BANNUM, INC. v. USA

Filing 43

PUBLISHED OPINION: Granting Plaintiff's Motion to Supplement the Administrative Record. Signed by Judge Thomas C. Wheeler. (ld3)

BAN NU M, INC. v. USA

Do c. 43

In the United States Court of Federal Claims
N o . 09-546C (Filed Under Seal: September 29, 2009) (R e is s u e d for Publication: October 13, 2009)1 **************************************** * * B A N N U M , INC., * * Plaintiff, * * v. * * T H E UNITED STATES, * * Defendant, * * and * * D IS M A S CHARITIES, INC., * * Defendant-Intervenor. * * **************************************** *

Post-award Bid Protest; Supplementing the Administrative Record; Documents Before the Procuring Agency and Included in the GAO Protest Record; RCFC, Appendix C, ¶22(u); 31 U.S.C. § 3556.

Michael A. Gordon, Michael A. Gordon PLLC, Washington, DC, for Plaintiff. Delisa M. Sanchez, with whom were Tony West, Assistant Attorney General, Jeanne E. D a v id s o n , Director, and Franklin E. White, Jr., Assistant Director, United States Department o f Justice, Civil Division, Commercial Litigation Branch, Washington, D.C., Dionis M. G a u v in , Bureau of Prisons, Of Counsel, for Defendant.

The Court issued this opinion under seal on September 29, 2009, and gave the parties seven days, until October 6, 2009, to submit any proposed redactions of competition-sensitive, proprietary, confidential or other protected information. The Court did not receive any proposed redactions by the required date. However, upon the Court's further inquiry to confirm that no redactions would be requested, the Court then received on October 8, 2009 untimely proposed redactions from both Plaintiff and Defendant. These filings failed to comply with the Court's direction that "any proposed redactions must be well supported with an explanation of the specific reasons and authorities." Op. at 7. The Court held a telephone conference with counsel of record on October 9, 2009 to hear the parties' positions on the proposed redactions, but found such positions lacking in merit. Accordingly, this opinion is released in its entirety.

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A le x D. Tomaszczuk and Daniel S. Herzfeld, Pillsburg Winthrop Shaw Pittman LLP, M cL ea n , VA, for Defendant-Intervenor.

O P IN I O N AND ORDER WHEELER, Judge. O n August 19, 2009, Plaintiff Bannum, Inc. ("Bannum") filed a post-award bid protest in this Court. On September 8, 2009, counsel for Bannum filed a motion to supplement the a g e n cy's administrative record. In the bid protest, Bannum contests the award of a contract b y the Bureau of Prisons ("BOP") to Dismas Charities, Inc. ("Dismas") for the performance o f Residential Reentry Center ("RRC") services in Charleston, West Virginia. An RRC is m o re commonly known as a "halfway house" for use by prisoners about to be released for r e t u rn to independent living. Before filing in Court, Bannum had filed two protests of the a w a rd to Dismas at the Government Accountability Office ("GAO"). Bannum seeks to supplement the administrative record with letters and emails relating to cure notices and a show cause notice issued in another Bannum contract for halfway house s e rv ic e s in Austin, Texas. The documents Bannum wishes to add to the record comprised E x h ibit 2 to Bannum's November 18, 2008 Comments during the first GAO protest. Further, B a n n u m included these additional documents as Exhibit 33 in its initial filing before this C o u rt. See Bannum's Aug. 19, 2009 Mem. and P. & A. in Supp. of TRO, Prelim. and P e r m a n e n t Inj. Relief and Declaratory J. F o r the reasons stated below, Plaintiff's motion to supplement the administrative re c o rd is GRANTED. Plaintiff also sought, in the alternative, to strike Tab 54 of the a d m in is tra tiv e record. Since the Court grants Plaintiff's motion to supplement the record, th e Court does not need to address Plaintiff's proposed alternative request. Accordingly, Tab 5 4 shall remain in the administrative record. B a c k g ro u n d B a n n u m seeks the addition of 12 documents to the administrative record in this posta w a rd protest. The documents relate to Bannum's performance under Contract No.

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D J B 2 0 0 8 1 1 , a BOP contract for RRC services in Austin, Texas.2 On March 2, 2007, the B O P terminated Bannum's Austin contract for default. Administrative Record ("AR") 2206. O f f e ro rs competing for the Charleston RRC services contract ­ the subject of B a n n u m ' s bid protest before the Court ­ were required to submit their five most relevant c o n tra c ts as references for BOP's evaluation. AR 199. Bannum complied with this re q u ire m e n t, but did not include the defaulted Austin contract among the five references in its proposal. Without notice to Bannum, the BOP's initial Source Selection Authority ( " S S A " ) , Sheila Makle, considered the Austin contract in evaluating Bannum's past p e rf o rm a n c e, one of several evaluation factors in the BOP's award decision. AR 1768-69, 1 7 7 4 . The SSA, in evaluating the Austin contract, relied upon a summary of the default term ination written by the BOP contracting officer for that contract. Id. This summary s p e c if ic a lly referenced the documents Bannum now seeks to have included in the a d m in is tra tiv e record. AR 2206. The SSA found that Bannum's termination for default on th e Austin contract demonstrated a "lack of management ability," and thus the SSA was "not a s confident about Bannum's ability to successfully perform" on the Charleston contract. AR 1 7 6 9 . Before an award of the Charleston RRC services contract had been made, the BOP ap p o inted a new SSA, Rebecca Canfield. Ms. Canfield decided to reevaluate the first SSA's p a st performance conclusions and in so doing, she also noted Bannum's previous termination f o r default on the Austin contract. AR 1106-07. Ms. Canfield cited Bannum's default as one o f two factors placing Bannum in a lower performance rating and also justifying her Source S e le c tio n Decision to award the RRC contract to the higher-priced bidder, Dismas Charities. A R 1722-23. On October 6, 2008, Bannum protested the award to Dismas before the GAO. In its in itia l decision sustaining Bannum's protest and recommending corrective action, the GAO s ta te d : "[W]hile we agree with the protestor that the circumstances that led to the termination f o r default of its Austin contract are not present here, we nonetheless think that it was

Bannum asks for the inclusion of the following documents in the administrative record, all of which relate to its performance on Contract No. DJB200811 : (1) Bannum legal counsel's letter to a BOP contracting officer (November 6, 2006); (2) a Bannum consultant's email to Bannum's President, John D. Rich, and Bannum's legal counsel, Michael Gordon (November 6, 2006); (3) a Bannum consultant's letter to the City of Austin (September 1, 2006); (4) a project application filed with the City of Austin on behalf of Bannum; (5) a letter from Mr. Rich to BOP contracting officer Annette Jenkins (January 23, 2007); (6) a letter from BOP's Ms. Jenkins to Bannum's Mr. Rich (January 24, 2007); (7) a letter from Mr. Gordon to Ms. Jenkins, in response to the January 24, 2007 letter (February 2, 2007); (8) an email from Bannum's consultant to Mr. Gordon and Mr. Rich (January 31, 2007); (9) an email from Bannum's consultant to Mr. Gordon and Mr. Rich (February 1, 2007); (10) a letter from Mr. Gordon to BOP's Ms. Jenkins (February 20, 2007); (11) a letter from Mr. Gordon to BOP's Ms. Jenkins (February 23, 2007); and (12) a letter from Mr. Gordon to BOP's Ms. Jenkins (March 2, 2007).

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re a so n a b le for the contracting officer to have considered Bannum's handling of the situation a s showing a lack of management ability. . . ." AR 1966. Pursuant to the GAO's r e c o m m e n d a tio n , the BOP re-evaluated portions of both Bannum's and Dismas Charities' p ro p o s a ls , though the SSA elected not to re-evaluate the past performance factor. AR 20141 5 . The BOP again selected Dismas as the awardee and Bannum again protested the award. A R 1723. The GAO issued another decision denying Bannum's second protest, but again a c k n o w le d g e d that the SSA's reliance on the Austin default termination in evaluating B an n u m 's past performance was appropriate. AR 2083. In its second decision, the GAO o b s e r v ed that the SSA reasonably concluded from the Austin default termination that B a n n u m lacked the required managerial ability to perform effectively on the Charleston c o n tra c t, the subject of the bid protest now before the Court. Id. D ism as opposes Plaintiff's motion to supplement, arguing that the documents Bannum o f f ers for inclusion were not considered by the BOP in conducting its evaluation of p ro p o s a ls and they provide no context for this Court in understanding the GAO's decision to deny Bannum's protest. See Def.-Intervenor's Resp. to Pl.'s Mot. to Supplement Admin. R . at 2. The administrative record, however, makes clear that Bannum's termination for d e f au lt in Austin is a relevant factor in the BOP's award analysis. AR 1220-21, 1722-23. Ind ee d , the documents Bannum seeks to include are referenced in the administrative record in a summary of the Austin termination, and the BOP relied upon this very summary. AR 1 7 6 8 , 2206. The GAO also considered Bannum's Austin default termination in its own d ec isio n assessing the BOP's award of the Charleston contract to Dismas. Given the GAO's d is c u s s io n of the default's significance to the award decision, it is probable that the GAO c o n sid e re d these documents in reaching its decision. AR 1966. T h e Government asserts that Bannum's requested addition to the record is merely an im p ro p e r and untimely attempt to challenge the basis of BOP's termination for default, and th a t the administrative record is sufficiently complete for this Court to conduct a meaningful re v ie w . See Def.'s Opp'n to Bannum's Mot. to Supplement Admin. R. at 3, 5. As discussed b e lo w , the Court disagrees. In order to review the contract award protested in this case, all inf o rm atio n considered relevant by the BOP or the GAO also will be relevant to the Court's re v ie w . D is c u ss io n " A s a general rule, in determining whether an agency's actions are arbitrary or irra tio n a l, the `focal point for judicial review [of the agency's decision] should be the a d m in is tra tiv e record already in existence, not some new record made initially with the re v ie w in g court.'" Knowledge Connection Inc. v. United States, 79 Fed. Cl. 750, 759 (2 0 0 7 )(q u o tin g Camp v. Pitts, 411 U.S. 138, 142 (1973)(alteration in original). It cannot be -4-

ig n o r e d though that the "administrative record is a fiction." CCL Serv. Corp. v. United States, 4 8 Fed. Cl. 113, 118 (2000). The administrative record is not "a documentary record m a in ta in e d contemporaneously with the events or actions included in it. Rather, the a d m in is tra tiv e record is a convenient vehicle for bringing the decision of an administrative b o d y before a reviewing agency or a court." Id. In bid protests, the GAO receives a record of the procurement from the agency. See 4 C.F.R. § 21.3(c), (d) (2009). The Competition in Contracting Act ("CICA") requires c e rta in agency reports to be included as part of the administrative record before this Court, b u t CICA does not otherwise limit the content of the administrative record. 31 U.S.C. § 3556 (2 0 0 6 ). The GAO, as in this case, may receive additional evidentiary submissions from both th e agency and the protestor. See 4 C.F.R. § 21.3(I). Indeed, a protestor may use a GAO p ro te st to submit evidentiary materials that were not presented to the agency before it reached a decision on an award. In certain circumstances, documents submitted during the GAO p r o tes t, particularly if relevant to the GAO's findings, might prove useful to the Court in a ss e ss in g the contract award. See Holloway & Co. v. United States, 87 Fed. Cl. 381, 392 (2 0 0 9 ) ("It would be strange for this Court to be addressing a protest on a more truncated re c o rd than that which had been before GAO."). The Court recognizes that any supplementation of the administrative record in bid p ro te st actions "`must be extremely limited,' lest the admission of evidence not considered b y the agency below and its consideration by the Court convert the `arbitrary and capricious' s ta n d a rd into effectively de novo review." Murakami v. United States, 46 Fed. Cl. 731, 735 (20 0 0 ); see also Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1379 (Fed. Cir. 2 0 0 9 ) ("While we recognize the need for an adequate record during judicial review, the p a rtie s' ability to supplement the administrative record is limited."). A "limited" s u p p le m e n ta tio n , however, does not mean that supplementation of the record is prohibited. T h e Court has determined that it is appropriate in this instance to exercise its d is c re tio n and add the documents submitted by Bannum to the administrative record. A lth o u g h the merits of Bannum's protest have yet to be addressed, without an examination o f the evidence supporting its position, this Court cannot properly assess "whether the c o n tra c tin g agency provided a coherent and reasonable explanation of its exercise of d is c re tio n ." Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1 3 3 3 (Fed. Cir. 2001) (quoting Latecoere Int'l, Inc. v. United States Dep't of Navy, 19 F.3d 1 3 4 2 , 1356 (11th Cir. 1994)). In particular, this Court's rules explicitly provide for the inclusion of the record before th e GAO, to the extent it is more extensive, to the administrative record. The Rules of the U n ited States Court of Federal Claims ("RCFC"), Appendix C, ¶ 22, specify that "core -5-

d o c u m e n ts relevant to a protest case may include, as appropriate," twenty-one categories of m a te ria ls , the last of which is the "record of any previous administrative or judicial p ro c e ed in g relating to the procurement, including the record of any other protest of the p ro c u re m e n t." Id. at ¶ 22(u). Each of the documents proffered by Bannum relates to the p ro tes t of the Charleston contract award, which was before the GAO, and therefore, falls into th is category. Accordingly, under the Court's rules, the administrative record should include th e se documents. Furthermore, the purpose of the rule at RCFC Appendix C, ¶ 22, is to e n s u re that the Court at least has benefit of the same record that was before the GAO. M a te ria ls considered by the GAO should, therefore, also be part of the record reviewed by t h i s Court. See Cubic Applications, Inc. v. the United States, 37 Fed. Cl. 339, 345 (1997) (ad m ittin g the entire record before the GAO as the administrative record). T h e Federal Circuit's recent decision in Axiom, does not undermine the Court's rules f o r determining the content of the administrative record. Axiom merely cautions that supp lem en t atio n should occur "only if the existing record is insufficient to permit meaningful re v ie w consistent with the APA." 564 F.3d at 1381. The Federal Circuit found that the trial c o u rt erred in permitting supplementation of the record because it "add[ed]. . . documents to th e record without evaluating whether the record before the agency was sufficient to permit m e a n in g f u l review." Id. at 1380. The trial court in Axiom,, according to the Federal Circuit, " m a d e clear that it would freely allow the parties to supplement the record `with whatever th e y want,' and by doing so, failed to make the required threshold determination of whether a d d itio n a l evidence was necessary." Id. T h e documents at issue here, even though they concern a default termination on a n o th e r contract, are relevant to the current protest because the agency's SSAs and the GAO relied upon them in assessing Bannum's past performance and thereby, its ability to perform th e Charleston contract. Indeed, the BOP opened the door to the Court's consideration of the A u s ti n contract. The BOP's analysis included a summary memorandum that explicitly ref ere n ce d the documents Bannum asks to include in the administrative record. The "primary f o c u s of the court's review should be the materials that were before the agency when it made its final decision." Cubic Applications, Inc. v. United States, 37 Fed. Cl. 345, 349-50 (Feb. 2 5 , 1997). In addition, the Court concludes that, without Bannum's additional documents, it may n o t have a complete understanding of the issues before it and would be analyzing Bannum's c la im s in this bid protest in a vacuum. The Court cannot make a reasoned decision without u n d e rs ta n d in g all of the circumstances implicated in the case. The materials proffered by B a n n u m relate to the BOP's assessment of Bannum's past performance, which is relevant to this Court's analysis of the BOP's award decision. See Global Computer Enter., Inc. v. U n ite d States, 88 Fed. Cl. 52, 63 (2009) (determining post-Axiom that supplementation of -6-

th e record is proper where the disappointed bidder's proffered materials are significant to u n d erstan d in g the issues in the bid protest action). B a n n u m should be permitted to argue that the circumstances surrounding the te rm in a te d Austin contract and the Charleston contract are sufficiently distinct as to render th e Austin contract irrelevant as a predictor of future performance. Because the documents B an n u m proffers would help the Court in evaluating the reasonableness of the agency's a w a rd , they shall be admitted. In reaching this decision, the Court will not permit Bannum to use the materials it has proffered to argue the merits of the BOP's default termination on th e Austin contract. Yet, because the BOP has, at a minimum, relied upon a document re f ere n c in g the materials Bannum now proffers, these materials should be included in any m e a n in g f u l review by the Court of Bannum's argument and the BOP's award decision. C o n c lu s io n B ase d upon the forgoing, Plaintiff's Motion to Supplement the Administrative Record is GRANTED. On or before October 6, 2009, counsel for the parties shall carefully review th is opinion for competition-sensitive, proprietary, confidential or other protected in f o rm a tio n and submit to the Court proposed redactions, if any, before the opinion is re le a se d for publication. The Court has prepared the opinion with the intent of disclosing the e n tire contents to the public. Therefore, any proposed redactions must be well supported w ith an explanation of the specific reasons and authorities. IT IS SO ORDERED. s / Thomas C. Wheeler THOMAS C. WHEELER Judge

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