Protest challenging the agency’s rejection of a proposal as technically unacceptable is denied, where the agency was not required to consider a proposed substitute key person and was not required to reopen discussions to allow the protester to rehabilitate its proposal. The court declined to extend the “too close at hand” doctrine to the consideration of key personnel or, more broadly, to the technical evaluation.
Chenega Healthcare Services LLC protested the Department of Energy’s award of a support service IDIQ contract to Kūpono Government Services LLC. CHS, the incumbent contractor, challenged its exclusion from the competition because one of its proposed key personnel subsequently became unavailable after the submission of proposals, but prior to award.
The protester argued that the agency unreasonably failed to consider its proposed substitute general manager. CHS argued the agency was obligated to consider the individual, who had previously been approved by the agency as the substitute on CHS’ incumbent contract. Because the agency knew of the individual and had approved his placement on the incumbent contract, CHS argued this information was too close at hand for the agency to ignore. CHS also argued the agency unreasonably failed to hold discussions that would have allowed it to substitute its proposed general manager.
First, COFC rejected Chenega’s contention that DOE was required to modify Chenega’s proposal to reflect the proposed substitution of personnel, as the solicitation terms did not allow for late proposal modifications of this type. The court found neither the solicitation nor the FAR would allow the agency to take this information into account.
COFC also rejected Chenega’s alternative argument that DOE abused its discretion by not considering its proposed substitute manager, for the same reasons. According to the court, DOE had no discretion to modify Chenega’s proposal after submission, because the terms of the solicitation barred consideration of late modifications.
The court also found that the situation did not fall within the “too close at hand” doctrine. Like GAO before it, the court declined to extend the doctrine to the substitution of key personnel listed in a proposal, nor more broadly to the the evaluation of technical proposals.
COFC also agreed that the agency was not required to open discussions to allow Chenega to modify its proposal. DOE had informed offerors that it intended to make award without discussions. Therefore, any post-submission key personnel change ran the risk of rendering the offeror’s proposal unacceptable, with no opportunity to cure the defect during discussions. Indeed, the solicitation contained an explicit warning that the letter of commitment from the proposed general manager was necessary and material, and that elimination from consideration was possible in the absence of such a letter. The withdrawal of Chenega’s proposed general manager resulted in this precise scenario, and the court found no abuse of the agency’s discretion. While DOE could have chosen to proceed otherwise, the court found its decision not to hold discussions was neither arbitrary nor capricious.
Chenega also argued that the agency’s evaluation of Chenega’s unmodified proposal deprived DOE of an opportunity to obtain the proposal providing the best value to the agency. However, the court noted that the plaintiff cited to no previous court or GAO decisions in support of this argument. The court reasoned that Chenega’s opening brief could be interpreted as suggesting the government should bend procurement rules in order to obtain the maximum number of advantageous offers from which it may choose, which would be contrary to law. As noted, the agency followed the solicitation evaluation scheme in a manner that was neither arbitrary nor capricious.
Similarly, Chenega argued that DOE’s award without discussions eliminated the agency’s opportunity to choose a “best value” proposal from Chenega. First, the court noted that an agency has broad discretion to decide which proposal would provide the best value. Provided this decision is grounded in reason, the court will not disturb it. Second, the court found no authority that suggests that a best value procurement requires an agency to rehabilitate unsatisfactory proposals to increase the pool of satisfactory proposals which might potentially provide the best value to the agency. On the contrary, the court held that the agency’s discretion not to hold discussions carries more weight than a protester’s argument that the agency should have opened discussions to allow it to improve its proposal. This is true even when there is only one other offeror in the competition and the agency does nothing to improve a second unsatisfactory proposal.
Finally, Chenega argued that DOE did not reasonably explain why it did not use “too close at hand” information to modify Chenega’s proposal to replace the proposed general manager nor why it chose to make an award without the discussions that would have permitted Chenega to modify its proposal. However, the court found it unreasonable to remand the decision back to the agency merely because its best value decision failed to explicitly discuss the “too close at hand” doctrine, or why the agency opted to make its award without discussions. The court found the decision rational and well-documented and declined to overturn it.
In the alternative, Chenega argued that DOE had entered into discussions, but they were not meaningful. However, the court found this argument waived and without merit. In its communications, DOE asked Chenega to confirm (or deny) that its letter of commitment from its general manager and confirm that Chenega was willing to extend the validity of its proposal by sixty days. Thus, the nature of the communication was clear in February 2018. The agency specifically described these communications as clarifications which did not permit revisions to Chenega’s proposal. Because Chenega did not argue that these communications constituted discussions until it filed its amended complaint and reply brief to the court in July 2018, the court concluded the argument had been waived.
Further, even if the challenge were timely, the court found it to be without merit, as asking offerors to extend the validity of their proposals and availability of key personnel does not constitute discussions.
Accordingly, the court denied Chenega motion for preliminary injunctive relief. However, the court also denied the government’s motion to dismiss, because the motion relied on materials submitted by the parties that are outside the pleadings, and because the court could not grant the motion without considering those materials.
Chenega Healthcare Services LLC is represented by Stowell B. Holcomb, Mark G. Jackson, and Kevin A. Rosenfield of Jackson Rosenfield LLP. The government is represented by Agatha Koprowski, Trial Attorney, with whom were Chad A. Readler, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice, and Ada Mitrani, Department of Energy, of counsel. Kūpono Government Services LLC is represented by Damien C. Specht, James. A. Tucker, and R. Locke Bell of Morrison & Foerster LLP.
