Protest challenging agency’s award of multiple IDIQ contracts is sustained in part and denied in part. The court sustained the protest as to the agency’s price reasonableness evaluation. The solicitation required the agency to evaluate the reasonableness of cost-reimbursement CLINs separately from fixed-price CLINs. The agency, however, conflated the evaluation of CLINs, which significantly impacted the protester’s chance of receiving award. The protester raised several other challenges to the agency’s technical, past performance, and cost realism evaluation. But the court rejected all these arguments, finding that the agency had not abused its discretion.
The Army issued a solicitation seeking logistics support services for the various Geographic Combatant Commands—e.g., NORTHCOM, CENTCOM, PACOM etc.—and Afghanistan. The solicitation contemplated the award of four to six IDIQ contracts to cover the each of the Combatant Commands. Simultaneous with each IDIQ contract, the Army planned to issue immediate task orders to each IDIQ awardee.
The Army awarded IDIQ contracts to Fluor International, PAE Parsons, Vectrus Systems Corporation, and Kellogg Brown and Root (KBR). Fluor received the IDIQ for AFRICOM, but it believed it should have received more. Fluor filed two protests challenging (1) the awards of EUCOM, NORTHCOM, and Afghanistan to KBR, and (2) the awards of PACOM and CENTCOM to Vectrus. Fluor asserted various arguments concerning the evaluation of proposals. The court consolidated the protests. Fluor and Vectrus intervened. The government moved to dismiss Fluor’s protest for lack of jurisdiction. All the parties moved for judgment on the administrative record.
The government contended the court lacked jurisdiction because Fluor’s protest was barred by Federal Acquisition Streamlining Act (FASA). Under FASA, a protest in connection with the issuance of a task or delivery order is not justified. Because the Army had issued task orders under each IDIQ, the government argued, the court lacked authority to hear the protest.
But the court found that the government was conflating the award of the IDIQ contract with award of the task orders. To be sure, the Army had awarded task orders in conjunction with the IDIQ awards. This, however did not negate the court’s ability to hear a challenge to the IDIQ awards. The court noted that the language in 10 U.S.C. § 2304c(e)—the FASA bar—focuses on task orders as opposed to task order contracts. The court reasoned that if it were to permit an agency to avoid judicial review by linking IDIQ awards and task order, it would violate the distinction between task order contract and task order awards. Indeed, accepting the government’s argument would create a loophole in which an agency could award IDIQ contracts that were judicially impregnable.
The court did, however, find that FASA barred Fluor’s protest of the Afghanistan award. There was not a separate IDIQ contract associated with the Afghanistan award. Rather, an offeror had to receive one of the geographical command IDIQs to be eligible for Afghanistan. The Afghanistan award was therefore a task order, not an IDIQ contract. Accordingly, the court dismissed all of Fluor’s argument concerning the Afghanistan award for lack of jurisdiction.
The government also argued the court lacked jurisdiction because Fluor did not have standing to protest. As an awardee, the government claimed, Fluor was not adversely impacted by the award and thus not an interested party to maintain a protest.
The court rejected this argument, reasoning that status as a contract awardee does not, by itself, deprive the court of jurisdiction. The court reasoned that the nature of the procurement resulted in four concurrently awarded, but very different, IDIQ contracts. Each of these awards was separate and distinct. Thus, each awardee’s resulting IDIQ contract was different from any other offeror’s award such that each offeror, regardless of whether they were awarded an IDIQ, had a demonstrable economic interest affected by the award of the other IDIQs.
As to the merits of the protest, Fluor alleged the Army misevaluated offerors under the solicitation’s technical factor. First, Fluor contended the solicitation required the Army to separately evaluate offerors’ capability matrices and narrative descriptions of their capabilities. But, Fluor argued, the Army conflated the matrices and the narratives and relied too much on the narratives. In particular, Fluor asserted, it had checked off far more capabilities than KBR and Vectrus and should have received a higher rating than those companies.
The court, however, found that the Army had cross-referenced the matrices and the narratives, and that it adequately documented its review. Moreover, the solicitation sated that the Army would place emphasis on how an offeror would leverage its capabilities, so it was reasonable to focus on the narratives. The court declined to find an error in the evaluation of the capabilities matrices.
Next, Fluor argued that the Army had double counted strengths assigned to Vectrus. The Army had assigned Vectrus strengths for its existing internal capabilities and for its strategic partnership and vendor networks. Fluor contended that the Army improperly considered Vectrus’s subcontractors as part of the internal capabilities and as part of its strategic partnerships. According to Fluor, Vectus’s subcontractors were external capability that should not have been considered an internal capability.
The court, however, found that nothing in the solicitation instructed offerors that internal capabilities were limited to offeror’s in-house capabilities and did not include subcontractors. Indeed, the solicitation repeatedly emphasized that the agency would evaluate prime and subcontractors together. Accordingly, the Army did not err in considering subcontractors as part of the internal capabilities analysis.
Fluor further complained that the Army had changed technical ratings for Fluor, KBR, and Vectrus after discussions. But the court found this was not problematic. An agency has the right to change its mind during the course of an evaluation. The Army had reasonably change ratings due in part to the resolution of issues raised during discussions.
Next, Fluor contended the Army disparately evaluated past performance, highlighting problems with Fluor’s prior contracts while minimizing KBR’s and Vectrus’s past performance issues. The court rejected this argument. With respect to KBR, Fluor’s past performance problems extended across multiple contracts while KBR’s stemmed from unrelated issues on the same contract. Similarly, with Vectrus, the Army had found that its past performance issues were not systemic but rather stemmed from a failure of supervision that Vectrus remedied by terminating the supervisor.
Fluor contended that the Army failed to properly evaluate the realism of Vectrus’s price, which was $350 million lower than the next lowest offeror. Had the Army properly evaluated Vectrus’s price, Fluor argued, it would have flawed submission that rested on bad data. The court, however, that for the most part, Vectrus’s lower price resulted from its unique staffing approaches not from a misunderstanding the requirements.
Finally, Fluor alleged that Army’s price reasonableness evaluation was flawed. This argument found purchase with the court. The solicitation had both cost-reimbursement CLINs and firm-fixed price CLINs. The solicitation stated that the reasonableness of the cost reimbursement CLINs had to be evaluated separately from the reasonableness of the firm-fixed price CLINs. Fluor alleged that the Army had conflated the evaluation of cost-reimbursement and fixed-price CLINs.
The court agreed. Contrary to the requirements of the solicitation, the Army did not conduct a separate price reasonableness evaluation of cost-reimbursement and fixed-price CLINs. In fact, the contracting officer’s price determination specifically stated the “cost-reimbursable efforts were considered with the [fixed-price] efforts.”
The court also found that the Army did not conduct a price reasonableness in accordance with the FAR. The FAR allows an agency to use various price analysis techniques, one of which is the comparison of proposed prices against each other. Rather than comparing prices to each other, the Army simply the lowest price to the next lowest price. The court found this limited assessment of reasonableness problematic.
The Army attempted to argue that Fluor had not been prejudiced by the error in the price reasonableness analysis because even if the agency had separately evaluated the cost-reimbursement and fixed-price components, it would still found KBR’s prices reasonable. The court, however, found that the failure to conduct an adequate price reasonableness evaluation in accordance with the solicitation and the FAR significantly impacted Fluor’s chances of being awarded the contract given that the Army had based its award decision on those flawed analyses.
Fluor is represented by Andrew Emil Shipley of Wilmer Cutler, et al. Intervenor KBR is represented by Lee Paul Curtis of Perkins Coie. Intervenor Vectrus is represented by Kevin Patrick Mullen of Morrison & Foerster, LLP. The government is represented by Igor Helman of the U.S. Department of Justice.
