The protester and the government disputed the solicitation’s requirements. The protester noted that out of all the offers, its price had been closest the government’s estimate. Based on this price alignment, the protester inferred it must’ve have come the closest to proposing what the agency wanted. Thus, the protester and the agency must have had the same understanding of the solicitation. The court, however, found the protester’s argument fallacious. The protester may have got close the agency’s price, but that didn’t necessarily mean they shared the same understanding of the solicitation’s requirements.
Next Phase Solutions and Services, Inc. v. United States, COFC No. 23-46C
Background
The Centers for Medicare and Medicaid Services (CMS) issued an RFQ. The RFQ sought to modernize and migrate CMS’s payment system to the cloud. The RFQ included a Statement of Objectives (SOO). The SOO provided that after award, the contractor had to submit a pilot product and an analysis of alternatives, which would be used to generate alternative approaches after award.
Eight vendors, including Next Phase Solutions and Services and Index Analytics, submitted quotations. CMS determined Next Phase had not provided a detailed technical solution. CMS awarded the contract to Index.
Next Phase filed a protest with GAO. Next Phase argued that CMS had wrongly penalized its proposal for a lack of detail. Next Phase maintained the solicitation hadn’t required detail; rather, the solicitation had sought a high-level framework. GAO denied the protest. GAO reasoned that RFQ had actually sought a specific solution.
Next Phase filed suit in the Court of Federal Claims challenging the award. As part of its protest, Next Phase moved for a preliminary injunction pending resolution of the protest.
Analysis
Likelihood of Success
To obtain an injunction, a protester must prove a likelihood of success on the merits. Here, similar to its argument before GAO, Next Phase contended it should not have been penalized for proposing a high-level framework. Next Phase contended the SOO had asked for an “analysis of alternatives”. The solicitation had thus asked for alternative approaches not for any particular approach.
The court, however, believed Next Phase misinterpreted the solicitation. The RFQ’s PWS factor required offerors to provide an approach for modernization of the agency’s cloud. While the PWS factor mentioned “alternatives”, this referred to alternatives to the primary, proposed approach. It did not require offerors to provide a high-level analysis of alternatives.
To be sure, the SOO referred to an “analysis of alternatives.” But the court reasoned that Next Phase had taken this phrase out of context. The analysis of alternatives was required six months after award. This made sense when read in context with the PWS factor. The PWS factor required a specific approach to cloud modernization. Six months later, after the awardee was familiar with the system, the SOO required the awardee to perform an analysis of alternatives. The “analysis of alternatives” was thus supposed to occur after award, not in offerors’ proposals.
Next Phase reasoned that CMS must have changed its position on the solicitation. Next Phase noted that its proposed price was the closest to the government’s estimate. This meant CMS must have had the same understanding of the solicitation as Next Phase.
The court reasoned that accepting this argument would require “leaps of logic to fill the lacuna in the record.” Next Phase may have proposed a price close to the government estimate, but that didn’t mean that the protester and CMS had the same understanding of the solicitation. In fact, CMS had concluded that its price estimate was off, which further undermined Next Phase’s argument.
Irreparable Harm
Having found that Next Phase was unlikely to succeed on the merits, the court considered whether Next Phase would suffer irreparable harm absent an injunction. Next Phase argued that without an injunction, Index would become entrenched. Next Phase reasoned if the contract were allowed to proceed, Index would obtain valuable information during the transition period. As a result, if Next Phase’s protest was successful, and CMS re-solicited its requirements, Next Phase would not be able to realistically compete with Index.
The court found that this entrenchment argument has been rejected several times as evidence of irreparable harm. In any event, the court noted, the government had agreed to resolve the protest on expedited basis. Index would not transition in to the contract for months. It was unlikely to learn much of value in the intervening period. There was little harm in proceeding without an injunction.
Next Phase is represented by Alexander B. Ginsberg, Michael J. Anstett and Katherine L. St. Romain of Fried, Frank, Harris Shriver & Jacobson LLP. The intervenor, Index Analytics, is represented by Damien C. Specht, James A. Tucker, and Kritsa A. Nunez of Morrison & Foerster LLP. The government is represented by Joshua W. Moore of the Department of Justice and Ethan S. Chae of the Department of Health and Human Services.
–Case summary by Craig LaChance, Senior Editor
