Safeguard Base Operations, LLC v. United States

• Decision Date: 04 March 2021
• Docket Number: 2019-2261
• Parties: SAFEGUARD BASE OPERATIONS, LLC, Plaintiff-Appellant v. UNITED STATES, B&O Joint Venture, LLC, Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

989 F.3d 1326

SAFEGUARD BASE OPERATIONS, LLC, Plaintiff-Appellant

v.UNITED STATES, B&O Joint Venture, LLC, Defendants-Appellees

2019-2261

United States Court of Appeals, Federal Circuit.

Decided: March 4, 2021

Alex Daniel Tomaszczuk, Pillsbury Winthrop Shaw Pittman LLP, Los Angeles, CA, argued for plaintiff-appellant. Also represented by Kevin Reza Massoudi, Aaron Ralph ; Alexander Brewer Ginsberg, McLean, VA.

P. Davis Oliver, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. Also represented by Jeffrey B. Clark, Robert Edward Kirschman, Jr., Douglas K. Mickle; James Calvin Caine, Federal Law Enforcement Training Centers, United States Department of Homeland Security, Glynco, GA.

Richard William Arnholt, Bass Berry & Sims PLC, Washington, DC, for defendant-appellee B&O Joint Venture, LLC. Also represented by Brian Iverson, Todd Overman, Roy Talmor, Sylvia Yi.

Before Prost, Chief Judge, Newman and O'Malley, Circuit Judges.

Dissenting opinion filed by Circuit Judge Newman.

O'Malley, Circuit Judge.

This is a bid protest case involving, inter alia , an implied-in-fact contract claim in the procurement context. Disappointed offeror Safeguard Base Operations, LLC ("Safeguard") appeals the final judgment of the United States Court of Federal Claims ("Claims Court") in favor of the eventual contract awardee, B&O Joint Venture, LLC ("B&O"), and the United States ("Government"). During the proposal evaluation process, the Government eliminated Safeguard's proposal from consideration because Safeguard omitted pricing information for sixteen contract line item numbers ("CLINs") totaling $6,121,228.

On appeal, Safeguard asserts that the Claims Court erred by determining that the solicitation at issue required offerors to submit that pricing information and by determining that the solicitation provided notice that elimination was possible if that pricing information was omitted. Safeguard also contends that, even if it were required to submit the missing pricing information, the Claims Court erred by finding the omissions to be material and not subject to waiver or clarification. Finally, Safeguard contends that the Claims Court erred by denying its email request to supplement the administrative record through discovery and by denying its motion to supplement the administrative record with affidavits. Safeguard contends that these additional materials would establish that those evaluating its proposal failed to fairly and honestly consider it. Because the Claims Court did not err in any of those respects, we affirm.

In so doing, we also address a question of first impression—whether the Claims Court has jurisdiction over a claim that the Government breached an implied-in-fact contract to fairly and honestly consider an offeror's proposal in the procurement context. That question has received conflicting answers from different Claims Court judges. We address it and conclude that the Claims Court has such jurisdiction under 28 U.S.C. § 1491(b)(1), making the issue reviewable under the Administrative Procedure Act ("APA").

I. BACKGROUND

This appeal requires a detailed background discussion. In particular, we discuss the solicitation at issue, the evaluation process, and the proceedings before the Claims Court. For a more exhaustive background, see Safeguard Base Operations, LLC v. United States , 144 Fed. Cl. 304 (2019).

A. The Solicitation

On October 11, 2017, the Department of Homeland Security ("Government") issued Solicitation No. HSFLGL-17-R-00001 (the "Solicitation") as a Request for Proposal ("RFP"). The Government sought to award a valuable, potentially multi-year contract for dorm management services at the Federal Law Enforcement Training Center in Glynco, Georgia. The Solicitation contemplated an initial base period of performance, followed by up to seven twelve-month option periods.

The Solicitation outlined a commercial item acquisition for a firm-fixed price contract. The acquisition and source selection were to be conducted, inter alia , under Federal Acquisition Regulations ("FAR"), Parts 12 and 15 using the best value source selection process.¹ The Government was required to evaluate proposals based on several non-price factors as well as price. The non-price factors were approximately equal in importance to the price factor.

Beyond these general terms, there are several portions of the Solicitation that are relevant to this appeal—(1) the pricing provisions, (2) Schedule B, (3) the elimination provisions, and (4) the clarification and waiver provisions.

1. Pricing Provisions

At a minimum, proposals had to show "price and any discount terms." J.A. 1502.² The Solicitation explained that "[t]he Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement." J.A. 1514. Price was to be evaluated using "one or more of the price analysis and/or cost realism techniques outlined in FAR 15.305 and 15.404." J.A. 1519. Further, the Solicitation provided that "[p]rice will be evaluated to determine if the offeror's proposed price is fair and reasonable, complete, balanced and/or realistic." J.A. 1519. "Completeness/Accuracy" meant that "[t]he offeror's proposal is in compliance with the Price Volume instructions in the solicitation." J.A. 1519. Those instructions required a "detailed breakdown" of proposed costs by CLIN and a "completed Schedule B." J.A. 1513. If there was a discrepancy between the price proposal and Schedule B, then Schedule B governed.

2. Schedule B

Schedule B, which contained the basic terms of the proposed bargained-for exchange, made up the first 30 pages of the Solicitation. In it, the Government listed the supplies/services it sought from offerors by CLIN and included blank spaces for offerors to submit what they would charge in exchange for providing those supplies/services.

The CLINs were four-digit numbers sometimes accompanied by two letters in ascending order—e.g., 0001, 0002, 0002AA, 0002AB, etc.³ The first digit of each CLIN corresponded to the relevant period of performance. For example, any CLIN with an initial digit of zero concerned the base period, while any CLIN with an initial digit of one concerned the first twelve-month option period. The Solicitation followed this pattern for all seven option periods, repeating the description of each supply/service for each period. For example, the description of a supply/service for CLIN 0001 matched the description of the same supply/service for CLINs 1001, 2001, 3001, 4001, 5001, 6001, and 7001.

Each CLIN had a corresponding quantity and unit as well as blank spaces for offerors to provide the unit price and amount.

As originally issued, the Solicitation in Schedule B pointedly instructed offerors "*****DO NOT SUBMIT PRICING FOR THESE CLINS*****" for sixteen CLINs, numbered X007AA and X007AB.⁴ For those CLINs, the Solicitation informed offerors that the Government itself had provided the relevant amounts—even though such information was missing.

Although Schedule B did not contain the necessary amounts, the Solicitation still required that offerors submit subtotals for all CLINs in each time period as well as a grand total for all CLINs in all time periods. Obviously, it would have been impossible for an offeror to submit accurate subtotals or grand totals without the missing amounts.

At least one potential offeror inquired about the missing amounts. In response, the Government provided the amounts for each of the 16 CLINs to all offerors and explained that, "For bidding purposes please include the following ‘not-to-exceed’ amounts in the applicable CLIN." J.A. 2223 (Government's response to Question 9 referencing the Section B Price Schedule and Schedule B). See also J.A. 2225 (Question 16 concerned a similar issue in the context of Volume 3—Price, and the Government referenced its response to Question 9). While this information was clearly noted in the question and answer portion of Amendment No. 0003, Schedule B itself was never amended.

Notably, the Government responded to several additional questions concerning CLINs X007AA and/or X007AB, and the questions typically referenced the CLINs as appearing in "Schedule B" of the "Section B Price Schedule." See, e.g. , J.A. 2223 (Questions 7 and 8). Several questions referenced the "Section B Price Schedule" without referencing "Schedule B" while referring to specific CLINs from Schedule B. See, e.g. , J.A. 2224–25 (questions 11–16). One question referenced the "Section B Price Schedule" while referring to Government forms that only appeared in Schedule B. See J.A. 2223 (Question 6).

3. Elimination Provisions

In general, the Solicitation specified that any noncompliance with its terms and conditions "may cause [an offeror's] proposal to be determined unacceptable or be deemed non-responsive and excluded from consideration." J.A. 1507 (quoting Addendum to FAR 52.212-1(b)(1) ). More specifically, elimination was possible under a provision in a portion of the Solicitation labeled ‘Section A Solicitation General Information.’ That provision stated: "Pricing Schedule and Periods of Performance (POP) Service dates for each CLIN are detailed in Section B. Note: Exceptions to line item structure in Section B may result in a bid not considered for award ." J.A. 1350 (emphasis added).

Although the preceding warning was clear, it was also unusual because the portion of the Solicitation labeled ‘Section B Price Schedule’ did not appear to contain any "line item structure" or pricing schedule and period of performance service dates for "each CLIN." The only such details were found in Schedule B.

4. Clarifications and Waiver Provisions

According to the Solicitation, the Government intended to award a contract based on its evaluation of the proposals "without discussions with offerors." Although the Government reserved the right to conduct discussions if it later...