This month’s Bid Protest Roundup highlights two Court of Federal Claim decisions, addressing past performance and injunctive relief, and one by the U.S. Government Accountability Office (“GAO”), clarifying the applicability of new regulatory requirements to existing IDIQs.
AcmeSolv, LLC v. United States[1]
AcmeSolv, Inc., a Small Business incumbent on a set-aside cybersecurity service contract challenged the United States Department of Agriculture’s award to Arlluk Technology Solutions, LLC. The protestor challenged the past performance evaluation and best value tradeoff analysis.
Agencies must evaluate past performance in a manner both reasonable and consistent with the solicitation criteria and applicable law. A protestor, however, is not entitled to an exhaustive comparison of past performance. Here, the protestor argued the review was arbitrarily “superficial” because the agency considered only “top of the line” ratings in each questionnaire and contractor performance assessment evaluated. Consequently, the agency allegedly failed to consider the “depth and breadth” of the protestor’s past performance and ignored the context and trends of performance as required by the solicitation and the Federal Acquisition Regulation (“FAR”), engaging instead in a purely mathematical and quantitative approach.
As evidence, the protestor pointed to two documents. First, the protestor cited to the Source Selection Decision Document, which noted the awardee received a High Confidence rating because “the majority of questionnaires” rated the awardee’s performance as “Exceptional” and only one as “Satisfactory.” Second, one evaluator’s worksheet for the awardee stated that, “since there were three submissions, one was satisfactory and two were exceptional, this averages to high confidence.” The protestor argued this fact proved the agency simply counted the number of “Exceptional” ratings when assigning its overall confidence rating.
The court disagreed. Simply put, given that six evaluators submitted worksheets, if one conducted a “quantitative” past performance analysis, that did not upend the entire evaluation or prove that the work of the other five evaluators, the Source Selection Evaluation Board, and the Source Selection Authority, did not “collectively constitute a substantive review of past performance.” Indeed, a worksheet from another evaluator showed more in-depth analysis, discussing the awardee’s experience and skills.
The protest also foundered for want of prejudice. The court noted, that even had the protestor received a “High Confidence” rating for past performance, that would only put it on par with the awardee for non-price factors. The solicitation stated that price equaled all non-price factors in weight. The protestor’s proposal suffered from a $2.1 million premium. The record forestalled the protestor’s attempts to argue that its “Satisfactory” technical rating was superior to the awardee’s, and therefore—but for the erroneous past performance evaluation—it had a superior non-price proposal. The Source Selection Authority found the awardee’s technical rating superior to the protestor’s, citing two discriminators, and explained that even if the protestor’s non-price factors were increased, it would not warrant the substantial price premium because the awardee’s proposal was satisfactory, and the savings could be used elsewhere.
Takeaways
AcmeSolv is a timely reminder that success in a bid protest requires not only uncovering agency error, but also a showing that such error had a prejudicial effect on the source selection decision. Absent a demonstration of a material and prejudicial flaws in the evaluation of offers, a protest cannot succeed.
Orion Government Services, LLC v. United States[2]
Orion illustrates the substantial challenges faced by a protestor in obtaining a preliminary injunction at the Court of Federal Claims. Orion Government Services, LLC challenged the U.S. Army Corps of Engineers award of a $181,551,864.00 firm-fixed-price contract to McCarthy Building Companies, Inc. for construction services in the Port of Houston. The protestor argued the agency erred by conducting a flawed price reasonableness analysis and failing to evaluate proposals for unbalanced pricing. The court disagreed. The court, moreover, noted that Orion failed to demonstrate irreparable harm, without which the protestor was not entitled to a preliminary injunction irrespective of any likelihood of success on the merits.
A protestor at the Court of Federal Claims may obtain a preliminary injunction by showing (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. Although no single factor is dispositive, the first two are the most important and must be established. This contrasts with the GAO, where protesters obtain an automatic stay of contract performance upon filing a protest within 10 days of award or five days of a required debrief.
The protestor argued that the agency erred when it found the awardee’s price reasonable on the basis that it was “within 25% of the Independent Government Estimate,” because that sort of determination did not equate to a price reasonableness analysis, which looks at whether a price is too high. Before considering the facts, the court noted that such a method is not only permitted but described in the FAR as acceptable. The court then turned to the record, which showed that the agency compared proposed prices to the IGE and to the other offerors before making a considered tradeoff analysis. Because the record showed the agency made a deeper analysis that the rote calculation the protestor complained of, the court was unpersuaded that the agency’s price analysis was improper.
The protestor’s other price-related argument, that the agency failed to consider whether the awardee’s pricing was unbalanced, also failed. The protestor argued that the awardee underbid line items that were less likely to be performed and overbid those that were more likely to be performed. If the agency had evaluated proposals for unbalanced pricing, the protestor maintained, the agency would have found the proposed prices of all other offerors to be unbalanced. The court was not convinced.
The agency pointed out that the evaluation board report noted that the cost/price team “evaluated for the appearance of unbalanced pricing,” and reviewed prices “for variation from the IGE, errors, and/or omissions.” Those few words sufficed. The court held that while the evaluation board’s report “may not detail USACE’s analysis,” the evidence showed the agency evaluated unbalanced pricing “on some [acceptable] level.”
The court then considered the protestor’s allegation of irreparable harm and found it wanting. To show irreparable harm, a protestor must demonstrate a financial injury “both certain and great” with “an immediate and substantial impact.” According to the court, a protestor must show with facts or evidence an economic loss that “threatens the survival” of the protestor’s business. The court found the protestor’s broad assertions problematic, especially when juxtaposed to the agency’s declaration that a performance pause posed significant safety concerns to commercial vessel traffic and an additional cost to the Federal taxpayer of $9.44 million to procure critical dredging through a separate contract.
Takeaways
Illustrating the uphill challenges protestors face in obtaining a preliminary injunction at the Court of Federal Claims, Orion underscores the reason GAO is often the preferred forum of choice for bid protests. With an automatic stay of performance when a protest is filed within 10 days of award, or within five days of a required debriefing, the GAO alleviates the need to meet the exacting preliminary injunction four-part test. Other considerations, including more fulsome discovery and greater opportunities for oral arguments, may tip the scales back in favor of the court. Disappointed offerors do well to consider the unique advantages, and disadvantages, of both forums when deciding where to file their complaint.
Walsh Construction Company II, LLC[3]
In Walsh Construction, the GAO clarified that project labor agreement (“PLA”) regulations do not apply to new task orders under existing IDIQs. Walsh Construction Company II, LLC, protested the amended terms of a U.S. Army Corps of Engineers solicitation for the repair and renewal of the Naval Hospital Bremerton, in Jackson Park, Washington after the agency removed the requirement that offerors submit a valid PLA.
In connection with large-scale construction projects the FAR now requires that every contractor and subcontractor to enter a PLA with one or more labor organizations.[4] The FAR Council, pursuant to Executive Order 14063, issued a final rule on PLAs as prescribed in FAR subpart 22.5., effective January 2024. The agency issued the task order solicitation to all seven holders of the USACE’s multiple award task order contracts (“MATOCs”) for integrated design-build initial outfitting construction services in support of the Defense Health Agency’s medical sustainment, restoration, and modernization mission. The agency had awarded the MATOCs in February 2023, well before the FAR Council’s final rule on PLAs, which consequently did not contain the relevant FAR clause, 52.222-34.
When issuing the task order solicitation in July 2024, the agency initially included the FAR provision requiring a PLA and emphasized the necessity of a PLA in two subsequent amendments, but then removed the requirement in October 2024, following a protest and subsequent corrective action. The amended solicitation explained that because the MATOCs were issued before the effective date of the PLA rule, and the MATOCs had not been bilaterally modified to include the PLA clause, the PLA requirement was not applicable to the task order solicited.
The Protestor argued the removal of the PLA requirement violated applicable regulations as the task order was issued after the effective date of the FAR PLA regulations, the project value exceeded the dollar threshold, and the agency had not issued an exception. Moreover, the protestor argued it was competitively prejudiced by the elimination of the PLA requirement because it had entered into, and so was bound by, a PLA when its competitors were under no such obligations following the solicitation amendment.
The GAO sided with the agency. The E.O. required agencies to consider implementing exceptions when awarding contracts. The GAO reasoned the timing made it “readily apparent” that an agency’s authority to include PLA requirements in a task order depends on whether the the PLA clause is included in the underlying IDIQ contract. Moreover, neither the E.O. nor the FAR prescription contemplated retroactive application. Therefore, the agency lacked the authority to include PLA requirements in subsequent task order absent modifications to the MATOCs.
Takeaways
Walsh Construction clarifies that absent modifications incorporating the required PLA clause into the underlying IDIQ, agencies may not add PLA requirements to task orders solicited under pre-2024 IDIQs. Contractors in the construction industry do well to check the terms of any existing IDIQs to ascertain whether they contain the PLA clause or not. The decision has broader implications as well. Although explicitly discussing only PLA requirements under MATOCs, by logical extension the GAO’s reasoning applies to any novel requirement prescribed by a final rule whose effective date follows issuance of the base IDIQ. Potential offerors should be prepared to file pre-award protests to claim foul where such a requirement harms their interests.
[1] AcmeSolv, LLC v. United States, No. 24-1282 C, 2025 (Fed. Cl. Feb. 6, 2025) (reissued Feb. 11, 2025)
[2] Orion Government Services, LLC v. United States, No. 25-71 (Fed. Cl. Feb. 4, 2025) (reissued Feb. 13, 2025)
[3] Walsh Construction Company II, LLC, B-423075.2, Feb. 20, 2025, 2025 CPD ¶ _.
[4] In a January 21, 2025, decision, the U.S. Court of Federal Claims found PLA’s unlawful for violating the Competition in Contracting Act. See MVL USA, Inc. et al. v. United States, No. 24-1057, 24-1077, 24-1144, 24-1219, 24-1398, 24-1433, 24-1461. As a result, class deviations have begun to follow.
[View source.]
