Protester’s motion for injunctive relief to preclude the agency from moving forward with the awarded contract is granted. Diverging from a previous GAO decision, the court found that the agency erred in evaluating past performance by assigning the awardee a Substantial Confidence rating because two of the awardee’s three references were not relevant. The court also found that the agency had failed to adequately explain its realism analysis. Moreover, the court found that the awardee’s proposal should have been assessed a technical deficiency for failing to follow solicitation requirements.
The U.S. Department of Agriculture’s (USDA) National Account and Financial Operations Center services loans made to rural homeowners. The USDA issued a solicitation seeking property preservation and inspection services for the properties securing the loans in the rural portfolio.
Eleven offerors, including Mortgage Contracting Services, LLC (MCS) and Information Systems & Networks Corporation (ISN), submitted proposals. USDA determined that MCS had the highest-rated proposal, but that its benefits were not worth the price premium. Rather, USDA found that ISN’s lower-priced proposal represented by the best value.
MCS filed a protest with GAO challenging the award to ISN. MCS alleged that ISN had a disqualifying conflict of interest and that the agency unreasonably evaluated ISN under the solicitation’s technical and past performance factors. In response to the protest, USDA took corrective action to investigate the conflict and correct identified errors in the evaluation.
After concluding an investigation, USDA determined that ISN did not have a conflict. As part of the corrective action, USDA reevaluated proposals and determined once again that ISN proposal represented the best value. MCS filed a second GAO protest, objecting to the past performance and technical evaluation and alleging that ISN had proposed an unrealistic price. GAO denied the protest, finding USDA’s evaluation reasonable.
MCS then filed suit with the Court of Federal Claims. ISN intervened. MCS moved for injunctive relief to preclude USDA from moving forward with the contract awarded to ISN.
In its protest, MCS challenged the past performance evaluation arguing that two of ISN’s three past performance references were not relevant and thus ISN should not have received a Substantial Confidence past performance rating. For one its references, ISN had submitted an asset management contract that it performed for the U.S. Marshalls Service. MCS contended that contract was not relevant because it was significantly smaller than the USDA’s contract.
The court agreed with MCS, finding that USDA had provided no explanation as to why the Marshalls Service contract met the past performance requirements. The agency did not attempt to justify the difference in that contract’s size and scope. Moreover, USDA had not explained why it had not obtained a past performance questionnaire for that contract. Given the difference in magnitude between the Marshalls Service’s contract and the USDA’s, it was incumbent on the agency to better document its reasoning.
MCS also challenged a reference that ISN submitted for a Department of Housing and Urban Development contract. MCS argued that the solicitation required offerors demonstrate experience providing property preservation and inspection services. MCS contended that the work ISN performed on the HUD contract involved financial and title-related services, not property preservation and inspection services.
The court found this persuasive, noting that ISN’s work on the HUD contract appeared to be substantially different from the work that ISN would be performing under the USDA contract. The USDA provided no insight as to why the HUD contract warranted a strong past performance reference or even why the HUD contract met the solicitation’s requirements for relevant past performance.
Having found that the evaluations of two of ISN’s three past performance references were not reasonable, the court determined that ISN’s Substantial Confidence past performance rating was arbitrary. The court noted that its review of the USDA’s past performance evaluation differed from GAO, which found the evaluation reasonable. The court reasoned that GAO’s conclusions regarding past performance appeared summary and did not fully address the differences in size and scope in ISN’s references.
MCS also alleged that USDA had failed to properly evaluate ISN’s unrealistically low prices, which were lower than the government estimate. In light of this, MCS argued that the realism evaluation was not adequately supported, consisting only a few a spreadsheets with columns listing the side-by-side values for each offeror and the government estimate.
The court concurred with MCS noting that the agency’s spreadsheets lacked context. The USDA had apparently relied on ISN’s own statement that its prices were “well researched and 100 percent compliant” in finding that the company’s proposed prices were realistic. Reliance on that statement did not constitute an adequate realism analysis.
USDA argued that as part of the corrective action, it had created a new pricing chart, and that ISN’s prices were closer to this new chart. The court, however, noted that nothing in the evaluation explained why the USDA determined it needed to create a new pricing tool, why there was a difference between the agency’s two price benchmarks, and why the new tool was a better assessment of the offerors’ prices.
The court found the price analysis unreasonable. Again, the court noted that its opinion differed from GAO’s. The court believed, “the GAO did not critically examine why the agency used two different price benchmarks or why those benchmarks produced differing results.”
MCS further alleged that USDA had failed to assign a deficiency to ISN for failure to meet a requirement to perform tasks within a required time frame. The solicitation required that 95% of certain PWS tasks had to be completed within 10 days. ISN had proposed to perform 95% of the tasks within 14 days. MCS contended ISN should have been assessed a deficiency for failure to adhere to the 10-day requirement.
The court once again agreed with MCS, finding that ISN’s proposal on its face did not represent an offer to provide the things called for in the solicitation. ISN’s failure to meet that requirement rendered its proposal non-responsive.
The court next considered whether MCS had been prejudiced by these errors. The court reasoned that ISN was awarded the contract over MCS solely based on its lower price. Because the agency committed errors in the evaluation, it was not clear that ISN would have achieved the same ratings under the non-price factors as MCS. Therefore, there was a substantial chance that MCS would have received the award but for the USDA’s errors.
The court concluded by finding that the factors for injunctive relief weighed in MCS’s favor. The court entered an order enjoining the USDA from proceeding with the award to ISN.
MCS is represented by Greg S. Jacobs and Erin Felix of Polsinelli, PC. The intervenor, ISN, is represented Matthew T. Schoonover of Schoonover & Moriarty LLC. The government is represented by Ashley Akers, Robert E. Kirschman, Jr., and Brian Boynton of the Department of Justice.
