Post-award bid protest challenging the agency’s best value tradeoff and technical evaluation is denied, where the solicitation provided the agency could evaluate prices by CLIN, not just total price and where the agency’s consideration of cost risk did not amount to an impermissible cost realism evaluation.
Kiewit Infrastructure West Co. protested a decision by the Army Corps of Engineers to award a contract to repair a dam to the Flatiron│Dragados│Sukut Joint Venture (FDS). Kiewit contended that the Corps’ best value decision was flawed due to an improper consideration of cost realism. Kiewit also challenged the Corps’ technical evaluation, arguing that the agency had failed to adequately explain its technical ratings, relied on irrational technical discriminators, and evaluated proposals unequally. Shortly after suit was filed, Kiewet, the government, and FDS, which intervened, all moved for judgment on the administrative record.
The court first considered Kiewit’s argument that the court had improperly considered the cost risks of Kiewit’s proposal. Kiewit contended that the solicitation only required the agency to determine whether offerors’ total prices were fair and reasonable. But rather than simply determining whether Kiewit’s total price was fair and reasonable, the Corps had considered potential cost risks of specific parts—e.g., an increase in the volume of material to be excavated, the cost for stockpiling sand—of Kiewit’s proposal. Once the agency considered cost risks, Kiewit concluded, it effectively engaged in a cost realism analysis, which was not permitted by the solicitation.
The court disagreed with Kiewit’s argument. First, the court reasoned, contrary to Kiewit’s contentions, the solicitation did not limit the Corps to considering total price. The solicitation required offerors to organize their bids by contract line item number. Each CLIN was divided into sub-CLIN’s and each sub-CLIN had its own unit price. The solicitation required the SSEB price board to review each CLIN’s price to determine whether it was fair—i.e., whether it deviated from the average of all offerors’ CLIN prices. Thus, the Corps’ consideration of unit prices, rather than total price, was not inconsistent with the solicitation.
Second, the court found that the agency’s consideration of potential cost risks did not amount to an impermissible cost realism analysis. The court noted that when an agency performs a cost realism analysis and finds that a proposal understated likely costs, the agency’s estimate of costs is substituted for the offeror’s estimate. In this case, the Corps did not substitute Kiewit’s costs with its own estimated costs. Instead, the agency simply noted that Kiewit’s price could be higher under certain contingencies. This did not amount to a cost realism analysis and did not violated the solicitation.
In a related argument, Kiewit also contended that the Corps erred in considering potential costs savings offered by FDS’s proposal during the best value analysis. But the court found that the SSA’s conclusion that FDS’s proposal was superior and worth the 4.4 percent price premium was based on a thorough head-to-head comparison of the proposals and not any improper factors. While the SSA had made note on cost saving offered by FDS’s proposal, they were extraneous to the best value analysis and did not undermine the tradeoff decision.
Aside from its complaints about the alleged consideration of cost risks and savings, Kiewit also argued that the Corps failed to properly explain why it had rated Kiewit’s proposal as merely “Good” on technical factor 1, instead of “Outstanding.” Specifically, the company argued that the agency had failed to explain how Kiewit’s rating had remained “Good” after it had addressed identified weaknesses during discussions. The court, however, found that the Corps had provided a rational explanation for Kiewit’s “Good” rating. This was a matter of technical and scientific expertise, on which the court would not second-guess the agency.
Kiewit also argued that three of the bases for the Corps’ determination that FDS’s proposal was superior to Kiewit’s were unreasonable. First, Kiewit argued that the Corps wrongly awarded FDS a strength for proposing a geologist, when the solicitation required a geotechnical engineer. But the court noted that FDS actually proposed a geologist in addition to a geotechnical engineer, and that FDS was awarded a strength for going beyond the requirements by proposing both.
Second, Kiewit asserted that FDS should not have been awarded a strength for a superior understanding of soil conditions. The Corps awarded FDS a strength for recognizing that the dam site was “alluvial in nature.” Kiewit, on the other hand, had assumed the site had “low permeable soil.” Kiewit argued that “alluvial” and “low permeability” mean the same thing, so there should have been no difference in technical ratings on this aspect of the proposals. The court, however, found that “alluvial” and “low permeability” do not mean the same things. Alluvial refers to soil that was deposited by flowing water; it does not necessarily convey anything about soil permeability. The Corps’ evaluation of the offerors’ understanding of soil conditions was not unreasonable.
Third, Kiewit argued that the Corps should not have awarded FDS a significant strength for its proposed dewatering plan because FDS had not properly considered 2011 groundwater data. But FDS had expressly stated in its proposal that its dewatering plan would utilize historic data. The Corps’ decision to assign a significant strength was not irrational.
In addition to its arguments concerning FDS’s allegedly undeserved strengths, Kiewit argued that the Corps had unequally evaluated Kiewit’s proposal with respect to several criteria. After reviewing both FDS’s and Kiewit’s proposals, the court found that FDS’s technical proposal was more detailed and offered more benefits that Kiewit’s. The differences in ratings were based on the actual technical superiority of FDS’s proposal, not disparate treatment.
Finally, Kiewit argued that the Corps evaluation of FDS under technical factors 3 (Experience) and 5 (Past Performance) was inconsistent. Kiewit argued that FDS could not get an “Outstanding” rating on technical 3 while only getting a “Satisfactory Confidence” rating on technical factor 5—that is, offerors’ should receive similar ratings on Experience and Past Performance. The court noted, however, that FDS received the lower rating on technical factor 5 because it only submitted past performance information for five of the six projects it submitted on technical factor 3. FDS was downgraded for this omission. What’s more, the court noted, experience and past performance were evaluated under different criteria. The court did not find anything irrational or inconsistent with the different ratings.
Kiewit is represented by Douglas L. Patin, Aron C. Beezley, and Lisa A. Markman of Bradley Arant Boult Cummings LLP. The government is represented by James W. Poirier, Chad A. Readler, Robert E. Kirschman, Jr, and Steven J. Gillinghan of the U.S. Department of Justice as well as Amanda R. Fuller of the U.S. Army Corps of Engineers. The intervenor is represented by Joseph G. Martinez, K. Tyler Thomas and Tess E. Gosda of Dentons LLP.
