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6a52a52e-0049-4b2c-b3eb-04ed5a91d079 | . establish clearly the relative importance assigned to the evaluation factors and subfactors, including the quality of the product or services to be provided (including technical capability, management capability, prior experience, and past performance of the offeror)”); 13 C.F.R. § 125 | Sh_Synergy,_LLC_2023-04-28.txt |
9e9bfc63-6acb-463d-b414-40b27c31421c | .2(b)(1)(iii)(D) (discussing “evaluation factors” for “evaluating the offerors’ proposed approach to small business subcontracting participation”). For example, FAR 15.304 is titled “Evaluation factors and significant subfactors” and is included among the FAR provisions outlining the source selection procedures for competitive negotiated acquisitions. See FAR 15.304 | Sh_Synergy,_LLC_2023-04-28.txt |
d0f2827a-73d0-46c6-8f6a-f6afe53bdc7f | . The provision states that “[t]he award decision is based on evaluation factors and significant subfactors that are tailored to the acquisition.” FAR 15.304(a). “Evaluation factors and significant subfactors must . . . [r]epresent the key areas of importance and emphasis to be considered in the source selection decision; and . . | Sh_Synergy,_LLC_2023-04-28.txt |
07b5cf4c-86d2-41a9-b8b0-349b3a068ba7 | . [s]upport meaningful comparison and discrimination between and among competing proposals.” FAR 15.304(b). Likewise, FAR 15.305(a), which addresses “Proposal evaluation” for competitive negotiated acquisitions, states: “An agency shall evaluate competitive proposals and then assess their relative qualities solely on the factors and subfactors specified in the solicitation | Sh_Synergy,_LLC_2023-04-28.txt |
eb3c4b54-4294-4dd2-ac3b-d04e09957358 | . Evaluations may be conducted using any rating method or combination of methods, including color or adjectival ratings, numerical weights, and ordinal rankings.” FAR 15.305(a). Finally, FAR 15.306(c), which discusses the establishment of a competitive range in competitive negotiated procurements, states that “[a]gencies shall evaluate all proposals in accordance with 15 | Sh_Synergy,_LLC_2023-04-28.txt |
05925f68-947e-4fee-8f7b-f2f65af70772 | .305(a), and, if discussions are to be conducted, establish the competitive range. Based on the ratings of each proposal against all evaluation criteria, the contracting officer shall establish a competitive range comprised of all of the most highly rated proposals . . . .” FAR 15.306(c)(1) (emphasis added) | Sh_Synergy,_LLC_2023-04-28.txt |
8c037bd8-d404-468a-a4af-200583d65fb3 | . This last provision draws a direct link between the term “evaluation criteria” and the specific “evaluation factors” and “evaluation subfactors” included in solicitations that agencies use to make source selection decisions | Sh_Synergy,_LLC_2023-04-28.txt |
96276206-f6ff-481c-8176-8de476934b1a | . 29 Though not binding on this Court, statements made by GAO in Innovate Now are instructive in their concision: “The plain language of the regulation is clear; a procuring agency may not require a protégé firm to individually meet the same evaluation requirements as those imposed on other offerors.” Innovate Now, LLC, B-419546, 2021 WL 1610896, at *2 (Comp. Gen. Apr. 26, 2021) | Sh_Synergy,_LLC_2023-04-28.txt |
e7474e36-00db-4e6a-acc5-a0760589b069 | . 46 Defendant argues that the Polaris Solicitations do not subject protégé firms to the same evaluation criteria as other offerors purely because protégés must only submit one Relevant Experience project, whereas other offerors must submit at least three Primary Relevant Experience Projects. Cross-MJAR at 38 | Sh_Synergy,_LLC_2023-04-28.txt |
322c5806-2994-4238-872e-55b86bd026b6 | . However, this assertion glosses over the way in which GSA intends to evaluate Relevant Experience Projects under the Solicitations. To self-score their proposals for Relevant Experience, offerors (with later verification by GSA) assess each Relevant Experience Project on an individual basis to determine how well each project satisfies the Solicitations’ various evaluation requirements | Sh_Synergy,_LLC_2023-04-28.txt |
bb9a2895-70ad-402c-89d7-798b2735400f | . See AR at 1113–18, 2153–58, 2644–49. Points are awarded to an offeror for each sub-factor that the offeror’s projects satisfy. See AR at 1113–18, 2153–58, 2644–49. The points, therefore, offer a numerical representation of the degree to which each project fulfills the terms of the Solicitations | Sh_Synergy,_LLC_2023-04-28.txt |
36fa0bbb-7974-498a-a859-62b41353368a | . Some points are awarded based on a project’s individual compliance with certain sub- factors on the scoring table. For example, “[f]or each Relevant Experience Project submitted under L.5.2.2, the Offeror will receive additional points if the Project is a task order awarded against a Federal Government multiple-award contract . . . .” AR at 1099, 2138, 2630 | Sh_Synergy,_LLC_2023-04-28.txt |
84fc6abe-7c1c-4d6f-83d5-6051ea38e12c | . Thus, each project submitted can earn additional points simply by virtue of being a task order on another multiple- award contract. A similar situation exists for the sub-factor designed to evaluate each project’s size. AR at 1098, 2137, 2628. Under the Solicitations, “[f]or each Relevant Experience Project submitted under L.5.2 | Sh_Synergy,_LLC_2023-04-28.txt |
370f2220-22c6-4912-b400-c1d8b98b12fe | .2, the Offeror will receive additional points for Project values as specified in Section M.6, Polaris Scoring Table.” AR at 1098, 2137, 2628. Below is a depiction of the scoring table for the project size sub-factor. See AR at 1116, 2156, 2647 | Sh_Synergy,_LLC_2023-04-28.txt |
18e3744d-394a-4d81-9072-96f7de4531f5 | . 47 Under the scoring table, an offeror can earn a greater number of additional points toward its total score by submitting projects with larger contract values. Thus, each project with a value of $1 million would earn the offeror an additional 500 points for Relevant Experience, whereas each project with a value of $10 million would earn an additional 3,000 points. See AR at 1116, 2156, 2647 | Sh_Synergy,_LLC_2023-04-28.txt |
2bc0900b-1ef8-4aea-8b8c-9dfac9f75298 | . As the graphic demonstrates, an offeror can add an additional 15,000 points out of the 95,000 total points just by submitting projects with high contract values. In other cases, offerors earn points toward their total Relevant Experience score based on the total number of projects an offeror submits that successfully demonstrate a specific evaluation criterion | Sh_Synergy,_LLC_2023-04-28.txt |
bad463c3-faa6-4724-8695-8a04a8edc7d5 | . This is the case for the sub-factor that assesses the offeror’s experience working with various federal government customers. Below is a depiction of the scoring table for this sub-factor. See AR at 1117, 2157, 2648. Under the Solicitations, an offeror can earn added points “for each additional unique Federal Government Customer represented beyond the first unique Federal Government Customer | Sh_Synergy,_LLC_2023-04-28.txt |
a75b9a04-3266-402c-b3f5-0bfbe1d8b1ea | .” See AR at 1098, 2137, 2629. Thus, an offeror whose projects include two unique government 48 customers can earn 500 additional points, whereas an offeror whose projects include five unique government customers can earn 2,000 additional points. AR at 1098, 2137, 2629. A similar regime applies to the sub-factor assessing the breadth of an offeror’s relevant experience | Sh_Synergy,_LLC_2023-04-28.txt |
b746c3dd-5b05-4cc6-ad5d-6a2e937493ad | . See AR at 1100, 2139, 2631 (“The Offeror will receive additional points for each additional [North American Industry Classification System] area with demonstrated relevant experience.”) | Sh_Synergy,_LLC_2023-04-28.txt |
18e3b456-ec63-4997-8da3-a4bbae333ba3 | . By focusing its argument on the number of projects protégé firms must submit relative to offerors generally, Defendant ignores the crucial point that the same evaluation methods and criteria apply to all projects, regardless of whether the project is submitted by a protégé or another offeror. The evaluation process under the Polaris Solicitations occurs on a project-by-project basis | Sh_Synergy,_LLC_2023-04-28.txt |
6e8fe9ab-ec45-4a4a-b91f-39ed6897b6c4 | . Under either scoring method described above, protégé firms and prime contractors alike must assess whether each project, on its own, meets the Solicitations’ desired evaluation sub-factors and award points accordingly | Sh_Synergy,_LLC_2023-04-28.txt |
21e5776c-00f0-4fe9-a7a8-b9ffddfb555a | . Therefore, though the protégé firm need only submit one Relevant Experience Project under the Polaris Solicitations, that single protégé project will be evaluated in precisely the same manner, and based on precisely the same criteria, as all other projects submitted under the Polaris Solicitations | Sh_Synergy,_LLC_2023-04-28.txt |
e288dcf2-8ecb-43c7-aafd-78ebb0865ce1 | . Thus, the Polaris Solicitations convey the expectation that the protégé firm’s Relevant Experience Project should be able to demonstrate the same contract value, the same breadth of relevant or emerging technology experience, and the same variety of government customers as projects submitted by offerors generally. This is the exact scenario Section 125.8(e) prohibits | Sh_Synergy,_LLC_2023-04-28.txt |
5f053601-fc1e-49aa-8b2a-cb3daa140fb7 | . GSA cannot avoid violating Section 125.8(e) simply by reducing the minimum number of projects the protégé firm must submit when the tools, methods, and criteria used to evaluate the protégé firm’s project are “the same . . . as that required of other offerors generally.” 13 C.F.R. § 125.8(e). Such a regime conflicts with the plain language of Section 49 125 | Sh_Synergy,_LLC_2023-04-28.txt |
3d385641-be06-4663-a263-1929b28de46a | .8(e), which prohibits agencies from requiring protégé firms to “meet the same evaluation . . . criteria” as other offerors generally.30 13 C.F.R. § 125.8(e). That the Polaris Solicitations allow either the protégé or the offering mentor-protégé JV to submit an individually performed project for consideration does not alter this Court’s analysis | Sh_Synergy,_LLC_2023-04-28.txt |
164ef39c-7d9f-4117-96f1-bfc6bbb4bf09 | . The terms of the Polaris Solicitations blur the line between a Relevant Experience Project submitted by the protégé firm and one submitted by the offering mentor-protégé JV | Sh_Synergy,_LLC_2023-04-28.txt |
f289186d-84b6-412a-b830-ee0af54713a6 | . Specifically, the Solicitations include a provision instructing the agency that “[a]n Offeror (to include members of a joint venture and proposed subcontractors) may use experience performed as a member of a joint venture” to fulfill the Solicitations’ Relevant Experience requirements | Sh_Synergy,_LLC_2023-04-28.txt |
4ec4688a-2a71-4772-8b92-ec0b9be369f1 | . AR at 1090, 2129, 30 Defendant suggests the fact that protégé firms may submit either a Primary Relevant Experience Project or an Emerging Technology Experience Project prevents the Polaris Solicitations from violating Section 125.8(e). See Cross-MJAR at 47 (“Notably, GSA does not require that the required protégé project be one of the five Primary Relevant Experience projects. . . | Sh_Synergy,_LLC_2023-04-28.txt |
7bb28bd9-b09e-469a-8c9d-5737d474eb27 | . [T]he protégé’s requirement can be met via submission of one of three optional Emerging Technology projects performed by the protégé or the offering Joint Venture itself.”); Oral Arg. Tr. at 62:11–15 (Defendant’s Counsel: “The protégé doesn’t have to show up with one primary experience. It doesn’t have to show up with the experience of doing a project | Sh_Synergy,_LLC_2023-04-28.txt |
2b341eb9-9fa3-4872-83e1-8d939861c047 | . It can show up with just having an expertise in quantum computing.”). Implicit in Defendant’s statements is the notion that the choice between submitting either a Primary or Emerging Technology Relevant Experience Project somehow introduces flexibility for protégés and represents a less stringent evaluation criterion than applied to offerors generally | Sh_Synergy,_LLC_2023-04-28.txt |
f641d7cd-f1d7-4aa0-929b-b52c69a3807b | . However, these sentiments are belied by statements made by Defendant’s Counsel during Oral Argument that acknowledge the rarity among small business contractors of projects demonstrating emerging technologies. See, e.g., Oral Arg. Tr | Sh_Synergy,_LLC_2023-04-28.txt |
38f42f95-245c-430d-820d-512e9c66cb7d | . at 49:20– 50:6 (“[V]ery few offerors will be able to obtain the maximum amount of emerging technology experience points given the very nature of these emerging technologies. . . . The emerging technology experiences included past experience with artificial intelligence, edge computing, immersive technology, advanced and quantum computing. So that’s right | Sh_Synergy,_LLC_2023-04-28.txt |
65d3fad2-cc5b-4533-9e67-4cfb459d54c1 | . Not everybody is going to be able to do it. A small business, they’re not all going to be [able to] do that.”) | Sh_Synergy,_LLC_2023-04-28.txt |
d85eb93f-5cd7-4ed6-a6f5-f95fb0bc7164 | . Nevertheless, regardless of the inherent difficulties in claiming Emerging Technology Relevant Experience, the criticisms articulated in this Court’s Memorandum and Order apply to the Polaris Solicitations’ evaluation of all Relevant Experience Projects, whether Primary or Emerging Technology: the Solicitations contemplate applying the same evaluation criteria to all Relevant Experience Projects | Sh_Synergy,_LLC_2023-04-28.txt |
40fb94ba-2400-4b8e-a227-c30a02888b97 | submitted by protégé firms and other offerors alike | Sh_Synergy,_LLC_2023-04-28.txt |
ed1adfc9-3fba-439c-ae61-57f43300fed6 | . The choice to hold a protégé firm’s Relevant Experience Projects to the same standards as projects submitted by offerors contradicts Section 125.8(e) and accordingly is contrary to law. 50 2621. Accordingly, under the terms of the Solicitations, the protégé may already claim any project performed by the offering mentor-protégé JV as its own Relevant Experience Project. See Pl. Reply at 19 n.5 | Sh_Synergy,_LLC_2023-04-28.txt |
810c5480-5013-4473-b622-7b86647a4035 | . (“[T]he requirement that either the protégés [sic] mentor-protégé joint venture or its protégé submit a Relevant Experience project is an empty distinction because if the protégé’s joint venture already had that experience, the protégé would still be able to claim it on its own under the terms of the Solicitations.”) | Sh_Synergy,_LLC_2023-04-28.txt |
10ec0354-76f8-49b5-9d43-23956504c56c | . Though the Solicitations appear to offer mentor-protégé JVs a choice, the choice is rhetorical rather than functional: allowing mentor-protégé JV offerors to submit projects performed by “the offering Mentor-Protégé Joint Venture” does nothing to change or expand the field of available projects eligible for submission. AR at 1088, 2127, 2619 | Sh_Synergy,_LLC_2023-04-28.txt |
7d8e1a30-c353-401c-b26b-3a9f0f7bf2f0 | . Either way, the protégé firm’s project is subject to evaluation by the agency, and that project is assessed against the same evaluation criteria used to evaluate projects submitted by offerors generally. As Plaintiffs’ counsel aptly stated during Oral Argument, the Solicitations’ terms offer “a distinction without a difference.” Oral Arg. Tr. at 28:23–24 | Sh_Synergy,_LLC_2023-04-28.txt |
e4356576-ea8e-442e-98c4-bb325cdd483d | . For the Polaris procurement to proceed, the agency must adjust the evaluation criteria it applies to assess a protégé firm’s Relevant Experience Project. Agencies “are entitled to exercise discretion upon a broad range of issues confronting them in the procurement process” so long as agency choices comply with existing law. Savantage Fin. Servs., Inc. v. United States, 595 F.3d 1282, 1286 (Fed | Sh_Synergy,_LLC_2023-04-28.txt |
dc56153d-878b-4a01-b999-0dafebc728d6 | . Cir. 2010) (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)); see FAR 1.102(d) (granting agencies discretion to design procurements in the best interests of the agency and within the bounds of the law). Thus, this Court need not prescribe the precise changes GSA must adopt going forward | Sh_Synergy,_LLC_2023-04-28.txt |
871ed842-81a6-47de-8464-dc5d4a9188f8 | . Instead, this Court only offers suggestions for alternative evaluation methods that would address the defects identified in the current Solicitations, consistent with applicable law. 51 For example, as Plaintiffs have suggested, GSA could award protégé firms maximum points for projects with smaller contract values. See Oral Arg. Tr | Sh_Synergy,_LLC_2023-04-28.txt |
07351467-8889-4357-9cff-7fa9ebc9b8b8 | . at 34:7–11 (“One way, for example, would be to reduce the value of the contracts for the mentor-protégé or protégé. So it doesn’t have to be ten million to get the maximum points, it would have to be one million.”). Another alternative could be to award a small point premium to protégé projects for each evaluation criterion satisfied | Sh_Synergy,_LLC_2023-04-28.txt |
62830d2a-dabf-445a-8235-300c34933f4b | . Finally, as a third and perhaps more sweeping adjustment, GSA could allow the protégé firm’s project to be submitted in addition to the three to five Primary Relevant Experience Projects and the potentially three Emerging Technology Relevant Experience Projects already contemplated under the Solicitations | Sh_Synergy,_LLC_2023-04-28.txt |
bdf4db48-57d6-40f4-8526-3b0ae854333d | . This project could then be evaluated on a pass/fail basis based on whether the project complies with the Solicitations’ evaluation criteria and demonstrates the necessary experience to fulfill the protégé firm’s 40% performance requirement contained in 13 C.F.R. § 125.8(c). See 13 C.F.R. § 125 | Sh_Synergy,_LLC_2023-04-28.txt |
2173e4ae-ccc9-463c-b843-1a92eaef8c98 | .8(c)(1) (“[T]he small business partner to the joint venture must perform at least 40% of the work performed by the joint venture.”). However, whatever adjustments GSA makes to the evaluation criteria applicable to the protégé may not force protégé firms to experience a heightened or more onerous burden than what offerors generally face. See 13 C.F.R. § 125.8(e); see, e.g | Sh_Synergy,_LLC_2023-04-28.txt |
69c8cc1d-7b5b-4350-96f3-e327c52b3ecf | ., SHS MJAR at 29 (“[T]he Agency is prohibited from holding protégés to the same or heightened evaluation requirement.”) (emphasis in original); VCH MJAR at 29 (same); Oral Arg. Tr. at 72:5–12 (Court: “[W]ould you agree that it would not be okay to impose a heightened requirement on the protégés?” Defendant’s Counsel: “[I]f that were the case here, then, right, we’d be violating 125.8(e).”) | Sh_Synergy,_LLC_2023-04-28.txt |
e044dfe5-a626-4469-90d9-352f85ff8ad9 | . Indeed, such a change would be inconsistent with the express goal of the Mentor-Protégé Program “to improve the protégé firms' ability to successfully compete for federal contracts.” 13 C.F.R. § 125.9(a). 52 For the reasons set forth above, this Court agrees with Plaintiffs that the Polaris Solicitations as currently drafted violate 13 C.F.R. § 125 | Sh_Synergy,_LLC_2023-04-28.txt |
14938cac-3222-495d-8baa-4ef80d92c38c | .8(e) by applying the same evaluation criteria to projects submitted by protégé firms and other offerors alike. Should Defendant proceed with the Polaris procurement, it must amend the current Solicitations to comply with 13 C.F.R. § 125.8(e), in a manner consistent with this Memorandum and Order. III. The Polaris Solicitations Violate Federal Procurement Law by Inappropriately Relying on 41 U.S.C | Sh_Synergy,_LLC_2023-04-28.txt |
596aff10-2515-4b38-a6f2-6d6e715cf137 | . § 3306(c)(3) to Exclude Price as an Evaluation Factor at the IDIQ Level. In their third claim, Plaintiffs argue GSA’s decision not to evaluate price at the IDIQ level under the Polaris Solicitations violates federal procurement statute 41 U.S.C. § 3306(c). See SHS MJAR at 34–37; VCH MJAR at 34–37; see also 41 U.S.C. § 3306(c)(1)–(3). To reiterate, 41 U.S.C | Sh_Synergy,_LLC_2023-04-28.txt |
332dbd05-b4b2-4468-874e-5074d93cd404 | . § 3306(c)(1)(B) requires agencies to “include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals” for every procurement “except as provided in paragraph (3).” 41 U.S.C. § 3306(c)(1)(B). In 41 U.S.C | Sh_Synergy,_LLC_2023-04-28.txt |
eee8345f-3f73-4655-8655-41b414b111f4 | . § 3306(c)(3), Congress carved out a narrow exception to the general rule requiring price evaluations for “certain indefinite delivery, indefinite quantity multiple-award contracts . . . . for services acquired on an hourly rate basis” that will “feature individually competed task or delivery orders based on hourly rates.” 41 U.S.C. § 3306(c)(3) | Sh_Synergy,_LLC_2023-04-28.txt |
b2493bf3-07b8-4256-bf4f-6800dacaf970 | . For such a procurement, the procuring agency need only evaluate “cost or price to the Federal Government . . . in conjunction with the issuance . . . of any task or delivery order,” rather than at the IDIQ level. 41 U.S.C. § 3306(c)(3)(B). GSA issued Class Deviation CD-2020-14 on August 14, 2020, to informally amend the language in FAR Subpart 16 | Sh_Synergy,_LLC_2023-04-28.txt |
a17421f2-46e6-442c-a9f5-30d2e9e9fbcf | .5, which addresses IDIQ contracts, to adopt the exception found in Section 3306(c)(3). See Class Deviation CD-2020-14. Accordingly, on March 18, 2022, GSA approved the Polaris Solicitations for application of Class Deviation CD-2020-14, affirming GSA’s ability to exclude 53 price as an evaluation factor for the IDIQ contracts issued under the Polaris Solicitations. See Supplement 2, AR at 2904 | Sh_Synergy,_LLC_2023-04-28.txt |
5baecc20-ff7f-47b4-92cf-2e245008c940 | . Plaintiffs assert that in designing the Polaris Solicitations, GSA relied on an erroneous interpretation of 41 U.S.C. § 3306(c)(3) that ignores the statute’s plain and unambiguous language. SHS MJAR at 35–36; VCH MJAR at 35–36. Plaintiffs argue that Defendant has adopted an overly broad interpretation for when a contract qualifies as being “based on hourly rates | Sh_Synergy,_LLC_2023-04-28.txt |
230bc2f6-381c-4817-b092-c3b9647e747b | .” See SHS MJAR at 36–37; VCH MJAR at 36–37. Plaintiffs aver that under the statute’s plain language, a contract only qualifies as “based on hourly rates” when services are procured and paid using hourly rates, which is only the case for time-and-materials and labor-hour contracts. See SHS MJAR at 36–37; VCH MJAR at 36–37 | Sh_Synergy,_LLC_2023-04-28.txt |
49a09721-4d49-41ac-9999-2c55d7ef0341 | . According to Plaintiffs, because the Polaris Solicitations contemplate task order contract types other than time-and-materials and labor-hour contracts — such as fixed-price, cost-reimbursement, and incentive contracts — the Polaris Solicitations are ineligible for the exception housed in Section 3306(c)(3) and must instead evaluate price at the IDIQ level | Sh_Synergy,_LLC_2023-04-28.txt |
5ea545ab-314e-4697-955d-6f3aa4ee4ca0 | . See SHS MJAR at 36–37 (criticizing the Solicitations’ inclusion of fixed-price, incentive, and cost reimbursement contract types); VCH MJAR at 36–37 (same) | Sh_Synergy,_LLC_2023-04-28.txt |
474fbc1f-06a2-45ae-817f-fcbb585f33e7 | . Further, Plaintiffs emphasize that any practical justifications offered by Defendant for applying the Section 3306(c)(3) exception to the Polaris Solicitations cannot override the plain and unambiguous language of Section 3306(c)(3), which clearly requires contracts and task orders “based on hourly rates.” See Pl | Sh_Synergy,_LLC_2023-04-28.txt |
ce50b90a-87e1-4d9f-8fde-27c4290e409f | . Reply at 23 (“The statute is unambiguous, and an unambiguous statute must be read according to its terms.”); Oral Arg. Tr. at 40:25–41:3 (The Court: “Do you think the statute is ambiguous?” Plaintiffs’ Counsel: “We don’t. We think that ‘based on hourly rates’ can only mean one thing.”). Defendant disagrees with Plaintiffs’ interpretation of 41 U.S.C | Sh_Synergy,_LLC_2023-04-28.txt |
f0ce6cca-5ebe-4ae3-854f-41ece79dd6ec | . § 3306(c)(3) and asserts GSA properly exercised its discretion in designing the Polaris Solicitations to exclude price as an 54 evaluation factor at the IDIQ level. Cross-MJAR at 51–58. Defendant argues the term “hourly rates” as used in Section 3306(c)(3) “does not directly correlate with a specific contract type in the FAR” and is not limited to “labor hour” contracts. Id. at 55 | Sh_Synergy,_LLC_2023-04-28.txt |
945857f6-98b7-4565-99ee-232be61dd7a3 | . According to Defendant, the Polaris Solicitations qualify for the Section 3306(c)(3) exception because the Solicitations’ approved task order types are all based upon “hourly rate build-up[s].” Id. at 54–55 | Sh_Synergy,_LLC_2023-04-28.txt |
ce4aca86-7aee-4a87-8ea6-7db1439fa541 | . Defendant further argues GSA reasonably determined task orders for such a large government procurement should not be “limited to contracts whose only payment structure is based upon an hourly-rate assessment of service . . | Sh_Synergy,_LLC_2023-04-28.txt |
000e8410-b2cc-4264-a18c-385ac4bdbd67 | . but should instead include the possibility for multiple types of task orders, each of which would have a component in the payment structure that includes, predominantly, the payment of hourly-rate costs.” Id. at 52–53 (emphasis in original) | Sh_Synergy,_LLC_2023-04-28.txt |
2608f204-4dab-4d3f-a7fc-0720f99471dd | . “[G]iven the scope of IT-related services meant to fall under the $60 billion to $100 billion Polaris GWAC,” Defendant argues Plaintiffs set “forth an interpretation of the hourly-rate requirement . . . that is unreasonable.” Id. at 52. This Court ultimately agrees with Plaintiffs, though its reasoning and conclusions do not extend as far as Plaintiffs urge | Sh_Synergy,_LLC_2023-04-28.txt |
db47baf0-bf0f-4903-baf0-f6809eafdca3 | . Defendant adopted an overly broad interpretation of 41 U.S.C. § 3306(c)(3) that does not reflect the statute’s plain and unambiguous language. Thus, the Polaris Solicitations violate federal procurement law because they do not adequately “feature” task orders “based on hourly rates,” as contemplated under 41 U.S.C. § 3306(c)(3). A | Sh_Synergy,_LLC_2023-04-28.txt |
b7e8a63b-74ba-4032-a693-7f92a4ca0111 | . Defendant Has Adopted an Unreasonable Interpretation of “Based on Hourly Rates” as Used in 41 U.S.C. § 3306(c)(3). Central to the parties’ dispute is a difference in opinion over what “task or delivery orders based on hourly rates” means within the context of 41 U.S.C. § 3306(c)(3) | Sh_Synergy,_LLC_2023-04-28.txt |
46503650-002c-4318-911b-fe8fd7356a62 | . Plaintiffs suggest task orders “based on hourly rates” are contracts for services that are procured or purchased using hourly labor rates. See SHS MJAR at 35–36; VCH MJAR at 35–36 | Sh_Synergy,_LLC_2023-04-28.txt |
8ab81ae8-888c-44ff-8736-a2d7f7f5f0fa | . Said another way, Plaintiffs contend performance under the task order must be measured by, and payment remitted in 55 accordance with, the number of hours a contractor spends working on the project to be consistent with Section 3306(c) | Sh_Synergy,_LLC_2023-04-28.txt |
6fbd9a94-ac1d-46b2-98c4-9d1281d440d4 | . Therefore, according to Plaintiffs, the only task order types appropriate for use under Section 3306(c)(3) are time-and-materials contracts and labor-hour contracts. See SHS MJAR at 36–37 (criticizing all the Solicitations’ approved contract types except the time-and- materials and labor-hour contract types); VCH MJAR at 36–37 (same) | Sh_Synergy,_LLC_2023-04-28.txt |
73795f3a-7ac7-4e55-acc2-afb7ce20d9ad | . In contrast, Defendant takes issue with Plaintiffs’ assertion that “hourly rates” inherently implicates labor hours. See Cross-MJAR at 55–56 (arguing Plaintiffs have incorrectly “swapp[ed] the statutory phrase ‘hourly rates’ for the much more precise ‘labor hour’”). Defendant suggests that a task order is “based on hourly rates” if the task orders are “based upon an hourly rate build up | Sh_Synergy,_LLC_2023-04-28.txt |
5e3b4823-0658-4da9-817b-26a72d26c3cd | .”31 Cross-MJAR at 54–55; AR at 2907–08. Thus, according to Defendant, task orders qualify for the Section 3306(c)(3) exception so long as “hourly rates for labor costs are . . . embedded in the contractor’s bid amount.” Cross-MJAR at 57. Defendant asserts that “hourly rates can certainly be embedded within” all task order contract types referenced in the Polaris Solicitations. Id | Sh_Synergy,_LLC_2023-04-28.txt |
ea447287-c72b-44d9-82e2-caa90ffbc988 | . 31 Defendant does not provide a clear definition for its reference to an “hourly rate build up.” See generally Cross-MJAR at 51–58; Def. Reply at 23–24 | Sh_Synergy,_LLC_2023-04-28.txt |
8b230ebd-5d37-4af9-b563-1877e653ea65 | . In applying the customary understanding of the term, this Court presumes that in using the phrase “hourly rate build-up,” Defendant references a contractor’s “cost build-up,” which is a tool that businesses may use to assist with pricing out products and services. See, e.g., Charles H | Sh_Synergy,_LLC_2023-04-28.txt |
d22d334d-875f-44d3-9fba-942480a7c582 | . Brandon, Management Accounting 353 (McGraw-Hill 1997) (describing the concept of a cost build-up within the context of car manufacturing). Businesses prepare cost build-ups to estimate total direct and indirect costs attributable to a future project. Id. This data informs a business’s decision on which price it should offer to maintain a reasonable profit margin. Id | Sh_Synergy,_LLC_2023-04-28.txt |
d9a76f08-eeff-4a07-8ec4-9b881cc5d66f | . Cost build-ups can be unitized, meaning the total estimated costs attributable to a project are divided by the project’s unit of delivery. See, e.g., Adams v. Standard Knitting Mills, Inc., 623 F.2d 422, 433–34 (6th Cir. 1980) (“A build-up of standard costs involves an estimate of costs per unit of goods . . . .”) | Sh_Synergy,_LLC_2023-04-28.txt |
0914f042-e019-4bee-bd1a-e2ab462288a2 | . Thus, for a services acquisition where the unit of delivery is based on labor hours, contractors estimate cost based on an hourly rate. Government agencies may request, as a term included in the solicitation, that offerors disclose data on cost with their proposals so the agency may perform realism analyses to “ensure that the final agreed-to price is fair and reasonable.” FAR 15.404-1 | Sh_Synergy,_LLC_2023-04-28.txt |
79398397-de1c-4ecf-bc6f-7ccb2e5bd615 | . 56 As a threshold matter, this Court must determine what deference, if any, this Court should afford GSA’s interpretation of 41 U.S.C. § 3306(c)(3). This Court need not defer to Defendant’s interpretation of Section 3306(c)(3) if, after employing all “traditional tools of statutory construction,” the Court determines “Congress has directly spoken to the precise question at issue | Sh_Synergy,_LLC_2023-04-28.txt |
0a7375bd-5a8c-4fea-917a-1af4f1b88381 | .” Aqua Products, Inc. v. Matal, 872 F.3d 1290, 1302–03 (Fed. Cir. 2017) (quoting Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842, 843 n.9 (1984)). If that is not the case, and “the statute is silent or ambiguous with respect to the specific issue,” this Court must then “determine ‘whether the agency's answer is based on a permissible construction of the statute | Sh_Synergy,_LLC_2023-04-28.txt |
f7ee2d0b-64ba-4354-ac08-b58d6be697a3 | .’” Shanxi Hairui Trade Co., Ltd. v. United States, 39 F.4th 1357, 1360–61 (Fed. Cir. 2022) (quoting Chevron, 467 U.S. at 843). Thus, GSA’s interpretation of 41 U.S.C. § 3306(c)(3) may only govern “in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.” Aqua Products, 872 F.3d at 1302–03 (quoting United States v. Eurodif S.A | Sh_Synergy,_LLC_2023-04-28.txt |
4458c476-049a-4e8f-8fa4-b626d060944c | ., 555 U.S. 305, 316 (2009)). For the reasons discussed further below, this Court finds that the language of 41 U.S.C. § 3306(c) is unambiguous and directly supports Plaintiffs’ interpretation of the phrase “task or delivery orders based on hourly rates” as found in Section 3306(c). Once again, this Court begins its interpretive inquiry by reviewing the plain language of the statute. Boeing, 983 F | Sh_Synergy,_LLC_2023-04-28.txt |
22bcf19a-8650-4f3a-a4a4-1defe2077db7 | .3d at 1326 (quoting Am. Airlines, 551 F.3d at 1299). “Based on hourly rates” is a postpositive adjectival phrase that modifies the terms “task or delivery orders” in 41 U.S.C. § 3306(c)(3). See 41 U.S.C. § 3306(c)(3). A “modifier” is a “word or phrase that makes specific the meaning of another word or phrase.” Modifier, Merriam-Webster’s Collegiate Dictionary (11th ed | Sh_Synergy,_LLC_2023-04-28.txt |
f51df012-2590-410f-abe8-ee3134e223f2 | . 2003); see Modifier, Cambridge Dictionary, https://dictionary.cambridge.org/us/dictionary/english/modifier (last visited Mar. 12, 2023) 57 (defining “modifier” as “a word or phrase that is used with another word or phrase to limit or add to its meaning”). In other words, postpositive adjectival modifiers contribute to or clarify the meaning of the nouns which appear immediately before them | Sh_Synergy,_LLC_2023-04-28.txt |
66ae26d4-0b63-4707-9791-4e814b8b01d1 | . Thus, by including the phrase “task or delivery orders” immediately before the phrase “based on hourly rates,” Congress has unambiguously expressed its intent to limit the type of task orders eligible for the exception in Section 3306(c)(3) to only those “based on hourly rates.” See 41 U.S.C. § 3306(c)(3) | Sh_Synergy,_LLC_2023-04-28.txt |
3ef9d7f7-c9c6-4250-af2b-758f373ece33 | . The phrase “based on hourly rates” as used in Section 3306(c)(3) includes the transitive verb form of “base,” which means “to make, form, or serve as a base for[;] . . . to find a base or basis for — usu[ally] used with on or upon.” Base (vt), Merriam-Webster’s Collegiate Dictionary (11th ed. 2003) (emphasis in original) | Sh_Synergy,_LLC_2023-04-28.txt |
68f71a3d-4e73-4d97-a301-9e5364d2a047 | . In turn, the noun form of “base” is defined as “the fundamental part of something.” Base (n), Merriam-Webster’s Collegiate Dictionary (11th ed. 2003). Something is “fundamental” if it is “of central importance.” Fundamental, Merriam-Webster’s Collegiate Dictionary (11th ed. 2003) | Sh_Synergy,_LLC_2023-04-28.txt |
77a3f78e-af6d-4f25-8e6c-f5a9cd510189 | . Plaintiffs’ interpretation that “task or delivery orders based on hourly rates” references time-and-materials and labor-hour contracts comports with the plain meaning of the statutory text in Section 3306(c). As the above definitions convey, for a task order to be “based on hourly rates,” hourly rates must be a “fundamental part of,” or “of central importance” to, the task order | Sh_Synergy,_LLC_2023-04-28.txt |
0c9863b3-8b0c-4fa8-ab5c-cd2db9647258 | . Base (n), Merriam-Webster’s Collegiate Dictionary (11th ed. 2003); Fundamental, Merriam-Webster’s Collegiate Dictionary (11th ed. 2003). It is not enough, therefore, that hourly rates are merely “embedded in the contractor’s bid amount,” as the same could be said for many different types of costs. Cross-MJAR at 57; see, e.g., Lakeshore Eng’g Servs., Inc. v. United States, 748 F | Sh_Synergy,_LLC_2023-04-28.txt |
6ef7cd45-a246-4265-9e3b-1678ad79f9fe | .3d 1341, 1343 (Fed. Cir. 2014) (“[T]he mechanism of pricing such jobs involves identification of costs for those jobs, including labor, equipment, and materials . . . .”). “A time-and-materials contract 58 provides for acquiring supplies or services on the basis of . . | Sh_Synergy,_LLC_2023-04-28.txt |
bf86e6ff-6276-4d54-abf9-b3f8c7c26b97 | . [d]irect labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit . . . .” FAR 16.601(b) (emphasis added). “A labor-hour contract is a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor.” FAR 16.602 | Sh_Synergy,_LLC_2023-04-28.txt |
a2f05481-b396-4d45-8118-4c78dbaafa38 | . Thus, hourly rates are a “fundamental part of,” or “of central importance” to, time-and-materials and labor-hour contracts because the services are procured and paid for using hourly rates. Base (n), Merriam-Webster’s Collegiate Dictionary (11th ed. 2003); Fundamental, Merriam-Webster’s Collegiate Dictionary (11th ed. 2003); see FAR 16.601(b); FAR 16.602 | Sh_Synergy,_LLC_2023-04-28.txt |
3b136278-ba66-4045-aff2-9c9f74525482 | . In contrast, Defendant’s interpretation of 41 U.S.C. § 3306(c)(3) does not reflect the statute’s plain language because it relies on terms absent from the statute and, if adopted, would render the phrase “based on hourly rates” superfluous. As an initial matter, all parties agree that the statute at issue is unambiguous in nature | Sh_Synergy,_LLC_2023-04-28.txt |
61500ed4-fa91-41b3-bf07-75fcb5e670a7 | . Indeed, during Oral Argument, Defendant’s counsel confirmed Defendant’s view that the terms of 41 U.S.C. § 3306(c)(3) are unambiguous. See Oral Arg. Tr. at 76:21–77:4 (The Court: “Do you think 3306(c)(3) is ambiguous?” . . . Defendant’s Counsel: “I don’t think so in the sense that you don’t see the term ‘labor hour’ in there. What you see is [‘]hourly rates[’] and you also see. . | Sh_Synergy,_LLC_2023-04-28.txt |
80be736e-41b6-409d-9d30-5bebe7ad9977 | . [‘]feature individually competed tasks or delivery orders based on hourly rates.[’]”); see Pl. Reply at 23 (“The statute is unambiguous, and an unambiguous statute must be read according to its terms.”); Oral Arg. Tr. at 40:25–41:3 (The Court: “Do you think the statute is ambiguous?” Plaintiffs’ Counsel: “We don’t. We think that ‘based on hourly rates’ can only mean one thing.”) | Sh_Synergy,_LLC_2023-04-28.txt |
f142b80d-4f63-47a2-b0a7-aed4dec0dc29 | . Yet, Defendant suggests that the phrases “based on hourly rates” and “based on an hourly rate build up” are interchangeable. Cross-MJAR at 54–55; AR at 2907–08 59 (emphasis added). They are not. The term “build up,” for example, does not appear anywhere within the statutory language of 41 U.S.C. § 3306. See 41 U.S.C. § 3306 | Sh_Synergy,_LLC_2023-04-28.txt |
05fccb30-a994-402d-9491-f3435e81d2dd | . Likewise, Defendant does not cite any persuasive authority to suggest this Court should read the term “build-up” into the statute when Congress has not opted to expressly include such a term in the statute.32 Cross-MJAR at 51–58; Def. Reply at 23–24. Judicial engraftment of a term into a federal statute is outside the constitutional role of this Court | Sh_Synergy,_LLC_2023-04-28.txt |
2962c0cb-1486-45da-8f7d-df670c012235 | . Perhaps equally problematic is that Defendant’s interpretation of which contract types qualify as “based on hourly rates” is so broad that it renders the phrase “based on hourly rates” entirely meaningless | Sh_Synergy,_LLC_2023-04-28.txt |
b3376c0e-ff2b-4b7c-993c-210994ebbed4 | . Defendant suggests every contract type referenced in the Polaris Solicitations can qualify as “based on hourly rates” because each contract type is “based on an hourly rate build up” and includes labor costs within the bid amount. See Cross-MJAR at 57 (“[H]ourly rates can certainly be embedded within and central to all of these types of contracts.”) | Sh_Synergy,_LLC_2023-04-28.txt |
f1579400-7f4f-4bed-9e9c-84a6cf390ea5 | . 32 Defendant cites two cases to support its argument that “task or delivery orders based on hourly rates” includes any contract “based on an hourly rate build-up.” See Cross-MJAR at 57 (citing Lakeshore Eng’g Servs., Inc. v. United States, 748 F.3d 1341, 1346–48 (Fed. Cir. 2014) and Cleveland Telecoms. Corp. v. United States, 39 Fed. Cl. 649, 653–54 (1997)) | Sh_Synergy,_LLC_2023-04-28.txt |
d58d4c88-f372-40c3-bb91-c267b82ab6a6 | . However, these cases merely stand for the unremarkable proposition that contractors working under firm fixed- price contracts must bear the risk that actual costs, which includes the cost of labor, may exceed the firm-fixed price agreed to under the contract. See Lakeshore Eng’g Servs., 748 F | Sh_Synergy,_LLC_2023-04-28.txt |
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