Moore's Cafeteria Services v. United States , 314 F. App'x 277 ( 2008 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-5141
MOORE’S CAFETERIA SERVICES,
doing business as MCS Management,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Sam Z. Gdanski, Gdanski & Gdanski, LLP, of Suffern, New York, for
plaintiff-appellant.
Tara K. Hogan, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for defendant-appellee. With
her on the brief were Jeanne E. Davidson, Director, and Donald E. Kinner, Assistant
Director.
Appealed from: United States Court of Federal Claims
Judge Nancy B. Firestone
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-5141
MOORE’S CAFETERIA SERVICES,
doing business as MCS Management,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Appeal from the United States Court of Federal Claims in 07-CV-377, Judge Nancy B.
Firestone.
__________________________
DECIDED: March 20, 2008
__________________________
Before GAJARSA, Circuit Judge, PLAGER, Senior Circuit Judge, and PROST, Circuit
Judge.
PER CURIAM.
In this post-award bid protest case, Moore’s Cafeteria Services (“MCS”) appeals
the judgment of the United States Court of Federal Claims in favor of the United States
(“Government”). We affirm.
This case involves a solicitation by the Department of the Army (“Army”) for the
provision of food services at Fort Campbell, Kentucky, for one year beginning April 1,
2007. The solicitation was a best value procurement and indicated that proposals
would be evaluated using lowest priced technically acceptable award criteria. The
solicitation initially stated that “a technically acceptable offer from a qualified State
Licensing Agency will receive preference in accordance with the Joint Report to
Congress, dated August 29, 2006.” The referenced Joint Report was a report submitted
by three parties, including the Department of Defense, as required by the Randolph-
Sheppard Act (“RSA”), which gives priority to state licensed blind persons in the
procurement of vending facility contracts. 20 U.S.C. § 107(b). The Joint Report
proposed a methodology for ensuring that appropriate priority was given under the RSA
in military dining procurements.
After receiving an inquiry from the Kentucky Office for the Blind, a State
Licensing Agency (“SLA”), the Army’s contracting officer amended the solicitation to
remove reference to the Joint Report and to provide that an SLA would receive
preference in accordance with the RSA. The Army’s position was that the specific
policies set forth in the Joint Report would not be effective until implemented by
regulations. MCS, the incumbent contractor, did not object to the amendment.
The contracting officer evaluated the three technically acceptable proposals that
were submitted, including one from MCS and one from the Kentucky SLA, and awarded
the contract to the SLA. After the Government Accountability Office denied its protest,
MCS filed suit in the Court of Federal Claims, alleging, inter alia, that the award violated
the Joint Report’s requirement that a contract not be awarded to an SLA whose price
exceeds the best value offer by more than five percent. The trial court granted the
Government’s motion for judgment on the administrative record. MCS appeals.
We review the trial court’s determination on the legal issue of the Government’s
conduct, in a grant of judgment on the administrative record, without deference.
2007-5141 2
Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). Reapplying the
standards set forth in the Administrative Procedure Act, we may set aside the agency’s
procurement decision only if it was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” Id. (quoting 5 U.S.C. § 706(2)(A)).
First, we agree with the trial court that MCS waived the ability to challenge the
terms of the solicitation by failing to object prior to the close of bidding. See Blue &
Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007). When the
solicitation was amended to delete the reference to the Joint Report, MCS was on
notice that the contract did not require the contracting officer to follow the methodology
set forth in the Joint Report, including the five percent benchmark for evaluating price
reasonableness. If MCS believed that the contracting officer was legally required to
consider the Joint Report in making the award, as it now argues, the proper time for
raising that issue was before the bidding process was complete. See id.In the absence of a five percent standard, we also agree with the trial court that
the contracting officer’s price reasonableness evaluation had a rational basis and was
not arbitrary, capricious, or an abuse of discretion. The contracting officer compared
the prices of the three technically acceptable offers, determined that the range of
variation was relatively narrow, and thus concluded that the price of the SLA’s offer,
which was between the other two, was reasonable. This is an acceptable method for
evaluating price reasonableness. 48 C.F.R. § 15.404-1(b)(i). The fact that MCS’s
proposed price was lower than the SLA’s price does not demonstrate that the SLA’s
price was unreasonable, especially when the solicitation stated that “application of [the
2007-5141 3
RSA] preference may result in award to other than the lowest priced technically
acceptable offeror.”
Finally, as the trial court correctly determined, MCS has not shown any prejudice
in alleged errors in the Independent Government Estimate (“IGE”). Although
comparison to the IGE was not required, the contracting officer also used that method to
determine that the SLA’s price was reasonable. However, she stated even if the IGE
were flawed and required correction, she still would have determined that the SLA’s
price was reasonable based on comparison to the other offeror’s prices. Thus, MCS
has not established that it suffered “significant prejudice” because it cannot show it
would have received the contract award but for the alleged errors in the IGE. Bannum,
404 F.3d at 1353.
We have considered MCS’s additional arguments and find them to be without
merit.
2007-5141 4