## Facts

- The Defense Personnel Support Center issued an RFP for design and manufacture of waterproof cold-weather camouflage parkas.
- Offerors had to submit two product demonstration models (PDMs): one for hydrostatic-resistance (waterproofness) testing and one for visual and dimensional examination.
- The RFP listed four PDM evaluation factors—construction quality, workmanship, visual/dimensional compliance, and test results—but did not disclose relative importance.
- The RFP did not state that failing hydrostatic-resistance testing would automatically disqualify an offeror; it indicated only that a noncompliant PDM could result in rejection.
- Isratex submitted a timely proposal with both required PDMs.
- Isratex’s hydrostatic-resistance PDM failed the test, but the proposal was otherwise rated acceptable on construction quality, workmanship, and visual/dimensional criteria.
- The agency rejected Isratex solely due to the hydrostatic-resistance failure and refused to permit a revised PDM.
- Other offerors with different PDM deficiencies (e.g., dimensional or workmanship problems) were allowed to submit revised PDMs and remain in the competition.
- Discovery testimony from the contracting officer indicated the agency treated hydrostatic-resistance as substantially more important and effectively a mandatory pass/fail gate, despite not stating this in the RFP.

## Issues

1. Whether the agency acted arbitrarily, capriciously, or contrary to law by applying undisclosed evaluation weighting and an unstated pass/fail requirement for hydrostatic-resistance testing.
2. Whether the agency acted unlawfully by treating offerors unequally when it allowed some to revise deficient PDMs but denied Isratex the same opportunity.
3. Whether Isratex showed prejudice sufficient to justify injunctive relief.

## Decision

- The Claims Court held the agency’s evaluation and rejection of Isratex were improper.
- The court found the agency relied on an undisclosed evaluation approach by treating hydrostatic-resistance as determinative without disclosing that in the solicitation.
- The court found unequal treatment where the agency allowed revised PDMs for other offerors’ deficiencies but denied Isratex a chance to correct its PDM.
- The court found Isratex was prejudiced because, absent these errors, it had a substantial chance to remain in competition and potentially receive the award.
- The court granted injunctive relief, enjoining further award actions unless and until the agency corrected the procurement defects and afforded Isratex a fair opportunity under disclosed, consistently applied criteria.

## Legal Principles

- An agency must evaluate proposals in accordance with the solicitation; it may not apply materially different, undisclosed weighting or convert an evaluation factor into an unstated pass/fail requirement.
- The government must treat offerors equally; allowing some offerors to cure deficiencies while denying others a similar opportunity, without a rational basis consistent with the solicitation, is arbitrary and capricious.
- A bid protester must show both a significant procurement error and prejudice, commonly framed as a substantial chance of award but for the error.
- Where undisclosed, outcome-determinative evaluation practices or unequal treatment compromise competition, injunctive relief may be warranted to restore fair competition.

## Conclusion

The court enjoined award because the agency used an undisclosed pass/fail and heavily weighted approach to hydrostatic-resistance testing and applied inconsistent corrective opportunities among offerors, and Isratex showed prejudice from those procurement errors.


Isratex, Inc. v. United States, 25 Cl. Ct. 223 (1992)