How did fresh fruits and vegetables become the ingredients of a federal bid protest? Plaintiff Raymond Express Int'l, LLC (REI) filed a pre-award federal bid protest on December 8, 2014 and asked the court to answer four questions regarding the solicitation, which had been amended six times. Anecdotally, three of the amendments were the result of protest previously filed by REI at the agency and Government Accountability Office (GAO) level. The solicitation was for a contract to provide fresh fruit and vegetables to Dept. of Defense Commissary Agency (DeCA) in South Korea, Japan, and Guam.
The bid protest for injunctive and declaratory relief was filed under an expedited schedule and oral argument was heard on January 26, 2015. U.S. Court of Federal Claims Court (COFC) Senior Judge Lynn Bush ruled that the solicitation did not violate procurement laws or regulations and was not arbitrary or capricious and granted defendant's motion for judgment on the administrative record.
REI asked the COFC to Decide Four Questions
(1) Did DeCA have the discretion under applicable laws and regulations to change its fresh fruit and vegetables contracting from a model where the contractor procured most items in the United States and had the items shipped at the government’s expense to the Pacific Area, to a model where the contractor ships such items at its own expense to DeCA commissaries in the Pacific Area?
(2) Did DeCA conduct adequate market research to support this change in contracting for the Pacific Area?
(3) Is the solicitation unambiguous as to how proposals would be evaluated when certain produce items were unavailable either locally (in South Korea, Japan or Guam) or globally?
(4) Was the price evaluation scheme composed of rational measures with which DeCA could determine the price reasonableness of the proposals? All of these questions must be answered in the affirmative. The court offers here a brief discussion of the background facts underlying its analysis.
Judge Bush answered all of these questions in the affirmative.
REI was the incumbent in the original contract and was receiving a transportation subsidy designed to lower costs to commissary patrons in the different bases covered by the contract. The court took administrative notice of the fact that transportation subsidies were common, but not the rule. When transportation subsidies were absent, the contract terms used were “F.O.B. Destination.”
When REI’s contract was ending, DeCA relisted the solicitation without the transportation subsidy and removed the small-business set-aside, which had benefited REI in the past procurement. The estimated value of the contract under the new solicitation was $200 million for the base period and all options. Along with the price requirement, DeCA added technical proficiencies to the RFP, making the solicitation and “Best Value, Trade-Off.” Technical proficiency was given more weight than past performance and those two factors considerably outweighed price. Prices were evaluated on reasonableness and order needed to be filled within 24 hours of placement.
REI raised two substantive complaints:
1) The elimination of the transportation subsidy would raise prices for consumers; and
2) DeCA’s focus on locally grown produce in South Korea, Guam, and Japan would lower quality and safety
The Court disagreed with REI on both issues. Instead the Court ruled 1) that DeCA could pay the transportation costs and 2) that while DeCA emphasized the importance of using locally grown produce in the solicitation, it set no minimum requirements for locally grown produce.