Office Depot Inc v. The United States, 10-335 C
| Decision Date | 24 August 2010 |
| Docket Number | No. 10-335 C,10-335 C |
| Parties | OFFICE DEPOT, INC., Plaintiff, v. THE UNITED STATES, Defendant, STAPLES, INC., Intervenor-defendant. |
| Court | U.S. Claims Court |
John G. Horan, Washington, DC, for plaintiff. Luke W. Meier and Steffen G. Jacobsen, Washington, DC, of counsel.
Robert C. Bigler, United States Department of Justice, with whom were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Brian M. Simkin, Assistant Director, Washington, DC, for defendant.
Jonathan S. Aronie, Washington, DC, for intervenor-defendant. Anne B. Perry, Washington, DC, of counsel.
This bid protest challenges the award of a large office supplies contract (the contract) by the Federal Deposit Insurance Corporation (FDIC). Plaintiff Office Depot, Inc. (Office Depot) filed its post-award bid protest complaint on June 1, 2010, and amended that complaint on June 2, 2010. Staples, Inc. (Staples), the contract awardee, moved to intervene on June 4, 2010, and its motion was granted the same day. Plaintiff's bid protest is now before the court on defendant's motion to dismiss brought pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC), plaintiff's motion for judgment on the administrative record, and defendant's and intervenor-defendant's cross motions for judgment on the administrative record.2 Plaintiff asserts that the award to Staples was "unreasonable and contrary to law." Pl.'s Mot. at 1.3
The administrative record (AR) of this procurement was filed on June 11, 2010, and briefing was filed according to an expedited schedule.4 Oral argument was held on July 19, 2010. For the reasons set forth below, defendant's and intervenor-defendant's motions for judgment on the administrative record are granted.
In October 2009, the FDIC approved an acquisition plan for a nationwide office supplies contract. AR Tab 1. Office Depot was the incumbent contractor providing these supplies. AR at 2. Office Depot's contract, originally expected to expire in 2011, had incurred costs "much higher than anticipated, primarily due to the banking crisis," and would terminate on February 28, 2010. AR at 6. The plan recognized a need for "an acceleration of the acquisition planning for a new office supply contract." Id. Adjustments were made to the acquisition in light of the "short cycle for award." AR at 8; see AR at 1 (), 2 (eliminating past performance evaluations and oral presentations).
Solicitation No. CORHQ-09-R-0347 issued on November 24, 2009.5 AR at 195. Under the terms of the contract, the successful offeror will provide office supplies to FDIC headquarters and offices throughout the country, as well as "drop ship" office supplies in all 48 contiguous states. AR at 104. Purchases at the contractor's retail outlets will be subject to the same discounts as supplies delivered under the contract. Id. The contract will begin with a two-year base period, and include three option years. AR at 94, 163. Each offer consists of a firm-fixed-price pricing proposal, as well as a mission capability proposal. AR at 164. The contract would be awarded to the offeror providing the best value to the FDIC. AR at 91, 168, 170.
The pricing proposal provides the FDIC with the offeror's price schedule for office supplies, following the format set forth in Section B of the solicitation. See AR at 93-101. The prices entered into the price schedule indicate base period andoption year prices for commonly ordered items ("core items"), as well as a total core items price for the contract. AR at 99. The price schedule also indicates discounts from catalog prices for other supplies, and a total non-core items price for the contract. AR at 100. Finally, the price proposal indicates the total price for office supplies delivered through the contract. AR at 101.
The mission capability proposal, on the other hand, includes three rated components, or "subfactors," as well as an information technology security plan and a subcontractor plan. AR at 164-65. The mission capability proposal subfactors will be discussed in detail in the evaluation description section of this opinion. Offerors were informed that their mission capability proposals should be "specific and complete," and that "[l]egibility, clarity and coherence are very important." AR at 164.
Questions regarding the solicitation were due by December 8, 2009. AR at 83. Answers to these questions were provided on December 11, 2009. AR at 2549-50. Eight proposals were received in response to the solicitation. AR at 173.
According to the solicitation, each price proposal is evaluated for completeness, reasonableness and realism. AR at 169. Price comparisons are used to determine price reasonableness, and proposals are complete if prices are submitted in accordance with schedules set forth in the solicitation. Id. "The Contracting Officer may also evaluate the Overall Evaluated Price (OEP) for each offeror." Id.
Three rated "subfactors" are presented in each offeror's mission capability proposal. AR at 165. These subfactors are Technical Approach, Management Plan and Key Personnel. Id. The first two subfactors are further divided. Technical Approach is divided into four components: Supplies and Equipment, Electronic Ordering, Delivery Network, and Statutory Compliance. AR at 166. Management Plan is divided into Customer Service and Quality Assurance and Control. Id.
One hundred points are available in the evaluation of mission capability in each offeror's proposal, with this breakdown:
AR at 168 (formatted for clarity). The ratings of these components of the mission capability proposal produce an overall numerical score, with adjectival ratings applied to these ranges: 90-100 (Excellent), 80-89 (Very Good), 70-79 (Good), 60-69 (Marginal), 0-59 (Poor).6 AR at 169. The adjectival ratings also describe that score range's characteristics, such as the offeror's level of understanding of solicitation requirements, the presence or absence of weaknesses and deficiencies in a proposal, and the offeror's chance of success in performance of the contract. Id. The overall goal of the rating scale was to identify "strengths and weaknesses of the offeror's proposal and [to] assess the extent to which offeror's proposed technical and management solutions fulfill the functional requirements and meet [the] FDIC's needs." Id. The solicitation noted that "[c]umulative points will reflect the quality of the offeror's proposal for Mission Capability." Id.
The solicitation sets forth several statements concerning the evaluation and selection of the "best value" proposal. First, mission capability and price are of "equal importance." AR at 168. Next, the solicitation further describes the relationship between mission capability and price:
Subjective judgment is implicit in the analysis of best value. The best value may not necessarily be represented by the lowest price offered. Price is not expected to be the most significant factor in the selection of a Contractor from this solicitation. The degree of importance of price as a factor, however, could increase depending upon how equally matched the competing proposals are for the other factors evaluated. When competing proposals are judged to be equal upon evaluation of the other factors considered in the best value analysis, total price and other price factors would become the most significant factor.
Id. The evaluation of best value is further described by this passage:
FDIC will base the award on an integrated assessment of the evaluation factors and sub-factors. FDIC has the sole discretion to determine which proposal(s) represents the best value to the FDIC. A technically acceptable offer other than the one with the lowest-evaluated price may be awarded the contract.
AR at 170. The court now turns to the evaluations of the eight proposals received by the FDIC.7
Of the eight proposals received, two failed to include a mission capability proposal, were accordingly rated unresponsive to the solicitation and were not considered for award. AR at 173, 195. Of the remaining six proposals, two received low mission capability scores, 64.2 and 27.4 points, and were notconsidered for award due to these low ratings. AR at 196. Thus, only the proposals with the highest mission capability ratings were considered viable proposals by the Technical Evaluation Panel (TEP). Of the four viable proposals, the highest priced offer, ranked third in mission capability with a score of 80.8/Very Good, was eliminated as too costly. Id. at 196-97.
The three remaining proposals received these mission capability ratings: Staples-95.9/Excellent; OfficeMax Inc. (Office Max)-92.0/Excellent; Office Depot-[]. AR at 196. The total evaluated prices for these proposals were: Office Max-$[]; Staples-$9,281, 443; Office Depot-$[].8 All three price proposals were determined to be realistic, as well. AR at 192.
The agency's description of its best value determination among these three offerors, Staples, Office Max and Office Depot, is reproduced here in its entirety:
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