Golden It, LLC. v. United States ( 2023 )

In the United States Court of Federal Claims
No. 22-1471
(Filed: April 6, 2023)
**************************************
GOLDEN IT, LLC, *
*
Plaintiff, *
*
v. *
* Post-Award Bid Protest; Motion
THE UNITED STATES, * for Judgment on the
* Administrative Record; Unequal
Defendant, * Treatment; Unstated Evaluation
* Criteria.
and *
*
ITCON SERVICES, LLC, *
*
Defendant-Intervenor. *
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Jon D. Levin, Maynard, Cooper & Gale, PC, Huntsville, AL, counsel for Plaintiff. With whom
were W. Brad English, Emily J. Chancey, Joshua B. Duvall, and Nicholas P. Greer, of counsel.
Rafique O. Anderson, U.S. Department of Justice, Civil Division, Washington, DC, counsel for
Defendant. With whom was Elin M. Dugan, Senior Counsel, Office of the General Counsel, U.S.
Department of Agriculture, of counsel.
Eric A. Valle, PilieroMazza PLLC, Washington, DC, counsel for Defendant-Intervenor. With
whom were Jonathan T. Williams, Katherine B. Burrows, and Kevin T. Barnett, of counsel.
OPINION AND ORDER
Dietz, Judge.
Golden IT, LLC (“Golden IT”) protests a decision by the United States Department of
Agriculture (“USDA”) to award a Blanket Purchase Agreement (“BPA”) for technology
sustainment support services to eight offerors, including ITCON Services, LLC (“ITCON”).
Golden IT challenges the USDA’s evaluation of its proposal and source selection decision as
arbitrary, capricious, and otherwise not in accordance with law. Based on the administrative
record, the Court finds that, although Golden IT has demonstrated that certain portions of the
USDA’s evaluation were arbitrary, capricious, and not in accordance with law, it has not
demonstrated that it was prejudiced by the USDA’s errors. Accordingly, Golden IT’s motion for
judgment on the administrative record is DENIED, and the government’s and ITCON’s
respective cross-motions for judgment on the administrative record are GRANTED.
I. BACKGROUND
A. Overview of the RFQ and Evaluation Criteria
On May 26, 2022, the USDA issued a competitive request for quotes (“RFQ”) seeking
sustainment support services for technology systems and applications from vendors on the
General Service Administration’s (“GSA”) Multiple Award Schedule 54151S, Information
Technology Professional Services. AR 9,1 122.2 The scope of the services required that the
contractor have a “working and holistic understanding and knowledge of [the] application
hosting environment(s)” and that the contractor be able to “maintain and manage USDA
database environments as well as support minor database changes.” AR 123. The RFQ included
a Performance Work Statement (“PWS”), AR 141, which contained a sample call order for
sustainment support services, AR 146. The PWS contained a table (“Table 2”) that listed the
technology systems and applications that offerors would be required to support. AR 150-54.
The USDA intended to award multiple BPAs using the procedures set forth in Federal
Acquisition Regulation (“FAR”) 8.4. AR 122. The RFQ emphasized that “the main use of the
BPAs will come from . . . purchasing for [Food and Nutrition Services (“FNS”)3],” but stated
that the BPA “will be open . . . to use for our other customers as well.” Id. (emphasis omitted).
The estimated volume of purchases under the BPA was “up to $45,000,000.00 or more
depending on the Government’s needs[,]” AR 125, and the anticipated period of performance
was 5 years, AR 130. The USDA expected to award six BPAs, “[t]hree to Small Disadvantaged
Business[es] ([“SDB”]) and [t]hree to Small Business[es] ([“SB”]).” AR 135. Offerors were
required to specify the business category, SDB or SB, under which they were submitting an
offer. AR 123.
The RFQ provided that the USDA would conduct the procurement through a phased
proposal submission approach. AR 130. In Phase 1, the USDA would focus on prior experience,
and in Phase 2, it would focus on technical approach, management approach, price, and BPA
labor rates. AR 133. For Phase 1, offerors were required to submit a cover letter and a prior
experience narrative. Id. The RFQ provided that prior experience should be demonstrated by “a
minimum of two [] contracts/task orders, maximum of three, performed within the last three []
years.” AR 134. It further stated that the demonstrated prior experience “should include
management and coordination of multiple support teams and/or subcontractor relationships that
resulted in achieving quality performance under contracts that were of a comparable magnitude,
size, scope, and complexity to the services described in the PWS.” Id. The evaluation of an
offeror’s prior experience consisted of reviewing it for “Complexity (difficulty), Magnitude ($
1
The Court cites to the Administrative Record filed by the government at [ECF 24] as “AR ___.”
2
The USDA amended the RFQ three times. See AR 2-68 (Initial RFQ); AR 69-96 (First Amended RFQ); AR 97-
118) (Second Amended RFQ); AR 119-74 (Third Amended RFQ). The Court cites to the latest version of the RFQ.
3
FNS administers fifteen nutrition assistance programs for the USDA, including: the Supplemental Nutrition
Assistance Program (“SNAP”); the Special Supplemental Nutrition Program for Women, Infants, and Children
(“WIC”); the National School Lunch Program; and the Child and Adult Care Feeding Program. AR 122.
2
value), Similarity (task similarity) and Scope (functions and features) as compared to the
sustainment services described in the Performance Work Statement.” Id.
For Phase 2, offerors were required to submit a written technical package with
management approach, proposed price based on a sample call order, and proposed BPA labor
rates. AR 133, 136-37. To show their technical approach, offerors were required to
“demonstrate[] a substantive understanding of the scope, [and] complexity associated with the
objectives described in the [PWS].” AR 136. Additionally, offerors were required to include “a
substantial narrative that the [offeror] has first ha[n]d experience using a majority of the
technology categories listed in Table 2 of the PWS.” Id. To show their management approach,
offerors were required to “submit a management plan for the requirements . . . outlined in the
PWS.” Id. The management plan had to “provide a clear chain of responsibility, quality control
plan, cost control method, contract administration, and adequate, qualified staff resources.” Id.
The USDA would evaluate price quotes by comparing proposed prices to one another and to the
Independent Government Cost Estimate (“IGCE”). AR 137. The RFQ stated that quoted prices
should conform to the respective offeror’s GSA schedule prices. AR 137. However, the RFQ
also stated that “[o]fferors are strongly encouraged to provide a discount below their GSA
schedule pricing.” Id.
The RFQ stated that the USDA would evaluate the offerors by separating the SBs and
the SDBs into two business size categories to ensure a competition “on equal ground” and to
ensure “the small business goals of this procurement of 50% SDB and 50% SB” were reached.
AR 138. The USDA would evaluate each offeror’s prior experience under the Phase 1
submissions, assign a confidence rating, and advise the offerors “determined to be most capable”
to proceed to Phase 2. AR 135, 138. The USDA would then accept Phase 2 submissions,
evaluate each offeror’s technical and management approach, and assign a second confidence
rating. AR 138. The confidence ratings used for Phase 1 and Phase 2 were defined as follows:
High Confidence The Government has high confidence the vendor understands the
(Low Risk) requirement, proposes a sound approach, and will be successful in
performing the contract with little or no Government intervention.
Some Confidence The Government has some confidence the vendor understands the
(Moderate Risk) requirement, proposes a sound approach, and will be successful in
performing the contract with some Government intervention.
Low Confidence The Government has low confidence the vendor understands the
(High Risk) requirement, proposes a sound approach, or will be successful in
performing the contract even with Government intervention.
AR 139. The USDA would then evaluate price and use the two confidence ratings for the
performance price trade-off decision. AR 138. The RFQ stated that “Prior Experience and
Written Technical and Management Approach, when combined, are more important than price . .
. [h]owever, Written Technical and Management Approach, [is] more important than Prior
Experience.” AR 139.
The Source Evaluation Board (“SEB”) would “provide its final report and
recommendation to the Source Selection Authority [(“SSA”)] and a final decision [would] be
made to select the responsive, responsible offeror whose quote is determined to be the best
3
overall value to the Government.” AR 138. The RFQ stated that “[t]he SSA’s decision shall be
documented, and the documentation shall include the rationale for any business judgments and
trade-offs made or relied on by the SSA, including benefits associated with the additional costs
(if applicable).” Id.
B. The Evaluation, Award Decision, and Protest
The USDA received Phase 1 submissions from 23 vendors for the SB category and 31
vendors for the SDB category. AR 354-55. Golden IT and ITCON each made a Phase 1
submission for the SDB category. AR 266, 275. After evaluating the Phase 1 submissions, the
SEB selected ten offerors—five SB and five SDB—to proceed to Phase 2, including ITCON. AR
357. Golden IT was advised not to proceed to Phase 2 after it received a “some confidence”
rating for its prior experience. AR 356, 374. Despite the USDA’s advisement, Golden IT elected
to proceed. AR 376. Based on Golden IT’s Phase 2 submission, the SEB assigned Golden IT a
“some confidence” rating for its technical package with management approach. AR 1155-56.
Additionally, the SEB expressed concerns with Golden IT’s proposed pricing because it was
“significantly lower than the IGCE” and “gave the impression of not acquiring the correct caliber
of staff required for this requirement.” AR 1165. The SEB assigned the following ratings to the
Phase 2 offerors:
Small Business:
Vendor Phase 1, Prior Phase 2, Technical BPA Example
Experience Rating Package Rating Call Order Total
Priced
4SB-PYRAMID High Confidence High Confidence [* * *]
SYSTEMS, INC
5SB-SYDANTECH High Confidence Some Confidence [* * *]
LLC
10SB-VENTERA High Confidence High Confidence [* * *]
CORPORATION
13SB-A SQUARE High Confidence High Confidence [* * *]
GROUP LLC
14SB-CAPITAL High Confidence High Confidence [* * *]
TECHNOLOGY
GROUP, LLC
Small Disadvantaged Business:
Vendor Phase 1, Prior Phase 2, Technical BPA Example
Experience Rating Package Rating Call Order Total
Priced
5SDB-CENTENNIAL Some Confidence Some Confidence [* * *]
TECHNOLOGIES INC
7SDB-ITCON High Confidence High Confidence [* * *]
SERVICES LLC
4
8SDB-DYNAMO High Confidence High Confidence [* * *]
TECHNOLOGIES LLC
9SDB-EASY High Confidence High Confidence [* * *]
DYNAMICS
CORPORATION
16SDB-CONVISO INC High Confidence High Confidence [* * *]
19SDB-ARMEDIA LLC High Confidence High Confidence [* * *]
27SDB-GOLDEN IT LLC Some Confidence Some Confidence [* * *]
AR 1657-58. Ultimately, the SEB recommended that awards be made to eight offerors: Pyramid
Systems, Inc.; Ventera Corporation; A Square Group LLC; Capital Technology Group, LLC;
ITCON; Conviso, Inc.; Armedia LLC; and Dynamo Technologies, LLC. AR 1163. When
making their recommendation, the SEB explained “[w]hile we recognize this is more than the
anticipated 6, based off the evaluation criteria it panned out that 8 were High for both
categories.” Id. (emphasis omitted). After reviewing the SEB recommendation, the SSA
concurred and determined “that the quotes from the 8 vendors represent the best value to the
Government[.]” AR 1666. The SSA wrote a memorandum to file providing justification for
expanding the number of awards from 6 offerors to 8 offerors. See AR 1652. The SSA stated that
“we could not find any logical factors to eliminate any of those 8 based off what they proposed”
and that “[e]liminating 2 vendors that had High ratings in both factors lends itself to higher risk
to the government of protest.” Id. The SSA further elaborated that “[a]n additional benefit to
adding two more BPAs is that it would allow for more bandwidth of experienced vendors.” Id.
On September 23, 2022, the USDA made award to the eight offerors. See AR 1667-786.
Golden IT filed a bid protest in this Court on October 7, 2022, challenging the USDA’s
evaluation and source selection decision as arbitrary, capricious, and contrary to law. Compl.
[ECF 1]. ITCON intervened on October 14, 2022. See Mot. to Intervene [ECF 20]. After the
Court established a briefing schedule, Golden IT filed a motion for judgment on the
administrative record on December 23, 2022. See Pl.’s Mot. for J. on the Admin. R. [ECF 27].
On January 27, 2023, ITCON filed a cross-motion for judgment on the administrative record. See
Def.-Intervenor Cross-Mot. for J. on the Admin. R. [ECF 33]. The government filed its cross-
motion for judgment on the administrative record on February 1, 2023. Def.’s Cross-Mot. for J.
on the Admin. R. [ECF 35]. The motions are fully briefed, and the Court held oral argument on
March 1, 2023. See Scheduling Order [ECF 22].
II. LEGAL STANDARDS
The Tucker Act grants this Court “jurisdiction to render judgment on an action by an
interested party objecting to . . . the award of a contract or any alleged violation of statute or
regulation in connection with a procurement.” 28 U.S.C. § 1491(b)(1) (2018). The Tucker Act’s
waiver of sovereign immunity “covers a broad range of potential disputes arising during the
course of the procurement process[,]” including “objections to an award[.]” Sys. Application &
Techs., Inc. v. United States, 691 F.3d 1374, 1380 (Fed. Cir. 2012).4
4
The parties to this litigation do not challenge the Court’s jurisdiction over Golden IT’s complaint or Golden IT’s
standing as an interested party. However, the Court “has an obligation to satisfy itself that jurisdiction is proper[.]”
5
Under Rule 52.1 of the Rules of the United States Court of Federal Claims, a party may
file a motion for judgment on the administrative record to assess whether a federal agency acted
in accordance with the legal standards governing the decision under review. Agile Def., Inc. v.
United States, 143 Fed. Cl. 10, 17 (2019). This motion “is often an appropriate vehicle to
scrutinize an agency’s procurement actions because such cases typically involve interpretation of
contract documents or regulations, thereby presenting no disputed issues of material fact.”
Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1352 (Fed. Cir. 2004). On a motion
for judgment on the administrative record, the parties are limited to the administrative record,
and the court makes factual findings as if it were conducting a trial on the record. Bannum, Inc.
v. United States, 404 F.3d 1346, 1357 (Fed. Cir. 2005). The court’s inquiry is “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).
This Court reviews agency decisions in bid protests using the standard of review set forth
in the Administrative Procedure Act (“APA”). 28 U.S.C. § 1491(b)(4); Impresa Construzioni
Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). This standard
permits a court to set aside an agency’s contracting decision if the protestor shows it is
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A) (2018); Bannum, 404 F.3d at 1351. “Under an arbitrary or capricious standard, the
reviewing court should not substitute its judgment for that of the agency[] but should review the
basis for the agency decision to determine if it was legally permissible, reasonable, and
supported by the facts.” Glenn Def. Marine (Asia), PTE Ltd. v. United States, 105 Fed. Cl. 541,
559 (2012), aff’d, 720 F.3d 901 (Fed. Cir. 2013) (citing Motor Vehicle Mfrs. Ass’n of U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). A procurement decision is rational if
“the contracting agency provided a coherent and reasonable explanation of its exercise of
discretion.” Impresa, 238 F.3d at 1333. But “that explanation need not be extensive.” Bannum,
Inc. v. United States, 91 Fed. Cl. 160, 172 (2009) (citing Camp v. Pitts, 411 U.S. 138, 142-43
(1973)). The protestor has the burden to show by a preponderance of evidence the arbitrary and
capricious nature of the agency decision. Mortg. Contracting Servs., LLC v. United States, 153
Fed. Cl. 89, 124 (2021). “[A]n offeror’s mere disagreement with the agency’s judgment
concerning the adequacy of the proposal is not sufficient to establish that the agency acted
unreasonably.” CRAssociates, Inc. v. United States, 102 Fed. Cl. 698, 717-18 (2011) (citing
Banknote Corp. of Am., Inc. v. United States, 56 Fed. Cl. 377, 384 (2003)).
An agency decision is arbitrary and capricious when it results from unequal treatment of
the offerors. See CliniComp Int’l Inc., v. United States, 117 Fed. Cl. 722, 742 (2014) (stating that
“unequal treatment is fundamentally arbitrary and capricious, and violates . . . full and open
competition”). A claim of unequal treatment is derived from the FAR requirement that “[a]ll
contractors and prospective contractors shall be treated fairly and impartially but need not be
treated the same.” FAR 1.102-2(c)(3). An offeror is treated unequally when “the agency
unreasonably downgraded its proposal for deficiencies that were ‘substantively
L-3 Commc’ns. Corp. v. United States, 99 Fed. Cl. 283, 288 (2011) (citing Hertz Corp. v. Friend, 559 U.S. 77, 130
(2010)). Based on Golden IT’s complaint and the administrative record filed by the government, the Court is
satisfied that it has jurisdiction to render judgment on Golden IT’s challenge to the USDA’s evaluation and source
selection decision and that Golden IT has standing to bring its challenge.
6
indistinguishable’ or nearly identical from those contained in other proposals.” Office Design
Grp. v. United States, 951 F.3d 1366, 1372 (Fed. Cir. 2020). If a protestor demonstrates that the
relevant proposals were substantively indistinguishable, a reviewing court may compare and
analyze “the agency’s treatment of proposals without interfering with the agency’s broad
discretion in these matters.” Id.An agency decision is also arbitrary and capricious if the decision is a product of the
agency’s application of unstated evaluation criteria. See NVE, Inc. v. United States, 121 Fed. Cl.
169, 180 (2015) (stating that an offeror can challenge an agency’s analysis as “arbitrary,
capricious, or an abuse of discretion” when the agency relies on unstated evaluation criteria). A
claim that an agency relied upon unstated evaluation criteria in the evaluation of a proposal is
based on instruction in the FAR that “[a]n agency shall evaluate competitive proposals and then
assess their relative qualities solely on the factors and subfactors specified in the Solicitation.”
FAR 15.305(a). To demonstrate that an agency applied unstated evaluation criteria, “a protester
must show that . . . the procuring agency used a significantly different basis in evaluating the
proposals than was disclosed[.]” Banknote, 56 Fed. Cl. at 387 (2003), aff’d, 365 F.3d 1345 (Fed.
Cir. 2004).
While the APA standard calls for considerable deference to the agency, PAI Corp. v.
United States, 614 F.3d 1347, 1351 (Fed. Cir. 2010), “it is not a rubber stamp.” Overstreet Elec.
Co. v. United States, 47 Fed. Cl. 728, 742 (2000) (quoting Citizens Awareness Network, Inc. v.
U.S. Nuclear Regul. Comm’n, 59 F.3d 284, 290 (1st Cir.1995)). A court may set aside an
agency’s procurement decision if the decision lacked a rational basis, or the procurement
procedure involved a violation of regulation. Impresa, 238 F.3d at 1332; see also Safeguard Base
Operations, LLC v. United States, 989 F.3d 1326, 1343 (Fed. Cir. 2021). Nevertheless, if the
reviewing court finds that the agency’s action evinced rational reasoning and consideration of
relevant factors, it must sustain the agency’s action. 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, 285-86 (1974)).
III. DISCUSSION
In its protest, Golden IT challenges the USDA’s evaluation and award decision as
arbitrary, capricious, and otherwise not in accordance with law. Golden IT asserts that the USDA
committed several errors in its evaluation of Golden IT’s Phase 1 and Phase 2 submissions.
Golden IT argues that it was prejudiced by the USDA’s errors because, but for the USDA’s
faulty evaluation, it would have had a substantial chance of receiving a BPA under the RFQ
because it would have received “high confidence” ratings for Phase 1 and Phase 2 and would not
have received any unfavorable findings for its proposed pricing. As explained below, the Court
finds that Golden IT has demonstrated that a portion of the USDA’s findings in its Phase 1 and
Phase 2 evaluations were arbitrary, capricious, and not in accordance with law. However, the
Court also finds that Golden IT has not demonstrated that it was prejudiced by such errors
because, even if Golden IT were to be assigned “high confidence” ratings for its Phase 1 and
Phase 2 submissions, Golden IT would still not have a substantial chance to receive a BPA
award because it cannot improve its price evaluation.
7
A. Golden IT’s Challenges to the USDA’s Phase 1 Evaluation
Golden IT attacks several aspects of the USDA’s evaluation of its Phase 1 prior
experience submission. [ECF 27] at 13-19. 5 As explained below, the Court finds that the USDA
erred by treating Golden IT unequally when it noted Golden IT’s lack of Salesforce and
SharePoint experience, by failing to consider the experience of Golden IT’s joint venture partner
as required by procurement regulations, and by arbitrarily ignoring certain prior experience
referenced by Golden IT.
1. The USDA’s Finding that Golden IT Has No Salesforce or SharePoint
Experience
In its evaluation of Golden IT’s prior experience, the USDA found that Golden IT had
“[n]o Salesforce or SharePoint [experience].” AR 349. Golden IT argues that the USDA
employed unstated criteria by singling out the Salesforce and SharePoint technologies when the
RFQ only required experience with a “majority” of the technologies listed in Table 2. [ECF 27]
at 21. Golden IT also argues that the USDA engaged in unequal treatment when it found that
Golden IT’s proposal did not include Salesforce or Sharepoint experience and did not apply the
same finding to other offerors whose Phase 1 submissions similarly lacked such experience. Id.Furthermore, Golden IT asserts that this finding is irrational because Golden IT explicitly
referenced SharePoint experience in its Phase 1 submission. Id. at 22. The Court finds that the
USDA did not employ unstated evaluation criteria, but that it did treat Golden IT’s proposal
unequally and also irrationally conclude that Golden IT’s proposal contained no SharePoint
experience.
The USDA did not employ unstated evaluation criteria by noting that Golden IT lacked
Salesforce and SharePoint experience. The RFQ required offerors to provide prior experience
that demonstrates “success in providing Sustainment for Applications services of a comparable
size, scope and complexity to the Sustainment services described in the [PWS].” AR 134. The
PWS contained Table 2, which listed systems and web applications to be supported by the
contractors and included specific references to Salesforce and SharePoint. AR 152-53. The
record shows that the USDA focused on the Salesforce and SharePoint technologies in its Phase
1 evaluation, but this does not mean that the USDA used a significantly different basis in
evaluating the proposals than was disclosed in the RFQ. See Banknote Corp., 56 Fed. Cl. at 387(stating that a protestor must show “the procuring agency used a significantly different basis in
evaluating the proposals than was disclosed” to succeed on an unstated criteria claim). Both
Salesforce and SharePoint were explicitly referenced in the list of technologies to be supported
under a resultant BPA, see AR 152-53, and the USDA had the discretion to determine what prior
experience is most advantageous. See Lockheed Missiles & Space Co., Inc. v. Bentsen, 4 F.3d
955, 959 (Fed. Cir. 1993) (“[A]gencies are entrusted with a good deal of discretion in
determining which bid is the most advantageous to the [g]overnment.”) (quotations omitted).
Thus, the USDA did not employ unstated evaluation criteria when it pointed out that these
technologies were missing from Golden IT’s prior experience.
5
All page numbers in the parties’ briefings refer to the page number generated by the CM/ECF system.
8
However, the record demonstrates that the USDA treated Golden IT unequally when it
noted Golden IT’s lack of Salesforce and SharePoint experience in its evaluation and failed to
note the same for other offerors with similar levels of Salesforce and SharePoint experience.
Golden IT argues that the USDA engaged in unequal treatment because, although it found that
Golden IT’s Phase 1 submission lacked Salesforce and SharePoint experience, it did not make
similar findings as to the Phase 1 submissions of Ventera Corporation (“Ventera”) and Dynamo
Technologies, LLC (“Dynamo”). [ECF 27] at 21. In response, the government argues that
Ventera provided “examples of its experience with SharePoint when it stated it had experience
supporting Visual Studio AR and MS SQL . . . both of which are SharePoint applications.” [ECF
35] at 31 (citing AR 146-154). Notably, Golden IT also stated it had experience with Visual
Studio AR and MS SQL. AR 270. Also, Dynamo’s Phase 1 submission had references to
Salesforce and SharePoint experience that were similar to Golden IT’s, see AR 243-52, yet the
USDA did not note a deficiency in its evaluation of Dynamo’s prior experience, see AR 339.6
Thus, Golden IT’s Phase 1 submission contained prior experience with respect to the Salesforce
and SharePoint technologies that was substantively indistinguishable from that contained in the
proposals submitted by Ventera and Dynamo, yet the USDA noted a deficiency for Golden IT
and not for Ventera and Dynamo.7 This amounts to unequal treatment of Golden IT’s Phase 1
submission. See Office Design Grp., 951 F.3d at 1372 (providing that an offeror is treated
unequally when “the agency unreasonably downgraded its proposal for deficiencies that were
‘substantively indistinguishable’ or nearly identical from those contained in other proposals”).
Additionally, the USDA was incorrect when it stated that Golden IT’s Phase 1
submission contained no SharePoint experience. To the contrary, Golden IT’s submission
explicitly referenced experience with SharePoint. See AR 270-71 (listing various technologies
with which Golden IT has experience, including SharePoint). Additionally, several of Golden
IT’s listed technologies are categorized as SharePoint applications. See id; AR 152-53. The
Court will not accept a finding that is “in tension with, if not contradicted by, various aspects of
[the] record.” Allied Tech. Grp., Inc. v. United States, 94 Fed. Cl. 16, 35 (2010), aff’d, 649 F.3d
1320 (Fed. Cir. 2011).
2. The USDA’s Failure to Consider the Experience of Golden IT’s Joint
Venture Partner
6
Golden IT explicitly reference SharePoint twice in its Phase 1 submission, see AR 270 (listing SharePoint as a
technology used in its first submitted prior experience); AR 271 (listing SharePoint as a technology used in its
second submitted prior experience), and Dynamo included only one reference to SharePoint and no references to
Salesforce, see AR 243-52.
7
The government attempts to distinguish Golden IT’s experience with respect to Salesforce and SharePoint by
stating that its experience was as a subcontractor whereas Ventera’s and Dynamo’s experience was as a prime
contractor. See [ECF 35] at 31-32. The Court is not persuaded by this argument because the record demonstrates that
Golden IT is neither a subcontractor nor a prime contractor but rather a joint venture entity, as explained in Golden
IT’s cover letter of its Phase 1 submission. See AR 268.
9
For its first listed prior experience, Golden IT listed two BPAs. See AR 269-74. In its
evaluation, the USDA stated that for “1 of the 2 BPAs they reference . . . Harmonia Holdings
Group LLC [was] the prime,” and “[i]t was unclear if Golden IT was a sub-contractor (they don’t
say)?” AR 349. The USDA further stated that it believed that Golden IT was a subcontractor on
the second listed prior experience but that Golden IT made it appear that it was the prime. Id.Golden IT argues that the USDA made unlawful findings regarding its prior experience because
the USDA failed to consider the experience of its joint venture partner, Harmonia Holdings
Group LLC (“Harmonia”), as required by 13 C.F.R. § 125.8(e). [ECF 27] at 25. The Court
agrees and finds that the record does not demonstrate that the USDA considered the experience
of Golden IT’s joint venture partners as required by the regulation.
13 C.F.R. § 125.8(e) provides:
When evaluating the capabilities, past performance, experience,
business systems and certifications of an entity submitting an offer
for a contract set aside or reserved for small business as a joint
venture established pursuant to this section, a procuring activity
must consider work done and qualifications held individually by
each partner to the joint venture as well as any work done by the
joint venture itself previously. A procuring activity may not require
the protégé firm to individually meet the same evaluation or
responsibility criteria as that required of other offerors generally.
The partners to the joint venture in the aggregate must demonstrate
the past performance, experience, business systems and
certifications necessary to perform the contract.
13 CFR § 125.8(e) (emphasis added). Under the plain language of the regulation, when an
agency is evaluating the past performance or experience of an offeror submitting an offer as a
small business joint venture, the agency must consider the past performance and experience of
the joint venture partners, as well as that of the joint venture itself.8 See Goodwill Indus. of S.
Fla., Inc. vs. United States, 162 Fed. Cl. 160, 192 (2022) (“When the text is unambiguous, the
court need only read the plain language of the regulation.”).
Here, the USDA erred by not considering Harmonia’s past performance experience in its
evaluation of Golden IT’s prior experience. In the cover letter to its Phase 1 submission, Golden
IT clearly stated that “Golden is a Small Business Administration (SBA) All Small Business
Mentor Protégé Program (ASMPP) approved Mentor Protégé 8(a) Joint Venture (JV) between
8
The Court’s reading also aligns with the regulatory history of 13 C.F.R. § 125.8(e) and the language of the Small
Business Act. When implementing the latest version of the rule, the Small Business Administration (“SBA”) noted
that “[t]he reason that any small business joint ventures with another business entity . . . is because it cannot meet all
performance requirements by itself and seeks to gain experience through the help of its joint venture partner[.]” 85
Fed. Reg. 66146, 66167 (Oct. 16, 2022). Furthermore, the Small Business Act requires “if the joint venture does not
demonstrate sufficient capabilities or past performance to be considered for award of a contract opportunity, the
head of the agency shall consider the capabilities and past performance of each member of the joint venture as the
capabilities and past performance of the joint venture.”15 U.S.C. § 644(q)(1)(C). The SBA’s comments in the
federal register and the language of the Small Business Act support the Court’s conclusion that an agency must
consider the past performance experience of a joint venture partner.
10
protégé and managing partner Sara Software Systems, LLC (Sara) and mentor Harmonia
Holdings Group, LLC (Harmonia).” AR 268. As such, the USDA was on notice that Golden IT
was submitting its offer as a joint venture. With this information, under 13 C.F.R. § 125.8(e), the
USDA should have considered Harmonia’s prior experience when it was evaluating the prior
experience of Golden IT. While the evaluation shows that the USDA recognized that Harmonia
was listed as the prime contractor on the referenced BPAs, it also shows that the USDA was
confused as to whether Golden IT itself served as a subcontractor on the BPA. See AR 349. This
apparent confusion demonstrates that the USDA failed to understand the relationship between
Golden IT and Harmonia and, as a result, also failed to properly consider Harmonia’s experience
as required by 13 C.F.R. § 125.8(e). Accordingly, the USDA improperly evaluated Golden IT’s
prior experience.9
3. The USDA’s Failure to Consider the Magnitude of Golden IT’s Prior
Experience
As noted above, the first prior experience that Golden IT included in its submission
referenced two BPAs. Golden IT valued these BPAs at a magnitude or dollar value of
$49,382,841. AR 269. The USDA found that the first BPA was “technically outside of the 3
years requirement (recent)” and that “only 3 task[] order[s] were within the past 3 years” as
required by the RFQ. AR 349. The USDA then concluded that the three task orders were “valued
at $9,305,318.” Id. Based upon this, the USDA found that Golden IT had not established
“[m]agnitude ($ value) . . . with this experience.” Id. The USDA further stated that “the other
BPA [was] within the 3 years.” Id. However, the USDA did not assign a value to this BPA. See
id.Golden IT argues that the USDA’s evaluation of this prior experience was “unreasonable
and irrational” because, in addition to the three task orders totaling $9,305,318, which were
performed in the past three years, the second BPA contained three recent task orders, which the
agency “completely ignored.” [ECF 27] at 24. According to Golden IT, the six task orders
together are valued at “roughly $37m,” and the USDA should not have found its experience “to
be non-recent and lacking in magnitude.” Id.The USDA’s finding with respect to the magnitude of Golden IT’s first prior experience
was arbitrary and capricious. In evaluating Golden IT’s first prior experience, the USDA noted
that the first BPA included three task orders that fell within the three-year requirement, and that
these task orders were valued at $9,305,318. AR 349. However, while the USDA stated that
“[t]he other BPA is within the 3 years[,]” it is unclear if the USDA actually considered the value
of the task orders under the second BPA. See AR 349. The USDA makes no mention of the
second BPA’s value and does not explain why it did not contribute to its evaluation of the
magnitude of this experience. See id. Had the USDA added the value of the recent task orders
under the second BPA to the value of the three recent task orders under the first BPA, it
9
The Court is not persuaded by the government’s argument that “Golden IT failed to demonstrate that it served as a
prime contractor on a project.” [ECF 35] at 30. Golden IT, as a mentor-protégé joint venture, was not required by
law or by the terms of the RFQ to identify its role as a subcontractor or prime contractor. Nor could it have done so.
Golden IT itself was neither a prime contractor nor a subcontractor with respect to its referenced prior experience.
11
presumably would have arrived at an increased overall value, which would be closer to the
estimated value of the BPA to be awarded under the RFQ. As such, the USDA has not provided
a rational basis for its finding that Golden IT has not established the appropriate magnitude or
dollar value with this experience. See Impresa, 238 F.3d at 1333; Mortg. Contracting Servs.,
LLC, 153 Fed. Cl. at 125-26 (“[A]lthough highly deferential, the court's review of an agency's
past performance evaluation is neither an automatic endorsement of the agency's actions nor
tolerant of observable mistakes[.]”)
4. The USDA’s Finding that Golden IT’s Level of Programming Experience
Was Not Detailed
Also in its Phase 1 evaluation, the USDA found that Golden IT’s “level of programming
[was] not detailed.” AR 349. Golden IT argues that this finding was based upon unstated
evaluation criteria because the word “programming” does not appear in the RFQ. [ECF 27] at 17.
The Court finds this argument unpersuasive.
The RFQ provided that “[t]he contractor shall serve as the source of technical expertise
with regards to maintaining and improving the USDA application environment,” and “shall
maintain and manage USDA database environments as well as support minor database changes.”
AR 123. Additionally, it stated that “the contractor shall provide Subject Matter Expertise (SME)
for all database environments for subject systems, including performance monitoring and tuning,
troubleshooting, configuration management, and planning” and the “SME may also be asked to
provide expert advice and analysis in other areas including independent review, evaluation and
recommendations of proposed database changes, implementations, configurations, and
operations.” Id.
While the word “programming” is not contained in the RFQ, it was rational for the
USDA to consider programming experience in its evaluation of the offeror’s respective prior
experience because “programming” is intrinsic to the scope of services described in the RFQ.
See Banknote Corp., 56 Fed. Cl. at 387 (“[I]t is well-settled that a solicitation need not identify
each element to be considered by the agency during the course of the evaluation where such
element is intrinsic to the stated factors.”) (quotation marks omitted). Programming is a
necessary part of implementing, configuring, maintaining, and troubleshooting the software
applications to ensure that the functionality of the software meets the USDA’s requirements.
Accordingly, the USDA did not act arbitrarily in its evaluation of Golden IT’s programming
experience.
5. The USDA’s Failure to Consider Golden IT’s FNS Experience
Golden IT argues that, in the USDA’s evaluation, it is “unclear how, or even if, [its]
FNS experience factored into the [USDA’s] decision to assign Golden IT a Some
Confidence rating.” [ECF 27] at 25. It asserts that “the [USDA] informed offerors that FNS
experience ‘would give [USDA] a higher confidence of a vendor[,]’” and that the USDA
“fail[ed] to follow the terms of the [RFQ]” when it did not give Golden IT a high
confidence rating based on its prior FNS experience. Id. The Court finds this argument
meritless.
12
Golden IT supports its argument with the USDA’s response to a question submitted
by an offeror. The offeror asked:
Is prior USDA FNS prime experience required and will that be used
as an evaluation factor for Phase 1? Do firms with FNS Prime
experience have a more favorable chance of making it to Phase 2
than those without ANY USDA FNS experience?
AR 93. In response, the USDA stated:
Naturally if we see FNS experience it would give us a higher
confidence of a vendor. Doesn’t mean another vendor cannot also
receive a high confidence too.
Id. Nothing in the USDA’s response guarantees that the USDA will assign an offeror a
“high confidence” rating or otherwise obligates the USDA to provide an offeror with a
“high confidence” rating simply because the offeror includes FNS experience in its prior
experience submission. The USDA’s response simply states that the USDA will have
higher confidence in an offeror who demonstrates prior FNS experience. Therefore, the
USDA did not violate the terms of the RFQ by not assigning a “high confidence” rating to
Golden IT even though it included FNS experience in its Phase 1 submission.
B. Golden IT’s Challenges to the USDA’s Phase 2 Evaluation
Golden IT also attacks several aspects of the USDA’s evaluation of its Phase 2 technical
and management approach submission and price quote. [ECF 27] at 26-34. As explained below,
the Court finds that the USDA acted arbitrarily by finding that Golden IT failed to address key
issues and failed to provide a level of effort break-out.
1. The USDA’s Evaluation of Golden IT’s Technical Approach
a. The USDA’s Finding that Golden IT Lacks Support for Its
Salesforce Experience
The USDA found the following with respect to Golden IT’s technical approach: “The
vendor support for specific software is not shown in all instances. For example, Salesforce
support does not explain how much development and maintenance support for Salesforce app
was done.” AR 1155. Golden IT argues that the USDA “again applied unstated criteria by again
faulting Golden IT for its lack of specific support for Salesforce” because “the [USDA] made
clear that all 148 technologies in the PWS [] need not be addressed; instead, only a “majority”
required discussion.” [ECF 27] at 27 (emphasis omitted). Golden IT also argues that the USDA
engaged in unequal treatment when it found that Golden IT did not provide support for its
Salesforce experience and failed to find a similar concern with respect to another offeror “that
did not mention Salesforce at all in its proposal.” Id. The Court finds that the USDA did not
13
employ unstated evaluation criteria by noting that Golden IT lacked support for its Salesforce
experience and that the USDA did not engage in an unequal evaluation.
As noted above, to succeed on an unstated evaluation criteria claim, Golden IT must
show that the procuring agency used a significantly different basis in evaluating the proposals
than was disclosed. See Banknote Corp., 56 Fed. Cl. at 387. For technical approach, the RFQ
instructed as follows:
The Vendor shall submit a technical approach that demonstrates a substantive
understanding of the scope, complexity associated with the objectives described in
the BPA Performance Work Statement (PWS). The quote shall present the
Vendor’s approach in a way that demonstrates a clear understanding of, and clear
plan to achieve all objectives and performance metrics as outlined in the BPA
Performance Work Statements (PWS).
Also, to be included is a substantial narrative that the vendor has first ha[n]d
experience using a majority of the technology categories listed in Table 2 of the
PWS. Vendor [should] address[] the experience managing[,] operating[,] and
maintaining custom applications and databases already in production and
experience with transition. This experience will demonstrate the most capable
vendors.
AR 136. In Golden IT’s proposed technical approach, it included a table demonstrating
its experience with the technologies listed in Table 2. See AR 765-71. Next to Salesforce,
Golden IT stated that it “supported FPAC’s ERC systems of SAP and Salesforce, and via
ETL extracted ERP data to load into the EDW.” AR 769. In its evaluation, the USDA
identified this as one example of where Golden IT failed to provide a substantial narrative
of its experience supporting the specific software listed in the RFQ. See AR 1155. The
USDA’s finding was not based on Salesforce alone. Thus, the USDA did not use a
significantly different basis in evaluating Golden IT’s technical approach than was
disclosed in the RFQ when it found that Golden IT’s support for specific software was
not shown in all instances. Rather, the USDA had a rational basis for this finding because
Golden IT failed to provide the level of detail called for by the RFQ. See Westech Int’l.,
Inc. v. United States, 79 Fed. Cl. 272, 296 (2007) (stating that the offeror “carries the
burden of presenting an adequately written proposal, and an offeror's mere disagreement
with the agency's judgment concerning the adequacy of the proposal is not sufficient to
establish that the agency acted unreasonably.”)
To succeed on its unequal treatment claim, Golden IT must show that the USDA
downgraded its proposal for a deficiency that was substantively indistinguishable or
nearly identical from that contained in other proposals. See Office Design Grp., 951 F.3d
at 1372. Golden IT argues that the USDA engaged in unequal treatment when it faulted
Golden IT’s proposal for its lack of support for its Salesforce experience and did not
similarly fault a proposal submitted by another offeror, Capital Technology Group, LLC
(“Capital”), which did not address Salesforce at all. [ECF 27] at 28. However, Golden IT
fails to demonstrate that its proposed technical approach was substantively
14
indistinguishable or nearly identical to Capital’s proposed technical approach. Although
Golden IT specifically included Salesforce experience in its technical approach, the
USDA found that it failed to provide adequate support for that experience. See AR 769.
On the other hand, Capital did not include Salesforce experience in its technical
approach—which distinguishes its technical approach from Golden IT’s approach and
makes the USDA’s finding that Golden IT’s technical approach lacks support for its
Salesforce experience inapplicable to Capital’s technical approach.
b. The USDA’s Finding that Golden IT Did Not Address Key
Issues
The USDA also found that Golden IT’s technical approach “[d]id not address key
issues[.]” AR 1155. Golden IT argues that this finding was irrational because the RFQ
contained “no identifiable ‘key issues’ to be addressed.” [ECF 27] at 28. The Court finds
that the USDA did not have a rational basis for finding that Golden IT’s technical
approach “[d]id not address key issues[.]”
“Under an arbitrary or capricious standard, the reviewing court should not
substitute its judgment for that of the agency[] but should review the basis for the agency
decision to determine if it was legally permissible, reasonable, and supported by the
facts.” Glenn Def. Marine (Asia), PTE Ltd., 105 Fed. Cl. at 559 (citing State Farm, 463
U.S. at 43). The Agency must present a full and reasoned explanation of its decision for
the reviewing court to perform meaningful review. Mortg. Contracting Servs., LLC, 153
Fed. Cl. at 121 (citing In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002)).
In this instance, the USDA only provides the conclusive statement that Golden IT
“[d]id not address key issues” without further explanation. While the RFQ required that
offerors submit a technical approach demonstrating a clear understanding of the
objectives described in the PWS and a substantial narrative explaining its experience with
the technologies listed in the PWS, it did not contain the term “key issues,” nor did it
indicate to the offerors that the USDA would place greater emphasis on certain PWS
objectives. See AR 120-40. Without a definition of “key issues” in the RFQ, or an
explanation in the evaluation findings of what specific issues the USDA determined were
not addressed by Golden IT’s technical approach, the USDA has not provided a rational
basis for this finding. See Mortg. Contracting Servs., LLC, 153 Fed. Cl. at 121.
c. The USDA’s Finding that Golden IT’s Proposal Was Not
Specific to FNS
Finally, in evaluating Golden IT’s technical approach, the USDA found that the
“[p]roposal was very general and not specific to FNS.” AR 1155. Golden IT argues that
this finding was arbitrary and irrational and should be disregarded because “proposals
were not required to be specific to FNS” under the RFQ. [ECF 27] at 29. The Court finds
that the USDA had a rational basis for this finding.
15
The RFQ stated that “the main use of the BPAs will come from Procurement
Operations Division (POD) purchasing for FNS.” AR 122 (emphasis in original).
Additionally, the RFQ went into detail about the FNS, its mission, and the programs it
administers. Id. It also specified certain databases utilized by the FNS, AR 123, and it
included a Sample Call Order for pricing purposes titled, “FNS OIT Sustainment
Operations for Applications,” AR 146. The RFQ clearly placed offerors on notice that the
primary use of the services was for FNS and that the proposals would be evaluated with
respect to each offeror’s ability to perform the necessary sustainment operations services
for the technologies and applications used by FNS. In this context, the USDA’s finding
that Golden IT’s proposal was generic and not specific to FNS was not arbitrary.
2. The USDA’s Evaluation of Golden IT’s Management Approach
a. The USDA’s Finding that Golden IT’s Quality Control
Plan (“QCP”) Does Not Address Subcontractors
In evaluating Golden IT’s management approach, the USDA found that Golden
IT’s “[QCP] does not identify quality control for subcontractor work.” AR 1155. Golden
IT argues that this finding was irrational because “Golden IT did not propose a
subcontractor” and “[t]here is no requirement that the [QCP] include plans for
subcontract work when there are no subcontractors.” [ECF 27] at 30-31. The Court finds
that the USDA provided a rational basis for this finding.
For management approach, the RFQ provided that:
The Vendor shall submit a management plan for the requirements
(tasks, subtasks, deliverables, etc.) outlined in the PWS. This plan
shall provide a clear chain of responsibility, quality control plan,
cost control method, contract administration, and adequate,
qualified staff resources. The management plan shall provide:
• [. . .]
• The Contractor shall submit the [QCP]. The vendor (including
subcontractors) must demonstrate appropriate and sufficient
procedures, facilities, and staff to meet the performance requirement
outlined in the task order PWS.
AR 136. Golden IT concedes that its QCP did not identify quality control measures for
subcontractors but maintains that it was not required to do so because it did not propose
the use of a subcontractor. [ECF 27] at 30-31. However, as part of its management
approach, Golden IT indicated that, upon award, it would, among other things, “finalize
subcontracting agreements.” AR 783. This statement suggests that Golden IT intended to
enter into subcontracting agreements as part of its performance and contradicts Golden
IT’s assertion that it did not propose the use of subcontractors. Accordingly, the USDA
16
had a rational basis for finding that Golden IT’s QCP did not “identify quality control for
subcontractor work.” AR 1155.
b. The USDA’s Finding that Golden IT’s Proposal Does Not
Address Sample Task Order Requirements
The USDA found that Golden IT’s “proposal does not address the sample task
order requirements in sufficient detail to determine how they would support this task.”
AR 1155. Golden IT argues that the USDA’s failure to “describe the meaning of
sufficient detail” or identify the missing and underdeveloped details “renders its fin[d]ing
irrational.” [ECF 27] at 31. The Court also finds that the USDA had a rational basis for
this finding.
The RFQ required that the offerors’ management approach “demonstrate
appropriate and sufficient procedures, facilities, and staff to meet the performance
requirement outlined in the task order PWS.” AR 136. It appears that the USDA
determined that Golden IT’s proposed management approach failed to provide enough
detail for the USDA to feel confident that Golden IT would be able to meet this
performance requirement. As the offeror, Golden IT “carries the burden of presenting an
adequately written proposal, and [its] mere disagreement with the agency’s judgment
concerning the adequacy of the proposal is not sufficient to establish that the agency
acted unreasonably.” Westech Int’l., Inc., 79 Fed. Cl. at 296. This determination is within
the discretion of the USDA, and the Court will not second guess it. See E.W. Bliss Co. v.
United States, 77 F.3d 445, 449 (Fed. Cir. 1996) (noting that arguments that “deal with
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.”).
c. The USDA’s Finding that Golden IT’s Proposal Does Not
Address Level of Effort
The USDA found that Golden IT “[did] not break out level of effort for other
agency tasks making it difficult to determine what level of support they provided
compared to a prime or subcontractor.” AR 1155-56. Golden IT argues that this finding is
arbitrary because “[i]t is difficult to understand [the USDA’s] concern here, or even what
it is referring to.” [ECF 27] at 31. Further, it argues that the RFQ “does not require a
‘break out level of effort.” Id. The Court concludes that this finding is arbitrary because it
lacks a reasoned explanation that would enable the Court to perform a meaningful
review. See Mortg. Contracting Servs., LLC, 153 Fed. Cl. at 121.
As the government argues, it is conceivable that this finding means that the
USDA determined that Golden IT “did not adequately explain what tasks they would be
responsible for completing [in] the sample call order, versus a subcontractor’s tasks.”
[ECF 35] at 41. However, the Court will not rely upon post hoc explanations for the
USDA’s decisions. Great Lakes Dredge & Dock Co. v. United States, 60 Fed. Cl. 350,
358 (2004) (“After-the-fact rationalizations for agency action should be rejected, and
17
legal arguments for agency actions must find support in the administrative record.”); see
also Vanguard Recovery Assistance v. United States, 99 Fed. Cl. 81, 102 (2011) (“Post
hoc declarations and arguments will be discounted or disregarded.”). If it was the case
that Golden IT did not adequately explain the division of tasks between it and its
subcontractors, then the USDA should have stated its concern more clearly. As written,
this finding is unclear. The USDA does not explain what “other agency tasks” it is
referring to. Additionally, it is unclear whether the USDA is concerned with the level of
support that Golden IT provided in the past or with the level of support that it would
provide in the future under the sample call order. While “[a]n explicit explanation is not
necessary . . . where the agency’s decisional path is reasonable discernible[,]” this finding
is arbitrary because it does not provide a reasoned explanation that enables the Court to
understand the USDA’s rationale for its decision. DynCorp Int’l, LLC v. United States,
10 F.4th 1300, 1315 (Fed. Cir. 2021).
3. The USDA’s Evaluation of Golden IT’s Price
In its evaluation of Golden IT’s price quote, the USDA found the following:
The evaluation team recognized that Golden IT[’s] quoted price for
the example call was significantly lower than the IGCE and was the
second lowest of the vendors. It gave the impression of not acquiring
the correct caliber of staff required for this requirement. In looking
at the positions offered, they were generally in line but in their
discount of the rates-it was so high that it would be a concern if the
vendor could retain that caliber of staff at those rates (moderate
risk).
AR 1165. Golden IT argues that this finding was arbitrary and irrational because although its
“price was lower than the average [proposed price of all awardees]—[] it was hardly lower than
the [RFQ’s] expected IGCE.”10 [ECF 27] at 33. The Court finds that the USDA had a rational
basis for concluding that Golden IT’s price quote was significantly lower than the IGCE and
presented a moderate risk.
The RFQ stated that “[p]rice quotes shall be evaluated by comparing proposed prices
received in response to the solicitation and to the [IGCE].” AR 137. The IGCE for the sample
call order was $1,385,060.00. AR 1158, 1162, 1657. Golden IT proposed a price quote for the
sample call order of [* * *], AR 785, which is [* * *] lower than the IGCE. On this basis, it was
reasonable for the USDA to consider Golden IT’s proposed price quote “significantly lower”
than the IGCE. Further, the USDA’s determinations that Golden IT’s lower price quote “gave the
impression of not acquiring the correct caliber of staff” and that it created concerns with Golden
IT’s ability to retain staff were also reasonable. Because the USDA provided a reasonable
explanation, the Court finds that the USDA’s evaluation of Golden IT’s price quote was not
arbitrary or irrational. See Advanced Data Concepts, 216 F.3d at 1058.
10
To advance this argument, Golden IT relies upon the USDA’s response to an offeror’s question about the IGCE
for the sample call order, which stated that the “[m]agnitude is from $1 Million - $1.5 Million.” AR 171.
18
C. Whether Golden IT was Prejudiced by the USDA’s Errors
Having found that the USDA acted arbitrarily, capriciously, and contrary to the law with
respect to certain portions of its evaluation, the Court now considers whether Golden IT was
prejudiced by the USDA’s errors. See Bannum, 404 F.3d at 1351 (stating that once a court finds
that an agency acted arbitrarily, the court “proceeds to determine, as a factual matter, if the bid
protester was prejudiced by that conduct”). For Golden IT to prevail, it “must show prejudicial
error.” Glenn Def. Marine (Asia), PTE, Ltd. v. United States, 720 F.3d 901, 908 (Fed. Cir. 2013).
There is no presumption of prejudice upon a showing that an agency acted irrationally. Sys. Stud.
& Simulation, Inc. v. United States, 22 F.4th 994, 998 (Fed. Cir. 2021). To establish prejudice,
Golden IT must show that “but for the alleged error, there was a substantial chance that [it]
would receive an award—that it was within the zone of active consideration.” Allied Tech. Grp.,
Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir. 2011) (quoting Statistica, Inc. v.
Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996)).
The Court finds that Golden IT has not demonstrated that it was prejudiced by the
USDA’s errors. The USDA assigned Golden IT “some confidence” ratings for its Phase 1 and
Phase 2 submissions. AR 1163. The USDA assigned the eight offerors selected for BPA award
“high confidence” ratings. AR 1163. As explained above, the Court determined that the USDA
made several findings in its Phase 1 and Phase 2 evaluation of Golden IT’s submissions that
were arbitrary, capricious, and contrary to the law. If the USDA were to conduct a reevaluation
of Golden IT’s Phase 1 and Phase 2 submissions based on the Court’s decision and the
reevaluation were to result in a revised tabulation of favorable and unfavorable findings, it is
possible that Golden IT would receive “high confidence” ratings, like the selected offerors. Since
the record does not illustrate how the USDA might attribute revised findings to its confidence
ratings for each phase, the Court cannot conclude that Golden IT would not have a substantial
chance of being assigned “high confidence” ratings for its Phase 1 and Phase 2 submissions.
However, even if Golden IT were to be assigned “high confidence” ratings based on a
reevaluation, Golden IT would still not have a substantial chance to receive a BPA award
because it cannot improve its price evaluation. The Court determined that the USDA rationally
found that Golden IT’s price quote presented a “moderate risk.” In support of its evaluation of
Golden IT’s price quote, the USDA explained that the proposed discount to Golden IT’s BPA
labor rates “was so high that it would be a concern if [Golden IT] could retain that caliber of staff
at those rates” and “[i]t gave the impression of not acquiring the correct caliber of staff required
for this requirement.” AR 1165. The USDA’s unfavorable evaluation of Golden IT’s price quote
is critical because, for all offerors selected for award, the USDA stated that their proposed
pricing “showed that they understood the requirement and their pricing was aligned.” AR 1164.
It does not appear that the USDA assigned any level of risk to the respective price quotes
submitted by the eight selected offerors. See AR 1160-65.
The RFQ provided that the USDA would use the Phase 1 and Phase 2 confidence ratings
and the proposed pricing to perform the “[p]erformance [p]rice [t]rade-[o]ff.” See AR 139-40.
While the RFQ provided that prior experience and technical and management approach are more
important than price, price was still an evaluation factor that the USDA considered in its trade-
off analysis. Id. The record shows that the USDA determined that the eight offerors selected for
19
award represented “the best overall value, and lowest risk to the government” based on the
combination of their “high confidence” ratings and their proposed pricing. AR 1163. In the
Source Selection Decision Memorandum, the SSA agreed with awarding BPAs to the
“reasonably priced highest rated” offerors because these offerors represented the best value to
the government. AR 1666. In sum, each of the offerors selected by the USDA for BPA award
received “high confidence” ratings for prior experience and technical and management approach
and favorable findings for their proposed pricing. Because Golden IT does not have a substantial
chance to improve its price evaluation and eliminate the risk associated with its price quote,
Golden IT has not demonstrated that, but for the USDA’s errors, it would have a substantial
chance at receiving a BPA award.
IV. INJUNCTIVE RELIEF
Golden IT requests that the Court enter a permanent injunction enjoining performance of
the BPAs based on the USDA’s evaluation and source selection decision. [ECF 27] at 37.
Golden IT also requests that the Court require the USDA to perform a proper evaluation and
make a reasonable award decision. Id. When deciding if a permanent injunction is warranted, the
Court considers whether: “(1) the plaintiff has succeeded on the merits, (2) the plaintiff will
suffer irreparable harm if the court withholds injunctive relief, (3) the balance of hardships to the
respective parties favors the grant of injunctive relief, and (4) the public interest is served by a
grant of injunctive relief.” Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir.
2009) (citing PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004)). Achieving
success on the merits “is a necessary element for a permanent injunction.” Dell Fed. Sys. v.
United States, 906 F.3d 982, 999 (Fed. Cir. 2018). In this case, Golden IT has not succeeded on
the merits because it has not demonstrated that it was prejudiced by the USDA’s errors.
Therefore, Golden IT is not entitled to a permanent injunction.
V. CONCLUSION
For the reasons stated above, Golden IT’s motion for judgment on the administrative
record is DENIED and the government’s and ITCON’s cross-motions for judgment on the
administrative record are GRANTED. The Clerk is DIRECTED to enter judgment accordingly.
IT IS SO ORDERED.
s/ Thompson M. Dietz
THOMPSON M. DIETZ, Judge
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