In the United States Court of Federal Claims
BID PROTEST
)
AGMA SECURITY SERVICE, INC., )
)
Plaintiff, )
) No. 21-1892C
v. ) (Filed Under Seal: January 31, 2022 |
) Reissued: March 23, 2022)
THE UNITED STATES OF AMERICA, )
)
Defendant. )
)
Alan Grayson, Orlando, FL, for Plaintiff.
Vincent D. Phillips, Jr., Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, Washington, DC, for Defendant, with whom were, Douglas K. Mickle, Assistant
Director, Patricia M. McCarthy, Director, and Brian M. Boynton, Acting Assistant Attorney
General. H. Weston Miller, U.S. Department of Homeland Security, Washington, DC, Of
Counsel.
ThisOpinion was originally issued under seal, and the parties were given the opportunity to
request redactions. In response, Plaintiff, AGMA Security Service, Inc. (“AGMA”), did not
request redactions. The government, however, asked to redact the names of offerors other than
AGMA and the awardee, Kerberos International, Inc. (“Kerberos”), to protect “the business
proprietary pricing data of these other offerors.” The government also requested that the Court
redact several details of Kerberos’ price proposal that are not publicly available.
The Court may restrict public access to records which contain “business information that
might harm a litigant’s competitive standing,” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589,
598 (1978). But that authority to shield parts of its Opinion from the public view is subject to the
“strong presumption in favor of a common law right of public access to court proceedings.” In re
Violation of Rule 28(D), 635 F.3d 1352, 1356 (Fed. Cir. 2011).
In the Court’s view, the government’s proposed redactions appropriately shield
information that could affect an offeror’s competitiveness without obscuring for the reader the
facts and rationale that underpin the Court’s disposition of AGMA’s claims. The Court,
therefore, reissues its Opinion with some offerors’ names and sensitive pricing information
redacted.
OPINION AND ORDER
KAPLAN, Chief Judge.
The plaintiff in this post-award bid protest is AGMA Security Service, Inc. (“AGMA”). It
challenges the decision of the Federal Protective Service (“FPS” or “the agency”) to award a
contract to provide security services at Customs and Border Protection facilities in Puerto Rico to
Kerberos International, Inc. (“Kerberos”). AGMA contends that the award decision was
arbitrary, capricious, and contrary to law in a number of respects.
Specifically, it claims: (1) that FPS improperly awarded the contract to Kerberos without
evaluating AGMA’s technical proposal to determine whether it provided better value to the
government; (2) that the agency violated provisions of the solicitation governing the calculation
of total evaluated price; (3) that it was arbitrary for the agency to conclude that Kerberos’
proposal raised no price-realism concerns; (4) that the agency’s assignment of the highest
adjectival rating to Kerberos’ technical proposal for the past performance factor was inconsistent
with the record; (5) that FPS should have disqualified Kerberos based on nonresponsibility
because it did not possess certain licenses at the time of contract award; and (6) that the agency
failed to appreciate a number of legal issues raised by the exclusivity clause contained in the
teaming agreement between Kerberos and its partner, the COGAR Group, Ltd. (“COGAR”).
Currently before the Court are the parties’ cross-motions for judgment on the
administrative record. See Pl.’s Mot. for J. on the Admin R. and Mot. for Permanent Inj. (“Pl.’s
MJAR”), ECF No. 14; Def.’s Cross-Mot. for J. on the Admin R. and Resp. in Opp’n to Pl.’s
Mot. (“Def.’s MJAR”), ECF No. 15. For the reasons set forth below, the Court concludes that
AGMA’s arguments lack merit. FPS’ decision to award the contract to Kerberos was not
arbitrary and capricious, an abuse of discretion, or contrary to law. Therefore, AGMA’s motion
for judgment on the administrative record, ECF No. 14, is DENIED, and the government’s
motion, ECF No. 15, is GRANTED.
BACKGROUND
I. The Solicitation
FPS issued Solicitation No. 70RFP120RE2000002 (“the Solicitation”) on August 25,
2020. Admin. R. (“AR”) Tab 5 at 325. The Solicitation invited proposals from entities
participating in the Small Business Administration’s 8(a) program to provide armed security at
Customs and Border Protection facilities in Puerto Rico over a one-year base period and four
one-year option periods. Id. at 325–26. The Solicitation contemplated the award of a firm-fixed
price, indefinite delivery/indefinite quantity contract, with the acquisition conducted in
accordance with the procedures set forth in Federal Acquisition Regulation (“FAR”) Part 12. AR
Tab 1a at 2; AR Tab 1b at 4; AR Tab 5 at 621. It specified that the five-year period of
performance would run from April 1, 2021, to March 31, 2026. AR Tab 5 at 326.
2
A. Contents of Proposals
1. Technical Proposal
The Solicitation instructed offerors to submit a technical proposal documenting their
relevant past performance and management approach. Id. at 623–29. For the past performance
component, offerors could submit up to three contracts that they were performing at the time or
had performed within the previous three years. Id. at 624. If an offeror’s proposal included a
teaming arrangement (as the awardee’s did in this case), the offeror could also submit up to three
of its partner’s contracts. Id. at 624–25. The Solicitation explained that FPS would compare the
past performance examples with the work requirements in the Solicitation and evaluate their
relevance and quality. Id. at 624.
The Solicitation also directed offerors to detail their management approach in their
technical proposals. Id. at 626–29. Specifically, the Solicitation instructed offerors to describe
their plans for providing onsite supervision of armed security officers and for conducting
inspections as part of their quality control efforts. Id. at 626–28. In addition, the Solicitation
required offerors to propose transition timelines that outlined the steps they would take to
prepare to perform the contract. Id. at 628–29.
2. Price Proposals
In addition to their technical proposals, offerors were also required to submit price
proposals. Id. at 629–32. Using a schedule contained in the Solicitation, those proposals were to
include prices for each contract line item in the base period and in each of the four option
periods. Id. at 629–30. In addition, the Solicitation required offerors to aggregate line-item costs
and submit total estimated prices for each work period. Id. at 630.
“To ensure the submission of an adequate price element breakdown,” the Solicitation
suggested that the contractor complete a “Price Element Breakdown” worksheet. Id. Offerors
were advised in the Solicitation that the agency “may use this breakdown to conduct a price
realism evaluation for the purpose of measuring the Contractor’s understanding of the
solicitation requirements and for assessing the performance risk inherent in the Contractor’s
price.” Id. at 631.
B. Licensing Requirement
The Solicitation’s statement of work (“SOW”) enumerated the requirements for
performance under the contract. See generally id. at 385–466 (SOW). Included among those
requirements, and relevant to the present protest, are provisions concerning the contractor’s
obligations: (1) to “obtain required licenses and permits for company and/or contract employees
prior to [armed security officers] standing post,” id. at 401; (2) to “maintain valid licenses and
permits throughout [the] contract period,” id.; and (3) to “obtain, possess, and maintain state
and/or local requirements . . . prior to commencement of work under this contract,” including
“[b]usiness and corporate licenses to operate as a commercial security service” and “[l]icenses
3
and permits for employees to be armed and have the authority to detain person(s) suspected of
committing crimes,” id. at 402.
C. Evaluation Scheme Overview
The agency’s source selection plan provided that adjectival ratings would be assigned to
both the past performance and management approach components of offerors’ technical
proposals. See AR Tab 4f at 274–75. The ratings ranged from “Highly Acceptable” on one end,
to “Unacceptable” on the other. Id. In addition, the scheme included a “Neutral” rating
applicable only to the past performance factor and where an offeror had “[n]o relevant
performance record . . . upon which to base a meaningful performance risk prediction.” Id. at
275.
The Solicitation described how FPS would evaluate offerors’ price proposals. See AR
Tab 5 at 629–31. First, FPS would add the aggregate prices for the base period and the four
option periods to calculate each offeror’s total price. Id. at 629. Then, to account for the
possibility that FPS would exercise its “unilateral option” pursuant to FAR 52.217-8 to extend
the contract for six months beyond the end of any work period, FPS would add to an offeror’s
total price “six months of the offeror’s final option period price” to arrive at an offeror’s total
evaluated price. Id.
The Solicitation stated that FPS would award a contract “to the responsible offeror whose
offer conforming to the solicitation will be most advantageous to the Government, price and
other factors considered,” and specified that “[t]he technical evaluation factors, when combined,
are more important than price.” Id. at 621; see also FAR 52.212-2. Likewise, the Solicitation
explained that FPS would determine whether an offeror’s price, “in combination with the other
evaluation factors specified in the solicitation, represents the best value to the Government.” AR
Tab 5 at 629.
D. The Efficient Competition Provision
The evaluation scheme also included a so-called “efficient competition” provision. See
id. at 622–23. In that provision, FPS reserved the right in certain circumstances not to evaluate
all of the technical proposals it received, stating as follows:
[T]he Government contemplates the possibility that it may identify an offer(s) of
such a high technical quality that it would not be in the Government’s interest to
pay an additional price premium for any additional technical (non-price) advantage.
As a result, offerors are advised that the Government may not evaluate the technical
proposals of all offerors under this RFP. The Government will first review the total
evaluated price of all proposals received. The technical proposals of those offerors
whose pricing is determined by the Contracting Officer to be most competitive may
be reviewed prior to, or instead of, other technical proposals received. Based on the
initial review of these technical proposals, the Government may not evaluate the
technical proposals of other offerors, whose total evaluated pricing was higher than
that of one already evaluated and already assigned the highest possible technical
4
The CO also calculated the average price of all proposals (excluding the highest-priced
proposal). Id. at 1835. That average price was $23,085,773.13. Id. AGMA’s price proposal was
approximately $267,932 higher than that average. See id. at 1834–35.
B. The Evaluation of Kerberos’ Technical Proposal
Based on the pricing comparison set forth above, the CO invoked the efficient
competition provision and referred only the three lowest-priced proposals ([* * *] and Kerberos)
to the technical evaluation team (“TET”). See id. at 1834–35; see also AR Tab 23 at 1438–86.
For each technical proposal, the TET evaluated the offeror’s relevant past performance and
management approach, and it assigned an adjectival rating to each factor. See AR Tab 23 at
1445–74.
The TET assigned “Highly Acceptable” ratings to Kerberos’ technical proposal as to both
past performance and management approach. Id. at 1474; see also id. at 1453–63 (Kerberos’
evaluation).2 The other two offerors received “Acceptable” ratings for both technical factors. Id.
at 1474; see also id. at 1445–53 ([* * *] evaluation), 1463–74 ([* * *] evaluation).3
1. Past Performance
Kerberos’ “Highly Acceptable” past performance rating was based on the TET’s
evaluation of both Kerberos’ past performance and that of its teaming partner, COGAR. See id.
at 1453–60; see also AR Tab 5 at 625 (explaining that offerors may submit additional reference
projects to demonstrate the relevant past performance of teaming partners).
2
A “Highly Acceptable” rating is assigned where the “[p]roposal meets and exceeds the
requirements for an acceptable rating” and where the proposal demonstrates “a high probability
of success in contract performance” based on the following:
(1) the proposal exceeds the solicitation requirements; (2) the proposal offers
innovations and/or creative approaches that are beneficial to the Government; (3)
the proposal demonstrates a superior understanding of the solicitation requirements
and/or; (4) the level of performance risk associated with the proposal is
substantially less than the level expected from a competent Contractor[.]
AR Tab 23 at 1444.
3
An “Acceptable” rating is appropriate where a “[p]roposal meets all the requirements of the
solicitation with no deficiencies or affirmative exceptions to the solicitation requirements.” AR
Tab 23 at 1444. An “Acceptable” proposal demonstrates that the offeror has “[a] good
probability of success in contract performance” as demonstrated by the fact that “(1) the proposal
reflects a satisfactory understanding of the solicitation requirements; and (2) the level of
performance risk associated with the proposal is no more than the level expected from a
competent Contractor.” Id.
6
The TET reviewed references for three contracts for security services that Kerberos was
performing at the time it responded to the Solicitation. AR Tab 23 at 1453–56. It determined that
the first contract, which was with the Centers for Medicare and Medicaid Services (“CMS”) was
“fully relevant” to the current procurement “in terms of scope, magnitude[,] and complexity.” Id.
at 1455. The TET noted that CMS had rated Kerberos’ performance on the contract
“Acceptable” and said it would hire Kerberos again. Id. The TET determined that both Kerberos’
second contract, with the United States Merchant Marine Academy, and a third contract, with
TaskUS, were relevant in terms of scope and complexity but not magnitude. Id. at 1455–56.
Nonetheless, it characterized the second and third contracts as relevant “in the aggregate,” and
noted that the respondent to a questionnaire about the third contract rated Kerberos “Highly
Acceptable.” Id. at 1456, 1459.
The TET also evaluated two contracts for security services that COGAR submitted for
consideration as part of Kerberos’ technical proposal. See id. at 1456–59.4 The TET determined
that both contracts were fully relevant; indeed, COGAR was the incumbent contractor and one of
its reference contracts was for security services at Customs and Border Protection facilities in
Puerto Rico. Id. at 1458. For both contracts, the TET reviewed assessments from the Contract
Performance Assessment Reporting System (“CPARS”), which rated COGAR’s performance on
one contract between “Very Good” and “Exceptional” and, on the other contract, between
“Satisfactory” and “Very Good.” Id.; see also AR Tab 24b at 1554–87, 1610–15 (COGAR’s
CPARS assessments). The TET noted that COGAR was rated “Exceptional” in all categories in
the most recent assessment of COGAR’s performance under the incumbent contract. AR Tab 23
at 1458.
The TET reviewed three more CPARS assessments of COGAR. See id. at 1459; see also
AR Tab 24b at 1588–92, 1602–09 (COGAR’s CPARS assessments). On one of these
assessments, COGAR received a rating of “Marginal.” AR Tab 23 at 1459; see also AR Tab 24b
at 1589–91. The TET explained that the “Marginal” rating followed COGAR’s request to cancel
a contract early. See AR Tab 23 at 1459. COGAR’s bid for that contract had been too low, and
COGAR faced financial harm, including bankruptcy, if it continued to perform under the
contract. Id. The TET considered the circumstances that led to COGAR’s “Marginal” rating, the
time that had elapsed since the rating, and COGAR’s performance on other metrics. Id. at 1460.
It concluded that the “Marginal” rating was “an isolated incident” that did not represent a
significant risk of underperformance on the current contract. Id.
2. Management Approach
As noted, the TET also assigned a rating of “Highly Acceptable” to the management
approach outlined in Kerberos’ proposal. Id. at 1463. The TET reviewed Kerberos’ plans for
supervising employees, conducting inspections of employees and their posts, addressing
misconduct, and transitioning to contract performance. See id. at 1460–63. Overall, the TET
4
Kerberos’ technical proposal included three of COGAR’s contracts. See AR Tab 15a 1129–37.
But COGAR performed one of the contracts more than three years earlier. Id. at 1135; see also
AR Tab 23 at 1459. Pursuant to the Solicitation, the TET excluded this contract from its
evaluation of COGAR’s past performance. AR Tab 23 at 1459; see also AR Tab 5 at 624.
7
identified seven strengths and no weaknesses in Kerberos’ proposed management approach. Id.
at 1463. It concluded that “the proposal meets and exceeds the requirements,” and that “the level
of performance risk associated with the proposal is substantially less than the level expected
from a competent Contractor.” Id.
C. The Price-Realism Analysis
The CO conducted price-realism analyses only for Kerberos, whose technical proposal
received the highest possible ratings, and [* * *], which, as noted, submitted the lowest-priced
proposal. See AR Tab 28 at 1837–42. The CO’s analysis of Kerberos’ proposal—which was
based on the price breakdown provided in its pricing element worksheet—was detailed and
comprehensive. See id. at 1835–42; see also AR Tab 15b at 1194–97 (Kerberos’ pricing element
worksheet). Based on that analysis, he found that Kerberos’ proposal presented no price-realism
concerns. See AR Tab 28 at 1839–42.
The CO began by examining Kerberos’ proposed hourly wage and health and welfare
rates. Id. at 1839. Because both rates met the minimum required under the contract, the CO
concluded that they did not create price-realism concerns. Id. at 1839–40. Moreover, the CO
noted that the wage and health and welfare rates were “the most significant cost elements,”
[* * *]. Id. at 1839.
Next, the CO reviewed Kerberos’ proposed prices for employees’ paid breaks during the
workday and for holidays, training, and other paid time away from work. Id. at 1840–41. The CO
also considered Kerberos’ proposal to pay supervisors and Puerto Rico’s disability insurance tax.
Id. at 1841. The CO did not identify any price-realism concerns among these components of
Kerberos’ price proposal. Id. at 1840–41.
Kerberos also proposed [* * *] for other direct elements (e.g., uniforms, weapons, guard
license fees, and vehicles). Id. at 1841; see also AR Tab 15b at 1194. [* * *] had proposed
[* * *] for the same items. AR Tab 28 at 1841; see also AR Tab 18b at 1403 ([* * *] pricing
element worksheet). The CO noted, however, that Kerberos’ teaming agreement with the
incumbent contractor could explain the difference between the proposed prices. AR Tab 28 at
1841–42. The CO explained that, under the previous contract, COGAR already may “have
incurred the bulk of costs typically associated with new vendor transition (weapons, uniforms,
ammunition, personal protective equipment, security supplies).” Id. at 1842. The CO concluded
that Kerberos’ pricing for other direct elements did not “significantly increase contract
performance risk.” Id.
The CO noted that Kerberos’ proposed hourly wage rate for the base year ($26.57) was
15.7% less than COGAR’s rate under the existing contract ($30.74). Id. But COGAR’s current
rate, he explained, “was negotiated in a sole source environment,” and “it is expected that the
hourly rates of the instant requirement would be less as these rates are being proposed in a
competitive environment.” Id. Likewise, the CO determined that Kerberos’ proposed hourly rate
for emergency security services was significantly lower than the base rate under the existing
contract. Id. He found, however, that the low rate represented “minimal performance risk”
because the Solicitation capped the hours for emergency security services at only 1.5% of overall
8
hours. Id.; see also AR Tab 5 at 325–29 (Solicitation’s Standard Form 1449 and pricing
schedule).
D. The Decision Not to Evaluate Other Less Competitively Priced Technical
Proposals
Upon reviewing the TET’s evaluation of the three lowest-priced proposals, the CO
invoked his authority under the efficient competition provision to make an award decision
without conducting an evaluation of any other proposals. AR Tab 28 at 1835. The CO noted that
the difference in price between the highest-ranked evaluated proposal (Kerberos’) and the
lowest-priced unevaluated proposal (AGMA’s) was 6.99%. Id. He concluded that “any possible
technical superiority of an unevaluated (and higher priced) technical proposal, over a (lower
priced) proposal that was already evaluated and assigned the highest possible technical rating,
would not warrant an additional price premium.” Id. He explained that “it would not be in the
best interest of the Government to incur costs beyond the price of the technical proposals already
evaluated,” and that, “[a]s such, no additional proposals were reviewed in accordance with the
[Solicitation].” Id.
E. The Final Award Decision
After reviewing the TET’s evaluations of the three lowest-priced technical proposals and
analyzing Kerberos’ and [* * *] price proposals, the CO recommended that FPS award the
contract to Kerberos, whose proposal, he found, “represents the best value to the Government
due to its Highly Acceptable technical rating and competitive price.” Id. at 1846.
The source selection authority (“SSA”) agreed. See AR Tab 27 at 1828. She concurred
with the TET’s ratings and with the CO’s analysis of Kerberos’ price proposal. Id. at 1819. The
SSA reviewed Kerberos’ and [* * *] proposals and, noting that technical factors were more
important than price, concluded that Kerberos’ offer was “more advantageous to the Government
when compared to the offer of [* * *].” Id. at 1827.
III. Post-Award Debriefing
FPS notified AGMA on November 18, 2020, that it had awarded the contract to Kerberos
and that it had not evaluated AGMA’s technical proposal. See AR Tab 30 at 2143–44 (Notice to
Unsuccessful Offerors). On November 20, 2020, AGMA requested a debriefing, AR Tab 31 at
2159, which was conducted on November 24, 2020, AR Tab 33a at 2175. During the debriefing,
FPS explained that AGMA’s price was 6.86% higher than Kerberos’ and “was not deemed to be
most competitive in comparison to the other offerors selected for initial evaluation.” Id. FPS also
explained that Kerberos’ technical proposal received the highest possible adjectival rating. Id.
“[T]herefore,” FPS advised AGMA, it had concluded that “any unevaluated offeror would not
warrant an additional price premium.” Id.
9
IV. GAO Protest
On November 30, 2020, AGMA filed a protest with the Government Accountability
Office (“GAO”), challenging FPS’ decision not to evaluate AGMA’s technical proposal. See AR
Tab 36 at 2193–99 (AGMA’s GAO protest B-419443). AGMA also challenged FPS’ decision to
award the contract to Kerberos, alleging that Kerberos was ineligible for the contract because it
had not satisfied all of the licensing requirements at the time of award, and arguing that Kerberos
had impermissibly teamed with COGAR and engaged in “buying-in.” Id. at 2200–01.
GAO denied AGMA’s protest on February 19, 2021. AR Tab 43 at 3211–17 (GAO
Decision). GAO explained that AGMA’s argument that FPS erred in awarding a contract without
evaluating AGMA’s technical proposal was, in GAO’s view, a challenge “to the express terms of
the [Solicitation].” Id. at 3214. The GAO concluded that this argument was untimely because it
was raised after the deadline for responding to the Solicitation. Id. GAO further concluded that
FPS’ omission of the six-month option period from its initial review of offerors’ prices was not
prejudicial to AGMA. Id. at 3215–16. Finally, GAO determined that the Solicitation did not
require offerors to satisfy all licensing requirements until after the award of the contract, and
GAO found no factual support for AGMA’s argument that Kerberos’ teaming agreement with
COGAR was improper. Id. at 3216–17.
V. This Action
AGMA initiated its bid protest in this Court on September 22, 2021. See Compl., ECF
No. 1. The government filed the administrative record on October 22, 2021. ECF No. 13. AGMA
filed its motion for judgment on the administrative record on November 5, 2021. See Pl.’s
MJAR. The government filed its cross-motion for judgment on the administrative record and
response to AGMA’s motion on November 19, 2021. See Def.’s MJAR. AGMA filed its
response to the government’s cross-motion and its reply in support of its own motion on
December 2, 2021. See Pl.’s Reply in Supp. of its Mot. for J. on the Admin. R. and Mot. for
Permanent Inj., and Opp’n to Def.’s Mot. for J. on the Admin. R. (“Pl.’s Reply.”), ECF No. 18.
The government filed its reply on December 9, 2021. See Def.’s Reply in Supp. of its Mot. for J.
on the Admin R. (“Def.’s Reply”), ECF No. 19.
On December 17, 2021, the parties presented oral arguments on their cross-motions for
judgment on the administrative record.
DISCUSSION
I. Subject-Matter Jurisdiction
The Court of Federal Claims has jurisdiction over bid protests in accordance with the
Tucker Act, 28 U.S.C. § 1491(b)(1). Specifically, the court has the authority “to render judgment
on an action by an interested party objecting to a solicitation by a Federal agency for bids or
proposals for a proposed contract or to a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection with a procurement or a proposed
procurement.” 28 U.S.C. § 1491(b)(1); see also Sys. Application & Techs., Inc. v. United States,
10
691 F.3d 1374, 1380–81 (Fed. Cir. 2012) (observing that § 1491(b)(1) “grants jurisdiction over
objections to a solicitation, objections to a proposed award, objections to an award, and
objections related to a statutory or regulatory violation so long as these objections are in
connection with a procurement or proposed procurement”).
To possess standing to bring a bid protest under § 1491(b)(1), a plaintiff must be an
“interested party,” i.e., “an actual or prospective bidder” who possesses a “direct economic
interest” in the procurement. CliniComp Int’l, Inc. v. United States, 904 F.3d 1353, 1358 (Fed.
Cir. 2018) (quoting Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384 (Fed. Cir.
2012)); see also Orion Tech., Inc. v. United States, 704 F.3d 1344, 1348 (Fed. Cir. 2013). “In a
post-award bid protest, the relevant inquiry is whether the bidder had a ‘substantial chance’ of
winning the award” but for the error about which it complains. Eskridge & Assocs. v. United
States, 955 F.3d 1339, 1345 (Fed. Cir. 2020) (quoting Statistica, Inc. v. Christopher, 102 F.3d
1577, 1582 (Fed. Cir. 1996)).
AGMA has established its standing to sue. Absent the error it alleges the agency
committed when it failed to evaluate AGMA’s technical proposal, AGMA would have had a
substantial chance of competing for and winning the contract award. Similarly, were it not for
the other errors AGMA alleges the agency committed—including the allegedly flawed analyses
of the price realism and technical quality of Kerberos’ proposal—there is a substantial chance
that the agency would have evaluated AGMA’s proposal and awarded it the contract. That is
because neither of the two other lower-priced offerors received more than “Acceptable” ratings
on their technical proposals and because AGMA’s proposal was the lowest priced among the
unevaluated offerors. The Court therefore has jurisdiction over this bid protest.
II. Motions for Judgment on the Administrative Record
An agency’s procurement decision is reviewed on the basis of the administrative record.
See Bannum, Inc. v. United States, 404 F.3d 1346, 1353–54 (Fed. Cir. 2005). Parties may move
for judgment on the administrative record pursuant to Rule 52.1 of the Rules of the Court of
Federal Claims (“RCFC”). When they do, the Court makes “factual findings under RCFC [52.1]
from the record evidence as if it were conducting a trial on the record.” Id. at 1357. The Court is
charged with determining “whether, given all the disputed and undisputed facts, a party has met
its burden of proof based on the evidence in the record.” A&D Fire Prot., Inc. v. United States,
72 Fed. Cl. 126, 131 (2006). Unlike a summary judgment proceeding, genuine issues of material
fact will not foreclose judgment on the administrative record. Bannum, 404 F.3d at 1356.
III. Scope of Review of Procurement Decisions
The Court reviews challenges to procurement decisions under the same standards used to
evaluate agency actions under the Administrative Procedure Act, 5 U.S.C. § 706. See 28 U.S.C.
§ 1491(b)(4) (stating that, “[i]n any action under this subsection, the courts shall review the
agency’s decision pursuant to the standards set forth in section 706 of title 5”). Thus, to
successfully challenge an agency’s procurement decision, a plaintiff must show that the agency’s
decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A); see also Bannum, 404 F.3d at 1351.
11
“[P]rocurement decisions are subject to a ‘highly deferential rational basis review.’”
Safeguard Base Operations, LLC v. United States, 989 F.3d 1326, 1343 (Fed. Cir. 2021)
(alteration in original) (quoting PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.
2010)). The Court, therefore, will sustain an agency’s award decision so long as it “evinc[es]
rational reasoning and consideration of relevant factors.” Advanced Data Concepts, Inc. v.
United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (citing Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974)). Further, the Court cannot substitute
its judgment for that of the agency when reasonable minds might disagree. See Honeywell, Inc.
v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (holding that as long as there is “a
reasonable basis for the agency’s action, the court should stay its hand even though it might, as
an original proposition, have reached a different conclusion” (quoting M. Steinthal & Co. v.
Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971))).
IV. Merits
A. AGMA’s Claim that the Agency’s Decision Not to Evaluate its Technical
Proposal was Arbitrary, Capricious, and an Abuse of Discretion
AGMA’s first claim is that FPS’ decision to award the contract to Kerberos without at
least evaluating AGMA’s technical proposal was arbitrary, capricious, and an abuse of
discretion. Pl.’s MJAR at 16. It so argues because, in its view, there was a “relatively modest
difference between AGMA’s price and the award price.” Id. AGMA contends that, because “the
technical evaluation factors are more important than price, the small difference between
AGMA’s price and the award price is not sufficient to exclude the possibility that any possible
technical advantage in AGMA’s proposal would warrant a price premium, and therefore provide
the best value to the agency.” Id. at 16–17 (internal quotation marks omitted).
AGMA’s contentions lack merit. As noted above, the Solicitation’s efficient competition
provision advised offerors that FPS reserved the right not to evaluate the technical proposals of
higher-priced offerors when a more competitively priced proposal was “of such a level of quality
that it would not be in the interest of the Government to incur cost beyond the price” of that
proposal. AR Tab 5 at 623. The CO explained why he decided to exercise that right here, and his
decision was consistent with the terms of the Solicitation. See id. at 622–23; AR Tab 28 at 1834–
35 (Pre-Award Business Memorandum).
Thus, the CO explained, he first calculated each of the proposals’ total evaluated prices.
See AR Tab 28 at 1834.5 As described above, the CO then separated the price proposals into four
price groups. Id. at 1835. The first group, which included awardee Kerberos, was composed of
the three lowest-priced proposals. See id. at 1834–35. Those proposals were grouped together
5
As discussed below, however, the CO made an error in his calculation of the actual amount of
the offerors’ total evaluated prices when, contrary to the Solicitation, he did not include the price
of the six-month option period. See AR Tab 5 at 622–23, 629; AR Tab 28 at 1834–35. The Court
addresses this error in detail below and concludes that it was not prejudicial to AGMA.
12
because one was the lowest-priced proposal, and the other two were priced within 2.50% of that
proposal. Id. at 1835. The second group consisted of vendors whose prices were between 8.85%
and 11.20% of the lowest-priced proposal. Id. AGMA’s proposal was in that group. See id. at
1834–35. It was 6.19% higher than the first group’s highest-priced proposal. See id. It was also
priced above the average total proposed price among the proposals. See id.6
The CO referred the three proposals included in the first group to the TET “prior to, [and]
instead of, other technical proposals received.” See AR Tab 5 at 623; AR Tab 23 at 1439; AR
Tab 28 at 1835. AGMA contends that it was an error not to also refer its proposal to the TET
because the difference between its price and that of Kerberos, the contract awardee, was
“relatively modest.” Pl.’s MJAR at 16. It also argues that the CO’s decision to create groupings
of offerors by price when determining the most competitively priced proposals was “tantamount
to an unstated evaluation criterion.” Id. at 18 n.20.
These arguments lack merit. The decision where to draw the line as to which proposals
have the most competitive prices is one that is committed to the discretion of the agency. Here,
the agency drew the line between the first group and the second group on the basis of the
approximately $1.4 million (7%) jump in price between the highest-priced proposal in the first
group and the lowest-priced proposal in the second group. See AR Tab 28 at 1834–35. Because
that line is neither arbitrary nor clearly unreasonable, the Court must defer to the agency’s
judgment.
Further, sorting the price proposals into groups did not involve the impermissible use of
an unstated evaluation criterion. To be sure, an agency is required to evaluate proposals based
only on the criteria stated in a solicitation. Summit Techs., LLC v. United States, 151 Fed. Cl.
171, 180–81 (2020) (citing Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377, 386 (2003),
aff’d, 365 F.3d 1345 (Fed. Cir. 2004)). But “a solicitation need not identify criteria intrinsic to
the stated evaluation factors,” and, moreover, “agencies retain great discretion in determining the
scope of a given evaluation factor.” Id. at 180 (quoting PlanetSpace, Inc. v. United States, 92
Fed. Cl. 520, 536 (2010)). Therefore, to prevail on an argument that the agency impermissibly
employed an unstated evaluation criterion, a protester must show that the agency “used a
significantly different basis in evaluating the proposals than was disclosed.” Wellpoint Military
Care Corp. v. United States, 144 Fed. Cl. 392, 404 (2019) (citing Academy Facilities Mgmt. v.
United States, 87 Fed. Cl. 441, 470 (2009)), aff’d, 953 F.3d 1373 (Fed. Cir. 2020).
AGMA cannot make that showing here. As explained above, the Solicitation
contemplated that the agency would identify which proposals were the most competitively
priced. See AR Tab 5 at 622–23. Sorting the proposals into categories by price was the
methodology the agency chose to draw that line. See AR Tab 28 at 1834–35. It did not introduce
into the procurement a “significantly different basis” for evaluating price. See Wellpoint, 144
Fed. Cl. at 404. Indeed, AGMA makes no effort to explain what it would have done differently
6
The CO did not include the highest-priced proposal when calculating the average because—
given that its price was so much higher than the next lowest-priced proposal—it would have
distorted the average. AR Tab 28 at 1835.
13
had it known that the agency intended to group proposals into price categories as a means of
identifying which were most competitively priced.
Having reasonably determined which proposals were the most competitively priced, the
Solicitation—as noted—gave the CO the discretion to determine whether any of them were “of
such a high technical quality that it would not be in the Government’s interest” to consider
higher-priced proposals. See AR Tab 5 at 622–23. The CO’s determination as to that point was
also consistent with the Solicitation, rationally based, and adequately documented. See AR Tab
28 at 1835.
The CO noted that the price of Kerberos’ proposal was 6.99% lower than the closest
higher-priced and unevaluated proposal (AGMA’s). Id. at 1834–35. The CO considered that
material difference in price along with the fact that Kerberos’ technical proposal had received the
highest possible rating. Id. at 1835. In the context of a procurement for security guard services
that are available in the commercial market, it was reasonable for him to determine that there
could be no technical advantage in AGMA’s proposal that would persuade the agency to pay a
6.99% price premium. See id.
AGMA also argues that, without reviewing its technical proposal, the agency could not
have decided whether any of the proposal’s possible benefits merited its additional cost, nor
could the agency provide the rationale for its trade-off decision as required by FAR 15.101-1 and
15.308. Pl.’s MJAR at 17–18. Of course, this is not a FAR Part 15 procurement. See AR Tab 5 at
621 (explaining that the agency “will conduct this acquisition using the procedures of [FAR] Part
12”). But more importantly, at its core, this argument is one that challenges the lawfulness of the
efficient competition provision itself. See Pl.’s MJAR at 20–21. That provision expressly
contemplates that the agency may identify a highly rated proposal among those most
competitively priced and then—without conducting a technical evaluation of any of the
higher-priced proposals—find that “it would not be in the Government’s interest to pay an
additional price premium for any additional technical (non-price) advantage.” AR Tab 5 at 622
(emphasis supplied).
AGMA did not object to the efficient competition provision before the deadline for
responding to the Solicitation. See AR Tab 5 at 325; AR Tab 36 at 2193. That is, it did not argue
before the deadline that the agency could not determine that it was not in the government’s
interest to pay an offeror’s higher price without evaluating the offeror’s technical proposal.
Therefore, the Court agrees with GAO that AGMA has waived this challenge to the agency’s use
of the efficient competition provision. See AR Tab 43 at 3214; Blue & Gold Fleet, L.P. v. United
States, 492 F.3d 1308, 1313 (Fed. Cir. 2007).
B. AGMA’s Challenge to the Agency’s Failure to Include the Six-Month Option
Period in its Calculation of Total Evaluated Price
As explained above, under the Solicitation, the decision as to which proposals were most
competitively priced was to be based on a comparison of each proposal’s total evaluated price
(i.e., the proposal’s price for the base period, four one-year option periods, and the six-month
option period authorized by FAR 52.217-8). See AR Tab 5 at 622–23, 629. As AGMA observes,
14
however, FPS did not include the price of the six-month option period when it calculated the
prices it used to determine which proposals were most competitively priced. Pl.’s MJAR at 21–
22; see also AR Tab 5 at 622–23, 629; AR Tab 28 at 1834–36. The CO also used the flawed
price amounts when he decided not to evaluate AGMA’s proposal after the TET assigned
“Highly Acceptable” ratings to Kerberos’ technical proposal. See AR Tab 28 at 1835.
It is undisputed that the exclusion of the six-month option period was inconsistent with
the Solicitation’s requirements. See Pl.’s MJAR at 21–22; Def.’s MJAR at 16–17. Nonetheless,
to secure relief based on this error, the protester must establish that it was a prejudicial one. See
Sys. Stud. & Simulation, Inc. v. United States, No. 2021-1469, 2021 WL 6140242, at *2 (Fed.
Cir. Dec. 30, 2021). Specifically, it “must show that there was a substantial chance it would have
received the contract award but for [the error].” Glenn Def. Marine (Asia), PTE Ltd. v. United
States, 720 F.3d 901, 912 (Fed. Cir. 2013); see also Statistica, Inc. v. Christopher, 102 F.3d
1577, 1581 (Fed. Cir. 1996) (explaining that, to establish competitive prejudice, a protester must
demonstrate “that it was within the zone of active consideration” (quoting CACI, Inc.-Fed. v.
United States, 719 F.2d 1567, 1574–75 (Fed. Cir. 1983))).
In this case, AGMA has not persuaded the Court that—had the six-month option period
been included in the calculation of total evaluated price—its proposal would likely have been
found among the most competitively priced and therefore at least been evaluated. Instead, it
notes that considering the option period “would have affected the evaluated price of both” its
proposal and of Kerberos’ proposal. Pl.’s MJAR at 22. And it posits that the effect, in turn,
“could have led to a different determination” whether to evaluate AGMA’s technical proposal
and award it the contract. Id.; see also Pl.’s Reply at 9–10, n.8 (stating that “[t]he issue is
whether the agency might have evaluated AGMA’s technical proposal if it had used the correct
formula”).
But AGMA’s burden of proving prejudicial error requires more than showing that an
error “could have led to a different determination.” See Pl.’s MJAR at 22; Data Gen. Corp. v.
Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996) (“[A] showing of a mere possibility that the
protester would have received the contract but for the error is inadequate to show prejudice.”).
The protester must show that but for the error it would have had a substantial chance of being
awarded the contract. Glenn Def. Marine, 720 F.3d at 912. AGMA, as noted, fails to make that
showing.
AGMA alleges further that the percentage difference between its price and Kerberos’
price “was less during the last six-month option period than it was during [the preceding
performance periods]” and that, had the agency considered this narrower price differential,
AGMA stood a substantial chance of receiving the contract. Pl.’s MJAR at 23. But the Court’s
own analysis suggests that—had the six-month period been included—it would have reduced the
percentage difference between Kerberos’ price proposal and AGMA’s by only a very small
amount, leaving more than a 6% gap between the offerors’ prices. See also Def.’s MJAR at 18–
19 (contending that using the six-month option period would have “resulted in a price difference
that was only []0.20 percent less than what was originally evaluated”). There is no reason to
believe that this minor reduction in the price differential would have caused the agency to find
15
AGMA’s proposal among the most competitively priced, or caused it not to award the contract to
Kerberos without evaluating higher-priced technical proposals.
In sum, AGMA has not convinced the Court that the CO’s failure to include the
six-month option period when determining and comparing the offerors’ total evaluated prices
was prejudicial to its interests. The Court therefore finds this protest ground unavailing.
C. AGMA’s Claim that the Agency’s Price-Realism Analysis of Kerberos’
Proposal was Flawed
AGMA claims that its protest should be sustained because the agency’s price-realism
analysis of Kerberos’ proposal ignored information showing, among other things, that Kerberos
was bidding both below the incumbent contract price and below its own costs. Pl.’s MJAR at 25–
28. Indeed, AGMA argues, the agency should have recognized that Kerberos was engaging in
the disfavored practice of “buying-in” when it submitted what AGMA characterizes as a
“low-ball” price proposal. Id. at 25–26. AGMA’s arguments lack merit.
The term “price realism” does not appear in the FAR. FAR 15.404-1(d)(3), however,
references “cost realism analyses,” which agencies may use in competitive fixed-price contracts
like the present one.7 The purpose of such analyses, as the Solicitation itself recognizes, AR Tab
5 at 631, is to determine whether an offeror’s price is so low that it reflects a lack of
understanding of the solicitation’s requirements, thus increasing the risk of poor performance.
See KWR Constr., Inc. v. United States, 124 Fed. Cl. 345, 356 (2015); CRAssociates, Inc. v.
United States, 95 Fed. Cl. 357, 378–79 (2010).
An agency has discretion to determine “the nature and extent of a price realism
analysis . . . unless the agency commits itself to a particular methodology in a solicitation.” KWR
Constr., 124 Fed. Cl. at 357 (quoting Afghan Am. Army Servs. Corp. v. United States, 90 Fed.
Cl. 341, 358 (2009)). Here, the Solicitation did not prescribe a methodology for performing the
price-realism analysis. See AR Tab 5 at 630–31. FPS therefore had “broad discretion” to
determine how it conducted its analysis. Mil-Mar Century Corp. v. United States, 111 Fed. Cl.
508, 545–46 (2013) (quoting Ne. Mil. Sales, Inc. v. United States, 100 Fed. Cl. 103, 118 (2011)).
And the Court’s scope of review is a limited one. See Ala. Aircraft Indus., Inc.-Birmingham v.
United States, 586 F.3d 1372, 1375–76 (Fed. Cir. 2009). Its job is to ensure that the agency “took
into account the information available,” and that it indulged no “irrational assumptions” and
made no “critical miscalculations.” Fulcra Worldwide, LLC v. United States, 97 Fed. Cl. 523,
539 (2011); see also Afghan Am. Army Servs., 90 Fed. Cl. at 358 (“An agency’s price-realism
analysis lacks a rational basis if the contracting agency made ‘irrational assumptions or critical
miscalculations.’” (quoting OMV Med., Inc. v. United States, 219 F.3d 1337, 1344 (Fed. Cir.
2000))).
7
The FAR states that such analyses may be appropriate “when new requirements may not be
fully understood by competing offerors, there are quality concerns, or past experience indicates
that contractors’ proposed costs have resulted in quality or service shortfalls.” FAR
15.404-1(d)(3).
16
The agency’s price-realism analysis in this case withstands scrutiny under this standard of
review. In fact, AGMA acknowledges that the agency performed what was “admittedly, a very
detailed and comprehensive price realism analysis.” Pl.’s MJAR at 12. AGMA’s various
critiques of the agency’s approach, see id. at 25–28, do not persuade the Court that the agency’s
ultimate decision—finding no price-realism concerns—lacked a rational basis, see AR Tab 28 at
1839–42.
First, the agency reasonably found no price-realism concerns arising out of the fact that
Kerberos’ proposed prices were lower than the price of the incumbent contract. See id. at 1842.
The CO explicitly acknowledged that the hourly rate for regular security services under
Kerberos’ proposal was about 15% lower than the hourly rate under the incumbent contract. Id.
But he explained that the difference was likely a product of the competitive environment in
which the current procurement was conducted. Id. He noted that the higher hourly rate for
regular security services under the incumbent contract, by contrast, was negotiated as part of a
one-year, sole-source bridge contract. Id.8
Indeed, AGMA “acknowledges that the circumstances under which the two contracts
were negotiated [were] different.” Pl.’s Reply at 11 n.9. But it faults the CO for not undertaking
further analysis to determine whether the differing circumstances accounted for “the full 16%
plunge in contract pricing.” Id.
As noted above, agencies have broad discretion to determine the scope and depth of their
price-realism analyses. See CRAssociates, 95 Fed. Cl. at 379 (observing that “[t]he depth of an
agency’s price analysis is a matter within the sound exercise of the agency’s discretion and [this
court] will not disturb such an analysis unless it lacks a reasonable basis” (alterations in original)
(quoting Biospherics, Inc. v. United States, 48 Fed. Cl. 1, 10 (2000))); see also Fulcra
Worldwide, 97 Fed. Cl. at 539 (explaining that a price-realism analysis is not unreasonable
simply because it is not conducted with “impeccable vigor” (quoting Halter Marine, Inc. v.
United States, 56 Fed. Cl. 144, 172 (2003))). AGMA’s demand that the CO quantify the precise
amount of the price differential that was caused by the differing circumstances (as opposed to
some other factor) is excessive and unreasonable given the breadth of the agency’s discretion in
this arena. That is especially true given the CO’s conclusion that any risk presented by the price
differential was “mitigated by the . . . detailed price realism analysis of Kerberos’ proposal in
which it was noted that there were no price realism concerns.” AR Tab 28 at 1843.
There is also no merit to AGMA’s argument that the agency should have known
Kerberos’ price was unrealistic because its pricing element worksheet listed no costs in the
“Overhead” column, which AGMA views as evidence that Kerberos bid below its costs. Pl.’s
8
The Court notes that most of the offerors’ hourly rates for regular security services in the base
year were less than the rate under the incumbent contract. See AR Tab 9a at 737 (AGMA’s price
proposal); AR Tab 10b at 797 ([* * *] price proposal); AR Tab 11b at 863 ([* * *] price
proposal); AR Tab 12b at 923 ([* * *] price proposal); AR Tab 14b at 1006 ([* * *] price
proposal); AR Tab 15b at 1170 (Kerberos’ price proposal); AR Tab 16b at 1221 ([* * *] price
proposal); AR Tab 17b at 1276 ([* * *] price proposal); AR Tab 18b at 1397 ([* * *] price
proposal).
17
MJAR at 26–27; see AR Tab 15b at 1194 (Kerberos’ pricing element worksheet); AR Tab 28 at
1838. But it was not irrational for the agency not to ascribe much significance to the blank space
Kerberos left in the “Overhead” column. The Solicitation provided the pricing element
worksheet to offerors as a tool to help them determine the rates proposed in the Standard Form
1449 and pricing schedule. AR Tab 5 at 610; see also id. at 325–29. As the government notes, for
whatever reason, half of the offerors left the “Overhead” columns on their pricing element
worksheets blank. Def.’s MJAR at 26; see also AR Tab 10b at 817; AR Tab 11b at 869; AR Tab
14b at 1101; AR Tab 18b at 1402.
Further, the instructions for the worksheets encouraged offerors not to reflect in the
“Overhead” column expenses that they might otherwise have thought to include there. See AR
Tab 5 at 606. For example, it directed them to list separately their costs for fringe benefits,
non-productive time, and other direct elements, “even if it is the contractor’s accounting practice
to include these items in their Overhead and/or [general and administrative] rate.” Id. In short,
under the circumstances, the Court cannot say that the agency committed a critical
miscalculation when it ascribed no significance to the absence of costs in the “Overhead” column
of Kerberos’ worksheet.
AGMA also claims that the agency unreasonably failed to appreciate that Kerberos was
attempting to “buy-in” to the procurement. See Pl.’s MJAR at 25–28. In other words, AGMA
argues, Kerberos “submitt[ed] an offer below anticipated costs” because it expected to either
“[i]ncrease the contract amount after award (e.g., through unnecessary or excessively priced
change orders)” or “[r]eceive follow-on contracts at artificially high prices to recover losses
incurred on the buy-in contract.” Id. at 26 (citing FAR 3.501-1).
AGMA’s support for its buying-in argument is largely derivative of the contentions it
made in challenging the agency’s price-realism analysis and is equally unpersuasive. See id. at
25–28. Moreover, “[a]ttempting to buy into a contract is not illegal.” Femme Comp Inc. v.
United States, 83 Fed. Cl. 704, 753 (2008); see also id. at 754 (“[T]he FAR does not prevent
offerors from buying into a contract.”). An agency’s responsibilities for addressing buying-in
“are forward-looking.” Id. at 754; see also FAR 3.501-2 (explaining that agencies “must take
appropriate action to ensure buying-in losses are not recovered by the contractor through the
pricing of—(1) Change orders; or (2) Follow-on contracts subject to cost analysis”).
AGMA also argues that the agency overlooked evidence that Kerberos’ teaming partner,
COGAR, engaged in the practice of buying-in on an earlier contract, which resulted in its
termination. Pl.’s MJAR at 27; see also Pl.’s Reply at 11, 14. But COGAR’s conduct on a
previous procurement is not attributable to Kerberos, and, as the agency noted in its evaluation of
COGAR’s past performance, the episode in question was an isolated one and arose out of the
failure of one of COGAR’s subcontractors to understand performance requirements. See AR Tab
23 at 1459–60.9
9
AGMA notes that Kerberos did in fact request an upward adjustment in its contract rate on July
20, 2021, approximately three months into the contract’s base period. AR Tab 45e at 3438. The
agency granted the request on September 20, 2021, when it issued Modification No. P00006,
which increased the cost of the contract by $268,950 over the base period and four option
18
Finally, in its opening brief, AGMA asserts in a footnote that the agency failed to notice
that Kerberos’ pricing element worksheet “wrongly credit[ed] the . . . Christmas bonus [that is
required by Puerto Rico law] toward health and welfare payments.” Pl.’s MJAR at 26 n.30. As
AGMA explains further (albeit only in its Reply), under federal law, the United States
Department of Labor sets minimum requirements for health and welfare payments in service
contracts like the present one. See Pl.’s Reply at 12; see also 41 U.S.C. §§ 6702–03; 29 C.F.R.
§§ 4.170, 4.175. At the same time, AGMA explains, Puerto Rico law “requires employers to pay
a Christmas bonus . . . up to $600.” Pl.’s Reply at 12; see also AR Tab 28 at 1840. “Because the
Christmas bonus is legally required in Puerto Rico,” AGMA contends, “and because it is not a
voluntary health insurance, paid vacation or sick leave, or pension payment, it cannot be credited
toward meeting the employer’s health, welfare and pension payments required by 29 C.F.R.
§ 4.175.” Pl.’s Reply at 12.
The premise of AGMA’s argument, however, appears to be a faulty one. Kerberos’
pricing element worksheet does not reflect that Kerberos credited the Christmas bonus to health
and welfare payments. See AR Tab 15b at 1194. To the contrary, its pricing element worksheet
included a line for health and welfare payments totaling $3,250,243.45 over the base period and
four option periods and a separate line entitled “PR Required Christmas Bonus,” which totaled
$236,825.33 over the same period. Id. Kerberos’ pricing narrative expressly states that its price
proposal contained a $600 Christmas bonus for full-time employees, and lesser amounts for
part-time employees, for the required bonus payments. Id. at 1180.
D. AGMA’s Claim that the Agency’s Evaluation of Kerberos’ Technical
Proposal was Arbitrary
AGMA challenges the agency’s decision to assign a “Highly Acceptable” rating to
Kerberos’ technical proposal under the past performance factor. See Pl.’s MJAR at 28–31; see
also AR Tab 23 at 1453–60. It observes that the agency found that three of the six past
performance examples Kerberos and COGAR supplied were not relevant and that, of the three
relevant performance examples, two had been rated “Acceptable” (rather than “Highly
Acceptable”). See Pl.’s MJAR at 30; AR Tab 23 at 1453–60. It also claims that Kerberos’
technical evaluation is “replete with negative comments.” Pl.’s MJAR at 28. And while AGMA
acknowledges that COGAR had received “Very Good” and “Exceptional” ratings for its
performance on the incumbent contract, it points out that the agency also had before it
information about another contract that was terminated because COGAR was unable to perform
at the contract price. Pl.’s MJAR at 29; see also AR Tab 23 at 1458–60.
periods. Id. at 3438–39. AGMA appears to be arguing that this minor adjustment provides proof
that Kerberos’ proposed price reflected an effort to buy into the contract. See Pl.’s MJAR at 28.
But the language of the modification suggests the upward price adjustment was occasioned by a
reduction in the amount of security services the agency required, AR Tab 45e at 3439, which the
government ascribes to the effects of the COVID-19 pandemic, see Def.’s MJAR at 26–27.
AGMA has not supplied the Court with any evidence that the change order was unnecessary or
excessively priced, which are the risks identified where an offeror buys into a contract. See FAR
3.501-1.
19
It is axiomatic that protests concerning “the minutiae of the procurement process in such
matters as technical ratings . . . involve discretionary determinations of procurement officials that
a court will not second guess.” E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.
1996). It is also well established that courts afford “substantial deference” to contracting
agencies’ past performance assessments. CW Gov’t Travel, Inc. v. United States, 154 Fed. Cl.
721, 748 (2021); see also Vanguard Recovery Assistance v. United States, 101 Fed. Cl. 765, 785
(2011) (stating that it is a “‘well-recognized’ principle that ‘an agency’s evaluation of past
performance is entitled to great deference’” (quoting Al Andalus Gen. Contracts Co. v. United
States, 86 Fed. Cl. 252, 264 (2009))); RX Joint Venture, LLC v. United States, 145 Fed. Cl. 207,
213 (2019) (“[I]t is well established that evaluations of proposals for their technical quality
involves the specialized expertise of an agency’s subject-matter experts.”).
With those standards in mind, the Court can find no basis to set aside the “Highly
Acceptable” rating the agency assigned to Kerberos’ past performance. See AR Tab 23 at 1459–
60. As described in greater detail above, the TET reviewed Kerberos’ past performance on three
contracts for security services. Id. at 1453–56. The TET determined that the first contract was
relevant in terms of scope, complexity, and magnitude. Id. at 1455. And, with respect to that
contract, all of the comments in the past performance questionnaire were positive. Id. Further,
while the contracting agency that had responded to the questionnaire assigned an “Acceptable,”
rather than “Highly Acceptable,” rating to Kerberos’ overall performance, the TET found that
the lower rating did not reflect adversely on the quality of Kerberos’ performance but rather was
“due to the fact that only [ten] months of performance ha[d] been provided under th[e] contract.”
Id.
AGMA’s assertion that Kerberos’ other two contracts were “irrelevant,” see Pl.’s MJAR
at 30, is incorrect. The TET concluded that both contracts were at least partially relevant because
the scope and complexity of those contracts—although not their magnitude—resembled the
Solicitation’s requirements. See AR Tab 23 at 1455–56. Additionally, because Kerberos was
performing both contracts at the time of the TET’s evaluation, the TET found that, “when
considered in the aggregate,” the magnitude of the contracts made them relevant. Id. at 1453,
1459; see also AR Tab 27 at 1820. The TET’s determination was in accord with the Solicitation,
which provided that the agency “reserves the right to evaluate submitted projects individually or
in the aggregate in order to determine relevance.” See AR Tab 5 at 624.
The TET assigned a “Neutral” rating to one of these two contracts because the TET did
not receive a past performance questionnaire or other performance assessment concerning the
contract. AR Tab 23 at 1455–56, 1459. However, the respondent of a past performance
questionnaire regarding the other contract “provided all positive comments” and rated Kerberos’
overall performance “Highly Acceptable.” Id. at 1456.
The TET also evaluated COGAR’s past performance on relevant contracts. See id. at
1456–59. The respondent of a past performance questionnaire for one of COGAR’s contracts
rated COGAR’s overall performance “Acceptable,” and other performance ratings for the same
contract ranged from “Satisfactory” to “Very Good,” “with a majority of the ratings being Very
Good.” Id. at 1458. The TET noted that “[a]ll assessments [of this contract] contained favorable
20
comments and no negative performance issues.” Id. at 1459. Likewise, performance assessments
for another contract “were limited, but the information provided was positive and there were no
significant negative performance trends noted.” Id. COGAR’s performance ratings for a third
contract ranged from “Very Good” to “Exceptional,” “with the most recent assessment
containing Exceptional ratings in all rated categories.” Id. at 1458. Moreover, COGAR’s
“Exceptional” ratings concerned its performance under the incumbent contract, “the most
relevant past project available.” Id.
To be sure, the TET noted that COGAR had received one “Marginal” rating after it asked
to cancel a contract early. Id. at 1459–60. According to the TET, the rating was assigned because
COGAR had relied on a subcontractor whose pricing proposal ignored some of the contract’s
requirements. Id. The subcontractor then withdrew from its agreement with COGAR, and
COGAR could not continue to perform under the contract without facing financial harm. Id. The
TET determined, however, that this single blemish on COGAR’s record was an “isolated
incident” that did not create a substantial risk of underperformance. Id. at 1460. As it explained,
“COGAR’s performance on the contract itself was overall very good, even though it[s] mistake
in pricing the contract resulted in cost control issues.” Id.
Moreover, COGAR had been providing “nearly identical services” under the incumbent
contract and had “demonstrated Very Good to Exceptional performance in most categories”
under that contract, “with the most recent assessment containing Exceptional ratings in all rated
categories.” Id. COGAR had also been praised “for [its] work during multiple devastating
hurricanes/earthquakes in Puerto Rico.” Id. “This exceptional performance demonstrated by
COGAR under the most relevant past performance project,” the TET concluded, “mitigates the
risk associated with the Marginal rating from 2.5 years ago.” Id.; see Vantage Assocs., Inc. v.
United States, 59 Fed. Cl. 1, 22 (2003) (“[A]n agency, in evaluating past performance, can give
more weight to one contract over another if it is more relevant to an offeror’s future performance
on the solicited contract.” (quoting Forestry Surveys & Data v. United States, 44 Fed. Cl. 493,
499 (1999))). Further, it observed, “there have been no noted performance or financial issues on
the current [Customs and Border Protection] Puerto Rico contract that has been in place since
October 2014.” AR Tab 23 at 1460.
AGMA also argues that the agency’s responsibility determination was arbitrary because
it did not consider COGAR’s prior contract that was terminated during the performance period.
Pl.’s MJAR at 31. AGMA contends that the agency violated FAR 9.104-3(b) by not factoring
this negative past performance example into its responsibility determination. Id.; see also FAR
9.104-3(b) (“Past failure to apply sufficient tenacity and perseverance to perform acceptably is
strong evidence of nonresponsiblity.”).
But the agency in fact considered COGAR’s performance history when making its
responsibility determination, although it did so indirectly. See AR Tab 26 at 1798. The agency
based its responsibility determination in part on the TET’s evaluation of Kerberos’ technical
proposal, see id., and the TET’s evaluation covered COGAR’s prior relevant contracts, see AR
Tab 23 at 1456–60; see also AR Tab 15a at 1129–37. That is, by citing Kerberos’ “Highly
Acceptable rating under the Past Performance technical factor” as evidence of responsibility, AR
Tab 26 at 1798, the CO necessarily incorporated the TET’s determination that COGAR’s
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“Marginal” rating in the past did not present “a significant performance risk for the instant
requirement,” AR Tab 23 at 1460.
In sum, the TET’s review of Kerberos’ and COGAR’s relevant past performance was
thorough, and its assignment of a “Highly Acceptable” rating was supported by the record. See
id. at 1453–60. The Court therefore rejects AGMA’s contention that the agency’s evaluation of
Kerberos’ and COGAR’s past performance lacked a rational basis.
E. AGMA’s Claim that Kerberos Lacked Required Licenses
AGMA claims that Kerberos did not satisfy the Solicitation’s requirement that
contractors possess licenses permitting employees to be armed and to detain suspects “prior to
commencement of work under [the] contract.” Pl.’s MJAR at 31; see also AR Tab 5 at 402. It
argues that the license requirement “took hold on the date of contract award” and that Kerberos’
proposal did not reflect that it could meet the requirement as of that time. Pl.’s MJAR at 32.
Further, it argues that the possession of required licenses is a “definitive responsibility criterion,”
which must be satisfied “as a precondition to award.” Id. (citations omitted).
AGMA’s contentions are inconsistent with the plain language of the Solicitation. As
noted, the Solicitation required contractors to obtain licenses to employ armed security officers
before work commenced, not at the time of the contract award. AR Tab 5 at 402. Thus, SOW
section 4.1.6 states that the “[c]ontractor must obtain required licenses and permits . . . prior to
[security officers] standing post.” Id. at 401; see also AR Tab 8 at 702 (pre-award Q&A
providing that “the successful offeror is required to obtain a Puerto Rico security license prior to
the beginning of contract performance in accordance with SOW section 4.1.3 and FAR
52.212-4.”). Moreover, nothing in the Solicitation required offerors to submit proof of licensure
as a condition of receiving the contract award.
Indeed, the Solicitation called for a transition period of up to 120 days “from the contract
award date to the performance start date.” AR Tab 5 at 394. During this transition period, the
Solicitation stated, contractors would provide regular reports on, among other things, their
progress toward obtaining permits and licenses. Id. at 395–96. Thus, the Solicitation clearly
contemplated that an offeror would be permitted to pursue the licenses to provide armed security
services after the time of contract award but before full performance began.
For similar reasons, AGMA’s contention that “[t]he possession of required licenses is a
definitive responsibility criterion,” and so is “a precondition to award,” Pl.’s MJAR at 32
(citations omitted), lacks merit. Because the agency did not require offerors to satisfy the
Solicitation’s licensing requirement at the time the agency awarded the contract, the requirement
was not a definitive responsibility criterion. See Advanced Am. Constr., Inc. v. United States,
111 Fed. Cl. 205, 223 (2013) (explaining that a solicitation’s requirements “cannot be viewed as
responsibility requirements . . . because they are not required to be satisfied by the contractor
until after the contract is awarded”); cf. Tidewater Homes Realty, Inc., B-274689, 96-2 CPD
¶ 241 at 2, 4 (Comp. Gen. Dec. 26, 1996) (finding that a licensing requirement was a definitive
responsibility criterion where the solicitation stated expressly that an offeror “must supply with
22
its Technical Proposal evidence of its Virginia Real Estate Broker License . . . to be determined
responsible and eligible for award”).
The GAO decisions that AGMA cites in support of its argument that licensing
requirements are treated as responsibility criteria are inapposite. See Pl.’s MJAR at 33 n.37; Pl’s
Reply at 21–22. If anything, the cases illustrate the difference between particularized and
expressly stated responsibility criteria that offerors must satisfy when they submit their proposals
and, as in this case, requirements that may be satisfied after an agency makes its award. See, e.g.,
The Mary Kathleen Collins Trust, B-261019.2, 96-1 CPD ¶ 164 at 1 (Comp. Gen. Sept. 29,
1995) (finding that, where a solicitation provided “that offerors must submit with their initial
offers a ‘[c]ertification in writing from local zoning board that property being offered is currently
zoned to permit the type of facility being proposed,’” the solicitation stated a definitive
responsibility criterion (alteration in original)); Deployable Hosp. Sys., Inc., B-260778, 95-2
CPD ¶ 65 at 5 (Comp. Gen. July 21, 1995) (explaining that, where a solicitation “calls for the
prospective contractor to have a designated number of projects in a specific area completed” and
requires offerors to include lists of those projects in their submissions, the requirement is a
definitive responsibility criterion); Dalma Tech2 Co., B-411015, 2015 CPD ¶ 135 at 4 (Comp.
Gen. Apr. 22, 2015) (determining that a solicitation included a definitive responsibility criterion
where it “explicitly required that offerors ‘include [a] copy of [an] actual Saudi business license’
with their [proposals]” (first and second alterations in original)). The Court therefore finds
without merit AGMA’s contention that the agency should have found Kerberos not responsible
because Kerberos did not establish that it had the required licenses at the time of contract award.
F. AGMA’s Claim that Kerberos’ Teaming Agreement with COGAR was
Improper
Finally, AGMA contends that the teaming agreement that Kerberos entered with COGAR
“presents multiple questions of procurement law under FAR Part 3.” Pl.’s MJAR at 33. Under
the teaming agreement, Kerberos would perform 51% of the contract as the prime contractor and
COGAR would perform 49% as a subcontractor. AR Tab 15a at 1154, 1160.
The first issue of law, according to AGMA, “is if the agency properly judged whether
Kerberos could truthfully certify to ‘independent price determination’ under FAR 3.103 &
52.203-2.” Pl.’s MJAR at 33–34. Specifically, AGMA argues, paragraph 20 of the teaming
agreement collides with the commitment an offeror is required to make not “to induce any other
concern . . . to submit or not to submit an offer for the purpose of restricting competition.” Id. at
34 (quoting FAR 52.203-2(a)(3)). Paragraph 20, entitled “Exclusivity,” states in pertinent part
that the parties agree not to compete for the contract or respond to the Solicitation
“independently or in conjunction with any other party.” AR Tab 15a at 1158.
AGMA’s argument lacks merit. To begin with, this acquisition was conducted using the
procedures of FAR Part 12. See AR Tab 5 at 621. FAR Part 12 supplants “prescriptions
contained elsewhere in the FAR” and sets out the clauses and provisions agencies must use when
acquiring commercial services and products. FAR 12.301(d). Those clauses and provisions do
not require offerors to execute Certificates of Independent Price Determination. See id.
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In any event, there is no basis in this record to find that Kerberos induced COGAR to
enter the teaming agreement “for the purpose of restricting competition.” FAR 52.203-2(a)(3).
At the time the procurement was announced, COGAR had graduated from the Small Business
Administration’s 8(a) program. See AR Tab 15a at 1118. It was therefore not eligible to compete
for the contract irrespective of commitments it did or did not make in the teaming agreement.
See AR Tab 5 at 325; see also Def.’s MJAR at 34–35.
The Court also finds no basis for AGMA’s assertion that the teaming agreement was, “on
its face,” inconsistent with FAR 52.203-6(a), which, AGMA observes, prohibits any agreement
that “has or may have the effect of restricting sales by . . . subcontractors directly to the
Government of any item or process (including computer software) made or furnished by the
subcontractor under this contract [or under any follow-on production contract].” Pl.’s MJAR at
36 (quoting FAR 52.203-6(a)). For one thing, the version of that provision that AGMA cites is
not applicable to this commercial services procurement. Instead, FAR 3.503-2 states that
commercial services contracts should incorporate an alternative version of the provision, which
prohibits “any agreement restricting sales by subcontractors [that] results in the Federal
Government being treated differently from any other prospective purchaser.” See FAR 3.503-2
and 52.203-6; see also AR Tab 5 at 351. And AGMA fails to explain how either provision is
even implicated by the teaming agreement.10
Finally, the Court rejects AGMA’s contention that the teaming agreement Kerberos and
COGAR entered, and which the Solicitation expressly contemplated, suggests violations of the
antitrust laws, which the agency had a duty to report. See Pl.’s MJAR at 36–38; Pl.’s Reply at
27. The law to which AGMA refers requires agencies to report “evidence of suspected antitrust
violations.” FAR 3.301(b) (emphasis supplied); see also 41 U.S.C. § 3707 (explaining that
agencies must report to the United States Department of Justice (“DOJ”) proposals that
“evidence[] a violation of the antitrust laws”). The only evidence of an antitrust violation AGMA
has identified concerns its claims related to the Certificate of Independent Price Determination
and the “Exclusivity” clause in Kerberos’ and COGAR’s teaming agreement, and the Court has
found that those claims lack merit. See Pl.’s MJAR at 36–38; Pl.’s Reply at 27. Thus, there was
no obligation on the agency’s part to make a report to DOJ much less to disqualify Kerberos’
proposal based on suspected antitrust violations.11
10
In fact, the teaming agreement specifically states that it “does not limit or restrict the rights of
the Parties in offering to sell or selling to others their standard products and services incidental
thereto.” AR Tab 15a at 1158. It also contains a severability clause that states that if any term of
the teaming agreement “is held or finally determined to be void, invalid, illegal, or unenforceable
in any respect, in whole or in part, such term, condition or provision shall be severed from this
Agreement,” leaving the remaining terms in effect. Id. at 1159. Consequently, if any part of the
teaming agreement violated FAR 52.203-6, it would be severed from the agreement.
11
AGMA quotes, without explaining, FAR 3.303, which lists circumstances “that may evidence
violations of the antitrust laws.” Pl.’s MJAR at 37; see also FAR 3.303(c). Among these
circumstances is “[t]he filing of a joint bid by two or more competitors when at least one of the
competitors has sufficient technical capability and productive capacity for contract
performance.” FAR 3.303(c)(7). As discussed above, however, COGAR and Kerberos could not
have been competitors in this case because COGAR was ineligible to respond directly to the
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CONCLUSION
For the foregoing reasons, AGMA’s motion for judgment on the administrative record,
ECF No. 14, is DENIED. The government’s cross-motion for judgment on the administrative
record, ECF No. 15, is GRANTED. The Clerk is directed to enter judgment accordingly. Each
side shall bear its own costs.
IT IS SO ORDERED.
s/ Elaine D. Kaplan
ELAINE D. KAPLAN
Chief Judge
Solicitation. See AR Tab 15a at 1118. Furthermore, Kerberos and COGAR stated that their
partnership “fills voids in each Party’s technical and production capabilities.” Id. at 1154. The
Court finds that FAR 3.303(c)(7) does not encompass Kerberos’ and COGAR’s teaming
agreement.
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