Ceres contends that the Corps’ decision to conduct this procurement using negotiated procedures, instead of using sealed bidding procedures, violates the Competition in Contracting Act (CICA). In this regard, Ceres disputes the agency’s conclusion that the complexity of this procurement requires the agency to use non‑price evaluation factors. Ceres also asserts that discussions are not needed for this procurement, and that the Corps failed to sufficiently document its decision to use negotiated procedures instead of sealed bidding.  CICA requires the use of sealed bidding when: (1) time permits; (2) award will be based on price and other price-related factors; (3) discussions are not necessary; and (4) more than one bid is expected. 10 U.S.C. sect. 2304(a)(2)(A); Federal Acquisition Regulation (FAR) sect. 6.401(a); Specialized Contract Servs., Inc., B-257321, Sept. 2, 1994, 94-2 CPD para. 90 at 4. When an agency determines that these conditions are not met, CICA requires the use of negotiated procedures. 10 U.S.C. sect. 2304(a)(2)(B). The determination as to whether circumstances support the use of negotiated procedures is largely a discretionary matter within the purview of the contracting officer. FAR sect. 6.401; Military Base Mgmt., Inc., B-224115, Dec. 30, 1986, 86-2 CPD para. 720 at 3. However, an agency must reasonably conclude that the conditions requiring use of sealed bidding are not present. F&H Mfg. Corp., B-244997, Dec. 6, 1991, 91-2 CPD para. 520 at 3.  As an initial matter, there is no dispute that the RFP here anticipates an evaluation that will include non-price factors. On this basis alone, this procurement is different from those that CICA requires to be conducted using sealed bidding. In addition, the RFP anticipates a best value procurement, and anticipates a possible price/technical tradeoff; neither of these options would be appropriate in a sealed bid environment.

Given that the RFP, on its face, anticipates the use of non-price evaluation factors and a possible price/technical tradeoff, Ceres’ remaining arguments essentially challenge the reasonableness of the agency’s stated needs. Specifically, Ceres argues that previous canal construction projects have been awarded without using non-price evaluation factors, and that the agency has improperly concluded that it needs to assess technical merits and possibly perform a trade-off analysis to determine which proposal constitutes the best value to the government. The record here shows that, in making this determination, the contracting officer cited the complexity of the project and the need for an accelerated schedule to complete the project. AR, Tab B, Contracting Officer’s (CO) Statement, at 10. In addition, the Corps’ Lead Structural Engineer submitted an affidavit explaining that the awardee must, among other activities, coordinate multiple crews within a narrow space, keep the main evacuation route out of New Orleans open throughout construction, schedule work to avoid interfering with completion of the pumping station, and maintain existing structures while building new ones in close proximity. AR, Tab N, Affidavit of Corps Lead Structural Engineer, at 2. The Lead Engineer also explains that the contractor will have to do all of these things while operating under a compressed time schedule. Id. at 5. Because of the need to mitigate the risk of further flooding in an area that was so recently devastated by Hurricane Katrina, and to encourage redevelopment, the Corps decided to shorten the construction timeframe by almost 9 months, and to include a duration evaluation factor to encourage offerors to propose even shorter timeframes. AR, Tab B, CO Statement, at 10-12; RFP amend. 1 at 2.  Under these circumstances and as explained below, we find that the Corps reasonably concluded that selection of a contractor here requires the use of negotiated procedures. First, we note that the fact that previous canal construction projects have been awarded without using non-price evaluation factors is not dispositive on the issue of whether the agency can properly use non-price evaluation factors now. See Comfort Inn South, B-270819.2, May 14, 1996, 96‑1 CPD para. 225 at 3. In addition, the need to move quickly to restore and improve flood‑control capabilities in a hurricane-stricken area, the relatively complex coordination and scheduling requirements of doing so, coupled with the compressed time frames in which the work is to be completed, provide reasonable support for the agency’s determination to consider non-price factors in evaluating proposals for award. See TLT Constr. Corp., B-286226, Nov. 7, 2000, 2000 CPD para. 179 at 3 (complex coordination and scheduling requirements provided reasonable support for negotiated procurement); W.B. Jolley, B-234490, May 26, 1989, 89-1 CPD para. 512 at 4-5 (decision to consolidate numerous, diverse services into one contract created a complex procurement justifying use of negotiated procurement procedures).  To the extent that Ceres argues that the Corps failed to provide an adequate legal analysis for its decision to use negotiated procurement procedures, Ceres correctly noted that the Corps did not explicitly mention the requirements of 10 U.S.C. sect. 2304(a)(2) in its acquisition plan. Nonetheless, the Corps sufficiently addressed the factors that influenced its decision to use negotiated procurement procedures in its acquisition plan and other documentation provided with the agency report, which satisfies the CICA requirements.  (Ceres Environmental Services, Inc., B-310902, March 3, 2008) (pdf)

CICA does provide, however, that sealed bidding is to be used if (1) time permits, (2) award will be based on price, (3) discussions are not necessary, and (4) more than one bid is expected. 10 U.S.C. sect. 2304(a)(2)(A). Thus, an agency need not solicit sealed bids if it reasonably determines that it must evaluate factors other than price, F & H Mfg. Corp., B-244997, Dec. 6, 1991, 91-2 CPD para. 520 at 4, or that it will be necessary to conduct discussions with responding sources about their offers. TLC Sys. and King-Fisher Co., B-227842, B-227842.2, Oct. 6, 1987, 87-2 CPD para. 341 at 3. Here, as explained more fully below, we think that the agency reasonably determined to use negotiated procedures instead of sealed bids.  (TLT Construction Corporation, B-286226, November 7, 2000)

In the Initial Opinion, the Court of Federal Claims ruled that the MATOC solicitation violated 10 U.S.C. § 2304(a)(2), which provides that sealed bidding must be used when an agency plans to award a contract based solely on price and price-related factors. Initial Opinion, 79 Fed. Cl. at 29–30. Although the Corps indicated it would be evaluating non-price-related factors, the court found that the “evaluation factors will not permit the determination of any meaningful distinctions among the offerors, nor will they allow for any different ways to make task orders awards.” Id. at 30. Thus, the court reasoned the Corps would actually be making its determination based on price. Id.

The Court of Federal Claims also ruled that the MATOC solicitation had no rational basis. Having ruled in its disposition of the § 2304(a) issue that the Corps would not be considering non-price related factors, such as contractor qualifications, the court rejected the additional justifications proffered for the Corps’s procurement action. Initial Opinion, 79 Fed. Cl. at 31–34. The government asserted the use of IDIQ MATOCs would reduce the procurement cycle, but the court found “the record contain[ed] no evidence showing that a shortened procurement cycle would enhance [the] ability to complete projects in a timely manner.” Id. at 32. Although the government asserted that the new procurement scheme would reduce administrative costs by $1.5 million over two years, the court found “no evidence of how this savings is calculated, or how it will occur.” Id. at 33. Further, the court found that the hours estimated for evaluating the proposals received in response to the solicitation were too low for a negotiated procurement, and that administrative costs thus would likely be much higher than estimated. Id. The government also argued that IDIQ MATOCs would reduce the need for emergency procurements. However, the court rejected this contention as well, indicating that emergency procurements had constituted only 2.4 percent of South Atlantic Division expenditures in the prior two years, and did not justify a “procurement overhaul.” Id. Additionally, the government asserted that the IDIQ MATOCs would increase coordination between the districts in the Corps’s South Atlantic Division. The Court of Federal Claims found, though, that the need for increased coordination did not warrant a change from sealed bidding, but rather necessitated the vesting of oversight in one office. Id. at 33–34. The court then dismissed in summary fashion all other arguments proffered by the government, stating that the record was “devoid of credible evidence” that competition would increase, that small businesses would benefit, or that national security would be improved through the use of IDIQ MATOCs. Id. The court thus concluded that the proposed solicitation lacked a rational basis. Addressing the regulatory framework, the court concluded that the solicitation did not comply with the EFARS requirement that indefinite delivery contracts could only be used in certain limited circumstances. Id. at 31.

(sections deleted)

We have stated that procurement decisions “invoke[ ] ‘highly deferential’ rational basis review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (2008) (quoting Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000)). Under that standard, we sustain an agency action “evincing rational reasoning and consideration of relevant factors.” Advanced Data Concepts, 216 F.3d at 1058.

The Corps has presented seven reasons for its new procurement scheme. As seen, through the use of IDIQ MATOCs, the Corps expects to (1) obtain qualified contractors; (2) reduce procurement time; (3) realize savings in administrative costs; (4) reduce or eliminate the need for emergency procurements; (5) allow for greater coordination between the districts in the South Atlantic Division; (6) facilitate the use of small businesses; and (7) be able to address national security needs through more timely execution of dredging near military bases. We think it can hardly be argued that any one of these is not a legitimate procurement objective.

Recognizing our deferential review of an agency’s procurement decision, Weeks does not argue that the Corps’s objectives are not legitimate. Rather, it takes the position that the Corps has not demonstrated that IDIQ MATOCs are necessary to achieve those objectives. In so doing, Weeks makes much of the fact that the solicitation and the Acquisition Plan provide little empirical evidence connecting the Corps’s needs to the new procurement scheme. For the following reasons, we are not persuaded by Weeks’s argument.

After the Court of Federal Claims decided this case, we rendered our decision in CHE Consulting. In CHE Consulting, the United States Naval Oceanic Office (“NAVO”) sought to solicit a single provider for the hardware and software maintenance of a complex supercomputer system. 552 F.3d at 1352. Eventually, after a request by CHE Consulting (“CHE”), the General Services Administration separated the procurement into two contracts—one for hardware and one for software. Id. at 1353. In response to the revised solicitation, CHE submitted a hardware maintenance proposal, but NAVO indicated it would not accept “de-bundled” proposals. Id. Following direction from NAVO, the General Services Administration, which had issued the solicitation, cancelled it, and issued a new solicitation requiring a single provider for both hardware and software maintenance. Id. Thus, the two maintenance requirements were “bundled.”

CHE brought a protest in the Court of Federal Claims, arguing that the bundling requirement lacked a rational basis and requesting an injunction with respect to the bundled solicitation. CHE, 552 F.3d at 1353. After examining the administrative record, the Court of Federal Claims found the evidence supporting the new solicitation “sparse,” and requested supplementation of the record. Specifically, the court asked for a cost analysis and empirical survey evidence on the practices of other agencies. Id. After the record was supplemented, the court ruled the bundling requirement had a rational basis. Id. at 1353–54. Accordingly, the court rejected CHE’s challenge to the solicitation. Id.

CHE appealed. On appeal, we determined not only that NAVO established a rational basis based on the supplemented record, but also that no supplementation was required in the first place. Id. at 1354 (“NAVO established a rational basis to combine hardware and software services into one contract before the trial court requested supplementation. The additions to the administrative record were thus not necessary.”). In our decision, we pointed to several concerns about “segregating the maintenance contracts,” which were stated in a memorandum and affidavit of NAVO’s contracting officer representative, both of which were present in the original administrative record. Id. at 1354–55. We indicated that those concerns provided a rational basis for NAVO’s procurement, even though the documents provided no supporting evidence for the concerns expressed. Id. at 1355. Affirming the decision of the Court of Federal Claims based upon the original administrative record, we stated:

NAVO has no obligation to point to past experiences substantiating its concerns in order to survive rational basis review. . . . Indeed NAVO has a responsibility to assess risks and avoid them before they become a historical fact. . . . In terms of this procurement, NAVO need not suffer some maintenance failures in order to substantiate its assessment of risks . . . . Thus, to satisfy its obligation to supply a rational basis for its decisions, NAVO may supply a reasoned chronicle of its risk assessment, as it did in this case.

CHE Consulting, 552 F.3d at 1355.

CHE Consulting controls this case. The Corps has put forth seven specific reasons for its procurement action, each of which represents a legitimate procurement objective. And as seen, in the case of each reason, the Acquisition Plan states the underlying rationale. Perhaps the Plan’s fullest statement of an underlying rationale relates to emergency procurements. In that regard, the Acquisition Plan states that “[t]he southeastern portion of the United States, simply from its geographic proximity to warm, tropical climatic conditions, is annually subjected to hurricanes and other potentially catastrophic natural disasters.” Continuing, the Plan explains how “during the past several years,” hurricanes and other severe storm events have increased shoaling in many channels, and it states that some shoaling became so severe that emergency contracts were required in order to maintain channel depths and allow access by both commercial and military vessels. The Acquisition Plan recites that many of these emergency contracts were solicited using less than full and open competition in accordance with FAR 6.302-2, Unusual and Compelling Urgency. See 48 C.F.R. § 6.302-2. The Acquisition Plan adds that, “[b]ased upon expert technical analysis, it is anticipated that this increase in shoaling will continue into the foreseeable future.” It states in addition that storms during the 2004 hurricane season “devastated many miles of shoreline” in North and South Carolina and Florida. This damage, the Acquisition Plan notes, resulted in the award of twenty shore protection contracts with a total value of over $98 million. The Plan concludes the discussion by stating that implementation of the MATOC procurement scheme “would virtually eliminate the need to limit competition in the case of natural disaster or other national emergencies.”

The Corps was required to “supply a reasoned chronicle of the risk assessment.” CHE Consulting, 552 F.3d at 1455. We think it did that by stating the reasons for its procurement decision and the thinking behind those reasons. Put most simply, given the Corps’s mission, and what the Acquisition Plan tells us, we conclude that the Corps has sufficiently demonstrated that it is working to “avoid [risks] before they become historical fact” and that it has supplied a “reasoned chronicle of its risk assessment.”

In sum, we hold that the Corps’s decision to issue the MATOC solicitation “evince[es] rational reasoning and consideration of relevant factors.” Were we to conclude otherwise, we would be second-guessing the Corps’s action. That is something we are not permitted to do. “‘If the court finds a reasonable basis for the agency’s action, the court should stay its hand even though it might, as an original proposition, have reached a different conclusion as to the proper administration and application of the procurement regulations.’” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)) (holding that the General Accounting Office’s determination that a bid for a procurement contract was responsive and properly disclosed the bidder’s identity had a rational basis). In this case, the Corps has demonstrated a rational basis for the MATOC solicitation.  (Weeks Marine, Inc., v U. S., No. 2008-5034, August 10, 2009)  (pdf)