Court Opinion

ID: 4644644
Source: CourtListenerOpinion
Date Created: 2020-12-18 16:00:47.682642+00
Date Added: 2024-06-11T08:00:47.077616
License: Public Domain

Case: 19-2449    Document: 77     Page: 1    Filed: 12/18/2020

         NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

            RED CEDAR HARMONIA, LLC,
                 Plaintiff-Appellant

                             v.

 UNITED STATES, NEXTGEN FEDERAL SYSTEMS,
                     LLC,
             Defendants-Appellees
            ______________________

                        2019-2449
                  ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:19-cv-00405-CFL, Senior Judge Charles F. Lettow.
                   ______________________

                Decided: December 18, 2020
                  ______________________

    WALTER BRAD ENGLISH, Maynard, Cooper & Gale, PC,
 Huntsville, AL, for plaintiff-appellant. Also represented by
 EMILY J. CHANCEY, MICHAEL W. RICH.

     SONIA W. MURPHY, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, for defendant-appellee United States. Also
 represented by JEFFREY B. CLARK, STEVEN JOHN
 GILLINGHAM, ROBERT EDWARD KIRSCHMAN, JR.
Case: 19-2449    Document: 77      Page: 2    Filed: 12/18/2020

2                  RED CEDAR HARMONIA, LLC   v. UNITED STATES

     CHE PETER DUNGAN, Miles & Stockbridge P.C., Wash-
 ington, DC, for defendant-appellee NextGen Federal Sys-
 tems, LLC. Also represented by ALFRED M. WURGLITZ,
 Rockville, MD.
                  ______________________

    Before PROST, Chief Judge, MOORE and STOLL, Circuit
                          Judges.
 MOORE, Circuit Judge.
     Red Cedar Harmonia, LLC, appeals a final decision of
 the United States Court of Federal Claims granting the
 government and NextGen Federal Systems, LLC, judg-
 ment on the administrative record regarding the govern-
 ment’s contract award to NextGen. Red Cedar Harmonia,
 LLC v. United States, 144 Fed. Cl. 11, 29 (2019). Because
 the government’s contract award was not arbitrary, capri-
 cious, an abuse of discretion, or otherwise not in accordance
 with law, we affirm.
                        BACKGROUND
      The Defense Information Systems Agency (the agency)
 issued a solicitation for independent verification and vali-
 dation of software across four major agency command and
 control programs. J.A. 100034. The solicitation included
 three evaluation factors: (1) Technical/Management Ap-
 proach; (2) Past Performance; and (3) Price. J.A. 100164.
 The Technical/Management Approach factor included six
 subfactors: (1) security clearance requirements; (2) tech-
 nical approach to test execution; (3) technical approach to
 test event build support; (4) technical approach to cyberse-
 curity and information compliance; (5) technical approach
 to test process improvements and test automation support;
 and (6) management/staffing approach. Id. As relevant
 here, subfactor three was evaluated based on the offerors’
 proposed approaches to perform independent verification
 and validation on multiple system builds. J.A. 100166.
 Subfactor six focused on offerors’ respective abilities to
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 RED CEDAR HARMONIA, LLC   v. UNITED STATES                 3

 staff and manage the tasks identified in the solicitation.
 J.A. 100167.
     The agency received initial proposals from five offerors.
 After three offerors were excluded, the agency established
 a competitive range including the two remaining offerors:
 NextGen and Red Cedar. J.A. 102539–40. During its ini-
 tial analysis, the agency found two weaknesses with
 NextGen’s management/staffing approach (subfactor six),
 including weaknesses in the hours NextGen proposed for
 thirty-eight labor positions, and four weaknesses with Red
 Cedar’s approach, including weaknesses in the hours Red
 Cedar proposed for fifty-eight positions. J.A. 102511–18
 (NextGen), 102530–37 (Red Cedar). The contracting officer
 issued evaluation notices to NextGen and Red Cedar to ad-
 dress these weaknesses. J.A. 102563–102568 (NextGen),
 102574–84 (Red Cedar).
      After another round of proposals and evaluation no-
 tices, NextGen and Red Cedar submitted their final pro-
 posals. The agency found weaknesses in Red Cedar’s
 proposed hours for thirty-seven positions under subfactor
 six. J.A. 105164–105185. The agency revised Red Cedar’s
 final proposal, noting that Red Cedar’s approach appeared
 low for the demands of the contract and increasing the pro-
 posed hours across a number of positions. J.A. 105405–15.
 After adjustments, the agency found that NextGen’s total
 proposed cost was equal to the agency’s total probable cost,
 whereas Red Cedar’s total proposed cost varied from the
 agency’s total probable cost by 55.35% resulting in a “sig-
 nificant[] increase[] [in] the Government’s cost risk during
 performance.” J.A. 105138. The Source Selection Author-
 ity issued a memorandum memorializing the agency’s de-
 termination that NextGen was the “highest[-]rated offeror,
 taking into consideration all non-price factors” and was
 “also the lowest-priced (evaluated) offer[or].” J.A. 105237.
     Red Cedar filed a bid protest in the Court of Federal
 Claims, challenging the agency’s contract award to
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4                  RED CEDAR HARMONIA, LLC    v. UNITED STATES

 NextGen. NextGen intervened. Red Cedar, NextGen, and
 the government filed cross-motions for judgment on the ad-
 ministrative record. The Court of Federal Claims granted
 the government and NextGen judgment on the administra-
 tive record and denied Red Cedar’s motion. The court con-
 cluded that the agency’s decision to select NextGen was
 reasonable because NextGen’s proposal was “the lowest
 priced and highest technically rated proposal” and because
 the agency “properly determined [that NextGen] repre-
 sented the best value for the government.” J.A. 34. Red
 Cedar appeals. We have jurisdiction under 28 U.S.C.
 § 1295(a)(3).
                          DISCUSSION
     We review de novo Court of Federal Claims decisions
 granting judgment on the administrative record in bid pro-
 test cases. Bannum, Inc. v. United States, 404 F.3d 1346,
 1351 (Fed. Cir. 2005). Under this standard, we consider
 whether the agency’s action was “arbitrary, capricious, an
 abuse of discretion, or otherwise not in accordance with
 law.” See 5 U.S.C. § 706(2)(A); 28 U.S.C. § 1491(b)(4). We
 may set aside a procurement decision “if it lacked a rational
 basis or if the agency’s decision-making process involved a
 clear and prejudicial violation of statute, regulation, or pro-
 cedure.” Croman Corp. v. United States, 724 F.3d 1357,
 1363 (Fed. Cir. 2013). An agency is “entitled to a high de-
 gree of deference when faced with challenges to procure-
 ment decisions.” Orion Tech., Inc. v. United States,
 704 F.3d 1344, 1351 (Fed. Cir. 2013).
     Red Cedar contends that the trial court erred in deter-
 mining that the agency’s evaluation of Red Cedar’s pro-
 posed price was reasonable. It argues the agency’s
 evaluation under subfactor six, which affected the agency’s
 overall price evaluation (factor three), improperly focused
 on Red Cedar’s interim proposals, rather than its final
 hours and labor mix. We do not agree.
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 RED CEDAR HARMONIA, LLC   v. UNITED STATES                  5

      As the trial court noted, the “[a]gency provided a con-
 sistent and coherent explanation at each stage of the eval-
 uation.” J.A. 27. The technical evaluators gave Red Cedar
 a marginal rating for its initial proposed labor mix, indicat-
 ing that the “[p]roposal [did] not demonstrate an adequate
 approach and understanding of the requirements.”
 J.A. 105157; 102532. And despite repeated notices that its
 hours were deficient, Red Cedar issued a final labor mix
 that failed to adequately remedy weaknesses for over
 thirty positions. The agency, therefore, rationally adjusted
 Red Cedar’s proposed hours and price to determine a prob-
 able cost to the agency in conformance with the solicita-
 tion’s price evaluation instructions. 1 J.A. 30. On this
 record, we hold that the Court of Federal Claims did not
 err in holding that the agency’s evaluation of Red Cedar’s
 proposed price was not arbitrary, capricious, or in violation
 of law.
     Red Cedar also contends the trial court erred in deter-
 mining that Red Cedar was neither treated unequally nor
 evaluated based on unstated criteria. It argues that the
 agency evaluated Red Cedar based on unstated criteria
 when it improperly considered allegedly redundant aspects
 of NextGen’s technical approach under subfactor three, ra-
 ther than limiting its consideration of those aspects to the
 agency’s subfactor five analysis. It further argues that the
 agency treated Red Cedar unfairly by improperly relying
 on evidence of NextGen’s experience under subfactor six
 while discounting Red Cedar’s evidence. These contentions
 are unavailing.
     The agency acted within its broad discretion in award-
 ing NextGen a strength for its technical approach under

     1   To the extent Red Cedar argues that the agency
 should have decreased hours in other labor categories to
 offset any increase in hours, the administrative record does
 not support any such offset requirement.
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6                  RED CEDAR HARMONIA, LLC   v. UNITED STATES

 subfactor three. See Orion Tech., 704 F.3d at 1351. Pursu-
 ant to the solicitation, the agency considered NextGen’s
 and Red Cedar’s proposed approaches for the contract’s
 testbed event support. There is no evidence that the
 agency relied upon criteria outside of the designated crite-
 ria under subfactor three. There is, therefore, no support
 in the administrative record for Red Cedar’s contention
 that it was evaluated based on unstated criteria.
     With respect to subfactor six, the solicitation indicated
 that it would evaluate the appropriateness of the offeror’s
 proposed labor mix in meeting or exceeding the agency’s
 requirements. The solicitation expressly noted that the
 demonstration of “breadth and depth of staff and expertise”
 was encouraged and could result in a higher rating.
 J.A. 100167. The agency rationally evaluated the totality
 of evidence presented under these criteria and concluded
 that NextGen’s proposal was more technically sound than
 Red Cedar’s proposal. Therefore, Red Cedar’s claim of un-
 equal treatment under subfactor six is likewise without
 merit. On this record, we hold that the Court of Federal
 Claims did not err in holding that the agency’s evaluation
 of Red Cedar’s and NextGen’s respective strengths under
 subfactors three and six was not arbitrary, capricious, or in
 violation of law.
                        CONCLUSION
     We have considered the parties’ remaining arguments
 and do not find them persuasive. Because the Court of Fed-
 eral Clams did not err in granting the government and
 NextGen judgment on the administrative record, we af-
 firm.
                        AFFIRMED