      In the United States Court of Federal Claims
                                No. 18-326C
                          (Filed: August 3, 2018)
                        (Re-filed: August 21, 2018)1

**************************
ADVANCED MANAGEMENT STRATEGIES
GROUP, INC./REEFPOINT GROUP, LLC,

                     Plaintiff,

v.                                              Post-award bid protest;
                                                Standing; Zone of active
THE UNITED STATES,                              consideration; SDVOSB;
                                                Affiliation.
                     Defendant,

and

ENTERPRISE RESOURCE PERFORMANCE, INC.,

           Intervenor.
**************************

       Craig A. Holman, Washington, DC, with whom were Nathaniel E.
Castellano and Alexandra L. Barbee-Garret, for plaintiff. Carrol H. Kinsey,
Jr., Alexandria, VA, of counsel.

       Sonia M. Orfield, Trial Attorney, United States Department of Justice,
Civil Division, Commercial Litigation Branch, Washington, DC, with whom
were Chad A. Readler, Acting Assistant Attorney General, Robert E.
Kirschman, Jr., Director, and Reginald T. Blades, Jr., Assistant Director, for

1
  This opinion was originally issued under seal to afford the parties an
opportunity to propose redaction of protected information. The parties were
unable to agree. Plaintiff offered no redactions. In an abundance of caution,
we have adopted intervenor’s proposed redaction of the names of its sub-
contractors and teaming partners because that information is potentially
competition sensitive to an ongoing procurement. We have also adopted
defendant’s proposed redactions.
defendant. Karen Hunter, Trial Attorney, U.S. Small Business Administration,
Office of General Counsel, of counsel.

       Julia Di Vito, Washington, DC, with whom were Antonio R. Franco,
Peter B. Ford, and Timothy F. Valley, for intervenor.

                                 OPINION

BRUGGINK, Judge.

       This is a post-award bid protest brought by Advanced Management
Strategies Group, Inc./Reefpoint Group, LLP (“AMSG”). Defendant is the
United States acting through the Department of Veterans Affairs (“VA”). The
awardee, Electronic Resource Performance, Inc. (“ERPi”), intervened.
AMSG’s complaint asks the court to enjoin the VA from awarding to ERPi.
The parties filed cross-motions for judgments on the Administrative Record
(“AR”). Oral argument was held on July 12, 2018. The court held a status
conference on July 20, 2018, during which we announced that we would
sustain the protest and enjoin the award to ERPi. We entered an injunction
that same day. Because the VA was arbitrary in crediting ERPi with the
Commercial Healthcare Experience of what could be, at best, only a very
minor subcontractor, the award must be set aside and the evaluation redone.2

                            BACKGROUND

       On September 28, 2017, the VA Strategic Acquisition Center issued
Request for Quotations No. VA119A-17-Q-0413 (“RFQ” or “solicitation”).
It sought commercial healthcare consulting services to help transform the VA
health system into a more modern and veteran-centric healthcare system
pursuant to the Veterans Access, Choice, and Accountability Act of 2014, Pub.
L. No. 113-146, 128 Stat. 1754 (2014). The VA set aside the contract for
Service Disabled Veteran Owned Small Businesses (“SDVOSB”) under


2
 This opinion deals only with the issues necessary to reach our conclusion:
ERPi’s eligibility for award as a small business, VA’s evaluation of ERPi’s
Corporate Healthcare Experience, and plaintiff’s standing to bring these
challenges. The other arguments raised by plaintiff’s motion were dealt with
on the record during the status conference held on July 20, 2018. It is
unnecessary to consider those arguments again in print.

                                     2
NAICS Code 541611, which has a size standard of $15,000,000.3 AR 178.
The VA sought these services from holders of the General Services
Administration (“GSA”) Federal Supply Schedule (“FSS”) SIN 874-1
contracts for integrated consulting services. AR 239. The solicitation
promised award of a Blanket Purchase Agreement (“BPA”) to a single offeror
pursuant to Federal Acquisition Regulation (“FAR”) part 8.405-3, and that the
agency would issue its first order along with the BPA. AR 247. The agency
intended to do so without holding discussions with offerors, but reserved for
itself the right to ask for a price discount from the apparent awardee as allowed
in FAR part 8.405-4. Id. The solicitation was specific that the procurement
was not subject to FAR part 15,which deals with negotiated procurement.

I. The Solicitation

       The VA intended to award the BPA on the basis of a best value trade-
off process, which would consider three non-price factors and the offerors’
prices. The non-price factors are 1) Technical, consisting of three subfactors
(Technical Approach, Staffing/Management Plan, and Key Personnel
Resumes); 2) Commercial Healthcare Experience; and 3) Past Performance.
Id. The technical and commercial healthcare factors were considered of equal
importance, and together these two factors “[were] significantly more
important than the Past Performance Factor. All non-Price Factors, when
combined, [were] significantly more important than Price.” AR 248.

       Under the Technical Factor evaluation, for the Technical Approach
subfactor, the agency sought to ascertain from offerors’ proposals their
understanding of the problem embraced by the work, the feasibility of
offeror’s proposed solutions, including “the level or effort and mix of labor
proposed to perform the tasks identified in the first BPA order,” and whether
the offers “have adequately and completely considered, defined, and satisfied


3
  “NAICS” is an acronym for the North American Industry Classification
System. Industries and commercial activities are assigned codes by the by the
Office of Management and Budget. Contracting Officers select the
appropriate code for a procurement that is set aside for small businesses. The
Small Business Administration assigns dollar values to each code, which then
becomes the size limits for the purpose of whether companies are considered
to be small for any particular federal procurement. See generally InGenesis,
Inc. v. United States, 104 Fed. Cl. 43, 45 (2012).

                                       3
the requirements specified in the solicitation.” AR 249. For the Key
Personnel and Staffing Plan subfactors, the agency considered whether
offerors would have adequate key personnel and other staff available to
perform the work within the requested period of time.

        With the second factor, Commercial Healthcare Experience, the VA
aimed at plumbing the depths of offerors’ and any subcontractor’s specific
experience with commercial healthcare projects based on “previous
demonstrated recent and/or relevant experience. The breadth and depth of the
experience, criticality of any experience gaps identified, relevance to the
solicitation, and the quoter’s approach” were all considered by the agency
under this factor. Id. The solicitation stated that a lack of such experience
would be a negative while demonstrated “experience in both commercial
healthcare and government healthcare with transformed organizations similar
in size and complexity to VA will be rated more favorably.” AR 249-50. In
the questions and answers, added by amendment to the RFQ, the VA clarified
that offerors could submit their own experience and the experience of any
proposed subcontractor, no matter the size. See AR 155. The solicitation later
stated that, for this factor, an offeror was considered to be the prime contractor
and “all proposed subcontractors, major or otherwise.” AR 249. A major
subcontractor was separately defined in the RFQ under the Past Performance
factor.

        The Past Performance Factor was concerned more broadly with the risk
associated with offerors’ proposals as measured by the “historical quality of
a firm’s performance” because the agency viewed offerors’ past performance
history as having “predictive value when it comes to assessing the risk of
doing business with the firm.” AR 250. Offerors were evaluated on the basis
of their own past performance and that of any major subcontractors, defined
as “one whose subcontract is for more than 20% of the total proposed price.”
Id. Prime contractors and major subcontractors were assessed individually
“and the results [were] then assessed in their totality to derive the quoter’s Past
Performance rating.” Id. The VA considered the “quality, relevancy (size and
scope, and complexity) and recency (within last 3 years)” of these companies’
past performance. Id. Offerors without such experience were given a neutral
rating.

       Offerors’ prices were evaluated for the fairness and reasonableness of
their labor rates and the total price for the first order against the BPA,
including “the level of effort and mix of labor proposed to perform the specific

                                        4
tasks being ordered.” AR 251. Offerors were warned that unreasonable prices
would be rejected, resulting in disqualification for award. AR 247.

II. Evaluation And Award

       The agency received six proposals in response to the RFQ by the
November 6, 2017 deadline. All six were determined to be eligible as
SDVOSBs. Three proposals are relevant to this protest: plaintiff’s,
intervenor’s, and that from a third-party, [                         ]. The
agency began evaluations on November 13, 2017. The technical evaluators
performed individual and consensus evaluations of each proposal received. A
separate team evaluated offerors’ prices. For the non-price factors, the
technical team assessed strengths and weakness, confidence ratings, any
deficiencies found, and assigned adjectival ratings. The consensus results
were as follows for the three relevant offerors:

 Factor             ERPi                   [      ]          AMSG
 Technical          Excellent              Good              Satisfactory
 Approach
 Commercial         Substantial            Substantial       Satisfactory
 Healthcare         Confidence             Confidence        Confidence
 Experience
 Past               Moderate risk          Moderate Risk     Moderate Risk
 Performance
 Total Price        $3,925,388.48          $5,046,135.36     $5,215,473.59
 Price          Fair and                   Fair and          Fair and
 Reasonableness Reasonable                 Reasonable        Reasonable

See AR 1474.

        The contracting officer (“CO”) did not change these ratings, and he
relied on them in making his best value determination. On January 22, 2018,
the CO requested a price reduction from ERPi prior to award, representing to
intervenor that it was among the highest rated quotes, but not revealing that it
was going to be the awardee. ERPi responded the next day with minor
discounts.


                                       5
        The CO finalized the best value determination on January 30, 2018, the
same day that the technical evaluation team finalized its report. The best value
determination document included a best value trade-off analysis between ERPi
and [     ], AR 1477-79, and a separate trade-off between ERPi and plaintiff,
AR 1475-77. The CO found ERPi to represent the best value to the
government because it represented both the highest rated and the lowest priced
offer. AR 1479. The document also touts the experience of ERPi and its team
as providing exemplary Commercial Healthcare Experience. See AR 1475,
1477-78. The CO added an addendum to reflect ERPi’s discounted final
prices. The best value determination was signed on January 31, 2018. The
final consensus technical evaluation was signed by some of the evaluators on
February 1 and by others on February 2, 2018, but a notation appears next to
those signatures indicating that the report was finalized on January 30, 2018.
AR 1234, 1254, 1276, 1297, 1316, 1336. The best value determination
indicated that performance would commence on February 1, 2018.

      The VA notified offerors of the results on February 1, 2018.
Debriefings were requested by the unsuccessful offerors, and those were
conducted on February 6, 2018.

III. Procedural History

      Plaintiff submitted a small business size protest against ERPi on
February 6, 2018. The CO referred the challenge to the Small Business
Administration (“SBA”) the next day, and issued a stop work order on
February 8, 2018, pending resolution of the size protest.

        On February 12, 2018, the regional SBA office dismissed plaintiff’s
size challenge as untimely because it was not brought within five days of the
award to ERPi. AR 1999-2001. SBA relied on the regulatory requirement
that, for contracts placed against a long-term multiple-award contract, size
challenges must be brought at the time of award of the original contract that
placed the offeror on the multiple-award schedule, here the original GSA FSS.
No new opportunity for protest arose when the agency solicited a BPA against
the schedule contract. Plaintiff then appealed to the SBA’s Office of Hearings
and Appeals (“OHA”) which likewise dismissed the challenge as untimely.
AR 2244-45 (SBA OHA decision of May 7, 2018).

        On March 2, 2018, plaintiff filed suit in this court prior to the resolution
of its appeal at SBA OHA. ERPi intervened on March 9, 2108. After OHA

                                         6
denied plaintiff’s appeal on May 7, 2018, plaintiff was granted leave to amend
its complaint to add allegations concerning the SBA OHA size decision. The
parties completed two rounds of briefing for judgment on the administrative
record, the second round concerned solely with the issue of ERPi’s eligibility
as a small business. We held oral argument on July 12, 2018, and on July 20,
2018, we sustained the protest and entered an injunction after informing the
parties of the result during a telephonic status conference. Order, ECF No. 39
(July 20, 2018).

                                 DISCUSSION

        This court has jurisdiction over challenges brought by interested parties
to actions taken by federal agencies in connection with the procurement of
goods and services. 28 U.S.C. § 1491(b)(1) (2012). We review such agency
action pursuant to the standards set forth in the Administrative Procedures Act
(“APA”), 5 U.S.C. § 706 (2012). 28 U.S.C. § 1491(b)(4) (setting the standard
of review for bid protests to those proscribed in the APA. Thus, to prevail the
protester must establish that the agency acted arbitrarily or capriciously or
acted in a manner that was not in accordance with law. 5 U.S.C. § 706. This
means that the protestor must demonstrate that the agency lacked a rational
basis or violated applicable law or regulation. See Impresa Construzioni
Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332–33 (Fed. Cir.
2001). If the agency “examines the relevant data and articulates a satisfactory
explanation,” the decision will not be second-guessed by the court. Gulf Grp.
Inc. v. United States, 61 Fed. Cl. 338, 351 (2004). But, “where the agency
fails to undertake a review or fails to documents such review, we must
conclude that it acted irrationally.” Starry Assocs., Inc. v. United States, 127
Fed. Cl. 539, 549 (2016) (citing AshBritt, Inc. v. United States, 87 Fed. Cl.
344, 370 (2009)). If the agency action is found to be illegal or otherwise
irrational, the protestor must also show that it was harmed; i.e., that had it not
been for the agency’s error, “it would have had a substantial chance of
securing the contract.” Labatt Food Servs., Inc. v. United States, 577 F.3d
1375, 1378 (Fed. Cir. 2009).

I. Plaintiff Has Standing

       We begin with the latter question: whether plaintiff has standing to
challenge the award. Defendant and intervenor aver that plaintiff has not been
harmed because it is not next in line to receive the award should the award to



                                        7
ERPi be set aside. They point to [       ] as the next ranked offeror and most
likely to receive the award if the contract is not awarded to ERPi.

        Plaintiff responds by arguing that it need only show that it was “within
the active zone of consideration,” Alfa Laval Separation Inc. v. United States,
175 F.3d 1365, 1367 (Fed. Cir. 1999), and that the record shows just that with
respect to the agency’s consideration of its proposal. We agree. The record
shows that the agency performed a best value trade-off between ERPi’s
proposal and AMSG’s as well as a best value trade-off between ERPi and
[      ]. AR 1475-79. Under these circumstances, we think plaintiff has
established standing. Although most of the cases cited by the parties deal with
situations in which the party found to have standing was second in line, a
protestor need not show that it would have received the award but for the
alleged error. Id. (citing Data General Corp. v. Johnson, 78 F.3d 1556, 1562
(Fed. Cir. 1996)). When the agency’s best value trade-off includes the
protestor, even when it was not notionally the second-rated offeror, the
protestor has established that it would have had a substantial chance of
receiving the award but for the alleged error.4 The law is plain that, in the
context of a best value procurement, agencies have broad discretion to award
for any reason that meets a bare standard of rationality. We thus cannot
conclude that there is no possible reason the agency might award to AMSG
over [      ]. In other words, here, the law will not assume it a fait accompli
that the next highest rated proposal would receive the award. Plaintiff has
established that there is a substantial chance that it might be awarded the
contract if ERPi is not selected and it thus has standing to maintain the protest.

II. ERPi Was Eligible For Award

       Plaintiff argues that ERPi was ineligible for award because it was not
small, per the applicable NAICS code, at the time of award of the BPA.
Plaintiff points to the VA’s own published guidance, which goes beyond the
SBA regulations to require that an offeror represent that it is small at the time
of award. AMSG argues that this additional requirement is not met simply by
having the applicable certifications of eligibility on file, but rather that the
offerors must make new affirmative representations of their size status at the

4
 Nowhere in the best value determination is it affirmatively stated that [ ]
was the next-in-line offeror. The ratings table provided above shows that it
had the second highest non-price ratings, from which we infer it to be the
second-rated.

                                        8
time of award. Plaintiff concludes that the SBA OHA decision dismissing the
size protest of ERPi was flawed when it failed to apply the VA’s own, more
stringent requirements. Even if the SBA was correct in following its own
regulations, plaintiff urges that its decision is irrelevant because the VA was
under an obligation to go further in assuring itself that the intervenor was in
fact eligible for award at the time of award. Plaintiff alleges that it was not,
and thus should not have received the award.

         Defendant answers that the SBA did no more than lawfully follow its
own applicable regulations and that, even had it applied the VA’s guidance,
the result would not have changed. The government argues that the applicable
regulations, including the published guidance cited by plaintiff, do not require
a new size certification at the time of award, but rather that the agency was
permitted to rely at the time of award on ERPi’s on-record certifications that
it fit under the NAICS code.5 Defendant also argues that, to the extent plaintiff
is challenging the service disabled veteran status of ERPi, that challenge is not
ripe because plaintiff failed to pursue the issue administratively with the VA.6

       A. Small Business Set-Aside Regulations

       We begin with the applicable regulations. Two sets of regulations are
implicated by this protest—the SBA’s and the VA’s—but the VA’s regulations
for small business set-asides tie the two together. FAR part 819 deals with
small business participation programs generally, and subpart 819.70
specifically applies to VA’s set-asides for veteran-owned small businesses.
Subpart 7003 draws the link, stating that VA set-asides “continue[] to be
governed by the Small Business Administration regulations, 13 CFR subparts
125.8 through 125.13, as well as the FAR, except where expressly directed
otherwise by the VAAR, and 38 CFR verification regulations for SDVOSBs


5
 Intervenor also argues that the VA’s class deviation was not legally binding
on the agency because it was not the subject of notice and comment rule-
making. We do not reach that question because we find that the result is the
same with or without the class deviation.
6
  We do not, however, view plaintiff’s challenge as being directed at ERPi’s
veteran owned or service disabled status. Thus we do not treat the issue
below. Plaintiff’s attack is limited to the NAICS code size standard, which we
believe to be properly before us due to plaintiff having protested the issue to
the SBA and then appealed to SBA OHA.

                                       9
and VOSBs.” 48 C.F.R. § 819.7003(a) (2017). Subpart 7003 continues: “(b)
At the time of submission of offer, the offeror must represent to the
contracting officer that it is a - (1) SDVOSB concern or VOSB concern; (2)
Small business concern under the [NAICS] code assigned to the acquisition;
and (3) Verified for eligibility in the VIP database.” Id. § 819.7003(b).

       Subpart 819.7003(b)(2)’s requirement that offerors represent their size
standard under the applicable NAICS code at the time of offer mirrors the
applicable SBA-specific regulation, 13 C.F.R. § 125.14 (2017), which states
that “At the time of contract offer, an SDVO SBC must be small within the
size standard corresponding to the NAICS code assigned to the contract.”
Section 121.404 answers the question of when the size status of a business
concern is determined: “SBA determines the size status of a concern . . . as of
the date the concern submits a written self-certification that it is small to the
procuring agency as part of its initial offer.” Id. § 121.404 (2017).

          The next question is when is an offeror required to submit such
certification. Section 121.404 goes on to deal specifically with orders issued
against a multiple award contract, such as the GSA FSS, and states that “SBA
determines size at the time of initial offer, . . . for a Multiple Award Contract.
. . . If a business is small at the time of offer for the Multiple Award Contract,
it is small for each order issued against the contract, unless a contracting
officer requests a new size certification in connection with a specific order.”
Id. § 121.404(1)(i). If the CO “requests a new size certification for the order,”
then, and only then, “SBA will determine size at the time of initial offer . . . for
an order.” Id. § 121.404(1)(iii). In sum, when the award is for an order
against a multiple award schedule contract, as here, SBA will look to the
certifications made by offerors when they entered into the schedule contract,
not the order. The only exception is when the CO of an agency submitting an
order against the schedule requests new certifications.

       SBA’s size protest timeliness rules predictably follow the same logic.
Because this contract is an order awarded under a long-term GSA FSS
contract, SBA’s long-term contract (or multiple award contract) timeliness
regulation applies:

       For contracts with durations greater than five years (including
       options), including all existing long-term contracts,
       Multi-agency contracts, Governmentwide Acquisition Contracts
       and Multiple Award Contracts:

                                        10
              (i) Protests regarding size certifications made for
              contracts must be received by the contracting officer
              prior to the close of business on the 5th day, exclusive of
              Saturdays, Sundays, and legal holidays, after receipt of
              notice (including notice received in writing, orally, or via
              electronic posting) of the identity of the prospective
              awardee or award.

              ....

              (iii) Protests relating to size certifications made in
              response to a contracting officer’s request for size
              certifications in connection with an individual order must
              be received by the contracting officer prior to the close of
              business on the 5th day, exclusive of Saturdays, Sundays,
              and legal holidays, after receipt of notice . . . .

Id. § 121.1004(a)(3)(iii). Subsections (i) and (iii) read together mean that
protestors generally have five days from award of the master FSS contract to
protest an awardee’s size certification unless the CO requires re-certification
at the time of award of an order against the FSS contract. Here, the CO did not
ask for a new certification at any point.

        The VA’s own supplemental procurement regulations, known as the
VA Acquisition Regulation (“VAAR”), add another level of administrative
requirements to VA procurements. From time to time, the VA issues new
rules that deviate from published FAR or VAAR provisions, called
“deviations.” Plaintiff cites to the class deviation issued by the VA on July 26,
2016, which purports to supercede FAR part 819.7003. The deviation
replaces subsection (b) with the following language: “At the time of
submission of offers/quotes, and prior to award of any contracts, the offeror
must represent to the contracting officer that it is . . .” and then it goes on to
list the same three requirements of eligibility: status as a SDVOSB/VOSB,
small under the NAICS code, and listed as verified in the VIP database. Class
Deviation—Veterans First Contracting Program (VFCP 2016), Attachment 4
§ 819.7003 (July 25, 2016) (emphasis added). This adds to FAR part 819.7003
the requirement that an offeror represent its eligibility to the CO at the time of
award in addition to at the time of offer. The impact of that additional
requirement is the issue raised by plaintiff.



                                       11
       B. ERPi Was Eligible at the Time of Award of its GSA FSS Contract
       And at the Time of Award of the BPA

        We hold that neither the VA nor the SBA erred. SBA simply applied
its timeliness requirements as written. Nothing in the VAAR or published
deviation purports to change the SBA’s size protest timeliness rules. That fact
dictates the result reached by SBA OHA. 13 C.F.R. § 121.1004(a)(3)(i) and
(iii) are clear that an offeror has five days from the award that places a
contractor on the schedule contract to protest that awardee’s size status or, if
the CO asks for new certifications when placing an order against the supply
schedule, a new five-day window is opened. Here, the CO disavowed on
multiple occasions the opportunity to ask for new certifications. Thus no new
window was opened to challenge ERPi’s size status, and OHA was neither
arbitrary nor capricious in finding so. Although our review could end here, we
also consider plaintiff’s alternative argument that the SBA’s decisions are
irrelevant given the VA’s class deviation’s requirements.

       Plaintiff argues that, because SBA OHA did not attempt to circumvent
its own timeliness rules to take into account the VAAR deviation, the SBA
decision is irrelevant and the agency was otherwise under an independent duty
to assure itself of ERPi’s size at the time of award, which plaintiff avers would
have resulted in disqualification and award to another offeror. We do not view
the class deviation as quite so sweeping in its effect.

       Although the VAAR class deviation does create a new point of inquiry
for the VA into the size of status of offerors, it does not change the existing
framework under which offerors certify themselves as small and veteran
owned and/ or service disabled. Offerors are required to represent to the
agency that they meet the size standards at the time of offer and award. We
take this, as the parties do, to mean also at the time of award of an order
against a schedule contract, but the process of making such representations we
view as unchanged.

        Here, the RFQ informed offerors that the VA would evaluate their
eligibility through the SAM and VIP databases. AR 164 (Questions and
Answers); AR 248 (evaluation process graphic). Answer to question 84 stated
that the VA would “determine company size by referencing [SAM]
representations and certifications at the time of receipt of Quotes and at the
time of award.” AR 164. Question 86 specifically asked whether the agency
would include a requirement for re-certification of SDVOSB status. The

                                       12
answer was in the negative, although offerors were given the option of
including updated certifications with their proposals if they did not want the
agency to rely on those found in the SAM database. Id. The agency did as
promised, and it found ERPi to have the necessary certifications in both the
SAM and VIP databases. AR 1356 (best value determination).

        Thus, if an offeror’s on-file certification that it meets the NAICS code
remains unchanged during a procurement, the agency is permitted to rely on
it both at the time of offer and again at the time of award. The regulations also
afford the agency discretion to require new certifications if the CO so chooses,
but neither the class deviation nor any other cited regulation requires the CO
to do so at the time of award. If an offeror’s status in the applicable database
should change for other reasons between the time of offer and award, it might
be rendered ineligible at the time of award under the VA’s class deviation, but
nothing in that deviation independently requires an offeror to make a new
certification at that time.

        In sum, the agency promised to avail itself of the record certifications
at the time of offer and award, and did so. We do not view the class deviation
as creating a new requirement that offerors re-certify themselves for every
offer that they submit to the VA and again at time of award. The FAR
mandates that contractors update their size certifications only annually. 48
C.F.R. § 4.1201 (2017). Businesses are eligible to remain in the VIP database
for three years unless they fall out of compliance. See 38 C.F.R. § 74.15(a)
(2017). The best value determination contains a screenshot of intervenor’s
VIP profile, which listed that it was last verified on January 11, 2016, and that
certification would not expire until January 11, 2019. AR 1356. Because the
agency did not request re-certificaton and because it was not required to do so,
the agency was not arbitrary or capricious and did not act contrary to law in
finding that ERPi was eligible for award.7




7
 Intervenor also argued that, even had it been required to re-certify, it would
have met the size requirements. Plaintiff alleges the opposite, and both parties
cite to extra-record materials for factual support. We do not reach that issue,
however, because the agency was proper in its reliance on the of-record
certifications at the time.

                                       13
III. The Agency’s Evaluation of ERPi’s Commercial Healthcare Experience
Was Arbitrary

       Plaintiff’s other main challenge to the VA’s selection of ERPi concerns
how the agency viewed intervenor’s relationship to two entities of similar
name. One was offered by ERPi as a major subcontractor under the Past
Performance factor, and the other company was invoked as a“strategic teaming
partner” that would provide experience and other non-specific support to
ERPi’s effort in performing the contract. The latter company was cited by
ERPi in its Commercial Healthcare Experience volume.

       The experience of [                                                ] was
touted by the VA in its evaluation of ERPi under the Commercial Healthcare
Experience factor as providing the basis for the agency’s award of a substantial
confidence rating. Plaintiff challenges that finding as unfounded by ERPi’s
proposal and likely the product of confusion on the part of the agency between
[          ] and [                                     ].

        The Commercial Healthcare Experience factor was considered by the
agency to be of equal importance with the Technical factor. The solicitation
is clear that the agency was very interested in procuring consulting services
from companies with experience in transforming healthcare systems, be they
the prime contractor or its subcontractors. To that end, offerors were invited
to provide three examples of such past efforts under this factor from their own
or their subcontractor’s experience. AR 242. Offerors were provided five
pages to write a narrative description of those efforts focusing on how that
experience “equipped it with the knowledge, skills and ability to support
implementation of a health care delivery system for a large, complex
enterprise-wide healthcare network.” AR 243. As mentioned previously, no
distinction for this factor was made between major and other smaller
subcontractors.

        On the first page of its proposal, in the first paragraph, intervenor listed
its team to perform the work: ERPi, “[
                                                                            .]” AR
651. In the next paragraph, intervenor stated that, after reviewing the
statement of work, “we have carefully considered additional teammates to
augment our capabilities and perspectives and provide best value to the
government.” Id. It then listed these two key teammates: “[
       ]” and “[                       .]” Id. Thus ERPi began its proposal by

                                        14
defining “[ ]” as referring to two separate entities, [                       ].
It touted these entities as having more experience “orchestrating health system
modernization strategy and implementation than any other commercial firm.”
Id. An effort to transform [                   ] was cited as the example.

        In the Commercial Healthcare Experience section of its proposal
specifically, ERPi listed “[
                                               ]” as “strategic teaming partners.”
AR 741. It again defined [ ] as a collective of the same two similarly named
entities with which it began its Technical volume. The next paragraph goes on
to list ten healthcare providers for which [          ] [has] provide[d] ‘strategy
through implementation’ services and successfully execute[d] complex
projects for” in a highly competitive market. Id. “[           ] brings the best of
commercial and Federal consulting to our clients to help them achieve
success.” Id. It is unclear which entity has which experience. Intervenor then
listed three specific past efforts in the field of healthcare consulting as invited
by the RFQ: [                                                               ]. AR
743-45. All three were listed as performed by “[ ]” or “[ ].”

       Although it is unclear from these statements taken alone which of the
two [      ] entities had performed these cited prior efforts, the technical
evaluators understood these references to have been performed by [         ].
See AR 1287-89 (“Work performed by [                                 ]). The
parties do not dispute that this work was performed by [      ] and not [
       ].

        Some additional clarity is provided in the Past Performance section of
intervenor’s proposal. There it lists its major subcontractors–those performing
at least 20 percent of the work–as [                         ] and [          ].
ERPi itself is listed as performing 50.25% of the work, [              ] 23.42%,
and [                   ] 23.69%. AR 755. That chart also lists the statement
of work tasks that these companies would be performing. Id. (ERPi tasks 9.1-
9.6; [         ] tasks 9.2-9.6; and [                   ] task 9.5). Those three
total 97.36% of the value of work under the contract. No breakdown of the
percentage of work or list of tasks to be performed is found anywhere in
ERPi’s proposal for [           ]. Also as part of its Past Performance proposal,
intervenor provided three past performance references as required by the RFQ.
The first was performed by ERPi, the second by [                     ] in which
ERPi was a subcontractor, and the third was performed by [                ].



                                        15
        The VA technical evaluators considered each of the three examples
provided of Commercial Healthcare Experience. They listed each as having
been performed by [          ], not [                   ], and credited the
experience to ERPi. The result was a “substantial confidence” rating, the
highest possible adjectival rating, for the Commercial Healthcare Experience
factor. AR 1290. The consensus rating report states that “[t]he Partnership
with [ ] and their example experience/projects suggest a high probability of
success with VA Modernization given the relevant comparisons of needed
effort.” Id. These examples “exhibited the ability of team ERPi to support
improvement and implementation of large healthcare delivery systems” and
“demonstrate that Team ERPi can deliver results that VA will expect.” Id.

       The CO relied on these findings in his best value determination,
agreeing with them all. He touted the experience of ERPi’s “key partner’s” as
driving the agency’s evaluation of intervenor’s Commercial Healthcare
Experience. In both trade-off analyses, ERPi’s “team of subcontractors” was
cited as a benefit to the government. See AR 1476, 1477.

        Read together, these record statements provide a clear picture that the
VA relied heavily on the experience provided by “team ERPi,” and most
specifically that provided by [             ]. [           ], the major
subcontractor, however, performed none of the work on which intervenor
relied for its Commercial Healthcare Experience examples and on which the
evaluators and the CO relied as giving the VA substantial confidence in
ERPi’s handling of this contract. In fact, for the Past Performance evaluation,
wherein intervenor could rely only on its own and its major subcontractors’
experience ( i.e., not that of [            ]), the agency found moderate risk
associated with ERPi’s proposal. AR 1474. The question then is whether it
was reasonable for the agency to have found so much support in the undefined
role to be played by [           ], which by definition could not have consisted
of more than 3% of the effort.

       Plaintiff answers that question in the negative, and we agree. Plaintiff
avers that [          ] and [                 ] are separate entities and cites to
extra-record materials to establish that they are no longer affiliated under a
parent company or other corporate relationship. Plaintiff also cites to other
recent bid protests in which the relationship between the two companies was
at issue. We need neither such reference to illuminate a problem that is
apparent from the record.



                                       16
        Defendant relies on the solicitation’s allowance of any subcontractor’s
experience to be used for the Commercial Healthcare Experience factor, no
matter the anticipated scope or size of that company’s performance under the
solicited contract. Thus, in defendant’s view, the agency was entitled to rely
on whatever was provided by an offeror by way of a subcontractor’s previous
experience for this factor. The total lack of indication in the record that [
        ] would perform any particular work under the contract or otherwise
offer some specified support to intervenor’s and its major subcontractor’s
efforts is thus irrelevant in the government’s view.

       Intervenor takes a slightly different tack, arguing not that the
percentage of performance of the subcontractors relied on for Corporate
Healthcare Experience is irrelevant, but that the law provides for situations
like these by allowing offerors to rely on the experience of “affiliates” for
purposes of providing experience and other relevant solicitation requirements.
Intervenor states that [           ] and [                 ] are affiliates and were
thus properly considered together by the agency for their collective experience.

        The connection not offered by either defendant or intervenor, however,
is the basis on which the agency could reasonably conclude that [           ]’s
                                                                      8
experience would be meaningfully brought to bear by “Team ERPi.” Neither
intervenor’s proposal nor the agency’s evaluation provide the missing link. In
fact, the breakdown of performance in ERPi’s proposal suggests the opposite;
between ERPi, [             ], and [              ], 97.36% of the work was
accounted for, leaving only 2.64% for any other subcontractor to perform.
And that tiny percentage also has to account for [                      ], which
was listed as a “strategic teaming partner” of ERPi as well as “industry
experts, luminaries, and academia.” AR 755 (stating that work not captured



8
 At oral argument, intervenor’s counsel offered that [          ] would likely
be a “second-tier” subcontractor for this work, meaning that it would have a
contractual relationship as a sub-subcontractor to one of ERPi’s major
subcontractors, but no privity with the government. Such an arrangement
would provide for [          ] to in fact perform more than some share of the
2.64 percent left over for anyone other than ERPi, [       ], and [
        ]. That explanation provides no support for intervenor’s position,
however, because neither the agency nor the intervenor posited it as a rationale
at the time of award, nor does any other document in the record suggest such
a relationship.

                                        17
in the chart above would be performed by experts, luminaries, and academia).

        Only [               ] was offered by intervenor as performing a large
percentage of work as a subcontractor. No representation appears in the record
regarding the scope or size of [              ]’s anticipated performance. The
only thread connecting [              ] to ERPi’s proposed effort are several
instances where “[ ]” is defined in parentheses as including both [
     ] and [      ], but in no place does it explain the corporate relationship
between the two or make any other representation on which the agency could
conclude that [                ] was obligated either to ERPi or to [
             ] to provide support for their efforts under this contract.9 It is also
important to note that the listing of [              ]’s three previous corporate
healthcare experience efforts is nothing more than a recitation of that
company’s experience. Without a legal link between the two, the agency
cannot reasonably have considered the experience relevant to ERPi or any of
its subcontractors. All this is too thin a reed.

        As to the argument from intervenor that [               ] is an affiliate of
[               ], we again note that no such connection is drawn by intervenor’s
proposal or the agency’s evaluation. This court has held that an agency can
rely on the experience or past performance of “a parent or affiliated company
. . . where the firm’s proposal demonstrates that the resources of the parent or
affiliated company will affect the performance of the offeror.” Femme Comp
Inc. v. United States, 83 Fed. Cl. 704, 747 (2008). The problem for defendant
and intervenor is that, other than naming the two entities together and citing
[               ]’s experience, the proposal draws no link to assure the agency
that “the resources of the . . . affiliated company will affect the performance
of the offeror.” Id. The court has only a fixed lense through which to view the
agency’s actions: the words contained in the contemporaneous record of the
procurement. Here, there is no documentary support for the agency’s reliance
on [            ]’s corporate healthcare experience as providing the critical
experience for intervenor. The agency may have known something about the
two entities’ corporate relationship or it may have inferred something from
ERPi’s proposal, but this speculation is not supported on the record. We
therefore conclude that the agency acted arbitrarily in awarding a “substantial
confidence” rating to ERPi for the Commercial Healthcare Experience factor.

9
 ERPi did list one individual for the Key Personnel technical subfactor as
coming from [              ]. We view that fact as insufficient to draw the
necessary link.

                                        18
It necessarily follows that the best value determination and award to ERPi
were also irrational.

IV. The Award Must Be Set Aside

         Because defendant arbitrarily inflated the awardee’s rating for one of
the two most important factors, the award must be set aside and the evaluation
performed again. In order to enjoin any agency action, the court must consider
four factors in reaching that conclusion. They are: 1) whether plaintiff has
succeeded on the merits, as it must to receive permanent injunctive relief; 2)
whether plaintiff will suffer irreparable harm absent the injunction; 3) whether
the balance of the hardships to the respective parties favors an injunction; and
4) whether it is in the public interest to grant the injunctive relief. PGBA, LLC
v. United States, 389 F.3d 1219, 1229 (Fed. Cir. 2004). The court considers
all of the factors together. No one factor is dispositive other than that plaintiff
must succeed on the merits in order to gain permanent injunctive relief.

        As we hold above, plaintiff has demonstrated standing and shown that
the agency irrationally evaluated the awardee’s proposal. The first hurdle is
met. As to the harm suffered by plaintiff absent relief, this court has often
found that the loss of an opportunity to fairly compete for a contract is a
significant and irreparable harm. We find so here. The balance of the harms
favors plaintiff. Other than delay, defendant has not shown how it will be
harmed by the injunction. Eventually the work can be performed one way or
the other. The provision of healthcare to veterans is not immediately
implicated by requiring additional time be taken for this procurement.
Plaintiff, on the other hand, will be harmed by losing its opportunity to
compete for the work. The public’s interest always is in ensuring the lawful
expenditure of public funds, meaning that federal entities must meet the
standards prescribed by procurement statues and regulations as well as the
APA. A rational and fair acquisition process is part and parcel with this
interest, and defendant has not proffered any countervailing public interest.
In sum, we find that injunctive relief is warranted. We entered an injunction
at the time of the status conference on July 20, 2018.

                                CONCLUSION

        Although the intervenor was eligible for the award—the VA’s reliance
on ERPi’s SAM and VIP certifications was not unlawful—the agency was
arbitrary and capricious in crediting it with the commercial healthcare

                                        19
experience of an entity that the agency had no apparent reason to think would
meaningfully support the work or would otherwise influence intervenor’s
performance in a significant way. Thus we previously granted plaintiff’s
motion for judgment on the administrative record, denied defendant’s and
intervenor’s cross-motions, and entered an injunction setting aside the award
to ERPi and instructing the VA to reevaluate ERPi’s proposal and make a new
award decision. We have also considered plaintiff’s other allegations, but as
explained on the record during the status conference, none provide a basis for
sustaining the protest. Accordingly, the Clerk of Court is directed to enter
judgment for plaintiff. No costs.



                                          s/Eric G. Bruggink
                                          ERIC G. BRUGGINK
                                          Senior Judge




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