Court Opinion

ID: 4693678
Source: CourtListenerOpinion
Date Created: 2021-06-08 15:02:15.843918+00
Date Added: 2024-06-11T08:05:24.962920
License: Public Domain

Case: 20-1703    Document: 54     Page: 1   Filed: 06/08/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

        HARMONIA HOLDINGS GROUP, LLC,
               Plaintiff-Appellant

                             v.

           UNITED STATES, ALETHIX, LLC,
                 Defendants-Appellees
                ______________________

                        2020-1703
                  ______________________

    Appeal from the United States Court of Federal Claims
 in No. 1:19-cv-01421-MBH, Senior Judge Marian Blank
 Horn.
                  ______________________

                   Decided: June 8, 2021
                  ______________________

     WALTER BRAD ENGLISH, Maynard, Cooper & Gale, PC,
 Huntsville, AL, argued for plaintiff-appellant. Also repre-
 sented by EMILY J. CHANCEY, JON DAVIDSON LEVIN,
 MICHAEL W. RICH.

     BRYAN MICHAEL BYRD, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee United States.
 Also represented by JEFFREY B. CLARK, ROBERT EDWARD
 KIRSCHMAN, JR., PATRICIA M. MCCARTHY.

    JONATHAN MICHAEL BAKER, Crowell & Moring LLP,
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 2                       HARMONIA HOLDINGS GROUP, LLC    v. US

 Washington, DC, for defendant-appellee Alethix, LLC.
 Also represented by ERIC RANSOM, ZACHARY H.
 SCHROEDER.
                ______________________

     Before LOURIE, MAYER, and O’MALLEY, Circuit Judges.
 MAYER, Circuit Judge.
     Harmonia Holdings Group, LLC (“Harmonia”) appeals
 the final judgment of the United States Court of Federal
 Claims dismissing in part and denying in part its post-
 award protest. See Harmonia Holdings Grp., LLC v.
 United States, 147 Fed. Cl. 756 (2020) (“Federal Claims De-
 cision”). For the reasons discussed below, we affirm.
                       I. BACKGROUND
     The United States Census Bureau (“Bureau” or
 “agency”) issued a request for quotations (“RFQ”) seeking
 statistical analysis system and database programming
 support services. See J.A. 10536. The RFQ stated that the
 Bureau intended to issue a time and materials task order
 which would be set aside for woman-owned small busi-
 nesses, J.A. 10531, and that contract award would be made
 on a best-value basis, considering price as well as four non-
 price factors. J.A. 10598, 10601; see also J.A. 10591–96.
     The Bureau’s technical evaluation team assigned Har-
 monia’s proposal nine strengths, no weaknesses, and two
 risks 1 under factor one, the technical factor. J.A. 11163–
 64. It assigned Harmonia strengths for its proposals to
 cross-train its development staff and to introduce an ex-
 tract, transform, and load (“ETL”) automation tool. J.A.
 11163. The agency considered these elements strengths

      1  The Bureau defined a “risk” as “[a] flaw in the pro-
 posal that increases the risk of unsuccessful contract per-
 formance.” J.A. 10907.
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 HARMONIA HOLDINGS GROUP, LLC     v. US                       3

 because they could provide efficiencies. J.A. 11163. Ac-
 cording to agency evaluators, however, while these aspects
 of Harmonia’s proposal were considered strengths, they
 also presented certain risks. J.A. 11164. Specifically, the
 evaluators expressed concern that Harmonia’s proposed
 cross-training and use of an ETL automation tool could re-
 sult in delays in contract performance. J.A. 11164.
     On September 5, 2019, the contracting officer issued an
 award decision memorandum, explaining that he found no
 meaningful differences in the proposals submitted by Har-
 monia and Alethix, LLC (“Alethix”) with respect to factors
 two, three, and four, and that the tradeoff analysis was
 therefore “rooted in the differences in strengths, weak-
 nesses, and risks for” factor one, the technical factor. J.A.
 11214. The contracting officer further stated that Alethix’s
 proposal “demonstrated significant strengths presenting
 numerous benefits to the Government” and that Alethix
 presented “strengths that go beyond the approaches and
 present greater benefits to the [Bureau] than the technical
 strengths submitted by [Harmonia and another offeror].”
 J.A. 11214–15. On September 6, 2019, the Bureau
 awarded the contract to Alethix. J.A. 11315–16.
     Harmonia then filed a protest at the Court of Federal
 Claims. Its amended complaint included three counts. See
 J.A. 66–81. Count I challenged the Bureau’s technical
 evaluation of proposals, J.A. 77–78, Count II alleged that
 the contracting officer violated 48 C.F.R. § 19.301-1(b)
 (2019) (“FAR 19.301-1(b)”) 2 by failing to refer Alethix to the
 Small Business Administration (“SBA”) for a size

     2   Although FAR 19.301-1(b) was subject to recodifi-
 cation in March 2020, we cite to the version of the regula-
 tion that was in effect during the procurement and the
 proceedings before the Court of Federal Claims.
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 determination, J.A. 78–79, and Count III challenged the
 agency’s best-value determination, J.A. 79–80.
      The Court of Federal Claims granted the government’s
 motion for judgment on the administrative record with re-
 spect to Counts I and III, concluding that Harmonia had
 failed to demonstrate that the Bureau acted arbitrarily, ca-
 priciously, or in contravention of the terms of the solicita-
 tion in evaluating proposals or in making its best-value
 determination. See Federal Claims Decision, 147 Fed. Cl.
 at 784–89. Although Harmonia argued that the Bureau
 erred in assigning it risks for its proposed cross-training of
 development staff and peer-testing of software code, the
 court determined that the agency had rationally concluded
 that despite the potential benefits of cross-training and
 peer-testing, there was a risk that contract performance
 could be delayed as a result of the implementation of such
 practices. Id. at 784–86. The court rejected, moreover,
 Harmonia’s assertion that the Bureau’s “evaluation errors
 infected the source selection decision, rendering it irra-
 tional and contrary to the [s]olicitation’s terms.” Id. at 788
 (internal quotation marks omitted).
     The court dismissed Count II of Harmonia’s amended
 complaint because it concluded that Harmonia had failed
 to exhaust its administrative remedies. Id. at 775–77. In
 the court’s view, it was without authority to consider Har-
 monia’s claim that the contracting officer violated FAR
 19.301-1(b) by failing to refer Alethix to the SBA because
 Harmonia had not availed itself of the SBA’s procedures for
 bringing a size protest. See Federal Claims Decision, 147
 Fed. Cl. at 778.
    Harmonia then filed a timely appeal to this court. We
 have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).
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                        II. DISCUSSION
                    A. Standard of Review
     “We review the grant of a motion for judgment on the
 administrative record in a bid protest action de novo.” Off.
 Design Grp. v. United States, 951 F.3d 1366, 1371 (Fed. Cir.
 2020); see XOtech, LLC v. United States, 950 F.3d 1376,
 1379 (Fed. Cir. 2020). We likewise conduct a de novo re-
 view of the grant of a motion to dismiss. See Sharifi v.
 United States, 987 F.3d 1063, 1066 (Fed. Cir. 2021); Athey
 v. United States, 908 F.3d 696, 705 (Fed. Cir. 2018). “In a
 bid protest case, the inquiry is whether the agency’s action
 was arbitrary, capricious, an abuse of discretion, or other-
 wise not in accordance with law and, if so, whether the er-
 ror is prejudicial.” Glenn Def. Marine (ASIA), PTE Ltd. v.
 United States, 720 F.3d 901, 907 (Fed. Cir. 2013) (citing 28
 U.S.C. § 1491(b)(4)).
                B. The Regulatory Framework
       Congress enacted the Small Business Act of 1953, 15
 U.S.C. §§ 631–651, in an effort to “aid, counsel, assist, and
 protect . . . the interests of small-business concerns in order
 to preserve free competitive enterprise [and] to insure that
 a fair proportion of the total purchases and contracts or
 subcontracts for property and services for the Government
 . . . be placed with small-business enterprises.”           Id.
 § 631(a); see Flexfab, L.L.C. v. United States, 424 F.3d
 1254, 1256 (Fed. Cir. 2005). To further this objective, cer-
 tain government procurements, such as the one at issue
 here, are set aside for small business concerns. See 15
 U.S.C. § 644(a); Kingdomware Techs., Inc. v. United States,
 – U.S. –, 136 S. Ct. 1969, 1973 (2016) (“In an effort to en-
 courage small businesses, Congress has mandated that
 federal agencies restrict competition for some federal con-
 tracts.”).
     The SBA is vested with authority to establish “detailed
 definitions or standards by which a business concern may
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 be determined to be a small business concern” for purposes
 of federal law. 15 U.S.C. § 632(a)(2)(A). The “SBA uses the
 North American Industry Classification System (‘NAICS’)
 to determine which entities qualify as small business con-
 cerns” and “specifies the maximum number of employees
 or maximum annual receipts which a company may have
 in order to qualify as a small business within a particular
 NAICS code.” Palladian Partners, Inc. v. United States,
 783 F.3d 1243, 1247 (Fed. Cir. 2015); see 13 C.F.R.
 § 121.201.
     An entity may, in certain circumstances, lose its status
 as a small business concern when it is affiliated with a
 large business. See 13 C.F.R. § 121.103; see also Tinton
 Falls Lodging Realty, LLC v. United States, 800 F.3d 1353,
 1361 (Fed. Cir. 2015) (“In determining affiliation, [the]
 SBA considers factors such as ownership, common man-
 agement, previous relationships with or ties to another
 concern, contractual relationships, and joint ventures be-
 tween entities.”). Of relevance here, a contractor and its
 “ostensible subcontractor” will be treated as part of a joint
 venture, and therefore affiliates, for size determination
 purposes. 13 C.F.R. § 121.103(h)(2). Pursuant to SBA reg-
 ulations, an “ostensible subcontractor” is defined as “a sub-
 contractor that is not a similarly situated entity . . . and
 performs primary and vital requirements of a contract, or
 of an order, or is a subcontractor upon which the prime con-
 tractor is unusually reliant.” Id.
       C. The Distinction Between a Size Protest and
                        a Bid Protest
     The Court of Federal Claims dismissed Count II of Har-
 monia’s amended complaint because it concluded that Har-
 monia had failed to exhaust its administrative remedies.
 See Federal Claims Decision, 147 Fed. Cl. at 775–77. In
 the court’s view, Count II stated a size protest and yet Har-
 monia had not filed a claim with the contracting officer
 seeking a size status determination from the SBA. See id.
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 HARMONIA HOLDINGS GROUP, LLC     v. US                       7

     We agree that a disappointed bidder must generally ex-
 haust its administrative remedies at the SBA before seek-
 ing judicial review of a size protest. See 13 C.F.R.
 § 121.1101(a) (explaining that an offeror may appeal a for-
 mal size determination made by an SBA Government Con-
 tracting Area Office to the SBA’s Office of Hearings and
 Appeals (“OHA”) and that “[t]he OHA appeal is an admin-
 istrative remedy that must be exhausted before judicial re-
 view of a formal size determination may be sought in a
 court”); see also Palladian Partners, 783 F.3d at 1261 (con-
 cluding that an offeror’s “failure to participate in [a] pend-
 ing OHA appeal was a failure to exhaust its administrative
 remedies”). We conclude, however, that the Court of Fed-
 eral Claims misapprehended the nature of the allegations
 recited in Count II and blurred the distinction between a
 size protest and a bid protest.
      A “size protest” refers to an administrative challenge to
 an offeror’s size which is filed with the SBA. See 13 C.F.R.
 § 121.1003 (explaining that an offeror may submit a size
 protest to the contracting officer who is required to forward
 it to the SBA for resolution); see also id. § 121.1002 (stating
 that “with the exception of size determinations for pur-
 poses of the Disaster Loan Program” the SBA “makes all
 formal size determinations”); White Hawk Grp., Inc. v.
 United States, 91 Fed. Cl. 669, 673 (2010) (explaining that
 “[a] size protest is a purely administrative claim before the
 SBA in which a small business concern competing for [a
 small business] set aside objects to the size determination
 of another offeror”). A “bid protest,” by contrast, generally
 challenges actions that an agency takes, or fails to take, in
 connection with a procurement or proposed procurement.
 See 28 U.S.C. § 1491(b)(1) (providing the Court of Federal
 Claims with “jurisdiction to render judgment on an action
 by an interested party objecting to a solicitation by a Fed-
 eral agency for bids or proposals for a proposed contract or
 to a proposed award or the award of a contract or any al-
 leged violation of statute or regulation in connection with
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 8                       HARMONIA HOLDINGS GROUP, LLC      v. US

 a procurement or a proposed procurement”); see also Off.
 Design Grp., 951 F.3d at 1371 (explaining that “[i]n a bid
 protest case” a court must “determine whether (1) the pro-
 curement official’s decision lacked a rational basis; or (2)
 the procurement procedure involved a violation of regula-
 tion or procedure” (citation and internal quotation marks
 omitted)); Sys. Application & Techs., Inc. v. United States,
 691 F.3d 1374, 1380–81 (Fed. Cir. 2012) (explaining that
 the Tucker Act’s waiver of sovereign immunity “covers a
 broad range of potential disputes arising during the course
 of the procurement process” and that “the statute grants
 jurisdiction over objections to a solicitation, objections to a
 proposed award, objections to an award, and objections re-
 lated to a statutory or regulatory violation so long as these
 objections are in connection with a procurement or pro-
 posed procurement”).
     Count II of Harmonia’s complaint did not assert a size
 protest because it did not ask the Court of Federal Claims
 to make any determination regarding whether Alethix
 qualified as a small business concern for purposes of the
 procurement at issue here. See J.A. 78–79; see also White
 Hawk, 91 Fed. Cl. at 673 (“Despite the similar label, ‘size
 protests’ bear no relation to bid protests. It is exclusively
 the function of the SBA to decide [size protests], subject to
 an administrative appeal process within the agency.”). To
 the contrary, Harmonia acknowledges that the court is
 without jurisdiction either to adjudicate a size protest in
 the first instance or to review an SBA size determination
 in the absence of an appeal to the OHA. See Brief of Ap-
 pellant 14–15. Instead, Count II of Harmonia’s complaint
 invoked the court’s broad bid protest jurisdiction by alleg-
 ing that the Bureau’s contracting officer acted in contra-
 vention of FAR 19.301-1(b) by failing to refer Alethix to the
 SBA. Simply put, because Count II did not present a direct
 challenge to Alethix’s size, but instead asked the court to
 resolve whether the contracting officer had acted in con-
 formity with applicable regulatory requirements, it stated
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 HARMONIA HOLDINGS GROUP, LLC    v. US                        9

 a bid protest rather than a size protest. Accordingly, the
 Court of Federal Claims erred in dismissing Count II for
 failure to exhaust the SBA adjudicatory procedures re-
 quired for size protests.
      That the court erroneously dismissed Count II based
 on a perceived failure to exhaust administrative remedies
 is not, however, “fatal to [its] judgment of dismissal.” Adair
 v. United States, 497 F.3d 1244, 1251 (Fed. Cir. 2007). Be-
 cause, as will be discussed more fully below, Count II fails
 to state a claim upon which relief can be granted, we affirm
 the court’s judgment of dismissal on that basis. See, e.g.,
 Taylor v. United States, 959 F.3d 1081, 1087–91 (Fed. Cir.
 2020) (affirming a judgment of dismissal but concluding
 that the dismissal should have been for failure to state a
 claim rather than for lack of subject matter jurisdiction);
 Adair, 497 F.3d at 1258 (same); Brodowy v. United States,
 482 F.3d 1370, 1376 (Fed. Cir. 2007) (same); see also Doe v.
 United States, 463 F.3d 1314, 1325 (Fed. Cir. 2006) (stating
 that although the Court of Federal Claims erred in dismiss-
 ing a “claim for lack of jurisdiction, the error was harmless
 because the claim should have been dismissed on the mer-
 its”).
            D. The Alleged Regulatory Violation
     FAR 19.301-1(b) states:
     The contracting officer shall accept an offeror’s rep-
     resentation in a specific bid or proposal that it is a
     small business unless (1) another offeror or inter-
     ested party challenges the concern’s small business
     representation or (2) the contracting officer has a
     reason to question the representation. Challenges
     of and questions concerning a specific representa-
     tion shall be referred to the SBA in accordance with
     [48 C.F.R. §] 19.302.
    Harmonia asserts that Alethix’s proposal should have
 caused the contracting officer to question whether it was
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 unduly reliant on its other-than-small subcontractor 3 and
 that the contracting officer therefore violated FAR 19.301-
 1(b) by failing to refer Alethix to the SBA for a size deter-
 mination. According to Harmonia, moreover, its allegation
 of a regulatory violation in connection with a procurement
 provided the Court of Federal Claims with jurisdiction over
 Count II of its complaint. See 28 U.S.C. § 1491(b)(1); Dis-
 tributed Sols., Inc. v. United States, 539 F.3d 1340, 1345
 n.1 (Fed. Cir. 2008) (explaining that “[a] non-frivolous alle-
 gation of a statutory or regulatory violation in connection
 with a procurement or proposed procurement is sufficient
 to establish jurisdiction” in the Court of Federal Claims).
      Harmonia further contends that it had no viable oppor-
 tunity to file its own size protest at the SBA challenging
 Alethix’s size status. The Bureau’s task order was issued
 under the Federal Supply Schedule (“FSS”) program, see
 J.A. 10531, a program that provides certain federal agen-
 cies with the ability to issue orders for products and ser-
 vices under pre-existing long-term contracts between
 commercial vendors and the General Services Administra-
 tion, see 48 C.F.R. § 8.402(a). Because the procurement
 was an FSS acquisition, and the contracting officer did not
 request a size recertification, the time period for filing an
 SBA protest challenging Alethix’s size status expired in
 July 2015, six days after Alethix was awarded its FSS con-
 tract. See 13 C.F.R. § 121.1004(a)(3)(i); see also id.
 § 121.404(a)(1). According to Harmonia, it had no reason
 to file a size protest in 2015, and filing a protest in 2019,
 after it first became aware of Alethix’s alleged ostensible
 subcontractor relationship, would have been futile since
 the SBA would have immediately dismissed the protest as
 untimely.

      3  Alethix’s subcontractor was the prime contractor
 on a related procurement. See J.A. 10085. The identity of
 this subcontractor has been designated confidential.
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     The government disagrees. It contends that Harmonia
 forfeited the right to obtain a determination regarding
 whether Alethix qualifies as a small business concern for
 purposes of this procurement because it slept on its rights.
 In this regard, while the government acknowledges that
 any size protest filed by Harmonia would have been
 deemed untimely under SBA regulations, it asserts that
 Harmonia’s “filing [of] an (albeit untimely) size protest
 with the contracting officer would not have been futile be-
 cause it could have caused either the contracting officer or
 the SBA to review Alethix’s size, which is the remedy that
 Harmonia sought in the trial court.” Brief of the United
 States 9.
     The government further asserts that a contracting of-
 ficer is entitled to rely upon an offeror’s small business rep-
 resentation and that permitting a disappointed bidder to
 assert, in a post-award bid protest before the Court of Fed-
 eral Claims, that the contracting officer should have recog-
 nized an ostensible subcontractor relationship and made a
 referral to the SBA would result in “unnecessary [and] sub-
 stantial delays in the procurement process.” Brief of the
 United States 20. It contends, moreover, that while an of-
 feror may, under certain circumstances, bring its own size
 protest contesting the size status of a competing offeror,
 FAR 19.301-1(b) does not “permit[] an offeror—who itself
 did not challenge the size representation [of the awardee]—
 to challenge the contracting officer’s failure to refer [the]
 awardee to the SBA.” Brief of the United States 22; see
 Freightliner Corp. v. Caldera, 225 F.3d 1361, 1365 (Fed.
 Cir. 2000) (“In order for a private contractor to bring suit
 against the Government for violation of a regulation, that
 regulation must exist for the benefit of the private contrac-
 tor. If, however, the regulation exists for the benefit of the
 Government, then the private contractor does not have a
 cause of action against the Government in the event that a
 contracting officer fails to comply with the regulation.” (ci-
 tations omitted)); see also Galen Med. Assocs., Inc. v.
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 United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (“Not
 every regulation is established for the benefit of bidders as
 a class, and still fewer may create enforceable rights for the
 awardee’s competitors.” (citation and internal quotation
 marks omitted)).
     In order to resolve the dispute presented here, we need
 not, and therefore do not, decide whether FAR 19.301-1(b)
 affords an offeror, such as Harmonia, that did not file its
 own size protest, the right to challenge the failure of a con-
 tracting officer to refer a competing offeror to the SBA for
 a size status determination. Even assuming arguendo that
 Harmonia has the right to mount such a challenge, Count
 II of its complaint fails to state a claim upon which relief
 can be granted. See Ashcroft v. Iqbal, 556 U.S. 662, 678
 (2009) (“To survive a motion to dismiss, a complaint must
 contain sufficient factual matter, accepted as true, to state
 a claim to relief that is plausible on its face.” (citation and
 internal quotation marks omitted)); see also U.S. Ct. Fed.
 Claims R. 12(b)(6). Even accepting all of Harmonia’s well-
 pled factual allegations as true and drawing all reasonable
 inferences in its favor, see Papasan v. Allain, 478 U.S. 265,
 283 (1986); Sharifi, 987 F.3d at 1067, its complaint does
 not contain sufficient facts to state a plausible claim that
 the contracting officer violated FAR 19.301-1(b) or other-
 wise abused his discretion by failing to refer Alethix to the
 SBA for a size status determination.
     As a preliminary matter, Harmonia points to nothing
 in the language of FAR 19.301-1(b) suggesting that a con-
 tracting officer, as a general matter, has any affirmative
 obligation to conduct an independent investigation into an
 offeror’s small business representation. See Reema Con-
 sulting Servs., Inc. v. United States, 107 Fed. Cl. 519, 531
 (2012) (concluding that there was nothing in the awardee’s
 proposal that “should have triggered an inquiry” into the
 awardee’s size status and that the contracting officer was
 not required to look beyond the proposal by consulting a
 “Central Contractor Registration” system to determine
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 HARMONIA HOLDINGS GROUP, LLC     v. US                       13

 whether the awardee met applicable size requirements).
 To the contrary, as we have previously recognized, a con-
 tracting officer is generally entitled to rely on a contractor’s
 certifications. See Per Aarsleff A/S v. United States, 829
 F.3d 1303, 1315 (Fed. Cir. 2016) (concluding that an agency
 was entitled to rely on an awardee’s certification of compli-
 ance with a solicitation’s technical requirements where
 there was nothing in the awardee’s proposal that “should
 have necessarily led the [agency] to the conclusion that”
 the awardee “could not and would not comply” with solici-
 tation requirements (citation and internal quotation marks
 omitted)); Allied Tech. Grp., Inc. v. United States, 649 F.3d
 1320, 1330 (Fed. Cir. 2011) (explaining that “[w]here an of-
 feror has certified that it meets the technical requirements
 of a proposal, the Contracting Officer is entitled to rely on
 such certification in determining whether to accept a bid”).
 An exception to this rule is when “a proposal, on its face,
 should lead an agency to the conclusion that an offeror
 could not and would not comply with the [applicable solici-
 tation requirement].” Allied, 649 F.3d at 1330 (citation and
 internal quotation marks omitted); see also Centech Grp.,
 Inc. v. United States, 554 F.3d 1029, 1039 (Fed. Cir. 2009)
 (“[A] proposal that, on its face, leads an agency to the con-
 clusion that an offeror could not and would not comply
 with” a solicitation requirement “is technically unaccepta-
 ble and may not form the basis for an award.” (citation and
 internal quotation marks omitted)).
     Second, and relatedly, because the question of whether
 an ostensible subcontractor relationship exists can only be
 resolved after a detailed assessment of numerous factors
 related to whether a prime contractor is unusually reliant
 on its subcontractor, the existence of such a relationship
 can rarely be gleaned simply by examining the face of an
 offeror’s proposal. See 13 C.F.R. § 121.103(h)(2) (explain-
 ing that in determining whether an ostensible subcontrac-
 tor relationship exists “[a]ll aspects of the relationship
 between the prime and subcontractor are considered,
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 14                      HARMONIA HOLDINGS GROUP, LLC      v. US

 including, but not limited to, the terms of the proposal
 (such as contract management, technical responsibilities,
 and the percentage of subcontracted work), agreements be-
 tween the prime and subcontractor (such as bonding assis-
 tance or the teaming agreement), and whether the
 subcontractor is the incumbent contractor and is ineligible
 to submit a proposal because it exceeds the applicable size
 standard for that solicitation”). Indeed, the United States
 Government Accountability Office has recognized that “the
 question of a prime contractor’s unusual reliance on a sub-
 contractor is . . . an intensely fact-specific inquiry that can
 be affected by a wide variety of factors” and that it is there-
 fore “not apparent, given the complexity of the analysis,
 under what circumstances such unusual reliance would be
 clear on the face of a proposal.” Kodiak Base Operations
 Servs., LLC, B-414966, 2017 WL 4863848, at *4 n.3 (Comp.
 Gen. Oct. 20, 2017); see also Ingenesis, Inc., SBA No. SIZ-
 5436, 2013 WL 393479, at *13 (Jan. 28, 2013) (“Ostensible
 subcontractor inquiries are intensely fact-specific given
 that they are based upon the specific solicitation and spe-
 cific proposal at issue.” (citation and internal quotation
 marks omitted)).
     Third, even assuming, for the sake of argument, that
 Harmonia could show that Alethix’s proposal, on its face,
 contained some suggestion of an ostensible subcontractor
 relationship, this would not suffice to establish reversible
 error in the contracting officer’s failure to refer Alethix to
 the SBA for a size status determination. It is well-settled
 that “[c]ontracting officers are entitled to exercise discre-
 tion upon a broad range of issues confronting them in the
 procurement process.” PAI Corp. v. United States, 614 F.3d
 1347, 1351 (Fed. Cir. 2010) (citation and internal quotation
 marks omitted); see Impresa Construzioni Geom. Domenico
 Garufi v. United States, 238 F.3d 1324, 1332–33 (Fed. Cir.
 2001). In order to bring a successful claim, a disappointed
 bidder must demonstrate that a contracting officer’s pro-
 curement decision or action lacked a rational basis or
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 HARMONIA HOLDINGS GROUP, LLC    v. US                     15

 constituted a “clear and prejudicial violation of applicable
 statutes or regulations.” Banknote Corp. of Am., Inc. v.
 United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (cita-
 tion and internal quotation marks omitted); see also Sa-
 vantage Fin. Servs., Inc. v. United States, 595 F.3d 1282,
 1286 (Fed. Cir. 2010) (emphasizing that procurement deci-
 sions made by contracting officers are subject to “highly
 deferential rational basis review” (citation and internal
 quotation marks omitted)). Accordingly, in order to stake
 out a claim for relief, Harmonia’s burden was not simply to
 show that Alethix’s proposal contained some suggestion of
 an ostensible subcontractor relationship, but instead that
 the indicia of such a relationship were so compelling that
 the contracting officer necessarily abused his discretion by
 failing to refer Alethix to the SBA for a size status deter-
 mination.
      The factual allegations in Harmonia’s complaint are in-
 sufficient to state a plausible claim under this standard.
 Although Alethix’s proposal indicated that it planned to
 hire several employees from its subcontractor, this does not
 mean that Alethix was the prime contractor in name only
 or that it was unusually reliant on its subcontractor. See,
 e.g., Inquiries, Inc., SBA No. SIZ-6008, 2019 WL 2710713,
 at *23 (June 3, 2019) (explaining that the ostensible sub-
 contractor rule will not be violated “even when key person-
 nel will be hired from [the subcontractor], so long as the
 individual[s] will become the prime contractor’s em-
 ployee[s] and will remain under the supervision and con-
 trol of the prime contractor”); Elevator Serv., Inc., SBA No.
 SIZ-5949, 2018 WL 4050767, at *9 (Aug. 10, 2018) (stating
 that “it is not problematic for a prime contractor to hire
 from its subcontractor, provided that personnel are re-
 viewed individually rather than unilaterally transferred or
 hired en masse”); Ingenesis, 2013 WL 393479, at *15 (con-
 cluding that the ostensible subcontractor rule was not vio-
 lated where the prime contractor planned to hire
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 16                      HARMONIA HOLDINGS GROUP, LLC     v. US

 employees from both its subcontractor and “from alternate
 sources”).
      Furthermore, given that Alethix’s proposal indicated
 that its own employee, not an employee of its subcontrac-
 tor, would act as the project manager, see J.A. 10773,
 10792, 10819, Harmonia’s assertion that Alethix intended
 for its subcontractor to manage the project is no more than
 speculation. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,
 555 (2007) (“Factual allegations must be enough to raise a
 right to relief above the speculative level.”). Harmonia
 likewise fails to provide a factual predicate for its claim
 that Alethix’s proposal gave the contracting officer reason
 to question its size representation because Alethix lacked
 relevant experience and would necessarily need to rely on
 its more experienced subcontractor to win the contract. In
 its technical proposal, Alethix indicated that it had its own
 relevant experience, see J.A. 10826, 10833, and agency
 evaluators specifically determined that Alethix’s own past
 performance on similar projects was a strength of its pro-
 posal, see J.A. 11157–58. Accordingly, because Harmonia
 does not allege facts sufficient to support a plausible claim
 that the contracting officer abused his discretion in failing
 to refer Alethix to the SBA for a size determination, Count
 II fails as a matter of law. See Ashcroft, 556 U.S. at 678–
 79; Sharifi, 987 F.3d at 1070; see also Taylor, 959 F.3d at
 1090 (dismissing a claim because, based on the allegations
 contained in the plaintiffs’ complaint, the claim could not
 “succeed as a matter of law”).
                E. The Evaluation of Proposals
     Finally, we conclude that the Court of Federal Claims
 correctly rejected Harmonia’s challenge to the agency’s
 evaluation of the offerors’ proposals. See Federal Claims
 Decision, 147 Fed. Cl. at 784–89. Harmonia asserts that
 the Bureau erred in assigning risks for its proposal to
 cross-train its staff and peer-test certain software code. See
 J.A. 11164. In Harmonia’s view, nothing in its “proposal to
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 HARMONIA HOLDINGS GROUP, LLC      v. US                       17

 cross-train its development staff and peer-test code gave
 rise to [a] risk of delay,” and “[i]t was irrational for the [Bu-
 reau] to conclude otherwise.” Brief of Appellant 32. Har-
 monia further asserts that the agency erred in assigning a
 risk for its proposed use of an ETL automation tool, stating
 that it proposed to use an ETL tool generally, but did not
 bind itself to a specific tool.
       Our role in reviewing procurement decisions, however,
 is not to evaluate the offerors’ proposals anew or to substi-
 tute our judgment for that of the agency. See, e.g., E.W.
 Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996)
 (explaining that “technical ratings . . . in [a] procurement
 . . . involve discretionary determinations of procurement
 officials that a court will not second guess”). Harmonia
 fails to establish that the Bureau acted arbitrarily, capri-
 ciously, or contrary to the terms of the solicitation when it
 determined that while Harmonia’s proposed cross-training
 of staff and peer-testing of code had certain potential ad-
 vantages, they also had potential disadvantages. See J.A.
 11163–64. In this regard, the Bureau reasonably deter-
 mined that both cross-training and peer-testing “could
 cause delays in delivery of software.” J.A. 11164.
       Under the circumstances presented here, moreover, we
 conclude that the Bureau had a reasonable basis for deter-
 mining that a single element of an offeror’s proposal—such
 as cross-training or peer-testing—could constitute both a
 strength and a potential risk. See Federal Claims Decision,
 147 Fed. Cl. at 785 (explaining that “it appears reasonable
 . . . that the same proposal could have benefits, but also
 pose some risk, as the [Bureau] appeared to see the benefit
 if cross-training would eliminate single points of failure/de-
 pendencies on individuals and make the overall team . . .
 more efficient in responding to inquiries and issues, but
 also the risk if it could cause delays in delivery of software”
 (internal quotation marks omitted)). Furthermore, while
 Harmonia alleges that the Bureau misinterpreted its pro-
 posal to require peer-testing of third-party code, rather
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 18                      HARMONIA HOLDINGS GROUP, LLC     v. US

 than Harmonia’s own code, and mistakenly assumed that
 Harmonia would use the specific ETL automation tool
 named in its proposal, it points to no persuasive evidence
 showing that it was competitively prejudiced by these al-
 leged errors. See, e.g., Glenn, 720 F.3d at 908 (“Ultimately,
 to prevail in a bid protest, the protestor must show preju-
 dicial error.”). As the Court of Federal Claims correctly rec-
 ognized, the Bureau was consistent in its approach to the
 offerors’ proposals, see Federal Claims Decision, 147 Fed.
 Cl. at 785, and Alethix also received both a strength and a
 risk for its proposed use of cross-training and peer-testing,
 see J.A. 11156–57.
      Harmonia likewise fails to show that the Bureau erred
 in concluding that Alethix’s proposal represented the best
 value for the agency. See J.A. 11211–16; see also Galen,
 369 F.3d at 1330 (explaining that when a contract is “to be
 awarded based on ‘best value,’ the contracting officer ha[s]
 even greater discretion than if the contract [is to be]
 awarded on the basis of cost alone”). In this regard, the
 solicitation specifically stated that the agency was “more
 concerned with obtaining superior technical and manage-
 ment capabilities than with making an award at the lowest
 overall cost.” J.A. 10076; see also J.A. 10073. There is no
 dispute that the total estimated price reflected in Harmo-
 nia’s proposal was somewhat lower than that reflected in
 Alethix’s proposal. J.A. 11213. Harmonia fails to identify
 any reversible error, however, in the Bureau’s conclusion
 that Alethix’s proposal represented the best value because
 it “proposed numerous innovations to improve efficiencies
 and successfully meet [solicitation] requirements” and the
 other offerors were “unable to match these significant
 strengths and correlating benefits to the [agency].” J.A.
 11215. We have considered the parties’ remaining argu-
 ments but do not find them persuasive.
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 HARMONIA HOLDINGS GROUP, LLC   v. US                   19

                     III. CONCLUSION
     Accordingly, the judgment of the United States Court
 of Federal Claims is affirmed.
                      AFFIRMED
                          COSTS
 No costs.