This bid protest case turned on whether the Navy irrationally ignored readily available negative past performance information when awarding a nearly $100 million base operations support contract. The protester argued the Navy failed to consider a marginal quality rating the awardee's mentor partner received on a recent predecessor contract—a rating personally known to one of the evaluators. The Court applied the "too close at hand" doctrine and agreed with the protester, finding the Navy lacked any rational basis for ignoring highly relevant performance problems on a similar contract at the same naval base.
Chugach Logistics and Facility Services JV, LLC v. United States, United States Court of Federal Claims, No. 25-2075C
- Background - The Naval Facilities Engineering Systems Command Southwest (NAVFAC-SW) issued a solicitation for an eight-year base operations support contract at Naval Base Coronado, California, valued at nearly $100 million.. After evaluating proposals, the Navy awarded the contract to CCS King George 2 LLC (an SBA-certified mentor-protégé joint venture) over Chugach Logistics and Facility Services JV, LLC (also a mentor-protégé joint venture). Chugach protested to GAO, which denied the protest. Chugach then filed this action challenging multiple aspects of the evaluation.
- Prime Contractor Experience - Chugach argued CCS KG improperly received credit for "prime contractor" experience because the reference projects were actually performed by other joint ventures in which CCS KG's mentor partner (King & George) was a member—not by CCS KG itself. The Court rejected this narrow interpretation. Under the solicitation, "prime contractor" was defined in contrast to "subcontractor," not to distinguish between a joint venture and its members. The solicitation explicitly stated that eligible experience "include[d] the prime experience of any partnerships, joint ventures, [and] teaming arrangements." The Court found this language permitted agencies to look within joint venture structures to evaluate the members who actually performed the work. Requiring otherwise would create absurd results, particularly for unpopulated mentor-protégé joint ventures that lack independent experience.
- Mentor-Protégé Experience - Chugach also challenged the Navy's failure to evaluate the experience of CCS KG's protégé member (Cascade), arguing that SBA regulations at 13 C.F.R. § 125.8(e) required consideration of both the mentor's and protégé's experience. The Court found this argument raised a patent defect in the solicitation that should have been challenged before the bidding deadline. The solicitation explicitly exempted mentor-protégé joint ventures from the requirement that each joint venture member demonstrate qualifying experience. This exemption directly conflicted with Chugach's interpretation of the regulation. Because the inconsistency was apparent on the face of the solicitation, it constituted a patent defect that Chugach waived by failing to raise it pre-award.
- Past Performance—Too Close at Hand - Chugach's winning argument concerned the Navy's past performance evaluation. King & George (CCS KG's mentor partner) had previously performed a janitorial services contract at the same Naval Base Coronado location and received a marginal quality rating. One of the three evaluators on the source selection board had personally signed this critical performance assessment just nine months before the solicitation. Yet the Navy assigned CCS KG a "substantial confidence" rating without mentioning or considering this recent negative performance. The Court applied the "too close at hand" doctrine, which requires agencies to consider readily available, relevant information when they have discretion to do so. The solicitation gave the Navy broad discretion to review "all CPARS evaluations for Offerors, for projects other than those submitted" under the corporate experience factor. The marginal CPARS was unquestionably relevant—custodial services comprised nearly half the contract value, the work was at the same location, and the assessment was recent. Most importantly, one evaluator had personal knowledge of the performance problems. The Navy's evaluation record contained no explanation for ignoring this information.
- Price Risk Assessment - Chugach argued the Navy violated the Defense Federal Acquisition Regulation Supplement by failing to conduct a price risk assessment using the Supplier Performance Risk System (SPRS). The solicitation incorporated DFARS provision 252.204-7024, which requires contracting officers to "consider SPRS risk assessments during the evaluation" of offers. The Court rejected this challenge on harmless error grounds. The government demonstrated that the SPRS database contained no risk assessments for either CCS KG or Chugach. The Navy cannot be faulted for failing to review nonexistent data.
- Injunctive Relief - Having found the Navy's past performance evaluation arbitrary and capricious, the Court granted permanent injunctive relief. Chugach succeeded on the merits by demonstrating the Navy lacked a rational basis for ignoring readily available negative past performance information. Chugach would suffer irreparable harm through loss of a multi-year contract opportunity, lost revenue, lost past performance credit, and diminished competitive standing—injuries that monetary damages cannot remedy. The balance of hardships favored Chugach because the burden on the Navy of reevaluating proposals was modest compared to Chugach's concrete and unrecoverable harm. The public interest favored an injunction because maintaining procurement integrity outweighed any government interest in avoiding delay.
The plaintiff is represented by Aron C. Beezley, Nathaniel J. Greeson, and Gabrielle A. Sprio of Bradley Arant Boult Cummings LLP. The intervenor, CCS King George 2 LLC, is represented by Roger V. Abbott, Stephen P. Ramaley, Mitchell D. Dolman, and Samara A. Rahman of Miles & Stockbridge PC. The government is represented by Russell J. Upton, Brett A. Shumate, Patricia M. McCarthy, and Douglas K. Mickle of the U.S. Department of Justice, Commercial Litigation Branch, with assistance from Erin L. Hernandez and Andrew Campos of the Naval Facilities Engineering Systems Command Southwest.
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