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Challenger Transportation, Inc. v. Washington Metropolitan Area Transit Authority

United States District Court, D. Maryland

November 28, 2017

CHALLENGER TRANSPORTATION, INC., Plaintiff,
v.
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant. CHALLENGER TRANSPORTATION, INC., Plaintiff,
v.
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant.

          MEMORANDUM OPINION

          THEODORE P. CHUANG, UNITED STATES DISTRICT JUDGE

         Defendant Washington Metropolitan Area Transit Authority (“WMATA”), the operator of the Metro public transportation system in the Greater Washington, D.C. area, initiated a negotiated procurement through which it selected three contractors to provide paratransit services, the MetroAccess supplemental bus service for passengers with disabilities. Plaintiff Challenger Transportation, Inc. (“Challenger”), a disappointed offeror, has filed two related lawsuits, now consolidated. In the first suit, No. TDC-14-3322, Challenger claims that WMATA violated its procurement procedures and otherwise acted in an arbitrary and capricious manner when it rejected Challenger's proposal. In the second, No. TDC-14-3463, Challenger alleges that WMATA improperly withheld documents that Challenger requested through the WMATA Public Access to Records Policy (“PARP”). Pending are Challenger's Motions for Summary Judgment on the contract award protest and PARP claims, respectively, and WMATA's corresponding Cross Motions for Summary Judgment. The Court held a hearing on the Motions on November 14, 2017. For the reasons set forth below, Challenger's Motion for Summary Judgment on the contract award protest claim is DENIED, and WMATA's corresponding Cross Motion for Summary Judgment is GRANTED. Challenger's Motion for Summary Judgment on the PARP claims is GRANTED IN PART and DENIED IN PART, and WMATA's corresponding Cross Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.

         BACKGROUND

         I. The MetroAccess Procurement

         On June 1, 2012, WMATA issued a request for proposals, RFP No. CQ12169/KAM (the “RFP”), seeking contractor proposals to provide transportation services to persons with disabilities through WMATA's MetroAccess program. The RFP stated that WMATA would award multiple five-year contracts, each with an option for an additional five years. WMATA would award contracts to those offerors whose proposals provided the “best value” to WMATA. Administrative Record (“AR”) 000086. Cost was “not expected to be the controlling factor in the selection” of the contract awardees, as WMATA intended to conduct an “integrated assessment of the evaluation criteria, ” including technical factors such as quality, safety, and business management features, rather than award the contracts based solely on “the lowest overall cost to the Authority.” AR 000086-87.

         The RFP stated that a Technical Evaluation Team (the “TET”) would assign to each proposal numerical scores, ranging from one to ten, for its Operating Plan and Procedures, Program Management, and History of Past Performance. The weighted average of a proposal's three scores had to be above 5.0 for that proposal “to be eligible for award consideration.” AR 000090. An average score below 3.0 meant that the proposal failed to meet acceptable standards, contained “uncorrectable” deficiencies, and demonstrated “a lack of understanding of WMATA's requirements or omissions of major areas.” AR 000090.

         In August 2012, WMATA approved a Source Selection Plan (“SSP”) for this procurement, which outlined the manner in which WMATA would choose the contract awardees. The SSP identified Chief Procurement Officer (“CPO”) Heather Obora as the procurement's Source Selection Authority and designated the five members of the TET. The SSP also explained that, after the TET had completed its initial evaluation, “communications” could be “held with the offerors in order to address issues that must be explored in order to determine whether or not a proposal should be placed within the competitive range, ” that is, whether a proposal merited proceeding to the next stage of the procurement process. AR000010.

         By the August 17, 2012 deadline, 11 companies had submitted proposals in response to the MetroAccess Service Delivery RFP: Challenger; Diamond Transportation Services, Inc. (“Diamond”); First Transit, Inc. (“First Transit”); Veolia Transportation Services, Inc. (“Veolia”); MV Transportation, Inc. (“MV”); Keolis Transit Services, LLC (“Keolis”); TNT Destination Services (“TNT”); Premier Paratransit, LLC (“Premier”); Ride Right, LLC (“Ride Right”); SCR Medical Transportation, Inc. (“SCR”); and TransCare Maryland, Inc. (“TransCare”).

         The TET met in October and November 2012 to discuss the proposals. By November 26, 2012, the TET had completed its initial review of all of the proposals. Notably, however, most of the technical evaluation forms, to be filled out by each of the five TET members for each of the 11 proposals, were not completed by the end of November 2012. Only seven of the forms were completed in October or November 2012. For example, one of the TET members evaluated Challenger's proposal on November 14, 2012 and completed a technical evaluation form for Challenger on that same date. The remaining technical evaluation forms were completed between December 14, 2012 and January 3, 2013.

         Meanwhile, by November 21, 2012, the TET members had submitted more than 200 of what they referred to as “clarification questions” to the contract administrator. The questions addressed only proposals from six offerors: Diamond, First Transit, Veolia, MV, Keolis, and SCR. On November 29, 2012, WMATA sent the clarification questions specific to each individual proposal to each of these offerors. According to CPO Obora, the TET decided not to send clarification questions to the other five offerors, including Challenger, because based on their average technical evaluation scores of 3.0 or below, their proposals were deemed “unacceptable and uncorrectable.” AR 007651.

         First Transit, Diamond, and Veolia, which were the eventual contract awardees, received 50, 25, and 33 questions, respectively. The questions sought additional information on, or explanation of, a variety of issues arising from each offeror's proposal, ranging from the experience of the offeror's employees to the details of its severe weather response plan. The six offerors that received clarification questions provided detailed responses by December 7, 2012. For example, First Transit submitted 58 pages of additional information, Diamond submitted 45 pages, and Veolia provided 167 pages. The responses included diagrams of parking facilities, sample safety plans, and detailed descriptions of work processes. The technical evaluation forms for each of these six offerors were completed in December 2012 or January 2013, after the submission of the responses to the clarification questions.

         On January 9, 2013, the Chair of the TET prepared a memorandum (the “TET Memorandum”) summarizing the TET's assessment of the proposals. According to the TET Memorandum, Challenger received average scores of 2.0 in both the Operating Plan and Procedures and Program Management categories and an average score of 1.6 for the History of Past Performance category, resulting in a weighted average score of 1.9, the second lowest of all offerors. Specifically, the TET Memorandum stated that Challenger's proposal “failed to meet an acceptable evaluation standard” and that:

The proposal contained significant weaknesses, including: lack of a comprehensive safety program or plan, performance plan does not describe how proposer will meet performance measures, inadequate proposed road supervisor coverage, proposer states [door-to-door] service is only provided when requested-showing lack of understanding of major MetroAccess policy as an incumbent provider, proposal does not indicate how proposer will investigate complaints, lack of a comprehensive severe weather operations plan, and poor history of past performance on current contract, covering all aspects of service (e.g. driver behavior, attainment of performance measures, management practices, adherence to MetroAccess policy and procedure[s, ] etc.).

AR 001431-32. According to the TET Memorandum, Challenger, Premier, Ride Right, TNT, and TransCare, all of which received weighted average scores of less than 3.0, “did not meet technical evaluation standards, ” and the TET did “not recommend proceeding with these proposers.” AR 001432. By contrast, Diamond, First Transit, Veolia, MV, Keolis, and SCR all had average scores of 6.0 or above and “met the technical evaluation standards.” AR 001432.

         After receiving the TET Memorandum, CPO Obora determined that the proposals from Diamond, First Transit, Veolia, Keolis, and SCR were in the competitive range for this procurement. WMATA then conducted discussions with each offeror in the competitive range before inviting Diamond, First Transit, Veolia, and Keolis to submit their best and final offers.

         Meanwhile, although the January 9, 2013 TET Memorandum had recommended removing five proposals from further consideration, Contract Administrator Karen McSween, a recipient of the TET Memorandum, emailed all 11 offerors on February 15, 2013 to ask them to extend the validity of their proposals. Challenger agreed to the extension.

         By February 27, 2013, WMATA had decided to award contracts to Veolia (50% service level), First Transit (35% service level), and Diamond (15% service level). Award offers were mailed on March 1, 2013. Notices to unsuccessful offerors were distributed the same day.

         Veolia, as Challenger would later discover, was affiliated with Thomas Downs, the Chairman of the WMATA Board of Directors at the time that the contracts were awarded in March 2013. In November 2011, while serving as Vice Chairman of the Board and before the RFP for the MetroAccess procurement was issued, Downs had disclosed that he “serve[d] as the Chairman of the Veolia Transportation North American Board of Business Advisors” and had a “financial relationship with the company.” Joint Statement of Facts (“JSF”) ¶ 37, ECF No. 97-1; AR 006367-68. In February 2012, Downs again disclosed that he had a “financial interest” in Veolia and at that point recused himself from any WMATA Board discussions or votes regarding the MetroAccess procurement. JSF ¶ 38, ECF No. 97-1; AR006369-70.

         After learning that it had not received a contract award, Challenger requested an agency debriefing, which was held on March 21, 2013. At the debriefing, a WMATA official told Challenger that its proposal was deficient in key areas. Five days later, Challenger filed a protest in which it sought to refute the alleged deficiencies. WMATA formally denied Challenger's contract award protest on July 30, 2014. The denial letter, signed by CPO Obora, stated:

Challenger was not selected for award because of numerous, serious deficiencies in its proposal, including: (1) multiple, documented problems with past performance, such as accounts of multiple sexual assaults by drivers on WMATA customers; failure to meet FTA drug testing protocols; failure to timely report accidents; failure to safely operate vehicles; and violations of federal labor law, among other things; (2) failure to provide specific detail in such areas such as safety, maintenance, and fare collection; and (3) deficiencies in Challenger's plan for customer service and quality assurance.

AR 007732. The denial letter also stated, incorrectly, that WMATA had not established a competitive range for the procurement.

         II. PARP Requests

         The day after it filed its contract award protest, on March 27, 2013, Challenger submitted a request for documents through PARP, WMATA's Freedom of Information Act analogue. In the request, Challenger sought five categories of records:

         1. The Records Retention Schedule of the WMATA Office of Procurement and Materials;

         2. All records constituting technical or price proposals-including any supplements, revisions, clarifications or addenda-submitted by entities other than Challenger Transportation, Inc. in response to the RFP;

         3. All records related to the Pre-Proposal Conference, including minutes, transcripts, or notes;

         4. All records referring to or relating to the evaluation of any proposal submitted in response to the RFP, including:

a. source selection or evaluation plans,
b. reviews of offerors' Small Business and Local Preference Program good faith efforts,
c. evaluation score sheets,
d. evaluators' notes, including those regarding oral presentation and any meeting of the evaluation or source selection committee,
e. instructions or handouts to evaluators, and
f. documents related to reference checks;

         5. All records evidencing communications between WMATA and any offeror or potential offeror regarding the RFP, including any evidence of pre-award or post-award negotiations.

         PARP Joint Statement of Facts (“PARP JSF”) ¶ 2, ECF No. 117. The PARP Administrator responded with document releases on August 30, 2013; September 24, 2013; November 15, 2013; December 23, 2013; and February 12, 2014. The releases contained:

• WMATA's Procurement Records Retention Schedule;
• Pre-Proposal Conference records;
• Medical Transportation Management's price and technical proposals;
• Veolia's price and technical proposals;
• Diamond's price and technical proposals;
• MV's price and technical proposals; and
• First Transit's technical proposal.

         Medical Transportation Management and MV had received contract awards through this RFP for MetroAccess-related services for which Challenger had not competed. Thus, WMATA released the price and technical proposals for all contract awardees, but not unsuccessful offerors. The disclosed documents contained certain redactions, as WMATA removed individuals' names and contact information to protect their privacy and blacked out certain commercial information, such as the pricing for option years, that WMATA believed could cause competitive harm to the contract awardees should it be released.

         Although Challenger's request had sought additional documents, WMATA's PARP Administrator informed Challenger that the remaining materials were exempt from production because they constituted internal agency deliberations or contained proprietary commercial information. On March 20, 2014, Challenger appealed that decision to WMATA's Chief of Staff pursuant to Section 9.1. of the PARP.

         In its appeal, Challenger asserted that WMATA failed to respond to its PARP request in a timely manner and argued that it should receive the remaining documents, including First Transit's price proposal, MV's unsuccessful price proposal for the aspect of the RFP for which Challenger had competed, the RFP's award memorandum, and documents revealing how WMATA evaluated the proposals it had received.

         The Appeal Panel issued its ruling on June 27, 2014. The Panel upheld the PARP Administrator's decision in all but one respect: It required the release of First Transit's bottom-line pricing, specifically, the lump-sum price of First Transit's services for the first five years of its contract with WMATA. Noting that the same information for the other contract awardees had already been released to Challenger, the Panel found that releasing this total award amount would not inflict commercial harm on First Transit. The Appeal Panel affirmed the determination that documents relating to the evaluation of proposals, sought in category 4 of Challenger's PARP request, were privileged because they would reveal internal agency deliberations. The Panel also concluded that the unsuccessful offerors' price and technical proposals were not subject to release because they contained confidential commercial information, and their disclosure could harm the public interest by leading to higher procurement costs on future contracts.

         III. ...


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