Seventh Dimension, LLC v. United States

SEVENTH DIMENSION, LLC, Plaintiff, v. THE UNITED STATES, Defendant.

No. 21-2275C

United States Court of Federal Claims

May 4, 2022

Reissued for Publication: May 11, 2022

Craig A. Holman, Arnold & Porter Kaye Scholer LLP, Washington DC, for Plaintiff. Of counsel were Stuart W. Turner and Trevor G. Schmitt.

Rebecca S. Kruser, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington DC, for Defendant. With her on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Patricia M. McCarthy, Director, and Deborah A. Bynum, Assistant Director. Of counsel were Michael J. Farr, Commercial Litigation Field Support Center, United States Air Force Judge Advocate General's Corps, Joint Base Andrews, MD, and David V. Peterson, United States Army Special Operations Command, Fort Bragg, NC.

OPINION AND ORDER^[*]

MATTHEW H. SOLOMSON JUDGE

This case requires the Court to answer the question of whether, and under what circumstances, the government may cancel a Federal Acquisition Regulation ("FAR") part 15 procurement and start over from scratch. The facts are reminiscent of "a game of Lucy and the football from the world of Charles Schulz."^[1] Plaintiff, Seventh Dimension, LLC - after successfully achieving its desired outcome in two successive protests - was the last offeror standing in this contractor edition of Survivor. Although Seventh Dimension's proposal was highly rated, and offered a competitive price, Defendant, the United States - acting by and through the U.S. Department of the Army, Special Operations Command (the "Army" or "USASOC") - decided to pull the plug on the show, cancelling the procurement following a two-year process. Pursuant to 28 U.S.C. § 1491(b), Seventh Dimension challenges the Army's decision to cancel the solicitation for Army Special Operations Forces ("ARSOF") training support as arbitrary, capricious, an abuse of discretion, or otherwise contrary to law. The parties filed cross-motions for judgment on the administrative record pursuant to Rule 52.1 of the Rules of the United States Court of Federal Claims ("RCFC").

For the reasons set forth below, the Court agrees with Seventh Dimension and finds that the Army's decision to cancel and resolicit the procurement was improper, and that Seventh Dimension is entitled to relief.

I. FACTUAL BACKGROUND^[2]

A. The Solicitation

On March 13, 2019, the Army issued Solicitation No. H92239-19-R-0002 (the "Solicitation" or "RFP") for the ARSOF contract, as a set aside for service-disabled veteran-owned small businesses ("SDVOSB"), seeking "role player and direct support to field and situational training exercises in all ARSOF courses" for the U.S. Army John F. Kennedy Special Warfare Center and School. AR 1 (§ A.5); AR 261-62 (§ C.1). The Solicitation informed potential offerors that the Army intended to issue a single-award, indefinite-delivery, indefinite-quantity ("IDIQ") contract, under which firm fixed-price ("FFP") task orders would be issued, with a performance period covering a thirty-day phase-in period, an eleven-month base period, and four one-year option periods. AR 140 (§ G); AR 142; AR 262 (§ C.1.5). The ARSOF contract had a budgeted ceiling of $200 million. AR 2 (§ B); AR 140. Proposals were due on April 19, 2019.^[3] AR 254-55 (RFP Amendment 0003). The Army amended the Solicitation fifteen times; most of these amendments were issued after proposals were due.^[4]

B. Initial Evaluations and Seventh Dimension's Pre-Award GAO Protest

The Army received nine proposals. AR 1667-68 (Source Selection Decision Document). From April 29, 2019 to May 30, 2019, the Source Selection Evaluation Board (the "SSEB") conducted initial evaluations of the proposals. AR 1668. On August 6, 2019, the Army established a competitive range of [ * * * ] offerors, including Seventh Dimension, Aquila Alliance, LLC ("Aquila"), and Reservoir International, Inc. ("Reservoir"), based on the results of the initial evaluations. AR 1668. On August 20, 2019, the Army initiated discussions, issuing evaluation notices ("ENs") and requests for final proposal revisions ("FPRs") to offerors. AR 1900 (Seventh Dimension Debrief Letter). That same day, effectively during discussions, the Army released RFP Amendment 0006. AR 340 (RFP Amendment 0006). This amendment revised the RFP to require the contractor to provide land and training facilities. AR 343 (§ C.4.3). The Army did not cancel the Solicitation due to the added land and facilities requirement, but rather set a due date for FPRs of September 20, 2019, for the [ * * * ] remaining offerors in the competitive range. AR 459 (RFP Amendment 0008).^[5]

On September 19, 2019, Seventh Dimension filed a pre-award solicitation protest with the Government Accountability Office ("GAO"), challenging Amendment 0006 on the grounds that it: "(1) does not reflect the [Army]'s actual need for training facilities; (2) arbitrarily assesses the training facility on a pass/fail basis; (3) fails to consider the cost impact to the government of a remote training facility; and (4) does not consider National Environmental Policy Act (NEPA) requirements." Seventh Dimension, LLC, B-417630.2, 2020 CPD ¶ 12, 2019 WL 7503309, at *3 (Comp. Gen. Dec. 26, 2019). While this GAO protest was pending, the SSEB continued its evaluation process. AR 1668.

On December 26, 2019, the GAO denied Seventh Dimension's protest, finding that: (1) Amendment 0006 reflects the needs of the Army and provides sufficient detail for the offerors to prepare their proposals; (2) the Army's decision to evaluate the training facility requirement on a pass/fail basis was within the Army's discretion, especially considering the Army's assertion that "its facilities requirement[] [is] minimal in nature" and "is only estimated to be a small portion of the contract value"; (3) the Army has sufficiently "explain[ed] that it considered the logistical costs" and that "the potential cost impact would be nominal"; and (4) the Solicitation does "require[] offerors to provide a detailed description of their ability to provide the training facilities in accordance with the [S]olicitation's revised requirements" and the Army acted within its discretion in not requiring offerors to "demonstrate their capability to satisfy NEPA requirements." Seventh Dimension, 2019 WL 7503309, at *4-8 (emphasis added).

C. First Award and Seventh Dimension's SBA Protest

Following the GAO's decision, in January 2020, the SSEB provided its final evaluation results, including a trade-off analysis, to the Source Selection Advisory Council ("SSAC") Chair, "who reviewed the evaluation results to ensure that the evaluation process followed the evaluation criteria and the ratings were accurately and consistently applied." AR 1668. On January 28, 2020, the Source Selection Authority ("SSA") issued his source selection decision "[b]ased on his independent review of all the documents and review of the trade-off analysis conducted by the [SSEB] and the [SSAC] Chairperson," and selected Aquila for award. AR 1668-69.

On February 3, 2020, Seventh Dimension filed a protest with the Small Business Authority ("SBA"), challenging Aquila's status as an SDVOSB. Seventh Dimension, LLC, SBA No. VET-6057, 2020 WL 3411520, at *2 (June 11, 2020). On April 3, 2020, the Director of the Office of Government Contracting ("D/GC") of the SBA denied Seventh Dimension's protest. Id. at *1. On April 16, 2020, Seventh Dimension filed an appeal with the SBA Office of Hearings and Appeals ("OHA"), requesting a reversal or a remand. Id. On June 11, 2020, OHA granted Seventh Dimension's appeal and reversed the D/GC's decision, finding that Aquila is not an eligible SDVOSB. Id. at *15. As a result, on June 24, 2020, the Army concluded that Aquila was ineligible for award and retracted its selection decision. AR 1669. D. Second Award and Seventh Dimension's Post-Award GAO Protest

Upon conclusion of the SBA protest and the Army's withdrawing its award to Aquila, the Army established a new competitive range and resumed the source selection process. AR 1669. In particular, on October 19, 2020, the Army eliminated [ * * * ] additional offerors from the procurement, thereby forming a second competitive range [ * * * ] Seventh Dimension and Reservoir. AR 1669. Additionally, the Army issued price ENs to Reservoir and Seventh Dimension, with FPRs due on October 26, 2020. AR 1425- 28 (Competitive Range / Evaluation Notices); AR 1669. From November 9-11, 2020, the SSEB evaluated Seventh Dimension and Reservoir's respective FPRs. AR 1669. On December 4, 2020, the SSAC issued its report and recommended awarding the contract to Reservoir. AR 1651-66 (SSAC Comparative Analysis and Recommendation for Award). On December 23, 2020, the SSA adopted the SSAC's recommendation and selected Reservoir for award. AR 1667-78. On February 16, 2021, the Army formally awarded the ARSOF contract to Reservoir and notified Seventh Dimension of its decision. AR 1679-1826 (Contract No. H92239-21-D-0001); AR 1894 (Notice of Award).

On March 8, 2021, Seventh Dimension filed a post-award protest with the GAO, raising numerous challenges to the Army's decision to award the contract to Reservoir.^[6]AR 1827-89 (GAO Post-Award Protest). Among other grounds, Seventh Dimension alleged that Reservoir [ * * * ] the required key personnel (or the Army unreasonably evaluated Reservoir's proposed key personnel) and that Reservoir's proposal contained [ * * * ] related to the proposed training facility. AR 1827-64.

In response to Seventh Dimension's protest, the Army sent a letter to Reservoir on March 16, 2021, requesting information concerning Reservoir's key personnel and its proposed training facility. AR 2954-55 (Army Request...