FAR 9.400:  Debarment, Suspension, and Ineligibility

Comptroller General - Key Excerpts

Task Source argues that the agency’s decision to exclude it from consideration when it awarded the contract to IGH was improper.[2] According to the protester, the agency’s failure to include it for consideration of the re-awarded contract constituted a negative responsibility determination. Task Source argues that the agency’s actions were improper because it was unreasonable for the agency to have considered the two individuals that had pleaded guilty to federal bribery charges as “principals” of MPSC. Task Source also alleges that the agency’s actions were improper because MPSC had withdrawn from the joint venture. Finally, Task Source argues that the agency was required to refer what it characterizes as the agency’s negative determination of responsibility to the SBA so that SBA could determine whether or not to issue the protester a COC.

We find no merit to Task Source’s allegations. As noted above, Task Source advised the agency that MPSC had withdrawn from the joint venture agreement previously entered into between MPSC and TSI. Letter of Protest, exhs. B, H. Accordingly, the entity that originally had submitted a proposal in response to the solicitation--Task Source--is different than the entity that now seeks to be considered for award of the contract, TSI. In this connection, the Task Source proposal describes the offering entity as follows:

Task Source/MPSC FEPP, LLC.  Task Source and MPSC have an approved Small Business Administration (SBA) Mentor-Protege relationship and have entered into a Joint Venture (JV) in response to this solicitation.

Agency Report (AR) exh. 8, Task Source Proposal, Volume II, at 4. For the agency to consider TSI for award of the contract in the wake of MSPC’s withdrawal from the joint venture would be tantamount to the agency allowing the firm to make material changes to its proposal, namely, a change in the composition of the offeror, as well as substantive changes to the proposal. For the agency to evaluate the Task Source proposal as materially altered essentially would amount to the agency engaging in discussions. Standard Communications, Inc., B-406021, Jan. 24, 2012, 2012 CPD ¶ 51 at 3 (discussions occur where an offeror is afforded an opportunity to make material revisions to its proposal).

Here, as noted, the agency made award on the basis of initial proposals without engaging in discussions. For our Office to require the agency to evaluate the Task Source proposal--as materially altered by the withdrawal of MPSC from the joint venture--essentially would compel the agency to engage in discussions with all offerors, since, if an agency engages in discussions with one offeror, it must engage in discussions with all offerors. Standard Communications, Inc., supra. However, the agency properly made award of the contract on the basis of initial proposals, as permitted by the RFP. RFP at 69.

In the final analysis, the record shows that the agency properly declined to consider the Task Source proposal in connection with its re-award of the contract. Simply stated, Task Source itself rendered its proposal ineligible for award based on the firm’s decision to make a material change in the composition of the offeror, and the agency’s decision not to evaluate its proposal did not constitute a negative responsibility determination. It follows that, since the agency did not make a negative responsibility determination with respect to Task Source, it was not required to refer the matter to the SBA for consideration under that agency’s COC procedure.

The protest is denied.  (Task Source/Military Personnel Services Corporation FEPP, LLC B-411173.3: Jul 8, 2015)  (pdf)

FAS argues that the Air Force unreasonably refused to reinstate its proposal into the competition following the lifting of its suspension from contracting. The protester also argues that the agency unreasonably evaluated VBR's proposal. As discussed below, we find that the Air Force reasonably exercised its discretion to not reinstate FAS's proposal. Because we conclude that FAS was reasonably excluded from the competition, FAS is not an interested party to challenge the Air Force's evaluation of VBR's proposal.

Agency Denial of Reinstatement Request

The FAR prohibits an agency from awarding a contract to a debarred or suspended contractor. FAR sect. 9.405. The FAR also provides, however, that "[i]f the period of ineligibility expires or is terminated prior to award, the contracting officer may, but is not required to, consider" an offeror's proposal. FAR sect. 9.405(d)(3). The FAR clearly commits the decision whether to reinstate an offeror into a competition following the lifting of a suspension to the discretion of a CO. See South Texas Turbine Supply, B-272163, Sept. 5, 1996, 96-2 CPD para. 105 at 3.

As a preliminary matter, FAS makes extensive arguments that its suspension from contracting was improper, and that the agency abused its discretion by improperly relying on that suspension in concluding that reinstatement of FAS's proposal into the competition was not warranted. In its report on the protest, the Air Force argues that DLA properly concluded that, under the facts of PWC's suspension, FAS's suspension was proper. Agency Legal Memo at 9-10. We need not resolve whether FAS's suspension by DLA was improper. As our Office has held, suspension and debarment of a contractor is a matter of agency contract administration that we do not review. Shinwha Elec., B-291064 et al., Sept. 3, 2002, 2002 CPD para. 154 at 4.

As discussed above, the Air Force's refusal to reinstate FAS's proposal into the competition was based on the CO's concerns regarding the delay to the procurement, and the CO's view that FAS's proposal did not have a likely chance for award. AR, Tab 17, Reinstatement Decision, at 4-7. We think that the agency's concern regarding delay to the procurement was reasonable, and in turn, provided a reasonable basis for declining to reinstate FAS's proposal into the competition.

First, the CO concluded that the removal of Taos/Agility as a joint venture partner would require the agency to conduct a new evaluation of FAS's past performance because FAS itself had no past performance, and instead relied on the past performance of its two joint venture partners. AR, Tab 17, Reinstatement Decision, at 5. FAS's proposal cited four past performance examples: (1) the incumbent contract for the agency's maintenance requirements in Spain, which was performed by a different joint venture between FSSI and Taos/Agility; (2) a base operations contract at Diago Garcia, performed by a joint venture where FSSI was the managing partner; (3) a base operations contract in Guam where FSSI was a joint venture partner; and (4) a warehouse design/build and management contract in Kuwait, which was performed by Taos/Agility. The CO found that the Kuwait contract was actually performed by Taos/Agility and thus was not relevant to the agency's review of past performance for FAS. Id. at 5. With regard to the other contracts--particularly the FSSI and Taos/Agility joint venture for the Spain maintenance contract--the CO stated that FAS's past performance would need to be reconsidered in light of the fact that FSSI would be performing the contract entirely on its own. Id.

Next, with regard to the technical acceptability factor, CO concluded that the agency would need to conduct a new evaluation to determine the extent to which FAS's technical proposal relied on the resources of Taos/Agility. Id. at 5. The CO also concluded that the agency would need to reopen discussions to allow FAS to revise its technical approach to account for the removal of the suspended partner. Id. The record shows that FAS's technical proposal discusses in numerous areas the capabilities of both FSSI and Taos/Agility. For example, the protester's proposal states that the joint venture is "structured to capitalize on the collected capabilities and assets" of FAS and Taos/Agility. AR, Tab 9, FSS Initial Proposal, Vol. 3, at 26. With regard to management, the proposal states that "FAS is governed by a streamlined Board of Directors whose members are selected from [FSSI] and Agility . . . [which] will oversee the contract and represent the shareholders." Id. Additionally, FAS's proposal cites the experience of FSSI and Taos/Agility in performing the Spain contract's requirements, as evidence of the protester's technical capabilities, as follows: "A key discriminator for this contract is the composition of the phase-in team . . . [which is comprised of] core members of the [Spain contract] phase-in team that successfully transitioned the contract in 60 days." See, e.g., AR, Tab 9, FAS Initial Proposal, at ES6.

With respect to the amount of delay at issue, the CO concluded that reinstatement of FAS's proposal would require an estimated 6 months to address the anticipated additional discussions, proposal revisions, and evaluation. AR, Tab 17, Reinstatement Decision, at 6. The CO viewed this delay as unacceptable because it would require sole-source extensions of the two incumbent contracts. Id. In this regard, the CO was concerned that such an extension would present difficulties for the agency because the incumbent contract for the requirements in Spain was performed by a joint venture between FAS's sole remaining partner, FSSI, and Agility, one of the companies that had been suspended by DLA in November. Id. In contrast, the CO stated that VBR had addressed all of the technical acceptability concerns and the agency was ready to proceed with award. Id. at 3-4.

FAS does not dispute that it would need to revise its proposal to account for the removal of Taos/Agility from the joint venture. See Protester's Comments on AR at 10-11. Instead, the protester contends that it could have addressed all of the agency's concerns through discussions. See id. The protester further argues that the magnitude of required revisions would not be "substantial" because, in the protester's view, FSSI is capable of performing all of the contract requirements. See id.

We think that the agency's concerns regarding delay were reasonable. As discussed above, the record clearly shows that FAS's proposal was based on the combined experience and past performance of FSSI and Taos/Agility. We agree with the agency that, at a minimum, the protester would need to revise its proposal to address how FSSI would perform the contract on its own, and the agency would need to conduct a new evaluation of FSSI's technical acceptability and past performance. In sum, we think the agency reasonably declined to reinstate FAS's proposal into the competition.  (FAS Support Services, LLC, B-402464; B-402464.2; B-402464.3, April 21, 2010)  (pdf)

Greenleaf asserts that the award to CLF was improper because CLF's proposal misrepresented the resources and staff CLF intended to use to perform the contract. An offeror’s material misrepresentation in its proposal can provide a basis for disqualification of the proposal and cancellation of a contract award based upon the proposal. A misrepresentation is material where the agency relied upon it and it likely had a significant impact upon the evaluation. Integration Techs. Group, Inc., B- 291657, Feb. 13, 2003, 2003 CPD para. 55 at 2-3; Sprint Communications Co. LP; Global Crossing Telecommunications., Inc.--Protests and Recon., B-288413.11, B‑288413.12, Oct. 8, 2002, 2002 CPD para. 171 at 4; AVIATE L.L.C., B-275058.6, B‑275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 11. Based on our review of the record, we find that HUD’s evaluation of CLF’s proposal was unreasonable because it was based on aspects of CLF’s proposed resources and technical approach that, after the submission of CLF’s FPR, and unbeknownst to the agency, materially changed such that the agency never evaluated the awardee’s actual resources and technical approach as they existed at the time of award. (Greenleaf Construction Company, Inc., B-293105.18; B-293105.19, January 17, 2006) (pdf)

Here, even if we assume, arguendo, that AKMI is not, and has never been, affiliated with Keith Moving, Inc., AKMI provided no information in its proposal to suggest that the D&B report, which reflected that AKMI was an alternate name for Keith Moving, Inc., was inaccurate or otherwise unreliable. On the contrary, at the time of the contemporaneous evaluation of proposals, there was sufficient information in AKMI's proposal, particularly when read in conjunction with information in the D&B report, for GSA to reasonably conclude that AKMI was affiliated with Keith Moving, Inc., a firm that had been proposed for debarment, thereby making AKMI ineligible for award.  (Aardvark Keith Moving, B-290565, August 8, 2002)  (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
Task Source/Military Personnel Services Corporation FEPP, LLC B-411173.3: Jul 8, 2015  (pdf) Greenleaf Construction Company, Inc., B-293105.18; B-293105.19, January 17, 2006 (pdf)
FAS Support Services, LLC, B-402464; B-402464.2; B-402464.3, April 21, 2010  (pdf)  
Shinwha Electronics, B-290603; B-290603.2; B-290931; B-290932, B-290932.2, B-291064, September 3, 2002  
Aardvark Keith Moving, B-290565, August 8, 2002  (pdf)  

U. S. Court of Federal Claims - Key Excerpts

On April 28, 2014, Space Exploration Technologies Corp. (“SpaceX”) filed a Complaint in the United States Court of Federal Claims alleging, inter alia, that the United States Air Force (“Air Force”) has entered into an unlawful contract with United Launch Systems, LLC,1 a joint venture between The Boeing Company and Lockheed Martin Corporation, to procure rocket launch vehicles on a sole source basis, pursuant to the Air Force’s Evolved Expendable Launch Vehicle (“EELV”) Program.

(sections deleted)

The April 28, 2014 Complaint alleges that the majority of EELV launch vehicles use RD-180 rocket engines manufactured by NPO Energomash, a corporation owned and controlled by the Russian Government. Compl. ¶ 5. Dmitry Rogozin, the Deputy Prime Minister of Russia, is the head of the Russian defense industry and, in particular, the Russian space program. Compl. ¶ 5; see also http://www.nbcnews.com/storyline/ukraine-crisis.

On March 16, 2014, the President of the United States issued Executive Order 13,661, declaring that,

All property and interests in property [of Deputy Prime Minister Rogozin] that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person (including any foreign branch) . . . are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in[.]

Exec. Order No. 13,661, 79 FED. REG. 15,535, Section 1(a) (March 19, 2014).

On On April 28, 2014, the United States Department of the Treasury, Office of Foreign Assets Control, issued a “Specifically Designated Nationals and Blocked Persons List,” which includes three references to Deputy Prime Minister Rogozin. In addition, on April 28, 2014, the United States Department of State and the United States Department of Commerce issued restrictions banning the export or re-export of “any high technology defense articles or services.” United States Expands Export Restrictions on Russia, http://www.state.gov/r/pa/prs/ps /2014/04/225241.htm; Commerce Department Announces Expansion of Export Restrictions on Russia – April 28, 2014, http://www.bis.doc.gov/index.php/component/content/article/9-bis /carousel/666-commerce-department-anounces-expansion-of-export-restrictions-on-russia.

(section deleted)

After considering the April 28, 2014 Complaint, Executive Order No. 13,661, together with subsequent Executive Branch restrictions, and conducting a hearing on this date, in the court’s judgment, the public interest and national defense and security concerns that underlie Executive Order 13,661 warrant issuance of a preliminary injunction in this case that prohibits:

The United States Air Force and United Launch Services, LLC (“ULS”), a majority owned subsidiary of United Launch Alliance, LLC (“ULA”), and affiliates thereof, including general partners, directors, officers, employees, agents, representatives, predecessors, assigns, joint ventures, subsidiaries, and divisions, from making any purchases from or payment of money to NPO Energomash or any entity, whether governmental, corporate or individual, that is subject to the control of Deputy Prime Minister Rogozin, unless and until the court receives the opinion of the United States Department of the Treasury, and the United States Department of Commerce and United States Department of State, that any such purchases or payments will not directly or indirectly contravene Executive Order 13,661.

The scope of this preliminary injunction does not extend to any purchase orders that have been placed or moneys paid to NPO Energomash prior to the date of this Order.

(Space Exploration Technologies Corp. v. U. S. and United Launch Systems, LLC, No. 14-354C, April 30, 2014)  (pdf)

On February 22, 2011, the Army issued solicitation number W91B4N-11-R-5000 for [National Afghan Trucking] NAT services in Afghanistan.  The purpose of the NAT contract was to provide a secure and reliable means of distributing reconstruction material, security equipment, fuel, miscellaneous dry cargo, and life support assets to operating bases and distribution sites throughout the combined joint operations area in Afghanistan.  The Army anticipated the award of indefinite delivrey/indefinite quantity contracts for trucking services . . . .  The NAT procurement was essentially a follow-on procurement to the prior Host Nation Trucking ("HNT") contract, which had covered substantially the same mission requirements.  The Army awarded NAT contracts to 20 contractors, none of whom had been HNT prime contractors.  (emphasis added by Wifcon.com.)

(pages deleted)

NCL Has Not Shown That the Army Adopted a Politically Motivated Blacklist Precluding NCL from Receiving a NAT Award  (start at p. 33)

NCL claims that it was arbitrarily excluded from the NAT competition because the Army adopted an improper "blacklist" excluding all HNT incumbent contractors.  Plaintiff contends that the Army's blanket exclusion of all HNT contractors, but not HNT subcontractors, based on their nonresponsibility evaluations was contrary to the FAR and the solicitation.  NCL further contends that the Army's nonresponsibility determinations for the HNT incumbent contractors were pretexts for the Army's politically motivated blacklisting of these contractors.

Although Plaintiff denies that it is alleging bad faith, the substance of NCL's argument is that the Army's responsibility determinations were pretextual and manufactured to exclude the HNT contractors from the NAT procurement.  Such an allegation is quintessential accusation of bad faith because it claims that the entirety of HNT contractors' nonresponsibiity determination were unfound fabrications.  See Madison Servs., Inc. V. United States, 92 Fed. Cl. 120, 130 (2010) ( rejecting plaintiff's argument that "bad faith is 'not essential to establish that a cancellation was a pretext'" as "untenable" argument}.  Accordingly, the Court construes Plaintiff's pretext argument as an allegation that NCL's responsibility evaluation was conducted in bad faith.

A bidder alleging bad faith bears a heavy burden of proof to establish its claim with clear and convincing evidence.  See Am-Pro Protective Agency, Inc. V. United States, 281 F.3d 1234, 1241 (Fed. Cir. 2002) (requiring disappointed bidder to make a showing of clear and convincing evidence to support claim that agency did not act in good faith).  As the Federal Circuit has recognized,

[W]hen a bidder alleges bad faith, "[i]n order to overcome the presumption of good faith [on behalf of the government], the proof must ne almost irrefragable."  Info. Tech. Appications Corp. v. United States, 316 F.3d 1312, 1323 n. 2 (Fed. Cir. 2003).  "Almost irrefragable proof" amounts to "clear and convincing evidence."  Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234-40 (Fed. Cir. 2002).  "In the cases where the court has considered allegations of bad faith, the necessary 'irrefragable proof' has been equated with evidence of some specific intent to injure the plaintiff."  Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756, 770 (1982).

Galen Med. Assocs., Inc. v. United States, 369 F.3d  1324, 1330 (Fed. Cir. 2004).

NCL alleges that the Army was apparently under pressure from Congress to exclude HNT incumbent contractors from the NAT procurement.  Plaintiff notes that Congress initiated an investigation of the Army's transportation arrangements in Afghanistan following media reports alleging that HNT contractors made payments to the Taliban and Afghan warlords to ensure safe passage for their trucking convoys.  Subsequently, in June 2010, Congress published a report alleging "that U. S. reconstruction dollars were finding their way into the hands of Afghan warlords and Taliban."  Pl.'s Mot. for J. on the Admin. R. 20-21.  NCL claims that this congressional report prompted the Army to unlawfully exclude all incumbent HNT contractors from the NAT procurement in order to appease Congress.  Id. at 21.

Plaintiff's claim that the congressional report caused the Army to implement a blacklist excluding all HNT contractors from the NAT procurement is conjecture, wholly devoid of record support, and does not come close to making a showing of clear and convincing evidence required to prove bad faith.

The performance concerns identified by the contracting officer in NCL's responsibility determination were not, as Plaintiff contends, "relatiely minor matters of contract administration . . . ."  Pl.'s Mot. for J. on the Admin. R. 21.  Plaintiff's [        ] noncompliance with ITV standards, forged  mission sheets, pilferage, incident of transponder stacking, referral for proposed debarment, taken together reflect serious shortcomings.  The contracting officer's reliance on NCL's documented HNT performance failures was a reasonable business judgment, and the fact that Congress was critical of all HNT contractors' practices does not demonstrate the contracting officer's bad faith toward NCL.  Nor does the existence of this report prove that the contracting officer failed to exercise her independent judgment in NCL's responsibility assessment.

NCL also contends that the Army's disparate treatment of the HNT prime contractors as compared to the HNT subcontractors is evidence that the Army blacklisted these HNT contractors or applied a per se debarment standard to them.  Specifically, Plaintiff contends that the Army systematically rejected all of the HNT prime contractors after subjecting them to a more rigorous responsibility evaluation than the HNT subcontractors.  However, the Army's exclusion of other HNT offerors from the NAT procurement based upon their individualized nonresponsibility determinations is not probative evidence that NCL's responsibility evaluation was unreasonable.  Plaintiffs effort to impugn a contracting officer's individual responsibility determinations of the other HNT prime contractors not only requires Plaintiff to marshal substantial additional proof but would, if seriously pursued, significantly have expanded the record and scope of NCL's bid protest.  Although the responsibility determinations for the NAT awardees are in the AR, the nonresponsibilty determinations for six former HNT prime contractors are not, and Plaintiff did not seek to add them.  See AR 17938-18266.  As such, there is no factual predicate to conduct the disparate treatment analysis Plaintiff urges the Court to undertake.  Plaintiff has failed to demonstrate that the contracting officer implemented a "blacklist" or unfairly excluded all HNT contractors rom the NAT competition.  (NCL Logistics Company, v. U. S., No. 11-535C, March 8, 2013)  (pdf)

IV. Material misrepresentation

Plaintiff’s primary challenge to the award of the Contract is that intervenor made a material misrepresentation in its proposal by listing [ ] as a supplier to be used in the completion of the procurement. In order to establish a material misrepresentation, “plaintiff must demonstrate that (1) [the awardee] made a false statement; and (2) the [agency] relied upon that false statement in selecting [the awardee’s] proposal for the contract award.” Blue & Gold Fleet, LP v. United States, 70 Fed. Cl. 487, 495 (2006) (citation omitted), aff’d, 492 F.3d 1308 (Fed. Cir. 2007); see also Sealift, Inc v. United States, 82 Fed. Cl. 527, 538 (2008). 7/ According to the Federal Circuit,

the submission of a misstatement . . . which materially influences consideration of a proposal should disqualify the proposal. The integrity of the system demands no less. Any further consideration of the proposal in these circumstances would provoke suspicion and mistrust and reduce confidence in the competitive procurement system.

Planning Research Corp. v. United States, 971 F.2d 736, 741 (Fed. Cir. 1992) (illustrating misrepresentation tactic known as “bait and switch” in which offeror submits proposal with the intent to substitute some aspect that it had used to win award). Thus, if plaintiff can establish that (1) intervenor falsely indicated that [ ] was a subcontractor that intervenor intended to use in the work performed under the Solicitation and (2) the [Marine Corps
Systems Command] MCSC relied upon this representation in the awarding of the Contract, then plaintiff has met its burden of proving a material misrepresentation.

As an initial matter, this court rejects defendant’s attempts to vary the misrepresentation analysis depending on where on a procurement time line one examines the statements at issue. See Def.’s Br. filed Jan. 6, 2012, at 20-29. Analyzing misrepresentations that may have occurred at other stages of this protracted legal battle is unnecessary because the controlling issue is whether or not intervenor made a material misrepresentation in its proposal to the MCSC. The MCSC was entitled to rely on intervenor’s representations in its response to the Solicitation, and it is irrelevant that intervenor’s proposal was facially acceptable. See id. at 22. Defendant has mistaken the nature of the analysis called for. It is apparent that material misrepresentation claims arise from proposals that appear facially valid because an agency would make an award based on a patently obvious misrepresentation. Instead, it is the nature of a misrepresentation to appear valid on its face because that validity—indeed appeal— is what leads to reliance by the agency. Thus, courts do not examine the subjective mindset of the agency, but instead look only to whether or not the statement itself constitutes misrepresentation—something that is determinable the moment that it is submitted for agency consideration—and then whether or not the agency relied on that statement in making its award decision. As long as the representation has in fact been made, then it is appropriate to apply the misrepresentation standard, regardless of when the information casting doubt on the statement came to light.

The material misrepresentation claim in this case stems from the information requested of the potential offerors in the Solicitation and the manner in which intervenor structured its proposal. The Solicitation queried offerors, regarding past performance, to provide particular information on at least “2 programs underway or completed during the past 3 years by your subcontractors similar in content and scope to that propose.” AR 365. Among the information to be provided about the offeror’s subcontractors was a “description of relevance to proposed work.” Id. The MCSC informed potential offerors that past performance was the most important factor to be evaluated, and for which the Government would “evaluate how well the Offeror performed on previous relevant efforts of similar type.” Id. at 367.

In response to this particular requirement in the Solicitation, intervenor devoted an entire section to past performance in its proposal. See AR 1154-60. According to intervenor’s proposal, “Tables 3 through 5 contain past performance data for JGB suppliers.” Id. at 1154. Table 3 was titled [ ]. Id. at 1157. Under the first, “Relevance to Proposed Work,” intervenor stated, [ ] and, under the second, [ ]. Id. at 1157-58. Table 4 was listed immediately beneath Table 3 and was titled [ ]. Id. at 1158. Under the first “Relevance” entry, intervenor stated, [ ]. Id. The second “Relevance” entry stated, [ ]. Id.

This court also has examined the technical aspects of intervenor’s proposal in order to appreciate fully the context in which the MCSC considered and evaluated the proposal. Under “Teaming Arrangements” intervenor stated that “JGB is the source for approximately [ ] of the part numbers required . . . . The remaining are produced by a variety of [OEMs] with whom JGB has had long and successful relationships.” Id. at 1161. As noted above, intervenor previously had communicated to the MCSC that its “key tactical fuel and water components OEMs include . . . [ ]. Id. at 145. Intervenor then goes on to detail a teaming arrangement with [ ]. Id. at 1162. Following, under the section “Prime and Subcontractors’ Roles,” intervenor explained that “[s]pecific hardware suppliers will perform as subcontractors to JGB. Their role is to deliver fully compliant hardware, on time, to JGB in response to orders.” Id.

The first issue is whether or not these quoted representations suffice to constitute a representation from intervenor that [ ] was being proposed as a supplier—thereby meaning, based on the language of intervenor’s proposal, that [ ] would be a subcontractor on this effort. Interestingly, a consensus among the parties has emerged that these representations in intervenor’s proposal do indicate that [ ] was being offered as a supplier of [ ] component parts. Defendant’s analysis of the proposal led it to state that “[t]he only reasonable conclusion is that [ ] was a supplier, but that JGB Enterprises would not use [ ] to supply end items in a way that violates the small-business requirements.” Def.’s Br. filed Jan. 6, 2012, at 23. Intervenor also stated that “a review of the proposal will reveal that . . . JGB did mention [ ] as a supplier.” Intvr.’s Br. filed Jan. 7, 2012, at 19. This court agrees with those assessments.

Given that this court has found that intervenor did represent to the MCSC that it was proposing [ ] as a supplier, the next issue is whether or not this representation was false or misinformation. The evidence presented—most notably in the form of the communications that intervenor had with the SBA—indicate that the proposing of [ ] was< a means utilized by intervenor to secure a high past-performance rating. In response to inquiries from the SBA, intervenor stated, as follows:

The intended purpose for including the past performance of [ ] in our proposal was to provide other relevant information as required by the proposal instructions. In particular the [ ] . . . is an item that past procurement history rests exclusively with [ ] . . . . You will notice that every purchase of this item by the military since 2005 has been awarded to [ ]. Our intention as previously stated in this letter was to either manufacture this item ourselves or thru [sic] another viable small business manufacturer. [ ] was simply listed as they are the only previous supplier [ ] that we listed in our proposal. We would only use [ ] as a technical reference point if questions arose during our assembly of the item.

AR 2127. In light of all the evidence, this explanation is equivocal.

Intervenor’s position is that it provided this information to the MCSC because in all other instances the military procured this part through [ ]. In other words, intervenor wanted to list [ ] in the past performance section of its proposal, not because it had a supply arrangement in place for this particular contract, but simply because the MCSC was familiar with [ ]. This begs the obvious question why list a fact that the MCSC (1) already knows, and (2) is completely irrelevant for the manner in which intervenor intended to satisfy the demands of this procurement. The equally obvious answer is that intervenor was seeking to bolster its past-performance evaluation, given that this was the most important factor in the award under the Solicitation.

When pressed about [ ] involvement with this procurement, intervenor stated that [ ] would only “supply” it with technical services to help intervenor manufacture the part itself.  This explanation of the duties to be preformed by [ ]is not supported by the record that was available when the representations were made to the MCSC. Absolutely no evidence in the technical section of intervenor’s proposal indicates that one of the duties of its subcontractors was to act as a “technical reference point.” See AR 1160-67. Moreover, the SBA found that “[t]here are no other indicia of potential affiliation between JGB and [ ] such as joint venture agreements, financial agreements or other contractual agreements.” Id. at 1985. It is inconceivable that [ ] would be providing technical information to a separate business without a contract in place that provides it with remuneration for its services, thereby leading this court to wonder whether [ ] is even aware of the role that intervenor has assigned to it. Based on the evidence presented, this court finds that the listing of [ ] as a supplier in the proposal was a misrepresentation of the role that [ ] was to play in performance should intervenor win the award, given that intervenor explicitly stated to the SBA that it was never intervenor’s intent to use [ ] as a supplier of the parts for which it listed past performance.

The final issue is whether or not the MCSC relied on the misrepresentation when making the award decision. Again, the answer must be in the affirmative based upon the TET’s narrative evaluation of interveor. See AR 1297-98. Under the past performance evaluation section, the TET gave intervenor a [ ] rating based on [ ]. Id. at 1297. Although this statement by itself is vague, the technical factor evaluation narrative provides the necessary context. In giving intervenor an [ ] technical rating, the TET stated, “Teaming arrangements with: [ ]. Proposed work by prime and subcontractors adequately addressed.” Id. at 1298. It is not at all apparent why the MCSC inferred a teaming arrangement between [ ] and intervenor. However, what that explanation does show is that MCSC placed great emphasis on the fact that [ ] involvement was delineated in intervenor’s proposal, and, consequently, the TET awarded intervenor high marks in the two most important evaluation factors. Defendant even concedes that “the Marine Corps based its evaluation in part upon its belief that [ ] was a supplier in some capacity.” Def.’s Br. filed Jan. 6, 2012, at 25. In addition, this court notes that the MCSC was justified in thinking that the listing of [ ] past-performance information indicated that it was being proposed as a subcontractor, given that the instructions in the Solicitation required potential offerors to list past performance information for “your subcontractors.” AR 365. The MCSC can be excused for not assuming that [ ] was being listed simply because it had previously supplied the Corps with those component parts on separate, unrelated occasions. In fact, this is the only rational way to interpret intervenor’s listing [ ] past performance.

Therefore, this court finds that plaintiff has met its burden by showing that intervenor made a material misrepresentation in listing [ ] past performance; that this constitutes a clear violation of an applicable procurement regulation, FAR 52.212-2; that intervenor represented to the MCSC that [ ] was being proposed as a supplier and a subcontractor for this procurement; and that the MCSC’s evaluation showed that the agency relied on the misrepresentation in evaluating intervenor’s past performance, which was prejudicial to plaintiff.  (GTA Containers, Inc., v. U. S. and J.G.B. Enterprises, Inc., No. 11-606C, February 6, 2012)  (pdf)

C. The Air Force Decision Not to Reinstate FAS in the TSBMC Procurement

The suspension of FAS required its removal from competition for the TSBMC. This left the Air Force with one offeror, VBR, for the contract award. After FAS divested its 49% owner, Taos-Agility, and DLA then removed FAS from the EPLS, FAR 9.405(d)(3) provided that the contracting officer “may, but is not required to, consider” the proposal FAS had previously submitted. Plaintiff asserts that the contracting officer’s exercise of the discretion provided by FAR 9.405(d)(3) must be closely scrutinized to fulfill the mandates of the Competition in Contracting Act of 1984 (“CICA”), Pub. L. No. 98-369, § 2713, 98 Stat. 1175, 1182 (1984). See Birch & Davis Int’l, Inc. v. Christopher, 4 F.3d 970, 974 (Fed. Cir. 1993). The CICA requires full and open competition. 41 U.S.C. § 253(a)(1)(A). Competition is required so that “a sufficient number of offers is received to ensure that the government’s requirements are filled at the lowest possible cost.” H.R. Rep. No. 1157, 98 Cong., 2d Sess. 17 (1984). See th United States v. Thorson Co., 806 F.2d 1061, 1064 (Fed. Cir. 1986).

Defendant and intervenor argue that close scrutiny is not required for the FAR 9.405(d)(3) decision not to reinstate FAS, but if required, even under this level of scrutiny the decision was reasonable. Plaintiff argues that the contracting officer abused her discretion in deciding not to reinstate FAS and that the decision lacks a reasonable basis. FAS asserts that the contracting officer’s concern with the delay involved in reinstating FAS was not reasonable. Reliance is placed on the short response time given to FAS in a draft list of questions concerning the responsibility determination the contracting officer would have to make had Taos-Agility remained one of the owners of FAS. However, there is a considerable difference between the time that would be required to explain the Taos-Agility function in an unchanged FAS proposal and the time required to redraft and submit a new proposal without Taos-Agility involvement and for the Air Force to complete the required evaluations and discussions on such a new proposal. The evaluations and discussions on the  proposal FAS submitted on May 22, 2009, were not completed until September 30, 2009. (AR 002158.) Plaintiff also indicates that the contracting officer on the date of issuing her seven-page “Justification” for not reinstating FAS had knowledge of the agency-level protest that FAS submitted on the same date requesting reinstatement. Since an award could not be made until the protest was concluded, plaintiff argues that delay involving a new FAS proposal in the procurement, was not a reasonable concern because there would be delay in any event due to the protest. FAS’s protest does not refer to the contracting officer’s Justification and the Justification does not refer to the protest, indicating that neither party had knowledge of the other’s submission when drafting their own. The fact that delay could occur from a protest submission in no way impacts whether the contracting officer’s concern over delay a new FAS proposal eliminating Taos-Agility would engender was reasonable.

A close examination of the reasons given for the decision not to reinstate FAS after it had divested its Taos-Agility ownership leads to the conclusion that the reasons have a rational basis. Delay was a factor and the contracting officer’s Justification in this regard demonstrates a rational basis for the conclusion reached. The full and open competition requirement of CICA was not violated. There was competition up to the point where FAS was suspended and the price proposals of the two competitors were evaluated. FAS did not change its price proposal in its FPR, whereas VBR substantially lowered its already lower price proposal in its FPR and retained this lower price up to award. Based on this history, the contracting officer rationally concluded that with the substantial challenges ahead that FAS would face, were it to be reinstated, it was unlikely that FAS would lower its price proposed, when it had not done so previously. In this circumstance, with the award to VBR, the Air Force obtained the lowest possible cost that competition, as required by CICA, was intended to achieve.

Finally, the contracting officer in her Justification for not reinstating FAS concluded that with the divesting of Taos-Agility, entities that FAS relied upon in its proposal for performance, resources and past performance, FAS’s higher price, and the challenges ahead in submitting and obtaining successful evaluations for a new proposal, FAS did not have a reasonable chance to receive the award of the TSBMC. In this procurement protest matter the issue is whether the agency action has a rational, reasonable basis. Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332-33 (Fed. Cir. 2001); Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989). For the reasons stated in the Justification issued by the contracting officer, the suspension of Agility-Taos, resulting in the removal of 49% of the ownership of FAS, and the challenges this presented to the viability of a new FAS proposal, comprised a rational basis for her conclusion that the reorganized FAS, at this stage of the procurement, had no reasonable chance of obtaining the award of TSBMC. Plaintiff has failed to meet the heavy burden of demonstrating a lack of rational basis for the contracting officer’s decision in the record of this protest.  (FAS Support Services, LLC v. U. S. and Vinnell Brown & Root LLC, No. 10-289C, August 4, 2010)  (pdf)  See above FAS Support Services, LLC, B-402464; B-402464.2; B-402464.3, April 21, 2010  (pdf)

The United States Court of Appeals for the Federal Circuit held in Planning Research Corp. v. United States, 971 F.2d 736 (Fed. Cir. 1992) that:

[T]he submission of a misstatement . . . which materially influences consideration of a proposal should disqualify the proposal. The integrity of the system demands no less. Any further consideration of the proposal in these circumstances would provoke suspicion and mistrust and reduce confidence in the competitive procurement system.

Id. at 741 (citation omitted).

Therefore, to establish a material misrepresentation, Sealift must demonstrate both that TAL intentionally made a false statement and that MSC relied on that false statement in awarding the contract to TAL. See Blue & Gold Fleet, LP v. United States, 70 Fed. Cl. 487, 495 (2006) ("To establish a material misrepresentation, plaintiff must demonstrate that (1) [the awardee] made a false statement; and (2) the [agency] relied on that false statement in selecting [the awardee’s] proposal for the contract award. . . . To preserve the integrity of the solicitation process when such a material misrepresentation influences the award of the proposal, the proposal is disqualified from consideration.") (citations omitted), aff'd, 492 F.3d 1308 (Fed. Cir. 2007); see also Northrop Grumman Corp. v. United States, 50 Fed. Cl. 443, 468 (2001) ("[I]t is quite common for proposals to fall short of their assertions; it is not something to be punished unless the errors were willful and egregious."). Intent may be established by circumstantial evidence. See Planning Research Corp., 971 F.2d at 742 ("This court has held that intent frequently must be proved by circumstantial evidence.”) (citing Klein v. Peterson, 866 F.2d 412, 415 (Fed. Cir. 1989)).

In awarding this contract, MSC advised that:

It is useful to compare the offered rate to previous contract awards for comparable vessels under similar requirements. . . . Th[ese] comparisons provide support that the rates offered by [TAL] and Sealift under this procurement are both highly competitive and very reasonable.

AR 1985.

MSC's price analysis also stated that: [T]he daily rate proposed by [TAL] is considered fair and reasonable based on price competition and comparison with previous competitively awarded prices for comparable vessels under similar requirements in accordance with FAR [] 15.404- 1(b)(2)(i) and (ii)15 respectively.

AR 1992.

Sealift's primary evidence that TAL misrepresented the Bonito's warranted fuel consumption is the Raggio Declaration that relies on a single data point found on a website. See AR 2266. The Government, however, states that: "[t]o assess [TAL]'s compliance with its fuel warranties, it is necessary to gather information on the vessel's speed, weather conditions, load, and fuel consumption for each voyage the vessel makes." See AR 2513. Sealift agrees that "[g]auging actual fuel consumption requires some research, judgment, and initiative" in addition to "expert review of the varying factors that affect vessel operations." Pl. Mem. at 16.

The March 31, 2006 Solicitation provided that the "[c]ost of fuel consumed will be based on an operational scenario of 60% underway laden at 12 knots . . . , 28% in-port idle . . . , and 12% in-port discharge[.]" AR 1572. The Raggio Declaration, however, only considered the Bonito's fuel consumption "when steaming at 12 knots." AR 2266 (Raggio Declaration ¶ 6). Moreover, it did not consider the March 31, 2006 Solicitation’s required “operational scenario.” See AR 1572. The Raggio Declaration also assumed that "[t]he slightly larger engine on the Bonito should have a fuel consumption no less than that of the Montauk." See AR 2266 (Raggio Declaration ¶3) (emphasis added). Other evidence, however, indicates that the Montauk burned 188 grams of fuel per KWH under a 100 percent load and 187 grams of fuel per KWH under an 85 percent load, while the Bonito burned 182 grams of fuel per KWH, under a 100 percent load, and 180 grams of fuel under an 85 percent load. See AR 2266, 2476-77, 2481 (citing http://www.sea-web.com, an online service of LLOYD'S LIST). Sealift did not challenge this data.

Nordtank does not guarantee or warrant the data on the website. See AR 2301-07. In addition, the cases cited by Sealift are not precedential and do not stand for the proposition that fuel consumption rates on a website are warranted. See Pl. Reply at 5. Instead, they hold that a representation of fuel consumption in a charter may create a warranty in certain circumstances. See Transatlantic Lines, LLC, Soc’y of Mar. Arb., No. 3834 (Nov. 4, 1998) (determining that "speed and fuel consumption capabilities" were incorporated into a contract through an annex); see also Denholm Shipping Co., 47 F.2d at 214-15 ("[A] description of a ship's capacity, in speed, as well as in any other respect, when inserted in the body of a charter, will support a suit for damages.") (citation omitted) (emphasis added); The Atlanta, 82 F. Supp. at 230 (a statement as to speed and fuel consumption in a charter results in a warranty "rather than a representation, even though the statement is not expressly designated as a warranty").

Accordingly, the court has determined that the Bonito's fuel consumption rate, posted on Nordtank's website, does not evidence a material misrepresentation by TAL, particularly since Sealift has not proffered any independent evidence that the information on Nordtank's website was reliable. See AR 2301-07. In addition, the Administrative Record contains no evidence that the Bonito did not achieve a consumption rate of [redacted] barrels per day, although the court afforded Sealift the opportunity to supplement the Administrative Record with post-award information. See AR 2536-3047; see also 1/17/08 TR 38, 41-42.

For these reasons, the court has determined that, as a matter of law, Sealift did not establish a false statement was made by TAL to the CO. See Blue & Gold Fleet, LP, 70 Fed. Cl. at 495.  (Sealift, Inc., v. U. S., No. 07-627C, July 11, 2008) (pdf)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
NCL Logistics Company, v. U. S., No. 11-535C, March 8, 2013  (pdf) Space Exploration Technologies Corp. v. U. S. and United Launch Systems, LLC, No. 14-354C, April 30, 2014  (pdf)
FAS Support Services, LLC v. U. S. and Vinnell Brown & Root LLC, No. 10-289C, August 4, 2010  (pdf) 

See above FAS Support Services, LLC, B-402464; B-402464.2; B-402464.3, April 21, 2010  (pdf)

GTA Containers, Inc., v. U. S. and J.G.B. Enterprises, Inc., No. 11-606C, February 6, 2012  (pdf)
Sealift, Inc., v. U. S., No. 07-627C, July 11, 2008  (pdf)  


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