Awardee Did Not Make Use of Protester’s Proprietary Information to Gain Competitive Advantage; CAFC 2018-1209, DynCorp International LLC v. United States, AAR Airlift Group Inc.

Appeal of COFC’s decision denying a protest is denied, where the agency reasonably investigated the awardee’s alleged access to the protester’s proprietary information and concluded the awardee neither sought out the information nor gained a competitive advantage from it. The court also found the agency’s evaluation notices did not mislead the protester into believing it could shift responsibility for some tasks to another contractors, but merely requested clarification of the protester’s approach.

DynCorp International LLC appealed a decision by the Court of Federal Claims denying its protest challenging the award of a Department of State contract for global law enforcement and counter-narcotics operations to AAR Airlift Group Inc. GAO previously denied DynCorp’s earlier protest arguing the same grounds.

DynCorp had challenged the agency’s technical and price evaluations; its decision not to disqualify AAR’s proposal for its staffing proposal; and its failure to disqualify AAR for the improper use of DynCorp’s proprietary information. COFC generally found the agency’s evaluation was reasonable.

Regarding DynCorp’s allegation that the government failed to investigate whether AAR benefitted from the receipt of DynCorp’s confidential information from a former DynCorp employee, the court found that DynCorp failed to meet its burden of proof. Although a former DynCorp employee contacted AAR directly and provided AAR executives with confidential DynCorp information, COFC concluded the CO sufficiently investigated the claim. The CO evaluated AAR’s labor rates, profits, and fees across several versions of its proposal, and determined there was no evidence that AAR used the information.

On appeal, DynCorp argued the agency unreasonably refused to disqualify AAR from the competition. The protester also argued that State misled it into believing that it could permissibly transfer responsibility for MIS operations and maintenance to the IT Associate Contractor, and therefore the technical evaluation was unreasonable. Finally, the protester argued that State erred when it declined to disqualify AAR for failing to include a required staffing plan in its proposal.

First, the court found the CO had conducted a thorough review of the allegations before declining to disqualify AAR based upon its receipt of allegedly proprietary DynCorp information. The CO reviewed each document in AAR’s possession, concluded that two-thirds of them were publicly available, and found the remaining documents did not contain DynCorp bid or proposal information and that AAR did not use any information in those documents to gain a competitive advantage.

DynCorp argued that a former employee had provided AAR with salary information while the awardee was preparing its bid, but the evidence showed the employee did not consider this information to be confidential and that the information was out of date. Further, AAR did not ask for the information and the CO concluded the information was of limited use.

Similarly, while AAR had received a spreadsheet showing DynCorp’s profit margin analysis, the CO found no evidence AAR sought out the information, used it, or gained any competitive advantage.

On appeal, DynCorp argued that the CO was unduly concerned about whether there had been a violation of the Procurement Integrity Act and failed to assess adequately whether AAR should be disqualified for having created an “appearance of impropriety.” However, the court disagreed, finding the CO’s decision specifically addressed the appearance of impropriety.

Next, DynCorp argued that State led it to believe that it was permissible to shift responsibility for MIS operations and maintenance to the IT Associate Contractor after transition from the legacy Air Wing Information System. However, the court was not persuaded. Although the initial solicitation stated the IT Associate Contractor would assume responsibility for the MIS after transition, the agency issued an amendment stating that the ITAC would support the existing MIS until transition to the new MIS is complete. More importantly, during a Q&A, State specifically stated that the contractor was required to shoulder responsibility for the MIS after transition from the AWIS. State also instructed offerors to include costs for MIS operations and maintenance on a particular line of the performance work statement. Given the agency’s explicit statements, the court could not concluded that DynCorp was misled.

The protester argued that various technical evaluation notices caused it to reasonably believe that the ITAC could handle operations and maintenance for the MIS, thereby causing it to alter its proposal. However, the court found the evaluation notices actually asked the protester to clarify whether or not its proposal included certain MIS equipment and lifecycle support tasks. Although the TENs cited by DynCorp requested clarification regarding whether DynCorp’s proposal included certain MIS-related costs and equipment, the court found them insufficient to overcome State’s explicit instruction that the contractor, not the ITAC, would be responsible for maintaining and operating the MIS after transition from the AWIS.

DynCorp also alleged that AAR also proposed that the ITAC Associate Contractor would be responsible for MIS operations and maintenance following transition from the AWIS, but was not disqualified. However, the court found this argument had no basis in fact, finding that AAR’s proposal included maintenance and operations as one of the major states in its solution. Its proposal also stated that AAR would operation and maintain the MIS, report defects, make minor enhancements to the system, and conduct periodic reviews. While AAR’s proposal stated that it would transition responsibility for the MIS to the ITAC “as requested by the contracting officer’s representative,” the court held that DynCorp made too much of this statement and that the agency had reasonably interpreted this language to give it the option to shift responsibility at a time of its choosing.

Finally, the court found the agency did not err when it considered AAR’s response to a TEN when evaluating its staffing proposal. Although the solicitation contained a prohibition on cross-referencing other proposal volumes, the court found it did not prohibit offerors from cross-referencing a discussion response.

Dyncorp International LLC is represented by Aaron Martin Panner of Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, and by David Michael Nadler of Blank Rome. The government is represented by Douglas Glenn Edelschick, Robert E. Kirschman Jr., Douglas K. Mickle, and Joseph H. Hunt, Commercial Litigation Branch, Civil Division, Department of Justice; and by Kathleen D. Martin, Office of the Legal Adviser, Department of State. AAR Airlift Group Inc. is represented by Jonathan F. Cohn, Joel Singer, Robert Joseph Conlan Jr. and Katherine L. Olson of Sidley Austin.