           In the United States Court of Federal Claims
                                        BID PROTEST
                           Nos. 17-452C & 17-455C (Consolidated)
                  (Filed Under Seal: June 30, 2017 | Reissued: July 24, 2017)*

                                         )           Keywords: Bid Protest; 28 U.S.C. § 1491;
    XPO LOGISTICS WORLDWIDE              )           Corrective Action; Past Performance;
    GOVERNMENT SERVICES, LLC,            )           Unbalanced Pricing; Best-Value
                                         )           Determination; Waiver; IDIQ Contract;
                    Plaintiff,           )           Total Evaluated Price.
                                         )
         v.                              )
                                         )
    THE UNITED STATES OF AMERICA,        )
                                         )
                    Defendant,           )
                                         )
         and                             )
                                         )
    CROWLEY LOGISTICS, INC.,             )
                                         )
                   Defendant-Intervenor. )
                                         )

Frederick W. Claybrook, Jr., Claybrook LLC, Washington, DC, for Plaintiff. Daniel R. Forman,
Mark A. Ries, James G. Peyster, and Charles Baek, Crowell & Moring LLP, Washington, DC,
Of Counsel.

Christopher L. Harlow, Trial Attorney, U.S. Department of Justice, Civil Division, Commercial
Litigation Branch, for Defendant, with whom were Patricia M. McCarthy, Assistant Director,
Robert E. Kirschman, Jr., Director, and Chad A. Readler, Acting Assistant Attorney General.
Robert D. Bowers, Willie J. McAlister, and Peter B. Ries, Attorney-Advisors, Offices of the Staff
Judge Advocate, United States Transportation Command, and Michael G. McCormack, Trial
Attorney, Air Force Legal Operations Agency, United States Air Force, Of Counsel.

Kara M. Sacilotto, Wiley Rein LLP, Washington, DC, for Defendant-Intervenor. Rand L. Allen,
Brian G. Walsh, Gary S. Ward, and Cara L. Lasley, Wiley Rein LLP, Washington, DC, Of
Counsel.




*
  This Opinion was originally issued under seal on June 30, 2017, and the parties were given the
opportunity to request redactions. In light of the suggested redactions, the opinion is now
reissued, with redactions of potentially sensitive information indicated by brackets.
                                   OPINION AND ORDER

KAPLAN, Judge.

       These consolidated bid protests arise out of a solicitation for a contract to provide
transportation services issued by the Department of Defense, through the United States
Transportation Command (USTRANSCOM or “the agency”). The protests were filed after the
agency decided to take certain corrective action recommended by the Government
Accountability Office (GAO), in response to a bid protest filed there by XPO Logistics
Worldwide Government Services, LLC (XPO). GAO had recommended that USTRANSCOM
reconsider its award of the contract to Crowley Logistics, Inc. (Crowley) because of what GAO
considered a flawed analysis of Crowley’s past performance references.

        After the agency announced that it intended to follow GAO’s recommendation by re-
evaluating both offerors’ past performance references and issuing a new source selection
decision, both XPO and Crowley filed bid protests with this Court. In its protest, XPO alleges
that the corrective action the agency has elected to take on the basis of GAO’s recommendation
is not broad enough because it does not address other errors the agency allegedly committed in
its award determination. Crowley claims, on the other hand, that the agency’s decision to take
corrective action is unreasonable because GAO’s conclusion that the original award decision was
flawed was itself arbitrary and capricious.

       Currently before the Court are the parties’ cross-motions for judgment on the
administrative record with respect to both protests, as well as the government’s motion to
dismiss Crowley’s complaint. For the reasons set forth below, the government’s motion to
dismiss is DENIED. XPO’s motion for judgment on the administrative record in case number
17-452 is DENIED, and the government’s and Crowley’s cross-motions are GRANTED. In
case number 17-455, Crowley’s motion for judgment on the administrative record is DENIED,
and the government’s and XPO’s cross-motions are GRANTED.

                                       BACKGROUND

I.     The Solicitation

        USTRANSCOM “is a unified, functional combatant command which provides support to
the eight other US combatant commands, the military services, defense agencies, and other
government organizations.” Admin. R. (AR) Tab 6 at 151. On March 25, 2015, it issued
solicitation number HTC711-15-R-R003 (RFP or “the Solicitation”) seeking proposals for an
indefinite-delivery, indefinite-quantity contract to provide services throughout the continental
United States as well as in Alaska and Canada in connection with the Department of Defense
Freight Transportation Services (DFTS) program. Id. at 87, 150. These “transportation
coordination services” would be provided to both the Defense Logistics Agency and the Defense
Contract Management Agency, “from receipt of the shipment request through final payment for
services rendered,” including “management of shipments” and “[t]ransportation support.” Id. at
151–52. Additionally, USTRANSCOM noted that “[o]ther government agencies [could] require
these services over the course of the contract.” Id. at 152. The DFTS contract would be for a
two-year base period with five one-year options. Id. at 89–96.



                                               2
       A.      The Solicitation’s Instructions

        In the Solicitation’s instructions, USTRANSCOM directed offerors to submit their
proposals in five volumes, covering the following topics: 1) Corporate Experience; 2) Business
Proposal; 3) Technical Capability; 4) Past Performance; and 5) Price. Id. Tab 20 at 9485.1 The
parties’ disputes in these bid protests relate primarily to the agency’s evaluation of the past
performance and price volumes.

        For the past performance volume, USTRANSCOM instructed offerors that they were to
“provide past performance information for all contracts/efforts submitted in RFP Attachment
11,” a form which was also used to document “corporate experience.” Id. at 9492. Attachment 11
was to contain all of an offeror’s “most relevant contracts and/or efforts within the past three (3)
years.” Id. at 9485. For each contract, offerors were to explain how their performance related to
the tasks required by the DFTS program in “scope, magnitude, and complexity.” Id. at 9485–86.
Offerors were also instructed to request that each of the parties with whom they had contracted
complete past performance questionnaires and return them to USTRANSCOM for evaluation. Id.

         With respect to pricing, the Solicitation set forth contract line items (CLINs) for the
different transportation services that the contractor might be required to perform. Id. at 9451–61.
The primary CLIN category was CLIN X001, the line item for transportation services for each
year of the contract. See id. The agency instructed offerors that they were to “provide individual
transportation rates [for this CLIN] in Attachment 2 – Rate Table.” E.g., id. at 9451. Attachment
2, in turn, consisted of multiple rate tables containing tens of thousands of sub-CLINs (SLINs),
which were each based upon the geographical origin and destination of a shipment, the
equipment type required for a shipment, and the weight of the shipment, as well as the required
timeframe for delivery. See id. at 10101–08; see also id. Tabs 20A–20B (pricing sheet
attachments).

       B.      Evaluation Criteria

        The Solicitation provided that in determining the contract award, “[e]xpanded tradeoff
procedures [would] be utilized in accordance with FAR 15.101-1 and DoD Source Selection
Procedures.” Id. Tab 20 at 9494. USTRANSCOM intended to award the contract to the offeror
who was “deemed responsible,” whose proposal “conform[ed] to all required terms and
conditions” of the Solicitation, and whose proposal “represent[ed the] best value to the
Government, price and other factors considered.” Id. In addition, the Solicitation provided that
the agency would “not pay a price premium that it consider[ed] to be disproportionate to the
benefits associated with the proposed margin of service superiority.” Id.

       Pursuant to the terms of the Solicitation, the agency would separately evaluate each
proposal volume. See id. Offerors’ corporate experience and business proposal submissions

1
  This citation and the Court’s subsequent citations for the Solicitation are to the “conformed”
version following USTRANSCOM’s issuance of thirteen amendments to the Solicitation. AR
Tab 20. According to the administrative record’s table of contents, the conformed version was
issued July 9, 2015.



                                                 3
would be rated on an acceptable/unacceptable basis. Id. Technical capability would be rated
based on certain subfactors, using a tiered adjectival rating scale. See id. at 9496–501. As
discussed in more detail below, past performance was to be evaluated to determine its recency
and relevancy and to assess performance confidence, with adjectival ratings assigned to the latter
two factors. Id. at 9501–02. Technical capability was more important than past performance, and
“[a]ll rated evaluation factors (Technical Capability and Past Performance), when combined,
[were] approximately equal to price.” Id. at 9494.

       For past performance, the agency stated that it would “determine the recency and the
relevancy of each past performance effort being evaluated.” Id. at 9501 (emphasis in original).
Further, the Solicitation contained a chart setting forth the standards that would determine the
degree of relevancy that the agency would assign to each past performance effort:




Id.

        The RFP provided that after the agency “determined the recency and relevancy of each
past performance effort,” it would assign an “overall Past Performance Confidence Assessment
rating[] . . . to each offeror.” Id. (emphasis in original). The Confidence Assessment ratings were,
in descending order: substantial confidence (i.e., a “high expectation that the offeror will
successfully perform the required effort”); satisfactory confidence (“a reasonable expectation
that the offeror will successfully perform the required effort”); limited confidence (“a low
expectation that the offeror will successfully perform the required effort”); and no confidence
(“no expectation that the offeror will be able to successfully perform the required effort”). Id. at
9501–02.2

        With respect to the price volume, the Solicitation provided that “[p]rice [would] be
considered in determining the best value offeror” and that it would “be evaluated for
completeness and reasonableness.” Id. at 9502. Specifically, USTRANSCOM would evaluate
each offeror’s “proposed pricing . . . using one or more of the techniques set forth in FAR
15.404-1(b)(2) to determine [whether] prices [are] fair and reasonable.” Id. “In addition,” the
agency advised, “a Total Evaluated Price (TEP) [would] be calculated by totaling the extended
prices for all proposed pricing of CLIN X001 (Transportation) in the Rate Tables (Attachments



2
  The Solicitation also provided a neutral rating of “unknown confidence” where “the offeror’s
performance record [was] so sparse that no meaningful confidence assessment rating [could] be
reasonably assigned.” AR Tab 20 at 9502.



                                                 4
2A and 2B).” Id.3 The TEP included both the base years and option years in its calculation. See
id. An offeror’s TEP would thus “reflect[] the proposed transportation costs of CLIN X001 for
all anticipated performance periods . . . based on projected annual escalations.” Id. Finally, the
Solicitation provided that “the TEP [would] be considered in making the contract award
decision.” Id.

II.      The First Contract Award

        USTRANSCOM received four offers in response to the Solicitation, including proposals
from both Crowley and XPO’s predecessor, Menlo Worldwide Government Services, LLC. Id.
Tab 57 at 11054.4 On December 22, 2015, the Source Selection Authority (SSA) determined that
“GENCO Infrastructure Solutions, Inc. represent[ed] the best overall value to the Government.”
Id. at 11060. He explained that GENCO’s proposal had “the most favorable overall technical
approach, provide[d] the second lowest overall risk . . . , and the second highest past
performance confidence assessment rating.” Id. at 11059. He further noted that “GENCO offered
the second lowest TEP” and that, although Crowley’s TEP was lower, Crowley “had an
Unknown past performance confidence assessment rating.” Id. The SSA also concluded that
“[t]he benefits associated with [] GENCO’s proposed margin of service superiority merit[] the
associated price premium,” and that Crowley’s lower TEP was “not necessarily advantageous . . .
considering the unknown risk the offeror will be unable to perform this effort” and “the lower
technical rating . . . and higher technical risk rating under the Operational Support subfactor.” Id.

         On December 30, 2015, the government awarded the contract to GENCO. Id. Tab 58 at
11061.

III.     The First GAO Protest

        After the agency awarded the contract to GENCO, both XPO and Crowley filed bid
protests with GAO. See id. Tabs 67, 74. XPO withdrew its protest before GAO acted on it. Id.
Tab 72 at 11941–42. Crowley pursued its protest, contending, among other things, that the
discussions that the agency held with it were not meaningful because the agency did not raise
certain concerns that it harbored regarding alleged performance risks in Crowley’s proposal. Id.
Tab 74 at 11950.

     On April 19, 2016, GAO sustained Crowley’s protest. Id. at 11946. It recommended that
USTRANSCOM “reopen the competition, conduct meaningful discussions with the competitive



3
  The “extended” prices were calculated by multiplying the offeror’s proposed unit price for each
line item by the agency’s estimated quantity for that item. See AR Tab 20 at 10101; see also id.
Tabs 20A–B.
4
  During the course of the competition, Menlo’s parent company was purchased by XPO
Logistics, Inc., the parent company of Plaintiff XPO. AR Tab 126 at 12576 n.1. As a result,
beginning with the GAO protest in December 2016, Menlo began referring to itself as XPO, see
id., and the Court will use XPO to refer to the Menlo/XPO offeror throughout this opinion.



                                                 5
range offerors, request and evaluate revised proposals, and make a new source selection.” See id.
at 11957.

IV.    Corrective Action Based on the First GAO Decision

        USTRANSCOM followed GAO’s recommendation. It reopened discussions with all
offerors in the competitive range and informed offerors that they could submit proposal
revisions, which the agency would evaluate and use as the basis for a new award decision. See
id. Tab 88 at 11982. In the meantime, GENCO, the previous awardee, withdrew from the
competition. Id. Tab 86 at 11980. As a result, only Crowley and XPO remained in the
competitive range, and both submitted revised proposals on June 15, 2016. See id. Tab 116 at
12273; see also id. Tab 120 at 12442–43.

       A.      The Agency’s Revised Price Evaluation

        Upon receipt of the offerors’ revised price proposals, USTRANSCOM’s contracting
officer (CO) prepared a price evaluation report. See id. Tab 116 at 12273, 12319. In it, the CO
noted that, in accordance with the Solicitation, he had calculated each offeror’s TEP by using the
extended prices the offerors had submitted for each proposed SLIN under CLIN X001. Id. at
12273. He stated that “[w]here available, the historical volume was utilized as a multiplier to the
rate provided by the Offeror across all lanes by all three tiers.” Id. “Where historical volumes
were unknown,” however, “a volume of either four (two for Tier 1, one for Tier 2, and one for
Tier 3) for truckload shipments or a volume of the minimum weight within weight band limits
for LTL and TD (e.g. a weight of 4001 pounds is used for a weight band between 4001-5000
pounds) [was] used as the multiplier.” Id.

        The CO explained that the TEP calculation method “was developed to ensure that all
potential lanes for use under the requirement would be evaluated and [that] the likelihood of
unbalanced pricing would be diminished versus a scenario-based evaluation method.” Id. at
12274. A “scenario-based evaluation would be problematic,” he noted, because “use of
historically used lanes would not be representative of the new acquisition as lanes change
frequently as there is much fluctuation in shipments.” Id. “This [was] evident in the Independent
Government Cost Estimate,” he observed, “as it was based on historical spend of customers, and
potential customers, versus historical by lane spending.”5 Id.

         The CO then set out his analyses of the prices that both Crowley and XPO had submitted
in their initial proposals and in each of their proposal revisions. See id. In doing these analyses,
he utilized FAR 15.404-1(b)(2)(i), which entailed “[c]omparison of proposed prices received in
response to the solicitation.” Id. Noting that the prices of the previous awardee, GENCO, had

5
  The agency’s independent government cost estimate (IGCE) used historical data from a similar
predecessor program as part of its calculations, and included the possibility of additional military
services opting into the contract during later years. See AR Tab 3 at 29. USTRANSCOM
estimated a total contract value, including all option years, of $2,656,233,390.80. Id. at 31.
Subsequently, the agency set a contract maximum of $3,000,000,000 in the RFP. Id. Tab 20 at
9461.



                                                 6
been “determined fair and reasonable,” the CO compared both Crowley’s and XPO’s proposed
prices to GENCO’s and to one another’s. Id. at 12275. Doing so, he asserted, “assisted in
providing a solidified average unit rate and standard deviation.” Id. Further, the CO compared
the offerors’ prices at both the total SLIN level and at the individual unit price level to
“detect[] . . . possible unbalanced pricing.” Id. Where a unit price, average unit price, or total
SLIN price was higher than the average price plus one standard deviation, the CO rated the price
“high.” Id. If any of those were two standard deviations or more above the average, the price was
rated “significantly high.” Id.

        The CO first noted that based “on the initial pricing submitted by both offerors after re-
opening discussions, it was determined necessary to send each Offeror Evaluation Notices (ENs)
to address rates identified as high or significantly high.” Id. at 12302. But based on Crowley’s
revisions and certain cost and pricing data it submitted, the CO found that Crowley’s “revised
price changes give[] the Government confidence that Crowley presently has a clear
understanding of the requirement.” Id. at 12305. As a result, he concluded that “all of Crowley’s
rates can be determined fair and reasonable based on adequate price competition and Other Than
Certified Cost or Pricing Data.” AR Tab 116 at 12305. Similarly, after XPO responded to its EN,
the CO determined that XPO’s prices were “fair and reasonable based on adequate price
competition.” Id. at 12308.6

        The CO then calculated each offeror’s final TEP. Id. at 12314–15. Crowley’s TEP was
$7,116,365,688, while XPO’s was $7,741,505,204. Id. XPO’s TEP was thus 4.1% higher than
the average, while Crowley’s was 4.3% lower than the average. Id.7 The CO observed that
following final proposal revisions, Crowley had “13,412 individual rates” which were
“considered high,” representing “2.85% of the total number of unit prices.” Id. at 12319. XPO
had 5,672 unit prices which were considered high, representing 1.2% of the total number of unit
prices. Id. The CO concluded that “all unit prices and TEPs are determined fair and reasonable
based on adequate price competition and there remains no indication of unbalanced pricing.” Id.

       B.      Crowley’s Past Performance Evaluation

        On November 8, 2016, the agency’s Past Performance Evaluation Team (PPET) prepared
an addendum to the agency’s previous evaluation of Crowley’s past performance, based upon
revisions made during the reopened competition. Id. Tab 119 at 12407, 12441. The addendum
included a narrative about each of Crowley’s past performance references for which
USTRANSCOM received a past performance questionnaire. Id. at 12408–22.


6
  Both Crowley and XPO made slight revisions to their prices in their final proposal revisions.
See AR Tab 116 at 12309, 12311. This did not alter the CO’s conclusions regarding the
reasonableness of either offeror’s pricing. See id. at 12309–14.
7
 Although not repeated in this final TEP analysis, when the CO calculated the offerors’ TEPs
prior to final proposal revisions, he observed that the “differences in TEPs” were “large in terms
of actual dollars,” but that “the relative dispersion of the TEPs indicates competitive proposals.”
AR Tab 116 at 12274, 12309.



                                                 7
        The narratives followed a standard format. Each one began with a quotation regarding the
type and number of services or transactions encompassed by the contract, drawn from the past
performance questionnaire. E.g., id. at 12408. The narratives then set forth the agency’s
determination whether the particular reference was “recent” and identified the total value of the
contract. Id. Next, each narrative included quotations from the questionnaire regarding the
quality of Crowley’s past performance, an adjectival quality rating assigned by the commercial
entity, and a statement whether the respondent would award a contract to Crowley in the future.
Id.

        Finally, each narrative concluded with a standard sentence that assigned an adjectival
relevancy rating to the reference discussed. Id. Sixteen of the narratives concluded that the
reference “was determined Somewhat Relevant as the effort involved some of the scope and
magnitude of effort and complexities as this solicitation requires.” Id. at 12408–36. The
remaining narratives concluded with a sentence stating that the reference “was determined Not
Relevant as the effort involved little of the scope and magnitude of effort and complexities as
this solicitation requires.” See id.

        The PPET next assigned a confidence assessment rating to Crowley based on Crowley’s
sixteen “Somewhat Relevant” references. Id. at 12440–41. It noted that it had considered all of
these references because they showed “that the Offeror has successfully performed transportation
coordination services to include transportation support and management of shipments via
ground, specialized equipment, air freight, and time-definite service level shipments.” Id. at
12440. The PPET also explained that:

                The Somewhat Relevant references were rated individually; more,
                when all of the Somewhat Relevant references were considered
                together, they reflect that the Offeror has successfully performed
                transportation and coordination services via ground, specialized
                equipment, air freight, and time-definite service level which include
                some of the scope and magnitude of effort and complexities this
                solicitation requires.

Id. at 12441.

       The PPET concluded that:

                In terms of scope and complexity, the Somewhat Relevant
                references combined are similar to the Defense Freight
                Transportation Services (DFTS) requirement. In terms of
                magnitude, the Somewhat Relevant references pertaining to
                specialized equipment, air freight, and time-definite service level
                combined are similar to the DFTS requirement. Although, the
                Somewhat Relevant references pertaining to ground truckload and
                less-than-truck transportation combined are not as similar to the
                DFTS requirement in terms of magnitude, the experience is
                sufficient to provide the Government confidence the Offeror can
                perform those types of services.


                                                 8
Id. Accordingly, the agency assigned Crowley a rating of Satisfactory Confidence based on its
“reasonable expectation that the Offeror [would] successfully perform the required effort.” Id.

       C.      The Source Selection Evaluation Board Report

       On November 7, 2016, the Source Selection Evaluation Board (SSEB) issued its report,
which included an evaluation of the revisions submitted by XPO and Crowley during the
reopened competition. See id. Tab 117 at 12383–85.

        The SSEB reaffirmed the Substantial Confidence assessment rating it had assigned to
XPO in its initial report. Id. at 12388. In that report, the SSEB had concluded that XPO had
thirty-three past performance references that were either somewhat relevant, relevant, or very
relevant. Id. Tab 55 at 11027. The SSEB rated these references from marginal to exceptional in
terms of quality. Id. XPO’s Substantial Confidence rating was based on the agency’s “high
expectation that the Offeror [would] successfully perform the required effort.” Id.

       With respect to Crowley’s past performance, the SSEB stated that:

               In establishing the overall confidence assessment rating for
               Crowley, the Government gave more consideration to the references
               considered Somewhat Relevant as they reflect the Offeror has
               successfully performed transportation coordination services to
               include transportation support and management of shipments via
               ground, specialized equipment, air freight, and time-definite service
               level shipments within a single contract.

Id. Tab 117 at 12387.

        The SSEB further stated that “when all of the Somewhat Relevant references are
considered together, they reflect that the Offeror has successfully performed transportation and
coordination services via ground, specialized equipment, air freight, and time-definite service
level as required in this solicitation.” Id. It observed that all of Crowley’s somewhat relevant past
performance references rated Crowley’s performance as exceptional or very good. Id.
Accordingly, it concurred in the PPET’s Satisfactory Confidence rating, based upon “a
reasonable expectation that the Offeror will successfully perform the required effort.” Id.

        The SSEB also agreed with the CO’s conclusions that both offerors’ price proposals were
“fair and reasonable based on competition.” Id. at 12390. Additionally, it noted that XPO’s “past
performance confidence assessment rating [was] more favorable than Crowley’s rating,” but that
“Crowley’s [TEP was] more favorable than [XPO’s].” Id. at 12395–96.

       D.      The Source Selection Advisory Council Comparative Analysis

       On November 8, 2016, the Source Selection Advisory Council (SSAC) prepared an
updated comparative analysis. Id. Tab 118. It reviewed the “underlying evaluation documents”
and “concur[red] with [their] findings.” Id. at 12398. The SSAC also “verified [that] the SSEB’s
evaluation followed the solicitation evaluation criteria and that the ratings were consistently
applied.” Id. It then prepared the following table presenting the final evaluation results:


                                                 9
Id.

        The SSAC also performed a comparative analysis and integrated assessment of the two
proposals. Id. at 12399–405. It used the evaluation factors and subfactors set out in the
Solicitation and discussed the specific strengths of each proposal within each technical subfactor.
E.g., id. at 12400 (noting that for the IT/management subfactor, Crowley’s “first strength was for
a proposed 24/7 support line and tools which will facilitate timely resolution of customer
inquiries and issues” and “exceed[ed] the PWS requirement”). The SSAC concluded that for
subfactor one, there was “no discernible difference in the risk or quality of the proposed
technical approaches.” Id. at 12401. For subfactor two, the SSAC stated that “[w]hile both
Offerors’ approaches contain multiple strengths with benefits, [XPO’s] approach is considered
more favorable in that the Offeror provides an implementation plan utilizing a transportation
management system that is currently in use by the Government and requires minimal revisions to
conform to the DFTS requirement.” Id. at 12402. With respect to the third subfactor, the SSAC
noted that “Crowley’s approach is considered more favorable in that the Offeror is proposing to
use [***].” Id. at 12403–04. Finally, for the fourth subfactor, the SSAC reported that there was
no discernible difference between XPO and Crowley’s proposals. Id. at 12404.

         The SSAC did not discuss past performance other than to note that XPO’s Substantial
Confidence rating was higher and thus more favorable than Crowley’s Satisfactory Confidence
rating. Id. at 12405. It then wrote the following with respect to its overall tradeoff
recommendation:

               It is our recommendation that the cost difference of approximately
               $625M, or 8.4%, is disproportionate to the benefit associated with
               [XPO’s] lower risk rating in Subfactor 2 and more favorable past
               performance rating. Although Crowley has a higher risk rating in
               Subfactor 2, the risk associated with Implementation is not enough
               to offset the price difference. It is recognized that [XPO’s] past
               performance assessment rating of Substantial Confidence is higher
               than Crowley’s assessment rating of Satisfactory Confidence;
               however, the Government has a reasonable expectation Crowley
               will successfully perform the required effort. The Government will
               not pay a price premium that it considers disproportionate to the
               benefits associated with the proposed margin of service superiority,
               and overall, it is our recommendation that it is not beneficial to pay
               a price premium for [XPO’s] better past performance rating of


                                                10
               Substantial Confidence or Low Risk rating for the subfactor of
               Implementation.

Id. The SSAC concluded that “Crowley’s proposal [was] the best value to the Government.” Id.
at 12398.

V.     The New Source Selection Decision and Contract Award

        On November 9, 2016, the SSA authored a new Source Selection Decision Document, in
which he set forth his determination that Crowley’s proposal “provides the best overall value to
satisfy the Government’s requirement.” Id. Tab 120 at 12442. He based his decision on his
“integrated assessment of proposals submitted in response to the solicitation,” the SSEB and
SSAC reports (with which he explicitly concurred), and “the capabilities of the Offerors to
successfully fulfill the Government’s requirement.” Id. at 12442, 12444.

       On November 22, 2016, the agency awarded the contract to Crowley. Id. Tabs 121–122.

VI.    GAO’s Second Decision

        On December 5, 2016, XPO filed a protest with GAO. Id. Tab 126. It asserted that
USTRANSCOM’s award to Crowley should be set aside because 1) the agency’s evaluation of
XPO’s proposal “under the technical capability factor was unreasonable and contrary to the
RFP”; 2) the agency “unreasonably assigned Crowley a ‘Low’ technical risk rating under
subfactor 1” of the technical evaluation; and 3) the agency’s “best value analysis was
unreasonable and incomplete.” Id. at 12577–96. On January 19, 2017, XPO supplemented its
protest with two additional grounds, asserting that USTRANSCOM “conducted an unreasonable
assessment of unbalanced pricing in the Crowley price proposal” and that its “evaluation of
Crowley’s past performance violated the evaluation criteria.” Id. Tab 139 at 12831, 12833.

        On March 14, 2017, GAO issued a decision sustaining in part and dismissing in part
XPO’s protest. Id. Tab 148 at 13003–04. GAO noted that the record provided “no basis on which
to sustain [XPO’s] protest” as to the agency’s evaluation of XPO’s own proposal. Id. at 13008
n.8. Further, GAO found untimely XPO’s allegations that Crowley’s prices were materially
unbalanced. Id. at 13008. XPO had argued before GAO (as it does here) that Crowley’s prices
for the [***] SLINs were understated, while its prices for the [***] SLINs were overstated. Id. at
13009. GAO observed that the premise of XPO’s unbalanced pricing argument was that the
quantity estimates the government used in the Solicitation were not reasonably accurate and that
those estimates “led to a situation where offerors could ‘game’ the solicitation’s pricing structure
by proposing unbalanced pricing.” Id. at 13010. GAO thus found the argument untimely because
“the estimates and the way they were to be applied in the price evaluation were evident from the
solicitation” such that XPO waived any argument regarding their accuracy by not raising it prior
to submitting a proposal. Id.

        On the other hand, GAO sustained XPO’s allegations as to USTRANSCOM’s evaluation
of Crowley’s past performance. Id. at 13008. XPO had contended that “Crowley’s past efforts
were substantially smaller in magnitude than the effort required under the solicitation,” noting
that each of the sixteen Crowley references that the agency characterized as somewhat relevant
were “miniscule” in dollar value when measured as a percentage of the total DFTS contract


                                                11
value of $3 billion. Id. at 13011. In response, the agency argued that GAO should instead look at
the “average annual value” of each performance reference and compare that value to “the
maximum value for the transportation CLIN for the 2-year base period of the contract awarded to
Crowley,” which was $105 million. Id. at 13012.

        GAO, however, rejected the agency’s arguments for two reasons. First, GAO found that
“it [was] not clear from the contemporaneous record how the agency determined that the
magnitude of Crowley’s past efforts supported the ratings of somewhat relevant.” Id. at 13013–
14. GAO noted that the agency’s past performance evaluation report identified only “the number
of monthly shipping transactions, the period of performance, and an approximate total value”
“for most of the past efforts at issue.” Id. at 13014. GAO found no evidence that the agency had
in fact “calculated an average annual value for the efforts in order to make an ‘apples-to-apples’
comparison of the efforts’ magnitude relative to the magnitude of the solicitation.” Id. Moreover,
according to GAO, there was “nothing in Crowley’s past performance evaluation report to reflect
what benchmarks might have been used to assess whether Crowley’s past efforts met the criteria
for the various relevancy ratings defined in the solicitation.” Id.

         Second, and in any event, GAO concluded that “the agency’s selection of only the
relatively low-value base period of the contract as awarded to Crowley unreasonably distort[ed]
the comparison of the magnitude of Crowley’s past efforts to the magnitude of the solicitation.”
Id. It agreed that “where the period of performance of an offeror’s past effort materially differs
from the period of performance in a solicitation, some method of making an ‘apples-to-apples’
comparison of the magnitude of the two efforts is necessary.” Id. But it rejected the argument
that the agency only consider the two-year base period, rather than the value of the entire
contract. See id. GAO noted that the IGCE and the value of Crowley’s contract as awarded both
showed that “the value of each option year [was] significantly higher than the value of the base
period.” Id. at 13015. It concluded that because the record reflected that the agency itself
“anticipated the value of the option years to be significantly higher than the value of the base
period” and included option year pricing in calculating offerors’ TEPs, using “the significantly
lower-valued transportation CLIN for the base period . . . [was] an unreasonable benchmark for
assessing the relevance of the magnitude of Crowley’s past efforts.” Id.

       Based on this conclusion, GAO recommended “that the agency reevaluate Crowley’s past
performance in a manner that is reasonable and consistent with both the solicitation and [its]
decision, and then make a new source selection determination.” Id. at 13017. “Alternatively,”
GAO recommended, “if the agency determines that the solicitation’s evaluation criteria do not
reasonably reflect its needs . . . the agency [should] amend the solicitation, engage in discussion
with offerors, and request revised proposals.” Id.8




8
  GAO stated that “[b]ecause a new best-value determination [was] necessary to implement [its]
recommendation . . . [it would] not address XPO’s allegations regarding the best-value tradeoff
analysis.” AR Tab 148 at 13017.



                                                12
VII.   This Action

       On March 23, 2017, the CO announced that the agency was “taking corrective action in
accord with the GAO decision dated March 14, 2017.” Id. Tab 176 at 15860. Six days later, on
March 29, 2017, XPO filed a complaint in this court (No. 17-452), which was followed later in
the day by a complaint filed by Crowley (No. 17-455). On March 30, 2017, the Court granted
XPO’s and Crowley’s motions to intervene in the other’s protest. Orders, ECF Nos. 11, 21. The
Court also consolidated the cases, designating XPO’s protest as the lead case. See Order, ECF
No. 14. On April 10, 2017, XPO filed an amended complaint. ECF No. 28.

         XPO’s amended complaint includes five counts: 1) that USTRANSCOM’s unbalanced
pricing evaluation failed to comply with the FAR and that the agency unreasonably concluded
that Crowley’s pricing was not unbalanced, Am. Compl. ¶¶ 71–74; 2) that the agency’s
corrective action plan is “arbitrary, capricious, and unlawful in scope” because “it fails to
remediate a violation of law” by failing to address Crowley’s unbalanced pricing, id. ¶¶ 80–81;
3) that the agency performed an unreasonable best value assessment because it relied exclusively
on the TEPs in evaluating offerors’ price proposals, id. ¶¶ 86–88; 4) that the agency failed to
appropriately document its best value tradeoff decision and relied upon adjectival ratings alone,
id. ¶¶ 91–99; and 5) that the agency engaged in misleading discussions by altering its
interpretation of best value and how it conducted the price evaluation, id. ¶¶ 103–07.

        Crowley asserts one cause of action in its complaint. See Crowley Compl. at 17–20. It
alleges that the agency’s decision to take any corrective action at all is arbitrary and capricious
because the underlying GAO decision is itself arbitrary and capricious. Id. ¶¶ 58–62.

        On April 24, 2017, both XPO and Crowley moved for judgment on the administrative
record in their respective protests. ECF Nos. 37, 39. On May 8, 2017, the government filed a
cross-motion for judgment on the administrative record with respect to each protest, and also
moved to dismiss Crowley’s protest for lack of jurisdiction. ECF No. 41. Both XPO and Crowley
cross-moved for judgment on the administrative record in the other’s protest. ECF Nos. 42–43.
The Court held oral argument on all pending motions on June 2, 2017. See Order, ECF No. 27.

                                          DISCUSSION

I.     Subject Matter Jurisdiction

        The Court of Federal Claims has jurisdiction over bid protests in accordance with the
Tucker Act, 28 U.S.C. § 1491, as amended by the Administrative Dispute Resolution Act of
1996 § 12, 28 U.S.C. § 1491(b). Specifically, the Court has the authority “to render judgment on
an action by an interested party objecting to a solicitation by a Federal agency for bids or
proposals for a proposed contract or to a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection with a procurement or a proposed
procurement.” 28 U.S.C. § 1491(b)(1); see also Sys. Application & Techs., Inc. v. United States,
691 F.3d 1374, 1380–81 (Fed. Cir. 2012) (observing that § 1491(b)(1) “grants jurisdiction over
objections to a solicitation, objections to a proposed award, objections to an award, and
objections related to a statutory or regulatory violation so long as these objections are in
connection with a procurement or proposed procurement”).



                                                 13
       A.      Standing

        To possess standing to bring a bid protest, a plaintiff must be an “interested party”—i.e.,
an actual or prospective bidder (or offeror) who possesses a direct economic interest in the
procurement. Sys. Application & Techs., Inc., 691 F.3d at 1382 (citing Weeks Marine, Inc. v.
United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009)); see also Orion Tech., Inc. v. United States,
704 F.3d 1344, 1348 (Fed. Cir. 2013). An offeror has a direct economic interest if it suffered a
competitive injury or prejudice as a result of an alleged error in the procurement process. Myers
Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1370 (Fed. Cir. 2002) (holding
that “prejudice (or injury) is a necessary element of standing”); see also Weeks Marine, Inc., 575
F.3d at 1359.

        In post-award protests, like this one, a plaintiff may demonstrate competitive injury or
prejudice by showing that it would have had a “substantial chance” of winning the award “but
for the alleged error in the procurement process.” Weeks Marine, Inc., 575 F.3d at 1359–62
(quoting Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.
2003)). In making the standing determination, the Court assumes well-pled allegations of error in
the complaint to be true. Square One Armoring Serv., Inc. v. United States, 123 Fed. Cl. 309,
323 (2015) (citing Digitalis Educ. Sols., Inc. v. United States, 97 Fed. Cl. 89, 94 (2011), aff’d,
664 F.3d 1380 (Fed. Cir. 2012)); see also Salmon Spawning & Recovery All. v. U.S. Customs
& Border Prot., 550 F.3d 1121, 1131–32 & n.9 (Fed. Cir. 2008) (citing Lujan v. Defs. of
Wildlife, 504 U.S. 555, 561 (1992)); Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672,
694–95 (2010) (noting that the showing of prejudice as an element of standing “turns entirely on
the impact that the alleged procurement errors had on a plaintiff’s prospects for award, taking the
allegations as true,” and distinguishing “allegational prejudice” required to establish standing
from the “prejudicial error” required to prevail on the merits).

        Both XPO and Crowley have standing to pursue the claims alleged in their complaints.
XPO, an actual offeror, alleges that the agency should have rejected Crowley’s offer because its
pricing was materially unbalanced. Am. Compl. ¶¶ 71–73. It also challenges the agency’s
reliance upon each offer’s TEP in making an award decision, alleging that the agency should
have instead considered the actual cost to the government of each offer, and that, if it had done
so, XPO would have had a price advantage over Crowley. Id. ¶¶ 86–88. Considering that XPO
and Crowley were the only two offerors within the competitive range and that price played a
significant role in the agency’s decision to award the contract to Crowley over XPO, these
allegations are sufficient to demonstrate that XPO had a substantial chance of securing the award
absent the errors it alleges.

        Crowley, the awardee, also has standing to press its claim that the agency should not have
implemented the corrective action GAO recommended. Thus, absent that alleged error, the
agency would not have set aside the award to Crowley. Therefore, taking its allegations as true
for purposes of the standing inquiry, Crowley has clearly demonstrated the requisite competitive
injury to be an interested party for purposes of the Court’s bid protest jurisdiction.




                                                14
       B.      The Government’s Motion to Dismiss

        The government seeks dismissal of Crowley’s protest on the grounds that it is moot or
premature. Def.’s Partial Mot. to Dismiss, Cross-Mot. for J. on the Admin. R., & Opp’n to Pl.’s
& Def.-Intervenor’s Mots. for J. on the Admin. R. (Def.’s Mot.) at 14, ECF No. 41. These
contentions lack merit. “In general, a claim must be dismissed as moot ‘when the issues
presented are no longer live or the parties lack a legally cognizable interest in the outcome.’”
Rothe Dev. Corp. v. Dep’t of Def., 413 F.3d 1327, 1331 (Fed. Cir. 2005) (quoting City of Erie v.
Pap’s A.M., 529 U.S. 277, 287 (2000)). “A claim is not ripe for judicial review when it is
contingent upon future events that may or may not occur.” Sys. Application & Techs., Inc., 691
F.3d at 1383 (citing Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580–81 (1985)).

        Crowley’s claim is neither moot nor unripe. Crowley challenges the reasonableness of the
agency’s decision to reopen a competition that Crowley had already won. If the Court agreed
with Crowley’s arguments, then it might enjoin the agency from taking the challenged corrective
action. Thus, the controversy is a live one in which Crowley has a cognizable interest. Further,
Crowley’s challenge to the agency’s decision is ripe for review because it is not contingent on
how the agency executes the corrective action, as the government claims. Def.’s Mot. at 15
(asserting that because Crowley challenges the “manner in which TRANSCOM may ultimately
carry out corrective action that has not yet been completed,” its challenge is not ripe for
decision). The gravamen of Crowley’s argument is that no corrective action at all should be
taken.

       Because Crowley is an interested party and its bid protest is neither moot nor unripe, the
Court has subject matter jurisdiction. The government’s motion to dismiss is therefore DENIED.

II.    Standard of Review

        Pursuant to Rule 52.1 of the Rules of the Court of Federal Claims (RCFC), the Court
reviews an agency’s procurement decision based on the administrative record. Bannum, Inc. v.
United States, 404 F.3d 1346, 1353–54 (Fed. Cir. 2005). The court makes “factual findings under
RCFC [52.1] from the record evidence as if it were conducting a trial on the record.” Id. at 1357.
Thus, “resolution of a motion respecting the administrative record is akin to an expedited trial on
the paper record, and the Court must make fact findings where necessary.” Baird v. United
States, 77 Fed. Cl. 114, 116 (2007). The Court’s inquiry is “whether, given all the disputed and
undisputed facts, a party has met its burden of proof based on the evidence in the record.” A&D
Fire Prot., Inc. v. United States, 72 Fed. Cl. 126, 131 (2006). Unlike a summary judgment
proceeding, genuine issues of material fact will not foreclose judgment on the administrative
record. Bannum, Inc., 404 F.3d at 1356.

        In a bid protest, the Court reviews challenges to procurement decisions under the same
standards used to evaluate agency actions under the Administrative Procedure Act, 5 U.S.C.
§ 706. See 28 U.S.C. § 1491(b)(4) (stating that “[i]n any action under this subsection, the courts
shall review the agency’s decision pursuant to the standards set forth in section 706 of title 5”).
Thus, to successfully challenge an agency’s procurement decision, a plaintiff must show that the
agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); see also Bannum, Inc., 404 F.3d at 1351.


                                                15
        This “highly deferential” standard of review “requires a reviewing court to sustain an
agency action evincing rational reasoning and consideration of relevant factors.” Advanced Data
Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (citing Bowman Transp.,
Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974)). Thus, the Court cannot
substitute its judgment for that of the agency. See Honeywell, Inc. v. United States, 870 F.2d
644, 648 (Fed. Cir. 1989) (holding that as long as there is “a reasonable basis for the agency’s
action, the court should stay its hand even though it might, as an original proposition, have
reached a different conclusion” (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301
(D.C. Cir. 1971))). Instead, the Court’s function is limited to “determin[ing] whether ‘the
contracting agency provided a coherent and reasonable explanation of its exercise of
discretion.’” Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
1332–33 (Fed. Cir. 2001) (quoting Latecoere Int’l, Inc. v. U.S. Dep’t of Navy, 19 F.3d 1342,
1356 (11th Cir. 1994)); see also Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983) (court should review agency action to determine if the agency has
“examine[d] the relevant data and articulate[d] a satisfactory explanation for its action”). A
disappointed offeror “bears a heavy burden” in attempting to show that a procuring agency’s
decision lacked a rational basis. Impresa Construzioni, 238 F.3d at 1338.

III.   Crowley’s Bid Protest

        In its protest, Crowley attacks the agency’s decision to take the corrective action GAO
recommended by setting aside the contract award and reevaluating the offerors’ past
performance. As the court of appeals has observed, “a procurement agency’s decision to follow
the Comptroller General’s recommendation, even though that recommendation differ[s] from the
contracting officer’s initial decision, [is] proper unless the Comptroller General’s decision itself
was irrational.” Honeywell, Inc., 870 F.2d at 648; see also Centech Grp. v. United States, 554
F.3d 1029, 1039 (Fed. Cir. 2009). Thus, in reviewing an agency’s implementation of corrective
action recommended by GAO, the court’s “task is to evaluate the rationality of the GAO
decision.” Turner Constr. Co. v. United States, 645 F.3d 1377, 1383 (Fed. Cir. 2011). And in
determining whether GAO’s decision is rational, the court must necessarily consider the
reasonableness of the underlying agency decision as to which GAO recommended corrective
action. Sys. Application & Techs., Inc. v. United States, 100 Fed. Cl. 687, 714–15 (2011)
(finding GAO recommendation for corrective action irrational where record showed agency
performed proper analysis and tradeoff to which GAO did not give appropriate deference), aff’d,
691 F.3d 1374 (Fed. Cir. 2012).

        In this case, Crowley contends that GAO’s decision was irrational, arguing that “GAO’s
decision ignores the very thing it was charged with reviewing: the Agency’s contemporaneous
evaluation record.” Crowley Logistics, Inc.’s Mem. in Supp. of Its Mot. for J. on the Admin. R.
at 16, ECF No. 39-1. According to Crowley, that “contemporaneous record provides a rational,
documented basis for the Agency’s determination to assign Crowley a Satisfactory Confidence
rating.” Id. at 15. It claims that instead of reviewing the agency’s reasoning and deferring to the
agency’s methodology, GAO imposed upon the agency its own “new, unwritten dollar-value
benchmark to be used in evaluating whether each offeror’s past performance references met even
the lowest rating of Somewhat Relevant.” Id. at 14. According to Crowley, “[b]y imposing its
own dollar-value threshold in the context of evaluating Past Performance, GAO fundamentally
altered the Solicitation’s tailored evaluation criteria and created the false appearance that


                                                16
Crowley—which indisputably has the transport and logistics experience to perform this
Contract—apparently lacked any so-called ‘relevant’ performance history.” Id. at 20.

         Crowley’s arguments are based on a misapprehension of GAO’s reasoning and decision.
GAO did not ignore the record developed by the agency regarding Crowley’s past performance;
rather, it found that the record did not reflect the basis for the agency’s decision to rate sixteen of
Crowley’s past performance references “Somewhat Relevant.” GAO concluded that the agency’s
past performance evaluation was unsupported by the record because “it [was] not clear . . . how
the agency determined that the magnitude of Crowley’s past efforts supported the ratings.” AR
Tab 148 at 13013–14. Specifically, there was “nothing in Crowley’s past performance evaluation
report to reflect what benchmarks might have been used to assess whether Crowley’s past efforts
met the criteria for the various relevancy ratings defined in the solicitation.” Id. And the absence
of any stated explanation was particularly problematic to GAO given the relatively low dollar
value of Crowley’s efforts when compared to the value of the DFTS contract. Id. at 13013.

        GAO’s criticisms were well-taken. Although the discussion of Crowley’s past
performance references was thirty-five pages long (as Crowley emphasizes), the narratives for
each of the past performance references set forth in those thirty-five pages simply restate
information contained in the performance questionnaires and then end with a conclusory
characterization of the relevance of the reference. The narratives do not include any discussion
that compares the scope and magnitude of effort and complexities of the offeror’s past
performance references to those of the DFTS contract. To be sure, an agency’s past performance
analysis does not need to contain “an exhaustive comparison” of a reference’s relevance to the
performance work statement. See Westech Int’l, Inc. v. United States, 79 Fed. Cl. 272, 294
(2007). Nonetheless, an agency must supply enough detail to allow the reviewing body to ensure
that the agency action “evinc[es] rational reasoning and [the] consideration of relevant factors.”
See Weeks Marine, Inc., 575 F.3d at 1369 (internal quotation omitted). It was not unreasonable
for GAO to find the level of detail inadequate in this case, particularly in light of the fact that the
dollar value of each of the past performance references was relatively low as compared to the
value of the DFTS contract.

        Moreover, GAO reasonably rejected agency counsel’s attempt to supply an explanation
of the agency’s methodology during the protest. Counsel argued that the agency’s “Somewhat
Relevant” ratings were reasonable because the “aggregate of the average annual value” of twelve
of Crowley’s past performance references exceeded “the maximum value for the transportation
CLIN for the 2-year base period of the contract awarded to Crowley.” AR Tab 148 at 13012.

       First, GAO observed that the rationale counsel offered was “not reflected in the
contemporaneous record.” Id. at 13012; see also id. at 13014 (“[T]here is no evidence that the
agency calculated an average annual value for the efforts in order to make an ‘apples-to-apples’
comparison of the efforts’ magnitude relative to the magnitude of the solicitation.”).

        Second, even if the record had supported the proffered rationale, GAO reasonably found
the rationale itself fatally flawed because it used only the contract’s two-year base period for
purposes of comparing an offeror’s past performance efforts to the effort required by the
Solicitation and did not include the efforts required during the option years. See id. at 13014–15.
By contrast, the IGCE encompassed the entire possible period of performance including the


                                                  17
option years. Id. at 13015. Similarly, the calculation of TEP (which was to be considered in
making the award decision) also included the option years. Id. Further, each option year was
expected to cost at least $50 million more than the entire two-year base period.9 See id. Tab 4 at
57; see also id. Tab 148 at 13015. Accordingly, GAO found the “agency’s selection of the
significantly lower-valued transportation CLIN for the base period . . . to be an unreasonable
benchmark.” Id. Tab 148 at 13015.

        The Court agrees with GAO that the agency’s proffered methodology was unreasonable.
Indeed, in determining relevance, the agency was required to compare an offeror’s past
performance efforts to the scope, magnitude, and complexity of efforts that “this solicitation
requires.” See id. Tab 20 at 9501. The Solicitation “requires” that offerors be able to undertake
the efforts that are included in the option years. It was not irrational, therefore, for GAO to reject
the methodology agency counsel suggested.10

        Finally, contrary to Crowley’s contentions, GAO did not alter the Solicitation’s past
performance evaluation methodology or set any bright-line benchmark that the agency must use
upon reevaluation to determine whether a past performance reference is somewhat relevant.
Rather, in explaining why it had rejected the agency’s purported method of comparison, it stated
that “[o]ne reasonable benchmark under the circumstances here could be the average value of
each year of performance (including options) of the contract.” Id. Tab 148 at 13016 (emphasis
added). But it did not require the agency to use any particular benchmark. It merely
recommended that “the agency reevaluate Crowley’s past performance in a manner that is
reasonable and consistent with both the solicitation and [its] decision.” Id. at 13017. GAO’s
decision even noted the possibility of a different, non-monetary benchmark: “such benchmarks
might have included . . . the number of total or monthly shipment transactions under the effort.”
Id. at 13014. USTRANSCOM is thus free, in its corrective action, to consider other aspects of a
past performance reference either in addition to or, if appropriate, in lieu of dollar amount.

        In short, because GAO’s decision was rational, USTRANSCOM’s decision to take
corrective action in accordance with GAO’s recommendation was reasonable. Crowley’s motion
for judgment on the administrative record in case number 17-455 is DENIED and the
government’s and XPO’s cross-motions are GRANTED.


9
 As GAO noted, the option years were expected to cost more than the base period because of the
“potential addition of military users of the contract.” AR Tab 148 at 13015 (internal quotation
omitted).
10
  In its reply memorandum, Crowley similarly suggests its own rationale for assigning a
“Somewhat Relevant” rating to its past performance based upon factors in addition to dollar
value, such as the kind of services, the volume and types of shipments, and the complexity of
past performance efforts. Crowley Logistics, Inc.’s Reply to the Government’s and XPO’s
Resps. & Resp. to the Government’s and XPO’s Cross-Mots. at 15–18, ECF No. 45. The Court
does not consider whether Crowley’s suggested methodology would provide a reasonable basis
for a “Somewhat Relevant” rating, because the record is silent as to whether the agency relied on
any of these factors.



                                                  18
IV.    XPO’s Bid Protest

       A.      Unbalanced Pricing

        In Counts I and II of its amended complaint, XPO challenges the agency’s unbalanced
pricing evaluation and alleges that USTRANSCOM’s corrective action is “arbitrary, capricious,
and unlawful in scope” because it will not address the alleged flaws in that evaluation. Am.
Compl. ¶¶ 71–73; 77–81. Specifically, XPO contends that “while claiming to have reviewed
Crowley’s proposal for unbalanced bidding, the agency somehow missed the fact that Crowley’s
evaluated price advantage was the product of Crowley low-balling the [***] subcontract line
items (‘SLINs’), especially those [***].” XPO’s Br. in Supp. of Mot. for J. on the Admin. R.
(XPO’s Br.) at 2, ECF No. 37-1. It asserts that “[o]n the [***] SLINs [***], XPO was
significantly lower in price, but this is not acknowledged or analyzed anywhere in the evaluation
materials.” Id. XPO further argues that “the agency was required to have eliminated Crowley’s
proposal for this reason alone.” Id.

        Citing Blue & Gold Fleet, LP v. United States, 492 F.3d 1308 (Fed. Cir. 2007), both the
government and Crowley argue that XPO’s unbalanced pricing claim has been waived because
XPO did not file a protest challenging the accuracy of the Solicitation’s quantity estimates before
the time for responding to the Solicitation expired. In any event, they argue, XPO’s unbalanced
pricing argument lacks merit. For the reasons set forth below, the Court rejects the government
and Crowley’s contention that XPO waived its right to pursue its unbalanced pricing claims. It
agrees, however, that XPO’s argument fails on the merits.

        FAR 15.404-1(g)(1) states that “[u]nbalanced pricing exists when, despite an acceptable
total evaluated price, the price of one or more line items is significantly over or understated as
indicated by the application of cost or price analysis techniques.” FAR 15.404-1(g)(2), in turn,
provides that “[a]ll offers with separately priced line items or subline items shall be analyzed to
determine if the prices are unbalanced.”

        Mere mathematical imbalance, however, is not enough to justify the rejection of an offer;
the imbalance must be material. J&D Maint. & Servs. v. United States, 45 Fed. Cl. 532, 536–37
(1999); see also Ralph C. Nash & John Cibinic, Unbalanced Bids and Proposals: Trying to Beat
the System, 5 No. 4 Nash & Cibinic Rep. ¶ 21 (1991) (“It is material unbalancing which
concerns the Government.” (emphasis in original)). An imbalance is material “if a [CO]
determines that the lack of balance poses an unacceptable risk to the Government,” i.e., a risk
that “award of the contract will result in paying unreasonably high prices for contract
performance.” FAR 15.404-1(g)(3), (g)(2)(ii); see also Southgulf, Inc. v. United States, 30 F.
App’x 977, 978 (Fed. Cir. 2002) (“A bid is materially unbalanced when . . . there is a reasonable
doubt that the bid will result in the lowest overall cost.” (internal quotation omitted)); Ultimate
Concrete, LLC v. United States, 127 Fed. Cl. 77, 83 (2016) (stating that materially unbalanced
pricing exists when “significantly overstated or understated” prices give rise to a “reasonable
doubt that the bid will . . . result in the lowest overall cost to the government”).

       In the context of an indefinite-delivery, indefinite-quantity (IDIQ) contract like the one
awarded in this case, if the quantity estimates are accurate a mathematically unbalanced bid
“poses little risk to the government.” Daniel I. Gordon, Unbalanced Bids, 24 Pub. Cont. L.J. 1,


                                                 19
33–34 (1994). But by definition, because an “estimate” is only an approximation, an “accurate
estimate” is merely an estimate that is based upon the best information reasonably available to
the agency. See id. at 34. As a result, “where the agency, while confirming that the estimates are
as accurate as possible, lacks complete confidence in their accuracy, the agency may reject the
mathematically unbalanced bid because of ‘reasonable doubt’ that it will ultimately represent the
low[est] cost to the Government.” Id. “Rejection of the unbalanced bid is particularly justifiable
where, in comparison with competing bids, its prices appear extremely skewed.” Id.

       As noted, GAO concluded (and both Crowley and the government argue) that XPO
waived its unbalanced pricing claim by failing to challenge the reasonableness of the quantity
estimates during the pre-offer stage of the competition. That conclusion was based on the
premise that—in the context of an IDIQ contract—an unbalanced pricing claim will rise or fall
based entirely on whether the quantity estimates in the solicitation are accurate, i.e., whether they
are based on the best information available to the agency. But, as noted above, even when the
estimates are as accurate as possible based on the information before the agency, it may still be
appropriate to find a price proposal materially unbalanced where the prices that are proposed are
so over- or understated that even a relatively small deviation from the agency’s reasonable
estimates gives rise to a risk that the agency will pay unreasonably high prices for contract
performance. Further, even if the quantity estimates contained in the Solicitation are reasonably
accurate, that does not relieve the agency of the obligation to undertake the unbalanced pricing
analysis required by the FAR. Accordingly, the Court concludes that XPO is not precluded from
pressing its unbalanced pricing claims because it did not file a protest challenging the
reasonableness of the agency’s quantity estimates before the time for submitting an offer expired.

         While the Court rejects the government’s and Crowley’s waiver arguments, however, it is
not persuaded of the merits of XPO’s challenge. XPO argues that “USTRANSCOM violated
procurement law by failing to abide by the terms of FAR § 15.404-1(g) during the evaluation of
offerors’ pricing proposals.” XPO’s Br. at 8. In particular, XPO argues that the agency’s alleged
failure to follow the required evaluation process resulted in its lack of consideration of whether
there was a risk that the agency would pay unreasonably high prices for Crowley’s services. See
id. at 9–10. The record, however, reveals that these assertions are incorrect.

        As noted above, FAR 15.404-1(g)(2) requires that “[a]ll offers with separately priced line
items or subline items . . . be analyzed to determine if the prices are unbalanced.” The
regulations permit the CO to use either cost or price analysis techniques. See FAR 15.404-
1(g)(2). The latter include the “[c]omparison of proposed prices received in response to the
solicitation,” as “[n]ormally, adequate price competition establishes a fair and reasonable price.”
Id. § 15.404-1(b)(2). This technique is one of the FAR’s two “preferred” price analysis
techniques. Id. § 15.404-1(b)(3). Only if this analysis reveals an unbalanced offer must the CO
proceed to consider the risk to the government. Id. § 15.404-1(g)(2).

        Here, the CO performed the preferred price analysis technique of comparing the
“proposed prices received in response to the solicitation” in accordance with FAR 15.404-
1(b)(2)(i). AR Tab 116 at 12274. He compared the individual unit prices and SLIN prices of both
proposals with each other and with the prices in GENCO’s previous proposal. Id. at 12275.
Further, he used the unit price comparisons to create a standard deviation against which each
price could be measured and assessed as high or significantly high. Id. The CO performed this


                                                 20
analysis for both XPO’s and Crowley’s prices each time they revised their price proposals. Id. at
12275–313. Thus, the record is quite clear that the CO complied with the price evaluation
requirements of FAR 15.404-1(g), as he extensively compared the proposed prices received in
response to the Solicitation.

        Moreover, the CO used this analysis to draw conclusions about each offeror’s proposed
prices. He concluded that both Crowley’s and XPO’s prices were “fair and reasonable based on
adequate price competition” (and on other than certified cost or pricing data with respect to
Crowley). Id. at 12305, 12308. The CO further determined that “there remain[ed] no indication
of unbalanced pricing.” AR Tab 116 at 12319. In other words, the CO found that the offerors’
prices were neither over- nor understated. This conclusion is adequately supported by the record.
And, because the CO concluded there was no unbalanced pricing, FAR 15.404-1(g) did not
require him to further consider any risk to the government from the offerors’ prices. XPO’s
arguments thus lack merit. Accordingly, XPO’s motion for judgment on the administrative
record in case number 17-452, with respect to Counts I and II, must be DENIED, and the
government’s and Crowley’s cross-motions must be GRANTED.

       B.      The Agency’s Alleged Failure to Consider Likely Actual Cost

        XPO contends that the agency violated the terms of the Solicitation by giving what it
calls “exclusive, controlling weight in the best value tradeoff to the TEPs of the offerors.” XPO’s
Br. at 18. It argues that the agency could not lawfully use TEP in this competition to determine
cost differences between proposals because “the TEP numbers, at $7+ billion, were almost three
times the IGCE of $2.7 billion and over three times the announced expected cost of $2.2 billion.”
Id. at 19. According to XPO, “[c]ommon sense tells one that it is irrational to rely on a ‘cost
difference’ that does not comport with the actual cost to be paid.” Id. It argues that “[t]o be
meaningful, a best value determination must weigh the value of a proposal’s non-price benefits
against the cost to the government associated with those benefits.” Id. (citations omitted,
emphasis in original).

       XPO’s contentions are unavailing. In this case, the Solicitation explicitly provided that
the agency would use TEP as the common basis for comparing relative costs. The relevant
paragraph reads, in pertinent part, as follows:

               Price will be considered in determining the best value offeror. Price
               will be evaluated for completeness and reasonableness; however,
               price will not be rated. The Offeror’s proposed pricing will be
               evaluated using one or more of the techniques set forth in FAR
               15.404-1(b)(2) to determine [if] prices [are] fair and reasonable.
               Proposed pricing will also be evaluated to determine that all prices
               are complete . . . . In addition, a Total Evaluated Price (TEP) will be
               calculated by totaling the extended prices for all proposed pricing of
               CLIN X001 (Transportation) in the Rate Tables. . . . The TEP does
               not include the Not-To-Exceed costs for CLIN X002, Customs
               Brokerage. The TEP does not include the offeror’s proposed pricing
               for CLINs 0003, Site Implementation and CLIN 0004, Systems
               Implementation. Both CLIN 0003 and 0004 will be evaluated to


                                                 21
               determine prices are fair and reasonable; however, they will not be
               included in the TEP. The TEP will be considered in making the
               contract award decision.

AR Tab 20 at 9502 (emphasis supplied).

        The underscored text clearly conveys that it is the proposals’ TEPs that “will be
considered in making the contract award decision.” There is no mention in the paragraph of
“actual cost.” Further, the Court is not persuaded by XPO’s argument that the statement at the
beginning of the passage that “[p]rice will be considered in determining the best value offeror”
should be read to mean that the agency would also take into account some other measure of
“actual cost to the government.” In particular, contrary to XPO’s arguments, the use of the
phrase “in addition” at the beginning of the section that introduces the TEP as a relevant factor
does not suggest that there is some distinction between “price” and “TEP” for purposes of the
paragraph, or that “price” means actual cost. See XPO’s Reply at 2, 19. The phrase “in addition”
is used to transition from a discussion of how price would be evaluated for completeness,
reasonableness, and fairness, to a discussion of how the agency would compare the proposals for
purposes of making the contract award—i.e., through calculation and comparison of the TEPs.
See AR Tab 20 at 9502.

        Further, XPO’s argument—that the agency was required by law to consider something
other than TEP in making its best value determination in this case—essentially challenges the
terms of the Solicitation itself, not an error made in the evaluation process. Because the argument
was not made until after proposals were submitted and evaluated, it has been waived under Blue
& Gold Fleet. See Linc Gov’t Servs., LLC, 96 Fed. Cl. at 713 (finding that “plaintiff’s challenges
to the Army’s price evaluation . . . amount to allegations of a patent error . . . in the Solicitation”
and that “[h]aving failed to raise these objections . . . prior to submitting its proposal, plaintiff
has waived its right to do so before this court”).

         In any event, XPO’s argument that the agency was legally required to consider something
beyond TEP fails on the merits. Thus, both 10 U.S.C. § 2305(a)(3)(A)(ii) and FAR 15.304(c)(1)
recognize that agencies may consider either price or cost as an evaluation factor when making a
source selection decision. Further, in the context of an IDIQ contract like the present one, “a
comparative price evaluation of competing proposals presents a particular challenge” because the
agency’s needs are uncertain at the time of the solicitation. Linc Gov’t Servs., 96 Fed. Cl. at 713.
Therefore “at the solicitation stage, the crucial decision confronting the procurement official
turns on the relative prices of competing proposals, not the absolute cost that the government will
pay for the procured goods or services.” Id. at 714. The government may use any reasonable
methodology that provides “a common basis for comparing the relative costs of the proposals.”
Magnum Opus Techs., Inc. v. United States, 94 Fed. Cl. 512, 535 (2010) (quoting Aalco
Forwarding, Inc., B–277241, 98–1 CPD ¶ 87, 1998 WL 121352, at *7 (Comp. Gen. March 11,
1998)). “The issue [i]s not whether the [government] could have selected a pricing methodology
that (from plaintiffs’ perspective) was better—the issue is whether the pricing methodology the
[government] did select is arbitrary, capricious, or otherwise contrary to law.” Qwest Gov’t
Servs., Inc. v. United States, 112 Fed. Cl. 24, 34 (2013) (quotation omitted, second and third
alteration in original). Examining each offeror’s TEP provides a common basis for comparing
the costs of each offeror’s proposal, and therefore was entirely reasonable.


                                                  22
        Finally, there is no merit to XPO’s argument that the agency engaged in misleading
discussions with the offerors by failing to advise them of an alleged change in its method of
evaluating price between its first and second evaluations. See XPO’s Br. at 24. According to
Count V of XPO’s complaint, the agency had taken likely actual costs into consideration when it
conducted its first evaluation, but during the second evaluation it changed its standards by
relying only on TEP. Am. Compl. ¶¶ 105–06. It claims that “[h]ad the agency informed XPO of
its changed interpretations, rather than informing XPO that it would follow the same procedures,
XPO could have further improved its pricing relative to the TEP and likely would have been
found to have offered the best value proposal.” Id. ¶ 107.

        XPO’s argument that the agency considered something other than TEP to make its best
value determination during the first evaluation lacks merit. It is based upon GAO’s discussion of
a statement by the CO asserting that the TEPs were “not indicative of what will truly be spent
over the lifetime of the contract.” AR Tab 74 at 11954 n.8 (quoting the CO’s Statement). This
statement was submitted as part of the agency’s defense of its decision to award the contract to
GENCO (rather than Crowley) notwithstanding GENCO’s significantly higher TEP. In a
footnote, GAO commented that “in evaluating competitive proposals, agencies are required to
meaningfully consider the cost to the government,” and that “to the extent the agency does not
consider the [TEPs] here to be a reasonable assessment of the cost of performance, the agency
should consider whether the solicitation’s price evaluation methodology should be revised.” Id.

        First, the CO’s statement suggesting that the TEPs did not reflect actual costs over the
lifetime of the contract was a defensive point made in the context of litigation and was not a
stated basis for awarding the contract to GENCO rather than Crowley. Further, and more
significantly, USTRANSCOM did not, in fact, revise the price evaluation methodology after the
first GAO decision. Given the fact that GAO instructed that the agency should revise the terms
of the Solicitation if the TEP did not represent a reasonable assessment of cost, the agency’s
decision not to change the RFP shows that it intended its use of the TEP to be its reasonable
assessment of cost for the second evaluation as well. Therefore, there was nothing misleading
about the discussions between the agency and XPO because there was no change in the agency’s
method of evaluating price between its first and second evaluations.

      For these reasons, XPO’s motion for judgment on the administrative record in case
number 17-452 with respect to Counts III and V of the complaint is DENIED and the
government’s and Crowley’s cross-motions are GRANTED.

       C.      Alleged Flaws in the Agency’s Evaluation of Non-Price Factors

          In Count IV of its complaint, XPO challenges the agency’s conclusion that the benefits of
XPO’s proposal were insufficient to justify its higher TEP, claiming that the agency did not
engage in a meaningful comparison of the offerors’ past performance or technical capability. See
Am. Compl. ¶¶ 90–100. XPO contends that “[t]he agency’s best value determination was . . .
fundamentally flawed because the SSA failed to consider the underlying merits of the proposals
and, instead, based his trade-off solely on the adjectival ratings.” XPO’s Br. at 24; see also Am.
Compl. ¶ 95 (asserting that the source selection decision “lack[ed] any substantive consideration
. . . of Crowley’s and XPO’s proposals . . . [and] fail[ed] adequately to document the . . .
decision”).


                                                23
        To the extent that XPO challenges the agency’s comparison of the past performance of
Crowley and XPO, that challenge is moot. As part of the corrective action the Court has already
found reasonable, the agency will be re-evaluating the performance risk presented by each
offeror’s proposal. There is no live controversy, therefore, regarding the merits of the agency’s
original performance assessments.

        As noted, XPO also challenges the agency’s comparison of the parties’ technical
proposals. It argues that the comparative assessment of the technical proposals was flawed
because it was allegedly “almost exclusively based on top-level adjectival ratings” and also
allegedly “whitewash[ed]” the differences in proposal merit that the agency identified. XPO’s
Br. at 29–30. This aspect of XPO’s challenge is not moot because the agency will not revisit this
comparative assessment as part of the corrective action, unless the Court directs it to do so. The
challenge, however, lacks merit.

        FAR 15.308 provides that the SSA’s “decision shall be based on a comparative
assessment of proposals against all source selection criteria in the solicitation.” He or she may
“use reports and analyses prepared by others,” but the decision must “represent the SSA’s
independent judgment.” FAR 15.308. This comparative assessment requires “consideration not
only [of] the proposals’ adjectival ratings but also information on advantages and disadvantages
of the proposals,” and the agency is required to “[l]ook[] beyond the adjectival ratings . . .
because proposals with the same adjectival ratings are not necessarily of equal quality.” Mil-Mar
Century Corp. v. United States, 111 Fed. Cl. 508, 553 (2013) (quotation and citation omitted).

       In this case, an examination of the administrative record reveals that the agency and the
SSA clearly considered more than the adjectival ratings in comparing the proposals. First, the
agency engaged in an analysis of the specific strengths of each offeror’s technical proposal as
relevant to the evaluation subfactors. AR Tab 117 at 12385–88. For instance, the agency noted
that Crowley’s proposal to use “[***].” Id. at 12385. Similarly, it noted a strength in XPO’s
proposal to use a claims processing system known as “ONE TMS,” because it would allow XPO
to “exceed[] the Government’s requirement of processing claims in less than 180 days.” Id. at
12388.

       Second, the SSEB engaged in a detailed comparative discussion of the various strengths
of each proposal with respect to each subfactor. Id. at 12391–95. These comparisons were based
on more than a tallying of the number of strengths or a comparison of the adjectival ratings
received for each subfactor; they included an analysis of why particular aspects of the proposals
warranted designation as a strength and why one proposal was more favorable than the other
with respect to that subfactor. E.g., id. at 12391 (SSEB report assigning a strength to XPO for
subfactor one for its “proposed 24/7 technical support” because “it allow[ed] the Government the
potential for faster response to unforeseen systems issues”).

        To be sure, the SSEB concluded with respect to subfactors one and four that “there [was]
no discernable difference in the proposed technical approach and all Offerors [were] considered
equal under [the] subfactor.” Id. at 12392, 12395. But that conclusion does not suggest that the
agency was somehow “artificial[ly] levelling” the parties’ proposals, as XPO contends. XPO’s
Br. 30. Thus, the SSEB also concluded, with respect to subfactor two, that XPO’s approach was
“considered more favorable in that the Offeror provide[d] an implementation plan utilizing a


                                                24
proven and reliable transportation management system that is currently in use by the
Government and requires minimal revisions to conform to the DFTS requirement.” Id. at 12393.
It noted this “would require less training” and would provide “assurance of a tested and proven
transportation management system.” Id. With respect to subfactor three, the SSEB concluded
that “Crowley’s approach [was] considered more favorable” because it used “[***].” Id. at
12394.

        Finally, both the SSAC and SSA adopted and used these discussions and comparisons.
See id. Tab 118 at 12398, 12400–04; id. Tab 120 at 12442–45. The SSA noted in the source
selection decision, for example, that for the second subfactor, “[b]oth Offerors provided a
technical approach that was considered Good,” but “[t]here [was] a discernible difference . . . in
the proposed technical approaches.” Id. Tab 120 at 12444. He stated that “[w]hile both Offerors’
approaches contain multiple strengths with benefits, [XPO’s] approach is considered more
favorable” because it “provides an implementation plan utilizing a transportation management
system that is currently in use,” which would “require less training [for] several of the DFTS
customers as well as assurance of a tested and proven transportation management system that
connects with DoD shipper systems.” Id.

       Thus, XPO’s argument that the SSA did not consider and compare the substance of the
proposals has no merit. The SSA looked beyond the adjectival ratings and considered the
advantages and disadvantages of the offerors’ technical approaches. Therefore, because XPO’s
arguments all lack merit, XPO’s motion for judgment with respect to Count IV in case number
17-452 is DENIED and the government’s and Crowley’s cross-motions are GRANTED.

                                        CONCLUSION

       For the reasons set forth above, the government’s motion to dismiss Crowley’s complaint
is DENIED. Crowley’s motion for judgment on the administrative record in case number 17-455
is DENIED, and the government’s and XPO’s cross-motions are GRANTED. With respect to
case number 17-452, XPO’s motion for judgment on the administrative record is DENIED, and
the government’s and Crowley’s cross-motions are GRANTED. The Clerk shall enter judgment
accordingly. Each side shall bear its own costs.

       IT IS SO ORDERED.




                                                     s/ Elaine D. Kaplan
                                                     ELAINE D. KAPLAN
                                                     Judge




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