    In the United States Court of Federal Claims
                                        No. 12-463
                              Filed under seal: May 31, 2013
                           Reissued for publication: June 4, 2013
*******************************************
                                                  *    Bid protest;
                                                  *    Conflicts Of Interest;
                                                  *    Federal Acquisition Regulations
COMMAND MANAGEMENT SERVICES, Inc., *                      3.101-1 (avoiding conflicts of
                                                  *           interest)
      Plaintiff,                                  *       3.104-2(b)(3) (post-employment
                                                  *           restrictions)
v.                                                *       3.104-7(e)(1) (“proprietary or source
                                                  *           selection sensitive information”)
                                                  *       9.504(c) (“organization conflict of
THE UNITED STATES,                                *           interest, unequal access”);
                                                  *    Procurement Integrity Act, 41
      Defendant,                                  *       U.S.C. § 423, now cited as 41 U.S.C.
                                                  *       §§ 2101-06 (prohibitions against
and                                               *       disclosing procurement information
                                                  *       and restrictions on employment);
HOTEL CONTRACTING SERVICES, Inc.,                 *    RCFC 24(a)(2) (intervention as a matter
                                                  *       of right);
      Defendant-Intervenor.                       *    RCFC 52.1 (Judgment on the
                                                  *       Administrative Record);
                                                  *    Supplementation of the Administrative
                                                  *       Record.
*******************************************

Victor Aronoff Kubli, Grayson Law Center, P.C., Germantown, Maryland, Counsel for
Plaintiff.

Austin Marshall Fulk, United States Department of Justice, Civil Division, Washington, D.C.,
Counsel for the Government. CPT Anthony V. Lenze, United States Army Legal Services
Agency, Contract and Fiscal Law Division, Fort Belvoir, Virginia, Counsel for the United States
Army.

James Harold Roberts, III, Van Scoyoc Kelly & Roberts, PLLC, Washington, D.C., Counsel
for Defendant-Intervenor.



 On May 31, 2013, the court filed a sealed copy of this Memorandum Opinion and Order and
provided the parties the opportunity to suggest redactions from the public version any
confidential and/or privileged information and to suggest any other changes or edits. The court
has corrected or clarified certain portions herein.
                         MEMORANDUM OPINION AND ORDER

BRADEN, Judge.

       This case concerns a post-award bid protest regarding the United States Department of
the Army’s Mission and Implementation Contracting Command Center’s (“MICC” or “Army”)
procurement of meals, lodging, and transportation services for applicants who process through
the Military Entrance Processing Station (“MEPS”) in Phoenix, Arizona. Before the court are
pending cross-motions for Judgment On The Administrative Record, pursuant to Rule 52.1 of the
Rules of the United States Court of Federal Claims.

I.     RELEVANT FACTUAL BACKGROUND.1

       A.      The Solicitation.

        On December 11, 2011, MICC issued Solicitation No. W9124D-12-R-0008 (the
“Solicitation”) to identify a contractor to provide meals, lodging, and transportation for
applicants processing though the Phoenix MEPS, beginning July 1, 2012. AR Tab 3 at 46, 49.

        The Solicitation stated that MICC would evaluate proposals based on three evaluation
factors: “Mission Capability”; offeror’s past performance; and “best overall value to the
Government, price and other factors considered.” AR Tab 3 at 55, 58. First, under “Evaluation
Factor 1 – Mission Capability,” MICC would consider several elements, including
“sanitation/cleanliness/condition/quality control,” “security/safety,” “meals,” “facility location,”
and “transportation.” AR Tab 3 at 55-58. The Solicitation defined Mission Capability adjectival
ratings as:

              Outstanding – Proposal (written and on-site evaluation considered) meets
       requirements and indicates an exceptional approach and understanding of the
       requirements. Strengths far outweigh any weaknesses. Risk of unsuccessful
       performance is very low.

              Good – Proposal (written and on-site evaluation considered) meets
       requirements and indicates a thorough approach and understanding of the
       requirements. Proposal contains strengths which outweigh any weaknesses. Risk
       of unsuccessful performance is low.

              Acceptable – Proposal (written and on-site evaluation considered) meets
       requirements and indicates an adequate . . . understanding of the requirements.
       Strengths and weaknesses are offsetting or will have little or no impact on
       1
         The relevant facts discussed herein were derived from: the August 9, 2012
Administrative Record (“AR 1-2629”); the July 24, 2012 Complaint (“Compl.”); and depositions
allowed by the court’s October 23, 2012 Order and included in exhibits to Command
Management Inc.’s (“Command”) November 21, 2012 Motion For Judgment On The
Administrative Record (“Pl. Mot. JAR Ex.”).



                                                 2
       contract performance.     Risk of unsuccessful performance is no worse than
       moderate.

               Marginal – Proposal (written and on-site evaluation considered) does not
       clearly meet requirements and has not demonstrated an adequate approach and
       understanding of the requirements. The proposal has one or more weaknesses
       which are not offset by strengths. Risk of unsuccessful performance is high.

             Unacceptable – Proposal (written and on-site evaluation considered) does
       not meet requirements and contains one or more deficiencies. Proposal is
       unawardable.

AR Tab 3 at 60.

        Second, under “Evaluation Factor 2 – Past Performance,” MICC would consider an
offeror’s written descriptions of its “past performance on similar contracts it has held within the
last three (3) years which are of similar scope, magnitude, or complexity to that which is
contained in the solicitation.” AR Tab 3 at 58. Each offeror’s past performance was to be rated:
“Very Relevant”; “Relevant”; “Somewhat Relevant”; or “Not Relevant.” AR Tab 3 at 60. In
addition, the Solicitation provided for “Performance Confidence Assessment” ratings, defined as:

              Substantial Confidence: Based on the offeror’s recent/relevant
       performance record, the Government has a high expectation that the offeror will
       successfully perform the required effort.

               Satisfactory Confidence: Based on the offeror’s recent/relevant
       performance record, the Government has a reasonable expectation that the offeror
       will successfully perform the required effort.

               Limited Confidence: Based on the offeror’s recent/relevant performance
       record, the Government has a low expectation that the offeror will successfully
       perform the required effort.

              No Confidence: Based on the offeror’s recent/relevant performance
       record, the Government has no expectation that the offeror will be able to
       successfully perform the required effort.

              Unknown Confidence (Neutral): No recent/relevant performance record is
       available of [sic] the offeror’s performance record is so sparse that no meaningful
       confidence assessment rating can reasonably be assigned.

AR Tab 3 at 60-61.

       Third, under “Evaluation Factor 3 – Price,” the Solicitation provided that price would not
be rated per se, but required offerors to “price the base and option periods” of a potential
contract. AR Tab 3 at 58-59. In turn, MICC stated that it would evaluate the proposal that



                                                3
offered “the best overall value to the Government, price and other factors,” such as the
Government’s option to extend services, considered. AR Tab 3 at 58.

        In addition, the Solicitation provided for an on-site inspection of each offeror’s proposed
hotel. AR Tab 3 at 53. The “written proposal, in conjunction with the on-site evaluation,
[would] be used to assess evaluation factor ratings.” AR Tab 3 at 59. As part of its source
selection plan, MICC would use a Source Selection Evaluation Board (“SSEB”) to evaluate
proposals and conduct on-site evaluations. AR Tab 35 at 1852, 1860 (Source Selection Plan for
Phoenix MEPS). The Contracting Officer stated that MICC followed these procedures:

       Upon receipt of the technical proposals at the MEPS, each member of the [SSEB]
       evaluation team performed an independent evaluation of each written technical
       proposal using evaluation forms provided by the contracting officer, evaluating
       each proposal on all elements of Factor 1 Mission Capability. SSEB members
       were to annotate if the offeror met the government’s requirement, and further
       annotate any strengths, weaknesses, or deficiencies based on the offeror’s written
       proposal. SSEB members were not given price proposals nor informed of any
       pricing information prior to or during their evaluations.

AR Tab 2 at 37 (June 14, 2012 Contracting Officer’s Statement).

        Based on the written proposals and on-site evaluation, the SSEB would assign relevant
rating definitions and descriptions: “strength”; “weakness”; “significant weakness”; or
“deficiency.” AR Tab 3 at 60. The SSEB would then report its consensus evaluations to the
contracting officer, who made the final award decision. AR Tab 35 at 1859-60.

        The Solicitation provided that MICC would award a contract, without discussions, based
on the “best value trade off method” (AR Tab 3 at 59), considering the following factors:

       1. EVALUATION OF PROPOSALS. Proposals submitted will be evaluated on
       Mission Capability, Past Performance, and Price factors. Proposal shall conform
       to all the terms and conditions contained in the solicitation.

       2. BEST VALUE. The Government is interested in proposals that offer value in
       meeting the requirements (i.e., quality performance with acceptable risk at a fair
       and reasonable price).

               Among technical factors: Mission Capability is significantly more
       important than Past Performance. Past Performance will be separately evaluated
       and assessed a performance risk rating. All evaluation factors, other than cost or
       price, when combined, are significantly more important than price.

       3. PRICE EVALUATION. Price will not be rated. Award will be made to the
       responsible offeror whose proposal offers the best overall value to the
       Government, price and other factors considered . . . . Where the selection official
       finds the proposals as being essentially equal with respect to technical factors,



                                                4
       price may become the determining factor in selecting the best value offer and
       making the award.

AR Tab 3 at 59.

       B.     The Proposals, Site Inspections, And Evaluations.

       Fourteen proposals were submitted in response to the Solicitation, ten of which were
evaluated. AR Tab 2 at 34.2 Command submitted seven proposals on January 13, 2012 and
February 9, 2012; each proposed using a different major Phoenix hotel. Compl. ¶ 3; AR Tab 13;
AR Tab 24-30 (Command’s seven proposals). Hotel Contracting Services, Inc. (“HCS”)
submitted a single proposal on February 1, 2012. AR Tab 23.

        The SSEB conducted on-site inspections of the proposed hotels on February 27-28, 2012
to “confirm the contents of each written proposal and to assess the cleanliness, condition,
security, and overall adequacy of the facilities proposed.” AR Tab 2 at 37. Thereafter, the SSEB
reconvened from February 29, 2012 through March 2, 2012, “first completing their individual
evaluation considering both findings from their written proposal and on-site evaluation of each
offeror, and finally reaching a team consensus and assigning a Factor 1 Mission Capability rating
to each proposal.” AR Tab 2 at 37. These evaluations were then incorporated into a written
memorandum, signed by the SSEB Chairman and presented to the contracting officer (“CO”) for
evaluation of “technical and price, and any tradeoffs” that would go into the Source Selection
Authority’s best value award decision. AR Tab 2 at 37; AR Tab 39 at 2166-82 (SSEB Initial
Report).

        On March, 9, 2012, the CO issued a Source Selection Decision Document, concurring
with the SSEB’s findings. AR Tab 51 at 2525-46. Command’s past performance was rated as
“Very Relevant” and it received the highest rating of “Substantial Confidence.” AR Tab 15 at
198; AR Tab 16-21 (debriefings); AR Tab 51 at 2543-44. With respect to Mission Capability,
two of Command’s proposals were rated as “acceptable” and the remaining five were rated as
“unacceptable,” based on deficiencies assessed by the SSEB. AR Tab 5-11; AR Tab 51 at 2530-
40. The prices of Command’s proposals ranged from 13.37% less to 14.59% more than HCS’s
proposal. AR Tab 51 at 2528. MICC’s consensus evaluation afforded HCS’s proposal the
highest Mission Capability rating: “outstanding.” AR Tab 12 at 153. HCS’s past performance
was rated as “Very Relevant” with “Substantial Confidence” in the Performance Confidence
Assessment. AR Tab 51 at 2528-30. In addition, HCS’s price was the second lowest of any of
the prices received, and the lowest price of the proposals eligible for award. AR Tab 51 at 2526-
28.

        After receiving the SSEB Chairman’s evaluations, the CO determined that HCS’s
proposal was the “best value to the government” based on its technical ratings and evaluations
and relative price. AR Tab 51 at 2545-46 (Source Selection Decision). The CO and the Source



       2
        Four proposals were rejected, without being evaluated, because they were “substantially
incomplete.” AR Tab 2 at 34.


                                               5
Selection Authority awarded the contract to HCS on April 30, 2012. AR Tab 54 at 2573
(Contract W9124D-12-D-0019).

       C.     Mr. James Murray’s And First Sergeant James Lewis’s Involvement In The
              Procurement Process.

        From 2008 until November 2011,3 Mr. James Murray was MEPCOM’s Western Sector
Command Sergeant Major and Senior Enlisted Advisor (“SEA”) for all Western Sector MEPS,
including the Phoenix MEPS. AR Tab 57 at 2625; Pl. Mot. JAR Ex. 1 (Murray Dep. at 6-7
(Nov. 8, 2012)). In this capacity, he had contact with the CO and several MEPS contractors. Pl.
Mot. JAR Ex. 1 at 11, 68-70; Pl. Mot. JAR Ex. 1 at 28, 36. Mr. Murray also had contact with
several first sergeants, including First Sergeant James E. Lewis.

        During this procurement, First Sergeant Lewis was the Chairman of the SSEB. AR Tab
35 at 1850. In that capacity, First Sergeant Lewis, a member of the evaluation team, led the on-
site inspections, and the evaluation of proposals submitted in response to the Solicitation. AR
Tab 38 at 2163.

       The exact nature of the relationship between Mr. Murray and First Sergeant Lewis is the
focus of Command’s claims and is discussed more fully below.

II.    PROCEDURAL HISTORY.

       A.     Before The Government Accountability Office.

        On May 14, 2012, Command filed a protest with the Government Accountability Office
(“GAO”), challenging MICC’s award of the MEPS contract to HCS. AR Tab 32 at 1792, 1812.
Command requested a stay or termination of the MEPS contract, on the grounds that MICC’s
inspection findings and Mission Capability Evaluations were erroneous, unreasonable, and
inconsistent with the Solicitation’s evaluation criteria. In addition, Command asserted that its
proposals were not rated consistently with HCS’s proposal, thereby prejudicing Command. AR
Tab 32 at 1808-10. Because GAO determined that Command’s protest was not timely, a stay
was denied. AR Tab 2 at 34 n.1. HCS’s performance of the contract began on July 1, 2012, as
required by the Solicitation. AR Tab 3 at 49. After Command’s July 24, 2012 Complaint was
filed in the United States Court of Federal Claims, the GAO dismissed Command’s May 14,
2012 Protest.

       B.     Before The United States Court Of Federal Claims.

       On July 24, 2012, Command filed a Complaint For Injunctive And Declaratory Relief in
the United States Court of Federal Claims, alleging that: (1) MICC’s procurement and contract
award was tainted by actual impropriety or the appearance of impropriety, in violation of 41
U.S.C. §§ 2101-2106 and 18 U.S.C. § 207, Federal Acquisition Regulation (“FAR”) 3.101, and
       3
          Mr. Murray went on terminal leave from the Army in August of 2011 and officially
retired on November 1, 2011. Pl. Mot. JAR Ex. 1 (Murray Dep. at 5).



                                               6
FAR 3.104-2(b)(3); (2) MICC failed to conduct a responsibility inquiry pursuant to FAR 9.104
and FAR Subpart 9.4, or, in the alternative, should have known that HCS was not a responsible
contractor and ineligible for this Contract award; (3) MICC failed to assess the possibility of an
organizational conflict of interest (“OCI”), as required by FAR 9.504(c); and (4) MICC’s
inspection findings and subsequent evaluations of Command’s proposed hotels were
unreasonable and inconsistent with the Solicitation’s stated evaluation criteria. Compl. ¶¶ 36-39,
41-43, 45-48, and 50-53.

       On July 24, 2012, Command also filed a Motion For A Preliminary Injunction, together
with the Declarations of Brandon Anderson, Command’s Chief Operating Officer; Brian
Anderson, Command’s Chief Marketing Officer; Carleton Penn, Command’s Phoenix area
Regional Manager; and Edward Schroeder, a Command employee. On August 17, 2012, the
Government and HCS filed Responses. On August 24, 2012, Command filed a Reply.

       On July 29, 2012, Command and the Government filed a Joint Motion For Protective
Order. On July 30, 2012, the court granted that motion. On July 30, 2012, HCS filed an
unopposed Motion To Intervene, pursuant to RCFC 24(a)(2). On July 31, 2012, the court
granted that motion.

       On August 8, 2012, the parties filed a Joint Motion For Scheduling Order. On August 9,
2012, the court granted that motion. On August 17, 2012, the Government filed, under seal, a
Consent Motion To Supplement The Administrative Record with the declaration of the CO, Terri
Corbett (“Gov’t Mot. To Suppl. AR”).4 On August 17, 2012, Command filed, under seal, a



       4
          Supplementation of the administrative record in bid protest actions in this court is
governed by the United States Court of Appeals for the Federal Circuit's decision in Axiom
Resource Management, Inc. v. United States, 564 F.3d 1374 (Fed. Cir. 2009).
“[S]upplementation of the [administrative] record should be limited to cases in which ‘the
omission of extra-record evidence precludes effective judicial review.’” Id. at 1380 (quoting
Murakami v. United States, 46 Fed. Cl. 731, 735 (2000), aff’d, 398 F.3d 1342 (Fed. Cir. 2005)).
“The purpose of limiting review to the record actually before the agency is to guard against
courts using new evidence to ‘convert the “arbitrary and capricious” standard into effectively de
novo review.’” Id. (quoting Murakami, 46 Fed. Cl. at 735). However, to perform an effective
review pursuant to the APA, the court must have a record containing the information upon which
the agency relied when it made its decision, as well as any documentation revealing the agency’s
decision-making process. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,
420 (1971) (“[S]ince the bare record may not disclose the factors that were considered or the
Secretary's construction of the evidence[,] it may be necessary for the [d]istrict [c]ourt to require
some explanation in order to determine if the Secretary acted within the scope of his authority
and if the Secretary’s action was justifiable under the applicable standard.”), abrogated in an
unrelated respect by Califano v. Sanders, 430 U.S. 99, 105 (1977); see also Montana Fish,
Wildlife, & Parks Found., Inc. v. United States, 91 Fed. Cl. 434, 440-41 (2010).
        The court has determined that supplementation of the Administrative Record with the
CO’s declaration is necessary for effective review of whether the CO complied with FAR 9.504
and/or acted arbitrarily and capriciously. See Axiom, 564 F.3d at 1380. Therefore, the court


                                                 7
Motion To Supplement The Administrative Record (“Pl. Mot. To Suppl. AR”), with documents
supporting Command’s July 24, 2012 Complaint alleging an actual or apparent OCI and
requesting that MICC “conduct a search of e-mail and telephone logs for any post-October 2011
communications between [Mr.] Lewis and [Mr.] Murray or HCS,” and requested the court to
“grant leave to Command to issue subpoenas to [Mr.] Murray and HCS seeking the production of
all communications relating to the Solicitation between [Mr.] Murray, HCS[,] and [Mr.] Lewis,”
and also to “grant leave to Command to depose Mr. Murray and Mr. Lewis.” Pl. Mot. To Suppl.
AR at 6, 15. On August 24, 2012, the Government filed a Response In Opposition To Plaintiff’s
[August 17, 2012] Motion To Supplement The Administrative Record.

       On August 24, 2012, the Government filed a Motion To Strike the declarations that
Command attached to its July 24, 2012 Motion For Preliminary Injunction, with the exception of
the May 14, 2012 declaration of Brian Anderson (“Gov’t Mot. To Strike”). On September 10,
2012, Command filed a Response To the Government’s Motion To Strike. On September 20,
2012, the Government filed a Reply.5

        On October 16, 2012, the court held a status conference to discuss Command’s August
17, 2012 Motion To Supplement The Administrative Record and the parties’ proposed briefing
schedule. On the same date, the court issued a Scheduling Order. On October 23, 2012, the
court also issued an Order granting Command’s August 17, 2012 Motion To Supplement The
Administrative Record and allowing Command to take the depositions of First Sergeant Lewis
and Mr. Murray.

      On November 21, 2012, Command filed a Motion For Judgment On The Administrative
Record (“Pl. Mot. JAR”). On December 5, 2012, the Government filed a Cross-Motion For
Judgment On The Administrative Record And Response To Plaintiff’s Motion For Judgment On
The Administrative Record (“Gov’t Mot. JAR”).




grants the Government’s August 17, 2012 Consent Motion To Supplement The Administrative
Record with the CO’s declaration.
        5
          In this case, the court has determined that the declarations referenced in the
Government’s August 24, 2012 Motion To Strike are not necessary for effective judicial review,
because they were prepared only in connection with the litigation and were not part of the record
before MICC when it awarded the contract nor before the GAO in Command’s May 14, 2012
protest. Although Command argues that the Declaration of Brandon Anderson evidences Mr.
Murray’s acquisition of non-public information during his 2009 visit to Command’s Portland,
Oregon headquarters, the declaration does nothing other than assert that Mr. Murray had access
to broad categories of non-public information. Because the declaration fails to provide any facts
supporting these assertions, the declaration is not necessary for effective judicial review of
Command’s claims.
        The Government did not move to strike the May 14, 2012 Declaration of Brian Anderson,
because it was part of the Administrative Record before the GAO. Gov’t Mot. To Strike at 1 n.1
(citing AR Tab 50.1-.4 at 2513-24). For these reasons, the Government’s August 24, 2012
Motion To Strike is granted.


                                               8
        On December 5, 2012, HCS also filed a Response To The Plaintiff’s Motion For
Judgment On The Administrative Record And Cross-Motion For Judgment On The
Administrative Record (“D-Int. JAR Resp.”). On December 12, 2012, Command filed a
Combined Opposition To Defendant And Intervenor Motions For Judgment On The
Administrative Record And Reply In Support Of Plaintiff’s Motion For Judgment (“Pl. Reply”).
On December 19, 2012, the Government filed a Reply (“Gov’t Reply”). On that date, HCS also
filed a Reply (“D-Int. Reply”).

III.   DISCUSSION.

       A.      Jurisdiction.

        Pursuant to 28 U.S.C. § 1491(b)(1), the United States Court of Federal Claims has
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 or any alleged violation of statute or regulation
       in connection with a procurement or a proposed procurement.

Id.

        In this case, the July 24, 2012 Complaint alleged several violations of law and/or FAR
“in connection with” this procurement. Compl. ¶¶ 35-58. As such, the July 24, 2012 Complaint
recites a sufficient basis for the court to exercise jurisdiction, pursuant to 28 U.S.C. § 1491(b)(1).

       B.      Standing.

        As a threshold matter, a plaintiff contesting the award of a federal contract must establish
that it is an “interested party” to have standing under 28 U.S.C. § 1491(b)(1). See Myers
Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002)
(“[S]tanding is a threshold jurisdictional issue.”). The United States Court of Appeals for the
Federal Circuit has construed the term “interested party” as synonymous with the definition of
“interested party” as recited in the Competition in Contracting Act of 1984 (“CICA”), 31 U.S.C.
§ 3551(2)(A). See Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006) (citing
decisions adopting the CICA definition of “interested party” to convey standing under 28 U.S.C.
§ 1491(b)(1)). As such, the United States Court of Appeals for the Federal Circuit requires that a
two-part test be applied in determining whether a protester is an “interested party”; a protestor
must establish that: “(1) it was an actual or prospective bidder or offeror, and (2) it had a direct
economic interest in the procurement or proposed procurement.”                  Distrib. Solutions,
Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir. 2008). In addition, in post-award protests,
the plaintiff also must show it had a “substantial chance” of receiving the contract. See Rex Serv.
Corp., 448 F.3d at 1307.

       The second standing requirement is that the protestor must show that the alleged errors in
the procurement were prejudicial. See Labatt Food Serv., Inc. v. United States, 577 F.3d 1375,



                                                  9
1378 (Fed. Cir. 2009) (“It is basic that because the question of prejudice goes directly to the
question of standing, the prejudice issue must be reached before addressing the merits.”)
(internal quotation marks omitted); see also Myers, 275 F.3d at 1370 (“[P]rejudice (or injury) is a
necessary element of standing.”). Prejudice is demonstrated where the protestor “can show that
but for the error, it would have had a substantial chance of securing the contract.” Labatt, 577
F.3d at 1378. Importantly, a proper standing inquiry must not conflate the requirements of
“direct economic interest” and prejudicial error. Id. at 1380 (explaining that examining
economic interest but excluding prejudicial error from the standing inquiry “would create a rule
that, to an unsuccessful but economically interested offeror in a bid protest, any error is
harmful”).

        In this case, Command was an actual offeror, that timely submitted several alternative
proposals in response to the Solicitation. Compl. ¶ 14. In addition, Command had a direct
economic interest in the procurement because, if the allegations in its July 24, 2012 Complaint
are taken as true, Command had a substantial chance of receiving the contract at issue.
Therefore, the court has determined that Command was an interested party to the Solicitation and
would be prejudiced by MICC’s alleged errors regarding the alleged OCI, failure to investigate,
and failure to disqualify HCS. If these allegations are established, Command had a substantial
chance of receiving the contract award, since two of Command’s seven proposals were deemed
“acceptable” and eligible for contract award. Command asserts that HCS should have been
disqualified from award as a non-responsible offeror, and in the alternative, that HCS benefitted
from the fact that inspection standards were applied in an unreasonable and uneven manner.
Compl. ¶¶ 42-43, 47, 51-52. Taken as true, these allegations support a finding that Command
would have had a substantial chance of receiving the contract, but for the alleged errors. See
Labatt, 577 F.3d at 1378.

       For these reasons, the court has determined that Command has standing to contest the
award of the contract at issue in this case.

       C.      The Applicable Standards Of Review.

        Pursuant to the Tucker Act, 28 U.S.C. § 1491, as amended by the Administrative Dispute
Resolution Act, Pub. L. No. 104-320, § 12, 110 Stat. 3870, 3874 (1996), the United States Court
of Federal Claims is required to review challenges to an agency decision, pursuant to the
standards set forth in the Administrative Procedure Act (“APA”). 28 U.S.C. § 1491(b)(4) (“In
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.”); see also 5 U.S.C. § 706(2)(A) (2006) (The
reviewing court shall “hold unlawful and set aside agency action, findings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.”); Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1350 (Fed. Cir. 2004)
(“Among the various APA standards of review in section 706, the proper standard to be applied
in bid protest cases is provided by 5 U.S.C. § 706(2)(A): 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.’”). The United States Court of Appeals for the Federal Circuit has provided the trial
courts with specific guidance in how to analyze the required showings for injunctive relief under
APA standards.



                                                 10
        The United States Court of Appeals for the Federal Circuit has held that a bid award may
be set aside if “the procurement procedure involved a violation of regulation or procedure.”
Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009). The United States
Court of Appeals for the Federal Circuit has clarified, however, that when a contract award is
challenged, based on regulatory or procedural violation, “the disappointed bidder must show a
clear and prejudicial violation of applicable statutes or regulations.” Axiom Res. Mgmt., 564
F.3d at 1381 (internal quotation marks omitted). This burden is even greater when the
procurement is a “best value” procurement, as is the case here. See Galen Med. Assocs., Inc. v.
United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (“[A]s the contract was to be awarded based
on ‘best value,’ the contracting officer had even greater discretion . . . . [T]he relative merit of
competing proposals is primarily a matter of administrative discretion.”) (citations omitted); see
also Unisys Corp. v. Widnall, 98 F.3d 1325, 1327 (Fed. Cir. 1996) (“In determining whether the
agency has complied with the regulation authorizing best value procurements, the [reviewing
authority] may overturn an agency's decision if it is not grounded in reason.”).

        If an award decision is challenged as arbitrary, capricious, or lacking a rational basis, the
trial court “must sustain an agency action unless the action does not evince rational reasoning
and consideration of relevant factors.” Savantage Fin. Servs. v. United States, 595 F.3d 1282,
1287 (Fed. Cir. 2010) (internal alterations, quotation marks, and citations omitted); see also
Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (holding that the trial
court must “determine whether the contracting agency provided a coherent and reasonable
explanation of its exercise of discretion, and the disappointed bidder bears a heavy burden of
showing that the award decision had no rational basis”).

       The court may set aside the procurement, but “only in extremely limited circumstances.”
United States v. John C. Grimberg Co., Inc., 702 F.2d 1362, 1372 (Fed. Cir. 1983). This rule
recognizes a zone of acceptable results in each particular case and requires that the final decision
evidences that the agency “considered the relevant factors” and is “within the bounds of reasoned
decision making.” Baltimore Gas & Elec. Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87,
105 (1983); see also Weeks Marine, 575 F.3d at 1368-69 (“We have stated that procurement
decisions invoke . . . highly deferential rational basis review. . . . Under that standard, we sustain
an agency action evincing rational reasoning and consideration of relevant factors.” (internal
quotation marks and citations omitted)).

       D.      Issues Raised By The Plaintiff’s Motion For Judgment On The
               Administrative Record.

               1.      Whether The Government Violated Federal Acquisition Regulation
                       1.102-2(c)(1), 3.101-1, 9.504, 9.505, And 9.506.

                       a.      The Plaintiff’s Argument.

       MICC, as the contracting agency, had a duty to protect the integrity of the procurement
process and avoid “‘engag[ing] in conduct that . . . favors one offeror over another.’” Pl. Reply




                                                 11
at 2 (citing FAR 1.102-2(c)(1)6; quoting FAR 15.306(e)). Command argues, however, that the
“procurement [was] tainted by an apparent or actual impropriety, conflict, unfair competitive
advantage[,] or bias occasioned by the Murray/Lewis assistance to HCS,” the presence of which
requires “(a) a thorough inquiry by the [CO], followed by [(]b) appropriate ameliorative
measures to ensure that HCS enjoys no unfair competitive advantage.” Pl. Mot. JAR at 28
(citing Compl. ¶¶ 31-35).

       FAR 1.102-2(c)(1) and FAR 3.101-17 require disqualification of a procurement offeror
where impropriety or the possibility of an unfair competitive advantage in the acquisition process
is present. Pl. Mot. JAR at 28-29 (citing FAR 1.102-2(c)(1); FAR 3.101-1; see also NFK
Eng’g v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986) (recognizing that the appearance of
impropriety alone can be a sufficient basis to disqualify an offeror and finding that the agency
reasonably decided to disqualify the offeror on that basis); Telecommunication Sys. Inc., B-
404496.3 (GAO Oct. 26, 2011) (“[W]here a firm may have gained an unfair competitive
advantage through its hiring of a former government official, the firm can be disqualified from a
competition based upon the appearance of impropriety which is created by this situation, even if
no actual impropriety can be shown, so long as the determination of an unfair competitive
advantage is based on facts and not on mere innuendo or suspicion.”)).

       In addition, FAR 9.504(a)8 requires that contracting officials avoid, neutralize, or
mitigate potential significant conflicts of interest to prevent an unfair competitive advantage or

       6
           FAR 1.02-2(c)(1) provides

               (1) An essential consideration in every aspect of the System is maintaining
       the public's trust. Not only must the System have integrity, but the actions of each
       member of the Team must reflect integrity, fairness, and openness. The
       foundation of integrity within the System is a competent, experienced, and well-
       trained, professional workforce. Accordingly each member of the Team is
       responsible and accountable for the wise use of public resources as well as acting
       in a manner which maintains the public’s trust. Fairness and openness require
       open communication among team members, internal and external customers, and
       the public.

48 C.F.R. § 1.102-2(c)(1).
       7
           FAR 3.101-1 provides, in pertinent part

                Government business shall be conducted in a manner above reproach and
       . . . with complete impartiality and with preferential treatment for none. . . . The
       general rule is to avoid strictly any conflict of interest or even the appearance of a
       conflict of interest in Government-contractor relationships.

48 C.F.R. § 3.101-1.
       8
         FAR 9.504(a) provides, in pertinent part, that “contracting officers shall analyze
planned acquisitions in order to . . . [i]dentify and evaluate potential organizational conflicts of


                                                12
the existence of conflicting roles that may impair that official’s objectivity. When a possibility
of an impropriety or unfair competitive advantage arises, it must be investigated by the
contracting agency. Pl. Reply at 3 (citing FAR 9.504(a)). If the contracting agency’s
investigation confirms that there is a significant possibility of impropriety, conflict, or unfair
competitive advantage, “the agency must fashion and implement reasonable ameliorative
measures.” Pl. Reply at 3 (citing FAR 9.504-.506; Turner Constr. Co., Inc. v. United States, 645
F.3d 1377, 1386 (Fed. Cir. 2011) (“A significant potential conflict is one which provides the
bidding party a substantial and unfair competitive advantage during the procurement process on
information or data not necessarily available to other bidders.”)). These regulations were
promulgated to prevent an unfair competitive advantage through unauthorized access to
“proprietary” and “source selection information.” FAR 9.505(b). But they also recognize that
conflicts may arise in factual situations “not expressly covered” by FAR 9.505 or FAR 9.508. In
this case, the SSEB Instructions explicitly warned that “[i]t is imperative that all team members
refrain from discussing this or any other type of information with anyone outside the evaluation
team, the contracting advisor, and/or the [MEPCOM] individual who may be observing the
evaluation process.” AR Tab 38 at 2162. In addition, the Source Selection Plan instructed SSEB
Chairman Lewis and other SSEB members to avoid even the “appearance” of a conflict (AR Tab
35 at 1860); “immediately” report any possible conflicts to the CO (AR Tab 35 at 1860); not
discuss evaluation or source selection information with unauthorized persons, “even after the
announcement of the successful contractor” (AR Tab 35 at 1868); conduct themselves “in a way
that will not adversely affect the confidence of the public in the source selection process (AR
Tab 35 at 1868); and “avoid any action, whether or not prohibited, that could result in or create
the appearance of . . . losing independence or impartiality[.]” AR Tab 35 at 1868.

       The record establishes a “potential or actual conflict, unfair competitive advantage[,] or
bias—namely, [that] Murray [and] Lewis [provided] assistance to [HCS].” Pl. Mot. JAR at 33-
34. As the former SEA, Mr. Murray supervised Western sector MEPS contracts, served as the
“point person” with MEPS contractors, and “received non-public Command information[.]” Pl.
Mot. JAR at 33. In that capacity, he also was in contact with First Sergeant Lewis at Phoenix
MEPS, who served as the SSEB Chairman for this procurement. Pl. Mot. JAR at 34. After
joining HCS in September 2011, Mr. Murray “assisted HCS in its competition with Command
under the Solicitation,” and during the time Command’s GAO protest was pending, Mr. Murray
contacted SSEB Chairman Lewis, and the two called a Command employee, Mr. Schroeder, “in
an attempt to solicit [him] to leave Command and join HCS.” Pl. Mot. JAR at 34.

        Despite this situation, MICC did not investigate whether there was a conflict, unfair
competitive advantage, or impropriety, as required by FAR 9.504, FAR 9.505, and FAR 9.506(b)
in the face of even the “possibility of a conflict, unfair competitive advantage, or bias.” Pl. Mot.
JAR at 35; Pl. Reply at 5. This failure prevented MICC from taking the “second of two
mandated steps—fashion[ing] and implement[ing] informed [ameliorative] measures that will
ensure that the procurement is conduct[ed] without the risk of a conflict, unfair competitive
advantage or bias.” Pl. Mot. JAR at 31, 35. The court, therefore, should mandate these actions
by MICC. Pl. Mot. JAR at 35.

interest as early in the acquisition process as possible; and . . . [a]void, neutralize, or mitigate
significant potential conflicts before contract award.” 48 C.F.R. § 9.504(a).



                                                13
                       b.     The Government’s Response.

        The Government responds that there was no actual or potential conflict of interest or bias
on the part of MICC. Gov’t Mot. JAR at 6. The United States Court of Appeals for the Federal
Circuit has explained that the FAR “requires mitigation of ‘significant potential conflicts,’ but
does not require mitigation of other types of conflicts, such as apparent or potential non-
significant conflicts,” and that contracting officers are entitled to “considerable discretion” in
identifying conflicts and developing mitigation plans where a significant potential conflict exists.
Gov’t Mot. JAR at 7 (quoting PAI Corp. v. United States, 614 F.3d 1347, 1352-53 (Fed. Cir.
2010)). A contracting officer is “only required to document the existence of an [OCI] and
prepare a mitigation plan, upon determining that a potential conflict is in fact ‘significant.’”
Gov’t Mot. JAR at 7-8 (quoting PAI Corp., 614 F.3d at 1353). In addition, the United States
Court of Appeals for the Federal Circuit also has suggested that an OCI exists only where a
relationship between two parties creates an actual competitive advantage for one of them. Gov’t
Mot. JAR at 8 (citing Turner Constr. Co., 645 F.3d at 1384 (observing that one issue was
whether the relationship between the conflicted parties created “a competitive advantage over the
other bidders”); see also id. at 1388 (but determining the absence of an OCI where no facts
existed showing that any of the allegedly conflicted parties “had access to any information of
competitive worth”)).

        As a factual matter, Command is wrong in asserting that “Mr. Murray’s prior position
with the Army afforded him knowledge that amounted to unfair access to [non-public,
competition-sensitive] information” that gave HCS a competitive advantage in putting together
its proposal. Gov’t Mot. JAR at 8-9 (citing Pl. Mot. JAR at 5-6, 33). The record shows only
“unrelated and otherwise irrelevant facts” derived from Mr. Murray’s deposition, such as his
visits to MEPS Phoenix and his contacts with MEPS contractors and with personnel in the
contracting office, including First Sergeant Lewis. This evidence is “highly speculative and
severely lacking in substance.” Gov’t Mot. JAR at 9.

        The record substantiates that Mr. Murray’s principal job was “serving as the senior
enlisted advisor to the commander (an officer) of his organization on a variety of issues
including training, health, welfare, and morale of his organization,” which in part included
giving “advice to MEPS on the subjects of training, school visits by recruiters, and testing,” but
he was not directly responsible for MEPS activities in any of those areas. Gov’t Mot. JAR at 9-
10 (citing Pl. Mot. JAR Ex. 1 (Murray Dep. at 6-7, 8-10)). To the extent that Mr. Murray had
any contact with MEPS contracting offices or first sergeants, these contacts were in the context
of serving as a “go-between” for the contracting representatives/first-sergeants and contracting
offices to address site-specific problems. Gov’t Mot. JAR at 11 (citing Pl. Mot. JAR Ex. 1
(Murray Dep. at 11-12, 18-19)). In addition, Mr. Murray testified that he had no involvement in
MEPS contracting and never saw an MEPS contract during his tenure with MEPCOM, nor did
he have much activity related to the issue of contracting. Gov’t Mot. JAR at 11 (citing Pl. Mot.
JAR Ex. 1 (Murray Dep. at 18-19, 23)). Even if Mr. Murray did have supervisory responsibility
over MEPS contracts, Command has failed to “explain how such alleged supervisory duties
would have necessarily provided HCS with access to proprietary Command information, or even
[to] what specific information such a position would have given him access[.]” Gov’t Reply at 4.



                                                14
         Command’s argument that Mr. Murray received proprietary business information from
his trip to Command’s headquarters (Pl. Mot. JAR at 5-6) is similarly unsupported. Command’s
assertion is based solely on vague conclusions from the Declaration of Brandon Anderson
(Command’s Chief Operating Officer) attached to Command’s July 24, 2012 Motion For A
Preliminary Injunction and from Mr. Murray’s Deposition testimony, in which he denied having
discussed any proprietary information. Gov’t Mot. JAR at 13-14. Mr. Anderson’s declaration is
problematic not only because of its vagueness, but also because it is based on little personal
knowledge of either Mr. Murray’s job responsibilities or MEPCOM’s chain of command. Gov’t
Reply at 5-6. Instead, Command simply lists broad categories of information that it believes Mr.
Murray obtained from Command, without providing any detail about the information he
allegedly obtained. Gov’t Reply at 5. As such, Command has not met its burden of providing
hard facts to support its allegations. Gov’t Mot. JAR at 13, 15.

        In addition, there is no evidence that the Army showed bias in favor of Mr. Murray or
HCS. It is true that Mr. Murray’s first point of contact in the Phoenix MEPS office was First
Sergeant Lewis. Gov’t Mot. JAR at 15. But, First Sergeant Lewis testified that he only called
Mr. Murray a total of three times, when Mr. Murray was in the Army, and the two had very
limited contact when Mr. Murray visited the Phoenix MEPS office. Gov’t Mot. JAR at 15-16
(citing Pl. Mot. JAR Ex. 1 (Lewis Dep. at 10:3-21, 15:2-16:22) (Nov. 8, 2012)). In addition,
contrary to Command’s assertions, Mr. Murray did not supervise First Sergeant Lewis. First
sergeants at MEPS offices reported to their supervisors, not to Mr. Murray. Gov’t Mot. JAR at
16-17.

        The fact that First Sergeant Lewis assisted Mr. Murray in contacting and allegedly
attempting to hire one of Command’s employees on June 5, 2012 does not evidence bias. This
action occurred when First Sergeant Lewis no longer was serving as Chairman of the SSEB,
which had been dissolved. AR Tab 51 at 2525 (Mar. 9, 2012 Source Selection Decision).
Instead, First Sergeant Lewis was acting in his capacity as a “contracting officer representative.”
Furthermore, it was appropriate for First Sergeant Lewis to work with Mr. Murray “to ensure
that the MEPS lodging contract was performed properly, including working to ensure that the
transition was handled smoothly,” and to “assist with the hiring of personnel who were familiar
with the contract.” Gov’t Mot. JAR at 17-18. In addition, the competition had concluded and
the contract was awarded to HCS, and First Sergeant Lewis was not aware that a protest had
been filed. Gov’t Mot. JAR at 17 (citing Pl. Mot. JAR Ex. 1 (Lewis Dep. at 23:5-9)); Gov’t
Reply at 7. Therefore, Command’s allegations of bias are unsupported by any evidence of actual
wrongdoing or of a facilitating relationship. Gov’t Mot. JAR at 16.

        Last, “[n]othing in the record suggests that the contracting officer acted outside her
‘considerable discretion’ when, upon learning that Mr. Murray was employed by HCS, she did
not determine his employment to be a ‘significant potential conflict’ that warranted a mitigation
plan.” Gov’t Mot. JAR at 18 (quoting PAI Corp., 614 F.3d at 1352-53). There is no reason why
the CO should have identified Mr. Murray as a significant potential conflict, since he was cleared
to work for Command or any other contractor after November 1, 2011. AR Tab 56 at 2622-23.
Nor did the CO have any personal relationship with Mr. Murray or observe any improper
interaction between Mr. Murray and any other SSEB members during on-site evaluations. Gov’t



                                                15
Mot. JAR at 18. Likewise, the CO had no reason to believe that Mr. Murray had any
information, proprietary or otherwise, or that he had any specific expertise about Phoenix area
contracts, that would have afforded HCS a competitive advantage. Gov’t Mot. JAR at 18-19
(citing AR Tab 57 at 2625 (showing that Mr. Murray supervised the entire Western Sector)).

                      c.      The Defendant-Intervenor’s Response.

        HCS adds that, the competition, evaluations, and source selections relating to the
procurement all ended when the Army awarded the contract to HCS on April 30, 2012. AR Tab
1 at 16; AR Tab 2 at 38. The meeting between Mr. Murray, First Sergeant Lewis, and the
Command employee allegedly being solicited did not occur until June 5, 2012, after the
competition had ended and First Sergeant Lewis had become a “contracting officer’s
representative” for the Army, rather than a member and chairman of the SSEB. D-Int. JAR
Resp. at 2-3 (citing Pl. Mot. JAR Ex. 1 (Lewis Dep. at 28)). First Sergeant Lewis facilitated this
meeting “as part of his normal contract administration duties,” and HCS asserts that it is “not
unusual for a new contractor to fill some of its positions with persons from the unsuccessful
former incumbent contractor’s staff.” D-Int. JAR Resp. at 3 (citing Pl. Mot. JAR Ex. 1 (Lewis
Dep. at 31)). Command, however, mischaracterized First Sergeant Lewis as Chairman of the
SSEB during that time and “improperly involved with a competitor’s employee, [Mr.] Murray,”
in an attempt to “poach” a “competitor’s employee,” even after the competition ended. D-Int.
JAR Resp. at 4. This misleading characterization caused the court to allow the Depositions of
First Sergeant Lewis and Mr. Murray; therefore, “the [c]ourt should consider sanctions (costs of
the Depositions) against the Plaintiff for its continuing misleading filings.” D-Int. JAR Resp. at
5-6.

        The period of competition under the Solicitation began on December 11, 2011 and ended
on April 30, 2012. During that time, First Sergeant Lewis and Mr. Murray “had no written or
telephonic contact of any kind as confirmed by the Government’s document search . . . and based
on the sworn Deposition testimony of Lewis and Murray[.]” D-Int. JAR Resp. at 7. The only
brief face-to-face interaction occurred when First Sergeant Lewis was part of the “Army group
that inspected the HCS hotel that HCS offered in response to the . . . Solicitation.” D-Int. JAR
Resp. at 7. Therefore, there was no inappropriate contact between Mr. Murray and First
Sergeant Lewis.

       With respect to Command’s allegations regarding Mr. Murray’s access to and use of
Command’s proprietary information, HCS responds that Mr. Murray testified in his November 8,
2012 Deposition that he remembered very little from the presentation given to him at
Command’s Portland, Oregon headquarters in 2009 and denied that he was presented with any
proprietary information during his visit. D-Int. JAR Resp. at 8. This testimony is consistent with
the fact that none of the Army group members at the 2009 presentation were required by
Command to sign any type of non-disclosure agreement. D-Int. JAR Resp. at 8. In addition, Mr.
Murray was not involved in any source selection activities or other activities relating to the
MEPS contracts or proposals while with the Army, nor was he involved in the proposal process
while at HCS, other than assisting HCS in selecting the location of a hotel. D-Int. JAR Resp. at
8. In addition, Mr. Murray sought and received a letter of guidance from a Designated Agency
Ethics Official on September 8, 2011, prior to his retirement from active duty, that specifically



                                               16
authorized him to accept a position with a contractor firm providing meals, lodging, and
transportation to military applicants. D-Int. JAR Resp. at 8-9 (citing AR Tab 56 at 2622-24; AR
Tab 57 at 2625-27; AR Tab 58 at 2628-29). Therefore, Command’s allegations in this regard
also lack merit.

        After the court’s conference call on September 13, 2012, the parties met, and on October
2, 2012, the Government requested, at the insistence of Command, that the CO conduct a
“thorough OCI investigation of Murray concerning the same OCI allegations now before the
[c]ourt.” D-Int. Reply at 9-10. On November 7, 2012, the CO requested information from HCS
in connection with her investigation. D-Int. Reply Ex. 2. In response, HCS provided the sworn
declarations of Mr. Murray, in his capacity as a Project Manager for HCS, and Dick Williams,
HCS’s Executive Vice-President. D-Int. Reply at 10 (citing D-Int. Reply Ex. 3). On December
7, 2012, the CO issued a letter concluding that there is “insufficient evidence to substantiate a
finding that an OCI exists.” D-Int. Reply Ex. 4.9 Now that an OCI investigation has been
conducted and completed, HCS requests that the court dismiss Command’s “primary allegation
in this protest [(Compl. ¶¶ 9, 39, 47)] claiming that the Army failed to conduct an OCI
investigation of [Mr.] Murray.” D-Int. Reply at 11.

                      d.      The Court’s Resolution.

       The issues presented in the first three claims of Command’s Complaint are: (1) whether
the CO failed to follow FAR provisions requiring that the CO investigate and avoid or mitigate
an actual or apparent conflict of interest prior to contract award; and (2) whether Command has
met its burden to establish that an actual or apparent conflict of interest, or bias, existed that
caused Command to be prejudiced.

        With respect to the CO’s obligations under the FAR, the United States Court of Appeals
for the Federal Circuit has explained that:

               [FAR] Section 9.504(a) requires that a contracting officer “(1) [i]dentify
       and evaluate potential organizational conflicts of interest as early in the
       acquisition process as possible; and (2) [a]void, neutralize, or mitigate significant
       potential conflicts before contract award.” 48 C.F.R. § 9.504(a) (emphasis
       added). This regulation requires a contracting officer to identify and evaluate
       potential conflicts in the early stages of the acquisition process.
       Section . . .9.504(a) does not require that this preliminary analysis be documented
       in writing, but if a potential conflict is identified, the regulation specifies that the
       contracting officer must avoid, neutralize, or mitigate any “significant potential
       conflicts” before the contract award. Id. § 9.504(a). A significant potential
       conflict is one which provides the bidding party a substantial and unfair
       competitive advantage during the procurement process on information or data not
       necessarily available to other bidders. See ARINC [Eng’g Servs. v. United States],
       9
          HCS requests that the court supplement the Administrative Record with these four
exhibits. D-Int. Reply at 10-11. The court denies this request, as this Opinion does not rely on
these exhibits, nor are they necessary for “effective judicial review.” Axiom, 564 F.3d at 1380.



                                                 17
       77 Fed. Cl. [196,] 202 [(2007)]. Section 9.504(a) therefore requires mitigation of
       “significant potential conflicts,” but does not require mitigation of other types of
       conflicts, such as apparent or potential non-significant conflicts. The contracting
       officer does have considerable discretion in determining whether a conflict is
       significant. Moreover, the FAR provides a contracting officer with considerable
       discretion to conduct fact-specific inquiries of acquisition proposals to identify
       potential conflicts and to develop a mitigation plan in the event that a significant
       potential conflict exists. 48 C.F.R. § 9.505; see also Axiom, 564 F.3d at 1382.

PAI Corp., 614 F.3d at 1352-53.

        In sum, the FAR requires that “[e]ach individual contracting situation should be
examined on the basis of its particular facts and the nature of the proposed contract. The
exercise of common sense, good judgment, and sound discretion is required in both the decision
on whether a significant potential conflict exists and, if it does, the development of an
appropriate means for resolving it.” PAI Corp., 614 F.3d at 1352 (citing 48 C.F.R. § 9.505); see
also Axiom, 564 F.3d at 1382 (citing ARINC, 77 Fed. Cl. at 202 (“The responsibility for
determining whether such unequal access exists and what steps should be taken in response
thereto rests squarely with the contracting officer.”)). Importantly, FAR 9.504(d) provides that
“[t]he contracting officer’s judgment need be formally documented only when a substantive
issue concerning potential organizational conflict of interest exists.” 48 C.F.R. § 9.504(d).
Moreover, under the FAR, a contracting officer is only required to document the existence of an
OCI, and prepare a mitigation plan, upon determining that a potential conflict is “significant.”
PAI Corp., 614 F.3d at 1352.

        In this case, there was no reason for the CO to suspect, before the issuance of the
Solicitation or the filing of Command’s bid protest, the potential existence of a “significant”
OCI. Nor did Command raise this as a potential issue to the CO prior to the award or the initial
GAO protest. Gov’t Mot. To Suppl. AR (CO Corbett Decl. ¶ 10). Mr. Murray sought and
received clearance to work for a private contractor following his retirement from active duty and
was prohibited from representing a contractor before the MEPCOM until his terminal leave
period ended on November 1, 2011. AR Tab 56 at 2622 (Sept. 8, 2011 Department of Defense’s
Deputy Command Legal Counsel’s opinion that Mr. Murray was not prohibited by the
Procurement Integrity Act, 41 U.S.C. § 2104, from accepting compensation from a contractor
after his retirement from active service); AR Tab 57 at 2625 (Sept. 29, 2011 Meals and Lodging
Ethics Advisory noting that Mr. Murray was not ethically precluded from “accepting post-
retirement employment with HCS”); AR Tab 58 at 2628 (Department of Defense’s Deputy
Command Legal Counsel’s Sept. 8, 2011 e-mail to Mr. Murray that there was “no conflict of
interest” with him taking a position with Command or any other “hotel broker,” but that he was
prohibited from “engag[ing] in duties requiring any significant direct contact with
[MEPCOM] . . . contracting personnel until [November 1, 2011]”). In September, 2011, the CO
for the procurement was informed by MEPCOM’s Meals and Lodging Program Manager of Mr.
Murray’s plans to work for HCS and that he had been cleared to work for one of the meals and
lodging contractors. Gov’t Mot. To Suppl. AR (CO Corbett Decl. ¶ 2). Based on this
information, and on limited personal knowledge of Mr. Murray, the CO concluded that Mr.
Murray’s employment with HCS did not present a conflict of interest, significant potential



                                               18
conflict of interest, or potential ethics violation, and did not investigate the matter further. Gov’t
Mot. To Suppl. AR (CO Corbett Decl. ¶ 3-4).

        Mr. Murray’s only apparent contact with members of the SSEB during the period of
competition prior to award occurred at the SSEB’s inspection of HCS’s proposed hotel, on
February 27 or 28, 2012, but after his terminal leave ended. AR Tab 2 at 37; see also Pl. Mot.
JAR Ex. 1 (Lewis Dep. at 10:3-21, 15:2-16:22) (First Sergeant Lewis’s testimony that he did not
have more than a few interactions with Mr. Murray over a three year period including the
competition under the Solicitation).10 Furthermore, Mr. Murray’s June 5, 2012 phone call to a
Command employee, facilitated by First Sergeant Lewis, occurred after Mr. Murray’s terminal
leave had ended, and the competition was over. Mr. Murray also was not involved in the
selection process in his capacity as an SEA, or in the preparation of HCS’s proposal in response
to the Solicitation, in any way, other than in selecting the location of a hotel for the proposal. Pl.
Mot. JAR Ex. 1 (Murray Dep. at 52).

        Command had the burden of identifying “hard facts” to support its allegations of a
conflict of interest or bias on the part of MICC that gave HCS unequal access to information or
an unfair competitive advantage in obtaining the contract award. The court has determined that
Command failed to meet this burden. See PAI Corp., 614 F.3d at 1352 (“To demonstrate that
such a determination is arbitrary or capricious, a protester must identify ‘hard facts’; a mere
inference or suspicion of an actual or apparent conflict is not enough.”); see also C.A.C.I., Inc.-
Fed. v. United States, 719 F.2d 1567, 1581 (Fed. Cir. 1983) (holding that to demonstrate that a
contract award is arbitrary or capricious on the basis of a “possibility and appearance of
impropriety,” a protester must identify “hard facts,” not a mere inference based on “suspicion or
innuendo”).

        The Administrative Record does not set forth any facts evidencing that Mr. Murray
obtained any proprietary information about Command during his visit to its Portland, Oregon
headquarters in 2009. Nor does the Administrative Record show that Mr. Murray used any
proprietary information, if he received any. Although Command refers to four categories of non-
public information that it asserts Mr. Murray obtained during his visit to Command’s Portland
headquarters, Command did not identify “hard facts” demonstrating that he acquired any such
information. With regard to this visit, Mr. Murray testified that he was not presented with any
proprietary information, nor was he or any of the other Army representatives asked by Command
to sign a non-disclosure agreement. As such, Command has not provided any “hard facts” to
establish an actual or apparent conflict of interest.

        In addition, the interactions between Mr. Murray and First Sergeant Lewis with respect to
“recruiting” calls made to a Command employee on June 5, 2012 do not evidence the existence
of bias or a potential conflict of interest, since this event took place after the contract was
awarded and after First Sergeant Lewis’s duties on the SSEB ended. First Sergeant Lewis’s
       10
          In addition, the CO’s declaration provided that she did not “witness any inappropriate
behavior or overhear any inappropriate conversations between any SSEB member and an
offeror’s representative” at any of the on-site evaluations. Gov’t Mot. To Suppl. AR (CO
Corbett Decl. ¶ 6-7).



                                                 19
conduct, however, appears to conflict with his responsibility to MICC in contract administration
and should be further examined. AR Tab 35 at 1868 (Source Selection Participation Agreement
requiring SSEB team members to certify that they will not “discuss evaluation or source
selection matters . . . even after the announcement of the successful contractor” and that they will
“avoid any action, whether or not prohibited, that could result in or create the appearance of my
losing independence or impartiality”); AR Tab 38 at 2162 (SSEB Team Instructions barring
SSEB members from “discussing [information about the evaluation process] or any other type of
information”).11

               2.      Whether MICC’s Inspection Findings Concerning Command’s And
                       HCS’s Proposals Were Unreasonable.

                       a.     The Plaintiff’s Argument.

        Next, Command argues that MICC failed to apply the same inspection standards to both
Command properties and the HCS property and that the debriefing record evidences “numerous
instances of demonstrably erroneous or unreasonable” inspection findings by MICC. Pl. Mot.
JAR at 36. Specifically, Command contends that MICC’s findings regarding such “well-
respected Phoenix landmarks,” as the Crowne Plaza Phoenix and Renaissance Phoenix
Downtown as “unacceptable,” were “objectively erroneous or unreasonable and therefore fail to
comport with the Solicitation evaluation criteria.” Pl. Mot. JAR at 36-37. In support, Command
provides a chart in which it counters many of MICC’s inspection findings regarding weaknesses
or deficiencies of Command’s proposed hotels. Pl. Mot. JAR at 17-24. Command reasons that
these erroneous or unreasonable findings, coupled with the absence of similar assessments of
weaknesses in HCS’s proposal, demonstrate that MICC failed to apply the same inspection
standards to both bidders’ proposed sites, and overlooked actual and readily apparent defects in
HCS’s proposed hotel. Pl. Mot. JAR at 24 (citing AR Tab 50.1-.4 (5/14/12 Anderson Decl.)).
Therefore, Command requests that the court require that MICC conduct a new inspection,
evaluation, and a new best value determination. Pl. Mot. JAR at 37.

                       b.     The Government’s Response.

        With respect to the five Command proposals that were evaluated as “unacceptable,” the
Government responds that each properly was assigned one or more “deficiency” ratings, for
failing to provide information or documents required by the Solicitation. Gov’t Mot. JAR at 27
(citing AR Tab 51). In three proposals, Command failed to provide adequate surveillance system
information, such as the number of cameras and the major points of surveillance, as required by
paragraph 1.2.1 of the Solicitation. Gov’t Mot. JAR at 27-28 (citing AR Tab 3 at 56; AR Tab at
566 (Holiday Inn & Suites Airport North proposal12); AR Tab at 729 (Holiday Inn Phoenix West
       11
          It is unclear to what extent Mr. Lewis was bound by these Instructions after he was no
longer a member of the SSEB.
       12
           Command’s proposal involving Holiday Inn & Suites Airport North also was assigned
a deficiency, because it “failed to provide a lodging facility with interior corridor guest room
entry,” as required by paragraph 5.1.2.4 of the Solicitation (AR Tab 3 at 104). Gov’t Mot. JAR
at 30 (citing AR Tab 51 at 2531). Command did not dispute this deficiency. HCS, on the other


                                                20
proposal); AR Tab at 1163 (Courtyard Scottsdale Old Town proposal)). In addition, as
Command admits, the Renaissance Phoenix Downtown proposal did not have a surveillance
system, a fact that the hotel’s management confirmed during the on-site evaluation. Gov’t Mot.
JAR at 29 (citing Pl. Mot. JAR at 22-23; AR Tab 51 at 2537). Command’s proposal did not
propose to install a surveillance system that would comply with the Solicitation. Gov’t Mot.
JAR at 29. Therefore, the SSEB reasonably concluded that these proposals were incomplete and
assigned each a deficiency. On the other hand, HCS’s proposal complied with the Solicitation’s
security requirements, providing the required number of cameras, their locations within the hotel,
and the standard recording time. Gov’t Mot. JAR at 29 (citing AR Tab 23 at 446).

        In addition, Command’s Crowne Plaza Phoenix Airport proposal failed to provide the
current state health inspection report for the proposed food preparation/dining facility, as
required by paragraph 1.17(a) of the Solicitation (AR Tab 3 at 56). Gov’t Mot. JAR at 30 (citing
AR Tab 51 at 2540). Instead, Command provided a health inspection report for a similarly
named coffee bar, not the restaurant, and the SSEB assigned a “deficiency” to this proposal. AR
Tab 51 at 2540. Command admitted this error, but nevertheless argued that the SSEB “did not
entertain oral presentations or accept proposal revisions during the on-site evaluation.” Gov’t
Mot. JAR at 30. In contrast, HCS’s proposal submitted current state health and inspection
reports for its proposed food preparation and dining facilities. Gov’t Mot. JAR at 30.

        With regard to the weaknesses and significant weaknesses assigned to Command’s
proposals, the Government contends that MICC’s assessments were reasonable and logically-
based. Gov’t Reply at 11. As to “significant weaknesses,” including the SSEB’s finding that
Command’s Holiday Inn Phoenix West proposal did not demonstrate a clear understanding of
the Solicitation’s meals requirement, Command “failed to identify any determining factor
utilized by the Agency’s evaluators that was inconsistent with the stated criteria in the
[S]olicitation.” Gov’t Mot. JAR at 32. Instead, Command “has merely stated a disagreement
with the results of the evaluations. Such disagreement does not meet the burden that the
evaluation was unreasonable.” Gov’t Mot. JAR at 32 (citing Afghan Am. Army Serv.
Corp. v. United States, 90 Fed. Cl. 341, 364 (2009)).

        In addition, the “weaknesses” in Command’s proposals were supported by the Consensus
Evaluation and SSEB Report. AR Tab 51. The Declaration of Brian Anderson, on which
Command relies to contest these findings, discusses his personal observations disagreeing with
the SSEB’s findings, such as the uncleanliness of the bathrooms at Crowne Plaza Phoenix
Airport (AR Tab 50.1 at 2513 (5/14/12 Anderson Decl. ¶ 2)), but does not “disprove the
[contrary] observations of the SSEB team[.]” Gov’t Mot. JAR at 32 (citing AR Tab 51 at 2539-
40). Command’s disagreement with the SSEB and MICC’s evaluation of its proposals, however,
does not properly establish that the agency’s evaluation was unreasonable. Gov’t Mot. JAR at
33.

     With respect to the SSEB’s assessment of a “weakness,” based on findings that three of
Command’s hotels were located in high traffic areas, the Government argues that the SSEB

hand, proposed a hotel “in which all guest rooms are accessed through an interior corridor.”
Gov’t Mot. JAR at 31 (citing AR Tab 13 at 178).



                                               21
appropriately employed personal knowledge and local understanding. Gov’t Reply at 11-12.
With respect to the SSEB’s assessment of a “weakness,” because food preparers at two of
Command’s hotels did not wear gloves, the Government responds that this finding was
inherently, logically, and reasonably related to the Solicitation’s evaluation criteria, since
sanitation and cleanliness were components of Evaluation Factor 1 - Mission Capability. Gov’t
Reply at 12 (citing AR Tab 3 at 60-61 (Evaluation Rating Definitions/Descriptions)). With
respect to the SSEB’s assessment of a “weakness,” to one of Command’s hotels, because an
emergency exit staircase had low railings, “avail[ing] itself to a safety risk,” the rating was
consistent with the Solicitation. Gov’t Reply at 13 (citing AR Tab 2 at 42).

        In addition, even if Command’s proposals were re-evaluated and its ratings improved, “it
has provided no allegations, facts, or law to show it would be next in line for award.” Gov’t
Mot. JAR at 37. Command submitted only one proposal with a lower price than HCS’s
proposal, “and that proposal was deemed ‘Unacceptable’ in its Mission Capability Factor as the
SSEB noted its proposal as having not one, but two deficiencies.” Gov’t Mot. JAR at 37 (citing
AR Tab 51 at 2526-27). On the other hand, HCS received an “Outstanding” Mission Capability
rating with the lowest price of any proposals deemed eligible for award. Gov’t Mot. JAR at 37.
In sum, only two of Command’s proposals were deemed acceptable, but each had numerous
weaknesses and both were more expensive than HCS’s proposal. Gov’t Reply at 10 (citing AR
Tab 39 at 2168-2180). Therefore, Command failed to demonstrate that it has a substantial
chance of award, but for MICC’s alleged evaluation errors.

                      c.      The Plaintiff’s Reply.

        Command replies that with respect to several of MICC’s ratings downgrading
Command’s properties, the Government merely contends that MICC’s hypothesizing regarding,
e.g., commute times longer than thirty minutes, or that MICC has “great discretion,” are ample
justifications for MICC’s findings. Pl. Reply at 10 (citing Gov’t Mot. JAR at 34). With respect
to MICC’s finding that the Crowne Plaza Phoenix emergency exit stairwells “provide a risk of
injury as an applicant could fall or jump over the rail and go several flights down,” AR Tab 20 at
208, Command points out that HCS’s property had the same types of stairwells, as evidenced by
the photograph contained within the declaration of Brian Anderson. Pl. Reply at 11. The
Government’s other responses to the challenged deficiencies are improper attempts to rely on
unstated evaluation criteria to downgrade a proposal, which is forbidden as a matter of law. Pl.
Reply at 10-11 (citing NEQ, LLC v. United States, 88 Fed. Cl. 38, 43 (2009)).

        Furthermore, contrary to the Government’s argument, governing precedent requires that
Command need only show that there was a “substantial chance it would have received the
contract award, but for that error.” Pl. Reply at 9 (quoting Alfa Laval Separation, Inc. v. United
States, 175 F.3d 1365, 1367 (Fed. Cir. 1999)).

                      d.      The Court’s Resolution.

        To prevail in a bid protest, “the complainant must establish by a preponderance of the
evidence that [the] defendant’s actions either lacked a reasonable basis or violated applicable
statutes and regulations.” Afghan Am. Army Serv. Corp, 90 Fed. Cl. at 354 (citing Banknote



                                               22
Corp., 365 F.3d at 1351). Where the court “finds 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 as to the proper administration and application of the procurement
regulations.” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989). There is a
“zone of acceptable results in each particular case,” and the agency's decision must “be the result
of a process that considers the relevant factors and is within the bounds of reasoned decision
making.” Afghan Am. Army Serv. Corp, 90 Fed. Cl. at 355.

         The United States Court of Appeals for the Federal Circuit has held that a proposal that
fails to conform to a solicitation’s material terms and conditions is technically unacceptable and
ineligible for contract award. See E.W. Bliss Co. v. United States, 77 F.3d 445, 448 (Fed. Cir.
1996) (“In negotiated procurements, a proposal that fails to conform to the material terms and
conditions of the solicitation should be considered unacceptable and a contract award based on
such an unacceptable proposal violates the procurement statutes and regulations.”) (internal
citations omitted). In this case, the court has determined that the SSEB properly assigned
“deficiency” ratings to five out of Command’s seven proposals, because they failed to comply
with explicit requirements of the Solicitation with respect to security requirements and health
and inspection reports and therefore were incomplete. AR Tab 3 at 55-56; AR Tab 39 (SSEB
Initial Report); AR Tab 51 (Source Selection Decision). The Solicitation clearly defined a
“deficiency” as a “material failure of a proposal to meet a Government requirement or a
combination of significant weaknesses in a proposal that increases the risk of unsuccessful
contract performance to an unacceptable level.” AR Tab 3 at 60. The Solicitation also defined
an “Unacceptable” proposal as one that “does not meet requirements and contains one or more
deficiencies.” AR Tab 3 at 60. Three of Command’s proposals failed to provide information
required by the Solicitation with respect to details of each hotel’s security surveillance system,
and one proposal’s hotel lacked a surveillance system altogether. AR Tab 51 at 2531, 2533,
2536-37. Another of Command’s proposals lacked a current state health inspection report for the
proposed food preparation and dining facility. AR Tab 51 at 2540. Therefore, based on the
SSEB’s determination that these five proposals failed to comply with explicit terms of the
Solicitation, it was reasonable for the SSEB to assign deficiencies to these proposals, and for the
CO to conclude that these proposals were ineligible for contract award. Moreover, nothing in the
record supports finding that the SSEB and the CO’s conclusions in this regard were arbitrary or
capricious.

        With respect to Command’s two eligible proposals, the court has determined that the
SSEB’s assessments of weaknesses and significant weaknesses with regard to the two hotel
properties offered were reasonable. Although Command challenges many of the SSEB’s
specific inspection findings (Pl. Mot. JAR at 17-24), the majority of these challenges reflect little
more than a disagreement with the SSEB’s on-site evaluations. Mere disagreements with an
agency’s judgment concerning the adequacy of an offeror’s proposal, as a matter of law, do not
“establish that the agency acted unreasonably.” Afghan Am. Army Serv. Corp, 90 Fed. Cl. at 364
(quoting Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377, 384 (2003)).

       With respect to Command’s claims that the SSEB’s inspection standards were
inconsistently applied, the court has determined that Command has failed to meet the burden of
proof required to make such a showing. As the United States Court of Appeals for the Federal



                                                 23
Circuit has stated, “contracting officers have a great deal of discretion in making contract award
decisions, particularly when . . . the contract is to be awarded to the bidder or bidders that will
provide the agency with the best value.” Banknote Corp., 365 F.3d at 1355; see also E.W. Bliss
Co., 77 F.3d at 449 (“Procurement officials have substantial discretion to determine which
proposal represents the best value to the government.”) (citations omitted). Many of the
weaknesses assessed to its proposals, such as Command’s failure to clearly specify where
breakfast would be served in one of the hotels, or the existence of a safety risk with respect to
emergency exit stairwells, were not at issue in HCS’s proposal. See, e.g., AR Tab 2 at 42
(Contracting Officer’s Statement, noting that she did “not recall a similar emergency exit
stairwell at any other hotel evaluated, to include the awardee's facility”). Any evidence in the
record concerning similar weaknesses in HCS’s hotel property, including photographs of worn
carpeting or furniture, without more, does not demonstrate that the SSEB was biased or applied
different standards to HCS’s hotel.

        Finally, Command has not asserted that HCS should have been charged with a
deficiency, since HCS’s proposal complied with the Solicitation’s requirements in all material
respects. The fact that HCS’s proposal was less expensive than any of Command’s proposals not
assigned a deficiency, and therefore eligible for award, further demonstrates that Command was
not prejudiced by the SSEB’s evaluation of weaknesses and significant weaknesses in its offered
hotels. In sum, HCS’s proposal was eligible for award, less expensive, and was technically equal
to or more highly rated than each of Command’s eligible proposals. Even if HCS’s proposal
suffered from some of the same weaknesses as Command’s, as Command now alleges, or if the
Mission Capability ratings of Command’s two eligible proposals were upgraded, giving
Command an overall rating of “Outstanding,” both of Command’s eligible proposals were more
expensive than HCS’s proposal. As such, Command has not established that, but for these
ratings, it would have had a substantial chance at award. As such, Command was not prejudiced
by the SSEB’s or the CO’s conclusions regarding its proposals and the award of a contract to
HCS.

IV.    CONCLUSION.

       For the foregoing reasons, the Government’s December 5, 2012 Cross-Motion For
Judgment On The Administrative Record is granted and Command’s November 21, 2012 Motion
For Judgment On The Administrative Record is denied.

       IT IS SO ORDERED.

                                                     s/ Susan G. Braden
                                                     SUSAN G. BRADEN
                                                     Judge




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