                In the United States Court of Federal Claims
                                          No. 15-1290C

                               (Filed Under Seal: February 26, 2016)
                                     (Reissued: March 7, 2016)

                                              )      Post-award bid protest; agency’s
 INNOVATIVE TEST ASSET                        )      reevaluation as part of GAO’s
 SOLUTIONS LLC,                               )      recommended corrective action;
                                              )      implied duty to fairly and honestly
                  Plaintiff,                  )      consider protestor’s proposal during
                                              )      reevaluation; technical risk factors;
           v.                                 )      cost-price considerations, including
                                              )      price realism; past performance
 UNITED STATES,                               )
                                              )
                  Defendant,                  )
           and                                )
                                              )
 NATIONAL AEROSPACE                           )
 SOLUTIONS, LLC,                              )
                                              )
                  Defendant-Intervenor.       )
                                              )

       Robert J. Symon, Bradley Arant Boult Cummings LLP, Washington, D.C. for plaintiff.
With him on the briefs and at the hearing were Elizabeth A. Ferrell and Aron C. Beezley,
Bradley Arant Boult Cummings LLP, Washington, D.C.

        Peter A. Gwynne, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Washington, D.C. for defendant. With Mr. Gwynne on the briefs
and at the hearing was Gregory B. Porter, United States Air Force. Also with him on the briefs
were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, and
Robert E. Kirschman, Jr., Director, and Douglas K. Mickle, Assistant Director, Commercial
Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., as
well as Lt. Col. Mark E. Allen, Lt. Col. Damund E. Williams, Maj. Daniel J. Watson, and Maj.
George M. Ebert, United States Air Force.

       Michael F. Mason, Hogan Lovells US LLP, Washington, D.C. for defendant-intervenor.
With him on the briefs and at the hearing were C. Peter Dungan and Christine Reynolds, Hogan
Lovells US LLP, Washington, D.C.

                                   OPINION AND ORDER 1
       1
        Because this opinion and order might have contained confidential or proprietary
information within the meaning of Rule 26(c)(1)(G) of the Rules of the United States Court of
LETTOW, Judge.

        This post-award bid protest arises from a solicitation by the United States Air Force (“Air
Force” or “government”) for test operations and sustainment services at the Arnold Engineering
Development Complex located near Tullahoma, Tennessee. On June 10, 2015, after an
approximately ten-month procurement process, the Air Force awarded the contract to National
Aerospace Solutions, LLC (“National Aerospace”). Another offeror, Innovative Test Asset
Solutions LLC (“Innovative Test”), initially protested this award at the Government
Accountability Office (“GAO”), challenging several aspects of the Air Force’s evaluation
process. GAO sustained the protest on two grounds related to the technical evaluation of
Innovative Test’s proposal and recommended that the Air Force take corrective action. The Air
Force conducted a limited reevaluation of the offerors’ original proposals and issued a new
selection decision on November 18, 2015, maintaining the award to National Aerospace.

       Innovative Test now seeks a permanent injunction in this court of the award to National
Aerospace, asserting that the Air Force breached its duty to honestly and fairly consider
Innovative Test’s proposal during the reevaluation, as well as renewing several of its protests
regarding alleged flaws in the evaluation process. Pending before the court are the parties’ cross-
motions for judgment upon the administrative record. For the reasons discussed in this opinion,
the court has concluded that the plaintiff’s motion should be denied and the government’s and
defendant-intervenor’s motions should be granted.

                                              FACTS 2

                  A. History of the Arnold Engineering Development Complex

      The Arnold Engineering Development Complex was established in 1951 in the
Tennessee Valley to serve as the Air Force’s premiere aerospace engineering development


Federal Claims (“RCFC”) and the protective order entered in this case, it was initially filed under
seal. The parties were requested to review this decision and provide proposed redactions of any
confidential or proprietary information. The resulting redactions are shown by brackets
enclosing asterisks, as “[***].”.
       2
         The recitations that follow constitute findings of fact by the court drawn from the
administrative record of the procurement filed pursuant to RCFC 52.1(a), see Bannum, Inc. v.
United States, 404 F.3d 1346, 1356 (Fed. Cir. 2005) (specifying that bid protest proceedings
“provide for trial on a paper record, allowing fact-finding by the trial court”), as well as from the
parties’ evidentiary submissions related to prejudice and equitable relief, see Holloway & Co. v.
United States, 87 Fed. Cl. 381, 391 n.12 (2009) (“It is the responsibility of th[e] court, not the
administrative agency [conducting the procurement], to provide for factual proceedings directed
toward, and to find facts relevant to, irreparability of harms or prejudice to any party or to the
public interest through grant or denial of injunctive [or declaratory] relief.” (quoting PGBA, LLC
v. United States, 60 Fed. 567, 568 n.1, aff’d, 389 F.3d 1219 (Fed. Cir. 2004))).



                                                  2
center. Pl.’s Mem. in Support of Its Mot. for Permanent Injunctive Relief, Declaratory Relief
and Judgment on the Admin. Record (“Pl.’s Mot.”) at 3, ECF No. 50 (citing The History of
AEDC, United States Air Force, http://www.arnold.af.mil/shared/media/document/AFD-110405-
006.pdf). The complex “operates 32 aerodynamic and propulsion wind tunnels, rocket and
turbine engine test cells, space environmental chambers, arc heaters, ballistic ranges and other
specialized units.” Id. In the 1960s, the complex focused on support to the U.S. space program,
conducting tests on space propulsion systems. Id. at 4 (citing Aerospace, Excelled: The USA’s
Arnold Engineering Development Center (“Aerospace, Excelled”), http://www.defense
industrydaily.com/atas-consolidated-contract-for-maintenance-support-of-arnold-engineering-
development-center-0627/). The focus later shifted to development of military aircraft, including
testing for the F-15, F-16, and F-111 fighter aircraft. Id. The complex currently conducts
aerodynamics and propulsion development tests for programs such as the F-22, F-35 Joint Strike
Fighter, and F-18 E/F fighter aircraft, and the Delta III and IV rockets. Id.

        Throughout the history of the Arnold Engineering Development Complex, the Air Force
has relied on contractors to support the operations and maintenance of the test facilities, and to
assist with information management and base operations. AR 132-27898; Pl.’s Mot. at 4 (citing
Aerospace, Excelled). 3 Initially the services were provided by a single contractor, but in 1980
the Air Force changed its acquisition strategy “[t]o stimulate competition and strengthen Air
Force control of the Complex’s . . . operations.” AR 132-27898. At that time, the Air Force
awarded three separate contracts for propulsion testing, flight dynamics, and mission support.
AR 132-27898. In 2003, these services were again consolidated into one contract known as
Operations, Maintenance, Information Management, and Support (“OMIMS”). AR 132-27899;
Pl.’s Mot. at 4. The OMIMS contract was awarded to Aerospace Testing Alliance (“ATA”), a
joint venture between Jacobs Technology Inc. (“Jacobs”), Computer Sciences Corporation, and
General Physics. AR 132-27899, -928. 4 The contract extended for 12 years and was awarded
for a price of $2.75 billion. Pl.’s Mot. at 4.

           B. Solicitation for a New Test Operations and Sustainment Services Contract

        In January 2013, the Air Force established a Source Selection Office to develop an
acquisition strategy to again divide the OMIMS contract, this time into six distinct contracts, the
largest of which (Test Operations and Sustainment) is at issue in this case. AR 132-27899 to -

       3
         Citations to the administrative record refer to the record as filed and amended. The
record is paginated sequentially and is also divided into tabs. In citing to the administrative
record, the court will first designate the tab, followed by page number, e.g., AR 132–27898
refers to page 27898, which is located in tab 132 of the record.
       4
        Jacobs had historically provided testing and base operations services at the Arnold
Engineering Development Complex through its predecessor organizations, Jacobs Sverdrup and
Sverdrup Technology, Inc. AR 132-27899; see also Pl.’s Mot. at 4 & n.5. Computer Sciences
Corporation sold the area of its business covered by the OMIMS contract to Pacific Architects
and Engineers (“PAE”) in 2013. AR 132-27899. General Physics became GP Strategies
Corporation (“GP Strategies”) during the course of the OMIMS contract. See, e.g., Pl.’s Mot. at
54 (noting that as of 2013, GP Strategies was a partner in ATA, along with Jacobs and PAE).



                                                 3
900. The government publically announced its plans for the Test Operations and Sustainment
contract in February 2013. AR 1-14. The Air Force issued a series of requests for information
through the Federal Business Opportunities website to assess potential offerors’ capabilities and
interests in the work to be performed and to obtain their reactions to possible contracting
approaches. AR 1-2 to -20; see also AR 10-7364 to -66. Over the next several months, the Air
Force also trained personnel who would be involved in the source selection process, including
those who would be responsible for acquisition planning, past performance evaluation, risk
management, and drafting instructions to offerors and evaluation criteria. AR Tabs 2-3, 6, 8. In
October 2013, the Air Force received an independent government cost estimate totaling
approximately $1.8 billion for the anticipated work to be performed over an eight-year period.
AR 9-7343. The government also obtained a market research report, which concluded that the
Test Operations and Sustainment contract should be awarded through a full and open
competition because of the “limited number of companies with the capabilities to manage and
execute the broad and diverse requirements of the proposed . . . contract.” AR 10-7396.

        The Air Force issued a request for proposals (“RFP”) for the Test Operations and
Sustainment contract (solicitation number FA9101-13-R-0100) on August 28, 2014. AR Tab 35.
The RFP stated that it was an unrestricted procurement for the services at Arnold Engineering
Development Complex, as well as two remote testing sites in White Oak, Maryland and Moffett
Field, California. AR 35-14226, -14239. The solicitation contemplated a firm-fixed-price
phase-in period from July 1, 2015 to September 30, 2015, a cost-plus-award-fee base period
from October 1, 2015 to September 30, 2016, and seven one-year option periods for fiscal years
2017 to 2023. AR 35-14228 to -35. 5 The performance work statement attached to the RFP
indicated that the solicitation was intended to “obtain the technical expertise and services
necessary to support” the complex’s mission, and it advised that because of certain fiscal
constraints, “near term efficiencies will be necessary to allow continued operation of required
capabilities.” AR 35-14296. The specific contract services included “test operations, technology
development, equipment and facility sustainment, capital improvements and some support
services.” AR 35-14297.

        The evaluation criteria section of the RFP (Section M) stated that the government would
conduct a “best value source selection” to determine the “best overall offer, based upon an
integrated assessment of [the] [t]echnical, [p]ast [p]erformance, and [c]ost[-p]rice [evaluation
factors].” AR 35-14474. 6 The technical and past performance factors, when taken together,
were to be “significantly more important” than the cost-price factor, although cost-price would
“contribute substantially to the selection decision.” AR 35-14475. The RFP stated that this
evaluation approach “may result in an award to a higher rated, higher priced offeror, where the
decision is consistent with the evaluation factors, and the Source Selection Authority . . .
reasonably determines that the technical and/or overall business approach and/or past


       5
       Two of the contract option periods were intended to serve as award terms based on the
awardee’s performance evaluations during the course of the contract. AR 35-14254 to -55.
       6
       The evaluation criteria reflect amendments to the RFP issued on September 12, 2014,
September 18, 2014, and September 24, 2014. See AR 29-14088 to -14178 (providing the three
amendments).


                                                4
performance of the higher price[d] offeror outweighs the cost difference.” AR 35-14474. It also
stated that discussions would be held with offerors to aid the government in obtaining the best
value, and that offerors’ responses to evaluation notices and their final proposal revisions would
be considered in making the source selection. AR 35-14475.

       1. The technical evaluation factor.

        Within the technical evaluation factor, the RFP outlined four subfactors that would be
given equal weight: (1) Technical Operations, (2) Management Approach, (3) Qualified
Personnel, and (4) Innovations and Efficiencies. AR 35-14475. The Technical Operations
subfactor involved an assessment of the offerors’ approach to the requirements outlined in a
performance work statement, based on four measures of merit: (1) operation of test and test
support assets, (2) integrated scheduling, (3) lifecycle sustainment, and (4) capital improvements.
AR 35-14477 to -78. The Management Approach subfactor involved evaluating the offerors’
“ability to implement an effective and efficient management approach that incorporates risk
management into all aspects of the approach.” AR 35-14478. The evaluation of this subfactor
would be based on six measures of merit: (1) performance measurement, (2) interface
management, (3) workload management, (4) transition/phase-in management, (5) subcontracting
management, and (6) organizational conflict of interest. AR 35-14478 to -79. The Qualified
Personnel subfactor would assess the experience and capabilities of the proposed personnel,
based on the individuals identified and the overall staffing plan. AR 35-14479. Finally, the
Innovations and Efficiencies subfactor would assess offerors’ proposed methods of creating
“measurable savings” over the initial government cost estimate or “qualitative improvements” to
the requirements in the performance work statement. AR 35-14480.

         The evaluation of each technical subfactor would be stated in terms of “two distinct but
related assessments: the Technical Rating and the Technical Risk Rating.” AR 35-14475. The
Technical Rating would assess “the quality of the offeror’s solution for meeting the
[g]overnment’s requirement[s],” and each offeror would receive one of five adjectival ratings:
Blue/Outstanding, Purple/Good, Green/Acceptable, Yellow/Marginal, and Red/Unacceptable.
AR 35-14475 to -76. The government reserved the right to give positive consideration (“assign a
strength”) to offerors who exceeded the threshold requirements of any of the technical
subfactors. AR 35-14476. The Technical Risk Rating, by contrast, was intended to assess
weaknesses within the offerors’ proposals, including the “potential for disruption of schedule,
increased costs, or degradation of performance, the need for increased [g]overnment oversight,
or the likelihood of unsuccessful contract performance.” AR 35-14476. Each offeror would
receive one of three adjectival ratings based on this assessment: Low (the most favorable rating),
Moderate, or High. AR 35-14477. The RFP also stated that “[f]or any weakness identified, the
evaluation shall address the [o]fferor’s proposed mitigation and why that mitigation approach is
or is not manageable.” AR 35-14476.

       2. The past performance evaluation factor.

         The past performance factor assessed the government’s confidence in each offeror’s
ability to “successfully perform the required effort,” based on both the quantity and quality of
their past experience. AR 35-14480 to -82. The government would consider the past



                                                 5
performance information included in the proposals, information obtained from government
databases, and reviews from program managers, contracting officers, and other government
officials responsible for prior contracts, including those officials’ responses to a past
performance questionnaire. AR 35-14481; AR 123-27925. The offerors could submit past
performance information from “team members that were the prime [o]fferor, a joint venture . . .
partner if the [o]fferor was organized as a [joint venture], or a major subcontractor [responsible
for 10 percent or more of the contract scope].” AR 132-27924. The government would assign
each offeror one of five confidence assessments for this factor: Substantial Confidence,
Satisfactory Confidence, Limited Confidence, No Confidence, or Unknown Confidence
(Neutral). AR 35-14480.

        In evaluating this factor, the government would first determine whether each contract
submitted as a past performance reference met recency requirements, i.e., that it was performed
within the past four years. AR 35-14481. For each prior contract that met this requirement, the
government would assign one of four relevancy ratings based on the scope, magnitude, and
complexity of the work: Very Relevant, Relevant, Somewhat Relevant, or Not Relevant. AR 35-
14481 to -82. The government would also assign one of six quality assessment ratings for each
contract: Blue/Exceptional, Purple/Very Good, Green/Satisfactory, Yellow/Marginal,
Red/Unsatisfactory, or Not Applicable. AR 35-14483 to -84. These relevancy and quality
ratings would then be reviewed as a whole, in conjunction with the recency of performance, to
determine the overall confidence assessment. AR 35-14484.

       3. The cost-price evaluation factor.

        Finally, the RFP stated that the cost-price factor would be evaluated based on the most
probable cost as determined by the government’s estimate of the “anticipated performance costs
plus any fee anticipated to be awarded.” AR 35-14484. The most probable cost estimate would
be based on the reasonableness of the proposed price, the “realism” of the price in light of the
offeror’s understanding of the solicitation requirements, and whether the proposal was
“unbalanced with respect to prices.” AR 35-14484 to -85.

        The cost-price evaluation included a cost-realism assessment aided by a software
program, Crystal Ball. AR 55-18556. Crystal Ball was specifically used to assess the realism of
the proposed cost savings submitted by the offerors in response to the Innovations and
Efficiencies subfactor of the technical factor. AR 55-18556. The team of subject matter experts
assigned to this subfactor evaluated each innovation or efficiency proposed by the offerors, and
then assigned a minimum, most likely, and maximum value (in percentages) to the net savings
proposed. AR 55-18556. The Innovations and Efficiencies team then passed these values to the
Cost team, which input the data to the Crystal Ball program for a statistical simulation that
determined the “most realistic and obtainable net savings” for each innovation and efficiency
proposed. AR 55-18556; see also AR Tabs 53, 54, 57, 78, 79, 90, 111 (Crystal Ball calculations
for Innovative Test and National Aerospace during the evaluation process). In instances where
an offeror did not use the government estimate of costs provided in the RFP’s workload resource
guide as a baseline for their cost or net savings proposal, the evaluators treated these savings—
measured as the difference between the government estimate and the offeror’s proposed “Day
One Staffing” cost—as additional innovations and efficiencies evaluated through this method.



                                                 6
AR 55-18556. This was the case for Innovative Test. See AR Tab 57 (Crystal Ball calculations
related to Innovative Test’s “Day One Reductions”).

                        C. Evaluation of Proposals and Award Decision

       The Air Force received proposals from four offerors, [***], [***], Innovative Test, and
National Aerospace. AR 132-27928. 7 Each of the offers were considered in the competitive
range for discussions. AR 132-27928. [***] withdrew from consideration on February 23,
2015, however, because of concerns over an organizational conflict of interest. AR 132-27930.

         The Air Force Source Selection Authority for the Test Operations and Sustainment
contract was the Air Force Program Executive Office for Combat and Mission Support. AR 132-
27905. The source selection process began with four teams of subject matter experts who
evaluated the proposals for the technical, past performance, and cost-price factors. AR 41-
15871. These teams reported their evaluation results to the Source Selection Evaluation Board
(“Board”), which reviewed the results against the solicitation requirements and evaluation
criteria. AR 41-15877. The Board then provided the results to the Source Selection Advisory
Council (“Council”), which reviewed the results again for consistency and made a
recommendation to the Source Selection Authority. AR 41-15875; AR 132-27915. The Air
Force also used a Multi-Functional Independent Review Team to review the ratings and
comments provided by the evaluation teams for consistency and completeness. See AR Tabs 60,
81, 128 (spreadsheets from the team’s reviews in December 2014, March 2015, and May 2015).

        Over several months, the Air Force communicated with the offerors through six rounds of
evaluation notices, in which the government requested clarification or additional information
regarding the proposals and notified the offerors of weaknesses, significant weaknesses, and
deficiencies noted by the evaluation teams. See AR Tabs 62, 63, 68, 69, 74, 75, 83, 85, 86, 92,
113, 114. These evaluation notices included “most probable cost adjustment[s]” to proposed
innovations and efficiencies determined through the cost-realism assessment, using the Crystal
Ball program. AR 55-18556. The offerors provided detailed responses to these evaluation
notices and also had the opportunity to either engage in one-on-one discussions with the Air
Force or formally submit questions, to which the Air Force responded. See AR Tabs 64-67, 70-
73, 76, 77, 87-89, 93, 115-17. Based on these discussions, the offerors submitted their final
proposal revisions in May 2015. AR Tabs 95-110, 119-126. 8


       7
         [***] was a [***] with [***] and [***] as major subcontractors. AR 132-27928. [***]
had no partners or major subcontractors. Id. Innovative Test was a joint venture of Jacobs and
PAE, with ERC, HX5, Inc., and Erica Lane Enterprises as major subcontractors. Id. National
Aerospace was a joint venture of Bechtel National, Inc. (“Bechtel”), Sierra Lobo, Inc., and GP
Strategies. Id.
       8
         The Air Force initially closed discussions on April 22, 2015, following the fifth round of
evaluation notices and discussions. See AR Tab 95-96 (first final proposal revision requests).
However, the Air Force reopened discussions for a sixth round of evaluation notices on May 13,
2015, and then requested that the offerors submit a second final proposal revision for any matters
affected by the new discussions. See AR Tabs 119-20 (second final proposal revision requests).


                                                 7
        The Air Force gave the following ratings to the three remaining offerors based on the
final proposal revisions:

                              Innovative Test         National Aerospace        [***]
 TECHNICAL
   Technical Operations       Blue/Outstanding        Blue/Outstanding          Purple/Good
                              Low Risk                Low Risk                  Low Risk
    Management                Blue/Outstanding        Blue/Outstanding          Blue/Outstanding
    Approach                  Moderate Risk           Low Risk                  Low Risk
    Qualified Personnel       Blue/Outstanding        Blue/Outstanding          Purple/Good
                              Moderate Risk           Low Risk                  High Risk
   Innovations and            Green/Acceptable        Green/Acceptable          Green/Acceptable
   Efficiencies               Moderate Risk           Low Risk                  Moderate Risk
 PAST PERFORMANCE             Substantial             Substantial               Substantial
                              Confidence              Confidence                Confidence
 COST/PRICE                   $[***]                  $1,516,101,909            $[***]
 (Most Probable Cost)

AR 191-70135. Aside from the difference in the most probable cost calculations, the ratings for
Innovative Test and National Aerospace diverged only in the risk ratings for three of the
technical subfactors: Management Approach, Qualified Personnel, and Innovations and
Efficiencies. AR 191-70135. For these subfactors, Innovative Test received Moderate Risk
ratings and National Aerospace received Low Risk ratings. AR 191-70135.

         With regard to the Management Approach subfactor, Innovative Test was assigned a
weakness because of its proposed use of “standard production units” in performance
measurement. AR 132-28201 to -02; AR 133-29036. When Innovative Test’s initial offer
proposed reliance on standard production units, it did not define this term, which led the
government to ask for a definition. AR 62-19574. The government discussed this performance
measurement plan with Innovative Test in three of the evaluation notice rounds. AR 132-28201.
During this correspondence, Innovative Test explained that “standard production units” are
“fixed” factors, AR 72-20577, in a formula to determine “the work product actually produced for
[a] test . . . [which] allows the aggregate level of efficiency and labor productivity in that subset
to be measured as actual labor hours charged per [standard production unit] (work product)
delivered (labor cost factor).” AR 66-19928. After receiving more details about this
methodology, the Air Force remained concerned that the use of fixed standard production units
would not sufficiently account for variations in labor requirements over time and between testing
facilities. AR 132-28201 to -02; AR 133-29036.

        With regard to the Qualified Personnel subfactor, the Air Force assigned a weakness to
Innovative Test because it found there was a moderate risk of increased cost based on Innovative
Test’s Day One staffing plan. AR 132-28206; AR 133-29042 to -43. The Air Force determined
that Innovative Test’s proposed Day One savings—which were based primarily on plans to use
[***]—were not sufficiently supported. AR 132-28206. As a result, the Air Force also assessed



                                                  8
Innovative Test a most probable cost adjustment of $[***] million as part of the cost-price factor.
AR 132-28206.

         As noted supra, where an offeror did not use the government cost estimate as a basis for
its cost or net savings proposal, the Air Force treated any differences between the “Day One
Staffing” cost and the government estimate as additional “innovations and efficiencies”
evaluated through the Crystal Ball methodology. See AR 55-18556. Although the staffing cost
savings were treated as innovations and efficiencies for the purposes of the Crystal Ball
evaluation, some of the resulting most probable cost adjustments were considered weaknesses in
the Qualified Personnel subfactor, because the Day One savings were based on the proposed
staffing plan. AR 132-28206. For Innovative Test, the Air Force added “Day One” innovations
and efficiencies for Overhead, FY14/15 Productivity Gains, Work Scope Accounting, Embedded
Technology Management Approaches, and Innovations, because these represented areas where
Innovative Test’s Day One Staffing costs differed from the government estimate. See AR 132-
28384 to -99. After Innovative Test’s final proposal revision, the government agreed with the
cost savings proposed for most of these areas. AR 132-28403. However, the government
assigned Innovative Test most probable cost adjustments for Embedded Technology
Management Approaches ($[***] million) and FY 14/15 Productivity Gains ($[***] million).
AR 132-28403; see also AR 132-28392, -28399 (discussing the reasons for these adjustments).
These two adjustments totaled the most probable cost adjustment of $[***] million ascribed as a
weakness in the Qualified Personnel subfactor. AR 132-28206.

        Finally, for the Innovations and Efficiencies subfactor, the Air Force assessed that
Innovative Test’s cost savings were overstated because the proposed “[***]” was event-driven
rather than day-to-day. AR 132-28212. The government also determined that the proposed
savings from various Lean Six Sigma events Innovative Test intended to hold periodically “will
likely overlap [with other projects already contemplated in the government’s cost estimate] and
will not necessarily compound year-to-year.” AR 132-28212. In addition to a Technical Risk
weakness, the Air Force assessed Innovative Test an approximately $[***] million most
probable cost adjustment based on its “[***]” proposal. AR 132-28375.

        Based on a comparative analysis of these ratings and reviews by the evaluation teams, the
Council determined that the National Aerospace proposal represented the best value to the
government and recommended that the contract be awarded accordingly. AR 133-29050. On
June 4, 2015, the Source Selection Authority approved this recommendation and directed the
contract award to National Aerospace. AR 134-29073. The Air Force notified National
Aerospace and the unsuccessful offerors of the award on June 11, 2015. AR Tabs 138, 139.

                                         D. GAO Protest

       After the Air Force notified Innovative Test that National Aerospace had received the
contract, AR 138-29077, Innovative Test requested a debriefing from the contracting officer,
which it received on June 19, 2015. AR Tab 144. Innovative Test submitted several questions
following the debriefing, which the Air Force answered on June 22, 2015. AR Tabs 142, 147.
Innovative Test filed a protest with GAO on June 24, 2015. AR 148-29379. Performance of the




                                                9
newly awarded contract was suspended under the Competition in Contracting Act, 31 U.S.C.
§ 3553(d), during the pendency of the GAO protest. AR 148-29380; AR 152-29594.

        In its protest, Innovative Test challenged the Air Force’s evaluation of the technical, cost-
price, and past performance factors. AR 148-29392 to -405. Regarding the technical factor,
Innovative Test asserted that the weakness it was assigned in the Management Approach
subfactor for its use of standard production units for performance measurement was based on
“factually incorrect” information and a misunderstanding of Innovative Test’s proposal. AR
148-29393. Innovative Test also argued that the Air Force incorrectly determined there was a
risk that its staffing plan would not lead to the proposed Day One cost savings. AR 148-29395.
Correlatively, Innovative Test contended that the government unreasonably assigned a weakness
in the Innovations and Efficiencies subfactor based on potential overlap with government
programs, because the government never disclosed the full “details” of its independent cost
estimate to offerors, and therefore Innovative Test could not have accounted for these programs.
AR 148-29395. 9 And, Innovative Test argued that by assigning a weakness in the Qualified
Personnel and Innovations and Efficiencies subfactors based on the related most probable cost
adjustments, the government was in effect double-penalizing Innovative Test, because these
adjustments were also a consideration in the cost-price factor. AR 148-29395.

        Respecting the cost-realism analysis in the cost-price factor, Innovative Test argued that
the Air Force failed to “meaningfully account for [Innovative Test’s] proposed innovations and
efficiencies.” AR 148-29404. Innovative Test asserted that the Air Force “mechanically
compared [Innovative Test’s] proposed costs to a government cost estimate,” without evaluating
Innovative Test’s proposed cost saving initiatives in the context of its demonstrated success
under the OMIMS contract. AR 148-29404 to -05. Innovative Test contended that this
“mechanical application” led to misleading and unequal discussions that forced Innovative Test
to raise its proposed price by over $[***] million to eliminate perceived weaknesses in its
Technical Risk ratings. AR 148-29405 to -06. 10

         Innovative Test contested the Air Force’s evaluation of the past performance factor,
asserting that it was unreasonable for Innovative Test, the “incumbent contractor” under the
OMIMS contract, to be rated at the same confidence level (Substantial Confidence) as National
Aerospace. AR 148-29398. Innovative Test argued that “Bechtel, the managing partner of the
[National Aerospace] team, does not have significant current or recent experience involving test
facilities similar to those at [Arnold Engineering Development Complex].” AR 148-29398. It


       9
         Innovative Test also argued that by using the government cost estimate to evaluate its
proposed innovations and efficiencies, the Air Force applied “unstated evaluation criteria” in
violation of Federal Acquisition Regulations, 48 C.F.R. (“FAR”) §§ 15.305(a), 15.308, and
15.404(d). AR 148-29396 to -97.
       10
         Innovative Test also argued that misleading discussions also caused the Air Force to
evaluate Innovative Test and National Aerospace unequally, since there was no evidence that
National Aerospace was similarly “forced” to drop their cost saving proposals to avoid
weaknesses in Technical Risk ratings. AR 148-29407 to -08.



                                                 10
asserted that the evaluation disproportionately credited GP Strategies and Sierra Lobo with
relevant past performance, given the minor scope and magnitude of their work on similar
contracts. AR 148-29401 to -02. In particular, Innovative Test noted that GP Strategies’
contribution to the ATA joint venture only accounted for approximately five percent of the work
under the OMIMS contract, and yet the Air Force appeared to have given GP Strategies the same
amount of credit for that effort as the other ATA participants, Jacobs and PAE (which were
proposed as partners in Innovative Test). AR 148-29402.

         Finally, Innovative Test asserted that, based on all its foregoing protest grounds, the Air
Force’s best value determination was flawed. AR 148-29412. It argued that the “tradeoff
decision” was based on inappropriate ratings and an inaccurate most probable cost estimate. AR
148-29412. Innovative Test also contended that the Air Force did not adequately document or
justify its decision to award the contract to National Aerospace, given that National Aerospace’s
most probable cost estimate was approximately $[***] million higher than Innovative Test’s.
AR 148-29413 to -414. 11

        GAO issued its decision under seal on October 2, 2015. AR Tab 183. 12 GAO found that
the Air Force’s evaluations of the Qualified Personnel and Innovations and Efficiencies
subfactors of the technical factor were unreasonable because the weaknesses identified for these
subfactors were “cost risk[s]” rather than “technical risk[s],” and therefore should only have been
accounted for within the cost-price factor evaluation. AR 183-68856 to -60. GAO also found
that these errors caused prejudice to Innovative Test in the Air Force’s overall “cost/technical
tradeoff decision.” AR 183-68860. Accordingly, GAO recommended that the Air Force
“reevaluate [Innovative Test’s] technical proposal risk and, based on that reevaluation, make a
new source selection determination.” AR 183-68868. GAO denied all other grounds of
Innovative Test’s protest, including its assertion that the evaluation of the Management
Approach subfactor was unreasonable. AR 183-68854.

                            E. The Air Force’s Reevaluation of Proposals

        Following GAO’s decision, the Air Force promptly undertook corrective action. AR Tab
184; see also Prelim. Inj. Hr’g Tr. 16:24-25, 17:1-12 (Nov. 2. 2015), ECF No. 34 (discussing the
status of the corrective action as of that date). The reevaluation was limited to the Technical
Risk ratings in the Qualified Personnel and Innovation and Efficiencies subfactors using “[a]
combination of experienced and new evaluators, and newly assigned subfactor chiefs.” AR 190-
69000; see also AR 192-70243. The new source selection decision would be based on these
reevaluated subfactors in conjunction with all other areas of the evaluation “as initially
evaluated.” AR 190-69000; AR 192-70243; see also AR 131-27779 (showing the pre-protest


        11
         Innovative Test also asserted that National Aerospace possessed an “unmitigated”
organizational conflict of interest. AR 148-29408 to -11. This issue was not raised in the protest
before this court.
        12
             To the court’s knowledge, GAO’s decision has not yet been made public in redacted
form.



                                                 11
source selection organization), AR 191-70128 (showing the post-protest source selection
organization). In effect, the Air Force’s corrective action drew heavily on its prior analysis and
determinations. Along those lines, four days after GAO rendered its decision, on October 6,
2015, the chair of the previous Board sent the following e-mail to the chair of the Council,
commenting that “more detail” was needed to support the Air Force’s analysis:

       It was mentioned yesterday within the [Source Selection Evaluation Board]
       during our assessment of where we stand that the [Test Operations and
       Sustainment contract comparative analysis report prepared by the Council] could
       have had more detail provided and a stronger foundation set. I will defer to legal
       and contracting on their assessments. If this is the case, now is the time to ensure
       the content is more robust on those areas that are not being protested. The theme
       we have pushed is that the [National Aerospace] proposal was so technically
       superior, that it was the preferred proposal overall. The question is whether that is
       sufficiently captured in the [comparative analysis report]. If the consensus is no,
       then now is the time for the [Council to] start building upon the foundation of the
       [comparative analysis report] and not 30 days from now.

AR 184-68869 (emphasis added).

       The Air Force completed its reevaluation on November 5, 2015, a month later,
maintaining the award to National Aerospace. AR 185-68887. The reevaluation resulted in the
following ratings for the three offerors:

                              Innovative Test         National Aerospace       [***]
 TECHNICAL
   Technical Operations       Blue/Outstanding        Blue/Outstanding         Purple/Good
                              Low Risk                Low Risk                 Low Risk
    Management                Blue/Outstanding        Blue/Outstanding         Blue/Outstanding
    Approach                  Moderate Risk           Low Risk                 Low Risk
    Qualified Personnel       Blue/Outstanding        Blue/Outstanding         Purple/Good
                              Low Risk                Low Risk                 Moderate Risk
   Innovations and            Green/Acceptable        Green/Acceptable         Green/Acceptable
   Efficiencies               Low Risk                Low Risk                 Moderate Risk
 PAST PERFORMANCE             Substantial             Substantial              Substantial
                              Confidence              Confidence               Confidence
 COST/PRICE                   $[***]                  $1,516,101,909           $[***]
 (Most Probable Cost)

AR 191-70136. The government improved Innovative Test’s Technical Risk rating for the
Qualified Personnel and Innovations and Efficiencies subfactors, shifting those ratings from
Moderate Risk to Low Risk. AR 190-69310, -14. 13 The Air Force removed the weaknesses in

       13
         The Air Force also improved [***]’s Technical Risk rating in the Qualified Personnel
subfactor from High Risk to Moderate Risk. AR 190-69159.



                                                 12
these subfactors related to Innovative Test’s statement of proposed cost savings, but kept one
weakness in the Innovations and Efficiencies subfactor based on its proposed “[***],” stating
that Innovative Test “has not proposed sufficient mitigations to address the risk of failure to
adequately engage the [Innovative Test] workforce in the identification and effective deployment
of continuous process improvements.” AR 190-69320.

        Overall, the Council concluded that “[t]he [National Aerospace] proposal provided a
stronger approach to technical operations, a more effective and efficient management approach,
and the most comprehensive knowledge of the qualified personnel requirements and associated
challenges.” AR 192-70262. The Council also noted that, given the fact that the solicitation
specified that the technical and past performance factors were “significantly more important”
than the cost-price factor, National Aerospace’s “technically superior proposal . . . far
outweighed the [***] percent cost difference between [National Aerospace’s] and [Innovative
Test’s most probable cost], and represented the best value to the [g]overnment.” AR 192-70263.
The Source Selection Authority concurred with this assessment. AR 192-70264 to -66.

                                        F. Protest in This Court

        On October 30, 2015, while the reevaluation was underway, Innovative Test filed its
protest in this court, claiming that the Air Force’s corrective action was inherently arbitrary and
inadequate because it would not address all the grounds raised in Innovative Test’s GAO protest.
Compl. at 1. Innovative Test submitted an application for a temporary restraining order and a
motion for preliminary injunction on the same date. Pl.’s Mot. for Prelim. Inj., ECF No. 2;
Pl.’s Appl. for TRO, ECF No. 4. After a hearing on November 2, 2015, the court denied the
application for a temporary restraining order for a lack of immediate harm, and suspended action
on the motion for a preliminary injunction pending completion of the corrective action. Order of
Nov. 2, 2015, ECF No. 15; Order of Nov. 2, 2015, ECF No. 16. The court also granted National
Aerospace’s motion to intervene in the case. Order of Nov. 2, 2015, ECF No. 13.

        The corrective action was completed, and, during a status conference on December 3,
2015, the court set a briefing schedule to address Innovative Test’s renewed protest regarding the
Air Force’s corrective action, providing for the parties’ cross motions for judgment on the
administrative record. Scheduling Order (Dec. 3, 2015), ECF No. 41. The government filed the
administrative record on December 10, 2015, ECF No. 44, and Innovative Test filed its amended
complaint on December 18, 2015, ECF No. 47. 14 Innovative Test asked the court to “enter a
permanent injunction directing the Air Force to appoint a new evaluation team and Source
Selection Authority . . . and take corrective action that fairly and adequately addresses the
evaluation flaws identified herein.” Am. Compl. at 2.

        In its amended complaint, Innovative Test claims that the Air Force “breached its implied
duty to fairly and honestly consider [Innovative Test’s] proposal,” alleging that the Air Force’s
revaluation “was focused on preserving the original award decision.” Am. Compl. ¶¶ 48-57.


          14
               The government filed a corrected administrative record on December 21, 2015, ECF
No. 48.



                                                   13
Innovative Test also alleges that the corrective action was inherently arbitrary and inadequate
because it did not address the alleged flaws in the evaluation of the cost-price factor, which was
in turn affected by the allegedly erroneous cost-realism analysis of the Innovations and
Efficiencies cost savings. Am. Compl. ¶¶ 59-153. 15 Innovative Test further contends that the
corrective action did not rectify the Air Force’s “flawed evaluation” of the technical factor
because there was no reevaluation of the Management Approach subfactor (GAO had denied this
protest ground), and because its reevaluation of the Qualified Personnel and Innovations and
Efficiencies subfactors did not go far enough to rectify the effect that the Air Force’s original
evaluation had on other aspects of the evaluation, including the most probable cost estimate.
Am. Compl. ¶¶ 155-85. Finally, Innovative Test argues that the reevaluation did not correct the
“materially flawed” evaluation of the past performance factor, both because GP Strategies was
still given “full credit” for the OMIMS contract performance, and because Innovative Test and
National Aerospace received the same confidence rating, despite the fact that Innovative Test
had stronger ratings overall on its references. Am. Compl. ¶¶ 187-201. As a result of these
alleged flaws in the evaluation (and reevaluation) process, Innovative Test claims that the Air
Force’s best-value determination was arbitrary and unjustified, prejudicing Innovative Test from
receiving the contract award. Am. Compl. ¶¶ 203-15.

        The parties’ cross motions for judgment on the administrative record have been fully
briefed and were addressed at a hearing on February 2, 2016. The motions are now ready for
disposition.

                                         JURISDICTION

        Pursuant to the Tucker Act, this court has jurisdiction to “render judgment on an action
by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a
proposed contract or to a proposed award or the award of a contract or any alleged violation of
statute or regulation in connection with a procurement or a proposed procurement.” 28
U.S.C. § 1491(b)(1), added by the Administrative Dispute Resolution Act (“ADRA”), Pub. L.


       15
          With regard to the cost-price factor, Innovative Test’s amended complaint focuses on
changes the Air Force made to Innovative Test’s proposed price based on the Air Force’s most
probable cost analysis. Innovative Test claims that without the Air Force’s flawed adjustments,
its most probable cost would have been $[***] versus $[***], which would equate to a cost
savings of approximately $[***] million compared to National Aerospace ($1,516,101,909),
rather than the assessed savings of approximately $[***] million. Am. Compl. ¶¶ 60-61. The
amended complaint did not explicitly reassert Innovative Test’s argument before GAO that the
Air Force’s misleading discussions caused Innovative Test to increase their proposed price by
over $[***] million to avoid lowered Technical Risk ratings, nor is this argument explicitly raised
in Innovative Test’s motion for judgment on the administrative record. See AR 148-29405 to -
06. Innovative Test did allude to the fact that the flawed cost-realism analysis led to misleading
discussions, which in turn caused “unquestionable harm” to Innovative Test. See, e.g., Am.
Compl. ¶ 82 (“The [Air Force’s] robotic dependence on the inherently arbitrary Crystal Ball
outputs (and its subsequent direction to [Innovative Test] to come in line with the arbitrary
estimates in order to eliminate technical risk assessments) resulted in misleading discussions and
unquestionable harm to [Innovative Test].”).


                                                 14
No. 104-320, § 12, 110 Stat. 3870, 3874 (Oct. 19, 1996); see also Systems Application & Techs.,
Inc. v. United States, 691 F.3d 1374, 1380-81 (Fed. Cir. 2012). The court thus has jurisdiction to
“determine if the corrective action taken by a procuring agency as a result of a bid protest was
reasonable under the circumstances.” Sheridan Corp. v. United States, 95 Fed. Cl. 141, 151
(2010) (quoting Centech Grp., Inc. v. United States, 78 Fed. Cl. 496, 506 (2007)); see also
Systems Application, 691 F.3d at 1381 (commenting that the court can review an agency’s
corrective action or proposed corrective action “even when such action is not fully
implemented”). Accordingly, the court has jurisdiction over the present case.

                                STANDARDS FOR DECISION

        The Administrative Procedure Act (“APA”), specifically 5 U.S.C. § 706, governs the
court’s review of an agency’s contract award. 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.”). A court may set aside an agency decision that was
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A). The arbitrary and capricious standard is highly deferential, see Advanced Data
Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000), and the court may not
“substitute its judgment for that of the agency,” Keeton Corrs., Inc. v. United States, 59 Fed. Cl.
753, 755 (2004) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416
(1971), abrogated in part by Califano v. Sanders, 430 U.S. 99, 105 (1977)).

        Notwithstanding this deferential standard, the court may set aside a procurement action if
“(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 1324, 1332 (Fed. Cir. 2001). The “agency must examine the relevant
data and articulate a satisfactory explanation for its action including a ‘rational connection
between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)). An agency’s decision lacks a rational basis, and is therefore arbitrary and
capricious, when the agency “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 [the
decision] is so implausible that it could not be ascribed to a difference in view or the product of
agency expertise.” Alabama Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372,
1375 (Fed. Cir. 2009) (quoting State Farm, 463 U.S. at 43); see also Keeton Corrs., 59 Fed. Cl.
at 755.

                                           ANALYSIS

          A. Duty to Fairly and Honestly Consider Innovative Test’s Proposal During
                                        the Reevaluation

        In its motion for judgment on the administrative record, Innovative Test first argues that
the government breached its implied duty to fairly and honestly consider Innovative Test’s
proposal during the reevaluation because the Air Force was instead “focused on preserving the
original contract award.” Pl.’s Mot. at 15. As evidence of this, Innovative Test points to the



                                                15
discrepancy between the post-reevaluation source selection document, which states that National
Aerospace’s proposal was “significantly more advantageous” than Innovative Test’s proposal,
and the original document, which stated that National Aerospace’s proposal was “moderately
more advantageous.” Pl.’s Mot. at 15 (citing AR 134-29072 (emphasis added)). Innovative Test
argues that the wording change from “significantly” to “moderately” suggests the perceived gap
between the proposals actually widened, despite the fact that Innovative Test’s ratings improved
on reevaluation. Pl.’s Mot. at 15. Innovative Test also argues that the e-mail sent by the former
chair of the Board to the chair of the Council at the outset of the reevaluation establishes that the
Air Force had already decided to maintain the award to National Aerospace, and was merely
concerned with “beefing up” its original justification. Pl.’s Mot. at 15-16 (citing AR 184-68869,
quoted supra, at 12). Innovative Test points to the revised Source Selection Decision Document
as evidence that the Council and the Source Selection Authority focused on adding language to
the original selection document to bolster the rationale for selecting National Aerospace rather
than fairly and honestly considering the procurement decision afresh as GAO had recommended.
Pl.’s Reply Br. in Support of Pl.’s Mot. (“Pl.’s Reply”) at 9-11, ECF No. 60 (citing various
passages in AR Tab 192); Hr’g Tr. 16:9-19, 19:11 to 25:1 (Feb. 2, 2016), ECF No. 65. As a
result, Innovative Test asserts there was no true reevaluation within “the spirit and intent of the
Competition in Contracting Act.” Pl.’s Mot. at 17.

         Both the government and National Aerospace equate Innovative Test’s arguments with a
claim that the government acted in bad faith. See Def.’s Reply Br. in Support of Def.’s Mot.
(“Def.’s Reply”) at 3, ECF No. 61 (“This is clearly a contention that the Air Force acted in bad
faith.”); see also Def.’s Resp. in Opp’n to Pl.’s Mot. & Def.’s Cross-Mot. for Judgment on the
Admin. Record (“Def.’s Cross-Mot.”) at 21, ECF 56 (citing Bannum, Inc. v. United States, 119
Fed. Cl. 291, 302 (2014) (stating the presumption that the government acts in good faith)), aff’d,
616 Fed. Appx. 420 (Fed. Cir. 2015); Def.-Intervenor’s Cross-Mot. for Judgment on the Admin.
Record & Resp. to Pl.’s Mot. (“Def.-Interv.’s Cross-Mot.”) at 13, ECF No. 57 (“[Plaintiff’s
allegation regarding the reevaluation] is, in essence, an allegation of bad faith on the part of [Air
Force] personnel.”). In doing so, the defendants suggest that a breach of the implied duty to
fairly and honestly consider a proposal is not a cognizable separate protest ground within this
court’s jurisdiction. See Def.’s Reply at 3-4 (arguing that one of plaintiff’s cited cases, Abcon
Associates, Inc. v. United States, 49 Fed. Cl. 678, 688 (2001), is “completely inapposite because
it deals with a claim of breach of the implied duty of good faith and fair dealing . . . which only
applies to post-contractual behavior.”).

          As a threshold matter, defendants err in their statement of the law applicable to this claim
by Innovative Test. The court has jurisdiction to consider a claim of breach of the implied duty
to fairly and honestly consider a proposal in the context of a post-award bid protest. See Systems
Application, 691 F.3d at 1382-83 (“[T]here is an implied contract that the procurement process
will be conducted fairly and honestly.” (citing United States v. John C. Grimberg Co., 702 F.2d
1362, 1367 (Fed. Cir. 1983) (en banc))); see also J.C.N. Constr., Inc. v. United States, 107 Fed.
Cl. 503, 515-16 (2012) (rejecting the government’s contention that the “implied-in-fact contract
of fair and honest consideration under 28 U.S.C. § 1491(a) did not survive the passage of the
Administrative Dispute Resolution Act . . . for cases in which Section 1491(b) jurisdiction exists
[i.e., a bid protest action]”); Castle-Rose, Inc. v. United States, 99 Fed. Cl. 517, 531 (2011)
(interpreting text of 28 U.S.C. § 1491(b) to provide that a protester in a bid protest action can



                                                 16
bring a claim for contravention of an implied covenant of fair and honest consideration);
Bilfinger Berger AG Sede Secondaria Italiana v. United States, 97 Fed. Cl. 96, 151-52 (2010)
(“[A] protestor may challenge arbitrary and capricious conduct based upon an implied-in-fact
contract to consider bids fairly . . . as part of a procurement protest in which Tucker Act
jurisdiction is based upon 28 U.S.C. § 1491(b)(1).”); cf. L-3 Commc’ns Integrated Sys., LP v.
United States, 94 Fed. Cl. 394, 398 (2010) (applying the implied-in-fact contract in addressing
bid protests jurisdictionally arising under Subsection 1491(a) rather than Subsection 1491(b)).
But see Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 693 (2010) (stating that the
implied contract theory was abrogated by the ADRA); Metro Van & Storage Co. v. United
States, 92 Fed. Cl. 232, 249-50 n.7 (2010) (same). Such a claim is separate and distinct from a
claim that the government acted in bad faith. Importantly, “uneven treatment goes against
standard of equality and fair-play that is a necessary underpinning of the federal government’s
procurement process and amounts to an abuse of the agency’s discretion.” PGBA, LLC v. United
States, 60 Fed. Cl. 196, 207, aff’d, 389 F.3d 1219 (Fed. Cir. 2004).

        The standard applied by the court to a claim that the government has breached its duty to
fairly and honestly consider a proposal is the same “arbitrary and capricious” standard applied to
other protest grounds under the APA. See Southfork Sys., Inc. v. United States, 141 F.3d 1124,
1132 (Fed. Cir. 1998) (“The ultimate standard for determining whether an unsuccessful bidder is
entitled to relief on the ground that the government breached the implied-in-fact contract to
consider all bids fairly and honestly is whether the government’s conduct was arbitrary and
capricious.”); Castle-Rose, 99 Fed. Cl. at 531 (“To recover under the implied covenant for bids
to be fairly and honestly considered, a plaintiff has to establish arbitrary and capricious action by
the government.” (citing Keco Indus., Inc. v. United States, 492 F.2d 1200, 1203-04 (Ct. Cl.
1974))).

        In this case, the record provides enough evidence to raise skepticism about the
government’s treatment of Innovative Test’s proposal on reevaluation. In particular, the e-mail
from the pre-reevaluation chair of the Board provides direct evidence of an intent at the outset of
the corrective action to further justify the decision to award the contract to National Aerospace.
And, the revised Source Selection Decision Document, which preserves much of the language of
the original document even for the reevaluated factors, also raises the possibility that the Air
Force did not truly reevaluate the proposals, but instead made revisions only insofar as to provide
further justification for its award to National Aerospace. The question for the court, however, is
whether these aspects of the evaluation process establish that the government’s award decision
was motivated by an irrational, pre-determined outcome in favor of National Aerospace, without
regard to any reevaluation of Innovative Test’s proposal. The court concludes that they do not.

        Significantly, the Board member’s e-mail advocated “ensur[ing] the content is more
robust on those areas that are not being protested.” AR 184-68869 (emphasis added). And, the
Council’s commentary in the revised Source Selection Decision Document included additional
descriptions of National Aerospace’s relative advantages in the Technical Operations and
Management Approach subfactors, which were not part of the reevaluation. AR 192-70249,
-252. It also included more discussion of National Aerospace’s relative advantages in the
Qualified Personnel and Innovations and Efficiencies subfactors, which were part of the




                                                 17
reevaluation, plus a more detailed explanation of the Council’s rationale in the overall
comparison of offerors for the technical factor. AR 192-70255, -70257 to -58. 16

        Although the four subfactors were rated separately, they all formed the basis for the
government’s overall evaluation of the technical factor. See AR 35-14475 (“Within the
[t]echnical [f]actor, all of the subfactors are of equal importance.”); AR 35-14476 (explaining
that the subfactor ratings would not be “rolled up” into overall Technical or Technical Risk
ratings). As a result, the court cannot conclude that it was irrational or unreasonable for the
Council or the Source Selection Authority to include in the Source Selection Document more
analysis of the relative strengths and weaknesses of the offerors in these subfactors, as well as
the impact that these strengths and weaknesses had on the overall cost-technical tradeoff
analysis. All of the discussion in the revised Source Selection Decision Document is reasonably
supported by the evaluators’ comments, as summarized by the Board, during either the original
evaluations (for the subfactors not being reconsidered) or the reevaluation. See AR 132-28160 to
-202 (original evaluation comments for Innovative Test on the Technical Operations and
Management Approach subfactors), AR 132-28408 to -56 (original evaluation comments for
National Aerospace on the Technical Operations and Management Approach subfactors), AR
190-69310 to -321 (reevaluation comments for Innovative Test on the Qualified Personnel and
Management Approach subfactors), AR 190-69565 to -76 (reevaluation comments for National
Aerospace on the Qualified Personnel and Management Approach subfactors). In sum, the
resulting Source Selection Decision Document does not show that the government acted in
contravention of applicable statutes and regulations to maintain the award to National Aerospace
irrespective of the reevaluation of Innovative Test’s proposal.

        The court thus concludes that the Air Force’s award decision on reevaluation, as reflected
in the Source Selection Decision Document, is rationally based on the reevaluation itself, and
was not the result of a pre-determined effort to maintain the original award to National
Aerospace. The court finds that the government did not breach its duty to fairly and honestly
consider Innovative Test’s proposal.

                                    B. Technical Evaluations

       Innovative Test advances two main arguments regarding the Air Force’s evaluation of the
technical factor: (1) that the reevaluation was inherently flawed because it did not address the
Management Approach subfactor, and (2) the reevaluation of the Innovations and Efficiencies
subfactor was improper. Pl.’s Mot. at 45-58. 17


       16
        The revised Source Selection Decision Document also included expanded
determinations respecting the impact of the evaluation of the technical factor on the
government’s cost/technical tradeoff decision. AR 192-70262 to -63, -70266.
       17
         Innovative Test also generally alleges that the reevaluation of the Qualified Personnel
and Innovations and Efficiencies subfactors was “inadequate” because it “[did] not remediate
the impact that its original, flawed evaluation under these subfactors . . . had on the Air Force’s
cost evaluation and its discussions with offerors.” Pl.’s Mot. at 53-54; see also Am. Compl. at
¶¶ 177-79. Innovative Test does not elaborate on this argument, and the court will not separately


                                                18
       1. Original evaluation of the Management Approach subfactor.

       Innovative Test asserts that GAO should have sustained its protest with regard to the
Management Approach subfactor because of alleged flaws in the original evaluation. Pl.’s Mot.
at 47-51. Alternatively, as Innovative Test would have it, even though GAO did not rule in its
favor on this protest ground, the Air Force should nevertheless have included the Management
Approach subfactor in the reevaluation because the Air Force was on notice of the pertinent
flaws. Id. at 51. Innovative Test’s concerns with this subfactor’s evaluation focus on a
weakness that the Air Force assigned to Innovative Test based on its proposed use of standard
production units as a way of measuring performance at the various test sites within the Arnold
Engineering Development Complex. AR 132-28201 to -02; AR 133-29036.

        The standard-production-unit methodology proposed by Innovative Test was intended to
allow contract management to adjust the “staffing level and workload mix” over time at the
various test sites and facilities. AR 66-19928. In essence, the standard production unit provided
a uniform coefficient by which the labor hours and productivity at each test site and facility
would be measured as a “contract workload ratio.” AR 66-19931. The Air Force ideally could
then adjust the staffing at the various test sites and facilities to create the greatest manpower
efficiency. AR 66-19931. According to Innovative Test, this process was used by ATA under
the OMIMS contract, as well as by its constituent firms (and their predecessors) at similar sites
over the past 19 years, with measureable increases in efficiency. AR 66-19928 to -29. 18

        Innovative Test argues that, by assigning it a weakness in this subfactor, the Air Force
subjected Innovative Test to an “unstated evaluation criterion” because the Air Force had
separately determined that Innovative Test had satisfied the “Performance Measurement”
criterion. Pl.’s Mot. at 48. Innovative Test also contends that the Air Force arbitrarily rejected
its mitigation strategy, including its offer to meet with the Air Force each year to re-baseline the
standard production units. Id. at 48-50. Finally, Innovative Test argues that the Air Force could
not reasonably consider the use of standard production units to be a weakness when the Air
Force currently uses this performance-measurement methodology. Id. at 50-51.

         From the beginning of the evaluation process, the Air Force raised concerns about
Innovative Test’s proposed performance-measurement methodology and notified Innovative Test
that it was considered a weakness. In the first round of evaluation notices, the Air Force asked
Innovative Test to further define the standard-production-unit methodology because it was “not
clear” that it met the performance work statement’s requirements. AR 62-19574. In the second
round of evaluation notices, the Air Force again indicated that Innovative Test had not clearly


address it apart from the contentions respecting the Air Force’s technical reevaluation of the cost
realism and cost-price factors.
       18
           In Innovative Test’s final proposal, it described how the use of standard production
units would take account of the varied test schedules and output of each of the 19 different types
of facilities at the Arnold Engineering Development Complex. See AR 183-68855. Innovative
Test acknowledged that the production coefficients involved had “some degree of subjectivity”
even though they were “based on decades of experience.” Id.


                                                 19
defined “standard production unit” or how such units “can be used to account for variation in
workload.” AR 68-20504. By the third round of evaluation notices, Innovative Test had
adequately defined this methodology, but the Air Force stated that the use of standard production
units would “increase the risk to the [g]overnment’s ability to objectively measure cost savings
and changes in productivity” because of “[t]he complexity of this measurement approach . . . and
the lack of specificity in its implementation.” AR 74-20724. The Air Force also stated that
“[t]hese metrics are not [o]bjective as they require subjective judgments.” AR 74-20724. The
evaluation notice stated that this methodology was “now classified as a ‘[w]eakness’” in
Innovative Test’s proposal, and requested that Innovative Test submit additional risk mitigation
strategies. AR 74-20724.

         Although Innovative Test offered to take additional steps to address the Air Force’s
concerns, including meeting with the government during the contract phase-in period and on an
annual basis thereafter to adjust the standard-production-unit coefficients as needed, AR 101-
23073, the Air Force still considered this approach a weakness in its final evaluation, AR 132-
28201 to -02. The Air Force noted that the standard production units did not adequately account
for differing labor requirements during non-operational phases of tests, especially longer tests,
which under Innovative Test’s methodology would “appear more productive than short tests
without any real change in productivity being achieved.” AR 132-28201 to -02. In this regard,
the Air Force concluded that Innovative Test had not shown how its offer to re-baseline the
standard production units each year would mitigate the ongoing disparity between long and short
tests of different kinds, particularly during non-operational phases. The government has offered
a plausible explanation for its decision that does not “run[] counter to the evidence before the
agency.” See Alabama Aircraft, 586 F.3d at 1375. 19

        The court also cannot accept Innovative Test’s assertion that, under the Air Force’s
evaluation criteria, it was “bizarre[]” for Innovative Test to receive anything other than a “Low”
Technical Risk rating for the Management Approach subfactor, because the Air Force had
separately determined that Innovative Test met all the technical requirements (measures of merit)
of the subfactor. Pl.’s Mot. at 47-48 (citing AR 192-70250). The Technical rating and the
Technical Risk ratings for each subfactor represented separate and distinct assessments of the
offerors’ proposals. The Technical rating represented “the quality of the offeror’s solution for
meeting the [g]overnment’s requirement.” AR 35-14475. In contrast, the Technical Risk rating
was derived through the “identification of weakness(es)” based on the “potential for disruption
of schedule, increased costs, or degradation of performance, the need for increased [g]overnment


       19
          Innovative Test notes that “in its evaluation of other offerors, the Air Force recognized
that the opportunity to re-baseline through bilateral discussions is an effective risk mitigation
strategy that improves the offerors’ ability to establish objective, meaningful performance
metrics.” Pl.’s Mot. at 49. This may be so, but the question here is whether annual re-baselining
of the standard-production-unit coefficients was an effective mitigation strategy for the concerns
raised by the Air Force with Innovative Test’s proposal. Since neither National Aerospace nor
[***] was proposing to use standard production units in its performance metrics, the fact that the
Air Force determined that their “re-baselining” proposals were effective reflects different
methodologies and different considerations.



                                                20
oversight, or the likelihood of unsuccessful contract performance.” AR 35-14476. Under this
evaluation scheme, it was not irrational for an offeror to receive, as Innovative Test did, a
Blue/Outstanding Technical rating based on the overall quality of its proposal, but a Moderate
Technical Risk rating because of a weakness identified by the government that raises the
potential for less than satisfactory performance during the contract’s term. 20 The Air Force did
not apply an unstated evaluation criterion, but instead rationally analyzed the proposal for
weaknesses. Therefore, Innovative Test’s assertions that the Air Force’s ratings were arbitrary
or that it applied an “unstated evaluation criterion” to Innovative Test’s proposal are unavailing.

          Similarly unpersuasive is Innovative Test’s argument that it was unreasonable for the
Air Force to consider the use of standard production units to be a weakness when the Air Force
already employs this methodology at Arnold Engineering Development Complex. Although
Innovative Test asserts that standard production units were used for performance measurement
under the OMIMS contract, AR 66-19928 to -29, it does not follow that this methodology lacks
any weaknesses, or that the Air Force could not reasonably have concerns about its continued use
under the new contract. Innovative Test points to an August 2014 briefing by an Air Force
officer at the complex, stating that standard production units were used in fiscal year 2013 as a
“stable approach for comparison of the different facilities in [the] absence of an absolute
capacity.” Pl.’s Mot. at 50-51 (citing AR 169-68777). That officer’s comment is relevant, but
does not by itself show that the Air Force could not reasonably have concerns about this
methodology’s use.

        In sum, Innovative Test has failed to show that the Air Force’s original evaluation of the
Management Approach subfactor was arbitrary or capricious, or that the assignment of a
Moderate Technical Risk rating to Innovative Test’s proposal regarding that subfactor lacked a
rational basis.

       2. Reevaluation of the Innovations and Efficiencies subfactor.

       Innovative Test contends that the Air Force’s technical reevaluation of the Innovations
and Efficiencies subfactor was also flawed. Specifically, Innovative Test argues that the Air
Force arbitrarily failed on reevaluation to remove a weakness it was assigned under the
Innovations and Efficiencies subfactor, even though its Technical Risk rating for this subfactor
was improved from Moderate to Low. Pl.’s Mot. at 50-52. Innovative Test also notes that
National Aerospace proposed a similar “innovation” involving process improvements achieved
through the Lean Six Sigma program, but was not assigned a weakness in the final evaluation,
which Innovative Test asserts is “a classic case of disparate treatment.” Pl.’s Mot. at 53.




       20
          The RFP evaluation criteria (Section M) also distinguish between “deficiencies,” which
are part of the Technical rating, and “weaknesses,” which are part of the Technical Risk rating.
AR 35-14476 to -77. A proposal with no deficiencies would meet the subfactor’s requirements,
but it might still have weaknesses that could adversely affect the Technical Risk rating. AR 35-
14476 to -77. The court accepts that the two ratings arguably should have a close correlation,
but that is not the same as mandating that they should be identical.


                                                21
         The weakness in question is based on Innovation and Efficiency #22 proposed by
Innovative Test, titled “[***].” AR 132-28211. Innovative Test proposed to “inject the desired
cultural attributes necessary to achieve the [Arnold Engineering Development Complex’s] 2024
Vision into their employees” through various training and enrichment programs. AR 132-28211.
Innovative Test also stated that these programs would lead to measureable cost savings. AR
132-28211. In its original evaluation, the Air Force assigned Innovative Test a weakness for this
innovation based on the risk it would not achieve the asserted cost savings. AR 132-28212.
GAO found that this weakness was inappropriate because it concerned a “cost risk” rather than a
“technical risk,” and should only have been addressed within the cost-price factor evaluation.
AR 183-68858 to -60. On reevaluation, the Air Force still assigned Innovative Test a weakness
for Innovation and Efficiency #22, but on a basis not related to cost savings. AR 190-69320.
Specifically, the Air Force determined there was a risk that the proposed qualitative improve-
ment under the “[***]” would not be realized due to insufficient workforce engagement and a
lack of continuous process improvements. AR 190-69320. Innovative Test identified these risks
in its proposal, but proposed a mitigation strategy to address them; the Air Force determined that
this mitigation strategy was insufficient. AR 190-69320.

        To start, Innovative Test mischaracterizes the weakness assigned to it on reevaluation as
the same weakness that GAO “deemed to be ‘improper.’” Pl.’s Mot. at 51-52 (quoting AR 183-
68859). Although the weakness related to the same Innovation and Efficiency (#22), the basis
for the reevaluated weakness was not the risk to achieving the proposed cost savings, which is
what GAO specifically found to be improper in the original evaluation. Rather, the Air Force
determined there was a risk that the proposed efficiency would not lead to the asserted
qualitative improvements in the workforce’s culture. The technical evaluation of the Innovations
and Efficiencies subfactor was intended to assess both cost savings and “qualitative
improvements” to the requirements in the performance work statement. AR 35-14480.
Although GAO correctly determined that under this scheme, Innovative Test was double
penalized for its cost savings risks in both the technical and cost-price factors, it does not follow
that a weakness assigned regarding qualitative improvement is likewise improper.

         Innovative Test’s own final proposal revision identified risks associated with its “[***]”
proposal, including “failure to adequately engage the [Innovative Test] workforce and key
stakeholders” and “failure to effectively build trust and transparency by [Innovative Test]
leadership.” AR 122-26369. Although Innovative Test proposed strategies to mitigate these
risks, the Air Force found that these mitigation efforts were not sufficient. AR 190-69320. The
government also explained why it determined that the proposed series of “intermittent activities”
was not sufficient to create the type of widespread cultural change that Innovative Test proposed.
AR 190-69320. Again, Innovative Test may disagree with this assessment, but it has not
demonstrated that the Air Force lacked a rational basis for this decision.

        Innovative Test’s assertion that the Air Force engaged in disparate treatment with regard
to this weakness is similarly unpersuasive. In essence, Innovative Test is arguing that because
both it and National Aerospace mentioned Lean Six Sigma in their proposals, the government
should have given them equivalent risk assessments for the Innovations and Efficiencies
subfactor. This argument ignores the fact that although Innovative Test and National Aerospace
both proposed to use “Lean Six Sigma” to create process improvements, their specific proposals



                                                 22
in this regard differ. Innovative Test’s proposal, as part of the “[***]” innovation, mentions
“Lean, 5S, and Six Sigma” as examples of “industry proven tools” that it would use in its
“Structured Continuous Process Improvement” program. AR 122-26367. By contrast, National
Aerospace proposed an innovation titled “Implement Lean Six Sigma” that was focused
exclusively on introducing this program to the workforce, as an initiative to support the
complex’s “2024 Vision.” AR Tab 126. Innovative Test’s “[***]” proposal mentioned
implementing the Lean Six Sigma program as an available option rather than as a focus, and the
government appropriately evaluated it in conjunction with the other programs Innovative Test
cited. Accordingly, the government’s assignment of a weakness to Innovative Test’s overall
proposed innovation does not constitute disparate treatment. 21

       In sum, Innovative Test has failed to show that the Air Force’s technical reevaluation of
the Innovations and Efficiencies subfactor was arbitrary or capricious.

                                C. Cost-Price Factor Evaluations

        Innovative Test next raises several protest grounds related to the Air Force’s evaluation
of the cost-price factor, and specifically its cost-realism analysis of the Innovations and
Efficiencies subfactor, which in turn affected the Air Force’s most probable cost determination.
Innovative Test’s protests in this regard focus on two main arguments: (1) the Air Force’s cost-
realism methodology was generally inappropriate and unfairly implemented, and (2) the
methodology was particularly prejudicial to Innovative Test because its Day One cost savings
were evaluated as separate innovations and efficiencies. Pl.’s Mot. at 18. As Innovative Test
would have it, its most probable cost should have been approximately $[***] million lower than
the Air Force’s assessment, which would have widened the gap between it and National
Aerospace for the cost-price factor. Id. at 18-19.

        In applying the “arbitrary and capricious” standard generally pertinent to a bid protest,
the court has held that “cost-realism determinations are within an agency’s ‘sound discretion and
expertise,’ [and] the [c]ourt will not overturn a cost[-]realism determination unless the plaintiff
demonstrates the absence of a rational basis for the agency’s decision.” A-T Solutions, Inc. v.
United States, 122 Fed. Cl. 170, 180 (2015) (quoting CTA Inc. v. United States, 44 Fed. Cl. 684,
693 (1999)). The cost-realism analysis “need not have been performed with ‘impeccable rigor,’”
but it “must reflect that the agency considered the information available and did not make
‘irrational assumptions or critical miscalculations.’” Westech Int’l, Inc. v. United States, 79 Fed.
Cl. 272, 286 (2007) (quoting OMV Med., Inc. v. United States, 219 F.3d 1337, 1344 (Fed. Cir.
2000)). In a best value procurement such as this one, the contracting officer inherently exercises
significant discretion. See Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330 (Fed.
Cir. 2004).




       21
         Notably, although the weakness assigned to Innovative Test in the original evaluation
mentions its use of Lean Six Sigma techniques in connection with assigning a risk of not
achieving the asserted cost savings, AR 132-28212, the Lean Six Sigma program is not
specifically mentioned in the weakness assigned during the reevaluation, AR 190-69320.


                                                23
       1. The Air Force’s implementation of its cost-realism methodology.

         Innovative Test argues that the team evaluating the Innovations and Efficiencies cost
savings proposals (“Innovations and Efficiencies team”), was inadequately trained to evaluate
the risk associated with achieving those cost savings, which essentially rendered meaningless the
statistical analysis performed through the Crystal Ball Software. Pl.’s Mot. at 19-25. 22 In
particular, Innovative Test asserts that the Innovations and Efficiencies team failed meaningfully
to analyze the labor hour/workforce reductions proposed by the offerors, including those based
on negotiating flexible union work rules, to ensure that the reductions were realistic. Id. at 25-
36. 23

        As previously discussed, the Innovations and Efficiencies team evaluated each cost
savings proposal and assigned a minimum, most likely, and maximum value (in percentages) to
the net savings proposed. AR 55-18556. For Innovative Test, the innovations and efficiencies
evaluation included areas where there were differences between its proposed Day One staffing
costs and the government cost estimate, a step the evaluation team took because Innovative Test
did not use the government estimate as a baseline. AR 55-18556, 132-28348; see also AR Tab


       22
          Both Innovative Test and National Aerospace submitted expert declarations to address
the contention that the members of the Innovations and Efficiencies team applied different
standards for assessing risk associated with the cost savings proposals. See Def.-Interv.’s Mot.
Ex. A (Declaration of Greg S. Bingham), ECF No. 57-1; Pl.’s Reply Ex. A (Declaration of
Matthew Franz), ECF No. 60-1; Def.-Interv.’s Reply Ex. A (Supplemental Declaration of Greg
S. Bingham), ECF No. 62-1. The court has not considered these supplemental declarations in
this opinion because they are not essential to understanding the relevant facts that are already
part of the administrative record in this case. See FirstLine Transp. Sec., Inc. v. United States,
116 Fed. Cl. 324, 326 (2014) (“Supplementation of the administrative record should be limited to
cases in which the omission of extra-record evidence would preclude effective judicial review.”
(citing Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1380 (Fed. Cir. 2009))); see also
Bannum, Inc. v. United States, 89 Fed. Cl. 184, 189 (2009) (allowing supplementation of the
administrative record when the additional documents would allow the court to have a “complete
understanding” of issue raised in the bid protest).
       23
          Innovative Test raised an additional argument that the Air Force erred in its evaluation
of the [***] innovation because it incorrectly evaluated the proposal based on a [***] percent
labor efficiency factor over the life of the contract, rather than a [***] percent efficiency factor.
Pl.’s Mot. at 44-45. In its cross-motion, the government noted that Innovative Test’s final
proposal revision used both the [***] percent and [***] percent figures when describing its
proposed labor efficiency gains, and it was therefore reasonable for the government to base its
evaluation on the higher figure. Def.’s Cross-Mot. at 44. Innovative Test did not address this
issue in its reply brief, nor did it raise the argument at the hearing. And, Innovative Test raised
and abandoned this argument at GAO as well. See AR Tab 183. To the extent that Innovative
Test has not abandoned this argument, the court rejects it on the basis that it was reasonable for
the government to have conducted its evaluation as it did based on the conflicting information
presented in Innovative Test’s final proposal revision.



                                                  24
57 (Crystal Ball calculations related to Innovative Test’s “Day One Reductions”). The
Innovations and Efficiencies team met initially to discuss the “reasonable range” for the net
savings proposed by each offeror, as well as the risks associated with each innovation or
efficiency proposed. AR 55-18556. After this discussion, however, the team members
individually evaluated each cost savings proposal and assigned their own minimum, most likely,
and maximum value percentages. AR 55-18556. These percentages were then entered into the
Crystal Ball program, which created a “most realistic net savings” for each innovation or
efficiency. AR 55-18556; see also AR Tabs 53, 54, 57, 78, 79, 90, 111 (setting out the Crystal
Ball worksheets for Innovative Test and National Aerospace showing the percentages assigned
by each team member, the Crystal Ball savings assessment, and the associated most probable
cost adjustment).

        When the Innovations and Efficiencies team assigned a deficiency or weakness to a
certain innovation or efficiency, it worked with the Cost team to create an evaluation notice to
the pertinent offeror that included the current most probable cost adjustment. AR 55-18556; see
also, e.g., AR 132-28348 to -99 (summarizing the evaluation notices sent to Innovative Test and
the rationale for the most probable cost adjustments). The offerors had an opportunity to either
provide additional information to the evaluation team to address their risk concerns or adjust
their cost savings proposal to match the calculated most probable cost adjustment. For its final
proposal revision, Innovative Test received most probable cost adjustments for two Day One cost
savings “efficiencies”: FY14/15 Productivity Gains ($[***] million) and Embedded Technical
and Management Approaches ($[***] million). AR 132-28402. It also received a most probable
cost adjustment of $[***] million for its “[***]” innovation. AR 132-28402. For all other
innovations and efficiencies, Innovative Test either changed its proposed cost savings to match
the most probable cost adjustment or resolved the government’s concerns through its responses
to the evaluation notices.

          Based on the record of the cost-realism evaluation process, Innovative Test’s assertions
that the Innovations and Efficiencies team was inadequately trained and that their cost-realism
inputs were “meaningless” are unpersuasive. Innovative Test contends that the record lacks
evidence that the team received “any guidance on how to perform an adequate review and
evaluation” of the cost savings proposals, any instructions on “supporting documentation
offerors could supply to substantiate their . . . cost savings estimates,” or any criteria “to account
in a consistent fashion for [assessed] risk.” Pl.’s Mot. at 20. Innovative Test points to disparities
in the percentages assigned by the team members to certain innovations and efficiencies as
evidence that their evaluations were “arbitrary.” Id. at 20-21. The description of the cost-
realism evaluation process in the record and the detailed rationale provided by the team for their
evaluations belie Innovative Test’s assertions, but even if the contentions were supported,
Innovative Test’s argument would fail as a matter of law. In the past, judges of this court have
looked to whether “bad faith, conflict of interest, or bias” adversely affected the composition of
an evaluation team or the expertise of its members. Software Eng’g Servs., Corp. v. United
States, 85 Fed. Cl. 547, 557 (2009); see also Laerdal Med. Corp. v. United States, 111 Fed. Cl.
783, 796 (2013) (applying this standard); Chenega Mgmt., LLC v. United States, 96 Fed. Cl. 556,
587 (2010) (same). Although Innovative Test questions the level of “guidance” given to the
team and not directly the team members’ “expertise,” a considerable amount of deference applies
to the agency’s judgment in conducting a cost-realism analysis. See Galen Med. Assocs., 369



                                                 25
F.3d at 1330. In short, in the absence of evidence that the team members were inept, biased, or
acted in bad faith, the court will accept the composition and organization of the evaluation team.

         Innovative Test has similarly failed to show that the Air Force’s cost-realism analysis of
the proposed labor hour/workforce reductions lacked a rational basis. Innovative Test claims
that the Air Force did not evaluate all of the “specific elements” of the offerors’ proposed cost
savings, as required by FAR § 15.404-1, because it did not explicitly assess how the proposed
reductions in labor hours within each innovation/efficiency would affect the offerors’ ability to
meet the workload requirements. Pl.’s Mot. at 25. In other words, Innovative Test contends that
the Innovations and Efficiencies team only looked at whether the innovation/efficiency could
realistically lead to the proposed workforce reduction, and not whether the workforce remaining
after the reduction realistically could still meet the Air Force’s workload requirements. Id. at 25-
27. Innovative Test again argues that the record lacks evidence that the evaluators considered
the impact that the workforce reductions would have on “the remaining workforce’s ability to
perform the contract work.” Id. at 26. Although Innovative Test explains a hypothetical
situation in which an offeror could gain an advantage by proposing unrealistic staffing
reductions, id. at 27, it has not shown that this situation occurred here. The government points
out in its cross-motion that the record reflects instances in which the evaluation team commented
on whether the offerors’ proposed reductions would result in inadequate staffing levels, which
contradicts Innovative Test’s assertion that the record is “devoid” of such evidence. Def.’s
Cross-Mot. at 33 (citing numerous pages from the evaluators’ worksheets in AR Tab 78). As a
result, Innovative Test has not established that the evaluation team “failed to consider an
important aspect of the problem.” Alabama Aircraft, 586 F.3d at 1375; see also Crowley Tech.
Mgmt., Inc. v. United States, 123 Fed. Cl. 253, 260 (2015) (commenting that “the nature and
extent of a price realism analysis, as well as an assessment of potential risk associated with a
proposed price, are generally within the sound exercise of the agency’s discretion”).

        With regard to proposed union craft-workforce efficiencies as a result of union
negotiations, Innovative Test separately alleges that the team’s evaluation of labor-hour
workforce reductions was arbitrary and unfair. Innovative Test notes that the Air Force found
National Aerospace’s proposal of [***] employee reductions to be realistic, but only found [***]
reductions to be realistic for Innovative Test, despite the fact that both offerors had comparable
risk assessments. Id. at 28-31. The government offers three explanations for this discrepancy.
First, and most importantly, although both offerors proposed to achieve workforce reductions
and cost savings through negotiated collective bargaining agreements, the details of their
proposed bargaining approaches were not equivalent. Def.’s Cross-Mot. at 36-37 (comparing
Innovative Test’s proposed posture, described at AR 122-26323, with National Aerospace’s
approach, described at AR 126-27472). Second, the evaluators determined that National
Aerospace demonstrated superior experience with regard to negotiating such a collective
bargaining agreement. Def.’s Cross-Mot. at 36 (citing evaluator comments at AR 79-21088,
-21106, -21112). Finally, the government noted that the two offerors were not starting from the
same place in terms of workforce reductions, since National Aerospace’s proposal was based on
the staffing levels in the government cost estimate, whereas Innovative Test’s proposal used its
own Day One staffing levels as a baseline. Def.’s Cross-Mot. at 37 (citing AR 123-26620,
-26431). Considering these circumstances, the court concludes that although the offerors’ two
proposals may have been similar, the evaluators could have reasonably found that workforce



                                                26
reductions were more realistic under one proposal rather than the other. Therefore, Innovative
Test has failed to establish that the Air Force’s evaluation in this regard lacked a rational basis.

       2. Specific cost-realism methodology related to Day One cost savings.

         Innovative Test further argues that the Air Force’s disparate approach to evaluating
proposed Day One cost savings, based on whether the offeror used the government’s cost
estimate as the basis for its proposal, caused undue prejudice to Innovative Test. Pl.’s Mot. at
39-44. Innovative Test contends that the Air Force did not adequately take into account the
different measures used by the offerors regarding reductions. It asserts that the Air Force
irrationally accepted National Aerospace’s proposed Day One workforce reductions, which
represented an [***] percent employee reduction from the government baseline, but did not
accept Innovative Test’s proposed reduction in labor hours, which represented a [***] percent
reduction in labor hours from the government baseline. Id. at 39-40. Because the Air Force
determined Innovative Test’s proposed reductions were unrealistic, it adjusted Innovative Test’s
most probable cost by $[***] million (the combined adjustments for the FY14/15 Productivity
Gains and Embedded Technical and Management Approaches “efficiencies”). AR 190-69512.
As previously discussed, Innovative Test’s proposals for workforce reductions did not use the
government’s cost estimate as a baseline. AR 55-18556, 132-28348. As a result, any workforce
reductions or cost savings that were associated with a difference between the government cost
estimate and Innovative Test’s Day One staffing level were evaluated as separate innovations
and efficiencies. See, e.g., AR Tab 57 (Crystal Ball calculations related to Innovative Test’s
“Day One Reductions”). By contrast, National Aerospace spread its proposed workforce
reductions across the Innovations and Efficiencies subfactor. Def.’s Cross-Mot. at 42 (citing AR
Tab 54, Crystal Ball calculations of National Aerospace’s enumerated reductions). Despite the
differing format, these proposals were considered by the evaluation team using the same cost-
realism methodology. The fact that the government found that National Aerospace’s proposed
reductions were realistic, but found that certain reductions proposed by Innovative Test were not
realistic, is not in itself evidence of unequal treatment or an arbitrary decision on the part of the
government. Notably, the government provided a detailed description of its discussions with
Innovative Test regarding the proposed Day One reductions and its rationale for making certain
most probable cost adjustments to the final proposal revision. AR 132-28384 to -99.
Accordingly, Innovative Test has failed to demonstrate that the government’s evaluation of its
Day One cost savings lacked a rational basis. 24


       24
          For similar reasons, the court rejects Innovative Test’s argument that the Air Force
improperly failed to increase Innovative Test’s proposed cost savings in other innovations and
efficiencies when it adjusted Innovative Test’s most probable cost based on its proposed Day
One savings. Pl.’s Mot. at 42-43. Innovative Test was on notice throughout the evaluation
process that its Day One cost savings were being evaluated as separate innovations and
efficiencies and that the Air Force had concerns about these proposed cost savings. See AR 132-
28384 to -99 (describing the evaluation notices and adjustments related to the Day One cost
savings). Accordingly, Innovative Test had ample opportunity to adjust either its Day One
staffing levels or its other cost savings to account for these concerns. In any event, Innovative
Test concedes that any adjustment to cost savings for its other innovations and efficiencies would
only amount to approximately $[***] million, which in the context of an approximately $1.5


                                                  27
         Finally, Innovative Test argues that during the course of its discussions with offerors, the
Air Force unfairly “forced” Innovative Test to reduce its proposed Day One cost savings by
approximately $[***] million to avoid being assessed a technical risk in the Innovations and
Efficiencies subfactor. Pl.’s Mot. at 36-39. This argument relates specifically to the Day One
“Innovations” adjustment that the Air Force made to Innovative Test’s proposal because its Day
One cost savings differed from the government cost estimate. During the evaluation notice
process, the Air Force raised concerns that Innovative Test was “double count[ing]” its cost
savings in both the innovations and efficiencies related to workforce reductions and in its Day
One cost savings plan. AR 190-69498. In its initial responses to the evaluation notices,
Innovative Test assured the Air Force that its proposed innovations and efficiencies reflected
cost savings in addition to the workforce reductions in its Day One staffing plan. See, e.g., AR
88-21194. However, in its final proposal revision, Innovative Test chose to adjust its cost model
to align with the government assessment. AR 123-26618 (stating that Innovative Test made this
change “to prevent double counting of savings and to mitigate for potential interaction between
related innovations”), AR 88-21194 to -95 (response to the Round 4 evaluation notice, stating
that Innovative Test intended to make this change in its final proposal revision). The record
shows that although Innovative Test disagreed with the Air Force as to whether there was double
counting in its cost-savings proposals, Innovative Test ultimately acknowledged this risk and
adjusted its final proposal accordingly. There is no evidence this change was the result of
coercion on the part of the government; indeed, Innovative Test was free to make any adjustment
to its cost-savings proposals, or none at all, based on its assessment of the validity of the Air
Force’s concerns. Since Innovative Test voluntarily made this change, and did so in a way that
acknowledged a risk of double counting, the court cannot find that the Air Force’s actions were
in any way improper. See Academy Facilities Mgmt. v. United States, 87 Fed. Cl. 441, 459
(2009) (concurring with an advisory opinion by GAO that a firm’s decision to adjust prices as a
result of discussions with the agency “reflects the exercise of the firm’s own business judgment,
not improper conduct by the agency” (quoting Academy Facilities Mgmt., B-401094.3, Advisory
Opinion, at 6 (Comp. Gen. May 21, 2009))).

       In sum, Innovative Test has failed to establish that the Air Force’s cost-realism
evaluations lacked a rational basis or were improperly prejudicial to Innovative Test’s cost
savings proposals or most probable cost assessment.

                                D. Past Performance Evaluations

        Finally, Innovative Test asserts that the Air Force’s original evaluation with regard to
past performance was flawed for two reasons: (1) the Air Force arbitrarily gave the same credit
to Innovative Test and National Aerospace for performance under the OMIMS contract, even
though National Aerospace’s joint venture partner, GP Strategies, performed a much smaller
percentage of the work than Innovative Test’s constituent partners, and (2) the Air Force’s
assignment of the same overall past performance confidence assessment (Substantial) to



billion contract award is insignificant. See Pl.’s Mot. at 44 n.12 (acknowledging that the $[***]
million “error” could be viewed as non-prejudicial, but asserting it is nevertheless one of many
errors in the evaluation).


                                                 28
Innovative Test and National Aerospace was unreasonable based on the individual ratings within
that factor.

        “In reviewing an agency’s rating of past performance, this court should focus on whether
‘the evaluation was reasonable, consistent with the stated evaluation criteria[,] and compli[ant]
with the relevant statutory and regulatory requirements.’” RISC Mgmt. Joint Venture v. United
States, 69 Fed. Cl. 624, 634 (2006) (quoting JWK Int’l Corp. v. United States, 52 Fed. Cl. 650,
659 (2002)). Agencies are given “broad discretion” in evaluating past performance information,
including the extent to which a prior contract is considered “relevant.” Glenn Defense Marine
(ASIA), PTE Ltd. v. United States, 720 F.3d 901, 910-11 (Fed. Cir. 2013) (citing PlanetSpace,
Inc. v. United States, 92 Fed. Cl. 520, 539 (2010) (“At the outset, it is important to note that what
does or does not constitute ‘relevant’ past performance falls within the [Source Selection
Authority’s] considered discretion.”)).

         Respecting the Air Force’s evaluation of GP Strategies’ past performance reference as
part of National Aerospace’s overall past performance rating, the government explained that for
many of the offerors’ past performance references it was “virtually impossible to segregate the
work performed by the individual team members” because they were “integrated into a seamless
or ‘badgeless’ teammate environment.” Def.’s Cross-Mot. at 53 (quoting, in part, a past
performance reference from Kennedy Space Center). Accordingly, the Air Force decided “that
the best way to treat these efforts equitably was to consider each member of the joint venture or
integrated team as performing the whole effort.” Id. Innovative Test asserts that this decision
was contrary to the terms of the solicitation because the RFP stated that “[i]n determining
relevancy for individual contracts, consideration will be given to the effort, or portion of the
effort, being proposed by the [o]fferor, teaming partner, or subcontract whose contract is being
reviewed and evaluated.” AR 35-14589 (emphasis added); see also Pl.’s Mot. at 55 (quoting a
portion of this statement).

         As Innovative Test would have it, the pertinent question becomes whether the Air Force
adhered to its indication in the RFP that it would evaluate the “portion of the effort” performed
by the teaming partner in the prior contract. Pl.’s Mot. at 55. Nonetheless, the Air Force’s
statement in the RFP seemingly signaled that it would consider the portion of the effort ascribed
to the teaming partner in the current proposal (i.e., “being proposed” for the Test Operations and
Sustainment contract). In other words, a teaming partner’s past performance might be
considered more or less relevant based on that teaming partner’s expected contribution to the
work being proposed under the new contract. The Air Force’s statement in the RFP accordingly
is ambiguous and does not by itself preclude the Air Force from giving GP Strategies “full
credit” for its performance under the OMIMS contract.

        Innovative Test claims that GP Strategies performed only 5 percent of the total work
under the OMIMS contract, relying in part on the fact that this percentage reflected that firm’s
relative ownership in the ATA joint venture. Pl.’s Mot. at 54-55. The government and National
Aerospace respond that the ownership percentage does not necessarily indicate the amount of
work being performed by GP Strategies. Def.’s Cross-Mot. at 53-54; Def.-Interv.’s Cross-Mot.
at 59-60. The defendants also note that the OMIMS contract was a larger effort than the Test
Operations and Sustainment contract presently being awarded, and therefore even a 5 percent



                                                 29
contribution to the OMIMS effort could reasonably be considered relevant. Def.-Interv.’s Cross-
Mot. at 60.

         It appears that the Air Force did not attempt, through the evaluation notice process, to
determine with more precision what type or extent of work was performed by GP Strategies
under the OMIMS contract, nor did it do so for Jacobs or PAE. See Hr’g Tr. at 45:5-9 (Feb. 2,
2016). And, the record at least suggests that GP Strategies’ role in the OMIMS contract was
merely to provide training and run a management boot camp. Hr’g Tr. 45:12-13 (Feb. 2, 2016);
AR 108-24856, -61. The Air Force’s decision to give National Aerospace full credit for GP
Strategies’ work on the OMIMS contract thus is poorly supported by the record. Nonetheless,
GP Strategies’ participation in the OMIMS contract was only one of eleven past performance
references submitted by National Aerospace. AR 190-69680. 25 It does not follow that the Air
Force’s decision to give the firm “full credit” for the OMIMS contract skewed the past
performance rating in National Aerospace’s favor. 26 The record shows that excluding the rating
for GP Strategies, the majority of National Aerospace’s past performance quality ratings were
Exceptional or Very Good, and a similar majority of references were either Very Relevant or
Relevant for all the subfactors. AR 190-69680. The same was true for Innovative Test, although
a larger percentage of its quality ratings were Exceptional versus Very Good. AR 190-69437. In
short, Innovative Test had better past performance ratings. But, the Air Force explained in detail
its rationale for awarding both offerors a “Substantial” performance confidence rating. AR 190-
69321 to -438, -69576 to -681. Although the court would have assigned Innovative Test a
greater strength for its past performance than National Aerospace, and it questions how the Air
Force could have determined that there was “no meaningful difference” in the offerors’ past
performance ratings, AR 186-68915, the Air Force’s past performance ratings are not so bereft of
rational explanation and support in the record that the Air Force’s award decision should be
overturned, given the other considerations that pertained to that ultimate decision. 27

       25
          National Aerospace submitted a total of eight past performance references, including
three for Bechtel and one for GP Strategies. See AR 183-68861. The Air Force’s evaluation
team identified three additional Bechtel contracts as relevant and considered them as well. See
id.
       26
          The court acknowledges that GP Strategies reference appeared to have been the
strongest of National Aerospace’s past performance references, since it was the only reference to
receive four Very Relevant and one Relevant ratings (in additional to all Exceptional quality
ratings). AR 190-69680. It was also the only National Aerospace reference to receive a Very
Relevant rating for the Technical Operations subfactor. AR 190-69680.
       27
         Because this court has found that the Air Force’s evaluations with regard to the
technical and cost-price factors were not arbitrary and capricious, it need not address Innovative
Test’s argument that the Air Force’s best-value determination was flawed by the alleged errors in
the evaluation process. See Pl.’s Mot. at 58-59. To the extent that Innovative Test argues that
the Air Force did not sufficiently justify its best-value decision, the court disagrees. In the post-
reevaluation source selection decision document, both the Council and the Source Selection
Authority provided a detailed justification for their recommendation and decision, respectively,
to award the contract to National Aerospace based on its “technically superior proposal.” AR
192-70262 to -66. “It is well-established that contracting officers have a great deal of discretion


                                                 30
                                         CONCLUSION

        For the reasons stated, Innovative Test’s motion for judgment on the administrative
record is DENIED. The government’s and National Aerospace’s cross-motions for judgment on
the administrative record are GRANTED. The clerk is directed to issue final judgment in accord
with this disposition.

       No costs.

       It is so ORDERED.

                                                  s/ Charles F. Lettow
                                                  Charles F. Lettow
                                                  Judge




in making contract award decisions, particularly when . . . the contract is to be awarded to the
[offeror] that will provide the agency with the best value.” Banknote Corp. of America v. United
States, 365 F.3d 1345, 1355 (Fed. Cir. 2004) (citing TRW, Inc. v. Unisys Corp., 98 F.3d 1325,
1327-28 (Fed. Cir. 1996); E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996);
Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 958-59 (Fed. Cir. 1993)). Although the
court recognizes, as Innovative Test points out, Pl.’s Mot. at 59, that the Source Selection
Authority must do more than “parrot back the strengths and weaknesses of the competing
proposals” and make “[c]onclusory statements devoid of any substantive content,” Serco, Inc. v.
United States, 81 Fed. Cl. 463, 496-97 (2008), that is not the situation here. Particularly as here
where the solicitation stated that non-cost-price factors would be significantly more important
than cost-price, the Air Force provided sufficient justification for its decision.


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