The 2023 Arnold & Porter Government Contracts Moot Court Competition

No. 23-1953

Winning Brief of Plaintiff-Appellant, El United Association

In the United States Court of Appeals for the Federal Circuit

El United Association,

Plaintiff-Appellant

v.

United States

Defendant-Appellee

Appeal from the United States Court of Federal Claims
In No. 2022-1986C, Judge Joyce Byers

Brief of Plaintiff-Appellant, El United Association

Charlton Hedden
Joshua Fix

Statement of Related Cases

Pursuant to Fed. Cir. R. 47.5, there are no related cases.

Jurisdictional Statement

The U.S. Court of Federal Claims (COFC) had jurisdiction over this action under the Tucker Act, 28 U.S.C. § 1491(b)(1) as “an action by an interested party objecting to . . . a proposed award or the award of a contract . . . .” This Court has jurisdiction under 28 U.S.C. § 1295(a)(3), because this is “an appeal from a final decision of the United States Court of Federal Claims.”

Statement of the Issues

I. Whether El United waived its right to protest the conduct of the Department of Energy’s corrective action under the Blue & Gold rule.

II. Whether the Agency erred in its corrective action by first allowing Source Selection Authority Mayfield, who conducted discussions with Hopper Systems and not with El United, to remain the SSA and, second, by awarding the contract to Hopper without conducting discussions with El United.

Statement of the Case and Facts

The facts of this case are not meaningfully in dispute. Rather, it is the application of the law to those facts that is at issue. The Agency’s original contract award was flawed because of a biased evaluation team member. The biased team member caused unequal treatment of the offerors. That unequal treatment led the source selection authority (SSA) to hold discussions with only one offeror, the eventual awardee, Hopper Systems. After El United protested the original award at the GAO, the Agency took corrective action. This protest centers on the conduct of that corrective action. In broad terms, the questions before this Court are twofold.

First: The Agency equivocated in the course of its corrective action on whether or not it would hold further discussions prior to award. The Agency ultimately did not hold further discussions prior to award. After the Agency again awarded the contract to the only offeror with which the SSA held discussions, El United again protested the award. Did El United’s forbearance of the pre-award protest waive its right to post-award protest under the Blue & Gold rule?

Second: The Agency conducted discussions with one offeror, Hopper, and only Hopper, in a flawed contract award process. After rescinding that award in a corrective action, the Agency failed to conduct discussions with any other offerors. The same source selection authority that held discussions with Hopper again awarded Hopper the contract. Was the Agency’s action reasonable?

Those questions are the core issues that arise from the following facts. This protest arose from a Department of Energy (Agency) solicitation for environmental cleanup services at the site of the Hawkins National Laboratory. APPX 1, 18. The solicitation was issued on June 4, 2021. APPX 1. It anticipated a single indefinite-delivery, indefinite-quantity contract with a ten-year ordering period and a $600 million ceiling. APPX 18.

The solicitation indicated that the Agency would consider both price and non-price factors. Combined, the non-price factors were significantly more important than price. In descending order of importance, the non-price factors were: (1) technical approach, (2) corporate experience, and (3) management approach. APPX 18. The solicitation indicated that the Agency would award the contract using a best-value tradeoff approach. APPX 18.

The solicitation stated the Agency “may evaluate proposals and make award without conducting discussions,” but reserved the right to conduct discussions if it determined that “discussions are in the best interests of the government.” APPX 18.

The offerors submitted responsive offers to the solicitation prior to the solicitation closing date of September 2, 2021. The offerors were El United, Hopper Systems, Inc., and Vecna Technologies, LLC. APPX 3.

The Agency’s source selection authority (SSA) was Maxine Mayfield. APPX 19. The Agency also used a source evaluation team (SET) to assist SSA Mayfield. The original SET (SET1) included three individuals: Martin Brenner, Alexei Kharkov, and Samuel Owens. APPX 19.

Mr. Brenner failed to disclose that he previously worked as an intern for Hopper Systems and is the brother-in-law of James Hopper, the CEO of Hopper Systems. APPX 3.

SET1 evaluated offerors’ proposals and assigned the following ratings: Significant Strengths, Strengths, Weaknesses, or Significant Weakness for each non-price factor. APPX 19. SET1 would also assign an overall ranking for each non-price factor. In decreasing order of merit, the possible rankings were: Outstanding, Good, Satisfactory, or Unsatisfactory. APPX 19. SET1 presented its rankings to SSA Mayfield for her consideration. APPX 3. SSA Mayfield was the final decision-maker on the award. APPX 19.

In relevant part, SET1 evaluated the proposals as follows:

El United

Technical Approach Satisfactory

Management Approach Good

Corporate Experience Good

Price $212.76 million

Hopper

Technical Approach Good

Management Approach Good

Corporate Experience Good

Price $213.18 million

APPX 20.

SSA Mayfield then established a competitive range limited to only Hopper, excluding El United and Vecna. APPX 21. The Agency notified El United it was excluded from the competitive range on November 1, 2021. APPX 4. El United timely requested a pre-award debriefing, but the Agency declined and instead elected to provide a post-award debriefing at a later date. APPX 4.

SSA Mayfield and SET1 then conducted discussions with Hopper. Based on those discussions, Hopper submitted a revised proposal January 14, 2022. SET1 rated Hopper’s second proposal higher than its first. APPX 20–22. SSA Mayfield then awarded the contract to Hopper on February 10, 2022. APPX 23.

El United received a post-award debriefing in which it learned its own rating from SET1 and that the Agency had established a competitive range of one offeror based on the difference between El United and Hopper’s rating for technical approach. APPX 4, 24.

On February 18, 2022, El United protested the Agency’s source selection at the GAO. El United protested the Agency’s competitive range determination and asserted that its proposal was evaluated unequally compared with Hopper’s proposal. APPX 25. El United also protested that Mr. Brenner’s ties to Hopper biased him in favor of Hopper. APPX 25. El United asserted this bias led to unequal treatment in the evaluations and establishment of the competitive range. APPX25.

On March 10, 2022, the Agency notified the GAO that it intended to take corrective action by reopening the competition, removing SET1 from the source selection process, appointing a completely new SET team (SET2), and reevaluating all three offerors’ original proposals. APPX 25–26. Accordingly, the GAO dismissed El United’s protest as academic. APPX 25.

On March 14, 2022, the Agency emailed all three offerors and notified them of the same corrective action it proposed to the GAO. APPX 26. The email explained that SET2 would evaluate the three offerors’ original proposals. It also stated SSA Mayfield would make a new award decision. APPX 26.

Four days later, El United emailed the Agency asking if offerors would have “the opportunity to revise their proposals” to account for information offerors received during their post-award debriefings. APPX 27. Three days later, the Agency informed all offerors it would not accept new proposals. APPX 27.

After another three days, El United further inquired by email if the Agency would conduct discussions with the offerors. APPX 27. El United noted the Agency already held discussions with Hopper. El United observed that “it would only be fair if [it] received the same treatment [as Hopper].” APPX 27.

The Agency replied by email to the offerors eight days later, on April 1, 2022. APPX 28. The Agency indicated that it would exclude any information gained from its discussions with Hopper from the reevaluation of proposals. The Agency then referred offerors to its original email sent on March 14, for its planned corrective action. APPX 28.

The Agency also referred offerors to the solicitation clause stating: “The Government may evaluate proposals and award contracts without conducting discussions. The Government may conduct discussions if it determines that discussions are in the best interests of the Government.” APPX 28 (quoting APPX 18). Neither the Agency nor offerors communicated further until the Agency’s re-award of the contract to Hopper on June 10, 2022. APPX 6–7.

SET2 evaluated the three offerors’ original proposals. SET2 did not have access to Hopper’s second proposal or the content of the discussions between Hopper, SET1, and SSA Mayfield. APPX 29.

SET2 assigned El United and Hopper the same overall non-price ratings. The only differences between SET2’s ratings of the two proposals’ non-price factors were the strengths and weaknesses of the Technical approach category. SET2’s evaluation of that fact broke down as follows.

El United

Technical Approach: Good

Technical Sub-ratings: --1 Significant Strength

--4 Strengths

--2 Weaknesses

Hopper

Technical Approach: Good

Technical Sub-ratings: --2 Significant Strengths

--4 Strengths

--2 Weaknesses

APPX 29.

Based on the parity of El United’s and Hopper’s proposals, SET2 advised the Agency hold discussions with the offerors to discuss their weaknesses. APPX 29. SSA Mayfield declined. APPX 30. Instead, SSA Mayfield simply concluded Hopper presented the best value to the government and awarded it the contract. APPX30.

As for SET2’s recommendation of discussions, SSA Mayfield summarily concluded:

Because “Technical Approach” is the most important factor, and because Hopper Systems and El United are ranked substantially the same on other factors and price, I conclude that Hopper Systems’ proposal represents the best value to the government and further discussions with the offerors is not needed.

APPX 30.

SSA Mayfield awarded Hopper the contract on June 10, 2022. APPX 7. The Agency debriefed El United four days later. APPX 7. El United filed its protest with the COFC on June 29, 2022. APPX 7.

The government moved to dismiss El United’s claim as waived under the Blue & Gold rule, and the COFC granted the government’s motion in the decision that El United now appeals to this Court. APPX 7, 17.

Summary of the Argument

In this case, the Agency conducted a flawed procurement process and held discussions with one of three offerors, Hopper. The Agency then awarded Hopper the contract. When El United protested the Agency’s flawed process, the Agency took corrective action by reevaluating the three offerors’ original proposals. It conducted no further discussions.

The Agency again awarded the contract to Hopper, which remained the only offeror with which the Agency held discussions. The same source selection authority, SSA Mayfield, presided over both awards and the discussions with Hopper.

El United was aware the government intended for SSA Mayfield to remain on the procurement during the corrective action. El United did not know, however, whether the Agency would hold discussions with it because the Agency equivocated when El United asked about further discussions.

El United did not waive its grounds for protest because the error in the Agency’s corrective action was latent, not patent. The error at issue is unequal treatment of the offerors.

The seed for the current error was planted when SSA Mayfield originally held discussions with only Hopper and awarded the contract to Hopper in a flawed process. That seed did not ripen into the full bloom of error until SSA Mayfield again awarded the contract to Hopper without conducting discussions with El Untied.

El United did not know that SSA Mayfield would fail to hold further discussions until SSA Mayfield awarded the contract to Hopper the second time. At all times prior to the award, the Agency equivocated on whether or not it would hold discussions. This “maybe yes, maybe no,” position made the resulting error latent because the Agency reserved the right to take action that would prevent the potential error any time prior to award.

The Blue & Gold rule applies to patent errors not latent errors. Therefore, even if the Blue & Gold rule otherwise applied to the Agency’s corrective action in this case, it would not apply to the error El United now protests.

Moreover, this Court has never applied the Blue & Gold rule beyond the scope of patent errors in solicitations. It should decline the government’s invitation to extend the rule beyond the bounds of solicitations in this case.

Expanding the Blue & Gold rule beyond the bounds of patent solicitation errors would turn it into a general timeliness bar for bid protests. Expanding the rule so far would jeopardize it as a judicial infringement on the statute of limitations that Congress set in the Tucker Act. In other words, stretching the rule past its logical framework would risk losing the utility of the rule altogether.

Extending the Blue & Gold rule beyond the bounds of patent solicitation errors would also create a gridlock of litigation. It is simple enough for the COFC to administer a rule that requires it to review the four corners of a solicitation for clear and obvious defects. It is entirely another thing to require a fact-specific inquiry into when an interested party reasonably should have known of some other type of error anywhere in the world. This Court should deny the government’s invitation to transform a rule of efficiency into a rule of gridlock.

Turning to the merits, the Agency’s corrective action was unreasonable for two reasons. First, it was incomplete in that it failed to adequately target the identified defect, which was unequal treatment. The law does not require a perfect corrective action, but it does require a corrective action that targets the entire defect and not just a part of it. The Agency’s words and actions make clear it was aware that the defect extended beyond just the evaluation process, but its corrective action stopped with the evaluation and left unaddressed a litany of other problematic facts that formed the basis of the protest.

Second, and related, the corrective action was unreasonable because it did not contain any safeguards that could provide assurances that SSA Mayfield would not rely on any improperly obtained information from the first competition. In so doing, the corrective action allowed SSA Mayfield to create the appearance of impropriety, which occurred. In the absence of removing SSA Mayfield from the re-competition altogether, the corrective action should have required an equal playing field in the form of discussions. The fact that SSA Mayfield conducted discussions with Hopper after its first proposal, and those discussions led to a revised and upgraded proposal, shows that SSA Mayfield knew that discussions could play a crucial role in this procurement. The technical rankings given by SET1 and SET2 warranted discussions because neither Hopper nor El United was outstanding. The fact that SSA Mayfield ignored SET2’s recommendation and opted not to conduct discussions in the re-competition illustrates the unreasonableness of the corrective action.

Standard of Review

This Court reviews the grant of a motion to dismiss de novo. Sharifi v. United States, 987 F.3d 1063, 1066 (Fed. Cir. 2021); Athey v. United States, 908 F.3d 696, 705 (Fed. Cir. 2018). Likewise, this Court reviews conclusions of law de novo. See F.Lli de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1031 (Fed. Cir. 2000). It reviews a trial court’s findings of fact for clear error. Id.

This Court reviews an Agency’s corrective action under the Administrative Procedures Act’s arbitrary and capricious standard. 5 U.S.C. § 706(2)(A).

The scope of review under the ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the Agency. Nevertheless, the Agency must examine the relevant data and articulate a satisfactory explanation for its action including a “rational connection between the facts found and the choice made.”

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).

Argument

This brief will explain that El United did not waive its basis for protest under the Blue & Gold rule because the Agency’s error was latent, not patent. Further, this Court should not extend the Blue & Gold rule beyond the context of patent errors in a solicitation, and the Agency’s error was not in the solicitation.

After explaining why El United’s basis for protest is not waived, this brief will explain how the Agency’s corrective action was unreasonable. The Agency should have either replaced SSA Mayfield or held discussions with El United to level the playing field between El United and Hopper, after SSA Mayfield held discussions with Hopper and not with El United.

I. El United’s protest is not barred by Blue & Gold.

This Court should find El United’s claim is not waived under the Blue & Gold rule for two reasons. First, the Blue & Gold rule applies only to patent errors, not latent errors. See Blue & Gold, Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007). The Agency’s error in this case was latent. Therefore, El United’s claim cannot be waived under Blue & Gold. Second, to apply the Blue & Gold waiver to El United’s claim, this Court would have to extend the Blue & Gold rule beyond the context of solicitation errors. This Court should decline the government’s invitation to overstretch the Blue & Gold rule to the facts of this case.

A. The Agency’s error was latent, not patent.

The Blue & Gold rule applies to patent errors in a solicitation, not latent errors. COMINT Sys. Corp. v. United States, 700 F.3d 1377, 1382 n.5 (Fed. Cir. 2012). An error is patent when it is “an obvious omission, inconsistency or discrepancy of significance.” E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1339 (Fed. Cir. 2004).

The Agency’s error in this case was not found in the four corners of the solicitation or any amendment thereto. Instead, the error was the product of how the Agency conducted its corrective action. The Agency took that corrective action after El United protested the Agency’s original flawed award. The corrective action did not amend the solicitation, and it did not call for new bids under the solicitation. Instead, the Agency emailed the original offerors a description of its corrective action plan. That description explained the Agency would appoint a new SET and evaluate the offerors’ original proposals anew. It was silent on the topic of discussions until El United asked. When asked, the Agency referred all offerors to the original solicitation clause on discussions. That clause provided the agency may or may not conduct discussions as needed.

Even if the Blue & Gold rule extended to communications made during a corrective action, the Agency’s error was not obvious on the face of the communications in this case. The error in the Agency’s corrective action had two parts. First, it maintained the role of SSA Mayfield, who personally held discussions with Hopper and not with El United. Second, SSA Mayfield ultimately refused to hold discussions with El United. The Agency’s failure to level the playing field by holding discussions was a latent defect in the corrective action. The issue of retaining SSA Mayfield only ripened into the full bloom of error when she again awarded the contract to Hopper without holding discussions with any other offeror.

Before SSA Mayfield awarded Hopper the contract, the Agency refused to state whether it would or would not ultimately hold discussions with El United. Due to the “maybe yes, maybe no” nature of the Agency’s statements, any protest by El United would have been premature until the Agency firmly committed to the unreasonable course of action that it eventually took.

1. The Agency’s error had two parts: it failed to replace SSA Mayfield, and SSA Mayfield failed to hold discussions with El United after holding discussions with Hopper.

The Agency’s error had two parts. First, it allowed SSA Mayfield to remain the SSA on the procurement. The Agency retained SSA Mayfield even after she conducted discussions with Hopper—and only Hopper—and erroneously awarded the contract to Hopper in a flawed selection process. That flawed process led to El United’s original protest and the Agency’s corrective action. Second, the Agency failed to hold any further discussions to level the playing field of the offerors before SSA Mayfield again awarded the contract to Hopper.

Had the Agency either replaced SSA Mayfield or held discussions with El United, this case would have a decidedly different posture. Holding further discussions would have greatly reduced any lingering issues of unequal treatment of the parties or the appearance of impropriety in SSA Mayfield’s source selection.

Retaining SSA Mayfield planted the seed for potential error. That seed did not ripen into full error, however, until SSA Mayfield again awarded Hopper the contract after having conducting discussions with Hopper and not with El United. Both parts of this process—the planting and the ripening—were necessary to the full bloom of error El United now protests.

2. The Agency equivocated on whether it would hold discussions with El United until it again awarded the contract to Hopper.

El United requested discussions after the Agency announced its intended corrective action. The Agency’s response was equivocal. The Agency referred El United to the solicitation clause that stated the award may be made without discussions, but that the Agency still reserved the right to conduct discussions if necessary. Had El United filed a protest at that time, the government surely would have argued it was untimely and speculative. The government would have argued the Agency might or might not still hold discussions. Further, discussions might be unnecessary for a yet unknown reason, such as if SET2 ranked El United’s proposal significantly higher than Hopper’s. That government argument would have been correct.

The purpose of the bid protest system is not for offerors to preemptively complain of potential errors that an Agency may or may not commit. Holding otherwise would require preemptive protests every time an offeror believes discussions are needed but the government gave notice it may award a contract without discussions. Such protests would invite the COFC to issue advisory opinions based on partially formed facts. That would harm judicial economy and procurement efficiency, which the Blue & Gold was designed protect.

Although appellant has not found any case squarely addressing the issue at this Court, both the GAO and the COFC have dealt with it multiple times and generally find that such “maybe yes, maybe no” clauses, as used in this case, do not require preemptive litigation. See, e.g., IAP Worldwide Servs., Inc. v. United States, 159 Fed. Cl. 265, 319–20 (2022).

In IAP Worldwide, the COFC surveyed several decisions that concluded a solicitation clause reserving the right to hold discussions rendered any error by failing to hold discussions latent. See id at 320. The COFC reached the same conclusion in its recent decision SLS Federal Services, LLC v. United States, 163 Fed. Cl. 596 (2023). In SLS Federal, the COFC succinctly explained that “if agencies reserve the right to hold discussions, Blue & Gold will not protect the agency when it eventually foregoes them without explanation.” Id. at 606. The GAO reached the same conclusion in Science Applications International Corp., B-413501 et al., 2016 CPD ¶ 328, at 10 n.8 (Comp. Gen. Nov. 9, 2016) (SAIC).

The solicitation in IAP Worldwide stated the government “intends to award a contract without discussions, but reserves the right to hold discussions, if necessary.” IAP Worldwide, 159 Fed. Cl. at 275 (emphasis added). Similarly, the solicitation in SLS Federal indicated the government “intended to award contracts without discussions,” but “reserved the right” to use them if needed. SLS Fed., 163 Fed. Cl. at 600 (emphasis added). Likewise, the solicitation in SAIC indicated the government “intended to make the award without discussions, if possible.” SAIC, 2016 CPD ¶ 328, at 10 (emphasis added).

The word “intends” is a stronger indicator of likely government action the “may” used by the Agency in this case. Nevertheless, in IAP Worldwide and SLS Federal, the COFC found post-award claims for failure to conduct discussions were timely. The GAO found the likewise in SAIC. This Court should find the same.

The government did not even raise Blue & Gold issue in IAP Worldwide, only an intervenor raised it. See IAP Worldwide, 159 Fed. Cl. at 319–20. In fact, the government has previously argued against the application of the Blue & Gold rule on similar facts. See Oak Grove Techs., LLC v. United States, 155 Fed. Cl. 84, 111 (2021).

In Oak Grove, the COFC observed the government previously argued Blue & Gold would not bar a protest for failure to hold discussions so long as the solicitation preserved the government’s right to hold discussions if necessary. See id. In the government’s own words, under such circumstances, “Unsuccessful offerors would likely be able to challenge the Army’s final decision—made after the close of the solicitation—to make award decisions without discussions.” Id. (quoting Redacted Resp. & Reply Br. of Def. United States, Dell Fed. Sys., L.P. v. United States, 133 Fed. Cl. 92 (2017) (Nos. 17-465, 17-473), at *4–5). This Court should be skeptical of the government’s sudden about-face.

Indeed, El United should be credited for its reasonable reliance on the government’s prior position and the balance of the current case law. Waiver “‘is an intentional relinquishment or abandonment of a known right.’” Supreme Foodservice GmbH v. Dir. of the Def. Logistics Agency, 54 F.4th 1362, 1368 (Fed. Cir. 2022) (quoting Massie v. United States, 166 F.3d 1184, 1190 (Fed. Cir. 1999)). El United cannot have intentionally abandoned a right that the preponderance of the case law and the government’s own prior arguments said was premature until award.

At the very least, any decision of this Court contrary to the positions of the GAO, COFC, and the government prior to this case should apply only prospectively. El United should not be punished for its reasonable reliance on these authorities.

More broadly, this Court should not decide this case contrary to the prior positions of the GAO, COFC, and the government at all. Those positions were sound and well-reasoned. This Court should follow them. Equivocal statements of government intent should not give rise to unripe protests. An interested party should only protest issues that have ripened into error through an Agency’s concrete actions or unequivocal words.

B. The Blue & Gold rule should not extend to protests of corrective actions.

This Court has never extended the Blue & Gold rule beyond patent errors in solicitations. It should not start doing so in this case. At its core, the Blue & Gold rule aims to preserve the integrity, efficiency, and finality of the solicitation and bidding process. The Agency’s error in this case was outside the solicitation and after the close of bidding. Indeed, it was even after the Agency’s initial award, though the Agency retracted that award in response to El United’s first timely protest.

Defects in the conduct of corrective actions, particularly the corrective action in this case, are not the same as defects in solicitations. The logic of the Blue & Gold rule does not stretch so far as the facts before this Court. This Court should decline the government’s invitation to stretch it further.

This Court should decline to stretch the Blue & Gold rule to the facts in this case for two main reasons. First, extending the rule as far as the government asks would turn it into a broadly applicable timeliness gap-filler contrary to the Tucker Act’s statute of limitations. Second, applying the Blue & Gold rule beyond the scope of patent solicitation errors would turn a rule of efficiency into a rule of gridlock.

1. Extending the Blue & Gold rule to the facts of this case would infringe on the Tucker Act’s statute of limitations set by Congress.

The purpose of the Blue & Gold rule is to encourage correcting errors in solicitations prior to the close of bidding to prevent inefficient and expensive rebidding. See Bannum, Inc. v. United States, 779 F.3d 1376, 1380 (Fed. Cir. 2015). The rule was created to be narrow, limited to solicitations and bidding. Here, the Agency’s error was both outside the solicitation and after the close of bidding.

This Court has held the Blue & Gold rule extends to errors found in amendments to a solicitation made after the close of bidding. See COMINT Sys. Corp., 700 F.3d at 1382. This Court has not, however, extended the Blue & Gold rule to errors completely outside a solicitation.

If the Blue & Gold rule were stretched beyond the structure of solicitations, it would collapse under its own weight. In the context of solicitations, “a defect is patent if it could have been discovered by reasonable and customary care.” Inserso Corp. v. United States, 961 F.3d 1343, 1349 (Fed. Cir. 2020). In the context of the four corners of a written document, this rule is simple enough to apply. In the context of essentially any pre-award error, however, it is ungainly and lacks a meaningful limiting principle.

Expanding the Blue & Gold rule to any pre-award error that could have been discovered by reasonable and customary care would make it the single most important rule of bid protests. Pre-award errors are virtually the only bases for a bid protest. An error after the contract award is an administration issue, not a bid protest issue. Extending Blue & Gold so far would judicially usurp the statute of limitations for bid protests set by Congress in 28 U.S.C. § 2501.

As it is, the Blue & Gold rule can reasonably stand as a narrow exercise of authority based on the Tucker Act. See Per Aarsleff A/S v. United States, 829 F.3d 1303, 1317 (Fed. Cir. 2016) (Reyna, J., concurring). If the rule is expanded to include any protest of pre-award error, however, the Blue & Gold rule would become the de facto temporal limit on most protests. Yet, Congress has already set a temporal limit on protests allowed by the Tucker Act. See 28 U.S.C. § 2501. “When Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief.” SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 U.S. 954, 960 (2017); see also Inserso, 961 F.3d at 1354 (Reyna, J., dissenting).

If this Court extended the Blue & Gold rule to include essentially all pre-award errors, it would transform it from a narrow rule on waiver to a general gap-filler for timeliness akin to the doctrine of laches. The Supreme Court, however, has warned that “[l]aches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.” SCA Hygiene, 580 U.S. at 334. This Court should not risk losing the utility of the Blue & Gold rule by stretching it past its logical breaking point.

2. A waiver rule limited to patent solicitation errors promotes efficiency. A waiver rule that applied to any discoverable errors anywhere would promote gridlock.

Solicitations are formalized public documents inviting scrutiny. The terms of a solicitation bind the government and potentially bind offerors. An agency’s corrective action is fundamentally different from a solicitation. It is reasonable to hold interested parties strictly accountable for content within the four corners of a solicitation. Interested parties are on notice that they, and the government, may be bound by the words printed in a solicitation on which they make an offer. By contrast, corrective actions can be vague, non-public, comparatively informal, and potentially dynamic.

The notice of corrective action in this case was an email that the Agency sent to the three offerors. The corrective action did not amend, modify, or invite new bids under the solicitation. That emailed notice gave offerors the barest outline of the Agency’s planned acts. In fact, the original email was so general in nature that El United had to follow-up with multiple emailed questions, which led to further Agency emails in response.

Moreover, it is unclear what constituted the “four corners” of the corrective action. A solicitation has clear boundaries. An ongoing series of emails do not. Neither does the Agency’s actual conduct after those emails. Part of what makes the Blue & Gold rule work is that offerors are on notice that the solicitation is a discrete set of rules for the procurement that can only be amended through a formal public process. A corrective action has no such clear boundaries.

If the Agency’s corrective action had amended to solicitation or solicited new bids, or required other input from El United on which the Agency relied, then the government’s position would be more reasonable. See Sheridan Corp. v. United States, 95 Fed. Cl. 141, 149–50 (2010) (noting that participation is a re-solicitation after corrective action would waive protests of the re-solicitation terms after award). Indeed, El United does not dispute that when a corrective action solicits new bids or issues an amendment to a solicitation, protests of the terms of that new solicitation or amendment should be subject to the Blue & Gold rule.

Simply because corrective actions that solicit new bids or issue amendments to a solicitation can implicate the Blue & Gold rule does not mean other corrective actions do. The corrective action in this case did not. Rather than creating a plain and obvious error on the face of a formal document, the Agency’s error in this case was a snowball of ad hoc responses that coalesced into an unfair process. These rolling, cumulative errors in the source selection process were completely different from plain and obvious errors on the face of a solicitation. If the facts in this case were a round hole, the Blue & Gold rule would be a square peg. This Court should decline to force the rule onto facts that it does not fit.

In fact, there is nothing that clearly limits the government’s proposed rule to corrective actions. Instead, the decision below, at the government’s urging, erroneously relied on an out-of-context quote from this Court’s opinion in COMINT, Systems Corp. v. United States, 700 F.3d 1377, 1382 (Fed. Cir. 2012).

The decision below hinged on the words in COMINT Systems Corp.: “The same policy underlying Blue & Gold supports its extension to all pre-award situations.” See APPX 9. In COMINT Systems Corp., however, the sentence about “all pre-award situations” was directed specifically at protests of solicitation errors. See COMINT Sys. Corp., 700 F.3d at 1382. “The statute gives the Claims Court ‘jurisdiction to render judgment on an action by an interested party objecting to a solicitation . . . without regard to whether suit is instituted before or after the contract is awarded.’” Id. (quoting 28 U.S.C. § 1491(b)(1)) (emphasis added).

Likewise, the sentences following the COMINT Systems Corp. quote place it again in the context of solicitation errors. “[A]assuming that there is adequate time in which to do so, a disappointed bidder must bring a challenge to a solicitation containing a patent error or ambiguity prior to the award of the contract.” Id. (emphasis added).

The court below read this Court’s opinion in COMINT Systems Corp. to broadly apply the Blue & Gold rule to all pre-award errors. In COMINT Systems Corp., this Court did no such thing. COMINT Systems Corp. was all about patent errors in a solicitation. Rather than support the decision below, COMINT Systems Corp. undermines it.

This Court’s opinion in COMINT Systems Corp. was limited to the context of patent solicitation errors for good reason. Expanding the Blue & Gold rule beyond the realm of solicitation errors would be a significant burden for courts to administer. Under the Blue & Gold rule as it stands, interested parties must raise patent errors prior to the close of bidding or, if the error arose after the close of bidding, prior to award. Where must the errors be patent? In the solicitation.

Limiting inquiry to the solicitation is important because an error is patent “if it could have been discovered by reasonable and customary care.” Inserso, 961 F.3d at 1349. It is reasonable for a trial court to decide if an error could have been discovered by reasonable and customary care when the scope of inquiry is limited to the solicitation. If the inquiry is not limited to the solicitation, however, the potential inquiry becomes boundless. Where must the error be patent? Anywhere.

Closely reading the terms of a solicitation is entirely different from sifting through all possible information of which an interested party reasonably should be aware. Should an interested party reasonably be aware of information on a government website unrelated to procurement? Should it be reasonably be aware of the content of an article on the back page of the New York Times? Should it reasonably be aware of an email an agency employee sent to one of its engineers working on a different project?

The answer to each question would be fact-specific. Under the government’s proposed rule, the COFC would need to wade through the all the relevant and sordid facts in case after case. This is far different than reading a solicitation for clear and obvious defects. Rather than promoting certainty, efficiency, and finality, the government’s proposed expansion of the Blue & Gold rule would plunge every bid protest into a sea of pretrial discovery, fact-finding, and protracted litigation.

This Court should decline the government’s invitation to expand the Blue & Gold rule beyond patent errors in solicitations. The current rule works because patent errors are easy to identify in solicitations that are limited to their own four corners. Administering this rule is straightforward.

By contrast, attempting to administer a rule that applied to any reasonably discoverable error anywhere in the world would mire courts in endless protracted litigation. Such a quagmire would cut against the broad policy basis for the Blue & Gold rule. It would turn a rule of efficiency into a rule of gridlock. This Court should decline the government’s invitation to flip this Court’s current policy judgement on its head.

II. The Agency’s Corrective Action Was Unreasonable Because It Was Incomplete, and That Incompleteness Led to the Appearance of Impropriety.

When crafting a corrective action, agencies are required to give a “coherent and reasonable explanation” for their decisions. Banknote Corp of America, Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004). “To be reasonable, the Agency must have examined the relevant data and articulated a coherent and reasonable explanation for [its] decision to take corrective action.” Novak Birch v. United States, 132 Fed. Cl. 578, 601 (2017) (emphasis added).

A. The corrective action ignored facts and did not target the defect that was identified, which was unequal treatment.

The record contains a heap of “relevant data” that the corrective action completely ignored, including the facts that (1) SSA Mayfield and SET1 held discussions with Hopper when its technical approach was rated “good,” and it was assigned two weaknesses. APPX 20–21. (2) Hopper and SSA Mayfield exchanged nonpublic information during those discussions. See APPX 21. (3) Hopper used that information to revise its proposal. APPX 21. (4) Those revisions resulted in two of its weaknesses being upgraded to strengths. APPX 21–22. And (5) SSA Mayfield was privy to all this information, including what Hopper was capable of and prepared to do to correct those two Agency concerns. APPX 20–22.

Instead of examining all the facts as required, the Agency acted as if time stopped once SET1 conducted its initial evaluation. As a result, its corrective action was incapable of addressing the defect that was identified, which was unequal treatment. The Agency implicitly acknowledged the defective selection impacted the later portions of the competition. The Agency knew that there were “allegedly improper discussions”—not just improper rating—when it emailed the offerors to describe the corrective action and re-competition format. APPX 26.

For its part, the Court of Federal Claims repeated the same error. The first time with its assertion that “any advantage Hopper Systems gained from discussions with SET1 was erased with the creation of SET2.” APPX 15. On its very face that sentence shows the error of its conclusion: the discussions were with SET1 and SSA Mayfield. See APPX 4. So if it was necessary to “erase” “advantage[s] . . . gained from discussions,” why was SSA Mayfield left in place when she was just as much a part of those discussions?

Later in the opinion, the court below commits the same error when it explains that “[t]he Agency eliminated the competitive range, disbanded the allegedly biased SET1, assembled SET2 with new personnel to review the offerors’ technical proposals in the re-competition, and shielded SET 2 from information the Agency obtained during discussions with Hopper Systems and from Hopper Proposal #2.” APPX 15 (emphasis added). But that is not what happened. The Agency should have shielded the re-competition process from information that the Agency obtained during the earlier discussions; what it did was shield SET2 while leaving undisturbed SSA Mayfield’s knowledge obtained in those earlier discussions.

This mischaracterization of the facts impacted the Court of Federal Claims’ holding as well, since it determined that the “corrective action was reasonable because it directly targeted El United’s original concern of a flawed and biased competitive range determination.” APPX 15. But the “original concern” did not stop at the competitive-range determination, notwithstanding the three sentences that the record contains of El United’s GAO bid protest. Its communications with the Agency about the corrective action make it clear that unequal treatment was the defect that needed correcting. See APPX 27 (El United asking the Agency whether proposal revisions would be allowed “to account for information offers received during their post-award debriefings”; asking the Agency whether there would be discussions with offerors in the re-competition; noting the Agency engaged in discussions with Hopper; and alerting the Agency that it “believe[d] it would only be fair if it received the same treatment for its Proposal #1 as was originally afforded to Hopper’s Proposal #1.”) (emphasis added).

Truncating the facts like the Agency—and later the Court of Federal Claims—did ignores the law which says Agencies must look at the facts and rationally relate the corrective action to those facts. In effect, the Court of Federal Claims’ holding allows the Agency to simultaneously hide behind its obtuse interpretation of what constituted El United’s “original concern,” to the exclusion of the actual identified defect, while simultaneously claiming it has “broad discretion” to fashion a corrective action. But the reasonableness standard cannot mean that an Agency may simply choose a few facts and address only those while ignoring the rest.

B. The incomplete corrective action allowed SSA Mayfield to create the appearance of impropriety.

The Federal Acquisition Regulation puts a strong emphasis on the integrity and conduct of contracting officials: “Government business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none.” FAR 3.101-1 (emphasis added). The regulation cautions against “even the appearance of a conflict of interest in Government-contractor relationships.” Id. The official conduct of Government personnel “must . . . be such that they would have no reluctance to make a full public disclosure of their actions.” Id. By leaving SSA Mayfield free to inexplicably change her mind about discussions with Hopper, even though its proposal was the same, and to ignore the recommendation of the re-formed evaluation team, all without explaining these actions, the corrective action created an appearance of impropriety.

1. SSA Mayfield had an unrestricted opportunity to base her selectionon improperly gained knowledge.

Rather than ensuring equal treatment, the corrective action allowed SSA Mayfield to conduct the re-competition with all the same information that the Agency knew was improperly obtained. The Agency was so sure that information would taint the process that it replaced every member of SET1 and made sure none of the new members in SET2 had access to the information. Thus, the Agency sought to keep SET2 insulated from the improper information gained earlier, but the “ethical wall” that the Agency constructed had a door built into the middle, and SSA Mayfield had the key. There was nothing about this corrective action that bound SSA Mayfield to only the “new” information from the re-competition. This is a direct result of ignoring the many facts listed above, and it is a clear illustration that it fell short of being reasonable.

As Hopper’s revised proposal and re-ranking shows, discussions are important. Many agencies are even required to hold discussions with offerors on awards this size, absent some compelling reason not to. See Dell, 906 F.3d 982, at 995–96. SSA Mayfield clearly understood the importance of discussions. She had conducted them with one of these offerors, and the discussions resulted in a revised proposal that turned two weaknesses into strengths.

2. SSA Mayfield’s actions during the re-competition were inconsistentand unexplained.

The facts show it was unreasonable for SSA Mayfield to conclude that discussions were warranted the first time and not the second time. Hopper’s Proposal #1 was evaluated substantially the same by both SET1 and SET2. The record does not display all the sub-rankings for SET1’s evaluation of Hopper’s Proposal #1, but we can glean that it had no significant weaknesses because that would have resulted in an “unsatisfactory.” APPX 3. It had at least two weaknesses, because after discussions with SSA Mayfield, it turned two weaknesses into strengths. APPX 4. Based on that revision, it improved its overall technical approach rank from “good” to “outstanding.” APPX 4.

SET2 evaluated Hopper’s Proposal #1, and it too rated the technical approach “good.” It also rated El United’s technical approach as “good.” There was a single difference in the subratings: Hopper’s proposal was awarded a “significant strength,” in a subcategory. APPX 6. Because the two proposals were virtually identical, and because neither one was “outstanding,” it was eminently reasonable for SET2 to recommend discussions with the offerors in the re-competition; it was inexplicable and concerning that SSA Mayfield ignored that recommendation. And it is a failure of the corrective action itself that allowed SSA Mayfield to make such a decision.

Conclusion and Relief Sought

This Court should decline the government’s invitation to extend the Blue & Gold rule beyond its current bounds of patent solicitation errors. The errors in this case were not found in a solicitation, and they were latent, not patent. The Blue & Gold rule simply does not apply to the facts of this case.

At its core, this is a case where the Agency conducted discussions with one offeror among three. When the Agency’s source selection process was challenged, it took corrective action that failed to address that unequal treatment. At a minimum, the agency should have either appointed a new source selection authority or leveled the playing field between offerors by holding discussions. Nevertheless, the same source selection authority who personally conducted discussions with only one of the offerors again awarded that offeror the contract without leveling the playing by holding discussions with the other offerors. This was not reasonable.

This Court should reverse the decision below and remand the case for appropriate relief.

Respectfully submitted,
/s/ Charlton Hedden
Charlton Hedden
HEDDEN FIX, P.C.
Arlington, VA
Counsel for El United

/s/ Joshua Fix
Joshua Fix
HEDDEN FIX, P.C.
Arlington, VA
Counsel for El United

Certificate of Compliance

This brief complies with type-volume limits of Fed. R. App. P. 32(a) and Fed. Cir. R. 32(b) because, excluding the parts of the document exempted by Fed. R. App. P. 32(f) (cover page, disclosure statement, table of contents, table of citations, statement regarding oral argument, signature block, certificates of counsel, addendum, attachments), this brief contains no more than 7,690 words.

/s/ Charlton Hedden
Charlton Hedden,
Hedden Fix, P.C.,
Counsel for El United

/s/ Joshua Fix
Joshua Fix
Hedden Fix, P.C.,
Counsel for El United

Certificate of Service

I certify that on this 12th day of March, 2023, I electronically filed this brief with the Clerk of the Court using the CM/ECF System, which will send notice of such filing to all registered CM/ECF users.

/s/ Charlton Hedden
Charlton Hedden,
Hedden Fix, P.C.,
Counsel for El United

/s/ Joshua Fix
Joshua Fix
Hedden Fix, P.C.,
Counsel for El United

No. 23-1953

Winning Brief for Defendant-Appellee, United States

IN THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE FEDERAL CIRCUIT

EL UNITED ASSOCIATION,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

On Appeal from the United States Court of Federal Claims
Case No. 2022-1986C, Judge Joyce Byers

BRIEF FOR APPELLEE THE UNITED STATES

Katharine (Katie) Toledo
Bailey McHale

March 12, 2023
Attorneys for Appellee United States

Statement of Related Cases

Under Federal Circuit Rule 47.5, defendant appellee’s counsel is unaware of any appeal in or from this action that is or was previously before this Court. Appellee’s counsel is likewise unaware of any pending cases in this Court or others that would affect or be affected by this Court’s decision in this appeal.

Jurisdictional Statement

The United States Court of Federal Claims had jurisdiction under the Tucker Act, 28 U.S.C. § 1491(b)(1) (“[T]he United States Court of Federal Claims . . . shall have jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract . . . .”). On appeal, this Court has jurisdiction under 28 U.S.C. § 1295(a)(3) because this case is an “appeal from a final decision of the United States Court of Federal Claims.” El United Ass’n v. United States, No. 2022-1986C (Fed. Cl. Jan. 16, 2023).

Statement of the Issues

I. Whether El United waived its right to protest under the Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) waiver rule.
II. Whether the corrective action taken by the agency after El United’s GAO protest was reasonable.

Statement of the Case

I. Nature of the Case

El United Association (El United) commenced this post-award bid protest challenging the agency’s March 14, 2022 “Notice of Corrective Action.” APPX 1. El United filed its complaint with the Court of Federal Claims on June 29, 2022, alleging that the agency’s corrective action was unreasonable because the Department of Energy failed to appoint a new Source Selection Authority (SSA). APPX 7. El United appeals from the trial court’s judgment pursuant to a reported opinion, which dismissed El United’s complaint. APPX 17.

II. Statement of Facts

A. The Department of Energy Issues the Solicitation

In October 1984, the Hawkins National Laboratory (Hawkins Laboratory), controlled and operated by the Department of Energy (DOE or the agency) was damaged by an earthquake, resulting in environmental contamination. APPX 2. As a part of DOE’s recent efforts to clean up environmental contamination from the Cold War, the agency has contracted to initiate accelerated cleanup programs to target high-risk areas, including a program focused on the Hawkins Laboratory known as Hawkins National Laboratory Remediation 2 (HNLR). Id. The HNLR contract covers various forms of environmental cleanup, including demolition of the remaining facilities, remediation of the environment, waste disposal, operation and maintenance of waste disposal facilities, site surveillance, and environmental monitoring. APPX 18.

On June 4, 2021, DOE issued Solicitation DE-80545749992 (Solicitation) for the HNLR contract. APPX 2, 18. The Solicitation indicated that the agency intended to award the contract as a single indefinite-delivery, indefinite-quantity (IDIQ) contract with a ten-year ordering period. APPX 18. The Solicitation stated that the agency would issue task orders on either a fixed-price or cost-reimbursable basis up to a $600 million ceiling. Id.

Proposals would be evaluated considering both price and non-price factors. The non-price factors included technical approach, corporate experience, and management approach; the most important was technical approach. Id. Non-price factors were collectively significantly more important than price. Id. The solicitation stated that the contract would be awarded on a best-value tradeoff basis. Id. The agency reserved the right to make the contract award without holding discussions or allowing revised proposals. Id.

El United submitted a complete and timely proposal to the solicitation before the closing date of September 2, 2021. APPX 3. Hopper Systems (Hopper) and Vecna Technologies also submitted proposals. Id.

B. El United Is Excluded from Competitive Range in Original Competition

The proposals were evaluated by Source Selection Authority Maxine Mayfield (SSA Mayfield) based on the rating assigned by a Source Evaluation Team (SET1) including Martin Brenner, Alexei Kharkov, and Samuel Owens (SET1). APPX 19. SET1 evaluated proposals on the three non-price factors and assessed each as a Significant Strength, Strength, Weakness, or Significant Weakness. Id. Proposals were also assigned an overall rating of Outstanding, Good, Satisfactory, or Unsatisfactory. Id.

During SET1’s initial evaluation, El United received a Satisfactory for its technical approach and Good for its management approach and corporate experience and had a price of $212.76M. APPX 20. Comparatively, Hopper received Good in all three categories at a price of $213.18M. Id. Although El United was ranked second, SSA Mayfield determined that only Hopper fell within the competitive range. APPX 21. On November 1, 2021, the agency informed El United it had been excluded from the competitive range. APPX 4.

During discussions, Hopper had an opportunity to address the two weaknesses in its technical approach: (1) facility and security; and (2) storage and maintenance. APPX 21. On January 14, 2022, Hopper was allowed to submit a second proposal (Hopper Proposal 2), addressing these weaknesses. Based on the second proposal, SET1 improved Hopper’s technical approach from Good to Outstanding. APPX 22. SSA Mayfield awarded the contract to Hopper. APPX 23.

C. El United’s GAO Protest Challenges Initial Evaluation as Unequal Becauseof the Alleged Bias of the Evaluation Team.

On February 10, 2022, the agency awarded the HNLR contract to Hopper Systems. APPX 23. El United timely requested and received a post-award debriefing. APPX 24. After the award, El United raised concerns about Mr. Brenner’s alleged biased judgment, which it alleged caused its exclusion from the competitive range. APPX 25. Mr. Brenner is brother-in-law to the CEO of Hopper Systems, James Hopper, and interned at Hopper Systems during graduate school. APPX 5, 25. El United filed a post-award bid protest with the GAO challenging its unequal evaluation by SET1 and claiming that, if it had been evaluated the same as Hopper, El United would have been included in the competitive range. APPX 25.

D. Agency Issues Voluntary Corrective Action Plan Including Replacingthe Evaluation Team.

In response to El United’s protest, the DOE advised the GAO on March 10, 2022, that it would take corrective action to reopen the competition, remove the Mr. Brenner from SET1, and re-evaluate the three initial proposals with a new SET (SET2) with three new members. Accordingly, the GAO dismissed El United’s protest. APPX 25.

E. After Post-Award Debriefing, El United Protests the Corrective Action Planin the Court of Federal Claims, Alleging an Unequal Playing Field.

On March 14, 2022, the agency emailed a “Notice of Corrective Action” to all three original offerors indicating that the agency would “assemble a new [SET] to evaluate offerors’ final proposals,” that it would only consider Hopper’s initial proposal, and that SSA Mayfield would issue a new “final award decision.” APPX 26 (March 14 Email). El United replied to this notice on March 18, 2022, asking for an “opportunity to revise their proposals” based on information given in its post-award debriefing. APPX 27 (March 18 Email). The agency replied on March 21, 2022, that it would not accept new proposals. APPX 27 (March 21 Email). El United followed up on March 24, 2022, asking if the agency would conduct discussions because SSA Mayfield engaged in discussions with Hopper during the initial competition. APPX 27 (March 24 Email). El United “believe[d] it would only be fair if [it] received the same treatment” as Hopper, who had had discussions with the agency. Id.

The agency emailed all offerors on April 1, 2022, reiterating that all information obtained in the initial competition would be excluded from the initial competition. APPX 28. (April 1 Email). Further, the agency quoted its initial solicitation:

The Government may evaluate proposals and award contracts without conducting discussions. The Government may conduct discussions if it determines that discussions are in the best interests of the Government. Each Offeror should submit only one proposal which represents its best approach to meeting the requirements of the solicitation.

Id. (quoting APPX 18).

SET2 re-evaluated the initial proposals. Both Hopper and El United received overall ratings of Good for technical approach. APPX 29. However, El United had one Significant Strength and Hopper had two, so SET2 “expressed greater confidence that Hopper would be capable of meeting the technical requirements” of the contract. APPX 30 (SSA Mayfield’s source selection decision memorandum interpreting the SET2 Evaluations). Although SET2 suggested that the agency open discussions, SSA Mayfield justified the decision to award to Hopper without conducting discussions based on SET2’s greater confidence in Hopper. Id.

The agency announced its award of the contract to Hopper Systems on June 10, 2022. APPX 7. The agency conducted debriefings with El United on June 14, 2022. Id. El United filed its complaint with the Court of Federal Claims on June 29, 2022. Id.

III. Course of Proceedings Below

On January 16, 2023, the Court of Federal Claims entered judgment in favor of the United States. APPX 1. The Court of Federal Claims correctly granted the government’s motion to dismiss and denied El United’s motion for judgment on the administrative record. APPX 17. First, the trial court held that El United’s GAO post-award protest was untimely under the Blue & Gold waiver rule because El United failed to raise its protest grounds prior to the contract award. APPX 1. Second, even if the protest had been timely, the trial court held that El United’s protest was unsuccessful on the merits because El United failed to demonstrate that the agency’s corrective action was arbitrary, capricious, or otherwise not in accordance with law. Id.

Summary of the Argument

The federal procurement process values efficiency. Unnecessarily delaying this process with lengthy litigation is contrary to the policies underlying this Court’s precedent. Efficiency is particularly vital to the procurement at issue, implicating accelerated cleanup of high-risk environmental liabilities. The Federal Circuit’s precedent of discouraging bidders from waiting to protest and deference to reasonable agency corrective action should lead this Court to affirm the Court of Federal Claims’ decision.

El United waived its right to protest pursuant to the Blue & Gold waiver rule because it failed to raise its protest before the award. Because this issue was evident before the award, the Blue & Gold waiver rule applies to this case. Further, this was a patent issue from the language of the corrective action and clarification emails. This Court should not permit El United to wait to raise its protest until after it lost the award.

Further, the agency’s corrective action was reasonable because it directly addressed El United’s concerns, while realistically considering the circumstances surrounding the procurement. Relevant considerations in the agency’s implementation of the corrective action at issue were time, crafting the corrective action in a way to ensure evaluation aligned with the terms of the solicitation, and carefully documenting the corrective action on the record.

Argument

I. Standard of Review

The Court of Appeals for the Federal Circuit reviews decisions arising out of the Court of Federal Claims under an arbitrary and capricious standard. Per Aarsleff A/S v. United States, 829 F.3d 1303, 1309 (Fed. Cir. 2016) (“We review anew the question of whether the procurement decision . . . was arbitrary and capricious under the [Administrative Procedure Act].”); Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005) (“This court reviews the trial court’s determination on the legal issue of the government’s conduct, in a grant of judgment upon the administrative record, without deference.”).

Protests against agency decisions involving procurement are reviewed under the Administrative Procedures Act title 5, section 706. See 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706). Under the Administrative Procedures Act, “a reviewing court shall set aside the agency action if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir. 2013); Banknote Corp. of America v. United States, 365 F.3d 1345, 1350–51 (Fed. Cir. 2004); Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057–58 (Fed. Cir. 2000).

II. The Lower Court Correctly Decided That El United Waived Its Protest Under Blue & Gold.

A. The Blue & Gold Waiver Rule Applies to All “Pre–Award Situations” Including Corrective Actions.

The Blue & Gold waiver rule provides that

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, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007). This waiver rule has been extended to other cases contesting “the terms of a solicitation.” Inserso Corp. v. United States, 961 F.3d 1343, 1349 (Fed. Cir. 2020); COMINT Sys. Corp. v. United States, 700 F.3d 1377, 1382 (Fed. Cir. 2012). The underlying logic of the waiver rule discourages plaintiffs from sitting on their rights and “avoid[s] costly litigation after the fact.” Blue & Gold, 492 F.3d. at 1313–14 (holding that the statute mandates that “the courts give due regard to the interests of national defense and national security and the need for expeditious resolution of the action” (citing 28 U.S.C. § 1491(b)(3)) (emphasis in original).

Solicitation errors can be found beyond the initial bidding period and beyond the text of a solicitation. See COMINT Sys. Corp., 700 F.3d at 1382; In COMINT Systems, this Court clarified that the waiver rule applies outside the four corners of the solicitation, such as an amendment to the solicitation. See id. This Court further explained its reasoning: “The same policy underlying Blue & Gold supports its extension to all pre-award situations.” Id. Therefore, Blue & Gold applies to solicitation defects apparent at any time before final award, even after the close of bidding. Id. Inserso demonstrates how Blue & Gold applies to situations of organizational conflict of interest (OCI) as a solicitation defect. Inserso, 961 F.3d at 1352. In Inserso, the Federal Circuit held that bidders should have considered the competition’s timeline and found an unfair distribution of information not explicitly stated in the solicitation. See id. at 1350 (holding that Inserso should have known “the express terms of the solicitation contemplated overlap of bidders in the two competitions . . . .”). This Court explained that the plaintiff should have found the issue implied in the solicitation before award. Id. (“Inserso, if it had taken reasonable care, would have known that recipients of the information at issue could include bidders in the small-business competition.”). Inserso implicitly accepts, therefore, that the waiver rule applies to how agencies conduct competitions. Id.

The Blue & Gold rule also applies when there are “patent” errors, as the rule is founded in the patent ambiguity doctrine. Blue & Gold, 492 F.3d at 1313 (“Under the doctrine, where a government solicitation contains a patent ambiguity, the government contractor has ‘a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation’ in a subsequent action against the government.”) (quoting Statistica, Inc. v. Christopher, 102 F.3d 1577, 1582 (Fed. Cir. 1996)). Inserso defines a patent solicitation error as “an obvious omission, inconsistency, or discrepancy of significance . . . [or] if [the error] could have been discovered by reasonable and customary care.” Inserso, 961 F.3d at 1349 (citing Per Aarsleff A/S, 829 F.3d at 1312; K-Con, Inc. v. Secretary of Army, 908 F.3d 719, 722 (Fed. Cir. 2018)). The Blue & Gold waiver rule applies when the solicitation puts the protestor on notice of the issue. Inserso, 961 F.3d at 1352.

B. El United Waived Its Corrective Action Protest by Waiting to File Post-Award.

El United contests the way that the re-competition was conducted, that discussions were not held, and that SSA Mayfield was not replaced. APPX 7. El United was on notice of these issues before the final award. See APPX 26–28 (emails to El United and all bidders stating that discussions may not be held and that SSA Mayfield would make the final award that were sent before award). Therefore, as a “pre-award situation” similar to COMINT Systems, the Blue & Gold waiver rule would require El United to raise its protest before award. See COMINT Sys. Corp., 700 F.3d at 1382.

El United contests a voluntary corrective action in response to a post–award protest. APPX 6–7. However, El United knew discussions were not guaranteed to be conducted in the re-competition based on the language in the initial solicitation, which was specifically highlighted in the April 1 Email. APPX 3, 28 (“The agency also directs offerors to the solicitation provision which provides that: [t]he Government may evaluate proposals and award contracts without conducting discussions.” Therefore, El United should have known of this issue as early as March 14, 2022, from the Notice of Corrective Action and as late as April 1, 2022, from the clarification emails.

Despite this notice, El United did not file its protest to these terms of the competition before the award and has therefore waived its right to protest later. Further, under the doctrine of patent ambiguity, El United’s interpretation of the contract cannot be accepted. APPX 12 (failure to seek clarification “precludes acceptance of [the offeror’s] interpretation”) (quoting Blue & Gold, 492 F.3d at 1313)).

Further, El United is also contesting the way the competition was conducted is unfair, similar to the protest in Inserso. APPX 10; see Inserso, 961 F.3d at 1352. El United’s protest of the unfairness of not conducting discussions or replacing SSA Mayfield is similar to Inserso’s protest of the unfairness of conducting debriefings with some bidders while the competition was ongoing. Compare APPX 7, with Inserso 961 F.3d at 1351. Therefore, the Court of Federal Claims correctly assessed El United’s protest of the corrective action as a protest to a solicitation defect. APPX 10. Because El United failed to raise a protest before award, El United is not allowed to raise this protest pursuant to the Blue & Gold waiver rule.

C. El United Did Not Preserve Its Protest in Failing to File a Pre-Award Challenge.

This Court should not entertain arguments that a mere clarification email constitutes a preservation of El United’s right to protest. In Per Aarsleff A/S, this Court considered email communications between the contractor and contracting officer about an issue to be part of the “reasonable and customary care” required of contractors. Per Aarsleff A/S, 829 F.3d at 1314. And contractors are “‘charged with knowledge of law and fact appropriate to the subject matter.’” Id. (quoting Turner Constr. Co. v. United States, 367 F.3d 1319, 1321 (Fed. Cir. 2004)).

The Court of Federal Claims correctly asserted that El United “wait[ed] months to raise the issue and engage[d] in costly after-the-fact litigation.” APPX 12. El United’s emails to the agency do not constitute a formal protest. Id. Rather, they constituted clarification of whether discussions were going to be held, similar to the email communication in Per Aarsleff A/S, 829 F.3d at 1307, 1314. El United was expected to take reasonable care because as a contractor it was charged with knowledge of law and facts. See id. El United has demonstrated it knew the law regarding when and how to file a protest. See APPX 25. Because El United did not raise this issue until after the award, it therefore has not preserved its right to protest patent issues with the competition.

III. The Lower Court Correctly Decided That El United’s Protest Also Fails on the Merits Because the Agency’s Corrective Action Was Reasonable.

A. Both the Federal Circuit and the Court of Federal Claims Have Continually Emphasized the Broad Discretion Afforded to Agency Officials.

Beyond the issue of waiver, the Court of Federal Claims correctly held that the agency’s corrective action was reasonable. APPX 1. The Federal Circuit has continually recognized that agency officials have broad discretion to take corrective action. Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 992 (Fed. Cir. 2018). Because unexpected and unique issues may arise in the course of a procurement, contracting officers “‘are entitled to exercise discretion upon a broad range of issues confronting them in the procurement process.’” PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir. 2010) (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)). Both the Federal Circuit and the Court of Federal Claims have recognized that the discretion of contracting officers is highest in procurements involving a best-value tradeoff basis of award. See, e.g., PAE Applied Techs., LLC v. United States, 154 Fed. Cl. 490, 509 (2021) (quoting Banknote Corp. of America Inc., 365 F.3d at 1355) (“‘It is well-established that contracting officers have a great deal of discretion in making contract award decisions, particularly when, as here, the contract is to be awarded to bidder or bidders that will provide the agency with the best value.’”); TRW, Inc. v. Unisys Corp., 98 F.3d 1325, 1327–28 (Fed. Cir. 1996).

Reviewing courts must only determine that an agency’s corrective action is “reasonable under the circumstances.” Sheridan Corp. v. United States, 95 Fed. Cl. 141, 151 (2010) (internal quotations omitted). Analysis of whether a corrective action was reasonable warrants a fact-specific review of the circumstances. See Dell Fed. Sys., 906 F.3d at 997; PAE Applied Techs., 154 Fed. Cl. at 512. Neither the Federal Circuit nor the Court of Federal Claims recognizes a specific standard for reasonableness due to the highly fact-specific nature of the analysis. WHR Grp., Inc. v. United States, 115 Fed. Cl. 368, 397 (2014) (“[T]here can be no universal test as to what constitutes appropriate corrective action.”). Rather, reasonableness of agency corrective action is evaluated under a rational basis standard that varies from case to case based on the circumstances surrounding the procurement. See Jacobs Tech., Inc. v. United States, 100 Fed. Cl. 186, 190 (2011).

Under the rational basis standard, agency actions are afforded great deference and are upheld as long as such decisions are “rational, reasonable, and coherent, and reflect due consideration of all relevant facts.” Jacobs Tech. Inc. v. United States, 131 Fed. Cl. 430, 450 (2017) (internal quotations omitted). Reviewing courts may only set aside procurement actions in two situations: first, if the procurement official’s decision “lacked a rational basis,” and, second, if the decision or procedure “involved a violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi, 238 F.3d at 1332.

To determine whether a procurement official’s decision lacked a rational basis, the reviewing court must determine “whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion.” Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (citing Impresa, 238 F.3d at 1332–33). The disappointed bidder bears the “heavy burden” of demonstrating that there was no possible rational basis for the award decision. Impresa, 238 F.3d at 1333. To demonstrate that the decision implicated violation of regulations or procedures, the disappointed bidder must demonstrate “a clear and prejudicial violation” of statutes, regulations, or procedures. Id.

Reviewing courts must uphold agency decisions as long as they pass rational basis, even if the reviewing court finds that fuller corrective actions would have been reasonable and perhaps more advantageous. See Dell Fed. Sys., 906 F.3d at 998–99 (“Even if we agreed with Appellees that the Army had other, better options available, we nevertheless conclude that the option it chose was reasonable, and we therefore refuse to ‘substitute [our] judgment for that of the Army by determining whether there was another, perhaps preferable solution.’”) (citing R&W Flammann GmbH v. United States, 339 F.3d 1320, 1322 (Fed. Cir. 2003); PAE Applied Techs., LLC, 154 Fed. Cl. at 522 (“Although as indicated below, the court may believe there may have been advantages to the Navy to consider a fuller corrective action, the court does not accept the protestors’ arguments that the Navy was required to do so . . . .”). Although most cases addressing whether an agency’s corrective action was reasonable occur in the context of pre-award protests, neither the Federal Circuit nor the Court of Federal Claims has distinguished between pre-award and post-award corrective action. See Dell Fed. Sys., 906 F.3d at 997, 999.

In the absence of specific factors that make an agency’s corrective action reasonable, the Court of Federal Claims assesses the circumstances surrounding a corrective action to demonstrate reasonableness. For example, the Court of Federal Claims has recognized that time constraints and prolonged protest procedures justify more limited corrective action on the part of an agency to reduce delays in procurement. See PAE Applied Techs., 154 Fed. Cl. at 524, 526 (holding, despite concern that the Navy’s corrective action may have been more expedient if it allowed for broader proposal revisions, that the Navy’s decision to allow only limited proposal revisions was reasonable given that the procurement process had already spanned across multiple years).

In addition, the Court of Federal Claims has upheld agency corrective action when the corrective action in question better aligned the evaluation process with the terms of the solicitation. See SLS Fed. Servs., LLC v. United States, 163 Fed. Cl. 596, 601–02 (2023) (holding agency corrective action was unreasonable because the agency failed to conduct a price-reasonableness analysis required by the solicitation even after its corrective action); Jacobs Tech., 131 Fed. Cl. at 454 (upholding an agency’s corrective action of reevaluating proposals and issuing a new source selection decision where “subsequent evaluation in accord with the terms of the solicitation” ensured equal treatment of all offerors).

Finally, the Court of Federal Claims has emphasized that corrective action is more likely to be sustained where the agency officials properly documented the justification for corrective action in the administrative record. See Novak Birch, Inc. v. United States, 132 Fed. Cl. 578, 602–03 (2017) (“[I]t is essential that contracting officers carefully and coherently document corrective action decisions in order to provide the best possible clear explanation for such decisions.”).

B. The Agency’s Corrective Action Was Reasonable Because It Directly Addressed Concerns of Flawed and Biased Competitive Range Determination.

In this case, the agency’s corrective action was reasonable because it was responsive to the issues raised in the GAO protest in light of the circumstances. The carefully considered and well-documented process of corrective action on the part of the agency is likewise supported by the Federal Circuit’s long-standing recognition of the broad discretion of agency officials to take corrective action that considers exogenous factors. See Impresa Construzioni Geom. Domenico Garufi, 238 F.3d at 1332. In the absence of evidence to the contrary, this Court should uphold the agency’s corrective action because it was “rational, reasonable, and coherent and reflects due consideration of all relevant facts.” Jacobs Tech., 131 Fed. Cl. at 450.

Because reasonableness analysis of corrective action is highly fact-specific, a comparison of the protest grounds raised by El United to the corrective action taken by the agency is necessary. El United argued that, but for unequal treatment of its proposal compared to Hopper Systems’ proposal, it would have been included in the competitive range established by SET1. APPX 7. In response, the agency made a series of crucial changes to the procurement process. First, the agency eliminated the competitive range. APPX 5. Second, the agency removed Martin Brenner and appointed an entirely new SET team, SET2. Id. Third, the agency re-evaluated all initial proposals utilizing the new SET2 team. Id. Fourth, the agency informed all offerors that it would consider neither Hopper Systems’ revised proposal nor information that it received in discussions with Hopper Systems. Id. Finally, the agency established an ethical firewall to ensure that SET2 could not access Hopper’s revised proposal or information it had received in discussions. Id. All steps taken in the agency’s corrective action served to preserve the integrity of the procurement.

In addition to addressing El United’s concerns, the agency’s corrective action also implicated three of the considerations recognized by the Court of Federal Claims as factors that agencies may consider when crafting reasonable corrective action. First, the agency considered the timeline of the procurement, which had already been delayed by El United’s GAO protest and risked further delays due to continued litigation. Like in PAE Applied Technologies, here the agency took corrective action that was reasonable and directly addressed the concerns at issue but limited the corrective action due to external time constraints. See PAE Applied Techs., 154 Fed. Cl. at 524, 526. Because the object of the procurement is a contract for environmental remediation services that is time-sensitive, the agency decided against corrective action that would draw out the procurement unnecessarily, such as holding discussions, while still taking appropriate corrective action to target the issues raised by El United in its GAO protest.

Second, the agency corrective action complied with the terms of solicitation. Like in Jacobs Technology, where the agency’s corrective action resulted in a fairer re-evaluation of proposals by excluding information from certain offerors that was mistakenly considered, the corrective action in this case ensured that evaluation and proposal selection took place in a manner consistent with the terms of the solicitation.

Third, the agency’s corrective action was well documented in the administrative record by SSA Mayfield. Like the administrative record in Novak Birch, the record in this case is clear that the agency initiated its corrective action as a direct result of El United’s GAO protest. APPX 25. As such, all steps within the corrective action were targeted towards eliminating the case of the protest—SET1’s alleged unequal evaluation of El United compared to Hopper Systems. This alone satisfies the rational basis requirement for “a coherent and reasonable explanation of [the agency’s] discretion . . . .” Centech Grp., 554 F.3d at 1037 (quoting Impresa, 238 F.3d at 1332–33).

Even if this Court determines that the removal of SSA Mayfield from the procurement would have also constituted a reasonable agency corrective action or agrees with El United that the agency should have re-opened discussions with both offerors, it may not find the corrective action at issue unreasonable solely because other corrective actions may, too, have been reasonable. See Dell Fed. Sys., 906 F.3d at 998–99. As recently as 2021, the Court of Federal Claims has sustained agency corrective actions even where other, fuller corrective actions existed. In PAE Applied Technologies, the Court of Federal Claims declined to overturn the Navy’s corrective action at issue (allowing only partial proposal revisions instead of revisions to entire proposals), even though it expressed that allowing whole proposal revisions may be more expedient in the long run. See PAE Applied Techs.,154 Fed. Cl. at 524. As such, even if this Court finds either of El United’s proposed, alternative corrective actions reasonable, this Court should still find the corrective action taken by the agency to be reasonable.

Conclusion

For the foregoing reasons, this Court should affirm the decision of the Court of Federal Claims that El United waived its right to protest under the Blue & Gold waiver rule and that the corrective action taken by the agency was reasonable.

Certificate of Compliance

Pursuant to Fed. R. App. P. 32(a)(7) and Federal Circuit Rule 32(b), the undersigned certifies that the word processing software used to prepare this brief indicates that there are a total of 5921 words, excluding the portions of this brief identified by the rules. The brief complies with the typeface requirements and type style requirements of Fed. R. App. P. 32(a)(5) and has been prepared using Times New Roman font, proportionally spaced typeface.

/s/ Katharine (Katie) Toledo
/s/ Bailey McHale

Certificate of Service

I hereby certify that on Sunday, March 12, 2023, a copy of the foregoing Brief for Defendant-Appellee United States was electronically filed with the Clerk of the Court for the United States Court of Appeals for the Federal Circuit using the Court’s CM/ECF system.

/s/ Katharine (Katie) Toledo
Counsel for Appellee

/s/ Bailey McHale
Counsel for Appellee