Protester’s Middling Performance on Incumbent Contract Undermines It Proposal for Successor Contract; Vectrus Systems Corporation v. United States, COFC No. 20-2053C

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MilosPauline

Protest challenging agency’s evaluation of past performance and price is denied. The protester alleged the agency disparately evaluated past performance by ignoring problems with the awardee’s performance history while exaggerating problems with the protester’s. The court rejected this argument reasoning that the protester had a series of performance issues on the incumbent contract, and that these issues were more serious than the awardee’s. The protester alleged that agency erred in not finding one of its references Very Relevant. The court, however, noted that the solicitation required that only contracts performed in Europe could be considered Very Relevant. The protester’s contract had been performed in Greenland, which contrary to the protester’s contention, is not part of Europe. The protester contended the agency should have found the awardee’s price unreasonable. But the court found the evaluation of price was consistent with the FAR.

The Air Force issued an RFP seeking support services for bases in Europe. The incumbent, Vectrus Systems Corporation, and Kellogg Brown & Root Services, Inc. (KBR), submitted proposals. The Air Force awarded the contract to KBR. The agency found that Vectrus had issues with it performance on the incumbent contract that resulted in it receiving only a Satisfactory rating on its most relevant past performance reference. Based on this, the Air Force only had a reasonable expectation that Vectrus could successfully perform the contract. While KBR had a higher-price, the Air Force determined the company’s better past performance record justified the higher price.

Vectrus filed a protest with GAO challenging the award. GAO denied the protest. Vectrus then filed a protest with the Court of Federal Claims.

Vectrus claimed that the Air Force disparately evaluated proposal with respect to the past performance factor. Vectrus contended the agency was overly focused on Vectrus’s performance issues while ignoring deficiencies in KBR’s past performance.

But the court found that the agency had not ignored deficiencies in KBR’s performance. Rather, the court reasoned, Vectrus had cherry-picked incidents of past performance while ignoring the reality of KBR’s overall strong performance record. Indeed, there was no reason to believe the Air Force had ignored KBR’s performance issues just because it didn’t discuss them in the evaluation. KBR received a “Substantial Confidence” rating under the past performance factor. This did not mean that KBR had problem-free performance.

Rather, the court considered the totality of the circumstances. As an example, the court noted that some of KBR’s CPARs identified problems with KBR’s ability to meet contract requirements. But the CPARs also noted that KBR exhibited a willingness and ability to quickly take corrective action.

Another example: Vectrus noted that in one of KBR’s CPARs, KBR had a performance issue involving a serious safety concern. But the CPAR also revealed that the agency had not considered the issue significant. In fact, the evaluator for that prior contract, found that KBR met or exceeded all the contract requirements.

Aside from KBR’s performance, the court did not believe the Air Force had exaggerated its concerns about Vectrus’s past performance. Vectrus’s performance on the incumbent contract had given rise to safety concerns. The court found that Vectrus had not shown that those safety concerns were substantively indistinguishable from the safety issues identified in KBR’s performance.

Vectrus contended that the Air Force overstated a concern with a database updating requirement on the incumbent contract. Vectrus claimed this was a minor error. What’s more, the company argued, KBR had a similar failure on one of its contracts.

The court, however, found these contentions unpersuasive. While the Air Force had faulted KBR for an updating requirement on one of its contracts, KBR had ultimately received a Very Good rating on the CPAR covering the period. By contrast, Vectrus had failed to update the database on the incumbent contract during the last four years of performance.

The court also noted that at the time of the evaluation, Vectrus had not yet completed its corrective action for the issues on the incumbent contract. The Air Force had found this failure to complete the corrective action concerning as it showed an inability to follow-through.

In addition to its disparate treatment argument, Vectrus claimed that the Air Force had erred in finding one of its past contracts only Relevant when it should have been found Very Relevant. The solicitation stated that a Very Relevant contract had to be performed in Europe or Africa. Vectrus argued that a contract it performed in Greenland should have been found relevant. Vectus contended that Greenland had political and cultural associations with Europe and thus should be considered part of Europe.

The court was unconvinced, reasoning that there is no dispute that Greenland is located in North America, not Europe. Because Greenland is not in Europe, the past performance reference did not fall within the solicitation’s definition of Very Relevant. If the solicitation had required the Air Force to consider work in areas with political or cultural ties with Europe, it would have been required to consider work in New Zealand or the British Virgin Isles. That was not a reasonable reading of the solicitation.

Vectrus also contended that price evaluation was flawed and that the agency should have found KBR’s price unreasonably high. Vectrus alleged that in assessing price, the Air Force erred comparing the proposed prices received in response to the solicitation. Vectrus asserted that as the incumbent contractor, only it possessed data needed for precise pricing. Because KBR lacked this data, its pricing was inflated, which, in turn skewed the average evaluated price upwards.

The court reasoned that Vectrus was essentially arguing that the it was unreasonable for the Air Force not to use the incumbent pricing as a benchmark. But the court reasoned that the prices of all technically acceptable offers provided a reliable indication of the current market prices, even if they are higher than those charged by the incumbent contractor.

Vectrus also alleged that the Air Force erred in calculating total evaluated prices. Vectrus claimed the agency should not have used the current workload under the incumbent contract to calculate price because there would be a less work under the successor contract. But the court reasoned that comparison of proposed prices to historical prices for similar items a method of price analysis specifically preferred by the FAR. In any event, the Air Force recognized the variances between the incumbent and successor contract. Nevertheless, it still reasonably chose to consider historical prices because the two contract had a similar level of effort.

Vectrus is represented by Kevin P. Mullen, Sandeep N. Nandivada, Caitlin A. Crujido, Lyle F. Hedgecock, and Victoria D. Angle of Morrison & Foerster LLP. The intervenor, KBR, is represented by Seth H. Locke, Alexander O. Canizares, Brenna D. Duncan, Julia M. Fox, and Paul M. Korol of Perkins Coie LLP. The government is represented by Anna Bondurant Eley, Douglas K. Mickle, Robert E. Kirschman, Jr., and Brian M. Boynton of the Department of Justice as well as Jason R. Smith of the Air Force.

COFC - Vectrus