Protest challenging agency’s evaluation of the awardee is sustained. The solicitation, which sought hotel lodging, required offerors to address the safety and security of proposed secondary hotels and to demonstrate that all the proposed hotels provided certain amenities. The court found that the awardee failed to address the security and the amenities at several of its proposed hotels. The agency thus deviated from the solicitation’s criteria. But for this error, the protester would have a substantial chance of receiving the award.
The Department of Veterans Affairs published a solicitation seeking lodging management services. Essentially, the VA needed a contractor to provide hotels close the agency’s Law Enforcement Training Center.
The solicitation provided that proposals would be evaluated using a tiered approach. First, in Tier 1, the VA would evaluate proposals from service-disabled veteran-owned small businesses (SDVOSB). If there were no offers from SDVOSBs at a fair and reasonable price, the VA would evaluate proposals in Tier 2, which was set aside for veteran-owned small businesses (VOSB). If no proposals were acceptable in Tier 2, the VA would evaluate proposals in Tier 3 from small businesses. HUBZone and socially and economically disadvantaged businesses would be given priority in Tier 3.
The VA received proposals from three SDVOSBs, one VOSB, and ten small businesses, including one HUBZone business. The VA began by reviewing the Tier 1 proposals. It found that two of the SDVOSB proposals unacceptable. The agency found a third proposal, from Brian Hall Properties, flawed but salvageable. The VA rated Brian Hall’s proposal as Unsatisfactory under the solicitation’s technical factor. But the VA held discussions with Brian Hall. The company submitted a revised proposal. The VA found that the revisions resolved a significant weakness and a deficiency identified in the initial evaluation. The agency awarded the contract to Brian Hill.
Bluewater Management Group, LLC, which had submitted a proposal as a Tier 3 small business, filed a protest with the Court of Federal Claims challenging the award to Brian Hill. Bluewater alleged the VA conducted improper discussions with Brian Hill and misevaluated the company’s proposal. The government moved to dismiss Bluewater’s protest for lack of standing. Additionally, both Bluewater and the government moved for judgment on the administrative record.
The court first addressed the government’s motion to dismiss. The government argued that Bluewater lacked standing because it did not have a chance at award. Bluewater was Tier 3 non-prioritized small business. It could only receive the award if the Tier 2 VOSB and the HUBZone small business were eliminated from the competition.
The court noted that a protester has standing if it demonstrates a substantial chance of receiving award if its allegations regarding the proposals of offerors that may be next in line for award are potentially meritorious.
Here, the court found that the VOSB and the HUBZone business were likely not next in line for award. The VOSB had submitted a non-compliant proposal; the company did not submit a commitment letter that specified the number of hotel rooms offered as required by the solicitation. The HUBZone proposal was rife with deficiencies—failure to submit separate proposal volumes, missing commitment letters—and was also materially non-compliant. If the VA could not award a contract to the VOSB of the HUBZone business, it would have to consider the remaining small business in Tier 3. Bluewater, which had submitted a facially compliant proposal for Tier 3, had substantial chance of receiving award.
As to the substance of the protest, Bluewater argued that the VA had deviated from the evaluation scheme by conducting discussions with Brian Hall before evaluating proposals in Tiers 2 and 3. But the court found that the solicitation allowed for discussions to be held in conjunction with the evaluation in each tier. Moreover, although Brian Hall submitted a non-compliant proposal, nothing the solicitation prevented the VA from concluding that a non-compliant proposal could be made compliant through discussions. Simply stated, the VA had structured the competition to prioritize award to an SDVOSB. There was nothing unreasonable about conducting discussions with and SDVOSB to make its proposal acceptable.
Bluewater also argued that the VA treated Brian Hall’s proposal more leniently than the other proposals from SDVOSBs. The VA had found proposals from two SDVOSBs unacceptable because, absent a material rewrite, they lacked a realistic chance for award. But, Bluewater noted, the VA found Brian Hall’s proposal deficient yet allowed the company to materially rewrite its proposal through discussions.
The court found that unlike the problems with the other SDVOSBs’ proposals, the deficiencies in Brian Hall’s proposal did not rise to the level of immediately disqualifying. Brian Hall submitted all the proposal volumes and all the required documents in those volumes. While Brian Hall had not satisfied all the solicitation’s requirements, those flaws, unlike the other SDVOSBs’, could be remedied with a revised proposal.
Next, Bluewater contended the VA deviated from the solicitation’s evaluation scheme. Here, the court agreed with Bluewater. The solicitation required offerors to address the safety and security of proposed secondary hotels and to demonstrates that all of the proposed hotels provided various required amenities. The court found that Brian Hall did not address, and the VA did not consider, the safety and security of thirteen of the company’s proposed hotels. Additionally, Brian Hall, did not address, and the VA did not consider, the amenities available at thirteen of the proposed hotels.
Bluewater argued that the VA had erroneously assigned Brian Hall a low risk rating under the solicitation’s past performance factor. The court found that the VA’s past performance evaluation was sloppy. The agency had assessed performance examples that were not performed by Brian Hall. What’s more, the VA had not looked beyond performance information in the Federal Procurement Data System. Nevertheless, the court could not find that the VA had abused its discretion in evaluating Brian Hall. There was nothing in the record that indicated that Brian Hall could not perform the contract.
The court concluded by noting that Bluewater had been prejudiced by the VA’s botched evaluation. Moreover, the court found that Bluewater had established irreparable injury—lost opportunity to compete—that justified an injunction precluding the VA from continuing performance under the contract with Brian Hall. The court ordered the VA to a select a new awardee.
Bluewater is represented by Daniel J. Strouse. The government is represented by Christopher L. Harlow of the Department of Justice.
