board’s Charter.

      Dated: June 9, 2023

                                                 PAULLA K. GATES-LEWIS
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

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