               United States Court of Federal Claims
                                          No. 16-1704 C
                                (Filed Under Seal: October 31, 2017)
                                  (Reissued: November 16, 2017)

____________________________________
DYNCORP INTERNATIONAL, LLC,
                                                                Motion for Judgment on Administrative
                         Plaintiff,                             Record, RCFC 56; United States
                                                                Department of State; Bureau for
                                                                International Narcotics and Law
v.                                                              Enforcement Affairs, Office of Aviation;
                                                                Aviation Support Services; Post-Award
UNITED STATES OF AMERICA,                                       Bid Protest; Disparate Treatment;
                                                                Procurement Violations; Limited
                                                                Confidence for Past Performance;
                         Defendant,                             Incumbent; Competition in Contracting
                                                                Act; Corrective Action; Profit Margin
and                                                             Analysis

AAR AIRLIFT GROUP, INC.,

                         Defendant-Intervenor.
_____________________________________

        David M. Nadler, Esquire, Blank Rome LLP (DC), for plaintiff.

      Douglas G. Edelschick, Esquire, United States Department of Justice, Civil Division,
Washington, DC, for defendant.

        Joel Singer, Esquire, Sidley Austin, LLP (DC), for defendant-intervenor.

                                      OPINION AND ORDER

Hodges, Senior Judge.

       DynCorp International, LLC filed its complaint in this court to enjoin and set-
aside the United States Department of State’s award of a $10 billion follow-on contract,
Solicitation No. SAQMMA14R0319, for global law enforcement and counter-narcotics
operations to AAR Airlift Group, Inc. Plaintiff DynCorp and intervenor AAR were the
only bidders in this procurement. Before the court are plaintiff’s motion for judgment on
the administrative record and a petition for injunctive relief; plaintiff’s amended motion
for judgment on the administrative record; defendant’s and intervenor’s cross-motions for
judgment on the administrative record are also pending.


 We issued this Opinion under seal on October 31, 2017, and invited counsel to propose redactions prior to its
publication. The parties have agreed on suggested redactions and so advised the court. The October 31 Opinion is
hereby reissued for publication, unsealed, with minor alterations to account for the redactions.
      DynCorp’s incumbent contract has been extended twice, currently to October 31,
2017. For the reasons discussed below, we must deny plaintiff’s motion for judgment on
the administrative record, deny plaintiff’s amended motion for judgment on the
administrative record, and grant the cross-motions filed by defendant and intervenor.

                             PROCEDURAL HISTORY

       Plaintiff filed its post-award bid protest Complaint and a motion for a preliminary
injunction in December 2016. Because defendant had previously agreed to a limited stay
on performance of the contract awarded to intervenor until October 31, 2017, this court
denied that motion as moot. In early January 2017, pursuant to defendant’s first motion
for voluntary remand, the court remanded this case to the Department of State for thirty
days to allow the Contracting Officer to reconsider certain matters under the Procurement
Integrity Act (PIA) in light of a newly available memorandum from the Office of the
Inspector General. On February 22, defendant filed the Contracting Officer’s Remand
Decision finding that no PIA violation had occurred.

        Plaintiff filed a motion for judgment on the administrative record on April 17. In
light of arguments plaintiff raised in this motion, defendant filed a second motion for
remand on May 1, requesting thirty days to allow the Department of State to reconsider
its price reasonableness analysis. The court granted this motion. Defendant filed its
remand record in June and the parties agreed that more litigation would be necessary to
resolve the case; plaintiff would file an amended motion for judgment.

       Plaintiff filed an amended motion for judgment on the administrative record on
July 7. Three weeks later, defendant and intervenor filed cross-motions for judgment on
the administrative record. We held oral argument on October 6, 2017 in Washington, DC.

                              STANDARD OF REVIEW

        When considering cross-motions for judgment on the administrative record, the
court “asks whether, given all the disputed and undisputed facts, a party has met its
burden of proof based on the evidence in the record.” Court of Federal Claims Rule
52.1(c). See Pmtech, Inc. v. United States, 95 Fed. Cl. 330, 340 (2010) (citing Bannum,
Inc. v. United States, 404 F.3d 1346, 1356–57 (Fed. Cir. 2005)).

       The standards for challenging an agency’s procurement decision are taken from
the Administrative Procedure Act at 5 U.S.C. 706(2)(A): “[T]o successfully challenge an
agency’s procurement decision, a plaintiff must show that the agency’s decision was
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”
See IBM Corp. v. United States, 119 Fed. Cl. 145 (2014).



                                            -2-
       An agency decision would be arbitrary or capricious if the agency relied on factors
that Congress did not intend for it to consider, 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 to agency expertise. Motor Vehicle Mfr. Ass'n of U.S., Inc. v. State Farm Mutual Auto.
Ins. Co., 463 U.S. 29, 43 (1983).

       Plaintiff’s heavy burden is to demonstrate that the contract award had no rational
basis. Ft. Carson Support Servs. v. United States, 71 Fed. Cl. 571, 586 (2006). This court
then determines whether the contracting agency provided a coherent and reasonable
explanation of its exercise of discretion. IBM Corp., 119 Fed. Cl. at 154 (quoting Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 at 1332–33 (Fed.
Cir. 2001)).

       Plaintiff’s burden is exacerbated by the fact that this is a best value procurement.
Determining which offer affords the best value to the Government necessarily calls for
even broader agency discretion, especially when the contracting officer has provided
supporting rationale for his decision. Such an award involves consideration of multiple
factors to determine best value, and not cost alone. Tiber Creek Consulting, Inc. v. United
States, 129 Fed. Cl. 409, 415 (2016) (citing Galen Med. Assocs., Inc. v. United States,
369 F.3d 1324, 1330 (Fed. Cir. 2004)).

       This court reviews the contracting officer’s decision to determine whether it has a
rational basis. We do not reweigh the evidence, but grant to the CO wide deference
unless plaintiff can demonstrate that the decision lacked a rational basis.

                         BACKGROUND & ARGUMENTS

I. Worldwide Aviation Support Services (WASS) Program

       Plaintiff Dyncorp is the incumbent on the contract preceding the new Solicitation
No. SAQMMA14R0319 at issue in this case. The new Solicitation calls for a single-
award indefinite-delivery, indefinite-quantity contract with a maximum value of $10
billion over eleven years. Both contracts call for the contractors to provide flight
operations, maintenance, and logistical support for the Worldwide Aviation Support
Services (WASS) Program. The Program supports global law enforcement and counter-
narcotic operations by the United States Department of State, Bureau for International
Narcotics and Law Enforcement Affairs, Office of Aviation.

       The Department of State divided WASS into three contracts: Aviation Support
Services, IT Services, and Program Support Services. The contract award at issue in this
Protest is for one of these three contracts, the Aviation Support Services contract. Awards
have already been made for the other two contracts.

                                            -3-
       Plaintiff asserts that the Department of State restructured the WASS program in its
new Solicitation. Under the predecessor WASS contract, DynCorp and its subcontractors
performed all contract functions. Conversely, the Aviation Services Contractor’s
Solicitation requires the contractor to execute Associate Contractor Agreements with the
other two associate contractors to allow coordination and information-sharing among the
contractors.

        A. Management Information Systems (MIS)

       The Solicitation provided that the Department of State would conduct its
evaluation using seven enumerated Factors and corresponding Sub-Factors, listed in
descending order of importance.1 Solicitation § M.12. The most heavily-weighted Factor
is Management & Administration. The Contracting Officer’s evaluation of the bidders’
proposals for Sub-Factor B, Management Information System (MIS), is central to this
case. In particular, an issue causing much confusion was whether the Aviation Services
Contractor or the IT Associate Contractor would have responsibility for a newly
implemented MIS after transition from the old MIS was complete.

        B. Department of State’s First Evaluative Decision

        Plaintiff alleges that defendant misled plaintiff to take a certain approach that was
later the basis for defendant’s disqualification of plaintiff’s proposal. Plaintiff relied upon
certain language in creating its final proposal to deliver responsibility for the MIS to the
IT Associate Contractor.

      In the first round of proposal evaluations, DynCorp received ratings of
“Unacceptable” under each of the four Technical Factors, as well as their corresponding
Sub-Factors, and received a rating of Limited Confidence for Past Performance.
DynCorp’s price was deemed “not awardable.” With the exclusion of DynCorp from the
competitive range, AAR became the presumptive awardee.

       DynCorp filed a Protest at the Government Accountability Office in February
2015 and a Supplemental Protest on March 16, alleging additional errors in the State
Department’s technical, past performance, and price evaluations of both offerors. On
March 18, the Department of State notified GAO of its intent to take corrective action in
response to the Protests and advised that the scope of its corrective action would include
“reconsideration of each Offeror’s initial proposal (excluding AAR proposal revisions or
responses to ENs) to include the approach to staffing, re-consideration and validation of
assigned strengths, weaknesses and deficiencies, and re-consideration of past
performance.” Complaint ¶ 31.

1
 The seven Factors are: (1) Management & Administration; (2) Operations; (3) Maintenance; (4) Logistics; (5)
Small Business Plan; (6) Past Performance; and (7) Price. Factors 1-4 are considered Technical Factors.

                                                   -4-
       After the Department of State took corrective action in response to DynCorp’s
GAO Protest, it reinstated DynCorp into the competitive range and conducted discussions
with DynCorp. Complaint ¶ 42. During those discussions, DynCorp responded to a total
of 158 discussion questions. Id. DynCorp submitted its first proposal revision on
November 16, 2015, following the first tranche of sixty discussion questions. Id.
DynCorp then submitted another proposal revision responding to the remaining ninety-
eight discussion questions on March 7, 2016. Id. DynCorp submitted its Final Proposal
Revision on May 4, 2016. Id.

         C. Department of State’s Second Evaluative Decision

       Plaintiff asserts that defendant’s discussion questions in the second round of
evaluations following issuance of Amendment 5 were misleading. The court finds that
defendant’s communications with both offerors were not misleading because the
contracting officer sufficiently identified proposal weaknesses in these discussions.

        In May 2016, the Department of State empaneled a four-member technical
evaluation team (TET) of industry experts to document its consensus findings regarding
plaintiff’s and intervenor’s proposals. Tab 9, AR 6649–6705; Tab 17, AR 10031–75. The
TET rated DynCorp’s proposal “unacceptable” overall because it received a deficiency
relating for proposing that “the Associate IT Contractor will establish and maintain the
test environment for the Offeror’s new MIS.” Complaint ¶ 43; Tab 9, AR 6667. With
respect to Factor 1, Management and Administration, the TET assigned one deficiency,
three significant weaknesses, and eight weaknesses to DynCorp’s solution for Sub-Factor
1-B.2 DynCorp received the following ratings for the four technical Factors: 1
(Unacceptable); 2 (Superior); 3 (Marginal); 4 (Acceptable). Id. AAR received an Overall
Proposal Rating of “Superior” and the following ratings for the four technical Factors: 1
(Superior); 2 (Superior); 3 (Acceptable); 4 (Superior). Complaint ¶ 45. DynCorp’s final
evaluated price was approximately $100 million lower than AAR’s bid. Complaint ¶ 47.

       Because the Department of State rated DynCorp as Unacceptable for Factor 1, it
deemed DynCorp “ineligible for award” and did not conduct a cost-technical tradeoff.
Complaint ¶ 48. DynCorp asserts that the Department of State’s sole basis for its
Unacceptable rating under Factor 1 was the Contracting Officer’s determination to assign
a deficiency and three significant weaknesses for DynCorp’s Management Information
System (“MIS”) solution under Sub-Factor 1-B. Id.


2
  “Evaluators considered a deficiency to be a material failure of a proposal to meet a Government requirement or a
combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to
an unacceptable level.” Tab 9, AR 6650 (emphasis in original); Tab 17, AR 10032 (emphasis in original). “A
significant weakness in the proposal was defined as a flaw that appreciably increases the risk of unsuccessful
contract performance.” Id. (same). “Further, weakness was defined as a flaw in the proposal that increases the risk of
unsuccessful contract performance.” Id. (same).
                                                        -5-
II. Plaintiff’s Claims

       Plaintiff presents four arguments for the court to consider in our evaluation of
defendant’s award decision. Plaintiff claims that defendant’s award decision lacked a
rational basis because (1) defendant’s evaluations of the plaintiff’s and intervenor’s
proposed MIS solutions were arbitrary and capricious; (2) defendant’s decision not to
disqualify intervenor for its staffing proposal was arbitrary and capricious; (3)
defendant’s price evaluation was arbitrary and capricious; and (4) defendant’s
determination on remand not to disqualify intervenor for "soliciting, obtaining, and
using" plaintiff’s proprietary information was arbitrary and capricious.

III. Additional Protests

       In September 2016, DynCorp filed a GAO protest challenging the contract award
to AAR because the Solicitation “did not impose post-transition operational and
maintenance responsibilities on the WASS contractor.” GAO issued a decision denying
the protest in December. The GAO held that the agency’s “evaluations were reasonable,
consistent with the solicitation, and did not reflect unequal treatment.” Later in December
2016, DynCorp filed the Complaint now at issue challenging the contract award on
additional bases. These protests include defendant’s evaluation of intervenor’s staffing
proposal, defendant’s price reasonableness determination, and alleged violations of the
Procurement Integrity Act (PIA).

                                        RULING
        Plaintiff asserts that instances of inconsistent communications and disparate
treatment during procurement resulted in an arbitrary and capricious award decision.
Defendant objects and argues that the agency supplied a coherent and reasonable
explanation for the outcome in accordance with the APA standard of review. Although
the lack of clarity in the overall bidding process is troubling, the contracting officer
satisfied the relevant standard. Further, the contracting officer maintains the ability to
select the contract awardee. Therefore, after a thorough review of the administrative
record, we find that this issue favors defendant.

       In addition, we have determined that intervenor’s staffing proposal evaluation did
not violate agency instructions prohibiting cross-referencing staffing plans in its
discussion responses and otherwise was rational; its price reasonableness analysis was
rational; and the CO’s evaluation of the Integrity Act allegations was reasonably based on
the Administrative Record as a whole and his decision in that regard was rational. Given
the judicial standards to be applied in reviewing decisions of a contracting officer, the
agency award decision was entirely reasonable and rational.

      This case highlights the importance of presumptions that court decisions have
provided in favor of government employees who serve as contracting officers. The
                                           -6-
deference to which the CO is entitled is similar to the Business Judgment Rule as it is
often applied in other areas of the law. We cannot say that such deference is inappropriate
given the many billions of dollars that contracting officers manage in the form of
contracts for goods and services purchased by the United States.

       This case included legal arguments that could not be reconciled with each other or
with the Record. The court had the benefit of excellent answers to a series of questions
that we propounded to the parties for clarification, then helpful oral arguments last
month. The lack of coherent and consistent explanations in some instances has resulted in
uncertainties that remain.

       In such circumstances, we must emphasize again the very high burdens of proof
assigned to any protester in this court. One who would overturn a contracting officer’s
ruling that a particular bidder has made the “best value” offer to the Government must
show that the CO had been “irrational or [made] critical miscalculations.” OMV Med.,
Inc. v. United States, 219 F.3d 1337, 1344 (Fed. Cir. 2000). The Administrative
Procedure Act states that a court must not “overturn the challenged decision unless it (1)
lacked a rational basis; or (2) involved a violation of regulation or procedure.” 5 U.S.C. §
706 (2006); 28 U.S.C. § 1491(b)(4); Impresa Construzioni Geom. Domenico Garufi v.
United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). “The reviewing court shall . . . hold
unlawful and set aside agency action, findings, and conclusions found to be -- arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §
706 (2006).

       The Court of Appeals for the Federal Circuit added the following explanatory text
from a line of cases in the DC Circuit Court of Appeals:

       [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.” A court evaluating a challenge on
       the first ground must determine “whether the contracting agency provided a
       coherent and reasonable explanation of its exercise of discretion. When a
       challenge is brought on the second ground, the disappointed bidder must
       show a clear and prejudicial violation of applicable statutes or regulations.


Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009).

        These statutes and court decisions provide examples of the standards that support
decisions of procurement officials upon review by courts. A description of several court
rulings on a central issue in this case dramatizes the context in which such cases are
decided. A key issue in this case, one that first appeared to be a controlling issue for
plaintiff here, is its allegations that intervenor benefited from contacts between a former
employee of the incumbent contractor, DynCorp, and high-level management officers of
                                            -7-
the intervenor. We have no doubt that the employee transmitted information to intervenor
that could have helped it win the contract. However, the contracting officer found no
evidence of record that the intervenor used the information in connection with its bid.
The former employee of DynCorp, recently hired by intervenor AAR, felt comfortable
transmitting this intelligence directly to senior officers for use by AAR, the intervenor.
The insider also made an overture to the East Company, a recent subcontractor of
DynCorp. The CO apparently found that effort too was on Ms. Hamilton’s own initiative
and AAR obtained no benefit from the contact.

       Defendant and intervenor accuse plaintiff of misstating the standard of review for
the Agency/Contracting Officer’s decision on the procurement integrity review issue:
“Ignoring this deferential standard and the broad discretion vested in the CO, DynCorp
incorrectly claims that, if there are ‘hard facts’ showing ‘an appearance of impropriety,’
the CO must disqualify AAR, and this Court must reverse the CO if he does not.”

       The plaintiff’s claim is not incorrect. It is the standard set out by the Federal
Circuit for disqualifying a bidder. However, in the two cases it does cite, the Court did
not overturn an agency’s discretionary decision but, rather, upheld the agency’s decision.
Compliance Corp., 22 Cl. Ct. 193 (1990); and NKF Eng’g Inc., 805 F.2d 373 (Fed. Cir.
1986).3

      We include the contracting officer’s ruling on the alleged violations of
Procurement Integrity Act this point in extenso, as follows:

        I have also considered whether AAR’s conduct gave rise to an appearance
        of a PIA violation such that even though a PIA violation did not occur,
        AAR should be excluded because [sic] the appearance of a PIA violation.
        In this instance, I find that there is no such appearance and there is no basis
        to exclude AAR. See, e.g., Compliance Corp. v. United States, 22 Cl. Ct.
        193, 200 (1990) (“When it appears that a bidder may have prepared its bid
        proposal with knowledge of its competitor’s bid, such an appearance taints
        the integrity of the procurement process, regardless of whether any
        proprietary information was actually obtained or used.”); NKF Eng’g, Inc.
        v. United States, 805 F.2d at 3778. There is no evidence that it appears that
        AAR may have prepared its bid proposal with knowledge of DI’s bid and
        proposal information . . .
3
 In Compliance and NKF, however, the courts agreed with contracting officers who found “hard facts [showing] an
appearance of impropriety.” The CO decisions upheld by the courts were to disqualify bidders that created an
appearance of impropriety.




                                                     -8-
       I find no similarities between DynCorp’s and AAR’s narratives for the
       basis of estimate of the proposed unloaded hourly labor rates. An inspection
       of individual rates listed, by category in the base year shows where
       significant differences (greater than 50%) exist. As already stated above,
       the comparison of each offeror’s indirect rates and fee and profit rates also
       demonstrate these rates are very diverse. It is important to note that AAR’s
       profit and fee rates remained constant at [REDACTED] for both of its two
       price proposal submissions. DynCorp’s fee and profit rates remained the
       same with each submittal ([REDACTED]). In fact, it appears more
       questionable that DynCorp inexplicably reduced its final price proposal
       submission price by over $300M and [REDACTED] with nominal change
       to its final technical proposal submission to come in ~ $100M lower than
       AAR’s bid which remained consistent with its first proposal revision
       submission.

Docket No. 39, #1.

       Senator Dole was the floor manager of this court’s jurisdictional statute when it
passed in 1981. 28 U.S.C. § 1491(a)(3). In explaining the jurisdiction of the Claims Court
to grant injunctive and declaratory relief, he stated that “the Government must be
permitted to exercise its right to conduct business with those suppliers it selects and to do
so in an expeditious manner.” Cong. Rec. S14694 (daily ed. December 8, 1981).
Similarly, the House Committee Report on the bill stated that it “expects that the Court
will utilize the authority conferred upon it by this section only in truly extraordinary
circumstances . . . .” H.R.Rep. No. 312, 97th Cong., 1st Sess. 44 (1981). Since then,
courts generally have avoided becoming involved unduly in the procurement process, by
enjoining the Government from awarding a contract to its chosen offeror. As this court
stated in Grimberg Co., “injunctive relief [is] awardable ... only in extremely limited
circumstances.” U.S. v. John C. Grimberg Co., Inc., 702 F.2d 1362, 1372 (Fed. Cir.
1983).

                                     CONCLUSION
       This procurement was not a model of efficiency or of appropriate government
acquisition policy. We found it difficult to review some parts of the Record and
especially to reconcile what we could learn of the important facts with some of the
parties’ arguments. We found that some of plaintiff’s criticisms were well supported by
the Record and by common sense. The case would have been much more difficult to
resolve without the very high, broad standards of review and presumptions that apply to
judicial review of contracting officers’ decisions.

      Given those standards, the case could be boiled down to these findings: The
government agency’s decision not to disqualify AAR has a rational basis in the entire
                                            -9-
record; and the CO found no competitive advantage gained by AAR through the efforts
of Ms. Hamilton to subvert the procurement process. Either finding is dispositive of
plaintiff’s case. A third determination establishes a significant weakness in plaintiff’s
case: DynCorp’s revised proposal did not address Federal IT requirements and did not
address important data migration and capture issues. See e.g., Docket 83, pages 10-11,
Defendant’s Motion for Judgment on the Administrative Record. This provides an
additional reason to support the contracting officer’s determination that DynCorp’s
proposal was deficient compared to that of AAR.

       Few reviewing courts would be comfortable in all respects with the manner in
which this procurement was conducted. However, the court’s duty is to review actions of
the Agency, and more particularly the contracting officer, for overall compliance with
statutory standards and case law interpreting those standards.

       This court’s primary concern at the outset was the apparent violation of laws and
regulations that attempt to insure that government procurements are conducted fairly. In
that regard, a former employee of plaintiff DynCorp’s apparently initiated a contact with
intervenor AAR in an effort to transmit sensitive inside information relating to an
element of AAR’s bid. For whatever reason, the former employee, Ms. Hamilton, felt
comfortable contacting the top corporate officers of the intervenor in this case, including
its Chief Executive Officer. The information remained with management for two weeks
before AAR’s General Counsel notified the contracting officer of the breach.

        One issue arising from this incident is whether such facts might warrant a finding
of “the appearance of impropriety.” Certainly, most observers without the benefit of case
law interpreting the meaning of that phrase, “appearance of impropriety,” would think
that the facts described could meet the definition. Not knowing that such a finding must
be supported by “hard facts,” most would want to learn more about the incident. The
need for “hard facts” would not seem to fit well with “appearance of impropriety,” as the
latter term suggests a lower standard of proof than “hard facts.”

       As noted earlier in this Opinion, however, we can assume that sound policy or
legal reasons pertain not only to this standard but also to the high level of discretion
accorded contracting officers in carrying out their procurement duties.

        In any event, we reviewed the Record carefully to insure that the intervenor meets
requirements of procurement law sufficient to qualify it to be the winning contractor; that
the contracting officer met his responsibilities to act fairly and impartially as a quasi-
judicial government official; and that plaintiff DynCorp fell short of meeting its
responsibilities as described in Federal Acquisition Regulations and other procurement
laws and regulations, and required by the State Department’s Statement of Work and
Invitation to Bid and other relevant contract documents.


                                           - 10 -
        We are satisfied that these detailed reviews have brought the court to the proper
resolution of this case. To that end, we must GRANT defendant’s motion and
intervenor’s separate motion for judgment on the Administrative Record and DENY
plaintiff’s motion for judgment on the Administrative Record, and plaintiff’s amended
motion for judgment on the Administrative Record. The Clerk of Court will dismiss
plaintiff’s Complaint. No costs.

      IT IS SO ORDERED.

                                          Robert H. Hodges, Jr.
                                         s/
                                         Robert H. Hodges, Jr.
                                         Senior Judge




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