Plaintiff ADG's Supplemental Response in Support of StringKing's Application for Temporary Restraining Order

Summary

This is Plaintiff ADG's Supplemental Response in Support of Plaintiff-Intervenor StringKing's Application for Temporary Restraining Order and Motion for Preliminary Injunction, dated June 18, 2024, in a bid protest in the Court of Federal Claims, No. 24-365 (Judge Lettow), filed by counsel for AirBoss Defense Group, LLC. It argues that StringKing is likely to succeed on the claim that Amendment 0009 to the Request for Proposal for Level 2 Isolation Gowns is arbitrary and capricious, and that the proposal deadline, as extended by Amendment 0011, is arbitrary and capricious. It also argues that the three-month date-of-manufacture requirement is inconsistent with customary commercial practice. It asks the Court to prevent HHS from accepting proposals while the protest is reviewed.

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

NEW YORK EMBROIDERY STUDIO, INC.,

BID PROTEST Redacted Version
AIRBOSS DEFENSE GROUP, LLC, )
)
Plaintiff, )
)
and )
)
STRINGKING LACROSSE LLC, )
)
Plaintiff-Intervenor )
)
) No. 24-365
V. ) (Judge Lettow)

)

THE UNITED STATES |
)
Defendant, )
)
and )
)
)
)
)

Defendant-Intervenor.

PLAINTIFF ADG’S SUPPLEMENTAL RESPONSE IN SUPPORT OF
PLAINTIFF-INTERVENOR STRINGKING’S APPLICATION FOR TEMPORARY
RESTRAINING ORDER AND MOTION FOR PRELIMINARY INJUNCTION

Dated: June 18, 2024 Daniel P. Graham
Llewelyn M. Engel
MCDERMOTT WILL & EMERY LLP
500 North Capitol Street, N.W.
Washington, DC 20001
202-756-8890

Counsel for AirBoss Defense Group, LLC

Cas@ds24i@A00800265LP SocuMent 6 ted BGsAGIBALS/ Page ayef 25f 25

TABLE OF CONTENTS

A. StringKing and ADG Are Likely To Succeed In Demonstrating that Amendment 0009
Improperly Removes Shelf Life as a Consideration in this Procurement......................::::::000+ 2

1. Amendment 0009 Effectively Eliminates Shelf-Life as a Consideration in this
Procurement. .............ccccccceeecceeeeeseeeeeeeeseeeeeeeeeeeeceeenaeeeeeeeeeeeeseeeeeeeeseeeeeeeeeeeteeeseeeeeeeseeeeteeeeeeeeeees 2

2. HHS’s Elimination of Shelf-Life Violates Procurement Law, Ignores the Purpose of
this Procurement, and Is Arbitrary and Capricious. ...................cccccccccceeeeceeeeeeseceesceesseesseeeeeees 4

B. StringKing and ADG Are Likely To Succeed In Demonstrating that Amendment 0009’s
Proposal Deadline—as Further Extended in Amendment 0011—Is Arbitrary and
CApTiClOUS. -..........ecceeecceeccescceeseeessecesecessecsecessecesscessecesecessecessecsaesesseceacsessecesesessecesecesseeeseeesseeeees 10

C. ADGIs Likely to Succeed In Demonstrating that Amendment 0009’s Three-Month Date-
of-Manufacture Requirement Violates FASA and Is Inconsistent with Customary Commercial
PHACtICE. 22... eeeeeeceeceeceeeceesceeseeseeesecsseeseesecsaecsscesecsaeesscesecaessacesseseesaceseceaeeaeeseceaeeeeteeeeeseeeeeestens 13

D. ADGIs Likely to Succeed In Demonstrating that HHS Is Conducting a Lowest-Price,
Technically Acceptable Source Selection, Contrary to Governing Law and the Terms of the

Solicitation. 2.2.2... ee cececececesceceseeseceeeeseeseeseeeeseesecsscsscssesaeaeesecseesecsecseeaeeaseseeeeeseeeeseesesseseeatees 17
E. The Other Factors for Injunctive Relief Weigh in Favor of StringKing and ADG. ......... 19
TIT. CONCLUSION 0.00. ooccccccccccccccccccccccccceeenseeeeeeseeeeeeeeeaeeceeeeseeeeeseeeeeeseeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee 20

Cas@ds24i@A00800265LP DocuMent 6 ted BGAAGIBALS/ Page ayef 25f 25

TABLE OF AUTHORITIES
Page(s)

Cases
CGI Fed., Inc. v. United States,

779 F.3d 1346 (Fed. Cir. 2015)... cceccccccccceeeceescceseceesceeseceesecesscessceessecesesesseeesseesseseseeeeeeesaes 14
CW Gov't Travel, Inc. v. United States,

99 Fed. Cl. 666 (2011) oo....eccecccecceccceeccceeceescceseeceseeesseesecesaeceseceseceaceceeceeeeeseceseesseceseeeseeeeses 15
Gen. Dynamics Mission Sys., Inc. v. United States,

136 Fed. Cl. 355 (2018) .o...ccccccccceccccsccessceesccesseesseeesscesecesscesecesscessecesseeeseeesseeesecesseeeseeesseeeseees 2
Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins.

Co.,

463 U.S. 29 (1983) o.oo ceeccccecccsccessceescceseeesceessceesscesseeesecesecesacesseceseeeeseeeseesseceseceeeeesseesseees 10, 13
NetStar-1 Gov’t Consulting, Inc. v. United States,

101 Fed. CL. 511 (2011) oon. cece cecccccececccecceesceeseeeeseceseeeseceseeceseceseeceseceseeesecesseeeeeeseeeeseeeees 19
Palantir USG, Inc. v. United States,

904 F.3d 980 (Fed. Cir. 2018)... ..eccccceccccccceecceseceesccesseeesecessceesecessecesscesseeesecesecesscessceeseeesaee 14
R&G Food Service, Inc.,

B-296435.4 et al., Sept. 15, 2005, 2005 CPD § 194 ooo... .eceececceeceeeccecceseceseeeceeseeeseeeseeseeeseesseees 7
S.J. Thomas Co., Inc.,

B-283192, Oct. 20, 1999, 99-2 CPD ¥ 73 ........cccccccceesceeccescecesecesseeesceesseceseceseeesseesseeeseeeeseeesees 7
Statutes
Al ULS.C. § 3306(D)(1) occ ceccecccececccesceesceseceseeseeesecsacesscesecaeesscesscsaeesscesesesecsacessseseeeaeeeseeseaeesseens 19
41 ULS.C. § 3306(C)(1)(B) 202. .eeccccccceccecceeceeescceseeeseceseeesseceseeesecesseceaeseseeceseseseceseceseeseeseeseeeseeeeeeees 7
41 ULS.C. § 3307 (e)(2)(B) oo...eeccceccccecccccceesccessceesccessecsscesscesecesseceseceseeesecessecessceeaeeesacesseeesseeeseeeseee 14
42 U.S.C. § 300bb-10(D)(7) 2... cece cecceccesceesceseeseeeseesecsecsacessceseeseessceseceaeeeseseceaeeestesseeaes 5, 6,7
Federal Acquisition Streamlining Act of 1994 oo.......cecceccccccccescceecceesceessecesceeseecesecesseeeseesseeeseeeees 14
Infrastructure Investment and Jobs Act (the “IIJA”), Pub. L. 117-58, 135 Stat. 429

(Nov. 15, 2021) ooo cecceccceccccecccescceesccesscesecesscesecesscesecesscesecessceesecesceesecessseesesessceesecensteess 11, 13
John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub.

L. 115-232, 41 U.S.C. 3700 ooeceeeccccccccccccccccsssccccccceeeeesessnececceceeseeeessssceecececeseeessssccececesereeesssesees 18

Cas€ds24iQ400800365LP Dbcuentis ted DiGéACIBALS/PagPayef 25f 25

Regulations

FAR 5.203(D) ......cceccceccceccesceescesceeseesseeseeeseesseseeseesaceaeeeseeseeeseceaecsaeeseceaeesaceaeeeaesesteeseseeeseeeeaes 10, 12
PAR 7.1OD ooo cece ecccccccececeeesseeesseeeeeseeeesseeceeseeceeseeceeseeeseaeeeseaceceeseeeseaeeeseaeeeseaeeeeeseeeesaeeeseeeeeseseeeeees 4,6
FAR 7.105 ooo .ccccccccccccccecceeeeeeeeseeeeeeeceeeeeeeneeeesueeseeeeeeeeeseseeeeaeeseeaeeceeseeseeeeeeeeseeeeeeeeeeeeeeeeeeeeees 4,6,7
FAR 12.301 (a) 2..ccccccccccccccceccceceesceeeseeeseeeseeesseceeeesseeeseeesseceseeesseeeseeeeseeeeseesaeeseeeseeeeeseeseeeesseeeeeeeees 14
FAR 12.302(C) ..ccccccecccceccceesceesceesseeeseeeseeeeseeessecseeessecseeesaeceseeeeseceseeseaeeeaeseseeesseseneeeseessseesseees 14,17
FAR 15.101-2(C) oo... ceccceccceccecccecceceesceeseesceesecsneeseceeessecsacesecaecsaeeseeeseceaeeseeeseceseseeeeeeseeeseeeeeeeeesees 18
FAR 15.101-2() oo... eecccccccccceccceccesccesceseeseeesecsseeseeaeceaeceaeesecaecsaeeseeeaecacesseeaeseseseaeessseaeeeseessseeeestes 18
FAR 15.304 (d) o0....eccccccccccceccccesceesceeesceeseeesseeeseecessecsaeeseeesaeceseeesseeeseeeeaeceeeceaeeeseeeesecesseeeseeesseeeseeeees 19
PAR Part 12 oeeccceecceecccccececcceececeeseeeeeeeeeeeeeeeeseeeeesaeeceeseeceseeseseeeeeseeseeeeeeeeeeeeeseeeeeeeeeeeeeeeeseeeeeeeeeeees 14
FAR §12.101 (a) 22..eecceccccccccecceccceecceesceesceeeseeeececsececsaeescecseeceseeceaeeeeeeeaeeeeseceeeeeeceeeeeseeeneeesseeeeeeeees 14
Other Authorities

Administration for Strategic Preparedness & Response, “Sustaining the
Stockpile,” available at https://aspr-hhs.gov/SNS/Pages/Sustaining-the-
Stockpile.aspx (last visited Jume 18, 2024) .0.......eccccceccccecccescceeeceesceeesecesceeeeceeeeeseeeseeesseeeseeeees 5

Gov't Account. Office, Public Health Preparedness, HHS Should Address
Strategic National Stockpile Requirements and Inventory Risk, Report No.
GAO-23-106210 (Oct. 2022), available at https://www.gao.gov/assets/gao-
23- 106210. pdb... ceecccccccccccescescceseeeseesecescesseessesecsscesecessesasesscsseseessceseceacesceaeesseeesceeceaeeseees 5

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I. INTRODUCTION

Pursuant to this Court’s June 14, 2024 Order (ECF No. 58), Plaintiff, AirBoss Defense
Group, LLC (“ADG’”), files this Supplemental Response in Support of Plaintiff-Intervenor
StringKing Lacrosse LLC’s (“StringKing”) Application for a Temporary Restraining Order and
Motion for a Preliminary Injunction (ECF No. 54). As discussed below, StringKing is likely to
succeed on the merits of its claim that Amendment 0009 to Request for Proposal No.
75A50322R00008 for Level 2 Isolation Gowns (the “RFP” or “Solicitation”’) is arbitrary and
capricious, which claim murrors the claim in Count III of ADG’s Second Amended Complaint.
See Infra § ILA; ECF No. 51 §§ 86-104. StringKing is also likely to succeed on the merits of its
claim that the deadline for receipt of proposals established by Amendment 0009—even as
extended by Amendment 001 1—is arbitrary and capricious. See Infra § ILB.

During this Court’s hearing on June 14, 2024, the Court granted ADG leave to address in
ADG’s Supplemental Response additional defects in Amendment 0009, which were the subject
of offeror questions that the Government did not answer until Amendment 0011. As discussed
below, ADG is likely to succeed in demonstrating that the three-month date-of-manufacture
requirement established by Amendment 0009 and confirmed in Amendment 0011 is inconsistent
with customary commercial practice. See Infra § II.C. ADG is also likely to succeed in
demonstrating that the Government is conducting a lowest-price, technically acceptable source
selection, contrary to governing law and the terms of the RFP. See Infra § ILD.

Finally, each of the other factors for injunctive relief weigh in favor of StringKing and
ADG. ADG will be irreparably harmed absent the relief requested because it will have no
adequate remedy if it is required to invest substantial time and effort in developing a response to
the current solicitation over the next two weeks, and if this Court subsequently determines that

the current solicitation is unlawful. The Government, by contrast, will not be harmed by a short

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delay to this procurement to permit the Court to rule on these cases, particularly given that the

Government is solely responsible for the many months of delays to this procurement to date.

I. ARGUMENT

As described in detail below, StringKing fully satisfies each of the four elements
supporting the issuance of a temporary restraining order or preliminary injunction: (1) plaintiffs
likelihood of success on the merits; (2) whether the plaintiff will suffer irreparable harm 1f the
Court withholds injunctive relief; (3) whether the balance of hardships on all parties favors the
grant of injunctive relief; and (4) whether it is in the public interest to grant injunctive relief.
Gen. Dynamics Mission Sys., Inc. v. United States, 136 Fed. Cl. 355, 357-58 (2018) (citing
PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004)). Therefore, the Court
should enter an order or injunction preventing HHS from accepting proposals and from
proceeding with the Level 2 Isolation gown procurement while the Court reviews the important
issues raised by this protest.

A. StringKing and ADG Are Likely To Succeed In Demonstrating that

Amendment 0009 Improperly Removes Shelf-Life as a Consideration in this
Procurement.

1. Amendment 0009 Effectively Eliminates Shelf-Life as a Consideration
in this Procurement.

Prior to 2024, the RFP expressly stated that shelf-life would be considered in determining
which proposed gown offered the best value to the Government: “The Government’s overall
best value determination will consider the cost of the product as it relates to the shelf-life at time
of delivery and the best value determination will also consider the time, effort, and cost to sustain
product with lesser shelf-life.’ AR 317 (emphasis added). To evaluate shelf-life, the RFP

provided: “Offerors will be evaluated based on providing appropriate data and documentation,

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such as accelerated aging and real-time testing reports and other validating documentation, to
support their shelf-life claims.” AR 330.

Amendment 0009 effectively removes shelf-life as a consideration in this procurement.
Amendment 0009 states: “Isolation Gowns must have a shelf life of 3 years, and, at the time of
delivery to the SNS, isolation gowns shall have no more than 3 months expended since the date
of manufacture, as listed on the gown packaging labels.” Ex. 1 at 16. Amendment 0009 further
explains that a “shelf life longer than 3 years will not be evaluated higher or considered to be an
additional strength.” Jd. at 53. Amendment 0011 further confirms that shelf-life will be
evaluated only on a pass/fail basis to determine whether gowns have a three-year shelf-life, and
that HHS assigns no value to gowns with a longer shelf-life. Ex. 2 at 6 (Q&A Nos. 18, 19, &
33). Finally, Amendment 0011 relieves offerors from providing any support or validation of
their shelf-life claims beyond the offeror’s certification of shelf-life. Jd. at (Q&A No. 8).

HHS received proposals in response to the RFP proposing gowns with shelf-lives ranging
from five years to 16.5 years.! The minimum shelf-life claim reflected in the administrative
record is five years. Jd. HHS’s evaluation documents inconsistently state in September 2023

that a five-year shelf-life is the “industry norm,” AR 1190, and then state in January 2024 that

1 HHS received proposals from 21 offerors; however, the administrative record only includes the
proposals of Essential Safety, NYES, StringKing, and ADG. AR 1682. The January 3, 2024
Amended Technical Evaluation Panel Report recites the shelf-lives claimed by the ten offerors
who met the RFP’s domestic end product requirements, each of which was a minimum of five
years. See AR 1699 (Essential Safety AR 1708 (NYES—M): AR 1720
(StringKing ); AR 1734 (ADG ); AR.1746-47 (Coulmed—M); AR
1760 (Gredal ars); AR 1775 (Health Supply US
Safety. ); AR 1803 (Two One Two New York: ). Unifire proposed four gowns.
AR 1806. Two of Unifire’s gowns claimed a shelf-life o years. AR 1812-13 & 1831. One

gown proposed by Unifire did not include a shelf-life claim. AR 1824. The fourth was not
evaluated for shelf-life because it did not meet the domestic end product requirement. AR 1833.

); AR 1790 (TomaHawk

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the industry norm is “up to 10 years,” AR 1693, 1711. The record provides no support for either
conflicting assertion. Regardless, by establishing a minimum required shelf-life of three years,
Amendment 0009 sets the bar far below what every offeror can meet and what HHS itself
thought was the “norm” at any point in this procurement. Accordingly, by prohibiting any
consideration of shelf-lives longer than three years, Amendment 0009 effectively removes shelf-
life as a consideration from this procurement.

2. HHS’s Elimination of Shelf-Life Violates Procurement Law, Ignores
the Purpose of this Procurement, and Is Arbitrary and Capricious.

Amendment 0009’s elimination of shelf-life as a consideration violates procurement law
in two ways. First, removing shelf-life as a consideration fails to adequately consider “life-cycle
cost” as required by FAR 7.105(a)(3)(i). The FAR defines life-cycle cost as “the total cost to the
Government of acquiring, operating, supporting, and (if applicable) disposing of the items being
acquired.” FAR 7.101. As the RFP explains, the purpose of this procurement is to acquire
gowns for the Strategic National Stockpile (“SNS”), which is a national repository of
pharmaceuticals, vaccines, medical supplies, and medical equipment stored in strategic locations
around the United States. AR 277; Ex. 1 at 10. HHS’s own website for the SNS emphasizes the
importance of shelf-life as a life-cycle cost to sustain the SNS:

Sustaining the Stockpile

Sustaining the Strategic National Stockpile (SNS) involves managing the

entire life cycle of stockpile assets as well as acquiring, storing, and

transporting supplies.

SNS management includes:

¢ Overseeing the shelf life of medicines to ensure the stock is rotated and
kept within U.S. Food and Drug Administration (FDA) potency shelf-
life limits

¢ Conducting routine quality assurance on all products

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¢ Performing annual inventory of all products

See HHS, Administration for Strategic Preparedness & Response, “Sustaining the Stockpile,”

available at https://aspr.hhs.gov/SNS/Pages/Sustaining-the-Stockpile.aspx (last visited June 18,

2024) (emphasis added). Indeed, the statutory mandate for the Administration for Strategic
Preparedness & Response is to plan for the “procurement, stockpiling, maintenance, and
potential replenishment of all products in the Strategic National Stockpile.” 42 U.S.C. § 300hh-
10(b)(7) (emphasis added). And the Government Accountability Office has similarly recognized
that, “[a]s these products [including gowns and other PPE] expire, they need to be replaced or
rotated out of the inventory and replaced with new inventory.” Gov’t Account. Office, Public
Health Preparedness, HHS Should Address Strategic National Stockpile Requirements and
Inventory Risk at 41, Report No. GAO-23-106210 (Oct. 2022), available at

https://www.gao.gov/assets/gao-23-106210.pdf.

It was therefore only natural that the original RFP and all amendments through
Amendment 0007 provided that HHS would specifically evaluate shelf-life in determining best
value, including both “the cost of the product as it relates to the shelf-life at time of delivery,”
and the “the time, effort, and cost to sustain product with lesser shelf-life.” AR 317. These
considerations go to the very heart of the SNS’s mission. Gowns with a shorter shelf-life
necessarily have a higher life-cycle cost because they are more likely to expire and need to be
replaced prior to being needed. In fact, HHS’s Acquisition Plan for this procurement states that
HHS learmed this the hard way during the COVID-19 pandemic:

In response to the pandemic, an initial requirement for the SNS to procure
and sustain a quantity of 265 million gowns, 50% surgical and 50%

isolation, was established as part of the SNS 2.0 initiative in April of 2020.
In April 2020, HHS/SNS engaged DLA to procure, on HHS’ behalf. The

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SNS was unable to accept more than 20% of the DLA contracted quantity
due to various shelf-life, quality, performance, and other issues.

AR 102.7

Despite recognizing that shelf-life is inextricably linked to life-cycle cost, and despite
factoring shelf-life into the best value analysis in the original RFP and all amendments through
Amendment 0007, HHS has now eliminated shelf-life as a consideration altogether. In response
to offeror question no. 37 regarding Amendment 0009, HHS provided the following answer:

Q. Does the Government believe there are life-cycle costs associated with
the gowns being acquired? If so, what are those life cycle costs?

A. Lifecycle costs for PPEs typically include procurement, pallet
receiving and storage costs, and disposal costs.

Ex. 2 at 8. HHS’s answer recognizes that gowns will expire and need to be disposed of, but
inexplicably omits the cost of replacing gowns that are disposed of because they have expired.
This omission flies squarely in the face of Congress’s mandate that HHS plan for the
“procurement, stockpiling, maintenance, and potential replenishment of all products in the
Strategic National Stockpile.” 42 U.S.C. § 300hh-10(b)(7) (emphasis added).
HHS’s response to question no. 38 is even more telling:

Q. Does the Government agree that there is an inherent cost to the

Government associated with replacing gowns whose shelf-life has

expired? If so, what does the Government expect that cost to be? If not,

why does the Government believe there is no such cost?

A. Refer to the response for Question 37

? HHS’s Acquisition Plan incorrectly states that “[l]ife-cycle cost does not apply to this
commercial medical supply acquisition.” The acquisition planning requirements of FAR Subpart
7.1—including FAR 7.105(a)(3)(i)’s requirement that life-cycle costs be considered—applies to
“all acquisitions,” including acquisitions of commercial products and services. FAR 7.102(a).

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Id. HHS’s refusal to respond directly to question no. 38 demonstrates that HHS has failed to
consider known life-cycle costs, as required by FAR 7.105, that go to the heart of the SNS’s
mission.

Second, by effectively removing shelf-life as a consideration, the Government also will
not meaningfully evaluate cost and price as required by 41 U.S.C. § 3306(c)(1)(B). Agencies
may not use an evaluation method that produces a misleading result; instead, the method chosen
must include some reasonable basis for evaluating or comparing the relative costs of proposals,
so as to establish whether one offeror’s proposal would be more or less costly than another’s.
See, e.g., S.J. Thomas Co., Inc., B-283192, Oct. 20, 1999, 99-2 CPD ¥ 73 (sustaining protest
where agency considered offeror’s proposed mark-up rates, without taking into account potential
differences in offerors’ labor rates, number of hours, mix of labor categories, and material costs);
R&G Food Service, Inc., B-296435.4 et al., Sept. 15, 2005, 2005 CPD 4 194 at 3. Amendment
0009 violates this mandate by ignoring altogether the higher costs associated with gowns with a
shorter shelf-life, relying instead on the misleading, and illusory unit price of lower-quality
gowns. Under Amendment 0009, the Government considers a gown with three years of shelf-
life to have no greater value than a gown with six or nine years of shelf-life, despite the obvious
increased cost to the Government of having to replenish gowns in the SNS that expire, which
cost will necessarily be higher than gowns with a shorter shelf life.

Finally, the elimination of shelf-life as a consideration is simply arbitrary. Amendment
0007 slightly revised Section C.4 of the RFP, Shelf-Life, but Amendment 0007 did not eliminate
the RFP’s statement that shelf-life would be considered part of the best value analysis. Compare
AR 317 (Amd. 0007 revision to Section C.4) and AR 330 (Amd. 0007 revision to Section M),

with AR 317 (Amendment 0005 version of Section M). HHS’s responses to offeror questions at

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the time stated that the revisions in Amendment 0007 were “based on the Agency’s assessment
of its needs.” AR 334 (Q&A Nos. 29-30). Accordingly, as of November 18, 2022, the date
Amendment 0007 was issued, HHS had affirmatively determined that its needs required an
integrated assessment of shelf-life and price to determine best value.
The record contains no coherent explanation why HHS abandoned this determination.

The record shows that HHS internally questioned the value of shelf-lives in excess of ten years in
its September 2023 evaluation of StringKing’s proposal, which offered gowns with iim
shelf-life:

USG should consider if it is appropriate, allowable, and beneficial to

stockpile a gown for over 10 years, as the industry norm for personal

protective equipment (PPE) shelf life is 5 years, and, longer dated shelf

life could hinder the domestic manufacturing industry.
AR 1190; accord AR 1342 (September 2023 Award Decision Memo). In selecting NYES for
award in September 2023, HHS recognized that the RFP required an integrated assessment of
shelf-life and price, but stated, in conclusory fashion, that StringKing’s longer shelf-life does not
offer any value:

The Contracting Officer considered the cost of the proposed products as it

relates to the proposed shelf-life at time of delivery and determined that

the industry norm for PPE shelf-life is 5 years and the extended shelf-life

could hinder the domestic manufacturing industry. The Contracting

Officer determine that any cost premium associated with the shelf-life

does not offer the government any value.
AR 1344. This assertion makes no sense—clearly, there is a “cost premium” associated with
having to replace gowns with shorter shelf-lives to maintain the SNS. HHS’s Acquisition Plan

for this procurement demonstrates that expired products hindered the Government’s response to

the COVID-19 pandemic. AR 102. Regardless, the record contains no effort on the part of HHS
Cas@ds24i2400800355LP Db cuDent Ge d BG:2CIBAL8/Page ageot 2 5f 25

to quantify this “cost premium,” let alone explain why it does not “offer the government any
value.”

Then, when HHS reevaluated proposals in late 2023, HHS recognized that “[t]he typical
shelf life of PPE, including non-surgical isolation gowns, is up to 10 years.” AR 1693, 1711
(emphasis added). HHS’s January 2024 Technical Evaluation Panel Report stated that the
“industry norm” is “less than 10 years,” which backtracks from HHS’s earlier suggestion that the
industry norm is five years. Compare AR 1711, with AR 1344. Neither statement is supported
by any evidence in the administrative record. Regardless, in January 2024, HHS revised its
assessment of the benefits of shelf-life to state “there may not be benefits with stockpiling
isolation gowns in the SNS for /onger than 10 years.” AR 1711(emphasis added). HHS now
seemed to accept that there was a benefit to stockpiling gowns with shelf-lives up to ten years.

Then, inexplicably, Amendment 0008 removed shelf-life from the best value decision.
AR 1917. Although the administrative record purports to be complete through Amendment
0008, the record contains no explanation for this change. To the contrary, the record indicates
that HHS refused requests from offerors to explain this change. AR 1920-21 (Q&A Nos. 11-12).

In Amendment 0011, HHS provided the only explanation that exists in the record for
ignoring shelf-life. Question No. 3 in Amendment 0011 asked, “What is the Agency’s reasoning
in procuring gowns with a 3-Year shelf-life which will likely expire prior to any future
pandemics and/or emergencies?” Ex. 2 at 3-4. The Government’s response misses the point
entirely: “It is unknown if isolation gowns with any varying designated shelf life will expire
prior to the next public health emergency since the timing of these cannot be predicted.” Jd. It is
precisely because the timing of the next public health emergency cannot be predicted that shelf-

life is an important consideration. If the Government does not consider the impact on shelf-life

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to the Government’s requirement for a stockpile that will support an uncertain future public
health emergency, the Government has “entirely failed to consider an important aspect of the
problem.” Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983). The fact that HHS’s own Acquisition Plan recognized that this very
problem hampered the Government’s response to the COVID-19 pandemic, AR 102, and HHS’s
vacillation about what the “industry norm” is for shelf-life and whether the advantages of longer
shelf-life diminish after five years or after ten years, only underscores the arbitrary and
capricious nature of HHS’s actions.

B. StringKing and ADG Are Likely To Succeed In Demonstrating that
Amendment 0009’s Proposal Deadline—as Further Extended in Amendment
0011—Is Arbitrary and Capricious.

FAR 5.203(b) requires contracting officers to “establish a solicitation response time that
will afford potential offerors a reasonable opportunity to respond to each proposed contract
action,” and further requires agencies to “consider the circumstances of the individual
acquisition, such as the complexity, commerciality, availability, and urgency, when establishing
the solicitation response time.” When the RFP was originally issued on June 27, 2022, it
allowed offerors over a month before proposals were due on July 29, 2022. AR 124. That
deadline was extended to November 17, 2022, through Amendment 0005, giving offerors nearly

five months to submit their initial proposals. AR 271.

The record shows that HHS knew that offerors were using this time to develop the
manufacturing capabilities, supply chains, and other infrastructure necessary to develop a
domestic manufacturing capability for their proposed gowns. In fact, even before the original
RFP was issued, HHS’s Acquisition Plan acknowledged the efforts that potential offerors were

making to prepare for the Solicitation:

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As a result of this RFI and on-going discussions with Industry, several

manufacturers have been preparing over the past several months in

anticipation of this solicitation and have expanded their domestic

capabilities and entered into tentative agreements with domestic raw

material providers in order to manufacture an end item in the United States

with 100% raw materials/components. Those that indicated they have

done such are Stringking, ADG, USA Medical Supply, NYES, and

Gredale, however they also noted that domestic raw material availability

was on a month-by-month basis.
AR 109. Offerors like ADG detailed in their proposals the considerable time and effort they
spent building coalitions of businesses to form the supply chains and manufacturing capabilities
necessary to domestically produce and deliver gowns at the scale required by the RFP. AR 343;
accord AR 1140 (StringKing).

HHS’s Acquisition Plan for this procurement explains that the RFP implements the
Infrastructure Investment and Jobs Act (the “IIJA”), Pub. L. 117-58, 135 Stat. 429 (Nov. 15,
2021). Specifically, the RFP implements the “Make PPE in America” provisions in Subtitle C of
the “Build America, Buy America” provisions in Title IX of the IJA. 135 Stat. at 1312-16.
Section 70952 if the IIJA recognizes that substantial investment in U.S. domestic manufacturing
capabilities was necessary in order to expand those capabilities to meet the needs of the then-
current and future pandemics. 135 Stat. at 1313. Congress found: “In order to foster a domestic
PPE supply chain, United States industry needs a strong and consistent demand signal from the
Federal Government providing the necessary certainty to expand production capacity investment
in the United States.” Jd.

This procurement was always intended to be a core part of the “strong and consistent
demand signal” that Congress wanted to send to industry to spur investment in manufacturing

capabilities. AR 102 (“This effort, in conjunction with similar efforts for other PPE, is to protect

the United States from experiencing a PPE shortage similar to what was experienced in the early

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stages of the COVID-19 response due to its dependence on foreign manufacturing and raw
materials to supply these products amidst the breakdown of the global supply chain.”); id. (“The
need for these isolation gowns is not just driven by current shortage in the Stockpile, but by a
larger need to establish and maintain domestic sourcing for this product; the Government’s
alternatives are limited.” (emphasis added)). ADG and StringKing did exactly what Congress
and HHS wanted and invested in expanding their domestic supply chains and manufacturing
capabilities. AR 109.

ADG and StringKing built their expanded capabilities around their higher quality, longer
shelf-life, but more expensive, gowns. By eliminating shelf-life from the evaluation,
Amendment 0009 precludes HHS from concluding that ADG’s and StringKing’s higher quality
and longer shelf-life is worth the price differential that exists between their gowns and NYES’s.
Yet Amendment 0009 only gave ADG seventeen days to identify cheaper alternatives, and to
build a supply chain and manufacturing capability that would produce those cheaper alternatives
at the scale required by the RFP. That deadline was impossible for multiple reasons, not the least
of which was that Amendment 0009 included multiple defects that had to be clarified in
Amendments 0010 and 0011. Amendment 0011, however, only provided an additional thirteen
days to do what had previously taken months to do in 2022. Because no rational person can
expect ADG and StringKing to accomplish such a feat, the proposal deadline in Amendment
0009, as extended by Amendment 0011, is arbitrary and capricious and violates FAR 5.203(b).

The Government’s explanation for not providing additional time again misses the point
entirely. The Government states that it “will not be extending proposal deadlines for offerors to
design and develop new isolation gowns since that does not meet the requirement for commercial

products or services as specified in the solicitation.” Ex. 2 at 3. But even if offerors will not

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“design and develop” new gowns, offerors need time to validate that commercially available
gowns meet the extensive requirements that the Government has established in the solicitation,
including the numerous testing requirements, many of which are not standard commercial
requirements for gowns. And, more importantly, offerors need time to develop the supply chain
and manufacturing capabilities to produce gowns at the scale required by the RFP—activities that
the IIJA expressly promoted and which this procurement was intended to encourage.

Again, the Government’s position is hopelessly contradictory. Amendment 0009 requires
that gowns have no more than three month’s shelf-life expended since the gown’s date of
manufacture, which necessarily requires that gowns be manufactured on a rolling basis over the
contract’s period of performance. Ex. 2 at 8. Yet the Government’s rationale for not extending
the due date for proposals assumes that the Government is purchasing gowns off the shelf, and that
no lead time is necessary to establish the necessary supply chain and production infrastructure to
deliver according to the Government’s own requirements. That assumption is directly at odds with
the IIJA, which this procurement supposedly implements. AR 102. The IIJA and the Acquisition
Plan for this procurement recognize that investment in supply chains and manufacturing capability
is necessary in order to domestically produce gowns at the scale needed to confront the next
pandemic. Pub. L. 117-58, 135 Stat. at 1313; AR 109. The Government’s position on the
reasonableness of the deadline for proposals—even as extended by Amendment 0011—‘“runs
counter to the evidence before the agency” and is therefore arbitrary and capricious. Moror
Vehicle Mfrs. Ass’n, 463 U.S. at 43.

Cc. ADG Is Likely to Succeed In Demonstrating that Amendment 0009’s Three-

Month Date-of-Manufacture Requirement Violates FASA and Is Inconsistent
with Customary Commercial Practice.

ADG is also likely to succeed in demonstrating that the revised RFP’s arbitrary
requirement that “isolation gowns shall have no more than 3 months expended since the date of

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manufacture” does not reflect customary commercial practice and is contrary to the Federal
Acquisition Streamlining Act of 1994 (““FASA”) and FAR Part 12. FASA, and its implementing
regulations found at FAR Part 12, require the Federal government to purchase commercial items
under commercial terms to the extent practicable. 41 U.S.C. § 3307(e)(2)(B); FAR 12.301 (a);
CGI Fed., Inc. v. United States, 779 F.3d 1346, 152 (Fed. Cir. 2015). Specifically, “FAR Part 12
implements FASA’s mandate by requiring that ‘contracts for the acquisition of commercial items
shall, to the maximum extent practicable, include only those clauses’ required by law or
‘[d]etermined to be consistent with customary commercial practice.”” CG/ Fed., 779 F.3d at
1352 (quoting FAR § 12.301(a)). It also precludes inclusion of “any additional terms or
conditions in a solicitation or contract for commercial items in a manner that is inconsistent with
customary commercial practice for the item being acquired unless a waiver is approved in
accordance with agency procedures.” FAR 12.302(c).

“FASA achieves its preference for commercial items in part through preliminary market
research,” and “[b]efore soliciting bids or proposals, agency officials must conduct market
research concerning the availability of commercial items.” Palantir USG, Inc. v. United States,
904 F.3d 980, 984 (Fed. Cir. 2018); FAR §12.101(a) (requiring that the head of the agency shall
“conduct market research to determine whether commercial products, commercial services, or
nondevelopmental items are available that could meet the agency’s requirements”). “Next,
agency officials must use that market research to determine whether commercial items can meet
the agency’s requirements, with or without modification of either the commercial items or the
agency’s requirements,” pursuant to FASA. Palantir, 904 F.3d at 984. Ultimately, the market

research assists the agency “[i]n evaluating whether a solicitation’s terms are consistent with

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customary commercial practice.” See CW Gov't Travel, Inc. v. United States, 99 Fed. Cl. 666,
676 (2011) (quoting Smelkinson Sysco Food Servs., B-281631, Mar. 15, 1999).

Amendment 0009 states that gowns “shall have no more than 3 months expended since
the date of manufacture,” Ex. 1 at 16, and Amendment 0011 confirms that HHS will not accept
any gown that is older than three months, even if it has more than 33 months of shelf-life
remaining, Ex. 2 at 8 (Q&A No. 32). This requirement is not supported by the Government’s
Market Research Report, which details the market research HHS conducted before issuing the
original Solicitation. See AR 11-18. Specifically, the Market Research Report states that SNS
“held market research discussions with FDA in an effort to understand current industry
capabilities and potential vendors of domestically manufactured isolation gowns” and that
“ASPR reached out to the vendors FDA indicated as showing in their pre-market database as
having domestic manufacturing for medical gowns . . . requesting capabilities and location of
manufacturing to further understand current industry capabilities.” Jd. at 12.4 The Report also
states that SNS performed further research within GSAAdvantage, SAM.gov, previous contracts,
and the VA National Acquisition Center, and that the ASPR Supply Chain Control Tower and
Innovation and Industrial Expansion Branch also performed supply chain research and analysis.
Id. Finally, the Report also states that in June 2021, the Contracting Officer issued a Request for
Information for isolation and surgical gowns, which received 68 responses. Jd. The Report
states that these results were reviewed by the SNS Science team, which “developed a summary

of the results in both written and Excel spreadsheet form.” Jd.

3 The Market Research Report concedes that some of the information gathered from the FDA
may be inaccurate, explaining that “FDA did provide a disclaimer and made SNS aware that the
database used to identify the[] vendors is data directly input by vendors and may be inaccurate,
did not indicate the type of gown (surgical or isolation), and did not indicate at which level of
protection the manufactured gowns were being made.” /d. at 14.

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Nothing in the Market Research Report indicates that commercial customers do not
purchase gowns manufactured more than three months ago, regardless of how much shelf-life the
gowns retain. The SNS Science Team’s summaries are not included in the Administrative
Record, nor is there any other documentation of the research that the Market Research Report
claims HHS performed. Regardless, the record contains no indication whatsoever that HHS’s
market research indicated that commercial purchases of isolation gowns impose date-of-
manufacturing requirements that are not dependent on a gown’s shelf-life. As a result, the
original RFP and all amendments through Amendment 0007 only required that gowns “have no
more than 20% of total shelf-life expended upon delivery to the SNS.” AR 326, 329. The RFP
imposed a three-month date-of-manufacture requirement on/y for gowns that did not have an
identified shelf-life. Jd. The Government’s actions in this procurement therefore demonstrate
that customary commercial practice is to consider a gown’s shelf-life in determining whether the
gown should be rejected based on its date-of-manufacture.

Amendment 0009 arbitrarily prioritizes gowns with a short shelf-life, but a recent
manufacture date, over gowns that may have been manufactured over three months ago, but that
have a far longer shelf life. For example, under Amendment 0009, HHS would accept delivery
of a gown with a three-year shelf-life that was manufactured three months prior to delivery and
therefore had only thirty-three months of remaining shelf-life. By contrast, HHS would reject
delivery of a gown with a ten-year shelf-life that was manufactured two years ago, even though
that gown has eight years of remaining shelf-life. Ex. 2 at 8 (Q&A No. 32). The record does
not provide a rational explanation for HHS’s decision to allow the delivery of gowns with a
shorter useful life, while precluding the delivery of gowns that could be used for a much greater

period of time. No rational explanation exists.

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Finally, the Administrative Record does not contain any evidence that HHS obtained or
even sought a waiver to include terms inconsistent with customary commercial practice as
required by FAR 12.302(c). Accordingly, since the Market Research Report does not support
the three-month date-of-manufacture requirement as a customary commercial practice, the
Government was precluded from including such a term that is unless it obtained a waiver. See
FAR 12.302(c). Amendment 0009 therefore violates FASA and its implementing regulations
and must be rescinded.

D. ADG Is Likely to Succeed In Demonstrating that HHS Is Conducting a
Lowest-Price, Technically Acceptable Source Selection, Contrary to
Governing Law and the Terms of the Solicitation.

The solicitation purports to invite offerors to submit proposals that exceed the
requirements of the solicitation, stating that the Government will perform a trade-off between
price and non-price factors:

This is a best value acquisition conducted in accordance with Federal
Acquisition Regulation (FAR) 12.602; the Government intends to select
the best overall offer, based upon an integrated assessment of Technical
and Business Proposals. The Contract will be awarded to the offeror who
is deemed responsible in accordance with the FAR, whose proposal
conforms to the solicitation’s requirements (to include all stated terms,
conditions, representations, certifications, and all other information
required by Section L of this solicitation); and is judged by an overall
assessment of the evaluation factors and sub factors to be most
advantageous to the Government. As part of making the assessment, an
analysis to determine whether or not exceeding the minimum requirements
at an associated price premium provides the best value to the Government
will be performed if necessary.

AR 318; Ex. 1 at 54. Both Amendment 0005 and Amendment 0009 provide that HHS will

39 ¢¢

review the technical capability of proposals and assign a rating of “outstanding,” “acceptable,” or
“macceptable.” AR 314; Ex. 1 at 50.

The administrative record, however, indicates that HHS never considered, and does not

intend to consider, whether any proposal is more than “acceptable.” The only ratings assigned

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by HHS during the initial evaluation and the corrective action evaluation were “acceptable” and
“unacceptable.” AR 1162-1307 (initial technical evaluation); AR 1308-1345 (initial award
decision); AR 1680-1834 (revised technical evaluation); AR 1835-1903 (revised competitive
range determination). The technical evaluation reports, initial award decision, and revised
competitive range determination do not contain a single reference to a proposal “exceed[ing]
contractual requirements” in a manner that provides the Government with a “benefit.” Although
Amendment 0009 retains the same language as Amendment 0005 regarding a best-value
tradeoff, the administrative record makes clear that the Government intends to make an award on
a lowest-price, technically acceptable basis.

The use of a lowest-price, technically acceptable source selection process for the
acquisition of personal protective equipment such as the gowns violates Section 880 of the John
S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. 115-232, 41 U.S.C.
3701, and FAR 15.101-2(d). FAR 15.101-2 notes that LPTA procurements sha// only be used
when “[t]he agency would realize no, or minimal, value from a proposal that exceeds the
minimum technical or performance requirements” and “[t]he contracting officer documents the
contract file describing the circumstances that justify the use of the lowest price technically
acceptable source selection process.” FAR 15.101-2(c). Here the purpose of the procurement is
to provide Level 2 Isolation Gowns to support the Strategic National Stockpile, whose mission it
is to “provide the right materiel at the right time to secure the nation's health.” Ex. 1 at 10.
Nowhere has the Contracting Officer made the argument, nor could she reasonably do so, that
proposals that exceed the requirements of the solicitation do not provide a better value to the

government.

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Amendment 0009 is further unlawful because it does not advise offerors of the basis for
award, as required by 41 U.S.C. § 3306(b)(1) and FAR 15.304(d). Amendment 0009 incorrectly
states that HHS will consider the extent to which proposals exceed the requirements of the RFP
in a manner beneficial to the Government, but HHS has no intention of doing so.

E. The Other Factors for Injunctive Relief Weigh in Favor of StringKing and
ADG.

ADG will have no remedy if it is required to invest substantial time and effort in
developing a response to the current solicitation over the next two weeks, and if this Court
subsequently determines that the current solicitation is unlawful—particularly with respect to
shelf life, the three-month date-of-manufacture requirement, and the RFP’s incorrect statement
that HHS will perform a best value tradeoff when it intends to award to the lowest-price,
technically acceptable offeror. Essentially, ADG will have to try to replicate, in less than a
month, the establishment of supply chains and manufacturing capabilities for a different gown
that it previously took ADG over five months to develop for its proposed gowns. If this Court
grants judgment in favor of ADG—which it is likely to do based on the points above—ADG’s
effort to respond to Amendment 0009 will have been wasted and ADG will have no remedy to
recover the costs associated with that effort. This injury is textbook irreparable harm. £.g.,
NetStar-1 Gov’t Consulting, Inc. v. United States, 101 Fed. Cl. 511, 530 (2011) (‘When
assessing ureparable harm, “[t]he relevant inquiry in weighing this factor is whether plaintiff has
an adequate remedy in the absence of an injunction.” (quoting Magellan Corp. v. United States,
27 Fed. Cl. 446, 447 (1993))).

The Government, by contrast, will not be harmed by a delay, particularly given that the
Government has already delayed this procurement for nearly two years since the RFP was

originally issued in June 2022, primarily based on errors that the Government voluntarily took

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corrective action to try to remedy. Indeed, after issuing Amendment 0008 on February 24, 2024,
to the offerors then in the competitive range en: Government took
over three months to issue Amendment 0009, which simply reaffirmed Amendment 0008’s
elimination of shelf-life as a consideration in the procurement. Compare AR 1917 (Amd. 0008),
with Ex. 1 at 54 (Amd. 0009). Any suggestion by the Government that it will be harmed by a
further extension of the due date for receipt of proposals so that this Court can hear this case on
the merits ignores that the Government—not StringKing or ADG—is solely responsible for the
delays to this procurement to date.

Ill. CONCLUSION
For the foregoing reasons, ADG submits that the Court should grant the relief requested by

StringKing.

Dated: June 18, 2024 Respectfully submitted,

/s/ Daniel P. Graham

Daniel P. Graham

Llewelyn M. Engel

MCDERMOTT WILL & EMERY LLP
500 North Capitol Street, N.W.
Washington, DC 20001

202-756-8890

Counsel for AirBoss Defense Group, LLC

Cas€ds24L240080D355LP Do cuDent se ME ted BGsACIBAL8/ Page afect25f 25

CERTIFICATE OF SERVICE
I hereby certify that on June 18, 2024, I caused a copy of the foregoing document to be
electronically filed with the clerk using the Court’s CM/ECF system. I further certify that I have
served the foregoing document via Electronic Mail on the following:

United States Department of Justice
Commercial Litigation Branch

Civil Division, 8th Floor

1100 L Street NW

Washington, DC 20530

E-mail: nationalcourts.bidprotest@usdoj.gov

Dated: June 18, 2024

s/ Daniel P. Graham
Daniel P. Graham
MCDERMOTT WILL & EMERY LLP

500 North Capitol Street, N.W.
Washington, DC 20001

202-756-8890

Counsel for AirBoss Defense Group, LLC

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