In Glenn Defense Marine (Asia) PLE LTD v. United States, 720 F.3d 901 (Fed. Cir. 2013) Glenn Defense Marine (Asia) (GDMA) protested the award of a contract to Multinational Logistic Services Ltd. (MLS) for maritime husbanding support for Navy ships visiting ports in South Asia. The solicitation for proposals for the contract stated that the Navy would evaluate three factors: Technical Approach, Past Performance, and Price, with the combined nonprice factors weighted “significantly more . . . than price.” The Navy indicated that it would engage in a trade-off process and award the contract to the offeror with the best value proposal.
Evaluation of GDMA’s Past Performance
Past Performance was evaluated with the following ratings: Outstanding, Better, Satisfactory, Less than Satisfactory, and Neutral. Four of GDMA’s references and one contracting officer on a relevant project provided responses to the past performance questionnaires. On the most highly relevant contract, references gave past performance ratings of “Satisfactory” or “Better.” Despite this, the Husbanding Branch Chief on that contract rated GDMA’s overall past performance as “Satisfactory” and “Less than Satisfactory” for several subfactors, including ease of communication, timely response to problems and ability to find effective solutions, and performance within a negotiated price. In the narrative, the Husbanding Branch Chief also commented that pre-visit estimates were late, government specialists routinely needed corrections, and email responses were delayed. Two past performance letters were also issued to GDMA for not providing force protection barriers and for failure to provide a proposed pricing plan. On a moderately relevant contract where GDMA was rated as “Outstanding,” it had received a past performance letter about its customer service not being responsive.
In an initial report, the Evaluation Team assigned an overall past performance rating of “Satisfactory” but cautioned that although all references gave GDMA overall ratings of “Satisfactory” or better, those ratings were not substantiated with narrative comments. Rather, the negative comments from the reviewers’ narratives provided more support for the Less than Satisfactory category assigned for several subfactors.
After the Evaluation Team forwarded its assessment to the contracting officer, who wrote a memorandum to the Contract Review Board assigning GDMA an overall performance rating of “Satisfactory, ” but noting the negative comments, a Board member raised concerns with the contracting officer over the “Satisfactory” rating. In light of this concern, the Board Chairman noted that it may be easier to adjust the ratings downward based on the currently available negative comments rather than attempt to substantiate the “Satisfactory” rating. The Evaluation Team decided to lower GDMA’s rating to “Less than Satisfactory” to account for the negative comments. Their comments after the adjustment were similar to those in their initial reviews and were also substantiated by detailed and specific comments.
After initial evaluations, the contracting officer raised eight past performance issues with GDMA concerning the negative comments. GDMA effectively responded to one issue but did not contest or resolve concerns to the remaining seven issues. MLS was not asked any past performance questions.
In the final evaluation, GDMA and MLS had equal ratings in Technical Approach and GDMA’s past performance rating was “Less than Satisfactory” while MLS’s rating was “Better.” However, MLS’s price was $989,214.00 higher. After a trade-off analysis, the contracting officer concluded that MLS’s proposal was the best value offer and awarded the contract to MLS. GDMA filed a protest, arguing that the negative past performance comments were weighted too heavily. GDMA’s protest was denied at GAO and the Court of Federal Claims dismissed its complaint. GDMA appealed to the Federal Circuit.
Best Value Evaluation Sustained
The Federal Circuit held that the Navy’s best value determination was not arbitrary, capricious, or in violation of the law because the Navy was consistent with its solicitation in weighting the combined nonprice factors more than the price factors. Due to the negative comments on GDMA’s past performance and its failure to take corrective action, the Navy reasonably found that GDMA’s non-responsiveness could cost the Navy more in administrative costs.
Moreover, the court found that the Navy’s decisions on past performance were rationally based on evidence from the entire record. The Navy’s rating of GDMA was based on the negative comments from the narrative portions of the past performance questionnaires as well as GDMA’s less than adequate response to the Navy regarding its plan to take corrective action. In addition, the court concluded that the Navy properly considered MLS’s subcontractors’ past performance because an agency’s determination of relevance should be given due deference.
Finally, the court held that, even if GDMA had shown that the contracting officer’s past performance evaluation of GDMA was arbitrary and capricious, GDMA did not prove that the error was prejudicial, since it is not clear that GDMA would have received the contract. Even with a “Satisfactory” past performance rating, the Navy could take into account GDMA’s negative past performance comments, while MLS had none.
This decision emphasizes the considerable deference an agency has in interpreting the facts before it. Courts afford broad discretion to the agency's reviewing and analyzing of past performance questionnaires, as well as discussions between the offeror and the government regarding past performance and corrective action. In addition, it is critical for an offeror to respond as completely and effectively as possible to concerns expressed by the agency. If the contractor disagrees with the information or statements in the evaluation of its prior performance, the basis for that disagreement should be noted and explained. If it is not possible to effectively rebut the prior criticism, then the contractor should explain how it has taken corrective steps to avoid a repetition of the problem.