HVF West, LLC v. United States

In the United States Court of Federal Claims

In this postaward bid protest, plaintiff HVF West, LLC (“HVF”) alleges that the Logistics Agency Disposition Services (“DLA”) .

’ ’

’

redactions are indicated with bracketed ellipses (“[. . .]”).

sales contracting officer (“SCO”)

Lamb Depollution, Inc. (“Lamb”)—

—

HVF’s contentions. The court is presented with defendant’s and Lamb’s motions to dismiss, the parties’ cross

HVF’s

denies defendant’s and Lamb’s motions.

—

. 1 Administrative R. (“AR”).

174 “[t]ypical categories of items that

,

. . . .”

submit their bids to purchase the property as “a percentage of the Scrap Sales Price Point of $1.9625,”

2

1. Required

the contract, the awardee was required to start performance “within 30 days of contract award.” at 183. The awardee’s performance consisted of (1) removing property DLA’s Tucson Centralized Demilitarized Division or Receipt in Place location 174

by “eliminating the functional capabilities and inherently military design features” and mutilated the same by “render[ing the] material unfit for its originally intended purposes.”

¹DLA stated in the solicitation that “the annual estimated weight to be offered under this contract is 19,000,000 pounds per year” and that “weight quantities may vary from a 0 pounds to a maximum of 28,500,000 pounds per year . . . .” AR 176.

2

awardees, the court uses “awardee” for the sake of simplicity and clarity.

(requiring the awardee to ensure that demilitarization and mutilation “is accomplished in a manner that prevents recognition and reconstruction”). Of particular import here, a needed to “completely shred[]” data plates and military markings.

at 178 (defining “scrap” as “materials that have been rendered useless beyond repair, rehabilitation, or restoration such that the items[’] original identity, utility, form, fit, and function have been destroyed”). At each step of its “ ”

, the “auction closing date,”³ d.

)[.] Bids

that “[a]ll b

961 7568

3

,

60.

titled “Bidders,” the DLA explained that “[a]ward(s) for d ,

. . . .”

d that being the highest bidder “does not convey any special right nor remove throughout the term of this contract.”

would

appears to flow from the aforementioned “Bidders” section and the subsequent sections titled “Pre Award Requirements” and “Criteria for Award.” d.

, d

the “purchaser”

x “Statement of Intent and End Use Certificate applies and will be completed and bidder’s capab sales contract.”

. . .”

x

ations.”

x “Provide documentation of Responsible Recycling standards . . .

. . Steward certification throughout the life of the contract.”

“Pre Award Requirement”

“Criteria for Award.” d

would

disposal facility (“TSDF”) plan; safety procedures; processing fac (collectively, “technical information”).

1.

. . .

761.65 . . .

. . .

[(“EPA”)] . .

.

3.

. . . .

. . . .

5.

Also, provid

6.

[(“RCRA”)], Toxic Substances Control Act [(“TSCA”),] Department of Transportation [(“DOT”]), and [Occupational Health and Safety Administration’s (“OSHA”)] training requirements r

. . . .

8.

in a manner that “conform[s] to the requirements set forth in th[e] solicitation.” .

would

—

— .

186

. . . , 65,

Daicel Trading Company (“Daicel”) bid . . . , at 33, Demo Recycle (“Demo”) bid . . . , . . . , 62.

3.

mail message (“e mail”) containing the names . 4

,

,

4

(1) “[the DLA’s] system displays the bidder’s first name, last name, time and date of bid and the bid amount in the bid abstract, not the company they work for,” and highest bidder’s company name because that information was not shared in the past. AR 204. . 5

amb’s Submissions

On March 14, 2019, Lamb responded to the SCO’s request for information with a variety 33,

117

page printout from the Arizona Department of Environmental Quality’s (“AZDEQ”) website, —Lamb’s bank—

Lamb’s finances:

. . .

. . .

b . . .

. . .

. . .

. . .

. . .

noting that, “[f]or over 6 years,” it “has successfully operated [a] DEMIL program at . .

Maine.” at 160. Lamb explained that it has “safe 5

.

” in facilities that were

“constructed with safety and the environment as their priorities.”

. 6

how it “will maintain a safe clean working area at all times.”

ibed a contingency plan; it has “relationships with other processors and recyclers of materials in the Tucson area” that “would permit the use of their facilities to process or ”

2. DLA’s Inspections

, noted that Lamb’s

site “has been a scrap yard for 25 plus years” and that Lamb is “currently in the process of . . .”

department for Lamb’s facility and spoke to represented that Lamb’s site had “some code enforcement violations in Feb[ruary]” and “[t]here were some HAZMAT storage issues at the site and other operational issues.”

the marshal responded: “No, this site is zoned for these activities and with the side cleared out, . . . .” th Lamb’s

an EPA

Lamb’s ability to handle hazardous materials and regulatory inspection of Lamb’s proposed site on January 1, 2019, and “[t]he results are ongoing.” Ms. Henninger also documented that Lamb’s “em [and] required safety/environmental training,” Lamb’s “personnel are properly trained to handle spills” and “the facility maintain[s] copies of the spill contingency plan[.]”

Lamb’s facility as it pertains to safeguarding hazardous materials, (marking “yes” to various questions related to whether “hazardous property storage space [is] provided”), and dged that “[t]he site has several processes in place to maintain environmental responsibility and has Emergency Response Plains/Training,” 6

investigation, explaining that a project could “be completed by the end of the week of the 8th,” and noting that another project will begin “as soon as the week of April 15th”).

On April 5, 2019, Forrist Richardson and Danny Gregory inspected Lamb’s facility and completed the corresponding “Offsite Recycling/Demilitarization Facility Inspection [Report]” on April 7, 2019.7

acknowledged that Lamb had a permit from Tucson for “Salvage/Scrap/Recycling operations,” at 19; wrote “N/A, new facility” when addressing the “[d]ate and results of [the] most recent compliance inspection,” ; and remarked that “the facility and area is under extensive renovation and upgrade to allow for Demilitarization/Mutilation of Government property,” and regularly inspects the facility’s operational and safety equipmen 22.

at 19, after concluding that, “[f]rom

performing the DEMIL contract,”

166 67, 172.

Office (“GAO”) on May 10, 2019.

Environmental Quality (“PCDEQ”) issued to the McCrones a Notice of Violation with respect to Scrap Metal Recycling’s activities at 4408 East Illinois Street in Tucson, Arizona. PCDEQ explained in its notice that the investigator had “reasonable cause to believe and/or Pima County” regarding “Unlawful Storage of Solid Waste and/or Unl Solid Waste.” ,

on (“Prejudice Declaration”) as an exhibit. In response, defendant moved (1) to dismiss HVF’s complaint for ,

defendant, it moves to dismiss HVF’s complaint for lack of standing, .

Elson (“Injunction Declaration”).

HVF’s

12(b)(1) of the Rules of the United States Court of Federal Claims (“RCFC”). A motion filed court’s jurisdiction. Whether the court has Better Env’t 95 (1998). “Without jurisdiction the court cannot proceed at all in remaining to the court is that of announcing the fact and dismissing the cause.”

“must accept all well . . . .” , 200

“1491(b)(1) in its entirety is exclusively concerned with procurement solicitations and contracts”). A procurement, for the purposes of the court’s jurisdiction, is “the process of acquiring property or services.” Res. , 417 F. App’x 957, 959 (Fed. Cir. 2011); 1244

Cf. 408823.2, 2014

. 8

transactions if “the agency receives a concrete tangible benefit that involves the deli value.”

—

265880, 95

. 9

.

8The court finds the GAO’s decision helpful because, as relevant here, the GAO’s ’s jurisdiction over such cases. Indeed, as with this court, the GAO has jurisdiction over challenges to a federal agency’s attempt to procure . § 3551(1)(A) (2018) (defining “protest” as a challenge “[a] solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services” § with jurisdiction over a “protest”),

challenges “ ”), Res.

597 F.3d at 1245 (defining “procurement” as “the process of acquiring property or services”).

9Defendant also argues that the GAO’s holding with respect to mixed transactions is 8 (explaining that the court’s and GAO’s jurisdictional limits ’s

Defendant’s co in w

or the Federal Circuit (“Federal Circuit”) held that the naked sale or lease of land was , 417 F. App’x at 959; , 597

defendant’s reliance on , 8

,

Hym 1328

, 114

545

,

.

— —

.

10 95

undercuts defendant’s reliance on that decision for the proposition that HVF lacks jurisdict .

HVF’s

—

non

Defendant and Lamb next challenge HVF’s standing to bring the instant protest. “[T]he dispute or of particular issues.”

“‘[A]t the pleading stage, the plaintiff must clearly . . .

demonstrating each element’ required for . . . .” (quoting Spokeo (May 24, 2016))), and “must accept the well ,”

In bid protests, standing “is framed by 28 U.S.C. § 1491(b)(1), which . . .

stringent standing requirements than Article III.”

“interested parties.” Interested parties are those “actual or prospective bidders or offerors whose contract.” Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) is on “[t]he party invoking federal jurisdiction”).

could compete for an award but for the procuring agency’s error.

, 238 F.3d 1324, 1334 (Fed. Cir. 2001).

being an interested party, section 1491(b)(1)’s standing requirement requires a protestor to “show that it was prejudiced by a significant error in the procurement process.”

, 577 F.3d 1375, 1378 (Fed. Cir. 2009).

, 892 F.2d 1006 (Fed. Cir. 1989) (“ ”),

bidders’ eligibility for an award.

, 137 Fed.

, 892 F.2d at 1011 (addressing a situation where “the bids differ price”).

protestor’s allegations of error are accepted as true for the purposes of standing). In the relevant part of its complaint, HVF alleges that the SCO erred by failing to evaluate each bidder’s — —

advantageous bidders based on its review of those factors and the bids. Assuming HVF’s 11

interest in the DLA’s award of the contract. It has.

—

n —

ould compete for an award but for the SCO’s purported failure to follow the solicitation’s evaluation process. , 117 was “the incumbent contractor and was a finalist for the contract award”);

, 124

Fed. Cl. at 506 (noting that standing is based on the protestor’s allegations of errors). ’

(“Although the inquiries are similar, prejudice must be shown either as part of, or in addition to, showing a direct economic interest.”); .

standing, the court turns to the parties’ cross motions pursuant to RCFC 52.1(c), “the court asks whethe record.”

Cir. 2005)). Because the court makes “factual findings . . . from the record evidence,” judgment on the administrative record “is properly understood as intending to provide for an expedited trial on the administrative record.” , Administrative Procedure Act. 28 U.S.C. § 1491(b)(4). Specifically, “the proper standard to be aside the agency action if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in 11

s the higher bidders’ eligibility

,

lenges the intervening bidders’ eligibility for an award).

accordance with law.’” , 365 F.3d 1345, 1350 (Fed. Cir. may set aside a procurement action if “(1) the procurement official’s decision regulation or procedure.” A court reviews a challenge brought on the first ground “to deter heavy burden of showing that the award decision had no rational basis.” “When a clear and prejudicial violation of applicable statutes or regulations.” , 216 F.3d 1054, 1058 (Fed. Cir. 2000) (“The arbitrary and capricious standard . . . requires a relevant factors.”). Procurement officials “are ‘entitled to exercise discretion upon a broad range of issues confronting them’ in the procurement process.” Int’l, Inc. v. U.S. Dep’t of the Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)). Thus, the court’s review of a procuring agency’s decision is “highly deferential.” , 216 (“The court is not empowered to substitute its judgment for that of the agency.”), .

After showing “a significant error in the procurement process,” a protestor typically must show “that the error prejudiced it” to prevail.

(Fed. Cir. 1996). “[I]n a bid protest under the [Administrative Procedure Act, however,] med when the Government acts irrationally.”

(2006) (explaining that there is “no need to continue to prejudice” when “the Gove acted arbitrarily and capriciously” because that “necessarily invalidates the procurement”); (“[W]hen an irrational or arbitrary and capricious agency action has occurred, prejudice is showing of prejudice”).

how he evaluated (1) bidders other than Lamb and (2) Lamb’s submissions.

the SCO

—

12

Thus,

.

Thus,

“[i]nterpretation of the solicitation is a question of law . . . .”

examining the solicitation’s plain language, and in doing so considers “the solicitation as a provisions.” , 370 F.3d 1153, 1159 (Fed. Cir. 2004) (“An .”). “If the provisions

. . . .” 53.

.

“is susceptible to more than one reasonable interpretation.”

, 88 F.3d 990, 997 (Fed. Cir. 1996). “A patent ambiguity is 12

nd

— —

102

§ 545(a)(1)(A) (2018) (requiring that an award be made “to the responsible bidder whose bid . . . is most advantageous to the Federal Government, price and other factors considered”). appropriate parties.”

atent ambiguities are “‘obvious, gross, [or] glaring.’” , If a solicitation contains a patent ambiguity, the protester’s interpretation of th 1381. ,

— . 1162.

.

the court finds merit in each party’s reading of the .

HVF’s interpretation that the SCO must evaluate each bidders’ technical .

reference to “award(s),” 13

that the SCO would compare bidders’

would

“whose bid

was the most advantageous.” most advantageous “bid” could mean the highest p “ ”

14

13

.

. support

each bidders’ responsibility —

the SCO

when to do so

“whose bid

” “ ”— “ ”—

.

Indeed, the court struggles to discern any guidance from the headings “Bidding and Award Criteria,” “Bidder, “Pre Award Requirements,” and “Criteria .”

issues with the headings, the “Criteria for Award” heading appears superfluous given that a preceding heading is “Bidding and Award Criteria.”

.

under the “Bidder” heading, and “Pre Award Requirements” heading .

,

contact information, is “considered a part of the bid . . . .” AR 72. In short, it is unclear precisely what “bid” means for the purposes of this solicitation.

.

“bidder,” “purchaser,” and “potential purchaser” in the relevant .

SCO’s ,

, 1313 Fed.

Cir. 2007) (“[A] party who has the opportunity to object to the terms of a government solicitation Claims.”). Thus,

ate Lamb’s technical information in the

, .

1

the SCO

that Lamb submitted its Safety Policy and Procedure Manual, “but that manual did nothing to address safety procedures covering ‘all phases of the contract work including, but not limited to: transporting, securing loads and first aid procedures.’” Pl.’s Mot. J. Admin “[The party’s argument is] so conclusory that the Court cannot assess the merits do parties’ for them.”). ,

.

merely, that “safety procedures should be addressed”).

contains reports in which Lamb’s safety measures were reviewed and documentation of Lamb’s .

2

training because there is no record evidence concerning Lamb’s compli ,

employees’ work with toxic or hazardous materials.

2601

6901 6991

solicitation, there is record evidence on Lamb’s training measures that are germane to the SCO’s the record reflecting that Lamb’s employees were , Lamb’s facility had safety measures in importantly, however, Ms. Henninger noted in her report that Lamb’s employees received the ,

3

became part of the record during HVF’s GAO protest. Assuming that the SCO was (or should to assessing Even if the notice was relevant to assessing Lamb’s compliance ability, the 15 15 recently issued a Notice of Violation for Lamb’s site. Assuming that Messrs. Ri — assessing Lamb’s technical qualifications as part of the preaward survey. Specifically, HVF rkings 16 , 554 Heritage College Dictionary 1277 (4th ed. 2004) (defining “shear” as “[a]ny of various implements or machines that cut with a scissorlike action”), ning “shred” as “[t]o cut or tear into shreds”). Moreover, the SCO rationally concluded that Lamb could perform Lamb’s onsite equipment.

17

4.

—

because there is no apparent reason why another company’s compliance issues at Lamb’s ardless of the propriety of Messrs. Richardson’ Gregory’s conclusion, the SCO could still rely on Ms. Henninger’s conclusion in her —

16

the bidder “[p]rovide a cost projection with regard to each contract operation”) ho,

189

.

d .

Defendant’s and Lamb’s counterarguments are not persuasive. d ,

argues that HVF waived any challenge to the SCO’s financial . “T

”

“[n]

”

A procuring agency is “bound by the language of the Solicitation,” and therefore must 68

, 44 Fed. Cl. 131, 138 (1999) (“[I]f a protestor can that it can demonstrate [prejudice].”).

5

761.65,

Defendant’s and Lamb’s counterarguments fall short. They both argue, essentially, that for the TSDF

.

18

d .19

Lamb argues that HVF waived its challenge to the SCO’s evaluation of the TSDF plan by not . As explained above, Lamb’s waiver argument is .

CO irrationally evaluated Lamb’s submission . 51

(“[T]he resulting harm to an offeror whose proposal was not ’ ring agency’s] evaluation of the proposals.”).

contentions on the relevance of HVF’s experience and n .

18

19 that the SCO construed the printout as Lamb’s ) whether, by virtue of submitting the document, it was “stating that [its] process facility is exempt from having [a TSDF] permit[.]” AR 253.

d.

20 11.

—

—

’s factual contentions.²¹

—HVF’s

—

,

22 , coupled with the other bidders’

20 ,

3Commc’ns Corp. v. United States, 99 Fed. Cl. 283, 289 (2011) (“[T]he been proven true.”). Thus, the Federal Circuit’s test in Section III.A (rejecting HVF’s argument that the SCO needed to review nonprice

21HVF’s contentions regarding the other bidders, defendant and Lamb procedural argument. Specifically, they dispute the propriety of considering Daicel’s and Demo’s experience (or lack thereof) because the other bidders’ eligibility for an award based on information

for the SCO’s error .

d by the SCO’s errors.

To remedy the DLA’s prejudicial errors, .

the four factors, taken individually, is dispositive, and a “weakness of the showing regarding one factor may be overborne by the strength of the others.”

23

Cir. 2011) (“[T]he Court of Federal Claims has broad equitable powers to fashi remedy.”).

.

—

—

,

protestor can establish an irreparable injury if “the loss of the business from th[e] solicitation [at of the business.”

because, by virtue of the SCO’s failure to follow the 8 . . .

23

“[t]he standard for a preliminary injunction is essentially the same as for a permanent injunction actual success,”

. . . of its business, and (2) HVF will . . .

n 6, 11.

pause Lamb’s work under the

.

9.

ntract performance, “

. . . .”

, 6 F. App’x 867 (Fed. Cir. 2001).

paused Lamb’s performance, AR 196

Moreover, defendant’s argument is not persuasive because it is relying 5, . Thus, the balance of harms tilts in HVF’s favor.

enjoining the contract based on HVF’s “[T]he public interest is served by enforcing a procurement process ’s evaluation criteria.”

. lthough the grant of injunctive relief will delay the DLA’s procurement of ’s

—which concerns how the public is harmed by granting relief based on a protestor’s —

In sum

After reviewing the record, the parties’ briefing, and their representations, the court “(1) obtains information for the ‘other factors’ as of the pre time period and conducts a proper evaluation of the offerors’ bids in accordance with the terms procurement consistent with the terms of the new solicitation.” ’s 23.

non

that the court’s review is limited to the adminis The court’s 118, 131

CW Gov’t Travel, Inc. v. United States, 110 , 110 Fed. Cl. at 365 (“[I]t is proper — error.”).

J. Admin 20 21

, . Thus, the court denies defendant’s and Lamb’s motion to .

HVF’s motion defendant’s and Lamb’s motions to dismiss, .

,

.

no later than ,

4, 2019,

attaching a copy of those pages of the court’s ruling containing .

.