MG Altus Apache Co. v. United States
| Decision Date | 27 March 2013 |
| Docket Number | No. 11-538C,11-538C |
| Parties | MG ALTUS APACHE COMPANY, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
(Bid Protest)
Post-award Bid Protest;
Supplementation of the Court
Record; Nonresponsibility
Determination; Joint Venture; De
Facto Debarment; Due Process;
National Security.
Jonathan D. Shaffer, Smith Pachter McWhorter PLC, 8000 Towers Crescent Drive, Suite 900, Tysons Corner, VA 22182, for Plaintiff. John S. Pachter, Mark E. Hanson, and Mary Pat Buckenmeyer, Smith Pachter McWhorter PLC, of Counsel.
Stuart F. Delery, Jeanne E. Davidson, Kirk Manhardt, and William P. Ravel, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. 20044. Elizabeth Witwer, Commercial Litigation Branch, United States Department of Justice, and Scott N. Flesch, United States Army Contract and Fiscal Law Division, of Counsel.
In this post-award bid protest, MG Altus Apache Company ("MG AA") challenges its nonresponsibility determination and exclusion from the competition in the National AfghanTrucking ("NAT") multiple-award procurement for trucking services in Afghanistan. MG AA alleges that the Department of the Army ("the Army") (1) relied upon a classified "vendor vetting" rating process that illegally applied a de facto debarment standard, (2) misapplied the vendor vetting program's procedures, and (3) "blacklisted" the HNT prime contractors, precluding MG AA from receiving an award.
This matter comes before the Court on the parties' cross-motions for judgment on the Administrative Record ("AR") and Plaintiff's request for injunctive relief. Because Plaintiff has failed to demonstrate that MG AA's nonresponsibility determination was arbitrary, capricious, or illegal, the Court grants Defendant's motion for judgment on the AR.
On February 22, 2011, the Army issued solicitation number W91B4N-11-R-5000 for NAT services in Afghanistan. The purpose of the NAT contract was to provide a secure and reliable means of distributing reconstruction material, security equipment, fuel, miscellaneous dry cargo, and life support assets to operating bases and distribution sites throughout the combined joint operations area in Afghanistan. The Army anticipated the award of indefinite delivery/indefinite quantity contracts for trucking services in three suites: Suite 1 for bulk fuel, Suite 2 for dry cargo, and Suite 3 for heavy cargo. AR 390. The NAT procurement was essentially a follow-on procurement to the prior Host Nation Trucking ("HNT") contract, which had covered substantially the same mission requirements. The Army awarded NAT contracts to 20 contractors, none of whom had been HNT prime contractors.3
The solicitation stated that the Army would make awards based on "lowest price technically acceptable" proposals in accordance with Federal Acquisition Regulation ("FAR") 15.101-2.4 Proposals were to be evaluated using two criteria: technical capability and price. AR 391. The solicitation stated that the Government would evaluate offerors for responsibility in accordance with FAR 9.1. AR393. FAR 9.104-1 provides:
FAR 9.104-1 (2010).
MG AA is a joint venture comprised of MG Services Limited ("MG"), Altus Supply and Services ("Altus"), and Apache Defense, LLC ("Apache"). Compl. ¶ 12. MG is an American-owned and managed firm that operates exclusively within Afghanistan. Compl. ¶¶ 12, 14. MG had previously been in a joint venture with an Afghan company, Ettefaq-Meliat-Hai-Afghan Consulting, Inc. ("EMA"), and the MG EMA joint venture was an HNT prime contractor. Compl. ¶ 2. MG employees [ ] and [ ] were project managers for the MG EMA joint venture. As project managers for MG EMA, [ ] corresponded with the HNT contracting officer regarding MG EMA's performance issues on behalf of the MG EMA joint venture. Specifically, [ ] responded to a February 1, 2010 letter of concern from the HNT contracting officer, and [ ] responded to cure notices and letters of concern between December 2009 and August 2011. See AR 16275 ([ ] response to February 1, 2010 letter of concern), 16284 ([ ] response to July 5, 2011 cure notice), 21263 ([ ] response to Dec. 22, 2009 letter of concern), 21265 ([ ] response to September 1, 2010 letter of concern), 21267 ([ ] response to July 10, 2011 cure notice rejection), 21272 ([ ] response to August 9, 2011 letter of concern), 21275 ([ ] response to August 12, 2011 letter of concern rejection).
MG formed a new entity for the NAT procurement, MG AA, with Altus and Apache. Compl. ¶ 12. Altus is an Afghan-American owned firm specializing in trucking operations, and Apache is an American corporation specializing in Afghanistan-based security services. Compl. ¶¶ 19-21. MG was to provide trucking operations management services for the NAT contract. AR 4092.
MG AA timely submitted its proposal for all three NAT suites. AR 4049-332. As part of its proposal, MG AA included the Joint Venture Agreement creating MG AA, which designated MG as the Lead Member. AR 4066-91. The Agreement provided that the Lead Member is responsible for "[c]ontracts-level Program Management, Contracts Administration and Accounting, and Financial Administration . . . ." AR 4068. In addition, the Lead Member serves as the primary point of contact with customers on contractual matters and provides general program management and contracts finance and accounting functions on behalf of the joint venture, including processing deliverables and timely notifying joint venture members of all client communications regarding joint venture performance issues, problems, and resolutions. Id. The Agreement further stated:
"Joint Venture Manager" shall be a MG representative . . . who shall manage day-to-day operations. In addition to other duties, the Joint Venture Manager shall be the primary point of Contractual contact with clients and responsible for directing resolution of all Contractual matters of the Joint Venture and providing regular oversight of performance on behalf of the Joint Venture.
AR 4068-69.
MG AA's proposal further indicated that "MG provides significant positive and negative financial incentives down to the individual driver level which keep loading and delivery timely, ensure proper ITV utilization, and minimize the possibility of theft." AR 4092. MG also described the capabilities of its "trucking operations management team" and stated that "[o]ver the last four and a half years MG has refined its trucking management processes, strategies and tools to maximize performance for the client and benefit to the company, its subcontractors, employees and owners." AR 4092.
MG AA listed the FINT contract as a reference for itself and for three of its proposed subcontractors. AR 4128-29. In its NAT proposal, MG AA proposed [ ] MG's Vice President of Corporate Development, who had been an MG EMA program manager for the HNT contract, as MG AA's program manager for the NAT contract. MG AA attached [ ] resume and April 6, 2011 letter of committal as MG AA's Program Manager for the NAT contract to its proposal for Suite 2 of the NAT contract. See AR 4248-49. [ ] had served as the program manager for the MG EMA joint venture under the HNT contract from February, 2010 to August, 2010. AR 4248.
On July 29, 2011, the Army eliminated all bidders whose proposals failed either the technical or price requirements, and forwarded the remaining proposals for determinations of responsibility. AR Tabs 94.1-94.3. By letter dated July 30, 2011, the contracting officer informed MG AA that its responsibility evaluation was ongoing and listed several areas ofconcern relating to MG EMA's performance of the HNT contract. AR 16237-38.5 The contracting officer issued a corrected version of this letter on July 31, 2011.6 The contracting officer requested that MG AA provide responses addressing the circumstances giving rise to the area of concern, identifying any mitigating circumstances, and outlining the corrective action taken to prevent reoccurrence. AR 16244-45. Adverse information involved MG EMA's noncompliance with In-transit Visibility ("ITV") contract requirements, failure to meet Private Security Contractor ("PSC") Arming Requirements, forged Transportation Movement Requests ("TMRs"), and withholding of contract payments for failed missions, canceled no-pay missions, pilferage/backcharges, and fuel backcharges. Id. In describing this adverse information, the contracting officer cited letters of concern issued to MG EMA dated December 22, 2009, February 1, 2010, and August 31, 2010, and cure notices dated January 1,...
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