                           REDACTED OPINION

        In the United States Court of Federal Claims
                                    No. 13-20C
                               Filed: April 30, 2013
               Redacted Version Issued for Publication: May 22, 2013 1

    * * * * * * * * * * * * * * *            *
    CADDELL CONSTRUCTION CO., INC.,          *           Post-Award Bid Protest;
                                             *           Cross-Motions for Judgment
                      Plaintiff,             *           on the Administrative Record;
               v.                            *           Standing; Timeliness;
                                             *           Standard of Review; Pre-
    UNITED STATES,                           *           qualification; Percy
                                             *           Amendment; Best-Value
                      Defendant,             *           Trade-Off Analysis; Injunctive
                                             *           Relief; Bid Preparation and
    DESBUILD INCORPORATED–REC                *           Proposal Costs.
    INTERNATIONAL JOINT VENTURE,             *
                                             *
           Defendant- Intervenor.            *
                                             *
    * * * * * * * * * * * * * * *

      Dirk D. Haire, Fox Rothschild, LLP, Washington, D.C., for plaintiff. With him was
Alexa Santora, Fox Rothschild, LLP, Washington, D.C.

        Shari A. Rose, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, D.C., for defendant. With her were
Martin F. Hockey, Jr., Assistant Director, Jeanne F. Davidson, Director, Commercial
Litigation Branch and Stuart F. Delery, Principal Deputy Assistant Attorney General,
Civil Division.

        Lawrence M. Prosen, Thomas Hine, LLP, Washington, D.C., for intervenor.

                                      OPINION

HORN, J.

       Plaintiff Caddell Construction Co., Inc. (Caddell) filed a post-award bid protest in
this court on January 10, 2013, challenging the United States Department of State’s

1
  This opinion was issued under seal on April 30, 2013. The parties were asked to
propose redactions prior to public release of the opinion. This opinion is issued with the
redactions that the parties proposed in response to the court’s request. Where words
have been redacted, it is reflected with the following notation: “[redacted].”
award of a $156 million contract to intervenor Desbuild Incorporated-REC International
Joint Venture (Desbuild-REC) for the construction of a new annex building at the United
States Embassy in Moscow, Russia, pursuant to Solicitation No. SAQMMA-12-R-0117
(the Solicitation). Plaintiff alleges that, but for defendant’s arbitrary and capricious
evaluation of the proposals and violation of statutes and regulations in awarding the
construction project to Desbuild-REC, Caddell would have been evaluated as the
lowest-priced, technically acceptable offeror. Plaintiff seeks permanent injunctive relief,
as well as damages, including bid preparation and proposal costs. The parties have
filed, and fully briefed, cross-motions for judgment on the administrative record, and oral
argument was held.

                                  FINDINGS OF FACT

       On January 31, 2012, defendant issued a “Notice of Solicitation of Submissions
for Construction of the New Annex Office Building at U.S. Embassy in Moscow, Russia,”
(Pre-qualification Notice)2 via a posting on FedBizOpps.3 The Pre-qualification Notice
explained that defendant was requesting submissions to pre-qualify offerors to construct
an annex office building within the United States Embassy compound in Moscow. The
Pre-qualification Notice indicated that “[t]he project solicitation will consist of two
phases:” 1) Pre-Qualification of Offerors, and 2) Requests for Proposals from Pre-
Qualified Offerors. In Phase I, defendant would determine which offerors pre-qualified
for the contract, then, those firms which had pre-qualified would be invited to submit a
Phase II proposal. The Pre-qualification Notice also stated:

       DOS [Department of State] anticipates that a tradeoff process (see FAR
       15.101-1) is in the best interest of the Government. The Government will
       consider award to other than the lowest price offer or other than the
       highest technically rated offer. DOS anticipates that evaluation of technical
       and past performance considerations will play a significant role in the
       selection process.

Defendant’s January 31, 2012 posting on FedBizOpps listed Charles G. Krips4 as
defendant’s “Primary Point of Contact” for the procurement. The Pre-qualification
2
  Plaintiff refers to this document as the “Solicitation” and defendant and intervenor refer
to it interchangeably throughout their briefs as the “Solicitation,” “Prequalification
Solicitation,” and “Prequalification Notice.” The court refers to this document as the
“Pre-qualification Notice” to distinguish between the Notice and the Solicitation, No.
SMQMMA-12-R-0117, which was issued after Phase I of the procurement was
completed.
3
  FedBizOpps is the online database of all federal government contracting opportunities
over $25,000.00 in value. See Info. Scis. Corp. v. United States, 73 Fed. Cl. 70, 76
(2006), recons. in part, 75 Fed. Cl. 406 (2007).
4
 Defendant refers to Mr. Krips as the “Contract Specialist” for the Moscow project. On
various documents in the record which Mr. Krips authored and signed, he listed his title

                                             2
Notice instructed offerors to mail their Phase I submissions to “U.S. Department of
State: Attn: Charles G. Krips,” and to email Mr. Krips any requests for clarification.

       The Pre-qualification Notice stated that three technical evaluation factors would
be considered in Phase I: Factor 1: Joint Venture Agreement/Signed Statement of JV
[Joint Venture] Intent and Description of Partnership (if applicable), Factor 2: Technical
Project Experience and Past Performance, and Factor 3: Business Management Plan
and Organization. Factor 2 was further broken down into two subfactors: Subfactor 2A:
Technical Project Experience, and Subfactor 2B: Past Performance. Each factor was to
be “evaluated on a pass/fail basis.” An offeror that received a failing mark on any of the
three technical factors would be disqualified from the competition, and would not be
allowed to submit a Phase II offer or receive the contract award. The Pre-qualification
Notice explained under Submission Requirements that offerors were responsible for
submitting sufficient documentation for defendant to evaluate the offer under each
technical factor, stating: “Only the information in the submission and any additional
information obtained concerning past performance will be considered during the
evaluation of the Offeror.”5

        Under Factor 1, Joint Venture Agreement/Signed Statement of JV Intent and
Description of Partnership, offerors already organized as joint ventures, or who planned
to form a joint venture for the project, were instructed to submit either a Joint Venture
Agreement or a Statement of Intent to form a joint venture. Joint venture offerors were
asked to “[d]escribe the relationship of the JV parties,” “[i]dentify each JV party’s role,”
and “[i]dentify the type and percentage of work assigned to each JV party.” The Pre-
qualification Notice stated that, for Factor 1: “If the offeror is organized as a Joint
Venture, DOS will evaluate whether the roles and responsibilities of the JV parties
have been adequately described.” (emphasis in original). The Pre-qualification
Notice further indicated that receiving a passing score on Factor 1, Joint Venture
Agreement/Signed Statement of JV Intent and Description of Partnership, was required,
if applicable, in order for defendant to review the remainder of the offeror’s Phase I
submission.

       According to the Pre-qualification Notice, Subfactor 2A, Technical Project
Experience, “is intended to evaluate the technical project experience of the Offeror and
its JV partners, if applicable.” Paragraph 2A.2 of the Pre-qualification Notice defined the

as “Senior Contracting Administrator, Bureau of Overseas Buildings Operations, Office
of Special Projects Coordination.” Mr. Krips seems to have been the main point of
contact for offerors throughout the procurement process, as well as the official within the
Department of State who coordinated the evaluation of offerors’ Phase I and Phase II
submissions. Mr. Krips also made a statement as part of the GAO proceedings, which
as discussed below, defendant argues the court should consider in ruling on the above
captioned protest.
5
  Under Subfactor 2B, Past Performance, the Solicitation stated: “DOS may gather
information from other sources to assist in evaluating the quality of the Offeror’s past
performance.”

                                             3
term “relevant projects” as “those projects similar in scope, complexity, and dollar value
(USD), in that order of importance.” Paragraph 2A.3 instructed offerors to “[s]ubmit
three examples of relevant projects, either on-going or completed within the past five
years, demonstrating the Offeror’s technical capabilities necessary to perform the
Project.” (emphasis in original). In Paragraph 2A.4, offerors organized as a Joint
Venture were instructed to “submit, for each partner, at least one, but no more than two,
example of projects that are relevant to demonstrate technical project experience for the
partners’ proposed role in the Project. Projects may be on-going or completed within
the past five years.” (emphasis in original). According to the Pre-qualification Notice,
because of applicable limits on subcontracting, project examples were intended to
“demonstrate the Offeror’s ability to self-perform at least 30-50% of the value of each
project example,” and, therefore, “[p]roject examples in which the Offeror only acted as
a General Contractor or did not self-perform at least 30% of the work will not be
considered relevant.” The Pre-qualification Notice also stated: “DOS will evaluate the
Offeror’s technical project experience in executing relevant projects. For
Offerors who do not have individual projects representative of the project scope
and complexity, DOS will evaluate the technical project experience demonstrated
by the combined project examples.” (emphasis in original).

        Under Subfactor 2B, Past Performance, offerors were instructed, for any project
in which they had been involved over the past five years, to identify and explain any of
the following problems:

      2B.2.1 Been terminated for default;
      2B.2.2 Been issued a cure notice;
      2B.2.3 Been issued a show cause notice;
      2B.2.4 Been assessed liquidated damages;
      2B.2.5 Had its performance and payment bond surety or bank notified that
      the contractor was not fulfilling its contract obligations;
      2B.2.6 Had its performance evaluated as unsatisfactory or unacceptable[.]

        In addition, for any project listed under Subfactor 2A, Technical Project
Experience, offerors were asked to identify any other type of performance problems.
Offerors were also required to have three previous clients fill out “Past Performance
Questionnaire” forms and to submit those three forms as references. The Pre-
qualification Notice further indicated that defendant would gather information internally
regarding offerors’ compliance with Department of State criteria on previous projects.
The Pre-qualification Notice stated that for Subfactor 2B, Past Performance:

      DOS will evaluate the quality of the Offeror’s past performance-
      based on information submitted for Factors 2B.1. DOS will evaluate
      the Offeror’s record of compliance with Industrial Security and
      Construction Security requirements for Factor 2B.5 [Compliance with
      DOS Criteria] if such experience exists. DOS will evaluate the
      Offeror’s record of project completion and close-out, its approach to
      problem and change resolution, and its responsiveness to issues


                                            4
       and problems raised by OBO [Bureau of Overseas Building
       Operations] for Factor 2B.5 if applicable. Additionally, DOS may
       gather information from other sources to assist in evaluating the
       quality of the Offeror’s past performance.

(emphasis in original).

       With regard to Factor 3, Business Management Plan and Organization, offerors
were told to “provide a brief description of its business management plan for this project
that addresses offeror’s methodology for decision making, personnel management,
team approach, quality assurance, etc. in the execution of the contract scope, schedule,
and cost.” In addition, offerors were instructed to “provide an organizational chart that
clearly depicts organizational structure and describes the relationship of key positions
for construction activities (including all consultants and QC [Quality Control] personnel).”
Offerors organized as joint ventures were to “clearly indicate the allocation of authority
within the JV” in their business plan. The Pre-qualification Notice stated: “DOS will
evaluate whether the Offeror’s proposed business management plan and
organization clearly demonstrate a comprehensive and effective approach for
management and coordination of decision making, project personnel and
development, and control of schedules and costs for this project.” (emphasis in
original).

       The Pre-qualification Notice also indicated that Section 11 of the Foreign Service
Buildings Act of 1926, codified at 22 U.S.C. § 302 (Percy Amendment), applied to the
project. The Pre-qualification Notice stated:

       Section 11 of the Foreign Service Buildings Act of 1926, as amended, (22
       U.S.C. [sic] 302), known as the “Percy Amendment,” applies to this
       project. The act provides a 10% price preference to U.S. firms on any
       Department of State contract when the project is estimated to exceed
       $5,000,000. The Percy Amendment also requires exclusion of firms from
       countries that exclude U.S. firms from their diplomatic construction
       projects. The requirements of the Act will be applied to all Phase II
       proposals received. The Offeror must complete and submit as part of its
       pre-qualification package the “Percy Amendment Certification Form.”
       (The form is attached to this FEDBIZOPPS announcement and may be
       obtained from the DOS Contract Specialist listed at the end of this notice.)
       The form must be completed and included as part of the pre-qualification
       package. If a joint venture is formed, the company having 51 percent or
       greater interest in the JV must be the one completing the form.

(emphasis in original). Non-United States firms could still compete for the contract, but
were not eligible for the ten percent price preference.

       The Percy Amendment Certification Form was attached to the Pre-qualification
Notice. Section (e) of the Percy Amendment Certification Form stated: “By signing this


                                             5
form, the bidder/offeror certifies to the best of its knowledge, all of the representations
and certifications provided in this provision are accurate, current and complete.”
According to the Certification Form, to qualify as an American-owned firm, the offeror
must demonstrate evidence of:

      (1) Performance of similar construction work in the United States or at a
      United States diplomatic or consular establishment abroad; and

      (2) Either --

      (i) Ownership in excess of 50% by U.S. citizens or permanent residents; or

      (ii) Incorporation in the United States for more than three (3) years and
      employment of U.S. citizens or permanent residents in more than half of
      the company’s permanent full-time professional and managerial positions
      in the United States.

        As evidence of “similar construction work,” the Percy Amendment Certification
Form asked offerors to describe “similar construction work in the United States or at a
United States diplomatic or consular establishment abroad,” which must include “one or
more similar projects completed in the United States.” The form required offerors to list
the location, complexity, type of construction, and value of each listed project. If the
offeror was a partner or co-venturer on the previous project, the form asked the offeror
to “indicate the percentage of the project performed by the bidder/offeror:       %.”

        Plaintiff and Desbuild-REC were among the twenty-seven offerors that submitted
Phase I submissions in response to the Pre-qualification Notice. Phase I submissions
were evaluated by defendant’s Pre-qualification Review Panel, which reported its
findings to Mr. Krips. Defendant’s Legal Advisor, Dennis Gallagher, conducted the
initial evaluation of offerors’ eligibility for the Percy Amendment price preference and
directed the memorandum containing his findings to Mr. Krips.

        In plaintiff’s Phase I submission, Caddell indicated that it did not plan to form a
joint venture for the Moscow project, so Factor 1, Joint Venture Agreement/Signed
Statement of JV Intent and Description of Partnership, was not applicable to plaintiff.
Plaintiff’s Phase I submission stated that Caddell “is one of the State Department’s most
experienced and proven prime contractors with more than $2.1 billion in current and
completed embassy and consulate projects (23), almost all design/build.” (emphasis
in original). To satisfy Subfactor 2A, Technical Project Experience, plaintiff submitted
three previous projects: 1) construction of a new office building at the United States
Embassy in [redacted], valued at [redacted], 2) the design/build of a United States
Embassy Complex in [redacted], valued at [redacted], and 3) the design/build of a new
Embassy compound in [redacted], valued at [redacted]. Plaintiff’s Phase I submission
also included a Percy Amendment Certification Form, which listed three previous
projects as evidence of “similar construction work:” 1) the design/build of a [redacted],



                                            6
valued at [redacted], 2) the design/build of a [redacted], valued at [redacted], and 3)
new construction of a [redacted], valued at [redacted].

       In compliance with Subfactor 2B, Past Performance, plaintiff’s Phase I
submission addressed performance issues on all of the projects listed in its submission,
indicating that it had no performance problems to report for the three “relevant projects”
submitted to satisfy Subfactor 2A, Technical Performance Experience. Plaintiff’s Phase
I submission stated that it did not include references because defendant, “[p]er an e-
mail response from Mr. Krips dated February 23, 2012,” had communicated to Caddell
that, because Caddell had submitted references for a different project in the same fiscal
year, defendant would “accept the previously submitted information.” Plaintiff’s Phase I
submission also included a Business Management Plan Narrative and an Organization
Chart in compliance with Factor 3, Business Management Plan and Organization.6

       Intervenor and contract award winner, Desbuild-REC’s, Phase I proposal
included a Joint Venture Agreement, which indicated that Desbuild, Inc. (Desbuild) was
the [redacted] percent majority partner, and REC International (REC) was the [redacted]
percent junior partner in the Joint Venture. The Joint Venture Agreement also stated:

      Desbuild, as the Leader of the Joint Venture, will be authorized for all
      matters concerning the relations with the members of the JV Team. The
      JV Members will be jointly and severally responsible and liable for fulfilling
      the obligations and commitments related to the works which are within the
      scope of works under the Project contract signed; and will not withdraw
      from the Joint Venture before the expiration of the Project contract signed
      with the U.S. Government.

      The Joint Venture Members also agree that all correspondence and
      notifications between the Joint Venture Members, and the Leader of the
      Joint Venture will be deemed to have been sent to the Joint Venture and
      binding for all companies in the Joint Venture.

The Joint Venture Agreement designated Mr. Sami Inanc Yurtbay, Proposal Manger for
REC, to handle pre-qualification and proposal documents on behalf of the Joint Venture.

       To satisfy Subfactor 2A, Technical Project Experience, Desbuild-REC’s Phase I
proposal listed two projects for Desbuild, and three projects for REC as examples of
relevant past projects. For Desbuild, the Joint Venture submitted a [redacted], valued at
[redacted], for which Desbuild was the sole contractor. Under “Description of Project
Scope & Relevancy to Work Required for this Contract,” Desbuild wrote:

      [redacted]



6
  Neither defendant nor intervenor dispute plaintiff’s compliance with Factor 2 or
Factor 3.

                                            7
      Desbuild also submitted a “Design & Build” renovation project at the [redacted],
valued at [redacted], for which Desbuild was also the sole contractor. Under
“Description of Project Scope & Relevancy to Work Required for this Contract,”
Desbuild wrote:

      [redacted]

       Desbuild-REC’s Phase I submission listed three separate examples of relevant
past projects to satisfy Subfactor 2A, Technical Project Experience, for REC:
[redacted].7

        The Desbuild-REC Joint Venture also submitted a Percy Amendment
Certification Form with its Phase I proposal. As evidence of “similar construction work,”
Desbuild listed three projects, one of which, the [redacted] project, which involved the
[redacted],8 Desbuild also had submitted as a “relevant project” to satisfy Subfactor 2A,
Technical Project Experience. Two other projects, however, were included only on
Desbuild’s Percy Amendment Certification Form: the design/build of a new consulate
building in [redacted], valued at [redacted], and an interior/exterior renovation of an
office building in [redacted], valued at [redacted]. Desbuild’s Percy Amendment
Certification Form stated: “Desbuild Inc. was [redacted] JV partner on the project in
[redacted]. On all other projects, Desbuild Inc. was [redacted] owner.” To meet the
statutory requirements, Desbuild’s Percy Amendment Certification Form also indicated
that Desbuild was owned in excess of fifty percent by United States citizens or
permanent residents, and had been incorporated in the United States for more than
three years. Desbuild-REC’s Percy Amendment Certification form was signed by
Desbuild’s Director, Ananth Badrinath, indicating, as stated above, that Desbuild
certified the information provided as “accurate, current, and complete.”

       In compliance with Subfactor 2B, Past Performance, Desbuild-REC’s Phase I
proposal also included information on past performance problems associated with four
of the five projects submitted under Subfactor 2A, Technical Project Experience,
including REC’s [redacted] project in St. Petersburg, Russia, and [redacted] project in
Moscow, Russia, as well as Desbuild’s [redacted] and [redacted] projects. Desbuild-
REC also submitted Past Performance questionnaires for one project previously
performed by Desbuild, and two projects previously performed by REC. Furthermore,
Desbuild-REC’s Phase I submission included a Business Management Plan in
compliance with Factor 3, Business Management Plan and Organization, which detailed
7
  As indicated below, defendant found that REC demonstrated sufficient Technical
Project Experience based on the three submitted projects and plaintiff does not
challenge defendant’s decision that REC submitted projects that were relevant to the
Moscow project to pre-qualify under Subfactor 2A, Technical Project Experience.
8
  In the section of Desbuild-REC’s Phase I submission where the [redacted] project was
listed as a “relevant project” under Subfactor 2A, intervenor called the project a “Design
& Build” contract, but on its Percy Amendment Certification Form, intervenor labeled the
[redacted] project a “Design/Build” project.

                                            8
the organizational structure of the Desbuild-REC Joint Venture. According to the
Business Management Plan, the Desbuild-REC Joint Venture would have an Executive
Committee with [redacted] representatives from each partner firm, which would be
responsible for overseeing the project. The Business Management Plan indicated that
Desbuild-REC would have a Head Office in Washington, D.C., in Desbuild’s existing
office space, while REC’s existing regional headquarters in Moscow would serve as the
Project Support Office, and a Project Site Office would be established at the job site in
Moscow. The Business Management Plan stated that the Head Office in Washington:

      [redacted]

The Business Management Plan indicated that the Project Support Office in Moscow:

      [redacted]

The Business Management Plan indicated that the Project Site Office:

      [redacted]

The Business Management Plan explained that the Project Site Office would be
managed by [redacted]. The Business Management Plan also provided resumés for
[redacted] Senior Project Managers, [redacted] Project Managers, and a [redacted], all
of whom were Desbuild employees, and provided credentials for six REC employees.9

        The administrative record contains conflicting information about how many
offerors pre-qualified in Phase I of the procurement. On April 30, 2012, defendant
posted on FedBizOpps a List of PreQualified Firms-Moscow Annex able to proceed to
Phase II, which indicated that six “U.S. Firms,” and nine “Non-U.S. Firms” had been pre-
qualified. Defendant’s Recommendation for Contract Award, issued after defendant’s
evaluation of Phase II offers, however, stated that only five out of the ten “U.S. Firms”
that submitted Phase I proposals had been pre-qualified, while an additional seven of
the seventeen “non-U.S. firms” that had submitted Phase I proposals had been pre-
qualified. The FedBizOpps List of PreQualified Firms-Moscow Annex listed, 1) AICI-SP,
2) B.L. Harbert International, LLC, 3) Caddell Construction Company, 4) Desbuild-REC
International JV, 10 5) Framco-Kolin-Epik (FKE JV), and 6) Walsh Pernix JV, as “U.S.
Firms” that were permitted to move on to Phase II. The Recommendation for Contract
Award authored by Mr. Krips after the Phase II proposals were submitted, however,
indicated that AICI-SP had submitted a Phase I proposal, but had not been pre-
qualified. Similarly, the FedBizOpps List of PreQualified Firms-Moscow Annex listed the
following nine “Non-U.S. Firms” as pre-qualified firms: 1) Ant Yapi Sanayi ve Ticaret Ltd.
Sti., 2) Kayi Construction Inc., 3) Nurol-Kuanta JV, 4) Rizzani de Eccher, 5) Rasen Story
9
 The specific roles for the six REC employees for the Moscow project were not clearly
delineated in Desbuild-REC’s Phase I Business Management Plan.
10
   As discussed below, Desbuild-REC was originally determined not to be pre-qualified
to move on to Phase II of the contract solicitation.

                                            9
LLC/Rasen Construction/Rasen International Joint Venture, 6) Summa Turizm
Yatirimciligi, 7) TACA Construction Inc., 8) Yuksel Insaat A.S., and 9) Zafer Taahhut
Insaat ve Ticaret. Defendant’s Recommendation for Contract Award, however, showed
that Nurol-Kuanta JV and Yuksel Insaat A.S. had submitted Phase I offers, but had not
pre-qualified. It appears, therefore, that at least five, and possibly six, “U.S. Firms,” and
at least seven, but possibly nine, “Non-U.S. Firms” were allowed to move on to Phase II
of the procurement.

      Caddell received a passing score on each technical factor and an overall rating
of “PASS” for its Phase I submission, pre-qualifying Caddell to submit a Phase II
proposal. Caddell also was found to qualify for the Percy Amendment price preference.

       Desbuild-REC received a “PASS” on Factor 1 of the pre-qualification criteria,
Joint Venture Agreement/Signed Statement of JV Intent and Description of Partnership,
but received a “FAIL” rating on Factor 2, Technical Project Experience and Past
Performance, and thus an overall rating of “FAIL.” Desbuild-REC also did not initially
qualify for the Percy Amendment price preference.

       The story of how, after reviewing Desbuild-REC’s Phase I submission,
defendant’s Pre-qualification Review Panel assigned Desbuild-REC a failing mark for
Factor 2, Technical Project Experience and Past Performance, but Desbuild-REC,
nonetheless, was found to qualify for Phase II and the Percy Amendment price
preference, is far from transparent in the record before the court. In the Initial
Recommendation of defendant’s Pre-qualification Review Panel, addressed to Mr.
Krips, and dated April 4, 2012, the review panel members failed Desbuild-REC on
Factor 2 and stated:

       REC has done projects of similar and greater complexity than the Moscow
       NOX. However, the panel was concerned that Desbuild does not show
       sufficient experience in handling a project of this size based upon the
       examples provided in the prequalification package (examples provided
       include [redacted]. Contractor mentioned some performance problems
       that were, apparently, caused by the client. Initially, three of the 4 team
       members gave the JV a “passing mark” in this category. During the
       consensus meeting there was much discussion about whether or not to
       pass the JV based upon REC International’s experience or not. Also,
       team members were aware of the ongoing project in [redacted] being
       constructed by the [redacted] JV, but no information was provided by the
       contractor in the prequalification package. Even though the [redacted]
       project 11 is in excess of [redacted], it was not evaluated. After much
       discussion, the panel finally decided to not qualify the JV.
11
   The [redacted] project was included in Desbuild-REC’s Phase I submission as an
example of “similar construction work” on Desbuild’s Percy Amendment Certification
Form, but not as a “relevant project” for the purposes of Subfactor 2A, Technical Project
Experience. Mr. Gallagher, therefore, reviewed the [redacted] project for eligibility for
the Percy Amendment price preference, but the [redacted] project was not supposed to

                                             10
The Pre-qualification Review Panel determined that Desbuild-REC did not pre-qualify
for the contract and stated that Desbuild-REC received an overall “FAIL” because
“Desbuild does not have relevant experience.”

        Regarding the Percy Amendment price preference, defendant’s Legal Advisor,
Dennis Gallagher, initially reviewed the pre-qualification packages of ten United States
firms 12 that submitted Phase I proposals to determine if the firms qualified as
“American-owned” under the Percy Amendment. On April 3, 2012, Mr. Gallagher sent a
Review of Percy Qualifications memorandum 13 to Mr. Krips, detailing Mr. Gallagher’s
findings. Mr. Gallagher stated that Desbuild-REC’s eligibility for the Percy Amendment
was a “close call.” He placed a question mark on the line labeled “Yes” for “Qualifies
under Percy,” and wrote under “Comments:” “Desbuild ([redacted]) is U.S. firm and was
minority ([redacted]) partner in [redacted] project, which is similar in size and type of
construction. Other projects not similar. Close call if minority JV partner should be
credited with completion of project, but guess so.” Mr. Gallagher indicated that the
[redacted] project qualified as “similar construction work” for the Moscow project, but
was unsure whether Desbuild should be credited with the [redacted] project for Percy
Amendment purposes, because Desbuild was only a [redacted] joint venture partner.
Mr. Gallagher concluded, that he “guess[ed]” Desbuild-REC should qualify for a Percy
Amendment price preference.

        On April 6, 2012, Mr. Krips sent a letter notifying Desbuild-REC’s representative,
Mr. Yurtbay, that Desbuild-REC did not qualify to submit a Phase II proposal. Mr. Krips’
April 6, 2012 letter explained that Desbuild-REC did not qualify because it had received
a failing mark on Factor 2, Technical Project Experience and Past Performance, stating:

      While REC International produced evidence of performing a project similar
      in scope, complexity, and dollar value of the Moscow NOX [New Office
      Annex] project, Desbuild Inc. did not. Evaluation factor 2A.4 (JV Project
      examples) requires that each partner must show examples of project(s)
      that are similar in scope, complexity and dollar value of the Moscow
      project. The Desbuild projects in [redacted] do not qualify as relevant
      projects.

be reviewed by defendant’s Pre-qualification Review Board while determining whether
Desbuild-REC had sufficient Technical Project Experience to satisfy Subfactor 2A.
12
   The administrative record does not explain why the ten firms were evaluated for
Percy Amendment eligibility, but it seems that all offerors that represented themselves
as United States firms were considered for the Percy Amendment price preference.
13
   The copy of Mr. Gallagher’s memorandum initially submitted in the administrative
record was illegible. The court issued numerous Orders before defendant submitted a
more legible copy and a certified transcription of Mr. Gallagher’s comments regarding
Desbuild-REC.


                                           11
       On April 9, 2012, Desbuild-REC replied to Mr. Krips, requesting a pre-award
debriefing in accordance with Federal Acquisition Regulation (FAR) 15.505 (2012). 14
Desbuild-REC’s April 9, 2012 letter cited to the provision of the Pre-qualification Notice
that stated that defendant could consider offerors’ “combined project examples” and
asked defendant to explain why Desbuild and REC did not collectively meet the
requirements Subfactor 2A, Technical Project Experience. Desbuild-REC also included
a series of fourteen questions it posed to defendant, regarding how defendant had
conducted its evaluation. In addition, Desbuild-REC’s April 9, 2012 letter stated that
Desbuild’s role in the Moscow project would be “limited” and that Desbuild did not intend
to have any United States citizens posted on-site.

      Four days after Desbuild-REC’s letter was sent to defendant, defendant’s
Contracting Officer, Robert Powell, 15 responded to Desbuild-REC. Mr. Powell’s April
13, 2012 letter stated:

      Upon receipt of your letter dated April 9th, our prequalification panel went
      through an extensive reevaluation of the package that you have
      submitted. Following careful consideration, the panel has determined that
      the Desbuild-REC JV is qualified to continue on to the bidding process
      due to the cumulative experience of the JV members.

      However, we have also determined that Desbuild-REC does not qualify
      for the price advantage denoted in the Percy Amendment. The
      amendment specifically requires that the American-owned firm must have
      performance of similar construction work in the United States or at a
      United States diplomatic or consular establishment abroad. While the
14
   In the briefs and at oral argument, plaintiff characterized both the April 9, 2012 and
the April 19, 2012 letters, discussed below, each sent to the defendant, as being sent
solely by REC. At oral argument, however, plaintiff conceded that the letters came from
the joint venture. The letters were on Desbuild-REC Joint Venture letterhead and were
signed by Mr. Yurtbay, who was designated in Desbuild-REC’s Joint Venture
Agreement as the individual responsible for handling all pre-qualification and proposal
documents on behalf of the Joint Venture. Desbuild-REC’s Joint Venture agreement
also stated that “all correspondence and notifications between the Joint Venture
Members, and the Leader of the Joint Venture will be deemed to have been sent to the
Joint Venture and binding for all companies in the Joint Venture.”
15
   Defendant refers to Robert Powell as the Contracting Officer for the Moscow project
and Mr. Powell’s name was listed on the Phase II Solicitation as the Contracting Officer.
The title stated on Mr. Powell’s April 13, 2012 letter was Director, Facilities Design and
Construction Division, Office of Acquisitions Management. This is the first document in
the administrative record to mention Mr. Powell. It is not clear from the record why Mr.
Powell responded to Desbuild-REC instead of Mr. Krips, who, up until that point, had
been the agency’s point of contact for offerors and who authored defendant’s first letter
to Desbuild-REC on April 6, 2012.

                                           12
      [redacted] project is of similar size, scope and dollar value, the fact that
      Desbuild was only a [redacted] partner on the project causes this to not be
      relevant. Therefore, any bid submitted by your firm will be evaluated at the
      price given only.

(emphasis in original). There are no documents included in the administrative record
between Desbuild-REC’s April 9, 2012 letter and Mr. Powell’s April 13, 2012 response.
In the record before the court, therefore, there is no documentation to explain Mr.
Powell’s answers to Desbuild-REC’s questions or why the defendant reevaluated the
intervenor’s submission. There also is no analysis, justification or explanation in the
record for the Department of State’s reversal of its earlier decision to fail Desbuild-REC
on Phase I Factor 2, Technical Project Experience and Past Performance. Moreover,
defendant’s indication in its April 13, 2012 letter that Desbuild did not qualify for the
Percy Amendment price preference because it was not credited with the [redacted]
project differs from the initial, albeit tentative, recommendation by defendant’s Legal
Advisor, Mr. Gallagher. Mr. Gallagher had concluded that he “guess[ed]” Desbuild
should be credited with the [redacted] project and had indicated that Desbuild-REC may
have been able to qualify for the Percy Amendment price preference by placing a
question mark on the line labeled “Yes” under “Qualifies for Percy.” Mr. Powell’s April
13, 2012 letter makes no mention of Mr. Gallagher’s recommendation, therefore making
it unclear who within the Department of State made the determination that Desbuild-
REC should not qualify for the Percy Amendment price preference.

      On April 19, 2012, Desbuild-REC responded to Mr. Powell’s April 13, 2012 letter,
arguing that the “Percy Amendment determination is based on inadvertent errors and a
misunderstanding of Desbuild’s role and the relevant considerations,” and requesting
reconsideration of defendant’s Percy Amendment price preference decision. With
respect to the [redacted] project, Desbuild-REC’s letter stated:

      It is correct that Desbuild was a [redacted] partner on that project.
      However, the [redacted] referred to Desbuild’s overall profit share, not
      Desbuild’s day-to-day role. On that project, Desbuild had a substantial
      staff and had significant responsibilities for numerous highly relevant
      areas including design coordination; project management; onsite
      supervision; material procurement and shipping and selection of local
      vendors and subcontractors.

      Under the prequalification solicitation, project examples for which the
      offeror self-performed at least 30% of the work are considered relevant.
      See Factor 2, ¶ 2A.5 (“Project examples in which the Offeror only acted as
      a General Contractor or did not self-perform at least 30% of the work will
      not be considered relevant.”). This indicated a 30% relevancy test,
      Desbuild meets that requirement for the [redacted] project.

      In the April 19, 2012 letter, Desbuild-REC also argued that crediting Desbuild
with the [redacted] project would be consistent with United States Government


                                           13
Accountability Office (GAO) precedent, as well as prior conduct by defendant on other
projects. For example, Desbuild-REC stated:

      Desbuild - Larsen and Toubro Limited JV was prequalified for the New
      Delhi NOX project in 2011 based on similar past performance where
      Desbuild had served as a [redacted] JV member (Reference -Mumbai
      Project). There is no reason for a different approach here. We believe
      there are many other instances of OBO crediting the prime offeror with the
      past performance of a JV member where the JV member performed
      substantial work, but less than 50%.

Desbuild-REC continued: “Here, the solicitation indicated that past performance would
be considered if the contractor had 30% or more involvement. See Factor 2, ¶ 2A.5.
Certainly, the solicitation did not prohibit consideration and reliance on Desbuild’s
significant [redacted] performance.” Desbuild-REC asserted that Desbuild-REC should
qualify for the Percy Amendment price preference because Desbuild was responsible
for a significant portion of the [redacted] project and because the Pre-qualification
Notice provided that thirty percent was a threshold for being credited with a previous
project. The section of the Pre-qualification Notice that Desbuild-REC cited to, Factor 2,
¶ 2A.5, however, pertained to examples of “relevant projects” under Subfactor 2A,
Technical Project Experience, not to the examples of “similar construction work” for the
purposes of the Percy Amendment.

       Mr. Powell responded to Desbuild-REC four days later on April 23, 2012,
reversing the previous negative Percy Amendment decision. Mr. Powell’s April 23,
2012 letter stated in its entirety: “In discussions with OBO’s legal advisor and under
further review by the pre-qualification panel, we have determined that your Desbuild-
REC is qualified to receive the price advantage denoted in the Percy Amendment.”
(emphasis in original). Similar to the defendant’s unexplained reversal of its
determination to fail Desbuild-REC on Phase I Factor 2, Technical Project Experience,
Mr. Powell’s April 23, 2012 letter did not give any explanation or justification of why
defendant reversed its initial Percy Amendment decision. There are no documents
whatsoever in the administrative record documenting any intervening discussions with
defendant’s legal advisor or contracting officer, nor any “further review by the
prequalification panel.”

       As mentioned above, on April 30, 2012, defendant issued a list of pre-qualified
offerors for the Moscow Project on FedBizOpps entitled “List of PreQualified Firms-
Moscow Annex.” Caddell and Desbuild-REC were both listed as pre-qualified “U.S.
Firms,” although the listing did not mention Percy Amendment eligibility or that
Desbuild-REC was initially rejected for pre-qualification. The “List of PreQualified
Firms-Moscow Annex” indicated that six “U.S. Firms” and nine “Non-U.S. Firms” had
been pre-qualified for the contract.

      Defendant subsequently issued Solicitation No. SAQMMA-12-R-0117 on May 18,
2012. The Solicitation instructed offerors to address offers to Mr. Krips and to contact


                                           14
Mr. Krips for any additional information. Section M of the Solicitation listed the
“Evaluation Factors for Award.” Section M began by explaining the relationship
between Phase I and Phase II of the procurement process, stating: “Offerors have been
prequalified during Phase I of this acquisition. During the prequalification process,
many areas of technical qualifications were evaluated and analyzed. This section
describes additional evaluation factors and procedures.” The Solicitation reiterated that
the contract would be awarded on a best-value basis, stating: “The contract award will
be made to the acceptable, responsible Offeror based on that Offeror’s proposal
which offers to the Government the best value in terms of technical and price
factors.” (emphasis in original). The Solicitation described the trade-off process that
would be used to determine which offer represented the best value to the government,
as follows:

       The Government may consider award to other than the lowest priced
       offeror or other than the highest technically rated offeror based upon the
       evaluation factors and sub factors stated in the solicitation. This source
       selection will be based upon Best Value and may result in an award being
       made to a higher rated, higher priced offeror where the decision is
       consistent with the evaluation factors and where it is deemed by the
       Government that the technical superiority, overall business approach,
       and/or the past performance of the higher priced offer outweighs the
       benefits of any price difference. The Government, using sound business
       judgment, will base the source selection decision on a trade-off analysis of
       the proposals submitted in response to this solicitation in accordance with
       the evaluation factors established for this solicitation.

(emphasis added).

       There were two evaluation factors included in the Phase II Solicitation:
Cost/Price, which was to be addressed in Volume I of offerors’ Phase II proposals, and
Management/Technical, which was to be addressed in Volume 2. The Solicitation
ranked the Management/Technical factor more highly than the Cost/Price factor, stating:
“Proposals shall be evaluated in business management and cost/price areas. The
business management/technical proposal (Volume 2 of proposal) is ranked as
significantly more important than the price proposal (Volume 1 of proposal).”
(emphasis in original). In terms of Cost/Price, the Solicitation stated that “[a] fixed price
is required.” The Solicitation also indicated that six factors would be considered in price
negotiations, if negotiations were required, including: 1) price reasonableness, 2) price
completeness, 3) the government’s evaluation of price proposals, and 4) Percy
Amendment price preferences.16 The Solicitation explained that the Cost/Price factor




16
 The two other factors listed in the Solicitation at sections M.3.1.1.2 and M.3.1.1.5 are
marked “Reserved” in the copy of the Solicitation provided to the court.


                                             15
“will be evaluated based on the total price proposed for performance as specified in
Section B” of the Solicitation.17

       Under the Management/Technical factor, the Solicitation instructed offerors to
include a Management Plan, which was to contain “a general summary outlining your
understanding of the overall scope for construction services.” In addition, the
Management Plan was intended to:

       convincingly demonstrate[] that team members are able to successfully
       perform within the parameters and requirements of the project and to
       resolve problems as they develop during the work. This Plan should
       identify the anticipated overall challenges, such as site, local conditions,
       environmental, personnel, housing, security, shipping, and materials, and
       the like and the plan for adequately managing these challenges.

        Although defendant’s Pre-qualification Notice required offerors to include “a brief
description of its business management plan” in their Phase I submissions, the
Solicitation set forth more detailed requirements for offerors’ Phase II Management
Plan. Specifically, the Solicitation required offerors to address six subfactors in their
Phase II Management Plan: 1) Organization and Staffing Plan, 2) Executive/Supervisory
Personnel, 3) Subcontractor Management Program, 4) Project Execution Plan, 5)
Safety and Health Plan, and 6) Security Plan. The Solicitation explained how defendant
would evaluate each of the subfactors under the Management/Technical factor. With
regard to the Organization and Staffing Plan and Executive/Supervisory Personnel
subfactors, the Solicitation stated:

       The Government’s evaluation will be based on the merit of the
       contractor’s plan for organization and staffing including: (1) having
       key personnel with credentials required for the project including
       relevant experience and skills; (2) having well defined lines of
       authority, responsibility and communication; (3) having the ability to
       quickly respond to changes and mobilize to resolve problems; (4)
       having a sound recruitment plan when additional or replacement
       personnel are needed and a housing plan that addresses the
       requirements of L.24.3.

(emphasis in original).

      The Solicitation stated that defendant’s evaluation of the Subcontractor
Management Program subfactor “will be based on a review of the contractor’s
subcontracting plan and how well the contractor will implement and maintain
surveillance over Subcontractors to ensure performance is consistent with

17
   Section B of the Solicitation set forth a formula for calculating the contract price.
Plaintiff contests only defendant’s determination that Desbuild-REC was eligible for a
Percy Amendment price preference. Therefore, the court does not describe Section B
of the Solicitation in detail.

                                            16
contract requirements.” (emphasis in original). The Project Execution Plan subfactor
would be evaluated “based on appropriateness, realism, comprehensiveness, and
technical soundness of the planned activities that are needed to accomplish the
objectives of the delivery schedule.” (emphasis in original). As to the Safety and
Health Plan subfactor, the Solicitation stated: “The Government shall evaluate
Offeror’s safety, health and sanitation policy in the workplace, and compliance
with U.S. Army Corps of Engineers Safety & Health Requirements Manual EM385-
1-1 and compliance with OSHA [Occupational Safety and Health Administration]
construction industry standards. Comprehensiveness of safety and health
program management elements and safety/health training program content will
be evaluated.” (emphasis in original). The Solicitation also indicated that defendant’s
evaluation of the Security Plan subfactor would be based on “the feasibility of the
Contractor’s Security Plan to assure compliance with contract security
requirements. Evaluation includes comprehensiveness of plan in covering all
facets of security requirements and adequacy of staffing.” (emphasis in original).

        Plaintiff Caddell and Desbuild-REC both submitted Phase II proposals, as did five
other offerors.18 Plaintiff’s and Desbuild-REC’s Phase II submissions were both broken
up into two volumes, as required by the Solicitation, with Volume I addressing the
Cost/Price factor and Volume II addressing the Management/Technical factor. Plaintiff’s
Phase II Cost/Price submission indicated that the “Total Evaluated Price,” which the
Solicitation stated should include the costs for “all elements of the project” except Value
Added Taxes (VAT), was [redacted], and that the “Grand Total Price,” which the
Solicitation indicated should be the “Total Evaluated Price” plus the VAT, was
[redacted]. In addition, plaintiff’s Phase II Cost/Price submission stated that, if plaintiff
were awarded the Moscow contract, plaintiff intended to employ [redacted] United
States citizens, [redacted], and [redacted]. Caddell’s Phase II Cost/Price submission
also included a Percy Amendment Certification Form, which included different project
information than plaintiff’s Phase I Percy Amendment Certification Form. Caddell’s
Phase II Percy Amendment Certification Form listed three projects as evidence of
“similar construction work:” 1) the design/build of a New Embassy Compound in
[redacted], valued at [redacted],19 2) the design/build of a New Embassy Consulate in
[redacted], valued at [redacted], and 3) the design/build of a New Embassy Compound
in [redacted], valued at [redacted].20



18
  The five other offerors included Ant Yapi Sanayi ve Ticaret Ltd., TACA Construction
Inc., Zafer Taahhut Insaat A.S., B.L. Harbert International, LLC, and FKE JV.
19
   The [redacted] project was included in plaintiff’s Phase I submission, but as a
“relevant project” to satisfy Subfactor 2A, Technical Project Experience, rather than on
plaintiff’s Phase I Percy Amendment Certification Form.
20
   As indicated above, plaintiff’s Phase I Percy Amendment Certification Form listed a
design/build project in [redacted], and a design/build and new construction project in
[redacted], as evidence of “similar construction work.”

                                             17
        Plaintiff’s Phase II Management/Technical submission began with a General
Summary Narrative, which indicated that, for the Moscow project, Caddell would be
working with “long-time Caddell project consultant ENKA Construction, based in
Istanbul, Turkey. Caddell has worked with ENKA on 14 major OBO embassy projects.
Most importantly, ENKA is one of the most experienced contractors in Russia and has
had a continual presence in the Moscow market for more than 20 years.” The General
Summary Narrative section of Plaintiff’s Phase II Management/Technical submission
also described plaintiff’s understanding of the scope of the Moscow project and
addressed “Anticipated Challenges & Risks.” Plaintiff’s Phase II Management/Technical
submission went on the address each of the other subfactors required by the
Solicitation, including plaintiff’s Organization and Staffing Plan, Executive/Supervisory
Personnel, Subcontractor Management Program, Project Execution Plan, Safety and
Health Plan, and Security Plan.

       Desbuild-REC’s Phase II Cost/Price submission stated that the “Total Evaluated
Price” of its proposal was [redacted], but that, when including a [redacted] “VAT
Reimbursement Provisional Sum,” the “Grand Total Price” was [redacted]. Desbuild-
REC’s Phase II Cost/Price submission also included a Percy Amendment Certification
Form, which matched the Percy Amendment Certification Form submitted with
Desbuild-REC’s Phase I submission.

       Desbuild-REC’s Phase II Management/Technical submission included a
Management Plan that addressed the “Technical Scope & Risk” of the Moscow project,
as well as the organization of the Desbuild-REC Joint Venture. Desbuild-REC’s Phase
II Management Plan included a list of personnel who would sit on the Joint Venture’s
Executive/Supervisory Panel, as well as a “Staff/Key Personnel (Project Management)
Replacement List,” but it is unclear from the two lists whether the individuals named
were Desbuild or REC employees. Desbuild-REC’s Phase II Management Plan further
stated that REC had [redacted] employees located in Russia, but that head office
personnel would be located in Desbuild’s Washington, D.C. office. In addition, the
Phase II Management Plan indicated that the Joint Venture would hire a minimal
number of United States citizens to work on site because of security clearance
requirements, stating:

       [redacted]

Desbuild-REC’s Phase II Management Plan also addressed each of the other
subfactors required by the Solicitation, including an Organizational and Staffing Plan,
Subcontractor Management Plan, Safety and Health Plan, and Security Plan.

        Defendant first evaluated the seven offerors’ initial Phase II Cost/Price proposals.
Defendant’s Evaluation of the Contractors’ Price Proposals indicated that Caddell’s
initial Phase II proposal had a “Grand Total Contract Price” of [redacted], while
Desbuild-REC’s “Grand Total Contract Price” was evaluated at the higher price of
[redacted]. The Evaluation of Contractors’ Price Proposals noted, however, that
Desbuild-REC’s “Grand Total Contract Price” included a [redacted] VAT reimbursement,


                                            18
while plaintiff “failed to enter VAT number.”21 Defendant’s Office of Cost Management
performed a cost analysis, which it forwarded to Mr. Krips, and which found that,
excluding the Percy Amendment price preference, Ant Yapi’s, Desbuild-REC’s, and
TACA’s offers had the lowest prices.22 The cost analysis stated that, without the VAT,
plaintiff also had one of the lowest prices, but that plaintiff needed to confirm whether its
price included the VAT. The cost analysis then explained that, applying the ten percent,
Percy Amendment price preference for eligible offerors, “DES BUILD [sic] is then
considered best value, provided that CADDELL confirms the inclusion/exclusion of the
VAT cost.”

       Defendant’s Technical Evaluation Board conducted an evaluation of the seven
offerors’ Management/Technical proposals and reported its findings to Mr. Krips. With
regard to plaintiff Caddell’s Phase II Management/Technical submission, the Technical
Evaluation Board gave plaintiff a very positive review, but questioned Caddell’s
[redacted] and its possible impact on completion and price, stating:

       The management plan demonstrates that Caddell has a very good
       understanding of the scope of the project and therefore has developed a
       sound and well thought out approach to managing the various phases of
       the project. The management plan reflects clean lines of authority for the
       team and expresses awareness and firsthand knowledge of the
       challenges posed by undertaking a project in Moscow. Caddell developed
       a very detailed and comprehensive set of anticipated challenges and risks
       and outlined the measures that would be taken to mitigate same. They
       also provided examples of projects with similar circumstances. Caddell
       used good examples to demonstrate how to mitigate subcontractor issues.
       Their proposal was very responsive to the requested details on Project
       Management Manpower resources. Caddell’s familiarity with OBO
       requirements is quite evident in their proposal. The PES [Project
       Execution Schedule] is fairly well thought out. Caddell provided a good
       project schedule narrative and an accompanying Primavera PES as
       required by the RFP. The safety plan included and addressed all OBO
       requirements and proposed the use of a good safety manager. The
       security plan provided is comprehensive and well articulated. Caddell
21
   In its Best and Final Offer, plaintiff corrected its exclusion of a VAT amount in its initial
Phase II proposal. When evaluating price proposals for the offerors’ initial Phase II
offers, however, defendant sometimes compared Caddell’s price exclusive of the VAT
to other offerors’ price including the VAT, which affected the rankings of the offerors’
price proposals. At [redacted], plaintiff’s initial Phase II proposal, excluding the VAT,
was lower than Desbuild-REC’s initial price proposal, excluding the VAT, which was
[redacted].
22
  As indicated above, at this point in the procurement, Caddell’s price was lower than
Ant Yapi’s, Desbuild-REC’s, and TACA’s. Defendant considered Caddell separately for
the purposes of this analysis, however, because of Caddell’s failure to include an
amount for the VAT in its price proposal.

                                              19
      obviously knows our security requirements. The panel has one primary
      concern with the Caddell proposal and its Project Execution Plan
      contained therein. The concern involves the [redacted].

      Caddell is teamed with [redacted]. Caddell has worked on numerous OBO
      projects and has [redacted] of experience working with [redacted].
      [redacted] has a database of skilled workers.

      Both the recruitment and housing plan proposals were considered to be
      acceptable.

      In summary, Caddell and [redacted] have put together a good and
      thorough proposal that clearly meets the intent of the RFP requirements.
      As indicated above their assumption regarding the [redacted] needs to be
      clarified.

        As to Desbuild-REC’s Phase II Management/Technical proposal, the Technical
Evaluation Board also gave the Joint Venture a generally positive review, but
questioned the proposed Project Manager’s previous experience and the location of key
personnel, as well as the citizenship of a key person required to be a United States
citizen. The review stated:

      The proposal reflects a good understanding of the project scope and the
      commissioning requirements. The joint venture developed an impressive
      and very detailed set of anticipated challenges and risks and outlined the
      measures that would be taken to address same. The joint venture partner
      (REC) is a firm licensed in Russia with a vast amount of experience doing
      construction in Russia and in particular, Moscow. The joint venture
      provided a good description of how it will integrate subcontractor work.
      The safety program proposed is more than adequate for a contractor who
      would be self performing all of the work. The security plan is somewhat in
      compliance with OBO procedures.

      The joint venture needs to furnish a few more details regarding the
      projects on which the proposed Project Manager has worked in the past.
      There is no indication of the size, complexity or relevance of those past
      projects. The Organization Chart shows participants located in numerous
      areas. The Deputy Procurement Manager is to be in [redacted] while the
      Procurement Manager is in [redacted]. The Program Manager is to be in
      [redacted] while the Program Manager [sic] is shown in [redacted]. This
      arrangement would appear to be a source of complication during project
      execution.

      Contractor needs to clarify the citizenship of the Safety and Health
      Manager since the Health Plan specifies that the designated manager is to
      be a U.S. citizen.


                                         20
         Clarification is also needed for what the contractor describes as an
         [redacted]. Is this a contractor operated facility and if so what medical
         personnel are going to work there?

         Contractor indicates under the Security Plan that they will “operate” the
         ACF [Access Control Facility]. Their responsibility is only to build and
         maintain the ACF.

         Both the recruitment and housing plan proposals were considered to be
         acceptable.

         The proposal confirms that the Joint Venture fully understands project
         requirements and its complexity. The joint venture has all facilities and
         personnel required and essentially in place. Contractor has full
         understanding of all local codes, laws, regulations and procurement
         logistics.

         Joint venture plans to staff project with a strong team. Proposal displays a
         superior subcontractor management process/program. The proposal
         clearly met RFP requirements.

The Technical Evaluation Board’s overall evaluation of the offerors’ Phase II
Management/Technical submissions was as follows:

         It is the consensus of the TEB [Technical Evaluation Board] that while
         Caddell’s technical proposal is rated slightly higher than Desbuild-REC
         JV’s technical proposal, the TEB feels that these two proposals are
         superior to the other technical proposals and stand in a category of their
         own. It is noted that these two firms are the only ones who are firmly
         established in Moscow and have ongoing construction projects similar in
         scope to the Moscow NOX.

       Defendant established a competitive range for the Moscow project consisting of
three offerors: Caddell, Desbuild-REC, and FKE JV. Defendant determined that
Caddell, Desbuild-REC, and FKE JV should be included in the competitive range
because they each “submitted acceptable technical proposals and competitive prices.”
Mr. Krips prepared defendant’s Competitive Range Determination, which was also
“cleared by” Ezel Silver, “Chair, Technical Evaluation Board,” PK Bagchi, “Project
Manager, Moscow NOX,” and Jamie E. Salcedo, “Director, OBO/PDCS/SPC,” and was
“approved by” Mr. Powell, “Contracting Officer.” The Competitive Range Determination
indicated that the competitive range was established after a meeting was held with
members of the Technical Evaluation Board, during which the offerors’ technical and
price evaluations were discussed.23 Defendant’s Competitive Range Determination
23
     The Competitive Range Determination does not indicate who attended that meeting.


                                             21
stated that, after taking into account the Percy Amendment price preference for
qualifying offerors, plaintiff Caddell’s price was evaluated as the lowest, while Desbuild-
REC’s price was evaluated as the second-lowest. 24 Caddell also received the highest
technical rating, with Desbuild-REC coming in second. The Competitive Range
Determination stated: “Caddell’s technical proposal was rated slightly better than
Desbuild-FKE [sic] JV’s25 technical proposal.” Defendant invited plaintiff, Caddell,
Desbuild-REC, and FKE JV to submit Best and Final Offers, which, after several rounds
of negotiations, all three firms did on September 12, 2012.

       Defendant’s Technical Evaluation Board evaluated the final proposals from the
three offerors included in the competitive range, and reported to Mr. Krips that it had
come to a consensus opinion that Desbuild-REC’s and Caddell’s proposals earned a
rating of “excellent,” while FKE JV’s proposal was rated “satisfactory.” The Technical
Evaluation Board recommended Desbuild-REC for contract award, explaining:

       The consensus report of the initial proposals indicated that Caddell’s
       proposal was rated ever so slightly higher than Desbuild-REC Int’l JV’s
       proposals. However, after holding discussions with the firms in the
       competitive range and evaluating the BAFO [Best and Final Offers]
       technical proposals, both firms are rated equally qualified from the
       technical standpoint. The TEB is confident that both Desbuild-REC Int’l
       JV and Caddell have the technical capability to successfully construct the
       NOX contract and any differences in their technical proposals are
       insignificant. After reviewing the BAFO prices, the TEB recommends that
       the Contracting Officer select Desbuild-REC Int’l JV for contract award
       because it offers the best value to the Government.

        Defendant’s Summary of Cost Proposals, issued on September 13, 2012, listed
the initial proposal amounts and Best and Final Offers for each of the three offerors in
the competitive range, all exclusive of the VAT and the Percy Amendment price
preference. The Summary of Cost proposals indicated that Desbuild-REC JV’s initial
proposal had been [redacted], but its Best and Final Offer was [redacted] lower, 26 giving
Desbuild-REC the lowest final price of [redacted]. Plaintiff [redacted] its initial proposal,

24
   The Competitive Range Determination used for its price evaluation the offerors’ prices
excluding the VAT and the Percy Amendment price preference, such that Caddell’s
offer was priced at [redacted] and Desbuild-REC’s offer was priced at [redacted]. Once
the Percy Amendment price preference was applied, Caddell’s price fell to [redacted]
and Desbuild-REC’s price was [redacted].
25
   The reference to “FKE” appears to be an error. The document includes the correct
name for Desbuild-REC in the line above, and listed FKE JV as the third and separate
offeror in the competitive range.
26
  In fact, the difference between Desbuild-REC’s initial and its best and final offer prices
was [redacted].

                                             22
making plaintiff’s final price [redacted]. Finally, FKE JV’s offer was priced higher than
both plaintiff’s and Desbuild-REC’s, with a final price of [redacted].

       The Director of the Office of Cost Management sent a Memorandum to Mr. Krips,
containing a cost analysis of the three Competitive Range offerors’ Best and Final
Offers. The Office of Cost Management’s cost analysis used the offerors’ prices
including the VAT, but did not take into account the Percy Amendment price preference.
Desbuild-REC’s Best and Final Offer, including the VAT, was [redacted], making it the
lowest-priced final offer. Caddell’s Best and Final Offer, including the VAT, was
[redacted] and FKE JV’s Best and Final Offer, including the VAT, was the highest-priced
at [redacted]. Based on these numbers, the Office of Cost Management found: “the
proposal submitted by the lowest bidder, DESBUILD REC at [redacted] represents the
best value offer and therefore recommends acceptance.”

       Mr. Krips then authored an “ACTION MEMORANDUM FOR ROBERT R.
POWELL - SOURCE SELECTION AUTHORITY,” which was titled “Recommendation
for Contract Award - Construction of New Annex Office Building, Moscow, Russia.”
(emphasis in original). Mr. Krips’ Recommendation for Contract Award is undated. Mr.
Krips’ Recommendation for Contract Award indicated that defendant should select
Desbuild-REC for award of the contract because its submission represented the best
value to the government. Mr. Krips’ Recommendation for Contract Award included a
section on “Background Information,” which summarized defendant’s evaluation of
proposals.    Significantly, the Background Information section did not mention
defendant’s initial decision not to pre-qualify Desbuild-REC, or defendant’s initial denial
of a Percy Amendment price preference to Desbuild-REC, but instead listed Desbuild-
REC as one of the “U.S. Firms” that pre-qualified for the contract. Regarding
defendant’s evaluation of the Phase II submissions, Mr. Krips’ Recommendation for
Contract Award indicated that a competitive range consisting of three firms had been
established and that each of the three firms had submitted final proposals. Describing
the Technical Evaluation Board’s review of the offerors’ final proposals, Mr. Krips’
Recommendation for Contract Award stated:

      Going into the final round, Caddell’s and Desbuild-REC JV’s technical
      proposal were rated almost equal [sic] with Caddell’s technical proposal
      receiving a very slight higher rating. FKE JV was rated somewhat lower
      than Caddell and Desbuild-REC JV. After the review of the final proposals,
      the TEB found that Caddell and Desbuild were rated almost equal.

Mr. Krips’ Recommendation for Contract Award explained that the contract would be
awarded on a best-value basis with technical criteria being “significantly more important
than price criteria.” Mr. Krips’ Recommendation for Contract Award stated that Caddell
and Desbuild-REC were both ranked number one on technical rankings, with FKE JV
ranked number two, and that Desbuild-REC had the lowest price once the offerors
made their Best and Final Offers. Mr. Krips’ Recommendation for Contract Award used
the offerors’ Best and Final Offers including the VAT, but excluding the Percy
Amendment price preference, for its price analysis. Therefore, it listed Desbuild-REC’s


                                            23
price as [redacted], Caddell’s as [redacted], and FKE JV’s as [redacted]. Mr. Krips’
Recommendation for Contract Award also indicated that defendant had used a trade-off
process27 to determine which proposal represented the best value to the government,
and had found:

       In this instance, the contractor that submitted the highest rated technical
       proposal also submitted the most reasonable price. Therefore, it is
       recommended that a fixed price contract be awarded to Desbuild-REC JV
       in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
       proposal represents the best value to the U.S. Government.

Based on the recommendations of both the Technical Evaluation Board and the Office
of Cost Management, Mr. Krips recommended that the Contracting Officer, Mr. Powell,
select Desbuild-REC for contract award.

        The top of the first page of Mr. Krips’ Recommendation for Contract Award reads
“ACTION MEMORANDUM FOR ROBERT R. POWELL - SOURCE SELECTION
AUTHORITY.” The summary recommendation is next and followed by two side by side
lines, one preceded by the word Approve           , and the second Disapprove         . Next
to the words “ROBERT R. POWELL - Source” (“Selection Authority” is on the next
line) the initials “RRP” (presumably Robert R. Powell) are initialed. Similarly, the initials
“CK” are written in above the line that reads “FROM: OBO/PDCS/SPC – Charles G.
Krips.” It, therefore, appears that Mr. Powell and Mr. Krips each initialed Mr. Krips’
Recommendation for Contract Award. There also is a box checked “Approve,” which
seems to be in the same writing as the “RRP.” There are no documents included in the
record between Mr. Krips’ Recommendation for Contract Award and the signed contract
awarded to Desbuild-REC on September 26, 2012, nor any narrative which indicated
why Mr. Powell approved Mr. Krips’ Recommendation or decided why Desbuild-REC
should be selected for the contract award. The only documented rationale for
defendant’s decision to award the contract to Desbuild-REC was the recommendation
authored by Mr. Krips.

       The signed contract between the government and Desbuild-REC, dated
September 26, 2012, suggests a further wrinkle. Under section “31a. NAME OF
CONTRACTING OFFICER,” the contract lists “Robert Powell.” One line below,
however, a different name, David W. Vivian, was signed in section 31b., as the
signatory for the United States of America. This is the first mention of David W. Vivian
in the chronology of events regarding the selection process for the contract.
Defendant’s subsequent September 26, 2012 letter to Desbuild-REC, informing
Desbuild-REC that it had been awarded the contract, was also signed by “David W.
27
   It is unclear why defendant engaged in a best-value, trade-off process when Mr. Krips
concluded that Desbuild-REC was both the lowest-priced and highest technically rated
offeror. Applicable regulations incorporated into the Pre-qualification Notice state: “A
tradeoff process is appropriate when it may be in the best interest of the Government to
consider award to other than the lowest priced offeror or other than the highest
technically rated offeror.” 48 C.F.R. § 15.101-1 (2012).

                                             24
Vivian, Contracting Officer.” These are the only two items in the administrative record in
which Mr. Vivian’s name appears. Moreover, defendant’s letters to FKE JV and
Caddell, informing them that they had not been awarded the contract, were signed by
“Robert R. Powell, Contracting Officer.” The record before the court does not explain
the relationship between, or decisional responsibilities of, Mr. Powell and Mr. Vivian or
why Mr. Vivian signed the contract at issue in this case.

        Defendant awarded the contract to Desbuild-REC on September 26, 2012, and
plaintiff was notified of the award on the same day. Plaintiff and defendant held a
telephone debriefing on October 1, 2012, with Mr. Krips and Project Manager for the
Moscow project, PK Bagchi, representing the Department of State. Mr. Krips authored
a memorandum for the file summarizing the phone call. During the debriefing, Caddell’s
CEO, Eddie Stewart, asked about Desbuild-REC’s past experience and questioned how
Desbuild-REC pre-qualified for the contract. Mr. Krips’ memorandum stated: “I told him
that the Desbuild-Renaissance28 JV was prequalified, not Desbuild alone.” Caddell also
raised questions about Desbuild-REC’s “similar construction work” for the purposes of
Percy Amendment qualification. Mr. Krips’ memorandum stated: “I told him that the
Department of State Office of the Legal Advisor made all Percy qualifications, and that
the technical panel had no input on this.”

       On October 5, 2012, plaintiff protested the award of the contract to Desbuild-
REC at the GAO. Plaintiff raised four specific grounds in its protest at the GAO: 1)
Desbuild-REC had not performed “similar construction work” for purposes of meeting
the Percy Amendment requirements, 2) the award was made to a different entity than
the entity that submitted the proposal,29 3) Desbuild-REC did not have sufficient
technical experience to perform the contract, and 4) defendant misapplied the
evaluation criteria by using adjective ratings as opposed to making a pass/fail
determination for Phase I. 30 Desbuild-REC intervened in the GAO proceedings.
28
   REC is the parent company of two subsidiaries, 1) Renaissance Construction and
Investment ZAO/Moscow, and 2) Renaissance Construction ZAO/St. Petersburg. Mr.
Krips’ reference to Renaissance, therefore, appears to be to REC.
29
   Plaintiff claimed that Desbuild-REC listed its address in its Phase I submission as
Refik Galendir Sokak No: 110/1, Ankara, Turkey, but that defendant’s September 26,
2012 letter to Desbuild-REC, awarding the contract to Desbuild-REC, was sent to 4744
Baltimore Avenue, Hyattsville, Md. 20781-2225. Plaintiff suggested that this established
that award was made to a different entity than that which was pre-qualified in Phase I.
30
   Plaintiff argued that the Pre-qualification Notice stated that the pre-qualification
factors would be evaluated on a pass/fail basis, but that, during plaintiff’s debriefing,
defendant indicated that Desbuild-REC’s Phase I submissions “contributed to Desbuild -
Renaissance’s ‘Excellent’ rating for Phase II.” Plaintiff argued that “[b]ecause Percy
Amendment requirements and ‘relevant project’ information from Phase I was to be
evaluated on a pass/fail basis only, any further comparison between the offerors’
experience or assigning an adjective rating based on prior experience violates the
Solicitation’s stated evaluation criteria.”

                                           25
       As part of the GAO record, defendant submitted a Department of State Agency
Report dated November 5, 2012. The Department of State Agency Report tried to
address the issue of defendant’s initial determinations that Desbuild-REC failed Phase I
Factor 2, Technical Project Experience, and was not eligible for the Percy Amendment
price preference, as well as its subsequent reversals of both decisions.

       Also contained in the GAO Record is a statement drafted after contract award,
for the GAO proceedings, by defendant’s Contract Specialist, Mr. Krips, regarding
defendant’s procurement process. Mr. Krips stated:

       The prequalification process is not the competitive RFP phase. The whole
       intent of this phase is to identify qualified potential offerors to promote
       competition. The prequalification process involves give and take and
       sometimes communications with potential offerors to seek clarifications or
       additional information. It is common and is not prohibited by the terms of
       our solicitations for the Department to consider information outside the
       prequalification submission in determining offeror eligibility under the
       Omnibus Diplomatic Security Act (22 U.S.C. [sic] 4852) and offeror
       eligibility for the Percy Amendment price preference.

Mr. Krips further indicated:

       It is also common for the Department [of State] to reconsider decisions to
       deny eligibility under 22 U.S.C. [sic] 4852 or price preference under the
       Percy Amendment when an adversely affected potential offeror requests
       reconsideration and supplies additional information.

       In the present case, the Department first reconsidered the experience of
       the Desbuild-REC International joint venture based on the overall
       experience of both joint venture partners, then reconsidered the Percy
       Amendment price preference eligibility of the joint venture based on
       Desbuild’s performance on the [redacted] project. The [redacted] project
       is itself clearly a similar project and we determined that Desbuild’s work on
       that project was substantial. As indicated in the [redacted] example, 31
       there is absolutely no requirement that work as a minority joint venture
       partner be excluded from consideration.

       At the GAO, defendant argued that plaintiff’s GAO protest should be dismissed
as untimely because plaintiff knew no later than April 30, 2012, before defendant issued
the Phase II Solicitation, that Desbuild-REC had been pre-qualified and been
designated a “U.S. Firm,” and, thus, was eligible for a Percy Amendment price
preference. Defendant argued that any protest challenging Desbuild-REC’s eligibility for
31
   Elsewhere in his statement, Mr. Krips indicated that [redacted] was determined to be
eligible for a construction project at the [redacted] based on its performance as a
minority joint venture partner in a construction project at the [redacted].

                                            26
Phase II had to be filed before submission of Phase II proposals. The GAO agreed and
on January 7, 2013, the GAO issued a decision, finding that plaintiff’s protest was
untimely. The GAO stated: “Where a solicitation provides notice than an agency
considers a particular firm to be eligible to compete, and a potential protestor believes
the firm is ineligible, a protest must be filed before the next due date for submission of
proposals.” The GAO found that, because defendant had issued a list of pre-qualified
“U.S. Firms” in April 2012, it should have been clear to plaintiff that Desbuild-REC would
qualify for the Percy Amendment price preference. The GAO determined that publicly
available information “(which was available to Caddell in April 2012) was sufficient to put
Caddell on notice of its ground of protest.” The GAO stated: “Because the agency
announced that Desbuild-REC was considered to be a prequalified ‘U.S. Firm’ prior to
the due date for phase 2 proposals, Caddell was required to protest Desbuild-REC’s
status as an American-owned firm under the Percy Amendment prior to this due date.”
The GAO dismissed plaintiff’s protest as untimely because it was not filed until after the
contract had been awarded to Desbuild-REC and because plaintiff’s other grounds for
protesting the contract award were, in the words of the GAO, “variations” of its Percy
Amendment argument, or had been waived.

         Plaintiff’s counsel made several conflicting statements at oral argument before
this court about when plaintiff found out that defendant had reversed its initial decisions
to deny Desbuild-REC pre-qualification and a Percy Amendment price preference.
Initially, plaintiff’s counsel stated that plaintiff learned about its arguments regarding
defendant’s reversals at plaintiff’s debriefing. Plaintiff’s counsel then stated that plaintiff
did not learn about defendant’s reversal decisions “until we filed the GAO protest.” From
the record before the court, it appears that the first time plaintiff was informed that
defendant had reversed itself on both Desbuild-REC’s pre-qualification and Percy
Amendment determinations was when it received the Department of State’s Agency
Report, dated November 5, 2012, as part of the GAO proceedings. Although it appears
that Caddell asked defendant about Desbuild-REC’s prequalification and Percy
Amendment eligibility during plaintiff’s debriefing, Mr. Krips indicated in his
memorandum summarizing the debriefing that he only told Caddell that “Desbuild-
Renaissance JV was pre-qualified, not Desbuild alone,” and that “the Department of
State Office of the Legal Advisor made all Percy qualifications.” In addition, plaintiff did
not raise the issue of defendant’s reversal decisions before the GAO, which,
presumably, it would have, had Caddell been aware of the Department of State’s rapid
reversals of two initial, eligibility determinations regarding the winning offeror.

       Plaintiff filed a post-award bid protest in this court on January 20, 2013. Plaintiff
challenges three decisions made by defendant during the procurement process as
arbitrary, capricious, an abuse of discretion, and not in accordance with law and
prejudicial to Caddell: 1) defendant’s decision to pre-qualify Desbuild-REC, 2)
defendant’s decision to apply a ten percent, Percy Amendment price preference to
Desbuild-REC’s Phase II price proposal, and 3) defendant’s decision to award the
contract to Desbuild-REC. Plaintiff seeks: 1) injunctive relief,32 2) a declaratory
32
   Plaintiff’s complaint seeks a preliminary injunction “requiring the United States to
issue a stop work order on Desbuild-REC’s performance of the Contract.” Plaintiff’s

                                              27
judgment that awarding the contract to Desbuild-REC was contrary to law, 3) a
declaratory judgment that defendant should terminate the existing contract with
Desbuild-REC, 4) a declaratory judgment that plaintiff should be awarded the contract,
5) bid preparation and proposal costs, attorneys fees, and other costs, as well as 6)
other relief that the court deems proper. Defendant argues that the administrative
record demonstrates that: 1) defendant reasonably determined that Desbuild-REC was
pre-qualified to submit a Phase II proposal, 2) defendant reasonably determined that
Desbuild-REC was eligible for a Percy Amendment price preference, and 3) defendant’s
award of the contract to Desbuild-REC was rational and supported by the record, as
well as applicable law.


                                       DISCUSSION

Standing

        The Tucker Act grants the United States Court of Federal Claims “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.” 28 U.S.C. § 1491 (a)(1) (Supp.
V 2011). In order to have standing to sue as an “interested party” under this provision,
a disappointed bidder must show that it suffered competitive injury or was “prejudiced”
by the alleged error in the procurement process. See Todd Constr., L.P. v. United
States, 656 F.3d 1306, 1315 (Fed. Cir. 2011) (To prevail, a bid protester must first
“‘show that it was prejudiced by a significant error’ (i.e., ‘that but for the error, it would
have had a substantial chance of securing the contract).’” (quoting Labatt Food Serv.,
Inc. v. United States, 577 F.3d 1375, 1378, 1380 (Fed. Cir. 2009))); Blue & Gold Fleet,
L.P. v. United States, 492 F.3d 1308, 1317 (Fed. Cir. 2007); see also Linc Gov’t Servs.,
LLC v. United States, 96 Fed. Cl. 672, 693 (2010) (“In order to establish standing to
sue, the plaintiff in a bid protest has always needed to demonstrate that it suffered
competitive injury, or ‘prejudice,’ as a result of the allegedly unlawful agency decisions.”
(citing Rex Serv. Corp. v. United States, 448 F.3d 1305, 1308 (Fed. Cir. 2006);
Statistica, Inc. v. Christopher, 102 F.3d 1577, 1580–81 (Fed. Cir. 1996); Vulcan Eng’g
Co. v. United States, 16 Cl. Ct. 84, 88 (1988); Morgan Bus. Assocs., Inc. v. United
States, 223 Ct. Cl. 325, 332, 619 F.2d 892, 896 (1980))). In order to establish what one
Judge on this court has called “allegational prejudice” for the purposes of standing, the
bidder must show that there was a “substantial chance” it would have received the
contract award, but for the alleged procurement error. See Linc Gov’t Servs., LLC v.
United States, 96 Fed. Cl. at 675; see also Bannum, Inc. v. United States, 404 F.3d
1346, 1358 (Fed. Cir. 2005); Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,
1331 (Fed. Cir.), reh’g denied (Fed. Cir. 2004); Info. Tech. & Applications Corp. v.
United States, 316 F.3d 1312, 1319 (Fed. Cir.), reh’g and reh’g en banc denied (Fed.
Cir. 2003); Statistica, Inc. v. Christopher, 102 F.3d at 1581; Lab. Corp. of Am. v. United

motion for judgment on the administrative record, however, states that “the Court should
permanently enjoin Desbuild-REC’s performance of the Contact.”

                                             28
States, 108 Fed. Cl. 549, 557 (2012). Because standing is a jurisdictional issue, this
showing of prejudice is a threshold issue. See Info. Tech. & Applications Corp. v.
United States, 316 F.3d at 1319; Myers Investigative & Sec. Servs., Inc. v. United
States, 275 F.3d 1366, 1370 (Fed. Cir. 2002).

        In the above captioned protest, defendant and intervenor do not challenge
plaintiff’s standing. Because it is a jurisdictional issue, however, the court briefly
addresses whether plaintiff is an “interested party” to this contract. See USfalcon, Inc.
v. United States, 92 Fed. Cl. 436, 451 (2010) (“Even though the government does not
challenge USfalcon’s standing, the Court finds it advisable that this jurisdictional
question be explicitly determined.”). Plaintiff was one of three offerors included in the
final competitive range for the Moscow contract because, defendant found, each of
those three offerors had “submitted acceptable technical proposals and competitive
prices.” Defendant’s Technical Evaluation Board found that plaintiff’s and Desbuild-
REC’s final proposals both earned a rating of “excellent,” while the third offeror, FKE JV
submitted a proposal that was rated “satisfactory.” Defendant’s Recommendation for
Contract Award stated that plaintiff’s and Desbuild-REC’s offers were equally rated on
technical factors, and that together they stood apart from the rest of the Phase II offers,
although the Technical Evaluation Board had also stated Caddell’s technical proposal
should be rated slightly higher than Desbuild-REC’s technical proposal. The
Recommendation for Contract Awarded indicated that the reason Desbuild-REC’s
proposal was selected for contract award was its lower price. Stating that the
Consensus Technical Rankings put Caddell and Desbuild-REC both at number one,
with FKE JV ranked number two, the Recommendation for Contract Award concluded:

       In this instance, the contractor that submitted the highest rated technical
       proposal also submitted the most reasonable price. Therefore, it is
       recommended that a fixed price contract be awarded to Desbuild-REC JV
       in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
       proposal represents the best value to the U.S. Government.

        From the record, it is clear that plaintiff’s proposal was rated equally with, if not
slightly better than, Desbuild-REC’s on the technical criteria and that plaintiff’s had the
second-lowest, and relatively close, price of [redacted]. Had Desbuild-REC not been
pre-qualified and, therefore, not been allowed to submit a Phase II proposal, or had
Desbuild-REC not been eligible for a Percy Amendment price preference, plaintiff’s
Phase II offer likely would have been both the highest-rated and lowest-priced offer.
Based on these facts, there was a substantial chance that plaintiff would have received
the contract for the Moscow project, but for defendant’s alleged procurement errors.


Timeliness

      Desbuild-REC argues that plaintiff’s claims should be dismissed as untimely
because every claim plaintiff has filed with the court could have been raised as of April
30, 2012, the date on which defendant published a list of offerors that pre-qualified for
the procurement and for a Percy Amendment price preference on FedBizOpps.

                                             29
Intervenor asserts that, in Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, the
United States Court of Appeals for the Federal Circuit established a waiver rule, under
which a party who had the opportunity to object to an alleged flaw in an agency’s
solicitation before the close of the bidding process, but failed to do so, waives its ability
to raise that same objection later in a bid protest in this court. Id. at 1313. Intervenor
also argues that, in subsequent cases, this waiver rule has been extended to
circumstances similar to those presented by the present case, citing CRAssociates, Inc.
v. United States, 102 Fed. Cl. 698, 712 (2011), aff’d, 475 F. App’x 341 (Fed. Cir. 2012).
According to intervenor, as of April 30, 2012, the date the List of PreQualified Firms-
Moscow Annex was published on FedBizOpps, plaintiff knew that Desbuild-REC had
been pre-qualified and had been granted a Percy Amendment price preference.
Intervenor argues that plaintiff had sufficient information to either request a debriefing or
file a protest at that time, but plaintiff chose to proceed to Phase II, and, thereby, waived
its ability to raise its claims in this court subsequent to the award of the contract.

         Plaintiff responds that when the FedBizOpps List of PreQualified Firms-Moscow
Annex was published it did not know that both Desbuild-REC’s past performance
negative decision and Percy Amendment price preference denial had been reversed by
the Department of State. Moreover, plaintiff argues that the waiver rule established in
Blue & Gold Fleet, L.P. v. United States is limited to circumstances in which the party
objects to “the terms of a government solicitation containing a patent error.” Citing to
J.C.N. Construction, Inc. v. United States, 107 Fed. Cl. 503, 516 (2012), plaintiff argues
that CRAssociates v. United States does not create a broader waiver rule than Blue &
Gold Fleet, L.P. v. United States. Plaintiff argues that the waiver rule cited by intervenor
does not apply in this case because plaintiff is not challenging defendant’s Solicitation,
but rather challenges defendant’s evaluation of Desbuild-REC’s Phase I submission and
defendant’s award decision. Plaintiff maintains that it had no knowledge of, and could
not have obtained, information that defendant had reversed its initial decisions on
Desbuild-REC’s pre-qualification or Desbuild-REC’s Percy Amendment price preference
eligibility until after plaintiff filed a protest at the GAO and received the Department of
State’s Agency Report, dated November 5, 2012. Also according to plaintiff, Caddell
could not have requested a debriefing prior to the close of bidding because Caddell was
still in consideration for the contract, and defendant could not have made available
necessary information about Desbuild-REC’s confidential proposal information.
Therefore, according to plaintiff, it was impossible for plaintiff to challenge the agency’s
decisions any earlier than it did.

       In Blue & Gold Fleet, L.P. v. United States, the plaintiff challenged the National
Park Service’s award of a contract to Hornblower Yachts, Inc. (Hornblower) for ferry
services to Alcatraz Island. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d at
1310-11. The plaintiff argued that Hornblower’s proposal did not include employee
wage and benefits information required by the Service Contract Act, thus making the
Park Service’s evaluation of the cost of Hornblower’s proposal flawed. See id. at 1312.
The solicitation, however, “did not include any requirement that the bidders consider the
Service Contract Act,” id. at 1313, and the plaintiff had not raised any objection to the
exclusion of Service Contract Act requirements from the Solicitation prior to the


                                             30
submission of proposals. Therefore, the United States Court of Appeals for the Federal
Circuit found that the plaintiff actually was challenging the terms of the solicitation, not
the agency’s evaluation of Hornblower’s proposal. See id. The Federal Circuit wrote:

       [A] party who has the opportunity to object to the terms of a government
       solicitation containing a patent error and fails to do so prior to the close of
       the bidding process waives its ability to raise the same objection
       subsequently in a bid protest action in the Court of Federal Claims.

Id. The court reasoned that such a waiver rule, “requir[ing] that a party object to
solicitation terms during the bidding process,” furthered the mandate in 28 U.S.C.
§ 1491(b) that “the courts shall give due regard to the interests of national defense and
national security and the need for expeditious resolution of the action.” Id. (citing 28
§ 1491(b)(3)) (emphasis in original). Therefore, Blue & Gold Fleet, L.P. v. United States
established a waiver rule, but one that only clearly applied to plaintiffs’ challenges to the
terms of a solicitation, not to challenges to alleged errors in an evaluation of offerors’
submissions.

        Intervenor argues that a subsequent case, CRAssociates, Inc. v. United States,
102 Fed. Cl. 698, extends the waiver rule established in Blue & Gold Fleet, L.P. v.
United States to the instant circumstances. In CRAssociates, Inc. v. United States, the
plaintiff challenged the Army’s award of a contract for health care services to Spectrum
HealthCare Resources (Spectrum). See id. at 700. The Army initially awarded the
contract to Spectrum and Spectrum began performance. Three months later, however,
the plaintiff successfully challenged the contract award in this court. Id. at 705-06. The
Army issued a stop work order, re-opened negotiations, both the plaintiff and Spectrum
re-competed for the contract, and the Army selected Spectrum for contract award for a
second time. See id. at 706-09. The plaintiff then filed a second bid protest, arguing
that Spectrum had gained an unfair advantage in the second award competition from its
three-month partial performance of the first contract. See id. at 711. The court
explained that, when the plaintiff decided to re-compete for the contract, the plaintiff had
requested that the Army amend the Request for Proposals to address Spectrum’s
alleged unfair advantage resulting from its partial performance of the contract. The
Army amended the Request for Proposals, but did not address plaintiff’s request to
reduce Spectrum’s price by the amount it had already been paid. The plaintiff, however,
did not object to the Army’s failure to adopt its suggested amendments to the Request
for Proposals at the time, instead waiting until the contract had been awarded for a
second time, then raising the Army’s failure to modify Spectrum’s price in the Court of
Federal Claims. Id. at 712. The court found that the Blue and Gold Fleet, L.P. v. United
States waiver rule applied in those circumstances because the plaintiff was essentially
challenging the Army’s failure to change the terms of the Request for Proposals. The
court stated: “Blue and Gold thus prevents a protester from raising post-hoc objections
to the terms of a solicitation. Yet, that is precisely what CRA seeks to do here.”
CRAssociates, Inc. v. United States, 102 Fed. Cl. at 712 (emphasis in original). “[B]y
holding its fire until after the contract was awarded to its competitor,” the court ruled, the



                                             31
plaintiff “waived its opportunity to raise issues concerning Spectrum’s prior performance
of the enjoined contract.” Id. at 713.

        CRAssociates, Inc. v. United States, therefore, did not expand the waiver rule
established in Blue & Gold Fleet, L.P. v. United States; rather, the court found that, like
the plaintiff in Blue & Gold Fleet, L.P. v. United States, the plaintiff in CRAssociates, Inc.
v. United States actually was challenging the terms of the solicitation, rather than the
agency’s evaluation of proposals, and that a challenge to the terms of the solicitation
had to be raised prior to the close of bidding. See CRAssociates, Inc. v. United States,
102 Fed. Cl. at 713. Moreover, the plaintiff in CRAssociates Inc. v. United States had
knowledge of the issues regarding the Army’s award of the contract to Spectrum before
the award took place. As plaintiff argues, a subsequent case in the Court of Federal
Claims also found that CRAssociates Inc. v. United States “concerned an offeror who
failed to raise ‘objections to the terms of a solicitation.’” See J.C.N. Constr., Inc. v.
United States, 107 Fed. Cl. at 516 (quoting CRAssociates Inc. v. United States, 102
Fed. Cl. at 712). In J.C.N. Construction, Inc. v. United States, the court did not apply
the waiver rule because “[u]nlike the offeror in CRAssociates, who had specific
concerns about the terms of a second solicitation,” the plaintiff’s “claim that the Postal
Service breached its duty to consider offerors’ proposals fairly and honestly does not
relate to patently inaccurate terms of Solicitation II.” Id. This court agrees that
CRAssociates, Inc. v. United States applied the waiver rule established in Blue & Gold
Fleet, L.P. v. United States without broadening that rule in the way that intervenor
argues.

        In the above captioned case, defendant posted a List of PreQualified Firms–
Moscow Annex on FedBizOpps on April 30, 2012. The list of pre-qualified offerors was
divided into “U.S. Firms,” and “Non-U.S. Firms.” Plaintiff, Caddell, and Desbuild-REC
were both included among six “U.S. Firms.” Nine “Non-U.S. Firms” were also included
on the list. Although designation as a U.S. Firm perhaps implied that those offerors had
qualified for the Percy Amendment price preference, defendant’s April 30, 2012 posting
on FedBizOpps did not mention the Percy Amendment or indicate whether “U.S. Firms”
had submitted “similar construction work” to qualify for the Percy Amendment price
preference. More significantly, defendant’s List of PreQualified Firms–Moscow Annex
gave no indication that defendant had initially rejected, but subsequently reconsidered,
Desbuild-REC’s qualifications to proceed to Phase II of the procurement. Nor was there
any indication at the time that defendant initially had found Desbuild-REC ineligible for
the Percy Amendment price preference, but that the Department of State also had
reconsidered the Percy Amendment determination. Instead, the “List of PreQualified
Firms–Moscow Annex” posted on FedBizOpps simply listed Desbuild-REC International
JV as a pre-qualified “U.S. Firm[].”

        Defendant issued the Solicitation on May 18, 2012. After evaluating seven
offerors’ proposals, defendant established a competitive range and requested final
proposals from three offerors: Caddell, Desbuild-REC, and FKE JV. Defendant notified
plaintiff that Desbuild-REC had been awarded the contract on September 26, 2012.
Plaintiff and defendant held a telephone debriefing on October 1, 2012. Mr. Krips


                                             32
indicated in a memorandum summarizing the debriefing phone call that plaintiff asked
about Desbuild-REC’s pre-qualification. Mr. Krips wrote: “I told him [Caddell Chief
Executive Officer Eddie Stewart] that the Desbuild-Renaissance JV was prequalified,
not Desbuild alone.” Plaintiff also raised questions about Desbuild-REC’s Percy
Amendment qualification, but Mr. Krips told plaintiff “that the Department of State Office
of the Legal Advisor made all Percy qualifications, and that the technical panel had no
input on this.”

        On October 5, 2012, four days later, plaintiff protested the award of the contract
to Desbuild-REC at the GAO, and Desbuild-REC intervened. Defendant successfully
argued at the GAO that plaintiff’s protest should be dismissed as untimely because
plaintiff allegedly knew before defendant issued the Solicitation that Desbuild-REC had
pre-qualified and been found eligible for a Percy Amendment price preference.
According to the GAO, from defendant’s April 30, 2012 posting on FedBizOpps,

      it should have been clear to Caddell that the designated “U.S. Firms,”
      including Desbuild-REC, would receive Percy Amendment price
      preferences under the solicitation. Caddell admits in its protest that
      publicly available information indicates that Desbuild-REC would not
      qualify as American-owned under the Percy Amendment and thus the firm
      should not have received the price preference. We find that this public
      information (which was available to Caddell in April 2012) was sufficient to
      put Caddell on notice of its ground of protest. The fact that Caddell
      learned of other information during a post-award debriefing to further
      demonstrate Desbuild-REC’s ineligibility for the Percy Amendment price
      preference does not convert an otherwise untimely protest to a timely one.
      Because the agency announced that Desbuild-REC was considered to be
      a prequalified “U.S. Firm” prior to the due date for phase 2 proposals,
      Caddell was required to protest Desbuild-REC’s status as an American-
      owned firm under the Percy Amendment prior to this due date. Because
      Caddell waited to file its protest until after award, we dismiss the protest
      as untimely.

       This court respects the expertise of the GAO, and considers GAO decisions
instructive. GAO decisions, however, are not binding on this court. See, e.g.,
Kingdomware Techs., Inc. v. United States, 107 Fed. Cl. 226, 230 n.2 (2012) (“GAO
decisions are not binding authority, but may be ‘instructive in the area of bid protests.’”
(quoting Centech Grp., Inc. v. United States, 554 F.3d 1029, 1038 n.4 (Fed. Cir.
2009))); see also Grunley Walsh Int’l, LLC v. United States, 78 Fed. Cl. 35, 39 (2007)
(“Decisions by the GAO are traditionally treated with a high degree of deference,
especially in bid protest actions.” (citing E.W. Bliss Co. v. United States, 33 Fed. Cl.
123, 135 (1995), aff’d, 77 F.3d 445 (Fed. Cir. 1996))). In the case currently before the
court, the record does not establish that plaintiff had sufficient information to raise its
claims prior to the submission of Phase II proposals. Moreover, plaintiff is not just
challenging defendant’s final decisions to qualify Desbuild-REC for Phase II and to
award Desbuild-REC the Percy Amendment price preference.                 Plaintiff also is


                                            33
challenging defendant’s decision to reverse its initial determinations regarding Desbuild-
REC’s pre-qualification and Desbuild-REC’s Percy Amendment price preference
eligibility, as well as how defendant evaluated its final decision to award the contract to
Desbuild-REC. Plaintiff did not know about defendant’s initial determinations regarding
Desbuild-REC’s Phase I submission and defendant’s reversal of both decisions until
after plaintiff filed its protest at the GAO and received defendant’s Agency Report on
November 5, 2012. According to the administrative record filed in this court,
defendant’s November 5, 2012 Agency Report was the first document that addressed
the fact that defendant initially had assigned Desbuild-REC a failing mark on Factor 2 of
the pre-qualification submission, Technical Project Experience and Past Performance,
and initially had told Desbuild-REC that it did not qualify for the Percy Amendment price
preference, but subsequently reversed both of those determinations.               Because
defendant’s reversal of its initial determinations regarding Desbuild-REC’s pre-
qualification for Phase II and Desbuild-REC’s Percy Amendment eligibility, as well as
defendant’s trade-off analysis, are at issue in the case before the court, and because
plaintiff was not aware of defendant’s reversals until November 2012, the court finds
that plaintiff did not have all of the necessary information to raise its claims as of April
2012, as alleged by defendant.

        The court also notes that plaintiff is not challenging the terms of defendant’s Pre-
qualification Notice or Solicitation. Unlike in Blue & Gold Fleet, L.P. v. United States,
plaintiff does not object to the contents of defendant’s Pre-qualification Notice or
Solicitation. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d at 1310. In
addition, unlike in CRAssociates, Inc. v. United States, which also included a challenge
to the terms of a solicitation, plaintiff did not have knowledge of the basis for its claims
until after contract award. See CRAssociates, Inc. v. United States, 102 Fed. Cl. at 712.
Plaintiff instead challenges decisions that defendant made in evaluating Desbuild-REC’s
Phase I submission and in awarding the contract to Desbuild-REC. Because plaintiff is
not challenging the terms of defendant’s Pre-qualification Notice or the Solicitation, but
rather defendant’s evaluation of Desbuild-REC’s pre-qualification submissions and
defendant’s award decision based on those submissions, the Blue & Gold Fleet, L.P. v.
United States waiver rule and CRAssociates, Inc. v. United States interpretation of that
rule do not apply. Plaintiff’s protest filed in this court is timely.

Standard of Review

       Pursuant to Rule 52.1(c) of the Rules of the United States Court of Federal
Claims (RCFC) (2012), which governs motions for judgment on the Administrative
Record, the court’s inquiry is directed to “whether, given all the disputed and undisputed
facts, a party has met its burden of proof based on the evidence in the record.” DMS
All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 661 (2010) (citing Bannum, Inc.
v. United States, 404 F.3d at 1356-57).

      The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,
§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)-(4)
(2006)), amended the Tucker Act to establish a statutory basis for bid protests in the


                                            34
United States Court of Federal Claims. See Impresa Construzioni Geom. Domenico
Garufi v. United States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001). The statute provides
that protests of agency procurement decisions are to be reviewed under Administrative
Procedure Act (APA) standards, making applicable the standards outlined in Scanwell
Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and the line of cases
following that decision. See, e.g., Galen Med. Assocs., Inc. v. United States, 369 F.3d
at 1329 (citing to Scanwell Laboratories, Inc. v. Shaffer for its reasoning that “suits
challenging the award process are in the public interest and disappointed bidders are
the parties with an incentive to enforce the law”); Banknote Corp. of Am., Inc. v. United
States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (“Under the APA standard as applied in
the Scanwell line of cases, and now in ADRA cases, ‘a bid award may be set aside if
either (1) the procurement official’s decision lacked a rational basis; or (2) the
procurement procedure involved a violation of regulation or procedure.’” (quoting
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332));
Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319; Am. Fed’n of Gov’t
Emps. v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) (“Congress intended to
extend the jurisdiction of the Court of Federal Claims to include post-award bid protest
cases brought under the APA by disappointed bidders, such as the plaintiff in
Scanwell.”), cert. denied, 534 U.S. 1113 (2002). The United States Court of Appeals for
the Federal Circuit has stated that the Court of Federal Claims’ jurisdiction over “any
alleged violation of statute or regulation in connection with a procurement or a proposed
procurement,” 28 U.S.C. § 1491(b)(1), “provides a broad grant of jurisdiction because
‘[p]rocurement includes all stages of the process of acquiring property or services,
beginning with the process for determining a need for property or services and ending
with contract completion and closeout.’” Sys. Application & Techs., Inc. v. United
States, 691 F.3d 1374, 1381 (Fed. Cir. 2012) (emphasis in original) (quoting Res.
Conservation Grp., LLC v. United States, 597 F.3d 1238, 1244 (Fed. Cir. 2010) (quoting
41 U.S.C. § 403(2))); see also Distrib. Solutions, Inc. v. United States, 539 F.3d 1340,
1345 (Fed. Cir.) (“[T]he phrase, ‘in connection with a procurement or proposed
procurement,’ by definition involves a connection with any stage of the federal
contracting acquisition process, including ‘the process for determining a need for
property or services.’”), reh’g denied (Fed. Cir. 2008); RAMCOR Servs. Grp., Inc. v.
United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999) (“The operative phrase ‘in
connection with’ is very sweeping in scope.”).

       Agency procurement actions should be set aside when they are “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law,” or “without
observance of procedure required by law.” 5 U.S.C. § 706(2)(A), (2)(D) (2006); 33 see

33
     The language of 5 U.S.C. § 706 provides:

         To the extent necessary to decision and when presented, the reviewing
         court shall decide all relevant questions of law, interpret constitutional and
         statutory provisions, and determine the meaning or applicability of the
         terms of an agency action. The reviewing court shall—


                                              35
also Orion Tech., Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir. 2013); COMINT
Sys. Corp. v. United States, 700 F.3d 1377, 1381 (Fed. Cir. 2012); Savantage Fin.
Servs. Inc., v. United States, 595 F.3d 1282, 1285-86 (Fed. Cir. 2010); Weeks Marine,
Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009); Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (noting arbitrary and capricious
standard set forth in 5 U.S.C. § 706(2)(A), and reaffirming the analysis of Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue & Gold
Fleet, L.P. v. United States, 492 F.3d at 1312 (“[T]he inquiry is whether the
[government’s] procurement decision was ‘arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law.’” (quoting 5 U.S.C. § 706(2)(A) (2000)));
Bannum, Inc. v. United States, 404 F.3d at 1351; Contracting, Consulting, Eng’g LLC v.
United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest case, the agency’s award
must be upheld unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.’” Turner Constr. Co. v. United States, 645 F.3d 1377, 1383
(Fed. Cir.) (quoting PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir. 2010)),
reh’g and reh’g en banc denied (Fed. Cir. 2011); see also PlanetSpace, Inc. v. United
States, 92 Fed. Cl. 520, 531–32 (2010) (“Stated another way, a plaintiff must show that


          (1) compel agency action unlawfully withheld or unreasonably delayed;
              and

          (2) hold unlawful and set aside agency action, findings, and
              conclusions found to be—

             (A) arbitrary, capricious, an abuse of discretion, or otherwise not in
                 accordance with law;

             (B) contrary to constitutional right, power, privilege, or immunity;

             (C) in excess of statutory jurisdiction, authority, or limitations, or
                 short of statutory right;

             (D) without observance of procedure required by law;

             (E) unsupported by substantial evidence in a case subject to
                 sections 556 and 557 of this title or otherwise reviewed on the
                 record of an agency hearing provided by statute; or

             (F) unwarranted by the facts to the extent that the facts are subject
                 to trial de novo by the reviewing court.

      In making the foregoing determinations, the court shall review the whole
      record or those parts of it cited by a party, and due account shall be taken
      of the rule of prejudicial error.

5 U.S.C. § 706.

                                            36
the agency’s decision either lacked a rational basis or was contrary to law.” (citing
Weeks Marine, Inc. v. United States, 575 F.3d at 1358)).

        In discussing the appropriate standard of review for bid protest cases, the United
States Court of Appeals for the Federal Circuit specifically has addressed subsections
(2)(A) and (2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi
v. United States, 238 F.3d at 1332 n.5, but the Federal Circuit has focused its attention
primarily on subsection (2)(A). See NVT Techs., Inc. v. United States, 370 F.3d 1153,
1159 (Fed. Cir. 2004) (“Bid protest actions are subject to the standard of review
established under section 706 of Title 5 of the Administrative Procedure Act (‘APA’), 28
U.S.C. § 1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’ 5
U.S.C. § 706(2)(A) (2000).”) (citations omitted); Banknote Corp. of Am., Inc. v. United
States, 365 F.3d at 1350 (“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.’” (citing
Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.),
reh’g denied (Fed. Cir. 2000))); Info. Tech. & Applications Corp. v. United States, 316
F.3d at 1319 (“Consequently, our inquiry is whether the Air Force’s procurement
decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.’ 5 U.S.C. § 706(2)(A) (2000).”).

       The United States Supreme Court has identified sample grounds which can
constitute arbitrary or capricious agency action:

      [W]e will not vacate an agency’s decision unless it “has relied on factors
      which Congress has not intended it to consider, entirely failed to consider
      an important aspect of the problem, offered an explanation for its decision
      that runs counter to the evidence before the agency, or is so implausible
      that it could not be ascribed to a difference in view or the product of
      agency expertise.”

Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983));
see also Ala. Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1375
(Fed. Cir. 2009), reh’g and reh’g en banc denied (Fed. Cir. 2010); In re Sang Su Lee,
277 F.3d 1338, 1342 (Fed. Cir. 2002) (“The agency must present a full and reasoned
explanation of its decision . . . . The reviewing court is thus enabled to perform a
meaningful review . . . .”), aff’d on subsequent appeal, 262 F. App’x 275 (Fed. Cir.
2008); Textron, Inc. v. United States, 74 Fed. Cl. 277, 285-86 (2006), appeal dismissed
sub nom. Textron, Inc. v. Ocean Technical Servs., Inc., 222 F. App’x 996 (Fed. Cir.),
and dismissed per stipulation sub nom. Textron, Inc. v. Ocean Technical Servs., Inc.,
223 F. App’x 974 (Fed. Cir. 2007). The United States Supreme Court has also
cautioned, however, that “courts are not free to impose upon agencies specific



                                            37
procedural requirements that have no basis in the APA.” Pension Benefit Guar. Corp. v.
LTV Corp., 496 U.S. 633, 654 (1990).

        A disappointed bidder has the burden of demonstrating the arbitrary and
capricious nature of the agency decision by a preponderance of the evidence. See
Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995-96 (Fed. Cir. 1996); Contracting,
Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 340; Textron, Inc. v. United
States, 74 Fed. Cl. at 285; Labat-Anderson Inc. v. United States, 50 Fed. Cl. 99, 106
(2001); Emery Worldwide Airlines, Inc. v. United States, 49 Fed. Cl. 211, 222, aff’d, 264
F.3d 1071 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2001); Dynacs Eng’g
Co. v. United States, 48 Fed. Cl. 614, 619 (2001); Ellsworth Assocs., Inc. v. United
States, 45 Fed. Cl. 388, 392 (1999), dismissed, 6 F. App’x 867 (Fed. Cir. 2001). The
Federal Circuit has made clear that “[t]his court will not overturn a contracting officer’s
determination unless it is arbitrary, capricious, or otherwise contrary to law. To
demonstrate that such a determination is arbitrary or capricious, a protester must
identify ‘hard facts;’ a mere inference or suspicion . . . is not enough.” PAI Corp. v.
United States, 614 F.3d at 1352 (citing John C. Grimberg Co. v. United States, 185 F.3d
1297, 1300 (Fed. Cir. 1999); C.A.C.I., Inc.-Fed. v. United States, 719 F.2d 1567, 1581
(Fed. Cir. 1983); Filtration Dev. Co., LLC v. United States, 60 Fed. Cl. 371, 380 (2004)).

        Furthermore, to prevail in a bid protest case, the protestor not only must show
that the government’s actions were arbitrary, capricious, or otherwise not in accordance
with the law, but the protestor also must show that it was prejudiced by the
government’s actions, see 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of
prejudicial error.”), perhaps duplicative, although this analysis is technically different
from the standing analysis. See Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. at
694-96 (2010). Recognizing the two-step analysis of bid protest cases, the Federal
Circuit has stated that:

      A bid protest proceeds in two steps. First . . . the trial court determines
      whether the government acted without rational basis or contrary to law
      when evaluating the bids and awarding the contract. Second . . . if the
      trial court finds that the government’s conduct fails the APA review under
      5 U.S.C. § 706(2)(A), then it proceeds to determine, as a factual matter, if
      the bid protester was prejudiced by that conduct.

Bannum, Inc. v. United States, 404 F.3d at 1351. In describing the prejudice
requirement, the Federal Circuit also has held that:

      To prevail in a bid protest, a protester must show a significant, prejudicial
      error in the procurement process. See Statistica, Inc. v. Christopher, 102
      F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d
      1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not
      required to show that but for the alleged error, the protester would have
      been awarded the contract.” Data General, 78 F.3d at 1562 (citation
      omitted). Rather, the protester must show “that there was a substantial


                                            38
      chance it would have received the contract award but for that error.”
      Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719
      F.2d 1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice,
      protester must demonstrate that but for the alleged error, “‘there was a
      substantial chance that [it] would receive an award--that it was within the
      zone of active consideration.’”) (citation omitted).

Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g
denied (Fed. Cir. 1999) (citation omitted in original); see also Allied Tech. Grp., Inc. v.
United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2011);
Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319; Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33; OMV
Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000); Advanced Data
Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile Networks USA, LLC
v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).

      In Data General Corp. v. Johnson, the United States Court of Appeals for the
Federal Circuit wrote:

      We think that the appropriate standard is that, to establish prejudice, a
      protester must show that, had it not been for the alleged error in the
      procurement process, there was a reasonable likelihood that the protester
      would have been awarded the contract . . . . The standard reflects a
      reasonable balance between the importance of (1) averting unwarranted
      interruptions of and interferences with the procurement process and (2)
      ensuring that protesters who have been adversely affected by allegedly
      significant error in the procurement process have a forum available to vent
      their grievances. This is a refinement and clarification of the “substantial
      chance” language of CACI, Inc.-Fed. [v. United States], 719 F.2d at 1574.

Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.), reh’g denied, en banc
suggestion declined (Fed. Cir. 1996); see also Bannum, Inc. v. United States, 404 F.3d
at 1353, 1358 (“The trial court was required to determine whether these errors in the
procurement process significantly prejudiced Bannum . . . . To establish ‘significant
prejudice’ Bannum must show that there was a ‘substantial chance’ it would have
received the contract award but for the [government’s] errors” in the bid process. (citing
Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319; Alfa Laval
Separation, Inc. v. United States, 175 F.3d at 1367; Statistica, Inc. v. Christopher, 102
F.3d at 1581; Data Gen. Corp. v. Johnson, 78 F.3d at 1562)); see also Advanced Data
Concepts, Inc. v. United States, 216 F.3d at 1057 (using a “reasonable likelihood” rule);
Stratos Mobile Networks USA, LLC v. United States, 213 F.3d at 1380 (using a
“substantial chance” test); Info. Scis. Corp. v. United States, 73 Fed. Cl. at 96 (using a
“substantial chance” test), recons. in part, 75 Fed. Cl. 406 (2007); Park Tower Mgmt.,
Ltd. v. United States, 67 Fed. Cl. 548, 559 (2005) (using a “substantial chance” test).




                                            39
       Under an arbitrary or capricious standard, the reviewing court should not
substitute its judgment for that of the agency, but should review the basis for the agency
decision to determine if it was legally permissible, reasonable, and supported by the
facts. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43
(“The scope of review under the arbitrary and capricious standard is narrow and a court
is not to substitute its judgment for that of the agency.”); see also R & W Flammann
GmbH v. United States, 339 F.3d 1320, 1322 (Fed. Cir. 2003) (citing Ray v. Lehman, 55
F.3d 606, 608 (Fed. Cir.), cert. denied, 516 U.S. 916 (1995)). “If 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) (quoting M. Steinthal & Co. v.
Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)); see also HP Enter. Servs., LLC v.
United States, 104 Fed. Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United
States, 101 Fed. Cl. 765, 780 (2011); Seaborn Health Care, Inc. v. United States, 55
Fed. Cl. 520, 523 (2003) (quoting Honeywell, Inc. v. United States, 870 F.2d at 648
(quoting M. Steinthal & Co. v. Seamans, 455 F.2d at 1301)).

      As stated by the United States Supreme Court:

      Section 706(2)(A) requires a finding that the actual choice made was not
      “arbitrary, capricious, an abuse of discretion, or otherwise not in
      accordance with law.” To make this finding the court must consider
      whether the decision was based on a consideration of the relevant factors
      and whether there has been a clear error of judgment. Although this
      inquiry into the facts is to be searching and careful, the ultimate standard
      of review is a narrow one. The court is not empowered to substitute its
      judgment for that of the agency.

Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), abrogated on
other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see also U.S. Postal Serv. v.
Gregory, 534 U.S. 1, 6-7 (2001); Bowman Transp., Inc. v. Arkansas-Best Freight Sys.,
Inc., 419 U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956 (1975); Co-Steel Raritan,
Inc. v. ITC, 357 F.3d 1294, 1309 (Fed. Cir. 2004) (In discussing the “arbitrary,
capricious, and abuse of discretion otherwise not in accordance with the law” standard,
the Federal Circuit stated that “the ultimate standard of review is a narrow one. The
court is not empowered to substitute its judgment for that of the agency.”); In re Sang
Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v. United States, 216 F.3d at
1058 (“The arbitrary and capricious standard applicable here is highly deferential. This
standard requires a reviewing court to sustain an agency action evincing rational
reasoning and consideration of relevant factors.” (citing Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles & Space Co. v.
Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); Gulf Grp. Inc. v. United States, 61 Fed. Cl.
338, 351 (2004) (“Although this inquiry into the facts is to be searching and careful, the
ultimate standard of review is a narrow one. The court is not empowered to substitute its
judgment for that of the agency.”); ManTech Telecomms. & Info. Sys. Corp. v. United


                                           40
States, 49 Fed. Cl. 57, 63 (2001), aff’d, 30 F. App’x 995 (Fed. Cir. 2002); Ellsworth
Assocs., Inc. v. United States, 45 Fed. Cl. at 392 (“Courts must give great deference to
agency procurement decisions and will not lightly overturn them.” (citing Fla. Power &
Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985))).

      According to the United States Court of Appeals for the Federal Circuit:

      Effective contracting demands broad discretion. Burroughs Corp. v.
      United States, 617 F.2d 590, 598 (Ct. Cl. 1980); Sperry Flight Sys. Div. v.
      United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,
      Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater
      Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69
      (1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d,
      914 F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with
      a good deal of discretion in determining which bid is the most
      advantageous to the Government.” Tidewater Management Servs., 573
      F.2d at 73, 216 Ct. Cl. 69.

Lockheed Missiles & Space Co., Inc. v. Bentsen, 4 F.3d at 958-59; see also Grumman
Data Sys. Corp. v. Dalton, 88 F.3d at 995; Grumman Data Sys. Corp. v. Widnall, 15
F.3d 1044, 1046 (Fed. Cir. 1994); Cybertech Grp., Inc. v. United States, 48 Fed. Cl.
638, 646 (2001) (“The court recognizes that the agency possesses wide discretion in
the application of procurement regulations.”); Lockheed Missiles & Space Co. v. United
States, 4 F.3d at 958; JWK Int’l Corp. v. United States, 49 Fed. Cl. 371, 388 (2001),
aff’d, 279 F.3d 985 (Fed. Cir), reh’g denied (Fed. Cir. 2002).

      Similarly, the Federal Circuit further has indicated that:

      Contracting officers “are entitled to exercise discretion upon a broad range
      of issues confronting them in the procurement process.” Impresa
      Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
      1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,
      procurement decisions are subject to a “highly deferential rational basis
      review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.
      Cir. 2008) (internal quotation marks omitted). Applying this highly
      deferential standard, the court must sustain an agency action unless the
      action does not “evince[ ] rational reasoning and consideration of relevant
      factors.” Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054,
      1058 (Fed. Cir. 2000) (alterations added).

PAI Corp. v. United States, 614 F.3d at 1351; see also Weeks Marine, Inc. v. United
States, 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.’” (quoting CHE
Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,
Inc. v. United States, 216 F.3d at 1058))).


                                            41
       The wide discretion afforded contracting officers extends to a broad range of
procurement functions, including the determination of what constitutes an advantage
over other proposals. See Compubahn, Inc. v. United States, 33 Fed. Cl. 677, 682-83
(1995) (“[T]his court is in no position to challenge the technical merit of any comments
made on the evaluation sheets or decisions made during the several stages of
evaluation.” (footnote omitted)); see also Textron, Inc. v. United States, 74 Fed. Cl. at
286 (in which the court considered technical ranking decisions are “‘minutiae of the
procurement process’” not to be second guessed by a court (quoting E.W. Bliss Co. v.
United States, 77 F.3d 445, 449 (Fed. Cir. 1996))). This is because “[t]he evaluation of
proposals for their technical excellence or quality is a process that often requires the
special expertise of procurement officials, and thus reviewing courts give the greatest
deference possible to these determinations.” Beta Analytics Int’l, Inc. v. United States,
67 Fed. Cl. 384, 395 (2005) (citing E.W. Bliss Co. v. United States, 77 F.3d at 449); see
also Unisys Corp. v. United States, 89 Fed. Cl. 126, 142 (2009) (holding that an
agency’s “exercise of such technical judgment and expertise . . . . is entitled to the
greatest possible deference under E.W. Bliss”); Dismas Charities, Inc. v. United States,
61 Fed. Cl. 191, 203 (2004) (“The decision as to whether an offeror should have scored
a 3, 4, or 5 on any question is properly left to the discretion of the agency.”). The
question is not whether the court would reach the same conclusions as the agency
regarding the comparison of proposals, but, rather, whether the conclusions reached by
the agency lacked a reasonable basis and, therefore, were arbitrary or capricious, in
which case, courts have a role to review and instruct. See, e.g., WorldTravelService v.
United States, 49 Fed. Cl. 431, 441 (2001) (“Therefore, this court’s main task is to
ensure that the [agency] examined the relevant data and articulated a ‘rational
connection between the facts found and the choice made.’” (quoting Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (internal citations omitted))).

        The amount of discretion afforded the contracting officer is greater in some
circumstances as compared to others. For example, in a negotiated procurement,
contracting officers are generally afforded greater decision making discretion, in
comparison to their role in sealed bid procurements. See Galen Med. Assocs., Inc. v.
United States, 369 F.3d at 1330 (“Because the bid protest at issue here involved a
‘negotiated procurement,’ the protestor’s burden of proving that the award was arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law is greater
than in other types of bid protests.” (citations omitted)); see also Hayes Int’l Corp. v.
United States, 7 Cl. Ct. 681, 686 (1985) (“It is well-established that contracting officials
are accorded broad discretion in conducting a negotiated procurement....” (citing Sperry
Flight Sys. v. United States, 212 Ct. Cl. 329, 339-40, 548 F.2d 915, 921 (1977))).

        The Federal Circuit has explained that procurement officials have an even
greater degree of discretion when it comes to best-value determinations, as compared
to deciding on price alone. See Galen Med. Assocs., Inc. v. United States, 369 F.3d at
1330 (noting that because “the contract was to be awarded based on ‘best value,’ the
contracting officer had even greater discretion than if the contract were to have been
awarded on the basis of cost alone”); see also CHE Consulting, Inc. v. United States,
552 F.3d 1351, 1354 (Fed. Cir. 2008) (citing E.W. Bliss Co. v. United States, 77 F.3d at

                                            42
449); Banknote Corp. of Am. Inc. v. United States, 365 F.3d at 1355 (“It is well-
established that contracting officers have a great deal of discretion in making contract
award decisions, particularly when, as here, the contract is to be awarded to the bidder
or bidders that will provide the agency with the best value.” (citing TRW, Inc. v. Unisys
Corp., 98 F.3d 1325, 1327-28 (Fed. Cir. 1996))); Am. Tel. & Tel. Co. v. United States,
307 F.3d 1374, 1379 (Fed. Cir. 2002), reh’g en banc denied (Fed. Cir.), cert. denied,
540 U.S. 937 (2003); E.W. Bliss Co. v. United States, 77 F.3d at 449 (“Procurement
officials have substantial discretion to determine which proposal represents the best
value for the government. See Lockheed Missiles & Space Co., Inc. v. Bentsen, 4 F.3d
at 958; cf. Widnall v. B3H, 75 F.3d 1577 (Fed. Cir. 1996) (holding that Board of Contract
Appeals should defer to agency’s best value decision as long as it is ‘grounded in
reason... even if the Board itself might have chosen a different bidder’)….”); Akal Sec.,
Inc. v. United States, 103 Fed. Cl. 310, 329 (2011) (“The United States Court of Appeals
for the Federal Circuit has recognized that ‘[p]rocurement officials have substantial
discretion to determine which proposal represents the best value for the government.’”
(quoting E.W. Bliss Co. v. United States, 77 F.3d at 449)); Blackwater Lodge & Training
Ctr., Inc. v. United States, 86 Fed. Cl. 488, 514 (2009).

       When the contracting officer’s discretion grows, so does the burden on the
protestor. As noted in D & S Consultants, Inc. v. United States:

      The protestor’s burden becomes more difficult the greater the degree of
      discretion vested in the contracting officer. DynCorp Int’l v. United States,
      76 Fed. Cl. 528, 537 (2007). Negotiated procurements afford the
      contracting officer a “breadth of discretion;” “best-value” awards afford the
      contracting officer additional discretion. Id. Therefore, in a negotiated,
      best-value procurement, the “protestor’s burden is especially heavy.” Id.

D & S Consultants, Inc. v. United States, 101 Fed. Cl. 23, 33 (2011), aff’d, 484 F. App’x
558 (Fed. Cir. 2012). D & S Consultants identifies another circumstance in which the
contracting officer is afforded yet greater discretion. The court in D & S Consultants
explained, procurements in which a best-value determination is made afford the
contracting officer broader decision making discretion than a negotiated procurement in
which a best-value determination is not at issue. See id.; see also Galen Med. Assocs.,
Inc. v. United States, 369 F.3d at 1330 (noting that contracting officers have great
discretion in negotiated procurements but even greater discretion in best-value
determinations than in procurements based on cost alone); PHT Supply Corp. v. United
States, 71 Fed. Cl. 1, 11 (2006) (“It is critical to note that ‘a protestor’s burden is
particularly great in negotiated procurements because the contracting officer is
entrusted with a relatively high degree of discretion, and greater still, where, as here,
the procurement is a “best-value” procurement.’” (citations omitted)). “It is well-
established that contracting officers have a great deal of discretion in making contract
award decisions, particularly when, as here, the contract is to be awarded to the bidder
or bidders that will provide the agency with the best value.” Banknote Corp. of Am. Inc.
v. United States, 365 F.3d at 1355 (citing TRW, Inc. v. Unisys Corp., 98 F.3d at 1327-
28; E.W. Bliss Co. v. United States, 77 F.3d at 449; and Lockheed Missiles & Space Co.


                                           43
v. Bentsen, 4 F.3d at 958-59); see also Am. Tel. & Tel. Co. v. United States, 307 F.3d at
1379; Lockheed Missiles & Space Co. v. United States, 4 F.3d at 958; Brooks Range
Contract Servs., Inc. v. United States, 101 Fed. Cl. 699, 707 (2011) (“[A] plaintiff’s
burden ‘is elevated where the solicitation contemplates award on a “best value” basis.’”
(citations omitted)); Matt Martin Real Estate Mgmt. LLC v. United States, 96 Fed. Cl.
106, 113 (2010); Serco v. United States, 81 Fed. Cl. 463, 496 (2008) (“To be sure, as
noted at the outset, plaintiffs have a significant burden of showing error in that regard
because a court must accord considerable deference to an agency’s best-value
decision in trading off price with other factors.”).

       Plaintiff argues that defendant made three decisions that were arbitrary,
capricious, contrary to law, and prejudicial to Caddell: 1) the decision to pre-qualify
Desbuild-REC and allow Desbuild-REC to submit a Phase II offer, 2) the decision to
grant Desbuild-REC a ten percent, Percy Amendment price preference, and 3) the
decision to award the contract for the Moscow project to Desbuild-REC. Plaintiff alleges
that defendant’s decisions to pre-qualify Desbuild-REC and to grant Desbuild-REC the
Percy Amendment price preference were arbitrary and capricious because they lacked
a rational basis, were undocumented, and contradicted information contained in the
administrative record. According to plaintiff, defendant’s decision to award the contract
to Desbuild-REC was arbitrary and capricious because the evaluation was based on the
two previous erroneous decisions to pre-qualify Desbuild-REC and to grant Desbuild-
REC a Percy Amendment price preference. Defendant and intervenor respond that the
administrative record establishes that defendant reasonably determined that Desbuild-
REC was qualified to compete for the contract and entitled to the Percy Amendment
price preference, and that defendant’s decision to award the contract for the Moscow
project to Desbuild-REC was reasonable and correct.

        Two of plaintiff’s challenges, regarding Desbuild-REC’s pre-qualification and
Desbuild’s Percy Amendment eligibility, concern determinations that defendant made
during Phase I of the procurement process at issue, the purpose of which was to
determine eligibility to participate in the competition for the contract once the Solicitation
was issued and to determine an offerors’ eligibility for a price preference. Defendant
asserts that the FAR provisions governing an agency’s evaluation of bid proposals do
not govern pre-qualification determinations and even asserts that the pre-qualification
phase is not part of the procurement. Defendant and intervenor also suggest that
Phase I of this procurement proceeding should be judged by the standards used to
review determinations of responsibility. Defendant cites a GAO decision, Caddell
Construction Company, Inc., B-298949.2, 2007 WL 1893209, at *11 n.3 (Comp. Gen.
June 15, 2007), claiming that, in similar circumstances to the instant case, the GAO
found that “offeror’s submission of pre-qualification materials was more analogous to
matters of responsibility than to question of the proposal’s acceptability.” With regard to
the standard of review applied to responsibility determinations, defendant cites Tech
Systems, Inc. v. United States, 98 Fed. Cl. 228, 266 (2011), for the proposition that
“[c]ontracting officers enjoy ‘wide discretion’ in making responsibility determinations and
deciding how much information is required to do so.” Furthermore, defendant asserts
that agencies are not required to explain an affirmative determination of responsibility


                                             44
unless the record suggests arbitrary and capricious action. Intervenor also raised for
the first time at oral argument an argument that defendant’s Phase I evaluations were
akin to competitive range determinations. In this regard, the court notes that the
Federal Circuit has held that “[a] contracting officer has broad discretion in determining
competitive range, and such decisions are not disturbed unless clearly unreasonable.”
Birch & Davis Int’l, Inc. v. Christopher, 4 F.3d 970, 973 (Fed Cir. 1993).

        In the 2007 Caddell GAO protest, cited by defendant, the Department of State
had awarded a contract for design and construction of a new United States Embassy in
Djibouti to American International Contractors (Special Projects), Inc. (AICI–SP). See
Caddell Constr. Co., Inc., 2007 WL 1893209. Caddell Construction Company, Inc.
protested the award based on the fact that the solicitation was subject to the Omnibus
Diplomatic Security and Antiterrorism Act of 1986, codified at 22 U.S.C. § 4852 (2006),
which provided that only “United States persons” and “qualified United States joint
venture persons” were eligible to compete for the contract. Caddell argued that AICI–
SP was not qualified as a “United States person.” Caddell Constr. Co., Inc., 2007 WL
1893209, at *1. The GAO sustained the protest. The Department of State then sought
additional information from AICI–SP to determine if it could qualify under the Omnibus
Diplomatic Security and Antiterrorism Act of 1986, and, again, concluded that AICI-SP
was qualified. Caddell filed a second protest, challenging both defendant’s “decision to
allow AICI–SP to submit a revised pre-qualification statement, and its conclusion that
the company meets the requirements of the Act.” Id. at *4. In the passage defendant
cites, the GAO stated:

       We do not agree with Caddell’s argument that the agency improperly
       engaged in discussions by requesting, and allowing, AICI–SP to submit
       revised prequalification materials. The prequalification materials at issue
       here were submitted prior to proposals, and were used to determine
       eligibility to participate in the competition. As such, these materials are
       more analogous to matters of responsibility, than to questions of the
       proposal’s acceptability—as Caddell argues. We have specifically held
       that an agency properly may obtain information from a contractor
       regarding its responsibility at any time until award is made. Dock Express
       Contractors, Inc., B–227685.3, Jan. 13, 1988, 88–1 CPD para. 23 at 6.

Id. at *11 n.3.

       Plaintiff responds that there was no indication in the administrative record that
defendant considered Phase I a kind of “elongated responsibility determination.” But,
according to plaintiff, even if the Phase I pre-qualification evaluation somehow was akin
to a responsibility determination, defendant’s determinations to permit Desbuild-REC to
submit a Phase II proposal and to qualify Desbuild-REC for a Percy Amendment price
preference must have a rational basis and be supported by the administrative record.
Moreover, plaintiff maintains that if the Phase I determinations were akin to
responsibility determinations, defendant was required to document a reasonable
explanation of its decisions at the time because defendant’s back-to-back contradictory


                                           45
decisions regarding Desbuild-REC’s qualifications are indicia of irregularity, which, as
defendant concedes, trigger a need for an affirmative rationale.

       Pre-qualification decisions that are allegedly arbitrary and capricious or violate a
statute or regulation should be reviewed under the APA standard of review because
they are made “in connection with a procurement or a proposed procurement,” 28
U.S.C. § 1491(b)(1), which “‘includes all stages of the process of acquiring property or
services, beginning with the process for determining a need for property or services and
ending with contract completion and closeout.’” See Sys. Application & Techs., Inc. v.
United States, 691 F.3d at 1381 (emphasis in original) (quoting Res. Conservation Grp.,
LLC v. United States, 597 F.3d at 1244)). That the APA standard of review applies to
pre-qualification decisions is evidenced by the subsequent history of the Caddell,
Djibouti, GAO protest decision on which defendant relies. After the Department of State
withdrew the original contract awardee’s pre-qualification in response to the GAO’s
decision in Caddell Construction Company, Inc., 2007 WL 1893209, the original
contract awardee brought a bid protest in the United States Court of Federal Claims,
maintaining that the Department of State’s subsequent decision to withdraw the
contractor’s pre-qualification was “irrational, arbitrary, and capricious.” See Grunley
Walsh Int’l, LLC v. United States, 78 Fed. Cl. at 36. A Judge of this court applied the
APA standard of review to issues regarding the pre-qualification determination,
concluding that the Department of State’s subsequent withdrawal of the winning
contractor’s pre-qualification was “irrational, arbitrary, capricious, and not in accordance
with law.” Id. at 37.

        Defendant is correct that the United States Court of Appeals for the Federal
Circuit has recognized that contracting officers are afforded wide discretion in making
responsibility determinations and the amount of information required to make
responsibility determinations, but the Federal Circuit has incorporated a recognition of
this discretion as part of the APA standard of review. See Impresa Construzioni Geom.
Domenico Garufi v. United States, 238 F.3d at 1334-35 (recognizing that “Contracting
officers are ‘generally given wide discretion’ in making responsibility determinations” but
applying the APA’s standards to review the contracting officer’s responsibility
determination) (quoting John C. Grimberg Co. v. United States, 185 F.3d at 1303); see
also Bender Shipbuilding & Repair Co. v. United States, 297 F.3d 1358, 1362 (Fed. Cir.
2002). The Federal Circuit similarly has indicated that a contracting officer’s
determination of a competitive range should not be “not disturbed unless clearly
unreasonable,’” see Southfork Sys., Inc. v. United States, 141 F.3d 1124, 1136 (Fed.
Cir. 1998) (quoting Birch & Davis Int’l, Inc. v. Christopher, 4 F.3d at 973), and Judges of
the United States Court of Federal Claims have incorporated this guidance into the
traditional, APA standard of review. See Chenega Mgmt., LLC v. United States, 96
Fed. Cl. 556, 574, 585 (2010); Bean Stuyvesant, L.L.C. v. United States, 48 Fed. Cl.
303, 339, 341 (2000), aff’d, 10 F. App’x 957 (Fed. Cir. 2001). The extent to which the
discretion afforded to a contracting officer is incorporated into the APA standard of
review directly relates to the extent that applicable statutes and regulations prescribe a
particular course of conduct. See, e.g., Galen Med. Assocs., Inc. v. United States, 369
F.3d at 1330 (“‘In formally advertised bidding the pertinent statutes and regulations are


                                            46
far more strict about the conduct of the procurement than in a negotiated one,
consequently in negotiated procurement the contracting officer is entrusted with a
relatively high degree of discretion.’” (quoting Burroughs Corp. v. United States, 223 Ct.
Cl. 53, 65, 617 F.2d 590, 598 (1980))); see also Am. Tel. & Tel. Co. v. United States,
307 F.3d at 1379 (“[I]n a negotiated procurement . . . this court has held that the
regulations entrust the contracting officer with especially great discretion . . . .”); L-3
Commc’ns EOTech, Inc. v. United States, 83 Fed. Cl. 643, 650 (2008) (“The higher the
degree of discretion allotted the contracting officer, the more difficult it is for a protestor
to prove that the procurement decision was arbitrary and capricious…. ‘[B]est value’
contract awards give a contracting officer more discretion than awards based on price
alone. . . .’ The deference afforded to an agency’s decision must be even greater when
a trial court is asked to review a technical evaluation.”), appeal dismissed, 356 F. App’x
390 (Fed. Cir. 2009).

       Contracting officers are afforded wide discretion to make responsibility
determinations “[b]ecause responsibility decisions are largely a matter of judgment.”
See John C. Grimberg Co. v. United States, 185 F.3d at 1303 (citing Trilon Educ. Corp.
v. United States, 217 Ct. Cl. 266, 270–271, 578 F.2d 1356, 1358, reh’g denied, 1978
WL 14872 (Ct. Cl. Sept. 29, 1978)). The court recognizes, therefore, that “‘[t]he greater
the discretion granted to a contracting officer, the more difficult it will be to prove the
decision was arbitrary and capricious.’” Galen Med. Assocs., Inc. v. United States, 369
F.3d at 1330 (quoting Burroughs Corp. v. United States, 223 Ct. Cl. at 64, 617 F.2d at
597). That the amount of discretion afforded to an agency under applicable statutes
and regulations is considered by the court when determining the validity of an alleged
error in the procurement process, however, does not indicate that the court should
deviate from the APA standard of review that is otherwise generally applicable in bid
protests. Although the court is required to take into account the amount of discretion
afforded to the agency under applicable statutes and regulations, the APA standard of
review applies to pre-qualification decisions. See 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.”). In reviewing defendant’s Phase I and
Percy Amendment eligibility decisions, this court will apply the traditional APA bid
protest standard to the facts of this case.

Pre-qualification

       Plaintiff argues that defendant’s decision to pre-qualify Desbuild-REC and allow
intervenor to submit a proposal in Phase II of the procurement, after initially
disqualifying the Joint Venture from doing so, was arbitrary and capricious and lacked a
rational basis in the record. Plaintiff argues that defendant’s failure to articulate any
explanation for reversing its original decision and that the issuance of a final decision
which contradicted its own contemporaneous record was arbitrary and capricious.

      Defendant’s initial determination, announced in defendant’s April 6, 2012 letter to
Desbuild-REC, was that Desbuild-REC had failed Factor 2, Technical Project
Experience and Past Performance, and could not proceed to Phase II of the


                                              47
procurement, because both joint venture partners were required to submit examples of
“relevant projects.” According to defendant’s initial decision, while REC had done so
and qualified, defendant concluded that Desbuild’s submitted projects “do not qualify as
relevant projects.” Paragraph 2A.2 of the Pre-qualification Notice defines relevant
projects as: “those projects similar in scope, complexity and dollar value (USD) in that
order of importance.” The reversal of the Department of State’s original decisions
occurred after defendant received Desbuild-REC’s April 9, 2012 letter, which did not
submit any new substantive information, but which argued that the Pre-qualification
Notice in fact required joint venture partners to submit at least one example of a project
that was “relevant to demonstrate technical project experience for the partners’
proposed role in the Project.” Desbuild-REC argued that “Desbuild’s role would be
limited to certain management functions,” thus implying that Desbuild did not need to
demonstrate experience on a prior project as large as the Moscow project. Desbuild-
REC also emphasized that the Pre-qualification Notice stated: “For offerors who do not
have individual projects representative of the project scope and complexity, DOS will
evaluate the technical project experience demonstrated by the combined project
examples.” Desbuild-REC asked defendant to explain why “the combined project
examples submitted by Desbuild-REC did not meet the agency’s requirements.”

       After receiving Desbuild-REC’s April 9, 2012 letter, defendant’s Contracting
Officer, Mr. Powell, responded by letter on April 13, 2012. Mr. Powell’s letter stated:
“[O]ur prequalification panel went through an extensive reevaluation of the package that
you have submitted. Following careful consideration, the panel has determined that the
Desbuild-REC JV is qualified to continue on to the bidding process due to the
cumulative experience of the JV members.” No additional explanation or discussion of
the “extensive reevaluation” or “careful consideration” or of why the Department of State
changed its mind was offered. Nor are any additional records of meetings or
conversations by those involved in the pre-qualification decision included in the record.
Nor is it clear why Mr. Powell wrote to defendant on April 13, 2012, when, up until that
point, defendant’s Contract Specialist, Mr. Krips, had handled all communication with
the offerors. And, there is no documented further communication between Mr. Powell
and Mr. Krips during the reconsideration time.

        Plaintiff and defendant disagree on what requirements the Pre-qualification
Notice established for offerors to satisfy Subfactor 2A, Technical Project Experience.
Plaintiff argues that the Pre-qualification Notice required each offeror, including
individual partners within a joint venture, to qualify separately under Subfactor 2A.
According to plaintiff, “[t]he requirement that each partner submit evidence of its
technical capabilities shows that the capabilities of one partner to the joint venture could
not be attributed to the other partner. Instead, each partner was required to
demonstrate technical experience – similar in size, scope, and complexity – to its stated
role.” Because Desbuild was proposed as a [redacted] percent majority partner on the
Moscow project, plaintiff asserts that Desbuild “was required to submit one to two
projects relevant to demonstrate its ability to perform approximately [redacted] of a $156
million construction Contract.” Desbuild submitted a [redacted]. According to plaintiff,
defendant’s initial decision that neither of Desbuild’s submitted projects was “relevant”


                                            48
to Desbuild’s proposed role in the Moscow project was a reasonable decision, as the
[redacted] projects were substantially smaller than [redacted] percent of the Moscow
project and the Pre-qualification Notice required that each joint venture partner qualify
individually by submitting projects “relevant to demonstrate technical project experience
for the partners’ proposed role in the Project.” Therefore, according to plaintiff,
defendant’s initial decision that Desbuild-REC failed Factor 2 because Desbuild failed to
submit any “relevant” projects was consistent with the terms of the Pre-qualification
Notice.

       Defendant disagrees and suggests that the Pre-qualification Notice did not
require both members of a joint venture to qualify separately under Subfactor 2A,
Technical Project Experience, but rather permitted defendant to consider the combined
technical experience of proposed joint venture partners. Defendant argues that
Paragraph 2A.4 of the Pre-qualification Notice, JV Project Examples, does not define
the term “relevant projects,” and that the plain meaning of the Pre-qualification Notice
supports its position. Instead, Paragraph 2A.4 requires, for joint ventures, that each
partner submit “at least one, but no more than two, example of projects that are relevant
to demonstrate technical project experience for the partners’ proposed role in the
Project.”

        Defendant also emphasizes that the Pre-qualification Notice states: “DOS will
evaluate the Offeror’s technical project experience in executing relevant projects.
For Offerors who do not have individual projects representative of the project
scope and complexity, DOS will evaluate the technical project experience
demonstrated by the combined project examples.”                  (emphasis in original).
Defendant argues that, for offerors organized as joint ventures, the “combined project
examples” provision allowed defendant to consider the “combined project examples” of
all the joint venture partners for each proposal and determine if the joint venture could
qualify based on the cumulative technical experience of all partners.

        In this court, defendant now characterizes its initial decision not to pre-qualify
Desbuild-REC because of Desbuild’s apparently insufficient “relevant projects” as a
mistake, based on an incorrect interpretation of its own Pre-qualification Notice.
Defendant’s April 6, 2012 letter to Desbuild-REC, indicating that it was not pre-qualified
to proceed to Phase II, stated: “Evaluation factor 2A.4 (JV Project Examples) requires
that each partner must show examples of project(s) that are similar in scope, complexity
and dollar value of the Moscow project. The Desbuild projects in [redacted] do not
qualify as relevant projects.” According to defendant, the Department of State appears
to have initially maintained that both joint venture partners had to submit “relevant
projects” and satisfy Subfactor 2A individually. Defendant now argues that defendant
had the authority to correct this initial conclusion and reconsider Desbuild-REC’s pre-
qualification submission. After a reevaluation, defendant contends, defendant’s April
19, 2012 letter to Desbuild-REC more correctly concluded that “the Desbuild-REC JV is
qualified to continue on to the bidding process due to the cumulative experience of the
JV members.” (emphasis in original).



                                           49
        Although the Pre-qualification Notice uses broad language, allowing the
Department of State to “evaluate the technical project experience demonstrated by the
combined project examples” in the submissions of joint venture partners, defendant’s
rapid reversal of its initial decision to fail Desbuild-REC on Factor 2, Technical Project
Experience and Past Performance, warranted an explanation in the record. Plaintiff
objects to Desbuild’s submitted “relevant projects” based on their significantly lower
dollar value and complexity, as compared to the Moscow project. Plaintiff does not take
issue, however, with the “relevant” status of REC’s submitted projects. Although
Subfactor 2A of the Pre-qualification Notice, Technical Project Experience, may have
allowed defendant to consider Desbuild’s and REC’s “combined project examples,” the
record is surprisingly sparse as to the information defendant reviewed in reversing its
initial decision and deciding that Desbuild-REC should be pre-qualified. Despite
defendant’s statement in its April 13, 2012 letter to Desbuild-REC that it had conducted
an “extensive reevaluation of the package” submitted, and reversed its decision
“following careful consideration,” it is not clear from the record what information
defendant reviewed again or what convinced the Department of State personnel to
reverse its original decision not to pre-qualify the Desbuild-REC Joint Venture, and
instead to pre-qualify Desbuild-REC based on the combined project examples recently
submitted.

       As discussed above, to demonstrate the Joint Venture’s technical experience
under Subfactor 2A, Desbuild-REC’s Phase I submission listed two projects for
Desbuild and three projects for REC. Desbuild-REC submitted as a relevant project a
[redacted], for which Desbuild was the sole contractor. Desbuild-REC indicated that:

      [redacted]

Desbuild-REC also submitted as relevant a renovation project at the [redacted], valued
at [redacted], for which Desbuild was also the sole contractor. Desbuild-REC indicated
that the [redacted] project was relevant to the Moscow project because:

      [redacted]

       Desbuild-REC’s Phase I submission listed three34 separate projects to establish
REC’s technical experience: 1) [redacted], valued at [redacted]; 2) the construction of
the [redacted], valued at [redacted]; and 3) the “Design & Build” of [redacted], valued at
[redacted]. Plaintiff has not contested the adequacy of REC’s “relevant projects.”
34
   The Pre-qualification Notice instructed offerors organized as joint ventures to “submit,
for each partner, at least one, but no more than two, example of projects that are
relevant to demonstrate technical project experience for the partners’ proposed role in
the Project.” (emphasis in original). Desbuild-REC submitted three projects for REC.
Defendant made no mention in the administrative record of the fact that Desbuild-REC
failed to follow instructions regarding the number of relevant project examples
submitted, nor did defendant ever address whether it took all three of REC’s examples
into consideration in pre-qualifying the Joint Venture, or whether it disregarded one of
the projects.

                                            50
Similarly, the projects submitted by Caddell, including 1) the construction of a new office
building at the United States Embassy in [redacted], valued at [redacted], 2) the
design/build of a United States Embassy Complex in [redacted], valued at [redacted],
and 3) the design/build of a new Embassy compound in [redacted], valued at [redacted],
were accepted by defendant as “relevant projects” and are not at issue here.

       Although there may be a rationale by which the Pre-qualification Notice
establishes that defendant could consider Desbuild-REC’s combined project
experience, the unexplained, undocumented and rapid reversal after Desbuild-REC’s
April 9, 2012 letter, accompanied by only a bald assertion that “extensive reevaluation”
and “careful consideration” had occurred, without further explanation, raises questions
of whether defendant acted in an arbitrary and capricious fashion. The record reflects
no additional evaluation and the court is left with an unexplained, undocumented
reversal, not buttressed by any justification.

     Although plaintiff conceded at oral argument that the “combined project
examples” language may have been sufficient grounds for a decision to pre-qualify
Desbuild-REC, 35 the court has no way to judge the validity of defendant’s rationale for
35
  Plaintiff’s counsel stated, with regard to defendant’s decision to pre-qualify Desbuild-
REC:

      Counsel: So we can see an explanation how they got to the original
      decision to deny, but we have absolutely no explanation for how they
      came to the decision to reverse. Right, wrong or indifferent they came to
      a decision, and we’re not arguing that if the original decision had been to
      prequalify on the basis of the same facts. If the original decision had been
      to prequalify them based on the same projects, I don’t think our argument
      would be strong.

      Court: So you are saying that that could have been a legitimate decision?

      Counsel: It could have, but they made a decision and they documented
      how they made the decision, and then they reversed that decision without
      explaining how or why.

      Court: Well, let me ask you then again, you’re saying that there would
      have been sufficient grounds in the record for the State Department to
      have made the prequalification decision they made the second time and to
      have made the Percy Amendment decision they ultimately made?

      Counsel: I think on the prequalification decision, yes, because I think if
      they had come up with a rationale along the lines of even though the
      [redacted] project is only X dollars and even though the [redacted] project
      is only Y dollars –

      Court: So you just conceded that argument?

                                            51
overturning its initial decision that Desbuild-REC did not pre-qualify and why that
decision was reversed. Based on the lack of explanation or any indication of the basis
for defendant’s reversal, the court has no way of knowing whether, when making its
second decision, defendant properly considered whether Desbuild-REC had submitted
projects “relevant to demonstrate technical project experience for the partner’s
proposed role in the project.” (emphasis added). In general, procurements by the
federal government, with few exceptions such as national security, not involved here,
are expected to be conducted with transparency and in an environment which treats all
offerors fairly and equally. See Banknote Corp. of Am. v. United States, 56 Fed. Cl.
377, 383 (2003) (“[I]t is beyond peradventure that a contracting agency must treat all
offerors equally, evaluating proposals evenhandedly against common requirements and
evaluation criteria.” (citing Seattle Sec. Servs. Inc. v. United States, 45 Fed. Cl. 560,
569 (1999))), aff’d, 365 F.3d 1345 (Fed. Cir. 2004); see also Chenega Mgmt., LLC v.
United States, 96 Fed. Cl. at 585.
        As noted above, plaintiff and defendant disagree over what information
defendant was allowed to consider in evaluating Phase I submissions. The parties also
are at odds over whether, when defendant reversed its earlier decisions, the
Department of State provided a sufficient rationale for its reversal, and whether
defendant was required to provide additional documentation of its “extensive
reevaluation” and “careful consideration” of Desbuild-REC’s Phase I submission.
Plaintiff points out that Desbuild-REC’s April 9, 2012 letter to defendant, requesting
reconsideration of Desbuild-REC’s pre-qualification, directly contradicted Desbuild-
REC’s Phase I submission by stating repeatedly that Desbuild would have a “limited
role” in the Moscow project. According to plaintiff, defendant failed to reconcile the
inconsistencies between Desbuild-REC’s Phase I submission and Desbuild-REC’s
subsequent April 9, 2012 letter to defendant. Plaintiff asserts that defendant’s April 13,
2012 letter to Desbuild-REC was a decision reversal, allowing Desbuild-REC to
continue on to Phase II of the bidding process, but failed to include any support for that
decision or to reconcile the differences between Desbuild-REC’s Phase I submission,
which presented Desbuild as the [redacted] percent majority partner of the Joint
Venture, and intervenor’s April 9, 2012 letter, which argued that Desbuild’s role “would
be limited to certain management functions.” Plaintiff argues that defendant’s decision
reversal and representation in its April 13, 2012 letter that defendant “went through an
extensive reevaluation” of Desbuild-REC’s Phase I submission is not supported in the
administrative record before the court. Plaintiff alleges that, although defendant
indicated that it had conducted an “extensive reevaluation,” defendant did not describe
when, how, or which pre-qualification panel members agreed to the reversal, or what


       Counsel: … I am for the purpose of the prequalification argument. I am
       not for the purpose of the Percy Amendment because the Percy
       Amendment has a totally separate problem associated with it.

In addition, asked specifically about the “combined project examples” provision of the
Pre-qualification Notice, plaintiff’s counsel said: “This is why I explained that I think they
[defendant] could have made the decision they did on the prequalification.…”

                                             52
information defendant learned in the intervening seven days, between disqualifying
Desbuild-REC on April 6, 2012 and reversing its decision on April 13, 2012. Plaintiff
questions whether defendant, in fact, even performed a reevaluation. Thus, plaintiff
concludes, “[b]ecause Mr. Powell’s April 13, 2012 decision contradicts DOS’s April 6,
2012 decision, and does not attempt to reconcile the contradiction or explain a
reasoned basis for the agency’s reversal, DOS’s decision lacks a rational basis.”

        Defendant and intervenor agree that Desbuild-REC’s April 9, 2012 letter to
defendant did not contain any new factual information beyond what was provided in
Desbuild-REC’s earlier Phase I submission, and that, when reconsidering the decision
to disqualify Desbuild-REC, defendant reviewed Desbuild-REC’s original Phase I
submission. Defendant maintains that the administrative record supports defendant’s
reversed decision to pre-qualify Desbuild-REC based on the combined experience of
the Joint Venture and that the final decision to do so was reasonable. Defendant
acknowledges that there are no contemporaneous notes or other written evidence of
any reevaluation proceedings, but, defendant argues, there is no requirement for such
documentation. Defendant also points to: 1) the Pre-qualification Notice, which,
according to defendant, allowed a joint venture offeror to pre-qualify based on the
combined project experience of both joint venture partners; 2) the Pre-qualification
Review Board’s “Initial Recommendation” as to which contractors should pre-qualify,
which according to defendant demonstrated that Desbuild-REC’s pre-qualification
rejection was a very close call; and 3) defendant’s April 13, 2012 letter to Desbuild-
REC, which subsequently determined that Desbuild-REC pre-qualified for the contract.
Defendant asserts that there are no FAR provisions, other regulations, or language in
the Pre-qualification Notice which prevented defendant from communicating with
Desbuild-REC during the pre-qualification phase, nor from re-evaluating Desbuild-
REC’s Phase I submission. At oral argument, as discussed above, defendant added
that defendant’s earlier failure to consider the combined projects, as communicated to
Desbuild-REC in the April 6, 2012 letter, was a mistake.

        Defendant also argues that the presumption in favor of the regularity of executive
branch, administrative decisions should apply. The court acknowledges the existence
of a generic “presumption of regularity.” See Impresa Construzioni Geom. Domenico
Garufi v. United States, 238 F.3d at 1338 (citing Bowen v. Am. Hosp. Ass’n, 476 U.S.
610, 626–27 (1986); Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463
U.S. at 43 n.9; United States v. Chem. Found., Inc., 272 U.S. 1, 14–15 (1926)); see also
Caldwell & Santmyer, Inc. v. Glickman, 55 F.3d 1578, 1581 (Fed. Cir. 1995) (“We
assume the government acts in good faith when contracting.” (citing Torncello v. United
States, 681 F.2d 756, 770 (1982); Librach v. United States, 147 Ct. Cl. 605, 1959 WL
7633 (1959)). Notably, even if “‘[t]he agency’s decision is entitled to a “presumption of
regularity,” [] that presumption does not shield it from a “thorough, probing, in-depth
review.”’” Mark Dunning Indus., Inc. v. United States, 64 Fed. Cl. 374, 377 (2005)
(quoting Redland Genstar, Inc. v. United States, 39 Fed. Cl. 220, 231 (1997) (quoting
Citizens to Pres. Overton Park v. Volpe, 401 U.S. at 415.)). In the case before the
court, the rapid, unexplained reversal on Desbuild-REC’s pre-qualification decision and
of the intervenor’s Percy Amendment price preference eligibility, discussed more fully


                                           53
below, cause this court to reject the presumption as a way to bolster the defendant’s
decision. Enough questions are raised by the Department of State’s actions to force the
defendant to its proof. See Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d at 1338 (noting that the presumption of regularity can be rebutted upon
a showing that the agency may have acted in an arbitrary and capricious manner). The
multiple reversals of its initial decisions, first not to pre-qualify Desbuild-REC for Phase
II of the procurement, and as discussed below, not to grant Desbuild-REC the ten
percent, Percy Amendment price preference, each made without explanation or
documentation, and only shortly after an opposite, initial decision was made, is sufficient
to rebut the presumption. These were not regular or transparent proceedings. The
absence of the presumption of regularity does not mean that plaintiff automatically
prevails, but defendant cannot rely on the presumption to buttress its defense.

       As indicated above, the administrative record contains no documents explaining
what occurred between the Department of State’s decision not to qualify Desbuild-REC
for the Phase II competition and its reversal of that decision seven days later, and
defendant and intervenor concede no such documents exist. In the Pre-qualification
Review Board’s April 4, 2012 Initial Recommendation, all four panel members voted
“Failed,” regarding passing the Desbuild-REC Joint Venture on to Phase II. The
following narrative was included by way of explanation of the decision to not pre-qualify
Desbuild-REC:

       DesBuild - REC International JV (JV)
       Factor 1 Joint Venture Agreement and Description of Partnership PASS
       Factor 2 Technical Project Experience and Past Performance           FAIL
       REC has done projects of similar and greater complexity than the Moscow
       NOX. However, the panel was concerned that Desbuild does not show
       sufficient experience in handling a project of this size based upon the
       examples provided in the prequalification package (examples provided
       include [redacted]). Contractor mentioned some performance problems
       that were, apparently, caused by the client. Initially, three of the 4 team
       members gave the JV a “passing mark” in this category. During the
       consensus meeting there was much discussion about whether or not to
       pass the JV based upon REC International’s experience or not. Also, team
       members were aware of the ongoing project in [redacted] being
       constructed by the [redacted] JV, but no information was provided by the
       contractor in the prequalification package. Even though the [redacted]
       project is in excess of [redacted], it was not evaluated. After much
       discussion, the panel finally decided to not qualify the JV.
       Factor 3 Business Management Plan and Organization                   PASS
       Subcontractor/team member with [redacted].
       Overall Rating                                                        FAIL
       Desbuild does not have relevant experience.

(emphasis in original).



                                            54
       Defendant’s explanation to intervenor of why Desbuild-REC failed Phase I, made
in the brief April 6, 2012 brief letter to Desbuild-REC, was signed by Charles C. Krips as
a “Senior Contract Administrator.” The Factor 1 Joint Venture Agreement and
Description of Partnership explanation includes an incomplete sentence and thought,
and is exemplary of the cavalier approach defendant took toward this procurement,
similarly demonstrated by check marked endorsements of who should be awarded the
contract and a complete lack of documentation for many significant decisions, including
reversals of prior decisions. But the recommendation language on Factor 1 is less
important for this discussion because Desbuild-REC received a “PASS” on Factor 1.

       The Factor 2 Technical Project Experience and Past Performance explanation
indicated that:

      Factor 2 Technical Project Experience and Past Performance Fail
      While REC International produced evidence of performing a project similar
      in scope, complexity, and dollar value of the Moscow NOX project,
      Desbuild Inc. did not. Evaluation factor 2A.4 (JV Project examples)
      requires that each partner must show examples of project(s) that are
      similar in scope, complexity and dollar value of the Moscow project. The
      Desbuild projects in [redacted] do not qualify as relevant projects.

(emphasis in original). It is for the Factor 2 explanation that “each partner must show
examples of project(s) that are similar in scope, complexity and dollar value” to the
Moscow project that defendant, belatedly, during this bid protest, long after the
defendant’s reversal of its original decision to fail Desbuild-REC on their Phase I
submission, now suggests might have been a mistake on its part, as articulated by
defendant’s counsel at oral argument before this court. There is no such concession in
the record before the April 13, 2012 letter reversing defendant’s decision, or until well
after the bid protest was filed, and the concept of a mistake was first articulated by
defendant’s counsel at oral argument.

        The April 13, 2012 reversal letter to Desbuild-REC stated, “our prequalification
panel went through an extensive reevaluation of the package that you have submitted,”
but no documentation of any review, let alone an extensive review, is included in the
administrative record. The letter simply indicated that “Desbuild-REC JV is qualified to
continue on to the bidding process due to the cumulative experience of the JV
Members.” This same letter indicated that Desbuild-REC did not, however, qualify for
the Percy Amendment price preference. As is discussed below, the Percy Amendment
qualification decision also was reversed rapidly by the Department of State, in a
similarly unexplained and unsupported fashion.

       Until the plaintiff’s protest was filed at the GAO, defendant did not try to provide
any rationale for its decision reversals. Defendant now offers this court the statement of
Mr. Krips during the GAO protest proceedings, in which he indicated that defendant also
had considered the information included in the April 9, 2012 letter from Desbuild-REC to
the Department of State as part of the reevaluation, and stated:


                                            55
       The prequalification process is not the competitive RFP phase. The whole
       intent of this phase is to identify qualified potential offerors to promote
       competition. The prequalification process involves give and take and
       sometimes communications with potential offerors to seek clarifications or
       additional information. It is common and is not prohibited by the terms of
       our solicitations for the Department to consider information outside the
       prequalification submission in determining offeror eligibility under the
       Omnibus Diplomatic Security Act (22 U.S.C. [sic] 4852) and offeror
       eligibility for the Percy Amendment price preference.

        Whether or not the record in related GAO protest proceedings should be
considered part of the administrative record in this court remains unresolved in this
court’s jurisprudence. The United States Court of Appeals for the Federal Circuit has
emphasized that “the focal point for judicial review should be the administrative record
already in existence, not some new record made initially in the reviewing court.” Axiom
Res. Mgmt., Inc. v. United States, 564 F.3d at 1379-80 (quoting Camp v. Pitts, 411 U.S.
138, 142 (1973)). The Federal Circuit explained, however, that supplementation of the
record is not completely ruled out, but, that, “the parties’ ability to supplement the
administrative record is limited.” Id. at 1379. The record only should be supplemented
to include documents that were not before the agency at the time the decision was
made in “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)). Since the ruling in Axiom Resource Management, Inc. v. United States was
issued, several judges on this court have found that documents that are part of the GAO
record in the GAO protest filed before the same protest was brought to the Court of
Federal Claims are admissible as part of the administrative record. See, e.g., Holloway
& Co., PLLC v. United States, 87 Fed. Cl. 381, 392 (2009) (holding that RCFC Appendix
C, ¶ 22, which specifies that “core documents relevant to a protest case may include, as
appropriate,” twenty-one categories of materials, the last of which is “the record of any
previous administrative or judicial proceedings relating to the procurement, including the
record of any other protest of the procurement,” makes clear that documents generated
during the GAO protest directly preceding the same protest in this court can properly be
added to the record for this court’s consideration); see also Vanguard Recovery
Assistance v. United States, 99 Fed. Cl. at 102 (“[W]hatever materials were before GAO
shall also be incorporated into the administrative record before the court.”). Other
judges on this court have disagreed, finding that “[j]udicial review is limited to the record
actually before the agency.” RhinoCorps Ltd. Co. v. United States, 87 Fed. Cl. 261, 276
(2009); see also Orion Tech., Inc. v. United States, 101 Fed. Cl. 492, 496 (2011) (“While
the declaration offered by plaintiff was part of the record before the GAO, it is not
required to be made a part of the administrative record that this court reviews.”). Still
other judges have found that “[t]he thrust of the Axiom decision … is that this court must
exercise restraint when considering whether or not to supplement the administrative
record in a bid protest.” L-3 Commc’n EOTech, Inc. v. United States, 87 Fed. Cl. 656,
671-72 (2009); see also Totolo/King v. United States, 87 Fed. Cl. 680, 693 (2009) (“This
court therefore does not interpret the new guidelines in Axiom to change the trial court’s


                                             56
practice, other than to emphasize restraint and adherence to precedent.”), appeal
dismissed and remanded sub nom. Totolo/King Joint Venture v. United States, 431 F.
App’x 895 (Fed. Cir. 2011).

       This court agrees that the GAO proceedings in a related bid protest case can be
made part of the record before this court. Defendant submitted an Agency Report to the
GAO, as well as Mr. Krips’ statement, and offered that same inadequate explanation to
this court. Despite Mr. Krips’ attempt to explain, however, he has not provided, and the
record does not include, any explanation of what, if any, additional information
defendant considered when making the reversal decision. In the seven-day interim
between when Desbuild-REC was notified of its failure to pre-qualify and the decision
reversal, Desbuild-REC, in an April 9, 2012 letter, requested a debriefing and asked a
series of questions it wanted answered, but no new project information was submitted.
Desbuild-REC’s April 9, 2012 letter attempted to characterize Desbuild’s role in the
Moscow project as “limited,” but it did not go so far as to say that Desbuild was not, as
intervenor’s Phase I submission represented, going to serve as the [redacted] percent
majority partner for the Joint Venture. In this case, Mr. Krips’ attempted explanation
does not truly assist the defendant or the court, because it does not explain what
information was used to arrive at the second, opposite decision. Moreover, Mr. Krips’
statement that defendant could consider information outside of offerors’ pre-qualification
submissions conflicts with defendant’s and intervenor’s insistence in their briefs that
defendant did not consider any additional information in making its reversal decision,
but rather just re-considered Desbuild-REC’s Phase I submission. Ultimately, the
administrative record is devoid of any explanation of what information defendant
considered in its allegedly “extensive reevaluation” or why defendant changed its mind
and made what appears to be an arbitrary decision to pre-qualify Desbuild-REC to
move on to Phase II of the procurement.

Percy Amendment Qualification

       Plaintiff’s second argument is that defendant’s reversal of its initial decision to
deny Desbuild-REC a ten percent, Percy Amendment price preference was arbitrary,
capricious, and contrary to law, and that defendant’s initial decision to deny Desbuild-
REC a Percy Amendment price preference was the correct decision as supported by
the administrative record. No challenge to plaintiff’s Percy Amendment qualification has
been raised.

       In order to qualify for the ten percent, Percy Amendment price preference,
applicants had to submit a certified “Percy Amendment Certification Form,”
demonstrating that the offeror had performed “similar construction work in the United
States or at a United States diplomatic or consular establishment abroad.” In addition,
the Pre-qualification Notice stated that, for joint ventures, “the company having 51
percent or greater interest in the JV must be the one completing the form.” Desbuild
submitted a certified form on February 28, 2012. In the April 13, 2012 letter signed by
Robert Powell, which informed Desbuild-REC that defendant had reversed its earlier
position to not allow Desbuild-REC to proceed to Phase II based on past, relevant


                                           57
project experiences, defendant also notified Desbuild-REC that it did not qualify for the
ten percent, Percy Amendment price preference. The defendant wrote:

       However, we have also determined that Desbuild-REC does not qualify
       for the price advantage denoted in the Percy Amendment. The
       amendment specifically requires that the American-owned firm must have
       performances of similar construction work in the United States or at a
       United States diplomatic or consular establishment abroad. While the
       [redacted] project is of similar size, scope and dollar value, the fact that
       Desbuild was only a [redacted] partner on the project causes this to not be
       relevant. Therefore, any bid submitted by your firm will be evaluated at the
       price given only.

(emphasis in original).

       In response, Desbuild-REC sent defendant the April 19, 2012 letter requesting a
reconsideration of the decision, in which Desbuild-REC tried to explain Desbuild’s role
on the [redacted] project it had listed on its Percy Amendment Certification Form.
Shortly after receiving the April 19, 2012 letter from Desbuild-REC, defendant changed
its previous Percy Amendment decision and contradicted its prior interpretation of the
Percy Amendment submission requirements, as it had done with respect to its past
project performance evaluation, once again without providing any rationale for the
reversal. On April 23, 2012, in a letter to intervenor, Mr. Powell stated: “In discussions
with OBO’s legal advisor and under further review by the pre-qualification panel, we
have determined that your Desbuild-REC is qualified to receive the price advantage
denoted in the Percy Amendment.” (emphasis in original).

        According to plaintiff, Desbuild-REC’s April 19, 2012 letter to defendant was,
however, an improper source of additional information for defendant to consider
regarding Desbuild-REC’s qualification for the Percy Amendment price preference
because it contained uncertified information which was not included on the properly
submitted, certified, Percy Amendment Certification Form and, in fact, contradicted the
certified statements made by Desbuild on its earlier certified, Percy Amendment
Certification Form. In addition, plaintiff argues that the April 19, 2012 letter came, not
from Desbuild directly, but from the Joint Venture. Plaintiff stresses that the Percy
Amendment Certification Form stated that, if offerors had been a partner or co-venturer
on a previous project, the offeror must list “the percentage of the project performed by
the bidder/offeror.” Desbuild stated on its Percy Amendment Certification Form that
“Desbuild Inc. was [redacted] JV partner on the project in [redacted].” Desbuild-REC’s
April 19, 2012 letter explained that “the [redacted] referred to Desbuild’s overall profit
share, not Desbuild’s day-to-day role.” Plaintiff asserts that the April 19, 2012 letter,
therefore, contradicted Desbuild’s certified statement on the certified, Percy Amendment
Certification Form that Desbuild had performed [redacted] of the work on the [redacted]
project. Moreover, plaintiff contends that the Pre-qualification Notice required that
Percy Amendment submissions be made by the majority partner in a joint venture, and,



                                           58
therefore, the April 19, 2012 letter, which was sent by Desbuild-REC, not Desbuild, was
an improper source of information and defendant should not have considered it.

         Plaintiff maintains that there are not sufficient grounds upon which defendant
could have reversed itself and granted Desbuild-REC a Percy Amendment price
preference.        The difference between the pre-qualification issue and the Percy
Amendment issue, as articulated by plaintiff at oral argument, was that, by law, Desbuild
alone was required to submit certified information regarding its Percy Amendment
eligibility and the Department of State should not have, and, certainly not without
explanation, accepted the uncertified, Joint Venture’s revised information on one
partner’s, Desbuild’s, [redacted] project participation. Thus, plaintiff argues, defendant’s
decision to grant Desbuild-REC a Percy Amendment price preference lacked a rational
basis, and defendant’s consideration of uncertified information submitted by Desbuild-
REC was contrary to law.

       Defendant and intervenor respond that defendant’s decision to grant Desbuild-
REC a Percy Amendment price preference was rational and within defendant’s
discretion.   Defendant contends that the Percy Amendment determination was
“[d]elegated to the contracting officer for this procurement.” Defendant and intervenor
both assert that the Percy Amendment does not define the term “similar construction
work,” but, rather, states that “determinations under this section shall be committed to
the discretion of the Secretary of State.” Intervenor argues that the GAO routinely has
found that the Department of State is entitled to “substantial discretion” in making Percy
Amendment determinations and that, while GAO decisions are not binding on this court,
GAO precedent is particularly persuasive in this area because this court has rarely
addressed the Percy Amendment. Indeed, the GAO has noted in decisions regarding
the Percy Amendment that what constitutes “similar construction work” is a discretionary
agency decision. See, e.g., Pernix-Serka, L.P., B-407656, B-407656.2, 2013 WL
936194, at *5 (Comp. Gen. Jan. 18, 2013); see also Perini Mgmt. Servs., Inc., B-
404261, 2010 WL 5567994, at *4 (Comp. Gen. Dec. 17, 2010); Am. Int’l Contractors,
Inc., B-260727, 1995 WL 324633, at *5 (Comp. Gen. May 31, 1995) (“[W]e accord
substantial deference to the Department of State’s interpretation of a statute that it is
responsible for implementing.”). As discussed above, however, GAO decisions are not
binding on this court and the absence of precedent is not a reason for any court to shy
away from its obligation to consider and decide the matters before it.

       According to defendant’s April 13, 2012 letter to Desbuild-REC, signed by the
Contracting Officer, Robert Powell, the defendant acknowledged that the [redacted]
project was “of similar size, scope and dollar value” as the Moscow project; but the
issue was whether Desbuild’s [redacted] role in the [redacted] project was sufficient for
defendant to credit Desbuild with that project. Defendant maintains that neither the
Percy Amendment nor any relevant regulations set a “requirement relating to either
ownership percentage for similar construction work if one was organized as a joint
venture or percentage of work performed.”          Rather, defendant asserts, Percy
Amendment qualification is a discretionary determination for defendant alone to make
on a case-by-case basis. Defendant states: “the only party that could make the


                                            59
determination of whether Desbuild’s performance tips into a yes or into a no is the
agency here. This is something that is solidly within their discretion.” Defendant
indicates that the Percy Amendment Certification Form asks firms to report the
percentage of the work they performed on previous projects simply as a way for
defendant to gather information about an offerors’ experience, but that there is no
threshold percentage of performance or ownership a firm must demonstrate. Defendant
stated at oral argument that Desbuild’s [redacted] participation in the [redacted] project
qualified as “similar construction work” for purposes of Percy Amendment qualification,
however, defendant’s counsel also agreed that Desbuild’s Percy Amendment eligibility
was “a close call” and that a decision the other way also “would be defensible.”

       Defendant asserts that Desbuild-REC’s April 19, 2012 letter did not contradict
Desbuild’s Percy Amendment Certification Form because there is no requirement that a
firm’s ownership percentage correlate with the percentage of work it performed on a
project. Thus, according to defendant, it was not inconsistent for Desbuild to state on
the Percy Amendment Certification Form that it was a [redacted] joint venture partner on
the [redacted] project, and for Desbuild-REC to then clarify in the April 19, 2012 letter
that Desbuild actually played a larger day-to-day role in the project, without addressing
that offerors were to submit the “percentage of the project performed by the
bidder/offeror.”

       With regard to the lack of documentation, defendant again maintains that, while
there is no one document in the administrative record that explains defendant’s reversal
of its initial Percy Amendment determination, several pieces of the record taken
together sufficiently explain defendant’s rationale, namely, 1) Desbuild’s Percy
Amendment Certification Form, which stated that Desbuild was a [redacted] joint
venture partner in the [redacted] project, 2) the initial comments from defendant’s Legal
Advisor, Dennis Gallagher, indicating that Desbuild’s qualification for a Percy
Amendment price preference was a “close call,” 3) Desbuild-REC’s April 19, 2012 letter
to defendant, explaining why Desbuild-REC should qualify for a price preference, and 4)
defendant’s April 23, 2012 letter to Desbuild-REC, indicating that, upon further review,
defendant had determined that Desbuild-REC was eligible for a Percy Amendment price
preference. In addition, defendant urges the court to consider the statement of
defendant’s Contract Specialist, Mr. Krips, filed at the GAO, in which he explained that it
is common for an agency to reconsider a Percy Amendment decision and take
additional information into account when doing so. The relevant portion of Mr. Krips’
statement reads:

      It is also common for the Department [of State] to reconsider decisions to
      deny eligibility under 22 U.S.C. [sic] 4852 [Omnibus Diplomatic Security
      and Antiterrorism Act of 1986] or price preference under the Percy
      Amendment when an adversely affected potential offeror requests
      reconsideration and supplies additional information.

      In the present case, the Department first reconsidered the experience of
      the Desbuild-REC International joint venture based on the overall


                                            60
      experience of both joint venture partners, then reconsidered the Percy
      Amendment price preference eligibility of the joint venture based on
      Desbuild’s performance on the [redacted] project. The [redacted] project
      is itself clearly a similar project and we determined that Desbuild’s work on
      that project was substantial. As indicated in the Caddell Beijing example,
      there is absolutely no requirement that work as a minority joint venture
      partner be excluded from consideration.

Taken together, defendant argues, these documents show that defendant permissibly
reevaluated Desbuild’s participation in the [redacted] project and determined that
Desbuild’s role was sufficient to establish that Desbuild had conducted “similar
construction work,” and to qualify Desbuild-REC for a Percy Amendment price
preference.

        The Pre-qualification Notice stated that the Percy Amendment Certification Form
had to be submitted with the pre-qualification package, and: “If a joint venture is formed,
the company having 51 percent or greater interest in the JV must be the one completing
the form.” Plaintiff does not dispute that Desbuild completed the certified, Percy
Amendment Certification Form that was submitted with Desbuild-REC’s pre-qualification
package, nor that Desbuild is an American-owned company. Plaintiff contests,
however, whether Desbuild submitted sufficient evidence of “[p]erformance of similar
construction work in the United States or at a United States diplomatic or consular
establishment abroad.” See 22 U.S.C. § 302. Desbuild’s Percy Amendment
Certification Form listed three projects as evidence of similar construction work: 1) the
design/build of a [redacted], valued at [redacted], 2) the design/build of a [redacted],
valued at [redacted], and 3) an interior/exterior renovation of [redacted], valued at
[redacted]. The Percy Amendment Certification Form instructed the offeror: “If the
bidder/offeror’s participation was as a partner or co-venture, indicate the percentage of
the project performed by the bidder/offeror.” Desbuild wrote: “Desbuild Inc. was
[redacted] JV Partner on the project in [redacted]. On all other projects, Desbuild Inc.
was [redacted] owner.”

       Defendant’s Legal Advisor, Mr. Gallagher, was asked by defendant’s Contract
Specialist, Mr. Krips, to evaluate the pre-qualification packages of ten United States
firms to determine if they qualified for a Percy Amendment price preference. Mr.
Gallagher concluded that Desbuild’s eligibility for a Percy Amendment price preference
was a “close call,” placing a question mark on the line labeled “Yes” for “Qualifies under
Percy,” and commenting: “Desbuild ([redacted]) is U.S. firm and was minority
([redacted]) partner in [redacted] project, which is similar in size and type of
construction. Other projects not similar. Close call if minority JV partner should be
credited with completion of project, but guess so.” Mr. Gallagher, therefore, found that
the [redacted] project was “similar construction work” relative to the Moscow project,
while Desbuild’s two other listed projects in [redacted], were not. Mr. Gallagher also
found that it was questionable whether Desbuild should be credited with the [redacted]
project, but suggested qualifying Desbuild based on the [redacted]                 project.
Nonetheless, Mr. Gallagher, apparently reluctantly, recommended to Mr. Krips that


                                            61
Desbuild-REC receive a Percy Amendment price preference. Despite Mr. Gallagher’s
recommendation, Desbuild-REC’s Percy Amendment eligibility was denied by the
Contracting Officer, Robert Powell, and communicated to intervenor in Mr. Powell’s April
13, 2012 letter to Desbuild-REC. There is no indication in the record of why Mr.
Gallagher’s recommendation was rejected. It seems that the Contracting Officer, Mr.
Powell, to whom the authority to make the final Percy Amendment determination
apparently was delegated, determined that Desbuild should not be credited with the
[redacted] project.

      Desbuild-REC responded to defendant on April 19, 2012, arguing that
defendant’s Percy Amendment determination was erroneous and requesting
reconsideration. With respect to the [redacted] project, Desbuild-REC’s letter stated:

      It is correct that Desbuild was a [redacted] partner on that project.
      However, the [redacted] referred to Desbuild’s overall profit share, not
      Desbuild’s day-to-day role. On that project, Desbuild had a substantial
      staff and had significant responsibilities for numerous highly relevant
      areas including design coordination; project management; onsite
      supervision; material procurement and shipping and selection of local
      vendors and subcontractors.

Desbuild-REC’s April 19, 2012 letter tried to explain that Desbuild’s statement on the
Percy Amendment Certification Form that Desbuild was “minority ([redacted]) partner on
[redacted] project” was actually intended to mean that Desbuild owned a [redacted]
stake in the joint venture that completed the project. Desbuild-REC suggested in the
April 19, 2012 letter that Desbuild performed more than [redacted] of the work on the
[redacted] contract, and that the type of work that Desbuild performed was “highly
relevant” to the Moscow project. In the April 19, 2012 letter, Desbuild-REC also cited to
¶ 2A.5 of the Pre-qualification Notice, which stated: “[p]roject examples in which the
Offeror only acted as a General Contractor or did not self-perform at least 30% of the
work will not be considered relevant.” Desbuild-REC argued that this provision of the
Pre-qualification Notice created a thirty percent “relevancy test” for previous projects
and that “Desbuild meets that requirement for the [redacted] project.” Desbuild-REC
also argued that crediting Desbuild with the [redacted] project would be consistent with
GAO precedent and with prior actions by the Department of State. Desbuild-REC
concluded: “Here, the solicitation indicated that past performance would be considered
if the contractor had 30% or more involvement. See Factor 2, ¶ 2A.5. Certainly, the
solicitation did not prohibit consideration and reliance on Desbuild’s significant
[redacted] performance.”

        After receiving Desbuild-REC’s April 19, 2012 letter, Mr. Powell responded to
Desbuild-REC on April 23, 2012. With regard to Desbuild-REC’s Percy Amendment
qualification, Mr. Powell’s April 23, 2012 letter, other than to offer a telephone number
and email address for further questions, stated in its entirety: “In discussions with OBO’s
legal advisor and under further review by the pre-qualification panel, we have



                                            62
determined that your Desbuild-REC is qualified to receive the price advantage denoted
in the Percy Amendment.” (emphasis in original).

        Plaintiff is correct that defendant’s April 19, 2012 letter to defendant relied on
information which was not contained in Desbuild’s certified, Percy Amendment
Certification Form. Although Desbuild’s Percy Amendment Certification Form simply
listed the location, complexity, type of construction, value, and Desbuild’s percentage
role for each of the three listed projects, Desbuild-REC’s April 19, 2012 letter contained
a further explanation of Desbuild’s role in the [redacted] project, as well as several
arguments as to why defendant should credit Desbuild with the [redacted] project and
reconsider Desbuild-REC’s Percy Amendment eligibility.

        Defendant and intervenor argue that Desbuild-REC’s April 19, 2012 letter to
defendant was not an improper source of additional information and defendant could
consider the April 19, 2012 letter for its review of Percy Amendment eligibility. As noted
above, intervenor cites to a GAO case, Pernix-Serka LP, 2013 WL 936194, for the
proposition that defendant was allowed to consider information outside of Desbuild-
REC’s Phase I submission while making the Percy Amendment determination.
Moreover, defendant and intervenor argue that plaintiff has not identified any law,
regulation, case law, or provision in the Pre-qualification Notice that establishes that
Desbuild-REC was not permitted to communicate with defendant during the pre-
qualification process, nor that defendant could not consider information other than what
was included in Desbuild’s certified, Percy Amendment Certification Form when making
the Percy Amendment determination. Defendant is correct that plaintiff does not point
specifically to any case law to bolster its argument, and there do not appear to be any
regulations or cases from this court directly on point.

       As noted above, although this court is not bound by the decisions of the GAO, it
does typically show respect to GAO decisions. In Pernix-Serka LP, cited by intervenor,
a case also involving Desbuild, the protestor challenged the award of a Department of
State contract to a Desbuild-Limak-Group 77 joint venture (DLG) to build an embassy
compound in Baghdad, Iraq. Pernix-Serka LP, 2013 WL 936194, at *1. The protestor
challenged, among other issues, the agency’s decision to grant DLG a Percy
Amendment price preference. Desbuild was the [redacted] percent majority partner in
the joint venture and, as such, filled out the Percy Amendment Certification Form.
Desbuild listed projects in Quantico, Virginia, New Delhi, India, and Kingston,
Jamaica, 36 as evidence of similar construction work. Elsewhere in DLG’s Phase I
36
  In Pernix-Serka, LP, DLG’s Percy Amendment Certification Form stated that the value
of the New Delhi, India project was $9.7 million, whereas in the instant case, Desbuild-
REC submitted the [redacted] project to satisfy Subfactor 2A, Technical Project
Experience, and stated in its Phase I submission that the value of the [redacted] project
was [redacted]. Similarly, in Pernix-Serka, LP, DLG’s Percy Amendment Certification
form stated that the value of the Kingston, Jamaica project was $12.7 million, while
Desbuild-REC’s Percy Amendment Certification Form lists the value of the [redacted]
project as [redacted]. Furthermore, in Pernix-Serka, LP, DLG’s certified, Percy
Amendment Certification form stated that the value of the [redacted] project was

                                           63
proposal, however, DLG discussed Desbuild’s work on the Mumbai, India project. Id. at
*3. In response to the protest, the Department of State explained that it had considered
Desbuild’s role in the Mumbai project when making its Percy Amendment determination,
even though the Mumbai project was not referenced on DLG’s Percy Amendment
Certification Form, but was indicated elsewhere in the proposal. The GAO stated: “In
assessing protests under the Percy Amendment, our decisions reflect a limited and
deferential review; we will not overturn an agency’s subjective evaluation judgments
unless they are unreasonable or inconsistent with the applicable procurement laws,
regulations, or the solicitation.” Id. at *5. The GAO then held: “Nothing in the Percy
Amendment or solicitation prohibited the agency from considering information outside
the form submitted by offerors.” Id. Therefore, the GAO found that it was within the
Department of State’s discretion to consider the discussion of Desbuild’s participation in
the Mumbai project, although it was not mentioned on Desbuild’s Percy Amendment
Certification Form, in determining that DLG qualified for a Percy Amendment price
preference. Id.

       Pernix-Serka, LP, however, is factually distinguishable from the above captioned
protest because, in Pernix-Serka LP, the GAO found that the agency could consider
information about the Mumbai project contained in the offeror’s Phase I submission, but
not mentioned on the Percy Amendment Certification Form. In the case currently
before the court, although Desbuild listed the [redacted] project on the Percy
Amendment Certification Form, Desbuild-REC provided supplemental information about
Desbuild’s role on the [redacted] project in the April 19, 2012 letter. See Pernix-Serka,
LP, 2013 WL 936194, at *5. The question, therefore, is whether the GAO’s holding in
Pernix-Serka, LP supports defendant’s decision to consider Desbuild-REC’s uncertified
April 29, 2012 letter in addition to the Percy Amendment Certification Form.

       Mr. Krips indicated in his sworn statement to the GAO that, in fact, it is not
unusual for defendant to reconsider Percy Amendment determinations or to consider
information outside of the Percy Amendment Certification Form, stating: “It is also
common for the Department [of State] to reconsider decisions to deny eligibility under
22 U.S.C. 4852 or price preference under the Percy Amendment when an adversely
affected potential offeror requests reconsideration and supplies additional information.”

         In the case currently before the court, defendant’s Legal Advisor, Mr. Gallagher,
initially evaluated Desbuild’s Percy Amendment Certification Form and found that
Desbuild-REC’s eligibility for a Percy Amendment price preference was a “close call,”
but noted that he “guess[ed]” Desbuild-REC should be granted a ten percent price
preference. Defendant’s Contracting Officer, Mr. Powell, however, disagreed and
initially communicated to Desbuild-REC that its Percy Amendment price preference had
been denied in the April 13, 2012 letter.



[redacted], whereas Desbuild-REC’s Percy Amendment Certification form stated that
the value of the [redacted] project was [redacted]. Neither defendant nor intervenor
addressed these inconsistencies.

                                           64
        Regardless of whether defendant properly considered the additional information
contained in intervenor’s April 19, 2012 letter, the court has no way of knowing whether
defendant’s reversal was based on the extent of intervenor’s participation in the
[redacted] project, and whether that participation was considered sufficient to qualify as
“similar construction work.” As with the reversal of the Phase I, Factor 2 pre-
qualification decision, arbitrary and capricious behavior on the part of the Department of
State is suggested by the failure of the Department of State to explain or document its
quick reversal of Desbuild-REC’s Percy Amendment price preference eligibility.
Defendant is incorrect that the administrative record, as a whole, supports defendant’s
reversal decision. The record lacks any explanation of what information defendant
considered when re-assessing Desbuild-REC’s Percy Amendment eligibility and of why
defendant changed its mind and determined Desbuild-REC had submitted sufficient
examples of “similar construction work.” Even a discretionary decision by an Executive
Branch agency may need to be documented. See Mori Assocs., Inc. v. United States,
102 Fed. Cl. 503, 522 (2011) (“[E]ven when an agency adopted regulations purporting
to give itself unlimited discretion to cancel solicitations, these decisions were still subject
to challenge for arbitrariness.”). In the case of a sudden and unexplained decision
reversal, an explanation must be offered by the agency to demonstrate that it was not
an arbitrary, capricious, or unfair decision to the detriment of other offerors during the
procurement process. In this case, defendant indicated in its April 23, 2012 letter to
Desbuild-REC that following discussions with the legal advisor, further review by the
pre-qualification panel had occurred, but no justification or documentation for the
reversal was offered.

        Moreover, it appears that defendant was not transparent or above-board with
Caddell, even after contract award. In Mr. Krips’ memorandum summarizing the
debriefing call with Caddell after award to Desbuild-REC stated, in response to
questions about Desbuild-REC’s Percy Amendment qualification, “I told him [Caddell’s
CEO, Eddie Stewart] that the Department of State Office of the Legal Advisor made all
Percy qualifications, and that the technical panel had no input on this.”                As
demonstrated above, however, Mr. Dennis Gallagher, the Legal Advisor, did not make
all the Percy Amendment qualifications decisions. In fact, in his April 3, 2012 Review of
Percy Qualifications memorandum sent to Mr. Krips, Mr. Gallagher stated that Desbuild-
REC’s eligibility for the Percy Amendment was a “close call.” He placed a question
mark on the line labeled “Yes” for “Qualifies under Percy,” and wrote under
“Comments:” “Desbuild ([redacted] JV) is U.S. firm and was minority ([redacted]) partner
in [redacted] project, which is similar in size and type of construction. Other projects not
similar. Close call if minority JV partner should be credited with completion of project,
but guess so.” Mr. Gallagher further indicated that the [redacted] project qualified as
“similar construction work” for the Moscow project, but was unsure whether Desbuild
should be credited with the [redacted] project for the Percy Amendment preference,
because Desbuild was a [redacted] joint venture partner. Mr. Gallagher concluded, that
he guessed Desbuild-REC should qualify for a Percy Amendment price preference.
Despite his conclusions, the Department of State initially rejected Mr. Gallagher’s
recommendation and concluded that Desbuild-REC did not qualify for the Percy
Amendment price preference.


                                              65
       The record before the court on the Percy Amendment eligibility decision made by
the Department of State personnel suggests that arbitrary, capricious, unsupported, and
reactive decision-making, without justification, may have occurred. More reasoned,
transparent, documented decision-making should be the standard by which important
procurement decisions are made.


Award Decision

      Finally, plaintiff claims that defendant’s decision to award the contract to
Desbuild-REC was arbitrary, capricious, and contrary to law. Plaintiff argues that
Desbuild-REC should have been disqualified from submitting a Phase II offer altogether,
and that, even if Desbuild-REC had been properly pre-qualified, Desbuild-REC’s offer
should have been evaluated at the full price, instead of with the ten percent, Percy
Amendment price preference applied. Plaintiff asserts that, had defendant properly
evaluated Desbuild-REC’s Phase I and Phase II proposals, Caddell’s Phase II offer
would have been the highest technically rated and lowest-priced offer, and, thus,
Caddell would have been selected for contract award.

        In addition, plaintiff maintains that, even if defendant’s pre-qualification and Percy
Amendment decisions were not arbitrary and capricious, defendant’s decision to award
the contract to Desbuild-REC was arbitrary and capricious “because DOS failed to
consider reasonably available information about Desbuild Inc.’s intentions to perform.”
According to plaintiff, “Desbuild-REC’s submissions to DOS make clear that Desbuild
Inc. is the majority venturer in name alone.” Plaintiff points to the Business
Management Plan submitted as part of Desbuild-REC’s Phase I submission and argues
that, in that Plan, “Desbuild Inc. failed to submit any evidence to DOS of its intention to
devote any equipment or manpower resources to the Contract.” Plaintiff also argues
that Desbuild-REC’s April 9, 2012 letter, stating that “Desbuild’s role would be limited to
certain management functions as indicated by the statement that no US Citizen would
be posted at the site,” “cannot be reconciled with Desbuild Inc.’s stated role as the
[redacted] majority venturer and leader of the joint venture.” In addition, plaintiff cites to
Desbuild-REC’s Phase II Management Plan, which included a list of
“Executive/Supervisory Employees” and a list of replacement employees. Plaintiff
states that on the “Executive/Supervisory Employees” list of [redacted], only [redacted]
were Desbuild employees, [redacted] would be working in Washington, D.C. According
to plaintiff, the list of replacement employees included two-hundred and six names,
none of which appear to be Desbuild employees. Thus, plaintiff contends, Desbuild-
REC’s submissions to defendant clearly demonstrated that, while Desbuild was named
the [redacted] joint venture partner, REC would be responsible for the vast majority of
contract performance. Plaintiff asserts that it is “arbitrary, capricious, and contrary to
law that the government could accept a joint venture proposal that on its face describes
a method of proceeding that is not borne out by the facts included in the proposal.”
Plaintiff also argues that, overall, defendant’s treatment of Desbuild-REC’s Phase I
proposal and Phase II submission was contradictory, as “Desbuild-REC was instead


                                             66
permitted to downplay Desbuild Inc.’s role for purposes of defining the necessary
technical project experience under Factor 2A but permitted to exaggerate Desbuild
Inc.’s role for purposes of securing a Percy Amendment price preference.” Such
inconsistent and unfair treatment of intervenor’s offer, plaintiff argues, makes
defendant’s final award decision arbitrary, capricious, and contrary to law.

        Defendant maintains that the Department of State acted in accordance with the
Pre-qualification Notice, Solicitation, and all applicable laws and regulations, and that
the award decision should be upheld. Defendant and intervenor argue that plaintiff has
failed to identify any statute, regulation, or provision of the Pre-qualification Notice or
Solicitation with which defendant failed to comply in making its award decision.

       As for plaintiff’s argument that Desbuild was the majority partner of the Desbuild-
REC Joint Venture “in name only,” Desbuild-REC’s Joint Venture Agreement, submitted
as part of the Joint Venture’s Phase I proposal, stated: “The shares of each Member in
the Joint Venture shall be as follows: Desbuild – [redacted], REC International –
[redacted].” The Joint Venture Agreement established that Desbuild and REC would be
[redacted] liable for fulfilling the joint venture’s obligations under the contract. The Joint
Venture Agreement also indicated that Desbuild, “as Leader of the Joint Venture, will be
authorized for all matters concerning the relations with members of the JV Team.”
Desbuild-REC’s Phase I proposal also included a Business Management Plan, which
indicated that the Joint Venture would have an Executive Committee with [redacted]
representatives from each partner firm that would be responsible for overseeing the
project. The Business Management Plan also indicated that Desbuild-REC would have
a Head Office in Desbuild’s existing Washington, D.C. offices, while REC’s existing
regional headquarters in Moscow would serve as the Project Support Office, and a
Project Site Office would be established at the job site. According to the Phase I
Business Management Plan, the Head Office in Washington:

       [redacted]

The Project Support Office:

       [redacted]

The Project Site Office:

       [redacted]

By indicating in the Business Management Plan that Desbuild would have
representatives on the Executive Committee, [redacted] employees in key leadership
positions, and that the Joint Venture’s head office would be housed in Desbuild’s
Washington, D.C. offices, Desbuild-REC’s Phase I submission tried to describe a
structure in which Desbuild could play a significant role in the Moscow project, even if its
presence at the job site would be small.



                                             67
       Desbuild-REC also submitted a Management Plan as part of its Phase II
submission. The Phase II Management Plan included a list of “Executive/Supervisory
Personnel,” with [redacted] included, as well as a “Staff/Key Personnel (Project
Management) Replacement List,” with approximately [redacted] listed. Plaintiff asserts
that, of the [redacted] on the “Executive/Supervisory Employees” list, only [redacted]
appeared to be Desbuild employees, while the list of replacement employees apparently
included [redacted] Desbuild employees. From the materials submitted to the court,
however, it is difficult to determine the origin of the employees. Desbuild-REC’s Phase
II Management Plan also indicated that, while REC had [redacted] employees located in
Russia, head office personnel would be located in Desbuild’s Washington, D.C. office.
The Phase II Management Plan explained that the Joint Venture would hire a minimal
number of United States citizens to work on-site because of a specialty security
clearance requirement. Instead, United States Citizen Personnel stationed in the Joint
Venture’s Washington, D.C., and Istanbul offices would temporarily visit the site to
oversee the project, while “[a]ll site work will be coordinated and managed by TCN’s
(Turkish Citizen Individuals) who hold several previous experiences working with OBO.”

        Based on the information provided in Desbuild-REC’s Phase I and Phase II
submissions about the structure of the Desbuild-REC Joint Venture, it is not clear
whether plaintiff’s allegation that Desbuild is the majority partner in name only was
accurate. Once again, defendant did little to explain its decision to positively review
Desbuild-REC’s submissions, even given the unclear information provided by the Joint
Venture. Defendant appears simply to have accepted Desbuild-REC’s submission
without trying to reconcile conflicting or unclear information. Defendant also failed to
explain how it reconciled Desbuild-REC’s representation in its April 9, 2012 letter to
defendant that “Desbuild’s role would be limited to certain management functions as
indicated by the statement that no US Citizen would be posted at the site,” with
Desbuild-REC’s representations throughout the rest of its Phase I and Phase II
submissions that Desbuild was the [redacted] majority partner in the Joint Venture. The
lack of documentation does give rise to a concern that, as plaintiff alleges, Desbuild-
REC was allowed to inconsistently downplay Desbuild’s role for the purposes of the pre-
qualification determination, but then emphasize Desbuild’s majority partner status for
purposes of securing the Percy Amendment price preference.

        The Pre-qualification Notice and the Solicitation indicated that the contract would
be awarded on a best-value basis and that defendant would conduct a trade-off process
to determine which offer represented the best value to the government. The Phase II
Solicitation listed two evaluation factors, Cost/Price and Management/Technical, and
stated that “the business management/technical proposal (Volume 2 of proposal)
is ranked as significantly more important than the price proposal (Volume I of
proposal).” (emphasis in original). In addition, the Solicitation explained how
defendant would evaluate offerors’ Cost/Price proposals and each of the subfactors
under the Management/Technical factor.




                                            68
        Seven offerors submitted Phase II proposals in response to defendant’s
Solicitation. Defendant’s Technical Evaluation Board evaluated those seven initial
proposals and found that:

      It is the consensus of the TEB that while Caddell’s technical proposal is
      rated slightly higher than Desbuild-REC JV’s technical proposal, the TEB
      feels that these two proposals are superior to the other technical
      proposals and stand in a category of their own. It is noted that these two
      firms are the only ones who are firmly established in Moscow and have
      ongoing construction projects similar in scope to the Moscow NOX.

Defendant’s Office of Cost Management performed an initial cost analysis and found
that, without the Percy Amendment price preference, a non-U.S. firm, Ant Yapi,
represented the best-value offer; however, with the Percy Amendment price preference
applied, Desbuild-REC’s offer represented the best value to the government. As
discussed above, the initial cost analysis considered plaintiff separately because
Caddell had not included information about the VAT in its initial proposal, but fixed that
omission in its Best and Final Offer. Based on those recommendations, defendant
established a competitive range for the Moscow project consisting of plaintiff, Desbuild-
REC, and FKE JV.

      Plaintiff, Desbuild-REC, and FKE JV all submitted final proposals. The Technical
Evaluation Board evaluated the final proposals and reported that it had come to a
consensus opinion that Desbuild-REC’s and Caddell’s proposals were rated “excellent,”
while FKE JV’s proposal earned a rating of “satisfactory.” The Technical Evaluation
Board recommended Desbuild-REC for contract award, explaining:

      The consensus report of the initial proposals indicated that Caddell’s
      proposal was rated ever so slightly higher than Desbuild-REC Int’l JV’s
      proposals. However, after holding discussions with the firms in the
      competitive range and evaluating the BAFO technical proposals, both
      firms are rated equally qualified from the technical standpoint. The TEB is
      confident that both Desbuild-REC Int’l JV and Caddell have the technical
      capability to successfully construct the NOX contract and any differences
      in their technical proposals are insignificant. After reviewing the BAFO
      prices, the TEB recommends that the Contracting Officer select Desbuild-
      REC Int’l JV for contract award because it offers the to the Government.

       The Office of Cost Management issued a Summary of Cost Proposals, which
showed that, excluding the VAT and the ten percent, Percy Amendment price
preference, Desbuild-REC’s was the lowest-priced offer at [redacted], while plaintiff’s
was the second-lowest-priced offer at [redacted]. The Director of the Office of Cost
Management wrote to defendant’s Contract Specialist, Mr. Krips, stating that the Office
of Cost Management “believes that the proposal submitted by the lowest bidder,
DESBUILD REC at [redacted] represents the best value offer and therefore
recommends acceptance.”


                                           69
         Defendant’s Contract Specialist, Mr. Krips, sent a Recommendation for Contract
Award to the Contracting Officer, Mr. Powell, recommending that defendant select
Desbuild-REC for award of the contract because its submission represented the best
value to the government. The Recommendation for Contract Award listed Desbuild-
REC as one of the pre-qualified “U.S. Firms,” without addressing the fact that defendant
had reconsidered its initial decisions during the pre-qualification phase to deny
Desbuild-REC pre-qualification, making intervenor ineligible to move on to Phase II of
the procurement, and to deny Desbuild-REC Percy Amendment price preference
eligibility, which probably would have made Desbuild-REC’s price higher than Caddell’s.

      Regarding defendant’s evaluation of Phase II submissions, the Recommendation
for Contract Award stated:

      Going into the final round, Caddell’s and Desbuild-REC JV’s technical
      proposal were rated almost equal with Caddell’s technical proposal
      receiving a very slight higher rating.37 FKE JV was rated somewhat lower
      than Caddell and Desbuild-REC JV. After the review of the final proposals,
      the TEB found that Caddell and Desbuild were rated almost equal.

(emphasis added). The Recommendation for Contract Award confirmed that the
contract was to be awarded on a best-value basis, with technical criteria being
“significantly more important than price criteria.” The Recommendation for Contract
Award then stated that Caddell and Desbuild-REC were both ranked number one on the
technical ranking, with FKE JV at number two, and that Desbuild-REC had the lowest
price. The Recommendation for Contract Award indicated that defendant had used a
trade-off process to determine which proposal represented the best value to the
government, and found:

      In this instance, the contractor that submitted the highest rated technical
      proposal also submitted the most reasonable price. Therefore, it is
      recommended that a fixed price contract be awarded to Desbuild-REC JV
      in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
      proposal represents the best value to the U.S. Government.

Thus, based on the recommendations of both the Technical Evaluation Board and the
Office of Cost Management, Mr. Krips recommended that defendant’s contracting officer
select Desbuild-REC for contract award. Defendant awarded the contract to Desbuild-
REC on September 26, 2012.



37
   Reference to Caddell’s slightly higher technical rating disappears from consideration
as the procurement proceeds. In fact, in the same Recommendation for Contract
Award, there is the reference to Caddell and Desbuild-REC as both ranked number one
on the technical rating, as well as the statement that “the contractor that submitted the
highest rated technical proposal also submitted the most reasonable price.”

                                           70
       The Solicitation indicated that the contract would be awarded on a best-value
basis, stating: “The contract award will be made to the acceptable, responsible
Offeror based on that Offeror’s proposal which offers to the Government the best
value in terms of technical and price factors as indicated in this Section M.”
(emphasis in original). The Solicitation stated, with regard to a trade-off process:

      The Government may consider award to other than the lowest priced
      offeror or other than the highest technically rated offeror based upon the
      evaluation factors and subfactors stated in the solicitation. This source
      selection will be based upon Best Value and may result in an award being
      made to a higher rated, higher priced offeror where the decision is
      consistent with the evaluation factors and where it is deemed by the
      Government that the technical superiority, overall business approach,
      and/or the past performance of the higher priced offer outweighs the
      benefits of any price difference. The Government, using sound business
      judgment, will base the source selection decision on a trade-off analysis of
      the proposals submitted in response to this solicitation in accordance with
      the evaluation factors established for this solicitation.

Mr. Krips’ Recommendation for Contract Award, however, indicated that defendant
concluded that Desbuild-REC’s offer was both the lowest-priced and also the highest
technically rated offer. The Recommendation for Contract Award also stated explicitly
that “[t]he Government used the tradeoff process to determine the proposal that
represents the best value to the Government,” notwithstanding the rankings of the
offerors.

      The FAR at 48 C.F.R. § 15.101-1 describes the procedures that agencies should
employ in conducting a trade-off process, as follows:

      (a) A tradeoff process is appropriate when it may be in the best interest of
      the Government to consider award to other than the lowest priced offeror
      or other than the highest technically rated offeror.

      (b) When using a tradeoff process, the following apply:

             (1) All evaluation factors and significant subfactors that will affect
             contract award and their relative importance shall be clearly stated
             in the solicitation; and

             (2) The solicitation shall state whether all evaluation factors other
             than cost or price, when combined, are significantly more important
             than, approximately equal to, or significantly less important than
             cost or price.

      (c) This process permits tradeoffs among cost or price and non-cost
      factors and allows the Government to accept other than the lowest priced


                                           71
       proposal. The perceived benefits of the higher priced proposal shall merit
       the additional cost, and the rationale for tradeoffs must be documented in
       the file in accordance with 15.406.

48 C.F.R. § 15.101-1 (emphasis added).

       The predetermination in the Pre-qualification Notice to use a trade-off analysis,
and the application of a trade-off analysis to evaluate and award the contract to
Desbuild-REC when it was considered by defendant to be the lowest-priced and highest
technically rated offeror, is peculiar at best. Mr. Krips’ Recommendation for Contract
Award stated that “[t]he Government used the tradeoff process to determine the
proposal that represents the best value to the Government.” Although a trade-off
analysis was projected in the Pre-qualification Notice before it was indicated by the
offers received, even Mr. Krips’ Recommendation for Contract Award did not seem to
direct that a trade-off analysis should be conducted and did not explain if or how the
trade-off process was conducted. The use of a trade-off analysis when one was not
indicated by the applicable regulations is another indication of defendant’s careless
procedures in conducting this procurement.

      The FAR also prescribes the Source Selection Authority’s responsibilities when
performing a best-value determination, and the documentation needed to support an
agency’s source selection decision. The relevant provision provides:

       The source selection authority’s (SSA) decision shall be based on a
       comparative assessment of proposals against all source selection criteria
       in the solicitation. While the SSA may use reports and analyses prepared
       by others, the source selection decision shall represent the SSA’s
       independent judgment. The source selection decision shall be
       documented, and the documentation shall include the rationale for any
       business judgments and tradeoffs made or relied on by the SSA, including
       benefits associated with additional costs. Although the rationale for the
       selection decision must be documented, that documentation need not
       quantify the tradeoffs that led to the decision.

48 C.F.R. § 15.308 (2012); see also Akal Sec., Inc. v. United States, 103 Fed. Cl. at 336
(“FAR 15.308 has two relevant requirements: 1) the SSA must use his or her
independent judgment in making a source selection and 2) the source selection
decision must be documented, including the rationale for any business judgments and
tradeoffs made or relied on by the SSA.”); FirstLine Transp. Sec., Inc. v. United States,
100 Fed. Cl. 359, 381 (2011) (“[W]hen selecting a low-price technically inferior proposal
in a best-value procurement where non-price factors are more important than price, it is
not sufficient for the government to simply state that a proposal’s technical superiority is
not worth the payment of a price premium. Instead, the government must explain
specifically why it does not warrant a premium.”). Thus, the FAR requires that the
Source Selection Authority document his or her rational basis for making a best-value
determination. See BayFirst Solutions, LLC v. United States, 102 Fed. Cl. 677, 682 n.4


                                            72
(2012) (“The Source Selection Authority (SSA) did not prepare the SSD [Source
Selection Decision], but signed the document under the rubric ‘SSA
Approval/Concurrence.’ The SSA provided no statement within or attached to the SSD
that explained his award decision.… There is some question whether a mere signature
shows that an SSA exercised independent judgment in conformance with this
regulation.”); see also Serco Inc. v. United States, 81 Fed. Cl. at 497 (“[c]onclusory
statements, devoid of any substantive content, have been held to fall short of” the FAR’s
documentation requirement in 48 C.F.R. § 15.308.); Info. Scis. Corp. v. United States,
73 Fed. Cl. at 120 (“‘Although source selection officials may reasonably disagree with
the ratings and recommendations of evaluators, they are nonetheless bound by the
fundamental requirement that their independent judgments be reasonable, consistent
with the stated evaluation scheme and adequately documented.’” (emphasis in original)
(quoting Matter of Dyncorp Int’l LLC, No. B–289863, 2002 CPD ¶ 83, 2002 WL 1003564
(Comp. Gen. May 13, 2002))), recons. in unrelated part, 75 Fed. Cl. 406 (2007). To be
well-documented, the source selection decision “must contain more than conclusory
and generalized statements.” Standard Commc’ns, Inc. v. United States, 101 Fed. Cl.
723, 735 (2011) (citing Serco Inc. v. United States, 81 Fed. Cl. at 497).

       In FirstLine, the court noted that “FAR 15.308 permits the SSA to ‘use reports
and analyses prepared by others,’ but it also requires the SSA to document ‘the
rationale for any business judgments and tradeoffs made or relied on by the SSA....’ 48
C.F.R. § 15.308.” FirstLine Transp. Sec., Inc. v. United States, 100 Fed. Cl. at 383.
Similarly, in Serco, the court wrote:

      Of course, it is conceivable that the SSA, in his own mind, made such
      cost/benefit comparisons, but merely failed to capture them on paper.
      But, that too would violate the FAR and its documentation requirements.
      To comply with the FAR, documentation must “include the rationale for
      any business judgments and tradeoffs made, including the benefits
      associated with additional costs.”

Serco Inc. v. United States, 81 Fed. Cl. at 498-99 (quoting Si-Nor, Inc., B-282064, B-
282064.2, 1999 WL 33210196, at *3 (Comp. Gen. May 25, 1999)). 38
38
  In Standard Communications, Inc. v. United States, an argument was raised that “the
SSA’s statements were satisfactory because FAR [15.308] only requires explanatory
documentation when a higher-priced proposal is selected over lower-priced proposals.”
The court, however, indicated that:

      Defendant is partially correct in its reading of FAR 15.308—when selecting
      a proposal that involves “additional cost,” the rationale for the decision
      must be documented. However, defendant reads the provision to require
      documentation only in that scenario. In its interpretation, defendant
      overlooks the qualifying term “including,” a word that indicates that the
      material that follows is neither exclusive nor exhaustive. Therefore, the
      Court finds that defendant’s interpretation is unpersuasive. FAR 15.308
      does not excuse an SSA from documenting his or her reasoning for

                                           73
       In the above captioned protest, there were many unexplained actions and
inconsistencies, which make it difficult for the court to determine the role, hierarchy, and
authority of defendant’s various officials and whether the official who made the final
award decision exercised independent judgment. With regard to defendant’s trade-off
analysis, the only document in the administrative record that provides any rationale for
defendant’s award of the contract to Desbuild-REC was Mr. Krips’ Recommendation for
Contract Award. Mr. Krips’ Recommendation for Contract Award briefly summarized
the procurement process, including the evaluation of both the Phase I and Phase II
proposals. Mr. Krips’ Recommendation for Contract Award concluded that, once Best
and Final offers were submitted, Caddell and Desbuild-REC both were ranked number
one on technical ratings, with FKE JV ranked number two, and that Desbuild-REC had
the lowest price once the offerors made their Best and Final Offers. Mr. Krips’
Recommendation for Contract Award stated:

       O. Recommendation for Award:
       The Government used the tradeoff process to determine the proposal that
       represents the best value to the Government. Technical factors were
       significantly more important than cost in the tradeoff process. Offerors
       were advised in the RFP that the award may be made to the contractor
       submitting other than the lowest price, when, in the judgment of the
       Government the combination of merit and costs represents the best value
       to the Government [sic]

       In this instance, the contractor that submitted the highest rated technical
       proposal also submitted the most reasonable price.39 Therefore, it is
       recommended that a fixed price contract be awarded to Desbuild-REC JV
       in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
       proposal represents the best value to the U.S. Government.

       In accordance with FAR 9.104-1, it has been determined that Desbuild-
       REC JV has both the technical and financial resources to perform this
       contract. Desbuild Incorporated-Renaissance International JV is not on the
       GSA list of suspended or debarred contractors and is therefore eligible for
       contract award.

       declining to pay a premium for a higher-priced, technically superior
       proposal, particularly in a situation where, as here, the non-price factors
       were said to be more important than price.

Standard Commc’ns, Inc. v. United States, 101 Fed. Cl. at 736 (internal citations
omitted).
39
   This statement conflicts with Mr. Krips’ statement, just several lines above on the
same page, that plaintiff and intervenor were both ranked number one on technical
factors, as well as defendant’s earlier statement that Caddell was rated slightly higher
than Desbuild-REC on technical factors.

                                            74
     The top of the first page of Mr. Krips’ Recommendation for Contract Award, reads
“ACTION MEMORANDUM FOR ROBERT R. POWELL- SOURCE SELECTION
AUTHORITY.” (emphasis in original). The Recommendation reads:

       That you approve the selection of Desbuild Incorporated – REC
       International JV to construct the Moscow Annex Office building. The
       award of a contract to Desbuild-REC JV is recommended because their
       final proposal submission represents the best value for the U.S.
       Government in accordance with the evaluation criteria in the Request for
       Proposal SAQMMA-12-R-0117. The contract amount is [redacted].

After the Recommendation, there are two lines, one marked “Approve” and one marked
“Disapprove.” A check mark was placed on the line marked “Approve.” Next to the
name “ROBERT R. POWELL,” the initials “RRP” were initialed. Mr. Krips also initialed
the document.

      There do not appear to be any documents included in the record between the
time Mr. Krips issued his Recommendation for Contract Award and the signed contract
award document sent to Desbuild-REC on September 26, 2012. No document is in the
record in which defendant’s Contracting Officer, Mr. Powell, offered any explanation
regarding why Desbuild-REC was selected for contract award. Although the evaluation
placed plaintiff and intervenor in close proximity on the technical factors and the two
were the closest on price, the only documented rationale for defendant’s decision to
award the contract to Desbuild-REC was authored by Mr. Krips, who was not the
Source Selection Authority and not the Contracting Officer.

         In addition, the contract itself presents further irregularities. On the signed copy
of the contract included in the record, under section “31a. NAME OF CONTRACTING
OFFICER,” there is a signature line which has underneath it the name, “Robert Powell.”
A different name, David W. Vivian, however, was signed as the signatory for the United
States of America. There are only two references to David W. Vivian in the
administrative record, the signed contract and the signature on defendant’s September
26, 2012 letter to Desbuild-REC, informing Desbuild-REC that it had been awarded the
contract, both of which Mr. Vivian signed as “Contracting Officer.” Neither defendant
nor intervenor addressed Mr. Vivian’s role in the procurement in either their briefs or at
oral argument. Moreover, defendant’s September 26, 2012 letters to FKE JV and
Caddell, informing them that they had not been awarded the contract, were signed by
“Robert Powell, Contracting Officer,” and Amendment Number 1 to the Solicitation, like
the signed contract, listed Robert Powell as the Contracting Officer. The record before
the court does not explain who Mr. Vivian was, nor why he signed the contract when Mr.
Powell was the listed Contracting Officer. If Robert Powell was the source selection
official, as indicated by Mr. Powell’s initialing Mr. Krips’ Recommendation for Contract
Award, why did Mr. Vivian sign the contract?




                                             75
        Mr. Powell’s mere initialing of Mr. Krips’ Recommendation for Contract Award
and check off of the line marked “Approve” under the Recommendation, also raises
issues as to whether there is in the record a sufficient showing that Mr. Powell had
exercised sufficient independent judgment in satisfaction of FAR 15.308. Even if Mr.
Powell, in his own mind, analyzed the record and made cost/benefits comparisons
between the final offers of Caddell, Desbuild-REC, and FKE JV, his failure to document
his deliberation on paper violates FAR 15.308. See Serco Inc. v. United States, 81 Fed.
Cl. at 498-99. Mr. Powell’s actions, to check off a line marked “Approve” and to initial a
Recommendation for Contract Award prepared by defendant’s Contract Specialist, Mr.
Krips, demonstrate even less independent analysis than the Source Selection
Authorities’ actions in Information Sciences Corp. and FirstLine, both cases in which
the courts found the Source Selection Authority’s decision fell short of FAR 15.308’s
requirements.

       In Information Sciences Corp., 73 Fed. Cl. 70, and FirstLine Transportation
Security, Inc., 100 Fed. Cl. 381, the Source Selection Authority at least included a short
statement indicating that a review of the analysis of the officials below the Source
Selection Authority had been conducted and whether the source selection official
agreed or disagreed with the analysis. In the instant case, Mr. Powell never offered any
statement in his own words as to why he approved Mr. Krips’ recommendation. Nor did
Mr. Powell offer his thoughts regarding what, if any, business judgments were made
that led to Desbuild-REC’s selection. Even with the multiple decision reversals leading
up to defendant’s award decision, Mr. Powell appears to have simply signed off on a
document that was authored by defendant’s Contract Specialist, Mr. Krips. The plain
language of FAR 15.308 requires that, “[w]hile the SSA may use reports and analyses
prepared by others, the source selection decision shall represent the SSA’s
independent judgment.” In Information Sciences Corp., the court described the
importance of documenting a selection decision, even if a selection official agrees with
the recommendation forwarded to him or her in order to demonstrate the exercise of
independent judgment. See Info. Scis. Corp. v. United States, 73 Fed. Cl. at 121
(“Although the FAR contemplates that decisional authority may be supported by other
procurement officials, nevertheless, FAR 15.308 requires evidence of the exercise of
independent judgment. Therefore, the SSA simply can agree with the reasoning of the
CO [Contracting Officer] or Minority Report, but only if the SSA provides an independent
rationale for that agreement.” (emphasis in original)); see also Standard Commc’ns, Inc.
v. United States, 101 Fed. Cl. at 736 (finding that the Source Selection Authority’s
reference in her selection decision to the analysis of various source selection officials
below her were inadequate because, “[a]lthough the SSA may have been fully briefed,
she did not document her consideration of the facts and figures presented to her in a
way that satisfies FAR.”).

       The court recognizes that Akal Security, Inc. v. United States, presented similar
circumstances in which the Source Selection Authority merely adopted prepared reports
by “signing his name next to the word ‘Approved,’” but in upholding such a practice
under FAR 15.308, the Akal court emphasized that there was “no evidence of
disagreement” in the record and indicated that the court’s decision was consistent with


                                           76
the presumption of regularity. Akal Sec., Inc. v. United States, 103 Fed. Cl. at 335-36.
It is not sufficient, however, for a source selection authority to simply initial, or check the
“Approve” line of a recommendation, and meet the independent judgment requirement
of FAR 15.308, particularly when, as here, procurement officials have not advanced
consistent positions, and have reversed themselves multiple times without
documentation of their reasons, during the selection process. As noted above, even if
Mr. Powell did make an independent decision in his own mind, which seems counter to
the apparent lack of documentation in the record and evidence of Mr. Powell’s lack of
involvement during the contract process before and after contract selection, FAR 15.308
requires documentation of the Source Selection Authority’s independent award decision
in the record. The record in this case lacks documentation of such an independent
award decision. If Mr. Vivian was the Contracting Officer and Source Selection
Authority, there is even less documentation in the record to demonstrate his approval or
disapproval of the award to Desbuild-REC and no evidence in the record his
independent judgment was exercised.

      Moreover, the document on which the source selection official relied, Mr. Krips’
Recommendation for Contract Award, was itself conclusory and contained errors and
information that conflicted with other documents in the record.           Mr. Krips’
Recommendation for Contract Award described the Technical Evaluation Board’s
evaluation of the offerors’ final proposals, stating:

       On September 13, 2012, the technical Evaluation Board reconvened to
       review the revisions to the technical proposals submitted by Caddell;
       Desbuild-REC Int’l JV; and FKE JV. Going into the final round, Caddell’s
       and Desbuild-REC JV’s technical proposal were rated almost equal with
       Caddell’s technical proposal receiving a very slight higher rating. FKE JV
       was rated somewhat lower than Caddell and Desbuild-REC JV. After the
       review of the final proposals, the TEB found that Caddell and Desbuild
       were rated almost equal. There was improvement in the FKE JV proposal
       but it was not rated as high as either Caddell or Desbuild-REC JV.

Mr. Krips’ Recommendation for Contract Award listed the initial proposed costs and the
best and final offers for each of the three offerors, stating that Desbuild-REC’s best and
final offer was evaluated at [redacted], Caddell’s at [redacted], and FKE JV’s at
[redacted], all including the VAT, and that all three offerors were deemed eligible for the
Percy Amendment price preference. After reciting the technical and price evaluations
performed by defendant’s Technical Evaluation Board and Office of Cost Management,
respectively, Mr. Krips’ Recommendation for Contract Award included the following
information:

       N. Selection of Contractor:
       Consensus Technical Rankings:
       The following is the consensus ranking of the three contractors’ technical
       proposals (highest to lowest). See the attached Consensus Report.



                                              77
      1. Caddell and Desbuild-REC JV
      2. FKE JV

      Price Evaluation:
      Based upon comparison with Caddell’s price, Desbuild-REC lnt’l JV’s price
      is considered to be a fair and reasonable price.

      O. Recommendation for Award:
      The Government used the tradeoff process to determine the proposal that
      represents the best value to the Government. Technical factors were
      significantly more important than cost in the tradeoff process. Offerors
      were advised in the RFP that the award may be made to the contractor
      submitting other than the lowest price, when, in the judgment of the
      Government the combination of merit and costs represents the best value
      to the Government.

      In this instance, the contractor that submitted the highest rated technical
      proposal also submitted the most reasonable price. Therefore, it is
      recommended that a fixed price contract be awarded to Desbuild-REC JV
      in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
      proposal represents the best value to the U.S. Government.

             [sic] In accordance with FAR 9.104-1, it has been determined that
      Desbuild-REC JV has both the technical and financial resources to
      perform this contract. Desbuild Incorporated-Renaissance International JV
      is not on the GSA list of suspended or debarred contractors and is
      therefore eligible for contract award.

(emphasis added). The summary Recommendation statement on the first page of Mr.
Krips’ Recommendation for Contract Award states, “[t]he award of a contract to
Desbuild-REC JV is recommended because their final proposal submission represents
the best value for the U.S. Government in accordance with the evaluation criteria in the
Request for Proposal SAQMMA-12-R-0117,” and the summary information quoted
above represents the entirety of defendant’s scanty, trade-off analysis contained in the
record.

       As the Standard Communications court noted, to be well-documented, the
source selection decision “must contain more than conclusory and generalized
statements.” Standard Commc’ns, Inc. v. United States, 101 Fed. Cl. at 735 (citing
Serco Inc. v. United States, 81 Fed. Cl. at 497 (“Conclusory statements, devoid of any
substantive content, have been held to fall short of…” the requirements in FAR
15.308.)). The Serco court further stated that articulating business judgments requires
more of the Source Selection Authority than “simply parrot[ing] back the strengths and
weaknesses of the competing proposals.” Serco Inc. v. United States, 81 Fed. Cl. at
497. Although in both Standard Communications and Serco the source selection
authority selected a higher-priced offeror, whereas here defendant chose an offeror that


                                          78
defendant claimed offered both the lowest price and the highest technical rating, the
Standard Communications court made clear that FAR 15.308 still requires a Source
Selection Authority to document his or her rationale for selecting the lowest-priced
offeror, and that such documentation requires more than conclusory statements. See
Standard Commc’ns, Inc. v. United States, 101 Fed. Cl. at 736.                Mr. Krips’
Recommendation for Contract Award, which in the instant case also represents Mr.
Powell’s selection decision, falls far below that standard. There is no narrative
summary of the technical strengths and weaknesses of the three offerors that were
included in the competitive range, much less a discussion comparing those offerors to
one another. Mr. Krips’ Recommendation for Contract Award simply states that Caddell
and Desbuild-REC were both ranked technically number one or, inexplicably, that
Desbuild-REC offered the highest technically rated offer, with FKE JV ranked number
two, and lists the offerors’ prices. The only statement representing a business judgment
or rationale was: “In this instance, the contractor that submitted the highest rated
technical proposal also submitted the most reasonable price.” That statement fails to
address plaintiff, Caddell’s, equally, if not slightly higher, ranked offer.         The
Recommendation for Contract Award contains no explanation of why Desbuild-REC’s
proposal was recommended, when Caddell’s proposal was rated slightly higher than
Desbuild-REC’s technical proposal at one point during the evaluation and the proposals
were close in price. FAR 15.308 requires more than a recitation of offerors’ technical
ratings and prices and Mr. Krips’ Recommendation for Contract Award fails to supply an
explanation of why Desbuild-REC’s proposal represented a better value to the
government than Caddell’s or FKE JV’s proposals. For this reason, even if Mr. Krips’
Recommendation for Contract Award represented the considered decision of
defendant’s Source Selection Authority, it would fall short of FAR 15.308’s
requirements. The court is not substituting its judgment for that of the agency; rather,
the agency has failed to do its job by failing to document its decisions and trade-offs.
Because the record contains no documentation of an independent award decision by
defendant’s Source Selection Authority, the selection decision, which utilized the trade-
off process, violates FAR 15.308.

       In Impresa Construzioni Geom. Domenico Garufi v. United States, the United
States Court of Appeals for the Federal Circuit explained that the APA standard of
review permits contract awards to be set aside “if either (1) the procurement official’s
decision lacked a rational basis; or (2) the procurement procedure involved a violation of
regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d at 1332. When an award decision lacks a rational basis, “the test for
reviewing courts is to determine whether ‘the contracting agency provided a coherent
and reasonable explanation of its exercise of discretion.’” Id. In Impresa Construzioni
Geom. Domenico Garufi v. United States, the Federal Circuit stated the following with
respect to circumstances in which the court was unable to determine whether a
contracting officer’s decision was arbitrary and capricious based on the lack of
documentation of that decision in the record:

      The government urges, and the Court of Federal Claims found, that Garufi
      [the protester] has not sustained the burden on this record of showing that


                                           79
      the finding of responsibility was necessarily invalid. But the problem is
      that we also do not know whether the contracting officer’s determination
      was valid either since the contracting officer’s reasoning supporting that
      determination is not apparent from the record, and Garufi has been denied
      the opportunity to determine the contracting officer’s explanation for
      finding JVC [the contract awardee] responsible. . . . This conundrum
      leads us into a most difficult and confusing area of administrative law,
      namely the circumstances under which an administrative agency will be
      compelled to provide an explanation for its decision. . . . Contracting
      officers are not obligated by the APA to provide written explanations for
      their actions. Decisions by contracting officers are not adjudicatory
      decisions to be made on the record after a hearing. See John C.
      Grimberg Co. v. United States, 185 F.3d [1297,] 1303 [(Fed. Cir. 1999)].
      Nor are they formal rulemakings. As the government correctly points out,
      where the contracting officer makes a determination of responsibility, as
      opposed to the situation in which he [or she] makes a determination of
      non-responsibility, the regulations do not require the contracting officer to
      ‘make, sign and place in the contract file a determination of’ responsibility
      which states the basis for the determination. . . . However, under the APA
      even where an explanation or reason is not required, a reviewing court
      has power to require an explanation. . . . Because of [the] presumption of
      regularity, the agency should not be required to provide an explanation
      unless that presumption has been rebutted by record evidence suggesting
      that the agency decision is arbitrary and capricious.

Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1337–38.
The Federal Circuit suggested that, in the procurement context, a court should elicit an
explanation from a contracting officer through testimony, rather than by remanding the
contracting officer’s decision to the procuring agency. See id. at 1339; see also Linc
Gov’t Servs., LLC v. United States, 108 Fed. Cl. at 493.

       In this bid protest case, however, the lack of documentation in the record of the
Department of State’s reversals with respect to the pre-qualification and Percy
Amendment price preference decisions, as well as the numerous irregularities that
occurred during the course of this procurement, suggest that defendant may have
chosen not to explain the reversals in this court. The agency took advantage of an
opportunity to explain itself through the Agency Report submitted at the GAO, as well as
in Mr. Krips’ declaration submitted at the GAO, which the court accepts as admissible
here. Neither the Agency Report nor Mr. Krips’ statement, however, provide the
necessary explanations. Defendant’s Agency Report only briefly mentioned that
defendant reversed its initial determinations that Desbuild-REC neither pre-qualified for
the contract, nor was eligible for the Percy Amendment price preference, but does not
include any explanation of why defendant changed its mind on either issue. In his
statement to the GAO, Mr. Krips simply stated that the agency reconsidered its decision
not to pre-qualify Desbuild-REC, “based on the overall experience of both joint venture
partners,” and reconsidered its decision to deny Desbuild-REC the Percy Amendment


                                           80
price preference, “based on Desbuild’s performance on the [redacted] project,” which
Mr. Krips believed to be “clearly a similar project.” Mr. Krips also indicated that
defendant reversed its decision on the Percy Amendment price preference based on a
determination that “Desbuild’s work on that project was substantial.” In neither
document was the extensive analysis defendant claimed it undertook within the
relatively short amount of time before defendant reversed its decision offered for the
record at the GAO or to this court. Mr. Krips’ explanation does not provide the court
with sufficient information to evaluate the reasonableness of the agency’s decision to
reverse the pre-qualification and Percy Amendment price preference decisions.40 The
agency’s quick and undocumented reversals of its decisions not to prequalify Desbuild-
REC and not to qualify Desbuild-REC for the Percy Amendment price preference
strongly suggest arbitrary and capricious action. The court, however, does not seek
further explanation of these decisions from defendant because the agency has had an
opportunity to explain itself, tried to do so at the GAO, but still offered little of substance
and failed to demonstrate it did not act in an arbitrary and capricious manner and in
violation of applicable statutes and regulations during the course of the procurement. In
this court, there was much discussion of the supporting documents, including multiple
requests to get more legible copies of Mr. Gallagher’s, Percy Amendment analysis.
None of these discussions generated any requests by defendant to supplement the
record in any way, other than to include the GAO record, including Mr. Krips’ statement,
as part of the record in this court for this court’s consideration. Even under Impresa,
having had the opportunity to explain its actions, it does not seem necessary to give
defendant yet another chance to fill in the gaps and to try to explain what may not be
defensible.

Prejudice

        To prevail in a bid protest case, the protestor not only must show that the
government’s actions were arbitrary, capricious, or otherwise not in accordance with the
law, but the protestor also must show that it was prejudiced by the government’s
actions. See 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of prejudicial
error.”); see also Banknote Corp. of Am., Inc. v. United States, 365 F.3d at 1351 (noting
that to establish prejudice for an alleged violation of statute or regulation, a protestor
must show that there was a “substantial chance” it would have received the contract
absent the alleged error) (citations omitted).

       There has been some confusion in this court’s jurisprudence between what one
Judge on this court has dubbed “allegational prejudice” versus “APA prejudice.” See
Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. at 695. “Allegational prejudice”
refers to the threshold showing that a plaintiff must make in order to demonstrate that it
is an interested party under 28 U.S.C. § 1491(b)(1), which is required to establish
40
  The court notes that it must evaluate the agency’s rationale “at the time of decision.”
See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. at 654. In addition to being
unhelpful, Mr. Krips’ GAO testimony constitutes a post-hoc explanation and does not
reveal the contracting officers’ contemporaneous reasons for reversing the pre-
qualification and Percy Amendment price preference decisions.

                                              81
standing in a bid protest case. See Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl.
at 695. “Allegational prejudice” is to be judged before the court analyzes the lawfulness
of the agency’s allegedly improper action and “turns entirely on the impact that the
alleged procurement errors had on a plaintiff’s prospects for award, taking the
allegations as true.” See id. at 696 (citing USfalcon, Inc. v. United States, 92 Fed. Cl. at
450 (explaining that “for purposes of standing” the court “must accept the well-pled
allegations of agency error to be true”)). There is no question in the court’s mind, as
discussed above, that plaintiff passes the “allegational prejudice” test. “APA prejudice,”
on the other hand, refers to the second type of prejudice a plaintiff must establish in
order to prevail in a bid protest case. That second prejudice requirement is rooted in
the standard of review under the APA, which 28 U.S.C. § 1491(b) establishes as the
standard of review for bid protest cases. See Linc Gov’t Servs., LLC v. United States,
96 Fed. Cl. at 696 (citing Textron, Inc. v. United States, 74 Fed. Cl. at 284-85). In order
to establish “APA prejudice,” a plaintiff “‘must show that there was a “substantial
chance” it would have received the contract award but for the errors’ that the court
determines the agency made.” Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. at
696 (quoting Bannum, Inc. v. United States, 404 F.3d at 1353).

        The facts in the above captioned protest demonstrate that plaintiff was next in
line for the Moscow contract if the contract had not been awarded to Desbuild-REC and
that, but for the Department of State’s procurement errors, Caddell had a substantial
chance at receiving the contract. In Phase I of the procurement process, all four
members of defendant’s Technical Evaluation Board found that plaintiff “Passed” the
pre-qualification requirements and should be allowed to move on to Phase II. Also,
defendant’s Legal Advisor, Dennis Gallagher, determined that plaintiff qualified for the
Percy Amendment price preference. After seven offerors made initial Phase II offers,
defendant’s Technical Evaluation Board found that plaintiff’s and Desbuild-REC’s
proposals were superior to the rest, stating:

       It is the consensus of the TEB that while Caddell’s technical proposal is
       rated slightly higher than Desbuild-REC JV’s technical proposal, the TEB
       feels that these two proposals are superior to the other technical
       proposals and stand in a category of their own. It is noted that these two
       firms are the only ones who are firmly established in Moscow and have
       ongoing construction projects similar in scope to the Moscow NOX.

       Plaintiff was one of the three firms, along with Desbuild-REC and FKE JV,
included in defendant’s competitive range. Defendant stated that each of those three
offerors “submitted acceptable technical proposals and competitive prices.” After
negotiations, the three firms in the competitive range submitted final offers, which were
evaluated by defendant’s Technical Evaluation Board. The Technical Evaluation board
came to a consensus opinion that Desbuild-REC’s and Caddell’s proposals earned a
rating of “excellent,” while FKE JV’s proposal was rated “satisfactory.” The Technical
Evaluation Board initially indicated that plaintiff and Desbuild-REC’s proposals were
close to equal, or even that plaintiff’s technical rating was slightly higher. Ultimately, the



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Technical Evaluation Board recommended Desbuild-REC for contract award based on
its lower price and highest technical rating, stating:

       The consensus report of the initial proposals indicated that Caddell’s
       proposal was rated ever so slightly higher than Desbuild-REC Int’l JV’s
       proposals. However, after holding discussions with the firms in the
       competitive range and evaluating the BAFO technical proposals, both
       firms are rated equally qualified from the technical standpoint. The TEB is
       confident that both Desbuild-REC Int’l JV and Caddell have the technical
       capability to successfully construct the NOX contract and any differences
       in their technical proposals are insignificant. After reviewing the BAFO
       prices, the TEB recommends that the Contracting Officer select Desbuild-
       REC Int’l JV for contract award because it offers the best value to the
       Government.

Defendant’s Office of Cost Management also recommended Desbuild-REC for contract
award based only on its lower price, stating that the Office of Cost Management
“believes that the proposal submitted by the lowest bidder, DESBUILD REC at
[redacted] represents the best value offer and therefore recommends acceptance.”

       Caddell and Desbuild stood apart from the rest of the other Phase II offerors, and
Desbuild-REC was selected because of its lower price. Desbuild-REC’s final price was
[redacted], Caddell’s final price was [redacted], and FKE JV’s final price was [redacted].
All three firms had been found eligible for the Percy Amendment price preference.
Stating that the Consensus Technical Rakings put Caddell and Desbuild-REC both at
number one, with FKE JV ranked number two, Mr. Krips’ Recommendation for Contract
Award concluded, although not entirely accurately, as follows:

       In this instance, the contractor that submitted the highest rated technical
       proposal 41 also submitted the most reasonable price. Therefore, it is
       recommended that a fixed price contract be awarded to Desbuild-REC JV
       in the amount of [redacted] (inclusive of VAT). Desbuild-REC Int’l JV’s
       proposal represents the best value to the U.S. Government.

        But for defendant’s actions and violation of procurement regulations, plaintiff’s
offer, which was next in line and close, both technically and for price, to Desbuild-REC’s
offer, would have been the lowest-priced, highest-rated offer. Because technical criteria
were to be given significantly more weight than price criteria, plaintiff’s offer likely would
have been selected over FKE JV’s offer, the other offeror in the competitive range,
which received a lower technical rating than both plaintiff and intervenor, and was
higher-priced. Based on these facts, plaintiff has established that it had a substantial
chance to receive the contract but for defendant’s actions throughout the procurement
41
  As noted, at one point in the evaluation process, Caddell actually was ranked slightly
higher than Desbuild-REC on the technical evaluation, and just several lines above on
the same page, Mr. Krips’ Recommendation for Contract Award stated that both Caddell
and Desbuild-REC were the highest-rated offer.

                                             83
process, as well as violation of procurement regulations.            Therefore, plaintiff can
establish prejudice.

Injunctive Relief

       Plaintiff seeks a permanent injunction of Desbuild-REC’s performance of the
contract for the Moscow project. In PGBA, LLC v. United States, the Federal Circuit set
out the test for a permanent injunction, stating that a court must consider:

           (1) whether, as it must, the plaintiff has succeeded on the merits of the
           case; (2) whether the plaintiff will suffer irreparable harm if the court
           withholds injunctive relief; (3) whether the balance of hardships to the
           respective parties favors the grant of injunctive relief; and (4) whether it
           is in the public interest to grant injunctive relief.

PGBA, LLC v. United States, 389 F.3d 1219, 1228–29 (Fed. Cir. 2004) (citing Amoco
Prod. Co. v. Vill. of Gambell, Alaska, 480 U.S. 531, 546 n.12 (1987); see also Nat’l Steel
Car, Ltd. v. Canadian Pacific Ry., Ltd., 357 F.3d 1319, 1325 (Fed. Cir.) (finding that a
plaintiff who cannot demonstrate actual success on the merits cannot prevail on its
motion for permanent injunctive relief), reh’g and reh’g en banc denied (Fed. Cir. 2004);
PHT Supply Corp. v. United States, 71 Fed. Cl. at 12; Int’l Res. Recovery, Inc. v. United
States, 64 Fed. Cl. 150, 159 (2005); Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243,
279, opinion modified, 63 Fed. Cl. 141 (2004); Bean Stuyvesant, L.L.C. v. United
States, 48 Fed. Cl. at 320–21 (citing Hawpe Constr., Inc. v. United States, 46 Fed. Cl.
571, 582 (2000), aff’d, 10 F. App’x 957 (Fed. Cir. 2001)); ATA Def. Indus., Inc. v. United
States, 38 Fed. Cl. 489, 505 n.10 (1997) (“The standard for a preliminary injunction is
essentially the same as for a permanent injunction with the exception that the plaintiff
must show a likelihood of success on the merits rather than actual success.” (quoting
Amoco Prod. Co. v. Village of Gambell, Alaska, 480 U.S. at 546 n.12)), abrogation
recognized in Balt. Gas & Elec. Co. v. United States, 290 F.3d 734 (4th Cir. 2002); CW
Gov’t Travel, Inc. v. United States, 12-708C, 2013 WL 1460458, at *23 (Fed. Cl. Mar.
27, 2013); Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. 334, 341
(2012) (citing Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009)
(citation omitted)). Success on the merits has been said to be “the most important
factor for a court to consider when deciding whether to issue injunctive relief.” Dellew
Corp. v. United States, 108 Fed. Cl. at 369 (citing Blue & Gold Fleet, L.P. v. United
States, 492 F.3d at 1312). However, while success on the merits is necessary, it is not
sufficient for plaintiff to establish that it is entitled to injunctive relief. See Contracting,
Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 353 (“Although plaintiff’s
entitlement to injunctive relief depends on its succeeding on the merits, it is not
determinative because the three equitable factors must be considered, as well.”) (citing
PGBA, LLC v. United States, 389 F.3d at 1228-29). The four factors are to be
considered collectively, rather than individually, such that,

       “[n]o one factor, taken individually, is necessarily dispositive.... [T]he
       weakness of the showing regarding one factor may be overborne by the


                                              84
       strength of the others.” FMC Corp. [v. United States], 3 F.3d [424] at 427
       [(Fed. Cir. 1993)]. Conversely, “the absence of an adequate showing with
       regard to any one factor may be sufficient” to deny injunctive relief. Id.

Sheridan Corp. v. United States, 94 Fed. Cl. 663, 668 (2010).

       In the above captioned protest, plaintiff has established success on the merits by
demonstrating that the Department of State’s award of the Moscow contract to
Desbuild-REC was arbitrary, capricious, and not in compliance with applicable
procurement regulations. Thus, the question is whether the other three equitable
factors weigh in favor of granting plaintiff’s requested permanent injunction.

        “When assessing irreparable injury, ‘[t]he relevant inquiry in weighing this factor
is whether plaintiff has an adequate remedy in the absence of an injunction.’” CW Gov’t
Travel, Inc. v. United States, 2013 WL 1460458, at *24 (quoting Overstreet Elec. Co. v.
United States, 47 Fed. Cl. 728, 743 (2000)). “The Court of Federal Claims has
repeatedly held that a protester suffers irreparable harm if it is deprived of the
opportunity to compete fairly for a contract.” CW Gov’t Travel, Inc. v. United States,
2013 WL 1460458, at *24 (citing CRAssociates, Inc. v. United States, 95 Fed. Cl. at
390–91; Serco, Inc. v. United States, 81 Fed. Cl. at 501–02; Impresa Construzioni
Geom. Domenico Garufi v. United States, 52 Fed. Cl. at 828.); see also BINL, Inc. v.
United States, 106 Fed. Cl. 26, 48 (2012) (“Irreparable harm is established by a lost
opportunity to fairly compete.”); HP Enter. Servs., LLC v. United States, 104 Fed. Cl.
230, 245 (2012) (citing several cases); Magnum Opus Tech., Inc. v. United States, 94
Fed. Cl. 512, 544 (2010) (“‘A lost opportunity to compete in a fair competitive bidding
process for a contract is sufficient to demonstrate irreparable harm.’”) (internal citations
omitted). Plaintiff argues that Caddell will be irreparably harmed if the court declines to
issue a permanent injunction because “Caddell has lost a valuable business
opportunity,” as well as the experience of performing this contract, which it could put
“toward its future proposals to perform additional Government work.” According to
plaintiff, “Caddell cannot recover these financial and experiential losses without a
permanent injunction.” Defendant argues that plaintiff’s alleged harm does not amount
to an irreparable harm because it is only economic in nature. Defendant cites Minor
Metals, Inc. v. United States, 38 Fed. Cl. 379, 381-82 (1997), for the proposition that
“economic harm, without more, does not seem to rise to the level of irreparable injury,”
and Sierra Military Health Services, Inc. v. United States, 58 Fed. Cl. 573, 582 (2003),
for the position that “‘[o]nly economic loss that threatens the survival of a movant’s
business constitutes irreparable harm.’”

       Although defendant is correct that some Judges of this court have held that
economic harm alone does not constitute irreparable injury, there is also an established
line of bid protest decisions holding that the loss of a valuable business opportunity
“deriving from a lost opportunity to compete in a fair competitive bidding process for a
contract,” can be sufficient to constitute irreparable harm. Overstreet Elec. Co. v.
United States, 47 Fed. Cl. at 744 (citing United Int’l Investigative Servs., Inc. v. United
States, 41 Fed. Cl. 312, 323 (1998) (“[T]he opportunity to compete for a contract and


                                            85
secure any resulting profits has been recognized to constitute significant harm.”));
Magnavox Elec. Sys. Co. v. United States, 26 Cl. Ct. 1373, 1379 (1992) (holding that it
is conceivable that plaintiff would be irreparably harmed by the lost opportunity to
compete for an award), called into doubt on other grounds by Motorala, Inc. v. United
States, 488 F.2d 113 (Fed. Cir. 1993); see also Impresa Construzioni Geom. Domenico
Garufi v. United States, 52 Fed. Cl. at 828.          A Judge of this court also recently
indicated, “[t]he court has repeatedly held that ‘the loss of potential profits’ from a
government contract constitutes irreparable harm.” BINL, Inc. v. United States, 106
Fed. Cl. at 49 (quoting Furniture by Thurston v. United States, 103 Fed. Cl. 505, 520
(2012) (citing BayFirst Solutions, LLC v. United States, 102 Fed. Cl. at 696)); see also
MORI Assocs., Inc. v. United States, 102 Fed. Cl. at 552–53. The reasoning behind this
line of cases is that, in an action at law, the disappointed bidder can only recover bid
protest costs, not lost profits, and that would not fully compensate the protestor. See
Serco Inc. v. United States, 81 Fed. Cl. at 501–02 (finding irreparable harm because the
only allowed monetary recovery—bid preparation costs—would not fully compensate
the plaintiff); Bean Dredging Corp. v. United States, 22 Cl. Ct. 519, 524 (1991) (noting
that the bidder would be irreparably harmed because it “could recover only bid
preparation costs, not lost profits, through an action at law”).

       Defendant argues that this line of cases is erroneous because it “creates a
presumption in favor of injunctive relief, which the Supreme Court held impermissible in
eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391-93 (2006).” The court finds no
merit in that argument. In eBay, Inc. v. MercExchange, L.L.C., the Supreme Court
addressed injunctive relief under the Patent Act. The United States Supreme Court
found that the Federal District Court below had “adopt[ed] certain expansive principles
suggesting that injunctive relief could not issue in a broad swath of cases.” Id. at 393.
In trying to correct the Federal District Court, the Court of Appeals essentially
abandoned the four-factor test for injunctive relief and “articulated a ‘general rule,’
unique to patent disputes, ‘that a permanent injunction will issue’” once two conditions
had been met. Id. The Supreme Court vacated the judgments below, stating: “We hold
only that the decision whether to grant or deny injunctive relief rests within the equitable
discretion of the district courts, and that such discretion must be exercised consistent
with traditional principles of equity, in patent disputes no less than in other cases
governed by such standards.” Id. at 394. The line of cases in this court that has
recognized that lost profits deriving from a lost opportunity to a fair competitive bidding
process can constitute irreparable harm does not violate the principle established in
eBay, Inc. v. MercExchange, L.L.C., namely that the question of whether to grant
equitable relief is in the discretion of the trial court and that “general rules” unique to one
category of cases are inappropriate. See id. at 393-94. Decisions in this court have not
indicated that lost profits necessarily constitute irreparable harm. Rather, individual
cases have recognized that, in some circumstances, the loss of a business opportunity,
coupled with an unfair procurement process, may result in irreparable harm to a plaintiff.
See, e.g., Overstreet Elec. Co. v. United States, 47 Fed. Cl. at 744.

      In the instant protest, not only would plaintiff stand to lose substantial profits on
the contract at issue, but as plaintiff points out, Caddell would lose the experience of


                                              86
working on a complex design and construction contract abroad, which would make
Caddell more competitive for similar contracts in the future. Because without an
injunction, plaintiff would suffer a substantial loss of profits resulting from a lost
opportunity to compete in a fair and competitive procurement process, as well as the
loss of valuable performance experience, the court finds that plaintiff would be
irreparably harmed if the court denied the plaintiff’s requested injunctive relief.

        With regard to the balance of hardships factor, plaintiff argues that the harm to
Caddell if injunctive relief were not granted would outweigh the harm to defendant if
Desbuild-REC’s performance of the Moscow contract were enjoined. Plaintiff asserts
that the only potential harm to defendant would be delay and a potential claim for
damages by Desbuild-REC under a stop work order. “With respect to the delay that the
government states is likely to occur, the Court of Federal Claims has observed that
‘“only in an exceptional case would [such delay] alone warrant a denial of injunctive
relief, or the courts would never grant injunctive relief in bid protests.”’” CW Gov’t
Travel, Inc. v. United States, 2013 WL 1460458, at *25 (quoting Reilly’s Wholesale
Produce v. United States, 73 Fed. Cl. 705, 715–16 (2006) (quoting Ellsworth Assocs.,
Inc. v. United States, 45 Fed. Cl. 388, 399 (1999), appeal dismissed, 6 F. App’x 867
(Fed. Cir 2001), appeal dismissed, 275 F. App’x 968 (Fed. Cir. 2008))). This potential
harm would be minimal, plaintiff argues, because Desbuild-REC has not begun
performance and, particularly, because any harm to the Department of State was of its
own making.

       Defendant argues that “permanently enjoining Desbuild-REC from performance
of the contract would unnecessarily intrude upon the contracting agency’s discretion”
and that, because “Caddell has failed to show that DOS acted unreasonably, arbitrarily,
or capriciously,” the balance of harms favors defendant. Plaintiff has, in fact,
established that the Department of State acted in violation of applicable procurement
regulations and engaged in arbitrary and capricious conduct during the procurement
process for the Moscow contract. The agency also, as demonstrated above, did not
record explanations of the actions taken. In fact, the agency conducted the entire
procurement in a lax and unacceptable fashion. Plaintiff was prejudiced by defendant’s
actions. The court, therefore, disagrees that granting injunctive relief under these
circumstances would “unnecessarily intrude upon the contracting agency’s discretion.”

       Plaintiff also cites to Sheridan Corp. v. United States, 94 Fed. Cl. 663, in which
the defendant argued that an injunction would harm the agency by: 1) delaying
performance, and 2) exposing defendant to liability for damages resulting from a stop-
work order. See id. at 670. The Sheridan court held that, because the agency had
taken an unnecessary corrective action, “these alleged harms are of the agency’s own
making,” and the balance of hardship factor weighed in favor of the plaintiff. Id.
Similarly, any harm caused to the Department of State by granting a permanent
injunction regarding Desbuild-REC’s performance of the Moscow contract is the result
of defendant’s conduct during the procurement. The balance of harm factor, therefore,
weighs in favor of granting injunctive relief.



                                           87
        As to the public interest factor: “‘[T]he public interest in honest, open, and fair
competition in the procurement process is compromised whenever an agency abuses
its discretion in evaluating a contractor’s bid.’” CW Gov’t Travel, Inc. v. United States,
2013 WL 1460458, at *25 (quoting PGBA, LLC v. United States, 57 Fed. Cl. at 663);
see also United Int’l Investigative Servs., Inc. v. United States, 41 Fed. Cl. at 323 (“[T]he
public has a strong interest in preserving the integrity of the procurement process.”))
(citing Parcel 49C Ltd. P’ship v. United States, 31 F.3d 1147, 1153 (Fed. Cir. 1994));
PCI/RCI v. United States, 36 Fed. Cl. 761, 776 (1996) ([T]he public interest in protecting
the integrity of the procurement system from irrational conduct is served by granting a
permanent injunction); see also Magellan Corp. v. United States, 27 Fed. Cl. 446, 448
(1993)); BINL, Inc. v. United States, 106 Fed. Cl. at 49 (“With regard to the public
interest, it is well-settled that there is a public interest in remedying violations of law.”).

       Plaintiff argues that the public’s interest in “ensuring that procurements are
conducted fairly in accordance with the letter and spirit of stated solicitation criteria,
laws, and regulations” would be advanced by granting injunctive relief because
defendant failed to act in accordance with such requirements in this case. Defendant
concedes that “the public interest is served by maintaining the integrity of the
procurement system,” but, also argues that, “[i]t is equally clear, however, that a
procuring agency should be able to conduct procurements without excessive judicial
infringement upon the agency’s discretion.” (citing Aero Corp. v. United States, 38 Fed.
Cl. 237, 242 (1997)). Plaintiff has established that defendant’s contract award violated
procurement regulations and involved arbitrary and capricious behavior. The public
interest in preserving the integrity of the procurement system, therefore, weighs in favor
of granting injunctive relief.

       Caddell’s ability to receive a fair evaluation by the agency was compromised by
the careless and inconsistent evaluation process. While not an exhaustive list, below
are some examples of the issues with the Department of State’s evaluation of proposals
and award of the Moscow contract. With respect to Desbuild’s [redacted] percent
partnership, the Business Plans submitted by the Joint Venture are inconclusive, but
defendant has not documented why it chose to simply accept intervenor’s assertions
without any discussion internally or further documentation. Defendant also failed to
mention that REC submitted three “relevant projects” under Subfactor 2A, Technical
Project Experience, when the Pre-qualification Notice clearly instructed joint venture
offerors to submit no more than two examples for each joint venture partner. It is,
therefore, unclear whether defendant improperly evaluated all three of REC’s project
examples in determining that the Desbuild-REC Joint Venture had enough combined
project experience to pre-qualify and move on to Phase II of the procurement.

        Furthermore, Mr. Krips’ Recommendation for Contract Award included a number
of internal inconsistencies. The Recommendation for Contract Award listed a different
number of firms that were pre-qualified for the contract than appeared on FedBizOpps,
with the recommendation indicating that five “U.S. Firms” and seven “non-U.S. Firms”
that submitted Phase I proposals were pre-qualified for the contract. The April 30, 2012
List of PreQualified Firms-Moscow Annex posted on FedBizOpps, however, indicated
that six “U.S. Firms” and nine “Non-U.S. Firms” were pre-qualified.                  The

                                              88
Recommendation for Contract Award also listed a different date for when the
Solicitation was issued to the pre-qualified firms, with the Recommendation reflecting
May 17, 2012, when in fact the Solicitation was issued to the firms on May 18, 2012.

       More significantly, the Recommendation for Contract Award is inconsistent in
describing the technical merit of plaintiff. Mr. Krips’ Recommendation for Contract
Award stated that going into the final round, “Caddell’s technical proposal receiv[ed] a
very slight higher rating,” than Desbuild-REC and after the Technical Evaluation Board
reviewed the final proposals, “Caddell and Desbuild were rated almost equal.”
Previously, the Competitive Range Determination determined that Caddell’s technical
proposal was rated slightly better than Desbuild-REC’s. Mr. Krips’ Recommendation for
Contract Award, however, concluded, “in this instance, the contractor that submitted the
highest rated technical proposal also submitted the most reasonable price,” even
though Caddell’s technical proposal was rated slightly higher, or at least equally with,
Desbuild-REC’s. Similarly, the Technical Evaluation Board acknowledged the plaintiff
and Desbuild-REC’s proposals were close to equal from a technical standpoint, and
stated: “However, after holding discussions with the firms in the competitive range and
evaluating the BAFO technical proposals, both firms are rated equally qualified from the
technical standpoint.”

       In addition to the many inconsistencies, the lack of documentation underscores
the incompleteness of defendant’s evaluation process. Defendant reversed its position
regarding Desbuild-REC’s pre-qualification status and its qualification for the Percy
Amendment price preference. In each instance, the reversal was prompted by a letter
from intervenor. Regarding Desbuild-REC’s pre-qualification status, Desbuild-REC sent
the agency a letter on April 9, 2012, which includes a series of fourteen questions
designed to understand how the Department of State made its determinations. Rather
than answer the series of involved questions, only four days after the intervenor’s letter,
Robert Powell, the Contracting Officer, replied to Desbuild-REC, stating: “Upon receipt
of your letter dated April 9th, our prequalification panel went through an extensive
reevaluation of the package that you have submitted. Following careful consideration,
the panel has determined that the Desbuild-REC JV is qualified to continue on to the
bidding process due to the cumulative experience of the JV members.” (emphasis in
original). This same letter from Mr. Powell also indicated the Desbuild-REC did not
qualify for the Percy Amendment price advantage. Mr. Powell, as noted repeatedly
above, never described the “extensive reevaluation” or “careful consideration” the
agency, allegedly, had engaged in, and there is no documentation in the record to
support any reevaluation or consideration by the agency. In response to Mr. Powell’s
April 13, 2012 letter, Desbuild-REC pushed back in an April 19, 2012 letter to the
agency, arguing that Desbuild-REC should qualify for the Percy Amendment price
advantage. As before, only four days after Desbuild-REC’s letter was sent, Mr. Powell
reversed the previous Percy Amendment decision. Mr. Powell’s April 23, 2012 letter
reversing the Percy Amendment decision stated in its entirety: “In discussions with
OBO’s legal advisor and under further review by the pre-qualification panel, we have
determined that your Desbuild-REC is qualified to receive the price advantage denoted
in the Percy Amendment.” (emphasis in original). Like the April 13, 2012 response, Mr.


                                            89
Powell, never described the “discussions” or “further review” the agency allegedly had
engaged in, and there is no documentation in the record to support any reevaluation or
reconsideration by the agency. Rather than demonstrating a deliberative and thorough
review, the record suggests that, in each instance when challenged, the Department of
State, for reasons of its own, simply relented and allowed Desbuild-REC to proceed.

       Finally, the Source Selection Authority offered no analysis or independent
judgment in concluding that Desbuild-REC presented the best value to the government,
despite the requirement of FAR 15.308. Instead, the only indications that the source
selection authority was involved in the decision to award the contract to Desbuild-REC
are Mr. Powell’s initials and the box checked “Approve,” on the same document as Mr.
Krips’ Recommendation for Contract Award. Indeed, no documents in the record exist
between the Recommendation for Contract Award and the signed contract awarded to
Desbuild-REC on September 26, 2012. Furthermore, no document exists explaining
why Desbuild-REC was selected for the contract award outside of the incomplete, and
at times, inaccurate Recommendation for Contract Award. The sum total of inaccurate
statements and incomplete reviews demonstrates a failure by the agency to properly
evaluate the award of the Moscow contract.

        Because plaintiff has demonstrated success on the merits of its bid protest claim
and all three other equitable factors weigh in plaintiff’s favor, a permanent injunction of
Desbuild-REC’s performance of the contract for the Moscow project is warranted.
Plaintiff, however, is not entitled to bid preparation and proposal costs at this time. In
post-award bid protests, injunctive and monetary relief are not necessarily mutually
exclusive because the language of 28 U.S.C. § 1491(b)(2) indicates that, “‘[t]he courts
may award any relief that the court considers proper, including declaratory and
injunctive relief except that any monetary relief shall be limited to bid preparation and
proposal costs’ . . . does not explicitly limit a protestor to either injunctive or monetary
relief.” See Klinge Corp. v. United States, 87 Fed. Cl. 473, 480 (2009) (citing CNA
Corp. v. United States, 83 Fed. Cl. 1 (2008) (quoting 28 U.S.C. § 1491(b)(2)), aff’d, 332
F. App’x 638 (Fed. Cir. 2009)); Red River Holdings, LLC v. United States, 87 Fed. Cl.
768, 792 (2009) (“Congress empowered the court with discretion to award equitable and
monetary relief . . . .”). The court recognizes, however, that “injunctive relief may often
be crafted to provide for the reevaluation of the submitted proposals,” which typically,
“eliminate[s] the basis for an award of bid preparation and proposals costs.” Beta
Analytics Int’l, Inc. v. United States, 75 Fed. Cl. 155, 159 (2007); see also Reema
Consulting Servs., Inc. v. United States, 107 Fed. Cl. 519, 532–33 (2012) (denying bid
preparation and proposal costs when a protestor could not show that the costs it had
incurred were “rendered unnecessary by the arbitrary, capricious, or otherwise
erroneous actions” committed by the agency because the protestor was “unable to
receive an award on its earlier proposal”). But see Ala. Aircraft Industries, Inc.–
Birmingham v. United States, 85 Fed. Cl. 558, 565 (“Here, without defendant’s errors,
Alabama Aircraft would have had to submit only one proposal. Due to those errors,
Alabama Aircraft is now required to pay for and submit another proposal in a continuing
effort to obtain an award of a contract . . . . An award of bid preparation and proposed
costs is fully appropriate to provide a complete remedy for Alabama Aircraft.”), rev’d on


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other grounds, 586 F.3d 1372 (Fed. Cir. 2009), reh’g and reh’g en banc denied (Fed.
Cir. 2010). In the circumstances presented by the above captioned case, the court
does not believe that an award of bid preparation and proposal costs is warranted at
this time.

                                   CONCLUSION

      For the foregoing reasons, Plaintiff’s motion for judgment on the Administrative
Record is GRANTED. Defendant’s and intervenor’s cross-motions for judgment on the
Administrative Record are DENIED. At this time, an award of bid preparation and
proposal costs is premature. The Clerk of Court shall enter a permanent injunction and
JUDGMENT consistent with this opinion.


      IT IS SO ORDERED.

                                                  s/Marian Blank Horn
                                                  MARIAN BLANK HORN
                                                           Judge




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