Court Opinion

ID: 4036178
Source: CourtListenerOpinion
Date Created: 2016-09-22 20:03:45.534769+00
Date Added: 2024-06-11T14:29:37.578589
License: Public Domain

United States Court of Federal Claims
                                          No. 16-671 C
                                    (Filed: August 26, 2016)
                                 Reissued: September 22, 20161

                                              )
    DELLEW CORPORATION,                       )
                                              )
                    Plaintiff,                )
                                              )
    v.                                        )
                                              )
    THE UNITED STATES,                        )
                                              )
                                                     Bid Protest
                   Defendant                  )
                                              )
          and                                 )
                                              )
    TECH SYSTEMS, INC.,                       )
                                              )
                   Defendant-Intervenor.      )
                                              )
                                              )

Adam Kamlot Laskey, Oles, Morrison, Rinker, & Baker, L.L.P., Seattle, WA, attorney for
plaintiff.
Erin Kathleen Murdock-Park, United States Department of Justice, Civil Division, Commercial
Litigation Branch, Washington, DC, attorney for defendant.
Eric Scott Crusius, Miles & Stockbridge, P.C., Tysons Corner, VA, attorney for defendant-
intervenor.
                                   OPINION AND ORDER
SMITH, Senior Judge

         This bid protest arises out of the problem at the very core of procurement law. We do
not trust the discretion of procurement officials or contractors, but we cannot make rational
procurement decisions without that discretion. This dispute occurs at the border where the law
and regulations set up a check point of objective criteria. These are designed to eliminate and

1
 An unredacted version of this opinion was issued under seal on August 26, 2016. The parties
were given an opportunity to propose redactions, and those redactions are reflected herein.
contain that untrustworthy and unquantifiable discretion. Objective decisions are so much easier
and honest, but discretion breaks through our border against the nonobjective. It breaks through
for one reason. It is needed, and it is essential in matching the objective facts of offerors’
proposals with the circumstances and purposes of each specific government procurement.

          This problem is particularly emphasized here because the defendant-intervenor’s narrow
margin of victory over the plaintiff appears to be the result of a few factors where discretion
played the key role. In this stylized almost ritualistic version of the private procurement world,
gut instincts are to be suppressed. Procedures are designed as much to limit the discretion of
contracting officers as to obtain the best product for the government. The scheme that has been
created inevitably leads to procurement decisions that, on a number of occasions, lack
transparency. Despite this, the Court must decide bid protests as they arise. In this case, the
Contracting Officer could have reasonably awarded the contract to either Dellew or TSI, but he
ultimately awarded the procurement to TSI. The Court, however, cannot overturn this decision,
as it is clear that the Contracting Officer acted within the zone of reason and within the bounds of
his discretion in making this close call. It was not arbitrary and capricious or an abuse of
discretion based upon the facts available in the Administrative Record.

        This post-award bid protest comes before the Court on the parties’ cross-motions for
judgment on the Administrative Record. Plaintiff, Dellew Corporation (“Dellew”), challenges
the United States Army Contracting Command – Rock Island’s (the “Agency”) Solicitation No.
W52P1J-13-R-0038 (“Solicitation,” “Request for Proposals,” or “RFP”). Plaintiff alleges that
the Agency failed to follow the RFP’s stated evaluation criteria and applicable procurement law
in evaluating past performance, and it failed to perform and/or document an adequate cost
realism analysis. Plaintiff requests that the Court declare that (1) the award of the contract to TSI
was arbitrary, capricious, and contrary to law and the terms of the RFP; (2) the contract awarded
to TSI must be terminated for convenience; and (3) the Agency be directed to reevaluate
proposals in accordance with the RFP criteria and the FAR, and award the contract to the offeror
that represents the best value. For the reasons explained below, plaintiff’s motion for judgment
on the Administrative Record is denied, and defendant and defendant-intervenors’ cross-motions
for judgment on the Administrative Record are granted.

   I. Factual and Procedural History

        On or about September 27, 2013, the Agency issued Solicitation No. W52P1J-13-R-0038
for logistical support services at Schofield Barracks, Hawaii. Amended Complaint (hereinafter
“Am. Compl.”) at 3. The RFP was issued as a set-aside for small business Basic Ordering
Agreement (“BOA”) holders in the Agency’s Enhanced Army Global Enterprise (“EAGLE”)
program. Id. at 4. The RFP contemplated the award of “a single combination Cost Plus Fixed
Fee (“CPFF”) contract with a Firm Fixed Price CLIN (“Transition CLIN”) task order with a 60-
day transition period, one (1) ten (10) month base period and four (4) one (1) year options.” Id.
The fixed price portion was only applicable to the transition period, and the remainder of the
contract was CPFF. Id.

                                                 2
        The RFP evaluated proposals in three phases. In Phase 1, the Agency made sure the
offeror had the required facility security clearance. Id. In Phase 2, offerors’ technical proposals
were evaluated on an Acceptable/Unacceptable basis. Id. In Phase 3, offers were evaluated on
Past Performance and Cost/Price factors. Id. The Agency then conducted a best value tradeoff
analysis. Id. According to the RFP, the total evaluated price must include the total of an
offeror’s proposed price for the base period, four subsequent option periods plus one-half of the
fourth option, and any identified probable cost adjustments resulting from the Agency’s cost
realism analysis. Id. The RFP stated that the “Firm Fixed Price and Cost Proposals will be
evaluated on price analysis and cost realism IAW FAR 15.404-1, Proposal Analysis
Techniques.” Id. at 4-5. The RFP also required each offeror (and its major
subcontractors/teammates) to provide historical and budgeted indirect rate data for several items
including overhead, general and administrative (“G&A”) expenses, and fringe benefit costs. Id.

         In response to the RFP, the Agency received proposals from 21 offerors. Id. at 5.
Fourteen offerors made it to Phase 2. Id. Six offerors made it to Phase 3, including Dellew and
TSI. Id. The Agency then engaged in discussions with the remaining offerors. Id. During
discussions, Dellew agreed to cap its G&A rates for the duration of the contract. Id. In its
discussions with TSI, the Agency asked TSI to cap its G&A rates twice, to which TSI refused.
Id. at 6.

        On or about October 27, 2014, the Agency completed its cost/price evaluation of
proposals, including a cost realism analysis. Id. at 7. As part of the analysis, the Agency
considered the realism of each offerors’ indirect rates, including G&A rates. Id. The Agency’s
Cost/Price Team (“CPT”) performed the analysis. Id. The Source Selection Evaluation Board
(“SSEB”), the Source Selection Advisory Council (“SSAC”), and the Source Selection Authority
(“SSA”) “fully relied” on the CPT’s cost realism analysis. Id. at 8. Based on total evaluated
prices, TSI was the lowest priced technically acceptable offeror (***), and Dellew was the
second lowest priced technically acceptable offeror (***). Id. TSI and Dellew were both rated
Substantial Confidence on the past performance factor. Id.

         On November 14, 2014, the Agency accepted TSI’s final proposal and sent TSI an award
package which included a contract. Id. at 8-9. The contract included a cap on TSI’s G&A rate.
Id. at 9. TSI objected to the inclusion of the G&A rate cap in the contract. Id. The Agency
informed TSI that it would lose the award unless TSI agreed to cap the G&A rate. Id. TSI
signed the contract. Id.

        On November 24, 2014, Dellew filed a protest with the Government Accountability
Office (“GAO”) challenging the award of the contract to TSI. Id. Dellew argued the contract to
TSI was improper because: (1) TSI refused to cap its proposed G&A rates despite the
requirement in the RFP; (2) the contract award materially differed from the proposal TSI
submitted; and (3) the Agency failed to perform an adequate cost realism analysis. Id. at 9.
GAO denied Dellew’s protest. Id. On March 11, 2015, Dellew filed a bid protest action in this

                                                 3
Court (No. 15-251C) challenging the award to TSI based on the same reasons asserted at GAO.
Id. at 10. Counsel for the Agency contacted Dellew two weeks later and stated that the Agency
was taking voluntary corrective action in response to Dellew’s protest. Id. The Agency
terminated the contract for convenience on April 3, 2015, and, as a result, the Court dismissed
the case as moot. Id.

         After taking corrective action, the Agency notified Dellew on July 16, 2015, that it again
awarded the contract to TSI. Id. On July 30, 2015, Dellew filed a post-award bid protest
challenging the award to TSI (No. 15-808C) based on the same or similar arguments it raised in
its earlier protests. Id. at 11. The Court heard oral argument on the parties’ cross-motions for
judgment on the Administrative Record on October 22, 2015. Id. at 12. The Agency again
decided to take voluntary corrective action. Id. Specifically, the Agency stated that it would:

       (1) Terminate for convenience the award to TSI; (2) amend the RFP to reflect a
       change in conditions that has occurred since the last amendment to the RFP, and
       clarify § L.5.4.2.7.5(d) of the RFP, which sets forth the requirements governing
       the capping of an offeror’s indirect rates; (3) reopen discussions and request full
       revised technical and costs proposals from the final six offerors; (4) require
       offerors and their subcontractors to confirm that their indirect rates are capped, or
       to verify their understanding that the Army will cap their indirect rates at those
       listed in their proposals, if meeting the conditions in § L.5.4.2.7.5(d) of the RFP;
       (5) conduct a new cost realism analysis of the offerors and their subcontractors;
       and (6) make a new best value determination and award the contract accordingly.

See Dellew Corp. v. United States, 124 Fed. Cl. 429, 430 (2015).

        The Court dismissed Dellew’s protest as moot again. See Id. at 432. On May 5, 2016,
the Court issued an opinion and order awarding Dellew its attorneys’ fees and expenses incurred
in the second COFC protest pursuant to the Equal Access to Justice Act. Id. at 13. On
November 13, 2015, the Agency took corrective action and terminated for convenience the
contract award to TSI. Id. The Agency then amended the RFP and re-opened discussions with
six offerors that had been in the most recent competitive range, including Dellew and TSI. Id.
The corrective actions taken by the Agency included material changes to the scope of work. Id.
In response to the changes, Dellew submitted a new proposal. Id.

        On May 24, 2016, the Agency awarded the contract to TSI again. Id. at 14. The Agency
provided Dellew with a written debriefing explaining that both TSI and Dellew had been rated
Acceptable on the Technical Factor and Substantial Confidence on the Past Performance factor.
Id. The Agency also informed Dellew that no cost realism adjustments had been made to either
TSI or Dellew’s proposed price. Id. Both Dellew’s and TSI’s proposals were rated equally on
the non-price factors. Id. Dellew’s total evaluated price was lower than TSI’s. Id. The Agency
stated that it chose TSI on the grounds that “it was determined that Tech System’s Inc. (TSI)’s
proposal offered the best value to the Government.” Id. Dellew also requested an oral

                                                 4
debriefing in which the Agency explained that it had “slightly” more confidence in TSI because
Dellew lacked recent and relevant past performance in the area of transportation. Id. at 14-15.

       This complaint followed, challenging the Agency’s failure to follow the RFP’s stated
evaluation criteria and applicable procurement law in the evaluation of past performance and the
Agency’s failure to perform and/or document an adequate cost realism analysis.

II.     Discussion

       A. Standard of Review

        This Court’s jurisdictional grant is found primarily in the Tucker Act, which provides the
Court of Federal Claims the power “to render any judgment upon any claim against the United
States founded either upon the Constitution, or any Act of Congress or any regulation of an
executive department, or upon any express or implied contract with the United States . . . in cases
not sounding in tort.” 28 U.S.C. § 1491(a)(1). This Court has jurisdiction over bid protest
actions 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)). Under Rule 52.1 of the Rules of
the Court of Federal Claims, the parties are limited to the Administrative Record, 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 Administrative Record, the Court must determine whether a party has met its
burden of proof based on the evidence in the record. Id. at 1355.

        Standing in bid protests is framed by 28 U.S.C. § 1491(b)(1) which requires the bid
protest to be brought by an “interested party.” A protestor is an “interested party” if it is an “(1)
actual or prospective bidder and (2) possess[es] the requisite direct economic interest.” Weeks
Marine, Inc., v. United States, 575 F.3d 1359 (Fed. Cir. 2009) (citing Rex Serv. Corp. v. United
States, 448 F.3d 1305, 1308 (Fed. Cir. 2006)). “To prove a direct economic interest as a putative
prospective bidder, [the bidder] is required to establish that it had a ‘substantial chance’ of
receiving the contract.” Id.; see also Info. Tech. & Appl. v. United States, 316 F.3d 1312, 1319
(Fed. Cir. 2003) (“To establish prejudice, [the protestor] must show that there was a ‘substantial
chance’ it would have received the contract award but for the alleged error in the procurement
process.”); see also Statistica, Inc. v. Christopher, 102 F.3d 1577, 1580 (Fed. Cir. 1996). The
nature of the protest will dictate the necessary factors for a “direct economic interest.” Sys. Appl.
& Techs. v. United States, 691 F.3d 1374, 1382 (Fed. Cir. 2012).

       B. Past Performance

        In analyzing offerors’ bids, the Agency conducted a past performance evaluation. Dellew
argues that the Agency was defective in its evaluation of past performance in the following four
ways: (1) the Agency failed to give Dellew credit for the transportation experience of its partner,

                                                 5
***; (2) the Agency was unreasonable in its conclusion that Dellew’s incumbent subcontract was
not relevant; (3) the Agency unreasonably concluded that TSI’s *** subcontract was relevant;
and (4) the Agency was unreasonable in crediting TSI with past performance of an affiliate of its
subcontractor, ***. Plaintiff’s Motion for Judgment on the Administrative Record (hereinafter
“P’s MJAR”) at 25-30.

       The most persuasive of these complaints is plaintiff’s argument regarding ***’s
transportation past performance. Plaintiff alleges that the Agency unreasonably failed to credit
Dellew with ***’s transportation experience. Id. at 25. Dellew argues that it was only credited
with ***’s Maintenance and Supply experience, despite the fact that ***’s Contract ***
purportedly included transportation. See Administrative Record page (hereinafter “AR”) 16785.
Essentially, plaintiff argues that, because the cost of the contract exceeded $640,000, the Agency
should have considered it relevant transportation experience during its past performance
evaluation. See P’s MJAR at 25-26; see also AR 16785.

        Both Dellew and TSI received the highest rating in the maintenance and supply
categories of past performance. However, unlike TSI, which also received the highest rating in
the transportation prong of past performance, Dellew only received a neutral rating on the
transportation factor. This Court agrees, based on the Administrative Record and the rules
governing the evaluation past performance, that the plaintiff should have received credit for
***’s transportation past performance. However, this Court also agrees with defendant’s
assertion that the Agency’s failure to credit Dellew with ***’s past performance did not
prejudice Dellew. Defendant’s Cross-Motion for Judgment on the Administrative Record
(hereinafter “D’s CMJAR”) at 23. ***’s transportation past performance only amounted to $5.6
million, while TSI’s transportation past performance totaled around $251,262,732. AR 16785;
AR 4287-90.

        The Army indicated that it had more confidence in TSI’s ability to perform under the
contract due to its extensive transportation experience. AR 10282. The government is not
required to accept the lower bid in procurement contracts. The FAR provides that “[t]he
perceived benefits of the higher proposal shall merit the additional cost.” FAR 15.101-1(c).
While the government is required to document their rationale for those tradeoffs, an Agency is
not required to provide an exact quantification of the non-cost factors in its tradeoff. FAR 15-
308; see also Glenn Def. Marine Asia v. United States, 105 Fed. Cl. 541, 582 (2012).
Furthermore, best-value tradeoff decisions “will be upheld unless the protestor can show that the
agency’s action was without rational basis.” Impressa, 238 F.3d at 1333. This standard gives
discretion to the Agency.

               [T]his court must defer to [the agency’s] decision absent a showing that
               the [agency’s] evaluation was arbitrary, capricious, or contrary to law.
               But that is not all. The standard becomes more deferential when dealing
               with a negotiated procurement such as the one in this case. And when a

                                                6
               procurement involves performance standards, which is what this court also
               faces, a court must grant even more deference to the evaluator’s decision.

Overstreet Elec. Co. v. United States, 59 Fed. Cl. 99, 117 (2003).

       The ultimate question here is whether the government could consider the amount of
Transportation experience when evaluating the plaintiff’s ability to perform the contract. This is
where discretion and objective criteria intersect. If this were a nongovernmental procurement,
the answer would be simple: of course, more experience is preferred when evaluating the past
performance of a potential contractor. Dollars, in this context, are a fairly good measure of a
potential contractors’ amount of experience. As such, despite the fact that Dellew should have
been given credit for ***’s transportation past performance, this Court does not find that plaintiff
was prejudiced by its exclusion.

       C. Cost Realism Analysis

        This procurement is a cost reimbursement contract. In analyzing solicitations for cost
reimbursement contracts, the Agency must undertake a cost realism analysis. The FAR requires
an agency to “independently review[] and evaluate[e] specific elements of each offeror’s
proposed cost estimate to determine whether the estimated proposed cost elements are realistic
for the work to be performed.” FAR 15.404-1(d)(1). Further, “[a]gencies are required to do
more than merely state that a cost realism analysis was performed.” A-T Solutions, Inc. v. United
States, 122 Fed. Cl. 170, 180 (2015) (citing Cohen Fin. Servs., Inc. v. United States, 110 Fed. Cl.
267, 286-87 (2013)). For a cost realism analysis to be rational, the Agency must “make a good
faith effort to consider material facts that a reasonably prudent person would consider relevant to
the procurement decision, and cannot be ‘tainted by irrational assumptions or critical
miscalculations.’” United Payors & United Providers Health Servs. v. United States, 55 Fed. Cl.
323, 330 (citing OMV Med., Inc. v. United States, 219 F.3d 1337, 1344 (Fed. Cir. 2000));
Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272, 286 (2007). Despite plaintiff’s arguments,
this Court finds that the Agency’s cost realism analysis was rational.

       Plaintiff argues that the Agency failed to perform an adequate cost realism analysis in the
following three ways: (1) the Agency did not adequately conduct a cost realism analysis
regarding TSI’s proposed direct labor rates; (2) the Agency failed to adequately conduct a cost
realism analysis regarding TSI’s proposed G&A rate; and (3) the conflicting information
concerning ***’s overhead rate should have rendered TSI’s proposal unacceptable. P’s MJAR at
32-39. This Court does not find these arguments persuasive. The Agency conducted its cost
realism analysis without violating the basic principles of cost analysis, without bias, and with
reasonably reliable data.

                                                 7
               1. Direct Labor Rates

        Plaintiff’s argument that the Agency failed to adequately conduct a cost realism analysis
regarding TSI’s direct labor rates is two-pronged. The first part of this argument posits that the
Agency unreasonably relied on the inapplicable salary reference data submitted by TSI for
proposed exempt labor wage rates. Id. at 32. TSI used wage data from Salary.com in its
proposal. Plaintiff alleges that this data was inapplicable for three reasons. First, plaintiff
contends that the data used was stale because the data reflected 2014 numbers, and the contract
period was set to begin in July 2016. Id. at 33. Second, plaintiff alleges that TSI’s Salary.com
data was inapplicable because applied to Hawaii National Park instead of Schofield Barracks
(“SBHI”), which is located 200 miles away from the national park. Id. Third, plaintiff argues
that TSI’s data was misleading because TSI only provided “base salary” data but excluded
vacation and holiday pay. Id. Plaintiff posits that, taken together, these deficiencies result in an
unrealistic wage data figure, and, in order to achieve an accurate cost realism analysis, the
Agency should have upwardly adjusted TSI’s total proposal approximately ***. Id. at 34-35.

        Both defendant and defendant-intervenor argue that the Salary.com data was realistic.
First, defendant-intervenor points out that TSI was not required to submit 2016 salary data.
Defendant-Intervenor’s Cross Motion for Judgment on the Administrative Record (hereinafter
DI’s CMJAR) at. 9. The initial proposals were due on November 25, 2013. AR 71. After a
number of discussions, TSI submitted its final proposal revision on October 6, 2014, citing to
Salary.com wage data from May 28, 2014. DI’s CMJAR at 9-10. Although proposals have been
revised since that date, none of the revisions were required to update their wage data. Id. at 10.
Additionally, defendant-intervenor highlights the fact that plaintiff made the assertion that TSI’s
wage data was stale without providing any evidence of what the numbers should be. Id. at 11.
This argument is again repeated in regards to plaintiff’s allegations that the use of Hawaii
National Park data was unreasonable. Id. at 12. Finally, regarding the alleged exclusion of
holiday and vacation pay from TSI’s wage rates, defendant-intervenor points to the Agency’s
statement that “[t]he analyst reviewed the assumptions accompanying the proposed exempt
hourly rates, and the calculations provided by TSI and since all exempt hourly rates were
provided within the 50% median from Salary.com and supported, no adjustments were required
for the proposed exempt rates.” AR 15263.

         The second prong of plaintiff’s argument alleges that the Agency failed to examine
whether TSI’s proposed wage rate for its system administrator position was realistic, despite the
fact that it was misclassified as a non-exempt Service Contract Act (“SCA”) employee position.
P’s MJAR at 35. Plaintiff argues that, in order for the Agency to perform an accurate side-by-
side comparison of the offerors, TSI should have included the systems administrator position as a
non-exempt SCA employee. Id. As TSI neglected to include the systems administrator position
in the non-exempt category, plaintiff contends that the proposed wage was unrealistically low for
that position. Id. at 36. As a result, plaintiff posits that TSI’s total proposed cost was *** lower
than it realistically should have been. Id.

                                                  8
        The FAR requires that employees be paid not less than the minimum wage and receive
fringe benefits. FAR 52.222-41(c). For non-exempt employees, offerors are required to pay at
least the minimum wage and fringe benefits. FAR 52.222-41(c)(2). The systems administrator
position was classified under SCA wage code 14043, and allotted an hourly wage rate of $22.80.
AR 13719, 12754. As this wage rate meets the minimum required by SCA 14043, the wage
proposal is satisfactory. Further, we agree with defendant’s assertion that the exclusion from the
side-by-side comparison does not demonstrate a lack Agency review. D’s CMJAR at 38. The
Agency has demonstrated that it “considered the information available and did not make
‘irrational assumptions or critical miscalculations.” Westech Int’l, 79 Fed. Cl. At 286. To
require more would be infringing on the Agency’s discretion in analyzing proposals for cost
realism.

               2. G&A Rates

         In addition to its arguments regarding TSI’s direct labor rates, plaintiff alleges that the
Agency failed to adequately conduct or document a cost realism analysis regarding TSI’s G&A
rates. P’s MJAR at 36. Plaintiff contends that TSI’s G&A rates were “significantly lower” than
its historic rates, despite the Agency’s determination that TSI’s proposed rates “appear to be
correct and realistic.” Id. at 36-37. Ignoring that determination, plaintiff alleges that the lack of
adequate cost realism analysis of TSI’s G&A rates “creates a substantial risk that TSI’s actual
cost of performance is unknown.” Id. at 37.

        Again this Court must reiterate that cost realism analyses are “within the agency’s ‘sound
discretion and expertise,’ [and] the Court will not overturn a cost realism determination unless
the plaintiff demonstrates the absence of a rational basis for the agency’s discretion.” A-T
Solutions, 122 Fed. Cl. 180. TSI provided evidence to support its original contention that G&A
rates would be lower in the future than they had been in years past. For example, in 2012, TSI
incurred nearly *** in unexpected and unusual legal fees. AR 13757. Additionally, TSI
documented its reasons for lowered G&A rates, and the Agency “reviewed the [] narrative as
compared to TSI’s proposal and found that the narrative reflected its proposed rate data.” AR
15272. As such, TSI’s G&A rates were not irrational or unreasonable.

               3. ***’s Overhead Rate

        Third, plaintiff argues that *** submitted conflicting information regarding the
calculation and application of its overhead rate, which prevented an accurate cost realism
analysis. P’s MJAR at 38. As a result of this ambiguity, plaintiff posits that “a meaningful cost
realism analysis cannot be performed, [and] TSI’s proposal must be rejected.” Id. In making
this contention, plaintiff points to the FAR, which states that a cost realism analysis must include
reasonable “judgment to determine how well the proposed costs represent what the cost of the
contract should be.” FAR 15.404-1(c)(1).

                                                  9
         Once again, it is important to note that “[i]t is unnecessary for an agency to demonstrate
that a required cost realism analysis was conducted with ‘impeccable rigor.’” A-T Solutions, 122
Fed. Cl. at 180. The Agency was not confused by TSI’s interchangeable use of “total annual
labor costs” and “total direct labor costs.” D’s CMJAR at 43. As such, it was reasonable for the
Agency to proceed with its cost realism analysis without specifically addressing this alleged
ambiguity, and the cost realism analysis was rational despite TSI’s word choice.

       D. Prejudice

        As noted earlier, this bid protest turns on the problem at the core of procurement law:
how can we navigate the delicate balance between our distrust of an Agency’s discretion and our
inability to make rational procurement decisions without that discretion? This dispute occurs at
the intersection where the law and regulations have created objective criteria designed to
eliminate discretion, but where the same discretion is essential to reconcile the specific facts and
circumstances of a solicitation to the Agency’s needs when making the award. This is
highlighted here because TSI was awarded the contract by a very narrow margin, and that award
turned on the Agency’s discretion. In this case, the purely objective facts were inconclusive as to
what was the best deal for the government.

        Plaintiff contends that it was prejudiced by the errors the Agency made in awarding the
contract to TSI. According to Dellew’s view, but for the errors committed during the
procurement process, “there is a substantial chance that Dellew would have been deemed best
value and awarded the contract.” P’s MJAR at 39-49. Plaintiff points to the alleged errors made
in evaluating past performance and analyzing cost realism to support this contention. Id. at 40-
41. This Court does not agree that prejudice exists here.

        This protest exists in a stylized, almost ritualistic version of the private procurement
world, in which regulations were designed to limit the discretion of contracting officers without
sacrificing the government’s need to obtain the best product available. Discretion must have a
role, or agencies would be forced to base their procurement decisions on the actual bid price
alone. This Court finds that the Contracting Officer rationally exercised his discretion in
awarding the contract to TSI, and that decision was neither arbitrary nor capricious. It violated
no law or regulation that was raised during this bid protest. While, like all procurement
decisions, this award was certainly not perfect, as witnessed by its history, the factual and
procedural history support a finding that this award did not violate any rules or any notions of
fairness among bidders.

III.    Conclusion

        For the reasons set forth above, plaintiff’s MOTION for Injunctive and Declaratory
Relief is DENIED. Additionally, defendant and defendant-intervenor’s CROSS-MOTIONS for
Judgment on the Administrative Record are GRANTED. The Clerk is directed to enter judgment

                                                10
on the Administrative Record in favor of defendant and defendant-intervenor, consistent with
this Opinion.2

IT IS SO ORDERED.

                                                      s/   Loren A. Smith
                                                   Loren A. Smith,
                                                   Senior Judge

2
  This opinion shall be unsealed, as issued, after September 9, 2016, unless the parties identify
protected and/or privileged materials subject to redaction prior to that date. Said materials shall
be identified with specificity, both in terms of the language to be redacted and the reasons
therefor.
                                                 11