Court Opinion

ID: 3006897
Source: CourtListenerOpinion
Date Created: 2015-10-02 20:02:01.397724+00
Date Added: 2024-06-11T11:46:05.367654
License: Public Domain

In the United States Court of Federal Claims
                                          No. 15-645C
                                          (Bid Protest)
                                    (Filed: October 2, 2015) 1

**************************
                          *                         Post-award Bid Protest; 28 U.S.C.
CADDELL CONSTRUCTION      *                         § 1491(b)(1);   Omnibus       Diplomatic
COMPANY,                  *                         Security and Antiterrorism Act of 1986,
                          *                         22    U.S.C.     §     4852;   Statutory
          Plaintiff,      *                         Interpretation; Total Business Volume;
                          *                         Similar Work Requirement; Agency’s
          v.              *                         Failure     to    Follow     Government
                          *                         Accountability Office’s Recommendation.
THE UNITED STATES,        *
                          *
          Defendant,      *
                          *
          and             *
                          *
PERNIX GROUP, INC.,       *
                          *
         Intervenor.      *
                          *
*************************

      Dirk Haire, Alexa Santora, P. Sean Milani-nia, and Sonia Tabriz, Fox Rothschild LLP,
1030 15th Street, NW Suite 380 East, Washington, D.C. 20005, for Plaintiff.

       Benjamin Mizer, Robert E. Kirschman, Jr., Deborah Bynum, and Sosun Bae, U.S.
Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box 480, Ben
Franklin Station, Washington, D.C. 20044, for Defendant.

      J. Randolph MacPherson and Rebecca Bailey Jacobsen, Halloran & Sage, LLP, 1717
Pennsylvania Avenue, NW, Suite 675, Washington, D.C. 20006, for Intervenor.

1
         The Court issued this opinion under seal on September 25, 2015, and directed the parties
to file proposed redactions by October 2, 2015. The Court publishes this Opinion indicating
redactions by asterisks “[***].”
             _________________________________________________________

     OPINION AND ORDER GRANTING IN PART DEFENDANT’S MOTION FOR
               JUDGMENT ON THE ADMINISTRATIVE RECORD
          _________________________________________________________

WILLIAMS, Judge.

        This post-award bid protest comes before the Court on the parties’ cross-motions for
judgment on the Administrative Record (“AR”). Plaintiff, Caddell Construction Company
(“Caddell”), challenges the Department of State, Bureau of Overseas Building Operations’
(“DOS”) award of a contract to Pernix Group, Inc. (“Pernix”) for the construction of a New
Embassy Compound in Maputo, Mozambique. Plaintiff claims that Pernix was ineligible for
award under the Omnibus Diplomatic Security and Antiterrorism Act of 1986 (“the Act”)
because Pernix had not demonstrated either the total business volume or the performance of
similar work required by the Act. Plaintiff also asserts that DOS erred in evaluating Pernix’s
price and improperly disregarded the Government Accountability Office’s (“GAO”)
determination that Pernix was ineligible for award. Plaintiff requests that the Court declare the
award unlawful and order DOS to terminate Pernix’s contract and award the contract to Caddell.
        On August 21, 2015, Caddell filed three additional protests challenging DOS’
prequalification of Pernix for similar construction projects in Niger, Mexico, and Papua New
Guinea. Caddell Constr. Co. v. United States, No. 15-912C (Fed. Cl. Aug. 21, 2015); Caddell
Constr. Co. v. United States, No. 15-913C (Fed. Cl. Aug. 21, 2015); Caddell Contsr. Co. v.
United States, No. 15-914C (Fed. Cl. Aug. 21, 2015). Because these cases involve identical
issues of statutory interpretation of the total business volume and similar work requirements
under the Act, the parties requested that the Court stay proceedings in those actions pending
resolution of the instant protest. The Court granted this request and entered Orders staying
proceedings on August 24, 2015.
       During argument on September 10, 2015, the Court orally denied the instant protest in
part, upholding DOS’ interpretation of the Act’s total business volume and similar work
requirements. This decision confirms and memorializes that oral ruling.2
                                       Findings of Fact3

DOS’ Issuance of the Solicitation and Pre-Qualification Analysis
       On February 2, 2014, DOS issued a Notice of Solicitation for the construction of a New
Embassy Compound in Maputo, Mozambique. AR 1-3. This project was to involve the
“construction and commissioning” of a New Office Building, Marine Security Guard Quarters,

2
        The Court ordered further briefing on Caddell’s challenge to the agency’s evaluation of
Pernix’s price. Tr. 120: 7-22 (Sept. 10, 2015); Order, Caddell v. United States, No. 15-645C
(Sept. 10, 2015).
3
       These findings of fact are derived from the AR. Additional findings of fact are in the
Discussion.
                                                2
shops, Storage and Maintenance Facilities, Vehicle and Pedestrian Access Control Pavilions, a
utility building, a bathhouse/cabana, and a Vehicle Parking Structure, on a site totaling
approximately 4 hectares. AR 1. The resulting award was to be a firm fixed-price contract. Id.
The estimated construction cost provided to prospective offerors in the Notice of Solicitation was
$160-$210 million. Id. The procurement consisted of two phases – Phase I, in which DOS
would pre-qualify offerors pursuant to the requirements of the Act and security clearance
requirements, and Phase II, in which DOS would evaluate pre-qualified offerors’ technical and
price proposals. Id. The project was anticipated to last for 33 months, with work beginning
between November 1, 2014, and February 1, 2015. AR 134.
       The February 3, 2014 Notice of Solicitation informed offerors that award was limited to a
“United States person” as defined by the Act. AR 2. Section 4852(c)(2) of the Act provides:
       (2) the term “United States person” means a person which –
           (A) is incorporated or legally organized under the laws of the United States,
       including State, the District of Columbia, and local laws;
           (B) has its principal place of business in the United States;
           (C) has been incorporated or legally organized in the United States—
                (i) for more than 5 years before the issuance date of the invitation for bids
           or request for proposals with respect to a construction project under
           subsection (a)(1) [a bid on a diplomatic construction or design project which
           has an estimated total value exceeding $10,000,000]; and
                (ii) for more than 2 years before the issuance date of the invitation for bids
           or request for proposals with respect to a construction or design project which
           involves physical or technical security under subsection (a)(2);
           (D) has performed within the United States or at a United States
       diplomatic or consular establishment abroad administrative and technical,
       professional, or construction services similar in complexity, type of
       construction, and value to the project being bid;
           (E) with respect to a construction project under subsection (a)(1), has
       achieved total business volume equal to or greater than the value of the
       project being bid in 3 years of the 5-year period before the date specified in
       subparagraph (C)(i);
           (F) (i) employs United States citizens in at least 80 percent of its principal
       management positions in the United States,
           (ii) employs United States citizens in more than half of its permanent, full-
       time positions in the United States, and
           (iii) will employ United States citizens in at least 80 percent of the supervisory
       positions on the foreign buildings office project site; and
           (G) has the existing technical and financial resources in the United States to
       perform the contract.
22 U.S.C. § 4852(c)(2)(A)-(G) (2012) (emphasis added).

                                                 3
       To be pre-qualified, offerors were required to complete “Certifications Relevant to Public
Law 99-399, Statement of Qualifications for Purpose of Section 402[4] of [the Act]” (“Statement
of Qualifications”). AR 2. The Notice of Solicitation stated:
       To demonstrate performance of similar construction work for purposes [of the
       Act], the offeror needs to provide information demonstrating that it has
       successfully completed in the United States or at a U.S. diplomatic or consular
       mission a construction contract or subcontract involving work of the same general
       type and complexity as the solicited project and having a contract or subcontract
       value of approximately $120 million.
Id. (emphasis in original). The Notice of Solicitation further provided that the Contracting
Officer would determine whether the information provided by each offeror was sufficient. Id.
With respect to information missing from an offeror’s prequalification information, the Notice of
Solicitation stated:
       The Offeror shall submit sufficient documentation to allow DOS to evaluate its
       capabilities with the qualification criteria listed. Submissions that are missing the
       required information or otherwise do not comply with the submission
       requirements may be eliminated from consideration at the Contracting Officer’s
       determination.

Id. Submission of the pre-qualification information was due on March 6, 2014 at 3:00 p.m. AR
3.
       The text of the Statement of Qualifications to be filled out by offerors was set forth in
DOS’ regulations implementing the Act and contained definitions of terms in the Act. AR 4-15,
35-53; 48 C.F.R. § 652.236-72 (2015). With respect to Section 4852(c)(2)(E), the total business
volume requirement, DOS’ regulations contained the following definitions:
       3 years of the 5-year period before the date specified in subparagraph (C)(i)
       means the three to five calendar year period immediately preceding the issuance
       date of this solicitation.
       Total business volume means the U.S. dollar value of the gross income or receipts
       reported by the prospective bidder/offeror on its annual federal income tax
       returns.
       Years means the business year of the prospective bidder/offeror, as reflected on
       its annual federal income tax returns.
See AR 11. With respect to Section 4852(c)(2)(D), the similar work requirement, DOS’
regulations contained definitions for each element – complexity, type of construction, and value
– as follows:

4
        “Section 402” refers to the Public Law version of the Act before codification. The Court
will refer to the codified version of the Act at 22 U.S.C. § 4852(c) (2012).
                                                4
        “COMPLEXITY” – This term refers to the physical and technical size and
        demands of the project.
        “TYPE OF CONSTRUCTION” – This term refers to the overall nature of the
        facilities to be built, including the kinds of materials to be used. Thus, if the
        contract will require the construction of a multi-story office building, the
        prospective offeror will be expected to demonstrate experience with facilities of
        this type.
        “VALUE” – This term refers to the total contract price of the project, not to the
        profit or loss to the contractor.
AR 8; see 48 C.F.R. § 652.236-72.
        Nine offerors, including Pernix and Caddell submitted pre-qualification statements. With
respect to the total business volume questions, Pernix listed its gross receipts for the years 2009
to 2013 as follows:
                       2013: [***]
                       2012: [***]
                       2011: [***]
                       2010: left blank
                       2009: [***]
AR 11. Pernix listed five projects it believed were similar, including a New Embassy Compound
in Suva, Fiji, valued at $50,204,527, the Baghdad Diplomatic Support Center, valued at
$120,335,028, and the Baghdad Police Academy, valued at $102,524,145. AR 9-10. Pernix
listed itself as the majority partner and the prime contractor on the Baghdad Diplomatic Support
Center, which had been completed by the Pernix-Serka Joint Venture. AR 9, 11. Pernix did not
enter a response to the question requesting the specific percentage of this project that it
performed as a co-venturer. AR 11. Pernix described the type of construction of the Baghdad
Diplomatic Support Center as “design-build” and the complexity as follows:
        Facilities under construction include, but are not limited to: housing units, an
        office building, an overhead cover system for existing gym, MWR [Morale
        Welfare Recreation Facilities], and DSH Hospital facility, guard towers, water
        and wastewater treatment plants. This project was a fast tract-design build, and
        included the fit-out of facilities to be used for housing, recreational, storage,
        office, and general work and maintenance areas. It was executed within an
        existing U.S. Government compound, requiring tight coordination with USG, and
        contractor personnel to ensure limited disruption to the existing facilities’
        operation. This was executed in Baghdad, Iraq with high security profile and
        extreme local logistics requirements.

AR 9.

       In its pre-qualification submission with respect to total business volume, Caddell listed its
gross business receipts per year as follows:

                                                 5
                       2012: Not available
                       2011: [***]
                       2010: [***]
                       2009: [***]
                       2008: [***]
AR 49. For the similar project requirement, Caddell listed seven projects ranging in value from
$106,110,638 to $332,822,890. AR 84-90. For four projects, Caddell noted that it was a joint
venture partner and specified that it was a [***] joint venture partner for two projects and a [***]
joint venture partner for the other two. Id. Caddell left blank its answer to the question asking
for the percentage of the project it performed as a co-venturer. AR 49.
      On March 11, 2014, DOS’ legal advisor, Dennis J. Gallagher, issued a memorandum to
Jimmy Lai, the Contracting Officer,5 containing his analysis of the offerors’ pre-qualification
submissions. Mr. Gallagher wrote:
       For purposes of this review, I have considered new general office building
       construction whether on a design-build or design-bid-build basis to be similar in
       complexity and type of construction to the Paramibo project[6] and consistent with
       the FedBizOpps announcement have considered such experience to be roughly
       similar in value if at least one completed eligible project has a contract value of
       approximately $120 million or more.

       As previously noted by L/BA, there continues to be uncertainty as to the
       application of the business volume requirement of Section 402 of P.L. 99-399 [the
       Act]. In particular, there are inconsistent decisions by the Court of Federal
       Claims and the Government Accountability Office as to whether the business
       volume requirement may be satisfied by cumulative business volume in 3 years of
       the 5 year period prior to the solicitation exceeding the value of the project or
       whether business volume in each of the three years of the five year period is
       required. For purposes of this review, I have applied the cumulative business
       volume standard and used the low-end approximate construction cost, but note the
       potential bid protest vulnerability where the offeror does not meet the business
       volume test for each of the three years at the high-end estimate.
AR 94-95 (footnote omitted).

5
       Caddell points out that Mr. Lai used the title Contract Specialist on some documents and
Contracting Officer on others, and that James G. Thomas, Jr. also used the title Contracting
Officer. Pl.’s Resp. at 28. Pernix counters that both Messrs. Lai and Thomas were warranted
Contracting Officers and that Mr. Lai functioned both as a Contracting Officer or Contract
Specialist depending on the circumstances. Intervenor Reply 19-20, n. 13. Although Caddell
suggests that Mr. Lai’s conduct in functioning in a dual capacity was somehow irregular, the
record does not support this suggestion.
6
       The record does not indicate what the “Paramibo project” was.

                                                 6
        DOS’ legal advisor determined that Caddell met the pre-qualification requirements and
that Pernix “appeare[d] to meet [the Act’s] criteria on the basis of the Baghdad Diplomatic
Support Center, which exceeds $120 million.” AR 96. DOS’ legal advisor noted that “Pernix’s
reported business volume me[t] the cumulative but not 3 of 5 year standard,” i.e., Pernix’s
business volume over three years, if viewed cumulatively, exceeded the $160 million low-end
estimated cost of the instant project in the solicitation, but not if viewed year by year
individually. Id. Caddell’s business volume totals met the requirement on both an individual
year basis and cumulatively. AR 95. DOS’ legal advisor determined that eight out of nine
offerors should be pre-qualified. AR 98. On April 4, 2014, Contracting Officer Lai adopted
DOS’ legal advisor’s recommendations and deemed the eight offerors eligible to participate in
Phase II of the procurement. AR 101-02.

Caddell’s GAO Protests
        On January 9, 2015, Caddell filed two protests with GAO contesting DOS’ determination
that Pernix and another offeror, Framaco International, Inc. (“Framaco”), were properly pre-
qualified pursuant to the Act.7 Caddell argued that Pernix did not meet the Act’s definition of a
United States person because it had not achieved at least $160 million of business volume for
each of three years individually in the five-year period. AR 381-82. Caddell urged GAO to
follow its previous decisions measuring total business volume by discrete year instead of
cumulatively over three years. AR 299-301. Caddell also argued that Pernix did not meet the
Act’s definition of a United States person because it lacked performance of similarly valued
construction work. Specifically, Caddell claimed that Pernix’s only project of similar value was
the $120 million Baghdad Diplomatic Security Center, but, because it performed this project as
part of a joint venture, Pernix should not itself have been able to claim the full amount, but only
the value up to the percentage of its stake in the joint venture. AR 298.
        The Government and Pernix countered that DOS’ interpretation of the Act as measuring
total business volume cumulatively over three years was correct and relied on Grunley Walsh
International, LLC v. United States, 78 Fed. Cl. 35 (2007) (“Grunley”), which held that the Act
should be interpreted to compute total business volume cumulatively over three years. AR 289-
90, 315-17.
       On April 20, 2015, GAO sustained Caddell’s protests and determined that Framaco and
Pernix were not United States persons because they did not meet the total business volume
requirement for each of the three years individually. AR 365-84. GAO denied Caddell’s protest
that Pernix failed to meet the similar work value requirement because Caddell offered no legal
support for its argument that the Act required DOS to prorate an offeror’s share in a joint
venture. AR 383-84.
        With respect to the total business volume requirement, GAO relied on its June 15, 2007
decision, Caddell, B-298949.2, which interpreted the total business volume requirement to mean
that offerors achieved a business volume equal to or greater than the value of the project in each
of 3 years within the 5-year period. 2007 CPD ¶ 119 at 10 (Comp. Gen. June 15, 2007). GAO
based this decision on its stated concern that an interpretation affording a cumulative 3-year
business value would “read out” the three-year language because an offeror could meet the

7
       DOS ultimately determined that [***]. AR 1042.
                                                7
requirement by presenting a very large business volume in one year and zero in the other two,
but still pre-qualify. Id. at 10.
       GAO also considered the provision to have an “element of ambiguity” and considered the
Act’s legislative history. Id. at 9-10. As described by GAO, the Committees on Foreign
Relations from both houses of Congress used “almost identical language to describe these
provisions . . . .” Id. at 10. GAO quoted the Senate Committee on Foreign Relations as stating:
       -- The firm must have performed services similar to the complexity, cost, and
       construction-type to that of [the] project open for bid.

       -- The firm must have achieved a total business volume in 3 of the previous 5
       years at least equal to the value of the project being bid. The previous two
       requirements will help ensure that a firm is technically capable to carry out a
       given project.
Id. (emphasis in original) (quoting S. Rpt. No. 99-304, at 15 (1986); see also H. Rpt. No. 99-494,
at 17 (1986) (footnote omitted)). Based upon this legislative history, GAO posited:
       Given these concerns [of an offeror’s technical capability], it is troubling that the
       agency’s interpretation of the business volume requirement will result in the
       eligibility of an offeror who has not, in any of the previous 5 years before the
       solicitation was issued, performed a project of this magnitude.
Id.

       On June 23, 2015, the day after Caddell filed its complaint with this Court, DOS notified
GAO that it declined to implement GAO’s recommendation. AR 387-89. DOS stated that
computing total business volume on a cumulative basis was its “consistent and long-standing
administrative interpretation” of the Act. AR 387. DOS concluded:
       The Department of State has never previously declined to implement GAO’s
       recommendations and the Department understands that abiding by GAO bid
       protest decisions with which we disagree is essential to the functioning of the bid
       protest system. In the previous case [Grunley], however, we attempted to follow
       GAO’s interpretation of the statute, only to be told by the Court of Federal Claims
       that our long-standing administrative interpretation was correct and that GAO’s
       ruling was arbitrary and capricious. In these circumstances, the Department of
       State has concluded that Caddell rather than the Department of State should be
       required to present GAO’s position to the Court of Federal Claims. The
       Department believes Caddell should have presented its protest to the Court of
       Federal Claims in the first place.
                                     *       *       *
       The issue presented in Caddell’s protests will be repeated in virtually every
       prequalification for solicitations for New Embassy Compounds . . . . Unless the
       law is changed or repealed, bid protests will likely continue until the issue is

                                                 8
       decided by the Court of Appeals for the Federal Circuit or possibly by the U.S.
       Supreme Court.
AR 388-89.
       Caddell and Pernix were notified of the award to Pernix on June 17, 2015. AR 1072-75.
Caddell filed its bid protest in this Court on June 22, 2015. The Government voluntarily stayed
performance until the Court issues a decision in this matter. Briefing was completed on August
21, 2015, and oral argument was held on September 10, 2015.

                                            Discussion
Jurisdiction and Standard of Review
        This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1491(b). The Court
evaluates bid protests under the Administrative Procedure Act’s standard of review for an agency
action. Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005) (citing Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)).
This Court will not disturb an agency’s procurement decision unless the Court finds that it was
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A) (2012); Adams & Assocs. v. United States, 741 F.3d 102, 105-06 (Fed. Cir. 2014).
The Court will set aside an agency’s decision as arbitrary and capricious if “the agency ‘entirely
failed to consider an important aspect of the problem, offered an explanation for its decision that
runs counter to the evidence before the agency, or [the decision] is so implausible that it could
not be ascribed to a difference in view or the product of agency expertise.’” Ala. Aircraft Indus.,
Inc. v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009) (alteration in original) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). The
Court will “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286
(1974). The Court will not overturn an agency decision “even though it might, as an original
proposition, have reached a different conclusion as to the proper administration and application
of the procurement regulations” if the Court finds a reasonable basis for the agency’s action.
Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal &
Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)).
        If this Court finds that the agency acted arbitrarily or capriciously or contrary to law, the
plaintiff must also show that it was prejudiced by this conduct to prevail. Bannum, 404 F.3d at
1351. This requires the plaintiff to demonstrate that there was a “substantial chance” the plaintiff
would have received the contract award but for the Government’s errors in the procurement
process. Id. at 1358. Under Rule 52.1 of the Rules of the Court of Federal Claims, the parties are
limited to the AR, and the Court makes findings of fact as if it were conducting a trial on a paper
record. See id. at 1354. Looking to the AR, the Court must determine whether a party has met
its burden of proof based on the evidence in the record. Id.

The Act Requires DOS to Assess Total Business Volume Cumulatively Over Three Years
       Caddell argues that DOS acted arbitrarily and capriciously by pre-qualifying Pernix when
Pernix did not meet the total business volume requirement. Pl.’s Mot. at 11-15. Caddell
contends that DOS incorrectly interpreted a provision of the Act in assessing Pernix’s total

                                                 9
business volume by totaling gross annual receipts over three years on a cumulative basis, instead
of evaluating Pernix’s business volume per year for each of three years out of five. Id. at 12-15.
        The Act imposes a business volume requirement in defining “a United States person” as
an entity that:
       with respect to a construction project under subsection (a)(1) [a diplomatic
       construction or design project valued over $10,000,000], has achieved total
       business volume equal to or greater than the value of the project being bid in 3
       years of the 5-year period before the date specified in subparagraph (C)(i).
22 U.S.C. § 4852(c)(2)(E).
        Statutory interpretation starts with the plain language of the text. Robinson v. Shell Oil
Co., 519 U.S. 337, 340 (1997). If the Court finds the statutory language unambiguous, then that
plain language controls the text’s meaning. See Carcieri v. Salazaar, 555 U.S. 379, 387 (2009);
Shoshone Indian Tribe of the Wind River Reservation v. United States, 364 F.3d 1339, 1345
(Fed. Cir. 2004). A Court must construe the plain language of a statute “so that ‘no clause,
sentence, or word shall be superfluous, void, or insignificant.’” Grunley, 78 Fed. Cl. at 40
(quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)).
        Here, the provision in question, Section 4852(c)(2)(E), states that a qualifying entity must
have “achieved total business volume equal to or greater than the value of the project being bid
in 3 years of the 5-year period before [the solicitation date].” This provision directs that the
government will measure “total business volume” “value” by aggregating the business volume
over a three-year period, not measuring the business volume of each individual year separately.
This Court, like the Court in Grunley, deems “total” to be an essential statutory term which
cannot be read out or ignored. As stated in Grunley:
       The inclusion of the word ‘total’ modifies the term ‘volume’ and informs the
       reader that the volume in question will be, as plaintiff states, ‘a product of
       addition.’ Measuring the three years cumulatively gives meaning to the word
       ‘total’ and avoids a construction that leaves language ‘superfluous, void, or
       insignificant.’

Id. (footnote omitted) (citing Duncan, 533 U.S. at 174). The Grunley Court derived its
definition of total as a “product of addition” from Merriam-Webster’s Collegiate Dictionary
(11th ed. 2003). Id. Other dictionary definitions support interpreting total business volume on a
cumulative basis. Webster’s Third New International Dictionary of the English Language
provides a definition of total as “a result of addition” and lists as synonyms “aggregate,” “sum,”
“column,” and “cumulative.” 2414 (2002). The American Heritage Dictionary of the English
Language defines total as “[a]n amount obtained by addition; a sum.” 1892 (3d ed. 1992).
        An interpretation that the requirement is cumulative squares with the plain text of the
statute by avoiding either removing the word “total” from the provision or inserting the word
“separate” or “individual” before “years.” Indeed, there is no countervailing language requiring
the Government, in measuring the value of “total business volume,” to isolate three individual
years and require that receipts from each single year meet a volume approaching the overall

                                                10
project value. Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54 (1982) (“[C]ourts must
presume that a legislature says in a statute what it means and means in a statute what it says
there.”); SEC v. Zahareas, 272 F.3d 1102, 1106-07 (8th Cir. 2002) (“Courts are obligated to
refrain from embellishing statutes by inserting language that Congress has opted to omit.”)
(alteration and citations omitted).
        GAO’s articulated rationale for reading the total business volume as per year rather than
cumulative is predicated on a presumption that it would be wrong to permit “a very large
business volume in one year and zero in the other two” and thus necessary to require a “steady
volume of one-third the value of the project” per year. Caddell, B-298949.2, 2007 CPD ¶ 119 at
11. But this gloss on the statutory language injects requirements nowhere found in the statute
that receipts had to be evenly divided among the three years and meet the total business volume
in each of three years. In contrast, the definition of total connotes adding up the receipts over a
three-year period no matter what the discrete gross receipts in those individual years might be.
The language permitting totaling gross receipts in any three years of the five preceding the
solicitation indicates that it matters not what three years an offeror chooses to identify. Nor does
the statute address what the gross receipts in each of those three years individually had to be – so
long as they “totaled” at least $160 million.
        An interpretation that the total business volume requirement is cumulative is consistent
with the purpose of the Act – which sets forth requirements for construction projects that span
multiple years. See BASR P’ship v. United States, 795 F.3d 1338, 1343 (Fed. Cir. 2015) (“[W]e
cannot determine the meaning of the statutory language without examining that language in light
of its place in the statutory scheme.”). The Act addresses the building of new embassy
compounds, which are “known to be multi-year projects.” Grunley, 78 Fed. Cl. at 41. Here, the
project is scheduled to be completed in 33 months, just shy of three years, making the total
business volume requirement, if read cumulatively, consistent with the length of the project. AR
134. In contrast, imposing a more rigorous per-year requirement for meeting business volume
would force a prospective offeror to have completed triple the volume of the project’s estimated
value in a three-year period in order to prequalify. This reading would impose an unduly
onerous qualification requirement and yield less competition.
       As the Court in Grunley observed:
       The cumulative three-year requirement does not contradict the stated purpose of
       ensuring that an offeror has performed projects of similar magnitude, cost, and
       type. The projects being bid on are known to be multi-year projects. Both the
       DOS and the offeror knew that these projects are completed over a period of
       multiple years. Offerors submit proposals that assume that the total cost will be
       spread across several years. This fits hand in hand with the three-year cumulative
       business volume requirement. Congress created a system whereby offerors
       display their capability to perform multi-year projects by showing their total
       business volume over three years out of the previous five.
78 Fed. Cl. at 41.
       Caddell places undue reliance on DOS’ regulations defining “total business volume” as
“the U.S. dollar value of the gross income or receipts reported by the prospective bidder/offeror

                                                11
on its annual federal income tax returns.” Pl.’s Reply 15; 48 C.F.R. § 652.236-72 (emphasis
added). Caddell seizes on the fact that DOS is looking to “annual” income tax returns as the
proper reporting device to reflect gross receipts, to reach an unwarranted conclusion that
individual yearly business volume must be the measure of the total business volume requirement.
Pl.’s Reply at 15. This attempt to imbue the word “annual” with undue significance ignores the
fact that “annual” read in the context of the regulation merely indicates the type of income tax
returns to be referenced. See id. at 16. In contrast to Caddell’s strained interpretation of
“annual,” the regulation’s express designation of annual tax “returns” in the plural refers to
multiple years of “annual” tax receipts, not just a single year. 48 C.F.R. § 652.236-72.
        Because the unambiguous meaning of the statute controls, it is not necessary to consider
legislative history. Connecticut Nat’l Bank, 503 U.S. at 254. Nonetheless, the legislative history
here is consistent with an interpretation that the total business volume requirement is to be
measured over three years. Congress was well aware that new embassy compound construction
requires multiple years to complete.8 H.R. Rep. No. 99-494, at 17 (1986); S. Rep. No. 99-304, at
15 (1986). The House Report specifies that an offeror’s prior business volume in three years had
to “be at least equal to the value of the project being bid,” stating:
       The firm must have achieved a total business volume in 3 of the previous 5 years
       at least equal to the value of the project being bid. The previous two requirements
       will help ensure that a firm is technically capable to carry out a given project.
Id., as reprinted in 1986 U.S.C.C.A.N. 1865, 1883 (emphasis added). Here, for purposes of
assessing whether an offeror’s past total business volume is “at least equal to the value of the
project being bid,” an offeror’s “total business volume” must be aggregated over three years so
as to be meaningfully compared to the project’s overall value, which here spans 33 months. See
id.
        In sum, based upon the clear language of the Act, DOS acted reasonably when it pre-
qualified Pernix by assessing Pernix’s total business volume for three years on a cumulative
basis.

DOS Rationally Declined to Implement GAO’s Recommendation
        Plaintiff claims DOS erred in not following GAO’s recommendation and in failing to
articulate a rational basis for disregarding GAO’s recommendation. Pl.’s Mot. at 28-29. This
Court recognizes the long-standing expertise of GAO in the bid protest arena and accords its
decisions due regard. Integrated Bus. Sols., Inc. v. United States, 58 Fed. Cl. 420, n.7 (2003);
see The Centech Grp. v. United States, 78 Fed. Cl. 496, 506-07 (2007). However, it is well
established that GAO recommendations do not bind agencies. Kingdomware Techs., Inc. v.
United States, 754 F.3d 923, 929 (Fed. Cir. 2014) (citing Honeywell, 870 F.2d at 647-648). The
Federal Acquisition Regulation contemplates that agencies will not always follow GAO

8
        Congress recognized the multi-year duration of embassy construction projects when
drafting the definition of a “United States Person,” 22 U.S.C. § 4852(c)(2)(C). H.R. Rep. No. 99-
494, at 17 (“Some length of business provision is necessary to establish this qualification, as
many construction projects require 3 or more years for completion.” (emphasis added)).

                                               12
recommendations.9 See AR 387-389; see also Turner Constr. Co., Inc. v. United States, 94 Fed.
Cl. 561, 571-73 (2010) (finding an agency acted irrationally in following a GAO
recommendation), aff’d 645 F.3d 1377 (Fed. Cir. 2011); Sys. Application & Techs., Inc. v.
United States, 100 Fed. Cl. 687, 711 (finding an agency’s decision to follow corrective action
proposed by GAO in an email to be irrational) aff’d 691 F.3d 1374 (Fed. Cir. 2012).
        Here, DOS had ample reason to interpret the Act in the manner it did and ample reason to
opt not to follow GAO’s recommendation. DOS explained:
       The Department of State has never previously declined to implement GAO’s
       recommendations and the Department understands that abiding by GAO bid
       protests with which we disagree is essential to the functioning of the bid protest
       system. In [Grunley], however, we attempted to follow GAO’s interpretation of
       the statute only to be told by the Court of Federal Claims that our long-standing
       administrative interpretation was correct and that GAO’s ruling was arbitrary and
       capricious. . . . Unless the law is changed or repealed, bid protests will likely
       continue until the issue is decided by the Court of Appeals for the Federal Circuit
       or possibly the U.S. Supreme Court.
AR 388-89. Given the conflict on the statutory interpretation issue in the two bid protest fora,
the agency faced a dilemma – no matter which forum it followed, it would be departing from the
other’s ruling. The rationality vel non of an agency’s decision to follow either a trial court
decision or a GAO decision depends on the reasoning articulated by the tribunal. Honeywell Inc.
v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (“[A] procurement agency’s decision to
follow the Comptroller General’s recommendation, even though that recommendation differed
from the contracting officer’s initial decision, was proper unless the Comptroller General’s
decision was irrational.”). In departing from GAO’s ruling here, the agency relied upon a Court
of Federal Claims decision on point and returned to its long-standing interpretation of the Act.
AR 387-89; see Grunely, 78 Fed. Cl. at 38. In staking out its statutory interpretation, the agency
reasonably construed the total business volume requirement both in the context of the statute as a
whole, and in the context of the requirements for this 33-month project. As explained above, this
Court finds the agency’s interpretation not only to be reasonable, but also to be legally correct.
So too, DOS’ Notification to GAO set forth sufficient documentation explaining its reasoning for

9
       Federal Acquisition Regulation 33.104(g) provides:

       Notice to GAO. If the agency has not fully implemented the GAO
       recommendations with respect to a solicitation for a contract or an award or a
       proposed award of a contract within 60 days of receiving the GAO
       recommendations, the head of the contracting activity responsible for that contract
       shall report the failure to the GAO no later than 5 days after the expiration of the
       60-day period. The report shall explain the reasons why the GAO’s
       recommendation, exclusive of costs, has not been followed by the agency.

48 C.F.R. 33.104(g) (2007).

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not adopting GAO’ recommendation based on DOS’ own interpretation of the Act as well as on
its reasonable reliance on Grunley. AR 387-89.

DOS’ Evaluation of Pernix’s Similar Work Was Reasonable
        Caddell also challenges DOS’ application of the Act’s similar work requirement. Section
4852(c)(2)(D) contains the requirement for similar work in defining a “United States person” as
an entity that:
       has performed within the United States or at a United States diplomatic or
       consular establishment abroad administrative and technical, professional, or
       construction services similar in complexity, type of construction, and value to the
       project being bid.
22 U.S.C. § 4852(c)(2)(D). Plaintiff claims DOS’ action was arbitrary and capricious in two
respects – its calculation of similar value and its evaluation of projects of similar type and
complexity. Pl.’s Mot. at 15-18.

Similar Value
        Regarding similar value, Caddell asserts that DOS was obligated to split the total value of
past joint venture projects between individual co-venturers by percentage of work performed in
order to assess whether one co-venturer performed past work of similar value to the instant
project. Pl.’s Mot. at 17. Caddell argues that DOS erred in failing to seek clarification of the
exact percentage of the Baghdad Diplomatic Support Center performed solely by Pernix as part
of the Pernix-Serka joint venture, as Pernix had omitted that information from its Statement of
Qualifications. Pl.’s Mot. at 17.10
        To meet the similar value requirement under Section 4852(c)(2)(D), the solicitation asked
offerors to identify in their Statement of Qualifications “a construction contract or subcontract
involving work of the same general type and complexity as the solicited project and having a
contract or subcontract value of approximately $120 million.” AR 2 (emphasis in original). The
Statement of Qualifications also provided a space for offerors to list “one or more similar
projects completed by the prospective offeror,” with a description of location, type of service,
complexity, type of construction, and value of project. AR 9.
       Pernix listed five projects. AR 9-11. These included the New U.S. Embassy Compound
in Suva, Fiji valued at $50,204,527, the Baghdad Diplomatic Support Center valued at
$120,335,028, the Baghdad Police Academy Annex valued at $102,524,145, a controlled access
area in Suva, Fiji, valued at $10,524,145, and rehabilitation construction work on an existing

10
       Caddell states in its motion that Pernix’s “publicly available financial documents” show
“Pernix owns a 52 percent stake in the Pernix-Serka JV.” From this, Caddell speculates on the
amount work attributed to Pernix. Pl.’s Mot. at 17. However, Caddell does not specify what
“publicly available financial documents” it is referencing or rely upon the Administrative
Record. Id. The Administrative Record states that Pernix was the prime contractor on the
Baghdad Diplomatic Support Center and majority owner and managing partner of the JV. AR 9,
11, 659.

                                                14
Embassy Compound in Niamey, Niger valued at $27,592,543. Id. Three of these projects were
joint ventures in which Pernix was the majority partner and served as prime contractor. Id.
        In recommending acceptance of Pernix’s Baghdad Diplomatic Support Center as a
project of similar value, DOS’ legal advisor wrote:
       Pernix appears to meet the [the Act’s] criteria on the basis of the Baghdad
       Diplomatic Support Center, which exceeds $120 million. Pernix’s reported
       business volume meets the cumulative but not 3 of 5 year standard.

AR 96. Contracting Officer Lai agreed with DOS’ legal advisor’s recommendation. AR 101.
        DOS acted reasonably in accepting Pernix’s submission of the Baghdad Diplomatic
Support Center as work of similar value because this project had a dollar value over the
solicitation’s minimum of $120 million and Pernix’s Statement of Qualifications listed Pernix as
the prime contractor and majority partner of the joint venture that performed this project. AR 9,
11. The agency reasonably concluded that by acting as the prime contractor for the Baghdad
Diplomatic Support Center valued over $120 million, Pernix prequalified for the solicited
project. AR 96; cf. AR 97 (DOS’ legal advisor opining that another offeror could claim full
credit for a $120 million project as long as that offeror was the prime contractor even if it had
only performed 26% of the project).
       Further, as GAO found,
       Caddell fails to provide any legal support for its implicit argument that 22 U.S.C.
       § 4852(c)(2)(D) requires that joint venture projects must be credited on a pro-
       rated basis. Without legal support for this argument, we have no basis to sustain
       the protest.

AR 384; see also Def.’s Mot. at 11; Intervenor’s Mot. at 36-37. Caddell’s attempt to import a
requirement that DOS assess the value of joint venture projects by splitting the project value
between co-ventures by “percentage of performance completed” fails. Pl.’s Mot at 16-17.
Caddell’s hypothecation of this requirement is not supported by any applicable statute,
regulation, or term of the solicitation.
       Finally, while Caddell points out that Pernix failed to list the percentage of work
performed on each project in its Statement of Qualifications, Caddell’s submission suffered from
the same infirmity. AR 11, 49. DOS reasonably exercised its discretion when it accepted both
Pernix’s and Caddell’s Statements of Qualifications as “sufficient documentation” to support
both entities’ past construction experience. AR 2, 95-96.

Similar Type and Complexity
       As for similar type and complexity, Caddell argues that that DOS erred by not
considering that the Baghdad Diplomatic Support Center built by Pernix involved temporary
“containerized housing unit” structures that lacked the “architectural features, finishes, technical

                                                15
security systems, or classified work typical in embassy construction” required to construct the
permanent units in the instant project. Pl.’s Mot. at 18.11
        While the record does indicate that there were some temporary modular features in the
Baghdad Diplomatic Support Center, there is no suggestion that these were either the only, or the
primary, facilities constructed. AR 658. Caddell characterizes the distinction between
temporary versus permanent structures as an “important aspect” in evaluating the type and
complexity of Pernix’s past construction projects, but the prequalification requirements did not,
instead listing a “new office building” as the predominant aspect of the solicited project – a
structure Pernix completed in its Baghdad Diplomatic Support Center. AR 1, 95. So too, DOS’
prequalification criteria focused on the “overall nature of the facilities” and the “physical and
technical size and demands” of the solicited project, with no mention of permanent versus
temporary structures. AR 2, 8; 48 C.F.R. § 652.236-72.
        As DOS and Pernix argue, neither the Act nor the solicitation distinguished between
temporary and permanent structures, and DOS documented in its Agency Report to GAO that the
Bagdad Diplomatic Support Center “involved significant complexity” on par with the instant
solicitation. Def.’s Mot. at 12-13. The Court agrees. Pernix submitted a detailed description of
the Baghdad Diplomatic Support Center in its Statement of Qualifications stating that Pernix was
the prime contractor and the majority partner of the joint venture awarded the contract. Further,
the type of construction was a “design-build” project valued at $120,335,028. AR 9. Pernix
described the project’s complexity in its Statement of Qualifications as:
       Facilities under construction include, but are not limited to: housing units, an
       office building, an overhead cover system for existing gym, [Morale Welfare
       Recreation Facility], and DSH Hospital facility, guard towers, water and
       wastewater treatment plants. This project was a fast track-design build, and
       included the fit-out of facilities to be used for housing, recreational, storage,
       office, and general work and maintenance areas. It was executed within an
       existing U.S. Government compound, requiring tight coordination with USG, and
       contractor personnel to ensure limited disruption to the existing facilities’
       operation. This was executed in Baghdad, Iraq with high security profile and
       extreme local logistics requirements.
Id. DOS reasonably concluded that the Baghdad Diplomatic Support Center met its
prequalification criteria because it involved the construction of an office building on a design-
build basis exceeding $120 million,” involving “significant complexity due to the security
environment and wide array of facilities included.” AR 9, 96, 288.

11
       In support of this argument, Caddell cites a document not in the AR – an unauthenticated
website print-out from Pernix’s corporate home page summarizing Pernix’s work on the
Baghdad Diplomatic Support Center. Pl.’s Mot. at 18, Ex. A. Caddell attached this print-out as
Exhibit A to its motion for judgment on the administrative record, but did not move to
supplement the AR. Because this exhibit is not in the record, the Court does not rely on it.
                                               16
                                         Conclusion
        Defendant’s Motion for Judgment upon the Administrative Record is GRANTED IN
PART, as the Court denies Caddell’s grounds of protest challenging DOS’ interpretation of the
total business volume and similar work requirements and DOS’ decision not to follow GAO’s
recommendation.
       Caddell’s remaining ground of protest on DOS’ evaluation of Pernix’s price proposal will
be addressed in a separate opinion once briefing is completed.

                                           s/Mary Ellen Coster Williams
                                           MARY ELLEN COSTER WILLIAMS
                                           Judge

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