DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO · PDF fileNo. 13-1012 (Judge Lettow) (BID PROTEST) IN THE UNITED STATES COURT OF THE FEDERAL CLAIMS HYPERION, INC., Plaintiff, v. THE

No. 13-1012

(Judge Lettow)

(BID PROTEST)

IN THE UNITED STATES COURT OF THE FEDERAL CLAIMS

HYPERION, INC.,

Plaintiff,

v.

THE UNITED STATES,

Defendant.

DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO PLAINTIFF’S

MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD, AND CROSS-

MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD

STUART DELERY

Assistant Attorney General

OF COUNSEL: BRYANT G. SNEE

Acting Director

STEPHANIE MAGNELL

Trial Attorney KIRK T. MANHARDT

U.S. Army Legal Services Agency Assistant Director

Contract and Fiscal Law Division

9275 Gunston Road RYAN M. MAJERUS

Fort Belvoir, VA 22060 Trial Attorney

Commercial Litigation Branch

Civil Division

Department of Justice

P.O. Box 480

Ben Franklin Station

Washington, D.C. 20044

Tele: (202) 307-0163

Fax: (202) 307-0972

February 20, 2014 Attorneys for Defendant

Case 1:13-cv-01012-CFL Document 21 Filed 02/21/14 Page 1 of 41

i

TABLE OF CONTENTS

STATEMENT OF THE ISSUES.................................................................................................... 1

STATEMENT OF THE CASE ....................................................................................................... 2

I. Nature Of The Case ................................................................................................ 2

II. Statement Of Facts .................................................................................................. 2

SUMMARY OF THE ARGUMENT ............................................................................................. 4

ARGUMENT .................................................................................................................................. 6

I. Hyperion’s Protest Should Be Dismissed For Lack Of Jurisdiction

Because It Does Not Have Standing To Bring This Protest ................................... 6

A. Legal Standard ............................................................................................ 6

B. Hyperion Lacks Standing Because

, And It Cannot Show It Was Prejudiced By A

Significant Error In The Procurement Process ........................................... 8

C. Hyperion’s Attempts To Establish Standing By Arguing

That The Proposals Of The Offerors

Contained Deficiencies Such

That The Agency Should Have Found Them Unacceptable

Rest On Erroneous Grounds ..................................................................... 10

i. Hyperion's Claim That Did

Not Comply With FAR 52.219-14 Is Misplaced, Because

That Provision Concerns Contract Administration And

Is Not A Legitimate Basis For Protest .......................................... 10

ii. Hyperion's Claim That Did

Not Provide Price Realism Analyses In Their Proposals

Is Irrelevant And Misguided ......................................................... 14

iii. Hyperion's Claim That Failed

To Conform With A Formal Solicitation Question-And-

Answer Because Of Stated Assumptions In Their Proposals

Is Meritless .................................................................................... 17

II. Alternatively, The Court Should Enter Judgment Upon The

Administrative Record In Favor Of The Government, Because

The Agency’s Contract Award Was Reasonable And In

Accordance With Established Law ....................................................................... 20


ii

A. Legal Standard .......................................................................................... 21

B. Hyperion’s Claims That The Awardee’s Proposal Did Not

Lack Merit ................................................................................................. 22

i. Hyperion's Errs in Relying Upon FAR 9.104-2 As

Establishing The Responsibility Criteria That Apply

To This Protest, Because FAR 9.104-2 Does Not Apply

To This Solicitation....................................................................... 23

ii. Hyperion’s Claim That

Is Without Merit And Is Not Supported

By The Solicitation’s Terms ......................................................... 25

C. Hyperion’s Claim That

Is Misplaced, Because That Provision Concerns

Contract Administration And Is Not A Legitimate Ground

For Protest ................................................................................................. 29

D. Hyperion’s Claims That The Agency Erred In Not Conducting

A Price Realism Analysis Lack Merit And Have Been Waived .............. 31

E. Hyperion Has Not, And Cannot, Establish That It Was Prejudiced

By The Agency’s Award Of The Contract To TCSC ............................... 32

III. Hyperion Has Not Established That It Is Entitled To Injunctive Relief ............... 33

CONCLUSION ............................................................................................................................. 34


iii

TABLE OF AUTHORITIES

CASES

Advanced Data Concepts, Inc. v. United States,

216 F.3d 1054 (Fed. Cir. 2000)............................................................................. 21

Alfa Laval Separation, Inc. v. United States,

175 F.3d 1365 (Fed. Cir. 1999)............................................................................. 10

Am. Fed'n of Gov. Employees v. United States,

258 F.3d 1294 (Fed. Cir. 2001)............................................................................... 7

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242 (1986) .............................................................................................. 21

Banknote Corp. of Am., Inc. v. United States,

365 F.3d 1345 (Fed. Cir. 2004)....................................................................... 22, 32

Bannum, Inc. v. United States,

404 F.3d 1346 (Fed. Cir. 2005)...................................................................... passim

Blount, Inc. v. United States,

22 Cl. Ct. 221 (1990) ................................................................................ 12, 13, 30

Blue & Gold Fleet, L.P. v. United States,

492 F.3d 1308 (Fed. Cir. 2007)...................................................................... passim

Camp v. Pitts,

411 U.S. 138 (1973) .............................................................................................. 21

Centech Grp., Inc. v. United States,

79 Fed. Cl. 562 (2007) .................................................................................... 13, 30

Centech Grp., Inc. v. United States,

554 F.3d 1029 (Fed. Cir. 2009)....................................................................... 13, 22

Ceres Envtl. Servs., Inc. v. United States,

97 Fed. Cl. 277 (2011) .............................................................................. 15, 16, 31

Chapman Law Firm v. United States,

63 Fed. Cl. 519 (2005) .......................................................................................... 13

Cincom Sys., Inc. v. United States,

37 Fed. Cl. 266 (1997) .......................................................................................... 33


iv

COMINT Sys. Corp. v. United States,

700 F.3d 1377 (Fed. Cir. 2012)............................................................................... 9

CRAssociates, Inc. v. United States,

95 Fed. Cl. 357 (2010) .......................................................................................... 15

Dalton v. Sherwood Van Lines, Inc.,

50 F.3d 1014 (Fed. Cir. 1995)......................................................................... 12, 29

Data Gen. Corp. v. Johnson,

78 F.3d 1556 (Fed. Cir. 1996)......................................................................... 10, 22

Emery Worldwide Airlines, Inc. v. United States,

264 F.3d 1071 (Fed. Cir. 2001)................................................................. 21, 22, 32

Eskridge Research Corp. v. United States,

92 Fed. Cl. 88 (2010) ............................................................................................ 21

Fisher v. Haliburton,

667 F.3d 602 (5th Cir. 2012) ................................................................................ 14

Frazier v. United States,

79 Fed. Cl. 148 (2007) .......................................................................................... 12

Gov't Technical Servs. LLC v. United States,

90 Fed. Cl. 522 (2009) .................................................................................... 12, 29

Impresa Construzioni Geom. Domenico Garufi v. United States,

238 F.3d 1324 (Fed. Cir. 2001)............................................................................. 22

Info. Tech. & Applications Corp. v. United States,

316 F.3d 1312 (Fed. Cir. 2003)................................................................................8

Jacobs Tech. Inc. v. United States,

100 Fed. Cl. 186 (June 8, 2011) ........................................................................ 9, 32

L-3 Commc'ns Corp. v. United States,

99 Fed. Cl. 283 (2011) .......................................................................................... 32

Labat-Anderson Inc. v. United States,

50 Fed. Cl. 99 (2001) ............................................................................................ 15

Labatt Food Serv., Inc. v. United States,

577 F.3d 1375 (Fed. Cir. 2009)...................................................................... passim


v

Lermer Germany GmbH v. Lermer Corp.,

94 F.3d 1575 (Fed. Cir. 1996)............................................................................... 33

Linc Gov't Servs., LLC v. United States,

96 Fed. Cl. 672 (2010) ...................................................................................... 8, 23

Masai Techs. Corp. v. United States,

79 Fed. Cl. 433 (2007) .......................................................................................... 16

Mil-Mar Century Corp. v. United States,

111 Fed. Cl. 508 (2013) ........................................................................................ 16

Myers Investigative & Sec. Servs., Inc. v. United States,

275 F.3d 1366 (Fed. Cir. 2002)........................................................................... 7, 8

PGBA, LLC v. United States,

389 F.3d 1219 (Fed. Cir. 2004)............................................................................. 33

Rex Serv. Corp. v. United States,

448 F.3d 1305 (Fed. Cir. 2006)............................................................................... 7

United States v. IBM Corp.,

892 F.2d 1006 (Fed. Cir. 1989)...................................................................... passim

USfalcon, Inc. v. United States,

92 Fed. Cl. 436 (2010) .......................................................................................... 32

Weeks Marine, Inc. v. United States,

575 F.3d 1352 (Fed. Cir. 2009)............................................................................... 7

STATUTES

5 U.S.C. § 706(2)(A)......................................................................................................... 21

15 U.S.C. § 637(a)(14) ...................................................................................................... 11

28 U.S.C. § 1491(b) .................................................................................................... 12, 28

28 U.S.C. § 1491(b)(1) ................................................................................................... 6, 7

28 U.S.C. § 1491(b)(4) ..................................................................................................... 21

31 U.S.C. § 3551 ................................................................................................................. 7

42 U.S.C. § 1651 ............................................................................................................... 14

42 U.S.C. § 1651(a)(3) ...................................................................................................... 14


vi

REGULATIONS

FAR 9.104-2 .............................................................................................................. passim

FAR 9.104-2(a) .......................................................................................................... passim

FAR 15.101-2 ..................................................................................................................... 2

FAR 15.306 ......................................................................................................................... 2

FAR 15.404-1 ................................................................................................................... 30

FAR 15.404-1(b) ............................................................................................................... 15

FAR 15.404-1(b)(2) .......................................................................................................... 30

FAR 15.404-1(b)(2)(i) ...................................................................................................... 30

FAR 15.404-1(b)(2)(v) ..................................................................................................... 30

FAR 15.404-3(b) ............................................................................................................... 15

FAR 52.219-14 .......................................................................................................... passim

FAR 52.219-14(c)(1) ........................................................................................................ 11

FAR 52.228-3 ................................................................................................................... 14


IN THE UNITED STATES COURT OF FEDERAL CLAIMS

(BID PROTEST)

HYPERION, INC., )

)

Plaintiff, )

)

v. ) No. 13-1012

) (Judge Lettow)

THE UNITED STATES, )

)

Defendant. )

DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO PLAINTIFF’S

MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD, AND

CROSS-MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD

Pursuant to Rules 7, 12(b)(1), and 52.1 of the Rules of the United States Court of

Federal Claims (RCFC), as well as the Court’s December 30, 2013 scheduling order,

defendant, the United States, respectfully submits this combined motion to dismiss, cross-

motion for judgment upon the administrative record, and response to the motion filed by

plaintiff, Hyperion, Inc. (Hyperion), for judgment upon the administrative record. See

Dkt. 18-2 (Hyperion MJAR), filed February 5, 2014.

STATEMENT OF THE ISSUES

1. Whether Hyperion’s complaint should be dismissed for lack of standing to

pursue this bid protest, because Hyperion in this

lowest-priced, technically acceptable (LPTA) procurement.

2. Whether the defendant is entitled to judgment upon the administrative

record because the United States Army Contracting Command (agency) acted reasonably

and in accordance with the law when it awarded the contract to Technical

Communications Solutions Corporation (TCSC).


2

STATEMENT OF THE CASE

I. Nature Of The Case

Hyperion brings this bid protest against the agency, challenging its award of an

LPTA contract to provide installation and infrastructure upgrades to fiber optic cable

networks in the Kingdom of Jordan, on behalf of the Jordanian Armed Forces.

II. Statement of Facts

On January 24, 2013, the agency issued Solicitation No. W15P7T-13-R-D002

(RFP or solicitation). Tab 5-1, AR 139, 141. This Foreign Military Sales (FMS)

acquisition has a twelve-month period of performance. Id. at 141. The agency employed

an LPTA source selection process, pursuant to FAR 15.101-2.1 Id. An offeror was only

eligible for award if, following agency evaluation, an offeror’s proposal received an

“Acceptable” rating in each of two non-price factors: technical approach and past

performance. Id. at 210. The LPTA solicitation was anticipated to generate “adequate

competition,” obviating the need for certified cost or pricing data. Id. at 212. The agency

similarly confirmed it would not perform a price realism analysis, but would still evaluate

offerors’ prices for reasonableness. Id.

Four offerors submitted proposals: (1) Hyperion;

and TCSC. See Tabs 6-1 – 9-8. The agency’s

Source Selection Team (SST) conducted its initial evaluation of proposals from May 6,

2013, to June 13, 2013. Tabs 10-1, 10-3.

1 FAR 15.101-2, which was incorporated into the solicitation, does not permit

tradeoffs, but discussions pursuant to FAR 15.306 between the agency and offerors are

permitted. See FAR 15.101-2(b)(2-4). The RFP states that “[t]he solicitation document

and incorporated provision to clauses are those in effect through Federal Acquisition

Circular FAC 2005-55, effective 2 February 2012," Tab 5-1, AR 141. In this brief, the

Government’s citations to the FAR refer to the FAR in effect as of that date.


3

As part of the agency’s past performance evaluation, the solicitation required the

agency to not only “conduct a performance risk assessment . . . of the Offerors [sic] past

performance,” but also assess the performance risk of offerors’ “major subcontractors.”

Tab 5-1, AR 211. The agency reserved the right to “use data provided in the Offerors

[sic] proposal and data obtained from other sources.” Id. at 211, 212. In evaluating the

offerors’ past performance, as described in the solicitation, the SST also assessed the past

performance of offerors’ major subcontractors as follows:

‘Offeror’ referred to the proposed prime contractor and all

proposed major subcontractors. A major subcontractor was

defined as one who would be providing hardware/material

or services considered necessary for successful operation of

the Prime’s proposed system architecture; and/or whose

subcontract is for more than 20% of the total proposed

price. The prime contractor and proposed major

subcontractors were assessed individually and the results

integrated to derive the Offeror’s Past Performance rating.

Tab 10-1, AR 1089.

The past performance of was determined to be See

generally Tab 10-1. The agency also evaluated the technical portions of offerors’

proposals to assess their understanding of the requirements and the soundness of their

approach. Tab 5-1, AR 211. The SST initially determined that

See generally Tab 10-3.

Consequently, after establishing the competitive range, which included

, the agency conducted discussions from July 24 to July 31,

2013. See Tab 15; see also Tabs 17-1 – 20-5. The agency issued Evaluation Notices and

requested revised submissions . Id. On August 26, 2013, and following

these discussions, the agency


4

invited to submit final proposal revisions for

technical approach, past performance, and price. See Tabs 23-1, 24-2, 25-1, 26-1. Final

proposal revisions were received by September 3, 2013. See

generally tabs 23-1 – 26-6. The agency completed an interim technical evaluation on

October 16, 2013, and concluded that, after discussions and revisions,

Tab 22. The agency completed its final evaluations in

November 2013, with the following results:

Offeror Identifier Technical Past Performance Proposed Price

Tabs 10-4, 30.

Because

, the agency determined that award of the LPTA contract should be made to

TCSC, . Tab 30, AR 2149. The agency issued a single award to

TCSC on December 16, 2013. Tab 33-1. The agency determined TCSC’s price —

— was fair and

reasonable. Tab 21-5, AR 1687. The agency conducted post-award debriefings with all

offerors on December 20, 2013, and Hyperion filed this protest on December 23, 2013.

SUMMARY OF THE ARGUMENT

In its motion for judgment upon the administrative record, Hyperion challenges

the agency’s evaluation of the awardees’ proposals. Yet as a primary matter, Hyperion is

and, as such, lacks standing to challenge the

agency’s decision to award the contract to TCSC,


5

. Hyperion has similarly failed to

establish the prejudice necessary to confer standing in this protest.

Hyperion’s brief raises various claims that allegedly disqualify not only the

awardee, but also . These arguments lack

merit. Hyperion relies on FAR clauses not in the solicitation and proceeds as if FAR

clauses contain certain terms of art that they do not. Hyperion relies upon FAR 52.219-

14, which concerns matters of contract administration and, therefore, is outside the

jurisdiction of the Court to entertain in this protest. Hyperion’s price realism challenges

are similarly not relevant, because the agency was not required under the solicitation to

conduct a price realism analysis. In sum, Hyperion’s arguments lack merit, and it

remains . As a result, Hyperion lacks

standing to pursue this bid protest.

Alternatively, the Court should grant the Government’s cross-motion for

judgment upon the administrative record and deny Hyperion’s motion, because the

agency’s contract award was reasonable and in accordance with law. Hyperion has not

shown that the awardee, TCSC, failed to .

Hyperion’s claim that FAR 9.104-2 establishes is also

erroneous, because FAR 9.104-2 does not apply to this solicitation, and any argument

that the agency erred in failing to incorporate FAR 9.104-2 into the solicitation has been

waived pursuant to Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed.

Cir. 2007). Hyperion’s claim that the awardee lacks

merit because not only does this provision concern contract administration matters

outside the Court’s jurisdiction, as noted above, but also


6

. Moreover, Hyperion’s claim that the agency erred in

not conducting a price realism analysis lacks merit and has been waived pursuant to Blue

& Gold. Hyperion has also failed to establish that it was prejudiced by the agency’s

award of the contract to TCSC, because it cannot show that there was a substantial

chance it would have received the contract award but for alleged procurement errors.

Finally, Hyperion has not established that it is entitled to a permanent injunction

because it has failed to establish standing in this protest and has not shown that the

agency’s award of the contract was arbitrary, capricious, or contrary to law. Moreover,

Hyperion has not met its heavy burden of establishing entitlement to a permanent

injunction because it has not addressed irreparable harm, the balance of harms, or public

interest in its brief.

ARGUMENT

I. Hyperion’s Protest Should Be Dismissed For Lack Of Jurisdiction Because It

Does Not Have Standing To Bring This Protest__________________________

The complaint should be dismissed because Hyperion lacks standing to bring this

protest. Because Hyperion was , Hyperion cannot

show the direct economic interest necessary to establish standing in this case.

A. Legal Standard

This Court possesses jurisdiction “to render judgment on an action by an

interested party objecting . . . to a proposed award or the award of a contract[.]” 28

U.S.C. § 1491(b)(1). An interested party is an “actual or prospective bidder or offeror

whose direct economic interest would be affected by the award of the contract or by


7

failure to award the contract[.]”2 31 U.S.C. § 3551; Rex Serv. Corp. v. United States, 448

F.3d 1305, 1307 (Fed. Cir. 2006). This test “imposes more stringent standing

requirements than Article III[,]” and standing to bring a bid protest in this Court should

not be confused with the more liberal standing requirement observed under the

Administrative Procedures Act (APA). Weeks Marine, Inc. v. United States, 575 F.3d

1352, 1359 (Fed. Cir. 2009) (citing Am. Fed’n of Gov. Employees v. United States, 258

F.3d 1294, 1302 (Fed. Cir. 2001)); see also Myers Investigative & Sec. Servs., Inc. v.

United States, 275 F.3d 1366, 1370 (Fed. Cir. 2002) (noting 28 U.S.C. § 1491(b)(1) “did

not adopt the APA’s liberal standing standards”).

The protestor bears the burden of demonstrating that it possesses standing to

pursue its bid protest, and it may satisfy that burden by “show[ing] that it was prejudiced

by a significant error in the procurement process.” Labatt Food Serv., Inc. v. United

States, 577 F.3d 1375, 1378 (Fed. Cir. 2009) (citation omitted). A protestor demonstrates

prejudice by showing “but for the error, it would have had a substantial chance of

securing the contract.” Id. In a post-award protest, the protestor must demonstrate that

correction of the alleged procurement errors would put the protestor in a position to

actually receive the award. See United States v. IBM Corp., 892 F.2d 1006, 1010-12

(Fed. Cir. 1989) (“[O]nly the second-lowest bidder has a direct economic interest in the

award of the contract.”).

Moreover, this Court has explained that the prejudice inquiry relating to standing,

“allegational prejudice,” requires a “plaintiff [to] show that it would have had a

2 Hyperion erroneously asserts that the applicable legal precedent for standing in

this case is whether the protester “has suffered a non-trivial competitive injury.”

Hyperion MJAR at 25. That standard only applies to pre-award protests, not post-award

protests. See Weeks Marine, 575 F.3d at 1359.


8

substantial chance of being awarded the contract but for the combined impact of all

agency decisions alleged to be unlawful.” Linc Gov’t Servs., LLC v. United States, 96

Fed. Cl. 672, 696 (2010); see also id. at 693-97 (fully explaining the evolution of the

“three-step” prejudice analysis required in bid protests, and compartmentalizing standing

prejudice (for purposes of determining jurisdiction), merits prejudice (for purposes of

determining liability), and APA prejudice (for purposes of determining entitlement to

relief)). “[B]ecause the question of prejudice goes directly to the question of standing,

the prejudice issue must be reached before addressing the merits.” Labatt, 577 F.3d at

1378 (citing Info. Tech. & Applications Corp. v United States, 316 F.3d 1312, 1319 (Fed.

Cir. 2003)); Myers, 275 F.3d at 1370 (noting prejudice is a “necessary element of

standing”).

B. Hyperion Lacks Standing Because It Is ,

And It Cannot Show It Was Prejudiced By A Significant Error In

The Procurement Process______________________________________

The agency awarded the contract at issue by employing an LPTA source selection

process. See Tab 30, AR 2147. Four offerors submitted proposals that were determined

to be in terms of the two non-price factors: technical approach and past

performance. Accordingly, the agency awarded the contract to

TCSC:

Offeror Technical Past Performance Proposed Price

Id. at 2149. Hyperion’s proposal offered

— nearly $ than the awardee’s proposal.


9

Hyperion must be next-in-line for award if it is to show it had a substantial chance

of receiving the contract such that it has standing to bring this protest. See COMINT Sys.

Corp. v. United States, 700 F.3d 1377, 1384 (Fed. Cir. 2012) (affirming trial court’s

finding that protestor could not show a substantial chance of being awarded the contract,

because not only did it fail to show a particular marginal rating was legally erroneous, but

even if it could, it was not next-in-line to receive the contract award).

There is no dispute that Hyperion was . See Tab 35-

16, AR 2297 (indicating that Hyperion’s price was the ). The agency

reached this conclusion in accordance with the solicitation’s evaluation criteria, which

state explicitly that an offeror is eligible for award if its proposal is deemed “Acceptable”

on both the technical factor and the past performance factor. See Tab 30, AR 2147.

Although Hyperion was rated , it still

offered . Accordingly, if Hyperion were to be awarded the

relief that it seeks, and the Court were to set aside the contract award to TCSC, the

agency would make an award to , whose price was $

proposal and $ the protestor’s proposal.

Thus, even accepting as true the allegation that TCSC is

, Hyperion lacks standing to participate in this protest because it did not

. IBM Corp., 892 F.2d at 1011.

Thus, we respectfully request that the Court dismiss this protest for lack of jurisdiction.

In addition, for the same reasons, Hyperion cannot show that it was prejudiced by

a significant error in the procurement process. See Jacobs Tech. Inc. v. United States,

100 Fed. Cl. 186, 190 (2011) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1351


10

(Fed. Cir. 2005); Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1368 (Fed.

Cir. 1999); Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996)). As

discussed in the previous section, such prejudice is shown by establishing “that there was

a substantial chance it would have received the contract award but for th[e] error.” Alfa

Laval, 175 F.3d at 1367 (internal quotation marks omitted); see also IBM, 892 F.2d at

1010-12. Hyperion cannot show that there was a substantial chance it would have

received the contract award, because it was not next-in-line for the award. Thus,

Hyperion has failed to establish the prejudice necessary to confer standing to bring this

protest. See Labatt, 577 F.3d at 1378 (noting that “because the question of prejudice goes

directly to the question of standing, the prejudice issue must be reached before addressing

the merits.”) (internal quotation marks and citation omitted).

C. Hyperion’s Attempts To Establish Standing By Arguing That The

Proposals Of

Contained Deficiencies Such That The Agency Should Have Found

Them Unacceptable Rest On Erroneous Grounds_________________

Hyperion can only establish the direct economic interest necessary to establish

standing if it can show that the proposals of the offerors

contained deficiencies such that their

technical approach or past performance should have been deemed unacceptable. For the

reasons discussed below, Hyperion has failed to make this showing.

i. Hyperion's Claim That

FAR 52.219-14 Is Misplaced, Because

That Provision Concerns Contract Administration And

Is Not A Legitimate Basis For Protest________________

Hyperion suggests that

fail to comply with FAR 52.219-14, “Limitations On


11

Subcontracting (NOV 2011),” which is incorporated by reference into the solicitation.

Hyperion MJAR at 14-15; see also Tab 5-1, AR 177. Hyperion argues that FAR 52.219-

14 imposes an affirmative, self-performance requirement that must be presented by each

offeror in its proposal, as a necessary part of the Government’s evaluation of proposals.

Yet Hyperion fails to explain that this FAR clause concerns matters of contract

administration and is not relevant to the agency’s determination of the acceptability of a

particular proposal’s past performance or technical approach in this procurement. See

Hyperion MJAR at 7, 14-15.

Hyperion acknowledges that FAR 52.219-14 states that “the Offeror/Contractor

agrees that in performance of the contract . . . [a]t least 50 percent of the cost of contract

performance incurred for personnel shall be expended for employees of the concern.3

Hyperion MJAR at 7 (citing FAR 52.219-14(c)(1)) (emphasis added). FAR 52.219-14 is

included in the clauses of this solicitation with which an offeror must comply once it is

awarded the contract:

The Contractor shall comply with the FAR clauses in th[e]

paragraph (b) that the contracting officer has indicated as

being incorporated in this contract by reference to

implement provisions of law or Executive orders applicable

to acquisitions of commercial items: . . . 52.219-14,

Limitations on Subcontracting (Nov 2011) (15 U.S.C.

637(a)(14)).

Tab 5-1, AR 176-177 (emphasis added).

The compliance of an awardee with FAR 52.219-14 is a matter of contract

administration, which is not the proper subject of a suit brought under this Court’s bid

3 The Government does not argue that the applicable sub-clause covers anything

other than services, which is the highest requirement for percentage of self-performance

work by the contractor. See FAR 52.219-14(c)(1).


12

protest jurisdiction, pursuant to 28 U.S.C. § 1491(b). Rather, “[t]he Federal Circuit has

made it crystal clear that the CDA [Contract Disputes Act] is the ‘exclusive mechanism’

for the resolution of disputes arising . . . in contract management.” Gov’t Technical

Servs. LLC v. United States, 90 Fed. Cl. 522, 527 (2009) (citing Dalton v. Sherwood Van

Lines, Inc., 50 F.3d 1014, 1017 (Fed. Cir. 1995)). Essentially, Hyperion is suggesting

that not satisfy the percentage requirements provided in

FAR 52.219-14, assuming was awarded the contract. A claim that an

awardee will not , is a contract

administration issue, not a protest issue. See Frazier v. United States, 79 Fed. Cl. 148,

160 (2007) (“[T]he court is persuaded that pure contract claims are not appropriate in a

bid protest, even if clothed in the guise of a protest of an alleged[ly] statutory violation

occurring in relation to a procurement.”) (citation omitted).

do not provide any indication

do not intend to comply with FAR 52.219-14, should they be awarded the

contract and begin performance.

, and the

solicitation does not require them to provide that information.

Hyperion’s reliance upon Blount, Inc. v. United States, 22 Cl. Ct. 221 (1990), is

misplaced. In that case, Blount submitted a questionnaire with its bid stating that it

would self perform a percentage of the total amount of work under the contract lower

than that required by the Invitation For Bids (IFB) at issue. See id. at 228. Thus, the

Court found that “Blount took affirmative exception to a material provision of the IFB”

that “constituted a material deviation from the IFB which rendered its bid nonresponsive


13

. . . .” Id. In our case,

. Rather, the agency properly

, which

concerns matters of contract administration.

Hyperion’s reliance upon Centech Grp., Inc. v. United States, 79 Fed. Cl. 562

(2007), aff’d 554 F.3d 1029 (Fed. Cir. 2009), is distinguishable for the same reasons.

This Court found reasonable the agency’s decision to take corrective action in light of the

determination by the Government Accountability Office that the awardee’s proposal was

unacceptable, because it failed to comply with FAR 52.219-14, which was included in the

solicitation. See Centech, 79 Fed. Cl. at 564. The Court reasoned that the solicitation

required offerors to “agree to perform at least 50 percent of the cost of personnel with its

own personnel,” and that “[i]t is undisputed that Centech’s proposal, on its face, did not

do that” and, consequently, failed to comply with a material term of the solicitation. Id.

at 575-76. The Federal Circuit similarly noted on appeal that “a proposal that, on its face,

leads ‘an agency to the conclusion that an offeror could not and would not comply with

the subcontracting limitation’ is technically unacceptable and ‘may not form the basis for

an award.’” Centech, 554 F.3d at 1038 (quoting Chapman Law Firm v. United States, 63

Fed. Cl. 519, 527 (2005)). Because Centech represented that it would not comply, the

Government was on notice it could not ignore the contradiction between the solicitation

and Centech’s proposal. In our case,

.


14

In essence, Hyperion is protesting

relating to contract administration.

Because Hyperion’s argument concerns matters of contract administration, it must be

rejected.4

ii. Hyperion's Claim That

Is

Irrelevant And Misguided

Hyperion argues that the price proposals

Hyperion MJAR at 18.

This claim is erroneous because not only does it improperly equate price realism analysis,

which is not relevant to the solicitation, with the obligation on the agency in this

procurement to evaluate proposals for price reasonableness, but also it makes an

incorrect assumption that the offerors themselves were required to provide a price realism

analysis. Neither argument is correct.

4 Hyperion’s argument that Defense Base Act insurance premiums are a

requirement under the limitations on subcontracting, FAR 52.219-14, is a non-sequitur.

See Hyperion MJAR at 17, 30. The Defense Base Act, 42 U.S.C. § 1651, requires

contractors to purchase a form of worker’s compensation insurance for their overseas

workers; in turn, compensation for injuries suffered by those workers is subject to the

limitations of the Defense Base Act. See Fisher v. Haliburton, 667 F.3d 602, 609 (5th

Cir. 2012). Hyperion implies that because companies employing Americans abroad

would be required to purchase Defense Base Act insurance, those company’s costs would

necessarily be higher than those of local foreign companies hiring local foreign workers.

See Hyperion MJAR at 17, 30. This assumption is incorrect. Foreign subcontractors are

not exempt from the requirement to purchase Defense Base Act insurance on public

works contracts with the U.S. Government. 42 U.S.C. § 1651. Pursuant to FAR 52.228-

3, incorporated by reference into the solicitation, (see Tab 5-1, AR 176), the Defense

Base Act insurance obligation applies not only to prime contractors, but also

subcontractors in public works programs, consistent with 42 U.S.C. § 1651(a)(3).

Because Hyperion’s argument relies upon a fundamental misunderstanding of the statute,

it should be rejected.


15

Hyperion correctly notes that FAR 15.404-3(b) imposes an obligation on offerors

to “establish the reasonableness of proposed subcontract prices.” Hyperion MJAR at 18

(emphasis added). Moreover, Hyperion’s brief correctly recognizes that there are

distinctions between a price reasonableness analysis and a price realism analysis. See id.

at 4. Nevertheless, Hyperion asserts that

. See Hyperion MJAR at 18; see

also id. at 32 (stating that

Hyperion’s argument is a non-starter because the solicitation does not create any

affirmative obligation for the agency to conduct a price realism analysis, nor does it

create any obligation for the agency to consider price realism analyses performed in the

offerors’ proposals. This Court has recognized that “an agency may, at its discretion,

provide for the use of a price realism analysis to measure an offeror’s understanding of

the solicitation requirements . . . .” Ceres Envtl. Servs., Inc. v. United States, 97 Fed. Cl.

277, 303 (2011); see also CRAssociates, Inc. v. United States, 95 Fed. Cl. 357, 379

(2010) (noting price realism analysis is generally a matter committed to the agency's

discretion); Labat-Anderson Inc. v. United States, 50 Fed. Cl. 99, 106 (2001) (“[T]he

nature and extent of an agency's price realism analysis are matters within the agency's

discretion.”). Here, the agency, in its discretion, chose not to undertake a price realism

analysis. Rather, the solicitation made clear that “offeror proposed prices will ONLY be

evaluated for price reasonableness in accordance with FAR 15.404-1(b) as determined by


16

the Contracting Officer” and that “[c]ost analysis, cost realism analysis, and/or price

realism analysis will NOT be performed on offerors proposals.” Tab 5-1, AR 212.

Likewise, the solicitation does not contain any requirements for offerors to include a

price realism analysis in their proposals. Hyperion’s attempt to equate a price

reasonableness analysis, as required under the solicitation’s terms, with a price realism

analysis is erroneous and improper.

The discretion afforded to agencies to decide whether to conduct a price realism

analysis is particularly appropriate in this solicitation, which involves a firm-fixed-price

contract for trenching and laying cable. This Court has recognized that firm-fixed-price

contracts mitigate the Government’s risk, because offerors under such contracts not only

bear the risk of higher prices, but also are free to enter into losing contracts and may have

certain business reasons for doing so. Mil-Mar Century Corp. v. United States, 111 Fed.

Cl. 508, 546 (2013) (Ceres, 97 Fed. Cl. at 308); see also Masai Technologies. Corp. v.

United States, 79 Fed. Cl. 433, 436 n.7 (2007) (noting that the agency “would perform a

price reasonableness of evaluation, in lieu of a price realism evaluation, consistent with

the evaluation of firm fixed-price-offers.”).

In sum, Hyperion’s argument must be rejected because the agency properly

exercised its discretion in requiring a price reasonableness analysis, not a price realism

analysis, and no offeror can be deemed non-responsive for not including a price realism

analysis. Hyperion’s arguments in no way show that the agency could not consider


Failed

To Conform With A Formal Solicitation Question-And-

Answer Because Of Stated Assumptions In Their

Proposals Is Meritless_____________________________

Hyperion’s only other basis for suggesting that

concerns a published question and answer in the solicitation, regarding terrain and

site conditions that may affect pricing:

Question: Reference Tables 1 and 2 of the SRD [System

Requirements Document] lack detailed information

regarding the terrain. Will the Government allow price

adjustments after Contract award based on actual site

conditions such as those requiring asphalt cuts, concrete

cuts, the need for concrete encasements for Wadi crossings,

etc.? If not, since there was no mandatory site visit and no

description of the exact terrain involved, on what basis will

the Government conduct this Acquisition such that Offeror

pricing is formulated on a common understanding of the

tasks required?

Response: No. The decision to submit a proposal is a

business decision. This effort is being solicited on a Firm-

Fixed-Price Completion Basis only. It is the Offerors’

responsibility to do the appropriate research using available

information resources, assessing risks and proposing

accordingly.

Tab 5-1, AR 145. In attempting to show standing, by necessity, Hyperion argues that

neither is responsive because

. Hyperion MJAR at

21-22, 26-27. As explained below, Hyperion’s arguments are not supported by the

record.

Hyperion argues that

,


18

” Hyperion MJAR at

21 (quotation marks omitted). Hyperion’s argument lacks merit because it fails to

acknowledge that,

On July 24, 2013, the contracting officer

. See Tabs 17-1, 17-2.

Tab 17-2, AR 1274 (internal

citations omitted). In response, on July 31, 2013,

Tab 17-6, AR 1283-4.

. On September 3, 2013,

. Tab 23-4, AR 1695. Hyperion’s argument,


19

which rests entirely on

is therefore moot.5

Hyperion similarly argues that

. See Hyperion MJAR

at 22. Hyperion argues that the following paragraph from

:

.

Id. (citing Tab 24-5, AR 1728) (emphasis added). Hyperion relies on the portion of

.

Hyperion fails to note that

.” Tab 24-5,

5 In paragraph 28 of its proposed statement of facts (see Dkt. 18-1), Hyperion

cites not to (e.g., Tab 23-5, AR

1697-1698). This price proposal, September 3, 2013

(see Tab 23-4), . Any

.

. See id. On the basis of

the technical evaluation team found that

” Tab 28-1,

AR 2113.


20

AR 1728. By stating such,

. Any error in would be the

responsibility of , which would not affect

.

. Id. Thus, contrary to

Hyperion’s assertion,

.

Hyperion cannot establish that it is an interested party such that it has standing in this

protest.

For all of these reasons and those discussed in the prior two sections of this brief,

Hyperion has failed to show that the proposals offered by

contained deficiencies rendering as to technical approach or past

performance, such that the agency should have excluded from consideration.

Absent such a showing, Hyperion cannot establish the direct economic interest necessary

to confer standing, because it remains in this LPTA

procurement.

II. Alternatively, The Court Should Enter Judgment Upon The Administrative

Record In Favor Of The Government, Because The Agency’s Contract

Award Was Reasonable And In Accordance With Established Law ________

The Court should dismiss Hyperion’s protest for lack of standing. Alternatively,

the Court should deny Hyperion’s motion and grant the Government’s cross-motion for

judgment upon the administrative record, because Hyperion has failed to show that the

agency’s award of the contract to TCSC is arbitrary, capricious, or contrary to law.


21

A. Legal Standard

“In reviewing an agency’s procurement decision under RCFC 52.1, the court’s

role is limited.” Eskridge Research Corp. v. United States, 92 Fed. Cl. 88, 97 (2010).

The standard of review for a motion for judgment upon the administrative record,

pursuant to RCFC 52.1, is similar, but not identical to, a motion for summary judgment

under RCFC 56. Bannum, 404 F.3d at 1355. A motion for summary judgment considers

whether the moving party has proved its case as a matter of fact and law, or alternatively,

whether a genuine issue of material fact precludes judgment. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247-48 (1986). By contrast, the Court’s inquiry under Rule 52.1 is

narrower: i.e., given all of the disputed and undisputed facts in the administrative record,

whether the plaintiff has met the burden of proof to show that an agency’s decision was

arbitrary or capricious, or was otherwise not in accordance with law. See Bannum, 404

F.3d at 1357.

In a bid protest, this Court will only set aside an agency procurement decision

where, after reviewing the administrative record, it assesses 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) (cited in 28 U.S.C. § 1491(b)(4)). Application of the

arbitrary and capricious standard involves neither judicial fact finding nor review of the

agency’s factual statements for “substantial evidence.” Advanced Data Concepts, Inc. v.

United States, 216 F.3d 1054, 1057 (Fed. Cir. 2000) (citing Camp v. Pitts, 411 U.S. 138,

142 (1973)). Pursuant to this standard, an agency’s procurement decisions are entitled to

a “presumption of regularity,” and “the agency’s action must be upheld as long as a

rational basis is articulated and relevant factors are considered.” Emery Worldwide


22

Airlines, Inc. v. United States, 264 F.3d 1071, 1085 (Fed. Cir. 2001) (citations omitted).

Thus, pursuant to this standard, an award may be set aside “if either: (1) the procurement

official’s decision lacked a rational basis; or (2) the procurement procedure involved a

violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi v.

United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001) (citations omitted).

In reviewing a challenge brought under the first ground, the Court “determine[s]

whether the contracting agency provided a coherent and reasonable explanation of its

exercise of discretion, and the disappointed bidder bears a heavy burden of showing that

the award decision had no rational basis.” Centech, 554 F.3d at 1037 (internal quotation

marks and citation omitted).

For a challenge brought under the second ground, “the disappointed bidder must

show a clear and prejudicial violation of applicable statutes or regulations.” (internal

quotation marks and citation omitted) Id.; see also Data Gen. Corp., 78 F.3d at 1562

(“[T]o prevail in a protest the protester must show not only a significant error in the

procurement process, but also that the error prejudiced it.”) (citation omitted). Showing

prejudice under this second ground requires the protestor to show that “there was a

‘substantial chance’ it would have received the contract award absent the alleged error.”

Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004)

(citing Emery, 264 F.3d at 1086); accord Bannum, 404 F.3d at 1353; Labatt, 577 F.3d at

1378.

In a post-award protest, the protestor’s burden is even heavier in that it must

demonstrate that correction of the alleged procurement errors would put the protestor in a

position to actually receive the award. See IBM, 892 F.2d at 1010-12 that is. Even if the


prejudice by showing that “it would have had a substantial chance of being awarded the

contract but for the combined impact of any agency decisions adjudged to be unlawful.”

Linc, 96 Fed. Cl. at 696 (citation omitted); see also id. at 693-97 (distinguishing standing

prejudice (to determine jurisdiction), merits prejudice (to determine liability), and APA

prejudice (to determine entitlement to relief)).

B. Hyperion’s Claims That

Lack Merit______

Hyperion claims that

. Hyperion

MJAR at 12. Hyperion alleges that the solicitation required a prime contractor to have

certain experience and that the agency should have

. See id. These arguments are without merit for the reasons discussed below.

i. Hyperion's Errs in Relying Upon FAR 9.104-2 As

Establishing The Responsibility Criteria That Apply To

This Protest, Because FAR 9.104-2 Does Not Apply To

This Solicitation__________________________________

Hyperion relies on definitive responsibility criteria allegedly found in FAR 9.104-

2(a), Special Standards. See Hyperion MJAR at 5. Hyperion’s brief refers to

“[d]efinitive Responsibility criteria that must be met by all Offerors . . .” and segues

immediately into a reference to FAR 9.104-2(a); in effect, Hyperion is trying to argue

that FAR 9.104-2 is incorporated into the solicitation and establishes responsibility

criteria applicable to this procurement. Id. Hyperion’s argument is flawed because FAR

9.104-2 is not incorporated into the solicitation.


24

If Hyperion wished to challenge the agency’s failure to incorporate FAR 9.104-2

into the solicitation, it needed to raise that argument prior to submitting an offer. By

failing to do so, Hyperion has waived this challenge pursuant to Blue & Gold. “[A] party

who has the opportunity to object to the terms of a government solicitation containing a

patent error and fails to do so prior to the close of the bidding process waives its ability to

raise the same objection subsequently in a bid protest action in the Court of Federal

Claims.” Blue & Gold Fleet, 492 F.3d at 1313. Waiver prevents the situation in which

an offeror who has an objection to the agency’s proposed procuring method withholds the

objection until after it has lost the competition. See id. As the Federal Circuit explained

in Blue & Gold, this prevents an offeror from taking advantage of the other actors in the

procurement as well as costly after-the-fact litigation:

In the absence of a waiver rule, a contractor with

knowledge of a solicitation defect could choose to stay

silent when submitting its first proposal. If its first

proposal loses to another bidder, the contractor could then

come forward with the defect to restart the bidding process,

perhaps with increased knowledge of its competitors. A

waiver rule thus prevents contractors from taking

advantage of the government and other bidders, and avoids

costly after-the-fact litigation.

Id. at 1314. In this case, Hyperion had the opportunity to object to the exclusion of FAR

9.104-2 in the solicitation prior to the submission of its proposal but failed to do so,

thereby waiving its challenge.

Even if Hyperion did not waive this argument, there is no merit to Hyperion’s

implicit claim that FAR 9.104-2(a) was required to be included in the solicitation. FAR

9.104-2(a) grants great discretion to the Contracting Officer as to whether or not to

establish a special, higher standard of responsibility: “When it is necessary for a


25

particular acquisition or class of acquisitions, the contracting officer shall develop, with

the assistance of appropriate specialists, special standards of responsibility.” FAR 9.104-

2(a). The clause provides further guidance as to when this might be beneficial: “Special

standards may be particularly desirable when experience has demonstrated that unusual

expertise or specialized facilities are needed for adequate contract performance.” Id.

Moreover, the clause requires that “special standards shall be set forth in the solicitation

(and so identified) and shall apply to all offerors.” Id. The agency properly exercised its

discretion in not incorporating FAR 9.104-2 into the solicitation, especially considering

that this is an LPTA, commercial item acquisition, for trenching and installation of fiber

optic cable. See Tab 35-17, AR 2300.

As a result, Hyperion’s argument with respect to FAR 9.104-2 has not only been

waived under Blue & Gold, but also is not relevant because it has no bearing on the

performance required under the solicitation. Thus, it lends no support to Hyperion’s

claim that the agency’s award of the contract to TCSC was not rational.

ii. Hyperion’s Claim That

Is Without Merit And Is Not

Supported By The Solicitation’s Terms

Hyperion argues that it was improper for the agency to evaluate

. See Hyperion MJAR at 12 (arguing that

(emphasis omitted); see also id. at 13-

14 (claiming


.S.

26

); id. at 33 (claiming “

.”).

In support of its argument, Hyperion notes in its brief that the solicitation states:

“[t]he prime offeror must demonstrate that it has current or recent (within 3 years)

experience working in the Middle East or developing nations, and that projects were

completed successfully.” Hyperion MJAR at 6; see also Tab 5-1, AR 211. Yet Hyperion

fails to note that in the same section addressing Past Performance, the solicitation states:

A major subcontractor is defined as one who will be

providing critical hardware/material or services and/or

whose subcontract is for more than 20% of the total

proposed price. In either case, the prime contractor and

proposed major subcontractors will be assessed

individually and the results will then be assessed in their

totality to derive the Offerors Past Performance rating.

Tab 5-1, AR 211. Thus, the language of the solicitation, on its face, states that an

offeror’s performance will be evaluated by the agency based on the totality of the prime

contractor’s and any major subcontractor’s contributions: “The Past Performance

evaluation will assess the relative risks associated with an Offerors likelihood of success

in performing the solicitation's requirements as indicated by that Offerors record of past

performance for a period of three (3) years prior to the release of this solicitation. In this

context, ‘Offeror’ refers to the proposed prime contractor and all proposed major

subcontractors.” Tab 5-1, AR 211.

Moreover, the solicitation defines acceptable performance, under the header “Past

Performance Evaluation Rating,” as follows:

Acceptable - Based on the offeror's performance record, the

Government has a reasonable expectation that the offeror


27

will successfully perform the required effort, or the

offeror's performance record is unknown. In the context of

acceptability/unacceptability, offerors determined to have

unknown past performance shall be considered acceptable.

Tab 5-1, AR 210 (emphasis added). Hyperion complains that “

.” Hyperion MJAR at 12. However, in

evaluating past performance, the agency reasonably found

:

Tab 28-5, AR 2129; see also Tab 37-1. This agency finding

is rational and in accordance with the terms of the solicitation. Hyperion itself

acknowledges that, pursuant to statute, the agency is authorized to accept

Hyperion MJAR at 5. Still, Hyperion attempts to

divorce the agency’s past performance evaluation from the context of the solicitation’s

terms and, instead, impose the heightened responsibility standards of FAR 9.104-2(a) —

which are not incorporated in the solicitation. Hyperion's efforts to change the actual

evaluation criteria of the solicitation are misleading and without merit.6

6 Hyperion also argues that the agency

. See Hyperion MJAR at 13. This argument is meritless

because the agency clearly stated that, in evaluating past performance and “in conducting


28

In essence, as with FAR 9.104-2, Hyperion’s argument that

is

predicated on a challenge to the solicitation’s terms. Hyperion is arguing that the

solicitation erred in stating that the contributions of the prime contractor and the

subcontractor will be “assessed in their totality,” see Tab 5-1, AR 211, and that, instead,

the solicitation should have

. If Hyperion thought the language

of the solicitation was ambiguous, it was free, and nay required to, submit a question for

clarification. See Tab 5-1, AR 141-149 (questions posed by potential offerors requesting

clarification prior to the closing of bids, and answers to those questions, are incorporated

into the solicitation). Because Hyperion failed to raise this argument prior to submitting

its offer, it has waived that argument. Blue & Gold, 492 F.3d at 1313.

In sum, Hyperion not only waived its argument, pursuant to Blue & Gold, that

s, but also Hyperion’s

interpretation of the solicitation’s requirements is flatly contradicted by the solicitation.

See Tab 5-1, AR 211. Hyperion’s argument lacks merit and in no way shows that the

agency’s award of the contract was arbitrary, capricious, or contrary to law.

the performance risk assessment, the Government may use data provided in the Offerors

proposal and data obtained from other sources, including the Federal Past Performance

Information Retrieval System - Report Card (PPIRSRC), which includes Contractor

Performance Assessment Reports (CPARs).” Tab 5-1, AR 212 (emphasis added). Thus,

the terms of the solicitation grant the agency wide latitude as to the information it may

consider in evaluating past performance. Because Hyperion’s argument regarding

Hyperion's argument is contradicted by the text of the solicitation and,

consequently, lacks merit.


29

C. Hyperion’s Claim That FAR 52.219-14

Is Misplaced, Because That Provision Concerns Contract

Administration And Is Not A Legitimate Ground For Protest_______

Hyperion claims that FAR 52.219-14 imposes a self-performance minimum

. See Hyperion MJAR at 14, 25. Hyperion’s

argument lacks merit for all the reasons noted in Section I(C)(i) of this brief. As

discussed in that section, FAR 52.219-14 concerns contract administration, which is not

the proper subject of a suit brought under this Court’s bid protest jurisdiction pursuant to

28 U.S.C. § 1491(b); see also Dalton, 50 F.3d at 1017; Gov’t Technical Servs., 90 Fed.

Cl. at 527.

As noted in Section I(C)(i) of this brief,

.

FAR 52.219-14, and the solicitation does not require to

provide that information.

the requirements of FAR 52.219-14 by self-performing,

. In its price proposal,

. See Tab 26-5 ).

.


30

.7

FAR 52.219-14 concerns contract performance.8

Nonetheless, FAR 52.219-14.

This circumstance is distinguishable from Blount because Blount’s proposal “took

affirmative exception to a material provision of the IFB” that “constituted a material

deviation from the IFB which rendered its bid nonresponsive . . . .” 22 Cl. Ct. at 228.

Likewise, in Centech, the named party’s proposal “on its face” failed to comply with the

solicitation’s requirement that offerors “agree to perform at least 50 percent of the cost of

personnel with its own personnel.” 79 Fed. Cl. at 575-76. In our case,

.

7

8 Hyperion appears to suggest that FAR 52.219-14 includes some implicit

requirement regarding the distribution of percentages that is linked to the Independent

Government Cost Estimate (IGCE). See, e.g., Hyperion MJAR at 16. Hyperion cites no

legal support for this claim. The IGCE is merely the Government’s own estimate; it is

not a substitute for the results of free-market competition. In this solicitation, the IGCE

was solely used in conjunction with the Contracting Officer’s evaluation obligations,

pursuant to FAR 15.404-1, Proposal Analysis Techniques. The Contracting Officer may

rely upon several methods, consistent with FAR 15.404-1(b)(2), to determine if there is

fair and reasonable pricing in a commercial items acquisition, including, but not limited

to, adequate price competition, FAR 15.404-1(b)(2)(i), and “[c]omparison of proposed

prices with independent Government cost estimates,” FAR 15.404-1(b)(2)(v). In this

procurement, the contracting officer relied upon not only the IGCE in evaluating fair and

reasonable pricing, but also the adequate price competition among the offerors. See Tab

28-6, AR 2131.


of contract

administration,

Hyperion’s arguments to the

contrary should be rejected.

D. Hyperion’s Claims That The Agency Erred In Not Conducting A

Price Realism Analysis Lack Merit And Have Been Waived_________

Hyperion argues that the agency erred in failing to conduct a price realism

analysis. See Hyperion MJAR at 32. This argument constitutes a challenge to the

solicitation’s terms that Hyperion failed to raise prior to submitting a proposal;

consequently, Hyperion has waived this argument. See Blue & Gold, 492 F.3d at 1313.

Moreover, Hyperion’s argument lacks merit for all the reasons noted in Section

I(C)(ii) of this brief. The solicitation does not create any affirmative obligation for the

agency to conduct a price realism analysis in this firm-fixed-price procurement, nor does

it create any obligation for the agency to consider price realism analyses performed in the

offerors’ proposals. See Ceres, 97 Fed. Cl. at 303. Hyperion improperly equates the

agency’s price reasonableness analysis, as required under the solicitation’s terms, with a

price realism analysis. See Tab 5-1, AR 212 (stating that “[c]ost analysis, cost realism

analysis, and/or price realism analysis will NOT be performed on offerors proposals.”).

Hyperion argues

. See Hyperion MJAR at 18, 20. This argument lacks merit for

the same reasons discussed above, and in Section I(C)(ii) of this brief regarding

The solicitation does not contain any requirements for offerors to


32

. For all of these reasons, Hyperion’s

arguments with respect to price realism must be rejected.

E. Hyperion Has Not, And Cannot, Establish That It Was Prejudiced By

The Agency’s Award Of The Contract To TCSC

Even assuming for argument’s sake that Hyperion has shown that the agency’s

award of the contract to TCSC was arbitrary, capricious, or contrary to law, Hyperion

must demonstrate that it is prejudiced by the agency’s action. See Jacobs Tech., 100 Fed.

Cl. at 190; see also L-3 Commc’ns Corp. v. United States, 99 Fed. Cl. 283, 289 (2011)

(citing USfalcon, Inc. v. United States, 92 Fed. Cl. 436, 450 (2010)) (“[T]he prejudice

determination for purposes of standing assumes all non-frivolous allegations to be true,

whereas the post-merits prejudice determination is based only on those allegations which

have been proven true.”).

Hyperion’s brief only includes a conclusory statement that the agency committed

“prejudicial evaluation errors.” Hyperion MJAR at 26. Hyperion’s brief includes

nothing of substance explaining how it was prejudiced by the contract award, which

should make it difficult, if not impossible, for Hyperion to argue that it has sustained its

burden. Nonetheless, Hyperion cannot establish prejudice because it cannot show that

there was a substantial chance it would have received the contract award but for alleged

procurement errors. Banknote, 365 F.3d at 1351 (citing Emery, 264 F.3d at 1086). Even

if Hyperion has shown that the agency’s award of the contract to TCSC was irrational,

for all the reasons discussed in this brief.

Because Hyperion has failed to establish prejudice, its motion for judgment upon the

administrative record should be denied.


33

III. Hyperion Has Not Established That It Is Entitled To Injunctive Relief

Hyperion seeks “a Permanent Injunction compelling U.S. Army Contracting

Command — Aberden Proving Ground to terminate Contract Number W15P7T-14-C-

0003, the Contract proposed by Solicitation Number W15P7T-13-R-D002 and awarded

to TCSC . . . .” Hyperion MJAR at 35. To obtain permanent injunctive relief, Hyperion

must demonstrate (1) entitlement to relief on the merits; (2) that irreparable harm would

result if an injunction does not issue; (3) that the harm suffered if injunctive relief is not

granted will outweigh the harm to the Government and third parties if the temporary

relief is granted; and (4) that granting the injunction serves the public interest. See

PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (citations

omitted). The grant of an injunction is “extraordinary relief,” and, therefore, the Court

applies “exacting standards.” Lermer Germany GmbH v. Lermer Corp., 94 F.3d 1575,

1577 (Fed. Cir. 1996). The party seeking injunctive relief bears the extremely heavy

burden of demonstrating its entitlement to this extraordinary relief by clear and

convincing evidence. E.g., Cincom Sys., Inc. v. United States, 37 Fed. Cl. 266, 268

(1997).

As we established in this brief, Hyperion fails to demonstrate that it has standing

to bring this protest, or that the agency’s award of the contract was arbitrary, capricious,

or contrary to law. Consequently, Hyperion is not entitled to injunctive relief. Further, to

the extent this Court determines that the agency committed a prejudicial procurement

error, Hyperion has not met its heavy burden of establishing entitlement to a permanent

injunction because it has not addressed irreparable harm, the balance of harms, or public

interest in its brief. See generally Hyperion MJAR.


34

CONCLUSION

For these reasons, defendant respectfully requests that this Court grant

defendant’s motion to dismiss Hyperion’s complaint in its entirety. Alternatively,

defendant respectfully requests that this Court grant defendant’s cross-motion for

judgment upon the administrative record and deny plaintiff’s motion for judgment upon

the administrative record and plaintiff’s requests for declaratory and injunctive relief.

Respectfully submitted,

STUART F. DELERY

Assistant Attorney General

BRYANT G. SNEE

Acting Director

/s Kirk T. Manhardt

KIRK T. MANHARDT

Assistant Director

OF COUNSEL: /s Ryan M. Majerus

RYAN M. MAJERUS

Stephanie Magnell Trial Attorney

Trial Attorney Commercial Litigation Branch

U.S. Army Legal Services Agency U.S. Department of Justice

Contract and Fiscal Law Division Civil Division

9275 Gunston Road P.O. Box 480

Fort Belvoir, VA 22060 Ben Franklin Station

Washington, DC 20044

Tel: (202) 307-0163

Fax: (202) 307-0972

[email protected]

February 20, 2014 Attorneys for Defendant


Documents

DEFENDANT’S MOTION TO DISMISS, OPPOSITION TO · PDF fileNo. 13-1012 (Judge Lettow) (BID PROTEST) IN THE UNITED STATES COURT OF THE FEDERAL CLAIMS HYPERION, INC., Plaintiff, v. THE