Adsync Technologies , Inc . v. Federal Aviation Administration

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 4, 2026 Decided July 24, 2026
Reissued August 20, 2026
No. 25-1148
ADSYNC TECHNOLOGIES , INC .,
P ETITIONER
v.
F EDERAL AVIATION ADMINISTRATION ,
R ESPONDENT
ADACEL S YSTEMS , INC .,
INTERVENOR
On Petition for Review of an Order
of the Federal Aviation Administration
Paul A. Allulis argued the cause for petitioner. With him
on the briefs was Samuel Finnerty.
Antonia R. Soares, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief were
Brett A. Shumate, Assistant Attorney General, and Steven
Michael Mager, Attorney.

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Elizabeth B. Deutsch argued the cause for intervenor in
support of respondent. With her on the brief was Maura E.
Smyles. Matthew S. Hellman and Arjun R. Ramamurti entered
appearances.
Before: M ILLETT, KATSAS and WALKER , Circuit Judges.
Opinion for the Court filed by Circuit Judge WALKER .
WALKER , Circuit Judge: Two competitors bid for a
government contract. Adsync lost. Adacel won.
Because Adacel had enjoyed an unfair competitive
advantage, Adsync was allowed to bid again. But after
Adsync’s do-over, Adacel still received the contract.
Adsync says it is entitled to a do-over of the do-over.
Under our deferential standard of review, it isn’t.
I
Air traffic control personnel can achieve proficiency on
airport tower operations through the Tower Simulation System,
a training program with both hardware and software
components. The system’s simulators “replicate airport
layouts allowing controllers to train for complex airport
configurations, . . . practice runway crossing coordination and
rehearse phraseology.” Tower Simulation System, FAA (May
13, 2025), https://perma.cc/TX42-HFZH. The software
features “enhanced graphics matching real-world tower views,
which help[ ] familiarize controllers with an airport’s layout,
runways, taxiways, and weather patterns.” Id.
By 2023, the hardware and software components both
needed an update. Over the course of about a month, the FAA

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issued two solicitations, one seeking “new hardware,
maintenance, and system support” for the Tower Simulation
System (the hardware contract) and the other seeking software
for use with the hardware (the software contract). Pet’r Add.
9.
Adacel won the software contract. And because it won
the software contract, it knew that its own MaxSim software
would be used under the related, not-yet-awarded hardware
contract.
Adsync wanted the hardware contract. But it didn’t know
that the FAA had chosen the MaxSim software. So Adsync
factored that uncertainty into its proposal.
Adsync’s hardware proposal came in at about $58.9
million. Adacel’s was about $52.5 million. Because of that
6.4-million-dollar difference, Adacel won the hardware
contract award.
Adsync filed a protest with the FAA’s Office of Dispute
Resolution for Acquisition. ODRA found that Adacel had an
unfair competitive advantage in its proposal for the hardware
contract because Adacel knew about the software contract,
while Adsync did not.
The FAA Administrator adopted ODRA’s
recommendation to give Adsync the opportunity “to revise any
aspect(s) of its proposal” in light of the software selection
decision. Pet’r Add. 34–35; A 1703 (adopting ODRA’s
recommendation). But because Adsync now knew Adacel’s
proposed price and Adacel was not allowed to submit a revised
proposal, the Administrator also required that Adsync “[l]imit
changes to only those due to identification of
the . . . software” and explain how any revision “relates to
th[at] fact.” Pet’r Add. 34–35 (emphases added); A 1703.

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Adsync submitted a revised proposal with $6.5 million in
price reductions. That made Adsync’s proposal a bit less
expensive than Adacel’s. Adsync said that it had reduced
costs by eliminating the risk premium that was unnecessary
now that Adsync knew what software the FAA had selected.
The FAA’s contracting team accepted most of Adsync’s
price reductions. But it rejected $734,697 in reductions for
contract line items like “cables, computer mice, and power
strips” as well as “monitors and computers.” A 1696. The
contracting team found that “basic hardware and computer
related items . . . work with any software.” A 1499. And the
contracting team concluded that Adsync had failed to
convincingly explain why some of its proposed reductions
correlated to its new knowledge about software.
The rejection of those price reductions made Adsync’s
proposal price slightly higher than Adacel’s. Seeing “no
difference” in quality “between” Adsync’s and Adacel’s offers,
a contracting authority found that “the FAA obtain[ed] better
value” from Adacel’s offer. A 1509. Thus, Adacel secured
the contract once again.
Adsync filed a second protest before ODRA, challenging
the technical and price evaluations and the best value
determination. It argued that its price reductions complied
with the FAA order from the first protest and that the rejection
of its reductions violated the Acquisition Management System
Guidance – a comprehensive set of standards governing FAA
contracting.
ODRA found that the contracting authority “had a rational
basis for determining that [a portion of] Adsync’s hardware
cost reductions were not related to mitigating the [software
knowledge disparity]” underlying the first protest. A 1696;
see 14 C.F.R. § 17.21(m). ODRA also found that compliance

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with the FAA’s remedial order required an analysis of
Adsync’s price reductions. Finally, ODRA found that a
rational basis supported the determination that Adacel offered
a better value.
Because of those factual findings, ODRA affirmed the
contracting team’s credibility determination and recommended
that the FAA deny Adsync’s second protest. The FAA
adopted ODRA’s findings and recommendations in its final
order. Adsync filed a petition for review of the FAA’s final
order in our court. See 49 U.S.C. § 46110.
II
We review the FAA Administrator’s adoption of ODRA’s
findings and recommendations. That review “is confined to
determining whether the FAA’s order . . . is arbitrary or
capricious or contrary to law.” Multimax, Inc. v. FAA, 231
F.3d 882, 886 (D.C. Cir. 2000). We “may reverse only if the
agency’s decision is not supported by substantial evidence, or
the agency has made a clear error in judgment.” Id. (cleaned
up).
The FAA’s findings of fact are “conclusive” provided they
are “supported by substantial evidence[.]”
49 U.S.C. § 46110(c). “Substantial evidence means more
than a scintilla of evidence.” Archer Western Contractors,
LLC v. DOT, 45 F.4th 1, 6 (D.C. Cir. 2022) (cleaned up).
Even if the record is “unclear,” the agency may rely on “such
relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Id. (cleaned up). That
“conclusion may be supported by substantial evidence even
though a plausible alternative interpretation of the evidence
would support a contrary view.” Id. (cleaned up).
III

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Adsync makes three arguments. First, it says the FAA
violated the Acquisition Management System Guidance for
“price realism.” AMS Guidance T.3.2.3.A.1(d)(3). Second,
it says the FAA lacked substantial evidence for rejecting
$734,697 of Adsync’s price reductions. Third, it says it
deserves bid and proposal costs.
We disagree.
A
The FAA did not violate the “price realism” provision of
the Acquisition Management System when it adjusted
Adsync’s proposed price. See AMS Guidance
T.3.2.3.A.1(d)(3).
The price realism provision bars “adjust[ment]” of an
“offeror’s proposed fixed price or time and material labor
rates.” AMS Guidance T.3.2.3.A.1(d)(3).2, .3(v). So if it
applied here, it might well have barred the FAA from rejecting
price reductions in Adsync’s revised proposal. But the price
realism provision does not apply here.
That’s because the agency conducts a price realism
analysis “when new requirements may not be fully understood
by the offeror, there are quality concerns, or past experience
indicates that contractors’ proposed prices have resulted in
quality or service shortfalls.” AMS Guidance
T.3.2.3.A.1(d)(3); see id. (listing the provision as one of several
“Price Realism Evaluation Steps”). Adsync’s rebid doesn’t
fall in any of those categories. So when the contracting team
rejected some of the price reductions in Adsync’s revised
proposal, it was not — and did not purport to be — conducting
a price realism analysis. Instead, it was implementing a
tailored remedial order following a bid protest. To implement
that order, the contracting team needed to evaluate and, if

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necessary, reject any of Adsync’s price reductions that went
beyond updating the bid in light of the now-known software.
Adsync has not pointed to any authority that would require us
to export a narrow guidance provision that applies solely to
price realism analysis to this entirely different context.
Adsync’s expansion of the price realism provision would
contravene “the fundamental [Acquisition Management
System] principle that favors competition.” A 1696. That
principle is the reason the FAA required Adsync to explain how
each of its price changes “related to” its new knowledge about
software selection, rather than letting Adsync use its
knowledge of Adacel’s bid in formulating its own competing
bid. A 1695–96. Only with that requirement could the FAA
eliminate the competitive advantage Adacel enjoyed in round
one without providing Adsync its own competitive advantage
in round two.
As a result, ODRA acted reasonably in not transforming
the price realism provision from a pro-competitive provision
into an anti-competitive provision by applying it to the
implementation of this tailored remedial order.
B
Substantial evidence supports ODRA’s determination that
the contracting authority “had a rational basis for rejecting the
$734,697 portion of the price reduction” as unrelated to the
identification of software for use under the hardware contract.
A 1696.
For starters, Adsync reduced the price of “basic
hardware . . . items that work with any software.” A 1499.
So right out of the gate, there was reason to doubt that Adsync
had added a risk premium to those items due to uncertainty
about software.

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Relatedly, Adsync reduced the price of 43-inch monitors
and 75-inch monitors but not 55-inch monitors. When
contracting personnel asked Adsync for an explanation,
Adsync said that “the 55-inch monitor did not have risk cost
apportionment assigned to it in the original proposal,” citing an
internal “Bill of Materials” (allegedly included in Adsync’s
original proposal) that featured a “risk” column at the outset for
each hardware item. A 1495–96, 1697.
The problem for Adsync is that it did not include the Bill
of Materials in the original proposal. Nor did Adsync include
it in the revised proposal. So there was no way for the
contracting authority to verify Adsync’s assertions about which
items were assigned a risk premium in the original proposal.
To make matters worse, Adsync itemized hardware
separately from the labor required to integrate the hardware
with software. If Adsync had limited the risk premium to the
labor costs for integration, Adsync could have easily explained
why its original proposal had included a risk premium and why
its revised proposal had eliminated it. Indeed, the pricing
team accepted Adsync’s price reductions to line items “that
ha[d] labor components to them.” A 1499. But the
contracting team reasonably concluded that Adsync had failed
to explain why “any risk cost [would be] added to the price
of . . . commercially available hardware items.” A 1501.
When all that evidence is taken together — the
inexplicably disparate treatment of monitors based on their
size, the missing Bill of Materials, and the separate itemization
of the labor required to integrate hardware with
software — more than a scintilla of evidence supports ODRA’s

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conclusion that Adsync failed to fulfill the remedial order’s
requirement to justify the relevant price changes.1
C
We deny Adsync’s request for bid and proposal costs.
In bid protests, bid and proposal costs are “awarded to a
protestor to provide relief for its wasted efforts in bidding on
an unfair, erroneous, or illegal procurement.” Q Integrated
Companies, LLC v. United States, 132 Fed. Cl. 638, 642
(2017). ODRA has “broad discretion to recommend and
impose protest remedies that are consistent with the
[Acquisition Management System] and applicable law,” which
“may include” “[a]ward bid and proposal costs[.]”
14 C.F.R. § 17.23(a), (7).
Adsync points to ODRA’s findings and recommendations
following the first protest, which Adsync won. At that time,
ODRA said that “it would be a windfall for Adsync to receive
both the award and its bid and proposal costs.” Pet’r Add. 33.
According to Adsync, that statement implies that ODRA
“would have awarded Adsync [the] costs but for its assumption
that Adsync would ultimately be awarded the contract[.]”
Pet’r Br. 65.
But ODRA neither made that assumption nor implied that
the assumption was the reason for its decision. Rather, ODRA
acknowledged existing uncertainties and refrained from
1 Adsync argued that the FAA’s best value and award decision
lacked a rational basis because both depended on the rejection of
certain price reductions. Because we’ve rejected the premise for
Adsync’s argument — its challenge to the rejection of the price
reductions — the analysis ends there.

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awarding bid and proposal costs where there was a possibility
that Adsync would win the contract award following remedial
measures. And Adsync has failed to develop any legal
argument that would support the award of bid and proposal
costs even if we otherwise deny Adsync’s petition.
* * *
The petition is denied.
So ordered.

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